EXHIBIT 10.47



                          REGISTRATION RIGHTS AGREEMENT


         REGISTRATION  RIGHTS  AGREEMENT  dated as of the 10th day of July, 2003
(this  "Agreement")  by and  between  ON  TRACK  INNOVATIONS  LTD.,  an  Israeli
corporation   (the   Corporation"),   and  HERALD   INVESTMENT  TRUST  PLC  (the
"Investor").

         WHEREAS,  the  Investor  owns or has the right to purchase or otherwise
acquire  shares  of  the  Ordinary  Shares  (as  hereinafter   defined)  of  the
Corporation;

         WHEREAS,  the  Corporation  and the  Investor  deem  it to be in  their
respective  best interests to set forth the rights of the Investor in connection
with the public offerings and sales of the Ordinary Shares;

         NOW,  THEREFORE,  in consideration of the premises and mutual covenants
and obligations  hereinafter set forth,  the Corporation and the Investor hereby
agree as follows:

         Section 1. Definitions.

         As used in this Agreement the following  terms shall have the following
meanings:

         (a)  "Commission"  means the Securities and Exchange  Commission or any
other Federal agency at the time administering the Securities Act.

         (b)  "Exchange  Act" means the  Securities  Exchange Act of 1934 or any
successor  Federal  statute,  and the rules and  regulations  of the  Commission
promulgated thereunder, all as the same shall be in effect from time to time.

         (c) "Investor" means Herald Investment Trust PLC.

         (d) "Ordinary Shares" means the ordinary shares of the Corporation, NIS
0.1 nominal value.

         (e) "Other  Shares"  means at any time those shares of Ordinary  Shares
which do not constitute Primary Shares or Registrable Shares.

         (f)  "Primary  Shares"  means at any time the  authorized  but unissued
shares of Ordinary Shares held by the Corporation in its treasury.

         (g)  "Registrable  Shares"  means shares of Ordinary  Shares held by or
issuable  to the  Investor  as  described  on  Exhibit  1. As to any  particular
Registrable  Shares,  once  issued,  such  Registrable  Shares shall cease to be
Registrable  Shares when (i) they have been registered under the Securities Act,
the registration  statement in connection  therewith has been declared effective
and  they  have  been  disposed  of  pursuant  to  such  effective  registration
statement, (ii) they are eligible to be sold or distributed pursuant to Rule 144
within any consecutive three month period (including,  without limitation,  Rule
144(k))  without  volume  limitations,  or (iii) they  shall  have  ceased to be
outstanding.

         (h) "Rule 144" means Rule 144  promulgated  under the Securities Act or
any  successor  rule thereto or any  complementary  rule  thereto  (such as Rule
144A).

         (i) "Securities  Act" means the Securities Act of 1933 or any successor
Federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect from time to time.


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         Section 2. Required Registration.

         The  Corporation  shall  promptly  use its best  efforts  to effect the
registration  under the Securities Act of the Registrable  Shares within 60 days
after the date hereof;  provided,  however,  that the  Corporation  shall not be
obligated  to  effect  any  registration  under  the  Securities  Act  except in
accordance with the following provisions:

         (a) the  Corporation  shall not be obligated to use its best efforts to
file and cause to become  effective  (i) more  than one  registration  statement
initiated pursuant to this Section 2 or (ii) any registration  statements during
any period in which any other registration  statement (other than on Form S-4 or
Form S-8  promulgated  under the Securities Act or any successor  forms thereto)
pursuant to which  Primary  Shares are to be or were sold has been filed and not
withdrawn or has been declared effective within the prior 90 days.

         (b) the  Corporation  may delay  the  filing  or  effectiveness  of any
registration  statement  for a  period  of up to 90 days if the  Corporation  is
engaged,  or has  fixed  plans  to  engage  within  90 days of the  time of such
request, in a firm commitment  underwritten public offering of Primary Shares in
which the holders of Registrable Shares may include  Registrable Shares pursuant
to Section 3.

         (c) with  respect to any  registration  pursuant to this Section 2, the
Corporation  shall give notice of such  registration to the holders of all Other
Shares which are entitled to registration rights and the Corporation may include
in such registration any Primary Shares or Other Shares; provided, however, that
if the managing  underwriter  advises the Corporation  that the inclusion of all
Registrable  Shares,  Primary Shares and/or Other Shares proposed to be included
in such registration  would interfere with the successful  marketing  (including
pricing) of the Registrable Shares proposed to be included in such registration,
then the number of  Registrable  Shares,  Primary  Shares  and/or  Other  Shares
proposed to be included in such registration  shall be included in the following
order:

                  (i) first, the Registrable Shares;

                  (ii) second, the Primary Shares; and

                  (iii)   third,   the  Other   Shares  which  are  entitled  to
         registration rights.

         (d) At any time before the registration  statement covering Registrable
Shares  become  effective,  the holders of a majority of such shares may request
the Corporation to withdraw or not to file the registration  statement.  In that
event,  if such request of withdrawal  shall not have been caused by, or made in
response  to,  the  material  adverse  effect  of  an  event  on  the  business,
properties,   conditions,   financial  or   otherwise,   or  operations  of  the
Corporation,  the holders shall have used their demand  registration right under
this  Section 2 and the  Corporation  shall no longer be  obligated  to register
Registrable  Shares pursuant to the exercise of such registration right pursuant
to this Section 2 unless the remaining  holders shall pay to the Corporation the
expenses incurred by the Corporation through the date of such request.

         Section 3. Piggyback Registration.

         If the  Corporation  at any time  proposes  for any reason to  register
Primary  Shares or Other Shares under the Securities Act (other than on Form S-4
or  Form  S-8  promulgated  under  the  Securities  Act or any  successor  forms
thereto),  it shall give written  notice to the Investor of its  intention so to
register such Primary Shares or Other Shares at least 30 days before the initial
filing of such registration  statement and, upon the written request,  delivered
to the  Corporation  within 20 days  after  delivery  of any such  notice by the
Corporation,  of the Investor to include in such registration Registrable Shares
(which  request shall specify the number of  Registrable  Shares  proposed to be
included in such  registration and shall state that such Investor desire to sell
such Registrable Shares in the public securities markets), the Corporation shall

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use its best efforts to cause all such Registrable Shares to be included in such
registration on the same terms and conditions as the securities  otherwise being
sold in such registration;  provided,  however, that if the managing underwriter
advises the Corporation  that the inclusion of all Registrable  Shares requested
to be  included  in  such  registration  would  interfere  with  the  successful
marketing  (including pricing) of the Primary Shares or Other Shares proposed to
be registered by the Corporation, then the number of Primary Shares, Registrable
Shares and Other Shares  proposed to be included in such  registration  shall be
included in the following order:

         (a) if the Corporation  proposes to register Primary Shares, or Primary
Shares and Other Shares:

                  (i) First, the Primary Shares; and

                  (ii) Second, the Registrable Shares and Other Shares requested
         to be included in such registration (or, if necessary, such Registrable
         Shares and Other Shares pro rata among the holders  thereof  based upon
         the number of shares of Registrable  Shares and Other Shares  requested
         to be registered by each such holder); or

                  (b) if the  Corporation  proposes  to  register  Other  Shares
         pursuant  to a request  for  registration  by the holders of such Other
         Shares (other than pursuant to Section 3 hereof):

                  (i) First, the Other Shares held by the parties demanding such
         registration; and

                  (ii) Second,  the  Registrable  Shares and Other Shares (other
         than shares registered pursuant to Section 3(b)(1) hereof) requested to
         be registered by the holders  hereof (or, if necessary,  pro rata among
         the holders thereof based on the number of Registrable Shares and Other
         Shares requested to be registered by such holders).

         Section 4. Holdback Agreement.

         If the Corporation at any time shall register shares of Ordinary Shares
under the Securities Act (including any registration  pursuant to Sections 2 and
3 hereof) for sale to the public, the Investor shall not sell publicly, make any
short sale of,  grant any  option  for the  purchase  of, or  otherwise  dispose
publicly of, any Registrable  Shares (other than those shares of Ordinary Shares
included in such  registration  pursuant to Sections 2 and 3 hereof) as required
by any  underwriter  in  connection  with such  registration,  without the prior
written consent of the Corporation,  for a reasonable  period  designated by the
Corporation.  The Corporation shall obtain the agreement of any person permitted
to sell shares of stock in a registration to be bound by and to comply with this
Section 4 as if such person was an Investor hereunder.

         Section 5. Preparation and Filing.

         If and whenever the Corporation is under an obligation  pursuant to the
provisions of this Agreement to use its best efforts to effect the  registration
of  any  Registrable   Shares,   the  Corporation   shall  as  expeditiously  as
practicable:

         (a)  use its  best  efforts  to  cause a  registration  statement  that
registers such Registrable Shares to become and remain effective for a period of
270 days or until  all of such  Registrable  Shares  have been  disposed  of (if
earlier);

         (b) furnish,  at least five business days before filing a  registration
statement that registers such Registrable  Shares, a prospectus relating thereto
or any  amendments or supplements  relating to such a registration  statement or
prospectus,  to one counsel selected by the Investor (the "Investor's Counsel"),
copies of all such documents proposed to be filed (it being understood that such
five-business-day  period

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need not apply to successive drafts of the same document proposed to be filed so
long as such successive drafts are supplied to the Investor's Counsel in advance
of the  proposed  filing by a period of time that is  customary  and  reasonable
under the circumstances);

         (c)  prepare  and  file  with  the  Commission   such   amendments  and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration  statement effective for
at least a period of 270 days or until all of such Registrable  Shares have been
disposed of (if earlier) and to comply with the provisions of the Securities Act
with respect to the sale or other disposition of such Registrable Shares;

         (d)  notify in  writing  the  Investor's  Counsel  promptly  (i) of the
receipt by the Corporation of any  notification  with respect to any comments by
the Commission with respect to such registration  statement or prospectus or any
amendment  or  supplement  thereto  or any  request  by the  Commission  for the
amending or  supplementing  thereof or for additional  information  with respect
thereto, (ii) of the receipt by the Corporation of any notification with respect
to the issuance by the Commission of any stop order suspending the effectiveness
of such  registration  statement or  prospectus  or any  amendment or supplement
thereto or the  initiation or threatening of any proceeding for that purpose and
(iii) of the receipt by the Corporation of any notification  with respect to the
suspension  of the  qualification  of such  Registrable  Shares  for sale in any
jurisdiction  or the  initiation  or  threatening  of any  proceeding  for  such
purposes;

         (e) use its best efforts to register or qualify such Registrable Shares
under  such  other  securities  or blue  sky laws of such  jurisdictions  as the
Investor  reasonably requests and do any and all other acts and things which may
be reasonably  necessary or advisable to enable the Investor to  consummate  the
disposition  in  such  jurisdictions  of the  Registrable  Shares  owned  by the
Investor;  provided,  however,  that the  Corporation  will not be  required  to
qualify generally to do business,  subject itself to general taxation or consent
to general service of process in any  jurisdiction  where it would not otherwise
be  required  to do so but for this  paragraph  (e) or to provide  any  material
undertaking or make any changes in its By-laws or  Certificate of  Incorporation
which the Board of Directors  determines to be contrary to the best interests of
the Corporation or to modify any of its contractual relationships then existing;

         (f) furnish to the Investor holding such Registrable Shares such number
of copies of a summary  prospectus,  if any,  or other  prospectus,  including a
preliminary  prospectus,  in conformity with the  requirements of the Securities
Act, and such other  documents as such Investor may reasonably  request in order
to facilitate the public sale or other disposition of such Registrable Shares;

         (g) without  limiting  subsection  (e) above,  use its best  efforts to
cause such  Registrable  Shares to be registered  with or approved by such other
governmental  agencies  or  authorities  as may be  necessary  by  virtue of the
business and operations of the  Corporation to enable the Investor  holding such
Registrable Shares to consummate the disposition of such Registrable Shares;

         (h) notify the  Investor  holding such  Registrable  Shares on a timely
basis at any time  when a  prospectus  relating  to such  Registrable  Shares is
required to be delivered under the Securities Act within the appropriate  period
mentioned in  subparagraph  (a) of this Section 4, of the happening of any event
as a result of which the prospectus included in such registration  statement, as
then in effect,  includes  an untrue  statement  of a material  fact or omits to
state a material  fact  required to be stated  therein or  necessary to make the
statements  therein not misleading in light of the  circumstances  then existing
and, at the  request of an  Investor,  prepare  and  furnish to such  Investor a
reasonable  number  of  copies  of a  supplement  to or  an  amendment  of  such
prospectus as may be necessary so that, as thereafter  delivered to the offerees
of such  shares,  such  prospectus  shall not include an untrue  statement  of a
material fact or omit to state a material fact required to be stated  therein or
necessary  to make  the  statements  therein  not  misleading  in  light  of the
circumstances then existing;

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         (i) subject to the execution of confidentiality  agreements in form and
substance satisfactory to the Corporation, make available upon reasonable notice
and during normal  business hours,  for inspection by the Investor  holding such
Registrable Shares, any underwriter participating in any disposition pursuant to
such registration statement and any attorney, accountant or other agent retained
by the Investor or underwriter (collectively,  the "Inspectors"),  all pertinent
financial and other records, pertinent corporate documents and properties of the
Corporation  (collectively,  the "Records"), as shall be reasonably necessary to
enable  them to  exercise  their  due  diligence  responsibility,  and cause the
Corporation's  officers,  directors  and  employees  to supply  all  information
(together with the Records, the "Information")  reasonably requested by any such
Inspector in connection with such registration statement. Any of the Information
which the Corporation  determines in good faith to be confidential  and of which
determination  the  Inspectors  are so  notified,  shall not be disclosed by the
Inspectors  unless (i) the disclosure of such  Information is necessary to avoid
or correct a misstatement or an omission in the registration statement, (ii) the
release of such  Information  is ordered  pursuant  to a subpoena or other order
from a court of competent  jurisdiction or (iii) such  Information has been made
generally  available  to the public;  the  Investor  agree that they will,  upon
learning that  disclosure of such  information is sought in a court of competent
jurisdiction,  give notice to the Corporation and allow the Corporation,  at the
Corporation's  expense, to undertake appropriate action to prevent disclosure of
the Information deemed confidential;

         (j) use its best  efforts  to  obtain  from its  independent  certified
public  accountants  "cold comfort" letters addressed to the Corporation and any
selling  Stockholders  in  customary  form and at  customary  times and covering
matters of the type customarily covered by cold comfort benefits;

         (k) use its best  efforts  to obtain  from its  counsel  an  opinion or
opinions  in  customary  form  addressed  to the  Corporation  and  any  selling
Stockholders;

         (l)  provide a  transfer  agent and  registrar  (which  may be the same
entity and which may be the Corporation) for such Registrable Shares;

         (m) issue to any  underwriter  to which the Investor may sell shares in
such offering certificates evidencing such Registrable Shares;

         (n) list such Registrable Shares on any national securities exchange on
which any shares of the Ordinary Shares are listed or, if the Ordinary Shares is
not listed on a national  securities  exchange,  use its best efforts to qualify
such Registrable  Shares for inclusion on the automated  quotation system of the
National  Association of Securities  Dealers,  Inc. (the "NASD"),  or such other
national  securities  exchange as the holders of a majority of such  Registrable
Shares shall reasonably request;

         (o) otherwise use its best efforts to comply with all applicable  rules
and regulations of the Commission and make available to its security holders, as
soon as reasonably practicable,  earnings statements (which need not be audited)
covering a period of 12 months beginning within three months after the effective
date of the registration statement,  which earnings statements shall satisfy the
provisions of Section 11 (a) of the Securities Act; and

         (p) subject to all the other provisions of this Agreement, use its best
efforts to take all other steps  accessory  to effect the  registration  of such
Registrable Shares contemplated hereby.

         The Investor,  upon receipt of any notice from the  Corporation  of any
event of the kind described in Section 5(h) hereof, shall forthwith  discontinue
disposition of the  Registrable  Shares pursuant to the  registration  statement
covering such Registrable  Shares until the Investor's  receipt of the copies of
the supplemented or amended prospectus contemplated by Section 5(h) hereof, and,
if so directed by the Corporation, the Investor shall deliver to the Corporation
all copies, other than permanent file copies then in the Investor's  possession,
of the  prospectus  covering such  Registrable  Shares at the time of receipt of
such notice.

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         Section 6. Expenses

         All  expenses  (other  than  underwriting   discounts  and  commissions
relating to the  Registrable  Shares,  as provided in the last  sentence of this
Section 6) incurred by the  Corporation in complying with Section 5,  including,
without  limitation,  all  registration  and filing fees (including all expenses
incident  to  filing  with  the  NASD),  fees and  expenses  of  complying  with
securities  and blue sky  laws,  printing  expenses,  fees and  expenses  of the
Corporation's  counsel and accountants,  and reasonable fees and expenses of the
Investor's Counsel,  shall be paid by the Corporation;  provided,  however, that
all underwriting discounts and selling commissions applicable to the Registrable
Shares and Other Shares shall be borne by the holders  selling such  Registrable
Shares and Other Shares,  in proportion to the number of Registrable  Shares and
Other Shares sold by each such holder.

         Section 7. Indemnification.

         (a) In connection with any registration of any Registrable Shares under
the Securities Act pursuant to this Agreement,  the Corporation  shall indemnify
and hold harmless the  Investor,  each  underwriter,  broker or any other person
acting on behalf of the holders of Registrable  Shares and each other person, if
any,  who  controls  any of the  foregoing  persons  within  the  meaning of the
Securities  Act against any losses,  claims,  damages or  liabilities,  joint or
several (or actions in respect  thereof),  to which any of the foregoing persons
may  become  subject  under the  Securities  Act or  otherwise,  insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue  statement  or  allegedly  untrue  statement of a
material  fact  contained  in  the  registration   statement  under  which  such
Registrable  Shares were  registered  under the Securities  Act, any preliminary
prospectus or final  prospectus  contained  therein or otherwise  filed with the
Commission,  any  amendment or  supplement  thereto or any document  incident to
registration or qualification of any Registrable  Shares, or arise out of or are
based upon the  omission or alleged  omission to state  therein a material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading or, with respect to any prospectus,  necessary to make the statements
therein in light of the circumstances under which they were made not misleading,
or any violation by the Corporation of the Securities Act or state securities or
blue sky laws  applicable to the  Corporation and relating to action or inaction
required  of  the   Corporation  in  connection   with  such   registration   or
qualification  under such state securities or blue sky laws; and shall reimburse
the  Investor,  such  underwriter,  such broker or such other  person  acting on
behalf of the holders of Registrable Shares and each such controlling person for
any legal or other  expenses  reasonably  incurred by any of them in  connection
with  investigating  or defending  any such loss,  claim,  damage,  liability or
action; provided,  however, that the Corporation shall not be liable in any such
case to the  extent  that any such  loss,  claim,  damage,  liability  or action
(including any legal or other expenses  incurred) arises out of or is based upon
an untrue  statement  or  allegedly  untrue  statement  or  omission  or alleged
omission made in said  registration  statement,  preliminary  prospectus,  final
prospectus,  amendment  supplement  or  document  incident  to  registration  or
qualification of any Registrable  Shares in reliance upon and in conformity with
written  information  furnished to the  Corporation  through an instrument  duly
executed by the Investor or his counsel or underwriter  specifically  for use in
the preparation thereof; provided further, however, that the foregoing indemnity
agreement is subject to the condition that,  insofar as it relates to any untrue
statement,  omission or alleged omission made in any preliminary  prospectus but
eliminated or remedied in the final  prospectus  (filed  pursuant to Rule 424 of
the Securities Act), such indemnity  agreement shall not inure to the benefit of
the Investor, underwriter, broker or other person acting on behalf of holders of
the Restricted  Shares from whom the person asserting any loss,  claim,  damage,
liability  or expense  purchased  the  Restricted  Shares  which are the subject
thereof,  if a copy of such final  prospectus  had been made  available  to such
person and such Investor,  underwriter,  broker or other person acting on behalf
of holders of the Registrable Shares and such final prospectus was not delivered
to such  person with or prior to the  written  confirmation  of the sale of such
Registrable Shares to such person.

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         (b) In connection with any registration of Registrable Shares under the
Securities Act pursuant to this Agreement, the Investor shall indemnify and hold
harmless  (in the  same  manner  and to the  same  extent  as set  forth  in the
preceding  paragraph of this Section 7) the  Corporation,  each  director of the
Corporation,  each officer of the Corporation  who shall sign such  registration
statement,  each representative of the Corporation,  including the Corporation's
counsel,  each  underwriter,  broker  or other  person  acting  on behalf of the
holders of Registrable  Shares and each person who controls any of the foregoing
persons  within the meaning of the  Securities Act with respect to any statement
or omission from such  registration  statement,  any  preliminary  prospectus or
final prospectus  contained therein or otherwise filed with the Commission,  any
amendment or  supplement  thereto or any document  incident to  registration  or
qualification of any Registrable  Shares, if such statement or omission was made
in reliance upon and in  conformity  with written  information  furnished to the
Corporation  or such  underwriter  specifically  for use in connection  with the
preparation  of  such  registration  statement,  preliminary  prospectus,  final
prospectus, amendment, supplement or document.

         (c) Promptly  after  receipt by an  indemnified  party of notice of the
commencement  of any  action  involving  a claim  referred  to in the  preceding
paragraphs of this Section 7, such indemnified party will, if a claim in respect
thereof is made against an indemnifying party, give written notice to the latter
of the  commencement  of such action.  The failure of any  indemnified  party to
notify an  indemnifying  party of any such action shall not (unless such failure
shall have a material  adverse  effect on the  indemnifying  party)  relieve the
indemnified  party on  account  of this  Section  7. In case any such  action is
brought against an indemnified party, the indemnifying party will be entitled to
participate  in and to  assume  the  defense  thereof,  jointly  with any  other
indemnifying  party  similarly  notified  to the extent  that it may wish,  with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying  party to such  indemnified  party of its election so to assume
the defense  thereof,  the  indemnifying  party shall not be responsible for any
legal  or other  expenses  subsequently  incurred  by the  indemnified  party in
connection with the defense thereof; provided,  however, that if any indemnified
party  shall have  reasonably  concluded  that there may be one or more legal or
equitable  defenses  available to such indemnified party which are additional to
or conflict with those available to the  indemnifying  party, or that such claim
or litigation  involves or could have an effect upon matters beyond the scope of
the indemnity agreement provided in this Section 7, the indemnifying party shall
not have the  right to  assume  the  defense  of such  action  on behalf of such
indemnified party (but shall have the right to participate  therein with counsel
of its choice) and such  indemnifying  party shall  reimburse  such  indemnified
party and any person  controlling such indemnified party for that portion of the
fees and  expenses of any counsel  retained  by the  indemnified  party which is
reasonably related to the matters covered by the indemnity agreement provided in
this Section 7. If the indemnifying  party is not entitled to, or elects not to,
assume the  defense  of a claim,  it will not be  obligated  to pay the fees and
expenses of more than one counsel with respect to such claim.

         (d) If the indemnification  provided for in this Section 7 is held by a
court of competent  jurisdiction to be unavailable to an indemnified  party with
respect to any loss, claim, damage, liability or action referred to herein, then
the  indemnifying   party,  in  lieu  of  indemnifying  such  indemnified  party
hereunder,  shall  contribute to the amounts paid or payable by such indemnified
party as a result  of such  loss,  claim,  damage,  liability  or action in such
proportion as is appropriate  to reflect the relative fault of the  indemnifying
party on the one hand and of the  indemnified  party on the other in  connection
with the  statements or omissions  which resulted in such loss,  claim,  damage,
liability or action as well as any other relevant equitable considerations.  The
relative fault of the indemnifying  party and of the indemnified  party shall be
determined by reference  to, among other  things,  whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information  supplied by the indemnifying party or by
the indemnified  party and the parties'  relative intent,  knowledge,  access to
information  and  opportunity  to correct or prevent such statement or omission.
The  parties  agree  that it would  not be just and  equitable  if  contribution
pursuant hereto were determined by pro rata allocation or by any other method or
allocation which does not take account of the equitable  considerations referred
to herein. No person guilty of fraudulent misrepresentation shall be entitled to
contribution from any person.

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         Section 8. Underwriting Agreement.

         Notwithstanding the provisions of Sections 3, 4, 5 and 6, to the extent
that the Investor shall enter into an underwriting or similar  agreement,  which
agreement  contains  provisions  covering  one or more issues  addressed in such
Sections,  the provisions  contained in such agreement  addressing such issue or
issues shall control;  provided,  however,  that any such agreement to which the
Corporation is not a party shall not be binding upon the Corporation.  No holder
may participate in any  underwritten  registration  hereunder unless such holder
(a) agrees to such holder's securities on the basis provided in any underwriting
arrangements  and (b)  completes  and  executes  all  questionnaires,  powers of
attorney,  indemnities,  underwriting  agreements and other documents reasonably
and customarily required under the terms of such underwriting arrangements.

         Section 9. Information by Holder.

         The Investor shall furnish to the Corporation such written  information
regarding  the  Investor  and the  distribution  proposed by the Investor as the
Corporation  may  reasonably  request  in  writing  and as shall  be  reasonably
required  in  connection  with any  registration,  qualification  or  compliance
referred to in this Agreement.

         Section 10. Exchange Act Compliance.

         The Corporation shall comply with all of the reporting  requirements of
the Exchange Act applicable to it (whether or not it shall be required to do so,
but specifically excluding Section 14 of the Exchange Act if not then applicable
to the Corporation) and shall comply with all other public information reporting
requirements of the Commission  which are conditions to the availability of Rule
144 for the sale of the Ordinary  Shares.  The Corporation  shall cooperate with
the Investor in supplying such  information as may be necessary for the Investor
to complete  and file any  information  reporting  forms  presently or hereafter
required by the Commission as a condition to the availability of Rule 144.

         Section 11. No Conflict of Rights

         The   Corporation   shall  not,  after  the  date  hereof,   grant  any
registration rights which prohibit the registration rights granted hereby.

         Section 12. Termination.

         This  Agreement  shall  terminate  and be of no further force or effect
when there shall no longer be any Registrable Shares outstanding;  provided that
Sections 6 and 7 shall survive any termination of this Agreement.

         Section 13. Successors and Assigns.

         This Agreement  shall bind and inure to the benefit of the  Corporation
and the  Investor  and,  subject to Section 14, the  respective  successors  and
assigns of the Corporation and the Investor.

         Section 14. Assignment.

         The  Investor may not assign his rights  hereunder to any  purchaser or
transferee of  Registrable  Shares;  provided,  however,  that such purchaser or
transferee  shall, as a condition to the  effectiveness of such  assignment,  be
required to execute a counterpart to this Agreement agreeing to be treated as an
Investor  whereupon such purchaser or transferee shall have the benefits of, and
shall be subject to the  restrictions  contained  in, this  Agreement as if such
purchaser or transferee was originally included in the definition of an Investor
herein and had originally been a party hereto.

                                       8
<PAGE>

         Section 15. Entire Agreement

         This Agreement and the other writings  referred to herein or therein or
delivered  pursuant hereto or thereto,  contain the entire agreement between the
Investor  and the  Corporation  with  respect to the subject  matter  hereof and
supersede all prior and  contemporaneous  arrangements  or  understandings  with
respect thereto.

         Section 16. Notices.

         All notices,  requests,  consents and other communications hereunder to
any party shall be deemed to be sufficient if contained in a written  instrument
delivered in person or sent by telecopy, nationally-recognized overnight courier
or first class  registered or certified mail return receipt  requested,  postage
prepaid,  addressed  to such party at the  address set forth below or such other
address as may  hereafter  be  designated  in writing by such party to the other
parties:

                  (i) if to the Investor,  to the address set forth on Exhibit 1
         hereto.

                  (ii) if to the Corporation, to:

                             On Track Innovations Ltd.
                             Z.H.R Industrial Zone
                             Rosh Pina, Israel 12000
                             Telephone:        04-6868000
                             Fax:              04-6938887

All such notices, requests, consents and other communications shall be deemed to
have been delivered (a) in the case of personal delivery or delivery by
telecopy, on the date of such delivery, (b) in the case of dispatch by
nationally-recognized overnight courier, on the next business day following such
dispatch and (c) in the case of mailing, on the third business day after the
posting thereof.

         Section 17. Modifications; Amendments; Waivers.

         The terms and  provisions  of this  Agreement  may not be  modified  or
amended, nor may any provision be waived, except pursuant to a writing signed by
the Corporation and the Investor.

         Section 18. Counterparts.

         This Agreement may be executed in any number of counterparts,  and each
such counterpart  hereof shall be deemed to be an original  instrument,  but all
such counterparts together shall constitute but one agreement.

         Section 19. Headings.

         The  headings  of the  various  sections  of this  Agreement  have been
inserted for  convenience of reference only and shall not be deemed to be a part
of this Agreement.

         Section 20. Governing Law.

         This  Agreement  shall be governed by and construed in accordance  with
the  laws of the  State  of New  York  applicable  to  contracts  made and to be
performed wholly therein.

                                       9
<PAGE>

         IN WITNESS  WHEREOF,  the undersigned  have executed and delivered this
Agreement as of the date first set forth above.


                                            ON TRACK INNOVATIONS LTD.


                                            By: /s/ Oded Bashan
                                               Name:  Oded Bashan
                                               Title: President


                                            HERALD INVESTMENT TRUST PLC


                                            By: /s/
                                               Name:
                                               Title:








                                       10
<PAGE>



                                                                       Exhibit 1





<TABLE>
<CAPTION>
                                                                                      Ordinary Shares Issuable
                                                                                     Upon Exercise of Warrants
Name and Address                                                                         dated July 10, 2003
  of Investor                                Ordinary Shares Owned                 (Subject to Adjustment therein)


<S>                                                  <C>                                         <C>
Herald Investment Trust PLC                          181,818                                     90,909
12 Charterhouse Square
London EC1M 6AX
</TABLE>