OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING ORDINARY SHARES
OF
B.V.R. SYSTEMS (1998) LTD.
AT
$0.18 PER SHARE
BY
CHUN HOLDINGS LTD.,
A CORPORATION CONTROLLED
BY
AVIV TZIDON,
AERONAUTICS DEFENSE SYSTEMS LTD.
AND
ITS TECHNOLOGIES PTE. LTD.
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON DECEMBER 23, 2003, UNLESS THE OFFER IS EXTENDED.
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November 21, 2003
To Our Clients:
Enclosed for your consideration is the Offer to Purchase, dated November
21, 2003 (the "Offer to Purchase"), and the related Letter of Transmittal
(which, as they may be amended and supplemented from time to time, together
constitute the "Offer") relating to the offer by Chun Holdings Ltd., a
corporation organized under the laws of Israel and controlled by Aviv Tzidon,
Aeronautics Defense Systems Ltd. and iTS Technologies Pte. Ltd., (the
"Purchaser"), to purchase all outstanding ordinary shares (the "Shares"), par
value NIS 1.0 per share, of B.V.R. Systems (1998) Ltd., a company organized
under the laws of Israel (the "Company"), at a price of $0.18 per Share,
without interest thereon, upon the terms and subject to the conditions set
forth in the Offer. Holders of Shares whose certificates evidencing such Shares
(the "Share Certificates") are not immediately available or who cannot deliver
their Share Certificates and all other required documents to American Stock
Transfer & Trust Company as depositary (the "Depositary") or complete the
procedures for book-entry transfer prior to the Expiration Date (as defined in
the Offer to Purchase) must tender their Shares according to the guaranteed
delivery procedures set forth in the Offer to Purchase.
We also are enclosing an Opposition Notice and a Notice of Guaranteed
Delivery for Shares. Under the Israeli Companies Law, the holders of Shares
have an opportunity to state whether they accept or oppose the Offer. By
tendering Shares, a shareholder will state that the shareholder accepts the
Offer for these purposes. If a shareholder wishes to oppose the Offer, the
shareholder must complete and sign this Opposition Notice. The Notice of
Guaranteed Delivery for Shares is to be used to accept the Offer if neither of
the two procedures for tendering Shares set forth in the Offer to Purchase can
be completed on a timely basis.
WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF THE SHARES HELD BY US
FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES, AND A VOTE ON THE OFFER, CAN BE MADE
ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE
LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT
BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
Accordingly, we request instruction as to whether you wish to have us
tender on your behalf any or all of the Shares held by us for your account
pursuant to the terms and conditions set forth in the Offer, and vote on your
behalf on the Offer.
Please note the following:
1. The tender price is $0.18 per Share, in cash, without interest thereon,
as set forth in the Introduction to the Offer to Purchase.
2. The Offer is subject to the condition that a minimum number of Shares
must be tendered, and not withdrawn, as of the Expiration Date.
3. The Offer is being made for all of the Shares.
4. Tendering holders of Shares will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the Letter
of Transmittal, transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer. However, backup withholding at a rate of 28% may be
required, unless an exemption is provided or unless the required taxpayer
identification information is provided. See Instruction 9 of the Letter of
Transmittal.
The bidder group will in general be required to withhold Israeli tax at
source from the consideration paid to the tendering shareholders, unless a
shareholder possesses a valid and applicable certificate of exemption or unless
a ruling from the Israeli Income Tax Authorities determines otherwise. The rate
of withholding will be 1% of the consideration if the payment is effected on or
before December 31, 2003 or 15% of the real capital gain, if any, from the sale
of the Shares if the payment is effected on January 1, 2004 or thereafter.
5. The Offer and withdrawal rights will expire at 5:00 p.m., New York City
time, on December 23, 2003 unless the Offer is extended.
6. Notwithstanding any other provision of the Offer, payment for Shares
accepted for payment pursuant to the Offer will in all cases by made only after
timely receipt by the Depositary of:
(i) Share Certificates pursuant to the procedures set forth in "The
Offer--Procedure for Tendering Shares" of the Offer to Purchase,
or a timely Book-Entry Confirmation (as defined in the Offer to
Purchase) with respect to such Shares,
(ii) the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature
guarantees, or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry transfer, and
(iii) any other documents required by the Letter of Transmittal.
Accordingly, payment may not be made to all tendering Holders at
the same time depending upon when Share Certificates are actually
received by the Depositary.
It is a condition of the Offer that the number of Shares stated to accept
the Offer is a majority among the total Shares stated, not taking into account
Shares held by any controlling shareholder of B.V.R. Systems and their
affiliates and Shares held by the bidder group or by persons acting on its
behalf.
If you wish to have us tender any or all of the Shares held by us for your
account please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth herein. If you authorize the tender of
your Shares, all such Shares will be tendered unless otherwise specified below.
An envelope to return your instructions to us is enclosed. YOUR INSTRUCTIONS
SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR
BEHALF PRIOR TO THE EXPIRATION DATE.
The Purchaser is not aware of any state or jurisdiction where the making
of the Offer is prohibited by administrative or judicial action pursuant to any
valid statute. If the Purchaser becomes aware of any valid statute prohibiting
the making of the Offer or the acceptance of Shares pursuant thereto, the
Purchaser will make a good faith effort to comply with such statute or seek to
have such statute declared inapplicable to the Offer. If, after such good faith
effort, the Purchaser cannot comply with such statute, the Offer will not be
made to (nor will tenders be accepted from or on behalf of) the holders of
Shares in such state or jurisdiction.
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INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING ORDINARY SHARES
OF
B.V.R. SYSTEMS (1998) LTD.
The undersigned acknowledge(s) receipt of your letter, the enclosed Offer
to Purchase, dated November 21, 2003, and the related Letter of Transmittal
(which, as they may be amended and supplemented from time to time, together
constitute the "Offer") in connection with the offer by Chun Holdings Ltd., a
corporation organized under the laws of Israel and controlled by Xxxx Xxxxxx,
Aeronautics Defense Systems Ltd. and iTS Technologies Pte. Ltd. (the
"Purchaser"), to purchase all outstanding ordinary shares (the "Shares"), par
value NIS 1.0 per share, of B.V.R. Systems (1998) Ltd., a company organized
under the laws of Israel (the "Company"), at a price of $0.18 per Share, in
cash, without interest thereon upon the terms and subject to the conditions set
forth in the Offer.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
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Number of Shares to be tendered*
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Signature(s)
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Please print name(s)
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Print Address(es)
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Area Code and Telephone Number(s)
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Taxpayer Identification or Social Security Number(s)
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* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
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