GERMAN MANUFACTURER OF SUBMARINES AND SHIPS TO COMMITS TO NIS 700 MILLION
RECIPROCAL PURCHASING AGREEMENT WITH ISRAELI INDUSTRY, TO REALIZE PAST
COMMITMENTS AND TO EXAMINE ESTABLISHING A MANUFACTURING FACILITY IN ISRAEL

Israel and Germany signed an agreement this week for the purchase of four
corvettes for the Israeli Navy * German Delegation to Israel – including
naval officers, senior Defense Ministry officials and representatives of
ship manufacturer TKMS – ThyssenKrupp – arrived in Israel for signing
ceremony * As part of deal, TKMS made commitment with Division for Foreign
Investment and Industrial Cooperation at The Israeli Ministry of Economy for
reciprocal purchasing, including direct investment in Israeli industry of
NIS 700 million

JERUSALEM – 12th May 2015 – ThyssenKrupp is a multi-disciplinary concern in
the metal production sector. The group produces metal (40%), parts for the
auto industry, establishes chemical plants, manages the TKMS shipyard and is
involved in other activities. The company employs 160,000 people around the
world, 60% of them outside Germany. The company's revenue for 2014 stood at
€40 billion. The company invests about €1 billion annually in R&D, half in
projects outside Germany.

In 2006, the Israeli government signed a deal with the German manufacturer
to purchase dolphin-type submarines. Following the transaction, TKMS
committed to a reciprocal purchasing agreement worth 40% of the Israeli
financing in the deal, totaling NIS 1.8 billion (reciprocal purchasing worth
NIS 740 million). An examination by the Division for Foreign Investment and
Industrial Cooperation at The Israeli Ministry Of Economy showed that until
now, the company has not fully realized this commitment.

In light of this, the division demanded - even at early stages of the
negotiations - to discuss widening the company’s reciprocal purchasing
agreements and its future commitments in the framework of the new deal.

Director of the Division for Foreign Investment and Industrial Cooperation
at The Israeli Ministry Of Economy, Ms. Ziva Eger, was determined to fully
realize the existing commitment, to create a larger commitment from the
company for reciprocal purchasing in Israel and to redirect some of the
commitment expressly toward direct investment in Israeli industry. This, to
maximize the gain for the Israeli economy and the local labor market.

As part of the outline agreement with the company, the following was
achieved:

* TKMS committed to a reciprocal purchasing agreement worth 50% of the new
deal - c. NIS 700 million; this in comparison to the previous commitment in
which reciprocal purchasing agreement stood at 40%.

* The Division for Foreign Investment and Industrial Cooperationand TKMS
will jointly examine the viability of jointly investing in research and
development, establishing a manufacturing facility and converting some of
the reciprocal purchasing commitment to capital investment; this in
comparison to the previous deal in which TKMS committed to a reciprocal
purchasing agreement only.

Director of the Division for Foreign Investment and Industrial Cooperation
at The Israeli Ministry Of Economy, Ms. Ziva Eger said: "The Israeli
Ministry of Economy, with the backing and cooperation of the Israeli
Ministry of Defense and the Israeli Navy, managed to bring to the
negotiating table a draft that turns defense acquisitions into cooperative
ventures and economic development. Expanding the economic activity of TKMS
in Israel is a breakthrough in trade, economic and research cooperation
between the countries. We operate according to the policy set by the
ministry to encourage small and medium-sized factories and to strengthen
Israel’s peripheral communities. The cooperation with TKMS is an example of
the importance of reciprocal purchasing agreements for the Israeli economy."

Director General of the Israeli Ministry of Economy, Mr. Amit Lang said:
"The Israeli expenditure on national security injects money into Israeli
industry. We have begun a move that turns a standing commitment into direct
investment in Israeli industry, based on a detailed plan with a set
timetable. This is excellent news for Israeli industry and for the Israeli
job market. It also shines a positive light on Israel's economic and
security cooperation with Germany, countries marking 50 years of diplomatic
relations this year."