20-F










Exhibit 4.9  



REGISTRATION RIGHTS
AGREEMENT  



        THIS
 REGISTRATION  RIGHTS  AGREEMENT (this  "Agreement")  made as of  January 1, 2007,  by and
among Elbit Vision Systems Ltd. (the "Company") and Elbit Ltd. ("Elbit").  




W  I  T  N  E  S  S  E  T  H: 



        WHEREAS,
Elbit holds 2,647,643 Ordinary Shares of the Company and together with Water Technologies
Ltd., a fully owned subsidiary of Elbit, holds warrants to purchase 1,512,939
Ordinary Shares of the Company (all of such Ordinary Shares, including the Ordinary
Shares issuable upon exercise of such warrants being the “Shares”), and
the Company has agreed to provide certain registration rights under the Securities Act of
1933, as amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the “1933 Act”). 



        NOW,
THEREFORE, in consideration of the mutual promises and covenants set forth herein, the
parties hereby agree as follows: 



         1.       
          Registration of Shares. 



        (a)
          The Company shall file with the United States Securities and Exchange
Commission           (the “SEC”) a registration statement on Form F-1 or
Form F-3           under the 1933 Act, as determined in the sole discretion of the
Company, with           respect to the registration of the Shares (the “Registration
          Statement”) by no later than September 30, 2007 (the           “Submission
Date”); provided, that in the event the Company           files a registration
statement for its benefit and/or for the benefit of selling           shareholders, other
than a registration of securities in a Rule 145 transaction           or with respect to
an employee benefit plan, prior to such date (the           “Company Registration
Statement”), (i) the Company shall notify           Elbit a reasonable time in
advance of the planned filing date, and (ii) Elbit           shall be permitted to
include some or all of the Shares in such registration           statement, provided that
Elbit notifies the Company in writing in a timely           fashion, of its desire, and
number of Shares, to be included in such           registration statement.
Notwithstanding the foregoing, the Company shall use its           best efforts to file
the Registration Statement prior to the Submission Date,           provided that such
commitment shall not require the Company to file the           Registration Statement
prior to the filing of its Annual Report on Form 20-F for           the year ended
December 31, 2006, with the SEC. The Company shall provide Elbit           a reasonable
time to review and comment on the Registration Statement (and any           amendments or
supplements) before it is filed.  




        (b)
          The Company shall prepare and file with the SEC such amendments and supplements
          to the Registration Statement and the prospectus used in connection therewith
as           may be necessary to keep the Registration Statement effective until the
earlier           of (i) the date on which all of the Shares may immediately be resold
without           registration during any 90 day period by reason of Rule 144 under the
1933 Act           or any other rule of similar effect; or (ii) such time as all Shares
have been           sold.  














        (c)
          The Company shall furnish to Elbit such number of copies of prospectuses and
          such other documents as Elbit may reasonably request, in order to facilitate
the           public sale or other disposition of all or any of the Shares held by Elbit;  




        (d)
          The Company shall use reasonable efforts to cause the Registration Statement to
          become effective as soon as practicable after filing. The Company shall notify
          Elbit upon receipt of confirmation from the SEC that the Registration Statement
          has been declared effective.  




        (e)
          The Company shall notify Elbit, during the time when a prospectus relating to
          the Shares is required to be delivered under the 1933 Act, on a timely basis,
of           any event as a result of which the prospectus included in the Registration
          Statement contains an untrue statement of a material fact or omits any fact
          necessary to make the statements in the prospectus not misleading, in view of
          the circumstances in which they were made; and, at the request of Elbit,
prepare           a supplement or amendment to the prospectus so that, when delivered to
          purchasers of the Shares, the prospectus, as supplemented or amended, does not
          contain an untrue statement of a material fact or omit to state any fact
          necessary to make the statements in the prospectus not misleading, in view of
          the circumstances in which they were made, and notify Elbit on the day of the
          filing of such supplement or amendment.  




        (f)
          Once the Registration Statement has been declared effective by the SEC, the
          Company shall cause all the Shares to be quoted on the Over the Counter
Bulletin           Board or any other exchange on which the Company’s Ordinary
Shares are           listed as promptly as practicable.  




        (g)
          In the event of the issuance of any stop order suspending the effectiveness of
          the Registration Statement, or of any order suspending or preventing the use of
          any related prospectus or suspending the qualification of any securities
          included in the Registration Statement for sale in any jurisdiction, the
Company           shall notify Elbit on the day of such issuance, use reasonable efforts
to           promptly obtain the withdrawal of such order, and notify Elbit on the day of
          such withdrawal, if so ordered.  




        (h)
          The Company shall reasonably cooperate with Elbit in providing information
          reasonably required in connection with any filings to be made by Elbit in
          connection with sales under Rule 144.  




        (i)
          Notwithstanding anything to the contrary herein, it is hereby clarified, that
          Elbit shall not have the right to demand an underwritten offering.  




         2.       
          Expenses. The Company shall bear all expenses in connection with the
          registration procedures set forth in Section 1 and the registration of the
          Shares pursuant to the Registration Statement, other than fees and expenses, if
          any, of counsel or other advisers to Elbit or underwriting discounts, brokerage
          fees and commissions incurred by Elbit, if any. 














    3.        Indemnities.
In the event of any registered offering of Ordinary Shares           of the Company
pursuant to this Agreement:  



     (a)    
          The Company will indemnify and hold Elbit, its officers, directors and
          employees, harmless, to the fullest extent permitted by law, from and against
          any and all losses, damages, claims, liabilities, joint or several, costs and
          expenses (including any amounts paid in any settlement effected with the
          Company’s consent) to which Elbit may become subject under applicable law
          or otherwise, insofar as such losses, damages, claims, liabilities (or actions
          or proceedings in respect thereof), costs or expenses arise out of or are based
          upon (i) any untrue statement or alleged untrue statement of any material fact
          contained in the registration statement or included in the preliminary or final
          prospectus, as amended or supplemented, or (ii) the omission or alleged omission
          to state therein a material fact required to be stated therein or necessary to
          make the statements therein, in the light of the circumstances in which they are
          made, not misleading, and the Company will reimburse Elbit , promptly upon
          demand, for any reasonable legal or any other expenses incurred by them in
          connection with investigating, preparing to defend or defending against or
          appearing as a third-party witness in connection with such loss, claim, damage,
          liability, action or proceeding; provided, however, that the
          Company will not be liable in any such case to the extent that any such loss,
          damage, liability, cost or expense arises out of or is based upon an untrue
          statement or alleged untrue statement or omission or alleged omission so made in
          conformity with information furnished in writing by Elbit specifically for
          inclusion therein; provided, further, that the indemnity agreement
          contained in this subsection 3(a) shall not apply to amounts paid in
          settlement of any such claim, loss, damage, liability or action if such
          settlement is effected without the consent of the Company, which consent shall
          not be unreasonably withheld. 



     (b)    
          Elbit will indemnify and hold the Company, its officers, directors and
          employees, and any underwriters for the Company harmless from and against any
          and all losses, damages, claims, liabilities, costs or expenses (including any
          amounts paid in any settlement effected with the selling shareholder’s
          consent) to which the Company or any such underwriter may become subject under
          applicable law or otherwise, insofar as such losses, damages, claims,
          liabilities (or actions or proceedings in respect thereof), costs or expenses
          arise out of or are based on (i) any untrue or alleged untrue statement of
          any material fact contained in the registration statement or included in the
          preliminary or final prospectus, as amended or supplemented, or (ii) the
          omission or the alleged omission to state therein a material fact required to be
          stated therein or necessary to make the statements therein, in the light of the
          circumstances in which they were made, not misleading, and Elbit will reimburse
          the Company and any underwriter promptly upon demand, for any reasonable legal
          or other expenses incurred by them in connection with investigating, preparing
          to defend or defending against or appearing as a third-party witness in
          connection with such loss, claim, damage, liability, action or proceeding; in
          each case to the extent, but only to the extent, that such untrue statement or
          alleged untrue statement or omission or alleged omission was so made in strict
          conformity with written information furnished by Elbit specifically for
          inclusion therein. The foregoing indemnity agreement is subject to the condition
          that, insofar as it relates to any such untrue statement (or alleged untrue
          statement) or omission (or alleged omission) made in the preliminary prospectus
          but eliminated or remedied in the amended prospectus at the time the
          registration statement becomes effective or in the final prospectus, such
          indemnity agreement shall not inure to the benefit of (i) the Company and
          (ii) any underwriter, if a copy of the final prospectus was not furnished
          to the person or entity asserting the loss, liability, claim or damage at or
          prior to the time such furnishing is required by the 1933 Act; provided,
          further, that this indemnity shall not be deemed to relieve any
          underwriter of any of its due diligence obligations; provided,
          further, that the indemnity agreement contained in this
          subsection 3(b) shall not apply to amounts paid in settlement of any such
          claim, loss, damage, liability or action if such settlement is effected without
          the consent of Elbit, which consent shall not be unreasonably withheld. 














     (c)    
          Promptly after receipt by an indemnified party pursuant to the provisions of
          Sections 3(a) or 3(b) of notice of the commencement of any action involving the
          subject matter of the foregoing indemnity provisions, such indemnified party
          will, if a claim thereof is to be made against the indemnifying party pursuant
          to the provisions of said Section 3(a) or 3(b), promptly notify the indemnifying
          party of the commencement thereof; but the omission to notify the indemnifying
          party will not relieve it from any liability which it may have to any
          indemnified party otherwise than hereunder, except to the extent that the
          indemnifying party is prejudiced in its ability to defend such action. In case
          such action is brought against any indemnified party and it notifies the
          indemnifying party of the commencement thereof, the indemnifying party shall
          have the right to participate in, and, to the extent that it may wish, jointly
          with any other indemnifying party similarly notified, to assume the defense
          thereof with counsel reasonably satisfactory to such indemnified party;
          provided, however, that if the defendants in any action include
          both the indemnified party and the indemnifying party and there is a conflict of
          interests which would prevent counsel for the indemnifying party from also
          representing the indemnified party, the indemnified party or parties shall have
          the right to select one separate counsel to participate in the defense of such
          action on behalf of such indemnified party or parties. After notice from the
          indemnifying party to such indemnified party of its election so to assume the
          defense thereof, the indemnifying party will not be liable to such indemnified
          party pursuant to the provisions of said Sections 3(a) or 3(b) for any legal or
          other expense subsequently incurred by such indemnified party in connection with
          the defense thereof, unless (i) the indemnified party shall have employed
          counsel in accordance with the provision of the preceding sentence, (ii) the
          indemnifying party shall not have employed counsel reasonably satisfactory to
          the indemnified party to represent the indemnified party within a reasonable
          time after the notice of the commencement of the action and within fifteen (15)
          days after written notice of the indemnified party’s intention to employ
          separate counsel pursuant to the previous sentence, or (iii) the indemnifying
          party has authorized the employment of counsel for the indemnified party at the
          expense of the indemnifying party. No indemnifying party will consent to entry
          of any judgment or enter into any settlement which does not include as an
          unconditional term thereof the giving by the claimant or plaintiff to such
          indemnified party of a release from all liability in respect to such claim or
          litigation. The indemnification provisions under this Section 3 will remain in
          full force and effect regardless of any investigation by the indemnified
          party(ies). 



     4.        Miscellaneous.  



     4.1        Governing
Law. This Agreement 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 Agreement consents to the exclusive
jurisdiction and venue of the courts of District of Tel Aviv-Jaffa in the State of
Israel.  














     4.2        Successors
and Assigns. The provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assignees, heirs, executors and administrators of the parties
hereto.  



     4.3        Entire
Agreement; No Rights in Favor of Third Party; Amendments. This Agreement constitutes
the full and entire understanding and agreement between the parties with regard to the
subject matters hereof and thereof shall supersede all prior agreements and
understandings relating thereto. This Agreement shall not be construed as conferring any
rights to any person not a party hereto. Neither this Agreement nor any term hereof may
be amended, waived, discharged or terminated except by an instrument in writing signed by
the parties hereto.  



     4.4        Notices.
All notices and other communications required or permitted to be given or sent hereunder
shall be in writing and shall be deemed to have been sufficiently given or delivered for
all purposes if mailed by registered mail, sent by fax or delivered by hand to the
following respective addresses until otherwise directed by notice as aforesaid:  



			
			
			
			
			
	 	To Elbit:	Elbit Ltd.
	 	 	3 Azrieli Center, 42nd Floor,
	 	 	Triangle Building, Tel Aviv
	 	 	Tel: 03-607 5555
	 	 	Fax: 03 - 607 5556
	 	 	Att: General Counsel
	 	 
	 	To the Company:	Elbit Vision Systems Ltd.
	 	 	New Industrial Park
	 	 	P.O.B. 140
	 	 	Yoqneam 20692, Israel
	 	 	Fax: 04 - 989-4733
	 	 	Attention: Chief Executive Officer
	 	 
	 	With a copy to:	Yigal Arnon & Co.
	 	 	One Azrieli Center (Round Tower)
	 	 	46th Floor
	 	 	Tel Aviv 67021, Israel
	 	 	Fax: 03 - 608-7714
	 	 	Att: Adrian Daniels






provided, however, that notice of
change of address shall be effective only upon actual receipt. 



        All
notices sent by registered mail shall be deemed to have been received: (i) within three
(3) business days following the date on which it was deposited postage prepaid in the
mail; (ii) within one (1) business day after it was transmitted by fax and confirmation of
receipt has been obtained; and (iii) if delivered by hand shall be deemed to have been
received at the time of actual receipt. 



     4.5        Delays
or Omissions. No delay or omission to exercise any right, power or remedy, upon any
breach or default under this Agreement, shall impair any such right, power or remedy of
such holder nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of any similar breach or default thereafter occurring.  














     4.6        Waiver
of Default. No waiver with respect to any breach or default in the performance of any
obligation under the terms of this Agreement shall be deemed to be a waiver with respect
to any subsequent breach or default, whether of similar or different nature. Any waiver,
permit, consent or approval of any kind or character on the part of any holder of any
breach or default under this Agreement, or any waiver on the part of any holder of any
provisions or conditions of this Agreement shall be effective only if made in writing and
only to the extent specifically set forth in such writing. All remedies, either under
this Agreement or by virtue of law or otherwise afforded to any holder, shall be
cumulative and not alternative.  



     4.7        Rights;
Severability. In case any provision of the Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby. The parties hereto shall be obliged
to draw up an arrangement in accordance with the meaning and the object of the invalid
provision.  



     4.8        Titles
and Subtitles. The titles of the sections and subsections of this Agreement are for
convenience of reference only and are not to be considered in construing this Agreement.  



     5.        Corporate
Approval. Notwithstanding anything to the contrary herein, this           Agreement
is contingent upon approval of this Agreement by the shareholders of           the
Company. The Company will recommend that its shareholders approve the terms           of
the Agreement at the next meeting of its shareholders, which will take place           no
later than December 31, 2006.  



IN WITNESS WHEREOF, the
parties hereto have executed this Registration Rights Agreement in one or more
counterparts, as of the date first above-mentioned. 



	
——————————————

Elbit Ltd.

By:____________________
Title: __________________	
——————————————

Elbit Vision Systems Ltd.

By:____________________
Title: __________________