WWW.EXFILE.COM, INC. -- CELL KINETICS LTD. -- EXHIBIT 10.2 TO FORM F-1


    EXHIBIT
      10.2

     

    
      
        	
                Medis-El  -
                  Cell Kinetics Service Ag.

              	 	
                Execution
                  Copy

              


      

    

     

    SERVICE
      AGREEMENT

     

    THIS
      SERVICE AGREEMENT (this “Agreement”), effective date
      as of July 27, 2007 ("Effective Date"), by and between
MEDIS EL LTD., a company incorporated in Israel (company
      no.
      1213001), with offices at 2 Yodfat St. Global Park, Lod 71291, Israel
      (“Medis-El”), MEDIS TECHNOLOGIES LTD., a
      corporation incorporated in New York (“Med.Tech”, and
      collectively with Med-El, “Medis”), and CELL KINETICS
      LTD., a company incorporated in Israel (company
      no. 1213017), with offices at 2 Yodfat St. Global Park, Lod 71291, Israel
      (“CK”).

     

     

    W I T N E S S E T H:

     

    WHEREAS,
      CK is involved, inter alia, in the development, manufacture, marketing and
      sale
      of the cell scanning system known as the CellScan (the “CellScan
      Business”); and

     

    WHERES,
      Medis-El is the controlling shareholder of CK; and

     

    WHEREAS, Med.Tech
      is the parent company of Medis-El; and

     

    WHEREAS,
      Med.Tech and Medis-El wish to provide to CK and CK wishes to obtain from
      Med.Tech and Medis-El certain services as further detailed in this Agreement;
      and

     

    WHEREAS, the
      parties wish to describe their understanding in connection with the grant of
      the
      abovementioned services.

     

     

    NOW,
      THEREFORE, the parties agree as follows:

     

    
      	
              1.         
                 

            	
              SERVICES

            


    

     

    Med.Tech
      and Medis-El jointly undertake to provide CK with the services set forth in
      Exhibit 1.

     

     

    
      	
              2.         
                 

            	
              CHARGING
                AND CONSIDERATION

            


    

     

    2.1.  In
      consideration for the services to be provided to CK under this Agreement, Medis
      shall charge CK with an amount to be calculated by Medis according to the
      principles set forth in Exhibit
2.1

     

    2.2.  The  amounts
      which should otherwise have been charged by Med.Tech to CK according to section
      2.1 above, shall be charged by Medis-El, and Medis-El hereby undertakes to
      repay
      Med.Tech such amount, either directly or indirectly through
      Medis,Inc.

     

    2.3.  The
      amounts charged by Medis-El to CK pursuant to section 2.1 above and the amounts
      charged by Med.Tech. to CK and assigned to Medis-El pursuant to section 2.2
      above, shall be charged to CK’s appropriate asset or expense accounts and shall
      be credited as additional contribution to the share capital of CK issued to
      Medis.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
        	
                Medis-El  -
                  Cell Kinetics Service Ag.

              	 	
                Execution
                  Copy

              


      

    

     

     

    
      	
              3.        
                  

            	
              TERM

            


    

     

    This
      Agreement shall enter into force upon its execution by all parties thereto
      and
      shall then take effect as of July 27, 2007 and shall remain in force for a
      period of 18 months from the closing of the initial rights offering by CK to
      Med.Tech.’s stockholders.

     

     

    
      	
              4.         
                 

            	
              GENERAL
                PROVISIONS

            


    

     

    4.1.  Expenses.  Except
      as otherwise provided, each party shall bear its respective direct and indirect
      expenses incurred in connection with the negotiation, preparation, execution
      and
      performance of this Agreement and the transaction contemplated
      hereby.

     

    4.2.  Miscellaneous
      Tax Matters.  All amounts set forth in this Agreement are
      exclusive of tax, which if, applicable, shall be added to such amount by the
      payor.

     

    4.3.  Notices.  All
      notices, requests, claims, demands and other communications hereunder shall
      be
      in writing and shall be given or made (and shall be deemed to have been duly
      given or made upon receipt) by delivery in person, by overnight courier service,
      by cable, by facsimile, by telegram, by telex or by registered or certified
      mail
      (postage prepaid, return receipt requested) to the respective parties at the
      following addresses (or at such other address for a party as shall be specified
      in a notice given in accordance with this Section 4.3):

    
      	 	 


      	 	
              if
                to the Medis-El:

            


      	 	 


      	
               

            	
              Medis
                El Ltd.

            


    

    
      	
               

            	
              2
                Yodfat St. Global Park

            


    

    
      	
               

            	
              Lod
                71291

            


    

    
      	
               

            	
              Israel

            


    

    
      	
               

            	
              Attn:
                VP Finance

            


    

    
      	
               

            	
              Tel:
                +972-8-9188600

            


    

    
      	
               

            	
              Fax:
                +972-8-9200024

            


    

     

     

    
      	 	if
              to the CK:


      	 	 


      	
               

            	
              Cell
                Kinetics Ltd.

            


    

    
      	
               

            	
              2
                Yodfat St. Global Park

            


    

    
      	
               

            	
              Lod
                71291

            


    

    
      	
               

            	
              Israel

            


    

    
      	
               

            	
              Attn:
                Chief Executive Officer

            


    

    
      	
               

            	
              Tel
                +972-8-9188600

            


    

    
      	
               

            	
              Fax
                +972-8-9200024

            


    

     

    or
      such
      other address with respect to a party as such party shall notify each other
      party in writing as above provided.

     

     

    4.4.  Headings.
      The headings contained in this Agreement are for reference purposes only and
      shall not affect in any way the meaning or interpretation of this
      Agreement.

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        
          	
                  Medis-El  -
                    Cell Kinetics Service Ag.

                	 	
                  Execution
                    Copy

                


        

      

       

       

    

    4.5.  Severability.  If
      any term or other provision of this Agreement is invalid, illegal or incapable
      of being enforced by any applicable law or public policy, all other conditions
      and provisions of this Agreement shall nevertheless remain in full force and
      effect so long as the economic or legal substance of the transactions
      contemplated hereby is not fundamentally changed.  Upon such
      determination that any term or other provision is invalid, illegal or incapable
      of being enforced, the parties hereto shall negotiate in good faith to modify
      this Agreement so as to effect the original intent of the parties as closely
      as
      possible in a mutually acceptable manner in order that the transactions
      contemplated hereby be consummated as originally contemplated to the greatest
      extent possible.

     

    4.6.  Entire
      Agreement.  This Agreement constitutes the entire
      agreement of the parties hereto with respect to the subject matter hereof and
      supersedes all prior agreements and undertakings, both written and oral, between
      the parties hereto with respect to the subject matter hereof.

     

    4.7.  Amendment.  This
      Agreement may not be amended or modified except by an instrument in writing
      signed by the Transferee and the Transferor.

     

    4.8.  No
      Third-Party Beneficiaries. This Agreement is for the sole benefit
      of the parties hereto and their permitted assigns and nothing herein, express
      or
      implied, is intended to or shall confer upon any other Person or entity any
      legal or equitable right, benefit or remedy of any nature whatsoever under
      or by
      reason of this Agreement.

     

    4.9.  Governing
      Law. This Agreement shall be governed by, and construed in
      accordance with, the Laws of the State of Israel, without regard to the conflict
      of laws provisions thereof, and any dispute with respect to this Agreement
      or
      its execution, biding effect, performance or interpretation shall be adjudicated
      solely in the Courts of the District of Tel Aviv, Israel.

     

    4.10.    Counterparts.  This
      Agreement may be executed in one or more counterparts, and by the different
      parties hereto in separate counterparts, each of which when executed shall
      be
      deemed to be an original but all of which taken together shall constitute one
      and the same agreement.  Delivery of an executed counterpart of a
      signature page to this Agreement by telecopier shall be effective as delivery
      of
      a manually executed counterpart of this Agreement.

     

    
      	
               

            	
               

            	
              -
                signature page follows
                -

            


    

     

     

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        
          	
                  Medis-El  -
                    Cell Kinetics Service Ag.

                	 	
                  Execution
                    Copy

                


        

      

       

       

    

    IN
      WITNESS WHEREOF, the Transferor and the Transferee have caused this
      Agreement to be executed by their respective officers thereunto duly authorized,
      and effective as the Effective Date.

     

    


     

    
      	
              MEDIS
                EL LTD.

            	 	
              CELL
                KINETICS LTD.

            
	 	 	 	 	 
	
              By:

            	/s/ 
              Israel Fisher 	 	
              By:

            	/s/ 
              Asaf Ben-Arye 
	 	 	 	 	 
	
              Name:

            	Israel
              Fisher 	 	
              Name:

            	Asaf
              Ben-Arye 
	 	 	 	 	 
	
              Title:

            	Senior
              Vice President 	 	
              Title:

            	President
              and CEO 
	 	 	 	 	 
	
              By:

            	 	 	
              By:

            	 
	 	 	 	 	 
	
              Name:

            	 	 	
              Name:

            	 
	 	 	 	 	 
	
              Title:

            	 	 	
              Title:

            	 


    

    


     

    
      	
               

               

              MEDIS
                TECHNOLOGIES LTD.

            	 	 
	 	 	 	 	 
	
              By:

            	/s/ 
              Israel Fisher 	 	 	 
	 	 	 	 	 
	
              Name:

            	Israel
              Fisher 	 	 	 
	 	 	 	 	 
	
              Title:

            	Senior
              Vice President 	 	 	 


    

                                                                             

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        
          	
                  Medis-El  -
                    Cell Kinetics Service Ag.

                	 	
                  Execution
                    Copy

                


        

      

       

       

    

    LIST
      OF EXHIBITS

     

    
      	
               

              Exhibit
                1

               

            	
               

              —

            	
               

              Services

               

            
	
               

              Exhibit
                2.1

               

            	
              
                 

                —

              

            	
               

              Principles
                for Cost Allocation for Reimbursement

               

            


    

    
 

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        
          	
                  Medis-El  -
                    Cell Kinetics Service Ag.

                	 	
                  Execution
                    Copy

                


        

      

       



    EXHIBIT
      1


    SERVICES

     

    


     

    During
      the term of this Agreement, Medisshall provide CK with the following
      Services:

     

    
      	
              1.           

            	
               Finance,
                managerial and administrative

            


    

     

    
      	
              2.           

            	
              Purchasing,
                All the activity for purchasing supplies and services needed for
                regular
                activity of CK which is done by the purchasing and supply chain department
                of Medis El, including inter alia, issuing of purchase order after
                negotiations with suppliers, shipments, warehouse services
                etc.

            


    

     

    
      	
              3.           

            	
              Office
                and laboratory space, including electricity, telephone fax and internet
                connection and use of computer network and maintenance
                services.

            


    

     

    
      	
              4.           

            	
              Security.

            


    

     

    
      	
              5.           

            	
              Secretarial
                services .

            


    

     

    
      	
              6.           

            	
              Information
                technology

            


    

     

     

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        
          	
                  Medis-El  -
                    Cell Kinetics Service Ag.

                	 	
                  Execution
                    Copy

                


        

      

       

    

    EXHIBIT
      2.1

     

    COST
      CHARGING/ALLOCATION

     

    


     

    Cost
      items and balance sheet items identified by Medis as specifically related to
      the
      CellScan Business shall be allocated to CK on a 100% basis.

     

    Cost
      items identified by Medis as relevant to the CellScan Business as well as other
      businesses operated by Medis (such as occupancy, information technology and
      depreciation and amortization) shall be allocated by Medis between Medis and
      CK
      on proportional basis based on the following guidelines, to be implemented
      by
      Medis at its sole discretion.

     

    Costs
      related to shared services and corporate services, such as management and
      administration, stock based compensation, occupancy, accounting, legal,
      information technology, foreign currency translation adjustments and the like
      shall be allocated to CK on a proportional basis using an allocation base that
      would be expected to reasonably reflect the proportion of CK’s incurrence of
      such costs.

     

    Costs
      categories included in research and development (other than those allocated
      on a
      100% basis) shall be allocated as follows:

     

    Occupancy
      and depreciation and amortization shall be allocated based on relative square
      footage.

     

    Information
      technology costs shall be allocated based on relative headcount.

     

    Selling,
      marketing, general and administrative expenses shall be allocated based on
      relative total costs.