exv10w1



 






	 	 	 	 	 



Exhibit 10.1




Spencer Clarke LLC

Securities Investment Banking

Member NASD MSRB SIPC SIA




Confidential




January 4, 2007




Save the World Air, Inc.

5125 Lankershim Boulevard

North Hollywood, California 91601




Attention: Mr. Bruce H. McKinnon, Chief Executive Officer




Re: Consulting Agreement between Spencer Clarke LLC and Save the World Air, Inc.




Dear Mr. McKinnon:



This will confirm the terms of our mutual understanding and agreement (“Agreement”) in connection
with the efforts of Spencer Clarke LLC (“Spencer Clarke”) shall be named the exclusive advisor to
Save the World Air, Inc. (the “Company” or “SWA”).



Scope of Services. For a period of twelve (12) months beginning on January 4, 2007,
Spencer Clarke will provide the Company with financial consulting services (including but not
limited to executive search, strategic partnerships, research on new markets, strategic visibility,
etc.) to help further develop the Company’s strategic business plan.



Fee. Pursuant to this agreement the Company will employ Spencer Clarke as a financial
consultant for a non-refundable monthly fee of Twenty Thousand Dollars ($20,000) exclusive of any
actual out-of-pocket expenses approved by the Company. It is understood that the monthly fees for
the first three months totaling Sixty Thousand Dollars ($60,000) shall be due on March 1, 2007, and
the remaining nine monthly fees shall be due the first of each month thereafter.



Expenses. SWA will reimburse Spencer Clarke for those costs, fees and expenses incurred by
Spencer Clarke in connection with this engagement, including but not limited to, due diligence,
travel, communication, marketing, and the legal fees and expenses of Spencer Clarke’s counsel. SWA
will reimburse Spencer Clarke’s expenses as incurred, and it is understood that any expenditure by
Spencer Clarke on behalf of this engagement that is in excess of $2,000 will need the prior
approval of SWA prior to incurrence.



505
Park Avenue   4th Floor   New York, NY 10022

888.505.PARK(7275)   212.446.6100   FAX
212.446.6191

www.spencerclarke.com






 









 








Save the World Air, Inc.

January 4, 2007

Page 2



Indemnification. SWA shall:



(a) indemnify Spencer Clarke and hold it harmless against any losses, claims, damages or
liabilities to which Spencer Clarke may become subject arising in any manner out of or in
connection with the rendering of services by Spencer Clarke hereunder, unless it is finally
judicially determined that such losses, claims, damages or liabilities arose primarily out of the
gross negligence or bad faith of Spencer Clarke; and



(b) reimburse Spencer Clarke immediately for any legal or other expenses reasonably incurred by it
in connection with investigating, preparing to defend or defending any lawsuits or other
proceedings arising in any manner out of or in connection with the rendering of services by Spencer
Clarke hereunder; provided, however, that in the event a final judicial determination is that the
alleged losses, claims, damages or liabilities arose primarily out of the gross negligence or bad
faith of Spencer Clarke, Spencer Clarke will remit to SWA any amounts reimbursed under this
subparagraph (b). Notwithstanding anything to the contrary stated herein, in no event shall the
amount payable by Spencer Clarke hereunder exceed the Fee payable to Spencer Clarke pursuant to
this Agreement.



SWA agrees that (i) the indemnification and reimbursement commitments set forth in this paragraph
shall apply whether or not Spencer Clarke is a formal party to any such lawsuits, claims or other
proceedings, (ii) Spencer Clarke is entitled to retain separate counsel of its choice in connection
with any of the matters to which such commitments relate, and such commitments shall extend upon
the terms set forth in this paragraph to any controlling person, director, officer, employee or
agent of Spencer Clarke; provided, however, that to the extent that Spencer Clarke retains separate
counsel in connection with any matter set forth in this subparagraph (b), such counsel shall
coordinate its efforts with counsel to SWA.



Amendments. No amendment or waiver of any provision of this Agreement, or consent to any
departure by either party from any such provision, shall in any event be effective unless the same
shall be in writing and signed by the parties to this Agreement and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific purpose for which
given.



Governing Law. This Agreement shall be construed and enforced in accordance with the laws
of New York and shall inure to the benefit of, and be binding upon, Spencer Clarke and SWA and
their respective successors and assigns.




[signatures on next page]



505
Park Avenue   4th Floor   New York, NY 10022

888.505.PARK(7275)   212.446.6100   FAX
212.446.6191

www.spencerclarke.com



 









 








Save the World Air, Inc.

January 4, 2007

Page 3



If the foregoing correctly sets forth our Agreement, please sign and return the enclosed copy of
this letter.




	 	 	 	 	 
	  	Sincerely,





SPENCER CLARKE LLC

 	 
	 	By:  	/s/ Reid H. Drescher 	 
	 	 	Name:  	Reid H. Drescher 	 
	 	 	Title:  	CEO 	 
	 



ACCEPTED AND AGREED TO: as of January 4, 2007




	 	 	 	 	 
	SAVE THE WORLD AIR, INC.

 	 	 
	By:  	/s/ Bruce H. McKinnon
 	 	 
	 	Name:  	Bruce H. McKinnon 	 	 
	 	Title:  	CEO 	 	 
	 



505
Park Avenue   4th Floor   New York, NY 10022

888.505.PARK(7275)   212.446.6100   FAX
212.446.6191

www.spencerclarke.com