UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
Current
Report
Pursuant
to Section 13 or 15(d)
of
the
Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): December 6, 2007
(Exact
name of registrant as specified in charter)
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Nevada
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0-29185
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52-2088326
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(State
or other jurisdiction
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(Commission
File Number)
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(IRS
Employer
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of
incorporation)
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Identification
No.)
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235
Tennant Avenue, #5, Morgan Hill, California 95037
(Address
of principal executive offices) (Zip Code)
Registrant's
telephone number, including area code: (818) 487-8000
Not
Applicable
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(0)
Item
1.01 Entry into a Material Definitive Agreement
As
previously reported in our form 8-K, dated and filed August 30, 2007, Save
the
World Air, Inc. (the
-
Company")
and certain individuals (collectively, the "Investors") entered into a
Modification Agreement dated as of August 29, 2007 (the "Modification
Agreement"), pursuant to which the Company agreed to amend certain terms and
conditions in respect of its 10% convertible promissory notes (the "PIPE
Notes")
and stock purchase warrants (the "PIPE Warrants") sold to the Investors pursuant
to a private offering earlier in 2007 (the "2007 PIPE Offering"). A copy of
the
Modification Agreement is filed herewith.
The
Modification Agreement was amended between the Company and Investors as of
November 30, 2007 (the "Second Modification Agreement"). A copy of the Second
Modification Agreement is also filed herewith.
Pursuant
to the Second Modification Agreement, the Company and Investors have agreed
as
follows:
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1.
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In
consideration of the Second Modification Agreement, the Investors
have
agreed to forgive all accrued interest on their PIPE Notes, from
the date
of issuance thereof through December 14,
2007.
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2.
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On
December 14, 2007, the Company agreed to pay all Investors 50% of
the
principal amount of their original PIPE Notes which equals a total
cash
repayment of $200,000. Additionally, in repayment of the other 50%
of the
principal amount of the original PIPE Notes, the Company, on December
14,
2007, agreed to issue to Investors a total of 1,060,000 shares of
the
Company's common stock (the "Conversion
Shares").
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3.
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Concurrently
with the cash payment and the issuance of the Conversion
Shares
as noted in paragraph 2, above, the Investors agreed to deliver to
the
Company the original of the PIPE Notes, which will be marked and
deemed
cancelled and of no further force or
effect.
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4.
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In
further consideration of the above terms and conditions, the Investors
have
agreed that the Company shall not be required to, and shall not,
file a
Registration Statement with the Securities and Exchange Commission
or any
state securities agency to register or qualify the PIPE Notes, the
Conversion Shares, the PIPE Warrants, or any shares issuable pursuant
to
the PIPE Warrants (the "Warrant Shares"). The Conversion Shares and
Warrant Shares when issued will be deemed restricted securities and
bear
appropriate legends.
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5.
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The
terms and conditions of the PIPE Warrants, to the extent not expressly
amended
in the Second Modification Agreement, shall remain in full force
and
effect in furtherance of the terms and conditions set forth in the
Modification Agreement.
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Item
9.01 Financial Statements and Exhibits
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10.1
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Modification
Agreement dated as of August 29, 2007, between the Company and
the
Investors named therein.
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10.2
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Second Modification
Agreement dated as of November 30, 2007, between the Company and
the
Investors named therein.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Date:
December 10, 2007
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SAVE
THE WORLD AIR,
INC.
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By:
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/s/ Charles
R.
Blum
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Charles
R. Blum
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President
and Chief Executive
Officer
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EXHIBIT
10.1
MODIFICATION
AGREEMENT
THIS
MODIFICATION AGREEMENT (the "Agreement") is made and entered into as of August
29, 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
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 desire to modify certain of the terms and
provisions of the Notes as set forth in this 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.
2.
Registration Rights.
Promptly,
but no later than November 30, 2007, the Company shall file the Registration
Statement with the Securities and Exchange Commission (the "SEC") to register
the Conversion Shares and the Warrant Shares.
3.
Interest Rate of Notes.
In
consideration of this Agreement, effective August 1, 2007, the interest rate
on
the Notes shall be increased to 18% per annum until such time as the
Registration Statement is declared effective by the SEC.
4.
Conversion Price.
In
consideration of this Agreement, the Conversion Price for all Conversion Shares
shall be amended to be $0.45 per share.
5.
Warrants.
In
consideration of this Agreement, each Investor shall receive, for no additional
consideration, Warrants ("Additional Warrants") in an amount equal to an
additional 50% of the Warrants originally issued pursuant to the terms of
the Offering Memorandum. The Additional Warrants shall have the same
registration rights as are described in the Offering Memorandum applicable
to
the Warrants, shall be exercisable immediately upon issuance, shall remain
exercisable for a period of five years from the date of this Agreement, on
a
cash basis only, at an initial exercise price of $0.45 per share and shall,
in
all other respects, have the same terms and conditions, and be in the same
form,
as the Warrants.
6.
Filing
Delays.
If
the
Company does not file the Registration Statement with the SEC by November 30,
2007, each Investor shall receive, for no additional consideration, Warrants
("Delay Warrants") in an amount equal to an additional 50% of the Warrants
originally issued pursuant to the terms of the Offering Memorandum. The Delay
Warrants shall have the same registration rights as are described in the
Offering Memorandum applicable to the Warrants, shall be exercisable immediately
upon issuance, shall remain exercisable for a period of five years from the
date
of this Agreement, on a cash basis only, at an initial exercise price of $0.45
per share and shall, in all other respects, have the same terms and conditions,
and be in the same form, as the Warrants.
7.
Other
Provisions Unaffected.
The
terms
and conditions of the Offering Memorandum, the Notes and the Warrants, to the
extent not expressly amended in this Agreement, shall remain in full force
and
effect.
8.
Counterparts.
This
Agreement may be executed in counterpart copies, all of which taken together
shall be deemed to be a single agreement.
[rest
of
page intentionally left blank]
IN
WITNESS WHEREOF, each of the Company and the Investors has caused this 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 A. BINS
Name:
Lois A. Bins
/s/
HENRY ARNEBOLD
Name:
Henry Arnebold
/s/
NANCY ARNEBOLD
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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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").
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.
[rest
of
page intentionally left blank]
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 Arn
eba
ld
N
ame:
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
3