ex_10-2.htm


    
      

      

    

    EXHIBIT
10.2

     

     

    BALQON
CORPORATION

    


    2008
STOCK INCENTIVE PLAN

    STOCK
OPTION GRANT NOTICE AND

    STOCK
OPTION AGREEMENT

     

    Balqon
Corporation, a Nevada corporation (the “Corporation”),
pursuant to its 2008 Stock Incentive Plan (the “Plan”), hereby grants
to the holder listed below (“Optionee”), an option
to purchase the number of shares of the Corporation’s Common Stock set forth
below (the “Option”). This Option
is subject to all of the terms and conditions as set forth herein and in the
Stock Option Agreement attached hereto as Exhibit A (the
“Stock Option
Agreement”) and the Plan, which are incorporated herein by reference.
Unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Stock Option Grant Notice and the Stock Option
Agreement.

     

    
      	
              Optionee:

            	______________________________________________________________________________
	 	 
	
              Grant
      Date:

            	
              ________________________,
      2008

            
	 	 
	
              Exercise
      Price per Share:

            	
              $_______________________

            
	 	 
	
              Total
      Exercise Price:

            	
              $_______________________

            
	 	 
	
              
                Total
      Number of Shares Subject
      to the Option:

              

            	
              _______________
      shares of Common Stock

            
	 	 
	
              Expiration
      Date:

            	
              _________________________,
      2018

            
	 	 
	
              Type
      of Option:

            	
              £
      Incentive Option   £
      Non-Statutory Option

            
	 	 
	
              Vesting
      Schedule:

            	
              ______________________________________________________________________________

            
	 
      	
              ______________________________________________________________________________

            
	 
      	
              ______________________________________________________________________________

            


    

     

    By his or
her signature, Optionee agrees to be bound by the terms and conditions of the
Plan, the Stock Option Agreement and this Grant Notice. Optionee has reviewed
the Stock Option Agreement, the Plan and this Grant Notice in their entirety,
has had an opportunity to obtain the advice of counsel prior to executing this
Grant Notice and fully understands all provisions of this Grant Notice, the
Stock Option Agreement and the Plan. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator of the Plan upon any questions arising under the Plan or the
Option.

     

    
      
        	BALQON
      CORPORATION  	 	OPTIONEE
	 	 	 	 	 
	By:	
                /s/
      Balwinder Samra

              	 	
                By:  
       

              	
                 

              
	Name:	Balwinder
      Samra	 	Print
      Name:	 
	Title:  	President and Chief
      Executive Officer	 	 	 
	Address:
      	1701
      E. Edinger, Unit E3	 	Address:
      	 
	 	
                Santa
      Ana, CA 92705 

              	 	 	 


      

    

     

    
      
        
        

      

      
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    EXHIBIT
A

    TO
STOCK OPTION GRANT NOTICE

     

    STOCK OPTION
AGREEMENT

     

    Pursuant
to the Stock Option Grant Notice (“Grant Notice”) to
which this Stock Option Agreement (this “Agreement”) is
attached, Balqon Corporation, a Nevada corporation (the “Corporation”), has
granted to Optionee an option under the Corporation’s 2008 Stock Incentive Plan
(the “Plan”) to
purchase the number of shares of Common Stock indicated in the Grant
Notice.

     

    ARTICLE
I

    GENERAL

     

    1.1           Defined
Terms. Capitalized terms not specifically defined herein shall have the
meanings specified in the Plan and the Grant Notice.

     

    1.2           Incorporation
of Terms of Plan. This Option is subject to the terms and conditions of
the Plan which are incorporated herein by reference.

     

    ARTICLE
II

    GRANT OF
OPTION

     

    2.1           Grant of
Option. In consideration of Optionee’s past and/or continued employment
with or service to the Corporation or a Parent or Subsidiary and for other good
and valuable consideration, effective as of the Grant Date set forth in the
Grant Notice (the “Grant Date”), the
Corporation irrevocably grants to Optionee the Option to purchase any part or
all of an aggregate of the number of shares of Common Stock set forth in the
Grant Notice, upon the terms and conditions set forth in the Plan and this
Agreement. Unless designated as a Non-Statutory Option in the Grant Notice, the
Option shall be an Incentive Option to the maximum extent permitted by
law.

     

    2.2           Exercise
Price. The exercise price of the shares of Common Stock subject to the
Option shall be as set forth in the Grant Notice, without commission or other
charge; provided, however, that:

     

    (a)           the
exercise price per share shall not be less than 100% of the Fair Market Value
per share of Common Stock on the Grant Date; and

     

    (b)           if
this Option is designated as an Incentive Option, the price per share of the
shares subject to the Option shall not be less than the greater of (i) 100% of
the Fair Market Value of a share of Common Stock on the Grant Date, or (ii) 110%
of the Fair Market Value of a share of Common Stock on the Grant Date in the
case of an Optionee then owning (within the meaning of Section 424(d) of
the Code) more than 10% of the total combined voting power of all classes of
stock of the Corporation or any “subsidiary corporation” of the Corporation or
any “parent corporation” of the Corporation (each within the meaning of
Section 424 of the Code).

     

    
      
        
        

      

      
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    2.3           Consideration
to the Corporation. In consideration of the grant of the Option by the
Corporation, Optionee agrees to render faithful and efficient services to the
Corporation or any Parent or Subsidiary. Nothing in the Plan or this Agreement
shall confer upon Optionee any right to (a) continue in the employ of the
Corporation or any Parent or Subsidiary or shall interfere with or restrict in
any way the rights of the Corporation and its Subsidiaries, which are hereby
expressly reserved, to discharge Optionee, if Optionee is an Employee, or (b)
continue to provide services to the Corporation or any Parent or Subsidiary or
shall interfere with or restrict in any way the rights of the Corporation or its
Parents and Subsidiaries, which are hereby expressly reserved, to terminate the
services of Optionee, if Optionee is a consultant, at any time for any reason
whatsoever, with or without cause, except to the extent expressly provided
otherwise in a written agreement between the Corporation, a Parent or a
Subsidiary and Optionee, or (c) continue to serve as a member of the Board or
shall interfere with or restrict in any way the rights of the Corporation, which
are hereby expressly reserved, to discharge Optionee in accordance with the
Corporation’s Bylaws.

     

    ARTICLE
III

    PERIOD OF
EXERCISABILITY

     

    3.1           Commencement
of Exercisability.

     

    (a)           Subject
to Sections 3.3 and
5.8, the Option shall become vested and exercisable in such amounts and
at such times as are set forth in the Grant Notice.

     

    (b)           No
portion of the Option which has not become vested and exercisable at the date of
Optionee’s Termination of Service shall thereafter become vested and
exercisable, except as may be otherwise provided by the Administrator or as set
forth in a written agreement between the Corporation and Optionee.

     

    3.2           Duration
of Exercisability. The installments provided for in the vesting schedule
set forth in the Grant Notice are cumulative. Each such installment which
becomes vested and exercisable pursuant to the vesting schedule set forth in the
Grant Notice shall remain vested and exercisable until it becomes unexercisable
under Section 3.3.

     

    3.3           Expiration
of Option. The Option may not be exercised to any extent by anyone after
the first to occur of the following events:

     

    (a)           The
expiration of ten years from the Grant Date;

     

    (b)           If
this Option is designated as an Incentive Option and Optionee owned (within the
meaning of Section 424(d) of the Code), at the time the Option was granted,
more than 10% of the total combined voting power of all classes of stock of the
Corporation or any “subsidiary corporation” of the Corporation or “parent
corporation” of the Corporation (each within the meaning of Section 424 of
the Code), the expiration of five years from the date the Option was granted;
or

     

    (c)           Except
as set forth in a written agreement with the Corporation, the expiration of
three (3) months following the date of Optionee’s termination of Service, unless
such cessation occurs by reason of Optionee’s death, disability or Optionee’s
discharge for cause;

     

    
      
        
        

      

      
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    (d)           The
expiration of twelve (12) months following the date of Optionee’s termination of
Service by reason of Optionee’s death or disability; or

     

    (e)           The
date of Optionee’s termination of Service by the Corporation or any Parent or
Subsidiary by reason of Optionee’s discharge for cause.

     

    Optionee
acknowledges that an Incentive Option exercised more than three (3) months after
Optionee’s termination of status as an Employee, other than by reason of death
or disability, will be taxed as a Non-Statutory Option.

     

    3.4           Special
Tax Consequences. Optionee acknowledges that, to the extent that the
aggregate Fair Market Value (determined as of the time the Option is granted) of
all shares of Common Stock with respect to which Incentive Options, including
the Option, are exercisable for the first time by Optionee in any calendar year
exceeds $100,000 (or such other limitation as imposed by Section 422(d) of
the Code), the Option and such other options shall be treated as not qualifying
under Section 422 of the Code but rather shall be considered Non-Statutory
Options. Optionee further acknowledges that the rule set forth in the preceding
sentence shall be applied by taking Options and other “incentive stock options”
into account in the order in which they were granted, as determined under
Section 422(d) of the Code and the Treasury Regulations
thereunder.

     

    ARTICLE
IV

    EXERCISE OF
OPTION

     

    4.1           Person
Eligible to Exercise. Except as provided in Sections 5.2(b) and
5.2(c), during the lifetime of Optionee, only Optionee may exercise the
Option or any portion thereof. After the death of Optionee, any exercisable
portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be
exercised by Optionee’s personal representative or by any person empowered to do
so under the deceased Optionee’s will or under the then applicable laws of
descent and distribution.

     

    4.2           Partial
Exercise. Any exercisable portion of the Option or the entire Option, if
then wholly exercisable, may be exercised in whole or in part at any time prior
to the time when the Option or portion thereof becomes unexercisable under Section 3.3.

     

    4.3           Manner of
Exercise. The Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Plan Administrator, at the address given
beneath the signature of the Corporation’s authorized officer on the Grant
Notice, of all of the following prior to the time when the Option or such
portion thereof becomes unexercisable under Section 3.3:

     

    (a)           An
exercise notice in writing signed by Optionee or any other person then entitled
to exercise the Option or portion thereof, stating that the Option or portion
thereof is thereby exercised, such notice complying with all applicable rules
established by the Plan Administrator. Such notice shall be substantially in the
form attached as Exhibit B to the
Grant Notice (or such other form as is prescribed by the Plan
Administrator);

     

    
      
        
        

      

      
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    (b)           Full
payment for the shares of Common Stock with respect to which the Option or
portion thereof is exercised in one or more of the following forms:

     

    (i)           cash
or check made payable to the Corporation;

     

    (ii)           shares
of Common Stock valued at Fair Market Value on the Exercise Date which have been
owned by Optionee for at least six (6) months, duly endorsed for transfer to the
Corporation;

     

    (iii)           through
the delivery of a notice that Optionee has placed a market sell order with a
broker with respect to shares of Common Stock then issuable upon exercise of the
Option, and that the broker has been directed to pay a sufficient portion of the
net proceeds of the sale to the Company in satisfaction of the Option exercise
price; provided, that payment of such proceeds is made to the Company upon
settlement of such sale; or

     

    (iv)           subject
to any applicable laws, any combination of the consideration provided in the
foregoing paragraphs (i), (ii) and (iii).

     

    (c)           A
bona fide written representation and agreement, in such form as is prescribed by
the Administrator, signed by Optionee or the other person then entitled to
exercise such Option or portion thereof, stating that the shares of Common Stock
are being acquired for Optionee’s own account, for investment and without any
present intention of distributing or reselling said shares or any of them except
as may be permitted under the Securities Act of 1933, as amended (the “1933 Act”) and then
applicable rules and regulations thereunder and any other applicable law, and
that Optionee or other person then entitled to exercise such Option or portion
thereof will indemnify the Corporation against and hold it free and harmless
from any loss, damage, expense or liability resulting to the Corporation if any
sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Plan Administrator may, in
its absolute discretion, take whatever additional actions it deems appropriate
to ensure the observance and performance of such representation and agreement
and to effect compliance with the 1933 Act and any other federal or state
securities laws or regulations and any other applicable law. Without limiting
the generality of the foregoing, the Plan Administrator may require an opinion
of counsel acceptable to it to the effect that any subsequent transfer of shares
acquired on an Option exercise does not violate the 1933 Act, and may issue
stop-transfer orders covering such shares. Share certificates evidencing Common
Stock issued on exercise of the Option shall bear an appropriate legend
referring to the provisions of this subsection (c) and the agreements herein.
The written representation and agreement referred to in the first sentence of
this subsection (c) shall, however, not be required if the shares to be issued
pursuant to such exercise have been registered under the 1933 Act, and such
registration is then effective in respect of such shares;

     

    
      
        
        

      

      
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    (d)           The
receipt by the Company of full payment for such shares, including payment of any
applicable withholding tax, which may be in the form of consideration used by
Participant to pay for such shares under Section 4.3(b),
subject to Article Four, Section I of the Plan; and

     

    (e)           In
the event the Option or portion thereof shall be exercised pursuant to Section 4.1 by
any person or persons other than Optionee, appropriate proof of the right of
such person or persons to exercise the Option.

     

    4.4           Conditions
to Issuance of Stock Certificates. The shares of Common Stock deliverable
upon the exercise of the Option, or any portion thereof, may be either
previously authorized but unissued shares or issued shares which have then been
reacquired by the Corporation. Such shares shall be fully paid and
nonassessable. The Corporation shall not be required to issue or deliver any
shares of Stock purchased upon the exercise of the Option or portion thereof
prior to fulfillment of all of the following conditions:

     

    (a)           The
admission of such shares to listing on all stock exchanges on which such Common
Stock is then listed; and

     

    (b)           The  compliance
with all applicable requirements of federal and state securities laws, and all
applicable listing requirements of any stock exchange or other market on which
Common Stock is then quoted or listed for trading including:

     

    (i)           The
completion of any registration or other qualification of such shares under any
state or federal law or under rulings or regulations of the Securities and
Exchange Commission or of any other governmental regulatory body, which the Plan
Administrator shall, in its absolute discretion, deem necessary or advisable;
and

     

    (ii)           The
obtaining of any approval or other clearance from any state or federal
governmental agency which the Plan Administrator shall, in its absolute
discretion, determine to be necessary or advisable; and

     

    (c)           The
receipt by the Corporation of full payment for such shares, including payment of
any applicable Withholding Taxes, which may be in the form of consideration used
by Optionee to pay for such shares under Section 4.3(b),
subject to Article Four, Section I of the Plan; and

     

    (d)           The
lapse of such reasonable period of time following the exercise of the Option as
the Plan Administrator may from time to time establish for reasons of
administrative convenience.

     

    4.5           Rights as
Stockholder. The holder of the Option shall not be, nor have any of the
rights or privileges of, a stockholder of the Corporation in respect of any
shares purchasable upon the exercise of any part of the Option unless and until
such shares shall have been issued by the Corporation to such holder (as
evidenced by the appropriate entry on the books of the Corporation or of a duly
authorized transfer agent of the Corporation). No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
shares are issued, except as provided in Article Two, Section
IV of the Plan.

     

    
      
        
        

      

      
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    ARTICLE
V

    OTHER
PROVISIONS

     

    5.1           Administration.
The Plan Administrator shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret, amend or
revoke any such rules. All actions taken and all interpretations and
determinations made by the Plan Administrator in good faith shall be final and
binding upon Optionee, the Corporation and all other interested persons. No
member of the Plan Administrator shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan,
this Agreement or the Option. In its absolute discretion, the Board may at any
time and from time to time exercise any and all rights and duties of the Plan
Administrator under the Plan and this Agreement.

     

    5.2           Option
Not Transferable.

     

    (a)           Subject
to Section 5.2(b),
the Option may not be sold, pledged, assigned or transferred in any manner other
than by will or the laws of descent and distribution, unless and until the
shares underlying the Option have been issued, and all restrictions applicable
to such shares have lapsed.  Neither the Option nor any interest or
right therein shall be liable for the debts, contracts or engagements of
Optionee or his or her successors in interest or shall be subject to disposition
by transfer, alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by operation
of law by judgment, levy, attachment, garnishment or any other legal or
equitable proceedings (including bankruptcy), and any attempted disposition
thereof shall be null and void and of no effect, except to the extent that such
disposition is permitted by the preceding sentence.

     

    (b)           Notwithstanding
any other provision in this Agreement, with the consent of the Plan
Administrator and to the extent the Option is not intended to qualify as an
Incentive Option, the Option may be transferred to one or more Family Members of
the Optionee or to a trust established exclusively for the Optionee and/or one
or more such Family Member, subject to the terms and conditions set forth in
Article Two,
Section I(F)(ii) of the Plan.

     

    (c)           Unless
transferred in accordance with Section 5.2(b),
during the lifetime of Optionee, only Optionee may exercise the Option or any
portion thereof.  Subject to such conditions and procedures as the
Plan Administrator may require, a person or persons who acquire a proprietary
interest in this Option pursuant to a transfer in accordance with Section 5.2(b)
may exercise this Option or any portion thereof during Optionee’s
lifetime.

     

    (d)           Notwithstanding
the foregoing, Optionee may designate one or more persons as the beneficiary or
beneficiaries of this Option, and this Option shall (if it is outstanding), in
accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon Optionee’s death. Such beneficiary or
beneficiaries shall take the transferred Option subject to all the terms and
conditions of the applicable agreement evidencing each such transferred Option,
including (without limitation) the limited time period during which the Option
may be exercised following Optionee’s death.

     

    
      
        
        

      

      
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    (e)           Subject
to Section
5.2(d), after the death of Optionee, any exercisable portion of this
Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be
exercised by Optionee’s personal representative or by any person empowered to do
so under the deceased Optionee’s will or under the then applicable laws of
descent and distribution.

     

    5.3           Lock-Up
Period. Optionee hereby agrees that, if so requested by the Corporation
in connection with any registration of the offering of any securities of the
Corporation under the 1933 Act, Optionee shall not sell or otherwise transfer
any shares of Stock or other securities of the Corporation during such period as
may be requested in writing by the Corporation and agreed to in writing by the
Corporation (which period shall not be longer than one hundred eighty days) (the
“Market Standoff
Period”) following the effective date of a registration statement of the
Corporation filed under the 1933 Act; provided, however, that such
restriction shall apply only to the first registration statement of the
Corporation to become effective under the 1933 Act that includes securities to
be sold on behalf of the Corporation to the public in an underwritten public
offering under the 1933 Act.

     

    5.4           Restrictive
Legends and Stop-Transfer Orders.

     

    (a)           The
share certificate or certificates evidencing the shares of Common Stock
purchased hereunder shall be endorsed with any legends that may be required by
state or federal securities laws.

     

    (b)           Optionee
agrees that, in order to ensure compliance with the restrictions referred to
herein, the Corporation may issue appropriate “stop transfer” instructions to
its transfer agent, if any, and that, if the Corporation transfers its own
securities, it may make appropriate notations to the same effect in its own
records.

     

    (c)           The
Corporation shall not be required: (i) to transfer on its books any shares of
Common Stock that have been sold or otherwise transferred in violation of any of
the provisions of this Agreement, or (ii) to treat as owner of such shares of
Common Stock or to accord the right to vote or pay dividends to any purchaser or
other transferee to whom such shares shall have been so
transferred.

     

    5.5           Shares to
Be Reserved. The Corporation shall at all times during the term of the
Option reserve and keep available such number of shares of Common Stock as will
be sufficient to satisfy the requirements of this Agreement.

     

    5.6           Notices.
Any notice to be given under the terms of this Agreement to the Corporation
shall be addressed to the Corporation in care of the Plan Administrator at the
address given beneath the signature of the Corporation’s authorized officer on
the Grant Notice, and any notice to be given to Optionee shall be addressed to
Optionee at the address given beneath Optionee’s signature on the Grant Notice.
By a notice given pursuant to this Section 5.6,
either party may hereafter designate a different address for notices to be given
to that party. Any notice which is required to be given to Optionee shall, if
Optionee is then deceased, be given to the person entitled to exercise his or
her Option pursuant to Section 4.1 by
written notice under this Section 5.6. Any
notice shall be deemed duly given when sent via email or when sent by certified
mail (return receipt requested) and deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the United States Postal
Service.

     

    
      
        
        

      

      
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    5.7          
 Titles.
Titles are provided herein for convenience only and are not to serve as a basis
for interpretation or construction of this Agreement.

     

    5.8       
    Stockholder
Approval. Stockholder approval of the Plan will be obtained within
twelve months of ____________, 2008.

     

    5.9       
    Governing
Law; Severability. This Agreement shall be administered, interpreted and
enforced under the laws of the State of Nevada, without regard to the conflicts
of law principles thereof.  Should any provision of this Agreement be
determined by a court of law to be illegal or unenforceable, the other
provisions shall nevertheless remain effective and shall remain
enforceable.

     

    5.10        
 Conformity
to Securities Laws. Optionee acknowledges that the Plan is intended to
conform to the extent necessary with all provisions of the 1933 Act and the 1934
Act and any and all regulations and rules promulgated by the Securities and
Exchange Commission thereunder, and state securities laws and regulations.
Notwithstanding anything herein to the contrary, the Plan shall be administered,
and the Option is granted and may be exercised, only in such a manner as to
conform to such laws, rules and regulations. To the extent permitted by
applicable law, the Plan and this Agreement shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations.

     

    5.11          Amendments.
This Agreement may not be amended or modified adversely to the Optionee’s
interest except by an instrument in writing, signed by Optionee or such other
person as may be permitted to exercise the Option pursuant to Section 4.1 and by
a duly authorized representative of the Corporation.

     

    5.12          Successors
and Assigns. The Corporation may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the
benefit of the successors and assigns of the Corporation. Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
Optionee and his or her heirs, executors, administrators, successors and
assigns.

     

    5.13          Notification
of Disposition. If this Option is designated as an Incentive Option,
Optionee shall give prompt notice to the Corporation of any disposition or other
transfer of any shares of Common Stock acquired under this Agreement if such
disposition or transfer is made (a) within two years from the Grant Date with
respect to such shares or (b) within one year after the transfer of such shares
to the Optionee. Such notice shall specify the date of such disposition or other
transfer and the amount realized, in cash, other property, assumption of
indebtedness or other consideration, by Optionee in such disposition or other
transfer.

     

    
      
        
        

      

      
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    5.14          Limitations
Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan or this Agreement, if Optionee is subject to
Section 16 of the 1934 Act, the Plan, the Option and this Agreement shall
be subject to any additional limitations set forth in any applicable exemptive
rule under Section 16 of the 1934 Act (including any amendment to Rule
16b-3 of the Exchange Act) that are requirements for the application of such
exemptive rule. To the extent permitted by applicable law, this Agreement shall
be deemed amended to the extent necessary to conform to such applicable
exemptive rule.

     

    5.15          Entire
Agreement. The Plan and this Agreement (including all Exhibits hereto)
constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Corporation (including Balqon
Corporation, a California Corporation which merged with and into the Corporation
on ____________, 2008) and Optionee with respect to the subject matter
hereof.

     

     

     

     

    
      
        
        

      

      
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    EXHIBIT
B

    TO
STOCK OPTION GRANT NOTICE

     

    FORM OF EXERCISE
NOTICE

     

    Effective
as of today, ______________, ____________ the undersigned (“Optionee”) hereby
elects to exercise Optionee’s option to purchase ___________ shares of the
Common Stock (the “Shares”) of Balqon
Corporation, a Nevada corporation (the “Corporation”), under
and pursuant to the 2008 Stock Incentive Plan (the “Plan”) and the Stock
Option Grant Notice and Stock Option Agreement dated _______________ (the “Option Agreement”).
Capitalized terms used herein without definition shall have the meanings given
in the Option Agreement.

     

    
      	
              Grant
      Date:

            	______________________________________________________________________________
	 	 
	
              Number
      of Shares as to which Option is Exercised:

            	______________________________________________________________________________
	
                 

            	 
      
	
              Exercise
      Price per Share:

            	
              $__________________

            
	 	 
	
              Total
      Exercise Price:

            	
              $__________________

            
	 	 
	
              Certificate
      to be issued in name of: 

            	 
	
              Payment
      delivered herewith:

            	$_____________________________
      (Representing the full Exercise Price for the Shares, as well as any
      applicable withholding tax) 

               

              Form
      of Payment:
      ________________________________________________________________

            
	
               

            	
                                       
      (Please specify)

            
	
               

            	
                                                             

            
	
              Type
      of Option:

            	
              £
      Incentive
      Option                
      £
      Non-Statutory Option

            


    

     

    Optionee
acknowledges that Optionee has received, read and understood the Plan and the
Option Agreement. Optionee agrees to abide by and be bound by their terms and
conditions. Optionee understands that Optionee may suffer adverse tax
consequences as a result of Optionee’s purchase or disposition of the Shares.
Optionee represents that Optionee has consulted with any tax consultants
Optionee deems advisable in connection with the purchase or disposition of the
Shares and that Optionee is not relying on the Corporation for any tax advice.
The Plan and Option Agreement are incorporated herein by reference. This
Agreement, the Plan and the Option Agreement constitute the entire agreement of
the parties and supersede in their entirety all prior undertakings and
agreements of the Corporation and Optionee with respect to the subject matter
hereof.

     

    ACCEPTED
BY:

     

    
      
        
          	BALQON
      CORPORATION  	 	PARTICIPANT
	 	 	 	 	 
	 	 	 	 	 
	By:	
                   

                	 	
                  By:  
       

                	
                   

                
	Print
      Name:	 	 	Print
      Name:	 
	Title:  	 	 	 	 
	Address:
      	 	 	Address: