SUBSIDIARY GUARANTY

EXHIBIT 10.2

SUBSIDIARY GUARANTY

1.            Identification .

This Guaranty (the “Guaranty”), dated as of September 16, 2009, is entered into by Medis El Ltd., an Israel corporation, and More Energy Ltd., an Israel corporation (each a “Guarantor” and collectively, “Guarantors”), for the benefit of Iroquois Master Fund Ltd. (“Lender”).

2.            Recitals .

2.1          Guarantors are direct or indirect subsidiaries of Medis Technologies Ltd., a Delaware corporation (“Parent”).  The Lender has made and/or is making a loan to Parent (the “Loan”).  Guarantor has or will obtain substantial benefit from the proceeds of the Loan.

2.2          The Loan is and will be evidenced by a certain secured promissory Note issued by Parent  on or about the date of this Guaranty (“Note”) in the principal amount of $657,200 pursuant to a subscription agreement dated at or about the date hereof (“Subscription Agreement”).  The Note was or will be executed by Parent as “Borrower” or “Debtor” for the benefit of Lender as the “Holder” or “Lender” thereof.

2.3          In consideration of the Loan and for other good and valuable consideration, and as security for the performance by Parent of its obligations under the Note and as security for the repayment of the Loan and all other sums due from Parent to Lender arising under the Note, Transaction Documents (as defined in the Subscription Agreement) and any other agreement to which the Lender and Parent are parties (collectively, the “Obligations”), Guarantor, for good and valuable consideration, receipt of which is acknowledged, has agreed to enter into this Guaranty.

3.            Guaranty .

3.1           Guaranty .  Guarantor hereby unconditionally and irrevocably guarantees, jointly and severally with any other Guarantor, the punctual payment, performance and observance when due, whether at stated maturity, by acceleration or otherwise, of all of the Obligations now or hereafter existing, whether for principal, interest (including, without limitation, all interest that accrues after the commencement of any insolvency, bankruptcy or reorganization of Parent, whether or not constituting an allowed claim in such proceeding), fees, commissions, expense reimbursements, liquidated damages, indemnifications or otherwise (such obligations, to the extent not paid by Parent being the parts of and components of the “Obligations”), and agrees to pay any and all reasonable costs, fees and expenses (including reasonable counsel fees and expenses) incurred by Lender in enforcing any rights under the guaranty set forth herein.  Without limiting the generality of the foregoing, Guarantor’s liability shall extend to all amounts that constitute part of the Obligations and would be owed by Parent to Lender, but for the fact that they are unenforceable or not allowable due to the existence of an insolvency, bankruptcy or reorganization involving Parent.

3.2           Guaranty Absolute .  Guarantor guarantees that the Obligations will be paid strictly in accordance with the terms of the Note, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of Lender with respect thereto.  The obligations of Guarantor under this Guaranty are independent of the Obligations, and a separate action or actions may be brought and prosecuted against Guarantor to enforce such obligations, irrespective of whether any action is brought against Parent or any other Guarantor or whether Parent or any other Guarantor is joined in any such action or actions.  The liability of Guarantor under this Guaranty constitutes a primary obligation, and not a contract of surety, and to the extent permitted by law, shall be irrevocable, absolute and unconditional

irrespective of, and Guarantor hereby irrevocably waives any defenses it may now or hereafter have in any way relating to, any or all of the following:

(e)  any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by Lender that might otherwise constitute a defense available to, or a discharge of, Parent or any other guarantor or surety.

This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by Lender, the Lender or any other entity upon the insolvency, bankruptcy or reorganization of the Parent or otherwise (and whether as a result of any demand, settlement, litigation or otherwise), all as though such payment had not been made.

3.3           Waiver .  Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Obligations and this Guaranty and any requirement that Lender exhaust any right or take any action against any Borrower or any other person or entity or any Collateral.  Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated herein and that the waiver set forth in this Section 3.3 is knowingly made in contemplation of such benefits.  Guarantor hereby waives any right to revoke this Guaranty, and acknowledges that this Guaranty is continuing in nature and applies to all Obligations, whether existing now or in the future.

3.4           Continuing Guaranty; Assignments .  This Guaranty is a continuing guaranty and shall (a) remain in full force and effect until the later of the indefeasible payment or other satisfaction in full of the Obligations and all other amounts payable under this Guaranty, the Subscription Agreement, Transaction Documents and the Note, (b) be binding upon