ADSX - - Applied Digital Solutions Quick Quote:
ADSX(no quote)
Applied Digital Solutions Agrees to Forbearance Agreement with IBM Credit, LLC, the Company's Senior Secured Lender 3/27/03
PALM BEACH, Fla., Mar 27, 2003 (BUSINESS WIRE) --
Applied Digital Solutions, Inc. (Nasdaq:ADSX), an advanced technology development company, announced today that it has agreed to the terms of a forbearance agreement with IBM Credit LLC, the Company's senior secured lender, granting Applied Digital more favorable loan repayment terms and more time in which to meet its current obligations to IBM Credit. The specific terms of the agreement have been attached as an exhibit to the Company's form 8-K to be filed today.
In summary, the terms of the agreement include, but are not limited to, the following:
-- The forbearance by IBM Credit of the current outstanding obligation (of approximately $95 million) owed by Applied Digital, subject to continued compliance with the covenants in the Forbearance Agreement and Credit Agreement. -- Various purchase rights of Applied Digital to buy back its existing indebtedness from IBM Credit. These rights include a one-time payment, on or before June 30, 2003, of $30 million. If this particular payment is made, Applied Digital would satisfy its full obligation to IBM Credit. -- A substantial reduction in the effective interest rate. -- The implementation of certain agreed procedures, including the engagement of an investment banker, to facilitate the valuation and potential sale of some or all of the shares of Digital Angel Corporation held beneficially by Applied Digital through the Digital Angel Share Trust. -- The imposition of additional limitations on permitted expenditures by Applied Digital. -- The dismissal of the complaint filed by Applied Digital on March 6, 2003, against IBM Credit and IBM Corporation.
The Company also announced that Richard J. Sullivan has retired from his positions as Chairman and CEO, effective March 21, 2003. Applied Digital's Board of Directors negotiated a severance agreement, reduced from the terms of Mr. Sullivan's existing employment contract, providing for a one-time payment of approximately $10.6 million in restricted stock instead of a potential $17 million obligation contained in Mr. Sullivan's employment contract.
At the request of the Board of Directors, Scott R. Silverman, who has served as Applied Digital's President since March 2002 and who led the most recent discussions with IBM Credit, will assume the titles of Chairman and CEO, effective immediately.
A graduate of the University of Pennsylvania (1985) and Villanova University School of Law (1989), Mr. Silverman, 39, began his career as an attorney specializing in commercial litigation and communications law. He has served as General Counsel and later as President of ATI Communications, Inc. In 1996, ATI Communications was acquired by Applied Digital Solutions, Inc. From 1997 to 1999, Mr. Silverman was Vice President, Business Development of Applied Digital. From 1999 to 2001, Mr. Silverman operated his own private-investment banking firm and has provided consulting, merger/acquisition, restructuring and capital market services to public and private companies. Mr. Silverman returned to Applied Digital as a consultant in mid-year 2001.
Songs I Luv
( NEWER )
( NEW )
AI
