EX10.12 EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement is entered into this 4th day of April 2005 and effective as of April 1, 2005, between Axion Power International, Inc., a Delaware corporation, having a place of business at 100 Caster Avenue, Vaughan, Ontario Canada (the “Company”) and Thomas Granville of Buffalo, New York, (the “Executive”).

WHEREAS, the Company is engaged in research and development relating to a novel technology for a supercapacitor/battery hybrid that replaces the lead-based negative electrode in a lead-acid battery with a highly permeable nanoporous carbon electrode; and

WHEREAS, the Company is desirous of making appropriate arrangements for the management of its business affairs; and

WHEREAS, the Company is desirous of retaining the Executive to serve as its Chief Executive Officer on the conditions set forth herein for the entire term of this Agreement, and

WHEREAS, in such capacity, the Executive will have access to all of the business methods and confidential information relating to the Company and its business activities including, but not limited to, its proprietary techniques and technologies, its operational and financial matters, its business and financial and development plans, its personnel training and development programs and its industry relationships.

NOW THEREFORE, in consideration of the promises and of the mutual covenants and agreements herein contained, the parties hereto agree as follows:

1.   Pre-existing Employment Agreement. The Company has been advised that (1) the Executive is subject to a long-term employment agreement with Gallagher Elevator Co., Buffalo, New York; and (2) Gallagher Elevator is willing to authorize the Executive to accept a position as the Company’s Chief Executive Officer for a maximum period of two years, but only on the condition that the Company reimburse Gallagher Elevator for the reasonable cost of hiring a suitable temporary replacement for the Executive. The Company further acknowledges that as a condition of this Agreement it will be required to pay the sum of $14,500 per month directly to Gallagher Elevator in satisfaction of the Executive’s ongoing obligations under his prior employment agreement. With the exception of his obligations to Gallagher Elevator, Executive represents and warrants to the Company that he is free to accept employment hereunder and that he has no other obligations or commitments of any kind to anyone that would in any way hinder or interfere with his acceptance of, or the full, uninhibited and faithful performance of this Agreement, or the exercise of his best efforts as an executive officer of the Company.

2.   Employment and Duties. The Company shall employ the Executive as the Chief Executive Officer of the Company and its wholly owned subsidiary Axion Power Corporation, a Canadian Federal corporation, or in such other comparable executive capacity as the Board of Directors of the Company shall specify from time to time. The Executive shall be employed by and will work for the Company at Company's office in the Toronto Metropolitan Area. The

Executive’s initial responsibilities shall include all of the duties and responsibilities of the Chief Executive Officer as described in the By-laws of the Company (as supplemented by a more detailed job description that will subsequently be negotiated between the Executive and the Board of Directors), as the same may be amended from time to time. In addition, the Executive shall, perform such other mutually agreeable functions and duties as the Board of Directors may entrust or delegate to him from time to time.

3.   Conduct of Executive. During the entire Term of this Agreement, the Executive shall devote his full business time, effort, skill and attention to the affairs of the Company and its subsidiaries, will use his best efforts to promote the interests of the Company, and will discharge his responsibilities in a diligent and faithful manner, consistent with sound business practices. During the entire Term of this Agreement, the Executive shall agree to serve as a member of the Company’s Board of Directors if appointed to such position by the board of directors or elected to such position by the shareholders of the Company. In furtherance of the foregoing:

(a)   The Executive understands and agrees that he owes the Company a fiduciary duty, without limiting any other obligations or requirements that are imposed on the Executive elsewhere in this Employment Agreement or by law. As such, the Executive shall occupy a position of and commit to the highest degree of trust, loyalty, honesty and good faith in all of his dealings with and on behalf of the Company.

(b)   The Executive represents that his employment by the Company will not conflict with any obligations which he has to any other person, firm or entity. The Executive specifically represents that he has not brought to the Company (during the period before the signing of this Agreement) and he will not bring to the Company any materials or documents of a former or present employer, or any confidential information or property of any other person, firm or entity.

(c)   The Executive shall not, without disclosure to and approval of the Board of Directors of the Company, directly or indirectly, assist or have an active interest in (whether as a principal, stockholder, lender, employee, officer, director, partner, consultant or otherwise) in any person, firm, partnership, association, corporation or business organization, entity or enterprise that competes with or is engaged in a business which is substantially similar to the business of the Company except that ownership of not more than 1% of the outstanding securities of any class of any publicly-held corporation shall not be deemed a violation of this sub-paragraph 3(c).

(d)   The Executive shall promptly disclose to the directors of the Company, in accordance with the Company’s policies, full information concerning any interests, direct or indirect, he holds (whether as a principal, stockholder, lender, Executive, director, officer, partner, consultant or otherwise) in any business which, as reasonably known to the Executive purchases or provides services or products to the Company or any of its subsidiaries, provided that the Executive need not disclose any such interest resulting from ownership of not more than 1% of the outstanding securities of any class of any publicly-held corporation.

(e)   The Executive shall not disclose to any person or entity (other than to the Company’s Board of Directors or to others as required, in his judgment, in the due performance of his duties under this Agreement) any confidential or secret information with respect to the business or affairs of the Company or any of its subsidiaries or affiliates.

For a period of one year after termination for cause, the Executive shall not engage in any business or activity that is directly competitive with the business of the Company, including the activities described above. Notwithstanding the generality of the foregoing, nothing in this Agreement shall be deemed to preclude the Executive from participating in other business opportunities if and to the extent that (i) such business opportunities are not directly competitive with the business of the Company, (ii) the Executive’s activities with respect to such opportunities do not have a material adverse effect on the performance of the Executive’s duties hereunder, and (iii) the Executive’s activities with respect to such opportunity have been fully disclosed in writing to the Company’s Board of Directors.

4.   Conditions of Employment.

(a)   Term of Employment. Unless terminated earlier in accordance with the provisions of this Agreement, the Company will employ the Executive for a two-year period commencing on April 1, 2005 and terminating on March 31, 2007 (the “Term”). Not less than 90 days before the termination of this Agreement, the Company and the Executive shall open negotiations for a suitable contract renewal. In the absence of a renewal contract, this agreement shall be automatically renewed for an additional two-year term.

(b)   Place of Employment. The Executive shall occupy offices at the Company’s principal executive office in the Toronto Metropolitan Area (or at such other Company office as the Company and the Executive may agree from time to time) which will be maintained for his use by the Company at the Company’s expense. The Executive shall not be required during the Term of this Agreement to relocate from the Toronto Metropolitan Area to any other business location maintained by the Company although the Executive expressly agrees that regular travel shall be necessary as part of his duties.

(c)   Ownership of Company Records and Reports. The Executive shall not, except in the performance of his duties hereunder, at any time or in any manner make or cause to be made any copies, pictures, duplicates, facsimiles, or other reproductions or recordings or any abstracts or summaries of any reports, studies, memoranda, correspondence, manuals, records, plans or other written or otherwise recorded materials of any kind whatever belonging to or in the possession of the Company, or of any subsidiary or affiliate of the Company, including but not limited to materials describing or in any way relating to the Company’s business activities including, but not limited to, its proprietary techniques and technologies, its operational and financial matters, its business and financial and development plans, its personnel training and development programs and its industry relationships. The Executive shall have no right, title or interest in any such material, and the Executive agrees that, except in the performance

of his duties hereunder, he will not, without the prior written consent of the Company remove any such material from any premises of the Company, or any subsidiary or affiliate of the Company, and immediately upon the termination of his employment for any reason whatsoever Executive shall return to the Company all such material in his possession.

(d)   Company's Trade Secrets . Without the prior written consent of the Company, the Executive shall not at any time (whether during or after his employment with the Company) use for his own benefit or purposes or for the benefit or purposes of any other person, firm, partnership, association, corporation or business organization, entity or enterprise, or disclose in any manner to any person, firm, partnership association, corporation or business organization, entity or enterprise, except in the performance of his duties hereunder, any trade secrets, or any information data, know-how or knowledge constituting trade secrets belonging to, or relating to the affairs of the Company, or any subsidiary, former subsidiary, or affiliate of the Company.

(e)   Inventions, Copyrights. Trademarks . The Executive shall promptly disclose to the Company (and to no one else) all improvements, discoveries, ideas and inventions that may be of significance to the Company, or any subsidiary or affiliate of the Company, made or conceived alone or in conjunction with others (whether or not patentable, whether or not made or conceived at the request of or upon the suggestion of the Company or any subsidiary or affiliate of the Company during or out of his usual hours of work or in or about the premises of the Company or elsewhere) while in the employ of the Company or of any subsidiary or affiliate of the Company, or made or conceived within one year after the termination of his employment by the Company or of any subsidiary or affiliate of the Company if resulting from, suggested by or relating to such employment. All such improvements, discoveries, ideas and inventions shall be the sole and exclusive property of the Company and are hereby assigned to the Company. At the request of the Company and at its cost, the Executive shall assist the Company, or any person or persons from time to time designated by it, to obtain the copyright, trademark and/or grant of patents in the United States and/or in such other country or countries as may be designated by the Company, covering such improvements, discoveries, ideas and inventions and shall in connection therewith and in connection with the defense of any patents execute such applications, statements or other documents, furnish s