FIRST AMENDED AND RESTATED TRUST AGREEMENT FOR THE BENEFIT OF THE SHAREHOLDERS OF MEGA-C POWER CORPORATION

(a)	“Amendment” means this First Amended and Restated Trust Agreement for the Benefit of the Shareholders of Mega-C Power Corporation dated February 16, 2005.

(b)	“Axion Shares” means (i) the 7,327,500 shares of the Grantor’s common stock that were held by the Trust on the date of this Amendment, and (ii) the 500,000 additional shares of the Grantor’s common stock that will be delivered to the Trust as provided for in this Amendment.

(c)

“Applicable Laws” means any statute of the United States, Canada, the State of Nevada or the Province of Ontario, together with any rules and regulations made thereunder and the orders or rulings of any securities commission, regulatory authority, agency or court applicable to the affairs of Mega-C or the sale and disposition of the Axion Shares.

(d)

“Bankruptcy Court” means the U.S. Bankruptcy Court for the District of Nevada, which shall if required be the principal forum for the resolution of issues relating to the due authorization, validity and fully paid and nonassessable status of Mega-C Shares; the identities, ownership interests and amount paid by Mega-C Shareholders in connection with the purchase of Mega-C Shares; and the rights of any person to claim the legal status of a Mega-C Shareholder.

(e)	“Bankruptcy Trustee” means the independent trustee who has been or will be appointed by the Bankruptcy Court to manage Mega-C and its affairs during the Chapter 11 Case.

(f)

“Beneficiary” means a Mega-C Shareholder who is specifically identified in a final order of either the Bankruptcy Court or the Nevada Court, but only to the extent that such final order specifies the identity, interest and consideration paid by the Beneficiary in connection with his acquisition of Mega-C Shares.

(g)	“Chapter 11 Case” means the involuntary Chapter 11 reorganization of Mega-C Power Corporation (Case No. BK-N-04-50962) that is presently pending before the Bankruptcy Court.

(h)

“Creditor” means any person who has loaned money or extended credit to Mega-C or to whom a debt is owed by Mega-C, provided that for purposes of this Amendment the term shall also include all holders of claims for administrative and operating expenses incurred by Mega-C after the commencement of the Chapter 11 Case and all persons other than the Trust who have loaned money or extended credit to Mega-C for the purpose of paying such administrative and operating expenses.

(i)	“Florida Court” means the Circuit Court of Pinellas County, Florida, which shall be the sole forum for the resolution of disputes arising under the law of trusts and the interpretation of this Amendment.

(j)	“Grantor” means Axion Power International, Inc., a Delaware corporation formerly known as Tamboril Cigar Company, and its directors, officers, affiliates, successors and assigns.

(k)	“Mega-C” means Mega-C Power Corporation, a Nevada corporation.

(l)	“Mega-C Share” means a duly authorized, validly issued, fully paid and nonassessable share of the no par value common stock of Mega-C.

(m)

“Mega-C Shareholder” means any person who holds a stock certificates issued by Mega-C and may be entitled to classification as a Beneficiary of the Trust if either the Bankruptcy Court or the Nevada Court determines that the shares represented by his certificates are duly authorized, validly issued, fully paid and nonassessable Mega-C Shares.

(n)

“Nevada Court” means the District Court of the State in the county where Mega-C’s registered office in the State of Nevada is located, which is an appropriate forum for the resolution of any disputes that are not fully and finally adjudicated by the Bankruptcy Court and relate to the due authorization, validity and fully paid and non-assessable status of Mega-C Shares; the identities, ownership interests and amount paid by Mega-C Shareholders in connection with their purchase of Mega-C Shares; and the rights of any person to claim the legal status of a Mega-C Shareholder.

(o)

“Original Trust Agreement” means the agreement dated December 31, 2003 between the Grantor and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ styled “Trust Agreement for the Benefit of the Shareholders of Mega-C Power Corporation,” as amended by an agreement dated March 24, 2004 between ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Grantor and styled “Succession Agreement Pursuant to the Provisions of the Trust Agreement for the Benefit of the Shareholders of Mega-C Power Corporation.”

(p)	“Trust” means the Trust for the Benefit of the Shareholders of Mega-C Power Corporation, which was established on December 31, 2003 and shall hereafter be subject to the terms, conditions and provisions of this Amendment.

(q)	“Trustee” means ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual resident of Dunedin, Florida and her successors or assigns under the terms of this Amendment.

(a)	Sold by the Trustee in accordance with this Amendment;

(b)	Distributed to Mega-C Shareholders in accordance with this Amendment;

(c)	Deposited into the registry of a court in accordance with this Amendment; or

(d)	Surrendered to the Grantor in accordance with this Amendment.

(a)	The identity of each person who has established to the satisfaction of the Bankruptcy Trustee that he is the sole lawful owner of duly authorized, validly issued, fully paid and nonassessable Mega-C Shares;

(b)	The number of Mega-C Shares owned by each person identified in the shareholders list; and

(c)	The average price per share paid by each person identified in the shareholders list.

(a)	A Mega-C Shareholder who purchased Mega-C shares for an average price of more than $1 per share that was paid in money, property or services actually performed and reasonably valued, shall be classified as a Category-I Beneficiary;

(b)	A Mega-C Shareholder who did not purchase Mega-C shares for value, or who purchased Mega-C shares for an average price of less than $1 per share shall be classified as a Category-II Beneficiary; and

(c)	A Mega-C Shareholder who has allegedly violated any applicable laws relating to the offer, sale or trading of securities shall be classified as a Category-III Beneficiary unless:

(i)	There has been an unambiguous judicial or administrative determination that the conduct attributed to him did not occur or was not a violation of applicable law; or

(a)

If the Trustee holds Axion Shares for the benefit of a Category-III Beneficiary who enters into a Section 7.1(c)(ii) agreement after the commencement of sales on behalf of the Category-II Beneficiaries but prior to the expiration of 12 months from the commencement of such sales, the Trustee shall forthwith deposit all remaining Axion Shares held for the benefit of the Category-III Beneficiary in the Trustee’s brokerage account and thereafter treat the Category-III Beneficiary as a Category-II Beneficiary.

(b)

No Category-III Beneficiary shall derive an economic benefit from his failure or refusal to enter into a Section 7.1(c)(ii) agreement before the commencement of sales on behalf of the Category-II Beneficiaries. In the event that the average price received by the Trustee with respect to sales of Axion Shares on behalf of a Category-III Beneficiary exceeds the average price received by the Trustee with respect to all sales of Axion Shares on behalf of Category-II Beneficiaries, then any excess proceeds shall forthwith be donated to the American Red Cross in the name of the Category-III Beneficiary.

(c)

If the Trustee holds Axion Shares for the benefit of a Category-III Beneficiary who fails or refuses to enter into a Section 7.1(c)(ii) agreement within 12 months after the commencement of sales on behalf of the Category-II Beneficiaries, the Trustee shall forthwith contribute all Axion Shares held for the benefit of that Category-III Beneficiary to the American Red Cross in the name of the Category-III Beneficiary.

(a)	To hold the Axion Shares so long as she deems proper;

(b)

To sell Axion Shares for the purpose of paying the ordinary and necessary administrative and operating expenses of the Trust, including fees owed to the Trustee, staff salaries, office and administrative overhead, travel expenses, legal fees and expenses, accounting and auditing fees, brokerage fees and all other normal business expenses reasonably and necessarily incurred in connection with the administration and operation of the Trust;

(c)

To sell Axion Shares for the purpose of paying the ordinary and necessary administrative and operating expenses incurred by Mega-C during the pendancy of the Chapter 11 Case, including fees owed to the Bankruptcy Trustee, staff salaries, office and administrative overhead, travel expenses, legal fees and expenses, accounting and auditing fees, brokerage fees and all other normal business expenses reasonably and necessarily incurred in connection with the administration and operation of Mega-C;

(d)

To borrow money in such reasonable amounts as may be necessary, desirable or convenient to facilitate the efficient administration of the Trust pursuant to the provisions of this Amendment and in connection therewith to draw, make, execute and issue promissory notes and other instruments and evidences of indebtedness; to secure the payment of the sums so borrowed; and to mortgage, pledge, transfer or assign in trust all or any part of the Axion Shares in support of such borrowings.

(e)	To make distributions of the Axion Shares to Category-I Beneficiaries;

(f)	To sell Axion Shares for the benefit of Category-II Beneficiaries at such times, in such manner and with due regard for prevailing market conditions as in her discretion and judgment may be deemed for the best interest of the Category-II Beneficiaries as a group;

(g)	To distribute all cash proceeds from the sale of Axion Shares to the Category-II Beneficiaries in proportion to their respective interests in the Trust;

(h)	To compromise, settle, arbitrate, or defend any claim or demand in favor of or against the Trust; and

(i)	To act through an agent or attorney-in-fact, by and under power of attorney duly executed by the Trustee, in carrying out any of the authorized powers and duties.