F-1









Exhibit 4.14  




SECURITIES PURCHASE
AGREEMENT 



        THIS SECURITIES PURCHASE AGREEMENT
(the “AGREEMENT”), dated as of July 31, 2007, is made by and among Elbit
Vision Systems Ltd., a company organized under the laws of Israel, with headquarters
located at 1 Hayasur Street, Hasharon Industrial Park, Kadima, P.O.B. 5030, Israel (the
“COMPANY”), and Shavit Capital Fund GP, L.P, an exempted limited
partnership established under the laws of the Cayman Islands of Jerusalem Technology Park,
Building 98, P.O. Box 82 3rd Floor, Malcha, Jerusalem 96951, Israel (the
“BUYER”). 



        WHEREAS: 




     A.
          Subject to the terms and conditions set forth in this Agreement and pursuant to
          Section 4(2) of the Securities Act (as defined herein), and Rule 506 promulgated
          thereunder, the Company desires to issue and sell to the Buyer, and the Buyer,
          desires to purchase from the Company, securities of the Company as more fully
          described in this Agreement. 





     B.
          The Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
          conditions stated in this Agreement, (i) three million one hundred and seventy
          four thousand six hundred and three (3,174,603) Ordinary Shares Ordinary Shares
          (the “PURCHASED SHARES”); (ii) warrants, in substantially the
          form attached hereto as EXHIBIT A (the
          “WARRANTS”), to acquire up to one million five hundred and
          eighty-seven thousand three hundred and two (1,587,302) Ordinary Shares (as
          exercised, collectively, the “WARRANT SHARES”). 





     C.
          Contemporaneously with the execution and delivery of this Agreement, the parties
          hereto are executing and delivering a Registration Rights
          Agreement, substantially in the form attached hereto as
          EXHIBIT B (the “REGISTRATION RIGHTS
          AGREEMENT” and together with this Agreement and the Schedules and
          Exhibits hereto, the “TRANSACTION DOCUMENTS”), pursuant to
          which the Company has agreed to provide certain registration rights with respect
          to the Purchased Shares and the Warrant Shares under the 1933 Act and the rules
          and regulations promulgated thereunder, and applicable state securities laws. 



     D.
          The Purchased Shares, the Warrants and the Warrant Shares collectively are
          referred to herein as the “SECURITIES”. 



        NOW,
THEREFORE, the Company and each Buyer hereby agree as follows: 



	1.  	DEFINITIONS 






In addition to the terms defined
elsewhere in this Agreement, for all purposes of this Agreement, the following terms have
the meanings set forth in this Section 1:  



        “AFFILIATE”
means any Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person as such terms are used in and
construed under Rule 144 under the Securities Act. 



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        “COMMISSION”
means the United States Securities and Exchange Commission. 



        “COMPANY
COUNSEL” means Yigal Arnon & Co., 46th Floor, 1 Azrieli Center, Tel Aviv, Israel
67012. 



        “EXCHANGE
ACT” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder. 



        “ORDINARY
SHARES” means the Ordinary Shares of the Company, par value New Israeli Shekel 1.00
per share. 



        “PERSON”
means an individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, limited liability partnership,
joint stock company, government (or an agency or subdivision thereof) or other entity of
any kind. 



        “REGISTRATION
STATEMENT” means a registration statement covering the resale by the Buyer of the
Purchased Shares and sale of the Warrant Shares. 



        “RULE
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule. 



        “SECURITIES
ACT” means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder. 



        “SHORT
SALES” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act. 



        “TRANSACTION
DOCUMENTS” means this Agreement, the Warrant, and any other documents or agreements
executed in connection with the transactions contemplated hereunder. 



	2.  	PURCHASE
AND SALE OF PURCHASED SHARES AND WARRANTS. 






         a.       
          PURCHASE OF PURCHASED SHARES AND WARRANTS. Upon execution of this Agreement, the
          Company shall issue and sell to the Buyer, and the Buyer shall purchase from the
          Company, the Purchased Shares along with Warrants to acquire the Warrant Shares. 



         b.       
          PURCHASE PRICE. The purchase price (the “PURCHASE PRICE”) of
          the Purchased Shares and Warrants to be purchased by the Buyer, shall be one
          million five hundred thousand United States Dollars ($1,500,000). The exercise
          price of the Warrant Shares shall be equal to forty-five ($0.45) Cents for each
          Warrant Share exercised under the Warrants 



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         c.       
          PAYMENT DATE. Notwithstanding anything to the contrary herein, payment of the
          Purchase Price (the “PAYMENT DATE”) shall be by no later than
          August 31,2007. 



         d.       
          FORM OF PAYMENT. The Purchase Price shall be paid by wire transfer of
          immediately available funds in accordance with the Company’s written wire
          instructions. 



         e.       
          DELIVERY OF THE SHARE CERTIFICATES. Within seven days of the date hereof, the
          Company shall deliver to the office of Company Counsel, certificates for the
          Purchased Shares and the Warrants duly executed on behalf of the Company and
          registered in the name of the Buyer (which certificates shall be held in trust
          by the Company Counsel until actual receipt of the entire Purchase Price payable
          by the Buyer). 




    f.        DELIVERY
OF ANCILLARY DOCUMENTS.Concurrently, herewith, (i) the Company and the           Buyer
shall execute the Registration Rights Agreement; and (ii) the Company           shall
deliver to the Buyer the legal opinion attached hereto as EXHIBIT           C, and
a resolution of the Company’s Board of Directors           approving the
transactions contemplated herein. 





         g.       
          BINDING OBLIGATION. Upon execution of this Agreement, the Buyer has entered into
          a binding obligation to pay the full Purchase Price, and the Company has entered
          into a binding obligation to issue the Purchased Shares and the Warrants, which
          obligations cannot be terminated. 



	3.  	BUYER’S
REPRESENTATIONS AND WARRANTIES. 






The Buyer represents and warrants, as
of the date hereof and as of the Payment Date that: 



         a.       
          ORGANIZATION; AUTHORITY. The Buyer is an entity duly organized, validly existing
          and in good standing under the laws of the jurisdiction of its organization with
          full right, corporate or partnership power and authority to enter into and to
          consummate the transactions contemplated by this Agreement and otherwise to
          carry out its obligations hereunder and thereunder. The execution, delivery and
          performance by the Buyer of the transactions contemplated by this Agreement have
          been duly authorized by all necessary corporate or similar action on the part of
          the Buyer. Each Transaction Document to which it is a party has been duly
          executed by the Buyer, and when delivered by the Buyer in accordance with the
          terms hereof, will constitute the valid and legally binding obligation of the
          Buyer, enforceable against it in accordance with its terms, except (i) as
          limited by general equitable principles and applicable bankruptcy, insolvency,
          reorganization, moratorium and other laws of general application affecting
          enforcement of creditors’ rights generally, (ii) as limited by laws
          relating to the availability of specific performance, injunctive relief or other
          equitable remedies and (iii) insofar as indemnification and contribution
          provisions may be limited by applicable law. 



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         b.       
          OWN ACCOUNT. The Buyer understands that the Securities are “restricted
          securities” as defined in Rule 144 and have not been registered under the
          Securities Act or any applicable state securities law and is acquiring the
          Securities as principal for its own account and not with a view to or for
          distributing or reselling such Securities or any part thereof in violation of
          the Securities Act or any applicable state securities law, has no present
          intention of distributing any of such Securities in violation of the Securities
          Act or any applicable state securities law and has no direct or indirect
          arrangement or understandings with any other persons to distribute or regarding
          the distribution of such Securities (this representation and warranty not
          limiting the Buyer’s right to sell the Securities pursuant to a
          Registration Statement or otherwise in compliance with applicable federal and
          state securities laws) in violation of the Securities Act or any applicable
          state securities law. The Buyer is acquiring the Securities hereunder in the
          ordinary course of its business. 



         c.       
          PURCHASER STATUS. At the time the Buyer was offered the Securities, it was, and
          at the date hereof it is, and on each date on which it exercises any Warrants,
          it will be either: (i) an “accredited investor” as defined in Rule
          501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
          “qualified institutional buyer” as defined in Rule 144A(a) under the
          Securities Act. The Buyer is not required to be registered as a broker-dealer
          under Section 15 of the Exchange Act. 



         d.       
          EXPERIENCE OF THE BUYER. The Buyer, either alone or together with its
          representatives, has such knowledge, sophistication and experience in business
          and financial matters so as to be capable of evaluating the merits and risks of
          the prospective investment in the Securities, and has so evaluated the merits
          and risks of such investment. The Buyer is able to bear the economic risk of an
          investment in the Securities and, at the present time, is able to afford a
          complete loss of such investment. 



         e.       
          GENERAL SOLICITATION. The Buyer is not purchasing the Securities as a result of
          any advertisement, article, notice or other communication regarding the
          Securities published in any newspaper, magazine or similar media or broadcast
          over television or radio or presented at any seminar. 



         f.       
          SHORT SALES AND CONFIDENTIALITY PRIOR TO THE DATE HEREOF. During the period
          commencing from the time that a Buyer was first informed (verbally or in
          writing) by the Company or any other Person about the transactions contemplated
          hereunder until three months after the date hereof (“DISCUSSION
          TIME”), other than the transaction contemplated hereunder, the Buyer has
          not, nor has any Person acting on behalf of or pursuant to any understanding
          with the Buyer, directly or indirectly, effected or agreed to effect any Short
          Sale, whether or not against the box, established any “put equivalent
          position” (as defined in Rule 16a-1(h) under the 1934 Act) with respect to
          the Ordinary Shares, borrowed or pre-borrowed any Ordinary Shares, or granted
          any other right (including, without limitation, any put or call option) with
          respect to the Ordinary Shares or with respect to any security that includes,
          relates to or derived any significant part of its value from the Ordinary Shares
          or otherwise sought to hedge its position in the Securities (each, a
          “PROHIBITED TRANSACTION”). Prior to three months after the date
          hereof, the Buyer shall not, and shall cause its Affiliates not to, engage,
          directly or indirectly, in a Prohibited Transaction. Notwithstanding the
          foregoing, if the Buyer is a multi-managed investment vehicle whereby separate
          portfolio managers manage separate portions of the Buyer’s assets and the
          portfolio managers have no direct knowledge of the investment decisions made by
          the portfolio managers managing other portions of the Buyer’s assets, the
          representation set forth above shall only apply with respect to the portion of
          assets managed by the portfolio manager that made the investment decision to
          purchase the Securities covered by this Agreement. Other than to other Persons
          party to this Agreement, the Buyer has maintained the confidentiality of all
          disclosures made to it in connection with this transaction (including the
          existence and terms of this transaction). 



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         g.       
          LEGENDS. The Buyer understands that the certificates or other instruments
          representing the Purchased Shares and the Warrants and, until such time as the
          resale of the Purchased Shares and the Warrant Shares have been registered under
          the Securities’ Act, the certificates representing the Warrant Shares,
          except as set forth below, shall bear any legend as required by the “blue
          sky” laws of any state, and a restrictive legend in substantially the
          following form (and a stop-transfer order may be placed against transfer of such
          stock certificates): 



“THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
OR IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION, ACCOMPANIED BY AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER SUCH ACT. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED”. 



The legend set forth above shall be
removed and the Company shall issue a certificate without such legend to the holder of the
Securities upon which it is stamped, if, unless otherwise required by state securities
laws, (i) such Securities are registered for sale under the 1933 Act, or (ii) in
connection with a sale, assignment or other transfer, such holder provides the Company
with an opinion of counsel, in a generally acceptable form, to the effect that such sale,
assignment or transfer of the Securities is made in accordance with the provisions of
Regulation S (§§ 230.901 through 230.905, and Preliminary Notes, may be made
without registration under the Securities Act and that such legend is no longer required. 



	4.  	REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. 






The Company  represents  and warrants to the Buyer as of the date hereof and as of the Payment  Date,  and
acknowledges the Buyer is entering into this transaction in reliance thereon, as follows:




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         a.       
          ORGANIZATION; GOOD STANDING; POWER; etc. The Company is duly organized and
          validly existing under the laws of the State of Israel. The Company has the
          requisite power and authority to execute, deliver and perform this Agreement and
          the other Transaction Documents and to consummate the transactions contemplated
          hereby and thereon. The execution, delivery and performance by the Company of
          this Agreement and consummation of the transactions contemplated hereby have
          been duly authorized by all necessary corporate actions of the Company. Each
          Transaction Document has been (or upon delivery will have been) duly executed by
          the Company and, when delivered in accordance with the terms hereof, will
          constitute the valid and binding obligation of the Company enforceable against
          the Company in accordance with its terms, except as such enforceability may be
          limited by applicable bankruptcy, insolvency, reorganization, moratorium,
          liquidation or similar laws relating to, or affecting generally the enforcement
          of, creditors’ rights and remedies or by other equitable principles of
          general application. Each of the Purchased Shares and Warrant Shares, when
          issued to the Buyer according to this Agreement will be duly authorized, validly
          issued, fully paid, and non-assessable, and free and clear of liens, security
          interests, pledges, charges and encumbrances (“Liens”) other than
          those Liens created or known of by the Buyers. No securities of the Company are
          entitled to preemptive or similar rights, and no third party has any right of
          first refusal, preemptive right, right of participation, or any similar right to
          participate in the transactions contemplated by the Transaction Documents. Other
          than as set forth in Schedule 3a., hereto, to the knowledge
          of the Company, there are no outstanding options, warrants, rights to subscribe
          to, calls or commitments of any character whatsoever relating to, or securities,
          rights or obligations convertible into or exchangeable for, or giving any third
          party any right to subscribe for or acquire, any shares of the Company, or
          contracts, commitments, understandings or arrangements by which the Company is
          or may become bound to issue additional Ordinary Shares, or securities or rights
          convertible or exchangeable into Ordinary Shares. The issue and sale of the
          Securities will not, immediately or with the passage of time, obligate the
          Company to issue Ordinary Shares or other securities to any Person (other than
          the Buyer) and will not result in a right of any holder of Company securities to
          adjust the exercise, conversion, exchange or reset price under such securities. 



         b.       
          NO CONFLICTS. The Company is not in violation of any of the provisions of
          its memorandum or articles of incorporation or other organizational or charter
          documents. The execution, delivery and performance of the Transaction Documents
          by the Company and the consummation by the Company of the transactions
          contemplated thereby do not and will not (i) conflict with or violate any
          provision of the Company’s or ScanMaster Systems (IRT) Ltd. (the
          “Subsidiary”) certificate or articles of incorporation, bylaws
          or other organizational or charter documents, or (ii) conflict with, or
          constitute a default (or an event that with notice or lapse of time or both
          would become a default) under, or give to others any rights of termination,
          amendment, acceleration or cancellation (with or without notice, lapse of time
          or both) of, any agreement, credit facility, debt or other instrument
          (evidencing a Company or Subsidiary debt or otherwise) or other understanding to
          which the Company or the Subsidiary is a party or by which any property or asset
          of the Company or the Subsidiary is bound or affected, or (iii) result in a
          violation of any law, rule, regulation, order, judgment, injunction, decree or
          other restriction of any court or governmental authority to which the Company or
          a Subsidiary is subject, or by which any property or asset of the Company or a
          Subsidiary is bound or affected; except in the case of each of clauses (ii) and
          (iii), such as could not, individually or in the aggregate, have or reasonably
          be expected to result in a Material Adverse Effect. “MATERIAL
ADVERSE EFFECT” means any of (A) a material and adverse effect on the legality,
validity or enforceability of any Transaction Document, (B) a material and adverse effect
on the results of operations, assets, business or condition (financial or otherwise) of
the Company, or (C) an adverse impairment to the Company’s ability to perform on a
timely basis its obligations under any Transaction Document.



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         c.       
          CAPITALIZATION. The authorized capitalization of EVS on the date hereof is
          90,000,000 NIS divided into 90,000,000 ordinary shares, par value NIS 1.00 each.
          As of the date hereof, 47,621,351 ordinary shares are outstanding. 



         d.       
          DOCUMENTS. The Company has filed all reports required to be filed by it under
          the Securities Act and the Exchange Act, including pursuant to Section 13(a) or
          15(d) thereof, for the twelve months preceding the date hereof (or such shorter
          period as the Company was required by law to file such reports) (the foregoing
          materials together with reports on Form 6-K furnished by the Company to the
          Commission being collectively referred to herein as the “SEC
          REPORTS”) on a timely basis or has timely filed a valid extension of
          such time of filing and has filed any such SEC Reports prior to the expiration
          of any such extension. 



        As
of their respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and regulations of
the Securities and Exchange Commission (the “Commission”) promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they were made,
not misleading. 



         e.       
          FINANCIAL STATEMENTS. The audited consolidated financial statements (the
          “Financial Statements”) for the year ended December 31, 2006 of EVS
          disclosed all material liabilities of EVS as of the date thereof, were prepared
          in accordance with generally accepted standards in the United States
          consistently applied throughout the periods involved and fairly present, in all
          material respects, the consolidated financial condition, results of operations,
          cash flows and changes in shareholders’ equity of EVS and its consolidated
          subsidiaries at the dates and for the periods presented. 



         f.       
          FILINGS, CONSENTS AND APPROVALS. The Company is not required to obtain any
          consent, waiver, authorization or order of, give any notice to, or make any
          filing or registration with, any court or other federal, state, local or other
          governmental authority or other Person in connection with the execution,
          delivery and performance by the Company of the Transaction Documents, other than
          (i) the filing with the United States Securities and Exchange Commission (the
          “Commission”) of the Registration Statement in accordance with the
          requirements of the Registration Rights Agreement, (ii) filings required by
          state securities laws, and (iii) those that have been made or obtained prior to
          the date of this Agreement. 




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         g.       
          MATERIAL CHANGES. Since the date of the latest audited financial statements
          included within the SEC Reports, except as specifically disclosed in the SEC
          Reports, (i) there has been no event, occurrence or development that has had or
          that could reasonably be expected to result in a Material Adverse Effect, (ii)
          the Company has not incurred any liabilities (contingent or otherwise) other
          than (A) trade payables, accrued expenses and other liabilities incurred in the
          ordinary course of business consistent with past practice and (B) liabilities
          not required to be reflected in the Company’s financial statements pursuant
          to GAAP or required to be disclosed in filings made with the Commission, (iii)
          the Company has not altered its method of accounting or the identity of its
          auditors, (iv) the Company has not declared or made any dividend or distribution
          of cash or other property to its stockholders or purchased, redeemed or made any
          agreements to purchase or redeem any shares of its capital stock, and (v) the
          Company has not issued any equity securities to any officer, director or
          Affiliate, except pursuant to existing Company stock option plans. The Company
          does not have pending before the Commission any request for confidential
          treatment of information. 



         h.       
          LITIGATION. There is no action which (i) adversely affects or challenges the
          legality, validity or enforceability of any of the Transaction Documents or the
          Securities or (ii) except as specifically disclosed in the SEC Reports, could,
          if there were an unfavorable decision, individually or in the aggregate, have or
          reasonably be expected to result in a Material Adverse Effect. Neither the
          Company nor the Subsidiary, nor any director or officer thereof (in his or her
          capacity as such), is or has been the subject of any action involving a claim of
          violation of or liability under federal or state securities laws or a claim of
          breach of fiduciary duty, except as specifically disclosed in the SEC Reports.
          There has not been, and to the knowledge of the Company, there is not pending
          any investigation by the Commission involving the Company or any current or
          former director or officer of the Company (in his or her capacity as such). The
          Commission has not issued any stop order or other order suspending the
          effectiveness of any registration statement filed by the Company or any
          Subsidiary under the Exchange Act or the Securities Act. 



         i.       
          LABOR RELATIONS. No material labor dispute exists or, to the knowledge of the
          Company, is imminent with respect to any of the employees of the Company. 



         j.       
          COMPLIANCE. Neither the Company nor its Subsidiary (i) is in default under or in
          violation of (and no event has occurred that has not been waived that, with
          notice or lapse of time or both, would result in a default by the Company or the
          Subsidiary under), nor has the Company or any Subsidiary received notice of a
          claim that it is in default under or that it is in violation of, any indenture,
          loan or credit agreement or any other agreement or instrument to which it is a
          party or by which it or any of its properties is bound (whether or not such
          default or violation has been waived), (ii) is in violation of any order of any
          court, arbitrator or governmental body, or (iii) is or has been in violation of
          any statute, rule or regulation of any governmental authority, including without
          limitation all foreign, federal, state and local laws relating to taxes,
          environmental protection, occupational health and safety, product quality and
          safety and employment and labor matters, except in each case as could not,
          individually or in the aggregate, have or reasonably be expected to result in a
          Material Adverse Effect. The Company is in compliance with all effective
          requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and
          regulations thereunder, that are applicable to it, except where such
          noncompliance could not have or reasonably be expected to result in a Material
          Adverse Effect. 



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         k.       
          REGULATORY PERMITS. The Company and the Subsidiary possess all certificates,
          authorizations and permits issued by the appropriate federal, state, local or
          foreign regulatory authorities necessary to conduct their respective businesses
          as described in the SEC Reports, except where the failure to possess such
          permits could not, individually or in the aggregate, have or reasonably be
          expected to result in a Material Adverse Effect, and neither the Company nor the
          Subsidiary has received any notice of proceedings relating to the revocation or
          modification of any such permits. 



         l.       
          TITLE TO ASSETS. The Company and the Subsidiary have good and marketable title
          in fee simple to all real property owned by them that is material to their
          respective businesses and good and marketable title in all personal property
          owned by them that is material to their respective businesses, in each case free
          and clear of all Liens, except for Liens as do not materially affect the value
          of such property and do not materially interfere with the use made and proposed
          to be made of such property by the Company and the Subsidiary. Any real property
          and facilities held under lease by the Company and the Subsidiary are held by
          them under valid, subsisting and enforceable leases of which the Company and the
          Subsidiary are in compliance, except as could not, individually or in the
          aggregate, have or reasonably be expected to result in a Material Adverse
          Effect. 



         m.       
          PATENTS AND TRADEMARKS. The Company and the Subsidiary have, or have rights to
          use, all patents, patent applications, trademarks, trademark applications,
          service marks, trade names, copyrights, licenses and other similar rights that
          are necessary or material for use in connection with their respective businesses
          as described in the SEC Reports and which the failure to so have could,
          individually or in the aggregate, have or reasonably be expected to result in a
          Material Adverse Effect (collectively, the “INTELLECTUAL PROPERTY
          RIGHTS”). Except as set forth in the SEC Reports, neither the Company nor
          the Subsidiary has received a written notice that the Intellectual Property
          Rights used by the Company or any Subsidiary violates or infringes upon the
          rights of any Person. Except as set forth in the SEC Reports, to the knowledge
          of the Company, all such Intellectual Property Rights are enforceable and there
          is no existing infringement by another Person of any of the Intellectual
          Property Rights. 



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         n.       
          INSURANCE The Company and the Subsidiary are insured by insurers of recognized
          financial responsibility against such losses and risks and in such amounts as
          are prudent and customary in the businesses in which the Company and the
          Subsidiary are engaged. The Company has no reason to believe that it will not be
          able to renew its and the Subsidiary’s existing insurance coverage as and
          when such coverage expires or to obtain similar coverage from similar insurers
          as may be necessary to continue its business on terms consistent with market for
          the Company’s and the Subsidiary’s respective lines of business. 



         o.       
          TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. Except as set forth in the SEC
          Reports and in Schedule 3(o) hereto, none of the officers or directors of the
          Company and, to the knowledge of the Company, none of the employees of the
          Company is presently a party to any transaction with the Company or any
          Subsidiary (other than for services as employees, officers and directors),
          including any contract, agreement or other arrangement providing for the
          furnishing of services to or by, providing for rental of real or personal
          property to or from, or otherwise requiring payments to or from any officer,
          director or such employee or, to the knowledge of the Company, any entity in
          which any officer, director, or any such employee has a substantial interest or
          is an officer, director, trustee or partner. 



         p.       
          INTERNAL ACCOUNTING CONTROLS. The Company and the Subsidiary maintain a system
          of internal accounting controls sufficient to provide reasonable assurance that
          (i) transactions are executed in accordance with management’s general or
          specific authorizations, (ii) transactions are recorded as necessary to permit
          preparation of financial statements in conformity with GAAP and to maintain
          asset accountability, (iii) access to assets is permitted only in accordance
          with management’s general or specific authorization, and (iv) the recorded
          accountability for assets is compared with the existing assets at reasonable
          intervals and appropriate action is taken with respect to any differences. The
          Company has established disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
          disclosure controls and procedures to ensure that material information relating
          to the Company, including its Subsidiary, is made known to the certifying
          officers by others within those entities, particularly during the period in
          which the Company’s Form 20-F is being prepared. The Company’s
          certifying officers have evaluated the effectiveness of the Company’s
          controls and procedures in accordance with Item 307 of Regulation S-K under the
          Exchange Act for the Company’s most recently ended fiscal year (such date,
          the “EVALUATION DATE”). The Company presented in its most recently
          filed Form 20-F the conclusions of the certifying officers about the
          effectiveness of the disclosure controls and procedures based on their
          evaluations as of the Evaluation Date. Since the Evaluation Date, there have
          been no significant changes in the Company’s internal controls (as such
          term is defined in Item 308(c) of Regulation S-K under the Exchange Act) or, to
          the Company’s knowledge, in other factors that could significantly affect
          the Company’s internal controls. 



10











         q.       
          SOLVENCY. Based on the financial condition of the Company as of the Closing Date
          (and assuming that the Closing shall have occurred), (i) the Company’s fair
          saleable value of its assets exceeds the amount that will be required to be paid
          on or in respect of the Company’s existing debts and other liabilities
          (including known contingent liabilities) as they mature, (ii) the Company’s
          assets do not constitute unreasonably small capital to carry on its business for
          the current fiscal year as now conducted and as proposed to be conducted
          including its capital needs taking into account the particular capital
          requirements of the business conducted by the Company, and projected capital
          requirements and capital availability thereof, and (iii) the current cash flow
          of the Company, together with the proceeds the Company would receive, were it to
          liquidate all of its assets, after taking into account all anticipated uses of
          the cash, would be sufficient to pay all amounts on or in respect of its debt
          when such amounts are required to be paid. The Company does not intend to incur
          debts beyond its ability to pay such debts as they mature (taking into account
          the timing and amounts of cash to be payable on or in respect of its debt). 



         r.       
          CERTAIN REGISTRATION MATTERS. Assuming the accuracy of the Buyers’
          representations and warranties set forth herein, no registration under the
          Securities Act is required for the offer and sale of the Shares and Warrants and
          the offer of the Warrant Shares by the Company to the Buyers under the
          Transaction Documents. The Company is eligible to register its Ordinary Shares
          for resale by the Investors under Form F-3 promulgated under the Securities Act.
          Except as specified in the Registration Rights Agreement, the Company has not
          granted or agreed to grant to any Person any rights (including
          “piggy-back” registration rights) to have any securities of the
          Company registered with the Commission or any other governmental authority that
          have not been satisfied. 



         s.       
          LISTING AND MAINTENANCE REQUIREMENTS. Except as specified in the SEC Reports,
          the Company has not, in the two years preceding the date hereof, received notice
          from any Trading Market to the effect that the Company is not in compliance with
          the listing or maintenance requirements thereof. The issuance and sale of the
          Securities under the Transaction Documents does not contravene the rules and
          regulations of the Trading Market on which the Ordinary Shares are currently
          quoted (the “Principal Market”), and no approval of the shareholders
          of the Company thereunder is required for the Company to issue and deliver to
          the Buyers the Securities contemplated by Transaction Documents. 



         t.       
          INVESTMENT COMPANY. The Company is not, and is not an Affiliate of, and
          immediately following the Closing will not have become, an “investment
          company” within the meaning of the Investment Company Act of 1940, as
          amended. 



         u.       
          NO ADDITIONAL AGREEMENTS. The Company does not have any agreement or
          understanding with any Buyer with respect to the transactions contemplated by
          the Transaction Documents other than as specified in the Transaction Documents. 



         v.       
          FOREIGN CORRUPT PRACTICES. To the knowledge of the Company, neither the Company,
          nor the Subsidiary, nor any director, officer, agent, employee or other Person
          acting on behalf of the Company or the Subsidiary has, in the course of its
          actions for, or on behalf of, the Company (i) used any corporate funds for any
          unlawful contribution, gift, entertainment or other unlawful expenses relating
          to political activity; (ii) made any direct or indirect unlawful payment to any
          foreign or domestic government official or employee from corporate funds; (iii)
          violated or is in violation of any provision of the U.S. Foreign Corrupt
          Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate,
          payoff, influence payment, kickback or other unlawful payment to any foreign or
          domestic government official or employee. 



11












         w.       
          DISCLOSURE. The Company confirms that neither it nor any Person acting on its
          behalf has provided any Buyer or its respective agents or counsel with any
          information that the Company believes constitutes material, non-public
          information except insofar as the existence and terms of the proposed
          transactions hereunder may constitute such information. The Company understands
          and confirms that the Buyers will rely on the foregoing representations and
          covenants in effecting transactions in securities of the Company. All disclosure
          provided to the Buyers regarding the Company, its business and the transactions
          contemplated hereby, furnished by or on behalf of the Company (including the
          Company’s representations and warranties set forth in this Agreement) are
          true and correct and do not contain any untrue statement of a material fact or
          omit to state any material fact necessary in order to make the statements made
          therein, in light of the circumstances under which they were made, not
          misleading. 



         x.       
          NO GENERAL SOLICITATION; COMPLIANCE WITH SECURITIES LAWS. Neither the Company,
          nor any of its affiliates, nor to the knowledge of the Company, any Person
          acting on its or their behalf, has engaged in any form of “general
          solicitation” or “general advertising” or Directed Selling
          Efforts (within the meaning of Regulation D or S, respectively) in connection
          with the offer or sale of the Securities. The Securities have been offered in
          compliance with all applicable securities laws, including, without limitation,
          the Israeli Securities Law, 1968. 



         y.       
          ISRAELI LAW COMPLIANCE. The Company is in compliance in all material respects
          with all conditions and requirements stipulated by the instruments of approval
          granted to it with respect to the “Approved Enterprise” status of any
          of the Company’s facilities by Israeli laws and regulations relating to
          such “Approved Enterprise” status and other tax benefits received by
          the Company; and the Company or its Subsidiary have not received any notice of
          any proceeding or investigation relating to revocation or modification of any
          “Approved Enterprise” status granted with respect to any of the
          Company’s facilities which the Company believes could reasonably be
          expected to result in material liability to the Company. The Company and its
          Subsidiary are not in violation of any condition or requirement stipulated by
          the instruments of approval granted to the Company by the Office of Chief
          Scientist in the Israeli Ministry of Industry and Trade (the “OCS”)
          and any applicable laws and regulations with respect to any research and
          development grants given to it by such office. All information supplied by the
          Company with respect to such applications was true, correct and complete in all
          material respects when supplied to the appropriate authorities. The
          Company’s and its Subsidiary’s contingent liabilities to the OCS are
          disclosed in the Company’s SEC Reports. 



12











	5.  	MISCELLANEOUS. 






         a.       
          GOVERNING LAW. This Agreement shall be governed by and construed in accordance
          with the internal laws of the State of Israel, without giving effect to any
          statutes concerning choice or conflict of law (whether of the State of Israel or
          any other jurisdiction) that would cause the application of the laws of any
          jurisdiction other that the State of Israel. Any controversy or claim arising
          out of or in connection with this agreement or any breach or alleged breach
          hereof shall be exclusively resolved by the competent courts of Tel Aviv,
          Israel, and each of the parties hereby irrevocably submits to the exclusive
          jurisdiction of such courts. 



         b.       
          SURVIVAL.          The  representations  and warranties of the Buyer and the Company  contained in Sections 3 (other
than 3.c.  relating to  capitalization  which shall survive without  limitation) and 4 respectively  shall
survive for a period of two years following the date hereof.
 



         c.       
          COUNTERPARTS. This Agreement may be executed in two or more identical
          counterparts, all of which shall be considered one and the same agreement and
          shall become effective when counterparts have been signed by each party and
          delivered to the other party; provided that a facsimile signature shall be
          considered due execution and shall be binding upon the signatory thereto with
          the same force and effect as if the signature were an original, not a facsimile
          signature. 



         d.       
          HEADINGS. The headings of this Agreement are for convenience of reference and
          shall not form part of, or affect the interpretation of, this Agreement. 



         e.       
          SEVERABILITY. If any provision of this Agreement shall be invalid or
          unenforceable in any jurisdiction, such invalidity or unenforceability shall not
          affect the validity or enforceability of the remainder of this Agreement in that
          jurisdiction or the validity or enforceability of any provision of this
          Agreement in any other jurisdiction. 



         f.       
          ENTIRE AGREEMENT; AMENDMENTS. This Agreement supersedes all other prior oral or
          written agreements between the Buyer, the Company, their Affiliates and Persons
          acting on their behalf with respect to the matters discussed herein, and this
          Agreement and the instruments referenced herein contain the entire understanding
          of the parties with respect to the matters covered herein and therein and,
          except as specifically set forth herein or therein, neither the Company nor the
          Buyer makes any representation, warranty, covenant or undertaking with respect
          to such matters. No provision of this Agreement may be amended other than by an
          instrument in writing signed by the Company and the Buyer. No provision hereof
          may be waived other than by an instrument in writing signed by the party against
          whom enforcement is sought. 



         g.       
          NOTICES. Any notices, consents, waivers or other communications required or
          permitted to be given under the terms of this Agreement must be in writing and
          will be deemed to have been delivered: (i) upon receipt, when delivered
          personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
          transmission is mechanically or electronically generated and kept on file by the
          sending party); or (iii) two business days in Israel after deposit with an
          overnight courier service, in each case properly addressed to the party to
          receive the same. The addresses and facsimile numbers for such communications
          shall be: 



13











If to the Company: 


	 		
	 		
	 		
	 		
	 		
	 	Elbit Vision Systems Ltd.
	 	1 Hayasur Street,
	 	Hasharon Industrial Park,
	 	Kadima, P.O. Box 60920,
	 	Israel
	 	Telephone:	972-9-866-1610
	 	Fax:	972-9-866-1700








	 	
With
a copy to (which shall not constitute notice): 





	 		
	 		
	 		
	 		
	 		
	  	Yigal Arnon & Co.
	 	One Azrieli Center, Round Tower, Tel Aviv, Israel
	 	Telephone:	+(972)-3-608-7864
	 	Facsimile:	+(972)-3-608-7714
	 	Attention:	Adrian Daniels, Adv.





		
		
		
		
		
	 	If to the Buyer: 

         Shavit Capital Fund GP, L.P

Jerusalem Technology Park,
	 	Building 98, P.O. Box 82 3rd Floor,
	 	Malcha, Jerusalem 96951,
	 	Israel
	 	Fax: 972-2-649-0741
	 	Attn: Gary Leibler
	 
	 	with copies to:
	 
	 	McDermott Will & Emery LLP
	 	340 Madison Avenue
	 	New York, NY 10173-1922
	 	Fax: (212)547-5444
	 	Attn: Mark Selinger
	 	          Meir A. Lewittes
	 
	 	Ephraim Abramson & Co.
	 	16B King George Street
	 	Jerusalem 94229
	 	Israel
	 	Fax: (972)-2-623-3229
	 	Attn: Harry Grynberg, Adv.







or to such other address and/or
facsimile number and/or to the attention of such other Person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the recipient
of such notice, consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C) provided by an
overnight courier service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from an overnight courier service in accordance with clause (i), (ii)
or (iii) above, respectively. 



         h.       
          SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the
          benefit of the parties and their respective successors and assigns, including
          any Buyers of the Purchased Shares or the Warrants. The Buyer may assign some or
          all of its rights hereunder without the consent of the Company, in which event
          such assignee shall be deemed to be a Buyer hereunder with respect to such
          assigned rights. 



14











         i.       
          NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the
          parties hereto and their respective permitted successors and assigns, and is not
          for the benefit of, nor may any provision hereof be enforced by, any other
          Person. 



         j.       
          FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and
          performed, all such further acts and things, and shall execute and deliver all
          such other agreements, certificates, instruments and documents, as any other
          party may reasonably request in order to carry out the intent and accomplish the
          purposes of this Agreement and the consummation of the transactions contemplated
          hereby. 



         k.       
          NO STRICT CONSTRUCTION. The language used in this Agreement will be deemed to be
          the language chosen by the parties to express their mutual intent, and no rules
          of strict construction will be applied against any party. 



[SIGNATURE PAGE
FOLLOWS] 



15











        IN
WITNESS WHEREOF, the Buyer and the Company have caused this Securities Purchase Agreement
to be duly executed as of the date first written above. 



COMPANY: 


ELBIT VISION SYSTEMS LTD.





By:_________________________________

Name: David Gal    Yaron Menashe

Title:   CEO                       CFO





BUYER:


Shavit Capital Fund GP, L.P


By: Its General Partner - Shavit Capital (GP) Management Ltd.





By: __________________________



Title: _________________________





16











EXHIBITS
SCHEDULE


		
		
		
		
		
	Exhibit A	Form of Warrant
	Exhibit B	Registration Rights Agreement
	Exhibit C	Opinion






17










SCHEDULE 3A  



The Company has granted share options
to purchase up to 4,774,353 ordinary shares, to its employees, officers, directors and
consultants pursuant to its existing employee share option plans. 



The Company granted its public
shareholders warrants to purchase up to 2,257,664 ordinary shares pursuant to a plan of
arrangement approved by the District Court of Haifa in November 2003. 



In August 2005, the Company issued a
warrant to Mizrachi Bank for the purchase of up to 571,428 ordinary shares. 



Pursuant to an agreement dated
February 21, 2006 (the “Mivtach Agreement”) with MSND Real Estate
Holdings Ltd. (“Mivtach”), the Company issued Mivtach warrants to
purchase up to 4,000,000 ordinary shares pursuant to a warrant; and pursuant to a
Convertible Promissory Note (the “Note”) issued on the same date, the
Company may issue Mivtach up to 6,000,000 Ordinary Shares upon the conversion of the Note
by Mivtach. 



On July 31, 2007, the Company and
Mivtach entered into an agreement, pursuant to which, the Note was amended (the
“Amendment”). Pursuant to the Amendment, in place of the 6,000,000
Ordinary Shares issuable upon conversion of the Note, Mivtach will be issued with
9,523,810 Ordinary Shares in consideration for a payment to the Company of $3,000,000, and
Mivtach will receive a 4 year warrant to purchase 2,380,952 Ordinary Shares at an exercise
price of $0.45 per share. Mivtach also agreed to waive its rights to exercise at least
3,000,000 Ordinary Shares issuable under the Mivtach Agreement, agreeing to exercise no
more than 1,000,000 Ordinary Shares issuable under the Amendment. 



The Company has granted Elbit Ltd.,
options to purchase up to 1,512,863 ordinary shares pursuant to a plan of arrangement
approved by the District Court of Haifa in November 2003. 



Pursuant to an agreement with Elbit
Ltd., consummated on July 31, 2007, Elbit Ltd., will (i) convert an existing loan to the
Comapny in the amount of $470,000 (including accrued interest up until March 31, 2007)
into 1,492,063 Ordinary Shares, at a price of $0.315 per share; (ii) invest $250,000 in
the Company in consideration for 793,651 Ordinary Shares at a price of $0.315 per share;
and (iii) will receive a 4 year warrant to purchase 396,825 Ordinary Shares at an exercise
price of $0.45 per share. 



In June 2007 the Company completed an
investment with a group of Israeli institutional investors, or the Israeli Investors, for
the purchase of 6,290,941 Ordinary Shares for $0.315 per share, of an aggregate price of
$1,981,646. Pursuant to the transaction, the investors were also issued warrants to
purchase 3,145,472 Ordinary Shares at an exercise price per share of $0.45, exercisable
for a period of 4 years. 


See also the capitalization table attached.



18











SCHEDULE 3(O)  



On May 1, 2006, the Company entered
into a Consulting Agreement with MA&AT, an Austrian company which receives services
from, but is not controlled by a director of the Company Mr. Nir Alon. The Consulting
Agreement was ratified by the shareholders of the company at a meeting of the Company held
on November 20, 2006. 




19