Arotech's FAAC Subsidiary Delivers $850,000 of MB2000 Bus Simulators to LA, Pittsburgh; Brings Total Number of Systems Installed to 16 Simulators in 9 Cities.

Business Editors/High-Tech Writers

NEW YORK--(BUSINESS WIRE)--Feb. 26, 2004

Arotech Corporation (NasdaqNM: ARTX) announced today that its FAAC subsidiary has delivered 2 more MB2000 Bus Simulators, valued at over $850,000. One simulator was installed at Port Authority of Allegheny County (Pittsburgh), and one at the Los Angeles Metropolitan Authority (LAMTA). LAMTA has options for three additional MB2000 simulators.

Combined, the Pittsburgh and LA Simulators bring the total number of MB2000 bus simulators to 16, installed at 9 major transit authorities including New York, Washington DC, Houston, and Dallas.

The MB2000 is a full mission bus simulator that uses Computer Generated Imagery, including actual rear view mirrors, to present a highly realistic visual scene to the driver. The driver must interact with traffic and pedestrians under a variety of weather conditions. The MB2000 features a replica of each customer's bus type, including the New Flyer cab built for New York City Transit.

"Our strong penetration in the US transit market will serve as a base for expanding into Europe," said Robert S. Ehrlich, Arotech Chairman and CEO. "Bus and light-rail simulation clearly reduces training cost and improves safety."

About FAAC

FAAC Incorporated (www.faac.com) has been providing high fidelity training and simulation products to its military and commercial customer base for over 30 years. FAAC supplies driving simulators for training operators of automobiles, trucks, police/fire/EMS vehicles, bus drivers, light rail operators, and airport ground vehicles. Over 80,000 drivers have been trained on FAAC's installed base of 173 driving simulators. FAAC also provides pilot decision-making support software for the F-15, F-18, and JSF aircraft as well as simulation models for the ACMI/TACTS air combat training ranges.

About Arotech Corporation

Arotech Corporation (www.arotech.com) provides quality defense and security products for the military, law enforcement and homeland security markets, including advanced zinc-air and lithium batteries and chargers, multimedia interactive simulators/trainers and lightweight vehicle armoring.

The Battery and Power Systems Division includes Electric Fuel Battery Corporation (www.electric-fuel.com) and Epsilor Electronic Industries (www.epsilor.com). The Simulation, Training and Consulting Division includes IES Interactive Training (www.ies-interactive.com), FAAC Incorporated (www.faac.com) and Arocon Security Consulting (www.arocon-security.com). The Armored Vehicle Division includes MDT Armor Corp. (www.mdt-armor.com) and MDT Protective Industries Ltd. (www.mdtisrael.com).

Arotech is incorporated in Delaware, with corporate offices in New York, and research, development and production subsidiaries in Alabama, Colorado, Michigan and Israel.

Except for the historical information herein, the matters discussed in this news release include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements, as they are subject to various risks and uncertainties that may cause actual results to vary significantly. These risks and uncertainties include, but are not limited to, risks relating to: product and technology development; the uncertainty of the market for Arotech's products; changing economic conditions; delay, cancellation or non-renewal, in whole or in part, of contracts or of purchase orders; and other risk factors detailed in Arotech's most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2002 and other filings with the Securities and Exchange Commission. Arotech assumes no obligation to update the information in this release. Reference to the Company's website above does not constitute incorporation of any of the information thereon into this press release.