**EXHIBIT
10.1**
  
  **FIFTH
AMENDMENT TO LOAN AGREEMENT**
  FIFTH
AMENDMENT (this
“ Amendment ”)
entered into as of May 5, 2005 between MEDIS TECHNOLOGIES LTD., a Delaware
corporation (the “ Borrower ”) and
FLEET NATIONAL BANK, a Bank of America company (the “ Bank ”).
  WHEREAS,
the Borrower and the Bank are parties to a Loan Agreement dated as of December
29, 2000, as amended by a First Amendment to Loan Agreement dated as of October
24, 2002, a Second Amendment to Loan Agreement dated as of February 20, 2003, a
Third Amendment to Loan Agreement dated as of September 30, 2003 and Fourth
Amendment to Loan Agreement dated as of October 18, 2004 (the “ Agreement ”; all
capitalized terms used herein, unless otherwise defined herein, have the same
meanings provided therefor in the Agreement);
  WHEREAS,
the Borrower has requested, and the Bank has agreed, to extend the Termination
Date (as defined in the Agreement) and to increase the amount of the Commitment
(as defined in the Agreement), on the terms and conditions set forth in this
Amendment.
  NOW,
THEREFORE, for valuable and legally sufficient consideration, the receipt of
which is hereby acknowledged by the parties, the parties hereto hereby agree as
follows:
  **Article
1.**  **Article
1. Amendments to the Agreement.**
  1.1  The
definition of “Termination Date” appearing in Section 1.1 of the Agreement is
amended and restated to read in its entirety as follows:
  “ Termination
Date ” shall
mean April 1, 2007 or, if such date is not a Business Day, the Business Day next
succeeding such date.
 
 1.2  Section
2.1 of the Agreement is amended by replacing the amount “$5,000,000” in the
fourth line therein with the amount “$7,000,000”.
  1.3  Exhibit A
of the Agreement is amended and restated in its entirety to read as set forth in
Exhibit A hereto.
  **Article
2.**  **Acknowledgments
and Confirmations**
  2.1  The
Agreement and all other Loan Documents shall each be deemed amended hereby to
the extent necessary, if any, to give effect to the provisions of this
Amendment.
  2.2  All
Collateral is and shall continue to be collateral security for the Obligations,
as amended hereby. Without limiting the generality of the foregoing, the
Borrower hereby absolutely and unconditionally confirms that the Agreement (as
amended hereby), the Note (as amended and restated pursuant hereto), and all
other Loan Documents (to the extent amended hereby), to which it is a party, and
any other documents delivered by it in connection therewith,
 
 
 
 continue
in full force and effect, are ratified and confirmed in all respects and are and
shall continue to be fully effective.
  2.3  Whenever
the Agreement is referred to in the Agreement or in any of the other Loan
Documents or other documents delivered in connection therewith, it shall be
deemed to mean the Agreement as amended by this Amendment.
  2.4  Whenever
the Note is referred to in the Agreement or in any of the other Loan Documents
or other documents delivered in connection therewith, it shall be deemed to mean
the Amended and Restated Revolving Credit Note in the form of Exhibit A hereto,
delivered in connection herewith pursuant to Section 4.2 hereof (the
“ New
Note ”).
  **Article
3.**  **Representations
and Warranties.**
  The
Borrower hereby represents and warrants to the Bank that:
 
 3.1  The
Borrower has the power to execute, deliver and perform this Amendment, the New
Note and the Loan Documents (to which it is a party), as amended hereby, and has
taken all necessary action, corporate or otherwise, to authorize the execution,
delivery and performance thereof. No consent or approval of any Person, no
waiver of any Lien or right of distraint or other similar right and no consent,
license, approval, authorization or declaration of any governmental authority,
bureau or agency, or any other third party, is or will be required in connection
with the execution, delivery or performance by the Borrower of this Amendment,
the New Note or any of such Loan Documents, as amended hereby.
  3.2  The
execution and delivery by the Borrower of this Amendment and the New Note, and
the performance by it hereof and of the New Note, and of the Loan Documents as
amended hereby, will not violate any provision of law and will not conflict with
or result in a breach of any order, writ, injunction, ordinance, resolution,
decree, or other similar document or instrument of any court or governmental
authority, bureau or agency, domestic or foreign, or the organizational
documents of the Borrower, or create (with or without the giving of notice or
lapse of time, or both) a default under or breach of any agreement, bond, note
or indenture to which the Borrower is a party.
  3.3  This
Amendment and the New Note has been duly executed and delivered by the Borrower,
and constitutes its valid and legally binding obligation, enforceable in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, of other similar
laws, now or hereafter in effect, relating to or affecting the enforcement of
creditor's rights generally.
  3.4  The
representations and warranties of the Borrower set forth in the Agreement, the
other Loan Documents and/in the documents executed pursuant thereto or in
connection therewith, are true as of the date hereof, with the same effect as
though made on the date hereof, except to the extent necessarily rendered
inaccurate by the passage of time.
  3.5  After
giving effect to this Amendment, no Default or Event of Default
exists.
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 3.6  The
Borrower’s assets exceed its own (i.e. unconsolidated) liabilities, and the
Borrower is solvent. After giving effect to this Amendment, the Borrower will be
able to pay its debts as they mature, will own property with fair saleable value
greater than the amount required to pay its debts and will have capital
sufficient to carry on its business as then constituted.
  3.7  Upon the
effectiveness of this Amendment, the Borrower remains liable to the Bank with
respect to all Obligations, without offset, defense or counterclaim (any such
offset, defense or counterclaim as may exist being hereby irrevocably waived by
the Borrower). As of the date hereof, there are no Loans outstanding.
  3.8  There has
been no material adverse change in the financial condition of the Borrower since
the delivery of the annual audited financial statements required to be delivered
by the Borrower in accordance with Section 5.2(a) of the Agreement for the
fiscal year ended December 31, 2004.
  3.9  As of the
date hereof, the Borrower has not been required to deliver to the Bank any
Pledge Agreement in connection with the Loan Agreement.
  **Article
4.**  **Effectiveness
Conditions.**
  This
Amendment shall be effective upon completion of the following conditions
precedent (all documents to be in form and substance satisfactory to the Bank
and the Bank’s counsel):
  4.1  Receipt
by the Bank of executed counterparts of this Amendment duly signed by the
Borrower and the Bank, and joined in by the Guarantors.
  4.2  Receipt
by the Bank of the New Note, duly signed by the Borrower.
  4.3  Receipt
by the Bank of (i) a certificate of resolutions, incumbency and corporate
documents of the Borrower, approving the making of this Amendment and the New
Note, and (ii) the consent of the Partnership Guarantor to its joinder in this
Amendment, all in form and substance satisfactory to the Bank.
  4.4  Receipt
by the Bank’s counsel of all fees and expenses in connection with the
preparation, execution and delivery, administration, interpretation and
enforcement hereof and all other documents contemplated hereby.
  4.5  Receipt
by the Bank of a $5,000 amendment fee with respect to this
Amendment.
  4.6  Delivery
of such other documents, instruments and agreements as the Bank or its counsel
shall reasonably request.
  **Article
5.**  **Miscellaneous.**
  5.1  As
specifically amended herein, the Agreement and the other Loan Documents, shall
remain in full force and effect in accordance with their respective terms. This
Amendment
 
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 is
limited as written and shall not be deemed (a) to be an amendment of or a
consent under or waiver of any other term or condition of the Agreement or any
other Loan Document, or (b) to prejudice any right which the Bank now has or may
have in the future under or in connection with the Agreement or the other Loan
Documents, as new or hereafter amended.
  5.2  This
Amendment shall be governed and construed in accordance with the laws of the
State of New York.
  5.3  This
Amendment may be signed in any number of counterparts with the same effect as if
the signature thereto and hereto were upon the same instrument.
  [ *Signatures
Appear on the Following Page* .]
   -4-
  IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective duly authorized officers as of the
date first above written.
  MEDIS TECHNOLOGIES
      LTD.By:
    /s/ Howard
  WeingrowName: Howard WeingrowTitle:  
      President
  FLEET
      NATIONAL BANK,
      a Bank of America companyBy:
    /s/ Tanitha
  BoonyamName:  Tanitha BoonyamTitle:  Vice
      President
 
 
 
 
 
 
  
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  **JOINDER
BY GUARANTORS**
  
  Each of
the Guarantors indicated below hereby consents to this Fifth Amendment and
reaffirms its continuing liability under its respective Guarantee in respect of
the Agreement, as amended hereby, and all the documents, instruments and
agreements executed pursuant thereto or in connection therewith, without offset,
defense or counterclaim (any such offset, defense or counterclaim as may exist
being hereby irrevocably waived by such Guarantors).
 PLAZA HOTEL MANAGEMENT
      COMPANYBy:
    /s/ Howard
  WeingrowName: Howard WeingrowTitle:
      Partner
 
 ****By:
    /s/ Howard
  WeingrowHoward
      Weingrow, Individually
 
 ****By:
    /s/ Robert LiftonRobert
      Lifton, Individually
  
 
 
  -6-
  
 
 **Exhibit
A**
 
 **Form
of New Note**
 
 AMENDED
AND RESTATED
 REVOLVING
CREDIT NOTE
  
 $7,000,000.00
    As of May 5,
2005
 
  MEDIS
TECHNOLOGIES LTD., a Delaware corporation (the “ Borrower ”), for
value received, hereby promises to pay to the order of FLEET NATIONAL BANK, a
Bank of America company (the “ Bank ”), on
the Termination Date (as defined in the Loan Agreement dated as of December 29,
2000 as amended by a First Amendment to Loan Agreement dated as of October __,
2002, a Second Amendment to Loan Agreement dated as of February 20, 2003, a
Third Amendment to Loan Agreement dated as of September 30, 2003, a Fourth
Amendment to Loan Agreement dated as of October 18, 2004, and a Fifth Amendment
to Loan Agreement dated as of the date hereof, among the Borrower and the Bank,
as may be further amended from time to time, as so amended the “ Agreement ”; terms
defined in the Agreement shall have their defined meanings therefrom when used
in this Note), at the office of the Bank specified in Section 10.1 of the
Agreement, in lawful money of the United States of America and in immediately
available funds the principal amount of SEVEN MILLION and 00/100 DOLLARS
($7,000,000.00) or, if less than such principal amount, the aggregate unpaid
principal amount of all Loans made by the Bank to the Borrower pursuant to
Section 2.1 of the Agreement. The Borrower further promises to pay interest in
like money on the unpaid principal balance of this Note from time to time
outstanding at an annual rate as selected by the Borrower pursuant to the terms
of Article 2 of the Agreement. Interest shall be computed on the basis of a
360-day year for actual days elapsed and shall be payable as provided in the
Agreement. All Loans made by the Bank pursuant to Section 2.1 of the Agreement
and all payments of the principal thereon may be endorsed by the holder of this
Note on the schedule annexed hereto, to which the holder may add additional
pages, or on a similar record maintained elsewhere by the Bank. The aggregate
net unpaid amount of Revolving Credit Loans set forth in such schedule or other
record shall be presumed to be the principal balance hereof. This Note shall
bear interest at the Post Default Rate as and when provided for in the
Agreement, but in no event in excess of the maximum rate of interest permitted
under applicable law.
  This Note
is the “Note” referred to in the Agreement (and the “New Note” referred to in
the said Fifth Amendment to Loan Agreement), and is subject thereto in all
respects. This Note may be prepaid, and is required to be prepaid, in whole or
in part (subject to the terms and conditions therefor provided in the Agreement)
as provided therein.
  Upon the
occurrence of any one or more of the Events of Default specified in the
Agreement, all amounts then remaining unpaid on this Note may be declared to be
immediately
 
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 due
and payable (or, where so provided, shall be automatically due and payable) as
provided in the Agreement. This Note is secured by the collateral described in
each Security Document.
  This Note
shall be construed in accordance with and governed by the laws of the State of
New York.
  This Note
shall replace and supersede the Revolving Credit Note made by the Borrower to
the order of the Bank **** dated
December 29, 2000 (the “ Prior
Note ”);
provided, however, that the execution and delivery of this Note shall not in any
circumstance be deemed to have terminated, extinguished or discharged the
Borrower’s liabilities under such Prior Note, all of which liabilities shall
continue under and be governed by this Note and the other Loan Documents. This
Note is a replacement, amendment and restatement of the Prior Note and IS NOT A
NOVATION. The Borrower shall also pay, and this Note shall also evidence, any
and all unpaid interest on all Loans made by the Bank to the Borrower pursuant
to Prior Note, and at the interest rate specified therein, for which this Note
has been issued as replacement therefor.
  MEDIS TECHNOLOGIES
      LTD.By:
    /s/Name:Title:
 
  
  
  
  
  
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  SCHEDULE
OF LOANS AND PAYMENTS OF PRINCIPAL TO
 AMENDED
AND RESTATED REVOLVING CREDIT NOTE DATED AS OF MAY 5, 2005
 
 
 Date
    Amount
      of
      Loan
    Interest
      Period
    Last
      Day
      of
      Interest
      Period
    Principal
      Paid
    Balance
      Remaining
      Unpaid
    Notation
      Made
      By
 
 
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