|       Steven      EssesPresident      and Chief Operating Officer |   Arotech      Corporation 1229      Oak Valley DriveAnn      Arbor, Michigan 48108Tel:  (800)      281-0356   Fax:  (734) 761-5368http://www.arotech.comNasdaq      Global Market: ARTXWriter’s direct dial:      +972-2-990-6618Writer’s direct fax:      +972-2-990-6688Writer’s e-mail: esses@arotech.com |
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|   | 1. | Section      1 of the Agreement is hereby amended to extend the Term of the Agreement      to December 31, 2011. |
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|   | 2. | In      Section 6(3)(ii) of the Agreement, the phrase “twenty percent (20%)” is      hereby replaced with the phrase “thirty percent  (30%).” |
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|   | 3. | Section      7(e) of the Agreement is hereby amended to provide that upon Termination      (except Termination for Cause), all Restricted Shares, both Performance      Restricted Shares and Non-Performance Restricted Shares, shall immediately      become unrestricted and freely tradable (subject to applicable securities      laws). |
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|   | 4. | For      the avoidance of doubt, we hereby clarify that if your employment is      Terminated by you for Good Reason or because there has been a Change in      Control, or by us without Cause, you will be entitled to be paid upon      Termination, in addition to and not instead of all Accrued Compensation      and all other compensation due to you pursuant to the provisions of      Section 7 of the Agreement, all Base Salary that you would have been paid      through the end of the Term but for the  Termination. |
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|   | 5. | In      all other respects, the terms of the Agreement will govern the      relationship between us. |
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