saveair_8k-ex1002.htm


    


    EXHIBIT
      10.2

    


    SECOND
      MODIFICATION AGREEMENT

    


    THIS
      SECOND MODIFICATION AGREEMENT (the "Second Modification Agreement") is made
      and
      entered into as of November 30, 2007 by and between Save the World Air, Inc.
      (the "Company") and the individuals and entities whose signatures are set forth
      below at the end of this Second Modification Agreement (the
      "Investors").

    


    WHEREAS,
      pursuant to the Confidential Private Placement Memorandum dated January 12,
      2007, (the "Offering Memorandum"), the Company entered into promissory notes
      (the "Notes") with the Investors pursuant to which the Company borrowed a total
      of $400,000 from the Investors; and

    


    WHEREAS,
      among other things, the Company was obligated to file a registration statement
      (the "Registration Statement") registering the Conversion Shares and Warrant
      Shares on or before July 2, 2007, and such Registration Statement was not filed
      by such date, resulting in certain consequences thereafter; and

    


    WHEREAS,
      the Company and the Investors on August 29, 2007 entered into a Modification
      Agreement (the "Modification Agreement") which extended the date to file the
      Registration Statement to November 30, 2007; increased the interest rate to
      18%
      effective August 1, 2007; reduced the Conversion Price to $0.45 per share and
      provided for the issuance of Additional Warrants and Delay Warrants each in
      an
      amount equal to 50% of the Warrants originally issued. The Additional Warrants
      and the Delay Warrants are exercisable immediately upon issuance, shall remain
      exercisable for a period of five years from the date of issuance at an exercise
      price of $0.45 per share. The Company and the Investors now desire to modify
      further certain of the terms and provisions of the Notes as set forth in this
      Second Modification Agreement.

    


    NOW,
      THEREFORE, in consideration of the mutual promises and covenants contained
      herein, and other good and valuable consideration, the receipt and sufficiency
      of which is acknowledged, the Company and the Investors agree as
      follows:

    


    1.
      Definitions.

    


    All
      terms
      not defined herein shall have the meaning ascribed to them in the Offering
      Memorandum and the Modification Agreement dated August 29, 2007.

     

    2.
      Waved Interest.

    


    In
      consideration of this Second Modification Agreement, the Investors agree to
      forgive all accrued interest on their Notes, from the date of issuance through
      December 14, 2007.

    


    3.
      Note Repayment.

    


    On
      December 14, 2007, the Company shall pay all Investors 50% of the principal
      amount of their original Notes which equals to a total cash repayment of
      $200,000.00. Additionally, in repayment of the other 50% of the principal amount
      of the original Notes, on December 14, 2007 the Company shall issue to Investors
      a total of 1,060,000 shares of the Company's Common Stock, $0.001 par value
      (the
      "Conversion Shares").

     

    
      
        
        

      

      
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    4. Note
      Cancellation.

    


    Concurrently
      with the cash payment and the Conversion Share issuance in accordance with
      section 3 above, the original of the Notes shall be delivered to the Company,
      whereupon they shall be marked and deemed cancelled and of no further force
      or
      effect.

    


    5.
No
      Registration Rights.

    


    The
      Company shall not be required to, and shall not, file a Registration Statement
      with the Securities and Exchange Commission (the "SEC") or any state securities
      agency to register or qualify the Notes, the Warrants, the Conversion Shares
      or
      the Warrant Shares. Conversion Shares and Warrant Shares when issued will be
      deemed restricted securities and bear appropriate legends.

    


    6.
      Warrants Provisions Unaffected.

    


    The
      terms
      and conditions of the Warrants, to the extent not expressly amended in this
      Second Modification Agreement, shall remain in full force and effect. More
      specifically, besides the original Warrant and the Additional Warrants, the
      Company shall also issue the Delay Warrants as described in the Modification
      Agreement dated August 29, 2007.

    


    7.
      Conflict.

    


    In
      the
      event of any conflict between the terms and conditions of the Modification
      Agreement and the Second Modification Agreement, this Second Modification
      Agreement shall control.

    


    8.
      Counterparts.

    


    This
      Second Modification Agreement may be executed in counterpart copies, all of
      which taken together shall be deemed to be a single agreement.

    


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    IN
      WITNESS WHEREOF, each of the Company and the Investors has caused this Second
      Modification Agreement to be executed as of the date first set forth
      hereinabove.

    


    THE
      COMPANY:

    


    SAVE
      THE
      WORLD AIR, INC.

    


    


    /s/CHARLES
      R. BLUM

    Name:
      Charles R. Blum

    Title:
      President and Chief Executive Officer

    


    


    INVESTORS:

    


    /s/
      Phillip A. Cole

    Name:
      Phillip A. Cole

    


    /s/
      Richard Bins

    Name:
      Richard Bins

    


    /s/
      Lois Bins

    Name:
      Lois A. Bins

    


    /s/
      Henry Arnebold

    Name:
      Henry Arnebold

    


    /s/
      Nancy Arnebald

    Name:
      Nancy
      Arnebold

    


    /s/
      Frank Jordan

    Name:
      Frank Jordan

    


    /s/
      Robert Katz

    Name:
      Robert Katz

    


    /s/
      Jan
      Fredriksson

    Name:
      Jan
      Fredriksson

    


    /s/
      Earl Pomberg

    Name:
      Earl Pomberg

     

     

     

     

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