SC TO-I

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE TO-I

(Rule 13e-4)

TENDER OFFER STATEMENT UNDER SECTION 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934

RADYNE COMSTREAM INC.

(Name of Subject Company (Issuer) and Name of Filing Person (Offeror))

Options to Purchase Common Stock, $.001 Par Value Per Share,
Under the Radyne Comstream Inc. 1996 Incentive Stock Option Plan and
2000 Long-Term Incentive Plan

(Title of Class of Securities)

750611 40 2

(CUSIP Number of Class of Securities)

Garry D. Kline
Chief Financial Officer
Radyne ComStream Inc.
3138 E. Elwood Street
Phoenix, Arizona 85034
(602) 437-9620

(Name, address and telephone number of person authorized to receive notices and communications on behalf of filing person)

Copy to:

Steven D. Pidgeon, Esq.
Snell & Wilmer L.L.P.
One Arizona Center
Phoenix, Arizona 85004-2202
(602) 382-6300

CALCULATION OF FILING FEE

TRANSACTION VALUATION*	AMOUNT OF FILING FEE**
$3,179,024.00		$292.47

* Calculated solely for purposes of determining the filing fee. This amount is calculated on the basis of $2.80, the average of the high and low sales prices of Radyne ComStream’s Common Stock on December 20, 2002, as reported on the Nasdaq National Market, and assumes that options to purchase 1,135,366 shares of Radyne ComStream’s Common Stock will be exchanged and cancelled pursuant to this Offer.

** The amount of the filing fee, calculated in accordance with Rule 0-11 of the Securities and Exchange Act of 1934, as amended, equals $92 for each $1,000,000 of the value of the transaction.

[   ] Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount Previously Paid:	Not applicable	Filing Party:	Not applicable
Form or Registration No.:	Not applicable	Date Filed:	Not applicable

[   ] Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

[   ]	third-party tender offer subject to Rules 14d-1.
[ x ]	issuer tender offer subject to Rule 13e-4.
[   ]	going-private transaction subject to Rule 13e-3.
[   ]	amendment to Schedule 13D under Rule 13d-2.

     Check the following box if the filing is a final amendment reporting the results of the tender offer: [   ]

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TABLE OF CONTENTS

	Item 1. Summary Term Sheet.
	Item 2. Subject Company Information.
	Item 3. Identity and Background of Filing Person.
	Item 4. Terms of the Transaction.
	Item 5. Past Contracts, Transactions, Negotiations, and Agreements.
	Item 6. Purposes of the Transaction and Plans or Proposals.
	Item 7. Source and Amount of Funds or Other Consideration.
	Item 8. Interest in Securities of the Subject Company.
	Item 9. Persons/Assets, Retained, Employed, Compensated, or Used.
	Item 10. Financial Statements.
	Item 11. Additional Information.
	Item 12. Exhibits.
SIGNATURE
EXHIBIT INDEX
EX-99.A.1
EX-99.A.2
EX-99.A.3
EX-99.A.4

Item 1.     Summary Term Sheet.

     The information set forth under “Summary Term Sheet” in the Offer to Exchange, dated December 23, 2002 (the “Offer to Exchange”), attached hereto as Exhibit (a)(1), is incorporated herein by reference.

Item 2.     Subject Company Information.

     (a)  The name of the issuer is Radyne ComStream Inc., a Delaware corporation (the “Company”), and the address of its principal executive offices is 3138 E. Elwood Street, Phoenix, Arizona 85034 (telephone — (602) 437-9620). The information set forth in the Offer to Exchange under “Information Concerning Radyne ComStream” is incorporated herein by reference.

     (b)  This Tender Offer Statement on Schedule TO relates to an offer by the Company to exchange options outstanding under the Radyne ComStream Inc. 1996 Incentive Stock Option Plan (the “1996 Plan”) and 2000 Long-Term Incentive Plan (the “2000 Plan” and together with the 1996 Plan, the “Plans”) to purchase shares of the Company’s common stock, $.001 par value per share (the “Common Stock”), upon the terms and subject to the conditions described in the Offer to Exchange and the related Letter of Transmittal (the “Letter of Transmittal” and, together with the Offer to Exchange, as they may be amended from time to time, the “Offer”), attached hereto as Exhibit (a)(2). The New Options will be granted under the Plans, and upon the terms and conditions described in the Offer. The information set forth in the Offer to Exchange under “Summary Term Sheet,” Section 1 (“Eligibility; Number of Options; Expiration Date”), Section 5 (“Acceptance of Options for Exchange and Issuance of New Options”), and Section 8 (“Source and Amount of Consideration; Terms of New Options”) is incorporated herein by reference.

     (c)  The information set forth in the Offer to Exchange under Section 7 (“Price Range of Common Stock Underlying the Options”) is incorporated herein by reference. No trading market exists for the options to purchase the Company’s Common Stock that are subject to the Offer.

Item 3.     Identity and Background of Filing Person.

     (a)  The information set forth under Item 2(a) above is incorporated by reference.

Item 4.     Terms of the Transaction.

     (a)  The information set forth in the Offer to Exchange under “Summary Term Sheet,” Section 1 (“Eligibility; Number of Options; Expiration Date”), Section 3 (“Procedures for Tendering Options”), Section 4 (“Withdrawal Rights”), Section 5 (“Acceptance of Options for Exchange and Issuance of New Options”), Section 6 (“Conditions of the Offer”), Section 8 (“Source and Amount of Consideration; Terms of New Options”), Section 11 (“Status of Options Acquired by Us in the Offer; Accounting Consequences of the Offer”), Section 12 (“Legal Matters; Regulatory Approvals”), Section 13 (“Material Federal Income Tax Consequences”)

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and Section 14 (“Extension of Offer; Termination; Amendment”) is incorporated herein by reference.

     (b)  The Company’s directors and executive officers are not eligible to participate in the offer.

Item 5.     Past Contracts, Transactions, Negotiations, and Agreements.

     (e)  The information set forth in the Offer to Exchange under Section 10 (“Interests of Directors and Officers; Transactions and Arrangements Concerning the Options”) is incorporated herein reference.

Item 6.     Purposes of the Transaction and Plans or Proposals.

     (a)  The information set forth in the Offer to Exchange under Section 2 (“Purpose of the Offer”) is incorporated herein by reference.

     (b)  The information set forth in the Offer to Exchange under Section 5 (“Acceptance of Options for Exchange and Issuance of New Options”) and Section 11 (“Status of Options Acquired by Us in the Offer; Accounting Consequences of the Offer”) is incorporated herein by reference.

     (c)  The information set forth in the Offer to Exchange under Section 2 (“Purpose of the Offer”) is incorporated herein by reference.

Item 7.     Source and Amount of Funds or Other Consideration.

     (a)  The information set forth in the Offer to Exchange under Section 8 (“Source and Amount of Consideration; Terms of New Options”) and Section 15 (“Fees and Expenses”) is incorporated herein by reference.

     (b)  The information set forth in the Offer to Exchange under Section 6 (“Conditions of the Offer”) is incorporated herein by reference.

     (d)  Not applicable.

Item 8.     Interest in Securities of the Subject Company.

     (a)  The information set forth in the Offer to Exchange under Section 10 (“Interests of Directors and Officers; Transactions and Arrangement Concerning the Options”) is incorporated herein by reference.

     (b)  The information set forth in the Offer to Exchange under Section 10 (“Interests of Directors and Officers; Transactions and Arrangement Concerning the Options”) is incorporated herein by reference.

Item 9.     Persons/Assets, Retained, Employed, Compensated, or Used.

     (a)  Not applicable.

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Item 10.     Financial Statements.

     (a)  The information set forth in the Offer to Exchange under Section 9 (“Information Concerning Radyne ComStream”) and Section 16 (“Additional Information”) and in the Company’s (i) Annual Report on Form 10-K for the year ended December 31, 2001, filed with the Securities and Exchange Commission on April 1, 2002; (ii) Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, filed with the Securities and Exchange Commission on May 15, 2002; (iii) Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, filed with the Securities and Exchange Commission on August 19, 2002; and (iv) Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, filed with the Securities and Exchange Commission on November 14, 2002, as amended, which contains the Company’s financial statements, is incorporated herein by reference. A copy of the Annual Report on Form 10-K and the Quarterly Reports on Form 10-Q can be accessed electronically on the Securities and Exchange Commission’s web site at www.sec.gov.

     (b)  Not applicable.

Item 11.     Additional Information.

     (a)  The information set forth in the Offer to Exchange under Section 10 (“Interests of Directors and Officers; Transactions and Arrangements Concerning the Options”) and Section 12 (“Legal Matters; Regulatory Approvals”) is incorporated herein by reference.

     (b)  Not applicable.

Item 12.     Exhibits.

(a)	(1)	Offer to Exchange, dated December 23, 2002
	(2)	Form of Letter of Transmittal
	(3)	Form of Confirmation to Optionees Electing to Participate in the Offer to Exchange
	(4)	Form of Letter to Eligible Option Holders
	(5)	The Company’s Annual Report on Form 10-K for the year ended December 31, 2001, filed with the Securities and Exchange Commission on April 1, 2002 and incorporated by reference*
	(6)	The Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, filed with the Securities and Exchange Commission on May 15, 2002 and incorporated by reference*
	(7)	The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, filed with the Securities and Exchange Commission on August 19, 2002 and incorporated by reference*

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	(8)	The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, filed with the Securities and Exchange Commission on November 14, 2002 and incorporated by reference*
(b)		Not applicable.
(d)	(1)	Radyne ComStream Inc. 2000 Long-Term Incentive Plan incorporated by reference to Exhibit 4 to the Company’s Registration Statement on Form S-8, as filed with the Commission on July 19, 2000 (File No. 333-41704)*
(d)	(2)	Radyne ComStream Inc. 1996 Incentive Stock Option Plan incorporated by reference to Exhibit 4 to the Company’s Registration Statement on Form S-8, as filed with the Commission on March 12, 1997 (File No. 333-23159), as amended by an Amendment to 1996 Incentive Stock Option Plan incorporated by reference to Exhibit 4 to the Company’s Registration Statement on Form S-8, as filed with the Commission on November 18, 1998 (File No. 333-67469)*
(g)		Not applicable.
(h)		Not applicable.

     *Previously filed

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SIGNATURE

     After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Schedule TO is true, complete and correct.

Dated: December 23, 2002.	RADYNE COMSTREAM INC.
	By: /s/ Garry D. Kline ——————————— Garry D. Kline Chief Financial Officer

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EXHIBIT INDEX

 

EXHIBIT NO.	DESCRIPTION
(a)(1)	Offer to Exchange, dated December 23, 2002
(a)(2)	Form of Letter of Transmittal
(a)(3)	Form of Confirmation to Optionees Electing to Participate in the Offer to Exchange.
(a)(4)	Form of Letter to Eligible Option Holders
(a)(5)	The Company’s Annual Report on Form 10-K for the year ended December 31, 2001, filed with the Securities and Exchange Commission on April 1, 2002 and incorporated by reference*
(a)(6)	The Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, filed with the Securities and Exchange Commission on May 15, 2002 and incorporated by reference*
(a)(7)	The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, filed with the Securities and Exchange Commission on August 19, 2002 and incorporated by reference*
(a)(8)	The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, filed with the Securities and Exchange Commission on November 14, 2002 and incorporated by reference*
(d)(1)	Radyne ComStream Inc. 2000 Long-Term Incentive Plan incorporated by reference to Exhibit 4 to the Company’s Registration Statement, as filed with the commission on July 19, 2000 (File No. 333-41704)*
(d)(2)	Radyne ComStream Inc. 1996 Incentive Stock Option Plan incorporated by reference to Exhibit 4 to the Company’s Registration Statement on Form S-8, as filed with the Commission on March 12, 1997 (File No. 333-23159), as amended by an Amendment to 1996 Incentive Stock Option Plan incorporated by reference to Exhibit 4 to the Company’s Registration Statement on Form S-8, as filed with the Commission on November 18, 1998 (File No. 333-67469)*

*Previously filed

8 EX-99.A.1 3 p67339exv99waw1.txt EX-99.A.1 Exhibit 99.A.1 RADYNE COMSTREAM INC. OFFER TO EXCHANGE OUTSTANDING OPTIONS FOR NEW OPTIONS THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, MOUNTAIN STANDARD TIME, ON JANUARY 22, 2003, UNLESS THE OFFER IS EXTENDED. We are offering eligible employees the opportunity to exchange all options outstanding under the Radyne ComStream Inc. 1996 Incentive Stock Option Plan (the "1996 Plan") and 2000 Long-Term Incentive Plan (the "2000 Plan" and, together with the "1996 Plan," the "Plans") to purchase shares of our common stock that have exercise prices ranging between $6.00 and $8.25 and between $14.00 and $14.63 per share for new options that we will grant under the Plans and pursuant to a new option agreement ("New Options"). Executive officers, directors and non-employees are not eligible to participate in this exchange offer. Additionally, employees who received option grants after June 15, 2002, are not permitted to participate in this offer. We are making this offer upon the terms and subject to the conditions set forth in this offer to exchange and in the related letter of transmittal (which together, as they may be amended from time to time, constitute the "Offer"). Some key features of the Offer include: - If you elect to voluntarily participate in this program, you will receive an option to purchase new shares based on the following exchange ratio schedule, subject to adjustments for any future stock splits, dividends and similar events:

EXERCISE PRICE RANGE EXCHANGE RATIO EXAMPLE - -------------------- -------------- ------- $6.00 -- $8.25 0.67 shares covered by a new Existing option to purchase option for every 1 share covered 1,000 shares at $7.00 exercise by a canceled option price could be exchanged for option to purchase 670 shares at a new exercise price equal to stock price at date of new option grant $14.00 -- $14.63 0.40 shares covered by a new Existing option to purchase option for every 1 share covered 1,000 shares at $14.50 exercise by a canceled option price could be exchanged for option to purchase 400 shares at a new exercise price equal to stock price at date of new option grant

- Partial tenders within a single option grant will not be permitted. If you elect to tender an option, the entire option must be tendered. - The outstanding options that employees elect to exchange and that we have accepted for exchange will be cancelled on or about January 22, 2003, unless this Offer is extended. The New Options will be granted no sooner than August 23, 2003, which is six months and one day after the date your tendered options are cancelled. - The exercise price of the New Options will be the closing sale price of our common stock as reported on the Nasdaq National Market ("Nasdaq") on the new option grant date. However, we can provide no assurance as to the price of our common stock at any time in the future as the stock price may fluctuate significantly. - The New Options will be vested to the same degree, as a percentage of the option, as your existing options would have been vested on the New Option grant date if you had never tendered your existing options. The New Options will continue to vest on the same schedule as your existing options, as a percentage of the option. If you choose not to exchange your options, then your options will remain outstanding and they will retain their current exercise price, vesting schedule and expiration term. - The New Options will have the same expiration date as the cancelled options. ALTHOUGH OUR BOARD OF DIRECTORS HAS APPROVED THIS OFFER, NEITHER WE NOR OUR BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR OPTIONS FOR EXCHANGE. YOU MUST MAKE YOUR OWN DECISION WHETHER TO TENDER YOUR OPTIONS. In order to receive New Options under the Offer, you must still be employed by the Company on the New Option grant date. Your election to participate in the Offer does not in any way change your status as an at-will employee. In addition, we cannot guarantee that you will receive New Options if a change of control of the Company occurs between the cancellation of your options and the New Option grant date. Shares of our common stock are quoted on Nasdaq under the symbol "RADN." On December 20, 2002, the last reported sale price of our common stock on Nasdaq was $2.77 per share. WE RECOMMEND THAT YOU OBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON STOCK BEFORE DECIDING WHETHER TO TENDER YOUR OPTIONS. You should direct questions about this Offer or requests for assistance or for additional copies of the Offer to Exchange or the letter of transmittal to Garry D. Kline (telephone: (602) 437-9620) at Radyne ComStream Inc., 3138 E. Elwood Street, Phoenix, Arizona 85034, or by e-mail at gkline@radynecomstream.com. ***IMPORTANT*** If you wish to tender your options for exchange, you must complete and sign the letter of transmittal in accordance with its instructions, and mail or otherwise deliver it and any other required documents to Garry D. Kline at Radyne ComStream Inc., 305 North 54th Street, Chandler, Arizona 85226. We recommend that if you choose to mail your documents, you send them by certified or registered mail. Interoffice mail is not recommended since it cannot be tracked. Please keep a copy of all documents. Radyne ComStream will not be responsible for any lost mail, whether interoffice or otherwise. We are not making this Offer to, nor will we accept any tender of options from or on behalf of, option holders in any jurisdiction in which the offer or the acceptance of any tender of options would not be in compliance with the laws of such jurisdiction. However, we may, at our discretion, take any actions necessary for us to make this Offer to option holders in any such jurisdiction. WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR OPTIONS PURSUANT TO THE OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFER OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS DOCUMENT OR IN THE RELATED LETTER OF TRANSMITTAL. IF ANYONE MAKES ANY RECOMMENDATION OR REPRESENTATION TO YOU OR GIVES YOU ANY INFORMATION, YOU MUST NOT RELY UPON THAT RECOMMENDATION, REPRESENTATION OR INFORMATION AS HAVING BEEN AUTHORIZED BY US. SUMMARY TERM SHEET.................................................................. 1 RISKS OF PARTICIPATING IN THE OFFER................................................. 8 1. Eligibility; Number of Options; Expiration Date............................ 10 2. Purpose of the Offer....................................................... 12 3. Procedures for Tendering Options........................................... 13 4. Withdrawal Rights.......................................................... 13 5. Acceptance of Options for Exchange and Issuance of New Options............. 14 6. Conditions of the Offer.................................................... 15 7. Price Range of Common Stock Underlying Options............................. 18 8. Source and Amount of Consideration; Terms of New Options................... 18 9. Information Concerning Radyne ComStream.................................... 22 10. Interests of Directors and Officers; Transactions and Arrangements Concerning the Options..................................................... 23 11. Status of Options Acquired by Us in the Offer; Accounting Consequences of the Offer............................................................... 25 12. Legal Matters; Regulatory Approvals........................................ 26 13. Material Federal Income Tax Consequences................................... 26 14. Extension of Offer; Termination; Amendment................................. 27 15. Fees and Expenses.......................................................... 28 16. Additional Information..................................................... 28 17. Miscellaneous.............................................................. 30 i SUMMARY TERM SHEET The following are answers to some of the questions that you may have about this Offer. We urge you to read carefully the remainder of this offer to exchange and the accompanying letter of transmittal because the information in this summary is not complete, and additional important information is contained in the remainder of this offer to exchange and the letter of transmittal. We have included section references to the remainder of this offer to exchange where you can find a more complete description of the topics in this summary. - WHAT SECURITIES ARE WE OFFERING TO EXCHANGE? We are offering to exchange all stock options having exercise prices ranging between $6.00 and $8.25 and between $14.00 and $14.63 per share under the Radyne ComStream Inc. 1996 Incentive Stock Option Plan and 2000 Long-Term Incentive Plan. The options eligible to be tendered cover a total of 1,135,366 shares of our common stock and have exercise prices ranging from $6.00 to $14.63. We will not accept partial tenders of options within an individual option grant. If you tender an eligible option, you must tender that entire option and not a portion of it. (Section 1) - MUST I EXCHANGE AN ENTIRE OPTION OR CAN I DECIDE TO CANCEL ONLY A PORTION OF AN OPTION? You may not cancel only a portion of an option. You may, however, choose to cancel one unexercised option in its entirety even if you hold other options within one of the two exercise price ranges ($6.00 to $8.25 and $14.00 to $14.63). By way of example, if you have an option for 1,000 shares at an exercise price of $7.00, an option for 1,500 shares at an exercise price of $14.25, and an option for 500 shares at an exercise price of $14.50, you could elect to cancel all three, only the $7.00 option, only the $14.25 option, only the $14.50 option, or none of the options. You may not elect to cancel only 500 shares of the $7.00 option. - WHY ARE WE MAKING THE OFFER? Many of our employees have current outstanding options with exercise prices that are significantly higher than the current fair market value of our common stock. By making this offer to exchange outstanding options for New Options, we intend to provide our employees with the benefit of owning options that over time may have a greater potential to increase in value, create better performance incentives for employees and thereby maximize stockholder value. (Section 2) - WHAT ARE THE CONDITIONS TO THE OFFER? The Offer is not conditioned upon a minimum number of options being tendered. However, the Offer is subject to a number of conditions, including the conditions described in Section 6. We urge you to carefully read these conditions. (Section 6) 1 - ARE THERE ANY ELIGIBILITY REQUIREMENTS I MUST SATISFY AFTER THE EXPIRATION DATE OF THE OFFER TO RECEIVE THE NEW OPTIONS? To receive a grant of New Options pursuant to the Offer, you must be an employee of Radyne ComStream from the date you tender options through the date we grant the New Options. Executive officers, directors and non-employees are not eligible to participate in this Offer. Additionally, employees who received option grants after June 15, 2002, are not permitted to participate in this Offer. As discussed below, we will not grant the New Options until on or about the first business day that is at least six months and one day following the date we cancel the options accepted for exchange. If you are not an employee of Radyne ComStream continuously from the date you tender options through the date we grant the New Options, you will not receive any New Options in exchange for your tendered options that have been accepted for exchange. You also will not receive any other consideration for the options tendered if you are not an employee from the date you tender options through the date we grant the New Options. (Section 1) - HOW MANY NEW OPTIONS WILL I RECEIVE IN EXCHANGE FOR MY TENDERED OPTIONS? Employees who participate in the Offer will receive a New Option on the New Option grant date in exchange for each tendered option. The number of shares covered by each New Option will depend on the exercise price of each tendered option as set forth in the exchange ratio schedule below, subject to adjustments for any future stock splits, stock dividends, and similar events that may occur during the exchange period. (Section 5)

EXERCISE PRICE RANGE EXCHANGE RATIO EXAMPLE - -------------------- -------------- ------- $6.00 -- $8.25 0.67 shares covered by a new Existing option to purchase option for every 1 share covered 1,000 shares at $7.00 exercise by a cancelled option price could be exchanged for option to purchase 670 shares at a new exercise price equal to stock price at date of new option grant $14.00 -- $14.63 0.40 shares covered by a new Existing option to purchase option for every 1 share covered 1,000 shares at $14.50 exercise by a cancelled option price could be exchanged for option to purchase 400 shares at a new exercise price equal to stock price at date of new option grant

For example, if a tendered option covered 1,000 shares at an exercise price of $7.00, the New Option would cover 670 shares (1,000 x .67) and if a tendered option covered 1,000 shares at an exercise price of $14.50, the New Option would cover 400 shares (1,000 x .40). No fractional shares will be issued. If the number of shares subject to a New Option issuable on the grant date would include a fraction of a share, the number of shares will be rounded to the nearest share. (Section 5) 2 - WHEN WILL I RECEIVE MY NEW OPTIONS? We will grant the New Options on or about the first business day that is at least six months and one day after the date we cancel the options accepted for exchange. For example, if we cancel tendered options on January 22, 2003, which is the scheduled Expiration Date of the Offer, the grant date of the New Options will be on or about August 23, 2003. (Section 5) - WHY WON'T I RECEIVE MY NEW OPTIONS IMMEDIATELY AFTER THE EXPIRATION DATE OF THE OFFER? The current accounting rules specify that a minimum of six months and one day must pass before we issue the New Options. If we do not follow this guidance, we would be subject to compensation charges against our earnings for financial reporting purposes. The accounting rules also prevent us from setting the exercise price for the exchange options prior to the actual grant date. Again, if we do not follow these rules, we would be subject to unfavorable accounting treatment for the exchange program. (Section 11) - WHY CAN'T THE COMPANY JUST REPRICE MY CURRENTLY OUTSTANDING OPTIONS? Based on the same accounting guidance mentioned above, "repricing" existing options, or resetting the strike price of these outstanding options to the current market price of our stock, would result in charges against our earnings for financial reporting purposes. (Section 11) - IF I TENDER OPTIONS IN THE OFFER, WILL I BE ELIGIBLE TO RECEIVE OTHER OPTION GRANTS BEFORE I RECEIVE MY NEW OPTIONS? No. Because of accounting rules that could apply to interim option grants as a result of the Offer, we do not expect to grant New Options to current employees until at least six months and one day after the date we cancel the options accepted for exchange. (Section 11) - WHAT HAPPENS IF RADYNE COMSTREAM IS ACQUIRED DURING THE PERIOD AFTER MY OPTIONS ARE CANCELLED BUT BEFORE I AM GRANTED NEW OPTIONS? It is possible that prior to the grant date of the New Options we might enter into an agreement for a merger into another company or change of control transaction. These types of transactions could have substantial effects on our stock price, including substantial stock price appreciation. Depending on the structure of a transaction, option holders participating in this Offer might be deprived of any further price appreciation in the common stock or deprived of the opportunity to participate in the Offer. If we are a party to a merger into another company or change of control transaction before the grant date of the New Options, we will endeavor to negotiate as part of the transaction an agreement for the acquiring entity to grant options or compensation comparable to the New Options to continuing employees, although there can be no assurance that we would be successful in negotiating such an agreement. 3 Further, we cannot guarantee that the acquiring company in any change of control transaction would agree to assume existing options and assume the obligation to issue New Options pursuant to the Offer. Therefore, it is possible that you may not receive any New Options, securities of the surviving company or other consideration in exchange for your tendered option if we are acquired before the New Options are granted. We reserve the right, in the event of a merger into another company or change of control transaction, to take any actions we deem necessary or appropriate to complete a transaction that our board of directors believes is in the best interest of our company and our stockholders. This could include terminating your right to receive New Options under this Offer. If we were to do so, employees who tendered options pursuant to this Offer would not receive New Options to purchase our common stock, or securities of the acquiror or any other consideration for their tendered options. (Section 1) - WHAT WILL THE EXERCISE PRICE OF THE NEW OPTIONS BE? The exercise price of the New Options will be equal to the last reported sale price of our common stock on Nasdaq, or such other national securities exchange or inter-dealer quotation system on which our common stock is then traded, on the date we grant the New Options. Accordingly, we cannot predict the exercise price of the New Options. The exercise price of any option you tender is at least $6.00 per share. The closing price of our common stock was $2.77 per share on December 20, 2002. HOWEVER, BECAUSE WE WILL NOT GRANT NEW OPTIONS UNTIL AT LEAST SIX MONTHS AND ONE DAY AFTER THE DATE WE CANCEL THE OPTIONS ACCEPTED FOR EXCHANGE, THE NEW OPTIONS MAY HAVE A HIGHER EXERCISE PRICE THAN SOME OR ALL OF YOUR CURRENT OPTIONS. WE RECOMMEND THAT YOU OBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON STOCK BEFORE DECIDING WHETHER TO TENDER YOUR OPTIONS. (Section 8) - IF THE EXERCISE PRICE ON THE NEW OPTIONS IS HIGHER THAN IT WAS ON MY TENDERED OPTIONS, CAN I REVERT TO MY ORIGINAL GRANT WITH ITS ORIGINAL EXERCISE PRICE? No. Once your tendered options have been cancelled, it is not possible to regrant them. Because the New Option grant date is more than six months after the date we cancelled the options accepted for exchange and the market price of our stock is volatile, it is possible that the New Options have a higher exercise price than your current options. We recommend that you obtain current market quotations for our common stock before deciding whether to exchange your options. You must carefully consider the exercise price of your existing options and your expectations of the future value of the stock. (Section 8) - AFTER THE GRANT OF MY NEW OPTIONS, WHAT HAPPENS IF I AGAIN END UP "UNDERWATER?" We are implementing the Offer at this time due to the stock market conditions that have affected many companies, throughout the country. Therefore, this is intended to be a one-time offer. We do not currently expect to implement such a program again in the foreseeable future. If your stock options had a term of ten years from the grant date, subject to continued employment, the price for common stock may appreciate over the long term even if the exercise price of your options is above the trading price of our common stock for some period of time 4 after the grant date of the New Options. However, we can provide no assurance as to the price of our common stock at any time in the future. (Section 8) - WHAT WILL THE VESTING SCHEDULE OF THE NEW OPTION BE? The vesting of the New Options will be on the same schedule as your tendered options, as percentages of the options. On the New Option grant date, the New Option will be vested to the same extent, as a percentage of the option, that your tendered options would have been vested if they had remained outstanding until the New Option grant date. All vested shares on the New Option grant date will be immediately exercisable. (Section 8) - DO I HAVE TO TENDER OPTIONS FOR ALL OR ANY OF THE SHARES SUBJECT TO THOSE OPTIONS? There are two ranges of eligible options: those with current exercise prices between $6.00 and $8.25 per share and those with current exercise prices between $14.00 and $14.63 per share. We will not accept partial tenders of individual options. If you tender an eligible option, you must tender that entire option and not a portion of it. (Section 8) - WILL I HAVE TO PAY TAXES IF I EXCHANGE MY OPTIONS IN THE OFFER? We believe that the exchange will be treated as non-taxable for U.S. federal income tax purposes, and that U.S. citizens and residents who exchange outstanding options for New Options should not be required to recognize income for U.S. federal income tax purposes either at the time of the surrender of outstanding options or at the time of grant of the New Options. However, we are not in a position to provide tax advice, and we strongly recommend that you consult with your tax advisor to determine the tax consequences to you of this Offer. Tax residents of jurisdictions other than the U.S. may have different consequences and should consult with their own tax advisor to determine the tax consequences of participating or declining to participate in the Offer. (Section 13) - WHEN DOES THE OFFER EXPIRE? CAN THE OFFER BE EXTENDED, AND IF SO, HOW WILL I BE NOTIFIED IF IT IS EXTENDED? The Offer expires on January 22, 2003, at 12:00 midnight, Mountain Standard Time, unless we choose to extend it. We may, at our discretion, extend the Offer at any time, but we cannot assure you that the Offer will be extended or, if extended, for how long. If the Offer is extended, we will make a public announcement of the extension no later than 9:00 a.m. on the next business day following the previously scheduled expiration of the Offer period. (Section 1) - HOW DO I TENDER MY OPTIONS? If you decide to tender your options, you must deliver, before 12:00 midnight, Mountain Standard Time, on January 22, 2003, a properly completed and duly executed letter of transmittal 5 and any other documents required by the letter of transmittal to Garry D. Kline at Radyne ComStream Inc., 3138 E. Elwood Street, Phoenix, Arizona 85034. If we extend the Offer beyond that time, you must deliver these documents before the extended expiration of the Offer. We reserve the right to reject any or all tenders of options that we determine are not in appropriate form or that we determine are unlawful to accept. Otherwise, we will accept properly and timely tendered options which are not validly withdrawn. Subject to our rights to extend, terminate and amend the Offer, we currently expect that we will accept all such properly tendered options promptly after the expiration of the Offer. We recommend that if you choose to mail your documents, you send them by certified or registered mail. Interoffice mail is not recommended since it cannot be tracked. Please keep a copy of all documents. Radyne ComStream will not be responsible for any lost mail, whether interoffice or otherwise. (Section 3) - HOW DO I FIND OUT HOW MANY OPTIONS I HAVE, THEIR EXERCISE PRICE, AND THE DATE THEY WERE ISSUED? You should contact Garry D. Kline at (602) 437-9620 or by e-mail at gkline@radynecomstream.com if you wish to obtain information with respect to your outstanding options. - WILL I RECEIVE A CONFIRMATION STATEMENT VERIFYING MY TENDER? Promptly after we accept tendered options for exchange, we will send each tendering option holder a letter or e-mail indicating the number of shares subject to the options that we have accepted for exchange, the corresponding number of shares that will be subject to the New Options and the expected grant date of the New Options. - DO I NEED TO DO ANYTHING IF I DO NOT WANT TO TENDER MY OPTIONS? No. If you do not deliver a properly completed and duly executed letter of transmittal prior to the expiration of the Offer, you will not be a participant in the Offer. - WHAT HAPPENS IF I DO NOT SIGN AND RETURN THE LETTER OF TRANSMITTAL BEFORE THE EXPIRATION DATE? Nothing, except that your current options will not be exchanged for New Options. However, we strongly encourage you to return the letter of transmittal even if you choose not to tender your options for exchange because your letter of transmittal will enable Radyne ComStream to track the progress of the option exchange program. 6 - ARE THERE ANY CONSEQUENCES TO ME WITH RESPECT TO FUTURE OPTION GRANTS, IF I DO NOT PARTICIPATE IN THE OFFER? No, your nonparticipation in the Offer will not affect your eligibility to receive options in connection with future option grants. - DURING WHAT PERIOD OF TIME MAY I WITHDRAW PREVIOUSLY TENDERED OPTIONS? You may withdraw your tendered options at any time before 12:00 midnight, Mountain Standard Time, on January 22, 2003. If we extend the Offer beyond that time, you may withdraw your tendered options at any time until the extended expiration of the Offer. In addition, unless we accept your tendered options for exchange before 12:00 midnight, Mountain Standard Time, on February 25, 2003, the date that is 40 business days after the commencement of the Offer, you may withdraw your tendered options at any time after February 25, 2003. To withdraw tendered options, you must deliver to us a written notice of withdrawal, with the required information while you still have the right to withdraw the tendered options. Once you have withdrawn options, you may re-tender options only by again following the delivery procedures described above. (Section 4) - WHAT DOES MANAGEMENT AND THE BOARD OF DIRECTORS THINK OF THE OFFER? Although the board of directors has approved this Offer, neither management nor the board of directors makes any recommendation as to whether you should tender or refrain from tendering your options. You must make your own decision whether to tender options. - WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER? For additional information or assistance, you should contact Garry D. Kline (telephone: ((602) 437-9620) at 3138 E. Elwood Street, Phoenix, Arizona 85034 or by e-mail at gkline@radynecomstream.com. 7 RISKS OF PARTICIPATING IN THE OFFER Participation in the Offer involves a number of potential risks, including those described below. This list briefly highlights some of the risks and is necessarily incomplete. Eligible employees should carefully consider these and other risks and are encouraged to speak with an investment and tax advisor as necessary before deciding whether and to what extent to participate in the Offer. In addition, we strongly urge you to carefully read the remainder of this Offer before deciding whether and to what extent to participate. The list of risks does not include certain risks that may apply to employees who live and work outside of the United States. - PARTICIPATION IN THE OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL AUGUST 23, 2003 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or compensation committee chooses to make them. However, if we were to grant you options on any date that is earlier than six months and one day after the date we cancel the options accepted for exchange, we would be required for financial reporting purposes to record compensation expense against our earnings. Therefore, if you participate in the Offer, you will not be eligible to receive any option grants until August 23, 2003 at the earliest. - NONPARTICIPATION IN THE OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE THE NEW OPTIONS THAT ARE LIKELY TO CARRY A LOWER EXERCISE PRICE THAN YOUR CURRENT OPTIONS. Eligible option holders who choose not to participate in this Offer will maintain their current options at their current exercise price. Nonparticipants will not be granted the New Options that are likely to have a lower exercise price than the eligible options they currently hold. - IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTIONS, YOU WILL RECEIVE NOTHING. Once your option is cancelled, it cannot be reinstated. Accordingly, if your employment terminates for any reason prior to the grant of the New Options, you will have the benefit of neither the cancelled option nor the New Option. - WE INVESTIGATE STRATEGIC OPPORTUNITIES FROM TIME TO TIME, WHICH, IF CONCLUDED, COULD AFFECT THE PRICING AND/OR TERMS OF YOUR NEW OPTIONS. We consistently evaluate strategic opportunities that may arise, including additional capital infusions, joint ventures, strategic partnerships, acquisitions and the purchase or sale of assets. If any of these transactions were to occur before the New Options are granted, and our stock price appreciates, your New Options could be granted at a higher exercise price, and could be subject to additional terms and conditions required by an investing or acquiring party. 8 - WE CANNOT ASSURE YOU THAT PARTICIPATION IN THE OFFER WILL RESULT IN YOUR RECEIVING NEW OPTIONS WITH A LOWER EXERCISE PRICE THAN YOUR EXISTING OPTIONS. If our stock price increases after the date your tendered options are cancelled, your New Options might have a higher exercise price than the tendered and cancelled options. For example, if you cancel options with a $6.00 exercise price per share, and our stock price appreciates to $7.00 when the New Option grants are made, your New Option will have a higher exercise price than the cancelled option. - YOUR NEW OPTIONS WILL BE SUBJECT TO THE GENERAL RISKS OF OUR BUSINESS. For a description of risks related to our business, please see Section 16. 9 THE OFFER 1. ELIGIBILITY; NUMBER OF OPTIONS; EXPIRATION DATE. Employees who hold options to purchase shares of our common stock with exercise prices that fall within the following two ranges -- between $6.00 and $8.25 per share and between $14.00 and $14.63 per share -- and that are granted under the Plans are eligible to participate in the Offer. However, executive officers, directors and non-employees are not eligible to participate in this Offer. Additionally, employees who received option grants after June 15, 2002, are not permitted to participate in this Offer. Upon the terms and subject to the conditions of the Offer, we will exchange for New Options all eligible options granted under our Plans. Only options that are properly tendered and not validly withdrawn in accordance with Section 4 before the Expiration Date, will be accepted. We will not accept partial tenders of individual options. Therefore, if you elect to tender an option, you must tender that entire option. The options eligible to be tendered cover a total of 1,135,366 shares of our common stock and have exercise prices ranging from $6.00 to $14.63. The shares of common stock issuable upon exercise of eligible options represent approximately 7.5% of the total shares of our common stock outstanding. If you elect to participate in the Offer you will receive a New Option on the New Option grant date in exchange for each tendered option. The number of shares covered by each New Option will depend on the exercise price of each tendered option as set forth in the exchange ratio schedule below, subject to adjustments for any future stock splits, stock dividends, and similar events that may occur during the exchange period:

EXERCISE PRICE RANGE EXCHANGE RATIO EXAMPLE - -------------------- -------------- ------- $6.00 -- $8.25 0.67 shares covered by a new Existing option to purchase option for every 1 share covered 1,000 shares at $7.00 exercise by a cancelled option price could be exchanged for option to purchase 670 shares at a new exercise price equal to stock price at date of new option grant $14.00 -- $14.63 0.40 shares covered by a new Existing option to purchase option for every 1 share covered 1,000 shares at $14.50 exercise by a cancelled option price could be exchanged for option to purchase 400 shares at a new exercise price equal to stock price at date of new option grant

No fractional shares will be issued. If the number of shares subject to a New Option issuable on the grant date would include a fraction of a share, the number of shares will be rounded to the nearest share. All New Options will be subject to the terms of the applicable Plan and to a new option agreement between you and us. If you are not a current employee of Radyne ComStream continuously from the date you tender options through the date we grant the New Options, you 10 will not receive any New Options in exchange for your tendered options that have been accepted for exchange. You also will not receive any other consideration for your tendered options if you are not an employee from the date you tender options through the date we grant the New Options. We are also reserving the right, in the event of a merger into another company or change of control transaction after the Expiration Date but before the grant date of the New Options, to take any actions we deem necessary or appropriate to complete a transaction that our board of directors believes is in the best interest of our company and our stockholders. This could include terminating the right to receive New Options under this Offer. If we were to terminate your right to receive New Options under this Offer in connection with such a merger into another company or change of control transaction, employees who tendered options pursuant to this Offer would not receive New Options to purchase our common stock, or securities of the acquiror, or any other consideration for their tendered options. If we are a party to a merger into another company or change of control transaction before the grant date of the New Options, we will endeavor to negotiate as part of the transaction an agreement for the acquiring entity to grant options or compensation comparable to the New Options that would have been received under the Offer, although there can be no assurance that we would be successful in negotiating such an agreement. We presently have no plans or proposals that relate to or would result in a change of control of Radyne ComStream Inc. Section 2 of this offer to exchange describes our future plans. The Expiration Date of the Offer will be 12:00 midnight, Mountain Standard Time, on January 22, 2003, unless we, in our discretion, have extended the period of time during which the Offer will remain open. See Section 14 for a description of our rights to extend, delay, terminate, and amend the Offer. If we decide to take any of the following actions, we will publish notice of such action and extend the Offer for a period of ten business days after the date of such publication: (a) (1) we increase or decrease the amount of consideration offered for the options; (2) we decrease the number of options eligible to be tendered in the Offer; or (3) we increase the number of options eligible to be tendered in the Offer by an amount that exceeds 2% of the shares of common stock issuable upon exercise of the options that are subject to the Offer immediately prior to the increase; and (b) the Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that notice of such increase or decrease is first published, sent or given in the manner specified in Section 14. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, Mountain Standard Time. 11 2. PURPOSE OF THE OFFER. Some of our outstanding options, whether or not they are currently exercisable, have exercise prices that are significantly higher than the current fair market value of our common stock. By making this offer to exchange outstanding options for New Options, we intend to provide our employees with the benefit of owning options that over time may have a greater potential to increase in value, create better performance incentives for employees and thereby maximize stockholder value. We consistently evaluate strategic opportunities that may arise, including additional capital infusions, joint ventures, strategic partnerships, acquisitions and the purchase or sale of assets. Subject to the foregoing, and except as otherwise disclosed in this Offer or in our filings with the SEC, as of the date of this filing, we have no definitive plans or proposals that have not been publicly disclosed that relate to or would result in: (a) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving us or any of our subsidiaries; (b) any purchase, sale or transfer of a material amount of our assets or the assets of any of our subsidiaries; (c) any material change in our present dividend policy, or our indebtedness or capitalization; (d) any change in our present board of directors or management, including a change in the number or term of directors or to fill any existing board vacancies or to change any executive officer's material terms of employment; (e) any other material change in our corporate structure or business; (f) the suspension of our obligation to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act; (g) the acquisition by any person of any of our securities or the disposition of any of our securities; or (h) any change in our certificate of incorporation or bylaws, or any actions which may impede the acquisition of control of us by any person. Nothing contained herein shall restrict our ability to any of the foregoing. Neither we nor our board of directors makes any recommendation as to whether you should tender your options, nor have we authorized any person to make any such recommendation. You are urged to evaluate carefully all of the information in this Offer and to consult your own investment and tax advisors. You must make your own decision whether to tender your options for exchange. 12 3. PROCEDURES FOR TENDERING OPTIONS. PROPER TENDER OF OPTIONS. To validly tender your options pursuant to the Offer, you must, in accordance with the terms of the letter of transmittal, properly complete, duly execute and deliver the letter of transmittal along with any other required documents to Garry D. Kline at Radyne ComStream Inc., 3138 E. Elwood Street, Phoenix, Arizona 85034, before the Expiration Date. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING LETTERS OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING OPTION HOLDER. IF DELIVERY IS BY MAIL, WE RECOMMEND THAT YOU USE REGISTERED MAIL WITH RETURN RECEIPT REQUESTED AND PROPERLY INSURE YOUR PACKAGE. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY DELIVERY. RADYNE COMSTREAM WILL NOT BE RESPONSIBLE FOR ANY LOST MAIL, WHETHER INTEROFFICE OR OTHERWISE. DETERMINATION OF VALIDITY; REJECTION OF OPTIONS; WAIVER OF DEFECTS; NO OBLIGATION TO GIVE NOTICE OF DEFECTS. We will determine, in our discretion, all questions as to form of documents and the validity, form, eligibility, including time of receipt, and acceptance of any tender of options. Our determination of these matters will be final and binding on all parties. We reserve the right to reject any or all tenders of options that we determine are not in appropriate form or that we determine are unlawful to accept. Otherwise, we will accept properly and timely tendered options, which are not validly withdrawn. We also reserve the right to waive any of the conditions of the Offer as to all option holders or any defect or irregularity in any tender with respect to all of the tendered options or option holders who have the same defect or irregularity. No tender of options will be deemed to have been properly made until all defects or irregularities have been cured by the tendering option holder or waived by us. Neither we nor any other person is obligated to give notice of any defects or irregularities in tenders, nor will anyone incur any liability for failure to give any such notice. OUR ACCEPTANCE CONSTITUTES AN AGREEMENT. Your tender of options pursuant to the procedures described above constitutes your acceptance of the terms and conditions of the Offer. OUR ACCEPTANCE FOR EXCHANGE OF YOUR OPTIONS TENDERED BY YOU PURSUANT TO THE OFFER WILL CONSTITUTE A BINDING AGREEMENT BETWEEN YOU AND US UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THE OFFER. Subject to our rights to extend, terminate and amend the Offer, we currently expect that we will accept promptly after the Expiration Date of the Offer all properly tendered options that have not been validly withdrawn. 4. WITHDRAWAL RIGHTS. You may only withdraw your tendered options in accordance with the provisions of this Section 4. You may withdraw your tendered options at any time before 12:00 midnight, Mountain Standard Time, on January 22, 2003. If we extend the Offer beyond that time, you may withdraw your tendered options at any time until the extended expiration of the Offer. In addition, unless we accept your tendered options for exchange before 12:00 midnight, Mountain 13 Standard Time, on February 25, 2003, the date that is 40 business days from the commencement of the Offer, you may withdraw your tendered options at any time after February 25, 2003. To validly withdraw tendered options, an option holder must deliver to Garry D. Kline at Radyne ComStream Inc., 3138 E. Elwood Street, Phoenix, Arizona 85034, a written notice of withdrawal, with the required information, while the option holder still has the right to withdraw the tendered options. The notice of withdrawal must specify the name of the option holder who tendered the options to be withdrawn, the grant date, exercise price, and the number of option shares to be withdrawn. Except as described in the following sentence, the notice of withdrawal must be executed by the option holder who tendered the options to be withdrawn exactly as such option holder's name appears on the option agreement or agreements evidencing such options. If the signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or another person acting in a fiduciary or representative capacity, the signer's full title and proper evidence of the authority of such person to act in such capacity must be indicated on the notice of withdrawal. You may not rescind any withdrawal, and any options you withdraw will thereafter be deemed not properly tendered for purposes of the Offer, unless you properly re-tender those options before the Expiration Date by following the procedures described in Section 3. Neither Radyne ComStream nor any other person is obligated to give notice of any defects or irregularities in any notice of withdrawal, nor will anyone incur any liability for failure to give any such notice. We will determine, in our discretion, all questions as to the form and validity, including time of receipt, of notices of withdrawal. Our determination of these matters will be final and binding. 5. ACCEPTANCE OF OPTIONS FOR EXCHANGE AND ISSUANCE OF NEW OPTIONS. Upon the terms and subject to the conditions of this Offer, following the Expiration Date, we will promptly accept for exchange and cancel options properly tendered and not validly withdrawn before the Expiration Date. If your options are properly tendered and accepted for exchange on January 22, 2003, the scheduled Expiration Date of the Offer, you will be granted New Options on or about August 23, 2003, which is the first business day that is at least six months and one day following the date we cancel the options accepted for exchange. If we extend the date by which we must accept and cancel options properly tendered for exchange, you will be granted New Options on a subsequent business day that is on or about the first business day at least six months and one day following the extended date. Because of accounting rules that could apply to interim option grants as a result of the Offer, we do not expect to grant New Options to current employees until at least six months and one day after the date we cancel the options accepted for exchange. Therefore, if you participate in the Offer, you will not be eligible to receive any option grants until August 23, 2003 at the earliest. If you elect to participate in the Offer you will receive a New Option on the New Option grant date in exchange for each tendered option. The number of shares covered by each New Option will depend on the exercise price of each tendered option as set forth in the exchange 14 ratio schedule below, subject to adjustments for any future stock splits, stock dividends, and similar events that may occur during the exchange period:

EXERCISE PRICE RANGE EXCHANGE RATIO EXAMPLE - -------------------- -------------- ------- $6.00 -- $8.25 0.67 shares covered by a new Existing option to purchase option for every 1 share covered 1,000 shares at $7.00 exercise by a cancelled option price could be exchanged for option to purchase 670 shares at a new exercise price equal to stock price at date of new option grant $14.00 -- $14.63 0.40 shares covered by a new Existing option to purchase option for every 1 share covered 1,000 shares at $14.50 exercise by a cancelled option price could be exchanged for option to purchase 400 shares at a new exercise price equal to stock price at date of new option grant

No fractional shares will be issued. If the number of shares subject to a New Option issuable on the grant date would include a fraction of a share, the number of shares will be rounded to the nearest share. If you tender options for exchange as described in the Offer, we may grant you New Options under either of the Plans. If you are not an employee of Radyne ComStream continuously from the date you tender options through the date we grant the New Options, you will not receive any New Options in exchange for your tendered options that have been accepted for exchange. You also will not receive any other consideration for your tendered options if you are not an employee from the date you tender options through the date we grant the New Options. For purposes of the Offer, we will be deemed to have accepted for exchange options that are validly tendered and not properly withdrawn as, if, and when we give oral or written notice to the option holders of our acceptance for exchange of such options. Subject to our rights to extend, terminate, and amend the Offer, we will accept promptly after the expiration of the Offer all properly tendered options that are not validly withdrawn. Promptly after we accept tendered options for exchange, we will send each tendering option holder a letter or e-mail indicating the number of shares subject to the options that we have accepted for exchange, the corresponding number of such shares that will be subject to the New Options, and the expected grant date of the New Options. 6. CONDITIONS OF THE OFFER. Notwithstanding any other provision of the Offer, we will not be required to accept any options tendered for exchange, and we may terminate or amend the Offer, or postpone our acceptance and cancellation of any options tendered for exchange, in each case, subject to Rule 13e-4(f)(5) under the Securities Exchange Act, if at any time on or after January 22, 2003, and prior to the Expiration Date any of the following events has occurred, or has been determined by us to have occurred, and, in our reasonable judgment in any such case and regardless of the 15 circumstances giving rise thereto the occurrence of such event or events makes it inadvisable for us to proceed with the Offer or with such acceptance and cancellation of options tendered for exchange: (a) there shall have been threatened or instituted or be pending any action or proceeding by any government or governmental, regulatory or administrative agency, authority or tribunal or any other person, domestic or foreign, before any court, authority, agency or tribunal that directly or indirectly challenges the making of the Offer, the acquisition of some or all of the tendered options pursuant to the Offer, the issuance of New Options, or otherwise relates in any manner to the Offer or that, in our reasonable judgment, could materially and adversely affect the business, condition (financial or other), income, operations or prospects of Radyne ComStream, or otherwise materially impair in any way the contemplated future conduct of our business or the business of any of our subsidiaries or materially impair the contemplated benefits of the Offer to us; (b) there shall have been any action threatened, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the Offer or us or any of our subsidiaries, by any court or any authority, agency or tribunal that, in our reasonable judgment, would or might directly or indirectly: (1) make the acceptance for exchange of, or issuance of New Options for, some or all of the tendered options illegal or otherwise restrict or prohibit consummation of the Offer or otherwise relates in any manner to the Offer; (2) delay or restrict our ability, or render us unable, to accept for exchange, or issue New Options for, some or all of the tendered options; (3) materially impair the contemplated benefits of the Offer to us; (4) materially and adversely affect the business, condition (financial or other), income, operations or prospects of Radyne ComStream, or otherwise materially impair in any way the contemplated future conduct of our business or the business of any of our subsidiaries or materially impair the contemplated benefits of the Offer to us; (c) there shall have occurred: (1) the suspension of payments in respect of banks in the United States, whether or not mandatory; (2) the commencement of a war, armed hostilities or other international or national crisis directly or indirectly involving the United States; (3) any limitation, whether or not mandatory, by any governmental, regulatory or administrative agency or authority on, or any event that in our 16 reasonable judgment might affect, the extension of credit by banks or other lending institutions in the United States; (4) any negative change in the general political, market, economic or financial conditions in the United States or abroad that has or is reasonably likely to have (in our reasonable judgment) a material adverse effect on the business, condition (financial or other), operations or prospects of Radyne ComStream; or (5) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof. (d) there shall have occurred any change in generally accepted accounting standards which could or would require us for financial reporting purposes to record compensation expense against our earnings in connection with the Offer; (e) a tender or exchange offer with respect to some or all of our common stock, or a merger or acquisition proposal for us, shall have been proposed, announced or made by another person or entity or shall have been publicly disclosed, or we shall have learned that any person, entity or group shall have filed a Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or made a public announcement reflecting an intent to acquire us or any of our subsidiaries or any of the assets or securities of us or any of our subsidiaries; (f) any change or changes shall have occurred in the business, condition (financial or other), assets, income, operations, prospects or stock ownership of Radyne ComStream that, in our reasonable judgment, is or may be material to Radyne ComStream; or (g) the rules and regulations of the Securities and Exchange Commission, Nasdaq, or such other national securities exchange or inter-dealer quotation system on which our common stock is then traded requires that our stockholders approve the Offer. The conditions to the Offer are for our benefit. We may assert them in our discretion regardless of the circumstances giving rise to them prior to the Expiration Date. We may waive them, in whole or in part, at any time and from time to time prior to the Expiration Date, in our discretion, whether or not we waive any other condition to the Offer. If we waive a condition with respect to any option or option holder, we will also waive that condition with respect to all other options and option holders. Our failure at any time to exercise any of these rights will not be deemed a waiver of any such rights. Any determination we make concerning the events described in this Section 6 will be final and binding upon all persons. If we accept options you tender in the Offer, we may defer any grant to you of additional Options for which you may be eligible before the New Option grant date until after the New Option grant date, so that you will be granted no New Options for any reason until at least six months and one day after any of your tendered options have been cancelled. We may defer the grant to you of any additional options in order to avoid incurring compensation expense against our earnings as a result of accounting rules that could apply to these interim option grants as a result of the Offer. 17 7. PRICE RANGE OF COMMON STOCK UNDERLYING OPTIONS. Our common stock trades on the Nasdaq National Market under the symbols "RADN." The following table sets forth the range of high and low trading prices as reported by the Nasdaq National Market for the periods indicated.

HIGH $ LOW $ ------ ----- 2000: First Quarter........................ 35.00 6.50 Second Quarter....................... 23.38 11.13 Third Quarter........................ 17.56 7.81 Fourth Quarter....................... 10.13 3.91 2001: First Quarter........................ 8.63 4.88 Second Quarter....................... 7.36 4.44 Third Quarter........................ 6.17 3.60 Fourth Quarter....................... 6.10 3.54 2002: First Quarter........................ 7.35 4.76 Second Quarter....................... 4.82 3.25 Third Quarter........................ 3.55 1.25 Through December 20, 2002............ 3.60 1.50

As of December 20, 2002, the last reported sale price of our common stock, as quoted on Nasdaq, was $2.77 per share. WE RECOMMEND THAT YOU OBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON STOCK BEFORE DECIDING WHETHER TO TENDER YOUR OPTIONS. 8. SOURCE AND AMOUNT OF CONSIDERATION; TERMS OF NEW OPTIONS. CONSIDERATION. We will issue New Options under our Plans in exchange for outstanding eligible options properly tendered and accepted for exchange by us. TERMS OF NEW OPTIONS. The New Options will be issued under either of the Plans as our Board or Compensation Committee may determine. The New Options will also be granted pursuant to a new option agreement between us and each option holder who has tendered eligible options in the Offer. The following description summarizes the material terms of our Plans and the options granted under our Plans. GENERAL. The maximum number of shares of common stock available for issuance pursuant to the exercise of options granted under our existing Plans are approximately as follows: 18 Radyne ComStream Inc. 1996 Incentive Stock Option Plan 265,739 Radyne ComStream Inc. 2000 Long-Term Incentive Plan 1,688,415 Both the 1996 Incentive Stock Option Plan and the 2000 Long-Term Incentive Plan permit the granting of options intended to qualify as incentive options under the Internal Revenue Code and the granting of options that do not qualify as incentive options. ADMINISTRATION. The compensation committee of our board of directors administers each of our existing Plans. The compensation committee is composed of three directors who are intended to be "non-employee directors" as defined in Rule 16b-3 under the Securities Exchange Act and "outside directors" for purposes of Section 162(m) of the Internal Revenue Code. The members of the compensation committee are appointed by the board to serve for such terms as the board may determine by resolution. The board may remove any member of the compensation committee or reconstitute the compensation committee with other directors, subject to the requirements of Rule 16b-3. TERM. Each New Option will have the same expiration date as the cancelled option for which it was exchanged. Your existing options generally have an expiration date of 10 years from the date of grant. TERMINATION. New Options issued under our existing Plans will expire on the same schedule as the cancelled options for which they were exchanged, however in no event will such expiration exceed 10 years. Option agreements generally provide that your New Options will terminate following the termination of your employment, unless the New Options are exercised, to the extent that they were exercisable immediately before such termination, within 90 days following such termination. In the event that the termination of your employment is by reason of permanent and total disability, death, or retirement you, or your executors, administrators, legatees or distributees of your estate, may exercise, within one year following such termination, any New Options held by you that was exercisable immediately before your employment termination. The termination of your New Options under the circumstances specified in this section will result in the termination of your interests in the respective Plan. In addition, your New Options may terminate, together with the respective Plan and all other outstanding options issued to other employees, following the occurrence of certain "corporate transaction" events, as described below. EXERCISE PRICE. The compensation committee will determine the exercise price of each New Options. The exercise price of the New Options to be granted pursuant to the Offer will be equal to the last reported sale price of our common stock on Nasdaq, or such other national securities exchange or inter-dealer quotation system on which our common stock is then traded, on the date of grant. VESTING AND EXERCISE. The New Options will be vested to the same degree, as a percentage of the option, as your existing options would have been vested on the New Option grant date if you had never tendered your existing options. The New Options will continue to vest on the same schedule as your existing options, as a percentage of the option. If you choose 19 not to exchange your options, then your options will remain outstanding and they will retain their current exercise price, vesting schedule and expiration term. Upon the occurrence of a "change of control" (as defined in each plan), the 2000 Plan provides for immediate accelerated vesting of all options while the 1996 Plan provides that if no provision is made to continue the 1996 Plan or assume or replace the outstanding options with new options of a successor entity, then the Company may choose to accelerate the vesting of the options outstanding under the 1996 Plan, but is not obligated to do so. PAYMENT OF EXERCISE PRICE. You may exercise your New Options, in whole or in part, by delivery of a written notice to us on any business day at our principal office addressed to the attention of the compensation committee, which specifies the number of shares for which the New Option is being exercised and which is accompanied by payment in full of the applicable exercise price. The permissible methods of payment of the option exercise price generally are full payment in cash, by check, or, with the compensation committee's consent, in shares of common stock duly endorsed for transfer to us, or by a combination of these methods. TRANSFERABILITY OF OPTIONS. New Options may not be transferred except by will, the laws of descent and distribution or the terms of any applicable trust. Following a transfer, all New Options will continue to be subject to the same terms and conditions that were applicable to the New Options immediately before the transfer. During your lifetime, only you, or your guardian or legal representative in the case of your incapacity or incompetency, may exercise New Options granted to you. REGISTRATION OF OPTION SHARES. The shares of common stock issuable upon exercise of options under our Plans, including the shares that will be issuable upon exercise of all New Options to be granted pursuant to this Offer, have been registered under the Securities Act on a registration statement on Form S-8 filed with the SEC. We will use reasonable efforts to maintain such registration statement on Form S-8. FEDERAL INCOME TAX CONSEQUENCES. The following summary of certain U.S. federal income tax information is based on federal income tax laws currently in effect, is not intended to be exhaustive and does not address all matters that may be relevant to a particular option holder based on his or her specific circumstances. Subject to these limitations, this summary applies to you only if you are an individual who is a citizen or resident of the United States, including an individual who is a lawful permanent resident of the United States or who meets the "substantial presence" test under Section 7701(b) of the U.S. Internal Revenue Code. The summary addresses only current U.S. federal income tax law, which is subject to change (possibly on a retroactive basis), and does not discuss the income tax laws of any state, municipality, or non-U.S. taxing jurisdiction, or U.S. gift and estate tax laws. This summary addresses general U.S. federal income tax implications of option grants and option exercises by delivery of cash consideration under our various Plans and the disposition of stock acquired upon such exercises, and we strongly recommend that you consult your own tax advisor concerning your particular circumstances with respect to these matters. If you exercise an option by delivering consideration other than cash (being so permitted pursuant to your option agreement), special rules apply. You should consult your tax advisor when contemplating such an exercise. 20 Incentive Stock Options Upon the grant or exercise of an incentive stock option, you do not recognize any income for U.S. federal income tax purposes, except to the extent that the exercise causes you to incur alternative minimum tax, which is discussed below. If you hold the shares acquired upon exercise of an incentive stock option beyond the later of (i) two years following the date the incentive stock option was granted and (ii) one year following the date the incentive stock option was exercised (the "holding periods"), you will not recognize any ordinary income with respect to the exercise of the incentive stock option or the sale of shares acquired upon such exercise. In addition, any gain or loss on a subsequent sale of the shares (calculated as the difference between the amount realized on the sale and your tax basis in the shares (generally, the exercise price)) generally will be capital gain or loss. Such capital gain or loss will be long-term capital gain or loss if your holding period for the shares is more than one year. If you dispose of shares acquired upon exercise of an incentive stock option before the expiration of the holding periods, then in most cases the lesser of (i) the excess of the fair market value of the shares when the incentive stock option was exercised over the amount paid for such shares and (ii) the excess of the amount realized on the disposition of the shares over your tax basis in the shares (generally, the exercise price) will be treated as ordinary income in the year of disposition. In addition, upon disposition of the shares before expiration of the holding periods, you will generally recognize capital gain or loss equal to the excess, if any, of the amount realized as a result of such disposition over the sum of (i) your tax basis in the shares immediately before disposition (generally, the exercise price) and (ii) the amount of ordinary income recognized by you as described in the preceding sentence. Any such capital gain or loss will be long-term capital gain or loss if your holding period for the shares is more than one year. Non-Qualified Options Upon exercise of a non-qualified option, you generally will recognize ordinary income in an amount equal to the excess, if any, of the fair market value at time of exercise of the stock issued over the exercise price. Such income is subject to withholding and employment taxes collected from you and payable by us. In addition, when you sell stock acquired upon exercise of a non-qualified option, you generally will recognize capital gain or loss equal to the difference between the amount realized on such sale and your tax basis in the disposed shares (generally, the fair market value of the stock on the date the option was exercised). Such gain or loss will be long-term gain or loss if the holding period of the shares is more than one year. Alternative Minimum Tax The exercise of an incentive stock option may subject you to the alternative minimum tax under Section 55 of the Internal Revenue Code. For alternative minimum tax purposes, upon exercise of an incentive stock option the excess of the fair market value of the shares at the time of exercise over the exercise price is includible in your alternative minimum taxable income. If you pay alternative minimum tax, the amount of such tax generally may be carried forward as a credit against any subsequent year's regular tax in excess of the alternative minimum tax for such year. Also, when you sell the stock acquired upon exercise of the option, the basis of the 21 stock for alternative minimum tax purposes will be equal to its fair market value at the time of exercise. Because the alternative minimum tax calculation may be complex, optionees should consult their own tax advisors prior to exercising incentive stock options. Our statements in this offer to exchange concerning our Plans and the New Options are merely summaries and do not purport to be complete. The statements are subject to, and are qualified in their entirety by reference to, all provisions of the plans and the appropriate form of option agreement. Please contact Garry D. Kline (telephone: (602) 437-9620) at Radyne ComStream Inc., 3138 E. Elwood Street, Phoenix, Arizona 85034, to receive a copy of the Plan and the form of option agreement thereunder. We will promptly furnish you copies of these documents at our expense. 9. INFORMATION CONCERNING RADYNE COMSTREAM. GENERAL. Our principal executive offices are located at 3138 E. Elwood Street, Phoenix, Arizona 85034, and our telephone number is (602) 437-9620. We design, manufacture, install and sell equipment used in the ground-based portion of satellite communication systems to receive, and transmit data, video, audio and Internet over satellite communications links. We also design, manufacture, and sell equipment used in cable television systems. Our products are used in applications for telephone, data, video and audio broadcast communications, private and corporate data networks, Internet applications, and digital television for cable and network broadcast. We serve customers in over 80 countries, including customers in the television broadcast industry, international telecommunications companies, Internet service providers, private communications networks, network and cable television and the United States government. With headquarters in Phoenix, Arizona, and offices throughout the world, Radyne ComStream is publicly traded on NASDAQ under the symbol "RADN." The company's website URL is www.radynecomstream.com. FINANCIAL INFORMATION. The following table sets forth selected consolidated financial and operating data for Radyne ComStream. The selected historical statement of operations data for the years ended December 31, 2000 and December 31, 2001 and the selected historical balance sheet data as of December 31, 2000 and December 31, 2001 have been derived from the consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2001, that have been audited by KPMG LLP, independent accountants. The selected historical statement of operations data for the nine months ended September 30, 2001 and 2002 and the selected historical balance sheet data as of September 30, 2001 and 2002, which are included in our quarterly report on Form 10-Q for the quarter ended September 30, 2002, are unaudited, but include, in the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of such data. The information presented below should be read together with our consolidated financial statements and related notes. We have presented the following data in thousands, except per share amounts. 22

FISCAL YEAR ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30, ------------------------------ ------------------------------- (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) 2001 2000 2002 2001 ------------ ------------ ------------ ------------ OPERATING DATA: Net sales $ 68,471 $ 70,107 $ 43,944 $ 49,422 Gross profit 28,912 31,827 13,625 21,531 Operating gain (loss) 2,793 8,937 (5,187) 2,177 Net income (loss) 1,936 12,441 (5,074) 2,602 Income (loss) per share, basic 0.13 0.89 (0.33) 0.11 Income (loss) per share, diluted 0.13 0.81 (0.33) 0.10 Shares used in per share calculation, basic 14,943,516 13,972,078 15,161,804 14,922,978 Shares used in per share calculation, diluted 15,411,568 15,426,297 15,161,804 15,443,280 BALANCE SHEET DATA: Cash and cash equivalents $ 7,211 $ 16,245 $ 13,750 $ 8,815 Working capital 35,959 33,858 30,296 35,101 Total assets 53,241 51,844 47,579 53,648 Total liabilities 7,893 10,030 6,562 8,906 Stockholders' equity 45,347 41,814 41,017 44,742

- ---------- See "Additional Information" under Section 16 for instructions on how you can obtain copies of our SEC reports that contain the audited financial statements and unaudited financial data we have summarized above. 10. INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING THE OPTIONS. The Company's executive officers and directors are not eligible to participate in this Offer. 23 OWNERSHIP OF RADYNE COMSTREAM INC. COMMON STOCK The following table sets forth certain information known to the Company with respect to beneficial ownership of the Company's common stock as of December 20, 2002, by each of the Company's directors executive officers and all directors and executive officers of the Company as a group.

NUMBER OF PERCENTAGE OF NAME & ADDRESS SHARES (1) CLASS (1) -------------- ---------- --------- Robert C. Fitting(2) 548,640(3) 3.6% Brian J. Duggan(2) 248,580(4) 1.6% Steven W. Eymann(2) 409,467(5) 2.7% Garry D. Kline(2) 254,270(6) 1.6% Yip Loi Lee(2) 36,000(7) * C. J. Waylan(2) 42,000(9) * Dennis W. Elliott(2) 36,000(7) * Kum Chuen Tang(2) 26,300(8) * All directors and executive 1,604,257 10.5% officers of Radyne ComStream as a group (eight persons)

- ---------- * Less than one percent. (1) The numbers and percentages shown include the shares of common stock actually owned as of December 20, 2002, and the shares of common stock that the person or group had the right to acquire within 60 days of such date. In calculating the percentage of ownership, all shares of common stock that the identified person or group had the right to acquire within 60 days of December 20, 2002, upon the exercise of options are deemed to be outstanding for the purpose of computing the percentage of the shares of common stock owned by such person or group, but are not deemed to be outstanding for the purpose of computing the percentage of the shares of common stock owned by any other person. (2) The address for each of these stockholders is: c/o Radyne ComStream Inc., 3138 East Elwood Street, Phoenix, Arizona 85034. (3) Includes 388,086 shares underlying exercisable options held by Mr. Fitting. (4) Includes 230,990 shares underlying exercisable options held by Mr. Duggan. (5) Includes 337,475 shares underlying exercisable options held by Mr. Eymann. (6) Includes 218,082 shares underlying exercisable options held by Mr. Kline. 24 (7) Includes 36,000 shares underlying exercisable options held by each of Messrs. Elliott and Lee. (8) Includes 26,300 shares underlying exercisable options held by Mr. Tang. (9) Includes 31,500 shares underlying exercisable options held by Mr. Waylan. Based upon our records and upon information provided to us by our directors, executive officers, and associates, neither we nor, to the best of our knowledge, any of our directors or executive officers nor any associates of any of the foregoing, has effected any transaction in the options or our common stock during the 60 days prior to this offering. 11. STATUS OF OPTIONS ACQUIRED BY US IN THE OFFER; ACCOUNTING CONSEQUENCES OF THE OFFER. Options we acquire pursuant to the Offer will be cancelled and the shares of common stock subject to those options will be returned to the pool of shares available for grants of New Options and for issuance upon the exercise of such New Options. To the extent such shares are not fully reserved for issuance upon exercise of the New Options to be granted in connection with the Offer, the shares will be available for future awards to employees, directors, and other eligible plan participants without further stockholder action, except as required by applicable law. We believe that Radyne ComStream will not incur any compensation expense solely as a result of the transactions contemplated by the Offer because: - we will not grant any New Options until a business day that is at least six months and one day after the date that we accept and cancel options tendered for exchange; and - the exercise price of all New Options will equal the market value of the common stock on the date we grant the New Options. We may incur compensation expense, however, if we grant any options having an exercise price less than $6.00 to any tendering option holder before the scheduled New Option grant date. Our grant of those options to the tendering option holder would be treated for financial reporting purposes as a variable award to the extent that the number of shares subject to the newly granted options is equal to or less than the number of the option holder's tendered option shares. In this event, we would be required to record as compensation expense the amount by which the market value of the shares subject to the newly granted options exceeds the exercise price of those shares. This compensation expense would accrue as a charge to Radyne ComStream's earnings over the vesting period of the newly granted options. We would adjust this compensation expense periodically based on increases or decreases in the market value of the shares subject to the newly granted options until the options are exercised, forfeited or expired. 25 12. LEGAL MATTERS; REGULATORY APPROVALS. We are not aware of any license or regulatory permit that appears to be material to our business that might be adversely affected by our exchange of options and issuance of New Options as contemplated by the Offer, or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of our options as contemplated herein. Should any such approval or other action be required, we presently contemplate that we will seek such approval or take such other action. We are unable to predict whether we may determine that we are required to delay the acceptance of options for exchange pending the outcome of any such matter. We cannot assure you that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that the failure to obtain any such approval or other action might not result in adverse consequences to our business. Our obligation under the Offer to accept tendered options for exchange and to issue New Options for tendered options is subject to conditions, including the conditions described in Section 6. 13. MATERIAL FEDERAL INCOME TAX CONSEQUENCES. The discussion in this Section 13 is a general summary of the material U.S. federal income tax consequences of the exchange of options pursuant to the Offer. This summary applies to you only if you are an individual who is a citizen or resident of the United States, including an individual who is a lawful permanent resident of the United States or who meets the "substantial Presence" test under Section 7701(b) of the Internal Revenue Code. For a summary addressing general U.S. federal income tax implications of option grants and exercises under our various stock option plans and the disposition of stock acquired upon such exercises, see Section 8 above. This Section 13 addresses only current U.S. federal income tax law, which is subject to change (possibly on a retroactive basis), and expressly does not discuss the income tax laws of any state, municipality, or non-U.S. taxing jurisdiction, or U.S. gift and estate tax laws. The summary below does not discuss all of the tax consequences that may be relevant to you in light of your particular circumstances, nor is it intended to be applicable in all respects to all categories of option holders. Moreover, this summary is provided for general informational purposes only. We are not in a position to provide tax advice, and we strongly recommend that you consult your tax advisor to determine the tax consequences to you of this Offer. We believe that the exchange of outstanding options for New Options will be treated as non-taxable, and that option holders who exchange outstanding options for New Options should not be required to recognize income for U.S. federal income tax purposes either at the time of the surrender of outstanding options or at the time of grant of the New Options. If your current options are incentive stock options, your New Options will be granted as incentive stock options if possible and to the extent that they qualify as incentive stock options under the tax laws in effect on the date of grant of the New Options, including the $100,000 limit discussed below. The holding period of each new incentive stock option will begin on the date the new incentive stock option is granted. New Options will be treated as non-qualified options to the extent such New Option is issued in exchange for an outstanding option which was a non-qualified option or to the extent such New Option exceeds the $100,000 limit discussed below. 26 Under U.S. federal income tax law, no person may receive a number of incentive stock options that become exercisable for the first time in any calendar year which, when aggregated with all other incentive stock options first becoming exercisable in that calendar year, would permit the holder to purchase a number of shares of stock having a value (determined as of the date the option was granted) in excess of $100,000. New Options you receive in exchange for outstanding options will be treated as newly granted options. Accordingly, for purposes of the $100,000 limit, each New Option will be treated as first becoming exercisable in accordance with the vesting schedule of such New Option (regardless of the vesting schedule of the outstanding option that was exchanged for such New Option). Options that we do not accept for exchange will remain outstanding in accordance with their terms. You should consult your tax advisor prior to deciding whether to participate in the exchange to determine the tax status of options that remain outstanding and the tax consequences of exercising such options and disposing of shares received upon exercise (including the determination of the appropriate date at which the one-year and two-year holding periods discussed in Section 8 above should be treated as beginning in the case of options for which incentive stock option status is sought). The foregoing is a summary of certain U.S. federal income tax considerations for option holders in connection with the exchange of outstanding options for New Options. The summary, however, does not address every situation that may arise in connection with the outstanding options or the New Options. For example, it does not deal with the tax implications arising from an optionee's death; nor does it discuss foreign, state or local income tax consequences. The summary is not intended as tax advice or as a substitute for careful tax planning, and each optionee is urged to consult with and rely on his or her own advisors with respect to the tax consequences (foreign, federal, state and local) of the retention of outstanding options, the exchange of outstanding options for New Options, the exercise of New Options and the disposition of shares acquired upon such exercise. WE RECOMMEND THAT YOU CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF PARTICIPATING IN THE OFFER. 14. EXTENSION OF OFFER; TERMINATION; AMENDMENT. We reserve the right, in our discretion, at any time and from time to time, and regardless of whether or not any event set forth in Section 6 has occurred or is deemed by us to have occurred, to extend the period of time during which the Offer is open and thereby delay the acceptance for exchange of any options by giving oral or written notice of such extension to the option holders and making a public announcement thereof. We also reserve the right, in our reasonable judgment, prior to the Expiration Date to terminate or amend the Offer and to postpone our acceptance and cancellation of any options tendered for exchange upon the occurrence of any of the conditions specified in Section 6, by giving oral or written notice of such termination or postponement to the option holders and making a public announcement thereof. Our reservation of the right to delay our acceptance and cancellation of options tendered for exchange is limited by Rule 13e-4(f)(5) promulgated under the Securities Exchange Act, which requires that we must pay the consideration offered or return the options tendered promptly after termination or withdrawal of a tender offer. 27 Subject to compliance with applicable law, we further reserve the right, in our discretion, and regardless of whether any event set forth in Section 6 has occurred or is deemed by us to have occurred, to amend the Offer in any respect, including, without limitation, by decreasing or increasing the consideration offered in the Offer to option holders or by decreasing or increasing the number of options being sought in the Offer. Amendments to the Offer may be made at any time and from time to time by public announcement of the amendment. In the case of an extension, the amendment must be issued no later than 9:00 a.m., Mountain Standard Time, on the next business day after the last previously scheduled or announced Expiration Date. Any public announcement made pursuant to the Offer will be disseminated promptly to option holders in a manner reasonably designated to inform option holders of such change. If we materially change the terms of the Offer or the information concerning the Offer, or if we waive a material condition of the Offer, we will extend the Offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3) under the Securities Exchange Act. These rules require that the minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer, other than a change in price or a change in percentage of securities sought, will depend on the facts and circumstances, including the relative materiality of such terms or information. If we decide to take any of the following actions, we will publish notice of such action and extend the Offer for a period of ten business days after the date of such publication: (a) (1) we increase or decrease the amount of consideration offered for the options; (2) we decrease the number of options eligible to be tendered in the Offer; or (3) we increase the number of options eligible to be tendered in the Offer by an amount that exceeds 2% of the shares of common stock issuable upon exercise of the options that are subject to the Offer immediately prior to the increase; and (b) the Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that notice of such increase or decrease is first published, sent or given in the manner specified in this Section 14. 15. FEES AND EXPENSES. We will not pay any fees or commissions to any broker, dealer or other person for soliciting tenders of options pursuant to this Offer. 16. ADDITIONAL INFORMATION. We have filed with the SEC a Tender Offer Statement on Schedule TO, of which this offer to exchange is a part, with respect to the Offer. This Offer does not contain all of the information contained in the Schedule TO and the exhibits to the Schedule TO. We recommend 28 that you review the Schedule TO, including its exhibits, before making a decision on whether to tender your options. The rules of the SEC allow us to "incorporate by reference" information into this document, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. This Offer incorporates by reference the financial statements and the notes thereto contained in the documents listed below that have been previously filed with the SEC and any future filings it makes with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act, until completion of the Offer: (a) Our Annual Report on Form 10-K for the year ended December 31, 2001, filed with the Securities and Exchange Commission on April 1, 2002; (b) Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, filed with the Securities and Exchange Commission on May 15, 2002; (c) Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, filed with the Securities and Exchange Commission on August 19, 2002; (d) Our Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, filed with the Securities and Exchange Commission on November 14, 2002; (e) Radyne ComStream Inc. 1996 Incentive Stock Option Plan, incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-8, as filed with the commission on March 12, 1997 (File No. 333-23159), as amended by an Amendment to 1996 Incentive Stock Option Plan incorporated by reference to Exhibit 4 to the Company's Registration Statement on Form S-8, as filed with the Commission on November 18, 1998 (File No. 333-67469); and (f) Radyne ComStream Inc. 2000 Long-Term Incentive Plan, incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-8, as filed with the commission on July 19, 2000 (File No. 333-41704). Our SEC filings may be examined, and copies may be obtained, at the following SEC public reference rooms: 450 Fifth Street, N.W. 500 West Madison Street Room 1024 Suite 1400 Washington, D.C. 20549 Chicago, IL 60661 You may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the public on the SEC's Internet site at http://www.sec.gov. We will also provide without charge to each person to whom a copy of this offer to exchange is delivered, upon the written or oral request of any such person, a copy of any or all of 29 the documents to which we have referred you, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference into such documents). Requests should be directed to: Radyne ComStream Inc. 3138 E. Elwood Street Phoenix, Arizona 85034 (602) 437-9620 As you read the foregoing documents, you may find some inconsistencies in information from one document to another. If you find inconsistencies between the documents, or between a document and this offer to exchange, you should rely on the statements made in the most recent document. The information contained in this offer to exchange about Radyne ComStream should be read together with the information contained in the documents to which we have referred you. 17. MISCELLANEOUS. We are not aware of any jurisdiction where the making of the Offer is not in compliance with applicable law. If we become aware of any jurisdiction where the making of the Offer is not in compliance with any valid applicable law, we will make a good faith effort to comply with such law. If, after such good faith effort, we cannot comply with such law, the Offer will not be made to, nor will tenders be accepted from or on behalf of, the option holders residing in such jurisdiction. WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR OPTIONS PURSUANT TO THE OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS DOCUMENT OR IN THE RELATED LETTER OF TRANSMITTAL. IF ANYONE MAKES ANY RECOMMENDATION OR REPRESENTATION TO YOU OR GIVES YOU ANY INFORMATION, YOU MUST NOT RELY UPON THAT RECOMMENDATION, REPRESENTATION OR INFORMATION AS HAVING BEEN AUTHORIZED BY US. Radyne ComStream Inc. December 23, 2003 30 EX-99.A.2 4 p67339exv99waw2.txt EX-99.A.2 Exhibit 99.A.2 RADYNE COMSTREAM INC. LETTER OF TRANSMITTAL Offer to Exchange Options PURSUANT TO THE OFFER TO EXCHANGE DATED DECEMBER 23, 2002 THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, MOUNTAIN STANDARD TIME, ON JANUARY 22, 2003 UNLESS THE OFFER IS EXTENDED. To: Radyne ComStream Inc. 3138 E. Elwood Street Phoenix, Arizona 85034 (602) 437-9620 Attn: Garry D. Kline I am tendering the following options to purchase shares of common stock, no par value ("Option Shares"), having exercise prices ranging between $6.00 and $8.25 and between $14.00 and $14.63 per share (to validly tender such options you must complete the following table according to instruction 2 on page 5 of this Letter of Transmittal):

GRANT DATE OF OPTION(1) EXERCISE PRICE OF OPTION TOTAL NUMBER OF SHARES SUBJECT TO OPTION ----------------------- ------------------------ ----------------------

YOUR OPTION AGREEMENT(S) EVIDENCING OPTIONS TO BE TENDERED MUST BE FORWARDED WITH THIS LETTER OF TRANSMITTAL. - ---------- (1) List each option on a separate line even if more than one option was issued on the same grant date. For purposes of completing the foregoing table, an option is comprised of a single grant entitling the holder to purchase multiple shares of common stock. To Radyne ComStream Inc.: Subject to the conditions in the Offer to Exchange dated December 23, 2002, and in this Letter of Transmittal, both of which together constitute the "Offer," I am tendering to Radyne ComStream Inc., a Delaware corporation, the options to purchase shares of common stock, $.001 par value per share, of Radyne ComStream specified in the table on page 1 of this letter. The number of shares granted in my new option(s) will depend on the exercise price of the option(s) I elected to cancel under the offer, as set forth in the exchange ratio schedule below, subject to adjustments for any future stock splits, stock dividends and similar events that may occur during the exchange period:

- -------------------------------------------------------------------------------------------------------- EXERCISE PRICE RANGE EXCHANGE RATIO EXAMPLE - -------------------------------------------------------------------------------------------------------- Existing option to purchase 1,000 shares at $7.00 exercise price could be exchanged for $6.00 -- $8.25 0.67 shares covered by a new option to purchase 670 shares option for every 1 share covered at a new exercise price equal by a cancelled option to stock price at date of new option grant - -------------------------------------------------------------------------------------------------------- Existing option to purchase 1,000 shares at $14.50 exercise price could be exchanged for $14.00 -- $14.63 0.40 shares covered by a new option to purchase 400 shares option for every 1 share covered at a new exercise price equal by a cancelled option to stock price at date of new option grant - --------------------------------------------------------------------------------------------------------

The exercise price of the new option(s) will be equal to the closing sale price of our common stock as reported on the Nasdaq National Market on the new option grant date (or the last trading day before the new option grant date, if the market for trading in our stock is closed on such date). Accrued vesting will remain consistent with the original grant once the new option is approved. I sell, assign, and transfer to, or upon the order of, Radyne ComStream, all right, title and interest in and to all of the options that I am tendering under this letter. I acknowledge that Radyne ComStream has advised me to consult with my own advisors as to the consequences of participating or not participating in the Offer. I agree that this letter is an amendment to any option agreements that govern my tendered options. I represent and warrant that I have full power and authority to tender my options and that, when and to the extent the options are accepted for exchange by Radyne ComStream, the options will be free and clear of all security interests, liens, restrictions, charges, encumbrances, conditional sales agreements, or other obligations relating to their sale or transfer, other than pursuant to the applicable option agreement. Furthermore, my tendered options will not be subject to any adverse claims. Upon request, I will execute and deliver any additional 2 documents deemed by Radyne ComStream to be necessary or desirable to complete the exchange of the options I am tendering. All authority that I confer or agree to confer will not be affected by, and will survive, my death or incapacity, and all of my obligations under this letter and the Offer will be binding upon my heirs, personal representatives, successors and assigns. Except as stated in the Offer, this tender is irrevocable. By execution hereof, I understand that tenders of options pursuant to the procedure described in Section 3 of the Offer to Exchange and in the instructions to this letter will constitute my acceptance of the terms and conditions of the Offer. Radyne ComStream's acceptance for exchange of my tendered options will constitute a binding agreement between Radyne ComStream and me upon the terms and subject to the conditions of the Offer. I acknowledge that the new options that I will receive: (1) will not be granted until on or about the first business day that is at least six months and one day after the date my old options are canceled and (2) will be subject to the terms and conditions set forth in a new option agreement between Radyne ComStream and me that will be forwarded to me after the grant of the new options. I also acknowledge that I must be an employee of Radyne ComStream from the date I tender my options through the date the new options are granted and otherwise be eligible under the Radyne ComStream Inc. 1996 Incentive Stock Option Plan (the "1996 Plan") or 2000 Long-Term Incentive Plan (the "2000 Plan"), as applicable on the date the new options are granted in order to receive new options. I further acknowledge that, if I do not remain an employee, I will not receive any new options or any other consideration for my tendered options that are accepted for exchange pursuant to the Offer. The name and social security number of the registered holder of the tendered options appear below exactly as they appear on the option agreement or agreements governing those options. The table on page 1 contains for each tendered option the grant date, the exercise price, and the total number of shares of common stock subject to the option I am tendering. I understand that I may tender all of my options outstanding under Radyne ComStream's 1996 Plan and 2000 Plan having exercise prices ranging between $6.00 and $8.25 and between $14.00 and $14.63 per share and that I am not required to tender any options in the Offer. I understand that Radyne ComStream will not accept partial tenders of individual option grants. The term "Expiration Date" means 12:00 midnight, Mountain Standard Time, on January 22, 2003. The Expiration Date may be extended by Radyne ComStream, during which the Offer will remain open. I recognize that, under certain circumstances set forth in the Offer to Exchange, Radyne ComStream may terminate or amend the Offer and postpone its acceptance and cancellation of any options tendered for exchange. In any such event, I understand that the tendered options delivered with this letter but not accepted for exchange will be returned to me at the address indicated below. THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS OF OPTIONS BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS IN ANY JURISDICTION IN WHICH THE MAKING OR ACCEPTANCE OF THE OFFER WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. 3 I agree to all of the terms and conditions of the Offer. ----------------------------- 4 You must complete and sign the following exactly as your name appears on the option agreement or agreements evidencing the options you are tendering. If the signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or another person acting in a fiduciary or representative capacity, please set forth the signer's full title and include with this Letter proper evidence of the authority of such person to act in such capacity. SIGNATURE OF OWNER X ------------------------------------------------------------------------------- (Signature of Holder or Authorized Signatory) Date: January __, 2003 Name: --------------------------------------------------------------------------- (Please Print) Capacity: ----------------------------------------------------------------------- (If signing as a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity) Address: ------------------------------------------------------------------------ - -------------------------------------------------------------------------------- (Please include ZIP code) Telephone No. (with area code): ------------------------------------------------- Tax ID/Social Security No.: ----------------------------------------------------- INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Delivery of Letter of Transmittal. A properly completed and duly executed original of this letter, and any other documents required by this letter, must be received by Radyne ComStream at its address set forth on the front cover of this Letter ON OR BEFORE THE EXPIRATION DATE (which may be extended by Radyne ComStream). THE METHOD BY WHICH YOU DELIVER ANY REQUIRED DOCUMENTS IS AT YOUR OPTION AND RISK, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY RADYNE COMSTREAM. IF YOU ELECT TO DELIVER YOUR DOCUMENTS BY MAIL, RADYNE COMSTREAM RECOMMENDS THAT YOU USE REGISTERED MAIL WITH RETURN RECEIPT REQUESTED AND THAT YOU PROPERLY INSURE THE DOCUMENTS. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY DELIVERY. Tenders of options made pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. If the Offer is extended by Radyne ComStream beyond that time, you may withdraw your tendered options at any time until the extended expiration of the Offer. In addition, unless Radyne ComStream accepts your tendered options before 12:00 midnight, 5 Mountain Standard Time, February 25, 2003, the date that is 40 business days from the commencement of the Offer, you may withdraw your tendered Options at any time after February 25, 2003. To withdraw tendered options you must deliver a written notice of withdrawal with the required information to Radyne ComStream while you still have the right to withdraw the tendered options. Withdrawals may not be rescinded and any options withdrawn will thereafter be deemed not properly tendered for purposes of the Offer unless such withdrawn options are properly re-tendered prior to the Expiration Date by following the procedures described above. Radyne ComStream will not accept any alternative, conditional or contingent tenders. All tendering option holders, by execution of this letter, waive any right to receive any notice of the acceptance of their tender, except as provided for in the Offer to Exchange. 2. Tenders. If you intend to tender options pursuant to the Offer, you must complete the table on page 1 of this letter by providing the following information for each option that you intend to tender: (1) grant date, (2) exercise price, and (3) the total number of unexercised options subject to the option you are tendering. You may tender (surrender) all, none, or some of your eligible options in exchange for new options. However, the Company will not accept partial tenders of individual options. 3. Signatures on Letter of Transmittal. If this letter is signed by the holder of the tendered options, the signature must correspond with the name as written on the face of the option agreement or agreements to which the tendered options are subject without alteration. If this letter is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to Radyne ComStream of the authority of such person so to act must be submitted with this letter. 4. Requests for Assistance or Additional Copies. Any questions or requests for assistance, as well as requests for additional copies of the Offer to Exchange or this letter may be directed to Garry D. Kline, at (602) 437-9620 or by e-mail to gkline@radynecomstream.com. Copies will be furnished promptly at Radyne ComStream's expense. 5. Irregularities. All questions as to the number of shares of common stock subject to tendered options and the validity, form, eligibility (including time of receipt), and acceptance for exchange of any tender of options will be determined by Radyne ComStream in its discretion, which determinations will be final and binding on all parties. Radyne ComStream reserves the right to reject any or all tenders of options Radyne ComStream determines not to be in proper form or the acceptance of which may, in the opinion of Radyne ComStream's counsel, be unlawful. Radyne ComStream also reserves the right to waive any of the conditions of the Offer and any defect or irregularity in the tender of any particular options, and Radyne ComStream's interpretation of the terms of the Offer (including these instructions) will be final and binding on all parties. No tender of options will be deemed to be properly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as Radyne ComStream will determine. Neither Radyne ComStream nor any other person is or will be obligated to give notice of any 6 defects or irregularities in tenders, and no person will incur any liability for failure to give any such notice. 6. Important Tax Information. You should refer to Section 13 of the Offer to Exchange, which contains important tax information. If you are a tax resident outside of the United States, you should consult your own tax advisor in order to determine the tax consequences of participating or not participating in the offer. IMPORTANT: THIS LETTER TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY RADYNE COMSTREAM ON OR PRIOR TO THE EXPIRATION DATE. 7 EX-99.A.3 5 p67339exv99waw3.txt EX-99.A.3 Exhibit 99.A.3 FORM OF CONFIRMATION TO OPTIONEES ELECTING TO PARTICIPATE IN THE OFFER TO EXCHANGE To [OPTION HOLDER] This message confirms that on January __, 2003, Radyne ComStream Inc. cancelled __________ option(s) to purchase __________ shares of Radyne ComStream's common stock, which you submitted for exchange under your Transmittal Letter. Radyne ComStream will grant you a new option to purchase __________ shares, with the terms and conditions described in the Offer to Exchange, dated December 23, 2002, subject to your continued employment at Radyne ComStream and the other terms set forth in the Offer to Exchange. If you have any questions about this message, please contact Garry D. Kline by e-mail at gkline@radynecomstream.com, or by telephone at (602) 437-9620. Thank you, Robert C. Fitting Chief Executive Officer EX-99.A.4 6 p67339exv99waw4.txt EX-99.A.4 Exhibit 99.A.4 [RADYNE COMSTREAM LETTERHEAD] December 23, 2002 DEAR ELIGIBLE RADYNE COMSTREAM OPTION HOLDER: Due to today's difficult market conditions, you hold stock options with an exercise price that exceeds the market price of our common stock. Because our board of directors recognizes that your option may not currently be providing appropriate performance incentives, the board has considered a number of ways to provide you with the benefit of options that over time may have a greater potential to increase in value. As a result, I am happy to announce that we are offering to certain eligible employees of Radyne ComStream the opportunity to exchange options with exercise prices ranging between $6.00 and $8.25 and between $14.00 and $14.63 per share. Executive officers, directors and non-employees are not eligible to participate in this exchange offer. Additionally, employees who received option grants after June 15, 2002, are not permitted to participate in this exchange offer. Partial tenders of an individual option will not be allowed. If you tender an eligible option, you must tender that entire option and not a portion of it. If you elect to voluntarily participate in this program, you will receive an option to purchase new shares based on the following exchange ratio schedule, subject to adjustments for any future stock splits, dividends and similar events:

- -------------------------------------------------------------------------------------------------------- EXERCISE PRICE RANGE EXCHANGE RATIO EXAMPLE - -------------------------------------------------------------------------------------------------------- Existing option to purchase 1,000 shares at $7.00 exercise price could be exchanged for $6.00 -- $8.25 0.67 shares covered by a new option to purchase 670 shares option for every 1 share covered at a new exercise price equal by a cancelled option to stock price at date of new option grant - -------------------------------------------------------------------------------------------------------- Existing option to purchase 1,000 shares at $14.50 exercise price could be exchanged for $14.00 -- $14.63 0.40 shares covered by a new option to purchase 400 shares option for every 1 share covered at a new exercise price equal by a cancelled option to stock price at date of new option grant - --------------------------------------------------------------------------------------------------------

No fractional shares will be issued. If the number of shares subject to a new option issuable on the grant date would include a fraction of a share, the number of shares will be rounded to the nearest share. Accrued vesting will remain consistent with the original grant once the new option is approved. We will grant the new options on or about the first business day which is at least six months and one day following the date we accept and cancel the tendered options. For example, if we accept and cancel the tendered options on January 22, 2003, as currently scheduled, we will grant the new options on or about August 23, 2003. The per share exercise price of all new options will equal the last reported sale price of our common stock on the Nasdaq Stock Market's National Market on the date we grant the new options. You must be a current employee of Radyne ComStream from the date you tender options continuously until the date we grant the new options in order to receive new options. If you do not remain an employee, you will not receive any new option or any other consideration for the options tendered by you and canceled by the Company. Radyne ComStream expects that there will be no accounting charges to the Company as a result of the stock exchange program. Moreover, the Company does not anticipate that there will be any tax consequences to U.S. option holders. Eligible option holders in other jurisdictions are encouraged to consult their tax advisors. The new options will be granted under, and subject to, the terms of either the 1996 Plan or 2000 Plan. If we accept your options for exchange, we will forward a new option agreement to you promptly following the issuance of the new options. The board of directors makes no recommendation as to whether you should tender or refrain from tendering your options in the offer. You must make your own decision whether to tender your options. The Company's offer is being made under the terms and subject to the conditions of an offer to exchange and a related letter of transmittal which are enclosed with this letter. You should carefully read the entire offer to exchange and letter of transmittal before you decide whether to tender all or any portion of your options. A tender of options involves risks, which are discussed in the offer to exchange. To tender options, you will be required to properly complete and return to us the letter of transmittal and any other documents specified in that letter by the expiration date of the Company's offer. While current rules and regulations do not require us to obtain our stockholders' approval of the option exchange program, our board of directors, which includes representatives from our largest stockholder, has approved the program. If you have any questions about the offer, please contact Garry D. Kline at (602) 437-9620 or by e-mail to gkline@radynecomstream.com. We thank you for your continued efforts on behalf of Radyne ComStream. Sincerely, Robert C. Fitting Chief Executive Officer Enclosures -----END PRIVACY-ENHANCED MESSAGE-----

EX-99.A.1

                                                                  Exhibit 99.A.1

                              RADYNE COMSTREAM INC.

              OFFER TO EXCHANGE OUTSTANDING OPTIONS FOR NEW OPTIONS


                     THE OFFER AND WITHDRAWAL RIGHTS EXPIRE

         AT 12:00 MIDNIGHT, MOUNTAIN STANDARD TIME, ON JANUARY 22, 2003,

                          UNLESS THE OFFER IS EXTENDED.


         We are offering eligible employees the opportunity to exchange all
options outstanding under the Radyne ComStream Inc. 1996 Incentive Stock Option
Plan (the "1996 Plan") and 2000 Long-Term Incentive Plan (the "2000 Plan" and,
together with the "1996 Plan," the "Plans") to purchase shares of our common
stock that have exercise prices ranging between $6.00 and $8.25 and between
$14.00 and $14.63 per share for new options that we will grant under the Plans
and pursuant to a new option agreement ("New Options"). Executive officers,
directors and non-employees are not eligible to participate in this exchange
offer. Additionally, employees who received option grants after June 15, 2002,
are not permitted to participate in this offer.

         We are making this offer upon the terms and subject to the conditions
set forth in this offer to exchange and in the related letter of transmittal
(which together, as they may be amended from time to time, constitute the
"Offer"). Some key features of the Offer include:

    -    If you elect to voluntarily participate in this program, you will
         receive an option to purchase new shares based on the following
         exchange ratio schedule, subject to adjustments for any future stock
         splits, dividends and similar events:



EXERCISE PRICE RANGE              EXCHANGE RATIO                        EXAMPLE
- --------------------              --------------                        -------
                                                      
   $6.00 -- $8.25       0.67 shares covered by a new        Existing option to purchase
                        option for every 1 share covered    1,000 shares at $7.00 exercise
                        by a canceled option                price could be exchanged for
                                                            option to purchase 670 shares
                                                            at a new exercise price equal
                                                            to stock price at date of new
                                                            option grant

  $14.00 -- $14.63      0.40 shares covered by a new        Existing option to purchase
                        option for every 1 share covered    1,000 shares at $14.50 exercise
                        by a canceled option                price could be exchanged for
                                                            option to purchase 400 shares
                                                            at a new exercise price equal
                                                            to stock price at date of new
                                                            option grant


    -    Partial tenders within a single option grant will not be permitted. If
         you elect to tender an option, the entire option must be tendered.

    -    The outstanding options that employees elect to exchange and that we
         have accepted for exchange will be cancelled on or about January 22,
         2003, unless this Offer is extended. The New Options will be granted no
         sooner than August 23, 2003, which is six months and one day after the
         date your tendered options are cancelled.

    -    The exercise price of the New Options will be the closing sale price of
         our common stock as reported on the Nasdaq National Market ("Nasdaq")
         on the new option grant date. However, we can provide no assurance as
         to the price of our common stock at any time in the future as the stock
         price may fluctuate significantly.

    -    The New Options will be vested to the same degree, as a percentage of
         the option, as your existing options would have been vested on the New
         Option grant date if you had never tendered your existing options. The
         New Options will continue to vest on the same schedule as your existing
         options, as a percentage of the option. If you choose not to exchange
         your options, then your options will remain outstanding and they will
         retain their current exercise price, vesting schedule and expiration
         term.

    -    The New Options will have the same expiration date as the cancelled
         options.

         ALTHOUGH OUR BOARD OF DIRECTORS HAS APPROVED THIS OFFER, NEITHER WE NOR
OUR BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS TO WHETHER YOU SHOULD TENDER
OR REFRAIN FROM TENDERING YOUR OPTIONS FOR EXCHANGE. YOU MUST MAKE YOUR OWN
DECISION WHETHER TO TENDER YOUR OPTIONS.

         In order to receive New Options under the Offer, you must still be
employed by the Company on the New Option grant date. Your election to
participate in the Offer does not in any way change your status as an at-will
employee. In addition, we cannot guarantee that you will receive New Options if
a change of control of the Company occurs between the cancellation of your
options and the New Option grant date.

         Shares of our common stock are quoted on Nasdaq under the symbol
"RADN." On December 20, 2002, the last reported sale price of our common stock
on Nasdaq was $2.77 per share. WE RECOMMEND THAT YOU OBTAIN CURRENT MARKET
QUOTATIONS FOR OUR COMMON STOCK BEFORE DECIDING WHETHER TO TENDER YOUR OPTIONS.

         You should direct questions about this Offer or requests for assistance
or for additional copies of the Offer to Exchange or the letter of transmittal
to Garry D. Kline (telephone: (602) 437-9620) at Radyne ComStream Inc., 3138 E.
Elwood Street, Phoenix, Arizona 85034, or by e-mail at
gkline@radynecomstream.com.

                                 ***IMPORTANT***

         If you wish to tender your options for exchange, you must complete and
sign the letter of transmittal in accordance with its instructions, and mail or
otherwise deliver it and any other required documents to Garry D. Kline at
Radyne ComStream Inc., 305 North 54th Street, Chandler, Arizona 85226.

         We recommend that if you choose to mail your documents, you send them
by certified or registered mail. Interoffice mail is not recommended since it
cannot be tracked. Please keep a copy of all documents. Radyne ComStream will
not be responsible for any lost mail, whether interoffice or otherwise.

         We are not making this Offer to, nor will we accept any tender of
options from or on behalf of, option holders in any jurisdiction in which the
offer or the acceptance of any tender of options would not be in compliance with
the laws of such jurisdiction. However, we may, at our discretion, take any
actions necessary for us to make this Offer to option holders in any such
jurisdiction.

         WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR
BEHALF AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR OPTIONS
PURSUANT TO THE OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS
DOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO GIVE
YOU ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFER
OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS DOCUMENT OR IN
THE RELATED LETTER OF TRANSMITTAL. IF ANYONE MAKES ANY RECOMMENDATION OR
REPRESENTATION TO YOU OR GIVES YOU ANY INFORMATION, YOU MUST NOT RELY UPON THAT
RECOMMENDATION, REPRESENTATION OR INFORMATION AS HAVING BEEN AUTHORIZED BY US.

                                                                                    
SUMMARY TERM SHEET..................................................................     1

RISKS OF PARTICIPATING IN THE OFFER.................................................     8

    1.   Eligibility; Number of Options; Expiration Date............................    10

    2.   Purpose of the Offer.......................................................    12

    3.   Procedures for Tendering Options...........................................    13

    4.   Withdrawal Rights..........................................................    13

    5.   Acceptance of Options for Exchange and Issuance of New Options.............    14

    6.   Conditions of the Offer....................................................    15

    7.   Price Range of Common Stock Underlying Options.............................    18

    8.   Source and Amount of Consideration; Terms of New Options...................    18

    9.   Information Concerning Radyne ComStream....................................    22

    10.  Interests of Directors and Officers; Transactions and Arrangements
         Concerning the Options.....................................................    23

    11.  Status of Options Acquired by Us in the Offer; Accounting Consequences
         of the Offer...............................................................    25

    12.  Legal Matters; Regulatory Approvals........................................    26

    13.  Material Federal Income Tax Consequences...................................    26

    14.  Extension of Offer; Termination; Amendment.................................    27

    15.  Fees and Expenses..........................................................    28

    16.  Additional Information.....................................................    28

    17.  Miscellaneous..............................................................    30




                                       i

                               SUMMARY TERM SHEET

         The following are answers to some of the questions that you may have
about this Offer. We urge you to read carefully the remainder of this offer to
exchange and the accompanying letter of transmittal because the information in
this summary is not complete, and additional important information is contained
in the remainder of this offer to exchange and the letter of transmittal. We
have included section references to the remainder of this offer to exchange
where you can find a more complete description of the topics in this summary.

    -    WHAT SECURITIES ARE WE OFFERING TO EXCHANGE?

         We are offering to exchange all stock options having exercise prices
ranging between $6.00 and $8.25 and between $14.00 and $14.63 per share under
the Radyne ComStream Inc. 1996 Incentive Stock Option Plan and 2000 Long-Term
Incentive Plan. The options eligible to be tendered cover a total of 1,135,366
shares of our common stock and have exercise prices ranging from $6.00 to
$14.63. We will not accept partial tenders of options within an individual
option grant. If you tender an eligible option, you must tender that entire
option and not a portion of it. (Section 1)

    -    MUST I EXCHANGE AN ENTIRE OPTION OR CAN I DECIDE TO CANCEL ONLY A
         PORTION OF AN OPTION?

         You may not cancel only a portion of an option. You may, however,
choose to cancel one unexercised option in its entirety even if you hold other
options within one of the two exercise price ranges ($6.00 to $8.25 and $14.00
to $14.63). By way of example, if you have an option for 1,000 shares at an
exercise price of $7.00, an option for 1,500 shares at an exercise price of
$14.25, and an option for 500 shares at an exercise price of $14.50, you could
elect to cancel all three, only the $7.00 option, only the $14.25 option, only
the $14.50 option, or none of the options. You may not elect to cancel only 500
shares of the $7.00 option.

    -    WHY ARE WE MAKING THE OFFER?

         Many of our employees have current outstanding options with exercise
prices that are significantly higher than the current fair market value of our
common stock. By making this offer to exchange outstanding options for New
Options, we intend to provide our employees with the benefit of owning options
that over time may have a greater potential to increase in value, create better
performance incentives for employees and thereby maximize stockholder value.
(Section 2)

    -    WHAT ARE THE CONDITIONS TO THE OFFER?

         The Offer is not conditioned upon a minimum number of options being
tendered. However, the Offer is subject to a number of conditions, including the
conditions described in Section 6. We urge you to carefully read these
conditions. (Section 6)


                                       1

    -    ARE THERE ANY ELIGIBILITY REQUIREMENTS I MUST SATISFY AFTER THE
         EXPIRATION DATE OF THE OFFER TO RECEIVE THE NEW OPTIONS?

         To receive a grant of New Options pursuant to the Offer, you must be an
employee of Radyne ComStream from the date you tender options through the date
we grant the New Options. Executive officers, directors and non-employees are
not eligible to participate in this Offer. Additionally, employees who received
option grants after June 15, 2002, are not permitted to participate in this
Offer. As discussed below, we will not grant the New Options until on or about
the first business day that is at least six months and one day following the
date we cancel the options accepted for exchange. If you are not an employee of
Radyne ComStream continuously from the date you tender options through the date
we grant the New Options, you will not receive any New Options in exchange for
your tendered options that have been accepted for exchange. You also will not
receive any other consideration for the options tendered if you are not an
employee from the date you tender options through the date we grant the New
Options. (Section 1)

    -    HOW MANY NEW OPTIONS WILL I RECEIVE IN EXCHANGE FOR MY TENDERED
         OPTIONS?

         Employees who participate in the Offer will receive a New Option on the
New Option grant date in exchange for each tendered option. The number of shares
covered by each New Option will depend on the exercise price of each tendered
option as set forth in the exchange ratio schedule below, subject to adjustments
for any future stock splits, stock dividends, and similar events that may occur
during the exchange period. (Section 5)



EXERCISE PRICE RANGE              EXCHANGE RATIO                        EXAMPLE
- --------------------              --------------                        -------
                                                      
   $6.00 -- $8.25       0.67 shares covered by a new        Existing option to purchase
                        option for every 1 share covered    1,000 shares at $7.00 exercise
                        by a cancelled option               price could be exchanged for
                                                            option to purchase 670 shares
                                                            at a new exercise price equal
                                                            to stock price at date of new
                                                            option grant

  $14.00 -- $14.63      0.40 shares covered by a new        Existing option to purchase
                        option for every 1 share covered    1,000 shares at $14.50 exercise
                        by a cancelled option               price could be exchanged for
                                                            option to purchase 400 shares
                                                            at a new exercise price equal
                                                            to stock price at date of new
                                                            option grant


         For example, if a tendered option covered 1,000 shares at an exercise
price of $7.00, the New Option would cover 670 shares (1,000 x .67) and if a
tendered option covered 1,000 shares at an exercise price of $14.50, the New
Option would cover 400 shares (1,000 x .40).

         No fractional shares will be issued. If the number of shares subject to
a New Option issuable on the grant date would include a fraction of a share, the
number of shares will be rounded to the nearest share. (Section 5)


                                       2

    -    WHEN WILL I RECEIVE MY NEW OPTIONS?

         We will grant the New Options on or about the first business day that
is at least six months and one day after the date we cancel the options accepted
for exchange. For example, if we cancel tendered options on January 22, 2003,
which is the scheduled Expiration Date of the Offer, the grant date of the New
Options will be on or about August 23, 2003. (Section 5)

    -    WHY WON'T I RECEIVE MY NEW OPTIONS IMMEDIATELY AFTER THE EXPIRATION
         DATE OF THE OFFER?

         The current accounting rules specify that a minimum of six months and
one day must pass before we issue the New Options. If we do not follow this
guidance, we would be subject to compensation charges against our earnings for
financial reporting purposes. The accounting rules also prevent us from setting
the exercise price for the exchange options prior to the actual grant date.
Again, if we do not follow these rules, we would be subject to unfavorable
accounting treatment for the exchange program. (Section 11)

    -    WHY CAN'T THE COMPANY JUST REPRICE MY CURRENTLY OUTSTANDING OPTIONS?

         Based on the same accounting guidance mentioned above, "repricing"
existing options, or resetting the strike price of these outstanding options to
the current market price of our stock, would result in charges against our
earnings for financial reporting purposes. (Section 11)

    -    IF I TENDER OPTIONS IN THE OFFER, WILL I BE ELIGIBLE TO RECEIVE OTHER
         OPTION GRANTS BEFORE I RECEIVE MY NEW OPTIONS?

         No. Because of accounting rules that could apply to interim option
grants as a result of the Offer, we do not expect to grant New Options to
current employees until at least six months and one day after the date we cancel
the options accepted for exchange. (Section 11)

    -    WHAT HAPPENS IF RADYNE COMSTREAM IS ACQUIRED DURING THE PERIOD AFTER MY
         OPTIONS ARE CANCELLED BUT BEFORE I AM GRANTED NEW OPTIONS?

         It is possible that prior to the grant date of the New Options we might
enter into an agreement for a merger into another company or change of control
transaction. These types of transactions could have substantial effects on our
stock price, including substantial stock price appreciation. Depending on the
structure of a transaction, option holders participating in this Offer might be
deprived of any further price appreciation in the common stock or deprived of
the opportunity to participate in the Offer.

         If we are a party to a merger into another company or change of control
transaction before the grant date of the New Options, we will endeavor to
negotiate as part of the transaction an agreement for the acquiring entity to
grant options or compensation comparable to the New Options to continuing
employees, although there can be no assurance that we would be successful in
negotiating such an agreement.


                                       3

         Further, we cannot guarantee that the acquiring company in any change
of control transaction would agree to assume existing options and assume the
obligation to issue New Options pursuant to the Offer. Therefore, it is possible
that you may not receive any New Options, securities of the surviving company or
other consideration in exchange for your tendered option if we are acquired
before the New Options are granted.

         We reserve the right, in the event of a merger into another company or
change of control transaction, to take any actions we deem necessary or
appropriate to complete a transaction that our board of directors believes is in
the best interest of our company and our stockholders. This could include
terminating your right to receive New Options under this Offer. If we were to do
so, employees who tendered options pursuant to this Offer would not receive New
Options to purchase our common stock, or securities of the acquiror or any other
consideration for their tendered options. (Section 1)

    -    WHAT WILL THE EXERCISE PRICE OF THE NEW OPTIONS BE?

         The exercise price of the New Options will be equal to the last
reported sale price of our common stock on Nasdaq, or such other national
securities exchange or inter-dealer quotation system on which our common stock
is then traded, on the date we grant the New Options. Accordingly, we cannot
predict the exercise price of the New Options. The exercise price of any option
you tender is at least $6.00 per share. The closing price of our common stock
was $2.77 per share on December 20, 2002. HOWEVER, BECAUSE WE WILL NOT GRANT NEW
OPTIONS UNTIL AT LEAST SIX MONTHS AND ONE DAY AFTER THE DATE WE CANCEL THE
OPTIONS ACCEPTED FOR EXCHANGE, THE NEW OPTIONS MAY HAVE A HIGHER EXERCISE PRICE
THAN SOME OR ALL OF YOUR CURRENT OPTIONS. WE RECOMMEND THAT YOU OBTAIN CURRENT
MARKET QUOTATIONS FOR OUR COMMON STOCK BEFORE DECIDING WHETHER TO TENDER YOUR
OPTIONS. (Section 8)

    -    IF THE EXERCISE PRICE ON THE NEW OPTIONS IS HIGHER THAN IT WAS ON MY
         TENDERED OPTIONS, CAN I REVERT TO MY ORIGINAL GRANT WITH ITS ORIGINAL
         EXERCISE PRICE?

         No. Once your tendered options have been cancelled, it is not possible
to regrant them. Because the New Option grant date is more than six months after
the date we cancelled the options accepted for exchange and the market price of
our stock is volatile, it is possible that the New Options have a higher
exercise price than your current options. We recommend that you obtain current
market quotations for our common stock before deciding whether to exchange your
options. You must carefully consider the exercise price of your existing options
and your expectations of the future value of the stock. (Section 8)

    -    AFTER THE GRANT OF MY NEW OPTIONS, WHAT HAPPENS IF I AGAIN END UP
         "UNDERWATER?"

         We are implementing the Offer at this time due to the stock market
conditions that have affected many companies, throughout the country. Therefore,
this is intended to be a one-time offer. We do not currently expect to implement
such a program again in the foreseeable future. If your stock options had a term
of ten years from the grant date, subject to continued employment, the price for
common stock may appreciate over the long term even if the exercise price of
your options is above the trading price of our common stock for some period of
time


                                       4

after the grant date of the New Options. However, we can provide no assurance as
to the price of our common stock at any time in the future. (Section 8)

    -    WHAT WILL THE VESTING SCHEDULE OF THE NEW OPTION BE?

         The vesting of the New Options will be on the same schedule as your
tendered options, as percentages of the options. On the New Option grant date,
the New Option will be vested to the same extent, as a percentage of the option,
that your tendered options would have been vested if they had remained
outstanding until the New Option grant date. All vested shares on the New Option
grant date will be immediately exercisable. (Section 8)

    -    DO I HAVE TO TENDER OPTIONS FOR ALL OR ANY OF THE SHARES SUBJECT TO
         THOSE OPTIONS?

         There are two ranges of eligible options: those with current exercise
prices between $6.00 and $8.25 per share and those with current exercise prices
between $14.00 and $14.63 per share. We will not accept partial tenders of
individual options. If you tender an eligible option, you must tender that
entire option and not a portion of it. (Section 8)

    -    WILL I HAVE TO PAY TAXES IF I EXCHANGE MY OPTIONS IN THE OFFER?

         We believe that the exchange will be treated as non-taxable for U.S.
federal income tax purposes, and that U.S. citizens and residents who exchange
outstanding options for New Options should not be required to recognize income
for U.S. federal income tax purposes either at the time of the surrender of
outstanding options or at the time of grant of the New Options. However, we are
not in a position to provide tax advice, and we strongly recommend that you
consult with your tax advisor to determine the tax consequences to you of this
Offer.

         Tax residents of jurisdictions other than the U.S. may have different
consequences and should consult with their own tax advisor to determine the tax
consequences of participating or declining to participate in the Offer. (Section
13)

    -    WHEN DOES THE OFFER EXPIRE? CAN THE OFFER BE EXTENDED, AND IF SO, HOW
         WILL I BE NOTIFIED IF IT IS EXTENDED?

         The Offer expires on January 22, 2003, at 12:00 midnight, Mountain
Standard Time, unless we choose to extend it.

         We may, at our discretion, extend the Offer at any time, but we cannot
assure you that the Offer will be extended or, if extended, for how long.

         If the Offer is extended, we will make a public announcement of the
extension no later than 9:00 a.m. on the next business day following the
previously scheduled expiration of the Offer period. (Section 1)

    -    HOW DO I TENDER MY OPTIONS?

         If you decide to tender your options, you must deliver, before 12:00
midnight, Mountain Standard Time, on January 22, 2003, a properly completed and
duly executed letter of transmittal


                                       5

and any other documents required by the letter of transmittal to Garry D. Kline
at Radyne ComStream Inc., 3138 E. Elwood Street, Phoenix, Arizona 85034.

         If we extend the Offer beyond that time, you must deliver these
documents before the extended expiration of the Offer.

         We reserve the right to reject any or all tenders of options that we
determine are not in appropriate form or that we determine are unlawful to
accept. Otherwise, we will accept properly and timely tendered options which are
not validly withdrawn. Subject to our rights to extend, terminate and amend the
Offer, we currently expect that we will accept all such properly tendered
options promptly after the expiration of the Offer.

         We recommend that if you choose to mail your documents, you send them
by certified or registered mail. Interoffice mail is not recommended since it
cannot be tracked. Please keep a copy of all documents. Radyne ComStream will
not be responsible for any lost mail, whether interoffice or otherwise. (Section
3)

    -    HOW DO I FIND OUT HOW MANY OPTIONS I HAVE, THEIR EXERCISE PRICE, AND
         THE DATE THEY WERE ISSUED?

         You should contact Garry D. Kline at (602) 437-9620 or by e-mail at
gkline@radynecomstream.com if you wish to obtain information with respect to
your outstanding options.

    -    WILL I RECEIVE A CONFIRMATION STATEMENT VERIFYING MY TENDER?

         Promptly after we accept tendered options for exchange, we will send
each tendering option holder a letter or e-mail indicating the number of shares
subject to the options that we have accepted for exchange, the corresponding
number of shares that will be subject to the New Options and the expected grant
date of the New Options.

    -    DO I NEED TO DO ANYTHING IF I DO NOT WANT TO TENDER MY OPTIONS?

         No. If you do not deliver a properly completed and duly executed letter
of transmittal prior to the expiration of the Offer, you will not be a
participant in the Offer.

    -    WHAT HAPPENS IF I DO NOT SIGN AND RETURN THE LETTER OF TRANSMITTAL
         BEFORE THE EXPIRATION DATE?

         Nothing, except that your current options will not be exchanged for New
Options. However, we strongly encourage you to return the letter of transmittal
even if you choose not to tender your options for exchange because your letter
of transmittal will enable Radyne ComStream to track the progress of the option
exchange program.


                                       6

    -    ARE THERE ANY CONSEQUENCES TO ME WITH RESPECT TO FUTURE OPTION GRANTS,
         IF I DO NOT PARTICIPATE IN THE OFFER?

         No, your nonparticipation in the Offer will not affect your eligibility
to receive options in connection with future option grants.

    -    DURING WHAT PERIOD OF TIME MAY I WITHDRAW PREVIOUSLY TENDERED OPTIONS?

         You may withdraw your tendered options at any time before 12:00
midnight, Mountain Standard Time, on January 22, 2003. If we extend the Offer
beyond that time, you may withdraw your tendered options at any time until the
extended expiration of the Offer. In addition, unless we accept your tendered
options for exchange before 12:00 midnight, Mountain Standard Time, on February
25, 2003, the date that is 40 business days after the commencement of the Offer,
you may withdraw your tendered options at any time after February 25, 2003. To
withdraw tendered options, you must deliver to us a written notice of
withdrawal, with the required information while you still have the right to
withdraw the tendered options. Once you have withdrawn options, you may
re-tender options only by again following the delivery procedures described
above. (Section 4)

    -    WHAT DOES MANAGEMENT AND THE BOARD OF DIRECTORS THINK OF THE OFFER?

         Although the board of directors has approved this Offer, neither
management nor the board of directors makes any recommendation as to whether you
should tender or refrain from tendering your options. You must make your own
decision whether to tender options.

    -    WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER?

         For additional information or assistance, you should contact Garry D.
Kline (telephone: ((602) 437-9620) at 3138 E. Elwood Street, Phoenix, Arizona
85034 or by e-mail at gkline@radynecomstream.com.


                                       7

                       RISKS OF PARTICIPATING IN THE OFFER

         Participation in the Offer involves a number of potential risks,
including those described below. This list briefly highlights some of the risks
and is necessarily incomplete. Eligible employees should carefully consider
these and other risks and are encouraged to speak with an investment and tax
advisor as necessary before deciding whether and to what extent to participate
in the Offer. In addition, we strongly urge you to carefully read the remainder
of this Offer before deciding whether and to what extent to participate. The
list of risks does not include certain risks that may apply to employees who
live and work outside of the United States.

    -    PARTICIPATION IN THE OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY
         OPTION GRANTS UNTIL AUGUST 23, 2003 AT THE EARLIEST.

         Employees are generally eligible to receive option grants at any time
that the board of directors or compensation committee chooses to make them.
However, if we were to grant you options on any date that is earlier than six
months and one day after the date we cancel the options accepted for exchange,
we would be required for financial reporting purposes to record compensation
expense against our earnings. Therefore, if you participate in the Offer, you
will not be eligible to receive any option grants until August 23, 2003 at the
earliest.

    -    NONPARTICIPATION IN THE OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE THE
         NEW OPTIONS THAT ARE LIKELY TO CARRY A LOWER EXERCISE PRICE THAN YOUR
         CURRENT OPTIONS.

         Eligible option holders who choose not to participate in this Offer
will maintain their current options at their current exercise price.
Nonparticipants will not be granted the New Options that are likely to have a
lower exercise price than the eligible options they currently hold.

    -    IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTIONS,
         YOU WILL RECEIVE NOTHING.

         Once your option is cancelled, it cannot be reinstated. Accordingly, if
your employment terminates for any reason prior to the grant of the New Options,
you will have the benefit of neither the cancelled option nor the New Option.

    -    WE INVESTIGATE STRATEGIC OPPORTUNITIES FROM TIME TO TIME, WHICH, IF
         CONCLUDED, COULD AFFECT THE PRICING AND/OR TERMS OF YOUR NEW OPTIONS.

         We consistently evaluate strategic opportunities that may arise,
including additional capital infusions, joint ventures, strategic partnerships,
acquisitions and the purchase or sale of assets. If any of these transactions
were to occur before the New Options are granted, and our stock price
appreciates, your New Options could be granted at a higher exercise price, and
could be subject to additional terms and conditions required by an investing or
acquiring party.


                                       8

    -    WE CANNOT ASSURE YOU THAT PARTICIPATION IN THE OFFER WILL RESULT IN
         YOUR RECEIVING NEW OPTIONS WITH A LOWER EXERCISE PRICE THAN YOUR
         EXISTING OPTIONS.

         If our stock price increases after the date your tendered options are
cancelled, your New Options might have a higher exercise price than the tendered
and cancelled options. For example, if you cancel options with a $6.00 exercise
price per share, and our stock price appreciates to $7.00 when the New Option
grants are made, your New Option will have a higher exercise price than the
cancelled option.

    -    YOUR NEW OPTIONS WILL BE SUBJECT TO THE GENERAL RISKS OF OUR BUSINESS.

         For a description of risks related to our business, please see Section
16.


                                       9

                                    THE OFFER

1.       ELIGIBILITY; NUMBER OF OPTIONS; EXPIRATION DATE.

         Employees who hold options to purchase shares of our common stock with
exercise prices that fall within the following two ranges -- between $6.00 and
$8.25 per share and between $14.00 and $14.63 per share -- and that are granted
under the Plans are eligible to participate in the Offer. However, executive
officers, directors and non-employees are not eligible to participate in this
Offer. Additionally, employees who received option grants after June 15, 2002,
are not permitted to participate in this Offer. Upon the terms and subject to
the conditions of the Offer, we will exchange for New Options all eligible
options granted under our Plans. Only options that are properly tendered and not
validly withdrawn in accordance with Section 4 before the Expiration Date, will
be accepted. We will not accept partial tenders of individual options.
Therefore, if you elect to tender an option, you must tender that entire option.

         The options eligible to be tendered cover a total of 1,135,366 shares
of our common stock and have exercise prices ranging from $6.00 to $14.63. The
shares of common stock issuable upon exercise of eligible options represent
approximately 7.5% of the total shares of our common stock outstanding.

         If you elect to participate in the Offer you will receive a New Option
on the New Option grant date in exchange for each tendered option. The number of
shares covered by each New Option will depend on the exercise price of each
tendered option as set forth in the exchange ratio schedule below, subject to
adjustments for any future stock splits, stock dividends, and similar events
that may occur during the exchange period:



EXERCISE PRICE RANGE              EXCHANGE RATIO                        EXAMPLE
- --------------------              --------------                        -------
                                                      
   $6.00 -- $8.25       0.67 shares covered by a new        Existing option to purchase
                        option for every 1 share covered    1,000 shares at $7.00 exercise
                        by a cancelled option               price could be exchanged for
                                                            option to purchase 670 shares
                                                            at a new exercise price equal
                                                            to stock price at date of new
                                                            option grant

  $14.00 -- $14.63      0.40 shares covered by a new        Existing option to purchase
                        option for every 1 share covered    1,000 shares at $14.50 exercise
                        by a cancelled option               price could be exchanged for
                                                            option to purchase 400 shares
                                                            at a new exercise price equal
                                                            to stock price at date of new
                                                            option grant


         No fractional shares will be issued. If the number of shares subject to
a New Option issuable on the grant date would include a fraction of a share, the
number of shares will be rounded to the nearest share.

         All New Options will be subject to the terms of the applicable Plan and
to a new option agreement between you and us. If you are not a current employee
of Radyne ComStream continuously from the date you tender options through the
date we grant the New Options, you


                                       10

will not receive any New Options in exchange for your tendered options that have
been accepted for exchange. You also will not receive any other consideration
for your tendered options if you are not an employee from the date you tender
options through the date we grant the New Options.

         We are also reserving the right, in the event of a merger into another
company or change of control transaction after the Expiration Date but before
the grant date of the New Options, to take any actions we deem necessary or
appropriate to complete a transaction that our board of directors believes is in
the best interest of our company and our stockholders. This could include
terminating the right to receive New Options under this Offer. If we were to
terminate your right to receive New Options under this Offer in connection with
such a merger into another company or change of control transaction, employees
who tendered options pursuant to this Offer would not receive New Options to
purchase our common stock, or securities of the acquiror, or any other
consideration for their tendered options. If we are a party to a merger into
another company or change of control transaction before the grant date of the
New Options, we will endeavor to negotiate as part of the transaction an
agreement for the acquiring entity to grant options or compensation comparable
to the New Options that would have been received under the Offer, although there
can be no assurance that we would be successful in negotiating such an
agreement. We presently have no plans or proposals that relate to or would
result in a change of control of Radyne ComStream Inc. Section 2 of this offer
to exchange describes our future plans.

         The Expiration Date of the Offer will be 12:00 midnight, Mountain
Standard Time, on January 22, 2003, unless we, in our discretion, have extended
the period of time during which the Offer will remain open. See Section 14 for a
description of our rights to extend, delay, terminate, and amend the Offer.

         If we decide to take any of the following actions, we will publish
notice of such action and extend the Offer for a period of ten business days
after the date of such publication:

         (a)  (1)  we increase or decrease the amount of consideration offered
                   for the options;

              (2)  we decrease the number of options eligible to be tendered in
                   the Offer; or

              (3)  we increase the number of options eligible to be tendered in
                   the Offer by an amount that exceeds 2% of the shares of
                   common stock issuable upon exercise of the options that are
                   subject to the Offer immediately prior to the increase; and

         (b) the Offer is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and including, the
date that notice of such increase or decrease is first published, sent or given
in the manner specified in Section 14.

         For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, Mountain Standard Time.


                                       11

2.       PURPOSE OF THE OFFER.

         Some of our outstanding options, whether or not they are currently
exercisable, have exercise prices that are significantly higher than the current
fair market value of our common stock. By making this offer to exchange
outstanding options for New Options, we intend to provide our employees with the
benefit of owning options that over time may have a greater potential to
increase in value, create better performance incentives for employees and
thereby maximize stockholder value.

         We consistently evaluate strategic opportunities that may arise,
including additional capital infusions, joint ventures, strategic partnerships,
acquisitions and the purchase or sale of assets. Subject to the foregoing, and
except as otherwise disclosed in this Offer or in our filings with the SEC, as
of the date of this filing, we have no definitive plans or proposals that have
not been publicly disclosed that relate to or would result in:

         (a) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving us or any of our subsidiaries;

         (b) any purchase, sale or transfer of a material amount of our assets
or the assets of any of our subsidiaries;

         (c) any material change in our present dividend policy, or our
indebtedness or capitalization;

         (d) any change in our present board of directors or management,
including a change in the number or term of directors or to fill any existing
board vacancies or to change any executive officer's material terms of
employment;

         (e) any other material change in our corporate structure or business;

         (f) the suspension of our obligation to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act;

         (g) the acquisition by any person of any of our securities or the
disposition of any of our securities; or

         (h) any change in our certificate of incorporation or bylaws, or any
actions which may impede the acquisition of control of us by any person.

         Nothing contained herein shall restrict our ability to any of the
foregoing.

         Neither we nor our board of directors makes any recommendation as to
whether you should tender your options, nor have we authorized any person to
make any such recommendation. You are urged to evaluate carefully all of the
information in this Offer and to consult your own investment and tax advisors.
You must make your own decision whether to tender your options for exchange.


                                       12

3.       PROCEDURES FOR TENDERING OPTIONS.

         PROPER TENDER OF OPTIONS. To validly tender your options pursuant to
the Offer, you must, in accordance with the terms of the letter of transmittal,
properly complete, duly execute and deliver the letter of transmittal along with
any other required documents to Garry D. Kline at Radyne ComStream Inc., 3138 E.
Elwood Street, Phoenix, Arizona 85034, before the Expiration Date.

         THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING LETTERS OF
TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE
TENDERING OPTION HOLDER. IF DELIVERY IS BY MAIL, WE RECOMMEND THAT YOU USE
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED AND PROPERLY INSURE YOUR PACKAGE.
IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY DELIVERY. RADYNE
COMSTREAM WILL NOT BE RESPONSIBLE FOR ANY LOST MAIL, WHETHER INTEROFFICE OR
OTHERWISE.

         DETERMINATION OF VALIDITY; REJECTION OF OPTIONS; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. We will determine, in our discretion, all
questions as to form of documents and the validity, form, eligibility, including
time of receipt, and acceptance of any tender of options. Our determination of
these matters will be final and binding on all parties. We reserve the right to
reject any or all tenders of options that we determine are not in appropriate
form or that we determine are unlawful to accept. Otherwise, we will accept
properly and timely tendered options, which are not validly withdrawn. We also
reserve the right to waive any of the conditions of the Offer as to all option
holders or any defect or irregularity in any tender with respect to all of the
tendered options or option holders who have the same defect or irregularity. No
tender of options will be deemed to have been properly made until all defects or
irregularities have been cured by the tendering option holder or waived by us.
Neither we nor any other person is obligated to give notice of any defects or
irregularities in tenders, nor will anyone incur any liability for failure to
give any such notice.

         OUR ACCEPTANCE CONSTITUTES AN AGREEMENT. Your tender of options
pursuant to the procedures described above constitutes your acceptance of the
terms and conditions of the Offer. OUR ACCEPTANCE FOR EXCHANGE OF YOUR OPTIONS
TENDERED BY YOU PURSUANT TO THE OFFER WILL CONSTITUTE A BINDING AGREEMENT
BETWEEN YOU AND US UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THE OFFER.

         Subject to our rights to extend, terminate and amend the Offer, we
currently expect that we will accept promptly after the Expiration Date of the
Offer all properly tendered options that have not been validly withdrawn.

4.       WITHDRAWAL RIGHTS.

         You may only withdraw your tendered options in accordance with the
provisions of this Section 4.

         You may withdraw your tendered options at any time before 12:00
midnight, Mountain Standard Time, on January 22, 2003. If we extend the Offer
beyond that time, you may withdraw your tendered options at any time until the
extended expiration of the Offer. In addition, unless we accept your tendered
options for exchange before 12:00 midnight, Mountain


                                       13

Standard Time, on February 25, 2003, the date that is 40 business days from the
commencement of the Offer, you may withdraw your tendered options at any time
after February 25, 2003.

         To validly withdraw tendered options, an option holder must deliver to
Garry D. Kline at Radyne ComStream Inc., 3138 E. Elwood Street, Phoenix, Arizona
85034, a written notice of withdrawal, with the required information, while the
option holder still has the right to withdraw the tendered options. The notice
of withdrawal must specify the name of the option holder who tendered the
options to be withdrawn, the grant date, exercise price, and the number of
option shares to be withdrawn. Except as described in the following sentence,
the notice of withdrawal must be executed by the option holder who tendered the
options to be withdrawn exactly as such option holder's name appears on the
option agreement or agreements evidencing such options. If the signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or another person acting in a fiduciary or representative capacity,
the signer's full title and proper evidence of the authority of such person to
act in such capacity must be indicated on the notice of withdrawal.

         You may not rescind any withdrawal, and any options you withdraw will
thereafter be deemed not properly tendered for purposes of the Offer, unless you
properly re-tender those options before the Expiration Date by following the
procedures described in Section 3.

         Neither Radyne ComStream nor any other person is obligated to give
notice of any defects or irregularities in any notice of withdrawal, nor will
anyone incur any liability for failure to give any such notice. We will
determine, in our discretion, all questions as to the form and validity,
including time of receipt, of notices of withdrawal. Our determination of these
matters will be final and binding.

5.       ACCEPTANCE OF OPTIONS FOR EXCHANGE AND ISSUANCE OF NEW OPTIONS.

         Upon the terms and subject to the conditions of this Offer, following
the Expiration Date, we will promptly accept for exchange and cancel options
properly tendered and not validly withdrawn before the Expiration Date. If your
options are properly tendered and accepted for exchange on January 22, 2003, the
scheduled Expiration Date of the Offer, you will be granted New Options on or
about August 23, 2003, which is the first business day that is at least six
months and one day following the date we cancel the options accepted for
exchange. If we extend the date by which we must accept and cancel options
properly tendered for exchange, you will be granted New Options on a subsequent
business day that is on or about the first business day at least six months and
one day following the extended date.

         Because of accounting rules that could apply to interim option grants
as a result of the Offer, we do not expect to grant New Options to current
employees until at least six months and one day after the date we cancel the
options accepted for exchange. Therefore, if you participate in the Offer, you
will not be eligible to receive any option grants until August 23, 2003 at the
earliest.

         If you elect to participate in the Offer you will receive a New Option
on the New Option grant date in exchange for each tendered option. The number of
shares covered by each New Option will depend on the exercise price of each
tendered option as set forth in the exchange


                                       14

ratio schedule below, subject to adjustments for any future stock splits, stock
dividends, and similar events that may occur during the exchange period:



EXERCISE PRICE RANGE              EXCHANGE RATIO                        EXAMPLE
- --------------------              --------------                        -------
                                                      
   $6.00 -- $8.25       0.67 shares covered by a new        Existing option to purchase
                        option for every 1 share covered    1,000 shares at $7.00 exercise
                        by a cancelled option               price could be exchanged for
                                                            option to purchase 670 shares
                                                            at a new exercise price equal
                                                            to stock price at date of new
                                                            option grant

  $14.00 -- $14.63      0.40 shares covered by a new        Existing option to purchase
                        option for every 1 share covered    1,000 shares at $14.50 exercise
                        by a cancelled option               price could be exchanged for
                                                            option to purchase 400 shares
                                                            at a new exercise price equal
                                                            to stock price at date of new
                                                            option grant


         No fractional shares will be issued. If the number of shares subject to
a New Option issuable on the grant date would include a fraction of a share, the
number of shares will be rounded to the nearest share. If you tender options for
exchange as described in the Offer, we may grant you New Options under either of
the Plans.

         If you are not an employee of Radyne ComStream continuously from the
date you tender options through the date we grant the New Options, you will not
receive any New Options in exchange for your tendered options that have been
accepted for exchange. You also will not receive any other consideration for
your tendered options if you are not an employee from the date you tender
options through the date we grant the New Options.

         For purposes of the Offer, we will be deemed to have accepted for
exchange options that are validly tendered and not properly withdrawn as, if,
and when we give oral or written notice to the option holders of our acceptance
for exchange of such options. Subject to our rights to extend, terminate, and
amend the Offer, we will accept promptly after the expiration of the Offer all
properly tendered options that are not validly withdrawn. Promptly after we
accept tendered options for exchange, we will send each tendering option holder
a letter or e-mail indicating the number of shares subject to the options that
we have accepted for exchange, the corresponding number of such shares that will
be subject to the New Options, and the expected grant date of the New Options.

6.       CONDITIONS OF THE OFFER.

         Notwithstanding any other provision of the Offer, we will not be
required to accept any options tendered for exchange, and we may terminate or
amend the Offer, or postpone our acceptance and cancellation of any options
tendered for exchange, in each case, subject to Rule 13e-4(f)(5) under the
Securities Exchange Act, if at any time on or after January 22, 2003, and prior
to the Expiration Date any of the following events has occurred, or has been
determined by us to have occurred, and, in our reasonable judgment in any such
case and regardless of the


                                       15

circumstances giving rise thereto the occurrence of such event or events makes
it inadvisable for us to proceed with the Offer or with such acceptance and
cancellation of options tendered for exchange:

         (a) there shall have been threatened or instituted or be pending any
action or proceeding by any government or governmental, regulatory or
administrative agency, authority or tribunal or any other person, domestic or
foreign, before any court, authority, agency or tribunal that directly or
indirectly challenges the making of the Offer, the acquisition of some or all of
the tendered options pursuant to the Offer, the issuance of New Options, or
otherwise relates in any manner to the Offer or that, in our reasonable
judgment, could materially and adversely affect the business, condition
(financial or other), income, operations or prospects of Radyne ComStream, or
otherwise materially impair in any way the contemplated future conduct of our
business or the business of any of our subsidiaries or materially impair the
contemplated benefits of the Offer to us;

         (b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered, amended,
enforced or deemed to be applicable to the Offer or us or any of our
subsidiaries, by any court or any authority, agency or tribunal that, in our
reasonable judgment, would or might directly or indirectly:

                         (1)  make the acceptance for exchange of, or issuance
                              of New Options for, some or all of the tendered
                              options illegal or otherwise restrict or prohibit
                              consummation of the Offer or otherwise relates in
                              any manner to the Offer;

                         (2)  delay or restrict our ability, or render us
                              unable, to accept for exchange, or issue New
                              Options for, some or all of the tendered options;

                         (3)  materially impair the contemplated benefits of the
                              Offer to us;

                         (4)  materially and adversely affect the business,
                              condition (financial or other), income, operations
                              or prospects of Radyne ComStream, or otherwise
                              materially impair in any way the contemplated
                              future conduct of our business or the business of
                              any of our subsidiaries or materially impair the
                              contemplated benefits of the Offer to us;

                   (c)   there shall have occurred:

                         (1)  the suspension of payments in respect of banks in
                              the United States, whether or not mandatory;

                         (2)  the commencement of a war, armed hostilities or
                              other international or national crisis directly or
                              indirectly involving the United States;

                         (3)  any limitation, whether or not mandatory, by any
                              governmental, regulatory or administrative agency
                              or authority on, or any event that in our


                                       16

                              reasonable judgment might affect, the extension of
                              credit by banks or other lending institutions in
                              the United States;

                         (4)  any negative change in the general political,
                              market, economic or financial conditions in the
                              United States or abroad that has or is reasonably
                              likely to have (in our reasonable judgment) a
                              material adverse effect on the business, condition
                              (financial or other), operations or prospects of
                              Radyne ComStream; or

                         (5)  in the case of any of the foregoing existing at
                              the time of the commencement of the Offer, a
                              material acceleration or worsening thereof.

         (d) there shall have occurred any change in generally accepted
accounting standards which could or would require us for financial reporting
purposes to record compensation expense against our earnings in connection with
the Offer;

         (e) a tender or exchange offer with respect to some or all of our
common stock, or a merger or acquisition proposal for us, shall have been
proposed, announced or made by another person or entity or shall have been
publicly disclosed, or we shall have learned that any person, entity or group
shall have filed a Notification and Report Form under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 or made a public announcement reflecting an
intent to acquire us or any of our subsidiaries or any of the assets or
securities of us or any of our subsidiaries;

         (f) any change or changes shall have occurred in the business,
condition (financial or other), assets, income, operations, prospects or stock
ownership of Radyne ComStream that, in our reasonable judgment, is or may be
material to Radyne ComStream; or

         (g) the rules and regulations of the Securities and Exchange
Commission, Nasdaq, or such other national securities exchange or inter-dealer
quotation system on which our common stock is then traded requires that our
stockholders approve the Offer.

         The conditions to the Offer are for our benefit. We may assert them in
our discretion regardless of the circumstances giving rise to them prior to the
Expiration Date. We may waive them, in whole or in part, at any time and from
time to time prior to the Expiration Date, in our discretion, whether or not we
waive any other condition to the Offer. If we waive a condition with respect to
any option or option holder, we will also waive that condition with respect to
all other options and option holders. Our failure at any time to exercise any of
these rights will not be deemed a waiver of any such rights. Any determination
we make concerning the events described in this Section 6 will be final and
binding upon all persons.

         If we accept options you tender in the Offer, we may defer any grant to
you of additional Options for which you may be eligible before the New Option
grant date until after the New Option grant date, so that you will be granted no
New Options for any reason until at least six months and one day after any of
your tendered options have been cancelled. We may defer the grant to you of any
additional options in order to avoid incurring compensation expense against our
earnings as a result of accounting rules that could apply to these interim
option grants as a result of the Offer.


                                       17

7.       PRICE RANGE OF COMMON STOCK UNDERLYING OPTIONS.

         Our common stock trades on the Nasdaq National Market under the symbols
"RADN." The following table sets forth the range of high and low trading prices
as reported by the Nasdaq National Market for the periods indicated.



                                            HIGH $      LOW $
                                            ------      -----
                                                  
2000:
  First Quarter........................      35.00       6.50
  Second Quarter.......................      23.38      11.13
  Third Quarter........................      17.56       7.81
  Fourth Quarter.......................      10.13       3.91

2001:
  First Quarter........................       8.63       4.88
  Second Quarter.......................       7.36       4.44
  Third Quarter........................       6.17       3.60
  Fourth Quarter.......................       6.10       3.54

2002:
  First Quarter........................       7.35       4.76
  Second Quarter.......................       4.82       3.25
  Third Quarter........................       3.55       1.25
  Through December 20, 2002............       3.60       1.50


         As of December 20, 2002, the last reported sale price of our common
stock, as quoted on Nasdaq, was $2.77 per share.

         WE RECOMMEND THAT YOU OBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON
STOCK BEFORE DECIDING WHETHER TO TENDER YOUR OPTIONS.

8.       SOURCE AND AMOUNT OF CONSIDERATION; TERMS OF NEW OPTIONS.

         CONSIDERATION. We will issue New Options under our Plans in exchange
for outstanding eligible options properly tendered and accepted for exchange by
us.

         TERMS OF NEW OPTIONS. The New Options will be issued under either of
the Plans as our Board or Compensation Committee may determine. The New Options
will also be granted pursuant to a new option agreement between us and each
option holder who has tendered eligible options in the Offer. The following
description summarizes the material terms of our Plans and the options granted
under our Plans.

         GENERAL. The maximum number of shares of common stock available for
issuance pursuant to the exercise of options granted under our existing Plans
are approximately as follows:


                                       18

                                                                
Radyne ComStream Inc. 1996 Incentive Stock Option Plan               265,739
Radyne ComStream Inc. 2000 Long-Term  Incentive Plan               1,688,415



         Both the 1996 Incentive Stock Option Plan and the 2000 Long-Term
Incentive Plan permit the granting of options intended to qualify as incentive
options under the Internal Revenue Code and the granting of options that do not
qualify as incentive options.

         ADMINISTRATION. The compensation committee of our board of directors
administers each of our existing Plans. The compensation committee is composed
of three directors who are intended to be "non-employee directors" as defined in
Rule 16b-3 under the Securities Exchange Act and "outside directors" for
purposes of Section 162(m) of the Internal Revenue Code. The members of the
compensation committee are appointed by the board to serve for such terms as the
board may determine by resolution. The board may remove any member of the
compensation committee or reconstitute the compensation committee with other
directors, subject to the requirements of Rule 16b-3.

         TERM. Each New Option will have the same expiration date as the
cancelled option for which it was exchanged. Your existing options generally
have an expiration date of 10 years from the date of grant.

         TERMINATION. New Options issued under our existing Plans will expire on
the same schedule as the cancelled options for which they were exchanged,
however in no event will such expiration exceed 10 years. Option agreements
generally provide that your New Options will terminate following the termination
of your employment, unless the New Options are exercised, to the extent that
they were exercisable immediately before such termination, within 90 days
following such termination. In the event that the termination of your employment
is by reason of permanent and total disability, death, or retirement you, or
your executors, administrators, legatees or distributees of your estate, may
exercise, within one year following such termination, any New Options held by
you that was exercisable immediately before your employment termination.

         The termination of your New Options under the circumstances specified
in this section will result in the termination of your interests in the
respective Plan. In addition, your New Options may terminate, together with the
respective Plan and all other outstanding options issued to other employees,
following the occurrence of certain "corporate transaction" events, as described
below.

         EXERCISE PRICE. The compensation committee will determine the exercise
price of each New Options. The exercise price of the New Options to be granted
pursuant to the Offer will be equal to the last reported sale price of our
common stock on Nasdaq, or such other national securities exchange or
inter-dealer quotation system on which our common stock is then traded, on the
date of grant.

         VESTING AND EXERCISE. The New Options will be vested to the same
degree, as a percentage of the option, as your existing options would have been
vested on the New Option grant date if you had never tendered your existing
options. The New Options will continue to vest on the same schedule as your
existing options, as a percentage of the option. If you choose


                                       19

not to exchange your options, then your options will remain outstanding and they
will retain their current exercise price, vesting schedule and expiration term.
Upon the occurrence of a "change of control" (as defined in each plan), the 2000
Plan provides for immediate accelerated vesting of all options while the 1996
Plan provides that if no provision is made to continue the 1996 Plan or assume
or replace the outstanding options with new options of a successor entity, then
the Company may choose to accelerate the vesting of the options outstanding
under the 1996 Plan, but is not obligated to do so.

         PAYMENT OF EXERCISE PRICE. You may exercise your New Options, in whole
or in part, by delivery of a written notice to us on any business day at our
principal office addressed to the attention of the compensation committee, which
specifies the number of shares for which the New Option is being exercised and
which is accompanied by payment in full of the applicable exercise price. The
permissible methods of payment of the option exercise price generally are full
payment in cash, by check, or, with the compensation committee's consent, in
shares of common stock duly endorsed for transfer to us, or by a combination of
these methods.

         TRANSFERABILITY OF OPTIONS. New Options may not be transferred except
by will, the laws of descent and distribution or the terms of any applicable
trust. Following a transfer, all New Options will continue to be subject to the
same terms and conditions that were applicable to the New Options immediately
before the transfer. During your lifetime, only you, or your guardian or legal
representative in the case of your incapacity or incompetency, may exercise New
Options granted to you.

         REGISTRATION OF OPTION SHARES. The shares of common stock issuable upon
exercise of options under our Plans, including the shares that will be issuable
upon exercise of all New Options to be granted pursuant to this Offer, have been
registered under the Securities Act on a registration statement on Form S-8
filed with the SEC. We will use reasonable efforts to maintain such registration
statement on Form S-8.

         FEDERAL INCOME TAX CONSEQUENCES. The following summary of certain U.S.
federal income tax information is based on federal income tax laws currently in
effect, is not intended to be exhaustive and does not address all matters that
may be relevant to a particular option holder based on his or her specific
circumstances. Subject to these limitations, this summary applies to you only if
you are an individual who is a citizen or resident of the United States,
including an individual who is a lawful permanent resident of the United States
or who meets the "substantial presence" test under Section 7701(b) of the U.S.
Internal Revenue Code. The summary addresses only current U.S. federal income
tax law, which is subject to change (possibly on a retroactive basis), and does
not discuss the income tax laws of any state, municipality, or non-U.S. taxing
jurisdiction, or U.S. gift and estate tax laws.

         This summary addresses general U.S. federal income tax implications of
option grants and option exercises by delivery of cash consideration under our
various Plans and the disposition of stock acquired upon such exercises, and we
strongly recommend that you consult your own tax advisor concerning your
particular circumstances with respect to these matters. If you exercise an
option by delivering consideration other than cash (being so permitted pursuant
to your option agreement), special rules apply. You should consult your tax
advisor when contemplating such an exercise.


                                       20

Incentive Stock Options

         Upon the grant or exercise of an incentive stock option, you do not
recognize any income for U.S. federal income tax purposes, except to the extent
that the exercise causes you to incur alternative minimum tax, which is
discussed below. If you hold the shares acquired upon exercise of an incentive
stock option beyond the later of (i) two years following the date the incentive
stock option was granted and (ii) one year following the date the incentive
stock option was exercised (the "holding periods"), you will not recognize any
ordinary income with respect to the exercise of the incentive stock option or
the sale of shares acquired upon such exercise. In addition, any gain or loss on
a subsequent sale of the shares (calculated as the difference between the amount
realized on the sale and your tax basis in the shares (generally, the exercise
price)) generally will be capital gain or loss. Such capital gain or loss will
be long-term capital gain or loss if your holding period for the shares is more
than one year.

         If you dispose of shares acquired upon exercise of an incentive stock
option before the expiration of the holding periods, then in most cases the
lesser of (i) the excess of the fair market value of the shares when the
incentive stock option was exercised over the amount paid for such shares and
(ii) the excess of the amount realized on the disposition of the shares over
your tax basis in the shares (generally, the exercise price) will be treated as
ordinary income in the year of disposition. In addition, upon disposition of the
shares before expiration of the holding periods, you will generally recognize
capital gain or loss equal to the excess, if any, of the amount realized as a
result of such disposition over the sum of (i) your tax basis in the shares
immediately before disposition (generally, the exercise price) and (ii) the
amount of ordinary income recognized by you as described in the preceding
sentence. Any such capital gain or loss will be long-term capital gain or loss
if your holding period for the shares is more than one year.

Non-Qualified Options

         Upon exercise of a non-qualified option, you generally will recognize
ordinary income in an amount equal to the excess, if any, of the fair market
value at time of exercise of the stock issued over the exercise price. Such
income is subject to withholding and employment taxes collected from you and
payable by us. In addition, when you sell stock acquired upon exercise of a
non-qualified option, you generally will recognize capital gain or loss equal to
the difference between the amount realized on such sale and your tax basis in
the disposed shares (generally, the fair market value of the stock on the date
the option was exercised). Such gain or loss will be long-term gain or loss if
the holding period of the shares is more than one year.

Alternative Minimum Tax

         The exercise of an incentive stock option may subject you to the
alternative minimum tax under Section 55 of the Internal Revenue Code. For
alternative minimum tax purposes, upon exercise of an incentive stock option the
excess of the fair market value of the shares at the time of exercise over the
exercise price is includible in your alternative minimum taxable income. If you
pay alternative minimum tax, the amount of such tax generally may be carried
forward as a credit against any subsequent year's regular tax in excess of the
alternative minimum tax for such year. Also, when you sell the stock acquired
upon exercise of the option, the basis of the


                                       21

stock for alternative minimum tax purposes will be equal to its fair market
value at the time of exercise. Because the alternative minimum tax calculation
may be complex, optionees should consult their own tax advisors prior to
exercising incentive stock options.

         Our statements in this offer to exchange concerning our Plans and the
New Options are merely summaries and do not purport to be complete. The
statements are subject to, and are qualified in their entirety by reference to,
all provisions of the plans and the appropriate form of option agreement. Please
contact Garry D. Kline (telephone: (602) 437-9620) at Radyne ComStream Inc.,
3138 E. Elwood Street, Phoenix, Arizona 85034, to receive a copy of the Plan and
the form of option agreement thereunder. We will promptly furnish you copies of
these documents at our expense.

9.       INFORMATION CONCERNING RADYNE COMSTREAM.

         GENERAL. Our principal executive offices are located at 3138 E. Elwood
Street, Phoenix, Arizona 85034, and our telephone number is (602) 437-9620.

         We design, manufacture, install and sell equipment used in the
ground-based portion of satellite communication systems to receive, and transmit
data, video, audio and Internet over satellite communications links. We also
design, manufacture, and sell equipment used in cable television systems. Our
products are used in applications for telephone, data, video and audio broadcast
communications, private and corporate data networks, Internet applications, and
digital television for cable and network broadcast. We serve customers in over
80 countries, including customers in the television broadcast industry,
international telecommunications companies, Internet service providers, private
communications networks, network and cable television and the United States
government. With headquarters in Phoenix, Arizona, and offices throughout the
world, Radyne ComStream is publicly traded on NASDAQ under the symbol "RADN."
The company's website URL is www.radynecomstream.com.

         FINANCIAL INFORMATION. The following table sets forth selected
consolidated financial and operating data for Radyne ComStream. The selected
historical statement of operations data for the years ended December 31, 2000
and December 31, 2001 and the selected historical balance sheet data as of
December 31, 2000 and December 31, 2001 have been derived from the consolidated
financial statements included in our annual report on Form 10-K for the year
ended December 31, 2001, that have been audited by KPMG LLP, independent
accountants. The selected historical statement of operations data for the nine
months ended September 30, 2001 and 2002 and the selected historical balance
sheet data as of September 30, 2001 and 2002, which are included in our
quarterly report on Form 10-Q for the quarter ended September 30, 2002, are
unaudited, but include, in the opinion of management, all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of such data. The information presented below should be read
together with our consolidated financial statements and related notes. We have
presented the following data in thousands, except per share amounts.


                                       22



                                          FISCAL YEAR ENDED DECEMBER 31,    NINE MONTHS ENDED SEPTEMBER 30,
                                          ------------------------------    -------------------------------
                                                   (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
                                              2001             2000             2002              2001
                                          ------------     ------------     ------------      ------------
                                                                                  
OPERATING DATA:
Net sales                                 $     68,471     $     70,107     $     43,944      $     49,422
Gross profit                                    28,912           31,827           13,625            21,531
Operating gain (loss)                            2,793            8,937           (5,187)            2,177
Net income (loss)                                1,936           12,441           (5,074)            2,602
Income (loss) per share, basic                    0.13             0.89            (0.33)             0.11
Income (loss) per share, diluted                  0.13             0.81            (0.33)             0.10
Shares used in per share calculation,
   basic                                    14,943,516       13,972,078       15,161,804        14,922,978
Shares used in per share calculation,
   diluted                                  15,411,568       15,426,297       15,161,804        15,443,280

BALANCE SHEET DATA:
Cash and cash equivalents                 $      7,211     $     16,245     $     13,750      $      8,815
Working capital                                 35,959           33,858           30,296            35,101
Total assets                                    53,241           51,844           47,579            53,648
Total liabilities                                7,893           10,030            6,562             8,906
Stockholders' equity                            45,347           41,814           41,017            44,742


- ----------

         See "Additional Information" under Section 16 for instructions on how
you can obtain copies of our SEC reports that contain the audited financial
statements and unaudited financial data we have summarized above.

10.      INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS
         CONCERNING THE OPTIONS.

         The Company's executive officers and directors are not eligible to
participate in this Offer.


                                       23

                 OWNERSHIP OF RADYNE COMSTREAM INC. COMMON STOCK

         The following table sets forth certain information known to the Company
with respect to beneficial ownership of the Company's common stock as of
December 20, 2002, by each of the Company's directors executive officers and all
directors and executive officers of the Company as a group.



                                   NUMBER OF         PERCENTAGE OF
        NAME & ADDRESS             SHARES (1)          CLASS (1)
        --------------             ----------          ---------
                                               
Robert C. Fitting(2)               548,640(3)             3.6%
Brian J. Duggan(2)                 248,580(4)             1.6%
Steven W. Eymann(2)                409,467(5)             2.7%
Garry D. Kline(2)                  254,270(6)             1.6%
Yip Loi Lee(2)                      36,000(7)               *
C. J. Waylan(2)                     42,000(9)               *
Dennis W. Elliott(2)                36,000(7)               *
Kum Chuen Tang(2)                   26,300(8)               *
All directors and executive         1,604,257             10.5%
officers of Radyne ComStream
as a group (eight persons)


- ----------

*        Less than one percent.

(1)      The numbers and percentages shown include the shares of common stock
         actually owned as of December 20, 2002, and the shares of common stock
         that the person or group had the right to acquire within 60 days of
         such date. In calculating the percentage of ownership, all shares of
         common stock that the identified person or group had the right to
         acquire within 60 days of December 20, 2002, upon the exercise of
         options are deemed to be outstanding for the purpose of computing the
         percentage of the shares of common stock owned by such person or group,
         but are not deemed to be outstanding for the purpose of computing the
         percentage of the shares of common stock owned by any other person.

(2)      The address for each of these stockholders is: c/o Radyne ComStream
         Inc., 3138 East Elwood Street, Phoenix, Arizona 85034.

(3)      Includes 388,086 shares underlying exercisable options held by Mr.
         Fitting.

(4)      Includes 230,990 shares underlying exercisable options held by Mr.
         Duggan.

(5)      Includes 337,475 shares underlying exercisable options held by Mr.
         Eymann.

(6)      Includes 218,082 shares underlying exercisable options held by Mr.
         Kline.


                                       24

(7)      Includes 36,000 shares underlying exercisable options held by each of
         Messrs. Elliott and Lee.

(8)      Includes 26,300 shares underlying exercisable options held by Mr. Tang.

(9)      Includes 31,500 shares underlying exercisable options held by Mr.
         Waylan.

         Based upon our records and upon information provided to us by our
directors, executive officers, and associates, neither we nor, to the best of
our knowledge, any of our directors or executive officers nor any associates of
any of the foregoing, has effected any transaction in the options or our common
stock during the 60 days prior to this offering.

11.      STATUS OF OPTIONS ACQUIRED BY US IN THE OFFER; ACCOUNTING CONSEQUENCES
         OF THE OFFER.

         Options we acquire pursuant to the Offer will be cancelled and the
shares of common stock subject to those options will be returned to the pool of
shares available for grants of New Options and for issuance upon the exercise of
such New Options. To the extent such shares are not fully reserved for issuance
upon exercise of the New Options to be granted in connection with the Offer, the
shares will be available for future awards to employees, directors, and other
eligible plan participants without further stockholder action, except as
required by applicable law.

         We believe that Radyne ComStream will not incur any compensation
expense solely as a result of the transactions contemplated by the Offer
because:

    -    we will not grant any New Options until a business day that is at least
         six months and one day after the date that we accept and cancel options
         tendered for exchange; and

    -    the exercise price of all New Options will equal the market value of
         the common stock on the date we grant the New Options.

         We may incur compensation expense, however, if we grant any options
having an exercise price less than $6.00 to any tendering option holder before
the scheduled New Option grant date. Our grant of those options to the tendering
option holder would be treated for financial reporting purposes as a variable
award to the extent that the number of shares subject to the newly granted
options is equal to or less than the number of the option holder's tendered
option shares. In this event, we would be required to record as compensation
expense the amount by which the market value of the shares subject to the newly
granted options exceeds the exercise price of those shares. This compensation
expense would accrue as a charge to Radyne ComStream's earnings over the vesting
period of the newly granted options. We would adjust this compensation expense
periodically based on increases or decreases in the market value of the shares
subject to the newly granted options until the options are exercised, forfeited
or expired.


                                       25

12.      LEGAL MATTERS; REGULATORY APPROVALS.

         We are not aware of any license or regulatory permit that appears to be
material to our business that might be adversely affected by our exchange of
options and issuance of New Options as contemplated by the Offer, or of any
approval or other action by any government or governmental, administrative or
regulatory authority or agency, domestic or foreign, that would be required for
the acquisition or ownership of our options as contemplated herein. Should any
such approval or other action be required, we presently contemplate that we will
seek such approval or take such other action. We are unable to predict whether
we may determine that we are required to delay the acceptance of options for
exchange pending the outcome of any such matter. We cannot assure you that any
such approval or other action, if needed, would be obtained or would be obtained
without substantial conditions or that the failure to obtain any such approval
or other action might not result in adverse consequences to our business. Our
obligation under the Offer to accept tendered options for exchange and to issue
New Options for tendered options is subject to conditions, including the
conditions described in Section 6.

13.      MATERIAL FEDERAL INCOME TAX CONSEQUENCES.

         The discussion in this Section 13 is a general summary of the material
U.S. federal income tax consequences of the exchange of options pursuant to the
Offer. This summary applies to you only if you are an individual who is a
citizen or resident of the United States, including an individual who is a
lawful permanent resident of the United States or who meets the "substantial
Presence" test under Section 7701(b) of the Internal Revenue Code. For a summary
addressing general U.S. federal income tax implications of option grants and
exercises under our various stock option plans and the disposition of stock
acquired upon such exercises, see Section 8 above. This Section 13 addresses
only current U.S. federal income tax law, which is subject to change (possibly
on a retroactive basis), and expressly does not discuss the income tax laws of
any state, municipality, or non-U.S. taxing jurisdiction, or U.S. gift and
estate tax laws. The summary below does not discuss all of the tax consequences
that may be relevant to you in light of your particular circumstances, nor is it
intended to be applicable in all respects to all categories of option holders.
Moreover, this summary is provided for general informational purposes only. We
are not in a position to provide tax advice, and we strongly recommend that you
consult your tax advisor to determine the tax consequences to you of this Offer.

         We believe that the exchange of outstanding options for New Options
will be treated as non-taxable, and that option holders who exchange outstanding
options for New Options should not be required to recognize income for U.S.
federal income tax purposes either at the time of the surrender of outstanding
options or at the time of grant of the New Options.

         If your current options are incentive stock options, your New Options
will be granted as incentive stock options if possible and to the extent that
they qualify as incentive stock options under the tax laws in effect on the date
of grant of the New Options, including the $100,000 limit discussed below. The
holding period of each new incentive stock option will begin on the date the new
incentive stock option is granted. New Options will be treated as non-qualified
options to the extent such New Option is issued in exchange for an outstanding
option which was a non-qualified option or to the extent such New Option exceeds
the $100,000 limit discussed below.


                                       26

         Under U.S. federal income tax law, no person may receive a number of
incentive stock options that become exercisable for the first time in any
calendar year which, when aggregated with all other incentive stock options
first becoming exercisable in that calendar year, would permit the holder to
purchase a number of shares of stock having a value (determined as of the date
the option was granted) in excess of $100,000. New Options you receive in
exchange for outstanding options will be treated as newly granted options.
Accordingly, for purposes of the $100,000 limit, each New Option will be treated
as first becoming exercisable in accordance with the vesting schedule of such
New Option (regardless of the vesting schedule of the outstanding option that
was exchanged for such New Option).

         Options that we do not accept for exchange will remain outstanding in
accordance with their terms. You should consult your tax advisor prior to
deciding whether to participate in the exchange to determine the tax status of
options that remain outstanding and the tax consequences of exercising such
options and disposing of shares received upon exercise (including the
determination of the appropriate date at which the one-year and two-year holding
periods discussed in Section 8 above should be treated as beginning in the case
of options for which incentive stock option status is sought). The foregoing is
a summary of certain U.S. federal income tax considerations for option holders
in connection with the exchange of outstanding options for New Options. The
summary, however, does not address every situation that may arise in connection
with the outstanding options or the New Options. For example, it does not deal
with the tax implications arising from an optionee's death; nor does it discuss
foreign, state or local income tax consequences. The summary is not intended as
tax advice or as a substitute for careful tax planning, and each optionee is
urged to consult with and rely on his or her own advisors with respect to the
tax consequences (foreign, federal, state and local) of the retention of
outstanding options, the exchange of outstanding options for New Options, the
exercise of New Options and the disposition of shares acquired upon such
exercise.

          WE RECOMMEND THAT YOU CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE
FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF PARTICIPATING IN THE OFFER.

14.      EXTENSION OF OFFER; TERMINATION; AMENDMENT.

         We reserve the right, in our discretion, at any time and from time to
time, and regardless of whether or not any event set forth in Section 6 has
occurred or is deemed by us to have occurred, to extend the period of time
during which the Offer is open and thereby delay the acceptance for exchange of
any options by giving oral or written notice of such extension to the option
holders and making a public announcement thereof.

         We also reserve the right, in our reasonable judgment, prior to the
Expiration Date to terminate or amend the Offer and to postpone our acceptance
and cancellation of any options tendered for exchange upon the occurrence of any
of the conditions specified in Section 6, by giving oral or written notice of
such termination or postponement to the option holders and making a public
announcement thereof. Our reservation of the right to delay our acceptance and
cancellation of options tendered for exchange is limited by Rule 13e-4(f)(5)
promulgated under the Securities Exchange Act, which requires that we must pay
the consideration offered or return the options tendered promptly after
termination or withdrawal of a tender offer.


                                       27

         Subject to compliance with applicable law, we further reserve the
right, in our discretion, and regardless of whether any event set forth in
Section 6 has occurred or is deemed by us to have occurred, to amend the Offer
in any respect, including, without limitation, by decreasing or increasing the
consideration offered in the Offer to option holders or by decreasing or
increasing the number of options being sought in the Offer.

         Amendments to the Offer may be made at any time and from time to time
by public announcement of the amendment. In the case of an extension, the
amendment must be issued no later than 9:00 a.m., Mountain Standard Time, on the
next business day after the last previously scheduled or announced Expiration
Date. Any public announcement made pursuant to the Offer will be disseminated
promptly to option holders in a manner reasonably designated to inform option
holders of such change.

         If we materially change the terms of the Offer or the information
concerning the Offer, or if we waive a material condition of the Offer, we will
extend the Offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3)
under the Securities Exchange Act. These rules require that the minimum period
during which an offer must remain open following material changes in the terms
of the offer or information concerning the offer, other than a change in price
or a change in percentage of securities sought, will depend on the facts and
circumstances, including the relative materiality of such terms or information.
If we decide to take any of the following actions, we will publish notice of
such action and extend the Offer for a period of ten business days after the
date of such publication:

         (a)  (1)  we increase or decrease the amount of consideration offered
                   for the options;

              (2)  we decrease the number of options eligible to be tendered in
                   the Offer; or

              (3)  we increase the number of options eligible to be tendered in
                   the Offer by an amount that exceeds 2% of the shares of
                   common stock issuable upon exercise of the options that are
                   subject to the Offer immediately prior to the increase; and

         (b) the Offer is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and including, the
date that notice of such increase or decrease is first published, sent or given
in the manner specified in this Section 14.

15.      FEES AND EXPENSES.

         We will not pay any fees or commissions to any broker, dealer or other
person for soliciting tenders of options pursuant to this Offer.

16.      ADDITIONAL INFORMATION.

         We have filed with the SEC a Tender Offer Statement on Schedule TO, of
which this offer to exchange is a part, with respect to the Offer. This Offer
does not contain all of the information contained in the Schedule TO and the
exhibits to the Schedule TO. We recommend


                                       28

that you review the Schedule TO, including its exhibits, before making a
decision on whether to tender your options.

         The rules of the SEC allow us to "incorporate by reference" information
into this document, which means that we can disclose important information to
you by referring you to another document filed separately with the SEC. This
Offer incorporates by reference the financial statements and the notes thereto
contained in the documents listed below that have been previously filed with the
SEC and any future filings it makes with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act, until completion of the Offer:

         (a) Our Annual Report on Form 10-K for the year ended December 31,
2001, filed with the Securities and Exchange Commission on April 1, 2002;

         (b) Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2002, filed with the Securities and Exchange Commission on May 15, 2002;

         (c) Our Quarterly Report on Form 10-Q for the quarter ended June 30,
2002, filed with the Securities and Exchange Commission on August 19, 2002;

         (d) Our Quarterly Report on Form 10-Q for the quarter ended September
30, 2002, filed with the Securities and Exchange Commission on November 14,
2002;

         (e) Radyne ComStream Inc. 1996 Incentive Stock Option Plan,
incorporated by reference to Exhibit 4.1 to the Company's Registration Statement
on Form S-8, as filed with the commission on March 12, 1997 (File No.
333-23159), as amended by an Amendment to 1996 Incentive Stock Option Plan
incorporated by reference to Exhibit 4 to the Company's Registration Statement
on Form S-8, as filed with the Commission on November 18, 1998 (File No.
333-67469); and

         (f) Radyne ComStream Inc. 2000 Long-Term Incentive Plan, incorporated
by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-8,
as filed with the commission on July 19, 2000 (File No. 333-41704).

         Our SEC filings may be examined, and copies may be obtained, at the
following SEC public reference rooms:

             450 Fifth Street, N.W.        500 West Madison Street
                    Room 1024                    Suite 1400
             Washington, D.C. 20549           Chicago, IL 60661

         You may obtain information on the operation of the public reference
rooms by calling the SEC at 1-800-SEC-0330.

         Our SEC filings are also available to the public on the SEC's Internet
site at http://www.sec.gov.

         We will also provide without charge to each person to whom a copy of
this offer to exchange is delivered, upon the written or oral request of any
such person, a copy of any or all of


                                       29

the documents to which we have referred you, other than exhibits to such
documents (unless such exhibits are specifically incorporated by reference into
such documents). Requests should be directed to:

                              Radyne ComStream Inc.
                              3138 E. Elwood Street
                             Phoenix, Arizona 85034
                                 (602) 437-9620

         As you read the foregoing documents, you may find some inconsistencies
in information from one document to another. If you find inconsistencies between
the documents, or between a document and this offer to exchange, you should rely
on the statements made in the most recent document.

         The information contained in this offer to exchange about Radyne
ComStream should be read together with the information contained in the
documents to which we have referred you.

17.      MISCELLANEOUS.

         We are not aware of any jurisdiction where the making of the Offer is
not in compliance with applicable law. If we become aware of any jurisdiction
where the making of the Offer is not in compliance with any valid applicable
law, we will make a good faith effort to comply with such law. If, after such
good faith effort, we cannot comply with such law, the Offer will not be made
to, nor will tenders be accepted from or on behalf of, the option holders
residing in such jurisdiction.

         WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR
BEHALF AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR OPTIONS
PURSUANT TO THE OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS
DOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO GIVE
YOU ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER
OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS DOCUMENT OR IN
THE RELATED LETTER OF TRANSMITTAL. IF ANYONE MAKES ANY RECOMMENDATION OR
REPRESENTATION TO YOU OR GIVES YOU ANY INFORMATION, YOU MUST NOT RELY UPON THAT
RECOMMENDATION, REPRESENTATION OR INFORMATION AS HAVING BEEN AUTHORIZED BY US.

Radyne ComStream Inc.                         December 23, 2003


                                       30

EX-99.A.2

                                                                  Exhibit 99.A.2


                              RADYNE COMSTREAM INC.

                              LETTER OF TRANSMITTAL

                            Offer to Exchange Options

            PURSUANT TO THE OFFER TO EXCHANGE DATED DECEMBER 23, 2002

                    THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
           12:00 MIDNIGHT, MOUNTAIN STANDARD TIME, ON JANUARY 22, 2003
                          UNLESS THE OFFER IS EXTENDED.

To:   Radyne ComStream Inc.
      3138 E. Elwood Street
      Phoenix, Arizona 85034
      (602) 437-9620
      Attn: Garry D. Kline

I am tendering the following options to purchase shares of common stock, no par
value ("Option Shares"), having exercise prices ranging between $6.00 and $8.25
and between $14.00 and $14.63 per share (to validly tender such options you must
complete the following table according to instruction 2 on page 5 of this Letter
of Transmittal):



   GRANT DATE OF OPTION(1)    EXERCISE PRICE OF OPTION    TOTAL NUMBER OF SHARES
                                                             SUBJECT TO OPTION
   -----------------------    ------------------------    ----------------------
                                                    





  YOUR OPTION AGREEMENT(S) EVIDENCING OPTIONS TO BE TENDERED MUST BE FORWARDED
                        WITH THIS LETTER OF TRANSMITTAL.




- ----------

(1) List each option on a separate line even if more than one option was issued
on the same grant date. For purposes of completing the foregoing table, an
option is comprised of a single grant entitling the holder to purchase multiple
shares of common stock.

To Radyne ComStream Inc.:

      Subject to the conditions in the Offer to Exchange dated December 23,
2002, and in this Letter of Transmittal, both of which together constitute the
"Offer," I am tendering to Radyne ComStream Inc., a Delaware corporation, the
options to purchase shares of common stock, $.001 par value per share, of Radyne
ComStream specified in the table on page 1 of this letter. The number of shares
granted in my new option(s) will depend on the exercise price of the option(s) I
elected to cancel under the offer, as set forth in the exchange ratio schedule
below, subject to adjustments for any future stock splits, stock dividends and
similar events that may occur during the exchange period:



- --------------------------------------------------------------------------------------------------------
      EXERCISE PRICE RANGE                     EXCHANGE RATIO                        EXAMPLE
- --------------------------------------------------------------------------------------------------------
                                                                   
                                                                         Existing option to purchase
                                                                         1,000 shares at $7.00 exercise
                                                                         price could be exchanged for
         $6.00 -- $8.25              0.67 shares covered by a new        option to purchase 670 shares
                                     option for every 1 share covered    at a new exercise price equal
                                     by a cancelled option               to stock price at date of new
                                                                         option grant
- --------------------------------------------------------------------------------------------------------
                                                                         Existing option to purchase
                                                                         1,000 shares at $14.50 exercise
                                                                         price could be exchanged for
        $14.00 -- $14.63             0.40 shares covered by a new        option to purchase 400 shares
                                     option for every 1 share covered    at a new exercise price equal
                                     by a cancelled option               to stock price at date of new
                                                                         option grant
- --------------------------------------------------------------------------------------------------------


      The exercise price of the new option(s) will be equal to the closing sale
price of our common stock as reported on the Nasdaq National Market on the new
option grant date (or the last trading day before the new option grant date, if
the market for trading in our stock is closed on such date). Accrued vesting
will remain consistent with the original grant once the new option is approved.

      I sell, assign, and transfer to, or upon the order of, Radyne ComStream,
all right, title and interest in and to all of the options that I am tendering
under this letter. I acknowledge that Radyne ComStream has advised me to consult
with my own advisors as to the consequences of participating or not
participating in the Offer. I agree that this letter is an amendment to any
option agreements that govern my tendered options.

      I represent and warrant that I have full power and authority to tender my
options and that, when and to the extent the options are accepted for exchange
by Radyne ComStream, the options will be free and clear of all security
interests, liens, restrictions, charges, encumbrances, conditional sales
agreements, or other obligations relating to their sale or transfer, other than
pursuant to the applicable option agreement. Furthermore, my tendered options
will not be subject to any adverse claims. Upon request, I will execute and
deliver any additional


                                       2

documents deemed by Radyne ComStream to be necessary or desirable to complete
the exchange of the options I am tendering.

      All authority that I confer or agree to confer will not be affected by,
and will survive, my death or incapacity, and all of my obligations under this
letter and the Offer will be binding upon my heirs, personal representatives,
successors and assigns. Except as stated in the Offer, this tender is
irrevocable.

      By execution hereof, I understand that tenders of options pursuant to the
procedure described in Section 3 of the Offer to Exchange and in the
instructions to this letter will constitute my acceptance of the terms and
conditions of the Offer. Radyne ComStream's acceptance for exchange of my
tendered options will constitute a binding agreement between Radyne ComStream
and me upon the terms and subject to the conditions of the Offer.

      I acknowledge that the new options that I will receive: (1) will not be
granted until on or about the first business day that is at least six months and
one day after the date my old options are canceled and (2) will be subject to
the terms and conditions set forth in a new option agreement between Radyne
ComStream and me that will be forwarded to me after the grant of the new
options. I also acknowledge that I must be an employee of Radyne ComStream from
the date I tender my options through the date the new options are granted and
otherwise be eligible under the Radyne ComStream Inc. 1996 Incentive Stock
Option Plan (the "1996 Plan") or 2000 Long-Term Incentive Plan (the "2000
Plan"), as applicable on the date the new options are granted in order to
receive new options. I further acknowledge that, if I do not remain an employee,
I will not receive any new options or any other consideration for my tendered
options that are accepted for exchange pursuant to the Offer.

      The name and social security number of the registered holder of the
tendered options appear below exactly as they appear on the option agreement or
agreements governing those options. The table on page 1 contains for each
tendered option the grant date, the exercise price, and the total number of
shares of common stock subject to the option I am tendering. I understand that I
may tender all of my options outstanding under Radyne ComStream's 1996 Plan and
2000 Plan having exercise prices ranging between $6.00 and $8.25 and between
$14.00 and $14.63 per share and that I am not required to tender any options in
the Offer. I understand that Radyne ComStream will not accept partial tenders of
individual option grants. The term "Expiration Date" means 12:00 midnight,
Mountain Standard Time, on January 22, 2003. The Expiration Date may be extended
by Radyne ComStream, during which the Offer will remain open.

      I recognize that, under certain circumstances set forth in the Offer to
Exchange, Radyne ComStream may terminate or amend the Offer and postpone its
acceptance and cancellation of any options tendered for exchange. In any such
event, I understand that the tendered options delivered with this letter but not
accepted for exchange will be returned to me at the address indicated below.

      THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS OF OPTIONS BE ACCEPTED
FROM OR ON BEHALF OF) HOLDERS IN ANY JURISDICTION IN WHICH THE MAKING OR
ACCEPTANCE OF THE OFFER WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH
JURISDICTION.


                                       3

      I agree to all of the terms and conditions of the Offer.




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


                                       4

  You must complete and sign the following exactly as your name appears on the
option agreement or agreements evidencing the options you are tendering. If the
signature is by a trustee, executor, administrator, guardian, attorney-in-fact,
      officer of a corporation, or another person acting in a fiduciary or
 representative capacity, please set forth the signer's full title and include
with this Letter proper evidence of the authority of such person to act in such
                                   capacity.

                               SIGNATURE OF OWNER

X
 -------------------------------------------------------------------------------
                  (Signature of Holder or Authorized Signatory)

Date:    January __, 2003

Name:
     ---------------------------------------------------------------------------
                                 (Please Print)

Capacity:
         -----------------------------------------------------------------------
 (If signing as a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
                                   capacity)

Address:
        ------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                            (Please include ZIP code)

Telephone No. (with area code):
                               -------------------------------------------------

Tax ID/Social Security No.:
                           -----------------------------------------------------

                                  INSTRUCTIONS

              FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

      1.    Delivery of Letter of Transmittal. A properly completed and duly
executed original of this letter, and any other documents required by this
letter, must be received by Radyne ComStream at its address set forth on the
front cover of this Letter ON OR BEFORE THE EXPIRATION DATE (which may be
extended by Radyne ComStream).

      THE METHOD BY WHICH YOU DELIVER ANY REQUIRED DOCUMENTS IS AT YOUR OPTION
AND RISK, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
RADYNE COMSTREAM. IF YOU ELECT TO DELIVER YOUR DOCUMENTS BY MAIL, RADYNE
COMSTREAM RECOMMENDS THAT YOU USE REGISTERED MAIL WITH RETURN RECEIPT REQUESTED
AND THAT YOU PROPERLY INSURE THE DOCUMENTS. IN ALL CASES, YOU SHOULD ALLOW
SUFFICIENT TIME TO ENSURE TIMELY DELIVERY.

      Tenders of options made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. If the Offer is extended by Radyne ComStream
beyond that time, you may withdraw your tendered options at any time until the
extended expiration of the Offer. In addition, unless Radyne ComStream accepts
your tendered options before 12:00 midnight,


                                       5

Mountain Standard Time, February 25, 2003, the date that is 40 business days
from the commencement of the Offer, you may withdraw your tendered Options at
any time after February 25, 2003. To withdraw tendered options you must deliver
a written notice of withdrawal with the required information to Radyne ComStream
while you still have the right to withdraw the tendered options. Withdrawals may
not be rescinded and any options withdrawn will thereafter be deemed not
properly tendered for purposes of the Offer unless such withdrawn options are
properly re-tendered prior to the Expiration Date by following the procedures
described above.

      Radyne ComStream will not accept any alternative, conditional or
contingent tenders. All tendering option holders, by execution of this letter,
waive any right to receive any notice of the acceptance of their tender, except
as provided for in the Offer to Exchange.

      2.    Tenders. If you intend to tender options pursuant to the Offer, you
must complete the table on page 1 of this letter by providing the following
information for each option that you intend to tender: (1) grant date, (2)
exercise price, and (3) the total number of unexercised options subject to the
option you are tendering. You may tender (surrender) all, none, or some of your
eligible options in exchange for new options. However, the Company will not
accept partial tenders of individual options.

      3.    Signatures on Letter of Transmittal. If this letter is signed by the
holder of the tendered options, the signature must correspond with the name as
written on the face of the option agreement or agreements to which the tendered
options are subject without alteration.

      If this letter is signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to Radyne ComStream of the authority of such person
so to act must be submitted with this letter.

      4.    Requests for Assistance or Additional Copies. Any questions or
requests for assistance, as well as requests for additional copies of the Offer
to Exchange or this letter may be directed to Garry D. Kline, at (602) 437-9620
or by e-mail to gkline@radynecomstream.com. Copies will be furnished promptly at
Radyne ComStream's expense.

      5.    Irregularities. All questions as to the number of shares of common
stock subject to tendered options and the validity, form, eligibility (including
time of receipt), and acceptance for exchange of any tender of options will be
determined by Radyne ComStream in its discretion, which determinations will be
final and binding on all parties. Radyne ComStream reserves the right to reject
any or all tenders of options Radyne ComStream determines not to be in proper
form or the acceptance of which may, in the opinion of Radyne ComStream's
counsel, be unlawful. Radyne ComStream also reserves the right to waive any of
the conditions of the Offer and any defect or irregularity in the tender of any
particular options, and Radyne ComStream's interpretation of the terms of the
Offer (including these instructions) will be final and binding on all parties.
No tender of options will be deemed to be properly made until all defects and
irregularities have been cured or waived. Unless waived, any defects or
irregularities in connection with tenders must be cured within such time as
Radyne ComStream will determine. Neither Radyne ComStream nor any other person
is or will be obligated to give notice of any


                                       6

defects or irregularities in tenders, and no person will incur any liability for
failure to give any such notice.

      6.    Important Tax Information. You should refer to Section 13 of the
Offer to Exchange, which contains important tax information. If you are a tax
resident outside of the United States, you should consult your own tax advisor
in order to determine the tax consequences of participating or not participating
in the offer.

   IMPORTANT: THIS LETTER TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS MUST BE
        RECEIVED BY RADYNE COMSTREAM ON OR PRIOR TO THE EXPIRATION DATE.


                                       7

EX-99.A.3

                                                                  Exhibit 99.A.3


        FORM OF CONFIRMATION TO OPTIONEES ELECTING TO PARTICIPATE IN THE
                               OFFER TO EXCHANGE

To    [OPTION HOLDER]

This message confirms that on January __, 2003, Radyne ComStream Inc. cancelled
__________ option(s) to purchase __________ shares of Radyne ComStream's common
stock, which you submitted for exchange under your Transmittal Letter. Radyne
ComStream will grant you a new option to purchase __________ shares, with the
terms and conditions described in the Offer to Exchange, dated December 23,
2002, subject to your continued employment at Radyne ComStream and the other
terms set forth in the Offer to Exchange.

If you have any questions about this message, please contact Garry D. Kline by
e-mail at gkline@radynecomstream.com, or by telephone at (602) 437-9620.

Thank you,

Robert C. Fitting
Chief Executive Officer

EX-99.A.4

                                                                  Exhibit 99.A.4


                          [RADYNE COMSTREAM LETTERHEAD]


                                                               December 23, 2002

DEAR ELIGIBLE RADYNE COMSTREAM OPTION HOLDER:

      Due to today's difficult market conditions, you hold stock options with an
exercise price that exceeds the market price of our common stock. Because our
board of directors recognizes that your option may not currently be providing
appropriate performance incentives, the board has considered a number of ways to
provide you with the benefit of options that over time may have a greater
potential to increase in value.

      As a result, I am happy to announce that we are offering to certain
eligible employees of Radyne ComStream the opportunity to exchange options with
exercise prices ranging between $6.00 and $8.25 and between $14.00 and $14.63
per share. Executive officers, directors and non-employees are not eligible to
participate in this exchange offer. Additionally, employees who received option
grants after June 15, 2002, are not permitted to participate in this exchange
offer. Partial tenders of an individual option will not be allowed. If you
tender an eligible option, you must tender that entire option and not a portion
of it.

      If you elect to voluntarily participate in this program, you will receive
an option to purchase new shares based on the following exchange ratio schedule,
subject to adjustments for any future stock splits, dividends and similar
events:



- --------------------------------------------------------------------------------------------------------
      EXERCISE PRICE RANGE                     EXCHANGE RATIO                        EXAMPLE
- --------------------------------------------------------------------------------------------------------
                                                                   
                                                                         Existing option to purchase
                                                                         1,000 shares at $7.00 exercise
                                                                         price could be exchanged for
         $6.00 -- $8.25              0.67 shares covered by a new        option to purchase 670 shares
                                     option for every 1 share covered    at a new exercise price equal
                                     by a cancelled option               to stock price at date of new
                                                                         option grant
- --------------------------------------------------------------------------------------------------------
                                                                         Existing option to purchase
                                                                         1,000 shares at $14.50 exercise
                                                                         price could be exchanged for
        $14.00 -- $14.63             0.40 shares covered by a new        option to purchase 400 shares
                                     option for every 1 share covered    at a new exercise price equal
                                     by a cancelled option               to stock price at date of new
                                                                         option grant
- --------------------------------------------------------------------------------------------------------


      No fractional shares will be issued. If the number of shares subject to a
new option issuable on the grant date would include a fraction of a share, the
number of shares will be rounded to the nearest share. Accrued vesting will
remain consistent with the original grant once the new option is approved.

      We will grant the new options on or about the first business day which is
at least six months and one day following the date we accept and cancel the
tendered options. For example, if we accept and cancel the tendered options on
January 22, 2003, as currently scheduled, we will grant the new options on or
about August 23, 2003. The per share exercise price of all new

options will equal the last reported sale price of our common stock on the
Nasdaq Stock Market's National Market on the date we grant the new options.

      You must be a current employee of Radyne ComStream from the date you
tender options continuously until the date we grant the new options in order to
receive new options. If you do not remain an employee, you will not receive any
new option or any other consideration for the options tendered by you and
canceled by the Company.

      Radyne ComStream expects that there will be no accounting charges to the
Company as a result of the stock exchange program. Moreover, the Company does
not anticipate that there will be any tax consequences to U.S. option holders.
Eligible option holders in other jurisdictions are encouraged to consult their
tax advisors.

      The new options will be granted under, and subject to, the terms of either
the 1996 Plan or 2000 Plan. If we accept your options for exchange, we will
forward a new option agreement to you promptly following the issuance of the new
options.

      The board of directors makes no recommendation as to whether you should
tender or refrain from tendering your options in the offer. You must make your
own decision whether to tender your options.

      The Company's offer is being made under the terms and subject to the
conditions of an offer to exchange and a related letter of transmittal which are
enclosed with this letter. You should carefully read the entire offer to
exchange and letter of transmittal before you decide whether to tender all or
any portion of your options. A tender of options involves risks, which are
discussed in the offer to exchange. To tender options, you will be required to
properly complete and return to us the letter of transmittal and any other
documents specified in that letter by the expiration date of the Company's
offer.

      While current rules and regulations do not require us to obtain our
stockholders' approval of the option exchange program, our board of directors,
which includes representatives from our largest stockholder, has approved the
program.

      If you have any questions about the offer, please contact Garry D. Kline
at (602) 437-9620 or by e-mail to gkline@radynecomstream.com.

      We thank you for your continued efforts on behalf of Radyne ComStream.

                                             Sincerely,


                                             Robert C. Fitting
                                             Chief Executive Officer

Enclosures