Exhibit 10.2
IBM Letterhead
August 13, 2002
Jerome C. Artigliere
Chief Operating Officer
Applied Digital Solutions, Inc.
218 Royal Palm Way, Suite 201
Palm Beach, Florida 33480
Re: Waiver
Dear Mr. Artigliere:
This letter confirms the agreement between Applied Digital Solutions,
Inc. ("ADS") and IBM Credit Corporation ("IBM" together with ADS, the
"Parties"), with respect to the matters referenced herein.
On or about July 31, 2002, ADS requested a waiver from IBM of
certain existing defaults under the Third Amended and Restated Term Credit
Agreement entered into by the Parties on March 1, 2002. On August 13, 2002,
IBM agreed to such waiver (the "Waiver") pursuant to the terms and
conditions set forth in the attached e-mail communication between Jerome C.
Artigliere and Bruce Gordon dated August 13, 2002 (the "E-mail").
Due to the unavailability of IBM's attorneys, the Parties agree that
they will document the Waiver in a formal writing between the Parties by no
later than Wednesday, August 21, 2002, incorporating substantially the same
terms and conditions as are set forth in the E-mail.
The signature below signifies IBM's agreement to the above. Please sign
in the space provided below to indicate ADS's acceptance.
Very Truly Yours,
/s/[B. Flanagan]
The above letter agreement is accepted and agreed to by ADS this 13 day of
August, 2002.
Applied Digital Solutions, Inc.
By: /s/Jerome C. Artigliere
------------------------
Name: Jerome C. Artigliere
Title: Senior Vice President, Chief Operating Officer
- -Original Message-----
From: Bruce B Gordon [mailto:gordonbr@us.ibm.com]
Sent: Tuesday, August 13, 2002 10:36 AM
To: jartigliere@adsx.com
Cc: Steven Flanagan; Samuel M Koda; jkkane@JonesDay.com;
tjordak@JonesDay.com; jjsalerno@JonesDay.com; gracesinn@JonesDay.com
Subject: Waiver conditions
Jerry,
As we discussed earlier this morning, IBM Credit Corporation (ICC) is
agreeable to waiving the existing defaults under your Term Loan & Revolving
Credit Agreement and permitting you to retain $3,383.8K of the proceeds of
the reformed C&H Pier note and the loan due from SysComm with ICC receiving
$1,383.8K. In return we will expect another warrant for 2,894,714 Applied
Digital Solution, Inc. (ADS) shares at $0.15/share and a new warrant for
Verichip Corp. shares equal to 5% of the fully diluted shares of Verichip
Corp. at $0.05/share both in the same form as the present ADS warrant.
Given the vacations of Jim Salerno and Grace Sinn at Jones, Day and of Sam
Koda from ICC, we will put this in formal, signed form next week.
Regards,
Bruce B. Gordon
Program Manager, Special Handling
IBM Credit Corporation
North Castle Drive, Armonk NY 10504
Mail Stop NC317, Office 3D-62C
914-765-6232, T/L 251, fax 928-832-2018
gordonbr@us.ibm.com
Illegitimi non carborundum
Carpe diem, Quam minimum credula postero.
xxi