Elbit Vision Systems Ltd. Receives Favorable Judgement in Litigation Against Panoptes, Ltd.; EVS Awarded Damages and Legal Fees Totaling NIS 470,000.

Business Editors

YOQNEAM, Israel--(BUSINESS WIRE)--June 3, 2004

Elbit Vision Systems Ltd. (OTCBB:EVSNF.OB) announced today that the Haifa District Court in Israel has issued a judgment in its favor in the Company's claim against Panoptes, Ltd. and its founder and CEO, Mr. Hillel Avni, originally filed November 3, 2002.

The Court has awarded EVS a total of NIS 470,000 (U.S. $105,000), representing damages sought and legal expenses.

EVS' claim was based on the belief that Mr. Avni, founder and former Chief Technology Officer of EVS, recruited key EVS employees and introduced products for the textile and Web markets that were based on proprietary knowledge obtained during his employment at EVS and in violation of the Company's copyrights.

Mr. Zami Aberman, Chief Executive Officer of EVS, said: "We are pleased that the court has ruled in our favor on this matter. We believed that Mr. Avni established Pantopes and introduced its products based largely on trade secrets which he gained as an employee of EVS, and the court's decision has validated this belief. Additionally, this ruling sets an important precedent, as it reaffirms the strength of the intellectual property that is the basis for our products and technology. We are constantly working to develop new technologies that will bring added value to our customers, such as the recently introduced LOOM-TEX integrated visual inspection system, and are committed to preventing further illegal use of our copyrights and know-how by former employees attempting to enter the markets in which we operate. We are confident that our customers will recognize the benefits of our proprietary technology."

About the Company:

Elbit Vision Systems Limited designs, develops, manufactures, markets and supports automatic optical inspection and quality monitoring systems for the industrial, Web and microelectronics industries. Company product lines improve product quality and increase production efficiency in the textile, automotive, non-woven, plastics, wafer and LCD industries.

Forward-looking statements in this release with respect to the Company's business, financial condition and results of operations are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements, including, but not limited to, product demand, pricing, market acceptance, changing economic conditions, risks in product and technology development, the effect of the Company's accounting policies as well as certain other risk factors which are detailed from time-to-time in the Company's SEC filings.