Axion Power International Inc (OTC Bulletin Board: AXPW) has announced a definitive Memorandum of Understanding for a multi-year, global supply relationship with Alpharetta, GA-based Exide Technologies (Nasdaq: XIDE) for the purchase of Axion PbC(R) batteries and other Axion Technologies(TM). Axion is a developer of advanced batteries and energy storage products that incorporate patented lead carbon battery PbC Technology(TM). Exide Technologies is a global leader in stored electrical energy solutions. The Company's shares closed up $0.76 at $1.65, an 85% increase on the day.
According to the terms of the agreement, three consecutive phased purchase- and test-periods will commence immediately, with Axion supplying an escalating number of batteries to Exide on a monthly basis. The first two phases will span 18 months and if successful the parties will move to the final 2 phases of the agreement. The quantity of the products supplied will need to achieve certain defined milestones, commensurate with what the market potentials could be, over the remaining 2.5 year period of the agreement if exclusivity is to be maintained. Shipments delineated under the agreement would begin in Phase I, which is scheduled to last 10 months and would ramp up at each phase point, assuming successful testing. No further details on anticipated shipments and schedules were released.
The agreement will make Exide Axion Power's principal battery original equipment manufacturer (OEM) customer. Axion will still retain the limited ability to market its PbC battery to one other lead-acid battery manufacturer under an existing agreement and Axion will be able to sell all its products to current customers, and into certain large potential markets on which they have chosen to concentrate.
