TAT Credit Line Agreement





                              CREDIT LINE AGREEMENT

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



This Credit Line Agreement (the "Agreement") is made as of the 15th day of June,

2004 BY AND BETWEEN



(1) TAT  Technologies  Ltd. (the  "Company"),  an Israeli public company,  whose

shares are traded on Nasdaq, having its registered office at the Industrial Zone

Yasur, Gedera, Israel; and



(2) TA-TOP, Limited Partnership ("TATOP")  (Registration Number:  550216964),  a

limited  partnership  wholly  owned by (x) TA-TEK Ltd.,  the General  Partner of

TATOP, an Israeli private company,  wholly owned by FIMI Opportunity Fund, L.P.,

a limited partnership formed under the laws of the State of Delaware, and by (y)

FIMI  Israel  Opportunity  Fund,  Limited  Partnership,  a limited  partnership,

registered in Israel (the "Opportunity Fund").



                                     RECITAL

                                     -------



WHEREAS, the Company has requested that TATOP make available to the Company, and

TATOP has agreed to make available to the Company, a line of credit (the "Credit

Line"),  all upon the terms and  conditions  more fully set forth herein,  which

Credit Line shall come into effect as of the Closing (as such term is defined in

that certain Share Purchase  Agreement (the "SPA"))  entered into by the Company

and TATOP on the date hereof).



     THEREFORE, in consideration of the foregoing, the parties,  intending to be

legally bound, agree as follows:



1.   CREDIT LINE

     -----------



Upon the terms and subject to the  conditions set forth in this Agreement and on

the basis of the  representations  and  warranties  set forth in the SPA  (which

representations  and  warranties  shall  survive the Closing and shall remain in

effect  until the  second  anniversary  of the  Closing on which date they shall

expire and be of no force and effect for all intents and purposes, including for

the purpose of this  Agreement.  TATOP agrees to make  available to the Company,

effective  as of the  Closing  Date (as such term us  defined  in the SPA),  the

Credit Line, all upon the following terms and conditions:



     (i)  General.  The  aggregate  amount of Credit Line  provided by TATOP and

available  to be drawn upon by the Company  shall be US$2  million  (the "Credit

Amount").



     (ii) Single  Installment.  The Company shall be entitled to draw any amount

up to the Credit Amount in a one-time single installment. The amount to be drawn

(the "Loan"),  shall be in the amount set forth in the Disbursement  Request (as

defined  below)  and shall be  delivered  to TATOP,  against  the  receipt  of a

non-assignable  note (the "Note")  executed by the Company to the order of TATOP

only, in the form attached hereto as Exhibit A.









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                                        2





TAT Credit Line Agreement





Notwithstanding  anything to the  contrary  contained  herein,  no amount may be

drawn on the Credit Line if: (a) one or more of the Events of Default  described

in Section  3(a) below has  occurred;  or (b) the average  closing  price of the

Company's  Ordinary  Shares as recorded  on the Nasdaq  over the 90  consecutive

trading days prior to the Request Date (as defined below) is lower than US$5.00,

or (c) the closing  price of the  Company's  Ordinary  Shares as recorded on the

NASDAQ at any time during the 30  consecutive  trading days prior to the Request

Date is lower than US$2.06.



For the  avoidance  of  doubt,  it is  hereby  underlined  that  this  Agreement

constitutes a binding and,  except as expressly  set forth  herein,  independent

obligation (including, but not limited to, the obligation to provide the Loan at

the request of the Company in  accordance  with the terms  contained  herein) of

TATOP enforceable against TATOP, and shall not be affected by whether or not, at

any time, TATOP holds any shares of the Company or the circumstances  (including

in the financial markets) will be changed for any reason. TATOP. may not set off

or hold the Credit Amount for any reason.



     (iii) Disbursement Request. The Loan shall be made available to the Company

by no later than 14 business days  following the date on which TATOP  receives a

written  disbursement  request (the  "Disbursement  Request")  from the Company,

which  request  shall state the amount  which the Company  elects to borrow from

TATOP,  provided that such amount shall not be less than  US$1,000,000 and shall

not exceed the Credit  Amount.  The date on which such  Disbursement  Request is

delivered to TATOP shall be referred to herein as the "Request Date".



The Disbursement Request may be delivered to TATOP by no later than 14 business

days prior to the termination of the Availability Period (as defined below).

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