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|  | South      CoastAir      Quality Management District | Contract No. 07293Standard |
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| 1.     | PARTIES      - The parties to this Contract are the South Coast Air Quality Management      District (referred to here as “AQMD”) whose address is 21865 Copley Drive,      Diamond Bar, California 91765-4178, and Balqon Corporation (referred to      here as “CONTRACTOR”) whose address is 8 Rosewood, Aliso Viejo, CA      92656. |
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| 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 thisclause.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

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| 4.     | TERM      - The term of this Contract is from the date of execution by both parties      to May 31, 2008, unless further extended by amendment of this Contract in      writing. No work shall commence until this Contract is fully executed by      all parties. |
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| 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 recoverdamages.                                                               |
|   |                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | 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.                                                                                                                                                                                                                                                                                  |
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| 6.     | INSURANCE                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                               |
|   | A.                                                                                                                                                                                                                                                                 | CONTRACTOR      shall furnish evidence to AQMD of workers’ compensation insurance for each      of its employees, in accordance with either California or other states’      applicable statutory requirements prior to commencement of any work on      this Contract.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | B.                                                                                                                                                                                                                                                                 | CONTRACTOR      shall furnish evidence to AQMD of general liability insurance with a limit      of at least $1,000,000 per occurrence, and $2,000,000 in a general      aggregate prior to commencement of any work on this Contract. AQMD shall      be named as an additional insured on any such liability policy, and thirty      (30) days written notice prior to cancellation of any such insurance shall      be given by CONTRACTOR to AQMD.                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | C.                                                                                                                                                                                                                                                                 | CONTRACTOR      shall furnish evidence to AQMD of automobile liability insurance with      limits of at least $100,000 per person and $300,000 per accident for      bodily injuries, and $50,000 in property damage, or $1,000,000 combined      single limit for bodily injury or property damage, prior to commencement      of any work on this Contract. AQMD shall be named as an additional insured      on any such liability policy, and thirty (30) days written notice prior to      cancellation of any such insurance shall be given by CONTRACTOR to      AQMD.                                                                                                                                                                                                         |

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

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

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

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

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

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|   | 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 thisclause. |

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

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

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

----

----

|   |                                |                    |
|--------|-------------------------------------|-------------------------|
| 1      | Running      Chassis/Cabin Assembly | Duration      -120 Days |

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

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

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

----

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

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

----

| 1. | Updates |
|----|---------|

|   |                  |
|--------|-----------------------|
| 2.     | Progress      Reports |

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

----

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

----

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

|   |                           |
|--------|--------------------------------|
| 5.     | Two-Page      Project Synopsis |

|   |                     |
|--------|--------------------------|
| 6.     | Photo      Documentation |

----

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

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| Attachment      3 |
|-------------------|

|                 |                                     |
|----------------------|------------------------------------------|
| AQMD      Contract # | Date      of Publication (as month year) |

----