ex_10-11.htm


    
      

    

    
      

    

    EXHIBIT
10.11

     

     

    
      
        
          	
                  

                	
                  South
      Coast

                  Air
      Quality Management District

                	
                  Contract
      No. 08294

                   Standard

                


        

      

    

     

    This
Contract consists of 18 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 1701 East Edinger Avenue, Unit E-3,
      Santa Ana, California 92705.

            
	 
      	 
      
	
              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.

              


      

       

    

    
      
        
        

      

      
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    Contract
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              4.

            	
              TERM - The term
      of this Contract is from the date of execution by both parties to May 31,
      2010, 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 delivery of vehicle included in 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.

            
	 
      	 
      	 
      
	 
      	
              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.

            


    

     

    
      
        
        

      

      
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              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 amount of Three Hundred
      Thousand Dollars ($300,000) 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: Naveen Berry.

            
	 
      	 
      	 
      
	 
      	
              B.

            	
              AQMD
      reserves the right to disallow charges when the invoiced services are not
      performed satisfactorily in AQMD sole judgment.

            
	 
      	 
      	 
      
	 
      	
              C.

            	
              Upon
      AQMD Governing Board approval, CONTRACTOR shall have first right of
      refusal to purchase the Electric Yard Hostler at fair market value through
      the AQMD surplused equipment
process.

            


    

    
      	 
      	 
      
	
              9.

            	
              RIGHT TO
      PUBLISH REPORT AND DOCUMENTS - Title and full ownership
      rights to any documents or reports developed under this Contract, as
      contained in Task 3 of the Statement of Work, shall at all times remain
      with AQMD.

            
	 
      	 
      
	 
      	
              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. AQMD agrees to
      not disseminate proprietary technical data outside the AQMD without
      CONTRACTOR’S written consent. 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.

            
	 
      	 
      	 
      
	
              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.

            


    

     

    
      
        
        

      

      
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              AQMD:

            	
              South
      Coast Air Quality Management District

              21865
      Copley Drive

              Diamond
      Bar, CA 91765-4178

              Attn:
      Naveen Berry

            
	 	 
      	 
      
	 	
              CONTRACTOR:

            	
              Balqon
      Corporation

              1701
      East Edinger Avenue, Unit E-3

              Santa
      Ana, California 92705

              Attn:
      B. Samra

            


    

    


    
      	 
      	 
      
	
              11.

            	
              EMPLOYEES OF
      CONTRACTOR

            
	 	 
	 
      	
              A.

            	
              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.

            
	 
      	 
      	 
      
	 
      	
              B.

            	
              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.

            
	 
      	 
      	 
      
	 
      	
              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.

            


    

     

    
      
        
        

      

      
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              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.

            
	 
      	 
      	 
      	 
      
	
              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.

            


    

     

    
      
        
        

      

      
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              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 lights 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.

            
	 
      	 
      	 
      
	
              25.

            	
              ROYALTY
    FEE

            
	 
      	 
      	 
      
	 
      	
              A.

            	
              In
      partial consideration of AQMD’s issuance of this Contract, and its
      inducement for future sales of Yard Hostlers and Electric Trucks (defined
      as United States Department of Transportation Class 8 heavy duty trucks
      with Gross Vehicle Weights equal to or greater than 33,000 pounds) for
      general commercial sates and use (“Electric Vehicles”), following the
      effective date of this Contract, CONTRACTOR (which for purposes of this
      Paragraph 25 shall include any successor by sale or merger to CONTRACTOR
      and any assignee or licensee of its technology for Electric Vehicles)
      shall pay to AQMD a royalty fee of One Thousand Dollars ($1,000) per
      Electric Vehicle sold or leased by CONTRACTOR (“Royalty Fee”) to a
      purchaser or lessee other than the AQMD and the City of Los Angeles.
      Within sixty (60) days after the end of each 12 month period from the date
      of execution of this CONTRACT, CONTRACTOR shall submit to AQMD a written
      statement identifying each sale or lease of an Electric Vehicle during the
      previous calendar year, the purchaser/lessee and status of payment or
      lease. For purposes of this clause, “sale” shall mean an agreement to
      purchase with or without payment being made therefore and “lease” shall
      mean an agreement to lease with or without payment being made therefore.
      AQMD may audit such written statements upon ten (10) days’ written notice
      to CONTRACTOR.

            


    

     

    
      
        
        

      

      
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              B.

            	
              The
      amount of the Royalty Fee shall, at the end of each five (5) year period
      after CONTRACTOR’S delivery of the Electric Trucks possessing
      specifications and features in accordance with Attachment 1 - Statement of
      Work and approved in writing by AQMD (the “First Production Date”), be
      adjusted up or down based on the inflation or deflation rate for that
      five-year period, as measured by the change in the Producer Price Index
      during that five-year period. The Producer Price Index shall mean and
      refer to that table in the Producer Price Index published by the United
      States Department of Labor, Bureau of Labor Statistics (Index 2007 = 100).
      If such index is discontinued, then any successor Producer Price Index of
      the United States Bureau of Labor Statistics, or successor agency thereto,
      shall be used, and if there is no successor Producer Price Index, the
      parties shall designate a substitute index or formula. In addition, AQMD
      agrees to meet and confer with CONTRACTOR at the end of each such
      five-year period regarding whether downward adjustments to the Royalty Fee
      are warranted in light of circumstances at the time if the Royalty Fee is
      at a level that makes the sale of Electric Vehicles or the license of
      electric vehicle technology by CONTRACTOR not commercially
      feasible.

            
	 
      	 
      	 
      
	 
      	
              C.

            	
              CONTRACTOR
      shall use its best efforts to market Electric Vehicles itself or through
      third parties retained by or on its behalf or to make the technology
      available through licensees through the end of the aforementioned royalty
      period. It is the intent of the AQMD and CONTRACTOR that commercially
      feasible Electric Vehicles be available for use in Southern
      California.

            
	 
      	 
      	 
      
	 
      	
              D.

            	
              This
      Agreement is intended to be interpreted in a commercially reasonable way
      so as to (i) enhance the availability of commercially feasible Electric
      Vehicles in Southern California, (ii) facilitate profitable business
      opportunities for CONTRACTOR, and (iii) continue royalty income to
      AQMD.

            
	 
      	 
      	 
      
	 
      	
              E.

            	
              AQMD
      and CONTRACTOR expressly agree that this clause and the rights and
      obligations comprising such provision, including but not limited to
      CONTRACTOR’s obligations to pay Royalty Fees to AQMD, including Paragraph
      25B, above, shall survive the expiration of this Agreement and that
      CONTRACTOR shall have a continuing obligation to pay such Royalty
      Fees.

            
	 
      	 
      	 
      
	
              26.

            	
              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.

            


    

     

    
      
        
        

      

      
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              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.

            
	 
      	 
      	 
      
	
              27.

            	
              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.

            
	 
      	 
      	 
      
	
              28.

            	
              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]

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    Contact
No. 08294

    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:

            	
              

            
	 
      	 
      	 
      	
              Name:

            	
              BALWINDER
      SAHRA

            
	 
      	
              Dr.
      William A. Burke, Chairman, Governing Board

            	 
      	
              Title:

            	
              PRESIDENT/CEO

            
	 
      	 
      	 
      	 
      	 
      
	
              Date:

            	
              5/15/08

            	 
      	
              Date:

            	
              MAY
      14TH, 2008

            
	 
      	 
      	 
      	 
      	 
      
	
              ATTEST:

            	 
      	 
      	 
      
	
              Saundra
      McDaniel, Clerk of the Board

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              By:

            	
              

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              APPROVED
      AS TO FORM:

            	 
      	 
      	 
      
	
              Kurt
      R. Wiese, District Counsel

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              By:

            	
              

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              //
      Standard Boilerplate

            	 
      	 
      	 
      
	
              Last
      Updated: 5 September 2006

            	 
      	 
      	 
      


    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    ATTACHMENT
1

    STATEMENT
OF WORK FOR

    BALQON
CORPORATION

    YARD
HOSTLER

     

    In
December 2006, the Governing Board awarded a contract to co-sponsor with POLA
the development and demonstration of an electric tow tractor for container
movement within and around the Port. Based on the original scope of work, an
on-road truck chassis with a longer wheelbase was developed and is currently
undergoing rigorous testing. Testing completed to date clearly shows that the
vehicle is able to tow up to 68,000 pounds and is capable of achieving 35 mph
top speed. On-road testing has not yet been initiated, since an experimental
permit has not yet been issued by the Department of Transportation. However, as
anticipated by staff, the design of the tow tractor, with consideration for the
electric components, is well suited for a yard hostler application, but will
require a shorter wheelbase. Testing completed to date has verified that the
performance capabilities exceed the typical duty-cycle requirements of a yard
hostler, but in-use testing is required to determine the effect of operation and
recharge cycles on battery life.

     

    This
project is to purchase an electric yard hostler that can replace existing diesel
trucks to transport containers within marine terminals and other off-port
warehousing applications. The vehicle will be used to establish a “loaner”
program to allow multiple terminal operators to test the vehicle in anticipation
of a purchase. The proposed hostler is expected to have fast-charging, a maximum
speed of 35 mph, and a range of 40 miles per charge. The design of the hostler
will provide sufficient torque and power required to tow up to a 60,000 lb cargo
container. The design goals are well in excess of typical yard hostlers that
have an average use of less than 15 miles per day and a top speed of less than
20 miles per hour. The proposal includes installation of a fast charger that can
be moved to numerous sites, as well as maintenance for the electric hostler. The
purchase of the electric yard hostler to initiate a demonstration/“loaner”
program will enable additional cargo handling entities to experience an electric
yard hostler in actual operation. These include other terminal locations within
the two ports as well as off-port warehousing operations. Such a “loaner”
program will provide owner/operators with “hands-on” exposure to a fully
functional electric yard hostler, as well as the recharging protocol prior to
any purchase. Specifically, fleet operators will gain experience regarding the
performance of electric yard hostler in terms of drivability, range, fuel and
maintenance cost savings, and overall comfort as compared to corresponding
diesel yard hostlers. Each participant in the demonstration program could have
use of the electric yard hostler for a 30- to 45-day period.

     

    The
following tasks will be completed during the 24 month project:

    
      	 
      	 
      	 
      
	
              1.

            	
              Delivery
      of a Completed Electric Yard Hostler

            	
              Duration
      180 Days

            
	 
      	 
      	 
      
	 
      	
              CONTRACTOR
      will provide a fully operation yard hostler, known as Balqon’s Nautilus
      E-20 Model, which has the following
  specifications:

            


    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              
                
                  	
                          Max
      Speed

                        	
                          30
      Miles

                        	 
      	 
      
	
                          Turning
      Radius

                        	
                          21
      Feet

                        	 
      	 
      
	
                          Braking

                        	
                          Air
      Brakes

                        	 
      	 
      
	
                          Gradeability

                        	
                          10%
      No Load

                        	 
      	 
      
	
                          Tow
      Capacity

                        	
                          60,000
      lbs

                        	 
      	 
      
	
                          Range

                        	
                          30
      miles between charges

                        	 
      	 
      
	
                          Battery

                        	
                          Lead
      Acid - Deep Cycle traction; 140 Kwhr

                        	 
      	
                          5
      Year Warranty; Forced Air Cooling; Single Point Battery Watering System;
      Additional Replacement Battery Pack

                        
	
                          Charger

                        	
                          Off
      Board - 80 KW; 4 Port; Max Port Output-100 amps

                        	 
      	
                          Includes
      Power Station Stand and Charging Cables

                        
	
                          Charge
      Time

                        	
                          6-8
      Hours

                        	 
      	
                          1
      Hour Fast Charge - 60% Capacity

                        
	
                          Controller

                        	
                          240
      KW AC Traction; 230 VAC output; 336 VDC Input

                        	 
      	
                          Liquid
      Cooled; Remote Data Acquisition

                        
	
                          Motor

                        	
                          230
      VAC; 100 hp continuous duty traction

                        	 
      	 
      
	
                          Drive
      Assembly

                        	
                          Dual
      Planetary Reduction; 70,000 lbs terminal rating; Split Brake Automatic, 4
      speed, electronically controlled heavy duty transmission couple to
      electric motor

                        	 
      	
                          Dual
      Rear Wheel; 275/70R22.5 LRJ
Tires

                        


                

              

            

          

        

      

    

     

    
      	 
      	
              The
      vehicle shall have a 2 year warranty on the vehicle and accessories, and a
      5 year prorated warranty on the batteries, including the replacement
      battery. Upon receipt of a fully operation yard hostler, AQMD will take
      title and ownership of the yard hostler.

            
	 	 
	
              2.

            	
              Maintenance
      & Charger Installation

            	
              Duration
      24 months

            


    

     

    CONTRACTOR
shall provide maintenance/service that includes all preventative maintenance,
including labor and material for a 24 month period after delivery of the
vehicle. CONTRACTOR shall also conduct charger removal and installation for a
minimum of 5 times at different demonstration sites. CONTRACTOR shall not be
responsible for bringing appropriate utilities sufficient to operate the fast
charger at the demonstration sites.

    
      	 
      	 
      
	
              3.

            	
              Data
      Collection and Reporting

            


    

     

    CONTRACTOR
shall collect information on the yard hostler, including use (hours of usage and
mileage daily, weekly and monthly; usage of replacement battery pack) charging
(time and frequency, including opportunity charges) and maintenance/service
(including regular maintenance of battery and other components, service calls
and repairs, and log of upgrades/software changes to optimize operation). These
reports should be submitted on a monthly basis for the term of the contract, as
required by AQMD.

    


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    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, to AQMD for review, comment, and approval. Two
stapled copies of each progress reports due by the 10th of each reporting period and
once a year, a 2 page summary report noted in item (5) below. CONTRACTOR shall
submit one copy of each 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 if applicable. Each 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 yard hostler in operation and any
      results that can be better transmitted
  photographically.

            


    

     

    
      
        	
                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:

    
      	 
      	 
      	 
      
	 
      	
              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;

                


        

      

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

       

    

    
      
        
          
            
              	 
      	
                      •

                    	
                      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 shortcomings and the specific needs for technology
      advancement. Furthermore, CONTRACTOR shall specifically discuss the
      condition of the batteries, and overall utility of the vehicle by terminal
      operators.

              
	 
      	 
      	 
      
	 
      	
                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.

              
	 
      	 
      	 
      
	 
      	
                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

              
	 
      	 
      	 
      
	 
      	
                l)

              	
                Recommendations,
      including design and engineering requirements for the yard hostler to be
      further optimized.

              


      

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    


    
      
        	
                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
project.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    ATTACHMENT
2

    PAYMENT
SCHEDULE FOR

    BALQON
CORPORATION

    YARD
HOSTLER

     

    The total
amount of AQMD funding for this project shall not exceed $300,000.

     

    
      
        
          	 
      	
                  TASK

                	
                  Scheduled

                  Completion
      Date

                  (From
      Contract

                  Execution)

                	 
      	
                  AQMD

                  ($)

                
	
                  0.0

                	
                  Contract
      Execution

                	
                  0

                	 
      	 
      
	
                  1.0

                	
                  Deliver

                	
                  180
      Days

                	 
      	
                  280,000

                
	 
      	
                  -
      Fully Operational Yard Hostler

                	 
      	 
      	 
      
	 
      	
                  -
      Replacement Battery Pack

                	 
      	 
      	 
      
	 
      	
                  -
      Fast Charger

                	 
      	 
      	 
      
	
                  2.0

                	
                  Maintenance
      & Charger Installations

                	
                  24
      Months

                	 
      	
                  15,000

                
	
                  3.0

                	
                  Data
      Collection and Reporting, including

                	 
      	 
      	
                  5,000

                
	 
      	
                  -
      Draft Final Report

                	
                  22
      Months

                	 
      	 
      
	 
      	
                  -
      Final Report

                	
                  24
      Months

                	 
      	 
      
	 
      	
                  -
      2-Page Project Synopsis

                	
                  24
      Months

                	 
      	 
      
	 
      	
                  TOTAL

                	 
      	
                  $

                	
                  300,000

                


        

      

    

     

    


    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

       

    

    
      	
              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).

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      There
should also be a brief discussion of performance tradeoffs. That is, did
achieving one performance characteristic goal, such as missions, 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

      This
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.

       

       

      17