Document:

EXHIBIT 10.45

                      STOCK AND WARRANT PURCHASE AGREEMENT

         STOCK AND WARRANT PURCHASE AGREEMENT (this "Agreement") made as of July
10, 2003 by and between ON TRACK INNOVATIONS LTD., an Israeli corporation having
its chief executive office located at Z.H.R.  Industrial Zone, Rosh Pina, Israel
12000 (the  "Company"),  and the  purchaser  identified on Exhibit 1 hereto (the
"Purchaser").

         WHEREAS, the Purchaser has agreed to purchase from the Company, and the
Company  has agreed to sell to the  Purchaser,  the  Ordinary  Shares,  NIS 0.01
nominal value, of the Company (the "Ordinary Shares") described herein; and

         WHEREAS,  the  Company  has  agreed to issue to the  Purchaser  certain
Warrants (the "Warrants") to purchase Ordinary Shares of the Company;

         NOW,  THEREFORE,  in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration,  the receipt and
sufficiency  of which are hereby  acknowledged,  the  Purchaser  and the Company
agree as follows:

         Section 1.  Issuance of  Ordinary  Shares and  Warrant.  Subject to the
terms and conditions of this  Agreement,  the Purchaser  agrees,  simultaneously
with the execution and delivery of this Agreement,  to purchase from the Company
an aggregate of 181,818  Ordinary  Shares at a purchase  price of U.S. $2.75 per
share for an  aggregate  purchase  price of U.S.  $500,000,  all as described on
Exhibit  1  hereto.  Simultaneously  with the  execution  and  delivery  of this
Agreement  (i) the  Purchaser is paying the Purchase  Price by wire  transfer of
immediately  available funds to the Company in accordance with the wire transfer
instructions set forth on Exhibit 2 hereto and (ii) the Company is delivering to
the  Purchaser a stock  certificate  evidencing  the  Purchaser's  ownership  of
181,818 Ordinary Shares.  Simultaneously with the execution and delivery of this
Agreement,  the  Company is issuing to the  Purchaser  warrants  to  purchase an
aggregate of 90,909 Ordinary  Shares of the Company,  such Warrants to be in the
form  attached  hereto as  Exhibit  3.  Simultaneously  with the  execution  and
delivery of this  Agreement,  the Company and the  Purchaser  are  executing and
delivering a Registration Rights Agreement (the "Registration Rights Agreement")
substantially  in the  form of  Exhibit  4  hereto.  As  used  herein  the  term
"Transaction Documents" means this Agreement,  the Warrants and the Registration
Rights Agreement.

         Section 2.  Representations and Warranties.  The Company represents and
warrants to the Purchaser that:

         (a)  Organization,  Good Standing,  and  Qualification of Company.  The
Company  is a  corporation  duly  organized  and  validly  existing  and in good
standing  under  the  laws of  Israel,  and has the  corporate  power to own its
properties  and to carry on its business as now being  conducted and as proposed
to  be  conducted.  The  Company  is  qualified  to  do  business  as a  foreign
corporation and is in good standing in every jurisdiction in which the nature of
the business transacted by it or the character of the properties owned or leased
by it requires such licensing or  qualification,  except where the failure so to
qualify would not have a materially

<PAGE>

adverse  effect on its  business  or  financial  condition.  The Company has the
corporate  power and authority to execute,  deliver and perform the  Transaction
Documents to be issued by it and to deliver the Ordinary  Shares  issuable  upon
exercise of the Warrants.  The  Transaction  Documents have been duly authorized
and  executed by the  Company and  constitute  the  Company's  valid and legally
binding  obligations  enforceable  in accordance  with their  respective  terms,
except as such enforcement may be limited by applicable bankruptcy,  insolvency,
reorganization,  moratorium or other  similar laws,  now or hereafter in effect,
relating to, or affecting the enforcement of, creditors' rights generally.

         (b) Financial  statements.  The financial statements of the Company for
the fiscal year ended  December  31,  2002 and which the Company has  previously
furnished to the  Purchaser  are true and correct,  are in  accordance  with the
books and records of the Company and fairly  present the financial  position and
the results of operations of the Company,  as at and for the periods  indicated.
There have been no  material  adverse  changes in the  condition,  financial  or
otherwise, of the Company taken as a whole since December 31, 2002.

         (c) Litigation,  Compliance with Laws.  Except as set forth on Schedule
2(d),  there are no actions,  suits or proceedings  pending or, to the Company's
knowledge,  threatened  against or affecting the Company which may result in any
material  adverse effect on its business,  properties or condition.  There is no
exiting  law,  rule,  regulation  or order,  and the Company is not aware of any
proposed law, rule,  regulation or order,  whether Federal or state, which would
prohibit or restrict the Company from, or otherwise  materially adversely affect
the Company in,  conducting its business in any  jurisdiction in which it is now
conducting business or in which it proposes to conduct business.

         (d) Title and Liens.  Except as set forth on Schedule 2(e) hereto,  the
property  and assets of the Company are free from all liens,  charges,  security
interests, and encumbrances and the Company has good and marketable title to all
personal  property  and assets  included  in its most  recent  balance  sheet or
subsequently  acquired  by the  Company,  except  personal  property  and assets
subsequently sold or otherwise disposed of in the ordinary course of business.

         (e) Conflicting  agreements and charter  provisions.  The execution and
delivery of the Transaction Documents and any other documents to be delivered by
the Company  hereunder,  the consummation of the transactions  herein or therein
contemplated, the fulfillment of the terms hereof or thereof, and the compliance
with the terms and provisions  hereof or the thereof,  will not conflict with or
result  in a  breach  of any of the  terms,  conditions,  or  provisions  of any
corporate  restriction or of any agreement or instrument to which the Company is
a party or by which it is bound,  or  constitute  a default  thereunder,  except
where the  consequences  of any such breach or default would not have a material
adverse  effect on the Company,  or result in the creation or  imposition of any
lien, charge,  security  interest,  or encumbrance of any nature whatsoever upon
any of the  property or assets of the Company  pursuant to the terms of any such
agreement or instrument, except where consents have been obtained.

         Section 3. Representations by the Purchaser

         The Purchaser represents and warrants to the Company as follows:

         (a) Investment  Purposes.  The Purchaser represents to the Company that
the  Purchaser  is acquiring  the  Ordinary  Shares and the Warrants for its own
account, for the purpose of investment,  and not with a view to the distribution
or resale of any thereof,  and the  Purchaser

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<PAGE>

has no  present  plans to enter into any  contract,  undertaking,  agreement  or
arrangement for any such distribution or resale.

         (b)  Enforceability.  This Agreement  constitutes the Purchaser's valid
and legally binding obligation  enforceable in accordance with its terms, except
as  such  enforcement  may be  limited  by  applicable  bankruptcy,  insolvency,
reorganization,  moratorium or other  similar laws,  now or hereafter in effect,
relating to, or affecting the enforcement of, creditors' rights generally.

         (c) Sophistication.  The Purchaser is a sophisticated investor, and has
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of investing in the Company and receiving the
Warrants.  Without limiting the foregoing, the Purchaser represents and warrants
that its is an  "accredited  investor,"  as that term is  defined in Rule 501 of
Regulation  D under the  Securities  Act of 1933,  as amended  (the  "Securities
Act"). The Purchaser has the financial ability to bear the economic risk of such
Purchaser's investment  contemplated hereby and has adequate net worth and means
of providing for its current needs and  contingencies to sustain a complete loss
of its  investment  and has no  need  for  liquidity  in its  investment  in the
Company.

         (d)  Restrictions  on  Transferability.  The Purchaser  understands and
agrees that (i) the  Ordinary  Shares,  the  Warrants  and the  Ordinary  Shares
issuable  upon  exercise  of the  Warrants  (the  "Securities")  have  not  been
registered under the Securities Act by reason of their issuance in a transaction
exempt  from the  registration  requirements  of the  Securities  Act,  (ii) the
Securities must be held indefinitely unless a subsequent  disposition thereof is
registered under the Securities Act or is exempt from such  registration,  (iii)
the Securities  will bear a legend to such effect and (iv) the Company will make
a notation  on its  transfer  books to such  effect.  Any such  transfer,  sale,
assignment or hypothecation  shall be conditioned upon receipt by the Company by
an opinion of counsel satisfactory to the Company and its counsel,  stating that
the  transferee  is a  permitted  transferee  under this  Section  and that such
transfer does not violate the Securities Act or any state securities laws.

         (e) Access to  Information.  The  Purchaser  and its advisers have been
furnished all materials  relating to the Company which they have requested.  The
Purchaser and its advisers have been afforded the  opportunity  to ask questions
of the Company concerning the investment  contemplated  hereby and to obtain any
additional  information they have deemed necessary as a condition to making such
investment.

         Section  4.  Debt;  Issuances  of  Securities.  No  provision  of  this
Agreement  or of any other  document  executed  and  delivered by the Company in
connection with this Agreement restricts,  or shall be construed to restrict, in
any way the ability of the  Company to incur  indebtedness  or to issue  capital
stock  or  other  equity  securities  (or  securities  convertible  into  equity
securities) of the Company or to grant liens on its property and assets.

         Section 5. Trading  Limitations.  For the period  beginning on the date
hereof and ending on July 10, 2004 (the  "Restricted  Period")  the  Corporation
shall cause the officers and directors identified on Exhibit 5 hereto to refrain
from  selling any  Ordinary  Shares  held by them from time to time  without the
prior written consent of Herald  Investment  Trust plc other than sales pursuant
to Rule 144 under the United States  Securities Act of 1933, as amended or sales
of Ordinary Shares purchased in open market transactions. The foregoing covenant
shall  cease to apply on the  earlier  of July 10,  2004 or the date  after  the
Registration Statement, filed

                                       3
<PAGE>

pursuant to the Registration  Rights Agreement,  has been declared  effective by
the United States  Securities  and Exchange  Commission and the Closing price of
the Ordinary Shares traded on NASDAQ has been at least $5.50 on five consecutive
trading days (the "Release Date").  During the balance of the Restricted  Period
after the Release Date, the  Corporation  shall cause its officers and directors
to refrain from selling, in the aggregate, not more than 200,000 Ordinary Shares
provided  that the foregoing  restriction  on sales shall lapse when the closing
price of the  Ordinary  Shares  traded on NASDAQ has been at least $8.25 on five
consecutive trading days.

         Section  6.  Survival  of  covenants,  agreement,  representations  and
warranties.  All covenants,  agreements,  representations  and  warranties  made
herein and in certificates delivered pursuant hereto shall survive the execution
and delivery of this Agreement and the Warrants and shall continue in full force
and effect in accordance with applicable statutes of limitations.

         Section 7. Entire  agreement;  no oral change.  This  Agreement and the
Warrants embody the entire agreement and  understanding  between the Company and
the Purchaser  relating to the subject  matter  hereof,  and supersede all prior
agreements and  understandings  relating to such subject matter.  This Agreement
may not be changed  orally,  but only by an agreement  in writing  signed by the
party against whom enforcement of any waiver, change, modification, or discharge
is sought.

         Section 8. Notices,  etc. Any notice required by the provisions of this
Agreement  will be  writing  and  will be  deemed  effectively  given:  (a) upon
personal delivery to the party to be notified;  (b) when sent by confirmed telex
or facsimile if sent during normal business hours of the recipient; if not, then
on the  next  business  day;  (c)  three  (3) days  after  having  been  sent by
registered or certified mail, return receipt requested,  postage prepaid; or (d)
one (1) day  after  deposit  with a  nationally  recognized  overnight  courier,
specifying  next day delivery,  with written  verification  of receipt.  Notices
shall be sent to the addresses first set forth above or to such other address as
a party furnishes to other parties in writing.

         Section  9.  Law  Governing.  This  Agreement  shall  be  construed  in
accordance  with and  governed by the laws of the State of New York with respect
to contracts executed and performed in the State of New York.

         Section 10.  JURISDICTION.  THE COMPANY AND THE PURCHASER  CONSENT THAT
ANY LEGAL ACTION OR  PROCEEDING  AGAINST IT OR THEM UNDER,  ARISING OUT OF OR IN
ANY MANNER  RELATING  TO THIS  AGREEMENT,  OR ANY OTHER  INSTRUMENT  OR DOCUMENT
EXECUTED AND DELIVERED IN CONNECTION  HEREWITH,  SHALL BE BROUGHT EXCLUSIVELY IN
THE COURTS OF THE STATE OF NEW YORK  LOCATED IN NEW YORK COUNTY OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE COMPANY AND THE
PURCHASER,  BY THEIR  EXECUTION  AND DELIVERY OF THIS  AGREEMENT,  EXPRESSLY AND
IRREVOCABLY  CONSENT  AND  SUBMIT TO THE  PERSONAL  JURISDICTION  OF ANY OF SUCH
COURTS IN ANY SUCH ACTION OR  PROCEEDINGS.  THE COMPANY AND THE PURCHASER  AGREE
THAT  PERSONAL  JURISDICTION  OVER THEM MAY BE  OBTAINED  BY THE  DELIVERY  OF A
SUMMONS (POSTAGE PREPAID) IN ACCORDANCE WITH THE PROVISIONS OF SECTION 8 OF THIS
AGREEMENT. ASSUMING DELIVERY OF THE SUMMONS IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 8 OF THIS AGREEMENT,  THE COMPANY AND THE PURCHASER HEREBY EXPRESSLY AND
IRREVOCABLY

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<PAGE>

WAIVE ANY ALLEGED  LACK OF PERSONAL  JURISDICTION,  IMPROPER  VENUE OF FORUM NON
CONVENIENS OR ANY SIMILAR BASIS. EACH PARTY HERETO EXPRESSLY WAIVES ANY RIGHT TO
A TRIAL BY JURY IN ANY ACTION OR  PROCEEDING  UNDER THIS  AGREEMENT,  AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING  SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.

         Section 11. Successors and Assigns. All the covenants and provisions of
this  Agreement  shall bind and inure to the  benefit of the  parties  and their
respective  successors and permitted assigns hereunder.  No party may assign any
rights or obligations  hereunder  without the prior written consent of the other
parties and any  purported  assignment  without such  consent  shall be null and
void.

         Section 12.  Amendments  and Waivers.  The provisions of this Agreement
may not be  amended,  modified  or  supplemented,  and  waiver  or  consents  to
departure from the provisions hereof may not be given without the consent of the
party against whom such waiver or consent is sought.

         Section 13. Counterparts.  This Agreement may be executed in any number
of  counterparts,  and by the parties hereto in separate  counterparts,  each of
which so  executed  shall be deemed  to be an  original  and all of which  taken
together shall constitute one and the same agreement.

         Section  14.  Severability.  In the  event  that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held   invalid,   illegal  or   unenforceable,   the   validity,   legality  and
enforceability  of  any  such  provisions  in  every  other  respect  and of the
remaining provisions contained herein shall not be affected or impaired thereby.

         Section 15.  Expenses;  Attorney's  Fees. Each party shall bear its own
expenses, including, without limitation, attorneys' fees, in connection with the
execution, delivery and performance of this Agreement.

         IN WITNESS WHEREOF,  the undersigned have executed this Agreement as of
the date first above written.

                                            ON TRACK INNOVATIONS LTD.

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

                                            HERALD INVESTMENT TRUST PLC

                                            By: /s/ Drene Jackson
                                                Name:  Drene Jackson
                                                Title: Fund Manager

                                       5
<PAGE>

                                                                       Exhibit 1

<TABLE>
<CAPTION>
Name and Address                   Name of Ordinary                                        Number of
 of Purchaser                      Shares Purchased               Purchase Price           Warrants

<S>                                    <C>                        <C>                       <C>
Herald Investment Trust PLC            181,818                    $2.75 per share           90,909
12 Charterhouse Square
London EC1M 6AX
</TABLE>

<PAGE>

                                                                       Exhibit 2

                           Wire Transfer Instructions

                 [OMITTED - will be furnished to the Securities
                     and Exchange Commission upon request.]

<PAGE>

                                                                       Exhibit 3

                                 Form of Warrant

                 [OMITTED - will be furnished to the Securities
                     and Exchange Commission upon request.]

<PAGE>

                                                                       Exhibit 4

                         Registrations Rights Agreement

                 [OMITTED - will be furnished to the Securities
                     and Exchange Commission upon request.]

<PAGE>

                                                                       Exhibit 5

              Trading Limitations / List of Officers and Directors

         Oded Bashan
         Ohad Bashan
         Guy Shafran

<PAGE>

                                                                   Schedule 2(d)

                        Litigation, Compliance with Laws

         None

<PAGE>

                                                                   Schedule 2(e)

                                 Title and Liens

         Liens in favor of Ha'poalim Bank.EXHIBIT 10.46

                            ON TRACK INNOVATIONS LTD.

                             Subscription Agreement

THE ORDINARY SHARES, THE WARRANTS AND THE ORDINARY SHARES ISSUABLE UPON EXERCISE
OF THE WARRANTS COVERED HEREBY HAVE NOT BEEN REGISTERED,  QUALIFIED, APPROVED OR
DISAPPROVED  UNDER ANY  FEDERAL  OR STATE  SECURITIES  LAWS,  NOR HAS THE UNITED
STATES  SECURITIES  AND  EXCHANGE  COMMISSION  OR ANY  OTHER  FEDERAL  OR  STATE
REGULATORY  AUTHORITY  PASSED ON OR ENDORSED  THE MERITS OF THE  OFFERING OF THE
ORDINARY  SHARES  AND  THE  WARRANTS.  ANY  REPRESENTATION  TO THE  CONTRARY  IS
UNLAWFUL.  THE ORDINARY  SHARES,  THE WARRANTS AND THE ORDINARY  SHARES ISSUABLE
UPON  EXERCISE  OF THE  WARRANTS  MAY NOT BE  SOLD,  TRANSFERRED,  OR  OTHERWISE
DISPOSED OF BY AN INVESTOR  UNLESS THE  ORDINARY  SHARES , THE  WARRANTS AND THE
ORDINARY  SHARES  ISSUABLE UPON  EXERCISE OF THE WARRANTS  HAVE BEEN  REGISTERED
UNDER  FEDERAL  SECURITIES  LAWS AND,  WHERE  REQUIRED,  UNDER THE LAWS OF OTHER
JURISDICTIONS,  OR UNLESS THE PROPOSED  SALE,  TRANSFER OR DISPOSITION IS EXEMPT
FROM REGISTRATION. ACCORDINGLY, A PURCHASER OF THE ORDINARY SHARES, THE WARRANTS
AND THE ORDINARY  SHARES ISSUABLE UPON EXERCISE OF THE WARRANTS MUST BE PREPARED
TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

                                                       Dated as of July 10, 2003

                                       1
<PAGE>

Gentlemen:

         The  undersigned  (the  "Subscriber")  is executing and delivering this
Agreement in connection  with the  subscription  by the  undersigned for 181,818
ordinary  shares,  NIS 0.1 nominal value (the  "Ordinary  Shares"),  and related
warrants to purchase  Ordinary Shares (the  "Warrants") of On Track  Innovations
Ltd., (the "Corporation").  The undersigned  understands that the Corporation is
relying upon the accuracy and  completeness of the information  contained herein
in complying with its obligations under federal and state securities laws and in
considering whether or not to accept the subscription of the undersigned.

         The  undersigned  hereby  irrevocably  agrees,  represents and warrants
with, to and for the benefit of the Corporation as follows:

         1. Subscription.

         (a)  Subject  to the  terms  and  conditions  of  this  Agreement,  the
undersigned  hereby  subscribes  for the  Ordinary  Shares and the  Warrants and
agrees to become a Subscriber for the amount set forth herein  immediately above
the signature of the undersigned.  The purchase price per Ordinary Share is U.S.
$2.75.

         (b) The  undersigned  tenders  herewith  a check  payable  to On  Track
Innovations Ltd. in the full amount of the subscription price of the undersigned
pursuant to Section 1(a).

         (c) The  undersigned  is  delivering  herewith (i) two signed copies of
this   Agreement   and  (ii)  a  signed  and  completed   Investor   Suitability
Questionnaire, in the form accompanying this Agreement.

         2.  Acceptance.   The  undersigned  understands  and  agrees  that  the
Corporation has full right to accept or reject this subscription, in whole or in
part.  Upon acceptance of a subscription  by the  Corporation,  one copy of this
Agreement,  signed  by the  undersigned  and,  to  indicate  acceptance,  by the
Corporation, shall be returned to the undersigned by the Corporation.

         3. Representations and Warranties.

         (a)  Set  forth  below  is  the  true  and   correct   address  of  the
undersigned's residence or principal place of business. The only jurisdiction in
which an offer to sell the  Ordinary  Shares  and the  Warrants  was made to the
undersigned is the  jurisdiction  in which such residence or principal  place of
business is situated.  The  undersigned  has no present  intention of becoming a
resident of (or moving its  principal  place of business  to) any other state or
jurisdiction.

         (b) The undersigned  understands that the Ordinary Shares, the Warrants
and the Ordinary  Shares  issuable  upon  exercise of the Warrants have not been
registered  under the  Securities  Act of 1933, as amended (the "1933 Act"),  or
under the laws of any other jurisdiction. The undersigned understands and agrees
that the Ordinary  Shares,  the Warrants and the Ordinary  Shares  issuable upon
exercise of the Warrants must be held indefinitely  unless they are subsequently
registered  under  the 1933 Act and,  where  required,  under  the laws of other
jurisdictions or unless an exemption from registration is available.

         (c) The  Ordinary  Shares and the  Warrants  for which the  undersigned
hereby  subscribes are being acquired solely for the  undersigned's  own account
for  investment  and  are not  being  purchased  with a view  to or for  resale,
distribution or other  disposition,  and the undersigned has no present plans to
enter into any  contract,  undertaking,  agreement or  arrangement  for any such
resale, distribution or other disposition.

         (d) The  undersigned  understands,  acknowledges,  agrees  and is aware
that:

                  (i) no federal or state  agency has passed  upon the  Ordinary
         Shares or  Warrants  or made any  finding  or  determination  as to the
         fairness of this investment;

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<PAGE>

                  (ii) the  Ordinary  Shares and the  Warrants  are  speculative
         investments  which  involve a high degree of risk,  including  the risk
         that  the  undersigned   might  lose  its  entire   investment  in  the
         Corporation; and

                  (iii) any federal  income tax benefits  which may be available
         to the undersigned may be lost through adoption of new laws, amendments
         to existing laws or regulations,  or changes in the  interpretation  of
         existing laws and regulations.

         (e) The undersigned has carefully reviewed and understands the risks of
a purchase of the Ordinary Shares and the Warrants.

         (f) In connection with the undersigned's investment in the Corporation,
the  undersigned  has obtained the advice of the  undersigned's  own  investment
advisors, counsel and accountants ("advisors").

         (g) The undersigned and the undersigned's  advisors have been furnished
all materials relating to the Corporation or the offering of Ordinary Shares and
the  Warrants  (the  "Offering")  which the  undersigned  and the  undersigned's
advisors have requested.  The undersigned  and the  undersigned's  advisors have
been afforded the opportunity to ask questions of the Corporation concerning the
terms and  conditions of the Offering and to obtain any  additional  information
necessary to verify the accuracy of any representations or information set forth
about the Ordinary Shares and the Warrants.

         (h) The Corporation has answered all inquiries that the undersigned and
the  undersigned's  advisors have made  concerning the  Corporation or any other
matters relating to the creation and operations of the Corporation and the terms
and conditions of the Offering.

         (i) At no time was the  undersigned  presented with or solicited by any
leaflet,  public promotional  meeting,  newspaper or magazine article,  radio or
television  advertisement  or any other form of general  advertising  or general
solicitation.

         (j) The undersigned has the financial ability to bear the economic risk
of the  undersigned's  investment in the  Corporation and has adequate net worth
and means of providing for the undersigned's  current needs and contingencies to
sustain a  complete  loss of the  undersigned's  investment  and has no need for
liquidity in the undersigned's investment in the Corporation.

         (k) The  undersigned has such knowledge and experience in financial and
business  matters  that  the  undersigned  is  capable  of  evaluating,  and has
evaluated, the merits and risks of the proposed investment.

         (l) The  undersigned  represents and warrants that it is an "accredited
investor,"  as that term is defined in Rule 501 of  Regulation  D under the 1933
Act.

         (m)  The  information  provided  by the  undersigned  in  the  Investor
Suitability  Questionnaire and the other Subscription documents delivered by the
undersigned to the Corporation  herewith is incorporated herein by reference and
made a part  hereof,  and the  undersigned  represents  and  warrants  that such
information  is true and  complete  and fairly  reflects  the current  financial
condition and affairs of the undersigned.

         (n) If the  undersigned is a corporation,  partnership,  trust or other
entity,  (i) it is  authorized  and  qualified  and has full  right and power to
become a Subscriber  in, and is  authorized to purchase  Ordinary  Shares and to
perform its  obligations  pursuant  to the  provisions  hereof,  (ii) the person
signing this Subscription Agreement,  the other Subscription Documents,  and any
other  instrument  executed and delivered  herewith on behalf of such entity has
been duly  authorized  by such entity and has full power and authority to do so,
and (iii) such entity has not been formed for the specific  purpose of acquiring
an  interest  in the  Corporation,  unless  each  owner  of  such  entity  is an
accredited  investor  under  Regulation  D of the SEC under the 1933 Act and has
submitted information substantiating such qualification.

                                       3
<PAGE>

         (o) The undersigned  hereby  represents and warrants to the Corporation
that by  reason  of the  undersigned's  business  or  financial  experience  the
undersigned  has  the  capacity  to  protect  the  undersigned's   interests  in
connection with an investment in the Corporation.

         (p) If the undersigned is a Plan or an entity whose  underlying  assets
include  the  assets  of any Plan by  reason of such  Plan's  investment  in the
entity,  then the  undersigned  represents and warrants that either such Plan or
the fiduciary  responsible  for the  investment and  reinvestment  of either the
assets of such Plan,  or that  portion of the assets of such Plan from which the
investment in the  Corporation  will be made,  has considered the following with
respect to such Plan's  investment in the Corporation and has determined that in
view of such  considerations,  the purchase of an interest in the Corporation is
in furtherance of and in the best interests of the participants in such Plan and
their beneficiaries:

         (A) the role such  investment or investment  course of action plays in,
as  applicable,  that  portion of such  Plan's  portfolio  which such  fiduciary
manages, or in all of the assets of such Plan;

         (B)  whether  such  investment  or  investment   course  of  action  is
reasonably  designed,  as part of, as applicable,  that portion of the portfolio
managed by such  fiduciary,  or as part of all of the  assets of such  Plan,  to
further the purposes of such Plan, taking into account both the risk of loss and
the opportunity for gain that could result therefrom;

         (C) the  composition  of, as applicable,  that portion of the portfolio
which such fiduciary manages,  or all of the assets of such Plan, with regard to
diversification of the assets of such Plan;

         (D) the  liquidity and current rate of return of, as  applicable,  that
portion of the portfolio managed by such fiduciary, or all of the assets of such
Plan, relative to the anticipated cash flow requirements of such Plan; and

         (E) the  projected  return  of,  as  applicable,  that  portion  of the
portfolio managed by such fiduciary, or all of the assets of such Plan, relative
to the funding objectives of such Plan.

         (q) The  undersigned  represents  and warrants that neither it, nor its
affiliates,  is a broker-dealer or otherwise a "Restricted  Person" as such term
has meaning under the United States National  Association of Securities Dealers,
Inc. ("NASD") Rules of Fair Practice and the related  interpretations adopted by
the NASD's Board of Governors and if the  undersigned or its affiliates  becomes
such the undersigned will promptly notify the Corporation.

         (r) The  undersigned  acknowledges  and  agrees  that  the  certificate
representing the Ordinary Shares,  the Warrants and the Ordinary Shares issuable
upon exercise of the Warrants shall bear a restrictive  legend as counsel to the
Corporation  may  determine  is  necessary  or  appropriate   under   applicable
securities laws substantially to the effect of the following:

                  The Securities  represented by this  Certificate have
                  not been registered under the Securities Act of 1933,
                  as amended, and may not be sold, transferred, pledged
                  or hypothecated unless subsequently  registered under
                  said  Act  or  an  exemption  from   registration  is
                  available.

         4. Covenant to Update Information.  The undersigned covenants to advise
the Corporation by telephone and in writing if any  representation  and warranty
contained herein becomes untrue.

         5. Agreement  with Respect to Resale.  The  undersigned  agrees that no
Ordinary  Shares,  Warrants  or  Ordinary  Shares  issued  upon  exercise of the
Warrants will be resold  without  registration  under the 1933 Act,  and,  where
required, under the laws of other jurisdictions, or availability of an exemption
therefrom.

                                       4
<PAGE>

         6. Indemnification.  The undersigned  acknowledges that the undersigned
understands  the  meaning  and legal  consequences  of the  representations  and
warranties contained in this Agreement and agrees to indemnify and hold harmless
the  Corporation  and its  affiliates,  employees,  officers and agents and each
other  Subscriber  from and  against  any and all  loss,  damage,  liability  or
expense, including,  without limitation,  legal fees, due to or arising out of a
breach of any  representation  or warranty of the  undersigned  contained in any
document   furnished  by  the  undersigned  in  connection  with  the  Offering,
including,  without  limitation,  this  Agreement  and the Investor  Suitability
Questionnaire,  and all schedules,  appendices  and exhibits  hereto or thereto,
submitted by the  undersigned,  or failure by the undersigned to comply with any
covenant  or  agreement  by the  undersigned  herein  or in any  other  document
furnished by the  undersigned  to any of the foregoing in  connection  with this
transaction.

         7. Notices. All notices and other communications  required or permitted
under this Agreement shall be in writing, and shall be deemed to have been given
if delivered  personally,  mailed,  postage prepaid, by first class mail, to the
parties at the addresses set forth in this  Agreement or such other address as a
party may specify to the other by notice as provided in this Section.

         8.  Assignment.  This  Agreement may not be assigned or  transferred by
either party without the consent of the other party and any purported assignment
without such consent shall be null and void.

         9. Amendment and Waiver. This Agreement may be amended or modified only
by an instrument signed by the undersigned and the Corporation.  A waiver of any
provision of this Agreement  must be in writing,  designated as such, and signed
by the party against whom enforcement of that waiver is sought.  The waiver by a
party of a breach of any  provision  of this  Agreement  shall not operate or be
construed as a waiver of any subsequent or other breach thereof.

         10. Binding Effect. Except as otherwise provided herein, this Agreement
shall be  binding  upon and  inure to the  benefit  of the  undersigned  and the
Corporation  and its respective  heirs,  executors  administrators,  successors,
legal  representatives  and  assigns.  If the  undersigned  shall be  joint  and
several,  then the  representations  and warranties  herein  contained  shall be
deemed to be made by and be  binding  upon each such  person  and such  person's
heirs,   executors,   administrators,   legatees,   devisees,   assigns,   legal
representatives and successors.

                                       5
<PAGE>

                         SIGNATURE PAGE FOR INDIVIDUALS

         IN WITNESS  WHEREOF,  the  undersigned  has executed this  Subscription
Agreement on this _____ day of July, 2003.

Total investment:                   $___________________

Number of Ordinary Shares           ____________________

Number of Ordinary Shares underlying Warrants _________________

Print Name of Individual

___________________________________
Signature of Individual

Legal Residence of Individual:

___________________________________
Number and Street

___________________________________
City, State, Zip Code

___________________________________
Social Security Number

Mailing Address if different from above:

___________________________________
Number and Street

___________________________________
City, State, Zip Code

___________________________________
Social Security Number

Accepted By:

ON TRACK INNOVATIONS LTD.

By:   __________________________________

Title:________Chairman and CEO__________

                                       6
<PAGE>

                    ACKNOWLEDGMENT FOR INDIVIDUAL SUBSCRIBERS

                           To be completed by Notary.

STATE OF___________________________

COUNTY OF_________________________

         On this ____ day of July,  2003,  before  me,  the  undersigned  Notary
Public,  duly  commissioned  and  sworn,   personally  appeared  __________  and
personally  known to me (or proved to me on the basis of satisfactory  evidence)
to be the person(s)  whose name is (or whose names are) subscribed to the within
instrument, and subscribed and swore to such instrument and acknowledged that he
(or she or they) executed the same.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate above written.

[SEAL]  __________________________________

(Notary Public in and for the aforesaid County and State)

My Commission Expires:_______________________________

                                       7
<PAGE>

                        SIGNATURE PAGE FOR CORPORATIONS,
      PARTNERSHIPS, TRUSTS, LIMITED LIABILITY COMPANIES, LIMITED LIABILITY
                        PARTNERSHIPS AND OTHER ENTITIES

         IF  THE  SUBSCRIBER  IS  A  CORPORATION,  PARTNERSHIP,  TRUST,  LIMITED
LIABILITY COMPANY,  LIMITED LIABILITY PARTNERSHIP OR OTHER ENTITY,  COMPLETE THE
FOLLOWING  SIGNATURE  LINES  TO THE  SUBSCRIPTION  AGREEMENT  AND  HAVE A NOTARY
COMPLETE THE APPROPRIATE ACKNOWLEDGMENT ON THE FOLLOWING PAGES:

         IN WITNESS  WHEREOF,  the  undersigned  has executed this  Subscription
Agreement on this ____ day of July, 2003.

Total investment:                   $500,000

Number of Ordinary Shares           181,818

Number of Ordinary Shares underlying Warrants 90,909

Print  Name of  Corporation,  Partnership,  Trust,  Limited  Liability  Company,
Limited Liability Partnership or Other Entity: Herald Investment Trust PLC

By: /s/ Drene Jackson
     Signature of Officer or Other Authorized Representative*

Print Name and Title of Officer or Other Authorized Representative:
Drene Jackson, Fund Manager

Location of Principal Place of Business of Corporation, Partnership, Trust,
Limited Liability Company, Limited Liability Partnership or other Entity:

12 Charterhouse Sq.                               London, ECIM 6AX
Name and Street                                   City, State, Zip Code

Mailing Address (if different from above):

______________________________                    ______________________________
Name and Street                                   City, State, Zip Code

_______________________________
Tax Identification Number of Corporation,  Partnership, Trust, Limited Liability
Company, Limited Liability Partnership or other Entity

Accepted By:                              Accepted By:

ON TRACK INNOVATIONS LTD.                 ON TRACK INNOVATIONS LTD.

By: /s/ Oded Bashan                       By: /s/ Ronnie Gilboa

Title: President                          Title: VP Projects

* (Only an officer or other representative of such corporation, partnership,
trust, limited liability company, limited liability partnership or other entity
who is authorized to execute this document on behalf of such entity should sign
this Agreement.)

                                       8
<PAGE>

                   ACKNOWLEDGMENT FOR CORPORATION SUBSCRIBERS

                           To be completed by Notary.

STATE OF:____________________
COUNTY OF:__________________

         On this ____ day of July,  2003,  before  me,  the  undersigned  Notary
Public,     duly     commissioned     and     sworn,     personally     appeared
____________________________,  to me known,  who,  being by me duly  sworn,  did
depose and say that he or she  resides  at  ____________________________________
and that he or she is the ___________________ of  ________________________,  the
corporation described in and which executed the foregoing instrument and that he
or she is authorized to execute this instrument on behalf of such corporation.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate above written.

[Seal]___________________________________
(Notary Public in and for the aforesaid County and State)

My Commission Expires:_______________________

                                       9
<PAGE>

                   ACKNOWLEDGMENT FOR PARTNERSHIP SUBSCRIBERS

                           To be completed by Notary.

STATE OF:_______________________
COUNTY OF:_____________________

         On this ____ day of July,  2003,  before  me,  the  undersigned  Notary
Public,  duly commissioned and sworn,  personally  appeared  __________________,
personally  known to me (or proved to me on the basis of satisfactory  evidence)
to be the individual who executed the foregoing  instrument and, who, being duly
sworn  by me,  did  depose  and say  that he or she is a  member  of the firm of
___________________________,   and  that  he  or  she  executed  the   foregoing
instrument  in the  firm  name  of  _________________  and  that  he or she  had
authority to sign the same, and acknowledged that he or she executed the same as
the act and deed of said firm.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate above written.

[Seal]___________________________________
(Notary Public in and for the aforesaid County and State)

My Commission Expires:____________________________

                                       10
<PAGE>

                      ACKNOWLEDGMENT FOR TRUST SUBSCRIBERS

                           To be completed by Notary.

STATE OF_________________
COUNTY OF_______________

         On this ____ day of July,  2003,  before  me,  the  undersigned  Notary
Public,     duly     commissioned     and     sworn,     personally     appeared
____________________________  ,  personally  known to me (or proved to me on the
basis of  satisfactory  evidence)  to be the  trustee  under  the  Trust for the
benefit of  _____________________  and known to me to be the person who executed
the within  instrument  and  acknowledged  to me that he, she or it executed the
same.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate above written.

[Seal]__________________________________
(Notary Public in and for the aforesaid County and State)

My Commission Expires:______________________

                                       11
<PAGE>

            ACKNOWLEDGMENT FOR LIMITED LIABILITY COMPANY SUBSCRIBERS

                           To be completed by Notary.

STATE OF:_______________________
COUNTY OF:_____________________

         On this ____ day of July,  2003,  before  me,  the  undersigned  Notary
Public,  duly commissioned and sworn,  personally  appeared  __________________,
personally  known to me (or proved to me on the basis of satisfactory  evidence)
to be the individual who executed the foregoing  instrument and, who, being duly
sworn by me, did depose and say that he or she is the manager and/or a member of
the  firm  of  ___________________________,  and  that  he or she  executed  the
foregoing  instrument in the firm name of  _________________  and that he or she
had  authority to sign the same,  and  acknowledged  that he or she executed the
same as the act and deed of said firm.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate above written.

[Seal]___________________________________
(Notary Public in and for the aforesaid County and State)

My Commission Expires:____________________________

                                       12
<PAGE>

          ACKNOWLEDGMENT FOR LIMITED LIABILITY PARTNERSHIP SUBSCRIBERS

                           To be completed by Notary.

STATE OF:_______________________
COUNTY OF:_____________________

         On this ____ day of July,  2003,  before  me,  the  undersigned  Notary
Public,  duly commissioned and sworn,  personally  appeared  __________________,
personally  known to me (or proved to me on the basis of satisfactory  evidence)
to be the individual who executed the foregoing  instrument and, who, being duly
sworn  by me,  did  depose  and say  that he or she is a  member  of the firm of
___________________________,   and  that  he  or  she  executed  the   foregoing
instrument  in the  firm  name  of  _________________  and  that  he or she  had
authority to sign the same, and acknowledged that he or she executed the same as
the act and deed of said firm.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate above written.

[Seal]___________________________________
(Notary Public in and for the aforesaid County and State)

My Commission Expires:____________________________

                                       13

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