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Exhibit 10.1
 SEPARATION AGREEMENT AND  GENERAL MUTUAL RELEASE OF CLAIMS
        1. Resignation
 Resignation
 Resignation from Other Offices
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Resignation as Director
 2. Compensation
 2.1
    
    No Reduction in Salary. Notwithstanding the provisions of Section 1 above, each
component of McKinnons compensation under the Employment Agreement shall remain
unchanged for the period commencing the date hereof and continuing thereafter to and
including December 31, 2007 (the Remaining Term), which period constitutes the remaining term of
the Employment Agreement, all such amounts to be paid in accordance with the Companys normal pay
policies applicable to senior officers of the Company; provided, however, that the Company may not
declare a moratorium on any payment hereunder to McKinnon as part of cash management by the
Company, or any other reason, without McKinnons prior written consent. All compensation
under the Employment Agreement that has been accrued but is, as of the date of this Agreement
unpaid, as well as all subsequent payments that may become accrued and not paid, shall be paid to
McKinnon as soon as reasonably practicable, taking into account the Companys available cash and
other operating requirements, but in no event shall such sums be paid later than the first to occur
of (i) the consummation of a financing transaction in which at least $2,000,000. gross proceeds are
received by the Company and (ii) August 31, 2007 All sums paid hereunder shall be subject to
appropriate withholding as required by applicable laws and regulations.2.2
    
    Compensation. Pursuant to the Employment Agreement, McKinnon shall remain
eligible for and be entitled to any additional amounts, in the form of cash or non-cash
compensation, as the Compensation Committee of the Board, or the Board, may determine, in
their sole and absolute discretion, or nothing as the Compensation Committee of the Board
or the Board may determine.2.3
    
    Other Benefits. McKinnon shall be entitled to all other benefits not
expressly provided for herein, pursuant to the Employment Agreement for the Remaining
Term. 3. Claims
 Waiver of Claims
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Section 1542
  No Other Relief
 Indemnification by the Company
 3.5
    
    Indemnification by McKinnon. McKinnon agrees to indemnify and hold the Company
harmless from any Damages which the Company suffers as a result of the agreements made in the
Employment Agreement, this Agreement or anything else arising from, or in
connection with, McKinnons service as an employee of the Company.3.6
    
    3.6 Statutory Indemnification. Notwithstanding anything to the
contrary contained in Sections 3.4 or 3.5 of this Agreement, McKinnon shall be entitled to
indemnification in accordance with laws of the state of Nevada, and the Articles of Incorporation
and Bylaws of the Company, to the fullest extent provided by law.
 Definitions
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4




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4. Miscellaneous
 Nondisclosure
 Severability
 Disputes: Applicable Law
 Counterparts
 Authorization
 Conflicts
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Entire Agreement
  SAVE THE WORLD AIR, INC.
(Company)By
    
    -s- Joseph HelleisName: Joseph HelleisTitle: Chairman of the Board(McKinnon)-s- Bruce H. McKinnonBruce H. McKinnon
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