Israel Shipyards Industries Ltd.

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("the Company")

February 4, 2026

Tel Aviv Stock Exchange Ltd.

The Securities Authority

www.isa.gov.il

www.tase.co.il

Subject: Engagement of a subsidiary in an agreement for the supply of vessels and various services

The Company is honored to announce that Israel Shipyards Ltd., a subsidiary of the Company ("the Subsidiary"), has entered into an agreement regarding the supply of vessels and various services from the Subsidiary ("the Vessels" and "the Agreement", respectively) for a foreign government customer. 1

The terms of the transaction are described below:

1. The Subsidiary will supply four vessels for a sum of approximately \$62 million ("the Consideration").
1. In addition to the vessels, the Subsidiary will perform knowledge transfer to the customer for the purpose of assembling some of the vessels in the customer's country, as well as training for customer representatives regarding the assembly of the vessels in the customer's country, their operation, and maintenance.
1. The vessels will be supplied to the customer within a period of 36 months.
1. In accordance with the terms of the transaction, a down payment was paid to the Subsidiary in an amount equal to 5% of the Consideration, for which and as a condition for its payment, the Subsidiary provided a down payment guarantee in an amount equal to 5% of the Consideration and a performance guarantee in an amount equal to 10% of the Consideration. The remaining Consideration will be paid to the Subsidiary in payments based on agreed milestones.
1. The Subsidiary has undertaken to provide the customer with a warranty for the vessels and to provide a warranty guarantee in an amount equal to 10% of the Consideration, for a period of 12 months from the date of delivery.
1. The Agreement includes a series of terms and conditions common in agreements for the supply of military equipment to foreign customers, obtaining export permits, intellectual property protection, confidentiality, cancellation of the agreement, and the like.
1. The profitability rate of the project does not deviate from the average profitability rate in the field of activity.

Sincerely,