US Army's CECOM Publishes Tender for up to 150,000 Zinc-Air Batteries on a Sole-Source Basis.

Business Editors

NEW YORK--(BUSINESS WIRE)--Nov. 17, 2003

Arotech's Electric Fuel Subsidiary Only Company Specifically Named

as Proposed Sole Source

Arotech Corporation (NasdaqNM: ARTX) announced today that the US Army's Communications and Electronic Command (CECOM) has published its intention to sole source up to 150,000 zinc-air batteries, consisting of a mixture of BA-8180/U and BA-81XX batteries, and up to 41,000 associated interface adapters over the next three years. CECOM intends to solicit on a sole source basis under 10 U.S.C. 2304(c)(1), Only One Responsible Source, for a three-year, Firm Fixed Price, Indefinite Delivery, Indefinite Quantity contract. The published tender names Arotech's Electric Fuel Battery subsidiary as the proposed sole source. No other company is named.

The solicitation states that Electric Fuel is the only source that has designed and produced zinc-air batteries and interface adapters that meet the Government's requirements. It is also the only source with an operational production line for the batteries and adapters that meet Government requirements. The first orders for batteries and adapters could come as soon as early next year.

Electric Fuel's BA-8180/U zinc-air battery is a 12/24 Volt, 800 Watt-hour, non-rechargeable battery pack, approximately the size and weight of a notebook computer. The battery is based on lightweight, 30 ampere-hours cells developed by Electric Fuel over the last 5 years with partial funding by CECOM. In extensive field-testing, the BA-8180/U battery typically provided 4 to 6 times the run time of a BA-5590, a primary lithium battery pack widely used in the military. Zinc-air batteries are considerably safer in combat situations and more environmentally friendly than lithium batteries.

"Our lightweight, low-cost primary zinc-air batteries have up to twice the energy capacity per pound of primary lithium battery packs, and are inherently safe in storage, transportation, use, and disposal," said Robert S. Ehrlich, Arotech Chairman and CEO. "The publication of this tender demonstrates that the value that the Army places on the advantages that zinc-air technology can bring to bear on mission-critical applications. "The fact that we alone were named as the proposed sole source gives us great cause for optimism," concluded Ehrlich.

About Arotech Corporation

Arotech's corporate mission is to provide quality defense and security products for the military, law enforcement and homeland security markets, including advanced zinc-air batteries, multimedia interactive simulators/trainers and lightweight armoring.

Arotech Corporation (www.arotech.com) operates two business divisions: Electric Fuel Batteries -- developing and manufacturing zinc-air batteries for military and homeland security applications and developing electric vehicle batteries for zero emission public transportation; and Arotech Defense -- consisting of IES Interactive, which provides advanced high-tech multimedia training systems for law enforcement and paramilitary organizations, MDT Armor, which provides vehicle armoring for the military, industrial and private sectors, and Arocon Security, which provides homeland security consulting and other services.

Arotech is incorporated in Delaware and has corporate and sales offices in New York and Denver with research, development and production subsidiaries in Alabama, Colorado 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; significant future capital requirements; the outcome of the claims made by the I.E.S. Group; 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.