Nov 6, 2009 (GlobeNewswire via COMTEX News Network) --

 * SMARTRAC acquires the assets of OTI's subsidiary MCT and the
   machinery and inlay production IP from OTI for EUR 8.5 Million
   (approx. $12.5 Million) in an asset deal
 * The Parties signed a supply agreement that will fully secure
   delivery for OTI's products and projects
 * SMARTRAC becomes OTI's exclusive supplier for wire-embedded and
   Dual Interface Inlays
 * The Parties agreed to settle all open patent disputes

AMSTERDAM, The Netherlands and ISELIN, N.J., Nov. 6, 2009 (GLOBE NEWSWIRE) -- SMARTRAC N.V. (FSE XETRA:SM7), a leading manufacturer and supplier of RFID transponders, and 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 they have signed binding agreements by which SMARTRAC acquires the assets of OTI's subsidiary Millennium Card's Technology Ltd. (MCT) and the machinery and inlay production intellectual property from OTI for EUR 8.5 million (approx. $12.5 million) in an asset deal. The Parties signed a supply agreement that will fully secure OTI's delivery of products and projects and SMARTRAC becomes OTI's exclusive supplier for wire-embedded and Dual Interface Inlays.

In addition, both parties will mutually accept and respect each other's patents especially in the field of Wire-Embedding and Dual Interface technology. As part of the agreements, all patent litigations and in particular all patent infringement legal proceedings between SMARTRAC and OTI have been ceased.

These agreements will strengthen SMARTRAC's leadership position in the global RFID inlay market by offering an even wider range of products by adding OTI's production and machinery to its manufacturing capacity. For OTI, the agreements are another step in its strategy to focus on complete end-to-end solutions. The sale of assets will improve OTI's cash flow position and significantly reduce its operating expenses. With access to SMARTRAC's patented technology and high secure production network, OTI strengthens its ability to support its existing and future secured ID projects and enjoys the known high volume production capacity that SMARTRAC provides.

According to the asset agreements, SMARTRAC acquires certain machinery and production intellectual property (IP) from OTI and MCT. SMARTRAC will pay an aggregate amount of EUR 8.5 million to be paid in multiple installments, whereof EUR 5 million will be paid before yearend and the balance will be paid in eight (8) equal quarterly installments starting the first quarter of 2010. As a result, OTI will cease to produce inlays, and SMARTRAC will become OTI's exclusive supplier for wire embedded and Dual Interface inlays. According to the agreement, OTI will be able to continue to fulfill its existing obligations and existing orders at the MCT site.

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