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On Track Innovations Ltd, (OTI) (Nasdaq:OTIV), a global leader in contactless microprocessor-based smart card solutions, for homeland security, payments, petroleum payments and other applications, today announced that its Chinese partner HuaDa-ZhiBao Electronic Systems Ltd is part of the winning bid to supply the Ministry of Foreign Affairs' (MFA) electronic passport booklet, and will be responsible for the supply of Integrated Circuit (IC) modules to be used in such. HuaDa-ZhiBao is OTI's Chinese local partner, providing a local Chinese product for the MFA program. HuaDa-ZhiBao and OTI have reached an overall profit sharing agreement in addition to product revenues. The Ministry of Foreign Affairs issues passports to diplomats and entry visas to China. The MFA issues about one (1) million passports annually. This award is in addition to the inspection equipment award reported last week.

China's MFA electronic passport is based on the International Civil Aviation Organization (ICAO) and ISO 14443 standards. Earlier this year, HuaDa-ZhiBao and OTI delivered initial quantities for this program, which successfully passed rigorous testing for product performance including security, durability, communications, personalization and more. The MFA is planning to start issuing electronic passport in 2010.

Oded Bashan, Chairman & CEO of OTI, said: "We are honored to be a part of the Chinese MFA electronic passport program. The cooperation with HuaDa-ZhiBao has proven to be successful, professional and positions us to provide best-in-class ID solutions to the Chinese government."

Mr. Bashan continued: "As we have indicated, in our view, the Chinese opportunity is comprised of a series of projects and initiatives which are governed by different governmental regulations and agencies. Each one of these initiatives is large, complex, sophisticated and involves the integration of multiple sub systems, and thus takes long time. In recent years OTI has been working with strong local partners in order to be able to establish local products which support the Chinese opportunity."

About OTI

Established in 1990, OTI (Nasdaq:OTIV) designs, develops and markets secure contactless microprocessor-based smart card technology to address the needs of a wide variety of markets. Applications developed by OTI include product solutions for petroleum payment systems, homeland security solutions, electronic passports and IDs, payments, mass transit ticketing, parking and loyalty programs. OTI has a global network of regional offices to market and support its products. The company was awarded the Frost & Sullivan 2005 and 2006 Company of the Year Award in the field of smart cards. For more information on OTI, visit www.otiglobal.com.

The On Track Innovations Ltd. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5736

Safe Harbor for Forward-Looking Statements:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Whenever we use words such as "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions, we are making forward-looking statements. Because such statements deal with future events and are based on OTI's current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of OTI could differ materially from those described in or implied by the statements in this press release. For example, forward-looking statements include statements regarding our goals, beliefs, future growth strategies, objectives, plans or current expectations, such as those regarding the expected revenues to be generated from orders from the Chinese MFA's electronic passport program, our ability to establish local products which support the Chinese opportunity or those related to the superiority of our electronic passport solutions or the potential market or revenues thereof. Forward-looking statements could be impacted by market acceptance of new and existing products and our ability to execute production on orders, as well as the other risk factors discussed in OTI's Annual Report on Form 20-F for the year ended December 31, 2008, which is on file with the Securities and Exchange Commission. Although OTI believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. OTI disclaims any intention or obligation to update or revise any forward-looking statements, which speak only as of the date hereof, whether as a result of new information, future events or circumstances or otherwise.

CONTACT: On Track Innovations Ltd.

Galit Mendelson, Vice President of Corporate Relations

201 944 5200 ext. 111

galit@otiglobal.com

MS-IR LLC

Investor Relations:

Miri Segal

917-607-8654

msegal@ms-ir.com



AEM is the North American-based international trade group for the off-road equipment manufacturing industry. It annually polls its agricultural machinery manufacturers on sales predictions for a variety of farm-related equipment

Agricultural machinery manufacturers anticipate overall continued weakness in U.S. and Canadian tractor sales in 2010, according to the Association of Equipment Manufacturers' (AEM) annual "outlook" survey.

For all sizes of two-wheel tractors, however, declines are expected to be less steep than 2009 losses. Double-digit decreases are expected for four-wheel-drive tractors, following relatively flat business in 2009. Combine sales are predicted to drop by double digits for 2010 after 2009 sales growth. Sales of tractors and combines are then predicted to start rebounding through 2011 and 2012.

For other types of farm-related equipment in the survey, overall 2010 demand for most products in the U.S. and Canada is expected to improve after 2009 business declines. All categories are predicted to be in the plus column for 2011 and 2012.

AEM is the North American-based international trade group for the off-road equipment manufacturing industry. It annually polls its agricultural machinery manufacturers on sales predictions for a variety of farm-related equipment. Each forecast in the AEM survey is the average of responses from companies in each product line, predicting industry wide expectations rather than individual company performance, and unit sales rather than company profitability. The full survey results are online at www.aem.org in the Industry Trends section.

"The recession reached the agricultural sector in 2009, and the drop in equipment sales in most categories is attributed to a combination of the fall in commodity prices, significant drops in net farm income, the tightening of credit throughout the ag equipment distribution channel, and the overall reduction in economic confidence," commented AEM Vice President of Agricultural Services Charlie O'Brien.

"The recession is expected to continue to drive negative growth rates in many equipment categories in 2010. However, it is important to keep in mind that the larger equipment has been coming off of some very good production years, specifically the 100 HP tractors, which were at a 25-year-high watermark in 2008," O'Brien continued.

"Other influencing factors fueling market uncertainty include legislative issues such as cap and trade, the ongoing debate on increasing food production while reducing agriculture's contribution of approximately 30 percent of the world's greenhouse gases, Country Of Origin Labeling, and emission standards that will raise the cost of powered equipment," O'Brien stated.

www.aem.org

Association of Equipment Manufacturers

CONTACT: Pat Monroe of Association of Equipment Manufacturers,+1-414-298-4123, pmonroe@aem.org

Web site: http://www.aem.org/

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