Document:

Exhibit
10.2

 

	
  SPECIAL PERSONAL EMPLOYMENT CONTRACT

  	
   

  	
  MEDIS EL LTD.

  

 

ENTERED INTO ON THE 15TH
DAY OF JULY 2002

 

	
  BETWEEN

  	
   

  	
  MEDIS EL LTD. – 14 SHIVZEI YEHUD

  
	
   

  	
   

  	
  (HEREINAFTER “COMPANY”)

  	
  AS ONE PARTY

  
	
   

  	
   

  	
   

  
	
  AND

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MR. YAAKOV WEISS IDENTITY CARD NO. 011178514,

  6 IBN SHMUEL STREET, JERUSALEM 97230

  

 

Whereas the employee represents that he possesses the professional
knowledge and expertise in the field of business development.

 

Whereas the Company desires to employ the employee in his field of
expertise by a special personal contract.

 

Whereas the Employee desires to be employed by the Company by a
personal contract.

 

Therefore
it is stipulated and agreed among the Parties as follows:

 

1.                                      Preamble

 

The Preamble to
this contract constitutes an integral part thereof.

 

2.                                      Term of Contract:

 

The contract
commences on the date of 1.7.2002 and may be terminated upon prior notice as
set forth in section 9 herein.

 

3.                                      Special Contract

 

3.1                                 This
special personal contract is comprehensive and arranges the relationship
between the Company and the Employee and exclusively determines all the terms
of the employee’s employment by the Company.

 

3.2                                 The
engagement among the Company and the employee established hereunder is for a
determined period as set forth in the foregoing section 2 subject to the
provisions of section 9 herein and shall not confer upon the employee the
status of a permanent employee in the Company.

 

1

 

4.                                      Personal Loyalty

 

4.1                                 The
employee undertakes to work during the contract period with devotion and
loyalty and to use all his abilities, knowledge and experience for the benefit
of the Company and to fulfill all tasks given to him by the Company.

 

4.2                                 The
employee undertakes to heed the directives of his supervisors and fulfill all
written and verbal directives and procedures of the Company, including those
relating to work, safety and sanitary procedures, work hours, attendance,
disciplinary directives and procedures.

These directives and
procedures constitute an integral part hereof and shall bind the parties.

 

4.3                                 The
employee undertakes to notify the Company, immediately without any delay, of
any matter or issue in respect of which he has a personal interest and/or that
may create a conflict of interest with his position at the Company.

 

5.                                      Work

 

5.1                                 The
employee undertakes to perform every task assigned to him in the field of his
expertise.

 

5.2                                 The
Employee undertakes to work such hours as required by his position including
additional hours as approved by the management of the Company.

 

5.3                                 The
weekly hours are: 40 hours, Sunday – Thursday between 08:30 – 16:30 including a
lunch break of one half-hour.

 

6.                                      Salary

 

6.1                                 The
employee’s salary and other terms shall be as set forth in Schedule A’ appended
hereto.

At the expiration of each
year the terms of salary shall be discussed with the employee.

 

6.2                                 Cost
of living increase shall be given as practiced in the market.

 

6.3                                 In
the event that the rate of increase of the consumer price index exceeds 15%
annually the employee shall be compensated for the difference between the
increase of the index and the cost of living increase which he received. This
calculation will be made at the end of every year.

 

7.                                      Confidentiality and Security

 

7.1                                 The
employee undertakes to keep confidential and shall not transmit or bring to the
attention of any person any knowledge

2

 

that he acquires in respect of his work with the
Company and which may harm the Company’s business. The employee represents and
covenants that he is aware that non-compliance with his obligations under this
section shall constitute a crime unless he received written permission to do so
from the management of the Company.

 

7.2                                 The
employee undertakes to comply with all security directives and procedures as
are practiced by the Company.

 

7.3                                 Further
to the foregoing, for the duration of the contract period, the employee
undertakes not to reveal and/or transmit to any person and/or body outside the
Company, information that he acquired during his employment and/or relating to
the Company that is not in the public domain. The employee undertakes to
protect all secrets relating to the Company and its business.

 

8.                                      Rights to Inventions and Patents

 

Any invention, idea or patent discovered by the
employee during his employment with or for the Company shall be deemed the
property of and shall belong to the Company and the Company may take such
actions in respect thereof as it desires and may register the invention, patent
or idea in its name.

 

9.                                      Termination of Contract

 

9.1                                 Notwithstanding
the provisions of the foregoing section 2, each of the parties may at any time
bring this contract to an end by delivery of 30 days prior written notice to
the other party.

 

Termination of the contract, as set forth above, shall
not be considered a breach of contract nor shall it serve as a cause for
demanding compensation with the exception of an action brought for severance
pay according to the Severance Pay Law 5723 – 1963 if warranted under the
circumstances of the termination.

 

9.1.1                        The
employee shall be entitled to severance pay for his work in “Medis El” if
dismissed from his work or if he resigned pursuant to section 9.1 above, except
for reasons enumerated in section 9.3 herein. This section shall enter into
effect after the employee has been employed for at least one year at Medis El.

 

9.2                                 If
the employee incurs a permanent disability or chronic illness as a result of
which he cannot continue to function in his position, and his sick leave under
the law and as practiced

3

 

by the Company in respect of special contract
employees, has expired, the Company may bring the contract to an end by such
advance notice as stated in section 9.1.

 

9.3                                 In
addition to the provisions of section 9.1, the Company may bring this contract
to an end and may terminate the employee’s work immediately without prior
notice under the following circumstances:

 

9.3.1                        The
employee violated any of the provisions of this contract and/or an instruction
and/or directive of the Company’s directives or procedures and did not rectify
such wrongdoing within 15 days from receipt of written notice to so.

 

9.3.2                        The
employee breached his fiduciary duty towards the Company.

 

9.3.3                        The
employee was convicted of a criminal charge that carries with it disgrace, or a
crime that tarnishes the reputation of the employee.

 

9.4                                 If
the Company terminated the employee’s employment as a result of any of the
instances listed in subsections 9.3.1, 9.3.2. 9.3.3 such dismissal shall not be
deemed a breach of contract and shall not serve as a cause of action to recover
severance pay if the circumstances of the termination are such that would
justify dismissal without severance pay.

 

10.                               Waiver

 

If the Company waived a right to which it was entitled
hereunder, such waiver shall not constitute a precedent for any identical
situation, and shall not become the rule for any similar incident and the
Company shall not be prevented from using the waived right at any other time.

 

11.                               Change, Revocation

 

Any change and/or revocation of any sections hereunder
shall be made in writing only and signed by both parties.

 

12.                               Notices

 

The addresses of the parties to this contract are set
forth in the Preamble. Any notice sent by registered mail to the other party
according to such address shall be deemed as having been received by the
addressee three days from the date of delivery of said notice to the Post
Office and if hand delivered – upon delivery.

 

4

 

IN
WITNESS WHEREOF THE PARTIES SET THEIR HAND,

 

	
   

  	
   

  	
   

  	
   

  
	
  EMPLOYEE

  	
  REPRESENTATIVE OF THE

  COMPANY

  

 

5

 

SCHEDULE

 

 

Yaakov Weiss

Name and surname

 

 

1.                                       Salary,
Social benefits, other benefits.

 

A.                                   Salary

 

7,506 dollars to
be paid in new shekels according to the representative rate of the dollar.

 

B.                                     Other
payments.

 

Payments added to
the salary –

Recreation
allocation to be paid to the employee as follows:

Entitled to 15
recreation days annually.

 

C.                                     Additional
terms.

 

Vacation days - 21
work days annually.

 

Continuing
Education Fund – for Academics

 

Entitled to 24
sick days annually.

 

D.                                    Social
Benefits

 

The employee is
entitled to the social benefits enumerated in section 2 below.

 

2.                                       Managers
Insurance

 

Allocations
towards Managers Insurance, 5.5% to be paid by the employee and 6% by the
Company and 8.33% towards severance pay, until the tax exempt limit.

 

3.                                       Allocations
towards continuing education fund at 7.5% of the salary mentioned in section 1.
2.5% of the salary will be deducted from the employee and transferred to the
fund. Until the tax exempt limit.

 

4.                                       Entitled
to recreation pay, the amount of such pay to be revised annually per law.

 

5.                                       The
Company shall provide the employee with a car containing a 2 liter engine and
shall deduct the charges in respect thereto from his salary as allowed by law.

 

6Exhibit
10.3

 

NON-RECOURSE
SECURED PROMISSORY NOTE

Dated: April 11, 2003

 

$258,000

 

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”), the lesser of (a) the unpaid
principal amount of all loans made by Medis to the Borrower hereunder (which
shall not, in any event, exceed Two Hundred Fifty Eight Thousand Dollars
($258,000)) and (b) Two Hundred Fifty Eight Thousand Dollars ($258,000), in
lawful money of the United States of America, on December 31, 2006 (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
the applicable federal rate, as defined in Section 1274(d) of the Internal
Revenue Code of 1986, as amended, for mid-term loans, in effect on the
borrowing date or dates thereof, compounded semi-annually, until the entire
principal amount hereof has been paid in full. Interest hereunder shall be
payable annually in arrears on each anniversary of the date hereof. All accrued
and unpaid interest shall be paid in full on the Maturity Date.

 

Payment of the
principal of and interest on this Note is secured pursuant to the terms of a
certain Pledge Agreement of even date herewith between Medis and the Borrower
(the “Pledge Agreement”), pursuant to which the Borrower has pledged
Collateral (as defined therein) to Medis. Any Holder shall be entitled to the
benefits of the Pledge Agreement.

 

The Holder shall
have no recourse to any assets of the Borrower for the repayment of amounts due
under this Note other than the Collateral under the Pledge Agreement and, if
the proceeds of the Collateral are not sufficient to pay in full the amounts
due hereunder, the Borrower shall not be liable for the deficiency.

 

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

 

1.            All payments of
principal of and 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. 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. Any prepayments of any portion of the principal
amount of this Note shall be accompanied by payment of all accrued but unpaid
interest on that portion of the principal amount being prepaid.

 

2.            At the Holder’s
option, payment or prepayment, as applicable, of principal of and interest on
this Note may also be made, in whole or in part, by delivery to the Holder of shares
of common stock of the Holder (“Shares”), including Pledged Shares,
having a Fair Market Value on the day preceding the date of the transfer equal
to the cash amount for which such Shares are substituted. As used in the
preceding sentence, the term Fair Market Value shall mean on any date the
average of the high and low sales prices of the Shares on such date on the
principal national securities exchange on which such shares are listed or
admitted to trading, or if such

 

 

Shares are not so listed or admitted to trading, the arithmetic mean of
the per Share closing bid price and per Share closing asked price on such date
as quoted on the National Association of Securities Dealers Automated Quotation
System or such other market in which such prices are regularly quoted, or, if
there have been no published bid or asked quotations with respect to Shares on
such date, the Fair Market Value shall be the value established by the Board of
Directors of the Holder in good faith.

 

3.            The Holder is hereby
authorized by the Borrower to record on the schedule annexed to this Note (or
on a supplemental schedule thereto) the amount of each loan made by Medis to
the Borrower and the amount of each payment or prepayment of principal of such
loans received by the Holder, it being understood, however, that failure to
make any such notation shall not affect the rights of the Holder or the
obligations of the Borrower hereunder in respect of this Note.

 

4.            (a)            The Borrower shall prepay this Note,
together with accrued interest thereon, upon the bona fide sale to a party or
parties having no affiliation, direct or indirect, with the Borrower, of any of
the Pledged Shares, to the extent of 50% of the gross proceeds of such sale,
less applicable brokerage commission and taxes (the “Net Sale Proceeds”). The
Borrower shall also prepay this Note to the extent of any cash dividends or
distributions paid upon the Pledged Shares, less any payment of applicable
taxes thereon.

 

(b)           If
the Borrower desires to sell any of the Pledged Shares, he shall give written
notice (the “Notice”) to the Holder setting forth the number of Pledged Shares
to be sold, the proposed price per share if not a public sale “at market,” and
to whom such Pledged Shares shall be sold if a private transaction and in such
instance accompanied by the Borrower’s representation that any such sale will
be in a bona fide arm’s length transaction or transactions with a third party
or parties having no affiliation, direct or indirect, with the Borrower. Upon
receipt of the Notice, the Holder shall use its best efforts to sell such
Pledged Shares on behalf of the Borrower, and upon receipt of the Net Proceeds
of such sale, will remit to the Borrower 50% of the Net Sale Proceeds. If any
such sale shall be a public sale, the Holder is hereby authorized in its sole
discretion to select a securities broker-dealer to effect such sale.

 

5.            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) six months following the termination of the Borrower’s employment
with the Holder or any of its Affiliates (as defined in the Pledge Agreement).

 

6.            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.

 

7.            (a) Upon the failure
of the Borrower to pay (x) the principal 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 1(a) hereof, or upon the
Borrower’s termination of employment requiring payment in full under Section 2
hereof, or (y) the interest on the Note when and as the same becomes due and
payable, and such failure to pay principal or interest continues for ten (10)
days; (b) upon the Borrower’s breach of the Pledge Agreement; or

 

2

 

(c) 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 in writing 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), (b) and (c)
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.

 

8.            (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 10(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.

 

3

 

(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 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/ Gennadi Finkelshtain

  
	
   

  	
  GENNADI
  FINKELSHTAIN

  

 

4

 

LOAN AND
REPAYMENT SCHEDULE TO THE SECURED PROMISSORY NOTE

 

This Note evidences loans in the principal amounts and made on the
dates set forth below:

 

	
  Date

  	
   

  	
  Principal
  Amount of

  Loan

  	
   

  	
  Principal
  Amount

  Repaid

  	
   

  	
  Balance

  Outstanding

  	
   

  

 

 

 

NOTE: Additional pages of this Loan and Repayment Schedule
to the Note may be attached to the Note by the Holder as may be necessary to
record the above information regarding each loan.

 

5

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