EXHIBIT
10.20
   EXECUTIVE
EMPLOYMENT AGREEMENT
 
  THIS
EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) dated effective
as of October 24, 2008 (“Effective Date”), is made and
entered into by and between BALQON CORPORATION, a Nevadacorporation (“Employer”), and ROBERT
GRUENWALD (“Executive”).
  R E C I T A L
S
  Employer
desires that Executive enter into an employment relationship with Employer in
order to provide the necessary leadership and senior management skills that are
important to the success of Employer. Employer believes that obtaining
Executive’s services as an employee of Employer and the benefits of his business
experience are of material importance to Employer and Employer’s
stockholders.
  NOW,
THEREFORE, in consideration of Executive’s employment by Employer and the mutual
promises and covenants contained herein, the receipt and sufficiency of which is
hereby acknowledged, Employer and Executive intend by this Agreement to specify
the terms and conditions of Executive’s employment relationship with
Employer.
  1.           General
Duties of Employer and Executive.
  (a)               Employer
agrees to employ Executive and Executive agrees to accept employment by Employer
and to serve Employer in an executive capacity upon the terms and conditions set
forth herein. Employer hereby employs Executive as Vice President Research and
Development as of the Effective Date, reporting to the President of Employer
(the “President”).  Executive’s
duties and responsibilities shall be those normally assumed by the Vice
President Research and Development of a publicly-owned company similarly
situated to Employer, as well as such other or additional duties, as may from
time-to-time be assigned to Executive by the President. Such other or additional
duties shall be consistent with the senior executive functions set forth
above.
  (b)               While
employed hereunder, Executive shall use his best efforts to obey the lawful
directions of the Board of Directors of Employer (the “Board”). Executive shall also
use his best efforts to promote the interests of Employer and to maintain and to
promote the reputation of Employer. While employed hereunder, Executive shall
devote his full business time, efforts, skills and attention to the affairs of
Employer and faithfully perform his duties and responsibilities
hereunder.
  (c)               While
this Agreement is in effect, Executive may from time to time engage in any
activities that do not compete directly with Employer, provided that such
activities do not interfere with his performance of his duties. Executive shall
be permitted to (i) invest his personal assets as a passive investor in such
form or manner as Executive may choose in his discretion, (ii) participate in
various charitable efforts, and (iii) serve as a member of the Board of
Directors of other corporations which are not competitors of
Employer.
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  2.               Compensation and
Benefits.
  (a)               As
compensation for his services to Employer, Employer shall pay to Executive an
annual base salary of $150,000, payable in equal semimonthly payments in
accordance with Employer’s regular payroll policy for salaried employees (the
“Salary”). The
Compensation Committee of the Board (the “Compensation Committee”)
shall perform an annual review of Executive’s Salary based on a review of
Executive’s performance of his duties and Employer’s other compensation
policies. The Compensation Committee may, at its sole discretion, increase (but
not decrease) the Salary at any time, and from time to time; provided, however, that
commencing on the second anniversary of the Effective Date, Executive’s annual
base salary shall be increased to $175,000 and commencing on the third
anniversary of the the Effective Date, Executive’s annual base salary shall be
increased to $200,000.
  (b)               In
addition to the foregoing Salary, Executive shall be eligible for an annual
incentive bonus (“Incentive
Bonus”) commencing in 2010 with respect to fiscal 2009, based on criteria
determined by the Compensation Committee, at its sole discretion.  The
Incentive Bonus, if any, shall be payable in cash, following the date on which
Employer’s Form 10-K for the previous fiscal year is filed with the Securities
and Exchange Commission, but in no event later than the Short Term Deferral Date
as defined in Section 3(a).
  (c)               Upon
Executive’s furnishing to Employer customary and reasonable documentary support
(such as receipts or paid bills) evidencing costs and expenses incurred by him
in the performance of his services and duties hereunder (including, without
limitation, travel and entertainment, cellular telephone, computer and other
home office expenses) and containing sufficient information to establish the
amount, date, place and essential character of the expenditure, Executive shall
be reimbursed for such costs and expenses in accordance with Employer’s normal
expense reimbursement policy.
  (d)               Executive
shall be entitled to participate in the medical (including hospitalization),
dental, life and disability insurance plans, to the extent offered by Employer,
and in amounts consistent with Employer’s policy for other senior executive
officers of Employer, with premiums for all such insurance for Executive and his
dependents to be paid by Employer, subject to customary employee
contributions.
  (e)               Executive
shall have the right to participate in any additional compensation, benefit,
bonus, pension, stock option, stock purchase, 401(k) or other plan or
arrangement of Employer now or hereafter existing for the benefit of other
senior executive officers of Employer, to the extent offered by Employer, and in
amounts consistent with the Employer’s policy.
  (f)               Executive
shall be entitled to vacation (but in no event less than four (4) weeks per
year), holiday and other paid or unpaid leaves of absence consistent with
Employer’s normal policies for other senior executive officers of Employer or as
otherwise approved by the Board.  Executive shall be entitled to
accrue vacation time for one (1) year.
  2
  If
Executive does not take the accrued vacation during the following year, he shall
be paid for the unused vacation at his Salary rate then in effect.
  (g)               Employer
shall purchase and maintain in effect a directors’ and officers’ liability
insurance policy with a minimum limit of liability of $3,000,000 and shall enter
into an indemnification agreement with Executive upon terms and conditions
mutually acceptable to Employer and Executive.
  3.           Deferred
Compensation.
  (a)               This
Agreement is not intended to provide for any deferral of compensation payable
during Executive’s employment pursuant to Section 409A of the Internal
Revenue Code (the “Code”) and, accordingly, any
compensation paid to Executive pursuant to this Agreement during Executive’s
employment is intended to be paid not later than the later of:  (i)
the fifteenth (15th) day of
the third (3rd) month
following the Executive’s first (1st)
taxable year in which such benefit is no longer subject to a substantial risk of
forfeiture, and (ii) the fifteenth (15th) day of
the third (3rd) month
following the first (1st)
taxable year of Employer in which such benefit is no longer subject to a
substantial risk of forfeiture, as determined in accordance with
Section 409A of the Code and any Treasury Regulations and other guidance
issued thereunder.  The date determined under this subsection is
referred to as the “Short-Term
Deferral Date.”  Notwithstanding anything to the contrary
herein, in the event that any compensation paid pursuant to this Agreement
during Executive’s employment is not actually or constructively received by
Executive on or before the Short-Term Deferral Date, to the extent such
compensation, or any portion thereof, constitutes a deferral of compensation
subject to Code Section 409A, then, subject to Section 3(b),
such benefit shall be paid upon Executive’s separation from service, with
respect to Employer and its affiliates within the meaning of Section 409A
of the Code.
  (b)               In
the event that Executive is a “specified employee,” as defined in
Section 409A(a)(2)(B)(i) of the Code as of the date of any separation from
service with respect to Employer and its affiliates, no payment of deferred
compensation subject to Code Section 409A may be made to Executive before
the date that is six (6) months after the date of separation from service (or,
if earlier, the date of death of the specified employee), and, in such case, any
payments shall be accumulated and paid on the first date of the seventh (7th) month
following separation from service; provided, however, that any
payment or portion thereof which is subject to an exemption for separation pay
to specified employees as provided under Treasury Regulation § 1.409A, or is
subject to any other exemption provided under Treasury Regulation § 1.409A
allowing for payment to a specified employee prior to the date that is six (6)
months after the date of separation from service, may be paid to Executive upon
separation from service.
  4.           Preservation
of Business; Fiduciary Responsibility.  Executive shall use his
best efforts to preserve the business and organization of Employer and to
preserve the business relations of Employer. So long as the Executive is
employed by Employer, Executive shall observe and fulfill proper standards of
fiduciary responsibility attendant upon his service and office.
  3
  5.           No
Specified Term; Employment at Will.  The employment
relationship between Employer and Executive pursuant to this Agreement is not
for any specific term, but may be terminated with or without cause, by Employer
or by Executive, at any time and for any reason, subject to the rights and
obligations of Employer and Executive as set forth in this
Agreement.  Any modification to the nature of the at-will employment
relationship between Employer and Executive must be made in writing, and must be
signed by Executive and by Employer.
  6.           Termination.  Employer
or Executive may terminate Executive’s employment under this Agreement at any
time, but only on the following terms:
  (a)               Employer
may terminate Executive’s employment under this Agreement at any time for “Due Cause” (as defined in
Appendix I
attached hereto and incorporated herein by this reference) upon the good faith
determination by the Board that Due Cause exists for the termination of the
employment relationship.
  (b)               If
Executive is incapacitated by accident, sickness or otherwise so as to render
Executive either:  (i)  unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months; or (ii) by reason
of any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not
less than twelve (12) months is receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan
covering employees of Employer; and such incapacity is confirmed by the U.S.
Social Security Administration or in accordance with a disability insurance
program maintained by Employer, Employer may terminate Executive’s employment
under this Agreement upon giving Executive or his legal representative written
notice at least thirty (30) days prior to the termination date, subject to the
provisions of Section 7(b).   Notwithstanding anything expressed or implied above to
the contrary, Employer will fully comply with its obligations under the
Americans with Disabilities Act as well as any other applicable federal, state,
or local law, regulation, or ordinance governing the protection of qualified
individuals with disabilities as well as Employer’s obligation to provide
reasonable accommodation thereunder.
  (c)               This
Agreement shall terminate immediately upon Executive’s death, subject to the
provisions of Section 7(b).
  (d)               Subject
to the provisions of Section 7(c),
Employer may terminate Executive’s employment under this Agreement at any time
for any reason whatsoever, even without Due Cause, by giving a written notice of
termination to Executive, in which case the employment relationship shall
terminate immediately upon the giving of the notice. If Employer terminates the
employment of Executive other than (i) pursuant to Section 6(a) for
Due Cause, (ii) due to incapacity pursuant to Section 6(b) or
due to Executive’s death pursuant to Section 6(c), or
(iii) Executive’s retirement, then the action by Employer, unless consented to
in writing by Executive, shall be deemed to be a constructive termination by
Employer of Executive’s employment (a “Constructive Termination”),
and, in that event, Executive shall be entitled to receive the compensation set
forth in Section 7(c).
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  (e)               Executive
may terminate this Agreement at any time within ninety (90) days of the
occurrence of any event comprising “Good Reason” (as defined in
Appendix I
attached hereto and incorporated herein by this reference); provided, however, that
Executive provides Employer with written notice of the event or condition
constituting Good Reason within thirty (30) days of the initial existence of
such event or condition, and that Employer shall have a period of thirty (30)
days to cure such event or condition and, in the event that Employer fails to
cure such event or condition, Executive shall be entitled to receive the
compensation set forth in Section 7(c).
  7.           Effect of
Termination.
  (a)               If
the employment relationship is terminated (i) by Employer for Due Cause pursuant
to Section 6(a),
(ii) by Executive breaching this Agreement by refusing to continue his
employment, or (iii) by Executive without Good Reason, then all compensation and
benefits shall cease as of the date of termination, other than: (A) those
benefits that are provided by retirement and benefit plans and programs
specifically adopted and approved by Employer for Executive that are earned and
vested by the date of termination; (B) Executive’s pro rata annual Salary
(as in effect as of the date of termination, payable in the manner as prescribed
in the first sentence of Section 2(a)
through the date of termination);(C) any stock options which have vested as of the date of
termination pursuant to the terms of the agreement granting the options; and
(D) accrued vacation as required by California law.
  (b)               If
Executive’s employment relationship is terminated due to Executive’s incapacity
pursuant to Section 6(b) or
due to Executive’s death pursuant to Section 6(c),
Executive or Executive’s estate or legal representative, shall, subject to Section 3 of
this Agreement, be entitled to (i) those benefits that are provided by
retirement and benefits plans and programs specifically adopted and approved by
Employer for Executive that are earned and vested at the date of termination,
(ii) a prorated Incentive Bonus, payable in the manner as prescribed in the
second sentence of Section 2(b) (to
the extent Executive would otherwise be eligible) for the fiscal year in which
incapacity or death occurs, and (iii) a lump-sum cash payment, payable within
ten (10) business days of separation from service due to death or disability,
but in any event, not later than the Short-Term Deferral Date, in an amount
equal to one (1) year of Executive’s then current annual Salary as set forth in
Section
2(a).
  (c)               In
the event of a termination of this Agreement as a result of Constructive
Termination, or by Executive for Good Reason, then Employer shall, subject to
Section 3
of this Agreement:
  (i)           
pay to Executive on the date of termination his Salary in effect as of the date
of termination through the end of the month during which the termination occurs
plus credit for any vacation earned but not taken;
  (ii)           
pay to Executive on the first business day following the expiration of the
revocation period described in Section 7(d)
(provided Executive has not tendered his revocation), but in any event, not
later than the Short-Term Deferral
  5
  Date, as
severance pay an amount equal to two (2) times Executive’s then current annual
Salary;
  (iii)           pay
to Executive  the prorated Incentive Bonus, to the extent Executive
would otherwise be eligible for any, for the fiscal year during which
termination occurs, payable as provided in Section 2(a);
  (iv)           maintain,
at Employer’s expense, in full force and effect, for Executive’s continued
benefit, all medical insurance to which Executive was entitled immediately prior
to the date of termination until the earliest of (i) eighteen (18) months or
(ii) the date or dates that Executive’s continued participation in Employer’s
medical insurance plan is not possible under the terms of the plans (the
earliest of (i) and (ii) is referred to herein as the “Benefits Date”). If
Employer’s medical insurance plan does not allow Executive’s continued
participation in the plan, then Employer will pay to Executive, in monthly
installments, from the date on which Executive’s participation in the medical
insurance is prohibited until the date that is eighteen (18) months after the
date of termination, an amount equal to the monthly premium or premiums for
COBRA coverage with respect to Executive for the discontinued medical insurance;
and
  (v)           pay
to Executive on the date of termination a lump-sum cash payment equal to
eighteen (18) times the estimated monthly COBRA premiums at the time of
termination (taking into account all known or anticipated premium increases) to
be used by Executive to maintain Executive’s continued medical insurance
coverage for an additional period of eighteen (18) months, pursuant to
Cal-COBRA, following the expiration of the COBRA reimbursement payments set
forth in Section
7(c)(iv).
  (d)               Executive
shall be entitled to the payments and benefits described in subsections 7(c)(ii) and
(iv) only if Executive signs an appropriate separation agreement in a
form acceptable to Employer, which includes a release of all claims against
Employer to the fullest extent permitted by law, such agreement actually enters
into effect following any revocation period required by law, and Executive
complies fully with any continuing obligations under this
Agreement.
  (e)               Executive
shall not be required to mitigate damages or the amount of any payment provided
for under this Agreement by seeking other employment or otherwise, nor shall the
amount of any payment provided for under this Agreement be reduced by any
compensation earned by Executive as the result of employment by another Employer
after the date of termination, or otherwise.
  (f)               Except
as expressly provided herein, the provisions of this Agreement, and any payment
or benefit provided for hereunder, shall not reduce any amounts otherwise
payable, or in any way diminish Executive’s existing rights, or rights which
would accrue solely as a result of the passage of time, under any Employer
Benefit Plan, employment agreement or other contract, plan or
arrangement.
  6
  (g)               The
amount of any payment provided under this Agreement shall not be reduced by
reason of any present value calculation.
  (h)               Upon
termination of this Agreement, compensation and benefits shall be paid to the
Executive as set forth in the applicable subsection of this Section 7 and
stock grants or options granted to Executive, if any, shall be governed by the
provisions of all stock grant or option agreements between Employer and
Executive. In the event of a termination of this Agreement by Executive for Good
Reason, all other rights and benefits Executive may have under the employee
and/or executive benefit plans and arrangements of Employer generally shall be
determined in accordance with the terms and conditions of those plans and
arrangements.
  8.           Covenants
of Confidentiality, Nondisclosure and Noncompetition.
  (a)               During
the term of this Agreement, Employer will provide to Executive certain
confidential and proprietary information owned by Employer as more fully
described below. Executive acknowledges that he occupies or will occupy a
position of trust and confidence with Employer, and that Employer would be
irreparably damaged if Executive were to breach the covenants set forth in this
Section 8(a).  Accordingly,
Executive agrees that he will not, without the prior written consent of
Employer, at any time during the term of this Agreement or any time thereafter,
except as may be required by competent legal authority or as required by
Employer to be disclosed in the course of performing Executive’s duties under
this Agreement for Employer, use or disclose to any person, firm or other legal
entity, any confidential records, secrets or information obtained by Executive
during his employment hereunder related to Employer or any parent, subsidiary or
affiliated person or entity (collectively, “Confidential Information”).
Confidential Information shall include, without limitation, information about
Employer’s Inventions (as defined in Section 9(a)),
customer lists and product pricing, data, know-how, formulae, processes, ideas,
past, current and planned product development, market studies, computer software
and programs, database and network technologies, strategic planning and risk
management. Executive acknowledges and agrees that all Confidential Information
of Employer and/or its affiliates will be received in confidence and as a
fiduciary of Employer. Executive will exercise utmost diligence to protect and
guard the Confidential Information.
  (b)               Executive
agrees that he will not, without the express written consent of the Board, take
with him upon the termination of this Agreement, any document or paper, or any
photocopy or reproduction or duplication thereof, relating to any Confidential
Information.
  (c)               Executive
agrees that he will, upon the termination of his employment, return all
Employer’s property including but not limited to vehicles leased or owned by
Employer, mobile telephone, fuel card, personal computer, all documents, working
papers, information whether stored on computer disc or otherwise, and all other
records relating to Employer and its business.  Executive agrees that
he will confirm in writing that he has complied with this clause, if requested
to do so by Employer, within seven (7) days of receipt of such a
request.
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  (d)               Executive
agrees that, while Executive is employed with Employer, he will not, either
directly or indirectly, have an interest in any business (whether as manager,
operator, licensor, licensee, partner, 5% or greater equity holder, employee,
consultant, director, advisor or otherwise) competitive with Employer or any of
its business activities or solicit individuals or other entities that are
customers or competitors of Employer.  Executive further agrees that,
for a period of twenty-four (24) months after the date of termination of this
Agreement (the “Restricted
Period”), Executive shall not use Employer’s trade secrets, either
directly or indirectly, to compete in any way with the business of Employer and
will not solicit individuals or other entities that are customers or competitors
of Employer during the six-month period immediately prior to the date of
termination of this Agreement, to terminate or change their contracts or
business relations with Employer. Executive also agrees that, for the Restricted
Period, he will not, either directly or indirectly, solicit any employee of
Employer to terminate his employment with Employer.
  (e)               For
purposes of this Section 8, “Employer” shall include any
of its parents, subsidiaries or any other entity in which it holds a 50% or
greater equity interest.
  9.           Inventions.
  (a)               Any
and all inventions, product, discoveries, improvements, processes, formulae,
manufacturing methods or techniques, designs or styles, software applications or
programs (collectively, “Inventions”) made, developed
or created by Executive, alone or in conjunction with others, during regular
hours of work or otherwise, during the term of Executive’s employment with
Employer and for a period of two years thereafter that may be directly or
indirectly related to the business of, or tests being carried out by, Employer,
or any of its parents, subsidiaries, shall be promptly disclosed by Executive to
Employer and shall be Employer’s exclusive property. The following provisions of
the California Labor Code shall supplement this Section 9(a):
  SECTION 2870
OF THE CALIFORNIA LABOR CODE
  Application
of Provisions Providing that Employee Shall Assign or Offer to Assign Rights in
Invention to Employer.
  (a)           Any
provision in an employment agreement which provides that an employee shall
assign, or offer to assign, any of his or her rights in an invention to his or
her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using employer’s equipment, supplies,
facilities, or trade secret information except for those inventions that
either:
  (1)             Relate
at the time of conception or reduction to practice of the invention to
employer’s business, or actual or demonstrably anticipated research or
development of employer; or
  8
  (2)             Result
from any work performed by the employee for employer.
  (b)           To
the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable.
  (b)               Executive
will, upon Employer’s request and without additional compensation, execute any
documents necessary or advisable in the opinion of Employer’s legal counsel to
direct the issuance of patents to Employer with respect to Inventions that are
to be Employer’s exclusive property under this Section 9 or to
vest in Employer title to the Inventions; the expense of securing any patent,
however, shall be borne by Employer.
  (c)               Executive
will hold for Employer’s sole benefit any Invention that is to be Employer’s
exclusive property under this Section 9 for
which no patent is issued.
  10.           No
Violation.  Executive represents that he is not bound by any
Agreement with any former employer or other party that would be violated by
Executive’s employment by Employer.
  11.           Injunctive
Relief.  Executive acknowledges that the breach, or threatened
breach, by Executive of the provisions of this Agreement shall cause irreparable
harm to Employer, which harm cannot be fully redressed by the payment of damages
to Employer. Accordingly, Employer shall be entitled, in addition to any other
right or remedy it may have at law or in equity, to seek an injunction or
restraining Executive from any violation or threatened violation of this
Agreement.
  12.           Dispute
Resolution.  Subject to Section 11, all
claims, disputes and other matters in controversy (“dispute”) arising, directly
or indirectly out of or related to this Agreement, or the breach thereof,
whether contractual or noncontractual, and whether during the term or after the
termination of this Agreement, shall be resolved exclusively according to the
procedures set forth in this Section 12, and
not through resort to any judicial proceedings.
  (a)               Neither
party shall commence an arbitration proceeding pursuant to the provisions of
Section 12(b)
unless that party first gives a written notice (a “Dispute Notice”) to the other
party setting forth the nature of the dispute. The parties shall attempt in good
faith to resolve the dispute by mediation under the American Arbitration
Association Commercial Mediation Rules in effect on the date of the Dispute
Notice. If the parties cannot agree on the selection of a mediator within twenty
(20) days after delivery of the Dispute Notice, the mediator will be selected by
the American Arbitration Association. If the dispute has not been resolved by
mediation within sixty (60) days after delivery of the Dispute Notice, then the
dispute shall be determined by arbitration in accordance with the provisions
below.
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  (b)               Any
dispute that is not settled by mediation as provided in Section 12(a)
shall be resolved by arbitration in Orange County, California, before a single arbitrator
appointed by the American Arbitration Association or its successor. The
determination of the arbitrator shall be final and absolute. The arbitrator
shall be governed by the duly promulgated rules and regulations of the American
Arbitration Association or its successor then in effect, and the pertinent
provisions of the laws of the State of California relating to arbitration. The
decision of the arbitrator may be entered as a final judgment in any court of
the State of California or elsewhere. The prevailing party in any such
arbitration shall also be entitled to recover reasonable attorneys’,
accountants’ and experts’ fees and costs of suit in addition to any other relief
awarded the prevailing party.
  13.           Miscellaneous.
  (a)               If
any provisions contained in this Agreement is for any reason held to be totally
invalid or unenforceable, such provision will be fully severable, and in lieu of
such invalid or unenforceable provision there will be added automatically as
part of this Agreement a provision as similar in terms as may be valid and
enforceable.
  (b)               All
notices and other communications required or permitted hereunder or necessary or
convenience in connection herewith shall be in writing and shall be deemed to
have been given when mailed by registered mail or certified mail, return receipt
requested or hand delivered, as follows (provided that notice of change of
address shall be deemed given only when received):
  If
      to Employer:
              Balqon
      Corporation
 1701
      E. Edinger, Unit E-3
 Santa
      Ana, CA 92705
 Attention:
      Board of Directors
  If
      to Executive:
              Robert
      Gruenwald
 
 or to
such other names or addresses as Employer or Executive, as the case may be,
shall designate by notice to the other party hereto in the manner specified in
this Section 13(b).
  (c)               This
Agreement shall be binding upon and inure to the benefit of Employer, its
successors, legal representatives and assigns, and Executive, his heirs,
executors, administrators, representatives, legatees and permitted assigns.
Executive agrees that his rights and obligations hereunder are personal to him
and may not be assigned without the express written consent of Employer. If
Executive should die while any amounts are due to him pursuant to this
Agreement, all such amounts shall be paid to Executive’s devisee, legatee or
other designee, or if there be no such designee, to Executive’s estate. Employer
will require any successor or assign (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of Employer, by Agreement in form and substance satisfactory to
Executive and his legal counsel, expressly, absolutely and unconditionally to
assume and agree to perform this Agreement in the same manner and to the same
extent that Employer would be required to perform each of them if no such
succession or assignment had taken place. Any failure of Employer
to obtain such agreement prior to the effectiveness of any such succession or
assignment shall be a material breach of this Agreement and shall entitle
Executive to terminate Executive’s employment for Good Reason. As used in this
Agreement, “Employer”
means Balqon Corporation and any successor or assign to its business and/or
assets which executes and delivers the Agreement provided for in this
Section or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law. If at any time during the term of this
Agreement Executive is employed by any company a majority of the voting
securities of which is then owned by Employer, “Employer” as used in this
Agreement shall in addition include that subsidiary company. In that event,
Employer agrees that it shall pay or shall cause the subsidiary company to pay
any amounts owed to Executive pursuant to this Agreement.
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  (d)               This
Agreement replaces and merges all previous agreements and discussions relating
to the same or similar subject matters between Executive and Employer with
respect to the subject matter of this Agreement (other than any option agreement
dated prior to the Effective Date between Executive and Employer), including
without limitation that certain Employment Agreement dated effective as of
September 9, 2008 between Balqon Corporation, a California corporation (“Balqon California”), and
Executive, which Employment Agreement was assumed by Employer upon the closing
of the merger between Employer and Balqon California.This Agreement may not
be modified in any respect by any verbal statement, representation or agreement
made by any employee, officer, or representative of Employer or by any written
agreement unless signed by an officer of Employer who is expressly authorized by
Employer to execute that document.
  (e)               The
laws of the State of California will govern the interpretation, validity and
effect of this Agreement without regard to principles of conflicts of law, the
place of execution or the place for performance thereof.
  (f)               Executive
and Employer shall execute and deliver any and all additional instruments and
agreements that may be necessary or proper to carry out the purposes of this
Agreement.
  (g)               The
descriptive headings of the several sections of this Agreement are inserted for
convenience only and do not constitute a party of this Agreement.
  (h)               This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same Agreement.
  (i)               Executive
acknowledges that Executive has had the opportunity to read this Agreement and
discuss it with advisors and legal counsel, if Executive has so chosen.
Executive also acknowledges the importance of this Agreement and that Employer
is relying on this Agreement in entering into an employment relationship with
Executive.
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  The
undersigned, intending to be legally bound, have executed this Agreement
effective as of the date first written above.
  BALQON
      CORPORATIONDate:
      March 27, 2009
                    By:
                    /s/ Balwinder
      SamraBALWINDER
      SAMRA, Chairman of the Nominating
                      and Corporate Governance Committee
  Date: March 27,
      2009
                          By:
                          /s/
      Robert GruenwaldROBERT
      GRUENWALD
 
 12
  APPENDIX I
  Additional
Definitions
  For
purposes of this Agreement, the following additional capitalized terms shall
have the respective definitions set forth below:
  Benefit
Plan. The term “Benefit
Plan” means any benefit plan or arrangement (including, without
limitation, Employer’s profit sharing or stock option or stock incentive plans,
if any, and medical, disability and life insurance plans) in which Executive is
participating (or any other plans providing Executive with substantially similar
benefits).
  Due
Cause. The term “Due
Cause” means any of the following events:
  (a)           any
intentional misapplication by Executive of Employer’s funds or other material
assets, or any other act of dishonesty injurious to Employer committed by
Executive; or
  (b)           Executive’s
conviction of (i) a felony or (ii) a crime involving moral turpitude;
or
  (c)           Executive’s
use or possession of any controlled substance or chronic abuse of alcoholic
beverages, which use or possession the Board reasonably determines renders
Executive unfit to serve in his capacity as a senior executive of Employer;
or
  (d)           Executive’s
breach, nonperformance or nonobservance of any of the terms of this Agreement,
including but not limited to Executive’s failure to adequately perform his
duties or comply with the reasonable directions of the Board.
  Notwithstanding
anything in the foregoing subsections (c) or (d) to the contrary, Employer shall
not terminate Executive under subsections (c) or (d) unless the Board first
provides Executive with a written memorandum describing in detail how his
performance hereunder is not satisfactory and Executive is given a reasonable
period of time (not less than thirty (30) days) to remedy the unsatisfactory
performance related by the Board to Executive in that memorandum. A
determination of whether Executive has satisfactorily remedied the
unsatisfactory performance shall be promptly made by a majority of the
disinterested directors of the Board at the end of the period provided to
Executive for remedy and their determination shall be final.
  Good
Reason. The term “Good
Reason” as used in this Agreement shall mean any of the following which
occur without Executive’s written consent and provided that
Executive notifies Employer’s Boardin writing of the event
or condition constituting “Good Reason” within thirty (30) days of the initial
existence of such event or condition, that Executive intends to terminate his
employment for such Good Reason, specifying the Good Reason, and Employer fails
to remedy the specified event or condition within thirty (30) days after receipt
of such notice:
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  (a)           the
material diminution in Executive’s authority, duties, or responsibilities; a
material diminution in Executive’s titles or offices; any removal of Executive
from or any failure to reelect Executive to any of his positions as an officer,
except in connection with the termination of his employment for disability;
Retirement; Executive’s death; or by Executive other than for Good
Reason;
  (b)           a
purported reduction by Employer in Executive’s base salary amounting to a
material diminution in such salary to an amount less than the greater of (i) the
base salary as in effect on the date hereof or (ii) 10% below the base salary in
effect at the time of the purported reduction; or
  (c)           a
failure by Employer to comply with any material provision resulting in a
material breach by Employer of this Agreement which has not been cured within 30
days after notice of noncompliance has been given by Executive to Employer, or
if the failure is not capable of being cured in that time, a cure shall not have
been diligently initiated by Employer within the 30 day period;
  provided, however, that any of
the foregoing actions shall not be considered to be Good Reason if the action is
undertaken by Employer as a termination for Due Cause.
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