BALQON CORPORATION 2008 STOCK INCENTIVE PLAN STOCK OPTION GRANT NOTICE AND STOCK OPTION AGREEMENT

Balqon Corporation, a Nevada corporation (the “ Corporation ”), pursuant to its 2008 Stock Incentive Plan (the “ Plan ”), hereby grants to the holder listed below (“ Optionee ”), an option to purchase the number of shares of the Corporation’s Common Stock set forth below (the “ Option ”). This Option is subject to all of the terms and conditions as set forth herein and in the Stock Option Agreement attached hereto as Exhibit A (the “ Stock Option Agreement ”) and the Plan, which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Stock Option Grant Notice and the Stock Option Agreement.

By his or her signature, Optionee agrees to be bound by the terms and conditions of the Plan, the Stock Option Agreement and this Grant Notice. Optionee has reviewed the Stock Option Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Stock Option Agreement and the Plan. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator of the Plan upon any questions arising under the Plan or the Option.

STOCK OPTION AGREEMENT

Pursuant to the Stock Option Grant Notice (“ Grant Notice ”) to which this Stock Option Agreement (this “ Agreement ”) is attached, Balqon Corporation, a Nevada corporation (the “ Corporation ”), has granted to Optionee an option under the Corporation’s 2008 Stock Incentive Plan (the “ Plan ”) to purchase the number of shares of Common Stock indicated in the Grant Notice.

1.1            Defined Terms . Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice.

1.2            Incorporation of Terms of Plan . This Option is subject to the terms and conditions of the Plan which are incorporated herein by reference.

2.1            Grant of Option . In consideration of Optionee’s past and/or continued employment with or service to the Corporation or a Parent or Subsidiary and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the “ Grant Date ”), the Corporation irrevocably grants to Optionee the Option to purchase any part or all of an aggregate of the number of shares of Common Stock set forth in the Grant Notice, upon the terms and conditions set forth in the Plan and this Agreement. Unless designated as a Non-Statutory Option in the Grant Notice, the Option shall be an Incentive Option to the maximum extent permitted by law.

2.2            Exercise Price . The exercise price of the shares of Common Stock subject to the Option shall be as set forth in the Grant Notice, without commission or other charge; provided, however, that:

(a)           the exercise price per share shall not be less than 100% of the Fair Market Value per share of Common Stock on the Grant Date; and

(b)           if this Option is designated as an Incentive Option, the price per share of the shares subject to the Option shall not be less than the greater of (i) 100% of the Fair Market Value of a share of Common Stock on the Grant Date, or (ii) 110% of the Fair Market Value of a share of Common Stock on the Grant Date in the case of an Optionee then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Corporation or any “subsidiary corporation” of the Corporation or any “parent corporation” of the Corporation (each within the meaning of Section 424 of the Code).

2.3            Consideration to the Corporation . In consideration of the grant of the Option by the Corporation, Optionee agrees to render faithful and efficient services to the Corporation or any Parent or Subsidiary. Nothing in the Plan or this Agreement shall confer upon Optionee any right to (a) continue in the employ of the Corporation or any Parent or Subsidiary or shall interfere with or restrict in any way the rights of the Corporation and its Subsidiaries, which are hereby expressly reserved, to discharge Optionee, if Optionee is an Employee, or (b) continue to provide services to the Corporation or any Parent or Subsidiary or shall interfere with or restrict in any way the rights of the Corporation or its Parents and Subsidiaries, which are hereby expressly reserved, to terminate the services of Optionee, if Optionee is a consultant, at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Corporation, a Parent or a Subsidiary and Optionee, or (c) continue to serve as a member of the Board or shall interfere with or restrict in any way the rights of the Corporation, which are hereby expressly reserved, to discharge Optionee in accordance with the Corporation’s Bylaws.

3.1            Commencement of Exercisability .

(a)           Subject to Sections 3.3 and 5.8 , the Option shall become vested and exercisable in such amounts and at such times as are set forth in the Grant Notice.

(b)           No portion of the Option which has not become vested and exercisable at the date of Optionee’s Termination of Service shall thereafter become vested and exercisable, except as may be otherwise provided by the Administrator or as set forth in a written agreement between the Corporation and Optionee.

3.2            Duration of Exercisability . The installments provided for in the vesting schedule set forth in the Grant Notice are cumulative. Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in the Grant Notice shall remain vested and exercisable until it becomes unexercisable under Section 3.3 .

3.3            Expiration of Option . The Option may not be exercised to any extent by anyone after the first to occur of the following events:

(a)           The expiration of ten years from the Grant Date;

(b)           If this Option is designated as an Incentive Option and Optionee owned (within the meaning of Section 424(d) of the Code), at the time the Option was granted, more than 10% of the total combined voting power of all classes of stock of the Corporation or any “subsidiary corporation” of the Corporation or “parent corporation” of the Corporation (each within the meaning of Section 424 of the Code), the expiration of five years from the date the Option was granted; or

(c)           Except as set forth in a written agreement with the Corporation, the expiration of three (3) months following the date of Optionee’s termination of Service, unless such cessation occurs by reason of Optionee’s death, disability or Optionee’s discharge for cause;

(d)           The expiration of twelve (12) months following the date of Optionee’s termination of Service by reason of Optionee’s death or disability; or

(e)           The date of Optionee’s termination of Service by the Corporation or any Parent or Subsidiary by reason of Optionee’s discharge for cause.

Optionee acknowledges that an Incentive Option exercised more than three (3) months after Optionee’s termination of status as an Employee, other than by reason of death or disability, will be taxed as a Non-Statutory Option.

3.4            Special Tax Consequences . Optionee acknowledges that, to the extent that the aggregate Fair Market Value (determined as of the time the Option is granted) of all shares of Common Stock with respect to which Incentive Options, including the Option, are exercisable for the first time by Optionee in any calendar year exceeds $100,000 (or such other limitation as imposed by Section 422(d) of the Code), the Option and such other options shall be treated as not qualifying under Section 422 of the Code but rather shall be considered Non-Statutory Options. Optionee further acknowledges that the rule set forth in the preceding sentence shall be applied by taking Options and other “incentive stock options” into account in the order in which they were granted, as determined under Section 422(d) of the Code and the Treasury Regulations thereunder.

4.1            Person Eligible to Exercise . Except as provided in Sections 5.2(b) and 5.2(c) , during the lifetime of Optionee, only Optionee may exercise the Option or any portion thereof. After the death of Optionee, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3 , be exercised by Optionee’s personal representative or by any person empowered to do so under the deceased Optionee’s will or under the then applicable laws of descent and distribution.

4.2            Partial Exercise . Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3 .

4.3            Manner of Exercise . The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Plan Administrator, at the address given beneath the signature of the Corporation’s authorized officer on the Grant Notice, of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under Section 3.3 :

(a)           An exercise notice in writing signed by Optionee or any other person then entitled to exercise the Option or portion thereof, stating that the Option or portion thereof is thereby exercised, such notice complying with all applicable rules established by the Plan Administrator. Such notice shall be substantially in the form attached as Exhibit B to the Grant Notice (or such other form as is prescribed by the Plan Administrator);

(b)           Full payment for the shares of Common Stock with respect to which the Option or portion thereof is exercised in one or more of the following forms:

(i)           cash or check made payable to the Corporation;

(ii)           shares of Common Stock valued at Fair Market Value on the Exercise Date which have been owned by Optionee for at least six (6) months, duly endorsed for transfer to the Corporation;

(iii)           through the delivery of a notice that Optionee has placed a market sell order with a broker with respect to shares of Common Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price; provided, that payment of such proceeds is made to the Company upon settlement of such sale; or

(iv)     &