Exhibit 10.10
LAURUS MASTER FUND, LTD.
c/o Laurus Capital Management, LLC
335 Madison Avenue, 10th Floor
New York, New York 10017
February 29, 2008
Applied Digital Solutions, Inc.
1690 South Congress Avenue, Suite 200
Delray Beach, FL 33445
Attention: President
Re: Amendment of $13,500,000 Note
Ladies and Gentlemen:
Reference is made to (a) the Securities Purchase Agreement dated as of
August 24, 2006 by and between Applied Digital Solutions, Inc. (the “Company”)
and Laurus Master Fund, Ltd. (“Laurus”) (as amended, restated, modified and/or
supplemented from time to time, the “2006 SPA”); (b) the Secured Term Note dated
as of August 24, 2006 issued by the Company in favor of Laurus in the original
principal amount of $13,500,000 (as amended, restated, modified and/or
supplemented from time to time, the “2006 Note”); and (c) the Related Agreements
(as defined in the 2006 SPA and all agreements, documents and instruments
executed in connection with the 2006 SPA and the 2006 Note (all as amended,
modified, restated and/or supplemented from time to time, and collectively with
the 2006 SPA and the 2006 Note, the “Transaction Documents”).
Reference is further made to the fact that pursuant to one or more instruments
of assignment, Laurus assigned a portion of its interest in the Transaction
Documents to Valens U.S. SPV I, LLC, Valens Offshore SPV I, Ltd. and PSource
Structured Debt Limited (each a “Laurus Assignee” and collectively the “Laurus
Assignees”).
The Company has requested that Laurus and the Laurus Assignees agree to a
modification of the payment terms under the 2006 Note and Laurus and the Laurus
Assignees have agreed to do so on the terms set forth herein, on the condition
that the Company enter into this letter agreement and make a prepayment of the
2006 Note in the amount of $1,866,376.
In consideration of the foregoing and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company hereby
agrees to, and acknowledges, the following:
1. Subject to receipt by Laurus and the Laurus Assignees of the aggregate sum of
$1,866,736 in prepayment of the 2006 Note (to be applied first against all
accrued but unpaid interest owing thereon and then to the principal balance
thereunder), the 2006 Note is amended by deleting Section 1.3 thereof in its in
entirety and replacing such Section with the following:
“(a) Principal Payments. Amortizing payments of the Principal Amount shall be
made by the Company on October 1, 2008 and on the first business day of each
succeeding month thereafter through and including the Maturity Date (each, an
“Amortization Date”).

 

 

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On the first Amortization Date, the Company shall make a payment to the Holder
of the outstanding Principal Amount of $21,884.34, and on each Amortization Date
thereafter, the Company shall make payments in the amount of $273,532. All
payments of the Principal Amount shall be accompanied by accrued and unpaid
interest on such portion of the Principal Amount plus any and all other unpaid
amounts which are then owing under this Note, the Purchase Agreement and/or any
other Related Agreement (collectively, the “Monthly Amount”). Any outstanding
Principal Amount together with any accrued and unpaid interest and any and all
other unpaid amounts which are then owing by the Company to the Holder under
this Note, the Purchase Agreement and/or any other Related Agreement shall be
due and payable on the Maturity Date.”
2. From and after the execution and delivery hereof by the parties hereto, this
letter shall constitute a Related Agreement for all purposes of the Transaction
Documents.
Except as specifically set forth herein, the Transaction Documents shall remain
in full force and effect, and are hereby ratified and confirmed. The execution,
delivery and effectiveness of this letter agreement shall not operate as a
waiver of any right, power or remedy of Laurus and the Laurus Assignees, nor
constitute a waiver of any provision of any of the Transaction Documents, except
to the extent expressly provided for herein. This letter agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns and shall be governed by and construed in accordance with
the laws of the State of New York.

 

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This letter agreement may be executed by the parties hereto in one or more
counterparts, each of which shall be deemed an original and all of which when
taken together shall constitute one and the same agreement. Any signature
delivered by a party by facsimile or electronic transmission shall be deemed to
be an original signature hereto.

                      Very truly yours,
 
                    LAURUS MASTER FUND, LTD.
 
           
 
      By:   LAURUS CAPITAL MANAGEMENT, LLC, its investment manager
 
           
 
      By:   /s/ Scott Bluestein
 
           
 
          Name: Scott Bluestein
 
          Title: Authorized Signatory
 
                    VALENS U.S. SPV I, LLC
 
           
 
      By:   VALENS CAPITAL MANAGEMENT, LLC, its investment manager
 
           
 
      By:   /s/ Scott Bluestein
 
           
 
          Name: Scott Bluestein
 
          Title: Authorized Signatory
 
                    VALENS OFFSHORE SPV I, LTD.
 
           
 
      By:   VALENS CAPITAL MANAGEMENT, LLC, its investment manager
 
           
 
      By:   /s/ Scott Bluestein
 
           
 
          Name: Scott Bluestein
 
          Title: Authorized Signatory

 

 

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                      PSOURCE STRUCTURED DEBT LIMITED
 
           
 
      By:   LAURUS CAPITAL MANAGEMENT, LLC, its investment manager
 
           
 
      By:   /s/ Scott Bluestein
 
           
 
          Name: Scott Bluestein
Title: Authorized Signatory
 
            ACKNOWLEDGED AND AGREED:        
 
            APPLIED DIGITAL SOLUTIONS, INC.        
 
           
By:
  /s/ Patricia Petersen        
 
           
 
  Name: Patricia Petersen        
 
  Title: Asst. Secretary