Document:

Exhibit 10.6

 

NEITHER THESE SECURITIES NOR THE SECURITIES
ISSUABLE UPON THE EXERCISE OR CONVERSION OF THESE SECURITIES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. THE SECURITIES REPRESENTED HEREBY MAY NOT BE EXERCISED,
CONVERTED, OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED (EACH A “TRANSFER”) EXCEPT
(A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN
A TRANSFER NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (B) TO THE EXTENT THE TRANSFER DOES NOT CONSTITUTE
AND WILL NOT RESULT IN A VIOLATION OF APPLICABLE FEDERAL OR STATE SECURITIES LAWS, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT (TO THE EXTENT REQUESTED BY COUNSEL OF THE COMPANY), THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE
TO THE COMPANY. THE HOLDER HEREOF AGREES THAT IT WILL DELIVER, OR CAUSE TO BE DELIVERED, TO EACH PERSON TO WHOM THE SECURITIES
HEREBY REPRESENTED ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THESE SECURITIES AND THE SECURITIES ISSUABLE
UPON EXERCISE OR CONVERSION OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

 

10% SECURED SUBORDINATED CONVERTIBLE
PROMISSORY NOTE

 

	Note No.: M2-[___]	May 18, 2012
	$[_________]	Harbor City, California

 

THIS 10% SECURED SUBORDINATED
CONVERTIBLE NOTE is one of a series of duly authorized and validly issued 10% Secured Subordinated Convertible Notes of Balqon
Corporation, a Nevada corporation, (the “Company”), having its principal place of business at 1420 240th
Street, Harbor City, CA 90710, issued pursuant to the terms and conditions contained in those certain Securities Purchase Agreements
entered into between the Company and the investors that purchased securities of the Company pursuant to the Company’s Confidential
Private Placement Memorandum (the “Memorandum”) dated March 21, 2012 (this note, the “Note”
and, collectively with the other notes of such series, the “Notes”).

 

THE OBLIGATIONS
DUE UNDER THIS NOTE ARE SECURED BY A SECURITY AGREEMENT (THE “SECURITY AGREEMENT”) DATED AS OF THE ORIGINAL
ISSUE DATE. ADDITIONAL RIGHTS OF THE HOLDER ARE SET FORTH IN THE SECURITY AGREEMENT.

 

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FOR VALUE RECEIVED,
BALQON CORPORATION, a Nevada corporation (“Company”), promises to pay to «Name» (“Holder”),
or its registered assigns, the principal sum of [_________] DOLLARS ($[_________]), or such lesser amount as shall equal the outstanding
principal amount hereof, together with interest from the date of this 10% Secured Subordinated Convertible Promissory Note (this
“Note”) on the unpaid principal balance at a rate equal to 10% per annum, computed on the basis of the actual
number of days elapsed and a year of three hundred sixty-five (365) days. Interest on the outstanding principal balance of this
Note shall be payable quarterly as described in Section 2. Subject to Section 6, all unpaid principal,
together with any then unpaid and accrued interest and other amounts payable hereunder, shall be due and payable on the Note Maturity
Date (as defined below). Subject to Section 6, any unpaid principal and accrued and unpaid interest on the Note Maturity
Date shall be payable in cash. Upon payment in full of all principal and interest payable hereunder, this Note shall be surrendered
to the Company for cancellation.

 

The following is a
statement of the rights of the Holder and the conditions to which this Note is subject, and to which the Holder, by the acceptance
of this Note, agrees:

 

1.            Certain
Definitions. For purposes of this Note, the following terms shall have the following respective meanings:

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of California are authorized or required by law or other governmental action
to close.

 

Closing
Bid Price” and “Closing Sales Price” means, for any security as of any date, the last closing bid
price and last closing trade price, respectively, for such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg, or, if such principal market begins to operate on an extended hours
basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or the
last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the foregoing
do not apply, the last closing bid price or last trade price, respectively, of such security in the OTC Bulletin Board for such
security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the “pink sheets” by Pink OTC Markets. If the Closing Bid Price or the Closing Sale Price cannot be calculated for
a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case may
be, of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. All such
determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction
during the applicable calculation period.

 

“Common
Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.

 

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“Common
Stock Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at
any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

“Conversion
Shares” means the shares of Common Stock issuable upon conversion of this Note.

 

“Event
of Default” means any of the events specified as such in Section 5.1.

 

“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, consultants, officers or directors
of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of
the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose, (b)
securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable
or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that
such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease
the exercise price, exchange price or conversion price of such securities, and (c) securities issued pursuant to acquisitions or
strategic transactions approved by a majority of the disinterested directors of the Company, provided, however, that
any such issuance shall only be to a Person (or to the equity-holders of a Person) which is an operating company or an asset in
a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the
investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of
raising capital or to an entity whose primary business is investing in securities.

 

“GAAP”
means the United States generally accepted accounting principles applied on a consistent basis during the periods involved.

 

“Holder”
means the person or entity specified in the introductory paragraph of this Note or any transferee that is at the time the registered
holder of this Note. The Holder or any transferee is an “accredited investor” as defined under U.S. federal securities
laws or otherwise will qualify to allow this offering to take place as a private placement under applicable securities laws.

 

“Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payables incurred
in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Company’s balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of
business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance
with GAAP.

 

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“Insolvency
or Liquidation Proceeding” shall mean (i) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding, relative to the Company or to its creditors, as such, or to its assets, or
(ii) any liquidation, dissolution, reorganization or winding up of the Company, whether voluntary or involuntary and whether or
not involving insolvency or bankruptcy, or (iii) any assignment for the benefit of creditors or any other marshaling of assets
and liabilities of the Company.

 

“Note
Maturity Date” shall mean the earlier of (i) March 31, 2013, or (ii) the date as of which the outstanding principal
and accrued interest on this Note and all other payments payable hereunder are due and payable to the Holder pursuant to Section 5.2.

 

“Original
Issue Date” means the date of the first issuance of this Note, regardless of any transfers of this Note and regardless
of the number of instruments which may be issued to evidence this Note.

 

“Person”
means any individual, corporation, partnership, trust, limited liability company, association or other entity.

 

“Reorganization
Securities” shall mean shares of stock of the Company, or its successor, as reorganized, or other securities of the Company
or any other person provided for by a plan of reorganization, the payment of which is subordinated, at least to the same extent
as this Note, to the payment of all Senior Indebtedness which may at the time be outstanding and the principal of which is due
no earlier than the principal of this Note, provided that the rights of the holders of the Senior Indebtedness are not impaired
thereby or such holders as a class shall have approved such plan of reorganization.

 

“Representative”
shall mean the trustee, agent or other representative for holders of all or any of the Senior Indebtedness, if any, designated
in the indenture, agreement or other document creating, evidencing or governing such Senior Indebtedness or pursuant to which it
was issued, or otherwise duly designated by the holders of such Senior Indebtedness.

 

“Senior
Indebtedness” shall mean the principal of and unpaid interest on all Indebtedness of the Company (i) incurred on, before
or after the date of this Note for money borrowed from any bank, savings and loan or other commercial or financial institution
in an amount of up to $2,500,000 in the aggregate, and is evidenced by promissory notes, bonds, debentures or other written obligations,
(ii) incurred before the date of this Note and listed on Schedule A to this Note, and (iii) incurred on, before or after
the date of this Note in connection with any renewals or extensions of any Indebtedness described in (i) and (ii) above; provided,
however, that the term shall not include (a) any lease financing arrangement involving the Company and (b) Indebtedness
which by the terms of the instrument creating or evidencing it is subordinated to or on parity with this Note. For the avoidance
of doubt, Senior Indebtedness shall include Indebtedness of the Company incurred pursuant to the Company’s agreement with
Bridge Bank, National Association, as such agreement may be amended from time to time.

 

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“Trading
Day” means a day on which the principal Trading Market is open for trading.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE AMEX, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market, the
New York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).

 

Other capitalized terms
not defined in this Note have the same meaning as in the Securities Purchase Agreement.

 

2.            Interest.
This Note will bear interest at a rate of 10% per annum. Accrued interest on this Note shall be due and payable quarterly on the
fifth (5th) day after the last Business Day of each calendar quarter beginning with the quarter ended June 30,
2012, with a final installment due on the Note Maturity Date, whether by acceleration, scheduled maturity or otherwise, unless
such amounts are converted into Common Stock pursuant to the terms set forth herein. Subject to Section 6, any accrued
interest on this Note that is due on or prior to the Note Maturity Date shall be payable in cash.

 

3.            Prepayment.
At any time upon fifteen (15) days prior written notice to the Holder, the Company may prepay this Note in whole or in part;
provided, however, that: (i) any prepayment of this Note may only be made in connection with the prepayment of all Notes
on a pro rata basis, based on the respective aggregate outstanding principal amounts of each such Note, and (ii) any such prepayment
will be applied first to the payment of expenses due under this Note, second to interest accrued on this Note and third, if the
amount of prepayment exceeds the amount of all such expenses and accrued interest, to the payment of principal of this Note.

 

4.            Subordination.

 

4.1            Subordinated
Notes Subordinate to Senior Indebtedness. The provisions of this Section 4 apply notwithstanding anything to
the contrary contained in this Note. The Company covenants and agrees, and the Holder, by such Holder’s acceptance hereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Section, the indebtedness represented
by this Note and the payment of the principal of and interest on this Note are hereby expressly made subordinate and subject in
right of the prior payment in full of all Senior Indebtedness. This Section 4 constitutes a continuing offer to all
persons who become holders of, or continue to hold, Senior Indebtedness, each of whom is an obligee hereunder and is entitled to
enforce such holder’s rights hereunder, subject to the provisions hereof, without any act or notice of acceptance hereof
or reliance hereon.

 

4.2            Payment
Over of Proceeds Upon Dissolution, Etc. 

 

(a)            In
the event of any Insolvency or Liquidation Proceeding, all Senior Indebtedness shall first be paid in full before the Holder is
entitled to receive any direct or indirect payment or distribution of any cash, property or securities (excluding Reorganization
Securities) on account of the principal of or interest on this Note.

 

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(b)            The
holders of Senior Indebtedness (or their respective Representatives) shall be entitled to receive directly, for application to
the payment thereof (to the extent necessary to pay all such Senior Indebtedness in full after giving effect to any substantially
concurrent payment or distribution to the holders of such Senior Indebtedness), any payment or distribution of any kind or character,
whether in cash, property or securities (excluding Reorganization Securities but including any payment or distribution, except
Reorganization Securities, which may be payable or deliverable by reason of the payment of any other indebtedness of the Company
being subordinated to the payment of this Note) which may be payable or deliverable in respect of this Note in any such Insolvency
or Liquidation Proceeding.

 

(c)            In
the event that, notwithstanding the foregoing provisions of this Section 4.2, the Holder shall have received any payment
from or distribution of assets of the Company in an Insolvency or Liquidation Proceeding or the estate created by the commencement
of any such Insolvency or Liquidation Proceeding, of any kind or character in respect of this Note whether in cash, property or
securities (excluding Reorganization Securities but including any payment or distribution, except Reorganization Securities, which
may be payable or deliverable by reason of the payment of any other indebtedness of the Company being subordinated to the payment
of this Note) before all Senior Indebtedness is paid in full, then and in such event such payment or distribution shall be received
and held in trust for and shall be paid over to the holders of the Senior Indebtedness remaining unpaid (or their respective Representatives),
to the extent necessary to pay all such Senior Indebtedness in full after giving effect to any substantially concurrent payment
or distribution to the holders of such Senior Indebtedness, for application to the payment in full of such Senior Indebtedness.

 

4.3            Default
on Senior Indebtedness.

 

(a)            If
there exists a default in the payment when due (whether at maturity or upon acceleration or mandatory repayment, or on any principal
installment payment date or interest payment date, or otherwise) of any Senior Indebtedness (a “Payment Default”)
and such default shall not have been cured or waived in writing by or on behalf of the requisite percentage of the holders of such
Senior Indebtedness (or their Representative, if any), then any payment on account of principal of or interest on this Note which
the Holder would then be entitled to receive, but for the provisions of this Section 4.3(a), shall instead be paid
over to the holders of such Senior Indebtedness (or their Representative, if any) until all amounts of Senior Indebtedness then
due and payable have been paid in full, prior to any direct or indirect payment by or on behalf of the Company to the holder of
any principal of or interest on this Note.

 

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(b)            The
Company may not, directly or indirectly, make, and the Holder may not ask, demand, take or receive from or on behalf of the Company,
any payment on account of the principal of or interest on this Note during the period (a “Deferral Period”)
from the date the Company and/or the Holder receive from a holder of Senior Indebtedness a notice (a “Deferral Notice”)
of:

 

(i)            the
existence of a Payment Default; or

 

(ii)            the
existence of any event of default (other than a Payment Default) under any agreement or instrument pursuant to which any Senior
Indebtedness is issued, in each instance as now in effect or as hereafter from time to time modified or amended, without the necessity
of any consent by or notice to the Holders (a “Specified Covenant Default”);

 

until the earlier of (i) the date
such Payment Default or Specified Covenant Default is cured, waived in writing or otherwise ceases to exist and (ii) the one hundred
eightieth (180th) day after receipt by the Company and/or by the holder of this Note of such Deferral Notice; provided,
however, that (x) only one Deferral Notice relating to the same Payment Default or Specified Covenant Default may be given,
(y) no subsequent Deferral Notice may be given with respect to any Payment Default or Specified Covenant Default existing at the
time an effective Deferral Notice is given and (z) if any such Deferral Notice has been given, no subsequent Deferral Notice with
respect to any number of different Payment Defaults or Specified Covenant Defaults shall be effective until the later of (1) the
date such subsequent Deferral Notice is received by the Company and the holders of Subordinated Notes and (2) the three hundred
sixty-fifth (365th) day after receipt of the then most recent prior effective Deferral Notice. So long as any Senior
Indebtedness is outstanding, the Holder shall give the holders of the Senior Indebtedness five (5) Business Days prior written
notice of any proposed demand for payment or institution of proceedings with respect to this Note (which notice may be given during
a Deferral Period provided that the proposed demand for payment is not to be made or the proposed proceedings are not to be instituted
until the expiration of such Deferral Period).

 

(c)            Upon
termination of any Deferral Period the Company shall resume payments on account of the principal of and interest on this Note subject
to the obligation of the Company and the Holder to pay over to the holders of Senior Indebtedness amounts otherwise payable on
account of the principal of and interest on this Note pursuant to the provisions of, and in the circumstances specified in, this
Section 4.

 

(d)            During
the first one hundred twenty (120) days of any Deferral Period, payment on account of this Note may not be accelerated unless a
voluntary Insolvency or Liquidation Proceeding shall be instituted by the Company or an involuntary Insolvency or Liquidation Proceeding
shall be instituted against the Company and such proceeding remains undismissed for a period of sixty (60) days. So long as any
Senior Indebtedness is outstanding, the Holder shall give the holders of the Senior Indebtedness five (5) Business Days’
prior written notice of any proposed acceleration with respect to this Note (which notice may be given during a Deferral Period
provided that the proposed acceleration is not to be effective until the expiration of such Deferral Period).

 

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(e)            In
the event that, notwithstanding the foregoing provisions of this Section 4.3, any payment shall be made by or on behalf
of the Company and received by the Holder at a time after the giving of a Deferral Notice and during a Deferral Period, then such
payment shall be held in trust for the benefit of and shall be immediately paid over to the holders of Senior Indebtedness remaining
unpaid or their respective Representatives, for application to the payment in full of all Senior Indebtedness in accordance with
its terms (after giving effect to any prior or substantially concurrent payment to the holders of such Senior Indebtedness).

 

4.4            Subrogation
to Rights of Holders of Senior Indebtedness. After all amounts payable under or in respect of Senior Indebtedness are paid
in full, the Holder shall be subrogated to the extent of the payments or distributions made to the holders of, or otherwise applied
to payment of, such Senior Indebtedness pursuant to the provisions of this Section 4 (equally and ratably with the
holders of all indebtedness of the Company which by its express terms is subordinate and subject in right of payment to Senior
Indebtedness to substantially the same extent as this Note is so subordinate and subject in right of payment and which is entitled
to like rights of subrogation), to the rights of the holders of such Senior Indebtedness (or their respective Representatives)
to receive payments and distributions of cash, property and securities applicable to the Senior Indebtedness until the principal
of and interest on this Note shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders
of the Senior Indebtedness (or their respective Representatives) of any cash, property or securities to which the Holder would
be entitled except for the provisions of this Section 4, and no payments over pursuant to the provisions of this Section 4
to the holders of Senior Indebtedness (or their respective Representatives) by the Company or the Holder shall, as among the Company
and its creditors (other than holders of Senior Indebtedness and the Holder), be deemed to be a payment or distribution by the
Company to or on account of Senior Indebtedness it being understood that the provisions of this Section 4 are solely
for the purpose of defining the relative rights of the holders of Senior Indebtedness on the one hand and the Holder on the other
hand.

 

If any payment
or distribution to which the Holder would otherwise have been entitled but for the provisions of this Section 4 shall
have been applied, pursuant to the provisions of this Section 4, to the payment of all amounts payable under the Senior
Indebtedness, then and in such case, the Holder shall be entitled to receive (equally and ratably with the holders of all indebtedness
of the Company which by its express terms is subordinate and subject in right of payment to Senior Indebtedness to substantially
the same extent as this Note is subordinate and subject in right of payment and which is entitled to like rights) from the holders
of such Senior Indebtedness (or their respective Representatives) any substantially contemporaneous payments or distributions received
by such holders of Senior Indebtedness (or their respective Representatives) in excess of the amount sufficient to pay in full
all obligations payable under or in respect of such Senior Indebtedness.

 

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4.5            Rights
of Holders Not to Be Impaired. Nothing contained in this Section 4 or elsewhere in this Note is intended to
or shall:

 

(a)            impair,
as among the Company, its creditors other than holders or Senior Indebtedness and the Holder, the obligation of the Company, which
is absolute and unconditional, to pay to the Holder the principal of and premium, if any, and interest on this Note as and when
the same shall become due and payable in accordance with their terms; or

 

(b)            affect
the relative rights against the Company of the Holder of this Note and creditors of the Company other than the holders of Senior
Indebtedness; or

 

(c)            prevent
the Holder from exercising all remedies otherwise permitted by applicable law upon default subject to the rights, if any, under
this Section 4 of the holders of Senior Indebtedness to receive payments or distributions otherwise payable or deliverable
to, or received by, such holder upon the exercise of any such remedy and subject to the restriction on acceleration set forth in
Section 4.3(d).

 

4.6            Effectuation
of Subordination. If the Holder does not file a proper claim or proof of debt in the form required in any Insolvency or
Liquidation Proceeding prior to thirty (30) days before the expiration of the time to file such claims or proofs, then the holders
of the Senior Indebtedness, or their Representatives, are hereby authorized, and shall have the right (without any duty), to file
an appropriate claim for and on behalf of such holder.

 

4.7            No
Waiver of Subordination Provisions. No right of any present or future holder of any Senior Indebtedness, or Representative
thereof, to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure
to act on the part of the Company or by any act or failure to act by any such holder or Representative thereof, or by any noncompliance
by the Company with the terms, provisions and covenants of this Note regardless of any knowledge thereof which any such holder
or Representative thereof may have or be otherwise charged with.

 

Without in
any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness (or their Representatives, if applicable)
may, at any time and from time to time, without the consent of or notice to the Holder, without incurring responsibility to the
Holder and without impairing or releasing the subordination and other benefits provided in this Section 4 or the obligations
hereunder of the Holder to the holders of Senior Indebtedness, do any one or more of the following all without notice to the Holder
and even if any right of reimbursement or subrogation or other right or remedy of the Holder is affected, impaired or extinguished
thereby:

 

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(a)            change
the manner, place or terms of payment or change or extend the time of payment of, or renew, exchange, amend or alter, the terms
of any Senior Indebtedness, any security therefor or guaranty thereof or any liability of the Company or any guarantor to such
holder, or any liability incurred directly or indirectly in respect thereof, or otherwise amend, renew, exchange, modify or supplement
in any manner Senior Indebtedness or any instrument evidencing or guaranteeing or securing the same or any agreement under which
Senior Indebtedness is outstanding;

 

(b)            sell,
exchange, release, surrender, realize upon, enforce or otherwise deal with in any manner and any order any property pledged, mortgaged
or otherwise securing Senior Indebtedness or any liability of the Company or any guarantor to such holder, or any liability incurred
directly or indirectly in respect thereof;

 

(c)            settle
or compromise any Senior Indebtedness or any other liability of the Company or any guarantor of the Senior Indebtedness to such
holder or any security therefor or any liability incurred directly or indirectly in respect thereof and apply any sums by whomsoever
paid and however realized to any liability (including, without limitation, Senior Indebtedness) in any manner or order; and

 

(d)            fail
to take or to record or otherwise perfect, for any reason or for no reason, any lien or security interest securing Senior Indebtedness
by whomsoever granted, exercise or delay in or refrain from exercising any right or remedy against the Company or any security
or any guarantor or any other person, elect any remedy and otherwise deal freely with the Company and any security and any guarantor
of the Senior Indebtedness or any liability of the Company or any guarantor to such holder or any liability incurred directly or
indirectly in respect thereof.

 

4.8            Reliance
on Court Orders; Evidence of Status. Upon any payment or distribution of assets of the Company referred to in Section 4.2,
the Holder shall be entitled to rely upon a certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent or other
person making such payment or distribution delivered to the Holder for the purpose of ascertaining the persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section 4.

 

In the absence
of any such receiver, trustee in bankruptcy, liquidating trustee, agent or other person, the holder of this Note shall be entitled
to rely upon a written notice by a person representing himself to be a holder of Senior Indebtedness (or a Representative on behalf
of such holder) as evidence that such person is a holder of Senior Indebtedness (or is such a Representative) for any relevant
purpose. In the event that any holder determines in good faith that further evidence is required with respect to the right of any
person as a holder of Senior Indebtedness (or such a Representative), as to the extent to which such person is entitled to participate
in such payment or distribution, and as to other facts pertinent to the rights of such person under this Section 4,
such holder may request such person to furnish evidence to the reasonable satisfaction of such holder as to the amount of Senior
Indebtedness held by such person, the extent to which such person is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such person under this Section 4, and if such evidence is not furnished
such holder may defer (without liability to any holder of Senior Indebtedness or any Representative of such holder) any payment
to such person pending judicial determination as to the right of such person to receive such payment or until such time as such
holder shall be otherwise satisfied as to the right of such person to receive such payment.

 

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4.9            Not
to Prevent Events of Default. The failure to make a payment on account of the principal of or interest on this Note by
reason of any provision of this Section 4 shall not be construed as preventing the occurrence of a default or an Event
of Default under this Note. Except as expressly provided in Section 4.3(d), nothing in this Section 4 shall
affect the rights of the Holder to accelerate the maturity of this Note in accordance with its terms.

 

4.10            Amendments.
Without the prior written consent of the holders of the Senior Indebtedness, the Company and the Holder shall not amend, supplement
or otherwise modify any provision of this Section 4 if such amendment would have a material adverse effect on the holders
of the Senior Indebtedness, amend, supplement or otherwise modify any other provision of this Note.

 

5.            Default.

 

5.1            Events
of Default. If any of the following events (each, an “Event of Default” and collectively, “Events
of Default”) shall occur:

 

(a)            the
Company shall default in the payment of any part of the principal of this Note or the other Notes;

 

(b)            the
Company shall default in the payment of any installment of interest on this Note or the other Notes for more than fifteen (15)
days after the same shall become due and payable;

 

(c)            the
Company shall breach or default in the performance of any covenant or warranty of the Company in this Note, and continuance of
such breach for a period of thirty (30) days after there has been given, by registered or certified mail, to the Company by the
holder of this Note, a written notice specifying such breach or default and requiring it to be remedied;

 

(d)            a
court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of the Company or for any substantial part of its property, or
ordering the winding-up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period
of sixty (60) consecutive days; or

 

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(e)            the
Company shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect,
shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of the
Company or for any substantial part of its property, or shall make any general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due, or shall take any corporate action in furtherance of any of the foregoing;

 

then and in any such event the
Holder of this Note may at any time (unless all defaults theretofore or thereupon shall have been remedied) at its option, by written
notice to the Company, declare this Note to be due and payable, whereupon the same shall forthwith mature and become due and payable
without presentment, demand, protest or other notice, all of which are hereby waived.

 

5.2            Remedies
on and Notices of Default. Subject to the provisions of Section 4, in case any one or more Events of Default
shall occur, the Holder may, with the consent of the holders of 67% of the then outstanding principal amount of the Notes, proceed
to protect and enforce the rights of such holder by a suit in equity, action at law or other appropriate proceeding, whether for
the specific performance of any agreement contained in this Note, or for an injunction against a violation of any of the terms
or provisions hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law. In case of a default
under this Note, the Company will pay to the Holder such further amount as shall be sufficient to cover the reasonable cost and
expense of enforcement, including, without limitation, reasonable attorneys’ fees. If the Holder shall give any notice or
take any other action in respect of a claimed default, the Company shall forthwith give written notice thereof to all other holders
of similarly subordinated notes at the time outstanding, describing the notice or action and the nature of the claimed default.
No course of dealing and no delay on the part of any Holder of this Note in exercising any right shall operate as a waiver thereof
or otherwise prejudice such Holder’s rights or the rights of the holder of any similarly subordinated notes. No remedy conferred
by this Note upon the Holder shall be exclusive of any other remedy referred to herein or now or hereafter available at law, in
equity, by statute or otherwise. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default,
the Holder may exercise any other right, power or remedy granted to the Holder as set forth in the Security Agreement.

 

6.            Conversion.

 

6.1            Automatic
Conversion. If at any time after one hundred eighty (180) days after the issuance of this Note the Closing Bid Price or
Closing Sales Price, as the case may be, of a share of the Company’s Common Stock equals or exceeds $4.50 (subject to appropriate
adjustment in the event of a stock split, stock dividend, combination or similar event) for twenty (20) consecutive Trading Days,
then the principal amount of this Note shall automatically convert into shares of Common Stock at the Conversion Price (as defined
below). Accrued and unpaid interest on the date of such automatic conversion shall be paid in cash by the Company. The conversion
will be deemed to have occurred as of the close of business on such twentieth (20th) consecutive Trading Day. The Company
shall notify the Holder in writing within one (1) Trading Day after any automatic conversion, and will cause certificate representing
the Conversion Shares to be issued within three (3) Trading Days after automatic conversion, and will deliver those certificates
to the Holder by overnight courier immediately after receipt of the original of this Note for cancellation.

 

    	-12-

    	 

    

6.2            Conversion
Procedure in the Event of Automatic Conversion. In the event of automatic conversion, the outstanding principal under this
Note will convert automatically without any further action by the Company whether or not the Note is surrendered to the Company
or its transfer agent. The Company will not be obligated to issue certificates evidencing the securities issuable upon automatic
conversion of this Note unless this Note is either delivered to the Company or its transfer agent, or the Holder notifies the Company
or its transfer agent that this Note has been mutilated, lost, stolen or destroyed and executes an agreement reasonably satisfactory
to the Company to indemnify the Company from any loss incurred by it in connection with this Note. At its expense, the Company
will, as soon as reasonably practicable thereafter, issue and deliver to the Holder a certificate for the number of shares of Common
Stock to which the Holder will be entitled upon conversion (bearing such legends as are required by applicable state and federal
securities laws in the opinion of counsel to the Company), together with a check payable to the Holder for any cash amounts payable
as described in Section 6.1 (with respect to accrued and unpaid interest) and Section 6.5 (with respect
to fractional shares).

 

6.3            Voluntary
Conversion. The Holder may, at any time before this Note has been repaid in full, elect to convert all or any portion of
the outstanding principal into shares of Common Stock at the Conversion Price.

 

6.4            Conversion
Procedure in the Event of Voluntary Conversion.

 

(a)            Each
voluntary conversion of this Note shall be effected by the surrender of this Note at the principal office of the Company at any
time during normal business hours, together with a written notice by the Holder stating that the Holder desires to convert the
entire, or a specified increment of, principal of this Note into Common Stock. Each conversion of a Note will be deemed to have
been effected as of the close of business on the date on which this Note has been surrendered and the notice has been received,
and at that time, the rights of the Holder of this Note will cease and the person or persons in whose name or names any certificate
or certificates for Common Stock are to be issued upon conversion will be deemed to have become the Holder or Holders of record
of the shares of Common Stock represented thereby.

 

    	-13-

    	 

    

(b)            Within
two (2) Trading Days after a conversion has been effected, the Company will deliver to the converting Holder:

 

(i)            a
certificate or certificates representing the number of shares of Common Stock issuable by reason of conversion in such name or
names and such denomination or denominations as the converting Holder has specified; and

 

(ii)          a
replacement Note representing the principal amount of this Note delivered to the Company in connection with the conversion but
which was not converted.

 

(c)            The
issuance of certificates for Common Stock upon conversion of this Note will be made without charge to the Holder for any tax in
respect thereof or other cost incurred by the Company in connection with conversion and the related issuance of Common Stock. Upon
conversion of any portion of this Note, the Company will take all actions as are necessary in order to ensure that the Common Stock
issuable with respect to conversion will be validly issued, fully paid and nonassessable.

 

(d)            The
Company will not close its books against the transfer of this Note or of the shares of Common Stock issued or issuable upon conversion
of this Note in any manner which interferes with the timely conversion of this Note, and will at all times reserve for issuance
the maximum number of shares of Common Stock into which this Note is convertible.

 

6.5            Fractional
Shares; Interest. No fractional shares shall be issued upon conversion of this Note. In lieu of the Company issuing any
fractional shares to Holder upon the conversion of this Note, the Company shall pay to Holder an amount in cash equal to the product
obtained by multiplying the Conversion Price applied to effect such conversion by the fraction of a share not issued pursuant to
the previous sentence. Upon conversion of this Note in full or the payment of outstanding amounts specified in this Note, the Company
shall be released from all its obligations and liabilities under this Note.

 

6.6            Conversion
Price. The initial Conversion Price shall be $0.40 per share of Common Stock. The Conversion Price shall be subject to
adjustment as described in Section 7.

 

7.            Conversion
Price Adjustments.

 

7.1            Adjustments
for Stock Splits and Subdivisions. In the event the Company should at any time or from time to time after the date of issuance
hereof fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination
of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock without
payment of any consideration by such holders for the additional shares of Common Stock, then, as of such record date (or the date
of such dividend distribution, split or subdivision if no record date is fixed), the Conversion Price shall be appropriately decreased
so that the number of shares of Common Stock issuable upon conversion of this Note shall be increased in proportion to such increase
of outstanding shares.

 

    	-14-

    	 

    

7.2            Adjustments
for Reverse Stock Splits. If the number of shares of Common Stock outstanding at any time after the date hereof is decreased
by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the Conversion
Price shall be appropriately increased so that the number of shares of Common Stock issuable on conversion hereof shall be decreased
in proportion to such decrease in outstanding shares.

 

7.3            Subsequent
Equity Sales. 

 

(a)            If,
at any time while this Note is outstanding, the Company sells or grants any option to purchase or sells or grants any right to
reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any
Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per share
that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances,
collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued
shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange
prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled
to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance shall
be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price
shall be reduced to equal the Base Conversion Price. Such adjustments shall be made whenever such Common Stock or Common Stock
Equivalents are issued.

 

(b)            Notwithstanding
the foregoing, no adjustment will be made under this Section 7.3 in respect of an Exempt Issuance. The Company shall
notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents
subject to this Section 7.3, indicating therein the applicable issuance price, or applicable reset price, exchange
price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes
of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 7.3, upon
the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion
Price on or after the date of such Dilutive Issuance.

 

(c)            Calculations.
All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case
may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

    	-15-

    	 

    

7.4            Notices
of Record Date, Etc. In the event of:

 

(a)            Any
taking by the Company of a record of the holders of any class of securities of the Company for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a cash dividend payable out of earned surplus at the same rate as
that of the last such cash dividend theretofore paid) or other distribution or any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities or property, or to receive any other right; or

 

(b)            Any
capital reorganization of Company, any reclassification or recapitalization of the capital stock of Company or any transfer of
all or substantially all of the assets of the Company to any other Person or any consolidation or merger involving the Company;
or

 

(c)            Any
voluntary or involuntary dissolution, liquidation or winding-up of the Company,

 

the Company will mail to the
Holder at least ten (10) days prior to the earliest date specified therein, a notice specifying (A) the date on which any such
record is to be taken for the purpose of such dividend, distribution or right and the amount and character of such dividend, distribution
or right; and (B) the date on which any such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation
or winding-up is expected to become effective and the record date for determining shareholders entitled to vote thereon.

 

7.5            Reservation
of Stock Issuable Upon Conversion. The Company shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock for the purpose of effecting the conversion of this Note such number of its shares of Common Stock
as shall from time to time be sufficient to effect the conversion of this Note; and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the conversion of the entire outstanding principal amount of
this Note, without limitation of such other remedies as shall be available to the Holder of this Note, the Company will use its
best efforts to take such corporate action as may, in the opinion of counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such purposes.

 

8.            Successors
and Assigns. Subject to the restrictions on transfer described in Sections 10 and 11, the rights and obligations
of Company and the Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the
parties.

 

9.            Waiver
and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of Company and the
holders of a majority in principal amount of the Notes.

 

    	-16-

    	 

    

10.            Transfer
of this Note or Securities Issuable on Conversion Hereof. With respect to any offer, sale or other disposition of this
Note or securities into which such Note may be converted, the Holder will give written notice to the Company prior thereto, describing
briefly the manner thereof, together with a written opinion of the Holder’s counsel, or other evidence if reasonably satisfactory
to the Company, to the effect that such offer, sale or other distribution may be effected without registration or qualification
(under any federal or state law then in effect). Upon receiving such written notice and reasonably satisfactory opinion, if so
requested, or other evidence, the Company, as promptly as practicable, shall notify the Holder that the Holder may sell or otherwise
dispose of this Note or such securities, all in accordance with the terms of the notice delivered to Company. If a determination
has been made pursuant to this Section 10 that the opinion of counsel for the Holder, or other evidence, is not reasonably
satisfactory to the Company, the Company shall so notify the Holder promptly after such determination has been made. Each Note
thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions
on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such
legend is not required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions
to its transfer agent in connection with such restrictions. Subject to the foregoing transfers of this Note shall be registered
upon registration books maintained for such purpose by or on behalf of the Company as provided in the Securities Purchase Agreement.
Prior to presentation of this Note for registration of transfer, the Company shall treat the registered Holder hereof as the owner
and the Holder of this Note for the purpose of receiving all payments of principal and interest hereon and for all other purposes
whatsoever, whether or not this Note shall be overdue and the Company shall not be affected by notice to the contrary.

 

11.            Assignment
by the Company. Neither this Note nor any of the rights, interests or obligations hereunder may be assigned, by operation
of law or otherwise, in whole or in part, by Company without the prior written consent of the Holder.

 

12.            Notices.
All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall in writing
and faxed, mailed or delivered to each party at the respective addresses of the parties as set forth in the Securities Purchase
Agreement, or at such other address or facsimile number as the Company shall have furnished to Holder in writing. All such notices
and communications shall be effective (i) when sent by Federal Express or other overnight service of recognized standing, on the
Business Day following the deposit with such service; (ii) when mailed, by registered or certified mail, first class postage prepaid
and addressed as aforesaid through the United States Postal Service, upon receipt; (iii) when delivered by hand, upon delivery;
and (iv) when faxed, upon confirmation of receipt.

 

13.            Secured
Obligation. The obligations of the Company under this Note are secured by all assets of the Company and pursuant to the
Security Agreement between the Company and the Secured Parties (as defined therein).

 

14.            Pari
Passu Notes. This Note ranks pari passu with all other Notes now or hereafter issued in connection with the
Memorandum. The Holder acknowledges and agrees that the payment of all or any portion of the outstanding principal amount of this
Note and all interest hereon shall be pari passu in right of payment and in all other respects to the other Notes.
In the event the Holder receives payments in excess of its pro rata share of the Company’s payments to the holders of all
of the Notes, then the Holder shall hold in trust all such excess payments for the benefit of the holders of the other Notes and
shall pay such amounts held in trust to such other holders upon demand by such holders.

 

    	-17-

    	 

    

15.            Payment.
Payment shall be made in lawful tender of the United States.

 

16.            Usury.
In the event any interest is paid on this Note which is deemed to be in excess of the then legal maximum rate, then that portion
of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal
and applied against the principal of this Note.

 

17.            Waivers.
The Company hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and
all other notices or demands relative to this instrument.

 

18.            Governing
Law. This Note and all actions arising out of or in connection with this Note shall be governed by and construed in accordance
with the laws of the State of California, without regard to the conflicts of law provisions of the State of California, or of any
other state.

 

[signature page follows]

 

    	-18-

    	 

    

IN WITNESS WHEREOF,
the Company has caused this Note to be issued as of the date first written above.

 

 

 

	 	BALQON CORPORATION, 
 a Nevada corporation
	 	 
	 	By:  /s/ Balwinder Samra          
	 	       Balwinder Samra, Chief Executive Officer

 

 

    	-19-

    	 

    

 

 

Schedule
A

 

Certain Senior
Indebtedness

 

1.            Indebtedness
of the Company incurred pursuant to those certain 10% Senior Secured Subordinated Convertible Debentures initially due on September
30, 2012 issued by the Company pursuant to the terms of the Company’s Confidential Private Placement Memorandum dated May
25, 2010, as amended by Supplement No. 1 to Confidential Private Placement Memorandum dated July 21, 2010. As of the date of this
Note, there is $775,000 in outstanding principal under these 10% Senior Secured Subordinated Convertible Debentures.

 

2.            Indebtedness
of the Company incurred pursuant to those certain 10% Secured Subordinated Convertible Promissory Notes initially issued on April
30, 2012 issued by the Company pursuant to the terms of certain Amendment and Exchange Agreements dated March 31, 2012.  As
of the date of this Note, there is $891,000 in outstanding principal under these 10% Secured Subordinated Convertible Promissory
Notes.

 

3.            Indebtedness
of the Company incurred pursuant to the Company’s agreement with Bridge Bank, National Association, as such agreement may
be amended from time to time.Exhibit 10.6

 

 

NEITHER THESE SECURITIES NOR THE SECURITIES
ISSUABLE UPON THE EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS. THE SECURITIES REPRESENTED HEREBY MAY NOT BE EXERCISED, OFFERED, SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED (EACH A “TRANSFER”) EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSFER NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (B) TO THE EXTENT THE TRANSFER DOES NOT CONSTITUTE AND WILL NOT RESULT IN A VIOLATION OF
APPLICABLE FEDERAL OR STATE SECURITIES LAWS, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT (TO THE
EXTENT REQUESTED BY COUNSEL OF THE COMPANY), THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THE
HOLDER HEREOF AGREES THAT IT WILL DELIVER, OR CAUSE TO BE DELIVERED, TO EACH PERSON TO WHOM THE SECURITIES HEREBY REPRESENTED ARE
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

 

STOCK PURCHASE WARRANT

  

BALQON CORPORATION

 

	Warrant No. M2-[___]	Original Issue Date: May 18, 2012

 

THIS CERTIFIES that,
for value received, [___________](the “Holder”), is entitled, upon the terms and subject to the conditions hereinafter
set forth, to subscribe for and purchase, from BALQON CORPORATION, a Nevada corporation (the “Company”), at
any time immediately after the Original Issue Date upon the terms and subject to the conditions set forth herein, from the Company,
[_________________] ([___________]) shares of Common Stock of the Company. The Exercise Price of one share of Common Stock under
this Warrant shall be $0.40, subject to adjustment as provided herein. If the purchase rights represented by this Warrant are not
exercised before the close of business on March 31, 2015, this Warrant shall be void. This Warrant was issued by the Company
pursuant to the terms and conditions contained in that certain Securities Purchase Agreement between the original Holder and the
Company (the “Securities Purchase Agreement”). The term “Warrant” as used herein shall include
this Warrant, which is one of a series of warrants issued pursuant to the terms and conditions contained in the Company’s
Confidential Private Placement Memorandum dated March 21, 2012 (“Memorandum”). This Warrant, together with the
similar Warrants issued in exchange for warrants initially issued pursuant to the Memorandum, are collectively referred to herein
as the “Warrants”. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them as
set forth in the Securities Purchase Agreement or the 10% Secured Subordinated Convertible Promissory Notes issued in exchange
of the 10% Subordinated Convertible Promissory Notes initially issued pursuant to the terms of the Memorandum.

 

    	-1-

    	 

    

1.            Title
of Warrant. Prior to the expiration hereof and subject to compliance with applicable laws, this Warrant and all rights
hereunder are transferable, in whole or in part, at the office or agency of the Company, referred to in Section 2 hereof,
by the holder hereof in person or by duly authorized attorney, upon surrender of this Warrant together with the Assignment Form
annexed hereto properly endorsed.

 

2.            Exercise
of Warrant.

 

(a)            The
purchase rights represented by this Warrant are exercisable by the Holder by the surrender of this Warrant and the Notice of Exercise
annexed hereto duly completed and executed on behalf of the Holder, at the office of the Company (or such other office or agency
of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the
Company), upon payment in cash, certified check or wire transfer of funds, of the aggregate Exercise Price for that number of Warrant
Shares then being purchased.

 

(b)            This
Warrant shall be deemed to have been exercised immediately prior to the close of business on the Exercise Date, and the person
entitled to receive the shares of Common Stock issuable upon such exercise shall be treated for all purposes as the holder of record
of such shares as of the close of business on such date. As promptly as practicable on or after such date and in any event within
ten (10) days thereafter, the Company at its expense shall issue and deliver to the person or persons entitled to receive the same
a certificate or certificates for the number of shares issuable upon such exercise. In the event that this Warrant is exercised
in part, the Company at its expense will execute and deliver a new Warrant of like tenor exercisable for the number of shares for
which this Warrant may then be exercised. Each exercise hereof shall constitute the reaffirmation by the holder hereof that the
representations and warranties contained in Section 3.2 of the Securities Purchase Agreement are true and correct in
all material respects with respect to the Holder of the Warrant as of the time of such exercise. “Exercise Date” when
used herein means the date on which the Holder shall have delivered to the Company (i) this Warrant and the Notice of Exercise
annexed hereto duly completed and executed on behalf of the Holder and (ii) payment in cash, certified check or wire transfer of
funds.

 

3.            No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. With respect to any fraction of a share called for upon the exercise of this Warrant, an amount equal to such
fraction multiplied by the then current price at which each share may be purchased hereunder shall be paid in cash to the holder
of this Warrant.

 

4.            Charges,
Taxes and Expenses. Issuance of certificates for shares of Common Stock upon the exercise of this Warrant shall be made
without charge to the holder hereof for any issue or transfer tax or other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of
the holder of this Warrant or in such name or names as may be directed by the holder of this Warrant; provided, however, that in
the event certificates for shares of Common Stock are to be issued in a name other than the name of the holder of this Warrant,
this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the holder
hereof; and provided further, that upon any transfer involved in the issuance or delivery of any certificates for shares of Common
Stock, the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental
thereto. The Holder of the Warrant shall be responsible for income taxes due under federal, state, or other law, if any, if any
such tax is due.

 

    	-2-

    	 

    
 

 

5.            No
Rights as Stockholders. This Warrant does not entitle the holder hereof to any voting rights or other rights as a stockholder
of the Company prior to the exercise thereof. Nothing in this Warrant shall be construed to give any person, firm or corporation
(other than the Company and the Holder of this Warrant) any legal or equitable right, remedy or claim, it being agreed that this
Warrant shall be for the sole and exclusive benefit of the Company and the Holder of this Warrant.

 

6.            Exchange
and Registry of Warrant. This Warrant is exchangeable, upon the surrender hereof by the registered holder at the above-mentioned
office or agency of the Company, for a new Warrant of like tenor and dated as of such exchange. The Company shall maintain at the
above-mentioned office or agency a registry showing the name and address of the registered holder of this Warrant. This Warrant
may be surrendered for exchange, transfer or exercise, in accordance with its terms, at such office or agency of the Company, and
the Company shall be entitled to rely in all respects, prior to written notice to the contrary, upon such registry.

 

7.            Loss,
Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and
cancellation of this Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor and dated as of such
cancellation, in lieu of this Warrant.

 

8.            Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall be a Saturday or a Sunday or shall be a legal holiday, then such action may be taken or such right may
be exercised on the next succeeding day not a legal holiday.

 

9.            Transferability
and Nonnegotiability of Warrant. This Warrant may not be transferred or assigned in whole or in part without compliance
with all applicable federal and state securities laws by the transferor and the transferee (including the delivery of investment
representation letters and legal opinions reasonably satisfactory to the Company, if such are requested by the Company). Subject
to the provisions of this Warrant with respect to compliance with the Securities Act, title to this Warrant may be transferred
by endorsement (by the Holder executing the Assignment Form annexed hereto) and delivery in the same manner as a negotiable instrument
transferable by endorsement and delivery.

 

    	-3-

    	 

    

10.            Compliance
With Securities Laws.

 

(a)            The
Holder of this Warrant represents and warrants that this Warrant and the shares of Common Stock to be issued upon exercise hereof
are being acquired solely for the Holder’s own account and not as a nominee for any other party, and for investment, and
that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Common Stock to be issued upon exercise
hereof except under circumstances that will not result in a violation of the Securities Act or any state securities laws. Upon
exercise of this Warrant, the Holder shall, if requested by the Company, confirm in writing, in a form satisfactory to the Company,
that the shares of Common Stock so purchased are being acquired solely for the Holder’s own account and not as a nominee
for any other party, for investment, and not with a view toward distribution or resale.

 

(b)            This
Warrant and all shares of Common Stock issued upon exercise hereof shall be stamped or imprinted with a legend in substantially
the following form (in addition to any legend required by state securities laws):

 

NEITHER THESE SECURITIES NOR
THE SECURITIES ISSUABLE UPON THE EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. THE SECURITIES REPRESENTED HEREBY MAY NOT BE EXERCISED,
OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED (EACH A “TRANSFER”) EXCEPT (A) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSFER NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (B) TO THE EXTENT THE TRANSFER DOES NOT CONSTITUTE AND WILL
NOT RESULT IN A VIOLATION OF APPLICABLE FEDERAL OR STATE SECURITIES LAWS, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT (TO THE EXTENT REQUESTED BY COUNSEL OF THE COMPANY), THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THE HOLDER HEREOF AGREES THAT IT WILL DELIVER, OR CAUSE TO BE DELIVERED, TO EACH PERSON TO
WHOM THE SECURITIES HEREBY REPRESENTED ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THESE SECURITIES
AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED
BY SUCH SECURITIES.

 

11.            Early
Termination; Anti-Dilution and Reclassification.

 

(a)            Merger,
Sale of Assets, etc. If all or any portion of this Warrant is exercised subsequent to a merger, consolidation, exchange
of shares, reorganization, or other similar event (“Change in Control”) occurring after the date hereof, as
a result of which shares shall be changed into cash, other property, or the same or a different number of shares of the same or
another class or classes of securities of the Company or another entity, the Holder exercising this Warrant shall receive, for
the exercise price, the aggregate amount of cash or other property and the aggregate number of shares and class of securities which
the Holder would have received if this Warrant was exercised immediately before the Change in Control. If an adjustment under this
section would create a fractional share or a right to acquire a fractional share, the fractional share will be rounded up to, and
issued as, a whole share. If, pursuant to a Change of Control event, the shares shall be exchanged solely for cash (in such case,
a “Triggering Event”), then the Company shall give the Holder written notice describing the material terms and
conditions of such impending transaction not later than ten (10) days prior to the stockholders’ meeting called to approve
such transaction (or such longer period if required by the General Corporation Law of the State of California), or ten (10) days
prior to the closing of such transaction (or such longer period if required by the General Corporation Law of the State of California),
whichever is earlier, and shall also notify the holder of this Warrant of the final approval of such transaction.

 

    	-4-

    	 

    

(b)            Reclassification,
etc. If the Company at any time shall, by subdivision, combination or reclassification of securities or otherwise, change
any of the securities to which purchase rights under this Warrant exist into the same or a different number of securities of any
class or classes, this Warrant shall thereafter be to acquire such number and kind of securities as would have been issuable as
the result of such change with respect to the securities which were subject to the purchase rights under this Warrant immediately
prior to such subdivision, combination, reclassification or other change. If shares of the Company’s Common Stock are subdivided
or combined into a greater or smaller number of shares of Common Stock, the purchase price under this Warrant shall be proportionately
reduced in case of subdivision of shares or proportionately increased in the case of combination of shares and the number of shares
of Common Stock purchasable under this Warrant shall be proportionally increased in the case of a subdivision and decreased in
the case of combination, in all cases by the ratio which the total number of shares of Common Stock to be outstanding immediately
after such event bears to the total number of shares of Common Stock outstanding immediately prior to such event.

 

(c)            Subsequent
Equity Sales.

 

(i)            If,
at any time while this Warrant is outstanding, the Company sells or grants any option to purchase, or sell or grant any right to
reprice, or otherwise dispose of or issue (or announces any offer, sale, grant or any option to purchase or other disposition)
any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock, at an effective price per
share less than the then Exercise Price (such lower price, the “Base Share Price” and such issuances collectively,
a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any
time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or
otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive
shares of Common Stock at an effective price per share that is less than the Exercise Price, such issuance shall be deemed to have
occurred for less than the Exercise Price on such date of the Dilutive Issuance), then, the Exercise Price shall be reduced and
only reduced to equal the Base Share Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents
are issued.

 

    	-5-

    	 

    

(ii)            Notwithstanding
the foregoing, no adjustments shall be made, paid or issued under this Section 11(c) in respect of an Exempt Issuance.
The Company shall notify the Holder, in writing, no later than the Trading Day following the issuance of any Common Stock or Common
Stock Equivalents subject to this Section 11(c), indicating therein the applicable issuance price, or applicable reset
price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”).
For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 11(c),
upon the occurrence of any Dilutive Issuance, after the date of such Dilutive Issuance the Holder is entitled to receive a number
of Warrant Shares based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in
the Notice of Exercise.

 

(iii)            Calculations.
All calculations under this Section 11 shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 11, the number of shares of Common Stock deemed to be issued and outstanding
as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

(d)            Cash
Distributions. No adjustment on account of cash dividends or interest on the Company’s Common Stock or other securities
purchasable hereunder will be made to the purchase price under this Warrant.

 

(e)            Authorized
Shares. The Company covenants that during the period the Warrant is outstanding, it will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares
of the Company’s Common Stock upon the exercise of the purchase rights under this Warrant.

 

12.            Miscellaneous.

 

(a)            Issue
Date. The provisions of this Warrant shall be construed and shall be given effect in all respect as if it had been issued
and delivered by the Company on the date hereof. This Warrant shall be binding upon any successors or assigns of the Company. This
Warrant shall constitute a contract under the laws of the State of California and for all purposes shall be construed in accordance
with and governed by the laws of said state.

 

(b)            Restrictions.
The holder hereof acknowledges that the Common Stock acquired upon the exercise of this Warrant may have restrictions upon its
resale imposed by state and federal securities laws.

 

(c)            Waivers
and Amendments. Any term of this Warrant may be amended with the written consent of the Company and the holders of Warrants
representing not less than a majority of the shares of Common Stock issuable under the then outstanding Warrants even without the
consent of the Holder. Any amendment effected in accordance with this Section shall be binding upon each holder of any of the Warrants,
each future holder of all such Warrants, and the Company; provided, however, that such amendment must apply to all such holders
equally and ratably in accordance with the number of shares of Common Stock issuable upon exercise of their Warrants. The Company
shall promptly give notice to all holders of Warrants of any amendment effected in accordance with this Section 12.

 

    	-6-

    	 

    

(d)            Notices.
Unless otherwise provided, any notice required or permitted under this Warrant shall be given in writing and shall be deemed effectively
given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii)
if given by telex, facsimile or e-mail, then such notice shall be deemed given upon receipt of confirmation of complete transmittal,
(iii) if given by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient
or (B) three days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally
recognized overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier. All notices
shall be addressed as follows: if to the Holder of the Warrant, at its address as set forth in the Company’s books and records
and, if to the Company, at the address as follows, or at such other address as the Holder of the Warrant, or the Company may designate
by ten days’ advance written notice to the other:

 

If to the Company:

Balqon Corporation

1420 240th Street

Harbor City, California 90710

Facsimile: (310) 326-3056

 

(e)            Binding
Agreement; Assignment. The terms and conditions of this Warrant shall inure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties. Nothing in this Warrant, express or implied, is intended to confer upon any third
party any rights, remedies, obligations, or liabilities under or by reason of this Warrant. This Warrant may not be assigned by
Holder (other than to a Related Person) without the prior written consent of the Company. “Related Person” shall
mean with respect to any Holder (i) any affiliate of such person, (ii) any investment fund, investment account or investment entity
whose investment manager, investment advisor or general partner, is such Holder or any affiliate of such Holder or any member,
partner, officer or employee of such Holder or any affiliate of such Holder, (iii) any member or partner of any Holder specified
in clause (i) or (ii) above, and (iv) any officer or employee of any person specified in clause (i), (ii) or (iii) above.

 

(signature page follows)

 

    	-7-

    	 

    

IN WITNESS WHEREOF,
BALQON CORPORATION has caused this Warrant to be executed by its officers thereunto duly authorized.

 

 

 

	 	BALQON CORPORATION
	 	By:  /s/ Balwinder
    Samra          
	 	Name: Balwinder Samra
	 	Title: President and Chief Executive Officer

 

 

 

 

 

 

Name of Holder:                                           

_______________________________

(Signature)

 

Address:                                       

                                                        

                                                        

 

 

 

Telephone:                        

 Facsimile:                         

 

 

 

    	-8-

    	 

    

 

 

NOTICE OF EXERCISE

 

To:            BALQON
CORPORATION

 

(1)            The
undersigned Holder hereby exercises its rights purchase ____________ shares of Common Stock of BALQON CORPORATION pursuant to the
provisions of Section 2(a) of the attached Warrant, and tenders herewith payment of the purchase price for such shares
in full.

 

(2)            In
exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Common Stock to be issued upon exercise
thereof are being acquired solely for the account of the undersigned and not as a nominee for any other party, and for investment,
and that the undersigned will not offer, sell or otherwise dispose of any such shares of Common Stock except under circumstances
that will not result in a violation of the Securities Act, or any applicable state securities laws.

 

(3)            In
exercising this Warrant, the undersigned hereby affirms that the representations and warranties contained in Section 3.2
of the Securities Purchase Agreement are true and correct in all material respects.

 

(4)            Please
issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name
as specified below:

 

 

 

	 	______________________________
	 	(Name)
	 	______________________________
	 	(Name)

 

 

(5)            Please
issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as
is specified below:

 

 

 

	 	______________________________
		(Name)
	 	 
	___________________	______________________________
	(Date)	(Signature)

    	-9-

    	 

    

ASSIGNMENT FORM

 

FOR VALUE RECEIVED,
the undersigned registered owner of this Warrant hereby sells, assigns and transfers unto the Assignee named below all of the rights
of the undersigned under the within Warrant, with respect to the number of shares of Common Stock set forth below:

 

	
        Name
        of Assignee

         
	
        Address

         
	
        No.
        of Shares

         

	 	 	 
	 	 	 
	 	 	 

and does hereby irrevocable
constitute and appoint _______________________ Attorney to make such transfer on the books of BALQON CORPORATION, maintained for
the purpose, with full power of substitution in the premises.

 

The undersigned also
represents that, by assignment hereof, the Assignee acknowledges that this Warrant and the shares of Common Stock to be issued
upon exercise hereof or conversion thereof are being acquired for investment and that the Assignee will not offer, sell or otherwise
dispose of this Warrant or any shares of Common Stock to be issued upon exercise hereof or conversion thereof except under circumstances
which will not result in a violation of the Securities Act or any state securities laws. Further, the Assignee has acknowledged
that upon exercise of this Warrant, the Assignee shall, if requested by the Company, confirm in writing, in a form satisfactory
to the Company, that the shares of Common Stock so purchased are being acquired for investment and not with a view toward distribution
or resale.

 

 

 

	Dated: _____________________	___________________________
	 	Signature of Holder

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