BATM Advanced Communications Ltd. — Proxy Solicitation & Information Statement 2011

Feb 7, 2011

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to any aspect of the proposals referred to in this document or as to the action you should take, you should seek your own advice from a stockbroker, solicitor,

accountant, or other professional adviser.

If you have sold or otherwise transferred all of your shares, please pass this document together with the accompanying documents to the purchaser or transferee, or to the person who arranged the sale or transfer so they can pass these documents to the person who now holds the shares.

BATM Advanced Communications Ltd. (incorporated and registered in Israel under number 52-0042813)

NOTICE OF EXTRAORDINARY GENERAL MEETING

International H.Q.

Industrial Center Kfar Netter, P.O. Box 3737

52-0042813 - Registered in Israel

Chairman's letter

February 7, 2011

Dear Shareholder

Extraordinary general meeting

I am pleased to enclose the notice to the extraordinary general meeting of the company to be held at the offices of Singer Capital Markets Limited, 1 Hanover Street, London, W1S 1YZ on 9 March 2011 at 11.00 am. The purpose of this meeting is two fold. Under the requirements of the laws of the State of Israel there must be at least two external directors and following the resignation of Roger Lacey in November it is necessary to appoint an additional external director at this time in order to approve the annual report for 2010 and not to wait for the next annual general meeting to be held later on this year.

At the same time, the Chief Executive's employment agreement has come to an end and as such there is a necessity to enter into a new contract of employment. As it is a requirement of the laws of the State of Israel that any such employment agreement is authorised by the members in general meeting, this is being brought to the vote of the members of the company at this time. As the contract of employment has expired this cannot be held over until the annual general meeting and hence is being brought to the extraordinary general meeting to be held next month.

Recommendation

The directors of the company consider that all such proposals to be considered at the extraordinary general meeting are in the best interests of the company and its members as a whole and are most likely to promote the success of the company for the benefit of its members as a whole.

The directors unanimously recommend that you vote in favour of all the proposed resolutions as they intend to do so in respect of their own beneficial holdings to the extent that they have any.

Yours sincerely,

Peter Sheldon Chairman

Notice of the Extraordinary General Meeting of the company to be held at the office of Singer Capital Markets Limited, One Hanover Street, London W1S 1YZ on 9 March 2011 at 11.00 is set out at the end of this circular.

Whether or not you propose to attend the Extraordinary General Meeting, please complete and submit a proxy form in accordance with the instructions printed on the enclosed form. The proxy form must be received not less than 48 hours before the time fixed for the Meeting. In the case of holders of depositary interests representing shares in the company the form of direction must be received not less than 72 hours before the time fixed for the meeting.

Resolutions:

• $1$ To elect Dr. Amiram Mel to the Board as an additional external director of the company for a period of three years.
• Note: This resolution is being proposed following a resolution of the audit committee and the company's board of directors that Dr. Amiram Mel be appointed as an additional external director of the company (see explanatory notes in Appendix 1). A resume of Dr. Mel can be found in Appendix 2.
• To approve the renewal of the Chief Executive, Dr. Zvi Marom's employment agreement $2.$ for an additional fixed period of three years from January 2, 2011.
• Note: The terms of his renewed employment agreement are similar to those of his current agreement, subject to certain changes, negotiated by the Company's new Remuneration Committee, for which approval is requested as set out in Appendix 3 to this notice.

Dated: February 7, 2011	By order of the Board
	Dr. Zvi Marom, Director
	Chief Executive Officer

Company number: 520042813

Bldg. 1 Kfar Netter Industrial Center, Kfar Netter 40593, Israel Registered office:

Notes:

• Only those members registered on the company's register of members at: $1.$
• $1.1$ 6.00 pm UK time on March 7, 2011; or
• if this meeting is adjourned then at 6.00 pm UK time on the day two days prior to $1.2$ the adjourned meeting,

shall be entitled to vote at the meeting.

Any member entitled to attend and vote at the meeting may appoint one or more proxies to 2. attend and on a poll to vote instead of that member. A proxy need not be a member of the company. The completion of a form of proxy will not prevent a member from attending and voting at the meeting. In order to be valid, proxy forms must be lodged at either Capita Registrars PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU or at the registered office of the company in Israel marked for the attention of the CFO not

less than 48 hours prior to the meeting. A form of proxy appears on the following page.

• In the case of joint holders, where more than one of the joint holders purports to appoint a 3 proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the company's register of members in respect of the joint holding (the first-named being the most senior).
• $\overline{4}$ . To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut-off time for receipt of proxy appointments (see above) also apply in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence.
• In the case of holders of depositary interests representing shares in the company, a form of 5. direction must be completed in order to direct Capita IRG Trustees Limited, the Depositary, to vote on the holder's behalf at the meeting (in person or by proxy) or, if the meeting is adjourned, at the adjourned meeting. In order to be effective, a completed and signed form of direction (and any power of attorney or other authority under which it is signed) must be delivered to Capita Registrars, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU by no later than 72 hours before the time fixed for the meeting or any adjourned meeting. A form of direction appears on the penultimate page of this notice.
• 1. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the Meeting in person, your proxy appointment will automatically be terminated.
• As at 11.00 a.m on 7th of February 2011, the company's issued share capital 7. comprised 402,830,820 ordinary shares at 0.01 NIS each. Each ordinary share carries the right to one vote at a general meeting of the company and, therefore, the total number of voting rights in the company as at 11.00 a.m. on February 7, 2011 is 402,830,820.
• If you do not have a proxy form or form of direction and believe that you should have one, 8. or if you require additional forms, please contact Capita Registrars Limited on 0871 664 0300 if calling from the UK (calls cost 10p per minute plus network extras Lines are open Monday - Friday, 8:30am - 5.30pm) or 44 208 639 33 99 if calling from outside the UK.
• 1. You may not use any electronic address provided either:
• $9.1$ in this notice of annual general meeting; or
• any related documents (including the chairman's letter and proxy form) 9.2

to communicate with the company for any purposes other than those expressly stated.

APPENDIX 1

External directors

The external director will receive as remuneration during the three year term, an annual director's fee and a "per meeting" participation fee as laid down in the Israeli Companies Regulations (Rules with respect to remuneration and expenses to external directors), 2000 which is currently 97,500 NIS per annum plus a per meeting participation fee which is currently 3,750 NIS.

Under section 245 (a) of the Israeli Companies Law, the duration of appointment as an external director is three years. Nominees for external directors must be appointed by a special vote of the shareholders' meeting which complies with one of the following conditions: (a) the majority vote in favour of the nominee shall comprise at least one third of all the shareholders which were present (in person or by proxy) at the vote who are not a controlling party (and the votes of those abstaining will not be counted); or (b) the aggregate number of those voting against the nominee shall not exceed one percent of the aggregate voting rights in the company.

APPENDIX 2

Resume of Dr. Amiram Mel

Amiram Mel is a former Chief Executive Officer of Logic Industries Ltd. Prior to Logic he was Group President North America for Amdocs Management Limited, a global leader of telecom billing systems, with responsibility for annual revenues of \$1.6B. He was Chief Executive Officer of Crystal Systems Solutions from 1996 to 1999 and led the company through an IPO and a second offering on the NASDAQ stock exchange.

Dr. Mel holds a Ph.D in Decision Sciences from the Wharton School of Business at the University of Pennsylvania and was an associate professor at the School of Business Administration at the Hebrew University of Jerusalem.

APPENDIX 3

Alteration in salary & benefits to Zvi Marom

(a) To approve an increase in the CEO's base salary from the current amount of US \$240,000 to \$260,000 annually; and (b) to approve granting the CEO 500,000 new options annually on the 15th of March of each year commencing from 15 March 2011, provided that the company has an EBITDA margin of at least 12% annually. Each lot of options will vest after 24 months from the grant date, provided that on the vesting date Zvi Marom is still in the employ of the company. The exercise price will be the then current market price of the share less ten percent; and (c) the CEO's entitlement to a bonus ("profit/earnings share") will remain as in his previous contract provided however that the aggregate bonus shall in no event exceed 4 times his annual salary.

Under section 275 (a) of the Israeli Companies Law, the adoption of this proposed resolution must comply with one of the following conditions: (a) the majority vote in favour of the resolution shall comprise at least one third of all the shareholders which were present (in person or by proxy) at the vote who are not an interested party to the resolution (and the votes of those abstaining will not be counted); or (b) the aggregate number of those voting against the nominee shall not exceed one percent of the aggregate voting rights in the company.

FORM OF PROXY

For use at the 2011 Extraordinary General Meeting of BATM Advanced Communications Limited (Company), convened for 9 March 2011at 11 a.m at the offices of Singer Capital Markets Limited, 1 Hanover Street, London, W1S 1YZ.

I/We ....................................

of ....................................

being a member of the Company hereby appoint .................................... meeting to act as my/our proxy and to vote for me/us as indicated below with an "X" at the Extraordinary General Meeting of the Company to be held on the above date (and at any adiournment thereof)

Date ... ... . . . . . . . . . . . . . . .

Signed ....................................

Please indicate how you wish to vote with an "X" in the appropriate box opposite each resolution. If no specific indication as to voting is given the proxy will vote or abstain in his direction as he will on any other matter as to arise at the meeting.

PROPOSED RESOLUTIONS

		FOR	AGAINST
1.	Election of Dr. A. Mel as a new external director
2.	To approve the alterations to the terms of employment of BATM's CEO Dr. Zvi Marom who is also a director of the Company, as described in appendix 3.

Notes:

• (a) This form of proxy to be valid must be deposited with Capita Registrars PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU or at the registered office of the Company not less than 48 hours before the time fixed for the meeting.
• (b) In the case of a corporation this proxy should be under its common seal, or if not so required under the hand of an officer duly authorised in writing.
• (c) in the case of joint holders the signature of any one of them will suffice but the vote of the senior who tenders a vote whether in person or by proxy will be accepted to the exclusion of the votes of the other joint holders and for the purposes seniority shall be determined by the order in which the names stand on the Company's register of members in respect of the joint holding.
• (d) Any alteration made in the form of proxy should be initialled.
• (e) If it is not desired to appoint the Chairman, the name of any other person(s) should be inserted in block letters in the space provided. A proxy need not be a member of the Company.