Arotech Subsidiary FAAC Inc. Gets $420,000 Order to Modernize Air Combat Training Software.

Business Editors

NEW YORK--(BUSINESS WIRE)--March 4, 2004

Arotech Corporation (NasdaqNM: ARTX) announced today that its subsidiary FAAC Incorporated has been awarded a $420,000 contract from Jacobs Sverdrup Technology, Inc. to modernize FAAC's air combat training range software architecture.

Jacobs Sverdrup is contracting on behalf of Eglin Air Force Base, one of the largest Air Force bases in the world. FAAC has a 30-year history of providing weapon system simulations for the family of US Air Force ACTS and US Navy TACTS Air Combat Training Ranges.

"This is the first contract of an anticipated four year program to bring the simulation architecture up to modern standards," said FAAC President Al Jordan. "The legacy software, developed over 20 years ago, had become difficult for the government to maintain and was beginning to restrict long term expansion."

"The new design will provide growth capability for the over 25 air combat training range located worldwide," said Robert S. Ehrlich, Arotech's Chairman, President and CEO. "This in turn should provide FAAC opportunities to participate in that growth."

About FAAC

FAAC Incorporated (www.faac.com) has been providing high fidelity training and simulation products to it's 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.