Acquisition Agreement - ON TRACK INNOVATIONS LTD - 9-11-2002

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Acquisition Agreement - ON TRACK INNOVATIONS LTD - 9-11-2002 Powered By Docstoc
					EXHIBIT 10.20

Acquisition Agreement, dated as of June 15, 2000, by and among Manfred Weise, Dennis Robert Weise,
Patrick Norbert Weise, a civil partnership and the Registrant.
                                         Deed Roll No. 956/2000J

                                                STUTTGART

                                       done this 15th day of June 2000
                                 (in words: fifteenth day of June two thousand)

Before me,
Notary Dr. Rolf Jauch with offices at FriedrichstraBe 9A, 70174 Stuttgart, is appearing today at MaybachstraBe
6, 70469 Stuttgart, whence I was summoned:

1. Mr. Manfred Weise, managing director, born on 11 September 1941, resident at Eschenweg 8, 78244
Gottmadingen, who proved his identity by means of his German passport.

Mr. Manfred Weise declares that he is acting
a) in his own name,
b) as shareholder of the civil partnership under the German Civil Code (GbR) consisting of Manfred Weise,
Dennis Robert Weise and Patrick Norbert Weise (hereinafter referred to as the "Civil Partnership").

2. Mr. Dennis Robert Weise, student, born on 26 June 1973, resident at Marienweg 8, 78465 Konstanz, who
proved his identity by means of his German passport.

Mr. Dennis Robert Weise declares that he is acting
a) in his own name,
b) as shareholder of the Civil Partnership.

3. Mr. Patrick Norbert Weise, student, born on 4 July 1974, resident at Bettina-von-Arnim-Weg 5, 79322
Karlsruhe, who proved his identity by means of his German identity card.

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Mr. Patrick Norbert Weise declares that he is acting
a) in his own name,
b) as shareholder of the Civil Partnership.

4. Mr. Oded Bashan, businessman, born on 16 November 1946, who proved his identity by means of his Israeli
passport.

Mr. Oded Bashan declares that he is acting not in his own name but as President and CEO with power of sole
representation of On Track Innovations Ltd., a public company duly organized and existing under the laws of the
State of Israel (Reg. No.: 52-004268-2), whose ordinary shares are admitted for trading in the Neuer Markt of
the Frankfurt Stock Exchange (Frankfurter Wertpapierborse) hereinafter referred to as "Neuer Markt"), having
its principal place of business at Z.H.R. I.Z., Rosh Pina 12000, Israel (hereinafter referred to as "OTI"). As proof
of his power of sole representation, Mr. Bashan presents a legal opinion issued by the law offices of Bach, Arad,
Scharf & Co. which was presented at the notarisation in the original and will be submitted, in certified copy, to
the protocol.

The persons appearing deny on question any prior involvement in the sense of section 3 para. 1 sentence 1 no. 7
BeurkG (law pertaining to notarial authentications).

The persons appearing hereby request this Notarial Deed to be executed in the English language for the
convenience of the party represented by the person appearing at 4, and waive the presence of an interpreter. The
Notary who himself has a sufficient command of the English language verified that the persons appearing also
have a sufficient command of the English language.

The persons appearing hereby declare for notarisation:

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                                                I. AGREEMENT

                                                      between

Manfred Weise, Dennis Robert Weise, Patrick Norbert Weise, the Civil Partnership


                                                (the "Shareholders")

                                                        and

                                                        OTI
                                                      ("OTI")

(the Shareholders and OTI are hereinafter collectively referred to as the "Parties")

Whereas: The Shareholders own the entire ownership interest or are entitled by way of call options granted by
Mr. Werner Messmer to acquire the remaining shareholding in (i) InterCard K, registered in the Commercial
Register of the local court Villingen-Schwenningen under No. HRB 603 and having its offices at Auf der Steig 6,
78052 Villingen-Schwenningen, and (ii) InterCard S, registered in the Commercial Register of the local court
Villingen-Schwenningen under No. HRB 532 and havings its offices at MuhlenstraBe 2, 78073 Bad Durrheim
(hereinafter referred to as the "Call Options"); and

Whereas: InterCard is engaged in the business of the development, manufacture, marketing and sale of magnetic
stripe cards, contact and contactless smart cards and systems, particularly to customers in Europe; and

Whereas: OTI is a world leader in contactless smart cards and readers technology, and develops, manufactures
and markets certain products, applications and solutions based on its proprietary technology; and

Whereas: InterCard K has a nominal capital of DM 1,100,000 which consists of the following ownership
interests (Geschafisanteile):

* held by Mr. Manfred Weise: ownership interests in the nominal amounts of DM 200,000, DM 200,000, DM
50,000, DM 50,000, DM 4,000, DM 6,000;

* held by Dennis Robert Weise: ownership interests in the nominal amounts of DM 32,000, DM 8,000, DM
10,000, DM 24,000, DM 6,000;

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* held by Patrick Norbert Weise: ownership interests in the nominal amounts of DM 32,000, DM 8,000, DM
10,000, DM 24,000, DM 6,000;

* held by the Civil Partnership: ownership interests in the nominal amounts of DM 100,000 and DM 170,000;

* held by Werner Messmer: ownership interests in the nominal amounts of DM 94,000 and DM 66,000 which
the Civil Partnership is entitled to acquire by way of Call Options; and

Whereas: InterCard S has a nominal capital of DM 600,000 which consists of the following ownership interests:

* held by Mr. Manfred Weise: ownership interests in the nominal amounts of DM 108,500, DM 16,500, DM
1,500, DM 3,500, DM 10,000, DM 2,500, DM 112,500;

* held by Dennis Robert Weise: ownership interests in the nominal amounts of DM 20,000, DM 1,500, DM
13,500, DM 5,000;

* held by Patrick Norbert Weise: ownership interests in the nominal amounts of DM 20,000, DM 1,500, DM
13,500, DM 5,000;

* held by the Civil Partnership: ownership interests in the nominal amounts of DM 85,000 and DM 100,000;

* held by Werner Messmer: ownership interests in the nominal amount of DM 16,500 and DM 63,500 which the
Civil Partnership is entitled to acquire by way of Call Options,

(the ownership interests in InterCard S and InterCard K hereinafter the "Shareholding"), and;

Whereas: The Shareholders intend to sell and transfer to OTI a 51% (fifty one percent) interest in Intercard and
OTI intends to accept such offer subject to the terms and conditions set forth in this Agreement following which
OTI shall have full control of InterCard as a majority shareholder in accordance with the German Act on Limited
Liability Companies (GmbH-Gesetz) and the Articles of Association of InterCard.

NOW THEREFORE, the Parties agree as follows:

1. Definitions

In this Agreement, unless the context otherwise requires, the following terms shall have the following meanings:

Affiliates means all enterprises which are related enterprises (verbundene Unternehmen) within the meaning of
section 271 paragraph (2) HGB;

Bank means M.M. Warburg & Co KGaA or any other bank on which the Parties agree upon;

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                              Companies means InterCard K and InterCard S;

Contamination means any material pollution or contamination of the ground, ground-water, ground-air or surface
water or buildings caused by Hazardous Substances;

Fiscal Charges means all fiscal charges (Abgaben), including taxes according to section 3 paragraph (1)
sentences 1 and 2 of the German Tax Act (Abgabenordnung (the "AO")), special levies (Sonderabgaben); public
charges and fees (Beitrage und Gebuhren) of any kind (including social security contributions), charges by
associations (Verbandslasten) (including payments due to the German Mutual Benefit Association for Pension
Security (Pensionsicherungsverein)) as well as incidental tax payments (steuerliche Nebenleistungen) pursuant to
section 3 paragraph (3) of the AO as well as all other comparable obligations in connection with other fiscal
charges, in each case both in Germany and abroad and irrespective of:

(a) whether the Shareholders or the Companies is itself the debtor in respect of the relevant Fiscal Charge;

(b) whether the Shareholders or the relevant Company (or both) are merely liable for ensuring the fulfillment of all
obligations in connection with the Fiscal Charge;

(c) how the Fiscal Charge is imposed;

(d) whether or not a repayment of any amount paid in respect of the Fiscal Charge can be claimed from any third
party (including the relevant tax authorities).

Hazardous Substances means all solid or fluid substances as well as gases which are radioactive, toxic or harmful
or which may otherwise have a material adverse effect on human beings or objects;

                               InterCard means InterCard K and InterCard S;

InterCard K means the German limited liability company (GmbH) with the company name InterCard GmbH
Kartensysteme registered in the Commercial Register of the local court Villingen-Schwenningen under No. HRB
603 having its offices at Auf der Steig 6, 78052 Villingen-Schwenningen;

InterCard S means the German limited liability company (GmbH) with the company name InterCard GmbH
Systemelectronic registered in the Commercial Register of the local court Villingen-Schwenningen under No.
HRB 532 having its offices at MuhlenstraBe 2, 78073 Bad Durrheim.

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2. Division of Shareholding in InterCard K and InterCard S

InterCard K
2.1 The ownership interest in the nominal amount of DM 200,000, held by Manfred Weise, acquired from
Eberhard Adolph by Sale and Purchase Agreement dated December 18, 1997, is hereby divided into an
ownership interest in a nominal amount of DM 95,000 and into an ownership interest in a nominal amount of DM
105,000.

2.2 InterCard K approves the aforegoing division of the ownership interests as detailed in Exhibit 2.2. Copies of
the divisions are attached to this deed.

InterCard S
2.3 The ownership interest in the nominal amount of DM 112,500, held by Manfred Weise, acquired from
Eberhard Adolph by Sale and Purchase Agreement dated December 18, 1997, is hereby divided into an
ownership interest in the nominal amount of DM 40,000 and into an ownership interest in the nominal amount of
DM 72,500.

2.4 The ownership interest in the nominal amount of DM 13,500, held by Dennis Robert Weise, acquired from
Kai Adolph by Sale and Purchase Agreement dated December 18, 1997, is hereby divided into an ownership
interest in the nominal amount of DM 8,000 and into an ownership interest in the nominal amount of DM 5,500.

2.5 The ownership interest in the nominal amount of DM 112,500, held by Patrick Norbert Weise, acquired
from Utz-Oliver Adolph by Sale and Purchase Agreement dated December 18, 1997, is hereby divided into an
ownership interest in the nominal amount of DM 8,000 and into an ownership interest in the nominal amount of
DM 5,500.

2.6 InterCard S approves the aforegoing division of the ownership interests as detailed in Exhibit 2.2.

3. Sale and Transfer

3.1 With regard to:

3.1.1 InterCard K:

Manfred Weise hereby sells and transfers to OTI the following ownership interests:

* one ownership interest in the nominal amount of DM 95,000 as divided in
Section 2.1;

* one ownership interest in the nominal amount of DM 200,000 which came into existence as a result of a
division (dated December 20, 1996) of an ownership interest in an amount of originally DM 264,000;

Dennis Robert Weise hereby sells and transfers to OTI the following ownership interests:

* one ownership interest in the nominal amount of DM 32,000 which was acquired from Manfred Weise by
Agreement dated December 20, 1996;

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* one ownership interest in the nominal amount of DM 10,000 which was acquired from Nicolas Adolph by Sale
and Purchase Agreement dated December 18, 1997;

* one ownership interest in the nominal amount of DM 6,000 which was acquired from Kai Adolph by Sale and
Purchase Agreement dated December 18, 1997.

Patrick Norbert Weise hereby sells and transfers to OTI the following ownership interests:

* one ownership interest in the nominal amount of DM 32,000 which was acquired from Manfred Weise by
Agreement dated December 20, 1996;

* one ownership interest in the nominal amount of DM 10,000 which was acquired from Nicolas Adolph by Sale
and Purchase Agreement dated December 18, 1997;

* one ownership interest in the nominal amount of DM 6,000 which was acquired from Utz-Oliver Adolph by
Sale and Purchase Agreement dated December 18, 1997;

* the Civil Partnership hereby sells and transfers to OTI one ownership interest in the nominal amount of DM
170,000 which was acquired from Werner Messmer by Sale and Purchase Agreement dated December 18,
1997.

OTI accepts all of the aforementioned sales and transfers (the sold and transferred ownership interests in
InterCard K collectively hereinafter referred to as "InterCard K Sold Interest").

3.1.2 InterCard S:

Manfred Weise hereby sells and transfers to OTI the following ownership interests:

* one ownership interest in the nominal amount of DM 40,000 as divided in
Section 2.3 above;

* one ownership interest in the nominal amount of DM 108,500 which came into existence as a result of a
division (dated December 20, 1996) of an ownership interest in an amount of originally DM 148,500;

* one ownership interest in the nominal amount of DM 16,500 which was acquired from InterCard K by Sale
and Purchase Agreement dated January 2, 1996.

Dennis Robert Weise hereby sells and transfers to OTI the following ownership interests:

* one ownership interest in the nominal amount of DM 20,000 which was acquired from Manfred Weise by
Agreement dated December 20, 1996;

* one ownership interest in the nominal amount of DM 8,000 as divided in
Section 2.4 above.

Patrick Norbert Weise hereby sells and transfers to OTI the following ownership interests:

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* one ownership interest in the nominal amount of DM 20,000 which was acquired from Manfred Weise by
Agreement dated December 20, 1996;

* one ownership interest in the nominal amount of DM 8,000 as divided in
Section 2.5 above.

The Civil Partnership hereby sells and transfers to OTI one ownership interest in the nominal amount of DM
85,000 which was acquired from Werner Messmer by Sale and Purchase Agreement dated December 18,
1997.

OTI accepts all of the aforementioned sales and transfers (the sold and transferred ownership interests in
InterCard S hereinafter referred to as "InterCard S Sold Interest" and InterCard K Sold Interest and InterCard S
Sold Interest hereinafter collectively referred to as the "Sold Interest").

3.2 The sale and transfer of the Sold Interest shall include all rights connected therewith, in particular rights to
receive profits.

3.3 In the event that OTI fails to effect the Registration and to transfer the OTI Trust Shares to the Escrow
Account (as defined respectively in Section 6.1 and Section 6.2 below) without any right of recall of OTI
whatsoever within 90 days as of the Closing Date (the Closing Date being the first day in this calculation), the
Shareholders will have a right to terminate this Agreement forthwith by written notice to the undersigned notary
public, with a copy to OTI, and effective from the date of receipt by the notary (the "Termination Date"). For
purposes of this Section proof of the transfer of the OTI Trust Shares to the Escrow Account shall be a
confirmation by the Bank that the Allotted Shares (as defined in Section 5.7 below) have been irrevocably
deposited in the Escrow Account (as defined in Section 6.2 below) without any right of recall of OTI
whatsoever. The provisions of this
Section shall not prejudice the entitlement of OTI pursuant to Section 6.4 to the remainder of the OTI Trust
Shares once all transfers of the Allotted Shares from the Escrow Account to the Shareholders have been carried
out in accordance with this Agreement.

3.4 In the event that the Shareholders exercise their right to terminate this Agreement pursuant to Section 3.3 then
the Shareholders will have the right that the Sold Interest shall be retransferred (ruckabgetreten) to the
Shareholders without the need for any further action on the part of OTI and conversely any OTI Shares,
deposited with the Bank, shall be in the sole ownership and possession of OTI and the Shareholders shall have
no rights or claims with respect thereto. The Parties therefore agree that both the Sold Interest and such OTI
Shares are retransferred (ruckabgetreten) with effect from the Termination Date.

4. Waiver Regarding Pre-emption Rights

Mr. Messmer has waived its pre-emption right with regard to the Sold Interest in two declarations both dated
June 3, 2000, certified copies of which are attached as Exhibit 4-A and 4-B.

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5. Purchase Price and Shareholder's Price Protection

5.1 As purchase price

5.1.1 for InterCard K Sold Interest OTI shall pay a total amount of DM 3,750,000,00 (hereinafter referred to as
the "InterCard K Basic Price"), and

5.1.2 for InterCard S Sold Interest OTI shall pay a total amount of DM 1,250,000,00 (hereinafter referred to as
the "InterCard S Basic Price", the InterCard S Basic Price and the InterCard K Basic Price collectively
hereinafter referred to as "InterCard Basic Price" or "Shareholders Amount"),

i.e. a total of DM 5,000,000 (five million Deutsche Mark) for the Sold Interest. The whole Shareholders Amount
shall be paid in ordinary shares of NIS 0.01 n.v. each of OTI (hereinafter referred to as the "OTI Shares"),
subject to the terms and conditions hereinafter set forth in this Agreement. Manfred Weise is irrevocably
authorized by the other shareholders (the "Other Shareholders") to receive the entire Shareholders Amount
whereas the Other Shareholders are not entitled to claim the Shareholders Amount. Payment to Manfred Weise
or any third party designated by Manfred Weise is deemed to be payment to all Shareholders. The distribution of
the Shareholders Amount among the Shareholders pursuant to their respective portions in the Shareholding in the
Companies shall be the internal responsibility of the Shareholders alone.

5.2 The Shareholders Amount shall be paid in 5 (five) equal instalments (the "Instalments"), each totalling DM
1,000,000 (one million Deutsche Mark). These are payable in OTI Shares subject to the provisions of Clauses
5.3 and 5.4 below, as follows:

5.2.1 The first Instalment (the "First Instalment") shall be paid on July 15, 2000 (the "First Instalment Date"),

5.2.2 The second Instalment (the "Second Instalment") shall be paid on August 15, 2000 (the "Second Instalment
Date"),

5.2.3 The third Instalment (the "Third Instalment") shall be paid on September 15, 2000 (the "Third Instalment
Date"),

5.2.4 The fourth Instalment (the "Fourth Instalment") shall be paid on October 15, 2000 (the "Fourth Instalment
Date"),

5.2.5 The fifth Instalment (the "Fifth Instalment") shall be paid on November 15, 2000 (the "Fifth Instalment
Date");

(and the First, Second, Third and Fourth Instalments shall be referred to collectively as the "First Instalments";
and the First, Second, Third, Fourth and Fifth Instalment Dates shall be referred to collectively as the "Instalment
Dates").

5.3 It is agreed that the number of OTI Shares transferred to the Shareholders as payment of the Shareholders
Amount for each of the Instalments shall be determined in accordance with the average closing price of an OTI
Share in the Neuer Markt (Frankfurt am Main) in the 3 (three) trading days prior to the relevant Instalment Date.
In the event that these instalments as calculated above do not result in a whole number of OTI Shares, then these
shall be rounded up accordingly.

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5.4 Prior to the Fifth Instalment the Bank shall make a calculation of the aggregate Deutsche Mark value of each
of the First Instalments according to
20 (twenty) trading days average closing price (durchschnittlicher SchluBkurs) following the relevant Instalment
Date of each of them (the "Aggregate Value"). The Deutsche Mark amount of the Fifth Instalment shall be
calculated as the difference between the Shareholders Amount (i.e. DM 5 million) less the Aggregate Value, and
shall be paid in OTI Shares in accordance with the provisions of Section 5.3 above.

5.5 On December 15, 2001 (the "Sixth Instalment Date"), the Bank shall make a calculation to the effect that the
amount of the Aggregate Value and the value of the Fifth Instalment according to 20 trading days average market
price following the Fifth Instalment Date shall be added together (the "Final Value"). If the Final Value amounts to
less than DM 5 million, the amount of difference shall be paid by OTI to Manfred Weise in OTI Shares in
accordance with the provisions of Section 5.3 above. If the Final Value amounts to more than DM 5 million, the
amount of difference shall be paid by Manfred Weise to OTI in cash within 20 business days into an account to
be specified by OTI.

5.6 If the OTI Trust Shares are not transferred to the Bank in accordance with
Section 6.2 on or before the First Instalment Date, the First Instalment Date is moved to the business day
following the date of transfer of the OTI Trust Shares to the Bank; the other Instalment Dates and Sixth
Instalment Date are moved correspondingly. In the event that any of the Instalments has not been paid until the
15th of the calendar month following the month in which the respective Instalment Date was due then such
instalment shall bear interest at a rate of 6% p.a. from the first of the calendar month following the respective
Instalment Date until payment in accordance with this Agreement is effected.

5.7 The entirety of the OTI Shares to be transferred to the Shareholders in compliance with this Agreement
(hereinafter the "Allotted Shares") constitute the full, final and absolute consideration for the Sold Interest.

6. Provisions to secure the completion of the transactions

6.1 Following the signing of this Agreement OTI shall, at its own expenses: (i) apply for admission to trading
(Zulassung zum Borsenhandel) of OTI Shares at an aggregate value of DM 5,500,000 (five million and five
hundred thousand Deutsche Mark) at Deutsche Borse AG in the Neuer Markt according to the average price of
an OTI Share in the Neuer Markt in the trading days of May 29 to 31, 2000 (the "OTI Trust Shares"), (ii) apply
for quotation of the OTI Trust Shares at Deutsche Borse AG (Antrag auf Notierungsaufnahme) and (iii) deposit a
global certificate with regard to the OTI Trust Shares at Clearstream Banking AG ("Clearstream", the procedure
(i) - (iii) hereinafter referred to as "Registration").

6.2 Once Registration is effected, OTI shall instruct Clearstream to transfer the OTI Trust Shares to the Bank,
which shall hold the OTI Trust Shares in a special escrow account in the name of OTI (the "Escrow Account").
As long as any OTI Trust Shares are held by the Bank they shall be "frozen" (as understood in accordance with
the Israeli Companies Law), i.e. the OTI Trust Shares shall not have any of the rights attached to an OTI Share

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under OTI's Articles of Association, in particular the right to vote and the right to receive profits. For the
avoidance of doubt it is understood that any OTI Trust Shares to be transferred from the Bank to Manfred
Weise shall not be frozen.

6.3 Subject to the above provisions, at each of the Instalment Dates, the Bank shall transfer to Manfred Weise
the amount of the OTI Trust Shares which is required to be transferred in accordance with the above provisions.
If the Bank does not have enough OTI Shares to transfer to the Shareholders pursuant to the provisions hereof
then OTI shall either allot to the Shareholders the additional shares required or pay the Shareholders the
difference in cash.

6.4 The remainder, if any, of the OTI Trust Shares once all transfers of the Allotted Shares from the Escrow
Account to the Shareholders have been carried out in accordance with this Agreement, shall be held by the Bank
in trust for OTI, and the Bank shall act with respect to such remainder in accordance with OTI's instructions.

7. Authorization/Indemnity

7.1 In order to ensure that the Sold Interest and the rights and claims connected therewith are transferred free of
encumbrances, as required by this Agreement, the Shareholders hereby waive all rights and claims and give all
consents necessary to ensure that OTI obtains unencumbered sole ownership of the Sold Interest including the
rights and claims referred to in Clause 3.2.

7.2 The Shareholders shall indemnify OTI against all claims, liabilities and damage arising as a result of the fact
that the contributions (Einlagen) owed in relation to the Sold Interest may not have been fully paid (or may have
been repaid) or may be deemed vis-a-vis creditors of the Companies not to have been paid. The Shareholders
are obliged to pay up the contributions (Stammeinlagen) of DM 75,000 to each of the Companies arising from
the share capital increases of the Companies, each dated December 18, 1998, prior to December 31, 2000.

7.3 The Shareholders are obliged vis-a-vis OTI to pay an amount of DM 142,000 to InterCard K as
compensation for the fact that InterCard K distributed dividends although the 20% equity ratio as set forth in the
financial covenant agreement between the Shareholders and InterCard K and Deutsche Mark AG has not been
met. The amount is due at July 20, 2000 or five days after the date on which the First Instalment has been paid,
whichever day is later (the "Due Date"). The Shareholders shall be liable to InterCard K for any damage as a
result of non-payment by the Shareholders by the Due Date.

8. Closing/Immediate Post Closing

Closing

8.1 The Closing shall take place on June 15, 2000 (the "Closing Date") at a mutually acceptable place (the
"Closing").

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Agreements

8.2 At Closing the Parties shall

(a) enter into the Share Pledge Agreement as attached in Annex 8.2-A;

(b) agree to enter into a Escrow Agreement basically in the form as attached in Annex 8.2-B;

(c) ensure that service or employment agreements with Mr. Manfred Weise, Mr. Gerson Riesle, Mr. Heinz
Kuchenbecker and Mr. Manfred Bosinger are entered into; and

(d) execute a power of attorney in favour of the lawyers of the Frankfurt office of White & Case irrevocably
enabling such lawyers to exercise the Call Options on behalf of the Shareholders;

(e) execute a Power of Attorney in favour of Oded Bashan as attached in Annex 8.2-E.

Immediately Post Closing

8.3 Immediately post Closing

(a) the Shareholders and OTI shall procure for a call of a general meeting of each of the Companies and

(aa) shall pass a resolution regarding the amendment of the Articles of Association of the Companies to the effect
that an advisory board (Beirat) is established in each of the Companies whose members can be appointed by the
shareholders' simple majority and Messrs. Oded Bashan, Eddy Wuhl, Ronnie Gilboa and the present two
managing directors (Geschaftsfuhrer) of each of the Companies are appointed as members of the advisory board;
and

(bb) shall pass a resolution regarding the amendment of the Articles of Association of the Companies resolving
that ownership interests in the Companies can only be transferred with the approval of two thirds of the
shareholders' votes cast.

(cc) enter into a shareholders and joint venture agreement pursuant to which OTI shall receive industrial lead over
InterCard;

(b) the Shareholders shall deliver certified copies of the Call Options;

(c) Mr. Weise shall enter into an agreement with a bank regarding Sections 15.1 and 15.2.

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9. Tax

Shareholders' Risk

9.1 The parties agree that the Shareholders shall bear the full risk that the relevant authorities conclude that any of
the Companies and/or the Shareholders (in relation to any of the Companies) have not complied fully, correctly
and on time with any obligations regarding Fiscal Charges for periods up to and including the Closing Date.

Indemnity

9.2 The Shareholders shall be obliged to pay to the fiscal authorities a sum in the amount of all liabilities of the
Companies and Subsidiaries in connection with Fiscal Charges (each a Fiscal Charge Liability) for which the
Shareholders bear the risk according to Section 9.1 and to indemnify and hold harmless OTI and the Companies
insofar against all Fiscal Charge Liabilities. The obligation of the Shareholders shall not apply if and to the extent
that the Fiscal Charge Liability has been taken into account by way of a special fiscal charge provision
(Ruckstellung) in the accounts of the relevant Companies or Subsidiaries.

Tax Savings

9.3 Tax savings realised by InterCard as a result of tax audits for the time period up to December 31, 1999, will
be set off against Fiscal Charge Liabilities (for which the Shareholders bear the risk according to Section 9.1) to
be paid by the Companies or the Subsidiaries for periods up to December 31, 1999; the same applies if tax
savings or additional tax payments are owed for different fiscal years for the time up to December 31, 1999. Any
tax savings remaining in accordance with this Section shall not be paid to the Shareholders.

Audits

9.4 The Shareholders are entitled to participate in tax audits and other proceedings under the General Tax Code
(Abgabenordnung), the Tax Court Code of Procedure (Finanzgerichtsordnung), or foreign laws which are
initiated or continued after the Closing Date and relate to tax periods prior to the Closing Date.

Notice

9.5 To the extent the Shareholders are entitled to participate in proceedings under Article 9.4, the Shareholders
shall be given notice within a reasonable period of time in order to enable them to take part in such proceedings
by sending one or several professionals, who under professional codes of conduct are under a duty not to
disclose confidential information. The Shareholders' representatives are entitled to participate in preliminary

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and final meetings. At the Shareholders' reasonable request, OTI will cause the Shareholders to be provided with
all information necessary to protect the Shareholders' interests. Upon the Shareholders' reasonable request, OTI
will cause the Companies or the Subsidiaries to appeal tax assessments or rulings by the fiscal authorities. The
costs of such appeals, including any required advance fees, or the costs of extra judicial proceedings which OTI
conducts subject to the instructions of the Shareholders shall be borne by the Shareholders.

Access to Information

9.6 OTI will cause the Companies and the Subsidiaries to grant to the Shareholders reasonable access to all
records of the Companies and the Subsidiaries and provide the Shareholders with all information, provided that
such records and information are required by the Shareholders for reasonable purposes related to Fiscal
Charges. The Shareholders shall have this right of access to information from the Closing Date for a period of 10
years provided that OTI is still in control of the Companies or the Subsidiaries at the time of the request.

Tax Guarantee

9.7 The Shareholders warrant to OTI and guarantee to OTI by way of an independent contractual obligation (in
this Agreement also referred to as the "Tax Guarantee") that each of the statements contained in sections 9.7
(1) to (3) below (each a "Tax Statement" and together the "Tax Statements") is correct as of the Closing Date:

(1) The Companies have fulfilled all declaration and information obligations in connection with any Fiscal
Charges, in particular all tax returns (Steuererklarungen) as well as self-assessments (Steueranmeldungen) have
been filed within the periods required under the respective law or determined by the respective authorities. All
Fiscal Charges have been paid on time. All information incorporated in the tax returns and tax balance sheets for
the fiscal years until December 31, 1999 comply with the actual facts, and the contents are complete and correct,
in particular all tax relevant facts and circumstances have been disclosed vis-a-vis the relevant authorities as
required by law.

(2) Hidden profit distributions (verdeckte Gewinnausschuttungen) did not take place at the level of the
Companies and no transactions or activities (active or passive) have been effected which will be treated as a
hidden profit distribution by the tax authorities.

(3) The place of actual management, the legal seat as well as the administrative centre of each of the Companies
are in the same country. The Companies do not maintain a permament establishment for tax purposes (steuerliche
Betriebsstatte), a taxable presence or a branch office (Zweigniederlassung) in a country other than the one in
which the legal seat of the Companies is located.

Time-Bar

9.8 Claims of OTI under this Clause 9 shall become time-barred on the expiry of December 31, 2002.

                                                       14
10. Guarantees and Warranties

Guarantees

10.1 The Shareholders guarantee by way of an independent contractual obligation (in this Agreement also
referred to as the "Guarantee") the following (as provided in sections 10.2 to 10.20 (each a "Statement" and
together the "Statements") as of the Closing Date.

10.2 Organization

10.2.1 InterCard K and InterCard S have been duly formed and are validly existing as German limited liability
companies (GmbHs), registered in the commercial register of the local court Villingen Schwenningen.

10.2.2 The ownership interests (Geschaftsanteile) in InterCard K and InterCard S as detailed in Section 3.1 are
with effect as of division of the ownership interests correctly described. It shall not be considered a breach of this
Section if the division of ownership interests is in fact incorrect provided that the sums of the ownership interests
transferred to OTI according to Section 3.1 of each of the Companies remain the same. The ownership interests
in InterCard K and InterCard S are free of any rights of third parties and encumbrances of any nature
whatsoever, especially any options, rights of first refusal or similar rights, other than those which are provided for
in the Articles of Associations.

10.2.3 The Articles of Association of the Companies have been lastly amended on 18 December 1997. No
further amendments have been made since 18 December 1997. The Articles of Association of UNICARD
NORGE AS have not been amended since 24 June 1999. The Articles of Association of InterCard International
Inc. have not been amended since 8 December 1995.

10.2.4 With the exception of the contributions to be paid by the Shareholders according to Section 7.2, the
capital contributions (Stammeinlagen) of InterCard have been fully and validly paid up, and none of the assets
required to maintain InterCards' nominal share capital have been repaid to shareholders within the meaning of
section 30 of the German Act on Limited Liability Companies.

10.2.5 There is no person or entity (including InterCard's Shareholders) holding any right whatsoever to receive
shares, or other securities or rights, in InterCard or in the Subsidiaries, whether by virtue of options or by virtue
of the holding of convertible securities or by virtue of any other rights whatsoever with the exception of option
agreements between the Shareholders and Mr. Messmer.

10.2.6 InterCard owns two wholly owned subsidiaries: UNICARD NORGE AS, an Aksjeelskap incorporated
under the laws of Norway and INTERCARD INTERNATIONAL INC., a corporation incorporated under the
laws of Florida (collectively the "Subsidiaries").

10.3 Transfer of the Sold Interest

Following Closing Date, OTI shall hold 51% of the ownership interest of InterCard and shall have full control as
a majority shareholder in accordance with the German Act on Limited Liability Companies (GmbH-Gesetz) and
the Articles of Association of InterCard.

                                                          15
10.4 Intellectual Property Rights

Annex 10.4 hereto contains a complete and correct list of all patents, utility-patents (Gebrauchsmuster), design
patents, trademarks and respective applications (the "Intellectual Property Rights") of the Companies and the
Subsidiaries (the "InterCard Intellectual Property Rights"). Unless shown otherwise in Annex 10.4 hereto, the
InterCard Intellectual Property Rights are free from all rights of third parties and are not subject to cancellation or
total or partial nullification nor to any material rights of prior users. Unless shown otherwise in Annex 10.4 hereto,
InterCard and the Subsidiaries are also not restricted in their sole and exclusive use of the InterCard Intellectual
Property Rights. To the best of the Shareholders' knowledge, none of the InterCard Intellectual Property Rights
are infringed by third parties.

To the best knowledge of the Shareholders, neither the Companies nor the Subsidiaries materially violate any
Intellectual Property Rights of third parties by manufacturing and/or marketing their present products or by any
other act within their business.

Unless shown otherwise in Annex 10.4, InterCard and the Subsidiaries have not granted any license to any third
party with respect to any of the InterCard Intellectual Property Rights.

10.5 Title to Assets

10.5.1 Annex 10.5.1 contains separate lists (Anlagespiegel and Umlaufvermogens-ubersicht) as of 31 December
1999 of all fixed and current assets owned by or used by InterCard, for the purpose of, or in connection with
their business (the "InterCard Assets").

10.5.2 Unless shown otherwise in Annex 10.5.2, the InterCard Assets are, subject to wear and tear, in
satisfactory working order commensurate with age, have been adequately maintained and are suitable for the
purposes used.

10.5.3 Unless shown otherwise in Annex 10.5.3, InterCard and the Subsidiaries have full, unrestricted and
unencumbered title (free of third party rights whatsoever) to, and possession of, all InterCard Assets which serve
or are destined to serve their business except for those InterCard Assets which are leased from third party
persons or which are subject to usual reservations of title (Eigentumsvorbehalte, Sicherungseigentum).

10.6 Real Property

10.6.1 Annex 10.6.1 contains an extract of the Land Register of all real property owned by InterCard (the "Real
Property"). There are no third party rights on the Real Property other than those shown in the extract.

10.6.2 There are no leases of Real Property by InterCard with the exception of the lease agreement between
InterCard K and Ralf GropengieBer dated November 30, 1997/December 8, 1997, and a lease agreement
between InterCard K and

                                                          16
InterCard S in relation to the Real Property. InterCard and the Subsidiaries are not in default or in breach of any
material provision of their respective lease agreements with respect to real property.

10.7 Loans

Annex 10.7 hereto contains correct details of all the loans (whether short or long term) and credit facilities
(Kreditfazilitaten) (other than any commercial practices of InterCard whereby extensions of time are granted for
performance of a party's obligations (Zahlungsziele)) with third parties with an outstanding amount of more than
DM 10,000, which InterCard or the Subsidiaries received, specifying in respect of each such loan or credit
facility, the lender's name, the principal amount, interest rate, period and securities granted. If the aggregate
amount of the loans and credit lines with third parties with an outstanding amount of less than DM 10,000
exceeds a total amount of DM 50,000 all loans and credit facilities lines are listed in Annex 10.7.

10.8 Guarantees

10.8.1 Annex 10.8.1 contains a list of all outstanding guarantees of InterCard and the Subsidiaries in favour of
each other and third parties and with a potential liability in excess of DM 10,000 or with a potential aggregate
liability in excess of DM 50,000.

10.8.2 Unless otherwise stated in Annex 10.8.2, no guarantees with a potential liability in excess of DM 10,000
or with a potential aggregate liability in excess of DM 50,000 were given by third parties (including by the
Shareholders) to secure InterCard's and the Subsidiaries' commitments to other(s).

10.9 Contracts and Commitments

10.9.1 Annex 10.9.1 hereto contains a complete list of all of InterCard's and the Subsidiaries' contracts relating
to an obligation or benefit in excess of DM 100,000 at one time or per year (the "Material Contracts").

10.9.2 Unless otherwise disclosed in Annex 10.9.2 hereto, the Material Contracts are in full force and effect,
InterCard and the Subsidiaries fulfilled all of their material obligations under the Material Contracts which are due
up to the Closing Date hereof, and to the best of the knowledge of the Shareholders, none of the other parties to
the Material Contracts has any ground to cancel or rescind the Material Contract.

10.10 Customers

All customers of InterCard who have purchased goods representing more than 5% of the Annual Turnover for
the years 1998 and 1999 or who have purchased in the first quarter of the year 2000 goods representing more
than 5% of the turnover of the first quarter of the year 2000 are listed in Annex 10.10.

10.11 Warranty for Products

Except for a contract with Broward Public Library in the USA granting a five year warranty, InterCard and the
Subsidiaries have not offered to any of their customers warranties for a period of more than thirty-six months
which have not yet expired.

                                                         17
10.12 Litigation

Except for the disputes set forth in Annex 10.12 hereto, InterCard is not, as of the Closing Date, a party to, or
threatened by, any litigation, administrative proceedings or investigations with an amount in dispute (Streitwert)
payable by InterCard likely to be more than DM 20,000 (in words Deutsche Mark twenty thousand) or with an
aggregate amount in dispute payable by InterCard likely to be more than DM 50,000. Except for a contract with
Broward Public Library in the USA granting a five year warranty, InterCard is not subject to any judgement,
decree or settlement in any legal or administrative proceedings which materially restrict or impair it in certain
business measures, in the acquisition or disposal of assets, in competition or in the operation of its business.

10.13 Compliance with Laws

10.13.1 InterCard and the Subsidiaries have complied in all material respects with all laws currently in force and
which relate in any way to the operation of their businesses.

10.13.2 InterCard and the Subsidiaries carry on the business described in the preamble to this Agreement, and
have all licenses and approvals legally required to allow them to do their business as and where currently
conducted.

10.14 Financial Statements and Conduct of the InterCard's Business

10.14.1 Annex 10.14.1 contains InterCard's audited financial statements for the financial year ended December
31, 1998 (the "1998 Financial Statements", for the financial year ended December 31, 1999 (the "1999 Financial
Statements") and InterCard's figures for the first quarter 2000 (Quartalszahlen) (the "First Quarter 2000
Figures"). The 1998 and the 1999 Financial Statements were prepared on the basis of proper bookkeeping, in
compliance with German GAAP in accordance with paragraph 264 et seq. of the German Commercial Code
(HGB) and in accordance with the principle of formal and material balance sheet continuity (formelle and
materielle Bilanzkontinuitat). The First Quarter 2000 Figures fairly reflect the respective business situation of
InterCard.

10.14.2 InterCard and the Subsidiaries do not have any material liabilities or obligations which might materially
adversely affect their businesses, except as set forth in this Agreement and in the 1998 Financial Statements and
the 1999 Financial Statements.

10.14.3 Between December 31, 1999 and the Closing Date InterCard and the Subsidiaries have conducted their
business only in the ordinary course of business and did not take any action to materially change their business or
financial situation.

10.15 Employees

Annex 10.15 - A contains a complete and accurate list of all employees of InterCard as at the Closing Date
including information as to age, salary, date of employment, job title. Unless specified in Annex 10.15 - B,
InterCard has no pension obligations.

                                                        18
10.16 Interested Parties; Shareholders

With the exception of the service agreement, a group accident insurance, a life insurance contract and a pension
entitlement between Manfred Weise and InterCard and the Agreements already listed in this Agreement, there
are no agreements in force between the Shareholders on the one side and InterCard or its Subsidiaries on the
other.

10.17 Indebtedness

InterCard and the Subsidiaries are not indebted to any third party in amounts which were not expressly
mentioned in this Agreement or any of its Annexes or have been occurred in the ordinary course of business, or
otherwise listed in Annex 10.17 hereto.

10.18 Insurance

10.18.1 InterCard and the Subsidiaries carries insurance against material risks which are normally covered in this
type of business, including a business interruption insurance. The insurance contracts are in full force and effect
and all premiums due until the Closing Date have been paid. Annex 10.18.1 hereto details the true and complete
list of all insurance policies for the benefit of InterCard.

10.18.2 InterCard and the Subsidiaries have not done nor neglected to do anything which has rendered any
policies of insurance taken out by them void. InterCard and the Subsidiaries have not violated any material
conditions attached to such policies.

10.19 Environmental. The Real Property is free of material Hazardous Substances which might result in an
adverse effect on the current use of the Real Property or human beings or in obligations or liabilities according to
the Federal Soil Protection Act (Bundesboden-schutzgesetz). No material Hazardous Substances are released
therefrom under violation of any law, regulation or public decree by any public authority. InterCard is neither
subject to, nor aware of any circumstances which might result in, material liabilities resulting from emissions,
Contamination, or the transport, storage, treatment or deposit of Hazardous Substances.

10.20 Full Disclosure. The information and statements furnished to OTI and its advisors do not contain an untrue
statement of a material fact or omit to state a material fact necessary to make the statements made therein not
misleading. The Shareholders are not aware of any material facts or circumstances which were not disclosed by
the Shareholders to OTI and its advisors and which, had they been so disclosed, would have prevented OTI
from entering into this Agreement.

11. Breach of Guarantee and Tax Guarantee

Breach of Guarantee

11.1 If and to the extent the Shareholders breach the Guarantees (pursuant to
Section 10) or the Tax Guarantee (pursuant to Section 9.7), the Shareholders shall put InterCard in the same
position they would have been in had the Guarantees or the Tax-Guarantees been true. OTI is entitled to
compensation in cash as a reduction of the Purchase Price only if (i) OTI has previously set the Shareholders a
reasonable time limit of thirty (30) days minimum

                                                         19
("Cure Period") for the restoration to a state in compliance with the provisions of this agreement ("Curing the
Defect") and the Shareholders have not cured the defect within the Cure Period or (ii) if Curing the Defect should
prove to be impossible.

Knowledge

11.2 To the extent that any references are made in this Agreement to the knowledge of the Shareholders, the
Shareholders shall be deemed to have the knowledge of the Managing Directors and of the Prokurist of the
Companies and the Subsidiaries and such knowledge they and the aforementioned persons would have if they
had exercised rights of information and inspection.

11.3 The Shareholders shall not be liable for a breach of a Guarantee or Tax Guarantee if and to the extent that
OTI or its advisers has positive knowledge of facts entitling it to asseert claims under Section 11.1 of this
Agreement on the basis of written information made available to OTI by the Shareholders, it being understood
that OTI will provide the Shareholders by Closing with copies of the due diligence reports prepared by OTI's
advisors for the benefit of OTI.

De Minimis Rule

11.4 Claims for breach of a Guarantee or a Tax-Guarantee may be asserted only if and to the extent the
aggregate amount of these claims exceeds a threshold of DM 50,000 (in words Deutsche Mark fifty thousand).
In such a case the Shareholders shall be liable for the entire amount and not only for the amount exceeding the
sum of DM 50,000.

Limitation

11.5 The liability of the Shareholders for claims under Section 11.1 shall be limited to the payment of a sum in the
maximum amount of 50% of the amount of the InterCard Basic Price. This shall not apply with regard to claims
under Section 11.1 in connection with the Statements 10.2.1, 10.2.2 and 10.2.4.

Exclusion of further Remedies and further liability

11.6 Unless otherwise provided in this Agreement, the remedies of OTI under this Agreement are exclusively
provided for in this Section 11. Any more extensive Guarantee and indemnification claims, in particular any right
of rescission or any other claims regardless on which legal grounds such claims may be based are excluded to the
extent legally permitted.

Time-Bar

11.7 Unless expressly provided for otherwise in this Agreement, any claim under the Guarantee shall be time-
barred (verjahrt) on September 30, 2001. This shall not apply to claims brought by OTI according to Sections
10.2.1, 10.2.2 and 10.2.4.

                                                        20
No Double Payment

11.8 OTI shall not be entitled to obtain payment more than once with respect of any set of circumstances which
give rise to claims under the Guarantee, the Tax-Guarantee, the indemnification as set out in Section 7 and 9.2 or
any other provision of this Agreement.

12. Announcements

None of the parties shall without the prior written consent of the other parties disclose the existence and/or the
contents of this Agreement to third parties or make any information relating thereto available to third parties. This
shall not, however, apply to announcements and disclosures which any party may be obliged to make under
applicable laws or regulations (including the rules of relevant stock exchanges) or which any party makes in the
course of the ordinary and regular course of its business (e.g. to banks). The right of the parties to disclose
matters to advisers who are bound by a professional duty of confidentiality shall remain unaffected. After
consultation with the Shareholders OTI will announce all statements regarding the transaction required under the
Listing Rules of the Frankfurt Exchange.

13. Costs

13.1 Each party shall bear its own costs incurred or to be incurred in connection with the preparation,
negotiations and implementation of this Agreement. The costs incurred in connection with the notarisation of this
Agreement and the pledge agreement as provided for in the Annex shall be borne by OTI 50% and the
Shareholders 50% equally.

13.2 Reasonable expenses incurred by the Bank in relation to the Escrow Agreement shall be borne by OTI
50% and the Shareholders 50% equally.

14. Non Competitioln

14.1 Non Competition

Manfred Weise shall not for a period of three (3) years after the Closing Date compete (whether directly or
indirectly, alone or jointly with third parties or in an employed or self-employed capacity) by selling, promoting
the sale, distributing, instructing, manufacturing or developing competing or similar products to the products of
OTI or InterCard in the smart card industry and magnetic stripe cards industry (the "Products"), or represent or
agree to represent any third party in respect to any product competing or similar to the Products.

14.2 No Solicitation

The Shareholders shall not during a period of three (3) years after the Closing Date, directly or indirectly, offer
employment to or endeavor to entice away any senior employees (including store managers) of the Companies.

                                                         21
14.3 Confidentiality

The Shareholders undertake to keep confidential all confidential business information, trade secrets and technical
know-how of InterCard (the "Confidential Information"), as long as the Confidential Information is not in the
public domain, (provided that the Confidential Information did not reach the public domain as result of a breach
of a colnfidentiality undertaking by the Shareholders) for a period of 5 (five) years following the Closing Date.
The Shareholders may disclose the Confidential Information if required by statutory law, regulation or decision of
a court, or binding order of an administrative agency or any other public authority. Prior to disclosure the
Shareholders shall notify the Companies of the disclosure demand and upon reasonable request of OTI or the
Companies the Shareholders shall appeal such a demand at the expense of the Companies.

14.4 Contractual Penalty

For each case of a breach of the above obligations, the Shareholders shall pay OTI a contractual penalty in
accordance with the following provisions:

(a) in the event of a breach of Section 14.1 a contractual penalty in the amount of DM 150,000 (in words:
Deutsche Mark one hundred fifty thousand). In the event of a continuing breach, a contractual penalty in the
amount of DM 20,000 (in words: twenty thousand Deutsche Mark) shall be paid for each week or part of a
week during which the breach continues;

(b) in the event of a breach of Section 14.2 a contractual penalty in the amount of two times the annual salary or
fee of the relevant person shall be paid; and

(c) in the event of a breach of Section 14.3 the contractual penalty shall amount to DM 150,000 (in words:
Deutsche Mark one hundred fifty thousand).

In addition, OTI shall remain entitled to assert any further claims or rights it may have against the Shareholders.

15. Special Account

15.1 For the purpose of securing claims under the Guarantee, the Tax Guarantee, and the indemnification
pursuant to Section 9.2 Manfred Weise as a representative of the Shareholders shall instruct his bank to hold
10% (ten percent) of the DM value of each instalment made to it in a special account in the name of the
Shareholders (the "Special Account"). The Special Account shall be pledged to OTI for the period commencing
on the First Instalment Date and ending on 30.9.2001 ("Pledge Period 1"). Thereafter, the number of OTI Shares
or the sums deposited in the Special Account subject to the pledge shall be reduced by 17% and the remainder
shall be pledged until 31.12.2002 ("Pledge Period 2"). It is understood that the Pledge Period 1 and the Pledge
Period 2 shall be extended by the time period by which the period of limitation on the liabilities is interrupted
(Verjahrungsunterbrechung) or suspended (Verjahrungshemmung), subject to the terms and conditions set forth
in the Escrow Agreement (which shall include a

                                                         22
provision relating to the sole right of the Shareholders to give the bank instructions to invest the monies deposited
in the Special Account, provided that such instructions are for reasonably secure investments, such as short term
deposits, government bonds, etc).

15.2 For the purpose of securing the shareholders' obligations pursuant to Sections 7.2 and 7.3 above, the
parties shall instruct the Bank as follows:

(i) if by January 10, 2001 Mr. Manfred Weise has not provided the Bank with written confirmations of
InterCard's bank that an amount of DM 75,000 has been deposited by him in each of the Companies' accounts -
the Bank shall sell OTI Shares deposited in the Special Account, in an aggregate value of DM 150,000
according to the average official closing price of an OTI Share in the Neuer Markt, traded in Frankfurt at the
Xetra system, in the 3 (three) days prior to January 10, 2001, and transfer half of the consideration to InterCard
K's account and half to InterCard S's account.

(ii) if by July 31, 2000 or five days after the date on which the First Instalment has been paid, whichever is the
later, Mr. Manfred Weise has not provided the Bank with a written confirmation of InterCard K's bank that an
amount of DM 142,000 has been deposited by him in the said account, the Bank shall sell OTI Shares deposited
in the Special Account, in an aggregate value of DM 142,000 according to the average official closing price of an
OTI Share in the Neuer Markt, traded in Frankfurt at the Xetra system, in the 3 (three) days prior to July 31,
2000, and transfer the consideration to InterCard K's account.

15.3 For the purpose of securing claims in connection with the Call Options, Manfred Weise as representative of
the Shareholders undertakes vis-a-vis OTI to instruct the Bank in the Escrow Agreement to hold an amount of
DM 800,000 (the "Secured Amount") in a special account in the name of Mr. Weise and OTI (the "Messmer
Account"). The Secured Amount shall be taken from the amount of the Fifth Instalment or the last Instalment
effected in the year 2000. The Messmer Account shall be set up on the basis of the terms and conditions set forth
in the Escrow Agreement (which shall include provisions setting out the conditions pursuant to which Mr. Weise
may dispose of (verfugen uber) the Messmer Account alone and provisions relating to the release of the Secured
Amount upon exercise of the Call Options and payment by Mr. Weise to Mr. Werner Messmer of an amount
equal to the Secured Amount.

16. Guarantees and Warranties of OTI

16.1 Guarantees

OTI guarantees to the Shareholders by way of an independent contractual obligation (in this Agreement also
referred to as the "OTI Guarantee") the following (as provided in Sections 16.1 (1) to (3)).

(1) As of Closing: OTI has been duly formed and is validly existing as a corporation under the laws of the State
of Israel (Reg. No.:
52-004286-2).

                                                         23
(2) As of the relevant Instalment Date: The OTI Trust Shares are free of any rights of third parties and
encumbrances of any nature whatsoever unless otherwise provided for in this Agreement. OTI Trust Shares are
admitted to trading in the Neuer Markt.

(3) As of the relevant Instalment Date: Upon transfer of the Sold Interest the Allotted Shares have been fully and
validly paid up and have not been repaid.

Breach of Guarantee

16.2 If and to the extent OTI breaches the OTI Guarantees, OTI shall put the Shareholders in the same position
they would have been in had the OTI Guarantees been true. The Shareholders are entitled to compensation in
cash only if (i) the Shareholders have previously set OTI a reasonable time limit of thirty days minimum (the "Cure
Period") for the restoration to a state in compliance with the provisions of this Agreement ("Curing the Defect")
and OTI has not cured the defect within the Cure Period or (ii) if Curing the Defect should prove to be
impossible.

Knowledge

16.3 OTI shall not be liable for a breach of an OTI Guarantee if and to the extent that the Shareholders have
positive knowledge of facts entitling them to assert claims under 16.2 of this Agreement on the basis of written
information made available to the Shareholders by OTI.

Exclusion of further Remedies and further liability

16.4 Unless otherwise provided in this Agreement, the remedies of the Shareholders under this Agreement are
exclusively provided for in this Article 16. Any more extensive warranty claims, in particular any right of
rescission or any other claims regardless on which legal grounds such claims may be based are excluded to the
extent legally permitted.

Double Payment

16.5 The Shareholders shall not be entitled to obtain payment more than once with respect of any set of
circumstances which give rise to claims under the OTI Guarantee or any other provision of this Agreement.

17. Miscellaneous

17.1 Survival. The Guarantees, Tax Guarantees, the indemnifications and the OTI Guarantees contained herein
shall survive the Closing hereunder.

17.2 Additional Actions. Without derogating from the other parties' obligations under this Agreement, each of the
parties undertakes to sign all documents and carry out all actions which signing or execution by the parties are
required to give effect to the provisions of this Agreement and implement them.

17.3 Assignments. With the exception of the assignment by the Shareholders of the right to receive the Allotted
Shares to Baden-Wurtembergische Bank AG up to an amount equal

                                                        24
                 to DM 2,000,000, no party to this Agreement shall be entitled to transfer
                 or assign to other or others its rights or obligations under this
                 Agreement or arising therefrom, unless with the prior written consent of
                 the other party.

          17.4   Governing Law. This Agreement shall be governed by the laws of the Federal
                 Republic of Germany without regard to its conflict of law provisions.

          17.5   Arbitration. (i) The Parties shall endeavor to settle any dispute,
                 questions or differences which may arise under this Agreement, or in
                 connection with this Agreement or in connection with the transactions
                 contemplated hereunder ("Dispute"). (ii) In the event that the parties are
                 unable to reach a settlement within 30 (thirty) days, then, upon the
                 written request of either party (the "Request"), the Dispute shall be
                 referred to arbitration before a sole arbitrator in the International
                 Chamber of Commerce (ICC), in Geneve, Switzerland, in accordance with its
                 rules. The arbitration shall be conducted in the English language. The
                 jurisdiction of the ordinary courts shall be ousted.

          17.6   Entire Agreement. This Agreement, including all annexes attached hereto
                 constitutes the entire understanding of the Parties and supersedes all
                 oral or written representations or agreements or understandings between
                 the Parties.

          17.7   Amendments. No modification or amendment of this Agreement may be made
                 except in a written instrument duly signed by all Parties if no other form
                 is statutorily required.

          17.8   Partial Invalidity. If one or more provisions of this Agreement should be
                 or become wholly or partially invalid, void or impracticable, the validity
                 of the other provisions of this Agreement shall not be affected thereby.
                 The same shall apply if it should transpire that this Agreement contains a
                 gap. In place of the invalid, void or impracticable provision (or, as the
                 case may be, in order to fill the gap) the parties to this Agreement shall
                 agree on an appropriate provision which comes as close as legally possible
                 to what the parties were trying to achieve with the invalid, void or
                 impracticable part thereof). In the event that a gap in this Agreement
                 needs to be filled, a provision shall be agreed upon which, in view of the
                 purpose and intent of this Agreement, comes as close as possible to what
                 the parties would have agreed if they had been aware of the gap at the
                 time that this Agreement was concluded.

          17.9   Waivers. A waiver by a party of any of its rights under this Agreement
                 shall not be effective unless made by a written instrument duly signed by
                 such party (unless a specific form is required under applicable statutory
                 law), and shall not be deemed a waiver of any other right hereunder.




17.10 Joint and Several Creditor/Debtor. Dennis Robert and Patrick Norbert Weise shall be liable for the
obligations and liabilities under this Agreement in proportion to their share in the Sold Interest. This also applies to
their obligations and liabilities arising from their membership in the Civil Partnership. Unless otherwise provided in
this Agreement the Shareholders shall be joint and several creditors in respect of all rights and claims to which
they are entitled under this Agreement. All facts within the meaning of section 425 and 429 BGB and any
knowledge of the Shareholders shall have effect for and against any of the Shareholders. Any rights to alter this
Agreement by unilateral declaration

                                                          25
(Gestaltungsrechte) may only be exercised by the Shareholders jointly and only with effect for and against both of
them.

17.11 Undertaking. OTI undertakes as from the Closing Date until 31 December 2003 to refrain from removing
the name "InterCard" from the company names of InterCard K and InterCard S.

17.12 Preferred Employment Consideration. OTI will cause the Companies that preferred employment
consideration should be given to Patrick Norbert Weise and to Dennis Robert Weise if there is a need of the
Companies and if they are qualified according to the needs of the Companies.

17.13 Advisory Board Membership of Manfred Weise. OTI shall procure that Manfred Weise is not removed
from the advisory boards of the Companies as long as he is a managing director of the Companies.

17.14 Headings. The headings in this Agreement are inserted only as a matter of convenience, and shall not be
taken into consideration in the interpretation of this Agreement.

17.15 Preamble and Annexes. The preamble and annexes to this Agreement shall constitute an integral part
thereof (and the term "this Agreement") appearing herein shall be interpreted as to include this document and all
annexes thereto). The persons appearing waive the right to have the annexes read aloud with the exception of
Annexes 8.2-A, 8.2-B and 8.2-E. The contents of the Annexes is known to the persons appearing. The annexes
were presented to the persons appearing and signed by them.

17.16 Notices. Unless otherwise provided for in this Agreement, all notices and declarations of will
(Willenserklarungen) in connection with this Agreement shall be made in writing (facsimile being sufficient) and
sent to the addresses set out in section 17.17.

17.17 Addresses. The Parties' addresses for the purpose of this Agreement are as set forth below, unless
otherwise notified in writing to all parties:

                                                  Shareholders:

                         Address: Manfred Weise, Eschenweg 8, 78244 Gottmadingen

                                              Tel: 07731 / 97 86 15

                                              Fax: 07731 / 97 86 06

                                      Copy to Gleiss Lutz Hootz Hirsch:

                                Attn.: Dr. Stephan Wilske

                                Address: MaybachstraBe 6, D-70469 Stuttgart

                                Tel: ++49-711-89970

                                Fax: ++49-711-855096




                                                        26
                                                       OTI

                                 Address: Z.H.R. I.Z., Rosh Pina 12000, Israel

Tel: ++972-6-6938884

Fax: ++972-6-6938887

                                            Copy to White & Case

                     Address: Bockenheimer LandstraBe 51-53, 60325 Frankfurt am Main

Tel: ++49-69-713 770

Fax: ++49-69-713 77 100

II. Notification of Company

The Notary is hereby requested to notify to the Companies the transfer of the shares sold and transferred in
accordance with this Agreement pursuant to section 16 GmbHG (German Act on Limited Liability Companies).

III. Notification of the Commercial Register/List of shareholders

The Notary is requested to submit on behalf of the Companies' managing directors new shareholder lists to the
Commercial Register pursuant to section 40 GmbHG and thereby to notify the Commercial Register of the
transfer of the Shares.

IV. Real Property

InterCard K owns a piece of real property at Muhlenstr. 2, 78073 Bad Durrheim, registered in the Land Registry
office of Bad Durrheim (Grundbucharnt Bad Durrheim, Amtsgerichtsbezirk Villingen-Schwenningen) land registry
of Biesingen (Grundbuch von Biesingen) under No. 20006 (Blatt).

                                                        27
Exhibit 10.21

Put Option Agreement, dated as of June 15, 2000, by and among Manfred Weise, Dennis Rort Weise, Patrick
Norbert Weise, a civil partnership and the Registrant.
Notar Dr. Rolf Jauch

[LOGO]

                                           Beglaubigte Abschrift

Die Ubereinstimmung nachstehender Abschrift mit der Urschrift wird beglaubigt.

Stuttgart, den 21.Juni 2000 Notar

                                                - Dr. Jauch -
                                         Deed Roll No. 960 /2000J

                                                STUTTGART

                                       done this 15th day of June 2000
                                 (in words: fifteenth day of June two thousand)

Before me,
Notary Dr. Rolf Jauch with offices at FriedrichstraBe 9A, 71074 Stuttgart, is appearing today at MaybachstraBe
6, 70469 Stuttgart, whence I was summoned:

1. Mr. Manfred Weise, managing director, born on 11 September 1941, resident at Eschenweg 8, 78244
Gottmadingen, who proved his identity by means of his German passport.

Mr. Manfred Weise declares that he is acting
a) in his own name,
b) as shareholder of the civil partnership under the German Civil Code (GbR) consisting of Manfred Weise,
Dennis Robert Weise and Patrick Norbert Weise (hereinafter referred to as the "Civil Partnership").

2. Mr. Dennis Robert Weise, student, born on 26 June 1973, resident at Marienweg 8, 78465 Konstanz, who
proved his identity by means of his German passport.

Mr. Dennis Robert Weise declares that he is acting
a) in his own name,
b) as shareholder of the Civil Partnership.

3. Mr. Patrick Norbert Weise, student, born on 4 July 1974, resident at Bettina-von-Arnim-Weg 5,79322
Karlsruhe, who proved his identity by means of his German passport.

Mr. Patrick Norbert Weise declares that he is acting
a) in his own name,
b) as shareholder of the Civil Partnership.
4. Mr. Oded Basham, businessman, born on 16 November 1946, who proved his identity by means of his Israeli
passport card.

Mr.Oded Bashan declares that he is acting not on his own behalf but as President and CEO with power of sole
representation of On Track Innovations Ltd., a public company duly organized and existing under the laws of the
State of Israel (Reg. No.: 52-004268-2), whose ordinary shares are admitted for trading in the Neuer Markt of
the Frankfurt Stock Exchange (Frankfurter Wertpapierborse) (hereinafter referred to as "Neuer Markt"), having
its principle place of business at Z.H.R. I.Z., Rosh Pina 12000, Israel (hereinafter referred to as "OTI"). As proof
of his power of sole representation, Mr. Bashan presents a legal opinion issued by the law offices of Bach, Arad,
Scharf & Co. which was presented at the notarisation in the original and will be submitted, in certified copy, to
the protocol.

The persons appearing deny on question any prior involvement in the sense of ss. 3 para.1 sentence 1 no. 7
BeurkG (law pertaining to notarial authentications).

The persons appearing hereby request this Notarial Deed to be executed in the English language for the
convenience of the party represented by the person appearing at 4. and waive the presence of an interpreter. The
Notary who himself has a sufficient command of the English language verified that the persons appearing also
have a sufficient command of the English language.

The persons appearing hereby declare for notarisation:

                                                         -2-
                                         PUT OPTION AGREEMENT

                                                      between

Manfred Weise, Dennis Robert Weise, Partick Norbert Weise, the Civil Partnership,

-hereinafter referred to as the "Shareholders" or the "Sellers"-

and

                                                        OTI,

                                   hereinafter referred to as "OTI" or the "Buyer"

Whereas: The Parties have entered into a Share Purchase Agreement (the "SPA") with even date hereof,
pursuant to which OTI has acquired 51% ownership of InterCard GmbH Kartensysteme ("InterCard K") and
InterCard GmbH Systemelectronic ("InterCard S") (InterCard K and InterCard S collectively referred to in this
Agreement as "InterCard" or the "Companies") (the "Sold Interest") from the Shareholders, and;

Whereas: InterCard K has nominal capital of DM 1,100,000 which consists of the following ownership interests
(Geschaftsanteile):

o held by Mr. Manfred Weise: ownership interests in the nominal amounts of DM 105,000, DM 50,000, DM
50,000, DM 4,000 and DM 6,000;

o held by Dennis Robert Weise: ownership interests in the nominal amounts of DM 8,000 and DM 24,000;

o held by Patrick Norbert Weise: ownership interests in the nominal amounts of DM 8,000 and DM 24,000;

o held by the Civil Partnership: ownership interests in the nominal amount of DM 100,000;

o held by Werner Messmer: ownership interests in the nominal amounts of DM 94.000 and DM 66.000 which
the Civil Partnership is entitled to acquire by way of Call Options;

o acquired by OTI by the SPA: ownership interests in the nominal amount of DM 200,000, DM 95,000, DM
32,000, DM 32,000, DM 10,000, DM 10,000 DM 6,000, DM 6,000 and DM 170,000; and

Whereas: InterCard S has a nominal capital of DM 600,000 which consists of the following ownership interests

o held by Manfred Weise: ownership interests in the nominal amounts of DM 72,500, DM 1,500, DM 3,500,
DM 10,000 and DM 2,500;

                                                         -3-
o held by Dennis Robert Weise: ownership interests in the nominal amounts of DM 1,500, DM 5,500 and DM
5,000;

o held by Partick Norbert Weise: ownership interests in the nominal amounts of DM 1,500, DM 5,500 and DM
5,000;

o held by the Civil Partnership: ownership interest in the nominal amount of DM 100,000

o held by Werner Messmer: ownership interests in the nominal amounts of DM 16,500 and DM 63,500 which
the Civil Partnership is entitled to acquire by way of Call Options,

o acquired by OTI by the SPA: ownership interests in the nominal amounts of DM 40,000, DM 108,500, DM
16,500, DM 20,000, DM 20,000, DM 8,000, DM 8,000 and DM 85,000.

Whereas: OTI wishes to receive a Put Option to purchase the remaining shareholders ownership (49%) in
InterCard (the "Put Option Interest"), subject to the terms and conditions hereinafter set forth in this Agreement;

NOW THEREFORE, the Parties agree as follows:

1. Definitions

The terms as defined in Section 1 of the SPA shall have the same meaning in this Agreement.

Unless the context otherwise requires the following terms shall have the following meanings:

"Pledges" means any pledges, encumbrances, liens or other third party's rights.

"Ownership Interests" means the ownership interests in InterCard held by the Sellers or by Mr. Werner Messmer
totalling in the aggregate 49% of the shareholding in each of InterCard K and InterCard S as listed in Annex 1.

"Share Pledge Agreement" means an agreement between the Sellers and OTI pursuant to which the Ownership
Interests of InterCard is pledged to the Sellers, with even date herewith.

2. Waiver Regarding Pre-emption Rights

Mr. Messmer has waived its pre-emption rights with regard to the Option Interest held as at the date of signing of
this Agreement (the "Closing") in two declarations both dated June 3, 2000, certified copies of which are
attached as Exhibit 2-A and 2-B.

                                                        -4-
3. Put Option

                                                        Grant

3.1 OTI hereby irrevocably offers to purchase and acquire the Ownership Interests from the Sellers as set out in
Annex 1 (hereinafter referred to as the "Put Option Interest").

                                                  Ancillary Rights

3.2 The sale and transfer of the Put Option Interest shall include all rights connected therewith, in particular rights
to receive dividends. All rights connected therewith shall pass from the Sellers to OTI on the Option Effective
Date, in particular rights to receive profits. OTI is also entitled to receive the profits for the fiscal year 2000 with
respect to the Put Option Interest even if the dividends for the fiscal year 2000 have been paid before the Option
Effective Date.

                                                     Acceptance

3.3 The Sellers may accept the offer as defined above in clause 3.1 above by notarial protocol (hereinafter
referred to as "Exercise of the Put Option") at any time between January 1, 2001 and (including) June 30, 2001
(hereinafter referred to as the "Put Option Period"). Subject to clause 3.7 below the Exercise of the Put Option
may not include any reservations and/or conditions and shall include the date on which the sale and transfer of the
Ownership Interests shall become effective (hereinafter referred to as the "Put Option Effective Date"). For the
avoidance of doubt, the Sellers may only accept the offer to simultaneously sell and transfer the Put Option
Interests and the Put Option Effective Date shall be identical for both the sale and the transfer of the Put Option
Interest.

3.4 The Sellers may accept the offer as defined in clause 3.1 above only for the entire Put Option Interest. The
acceptance of the offer is excluded if the Sellers do not own the entire Put Option Interest at the Put Option
Effective Date.

                                                       Security

3.5 As security for the payment of the Option Price, OTI has pledged the Put Option Interest to the Sellers under
the Share Pledge Agreement.

                                                    Declarations

3.6 All declarations under or in conjunction with this section, especially the Exercise of the Put Option shall be
communicated to the officiating notary and shall be deemed to be

                                                          -5-
received by the other Party at the time at which the notary receives such declaration. The notary shall
communicate any declaration to the other Party and shall inform the Parties of the date of receipt of any
declarations, all without undue delay. The Parties hereby grant power of attorney to the officiating notary or
another notary with whom the officiating notary is in a partnership to receive such declarations and to make such
communications on their behalf. If the officiating notary is not available at the time when the Option is to be
exercised by one of the Parties, such Party may choose another notary. In such case, however, the information is
deemed to be received by the other Party if and when a copy of the respective notarial deed is transmitted by
telefax to the other Party.

                                              Exercise Conditions

3.7 The Exercise of the Put Option shall be subject to the following provisions of the SPA:

                                        Sale and Transfer Agreement

4. Purchase Price and Shareholders Price Protection

4.1 As purchase price

4.1.1 for the InterCard K Put Option Interest OTI shall pay a total amount of DM 5,250,000.00 (in words:
Deutsche Mark five million two hundred and fifty thousand) (hereinafter referred to as the "InterCard K Option
Price"), and

4.1.2 for the InterCard S Put Option Interest OTI shall pay a total amount of DM 1,750,000.00 (in words:
Deutsche Mark one million seven hundred and fifty thousand (hereinafter referred to as the "InterCard S Option
Price", the InterCard S Basic Price and the InterCard K Basic Price collectively hereinafter referred to as
"InterCard Basic Price" or "Shareholders Amount"),

i.e. a total of DM 7,000,000 (seven million Deutsche Mark) for the Option Interest (referred to as "Shareholders
Amount"). The whole Shareholders Amount shall be paid in ordinary shares of NIS 0.01 n.v. each of OTI
(hereinafter referred to as the "OTI Shares"), subject to the terms and conditions hereinafter set forth in this
Agreement. Manfred Weise is irrevocably authorized by the other shareholders (the "Other Shareholders") to
receive the entire Shareholders Amount whereas the Other Shareholders are not entitled to claim the
Shareholders Amount. Payment to Manfred Weise or any third party designated by Manfred Weise is deemed to
be payment to all Shareholders. The distribution of the Shareholders Amount among the Shareholders pursuant to
their respective portions in the Shareholding in the Companies shall be the internal responsibility of the
Shareholders alone.

4.2 The Shareholders Amount shall be paid in 7 (seven) equal instalments (the "Instalments"), each totalling DM
1,000,000 (one million Deutsche Mark). These are payable on OTI Shares subject to the provisions of Clauses
5.3 and 5.4 below, as follows:

                                                       -6-
4.2.1 The first Instalment (the "First Option Instalment") shall be paid on the first or the fifteenth day of the month
following the exercise of the Option, whichever day is earlier (the "First Option Instalment Date"),

4.2.2 The second Instalment (the "Second Instalment") shall be paid one month after the First Option Instalment
Date (the "Second Instalment Date"),

4.2.3 the third Instalment (the "Third Option Instalment") shall be paid two months after the First Option
Instalment Date (the "Third Option Instalment Date"),

4.2.4 The fourth Instalment (the "Fourth Option Instalment") shall be paid three months after the First Option
Instalment Date (the "Fourth Option Instalment Date"),

4.2.5 The fifth Instalment (the "Fifth Option Instalment") shall be paid four months after the First Option
Instalment Date (the "Fifth Option Instalment Date");

4.2.6 The sixth Instalment (the "Sixth Option Instalment") shall be paid five months after the First Option
Instalment Date (the "Sixth Option Instalment Date");

4.2.7 The seventh Instalment (the "Seventh Option Instalment") shall be paid six months after the First Option
Instalment Date (the "Seventh Option Instalment Date");

(and the First until the Sixth Option Instalments shall be referred to collectively as the "First Option Instalments";
and the First until the Seventh Instalment Dates shall be referred to collectively as the "Instalment Option Dates").

4.3 It is agreed that the number of OTI Shares transferred to the Shareholders as payment of the Shareholders
Amount for each of the Instalments shall be determined in accordance with the average closing price of an OTI
Share in the Neuer Markt, Frankfurt at the Xetra system (the "Closing Price") in the 3 (three) trading days prior
to the relevant Instalment Date. In the event that these instalments as calculated above do not result in a whole
number of OTI Shares, then these shall be rounded up accordingly.

4.4 Prior to the Seventh Instalment the Bank shall make a calculation of the aggregate Deutsche Mark value of
each of the First Instalments according to 20 (twenty) trading days Closing Price following the relevant Instalment
Date of each of them (the "Aggregate Option Value"). The Deutsche Mark amount of the Seventh Instalment
shall be calculated as the difference between the Shareholders Amount (i.e. DM 7 million) less the Aggregate
Option Value, and shall be paid in OTI Shares in accordance with the provisions of Section 4.3 above.

4.5 Seven months after the First Option Instalment Date (the "Eighth Option Instalment Date"), the Bank shall
make a calculation to the effect that the amount of the Aggregate Value and the value of the Seventh Instalment
according to 20 trading days average market price following the Seventh Instalment Date shall be added together
(the "Final Value"). If the Final Value amounts to less than the Shareholders Amount, the amount of difference
shall be paid to OTI to Manfred Wiese in OTI shares in accordance with the provisions of Section 4.3 above. If
the Final Value amounts to more than the Shareholders Amount, the amount of difference shall be paid by
Manfred Weise to OTI in cash within 20 business days into an account to be specified by OTI.

                                                          -7-
4.6 If the OTI Trust Shares are not transferred to the Bank in accordance with
Section 5.2 on or before the First Instalment Date, the First Instalment Date is moved to the business day
following the date of transfer of the OTI Trust Shares to the Bank; the other Instalment Dates and Sixth
Instalment Date are moved correspondingly. In the event that any of the Instalments has not been paid by the
15th of the calendar month following the month in which the respective Instalment Date was due then such
instalment shall bear interest at a rate of 6% p.a. from the first of the calendar month following the respective
Instalment Date until payment in accordance with this Agreement is effected.

4.7 The entirety of the OTI Shares to be transferred to the Shareholders in compliance with this Agreement
(hereinafter the "Allotted Shares") constitute the full, final and absolute consideration for the Put Option Interest.

5. Provisions to secure the completion of the transactions.

5.1 Following the signing of this Agreement OTI shall, at its own expenses:
(i) apply for admission to trading (Zulassung zum Borsenhandel) of OTI Shares at an aggregate value of DM
7,700,000 (seven million and seven hundred thousand Deutsche Mark) at Deutsche Borse AG in the Neuer
Markt according to the average price of an OTI Share in the Neuer Markt in the 3
(three) trade days May 29 to 31, 2000 (the "OTI Trust Shares"), (ii) apply for quotation of the OTI Trust Shares
at Deutsche Borse AG (Antrag auf Notierungsaufnahme) and (iii) deposit a global certificate with regard to the
OTI Trust Shares at Clearstream Banking AG ("Clearstream", the procedure (i) - (iii) hereinafter referred to as
"Registration").

5.2 Once Registration is effected, OTI shall instruct Clearstream to transfer the OTI Trust Shares to the Bank,
which shall hold the OTI Trust Shares in a special escrow account in the name of OTI (the "Escrow Account").
As long as any OTI Trust Shares are held by the Bank they shall be "frozen" (as understood in accordance with
the Israeli Companies Law), i.e., the OTI Trust Shares shall not have any of the rights attached to an OTI Share
under OTI's Articles of Association, in particular the right to vote and the right to receive profits. For the
avoidance of doubt it is understood that any OTI Trust Shares to be transferred from the Bank to Manfred
Weise shall not be frozen.

5.3 Subject to the above provisions, at each of the Instalment Dates, the Bank shall transfer to Manfred Weise
the amount of the OTI Trust Shares which is required to be transferred in accordance with the above provisions.
If the Bank does not have enough OTI Shares to transfer to the Shareholders pursuant to the provisions hereof
then OTI shall either allot to the Shareholders the additional shares required or pay the Shareholders the
difference in cash.

5.4 The remainder, if any, of the OTI Trust Shares once all transfers of the Allotted Shares from the Escrow
Account to the Shareholders have been carried out in accordance with this Agreement, shall be held by the Bank
in trust for OTI, and the Bank shall act with respect to such remainder in accordance with OTI's instructions.

6. Authorization/Indemnity

In order to ensure that the Put Option Interest and the rights and claims connected therewith are transferred free
of encumbrances, as required by this Agreement, the Shareholders hereby waive all rights and claims and give all
consents necessary to ensure that OTI obtains

                                                          -8-
unencumbered sole ownership of the Put Option Interest including the rights and claims referred to in Clause 3.2.

7. Representations, Warranties and Indemnification of the Sellers

7.1 Sections 9, 10, 11.1 - 11.3, 11.6, 11.7, 11.8 of the SPA shall apply accordingly with regard to the Put
Option Interest, as of the date of the closing of this Agreement (hereinafter referred to as "Closing").

7.2 Section 11.4 of the SPA shall apply accordingly provided that such claims may already be asserted if and to
the extent the aggregate amount of the claims arising from the SPA together with this Agreement exceed a
threshold of DM 50,000.

7.3 Section 11.5 of the SPA shall apply provided that such claims shall be limited to a payment of a sum in the
amount of 50% of the Option Price.

7.4 Section 15.1 of the SPA shall apply accordingly provided that it is referred to the Instalments made to the
Bank in accordance with this Agreement. The Special Account shall be pledged to OTI for the period ending on
September 30, 2001. Thereafter, the number of OTI Shares or the sums deposited in the Special Account
subject to the pledge shall be reduced by 17% and the remainder shall be pledged until 31.12.2002, subject to
the terms and conditions set forth basically in the form of the Escrow Agreement as attached in Annex 7.4.

8. Representations and Warranties of OTI

8.1 Section 16.1 of the SPA applies accordingly provided that with regard to
(2) and (3) it is referred to the relevant Instalment Date as set out in this Agreement.

8.2 Sections 16.2 - 16.5 of the SPA apply accordingly.

9. Miscellaneous

Section 17 of the SPA applies accordingly provided that according to Section 17.3 no party to this Agreement
shall be entitled to transfer or assign to other or others its rights or obligations under this Agreement or arising
therefrom, unless with the prior written consent of the other party.

                                                         -9-
           10.      Costs

           10.1     The costs of this Agreement are borne by the Shareholders 50% and OTI 50%
                    equally.

           10.2     Each Party shall pay half of the real estate transfer tax
                    (Grunderwerbsteuer) triggered by this Agreement.

           11.      Other Liabilities




The Sellers shall ensure that - with the exception of all agreements relating to Manfred Weise's position as
managing director and member of the advisory board (Beirat) of the Companies - any liabilities of the Companies
vis-a-vis the Sellers shall have been completely fulfilled by the Put Option Effective Date at the latest. The Sellers
hereby waive in advance (by way of genuine contract for the benefit of the Companies) all claims which they may
have against the Companies on or after the Put Option Effective Date; this shall not, however, apply to claims and
liabilities under all agreements relating to Manfred Weise's position as managing director and member of the
advisory board (Beirat) of the Companies.

II. Real Property

InterCard K owns a piece of real property at Muhlenstr. 2, 78073 Bad Durrheim, registered in the Land Registry
office of Bad Durrheim (Grundbuchamt Bad Durrheim, Amtgerichtsbezirk Villingen-Schwenningen) land registry
of Biesingen (Grundbuch von Biesingen) under No. 20006 (Blatt).

                                                         III.

With respect to the aforementioned Sale and Purchase Agreement, the persons appearing refer to the deed of
today's date, of notary Dr. Jauch, UR 856 /2000J. The contents is know to the persons appearing. The original is
present at the notarisation. The persons appearing waive the right to have the Sale and Purchase Agreement read
aloud again and to have the Sale and Purchase Agreement attached to this deed.

                                                        -10-
This record including the Annexes has been read aloud in the presence of the persons appearing and the Notary,
approved by the persons appearing and signed by the persons appearing and the Notary in their own handwriting
as follows:

                                        /s/ MANFRED WEISE



                                        /s/ DENNIS WEISE



                                        /s/ PATRICK WEISE


                                        ON TRACK INNOVATIONS LTD.




                                                    -11-
                                                    Annex 1

Ownership Interests in InterCard held by the Shareholders and covered by the Put Option (Put Option Interest)

1. Ownership interests in InterCard K.

1.1 Ownership interest held by Manfred Weise:

one ownership interest in the nominal amount of DM 105,000;

one ownership interest in the nominal amount of DM 50,000;

one ownership interest in the nominal amount of DM 50,000;

one ownership interest in the nominal amount of DM 4,000;

one ownership interest in the nominal amount of DM 6,000; and

1.2 Ownership interests held by Dennis Robert Weise:

o one ownership interest in the nominal amount of DM 8,000;

o one ownership interest in the nominal amount of DM 24,000; and

1.3 Ownership interests held by Patrick Norbert Weise

o one ownership interest in the nominal amount of DM 8,000;

o one ownership interest in the nominal amount of DM 24,000; and

1.4 Ownership interests held by the Civil Partnership

o one ownership interest in the nominal amount of DM 100,000;

o one ownership interest in the nominal amount of DM 94,000;

o one ownership interest in the nominal amount of DM 66,000;

2.2 Ownership interests in InterCard S:

2.2.1 Ownership interest held by Manfred Weise:

o one ownership interest in the nominal amount of DM 72,500;

o one ownership interest in the nominal amount of DM 1,500;

o one ownership interest in the nominal amount of DM 3,500;

                                                        -12-
o one ownership interest in the nominal amount of DM 10,000;

o one ownership interest in the nominal amount of DM 2,500; and

2.2.2 Ownership interest held by Dennis Robert Weise

o one ownership interest in the nominal amount of DM 1,500;

o one ownership interest in the nominal amount of DM 5,500;

o one ownership interest in the nominal amount of DM 5,000; and

2.2.3 Ownership interest held by Patrick Norbert Weise

o one ownership interest in the nominal amount of DM 1,500;

o one ownership interest in the nominal amount of DM 5,500;

o one ownership interest in the nominal amount of DM 5,000; and

2.1.4 Ownership interest held by the Civil Partnership

o one ownership interest in the nominal amount of DM 100,000;

o one ownership interest in the nominal amount of DM 63,500;

o one ownership interest in the nominal amount of DM 16,500.

                                                         -13-
                                                    Annex 7.4

                                               Escrow Agreement

between

                      Manfred Weise, Dennis Robert Weise, Patrick Norbert Weise
                                   (the "Shareholders" or the "Sellers")

and

                                           On Track Innovations Ltd.

                                                      ("OTI")

and

                                         M.M. Warburg & Co. KGaA

(or any other bank the parties agree on in writing, latest June 30, 2000; if the parties do not agree on another
bank, M.M. Warburg & Co. KGaA will be party to this Agreement)


                                                    (the "Bank")

(the Shareholders, OTI and the Bank are hereinafter referred to as the "Parties")

Whereas: The Parties have entered into a Share Purchase Agreement (the "SPA") with the date hereof, pursuant
to which OTI has acquired 51% ownership of (i) InterCard GmbH Kartensysteme, registered in the Commercial
Register of the local court Villingen-Schwenningen under No. HRB 603 and having its offices at Auf der Steig 6,
78052 Villingen-Schwenningen ("InterCard K"), and (ii) InterCard GmbH Systemelectronic, registered in the
Commercial Register of the local court Villingen-Schwenningen under No. HRB 532 and having its offices at
MuhlenstraBe 2, 78073 Bad Durrheim ("InterCard S", collectively referred to in this Agreement as "InterCard"
or the "Companies") (hereinafter referred to as the "Sold Interest") from the Shareholders, and;

Whereas: The Sellers own the remaining 49% ownership interest in InterCard (hereinafter the "Remaining
Interest" or "Option Interest") or are entitled by way of call options granted by Mr. Werner Messmer to acquire
the Remaining Interest (the "Messmer Options");

Whereas: The Sellers and OTI have agreed in the SPA to pay the purchase price for the Sold Interest (as defined
in the SPA) (the "Interest Price") by way of transferring ordinary shares of NIS 0.01 n.v. each of OTI
(hereinafter referred to as "OTI Shares") to the Shareholders and have agreed on a mechanism by way of which
the Bank is instructed to act as a trustee in relation to the transfer of the OTI Shares to the Shareholders.
NOW, THEREFORE, the Parties agree as follows:

1. Escrow Account

1.1 The Bank shall establish an escrow account (the "Escrow Account") in the name of OTI to which OTI is
obliged and entitled to transfer OTI Shares as purchase price for the Sold Interest.

1.2 OTI shall irrevocably transfer to the Bank (without any right to recall except for OTI's right to the remainder
according to Section 5 and free of any third party rights) OTI Shares in an aggregate value of DM 5,500,000
according to the official average closing price of an OTI Share in the Neuer Markt, traded in Frankfurt at the
Xetra system (the "Closing Price"), in the 3 (three) trading days of May 29 to May 31, 2000 (the "OTI Trust
Shares").

1.3 As long as any OTI Trust Shares are held by the Bank they shall be "frozen" (as understood in accordance
with the Israeli Companies Law),
i.e. the OTI Trust Shares shall not have any of the rights attached to an OTI Share under OTI's Articles of
Association, in particular the right to vote and the right to receive profits.

2. Interest Price

2.1 As Interest Price for the Sold Interest in InterCard OTI, the Shareholders agreed on a total amount of DM
5,000,000, payable in OTI Shares. Mr. Manfred Weise is irrevocably authorized by the other Shareholders to
receive the entire Interest Price.

2.2 The Bank shall transfer the amount of the OTI Trust Shares which is required to be transferred for the
payment of the Interest Price to the following account:

Manfred Weise, Baden-Wurttembergische Bank AG Donaueschingen, account no. 6208275540, bank sort
code 694 210 20, S.W.I.F.T. BWBK DE 6S 694.

2.3 The Bank shall pay the Interest Price from the Escrow Account in 5 (five) equal instalments (the
"Instalments"), each totalling DM 1,000,000 (one million Deutsche Mark). The Bank shall transfer the Instalment
in OTI Shares as follows:

2.3.1 The first instalment (the "First Instalment") shall be paid on July 15, 2000 (the "First Instalment Date").

2.3.2 The second instalment (the "Second Instalment") shall be paid on August 15, 2000 (the "Second Instalment
Date"),

2.3.3 The third instalment (the "Third Instalment") shall be paid on September 15, 2000 (the "Third Instalment
Date"),

                                                         -2-
2.3.4 The fourth instalment (the "Fourth Instalment") shall be paid on October 15, 2000 (the "Fourth Instalment
Date"),

2.3.5 The fifth instalment (the "Fifth Instalment") shall be paid on November 15, 2000 (the "Fifth Instalment
Date"),

(and the First, Second, Third and Fourth Instalments shall be referred to collectively as the "First Instalments";
and the First, Second, Third, Fourth and Fifth Instalment Dates shall be referred to collectively as the "Instalment
Dates").

2.4 The Bank shall determine the number of OTI Trust Shares to be transferred to the Shareholders as payment
of the Interest Price for each of the Instalments in accordance with the Closing Price in the 3 (three) trading days
prior to the relevant Instalment Date. In the event that these instalments as calculated above do not result in a
whole number of OTI Shares, then these shall be rounded up by the Bank accordingly.

2.5 Prior to the Fifth Instalment the Bank shall make a calculation of the aggregate Deutsche Mark value of each
of the First Instalments according to 20 (twenty) trading days Closing Price following the relevant Instalment Date
of each of them (the "Aggregate Value"). The Deutsche Mark amount of the Fifth Instalment shall be calculated
as the difference between the Interest Price less the Aggregate Value, and shall be transferred in OTI Shares in
accordance with the provisions of Section 2.4 above.

2.6 On December 15, 2000 (the "Sixth Instalment Date"), the Bank shall make a calculation to the effect that the
amount of the Aggregate Value and the value of the Fifth Instalment according to 20 trading days Closing Price
following the Fifth Instalment Date shall be added together (the "Final Value"). If the Final Value amounts to less
than DM 5 million, the amount of difference shall be transferred by the Bank to Manfred Weise in OTI Shares in
accordance with the provisions of Section 2.4 above. If the final value amounts to more than DM 5 million, the
amount of difference shall be paid by Manfred Weise to OTI in cash within 20 business days into an account to
be specified by OTI.

2.7 If the OTI Trust Shares are not transferred to the Bank on or before the First Instalment Date, the First
Instalment Date is moved to the business day following the date of transfer of the OTI Trust Shares to the Bank;
the other Instalment Dates and the Sixth Instalment Date are moved correspondingly.

2.8 If the Bank does not have enough OTI Shares to transfer to the Shareholders for the payment of the Interest
Price the Bank shall inform OTI and the Shareholders immediately; no further action of the Bank is required.

3. Confirmation of Receipt of the OTI Trust Shares

The Bank shall immediately after the irrevocable receipt of the OTI Trust Shares (without any right of recall of
OTI whatsoever except for OTI's right to the remainder according to Section 5) confirm in writing to Manfred
Weise (on behalf of the Shareholders) and to OTI the irrevocable receipt of the OTI Trust Shares (without any
right of recall of OTI whatsoever

                                                        -3-
except for OTI's right to the remainder according to Section 5) (the "Confirmation"). The Confirmation shall
basically be in the form of Exhibit A.

4. Special Account

4.1 The Bank shall establish a special account (the "Special Account") in the name of Mr. Manfred Weise, which
Mr. Manfred Weise may only dispose of (verfugen uber) according to the following provisions or the written
prior consent of OTI.

4.2 The Bank shall deduct an equivalent amount of DM 800,000 in OTI Trust Shares (the "Secured Amount")
from the Fifth Instalment or, if the Fifth Instalment is not effected in the year 2000, the last Instalment effected in
the year 2000. Mr. Manfred Weise herewith instructs the Bank to sell these OTI Shares in portions of 1/20 of
the number of shares each trading day following the relevant Instalment Date.

4.3 Mr. Manfred Weise herewith irrevocably authorizes OTI, to instruct the Bank to dispose of the Secured
Amount in favour of Mr. Werner Messmer's bank account, the bank account number of which will be provided
by Mr. Manfred Weise, with the aim of paying the purchase price for the Messmer Option. In the event that OTI
does not instruct the Bank to dispose of the Secured Amount until 1 April, 2001, the Secured Amount shall be
released to Mr. Weise.

5. Remainder of OTI Trust Shares

The Bank shall hold the remainder, if any, of the OTI Trust Shares for OTI once all transfers of OTI Shares from
the Escrow Account to the Shareholders have been carried out in accordance with Section 2 of this Agreement
and the Bank shall act with respect to such remainder in accordance with OTI's instructions.

6. Costs

The costs incurred by the Bank shall be borne by OTI 50% and the Shareholders 50% equally.

7. Addresses

The Parties' addresses for the purpose of this Agreement are as set forth below, unless otherwise notified in
writing to all parties:

Shareholders:
Address: Manfred Weise, Eschenweg 8, D-78244 Gottmadingen Tel: ++49-7731-978615
Fax: ++49-7731-978606
Copy to Gleiss Lutz Hootz Hirsch:
Attention: Dr. Stephan Wilske

                                                          -4-
Address: MaybachstraBe 6, D-70468 Stuttgart Tel: ++49-711-89970
Fax: ++49-711-855096

                                                       OTI
                                   Address: Z.H.R. I.Z., Rosh Pina 12000, Israel

Tel: ++972-6-6938884
Fax: ++972-6-6938887

Copy to White & Case
Attention: Dr. Johannes Lubking
Address: Bockenheimer LandstraBe 51-53, D-60325 Frankfurt am Main Tel: ++49-69-713 770
Fax: ++49-69-713 77 100

8. Miscellaneous

8.1 Governing Law. This Agreement shall be governed by the laws of the Federal Republic of Germany without
regard to its conflict of law provisions.

8.2 Partial Invalidity. If one or more provisions of this Agreement should be or become wholly or partially invalid,
void or impracticable, the validity of the other provisions of this Agreement shall not be affected thereby. The
same shall apply if it should transpire that this Agreement contains a gap. In place of the invalid, void or
impracticable provision (or, as the case my be, in order to fill the gap) the parties to this Agreement shall agree on
an appropriate provision which comes as close as legally possible to what the parties were trying to achieve with
the invalid, void or impracticable provision (or, as the case may be, the invalid, void or impracticable part
thereof). In the event that a gap in this Agreement needs to be filled, a provision shall be agreed upon which, in
view of the purpose and intent of this Agreement, comes as close as possible to what the parties would have
agreed if they had been aware of the gap at the time that this Agreement was concluded.

8.3 Liability of the Bank. The Bank is only liable for the care it employs in its own affairs.

Manfred Weise

Dennis Robert Weise

Patrick Norbert Weise

On Track Innovations Ltd.

M.M. Warburg & Co. KGaA

                                                          -5-
                                                  Exhibit A

                                [Letterhead of M. M. Warburg & Co. KGaA]

Manfred Weise
Eschenweg 8
D-78244 Gottmadingen
Fax: ++49-7731-978696

On Track Innovations Ltd.
Z.H.R. I.Z.
Rosh Pina 12000
Israel
Fax: ++972-6-6938887

cc: Gleiss Lutz Hootz Hirsch
Attention: Dr. Stephan Wilske
Maybachstr. 6
D-70469 Stuttgart
Fax: ++49-711-855096

White & Case
Attention: Dr. Johannes Lubking
Bockenheimer LandstraBe 51-53
D-60325 Frankfurt am Main
Fax: ++49-69-713 77 100

Confirmation of Receipt of the OTI Trust Shares

Gentlemen,

In accordance with Section 3 of the Escrow Agreement of June 15, 2000 by and between Manfred Weise,
Dennis Robert Weise, Patrick Norbert Weise (the "Shareholders"), On Track Innovations Ltd. ("OTI") and M.
M. Warburg & Co. KGaA ("Escrow Agreement") we hereby confirm the irrevocable receipt of the OTI Trust
Shares without any recall of OTI whatsoever except for OTI's right to the Remainder according to Section 5 of
the Escrow Agreement.

Sincerely yours,

M.M. Warburg & Co. KGaA
(or any other bank according to this escrow agreement)

                                                     -6-
                                      BACH, ARAD, SCHARF & CO.
                                            LAW OFFICES

                          Microdaf House, 2 Hashalom road, Tel-Aviv 67892, Israel
                                Fax. (972)3-5625304 Tel. (972)3-5625303
                                         bacharad@bacharad.com

                                                 June 13th, 2000

                                                     635/95

Mssrs. Manfred Weise
Dennis Weise Hand Delivery Patrick Weise

Dear Sirs,

Purchase of 51% interest in InterCard GmbH Kartensysteme and InterCard GmbH Systemelectronic
(collectively "InterCard") by On Track Innovations Ltd. ("OTI") (the "SPA") and Options to sell and purchase
the remaining ownership interest of 49% of InterCard (the "OA") (collectively the "Transaction")

As OTI's legal counsels, we hereby certify that Mr. Oded Bashan, holder of Israeli Passport No. 9008439, is
duly authorized by OTI to negotiate and conclude detailed agreements regarding the Transaction and to sign all
agreements in connection with the Transaction and all ancillary documents (including, inter alia, a share pledge
agreement and an escrow agreement) on OTI's behalf. The signature of Oded Bashan together with the stamp or
printed name of OTI, is binding upon OTI.

Sincerely yours,

                                           /s/    Nir Ehrlich, Adv.

                                             Nir Ehrlich, Adv.
                                          Bach, Arad Scharf & Co.
Die Ubereinstimmung vorstehender Abschrift mit der mir heute vorliegenden Urschrift wird beglaubigt.

Stuttgart, den 15. Juni 2000 Notar

                                               /s/ Dr. Jauch

                                               - Dr. Jauch -
Exhibit 2-A Werner Messmer
Hauslegarten 15
78315 Radolfzell

An

1. Herrn Manfred Weise Eschenweg 8 78244 Gottmadingen

2. Herrn Patrick Weise Bettina-von-Arnim-Weg 5 79322 Karlsruhe

3. Herrn Dennis Weise Marienweg 8 78465 Konstanz

Verzicht auf Vorkaufsrecht fur Geschaftsanteile an InterCard GmbH Kartensysteme

1. Die Herren Manfred Weise, Patrick Weise und Dennis Weise (im folgenden zusammengefaBe die "Herren
Weise") sowie der Unterzeichner sind die alleinigen Gesellschafter der InterCard GmbH Kartensysteme mit Sitz
in Villingen-Schwenningen (im folgenden "die Gesellschaft").

2. Die Herren Weise beabsichtigen, Geschaftsanteile an der Gesellschaft (im folgenden "die Geschaftsanteile") an
das israelische Unternehmen On Track Innovations Ltd. oder an einen von diesem Unternehmen bestellten
Dritten (im folgenden "der Kaufer") zu verkaufen und abzutreten. Zur Sicherung der Kaufpreiszahlung soll ein
Pfandrecht an den verkauften und abgerretenen Geschaftsanteilen zugunsten der Herren Weise bestellt werden.
3. GemaBe ss.9 des Gesellschaftsvertrages der Gesellschaft steht mir ein Vorkaufsrecht an den Geschaftsanteilen
zu. Ebenso bedarf eine Verpfandung von Geschaftsanteilen gemaBe ss.9 Abs. 5 des Gesellschaftsvertrages der
Zustimmung der ubrigen Gesellschafter.

4. Hiermit verzichte ich unwiderruflich auf mein Vorkaufsrecht an den Geschaftsanteilen der Herren Weise. Der
Verpfandung der verkauften und abgetretenen Geschaftsanteile durch den Kaufer an die Herren Weise stimme
ich hiermit ebenso unwiderruflich zu.

                                           /s/ Ort, Datum
                                           ____________________
                                           Ort, Datum




                                           /s/ Werner Messmer
                                           _____________________
                                           Werner Messmer
Exhibit 2-B Werner Messmer
Hauslegarten 15
78315 Radolfzell

An

1. Herrn Manfred Weise Eschenweg 8 78244 Gottmadingen

2. Herrn Patrick Weise Bettina-von-Arnim-Weg 5 79322 Karlsruhe

3. Herrn Dennis Weise Marienweg 8 78465 Konstanz

Verzicht auf Vorkaufsrecht fur Geschaftsanteile an InterCard GmbH Systemelectronic

1. Die Herren Manfred Weise, Patrick Weise und Dennis Weise (im folgenden zusammengefaBt die "Herren
Weise") sowie der Unterzeichner sind die alleinigen Gesellschafter der InterCard GmbH Systemelectronic mit Sitz
in Bad Durrheim (im folgenden "die Gesellschaft").

2. Die Herren Weise beabsichtigen, Geschaftsanteile an der Gesellschaft (im folgenden "die Geschaftsanteile") an
das israelische Unternehmen On Track Innovations Ltd. oder an einen von diesem Unternehmen bestellten
Dritten (im folgenden "der Kaufer") zu verkaufen und abzutreten. Zur Sicherung der Kaufpreiszahlung soll ein
Pfandrecht an den verkauften und abgerretenen Geschaftsanteilen zugunsten der Herren Weise bestellt werden.
3. GemaB ss.9 des Gesellschaftsvertrages der Gesellschaft steht mir ein Vorkaufsrecht an den Geschaftsanteilen
zu. Ebenso bedarf eine Verpfandung von Geschaftsanteilen gemaB ss.9 Abs. 5 des Gesellschaftsvertrages der
Zustimmung der ubrigen Gesellschafter.

4. Hiermit verzichte ich unwiderruflich auf mein Vorkaufsrecht an den Geschaftsanteilen der Herren Weise. Der
Verpfandung der verkauften und abgetretenen Geschaftsanteile durch den Kaufer an die Herren Weise stimme
ich hiermit ebenso unwiderruflich zu.

                                           /s/ Ort, Datum
                                           ____________________
                                           Ort, Datum




                                           /s/ Werner Messmer
                                           _____________________
                                           Werner Messmer
Exhibit 10.22

Call Option Agreement, dated as of June 15, 2000, by and among Manfred Weise, Dennis Robert Weise,
Patrick Norbert Weise, a civil partnership and the Registrant.
Notary Dr. Rolf Jauch
[LOGO]

Beglaubigte Abschrift Die Ubereinstimmung nanchester Abschrift mit der Urschrift wird beglaubigt

Stuttgart, den 21. Juni 2000 Notar

                                                 -Dr. Jauch-
                                                 STUTTGART

                                         done this 15th day of June 2000

                                  (in words; fifteenth day of June two thousand)

Before me,

Notary Dr. Rolf Jauch with offices at FriedrichstraBe 9A,70174 Stuttgart, is appearing today at MaybachstraBe
6, 70469 Stuttgart, whence I was summoned.

1. Mr. Manfred Weise, managing director, born on 11 September 1941, resident at Eschenweg 8, 78244
Gottmadingen, who proved his identity by means of his German passport.

Mr. Manfred Weise declares that he is acting

a) in his own name,

b) as shareholder of the civil partnership under the German Civil Code (GbR) consisting of Manfred Weise,
Dennis Robert Weise and Patrick Norbert Weise (hereinafter referred to as the "Civil Partnership").

2. Mr. Dennis Robert Weise, student, born on 26 June 1973, resident at Marienweg 8, 78465 Konstanz, who
proved his identity by means of his German passport.

Mr. Dennis Robert Weise declares that he is acting

a) in his own name,

b) as shareholder of the Civil Partnership.

3. Mr. Patrick Norbert Weise, student, born on 4 July 1974, resident at Bettina-von-Arnim-Weg 5, 79322
Karisruhe, who proved his identity by means of his German passport.
Mr. Patrick Norbert Weise declares that he is acting

a) in his own name,

b) as shareholder of the Civil Partnership.

4. Mr. Oded Bashan, businessman, born on 16 November 1946, who proved his identity by means of his Israeli
passport.

Mr. Oded Bashan declares that he is acting not on his own behalf but as President and CEO with power of sole
representation of On Track Innovations Ltd., a public company duly organized and existing under the laws of the
State of Israel (Reg. No.: 52-004268-2), whose ordinary shares are admitted for trading in the Neuer Markt of
the Frankfurt Stock Exchange (Frankfurter Wertpapierborse) (hereinafter referred to as "Neuer Markt"), having
its principle place of business at Z.H.R. I.Z., Rosh Pina 12000, Israel (hereinafter referred to as "OTI"). As proof
of his power of sole representation, Mr. Bashan presents a legal opinion issued by the law offices of Bach, Arad,
Scharf & Co. which was present at the notarisation in the original and will be submitted, in certified copy, to the
protocol.

The persons appearing deny on question any prior involvement in the sense of ss. 3 para.1 sentence 1 no. 7
BeurkG (law pertaining to notarial authentications).

The persons appearing hereby request this Notarial Deed to be executed in the English language for the
convenience of the party represented by the person appearing at 4. and waive the presence of an interpreter. The
Notary who himself has a sufficient command of the English language verified that the persons appearing also
have a sufficient command of the English language.

The persons appearing hereby declare for notarisation:

                                                         2
                                        CALL OPTION AGREEMENT

                                                      Between

Manfred Weise, Dennis Robert Weise, Patrick Norbert Weise and the Civil Partnership,

-hereinafter referred to as the "Shareholders" or the "Sellers"-

and

                                                        OTI,

                                  -hereinafter referred to as "OTI" or the "Buyer"-

Whereas: The Parties have entered into a Share Purchase Agreement (the "SPA") with even date hereof,
pursuant to which OTI has acquired 51% ownership of InterCard GmbH Kartensysteme ("InterCard K") and
InterCard GmbH Systemelectronic ("InterCard S") (InterCard K and InterCard S collectively referred to in this
Agreement as "InterCard" or the "Companies") (the "Sold Interest") from the Shareholders, and;

Whereas: InterCard K has a nominal capital of DM 1,100,000 which consists of the following ownership
interests (GERMAN TEXT)

* held by Mr. Manfred Weise: ownership interests in the nominal amounts of DM 105,000, DM 50,000, DM
50,000, DM 4,000 and DM 6,000;

* held by Dennis Robert Weise: ownership interests in the nominal amounts of DM 8,000 and DM 24,000;

* held by Patrick Norbert Weise: ownership interests in the nominal amounts of DM 8,000 and DM 24,000;

* held by the Civil Partnership: ownership interest in the nominal amount of DM 100,000;

* held by Werner Messmer: ownership interests in the nominal amounts of DM 94,000 and DM 66,000 which
the Civil Partnership is entitled to acquire by way of Call Options;

                                                          3
* acquired by OTI by the SPA : ownership interests in the nominal amount of DM 200,000, DM 95,000, DM
32,000, DM 32,000, DM 10,000, DM 10,000, DM 6,000, DM 6,000 and DM 170,000; and

Whereas: InterCard S has a nominal capital of DM 600,000 which consists of the following ownership interests

* held by Manfred Weise: ownership interests in the nominal amounts of DM 72,500, DM 1,500, DM 3,500,
DM 10,000 and DM 2,500;

* held by Dennis Robert Weise: ownership interests in the nominal amount of DM 1,500, DM 5,500 and DM
5,000;

* held by Patrick Norbert Weise: ownership interests in the nominal amount of DM 1,500, DM 5,500 and DM
5,000;

* held by the Civil Partnership: ownership interests in the nominal amount of DM 100,000

* held by Werner Messmer: ownership interests in the nominal amount of DM 16,500 and DM 63,500 which the
Civil Partnership is entitled to acquire by way of Call Options,

* acquired by OTI by the SPA: ownership interests in the nominal amount of DM 40,000, DM 108,500, DM
16,500, DM 20,000, DM 20,000, DM 8,000, DM 8,000 and DM 85,000.

Whereas: The Sellers intend to grant to the OTI a call option to purchase the remaining Shareholders ownership
(49%) in InterCard (the "Option Interest"), subject to the terms and conditions hereinafter set forth in this
Agreement;

NOW THEREFORE, the parties agree as follows:

1. Definitions

The terms as defined in Section 1 of the SPA shall have the same meaning in this Agreement.

Unless the context otherwise requires the following terms shall have the following meanings:

"Pledges" means any pledges, encumbrances, liens or other third party's rights.

"Ownership Interests" means the ownership interests in InterCard held by the Sellers or by Mr. Werner Messmer
totaling in the aggregate 49% of the shareholding in each of InterCard K and InterCard S as listed in Annex 2.

"Share Pledge Agreement" means an agreement between the Sellers and OTI pursuant to which the Ownership
Interest of InterCard is pledged to the Sellers, with even date herewith.

                                                        4
2. Waiver Regarding Pre-empotion Rights

Mr. Messmer has waived its pre-empotion rights with regard to the Option Interest held as at the date of signing
of this Agreement (the "Closing") in two declarations both dated June 3, 2000, certified copies of which are
attached as Exhibit 2-A and 2-B.

3. Call Option

Grant

3.1. Manfred Weise, Patrick Norbert Weise, Dennis Robert Weise and the Civil Partnership hereby irrevocably
offer to sell and transfer the Ownership Interests as set out in Annex 1 (hereinafter referred to as the "Call Option
Interest") to OTI (hereinafter referred to as the "Call Option").

Ancillary Rights

3.2. The sale and transfer of the Call Option Interest shall include all rights connected therewith, in particular
rights to receive dividends. All rights connected therewith shall pass from the Sellers to OTI on the Option
Effective Date, in particular rights to receive profits. OTI is also entitled to receive the profits for the fiscal year
2000 with respect to the Call Option Interest even if the dividends for the fiscal year 2000 have been paid before
the Option Effective Date.

Acceptance

3.3. OTI may accept the offer as defined in clause 3.1 above by notarial protocol (hereinafter referred to as
"Exercise of the Call Option") at any time between July 2, 2001 and (including) December 31,2001 (hereinafter
referred to as the "Call Option Period"). Subject to clause 3.4 and 3.7 below the Exercise of the Call Option may
not include any reservations and/or conditions and shall include the date on which the sale and transfer of the
Ownership Interests shall become effective (hereinafter referred to as the "Call Option Effective Date"). For the
avoidance of doubt, OTI may only accept the offer to simultaneously sell and transfer the Call Option Interest,
and the Call Option Effective Date shall be identical for both the sale and the transfer of the Call Option Interest.

Reduced Option Interest

3.4. OTI may accept this offer only for the entire Call Option Interest. If the Sellers do not own the entire Call
Option Interest at the Call Option Effective Date OTI may also accept the offer in relation to any part of the
ownership interests of the Option Interests held by the Sellers at the Option Effective Date (hereinafter referred to
as "Reduced Option Interest").

Security

3.5. As security for the payment of the Option Price, OTI has pledged the Call Option Interest to the Sellers
under the Share Pledge Agreement.

Declarations

3.6. All declarations under or in connection with this section, especially the Exercise of the Call Option shall be
communicated to the officiating notary and shall be deemed to be received by the other Party at the time at which
the notary receives such declaration. The notary shall communicate any declaration to the other Party and shall
inform the Parties of the date of receipt of any declarations, all without undue delay. The Parties hereby grant
power of attorney to the officiating notary to receive such declarations and to make such communications on their
behalf. If the officiating notary or another notary with whom the officiating notary is in a partnership is not
available at the time when the Option is to be exercised by one of the Parties, such party may choose another
notary. In such case, however, the information is deemed to be received by the other Party if and when a copy of
the respective notarial deed is transmitted by telefax to the other Party.

                                                           5
Exercise Conditions

3.7. The Exercise of the Call Option shall be subject to the following provisions of the SPA:

                                        Sale and Transfer Agreement

4. Purchase Price and Shareholders Price Protection

4.1. As purchase price

4.1.1 for InterCard K Sold Interest OTI shall pay a total amount of DM 5,250,000.00 (in words: Deutsche
Mark five million two hundred and fifty thousand) (hereinafter referred to as the "InterCard K Option Price"), and

4.1.2 for InterCard S' Sold Interest OTI shall pay a total amount of DM 1,750,000.00 (in words: Deutsche mark
one million seven hundred and fifty thousand) (hereinafter referred to as the "InterCard S Option Price", the
InterCard S Basic Price and InterCard K Basic Price collectively hereinafter referred to as "InterCard Basic
Price" or "Shareholders Amount"),

i.e. a total of DM 7,000,000 (seven million Deutsche Mark) for the Option Interest. In the event that OTI
accepts the Call Option only for the Reduced Option Interest (pursuant to Section 3.4) the purchase price is
reduced accordingly (the "Reduced Option Price", the Option Price or the Reduced Option Price, as the case
may be, referred to as "Shareholders Amount"). The whole Shareholders Amount shall be paid in ordinary shares
of NIS 0.01 n.v. each of OTI (hereinafter referred to as the "OTI Shares"), subject to the terms and conditions
hereinafter set forth in this Agreement. Manfred Weise is irrevocably authorized by the other shareholders (the
"Other Shareholders") to receive the entire Shareholders Amount whereas the Other Shareholders are not
entitled to claim the Shareholders Amount. Payment to Manfred Weise or any third party designated by Manfred
Weise is deemed to be payment to as Shareholders. The distribution of the Shareholders Amount among the
Shareholders pursuant to their respective portions in the Shareholding in the Companies shall be the internal
responsibility of the Shareholders alone.

4.2 The Shareholders Amount shall be paid in 7 (seven) equal instalments (the "Instalments"), each totaling DM
1,000,000 (one million Deutsche Mark) or an accordingly reduced amount in the case of the Reduced Option
Price. These are payable in OTI shares subject to the provisions of Clauses 5.3 and 5.4 below, as follows:

                                                        6
4.2.1 The first Instalment (the "First Option Instalment") shall be paid on the first or the fifteenth day of the month
following the exercise of the Option, whichever day is earlier (the "First Option Instalment Date"),

4.2.2 The second Instalment (the "Second Instalment") shall be paid one month after the First Option Date (the
"Second Instalment Date"),

4.2.3 The third Instalment (the "Third Option Instalment") shall be paid two months after the First Option
Instalment Date (the "Third Option Instalment Date"),

4.2.4 The fourth Instalment (the "Fourth Option Instalment") shall be paid three months after the First Option
Instalment Date (the "Fourth Option Instalment Date"),

4.2.5 The fifth Instalment (the "Fifth Option Instalment") shall be paid four months after the First Option
Instalment Date (the "Fifth Option Instalment Date");

4.2.6 The sixth Instalment (the "Sixth Option Instalment") shall be paid four months after the First Option
Instalment Date (the "Sixth Option Instalment Date");

4.2.7 The seventh Instalment (the "Seventh Option Instalment") shall be paid six months after the First Option
Instalment Date (the "Seventh Option Instalment Date");

(and the First until the Sixth Option Instalments shall be referred to collectively as the "First Option Instalments";
and First until the Seventh Instalment Dates shall be referred to collectively as the "Instalment Option Dates").

4.3 It is agreed that the number of OTI Shares transferred to the Shareholders as payment of the Shareholders
Amount for each of the Instalments shall be determined in accordance with the average official closing price of an
OTI Share in the Neuer Markt, Frankfurt at the Xetra system (the "Closing Price"), in the 3 (three) trading days
prior to the relevant Instalment Date. In the event that these instalments as calculated above do not result in a
whole number of OTI Shares, then these shall be rounded up accordingly.

4.4 Prior to the Seventh Instalment the Bank shall make a calculation of the aggregate Deutsche Mark value of
each of the First Instalments according to
20 (twenty) trading days Closing Price following the relevant Instalment Date of each of them (the "Aggregate
Option Value"). The Deutsche Mark amount of the Seventh Instalment shall be calculated as the difference
between the Shareholders Amount (i.e. DM 7 million) less the Aggregate Option Value, and shall be paid in OTI
Shares in accordance with the provisions of Section 4.3 above.

4.5 Seven months after the First Option Instalment Date (the "Eighth Option Instalment Date"), the Bank shall
make a calculation to the effect that the amount of the Aggregate Value and the value of the Seventh Instalment
according to 20 trading days Closing Price following the Seventh Instalment Date shall be added together (the
"Final Value"). If the Final Value amounts to less than the Shareholders Amount, the amount of difference shall be
paid by OTI to Manfred Weise in OTI shares in accordance with the provisions of Section 4.3 above. If the
Final Value amounts to more than the Shareholders Amount, the amount of difference shall be paid by Manfred
Weise to OTI in cash within 20 business days into an account to be specified by OTI.

4.6 If the OTI Trust Shares are not transferred to the Bank in accordance with
Section 5.2 on or before the First Instalment Date, the First Instalment Date is moved to the business day
following the date of transfer of the OTI Trust Shares to the Bank; the other

                                                           7
Instalment Dates and Sixth Instalment Date are moved correspondingly. In the event that any of the Instalments
has not been paid until the 15th of the calendar month following the month in which the respective Instalment Date
was due then such instalment shall bear interest at a rate of 6% p.a. from the first of the calendar month following
the respective Instalment date until payment in accordance with this Agreement is effected.

4.7 The entirety of the OTI Shares to be transferred to the Shareholders in compliance with this Agreement
(hereinafter the "Allotted Shares") constitute the full, final and absolute consideration for the Sold Interest.

5. Provisions to secure the completion of the transactions

5.1 Following the signing of this Agreement OTI shall, at its own expenses: (i) apply for admission to trading
(GERMAN TEXT) of OTI Shares at an aggregate value of DM 7,700,000 (seven million and seven hundred
thousand Deutsche Mark) at Deutsche Borse AG in the Neuer Markt according to the average price of an OTI
Share in the Neuer Markt in the 3 (three) trade days May 29 to 31, 2000 (the "OTI Trust Shares"), (ii) apply for
quotation of the OTI Trust Shares at Deutsche Borse AG (GERMAN TEXT) and (iii) deposit a global certificate
with regard to the OTI Trust Shares at Clearstream banking AG ("Clearstream", the procedure (i) - (iii)
hereinafter referred to as "Registration").

5.2 Once Registration is effected, OTI shall instruct Clearstream to transfer the OTI Trust Shares to the Bank,
which shall hold the OTI Trust Shares in a special escrow account in the name of OTI (the "Escrow Account").
As long as any OTI Trust Shares are held by the Bank they shall be "frozen" (as understood in accordance with
the Israeli Companies Law), i.e. the OTI Trust Shares shall not have any of the rights attached to an OTI Share
under OTI's Articles of Association, in particular the right to vote and the right to receive profits. For the
avoidance of doubt it is understood that any OTI Trust Shares to be transferred from the Bank to Manfred
Weise shall not be frozen.

5.3 Subject to the above provisions, at each of the Instalment Dates, the Bank shall transfer to Manfred Weise
the amount of the OTI Trust Shares which is required to be transferred in accordance with the above provisions.
If the Bank does not have enough OTI Shares to transfer to the Shareholders pursuant to the provisions hereof
then OTI shall either allot to the Shareholders the additional shares required or pay the Shareholders the
difference in cash.

5.4 The remainder, if any, of the OTI Trust Shares once all transfers of the Allotted Shares from the Escrow
Account to the Shareholders have been carried out in accordance with this Agreement, shall be held by the Bank
in trust for OTI, and the Bank shall act with respect to such remainder in accordance with OTI's instructions.

6. Authorization/Indemnity

In order to ensure that the Call Option Interest and the rights and claims connected therewith are transferred free
of encumbrances, as required by this Agreement, the Shareholders hereby waive all rights and claims and give all
consents necessary to ensure that OTI obtains unencumbered sole ownership of the Call Option Interest including
the rights and claims referred to in Clause 3.2.

                                                          8
7. Representations, Warranties and Indemnification of the Sellers

7.1 Sections 9, 10, 11.1 - 11.3, 11.6, 11.7, 11.8 of the SPA shall apply accordingly with regard to the Call
Option Interest or with regard to the Reduced Call Option Interest, as the cause may be, as of the date of the
closing of this Agreement (hereinafter referred to as "Closing").

7.2 Section 11.4 of the SPA shall apply accordingly provided that such claims may already be asserted if and to
the extent the aggregate amount of the claims arising from the SPA together with this Agreement exceed a
threshold of DM 50,000.

7.3 Section 11.5 of the SPA shall apply provided that such claims shall be limited to a payment of a sum in the
amount of 50 % of the Option Price.

7.4 Section 15.1 of the SPA shall apply accordingly provided that it is referred to the Instalments made to the
Bank in accordance with this Agreement. The Special Account shall be pledged to OTI for the period ending on
September 30, 2001. Thereafter, the number of OTI Shares or the sums deposited in the Special Account
subject to the pledge shall be reduced by 17 % and the remainder shall be pledged until 31.12.2002, subject to
the terms and conditions set forth basically in the form of the Escrow Agreement as attached in Annex 7.4.

8. Representations and Warranties of OTI

8.1 Section 16.1 of the SPA applies accordingly provided that with regard to
(2) and (3) it is referred to the relevant Instalment Date as set out in this Agreement.

8.2 Sections 16.2 - 16.5 of the SPA apply accordingly.

9. Miscellaneous

9.1 Section 17 of the SPA applies accordingly provided that according to Section 17.3 no party to this
Agreement shall be entitled to transfer or assign to other or others its rights or obligations under this Agreement or
arising therefrom, unless with the prior written consent of the other party.

10. Costs

10.1 The costs of this Agreement are borne by the Shareholders 50 % and OTI 50 % equally.

10.2 Each Party shall pay half of the real estate transfer tax (GERMAN TEXT) triggered by this Agreement.

11. Other Liabilities

The Sellers shall ensure that - with the exception of all agreements relating to Manfred Weise's position as
managing director and member of the advisory board (GERMAN TEXT) of the Companies - any liabilities of the
Companies vis-a-vis the Sellers shall have been completely fulfilled by the Call Option Effective Date at the latest.
The Sellers hereby waive in advance (by way of genuine contract for the benefit of the Companies) all claims
which they may have against the Companies on or after the Call Option Effective Date; this shall not, however,
apply to claims and liabilities under all agreements relating to Manfred Weise's position as managing director and
member of the advisory board (HEBREW TEXT) of the Companies.

                                                          9
II. Real Property

InterCard K owns a piece of real property at Muhlenstr. 2, 78073 Bad Durrheim, registered in the Land Registry
office of Bad Durrheim (GERMAN TEXT) land registry of Biesingen (GERMAN TEXT)under No. 20006
(GERMAN TEXT)

                                                     III.

With respect to the aforementioned Sale and Purchase Agreement, the persons appearing refer to the deed of
today's date, of notary Dr. Jauch, UR 856/2000J. The contents is know to the persons appearing. The original is
present at the notarisation. The persons appearing waive the right to have the Sale and Purchase Agreement read
aloud again and to have the Sale and Purchase Agreement attached to this deed.

This record including the Annexes has been read aloud in the presence of the persons appearing and the Notary,
approved by the persons appearing and signed by the persons appearing and the Notary in their own handwriting
as follows:

                                             /s/ Manfried Weise

                                             /s/ Dennis Weise

                                             /s/ Patrick Weise




                                                      10
                                                    Annex 1

Ownership Interests in InterCard held by the Shareholders and covered by the Call Option

1. Ownership interests in InterCard K

1.1 Ownership interest held by Manfred Weise:

* one ownership interest in the nominal amount of DM 105,000;

* one ownership interest in the nominal amount of DM 50,000;

* one ownership interest in the nominal amount of DM 50,000;

* one ownership interest in the nominal amount of DM 4,000;

* one ownership interest in the nominal amount of DM 6,000; and

1.2 Ownership interests held by Dennis Robert Weise:

* one ownership interest in the nominal amount of DM 8,000;

* one ownership interest in the nominal amount of DM 24,000; and

1.3 Ownership interests held by Patrick Norbert Weise:

* one ownership interest in the nominal amount of DM 8,000;

* one ownership interest in the nominal amount of DM 24,000; and

1.4 Ownership interests held by the Civil Partnership:

* one ownership interest in the nominal amount of DM 100,000;

* one ownership interest in the nominal amount of DM 94,000;

* one ownership interest in the nominal amount of DM 66,000.

2.2 Ownership interests in InterCard S:

2.2.1 Ownership interest held by Manfred Weise:

* one ownership interest in the nominal amount of DM 72,500;

* one ownership interest in the nominal amount of DM 1,500;

* one ownership interest in the nominal amount of DM 3,500;

* one ownership interest in the nominal amount of DM 10,000;

* one ownership interest in the nominal amount of DM 2,5000; and

2.2.2 Ownership interest held by Dennis Robert Weise:

* one ownership interest in the nominal amount of DM 1,500;

* one ownership interest in the nominal amount of DM 5,500;
* one ownership interest in the nominal amount of DM 5,000; and

                                                    11
2.2.3 Ownership interest held by Patrick Norbert Weise:

* one ownership interest in the nominal amount of DM 1,500;

* one ownership interest in the nominal amount of DM 5,500;

* one ownership interest in the nominal amount of DM 5,000; and

2.2.4 Ownership interest held by the Civil Partnership:

* one ownership interest in the nominal amount of DM 100,000;

* one ownership interest in the nominal amount of DM 63,500;

* one ownership interest in the nominal amount of DM 16,500.

                                                          12
                                                    Annex 7.4

                                               Escrow Agreement

Between

                      Manfred Weise, Dennis Robert Weise, Patrick Norbert Weise
                                   (the "Shareholders" or the "Sellers")

And

On Track Innovations Ltd. ("OTI")

And

                                          M.M. Warburg & Co. KgaA

(or any other bank the parties agree on in writing, latest June 30, 2000; if the parties do not agree on another
bank, M.M. Warburg & Co. KgaA will be party to this Agreement)

                                                    (the "Bank")

(the Shareholders, OTI and the Bank are hereinafter referred to as the "Parties")

Whereas: The Parties have entered into a Share Purchase Agreement (the "SPA") with the date hereof, pursuant
to which OTI has acquired 15% ownership of
(i) InterCard GmbH Kartensysteme, registered in the Commercial Register of the local court Villingen-
Schwenningen under No. HRB 603 and having its offices at Auf der Steig 6, 78052 Willingen-Schwenningen
("InterCard K"), and (ii) InterCard GmbH Systemelectronic, registered in the Commercial Register of the local
court Villingen-Schwenningen under No. HRB 532 and having its offices at MuhlenstraBe 2, 78073 Bad
Durrheim ("InterCard S", collectively referred to in this Agreement as "InterCard" or the "Companies")
(hereinafter referred to as the "Sold Interest") from the Shareholders, and;

Whereas: The Sellers own the remaining 49 % ownership interest in InterCard (hereinafter the "Remaining
Interest" or "Option Interest") or are entitled by way of call options granted by Mr. Werner Messmer to acquire
the Remaining Interest (the "Messmer Options");

Whereas: The Sellers and OTI have agreed in the SPA to pay the purchase price for the Sold Interest (as defined
in the SPA) (the "Interest Price") by way of transferring ordinary shares of NIS 0.01 n.v. each of OTI
(hereinafter referred to as "OTI Shares") to the Shareholders and have agreed on a mechanism by way of which
the Bank is instructed to act as a trustee in relation to the transfer of the OTI Shares to the Shareholders.
NOW, THEREFORE, The Parties agree as follows:

1. Escrow Account

1.1 The Bank shall establish an escrow account (the "Escrow Account") in the name of OTI to which OTI is
obliged and entitled to transfer OTI Shares as purchase price for the Sold Interest.

1.2 OTI shall irrevocably transfer to the Bank (without any right to recall except for OTI's right to the remainder
according to Section 5 and free of any third party rights) OTI Shares in an aggregate value of DM 5,500,000
according to the official average closing price of a OTI Share in the Neuer Markt, traded in Frankfurt at the
Xetra system (the "Closing Price"), in the 3 (three) trading days of May 29, to May 31, 2000 (the "OTI Trust
Shares").

1.3 As long as any OTI Trust Shares are held by the Bank they shall be "frozen" (as understood in accordance
with the Israeli Companies Law), i.e. the OTI Trust Shares shall not have any of the rights attached to an OTI
Share under OTI's Articles of Association, in particular the right to vote and the right to receive profits.

2. Interest Price

2.1 As Interest Price for the Sold Interest in InterCard OTI, the Shareholders agreed on a total amount of DM
5,000,000, payable in OTI Shares. Mr. Manfred Weise is irrevocably authorized by the other Shareholders to
receive the entire Interest Price.

2.2 The Bank shall transfer the amount of the OTI Trust Shares which is required to be transferred for the
payment of the Interest Price to the following account:

Manfred Weise, Baden-Wurttembergische Bank AG Donaueschingen, account no. 6208275540, bank sort
code 694 210 20, S.W.I.F.T. BWBK DE 6S 694.

2.3 The Bank shall pay the Interest Price from the Escrow Account in 5 (five) equal instalments (the
"Instalments"), each totaling DM 1,000,000 (one million Deutsche Mark). The Bank shall transfer the Instalment
in OTI Shares as follows:

2.3.1 The first Instalment (the "First Instalment") shall be paid on July 15, 2000 (the "First Instalment Date"),

2.3.2 The second Instalment (the "Second Instalment") shall be paid on September 15, 2000 (the "Second
Instalment Date"),

2.3.3 The third Instalment (the "Third Instalment") shall be paid on September 15, 2000 (the "Third Instalment
Date"),

                                                          2
2.3.4 The fourth instalment (the "Fourth Instalment") shall be paid on October 15, 2000 (the "Fourth Instalment
Date"),

2.3.5 The fifth Instalment (the "Fifth Instalment") shall be paid on November 15, 2000 (the "Fifth Instalment
Date");

(and the First, Second, Third and Fourth Instalments shall be referred to collectively as the "First Instalments";
and the First, Second, Third, Fourth and Fifth Instalment Dates shall be referred to collectively as the "Instalment
Dates").

2.4 The Bank shall determine the number of OTI Trust Shares to be transferred to the Shareholders as payment
of the Interest Price for each of the Instalments in accordance with the Closing Price in the 3 (three) trading days
prior to the relevant Instalment Date. In the event that these instalments as calculated above do not result in a
whole number of OTI Shares, then these shall be rounded up by the Bank accordingly.

2.5 Prior to the Fifth Instalment the Bank shall make a calculation of the aggregate Deutsche Mark value of each
of the First Instalments according to
20 (twenty) trading days Closing Price following the relevant Instalment Date of each of them (the "Aggregate
Value"). The Deutsche Mark amount of the Fifth Instalment shall be calculated as the difference between the
Interest Price less the Aggregate Value, and shall be transferred in OTI Shares in accordance with the provisions
of Section 2.4 above.

2.6 On December 15, 2000 (the "Sixth Instalment Date"), the Bank shall make a calculation to the effect that the
amount of the Aggregate Value and the value of the Fifth Instalment according to 20 trading days Closing Price
following the Fifth Instalment Date shall be added together (the "Final Value"). If the Final Value amounts to less
than DM 5 million, the amount of difference shall be transferred by the Bank to Manfred Weise in OTI Shares in
accordance with the provisions of Section 2.4 above. If the final value amounts to more than DM 5 million, the
amount of difference shall be paid by Manfred Weise to OTI in cash within 20 business days into an account to
be specified by OTI.

2.7 If the OTI Trust Shares are not transferred to the Bank on or before the First Instalment Date, the First
Instalment Date is moved to the business day following the date of transfer of the OTI Trust Shares to the Bank;
the other Instalment Dates and the Sixth Instalment Date are moved correspondingly.

2.8 If the Bank does not have enough OTI Shares to transfer to the Shareholders for the payment of the Interest
Price the Bank shall inform OTI and the Shareholders immediately; no further action of the Bank is required.

3. Confirmation of Receipt of the OTI Trust Shares

The Bank shall immediately after the irrevocable receipt of the OTI Trust Shares (without any right of recall of
OTI whatsoever except for OTI's right to the remainder according to Section 5) confirm in writing to Manfred
Weise (on behalf of the Shareholders) and to OTI the irrevocable receipt of the OTI Trust Shares (without any
right of recall of OTI whatsoever except for OTI's right to the remainder according to Section 5) (the
"confirmation"). The Confirmation shall basically be in the form of Exhibit A.

                                                         3
4. Special Account

4.1 The Bank shall establish a special account (the "Special Account") in the name of Mr. Manfred Weise, which
Mr. Manfred Weise may only dispose of (GERMAN TEXT) according to the following provisions or the written
prior consent of OTI.

4.2 The Bank shall deduct an equivalent amount of DM 800,000 in OTI Trust Shares (the "Secured Amount")
from the Fifth Instalment or, if the Fifth Instalment is not effected in the year 2000, the last Instalment effected in
the year 2000. Mr. Manfred Weise herewith instructs the Bank to sell these OTI Shares in portions of 1/20 of
the number of shares each trading day following the relevant Instalment Date.

4.3 Mr. Manfred Weise herewith irrevocably authorizes OTI, to instruct the Bank to dispose of the Secured
Amount in favour of Mr. Werner Messmer's bank account, the bank account number of which will be provided
by Mr. Manfred Weise, with the aim of paying the purchase price for the Messmer Option. In the event that OTI
does not instruct the Bank to dispose of the Secured Amount until 1 April, 2001, the Secured Amount shall be
released to Mr. Weise.

5. Remainder of OTI Trust Shares

The Bank shall hold the remainder, if any, of the OTI Trust Shares for OTI once all transfers of OTI Shares from
the Escrow Account to the Shareholders have been carried out in accordance with Section 2 of this Agreement
and the Bank shall act with Respect to such remainder in accordance with OTI's instructions.

6. Costs

The costs incurred by the Bank shall be borne by OTI 50% and the Shareholders 50% equally.

7. Addresses

The Parties addresses for the purpose of this Agreement are as set forth below, unless otherwise notified in
writing to all parties:

Shareholders:
Address: Manfred Weise, Eschenweg 8, D-78244 Gottmadingen Tel: ++49-7731-978615
Fax: ++49-7731-978606
Copy to Gleiss Lutz Hootz Hirsch:
Attention: Dr. Stephan Wilske

                                                           4
Address: MaybachstraBe 6, D-70469 Stuttgart Tel: ++49-711-89970
Fax: ++49-711-855096

OTI
Address: Z.H.R.I.Z., Rosh Pina 12000, Israel Tel: ++972-6-6938884
Fax: ++972-6-6938887

Copy to White & Case
Attention: Dr. Johannes Lubking
Address: Bockenheimer LanstraBe 51-53, D-60325 Frankfurt am Main Tel: ++49-69-713 770
Fax: ++49-69-713 77 100

8. Miscellaneous

8.1 Governing Law. This Agreement shall be governed by the laws of the Federal Republic of Germany without
regard to its conflict of law provisions.

8.2 Partial Invalidity. If one or more provisions of this Agreement should be or become wholly or partially invalid,
void or impracticable, the validity of the other provisions of this Agreement shall not be affected thereby. The
same shall apply if it should transpire that this Agreement contains a gap. In place of the invalid, void or
impracticable provision (or, as the case may be, in order to fill the gap) the parties to this Agreement shall agree
on an appropriate provision which comes as close as legally possible to what the parties were trying to achieve
with the invalid, void or impracticable provision (or, as the case may be, the invalid, void or impracticable part
thereof). In the event that a gap in this Agreement needs to be filled, a provision shall be agreed upon which, in
view of the purpose and intent of this Agreement, comes as close as possible to that the parties would have
agreed if they had been aware of the gap at the time that this Agreement was concluded.

8.3 Liability of the Bank. The Bank is only liable for the care it employs in its own affairs.

Manfred Weise

Dennis Robert Weise

Patrick Norbert Weise

On Track Innovations Ltd.

M.M. Warburg & Co. KgaA

                                                           5
                                                 Exhibit A

                                  [Letterhead of M.M. Warburg & Co. KgaA]

Manfred Weise
Eschenweg 8
D-78244 Gottmadingen
Fax: ++49-7731-978606

On Track Innovations Ltd.
Z.H.R.I.Z.
Rosh Pina 12000
Israel
Fax: ++972-6-6938887

Cc: Gleiss Lutz Hootz Hirsch
Attention: Dr. Stephan Wilske
Maybachstr. 6
D-70469 Stuttgart
Fax: ++49-711-855096

White & Case
Attention: Dr. Johannes Lubking
Bockenheimer LandstraBe 51-53
D-60325 Frankfurt am Main
Fax: ++49-69-713 77 100

Confirmation of Receipt of the OTI Trust Shares

Gentlemen,

In accordance with Section 3 of the Escrow Agreement of June 15, 2000 by and between Manfred Weise,
Dennis Robert Weise, Patrick Norbert Weise (the "Shareholders"), On Track Innovations Ltd. ("OTI") and
M.M. Warburg & Co. KgaA ("Escrow Agreement") we hereby confirm the irrevocable receipt of the OTI Trust
Shares without any recall of OTI whatsoever except for OTI's right to the Remainder according to Section 5 of
the Escrow Agreement.

Sincerely yours,

M.M. Warburg & Co. KgaA
(or any other bank according to this escrow agreement)

                                                         6
                                              (HEBREW TEXT)

                                      BACH, ARAD, SCHARF & CO.

                                               LAW OFFICES

                                        67892 (HEBREW TEXT)
                           Microdaf House, 2 Hashalom road, Tel-Aviv 67892, Israel
             Fax. (972)3-5625304 . (HEBREW TEXT) Tel. (972)3-5625303 . (HEBREW TEXT)
                                        Bacharad@bacharad.com

                                              (HEBREW TEXT)

JONATHAN BACH LL.B.
CHUD ARAD LL.B.
GEE'V SCHARF LL.B.
EVTAN LIRAZ LL.B
SHARON HALE-GILAD LL.B.
AFAT CHERPACK LL.B.
DREN TENENBOIM LL.B.
SHARON BEN-HAIM LL.B.
SIR EHRLICH LL.B.
HAGAI HALEVY LL.B.
ODED GREEN LL.B.B
YARIV ABRAMOVICH, LL.B.
ARIEL MACHMAN LL.B.
IDIT NOACH LL.B., M.B.A.
ZOHAR UZDIN LL.B., M.Sc.
YOSSI ROSENBLUM LL.B., M.B.A.
ONBAR OREN LL.B.

*Member of the Israeli and Geneva Bar

                                                June 13th, 2000

                                                    635/95

Mssrs. Manfred Weise
Dennis Weise Hand Delivery Patrick Weise

Dear Sirs,

Purchase of 51% interest in InterCard GmBH Kartensysteme and InterCard GmbH Systemelectronic
(collectively "InterCard") by On Track Innovations Ltd. ("OTI") (the "SPA") and Options to sell and purchase
the remaining ownership interest of 49% of InterCard (the "OA") (collectively the "Transaction")

As OTI's legal counsels, we hereby certify that Mr. Oded Bashan, holder of Israeli Passport No. 9008439, is
duly authorized by OTI to negotiate and conclude detailed agreements regarding the Transaction and to sign all
agreements in connection with the Transaction and all ancillary documents (including, inter alia, a share pledge
agreement and an escrow agreement) on OTI's behalf. The signature of Oded Bashan together with the stamp or
printed name of OTI, is biding upon OTI.

Sincerely yours,
Nir Ehrlich, Adv.
Bach, Arad Scharf & Co.
[GERMAN TEXT]
                Exhibit 2-A

(GERMAN TEXT)
                Exhibit 2-B

[GERMAN TEXT]
                                           EXHIBIT 10.23

Share Pledge Agreement, dated as of June 15, 2000, by and among Manfred Weise, Dennis Robert Weise,
Patrick Norbert Weise, a civil partnership and the Registrant.
Notar Dr. Rolf Jauch

[LOGO]

                                           Beglaubigte Abschrift

Die Ubereinstimmung nachstehender Abschrift mit der Urschrift wird beglaubigt.

Stuttgart, den 21. Juni 2000 Notar

                                                - Dr. Jauch -
                                          Deed Roll No. 957/2000J

                                             STUTTGART

                                       done this 15th day of June 2000
                                 (in words: fifteenth day of June two thousand)

Before me,
Notary Dr. Rolf Jauch with offices at FriedrichstraBe 9A, 70174 Stuttgart, is appearing today at MaybachstraBe
6, 70469 Stuttgart, whence I was summoned:

Mr. Manfred Weise, managing director, born on 11 September 1941, resident at Eschenweg 8, 78244
Gottmadingen, who proved his identity by means of his German passport.

Mr. Manfred Weise declares that he is acting
a) in his own name,
b) as shareholder of the civil partnership under the German Civil Code (GbR) consisting of Manfred Weise,
Dennis Robert Weise and Patrick Norbert Weise (hereinafter referred to as the "Civil Partnership").

Mr. Dennis Robert Weise, student, born on 26 June 1973, resident at Marienweg 8, 78465 Konstanz, who
proved his identity by means of his German passport.

Mr. Dennis Robert Weise declares that he is acting
a) in his own name,
b) as shareholder of the Civil Partnership.

Mr. Patrick Norbert Weise, student, born on 4 July 1974, resident at Bettina-von-Arnim-Weg 5, 79322
Karlsruhe, who proved his identity by means of his German passport.

Mr. Patrick Norbert Weise declares that he is acting
a) in his own name,
b) as shareholder of the Civil Partnership.
                                             Share Pledge Agreement

                                                     BETWEEN

1. On Track Innovations Limited Z.H.R.I.Z. Rosh Pina 12000
Israel

- hereinafter referred to as "Pledgor" -

                                                        AND

2. Mr. Manfred Weise Eschenweg 8 78244 Gottmadingen

- hereinafter referred to as "Manfred Weise" -

3. Mr. Patrick Norbert Weise Bettina-von-Arnim-Weg 5 79322 Karlsruhe

- hereinafter referred to as "Patrick Weise" -

4. Herrn Dennis Robert Weise Marienweg 8 78465 Konstanz

- hereinafter referred to as "Dennis Weise" -

5. The partnership under the German Civil Code (BGB) consisting of

                     Manfred Weise, Patrick Norbert Weise and Dennis Robert Weise

                                   - hereinafter referred to as "Civil Partnership" -

- Manfred Weise, Patrick Norbert Weise, Dennis Robert Weise and the Civil Partnership hereinafter collectively
referred to as the "Pledgee" -

                                             DATED JUNE 15, 2000

                                                           3
I.

1. Reference is made to a share sale and purchase agreement between the Pledgor (as Purchaser) and Manfred
Weise, Patrick Weise, and Dennis Weise (as Sellers) dated June 15, 2000 (hereinafter "Sale and Purchase
Agreement");

2. InterCard GmbH Kartensysteme is a German limited liability company registered with the commercial register
at the local court (Amtsgericht) of Villingen-Schwenningen under HRB 603 (hereinafter referred to as "InterCard
K"). By means of the Sale and Purchase Agreement of June 15, 2000 between Manfred Weise, Patrick Norbert
Weise and Dennis Robert Weise (as Sellers) and Pledgor (as Purchaser), Pledgee acquired shares in InterCard
K in the aggregate nominal amount of DM 561,000.00, representing 51% of the nominal capital of InterCard K
(hereinafter referred to as the "InterCard K Shares").

3. InterCard GmbH Systemelectronic is a German limited liability company registered with the commercial
register at the local court (Amtsgericht) Villingen-Schwenningen under HRB 532 (hereinafter referred to as
"InterCard S"; together with InterCard K hereinafter referred to as the "Companies"). By means of the Sale and
Purchase Agreement of June 15, 2000 between Manfred Weise, Patrick Weise and Dennis Weise (as Sellers)
and Pledgor (as Purchaser), Pledgee acquired shares in InterCard S in the aggregate nominal amount of DM
306,000.00, representing 51% of the nominal capital of InterCard S (hereinafter referred to as the "Intercard S
Shares").

- the InterCard K Shares and the InterCard S Shares, hereinafter collectively referred to as the "Shares" -

                                                        4
4. Mr. Oded Bashan, businessman, born on 16 November 1946, who proved his identity by means of his Israeli
passport.

Mr. Oded Bashan declares that he is acting not on his own behalf but as President and CEO with power of sole
representation of On Track Innovations Ltd., a public company duly organized and existing under the laws of the
State of Israel (Reg. No.: 52-004268-2), whose ordinary shares are admitted for trading in the Neuer Markt of
the Frankfurt Stock Exchange (Frankfurter Wertpapierborse) (hereinafter referred to as "Neuer Markt"), having
its principal place of business at Z.H.R. I.Z., Rosh Pina 12000, Israel (hereinafter referred to as "OTI"). As proof
of his power of sole representation, Mr. Bashan presents a [legal opinion] issued by the law offices of Bach,
Arad, Scharf & Co. which was presented at the notarisation in the original and will be submitted, in certified
copy, to the protocol.

The persons appearing deny on question any prior involvement in the sense of section 3 para. 1 sentence 1 no. 7
BeurkG (law pertaining to notarial authentications).

The persons appearing hereby request this Notarial Deed to be executed in the English language for the
convenience of the party represented by the person appearing at 4, and waive the presence of an interpreter. The
Notary who himself has a sufficient command of the English language verified that the persons appearing also
have a sufficient command of the English language.

The persons appearing hereby declare for notarisation:

                                                         2
II.

1. OBLIGATIONS SECURED

The Security Interest (as defined in Section 2 below) shall secure the due and punctual payment of the
consideration as provided for under the Sale and Purchase Agreement (the "Obligations").

2. SECURITY INTEREST (PFANDRECHT)

2.1 To secure the due and punctual payment by Pledgor of the Obligations, Pledgor hereby grants to Pledgee
and Pledgee accepts, with immediate effect, a Security Interest (Pfandrecht) in and to all Shares held by the
Pledgor and all additional future shares in the Companies the Pledgor may acquire after the date of this
Agreement (i) in the event of any increase of the share capital of the Companies or (ii) in the event of any further
acquisition of shares in the Companies in the future (hereinafter referred to as the "Future Shares" and together
with the Shares also referred to as the "Pledged Shares"), together with all ancillary rights and claims referred to
under sub-Section 2.2 hereof (hereinafter referred to as the "Security Interest").

2.2 The pledge constituted by this Agreement includes the present and future rights to receive:

(i) profits payable on the Shares and on the Future Shares, if any;

(ii) liquidation proceeds, consideration for redemption of shares (Einziehungsentgelt), repaid capital in case of a
capital decrease, any compensation in case of termination (Kundigung) and/or withdrawal (Austritt) of a
shareholder of the Companies as well as any other substitute received by the Pledgor in lieu of the Shares or, as
the case may be, the Future Shares.

2.3 Pledgor shall be entitled to receive dividend payments and to exercise the voting rights in respect of the
Shares and the Future Shares, if any.

2.4 Any and all consents and approvals required under the Articles of Association of the Companies have been
granted and have been appended to this Deed (Exhibit [Beilage] 1 and 2).

                                                          5
3. REPRESENTATIONS AND WARRANTIES

Pledgor represents and warrants that Pledgor has good title to the Shares, free and clear of all claims, mortgages,
pledges, liens, encumbrances and security interests of every nature whatsoever.

4. FURTHER ASSURANCES

Pledgor agrees that at any time and from time to time as its expense, it will execute all further documents, and
take all further action Pledgee may reasonably request, in order to perfect, evidence or further document the
Security Interest or to enable Pledgee to exercise and enforce its rights and remedies hereunder with respect to
the Pledged Shares.

5. VOTING RIGHTS

As long as there shall exist no condition, event or act which constitutes, or with notice or lapse of time, or both,
would constitute, a default under the agreements, Pledgor shall be entitled to exercise, as it shall think fit, but not
inconsistent with the terms hereof or of the Sale and Purchase Agreement, the voting power with respect to the
Pledged Shares.

6. EVENTS OF DEFAULT/PLEDGEE'S REMEDIES UPON DEFAULT

6.1 If the Pledgor is in default of complying with the Obligations, Pledgee may arrange to have the Pledged
Shares sold at a public auction or any other sale conducted in accordance with German law. Pledgee may
exercise (in compliance with all applicable laws in effect in Germany in respect of the Pledged Shares), in addition
to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a
secured party (Pfandglaubiger) on default under German law.

6.2 Pledgee shall give Pledgor at least two weeks' prior notice of its intention to realise the Pledged Shares.
Following the realisation of the Pledged Shares, Pledgee shall use the proceeds to discharge the Obligations.

6.3 After all Obligations have been discharged, the Security Interest in the Pledged Shares and all ancillary rights
and claims referred to under sub-Section 2.2 shall expire automatically. Any surplus of the cash proceeds
remaining after payment in full to Pledgee of all the Obligations shall be paid over to Pledgor, at its address
specified in sub-Section 12.2 or to whomsoever may be lawfully entitled to receive such surplus.

                                                           6
7. COSTS AND EXPENSES

Each party shall bear its own costs incurred or to be incurred in connection with the preparation, negotiations and
implementation of this Agreement. The costs incurred in connection with the notarization of this Agreement shall
be borne by Pledgor 50% and the Pledgee 50% equally.

8. SECURITY INTEREST ABSOLUTE

All rights of Pledgee hereunder, the Security Interest and all obligations of Pledgor hereunder shall be absolute
and unconditional irrespective of any change in the time, manner or place of payment of, or in any other terms of,
all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Sale
and Purchase Agreement.

9. AMENDMENTS

No amendment or waiver of any provision of this Agreement nor consent to any departure by Pledgor herefrom
shall in any event be effective unless the same shall be in writing and signed by Pledgee, and then such waiver or
consent shall be effective only for the specific purpose for which given.

10. NO WAIVER; CUMULATIVE REMEDIES

Any failure on the part of Pledgee to exercise, and any delay in exercising, any right, power or remedy hereunder
shall not operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by
Pledgee preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. All
remedies hereunder are cumulative and are not exclusive of any other remedies provided by law.

                                                         7
11. TERMINATION; RELEASE OF SECURITY INTEREST

11.1 This Agreement shall terminate upon payment of the Fifth Instalment by Pledgor under section 5.2 of the
Sale and Purchase Agreement provided that the Parties do not enter into any further agreement for the acquisition
by OTI of shares in the Companies prior to December 31, 2001 (hereinafter referred to as "Future
Agreements"); in the latter event, this Agreement shall terminate upon complete payment of the consideration
provided for in any such Future Agreements (hereinafter referred to as "Termination Date").

11.2 The Shareholders are obliged to gradually release the Security Interest in correspondence with the gradual
payment of the Shareholders Amount as defined under the Sale and Purchase Agreement or the gradual payment
of the consideration of any Future Agreement, if any. It is understood by the parties that (i) upon complete
payment of any Instalment as defined by the Sale and Purchase Agreement, Shares corresponding as closely as
possible to 20% of the Shares will be released and (ii) upon payment of the Fifth Instalment or a Sixth Instalment,
if any, the Shares will be released.

11.3 Pledgee shall be obliged to confirm to the Pledgor each release by issue of a confirmation letter.

12. NOTICES

12.1 Immediately following the notarization of this Agreement, Pledgor shall send notices ("the Notices") to
InterCard K and InterCard S substantially in the form set forth in Annexes 1 and 2 hereto. After the Notice has
been countersigned by InterCard K and InterCard S and returned to Pledgor, Pledgor shall promptly forward
copies of the Notices to Pledgee.

12.2 All notices or other communications required or permitted to be given hereunder shall be in writing and shall
be delivered at or sent to the respective addresses below:

To Pledgee: Mr. Manfred Weise
Eschenweg 8
78244 Gottmadingen
Germany
Fax: 07731-978006]

                                                         8
To Pledgor: On Track Innovations Limited Z.H.R.I.Z.

                                                   Rosh Pina 12000

Israel
Fax: 00972-6938887

12.3 Either party may by 5 days' prior notice to the other party change the address or facsimile number at which
notices or other communications are to be given to it.

13. CONTINUING SECURITY INTEREST; AGREEMENTS

This Agreement shall create a continuing security interest in the Pledged Shares and shall

(i) remain in full force and effect until the termination of this Agreement;

(ii) be binding upon Pledgor, their successors and assigns, and

(iii) inure, together with the rights, powers and remedies of Pledgee hereunder, to the benefit of Pledgee and its
successors, transferees and assigns. Notwithstanding the foregoing clause (ii), Pledgor shall not, except with the
prior written consent of Pledgee or, as otherwise provided in this Agreement, be permitted to assign this
Agreement or any interest herein.

Without limiting the generality of the foregoing clause (iii), Pledgee may assign or otherwise transfer all or any
portion of its rights, benefits and obligations under the Obligations or any agreement relating thereto to any other
person or entity.

14. GOVERNING LAW

This Agreement shall be governed by and construed exclusively in accordance with the substantive laws of the
Federal Republic of Germany (i.e. under exclusion of its conflict-of-laws provisions).

                                                            9
15. SEVERABILITY

In case any provisions of this Agreement or any security interest or other right of Pledgee hereunder shall be held
to be invalid, illegal or unenforceable, such invalidity, illegality and/or unenforceability shall not affect any other
provisions herein or any security interest or any other right granted hereby. Any invalid, illegal or unenforceable
provision shall be replaced retroactively with that valid and enforceable provision which approaches most closely
the economic purpose sought to be achieved by the invalid, illegal or unenforceable provision.

This record (including the Annexes) has been read aloud in the presence of the persons appearing and the
Notary, approved by the persons appearing and signed by the persons appearing and the Notary in their own
handwriting as follows:

                                            /s/ Manfred Weise

                                            /s/ Dennis Weise

                                            /s/ Patrick Weise

                                            ON TRACK INNOVATIONS LTD.




                                                          10
Annex 1 to Notarial Deed

Notary ____________ Deed Roll No. /2000

Annex 1 to Pledge Agreement

Gentlemen:

The purpose of this letter is to notify you that as shareholder of InterCard GmbH Kartensysteme, we have
executed a pledge agreement, dated as of June 15, 2000 (the "Pledge Agreement"), pursuant to which we
granted to Pledgee a security interest (Pfandrecht) in and to all the Pledged Shares as defined in the Pledge
Agreement (the "Security Interest"). This Security Interest secures the due and punctual payment and
performance of certain obligations by On Track Innovations Ltd to Mr. Manfred Weise, Mr. Patrick Weise, Mr.
Dennis Weise and the partnership under German Civil Code (BGB) consisting of Manfred Weise, Patrick Weise
and Dennis Weise described more fully in Section 2 of the Pledge Agreement.

Our delivery to you of this letter and the enclosed copy of the Pledge Agreement constitutes formal notice of the
grant of the Security Interest.

If the foregoing is satisfactory to you, please acknowledge by signing below.

By: ____________________

Name:

Title:

Agreed to and accepted

this __ day of ________ 2000

By: ____________________

Name:

Title:
Annex 2 to Notarial Deed

Notary ____________ Deed Roll No. /2000

Annex 2 to Pledge Agreement

Gentlemen:

The purpose of this letter is to notify you that as shareholder of InterCard GmbH Systemelectronic, we have
executed a pledge agreement, dated as of June 15, 2000 (the "Pledge Agreement"), pursuant to which we
granted to Pledgee, the grant of a security interest (Pfandrecht) in and to all the Pledged Shares as defined in the
Pledge Agreement (the "Security Interest"). This Security Interest secures the due and punctual payment and
performance by On Track Innovations Ltd of certain obligations to Mr. Manfred Weise, Mr. Patrick Weise, Mr.
Dennis Weise and the partnership under German Civil Code (BGB) consisting of Manfred Weise, Patrick Weise
and Dennis Weise described more fully in Section 2 of the Pledge Agreement.

Our delivery to you of this letter and the enclosed copy of the Pledge Agreement constitutes formal notice of the
grant of the Security Interest.

If the foregoing is satisfactory to you, please acknowledge by signing below.

By: ____________________

Name:

Title:

Agreed to and accepted

this __ day of ________ 2000

By: ____________________

Name:

Title:
                                          BACH, ARAD, SCHARF & CO.
                                                LAW OFFICES

         NATHAN BACH LL.B.                                                             [HEBREW   TEXT]
         UD ARAD LL.B.                                                                 [HEBREW   TEXT]
         I'V SCHARF LL.B.                                                              [HEBREW   TEXT]
         IAN LIRAZ* LL.B.                                                              [HEBREW   TEXT]
         ARON HALE-GILAD LL.B.                                                         [HEBREW   TEXT]
         AT CHERPACK LL.B.                                                             [HEBREW   TEXT]
         EN TENENBOIM LL.B.                                                            [HEBREW   TEXT]
         ARON BEN-HAIM LL.B.                                                           [HEBREW   TEXT]
         EHRLICH LL.B.                                                                 [HEBREW   TEXT]
         ED GREEN LL.B.                                                                [HEBREW   TEXT]
         RIV ABRAMOVICH LL.B.                                                          [HEBREW   TEXT]
         EL NACHMAN LL.B.                                                              [HEBREW   TEXT]
         NOACH LL.B., M.B.A.                                                           [HEBREW   TEXT]
         HAR UZDIN LL.B., M.Sc.                                                        [HEBREW   TEXT]
         SI ROSENBLUM LL.B., M.B.A.                                                    [HEBREW   TEXT]
         AR OREN LL.B.                                                                 [HEBREW   TEXT]

         ____________________________________
         Member of the Israeli and Geneva Bar

                                               June 13th, 2000

                                                    635/95

         Mssrs. Manfred Weise
                Dennis Weise                                              Hand Delivery
                Patrick Weise




Dear Sirs,

Purchase of 51% interest in InterCard GmbH Kartensysteme and InterCard GmbH Systemelectronic
(collectively "InterCard") by On Track Innovations Ltd. ("OTI") (the "SPA") and Options to sell and purchase
the remaining ownership interest of 49% of Intercard (the "OA") (collectively the "Transaction").

As OTI's legal counsels, we hereby certify that Mr. Oded Bashan, holder of Israeli Passport No. 9008439, is
duly authorized by OTI to negotiate and conclude detailed agreements regarding the Transaction and to sign all
agreements in connection with the Transaction and all ancillary documents (including, inter alia, a share pledge
agreement and an escrow agreement) on OTI's behalf. The signature of Oded Bashan together with the stamp or
printed name of OTI, is binding upon OTI.

Sincerely yours,

                                          /s/ Nir Ehrlich
                                          ---------------
                                          Nir Ehrlich, Adv.
                                          Bach, Arad Scharf & Co.
Die Ubereinstimmung vorstehender Abschrift mit der mir heute vorliegenden Urschrift wird beglaubigt.

Stuttgart, den 15. Juni 2000 Notar

                                               /s/ Dr. Jauch
                                               -------------
                                               - Dr. Jauch -
  EXHIBIT 1

[GERMAN TEXT]
EXHIBIT 2

            [GERMAN TEXT]
                                            EXHIBIT 10.24

Escrow Agreement with respect to the Share Purchase Agreement, dated as of June 15, 2000, by and among
Manfred Weise, Dennis Robert Weise, Patrick Norbert Weise, a civil partnership and the Registrant.
                                              Escrow Agreement

with respect to the Share Purchase Agreement

between

                      Manfred Weise, Dennis Robert Weise, Patrick Norbert Weise
                                   (the "Shareholders" or the "Sellers")

and

                                          On Track Innovations Ltd
                                                  ("OTI")

and

                                         M M Warburg & Co KGaA
                                              (the "Bank")

(the Shareholders, OTI and the Bank are hereinafter referred to as the "Parties")

Whereas: The Sellers and OTI have entered into a Share Purchase Agreement (the "SPA") dated June 15, 2000
pursuant to which OTI has acquired 51% ownership of
(i) InterCard GmbH Kartensysteme, registered in the Commercial Register of the local court Villingen-
Schwenningen under No. HRB 603 and having its offices at Auf der Steig 6, 78052 Villingen-Schwenningen
("InterCard K"), and (ii) InterCard GmbH Systemelectronic, registered in the Commercial Register of the local
court Villingen-Schwenningen under No. HRB 532 and having its office at MuhlenstraBe 2, 78073 Bad
Durrheim ("InterCard S", collectively referred to in this Agreement as "InterCard" or the "Companies") from the
Shareholders (the "Sold Interest"), and;

Whereas: The Sellers own the remaining 49% ownership interest in InterCard (hereinafter the "Remaining
Interest") or are entitled by way of call options granted by Mr. Werner Messmer to acquire the Remaining
Interest (the "Messmer Options");

Whereas: The Sellers and OTI have agreed in the SPA to pay the purchase price for the Sold Interest (as defined
in the SPA) (the "Interest Price") by way of transferring ordinary shares of NIS 0.01 n.v. each of OTI
(hereinafter referred to as "OTI Shares") to the
Shareholders and have agreed on a mechanism by way of which the Bank is instructed to act as a trustee in
relation to the transfer of the OTI Shares to the Shareholders.

NOW, THEREFORE, the Parties agree as follows:

1. Escrow Account

1.1 The Bank shall establish an escrow account (the "Escrow Account") in the name of OTI to which OTI is
obliged and entitled to transfer OTI Shares as purchase price for the Sold Interest.

1.2 OTI shall irrevocably transfer to the Bank (without any right of recall except for OTI's right to the remainder
according to Section 4 and free of any third party rights) OTI Shares in an aggregate value of DM 5,500,000
according to the official average closing price of an OTI Share in the Neuer Markt, traded in Frankfurt at the
Xetra system (such official average closing price hereinafter referred to as the "Closing Price"), in the 3
(three) trading days of May 29 to 31, 2000, which are admitted to trading at Deutsche Borse AG in the Neuer
Markt (the "OTI Trust Shares").

1.3 As long as any OTI Trust Shares are held in the Escrow Account with the Bank they shall be "frozen" (as
understood in accordance with the Israeli Companies Law), i.e. the OTI Trust Shares shall not have any of the
rights attached to an OTI Share under OTI's Articles of Association, in particular the right to vote and the right to
receive profits.

2. Interest Price

2.1 As Interest Price for the Sold Interest in InterCard OTI and the Shareholders agreed on a total amount of
DM 5,000,000, payable in OTI Shares. Mr. Manfred Weise is irrevocably authorized by the other Shareholders
to receive the entire Interest Price.

2.2 OTI irrevocably instructs by these presents the Bank to transfer the amount of the OTI Trust Shares which is
required to be transferred for the payment of the Interest Price to the following account.

Manfred Weise, Baden-Wurttembergische Bank AG Donaueschingen, account no. 6208275540, bank sort
code 694 210 20, S.W.I.F.T. BWBK DE 6S 694.

2.3 OTI irrevocably instructs by these presents the Bank to pay the Interest Price from the Escrow Account in 5
(five) equal instalments (the "Instalments"), each totaling DM 1,000,000 (one million Deutsche Mark). The Bank
shall transfer the Instalment in OTI Shares as follows:

2.3.1 The first Instalment (the "First Instalment") shall be paid on July 15, 2000 (the "First Instalment Date"),

                                                         -2-
2.3.2 The second Instalment (the "Second Instalment") shall be paid on August 15, 2000 (the "Second Instalment
Date"),

2.3.3 The third Instalment (the "Third Instalment") shall be paid on September 15, 2000 (the "Third Instalment
Date"),

2.3.4 The fourth Instalment (the "Fourth Instalment") shall be paid on October 15, 2000 (the "Fourth Instalment
Date"),

2.3.5 The fifth Instalment (the "Fifth Instalment") shall be paid on November 15, 2000 (the "Fifth Instalment
Date"),

(and the First, Second, Third and Fourth Instalments shall be referred to collectively as the "First Instalments';
and the First, Second, Third, Fourth and Fifth Instalment Dates shall be referred to collectively as the "Instalment
Dates").

2.4 The Bank shall determine the number of OTI Trust Shares to be transferred to the Shareholders as payment
of the Interest Price for each of the Instalments in accordance with the Closing Price in the 3 (three) trading days
prior to the relevant Instalment Date. In the event that these instalments as calculated above do not result in a
whole number of OTI Shares, then these shall be rounded up by the Bank accordingly.

2.5 Prior to the Fifth Instalment the Bank shall make a calculation of the aggregate Deutsche Mark value of each
of the First Instalments according to
20 (twenty) trading days Closing Price following the relevant Instalment Date of each of them (the "Aggregate
Value"). The Deutsche Mark amount of the Fifth Instalment shall be calculated as the difference between the
Interest Price less the Aggregate Value, and shall be transferred in OTI Shares in accordance with the provisions
of Section 2.4 above.

2.6 On December 15, 2000 (the "Sixth Instalment Date"), the Bank shall make a calculation to the effect that the
amount of the Aggregate Value and the value of the Fifth Instalment according to 20 trading days Closing Price
following the Fifth Instalment Date shall be added together (the "Final Value"). If the Final Value amounts to less
than DM 5 million, the amount of difference shall be transferred by the Bank to Manfred Weise in OTI Shares in
accordance with the provision of Section 2.4 above.

2.7 If the OTI Trust Shares are not transferred to the Escrow Account with the Bank on or before the First
Instalment Date, the First Instalment Date is moved to the business day following the date of transfer of the OTI
Trust Shares to the Bank, the other Instalment Dates and the Sixth Instalment Date are moved correspondingly.

2.8 If there are not enough OTI Shares in the Escrow Account with the Bank to transfer to the Shareholders for
the payment of the Interest Price the Bank shall inform OTI and the Shareholders immediately, no further action
of the Bank is required.

                                                        -3-
3. Confirmation of Receipt of the OTI Trust Shares

The Bank shall immediately after the irrevocable receipt of the OTI Trust Shares (without any right of recall of
OTI whatsoever except for OTI's right to the Remainder according to Section 4) confirm in writing to Manfred
Weise (on behalf of the Shareholders) and to OTI the irrevocable receipt of the OTI Trust Shares (without any
right of recall of OTI whatsoever except for OTI's right to the Remainder according to Section 4) (the
"Confirmation"). The Confirmation shall in substantially the form attached hereto as Exhibit A.

4. Remainder of OTI Trust Shares

The Bank keeps the remainder, if any, of the OTI Trust Shares in the Escrow Account once all transfers of OTI
Shares from the Escrow Account to the Shareholders have been carried out in accordance with Section 2 of this
Agreement and the Bank shall act with respect to such remainder in accordance with OTI's instructions without
any right of the Shareholders to such remainder.

5. Special Account

5.1 The Bank shall establish a special account (the "Special Account") in the name of Mr. Manfred Weise, which
Mr. Manfred Weise may only dispose of (verfugen uber) according to the following provisions or the prior
written consent of OTI.

5.2 The Bank shall deduct an amount equal to DM 800,000 in OTI Trust Shares (the "Secured Amount") from
the Fifth Instalment or, if the Fifth Instalment is not effected in the year 2000, the last Instalment effected in the
year 2000. Mr. Manfred Weise herewith instructs the Bank to sell these OTI Shares in portions of 1/20 of the
number of shares each trading day following the relevant Instalment Date.

5.3 Mr. Manfred Weise herewith irrevocably authorizes OTI to instruct the Bank to dispose of the Secured
Amount in favour of Mr. Wener Messmer's bank account, the bank account number of which shall be provided
by Mr. Manfred Weise, with the aim of paying the purchase price for the Messmer Option. In the event that OTI
does not instruct the Bank to dispose of the Secured Amount until 1 April, 2001, the Secured Amount shall be
released to Mr. Weise.

6. Costs

6.1 The Bank receives a fee of 2.25% of the Interest Price (the "Fee"). The entire remuneration and expenses of
the Bank shall be deemed to be covered by payment of the Fee. Thereby 1% of the Interest Price is attributed to
the remuneration and expenses for the transfer of the OTI Shares, 1.25% of this amount is attributed to the
escrow function of the Bank according to the terms and conditions of this Agreement. The Fee shall be due when
the First Instalment is effected in accordance with Sections 2.3, 2.4 of this Agreement.

                                                          -4-
6.2 The Fee incurred by the Bank shall be borne by OTI 50% and the Shareholders 50% equally.

7. Addresses

The Parties' addresses for the purpose of this Agreement are as set forth below, unless otherwise notified in
writing to all parties:

Shareholders:
Address: Manfred Weise, Eschenweg 8, D-78244 Gottmadingen Tel: ++49-7731-978615
Fax: ++49-7731-978606
Copy to Gleiss Lutz Hootz Hirsch:
Attention: Dr. Stephan Wilske
Address: MaybachstraBe 6, D-70469 Stuttgart Tel: ++49-711-89970
Fax: ++49-711-855096

                                                      OTI
                                  Address: Z.H.R. I.Z., Rosh Pina 12000, Israel

Tel: ++972-6-6938884
Fax: ++972-6-6938887
Copy to White & Case:
Attention: Thomas Schrell/Johannes Lubking/Torsten Koller Address: Bockenheimer LandstraBe 51-53, D-
60325 Frankfurt am Main Tel: ++49-69-713 770
Fax: ++49-69-713 77 100

8. Miscellaneous

8.1 Governing Law. This Agreement shall be governed by the laws of the Federal Republic of Germany without
regard to its conflict of law provisions.

8.2 Partial Invalidity. If one or more provisions of this Agreement should be or become wholly or partially invalid,
void or impracticable, the validity of the other provisions of this Agreement shall not be affected thereby. The
same shall apply if it should transpire that this Agreement contains a gap. In place of the invalid, void or
impracticable provision (or, as the case may be, in order to fill the gap) the parties to this Agreement shall agree
on an appropriate provision which comes as close as legally possible to what the parties were trying to achieve
with the invalid, void or impracticable provision (or, as the case may be, the invalid, void or impracticable part
thereof). In the event that a gap in this Agreement needs to be filled, a provision shall be agreed upon which, in
view of the purpose and intent of this Agreement, comes as close as possible to what the parties would have
agreed if they had been aware of the gap at the time that this Agreement was concluded.

                                                        -5-
8.3 Liability of the Bank. The Bank shall be liable only for the care it employs in its own affairs.

                                           /s/ Manfred Weise
                                           Manfred Weise

                                            /s/ Dennis Weise
                                            Dennis Weise

                                            /s/ Patrick Weise
                                            Patrick Weise

                                            On Track Innovations Ltd.
                                            ON TRACK INNOVATIONS LTD.




M.M. Warburg & Co KGaA

                                                          -6-
                                                EXHIBIT A

                                [Letterhead of M.M. Warburg & Co. KGaA]

Manfred Weise
Eschenweg 8
D-78244 Gottmadingen
Fax: ++49-7731-978606

On Track Innovations Ltd.
Z.H.R. I.Z.
Rosh Pina 12000
Israel
Fax: ++972-6-6938887

cc: Gleiss Lutz Hootz Hirsch
Attention: Dr. Stephan Wilske
Maybachstr 6
D-70469 Stuttgart
Fax: ++49-711-855096

White & Case
Attention: Thomas Schrell/Johannes Lubking/Torsten Koller Bockenheimer LandstraBe 51-53
D-60325 Frankfurt am Main
Fax: ++49-69-713 77 100

Confirmation of Receipt of the OTI Trust Shares

Gentlemen,

In accordance with Section 3 of the Escrow Agreement with respect to the Share Purchase Agreement of June
30, 2000 by and between Manfred Weise, Dennis Robert Weise, Patrick Norbert Weise (the "Shareholders"),
On Track Innovations Ltd. ("OTI") and M.M. Warburg & Co. KGaA ("Escrow Agreement") we hereby confirm
the irrevocable receipt of the OTI Trust Shares without any right of recall of OTI whatosever except for OTI's
right to the Remainder according to Section 4 of the Escrow Agreement with respect to the Share Purchase
Agreement.

Sincerely yours,

M.M. Warburg & Co. KGaA

                                                     -7-
                                           EXHIBIT 10.25

Escrow Agreement with respect to Option Agreements, dated as of June 15, 2000, by and among Manfred
Weise, Dennis Robert Weise, Patrick Norbert Weise, a civil partnership and the Registrant.
                                             Escrow Agreement

                                     with respect to the Option Agreements

between

                     Manfred Weise, Dennis Robert Weise, Patrick Norbert Weise
                                  (the "Shareholders" or the "Sellers")

and

                                         On Track Innovations Ltd.
                                                 ("OTI")

and

                                        M M Warburg & Co. KGaA
                                              (the "Bank")

                  (the Shareholders, OTI and the Bank hereinafter referred to as the "Parties")

Whereas: The Parties have entered into a Share Purchase Agreement (the "SPA"), dated June 15, 2000 pursuant
to which OTI has acquired 51% ownership of
(i) Intercard GmbH Kartensysteme, registered in the Commercial Register of the local court Villingen-
Schwenningen under No. HRB 603 and having its offices at Auf der Steig 6, 78052 Villingen-Schwenningen
("InterCard K"), and InterCard GmbH Systemelectronic, registered in the Commercial Register of the local court
Villingen-Schwenningen under No. HRB 532 and having its offices at MuhlenstraBe 2, 78073 Bad Durrheim
("InterCard S", collectively referred to in this Agreement as "InterCard" or the "Companies") from the
Shareholders, and,

Whereas: The Sellers own the remaining 49% ownership interest in InterCard (hereinafter the "Remaining" or
"Option Interest") or are entitled by way of call options granted by Mr. Werner Messmer to acquire the
Remaining Interest (the "Messmer Options").

Whereas: The Sellers and OTI have entered into a Put Option Agreement (the "Put Option") and a Call Option
Agreement (the "Call Option", collectively the "Options") pursuant to which the Sellers may sell the Remaining
Interests to OTI or OTI may acquire the Remaining Interests. The acceptance of the Put Option by the
Shareholders shall substantially be in the form of Exhibit A, the acceptance of the Call Option by OTI shall
substantially be in the form of Exhibit B, both as a notarial

                                                     deed,
Whereas: The Sellers and OTI have agreed in the SPA and the Options to pay the purchase prices for the Sold
Interest (as defined in the SPA) and the Option Interest by way of transferring ordinary shares of NIS 0.01 n.v.
each of OTI (hereinafter referred to as "OTI Shares") to the Shareholders and have agreed on a mechanism by
way of which the Bank is instructed to act as agent in relation to the transfer of the OTI Shares to the
Shareholders.

NOW, THEREFORE, the Parties agree as follows:

1. Escrow Account

1.1 The Bank shall establish an escrow account (the "Escrow Account") in the name of OTI to which OTI is
obliged and entitled to transfer OTI Shares as purchase price for the Sold Interest.

1.2 OTI shall irrevocably transfer to the Bank (without any right of recall except for OTI's right to the Remainder
according to Section 4 and free of any third party rights) OTI Shares in an aggregate value of DM 7,700,000
according to the official average closing price of an OTI Share in the Neuer Markt, traded in Frankfurt at the
Xetra system (such official average closing price hereinafter referred to as the "Closing Price"), in the 3
(three) trading days of May 29 to 31, 2000, which are admitted to trading at Deutsche Borse AG in the Neuer
Markt (the "OTI Trust Shares").

1.3 As long as any OTI Trust Shares are held in the Escrow Account with the Bank they shall be "frozen" (as
understood in accordance with the Israeli Companies Law), i.e. the OTI Trust Shares shall not have any of the
rights attached to an OTI Share under OTI's Articles of Association, in particular the right to vote and the right to
receive profits.

2. Option Price

2.1 As Option Price the Shareholders and OTI agreed on a total amount of DM 7,000,000 (the "Option Price")
or - with regard to the Call Option - on a reduced amount (the "Reduced Option Price"). The whole Option
Price is payable in OTI Shares. Mr. Manfred Weise is irrevocably authorized by the other Shareholders to
receive the entire Option Price. OTI irrevocably instructs by these presents the Bank to transfer the amount of the
OTI Trust Shares which is required to be transferred for the payment of the Option Price or the Reduced Option
Price, as the case may be, to the following account.

Manfred Weise, Baden-Wurttembergische Bank AG, account no. 6208275540, bank sort code 694 210 20,
S.W.I.F.T. BWBK DE 6S 694.

                                                        -2-
2.2 In the event that the Put Option or the Call Option is exercised, OTI irrevocably instructs by these presents
the Bank to transfer the amount of the OTI Trust Shares which is required to be transferred for the payment of
the Option Price or the Reduced Option Price, as the case may be, according to the following provisions. Proof
of the exercise of the Put or the Call Option shall be deemed to be given by presenting a certified copy of the
exercise of the Put Option or the Call Option to the Bank in the form of Exhibit A or B, as the case may be,
specifying the purchase price to be paid (the "Exercise").

2.3 The Bank shall pay the Option Price or the Reduced Option Price, as the case may be, from the Escrow
Account in 7 (seven) equal instalments (the "Option Instalments"), each totalling DM 1,000,000 (one million
Deutsche Mark) or an accordingly reduced amount in case of the Reduced Option Price. The Bank shall transfer
the Option Instalments in OTI Shares as follows:

2.3.1 The first Instalment (the "First Option Instalment") shall be paid on the first or the fifteenth day of the month
following the exercise of the Option, whichever day is earlier (the "First Option Instalment Date"),

2.3.2 The second Instalment (the "Second Option Instalment") shall be paid one month after the First Option
Instalment Date (the "Second Option Instalment Date"),

2.3.3 The third Instalment (the "Third Option Instalment") shall be paid two months after the First Option
Instalment Date (the "Third Option Instalment Date"),

2.3.4 The fourth Instalment (the "Fourth Option Instalment") shall be paid three months after the First Option
Instalment Date (the "Fourth Option Instalment Date"),

2.3.5 The fifth Instalment (the "Fifth Option Instalment") shall be paid four months after the First Option
Instalment (the "Fifth Option Instalment Date"),

2.3.6 The sixth Instalment (the "Sixth Option Instalment") shall be paid five months after the First Option
Instalment (the "Sixth Option Instalment Date"),

2.3.7 The seventh Instalment (the "Seventh Option Instalment") shall be paid six months after the First Option
Instalment (the "Seventh Option Instalment Date"), (and the First until the Sixth Option Instalments shall be
referred to collectively as the "First Option Instalments"; and the First until the Seventh Instalment Dates shall be
referred to collectively as the "Option Instalment Dates").

2.4 The Bank shall determine the number of OTI Trust Shares transferred to the Shareholders as payment of the
Option Price or the Reduced Option Price, as the case may be, for each of the Option Instalments in accordance
with the Closing Price of an OTI share in the 3 (three) trading days prior to the relevant Option Instalment Date.
In the event that these instalments as calculated above do not result in a whole number of OTI Shares, then these
shall be rounded up by the Bank accordingly.

                                                          -3-
2.5 Prior to the Seventh Instalment the Bank shall make a calculation of the aggregate Deutsche Mark value of
each of the First Option Instalments according to 20 (twenty) trading days Closing Price following the relevant
Instalment Date of each of them (the "Aggregate Option Value"). The Deutsche Mark amount of the Seventh
Instalment shall be calculated as the difference between the Option Price or the Reduced Option Price, as the
case may be, less the Aggregate Option Value, and shall be transferred in OTI Shares in accordance with the
provisions of Section 2.4 above.

2.6 Seven months after the First Option Instalment Date (the "Eighth Option Instalment Date"), the Bank shall
make a calculation to the effect that the amount of the Aggregate Option Value and the value of the Seventh
Instalment according to 20 trading days average market price following the Seventh Instalment Date shall be
added together (the "Final Option Value"). If the Final Option Value amounts to less than the Option Price or the
Reduced Option Price, as the case may be, the amount of difference shall be transferred by the Bank to Manfred
Weise in OTI Shares in accordance with the provisions of Section 2.4 above.

2.7 If there are not enough OTI Shares in the Escrow Account with the Bank to transfer to the Shareholders for
the payment of the Option Price the Bank shall inform OTI and the Shareholders immediately. No further action
of the bank is required.

3. Confirmation of Receipt of the OTI Trust Shares

The Bank shall immediately after the irrevocable receipt of the OTI Trust Shares (without any right of recall of
OTI whatsoever except for OTI's right to the Remainder according to Section 4) confirm in writing to Manfred
Weise (on behalf of the Shareholders) and to OTI the irrevocable receipt of the OTI Trust Shares (without any
right of recall of OTI whatsoever except for OTI's right to the Remainder according to Section 4) (the
"Confirmation"). The Confirmation shall in substantially the form attached hereto as Exhibit C.

4. Remainder of OTI Trust Shares

The Bank shall hold the remainder, if any, of the OTI Trust Shares in the Escrow Account

* once all transfers of the OTI Trust Shares from the Escrow Account to the Shareholders have been carried out
in accordance with Section 2 of this Agreement; or

* if the Bank has not received a notice of the exercise of the Option pursuant to Section 2.2 of this Agreement
until January 5, 2002,

and the Bank shall act with respect to such remainder in accordance with OTI's instructions without any right of
the Shareholders to such remainder.

                                                       -4-
5. Costs

5.1 The Bank receives a fee of 2.25% of the Option Price or the Reduced Option Price, as the case may be (the
"Fee"). The entire remuneration and expenses of the Bank shall be deemed to be covered by payment of the Fee.
Thereby 1% of the Interest Price is attributed to the remuneration and expenses for the transfer of the OTI
Shares, 1.25% of this amount is attributed to the escrow function of the Bank according to the terms and
conditions of this Agreement. The Fee shall be due when the First Instalment is effected in accordance with
Sections 2.3, 2.4 of this Agreement.

5.2 The Fee incurred by the Bank shall be borne by OTI 50% and the Shareholders 50% equally.

6. Addresses

The Parties' addresses for the purpose of this Agreement are as set forth below, unless otherwise notified in
writing to all parties:

Shareholders:
Address: Manfred Weise, Eschenweg 8, D-78244 Gottmadingen Tel: ++49-7731-978615
Fax: ++49-7731-978606
Copy to Gleiss Lutz Hootz Hirsch:
Attention: Dr. Stephan Wilske
Address: MaybachstraBe 6, D-70469 Stuttgart Tel: ++49-711-89970
Fax: ++49-711-855096

                                                     OTI
                                 Address: Z.H.R. I.Z., Rosh Pina 12000, Israel

Tel: ++972-6-6938884
Fax: ++972-6-6938887
Copy to White & Case:
Attention: Thomas Schrell/Johannes Lubking/Torsten Koller Address: Bockenheimer LandstraBe 51-53, D-
60325 Frankfurt am Main Tel: ++49-69-713 770
Fax: ++49-69-713 77 100

7. Miscellaneous

7.1 Governing Law. This Agreement shall be governed by the laws of the Federal Republic of Germany without
regard to its conflict of law provisions.

                                                       -5-
7.2 Partial Invalidity. If one or more provisions of this Agreement should be or become wholly or partially invalid,
void or impracticable, the validity of the other provisions of this Agreement shall not be affected thereby. The
same shall apply if it should transpire that this Agreement contains a gap. In place of the invalid, void or
impracticable provision (or, as the case may be, in order to fill the gap) the parties to this Agreement shall agree
on an appropriate provision which comes as close as legally possible to what the parties were trying to achieve
with the invalid, void or impracticable provision (or, as the case may be, the invalid, void or impracticable part
thereof). In the event that a gap in this Agreement needs to be filled, a provision shall be agreed upon which, in
view of the purpose and intent of this Agreement, comes as close as possible to what the parties would have
agreed if they had been aware of the gap at the time that this Agreement was concluded.

7.3 Liability of the Bank. The Bank shall be liable only for the care it employs in its own affairs.

                                           /s/ Manfred Weise
                                           Manfred Weise

                                            /s/ Dennis Weise
                                            Dennis Weise

                                            /s/ Patrick Weise
                                            Patrick Weise

                                            On Track Innovations Ltd.
                                            ON TRACK INNOVATIONS LTD.




M.M. Warburg & Co KGaA

                                                          -6-
                                                  EXHIBIT A

Acceptance of the Put Option

                                           EXERCISE OF OPTION

                                                       (1)

By way of notarial deed dated 15 June 2000 - Deed Roll No. 960/2000 of the notary public Dr. Rolf Jauch,
Stuttgart (hereinafter referred to as the Put Option Agreement) On Track Innovations Ltd., a public company
duly organized and existing under the laws of the State of Israel (Reg. No.: 52-004268-2), has offered to
Messrs. Manfred Weise, Dennis Robert Weise and Patrick Norbert Weise, both in their individual capacity and
as shareholders of the Civil Partnership, to purchase and acquire ownership interests in InterCard GmbH
Kartensysteme, a company registered with the Commercial Register of the Villingen-Schwenningen Local Court
under HRB 603 and InterCard GmbH Systemelectronic, a company registered with the Commercial Register of
the Villingen-Schwenningen Local Court under HRB 532 (both companies hereinafter referred to as InterCard).

                                    (hereinafter referred to as the Put Option)

With regard to the details of the Put Option, reference is made to the Put Option Agreement.

                                                       (2)

Now therefore, Messrs. Manfred Weise, Dennis Robert Weise and Patrick Norbert Weise, both in their
individual capacity and as shareholders of the Civil Partnership, declare the acceptance of the offer made under
the Put Option Agreement. The acceptance is made subject to the conditions of the Put Option Agreement.

                                                       -7-
                                                   EXHIBIT B

Acceptance of the Call Option

                                           EXERCISE OF OPTION

                                                        (1)

By way of notarial deed dated 15 June 2000 - Deed Roll No. 961/2000 of the notary public Dr. Rolf Jauch,
Stuttgart (hereinafter referred to as the Call Option Agreement) Messrs. Manfred Weise, Dennis Robert Weise
and Patrick Norbert Weise, both in their individual capacity and as shareholders of a civil partnership under the
German Civil Code (BGB), have offered to On Track Innovations Ltd, a public company duly organized and
existing under the laws of Israel (Reg. No.: 52-004268-2) (hereinafter referred to as OTI) to sell and transfer
ownership interests in InterCard GmbH Kartensysteme, a company registered with the Commercial Register of
the Villingen-Schwenningen Local Court under HRB 603 and InterCard GmbH Systemelectronic, a company
registered with the Commercial Register of the Villingen-Schwenningen Local Court under HRB 532 (both
companies hereinafter referred to as InterCard).

                                    (hereinafter referred to as the Call Option)

With regard to the details of the Call Option, reference is made to the Call Option Agreement.

                                                        (2)

Now therefore, OTI declares the acceptance of the offer made under the Call Option Agreement. The
acceptance is made subject to the conditions of the Call Option Agreement.

                                                        -8-
                                                 EXHIBIT C

                                 [Letterhead of M.M. Warburg & Co. KGaA]

Manfred Weise
Eschenweg 8
D-78244 Gottmadingen
Fax: ++49-7731-978606

On Track Innovations Ltd.
Z.H.R. I.Z.
Rosh Pina 12000
Israel
Fax: ++972-6-6938887

cc: Gleiss Lutz Hootz Hirsch
Attention: Dr. Stephan Wilske
Maybachstr 6
D-70469 Stuttgart
Fax: ++49-711-855096

White & Case
Attention: Thomas Schrell/Johannes Lubking/Torsten Koller Bockenheimer LandstraBe 51-53
D-60325 Frankfurt am Main
Fax: ++49-69-713 77 100

Confirmation of Receipt of the OTI Trust Shares

Gentlemen,

In accordance with Section 3 of the Escrow Agreement with respect to the Option Agreements of June 30, 2000
by and between Manfred Weise, Dennis Robert Weise, Patrick Norbert Weise (the "Shareholders"), On Track
Innovations Ltd. ("OTI") and M.M. Warburg & Co. KGaA ("Escrow Agreement") we hereby confirm the
irrevocable receipt of the OTI Trust Shares without any right of recall of OTI whatosever except for OTI's right
to the Remainder according to Section 4 of the Escrow Agreement with respect to the Option Agreements.

Sincerely yours,

M.M. Warburg & Co. KGaA

                                                      -9-
Exhibit 10.27

[ Letterhead of the Israel Land Administration ]

# File No.: 20652045A # Account No.: 352374102

LONG TERM LEASE CONTRACT

(low-rise building, industry, commerce or tourism)

# Capitalized

Entered into and signed in _______________ on the 27th of June, 1995 on the ____ of __________, ______

                                                     Between

# The Israel Land Administration, which manages the lands of the State of Israel, the Development Authority and
the Jewish National Fund (to be referred to hereinafter as the "Lessor"), whose address for the purpose of this
contract is: Government Campus, Upper Nazareth, zip code 17105,

                     P.O.B. 580 of the first part;

                                                          And

           #         On Track Innovations Ltd.                          I.D./Company No. 511456253

           #         (hereinafter:     the   "Lessee"),    whose   address for the purpose of this




contract is: P.O.B. 32, Rosh Pina, of the second part;

                                                     Preamble

constituting an integral part of the terms and conditions of the lease attached hereto, and which only together
constitute the lease contract.

#Whereas the State of Israel / the Development Authority owns the land

                     specified in this preamble below (hereinafter: the "Lot"); and

          Whereas    a building or buildings (hereinafter: the "Buildings") which were
                     erected prior to the effective date of this lease contract, are
                     constructed on the Lot; and

          Whereas    insofar as the Buildings have not been constructed to the stage
                     allowing the occupation thereof and/or full use thereof for the purpose
                     of the lease, the Lessee declares that it undertakes to complete the
                     construction of the Buildings so as to render them fit for such
                     intended use, no later than one year after the Administration's signing
                     of this contract, and that it is aware that this undertaking
                     constitutes a fundamental condition of this contract; and
                                                         2

          Whereas    the Lessor has agreed to lease the Lot to the Lessee, including all
                     that is constructed thereon and permanently fixed thereto (hereinafter:
                     the "Fixtures") (the Lot and Fixtures shall be referred to hereinafter
                     as the "Leased Premises"), with the condition-precedent that the
                     Lessee's undertakings - either under a development contract with the
                     Lessor or under another agreement with the Lessor - shall have been
                     fulfilled in full in the period preceding the effective date of this
                     lease contract; and

          Whereas    the parties agree that for the sake of convenience only, the Lessee
                     shall sign a copy of this lease contract without such signature binding
                     the Lessor, pending the Lessee's fulfillment of the aforementioned
                     undertakings in full. The parties hereby explicitly agree that the
                     lease contract shall become effective only after the Lessor shall also
                     sign the same, and only if the Lessee shall have fulfilled its
                     foregoing undertakings to the Lessor. So long as the Lessor shall not
                     have signed the lease contract, the terms hereof shall not be binding
                     upon the parties, and the Lessee's signature alone on the lease
                     contract shall confer thereon no right hereunder. The date on which the
                     Lessor shall sign the lease contract shall be deemed as the date of
                     signing hereof; and

          Whereas    upon commencement of the lease period, the Administration surrendered
                     the possession of the Leased Premises to the Lessee or to the persons
                     who had lease rights in the Leased Premises before the Lessee, and
                     insofar as the Leased Premises are occupied, the Lessor is subject to
                     no obligation to vacate them and/or to bear the costs of such vacation;
                     and

          Whereas    the Lessee hereby declares that it is subject to no limitation with
                     respect to its entering into this contract with the Lessor pursuant to
                     the provisions of Section 19(a)(3) hereof, and that it is aware that
                     the Lessor is prepared to enter into this lease contract therewith only
                     upon this fundamental condition precedent; and




#Whereas pursuant to the provisions of the treaty between the State of Israel and the Jewish National Fund
(hereinafter: the "Fund"), published in Official Gazette No. 1456 of Sivan 11, 5728, p. 1597, the management of
land owned by the Fund, including the leasing thereof and the granting or denial of consent for the transfer of the
lease rights therein, shall be performed by the Lessor subject to the Fund's memorandum and articles of
incorporation, and the Lessee hereby declares that it is aware that if the Lot, in whole or in part, is owned by the
Fund, or will be owned by the Fund, it shall be subject to the provisions of the said treaty, and that the Lessor is
prepared to enter into this lease contract therewith only upon this fundamental condition precedent; and
                                        3

Whereas         if the purpose of the lease is industry, crafts or tourism then,
                in addition to the following terms and conditions of the lease,
                the lease under this contract shall also be subject to the
                following terms in this preamble:

                   (a)     if the purpose of the lease is industry or crafts,
                           and the Lessee shall ask the Lessor for its consent
                           to change the type of industry or crafts set forth in
                           the Purpose of the Lease, the Lessor shall be
                           entitled to condition its consent therefor, inter
                           alia, on a change in the duration of the term of the
                           lease in accordance with the Lessor's decisions as
                           being from time to time, and on the receipt of a
                           recommendation from the Ministry of Industry and
                           Trade for the requested change in the type of
                           industry or craft and for the duration of the term of
                           the lease recommended thereby for such purpose.

                   (b)     if the purpose of the lease is industry, crafts or
                           tourism, then, in addition and subject to all the
                           other terms and conditions in the followings Sections
                           9 and 14, the Lessee shall be required to attach to
                           its request to make any of the changes set forth in
                           Section 9 or to transfer rights under this contract
                           as set forth in Section 14, as the case may be, a
                           suitable and valid recommendation from the Ministry
                           of Industry and Trade or the Ministry of Tourism, as
                           the case may be. The Lessor shall not consent to any
                           such request by the Lessee unless the Lessee shall
                           produce such valid recommendation.

                   (c)     The "Ministry of Industry and Trade", the "Ministry
                           of Tourism" - including any other governmental
                           ministry responsible for matters of the type of the
                           Purpose of the Lease; and all in accordance with the
                           decisions of the Israel Land Council or the decisions
                           of the Lessor, and as required from time to time as
                           the case may be. And;

Whereas   the terms used in this contract shall be interpreted in accordance with
          the following recitals, unless the context of the contract prescribes
          otherwise:

"Lot": the lot described in the plan attached hereto as an integral part of this
contract, the details of which are as follows:

#         Location: Rosh Pina Area: approximately 2,377 m2

#         Registered block: 13953 Parcels: 63 (in part), 64 (in part), 65 (in
          part), 66 (in part), 68 (in part), 73 (in part)

#         Lot(s) No. 17/2 pursuant to Detailed Zoning Plan No. 2297
                                       4

#       "Term of the Lease": 49 years, from the Date of Approval of the
        Transaction, i.e., from November 17, 1992 until November 16, 2041.

        "Date of Approval of the Transaction": the date on which the
        transaction contemplated in this contract is approved by the Lessor's
        management.

#       "Purpose of the Lease": electronics plant.

#       "Construction Capacity": ___ % per floor, on __ floors, totaling ___%,
        constituting ___ rooms/units and amounting to 1,188.0 constructed m2.

       "Rent":

        #         Annual rent for the entire Term of the Lease, to be paid to
                  the Lessor in advance, such rent being capitalized according
                  to the Lessor's custom (hereinafter: "Capitalized Rent").

        #         The capitalized usage fee deposited with the Lessor prior to
                  the signing of this lease contract, if any, shall be deemed as
                  payment of the Capitalized Rent.

        #         "Basic Value of the Lot": NIS 6,983.78 (six thousand nine
                  hundred eighty three NIS + 78 Ag.) as of the foregoing Date of
                  Approval of the Transaction.

                  "Basic Index": the latest consumer price index known on the
                  foregoing Date of Approval of the Transaction.

        #         "Designation": industrial zone. And;

        Whereas   if the Lessee comprises more than one person or corporation,
                  the undertakings of the persons or corporations constituting
                  the Lessee shall be joint and several, whereas their rights
                  under this contract shall be joint only; and

        Whereas   in addition to the following terms and conditions of the lease
                  contract, the following special conditions shall apply:

        Therefore, this lease contract has been entered into and signed in
        accordance with the provisions of this preamble and of the following
        terms and conditions of the lease:

Parties' signature     The Administration                     The Lessee
in initials:     [Stamp of the Administration and       [ Signature and stamp of
               stamp and signature of Maisbuz Sarah,   On Track Innovations Ltd.]
                    Deputy District Transaction
                  Commissioner, Northern District ]
[ Letterhead of the Israel Land Administration ]

                                         Terms and Conditions of Lease

1. The preamble and documents attached to the contract The preamble and the documents attached to this
contract constitute an integral part hereof.

2. Undertaking to lease The Lessor hereby undertakes to lease the Leased Premises to the Lessee and the
Lessee hereby undertakes to lease the Leased Premises from the Lessor. The parties have agreed that pending
registration of the lease in the Land Registration Bureau, the Lessor has granted the Lessee a right to use the
Leased Premises, and all of the provisions of this contract with respect to the lease and the terms and conditions
thereof shall apply, mutatis mutandis, to the said right of use, and a usage fee shall be paid at the rate of the Rent
set forth hereunder.

3. The Term of the Lease The Term of the Lease is as set out in the preamble to the contract.

4. Purpose and designation of the lease The Leased Premises are leased to the Lessee only for the purpose and
designation set out in the preamble to the contract, and the Lessee may not use the Leased Premises or any part
thereof for any other purpose or designation without the Lessor's prior, written and explicit consent.

5. Construction Percentage The permissible Construction Percentage under this contract is as set out in the
preamble to the contract.

6. Receipt of possession of the Leased Premises The Lessee confirms that it has received possession of the
Leased Premises on the date and under the terms and conditions set out for this purpose in the preamble to the
contract.

7. Rent The Lessee undertakes to pay the Lessor Rent in accordance with the provisions specified for this matter
in the permeable to the contract.

8. New assessment
(a) Subject to the provisions of the following subsection (b), the Lessor shall be entitled to charge the annual Rent
based on a new assessment of the Lot by the Governmental Assessor, without taking into account any rise in the
value of the Lot as a result of the development thereof by the Lessee or at its expense, in each of the following
cases:

Initials: R.G., O.B.
[ Letterhead of the Israel Land Administration ]

                                                         -2-

(1) When the Lessee shall request the Lessor's consent to transfer its rights under this contract, as set forth in
Section 14 hereunder.

(2) If the Lessor shall agree to the Lessee's request to make any of the changes set forth in Section 9 hereunder.

(b) In the event that the Lessee shall have paid Capitalized Rent as defined in the preamble to this contract, prior
to the date of rendering of the Lessor's consent to any of the requests mentioned in subsection (a) above, the
annual Rent shall not be raised as set out in this section.

(c) In any case in which the Lessor shall raise the annual Rent as set out above, it shall notify the Lessee thereof
by registered mail. The Lessee shall be entitled to appeal from such notice by the Lessor within 30 days thereafter
before the Governmental Assessor, whose decision shall be final.

(d) The annual Rent, increased on the basis of the new assessment, shall be paid by the Lessee to the Lessor
from the date of the Lessor's said consent, within 15 days from the date of the Lessor's notice. The said
increased annual Rent shall be subject to the provisions set out in the preamble to the contract with respect to
annual Rent, mutatis mutandis.

9. Change of designation, change of Construction Percentage, additional construction, parceling
(a) The Lessee undertakes to request the Lessor's prior written approval for the performance of any of the
following changes:

(1) Any change of designation or realization of a change of designation of the Lot - from the designation defined
in the preamble to another designation.

(2) Any increase in the Construction Percentage fixed in the preamble or any additional construction beyond such
Construction Percentage fixed in the preamble, including any additional construction on the Lot or any change in
the Buildings or additions erected thereon or in the additional buildings or any addition thereto.

(3) Any parceling of the Lot into several lots, in a manner rendering each one an independent lot capable of being
used individually. The Lessee shall attach to its request plans and documents relating to the change requested
thereby.

(b) The Lessee shall not make the change requested thereby prior to receiving the Lessor's advance written
consent thereto, and shall not apply for the competent authorities' approval of the change prior to receiving the
Lessor's consent thereto. In the event that the Lessor's consent shall have been given, the Lessee shall not make
the change without the approval of the competent planning authorities.

Initials: R.G., O.B.
[ Letterhead of the Israel Land Administration ]

                                                         -3-

(c) The Lessor shall be entitled to deny its consent to the change requested by the Lessee, or to condition its
consent upon the payment of money due to the change in the value of the Lot as a result of the performance of
the said change, as the Governmental Assessor shall determine, or according to the Lessor's custom at the time
being, and upon such other customary conditions of the Lessor.

10. Registration of the lease

(a) The registration of the right of lease in the Lessee's name in accordance with the terms and conditions of this
contract, and all acts required therefor, shall be performed by the Lessee and at its expense. If need be, the
Lessor shall sign the documents required in order to register the right of lease as aforesaid, provided that the
Lessee shall have fulfilled the terms hereof and subject thereto.

(b) The Lessee shall prepare, inter alia, the documents and maps required for such registration, including for the
purpose of registering and/or renewing the registration of the Lot, division, separation, surveying costs and
parceling maps, as well as the files at the Land Registration Bureau, and shall bear all payments and costs related
to such registration, including fees and stamp duty, without exception.

(c) The Lessee undertakes to prepare and complete all the acts required for the registration of the Leased
Premises as a condominium (or condominiums) according to the Land Act, 5729-1969, insofar as such acts shall
not have been completed prior to the signing of this contract, and to this end to perform any act required therefor,
including the preparation of drafts, registration orders, bylaws, etc., as needed. The Administration shall be
entitled to notify the Lessee, in advance and in writing, that the Administration intends to perform the said acts, in
whole or in part, by itself and at the Lessee's expense, and the Lessee undertakes to pay the Administration any
expense incurred by the Administration in the performance of the said acts, according to a statement to be
submitted thereto, within 30 days from the date of submittal of the statement.

(d) The Lessee undertakes to provide the Lessor with confirmations for the payment of all taxes, municipal taxes,
levies, fees and mandatory payments payable for the Leased Premises, and any document required for the
purpose of registering the lease as aforesaid.

Initials: R.G., O.B.
[ Letterhead of the Israel Land Administration ]

                                                         -4-

(e) In the event that the Lessee, despite the aforesaid and despite the Lessor's demand, shall fail the register the
lease, the Lessor may perform all the registration acts listed above at the Lessee's expense, and the Lessee
undertakes to pay the Lessor all such expenses according to a statement to be submitted thereto, within 30 days
from the date of demand.

11. Change of boundaries of the Lot and final determination of area
(a) The Lessee declares that it is aware that the area and boundaries of the Lot are not final and that changes may
occur therein as a result of planning changes pursuant to the Building and Planning Act, 5725-1965, land
settlement registration, etc.

(b) The Lessee declares that it is aware that a survey for purposes of registration may reveal that the area of the
Lot is smaller or larger than the area used to determine the Basic Value of the Lot.

(c) In the event that the area of the Lot shall be increased or decreased and/or the boundaries thereof changed as
a result of changes as set out in subsection (a) above, and should it transpire that the area of the Lot is smaller or
larger than the area used to determine the Basic Value of the Lot, as set out in subsection (b) above, the Lessee
undertakes:

(1) To agree to any change in the boundaries and/or area of the Lot, resulting from the changes mentioned in
subsection (a) above;

(2) To agree to any determination with respect to the area of the Lot, as determined pursuant to a survey for
purposes of registration as mentioned in subsection (b) above;

(3) To deem the Lot - with its new boundaries and area - as the object of the lease, and to take possession
thereof.

(d) If the value of the Lot shall change due to changes as set out in subsections (a) and/or (b) above, the Rent
shall be amended based on the final area according to the assessment of the Governmental Assessor as of the
date of determination of the Basic Value of the Lot, and both parties undertake to pay the other party only the
differences resulting from such amendment, in addition to differences of indexation from the date of determination
of the Basic Value of the Lot until the actual payment of such differences.

12. Use of the Leased Premises and the Lessee's responsibility The Lessee undertakes to maintain the Leased
Premises in a good and proper condition as an owner who cares for his property, and to perform, at its expense,
any and all repairs required in order to preserve it in such condition.

Initials: R.G., O.B.
[ Letterhead of the Israel Land Administration ]

                                                           -5-

Throughout the Term of the Lease, the Lessee alone shall be responsible for the compliance with the provisions
of any and all laws pertaining to the occupation and use of the Leased Premises and to construction on the Lot,
and for fulfilling any obligation under any and all laws, presently or in the future to be imposed on the Lessor with
respect to the Leased Premises - and all at its expense, without any right to demand any reimbursement from the
Lessor. The Lessee alone shall be liable to the Lessor and to any third party for any damage caused to the body
or property of any person (including the Lessee), and for damages imposed due to or as a result of acts and/or
omissions performed at the Leased Premises or in connection with the occupation and use thereof, and the
Lessor shall have no liability in connection therewith.

13. Taxes and mandatory payments From the beginning of the Term of the Lease or the date of receipt of
possession of the Leased Premises - whichever is the earlier - the Lessee alone shall bear all taxes, municipal
taxes, loans and various mandatory payments, both municipal and governmental - including betterment levy -
imposed on owners and/or occupants in connection with the Leased Premises, and all fees and development
expenses of any kind, presently or in the future to be imposed with respect to the Leased Premises - including the
costs for the connection of electricity, water and sewage fees, water supply arrangements, sewage installation,
conduits, paving of roads and sidewalks, sanitary facilities and operations, etc.

The Lessee undertakes to lawfully pay value added tax on each and every payment imposed on the Lessee under
this contract, in accordance with the rate of value added tax on the date of payment thereof.

14. Transfer of rights

(a) Transfer of rights subject to consent The Lessee may not transfer rights under this contract without the
Lessor's prior written consent. In this section - "transfer of rights" - any of the following, either for or without
consideration, in whole or in part, and in any form:

(1) Any award, transfer, endorsement or waiver of rights under this contract;

(2) Any long term sublease of the Leased Premises or long term leasing of the lease at any level, any sublease of
the Leased Premises or lease of the long or short term lease at any level - and all for such period of time lawfully
requiring the registration of the lease in a register maintained by law, including a lease protected under the Tenants
Protection Act [Consolidated Version] 5732-1972, or any act replacing it (hereinafter: "Sublease");

Initials: R.G., O.B.
[ Letterhead of the Israel Land Administration ]

                                                        -6-

(3) Any surrender of possession or use of the Leased Premises for the period of time set out in paragraph (2)
above (hereinafter:"Surrender of Possession");

(4) With respect to a Lessee which is an association - any act in the Lessee's association resulting in the transfer
or allotment of at least 10% of the par value of the Lessee's paid up capital stock or issued capital stock -
whichever is lower - (hereinafter: "Capital Rights"), or 10% of the Lessee's voting power (hereinafter: "Voting
Rights"), or 10% of the right to appoint the Lessee's directors (hereinafter: "Appointment Rights"). Acts in the
Lessee's association, in each of which less than 10% of the foregoing rights are transferred, that are performed
within a period of two years, shall be deemed, for purposes of this section, as having been performed at once on
the date of the last act in the association. In this Section 14 -

"Association" - as defined from time to time in

                                                          the Land Appreciation Tax Act, 5723-1963
                                                          (hereinafter: "L.A.T. Act"), including a
                                                          non-registered corporation and a
                                                          non-registered partnership.

                                       "Act in an
                                       association"     - as defined from time to time in the
                                                          L.A.T. Act, including an act in an
                                                          association holding rights in the
                                                          Lessee's association, and including any
                                                          change in a registered or non-registered
                                                          partnership, resulting from the joining
                                                          or a person thereto or the retirement of
                                                          a person therefrom, or any change in an
                                                          association whose capital is in a form
                                                          other than stock, resulting from such
                                                          joining or retirement, and including any
                                                          change in the proportionate share of a
                                                          partner in the capital of such
                                                          partnership or association.


                                       "Right in an
                                       association"     - as defined from time to time in the
                                                          L.A.T. Act.

                                       "Holder",
                                       "Holding"        - as "Holding" is defined from time to
                                                          time in the Securities Act, 5728-1968;
                                                          the terms used in the definition of
                                                          "Holding" in the said act shall be
                                                          interpreted as they are defined from
                                                          time to time in the said act.
          Initials: R.G., O.B.
[ Letterhead of the Israel Land Administration ]

                                                          -7-

(5) Any pledge and/or encumbrance of the Leased Premises and/or rights under this contract. The Lessor shall
not consent to any such pledge or encumbrance, unless the Lessee and the mortgagee or pledgee shall undertake
thereto, prior to the granting of consent, that in any event of foreclosure of the pledge, mortgage or encumbrance
or as a result of the execution of a judgment or another document exercisable as a judgment or as a result of a
sale by the Execution Office or by another authority pursuant to the law - the Lessor shall be paid the consent fee
due under this contract; provided, however, that the Lessor's consent to the actual pledge or encumbrance shall
not be conditioned upon any payment.

Any transfer of rights as aforesaid without the Lessor's consent or without payment of the said consent fee shall
be deemed as a fundamental breach of this contract, and the Lessor shall be entitled to revoke the contract due
to such breach.

(6) Any other act, not mentioned above, by which rights under this contract are in fact transferred, either for or
without consideration, in whole or in part, and in any form.

(b) Conditions to consent
(1) The Lessor may condition its consent to the transfer of rights under this contract upon the following
conditions, in addition to all other conditions upon which the Lessor may condition such consent - under this
contract, the decisions of the Israel Land Council or any and all laws:

(a) The Lessee shall have fulfilled all of the terms and conditions of this lease contract.

(b) The Lessee and the transferee shall sign such documents and shall produce all such documents as the Lessor
shall demand in connection with the transfer, and shall fulfill any condition set forth in this contract with respect to
the rendering of the consent, including the transferee's undertaking to fulfill all the terms and conditions stipulated
herein.

(2) In the event that the Lessee shall have enjoyed any exemption or discount, either partial or full, from the
payment of Rent, or if the Lessee shall have paid a reduced Rent, and each or any of the aforesaid shall have
been conditioned upon certain conditions fixed for this purpose, then the Lessor's consent to the transfer of the
rights shall be conditioned upon the fulfillment of the terms fixed for such exemption, discount or reduced payment
and upon the fulfillment of anything entailed thereby.

Initials: R.G., O.B.
[ Letterhead of the Israel Land Administration ]

                                                            -8-

(3) The Lessor's consent to any Sublease or Surrender of Possession - if any shall be given - shall neither release
the Lessee nor exempt it from any obligation imposed thereon under this contract, and the Lessee and such
recipient of rights shall be jointly and severally liable for the fulfillment of all of the Lessee's obligations under this
contract.

(4) The Lessor shall be entitled to require the Lessee and the proposed recipient of the rights (hereinafter:
"Recipient"), to provide details and declarations with respect to each of the following:

(a) The nature of the transferred rights and the date on which the Lessee and the Recipient wish to execute such
transfer of rights;

(b) The Recipient's name, address and I.D. number;

(c) In the event that the Recipient is a corporation

(1) Its name, address, number at the Registrar of Companies, the names of the stockholders and the share in the
capital stock and voting and appointment powers held by each one of them, and the directors' names.

(2) Details as set out in paragraph (b) above with respect to each stockholder and director of the corporation.

(3) If a stockholder or a director of the Recipient corporation is a corporation - details with respect to this
corporation as set out in this paragraph (c) above and details with respect to each stockholder and director of
this corporation, as set out in paragraph (b) above.

(d) The amount which the Recipient shall pay the Lessee for the rights.

The Lessor may demand further information and documents with respect to the Recipient from the Lessee and
the Recipient.

(c) Denial of consent in certain cases The Lessor may deny altogether its consent to a transfer of rights to a
foreign citizen, as defined in Section 19(a)(3) hereunder, or to anyone not meeting a fundamental condition
precedent set out in the preamble to this contract.

Initials: R.G., O.B.
[ Letterhead of the Israel Land Administration ]

                                                        -9-

(d) Consent fee Without derogating from all other provisions of this Section 14, and subject to the provisions of
the following subsection (e), the Lessor may condition its consent to the transfer of rights upon the payment of a
consent fee. Pending any decision otherwise by the Israel Land Council, the following provisions shall apply in
this matter:

(1) In the cases specified in subsections (a)(1), (a)(5) and
(a)(6) above, the consent fee shall be one third of the difference between the value of the lot at the time of
rendering of the Lessor's consent to the transfer of the rights and the value thereof when the Lessee shall have
acquired the right of lease, at the condition thereof at the time of receipt of the Lot, without taking into account
any expenses and development work performed with respect thereto, according to the estimate of the
Governmental Assessor (hereinafter: "Consent Fee"), after deduction of a proportionate share of the value of the
Lot as set out in the preamble hereto;

(2) In the cases specified in subsection (a)(4) above, the Consent Fee shall be calculated as set out in paragraph
(1) above, and the amount to be paid shall be determined in accordance with the ratio of the transferred Capital
Rights and/or Voting Rights and/or Appointment Rights to the total rights of such class in the Lessee's association;
provided, however, that in the case of transfer of control, the Consent Fee shall be paid in full;

In this paragraph, "control": the direct or indirect holding by a person or an association of 50% or more of the par
value of the Lessee's paid-up capital stock or issued capital stock - whichever is lower - or one half or more of
the Lessee's voting power, or the right to appoint one half or more of the Lessee's directors.

(3) In the cases specified in subsections (a)(2) and (a)(3) above, the rate of the Consent Fee shall be as the
Lessor shall determine from time to time for such cases.

(e) Transfer of rights without a Consent Fee The Lessor shall not condition its consent to the transfer of rights
upon a monetary payment if the Lessee shall have paid the Lessor, prior to the date of rendering of the consent,
Capitalized Rent as defined in the preamble, and all other payments owed to the Lessor under this contract and
any law, and shall have paid all taxes, municipal taxes, levies and other payments owed thereby under this
contract and any and all laws for the period prior to the date of rendering of consent.

Initials: R.G., O.B.
[ Letterhead of the Israel Land Administration ]

                                                        -10-

(f) Acquisition of rights by the Lessor In the event that the Lessee shall wish to transfer rights as defined in
subsections (a)(1),
(a)(5) or (a)(6) above, the Lessor shall be entitled, but not obliged, within thirty days from the date of receipt of
the details set out in subsection (b)(4) above - and if the Lessor shall have demanded additional information and
documents as set out above, within thirty days from the date of the demand - to send the Lessee notice by
registered post whereby it intends to reclaim the possession of and full rights to the Leased Premises, and agrees
to pay the Lessee the amount offered thereto by the Recipient. In the event that the Lessor shall have given such
notice - the Lessee shall not be allowed to transfer its rights to the Leased Premises, but to the Lessor. The
Lessor shall not exercise its right to repossess any Leased Premises as set out in this subsection above in cases
where the Recipient is a spouse, offspring, parent, sibling or heir of the Lessee. The Lessor may register a note at
the Land Registration Bureau with respect to its said right.

(g) Fundamental breach

The breach of any of the provisions of this Section 14 shall be deemed as a fundamental breach of this contract,
and the Lessor shall be entitled to revoke the contract due to such breach.

15. Natural resources, archeological finds, materials and trees The Lessee hereby declares that it is aware that all
natural resources such as:
oil, gas, water springs, coal and metal deposits, marble, stone, sand and limestone quarries, and any other
minerals as well as archeological finds and sites, materials and trees found in the ground of the Leased Premises
are the property of the Lessor and/or the State, are not included in the Leased Premises and the terms of the
lease under this contract do not apply thereto. The Lessee shall enable the Lessor to extract or otherwise utilize
the said natural resources, archeological finds, materials and trees in accordance with the relevant laws and this
contract. The Lessee shall not excavate the Lot over and above the degree necessary for the achievement of the
Purpose of the Lease. The Lessee may not sell materials or trees removed thereby from the Lot, since they are
the property of the Lessor and/or the State, without the written consent of the Lessor, who may condition such
consent upon payment for the materials or trees.

16. Observance of the Sabbath and Jewish holidays The Lessee and any assignee thereof shall refrain from
performing any construction work and labor at the Leased Premises on the Sabbath and on Jewish holidays.

In this section -

Initials: R.G., O.B.
[ Letterhead of the Israel Land Administration ]

                                                         -11-

               "Labor"               - the management of a business and any manual labor
                                     customarily performed by the Lessee or by others for
                                     consideration and in public.

               "Construction"        - any construction-related work, which is performed by
                                     the Lessee or by others for consideration and in
                                     public.




The prohibition in this section shall not apply if the Lessee shall have received permission from a competent
authority under any law to perform construction work and labor, and so long as such permission is in effect.

17. Transfer of contractual rights by the Lessor The Lessor shall be entitled to transfer the rights thereof under
this contract, without the Lessee's consent thereto, and in the case of such transfer, the Lessee undertakes to fulfill
all of its undertakings under the contract to the transferee.

18. Right of entry to the Leased Premises In addition to the provisions of any law, the Lessor or any person
acting on its behalf or pursuant to its permission, shall be entitled to enter the Leased Premises at any reasonable
time in order to inspect the use made of the Leased Premises pursuant to the provisions of this contract, and in
order to install water pipes, conduits, sewage and gas pipes, electricity or telephone poles, and to lead electricity
or telephone lines through, in or above the Leased Premises and/or for other purposes, etc. The Lessee shall
allow the Lessor, and any person acting on its behalf or pursuant to its permission, to enter the Leased Premises
in order to perform the said inspections and works. The Lessor undertakes to compensate the Lessee for any
damage caused to the Lessee due to the performance of such inspections and works.

19. Remedies for breach of contract Without derogating from any other remedy pursuant to any and all laws or
this contract, due to breach of contract, the parties hereby agree that each of the defaults specified in subsection
(a) hereunder shall be deemed a fundamental breach of the contract, for which the Lessor shall be entitled to
revoke the contract by dispatching notice to such effect by a registered letter:

(a) (1) The breach of any of the provisions of Sections 9 and 14

(2) The Lessee, without the Lessor's prior written consent, shall change or bring about a change in the Purpose of
the Lease or the designation thereof, or shall make any use of the Leased Premises inconsistent therewith.

Initials: R.G., O.B.
[ Letterhead of the Israel Land Administration ]

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(3) The Lessee or whomever the Lessee is acting for is a foreign citizen. In this paragraph, "foreign citizen" -
anyone who is not one of the following:

(a) An Israeli citizen;
(b) A new immigrant under the Law of Return, 5710-1950, who has not given a declaration pursuant to Section
2 of the Citizenship Act, 5712-1952;

(c) A person entitled to a new immigrant visa or a new immigrant certificate under the Law of Return, 5710-
1950, who has received, in lieu thereof, a visa and license for temporary residence as a potential new immigrant
pursuant to the Entry to Israel Act, 5712-1952;

(d) A corporation controlled by an individual who fulfills the criteria listed in paragraphs (a)-(c) above, or by
more than one such individual.

In this paragraph, "control" shall mean the direct or indirect holding by one person or corporation or by more than
one person or corporation of 50% or more of the par value of the corporation's issued capital stock or one half
or more of the corporation's voting power, or the right to directly or indirectly appoint one half or more of the
corporation's directors.

Paragraph (3) above shall not apply if the Lessee shall have received approval therefor, in advance and in writing,
from the Chairman of the Israel Land Council.

(4) The breach of any of the fundamental conditions precedent set out in the preamble to this contract.

(b) Upon revocation of the contract by the Lessor, the Lessee shall be obligated to:

(1) Immediately vacate the Leased Premises;

(2) Surrender the same to the Lessor immediately, the Leased Premises being vacant of any person and object
and free of any encumbrance, attachment or any third party right.

(3) Immediately take all measures necessary in order to cancel the registration of the lease performed pursuant to
Section 10, including payment of all fees, taxes and other expenses entailed thereby without exception, and to
sign an irrevocable notarized power of attorney in the Lessor's name in order to ensure the fulfillment of this
undertaking, either upon the signing of this contract or at any other time, at the Lessor's choice and upon its first
demand.

In the event that the Lessee shall have failed to discharge its obligations under this paragraph, the Lessor shall be
entitled to perform all such acts alone, at the Lessee's expense, and to collect any expenses paid thereby from the
Lessee, in addition to interest and indexation as set out in Section 22 hereunder, from the date of expenditure until
the date of actual payment.

Initials: R.G., O.B.
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                                                        -13-

(4) Without derogating from the provisions of Section 20 hereunder, pay the Lessor any damages and losses
caused or to be caused thereto due to the breach and revocation of the contract (including damages and losses
due to the lease of the property to another).

(c) (1) In the event of revocation of the contract by the Lessor, except for cases of revocation due to the default
set out in paragraph (a)(3) above, and after the Lessee shall have fulfilled its obligations as set out in subsection
(b) above, the Lessor shall offer the Leased Premises in a tender and shall pay the Lessee the proportionate
share of the Lessee's rights to the Lot and for the Fixtures as the Governmental Assessor shall determine
(hereinafter:
"Refund"); provided, however, that if amounts lower than the Refund shall have been received in the tender, the
Lessor shall pay the Lessee only the amounts received in the tender.

(2) In the event that the Lessor shall not have offered the Leased Premises in a tender as aforesaid within 3
months from the date on which the Lessee shall have fulfilled its obligations under subsection (b) above, it shall
pay the Refund to the Lessee at the end of such 3 month period.

(3) Payment of the Refund shall be made after deduction of any and all amounts due to the Lessor from the
Lessee under this contract, and after deduction of an amount equal to the Consent Fee which the Lessee would
have owed the Lessor under Section 14, if the Lessee's rights shall have been transferred to another with the
Lessor's consent.

(4) In the event that the Leased Premises shall have been offered in a tender, and no offers conforming to the
terms and conditions of the tender shall have been received, the Lessor shall offer the Leased Premises in a
repeat tender within 4 months from the date for receipt of offers under the previous tender; this procedure shall
be repeated periodically until offers conforming to the terms of the tender shall be received.

(d) Without derogating from the aforesaid, if the Lessee shall have breached any provision of Section 9 above,
the Lessor shall be entitled to take any of the following measures, at the sole discretion thereof:

(1) Cause the cancellation of the change made by the Lessee without the Lessor's consent and/or demolish
anything built on the Lot without the Lessor's consent, immediately after the Lessor shall learn of the breach, and
without requiring the Lessee's consent thereto. The Lessor shall not be required to remove the debris from the
Leased Premises.

(2) Charge the Lessee with payment of the Lessor's customary usage fee and/or full payment for the change in the
value of the Lot as a result of the performance of any changes made by the Lessee, as determined by the
Governmental Assessor. Initials: R.G., O.B.
[ Letterhead of the Israel Land Administration ]

                                                       -14-

(e) The foregoing provisions of subsections (b) and (c) of this section shall apply, mutatis mutandis, also upon
termination of the contract upon expiration of the Term of the Lease or upon expiration of the Additional Term of
Lease, as the case may be, if the Term of the Lease or the Additional Term of Lease are not extended.

20. Liquidated damages

(a) In the event of revocation of the contract, the Lessor shall be entitled to deduct liquidated damages from the
amounts owed thereby to the Lessee due to the revocation, at the rate of 15% of the Basic Value of the Lot, as
defined in the preamble, in addition to differences of indexation between the Basic Index and the latest consumer
price index to be known on the date of deduction (hereinafter: "Liquidated Damages").

(b) The provisions of subsection (a) notwithstanding, in the event of revocation of the contact due to the breach
set out in Section
19(a)(3), the Lessor shall forfeit any and all amounts paid by the Lessee defined in Section 19(a)(3), and the
provisions of subsection 19(c) above shall not apply thereto - and all as Liquidated Damages for such a case.
Such a Lessee shall be entitled - upon the condition precedent that it shall have fulfilled all the provisions of
Subsection 19(b) above - to apply to a committee to be appointed for this matter by the Israel Land Council,
which shall be entitled, if convinced that such Lessee had acted in good faith, to reduce the amounts forfeited to
the amount of Liquidated Damages pursuant to subsection (a) above only and/or determine which amounts shall
be returned to such Lessee pursuant to subsection 19(c) above. The decision of the committee shall be final. The
provisions of this subsection shall apply notwithstanding the promulgation of any other provisions on this matter in
any law.

(c) In the event that the Liquidated Damages shall exceed the amount owed by the Lessor to the Lessee pursuant
to subsections (a) or
(b) above, the Lessee shall pay the balance to the Lessor shortly after revocation of the contract.

21. Extension of the lease

(a) Subject to the provisions of subsections (b)-(d) hereunder, the Lessee shall be entitled to extend the lease for
an additional term of forty nine (49) years, provided that it shall notify the Lessor of its wish to extend the same
within the last 12 months prior to expiration of the Term of the Lease; the terms and conditions of the lease during
the Additional Term of Lease shall be as customary at that time with respect to land of the type of the Leased
Premises leased by the Lessor in the area of the Leased Premises, and for the purpose of such lease, and taking
into account that the Lessee had paid for the

Initials: R.G., O.B.
[ Letterhead of the Israel Land Administration ]

                                                       -15-

                                           construction of the Buildings.

(b) The Term of the Lease shall be extended for one Additional Term of Lease only, and the Lessor shall not be
obligated to further extend the Additional Term of Lease, and if this lease contract is for an Additional Term of
Lease - the Lessor shall not be obligated to further extend the Term of the Lease under this contract.

(c) In the event that the designation of the land on which the Leased Premises are constructed shall have changed
during the Term of the Lease, the Lessor shall not be obligated to extend the Term of the Lease.

(d) The extension of the Term of the Lease shall be made upon fulfillment of all of the following conditions:
(1) The Lessee shall have fulfilled all of the terms of this lease contract.
(2) The Lessee shall sign a new lease contract, incorporating the terms of the extended lease as aforesaid, no
later than the end of the Term of the Lease.

22. General terms and conditions

(a) Neither the Tenants Protection Act [Consolidated Version], 5732-1972, nor any other law replacing or
supplementing the same shall apply to this contract, and it is hereby declared that the Lessee has paid the Lessor
no key money for this contract, in any form or manner, and that the payments under this contract and the Lessee's
investments in the Lot shall not be deemed as the payment of key money.

(b) No waiver, discount, acceptance of any payment, inaction, tardiness or rendering of an extension on the part
of either party shall be deemed as a waiver of the rights of such party, nor shall it operate to bar any complaint,
unless such party shall have waived its rights expressly and in writing.

(c) No modification, amendment, addendum, deletion, waiver or extension of, to and in the terms of the contract
(hereinafter: "Modifications"), nor any discounts by the Lessor shall be of any effect unless made in writing and
signed and stamped by the Lessor. No Modifications of or deletions in the text of the contract or in the text of
any document attached hereto or signed hereunder shall be of any effect unless both parties shall have signed the
same by a full signature, and the Lessor shall have signed with a signature and a stamp.

Initials: R.G., O.B.
[ Letterhead of the Israel Land Administration ]

                                                        -16-

(d) The Lessee undertakes to pay the Lessor differences of indexation and the Lessor's customary interest on the
date of payment, for any payment in arrears of an amount owed by the Lessee to the Lessor under this contract,
from the date such payment is due under the contract until the date of actual payment thereof, and without
derogating from the Lessor's rights under this contract and any and all laws. In any case of arrears as aforesaid,
payments on account of the debt shall be credited in the following order: collection costs, interest, indexation,
principal.

(e) The Lessee undertakes to indemnify the Lessor for any amount which the Lessor shall be required to pay to
any person as compensation for damage for which the Lessee is liable pursuant to the provisions of this contract
and/or any law.

(f) Amounts owed by the parties to each other may be offset the one against the other. In the event that either
party shall have paid any amount for which the other is liable under this contract, the other party shall repay such
amount thereto, within 14 days from the date of the paying party's demand therefor.

(g) All expenses entailed by the preparation of this contract and the registration of the lease hereunder at the Land
Registration Bureau, including stamp duty and value added tax on this contract, shall be borne by the Lessee
alone.

(h) The section headings are intended for the sake of convenience only, and shall not be used for the
interpretation of the contract.

(i) The addresses of the parties are as set out at the top of the contract. Notices sent pursuant to this contract by
registered post to any of the foregoing addresses shall be deemed to have been duly received five days after the
date of dispatch.

Initials: R.G., O.B.
[ Letterhead of the Israel Land Administration ]

                                                        -17-

In witness whereof, the parties have hereto set their hands:

          The Lessor:                                          The Lessee:

          1.   Name ..............................             1.   Name .............................
               Title .............................                  I.D...............................
               Signature .........................                  Signature (-) [ Stamp of On Track
                                                                    Innovations Ltd. ]
          2.   Name     MAISBUZ SARAH                               Company Number 51-145625-3
               Title    DEPUTY DISTRICT TRANSACTION
                        COMMISSIONER                           2.   Name .............................
                        NORTHERN DISTRICT                           I.D. .............................




                               Signature (-) [STAMP] Signature ........................

Certifier:

I, the undersigned, do hereby certify that I have identified the said Lessee by identification papers presented to
me, and that the Lessee has signed this contract in my presence.

Name Moshe Cohen Title CPA Verifier's signature (-) Haikin, Cohen, Rubin, CPAs
                                                [ Text accompanying physical plan ]

                        Place:         Makhanaim
                        Lot:           17/2
                        Block:         13953
                        Parcel:        63H - 66H - 68H - 73H
                        Area:          2,377 dunam

                        ?? of plan:    440/3
                        Scale:         1:2500

                        -----------------------------




                                    ISRAEL LAND ADMINISTRATION
Northern District
Mapping Measurements

August 4, 1992
Tova

[ Illegible stamp and signature ]

Text in center of map:
ALLOTMENT OF LAND FOR CASTING PLANT
AREA 50220 DUNAM

Words on bottom left hand side of map:
TRESPASSING (NOT INCLUDED) ORCHARD
Exhibit 10.28

[ Letterhead of Israel Land Administration ]

[ Letterhead of the Israel Land Administration ]

# File No.: 20784707A # Account No.: 352687495

DEVELOPMENT CONTRACT

# Capitalized

Entered into and signed in _______________ on the 7th of December, 1998 on the ____ of __________,
______

                                                      Between

# The Israel Land Administration, which manages the lands of the State of Israel, the Development Authority and
the Jewish National Fund (hereinafter: the "Administration"), whose address for the purpose of this contract is:
Government Campus, Upper Nazareth, zip code 17105, P.O.B. 80 of the first part;

And

# On Track Innovations Ltd. I.D./Company No. 520042862

# (hereinafter: the "Entrepreneur"), whose address for the purpose of this contract is: P.O.B. 32, Rosh Pina, of
the second part;

                                                      Preamble

constituting an integral part of the terms and conditions of the development contract attached hereto, and which
only together constitute the contract.

          Whereas            the terms used in this contract shall be interpreted in
                             accordance with the following recitals, unless the context of the
                             contract prescribes otherwise:

          "Lot": the lot described in the plan attached hereto as an integral part of this




contract, the details of which are as follows:

# Location: Rosh Pina Area: approximately 6,500 m2

# Registered block: 13953 Parcels: 59 (in part), 62 (in part), 63 (in part), 65 (in part), 66 (in part), 67 (in part),
68 (in part), 73 (in part)

# Lot(s) No. 117, No. 118, No. 119, No. 17/4 pursuant to Detailed Zoning Plan No. G/BT/300

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                         -2-

# "Buildings": High-tech computer plant

# "Development Period": 36 months, starting on the Date of Approval of the Transaction and ending on October
1, 2001.

# "Date of Approval of the Transaction": the date on which the transaction contemplated in this contract is
approved by the Administration's management, namely September 15, 1998.

# "Purpose of the Allocation": industry and crafts - high-tech plant.

"Designation": in accordance with the aforementioned plan, namely:

# industry and crafts.

# "Rate of Utilization": the construction capacity permitted under the aforementioned plan, namely ___ % per
floor, on 3 floors, totaling ___%, constituting ___ rooms/units and amounting to 6500.0 constructed m2.

# "Basic Value of the Lot": the value of the Lot as of the Date of Approval of the Transaction, namely NIS
734,660.91.

# (Seven hundred and thirty four thousand, six hundred and sixty NIS + 91 Agorot).

"Basic Index": the latest consumer price index known on the Date of Approval of the Transaction.

"Consideration":

# The sum of NIS 227,744.88. This payment shall be deemed as payment for the annual capitalized usage fee for
using the Lot during the Term of the Lease, as defined in the attached long-term lease contract.

For the removal of doubt, the Entrepreneur shall pay value added tax as set out in the law as imposed on each
one of the foregoing payments in accordance with the rate of the value tax on the date of payment thereof.

# "Date for Submittal of the Plans": no later than 9 months after the Date of Approval of the Transaction.

# "Date for Commencement of Construction": no later than 18 months after the Date of Approval of the
Transaction.

# "Date for Completion of the Foundation Casting": no later than August 1, 2000.

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                       -3-

# "Date for Completion of the Frame": no later than July 1, 2001.

"Date for Completion of the Construction": the date of termination of the Development Period.

          # Whereas        the State of Israel / the Development Authority is the owner of
                           the Lot; and

          Whereas          the Administration will be prepared to lease the Lot to the
                           Entrepreneur on the condition precedent that, and only after, the
                           Entrepreneur develops the Lot and constructs the Buildings
                           thereon within the Development Period, to be used for the Purpose
                           of the Allocation and provided that it fulfills all the other
                           conditions of this contract; and

          Whereas          the Administration is prepared to make the Lot available to the
                           Entrepreneur only for the Development Period, and only for the
                           construction of the Buildings for the Purpose of the Allocation
                           pursuant to the Designation and the Rate of Utilization, all as
                           defined above, and the Entrepreneur agrees to accept the Lot
                           under the said conditions; and

          Whereas          the Entrepreneur declares hereby that it is subject to no
                           limitation regarding its engagement in this development contract
                           with the Administration pursuant to the provisions of Section
                           12(c) of this development contract, and that it is aware that the
                           Administration is prepared to enter into this development
                           contract therewith only upon this fundamental condition
                           precedent; and

          #Whereas         pursuant to the provisions of the treaty between the State of
                           Israel and the Jewish National Fund (hereinafter: the "Fund"),
                           published in Official Gazette No. 1456 of Sivan 11, 5728, p.
                           1597, the management of land owned by the Fund, including the
                           surrender of possession and the leasing thereof, shall be
                           performed by the Administration subject to the Fund's memorandum
                           and articles of incorporation, and the Entrepreneur hereby
                           declares that it is aware that if the Lot, in whole or in part,
                           is owned by the Fund, or will be owned by the Fund, it shall be
                           subject to the provisions of the said treaty, and that the
                           Administration is prepared to enter into this contract therewith
                           only upon this fundamental condition precedent; and

          Whereas          if the Entrepreneur is recognized by the Administration as a
                           Contractor, as defined in Subsection 3(e) of this contract, the
                           Administration will agree that it will be entitled, within one
                           year only from the end of the Development Period, to transfer its
                           rights to the entity for whom the Entrepreneur shall have
                           constructed Buildings or apartments on the Lot, subject, however,
                           to the provisions of Subsection 3(e) of this contract and
                           provided that if the Purpose of the Allocation is industry,
                           crafts or tourism, a recommendation shall be given by the
                           Ministry of Industry and Trade, or the Ministry of Tourism, as
                           the case may be, for the said transfer of rights; and




[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                       -4-

          Whereas          if the Entrepreneur comprises more than one person or
                           corporation, the undertakings of the persons or corporations
                           constituting the Entrepreneur shall be joint and several, whereas
                           their rights under this contract shall be joint only; and

          #Whereas         in addition to the following terms and conditions of the
                           development contract, the following special conditions shall
                           apply:

          #                The Entrepreneur is aware that the recommendation of the Ministry
                           of Industry and Trade for an exemption from a tender provides
                           that the minimum main area for construction shall be 2,600 m2.

                           The construction of 2,600 m2 shall be deemed by the
                           Administration as the fulfillment of the terms and conditions of
                           the development agreement and shall enable the conversion thereof
                           into the lease contract. All of the foregoing shall be in
                           addition to the fulfillment of the other terms and conditions of
                           the transaction.

                           ***

                           The allocation is based on Plan G/BT/300 which enables maximum
                           utilization at the rate of 100% on 3 floors, including 20% for
                           service areas.




Therefore, this development contract has been entered into and signed in accordance with the provisions of this
preamble and of the following terms and conditions of the development contract:

          Parties' signature        The Administration                  The Lessee
          in initials:       [Stamp of the Administration and    [Signature and stamp of
                                  stamp and signature of       On Track Innovations Ltd.]
                                     Bar Shalom Sonya,
                             District Transaction Commissioner,
                                      Northern District ]




                              Terms and Conditions of Development Contract

1. The preamble and documents attached to the contract The preamble and the documents attached to this
contract constitute an integral part hereof.

2. Purpose and period of the development authorization The Administration hereby makes the Lot available to
the Entrepreneur and the Entrepreneur hereby accepts the Lot, for the Development Period only, for the
development thereof and for the construction of the Buildings in accordance with the preamble to this contract
and with the Plans to be approved by the Administration and the competent authorities.

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                        -5-

3. Signing of long-term lease agreement
(a) Provided that the Entrepreneur shall fulfill the undertakings thereof under this contract, on the dates fixed
therefor in the contract, the Administration undertakes to sign with the Entrepreneur only, and the Entrepreneur
undertakes to sign with the Administration, a long-term lease contract (hereinafter: the "Lease Contract") for a
period of 49 years starting on the Date of Approval of the Transaction (hereinafter: the "Term of the Lease") for
the Lot and the Buildings.

(b) The Lease Contract shall determine:
(1) The Term of the Lease, the Rate of Utilization, the Basic Value of the Lot and the Basic Index under the
Lease Contract shall be as provided in this development contract.

(2) The purpose of the lease shall be identical to the Purpose of the Allocation as provided in this development
contract.

(3) The payments made to the Administration pursuant to
Section 4 of this development contract shall be deemed as payment on account of the rent which shall be due to
the Administration pursuant to the Lease Contract.

(4) The Date of Approval of the Transaction shall be deemed as the commencement of the Term of the Lease for
all intents and purposes, including with regard to the dates pursuant to the Lease Contract, and with regard to
possession, liability for damages, and payment of taxes, mandatory payments and development expenses.

(c) The remaining terms of the lease shall be in the form of the terms and conditions of the attached Lease
Contract.

(d) Without derogating from the aforesaid, the Entrepreneur undertakes to sign the attached Lease Contract at
the time of signing of this development contract. The Lease Contract shall become effective only after the
Administration too shall sign the same, which shall occur only if the Entrepreneur shall fulfill the undertakings
thereof pursuant to this development contract, on the dates fixed therefor in this contract. So long as the
Administration shall not have signed the Lease Contract, the terms thereof shall not be binding upon the parties,
and the Entrepreneur's sole signature on the Lease Contract shall confer thereon no right thereunder. The date on
which the Administration shall sign the said contract shall be deemed as the date of signing of the Lease Contract.

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                         -6-

(e) The provisions of this Section 3 notwithstanding, if the Entrepreneur is a "Contractor" - as defined below - it
shall be entitled, within one year only after the Development Period, to transfer its rights to the entity for whom
the Entrepreneur shall have constructed Buildings or apartments on the Lot, and which shall be referred by the
Entrepreneur to the Administration; in such a case, the Administration shall, only within the said year, sign the
Lease Contract for the Lot and the Buildings or for the apartments to be built on the Lot, as the case may be,
with whomever shall be referred thereto by the Entrepreneur as aforesaid, and all provided that all of the
following conditions shall be met:

(1) The Entrepreneur shall have fulfilled the undertakings thereof under this development contract.

(2) This development contract shall not have been terminated for any reason.

(3) No limitation shall be imposed on whomever shall be referred as aforesaid to the Administration in
accordance with the provisions of Section 12(c) hereunder with regard to his engagement with the Administration
in the Lease Contract, and he shall further fulfill every fundamental condition precedent in the preamble to this
contract.

Subject to all of the conditions mentioned above in this subsection, the Contractor shall not be obligated to sign
the Lease Contract itself, and on the date of signing of this development contract it shall be entitled to merely
initial the attached lease contract, which shall be used as an example only for the Lease Contract to be signed as
aforesaid in this subsection.

For the removal of doubt, it is hereby explicitly agreed that the foregoing provisions in this subsection do not
constitute an undertaking which the Administration is taking upon itself for the benefit of an entity which is not a
party to this development contract, and they shall confer no right vis-a-vis the Administration upon any entity
which is not a party to this development contract.

One year after the Development Period, the Entrepreneur shall sign a Lease Contract for the Lot and for each
one of the Buildings or apartments for which the Entrepreneur shall have referred no person to the Administration
for the signing of a Lease Contract as aforesaid, and/or a Lease Contract for the Lot and for each one of the
Buildings or apartments which shall not have been leased by the Administration to the entity referred thereto by
the Entrepreneur due to the foregoing limitation and/or non-compliance with a fundamental condition precedent.

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                         -7-

                                                 In this subsection -

                   "Contractor"       - an Entrepreneur which shall have received, in
                                      the preamble to this development contract, the
                                      Administration's explicit consent to that
                                      Buildings or apartments to be constructed thereby
                                      pursuant to this development contract shall be
                                      leased to others as per the Entrepreneur's
                                      instruction to the Administration, provided that
                                      such Entrepreneur is a registered contractor in
                                      accordance with the Act for the Registration of
                                      Contractors for Construction-Related Engineering
                                      Work, 5729-1969, or a housing company recognized
                                      as such by the Ministry of Building and Housing.




(1) The Entrepreneur declares that it has read the Lease Contract, has understood its contents and agrees to all
of the terms and conditions thereof and to the conditions of Subsection (d) or (e) above, as the case may be.

4. Consideration

(a) In consideration for the Administration's undertakings, the Entrepreneur shall pay the Administration the
payments specified in the preamble, under the definition of "Consideration".

(b) On the date of signing of the contract, the Entrepreneur shall furnish the Administration with confirmation that
the amounts mentioned in Subsection (a) above have been credited to the Administration by way of a deposit.

5. The Entrepreneur's undertakings in connection with planning, building and registration The Entrepreneur hereby
undertakes:

(a) To prepare and submit to the Administration, for the approval thereof, the building plans of the Buildings
which it wishes to build on the Lot, a measurement map of the Lot drawn by a certified surveyor and any other
document required for the said construction (hereinafter: the "Plans" or the "Building Plans"), no later than the
Date for Submittal of the Plans stated in the preamble.

(b) To submit to the competent planning authorities only such Building Plans as shall have been approved by the
Administration and to do anything necessary to lawfully obtain a building permit from the competent planning
authorities - and all immediately upon receipt of the Administration's approval of the Building Plans.

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                          -8-

(c) To start executing the approved Plans and to commence building the Buildings pursuant to the building permit
- no later than the Date for Commencement of Construction stated in the preamble.

Failure to start construction on the said date shall be deemed as a breach of this subsection, even if the
Entrepreneur shall not be entitled to lawfully start construction on the said date due to the fact that it shall not have
in its possession on such date a lawful building permit.

(d) To finish casting the foundations for the Buildings in accordance with the approved Plans - by the Date for
Completion of the Foundation Casting stated in the preamble.

(e) To finish building the frames and roofs of the Buildings, including finishing the interior partitions to the point
enabling the identification of the internal division of the Buildings (hereinafter: "Completion of Frame") by the Date
for Completion of the Frame stated in the preamble.

(f) To complete the construction of the Buildings to the point enabling the occupation and/or operation and/or use
thereof in accordance with the Purpose of the Allocation by the end date of the Development Period.

(g) To prepare and to finish, within the Development Period, all the acts necessary to register the Lot as a
separate registration unit and to this end to perform, at its expense, any necessary act, including: measurements,
preparation of maps, consolidation, parcelation, reparcelation, division, etc., so as to enable the registration of the
Lot at the Land Registration Bureau at the end of the Development Period as a separate registration unit.

The Administration may notify the Entrepreneur, in advance and in writing, that the Administration intends to
perform all or any of the said acts in lieu of the Entrepreneur, and in such a case the Administration shall be
entitled to perform all of the said acts, in whole or in part, alone and at the Entrepreneur's expense, and the
Entrepreneur undertakes to pay the Administration any expense incurred by the Administration in the
performance of the said acts, pursuant to a statement to be submitted thereto, within 30 days from the date of
submittal of the statement.

(h) To prepare and conclude, within the Development Period, all the acts required to register the Buildings as a
condominium (or condominiums) pursuant to the Land Act, 5729-1969, and to this end to perform at its expense
any act required, including the preparation of plans, registration orders, bylaws etc. - if the Administration shall
require the Entrepreneur to register the Buildings as a condominium as aforesaid. The Administration may notify
the Entrepreneur, in advance and in writing, that the Administration intends to perform all or any of the said acts in
lieu of the Entrepreneur, and in such a case the Administration shall be entitled to perform the said acts, in whole
or in part, alone and at the Entrepreneur's expense, and the Entrepreneur undertakes to pay the Administration
any expense incurred by the Administration in the performance of the said acts, pursuant to a statement to be
submitted thereto, within 30 days from the date of submittal of the statement.

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                         -9-

(i) To appear at the offices of the Administration and/or at any other location, as needed, on a date to be
coordinated thereby with the Administration in advance, which shall be no later than the end of the Development
Period, and to sign any document, note, certificate, etc., as required in order to register the lease of the Lot and
the Buildings constructed thereon and/or any unit in the condominium, registered as aforesaid, as the case may
be. In the event that the Entrepreneur shall have failed to coordinate a date as aforesaid, the Entrepreneur
undertakes to appear on any date determined and notified by the Administration.

(j) To revoke any lease, encumbrance or note registered at the Land Registration Bureau, if any, in the cases in
which this agreement shall have been signed following a change of designation and/or utilization transaction and
the Entrepreneur shall also be the registered lessee, and to perform all the acts required for the registration of the
lease as provided in Subsection (i) above. The act of revocation as aforesaid shall be performed within the
Development Period, and the performance thereof shall constitute a condition precedent to the signing of a lease
agreement with the Entrepreneur or with whomever shall be referred thereby to the Administration as provided in
Section 3 above.

The Administration may notify the Entrepreneur, in advance and in writing, that the Administration intends to
perform all or any of the said acts in lieu of the Entrepreneur, and in such a case the Administration shall be
entitled to perform all of the said acts, in whole or in part, alone and at the Entrepreneur's expense, and the
Entrepreneur undertakes to pay the Administration any expense incurred by the Administration in the
performance of the said acts, pursuant to a statement to be submitted thereto, within 30 days from the date of
submittal of the statement.

(k) In the event that the Entrepreneur shall breach any of the undertakings specified in Subsections (g)-(j) above,
then, without derogating from the provisions of this contract in connection with the breach of the said
undertakings, such undertakings shall continue to be in effect and to bind the Entrepreneur also after the
Development Period shall expire, and for the breach thereof the Administration shall be entitled to the remedies
and redress provided for under any law also after the Development Period shall expire.

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                         -10-

6. Payment of taxes and other mandatory payments The Entrepreneur undertakes to timely pay all governmental,
municipal and other taxes, municipal property taxes, various mandatory payments and all the development taxes
and fees of any kind, imposed by law on land and/or owners and/or occupants of land, which shall be imposed
on the Lot and/or in connection therewith, for the entire duration of the Development Period.

The Entrepreneur undertakes to pay value added tax as set out in the law, as applicable to each one of the
payments imposed on the Entrepreneur under this contract, according to the rate of the value added tax on the
date of payment thereof.

The Entrepreneur undertakes to reimburse the Administration, upon demand, for any payment as aforesaid, if
paid by the Administration, within 30 days from the date of demand.

7. Payment of development expenses The Entrepreneur undertakes to bear all the development expenses,
whether imposed on the Lot or incurred therefor or for the use thereof on the date of signing of this contract on
prior thereto or after the date of signing of this contract, or paid by the Administration prior to the date of signing
of this contract. The Entrepreneur undertakes to pay the development expenses upon the demand of the
Administration and/or of the entity authorized on its behalf to demand the payment thereof and/or upon the
demand of the entity which shall have incurred the development expenses.

The Entrepreneur undertakes to reimburse the Administration, upon demand, for any payment paid by the
Administration for the development expenses, within 30 days from the date of the Administration's demand.

In this section, "development expenses" - expenses and/or levies and/or fees of any kind due to the development
of infrastructure and/or superstructure and/or any other structural systems which are a condition to the
development of the Lot or to construction thereon, including clearing access routes to the Lot, digging channels,
paving roads and sidewalks, lighting, water, sewage, etc.

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                         -11-

8. Incompatibility and vacation of occupants

(a) The Entrepreneur hereby declares that it has seen the Lot, has examined the physical and legal condition
thereof, and has found them to be compatible with all of its needs for the purpose of fulfilling the contract.

(b) Without derogating from the generality of the aforesaid, if occupants are found on the Lot:

(1) The Administration shall bear no liability for the vacation of the occupants and/or for the vacation expenses, in
any form or manner.

(2) The presence of occupants on the Lot, as aforesaid, shall not serve as a cause and/or justification for the non-
fulfillment of any provision of the contract in general, and for compliance with the time table under this contract in
particular.

(3) The Entrepreneur shall be entitled, no later than three months after the date of signing of this contract, to notify
the Administration that due to the presence of occupants on the Lot, it is interested in terminating the contract. In
such a case, and provided that the fact of the presence of occupants as aforesaid is confirmed by the
Administration, the Administration will be prepared to agree to terminate the contract without liquidated damages,
and the termination shall be subject to the provisions of Section 13 below, mutatis mutandis.

9. Liability during the Development Period

The Entrepreneur undertakes, throughout the entire Development Period, to keep the Lot in an orderly condition
and to maintain it as would an owner who maintains his property, to comply with the provisions of any law, to
bear sole and full responsibility vis-a-vis the Administration and any third party for all acts and/or omissions of the
Entrepreneur on the Lot and/or for any other act and/or omission in connection with the contract, and to pay any
fine and/or damages and/or payment and/or any other expenses of any kind, to be imposed and/or due and
payable due to the acts and/or omissions of the Entrepreneur, as aforesaid, and/or as a result thereof.

In the event that the Administration shall bear any payment due to such act and/or omission and/or as a result
thereof, the Entrepreneur shall compensate and/or indemnify the Administration for any such payment, within 14
days after being required to do so.

10. Interest and indexation for payments in arrears

(a) Any payment due from the Entrepreneur under this contract to the Administration, and not paid thereby on
time, shall be paid by the Entrepreneur to the Administration in addition to interest and/or indexation to be
calculated until the date of actual payment, at the Administration's standard rates at the time of actual payment
with regard to payments in arrears, and without derogating from the Administration's other rights under the
contract or any law.

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                          -12-

(b) Any payment made by the Entrepreneur shall be credited according to the following order: collection
expenses, interest, differences of indexation and finally principal.

11. Prohibition of transfer and encumbrance of rights
(a) The permission granted to the Entrepreneur under the contract is personal only, and the Entrepreneur may not
transfer its rights under the contract, in whole or in part, in any form or manner, either directly or indirectly, and/or
lease the Lot and/or surrender the possession or entrust the use thereof, or part thereof, to others.

(b) Without derogating from the provisions of Subsection (a) above and in addition thereto, if the Entrepreneur is
an "association", the Entrepreneur - and any association holding a right in an association in the Entrepreneur -
shall be prohibited from performing any act in an association throughout the Development Period.

In this subsection:
"Association" - as defined from time to time in the Land Appreciation Tax Act, 5723-1963 (hereinafter:

                                            "L.A.T. Act"), including a non-registered
                                            partnership.
                        "Right in an
                        association"     - as defined from time to time in the L.A.T. Act.
                        "Holder",
                        "Holding"        - as "Holding" is defined from time to time in the
                                           Securities Act, 5728-1968; the terms used in the
                                           definition of "Holding" in the said act shall be
                                           interpreted as they are defined from time to time
                                           in the said act.
                        "Act in an
                        association"     - as defined in the L.A.T. Act, including any
                                           change in an Entrepreneur which is a registered
                                           or non-registered partnership, or any change in
                                           an Entrepreneur which is an association whose
                                           capital is in a form other than stock, resulting
                                           from a joining or retirement of a person
                                           therefrom, and including any change in the
                                           proportionate share of a partner in the capital
                                           of such partnership or association.

               (c)      Without derogating from the provisions of Subsections (a)-(b)




above, and in addition thereto, the Entrepreneur may not pledge and/or encumber its rights under the contract
and the Lot in any form or manner, without the prior written consent of the Administration thereto.

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                        -13-

The Entrepreneur further undertakes not to register a warning note at the Land Registration Bureau pursuant to
the Land Act, 5729-1969 with regard to its rights under the contract, without the prior written consent of the
Administration thereto. In no case will the Administration give its consent to the registration of such warning note,
so long as the Lot shall not have been registered as a separate registration unit.

(d) Any breach by the Entrepreneur of any provision of this section shall be deemed as a fundamental breach of
the contract thereby, and the Administration shall be entitled to terminate the same at any time due to such
breach.

12. Breach and termination of the contract
(a) The parties hereby agree that the dates stated in the contract and the terms and conditions stipulated in
Sections 4, 5 and 11 of the contract are principal and fundamental terms of the contract, the breach of which, or
the breach of any of which, shall be deemed as a fundamental breach of the contract.

(b) Without derogating from the provisions of Subsection (a) above, it is hereby agreed that upon any of the
following breaches, the Administration shall be entitled to terminate the contract immediately upon the breach,
and to notify the Entrepreneur by registered post of the termination (hereinafter: "Notice of Termination"):

(1) If the Entrepreneur shall change or cause a change in the Purpose of the Allocation or the Designation, or shall
use the Lot in any manner incompatible therewith.

(2) If the Entrepreneur shall breach another term or condition of the contract, and the breach is irreparable
and/or, if the breach is reparable, the Entrepreneur did not rectify or remove the same within 3 months from the
date of being required to do so by the Administration in writing.

(3) If one of the fundamental conditions precedent in the preamble to this contract shall have been breached.

(4) If the Lot shall have been surrendered to the Entrepreneur pursuant to the recommendation of the Ministry of
Building and Housing, and the Entrepreneur shall not have commenced construction on the date fixed in the
contract between itself and the Ministry of Building and Housing, and the said Ministry shall given the
Administration notice to

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                          -14-

                                                 this effect in a letter.

(c) Without derogating from all of the aforesaid, if the Entrepreneur or the person for whom the Entrepreneur is
acting is a foreign citizen, the contract shall be deemed to have been fundamentally breached by the Entrepreneur,
and the Administration shall be entitled to terminate the contract due to such breach.

In this subsection, "foreign citizen" - anyone who is not one of the following:

(1) An Israeli citizen;

(2) A new immigrant under the Law of Return, 5710-1950, who has not given a declaration pursuant to Section
2 of the Citizenship Act, 5712-1952;

(3) A person entitled to a new immigrant visa or a new immigrant certificate under the Law of Return, 5710-
1950, who has received, in lieu thereof, a visa and license for temporary residence as a potential new immigrant
pursuant to the Entry to Israel Act, 5712-1952;

(4) A corporation controlled by an individual who fulfills the criteria listed in paragraphs (1)-(3) above, or by
more than one such individual.

In this paragraph, "control" shall mean one of the following:

(a) The holding - directly or indirectly, by one person or corporation or by more than one person or corporation
of 50% or more of the par value of the corporation's issued capital stock;

(b) The holding - directly or indirectly, by one person or corporation or by more than one person or corporation
of one half or more of the corporation's voting power;

(c) The right to directly or indirectly appoint one half or more of the corporation's directors, whether the said right
is held by one person or corporation or by more than one person or corporation.

This subsection shall not apply to an Entrepreneur who shall have received approval for the aforesaid, in advance
and in writing, from the Chairman of the Israel Land Council.

(d) Without derogating from the aforesaid, it is hereby agreed that if the Administration shall decide not to
terminate the contract, despite its right to do so, the Administration shall be entitled to demand and receive from
the Entrepreneur land value differences or an appropriate usage fee or liquidated damages, whichever is the
higher of the three, for the period from the Date of Approval of the Transaction until the date of the
Administration's decision not to terminate the contract and/or to grant an extension for the performance thereof
(hereinafter: the "Decision Date").

[ Stamp on On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                        -15-

For this section:

"Land value differences": the difference between the full payment which the Entrepreneur would have been
required to pay for the Lot, had it been allocated on the Decision Date, according to the Administration's
standard terms and conditions at such time, and the amounts paid to the Administration by the Entrepreneur for
the Lot, linked to the consumer price index from the date of payment thereof until the Decision Date.

"Appropriate usage fee": a usage fee for the period from the commencement of the Development Period until the
Decision Date, at the annual rate of 6% of the value of the lot as of the Decision Date, as determined by the
Governmental Assessor.

"Liquidated damages": liquidated damages at the rate of 15% of the value of the Lot as of the Decision Date.

13. The parties' undertakings upon termination of the contract
(a) Upon termination of the contract as provided in Section 12 above, the Entrepreneur shall be obliged:

(1) To vacate the Lot immediately.

(2) To return the same immediately to the Administration, it being vacant of any object and person and free of
any encumbrance or third party right.

(3) To demolish the Buildings, the fences, the plantations and any other fixtures constructed by the Entrepreneur
on the Lot (hereinafter: the "Fixtures"), to remove the rubble and reinstate the Lot to its former condition, as being
prior to the construction of the Fixtures - if required to do so by the Administration.

In the event that the Entrepreneur shall fail to discharge its obligations under this subsection, the Administration
shall be entitled - but not obliged - to perform all of the said acts alone at the Entrepreneur's expense, and to
deduct all the expenses incurred thereby in connection with its acts from the sums paid by the Entrepreneur to the
Administration under the contract; in any event, even if the Administration shall not perform any of the said acts,
the Entrepreneur shall be entitled to no compensation and/or consideration for its investments and/or expenses in
connection with the Fixtures.

(4) To pay the Administration all of the following sums:

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                        -16-

(a) An appropriate usage fee for the period from the date of commencement of the Development Period until the
return of the Lot, at the annual rate of 6% of the value of the Lot as of the date of termination, as determined by
the Governmental Assessor;

(b) All the taxes and mandatory payments specified in
Section 6 above, which are due and payable for the period mentioned in paragraph (a) above;

(c) The aforementioned vacation expenses;

(d) Liquidated damages - at the rate of 15% of the Basic Value of the Lot in addition to differences of indexation
between the Basic Index and the latest consumer price index known on the date of payment.

(b) It is hereby agreed that if the Entrepreneur shall not be required to demolish the Fixtures or any part thereof -
as stated in Subsection (a)(3) above - and the Lot is returned to the Administration together with the Fixtures or
part thereof, the Entrepreneur shall be entitled to receive the value of the Fixtures, as determined by the
Governmental Assessor as of the date of termination of the contract, from the Administration.

(c) Upon the return of the Lot as aforesaid, the Administration shall repay the Entrepreneur any amount paid
thereby to the Administration under this contract, and any amount due to the Entrepreneur, if any, pursuant to the
provisions of Subsection
(b) above.

The repayment of the said amounts shall be made by the Administration after deduction of all the amounts
specified in paragraph (a)(4) above.

Nothing in the aforesaid shall derogate from the Administration's rights and from any remedy to which it is entitled
under this contract and any law.

(d) The provisions of Subsections (b) and (c) above notwithstanding, in the case of termination of the contract
pursuant to Section 12(c) above, and upon the return of the Lot as provided in Subsection (a) above, the
following provisions shall apply:

The Administration shall forfeit all the amounts paid by the Entrepreneur as defined in Section 13(a)(4) above,
and, furthermore, the provisions of Subsection (b) above shall not apply thereto - and all as liquidated damages in
such a case.

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                        -17-

An Entrepreneur as aforesaid shall be entitled - upon the condition precedent that it shall have fulfilled all the
provisions of paragraphs (1)-(3) of Subsection (a) above - to apply to a committee to be appointed for this
matter by the Israel Land Council, which shall be entitled, if convinced that such Entrepreneur acted in good faith,
to reduce the forfeited amounts to the amount of the liquidated damages pursuant to Subsection (a)(4) above only
and/or to determine how much will be returned to such Entrepreneur pursuant to Subsection (b) above. The
committee's decision shall be final.

The provisions of this subsection shall apply also if other provisions shall be determined for this matter in any law.

(e) With the exception of what is due to the Entrepreneur pursuant to Subsections (c) or (d), as the case may be,
the Entrepreneur or another acting on its behalf shall make no other claim, monetary or otherwise, to the
Administration or to another, including a claim for its expenses, losses or investments in connection with this
contract.

(f) Upon termination of the contract as set out in Section 12 above, the Administration shall be entitled to take
sole possession of the Lot and to vacate therefrom any object, building and person found thereon.

14. Changes in the boundaries and area of the Lot
(a) The Entrepreneur declares that it is aware that the area and boundaries of the Lot are not final and that
changes may occur therein.

(b) The parties explicitly agree that if the area and/or boundaries of the Lot shall change as a result of changes in
the Plan under the Planning and Building Act, 5725-1965, a land arrangement, the preparation of a measurement
map for purposes of registration, etc., the Entrepreneur undertakes to deem the Lot, with its new area and/or
boundaries, as the Lot which is the subject matter of this contract for all intents and purposes, and with the
exception of the provisions of Subsection (c) below, the Entrepreneur undertakes to make no claims or demands
against the Administration due to such change and anything resulting therefrom.

(c) If the Basic Value of the Lot shall change due to a change in the boundaries and/or area of the Lot, the
amounts stated in Section 4 above shall be amended proportionately to the change in the Basic Value of the Lot,
and the difference shall be paid to the party entitled thereto immediately upon demand, in addition to interest
and/or indexation from the Date of Approval of the Transaction until the date of actual payment, according to the
Administration's standards on the date of payment.

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                        -18-

15. Natural resources, archeological finds, materials and trees
(a) The Entrepreneur hereby declares that it is aware that all natural resources such as: oil, gas, water springs,
coal and metal deposits, marble, stone, sand and limestone quarries, and any other minerals as well as
archeological finds, materials and trees found in the ground of the Lot are not included in the allocation under this
contract and the terms of the permission under this contract do not apply thereto. The Entrepreneur shall enable
the Administration to extract or otherwise utilize the said natural resources, archeological finds, materials and
trees in accordance with the relevant laws and this contract.

(b) The Entrepreneur shall not excavate the Lot over and above the degree necessary for the achievement of the
purpose of this contract.

(c) The Entrepreneur shall not sell materials extracted thereby from the Lot, since they are the property of the
Administration, without the prior written consent of the Administration, nor will the Entrepreneur remove trees
found on the Lot without the prior written consent of the competent authority and of the Administration, which
may condition their consent upon payment for the trees.

In the event that the Entrepreneur shall breach this prohibition, the Administration shall be entitled to demand
damages therefrom. The amount of the damages shall be determined in accordance with the price of the materials
sold or the value of the trees removed, according to the Administration's standards at the time of breach of the
prohibition, and according to the quantity of materials or trees determined by the Administration. The
Entrepreneur undertakes to pay the damages, as determined by the Administration in accordance with the
aforesaid, within 14 days from the date of dispatch of the demand for payment.

16. Right of entry The permission granted to the Entrepreneur under the contract does not confer upon it the right
of sole possession of the Lot, and the Entrepreneur declares that it is aware that the Administration or its
representatives may enter the Lot at any time for any purpose. Without derogating from the aforesaid, the
Administration may pass conduits through the Lot, either alone or through others, for water, channels, sewage
and gas, erect electricity or telephone poles, pull electricity, telephone and/or other lines, and all in accordance
with plans approved by the competent authorities, and the Entrepreneur shall enable the Administration or others
on its behalf to enter the Lot and to perform the work required therefor and all repairs in connection therewith
needed from time to time. The Administration undertakes to compensate the Entrepreneur for any damage to be
caused to the Entrepreneur due to the performance of the said work.

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                        -19-

17. The Tenants Protection Act

Neither the Tenants Protection Act [Consolidated Version], 5732-1972, nor any other law replacing or
supplementing the same shall apply to this contract. Without derogating from the aforesaid, it is hereby declared
that the Entrepreneur has paid the Administration no key money for this contract, in any form or manner, and that
the payments under this contract and the Entrepreneur's investments in the Lot, if any, shall not be deemed as the
payment of key money, for which reason too neither the Tenants Protection Act [Consolidated Version], 5732-
1972, nor any other law replacing or supplementing the same shall apply to this contract.

18. Preservation of the Administration's rights

(a) No failure by the Administration to exercise any of the rights conferred thereon under the contract shall be
deemed as a waiver of such right.

(b) No modification, amendment, addendum, deletion, waiver or extension of, to and in the terms of this contract
(hereinafter:
"Modifications"), shall be binding upon the parties unless made in writing and signed by both parties. No
Modifications of or deletions in the text of the contract or in the text of any document attached hereto shall be
binding upon the parties unless both parties shall have signed the same by a full signature.

In this paragraph -

"Signature" - with regard to the Administration and an Entrepreneur which is a corporation, including a stamp.

(c) The receipt of any payment by the Administration shall not, ipso facto, constitute a recognition of any rights of
the Entrepreneur and shall confer thereupon no right not granted thereto under the contract.

19. Stamp duty The expenses of stamping this contract, if applicable, and 5 copies thereof, shall be borne by the
Entrepreneur.

20. Notices Notices under this contract shall be sent by registered post.

Any notice sent by one party to the other by registered post according to the addresses stated in the preamble to
this contract, shall be deemed to have been delivered to the addressee five days after dispatch thereof.

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                         -20-

21. Effectiveness of the contract This contract shall be of no effect so long as it is not signed by both parties.
After the signing thereof by both parties, the contract shall be effective as of the Date of Approval of the
Transaction.

In this paragraph -

                      "Signature"     - in initials on the margins of the last line of the
                                      preamble and a full signature at the end of the contract,
                                      and for an Entrepreneur which is a corporation, including
                                      a stamp, and for the Administration - including one stamp
                                      imprinted together on the pages of the contract.

           22.        Headings




The section headings in the contract are intended for the sake of convenience only, and shall not be used for the
interpretation hereof.

[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                        -21-

In witness whereof, the parties have hereto set their hands:

                 The Administration:                                      The Entrepreneur:

                 1.   Name ..............................                 1.    Name Yaron Amir
                      Title .............................                       I.D. 022571046
                      Signature .........................                       Signature (-)

                 2.   Name         SONYA BAR SHALOM                       2.    Name Oded Bashan
                      Title        DISTRICT TRANSACTION                         I.D. 005877527
                                   COMMISSIONER                                 Signature (-)
                      Signature    (-)




[Stamp of the Israel Land Administration ] [Stamp of On Track Innovations Ltd.]

Certifier:

I, the undersigned, do hereby certify that I have identified the signatories in the foregoing "Entrepreneur" column
by identity certificates presented to me, and that they signed this contract in my presence.

Name OFER ZIPPERMAN, ADV. Title _______ Verifier's signature (-)
[ Stamp, license No. 16117)

When the Entrepreneur is a corporation/company/association, fill out and sign:

I, advocate _________________, legal counsel to On Track Innovations Ltd., public company No.
520042862, do hereby certify that on ____________, appeared before me Messrs.:

1. Oded Bashan... I.D. 005877527
2. Yaron Amir.... I.D. 022571046
3. _____________. I.D. _______________

who are authorized to sign and commit on behalf of the said company, and who, after I identified them by an
identity certificate they presented to me, signed this contract in my presence.

          October 4, 1998       [stamp: OFER ZIPPERMAN, ADV., LICENSE NO. 16117 and signature]
          ---------------       --------------------------------------------------------------
          Date                                 Signature and stamp of attorney




[ Stamp of On Track Innovations Ltd. and signature ]
[ Letterhead of Israel Land Administration ]

                                                           -22-

                                       [ Text accompanying physical plan ]

                                            Israel Land Administration

                                                   Northern District

                                     Mapping and Surveying Department

          ================================================================================
                                          Work No. 691/113
          ================================================================================

          District:                 NORTH

          Division:                 Z'FAT

          Town / Village:           ROSH PINA

          Local Council:

          Regional Council:

          Place:                    ROSH PINA

          Blocks:                   13953      |       |          |

          Parcels:                  [illegible] 63, 65-68, 73

          Scale:                    1:1250

          Purpose of plan:          ON TRACK INNOVATIONS LTD.
                                    LOTS: 17/4, 117H-119H

          Area:                     6,500 DUNAM




[ Stamp and signature of M. Strulovitz, Certified Surveyor, License No. 423 [??
- unclear, hidden by signature], District Commissioner of Mapping and Surveying, I.L.A. Northern District ]

[ Stamp and signature: Israel Land Administration, on behalf of the State ]
[ Letterhead of Israel Land Administration ]

                                                      -23-

Comments:

1. The encircled numbers indicate parcels by block.

2. This plan is based on registered block map [unclear word] No. 13953.
This plan is based on plan for registration purposes No. _______ This plan is based on [unclear word] block
map No. __________ This plan is based on aerial photo plan __________ This plan is based on detailed zoning
plan No.[illegible], effective (in deposit) August 28, 1995.
This plan is based on a surveying plan by Certified Surveyor Pinkas and Son No. 489 of January 13, 1994.
This plan is based on a measurement by the Mapping and Surveying Department of the I.L.A. Northern District
dated __________ Certified Surveyor _________

3. The plan was drawn by Tova A. on September 27, 1995 Checked by __________ on ____________

           4.       Changes in the    plan:
                    Change made on    August 11, 1998        by Tova,   checked by ______________
                    Change made on    ____________           by ____,   checked by ______________
                    Change made on    ____________           by ____,   checked by ______________
                                                   Exhibit 10.32

                                                September 20, 2001

Mr. Manfred Weise
Eschenweg 8
78244 Gottmadingen

Re: Amendment of Put Option Agreement Dated June 15, 2000

Dear Manfred,

Following the meetings we had on Friday, August 9, 2001 and Tuesday, August 22, 2001, we reached an
understanding regarding the Seventh and Eighth Option Instalments pursuant to Sections 4.2.7, 4.4 and 4.5 of
that certain Put Option Agreement dated as of June 15, 2000 (the "Put Option Agreement") between the
Shareholders of InterCard (as such terms are defined in the Put Option Agreement) and On Track Innovations
Ltd. ("OTI") that will enable us to conclude the transactions contemplated by that certain agreement date June
15, 2000 between the Shareholders and OTI regarding the purchase of 51% of the InterCard's nominal capital
(the "Purchase Agreement"), the Put Option Agreement referred to above regarding the purchase of the
remaining 49% of InterCard's nominal capital and ancillary documentation thereto, including, but not limited to,
the Share Pledge Agreement as of June 15, 2000 (the "Share Pledge Agreement"). All capitalized terms used but
not specifically defined in this letter shall have the meanings ascribed to them in the Put Option Agreement. I
would like to set forth our agreement for conclusion of such transaction as follows:

1. The Shareholders accept the 59,376 OTI Shares received form the Escrow Account on August 2, 2001 as
partial payment of the Seventh Option Instalment.

2. In fulfilment of (i) the remaining balance of the Seventh Instalment pursuant to Section 4,2.7, (ii) Section 4.4
and (iii) Section 4.5 of the Put Option Agreement, OTI will pay to you on behalf of the Shareholders an
aggregate amount of Euro 864,465.00 (the "Final Payment").
3. The Final Payment of Euro 864,465.00 shall be paid as follows:

3.1 Euro 216,105 shall be paid in cash, no later then October 4, 2001.

3.2 Euro 648,360 shall be paid as stipulated hereunder and immediately granted to OTI as a loan ("Loan I") (for
the avoidance of doubt, no money shall be transferred between the parties when the loan is granted). OTI will
repay Loan I over three years, in 36 monthly instalments as set forth on Schedule A attached to this letter
commencing on November 1, 2001. Loan I shall bear interest at a rate of 6% per annum payable in accordance
with Schedule A. OTI shall have the option, in its discretion, at any time to prepay the remaining principal amount
of Loan I.

3.3 In the event OTI fails to pay a monthly instalment within 30 days from the receipt of a written notice regarding
such failure, the remaining principal amount of Loan I shall become due immediately following the above period.

4. OTI shall grant a loan ("Loan II") to InterCard K in an amount of Euro 432,230 on the same terms as Loan I.

5. The Final Payment of 864,465.00 shall be the full and final payment of the total consideration according to the
Put Option Agreement, including all payments due to you, Mr. Dennis Robert Weise, Mr. Patrick Norbert Weise
and Civil Partnership. In addition, the Final Payment shall be deemed a full and final fulfilment of all OTI's
obligations under the Purchase Agreement, the Put Option Agreement and ancillary documentation thereto.

6. Section 3.5 of the Put Option Agreement and the Share Pledge Agreement are hereby amended. To secure
the repayment of Loan I, the following Ownership Interests in InterCard as set forth in Annex I to the Put Option
Agreement, which is hereby incorporated by reference, shall remain pledged:

* One ownership interest (Geschaftsanteil) in InterCard K in the nominal amount of DM 94,000.00 (acquired by
OTI from the Civil Partnership);

* one ownership interest in InterCard K in the nominal amount of DM 4,000.00 (acquired by OTI from Manfred
Weise);

* one ownership interest in InterCard S in the nominal amount of DM 16,500.00 (acquired by OTI from the Civil
Partnership);

* one ownership interest in InterCard S in the nominal amount of DM 5,500.00 (acquired by OTI from Dennis
Robert Weise);

* one ownership interest in InterCard S in the nominal amount of DM 5,000.00 (acquired by OTI from Dennis
Robert Weise);

* one ownership interest in InterCard S in the nominal amount of DM 1,500.00 (acquired by OTI from Dennis
Robert Weise);
* one ownership interest in InterCard S in the nominal amount of DM 10,000.00 (acquired by OTI from
Manfred Weise);

* one ownership interest in InterCard S in the nominal amount of DM 3,500.00 (acquired by OTI from Manfred
Weise);

* one ownership interest in InterCard S in the nominal amount of DM 5,500.00 (acquired by OTI from Patrick
Norbert Weise);

* one ownership interest in InterCard S in the nominal amount of DM 5,000.00 (acquired by OTI from Patrick
Norbert Weise); and

* one ownership interest in InterCard S in the nominal amount of DM 1,500.00 (acquired by OTI from Patrick
Norbert Weise) (such ownership interests that are owned by OTI and remain pledged to the Shareholders
pursuant to this Section 6 hereinafter referred to as the Pledge Interests").

The Shareholders hereby irrevocably and unconditionally release and discharge immediately upon receipt of the
payment in accordance with
Section 3.1 of this letter all other ownership interests of InterCard K and InterCard S listed in Annex 1 to the Put
Option Agreement from the pledge under the Share Pledge Agreement.

The Pledged Interests will be irrevocably and unconditionally released and discharged immediately upon the
earlier of (i) payment of the last instalment of Loan I in accordance with Section 3.2 above, (ii) the prepayment of
Loan I pursuant to Section 3.2 of this letter or (iii) the repayment of the remaining principal amount of Loan I
pursuant to
Section 3.3 of this letter.

7. The Special Account pursuant to Section 15.1 and 15.2 of the Purchase Agreement will be released on
October 4, 2001. In the event that (i) the tax assessment notice(s) ("Steuerbeschald(e)") issued by the German
tax authorities for InterCard assess a Payment of taxes for prior years in excess of the amount of DM 2,249.00
as reflected in the government tax auditors' report ("Betrisbspufungsbericht") for InterCard K as of August 17,
2001 or (ii) Mr. Messmer asserts a claim against InterCard S or InterCard K, Manfred Weise will indemnify and
hold harmless OTI from and against any such amount or claim. All other provisions of the Purchase Agreement,
the Put Option Agreement and ancillary documentation thereto shall remain in effect unless amended by the
parties in writing.

8. This letter shall be governed by German law.

9. The understanding as set forth in this letter is still subject to the approval of OTI's board of directors.
Kindly sign on the bottom of this letter, expressing you agreement to the above.

Best Regards,

Oded Bashan
Chairman and CEO
On Track Innovations Ltd.

By signing hereunder we agree to the content of this letter:

                                         /s/ Manfred Weise
                                         ---------------------------
                                         Mr. Manfred Weise




                                         /s/ Dennis Weise
                                         ---------------------------
                                         Mr. Dennis Weise




                                         /s/ Patrick Weise
                                         ---------------------------
                                         Mr. Patrick Weise
P.V.                      845,360
                         --------
Interest (per month)       0.500%
                         --------
Period                         36
                         --------
Payments                   19,724


         Principal      Interest         Payments          Total
     -------------------------------------------------------------
 1        16,483          3,242           19,724          631,877
 2        16,585          3,159           19,724          615,312
 3        16,848          3,077           19,724          598,885
 4        16,731          2,993           19,724          581,834
 5        16,815          2,910           19,724          585,119
 6        16,899          2,826           19,724          548,220
 7        16,983          2,741           19,724          531,237
 8        17,086          2,658           19,724          514,169
 9        17,154          2,571           19,724          497,015
10        17,239          2,485           19,724          478,776
11        17,325          2,399           19,724          452,490
12        17,412          2,312           19,724          445,038
13        17,499          2,225           19,724          427,539
14        17,587          2,138           19,724          409,952
15        17,675          2,050           19,724          392,278
16        17,763          1,961           19,724          374,515
17        17,652          1,873           19,724          356,883
18        17,941          1,783           19,724          338,722
19        18,031          1,694           19,724          320,691
20        18,121          1,603           19,724          302,570
21        18,212          1,513           19,724          284,359
22        18,303          1,422           19,724          268,056
23        18,394          1,330           19,724          247,582
24        18,486          1,235           19,724          229,176
25        18,578          1,148           19,724          210,598
26        18,671          1,053           19,724          191,926
27        18,765            960           19,724          173,161
28        18,858            888           19,724          154,303
29        18,953            772           19,724          135,350
30        19,048            677           19,724          116,302
31        19,143            582           19,724           97,160
32        19,239            486           19,724           77,921
33        19,336            390           19,724           58,586
34        19,431            283           19,724           39,155
35        19,529            196           19,724           19,626
36        19,626             98           19,724               -0
EXHIBIT 10.33

                                       CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (this "Agreement") is made effective as of the __ day of March, 2002
(the "Effective Date") by and between On Track Innovations Ltd., a company organized under the laws of the
State of Israel (the "Company") and Dionysos Investments Ltd., a company organized under the laws of the State
of Israel (the "Consultant").

                                             W I T N E S S E T H:

WHEREAS, the Company is engaged in the business of the development, marketing and sale of contactless
microprocessor-based smart card products worldwide (the "Business");

WHEREAS, the Company has authorized ordinary shares (the "Shares") certain of which are listed on the Neuer
Markt of the Frankfurt Stock Exchange (the "Neuer Shares") and the Company desires to complete a listing of
additional Shares on the NASDAQ Small Cap Market (the "NASDAQ Shares") and may in the future, in its
discretion, consider other exchange listings in the United States; and

WHEREAS, in connection with listing the NASDAQ Shares on the NASDAQ Small Cap Market (the
"Project"), the Company desires to retain the Consultant to provide the Company with the services described in
section 1, below, in accordance with the terms and conditions of this Agreement; and

WHEREAS, the Consultant desires to be retained by the Company to provide such services in accordance with
the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the above premises and the mutual agreements set forth below and for
other good and valuable consideration given by each party to this Agreement to the other, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement, intending to be legally bound,
hereby agree as follows:

1. Consultant's Services.

1.1. The Company hereby engages the Consultant, and the Consultant hereby agrees to serve, as an independent
consultant to the Company, in which capacity the Consultant shall diligently and competently provide the
following services (collectively, the "Services") in connection with the Project:

1.1.1. provide complete oversight and management of the documentation process to successfully complete the
listing of the NASDAQ Shares on the NASDAQ Small Cap Market, and, if requested by the Company, on such
other exchanges in the United States as the Company may, in its discretion, designate, including without limitation,
consulting with the Company's management, lawyers and accountants as may be required;

1.1.2. identify and, subject to the Company's approval, secure the agreement of no fewer than three (3)
NASDAQ market-makers satisfactory to the Company in its sole discretion (which approval, when given, shall
establish the Company's satisfaction with such market-makers), and the Consultant shall use its best efforts to
assure that two of such market-makers shall be qualified as market-makers with Level 2 Market Maker Access;

1.1.3. assist and consult the Company in the preparation of a Business Plan;

1.1.4. assist the Company in preparations for the road-show and participate in the road-show at the request of
the President of the Company; and
1.1.5. provide such other services related to the Project as the Company may reasonably request from time to
time, including, for example but without limitation, responding to inquiries from regulatory bodies and assisting in
composing public relations materials.

1.2. The Consultant shall provide the Services by and through Haim Nissenson and such other persons as the
Consultant may request and the Company may agree in writing. In the performance of the Services hereunder,
the Consultant will report to the President of the Company. The Consultant shall use its best efforts in providing
the Services.

1.3. The Consultant shall be available to provide Services no less than 15 hours each week during the Term (as
defined below).

1.4. The Consultant shall provide a written report each week during the Term to the President summarizing the
status of the Project, tasks to be accomplished to complete the Project and timelines. The Consultant shall
provide such other reports to the Company in a timely manner as requested by the Company.

2. Compensation and Expenses. As the sole and complete consideration to the Consultant for entering into this
Agreement and for the Services and obligations hereunder during the Term and so long as the Agreement has not
been sooner terminated by either party, the Company shall pay the Consultant as follows (all dollars are in United
States dollars):

2.1. On the Effective Date, the Company shall pay the Consultant eight thousand dollars (US$8,000.00).

2.2. Forty-five (45) days following the Effective Date, the Company shall pay the Consultant four thousand
dollars (US$4,000.00).

2.3. After at least three (3) registered NASDAQ market-makers agree with the Company, upon terms and
conditions approved by the Company, to make a market in the NASDAQ Shares, the Company shall pay the
Consultant fifteen thousand dollars (US$15,000.00).

2.4. Upon the successful completion of the listing on NASDAQ of all the NASDAQ Shares designated by the
Company and commencement of active trading of such NASDAQ Shares (the "Listing Date"), the Company
shall pay the Consultant twenty five thousand dollars (US$25,000.00).

2.5. On the ninetieth (90th) day following the Listing Date (the "Issuance Date"), so long as during such ninety
(90) day period no de-listing or comparable action has been commenced or threatened, the Company shall pay
the Consultant ten thousand dollars (US$10,000.00) and issue to the Consultant twenty two thousand five
hundred (22,500) NASDAQ Shares covered by the Registration Statement (as defined below), the Consultant
expressly acknowledging that such number of Shares speaks as of the date of this Agreement and such number of
Shares will be adjusted equitably to reflect any subdivision or combination of the outstanding shares of the
Company, including, without limitation, a proportionate reduction to reflect any reverse stock split, stock
dividend, capital reorganization, reclassification, merger, consolidation or similar event prior to the Issuance Date
(and such adjustment to include any other bonus or other arrangement provided to other shareholders or
optionholders of the Company, as the case may be).

2.6. In addition to the payments and other consideration described in sections 2.1 through 2.5, above, the
Consultant shall receive from the Company on the Listing Date the following additional consideration:

                                                          2
2.6.1. Thirty five thousand (35,000) NASDAQ Shares covered by the Registration Statement, the Consultant
expressly acknowledging that such number of Shares speaks as of the date of this Agreement and such number of
Shares will be adjusted equitably to reflect any subdivision or combination of the outstanding shares of the
Company, including, without limitation, a proportionate reduction to reflect any reverse stock split, stock
dividend, capital reorganization, reclassification, merger, consolidation or similar event prior to the Listing Date
(and such adjustment to include any other bonus or other arrangement provided to other shareholders or
optionholders of the Company, as the case may be);

2.6.2. A Stock Option ("Option I") in form and substance satisfactory to the Company, pursuant to which the
Consultant may purchase seventy thousand (70,000) NASDAQ Shares at the Base Price (as defined below)
multiplied by 1.25 ("Option I Exercise Price") such Option I to expire on the earlier of (i) the close of business on
April 1st, 2005, or (ii) ninety (90) days after the Exercise Trigger Date (as defined below), the Consultant
expressly acknowledging that such number of Shares speaks as of the date of this Agreement and such number of
Shares will be adjusted equitably to reflect any subdivision or combination of the outstanding shares of the
Company, including, without limitation, a proportionate reduction to reflect any reverse stock split, stock
dividend, capital reorganization, reclassification, merger, consolidation or similar event (and such adjustment to
include any other bonus or other arrangement provided to other shareholders or optionholders of the Company,
as the case may be); and

2.6.3. A Stock Option ("Option II"), in form and substance satisfactory to the Company, pursuant to which the
Consultant may purchase twenty-five thousand (25,000) NASDAQ Shares at the Base Price multiplied by two
(2), such Option II to expire on the earlier of (i) the close of business on April 1st, 2005 or (ii) ninety (90) days
after the Exercise Trigger Date, the Consultant expressly acknowledging that such number of Shares speaks as of
the date of this Agreement and such number of Shares will be adjusted equitably to reflect any subdivision or
combination of the outstanding shares of the Company, including, without limitation, a proportionate reduction to
reflect any reverse stock split, stock dividend, capital reorganization, reclassification, merger, consolidation or
similar event (and such adjustment to include any other bonus or other arrangement provided to other
shareholders or optionholders of the Company, as the case may be).

2.7. The Company shall reimburse Consultant for its reasonable and necessary expenses incurred in connection
with the Services hereunder, provided that, any expense in excess of five hundred (US$500) shall first be
approved in writing by the Company.

2.8. As used in this section 2, the following terms shall have the following meanings:

2.8.1. "Exercise Trigger Date" with respect to Option I means the date which is the twentieth (20th) consecutive
date the NASDAQ Shares have closed for trading at a price equal to or higher than Option Exercise Price I
multiplied by two (2), and with respect to Option II means the date which is the twentieth
(20th) consecutive date on which the NASDAQ Shares have closed for trading at a price equal to or higher than
Option Exercise Price II multiplied by two (2);

2.8.2. "Base Price" equals Euro 1.311, (the average trading price of the Neuer Shares for the twenty trading days
prior to 15.2.2002); and

2.8.3. "Registration Statement" means the Company's Registration Statement on Form F-1, or such other Form
as the Company's counsel may determine is appropriate, filed with the United States Securities and Exchange
Commission.

2.9. To all payments made pursuant to this Agreement, including the issuance of Shares and Stock Options, VAT
in the amount of 17% shall be added.

2.10. Any and all payments made pursuant to this Agreement shall be made by the Company solely upon the
receipt of a legal invoice from the Consultant with respect to each relevant payment.

                                                         3
2.11. Any and all payments made pursuant to this Agreement are gross payments from which withholding taxes
may be withheld provided necessary by law.

2.12. For the avoidance of doubt, the parties acknowledge that compensation paid under this Agreement to the
Consultant shall not be deemed payment of any fees or other amounts owing to the market-makers or any
government agencies, exchange or self-regulatory organizations.

3. Term and Termination.

3.1. This Agreement shall commence at the later of (i) the Effective Date or (ii) the approval of this Agreement by
the Company's Board of Directors, and shall terminate ninety (90) days following the Listing Date (the "Term")
unless sooner terminated by either party as set forth in section 3.2, below.

3.2. This Agreement shall terminate with immediate effect as follows:

3.2.1. The Company may terminate this Agreement without cause for any reason upon thirty (30) days' written
notice to the Consultant;

3.2.2. The Consultant may terminate this Agreement without cause for any reason upon thirty (30) days' written
notice to the Company;

3.2.3. The Company may terminate this Agreement without further action or notice in the event that the
Consultant shall have breached a material term of this Agreement and such breach shall continue without cure for
thirty (30) days following written notice of such breach;

3.2.4. The Consultant may terminate this Agreement without further action or notice in the event that the
Company shall have breached a material term of this Agreement and such breach shall continue without cure for
thirty
(30) days following written notice of such breach;

3.2.5. This Agreement shall terminate without further action or notice if the listing of the NASDAQ Shares on the
NASDAQ Small Cap Market is denied by NASDAQ or any regulatory authority for any reason or if listing on
any other exchange designated by the Company is denied by such exchange or any regulatory authority for any
reason, and in each such case such denial is final and not subject to appeal.

3.3. In the event this Agreement is terminated pursuant to sections 3.2.1 or 3.2.4, above, prior to the Listing
Date, the Company shall be obligated to comply with sections 2.5 and 2.6 in accordance with their respective
terms if the Company completes the listing of the NASDAQ Shares on the NASDAQ Small Cap Market and
the Company elects to use any one of the three market-makers identified by the Consultant pursuant to Section
1.1.2 of this Agreement. In the event this Agreement is terminated pursuant to sections 3.2.1 or 3.2.4, above, on
or after the Listing Date, the Company shall be obligated to comply with sections 2.5 and 2.6 in accordance with
their respective terms.

3.4. In the event this Agreement is terminated pursuant to sections 3.2.2, 3.2.3 or 3.2.5, above, the Company
shall have no further obligation to pay any amount to, or issue any NASDAQ Shares or Option I or Option II to,
the Consultant, and to the extent any NASDAQ Shares or Option I or Option II shall have been issued to the
Consultant prior to such termination, they shall be deemed to be cancelled and forfeited and the Consultant shall
return all evidence thereof to the Company without any further action or notice by the Company.

3.5. In the event the Company elects in its discretion to delay the Project but does not elect to terminate this
Agreement, and thereafter elects in its discretion to proceed with the Project, the Consultant shall, upon such
election to proceed, continue to perform its obligations under and in accordance with this Agreement.

                                                         4
4. Other Covenants, Representations and Warranties.

4.1. The Consultant represents and warrants that the Services, as contemplated by this Agreement, will not
violate, conflict with or infringe upon any other agreement, instrument or document to which he is a party or by
which he is bound, or any other right of any entity, or otherwise give rise to any claim of misappropriation or
unfair competition.

4.2. The Consultant represents and warrants that it shall not represent itself as an agent of the Company, in
general, and in particular shall not represent itself as having the authority to bind the Company in any matter
whatsoever.

4.3. The Company and the Consultant each represents and warrants that each has, respectively, the full right and
authority to enter into this Agreement.

4.4. The Consultant represents, warrants and covenants that it and Haim Nissenson shall comply with all federal,
state and local laws and all rules and regulations of NASDAQ and the NASD in connection with providing
Services hereunder and shall not provide any untrue or misleading information about or relating to the Company
to any person, including, without limitation, the market-makers. The Consultant represents and warrants that it
and Haim Nissenson have all licenses, permits and approvals as may be required and any such laws, rules and
regulations to permit them to perform the Services.

5. Indemnification. Consultant shall indemnify, hold harmless and defend the Company and its parents,
subsidiaries and affiliates and its and their officers, directors, agents and employees and their successors and
assigns (individually and collectively, the "Company Indemnitees") from and against any and all losses, liabilities,
costs, damages and expenses, including, without limitation, reasonable attorneys' fees, with respect to which a
claim, whether or not frivolous, and whether claiming negligence or otherwise, is made by a third party against
any of the Company Indemnitees arising directly out of or in connection with the breach by Consultant of
Sections 4.2, 4.4 and 6 of this Agreement. Upon receipt of a claim indemnified hereunder, the Company
Indemnitee shall give Consultant notice thereof and shall, at no out-of-pocket expense to the Company
Indemnitee, cooperate with the Consultant with respect to the defense of such matter. The Company Indemnitee
shall have the right, without affecting its indemnity hereunder, to participate in the administration, defense or
settlement of any such matter at its own expense and with counsel of its own choosing. The Consultant shall not
settle any claim indemnified hereunder without the consent of the Company Indemnitee unless solely for money
and in no event shall any such settlement be made unless the Company Indemnitee is given a full and
unconditional release in respect of such matter and any related matters.

6. Confidential Information and Intellectual Property.

The Consultant and the Company acknowledge that they have executed and delivered the Mutual Confidentiality
Agreement attached hereto as Exhibit 1, that such Agreement is in full force and effect, that they shall comply with
its terms and that a breach by either party of such Agreement shall be a breach by such party of this Agreement.

7. Relationship of the Parties. The Consultant shall at all times be an independent contractor of the Company and,
as such, will not by reason of this Agreement be eligible to participate in any of the Company's employee benefits.
The Company shall not make deductions or withhold funds from compensation paid under this Agreement either
for the purpose of Social Security or Federal Income Tax; however, the Company may be required by law to file
information returns with the U.S. Internal Revenue Service or other governmental agencies regarding payment to
the Consultant under this Agreement. Nothing contained in this Agreement shall constitute the creation of an
employer-employee relationship between the Consultant and the Company. Nothing in this Agreement shall be
deemed to authorize the Consultant to act as an agent of the Company or to bind or purport to bind the
Company in any matter or manner whatsoever.

                                                          5
8. Governing Law; Dispute Resolution.

8.1. The construction, interpretation and enforcement of the terms, conditions, rights and liabilities set forth in this
Agreement shall be in accordance with the internal laws of the State of Israel, excluding its conflict-of-laws
principles.

8.2. Except as set forth in section 6.4 with respect to the availability of injunctive, any controversy or claim arising
out of or relating to this Agreement or the breach thereof, whether common law or statutory, including, without
limitation, claims asserting violations of the antitrust laws, will be settled exclusively by arbitration in Tel Aviv,
before a single arbitrator of the Institute for Business Arbitration.

8.3. The arbitrators will apply the Rules of the Institute for Business Arbitration and the internal law of the State
of Israel as set forth in paragraph 8.1, except that the arbitrator will not have the power to alter, modify, amend,
add to or subtract from any term or provision of this Agreement, nor to grant injunctive relief, including, without
limitation, interim relief, of any nature. Judgment on the award of the arbitrator may be entered by any court in Tel
Aviv having jurisdiction to do so, and the parties to this Agreement hereby irrevocably consent and submit to the
personal jurisdiction and venue of the Tel Aviv courts. The parties hereby irrevocably waive any and all claims
and defenses either might otherwise have in any such action or proceeding in any of such courts based upon any
alleged lack of personal jurisdiction, improper venue, forum non conveniens or any similar claim or defense.

8.4. The failure or refusal of the Company or the Consultant to submit to arbitration as required by section 8.1
will constitute a material breach of this Agreement. If judicial action is commenced in order to compel arbitration,
and if arbitration is in fact compelled, the party that resisted arbitration will be required to pay to the other party
all costs and expenses, including, without limitation, reasonable attorneys' fees, that they incur in compelling
arbitration. The prevailing party in arbitration shall be entitled to its reasonable attorneys' fees and costs. All other
fees and charges of the Institute of Business Arbitration will be borne as the arbitrator will determine in the award.

9. Entire Agreement. This Agreement, including, without limitation, its recitals, sets forth the entire agreement and
understanding of the parties in respect of the subject matter hereof and supersedes all prior agreements,
arrangements, presentations and understandings relative to the subject matter hereof, whether written or oral,
express or implied. No oral or written statement, representation, warranty or promise made prior to or
contemporaneously with the execution of this Agreement shall be binding upon either party with respect to the
subject matter hereof or shall otherwise affect the enforceability of this Agreement in accordance with its terms.

10. Amendment and Waiver. This Agreement may be amended or modified only by a written instrument
executed by each party hereto. The failure of a party at any time or times to require performance of any provision
hereof shall in no manner affect the party's right at a later time to enforce the same. No waiver by any party of the
breach of any term contained in this Agreement, in any one or more instances, shall be deemed or construed as a
further or continuing waiver of any such breach or of the breach of any other terms of this Agreement. No waiver
shall be effective unless in writing, signed by the party waiving compliance.

                                                           6
11. Notices. All notices required to be made hereunder shall be sent to the respective addresses of the parties set
forth below by certified mail, return receipt requested:

               If to the Company:          P.O. Box 32 Z.H.R Industrial Zone, Rosh Pina 12000,
                                           Israel

               If to the Consultant        11A Hamacabee St., Herzelya 46762, Israel




Service of notices shall be deemed complete upon delivery if hand delivered or upon the expiration of the third
day after the date of mailing. The Company and the Consultant may change their respective addresses for notices
by a notice given in accordance with this section 11.

12. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties hereto. The Consultant may not assign its rights or obligations under this
Agreement in whole or in part without the prior written consent of the Company. Any assignment or purported
assignment by the Consultant without such consent shall be null and void.

13. Headings. Headings inserted in this Agreement are for the convenience of the parties and shall not govern any
conclusion or interpretation of this Agreement or any of its provisions. Plurals shall include the singular and vice
versa.

14. Severability. In case any provision or part thereof in this Agreement shall, for any reason, be held invalid,
illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect any other provision or part
thereof, and this Agreement shall be construed as if such invalid or illegal or unenforceable provision or part
thereof had been reformed so that it would be valid, legal and enforceable to the maximum extent permitted.

15. Miscellaneous. (a) References to paragraphs are to paragraphs in this Agreement and in each case include
references to all subparagraphs under the referenced paragraph. (b) Words denoting the singular tense or person
shall include the plural and vice versa and references to the masculine gender shall, where the context permits,
include the feminine and/or neuter genders and vice versa. The words "including," "includes," and "include," mean
respectively, "including without limitation," includes without limitation" and "included without limitation;" (c) The
obligations of the Company and the Consultant that expressly survive the expiration or termination of this
Agreement, or which, by their nature are intended to survive such expiration or termination, shall so survive in
accordance with their terms or as is required to give effect to such intention, respectively. (d) This Agreement is
the result of negotiation and, accordingly, no presumption or burden of proof will arise with respect to any
ambiguity or question of intent concerning this Agreement favoring or disfavoring any party to this Agreement by
virtue of the authorship of any provision of this Agreement. (e) This Agreement may be signed in counterparts,
each of which shall be deemed an original and all of which shall be deemed one and the same instrument, and
may be delivered by facsimile.

IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement effective on the
Effective Date.

                                       ON TRACK INNOVATIONS LTD.

                                      By: ____________________________
                                                     Name:
                                                 Title: President

                                       DIONYSOS INVESTMENTS LTD.

                                      By: ____________________________
                                                     Name:
                                                 Title: President

                                                            7
I, Haim Nissenson do hereby personally guarantee the fulfillment of any and all undertakings of Dionysos
Investments Ltd. pursuant to the above agreement with On Track Innovations Ltd.


                                               Haim Nissenson

                                            Date: _____________

                                                       8
                                     DIONYSOS INVESTMENTS LTD.
                                    11A HAMACABEE ST., HERZELYA
                                            ISRAEL 46762

                                                 July _____, 2002

On Track Innovations Ltd.
Z.H.R. Industrial Zone
P.O. Box 32
Rosh Pina, 12000 Israel

Ladies and Gentlemen:

This letter will serve as Amendment No. 1 to that certain Consulting Agreement dated March, 2002 (the
"Agreement") between On Track Innovations Ltd. (the "Company") and Dionysos Investments Ltd. Capitalized
terms used herein and not otherwise defined shall have the meanings assigned to them in the Agreement.

The parties agree that the Agreement is hereby amended as follows:

Section 2.6.1 of the Agreement is amended and restated in its entirety as follows:

"2.6.1. Options to acquire 3,500 shares of the Company's ordinary shares at an exercise price equal to $0.1 per
share, such options to expire on July 10, 2007 and such shares to be included in the Company's F-1 Registration
Statement filed with the United States Securities and Exchange Commission;"

Except as otherwise set forth herein, the Agreement shall remain in full force and effect in accordance with its
terms.

Please confirm the foregoing by signing below.

Very truly yours,

                                      DIONYSOS INVESTMENT LTD.

                                        By:_______________________
                                                   Name:
                                                    Title:
AGREED:

ON TRACK INNOVATIONS LTD.

By:__________________________
Name: Oded Bashan
Title: Chairman, President & CEO
Exhibit 10.35

                             BROADBAND CAPITAL MANAGEMENT LLC
                                        805 Third Avenue
                                    New York, New York 10022

                                                  June 18, 2002

On Track Innovations Ltd.
Z.H.R. Industrial Zone
P.O. Box 32
Rosh Pina, 12000 Israel
Attn: Oded Bashan, Chairman, President & CEO

Dear Mr. Bashan:

This letter is to confirm our understanding that Broadband Capital Management LLC ("Broadband Capital") has
been engaged as a non-exclusive financial advisor to On Track Innovations Ltd., its respective successors,
assigns, subsidiaries, parents and affiliates (collectively, the "Company"), with respect to financial advisory and
related matters for the one-year period commencing the date hereof (the "Term"). All services shall be rendered
by Broadband Capital in New York City.

A. Financial Advisory Services

During the Term, Broadband Capital shall provide the Company with such regular and customary financial
advisory services as are reasonably requested by the Company, provided that Broadband Capital shall not be
required to undertake duties not reasonably within the scope of the financial advisory services in which it is
generally engaged. It is understood and acknowledged by the parties that the value of Broadband Capital's
advice is not measurable in a quantitative manner and Broadband Capital shall be obligated to render advice,
upon the request of the Company, in good faith. Broadband Capital's duties may include, but will not necessarily
be limited to advice regarding:

(1) the formation of corporate goals and their implementation;

(2) the financial structure of the Company or its divisions or any programs and projects undertaken by any of the
foregoing;

(3) the Company's financing needs and matters related thereto;

(4) the corporate organization, personnel and selection of needed specialty skills;

(5) introductions to institutions and high net-worth individuals that Broadband determines may be interested in
investing in the Company.
Oded Bashan, Chairman, President & CEO
June 18, 2002

                                                       Page 2

The Company acknowledges that Broadband Capital and its affiliates are in the business of providing financial
advisory services (of all types contemplated by this agreement) to others. Nothing herein contained shall be
construed to limit or restrict Broadband Capital or its affiliates in conducting such business with respect to others
or in rendering such advice to others. The Company further acknowledges and agrees that nothing contained
herein is a commitment by Broadband Capital to provide any market making activities with respect to the
Company's securities or to publish or issue any research coverage or reports.

The Company recognizes and confirms that Broadband Capital, in acting pursuant to this engagement, will be
using information in reports and other information provided by others, including, without limitation, information
provided by or on behalf of the Company, and that Broadband Capital does not assume responsibility for and
may rely, without independent verification, on the accuracy and completeness of any such reports and
information. The Company hereby warrants that any information relating to the Company that is furnished to
Broadband Capital by or on behalf of the Company will be fair, accurate and complete in all material respects
and will not contain any material omissions or misstatements of fact. The Company shall promptly update
Broadband Capital to the extent that there are any material changes or modifications to previously delivered
information concerning the Company. The Company agrees that any information or advice rendered by
Broadband Capital or its representatives in connection with this engagement is for the confidential use of the
Company's Board of Directors only in its evaluation of the matters for which Broadband Capital has been
engaged and, except as otherwise required by law, the Company will not and will not permit any third party to
disclose or otherwise refer to such advice or information in any manner without Broadband Capital's prior written
consent. The name of Broadband Capital will not be quoted or referred to orally or in a writing by the Company
without Broadband Capital's prior written consent, which consent shall not be unreasonably withheld.

In consideration of such financial advisory services and as a material inducement for Broadband Capital to enter
into this Agreement, the Company shall pay Broadband Capital a non-accountable and non-refundable fee of
$16,000 ("Initial Retainer") payable upon execution of this agreement. The Initial Retainer shall cover the first two
months of this Agreement at the rate of $8,000 per month. Thereafter and provided the Company's ordinary
shares are traded on the Nasdaq Market, the Company shall pay Broadband a monthly retainer in the amount of
(i) $8,000 for month 3, (ii) $10,000 per month for months 4-6 and (iii) $5,000 for months 7-12, all of which shall
be payable on the first day of the applicable month during the Term. In addition, as and for additional
consideration and as a material inducement for Broadband to enter into this agreement and provided the
Company's ordinary shares are traded on the Nasdaq Market, the Company agrees to issue to Broadband or its
designee(s), upon execution and delivery of this Agreement, warrants (the "Warrants") to purchase 50,000 of the
Company's ordinary shares at an exercise price equal to $6.66 as to 25,000 shares and $7.99 as to 25,000
shares. The Warrants will be exercisable for a five-year period commencing on the date of issuance and shall
contain such terms and conditions as are satisfactory in form and substance to Broadband, the
Oded Bashan, Chairman, President & CEO
June 18, 2002

                                                         Page 3

Company and their respective counsel, including, without limitation, demand and piggy-back registration rights,
corporate anti-dilution and weighted average price protection and cashless exercise provisions and in that regard,
the Company agrees that the ordinary shares underlying the Warrants will be included in the current F-1
Registration Statement that the Company is undertaking to file with the Securities and Exchange Commission. In
addition, the Company will also issue to Broadband Capital options ("Options") to purchase 25,000 of the
Company's ordinary shares at an exercise price of $9.99 per share pursuant to the Company's Stock Option
Plan. The Company agrees that the ordinary shares underlying the Options will be included in an Form S-8
Registration Statement (or equivalent form) that the Company intends to file with the Securities and Exchange
Commission promptly following the effectiveness of its F-1 Registration Statement referred to above. The share
amounts underlying the Warrants and Options are giving effect to the consolidation of the Company's share
capital and issuance of Bonus Shares as described in its F-1 Registration Statement ("collectively the
"Recapitalization Transactions"). The foregoing compensation shall be in addition to any other compensation and
reimbursement of expenses described herein.

B. Acquisition Transaction

For purposes of this agreement, the term "Acquisition Transaction" means (i) any merger, consolidation,
reorganization or other business combination pursuant to which the businesses of a third party are combined with
that of the Company, (ii) the acquisition, directly or indirectly, by the Company of all or a substantial portion of
the assets or common equity of a third party by way of negotiated purchase or otherwise or (iii) the acquisition,
directly or indirectly, by a third party of all or a substantial portion of the assets or common equity of the
Company by way of negotiated purchase or otherwise.

In connection with a proposed Acquisition Transaction, Broadband Capital's advisory services will include the
following: (i) assistance in the evaluation of a third party from a financial point of view, (ii) assistance and advice
with respect to the form and structure of the Acquisition Transaction and the financing thereof, (iii) conducting
discussions and negotiations regarding an Acquisition Transaction and (iv) providing other related advice and
assistance as the Company may reasonably request in connection with an Acquisition Transaction.

For purpose of this agreement, "Consideration" means the aggregate value, whether in cash, securities,
assumption (or purchase subject to) of debt or liabilities (including, without limitation, indebtedness for borrowed
money, pension liabilities and guarantees) or other property, obligations or services, paid or payable directly or
indirectly (in escrow or otherwise) or otherwise assumed in connection with an Acquisition Transaction. The
value of such Consideration shall be determined as follows:

(a) the value of securities, liabilities, obligations, property and services shall be the fair market value as we shall
mutually agree upon at the date of the closing of the Acquisition Transaction; and
Oded Bashan, Chairman, President & CEO
June 18, 2002

                                                       Page 4

(b) the value of indebtedness, including indebtedness assumed, shall be the face amount.

If the Consideration payable in an Acquisition Transaction includes contingent payments to be calculated by
reference to uncertain future occurrences, such as future financial or business performance, then any fees of
Broadband Capital relating to such Consideration shall be payable upon receipt of such Consideration.

In the event that an Acquisition Transaction is closed, but the consideration is receivable in installments, subject to
contingencies or placed in escrow, Broadband Capital's fee shall be subject to the same payment schedule,
contingencies or escrow, as the case may be, and Broadband Capital will be paid a portion of its fee at the
closing and upon the payment to the Company of each such installment, whether out of escrow or otherwise.

In connection with our services, you agree that if, during the period Broadband Capital is retained by you or,
within one year thereafter, an Acquisition Transaction is consummated with a third party introduced directly or
indirectly by Broadband Capital, or the Company enters into a definitive agreement with a third party introduced
directly or indirectly by Broadband Capital which at any time thereafter results in an Acquisition Transaction, you
will pay Broadband Capital a transaction fee equal to 5% of the first $1 million of Consideration, 4% of the next
$1 million of Consideration, 3% of the next $1 million of Consideration, 2% of the next $1 million of
Consideration and 1% of any additional Consideration; provided, however, if the Company (directly or through a
third party) procures the other party to an Acquisition Transaction without the direct or indirect introduction by
Broadband Capital, the Company shall pay Broadband Capital a fee equal to 1% of Consideration, with a
minimum payment of $100,000, but only in the event the Company requests that Broadband Capital provides
advisory services to the Company in connection with the Acquisition Transaction.

C. Corporate Finance

For purposes of this agreement, the term "Financing Transaction" means a private placement, public offering,
syndication or other sale of equity or debt securities of the Company or other on-balance or off-balance sheet
corporate finance transaction of the Company.

The Company hereby grants to Broadband Capital a right of first refusal with respect to any Financing
Transaction during the Term, which right shall remain unaffected by any prior early termination of this agreement.
It is understood that if such a proposed financing is offered to Broadband Capital, Broadband Capital shall have
twenty (20) days in which to determine whether or not to accept such offer and, if Broadband Capital refuses,
and provided such a Financing Transaction is consummated (a) with another underwriter or placement agent
upon the same terms and conditions as those afforded to Broadband Capital and (b) within six months after the
end of the aforesaid twenty (20) day period, this right of first refusal shall thereafter be forfeited and terminated;
Oded Bashan, Chairman, President & CEO
June 18, 2002

                                                       Page 5

provided however, if the financing is not consummated under the conditions of clauses (a) and (b) above, then the
right of first refusal shall once again be reinstated under the same terms and conditions set forth in this paragraph.
Notwithstanding the foregoing, the foregoing right of first refusal shall not apply to (1) Financing Transactions in
which (i) a bulge bracket investment bank (as such term is commonly understood in the investment banking
community) is engaged by the Company to manage the transaction and (ii) a strategic partner makes a debt or
equity investment in the Company and (2) the current transactions covered by the F-1 currently undertaken by
the Company. In addition, the foregoing right of first refusal shall not apply to Financing Transactions in which
Rockwood, Inc. is engaged to manage the transaction (a "Rockwood Financing Transaction"); provided however
that the Company shall not engage in or consummate any Rockwood Financing Transaction unless Broadband
Capital is provided the opportunity to have a 50% participation in said financing.

D. Termination.

This agreement may be terminated by either party at anytime following the six month anniversary of this
Agreement upon thirty (30) days prior written notice to the other party. In addition, the indemnification,
contribution, reimbursement of expenses and "tail" obligations of the Company and Broadband shall survive such
termination and all previously paid fees and securities issued shall be retained by Broadband Capital on a non-
accountable basis.

E. General

In addition to all other charges payable to Broadband Capital as per the terms hereof, the Company agrees to
reimburse Broadband Capital, upon requests made from time to time, for all of its reasonable, out-of-pocket
expenses incurred in connection with its activities under this Agreement upon presentation of receipts therefor;
provided that single or series of expenses of more than $1,000 must be approved by the Company before they
are incurred. In addition, no fee payable by the Company to any agent, lender or investor shall reduce or
otherwise affect any fee payable by the Company to Broadband Capital hereunder unless such agent, lender or
investor was engaged by Broadband Capital without the prior approval of the Company, in which case any fee
payable to any such person shall be the responsibility of Broadband Capital ("Broadband Fees").

The Company agrees to indemnify Broadband Capital and related persons in accordance with the indemnification
letter annexed hereto as Schedule A, the provisions of which are incorporated herein in their entirety, and shall
survive the termination, expiration or supersession of this Agreement. Broadband Capital shall not be responsible
for any expense of the Company or others for any charges or claims related to the proposed transactions
hereunder or otherwise if the transactions contemplated by this Agreement are not consummated, except for
Broadband Fees.
Oded Bashan, Chairman, President & CEO
June 18, 2002

                                                       Page 6

This Agreement, including Schedule A, constitutes the entire understanding of the parties with respect to the
subject matter hereof and may not be altered or amended except in a writing signed by both parties.

The Company expressly acknowledges that the execution of this Agreement does not constitute a commitment by
Broadband Capital to consummate any transaction contemplated hereunder and does not ensure the successful
placement of securities of the Company or the success of Broadband Capital with respect to securing any
financing on behalf of the Company. Nothing contained in this agreement shall be construed to place Broadband
Capital and the Company in the relationship of partners or joint venturers. Neither Broadband Capital nor the
Company shall represent itself as the agent or legal representative of the other for any purpose whatsoever nor
shall either have the power to obligate or bind the other in any manner whatsoever. The Company's engagement
of Broadband Capital is not intended to confer rights upon any person not a party hereto (including shareholders,
directors, officers, employees or creditors of the Company or of Broadband) as against Broadband Capital or
the Company or their respective affiliates, or their respective directors, officers, employees or agents, successors
or assigns. Broadband Capital, in performing its services hereunder, shall at all times be an independent
contractor. No promises or representations have been made except as expressly set forth in this agreement and
the parties have not relied on any promises or representations except as expressly set forth in this agreement.
Nothing contained herein should be construed as creating any fiduciary duties between the parties.

This Agreement shall be deemed to have been made and delivered in New York City and shall be governed as to
validity, interpretation, construction, effect and in all other respects by the internal laws of the State of New York
without regard to principles of conflicts of law thereof . All controversies which may arise between the parties
concerning this Agreement shall be exclusively determined by arbitration by, and in accordance with, the then
existing Code of Arbitration of the National Association of Securities Dealers, Inc. ("NASD"). Hearings with
regard to such dispute shall be held exclusively at the offices of the NASD in the City of New York and judgment
upon any award rendered pursuant thereto may be entered in any court of competent jurisdiction. Any award
rendered pursuant to the terms and conditions set forth herein shall be final and binding. The parties are waiving
their right to seek remedies in court, including the right to a jury trial. Each party waives, and each party agrees
not to assert in any such proceeding, in each case, to the fullest extent permitted by applicable law that: (a) such
party is not personally subject to the jurisdiction of such arbitration; (b) such party is immune from any legal
process (whether through service or notice, attachment prior to judgment, attachment in the aid of execution,
execution or otherwise) with respect to it or its property (c) any proceeding is brought in an inconvenient forum;
(d) the venue of any such proceeding is improper; or (e) this agreement may not be enforced in or by any such
arbitration.
Oded Bashan, Chairman, President & CEO
June 18, 2002

                                                       Page 7

The parties acknowledge and agree that with respect to phrases contained herein such as "as a results of our
efforts," "introduced to the Company by Broadband" or similar language, such phrases are intended to include
any person or entity, directly or indirectly introduced to the Company by the undersigned. Thus, to the extent that
the Company consummates a particular transaction with any person or entity, whose introduction to the
Company can be traced back, directly or indirectly, to a person or entity who was originally introduced to the
Company by Broadband, Broadband is entitled to the compensation described herein.

Neither the execution and delivery of this Agreement by each party nor the consummation of the transactions
contemplated hereby will, directly or indirectly, with or without the giving of notice or lapse of time, or both: (i)
violate any provisions of the Certificate of Incorporation or By-laws or other organizational documents, as the
case may be, of such party; or (ii) violate, or be in conflict with, or constitute a default under, any agreement,
lease, mortgage, debt or obligation of such party or require the payment, any pre-payment or other penalty with
respect thereto. The Company also represents that (i) the Recapitalization Transactions have been approved by
the Board of Directors of the Company and the requisite percentage of its Shareholders and
(ii) the Company has the authority to issue stock options pursuant its plan to a financial advisor such as
Broadband Capital. Such party has all requisite power and authority to enter into and perform its obligations
under this Agreement and, in the case of the Company, to issue andto deliver the Warrants and Options. This
Agreement has been duly executed and delivered and constitutes valid and binding obligations of each party,
enforceable against each party in accordance its terms.

The rights and obligations of the parties under this Agreement may not be assigned by either party without the
prior written consent of the other party and any other purported assignment shall be null and void. If any
provision of this Agreement is determined to be invalid or unenforceable in any respect, then such determination
will not affect such provision in any other respect or any other provision of this Agreement, which will remain in
full force and effect.
Oded Bashan, Chairman, President & CEO
June 18, 2002

                                                       Page 8

If the foregoing correctly sets forth the terms of our agreement, kindly so indicate by signing and returning the
enclosed copy of this Agreement.

                              BROADBAND CAPITAL MANAGEMENT LLC

                                        By: ________________________
                                              Name: Michael Rapp
                                                 Title: Chairman

                                       ACCEPTED AND AGREED TO
                                           this day of June 2002:

                                      ON TRACK INNOVATIONS LTD.

                                       By: _________________________

Name: Oded Bashan
Title: Chairman, President & CEO
                                                   SCHEDULE A

                                              INDEMNIFICATION

Recognizing that matters of the type contemplated in this engagement sometimes result in litigation and that
Broadband Capital's role is advisory, the Company agrees to indemnify and hold harmless Broadband Capital, its
affiliates and their respective officers, directors, employees, agents and controlling persons (collectively, the
"Indemnified Parties"), from and against any losses, claims, damages and liabilities, joint or several, related to or
arising in any manner out of any transaction, financing, proposal or any other matter (collectively, the "Matters")
contemplated by the engagement of Broadband Capital hereunder, and will promptly reimburse the Indemnified
Parties for all expenses (including fees and expenses of legal counsel) as incurred in connection with the
investigation of, preparation for or defense of any pending or threatened claim related to or arising in any manner
out of any Matter contemplated by the engagement of Broadband Capital hereunder, or any action or proceeding
arising therefrom (collectively, "Proceedings"), whether or not such Indemnified Party is a formal party to any
such Proceeding. Notwithstanding the foregoing, the Company shall not be liable in respect of any losses, claims,
damages, liabilities or expenses that a court of competent jurisdiction shall have determined by final judgment
resulted solely from the gross negligence or willful misconduct of an Indemnified Party. The Company further
agrees that it will not, without the prior written consent of Broadband Capital, settle, compromise or consent to
the entry of any judgment in any pending or threatened Proceeding in respect of which indemnification may be
sought hereunder (whether or not Broadband Capital or any Indemnified Party is an actual or potential party to
such Proceeding), unless such settlement, compromise or consent includes an unconditional release of Broadband
Capital and each other Indemnified Party hereunder from all liability arising out of such Proceeding.

The Company agrees that if any indemnification or reimbursement sought pursuant to this letter were for any
reason not to be available to any Indemnified Party or insufficient to hold it harmless as and to the extent
contemplated by this letter, then the Company shall contribute to the amount paid or payable by such Indemnified
Party in respect of losses, claims, damages and liabilities in such proportion as is appropriate to reflect the relative
benefits to the Company and its stockholders on the one hand, and Broadband Capital on the other, in
connection with the Matters to which such indemnification or reimbursement relates or, if such allocation is not
permitted by applicable law, not only such relative benefits but also the relative faults of such parties to the
Company and/or its stockholders and to Broadband Capital with respect to Broadband Capital's engagement
shall be deemed to be in the same proportion as (i) the total value paid or received or to be paid or received by
the Company and/or its stockholders pursuant to the Matters (whether or not consummated) for which
Broadband Capital is engaged to render financial advisory services bears to (ii) the fees paid to Broadband
Capital in connection with such engagement. In no event shall the Indemnified Parties contribute or otherwise be
liable for an amount in excess of the aggregate amount of fees actually received by Broadband Capital pursuant
to such engagement (excluding amounts received by Broadband Capital as reimbursement of expenses).
The Company further agrees that no Indemnified Party shall have any liability (whether direct or indirect, in
contract or tort or otherwise) to the Company for or in connection with Broadband Capital's engagement
hereunder except for losses, claims, damages, liabilities or expenses that a court of competent jurisdiction shall
have determined by final judgment resulted solely from the gross negligence or willful misconduct of such
Indemnified Party. The indemnity, reimbursement and contribution obligations of the Company shall be in addition
to any liability which the Company may otherwise have and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company or an Indemnified Party.

The indemnity, reimbursement, contribution provisions set forth herein shall remain operative and in full force and
effect regardless of (i) any withdrawal, termination or consummation of or failure to initiate or consummate any
Matter referred to herein, (ii) any investigation made by or on behalf of any party hereto or any person controlling
(within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities
Exchange Act of 1934, as amended) any party hereto, (iii) any termination or the completion or expiration of this
letter or Broadband Capital's engagement and
(iv) whether or not Broadband Capital shall, or shall not be called upon to render any formal or informal advice in
the course of such engagement.
                             BROADBAND CAPITAL MANAGEMENT LLC
                                        805 Third Avenue
                                    New York, New York 10022

                                                    July 3, 2002

On Track Innovations Ltd.
Z.H.R. Industrial Zone
P.O. Box 32
Rosh Pina, 12000 Israel
Attn: Oded Bashan, Chairman, President & CEO

Dear Mr. Bashan:

This letter will serve as Amendment No. 1 to that certain letter agreement dated June 18, 2002 ("Letter
Agreement") between On Track Innovations Ltd. (the "Company") and Broadband Capital Management LLC
("Broadband"). Capitalized terms used herein not otherwise defined shall have the meanings ascribed to them in
the Letter Agreement.

The parties hereto agree that the Letter Agreement is hereby amended as follows:

The fourth paragraph in subsection A. Financial Advisory Services is hereby deleted in its entirety and in its place
and stead the following is inserted:

"In consideration of such financial advisory services and as a material inducement for Broadband Capital to enter
into this Agreement, the Company shall pay Broadband Capital a non-accountable and non-refundable fee of
$16,000 ("Initial Retainer") payable upon execution of this agreement. The Initial Retainer shall cover the first two
months of this Agreement at the rate of $8,000 per month. Thereafter and provided the Company's ordinary
shares are traded on the Nasdaq Market, the Company shall pay Broadband a monthly retainer in the amount of
(i) $8,000 for month 3, (ii) $10,000 per month for months 4-6 and (iii) $5,000 for months 7-12, all of which shall
be payable on the first day of the applicable month during the Term. In addition, as and for consideration for
rendering merger and acquisition related advisory services (which shall include (i) assistance in the evaluation of a
third party from a financial point of view, (ii) assistance and advice with respect to the form and structure of
potential acquisition transactions and the financing thereto), at such time as the Company's ordinary shares are
traded on the Nasdaq Market, the Company agrees to promptly issue to Broadband or its designee warrants
(the "M&A Warrants") to purchase 25,000 of the Company's ordinary shares at an exercise price equal to the
US dollar equivalent of NIS 0.1 per share at the date of issuance of the M&A Warrants. In addition, as and for
additional consideration and as a material inducement for Broadband to enter into this agreement, at such time the
Company's ordinary shares are traded on the Nasdaq Market, the Company agrees to promptly issue to
Broadband or its designee(s) warrants (the "Advisory Warrants"; the M&A Warrants and the Advisory Warrants
are collectively referred to as the "Warrants") to purchase 75,000 of the Company's ordinary shares at an
exercise price equal to $6.66 as to 25,000 shares and $7.99 as to 25,000 shares and $9.99 as
to 25,000 shares. The Warrants will be exercisable for a five-year period commencing on the date of issuance
and shall contain such terms and conditions as are satisfactory in form and substance to Broadband, the
Company and their respective counsel, including, without limitation, demand and piggy-back registration rights,
corporate anti-dilution and weighted average price protection and cashless exercise provisions and in that regard,
the Company agrees that the ordinary shares underlying the Warrants will be included in the current F-1
Registration Statement that the Company has filed with the Securities and Exchange Commission. The share
amounts underlying the Warrants are giving effect to the consolidation of the Company's share capital as
described in its F-1 Registration Statement (collectively the "Recapitalization Transactions"). The foregoing
compensation shall be in addition to any other compensation and reimbursement of expenses described herein."

Except as otherwise set forth herein, the Letter Agreement shall remain in full force and effect.

Please confirm your agreement with this Amendment by signing in the space provided below.

                             BROADBAND CAPITAL MANAGEMENT LLC

                                        By: ________________________
                                              Name: Michael Rapp
                                                 Title: Chairman

                                       ACCEPTED AND AGREED TO
                                           this day of July 2002:

                                      ON TRACK INNOVATIONS LTD.

By: _________________________
Name: Oded Bashan
Title: Chairman, President & CEO

Date: __________________
Exhibit 10.36

                                                  May 14, 2002

Mr. Oded Bashan
Chairman, President and CEO
On Track Innovations Ltd.
Z.H.R Industrial Zone
Rosh Pina, Israel 12000

Dear Sirs:

This will confirm the understanding and agreement (the "Agreement") between Rockwood, Inc. ("Rockwood")
and On Track Innovations, LTD ("OTI" or "the Company") as follows:

1. The Company hereby engages Rockwood as the Company's financial advisor with respect to the Company's
continuing review of strategic and financial planning matters.

2. Rockwood hereby accepts the engagement and in that connection agrees to:

(a) undertake, in consultation with the Company, a study and analysis of the business, operations, financial
condition and prospects of the Company;

(b) review with the Company its financial plan and analyze its strategic plans and business alternatives;

(c) advise, structure and assist the Company with regard to the listing of its shares on a United States exchange

(d) be available to meet with the Company's Board of Directors to discuss strategic alternatives and their financial
implications

3. In connection with Rockwood's engagement, the Company will furnish Rockwood with any reasonable
information concerning the Company which Rockwood reasonably deems appropriate and will provide
Rockwood with reasonable access to the Company's officers, directors, accountants, counsel and other advisors.
The Company represents and warrants to Rockwood that all such information concerning the Company will be
true and accurate in all material respects and will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein not misleading in light of the circumstances
under which such statements are made. In addition, Rockwood shall be kept fully informed of any events which
might have a material effect on the financial condition of the Company. The Company acknowledges and agrees
that Rockwood will be using and relying upon such information supplied by the Company and its officers, agents
and others and any other publicly available information concerning the Company without any independent
investigation or verification thereof or independent appraisal by Rockwood of the Company or its business
assets. If, in Rockwood's opinion after completion of its due diligence process, the condition of the Company,
financial or otherwise, and its prospects are not substantially as represented or do not fulfill Rockwood's
expectations, Rockwood shall have the sole discretion to review and determine its continued interest in the
Agreement. The Company further acknowledges and agrees that neither this Agreement nor any actions taken by
Rockwood pursuant to it shall obligate Rockwood to provide or obtain financing for the Company. Any such
agreement shall only be contained in a separate written agreement executed by the Company and Rockwood.
                                                 June 21, 2002

                                                     Page 2

4. As compensation and in consideration for the services to be rendered by Rockwood hereunder and such other
services to be provided by Rockwood at the request of the Company, the Company shall pay to Rockwood as
follows:

(a) a six month retainer fee of (i) $37,500 in cash, payable as follows: $12,500 upon the execution of this
agreement, $12,500 upon commencement of trading on a U.S. exchange; $12,500 a month after commencement
of trading on a U.S. exchange and
(ii) 6,000 registered and freely traded shares of the company's stock to be issued one day following the
commencement of trading on a U.S. exchange

(b) 50,000 five-year warrants to purchase common shares of OTI at exercise prices listed as follows: 16,000 at
an exercise price equal to the volume weighted average closing bid price of the OTI shares for the first five
trading days on a U.S. exchange (Volume Weighted Average Price "WVAP"), 17,000 at exercise price of 120%
WVAP and 17,000 at an exercise price of 150% of WVAP (with customary registration, cashless exercise and
price protection and anti-dilution rights), all 50,000 to be granted within 10 business days following the fifth
trading day of the OTI shares on a U.S. exchange. OTI may demand exercise of the warrants by Rockwood
upon 30 days prior written notice, if requested by the lead underwriter of a bona fide follow-on offering of OTI's
common stock and the warrants are in the money,

(c) this Agreement shall be renewable at the option of both the Company and Rockwood on a monthly basis for
a fee of $10,000 per month, payable up front no later than the first day of each monthly period for which this
Agreement is extended.

5. The Company agrees to reimburse Rockwood from time to time upon request and upon receipt of appropriate
invoices therefor, for all reasonable out of pocket expenses incurred by Rockwood in connection with this
engagement up to the amount of $20,000, provided, however, that Rockwood shall obtain prior written approval
for any expenses in excess of $2,000.

6. Since Rockwood will be acting on behalf of the Company in connection with this engagement, the Company
agrees to indemnify Rockwood as set forth in a separate letter agreement, dated the date hereof, between
Rockwood and the Company.
                                                   June 21, 2002

                                                       Page 3

7. The Company agrees that Rockwood has the right to place advertisements in financial and other newspapers
and journals at its own expense describing their services to the Company hereunder.

8. Subject to the provisions of paragraphs 3 through 7 and 9 through 10 which shall survive any termination of
this Agreement, either party may terminate Rockwood's engagement hereunder at any time, with or without
cause, by giving the other party at least 30 days prior written notice. However, should Rockwood terminate the
engagement prior to the expiration of the initial three-month period then the retainer fee owed as per paragraph 4
(a) would be pro-rated to the actual period of engagement and no warrants as per paragraph 4(b) would be
owed to Rockwood.

9. The benefits of this Agreement shall, together with the separate indemnity letter, inure to the benefit of
respective successors and assigns of the parties hereto and of the indemnified parties hereunder and their
successors and assigns and representatives, and the obligations and liabilities assumed in this Agreement by the
parties hereto shall be binding upon their respective successors and assigns.

10. This Agreement may not be amended or modified except in writing and shall be governed by and construed
in accordance with the laws of the State of New York, without regard to principles of conflicts of laws.

We are delighted to accept this engagement and look forward to working with you on this assignment. Please
confirm that the foregoing correctly sets forth our agreement by signing the enclosed duplicate of this letter in the
space provided and returning it, whereupon this letter shall constitute a binding agreement as of the date first
above written.

ROCKWOOD, INC.

By:__________________________________
David Fuchs
Managing Director, Investment Banking

AGREED:

On Track Innovations Ltd

By:__________________________________
Oded Bashan
Chairman, President and CEO
                                            ROCKWOOD, INC.
                                        305 Madison Avenue, Suite 2544
                                            New York, NY 10165

                                                  July ___, 2002

On Track Innovations Ltd.
Z.H.R. Industrial Zone
P.O. Box 32
Rosh Pina, 12000 Israel

Ladies and Gentlemen:

This letter will serve as Amendment No. 1 to that certain letter agreement dated May 14, 2002 (the "Letter
Agreement") between Rockwood, Inc. ("Rockwood") and On Track Innovations Ltd. (the "Company").
Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in the Letter
Agreement.

The parties agree that the Letter Agreement is hereby amended as follows:

Section 4(a) of the Letter Agreement is amended and restated in its entirety as follows:

"(a) a six month retainer fee of (i) $37,500 in cash, payable as follows: $12,500 upon the execution of this
agreement; $12,500 upon commencement of trading on a U.S. exchange; $12,500 on a month after
commencement of trading on a U.S. exchange and (ii) options to acquire 6,000 shares of the Company's
ordinary shares at an exercise price equal to $0.1 per share, such options to expire on July 10, 2007 and such
shares to be included in the Company's F-1 Registration Statement filed with the United States Securities and
Exchange Commission;"

Except as otherwise set forth herein, the Letter Agreement shall remain in full force and effect in accordance with
its terms.

Please confirm the foregoing by signing below.

Very truly yours,

                                              ROCKWOOD, INC.

                                        By:_______________________
                                                   Name:
                                                    Title:
AGREED:

ON TRACK INNOVATIONS LTD.

By:__________________________
Name: Oded Bashan
Title: Chairman, President & CEO
EXHIBIT 10.37

[ Letterhead of Kost Forer & Gabbay, member of Ernst & Young International ]

                                                   July 4, 2001

Mr. Ya'acov Iluz
Income Tax Commission, Deductions Department 5 Canfei Nesharim St.
Jerusalem

Dear Sir,

Re: On Track Innovations Ltd., Public Co. 520042862, deductions file 904071594 Application to approve a
trustee for an option allotment plan pursuant to Section 102 of the Income Tax Ordinance

1. The Company intends to allot options to key employees of the Company, pursuant to Section 102 of the
Income Tax Ordinance and the rules promulgated thereunder, in order to motivate such employees and improve
the Company's achievements.

2. The trustee for this transaction will be CPA Shimon Greenberg, I.D. 030512008 of Kost Forer & Gabbay,
deductions file 930007307.

3. Each option entitles the holder thereof to buy one fully paid-up ordinary share of the Company (subject to
adjustments), in consideration for payment in cash at the time of exercise.

4. Attached to this application please find Annexes B and C pursuant to the said rules, signed by the relevant
entities. The Company is aware of the other requirements under the said rules and undertakes to adopt them in
full.

Your prompt attention to this application is appreciated.

Sincerely 1,

Kost Forer & Gabbay
Certified Public Accountants

            Encl.:   Annex B -      Deed of trust to be signed after approval of the trustee
                     Annex C -      Form of notice of the performance of an Entitling Allotment

            ------------------------------




1 Translator's note: The letter is not signed.
                                                       Annex B
                                                      (Section 3)

                                                   Deed of Trust

                                  Signed in Tel Aviv on _____________, 2001

Between: CPA Shimon Greenberg, I.D. 030512008 (hereinafter: the "Trustee"),

                                of the first part;

                     And:       On Track Innovations Ltd. (hereinafter: the "Company")

                                of the second part;




Whereas on January 2, 2001, the Trustee was approved by the Income Tax Commissioner, by virtue of the
authority vested in him in Section 102 of the Income Tax Ordinance (hereinafter: the "Ordinance"), as trustee for
the employee option allotment plan adopted by On Track Innovations Ltd.; and

Whereas on ____________, the Company adopted a plan for the allotment of options exercisable into
Company shares, as defined in Section 102 of the Ordinance (hereinafter: the "Plan"), to the entitled employees;
and

Whereas under the Plan, the Company shall allot options or shares (hereinafter:
"Shares") to the entitled employees in an Entitling Allotment, as defined in the Income Tax Rules (Tax Benefits in
the Allotment of Shares to Employees), 5749-1989 (hereinafter: "Entitling Allotment") (hereinafter: the "Rules");
and

Whereas under the Plan, all the options in the Entitling Allotment shall be allotted to the Trustee, to be held in trust
by him as provided in the Rules, the Plan, and this deed of trust,
                                                          2

Therefore, the parties have agreed as follows

1. The preamble to this deed of trust, the Rules and the special conditions to be fixed by the Commissioner
regarding the allotment, constitute an integral part of this deed of trust, and in any event of discrepancy between
the terms of the Plan and this deed of trust, the terms of the Plan shall prevail. Consequently, the parties
unconditionally assume the terms of the Plan upon themselves.

2. Under the Plan, the options and/or Shares shall not be allotted to the entitled employees, but shall be allotted in
the Trustee's name and be held by him throughout the entire term thereof, which shall be no shorter than 24
months (hereinafter: the "Lock-Up Period"). The Trustee shall further hold the exercise shares resulting from the
options, until the sale or transfer thereof to the entitled employee, whichever is the earlier, as specified below. The
Trustee shall further hold the options and the shares resulting from the exercise thereof, pursuant to the lock-up
provisions in the TASE directives.

3. Options may not be transferred in any form or manner (including to another employee); within this framework,
they cannot be assigned, pledged, attached or otherwise encumbered voluntarily, except for a transfer due to
death, prior to the expiration of the Lock-Up Period or before the tax due or 30% of the consideration as set out
in Section 4 below shall have been paid, and before the employee shall have repaid the loan received by him, if
any, to purchase the exercise shares under the Plan, and all whichever is the later; the exercise shares to be
allotted for the options may not be transferred, assigned, pledged, attached or otherwise encumbered voluntarily,
and no proxy or deed of transfer, either with immediate or future effect, shall be given therefor, with the exception
of a transfer under a will or by law.

Insofar as options are transferred under a will or by law as aforesaid, the provisions of Section 102 and the
provisions of the Rules shall apply to the employee's heirs or transferees.

4. Starting at the expiration of the Lock-Up Period, each employee shall be entitled, at any time, to require the
Trustee to transfer the options to which he is entitled in his name and/or to receive the exercise shares resulting
from the exercise of the options or to order the Trustee to sell the same; provided, however, that the Trustee shall
not transfer the options and/or exercise shares in the name of the employee and/or as ordered by him, before the
tax due under Section 102(c) of the Ordinance and the Rules (hereinafter: the "Tax Due") is paid, and the Trustee
has confirmation thereof from the Assessing Officer, or before the Trustee transfers to the Assessing Officer 30%
of the consideration on account of the Tax Due, or a different rate determined by the Assessing Officer, and
before the Company confirms to the Trustee that the entitled employee repaid the loan given to him to buy the
exercise shares under the Plan, if any.
                                                          3

5. Without derogating from the aforesaid, the Trustee shall be given irrevocable instructions by the entitled
employees, whereby:

5.1 From any sum received in consideration for the sale of the exercise shares, in whole or in part, prior to the
payment of the tax liability due thereon and/or prior to repayment of the loan by them, the Trustee shall transfer to
the Assessing Officer the amount of the tax payable under Section 102 of the Income Tax Ordinance, and prior
to any other transfer, the Trustee shall pay the balance of the entitled employee's debt, as the case may be, for the
loan as determined by the Company.

5.2 In the event that the Company shall notify the Trustee that the employee shall not have repaid the loan, in
whole or in part, on schedule as per the loan agreement, the Trustee shall sell the exercise shares held by him, in
whole or in part, and from the consideration received therefor, shall transfer to the Assessing Officer the tax
payable under Section 102 of the Income Tax Ordinance, and shall repay the balance of the employee's debt to
the Company for the loan, as determined by the Company.

5.3 The balance of the consideration, if any, shall be transferred to the entitled employee.

6. The employee shall be entitled to instruct the Trustee to exercise the options as provided in the Plan. The
exercise shares shall be allotted to the Trustee in accordance with Section 2 above, and the provisions of this
deed of trust shall apply thereto. The Lock-Up Period shall include the period in which the options shall have
been held by the Trustee.

7. In the event that stock dividends are distributed due to the exercise shares for an employee within an Entitling
Allotment, the stock dividends shall be transferred by the Company to the Trustee, and the Trustee's
undertakings under this agreement shall apply, mutatis mutandis 2, also to the stock dividend.

8. The Company undertakes to the Trustee not to undertake in any form or manner to allot options to employees
in an Entitling Allotment, without receiving, prior to the allotment, confirmation from the employee whereby he
undertakes to the Assessing Officer not to transfer the options in a transfer subject to a tax exemption, nor to
claim a tax exemption under Sections 97(a) and (b) or 104 of the Ordinance, or within the framework of an
exemption for the sale of shares in the merger of corporations for the transfer of the options, before payment of
the Tax Due.


2 Translator's note: The original says "respectively", but it appears from the context that "mutatis mutandis" was
the intended meaning.
                                                         4

9. The condition for this arrangement with regard to any given employee shall be his consent in writing to the
provisions of this agreement, including the rendering of irrevocable instructions by him as provided in Section 5
above.

10. The Trustee shall bear no liability, and shall be indemnified by the Employee and/or the Company for any
expense or loss incurred by him due to all the payments made by him, including payment for non-deduction of
withholding tax in connection with the grant of an option, the exercise thereof, the share allotment, the sale of
shares in the employee's name, the payment of dividends, etc., provided that the Trustee shall have acted
reasonably in such matter.

11. The Trustee shall not be liable to the employee and/or any third party (including, but without derogating from
the generality of the aforesaid, the income tax authorities and any other governmental or administrative authority),
for any act taken and/or to be taken with regard to this Plan and anything connected therewith or resulting
therefrom. The employee and/or the Company undertake to indemnify the Trustee for such liability and/or in
connection with any claim and/or demand by any entity, including the tax authorities, in connection with this Plan,
provided that the Trustee shall have acted reasonably in such matter.

In witness whereof, the parties have hereto set their hands:

(-) (-) [ Stamp of On Track Innovations Ltd. ]

The Trustee The Company
                                                                             Annex C
                                                                           (Section 4)

                               Z'fat Assessing Officer
                               99 Hapalmach St.
                               Z'fat




Dear Sir,

Re: Notice of Performance of an Entitling Allotment Pursuant to the Income Tax Rules (Tax Benefits in the
Allotment of Shares to Employees), 5749-1989


                                              (hereinafter: the "Rules")

1. Pursuant to Section 3 of the Rules, we hereby notify you that On Track Innovations Ltd. (hereinafter: the
"Company") has decided to adopt a stock plan as defined in Section 102 of the Income Tax Ordinance and in
accordance with the Rules, within which options shall be allotted in an Entitling Allotment, as defined in the Rules.

2. The date of allotment of the options under the Plan will be no earlier than 30 days after the Company and the
Trustee's notice to the Assessing Officer of the Entitling Allotment.

3. CPA Shimon Greenberg of Kost Forer & Gabbay, Certified Public Accountants, will be the trustee for the
performance of the Plan (hereinafter: the "Trustee"). The Trustee's appointment was approved on January 2,
2001 by the Income Tax Commissioner pursuant the authority vested in him in Section 102 of the Ordinance.

4. (a) In accordance with Section 4(b) of the Rules, the Company hereby undertakes to the Assessing Officer
that if stock dividends are distributed to an employee by virtue of the exercise shares, they shall be transferred to
the Trustee, so long as the Trustee holds shares allotted to him for the employee within the Entitling Allotment.
The Trustee hereby undertakes to the Assessing Officer to apply the provisions of Section 102 of the Ordinance
to the stock dividends, as if they were shares allotted to the employee within the Entitling Allotment.

(b) In accordance with Section 4(c) of the Rules, we hereby confirm that we have written confirmation from the
employee whereby he agrees to be subject to the arrangement and undertakes not to claim a tax exemption under
Sections 97(a) and (b) or 104 of the Ordinance, or within the framework of an exemption for the sale of shares in
the merger of corporations for the transfer of the options, before payment of the tax due.
                                                         2

5. Attached hereto is a deed of trust as provided in Section 3 of the Rules.

6. The Trustee undertakes to the Assessing Officer not to transfer the options, or the share certificates, prior to
the payment of the tax due under Section 102 of the Ordinance and the Rules, or before the Trustee transfers to
the Assessing Officer, on account of the tax due, 30% of the consideration.

7. Only after the Company or the employee shall provide the Trustee with confirmation from the Assessing
Officer regarding the amount of tax payable as a condition to the transfer of the options or the shares in the
employee's name, will the Trustee transfer the options or the shares to the employee, after payment of the amount
of tax named in the Assessing Officer's confirmation.

Sincerely,

                      (-)                          (-)    [ Stamp of On Track Innovations Ltd. ]
             ______________________                _____________________________________________
             The Trustee                                            The Company

             cc:     The Income Tax Commission, Jerusalem
Mr. Ya'acov Iluz
Income Tax Commission, Deductions Department 5 Canfei Nesharim St.
Jerusalem

Dear Sir,

Re: On Track Innovations Ltd., Public Co. 520042862, deductions file 904071594 Application to approve an
allotment of options pursuant to Section 102 of the Income Tax Ordinance

Per your request, we hereby declare that:

1. Options under the aforementioned allotment plan shall not be allotted to controlling shareholders of the
Company.

2. Also after the allotment of options under the aforementioned plan, no employee to whom options shall have
been allotted will be a controlling shareholder of the Company.

(-) [ Stamp of On Track Innovations Ltd. ]
On Track Innovations Ltd.
                                                   Exhibit 10.38

                                             Agreement relating to the

Termination of Contracts Outside Greater China and the Transfer of Certain Business Contracts

THIS AGREEMENT is made this 22nd day of June, 2002.

BETWEEN:

(A) E-SMART SYSTEM Inc. (formerly known as Sailor Group Limited and OTI Asia Pacific Limited), a
company incorporated under the laws of the British Virigin Islands having its registered office at P.O. Box 957,
Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands and/or any of its subsidiaries (e-
Smart"); and

(B) ON TRACK INNOVATIONS LIMITED, a company incorporated in the State of Israel whose registered
office is situated at Z.H.R. Industrial Zone, Rosh Pina 12000, Israel ("OTI")

WHEREAS:

(A) e-Smart is engaged separately and/or together with OTI in contracts outside the territory of China and Hong
Kong, details of which are set out in the Schedule A-1 hereto (the contracts shall be referred to hereinafter as the
"Contracts" and any of them "the Contract");

(B) e-Smart and/or the parties, as the case may be, will notify the different counter parties to those Contract
("Counter Parties" and any of them "the Counter Party") of the termination of such Contracts.

(C) -Smart at the date hereof maintains certain business contracts outside the territory of the People's Republic of
China, Taiwan, Hong Kong and Macau ("the Greater China") China and Hong Kong, details of which are set out
in the Schedule A-2 hereto (the business contracts above shall be referred to hereinafter as the "Business
Contracts").

(D) E-Smart agrees to transfer to OTI all Business Contracts, shall cease all negotiations with such Business
Contacts and shall refrain from engaging any business with parties whose contracts are being terminated under
this Agreement and/or whose Business Contacts are transferred to OTI under this Agreement for a period of 12
months following the execution of this Agreement, save for any existing purchase orders outstanding, if any.

NOW THIS AGREEMENT WITNESSES as follows:

                                                         1
1. e-Smart and OTI will jointly issue a termination notice to the Counter Parties, within 7 days from the date of
this Agreement ("Letter of Termination").

The Letter of Termination shall be in the form substantially the same as the notice in Schedule B to this Agreement
notifying the relevant Counter Party of the termination of the Contract; asking them to acknowledge and confirm
that as from the date hereof the Contracts are terminated; and giving an instruction of transfer regarding any
deposits for deliveries of goods and/or services that have been paid in advance or have been lent to e-Smart by
the Counter Party, as the case may be ("the Instruction").

2. e-Smart will transfer immediately and no later than 14 days any deposits for deliver of goods and/or services
that have been paid in advance or have been lent to e-Smart by the Counter Party in accordance with the
Instruction given by the relevant Counter Party.

3. e-Samrt hereby transfers to OTI all Business Contracts and undertakes to cease all negotiations with such
Business Contracts. E-Smart shall make its best efforts in order to assist OTI to receive all the relevant
information regarding the Contracts.

4. For a period of 12 months from the Completion Date, e-Smart or any of its subsidiaries shall not engage in any
business with parties whose Contracts are being terminated and/or whose Business Contracts are transferred to
OTI under this Agreement.

5. Within a period of 30 days from the date of this Agreement, e-Smart will transfer to OTI a copy of all relevant
information, including but not limited to quotation, emails and correspondence between e-Smart in relation to the
Business Contracts that exist on every PC in e-Smart.

6. This Agreement shall be binding on and enure for benefit of each Party's respective heirs, executors,
administrators, successors and assigns (as the case may be).

7. This Agreement shall be governed by and interpreted in accordance with the laws of the England. The parties
hereby agree to submit to the non-exclusive jurisdiction of the Courts of Hong King.

8. Service of any writ, summons, order, judgment or other notice of legal process regarding this Agreement shall
be delivered to OTI at his registered address and to the e-Smart at its registered office.

9. This Agreement ay be executed in any number of counterpart, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one and the same instrument.

IN WITNESS WHEREOF this Agreement has been executed on the day and year first above written.

                                                         2
                                               SCHEUDLE A

Schedule A-1

Contracts
1) TXN (India)
2) CTI (Japan)
3) S! Corporation (Korea)

Schedule A-2

Business Contacts:
1) NETS (Singapore)
2) FUJITSO (Japan)
3) LTA (Singapore)
4) ICIC/HPCL (India)
5) Any other business contacts outside Greater China as they exist on every PC in e-Smart including but not
limited to quotations, emails and correspondence between e-Smart in relation to the Business Contracts

                                                       3
                                                SCHEDULE B

                                   Format of Letter to Counter Parties

Date:___________

To:___(the Counter Party)__

We, e0Smart System Inc. (hereinafter: "e-Smart") (and On Track Innovations Ltd), hereby terminate the
Contract signed between us on _______(hereinafter: "the Contract").

Sincerely Yours


e-Smart System Inc. On Track Innovations Ltd.

To: e-Smart System Inc. and On Track Innovations Limited

We, _________(Counter Party) acknowledge the above termination notice and will have no further rights and/or
claims against each of you in connection with the Contract.

(We hereby instruct e-Smart to transfer immediately an amount of US$________to On Track Innovations
Ltd./Counter Party.)


Director
For and on behalf of
(Counter Party)

                                                      4
                          SUPPLEMENTAL SHAREHOLDERS AGREEMENT
                                  In respect of e-Smart System Inc.

THIS SUPPLEMENTAL AGREEMENT is made the 22nd day of June 2002.

BETWEEN:

1. Ocean Wonder Limited, a company incorporated in the British Virgin Islands whose registered office is
situated at P.O.Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Island ("CK-X");

2. On Track Innovations Limited, a company incorporated in the State of Israel whose registered office is
situated at Z.H.R. Industrial Zone, Rosh Pina 12000, Israel ("OTI");

3. e-Smart System Inc. (formerly known as Sailor Group Limited and OTI Asia Pacific Limited), a company
incorporated under the laws of the British Virgin Islands having its registered office at P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands ("the Company"); and

4. The persons listed in Schedule A of the Shareholders Agreement (hereinafter defined) (hereinafter together
referred to as the "Controlling Parties" and each a "Controlling Party")

WHEREAS:

(1) On 2nd February 2000, CK-X, OTI, the Company and Controlling Parties entered into a Shareholders
Agreement (the Shareholders Agreement") to govern the relationship between CK-X and OTI as shareholders of
the Company and to set out the basis on which the business and affairs of the Company and all members of the
Group (as defined in the Shareholders Agreement) would be managed and controlled and to provide for the
rights and duties of the parties thereto and other matters therein set outs.

(2) On 2nd February 2000, OTI and the Company entered into a Distribution Agreement (the "the Distribution
Agreement"_) whereby the Company was appointed as the exclusive distributor of the OTI Products in 14
countries. The parties hereto have agreed to amend certain provisions in the Shareholders Agreement and the
Distribution Agreement.

(3) The parties hereto have agreed to amend the Shareholders Agreement and enter into this Supplemental
Agreement subject to the terms and conditions herein contained.

IT IS HEREBY AGREED as follows:

1. Unless otherwise defined herein, the terms used in this Supplemental Agreement will have the same meanings
set out in the Shareholders Agreement and the rules and principles of interpretations used in the Distribution
Agreement shall apply to this Supplemental Agreement.

                                                         1
          2.         The parties agree to amend the Shareholders Agreement as provided
                     herein to give effect the following amendments.

          (a)                   The two Officers that OTI is entitled to appoint to the
                                Company, namely the President and the CEO are to be appointed
                                by CK-X from the date of this Supplemental Shareholders
                                Agreement.

                           (b) The Territory comprising the 14 countries in which the Company
                           has exclusive distribution rights of the OTI products will be
                           reduced and changed to four countries and areas, namely the
                           People's Republic of China, Taiwan, Hong King and Macau ("the
                           Greater China").

          (b)                   In lieu of the remaining amount of        US$330,000 payable by the
                                Company to OTI under Clause 4.16.2        of the Shareholders
                                Agreement, the Company will pay an        amount of US$165,000 to OTI
                                within 7 days after the signing of        this Supplemental
                                Shareholders Agreement.




This Supplemental Shareholders Agreement shall have a term for 2 years commencing from the date hereof. The
term will be automatically renewed for a period of 2 years unless agreed otherwise by the parties.

3. Subject to Clause 2 above, the parties agree to amend the Shareholders Agreement as provided herein.

4. Clause 1.1 of the Shareholders Agreement

The definition of "Exclusive Territory" in clause 1.1 is deleted and replaced by the following:-

"Exclusive Territory" the countries and areas listed in Annex c-1 to the Distribution Agreement where the
Company shall be appointed exclusive distributor and retain exclusive distribution rights under the Distribution
Agreement."

A new definition will be added to Clause 1 of the Shareholders Agreement as follows:-

"Other Territory" means the countries and areas listed in Annex C-2 to the Distribution Agreement."

"Supplemental Agreement" means the supplemental shareholders agreement dated 22nd June 2002 entered into
by the parties hereto to amend this Agreement."

"Supplemental Distribution Agreement" means the supplemental distribution agreement dated 22nd June 2002
entered into between OTI and the Company to amend the Distribution Agreement."

                                                          2
5. Clauses 13.2.1 of the Shareholders Agreement Clause 13.2.1 shall be subject to the new Claus 3.3 of the
Distribution Agreement (as amended by the Supplemental Distribution Agreement dated 22 June, 2002).

6. Clauses 4.6 of the Shareholders Agreement

Clause 4.6 is deleted and replaced as follows:

"4.6 Convening a meeting

The Board shall meet at such place or time as the business of the Company requires or as the Directors think fit.
Board meetings may be conducted by way of meeting, telephone conference or video-conference. Any Board
meeting may be convened by the Chairman or the Deputy Chairman. Not less that 7 Business Days' prior written
notice of each meeting of the Board specifying the date, time and place of the meeting and the business to be
transacted therat shall be given to each Director (other than a meeting reconvened following an adjournment, in
respect of which no further notice shall be required), unless short notice is consented to or notice is waived by
such Director. There will be four Board meeting in the first year if necessary."

7. The management will present to the Board a draft Annual Business Plan with a detailed monthly financial
budget in respect of year 2002 within sixty days after the execution of this Supplemental Shareholders
Agreement.

8. Clauses 5.12 of the Shareholders Agreement

Clause 5.12 is deleted and replaced as follows:

"5.12 All back accounts of and contracts to be concluded by any member of the Group shall be operated or
signed by: (i) two Officers, or (ii) two Directors appointed by CK-X jointly, or (iii) one Director appointed by
OTI together with one Director of CK-X."

9. Within 30 days after the execution of this Supplemental Shareholders Agreement, each of CK-X and OTI
shall be entitles to appoint two Committee Members, The Management Committee meetings shall be physically
held in Hong Kong, or by way of telephone or video conferencing.

10. Upon the execution of this Supplemental Shareholders Agreement, the Shareholders Agreement shall be
deemed to be read and construed in conjunction with this Supplemental Agreement and as if the modifications to
the Shareholders Agreement contained herein were incorporated therein as from the date of this Supplemental
Shareholders Agreement and, save as is expressly amended hereby the Shareholders Agreement shall continue I
full force and effect and that all references in the Shareholders Agreement to this Supplemental Shareholders
Agreement shall accordingly be read and construed as if they were references to the Shareholders Agreement as
amended by this Supplemental Shareholders Agreement.

                                                         3
11. Each of the parties hereto agree that:

(a) notwithstanding the aforesaid amendments, nothing herein shall prejudice or adversely affect any right, power,
authority or remedy or discharge, release or otherwise affect any liability or obligation, accrued or arising under
the Shareholders Agreement (as amended by this Supplemental Shareholders Agreement); and

(b) it is bound by and will perform all its obligations under the Shareholders Agreement (as amended by this
Supplemental Shareholders Agreement).

12. If there is any conflict or inconsistency between the terms and conditions of the Shareholders Agreement and
any provisions in the Supplemental Agreement, the terms and conditions of this Supplemental Shareholders
Agreement shall prevail.

13. This Supplemental Shareholders Agreement and the rights and obligations of the parties hereunder shall be
governed by, and construed in accordance with the laws of Hong Kong.

IN WITHESS WHEREOF the parties hereto have caused this Supplemental Agreement to be executed by their
respective duly authorized officers, and have caused their respective corporate names to be signed as of the day
and year hereinbefore written.

                                  The Shareholders

                                  SIGNED by                   )
                                  for and on behalf of        )
                                  Ocean Wonder Limited        )
                                  In the presence of:-        )


                                  SIGNED by                   )
                                  for and on behalf of        )
                                  ON TRACK INNOVATIONS        )
                                  LIMITED                     )
                                  In the presence of:-        )

                                                                                4
The Company

SIGNED by                 )
for and on behalf of      )
e-Smart Systems Inc.      )
In the presence of:-      )

The Controlling Parties

SIGNED by                 )
for and on behalf of      )
ON TRACKINNOVATIONS       )
LIMITED                   )
In the presence of:-      )


SIGNED by                 )
for and on behalf of      )
CHEUNG KONG               )
INFRASTRUCTURE            )
HOLDINGS LIMITED          )
In the presence of:-      )




              5
                           SUPPLEMENTAL DISTRIBUTION AGREEMENT

THIS SUPPLEMENTAL AGREEMENT is made the 22nd day of June 2002

BETWEEN

On Track Innovations Limited, a company incorporated under the laws of the State of Israel, having its principal
place of business at Z.H.R. I.Z., Rosh Pina 12000, Israel ("OTI");

AND

e-Smart System Inc. (formerly known as Sailor Group Limited and OTI Asia Pacific Limited), a company
incorporated under the laws of the British Virgin Islands having it registered office at P.O. Box 957, Offshore
Incorporations Centre Road Two, Tortola, British Virgin Island ("Distributor").

WHEREAS:

(1) Pursuant to a Distribution Agreement dated 2nd February 2000 entered into between OTI and the Distributor
("Distribution Agreement"), OTI had appointed the Distributor as an exclusive distributor of the OTI products in
the Territory for so long as the Shareholders Agreement dated 2nd February 2000 entered into between OTI,
the Distributor and other parties is in force.

(2.) The parties hereto have agreed that the Territory defined in Annex C to the Distribution Agreement shall be
changed in accordance with the terms of this Supplemental Distribution Agreement.

IT IS HEREBY AGREED as follows:-

1. Unless otherwise defined herein, the terms used in the Supplemental Distribution Agreement will have the same
meanings set out in the Distribution Agreement and the rules and principles of interpretation used in the
Distribution Agreement shall apply to this Supplemental Agreement.

                                                         1
2. Both parties agree to amend the Distribution Agreement as provided herein.

3. Clause 1 of the Distribution Agreement

3.1 The definition of the term "The Territory" will be deleted and replaced as follows:

"1.1.10 "The Territory means the countries and areas listed in Annex C-1 hereto."

3.2 A new definition will be added to Clause 1 of the Distribution Agreement as follows:

"1.1.14 "Other Territory" means the countries and areas listed in Annex C-2 hereto."

4. Annex C of the Distribution Agreement

Annex shall be deleted and substituted by the following:

Annex C-1
The Territory

1. The People's Republic of China.
2. Hong Kong.
3. Taiwan,
4. Macau.

Annex C-2
Other Territory
1. Singapore.
2. Australia.
3. South Korea.
4. Japan.
5. The Philippines.
6. Malaysia.
7. Indonesia.
8. Thailand.
9. India.
10. Vietnam.
11. New Zealand.

                                                           2
5. Clauses 3.2 and 3.3 of the Distribution Agreement

Clauses 3.2 and 3.3 of the Distribution Agreement are deleted and substituted by the following:-

"Appointment and Exclusivity

3.2 Subject to the terms and conditions set forth herein the appointment of the Distributor hereunder is exclusive
and OTI shall not appoint another Distributor in the Territory.

3.3 Without derogating from the Distributor's rights under Clause 3.2, any business opportunity OTI encounters
within the Territory shall be offered in writing to the Distributor and any business opportunity the Distributor
encounters within the Other Territory shall be offered in writing to OTI. In the event that OTI or the Distributor,
as the case may be, has rejected in writing the offer to be engaged in such business opportunity or does not reply
to such offer within 7 Business Days, the other party shall be entitles to be engaged in such business opportunity
and in such cases Clauses 15.3 and 16.2.2 to the Distribution Agreement shall not apply.

6. Upon the execution of this Supplemental Distribution Agreement, the Distribution Agreement shall be deemed
to be read and construed in conjunction with this Supplemental Agreement and as if the modification to the
Distribution Agreement contained herein were incorporated therein as from the date of this Supplemental
Distribution Agreement and, save as is expressly amended here by, the Distribution Agreement shall continue in
full force and effect and that all references in the Distribution Agreement to "this Agreement" shall accordingly be
read and construed as if they were references to the Distribution Agreement as amended by this Supplemental
Distribution Agreement.

7. Each of the parties hereto agree that:

(a) notwithstanding the aforesaid amendments, nothing herein shall prejudice or adversely affect any right, power,
authority or remedy or discharge. Release or otherwise affect any liability or obligation, accrued or arising under
the Distribution Agreement (as amended by this Supplemental Distribution Agreement); and

                                                          3
(b) it is bound by and will perform all its obligations under the Distribution Agreement (as amended by this
Supplemental Distribution Agreement).

8. If there is any conflict or inconsistency between the terms and conditions of the Distribution Agreement and
any provisions in the Supplemental Agreement, the terms and conditions of this Supplemental Distribution
Agreement shall prevail.

IN WITNESS WHEREOF the parties hereto have caused this Supplemental Distribution Agreement to be
executed by their respective duly authorized officers, and have caused their respective corporate names to be
signed as of the day and year hereinbefore written.

                                      SIGNED by                             )
                                      for on behalf of                      )
                                      On Track Innovations Limited          )
                                      in the presence of:-                  )




                                      SIGNED by                             )
                                      for and on behalf of                  )
                                      e-Smart System Inc.                   )
                                      in the presence of:-                  )
Ernst & Young LLP Luboshitz Kasierer

                              CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to the use of our report dated August
28, 2002, in the Registration Statements on Form F-1 (No. 333-90496), and the related Prospectus of On
Track Innovations Ltd. for the registration of 698,027 shares of Ordinary shares.

                                           /s/ Luboshitz Kasierer

                                            LUBOSHITZ KASIERER
                                      AN AFFILIATE MEMBER OF ERNST &
                                            YOUNG INTERNATIONAL




Tel Aviv, Israel, September 11, 2002

				
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