Document:

8-A12G/A

Exhibit 4.1  

ON TRACK INNOVATIONS
LTD. 

AND 

CONTINENTAL STOCK
TRANSFER & TRUST COMPANY 

RIGHTS AGREEMENT 

DATED AS OF JANUARY
12, 2009 

        This
Rights Agreement (“Agreement”), is dated as of January 12, 2009, between
On Track Innovations Ltd., an Israeli company (the “Company”), and
Continental Stock Transfer & Trust Company, a New York Corporation, as rights agent
(the “Rights Agent”). 

        The
Board of Directors of the Company has authorized and directed the issuance and the
distribution of one bonus right (a “Right”) for each Ordinary Share (as
hereinafter defined) of the Company outstanding on January 10, 2009 (the “Record
Date”) and for each Ordinary Shares issued by the Company at any time (and from
time to time) subsequent to the Record Date and prior to the earliest of the Distribution
Date, the Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined). 

        Accordingly,
in consideration of the premises and the mutual agreements herein set forth, the parties
hereby agree as follows: 

Section 1.    
Definitions. For purposes of this Agreement, the following terms have the meanings
indicated:  

    (a)       “Acquiring
Person” shall mean any Person who or which, together           with all
Affiliates and Associates of such Person, shall be the Beneficial Owner           of 15%
or more of the Ordinary Shares of the Company then outstanding, but shall           not
include the Company, any Subsidiary of the Company, any employee benefit or
          share ownership plan of the Company or any Subsidiary of the Company, or any
          entity holding Ordinary Shares for or pursuant to the terms of any such plan.
          Notwithstanding the foregoing, no Person shall become an “Acquiring
          Person” as the result of an acquisition of Ordinary Shares by the Company
          which, by reducing the number of Ordinary Shares of the Company outstanding,
          increases the proportionate number of Ordinary Shares of the Company
          beneficially owned by such Person to 15% or more of the Ordinary Shares of the
          Company then outstanding; provided, however, that, if a Person
          shall become the Beneficial Owner of 15% or more of the Ordinary Shares of the
          Company then outstanding by reason of share purchases by the Company and shall,
          after such share purchases by the Company, become the Beneficial Owner of any
          additional Ordinary Shares of the Company, then such Person shall be deemed to
          be an “Acquiring Person” and provided further, that if the
          Board of Directors of the Company determines in good faith that a Person who
          would otherwise be an “Acquiring Person,” as defined pursuant to the
          foregoing provisions of this paragraph (a), has become such inadvertently, and
          such Person divests as promptly as practicable a sufficient number of Ordinary
          Shares, so that such Person would no longer be an “Acquiring Person,”          as
defined pursuant to the foregoing provisions of this paragraph (a), then such
          Person shall not be deemed to be an “Acquiring Person” for any
          purposes of this Agreement. Notwithstanding the foregoing, no
Person shall become an “Acquiring Person”, if the majority of the Board of
Directors, in its sole and absolute discretion, determines that such person shall not be
deemed an Acquiring Person.  

    (b)        “Affiliate” shall
have the meaning ascribed to such term in           Rule 12b-2 of the General Rules and
Regulations under the Exchange Act as in           effect on the date of this Agreement.  

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    (c)        “Associate” shall
have the meaning ascribed to such term in           Rule 12b-2 of the General Rules and
Regulations under the Exchange Act as in           effect on the date of this Agreement.  

    (d)        A
Person shall be deemed the “Beneficial Owner” of and shall be
          deemed to “beneficially own” any securities:  

		    (i)        which
such Person or any of such Person’s Affiliates or Associates,           directly or
indirectly, beneficially owns, within the meaning of Rule 13d-3           of the
General Rules and Regulations promulgated under the Exchange Act as in           effect
on the date of this Agreement;  

		    (ii)        which
such Person or any of such Person’s Affiliates or Associates has (A)           the
right to acquire (whether such right is exercisable immediately or only           after
the passage of time or upon the satisfaction of any condition, whether or           not
within the control of such Person, Affiliate or Associate) pursuant to any
          agreement, arrangement or understanding (whether or not in writing, but other
          than customary agreements with and between underwriters and selling group
          members with respect to a bona fide public offering of
          securities), or upon the exercise of conversion rights, exchange rights, rights
          (other than these Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
          beneficially own, securities tendered pursuant to a tender or exchange offer
          made by or on behalf of such Person or any of such Person’s Affiliates or
          Associates until such tendered securities are accepted for purchase or
exchange;           or (B) the right to vote pursuant to any agreement, arrangement or
understanding           (whether or not in writing); provided, however,
that a Person           shall not be deemed the Beneficial Owner of, or to beneficially
own, any           security if the agreement, arrangement or understanding to vote such
security           (1) arises solely from a revocable proxy or consent given to such
Person in           response to a public proxy or consent solicitation made pursuant to,
and in           accordance with, the applicable rules and regulations promulgated under
the           Exchange Act and (2) is not also then reportable on Schedule 13D under
the           Exchange Act (or any comparable or successor report); or  

		    (iii)        which
are beneficially owned, directly or indirectly, by any other Person with           which
such Person or any of such Person’s Affiliates or Associates has any
          agreement, arrangement or understanding (whether or not in writing, but other
          than customary agreements with and between underwriters and selling group
          members with respect to a bona fide public offering of securities)
          for the purpose of acquiring, holding, voting (except to the extent
contemplated           by the proviso to Section 1(d)(ii)(B) hereof) or disposing of
any           securities of the Company.  

        Notwithstanding
anything in this definition of Beneficial Ownership to the contrary, (i) the phrase
“then outstanding,” when used with reference to a Person’s Beneficial
Ownership of securities of the Company, shall mean the number of such securities then
issued and outstanding together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to own beneficially hereunder and
(ii) nothing in this Section 1(d) shall cause a Person engaged in business as an
underwriter of securities to be the “Beneficial Owner” of, or to
“beneficially own,” any securities acquired through such Person’s
participation in good faith in a firm commitment underwriting until the expiration of
forty days after the date of such acquisition, and then only if such securities continue
to be owned by such Person at such expiration of forty days. 

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    (e)        “Business
Day” shall mean any day other than a Saturday, a           Sunday, or a day on
which banking institutions in New York, New York are           authorized or obligated by
law or executive order to close.  

    (f)        “Close
of Business” on any given date shall mean 5:00 P.M., New           York, New
York time, on such date; provided, however, that, if           such date is
not a Business Day, it shall mean 5:00 P.M., New York, New York           time, on the
next succeeding Business Day.  

    (g)        “Distribution
Date” shall have the meaning set forth in Section           3(a) hereof.  

    (h)        “Exchange
Act” shall mean the Securities Exchange Act of 1934,           as amended.  

    (i)        “Exchange
Ratio” shall have the meaning set forth in Section           24(a) hereof.  

    (j)        “Exercise
Ratio” shall be initially one (1) Ordinary Shares per           each Right,
provided that when the authorized share capital of the Company is at           least NIS
20,000,000, it shall, automatically and without any further action by           the
Company, be equal to three (3) Ordinary Shares per each Right, regardless of           a
different ratio stated in any other document (including in a Right
          Certificate).  

    (k)        “Final
Expiration Date” shall have the meaning set forth in           Section 7(a)
hereof.  

    (l)        “NASDAQ” shall
mean NASDAQ Stock Market.  

    (m)        “Ordinary
Shares” when used with reference to the Company,           shall mean the
ordinary shares, par value NIS 0.10 per share, of the Company.           “Ordinary
Shares” when used with reference to any Person other than           the Company,
shall mean the share capital (or equity interest) with the greatest           voting
power of such other Person or, if such other Person is a Subsidiary of           another
Person, the Person or Persons which ultimately control such           first-mentioned
Person.  

    (n)        “Person” shall
mean any individual, firm, corporation,           partnership, limited liability company,
limited liability partnership,           association, trust, syndicate or other entity,
and shall include any successor           (by merger or otherwise) of such entity, as
well as any unincorporated group of           individuals or entities that, by formal or
informal agreement or arrangement           (whether or not in writing), have embarked on
a common purpose or act.  

    (o)        “Purchase
Price” shall have the meaning set forth in           Section 4 hereof.  

    (p)        “Record
Date” shall have the meaning set forth in the second           paragraph hereof.  

    (q)        “Redemption
Date” shall have the meaning set forth in Section           7(a) hereof.  

    (r)        “Reduced
Threshold” shall have the meaning set forth in Section           27 hereof.  

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    (s)        “Right” shall
have the meaning set forth in the second           paragraph hereof.  

    (t)        “Right
Certificate” shall have the meaning set forth in Section           3(a) hereof.  

    (u)        “Shares
Acquisition Date” shall mean the first date of public           announcement by
the Company or an Acquiring Person that an Acquiring Person has           become such.  

    (v)        “Subsidiary” of
any Person shall mean any corporation or other           entity of which a majority of
the voting power of the voting equity securities           or equity interest is owned,
directly or indirectly, by such Person.  

    (w)        “Summary
of Rights” shall have the meaning set forth in Section           3(b) hereof.  

    (x)        “Trading
Day” means a day on which the principal national           securities exchange
on which the security is listed or admitted to trading is           open for the
transaction of business, or, if the security is not listed or           admitted to
trading on any national securities exchange but are quoted on           NASDAQ, a day on
which NASDAQ is in operation or if the security is neither           listed nor admitted
to trading on any national securities exchange, a Business           Day.  

Section 2.    
Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act
as agent for the Company in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may from time to time appoint
such co-Rights Agents as it may deem necessary or desirable, upon ten (10) days’ prior
written notice to the Rights Agent. The Rights Agent shall have no duty to supervise, and
shall in no event be liable for, the acts or omissions of any such co-Rights Agent.  

Section 3.    
Issue of Right Certificates. (a) Until the earlier of (i) the Close of Business on
the tenth day after the Shares Acquisition Date (or such later date as may be determined
by action of the Board of Directors of the Company prior to such time as any Person
becomes an Acquiring Person) ; or (ii) the Close of Business on the tenth Business Day
(or such later date as may be determined by action of the Board of Directors of the
Company prior to such time as any Person becomes an Acquiring Person) after the date of
the commencement by any Person (other than the Company, any Subsidiary of the Company,
any employee benefit or stock ownership plan or of the Company or of any Subsidiary of
the Company or any entity holding Ordinary Shares of the Company for or pursuant to the
terms of any such plan) of a tender or exchange offer (other than a Permitted Offer) the
consummation of which would result in any Person becoming the Beneficial Owner of
Ordinary Shares of the Company aggregating 15% or more of the then outstanding Ordinary
Shares of the Company (including any such date which is after the date of this Agreement
and prior to the issuance of the Rights) (the earlier of such dates being herein referred
to as the “Distribution Date”), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the balances indicated in the
book-entry account system of the transfer agent for the Ordinary Shares registered in the
names of the holders thereof (which Ordinary Shares shall also be deemed to represent
Right Certificates) or, in the case of certificated shares, the certificates for Ordinary
Shares of the Company registered in the names of the holders thereof (which certificates
shall also be deemed to be Right Certificates) and not by separate Right Certificates,
and (y) the right to receive Right Certificates will be transferable only in connection
with the transfer of Ordinary Shares of the Company. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, insured, postage-prepaid mail, to each record holder of
Ordinary Shares of the Company as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit A hereto (a “Right Certificate”),
evidencing one Right for each Ordinary Share so held. As of the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.  

Page 5

    (b)        On
the Record Date, or as soon as practicable thereafter, the Company will send           a
copy of a Summary of Rights to Purchase Ordinary Shares, in substantially the
          form of Exhibit B hereto (the “Summary of Rights”), by
          first-class, postage-prepaid mail, to each record holder of Ordinary Shares as
          of the Close of Business on the Record Date, at the address of such holder
shown           on the records of the Company. At any time following the Record Date, the
          Company will send a copy of the Summary of Rights, by first-class,
          postage-prepaid mail, to any record holder of Ordinary Shares who requests a
          copy of the Summary of Rights, at the address of such holder shown on the
          records of the Company. With respect to certificates for Ordinary Shares of the
          Company outstanding as of the Record Date, until the Distribution Date, the
          Rights will be evidenced by the balances indicated in the book-entry account
          system of the transfer agent for the Ordinary Shares or, in the case of
          certificated shares, such certificates registered in the names of the holders
          thereof together with a copy of the Summary of Rights attached thereto. Until
          the Distribution Date (or the earlier of the Redemption Date or the Final
          Expiration Date), the surrender for transfer of any certificate for Ordinary
          Shares of the Company outstanding on the Record Date, with or without a copy of
          the Summary of Rights attached thereto, shall also constitute the transfer of
          the Rights associated with the Ordinary Shares of the Company represented
          thereby.  

    (c)        Rights
shall be issued in respect of all Ordinary Shares issued (or delivered           from the
Company’s treasury) after the Record Date but prior to the           earliest of the
Distribution Date, the Redemption Date or the Final Expiration           Date and shall
be evidenced by the following legends:  

		    (i)        Confirmation
and account statements sent to holders of Ordinary Shares in           book-entry form
(which Ordinary Shares shall also be deemed to represent           certificates for
Rights) shall bear the following legend:  

	 	
The
ordinary shares par value NIS 0.10 per share, of On Track Innovations Ltd. (the “Corporation”)
entitle the holder thereof to certain Rights as set forth in a Rights Agreement between
the Corporation and Continental Stock Transfer & Trust Company dated as of January
12, 2009 as may be amended from time to time (the “Rights Agreement”),
the terms of which are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of the Corporation. Under certain circumstances,
as set forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by the shares to which this statement
relates. The Corporation will mail (or cause the Rights Agent to mail) to the holder of
shares to which this statement relates a copy of the Rights Agreement without charge
promptly after receipt of a written request therefor. Under certain circumstances set
forth in the Rights Agreement, Rights issued to an Acquiring Person and/or any Associate
and/or Affiliate thereof (as such terms are defined in the Rights Agreement) may be null
and void. The Rights shall not be exercisable, and shall be void so long as held, by a
holder in any jurisdiction where the requisite qualification for the issuance to such
holder, or the exercise by such holder of the Rights in such jurisdiction, shall not have
been obtained or be obtainable.  

Page 6

With respect to Ordinary Shares in
book-entry form for which there has been sent a confirmation or account statement
containing the foregoing legend, until the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date, the Rights associated with the Ordinary
Shares shall be evidenced by such Ordinary Shares alone and registered holders of Ordinary
Shares shall also be the registered holders of the associated Rights, and the transfer of
any of such Ordinary Shares shall also constitute the transfer of the Rights associated
with such shares of Ordinary Shares. 

		    (ii)        In
the case of certificated shares, certificates for Ordinary Shares which           become
outstanding (including, without limitation, reacquired Ordinary Shares           referred
to in the last sentence of this paragraph (c)) after the Record Date           but prior
to the earliest of the Distribution Date, the Redemption Date or the           Final
Expiration Date shall have impressed on, printed on, written on or           otherwise
affixed to them the following legend:  

	 	
This
certificate also evidences and entitles the holder hereof to certain rights as set forth
in an Agreement between On Track Innovations Ltd. (the “Corporation”)
and Continental Stock Transfer & Trust Company, as Rights Agent, dated as of January
12, 2009 as may be amended from time to time (the “Agreement”), the
terms of which are hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of the Corporation. Under certain circumstances, as
set forth in the Agreement, such Rights (as defined in the Agreement) will be evidenced
by separate certificates and will no longer be evidenced by this certificate. The
Corporation will mail (or cause the Rights Agent to mail) to the holder of this
certificate a copy of the Agreement without charge after receipt of a written request
therefor. Under certain circumstances set forth in the Rights Agreement, Rights issued to
an Acquiring Person and/or any Associate and/or Affiliate thereof (as such terms are
defined in the Rights Agreement) may be null and void. The Rights shall not be
exercisable, and shall be void so long as held, by a holder in any jurisdiction where the
requisite qualification for the issuance to such holder, or the exercise by such holder
of the Rights in such jurisdiction, shall not have been obtained or be obtainable.  

With respect to such certificates
containing the foregoing legend, until the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date, the Rights associated with the Ordinary
Shares of the Company represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Ordinary Shares of the Company
represented thereby. In the event that the Company purchases or acquires any Ordinary
Shares of the Company after the Record Date but prior to the Distribution Date, the
Redemption Date or the Final Expiration Date, any Rights associated with such Ordinary
Shares of the Company shall be deemed cancelled and retired so that the Company shall not
be entitled to exercise any Rights associated with the Ordinary Shares of the Company
which are no longer outstanding, until such Ordinary Shares so purchased by the Company
are again outstanding. 

Page 7

Section 4.    
Form of Right Certificates. The Right Certificates (and the forms of election to
purchase Ordinary Shares and of assignment to be printed on the reverse thereof) shall be
substantially the same as Exhibit A hereto, and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any applicable rule or
regulation made pursuant thereto or with any applicable rule or regulation of any stock
exchange, trading market or automated quotation system on which the Right Certificates
may from time to time be listed, or to conform to customary usage. Subject to the
provisions of Section 22 hereof, the Right Certificates shall be dated as of the Record
Date and on their face shall entitle the holders thereof to purchase such number of
Ordinary Shares equal to the effective Exercise Ratio at the price of NIS0.10 per share
(the “Purchase Price”), but the number of such Ordinary Shares and the
Purchase Price shall be subject to adjustment as provided herein.  

Section 5.    
Countersignature and Registration. The Right Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its Chief Executive Officer, or any
of its Vice Presidents, or Secretary, either manually or by facsimile signature, shall
have affixed thereto the Company’s seal or a facsimile thereof, and shall be
attested by the Chief Financial Officer of the Company, either manually or by facsimile
signature. The Right Certificates shall be countersigned by the Rights Agent, either
manually or by facsimile signature, and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the individual who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right Certificate
may be signed on behalf of the Company by any individual who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution of this Agreement any such
individual was not such an officer.  

        Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at its principal
office, books for registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right Certificates
and the date of each of the Right Certificates. 

Section 6.    
Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates. Subject to the provisions of Section 14
hereof, at any time after the Close of Business on the Distribution Date, and at or prior
to the Close of Business on the earlier of the Redemption Date or the Final Expiration
Date, any Right Certificate or Right Certificates (other than Right Certificates
representing Rights that have become void pursuant to Section 11(a)(ii) hereof or that
have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined
or exchanged for another Right Certificate or Right Certificates entitling the registered
holder to purchase a like number of Ordinary Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent, and shall
surrender the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent. Thereupon the Rights
Agent shall countersign and deliver to the Person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may require payment
of a sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right Certificates.  

Page 8

        Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of
the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them, and, at
the Company’s request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and deliver a
new Right Certificate of like tenor to the Rights Agent for delivery to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. 

Section 7.    
Exercise of Rights; Purchase Price; Expiration Date of Rights. (a) The registered
holder of any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein), in whole or in part, at any time after the Distribution Date,
upon surrender of the Right Certificate, with the form of election to purchase on the
reverse side thereof duly executed, to the Rights Agent at the principal office of the
Rights Agent, together with payment of the Purchase Price for each Ordinary Share as to
which the Rights are exercised, at or prior to the earliest of (i) the Close of Business
on January 10, 2012, or such later date as determined by the Board of Directors of the
Company (so long as such determination is made prior to January 10, 2012 (the “Final
Expiration Date”), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the “Redemption Date”), or (iii) the time at which
such Rights are exchanged as provided in Section 24 hereof.  

    (b)        The
Purchase Price for each Ordinary Share purchasable pursuant to the exercise           of
a Right shall initially be NIS0.10 per share, and shall be subject to
          adjustment from time to time as provided in Section 11 or 13 hereof, and shall
          be payable in lawful money of the United States of America in accordance with
          paragraph (c) below, based on the official NIS-US$ exchange rate last published
          by the Bank of Israel prior to the first day Rights becoming exercisable.  

    (c)        Upon
receipt of a Right Certificate representing exercisable Rights, with the           form
of election to purchase duly executed, accompanied by payment of the           Purchase
Price for the shares to be purchased and an amount equal to any           applicable
transfer tax required to be paid by the holder of such Right           Certificate in
accordance with Section 9 hereof by certified check,           cashier’s check or
money order payable to the order of the Company, the           Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer           agent of the Ordinary
Shares certificates for such number of Ordinary Shares           equal to the effective
Exercise Ratio to be purchased and the Company hereby           irrevocably authorizes
any such transfer agent to comply with all such requests,           or (B) requisition
from the depositary agent depositary receipts representing           such number of
Ordinary Share as are to be purchased (in which case certificates           for the
Ordinary Shares represented by such receipts shall be deposited by the           transfer
agent of the Ordinary Shares with such depositary agent) and the           Company hereby
directs such depositary agent to comply with such request; (ii)           when
appropriate, requisition from the Company the amount of cash to be paid in           lieu
of issuance of fractional shares in accordance with Section 14 hereof;           (iii)
promptly after receipt of such certificates or depositary receipts, cause           the
same to be delivered to or upon the order of the registered holder of such
          Right Certificate, registered in such name or names as may be designated by
such           holder; and (iv) when appropriate, after receipt, promptly deliver such
cash to           or upon the order of the registered holder of such Right Certificate.  

Page 9

    (d)        In
case the registered holder of any Right Certificate shall exercise less than
          all the Rights evidenced thereby, a new Right Certificate evidencing Rights
          equivalent to the Rights remaining unexercised shall be issued by the Rights
          Agent to the registered holder of such Right Certificate or to such
          holder’s duly authorized assigns, subject to the provisions of Section 14
          hereof.  

Section 8.    
Cancellation and Destruction of Right Certificates. All Right Certificates
surrendered for the purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Right Certificates shall be issued in lieu thereof,
except as expressly permitted by any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent
shall so cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled Right Certificates, and, in such case, shall deliver a
certificate of destruction thereof to the Company.  

Section 9.    
Availability of Ordinary Shares. (a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and unissued Ordinary
Shares or any Ordinary Shares held in it as dormant shares, the number of Ordinary Shares
that will be sufficient to permit the exercise in full of all outstanding Rights in
accordance with the Exercise Ratio.  

    (b)        The
Company shall use its reasonable commercial efforts to (i) file, as soon as
          practicable following the earliest date after any Person, alone or together
with           its Affiliates and Associates, becomes an Acquiring Person, or as soon as
is           required by law following the Distribution Date, as the case may be, a
          registration statement under the Securities Act of 1933, as amended, with
          respect to the securities purchasable upon exercise of the Rights on an
          appropriate form, (ii) cause such registration statement to become effective as
          soon as practicable after such filing, and (iii) cause such registration
          statement to remain effective (with a prospectus at all times meeting the
          requirements of the Act) until the earlier of (A) the date as of which the
          Rights are no longer exercisable for such securities, and (B) the date of the
          expiration of the Rights. The Company will also take such action as may be
          appropriate, and commercially reasonable, under, or to ensure compliance with,
          the securities or “blue sky” laws of the various states in connection
          with the exercisability of the Rights. The Company may temporarily suspend, for
          a period of time not to exceed 180 days after the date set forth in clause (i)
          of the first sentence of this Section 9(b), the exercisability of the Rights in
          order to prepare and file such registration statement and permit it to become
          effective. Upon any such suspension, the Company shall issue a public
          announcement stating that the exercisability of the Rights has been temporarily
          suspended, as well as a public announcement at such time as the suspension is
no           longer in effect. Notwithstanding any provision of this Agreement to the
          contrary, the Rights shall not be exercisable in any jurisdiction unless the
          requisite qualification in such jurisdiction shall have been obtained.  

Page 10

    (c)        The
Company covenants and agrees that it will take all such action as may be
          necessary to ensure that all Ordinary Shares delivered upon exercise of Rights
          shall, at the time of delivery of the certificates for such Ordinary Shares
          (subject to payment of the Purchase Price), be duly and validly authorized and
          issued and fully paid and nonassessable shares.  

    (d)        The
Company further covenants and agrees that it will pay when due and payable           any
and all federal and state transfer taxes and charges which may be payable in
          respect of the issuance or delivery of the Right Certificates or of any
Ordinary           Shares upon the exercise of Rights. The Company shall not, however, be
required           to pay any transfer tax which may be payable in respect of any
transfer or           delivery of Right Certificates to a Person other than, or the
issuance or           delivery of certificates or depositary receipts or entries in the
book-entry           account system of the transfer agent for the Ordinary Shares in a
name other           than that of, the registered holder of the Right Certificate
evidencing Rights           surrendered for exercise or to issue or to deliver any
certificates for Ordinary           Shares or depositary receipts or entries in the
book-entry account system of the           transfer agent for Ordinary Shares upon the
exercise of any Rights until any           such tax shall have been paid (any such tax
being payable by the holder of such           Right Certificate at the time of surrender)
or until it has been established to           the Company’s satisfaction that no
such tax is due.  

Section 10.    
Ordinary Shares Record Date. Each Person in whose name any certificate or entry in
the book-entry account system of the transfer agent for Ordinary Shares are issued upon
the exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Ordinary Shares represented thereby on, and such certificate or entry in
the book-entry account system of the transfer agent shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided, however,
that, if the date of such surrender and payment is a date upon which the Ordinary Shares
transfer books of the Company are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate or entry in the book-entry account
system of the transfer agent shall be dated, the next succeeding Business Day on which
the Ordinary Shares transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any
rights of a shareholder of the Company with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote, to receive dividends or
other distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.  

Page 11

Section 11.    
Adjustment of Purchase Price, Number of Shares or Number of Rights. The Purchase
Price, the number of Ordinary Shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this Section 11.  

    (a)        (i)
In the event the Company shall at any time after the date of this Agreement           (A)
declare a dividend on the Ordinary Shares payable in Ordinary Shares, (B)
          subdivide the outstanding Ordinary Shares, (C) combine the outstanding Ordinary
          Shares into a smaller number of Ordinary Shares or (D) issue any shares of its
          share capital in a reclassification of the Ordinary Shares (including any such
          reclassification in connection with a consolidation or merger in which the
          Company is the continuing or surviving corporation), except as otherwise
          provided in this Section 11(a), the Purchase Price in effect at the time of the
          record date for such dividend or of the effective date of such subdivision,
          combination or reclassification, and the number and kind of share capital
          issuable on such date, shall be proportionately adjusted so that the holder of
          any Right exercised after such time shall be entitled to receive, upon payment
          of the Purchase Price then in effect, the aggregate number and kind of shares
of           share capital which, if such Right had been exercised immediately prior to
such           date and at a time when the Ordinary Shares transfer books of the Company
were           open, such holder would have owned upon such exercise and been entitled to
          receive by virtue of such dividend, subdivision, combination or
          reclassification; provided, however, that in no event shall the
          consideration to be paid upon the exercise of one Right be less than the
          aggregate par value of the share capital of the Company issuable upon exercise
          of one Right.  

        If
an event occurs which would require an adjustment under both Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii). 

		    (ii)        Subject
to Section 24 hereof, in the event any Person becomes an Acquiring           Person, each
holder of a Right shall thereafter have a right to receive such           number of
Ordinary Shares per each Right held thereby, equal to the then           effective
Exercise Ratio, upon exercise thereof at a price equal to the then           current
Purchase Price. In the event that any Person shall become an Acquiring           Person
and the Rights shall then be outstanding, the Company shall not take any           action
which would eliminate or diminish the benefits intended to be afforded by           the
Rights, except as set forth in this Agreement.  

        From
and after the occurrence of such event, any Rights that are or were acquired or
beneficially owned by any Acquiring Person (and/or any Associate and/or Affiliate of such
Acquiring Person) shall be void, and any holder of such Rights shall thereafter have no
right to exercise such Rights under any provision of this Agreement. No Right Certificate
shall be issued pursuant to Section 3 hereof that represents Rights beneficially owned by
an Acquiring Person whose Rights would be void pursuant to the preceding sentence and/or
any Associate and/or Affiliate thereof; no Right Certificate shall be issued at any time
upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant
to the preceding sentence and/or any Associate and/or Affiliate thereof or to any nominee
of such Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to
the Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant
to the preceding sentence shall be cancelled. 

Page 12

		    (iii)        In
the event that there shall not be sufficient Ordinary Shares issued but not
          outstanding or authorized but unissued to permit the exercise in full of the
          Rights in accordance with subparagraph (ii) above, the Company shall take all
          such action as may be necessary to authorize additional Ordinary Shares for
          issuance upon exercise of the Rights.  

    (b)        No
adjustment in the Purchase Price shall be required unless such adjustment           would
require an increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments which by reason of this           Section 11(b) are not required to
be made shall be carried forward and taken           into account in any subsequent
adjustment. All calculations under this Section           11 shall be made to the nearest
cent or to the nearest one one-millionth of an           Ordinary Share or one
ten-thousandth of any other share or security as the case           may be.
Notwithstanding the first sentence of this Section 11(b), any adjustment
          required by this Section 11 shall be made no later than the earlier of (i)
three           years from the date of the transaction which requires such adjustment, or
(ii)           the date of the expiration of the right to exercise any Rights.  

    (c)        If,
as a result of an adjustment made pursuant to Section 11(a) hereof, the           holder
of any Right thereafter exercised shall become entitled to receive any           share
capital of the Company other than Ordinary Shares, thereafter the number           of
such other shares so receivable upon exercise of any Right shall be subject           to
adjustment from time to time in a manner and on terms as nearly equivalent as
          practicable to the provisions with respect to the Ordinary Shares contained in
          Section 11(a) and (b) hereof, inclusive, and the provisions of Sections 7, 9,
10           and 13 hereof with respect to the Ordinary Shares shall apply on like terms
to           any such other shares.  

    (d)        All
Rights originally issued by the Company subsequent to any adjustment made to
          the Purchase Price hereunder shall evidence the right to purchase, at the
          adjusted Purchase Price, the number Ordinary Share purchasable from time to
time           hereunder upon exercise of the Rights, all subject to further adjustment
as           provided herein.  

    (e)        The
Company may elect, on or after the date of any adjustment of the Purchase
          Price, to adjust the number of Rights in substitution for any adjustment in the
          number of Ordinary Shares issuable upon exercise of the Rights. Each of the
          Rights outstanding after such adjustment of the number of Rights shall be
          exercisable for such number of Ordinary Shares equal to the effective Exercise
          Ratio for which a Right was exercisable immediately prior to such adjustment.
          Each Right held of record prior to such adjustment of the number of Rights
shall           become that number of Rights (calculated to the nearest one
ten-thousandth)           obtained by dividing the Purchase Price in effect immediately
prior to           adjustment of the Purchase Price by the Purchase Price in effect
immediately           after adjustment of the Purchase Price. The Company shall make a
public           announcement of its election to adjust the number of Rights, indicating
the           record date for the adjustment, and, if known at the time, the amount of
the           adjustment to be made. This record date may be the date on which the
Purchase           Price is adjusted or any day thereafter, but, if the Right
Certificates have           been issued, shall be at least 10 days later than the date of
the public           announcement. If Right Certificates have been issued, upon each
adjustment of           the number of Rights pursuant to this Section 11(e), the Company
shall, as           promptly as practicable, cause to be distributed to holders of record
of Right           Certificates on such record date Right Certificates evidencing,
subject to           Section 14 hereof, the additional Rights to which such holders shall
be entitled           as a result of such adjustment, or, at the option of the Company,
shall cause to           be distributed to such holders of record in substitution and
replacement for the           Right Certificates held by such holders prior to the date
of adjustment, and           upon surrender thereof, if required by the Company, new
Right Certificates           evidencing all the Rights to which such holders shall be
entitled after such           adjustment. Right Certificates so to be distributed shall
be issued, executed           and countersigned in the manner provided for herein, and
shall be registered in           the names of the holders of record of Right Certificates
on the record date           specified in the public announcement.  

Page 13

    (f)        Irrespective
of any adjustment or change in the Purchase Price or in the number           of Ordinary
Shares issuable upon the exercise of the Rights, the Right           Certificates
theretofore and thereafter issued may continue to express the           Purchase Price
and the number of Ordinary Shares equal to the effective Exercise           Ratio which
were expressed in the initial Right Certificates issued hereunder.  

    (g)        Before
taking any action that would cause an adjustment reducing the Purchase           Price
below the then par value, if any, of the Ordinary Shares issuable upon           exercise
of the Rights, the Company shall take any corporate action which may,           in the
opinion of its counsel, be necessary in order that the Company may           validly and
legally issue fully paid and nonassessable Ordinary Shares at such           adjusted
Purchase Price.  

    (h)        In
any case in which this Section 11 shall require that an adjustment in the
          Purchase Price be made effective as of a record date for a specified event, the
          Company may elect to defer until the occurrence of such event the issuing to
the           holder of any Right exercised after such record date of the Ordinary Shares
and           other share capital or securities of the Company, if any, issuable upon
such           exercise over and above the Ordinary Shares and other shares capital or
          securities of the Company, if any, issuable upon such exercise on the basis of
          the Purchase Price in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due bill or           other appropriate
instrument evidencing such holder’s right to receive such           additional
shares upon the occurrence of the event requiring such adjustment.  

    (i)        In
the event that, at any time after the date of this Agreement and prior to the
          Distribution Date, the Company shall (i) declare or pay any dividend on the
          Ordinary Shares payable in Ordinary Shares, or (ii) effect a subdivision,
          combination or consolidation of the Ordinary Shares (by reclassification or
          otherwise than by payment of dividends in Ordinary Shares) into a greater or
          lesser number of Ordinary Shares, then, in any such case, (A) the number of
          Ordinary Shares purchasable after such event upon proper exercise of each Right
          shall be adjusted accordingly, and (B) each Ordinary Share outstanding
          immediately after such event shall have issued with respect to it that number
of           Rights which each Ordinary Share outstanding immediately prior to such event
had           issued with respect to it. The adjustments provided for in this Section
11(i)           shall be made successively whenever such a dividend is declared or paid
or such           a subdivision, combination or consolidation is effected.  

Section 12.    
Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment
is made as provided in Section 11 or 13 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment and a brief statement of the facts accounting
for such adjustment, (b) file with the Rights Agent and with each transfer agent for the
Ordinary Shares and the Securities and Exchange Commission a copy of such certificate and
(c) if such adjustment occurs at any time after the Distribution Date, mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section 25
hereof.  

Page 14

Section 13.    
Consolidation, Merger or Sale or Transfer of Assets or Earning Power. In the
event, directly or indirectly, at any time after a Person has become an Acquiring Person,
(a) the Company shall consolidate with, or merge with and into, any other Person, (b) any
Person shall consolidate with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Ordinary Shares shall be changed into or
exchanged for shares or other securities of any other Person (or the Company) or cash or
any other property, or (c) the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person other than the
Company or one or more of its wholly-owned Subsidiaries, then, and in each such case,
proper provision shall be made so that (i) each holder of a Right (except as otherwise
provided herein) shall thereafter have the right to receive, upon the exercise thereof at
a price equal to NIS0.10 per share, in accordance with the terms of this Agreement and in
lieu of Ordinary Shares, the number of securities of such other Person to which each
shareholder is entitled to for each of its Ordinary Shares of the Company (including the
Company as successor thereto or as the surviving corporation) multiplied by the effective
Exercise Ratio; (ii) the issuer of such securities shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the term “Company” shall
thereafter be deemed to refer to such issuer; and (iv) such issuer shall take such steps
(including, but not limited to, the reservation of a sufficient number of its securities
in accordance with Section 9 hereof) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to the securities thereafter deliverable upon the
exercise of the Rights. The Company shall not consummate any such consolidation, merger,
sale or transfer unless, prior thereto, the Company and such issuer shall have executed
and delivered to the Rights Agent a supplemental agreement so providing. The Company
shall not enter into any transaction of the kind referred to in this Section 13 if at the
time of such transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the consummation of
such transaction, would eliminate or substantially diminish the benefits intended to be
afforded by the Rights. The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.  

Section 14.    
Fractional Rights and Fractional Shares. (a) The Company shall not be required to
issue fractions of Rights or to distribute Right Certificates which evidence fractional
Rights. If the Company elects not to issue such fractional Rights, the Company shall pay,
in lieu of such fractional Rights, to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing price for any day
shall be the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either case, as
reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on NASDAQ or, if the Rights are not listed or
admitted to trading on NASDAQ, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use or, if on
any such date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company. If on any such date no
such market maker is making a market in the Rights, the fair value of the Rights on such
date as determined in good faith by the Board of Directors of the Company shall be used.  

Page 15

    (b)        The
Company shall not be required to issue fractions of Ordinary Shares upon
          exercise of the Rights or to distribute certificates or make any entries in the
          book-entry account system of the transfer agent that evidence fractional
          Ordinary Shares. If the Company elects not to issue such fractional Ordinary
          Shares, the Company shall pay, in lieu of such fractional Ordinary Shares, to
          the registered holders of Right Certificates at the time such Rights are
          exercised as herein provided an amount in cash equal to the same fraction of
the           current market value of one Ordinary Share. For the purposes of this
Section           14(b), the current market value of an Ordinary Share shall be the
closing price           of an Ordinary Share for the Trading Day immediately prior to the
date of such           exercise.  

    (c)        The
holder of a Right, by the acceptance of the Right, expressly waives such           holder’s
right to receive any fractional Rights or any fractional shares           upon exercise
of a Right (except as provided above).  

Section 15.    
Rights of Action. All rights of action in respect of this Agreement, excepting the
rights of action vested in the Rights Agent pursuant to Section 18 hereof, are vested in
the respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Ordinary Shares); and any registered
holder of any Right Certificate (or, prior to the Distribution Date, of the Ordinary
Shares), without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Ordinary Shares), may, in such
holder’s own behalf and for such holder’s own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, such holder’s right to exercise the Rights evidenced by
such Right Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement, and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.  

Section 16.    
Agreement of Right Holders. Every holder of a Right, by accepting the same,
consents and agrees with the Company and the Rights Agent and with every other holder of
a Right that:  

Page 16

    (a)        prior
to the Distribution Date, the Rights will be evidenced by the balances
          indicated in the book-entry account system of the transfer agent for the
          Ordinary Shares registered in the names of the holders of the Ordinary Shares
          (which Ordinary Shares shall also be deemed to represent certificates for
          Rights) or, in the case of certificated shares, the certificates for the
          Ordinary Shares registered in the names of the holders of the Ordinary Shares
          (which certificates for shares of Ordinary Shares shall also constitute
          certificates for Rights) and each Right will be transferable only in connection
          with the transfer of Ordinary Shares;  

    (b)        after
the Distribution Date, the Right Certificates are transferable only on the
          registry books of the Rights Agent if surrendered at the principal office of
the           Rights Agent, duly endorsed or accompanied by a proper instrument of
transfer;  

    (c)        the
Company and the Rights Agent may deem and treat the person in whose name the
          Right Certificate (or, prior to the Distribution Date, the associated balance
          indicated in the book-entry account system of the transfer agent for the
          Ordinary Shares or, in the case of certificated shares, the associated Ordinary
          Shares certificate) is registered as the absolute owner thereof and of the
          Rights evidenced thereby (notwithstanding any notations of ownership or writing
          on the Right Certificate or the associated balance indicated in the book-entry
          account system of the transfer agent for the Ordinary Shares or, in the case of
          certificated shares, the associated Ordinary Shares certificate made by anyone
          other than the Company or the Rights Agent) for all purposes whatsoever, and
          neither the Company nor the Rights Agent shall be affected by any notice to the
          contrary; and  

    (d)        notwithstanding
anything in this Agreement to the contrary, neither the Company           nor the Rights
Agent shall have any liability to any holder of a Right or other           Person as a
result of its inability to perform any of its obligations under this           Agreement
by reason of any preliminary or permanent injunction or other order,           decree or
ruling issued by a court of competent jurisdiction or by a           governmental,
regulatory or administrative agency or commission, or any statute,           rule,
regulation or executive order promulgated or enacted by any governmental
          authority, prohibiting or otherwise restraining performance of such obligation;
          provided, however, the Company must use its reasonable best efforts to have any
          such order, decree or ruling lifted or otherwise overturned as soon as
possible.  

Section     17.
Right Certificate Holder Not Deemed a Shareholder. No holder, as such, of any
Right Certificate shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of the Ordinary Shares or any other securities of the Company which
may at any time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter submitted
to shareholders at any meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting shareholders (except
as provided in Section 25 hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.  

Page 17

Section 18.    
Concerning the Rights Agent. The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder, and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability, or expense
incurred without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.  

        The
Rights Agent shall be protected and shall incur no liability for, or in respect of any
action taken, suffered or omitted by it in connection with, its administration of this
Agreement in reliance upon any Right Certificate or certificate for the Ordinary Shares or
Ordinary Shares or any balance indicated in the book-entry account system of the transfer
agent, or, for other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper person or
persons, or otherwise upon the advice of counsel as set forth in Section 20 hereof. 

Section 19.    
Merger or Consolidation or Change of Name of Rights Agent. Any corporation into
which the Rights Agent or any successor Rights Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation to which
the Rights Agent or any successor Rights Agent shall be a party, or any entity succeeding
to the stock transfer or corporate trust powers of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the parties
hereto; provided that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21. The purchase of all or
substantially all of the Rights Agent’s assets employed in the performance of
transfer agent activities shall be deemed a merger or consolidation for purposes of this
Section 19. In case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned; and, in
case at that time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and, in all such
cases, such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.  

        In
case at any time the name of the Rights Agent shall be changed and at such time any of the
Right Certificates shall have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver Right Certificates so
countersigned; and, in case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either in its
prior name or in its changed name; and, in all such cases, such Right Certificates shall
have the full force provided in the Right Certificates and in this Agreement. 

Page 18

Section 20.    
Duties of Rights Agent. The Rights Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their acceptance thereof, shall be
bound:  

    (a)        The
Rights Agent may consult with legal counsel (who may be legal counsel for           the
Company), and the opinion of such counsel shall be full and complete
          authorization and protection to the Rights Agent as to any action taken or
          omitted by it in good faith and in accordance with such opinion.  

    (b)        Whenever
in the performance of its duties under this Agreement the Rights Agent           shall
deem it necessary or desirable that any fact or matter be proved or           established
by the Company prior to taking or suffering any action hereunder,           such fact or
matter (unless other evidence in respect thereof be herein           specifically
prescribed) may be deemed to be conclusively proved and established           by a
certificate signed by any one of the Chairman of the Board, the Chief           Executive
Officer, any Vice President, Secretary or the Chief Financial Officer           of the
Company and delivered to the Rights Agent; and such certificate shall be           full
authorization to the Rights Agent for any action taken or suffered in good
          faith by it under the provisions of this Agreement in reliance upon such
          certificate.  

    (c)        The
Rights Agent shall be liable hereunder to the Company and any other Person           only
for its own gross negligence, bad faith or willful misconduct.  

    (d)        The
Rights Agent shall not be liable for or by reason of any of the statements           of
fact or recitals contained in this Agreement or in the Right Certificates
          (except its countersignature thereof) or be required to verify the same, but
all           such statements and recitals are and shall be deemed to have been made by
the           Company only.  

    (e)        The
Rights Agent shall not be under any responsibility in respect of the           validity
of this Agreement or the execution and delivery hereof (except the due
          execution hereof by the Rights Agent) or in respect of the validity or
execution           of any Right Certificate (except its countersignature thereof); nor
shall it be           responsible for any breach by the Company of any covenant or
condition contained           in this Agreement or in any Right Certificate; nor shall it
be responsible for           any change in the exercisability of the Rights (including
the Rights becoming           void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the           Rights (including any adjustment required under
the provisions of Sections 11 or           13 or the manner, method or amount thereof)
provided for in Section 3, 11, 13,           23 or 24 hereof, or the ascertaining of the
existence of facts that would           require any such change or adjustment (except
with respect to the exercise of           Rights evidenced by Right Certificates after
actual notice that such change or           adjustment is required); nor shall it by any
act hereunder be deemed to make any           representation or warranty as to the
authorization or reservation of any           Ordinary Shares to be issued pursuant to
this Agreement or any Right Certificate           or as to whether any Ordinary Shares
will, when issued, be validly authorized           and issued, fully paid and
nonassessable.  

    (f)        The
Company agrees that it will perform, execute, acknowledge and deliver or           cause
to be performed, executed, acknowledged and delivered all such further and
          other acts, instruments and assurances as may reasonably be required by the
          Rights Agent for the carrying out or performing by the Rights Agent of the
          provisions of this Agreement.  

Page 19

    (g)        The
Rights Agent is hereby authorized and directed to accept instructions with
          respect to the performance of its duties hereunder from any one of the Chairman
          of the Board, the Chief Executive Officer, the President, any Vice President,
          the Secretary or the Chief Financial Officer of the Company, and to apply to
          such officers for advice or instructions in connection with its duties, and it
          shall not be liable for any action taken or suffered by it in good faith in
          accordance with instructions of any such officer or for any delay in acting
          while waiting for those instructions.  

    (h)        The
Rights Agent and any shareholder, director, officer or employee of the           Rights
Agent may buy, sell or deal in any of the Rights or other securities of           the
Company or become pecuniarily interested in any transaction in which the
          Company may be interested, or contract with or lend money to the Company or
          otherwise act as fully and freely as though it were not Rights Agent under this
          Agreement. Nothing herein shall preclude the Rights Agent from acting in any
          other capacity for the Company or for any other legal entity.  

    (i)        The
Rights Agent may execute and exercise any of the rights or powers hereby           vested
in it or perform any duty hereunder either itself or by or through its
          attorneys or agents, and the Rights Agent shall not be answerable or
accountable           for any act, default, neglect or misconduct of any such attorneys
or agents or           for any loss to the Company resulting from any such act, default,
neglect or           misconduct, provided that reasonable care was exercised in the
selection and           continued employment thereof.  

Section 21.    
Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign
and be discharged from its duties under this Agreement upon 30 days’ notice in
writing mailed to the Company and to each transfer agent of the Ordinary Shares or
Ordinary Shares by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. In the event the transfer agency relationship in effect
between the Company and the Rights Agent terminates, the Rights Agent will be deemed to
have resigned automatically and be discharged from its duties under this Agreement as of
the effective date of such termination, and the Company shall be responsible for sending
any required notice. The Company may remove the Rights Agent or any successor Rights
Agent upon 30 days’notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Ordinary Shares or Ordinary
Shares by registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the Rights Agent. If
the Company shall fail to make such appointment within a period of 30 days after giving
notice of such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (which holder shall, with such notice, submit such holder’s Right
Certificate for inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be a corporation or other entity organized and doing business under the laws
of the United States or of the State of Delaware (or of any other state of the United
States so long as such corporation or other entity is authorized to do business as a
banking institution such other state), in good standing, which is authorized under such
laws to exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its appointment
as Rights Agent a combined capital and surplus, along with its Affiliates, of at least
$50 million. After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the Company shall
file notice thereof in writing with the predecessor Rights Agent and each transfer agent
of the Ordinary Shares or Ordinary Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.  

Page 20

Section 22.    
Issuance of New Right Certificates. Notwithstanding any of the provisions of this
Agreement or of the Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such form as may be approved by the Board of
Directors of the Company to reflect any adjustment or change in the Purchase Price and
the number or kind or class of shares or other securities or property purchasable under
the Right Certificates made in accordance with the provisions of this Agreement.  

Section 23.    
Redemption. (a) The Board of Directors of the Company may, at its option, at any
time prior to 10 days after such time that any Person becomes an Acquiring Person (or
such later date as may be determined by action of the Board of Directors of the Company
prior to such time as any Person becomes an Acquiring Person), redeem all but not less
than all the then outstanding Rights for no consideration. The redemption of the Rights
by the Board of Directors of the Company may be made effective at such time, on such
basis and with such conditions as the Board of Directors of the Company, in its sole
discretion, may establish.  

    (b)        Immediately
upon the action of the Board of Directors of the Company ordering           the
redemption of the Rights pursuant to paragraph (a) of this Section 23, and
          without any further action and without any notice, the right to exercise the
          Rights will terminate and the holders of Rights shall have no further right.
The           Company shall promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any           such notice
shall not affect the validity of such redemption. Within 10 days           after such
action of the Board of Directors of the Company ordering the           redemption of the
Rights, the Company shall mail a notice of redemption to all           the holders of the
then outstanding Rights at their last addresses as they           appear upon the
registry books of the Rights Agent or, prior to the Distribution           Date, on the
registry books of the transfer agent for the Ordinary Shares. Any           notice which
is mailed in the manner herein provided shall be deemed given,           whether or not
the holder receives the notice. Neither the Company nor any of           its Affiliates
and/or Associates may redeem, acquire or purchase for value any           Rights at any
time in any manner other than that specifically set forth in this           Section 23 or
in Section 24 hereof, and other than in connection with the           purchase of
Ordinary Shares prior to the Distribution Date.  

Page 21

Section 24.    
Exchange. (a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for Ordinary Shares at an
exchange ratio equal to the effective Exercise Ratio per Right, appropriately adjusted to
reflect any adjustment in the number of Rights. Notwithstanding the foregoing, the Board
of Directors of the Company shall not be empowered to effect such exchange at any time
after any Person (other than the Company, any Subsidiary of the Company, any employee
benefit or stock ownership plan of the Company or any such Subsidiary, or any entity
holding Ordinary Shares for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or more of
the Ordinary Shares then outstanding.  

    (b)        Immediately
upon the action of the Board of Directors of the Company ordering           the exchange
of any Rights pursuant to paragraph (a) of this Section 24 and           without any
further action and without any notice, the right to exercise such           Rights shall
terminate and the only right thereafter of a holder of such Rights           shall be to
receive that number of Ordinary Shares equal to the number of such           Rights held
by such holder multiplied by the Exchange Ratio. The Company shall           promptly
give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall           not affect the validity of
such exchange. The Company promptly shall mail a           notice of any such exchange to
all of the holders of such Rights at their last           addresses as they appear upon
the registry books of the Rights Agent. Any notice           which is mailed in the
manner herein provided shall be deemed given, whether or           not the holder
receives the notice. Each such notice of exchange will state the           method by
which the exchange of the Ordinary Shares for Rights will be effected,           and, in
the event of any partial exchange, the number of Rights which will be
          exchanged. Any partial exchange shall be effected pro rata based
          on the number of Rights (other than Rights which have become void pursuant to
          the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.  

    (c)        In
the event that there shall not be sufficient Ordinary Shares issued but not
          outstanding or authorized but unissued to permit any exchange of Rights as
          contemplated in accordance with this Section 24, the Company shall take all
such           action as may be necessary to authorize additional Ordinary Shares for
issuance           upon exchange of the Rights.  

    (d)        The
Company shall not be required to issue fractions of Ordinary Shares or to
          distribute certificates or make any entries in the book-entry account system of
          the transfer agent which evidence fractional Ordinary Shares. In lieu of such
          fractional Ordinary Shares, the Company shall pay to the registered holders of
          the Right Certificates with regard to which such fractional Ordinary Shares
          would otherwise be issuable an amount in cash equal to the same fraction of the
          current market value of a whole Ordinary Share. For the purposes of this
          paragraph (d), the current market value of a whole Ordinary Share shall be the
          closing price of a Ordinary Share for the Trading Day immediately prior to the
          date of exchange pursuant to this Section 24.  

Page 22

Section 25.    
Notice of Certain Events. (a) In case the Company shall, at any time after the
Distribution Date, propose (i) to pay any dividend payable in shares of any class to the
holders of the Ordinary Shares or to make any other distribution to the holders of the
Ordinary Shares (other than a regular quarterly cash dividend and other than repurchase
of Company’s own shares), (ii) to offer to the holders of the Ordinary Shares rights
or warrants to subscribe for or to purchase any additional Ordinary Shares or shares of
any class or any other securities, rights or options, (iii) to effect any
reclassification of the Ordinary Shares (other than a reclassification involving only the
subdivision of outstanding Ordinary Shares), (iv) to effect any merger, consolidation or
other combination into or with, or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets, cash flow or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the liquidation,
dissolution or winding up of the Company, or (vi) to declare or pay any dividend on the
Ordinary Shares payable in Ordinary Shares or to effect a subdivision, combination or
consolidation of the Ordinary Shares (by reclassification or otherwise than by payment of
dividends in Ordinary Shares), then, in each such case, the Company shall give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such share
dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by the holders of the
Ordinary Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of the Ordinary Shares for purposes of such action,
and, in the case of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by the holders of the
Ordinary Shares, whichever shall be the earlier.  

    (b)        In
case the event set forth in Section 11(a)(ii) hereof shall occur, then the
          Company shall, as soon as practicable thereafter, give to each holder of a
Right           Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of           such event, which notice shall describe such event and the
consequences of such           event to holders of Rights under Section 11(a)(ii) hereof.  

Section 26.    
Notices. Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:  

	 	
On Track Innovations Ltd.                   
 Z.H.R Industrial Zone                 
   P.O. Box 32 ,  Rosh Pina 12000 Israel          
         Attention: Company's Secretary 

Subject to the provisions of Section
21 hereof, any notice or demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by overnight delivery service or first-class mail,
postage prepaid, addressed (until another address is filed in writing with the Company) as
follows: 

	 	
Continental Stock Transfer & Trust Company 
17 Battery Place, 8th Floor 
New York, NY 10004 
Attention: Compliance Department 

Page 23

Notices or demands authorized by this
Agreement to be given or made by the Company or the Rights Agent to the holder of any
Right Certificate shall be sufficiently given or made if sent by overnight delivery
service or first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company. 

Section 27.    
Supplements and Amendments. The Company may from time to time supplement or amend
(including terminate) this Agreement without the approval of any holders of Right
Certificates in order to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any other provisions herein,
or to make any other provisions with respect to the Rights which the Company may deem
necessary or desirable, any such supplement or amendment to be evidenced by a writing
signed by the Company and the Rights Agent; provided, however, that, from
and after such time as any Person becomes an Acquiring Person, this Agreement shall not
be amended in any manner which would adversely affect the interests of the holders of
Rights (other than an Acquiring Person or an Affiliate or Associate thereof). Without
limiting the foregoing, the Company may at any time prior to such time as any Person
becomes an Acquiring Person amend this Agreement to lower the thresholds set forth in
Section 1(a) and 3(a) hereof to not less than 10% (the “Reduced Threshold”)
provided, however, that no Person who beneficially owns a number of
Ordinary Shares equal to or greater than the Reduced Threshold shall become an Acquiring
Person unless such Person shall, after the public announcement of the Reduced Threshold,
increase its beneficial ownership of the then outstanding Ordinary Shares (other than as
a result of an acquisition of Ordinary Shares by the Company) to an amount equal to or
greater than the greater of (x) the Reduced Threshold or (y) the sum of (i) the lowest
beneficial ownership of such Person as a percentage of the outstanding Ordinary Shares as
of any date on or after the date of the public announcement of such Reduced Threshold
plus (ii) .001%.  

Section 28.    
Successors. All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.  

Section 29.    
Determinations and Actions by the Board of Directors, etc. For all purposes of
this Agreement, any calculation of the number of Ordinary Shares outstanding at any
particular time, including for purposes of determining the particular percentage of such
outstanding Ordinary Shares of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board of Directors of the Company shall have the
exclusive power, authority and discretion to administer this Agreement and to exercise
all rights and powers specifically granted to such Board of Directors or to the Company,
or as may be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including, but not limited to, a determination to
redeem or not redeem the Rights, to amend the Agreement or to find or to announce
publicly that any Person has become an Acquiring Person). All such actions, calculations,
interpretations and determinations (including, for purposes of clauses (i) and (iii)
below, all omissions with respect to the foregoing) which are done or made by the Board
of Directors of the Company or the Company (i) shall be within the discretion of the
Board of Directors, (ii) shall be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Right Certificates and all other parties, and (iii)
shall not subject the Board of Directors of the Company to any liability to the holders
of the Rights and Right Certificates.  

Page 24

Section 30.    
Benefits of this Agreement. Nothing in this Agreement shall be construed to give
to any Person other than the Company, the Rights Agent and the registered holders of the
Right Certificates (and, prior to the Distribution Date, the Ordinary Shares) any legal
or equitable right, remedy or claim under this Agreement; but this Agreement shall be for
the sole and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the Ordinary
Shares).  

Section 31.    
Severability. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.  

Section 32.    
Governing Law. This Agreement shall be deemed to be a contract made under the laws
of the State of New York and for all purposes shall be governed by and construed in
accordance with the laws of such state applicable to contracts to be made and performed
entirely within such state (where and each Right Certificate issued hereunder shall be
governed by the laws of the State of Israel).  

Section 33.    
Counterparts. This Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.  

Section 34.    
Descriptive Headings. Descriptive headings of the several Sections of this
Agreement are inserted for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.  

Section 35.    
Force Majeure. Notwithstanding anything to the contrary contained herein, the
Rights Agent shall not be liable for any delays or failures in performance resulting from
acts beyond its reasonable control including, without limitation, acts of God, terrorist
acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of
computer facilities, or loss of data due to power failures or mechanical difficulties
with information storage or retrieval systems, labor difficulties, war, or civil unrest.  

Page 25

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
attested, all as of the day and year first above written. 

	ON TRACK INNOVATIONS LTD.

By:
——————————————

Oded Bashan
CEO		

	CONTINENTAL STOCK TRANSFER & TRUST COMPANY

By:
——————————————

Michael G. Mullings
Vice President		

Page 26

Exhibit A  

Form of Right
Certificate 

		
		
		
		
		
	Certificate No. R-	______ Rights

NOT EXERCISABLE AFTER JANUARY 10,
2012 OR SUCH LATER DATE AS DETERMINED BY THE COMPANY’S BOARD OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION FOR NO CONSIDERATION AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT. 

Right Certificate 

On Track Innovations
Ltd. 

        This
certifies that ____________________, or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner thereof, subject
to the terms, provisions and conditions of the Agreement, dated as of January 12, 2009
(the “Agreement”), between On Track Innovations Ltd., a company
incorporated under the laws of the State of Israel (the “Company”), and
Continental Stock Transfer & Trust Company (the “Rights Agent”), to
purchase from the Company at any time after the Distribution Date (as such term is
defined in the Agreement) and prior to 5:00 P.M., New York, New York time, on January 10,
2012 (or such later date as determined by the Board of Directors of the Company (so long
as such determination is made prior to January 10, 2012)) at the principal office of the
Rights Agent, or at the office of its successor as Rights Agent, _____ [effective
Exercise Ratio] fully paid non-assessable Ordinary Shares, par value NIS 0.10 per share,
of the Company (the “Ordinary Shares”), at a purchase price of NIS0.10 per one
Ordinary Share (the “Purchase Price”), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of Ordinary Shares which may
be purchased upon exercise hereof) set forth above, and the Purchase Price set forth
above, are the number and Purchase Price as of ____________, based on the Ordinary Shares
as constituted at such date. As provided in the Agreement, the Purchase Price and the
number of Ordinary Share which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon the happening
of certain events.  

        This
Right Certificate is subject to all of the terms, provisions and conditions of the
Agreement, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Agreement reference is hereby made for a
full description of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Agreement are on file at the principal executive offices of the Company and
the offices of the Rights Agent.  

Page 27

        This
Right Certificate, with or without other Right Certificates, upon surrender at the
principal office of the Rights Agent, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Ordinary Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.  

        Subject
to the provisions of the Agreement, the Rights evidenced by this Right Certificate (i) may
be redeemed by the Company for no consideration; or (ii) may be exchanged in whole or in
part for Ordinary Shares or shares of the Company’s Ordinary Shares Stock, par value
NIS 0.10 per share. 

        No
fractional Ordinary Shares will be issued upon the exercise of any Right or Rights
evidenced hereby, but, in lieu thereof, a cash payment will be made, as provided in the
Agreement. 

        No
holder of this Right Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of the Ordinary Shares or of any other securities of the
Company which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting shareholders (except as provided in the Agreement), or to
receive dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided in the
Agreement. 

        This
Right Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned by the Rights Agent. 

        WITNESS
the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of ______,
___________. 

ON TRACK INNOVATIONS LTD. 

By: 
——————————————

Name: 
——————————————

Title: 
——————————————

Page 28

Form of Reverse Side of
Right Certificate 

FORM OF ASSIGNMENT 

(To
be executed by the registered holder if such
holder
desires to transfer the Right Certificate.) 

        FOR
VALUE RECEIVED _________________________________ hereby sells, assigns and transfers unto ______________________________________________________________

(Please
print name and address of transferee) 

this Right Certificate, together with
all right, title and interest therein, and does hereby irrevocably constitute and appoint
_________ attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution. 

Dated: ___________________ 

			
——————————————
Signature

Signature Guaranteed: 

        Signatures
must be guaranteed by an eligible guarantor institution which is a participant in the
Securities Transfer Agents Medallion Program (“STAMP”), the NASDAQ Medallion
Signature Program (“MSP”), or the Stock Exchanges Medallion Program
(“SEMP”), pursuant to Rule 17Ad-15 promulgated under the Securities Exchange Act
of 1934, as amended. Guarantees by a notary public are not acceptable. 

        The
undersigned hereby certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined
in the Agreement). 

			
——————————————
Signature

Page 29

Form of Reverse Side of
Right Certificate – continued 

FORM OF ELECTION TO
PURCHASE 

(To
be executed if holder desires to exercise
Rights represented by
the Right Certificate.) 

To: On Track Innovations
Ltd. 

        The
undersigned hereby irrevocably elects to exercise ______ Rights represented by this Right
Certificate to purchase the Ordinary Shares issuable upon the exercise of such Rights and
requests that certificates for such Ordinary Shares be issued in the name of: 

Please insert social security

or other identifying number

(Please print name and
address) 

If such number of Rights shall not be
all the Rights evidenced by this Right Certificate, a new Right Certificate for the
balance remaining of such Rights shall be registered in the name of and delivered to: 

Please insert social security

or other identifying number

                                     (Please print name and address)

Dated: _______________________

			
——————————————
Signature

Signature Guaranteed: 

        Signatures
must be guaranteed by an eligible guarantor institution which is a participant in the
Securities Transfer Agents Medallion Program (“STAMP”), the NASDAQ Medallion
Signature Program (“MSP”), or the Stock Exchanges Medallion Program
(“SEMP”), pursuant to Rule 17Ad-15 promulgated under the Securities Exchange Act
of 1934, as amended. Guarantees by a notary public are not acceptable. 

        The
undersigned hereby certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined
in the Agreement). 

			
——————————————
Signature

Page 30

NOTICE 

        The
signature in the Form of Assignment or Form of Election to Purchase, as the case may be,
must conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever. 

        In
the event the certification set forth above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, is not completed, the Company and the Rights
Agent will deem the beneficial owner of the Rights evidenced by this Right Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Agreement)
and such Assignment or Election to Purchase will not be honored. 

Page 31

Exhibit
B  

SUMMARY OF RIGHTS TO
PURCHASE
ORDINARY SHARES 

Introduction  

        On
January 11, 2009 the Board of Directors (the “Board”) of On Track
Innovations Ltd. (the “Company”), a company formed under the laws of the
State of Israel, authorized the distribution of one bonus right (a
“Right”) for each Ordinary Share of the Company outstanding on January
11, 2009, in the framework of a certain Rights Agreement between the Company and
Continental Stock Transfer & Trust Company, a New York Corporation, as rights agent,
dated as of January 12, 2009. 

        The
Board has adopted this Rights Agreement to protect shareholders from coercive or otherwise
unfair takeover tactics. In general terms, it works by imposing a significant penalty upon
any person or group that acquires 15% or more of the outstanding ordinary shares of the
Company without the approval of the Board. The Rights Agreement should not interfere with
any merger or other business combination approved by the Board. 

        For
those interested in the specific terms of the Rights Agreement as made between the Company
and Continental Stock Transfer & Trust Company, as the Rights Agent, on January 12,
2009, we provide the following summary description. Please note, however, that this
description is only a summary, and is not complete, and should be read together with the
entire Rights Agreement, which has been filed with the Securities and Exchange Commission
as an exhibit to the registration statement Form 8-A dated January 12, 2009. A copy of the
agreement is available free of charge from the Company. 

        Capitalized
terms used herein shall have the meaning ascribed to them in the Rights Agreement 

The Rights. The Board
authorized the issuance of a Right with respect to each outstanding Ordinary Share on
January 11, 2009. The Rights will initially trade with, and will be inseparable from, the
Ordinary Share. The Rights are evidenced only by the balances indicated in the book-entry
account system of the transfer agent for the Company’s Ordinary Shares or, in the
case of certificated shares, the certificates that represent such Ordinary Shares. New
Rights will accompany any new Company’s Ordinary Shares we issue after ____________
__, ____ until the Distribution Date described below. 

Exercise Price. Each Right
will allow its holder to purchase from the Company either one (1) or three (3) Ordinary
Shares, based on the then effective Exercise Ratio, at a purchase price of NIS0.10 per one
Ordinary Share, once the Rights become exercisable. Prior to exercise, the Right does not
give its holder any dividend, voting, or liquidation rights. 

Page 32

     Exercisability.
          The Rights will not be exercisable until 

	— 	10
days (or a later date determined by the Board before any person or group becomes an
Acquiring Person) after the public announcement that a person or group has become an
“Acquiring Person” by obtaining beneficial ownership of 15% or more of the
Company’s outstanding Ordinary Shares, except if such person or group has become an
“Acquiring Person” pursuant to an offer approved by the majority of the Board
of Directors; or 

	— 	10
business days (or a later date determined by the Board before any person or group becomes
an Acquiring Person) after a person or group begins a tender or exchange offer (except if
such person or group has become an “Acquiring Person” pursuant to an offer
approved by the majority of the Board of Directors) which, if completed, would result in
that person or group becoming an Acquiring Person. 

        We
refer to the date when the Rights become exercisable as the “Distribution Date.”
Until that date, the balances in the book-entry accounting system of the transfer agent
for the Company’s Ordinary Shares or, in the case of certificated shares, Ordinary
Shares certificates will also evidence the Rights, and any transfer of Ordinary Shares or,
in the case of certificated shares, certificates for Ordinary Shares will constitute a
transfer of Rights. After that date, the Rights will separate from the Ordinary Shares and
be evidenced solely by Rights certificates that we will mail to all eligible holders of
Ordinary Shares. Any Rights held by an Acquiring Person and/or any Associate and/or
Affiliate thereof are void and may not be exercised. 

        The
Board may reduce the threshold at which a person or group becomes an Acquiring Person from
15% to not less than 10% of the outstanding Ordinary Shares. 

Consequences of a Person
or Group Becoming an Acquiring Person.  

	—  	Flip
In. If a person or group becomes an Acquiring Person, all holders of Rights except
the Acquiring Person and/or any Associate and/or Affiliate thereof may, for a purchase
price of NIS0.10 per one Ordinary Share, purchase such number of Ordinary Shares equal to
the effective Exercise Ratio. 

	—  	Flip
Over. If the Company is later acquired in a merger or similar transaction after the
Distribution Date, all holders of Rights except the Acquiring Person and/or any Associate
and/or Affiliate thereof may, for a purchase price of NIS0.10 per share, purchase the
number of shares of the acquiring corporation, that each shareholder of the Company is
entitled for each Ordinary Shares multiplied by the Exercise Ratio. 

     Expiration.
          The Rights will expire on January 10, 2012 or such later date as determined by
          the Board (so long as such determination is made prior to January 10, 2012). 

     Redemption.
          The Board may redeem the Rights for no consideration at any time prior to 10
          days (or a later date determined by the Board before any person or group becomes
          an Acquiring Person) after such time that any person or group becomes an
          Acquiring Person . If the Board redeems any Rights, it must redeem all of the
          Rights. 

Page 33

     Exchange.
          After a person or group becomes an Acquiring Person, but before an Acquiring
          Person owns 50% or more of the Company’s outstanding Ordinary Shares, the
          Board may extinguish the Rights by exchanging such number of Ordinary Shares
          equal to the Exercise Ratio or an equivalent security for each Right, other than
          Rights held by the Acquiring Person. 

Anti-Dilution Provisions. The
Board may adjust the purchase price of the Ordinary Shares, the number of Ordinary Shares
issuable and the number of outstanding Rights to prevent dilution that may occur from a
stock dividend, a stock split, a reclassification of the Ordinary Shares. No adjustments
to the Exercise Price of less than 1% will be made. 

     Amendments.
          The terms of the Rights Agreement may be amended (including terminated) by the
          Board without the consent of the holders of the Rights. However, the Board may
          not amend the Rights Agreement to lower the threshold at which a person or group
          becomes an Acquiring Person to below 10% of our outstanding Ordinary Shares. In
          addition, the Board may not cause a person or group to become an Acquiring
          Person by lowering this threshold below the percentage interest that such person
          or group already owns. After a person or group becomes an Acquiring Person, the
          Board may not amend the Rights Agreement in a way that adversely affects holders
          of the Rights. 

Page 34<DATE>

Exhibit 10.1

AGREEMENT AND RELEASE

This Agreement and Release (the "Release") has been entered into by and between Cole Taylor Bank (the "Bank," as defined in Section 4 herein) and Robin VanCastle (as defined in Section 4 herein).  In consideration for the promises contained in this document, the parties agree:

Section 1.Robin VanCastle's employment with the Bank will end by mutual agreement effective March 13, 2009,  ("Separation Date").  During the period between today and Robin VanCastle's Separation Date, (the "Notification Period"), the Bank agrees to pay Robin VanCastle any wages, expenses and paid time off benefits earned up to and including her Separation Date.  For any and all services rendered during the Notification Period, Robin VanCastle shall earn or accrue only the regular compensation or benefits that she otherwise would have earned or accrued as an employee of the Bank, including maintaining health and welfare benefits under the Taylor Capital Group, Inc.  Consolidated Welfare Benefit Program, to the extent permitted by the applicable plans or policies, and counting toward her years of service under Taylor Capital Group, Inc. 401(k) Plan, Taylor Capital Group, Inc. Profit Sharing/ESOP, and Taylor Capital Group, Inc. Deferred Compensation Plan, but she will earn or accrue no other compensation or benefit except as stated in this Release.

Section 2.During the Notification Period, Robin VanCastle will remain an at-will employee of the Bank.  She will report for work to support the transition of her prior responsibilities unless she resigns prior to March 13, 2009.  Her responsibilities during this time will be those associated with transitioning her former role with the Bank to other staff members and/or those duties assigned to her by the Chief Financial Officer.  During the Notification Period, Robin VanCastle will be granted a two-day absence to begin the outplacement services provided by this Release and other time off as needed based on approval by the Chief Financial Officer. During this time, she will receive the benefits described in this Release, provided that she complies with its terms and conducts herself in a manner consistent with the high standards that the Bank requires of its executives.  If prior to her Separation Date, Robin VanCastle voluntarily resigns or the Bank terminates her employment because she failed to perform or comport herself consistent with the Bank's standards, the Bank will elect to rescind this Release and Robin VanCastle will receive no special transition benefits.

Section 3.In consideration for Robin VanCastle's waiver of claims, her promise to work until her Separation Date, and her other promises in this Release, she will receive the following  special transition benefits.

a.Robin VanCastle will receive a severance amount of $270,000.00 which represents fifty-two (52) weeks of her current base salary, subject to normal withholdings and deductions for state and federal taxes.  The payments provided for in this Release will be made on regularly scheduled paydays and in the same manner as her base compensation was paid prior to her Separation Date. Payments will begin on the first  payday following her Separation Date, after the GSVP of the Bank's Human Capital Group has been in possession of her signed and unrevoked Release for seven (7) days and will end with a lump sum payment of the balance owed of the $270,000.00 severance amount on the first regularly scheduled payday in January 2010.  

b.Robin VanCastle will receive any vested restricted stock or stock options, and any vested 401(k), ESOP, Profit Sharing Plan, and Non-Qualified Deferred Compensation benefits granted through her Separation Date, consistent with plan documents.

c.If Robin VanCastle elects to continue her medical benefits under COBRA, the Bank will pay the premiums to continue her current coverage for herself and/or any eligible family members up to twelve (12) months following her Separation Date.  Thereafter, Robin VanCastle will be responsible for all applicable COBRA premiums.

d.To assist her in this transition, the Bank will pay the costs for executive outplacement services from Challenger, Gray & Christmas, Inc.  for up to twelve (12) months, beginning in January 2009.

e.  Robin VanCastle will receive $2,500.00 net lump sum cash payment in lieu of financial/tax planning assistance on the first regularly scheduled payday following her Separation Date.

The payments and benefits described in this Release are expressly conditioned upon Robin VanCastle signing and not revoking this Release, complying with its terms, and signing and not revoking the Re-Affirmation of this Release attached as Exhibit A hereto.

Section 4.In consideration for the monetary payments and other benefits outlined in this Release, Robin VanCastle on behalf of herself and her past and present heirs, executors, administrators, and assigns (collectively referred to in this Release as "Robin VanCastle") irrevocably and unconditionally releases, waives and discharges and agrees not to sue the Cole Taylor Bank or any of its past or present parent, subsidiary, or affiliated companies, including but not limited to Taylor Capital Group, Inc. and their respective past and present benefit plans and insurers, plan fiduciaries and administrators, directors, trustees, officers, employees, agents, attorneys, successors and assigns (collectively referred to herein as the "Bank" whether or not specifically named herein) with respect to any and all claims, liabilities, causes of action, claims for attorney's fees, allocable in-house attorneys' fees, costs, and/or any sort of claim whatsoever whether known or unknown, directly or indirectly relating to, arising out of or in any way involving Robin VanCastle, her relationship with the Bank and/or the end of her relationship, or any other act or omission alleged to have occurred or failed to occur on or before the Effective Date of this Release, including, but not limited to claims for wages, fraud, defamation, invasion of privacy, interference with economic relations, breach of contract, promissory estoppel or equitable relief, tort damages, employment discrimination or any claim for employment rights or damages arising under state or federal law.  Further, Robin VanCastle understands and agrees that this Release covers and waives all claims for any and all monetary and benefits claims of any kind, interest, damages, attorneys' fees, allocable in-house attorneys' fees and costs, insurance, or additional benefits. 

a.Robin VanCastle agrees that this Release or any of the compensation or benefits provided hereunder are not being offered pursuant to any Bank severance plan, that she is not entitled to any compensation or benefits under such plans, and she expressly releases, waives and agrees not to sue for any compensation or benefits under any Bank severance plan.

b.Robin VanCastle also agrees to execute any other documents and cooperate with the Bank to the extent reasonably necessary to effectuate this Release, including but not limited to signing and not revoking the Re-Affirmation of this Release attached hereto as Exhibit A.

c.Robin VanCastle also acknowledges and agrees that she has been fully compensated for all hours in which she performed services for the Bank in accordance with all state, federal, and local wage and hour laws, that she received all required leave and accommodations that she requested, and that she has not suffered any work-related injury or illness for which she has not filed a claim.  Robin VanCastle represents and warrants that she has fully disclosed to the Bank any knowledge she may have about any possibly illegal activities relating to the Bank.

d.Further, in consideration for the benefits herein provided, Robin VanCastle also specifically agrees not to directly or indirectly recruit, nor solicit for purposes of employment, for a period of one year from the Effective Date of this Release (as defined below) or any person who is currently a Bank employee or who becomes a Bank employee during such one-year period.

Section 5.Except as set forth below, Robin VanCastle agrees that she releases, waives, and promises that she will never bring any claims or institute any proceedings (legal or otherwise) against the Bank.  She also agrees to withdraw and dismiss any pending claims or actions she has against the Bank including but not limited to those relating to or arising out of her relationship with the Bank and/or the end of her relationship.  Robin VanCastle promises that none of the rights, claims, actions, damages or liabilities released by her under this Release has been, or will be, assigned, conveyed or transferred in any fashion to any other person or entity.  

a.Notwithstanding the language in Section 5 above and Section 6 below, this Release does not apply to any claims or rights that may not be waived by law (such as claims for unemployment or workers' compensation benefits) or that may arise under the Age Discrimination in Employment Act, after the Effective Date (as defined below) of this Release.  

b.Notwithstanding the language in Section 5 above and Section 6 below, Robin VanCastle also is not precluded from asserting any claims seeking enforcement of this Release or challenging its validity.  Also she is not prohibited from filing a charge or cooperating with any governmental agency that asks for her assistance.

c.However, Robin VanCastle agrees that she will not seek or receive money damages or monetary relief from any claim or administrative charge or judicial action for anything that is released or settled under the terms of this Release, whether filed by her, any governmental agency or other third party.  

Section 6.Express Waiver of Discrimination Claims.

Robin VanCastle acknowledges that this Release includes a waiver of any known or unknown rights and claims of discrimination, harassment and/or retaliation that she may have arising under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act, the Employee Retirement Income Security Act, the Fair Labor Standards Act, the Family Medical Leave Act, the Illinois Human Rights Act and all other federal, state, and local laws.

a.By executing this Release and accepting the monetary and other benefits outlined in this Agreement and Release, Robin VanCastle acknowledges the payments and other promises and benefits provided under this Release, are sufficient consideration for her release and waiver of the rights and claims specified in this Release, and that the payments in this Release exceed anything of value to which she is already entitled if she does not sign this Release.

b.Robin VanCastle acknowledges she has been provided this Release and understands she has a period of at least twenty-one (21) days within which to consider this Release.

c.Robin VanCastle further understands she may revoke this Release for a period of seven (7) days following the date on which she signs this Release.  This Release will not be effective or enforceable until the seven (7) day revocation period has expired without revocation ("Effective Date").

Section 7.Robin VanCastle agrees that if the Company chooses not to file this Release as an exhibit to any SEC filing, she will keep the existence and terms of this Release strictly confidential except that she may disclose with her spouse or domestic partner, legal counsel, accountant and/or financial advisor, provided that she will instruct such individuals to maintain the confidentiality of this Release and will provide the Bank with prompt written notice of any subpoena, request for cooperation, charge or other legal proceeding that may require her or such individuals to disclose information covered by this Release.

Section 8.Robin VanCastle agrees that she will return any and all property and documents belonging to the Bank and any copies thereof (including any computer and software, confidential information, keys, Blackberry, identification cards, etc.) upon her Separation Date.

Section 9.Each party agrees that she/it will not, directly or indirectly, individually or in concert with others, engage in any conduct or make any statement calculated or likely to have the effect of undermining, disparaging or otherwise reflecting poorly upon the other party or she/its good will, products or business opportunities, or in any manner detrimental to said other party, though each party may give truthful and nonmalicious testimony if properly subpoenaed to testify under oath.  

a.Robin VanCastle agrees to describe her departure as an amicable decision to leave the Bank, to pursue other long-standing interests, or words to that effect.  She also agrees to refer all inquiries from bona fide prospective employers to the GSVP of the Bank's Human Capital Group, and she may submit draft reference letters which the Bank will consider.

b.Robin VanCastle and the Bank agree that, in entering this Release and providing the payments and benefits described above, the Bank is not admitting to any wrongdoing or unlawful action in its dealing with her.  Because no final findings or final judgments have been made, she agrees that she does not purport and will not claim to be a prevailing party, to any degree or extent.  She also agrees that this Release or its terms will not be admissible in any proceeding other than a proceeding for breach of enforcement of the terms contained herein.

Section 10.From the date on which she executes this Release, and for as long thereafter as shall be reasonably necessary, Robin VanCastle agrees to cooperate fully with the Bank in any negotiation, transaction, investigation, litigation or other action arising out of transactions in which she was involved or of which she had knowledge during her relationship with the Bank.  If Robin VanCastle incurs any out-of-pocket expenses in the course of performing her obligations under this paragraph, she will be reimbursed for the full amount of all reasonable expenses in accordance with the Bank's standard policies upon her submission of adequate receipts confirming that such expenses actually were incurred.

In addition, the Bank agrees that any indemnification by-law or policy of the Bank that applied to Robin VanCastle prior to her Separation Date will continue to apply to Robin VanCastle beyond said Separation Date for any acts or omissions by Robin VanCastle prior to said Separation Date, but only to the extent that indemnification by the Bank is permitted by and complies with that by-law, policy, or applicable law.  To the extent that the Bank's indemnification by-law or policy refers to or is governed by an insurance policy or other document, said insurance policy or other document will limit the extent of the Bank's obligation to indemnify Robin VanCastle pursuant to said by-law, policy or this Release.

Section 11.This Release is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended, but the parties agree that the Bank is making no guarantee, warranty, or representation in this Release regarding the tax effect of this Release or the position that may be taken by any benefit plan administrator or plan regarding the effect of this Release upon Robin VanCastle's rights, benefits, or coverage under any benefit plan.

Section 12.Robin VanCastle acknowledges that she has read and understands this agreement in its entirety.  She further declares she has had the opportunity to have the contents and consequences of this Release explained to her fully by legal counsel of her own selection, and has acted voluntarily and of her own free will in executing this agreement.  

a.Robin VanCastle acknowledges that she is solely responsible for paying her attorney, and that she and her attorney relinquish and waive all attorneys' liens and claims for attorneys fees.  

b.Robin VanCastle also acknowledges the decision to execute this Release was not predicated nor influenced by any declaration or representation of any of the persons or entities released, other than as may be contained in this Release.

Section 13.TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS RELEASE.

Section 14.This Release is personal to Robin VanCastle and may not be assigned by her and is binding upon and enforceable against her and her heirs and executors.  This Release shall inure to the Bank's benefit and its successors and assigns, and may be assigned by it.

Section 15.If any provision of this Release requires judicial interpretation, the court shall not apply any assumption that the terms of the Release shall be more strictly construed against the drafter as both parties have had an opportunity to provide input as to its terms.

Section 16.This Release sets forth the entire understanding between Robin VanCastle and the Bank with respect to the subject matter of this Release.

Section 17.This Release shall be governed by and construed in accordance with the laws of the State of Illinois without regard to its choice of law provisions.  If any provision of this Release shall be held invalid, illegal or unenforceable, in whole or in part, the court may amend or modify such invalid provision to the extent necessary to make it enforceable and the validity, legality and enforceability of the remaining provisions will not be affected.

Section 18.Robin VanCastle agrees that any change, amendment or modification of any of the initial terms of this Agreement will not be enforceable unless signed in writing by both parties, will be deemed to be non-material and will not restart or extend the twenty-one (21) day consideration period or the 7-day Revocation Period.

Robin VanCastle has been advised to consult with an attorney prior to signing this Release.

	
ROBIN VANCASTLE:
	
COLE TAYLOR BANK

	 	 
	
___/s/Robin VanCastle__________
	
By: __/s/ Nancy Karasek__

	 	
Title: GSVP Human Capital

	
Date: January 6, 2009
	
Date: January 6, 2009

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