EXHIBIT 10.2
 

 
AGREEMENT
 
This Agreement (the “Agreement”) by and between Medis Technologies Ltd., a
Delaware corporation (the “Company”) with executive offices at 805 Third Avenue,
New York, New York 10022, and Thomas Finn (“Finn”) is hereby entered into on
February 17, 2009 and effective as of January 13, 2009 (the “Effective Date”).
 
RECITALS
 
WHEREAS, the Company wishes to employ Finn, effective as of the Effective Date
through the Employment Term (as defined below), as its Executive Vice President,
and Finn wishes to be employed by the Company in such capacity, pursuant to the
terms and conditions set forth herein.
 
NOW, THEREFORE, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, it is hereby agreed as
follows:
 
AGREEMENTS
 
1.   [Intentionally Omitted]
 
2.   Employment and Duties.
 
(a) During the Employment Term (as defined below), the Company shall employ Finn
in the position of Executive Vice President of the Company (and such other
positions consistent with his status as the Executive Vice President of the
Company as shall be reasonably assigned to Finn by the Company’s Chief Executive
Officer or Board of Directors of the Company (the “Board”)). Finn shall report
to the Chief Executive Officer. Finn shall have all of the normal and customary
responsibilities, duties and authorities customarily accorded to, and expected
of, such position, including those as may be reasonably established by the Chief
Executive Officer or the Board; provided that the nature of such
responsibilities, duties and authorities shall not be materially inconsistent
with Finn’s positions and duties hereunder or with those customarily accorded
to, and expected of, those of an equivalent role of a company similar to the
Company.
 
(b) Finn hereby accepts this employment upon the terms and conditions contained
herein and agrees to devote his full business time, attention and efforts to
promote and further the business of the Company. Finn shall not, during the
Employment Term, be engaged in any other business activity pursued for gain,
profit or other pecuniary advantage without the prior consent of the Board.
Notwithstanding the foregoing limitations, provided that such activities neither
interfere with the discharge of the employment duties and responsibilities of
Finn hereunder nor violate the terms of Section 4 hereof, Finn shall be able to:
(i) devote occasional business time to charitable, industry trade group and
community activities and making personal passive investments in publicly traded
securities in general and in competitors of the Company and its subsidiaries and
affiliates; provided that Finn shall not in any event own more than 2% of the
issued and outstanding securities of any such publicly traded company.
 

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(c) The Company may, from time to time, require Finn to travel in reasonable
amounts in carrying out his employment duties pursuant to this Agreement,
including but not limited to the Company’s other offices and facilities.
 
(d) Finn faithfully shall adhere to, execute and fulfill all policies lawfully
established by the Chief Executive Officer and/or the Board acting in good
faith.
 
3.   Compensation.  For all employment services rendered by Finn in any capacity
required hereunder, the Company shall compensate Finn as follows:
 
(a) Base Salary. Commencing the Effective Date, Finn shall be paid a base salary
at a rate of $220,000 per year (or pro rated amount for any partial period (the
“Base Salary”)), payable on a regular basis in accordance with the Company’s
standard payroll procedure, but no less frequently than monthly; provided,
however, that Finn’s Base Salary from the Effective Date through March 14, 2009
shall be payable at or promptly after the end of such term. For the Initial
Employment Term and for each successive Renewal Employment Term (as defined in
Section 5 hereof), the Base Salary shall be reviewed by the CEO after
consultation with Finn and may be increased (but not decreased). This process of
reviewing the Base Salary and assessing performance will commence on the 6th
month anniversary of this Agreement, with respect to the Initial Employment
Term, and thereafter no less frequently than once a year.
 
(b) Equity Incentive Compensation.  Subject to the penultimate sentence of this
Section 3(b), the Company shall issue to Finn restricted shares of the Company’s
common stock (the “Restricted Shares”) under the Company’s 2007 Equity Incentive
Plan (the “Incentive Plan”). The Restricted Shares, the initial amount of which
shall be determined in accordance with Section 3(d) hereof as if it were a
Bonus, but estimated to be no less than 150,000 Restricted Shares, shall have
such terms and conditions that are no less favorable to Finn than the terms and
conditions applicable to restricted stock granted at or about the same time to
other executive officers of the Company. Notwithstanding the foregoing, the
grant of the Restricted Shares shall be subject to (i) the Company obtaining the
approval of its stockholders, at the next annual meeting of stockholders, to
increase the number of shares available under the Incentive Plan, which approval
the Board of Directors of the Company shall undertake best efforts to recommend
and obtain, and the Restricted Shares shall not be granted and the Company’s
obligations related to the Restricted Shares shall be terminated and of no force
and effect in the event of the Company’s failure to so obtain stockholder
approval and (ii) Finn achieving performance goals reasonably set by the Board
or the Compensation Committee thereof (the “Compensation Committee”) in good
faith. The Company may at any time and from time to time in its sole discretion
consider Finn for future annual or other grants of stock options, restricted
shares or other forms of equity incentive compensation.
 
(c) Vacation and Leave.  During the Employment Term, Finn shall be entitled to 4
weeks (i.e., 20 days) paid vacation per year, pro-rated for partial years (the
“Annual Vacation Days”); provided, however, that Finn shall not be compensated
for any unused Annual Vacation Days or Carryforward Vacation Days (as defined
below) upon termination of this Agreement or Finn’s employment by the Company.
Finn shall be entitled to carry forward his unused Annual Vacation Days from
each year, but only up to the lesser of (i) thirty percent (30%) of the Annual
Vacation Days or (ii) the number of unused Annual Vacation Days from that year
(by way of
 
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illustration, if no vacation is taken in a particular year, then 6 days will be
carried forward to the next year (30% of 20 days), but if 15 days of vacation
are taken in a particular year, then 5 days will be carried forward to the next
year) (the “Carryforward Vacation Days”). Finn shall be entitled to disability
and other leave as provided by the policies of the Company from time to time.
 
(d) Incentive Bonus Plan.  Commencing on and for the fiscal year ending December
31, 2009, and annually thereafter until termination of this Agreement, Finn
shall be eligible to receive a performance bonus (the “Bonus”), which shall
constitute a wage, based upon the Company’s level of achievement of
pre-established performance goals that shall be determined by the Chief
Executive Officer and the Compensation Committee (acting in good faith) pursuant
to discussions to be commenced in the first quarter of 2009, but only after
consultation with Finn, based on the Board approved budget for such year
(excluding extraordinary gains). Such pre-established performance goals shall be
reduced to writing and delivered to Finn upon adoption prior to the commencement
of the fiscal year to which such pre-established performance goals relate or, in
the event of the Bonus for fiscal 2009, upon confirmation of the aforementioned
pre-established performance goals. The Company shall review Finn’s performance
and the Bonus for fiscal year 2009 promptly after June 30, 2009, which shall
include consultation with Finn, and the Company shall make such adjustments to
the Bonus for such fiscal year as shall be determined pursuant to such review.
The Bonus, if any, will be paid to Finn in accordance with policies established
by the Board or the Compensation Committee, from time to time, with respect to
the method and timing for payment of bonuses to senior executive officers of the
Company generally, and shall be paid pro rata for partial fiscal years.
 
(e) Benefits and Other Compensation.  During the Employment Term, Finn shall be
entitled to receive additional benefits and compensation from the Company in
such form and to such extent as specified below:
 
(i)  
The Company shall include Finn as a covered insured under its Directors and
Officers insurance policy and any other liability or similar insurance policies
(“Insurance”), if provided to other senior executives of the Company. The
Company shall provide a copy to Finn of its policies of Insurance, together with
all amendments thereto or replacements thereof, from time to time. If this
Agreement is terminated for any reason, the Company shall continue to provide
such documents to Finn for a period of 5 years following the date of
termination.

 
(ii)  
The Company shall provide Finn any and all other benefits of employment
generally provided to other senior executive officers of the Company, which may
include, for example and without limitation, health insurance, medical
insurance, life insurance, disability insurance, unemployment or workers’
compensation insurance, profit sharing, 401(k), and other employee benefits.

 
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(iii)  
Reimbursement for all business travel and other out-of-pocket expenses actually,
reasonably and properly incurred by Finn in the performance of his services
pursuant to this Agreement. All reimbursable expenses shall be appropriately
documented in reasonable detail by Finn upon submission of any request for
reimbursement, and in a format and manner consistent with the Company’s expense
reporting policy, and shall be reimbursed no less than on a monthly basis.

 
(iv)  
An automobile allowance of $400.00 per month during the Employment Term.

 
(v)  
To the extent provided to other executive officers of the Company, the Company
shall enter into an indemnification agreement with Finn that would provide for
indemnification rights to Finn separate and distinct from the indemnification
rights that would be provided to Finn pursuant to the Company’s By-Laws in
effect from time to time. Nothing in this Section 3(e)(v) shall be deemed to
require the Company to enter into any such agreement with Finn or otherwise to
provide indemnification rights to Finn that are different from the other senior
executive officers of the Company.

 
(f) Payment.  Except as otherwise provided herein, payment of all compensation
and benefits to Finn hereunder shall be made in accordance with the relevant
Company policies in effect from time to time, including normal payroll
practices, and shall be subject to all applicable employment and withholding
taxes and source deductions.
 
(g) Cessation of Employment.  In the event Finn shall cease to be employed by
the Company for any reason, Finn’s compensation and benefits with respect to
such employment shall cease on the date of such event, except as otherwise
provided herein.
 
4.   Non-Competition Agreement.
 
(a) Finn shall not, without the prior consent of the Board, during the
Employment Term and for the Applicable Period, for himself or on behalf of, or
in conjunction with, any other person, company, partnership, corporation, entity
or business of whatever nature, either directly or indirectly:
 
(i)  
engage, as an officer, director, shareholder, member, manager, owner, partner,
joint venturer, trustee, or in a managerial capacity, whether as an executive,
independent contractor, agent, consultant or advisor, or as a sales
representative, in any business selling any products or services that compete
with the products or services offered by the Company at the later of the time of
termination of Finn’s consultancy or employment, as

 
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the case may be, hereunder, anywhere in the United States and in any other
country in which the Company does business;

 
(ii)  
solicit any person who is at that time, or at any time within the preceding
ninety (90) days of the time of the proposed call was, an employee of the
Company, for the purpose, or with the intent, of enticing such employee away
from, or out of, the employ of the Company or for the purpose of hiring such
employee for Finn or any other Person; provided, however, that this Section
4(a)(ii) shall not apply to any person who independently contacts Finn during
the Applicable Period in response to a general solicitation by a person or
entity with which Finn is affiliated published in a newspaper, website or other
publication of general circulation that is not specifically targeted at the
Company’s employees; or

 
(iii)  
solicit any person or entity that is at that time, or that was, at any time
within the twelve (12) months prior to that time, a customer of the Company, for
the purpose of soliciting or selling products or services offered by the
Company.

 
For the purposes of this Agreement the term “Applicable Period” shall mean
twelve (12) months from the date Finn ceases to be an employee of the Company,
regardless of the reason for separation.
 
(b) Because of the difficulty of measuring economic losses to the Company as a
result of a breach of the foregoing covenant, and because of the immediate and
irreparable damage that could be caused to the Company for which it would have
no other adequate remedy, Finn agrees that the foregoing covenant may be
enforced by the Company in the event of breach by him, by injunctions and
restraining orders, without the necessity of posting a bond or other security.
 
(c) It is agreed by the parties that the foregoing covenants in this Section 4
impose a reasonable restraint on Finn in light of the activities, business and
plans of the Company on the date of the execution of this Agreement, and Finn’s
fees or compensation, as the case may be, hereunder, in part, constitutes
consideration for this covenant; but it is also the intent of the Company and
Finn that such covenants be construed and enforced in accordance with any change
in the activities, business or plans of the Company throughout the term of this
Agreement.
 
(d) The covenants in this Section 4 are severable and separate, and the
unenforceability of any specific covenant or part thereof shall not affect the
remainder of such covenant or provisions of any other covenant.
 
(e) All of the covenants in this Section 4 shall be construed as an agreement
independent of any other provision in this Agreement, and the existence of any
claim or cause of action of Finn against the Company, whether predicated on this
Agreement or otherwise, shall
 
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not constitute a defense to the enforcement of such covenants; provided that the
Company is not in breach of any obligation with respect to the payment of any
compensation or Severance (as defined in Section 5(e) hereof) and the Company’s
breach of such obligation is a result of circumstances other than Finn’s breach
of Section 4 or Section 7 hereof.
 
(f) Notwithstanding any of the foregoing, if any applicable law shall reduce the
time period or scope during which Finn shall be prohibited from engaging in any
competitive activity described in Section 4(a) hereof, the period of time or
scope for which Finn shall be prohibited pursuant to Section 4(a) hereof shall
be the maximum time or scope permitted by law.
 
5.   Term; Termination; Rights on Termination.  The term of employment under
this Agreement shall have begun on the Effective Date and shall continue until
December 31, 2011 (the “Initial Employment Term”) and, unless terminated as
herein provided or otherwise modified by mutual agreement, shall be
automatically renewed at the end of the Initial Employment Term for a period of
one (1) year and thereafter for successive one (1) year terms (each such one (1)
year term, a “Renewal Employment Term”), on the same terms and conditions
contained herein with such changes, additions, deletions or modifications as may
be agreed to in writing by Finn and the Company (the Initial Employment Term and
each Renewal Employment Term, each an “Employment Term”), until either party
notifies the other party in writing at least one hundred twenty (120) days prior
to the expiration of the then current Employment Term that he or it does not
want the Employment Term to so renew. It is acknowledged and understood that
this Agreement shall remain in full force and effect during any notice period
until the actual termination date hereof, subject to the terms hereof. This
Agreement and Finn’s consultancy or employment, as the case may be, may be
terminated in any one of the following ways:
 
(a) Death.  Finn’s employment hereunder shall immediately terminate upon his
death, and the Company shall pay to Finn’s estate (i) all Base Salary earned as
of the date of his death but unpaid, (ii) Bonus amounts, if any, earned as of
the date of his death but unpaid and (iii) all other unpaid benefits from the
period prior to the date of his death.
 
(b) Disability.  If, as a result of Finn’s incapacity due to physical or mental
illness, Finn shall not have performed his duties hereunder on a full-time basis
for three (3) consecutive months or for one hundred twenty (120) days in any
twelve (12) month period, Finn’s employment under this Agreement may be
terminated by the Company upon ten (10) days written notice if Finn is unable to
resume his full time duties at the conclusion of such notice period. Finn’s
compensation during any period of disability prior to the effective date of such
termination shall be the amounts normally payable to him in accordance with his
then current annual Base Salary, reduced by the amounts of disability pay, if
any, paid to Finn under any Company disability program. Finn shall not be
entitled to any further salary or other compensation from the Company for any
period subsequent to the effective date of such termination, except for (i) all
Base Salary earned as of the date of such termination but unpaid, (ii) Bonus
amounts, if any, earned as of the date of his termination but unpaid, (iii) all
other unpaid benefits from the period prior to the date of such termination, and
(iv) any other pay and benefits, if any, in accordance with then existing
severance policies of the Company and Company benefit plans.
 
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(c) Termination by Company.
 
(i)  
For Cause.  The Company may terminate this Agreement immediately upon written
notice to Finn for cause, which shall mean: (1) Finn’s willful misconduct or
gross negligence in the performance or nonperformance of any of Finn’s material
duties and responsibilities hereunder; (2) Finn’s continued and willful refusal
promptly to follow any lawful direction of the Chief Executive Officer or the
Board consistent with the provisions for such contained herein, provided that if
Finn disagrees in good faith with such lawful direction in writing within a
reasonable period of time after such lawful direction is given, then the Chief
Executive Officer or the Board, as the case may be, and Finn shall in good faith
discuss such disagreement and attempt to resolve same within a reasonable period
of time based on the facts and circumstances of the disagreement, provided
further that if such disagreement is not so resolved, Finn shall promptly follow
and comply with such lawful direction of the Chief Executive Officer or the
Board, as the case may be; (3) Finn’s willful misconduct or gross negligence in
the performance or intentional nonperformance of his duties and responsibilities
(regardless of materiality) under this Agreement, which in the aggregate,
constitute a material nonperformance hereunder; (4) Finn’s willful
misrepresentation, fraud, illegal drug abuse, or misconduct with respect to the
business or affairs of the Company, which materially and adversely affects, or
can reasonably be expected so to affect, the operations, prospects or reputation
of the Company; (5) Finn’s conviction of or plea of nolo contendere to a felony
or other crime involving moral turpitude; (6) Finn’s material breach of any
fiduciary duty owed to the Company or breach of the provisions of Section 4 or
Section 7 hereof, which breach is not cured within ten (10) days of written
notice to Finn or is incapable of cure; or (7) any other willful and material
breach by Finn of this Agreement that is not cured within ten (10) days of
written notice to Finn or is incapable of cure. In the event of a termination
for cause, as contemplated in this subsection 5(c)(i), the Company shall have no
further obligation to make any payments to Finn or to provide any other benefits
to him hereunder except for the Base Salary, reimbursement or other benefits
that have accrued or vested but not been paid as of the effective date of such
termination.

 
(ii)  
Without Cause. The Company may, at any time during any Employment Term,
terminate this Agreement other than for Cause, if such termination is approved
by the Board. In the

 
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event of a termination by the Company without cause, or upon the failure by the
Company to agree to renew the Employment Term pursuant to Section 5 hereof and
Finn in good faith wishes to renew such Employment Term, the Company’s
obligations hereunder shall be as follows: (1) paying Severance to Finn in
accordance with subsection 5(e) hereof; (2) paying a pro rata Bonus for the year
of such termination (determined by applying the prior year’s Bonus methodology
to Finn’s performance to date against the Company’s goal(s) to date); and (3)
providing to Finn any other benefits hereunder that have accrued or vested but
have not been paid as of the effective date of such termination. The payments
hereunder shall be made as and when such payments would have been made had
Finn’s employment not have terminated hereunder. Except as provided herein, all
other obligations of the Company under this Agreement shall cease as of the date
of termination. The payments and other benefits due to Finn hereunder shall be
inclusive of all statutory or other legal severance entitlements of Finn.

 
(d) Termination by Finn.  Finn may at any time during the Employment Term
terminate his employment hereunder upon 120 days prior written notice to the
Company for any reason other than for Good Reason. Finn may, at any time during
the Employment Term, terminate his employment hereunder immediately for Good
Reason. For purposes of this Agreement, “Good Reason” means the occurrence of
any one or more of the following events unless Finn specifically agrees in
writing by the Company and Finn that such event shall not be Good Reason: (A)
any material breach of this Agreement by the Company; provided, however, that no
such material breach described in this subsection shall constitute Good Reason
unless Finn gives the Company ten (10) days’ prior written notice of such act or
omission and the Company fails to cure such act or omission within the ten (10)
day period after delivery of such notice (except that Finn shall not be required
to provide such notice in case of intentional acts or omissions by the Company
or more than once in cases of repeated acts or omissions);  (B) the failure of
the Company to assign this Agreement to a successor to the Company or failure of
a successor to the Company to explicitly assume and agree to be bound by this
Agreement; or (C) there is a change of ownership or control of the Company and
Finn in his sole discretion chooses not to work for that new ownership or
successor of the Company. For purposes of clause (A) of this Section 5(d), a
material breach shall include, but not be limited to, a demotion, material
reduction in responsibilities, decrease in Base Salary or any change in
reporting relationship, in each case from that specifically described in this
Agreement.
 
(e) Severance.  If Finn’s employment is terminated by the Company pursuant to
Section 5(c)(ii) or by Finn for Good Reason, the Company shall continue to pay
Finn his then current Base Salary (the “Severance”) for a period of twelve (12)
months (the “Severance Period”); provided that the payment to Finn of the
Severance shall be subject to Finn’s execution of a release, whereby Finn
releases the Company from all statutory and other claims or rights that he may
have against the Company and its current and former officers, directors, and
employees, including, but not limited to, all statutory claims or rights
relating to Finn’s
 
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employment and/or termination (but excluding any claims or rights relating to
the Company's obligations (i) to pay Finn Severance due and owing to him
hereunder, and (ii) for indemnification according to the terms in effect as of
the date of termination), in a form reasonably acceptable to the Company and to
Finn (a “Release”); provided further that such Release shall immediately and
with no further action on the part of either party be of no force and effect,
and shall be null and void, if following Finn’s termination of employment for
Cause, circumstances arise or are discovered pursuant to which Finn should not
have been terminated for Cause, but only with respect to those circumstances.
The Severance is expressly understood and agreed not to be salary or payroll
compensation to an executive, but rather, severance to a former executive.
Notwithstanding anything herein to the contrary, if Finn has breached a
provision of Section 7 of this Agreement, or has breached a provision of Section
4 or Section 6 of this Agreement and he has failed to cure such breach within
ten (10) days of notice from the Company describing such breach in reasonable
detail, then the Severance payments shall terminate immediately. In the event
Finn executes a Release in accordance with this Section 5(e), the Company shall
execute a release, whereby the Company releases Finn from all statutory and
other claims or rights that the Company may have against Finn; provided that
such release shall immediately and with no further action on the part of either
party be of no force and effect, and shall be null and void, if following Finn’s
termination of employment circumstances arise or are discovered with respect to
Finn that would have constituted cause for termination of employment hereunder,
but only with respect to those circumstances.
 
(f) Deferral of Payments Necessary to Avoid Taxation Under Code Section
409A.  The intent of the parties is that payments and benefits under this
Agreement, to the extent applicable, comply with Section 409A of the Internal
Revenue Code of 1986, as amended, and the regulations and guidance promulgated
thereunder (collectively “Section 409A”) and, accordingly, to the maximum extent
permitted, this Agreement will be interpreted to be in compliance therewith.
Notwithstanding any provision to the contrary in this Agreement, to the extent
that Finn is a “specified employee” within the meaning of that term under
Section 409A(a)(2)(B) of the Code, then with regard to any payment or the
provision of any benefit that is required to be delayed in compliance with
Section 409A(a)(2)(B) of the Code, such payment or benefit will not be made or
provided prior to the earlier of (i) the expiration of the six-month period
measured from the date of Finn’s “separation from service” (as such term is
defined under Section 409A) or (ii) the date of Finn’s death (the “Delay
Period”). Upon the expiration of the Delay Period, all payments and benefits
delayed pursuant to this Section 5(f) (whether they would have otherwise been
payable in a single sum or in installments in the absence of such delay) will be
paid or reimbursed to Finn in a lump sum, and any remaining payments and
benefits due under this Agreement will be paid or provided in accordance with
the normal payment dates specified for them herein. Notwithstanding the
foregoing, to the extent that the foregoing applies to the provision of any
ongoing welfare benefits to Finn that would not be required to be delayed if the
premiums therefore were paid by Finn, he will pay the full cost of premiums for
such welfare benefits during the Delay Period and the Company will pay Finn an
amount equal to the amount of such premiums paid by Finn during the Delay Period
promptly after its conclusion.
 
6.   Inventions.  Finn shall disclose promptly to the Company any and all
significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, that are conceived or made by Finn
following the Effective Date, solely or jointly with
 
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another, during the Employment Term and that are directly related to the
business or activities of the Company whether or not conceived during or after
regular business hours or using any property or facilities of the Company. Finn
hereby assigns and agrees to assign all of his right, title and interest in and
to any such intellectual property to the Company or its nominee and Finn hereby
expressly waives any and all moral rights he may have in or in relation to such
intellectual property. Finn covenants and agrees to sign all such documents,
instruments or agreements and to perform all such acts or otherwise assist the
Company as are reasonably necessary in order to perfect and give effect to the
foregoing assignment of intellectual property rights and, to the extent
applicable, waiver of moral rights therein. Finn agrees that all such materials
that he develops or conceives and/or documents related thereto during such
period shall be deemed works made-for-hire for the Company within the meaning of
the copyright laws of the United States or any similar or analogous law or
statute of any other jurisdiction, and accordingly, the Company shall be the
sole and exclusive owner for all purposes for the distribution, exhibition,
advertising and exploitation of such materials or any part of them in all media
and by all means now known or that may hereafter be devised, throughout the
universe in perpetuity. Finn agrees that in furtherance of the foregoing, he
shall disclose, deliver and assign to the Company all such conceptions, ideas,
improvements and discoveries and shall execute all such documents, including
patent, trademark and copyright applications, as the Company reasonably shall
deem necessary to further document the Company’s ownership rights therein and to
provide the Company the full and complete benefit thereof. Should any arbitrator
or court of competent jurisdiction ever hold that such materials do not
constitute works made-for-hire, Finn hereby irrevocably assigns to the Company,
and agrees that the Company shall be the sole and exclusive owner of, all right,
title and interest in and to all such materials, including the patents,
trademarks, copyrights and any other proprietary rights arising therefrom. Finn
reserves no rights with respect to any such materials, and hereby acknowledges
the adequacy and sufficiency of the fees and/or compensation paid and to be paid
by the Company to Finn for the materials and the contributions he will make to
the development of any such information or materials. Finn agrees to cooperate
with all lawful efforts of the Company to protect the Company’s rights in and to
any or all of such information and materials and will, at the request of the
Company, execute any and all instruments or documents reasonably necessary or
desirable in order to register, establish, acquire, prosecute, maintain, perfect
or defend the Company’s rights in and to such information and materials.
 
7.   Confidential Information and Trade Secrets.  Finn acknowledges and agrees
that all Confidential Information, Trade Secrets and other property delivered
to, or compiled by, him by or on behalf of the Company or its representatives,
vendors or customers that pertain to the business of the Company shall be, and
remain, the property of the Company and be subject at all times to its
discretion and control. Finn agrees that he shall maintain strictly the
confidentiality of, and shall not disclose any such Confidential Information or
Trade Secrets to any person without the prior written consent of the Board.
 
For purposes hereof, the parties agree that “Confidential Information” means and
includes:
 
·  
All business or financial information, plans, processes and strategies, market
research and analyses, projections, financing arrangements, franchising
arrangements and agreements, consulting and sales methods and techniques,
expansion plans, forecasts and forecast assumptions, business practices,
operations and procedures, marketing and

 
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merchandising information, distribution techniques, customer information and
other business information, including records, designs, patents, business plans,
financial statements, manuals, memoranda, lists and other documentation
respecting the Company;

 
·  
All information and materials that are proprietary and confidential to a third
party and that have been provided to the Company by such third party for the
Company’s use; and

 
·  
All information derived from such Confidential Information.

 
Confidential Information shall not include information and materials that are
(i) already, or otherwise become, known by, or generally available to, Finn or
the public, other than as a result of an act or omission by Finn in breach of
the provisions of this Agreement or any other applicable agreement between Finn
and the Company or by another party in violation of an obligation of
confidentiality to the Company; (ii) required to be disclosed for Finn not to be
in violation of any applicable law or regulation; (iii) required to be disclosed
by Finn in connection with the enforcement of any of his rights under this
Agreement or any other agreements between Finn and the Company; or (iv) required
to be disclosed pursuant to an order of, or are necessary to be disclosed in
connection with any litigation or other proceeding in which testimony is
compelled before, any court or like entity or governmental authority; provided
that in any such case, Finn shall provide the Company with prompt notice of such
request, order or intended disclosure, cooperate reasonably with the Company in
resisting or limiting, as appropriate, the disclosure of such Confidential
Information via a protective order or other appropriate legal action, and shall
not make disclosure pursuant thereto until the Company has had a reasonable
opportunity to resist such disclosure, unless he is ordered otherwise pursuant
to an order of a court of competent jurisdiction or he is advised by his counsel
that such disclosure must be made at such time to avoid any legal penalty.
 
For purposes hereof, the term “Trade Secret” shall mean trade secrets of the
Company, including, without limitation, the whole or any portion or phase of any
scientific or technical information, design, process, formula, concept, data
organization, manual, other system documentation, or any improvement of any
thereof, in any case that is valuable and secret (in the sense that it is not
generally known to the Company’s competitors).
 
8.   Return of Company Property; Termination of Consultancy or Employment.  At
such time as Finn’s consultancy or employment with the Company is terminated for
any reason, he shall be required to participate in an exit interview for the
purpose of assuring a proper termination of his consultancy or employment, as
the case may be, and his obligations hereunder. On or before the actual date of
any termination, Finn or his representatives shall return to the Company all of
the Company’s records, materials and other physical objects obtained during his
consultancy and/or employment with the Company, including, without limitation,
all Company credit cards and access keys and all materials, containing or
derived from any Trade Secrets or Confidential Information.
 
9.   No Prior Agreements.  Finn hereby represents and warrants to the Company
that the execution of this Agreement by him and his consultancy and/or
employment by the Company and the performance of his duties hereunder will not
violate or be a breach of any agreement with a former employer, client or any
other person or entity. Further, Finn agrees to indemnify
 
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the Company for, and hold the Company harmless from, and against, all claims by
any third party that such third party may now have, or may hereafter come to
have, against the Company based upon, or arising out of, any violation of breach
or any noncompetition, invention or secrecy agreement between Finn and such
third party that was in existence as of the date of this Agreement, and all
other expenses directly related thereto incurred by the Company, including, but
not limited to, reasonable attorneys’ fees and expenses and expenses of
investigation.
 
10.   Non-disparagement.  The Parties agree that, other than in connection with
any lawsuit, arbitration or other proceeding arising from or relating to this
Agreement, (a) Finn will not denigrate, disparage, criticize, or make any
negative statements concerning the Company or its affiliates or any of their
respective officers, directors or employees and (b) the Company will not
denigrate, disparage, criticize, or make any negative statements concerning
Finn. Except as may be required by any applicable law, rule or regulation or
advisable in the good faith determination of a party hereto, in the event of any
termination of this Agreement for any reason, the parties shall respond to any
inquiries by stating that there was mutual agreement to terminate this
Agreement.
 
11.   Binding Effect; Assignment.  This Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties hereto and their respective
heirs, legal representatives, successors and assigns. Finn understands that he
has been selected by the Company on the basis of his personal qualifications,
experience and skills. Finn agrees, therefore, that he cannot assign all or any
portion of his performance obligations under this Agreement.
 
12.   Complete Agreement.  Finn has no oral representations, understandings or
agreements with the Company or any of its affiliates or any of its officers,
directors or representatives covering the same subject matter as this Agreement.
This written Agreement is the final, complete and exclusive statement and
expression of the agreement between the Company and Finn regarding the subject
matter contained herein and therein and of all the terms of this Agreement, it
cannot be varied, contradicted or supplemented by evidence of any prior or
contemporaneous oral or written agreements and any such prior agreements are
hereby superseded by this Agreement.
 
13.   Notices.  
 
(a) Any notice, designation, communication, request, demand or other document,
required or permitted to be given or sent or delivered hereunder to any party
hereto shall be in writing and shall be sufficiently given or sent or delivered
if it is:
 
(i)  
delivered personally to Finn or, in the case of the Company, to the address and
person noted below,

 
(ii)  
sent to the party entitled to receive it by registered mail, postage prepaid,
mailed in the United States,

 
(iii)  
sent by facsimile machine.

 
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(b) Notices shall be sent to the following addresses or facsimile numbers:
 
(i)  
in the case of Finn,

                                        

Thomas Finn
12906 Tufton Woods Court
Reisterstown, MD 21136
Facsimile:
                                        

(ii)  
in the case of the Company,

 
Medis Technologies Ltd.
805 Third Avenue
New York, New York 10022
Attention:   Jose Mejia
Facsimile:    (212) 935-9216

with a copy to,

Herrick, Feinstein LLP
2 Park Avenue
New York, New York 10022
Attention: Stephen E. Fox, Esq.
Facsimile: (212) 545-3476
 
or to such other address or facsimile number as the party entitled to or
receiving such notice, designation, communication, request, demand or other
document shall, by a notice given in accordance with this section, have
communicated to the party giving or sending or delivering such notice,
designation, communication, request, demand or other document.
 
(c) Any notice, designation, communication, request, demand or other document
given or sent or delivered as aforesaid shall:
 
(i)  
if delivered as aforesaid, be deemed to have been given, sent, delivered and
received on the date of delivery;

 
(ii)  
if sent by mail as aforesaid, be deemed to have been given, sent, delivered and
received (but not actually received) on the third business day following the
date of mailing; and

 
(iii)  
if sent by facsimile machine, be deemed to have been given, sent, delivered and
received on the date the sender receives the facsimile answer back confirming
receipt by the recipient.

 
14.   Severability; Pleadings.  It is the intention of the parties that the
provisions hereof shall be enforceable to the fullest extent permitted under
applicable law, and that the unenforceability of any provision hereof, or any
portion thereof, shall not render unenforceable
 
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or otherwise impair any other provisions or portions thereof. If any provision
of this Agreement is determined by a court of competent jurisdiction to be
unenforceable, void or invalid in whole or in part, this Agreement shall be
deemed amended to delete or modify, as necessary, the offending provisions or
portions thereof and to alter the bounds thereof, including specifically, any
time, place and manner restrictions contained in any of the restrictive
covenants contained herein, in order to render it valid and enforceable. In any
event, the balance of this Agreement shall be enforced to the fullest extent
possible without regard to such unenforceable, void or invalid provisions or
part thereof. The Section headings herein are for reference purposes only and
are not intended in any way to describe, interpret, define or limit the extent
or intent of the Agreement or of any part hereof.
 
15.   Company Actions.  Finn acknowledges that, except as provided in Section
4(e) hereof, in any action by the Company to enforce the provisions of this
Agreement, claims asserted by Finn against the Company arising out of his
consultancy or employment, as the case may be, with the Company or otherwise
shall not constitute a defense to enforcement of his obligations hereunder.
 
16.   Governing Law and Forum.  This Agreement shall in all respects be
construed according to the laws of the State of New York, without regard to its
choice of law principle (other than Section 5-1401 of the General Obligations
Law of the State of New York). Other than as expressly provided in Section 21 of
this Agreement, the Company and Finn agree that any claims concerning the rights
and obligations of the parties or any other issue arising under this Agreement
shall be brought in New York Supreme Court, County of New York, or the United
States District Court for the Southern District of New York, and that such
courts shall have exclusive jurisdiction over litigation involving any such
claims. Other than as expressly provided in Section 21 of this Agreement, the
Company and Finn agree to submit to the jurisdiction of such courts and that
they will not raise lack of personal jurisdiction or inconvenient forum as
defenses in any such litigation.
 
17.   Counterparts.  This Agreement may be executed in counterparts and any
party hereto may execute any such counterpart, each of which when executed and
delivered shall be deemed to be an original and all of which counterparts taken
together shall constitute but one and the same instrument. This Agreement shall
become binding when all counterparts taken together shall have been executed and
delivered (which deliveries may be by facsimile) by the parties.
 
18.   Modifications.  This Agreement may not be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought, or his or its duly authorized representative or officer. No waiver by
Finn or the Company of any breach of any provision hereof will be deemed a
waiver of any prior or subsequent breach of the same or any other provision. The
failure of Finn or the Company to exercise any right provided herein will not be
deemed on any subsequent occasions to be a waiver of any right granted hereunder
to either of them.
 
19.   Survival.  The provisions of Sections 4, 5(e), 5(f), 6, 7, 8, 9 and 10
hereof shall survive termination of this Agreement for any reason.
 
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20.   FINN ACKNOWLEDGES THAT, BEFORE SIGNING THIS AGREEMENT, HE WAS GIVEN AN
OPPORTUNITY TO READ IT, CAREFULLY EVALUATE IT, AND ASK ANY QUESTIONS HE MAY HAVE
HAD REGARDING IT OR ITS PROVISIONS. FINN ALSO ACKNOWLEDGES THAT HE HAD THE RIGHT
TO HAVE THIS AGREEMENT REVIEWED BY INDEPENDENT LEGAL COUNSEL OF HIS CHOOSING AND
THAT THE COMPANY GAVE HIM A REASONABLE PERIOD OF TIME TO DO SO IF HE SO WISHED.
FINN FURTHER ACKNOWLEDGES THAT HE IS NOT BOUND BY ANY AGREEMENT THAT WOULD
PREVENT HIM FROM PERFORMING HIS DUTIES AS SET FORTH HEREIN, NOR DOES HE KNOW OF
ANY OTHER REASON WHY HE WOULD NOT BE ABLE TO PERFORM HIS DUTIES AS SET FORTH
HEREIN.
 
21.   Dispute Resolution.  Except with respect to disputes or claims under
Sections 4, 6 or 7 hereof or with respect to any equitable remedy sought by a
party hereto, which shall be governed by Section 16 hereof, this Agreement and
the rights of any and all parties hereto pursuant hereto shall be governed by
and construed in accordance with the Federal Arbitration Act, 9 U.S.C. Section
1, et seq. Any such controversy or claim arising out of or relating to this
Agreement, or any breach hereof, shall be settled by the following procedures:
 
(a) any party may send another party written notice identifying the matter in
dispute and invoking the procedures of this Section. Within fourteen (14) days,
each party involved in the dispute shall meet at a mutually agreeable location
(which shall be in the County of New York unless otherwise agreed to by the
parties), for the purpose of determining whether they can resolve the dispute
themselves by written agreement, and, if not, whether they can agree upon a
third party arbitrator (the “Arbitrator”) to whom to submit the matter in
dispute for final and binding arbitration;
 
(b) if such parties fail to resolve the dispute by written agreement or fail to
agree on the identity of the Arbitrator within said fourteen (14) day period,
then any such party may make a written application to the Judicial Arbitration
and Mediation Services (“JAMS”) for a list of five (5) potential Arbitrators in
New York, New York, or other mutually agreed upon location, to be mailed to the
parties. The parties shall strike names of the five (5) Arbitrators
alternatively (with the non-initiating party striking first) until only one
named Arbitrator remains. If a party refuses to engage in the striking process
within seven (7) days of receipt of the list, JAMS shall allow the party willing
to engage in the striking process to strike three (3) names and JAMS will select
an Arbitrator from among the remaining two (2) names; and
 
(c) within thirty (30) days of such selection process, the parties involved in
the dispute shall meet in New York, New York, or other mutually agreed upon
location with the Arbitrator at a place and time designated by such Arbitrator,
and present their respective positions on the dispute. Each party shall have no
longer than one (1) day to present its position, the entire proceedings before
the Arbitrator shall be no more than two (2) consecutive days, and the decision
of the Arbitrator shall be made in writing no more than thirty (30) days
following the end of the proceeding. Such an award shall be a final and binding
determination of the dispute (a “Final Determination”) and shall be fully
enforceable as an arbitration decision in any court having jurisdiction and
venue over such parties. The arbitrator shall have the authority to award any
remedy and/or damages that could be awarded by a court. The prevailing party (as
 
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determined by the Arbitrator) shall, in addition, be awarded by the Arbitrator
the prevailing party’s attorneys’ fees and expenses in connection with such
proceeding.
 
 

 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

 
COMPANY:
 
MEDIS TECHNOLOGIES LTD.
 

 
By:  /s/ Jose Mejia

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Name:  Jose Mejia
Title:    President and Chief Executive Officer
 

 

 

FINN:

/s/ Thomas Finn

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THOMAS FINN
 

 
 
 

 
 

 
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