EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement” ) dated effective as of October 24, 2008 ( “Effective Date” ), is made and entered into by and between BALQON CORPORATION, a Nevada   corporation ( “Employer” ), and BALWINDER SAMRA ( “Executive” ).

Employer desires that Executive enter into an employment relationship with Employer in order to provide the necessary leadership and senior management skills that are important to the success of Employer. Employer believes that obtaining Executive’s services as an employee of Employer and the benefits of his business experience are of material importance to Employer and Employer’s stockholders.

NOW, THEREFORE, in consideration of Executive’s employment by Employer and the mutual promises and covenants contained herein, the receipt and sufficiency of which is hereby acknowledged, Employer and Executive intend by this Agreement to specify the terms and conditions of Executive’s employment relationship with Employer.

1.             General Duties of Employer and Executive .

(a)           Employer agrees to employ Executive and Executive agrees to accept employment by Employer and to serve Employer in an executive capacity upon the terms and conditions set forth herein. Employer hereby employs Executive as President and Chief Executive Officer of Employer as of the Effective Date, reporting to the Board of Directors of Employer (the “Board” ). Executive will also serve as Chairman of the Board.  Executive’s duties and responsibilities shall be those normally assumed by the President and Chief Executive Officer of a publicly-owned company similarly situated to Employer, as well as such other or additional duties, as may from time-to-time be assigned to Executive by the Board. Such other or additional duties shall be consistent with the senior executive functions set forth above.

(b)           While employed hereunder, Executive shall use his best efforts to obey the lawful directions of the Board. Executive shall also use his best efforts to promote the interests of Employer and to maintain and to promote the reputation of Employer. While employed hereunder, Executive shall devote his full business time, efforts, skills and attention to the affairs of Employer and faithfully perform his duties and responsibilities hereunder.

(c)           While this Agreement is in effect, Executive may from time to time engage in any activities that do not compete directly with Employer, provided that such activities do not interfere with his performance of his duties. Executive shall be permitted to (i) invest his personal assets as a passive investor in such form or manner as Executive may choose in his discretion, (ii) participate in various charitable efforts, and (iii) serve as a member of the Board of Directors of other corporations which are not competitors of Employer.

2.              Compensation and Benefits .

(a)           As compensation for his services to Employer, Employer shall pay to Executive an annual base salary of $250,000, payable in equal semimonthly payments in accordance with Employer’s regular payroll policy for salaried employees (the “Salary” ). The Compensation Committee of the Board (the “Compensation Committee” ) shall perform an annual review of Executive’s Salary based on a review of Executive’s performance of his duties and Employer’s other compensation policies. The Compensation Committee may, at its sole discretion, increase (but not decrease) the Salary at any time, and from time to time; provided , however , that commencing on the second anniversary of the Effective Date, Executive’s annual base salary shall be increased to $300,000.

(b)           In addition to the foregoing Salary, Executive shall be eligible for an annual incentive bonus ( “Incentive Bonus” ) commencing in 2010 with respect to fiscal 2009, which Incentive Bonus shall be payable in cash, following the date on which Employer’s Form 10-K for the previous fiscal year is filed with the Securities and Exchange Commission, but in no event later than the Short Term Deferral Date as defined in Section 3(a) , based on Employer’s net revenues as shown in Employer’s Form 10-K for the previous fiscal year as compared to the internal forecasts prepared at or about the beginning of the previous fiscal year by Employer’s Chief Financial Officer and approved by Employer’s Audit Committee, as follows:  (A) if the net revenues forecast is met, the Incentive Bonus shall equal twenty-five percent (25%) of Executive’s Salary, and (B)  if the net revenues forecast is exceeded by more than fifty percent (50%), the Incentive Bonus shall equal fifty percent (50%) of Executive’s Salary.

(c)           Upon Executive’s furnishing to Employer customary and reasonable documentary support (such as receipts or paid bills) evidencing costs and expenses incurred by him in the performance of his services and duties hereunder (including, without limitation, travel and entertainment, cellular telephone, computer and other home office expenses) and containing sufficient information to establish the amount, date, place and essential character of the expenditure, Executive shall be reimbursed for such costs and expenses in accordance with Employer’s normal expense reimbursement policy.

(d)           Executive shall be entitled to participate in the medical (including hospitalization), dental, life and disability insurance plans, to the extent offered by Employer, and in amounts consistent with Employer’s policy for other senior executive officers of Employer, with premiums for all such insurance for Executive and his dependents to be paid by Employer, subject to customary employee contributions.

(e)           Executive shall have the right to participate in any additional compensation, benefit, bonus, pension, stock option, stock purchase, 401(k) or other plan or arrangement of Employer now or hereafter existing for the benefit of other senior executive officers of Employer, to the extent offered by Employer, and in amounts consistent with the Employer’s policy.

(f)            Executive shall be entitled to vacation (but in no event less than six (6) weeks per year), holiday and other paid or unpaid leaves of absence consistent with Employer’s normal policies for other senior executive officers of Employer or as otherwise approved by the Board.  Executive shall be entitled to accrue vacation time for one (1) year.  If Executive does not take the accrued vacation during the following year, he shall be paid for the unused vacation at his Salary rate then in effect.

(g)           Executive shall be provided a monthly car allowance in the amount of at least $750.00.

(h)           Employer shall purchase and maintain in effect a directors’ and officers’ liability insurance policy with a minimum limit of liability of $3,000,000 and shall enter into an indemnification agreement with Executive upon terms and conditions mutually acceptable to Employer and Executive.

(i)            Employer agrees, by action of the Nominating and Corporate Governance Committee of the Board, to nominate Executive as a Class III member of the Board and seek stockholder approval of such nomination at the 2009 annual meeting of the stockholders of Employer.

3.             Deferred Compensation .

(a)           This Agreement is not intended to provide for any deferral of compensation payable during Executive’s employment pursuant to Section 409A of the Internal Revenue Code (the “Code” ) and, accordingly, any compensation paid to Executive pursuant to this Agreement during Executive’s employment is intended to be paid not later than the later of:  (i) the fifteenth (15 ^th ) day of the third (3 ^rd ) month following the Executive’s first (1 ^st ) taxable year in which such benefit is no longer subject to a substantial risk of forfeiture, and (ii) the fifteenth (15 ^th ) day of the third (3 ^rd ) month following the first (1 ^st ) taxable year of Employer in which such benefit is no longer subject to a substantial risk of forfeiture, as determined in accordance with Section 409A of the Code and any Treasury Regulations and other guidance issued thereunder.  The date determined under this subsection is referred to as the “Short-Term Deferral Date.”   Notwithstanding anything to the contrary herein, in the event that any compensation paid pursuant to this Agreement during Executive’s employment is not actually or constructively received by Executive on or before the Short-Term Deferral Date, to the extent such compensation, or any portion thereof, constitutes a deferral of compensation subject to Code Section 409A, then, subject to Section 3(b) , such benefit shall be paid upon Executive’s separation from service, with respect to Employer and its affiliates within the meaning of Section 409A of the Code.

(b)           In the event that Executive is a “specified employee,” as defined in Section 409A(a)(2)(B)(i) of the Code as of the date of any separation from service with respect to Employer and its affiliates, no payment of deferred compensation subject to Code Section 409A may be made to Executive before the date that is six (6) months after the date of separation from service (or, if earlier, the date of death of the specified employee), and, in such case, any payments shall be accumulated and paid on the first date of the seventh (7 ^th ) month following separation from service; provided , however , that any payment or portion thereof which is subject to an exemption for separation pay to specified employees as provided under Treasury Regulation § 1.409A, or is subject to any other exemption provided under Treasury Regulation § 1.409A allowing for payment to a specified employee prior to the date that is six (6) months after the date of separation from service, may be paid to Executive upon separation from service.

4.              Preservation of Business; Fiduciary Responsibility .  Executive shall use his best efforts to preserve the business and organization of Employer and to preserve the business relations of Employer. So long as the Executive is employed by Employer, Executive shall observe and fulfill proper standards of fiduciary responsibility attendant upon his service and office.

5.              No Specified Term; Employment at Will .  The employment relationship between Employer and Executive pursuant to this Agreement is not for any specific term, but may be terminated with or without cause, by Employer or by Executive, at any time and for any reason, subject to the rights and obligations of Employer and Executive as set forth in this Agreement.  Any modification to the nature of the at-will employment relationship between Employer and Executive must be made in writing, and must be signed by Executive and by Employer.

6.              Termination .  Employer or Executive may terminate Executive’s employment under this Agreement at any time, but only on the following terms:

(a)           Employer may terminate Executive’s employment under this Agreement at any time for “Due Cause” (as defined in Appendix I attached hereto and incorporated herein by this reference) upon the good faith determination by the Board that Due Cause exists for the termination of the employment relationship.

(b)           If Executive is incapacitated by accident, sickness or otherwise so as to render Executive either:  (i)  unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months is receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of Employer; and such incapacity is confirmed by the U.S. Social Security Administration or in accordance with a disability insurance program maintained by Employer, Employer may terminate Executive’s employment under this Agreement upon giving Executive or his legal representative written notice at least thirty (30) days prior to the termination date, subject to the provisions of Section 7(b) .   Notwithstanding anything expressed or implied above to the contrary, Employer will fully comply with its obligations under the Americans with Disabilities Act as well as any other applicable federal, state, or local law, regulation, or ordinance governing the protection of qualified individuals with disabilities as well as Employer’s obligation to provide reasonable accommodation thereunder .

(c)           This Agreement shall terminate immediately upon Executive’s death, subject to the provisions of Section 7(b) .

(d)           Subject to the provisions of Section 7(c) , Employer may terminate Executive’s employment under this Agreement at any time for any reason whatsoever, even without Due Cause, by giving a written notice of termination to Executive, in which case the employment relationship shall terminate immediately upon the giving of the notice. If Employer terminates the employment of Executive other than (i) pursuant to Section 6(a) for Due Cause, (ii) due to incapacity pursuant to Section 6(b) or due to Executive’s death pursuant to Section 6(c) , or (iii) Executive’s retirement, then the action by Employer, unless consented to in writing by Executive, shall be deemed to be a constructive termination by Employer of Executive’s employment (a “Constructive Termination” ), and, in that event, Executive shall be entitled to receive the compensation set forth in Section 7(c) .

(e)           Executive may terminate this Agreement at any time within ninety (90) days of the occurrence of any event comprising “ Good Reason ” (as defined in Appendix I attached hereto and incorporated herein by this reference); provided , however , that Executive provides Employer with written notice of the event or condition constituting Good Reason within thirty (30) days of the initial existence of such event or condition, and that Employer shall have a period of thirty (30) days to cure such event or condition and, in the event that Employer fails to cure such event or condition, Executive shall be entitled to receive the compensation set forth in Section 7(c) .

7.              Effect of Termination .

(a)           If the employment relationship is terminated (i) by Employer for Due Cause pursuant to Section 6(a) , (ii) by Executive breaching this Agreement by refusing to continue his employment, or (iii) by Executive without Good Reason, then all compensation and benefits shall cease as of the date of termination, other than: (A) those benefits that are provided by retirement and benefit plans and programs specifically adopted and approved by Employer for Executive that are earned and vested by the date of termination; (B) Executive’s pro rata annual Salary (as in effect as of the date of termination, payable in the manner as prescribed in the first sentence of Section 2(a) through the date of termination; (C) any stock options which have vested as of the date of termination pursuant to the terms of the agreement granting the options; and (D) accrued vacation as required by California law.

(b)           If Executive’s employment relationship is terminated due to Executive’s incapacity pursuant to Section 6(b) or due to Executive’s death pursuant to Section 6(c) , Executive or Executive’s estate or legal representative, shall, subject to Section 3 of this Agreement, be entitled to (i) those benefits that are provided by retirement and benefits plans and programs specifically adopted and approved by Employer for Executive that are earned and vested at the date of termination, (ii) a prorated Incentive Bonus, payable in the manner as prescribed in the second sentence of Section 2(b) (to the extent Executive would otherwise be eligible) for the fiscal year in which incapacity or death occurs, and (iii) a lump-sum cash payment, payable within ten (10) business days of separation from service due to death or disability, but in any event, not later than the Short-Term Deferral Date, in an amount equal to one (1) year of Executive’s then current annual Salary as set forth in Section 2(a) .

(c)           In the event of a termination of this Agreement as a result of Constructive Termination, or by Executive for Good Reason, then Employer shall, subject to Section 3 of this Agreement:

(i)            pay to Executive on the date of termination his Salary in effect as of the date of termination through the end of the month during which the termination occurs plus credit for any vacation earned but not taken;

(ii)            pay to Executive on the first business day following the expiration of the revocation period described in Section 7(d) (provided Executive has not tendered his revocation), but in any event, not later than the Short-Term Deferral Date, as severance pay an amount equal to (A) two (2) times Executive’s then current annual Salary, and (B) two (2) times the amount of average Incentive Bonus paid during the two (2) calendar years preceding the date of termination.

(iii)           pay to Executive  the prorated Incentive Bonus, to the extent Executive would otherwise be eligible for any, for the fiscal year during which termination occurs, payable as provided in Section 2(a) ;

(iv)           maintain, at Employer’s expense, in full force and effect, for Executive’s continued benefit, all medical insurance to which Executive was entitled immediately prior to the date of termination until the earliest of (i) eighteen (18) months or (ii) the date or dates that Executive’s continued participation in Employer’s medical insurance plan is not possible under the terms of the plans (the earliest of (i) and (ii) is referred to herein as the “Benefits Date”). If Employer’s medical insurance plan does not allow Executive’s continued participation in the plan, then Employer will pay to Executive, in monthly installments, from the date on which Executive’s participation in the medical insurance is prohibited until the date that is eighteen (18) months after the date of termination, an amount equal to the monthly premium or premiums for COBRA coverage with respect to Executive for the discontinued medical insurance; and

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