ex_10-3.htm


    
      

      

    

    EXHIBIT
10.3

     

     

    INDEMNIFICATION
AGREEMENT

     

    THIS
INDEMNIFICATION AGREEMENT (“Agreement”) is made as of the
date set forth on the signature page to this Agreement, by and between Balqon
Corporation, a Nevada corporation (“Company”), and the individual
named on the signature page to this Agreement (“Indemnitee”), an officer
and/or a director of the Company.

     

    R E C I T A L
S

     

    A.           The
Company desires to attract and retain the services of highly qualified
individuals as directors and officers.

     

    B.         
  Indemnitee does not regard the protection currently provided by
applicable law, the Company’s governing documents and available insurance as
adequate under the present circumstances, and the Company has determined that
Indemnitee and other directors and officers of the Company may not be willing to
serve or continue to serve in such capacities without additional
protection.

     

    C.         
  In order to induce and encourage highly experienced and capable
persons such as the Indemnitee to serve, or to continue to serve, as an officer
and/or a director, the Board of Directors of the Company has determined, after
due consideration, that this Agreement is not only reasonable and prudent, but
necessary to promote and ensure the best interests of the Company and its
stockholders.

     

    D.           
The Company wishes to provide in this Agreement for the indemnification of and
the advancing of expenses to the Indemnitee to the fullest extent permitted by
law and as provided for in this Agreement.

     

    E.           
 The Company’s execution of this Agreement has been approved by the Board
of Directors of the Company.

     

    F.           
 Indemnitee has indicated to the Company that but for the Company’s
agreement to enter into this Agreement, Indemnitee would decline to serve, or to
continue to serve, as an officer and/or a director of the Company.

     

    NOW,
THEREFORE, in consideration of the recitals set forth above and the continued
services of the Indemnitee, and as an inducement to the Indemnitee to serve, or
to continue to serve, as an officer and/or a director of the Company, the
Company and the Indemnitee do hereby agree as follows:

     

    1.            
Definitions.
As used in this Agreement, the following terms shall have the meanings set forth
below:

     

    (a)           “Proceeding” shall mean any
threatened, pending or completed action, suit or proceeding, whether brought in
the name of the Company or otherwise and whether of a civil, criminal,
administrative or investigative nature, by reason of the fact that the
Indemnitee is or was an officer and/or a director of the Company, or is or was
serving at the request of the Company as a director, officer, employee or agent
of another enterprise, whether or not he is serving in such capacity at the time
any liability, Expense (as defined in subparagraph (b) below) or Loss (as
defined in subparagraph (c) below) is incurred for which indemnification or
advancement of Expenses or Losses is to be provided under this
Agreement.

     

    
      
        
        

      

      
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    (b)           “Expenses” means all costs,
charges and expenses incurred in connection with a Proceeding, including,
without limitation, attorneys’ fees, disbursements and retainers, accounting and
witness fees, travel and deposition costs, expenses of investigations, judicial
or administrative proceedings or appeals, and any expenses of establishing a
right to indemnification pursuant to this Agreement or otherwise, including
reasonable compensation for time spent by the Indemnitee in connection with the
investigation, defense or appeal of a Proceeding or action for indemnification
for which he is not otherwise compensated by the Company or any third party;
provided, however, that the
term “Expenses” does not
include Losses.

     

    (c)           “Losses” means any amount which
Indemnitee pays or is obligated to pay in connection with a Proceeding,
including, without limitation, (i) the amount of damages, judgments, amounts
paid in settlement, fines or penalties relating to any Proceeding, (ii) sums
paid in respect of any deductible under any applicable D&O Insurance (as
defined in Section 12(a))
or (iii) excise taxes under the Employee Retirement Income Security Act of 1974
(“ERISA”), as amended,
relating to any Proceeding, either of which are actually levied against the
Indemnitee or paid by or on behalf of the Indemnitee; provided, however, that the
term “Losses” does not
include Expenses.

     

    2.            
Agreement
to Serve. The Indemnitee agrees to continue to serve as an officer and/or
a director of the Company at the will of the Company for so long as Indemnitee
is duly elected or appointed or until such time as Indemnitee tenders a
resignation in writing or is terminated as an officer and/or removed as a
director by the Company. Nothing in this Agreement shall be construed to create
any right in Indemnitee to continued employment with the Company or any
subsidiary or affiliate of the Company. Nothing in this Agreement shall affect
or alter any of the terms of any otherwise valid employment agreement or other
agreement between Indemnitee and the Company relating to Indemnitee’s conditions
and/or terms of employment or service.

     

    3.           
 Indemnification
in Third Party Actions. The Company shall indemnify the Indemnitee in
accordance with the provisions of this Section 3 if the
Indemnitee is a party to or threatened to be made a party to or is otherwise
involved in any Proceeding (other than a Proceeding by or in the right of the
Company to procure a judgment in its favor), by reason of the fact that the
Indemnitee is or was an officer and/or a director of the Company, or is or was
serving at the request of the Company as a director, officer, employee or agent
of another enterprise, or by reason of anything done or not done by Indemnitee
in any such capacity, against all Expenses and Losses actually and reasonably
incurred by the Indemnitee in connection with the defense or settlement of such
Proceeding, to the fullest extent permitted by the Nevada Revised Statutes (the
“Law”), whether or not
the Indemnitee was the successful party in any such Proceeding; provided, however, that any
settlement shall be approved in writing by the Company.

     

    
      
        
        

      

      
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    4.            
Indemnification
In Proceedings By or In the Right of the Company. The Company shall
indemnify the Indemnitee in accordance with the provisions of this
Section 4 if the Indemnitee is a party to or threatened to be made a party
to or is otherwise involved in any Proceeding by or in the right of the Company
to procure a judgment in its favor by reason of the fact that the Indemnitee is
or was an officer and/or a director of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
enterprise, or by reason of anything done or not done by Indemnitee in any such
capacity, against all Expenses actually and reasonably incurred by Indemnitee in
connection with the defense or settlement of such Proceeding, to the fullest
extent permitted by the Law, whether or not the Indemnitee is the successful
party in any such Proceeding. The Company shall further indemnify the Indemnitee
for any Losses actually and reasonably incurred by the Indemnitee in any such
Proceeding described in the immediately preceding sentence, provided that either
(i) the Proceeding is settled with the approval of a court of competent
jurisdiction, or (ii) indemnification of such amounts is otherwise ordered by a
court of competent jurisdiction in connection with such Proceeding.

     

    5.           
 Conclusive
Presumption Regarding Standard of Conduct. The Indemnitee shall be
conclusively presumed to have met the relevant standards of conduct required by
the Law for indemnification pursuant to this Agreement, unless a determination
is made that the Indemnitee has not met such standards (i) by the Board of
Directors of the Company by a majority vote of a quorum thereof consisting of
directors who were not parties to such Proceeding, (ii) by the stockholders of
the Company by a majority vote, or (iii) in a written opinion of the Company’s
independent legal counsel. Further, the termination of any Proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not, of itself, rebut such presumption that the Indemnitee met
the relevant standards of conduct required for indemnification pursuant to this
Agreement.

     

    6.          
  Indemnification
of Expenses of Successful Party. Notwithstanding any other provision of
this Agreement, to the extent that the Indemnitee has been successful on the
merits or otherwise in defense of any Proceeding or in defense of any claim,
issue or matter therein, the Indemnitee shall be indemnified against all
Expenses incurred in connection therewith to the fullest extent permitted by the
Law. For purposes of this Section 6, the
Indemnitee will be deemed to have been successful on the merits if the
Proceeding is terminated by settlement or is dismissed with
prejudice.

     

    7.           
Advances
of Expenses. The Expenses incurred by the Indemnitee in connection with
any Proceeding shall be paid by the Company in advance of the final disposition
of the Proceeding at the written request of the Indemnitee, and within ten (10)
business days of such request, to the fullest extent permitted by the Law; provided, however, that the
Indemnitee shall undertake in writing to repay such amount to the extent that it
is ultimately determined that the Indemnitee is not entitled to indemnification
by the Company.

     

    8.            Partial
Indemnification. If the Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
Expenses or Losses actually and reasonably incurred by Indemnitee in the
investigation, defense, appeal or settlement of any Proceeding but not, however,
for the total amount thereof, the Company shall nevertheless indemnify the
Indemnitee for the portion of such Expenses and Losses to which the Indemnitee
is entitled.

     

    
      
        
        

      

      
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    9.           
 Indemnification
Procedure; Determination of Right to Indemnification.

     

    (a)           Promptly
after receipt by the Indemnitee of notice of the commencement of any Proceeding
with respect to which the Indemnitee intends to claim indemnification or
advancement of Expenses or Losses pursuant to this Agreement, the Indemnitee
will notify the Company of the commencement thereof. The omission to so notify
the Company will not relieve the Company from any liability which it may have to
the Indemnitee under this Agreement or otherwise.

     

    (b)           The
Company shall give prompt notice of the commencement of such Proceeding to the
insurers on the D&O Insurance in accordance with the procedures set forth in
the respective policies in favor of Indemnitee.  The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of Indemnitee, all amounts payable as a result of such Proceeding in
accordance with the terms of such policies.

     

    (c)           If
a claim for indemnification or advancement of Expenses or Losses under this
Agreement is not paid by or on behalf of the Company within thirty (30) days of
receipt of written notice thereof, Indemnitee may at any time thereafter bring
suit in any court of competent jurisdiction against the Company to enforce the
right to indemnification or advancement of Expenses or Losses provided by this
Agreement. It shall be a defense to any such action (other than an action
brought to enforce a claim for Expenses incurred in defending any Proceeding in
advance of its final disposition where the required undertaking, if any is
required, has been tendered to the Company) that the Indemnitee has failed to
meet the standard of conduct that makes it permissible under the Law for the
Company to indemnify the Indemnitee for the amount claimed. The burden of
proving by clear and convincing evidence that indemnification or advancement of
Expenses or Losses is not appropriate shall be on the Company. The failure of
the directors or stockholders of the Company or independent legal counsel to
have made a determination prior to the commencement of such Proceeding that
indemnification or advancement of Expenses or Losses are proper in the
circumstances because the Indemnitee has met the applicable standard of conduct
shall not be a defense to the action or create a presumption that the Indemnitee
has not met the applicable standard of conduct.

     

    (d)           The
Indemnitee’s Expenses incurred in connection with any action concerning
Indemnitee’s right to indemnification or advancement of Expenses or Losses in
whole or in part pursuant to this Agreement shall also be indemnified in
accordance with the terms of this Agreement by the Company regardless of the
outcome of such action, unless a court of competent jurisdiction determines that
each of the material claims made by the Indemnitee in such action was not made
in good faith or was frivolous.

     

    
      
        
        

      

      
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    (e)           With
respect to any Proceeding for which indemnification is requested, the Company
will be entitled to participate therein at its own expense and, except as
otherwise provided below, to the extent that it may wish, the Company may assume
the defense thereof, with counsel satisfactory to the Indemnitee. After notice
from the Company to the Indemnitee of its election to assume the defense of a
Proceeding, the Company will not be liable to the Indemnitee under this
Agreement for any Expenses subsequently incurred by the Indemnitee in connection
with the defense thereof, other than reasonable costs of investigation or as
otherwise provided below. The Company shall not settle any Proceeding in any
manner that would impose any penalty or limitation on the Indemnitee, or include
an admission of wrongdoing by the Indemnitee, without the Indemnitee’s prior
written consent. The Indemnitee shall have the right to employ counsel in any
such Proceeding, but the Expenses of such counsel incurred after notice from the
Company of its assumption of the defense thereof and the Indemnitee’s approval
of the Company’s counsel shall be at the expense of the Indemnitee, unless (i)
the employment of counsel by the Indemnitee has been authorized by the Company,
(ii) the Indemnitee shall have reasonably concluded that there may be a conflict
of interest between the Company and the Indemnitee in the conduct of the defense
of a Proceeding, or (iii) the Company shall not in fact have employed counsel to
assume the defense of a Proceeding, in each of which cases the Expenses of the
Indemnitee’s counsel shall be at the expense of the Company. Notwithstanding the
foregoing, the Company shall not be entitled to assume the defense of any
Proceeding brought by or on behalf of the Company or as to which the Indemnitee
has concluded that there may be a conflict of interest between the Company and
the Indemnitee.

     

    (f)           With
respect to any Proceeding that is other than by or in the right of the Company,
the Indemnitee may require the Company to defend him.  In the event
that Indemnitee requires the Company to defend him, the Company shall promptly
undertake to defend any such Proceeding at the Company’s sole expense, employing
counsel satisfactory to the Indemnitee.

     

    (g)           If
the Company fails timely to defend, contest or otherwise protect the Indemnitee
against any Proceeding which is not by or in the right of the Company, the
Indemnitee shall have the right to do so, including without limitation, the
right to make any compromise or settlement thereof, and to recover from the
Company all Expenses and Losses and amounts paid as a result
thereof.

     

    10.           Retroactive
Effect. Notwithstanding anything to the contrary contained in this
Agreement, the Company’s obligation to indemnify the Indemnitee and advance
Expenses and Losses to the Indemnitee shall be deemed to be in effect since the
date that the Indemnitee first commenced serving in any of the capacities
covered by this Agreement.

     

    11.           Limitations
on Indemnification. No payments pursuant to this Agreement shall be made
by the Company:

     

    (a)           to
indemnify or advance Expenses to the Indemnitee with respect to actions
initiated or brought voluntarily by the Indemnitee and not by way of defense,
except with respect to actions brought to establish or enforce a right to
indemnification or advancement of Expenses or Losses under this Agreement or any
other statute or law or otherwise as required under the Law, but such
indemnification or advancement of Expenses or Losses may be provided by the
Company in specific cases if approved by the Board of Directors by a majority
vote of a quorum thereof consisting of directors who are not parties to such
action;

     

    
      
        
        

      

      
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    (b)           to
indemnify the Indemnitee for any Expenses or Losses for which payment is
actually made to the Indemnitee under a valid and collectible insurance policy,
except in respect of any excess beyond the amount paid under such
insurance;

     

    (c)           to
indemnify the Indemnitee for any Expenses or Losses for which the Indemnitee has
been or is indemnified by the Company or any other party otherwise than pursuant
to this Agreement; or

     

    (d)           to
indemnify the Indemnitee for any Expenses or Losses sustained in any Proceeding
for an accounting of profits made from the purchase or sale by Indemnitee of
securities of the Company pursuant to the provisions of Section 16(b) of
the Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder or similar provisions of any federal, state or local statutory
law.

     

    12.           Maintenance
of Directors’ and Officers’ Insurance.

     

    (a)           Upon
the Indemnitee’s request, the Company hereby agrees to maintain in full force
and effect, at its sole cost and expense, directors’ and officers’ liability
insurance (“D&O
Insurance”) by an insurer, in an amount and with a deductible reasonably
acceptable to the Indemnitee, covering the period during which the Indemnitee is
serving in any of the capacities covered by this Agreement and for so long
thereafter as the Indemnitee shall be subject to any possible claim or
threatened, pending or completed Proceeding by reason of the fact that the
Indemnitee is serving in any of the capacities covered by this
Agreement.  Upon receipt of any D&O Insurance policy, or any
endorsement to any D&O Insurance policy, the Company shall promptly provide
the Indemnitee with a complete copy thereof.

     

    (b)           In
all policies of D&O Insurance to be maintained pursuant to Section 12(a),
the Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee with the greatest rights and benefits available under such
policy.

     

    (c)           The
Company will, within ten (10) days of request of the Indemnitee and upon each
subsequent renewal date of the D&O Insurance, furnish the Indemnitee with a
certificate of insurance naming the Indemnitee as an insured and otherwise
meeting the requirements of this Section 12 and
will not make any changes to such insurance without the prior consent of the
Indemnitee, which consent will not be unreasonably withheld.  Upon
receipt by the Company of notice, in any form, of cancellation or termination or
proposed cancellation or termination or any restriction or limitation of any
D&O Insurance, the Company shall, within five (5) days of receipt of such
notice, provide like notice to the Indemnitee.

     

    
      
        
        

      

      
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    (d)           Any
approval by the Indemnitee of the D&O Insurance will not release the Company
of its obligations under this Agreement.

     

    13.           Indemnification
Hereunder Not Exclusive; Term. The indemnification and advancement of
Expenses and Losses provided by this Agreement shall not be deemed to limit or
preclude any other rights to which the Indemnitee may be entitled under the
Company’s articles of incorporation or bylaws, any agreement, any vote of
stockholders or disinterested directors of the Company, the Law, or
otherwise.  The indemnification under this Agreement shall continue as
to the Indemnitee, even though he may have ceased to be an officer and/or a
director of the Company, for so long as the Indemnitee shall be subject to any
possible Proceeding.

     

    14.           Primary
Indemnity.  The Company’s obligation to provide indemnification
to the Indemnitee under this Agreement is primary to any other source of
indemnification or insurance that may be available to the Indemnitee for matters
covered by the indemnification under this Agreement.  The Company
agrees that it shall have no right of subrogation with respect to any such other
right of recovery of the Indemnitee.

     

    15.           Successors
and Assigns. This Agreement shall be binding upon, and shall inure to the
benefit of (i) the Indemnitee and Indemnitee’s heirs, devisees, legatees,
personal representatives, executors, administrators and assigns and (ii) the
Company and its successors and assigns, including any transferee of all or
substantially all of the Company’s assets and any successor or assign of the
Company by merger or by operation of law.

     

    16.           Severability.
Each provision of this Agreement is a separate and distinct agreement and
independent of the other, so that if any provision hereof shall be held to be
invalid or unenforceable for any reason, such invalidity or unenforceability
shall not affect the validity or enforceability of the other provisions hereof.
To the extent required, any provision of this Agreement may be modified by a
court of competent jurisdiction to preserve its validity and to provide the
Indemnitee with the broadest possible indemnification and advancement of
Expenses and Losses permitted under the Law. If this Agreement or any portion
thereof is invalidated on any ground by any court of competent jurisdiction,
then the Company shall nevertheless indemnify Indemnitee as to Expenses and
Losses with respect to any Proceeding to the fullest extent permitted by any
applicable portion of this Agreement that shall not have been invalidated or by
any applicable provision of the Law or any other applicable law.

     

    17.           Headings.
The headings used herein are for convenience only and shall not be used in
construing or interpreting any provision of the Agreement.

     

    18.           Governing
Law. The Nevada Revised Statutes shall govern all issues concerning the
relative rights of the Company and the Indemnitee under this Agreement; provided, however, that the
provisions of Section 317 of the California General Corporation Law shall govern
only to the extent that a court of competent jurisdiction determines that such
provision governs in connection with Section 2115 of the California General
Corporation Law. All other questions and obligations under this Agreement shall
be construed, interpreted and enforced in accordance with the laws of the State
of Nevada, without giving effect to the principles of conflicts of laws
thereunder which would specify the application of the law of another
jurisdiction.

     

    
      
        
        

      

      
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    19.           Amendments
and Waivers. No amendment, waiver, modification, termination or
cancellation of this Agreement shall be effective unless in writing and signed
by the party against whom enforcement is sought. The indemnification rights
afforded to the Indemnitee hereby are contract rights and may not be diminished,
eliminated or otherwise affected by amendments to the Company’s articles of
incorporation, bylaws or agreements, including any D&O Insurance policies,
whether the alleged actions or conduct giving rise to indemnification hereunder
arose before or after any such amendment. No waiver of any provision of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof, whether or not similar, nor shall any waiver constitute a continuing
waiver.

     

    20.           Counterparts.
This Agreement may be executed in one or more counterparts, all of which shall
be considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each party and delivered to the
other.

     

    21.           Notices.
All notices and communications shall be in writing and shall be deemed duly
given on the date of delivery or on the date of receipt of refusal indicated on
the return receipt if sent by first class mail, postage prepaid, registered or
certified, return receipt requested, to the following addresses, unless notice
of a change of address is duly given by one party to the other, in which case
notices shall be sent to such changed address:

     

    If to the
Company:

     

    Balqon
Corporation

    1701 E.
Edinger, Unit 3

    Santa
Ana, CA 92705

    Attn:  Balwinder
Samra, President

     

    with a
copy, which shall not constitute notice to the Company, to:

     

    Rutan
& Tucker, LLP

    611 Anton
Boulevard, Suite 1400

    Costa
Mesa, CA  92626

    Attn:
Larry A. Cerutti, Esq.

     

    If to the
Indemnitee, to the address set forth on the signature page to this
Agreement.

     

    22.           Subject
Matter and Parties. The intended purpose of this Agreement is to provide
for indemnification and advancement of Expenses and Losses, and this Agreement
is not intended to affect any other aspect of any relationship between the
Indemnitee and the Company and is not intended to and shall not create any
rights in any person as a third party beneficiary hereunder.

     

    [Signature
page follows]

     

    
      
        
        

      

      
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    IN
WITNESS WHEREOF, the parties have executed this Agreement as of ____________,
2008.

     

    
      	
              “Indemnitee”

            	Signature:  
      _____________________________________
	 	 
	 	Print
      Name:   ____________________________________
	 	 
	 	Address
      For Notices:  _____________________________
	 	______________________________________________
	 	______________________________________________
	 	 
	 	 
	
              “Company”

            	BALQON
      CORPORATION, 

              
                a
      Nevada corporation

              

            
	 	 
	 	By:
      /s/ Balwinder
      Samra                                                                 
      
	 	 
	 	Name:
      Balwinder
      Samra                                                                 
      
	 	 
	 	Its:
      President                                                                                   
      


    

     

     

     

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