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|  | South      CoastAir      Quality Management District | Contract      No. 08294 Standard |
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|   |                                                                                                                                                                                                                                                                                                                                                                                          |
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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 1701 East Edinger Avenue, Unit E-3,      Santa Ana, California 92705. |
|   |                                                                                                                                                                                                                                                                                                                                                                                          |
| 2.     | RECITALS                                                                                                                                                                                                                                                                                                                                                                                      |

|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | A.     | AQMD      is the local agency with primary responsibility for regulating stationary      source air pollution in the South Coast Air Basin in the State of      California. AQMD is authorized to enter into this Contract under      California Health and Safety Code Section 40489. AQMD desires to contract      with CONTRACTOR for services described in Attachment 1 - Statement of      Work, attached here and made a part here by this reference. CONTRACTOR      warrants that it is well-qualified and has the experience to provide such      services on the terms set forth here. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | B.     | CONTRACTOR      is authorized to do business in the State of California and attests that      it is in good tax standing with the California Franchise Tax      Board.                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | C.     | All      parties to this Contract have had the opportunity to have this Contract      reviewed by their attorney.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | .      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | D.     | CONTRACTOR      agrees to obtain the required licenses, permits, and all other appropriate      legal authorizations from all applicable federal, state and local      jurisdictions and pay all applicablefees.                                                                                                                                                                                                                                                                                                                                                                                 |

|   |                          |
|--------|-------------------------------|
| 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,      2010, unless further extended by amendment of this Contract in writing. No      work shall commence until this Contract is fully executed by all      parties. |
|   |                                                                                                                                                                                                                                                               |
| 5.     | TERMINATION                                                                                                                                                                                                                                                        |

|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | A.     | In      the event any party fails to comply with any term or condition of this      Contract, or fails to provide services in the manner agreed upon by the      parties, including, but not limited to, the requirements of Attachment 1 -      Statement of Work, this failure shall constitute a breach of this      Contract. The non-breaching party shall notify the breaching party that it      must cure this breach or provide written notification of its intention to      terminate this contract. Notification shall be provided in the manner set      forth in Clause 10. The non-breaching party reserves all rights under law      and equity to enforce this contract and 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.                                                                                                                                                                                                                                                                                  |

|   |      |
|--------|-----------|
| 6.     | INSURANCE |

|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | A.     | CONTRACTOR      shall furnish evidence to AQMD of workers’ compensation insurance for each      of its employees, in accordance with either California or other states’      applicable statutory requirements prior to commencement of any work on      this Contract.                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | B.     | CONTRACTOR      shall furnish evidence to AQMD of general liability insurance with a limit      of at least $1,000,000 per occurrence, and $2,000,000 in a general      aggregate prior to delivery of vehicle included in this Contract. AQMD      shall be named as an additional insured on any such liability policy, and      thirty (30) days written notice prior to cancellation of any such      insurance shall be given by CONTRACTOR to AQMD. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | C.     | CONTRACTOR      shall furnish evidence to AQMD of automobile liability insurance with      limits of at least $100,000 per person and $300,000 per accident for      bodily injuries, and $50,000 in property damage, or $1,000,000 combined      single limit for bodily injury or property damage, prior to commencement      of any work on this Contract.                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | D.     | If      CONTRACTOR fails to maintain the required insurance coverage set forth      above, AQMD reserves the right either to purchase such additional      insurance and to deduct the cost thereof from any payments owed to      CONTRACTOR or terminate this Contract for  breach.                                                                                                                                                                     |

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|   |   |                                                                                                                                                                                                                                                                                                                |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | E.     | All      insurance certificates should be mailed to: AQMD Risk Management, 21865      Copley Drive, Diamond Bar, CA 91765-4178. The AQMD Contract Number must      be included on the face of the      certificate.                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                |
|   | F.     | CONTRACTOR      must provide updates on the insurance coverage throughout the term of the      Contract to ensure that there is no break in coverage during the period of      contract performance. Failure to provide evidence of current coverage      shall be grounds for termination for breach of  Contract. |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 7.     | INDEMNIFICATION      - CONTRACTOR agrees to hold harmless, indemnify, and defend AQMD, its      officers, employees, agents, representatives, and successors-in-interest      against any and all loss, damage, cost, or expenses which AQMD, its      officers, employees, agents, representatives, and successors-in-interest      may incur or be required to pay by reason of any injury or property damage      caused or incurred by CONTRACTOR, its employees, subcontractors, or agents      as a result of the performance of this Contract. |
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| 8.     | PAYMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | A.     | AQMD      shall pay CONTRACTOR a not-to-exceed fixed price amount of Three Hundred      Thousand Dollars ($300,000) for work performed under this Contract in      accordance with Attachment 2 - Payment Schedule, attached here and      included here by reference. Payment shall be made by AQMD to CONTRACTOR      within thirty (30) days after approval by AQMD of an invoice prepared and      furnished by CONTRACTOR showing services performed and referencing tasks      and deliverables as shown in Attachment 1 - Statement of Work, and the      amount of charge claimed. Each invoice must be prepared in duplicate, on      company letterhead, and list AQMD’s Contract number, period covered by      invoice, and CONTRACTOR’S social security number or Employer      Identification Number and submitted to: South Coast Air Quality Management      District, Attn: Naveen Berry. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | B.     | AQMD      reserves the right to disallow charges when the invoiced services are not      performed satisfactorily in AQMD sole judgment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | C.     | Upon      AQMD Governing Board approval, CONTRACTOR shall have first right of      refusal to purchase the Electric Yard Hostler at fair market value through      the AQMD surplused equipmentprocess.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 9.     | RIGHT TO      PUBLISH REPORT AND DOCUMENTS- Title and full ownership      rights to any documents or reports developed under this Contract, as      contained in Task 3 of the Statement of Work, shall at all times remain      with AQMD.                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Rights      of Technical Data - AQMD shall have the unlimited right to use technical      data, including material designated as a trade secret, resulting from the      performance of services by CONTRACTOR under this Contract. AQMD agrees to      not disseminate proprietary technical data outside the AQMD without      CONTRACTOR’S written consent. CONTRACTOR shall have the right to use      technical data for its own benefit. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   | B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Copyright      - CONTRACTOR agrees to grant AQMD a royalty-free, nonexclusive,      irrevocable license to produce, translate, publish, use, and dispose of      all copyrightable material. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
| 10.    | NOTICES - Any      notices from either party to the other shall be given in writing to the      attention of the persons listed below, or to other such addresses or      addressees as may hereafter be designated in writing for notices by either      party to the other. Notice shall be given by certified, express, or      registered mail, return receipt requested, and shall be effective as of      the date of receipt indicated on the return receipt  card. |

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|   |        |                                                                                                                          |
|--------|-------------|-------------------------------------------------------------------------------------------------------------------------------|
|   | AQMD:       | South      Coast Air Quality Management District21865      Copley DriveDiamond      Bar, CA 91765-4178Attn:      Naveen Berry |
|   |        |                                                                                                                          |
|   | CONTRACTOR: | Balqon      Corporation1701      East Edinger Avenue, Unit E-3Santa      Ana, California 92705Attn:      B. Samra             |

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|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 11.    | EMPLOYEES OF      CONTRACTOR                                                                                                                                                                                     |
|   |                                                                                                                                                                                                             |
|   | A.                                                                                                                                                                                                               | CONTRACTOR,      its officers, employees, agents, representatives or subcontractors shall      in no sense be considered employees or agents of AQMD, nor shall      CONTRACTOR, its officers, employees, agents, representatives or      subcontractors be entitled to or eligible to participate in any benefits,      privileges, or plans, given or extended by AQMD to its      employees. |
|   |                                                                                                                                                                                                             |   |
|   | B.                                                                                                                                                                                                               | AQMD      requires CONTRACTOR to be in compliance with all state and federal laws      and regulations with respect to CONTRACTOR’S employees throughout the term      of this Contract, including state minimum wage laws and OSHA      requirements. |
|   |                                                                                                                                                                                                             |   |
| 12.    | CONFIDENTIALITY      - It is expressly understood and agreed that AQMD may designate in a      conspicuous manner the information which CONTRACTOR obtains from AQMD as      confidential. CONTRACTOR agrees to: |
|   |                                                                                                                                                                                                             |   |
| .      | A                                                                                                                                                                                                                | Observe      complete confidentiality with respect to such information, including      without limitation, agreeing not to disclose or otherwise permit access to      such information by any other person or entity in any manner whatsoever,      except that such disclosure or access shall be permitted to employees or      subcontractors of CONTRACTOR requiring access in fulfillment of the      services provided under this Contract. |
|   |                                                                                                                                                                                                             |   |
|   | B.                                                                                                                                                                                                               | Ensure      that CONTRACTOR’S officers, employees, agents, representatives, and      independent contractors are informed of the confidential nature of such      information and to assure by agreement or otherwise that they are      prohibited from copying or revealing, for any purpose whatsoever, the      contents of such information or any part thereof, or from taking any      action otherwise prohibited under this clause. |
|   |                                                                                                                                                                                                             |   |
|   | C.                                                                                                                                                                                                               | Not      use such information or any part thereof in the performance of services to      others or for the benefit of others in any form whatsoever whether      gratuitously or for valuable consideration, except as permitted under this      Contract. |
|   |                                                                                                                                                                                                             |   |
|   | D.                                                                                                                                                                                                               | Notify      AQMD promptly and in writing of the circumstances surrounding any      possession, use, or knowledge of such information or any part thereof by      any person or entity other than those authorized by this      clause. |
|   |                                                                                                                                                                                                             |   |
|   | E.                                                                                                                                                                                                               | Take      at CONTRACTOR expense, but at AQMD’s option and in any event under AQMD’s      control, any legal action necessary to prevent unauthorized use of such      information by any third party or entity which has gained access to such      information at least in part due to the fault of    CONTRACTOR. |

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

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

|   | C.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | CONTRACTOR      shall Inform its officers, employees, and subcontractors involved in the      performance of this Contract of the restrictions contained herein and      require compliance with the above. |
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                        |   |
| 14.    | NON-DISCRIMINATION      - In the performance of this Contract, CONTRACTOR shall not discriminate      in recruiting, hiring, promotion, demotion, or termination practices on      the basis of race, religious creed, color, national origin, ancestry, sex,      age, or physical or mental disability and shall comply with the provisions      of the California Fair Employment & Housing Act (Government Code      Section 12900 et seq.), the Federal Civil Rights Act of 1964 (P.L. 88-352)      and all amendments thereto, Executive Order No. 11246 (30 Federal Register      12319), and all administrative rules and regulations issued pursuant to      said Acts and Order. CONTRACTOR shall likewise require each subcontractor      to comply with this clause and shall include in each such subcontract      language similar to this clause. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                        |   |
| 15.    | SOLICITATION OF      EMPLOYEES - CONTRACTOR expressly agrees that CONTRACTOR shall      not, during the term of this Contract, nor for a period of six months      after termination, solicit for employment, whether as an employee or      independent contractor, any person who is or has been employed by AQMD      during the term of this Contract without the consent of    AQMD.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
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| 16.    | PROPERTY AND      SECURITY - Without limiting CONTRACTOR obligations with regard to      security, CONTRACTOR shall comply with all the rules and regulations      established by AQMD for access to and activity in and around AQMD      premises.                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 17.    | ASSIGNMENT -      The lights granted hereby may not be assigned, sold, licensed, or      otherwise transferred by either party without the prior written consent of      the other, and any attempt by either party to do so shall be void upon      inception.                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 18.    | NON-EFFECT OF      WAIVER - The failure of CONTRACTOR or AQMD to insist upon the      performance of any or all of the terms, covenants, or conditions of this      Contract, or failure to exercise any rights or remedies hereunder, shall      not be construed as a waiver or relinquishment of the future performance      of any such terms, covenants, or conditions, or of the future exercise of      such rights or remedies, unless otherwise provided for    herein.                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 19.    | ATTORNEYS’ FEES      - In the event any action is filed in connection with the enforcement or      interpretation of this Contract, each party shall bear its own attorneys’      fees and costs.                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 20.    | FORCE MAJEURE -      Neither AQMD nor CONTRACTOR shall be liable or deemed to be in default for      any delay or failure in performance under this Contract or interruption of      services resulting, directly or indirectly, from acts of God, civil or      military authority, acts of public enemy, war, strikes, labor disputes,      shortages of suitable parts, materials, labor or transportation, or any      similar cause beyond the reasonable control of AQMD or      CONTRACTOR. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 21.    | SEVERABILITY -      In the event that any one or more of the provisions contained in this      Contract shall for any reason be held to be unenforceable in any respect      by a court of competent jurisdiction, such holding shall not affect any      other provisions of this Contract, and the Contract shall then be      construed as if such unenforceable provisions are not a part      hereof.                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 22.    | HEADINGS -      Headings on the clauses of this Contract are for convenience and reference      only, and the words contained therein shall in no way be held to explain,      modify, amplify, or aid in the interpretation, construction, or meaning of      the provisions of this Contract.                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 23.    | DUPLICATE      EXECUTION - This Contract is executed in duplicate. Each signed      copy shall have the force and effect of an original.                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 24.    | GOVERNING      LAW - This Contract shall be construed and interpreted and the      legal relations created thereby shall be determined in accordance with the      laws of the State of California. Venue for resolution of any disputes      under this Contract shall be Los Angeles County,    California.                                                                                                                                                                                 |
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| 25.    | ROYALTY    FEE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | In      partial consideration of AQMD’s issuance of this Contract, and its      inducement for future sales of Yard Hostlers and Electric Trucks (defined      as United States Department of Transportation Class 8 heavy duty trucks      with Gross Vehicle Weights equal to or greater than 33,000 pounds) for      general commercial sates and use (“Electric Vehicles”), following the      effective date of this Contract, CONTRACTOR (which for purposes of this      Paragraph 25 shall include any successor by sale or merger to CONTRACTOR      and any assignee or licensee of its technology for Electric Vehicles)      shall pay to AQMD a royalty fee of One Thousand Dollars ($1,000) per      Electric Vehicle sold or leased by CONTRACTOR (“Royalty Fee”) to a      purchaser or lessee other than the AQMD and the City of Los Angeles.      Within sixty (60) days after the end of each 12 month period from the date      of execution of this CONTRACT, CONTRACTOR shall submit to AQMD a written      statement identifying each sale or lease of an Electric Vehicle during the      previous calendar year, the purchaser/lessee and status of payment or      lease. For purposes of this clause, “sale” shall mean an agreement to      purchase with or without payment being made therefore and “lease” shall      mean an agreement to lease with or without payment being made therefore.      AQMD may audit such written statements upon ten (10) days’ written notice      to CONTRACTOR. |

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|   |                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|-----------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | B.                                | The      amount of the Royalty Fee shall, at the end of each five (5) year period      after CONTRACTOR’S delivery of the Electric Trucks possessing      specifications and features in accordance with Attachment 1 - Statement of      Work and approved in writing by AQMD (the “First Production Date”), be      adjusted up or down based on the inflation or deflation rate for that      five-year period, as measured by the change in the Producer Price Index      during that five-year period. The Producer Price Index shall mean and      refer to that table in the Producer Price Index published by the United      States Department of Labor, Bureau of Labor Statistics (Index 2007 = 100).      If such index is discontinued, then any successor Producer Price Index of      the United States Bureau of Labor Statistics, or successor agency thereto,      shall be used, and if there is no successor Producer Price Index, the      parties shall designate a substitute index or formula. In addition, AQMD      agrees to meet and confer with CONTRACTOR at the end of each such      five-year period regarding whether downward adjustments to the Royalty Fee      are warranted in light of circumstances at the time if the Royalty Fee is      at a level that makes the sale of Electric Vehicles or the license of      electric vehicle technology by CONTRACTOR not commercially      feasible. |
|   |                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | C.                                | CONTRACTOR      shall use its best efforts to market Electric Vehicles itself or through      third parties retained by or on its behalf or to make the technology      available through licensees through the end of the aforementioned royalty      period. It is the intent of the AQMD and CONTRACTOR that commercially      feasible Electric Vehicles be available for use in Southern      California.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | D.                                | This      Agreement is intended to be interpreted in a commercially reasonable way      so as to (i) enhance the availability of commercially feasible Electric      Vehicles in Southern California, (ii) facilitate profitable business      opportunities for CONTRACTOR, and (iii) continue royalty income to      AQMD.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | E.                                | AQMD      and CONTRACTOR expressly agree that this clause and the rights and      obligations comprising such provision, including but not limited to      CONTRACTOR’s obligations to pay Royalty Fees to AQMD, including Paragraph      25B, above, shall survive the expiration of this Agreement and that      CONTRACTOR shall have a continuing obligation to pay such Royalty      Fees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 26.    | CITIZENSHIP AND ALIEN      STATUS |
|   |                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | A.                                | CONTRACTOR      warrants that it fully complies with all laws regarding the employment of      aliens and others, and that its employees performing services hereunder      meet the citizenship or alien status requirements contained in federal and      state statutes and regulations including, but not limited to, the      immigration Reform and Control Act of 1986 (P.L. 99-603). CONTRACTOR shall      obtain from all covered employees performing services hereunder all      verification and other documentation of employees’ eligibility status      required by federal statutes and regulations as they currently exist and      as they may be hereafter amended. CONTRACTOR shall have a continuing      obligation to verify and document the continuing employment authorization      and authorized alien status of employees performing services under this      Contract to insure continued compliance with all federal statutes and      regulations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Notwithstanding      paragraph A above, CONTRACTOR, in the performance of this Contract, shall      not discriminate against any person in violation of 8 USC Section      1324b.                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | C.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | CONTRACTOR      shall retain such documentation for all covered employees for the period      described by law. CONTRACTOR shall indemnify, defend, and hold harmless      AQMD, its officers and employees from employer sanctions and other      liability which may be assessed against CONTRACTOR or AQMD, or both in      connection with any alleged violation of federal statutes or regulations      pertaining to the eligibility for employment of persons performing      services under this Contract.                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 27.    | APPROVAL OF      SUBCONTRACT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | If      CONTRACTOR intends to subcontract a portion of the work under this      Contract, written approval of the terms of the proposed subcontract(s)      shall be obtained from AQMD’s Executive Officer or designee prior to      execution of the subcontract. No subcontract charges will be reimbursed      unless such approval has been obtained.                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Any      material changes to the subcontract(s) that affect the scope of work,      deliverable schedule, and/or cost schedule shall also require the written      approval of the Executive Officer or designee prior to      execution.                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | C.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | The      sole purpose of AQMD’s review is to insure that AQMD’s contract rights      have not been diminished in the subcontractor agreement. AQMD shall not      supervise, direct, or have control over, or be responsible for,      subcontractor’s means, methods, techniques, work  sequences or      procedures or for the safety precautions and programs incident thereto, or      for any failure of subcontractor to comply with any local, state, or      federal laws, or rules or regulations. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 28.    | ENTIRE CONTRACT - This Contract represents      the entire agreement between the parties hereto related to CONTRACTOR      providing services to AQMD and there are no understandings,      representations, or warranties of any kind except as expressly set forth      herein. No waiver, alteration, or modification of any of the provisions      herein shall be binding on any party unless in writing and signed by the      party against whom enforcement of such waiver, alteration, or modification      is sought. |

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|                                             |                                                 |                    |   |                 |
|--------------------------------------------------|------------------------------------------------------|-------------------------|--------|----------------------|
| SOUTH      COAST AIR QUALITY MANAGEMENT DISTRICT |                                                 | BALQON      CORPORATION |
|                                             |                                                 |                    |   |
| By:                                              |                                                      |                    | By:    |                      |
|                                             |                                                 |                    | Name:  | BALWINDER      SAHRA |
|                                             | Dr.      William A. Burke, Chairman, Governing Board |                    | Title: | PRESIDENT/CEO        |
|                                             |                                                 |                    |   |                 |
| Date:                                            | 5/15/08                                              |                    | Date:  | MAY      14TH, 2008  |
|                                             |                                                 |                    |   |                 |
| ATTEST:                                          |                                                 |                    |   |
| Saundra      McDaniel, Clerk of the Board        |                                                 |                    |   |
|                                             |                                                 |                    |   |                 |
| By:                                              |                                                      |                    |   |                 |
|                                             |                                                 |                    |   |                 |
| APPROVED      AS TO FORM:                        |                                                 |                    |   |
| Kurt      R. Wiese, District Counsel             |                                                 |                    |   |
|                                             |                                                 |                    |   |                 |
| By:                                              |                                                      |                    |   |                 |
|                                             |                                                 |                    |   |                 |
| //      Standard Boilerplate                     |                                                 |                    |   |
| Last      Updated: 5 September 2006              |                                                 |                    |   |

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|   |                                                                                                                                                    |                   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|
| 1.     | Delivery      of a Completed Electric Yard Hostler                                                                                                      | Duration      180 Days |
|   |                                                                                                                                                    |                   |
|   | CONTRACTOR      will provide a fully operation yard hostler, known as Balqon’s Nautilus      E-20 Model, which has the following  specifications: |

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| Max      Speed      | 30      Miles                                                                                                                                                                   |   |                                                                                                                     |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------|
| Turning      Radius | 21      Feet                                                                                                                                                                    |   |                                                                                                                     |
| Braking             | Air      Brakes                                                                                                                                                                 |   |                                                                                                                     |
| Gradeability        | 10%      No Load                                                                                                                                                                |   |                                                                                                                     |
| Tow      Capacity   | 60,000      lbs                                                                                                                                                                 |   |                                                                                                                     |
| Range               | 30      miles between charges                                                                                                                                                   |   |                                                                                                                     |
| Battery             | Lead      Acid - Deep Cycle traction; 140 Kwhr                                                                                                                                  |   | 5      Year Warranty; Forced Air Cooling; Single Point Battery Watering System;      Additional Replacement Battery Pack |
| Charger             | Off      Board - 80 KW; 4 Port; Max Port Output-100 amps                                                                                                                        |   | Includes      Power Station Stand and Charging Cables                                                                    |
| Charge      Time    | 6-8      Hours                                                                                                                                                                  |   | 1      Hour Fast Charge - 60% Capacity                                                                                   |
| Controller          | 240      KW AC Traction; 230 VAC output; 336 VDC Input                                                                                                                          |   | Liquid      Cooled; Remote Data Acquisition                                                                              |
| Motor               | 230      VAC; 100 hp continuous duty traction                                                                                                                                   |   |                                                                                                                     |
| Drive      Assembly | Dual      Planetary Reduction; 70,000 lbs terminal rating; Split Brake Automatic, 4      speed, electronically controlled heavy duty transmission couple to      electric motor |   | Dual      Rear Wheel; 275/70R22.5 LRJTires                                                                               |

|   | The      vehicle shall have a 2 year warranty on the vehicle and accessories, and a      5 year prorated warranty on the batteries, including the replacement      battery. Upon receipt of a fully operation yard hostler, AQMD will take      title and ownership of the yard hostler. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                     |
| 2.     | Maintenance      & Charger Installation                                                                                                                                                                                                                                              | Duration      24 months |

|   |                               |
|--------|------------------------------------|
| 3.     | Data      Collection and Reporting |

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|   |    |
|--------|---------|
| 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 yard hostler in operation and any      results that can be better transmitted  photographically.                                                |

| 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 thefollowing:                                                                                                                                        |

|   | • | Discussion      of actions completed            |
|--------|---------|-------------------------------------------------|
|   | • | Discussion      of risks and corrective actions |
|   | • | Task      Performance                           |

|   | g)     | Problems      - A discussion of significant problems encountered during the contract and      how they were resolved. If a problem is not resolved within 30 days and      the converted vehicle is removed, a detailed explanation of issues and      their subsequent resolution shall be included in the reports. If a problem      was not resolved, the report shall contain an explanation of the      technology’s shortcomings and the specific needs for technology      advancement. Furthermore, CONTRACTOR shall specifically discuss the      condition of the batteries, and overall utility of the vehicle by terminal      operators. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | h)     | Results      - A discussion of the expected project results versus what was actually      achieved.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | i)     | Costs      - A comparison and discussion of expected versus actual AQMD contract      costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | j)     | Copies      of news releases, media and technical articles on the    project.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | k)     | Discussion      of commercial feasibility of the technology including a (quantitative)      cost comparison of the proposed technology with competing technologies.      Key cost elements need to be identified                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | l)     | Recommendations,      including design and engineering requirements for the yard hostler to be      further optimized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

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| 4. | Final      Report |
|----|-------------------|

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

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

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|   | TASK                                          | ScheduledCompletion      Date(From      ContractExecution) |   | AQMD($) |
|--------|-----------------------------------------------|------------------------------------------------------------|--------|---------|
| 0.0    | Contract      Execution                       | 0                                                          |   |    |
| 1.0    | Deliver                                       | 180      Days                                              |   | 280,000 |
|   | -      Fully Operational Yard Hostler         |                                                       |   |    |
|   | -      Replacement Battery Pack               |                                                       |   |    |
|   | -      Fast Charger                           |                                                       |   |    |
| 2.0    | Maintenance      & Charger Installations  | 24      Months                                             |   | 15,000  |
| 3.0    | Data      Collection and Reporting, including |                                                       |   | 5,000   |
|   | -      Draft Final Report                     | 22      Months                                             |   |    |
|   | -      Final Report                           | 24      Months                                             |   |    |
|   | -      2-Page Project Synopsis                | 24      Months                                             |   |    |
|   | TOTAL                                         |                                                       | $      | 300,000 |

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

| AQMD      Contract # | Date      of Publication (as monthyear) |
|----------------------|-----------------------------------------|

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