ADSX 8 K >
APPLIED DIGITAL SOLUTIONS INC (ADSX)
form 8-K
ITEM 5. OTHER EVENTS
Company Receives a Notice of Default from IBM Credit LLC.
ON MARCH 3, 2003, IBM CREDIT LLC, FORMERLY IBM CREDIT CORPORATION ("IBM
CREDIT"), NOTIFIED APPLIED DIGITAL SOLUTIONS, INC. (THE "COMPANY") THAT THE
COMPANY HAD UNTIL MARCH 6, 2003, TO PAY IBM CREDIT $29.8 MILLION OF THE
$77.2 MILLION OUTSTANDING PRINCIPAL BALANCE CURRENTLY OWED TO THEM, PLUS
$16.4 MILLION OF ACCRUED INTEREST AND EXPENSES (TOTALING APPROXIMATELY $46.2
MILLION). THE COMPANY DID NOT MAKE THE PAYMENT ON MARCH 6, 2003, AS
REQUIRED. THE COMPANY FILED A CURRENT REPORT ON FORM 8-K WITH RESPECT TO
THESE EVENTS EARLIER TODAY. ON MARCH 7, 2003, IBM CREDIT NOTIFIED THE
COMPANY AND THE OTHER LOAN PARTIES THAT AN EVENT OF DEFAULT HAD OCCURRED AND
IS CONTINUING UNDER THE THIRD AMENDED AND RESTATED TERM CREDIT AGREEMENT
("THE IBM CREDIT AGREEMENT") AMONG THE COMPANY, THE DIGITAL ANGEL SHARE
TRUST AND IBM CREDIT. IBM CREDIT ALSO NOTIFIED THE COMPANY THAT IT WILL
IMMEDIATELY COMMENCE EXERCISING ANY AND/OR ALL OF IS RIGHTS AND REMEDIES. IF
IBM CREDIT WERE TO TAKE SUCH ACTION, THERE WOULD BE DOUBT THAT THE COMPANY
WOULD BE ABLE TO CONTINUE OPERATIONS IN THE NORMAL COURSE OF BUSINESS.
IN CONNECTION WITH THESE EVENTS, AND AS REPORTED ON THE COMPANY'S CURRENT
REPORT ON FORM 8-K FILED EARLIER TODAY, THE COMPANY HAS INSTITUTED LITIGATION
AGAINST IBM CREDIT AND IBM.
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