Exhibit 10.27
**EXCLUSIVE CAPITAL RAISING AGREEMENT**
     This Exclusive Capital Raising Agreement (the “Agreement”) is entered into as of the date setforth on the signature page hereof by and between Save the World Air, Inc (“STWA”), and LondonAussie Marketing, Limited. (“Introducer”), a UK based financial consulting company, with respect tothe following:
     Introducer has indicated its desire to act as an Introducer for STWA with respect to locatingprivate equity entities or individuals (collectively, “Designated Prospects”), that are interestedin providing capital to STWA. STWA is agreeable to having an Introducer act in such capacity.
     STWA and Introducer hereby agree as follows:
 1.  Amount of Capital to be Raised:  STWA has indicated its intention toraise up to USD $10 million in a private placement. STWA grants exclusive rights toIntroducer to raise USD $5 million with private equity firms.  2.  Start and End Date of Capital Raising:  It is STWA’s intention toconclude the private placement by November 2004. STWA is not bound by this date.  3.  Terms of Capital Raising: These are as set forth in the PrivatePlacement Memorandum dated July 26, 2004.
IMPACT
Given the benefits to STWA for accessing professional private equity firms, STWA will advise itsother sources that the total amount to be raised by other sources is less than USD $5 million.This is because private equity firms have no interest in amount less than USD $5 million.
For example, if the private placement total is USD $7 million, then the Introducer is allocated USD$5 million and USD $2 million is allocated to other sources.
The Introducer can raise more than USD $5 million, and can market to others the total privateplacement. For example, the Introducer can market to Designated Prospects that the full amount ofthe private placement is available for funding. However, any amounts greater than USD 5 millionraised by the Introducer must have prior approval of both Bruce McKinnon and Eugene Eichler.
The Introducer understands that if private individuals subscribe to the whole amount, then STWA hasthe right to decide whether to go with the private investor or whether private equity funding wouldbe more or less beneficial.
 1.  STWA hereby appoints Introducer, and Introducer agrees to use its bestefforts to (a) locate, and solicit Designated Prospects, (b) prepare reports to STWAon the status of discussion with Designated Prospects and (c) devote as much time,attention and skill as may be necessary to conduct such activities properly.Introducer shall ask Eugene E. Eichler and Bruce McKinnon if they would like to attendthe introduction meetings prior to any formal presentations. Introducer shall have noright to use the STWA logo in any manner or for any purpose without the prior writtenconsent of STWA. Introducer will also comply with any other requirements reasonablyrequested by STWA. Introducer will only introduce Designated Prospects to whomIntroducer reasonably believes are “accredited investors” as defined by Rule 501 underthe Securities Act of 1933, as amended.
 

 

 2.  Designation of Designated Prospects. A private equity, businessentity or individual shall be deemed a Designated Prospect hereunder, if introduced byMark Thornton, director of the Introducer.  3.  Definition of Designated Person. A Designated Prospect is a personwho (i) is not an existing shareholder of STWA, a party to a contract with STWA or abusiness entity or individual who can be demonstrated by written materials (such assales reports) to have already been known to STWA as a potential source of financing,(ii) has not been brought or introduced to STWA by any other person in connection witha capital raising transaction, and (iii) is an “accredited investor” as defined inRule 501 under the Securities Act of 1933, as amended. A person shall cease to be aDesignated Prospect for all purposes hereof upon the date twelve months following itsor his introduction to STWA by Introducer.  4.  Effect of Direct or Indirect Introductions. A Designated Prospectincludes any person who invests in STWA through a direct or indirect introduction madeby Introducer.  5.  Independent Contractor. Introducer is and at all times shall be anindependent contractor in all matters relating to this agreement. Introducer and itsemployees are not agents of STWA for any purposes and have no power or authority,whether apparent, actual, ostensible or otherwise, to bind or commit STWA in any way.Introducer and its employees are not and shall not be employees of STWA for anypurpose and shall not be entitled to any benefits STWA provides to its employees.  6.  Introducer’s Fee. In consideration for the services performed byIntroducer hereunder, STWA shall pay to Introducer an Introducer’s fee (“Introducer’sFee”) with respect to each capital raising transaction consummated with a DesignatedProspect. The Introducer’s Fee is a cash compensation calculated as eight percent **(8%)**of the total proceeds received by STWA from Designated Prospect. Introducer’s Fee isonly upon STWA’s receipt of proceeds of a financing involving the Designated Prospect,the receipt of which STWA has the right to accept or reject, in whole or in part, inits sole and absolute discretion. STWA shall not be obligated to pay any fee toIntroducer with respect to a Designated Prospect for which a financing is notcompleted.  7.  Expenses. STWA shall not be responsible for any of the expensesIntroducer incurs in connection with Introducer’s performance of its serviceshereunder.  8.  No Obligation. Introducer acknowledges that the decision to pursuediscussions with a Designated Prospect with respect to a possible capital raisingtransaction is solely STWA’s and that STWA shall have no obligation to pursue anyDesignated Prospect that Introducer brings to STWA. Introducer agrees and understandsthat the decision to accept or reject an investment from any potential investor is forSTWA to make, in its sole and absolute discretion, including reasons related toshareholder limitations and confidentiality.  9.  Compliance with Laws. Introducer shall not enter into any agreement,contract or arrangement with any government or government representative or with anyother person, firm, corporation, entity or enterprise imposing any legal obligation orliability of any kind on STWA. Without limiting the generality of the foregoing,Introducer specifically shall not sign STWA’s name to any contract or other instrumentand shall not contract any debt or enter into any agreement, either express orimplied, binding to the payment of money or the
 

 

    performance of any obligation. Moreover, Introducer shall not make anyrepresentations or warranties on behalf of STWA to any DesignatedProspects, it being understood that such representations and warrantieswill be made by STWA only in the definitive financing documents.Introducer represents and warrants that it will conduct all of itsactivities hereunder in accordance with all applicable laws, includinglaws relating to qualification and licensure of broker-dealers in theseveral states of the United States.  10.  Term. This letter agreement is effective as of the date hereof andshall continue in effect for six months unless earlier terminated in writing by bothparties. Notwithstanding the previous sentence, the period during which Introducershall have the right to act exclusively on behalf of the Company in connection with acapital raising transaction shall commence as of the date hereof and terminated onNovember 15, 2004, unless extended by mutual agreement of the parties.  11.  Termination.
(a) Upon the termination of this Agreement for any reason, Introducer’sentitlement to compensation from STWA shall immediately cease. Introducershall be entitled to receive compensation, to the extent that DesignatedProspect referrals made on or before the termination date consummate acapital raising transaction, and STWA receives all capital to be receivedunder the terms of the definitive agreements within 12 months of the dateof such termination.
 12.  General Provisions.
(a) Governing Law; Severability. This Agreement shall be governedby and under the laws of the State of New York without giving effect toconflicts of law principles. If any provision hereof is found invalid orunenforceable, that part shall be amended to achieve as nearly as possiblethe same effect as the original provision and the remainder of thisAgreement shall remain in full force and effect.
(b) Construction. The headings set forth in this Agreement are forconvenience only and shall not be used in interpreting the text of thesection in which they appear. The parties acknowledge that each party andits counsel has reviewed and revised this Agreement and that the rule ofconstruction to the effect that any ambiguities are to be resolved againstthe drafting party shall not be employed in the interpretation of thisAgreement or any amendments or schedules hereto, or any documents executedin connection herewith. When necessary herein, all terms used in thesingular shall apply to the plural, and all terms used in the masculine orfeminine gender shall apply to the neuter.
(c) Disputes. Any dispute arising under or in any way related tothis Agreement shall be submitted to binding arbitration by the AmericanArbitration Association (the “Association”) in accordance with theAssociation’s commercial rules then in effect. The arbitration shall beconducted only in New York, New York. The arbitration shall be binding onthe parties and the arbitration award may be confirmed by any court ofcompetent jurisdiction. In no event shall the demand for arbitration bemade after the date when institution of legal or equitable proceedingsbased on such claim, dispute or other matter in question would be barredby the applicable statute of limitations. In the event of any disputebetween the parties hereto, arising out of or relating to this Agreementor the breach hereof, or the interpretation hereof, the prevailing partyshall be entitled to recover from the losing party reasonable expenses,attorneys’ fees, and costs incurred in connection therewith or in theenforcement or
 

 

collection of any judgment or award rendered therein. The “prevailingparty” means the party determined by the arbitration proceeding to havemost nearly prevailed, even if such party did not prevail in all matters,not necessarily the one in whose favor a judgment or award is rendered.Further, in the event of any default by a party under this Agreement, suchdefaulting party shall pay all the expenses and attorneys’ fees incurredby the other party in connection with such default, whether or not anyarbitration is commenced.
(d) Confidential Information. Introducer acknowledges that, in thecourse of performing its duties under this Agreement, it may obtaininformation relating to STWA that is not available to the public(“Confidential Information”). As a condition to entering into thisAgreement, Introducer shall have executed the customary form ofConfidentiality or Non- Disclosure Agreement used by STWA and Introducerfurther agrees to execute any amended or revised agreement that maysubsequently be adopted by STWA. In amplification of Introducer’s dutiesunder such agreements Introducer agrees to hold at all times, both duringthe term of this Agreement and at all times thereafter, such ConfidentialInformation in the strictest confidence, and shall not use suchConfidential Information for any purpose, other than as may be reasonablynecessary for the performance of its duties as an Introducer pursuant tothis Agreement, without STWA’s prior written consent. Introducer shall notdisclose any Confidential Information to any person or entity (other thanemployees, consultants and advisors of Introducer who are obligated toprotect the Confidential Information from disclosure or misuse and as towhom Introducer shall be responsible to STWA for any such unauthorizeddisclosure or use), without STWA’s prior written consent. Notwithstandingthe above, the terms of this Agreement shall not alter, in any way, theobligations of Introducer and STWA pursuant to any ConfidentialityAgreement or Non-Disclosure Agreement previously entered into betweenIntroducer and STWA. The terms of any such Confidentiality Agreement orNon-Disclosure Agreement shall survive the termination of this Agreement.
(e) Entire Agreement. This Agreement constitutes the entireAgreement and final understanding of the parties with respect to thesubject matter hereof and supersedes all prior and/or contemporaneousunderstandings and/or discussions between the parties, whether written orverbal, express or implied, relating in any way to the subject matterhereof including, but not limited any other arrangements between theparties for contingency fees. This Agreement may not be altered, amended,modified or otherwise changed in any way except by a written agreement,signed by both parties.
(f) Notices. Any notice or other communication pursuant hereto shallbe given to a party at the address below its signature hereto by (i) personaldelivery, (ii) commercial overnight delivery service with writtenverification of receipt, or (iii) registered or certified mail. If somailed or delivered, a notice shall be deemed given on the earlier of thedate of actual receipt or three days after the date of transmission byauthorized means.
 (g)  Nonassignability. Neither this Agreement, nor anyrights, duties or interest herein, shall be assigned, transferred,pledged, hypothecated or otherwise conveyed by either party withoutthe prior written consent of the other party. Any such attemptedconveyance in violation of this paragraph shall be void and shallconstitute a default entitling the other party to terminate thisAgreement.
 

 

 (h)  Due Authority. The signing officers of STWA andIntroducer represent and warrant to each other that they areempowered to enter into, and to be legally bound by, this Agreement.
IN WITNESS WHEREOF, STWA and Introducer have executed this Agreement as of