Document:

ex_10-21.htm

    
      

      

    

    EXHIBIT
10.21

     

     

    STOCK
AND WARRANT PURCHASE AGREEMENT

     

    THIS
STOCK AND WARRANT PURCHASE AGREEMENT (this “Agreement”) is made on the 28th day
of August, 2008, by and among BALQON CORPORATION, a California corporation (the
“Company”), and MARLIN FINANCIAL GROUP, INC. (the “Investor”).

     

    THE
PARTIES HEREBY AGREE AS FOLLOWS:

     

    1. Purchase and Sale of Stock
and Warrants

     

    1.1 Sale and Issuance of Stock
and Warrants

     

    (a)
Subject to the terms and conditions of this Agreement, the Investor agrees to
purchase at the Closing, and the Company agrees to sell and issue to the
Investor at the Closing, Two Million Nine Hundred Sixteen Thousand Seven Hundred
Twenty-Five (2,916,725) shares (the “Issue Shares”) of the no par value common
stock of the Company (the “Common Stock”).

     

    (b)
Subject to the terms and conditions of this Agreement, the Investor agrees to
purchase at the Closing, and the Company agrees to sell and issue to the
Investor at the Closing, warrants to purchase up to Seven Hundred Twenty-Nine
Thousand One Hundred Eighty (729,180) shares of the Common Stock (the
“Warrants;” collectively with the Issue Shares and the Warrant Shares, as
defined in section 1.3 of the Agreement, the “Shares”) on the terms and
conditions set forth in this Agreement.

     

    (c) As
consideration for the Issue Shares and the Warrants, and in exchange therefor,
(i) Investor has, pursuant to an oral agreement, provided valuable services to
the Company the monetary value of which the board of directors of the Company
has determined to be Fifty-Five Thousand and No/100 Dollars ($55,000.00) (the
“Services Purchase Price”); and (ii) Investor shall pay to the Company Eight
Hundred Seventy-Five and No/100 Dollars ($875.00) (the “Cash Purchase Price;”
collectively with the Services Purchase Price, the “Purchase Price”). The total
aggregate value of the Purchase Price shall be Fifty-Five Thousand Eight Hundred
Seventy-Five and No/100 Dollars ($55,875.00).

     

    (d) The
parties acknowledge that the appraised value of the Shares is approximately
$42,438.00 and Investor agrees that upon receipt of the Shares, Investor shall
be paid in full for the services rendered to the Company and referenced in
section 1(c) above, and Investor shall have no further claim for any additional
payment therefor.

     

    
      
        
        

      

      
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    1.2 Closing. The purchase
and sale of the Issue Shares and the Warrants shall take place at the offices of
the Company at 11:00 A.M., on August__, 2008, or at such other time and place as
the Company and the Investor mutually agree upon orally or in writing (which
time and place are designated as the “Closing”). At the Closing, the Company
shall deliver to Investor a duly executed stock certificate representing the
Issue Shares and the duly executed Warrants and Investor shall deliver to the
Company the Cash Purchase Price and all other documents and materials required
pursuant to this Agreement. Notwithstanding any other provision of this
Agreement to the contrary, in no event shall the Company be required to issue
any Issue Shares or Warrants to Investor unless and until all payments and other
documents and materials required to be delivered by Investor have been received
by the Company and all conditions of this Agreement have been
fulfilled.

     

    1.3 Warrants and Warrant
Shares. Investor may exercise its right to purchase shares of the Common
Stock, pursuant to the Warrants, on the terms and conditions set forth in this
section (the “Warrant Shares”).

     

    (a) No
later than one (1) year after the date of registration with the SEC of any
shares of the Common Stock of the Company for sale or resale to the public
(“First Termination Date”), Investor may elect to purchase, whereupon the
Company shall issue, pursuant to the terms and conditions of this Agreement, up
to Two Hundred Forty-Three Thousand Sixty (243,060) Warrant Shares at an
exercise price of One and 50/100 Dollars ($1.50) per share (“First Exercise
Price”). Investor’s right to purchase any Warrant Shares pursuant to this
subsection shall expire at 5:00 P.M. Pacific Time on the First Termination
Date.

     

    (b) No
later than two (2) years after the date of such registration of any shares of
the Common Stock of the Company (“Second Termination Date”), Investor may elect
to purchase, whereupon the Company shall issue, pursuant to the terms and
conditions of this Agreement, up to Two Hundred Forty-Three Thousand Sixty
(243,060) Warrant Shares at an exercise price of Two and No/100 Dollars ($2.00)
per share (“Second Exercise Price”). Investor’s right to purchase any Warrant
Shares pursuant to this subsection shall expire at 5:00 P.M. Pacific Time on the
Second Termination Date.

     

    (c) No
later than three (3) years after the date of such registration of any shares of
the Common Stock of the Company (“Third Termination Date;” collectively with the
First Termination Date and the Second Termination Date, the “Termination
Dates”), Investor may elect to purchase, whereupon the Company shall issue,
pursuant to the terms and conditions of this Agreement, up to Two Hundred
Forty-Three Thousand Sixty (243,060) Warrant Shares at an exercise price of Two
and 50/100 Dollars ($2.50) per share (“Third Exercise Price;” collectively with
the First Exercise Price and the Second Exercise Price, the “Exercise Price”).
Investor’s right to purchase any Warrant Shares pursuant to this subsection
shall expire at 5:00 P.M. Pacific Time on the Third Termination
Date.

     

    (d)
Notwithstanding any other provision of this Agreement to the contrary, in no
event shall Investor be permitted to purchase any Warrant Shares later than the
date which is ten (10) years after the date of this Agreement, nor shall any
Warrant be sold, transferred, assigned, hypothecated, pledged, or in any way
alienated (each a “Transfer”) by Investor to any person and all such attempted
or purported Transfers shall be null and void.

     

    
      
        
        

      

      
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    (e) In
order to exercise any right to purchase Warrant Shares, Investor shall deliver
to the Company written and executed notice of Investor’s intent to exercise
Investor’s right to purchase said Warrant Shares (the “Notice”). The Notice
shall specify the number of Warrant Shares which Investor elects to purchase,
the applicable Exercise Price per share, and the total price for all Warrant
Shares which Investor intends to purchase. Unless the Notice is delivered before
5:00 P.M. Pacific Time on the applicable Termination Date, the Notice shall be
null and void.

     

    (f) If
the Notice is timely delivered to the Company, the purchase and sale of the
Warrant Shares shall take place at the offices of the Company at 11:00 A.M., on
the day which is ten (10) business days after the timely delivery of the Notice
to the Company, or at such other time and place as the Company and the Investor
mutually agree upon orally or in writing (each such time and place are
designated as a “Warrant Closing”). At each Warrant Closing, the Company shall
deliver to Investor a duly executed stock certificate representing the Warrant
Shares that Investor is purchasing and Investor shall deliver to the Company the
applicable Exercise Price and all other, documents and materials required
pursuant to this Agreement. Notwithstanding any other provision of this
Agreement to the contrary, in no event shall the Company be required to issue
any Warrant Shares to Investor unless and until (i) such issuance is in
compliance with all applicable federal and state securities laws, and (ii) all
payments and other documents and materials required to be delivered by Investor
have been received by the Company and all conditions of this Agreement have been
fulfilled.

     

    2. Representations and Warranties of the
Company. The Company hereby represents and warrants to Investor that, as
of the date hereof unless a different date is specified, and except as set forth
on a Schedule of Exceptions (the “Schedule of Exceptions”) furnished to the
Investor prior to execution hereof and attached hereto as Schedule A, which exceptions shall be
deemed to be representations and warranties as if made hereunder:

     

    2.1 Organization. Good Standing
and Qualification. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of California. The
Company is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would have a material adverse
effect on its business or properties.

     

    
      
        
        

      

      
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    2.2 Capitalization Common
Stock. The authorized capital of the Company consists of One Hundred
Million (100,000,000) shares of common stock, no par value per share, of which
Sixteen Million Six Hundred Sixty-Seven Thousand (16,667,000) shares are issued
and outstanding as of the date hereof.

     

    (b) As of
the date hereof, the outstanding shares of Common Stock are owned by the
stockholders and in the numbers specified in Exhibit A hereto.

     

    (c) The
outstanding shares of Common Stock are all duly and validly authorized and
issued, fully paid and nonassessable, and were issued in compliance with all
applicable state and federal laws concerning the issuance of
securities.

     

    (d)
Except as set forth in the Schedule of Exceptions attached hereto as Schedule A, there are
not outstanding any options, warrants, rights (including conversion or
preemptive rights) or agreements for the purchase or acquisition from the
Company of any shares of its capital stock. Except as set forth herein, the
Company is not a party or subject to any agreement or understanding, and, to the
Company’s knowledge, there is no agreement or understanding between any persons
and/or entities, which affects or relates to the voting or giving of written
consents with respect to any security or by a director of the
Company.

     

    2.3 Subsidiaries. The
Company does not presently own or control, directly or indirectly, any interest
in any other corporation, association, or other business entity. The Company is
not a participant in any joint venture, partnership, or similar
arrangement.

     

    2.4 Authorization. All
corporate action on the part of the Company, its officers, directors and
stockholders necessary for the authorization, execution and delivery of this
Agreement and the performance of all obligations of the Company hereunder has
been taken. This Agreement constitutes valid and legally binding obligations of
the Company, enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally, and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.

     

    2.5 Valid Issuance of Common
Stock. The Common Stock that is being purchased by the Investor
hereunder, when issued, sold and delivered in accordance with the terms of this
Agreement for the consideration expressed herein, will be duly and validly
issued, fully paid and nonassessable and will be free of restrictions on
transfer, other than restrictions on transfer under this Agreement and under
applicable state and federal securities laws.

     

    
      
        
        

      

      
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    2.6 Governmental
Consents. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of the Company is
required in connection with the issuance of the Issue Shares and Warrants,
except for such filings as are required pursuant to applicable federal and state
securities laws and blue sky laws, which filings will be effected within the
required statutory period.

     

    2.7 Offering. Subject in
part to the truth and accuracy of the Investor’s representations set forth in
Section 3 of this Agreement, the offer, sale and issuance of the Shares as
contemplated by this Agreement are exempt from the registration requirements of
the Securities Act of 1933, as amended (the “Act”), and the qualification or
registration requirements of applicable blue sky laws. Neither the Company nor
any authorized agent acting on its behalf will take any action hereafter that
would cause the loss of such exemptions.

     

    2.8 Litigation. There is
no action, suit, proceeding or investigation pending, or to the Company’s
knowledge, currently threatened against the Company that questions the validity
of this Agreement or the right of the Company to enter into such agreement or to
consummate the transactions contemplated hereby, or that might result, either
individually or in the aggregate, in any material adverse changes in the
business, assets or condition of the Company, financially or otherwise, or any
change in the current equity ownership of the Company. The Company is not a
party or subject to the provisions of any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality. There is no action,
suit, proceeding or investigation by the. Company currently pending or that the
Company intends to initiate.

     

    2.9 Compliance with Other
Instruments. The Company is not in violation in any material respect of
any provision of its articles of incorporation (the “Articles”) or bylaws (the
“Bylaws”) nor, to its knowledge, in any material respect of any instrument,
judgment, order, writ, decree or contract, statute, rule or regulation to which
the Company is subject and a violation of which would have a material adverse
effect on the condition, financial or otherwise, or operations of the Company.
The execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby will not result in any such violation,
or be in conflict with or constitute, with or without the passage of time and
giving of notice, either a default under any such provision or an event that
results in the creation of any lien, charge or encumbrance upon any assets of
the Company or the suspension, revocation, impairment, forfeiture or nonrenewal
of any material permit, license, authorization or approval applicable to the
Company, its business or operations or any of its assets or
properties.

     

    2.10
Permits. The
Company has all franchises, permits, licenses and any similar authority
necessary for the conduct of its business as it is presently conducted, the lack
of which could materially and adversely affect the business, properties or
financial condition of the Company. The Company is not in default in any
material respect under any of such franchises, permits, licenses or other
similar authority.

     

    
      
        
        

      

      
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    2.11
Corporate Documents
Minute Books. The Articles and Bylaws of the Company are in the form
previously provided to the Investor. The minute books of the Company provided to
the Investor contain a complete summary of all meetings of directors and
stockholders since the time of incorporation and reflect all transactions
referred to in such minutes accurately in all material respects.

     

    3. Representations, Warranties and Covenants of the
Investor. The Investor represents, warrants and covenants
that:

     

    3.1 Authorization.
Investor has full power and authority to enter into this Agreement and such
agreement constitutes a valid and legally binding obligation, enforceable
against Investor in accordance with its terms. Investor hereby represents and
warrants to Company that, as of the date hereof unless a different date is
specified, and except as set forth on a Schedule of Exceptions (the “Schedule of
Exceptions”) furnished to the Company prior to execution hereof and attached
hereto as Schedule A1, which
exceptions shall be deemed to be representations and warranties as if made
hereunder:

     

    3.2 Organization, Good
Standing and Qualification. The Investor is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Maryland. The Investor is duly qualified to transact business and is in
good standing in each jurisdiction in which the failure to so qualify would have
a material adverse effect on its business or properties.

     

    3.3 Purchase Entirely for Own
Account. This Agreement is made with Investor in reliance upon Investor’s
representation to the Company, which by Investor’s execution of this Agreement
Investor hereby confirms, that the Shares to be received by Investor (the “Securities”) will be
acquired for investment for Investor’s own account, not as a nominee or agent,
and not with a view to the resale or distribution of any part thereof, and that
Investor has no present intention of selling, granting any participation in or
otherwise distributing the same. By executing this Agreement, Investor further
represents that Investor does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the
Securities.

     

    3.4 Disclosure of
Information. Investor believes it has received all the information it
considers necessary or appropriate for deciding whether to purchase the Shares.
Investor further represents that it has had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of the
offering of the Shares and the business, properties, prospects and financial
condition of the Company.

     

    
      
        
        

      

      
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    3.5 Investment
Experience. Investor is an investor in securities of companies in the
development stage and acknowledges that it is able to fend for itself, can bear
the economic risk of its investment, and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Shares.

     

    
      3.6 Accredited Investor.
Investor has read the definition of “accredited investor” attached to this
Agreement as Exhibit B and Investor is an “accredited investor” within the
meaning of Rule 501 of Regulation D of the Act, Investor has completed fully and
executed Exhibit B. Investor acknowledges and agrees that the Company is relying
and may rely on this and the other representations, warranties and covenants
made by investor herein for compliance with federal and state securities
laws.

       

      3.7 Restricted
Securities. Investor understands that the Securities it is purchasing are
characterized as “restricted securities” under the federal securities laws in as
much as they are being acquired from the Company in a transaction not involving
a public offering, that the Securities have not been registered under the Act,
and that under federal securities laws and applicable regulations such
Securities may be resold without registration under the Act only in certain
limited circumstances. In the absence of an effective registration statement
covering the Securities or an available exemption from registration under the
Act, the Securities must be held indefinitely. In this connection,
Investor represents that it is familiar with Rule 144 of the Act and understands
the resale limitations imposed thereby and by the Act, including without
limitation the Rule 144 condition that current information about the Company be
available to the public. Such information is not now available and the Company
has no present plans to make such information available.

       

      3.8 Further Limitations on
Disposition. Without in any way limiting the representations set forth
above, Investor further agrees not to make any disposition of all or any portion
of the Securities unless and until the transferee has agreed in writing for the
benefit of the Company to be bound by this Section 3, and:

       

      (a) There
is then in effect a registration statement under the Act covering such proposed
disposition and such disposition is made in accordance with such registration
statement; or

       

      (b) (i)
Investor shall have notified the Company of the proposed disposition and shall
have furnished the Company with a detailed statement of the circumstances
surrounding the proposed disposition, and (ii) if requested by the Company,
Investor shall have furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require registration
of such shares under the Act nor result in the loss of any exemption under the
Act or any applicable blue sky laws.

       

      
        
          
          

        

        
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      (c) In no
event shall Investor make any disposition or Transfer of any Issue Shares or
Warrant Shares, or any right, title, or interest of Investor therein, until
the
date which is three (3) years after the date of this Agreement, except that
Investor shall be permitted to Transfer Issue Shares or Warrant Shares acquired
by Investor pursuant to this Agreement on the following conditions: (i) Investor
gives five (5) business days’ prior written notice to the Company of Investor’s
intent to Transfer the Issue Shares or Warrant Shares, including notice of the
number of shares to be Transferred, the price or other consideration
therefor, the proposed transferee, and the proposed date of the Transfer; (ii)
Balwinder Samra, an officer and shareholder of the Company (“Samra”), shall have
already Transferred shares of the Common Stock before Investor Transfers any of
Investor’s Shares; (iii) Investor will not Transfer a greater percentage of the
Shares owned by Investor than the percentage which Samra Transferred of the
shares of Common Stock owned by Samra (e.g., if Samra Transfers 10% of the
Common Stock owned by Samra, then Investor may Transfer up to 10%, but no more,
of the Shares owned by Investor); and (iv) no Transfer by Investor of the Shares
will result in the loss of any exemption from registration or qualification of
the Common Stock or of any other security of the Company under the Act or any
applicable blue sky laws.

    

     

    3.9 Legends. It is
understood that the certificates evidencing the Securities may bear one or more
legends restricting the transfer thereof or indicating the existence of
restrictions on such transfer including legends substantially as set forth in
this Section 3.8;

     

    (a)
“These securities have not been registered or qualified under the Securities Act
of 1933, as amended (the “Act”) or any applicable state securities laws. They
may not be sold, offered for sale, pledged or hypothecated in the absence of a
registration statement in effect with respect to the securities under such Act
and qualification under applicable state securities laws or an opinion of
counsel satisfactory to the Company that such registration and qualification is
not required.”

     

    (b) Any
legend required by the laws of the State of California, including, without
limitation, any legend required by the California Department of Corporations and
Sections 417 and 418 of the California Corporations Code.

     

    3.10
Tax Advisors. Investor
has reviewed with Investor’s own tax advisors the federal, state and local tax
consequences of this investment, where applicable, and the transactions
contemplated by this Agreement. Investor is relying solely on such advisors and
not on any statements or representations of the Company or any of its agents and
understands that Investor (and not the Company) shall be responsible for
Investor’s own tax liability that may arise as a result of this investment or
the transactions contemplated by this Agreement.

     

    3.11
Lock–up
Agreements. Investor acknowledges that Investor may from time to time be
asked to enter into a “market stand-still” or “lock-up” agreement further
restricting Investor’s ability to sell or otherwise transfer the Securities.
Investor hereby agrees to execute and deliver any such market stand-still,
lock-up or similar
agreement, provided that investor shall not be required to execute and deliver
any such agreement unless Samra executes and delivers a similar agreement
providing substantially the same restrictions on any sale of transfer of any
shares of the Company’s stock held by Samra.

     

    
      
        
        

      

      
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            4.
California
Commissioner of Corporations.

     

    4.1 Corporate Securities
Law. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT
HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY
PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS
UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION
25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE, THE RIGHTS OF ALL
PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION
BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

     

    5. Conditions of Investor’s
Obligations at Closing. The obligations of Investor under subsection 1.1
(c) of this Agreement are subject to the fulfillment on or before the Closing,
of each of the following conditions, the waiver of which shall not be effective
unless Investor consents thereto:

     

    5.1 Representations and
Warranties. The representations and warranties of the Company contained
in Section 2 shall be true on and as of the Closing, with the same effect as
though such representations and warranties had been made on and as of the date
of such Closing.

     

    5.2 Performance. The
Company shall have performed and complied with all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing.

     

    5.3 Qualifications.
Except as otherwise stated in this Agreement, all authorizations, approvals or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the lawful issuance
and sale of the Securities pursuant to this Agreement shall be duly obtained and
effective as of the Closing.

     

    5.4 Proceedings and
Documents. All corporate and other proceedings in connection with the
transactions contemplated at the Closing and all documents incident thereto
shall be reasonably satisfactory in form and substance to Investor’s counsel,
and they shall have received all such counterpart original and certified or
other copies of such documents as they may reasonably request.

     

    
      
        
        

      

      
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    6. Conditions of the Company’s
Obligations at Closing. The obligations of the Company to Investor under
this Agreement are subject to the fulfillment on or before the Closing, or any
Warrant Closing, of each of the following conditions:

     

    6.1 Representations and
Warranties. The representations and warranties of the Investor contained
in Section 3 shall be true on and as of the Closing, or any Warrant Closing,
with the same effect as though such representations and warranties had been made
on and as of the Closing or any Warrant Closing, as applicable.

     

    6.2 Payment of Purchase
Price. The Investor shall have delivered the Cash Purchase Price
specified in Section 1.1(c),

     

    6.3 Qualifications.
Except as otherwise stated in this Agreement, all authorizations, approvals or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the lawful issuance
and sale of the Securities pursuant to this Agreement shall be duly obtained and
effective as of the Closing or any Warrant Closing, as applicable.

     

    7. Miscellaneous.

     

    7.1 Survival. The
warranties, representations and covenants of the Company and Investor contained
in or made pursuant to this Agreement shall survive the execution and delivery
of this Agreement and the Closing.

     

    7.2 Successors and
Assigns. Except as otherwise provided herein, the terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties (including transferees of any Securities).
Nothing in this Agreement, express or implied, is intended to confer upon any
party, other than the parties hereto or their respective successors and assigns,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.

     

    7.3 Governing Law. This
Agreement shall be governed by and construed under the laws of the State of
California as applied to agreements among California residents entered into and
to be performed entirely within California.

     

    7.4 Titles and Subtitles.
The titles and subtitles used in this Agreement are used for convenience only
and are not to be considered in construing or interpreting this
Agreement.

     

    7.5 Notices. All notices
required or permitted hereunder shall be in writing and shall be deemed
effectively given: (i) upon personal delivery to the party to be notified, (ii)
when sent by confirmed telex or facsimile if sent during normal business hours
of the recipient, if not, then on the next business day; (iii) five days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid; or (iv) one day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the address as set forth on the
signature page hereof or at such other address as such party may designate by
ten days advance written notice to the other parties hereto.

     

    
      
        
        

      

      
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    7.6 Finder’s Fee. Each
party represents that it neither is nor will be obligated for any finders’ fee
or commission in connection with this transaction. Investor agrees to indemnify
and to hold harmless the Company from any liability for any commission or
compensation in the nature of a finders’ fee (and the costs and expenses of
defending against such liability or asserted liability) for which Investor or
any of its officers, partners, employees or representatives is responsible. The
Company agrees to indemnify and hold harmless Investor from any liability for
any commission or compensation in the nature of a finders’ fee (and the costs
and expenses of defending against such liability or asserted liability) for
which the Company or any of its officers, employees or representatives is
responsible.

     

    7.7 Amendments and
Waivers. Any term of this Agreement may be amended by the written consent
of the parties hereto. The observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively), with the consent of the party or parties entitled to enforce
such observance. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each holder of any securities purchased under
this Agreement at the time outstanding, each future holder of all such
securities, and the Company.

     

    7.8 Severability. If one
or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.

     

    7.9 Entire Agreement. This
Agreement constitutes the entire agreement among the parties and no party shall
be liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein or
therein.

     

    
      
        
        

      

      
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    7.10
Waiver of
Conflicts. Each party to this Agreement acknowledges that Richard
Christesen, counsel for the Company, has in the past and may continue to perform
legal services for the Company and/or the Investor in matters unrelated to the
transactions described in this Agreement. Each party to this Agreement also
acknowledges that David Culmer, also counsel for the Company, may continue to
perform legal services for the Company and/or the Investor in matters unrelated
to the transactions described in this Agreement. Accordingly, each party to this
Agreement hereby (i) acknowledges that they have had an opportunity to ask for
information relevant to this disclosure, (ii) acknowledges that Richard
Christesen and David Culmer represented the Company in the transaction
contemplated by this Agreement and have not represented Investor or any
individual stockholder or employee of the Company in connection with such
transaction, (iii) gives its informed consent to the representation by Richard
Christesen and/or David Culmer of the Investor in such unrelated matters and the
representation by Richard Christesen and/or David Culmer of the Company in
connection with this Agreement and the transactions contemplated hereby and any
unrelated matters. Investor hereby acknowledges that it has been informed that
it should seek the advise of an independent attorney and has either availed
itself of that right or has elected to waive that right.

     

    7.11
Construction.
Each party to this Agreement acknowledges and agrees that it has been given the
opportunity to review this Agreement independently with legal counsel, and that
each party to this Agreement has cooperated in the drafting of this Agreement
such that any construction to be made of this Agreement shall not be made based
on any rule providing for interpretation against the party who causes
uncertainty to exist, or against the draftsman. Whenever the singular number is
used in this Agreement and when required by the context, the same shall include
the plural and vice versa, and the masculine gender shall include the feminine
and neuter genders and vice versa.

     

    7.12
Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.

    
      	 
      	 
      	 
      
	 
      	 
      	
              “Company”:

            
	 
      	 
      	 
      
	 
      	 
      	
              BALQON
      CORPORATION,

              a
      California corporation

            
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/
      Balwinder Samra

            
	 
      	 
      	
              Balwinder
      Samra

            
	 
      	 
      	
              Its:
      President

            
	 
      	 
      	 
      

    

    

    
      	 
      	
              Address

            	
              1701
      E. Edinger Ave., Unit E-3,

              Santa
      Ana, CA 92705

              Facsimile:
      (714) 836-6343

            
	 
      	 
      	 
      
	 
      	
              “Investor”:

            
	 
      	 
      
	 
      	
              MARLIN
      FINANCIAL GROUP, INC,

            
	 
      	 
      
	 
      	
              By:

            	
              
                /s/ Mark
      Levine

              

            
	 
      	 
      	
              Mark
      Levin

              Its:
      CEO

            

    

    

    
      	 
      	
              Address

            	
              9812
      Falls Road, Suite 114-198 

              Potomac,
      MD 20854

            
	 
      	 
      	
              Facsimile:
      4434312508

            

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    

    17ex_10-23.htm

    
      

      

    

    Exhibit
10.23

     

     

    AMENDMENT
NO. 2 TO STOCK AND WARRANT PURCHASE AGREEMENT

     

     

    THIS
AMENDMENT NO. 2 TO STOCK AND WARRANT PURCHASE AGREEMENT (“Amendment”) is made as
of May 20, 2009 by and among Balqon Corporation, a Nevada corporation
(“Company”) and Marlin Financial Group, Inc. (“Marlin”).

     

    Recitals

     

    A.           On
October 24, 2008, the Company assumed the rights and obligations of Balqon
Corporation, a California corporation (“Balqon California”), under that certain
Stock and Warrant Purchase Agreement, dated August 28, 2008, by and between
Balqon California and Marlin (as amended by that certain Amendment No. 1 to
Stock and Warrant Purchase Agreement, dated March 30, 2009, the “Initial
Agreement”).

     

    B.           Amendment
No. 1 to the Stock and Warrant Purchase Agreement, dated March 30, 2009,
erroneously referred to Section 3.8(c) of the Initial Agreement as Section
3.7(c), and the Company and Marlin desire to rectify such error.

     

    C.           The
Company and Marlin desire to amend the Initial Agreement to terminate a
provision of the Initial Agreement pursuant to which Marlin’s ability to dispose
of the Company’s securities was restricted.

     

    Agreement

     

     

    NOW
THEREFORE, in consideration of the foregoing premises and the respective
promises and agreements of the parties set forth herein, the parties hereto
agree as follows:

     

    
      	
              1.  

            	
              Definitions. Capitalized
      terms used herein and not otherwise defined herein shall have the
      respective meanings ascribed thereto in the Initial
    Agreement.

            

    

     

    
      	
              2.  

            	
              Clarification.  Section
      2.3 of Amendment No. 1 to Stock and Warrant Purchase Agreement are hereby
      amended by deleting all references to “Section 3.7(c)” and inserting in
      its place “Section 3.8(c)”.

            

    

     

    
      	
              3.  

            	
              Amendments.

            

    

     

    
      	
              3.1.     

            	
              Section
      3.8 of the Initial Agreement is hereby amended by deleting Section 3.8(c)
      in its entirety.

            

    

     

    
      	
              3.2.   
       

            	
              Section
      11 of the Warrants issued to Investor pursuant to Section 1.3 of the
      Initial Agreement are amended by deleting Section 11(b)(iii) of each of
      the Warrants in its entirety.

            

    

     

    
      	
              4.  

            	
              Miscellaneous.  Except
      as modified and amended pursuant to this Amendment, the Initial Agreement
      shall remain in full force and effect.  This Amendment may be
      executed in one or more counterparts, each of which shall be deemed an
      original, but all of which taken together shall constitute one and the
      same instrument.

            

    

     

     

    [signature
page follows]

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    

    IN WITNESS WHEREOF, the parties have
caused their duly authorized officers to execute this Amendment No. 2 to Warrant
and Stock Purchase Agreement as of the date first above written.

    

    The
Company:                                                                      Balqon Corporation

    

    

    By:______________________

    Name: B. Samra

    Title: Chief Executive
Officer

    

    

    Marlin:                                                                                
  MARLIN FINANCIAL GROUP,
INC.

    

    

    By:_______________________

    Name: Mark Levin

    Title: President

     

     

    2

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