Document:

exhibit101.htm

    FOREBEARANCE
      AND MODIFICATION AGREEMENT

    

             This
      Forbearance and Modification Agreement (this "Agreement") by and between Invisa,
      Inc., a Nevada corporation, having a business at 6935 15th  Street,
      Suite 120, Sarasota, Florida, 34243 (the “Borrower”), and Centurian Investors,
      Inc., a Delaware corporation, having an address at 290 Cocoanut Avenue, Suite
      1A, Sarasota, Florida 34236 (the “Lender”) is entered into as if this 27th day
      of July, 2007 and shall be effective as of the date herof (the “Effective
      Date”).

    

    RECITALS:

    

    WHEREAS,
      Lender and Borrower are
      parties to a certain Promissory Note, dated February 28, 2007, in the principal
      amount of up to One Hundred Fifty Thousand ($150,000.00) (the “First Note”) and
      that certain Promissory Note, dated July 25, 2007 in the principal amount of
      Fifty Thousand ($50.000) dollars (the “Second Note”; the First Note and Second
      Note being hereinafter collectively referred to as the “Notes”);
      and

    

    WHEREAS,
      the Notes are secured by (a)
      an aggregate of Twenty Six Million Six Hundred Sixty Six (26,666,666) shares
      of
      common stock of Borrower and (b) a first priority lien on all of the assets
      of
      Borrower as more specifically described in the Notes and that certain General
      Security Agreement, dated February 28, 2007 (the “Security Agreement” the Notes
      and the Security Agreement, together with all documents executed in connection
      therewith being hereinafter referred to collectively as the “Loan Documents”);
      and

    

    WHEREAS,
      Borrower hereby requests
      Lender’s forbearance with respect to certain provisions of the Notes;
      and

    

    WHEREAS,
      Borrower and Lender desire
      to modify certain of the provisions of the Notes as more specifically set forth
      herein.

    

    NOW
      THEREFORE, for good and valuable
      consideration, the receipt and sufficiency of which is hereby acknowledged,
      the
      parties hereto agree as follows:

    

    1.              Terms
      used herein which are defined in the Loan Documents shall have the same meanings
      when used herein unless otherwise provided herein.

    

    2.              Without
      in any way waiving any existing Event of Default and at the request of the
      Borrower, Lender hereby agrees forbear from exercising any remedy available
      to
      Lender upon the occurrence of an Event of Default under paragraph 13(a)(i)
      of
      each of the Notes from the Effective Date hereof and until the earlier of
      October 15, 2007 or an Acceleration under any provision other than paragraph
      13(a)(i) under such Notes (the “Forbearance Period”).

    

    3.              The
      interest rate payable during the Forbearance Period shall be the Interest
      Rate.

    

    4.              Borrower
      understands and agrees that the remaining provisions of the Notes shall remain
      in full force and effect without any changes or modification except as expressly
      stated herein; including, without limitation, the cure periods set forth in
      paragraph 13(b) of the Notes.   Borrower further agrees that in
      the event that all principal and interest payments due and owing to Lender
      under
      the Notes are not paid in full on or before the Maturity Date, then, for
      purposes of paragraph 13(b) of the Notes, an Acceleration event shall be deemed
      to have occurred on the Maturity Date.  Borrower hereby waives any
      requirement by Lender to deliver to Borrower a Default Notice under paragraph
      13(b) of the Notes and agrees that the Maturity Date shall be deemed the date
      of
      the Default Notice for purposes of calculating the cure and other time periods
      set forth in paragraph 13(b) of the Notes.

    

    5.              The
      provisions set forth herein are limited precisely as written and shall not
      be
      deemed to (a) be a consent to, or waiver or modification of, any other term
      or
      condition of the Loan Documents, or (b) except as expressly set forth herein,
      prejudice any right or rights which the Lender may now have or may have in
      the
      future under or in connection with the Loan Documents or any of the other
      documents referred to therein. Except as expressly modified hereby or by express
      written amendments thereof, the terms and provisions of the Loan Documents
      or
      any other documents or instruments executed in connection with any of the
      foregoing are and shall remain in full force and effect. In the event of a
      conflict between this Agreement and any of the foregoing documents, the terms
      of
      this Agreement shall be controlling. The representations and warranties made
      in
      each Loan Document are true and correct in all material respects on and as
      of
      the date of this Agreement.

    

    6.              To
      induce the Lender to execute and deliver this Agreement (which representations
      shall survive the execution and delivery of this Agreement), Borrower represents
      and warrants to the Lender that:

    

                      (a)
      this Agreement has been duly authorized, executed and delivered by it and
      constitutes the legal, valid and binding obligation, contract and agreement
      of
      the Borrower enforceable against it in accordance with its terms, except as
      enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
      or similar laws or equitable principles relating to or limiting creditors'
      rights generally; and

    

                      (b)
      the execution, delivery and performance by the Borrower of this Agreement (i)
      has been duly authorized by all requisite corporate action, (ii) does not
      require the consent or approval of any governmental or regulatory body, agency,
      or other party and (iii) will not (A) violate (1) any provision of law, statute,
      rule or regulation or its certificate of incorporation or bylaws, (2) any order
      of any court or any rule, regulation or order of any other agency or government
      binding upon it, or (3) any provision of any material indenture, agreement
      or
      other instrument to which it is a party or by which its properties or assets
      are
      or may be bound.

    

    7.              As
      a condition to and as consideration for the agreements of Lender set forth
      herein, Borrower shall:

    

                      (a)
      pay to Lender  all  accrued but unpaid interest on the
      Notes.;

    

                     
      (b) prepay any and all remaining interest on the Notes from the date
      hereof  through October 15, 2007.

    

                      (c)
      pay to Lender a forbearance fee in the amount Two Thousand ($2,000.00) dollars
      which is equal to 1% of the aggregate principal amount of the
      Notes.

    

                    
      (d) Borrower shall pay all costs and expenses of Lender in connection with
      this
      Agreement, including, without limitation, reasonable attorneys fees of
      Lender.

    .

    

    8.              None
      of the provisions of this Agreement shall inure to the benefit of Borrower
      or
      any person other than Lender. Consequently, Borrower shall not be, and no person
      other than the Lender shall be, entitled to rely upon or raise a claim or
      defense, in any manner whatsoever, the failure of Lender to comply with the
      provisions of this Agreement.  Lender shall

    not
      incur
      any liability to Borrower or any other person for any act or
      omission  whatsoever.

    

    9.              This
      Agreement and the rights and obligations of the parties hereunder and under
      the
      Forbearance Agreement shall be construed in accordance with and be governed
      by
      the laws of the State of Florida.

    

    10.              This
      Agreement and the documents referred to herein represent the entire
      understanding of the parties hereto regarding the subject matter hereof and
      supersede all prior and contemporaneous oral and written agreements of the
      parties hereto with respect to the subject matter hereof.

    

    11.              This
      Agreement may be executed in any number of counterparts and by different parties
      on separate counterparts and all of such counterparts shall together constitute
      one and the same instrument. Complete sets of counterparts shall be lodged
      with
      the Borrower and the Lender.

    

    IN
      WITNESS WHEREOF,  this
      Agreement is executed as of the date first written above and shall be effective
      as of the Effective Date.

    

    

    

    INVISA,
      INC.                                                                                               CENTURIAN
      INVESTORS, INC.

    

    

    

    /s/
      Invisa
      Inc.______________________                                                               /s/ Centurian
      Investors, Inc.____

    Name:  Edmund
      C.
      King                                                                                               
  Name: AnnMarie
      Curd

    Title:
      Chief Financial
      Officer                                                                                          Title:
      AttorneyF-1

Exhibit 4.3  

AGREEMENT 

THIS AGREEMENT (the
“Agreement”), dated as of June 21, 2007, is made by and between Elbit
Vision Systems Ltd., (the “Company”), and M.S.N.D. Real Estate Holdings
Ltd., (“Mivtach”), each company organized under the laws of Israel. 

Whereas EVS and Mivtach-Shamir
Holdings Ltd. (“MS”) entered into a certain Agreement of January 2, 2006
(the “First Agreement”), pursuant to which (i) EVS issued to
Mivtach a Promissory Note Agreement (“Convertible Note”) and a certain
Warrant to Purchase Ordinary Shares (“Warrant”), each dated February 21,
2006, (ii) the parties entered a Registration Rights Agreement (the “Registration
Rights Agreement”), and a Letter of Agreement (the “Letter
Agreement”), each dated February 21, 2006; 

Whereas pursuant with an
Appendix to Agreement dated February 21, 2006, MS assigned and conveyed its rights and
obligations under the First agreement to Mivtach; 

Whereas, EVS and MS entered
into a Letter of Amendment dated May 29, 2006 (the “Amendment
Agreement”), pursuant to which certain amendments were made to the First
Agreement; 

Whereas the Convertible Note
was issued for the sum of three million US dollars (US$3,000,000); 

Whereas Mivtach loaned the sum
of one million and five hundred thousand US dollars (US$1,500,000) under the Note (the
“Sum”) and placed a sum of one million and five hundred thousand US
dollars (US$1,500,000) in escrow pursuant with section 8A of the First Agreement (the
“Escrow Sum”) (the Sum together with the escrow Sum, the
“Principal Amount”); 

Whereas Mivtach wishes to
convert the Principal Amount into nine million five hundred twenty three thousand eight
hundred and ten (9,523,810) ordinary shares of the Company, par value NIS 1.0 (the
“Ordinary Shares”) under the Convertible Note; 

Whereas, the Company desires
to grant to Mivtach and Mivtach desires to receive from the Company, in addition to the
warrant received under the First Agreement (the “Original Warrant”), a
warrant to purchase Ordinary Shares of the Company pursuant to the terms of this Agreement
(the “2007 Warrant”); 

Whereas EVS and Mivtach
mutually wish to amend the terms of each of the First Agreement and the Convertible Note
upon the terms more particularly set forth in this Agreement; 

1

	 	
Now
therefore the parties have agreed as follows:  

	1.  	The
terms defined in this Agreement will have the same meaning in the First
          Agreement, unless expressly stated otherwise. 

	2.  	Sections
4, 5, 7, 8, 9, 11 and 12 of this Agreement will be considered to have           entered
into force at the Closing (as defined herein). 

	3.  	At
the Closing as defined herein and subject to fulfillment of all conditions to
          Closing as set forth in this Agreement Mivtach shall convert the Principal
          Amount into Ordinary Shares of the Company pursuant with the terms of the First
          Agreement and of the Convertible Note, both as amended by this Agreement. 

	4.  	Section
4.1.3 of the First Agreement is hereby amended by its entire deletion           and
replacement with the following: 

“4.1.3 The Principal Amount
shall bear interest at the rate of LIBOR plus two percent (2%) per annum, compounded
quarterly (“Interest” and together with the Principal Amount, the “Loan
Amount”). Interest shall commence accruing with respect to any part of the
Principal Amount, on the day that such part of the Principal Amount was received by the
Company.” 

	5.  	Section
4.4.1 of the First Agreement is hereby amended by its entire deletion           and
replacement with the following: 

“The entire Principal Amount,
but not the Interest, shall be convertible into nine million five hundred twenty three
thousand eight hundred and ten (9,523,810) (subject to adjustment, as provided in Section
4.6 below) (the “Exercise Note Shares”), by no later than August 1, 2007
(the “Conversion Period”), all as further set forth in the
Convertible Note. The Principal Amount may not be converted in part. In no event shall
the Principal Amount be automatically converted into ordinary shares.” 

	6.  	Notwithstanding
the provisions of Section 8A of the First Agreement and the           provisions of the
Amendment Agreement, at the Closing, the Escrow Sum, in its           entirety, shall be
converted as part of the Principal Amount. 

	7.  	Section
4.1 of the Convertible Note is hereby amended by its entire deletion and
          replacement with the following: 

“4.1 The entire Principal
Amount, but not the Interest, shall be convertible into nine million five hundred twenty
three thousand eight hundred and ten (9,523,810) Ordinary Shares at conversion price of
$0.315 per share (subject to adjustment, as provided in Section 6 below) (the “Exercise
Note Shares”), by no later than August 1, 2007 (the “Conversion
Period”), by delivery to the Company of a written notice of conversion in the
form of Schedule 3.1 attached hereto (the “Conversion Notice”).” 

	8.  	Schedule
3.1 of the Convertible Note is hereby amended by its entire deletion           and
replacement with the following: 

2

“CONVERSION NOTICE  

	 	
(To
be executed by Mivtach in order to convert all the Principal Amount into Ordinary Shares)  

	 	
The
Undersigned hereby converts the Principal Amount under the Convertible Promissory Note
dated February 21, 2006 into nine million five hundred twenty three thousand eight
hundred and ten (9,523,810) Ordinary Shares of Elbit Vision Systems Ltd.  

	 	 Date: _________   		M.S.N.D. REAL ESTATEHOLDINGS, LTD.

By: ______________________________
Name: ____________________________

Title: _____________________________"

	9.  	Notwithstanding
anything which is stipulated in the original Warrant, Mivtach
                    undertakes not to exercise more than 1,000,000 Ordinary Shares under
the                     original Warrant. 

	10.  	At
the Closing as defined herein and subject to fulfillment of all conditions to
                    Closing as set forth in this Agreement, the Company shall issue and
grant to                     Mivtach a warrant for the purchase from the Company of up to
2,380,952 Ordinary                     Shares (subject to adjustments, as provided in
Section 5.6 below), at an                     exercise price per share of forty-five
cents ($0.45) per Ordinary Share, in the                     agreed form attached as Annex
A hereto. 

	11.  	The
Letter Agreement and Amendment Agreement are hereby terminated and of no
                    further force or effect. 

	12.  	Except
as set forth herein, the provisions of the First Agreement and the
                    Convertible Note shall remain unchanged and in full force and effect. 

	13  	Mivtach
agrees that at the Closing (as defined herein), it shall: 

        13.1
transfer the Escrow Sum (one million five hundred  thousand U.S.  Dollars  ($1,500,000))
to the Company; 

        13.2
convert the Principle Amount into nine million five hundred twenty three thousand eight
hundred and ten (9,523,810) Ordinary Shares at conversion price of $0.315 per share; and 

        13.3
deliver to the Company a duly executed letter to the Company’s registrar requesting
the removal of the charge created pursuant to Section 4.1 of the First Agreement. 

3

	14.  	At
the Closing the Company shall deliver to Mivtach (i) a share certificate for
                    Ordinary Shares in its name and (ii) the 2007 Warrant and (iii) a
registration                     rights agreement duly executed by the Company in the
form attached herein as Annex “B”. 

	15.  	The
performance and consummation of all the transactions contemplated by this
                    Agreement, including the issuance and grant of the Ordinary Shares
and Warrant                     shall take place at the offices of Yigal Arnon & Co.,
1 Azrieli Center,                     Tel-Aviv, Israel, at such date and time as Mivtach
and the Company shall agree                     but in no event later than the tenth day
following approval of this Agreement by                     the shareholders of the
Company (the “Closing”). 

	16.  	This
Agreement shall be governed and construed according to the laws of the
                    State of Israel. Any dispute arising under or in relation to this
Agreement                     shall be resolved in the competent court for Tel Aviv-Jaffa
district, and each                     of the parties hereby submits irrevocably to the
jurisdiction of such court. 

IN WITNESS WHEREOF the parties have
signed this Amendment as of the date first hereinabove set forth. 

	 	ELBIT VISION SYSTEMS LTD.

By: _________________

Name: _______________

 Title: ________________

Date: ________________	M.S.N.D. REAL ESTATEHOLDINGS LTD.

By: _________________

Name: _______________

 Title: ________________

Date: ________________

4

Annex A 

5

FORM OF WARRANT 

NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES
ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. 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. 

ELBIT VISION SYSTEMS LTD. 

WARRANT TO PURCHASE
ORDINARY SHARES 

Warrant No.: _____

Number of Shares 2,380,952

Date of Issuance: ______, 2007 ("ISSUANCE DATE")

Elbit Vision Systems Ltd., a company
organized under the laws of the State of Israel (the “COMPANY”), hereby
certifies that, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, _________________________., the registered holder hereof or its
permitted assigns (the “HOLDER”), is entitled, subject to the terms set forth
below, to purchase from the Company, at the Exercise Price (as defined below) then in
effect, upon surrender of this Warrant to purchase Ordinary Shares (including all Warrants
to purchase Ordinary Shares issued in exchange, transfer or replacement hereof, the
“WARRANT”), at any time or times on or after the date hereof, but not after
11:59 P.M., Israel Time, on the Expiration Date (as defined below), 2,380,952 fully paid
and nonassessable Ordinary Shares (as defined below) (the “WARRANT SHARES”).
Except as otherwise defined herein, capitalized terms in this Warrant shall have the
meanings set forth in Section 12. This Warrant is one of the Warrants to purchase Ordinary
Shares (the “SPA WARRANTS”) issued pursuant to Section 2.1.2 of that certain
Agreement, dated as of January 2, 2006 (the “INITIAL ISSUANCE DATE”), among the
Company and the Holder (the “PURCHASERS”) referred to therein (the
“AGREEMENT”). 

6

        1.
          EXERCISE OF WARRANT.  

        a.
          Subject to the terms and conditions hereof, this Warrant may be exercised by
the           Holder on any day, in whole or in part, by (i) delivery of a written
notice, in           the form attached hereto as EXHIBIT A (the “EXERCISE NOTICE”),
of the           Holder’s election to exercise this Warrant (ii) unless the Holder
is           electing a “cashless” exercise, payment to the Company of an
amount           equal to the applicable Exercise Price multiplied by the number of
Warrant           Shares as to which this Warrant is being exercised (the “AGGREGATE
EXERCISE           PRICE”) in cash or wire transfer of immediately available funds,
which may           be paid, at the sole discretion of the Holder, in U.S. Dollars or in
New Israeli           Shekels, at the representative exchange rate in effect on that day,
and (iii)           the delivery to the Company of this Warrant. Execution and delivery
of the           Exercise Notice with respect to less than all of the Warrant Shares
shall have           the same effect as cancellation of the original Warrant and issuance
of a new           Warrant evidencing the right to purchase the remaining number of
Warrant Shares.           On or before the first Business Day following the date on which
the Company has           received each of the Exercise Notice, this Warrant and the
Aggregate Exercise           Price (the “EXERCISE DELIVERY DOCUMENTS”), the
Company shall transmit           by facsimile an acknowledgment of confirmation of
receipt of the Exercise           Delivery Documents to the Holder and the Company’s
transfer agent (the           “TRANSFER AGENT”). On or before the third
Business Day following the           date on which the Company has received all of the
Exercise Delivery Documents           (the “SHARE DELIVERY DATE”), the Company
shall (X) provided that the           Transfer Agent is participating in The Depository
Trust Company           (“DTC”) Fast Automated Securities Transfer Program,
upon the request           of the Holder, credit such aggregate number of Ordinary Shares
to which the           Holder is entitled pursuant to such exercise to the Holder’s
or its           designee’s balance account with DTC through its Deposit Withdrawal
Agent           Commission system, or (Y) if the Transfer Agent is not participating in
the DTC           Fast Automated Securities Transfer Program, issue and dispatch by
overnight           courier to the address as specified in the Exercise Notice, a
certificate,           registered in the name of the Holder or its designee, for the
number of Ordinary           Shares to which the Holder is entitled pursuant to such
exercise. Upon delivery           of the Exercise Delivery Documents, the Holder shall be
deemed for all corporate           purposes to have become the holder of record of the
Warrant Shares with respect           to which this Warrant has been exercised,
irrespective of the date of delivery           of the certificates evidencing such
Warrant Shares. If this Warrant is submitted           in connection with any exercise
pursuant to this Section 1(a) and the number of           Warrant Shares represented by
this Warrant submitted for exercise is greater           than the number of Warrant
Shares being acquired upon an exercise, then the           Company shall as soon as
practicable and in no event later than five Business           Days after any exercise
and at its own expense, issue a new Warrant (in           accordance with Section 6(d))
representing the right to purchase the number of           Warrant Shares purchasable
immediately prior to such exercise under this           Warrant, less the number of
Warrant Shares with respect to which this Warrant is           exercised. No fractional
Ordinary Shares are to be issued upon the exercise of           this Warrant, but rather
the number of Ordinary Shares to be issued shall be           rounded up or down to the
nearest whole number. The Company shall pay any and           all taxes which may be
payable with respect to the issuance and delivery of           Warrant Shares upon
exercise of this Warrant.  

        b.
          EXERCISE PRICE. For purposes of this Warrant, “EXERCISE PRICE” means
          $0.45, U.S Dollars, subject to adjustment as provided herein.  

7

        c.
          CASHLESS EXERCISE. The Holder may notify the Company in an Exercise Notice
          of its election to utilize cashless exercise, in which event the Company shall
          issue to the Holder the number of Warrant Shares determined as follows:  

	 	
X
= Y [(A-B)/A]

	 	
where: 

	 	
X
= the number of Warrant Shares to be issued to the Holder.

	 	
Y
= the number of Warrant  Shares with respect to which this Warrant
                                    is being exercised.

	 	
A
= the average of the  closing  prices for the three  Trading  Days
                                    immediately prior to (but not including) the Exercise
Date.

	 	
B
= the Exercise Price.

        For
purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and
acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be
deemed to have been acquired by the Holder, and the holding period for the Warrant Shares
shall be deemed to have commenced, on the date this Warrant was originally issued. 

        “TRADING
DAY” means (i) a day on which the Ordinary Shares are traded on a Trading
Market (other than the OTC Bulletin Board), or (ii) if the Ordinary Shares are not listed
on a Trading Market (other than the OTC Bulletin Board), a day on which the Ordinary
Shares are traded in the over-the-counter market, as reported by the OTC Bulletin Board,
or (iii) if the Ordinary Shares are not quoted on any Trading Market, a day on which the
Ordinary Shares are quoted in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency succeeding to its
functions of reporting prices); provided, that in the event that the Ordinary Shares are
not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall
mean a Business Day. 

        2.
          ADJUSTMENT OF EXERCISE PRICE. If the Company at any time after the date of
          issuance of this Warrant subdivides (by any stock split, stock dividend,
          recapitalization or otherwise) one or more classes of its outstanding share
          capital into a greater number of shares, the Exercise Price in effect
          immediately prior to such subdivision will be proportionately reduced and the
          number of Warrant Shares will be proportionately increased. If the Company at
          any time after the date of issuance of this Warrant combines (by combination,
          reverse stock split or otherwise) one or more classes of its outstanding share
          capital into a smaller number of shares, the Exercise Price in effect
          immediately prior to such combination will be proportionately increased and the
          number of Warrant Shares will be proportionately decreased. Any adjustment
under           this Section 2 shall become effective at the close of business on the
date the           subdivision or combination becomes effective.  

8

        3.
          RIGHTS UPON CONSOLIDATION OR MERGER. In case of any consolidation or merger to
          which the Company shall be a party, other than a consolidation or merger in
          which the Company shall be the surviving or continuing corporation, or in case
          of any sale or conveyance to another entity of all or substantially all of the
          property of the Company, or in the case of any statutory exchange of securities
          with another entity (including any exchange effected in connection with a
merger           of any other corporation with the Company), the Holder shall have the
right           thereafter to convert this Warrant into the kind and amount of
securities, cash           or other property which it would have owned or have been
entitled to receive           immediately after such consolidation, merger, statutory
exchange, sale or           conveyance had this Warrant been exercised immediately prior
to the effective           date of such transaction and, if necessary, appropriate
adjustment shall be made           in the application of the provisions set forth in
Section 2 with respect to the           rights and interests thereafter of the Holder to
the end that the provisions set           forth in Section 2 shall thereafter
correspondingly be made applicable, as           nearly as may reasonably be, in relation
to any shares of stock or other           securities or property thereafter deliverable
upon the exercise of this Warrant.  

        4.
          NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will
          not, by amendment of its Articles of Association or through any reorganization,
          transfer of assets, consolidation, merger, dissolution, issue or sale of
          securities, or any other voluntary action, avoid or seek to avoid the
observance           or performance of any of the terms of this Warrant, and will at all
times in           good faith carry out all the provisions of this Warrant and take all
action as           may be required to protect the rights of the holder of this Warrant.
Without           limiting the generality of the foregoing, the Company (i) will not
increase the           par value of any Ordinary Shares receivable upon the exercise of
this Warrant           above the Exercise Price then in effect, (ii) will take all such
actions as may           be necessary or appropriate in order that the Company may
validly and legally           issue fully paid and nonassessable Ordinary Shares upon the
exercise of this           Warrant, and (iii) will, so long as any of the SPA Warrants
are outstanding,           take all action necessary to reserve and keep available out of
its authorized           and unissued Ordinary Shares, solely for the purpose of
effecting the exercise           of the SPA Warrants, 100% of the number of Ordinary
Shares as shall from time to           time be necessary to effect the exercise of the
SPA Warrants then outstanding.  

        5.
          WARRANT HOLDER NOT DEEMED A SHAREHOLDER. Except as otherwise specifically
          provided herein, no holder, solely in such Person’s capacity as a holder,
          of this Warrant shall be entitled to vote or receive dividends or be deemed the
          holder of shares of the Company for any purpose, nor shall anything contained
in           this Warrant be construed to confer upon the holder hereof, solely in such
          Person’s capacity as a holder of this Warrant, any of the rights of a
          shareholder of the Company or any right to vote, give or withhold consent to
any           corporate action (whether any reorganization, issue of stock,
reclassification           of share capital, consolidation, merger, conveyance or
otherwise), receive           notice of meetings, receive dividends or subscription
rights, or otherwise,           prior to the issuance to the holder of this Warrant of
the Warrant Shares which           such Person is then entitled to receive upon the due
exercise of this Warrant.           In addition, nothing contained in this Warrant shall
be construed as imposing           any liabilities on such holder to purchase any
securities (upon exercise of this           Warrant or otherwise) or as a shareholder of
the Company, whether such           liabilities are asserted by the Company or by
creditors of the Company.  

9

        6.
          REISSUANCE OF WARRANTS.  

        a.
          TRANSFER OF WARRANT. If this Warrant is to be transferred, the holder shall
          surrender this Warrant to the Company, whereupon the Company will forthwith
          issue and deliver upon the order of the holder of this Warrant a new Warrant
(in           accordance with Section 6(d)), registered as the holder of this Warrant may
          request, representing the right to purchase the number of Warrant Shares being
          transferred by the Holder and, if less then the total number of Warrant Shares
          then underlying this Warrant is being transferred, a new Warrant (in accordance
          with Section 6(d)) to the holder of this Warrant representing the right to
          purchase the number of Warrant Shares not being transferred.  

        b.
          LOST, STOLEN OR MUTILATED WARRANT. Upon receipt by the Company of evidence
          reasonably satisfactory to the Company of the loss, theft, destruction or
          mutilation of this Warrant, and, in the case of loss, theft or destruction, of
          any indemnification undertaking by the holder of this Warrant to the Company in
          customary form and, in the case of mutilation, upon surrender and cancellation
          of this Warrant, the Company shall execute and deliver to the Holder a new
          Warrant (in accordance with Section 6(d)) representing the right to purchase
the           Warrant Shares then underlying this Warrant.  

        c.
          WARRANT EXCHANGEABLE FOR MULTIPLE WARRANTS. This Warrant is exchangeable, upon
          the surrender hereof by the holder of this Warrant at the principal office of
          the Company, for a new Warrant or Warrants (in accordance with Section 6(d))
          representing in the aggregate the right to purchase the number of Warrant
Shares           then underlying this Warrant, and each such new Warrant will represent
the right           to purchase such portion of such Warrant Shares as is designated by
the holder           of this Warrant at the time of such surrender; provided, however,
that no           Warrants for fractional Ordinary Shares shall be given.  

        d.
          ISSUANCE OF NEW WARRANTS. Whenever the Company is required to issue a new
          Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of
          like tenor with this Warrant, (ii) shall represent, as indicated on the face of
          such new Warrant, the right to purchase the Warrant Shares then underlying this
          Warrant (or in the case of a new Warrant being issued pursuant to Section 6(a)
          or Section 6(c), the Warrant Shares designated by the holder of this Warrant
          which, when added to the number of Ordinary Shares underlying the other new
          Warrants issued in connection with such issuance, does not exceed the number of
          Warrant Shares then underlying this Warrant), (iii) shall have an issuance
date,           as indicated on the face of such new Warrant, which is the same as the
Issuance           Date, and (iv) shall have the same rights and conditions as this
Warrant.  

10

        7.
          NOTICES. Whenever notice is required to be given under this Warrant, unless
          otherwise provided herein, such notice shall be given in accordance with
Section           10.4 of the Agreement. The Company shall provide the holder of this
Warrant with           prompt written notice of all actions taken pursuant to this
Warrant, including           in reasonable detail a description of such action and the
reason therefor.           Without limiting the generality of the foregoing, the Company
will give written           notice to the holder of this Warrant (i) promptly upon any
adjustment of the           Exercise Price, setting forth in reasonable detail, and
certifying, the           calculation of such adjustment and (ii) at least fifteen days
prior to the date           on which the Company takes a record (A) with respect to any
dividend or           distribution upon the Ordinary Shares, or (B) with respect to any
consolidation           or merger provided in each case that such information shall be
made known to the           public prior to or in conjunction with such notice being
provided to such           holder.  

        8.
          AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of
          this Warrant may be amended and the Company may take any action herein
          prohibited, or omit to perform any act herein required to be performed by it,
          only if the Company has obtained the written consent of the holders of SPA
          Warrants representing at least a majority of the Ordinary Shares obtainable
upon           exercise of the SPA Warrants then outstanding; provided that no such
action may           increase the initial exercise price of any SPA Warrant or decrease
the initial           number of shares or class of stock obtainable upon exercise of any
SPA Warrant           without the written consent of the holder of this Warrant. No such
amendment           shall be effective to the extent that it applies to less than all of
the holders           of the SPA Warrants then outstanding.  

        9.
          GOVERNING LAW. This Warrant 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. 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.  

        10.
          CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by
          the Company and all the Purchasers and shall not be construed against any
person           as the drafter hereof. The headings of this Warrant are for convenience
of           reference and shall not form part of, or affect the interpretation of, this
          Warrant.  

        11.
          REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies
          provided in this Warrant shall be cumulative and in addition to all other
          remedies available under this Warrant, the Agreement, the Securities and the
          Registration Rights Agreement, at law or in equity (including a decree of
          specific performance and/or other injunctive relief), and nothing herein shall
          limit the right of the holder of this Warrant right to pursue actual damages
for           any failure by the Company to comply with the terms of this Warrant. The
Company           acknowledges that a breach by it of its obligations hereunder will
cause           irreparable harm to the holder of this Warrant and that the remedy at law
for           any such breach may be inadequate. The Company therefore agrees that, in
the           event of any such breach or threatened breach, the holder of this Warrant
shall           be entitled, in addition to all other available remedies, to an
injunction           restraining any breach, without the necessity of showing economic
loss and           without any bond or other security being required.  

11

        12.
          TRANSFER. Subject to compliance with any applicable securities laws, this
          Warrant may be offered for sale, sold, transferred or assigned without the
          consent of the Company.  

        12.
          CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall
          have the following meanings:  

        “BUSINESS
DAY” means any day other than Saturday, Sunday or other day on which commercial banks
in the City of New York are authorized or required by law to remain closed. 

        “Ordinary
Shares” means (i) the Company’s Ordinary Shares, par value NIS 1.0 per share. 

        “EXPIRATION
DATE” means forty-eight (48) months after the Grant Date of this Warrant pursuant to
which this Warrant was initially issued; provided, however, that if such date falls on a
day other than a Business Day or on which trading does not take place on the Principal
Market (a “Holiday”), the next date that is not a Holiday. 

        “GRANT
DATE” _________, 2007 

        “OPTIONS”
means any rights, warrants or options to subscribe for or purchase Ordinary Shares. 

        “PERSON”
means an individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other entity and a government or
any department or agency thereof. 

        “PRINCIPAL
MARKET” means NASD Over-the-Counter Bulletin Board or in the event that the Company
is no longer listed with NASD Over-the-Counter Bulletin Board, the market or exchange on
which the Ordinary Shares are then listed and traded, which only may be The New York Stock
Exchange, Inc., the American Stock Exchange or the Nasdaq National Market. 

        “REGISTRATION
RIGHTS AGREEMENT” means that certain registration rights agreement between the
Company and the Purchasers. 

        “
SECURITIES” means the Ordinary Shares issued pursuant to the Agreement. 

[SIGNATURE PAGE FOLLOWS] 

12

[Signature page
– Warrant] 

IN WITNESS WHEREOF, the Company has
caused this Warrant to Purchase Ordinary Shares to be duly executed as of the Issuance
Date set out above. 

	ELBIT VISION SYSTEMS LTD.

By: 
——————————————

Name:
Title:		

13

	
 EXHIBIT A

EXERCISE NOTICE

	
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT TO PURCHASE ORDINARY SHARES 

ELBIT VISION SYSTEMS LTD.. 

The undersigned holder hereby
exercises the right to purchase _________________ of the Ordinary Shares (“WARRANT
SHARES”) of Elbit Vision Systems Ltd., a company organized under the laws of the
State of Israel (the “Company”), evidenced by the attached Warrant to Purchase
Ordinary Shares (the “WARRANT”). Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant. 

        1.
          Form of Exercise Price. The Holder intends that payment of the Exercise Price
          shall be made as:  

____________ a "CASH EXERCISE" with respect to _________________ Warrant Shares.; or

____________ a "CASHLESS EXERCISE" with respect to _________________ Warrant Shares.

        2.
          Payment of Exercise Price. If using a “Cash Exercise: The holder is hereby
          delivering to the Company payment in the amount of $_________ or NIS _________
          representing the Aggregate Exercise Price for such Warrant Shares.  

        3.
          Delivery of Warrant Shares. The Company shall deliver to the holder __________
          Warrant Shares in accordance with the terms of the Warrant.  

Date: _______________ __,
______ 

——————————————

Name of Registered Holder

By:
——————————————

Name:

Title:

14

ANNEX B

Registration Rights Agreement 

15

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