LIMITED GUARANTY, PLEDGE AND VOTING AGREEMENT

This LIMITED GUARANTY, PLEDGE AND VOTING AGREEMENT (this “ Agreement ”) is entered into and effective as of August 14, 2008, by __________________________, an individual residing at ______________________________, as guarantor and pledgor (“ Guarantor ”), in favor of AROTECH CORPORATION, a Delaware corporation with its principal place of business located at 1229 Oak Valley Drive, Ann Arbor, Michigan 48108, or its registered assigns, as secured party (“ Secured Party ”).

A.            Reference is made to that certain 10% Senior Subordinated Convertible Note (including each additional 10% Senior Subordinated Convertible Note issued in accordance with Section 11(d) of said 10% Senior Subordinated Convertible Note, the “ Note ”) issued on the date hereof to the initial Secured Party by DEI Services Corporation, a Florida corporation with its principal place of business located at 7213 Sandscove Court, Suite One, Winter Park, Florida 32792 (the “ Company ”), in the principal amount of $2,500,000.

B.             Guarantor is the record and beneficial owner of certain shares of Common Stock, no par value per share, of the Company (the “ Common Stock ”), as set forth on Schedule I attached hereto.

C.            As a condition to the granting of financial assistance to the Company by the initial Secured Party as evidenced by the Note, the Guarantor has agreed to execute, deliver and perform this Agreement in favor of Secured Party in order to guaranty and secure with the Collateral (as defined below) the obligations of the Company under the Note to Secured Party (the “ Obligations ”), and to agree to vote his shares for the election of designees of Secured Party to the Company’s board of directors as set forth herein (the “ Voting Arrangement ”).

D.            Guarantor acknowledges and confirms that, as an owner of Common Stock of the Company, (a) he will benefit from the financial assistance provided by the initial Secured Party in connection with Secured Party’s purchase of the Note; (b) each of the guaranty of the Obligations, the pledge of Collateral in respect thereof and the Voting Arrangement by Guarantor hereunder is intended to be an inducement to the initial Secured Party to purchase the Note; and (c) Secured Party is relying upon the guaranty of the Obligations, the pledge of Collateral in respect thereof and the Voting Arrangement by Guarantor hereunder in providing financial assistance to the Company in connection with its purchase of the Note.

Accordingly, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and as an inducement for Secured Party to provide financial assistance to the Company in connection with its purchase of the Note, Guarantor, intending to be legally bound, hereby agrees as follows for the benefit of Secured Party:

1.1.            Definitions .  Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Note.  Whenever the context so requires, each reference to gender includes the masculine and feminine, the singular number includes the plural and vice versa.  This Agreement shall mean such agreement as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, from time to time.  References in this Agreement to any Person shall include such Person and its successors and permitted assigns.

1.2.            Defined Terms .  In this Agreement, the following terms shall mean as follows:

“ Bankruptcy Code ” shall mean the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et seq.), as amended and in effect from time to time and the regulations issued from time to time thereunder.

“ Collateral ” shall mean (i) the issued and outstanding shares of Common Stock owned or held of record by Guarantor on the date hereof as set forth on Schedule I hereto, which shares are represented by stock certificates duly executed and delivered by the Company; (ii) all other shares of Common Stock and shares of any other series or class of capital stock of the Company owned or held of record by Guarantor at any time (and the certificates representing such shares); and (iii) any and all replacements, products and proceeds of, and dividends, distributions in property or securities, returns of capital or other distributions made on or with respect to, any of the foregoing.

2.1.            Guaranty of Obligations . Guarantor hereby irrevocably guarantees the prompt and punctual payment and performance of the Note and all Obligations thereunder, including, without limitation, all amounts from time to time payable by the Company in connection with the Note (including without limitation, all Principal, Interest, Late Charges and all other monetary obligations, including reasonable attorneys fees, costs, expenses and indemnities, whether primary, secondary, contingent, fixed or otherwise in connection with the Note), and all of the obligations, terms, covenants and agreements of the Company to Secured Party under the Note and of the Guarantor to Secured Party hereunder, in any case whether according to the present terms thereof and hereof, at any earlier or accelerated date or pursuant to any extension of time or to any change therein now or at any time hereafter made or granted (such obligations so guaranteed shall be collectively referred to herein as the “ Guaranteed Obligations ”); provided that the Guaranteed Obligations of Guarantor hereunder shall expressly be limited as set forth in Section 2.3 hereof.  The Guaranteed Obligations include in all cases, subject to the limitations set forth in Section 2.3 hereof, all such obligations that arise after the filing of a bankruptcy petition with respect to the Company or Guarantor and all such obligations that will become payable but for the operation of any Bankruptcy Law involving the Company or Guarantor, including, but not limited to, interest accruing with respect to the Obligations after the filing of a bankruptcy petition, whether or not allowed or allowable as a claim in the bankruptcy proceeding.

(a)           This guaranty is a continuing guarantee of prompt and punctual payment of the Guaranteed Obligations, whether at stated maturity, by acceleration or otherwise, and not merely a guaranty of collection, subject to the limitations set forth in Section 2.3 .  Guarantor agrees that its obligations hereunder are independent of the obligations of the Company or any other Person, and shall be binding upon Guarantor and his heirs, administrators, devisees, legatees, executors, successors and assigns, and are irrevocable without regard to the genuineness, validity, legality or enforceability of the Note or Obligations or the lack of power or authority of the Company to enter into the Note or any substitution, release or exchange of any other guaranty of or any security for any of the Obligations or any other circumstances (other than payment or performance) which might otherwise constitute a legal or equitable discharge of a surety or guarantor and shall not be subject to any right of set-off or counterclaim and are in no way conditioned upon any attempt to enforce performance or compliance by the Company or any other event or contingency, subject to the limitations set forth in Section 2.3 .

(b)           Guarantor agrees that, if at any time all or any part of any payment previously made to Secured Party to satisfy any Obligation must be returned by Secured Party for any reason, whether by court order, administrative order, or settlement, Guarantor shall remain liable for the full amount returned, subject to the limitations set forth in Section 2.3 , as if such amount had never been received by Secured Party, notwithstanding any termination of this Agreement or the Note or the cancellation of this Agreement or the Note or any other agreement evidencing the Obligations or the Guaranteed Obligations.

(c)           Guarantor hereby acknowledges that the Guaranteed Obligations are secured by the Collateral and expressly waives any defenses or benefits available to Guarantor as a result of the exercise by Secured Party of nonjudicial or judicial remedies against the Company, any other guarantor of the Obligations or any Collateral, and further expressly waives any defenses or benefits arising out of or against any Collateral.  Guarantor hereby agrees, without limiting the generality of the foregoing, that Secured Party shall not be required to make any demand on any other guarantor of the Obligations or otherwise pursue or exhaust its remedies against the Company or any collateral securing the Obligations or any other Person before enforcing its rights and remedies against Guarantor hereunder, and any one or more successive and/or concurrent actions may be brought against Guarantor in the same action brought against any other guarantor of the Obligations, the Company or any other Person or in separate actions, as often as Secured Party may deem advisable, in its sole discretion.  The Guaranteed Obligations shall not in any way be affected by any action or inaction of Secured Party, which action or inaction is hereby consented and agreed to by Guarantor, or by the partial or complete unenforceability or invalidity of any other guaranty, pledge, assignment or lien for any of the Obligations or of the value, genuineness, validity or enforceability of the Note, any of the Obligations, this Agreement or any of the Guaranteed Obligations.

2.3.            Non-Recourse .  Notwithstanding anything to the contrary contained in this Agreement or the Note, the Secures Party’s recovery against Guarantor in respect of the Guaranteed Obligations shall be limited solely to the Collateral of Guarantor.  Guarantor shall not have any personal liability in respect of the Guaranteed Obligations under this Agreement for any of the Guaranteed Obligations, and no monetary or deficiency judgment shall be sought or enforced against Guarantor with respect thereto under this Agreement.  Notwithstanding the foregoing, nothing contained in this Section 2.3 shall (x) impair the validity of the Obligations or the Guaranteed Obligation, (y) in any way affect or impair the rights of Secured Party to enforce any other guaranty of the Obligations or (z) limit the application of Section 2.7 .

2.4.            Defenses of the Company Waived .  The Note shall remain fully enforceable irrespective of any defenses which the Company, Guarantor or any other Person may assert under the Note, including, but not limited to, failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury (other than prior indefeasible payment in full in cash of the Obligations (except contingent Obligations for which no claim has been made) by the Company).

2.5.            Liability of Guarantor .  Guarantor agrees that Secured Party, shall have the full right and power, in its sole discretion and without any notice to or consent from Guarantor and without affecting or discharging, in whole or in part, the liability of Guarantor under this Agreement or the Note, to deal in any manner with the Guaranteed Obligations, Collateral and any security or guaranties therefor.  Without limiting the generality of the foregoing, the occurrence of any one or more of the following shall not affect Guarantor’s obligations hereunder or under the Note:  (a) new agreements or obligations of the Company with or to Secured Party or increases, amendments, extensions, modification, renewals or waivers of default as to any existing or future agreements or obligations of the Company, with or to Secured Party or extensions of credit by Secured Party to the Company; (b) adjustments, compromises or releases of any obligations to or of the Company, any other guarantor of the Obligations or other Persons, or exchanges, releases of sales of any security or collateral of the Company, Guarantor or other Persons; (c) errors, omissions, invalidity or unenforceability of this Agreement or the Note; (d) reorganization, extensions, moratoria or other relief granted to the Company pursuant to any law presently in force or hereafter enacted; (e) interruptions in the business relations between or among Secured Party, the Company and/or Guarantor; (f) the release or exchange, in whole or in part, of any other guarantor of the Obligations from such Person’s guaranty of the Obligations or any security or collateral therefor or any action or inaction by Secured Party with respect thereto; (g) the failure of any Person to sign any similar guaranty; (h) subsequent reorganization, merger or consolidation of the Company or any other change any of the foregoing’s structure, nature, personnel or location; or (i) any impairment, modification, change, release or limitation of the liability of the Company, any other guarantor of the Obligations or any other Person or their respective estates in bankruptcy resulting from the operation of any present or future provision of any Bankruptcy Laws, or from the decision of any court.

2.6.            Event of Default .  If an Event of Default shall occur and be continuing, Secured Party or any assignee thereof shall be entitled to receive hereunder from Guarantor, upon demand therefor, all of the Guaranteed Obligations, subject to the limitations set forth in Section 2.3 hereof.  For the purposes of this Agreement, an Event of Default shall not be deemed to have occurred with respect to any Curable Event of Default until the expiration of any Applicable Cure Period relating thereto.

2.7.            Subordination of Certain Rights .  Upon payment by Guarantor of any sums to Secured Party, for its benefit, all rights of Guarantor against the Company arising as a result thereof by way of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment to the prior indefeasible payment in full in cash and performance of all the remaining Obligations (except contingent Obligations for which no claim has been made), subject to the limitations set forth in Section 2.3 hereof.  If any amount shall erroneously be paid to Guarantor for any reason, such amount shall be held in trust for the benefit of Secured Party and shall forthwith be paid to Secured Party to be credited against the Obligations, whether matured or unmatured, in accordance with the terms of the Note.  Guarantor shall have no right of subrogation whatever with respect to the Guaranteed Obligations or to any Collateral or other collateral therefor until all of the Obligations (except contingent Obligations for which no claim has been made) have been irrevocably and indefeasibly paid in full in cash (and/or converted into shares of Common Stock in accordance with the terms and conditions of the Note) and performed in full and the Note and this Agreement have been irrevocably terminated, subject to the limitations set forth in Section 2.3 hereof.

(a)           It is the intent of Guarantor and Secured Party that Guarantor’s maximum obligations hereunder shall be up to, but not in excess of, the maximum amount which would not otherwise cause the Guaranteed Obligations to be avoidable or unenforceable against Guarantor under (i) Section 548 of the Bankruptcy Code (in any case commenced by or against Guarantor within one (1) year from the date on which any of the Guaranteed Obligations are incurred), (ii) any state fraudulent transfer or fraudulent conveyance act or statute applied in any case or proceeding by virtue of Section 544 of the Bankruptcy Code, or (iii) any law, statute or regulation other than the Bankruptcy Code (including, without limitation, any receivership, readjustment of debt, dissolution, liquidation or similar Bankruptcy Law) including, without limitation, any state fraudulent transfer or fraudulent conveyance act or statute applied in any case or proceeding of any nature commenced by or against Guarantor.  (The substantive laws under which the possible avoidance or unenforceability of the Guaranteed Obligations shall be determined in any such case or proceeding shall be referred to herein as the “ Avoidance Provisions ”).

(b)           To the extent set forth in subsections (i), (ii), and (iii) above , but only to the extent that the Guaranteed Obligations would otherwise be subject to avoidance under the Avoidance Provisions, if Guarantor is not deemed to have received valuable consideration or reasonably equivalent value for the Guaranteed Obligations, or if the Guaranteed Obligations would render Guarantor insolvent, or cause Guarantor to have incurred debts beyond its ability to pay such debts as they mature, in each case as of the time any of the Guaranteed Obligations are deemed to have been incurred under the Avoidance Provisions and after giving effect to the contribution by Guarantor, the maximum Guaranteed Obligations for which Guarantor shall be liable hereunder shall be reduced to that amount which, after giving effect thereto, would not cause the Guaranteed Obligations, as so reduced, to be subject to avoidance under the Avoidance Provisions.  This Section 2.8 is intended solely to preserve the rights of Secured Party and neither Guarantor nor any other Person shall have any right or claim under this Section 2.8 against Secured Party that would not otherwise be available to such person under the Avoidance Provisions.

(a)           As security for the due and punctual payment and performance by Guarantor and the Company of all the Guaranteed Obligations, Guarantor hereby pledges and assigns to Secured Party, for its benefit and grants to Secured Party, for its benefit, a continuing first priority security interest in and lien on, the Collateral and all of Guarantor’s right, title and interest in and to the Collateral.

(b)           Guarantor (x) has delivered to Escrow Agent (as defined below) for the benefit of Secured Party all certificates representing the Collateral described in clause (i) of the definition of Collateral, and (y) will deliver to Escrow Agent for the benefit of Secured Party, all certificates representing the Collateral described in clauses (ii) and (iii) of the definition of Collateral within five (5) Business Days after Guarantor’s acquisition of such Collateral, in each case registered in the name of Guarantor, duly endorsed in blank or accompanied by a stock power duly executed by Guarantor in blank, in form and substance satisfactory to Secured Party in its reasonable judgment, with any and all documents necessary to cause Secured Party, for its benefit to have a good, valid and perfected continuing first priority pledge of and lien on the Collateral (free and clear of any other liens), including, without limitation, any necessary notations in the corporate or other records books of the Company.  At any time following the occurrence and continuation of an Event of Default, at the option of Secured Party, the Collateral or any part thereof may be registered in the name of Secured Party or its nominees, for its benefit, and Guarantor covenants that, following the occurrence and continuation of an Event of Default, upon demand by Secured Party, Guarantor shall, and shall use his reasonable best efforts to cause the Company to, effect such registration.

(a)            So long as no Event of Default has occurred, is continuing, would result therefrom or be caused thereby, subject to the terms of this Agreement, Guarantor shall be entitled to (i) exercise all voting and/or consensual rights and powers relating to the Collateral, and (ii) receive and retain cash dividends and/or distributions payable on the Collateral.

(b)           Guarantor shall execute and deliver (or cause to be executed and delivered) to Secured Party such proxies, powers of attorney, dividend orders and other instruments as such other party may request for the purpose of enabling it to exercise the voting and/or consensual rights and powers that it is entitled to exercise pursuant to this Agreement and/or to receive the dividends that it is authorized to receive and retain pursuant to this Agreement.

(c)           Upon the occurrence and continuation of an Event of Default, all rights of Guarantor to exercise voting and/or consensual rights and powers and/or to receive dividends that Guarantor is entitled to exercise and/or receive pursuant to this Section 3.2 shall cease immediately upon receipt of notice by Guarantor from Secured Party, and all such rights thereupon shall become vested solely and exclusively in Secured Party, for its benefit automatically without any action by any Person.  Guarantor hereby appoints Secured Party, its attorney-in-fact, with full power of substitution, which