EXHIBIT
10.4


BUSINESS
FINANCING MODIFICATION AGREEMENT
  This
Business Financing Modification Agreement is entered into as of August 04, 2009,
by and between Balqon Corporation (the "Borrower") and Bridge Bank, National
Association ("Lender").
  1.           DESCRIPTION
OF EXISTING INDEBTEDNESS: Among other indebtedness which may be owing by
Borrower to Lender, Borrower is indebted to Lender pursuant to, among other
documents, a Business Financing Agreement, dated February 18, 2009 by and
between Borrower to Lender, as may be amended from time to time (the "Business
Financing Agreement"). Capitalized terms used without definition herein shall
have the meanings assigned to them in the Business Financing
Agreement.
  Hereinafter,
all indebtedness owing by Borrower to Lender shall be referred to as the
"Indebtedness" and the Business Financing Agreement and any and all other
documents executed by Borrower in favor of Lender shall be referred to as the
"Existing Documents."
  2.           DESCRIPTION OF CHANGE IN
TERMS.
  A.
              Modification(s)to
      Business Financing
Agreement:
  1.
              The
      following defined term in Section 14.1 is hereby amended as
      follows:
  "Credit Limit" means
$2,000,000.00, which is intended to be the maximum amount of Advances at any
time outstanding.
  3.           CONSISTENT
CHANGES. The Existing Documents are each hereby amended wherever
necessary to reflect the changes described above.
  4.           PAYMENT OF ADDITIONAL
FACILITY FEE. Borrower shall pay Lender a fee in the amount of $4,375
("Prorated Additional Facility Fee") plus all out-of-pocket
expenses.
  5.           NO DEFENSES
OF BORROWER/GENERAL RELEASE. Borrower agrees that, as of this date, it
has no defenses against the obligations to pay any amounts under the
Indebtedness. Borrower ("Releasing Party") acknowledges that Lender would not
enter into this Business Financing Modification Agreement without Releasing
Party's assurance that it has no claims against Lender or any of Lender's
officers, directors, employees or agents. Except for the obligations arising
hereafter under this Business Financing Modification Agreement, each Releasing
Party releases Lender, and each of Lender's and entity's officers, directors and
employees from any known or unknown claims that Releasing Party now has against
Lender of any nature, including any claims that Releasing Party, its successors,
counsel, and advisors may in the future discover they would have now had if they
had known facts not now known to them, whether founded in contract, in tort or
pursuant to any other theory of liability, including but not limited to any
claims arising out of or related to the Agreement or the transactions
contemplated thereby. Releasing Party waives the provisions of California Civil
Code section 1542, which states:
  "A
general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the
debtor."
  The
provisions, waivers and releases set forth in this section are binding upon each
Releasing Party and its shareholders, agents, employees, assigns and successors
in interest. The provisions, waivers and releases of this section shall inure to
the benefit of Lender and its agents, employees, officers, directors, assigns
and successors in interest. The provisions of this section shall survive payment
infull of
the Obligations, full performance of all the terms of this Business Financing
Modification Agreement and the Agreement, and/or Lender's actions to exercise
any remedy available under the Agreement or otherwise.
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  6.           CONTINUING VALIDITY.
Borrower understands and agrees that in modifying the existing Indebtedness,
Lender is relying upon Borrower's representations, warranties, and agreements,
as set forth in the
Existing Documents. Except as expressly modified pursuant to this Business
Financing Modification Agreement, the terms of the Existing Documents remain
unchanged and in full force and effect. Lender's agreement to modifications to
the existing Indebtedness pursuant to this Business Financing Modification
Agreement in no way shall obligate Lender to make any future modifications to
the Indebtedness. Nothing in this Business Financing Modification Agreement
shall constitute a satisfaction of the Indebtedness. It is the intention of
Lender and Borrower to retain as liable parties all makers and endorsers of
Existing Documents, unless the party is expressly released by Lender in writing.
No maker, endorser, or guarantor will be released by virtue of this Business
Financing Modification Agreement. The terms of this paragraph apply not only to
this Business Financing Modification Agreement, but also to any subsequent
Business Financing modification agreements.
  7.           CONDITIONS.
The effectiveness of this Business Financing Modification Agreement is
conditioned upon payment of the Prorated Additional Facility Fee.
  8.           COUNTERSIGNATURE.
This Business Financing Modification Agreement shall become effective only when
executed by Lender and Borrower.
  BORROWER:
                  LENDER:BALQON
      CORPORATION
                  BRIDGE
      BANK, NATIONAL ASSOCIATIONBy:
      /s/ Balwinder
      Samra
                  By:
      /s/ Sarah
      HendersonName:
      Balwinder Samra
                  Name:
      Sarah HendersonTitle:
      President/CEO
                  Title:
      Vice President
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