okay sorry for mentioning only link as an answer.. if first pagination link shows 404 error that should be a permalink issue. but to u its second page so definitely it because of some code mistake. please check this code.
/*Loop Pagination - A WordPress script for creating paginated links on archive-type pages.*/
function loop_pagination( $args = array() ) {
global $wp_rewrite, $wp_query;
/* If there's not more than one page, return nothing. */
if ( 1 >= $wp_query->max_num_pages )
return;
/* Get the current page. */
$current = ( get_query_var( 'paged' ) ? absint( get_query_var( 'paged' ) ) : 1 );
/* Get the max number of pages. */
$max_num_pages = intval( $wp_query->max_num_pages );
/* Get the pagination base. */
$pagination_base = $wp_rewrite->pagination_base;
/* Set up some default arguments for the paginate_links() function. */
$defaults = array(
'base' => add_query_arg( 'paged', '%#%' ),
'format' => '',
'total' => $max_num_pages,
'current' => $current,
'prev_next' => true,
//'prev_text' => __( '« Previous' ), // This is the WordPress default.
//'next_text' => __( 'Next »' ), // This is the WordPress default.
'show_all' => false,
'end_size' => 1,
'mid_size' => 1,
'add_fragment' => '',
'type' => 'plain',
// Begin loop_pagination() arguments.
'before' => '<nav class="pagination loop-pagination">',
'after' => '</nav>',
'echo' => true,
);
/* Add the $base argument to the array if the user is using permalinks. */
if ( $wp_rewrite->using_permalinks() && !is_search() )
$defaults['base'] = user_trailingslashit( trailingslashit( get_pagenum_link() ) . "{$pagination_base}/%#%" );
/* Allow developers to overwrite the arguments with a filter. */
$args = apply_filters( 'loop_pagination_args', $args );
/* Merge the arguments input with the defaults. */
$args = wp_parse_args( $args, $defaults );
/* Don't allow the user to set this to an array. */
if ( 'array' == $args['type'] )
$args['type'] = 'plain';
/* Get the paginated links. */
$page_links = paginate_links( $args );
/* Remove 'page/1' from the entire output since it's not needed. */
$page_links = preg_replace(
array(
"#(href=['\"].*?){$pagination_base}/1(['\"])#", // 'page/1'
"#(href=['\"].*?){$pagination_base}/1/(['\"])#", // 'page/1/'
"#(href=['\"].*?)\?paged=1(['\"])#", // '?paged=1'
"#(href=['\"].*?)&\#038;paged=1(['\"])#" // '&paged=1'
),
'$1$2',
$page_links
);
/* Wrap the paginated links with the $before and $after elements. */
$page_links = $args['before'] . $page_links . $args['after'];
/* Allow devs to completely overwrite the output. */
$page_links = apply_filters( 'loop_pagination', $page_links );
/* Return the paginated links for use in themes. */
if ( $args['echo'] )
echo $page_links;
else
return $page_links;
}