EXHIBIT 99(c)(2)
Dynatech Corporation
3 New England Executive Park
Burlington, Massachusetts 01803
PRIVILEGED AND CONFIDENTIAL
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August 13, 1999
VIA FACSIMILE
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Xx. Xxxxxx X. Xxxxxxxxxx
President and Chief Executive Officer
Applied Digital Access, Inc.
0000 Xxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Dear Xxx:
This letter is to confirm our mutual understanding with respect to
the ongoing negotiations between Dynatech Corporation ("Dynatech") and Applied
Digital Access, Inc. ("ADA") concerning the possibility of a business
relationship between the companies, pursuant to the Short Form Confidentiality
Agreement (the "Confidentiality Agreement"), between Dynatech and ADA, dated
effective April 13, 1999.
As you are aware Dynatech initially considered a purchase price of
approximately $70 million for the stock of ADA. As a result of discussions with
XXX's management and further consideration of the value of ADA, Xxxxxxxx has
suggested a non-binding purchase price of approximately $80 million (assuming
cash on hand of at least $14.2 million) for all of the outstanding stock and the
cancellation of all options of ADA, subject to the satisfactory completion of
Dynatech's due diligence efforts, approval by the Dynatech Board of Directors
and approval of a merger agreement and recommendation of the offer to the
stockholders of ADA by the Board of Directors of ADA.
I would like to sum up some of the other points we have touched upon
during our discussions. We anticipate a break up fee of no greater than 4%.
Although due diligence findings could alter our thinking, the discussions I had
with Xxx Xxxxxxx regarding the ongoing staffing remains our current plan. We
will keep you up to date on a frequent basis.
As you know, we consider stock options and other incentive programs
for key personnel to be very important. Xxxx looks forward to discussing those
programs with you in more detail during our visit next week.
By receipt of this letter and execution below, XXX hereby agrees to
treat the contents of this letter in the same manner as Dynatech is obligated to
treat confidential information of ADA pursuant to the Confidentiality Agreement.
We look forward to the speedy completion of our due diligence efforts
and the negotiation of a definitive agreement.
Should you have questions, concerning this matter, please do not
hesitate to contact me at (000) 000-0000.
Very truly yours,
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Vice President
Accepted and Agreed:
Applied Digital Access, Inc.
By:
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Name:
Title:
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