--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

EXHIBIT 10.21
 
 
(aqmd [img001.jpg]
South Coast
Air Quality Management District
Contract No. 07293
Standard

 
This Contract consists of 17 pages.

     
1.
PARTIES - The parties to this Contract are the South Coast Air Quality
Management District (referred to here as “AQMD”) whose address is 21865 Copley
Drive, Diamond Bar, California 91765-4178, and Balqon Corporation (referred to
here as “CONTRACTOR”) whose address is 8 Rosewood, Aliso Viejo, CA 92656.
   
2.
RECITALS
     
A.
AQMD is the local agency with primary responsibility for regulating stationary
source air pollution in the South Coast Air Basin in the State of California.
AQMD is authorized to enter into this Contract under California Health and
Safety Code Section 40489. AQMD desires to contract with CONTRACTOR for services
described in Attachment 1 - Statement of Work, attached here and made a part
here by this reference. CONTRACTOR warrants that it is well-qualified and has
the experience to provide such services on the terms set forth here.
       
B.
CONTRACTOR is authorized to do business in the State of California and attests
that it is in good tax standing with the California Franchise Tax Board.
       
C.
All parties to this Contract have had the opportunity to have this Contract
reviewed by their attorney.
       
D.
CONTRACTOR agrees to obtain the required licenses, permits, and all other
appropriate legal authorizations from all applicable federal, state and local
jurisdictions and pay all applicable fees.
     
3.
PERFORMANCE REQUIREMENTS
     
A.
CONTRACTOR warrants that it holds all necessary and required licenses and
permits to provide these services. CONTRACTOR further agrees to immediately
notify AQMD in writing of any change in its licensing status.
       
B.
CONTRACTOR shall submit reports to AQMD as outlined in Attachment 1 - Statement
of Work. All reports shall be submitted in an environmentally friendly format:
recycled paper; stapled, not bound; black and white, double-sided print; and no
three-ring, spiral, or plastic binders or cardstock covers. AQMD reserves the
right to review, comment, and request changes to any report produced as a result
of this Contract.
       
C.
CONTRACTOR shall perform all tasks set forth in Attachment 1 - Statement of
Work, and shall not engage, during the term of this Contract, in any performance
of work that is in direct or indirect conflict with duties and responsibilities
set forth in Attachment 1 - Statement of Work.
       
D.
CONTRACTOR shall be responsible for exercising the degree of skill and care
customarily required by accepted professional practices and procedures subject
to AQMD’s final approval which AQMD will not unreasonably withhold. Any costs
incurred due to the failure to meet the foregoing standards, or otherwise
defective services which require re-performance, as directed by AQMD, shall be
the responsibility of CONTRACTOR, CONTRACTOR’s failure to achieve the
performance goals and objectives stated in Attachment 1- Statement of Work, is
not a basis for requesting re-performance unless work conducted by CONTRACTOR is
deemed by AQMD to have failed the foregoing standards of performance.
       
E.
CONTRACTOR shall ensure, through its contracts with any subcontractor(s) that
employees and agents performing under this Contract shall abide by the
requirements set forth in this clause.

 
1

--------------------------------------------------------------------------------

 
Contract No. 07293
Standard

     
4.
TERM - The term of this Contract is from the date of execution by both parties
to May 31, 2008, unless further extended by amendment of this Contract in
writing. No work shall commence until this Contract is fully executed by all
parties.
   
5.
TERMINATION
     
A.
In the event any party fails to comply with any term or condition of this
Contract, or fails to provide services in the manner agreed upon by the parties,
including, but not limited to, the requirements of Attachment 1 – Statement of
Work, this failure shall constitute a breach of this Contract. The non-breaching
party shall notify the breaching party that it must cure this breach or provide
written notification of its intention to terminate this contract. Notification
shall be provided in the manner set forth in Clause 10. The non-breaching party
reserves all rights under law and equity to enforce this contract and recover
damages.
       
B.
AQMD reserves the right to terminate this Contract, in whole or in part, without
cause, upon thirty (30) days’ written notice. Once such notice has been given,
CONTRACTOR shall, except as and to the extent or directed otherwise by AQMD,
discontinue any Work being performed under this Contract and cancel any of
CONTRACTOR’s orders for materials, facilities, and supplies in connection with
such Work, and shall use its best efforts to procure termination of existing
subcontracts upon terms satisfactory to AQMD. Thereafter, CONTRACTOR shall
perform only such services as may be necessary to preserve and protect any Work
already in progress and to dispose of any property as requested by AQMD.
       
C.
CONTRACTOR shall be paid in accordance with this Contract for all Work performed
before the effective date of termination under Clause 5.B. Before expiration of
the thirty (30) days’ written notice, CONTRACTOR shall promptly deliver to AQMD
all copies of documents and other information and data prepared or developed by
CONTRACTOR under this Contract with the exception of a record copy of such
materials, which may be retained by CONTRACTOR.
     
6.
INSURANCE
     
A.
CONTRACTOR shall furnish evidence to AQMD of workers’ compensation insurance for
each of its employees, in accordance with either California or other states’
applicable statutory requirements prior to commencement of any work on this
Contract.
       
B.
CONTRACTOR shall furnish evidence to AQMD of general liability insurance with a
limit of at least $1,000,000 per occurrence, and $2,000,000 in a general
aggregate prior to commencement of any work on this Contract. AQMD shall be
named as an additional insured on any such liability policy, and thirty (30)
days written notice prior to cancellation of any such insurance shall be given
by CONTRACTOR to AQMD.
       
C.
CONTRACTOR shall furnish evidence to AQMD of automobile liability insurance with
limits of at least $100,000 per person and $300,000 per accident for bodily
injuries, and $50,000 in property damage, or $1,000,000 combined single limit
for bodily injury or property damage, prior to commencement of any work on this
Contract. AQMD shall be named as an additional insured on any such liability
policy, and thirty (30) days written notice prior to cancellation of any such
insurance shall be given by CONTRACTOR to AQMD.

 
2

--------------------------------------------------------------------------------

 
Contract No. 07293
Standard

       
D.
If CONTRACTOR fails to maintain the required insurance coverage set forth above,
AQMD reserves the right either to purchase such additional insurance and to
deduct the cost thereof from any payments owed to CONTRACTOR or terminate this
Contract for breach.
       
E.
All insurance certificates should be mailed to: AQMD Risk Management, 21865
Copley Drive, Diamond Bar, CA 91765-4178. The AQMD Contract Number must be
included on the face of the certificate.
       
F.
CONTRACTOR must provide updates on the insurance coverage throughout the term of
the Contract to ensure that there is no break in coverage during the period of
contract performance. Failure to provide evidence of current coverage shall be
grounds for termination for breach of Contract.
     
7.
INDEMNIFICATION - CONTRACTOR agrees to hold harmless, indemnify, and defend
AQMD, its officers, employees, agents, representatives, and
successors-in-interest against any and all loss, damage, cost, or expenses which
AQMD, its officers, employees, agents, representatives, and
successors-in-interest may incur or be required to pay by reason of any injury
or property damage caused or incurred by CONTRACTOR, its employees,
subcontractors, or agents as a result of the performance of this Contract.
   
8.
PAYMENT
     
A.
AQMD shall pay CONTRACTOR a not-to-exceed fixed price of Five Hundred Twenty
Seven Thousand Dollars ($527,000) for work performed under this Contract in
accordance with Attachment 2 - Payment Schedule, attached here and included here
by reference. Payment shall be made by AQMD to CONTRACTOR within thirty (30)
days after approval by AQMD of an invoice prepared and furnished by CONTRACTOR
showing services performed and referencing tasks and deliverables as shown in
Attachment 1 - statement of work, and the amount of charge claimed. Each invoice
must be prepared in duplicate, on company letterhead, and list AQMD’s Contract
number, period covered by invoice, and CONTRACTOR’s social security number or
Employer Identification Number and submitted to: South Coast Air Quality
Management District, Attn: Matt Miyasato.
       
B.
AQMD reserves the right to disallow charges when the invoiced services are not
performed satisfactorily in AQMD sole judgment.
     
9.
INTELLECTUAL PROPERTY RIGHTS - Title and full ownership rights to any software,
documents, or reports developed under this Contract shall at all times remain
with AQMD. Such material is agreed to be AQMD proprietary information.
     
A.
Rights of Technical Data - AQMD shall have the unlimited right to use technical
data, including material designated as a trade secret, resulting from the
performance of services by CONTRACTOR under this Contract. CONTRACTOR shall have
the right to use technical data for its own benefit.
       
B.
Copyright - CONTRACTOR agrees to grant AQMD a royalty-free, nonexclusive,
irrevocable license to produce, translate, publish, use, and dispose of all
copyrightable material first produced or composed in the performance of this
Contract.
     
10.
NOTICES - Any notices from either party to the other shall be given in writing
to the attention of the persons listed below, or to other such addresses or
addressees as may hereafter be designated in writing for notices by either party
to the other. Notice shall be given by certified, express, or registered mail,
return receipt requested, and shall be effective as of the date of receipt
indicated on the return receipt card.

 
3

--------------------------------------------------------------------------------

 
Contract No. 07293
Standard

       
AQMD:
South Coast Air Quality Management District
   
21865 Copley Drive
   
Diamond Bar, CA 91765-4178
   
Attn: Matt Miyasato
       
CONTRACTOR:
Balqon Corporation
   
8 Rosewood
   
Aliso Viejo, California 92656
   
Attn: B. Samra

 

     
11.
EMPLOYEES OF CONTRACTOR
     
A.
AQMD reserves the right to review the resumes of any of CONTRACTOR employees,
and/or any subcontractors selected to perform the work specified here and to
disapprove CONTRACTOR choices. CONTRACTOR warrants that it will employ no
subcontractor without written approval from AQMD. CONTRACTOR shall be
responsible for the cost of regular pay to its employees, as well as cost of
vacation, vacation replacements, sick leave, severance pay and pay for legal
holidays.
       
B.
CONTRACTOR, its officers, employees, agents, representatives or subcontractors
shall in no sense be considered employees or agents of AQMD, nor shall
CONTRACTOR, its officers, employees, agents, representatives or subcontractors
be entitled to or eligible to participate in any benefits, privileges, or plans,
given or extended by AQMD to its employees.
       
C.
AQMD requires CONTRACTOR to be in compliance with all state and federal laws and
regulations with respect to CONTRACTOR’s employees throughout the term of this
Contract, including state minimum wage laws and OSHA requirements.
     
12.
CONFIDENTIALITY - It is expressly understood and agreed that AQMD may designate
in a conspicuous manner the information which CONTRACTOR obtains from AQMD as
confidential. CONTRACTOR agrees to:
     
A.
Observe complete confidentiality with respect to such information, including
without limitation, agreeing not to disclose or otherwise permit access to such
information by any other person or entity in any manner whatsoever, except that
such disclosure or access shall be permitted to employees or subcontractors of
CONTRACTOR requiring access in fulfillment of the services provided under this
Contract.
       
B.
Ensure that CONTRACTOR’s officers, employees, agents, representatives, and
independent contractors are informed of the confidential nature of such
information and to assure by agreement or otherwise that they are prohibited
from copying or revealing, for any purpose whatsoever, the contents of such
information or any part thereof, or from taking any action otherwise prohibited
under this clause.
       
C.
Not use such information or any part thereof in the performance of services to
others or for the benefit of others in any form whatsoever whether gratuitously
or for valuable consideration, except as permitted under this Contract.

 
4

--------------------------------------------------------------------------------

 
Contract No. 07293
Standard

         
D.
Notify AQMD promptly and in writing of the circumstances surrounding any
possession, use, or knowledge of such information or any part thereof by any
person or entity other than those authorized by this clause.
       
E.
Take at CONTRACTOR expense, but at AQMD’s option and in any event under AQMD’s
control, any legal action necessary to prevent unauthorized use of such
information by any third party or entity which has gained access to such
information at least in part due to the fault of CONTRACTOR.
       
F.
Take any and all other actions necessary or desirable to assure such continued
confidentiality and protection of such information.
       
G.
Prevent access to such information by any person or entity not authorized under
this Contract.
       
H.
Establish specific procedures in order to fulfill the obligations of this
clause.
       
I.
Notwithstanding the above, nothing herein is intended to abrogate or modify the
provisions of Government Code Section 6250 et.seq. (Public Records Act).
     
13.
PUBLICATION
     
A.
AQMD shall have the right of prior written approval of any document which shall
be disseminated to the public by CONTRACTOR in which CONTRACTOR utilized
information obtained from AQMD in connection with performance under this
Contract.
       
B.
Information, data, documents, or reports developed by CONTRACTOR for AQMD,
pursuant to this Contract, shall be part of AQMD public record unless otherwise
indicated. CONTRACTOR may use or publish, at its own expense, such information
provided to AQMD. The following acknowledgment of support and disclaimer must
appear in each publication of materials, whether copyrighted or not, based upon
or developed under this Contract.

         
    “This report was prepared as a result of work sponsored, paid for, in whole
or in part, by the South Coast Air Quality Management District (AQMD). The
opinions, findings, conclusions, and recommendations are those of the author and
do not necessarily represent the views of AQMD. AQMD, its officers, employees,
contractors, and subcontractors make no warranty, expressed or implied, and
assume no legal liability for the information in this report. AQMD has not
approved or disapproved this report, nor has AQMD passed upon the accuracy or
adequacy of the information contained herein.”
 

         
C.
CONTRACTOR shall inform its officers, employees, and subcontractors involved in
the performance of this Contract of the restrictions contained herein and
require compliance with the above.
     
14.
NON-DISCRIMINATION - In the performance of this Contract, CONTRACTOR shall not
discriminate in recruiting, hiring, promotion, demotion, or termination
practices on the basis of race, religious creed, color, national origin,
ancestry, sex, age, or physical or mental disability and shall comply with the
provisions of the California Fair Employment & Housing Act (Government Code
Section 12900 et seq.), the Federal Civil Rights Act of 1964 (P.L. 88-352) and
all amendments thereto, Executive Order No. 11246 (30 Federal Register 12319),
and all administrative rules and regulations issued pursuant to said Acts and
Order. CONTRACTOR shall likewise require each subcontractor to comply with this
clause and shall include in each such subcontract language similar to this
clause.

 
5

--------------------------------------------------------------------------------

 
Contract No. 07293
Standard

   
15.
SOLICITATION OF EMPLOYEES - CONTRACTOR expressly agrees that CONTRACTOR shall
not, during the term of this Contract, nor for a period of six months after
termination, solicit for employment, whether as an employee or independent
contractor, any person who is or has been employed by AQMD during the term of
this Contract without the consent of AQMD.
   
16.
PROPERTY AND SECURITY - Without limiting CONTRACTOR obligations with regard to
security, CONTRACTOR shall comply with all the rules and regulations established
by AQMD for access to and activity in and around AQMD premises.
   
17.
ASSIGNMENT - The rights granted hereby may not be assigned, sold, licensed, or
otherwise transferred by either party without the prior written consent of the
other, and any attempt by either party to do so shall be void upon inception.
   
18.
NON-EFFECT OF WAIVER - The failure of CONTRACTOR or AQMD to insist upon the
performance of any or all of the terms, covenants, or conditions of this
Contract, or failure to exercise any rights or remedies hereunder, shall not be
construed as a waiver or relinquishment of the future performance of any such
terms, covenants, or conditions, or of the future exercise of such rights or
remedies, unless otherwise provided for herein.
   
19.
ATTORNEYS’ FEES - In the event any action is filed in connection with the
enforcement or interpretation of this Contract, each party shall bear its own
attorneys’ fees and costs.
   
20.
FORCE MAJEURE - Neither AQMD nor CONTRACTOR shall be liable or deemed to be in
default for any delay or failure in performance under this Contract or
interruption of services resulting, directly or indirectly, from acts of God,
civil or military authority, acts of public enemy, war, strikes, labor disputes,
shortages of suitable parts, materials, labor or transportation, or any similar
cause beyond the reasonable control of AQMD or CONTRACTOR.
   
21.
SEVERABILITY - In the event that any one or more of the provisions contained in
this Contract shall for any reason be held to be unenforceable in any respect by
a court of competent jurisdiction, such holding shall not affect any other
provisions of this Contract, and the Contract shall then be construed as if such
unenforceable provisions are not a part hereof.
   
22.
HEADINGS - Headings on the clauses of this Contract are for convenience and
reference only, and the words contained therein shall in no way be held to
explain, modify, amplify, or aid in the interpretation, construction, or meaning
of the provisions of this Contract.
   
23.
DUPLICATE EXECUTION - This Contract is executed in duplicate. Each signed copy
shall have the force and effect of an original.
   
24.
GOVERNING LAW - This Contract shall be construed and interpreted and the legal
relations created thereby shall be determined in accordance with the laws of the
State of California. Venue for resolution of any disputes under this Contract
shall be Los Angeles County, California.

 
6

--------------------------------------------------------------------------------

 
Contract No. 07293
Standard

     
25.
CITIZENSHIP AND ALIEN STATUS
     
A.
CONTRACTOR warrants that it fully complies with all laws regarding the
employment of aliens and others, and that its employees performing services
hereunder meet the citizenship or alien status requirements contained in federal
and state statutes and regulations including, but not limited to, the
Immigration Reform and Control Act of 1986 (P.L. 99-603). CONTRACTOR shall
obtain from all covered employees performing services hereunder all verification
and other documentation of employees’ eligibility status required by federal
statutes and regulations as they currently exist and as they may be hereafter
amended. CONTRACTOR shall have a continuing obligation to verify and document
the continuing employment authorization and authorized alien status of employees
performing services under this Contract to insure continued compliance with all
federal statutes and regulations.
       
B.
Notwithstanding paragraph A above, CONTRACTOR, in the performance of this
Contract, shall not discriminate against any person in violation of 8 USC
Section 1324b.
       
C.
CONTRACTOR shall retain such documentation for all covered employees for the
period described by law. CONTRACTOR shall indemnify, defend, and hold harmless
AQMD, its officers and employees from employer sanctions and other liability
which may be assessed against CONTRACTOR or AQMD, or both in connection with any
alleged violation of federal statutes or regulations pertaining to the
eligibility for employment of persons performing services under this Contract.
     
26.
APPROVAL OF SUBCONTRACT
     
A.
If CONTRACTOR intends to subcontract a portion of the work under this Contract,
written approval of the terms of the proposed subcontract(s) shall be obtained
from AQMD’s Executive Officer or designee prior to execution of the subcontract.
No subcontract charges will be reimbursed unless such approval has been
obtained.
       
B.
Any material changes to the subcontract(s) that affect the scope of work,
deliverable schedule, and/or cost schedule shall also require the written
approval of the Executive Officer or designee prior to execution.
       
C.
The sole purpose of AQMD’s review is to insure that AQMD’s contract rights have
not been diminished in the subcontractor agreement. AQMD shall not supervise,
direct, or have control over, or be responsible for, subcontractor’s means,
methods, techniques, work sequences or procedures or for the safety precautions
and programs incident thereto, or for any failure of subcontractor to comply
with any local, state, or federal laws, or rules or regulations.
     
27.
ENTIRE CONTRACT - This Contract represents the entire agreement between the
parties hereto related to CONTRACTOR providing services to AQMD and there are no
understandings, representations, or warranties of any kind except as expressly
set forth herein. No waiver, alteration, or modification of any of the
provisions herein shall be binding on any party unless in writing and signed by
the party against whom enforcement of such waiver, alteration, or modification
is sought.

 
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
 
7

--------------------------------------------------------------------------------

 
Contact No. 07293
Standard
 
IN WITNESS WHEREOF, the parties to this Contract have caused this Contract to be
duly executed on their behalf by their authorized representatives.

         
SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT
 
BALQON CORPORATION
         
By:
   
By:
/s/ Balwinder Samra      
Name:
Balwinder Samra
 
Dr. William A. Burke, Chairman, Governing Board
 
Title:
Chief Executive Officer
         
Date:
   
Date:
May 2007
           
ATTEST:
       
Saundra McDaniel, Clerk of the Board
               
By:
                   
APPROVED AS TO FORM:
Kurt R. Wiese, District Counsel
               
By:
-s- kurt r. wiese [img005.jpg]
                 
// Standard Boilerplate
       
Last Updated: 5 September, 2006
     

 
8

--------------------------------------------------------------------------------

 
ATTACHMENT 1
STATEMENT OF WORK FOR
BALQON CORPORATION
 
Electric Tractor
 
In January 2006, the AQMD Board approved the Chairman’s Clean Port Initiative,
including several action items to control criteria pollutant emissions and
cancer risks from ports and port related facilities. Recognizing the unique
legal authorities and expertise of the ports relating to operations on lands
they control, the chairman’s initiative called for the ports to take sufficient
and coordinated actions to control emissions. Subsequently, the Port of Los
Angeles (POLA) and the Port of Long Beach (POLB), in conjunction with
participation by AQMD, CARB and U.S. EPA, have developed the San Pedro Bay Ports
Clean Air Action Plan (CAAP). The plan proposes to utilize the authorities of
the ports, including powers to establish lease conditions, port rules, tariffs
and incentives, to implement emission control strategies. The POLA and the AQMD
have also partnered on a Joint RFP to demonstrate Class 8 LNG Trucks for port
drayage, with anticipated emissions well below their diesel counterparts.
However, staff has also discussed even cleaner air technologies that have a
potential to further reduce emissions, especially for the over 1 million yearly
short trips from marine terminals to the Intermodal Container Transfer Facility
(ICTF) located in Wilmington, and nearby warehousing facilities. This project is
to develop and demonstrate an electric tow tractor that can replace existing
diesel trucks to transport containers from the marine terminals to nearby yards
or warehouses. The proposed tractor is expected to have a fast-charging battery,
an initial maximum speed of 25 mph, and a range of 40 miles per charge. As a
part of the development and testing process, these initial goals may be
re-evaluated based on test results. The design of the tractor will provide
sufficient torque and power required to tow up to a 60,000 lb cargo container.
This project will result in a demonstration of a Heavy-Duty, Zero-Emission
Truck, as well as expedite the placement of advanced technologies and zero
emission vehicles in South Coast, should the goals of this project be met.
Furthermore, there is a potential to transfer such technology to other cargo
handling equipment, including Yard Hostlers, Airport Uses, and other low-speed
tow type operations, resulting in potential emission reductions beyond 2010
Standards for on-road and off-road uses.
 
This project includes a sole-source contract to Balqon Corporation to conduct
the above items at a cost not to exceed $527,500 from the Clean Fuels Fund. Of
the total project cost, $263,500 were authorized by the AQMD Board in December
2006, with the remaining funds provided by POLA through a Memorandum of
Agreement with the AQMD, which was approved by the Board in January 2007, and
subsequently executed in April 2007.
 
1

--------------------------------------------------------------------------------

 
The following tasks will be completed during the 12 month project:

     
1
Running Chassis/Cabin Assembly
Duration -120 Days

 

       
CONTRACTOR will provide a running chassis with cabin assembly, as described in
their technical specifications for an electric tractor, dated December 16, 2006
and November 6, 2006, the terms of which are incorporated herein and under a
part hereof. CONTRACTOR will also conduct the following tasks:
       
1.1
Test A - Drive Train Testing
   
Measure energy consumption to document measurement required for
   
Dynamometer (Dyno) testing baseline
   
Evaluate AMP draws and rolling resistance
       
1.2
Test B1 - Dyno Testing
   
Conduct 200 miles static testing to check system; temperature - controller,
motor, drive train
   
Finalize motor, controller settings; drive line design
       
1.3
Test B2 - Dyno Testing
   
Conduct a continuous speed test @20 mph (100% State of Charge);
   
Loaded and Unloaded
   
Finalize battery pack selection; readjust motor/controller setting
       
1.4
Test C - Field Test at POLA
   
Conduct speed test; acceleration testing; grade testing @3% loaded and 16%
unloaded
   
Finalize controller setting; regenerative braking setting; motor cooling;
controller cooling; compressor setting

 

     
2
Completed Vehicle Assembly and Delivery to POLA
Duration -180 Days

 

       
2.1
CONTRACTOR shall conduct compliance review to Federal Motor Vehicle Safety
Standards (FMVSS) 101-104, 106-108, 111, 115, 119, 120, 124, and 205 and conduct
the following test program:
         
Test D - Field Test at POLA
   
Conduct Air Conditioning operation and Steering System Testing
   
Speed Test; acceleration test; brake test; grade test
       
2.2
AQMD, CONTRACTOR and POLA will jointly design and conduct a field evaluation in
real world application for a 30 day period. The goal of this testing will be to
evaluate fast charging performance, battery performance and reliability, as well
as include operator training.

 
2

--------------------------------------------------------------------------------

 

 
2.3
CONTRACTOR shall provide a report of the 30 days field application evaluation to
POLA and AQMD summarizing the usage, problems, and measures taken to address the
problem.
       
2.4
CONTRACTOR shall make the tractor available for outreach activities by AQMD and
POLA will have access to further testing and demonstration of the vehicle for an
additional 180 days and such requests will not be unreasonably withheld by the
CONTRACTOR. Operator of the vehicle during the extended testing or outreach
period shall maintain, at their own expense, the vehicle to CONTRACTOR defined
maintenance requirements during operation of the vehicle.

 
TIME / FUNDING SCHEDULE
 
TASK
 
Scheduled
Completion Date
(From Contract
Execution)
 
AQMD
($)
 
POLA
($)
 
Contract Execution
   
0
   
 
   
250,000
* 
1 - Design Verification Testing
   
120 Days
   
194,000
       
2 - Field Testing & Reporting
   
6 Months
   
60,000
   
13,500
 
Submit Draft Final Report
   
7 Months
   
5,000
       
Submit Final Report & 2-Page Project Synopsis
   
8 Months
   
4,500
       
Total
   
 
 
$
263,500
 
$
263,500
 

 
* POLA has agreed to provide a large portion of their funding to cover the
upfront costs immediately after contract execution.
 
3

--------------------------------------------------------------------------------

 
DELIVERABLES
 
1.
Updates

 
CONTRACTOR shall update AQMD Project Officer by voice or email weekly or as
desired. Additionally, CONTRACTOR should schedule on a quarterly basis,
face-to-face meetings of the project partners.

   
2.
Progress Reports

 
CONTRACTOR shall provide progress reports, as defined in Attachment 2 - Payment
Schedule, to POLA and AQMD for review, comment, and approval. Two stapled copies
of each quarterly progress reports due by the date included in the schedule of
milestones, and once a year, a 2 page summary report noted in item (5) below.
CONTRACTOR shall submit one copy of each quarterly progress report to AQMD’s
Project Officer and one copy to AQMD’s Contracts Administrator - Technology
Advancement in conjunction with the invoice for the same period. Each quarterly
progress report shall include, but not be limited to, the following:

       
a)
Reference to AQMD contract number, title of project and reporting time period,
and the following subheadings and description thereof.
       
b)
Description of work completed during the reporting period, including a
discussion of problems encountered and how those problems were resolved; and
other relevant activities.
       
c)
When available, color photographs of the experimental apparatus and any results
that can be better transmitted photographically.
       
d)
Discussion of work planned for the next reporting period.
     
3.
Draft Report

 
Three stapled copies of draft final report shall be submitted for review,
comment, and approval by the date specified In Attachment 2 - Payment Schedule.
CONTRACTOR shall submit three copies of the draft final report to AQMD’s Program
Officer, as well as an electronic copy in Microsoft Word format. This document
shall be considered in the public domain, in conformance with the California
Public Records Act (Government Code Section 6250 et seq.). Any trade secret
information may be submitted to AQMD in a separate report in which the trade
secret information is specifically identified. AQMD agrees to treat such trade
secret information in accordance with its Public Records Act guidelines relating
to trade secret information. AQMD shall complete its review of the draft final
report within two months of its receipt from CONTRACTOR, through CONTRACTOR’S
representative. The draft final report shall include, but not be limited to, the
following:
 
4

--------------------------------------------------------------------------------

 

  a) Reference to AQMD contract number, title of project and project period.    
   
b)
Project background and objectives.
         
c)
An executive summary up to three pages in length to include:
         
•
a short, definitive statement of the problem/project;
           
•
objective of the project, including emission control objectives or goals;
           
•
reference to AQMD Rules if applicable;
           
•
subject of the project including the technology;
           
•
conclusions (potential emissions impact, cost implications, and other
implications);
           
•
recommendations (design changes/optimization, other applications of the
technology, and commercialization paths); and acknowledgment of all project
sponsors.
         
d)
A detailed description of the scope of work. A copy of the statement of work
should be attached as an Appendix.
         
e)
Analysis of data from testing and measurement of emissions, performance,
durability, etc. should be in the main body of the report. The graphical
presentation of the data analysis, particularly bar graphs, is recommended. The
actual data and the testing protocols used should be attached as Appendices.
         
f)
Each Task proposed in the Statement of Work should have its own chapter.
Findings or results of each task should be discussed in these chapters, and
should include the following:
           
•
Discussion of actions completed
           
•
Discussion of risks and corrective actions
           
•
Task Performance
         
g)
Problems - A discussion of significant problems encountered during the contract
and how they were resolved. If a problem is not resolved within 30 days and the
converted vehicle is removed, a detailed explanation of issues and their
subsequent resolution shall be included in the reports. If a problem was not
resolved, the report shall contain an explanation of the technology’s short
comings and the specific needs for technology advancement. Furthermore, the
contractor shall specifically discuss any problems associated with a 25 mph
operation.
         
h)
Results - A discussion of the expected project results versus what was actually
achieved.
         
i)
Costs - A comparison and discussion of expected versus actual AQMD contract
costs.
         
j)
Copies of news releases, media and technical articles on the project.

 
5

--------------------------------------------------------------------------------

 

 
k)
Discussion of commercial feasibility of the technology including a
(quantitative) cost comparison of the proposed technology with competing
technologies. Key cost elements need to be identified.
       
I)
Recommendations, including design and engineering requirements for an electric
tractor to operate at up to 40 mph, as well as a plan for full CARB and DOT
Certification.
     
4.
Final Report

 
CONTRACTOR shall submit three stapled originals as well as an electronic copy in
Microsoft Word format of the final report incorporating AQMD’s comments, no
later than the date specified in Attachment 2-Payment Schedule. This document
shall be considered in the public domain, in conformance with the California
Public Records Act (Government Code Section 6250 et seq.). Any trade secret
information may be submitted to AQMD in a separate report in which the trade
secret information is specifically identified. AQMD agrees to treat trade secret
information in accordance with its Public Records Act guidelines relating to
trade secret information.

   
5.
Two-Page Project Synopsis

 
CONTRACTOR shall submit a 2-page project synopsis, along with the final report.
Attachment 3 to this contract provides the format and content to be used for
this synopsis. In addition to a hard copy, CONTRACTOR shall provide the synopsis
in an electronic version, using Microsoft WORD. All color photographs and images
shall be embedded within the synopsis AND provided separately in digital format,
such as .ppt, .tif. or .jpg, on a CD or sent electronically.

   
6.
Photo Documentation

 
CONTRACTOR shall provide to the AQMD a set of color photographs, documenting the
entire development and testing.
 
6

--------------------------------------------------------------------------------

 
ATTACHMENT 2
PAYMENT SCHEDULE FOR
SALOON CORPORATION
 
The cost of this project to AQMD shall not exceed $263,500. Total cost of the
proposed project is estimated to be $527,000, with the remainder $263,600
provided to AQMD from POLA through an agreement and used to supplement the Clean
Fuel Funds. POLA has agreed to provide a large portion of their funding to cover
the upfront costs immediately after contract execution.
 

     
SCHEDULE OF PAYMENTS
from contract execution
 
SCHEDULE OF MILESTONES
 
Date
 
Amount ($)
1
Contract Execution
   
0 Days
 
$
250,000
2
Submit Progress Report # 1 after Completion of Task 1
   
120 Days
 
$
194,000
3
Submit Progress Report #2 after Completion of Task 2
   
180 Days
 
$
73,500
4
Submit Draft Final Report
   
7 Months
 
$
5,000
5
Submit Final Report & 2-Page Project Synopsis
   
8 Months
 
$
4,500
 
Total
       
$
527,000

 
7

--------------------------------------------------------------------------------

 
Attachment 3

 

   
AQMD Contract #
Date of Publication (as month year)

 
Project Title
 
Contractor
Prime contractor and significant subcontractors.
 
Cosponsors
List cosponsors from highest contributor to lowest.
 
Project Officer
AQMD project manager name.
 
Background
This section is a brief introduction describing the need for the technology
and/or clean fuel, as defined by rules and regulations/mandates of AQMD, ARB,
EPA, DOE, etc. If applicable, describe other relevant factors, such as economic
issues, energy savings, etc.
 
Project Objective
This section should briefly describe the project objectives as originally stated
in the Board (or EO) letter. If the objective evolved significantly during the
contracting procedure, it should be noted how and why.
 
Technology Description
This section describes the general principles of operation and emissions control
approach of the technology and/or clean fuel involved in the project.
 
If applicable, discuss how the principle of operation differs from other,
currently available equipment. This includes describing what the “advancement”
actually is over currently available technologies.
 
Status
This section describes the status or progress of the project. If the project was
completed, provide the date of completion and note that the final report is on
file with complete technical details of the project. Describe major project
events, such as the development / testing / delivery of hardware (if
applicable). If the project was terminated or ended prematurely you still need
to file this report. Regardless of how it ended, per SB 199 you must describe
any unanticipated problems that were encountered during the project, and how
they were (or were not) resolved. If “fatal” problems were encountered, this
section will be the heart of the report, since it would be unlikely that major
benefits or emissions reductions were realized in a terminated project
 
Picture of technology that has been supported with AQMD/Technology Advancement
cosponsorship, if applicable. The picture, preferably a photograph, should
clearly illustrate the technology. The size of the image should be about 3x3 to
fit this two column format. The picture of the technology should be positioned
on the front page
 
Results
This section summarizes all available emissions results and key performance
characteristics. Performance is meant in the broadest terms, including (as
applicable) emissions, energy efficiency, operation and maintenance
requirements, overall environmental impacts, and performance tradeoffs. The
primary emphasis of this section is the presentation of project data.
 
Performance results should be summarized using clear, graphical depictions
whenever possible:
 
Graph or table summarizing key performance characteristics. Graphs are preferred
over tables when possible. Graphical data presented should show the most
representative data of the project’s/technology’s performance. One graph would
be preferred, but no more than two data presentations in this document.
 
Measured performance is to be compared with the objectives/goals set for the
project. Comparisons should focus on targeted emissions reductions and/or other
key performance goals (e.g. range for electric vehicles).
 
8

--------------------------------------------------------------------------------

 
There should also be a brief discussion of performance tradeoffs. That is, did
achieving one performance characteristic goal, such as emissions, compromise
another performance characteristic, such as efficiency.
 
Benefits
This section crystallizes the above-noted performance characteristics into
project benefits, e.g., reduced emissions, increased efficiency, reduced global
warming gases, or other environmental benefits. The potential emissions
inventory impact of this technology applied in the South Coast Air Basin must be
estimated based on performance results of this project and some estimate of
market penetration (concisely state assumptions).
 
It clearly describes how those actual benefits compare with the benefits that
were anticipated at the project’s start. Be as detailed as possible, including
discussion of overall environmental impacts and benefits. Address the question
of whether the technology may reduce an air pollutant while improving (or
worsening) problems with water pollution, solid waste, global warming, toxic
emissions, etc.
 
Project Costs
Tins brief section describes the actual costs of the program (AQMD’s funding
contribution as well as the overall cost sharing) and how they compare with the
originally projected costs of the project as stated in the Board (or EO) letter.
Cost information can be presented graphically, in a table, or in paragraph form.
This section does not address cost effectiveness or cost of commercialization.
 
Commercialization and Applications
This section describes the anticipated or potential applications of the
demonstrated technology and/or clean fuel. If applicable, discuss follow on
projects to further improve the technology. If available or applicable, discuss
expected costs of control and cost-effectiveness in the context of currently
available technologies. Cost data should be noted as estimates or projections,
especially since TA projects are often “first of a kind.”
 
Prospects for commercialization should include a discussion of the potential
size of the target or primary market, and if there is another market segment or
application that could use the technology, Discussion of the commercial status
of the technology should address questions such as: (1) how close to a
commercial product is it; (2) what work remains to bring it to market; (3) when
could it be made commercially available and competitive; and (4) what barriers
remain before the technology can be commercialized.
 
 
9