EXHIBIT 4.1


NEITHER THESE  SECURITIES  NOR THE  SECURITIES  INTO WHICH THESE  SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE  COMMISSION OR
THE  SECURITIES  COMMISSION  OF ANY STATE IN  RELIANCE  UPON AN  EXEMPTION  FROM
REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT AND IN ACCORDANCE  WITH  APPLICABLE  STATE
SECURITIES  LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH  EFFECT,  THE  SUBSTANCE  OF WHICH SHALL BE  REASONABLY  ACCEPTABLE  TO THE
COMPANY.  THESE  SECURITIES AND THE  SECURITIES  ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

                               AROTECH CORPORATION

                                     WARRANT

Warrant No.:
                  ------------------
Number of Shares:
                  ------------------
Date of Issuance:  July 14, 2004 ("ISSUANCE DATE")

Arotech Corporation,  a Delaware  corporation (the "COMPANY"),  hereby certifies
that,  for value  received,  the  receipt  and  sufficiency  of which are hereby
acknowledged,  _______________________________________,  the  registered  holder
hereof or its  permitted  assigns (the  "HOLDER"),  is entitled,  subject to the
terms set forth below,  to purchase from the Company,  at the Exercise Price (as
defined below) then in effect, at any time or times on or after the date hereof,
but not after  11:59 p.m.,  New York Time,  on the  Expiration  Date (as defined
below),  __________________________________________________________  (_________)
fully paid nonassessable shares of Common Stock (as defined below) (the "WARRANT
SHARES"). Except as otherwise defined herein,  capitalized terms in this warrant
(including all Warrants issued in exchange,  transfer or replacement hereof, the
"WARRANTS") shall have the meanings set forth in Section 15.

The  Company  agrees that the Warrant  Shares  shall be treated as  "Registrable
Securities" in accordance with, and shall be governed by, identical terms to the
Registration Rights Agreement, dated as of January 7, 2004, which provisions and
terms should be applicable  hereto  mutates  mutandis (as such  agreement may be
amended from time to time, the "REGISTRATION  RIGHTS  AGREEMENT"),  by and among
the Company and the buyers named  therein,  as if the Company and the Holder had
executed such  Registration  Rights  Agreement,  and as if the Holder were party
thereto, as of the Issuance Date; provided, however, that:

                  "EFFECTIVENESS   DATE"   shall   mean  with   respect  to  the
                  Registration   Statement   required  to  be  filed  thereunder
                  relating to the Warrant Shares,  the earlier of (1) (i) in the


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                  event that the Registration Statement is not subject to a full
                  review by the SEC, 90 days after the Issuance  Date or (ii) in
                  the event that the Registration Statement is subject to a full
                  review by the SEC, 90 days after the  Issuance  Date,  and (2)
                  the fifth Business Day following the date on which the Company
                  is notified by the SEC that such  Registration  Statement will
                  not be reviewed or is no longer  subject to further review and
                  comments.

                  "FILING  DATE"  shall mean with  respect  to the  Registration
                  Statement  required  to be filed  thereunder  relating  to the
                  Warrant Shares, the 30th day following the Issuance Date.

For  purposes  of clarity,  the  issuance of this  Warrant is  unrelated  to the
transaction  pursuant to which the  Registration  Rights  Agreement  was entered
into.

         1. EXERCISE OF WARRANT.

                  (a) Mechanics of Exercise. Subject to the terms and conditions
hereof  (including,  without  limitation,  the  limitations set forth in Section
1(g)), this Warrant may be exercised by the Holder on any day from and after the
date hereof,  in whole or in part, by (i) delivery of a written  notice,  in the
form  attached  hereto as Exhibit A (the  "EXERCISE  NOTICE"),  of such Holder's
election to  exercise  this  Warrant,  and (ii) (A) payment to the Company of an
amount  equal to the  applicable  Exercise  Price  multiplied  by the  number of
Warrant  Shares as to which this  Warrant  is being  exercised  (the  "AGGREGATE
EXERCISE PRICE") in cash or wire transfer of immediately  available funds or (B)
by  notifying  the Company that this  Warrant is being  exercised  pursuant to a
Cashless Exercise (as defined in Section 1(d)). The date the Exercise Notice and
the Aggregate Exercise Price (or notice of a Cashless Exercise) are delivered to
the Company (as determined in accordance with the notice  provisions  hereof) is
an  "EXERCISE  DATE." The Holder  shall not be required to deliver the  original
Warrant in order to effect an exercise hereunder.  Execution and delivery of the
Exercise  Notice with respect to less than all of the Warrant  Shares shall have
the same effect as  cancellation  of the original  Warrant and issuance of a new
Warrant evidencing the right to purchase the remaining number of Warrant Shares.
On or before the first  Business Day  following the Exercise  Date,  the Company
shall transmit by facsimile an  acknowledgment of confirmation of receipt of the
Exercise Notice and the Aggregate Exercise Price to the Holder and the Company's
transfer  agent (the  "TRANSFER  AGENT").  On or before the third  Business  Day
following  the Exercise  Date,  the Company  shall direct the Transfer  Agent to
credit through The Depository  Trust Company  ("DTC") Fast Automated  Securities
Transfer  Program such  aggregate  number of shares of Common Stock to which the
Holder is entitled  pursuant to such exercise to the Holder's or its  designee's
balance account with DTC through its Deposit Withdrawal Agent Commission system.
On the Exercise Date,  the Holder shall be deemed for all corporate  purposes to
have  become the holder of record of the Warrant  Shares  with  respect to which
this  Warrant has been  exercised,  irrespective  of the date of delivery of the
certificates  evidencing such Warrant Shares.  Upon surrender of this Warrant to
the Company following one or more partial  exercises,  the Company shall as soon
as  practicable  and in no event later than three Business Days after receipt of
the Warrant and at its own  expense,  issue a new  Warrant (in  accordance  with
Section 7(d))  representing  the right to purchase the number of Warrant  Shares


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purchasable  immediately  prior to such exercise  under this  Warrant,  less the
number of Warrant  Shares with  respect to which this Warrant is  exercised.  No
fractional  shares of Common  Stock are to be issued  upon the  exercise of this
Warrant,  but rather the number of shares of Common  Stock to be issued shall be
rounded up to the nearest whole number.  The Company shall pay any and all taxes
which may be payable with respect to the issuance and delivery of Warrant Shares
upon  exercise  of this  Warrant.  In the event  that the  Company  is unable to
electronically deliver the Warrant Shares because of applicable securities laws,
then the Company  shall issue and  deliver to the  address as  specified  in the
Exercise  Notice a  certificate,  registered  in the name of the  Holder  or its
designee,  for the number of shares of Common  Stock to which the holder of this
Warrant is entitled pursuant to such exercise.

                  (b) Exercise  Price.  For purposes of this Warrant,  "EXERCISE
PRICE" means the arithmetic  average of the Weighted Average Price of the Common
Stock  over the  period of July 15,  2004,  July 16,  2004,  and July 19,  2004,
subject to adjustment as provided herein.

                  (c) Company's  Failure to Timely  Deliver  Shares.  Subject to
Section  1(g),  if the Company shall fail for any reason or for no reason within
three Business Days of the Exercise Date to credit the Holder's  balance account
with DTC for such  number  of shares  of  Common  Stock to which  the  Holder is
entitled  upon the Holder's  exercise of this  Warrant,  and if after such third
Business Day the Holder  purchases (in an open market  transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the
Warrant  Shares  that the  Holder  anticipated  receiving  from the  Company  (a
"BUY-IN"), then the Company shall, within three Business Days after the Holder's
request and in the Holder's discretion,  either (i) pay cash to the Holder in an
amount  equal  to  the  Holder's  total  purchase  price  (including   brokerage
commissions,  if any) for the shares of Common Stock so  purchased  (the "BUY-IN
PRICE"),  at which point the  Company's  obligation  to issue such Common  Stock
shall  terminate,  or (ii) promptly honor its obligation to credit to the Holder
such  Common  Stock and pay cash to the Holder in an amount  equal to the excess
(if any) of the Buy-In  Price over the  product of (A) such  number of shares of
Common  Stock,  times (B) the Closing Sale Price on the date of the event giving
rise to the Company's obligation to deliver such certificate. Subject to Section
1(g),  if the Company  shall fail for any reason or for no reason  within  three
Business Days of the Exercise Date to credit the Holder's  balance  account with
DTC for such  number of shares of Common  Stock to which the Holder is  entitled
upon the Holder's exercise of this Warrant,  then the Holder will have the right
to rescind such exercise.

                  (d)  Cashless  Exercise.  Notwithstanding  anything  contained
herein to the  contrary,  if at any time during the period  commencing  ten (10)
Business Days prior to the Holder's delivery of an Exercise Notice and ending on
the day of delivery of the  Exercise  Notice,  the  Registration  Statement  (as
defined in the Registration  Rights Agreement)  covering the Warrant Shares that
are the subject of the Exercise Notice (the "UNAVAILABLE WARRANT SHARES") is not
available for the issuance of such Unavailable  Warrant Shares,  the Holder may,
in its sole  discretion,  exercise this Warrant in whole or in part and, in lieu
of making the cash payment otherwise contemplated to be made to the Company upon
such  exercise in payment of the  Aggregate  Exercise  Price,  elect  instead to
receive upon such exercise the "Net Number" of shares of Common Stock determined
according to the following formula (a "CASHLESS EXERCISE"):


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                         Net Number = (A x B) - (A x C)
                                      -----------------
                                              B

                  For purposes of the foregoing formula:

                    A = the total  number of shares  with  respect to which this
                        Warrant is then being exercised.

                    B = the Closing  Sale Price of the Common  Stock on the date
                        immediately preceding the date of the Exercise Notice.

                    C = the  Exercise  Price then in effect  for the  applicable
                        Warrant Shares at the time of such exercise.

                  (e)  Absolute  and  Unconditional  Obligation.  The  Company's
obligations  to issue and deliver  Warrant  Shares in accordance  with the terms
hereof are absolute and unconditional, irrespective of any action or inaction by
the Holder to enforce the same, the recovery of any judgment  against any Person
or any action to enforce  the same,  or any  setoff,  counterclaim,  recoupment,
limitation or termination,  or any breach or alleged breach by the Holder or any
other  Person of any  obligation  to the  Company  or any  violation  or alleged
violation of law by the Holder or any other Person.  Nothing  herein shall limit
the Holder's  right to pursue any other remedies  available to it hereunder,  at
law  or  in  equity,  including,   without  limitation,  a  decree  of  specific
performance  and/or  injunctive  relief with respect to the Company's failure to
timely  deliver  certificates  representing  Warrant Shares upon exercise of the
Warrant as required pursuant to the terms hereof.

                  (f) Disputes. In the case of a dispute as to the determination
of the Exercise Price or the arithmetic  calculation of the Warrant Shares,  the
Company shall promptly issue to the Holder the number of Warrant Shares that are
not disputed and resolve such dispute in accordance with Section 12.

                  (g) Limitations on Exercises. The Company shall not effect the
exercise of this  Warrant,  and no Person who is a holder of this Warrant  shall
have the right to exercise this Warrant,  to the extent that after giving effect
to such exercise,  such Person  (together with such Person's  affiliates)  would
beneficially  own  in  excess  of  4.99%  of the  shares  of  the  Common  Stock
outstanding  immediately  after giving effect to such exercise.  For purposes of
the  foregoing  sentence,  the  aggregate  number  of  shares  of  Common  Stock
beneficially owned by such Person and its affiliates shall include the number of
shares of Common Stock  issuable  upon  exercise of this Warrant with respect to
which the determination of such sentence is being made, but shall exclude shares
of Common  Stock  which would be issuable  upon (i)  exercise of the  remaining,
unexercised  portion of this Warrant  beneficially  owned by such Person and its
affiliates  and (ii) exercise or conversion of the  unexercised  or  unconverted
portion of any other securities of the Company beneficially owned by such Person
and its  affiliates  (including,  without  limitation,  any  convertible  notes,
convertible  debentures,  convertible  preferred stock or warrants) subject to a


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limitation  on  conversion  or exercise  analogous to the  limitation  contained
herein.  Except as set forth in the  preceding  sentence,  for  purposes of this
paragraph,  beneficial  ownership shall be calculated in accordance with Section
13(d) of the Securities  Exchange Act of 1934, as amended.  For purposes of this
Warrant,  in  determining  the number of  outstanding  shares of Common  Stock a
Holder may rely on the number of outstanding shares of Common Stock as reflected
in (1) the  Company's  most recent Form 10-Q,  Form 10-K or other public  filing
with the  Securities  and  Exchange  Commission,  as the case may be, (2) a more
recent public announcement by the Company or (3) any other notice by the Company
or its  Transfer  Agent  setting  forth the  number  of  shares of Common  Stock
outstanding. For any reason at any time, upon the written or oral request of the
Holder, the Company shall within two Business Days confirm orally and in writing
to the  Holder the number of shares of Common  Stock  then  outstanding.  In any
case, the number of outstanding shares of Common Stock shall be determined after
giving effect to the  conversion or exercise of securities of the Company by the
Holder and its affiliates  since the date as of which such number of outstanding
shares of Common Stock was reported.

The  Company  shall not be  obligated  to issue any shares of Common  Stock upon
exercise of this  Warrant if the  issuance of such shares of Common  Stock would
exceed  that  number of shares of Common  Stock which the Company may issue upon
exercise of this Warrant without  breaching the Company's  obligations under the
rules or regulations of the Principal Market (the "EXCHANGE  CAP"),  except that
such limitation shall not apply in the event that the Company  obtains,  only if
required,  the approval of its  stockholders as required by the applicable rules
of the  Principal  Market for  issuances  of shares of Common Stock in excess of
such amount.  Until such  approval is obtained,  the Holder shall not be issued,
upon exercise of any Warrants,  shares of Common Stock in an amount greater than
the product of the Exchange Cap multiplied by a fraction, the numerator of which
is the total number of shares of Common Stock  underlying the Warrants issued to
the Holder on the Issuance  Date and the  denominator  of which is the aggregate
number of shares of Common  Stock  underlying  all the  substantially  identical
warrants (the  "EXCHANGE  WARRANTS")  issued by the Company on the Issuance Date
(with respect to the Holder,  the "EXCHANGE CAP ALLOCATION").  In the event that
the Holder shall sell or otherwise transfer any of such Holder's  Warrants,  the
transferee  shall be allocated a pro rata  portion of the Holder's  Exchange Cap
Allocation,  and the  restrictions  of the prior  sentence  shall  apply to such
transferee with respect to the portion of the Exchange Cap Allocation  allocated
to such  transferee.  In the event that any holder of applicable  warrants shall
exercise all of such  holder's  applicable  warrants  into a number of shares of
Common Stock which,  in the aggregate,  is less than such holder's  Exchange Cap
Allocation,  then the difference  between such holder's  Exchange Cap Allocation
and the number of shares of Common Stock actually issued to such holder shall be
allocated to the respective Exchange Cap Allocations of the remaining holders of
applicable  warrants on a pro rata basis in  proportion  to the shares of Common
Stock  underlying the warrants then held by each such holder.  In the event that
the Company is prohibited  from issuing any Warrant Shares for which an Exercise
Notice has been  received as a result of the  operation of this  paragraph,  the
Company shall pay cash in exchange for cancellation of such Warrant Shares, at a
price per Warrant Share equal to the  difference  between the Closing Sale Price
and the Exercise Price as of the date of the attempted exercise.


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<PAGE>

         2.  ADJUSTMENT  OF  EXERCISE  PRICE AND NUMBER OF WARRANT  SHARES  UPON
SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Company at any time after the
date of issuance of this Warrant subdivides (by any stock split, stock dividend,
recapitalization  or otherwise) one or more classes of its outstanding shares of
Common  Stock into a greater  number of  shares,  the  Exercise  Price in effect
immediately  prior to such subdivision will be  proportionately  reduced and the
number of Warrant Shares will be  proportionately  increased.  If the Company at
any time after the date of issuance of this Warrant  combines  (by  combination,
reverse stock split or otherwise) one or more classes of its outstanding  shares
of Common Stock into a smaller  number of shares,  the Exercise  Price in effect
immediately prior to such combination will be proportionately  increased and the
number of Warrant Shares will be proportionately decreased. Any adjustment under
this Section 2 shall  become  effective at the close of business on the date the
subdivision or combination becomes effective.

         3. RIGHTS UPON  DISTRIBUTION OF ASSETS. If the Company shall declare or
make any dividend or other  distribution of its assets (or rights to acquire its
assets)  to holders of Common  Stock,  by way of return of capital or  otherwise
(including,  without  limitation,  any  distribution  of  cash,  stock  or other
securities,   property   or   options   by  way  of  a   dividend,   spin   off,
reclassification,  corporate  rearrangement  or other  similar  transaction)  (a
"DISTRIBUTION"),  at any time after the issuance of this Warrant,  then, in each
such case:

                  (a) any  Exercise  Price in  effect  immediately  prior to the
close of business on the record date fixed for the  determination  of holders of
Common Stock entitled to receive the Distribution shall be reduced, effective as
of the  close  of  business  on  such  record  date,  to a price  determined  by
multiplying  such Exercise Price by a fraction of which (i) the numerator  shall
be the  Closing Bid Price of the Common  Stock on the  trading  day  immediately
preceding such record date minus the value of the Distribution (as determined in
good  faith by the  Company's  Board of  Directors)  applicable  to one share of
Common  Stock,  and (ii) the  denominator  shall be the Closing Bid Price of the
Common Stock on the trading day immediately preceding such record date; and

                  (b) the  number of  Warrant  Shares  shall be  increased  to a
number of shares  equal to the  number  of  shares  of Common  Stock  obtainable
immediately  prior to the close of  business  on the  record  date fixed for the
determination  of holders of Common Stock  entitled to receive the  Distribution
multiplied  by the  reciprocal  of the  fraction  set  forth in the  immediately
preceding  paragraph (a); provided that in the event that the Distribution is of
common stock ("OTHER COMMON STOCK") of a company whose common stock is traded on
a national  securities  exchange or a national automated  quotation system, then
the Holder may elect to receive a warrant to purchase Other Common Stock in lieu
of an  increase  in the number of Warrant  Shares,  the terms of which  shall be
identical  to  those  of  this  Warrant,  except  that  such  warrant  shall  be
exercisable into the number of shares of Other Common Stock that would have been
payable to the Holder pursuant to the Distribution had the Holder exercised this
Warrant  immediately  prior to such record date and with an  aggregate  exercise
price  equal to the  product of the amount by which the  exercise  price of this
Warrant was decreased with respect to the Distribution  pursuant to the terms of
the  immediately  preceding  paragraph  (a) and the  number  of  Warrant  Shares
calculated in accordance with the first part of this paragraph (b).


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         4. PURCHASE RIGHTS; ORGANIC CHANGE.

                  (a) Purchase Rights.  In addition to any adjustments  pursuant
to  Section  2 above,  if at any time the  Company  grants,  issues or sells any
Options,   Convertible   Securities  or  rights  to  purchase  stock,  warrants,
securities  or other  property  pro rata to the  record  holders of any class of
Common  Stock (the  "PURCHASE  RIGHTS"),  then the Holder  will be  entitled  to
acquire,  upon the terms  applicable  to such  Purchase  Rights,  the  aggregate
Purchase  Rights which such Holder  could have  acquired if such Holder had held
the number of shares of Common Stock  acquirable upon complete  exercise of this
Warrant  (without  regard to any  limitations  on the exercise of this  Warrant)
immediately  before the date on which a record is taken for the grant,  issuance
or sale of such Purchase Rights,  or, if no such record is taken, the date as of
which the record  holders of Common  Stock are to be  determined  for the grant,
issue or sale of such Purchase Rights.

                  (b)  Organic  Change.  Any  recapitalization,  reorganization,
reclassification, consolidation, merger, sale of all or substantially all of the
Company's assets to another Person or other  transaction,  in each case which is
effected  in such a way that  holders of Common  Stock are  entitled  to receive
securities or assets with respect to or in exchange for Common Stock is referred
to herein as an "ORGANIC  CHANGE." Prior to the  consummation of any (i) sale of
all or substantially  all of the Company's assets to an acquiring Person or (ii)
other Organic Change  following which the Company is not a surviving entity (for
purposes hereof a "surviving entity" means that this Warrant will continue to be
exercisable for the publicly  traded shares of a publicly  traded  entity),  the
Company will secure from the Person purchasing such assets or the Person issuing
the securities or providing the assets in such Organic Change (in each case, the
"ACQUIRING  ENTITY")  a  written  agreement  (in form and  substance  reasonably
satisfactory to the holders of warrants  representing at least a majority of the
shares of Common Stock  obtainable  upon exercise of the Exchange  Warrants then
outstanding)  to deliver to the Holder in exchange for this Warrant,  a security
of the Acquiring Entity evidenced by a written instrument  substantially similar
in form and substance to this Warrant and reasonably  satisfactory to the Holder
(including,  an adjusted  exercise price equal to the value for the Common Stock
reflected by the terms of such  consolidation,  merger or sale, and  exercisable
for a corresponding  number of shares of Common Stock  acquirable and receivable
upon exercise of this Warrant (without regard to any limitations on the exercise
of this  Warrant),  if the value so reflected is less than the Exercise Price in
effect  immediately prior to such  consolidation,  merger or sale). In the event
that an Acquiring  Entity is directly or  indirectly  controlled by a company or
entity whose common stock or similar  equity  interest is listed,  designated or
quoted on a securities exchange or trading market, the Holder may elect to treat
such Person as the Acquiring  Entity for purposes of this Section 4(b). Prior to
the consummation of any other Organic Change, the Company shall make appropriate
provision  (in form and  substance  reasonably  satisfactory  to the  holders of
Exchange Warrants representing at least a majority of the shares of Common Stock
obtainable  upon exercise of the Exchange  Warrants then  outstanding) to insure
that the Holder thereafter will have the right to acquire and receive in lieu of
or in  addition to (as the case may be) the shares of Common  Stock  immediately
theretofore acquirable and receivable upon the exercise of this Warrant (without
regard to any  limitations  on the  exercise  of this  Warrant),  such shares of


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stock,  securities  or assets  that  would  have been  issued or payable in such
Organic Change with respect to or in exchange for the number of shares of Common
Stock which would have been  acquirable and receivable upon the exercise of this
Warrant as of the date of such Organic Change (without regard to any limitations
on the exercise of this Warrant).

         5.  NONCIRCUMVENTION.  The Company hereby covenants and agrees that the
Company will not, by amendment of its  Certificate of  Incorporation  or through
any  reorganization,  transfer of assets,  consolidation,  merger,  dissolution,
issue or sale of securities,  or any other  voluntary  action,  avoid or seek to
avoid the  observance or  performance  of any of the terms of this Warrant,  and
will at all times in good faith carry out all the provisions of this Warrant and
take all action as may be required to protect the rights of the Holder.  Without
limiting the generality of the foregoing,  the Company (i) will not increase the
par value of any shares of Common  Stock  receivable  upon the  exercise of this
Warrant above the Exercise Price then in effect, (ii) will take all such actions
as may be  necessary  or  appropriate  in order that the Company may validly and
legally  issue  fully  paid and  nonassessable  shares of Common  Stock upon the
exercise of this  Warrant,  and (iii) will,  so long as any of the  Warrants are
outstanding,  take all action necessary to reserve and keep available out of its
authorized  and unissued  Common Stock,  solely for the purpose of effecting the
exercise of the Warrants,  100% of the number of shares of Common Stock as shall
from time to time be  necessary  to effect the  exercise  of the  Warrants  then
outstanding (without regard to any limitations on exercise).

         6. HOLDER NOT DEEMED A  STOCKHOLDER.  Except as otherwise  specifically
provided herein, no Holder, solely in such Person's capacity as a holder of this
Warrant,  shall be entitled to vote or receive dividends or be deemed the holder
of shares of the Company for any purpose,  nor shall anything  contained in this
Warrant be construed to confer upon the Holder, solely in such Person's capacity
as a Holder,  any of the rights of a shareholder  of the Company or any right to
vote,   give  or  withhold   consent  to  any  corporate   action  (whether  any
reorganization,  issue  of  stock,  reclassification  of  stock,  consolidation,
merger, conveyance or otherwise),  receive notice of meetings, receive dividends
or subscription rights, or otherwise, prior to the issuance to the Holder of the
Warrant  Shares  which such  Person is then  entitled  to  receive  upon the due
exercise of this Warrant.  In addition,  nothing contained in this Warrant shall
be  construed  as  imposing  any  liabilities  on such  Holder to  purchase  any
securities  (upon  exercise of this Warrant or otherwise) or as a stockholder of
the  Company,  whether  such  liabilities  are  asserted  by the  Company  or by
creditors  of the  Company.  Notwithstanding  this  Section 6, the Company  will
provide the Holder with copies of the same notices and other  information  given
to the stockholders of the Company generally,  contemporaneously with the giving
thereof to the stockholders.

         7. REISSUANCE OF WARRANTS.

                  (a) Transfer of Warrant. If this Warrant is to be transferred,
the Holder shall  surrender  this Warrant to the Company,  whereupon the Company
will forthwith  issue and deliver upon the order of the Holder a new Warrant (in
accordance   with  Section   7(d)),   registered  as  the  Holder  may  request,
representing   the  right  to  purchase  the  number  of  Warrant  Shares  being


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<PAGE>

transferred  by the Holder and, if less then the total number of Warrant  Shares
then underlying this Warrant is being transferred,  a new Warrant (in accordance
with  Section  7(d)) to the  Holder of this  Warrant  representing  the right to
purchase the number of Warrant Shares not being transferred.

                  (b) Lost,  Stolen or  Mutilated  Warrant.  Upon receipt by the
Company of evidence  reasonably  satisfactory to the Company of the loss, theft,
destruction  or mutilation of this Warrant,  and, in the case of loss,  theft or
destruction,  of any indemnification undertaking by the Holder to the Company in
customary form and, in the case of mutilation,  upon surrender and  cancellation
of this  Warrant,  the  Company  shall  execute  and deliver to the Holder a new
Warrant (in accordance with Section 7(d)) representing the right to purchase the
Warrant Shares then underlying this Warrant.

                  (c) Warrant  Exchangeable for Multiple Warrants.  This Warrant
is exchangeable, upon the surrender hereof by the Holder at the principal office
of the Company,  for a new Warrant or Warrants (in accordance with Section 7(d))
representing in the aggregate the right to purchase the number of Warrant Shares
then underlying this Warrant, and each such new Warrant will represent the right
to purchase  such portion of such Warrant  Shares as is designated by the Holder
at the  time  of  such  surrender;  provided,  however,  that  no  Warrants  for
fractional shares of Common Stock shall be given.

                  (d) Issuance of New Warrants. Whenever the Company is required
to issue a new Warrant  pursuant to the terms of this Warrant,  such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated
on the face of such new Warrant,  the right to purchase the Warrant  Shares then
underlying  this Warrant (or in the case of a new Warrant being issued  pursuant
to Section 7(a) or Section  7(c),  the Warrant  Shares  designated by the Holder
which,  when added to the number of shares of Common Stock  underlying the other
new Warrants issued in connection with such issuance, does not exceed the number
of Warrant Shares then  underlying  this Warrant),  (iii) shall have an issuance
date,  as  indicated  on the face of such new  Warrant  which is the same as the
Issuance  Date,  and (iv) shall  have the same  rights  and  conditions  as this
Warrant.

                           8. NOTICES. Any notices,  consents,  waivers or other
communications required or permitted
to be given  under  the terms of this  Warrant  must be in  writing  and will be
deemed to have been delivered: (i) upon receipt, when delivered personally; (ii)
upon receipt,  when sent by facsimile (provided  confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one Business Day after deposit with an overnight  courier  service,  in
each case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

                  If to the Company:

                  Arotech Corporation
                  250 West 57th Street
                  Suite 310
                  New York, New York 10107
                  Facsimile No.:   (212) 258-3281
                  Telephone No.:  (212) 258-3222
                  Attn.:  Chief Executive Officer


                                       10
<PAGE>

                  With a copy to:

                  Electric Fuel (E.F.L.) Ltd.
                  One HaSolela Street, POB 641
                  Western Industrial Park
                  Beit Shemesh 99000, Israel
                  Facsimile No.: 011-972-2-990-6688
                  Telephone No.:  011-972-2-990-6623
                  Attn.: General Counsel

If to the Holder,  to its address and facsimile number set forth on the Schedule
of Buyers to the  Securities  Purchase  Agreement,  dated as of January 7, 2004,
among the Company and the investors  referred to therein (the "JANUARY SPA"), or
in the event that the Holder was not party to the January SPA, then as set forth
on Exhibit B hereto,  with copies to such Holder's  representatives as set forth
on such Schedule of Buyers,

                  With a copy to:

                  Schulte Roth & Zabel LLP
                  919 Third Avenue
                  New York, New York 10022
                  Facsimile No.:   (212) 593-5955
                  Telephone No.:  (212) 756-2000
                  Attn.: Eleazer Klein, Esq.

or to such other address and/or facsimile number and/or to the attention of such
other Person as the  recipient  party has  specified by written  notice given to
each  other  party  five (5) days  prior to the  effectiveness  of such  change.
Written  confirmation  of receipt  (A) given by the  recipient  of such  notice,
consent,  waiver or other  communication,  (B)  mechanically  or  electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile  number  and an image of the first  page of such  transmission  or (C)
provided  by an  overnight  courier  service  shall be  rebuttable  evidence  of
personal  service,  receipt by facsimile  or receipt  from an overnight  courier
service in accordance with clause (i), (ii) or (iii) above, respectively.

The Company shall provide the Holder with prompt  written  notice of all actions
taken pursuant to this Warrant,  including in reasonable detail a description of
such action and the reason  therefore.  Without  limiting the  generality of the
foregoing,  the Company will give written  notice to the Holder (i)  immediately
upon any adjustment of the Exercise Price,  setting forth in reasonable  detail,
and  certifying,  the calculation of such adjustment and (ii) promptly after the
date on which the  Company  establishes  a record  date (A) with  respect to any
dividend or distribution  upon the Common Stock, (B) with respect to any grants,
issues or sales of any  Options,  Convertible  Securities  or rights to purchase
stock, warrants,  securities or other property to holders of Common Stock or (C)
for determining  rights to vote with respect to any Organic Change,  dissolution


                                       11
<PAGE>

or liquidation,  provided in each case that such information shall be made known
to the public prior to or in conjunction  with such notice being provided to the
Holder.

         9.  AMENDMENT  AND WAIVER.  Except as otherwise  provided  herein,  the
provisions  of this  Warrant  may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it,  only if the  Company has  obtained  the  written  consent of the holders of
Exchange Warrants representing at least a majority of the shares of Common Stock
obtainable  upon exercise of the Exchange  Warrants then  outstanding;  provided
that no such action may increase the exercise price of any Exchange  Warrants or
decrease the number of shares or class of stock  obtainable upon exercise of any
Exchange  Warrants without the written consent of the Holder.  No such amendment
shall be effective to the extent that it applies to less than all of the holders
of the Exchange Warrants then outstanding.

         10.  GOVERNING  LAW.  This Warrant  shall be construed  and enforced in
accordance  with,  and all  questions  concerning  the  construction,  validity,
interpretation  and  performance  of this  Warrant  shall be  governed  by,  the
internal laws of the State of New York,  without  giving effect to any choice of
law or conflict of law  provision  or rule  (whether of the State of New York or
any other  jurisdictions)  that would cause the  application  of the laws of any
jurisdictions other than the State of New York.

         11. CONSTRUCTION;  HEADINGS. This Warrant shall be deemed to be jointly
drafted by the  Company  and the Holder and shall not be  construed  against any
person as the drafter  hereof.  The headings of this Warrant are for convenience
of reference and shall not form part of, or affect the  interpretation  of, this
Warrant.

         12.  DISPUTE   RESOLUTION.   In  the  case  of  a  dispute  as  to  the
determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares,  the Company  shall submit the  disputed  determinations  or  arithmetic
calculations  via facsimile  within two Business Days of receipt of the Exercise
Notice  giving rise to such dispute,  as the case may be, to the Holder.  If the
Holder  and  the  Company  are  unable  to  agree  upon  such  determination  or
calculation  of the Exercise  Price or the Warrant  Shares within three Business
Days of such disputed determination or arithmetic calculation being submitted to
the  Holder,  then the  Company  shall,  within  two  Business  Days  submit via
facsimile  (a)  the  disputed   determination   of  the  Exercise  Price  to  an
independent,  reputable  investment bank selected by the Company and approved by
the Holder or (b) the disputed  arithmetic  calculation of the Warrant Shares to
the Company's  independent,  outside accountant.  The Company shall cause at its
expense the investment  bank or the  accountant,  as the case may be, to perform
the  determinations or calculations and notify the Company and the Holder of the
results no later than ten  Business  Days from the time it receives the disputed
determinations   or  calculations.   Such  investment   bank's  or  accountant's
determination  or  calculation,  as the case may be,  shall be binding  upon all
parties absent demonstrable error.

         13. REMEDIES,  OTHER  OBLIGATIONS,  BREACHES AND INJUNCTIVE RELIEF. The
remedies  provided in this Warrant  shall be  cumulative  and in addition to all
other  remedies  available  under  this  Warrant  and  the  Registration  Rights
Agreement,  at law or in  equity  (including  a decree of  specific  performance
and/or other injunctive relief), and nothing herein shall limit the right of the


                                       12
<PAGE>

Holder to pursue  actual  damages  for any failure by the Company to comply with
the terms of this Warrant.  The Company  acknowledges that a breach by it of its
obligations  hereunder  will cause  irreparable  harm to the Holder and that the
remedy at law for any such  breach  may be  inadequate.  The  Company  therefore
agrees that,  in the event of any such breach or threatened  breach,  the Holder
shall be entitled, in addition to all other available remedies, to an injunction
restraining  any breach,  without the  necessity  of showing  economic  loss and
without any bond or other security being required.

         14. TRANSFER.  This Warrant may be offered for sale, sold,  transferred
or assigned without the consent of the Company.

         15. CERTAIN  DEFINITIONS.  For purposes of this Warrant,  the following
terms shall have the following meanings:

         "BLOOMBERG" means Bloomberg Financial Markets.

         "BUSINESS DAY" means any day other than  Saturday,  Sunday or other day
on which  commercial banks in The City of New York are authorized or required by
law to remain closed.

         "CLOSING BID PRICE" and "CLOSING SALE PRICE" means, for any security as
of any  date,  the  last  closing  bid  price  and  last  closing  trade  price,
respectively,  for  such  security  on the  Principal  Market,  as  reported  by
Bloomberg,  or, if the Principal  Market begins to operate on an extended  hours
basis and does not  designate  the closing bid price or the closing trade price,
as the case may be, then the last bid price or last trade  price,  respectively,
of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg,
or, if the Principal Market is not the principal  securities exchange or trading
market  for such  security,  the last  closing  bid price or last  trade  price,
respectively,  of such security on the principal  securities exchange or trading
market where such security is listed or traded as reported by  Bloomberg,  or if
the  foregoing  do not apply,  the last  closing bid price or last trade  price,
respectively,  of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price or last trade  price,  respectively,  is  reported  for such  security  by
Bloomberg,  the average of the bid prices, or the ask prices,  respectively,  of
any market  makers for such  security as  reported in the "pink  sheets" by Pink
Sheets LLC (formerly the National  Quotation  Bureau,  Inc.). If the Closing Bid
Price or the  Closing  Sale  Price  cannot be  calculated  for a  security  on a
particular  date on any of the  foregoing  bases,  the  Closing Bid Price or the
Closing Sale Price,  as the case may be, of such  security on such date shall be
the fair market value as mutually  determined by the Company and the Holder.  If
the  Company  and the Holder are unable to agree upon the fair  market  value of
such security,  then such dispute shall be resolved  pursuant to Section 12. All
such determinations to be appropriately  adjusted for any stock dividend,  stock
split,  stock  combination  or other similar  transaction  during the applicable
calculation period.

         "COMMON STOCK" means (i) the Company's common stock, par value $.01 per
share,  and (ii) any capital  stock into which such Common Stock shall have been
changed or any capital stock  resulting from a  reclassification  of such Common
Stock.


                                       13
<PAGE>

         "CONVERTIBLE  SECURITIES"  means any stock or  securities  (other  than
Options) directly or indirectly  convertible into or exercisable or exchangeable
for Common Stock.

         "EXPIRATION DATE" means July 14, 2009.

         "OPTIONS"  means any rights,  warrants or options to  subscribe  for or
purchase Common Stock or Convertible Securities.

         "PERSON"  means  an  individual,   a  limited  liability   company,   a
partnership,  a  joint  venture,  a  corporation,  a  trust,  an  unincorporated
organization,  any other entity and a  government  or any  department  or agency
thereof.

         "PRINCIPAL MARKET" means the Nasdaq National Market.

         "WEIGHTED  AVERAGE  PRICE" means,  for any security as of any date, the
dollar  volume-weighted  average price for such security on the Principal Market
during the period  beginning at 9:30:01 a.m.,  New York Time (or such other time
as the Principal Market publicly announces is the official open of trading), and
ending at  4:00:00  p.m.,  New York Time (or such  other  time as the  Principal
Market  publicly  announces  is the  official  close of  trading) as reported by
Bloomberg through its "Volume at Price" functions, or, if the foregoing does not
apply,  the  dollar  volume-weighted  average  price  of  such  security  in the
over-the-counter  market on the  electronic  bulletin  board  for such  security
during the period  beginning at 9:30:01 a.m.,  New York Time (or such other time
as such market publicly  announces is the official open of trading),  and ending
at  4:00:00  p.m.,  New York Time (or such other  time as such  market  publicly
announces is the official close of trading) as reported by Bloomberg,  or, if no
dollar volume-weighted  average price is reported for such security by Bloomberg
for such  hours,  the  average of the  highest  closing bid price and the lowest
closing ask price of any of the market  makers for such  security as reported in
the "pink sheets" by Pink Sheets LLC (formerly  the National  Quotation  Bureau,
Inc.).  If the Weighted  Average Price cannot be calculated  for a security on a
particular  date on any of the foregoing  bases,  the Weighted  Average Price of
such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree
upon the fair market value of such security, then such dispute shall be resolved
pursuant to Section 12. All such determinations to be appropriately adjusted for
any stock dividend,  stock split, stock combination or other similar transaction
during the applicable calculation period.

         16. January SPA  Provisions.  The Company and the Holder hereby make to
each other the representations and warranties as to the Warrants and the Warrant
Shares as set forth in the January SPA as if such representations and warranties
were set forth  herein,  mutates  mutandis.  The Company  hereby agrees to issue
transfer agent instructions  substantially identical to, and subject to the same
terms and  conditions,  as the Transfer  Agent  Instructions  referenced  in the
January SPA and that the  Warrants  and Warrant  Shares shall be governed by the
provisions  of Section  4(b) of the January SPA as if such  provisions  were set
forth in full herein.


                            [SIGNATURE PAGE FOLLOWS]


                                       14
<PAGE>

IN WITNESS  WHEREOF,  the Company has caused this Warrant to be duly executed by
its authorized officer as of the date first indicated above.

                                      AROTECH CORPORATION


                                      By:
                                          -------------------------------
                                          Name:  Robert S. Ehrlich
                                          Title: Chief Executive Officer




                                       15
<PAGE>

                                    EXHIBIT A

                                 EXERCISE NOTICE
            TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
                                     WARRANT

                               AROTECH CORPORATION
To:      Arotech Corporation
         The  undersigned  is the Holder of Warrant  No.  _____ (the  "WARRANT")
issued  by  Arotech   Corporation,   a  Delaware  corporation  (the  "COMPANY").
Capitalized  terms  used  herein  and  not  otherwise  defined  shall  have  the
respective meanings set forth in the Warrant.

         1.  The  Warrant  is  currently  exercisable  to  purchase  a total  of
___________  Warrant Shares.

         2.  The  undersigned  holder  hereby  exercises  its  right to purchase
___________  Warrant Shares pursuant to the Warrant.

         3.  The Holder intends that payment of the Exercise Price shall be made
as:

             ____________  a "Cash Exercise" with respect to _________________
                           Warrant Shares; and/or

             ____________  a "Cashless Exercise" with respect to _______________
                           Warrant Shares.

         4. Pursuant to this  exercise,  the Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.

         5. Following  this  exercise,  the  Warrant  shall  be  exercisable  to
purchase a total of ________________ Warrant Shares.

         Please  issue  the  Warrant  Shares  in the  following  name and to the
following address:

         Issue to: _____________________________________________________________

                   _____________________________________________________________

         Account Number: _______________________________________________________


         DTC Participant Number: _______________________________________________


Date: _______________ __, ______



---------------------------------------
   Name of Registered Holder

By:
    -----------------------------------
    Name:
    Title:

<PAGE>

                                 ACKNOWLEDGMENT


         The Company hereby acknowledges this Exercise Notice and hereby directs
American  Stock  Transfer  & Trust Co. to issue  the above  indicated  number of
shares of Common Stock in accordance with the Transfer Agent  Instructions dated
July 14, 2004, from the Company and acknowledged and agreed to by American Stock
Transfer & Trust Co.


                                          AROTECH CORPORATION


                                          By:
                                             ----------------------------------
                                             Name:
                                             Title:

<PAGE>

                               FORM OF ASSIGNMENT


           [To be completed and signed only upon transfer of Warrant]



   FOR VALUE RECEIVED,  the undersigned hereby sells, assigns and transfers unto
________________________________  the right represented by the within Warrant to
purchase ____________ shares of Common Stock of Arotech Corporation to which the
within Warrant relates and appoints  ________________  attorney to transfer said
right on the books of Arotech Corporation with full power of substitution in the
premises.



Dated:                 ,
       --------------    -----
                                        ----------------------------------------
                                        (Signature must conform in all respects
                                        to name of Holder as specified on the
                                        face of the Warrant)

                                        ----------------------------------------
                                        Address of Transferee


                                        ----------------------------------------

                                        ----------------------------------------

In the presence of:


------------------------------

<PAGE>

                                    EXHIBIT B




                               Address for Notices