FIRST AMENDED OFFER TO PURCHASE FOR CASH
ALL 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.

- --------------------------------------------------------------------------------
Our offer and withdrawal rights will expire at 5:00 p.m., New York City time, on
December 23, 2003 unless the offer is extended. Shares of B.V.R. Systems
tendered pursuant to our offer may be withdrawn at any time prior to the
expiration date.
- --------------------------------------------------------------------------------

OUR OFFER IS CONDITIONED ON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF OUR OFFER AT LEAST 48% OF
THE ISSUED AND OUTSTANDING SHARES OF B.V.R. SYSTEMS.

SUBJECT TO THOSE CONDITIONS, WE ARE OFFERING TO PURCHASE ALL OF THE
SHARES. HOWEVER, DEPENDING ON THE NUMBER OF SHARES TENDERED, THE NUMBER THAT WE
MAY ACCEPT MAY BE LIMITED BY LAW, AS FOLLOWS:

o IF MORE THAN 95% OF THE OUTSTANDING SHARES ARE TENDERED, WE WILL
PURCHASE ALL SHARES TENDERED.

o IF MORE THAN 90% BUT NOT MORE THAN 95% OF THE OUTSTANDING SHARES
ARE TENDERED, IN ORDER TO COMPLY WITH SECTION 337(B) OF THE
ISRAELI COMPANIES LAW, WE WILL PURCHASE 90% OF THE OUTSTANDING
SHARES, PRO RATA FROM ALL OF THE TENDERING SHAREHOLDERS. IF THIS
WOULD RESULT IN THE PURCHASE OF A FRACTIONAL NUMBER OF SHARES, WE
WILL PURCHASE, PRO RATA, THE GREATEST NUMBER OF WHOLE SHARES THAT
IS LESS THAN 90% OF THE OUTSTANDING SHARES.

o IF LESS THAN 90% OF THE OUTSTANDING SHARES ARE TENDERED, WE WILL
PURCHASE ALL SHARES TENDERED.

WE CURRENTLY DO NOT OWN ANY SHARES. OUR OFFER IS NOT CONDITIONED ON THE
AVAILABILITY OF FINANCING. OUR OFFER IS SUBJECT ONLY TO THE CONDITIONS SET FORTH
IN THIS DOCUMENT. PLEASE READ SECTION 15, WHICH SETS FORTH IN FULL THE
CONDITIONS TO OUR OFFER.

---------------------------------

IMPORTANT

If you want to tender all or any portion of your shares of B.V.R.
Systems, you should either (i) complete and sign the Letter of Transmittal (or
facsimile thereof) in accordance with the instructions in the Letter of
Transmittal, have your signature thereon guaranteed if required by Instruction 1
to the Letter of Transmittal, mail or deliver the Letter of Transmittal (or a
facsimile thereof) and any other required documents to American Stock Transfer &
Trust Company, our Depositary, and either deliver the certificates for your
shares to our Depositary or tender your shares pursuant to the procedures for
book-entry transfer; or (ii) request your broker, dealer, commercial bank, trust
company or other nominee to tender your shares for you. If your shares are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee, you must contact your broker, dealer, commercial bank, trust
company or other nominee to tender your shares. If you want to tender shares and
your certificates representing your shares are not immediately available, or you
cannot comply with the procedures for book-entry transfer on a timely basis, or
you cannot deliver all required documents to our Depositary prior to the
expiration of our offer, you may tender your shares by following the procedures
for guaranteed delivery set forth in "The Offer -- Procedure for Tendering
Shares."

o Under the Israeli Companies Law, all shareholders have an
opportunity to state whether they accept or oppose our offer. By
tendering your shares, you will state that you accept the offer
for these purposes. If you wish to oppose the offer, it is not
sufficient to refrain from tendering your shares. Instead, you
must complete and submit the enclosed notice card (the
"Opposition Notice"). We may complete this offer only if the
number of shares stated to accept our 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. See "The Offer -- Procedure for Tendering
Shares -- Special Purchase Offer Procedures."

o We generally must withhold an Israeli tax from the cash that we
pay to you, unless you possess 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% 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 or after January 1, 2004. We intend
to apply to the Israeli Income Tax Authorities in order to
receive a pre-ruling in connection with our withholding tax
obligations, with a view to receiving an exemption from
withholding with respect to certain categories of selling
shareholders, including foreign shareholders.

Questions and requests for assistance may be directed to our
Information Agent at the address and telephone numbers set forth on the back
cover of this document. Requests for additional copies of this document, the
Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer
materials may also be obtained from our Information Agent.

------------------------------------

THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE MERITS OR THE FAIRNESS OF SUCH
TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN
THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

----------------------------------

The Information Agent for our offer is:

Yigal Arnon & Co.
1 Azrieli Center
Tel-Aviv 67021
Israel
Attn.: Orly Tsioni
Telephone: 011-972-3-608-7842
Facsimile: 011-973-3-608-7713

The date of this first amended offer is December 8, 2003

TABLE OF CONTENTS

PAGE NUMBER

SUMMARY...........................................................................................................1

INTRODUCTION......................................................................................................6

THE OFFER.........................................................................................................8

Terms of Our Offer.......................................................................................8
Acceptance for Payment..................................................................................10
Procedure for Tendering Shares..........................................................................12
Withdrawal Rights.......................................................................................16
Material Tax Consequences...............................................................................17
Stock Listing; Price Range of Shares; Exchange Act Registration.........................................21
Certain Information Concerning B.V.R. Systems...........................................................21
Certain Information Concerning Us.......................................................................22
Source and Amount of Funds..............................................................................23
Dividends and Distributions.............................................................................24
Background of Our Offer.................................................................................24
Recommendation of B.V.R. Systems........................................................................25
Purpose of Our Offer; Plans for B.V.R. Systems; Effects of Our Offer....................................25
Israeli Companies Law, 1999; Rights of Shareholders in Our Offer........................................26
Conditions to Our Offer and Rights to Withdraw Our Offer................................................27
Certain Legal Matters...................................................................................28
Fees and Expenses.......................................................................................28
Miscellaneous...........................................................................................29

DIRECTORS AND EXECUTIVE OFFICERS OF CHUN HOLDINGS LTD...........................................................A-1
DIRECTORS AND EXECUTIVE OFFICERS OF AERONAUTICS DEFENSE SYSTEMS LTD ............................................A-2
DIRECTORS AND EXECUTIVE OFFICERS OF iTS TECHNOLOGIES PTE. LTD...................................................A-3

SUMMARY

We are providing this summary for your convenience. It highlights the
most material information regarding our offer, but you should realize that it
does not describe all of the details of our offer. We urge you to read this
entire document and the accompanying Letter of Transmittal because they contain
the full details of our offer. We have included references to the sections of
this document where a more complete discussion is set forth. If you have
questions or require assistance, contact our Information Agent at the address
and telephone number provided on the back cover of this document.

Who is offering to purchase my ordinary shares?

o We are Chun Holdings Ltd., an Israeli private company. We are offering to
purchase all of your ordinary shares of B.V.R. Systems. See Introduction
and "The Offer -- Certain Information Concerning Us."

o We are controlled by Aviv Tzidon, Aeronautics Defense Systems Ltd. and iTS
Technologies Pte. Ltd. Because they control us and helped to structure our
offer, our offer may be deemed to be made on behalf of these controlling
persons, and in this offer to purchase we refer to them and us collectively
as our "bidder group." Our bidder group currently does not own any
outstanding ordinary shares of B.V.R. Systems.

How much are you offering to pay and what is the form of payment?

o We are offering to pay $0.18 per share, in cash and without interest. See
"The Offer -- Terms of Our Offer."

How many ordinary shares will you purchase?

o We are offering to purchase all of the ordinary shares of B.V.R. Systems.
See "The Offer -- Terms of Our Offer."

Do you have enough financial resources to make payment?

o We have deposited in escrow an amount of cash, $1,918,958, which is
sufficient to pay for all of the outstanding shares. The funds deposited in
the escrow account are derived from cash on hand of the members of the
bidder group. See "The Offer -- Source and Amount of Funds."

Is your financial condition relevant to my decision to tender in your offer?

o Because the form of payment consists solely of cash and our offer is not
conditioned on any financing arrangement, we do not think that our
financial condition is relevant to your decision to tender your shares in
our offer.

How long do I have to decide whether to tender my shares in your offer?

o You may tender your ordinary shares until December 23, 2003, at 5:00 p.m.,
New York City time. If you are unable to deliver everything that is
required in order to make a valid tender by that time, you may be able to
use the guaranteed delivery procedure. See "The Offer -- Terms of Our
Offer" and "The Offer -- Procedure for Tendering Shares."

How will I be notified if you extend your offer?

o If we decide to extend our offer, we will issue a press release no later
than 9:00 a.m., New York City time, on the previously scheduled expiration
date. See "The Offer -- Terms of Our Offer."

Are there any conditions to your offer?

o Our offer is conditioned on, among other things, there being validly
tendered and not withdrawn prior to the expiration of our offer at least
48% of the issued and outstanding shares of B.V.R. Systems. See "The Offer
- Conditions to Our Offer and Rights to Withdraw Our Offer."

o Under the Israeli Companies Law, all shareholders have an opportunity to
state whether they accept or oppose our offer. By tendering your shares,
you will state that you accept the offer for these purposes. If you wish to
oppose the offer, it is not sufficient to refrain from tendering your
shares. Instead, you must complete and submit an Opposition Notice. We may
complete this offer only if the number of shares stated to accept our 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. See
"The Offer -- Procedure for Tendering Shares -- Special Purchase Offer
Procedures."

Is this tender offer part of a going private transaction?

o No. We may become the sole shareholder of B.V.R. Systems as a result of
this offer, but this offer is not regulated as a Rule 13e-3 "going private"
transaction because it will not have any of the effects specified in that
rule. A transaction is subject to regulation under Rule 13e-3 only if it
has a reasonable likelihood or purpose to:

o Cause a registered class of shares to be held of record by less than
300 persons, or

o cause a class of shares to be delisted or removed from certain
national exchanges or inter-dealer quotation systems.

Before we first approached B.V.R. Systems or commenced this offer, the
shares of B.V.R. Systems already were held of record by less than 300
persons, and already were quoted only on the pink sheets, which is not a
national quotation system covered by the rule. See "The Offer -- Background
of the Offer."

What does B.V.R. Systems' board of directors think of your offer?

o The board of directors of B.V.R. Systems has discussed the advisability of
our offer and has decided to recommend to the shareholders that they accept
our offer. See "The Offer -- Recommendation of B.V.R. Systems."

Are the shares traded or quoted on any market or quotation system?

o The shares were removed from the OTC Bulletin Board on October 13, 2003.
The shares sporadically are quoted on the pink sheets under the symbol
"BVRSF.PK."

What are the tax consequences of your offer?

o If you are a U.S. taxpayer, the receipt of cash for ordinary shares
pursuant to our offer will be a taxable transaction for U.S. federal income
taxation purposes. If you are an Israeli taxpayer, the receipt of cash for
shares pursuant to our offer is subject to taxation, although exemptions
may be available for some shareholders. Neither we nor B.V.R. Systems will
recognize taxable gain or loss as a result of this transaction. See "The
Offer -- Material Tax Consequences."

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 or after January 1, 2004. We intend to apply to the Israeli
Income Tax Authorities in order to receive a pre-ruling in connection with
our withholding tax obligations, with a view to receiving an exemption from
withholding with respect to certain categories of selling shareholders,
including foreign shareholders. See "The Offer--Material Tax
Consequences--Israeli Tax Consequences."

What are my appraisal rights?

o Under Section 338 of the Israeli Companies Law, if we complete our offer
and acquire the remaining shares of B.V.R. Systems through compulsory
acquisition, an Israeli court may, at the request of any shareholder who
sold shares to us, determine that the consideration paid for the shares was
less than the fair market value and decide that we should pay the fair
market value. . See "The Offer -- Israeli Companies Law, 1999; Rights of
Shareholders in Our Offer."

How do I tender my ordinary shares?

o To tender your ordinary shares, before the tender offer expires:

- If you hold physical share certificate(s), you must deliver your
share certificate(s) and a properly completed and duly executed
Letter of Transmittal to our Depositary at the address appearing
on the back cover of this document; or

- you must inform your broker of your decision to sell your shares
so that our Depositary receives a confirmation of receipt of your
tender by book-entry transfer; or

- you or your broker must comply with the guaranteed delivery
procedure.

Once I have tendered ordinary shares in your offer, can I withdraw my tender?

o You may withdraw your tender at any time before 5:00 p.m., New York City
time, on December 23, 2003 or, if we extend our offer, before 5:00 p.m.,
New York City time, on the date to which the offer is extended. Unless we
have previously purchased your shares, you may also withdraw your tender
after 5:00 p.m., New York City time, on January 20, 2004. See "The Offer --
Withdrawal Rights."

When will you pay for the ordinary shares I tender?

o We will pay you the purchase price for the shares we purchase promptly
after the expiration of our offer, or any extension of it.

Will I have to pay brokerage commissions if I tender my shares?

o If you are a registered shareholder and you tender your shares directly to
our Depositary, you will not incur any brokerage commissions. If you hold
shares through a broker or a bank, we urge you to consult your broker or
bank to determine whether any transaction costs are applicable.

Whom can I talk to if I have questions?

o If you are a shareholder B.V.R. Systems and you have questions about our
offer, you may call Adv. Orly Tsioni, of Yigal
Arnon & Co. at 011-972-3-608-7842.

To the Holders of Ordinary Shares of B.V.R. Systems (1998) Ltd.

INTRODUCTION

We, Chun Holdings Ltd., hereby offer to purchase all outstanding
ordinary shares of B.V.R. Systems (1998) Ltd., par value NIS 1.0 per share, at a
price of $0.18 per share, in cash, less any withholding taxes due, without
interest, upon the terms and subject to the conditions set forth in this
document and in the related Letter of Transmittal. Unless otherwise indicated
herein, all references to "U.S. Dollars," "dollars," "US$," "$" or "penny" are
to the currency of the United States and all references to "New Israeli Shekels"
or "NIS" are to the currency of Israel.

If you have shares of B.V.R. Systems registered in your own name and if
you tender directly to American Stock Transfer & Trust Company, our Depositary,
you will not be obligated to pay brokerage fees or commissions or, except as set
forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the sale
of shares pursuant to our offer.

We generally must withhold an Israeli tax from the cash that we pay to
you, unless you possess 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% 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 or after January 1, 2004. We intend to
apply to the Israeli Income Tax Authorities in order to receive a pre-ruling in
connection with our withholding tax obligations, with a view to receiving an
exemption from withholding with respect to certain categories of selling
shareholders, including foreign shareholders.

Moreover, if you fail to complete and sign the Substitute Form W-9
included in the Letter of Transmittal or Form W-8, Certificate of Foreign
Status, as applicable, you may be subject to U.S. federal backup withholding of
28% of the gross proceeds payable to you pursuant to our offer. We will pay all
fees and expenses of Yigal Arnon & Co., which is acting as our Information
Agent, and of our Depositary, incurred in connection with our offer. If you hold
shares through a bank or a broker, you should check whether they charge any
service fees. See "The Offer -- Fees and Expenses."

We are controlled by Aviv Tzidon, Aeronautics Defense Systems Ltd. and
iTS Technologies Pte. Ltd.

Mr. Tzidon has served as the chairman of the board of directors of
B.V.R. Systems since November 24, 2003, and also served as its chairman from the
time of its spin-off from B.V.R. Technologies Ltd. (in October 1998) until April
2000. See "The Offer -- Background of Our Offer" and Annex A.

Aeronautics Defense Systems Ltd. is an Israeli company that specializes
in the research, development, manufacturing and integration of advanced command,
control, computers, communications and intelligence systems in aerial, maritime,
and ground platforms and in providing services for government and commercial
customers.

iTS Technologies Pte. Ltd. is a Singapore registered private limited
company. The principal activities of iTS are those relating to IT professional
services and systems consultancy; including the development, marketing and
maintenance of advance simulation and training systems for defense and other
industries.

Because they control us and helped to structure our offer, our offer
may be deemed to be made on behalf of these controlling persons, and in this
offer to purchase we refer to them and us collectively as our "bidder group."
Our bidder group currently does not own any ordinary shares of B.V.R. Systems.

Our offer is subject to the condition that, as of the expiration time
of our offer, at least 48% of the issued and outstanding shares of B.V.R.
Systems must be validly tendered and not withdrawn. Our offer also is subject to
other conditions, which are described in "The Offer -- Conditions to Our Offer
and Rights to Withdraw Our Offer." Our offer is not conditioned upon obtaining
financing.

Subject to those conditions, we are offering to purchase all of the
shares. However, depending on the number of shares tendered, the number that we
may accept may be limited by law, as follows:

o If more than 95% of the outstanding shares are tendered, we
will purchase all shares tendered.

o If more than 90% but not more than 95% of the outstanding
shares are tendered, in order to comply with Section 337(b)
of the Israeli Companies Law, we will purchase 90% of the
outstanding shares, pro rata from all of the tendering
shareholders. If this would result in the purchase of a
fractional number of shares, we will purchase, pro rata, the
greatest number of whole shares that is less than 90% of the
outstanding shares.

o If less than 90% of the outstanding shares are tendered, we
will purchase all shares tendered.

The board of directors of B.V.R. Systems has discussed the advisability
of our offer and has decided to recommend to the shareholders that they accept
our offer.

THIS DOCUMENT AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION IS MADE
WITH RESPECT TO OUR OFFER.

THE OFFER
1. TERMS OF OUR OFFER.

Upon the terms and subject to the conditions of our offer, we will
accept for payment and pay for all shares of B.V.R. Systems validly tendered,
and not withdrawn, prior to the Expiration Date. The term "Expiration Date"
shall mean 5:00 p.m., New York City time, on December 23, 2003, unless and until
we shall have extended the period of time for which our offer is open, in which
event the term "Expiration Date" shall mean the latest time and date at which
our offer, as so extended by us, shall expire.

The purchase price for the ordinary shares will be $0.18 per share, in
cash and without interest. As of November 21, 2003, there were 10,660,874
ordinary shares of B.V.R. Systems issued and outstanding.

If any of those conditions shall not have been met or shall be
determined by us not to have been met prior to the Expiration Date, we reserve
the right (but we shall not be obligated), subject to complying with applicable
rules and regulations of the Securities and Exchange Commission, to:

o decline to purchase any of the shares tendered in our offer,
terminate the offer and return all tendered shares to the
tendering shareholders;

o waive any or all conditions to our offer and, to the extent
permitted by applicable law, purchase all shares validly
tendered;

o extend our offer, subject to applicable law, and, subject to
the right of shareholders to withdraw the shares until the
Expiration Date, retain the shares which have been tendered
during the period or periods for which our offer is
extended; or

o amend our offer.

Subject to those conditions, we are offering to purchase all of the
shares. However, depending on the number of shares tendered, the number that we
may accept may be limited by law, as follows:

o If more than 95% of the outstanding shares are tendered, we
will purchase all shares tendered.

o If less than 90% of the outstanding shares are tendered, we
will purchase all shares tendered.

Under the Israeli Companies Law, all shareholders have an opportunity
to state whether they accept or oppose our offer. By tendering your shares, you
will state that you accept the offer for these purposes. If you wish to oppose
the offer, it is not sufficient to refrain from tendering your shares. Instead,
you must complete and submit an Opposition Notice. We may complete this offer
only if the number of shares stated to accept our 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. See "The Offer -- Procedure for
Tendering Shares -- Special Purchase Offer Procedures."

If we waive a material condition to our offer, our offer will remain
open for at least five business days after the waiver. Any extension, amendment
or termination of our offer will be followed as promptly as practicable by
public announcement thereof. The announcement, in the case of an extension, will
be issued no later than 9:00 a.m., New York City time, on the previously
scheduled Expiration Date, in accordance with the public announcement
requirements of Rule 14d-4(d) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Without limiting our obligation under that Rule or
the manner in which we may choose to make any public announcement, we currently
intend to make announcements by issuing a press release to BusinessWire.

If we extend our offer, or if we (whether before or after our
acceptance for payment of the shares) are delayed in our purchase of, or payment
for, the shares or are unable to pay for the shares pursuant to our offer for
any reason, then, without prejudice to our rights under our offer, our
Depositary may retain tendered shares on our behalf, and such shares may not be
withdrawn except to the extent tendering shareholders are entitled to withdrawal
rights as described in "The Offer -- Withdrawal Rights." However, our ability to
delay the payment for the shares that we have accepted for payment is limited by
Rule 14e-1(c) under the Exchange Act, which requires that a bidder pay the
consideration offered or return the securities deposited by, or on behalf of,
holders of securities promptly after the termination or withdrawal of the tender
offer.

If we make a material change in the terms of our offer or the
information concerning our offer, or if we waive a material condition of our
offer, we will disseminate additional tender offer materials and extend our
offer to the extent required by Rules 14d-4(d), 14d-6(c) and 14e-1 under the
Exchange Act. The minimum period during which our offer would have to remain
open following material changes in the terms of our offer or information
concerning our offer, other than a change in price or a change in the number of
shares being sought, would depend upon the facts and circumstances then
existing, including the relative materiality of the changed

terms or information. In a public release, the Securities and Exchange
Commission has stated that, in its view, an offer must remain open for a minimum
period of time following a material change in the terms of the offer and that a
waiver of a material condition is a material change in the terms of the offer.
The release states that an offer should remain open for a minimum of five (5)
business days from the date a material change is first published, or sent or
given to security holders and that, if material changes are made with respect to
information not materially less significant than the offer price and the number
of shares being sought, a minimum of ten (10) business days may be required to
allow adequate dissemination and investor response. The requirement to extend
our offer will not apply to the extent that the number of business days
remaining between the occurrence of the change and the then-scheduled Expiration
Date equals or exceeds the minimum extension period that would be required
because of such amendment.

B.V.R. Systems has provided us with B.V.R. Systems' shareholder lists
and security position listings for the purpose of disseminating our offer to
holders of the shares. This document and the related Letter of Transmittal will
be mailed by us to record holders of the shares and will be furnished by us to
brokers, dealers, banks and similar persons whose names, or the names of whose
nominees, appear on the shareholder lists or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of the shares.

2. ACCEPTANCE FOR PAYMENT.

Upon the terms and subject to the conditions of our offer (including,
if our offer is extended or amended, the terms and conditions of any such
extension or amendment), we will accept for payment and, subject to any
withholding taxes due, will pay, promptly after the Expiration Date, for all
shares validly tendered prior to the Expiration Date and not properly withdrawn.
All determinations concerning the satisfaction of such terms and conditions will
be within our sole discretion, which determinations will be final and binding.
See "The Offer -- Conditions to Our Offer and Rights to Withdraw Our Offer."

Subject to those conditions, we are offering to purchase all of the
shares. However, depending on the number of shares tendered, the number that we
may accept may be limited by law, as follows:

o If more than 95% of the outstanding shares are tendered, we
will purchase all shares tendered.

o If less than 90% of the outstanding shares are tendered, we
will purchase all shares tendered.

In the Solicitation/Recommendation Statement on Schedule 14D-9 filed by
B.V.R. Systems on December 2, 2003, B.V.R. Systems disclosed that, to the best
of its knowledge based on inquiries made by it, Polar Investment Ltd., which
effectively has the power to vote approximately 13.26% of the outstanding shares
of B.V.R. Systems, will refrain from tendering those shares pursuant to our
offer. On that basis, we expect that the third bullet point above will apply and
that, subject to the conditions of our offer, we will purchase all shares
tendered.

In all cases, payment for the shares accepted for payment pursuant to
our offer will be made only after timely receipt by our Depositary of (i)
certificates for such shares (or a timely Book-Entry Confirmation (as defined
below) with respect thereto), (ii) a Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message (as
defined below), and (iii) any other documents required by the Letter of
Transmittal. If, prior to the Expiration Date, we increase the consideration
offered to any shareholders pursuant to our offer, the increased consideration
will be paid to all holders of shares purchased pursuant to our offer, whether
or not such shares were tendered prior to the increase in consideration.

For purposes of our offer, we will be deemed to have accepted for
payment, and thereby purchased, the shares properly tendered to us and not
withdrawn, when we give oral or written notice to our Depositary of our
acceptance for payment of such shares. Payment for the shares accepted for
payment pursuant to our offer will be made by deposit of the purchase price
therefor with our Depositary, which will act as agent for tendering shareholders
for the purpose of receiving payment from us and transmitting payment to
tendering shareholders.

UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE TO
BE PAID BY US FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF OUR OFFER OR ANY
DELAY IN MAKING SUCH PAYMENT. UPON THE DEPOSIT OF FUNDS WITH OUR DEPOSITARY FOR
THE PURPOSE OF MAKING PAYMENTS TO TENDERING SHAREHOLDERS, OUR OBLIGATION TO MAKE
SUCH PAYMENT SHALL BE SATISFIED, AND TENDERING SHAREHOLDERS MUST THEREAFTER LOOK
SOLELY TO OUR DEPOSITARY FOR PAYMENT OF AMOUNTS OWED TO THEM BY REASON OF THE
ACCEPTANCE FOR PAYMENT OF THE SHARES PURSUANT TO OUR OFFER.

If we are delayed in our acceptance for payment of, or payment for, the
shares or are unable to accept for payment, the shares pursuant to our offer for
any reason, then, without prejudice to our rights under our offer (but subject
to compliance with Rule 14e-1(c) under the Exchange Act), our Depositary may,
nevertheless, on our behalf, retain tendered shares, and such shares may not be
withdrawn except to the extent tendering shareholders are entitled to exercise,
and duly exercise, their withdrawal rights.

If any tendered shares are not purchased pursuant to our offer for any
reason, or if certificates are submitted representing more shares than are
tendered, certificates representing the shares not tendered or not accepted for
purchase will be returned to the tendering shareholder, or such other person as
the tendering shareholder shall specify in the Letter of Transmittal, promptly
following the expiration, termination or withdrawal of our offer. In case of the
shares delivered by book-entry transfer into our Depositary's account at a
Book-Entry Transfer Facility pursuant to the procedures set forth in "The Offer
- -- Procedure for Tendering Shares," such

shares will be credited to such account maintained at a Book-Entry Transfer
Facility as the tendering shareholder shall specify in the Letter of
Transmittal, promptly following the expiration, termination or withdrawal of our
offer. If no such instructions are given with respect to the shares delivered by
book-entry transfer, any such shares not tendered or not purchased will be
returned by crediting the account at the Book-Entry Transfer Facility designated
in the Letter of Transmittal as the account from which such shares were
delivered.

3. PROCEDURE FOR TENDERING SHARES.

Valid Tender. For the shares to be validly tendered pursuant to our
offer, either (i) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees, or in
the case of a book-entry transfer, an Agent's Message (as defined below), and
any other required documents, must be received by our Depositary at one of its
addresses set forth on the back cover of this document prior to the Expiration
Date and either certificates for tendered shares must be received by our
Depositary at one of such addresses or such shares must be delivered pursuant to
the procedures for book-entry transfer set forth below (and a Book-Entry
Confirmation (as defined below) received by our Depositary), in each case prior
to the Expiration Date; or (ii) the tendering shareholder must comply with the
guaranteed delivery procedures set forth below.

Book-Entry Transfer. Our Depositary will establish accounts with
respect to the shares at The Depository Trust Company, which will act as our
"Book-Entry Transfer Facility," for purposes of our offer within two (2)
business days after the date of this document. Any financial institution that is
a participant in the Book-Entry Transfer Facility's system may make book-entry
delivery of the shares by causing the Book-Entry Transfer Facility to transfer
such shares into our Depositary's account in accordance with the Book-Entry
Transfer Facility's procedure for such transfer. However, although delivery of
the shares may be effected through book-entry transfer into our Depositary's
account at the Book-Entry Transfer Facility, the Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message, and any other required documents
must, in any case, be transmitted to, and received by, our Depositary at one of
its addresses set forth on the back cover of this document prior to the
Expiration Date, or the tendering shareholder must comply with the guaranteed
delivery procedures described below. The confirmation of a book-entry transfer
of shares into our Depositary's account at the Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation."

DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.

The term "Agent's Message" means a message transmitted by the
Book-Entry Transfer Facility to, and received by, the Depositary and forming a
part of a Book-Entry Confirmation, which states that such Book-Entry Transfer
Facility has received an express acknowledgment from the participant in such
Book-Entry Transfer Facility tendering the shares that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal and
that we may enforce such agreement against the participant.

THE METHOD OF DELIVERY OF THE SHARES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH A BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. THE SHARES
WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY OUR DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.

Signature Guarantees. No signature guarantee is required on the Letter
of Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant in
the Book Entry Transfer Facility's system whose name appears on a security
position listing as the owner of the shares) of the shares tendered therewith
and such registered holder has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on the
Letter of Transmittal; or (ii) if such shares are tendered for the account of a
financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Security
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (each, an
"Eligible Institution" and, collectively, "Eligible Institutions"). In all other
cases, all signatures on Letters of Transmittal must be guaranteed by an
Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal.

If the certificates for the shares are registered in the name of a
person other than the signer of the Letter of Transmittal, or if payment is to
be made, or certificates for the shares not tendered or not accepted for payment
are to be returned, to a person other than the registered holder of the
certificates surrendered, then the tendered certificates for such shares must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name or names of the registered holder(s) or owner(s) appear on
the certificates, with the signatures on the certificates or stock powers
guaranteed as aforesaid. See Instruction 5 to the Letter of Transmittal.

Guaranteed Delivery. If a shareholder desires to tender the shares
pursuant to our offer and such shareholder's certificates for the shares are not
immediately available or the procedures for book-entry transfer cannot be
completed on a timely basis or time will not permit all required documents to
reach our Depositary prior to the Expiration Date, such shareholder's tender may
be effected if all the following conditions are met:

o such tender is made by or through an Eligible Institution;

o a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by us, is
received by our Depositary, as provided below, prior to the
Expiration Date; and

o the certificates for (or a Book-Entry Confirmation with
respect to) such shares, together with a properly completed
and duly executed Letter of Transmittal (or

facsimile thereof), with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's
Message, and any other required documents, are received by
our Depositary within three trading days after the date of
execution of such Notice of Guaranteed Delivery. A "trading
day" is any day on which the Nasdaq National Market,
operated by the National Association of Securities Dealers,
Inc., is open for business.

The Notice of Guaranteed Delivery may be delivered by hand to our
Depositary or transmitted by telegram, facsimile transmission or mail to our
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.

Notwithstanding any other provision hereof, payment for the shares
accepted for payment pursuant to our offer will in all cases be made only after
timely receipt by our Depositary of (i) certificates for (or a timely Book-Entry
Confirmation with respect to) such shares; (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message; and (iii) any other documents required by the Letter of Transmittal.
Accordingly, tendering shareholders may be paid at different times depending
upon when certificates for shares or Book-Entry Confirmations with respect to
the shares are actually received by our Depositary.

We are not offering to purchase outstanding options to purchase shares.
If you hold vested options and wish to participate in our offer, you may
participate in the offer by exercising your options and tendering the resulting
shares in our offer.

UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE TO
BE PAID BY US FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF OUR OFFER OR ANY
DELAY IN MAKING SUCH PAYMENT.

The valid tender of the shares pursuant to one of the procedures
described above will constitute a binding agreement between the tendering
shareholder and us upon the terms and subject to the conditions of our offer.

Special Purchase Offer Procedures. This tender offer is a "special
purchase offer" subject to Section 328 of the Israeli Companies Law. To comply
with these provisions of the Israeli Companies Law:

o This tender offer is addressed to all holders of ordinary
shares of B.V.R. Systems.

o All shareholders have an opportunity to state whether they
accept or oppose this tender offer.

o We may complete this tender offer only if the number of
shares stated to accept our 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.

o If we duly complete this offer, then all shareholders who
had not stated their position on the Purchase Offer, or who
had opposed it, may ratify the offer by

contacting the Depository not later than four days after we
publish a notice that we have accepted shares in this offer.
A shareholder who contacts the Depository and ratifies the
offer by tendering his/her/its shares in the manner stated
herein shall be entitled to the same consideration paid in
the offer.

By tendering your shares, you will state that you accept the offer for
purposes of Section 328 of the Israeli Companies Law. If you wish to oppose the
offer, it is not sufficient to refrain from tendering your shares. Instead, you
must complete and submit the enclosed Opposition Notice, together with a copy,
certified by a Public Notary, of your share certificates to the offices of the
Depositary.

Appointment. By executing the Letter of Transmittal as set forth above
(including delivery through an Agent's Message), the tendering shareholder will
irrevocably appoint our designees as such shareholder's attorneys-in-fact and
proxies, in the manner set forth in the Letter of Transmittal, each with full
power of substitution, to the full extent of such shareholder's rights with
respect to the shares tendered by such shareholder and accepted for payment by
us, and with respect to any and all non-cash dividends, distributions, rights,
other shares or other securities issued or issuable in respect of such shares on
or after December 23, 2003 (collectively, "Distributions"). All such proxies
will be considered coupled with an interest in the tendered shares. Such
appointment will be effective if and when, and only to the extent that, we
accept for payment the shares tendered by such shareholder as provided herein.
All such powers of attorney and proxies will be irrevocable and will be deemed
granted in consideration of the acceptance for payment of the shares tendered in
accordance with the terms of our offer. Upon such appointment, all prior powers
of attorney, proxies and consents given by such shareholder with respect to such
shares (and any and all Distributions) will, without further action, be revoked
and no subsequent powers of attorney, proxies, consents or revocations may be
given by such shareholder (and, if given, will not be deemed effective). Our
designees will thereby be empowered to exercise all voting and other rights with
respect to such shares (and any and all Distributions), including, without
limitation, in respect of any annual or special meeting of B.V.R. Systems'
shareholders (and any adjournment or postponement thereof), actions by written
consent in lieu of any such meeting or otherwise, as each such attorney-in-fact
and proxy or his substitute shall in his sole discretion deem proper. We reserve
the right to require that, in order for the shares to be deemed validly
tendered, immediately upon our acceptance for payment of such shares, we must be
able to exercise full voting, consent and other rights with respect to such
shares (and any and all Distributions), including voting at any meeting of
shareholders.

Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of shares
will be determined by us, in our sole discretion, which determination will be
final and binding. We reserve the absolute right to reject any or all tenders of
any shares determined by us not to be in proper form or the acceptance for
payment of which, or payment for which, may, in the opinion of our counsel, be
unlawful. We reserve the absolute right, in our sole discretion, to waive any of
the conditions of our offer, provided that if we waive a condition of our offer
with respect to a particular shareholder, we will waive that condition with
respect to all shareholders. We also reserve the absolute right, in our sole
discretion to waive any defect or irregularity in the tender of any shares of
any particular

shareholder, whether or not similar defects or irregularities are waived in the
case of other shareholders. No tender of shares will be deemed to have been
validly made until all defects or irregularities relating thereto have been
cured or waived. None of us, our Depositary, our Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification. Our interpretation of the terms and conditions of our offer
(including the Letter of Transmittal and the instructions thereto) will be final
and binding.

Backup Withholding Tax. Under the backup withholding tax provisions of
federal income tax law, unless a tendering holder of shares satisfies the
conditions described in Instruction 9 of the Letter of Transmittal or is
otherwise exempt, the cash payable to such holder in the offer may be subject to
backup withholding tax at a rate of 28%. To prevent backup withholding tax, each
tendering holder should complete and sign the Substitute Form W-9 included in
the Letter of Transmittal or the Form W-8, Certificate of Foreign Status, as
applicable. See Instruction 9 to the Letter of Transmittal.

4. WITHDRAWAL RIGHTS.

Except as otherwise provided in this Section, tenders of shares are
irrevocable. Shares tendered pursuant to our offer may be withdrawn pursuant to
the procedures set forth below at any time prior to the Expiration Date and,
unless theretofore accepted for payment and paid for by us pursuant to our
offer, may also be withdrawn at any time after 5:00 p.m., New York City time, on
January 20, 2004.

For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by our Depositary at
its address set forth on the back cover of this document and must specify the
name of the person having tendered the shares to be withdrawn, the number of
shares to be withdrawn and the name of the registered holder of the shares to be
withdrawn, if different from the name of the person who tendered the shares. If
certificates for shares have been delivered or otherwise identified to our
Depositary, then, prior to the physical release of such certificates, the serial
numbers shown on such certificates must be submitted to our Depositary and,
unless such shares have been tendered by an Eligible Institution, the signatures
on the notice of withdrawal must be guaranteed by an Eligible Institution. If
the shares have been delivered pursuant to the procedures for book-entry
transfer as set forth above, any notice of withdrawal must also specify the name
and number of the account at the appropriate Book-Entry Transfer Facility to be
credited with the withdrawn shares and otherwise comply with such Book-Entry
Transfer Facility's procedures. Withdrawals of tenders of the shares may not be
rescinded, and any shares properly withdrawn will thereafter be deemed not
validly tendered for purposes of our offer. However, withdrawn shares may be
tendered again by following one of the procedures described above any time prior
to the Expiration Date.

All questions as to the form and validity (including time of receipt)
of notices of withdrawal will be determined by us, in our sole discretion, which
determination will be final and binding. Neither we, our Depositary, our
Information Agent, nor any other person will be

under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.

5. MATERIAL TAX CONSEQUENCES.

United States Federal Income Tax Consequences. The following is a
discussion of the material United States federal income tax consequences to a
United States holder of the receipt of cash in exchange for the ordinary shares
of B.V.R. Systems pursuant to our offer. This discussion considers only United
States holders that hold ordinary shares as capital assets. This discussion is
based on current provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), current and proposed Treasury regulations promulgated thereunder,
and administrative and judicial decisions as of the date hereof, all of which
are subject to change, possibly on a retroactive basis. This discussion does not
address all aspects of United States federal income taxation that may be
relevant to any particular shareholder based on such shareholder's individual
circumstances. In particular, this discussion does not address the potential
application of the alternative minimum tax or the United States federal income
tax consequences to United States holders that are subject to special treatment,
including United States holders that:

o are broker-dealers or insurance companies,

o have elected mark-to-market accounting,

o are tax-exempt organizations,

o are financial institutions or "financial services entities",

o hold class A common shares as part of a straddle, "hedge" or
"conversion transaction" with other investments,

o own directly, indirectly or by attribution at least 10% of
our voting power, and

o have a functional currency that is not the U.S. dollar.

In addition, this discussion does not address any aspect of state,
local or non-United States tax laws. Material aspects of United States federal
income tax relevant to a holder other than a United States holder, or a
"Non-United States holder," are also discussed below.

For purposes of this summary, a "United States holder" is a beneficial
owner of the shares that is, for United States federal income tax purposes:

o a citizen or resident of the United States,

o a corporation created or organized in the United States or
under the laws of the United States or of any state (or the
District of Columbia),

o an estate, the income of which is includible in gross income
for United States federal income tax purposes regardless of
its source, or

o a trust, (a) if a court within the United States is able to
exercise primary supervision over the administration of the
trust and one or more U.S. persons have the authority to
control all substantial decisions of the trust or (b) if it
has a valid

election in effect under applicable Treasury regulations to
be treated as a United States person.

The receipt of cash in exchange for ordinary shares of B.V.R. Systems
by a United States holder pursuant to our offer will be a taxable transaction
for United States federal income tax purposes and may also be a taxable
transaction under applicable state, local or foreign tax laws. In general, a
United States holder will recognize gain or loss equal to the difference between
the amount received in exchange for the holder's ordinary shares pursuant to our
offer and the holder's adjusted tax basis in the ordinary shares. Subject to the
passive foreign investment company discussion below, such gain or loss will be
capital gain or loss and will be long-term capital gain or loss if the United
States holder's holding period for such ordinary shares exceeds one year. Gain
or loss realized by a United States holder on the exchange of the ordinary
shares generally will be treated as United States-source gain or loss. The
deductibility of a capital loss recognized on the exchange is subject to
limitations.

Under recently enacted amendments to the Code, long-term capital gain
realized by individuals is generally subject to United States federal income tax
at a reduced maximum tax rate of 15 percent through December 31, 2008.

For United States federal income tax purposes, B.V.R. Systems would be
considered a passive foreign investment company ("PFIC") for any taxable year in
which either (i) 75% or more of its gross income is passive income, or (ii) at
least 50% of the average value of all of its assets for the taxable year produce
or are held for the production of passive income. For this purpose, passive
income includes dividends, interest, royalties, rents, annuities and the excess
of gains over losses from the disposition of assets which produce passive
income. Based solely on publicly available information, it appears that B.V.R.
Systems has not been classified as a PFIC for any taxable year.

If B.V.R. Systems is, or has been, classified as a PFIC for any taxable
year, gain (if any) recognized by a United States Holder (who was a shareholder
at the time B.V.R. was classified as a PFIC) upon the disposition of ordinary
shares would, absent a previous election by such United States Holder to treat
its investment in ordinary shares as an investment in a "qualified electing
fund," be taxable for United States federal income tax purposes as ordinary
income. Further, a United States Holder would generally be required to allocate
such ordinary income ratably over the holding period for such ordinary shares,
and the amount allocated to each year during which B.V.R. Systems were
considered a PFIC (other than the year of the disposition) would be subject to
tax at the highest individual or corporate tax rate, as the case may be, and an
interest charge would be imposed with respect to the resulting tax liability
allocated to each such year. A United States Holder would also be required to
make a return on IRS Form 8621 with respect to the disposition of ordinary
shares.

Except as described below, a Non-United States holder of ordinary
shares will not be subject to U.S. federal income or withholding tax on the
payment of proceeds from the disposition of ordinary shares, unless:

o such item is effectively connected with the conduct by the
Non-United States holder of a trade or business in the
United States and, in the case of a resident of a country
which has a treaty with the United States, such as Israel,
such item is attributable to a permanent establishment or,
in the case of an individual, a fixed place of business, in
the United States;

o the Non-United States holder is an individual who holds the
ordinary shares as a capital asset and is present in the
United States for 183 days or more in the taxable year of
the disposition and does not qualify for an exemption; or

o such item is subject to tax pursuant to the provisions of
United States tax law applicable to U.S. expatriates.

United States holders are subject to information reporting and back-up
withholding (at a rate of 28%) on proceeds paid from the disposition of ordinary
shares unless the U.S. Holder provides IRS Form W-9 or otherwise establishes an
exemption.

Non-United States holders generally are not subject to information
reporting or back-up withholding upon the disposition of ordinary shares,
provided that such non-U.S. Holder establishes its non-U.S. status (or other
exemption) in the manner required by Treasury regulations.

The amount of any back-up withholding will be allowed as a credit
against a United States or Non-United States holder's United States federal
income tax liability and may entitle such holder to a refund, provided that the
required information is furnished to the Internal Revenue Service.

The United States federal income tax discussion set forth above is
included for general information only and is based upon laws, regulations,
pronouncements and decisions now in effect, all of which are subject to change
(possibly retroactively). United States holders are urged to consult their tax
advisors with respect to the specific tax consequences of our offer to them,
including the application and effect of the alternative minimum tax, and state,
local and foreign tax laws.

Israeli Tax Consequences. Under current Israeli law, capital gains
received by individual shareholders and certain corporate shareholders (which
are not subject to the provisions of the Inflationary Adjustments Law) upon the
sale of B.V.R. Systems ordinary shares are subject to a 15% tax rate on any
capital gain accrued from January 1, 2003. Such gains accrued prior to that date
are generally exempt from tax . These rules are applicable, inter alia, to an
Israeli resident company whose shares are traded on a recognized stock exchange
or recognized over-the-counter market outside of Israel (if the shares are not
considered to be so traded, different taxation rules with less favorable
consequences may be applicable).

The tax basis of shares acquired prior to January 1, 2003 will be
determined in accordance with the average closing share price in the three
trading days preceding January 1, 2003. However, a request may be made to the
tax authorities to consider the actual adjusted cost of the shares as the tax
basis if it is higher than such average price.

Notwithstanding the foregoing, dealers in securities in Israel are
taxed at regular tax rates applicable to business income. Israeli corporate
shareholders to which the provision of the Inflationary Adjustments Law apply
will be liable to tax on any gains from the sale of B.V.R. Systems shares.
Foreign residents will, in general continue to be exempt from capital gains tax
on the sale of traded securities of Israeli companies, so long as the gain is
not derived through a permanent establishment the foreign residents maintain in
Israel. However, non-Israeli corporations will not be entitled to such exemption
if an Israeli resident (i) has a controlling interest of 25% or more in such
non-Israeli corporation, or (ii) is the beneficiary or is entitled to 25% or
more of the revenues or profits of such non-Israeli corporation, whether
directly or indirectly.

Special rules will apply to shareholders who held B.V.R. Systems
shares before the initial listing of these shares for trade on the Nasdaq
SmallCap Market.

Pursuant to the convention between the Governments of the United States
and Israel with respect to taxes on income, or the U.S.-Israel tax treaty, the
sale, exchange or disposition of B.V.R. Systems' ordinary shares by a person who
qualifies as a resident of the United States under the treaty and who is
entitled to claim the benefits afforded to him by the treaty, will generally not
be subject to Israeli capital gains tax. This exemption shall not apply to a
person who held, directly or indirectly, shares representing 10% or more of the
voting power in B.V.R. Systems during any part of the 12-month period preceding
the sale, exchange or disposition, subject to certain conditions. A sale,
exchange or disposition of B.V.R. Systems' shares by a U.S. resident qualified
under the treaty, who held, directly or indirectly, shares representing 10% or
more of the voting power in B.V.R. Systems at any time during the preceding
12-month period would be subject to Israeli tax, to the extent applicable and
subject to the exemption mentioned above; however, under the treaty, this U.S.
resident would be permitted to claim a credit for those Israeli taxes against
the U.S. income tax with respect to the sale, exchange or disposition, subject
to the limitations in U.S. laws applicable to foreign tax credits. The
limitations include rules denying a credit or deduction for withheld Israeli
taxes if such withheld taxes are recoverable by the United States holder from
the Israeli Income Tax Authorities.

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
bidder group intends to apply to the Israeli Income Tax Authorities in order to
receive such a pre-ruling in connection with its withholding tax obligations,
with a view to receiving an exemption from withholding with respect to certain
categories of selling shareholders, including foreign shareholders. In the
absence of such a ruling, 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.

6. STOCK LISTING; PRICE RANGE OF SHARES; EXCHANGE ACT REGISTRATION.

Stock Listing. The ordinary shares of B.V.R. Systems traded on the
Nasdaq SmallCap Market under the symbol "BVRS" until they were removed on
February 13, 2003. They then were quoted on the OTC Bulletin Board under the
symbol "BVRSF" until October 13, 2003. The shares now are quoted from time to
time on the pink sheets under the symbol "BVRSF.PK". If we consummate our offer
we will seek to have the shares once again quoted on the OTC Bulletin Board.

Price Range of Shares. The following table sets forth the high and low
closing price for the ordinary shares as reported by the Nasdaq SmallCap Market
and the Over-the-Counter Bulletin Board for the periods indicated:

HIGH LOW
---- ---
2001
----

First Quarter.................................................... $3.50 $1.50
Second Quarter................................................... $2.31 $1.00
Third Quarter.................................................... $3.50 $2.03
Fourth Quarter................................................... $3.02 $2.40

2002
----
First Quarter.................................................... $3.00 $2.48
Second Quarter.................................................. $2.65 $1.75
Third Quarter.................................................... $2.42 $1.02
Fourth Quarter................................................... $1.07 $0.50

2003
----
First Quarter.................................................... $1.10 $0.37
Second Quarter.................................................. $0.90 $0.75
Third Quarter.................................................... $0.99 $0.10
Fourth Quarter (through December 6).............................. $0.85 $0.10

Exchange Act Registration. On October 9, 2003, B.V.R. Systems filed a
certification on Form 15 with the SEC to de-register its ordinary shares under
the Exchange Act because they were held of record by fewer than 300 persons.

7. CERTAIN INFORMATION CONCERNING B.V.R. SYSTEMS.

Available Information. The certification on Form 15 filed by B.V.R.
Systems on October 9, 2003 immediately suspended its obligation to file periodic
reports under the Exchange Act. Therefore, the reports and other information of
B.V.R. Systems on file with the SEC may be out of date. Prior to November 11,
2002, B.V.R. Systems filed reports, including annual reports on Form 20-F, and
other information with the SEC relating to its business, financial condition and
other matters, on paper. Copies of those paper filings should be available for
inspection at the public reference facilities of the SEC at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the regional offices of the SEC located at
233 Broadway, New York, New York 10007, and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, IL 60661. Copies of those

paper filings also should be obtainable by mail, upon payment of the SEC's
customary charges, by writing to the SEC's principal office at 450 Fifth Street,
N.W., Washington, D.C. 20549.

Since November 11, 2002 and until October 2003, B.V.R. Systems has
filed those reports and other information electronically, and they are available
on the Internet at www.sec.gov, together with the Solicitation/Recommendation
Statement of B.V.R. Systems on Schedule 14D-9 filed on December 2, 2003.

8. CERTAIN INFORMATION CONCERNING US.

We are a corporation organized under the laws of Israel. We are
controlled by Aviv Tzidon, Aeronautics Defense Systems Ltd. and iTS Technologies
Pte. Ltd. We currently do not own any outstanding shares of B.V.R. Systems. Our
principal offices are located at c/o Yigal Arnon & Co., 1 Azrieli Center, Tel
Aviv, Israel. We are not subject to the informational filing requirements of the
Exchange Act.

See Annex A for certain information concerning our directors and officers, and
the directors and officers of Aeronautics Defense Systems Ltd. and iTS
Technologies Pte. Ltd.

Mr. Tzidon purchased an aggregate of 58,000 shares of B.V.R. Systems,
and sold all of them, during November 2003, as follows:

- ---------------------------- -------------------------- ------------------------- --------------------------
SHARES PRICE DATE BOUGHT OR SOLD
- ---------------------------- -------------------------- ------------------------- --------------------------

57,000 $0.08 November 4, 2003 Bought
- ---------------------------- -------------------------- ------------------------- --------------------------
10,000 $0.30 November 7, 2003 Sold
- ---------------------------- -------------------------- ------------------------- --------------------------
1,000 $0.35 November 17, 2003 Bought
- ---------------------------- -------------------------- ------------------------- --------------------------
4,000 $0.12 November 17, 2003 Sold
- ---------------------------- -------------------------- ------------------------- --------------------------
10,000 $0.15 November 18, 2003 Sold
- ---------------------------- -------------------------- ------------------------- --------------------------
10,000 $0.14 November 18, 2003 Sold
- ---------------------------- -------------------------- ------------------------- --------------------------
19,500 $0.12 November 18, 2003 Sold
- ---------------------------- -------------------------- ------------------------- --------------------------
4,500 $0.10 November 18, 2003 Sold
- ---------------------------- -------------------------- ------------------------- --------------------------

Mr. Tzidon effected all of these transactions through CIBC World Markets, in Tel
Aviv.

Except as set forth in this document, no member of our bidder group
nor, to the best of our knowledge, any of the other persons listed on Annex A,
nor any affiliate or majority-owned subsidiary of any of the foregoing, nor any
of the respective executive officers, directors or subsidiaries of any of the
foregoing, has effected any transaction in the shares during the past 60 days.

Except as set forth in this document, no member of our bidder group,
nor to the best of our knowledge, any other person listed on Annex A, nor any
affiliate or majority-owned subsidiary of the foregoing, beneficially owns or
has a right to acquire ordinary shares of B.V.R. Systems.

Except as set forth in this document, no member of our bidder group,
nor to the best of our knowledge, any of the other persons listed on Annex A
hereto, has any contract, arrangement, understanding or relationship with any
other person with respect to any securities of B.V.R. Systems, including, but
not limited to, any contract, arrangement, understanding or relationship
concerning the transfer or the voting of any securities of B.V.R. Systems, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies.

Except as set forth in this document, no member of our bidder group,
nor to the best of our knowledge, any of the other persons listed on Annex A:

o has had, during the past two years, any negotiations,
contacts or material transactions with B.V.R. Systems or any
of its executive officers, directors or affiliates,
concerning any merger, consolidation, acquisition, tender
offer, election of directors, or the sale of a material
amount of the assets of, B.V.R. Systems, except for a
business relationship between B.V.R. Systems and iTS
Technologies Pte. Ltd. and its affiliates to cooperate on
certain projects as a subcontractor and to provide technical
support; or

o has any agreement, arrangement or understanding and any
actual or potential conflict of interest with B.V.R. Systems
or any of its executive officers, directors or affiliates.

Except as set forth in this document, no member of our bidder group,
nor to the best of our knowledge, any of the other persons listed on Annex A,
(i) has been convicted in a criminal proceeding in the past five years
(excluding traffic violations or similar misdemeanors); or (ii) has been party
to any judicial or administrative proceeding during the past five years (except
for matters that were dismissed without sanction or settlement) that resulted in
a judgment, decree or final order enjoining the person from future violations
of, or prohibiting activities subject to, U.S. federal or state securities laws,
or a finding of any violation of U.S. federal or state securities laws.

The members of our bidder group have filed with the Commission a Tender
Offer Statement on Schedule TO that contains additional information with respect
to our offer. This Schedule TO, and any amendments thereto, is available on the
Internet at www.sec.gov.

9. SOURCE AND AMOUNT OF FUNDS

Our offer is not conditioned upon any financing arrangements. We have
deposited in escrow an amount of cash, $1,918,958, which is sufficient to pay
for all of the outstanding shares. The funds deposited in the escrow account are
derived from cash on hand of the members of the bidder group.

10. DIVIDENDS AND DISTRIBUTIONS

To our knowledge, B.V.R. Systems does not have a set policy regarding
dividends.

11. BACKGROUND OF OUR OFFER

During the last week of October 2003, the bidder group became aware
through the Israeli media that B.V.R. Systems had been having financial
difficulties and was considering a sale of the company or its assets.

Aviv Tzidon, as representative of the bidder group, during the last
week of October 2003, approached the management of Elisra Electronics Systems
Ltd., the majority shareholder of B.V.R. Systems, and informed them of the
bidder group's interest in B.V.R. Systems. Mr. Tzidon offered to purchase
Elisra's holdings in B.V.R. Systems at a price per share of $0.18. Elisra said
it would accept the offer only if the bidder group made a tender offer to all
shareholders of B.V.R. Systems on the same terms. In addition, Elisra demanded
that the bidder group provide a credit line to B.V.R. Systems.

On October 30, 2003, after negotiations with Mr. Jonathan Kolber, CEO
of Koor Industries Ltd., the parent company of Elisra, Mr. Yuval Yanai, CFO of
Koor and chairman of the board of directors of B.V.R. Systems and Mr. Ran
Maidan, CFO of Elisra and director of B.V.R. Systems, Mr. Tzidon, on behalf of
the bidder group, entered into a letter agreement with the board of directors of
B.V.R. Systems which included the following terms:

o An undertaking by us to commence this tender offer, but with
a minimum condition of 60%;

o an undertaking by us, if we successfully complete this
offer, to extend a line of credit to B.V.R. Systems in the
amount of U.S.$5 million; and

o an agreement by B.V.R. Systems not to negotiate or cooperate
with any third party in connection with any sale of the
assets or operations of B.V.R. Systems until the earlier of
the completion of this tender offer or January 31, 2004.

After the date of the letter agreement, at the request of Elisra, we
determined to reduce the minimum condition to 48%. This change gave Elisra,
which owns approximately 48.7% of the outstanding shares, the power to ensure
that the minimum condition is satisfied. The change was an important
consideration for Elisra, its parent Koor and Mr. Yanai in supporting changes to
the board of directors of B.V.R. Systems, as described below, that we discussed
with them prior to commencing our offer and that the board adopted shortly after
we commenced our offer.

Also under the letter agreement, we deposited approximately $1.9
million in a trust account for the benefit of B.V.R. Systems to provide cash to
the holders of ordinary shares who tender pursuant to this offer, and we
deposited approximately $1.8 million in a second trust account for the benefit
of B.V.R. Systems to provide part of the amount to be extended in the line of
credit. If we complete this offer successfully but fail to provide the line of
credit, B.V.R.

Systems will have the right to a portion of the funds in the second trust
account, as described below.

On November 24, 2003, the board of directors of B.V.R. Systems held a
telephonic meeting at which Mr. Tzidon was present. At that meeting, Mr.Yanai
informed the board that Elisra had commited to tender its entire holdings of
shares in our offer. Mr. Yanai also informed the board that, while he would
remain a director of the Company, he would resign his position as chairman of
the board, effective immediately. In response to Mr. Yanai's announcements, the
board of directors appointed Mr. Tzidon both a director and chairman of the
board.

On November 26, 2003, the board of directors of B.V.R. Systems, at the
recommendation of Mr. Tzidon, appointed Ilan Gillies as its Chief Executive
Officer and authorized Mr. Tzidon to approach existing clients, customers, banks
and potential strategic partners to maintain the existing relationships of
B.V.R. Systems and pursue potential business development strategies.

On December 3, 2003, we decided to advance $430,000 to B.V.R. Systems
in order to allow B.V.R. Systems to meet its November 2003 payroll obligations.
We are lending this amount to B.V.R. Systems as part of the $5 million line of
credit that we undertook to extend to B.V.R. Systems. This advance is coming
from the $1.8 million that we deposited in trust for the benefit of B.V.R.
Systems (the second trust account referenced above), reduces that trust account
and the balance available under the line of credit, and reduces to $470,000 the
amount to which B.V.R. Systems would be entitled if we fail to provide the
balance of the line of credit.

Except as set forth in this document, during the past two years, there
have not been any negotiations, transactions or material contacts between the
bidder group and B.V.R. Systems or its affiliates concerning any:

o merger, consolidation, acquisition, tender offer for or
other acquisition of any class of securities of B.V.R.
Systems,

o election of the directors of B.V.R. Systems, or

o sale or other transfer of a material amount of assets of
B.V.R. Systems.

12. RECOMMENDATION OF B.V.R. SYSTEMS.

The board of directors of B.V.R. Systems has discussed the advisability
of our offer and has decided to recommend to the shareholders that they accept
our offer. B.V.R. Systems has filed a Solicitation/Recommendation Statement on
Form 14D-9 with the SEC setting forth this recommendation.

13. PURPOSE OF OUR OFFER; PLANS FOR B.V.R. SYSTEMS; EFFECTS OF OUR OFFER.

If the conditions to our offer are satisfied, at the time that we
accept the tendered shares, we will become the owner of at least 48% of the
share capital of the B.V.R. Systems.

Following our acquisition of B.V.R. Systems it is our intention to
replace the board of directors (other than the directors who were not affiliated
with the management of B.V.R. Systems as of the time that we commenced our offer
on November 21, 2003) and the management of B.V.R. Systems, and to elect a new
board of directors which will reflect the change of ownership in B.V.R. Systems.
We also will seek to have the shares once again quoted on the OTC Bulletin
Board.

We have undertaken, if we complete this offer successfully, to provide
to B.V.R. Systems a $5 million line of credit. The line of credit would be in
existence for three years and would bear interest at the rate of LIBOR plus two
percent per year. The credit provided under the line of credit would be
repayable in one payment on the third anniversary of the date that we provide
such credit. We deposited $1.8 million in a trust account for the benefit of
B.V.R. Systems to secure this undertaking, and we have advanced $430,000 of that
amount to B.V.R. Systems to meet its payroll obligations. If we complete this
offer successfully but fail to provide the line of credit, B.V.R. Systems will
have the right to $470,000 of the funds in the trust account.

Except as otherwise described in this document, the bidder group has no
current plans or proposals that would result in any of the following:

o any extraordinary transaction, such as merger,
reorganization or liquidation, involving B.V.R. Systems;

o any purchase, sale or transfer of a material amount of
assets of B.V.R. Systems;

o any material change in the present dividend policy,
indebtedness or capitalization of B.V.R. Systems;

o any material changes in B.V.R. Systems' corporate structure
or business.

Nonetheless, following the acquisition, we intend to perform a further
review of the business of B.V.R. Systems in order to enable us effectively to
plan our future management strategies to revitalize B.V.R. Systems. In
connection with this review, we reserve the right to implement changes to the
corporate structure, business and dividend policy of B.V.R. Systems. In
addition, following the consummation of our offer, we reserve the right to
consider and act upon any strategic opportunity such as a merger, reorganization
or sale or transfer of all or some of the material assets of B.V.R. Systems. We
intend to raise money for the activities of B.V.R. Systems, as shall be
required. Any action we decide to take with respect to any strategic opportunity
will be carried out in accordance with the laws and regulations applicable to
B.V.R. Systems.

14. ISRAELI COMPANIES LAW, 1999; RIGHTS OF SHAREHOLDERS IN OUR OFFER.

Israeli Companies Law, 1999 requires that an acquisition of shares in a
public company which shares are traded on a stock exchange must be made by means
of a tender offer for all of the shares or series of shares of such company, if
as a result of the acquisition the offeror would become a holder of more than
90% of the company's shares or series of shares. This is called a "full tender
offer." Our offer is being conducted in accordance with this requirement.

Section 337(a) of Israeli Companies Law states that where a full tender
offer results in the offeror holding more than 95% of the issued shares or
series of shares of the subject company, a compulsory acquisition of the
remaining shares will occur and the offeror also automatically, without any
further action on part of the offeror or the remaining shareholders, becomes the
owner of all of the remaining shares, and becomes obligated to pay the price per
share offered in the tender offer to the former holders of those shares. Under
Section 337(b) of Israeli Companies Law, if the full tender offer does not
result in the offeror holding more than 95% of the issued shares or series of
shares of the subject company, the offeror may not acquire such shares that
would give the offeror a holding of more than 90% of all the shares. See "--
Acceptance For Payment."

Any shareholder tendering its shares in a full tender offer may request
that an appropriate Israeli court determine that the consideration offered was
not fair. Such a request to the court should be made within three month from the
day the full tender offer was consummated. The court may decide that the fair
market value was not paid to the shareholder and require that fair market value
be paid to the shareholder.

15. CONDITIONS TO OUR OFFER AND RIGHTS TO WITHDRAW OUR OFFER

Our offer is subject to the condition that, as of the expiration time
of the offer, at least 48% of the issued and outstanding shares must be validly
tendered and not withdrawn. This condition is for our sole benefit, may be
asserted by us regardless of the circumstances which may cause an insufficient
number of shares to be validly tendered and not withdrawn, and may be waived by
us at any time before the expiration date of our offer.

Under the Israeli Companies Law, all shareholders have an opportunity
to state whether they accept or oppose our offer. See "The Offer-- Procedure for
Tendering Shares -- Special Purchase Offer Procedures." We may complete our
offer only if the number of shares stated to accept our offer is a majority of
among the total shares stated, not taking into account shares held by any
controlling shareholder of B.V.R. Systems and its affiliates and shares held by
the bidder group or any person acting on its behalf.

Our offer is subject to the condition that there shall be:

o No action or proceeding instituted or pending before any
court, regulatory or administrative agency or other
governmental authority,

o no injunction or other order issued by any governmental
authority, and

o no statute, rule, regulation or interpretation enacted,
promulgated or issued by any governmental authority

in each case that seeks to, or would, restrain or prohibit us from completing
our offer, obligate us to pay monetary damages for completing our offer or
impose any material limitation on our ability to acquire, hold and exercise full
rights of ownership of the shares.

Our offer is not conditioned on the availability of financing.

Our failure at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such right, and each such right shall be deemed an
ongoing right that may be asserted at any time and from time to time.

16. CERTAIN LEGAL MATTERS

Except as otherwise disclosed herein, based on a review of publicly
available information filed by B.V.R. Systems with the Commission, we are not
aware of (i) any license or regulatory permit that appears to be material to the
business of B.V.R. Systems and its subsidiaries, taken as a whole, that might be
adversely affected by our acquisition of shares pursuant to our offer or (ii)
any approval or other action by any governmental, administrative or regulatory
agency or authority, domestic or foreign, that would be required for the
acquisition or ownership of shares by us as contemplated herein.

17. FEES AND EXPENSES

We have retained Yigal Arnon & Co. to act as our Information Agent and
American Stock Transfer & Trust Company to act as our Depositary in connection
with our offer. Our Information Agent may contact holders of the shares by
personal interview, mail, e-mail, telephone, facsimile transmission, telegraph
and other methods of electronic communication and may request brokers, dealers,
commercial banks, trust companies and other nominees to forward our offer
materials to beneficial holders. Our Information Agent and our Depositary will
each receive reasonable and customary compensation for their services. We have
also agreed to reimburse each such firm for certain reasonable out-of-pocket
expenses and to indemnify each such firm against certain liabilities in
connection with their services, including certain liabilities under Federal
securities laws.

We estimate that we will incur expenses in connection with our offer
approximately as set forth in the following table:

Depositary Fees................................................. 7,500
Filing Fees..................................................... 384
Legal Fees...................................................... 120,000
Advertising Costs............................................... 32,130
Printing and Mailing Costs, Miscellaneous....................... 20,000
--------------
Total.................................................. 180,014
==============

Except as set forth above, we will not pay any fees or commissions to
any broker, dealer or other person for making solicitations or recommendations
in connection with our offer. Brokers, dealers, banks and trust companies will
be reimbursed by us for customary mailing and handling expenses incurred by them
in forwarding our offer materials to their customers.

18. MISCELLANEOUS

Our offer is being made to all holders of the shares of B.V.R. Systems.
We are not aware of any jurisdiction in which the making of our offer or the
tender of shares in connection therewith would not be in compliance with the
laws of such jurisdiction. In any jurisdiction where the securities, blue sky or
other laws require our offer to be made by a licensed broker or dealer, our
offer shall be deemed to be made on our behalf by one or more registered brokers
or dealers licensed under the laws of such jurisdiction.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON OUR BEHALF NOT CONTAINED HEREIN OR IN THE LETTER OF
TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED.

CHUN HOLDINGS LTD.

December 8, 2003

ANNEX A
DIRECTORS AND EXECUTIVE OFFICERS OF CHUN HOLDINGS LTD.

The following schedule sets forth the name and present principal
occupation or employment, and material occupations, positions, offices or
employments for the past five years, of each of our directors and executive
officers. Unless otherwise indicated, each person is a citizen of the state of
Israel and the business address of each such person is c/o Chun Holdings Ltd.,
c/o Yigal Arnon & Co., 1 Azrieli Center, Tel Aviv, Israel. Unless otherwise
indicated, each such person has held his or her present occupation as set forth
below for the last five years.

Name and Present Principal
Citizenship Occupation Material Positions Held During Last Five Years
- ------------------ --------------------- --------------------------------------------------------------------------------

Aviv Tzidon Director and Aviv Tzidon was the co-founder of B.V.R. Technologies Ltd. and has served as
Chairman, its chief technology officer and a director since it commenced operations in
B.V.R. Systems 1987. Mr. Tzidon was appointed as a director and chairman of the board of
directors of B.V.R. Systems (1998) Ltd. on November 24, 2003. He previously
served as chairman of the board of directors and chief executive officer of
B.V.R. Systems from the time of its spin-off from B.V.R. Technologies in
October 1998 until April 2000. Prior to working at B.V.R. Systems he worked
with Israel Aircraft Industries as an independent consultant for three
years. Mr. Tzidon has been serving as a combat pilot with the Israeli Air
Force (including reserve service) for approximately 20 years.

Avi Leumi CEO and Avi Leumi was the co-founder of Aeronautics Defense Systems Ltd. since it
Chairman of the commenced operations in November 1997.
Board of
Directors of
Aeronautics
Defense
Systems Ltd.

Pritam Vice President Pritam Singh has served as Vice President (Asia Pacific Operations) of
Singh (Asia Pacific Singapore Technologies Electronics Limited since August 1, 2003. Prior to this
Operations) of Mr. Pritam served in the following positions: General Manager of ST Training &
Singapore Simulation Pte Ltd (from January 1, 2002 until July 31, 2003); Chief Operating
Technologies Officer of ST Training & Simulation Pte. Ltd (from January 1, 2001 to December
Electronics 31, 2001); Vice President (Programs) of ST Training & Simulation Pte Ltd.
Limited (from January 1, 2000 until December 31, 2000); and Director (Programs) of
ST Training &Simulation Pte Ltd. (from January 1, 1999 until December 31, 1999).

A-1

DIRECTORS AND EXECUTIVE OFFICERS OF AERONAUTICS DEFENSE SYSTEMS LTD.

The following schedule sets forth the name and present principal
occupation or employment, and material occupations, positions, offices or
employments for the past five years, of each of the directors and executive
officers of Aeronautics Defense Systems Ltd. Unless otherwise indicated, each
person is a citizen of the state of Israel and the business address of each such
person is c/o Aeronautics Defense Systems Ltd., Nachal Sorek, Northern
Industrial Area, Yavne, Israel and the telephone number at this address is
011-972-8-9328910. Unless otherwise indicated, each such person has held his or
her present occupation as set forth below for the last five years.

Present Principal
Name Occupation Material Positions Held During Last Five Years
- ------------------ ---------------------- ---------------------------------------------------------------------------

Avi Leumi CEO and Chairman of Avi Leumi was the co-founder of Aeronautics Defense Systems Ltd. since it
the Board of commenced operations in November 1997.
Directors of
Aeronautics Defense
Systems Ltd.

Moshe Caspi Chief Technology Moshe Caspi was the co-founder of Aeronautics Defense Systems Ltd. since
Officer of it commenced operations in November 1997.
Aeronautics Defense
Systems Ltd.

Uri Manor CEO of Yoel Uri Manor serves as a representative of RAFAEL-Armament Development
Technologies Ltd. Authority Ltd. in South America and also serves as CEO of Yoel Technologies
Ltd., a private Israeli holding company.

Yossi Attorney Yosef Sade is a lecturer at the Administration College in Rishon Le'Zion,
Sade Israel and has practiced law as a solo practitioner since August 2001. From
1998 to August 2001, he served as legal counsel at Elta Ltd., a company
controlled by Israel Aircraft Industries Ltd.

A-2

DIRECTORS AND EXECUTIVE OFFICERS OF ITS TECHNOLOGIES PTE. LTD.

The following schedule sets forth the name and present principal
occupation or employment, and material occupations, positions, offices or
employments for the past five years, of each of the directors and executive
officers of iTS Technologies Pte. Ltd. Unless otherwise indicated, each person
is a citizen of the state of Singapore and the business address of each such
person is c/o iTS Technologies Pte. Ltd., 24 Ang Mo Kio Street 65, Singapore,
569061 and the telephone number at this address is 011-65-64818888. Unless
otherwise indicated, each such person has held his or her present occupation as
set forth below for the last five years.

Present Principal
Name Occupation Material Positions Held During Last Five Years
- -------------------- -------------------- ---------------------------------------------------------------------------

Seah Moon Ming President of Seah Moon Ming serves as President of Singapore Technologies Electronics
Singapore Limited and serves as Chairman of the Board of Directors of iTS
Technologies Technologies Pte. Ltd.
Electronics
Limited

Pritam Vice President Pritam Singh has served as Vice President (Asia Pacific Operations) of
Singh (Asia Pacific Singapore Technologies Electronics Limited since August 1, 2003. Prior
Operations) of to this Mr. Pritam served in the following positions: General Manager of
Singapore ST Training & Simulation Pte Ltd (from January 1, 2002 until July 31,
Technologies 2003); Chief Operating Officer of ST Training & Simulation Pte. Ltd (from
Electronics January 1, 2001 to December 31, 2001); Vice President (Programs) of ST
Limited Training & Simulation Pte Ltd. (from January 1, 2000 until December 31,
2000); and Director (Programs) of ST Training &Simulation Pte Ltd. (from
January 1, 1999 until December 31, 1999).

Yong Thiam Chong President of LSG Yong Thiam Chong has served as President of LSG Singapore Technologies
Singapore Electronics since January 1, 2002 to date. Prior to this position Yong
Technologies Thiam Chong has served as President of ST Training & Simulation Pte.
Electronics Ltd., from January 1, 1999 until December 31, 2001.
Limited

A-3

The Information Agent for our offer is:

Yigal Arnon & Co.
1 Azrieli Center
Tel-Aviv 67021
Israel
Attention.: Orly Tsioni
Telephone: 011-972-3-608-7842
Facsimile: 011-973-3-608-7713

The Depositary for our offer is:

American Stock Transfer & Trust Company
59 Maiden Lane
New York, New York 10038
Attention: Reorganization Department
Telephone: 877-248-6417
Facsimile: 718-234-5001