Offer to Purchase for Cash
by
Telesoft Corp.
of
Up to 2,300,000 Shares of its Common Stock
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THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, MARCH 6, 2000, UNLESS THE OFFER IS EXTENDED.
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To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated February
4, 2000, and the related Letter of Transmittal (which, as amended from time to
time, together constitute the "offer") setting forth an offer by Telesoft Corp.,
an Arizona corporation, to purchase up to 2,300,000 shares of its common stock
at a price not greater than $7.50 nor less than $7.00 per share, net to the
seller in cash, as specified by tendering stockholders, upon the terms and
subject to the conditions of the offer. Also enclosed herewith is certain other
material related to the offer, including a letter to stockholders from Michael
F. Zerbib, President and Chief Executive Officer of Telesoft.
Telesoft will determine a single per share price (not greater than $7.50
nor less than $7.00 per share) that it will pay for the shares validly tendered
pursuant to the offer and not withdrawn (the "Purchase Price"), taking into
account the number of shares so tendered and the prices specified by tendering
stockholders. Telesoft will select the lowest Purchase Price that will allow it
to purchase 2,300,000 shares (or such lesser number of shares as are validly
tendered at prices not greater than $7.50 nor less than $7.00 per share) validly
tendered and not withdrawn pursuant to the offer. Telesoft will purchase all
shares validly tendered at prices at or below the Purchase Price and not
withdrawn, upon the terms and subject to the conditions of the offer, including
the provisions thereof relating to proration and conditional tenders. See
Sections 1 and 6 of the Offer to Purchase.
We are the holder of record of shares held for your account. As such, a
tender of such shares 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.
Please instruct us as to whether you wish us to tender any or all of the
shares held by us for your account, upon the terms and subject to the conditions
set forth in the Offer to Purchase and the Letter of Transmittal. Your attention
is directed to the following:
1. You may tender shares at either the price determined by you (in
multiples of $0.05), not greater than $7.50 nor less than $7.00 per share, or
the price determined by the "Dutch auction" tender process as indicated in the
attached Instruction Form, net to you in cash. You should mark the box entitled
"Shares Tendered at Price Determined by Dutch Auction" if you are willing to
accept the Purchase Price resulting from the Dutch auction tender process. This
could result in your receiving the minimum price of $7.00 per share.
2. The offer is for up to 2,300,000 shares. Although Telesoft has no
present intention of doing so, Telesoft reserves the right, in its sole
discretion but subject to certain applicable legal requirements, to purchase
more than the 2,300,000 shares pursuant to the offer. The offer is not
conditioned on any minimum number of shares being tendered. The offer is,
however, subject to certain other conditions set forth in Section 7 of the Offer
to Purchase.
3. The offer, proration period and withdrawal rights will expire at 12:00
Midnight, New York City time, on Monday, March 6, 2000, unless the offer is
extended. Your instructions to us should be forwarded to us in ample time to
permit us to submit a tender on your behalf.
4. As described in the Offer to Purchase, if more than 2,300,000 shares
have been validly tendered at or below the Purchase Price and not withdrawn
prior to the Expiration Date, as defined in Section 1 of the Offer to Purchase,
Telesoft will purchase shares in the following order of priority:
a. all shares validly tendered at or below the Purchase Price and
not withdrawn prior to the Expiration Date by any stockholder who owns
beneficially an aggregate of less than 100 shares (excluding shares
attributable to individual accounts under the Telesoft Corp. Profit Sharing
Plan) who validly tenders all of such shares (partial tenders will not
qualify for this preference) and completes the box captioned "Odd Lots" in
the Letter of Transmittal and, if applicable, the Notice of Guaranteed
Delivery;
b. after purchase of all of the foregoing shares, all shares
conditionally tendered in accordance with Section 6 of the Offer to
Purchase, for which the condition was satisfied, and all other shares
tendered properly and unconditionally at prices at or below the Purchase
Price and not withdrawn prior to the Expiration Date on a pro rata basis as
described in Section 1 of the Offer to Purchase; and
c. if necessary to permit Telesoft to purchase 2,300,000 shares,
shares conditionally tendered, for which the condition was not initially
satisfied, at or below the Purchase Price and not withdrawn prior to the
Expiration Date, selected by random lot in accordance with Section 6 of the
Offer to Purchase.
5. Tendering stockholders will not be obligated to pay any brokerage
commissions or solicitation fees on Telesoft's purchase of shares in the offer.
Stockholders, however, may incur fees associated with the tendering of shares
held in custodial or other beneficiary accounts. Any stock transfer taxes
applicable to the purchase of shares by Telesoft pursuant to the offer will be
paid by Telesoft, except as otherwise provided in Instruction 7 of the Letter of
Transmittal.
6. If you wish to tender portions of your shares at different prices you
must complete a separate Instruction Form for each price at which you wish to
tender each portion of your shares. We must submit separate Letters of
Transmittal on your behalf for each price you will accept. You may not tender
the same shares at more than one price.
7. If you own beneficially an aggregate of fewer than 100 shares
(excluding shares attributable to individual accounts under the Telesoft Corp.
Profit Sharing Plan), and you instruct us to tender at or below the Purchase
Price on your behalf all such shares prior to the Expiration Date and check the
box captioned "Odd Lots" in the Instruction Form, all such shares will be
accepted for purchase before proration, if any, of the purchase of other
tendered shares.
8. You may instruct us to tender shares on your behalf subject to the
condition that a specified minimum number of your tendered shares must be
purchased if any such tendered shares are purchased, as described in Section 6
of the Offer to Purchase. It is your responsibility to calculate such minimum
number and you
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are urged to consult a tax advisor. If you wish us to make a conditional tender
on your behalf, you must complete the box captioned "Conditional Tenders" in the
Instruction Form.
Telesoft's Board of Directors has approved the offer. However, you must
make your own decision whether to tender shares and, if so, how many shares to
tender and the price or prices at which you are tendering your shares. Neither
Telesoft nor its Board of Directors makes any recommendation to any stockholder
as to whether to tender or refrain from tendering shares. See Section 10 of the
Offer to Purchase for information regarding the intentions of Telesoft's
directors and executive officers with respect to tendering shares pursuant to
the offer.
If you wish to have us tender any or all of your shares held by us for your
account upon the terms and subject to the conditions set forth in the Offer to
Purchase, please so instruct us by completing, executing and returning to us the
attached Instruction Form. An envelope to return your instructions to us is
enclosed. If you authorize tender of your shares, all such shares will be
tendered unless otherwise specified on the Instruction Form. Your instructions
should be forwarded to us in ample time to permit us to submit a tender on your
behalf prior to the expiration of the offer.
The offer is being made to all holders of shares. Telesoft is not aware of
any jurisdiction where the making of the offer is not in compliance with
applicable law. If Telesoft becomes aware of any jurisdiction where the making
of the offer is not in compliance with any valid applicable law, Telesoft will
make a good faith effort to comply with such law. If, after such good faith
effort, Telesoft cannot comply with such law, the offer will not be made to (nor
will tenders be accepted from or on behalf of) the holders of shares residing in
such jurisdiction. In any jurisdiction in which the securities or blue sky laws
require the offer to be made by a licensed broker or dealer, the offer is being
made on Telesoft's behalf by or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
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INSTRUCTION FORM
Offer to Purchase for Cash
by
Telesoft Corp.
of
Up to 2,300,000 Shares of its Common Stock
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated February 4, 2000, and the related Letter of Transmittal
(which, as amended from time to time, together constitute the "offer") in
connection with the offer by Telesoft Corp. to purchase up to 2,300,000 shares
of its common stock at a price not greater than $7.50 nor less than $7.00 per
share, net to the seller in cash, as specified by tendering stockholders, upon
the terms and subject to the conditions of the offer.
Telesoft will determine a single price (not greater than $7.50 nor less
than $7.00 per share), net to the seller in cash, that it will pay for shares
validly tendered and not withdrawn pursuant to the offer (the "Purchase Price"),
taking into account the number of shares so tendered and the prices specified by
tendering stockholders. Telesoft will select the lowest Purchase Price that will
allow it to purchase 2,300,000 shares (or such lesser number of shares as is
validly tendered at prices not greater than $7.50 nor less than $7.00 per share)
validly tendered and not withdrawn pursuant to the offer.
This will instruct you to tender to Telesoft the number of shares indicated
below (or, if no number is indicated below, all shares) that are held by you for
the account of the undersigned, at the price per share indicated below, upon the
terms and subject to the conditions of the offer.
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SHARES TENDERED
[ ] If fewer than all shares are to be tendered, please check this box and
indicate below the aggregate number of shares to be tendered by us.
shares
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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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ODD LOTS
(See Instruction 9 of the Letter of Transmittal)
[ ] By checking this box, the undersigned represent(s) that the undersigned
owns beneficially an aggregate of fewer than 100 shares (excluding shares
attributable to individual accounts under the Telesoft Corp. Profit Sharing
Plan) and is tendering all of such shares.
ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED
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CONDITIONAL TENDERS
(See Instruction 10 of the Letter of Transmittal)
A tendering stockholder may condition the tender of shares upon the
purchase by Telesoft of a specified minimum number of the shares tendered
hereby, all as described in the Offer to Purchase, particularly in Section 6
thereof. Except as set forth in Section 6 of the Offer to Purchase, unless at
least such minimum number of shares is purchased by Telesoft pursuant to the
terms of the offer, none of the shares tendered hereby will be purchased. It is
the tendering stockholder's responsibility to calculate and appropriately
indicate such minimum number of shares, and each stockholder is urged to consult
a tax advisor. Unless this box has been completed and a minimum number
specified, the tender will be deemed unconditional.
Minimum number of shares
that must be purchased,
if any are purchased: shares
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PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
(See Instruction 5 of the Letter of Transmittal)
IF THE UNDERSIGNED IS TENDERING SHARES AT MORE THAN ONE PRICE, THE
UNDERSIGNED MUST USE A SEPARATE INSTRUCTION FORM FOR EACH PRICE SPECIFIED.
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CHECK ONLY ONE BOX
IF YOU CHECK MORE THAN ONE BOX OR IF YOU DO NOT CHECK A BOX,
YOU HAVE NOT VALIDLY TENDERED YOUR SHARES.
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SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION
[ ] The undersigned wants to maximize the chance of having Telesoft Corp.
purchase all the shares the undersigned is tendering (subject to the
possibility of proration). Accordingly, by checking this box INSTEAD OF
ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders shares and
is willing to accept the Purchase Price resulting from the Dutch auction
tender process. This action could result in the undersigned receiving a
price per share as low as $7.00.
OR
SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER
By checking ONE of the boxes below INSTEAD OF THE BOX ABOVE, the undersigned
hereby tenders shares at the price checked. This action could result in none of
the undersigned's shares being purchased if the Purchase Price for such shares
is less than the price checked. If the undersigned desires to tender shares at
more than one price, the undersigned must complete a separate instruction form
for each price at which the undersigned is tendering shares. The undersigned
cannot tender the same shares at more than one price.
Price (In Dollars) per Share at Which the Undersigned Is Tendering the
Undersigned's Shares:
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[ ] $7.00 [ ] $7.20 [ ] $7.35
[ ] $7.05 [ ] $7.25 [ ] $7.40
[ ] $7.10 [ ] $7.30 [ ] $7.45
[ ] $7.15 [ ] $7.50
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THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE ELECTION AND RISK OF THE
TENDERING STOCKHOLDERS. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE DELIVERY.
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SIGN HERE
Signature(s):
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Name(s):
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(Please Print)
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(Taxpayer Identification or Social Security Number)
Address:
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(Including Zip Code)
Area Code and Telephone Number:
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Date: , 2000
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