<TABLE>
<CAPTION>
<S>                                                                                         <C>
AROTECH                                                                                                  Arotech Corporation

                                                                                              250 West 57th Street, Suite 310
                                                                                                     New York, New York 10107
                                                                                  Tel:  (212) 258-3222   Fax:  (212) 258-3281
                                                                                                       http://www.arotech.com
                                                                                                 Nasdaq National Market: ARTX
                                                                                        Writer's direct dial: +972-2-990-6612
                                                                                         Writer's direct fax: +972-2-990-6688
                                                                                         Writer's e-mail: ehrlich@arotech.com
</TABLE>

 Robert S. Ehrlich
 Chairman, President and Chief Executive Officer


                                 March 30, 2005

Sampen Corporation
1133 East 22nd Street
Brooklyn, New York 11210

                            Re: Consulting Agreement

Gentlemen:

         The following confirms our understanding with regard to the terms and
conditions of the retention by Arotech Corporation (the "Company") of Sampen
Corporation ("Sampen"):

1.       Retention of Consultant; Scope of Duties and Services.

         (a) Effective January 1, 2005, the Company hereby engages Sampen, and
Sampen hereby accepts such engagement and agrees to provide the Company with the
services set forth herein.

         (b) Sampen shall provide to the Company the services of one of its
employees, subject to the Company's approval of such employee (which the Company
may withhold for any reason or for no reason), for such employee to serve as
Executive Vice President and Chief Operating Officer of the Company. Sampen
shall give written notice to the Company in advance if it wishes to provide a
different employee to the Company, and such change shall be subject to the
Company's approval (which the Company may withhold for any reason or for no
reason). The individual provided by Sampen, as such individual may change from
time to time, shall be referred to herein as the "Executive." The Executive
shall perform the duties, undertake the responsibilities and exercise the
authority customarily performed, undertaken and exercised by persons situated in
a similar executive capacity in publicly-held United States corporations. The
Executive shall exercise his authority in a reasonable manner and shall report
to the Chief Executive Officer of the Company (the "CEO").

         (c) While Sampen is providing services to the Company hereunder, the
Company shall use its best efforts to cause the Executive to be elected to the
Board of Directors of the Company (the "Board") and on the board of directors of
such of the Company's subsidiaries as the CEO shall determine, as a member of
such Board(s). The Company will use its reasonable best efforts to obtain, and
to keep in place at all times that the Executive is a director or officer of the
Company, a directors and officers liability policy covering the Executive in an
amount and otherwise containing terms and conditions consistent with past
practices.

<PAGE>

         (d) The parties hereto agree that the services to be provided by Sampen
hereunder shall be as an independent consultant, and not as employee or agent.
The parties further agree that any personnel of, or retained by, Sampen who
perform services hereunder are not and shall not be deemed to employees, agents
or representatives of the Company. This Agreement shall not be construed to
create the relationship of principal or agent, joint venturers, co-partners or
any relationship other than that of independent Consultant and client, and the
existence of any such other relationship is hereby expressly denied by the
Company and Sampen.

         (e) Sampen acknowledges and agrees that it has the sole responsibility
to pay any and all taxes due on fees received by it from the Company and to pay
or withhold (as appropriate) all applicable social security, income withholding
and other payroll or related taxes with respect to its employees (including
without limitation the Executive), agents and other personnel who may perform
services hereunder, and Sampen shall file or cause to be filed all tax returns
and all reports and keep all records which may be required by any law or
regulation of the country or countries to whose laws it is subject or any state
or municipality or governmental subdivision with respect to its activities and
the activities of any of personnel working for it.

         (f) Sampen shall allow the Company to use Sampen's offices as an
ancillary New York office for the Company, for meetings, mail and package
deliveries, fax receptions, etc., the expenses of which shall be covered by the
payment referred to in Section 3(b)(i) below. Additionally, Sampen shall be
entitled to receive prompt reimbursement of all other expenses reasonably
incurred by it or by the Executive in connection with the performance of its
duties hereunder. Without limiting the generality of the foregoing, the Company
shall pay all expenses in the use of telephones by Sampen and its employees for
the Company's businesses. Sampen shall be entitled to reimbursement of the
Executive's expenses and to receive room, board and travel reimbursement in
connection with the performance by the Executive of Sampen's duties other than
at the principal executive office of the Company, as is customary for senior
executives in publicly-held United States companies. All expense reimbursements
made under this Section shall be tax-effected such that the amount of
reimbursement received by Sampen net of any taxes and withholdings (including
such amounts in respect of payments pursuant to this sentence) equals the
expense incurred. Except as otherwise specifically set forth above or elsewhere
in this Agreement, Sampen shall bear and be responsible for all costs and
expenses incurred by it or its employees (including the Executive) in performing
its duties hereunder.

         (g) Sampen's employees, including the Executive, shall be required to
travel on a periodic basis, as pre-approved by the Company. Air travel shall be
business class.

2.       Term.

         (a) The term of this Agreement shall commence on and as of January 1,
2005 and shall continue until December 31, 2006, unless sooner terminated as
hereinafter provided (the "Initial Term"). Notwithstanding the foregoing, all of
the rights and remedies of the parties hereto under the terms of this Agreement
and in law and in equity shall be preserved even after the termination or
expiration of this Agreement.

         (b) The Initial Term shall be automatically extended for additional
two-year periods (each, an "Additional Term") unless either party provides
written notice to the other of its desire to terminate the Agreement which
notice shall be given at least ninety (90) days prior to the expiration date of
the Initial Term or Additional Term of this Agreement.

                                       2
<PAGE>

         (c) This Agreement may be terminated by the Company prior to the end of
the Initial Term or any Additional Term under the following circumstances:

            (i)   Upon the death of the Executive, unless Sampen provides a new
                  individual who is acceptable to the Company to serve in that
                  position.

            (ii)  Upon the Disability of the Executive, unless Sampen provides a
                  new individual who is acceptable to the Company to serve in
                  that position. For purposes of this Agreement, "Disability"
                  means a physical or mental infirmity which impairs the
                  Executive's ability to substantially perform Sampen's duties
                  under this Agreement which continues for a period of at least
                  one hundred and eighty (180) consecutive days.

            (iii) For "Cause," which shall mean and include (i) conviction of
                  the Executive or any other Sampen employees working for the
                  Company for fraud, crimes of moral turpitude or other conduct
                  that reflects on the Company in a material and adverse manner,
                  (ii) a willful failure to carry out a material directive of
                  the CEO, provided that such directive concerned matters within
                  the scope of Sampen's duties, was in conformity with Section
                  1(b) hereof, would not give Sampen Good Reason (as hereinafter
                  defined) to terminate this Agreement and was capable of being
                  reasonably and lawfully performed, (iii) conviction of the
                  Executive in a court of competent jurisdiction for
                  embezzlement of funds of the Company, (iv) reckless or willful
                  misconduct that is materially harmful to the Company, and (v)
                  failure to provide the services of the Executive as provided
                  for above; provided, however, that the Company may not
                  terminate Sampen for Cause unless it has given Sampen written
                  notice of the basis for the proposed termination ("Company's
                  Notice of Termination").

         (d) This Agreement may be terminated by Sampen prior to the end of the
Initial Term or any Additional Term under the following circumstances:

              (i) For "Good Reason," which shall mean and include:

                  (A)      a change (1) in the Executive's status, title,
                           position or responsibilities which, in Sampen's
                           reasonable judgment, represents a reduction or
                           demotion in the Executive's status, title, position
                           or responsibilities as in effect immediately prior
                           thereto, or (2) in the primary location from which
                           Sampen shall have conducted its business activities
                           under this Agreement during the 60 days prior to such
                           change;

                                       3
<PAGE>

                  (B)      a reduction in Sampen's Base Payment (as hereinafter
                           defined);

                  (C)      the insolvency or the filing (by any party, including
                           the Company) of a petition for the winding-up of the
                           Company;

                  (D)      any material breach by the Company of any provision
                           of this Agreement; and

                  (E)      any purported termination of this Agreement for Cause
                           by the Company which does not comply with the terms
                           of Section 2(c)(iii) of this Agreement;

                      provided, however, that Sampen may not terminate this
                      Agreement for Good Reason unless it has given the Company
                      (i) written notice of the basis for the proposed
                      termination not more than thirty (30) days after Sampen
                      has obtained knowledge of such basis ("Sampen's Notice of
                      Termination") and (ii) a period of at least thirty (30)
                      days after the Company's receipt of such notice in which
                      to cure such basis.

              (ii)    if there is a "Change in Control" in Arotech. For purposes
                      of this Agreement, a "Change in Control" shall mean any of
                      the following events:

                   (A)     the acquisition (other than from Arotech in any
                           public offering or private placement of equity or
                           equivalent securities) by any person or entity of
                           beneficial ownership of thirty (30%) or more of the
                           combined voting power of Arotech's then outstanding
                           voting securities; or

                   (B)     individuals who, as of January 1, 2004, were members
                           of the Board of Arotech (the "Original Board"),
                           together with individuals approved by a vote of at
                           least two-thirds (2/3) of the individuals who were
                           members of the Original Board and are then still
                           members of the Board of Arotech, cease for any reason
                           to constitute at least one-third (1/3) of the Board
                           of the Company; or

                   (C)     approval by the shareholders of the Company of a
                           complete winding-up of Arotech or an agreement for
                           the sale or other disposition of all or substantially
                           all of the assets of Arotech.

                      Sampen shall give to the Company a Sampen's Notice of
                      Termination if Sampen desires to terminate this Agreement
                      because there has been a Change in Control, such notice to
                      specify the date of such termination which shall be not
                      less than thirty (30) days after such notice is received
                      by the Company. Any such notice, to be effective with
                      respect to any Change in Control, must be sent no later
                      than six (6) months after such Change in Control.

                                       4
<PAGE>

         (e) "Termination Date" shall mean in the case of the Executive's death
(or the death of any other Executive Sampen offers as a successor), the date of
such death, or in all other cases, the date specified in the Notice of
Termination subject to the following:

              (i)     If this Agreement is terminated by the Company for Cause
                      or due to Disability, the date specified in the Company's
                      Notice of Termination shall be at least thirty (30) days
                      from the date the Notice of Termination is given to
                      Sampen, provided that in the case of Disability the
                      Executive shall not have returned to the full-time
                      performance of its duties during such period of at least
                      thirty (30) days assuming Sampen cannot provide a
                      substitute Executive acceptable to the Company; and

              (ii)    If this Agreement is terminated for Good Reason, or
                      because there has been a Change in Control, the
                      Termination Date specified in Sampen's Notice of
                      Termination shall not be more than sixty (60) days from
                      the date the Notice of Termination is given to the
                      Company.

         (f) Upon Termination, the Company shall pay Sampen all amounts of Base
Payment and the benefits specified in clauses 3(b)(i), (ii) and (iii) of this
Agreement earned or accrued hereunder through the Termination Date but not paid
as of the Termination Date.

3.       Compensation; Benefits.

         (a) For the services rendered by Sampen under this Agreement, the
Company shall compensate Sampen as follows:

              (i)     A base payment at the rate of US $12,800 per month, or
                      such larger amount as the Compensation Committee of the
                      Board (the "Compensation Committee) may in its sole
                      discretion determine following a review which shall be
                      conducted by the CEO and the Compensation Committee by not
                      later than March 31 of each year, such larger amount to
                      take effect retroactively to the January 1 immediately
                      preceding such review (hereinafter referred to as the
                      "Base Payment"). Such Base Payment shall be payable in
                      equal monthly installments.

              (ii)    On each anniversary of this Agreement or as soon
                      thereafter as may be possible in order to determine the
                      relevant results of the Company, an annual bonus, as
                      follows:

                  (A)      If, as of such anniversary, Arotech shall have
                           attained 90% of Arotech's Budgeted Number (as defined
                           below) for the year preceding such anniversary, then
                           Sampen's bonus shall be equal to 25% of Sampen's
                           gross annual Base Payment as then in effect for the
                           year preceding such anniversary;

                  (B)      If, as of such anniversary, Arotech shall have
                           attained 120% of Arotech's Budgeted Number (as
                           defined below) for the year preceding such
                           anniversary, then Sampen's bonus shall be equal to
                           75% of Sampen's gross annual Base Payment as then in
                           effect for the year preceding such anniversary;

                                       5
<PAGE>

                  (C)      If, as of such anniversary, Arotech shall have
                           attained more than 90% but less than 120% of
                           Arotech's Budgeted Number (as defined below), then
                           Sampen's bonus shall be calculated as follows:

                                    B  =    (S x 25%) + (N-90)/30 x (S x 50%)

                                    Where:

                                    B = The amount of Sampen's annual bonus, as
                                    a percentage of Sampen's gross annual Base
                                    Payment; and

                                    N = The percentage of the Budgeted Number
                                    (as defined below) that was attained by
                                    Arotech in the immediately preceding fiscal
                                    year; provided, however, that N is more than
                                    90 and less than 120;

                                    S  =    Sampen's gross annual Base Payment;

                           provided, however, that Sampen shall be entitled in
                           each year to a minimum bonus of 20% of the Base
                           Payment.

                      For the purposes of this Section 3(a)(ii), the Budgeted
                      Number shall be the budgeted results of Arotech as agreed
                      by the Board of Arotech prior to the end of each fiscal
                      year for the fiscal year designated in such budget, and
                      may include targets for any or all of the following
                      factors: (i) revenues; (ii) cash flow, and (iii) EBITDA.
                      In the event that some but not all targets are reached,
                      the Compensation Committee shall made a determination as
                      to what percentage of the Budgeted Number was attained.

         (b) It being in the Company's interest that the Company have an
additional office in the New York area and that the Executive be provided with
certain benefits, including without limitation vacation and sick leave, the
Company and Sampen agree that the Executive will be provided with the following
benefits:

            (i)   The Company will pay Sampen, to cover the cost of the
                  Company's use of Sampen's office as an ancillary Company
                  office and insurance, an amount equal to 16% of each monthly
                  payment of the Base Payment. .

                                       6
<PAGE>

            (ii)  The Company agrees that Sampen shall provide the Executive
                  with an annual vacation at full pay equal to 24 work days.
                  Vacation days may be accumulated and may, at the Executive's
                  option or automatically upon termination, be converted into
                  cash payments in an amount equal to the proportionate part of
                  the Base Payment for such days; provided, however, that if the
                  Executive accumulates more than two (2) times its then current
                  annual entitlement of vacation days, such excess shall be
                  automatically converted into the right to receive such a cash
                  payment in respect of such excess. Payments to which Sampen is
                  entitled pursuant to this Section 3(b)(ii) shall be made
                  promptly after Sampen's request therefore.

            (iii) Sampen shall provide the Executive with a maximum aggregate of
                  30 days of fully paid sick leave, accruing at the rate of 2.5
                  days per month. Sick leave may be accumulated and may, at
                  Sampen's option, be converted into cash payments in an amount
                  equal to the proportionate part of the Base Payment for such
                  days. Payments to which Sampen is entitled pursuant to this
                  Section 3(b)(iii) shall be made promptly after Sampen's
                  request therefor.

4.       Warranties.

         (a) Sampen warrants that all services provided by him hereunder will be
rendered in a competent and professional manner and that such services will
conform in all respects to (i) generally-accepted industry and professional
standards then applicable to such services and products, (ii) all applicable
laws, rules, regulations and professional codes, and (iii) any specifications
and requirements applicable to the services and any products contracted for
hereunder (including a delivery timetable) which may be set forth in an
agreement between the Company and a third party or parties. The Company shall
have the right to extend Sampen's warranties herein to third parties and Sampen
shall be liable thereon to the same extent as if such warranties were originally
made to such third parties.

         (b) The warranties contained herein shall survive the termination and
expiration of this Agreement regardless of the reasons therefor.

5.       Confidential Information; Return of Materials; Inventions.

         (a) In the course of his retention by the Company hereunder, Sampen
will have access to, and become familiar with, "Confidential Information" (as
hereinafter defined) of the Company. Sampen shall at all times hereinafter
maintain in the strictest confidence all such Confidential Information and shall
not divulge any Confidential Information to any person, firm or corporation
without the prior written consent of the Company. For purposes hereof,
"Confidential Information" shall mean all information in any and all medium
which is confidential by its nature including, without limitation, data,
technology, know-how, inventions, discoveries, designs, processes, formulations,
models and/or trade and business secrets relating to any line of business in
which the Company's marketing and business plans relating to current, planned or
nascent products.

                                       7
<PAGE>

         (b) Sampen shall not use Confidential Information for, or in connection
with, the development, manufacture or use of any product or for any other
purpose whatsoever except as and to the extent necessary for him to perform his
obligations under this Agreement. Sampen shall assure that none of its employees
uses such Confidential Information other than as permitted in this Agreement.

         (c) Notwithstanding the foregoing, Confidential Information shall not
include information which Sampen can evidence to the Company by appropriate
documentation: (i) is in, or enters the public domain otherwise than by reason
of breach hereof by Sampen; (ii) is known by Sampen at the time of disclosure
thereof by the Company; or (iii) is rightfully transmitted or disclosed to
Sampen by a third party which owes no obligation of confidentiality with respect
to such information.

         (d) All Confidential Information made available to, or received by,
Sampen or its employees shall remain the property of the Company, and no license
or other rights in or to the Confidential Information is granted hereby.

         (e) All files, records, documents, drawings, specifications, equipment,
and similar items relating to the business of the Company, whether prepared by
Sampen or otherwise coming into his possession, and whether classified as
Confidential Information or not, shall remain the exclusive property of the
Company. Upon termination or expiration of this Agreement, or upon request by
the Company, Sampen shall promptly turn over to the Company all such files,
records, reports, analyses, documents, and other material of any kind concerning
the Company which Sampen obtained, received or prepared pursuant to this
Agreement.

         (f) Confidential Information shall not include information brought to
the Company by Sampen, where the Company does not subsequently utilize such
information in the ordinary course of its business (including as a result of
changes to its business).

         (g) Sampen undertakes not, directly or indirectly (whether as owner,
partner, consultant, employee or otherwise) at any time, during and for twelve
(12) months following termination of this Agreement, to engage in or contribute
its knowledge to any work or activity that involves a product, process, service
or development which is then directly (in any material manner) competitive with
any business that the Company has conducted during the term of this Agreement or
any extension hereof on which Sampen worked or with respect to which Sampen had
access to Proprietary Information while with the Company. Notwithstanding the
foregoing, Sampen shall be permitted to engage in the aforementioned proposed
work or activity if the Company furnishes it with written consent to that effect
signed by an authorized officer of the Company.

         (h) During the period specified in 5(g) hereof, Sampen will not solicit
or encourage any customer or supplier of the Company or of any group, division
or subsidiary of the Company, to terminate its relationship with the Company or
any such group, division or subsidiary, and Sampen will not, directly or
indirectly, recruit or otherwise seek to induce any employee of the Company or
any such group, division or subsidiary to terminate his or her employment or
violate any agreement with or duty to the Company or any such group, division or
subsidiary.

                                       8
<PAGE>

         (i) Sampen agrees that violations of the material covenants in this
Section 5 will cause the Company irreparable injuries and agrees that the
Company may enforce said covenants by seeking injunctive or other equitable
relief (in addition to any other remedies the Company may have at law for
damages or otherwise) from a court of competent jurisdiction. In the event such
court declares these covenants to be too broad to be specifically enforced, the
covenants shall be enforced to the largest extent as may be allowed by such
court for the Company's protection. Sampen further agrees that no breach by the
Company of, or other failure by the Company under this Agreement shall relieve
Sampen of any obligations under Sections 5(g) and 5(h) hereof.

         (j) The provisions of this Section shall survive the termination of
this Agreement. Sampen acknowledges that the provisions set forth in this
Section of this Agreement are fair and reasonable, and Sampen agrees to cause
its employees to comply with the above provisions.

6.       Miscellaneous.

         (a) This Agreement shall inure to the benefit of the Company and its
successors and assigns.

         (b) This Agreement shall be subject to, governed by and construed in
accordance with, the laws of the State of New York without regard to conflicts
of law provisions and principles of that State, and the courts located in
Manhattan, New York shall have exclusive jurisdiction of any dispute hereunder.

         (c) No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Sampen and the Company. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreement or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement.

         (d) Neither Sampen nor the Company will be deemed to have made any
representation, warranty, covenant or agreement except for those expressly set
forth herein.

         (e) This Agreement shall be binding upon and shall inure to the benefit
of the Company, its successors and assigns and the Company shall require any
successor or assign to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession or assignment had taken place. The term the
"Company" as used herein shall include such successors and assigns. The term
"successors and assigns" as used herein shall mean a corporation or other entity
acquiring all or substantially all the assets and business of the Company
(including this Agreement) whether by operations of law or otherwise.

         (f) Neither this Agreement nor any right or interest hereunder shall be
assignable or transferable by Sampen or its legal representatives, except by
will or by the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by Sampen's legal representative.

                                       9
<PAGE>

         (g) Nothing to the contrary in the foregoing notwithstanding, Sampen
may assign this Agreement to any company of which it is a "control person"
within the meaning of the Securities Exchange Act of 1934, provided, that Sampen
shall continue to be obligated to fulfill the duties set forth in Section 1
above, and provided, further, that Sampen shall continue to be bound by the
terms and provisions of Section 5 of this Agreement notwithstanding any such
assignment.

         If the foregoing satisfactorily reflects the mutual understanding
between you and the Company, kindly sign and return to the Company the enclosed
copy of this letter. On behalf of the Company, I want to take this opportunity
to state that we look forward to our working relationship with you.


                                        Very truly yours,

                                        AROTECH CORPORATION



                                        By:
                                           -------------------------------------
                                            Robert S. Ehrlich
                                            Chairman, President and CEO
ACCEPTED AND AGREED:

SAMPEN CORPORATION


By:
   --------------------------------------------------
     Morris Esses
     President