EXHIBIT 10.7

  April 26, 2006 

 
Mr. Robert K. Lifton
Medis Technologies Ltd.
805 Third Avenue
New York, New York 10022
 
Dear Mr. Lifton:
 
Reference is hereby made to that letter agreement (as amended hereby, the
“Agreement”) dated April 21, 2006 between Whitebox Advisors and Medis
Technologies Ltd. (“Medis”), pursuant to which we have agreed to exchange (the
“Exchange”) an aggregate of $550,000 face value amount of Medis’ 6% senior
convertible notes due July 15, 2010 (the “Notes”) for an aggregate of 34,817
shares of Medis common stock (the “Shares”). Of such Shares, an aggregate of (i)
31,792 Shares shall be freely tradable (and of which 292 Shares shall be
delivered upon issuance to McMahan Securities Co. L.P.) and (ii) 3,025 Shares
shall be restricted, which Medis agrees to register as soon as possible.
 
The Notes were issued under that Indenture dated as of July 26, 2005 by and
between Medis and Wachovia Bank, National Association (the “Indenture”).
 
We represent and warrant to you that (i) Whitebox Diversified Convertible
Arbitrage Partners, LP (“Whitebox”) is the record and beneficial holder of the
Notes, (ii) we have full authority and capacity to execute, deliver and perform
the Agreement, and to bind and obligate Whitebox hereunder, (iii) we and/or
Whitebox have received all consents or approvals of or have given proper notice
to any person or authority required in order for us to execute, deliver and
perform the Agreement, (iv) the Agreement is a legal, valid and binding
agreement of ours, enforceable against us in accordance with its terms, (v)
Whitebox owns the Notes free and clear of all liens, charges and encumbrances,
and upon the consummation of the Exchange, Medis will own the Notes free and
clear of all liens, charges and encumbrances and (vi) Whitebox is acquiring the
Shares for its own account for investment purposes only and not with a present
view to the resale or distribution of the Shares.
 
Additionally, we and Whitebox hereby (i) waive any and all terms, conditions and
covenants under the Indenture insofar as any of them may prohibit entering into
or consummating the Exchange, (ii) waive any cause of action we or Whitebox may
have against Wachovia Bank, National Association, as Trustee under the Indenture
governing the Notes (the “Trustee”) in connection with the Exchange, (iii) agree
to indemnify the Trustee for any loss, liability, claim or damage it may incur
in connection with the Exchange and (iv) authorize and direct the Trustee to
consummate the Exchange.
 

 
[Remainder of Page Intentionally Left Blank; Signature Page Follows in
Counterparts]
 
 
 

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        Sincerely yours,       
Whitebox Advisors
 
   
   
    By:   /s/   

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Name:   Title: 

 
Agreed to and Accepted
As of the Date Hereof:
 
Medis Technologies Ltd.
 
 
By:  /s/

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Name: Robert K. Lifton
Title: Chairman and CEO