Pursuant to the Securities Regulations (Periodic and Immediate Reports), 5730 – 1970, the Company hereby gives notice of the convening of an extraordinary general meeting of the Company's shareholders to be held on Monday March 8, 2010 at 11:00 a.m. at the Company's offices at 2 Azrieli Center (the triangular building, 27th floor), in Tel Aviv.

Agenda and main points of the proposed resolution:

Approval of the transaction to acquire a run off policy for the Company's officers' liability insurance (hereinafter: "the Transaction").

To confirm that the Company's current directors' and officers' liability insurance policy will convert to a run off policy and this as of the date of transfer of control from Ap.Sab.Ar. Holdings Ltd. to 012 Smile Telecommunications Ltd. (if and when such transfer of control will be effected). The run off policy will cover the liability of directors and officers (including those who are or may be deemed as controlling shareholders in the Company) who shall serve in the Company and in companies in which the Company holds 50% or more, officers acting on behalf of the Company in companies in which the Company holds less than 50%, and senior employees who are not officers, with respect to administration duties carried out by them, and this by the date of the transfer of control as aforesaid, and under the following terms and conditions:

A. Insurance period – seven years commencing from the date of transfer of control in the Company as aforesaid.

B. Scope of insurance cover – the liability margin of the current policy will be reduced when it converts to a run off policy (as aforesaid), so that it shall not exceed US$ 50 million (per claim and in total per insurance year), with the addition of up to US$ 10 million (per claim and in total per insurance year) for legal costs in Israel alone. Limit of liability for the subsidiaries – half of the foregoing amount (as part of the aforesaid liability margin).

C. Premium for the entire insurance period – shall not exceed US$ 380,500 (lump sum paid in advance).

Majority required to pass the resolutions:

Pursuant with regulation 1B(5) of the Companies Regulations (Relief for Transactions with Interested Parties), 5760-2000 (hereinafter: "the Relief Regulations") a resolution pertaining to the approval of a transaction for an insurance policy as aforesaid shall pass approval of the Company's shareholders by a regular majority of the shareholders present and voting at the general meeting, since the aforesaid insurance terms and conditions with respect to officers in the Company who may be deemed as controlling shareholders in the Company or a relative of a controlling shareholder are the same as the insurance terms and conditions that the rest of the directors and officers of the Company are entitled to, the terms of the transaction are the market terms and are not liable to materially affect the Company's profitability, assets or liabilities.

Pursuant to regulation 1C of the Relief Regulations, a) the relieve under regulations 1 through 1C shall not apply for a public company if one or more shareholders holding a minimum of one percent of the issued share capital or of the voting rights in the Company gives notice of their objection to the foregoing relief, provided that the objection is submitted to the Company in writing no later than fourteen days from the date on which the Company issues a public report in accordance with the Securities Law pertaining to the passing of the resolution or from the date on which an amendment to said report is issued; b) the objection is submitted as stipulated in subsection (A) claiming that the transaction is approved according to the provisions of section 273 or 275 of the Companies Law 5759-1999, accordingly, and in such event, the Company will act to update the notifications for the convening the general meeting for approving the resolution stipulated in accordance with Securities Regulations (Transaction between a Company and its Controlling Shareholder), 5761-2001.

It is hereby noted that the Company's audit committee and board of directors have consented (in accordance with section 1(3) of the Relief Regulations) that upon conversion of the current insurance policy to a run off policy as set forth above, the Company will take out a new directors' and officers' liability insurance policy for which the insurance coverage amounts shall be the same as stated in section B above (and lower than the insurance coverage amounts of the current policy). For a report pertaining to this resolution see the immediate report that will be published shortly following the publication of this report.

Linor Yochelman, Adv. January 31, 2010 Company secretary