F-3









Exhibit 10.4  




AMENDMENT TO ASSET AND
SHARE PURCHASE AGREEMENT  



THIS AMENDMENT TO THE ASSET AND SHARE
PURCHASE AGREEMENT (the “Amendment”), is entered into and made effective as of
February 21, 2006 by and between Elbit Vision Systems Ltd., an Israeli company (the
“EVS”), Scanmaster Systems (IRT) Ltd. (“Scan”), Panoptes
Ltd. (the “Company”) and Ma’aragim Enterprises Ltd.
(“Ma’aragim”). 


W I T N E S S E T H :



WHEREAS, EVS, Scan, the Company and
Ma’aragim entered into a share and asset purchase agreement on December 27, 2005 (the
“SPA”); 



WHEREAS, the parties desire to amend
the SPA on the terms and conditions hereinafter set forth. 



NOW, THEREFORE, the parties hereby
agree as follows: 



     1.    
          This amendment constitutes an integral part of the SPA and sets forth the
          amendments agreed upon by the parties thereto. Any capitalized term not defined
          herein shall have the same meaning ascribed to it in the SPA. 



     2.    
          Section B. of the preamble is hereby amended and restated in its entirety as
          follows: 



     “B.    
          EVS desires to acquire all of the Assets (as defined below) and assume and be
          responsible for all of the obligations and liabilities of the Company arising on
          or prior to the Closing (as defined below), whether such liabilities are direct
          or indirect, matured or unmatured, fixed or contingent or otherwise (the
          “Obligations”) and the Company wishes to sell the Assets to EVS
          and have it assume its Obligations, for the purchase price set forth
          herein.” 



     3.    
          Section 1.1 of the SPA is hereby amended and restated in its entirety as
          follows: 



“1.1     Purchase and
Sale. Subject to the terms and conditions of this Agreement, on the Closing Date (as
defined below): (i) EVS shall purchase and acquire from the Company, and the Company shall
sell, transfer, assign, convey and deliver to EVS, all of the Company’s right, title
and interest in and to all of the assets listed in Schedule 1.1 (the
“Assets”), free and clear of all mortgages, pledges, liens, security
interests, conditional and installment sale agreements, encumbrances, charges or other
claims of third parties of any kind (“Liens”) and assume and be
responsible for all the Obligations; in consideration for the Purchase Consideration to be
provided by EVS in accordance with the Irrevocable Instructions (as defined below); and
(ii) Scan shall purchase and acquire from Ma’aragim and Ma’aragim shall sell,
transfer, assign, convey and deliver to Scan, (a) all of the issued and outstanding shares
of the Company (the “Shares”), free and clear of all Liens, and (b) the
Remaining Debt; in consideration for the Share and Loan Purchase Price.” 















     4.    
          Section 1.5 of the SPA is hereby amended and restated in its entirety as follows 



“1.5     Issuance of Buyer
Shares. The aggregate consideration (the “Purchase Consideration”)
for the Assets which will be paid by EVS as directed by the Company, shall be: (a) eight
hundred thousand (800,000) Ordinary Shares of EVS, nominal value NIS 1.00 per share (the
“EVS Shares”), subject to adjustment in the event of any share split,
share dividend, recapitalization, issuance of bonus shares or other adjustment of the
EVS’s Ordinary Shares prior to the Closing, and (b) the payment of Royalties (as
defined below) as further set forth in Section 1.6 below. On the Closing Date, EVS shall
issue (i) an aggregate of four hundred thousand (400,000) of the EVS Shares (the
“Initial Shares”), subject to adjustment in the event of any share split,
share dividend, recapitalization, issuance of bonus shares or other adjustment of the
EVS’s Ordinary Shares prior to the Closing to the Company or as otherwise directed in
the Irrevocable Instructions; and (ii) to the Escrow Agent an additional aggregate of four
hundred thousand (400,000) of the EVS Shares (the “Escrow Shares”),
subject to adjustment in the event of any share split, share dividend, recapitalization,
issuance of bonus shares or other adjustment of the EVS’s Ordinary Shares prior to
the Closing, which shall be deposited with an escrow agent, the identity of which shall be
approved by EVS and Ma’aragim prior to the Closing (the “Escrow
Agent”), and which shall be held by the Escrow Agent to satisfy the
indemnification obligations of the Company and Ma’aragim until April 1, 2007, all as
further set forth in the Escrow Agreement (as defined below).” 



     5.    
          The first sentence of Section 1.6 is hereby amended and restated in its entirety
          as follows: 



“1.6     Royalty
Payments. As part of the Purchase Consideration, EVS hereby undertakes to pay to
Ma’aragim, Royalties, according to the terms and conditions set forth in this
Section; provided however that in the event that either Bank Mizrachi T’fachot Ltd.
or Bank Hapoalim Ltd. (the “Banks”) call for an early repayment of their
respective loans or exercise the charges they have on the assets of EVS or Scan, as a
result of an event of default by either EVS or Scan, Ma’aragim’s right to
receive Royalties shall be subject to the priority rights of the Banks.” 



     6.    
          The following new Section 1.9 shall be added to the SPA: 




"1.9     Obligation
Assumption. EVS hereby assumes and is responsible for all of the Obligations, effective as of the Closing Date.”  



     7.    
          Sections 2.10(a), 5.4, 6.12, 7.3(e) and 7.6 of the SPA are hereby deleted in
          their entirety. 



     8.    
          Section 2.10(b) of the SPA is hereby amended and restated in its entirety as
          follows: 



     “(b)    
          All the agreements to which the Company is a party (including instruments,
          leases, licenses, arrangements, or undertakings of any nature, written or oral)
          (the “Material Agreements”) are in full force and effect and
          the Company has no knowledge of the invalidity of or grounds for rescission,
          avoidance or repudiation of any of the Material Agreements and, the Company has
          not received any notice of any intention to terminate any such agreement.” 



     9.    
          Section 2.10(e) of the SPA is hereby amended and restated in its entirety as
          follows: 



     “(e)    
          The Company has delivered to EVS accurate and complete copies (or accurate
          description of the terms, if such agreement is not in written form) of all
          Material Agreements, including all amendments thereto. Each Material Agreement
          is valid and in full force and effect, and, is enforceable by the Company in
          accordance with its terms.” 



     10.    
          Section 2.10(h) of the SPA is hereby amended and restated in its entirety as
          follows: 



     “(h)    
          The Material Agreements collectively constitute all of the Contracts necessary
          to enable the Company to conduct its business in the manner in which its
          business is currently being and proposed to be conducted.” 




2










     11.    
          Section 2.10(j) of the SPA is hereby amended and restated in its entirety as
          follows: 




     “(j)    
          Schedule 1.6(b)(i) provides an accurate description and breakdown of the
          Company’s backlog under Material Agreements.” 



     12.    
          The following new Section 6.5(m) shall be added to the SPA: 



     “(m)    
          An undertaking to transfer the 50,000 Ordinary Shares held by E.S.O.P. Trust
          Company on behalf of Mr. Nir Weinberg, in the form attached hereto as
          Schedule 6.5(m), duly executed by Ma’aragim.” 



     13.    
          In the event of any inconsistency or conflict between the provisions of the SPA,
          the provisions of this Amendment or any other document between the parties, this
          Amendment shall prevail and govern. Except as specifically amended herein, all
          terms, definitions and conditions of the SPA and related exhibits and schedules
          remain in full force and effect. 



     14.    
          This Amendment shall be construed in accordance with, and governed in all
          respects by, the internal laws of the State of Israel (without giving effect to
          principles of conflicts of laws). Each party to this Amendment consents to the
          exclusive jurisdiction and venue of the courts of District of Tel Aviv-Jaffa in
          the State of Israel. 



[Remainder of page
intentionally left blank.] 



3










IN WITNESS WHEREOF, the parties
hereto have entered into and signed this Amendment to be effective as of the date first
written above. 














	 	ELBIT VISION SYSTEMS LTD.





By: _____________________________



Name: ___________________________



Title: __________________________ 
















	 	SCANMASTER SYSTEMS (IRT) LTD.





By: _____________________________



Name: ___________________________



Title: __________________________ 

















	 	PANOPTES LTD.





By: _____________________________



Name: ___________________________



Title: __________________________ 
















	 	MA'ARAGIM ENTERPRISES LTD.



By: _____________________________



Name: ___________________________



Title: __________________________ 










4