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Exhibit 10.2    
    


[Applied
Digital Solutions, Inc. letterhead] 


August 15,
2003 


Via Facsimile and Overnight Courier Service


Midsummer
Investment, Ltd.

c/o Midsummer Capital, LLC

485 Madison Avenue, 23rd Floor

New York, New York 10022

Attn: Scott Kaufman 


Feldman
Weinstein LLP

420 Lexington Avenue

New York, New York 10170

Attn: Joseph Smith 



	 	 	Re:	Waiver pursuant to Section 6(c) of the Registration Rights Agreement among Applied Digital Solutions, Inc., a Missouri corporation ("ADSX" or, the "Company") and the purchasers identified on the signature pages thereto (the "Purchasers")(the "Waiver")





Gentlemen:



        As
previously discussed with Joseph Smith, Esq., on August 14, 2003, the Company acquired additional shares of common stock of its majority-owned subsidiary Digital Angel
Corporation ("DOC") in a strategic investment in consideration for shares of ADSX common stock. The significant terms of the transaction, include the
following: 



          (i)  ADSX
purchased 3,000,000 newly-issued shares of DOC common stock, at $2.64 per share in consideration for newly-issued shares of ADSX common stock  ("ADSX Shares") in an aggregate amount equal to the purchase
price of $7,920,000; 


         (ii)  The
closing price per share of the ADSX Shares will equal the average of the ADSX VWAP for the ten trading days prior to the closing date, subject to a floor price of
$.40; 


        (iii)  DOC
granted a five-year Warrant to ADSX, exercisable for a number of shares of DOC common stock (ranging from 500,000 to 1,000,000), such exercise period
commencing February 1, 2004, with a fixed exercise price equal to the average of the DOC VWAP for a 10-day trading period commencing January 2, 2004; 



        (iv)  Subject
to timely receipt of the Waiver, DOC will grant a five-year Warrant to the Purchasers, exercisable for an aggregate of 500,000 shares of DOC common
stock (divided among them pro rata in accordance with their purchase amount of the Purchase Agreement), such exercise period commencing February 1, 2004, with a fixed exercise price of $2.64,
and with registration rights on the underlying shares using its best efforts to have any such registration statement effective prior to February 1, 2004; and 


         (v)  Subject
to timely receipt of the Waiver, ADSX will file a registration statement with the Securities and Exchange Commission (the
"Commission") covering the resale of the ADSX Shares, such filing to occur within 60 calendar days following execution of the stock purchase agreement. 




        In
exchange for the consideration set forth above and in the Letter Agreement of even date herewith, this Waiver shall confirm your waiver of the Section 6(c) provision entitled
"No Piggyback on Registrations" in the Registration Rights Agreement; provided however, the Company agrees not to file any other registration statement
on Form S-I or S-3 prior to the filing (with the Commission) of the initial Registration Statement required by the Registration Rights Agreement, with the understanding
that this paragraph shall not prohibit the Company from filing amendments to registration statements already filed. 






        The Waiver and Letter Agreement each must be received by the Company fully executed by no later than 5:00 p.m. on August 26, 2003, and if not
received by such date the offer and all provisions under the Waiver and the Letter Agreement shall be null and void.


        We
look forward to, hearing from you as soon as possible. 



	 	 	Very truly yours,
	

 	
 	
Applied Digital Solutions, Inc.
	

 	
 	

By:	

/s/  SCOTT SILVERMAN      

	 	 	 	Name:	 	Scott Silverman
	 	 	 	Title:	 	Chief Executive Officer
	cc: Harvey Goldman, Esq.	 	 	 	 	 







[Waiver
Letter Signatures] 



	Agreed and accepted:	 	 
	
 ELLIOTT ASSOCIATES L.P.
 By: Elliott Capital Advisors, L.P., as general partner

By: Braxton Associates, Inc., as general partner	
 	

 
	

By:	

/s/  ELLIOT GREENBERG      
	
 	

 
	 	Elliot Greenberg, Vice-President	 	 
	
ELLIOTT INTERNATIONAL, L.P.
 By: Elliott International Capital Advisors Inc.,

as Attorney-In-Fact	
 	

 
	

By:	

/s/  ELLIOT GREENBERG      
	
 	

 
	 	Elliot Greenberg, Vice-President	 	 
	
MIDSUMMER INVESTMENT, LTD.	
 	

 
	

By:	

/s/  SCOTT KAUFMAN      
	
 	

 
	 	Scott Kaufman, Authorized Signatory	 	 
	
OMICRON MASTER TRUST

By: Omicron Capital L.P. as advisor

By: Omicron Capital Inc., its general partner	
 	

 
	

By:	

/s/  BRUCE BERNSTEIN      
	
 	

 
	 	Bruce Bernstein, President	 	 
	
ISLANDIA, L.P.	
 	

 
	

By:	

/s/  EDGAR BERNER      
	
 	

 
	Name:	Edgar Berner	 	 
	Title:	Vice President of John Lang, Inc., General Partner	 	 
	
PORTSIDE GROWTH AND OPPORTUNITY FUND	
 	

 
	

By:	

/s/  MARLAN OGILVIE      
	
 	

 
	Name:	Marlan Ogilvie	 	 
	Title:	General Counsel	 	 











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Exhibit 10.2