WWW.EXFILE.COM, INC. -- 13497 -- MEDIS TECHNOLOGIES LTD. -- EXHIBIT 10.3 TO FORM 10-Q


EXHIBIT 10.3

PROMISSORY NOTE

Dated: January 18, 2005

$50,000.00

FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to the order of
Medis Technologies Ltd. (“Medis”), a Delaware corporation, or its assigns (Medis and any subsequent
holder of this Note being hereinafter sometimes referred to as the
“Holder”), Fifty Thousand Dollars
($50,000.00), in lawful money of the United States of America, on September 30,
2005 (the “Maturity Date”). The
Borrower further promises to pay interest on the unpaid principal balance of
this Note from time to time outstanding at a rate equal to 3.0%, until the
entire principal amount hereof has been paid in full. Interest on this note
shall be due and payable monthly. All accrued and unpaid interest shall be paid
in full on the Maturity Date.

This Note is subject to the following further terms and
conditions:

1.     All payments of principal and of interest on
this Note shall be made at the principal offices of Medis or at such other
location either within or outside of the United States of America as may be
designated from time to time in writing by notice given by the Holder to the
Borrower.

2.      Monthly interest payments shall be
deducted from the monthly consulting fee that the Borrower receives from the
Holder.

3.     (a) The Borrower may, at the Borrower’s
option, prepay this Note in whole or in part at any time or from time to time
without penalty or premium.

 (b) The Borrower is the beneficial owner of certain warrants to
purchase common stock of Medis, issued to the Borrower in connection with the
Borrower’s consulting agreement with Medis (the “Warrants”). Upon the sale of
any shares issued pursuant to the exercise of the Warrants, the Borrower shall
immediately apply the proceeds from such sale, less the exercise price of the
Warrants, to prepay this Note, up to an aggregate of 10,000 Warrants
exercised.

4.     Notwithstanding any other provision of this
Note, the entire principal amount outstanding, and any accrued interest, shall
be due and payable on the earliest of (a) the Maturity Date, or (b) three months
following the termination of the Borrower providing consulting services to the
Holder or any of its affiliates.

5.     Any repayments made under this Note shall be
first applied to the payment of any unpaid and accrued interest and then to the
payment of the principal amount outstanding hereunder.

6.     (a) Upon the failure of the Borrower to pay
the principal and/or interest on the Note when and as the same becomes due and
payable, whether at maturity thereof, upon the occurrence of an event requiring
mandatory prepayment under Section 3(b) hereof, or upon the Borrower’s
termination of providing consulting requiring payment in full under Section 4
hereof, and such failure to pay principal and/or interest continues for ten (10)
days; or (b) if the Borrower shall file a petition in bankruptcy or for an
arrangement or any similar relief pursuant to Title 11 of the United States Code
or under any similar present or future federal law or the law of any other
jurisdiction or shall be adjudicated a bankrupt or insolvent, or consent to the


 

 







 

appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of all or any
substantial part of the Borrower’s property, or shall make a general assignment
for the benefit of creditors, or shall admit the Borrower’s inability to pay the
Borrower’s debts generally as they become due, or shall take any action in
furtherance of any of the foregoing and such event is not cured within 60 days
(each of the events described in clauses (a) and (b) being referred to herein as
an “Event of Default”), then, and in any such event, the Holder may declare, by
written notice of the Event of Default given to the Borrower, the entire
principal amount of this Note to be forthwith due and payable, whereupon the
entire principal amount of this Note outstanding and any accrued and unpaid
interest hereunder shall become due and payable without presentment, demand,
protest, notice of dishonor and all other demands and notices of any kind, all
of which are hereby expressly waived.

7.    (a)  The validity, performance and enforcement
of this Note shall be governed by the laws of the State of New York, without
giving effect to the principles of the conflicts of law thereof.

(b)   Any litigation based hereon, or arising out of, under, or
in connection with, this Note shall be brought and maintained exclusively in the
courts of the State of New York or in the United States District Court for the
Southern District of New York. The Borrower hereby expressly and irrevocably
submits to the personal jurisdiction of the courts of the State of New York and
of the United States District Court for the Southern District of New York for
the purpose of any such litigation as set forth above and irrevocably agrees to
be bound by any judgment rendered thereby in connection with such litigation,
subject to such Borrower’s right to contest such judgment by motion or appeal on
any grounds not expressly waived in this Section 7(b). The Borrower hereby
irrevocably consents to the service of process by registered mail, postage
prepaid, or by personal service within or without the State of New York. The
Borrower hereby expressly and irrevocably waives, to the fullest extent
permitted by law, any objection which it may have or hereafter may have to the
laying of venue of any such litigation brought in any such court referred to
above and any claim that any such litigation has been brought in an inconvenient
forum. To the extent that the Borrower has or hereafter may acquire any immunity
from jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of execution
or otherwise) with respect to the Borrower or the Borrower’s property, the
Borrower hereby irrevocably waives such immunity in respect of its obligations
under this Note. The Borrower hereby expressly waives the right to a trial by
jury for the purpose of any such litigation as set forth above. 

(c)   If the date set for payment of principal or interest
hereunder is a Saturday, Sunday or legal holiday, then such payment shall be due
on the next succeeding business day.

(d)   The Borrower hereby waives presentment, demand, protest,
notice of dishonor, diligence and all other notices, any release or discharge
arising from any extension of time, discharge of a prior party, release of any
or all of any security given from time to time for this Note, or other cause of
release or discharge other than actual payment in full hereof.

(e)   The Borrower shall not be deemed, by any act or omission,
to have waived any of its rights or remedies hereunder unless such waiver is in
writing and signed by the Holder and then only to the extent specifically set
forth in such writing. A waiver with reference to one event shall not be
construed as continuing or as a bar to or waiver of any right or remedy as to a
subsequent event. No delay or omission of the Holder to exercise any right,
whether before or after a default hereunder, shall impair any such right or
shall be construed to be a waiver of any right or default, and the acceptance at
any time by the Holder of any past-due amount shall not 

 

- 2 -

 

 

 







 

be deemed to be a waiver of the right to require prompt payment when due
of any other amounts then or thereafter due and payable.

(f)    To the extent permitted by law, the remedies of the
Holder as provided herein, or any one or more of them, or in law or in equity,
shall be cumulative and concurrent, and may be pursued singularly, successively
or together at the Holder’s sole discretion, and may be exercised as often as
occasion therefor shall occur.

(g)   If any provisions of this Note would require the Borrower
to pay interest hereon at a rate exceeding the highest rate allowed by
applicable law, the Borrower shall instead pay interest under this Note at the
highest rate permitted by applicable law.

 


	
      /s/

	
      
      


      
      

	
      MICHELLE RUSH

	
       




 



 

- 3 -

 

 

 







 

 

AMENDMENT 

TO 

PROMISSORY NOTE

AMENDMENT, dated as of May 9, 2005, between Michelle Rush
(“Borrower"), and Medis
Technologies Ltd., a Delaware corporation ("Lender").

WHEREAS, Borrower has heretofore delivered to Lender a Promissory Note,
dated as of January 18, 2005 (the "Note"); and

WHEREAS, Borrower and Lender desire to amend the Note as hereinafter set
forth.

NOW, THEREFORE, the
parties agree as follows:

1.          The Note is
hereby amended by deleting in its entirety section 6 and replacing same with the
following:

6. (a) Holder may, by written notice to Borrower, at any time and at its
option, declare the outstanding principal amount of this Note plus all accrued
but unpaid interest due and payable upon the occurrence of any of the following
events ("Events of Default"): (i)
The failure of the Borrower to pay the principal and/or interest on the Note
when and as the same becomes due and payable, and such failure to pay principal
and/or interest continues for ten (10) days; or (ii) If the Borrower shall file
a petition in bankruptcy or for an arrangement or any similar relief pursuant to
Title 11 of the United States Code or under any similar present or future
federal law or the law of any other jurisdiction or shall be adjudicated a
bankrupt or insolvent, or consent to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of all or any substantial part of the Borrower’s property, or
shall make a general assignment for the benefit of creditors, or shall admit the
Borrower’s inability to pay the Borrower’s debts generally as they become due,
or shall take any action in furtherance of any of the foregoing and such event
is not cured within 60 days.

(b) Borrower hereby pledges and grants to Holder a security interest in
the Collateral (as defined below) and all of the proceeds thereof to secure the
performance of all obligations of Borrower under this Note. As used in this
Note, the term "Collateral" shall
mean all of Borrower’s right, title and interest in and to the Borrower’s assets
and all consideration therefor or replacements thereof, including but not
limited to the Warrants. Maker agrees to execute and deliver to Holder any and
all documents or instruments reasonably requested by Holder to perfect the
security interest granted hereby, including, without limitation, a UCC-1
financing statement and authorizes the Holder to do the foregoing in the
Borrower’s name. Without limitation to any other right or remedy under this Note
or at law or in equity, 

 

- 4 -

 

 

 







 

upon the occurrence of an Event of Default, Holder shall have and may
exercise all of the rights and remedies of a secured party under the Uniform
Commercial Code as enacted in any state governing the exercise of remedies with
respect to the Collateral.

(c) This Note represents a full recourse obligation of the Borrower, and
the Holder shall have all rights and remedies available to it at law or in
equity with respect hereto upon the occurrence of an Event of
Default.

3.          Except as
expressly amended hereby, the Note shall remain in full force and
effect.

IN WITNESS WHEREOF, Borrower and Lender have executed this Amendment as of the date
hereinabove set forth.


	
      MICHELLE RUSH, Borrower

	
       

	
      By: /s/ MICHELLE
      RUSH

	
       

	
       

	
      MEDIS TECHNOLOGIES LTD., Lender

	
       

	
      By: /s/ Michael S.
  Resnick

	
       

	
       




                

 

 

- 5 -