10-Q












Exhibit 10.2  



YA GLOBAL INVESTMENTS,
L.P. 

101 Hudson Street,
Suite 3700
Jersey City, NJ 07302 



September 22, 2008 



Global Energy, Inc.

Migdal Aviv

7 Abba Hillel Street

Ramat Gan, 52520

Israel

Attention: Asi Shalgi





Dear Mr. Shalgi: 



        Reference
is made to the letter agreement between Global Energy, Inc. (the
“Company”) and YA Global Investments, L.P. (the “Buyer”)
dated July 15, 2008 (the “Original Agreement”) concerning that certain
Securities Purchase Agreement dated July 6, 2007 (the “Securities Purchase
Agreement”) between the Company and the Buyer and the secured convertible
debentures (collectively, the “Debentures”) and warrants (the
“Warrants”) issued thereunder. Global Energy has requested that certain
changes be made to the Original Agreement. The parties desire to make such changes as set
forth herein and the parties intend for this letter to update and supersede the Original
Agreement. 



        The
parties agree that the table below sets forth the correct amounts outstanding under the
Debentures as of the date listed below: 







	Issuance Date
	Outstanding Principal Amount
	Accrued and Unpaid Interest 
 (as of August 31, 2008)

			
			
			
			 
	July 6, 2007	 	 	$	   500,000	 	$	  57,808.22	 
	October 23, 2007	 	 	$	 1,500,000	 	$	 128,630.14	 
	December 7, 2007	 	 	$	 1,000,000	 	$	  73,424.66	 
	March 20, 2008	 	 	$	   500,000	 	$	  22,465.75	 
	May 13, 2008	 	 	$	   500,000	 	$	  19,178.08	 
	TOTAL 	  	  	$ 	 4,000,000 	  	$ 	 301,506.85 	  














All capitalized terms not otherwise
defined herein shall have the meaning assigned to them in the Debentures or the Securities
Purchase Agreement as applicable. 



        The
Company is seeking to raise additional financing by selling units consisting of common
stock and warrants (the “Offering”) pursuant to the terms of the private
placement memorandum dated July 17, 2008 as supplemented by Supplement No. 1 dated
September 22, 2008, each attached hereto as Exhibit A (collectively, the
“Private Placement Memorandum”). The Buyer hereby consents to the Company
conducting and closing on the Offering in accordance with the terms set forth in the
Private Placement Memorandum, provided that (i) the gross proceeds of the Offering are at
least $1,500,000 (“Minimum Offering Amount”), and (ii) the Company closes
on the Minimum Offering Amount on or before October 31, 2008, unless extended in writing
by the Buyer (the “Closing Deadline”). If the Company achieves the
Minimum Offering Amount by the Closing Deadline, the Company may keep the offering open
until November 28, 2008. 



	I.  	Agreements
Effective On Execution. The Buyer and the Company agree to the
               following, which shall be effective as of the date of execution of this
letter                agreement: 






	 	1. 	The
Buyer hereby defers the payment of Interest that was or will be due on the
               January 31, 2008, April 30, 2008, July 31, 2008 until October 31, 2008,
provided                however, that if the Minimum Offering Amount is successfully
raised by the                Closing Deadline, then the interest payments thereafter
shall be governed by                Section II.1 below. In the event that the Minimum
Offering does not close by the                Closing Deadline, all accrued and unpaid
interest shall be due and payable on                October 31, 2008, and thereafter in
accordance with the terms of the Debentures. 






	 	2. 	The
Buyer hereby defers the payment of Installment Amounts that were or will be
               due on the July 31, 2008, August 31, 2008 and September 30, 2008
Installment                Dates until October 31, 2008, provided however, in the event
that the Minimum                Offering Amount is successfully raised by the Closing
Deadline, then such                Installment Amounts shall be further deferred in
accordance with Section II.2.                below. 






	 	3. 	The
Interest Rate on the Debentures shall be increased from 10% to 12% as of the
               date hereof. 






	 	4. 	In
consideration of the Buyer’s further accommodations herein (in addition
               to any consideration provided in connection with the Original Agreement),
the                Company shall issue the Buyer 1,000,000 restricted shares of the
Company’s                common stock. 






	II.  	Agreements
Effective upon Effective Date. The Buyer and the Company                hereby agree
to the following, provided however, that the agreements contained                in this
section shall only become effective if and when the Company successfully
               raises the Minimum Offering Amount by the Closing Deadline and these
agreements                shall supersede those in Section II of the Original Agreement
(if accomplished,                such date of accomplishment being referred to as the
“Effective                Date”): 














	 	1. 	Payments. 






	 	(a) 	Interest.
The Company shall pay an amount equal $180,000 of accrued and unpaid
               interest directly from the gross proceeds of the Offering upon reaching
the                Minimum Offering Amount. In addition, the Company shall pay 10% of the
gross                proceeds from all closings of the Offering above between $2,200,000
and                $3,900,000.  






	 	(b) 	Thereafter
the Company shall make Installment Payments in the total amount set                forth
below. The Buyer shall have the right to allocate each Installment Payment
               towards Principal and accrued interest over each of the Debentures as it
sees                fit and shall provide such allocation to the Company after receipt of
the                Installment Payment. On each Installment Date the Company shall pay
the amount                due on the 5th day (or if such date is not a
Business Day, the next                Business Day) of each month immediately following
the end of the month of each                Installment Payment (the “Installment
Payment Date”) by paying                the Company Redemption Amount on the
Installment Date in accordance with Section                3(c) of the Debenture and by
converting the Company Conversion Amount as of the                Installment Payment
Date in accordance with Section 3(b) of the Debenture. The                Company
Conversion Amount on each Installment Payment Date (through and                including
the September 2009 Installment Payment) shall be limited to the amount
               that can be paid without violating the Equity Conditions and the
Installment                Volume Limitation as set forth in Section 3(b), unless such
conditions are                waived by the Buyer. The Buyer, in its sole discretion, may
waive any portion of                any Installment Payment. The Installment Payment
chart below shall supersede and                replace the definitions in the Debenture
of the Interest Payment Dates,                Installment Dates, and Installment Amount.  









	Installment Payment
	Company Redemption Amount
	Company Conversion Amount

			
			
			
			 
	November 2008	 	 	$	 0 plus Variable Redemption Amount	 	$	 25,000	 
	December 2008	 	 	$	 0 plus Variable Redemption Amount	 	$	 35,000	 
	January 2009	 	 	$	 10,000 plus Variable Redemption Amount	 	$	 50,000	 
	February 2009	 	 	$	 10,000 plus Variable Redemption Amount	 	$	 60,000	 
	March 2009	 	 	$	 10,000 plus Variable Redemption Amount	 	$	 70,000	 
	April 2009	 	 	$	 10,000 plus Variable Redemption Amount	 	$	 70,000	 
	May 2009	 	 	$	 10,000 plus Variable Redemption Amount	 	$	 70,000	 
	June 2009	 	 	$	 10,000 plus Variable Redemption Amount	 	$	 75,000	 
	July 2009	 	 	$	 10,000 plus Variable Redemption Amount	 	$	 75,000	 
	August 2009	 	 	$	 10,000 plus Variable Redemption Amount	 	$	 75,000	 
	September 2009	 	 	$	 10,000 plus Variable Redemption Amount	 	$	 75,000	 
	Each Month Thereafter	 	 	Installment Amount of $225,000, which may be paid at the Company's discretion,  by a Company
Redemption,  a Company  Conversion,  or a combination of both, in accordance  with the terms and conditions for the payment of Installment Amounts set forth in the Debentures.


















Where the Variable Redemption Amount
shall be equal to 4% of the difference between the total gross proceeds raised in the
Offering and $2,200,000. 



	 	(c)	In
addition to the Installment Payments set forth above, the Company shall pay           to
the Buyer on each Installment Payment Date an additional amount equal to 50%           of
all cash flows generated by the Company’s Ethiopian subsidiary Global
          Energy Pacific Limited in excess of the first $700,000 in cash flow,
projections           of which are set forth on Exhibit C. The remaining portion of such
cash flows           shall be used solely for reinvestment into the Ethiopian operations.  






	 	2.	Pursuant
to Section 5 of the Debentures, the Conversion Price shall be reduced           as a
result of the issuance of shares in connection with the Offering. For           example,
if the shares are issued at a price of $0.10 per share, then the           Conversion
Price shall be reduced to $0.10. 






	 	3.	Pursuant
to Section 8 of the Warrants issued to the Buyer pursuant to the           Securities
Purchase Agreement, the exercise price of the Warrants and the number           of shares
underlying the Warrants shall be adjusted based on the exercise price           of the
warrants issued in connection with the Offering. Therefore the exercise           price
of the Buyer’s Warrants shall be reset to $0.10 per share and the           total
number of shares underlying the Buyer’s warrants shall be increased           from
600,000 to 7,500,000 shares. 






	 	4.	In
connection with the Registration Rights Agreement (“Registration           Rights
Agreement”) on July 6, 2007 between the Buyer and the Company,           the
Company has filed and obtained effectiveness of the registration statement           (the
“Registration Statement”) originally filed with the           Securities
and Exchange Commission (File number 333-150559) on May 1, 2008 to           register the
resale by the Buyer of up to 6,600,000 shares of common stock           underlying the
Debentures and Warrants. In connection with the Registration           Statement and the
Registration Rights Agreement, the Company and Buyer agree as           follows: 






	 	(a)	The
Company shall take all necessary step to maintain the effectiveness of the
          Registration Statement at all times until all shares registered have been
          resold, including, without limitation, filing, as soon as practicable within 10
          Business Days of the Effective Date, any and all supplements and amendments to
          the Registration Statement to update the Registration Statement to reflect the
          changes to the Debentures and Warrants set forth herein, and to file, in a
          timely matter, all supplements and amendments to keep current the financial
          information contained in the Registration Statement in accordance with the
rules           and regulations of the SEC.  
















	 	(b)	The
Buyer agrees that Company shall not be required to file any additional
          registration statements on behalf of the Buyer, or register the resale of any
          additional shares on behalf of the Buyer.  






	 	(c)	The
Company represents, warrants, and agrees that after the Effective Date, for           the
purposes of Rule 144, the holding period for each of the Debentures shall
          commence on the respective date that the Buyer fully paid for such Debenture,
          which are the dates referenced next to each of the Debentures in the table
          above.  






	III. 	Representations,
Warranties, and Covenants or General Effect. 






	 	1.	The
Company shall use the proceeds from the Offering in strict compliance with           the
Budget attached hereto as Exhibit B (the “Budget”). The
          Company shall not exceed the total expenses listed on the Budget by more than
5%           in any individual month, or in the aggregate at any time. The Company shall
          provide certified cash flow reports to the Buyer on the 1st and
          15th of each month which shall show actual results for each period
          that has elapsed from the date hereof compared to the same period in the
Budget.           Any violation of this covenant shall be deemed an event of default
under the           Debentures. The Company shall not use any proceeds for the Company’s
          Ethiopian subsidiaries operations without the written consent of the Buyer. 






	 	2.	The
Company hereby acknowledges, confirms and agrees that as of the date hereof,
          Company is indebted to the Buyer under the Debentures in the outstanding
          principal amount set forth in the table above, plus accrued and unpaid interest
          thereon, and any other fees, costs, expenses and other charges now or hereafter
          payable (collectively, the “Obligations”) and such Obligations
          are unconditionally owed by Company to the Buyer, without offset, defense or
          counterclaim of any kind, nature or description whatsoever.






	 	3.	The
Company hereby acknowledges, confirms and agrees that the Buyer has and           shall
continue to have valid, enforceable and perfected first-priority liens           upon and
security interests in the pledged property heretofore granted to the           Buyer
pursuant to the Security Agreement dated July 6, 2007 between the Company           and
the Buyer (the “Security Agreement”) or otherwise granted           to
or held by the Buyer. 






	 	4.	Section
II. 3. Of the Original Agreement shall be removed and no longer in           effect. 






	 	5.	Effect
of this Agreement. Except as modified pursuant hereto, no other           changes or
modifications to the Debentures, Securities Purchase Agreement, or           other
related transaction documents are intended or implied and in all other           respects
such documents are hereby specifically ratified, restated and confirmed           by all
parties hereto as of the effective date hereof. 






	 	6.	Each
party shall pay all its own costs and expenses regarding the entering of           this
Agreement. There are no other fees, charges or expenses other than as set           out
herein and in the Debentures and ancillary documents. 






[SIGNATURE PAGE
IMMEDIATELY TO FOLLOW] 













        IN
WITNESS WHEREOF, this letter agreement is executed and delivered as of the day and
year first above written. 




			GLOBAL ENERGY, INC.



By: /s/ Asi Shalgi
——————————————

Asi Shalgi
Chief Executive Officer 








			YA GLOBAL INVESTMENTS, L.P.


By:   Yorkville Advisors, LLC
Its:   Investment Manager



By: /s/ Gerald Eicke
——————————————

Gerald Eicke
Managing Member