Document:

Digirad Corporation 8-K

 

Exhibit
                                        10.3

 

PUT OPTION STOCK PURCHASE AGREEMENT

 

This Put Option Stock Purchase Agreement (this “Agreement”), is dated as of September 10, 2019, and is entered into by and between Jeffrey Eberwein (“Buyer”) and Digirad Corporation, a Delaware corporation (“Seller”).

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual obligations set forth in this Agreement, the parties hereto agree as follows:

 

1.           Purchase and Sale of the Shares.  Subject to the satisfaction or waiver of the conditions set forth in Sections 4 and 5 of this Agreement, upon three business days’ written notice (the “Notice”) by Seller to Buyer, given at any time during the 365 days following the Merger (as defined below), Seller shall sell and Buyer shall purchase in one or more Closings (as hereinafter defined) up to an aggregate of 100,000 shares of 10.0% Series A Cumulative Perpetual Preferred Stock, par value $0.0001 per share (the “Shares”), of Seller for a purchase price (the “Purchase Price”) payable by wire transfer to Seller of immediately available funds equal to $10.00 per Share. The exact number of Shares to be purchased by Buyer at each Closing shall be stated in the applicable Notice and shall be determined by Seller in its sole discretion (up to an aggregate of 100,000 Shares).

 

2.           Representations and Warranties of Seller.  Seller represents and warrants to Buyer as follows as of the date of this Agreement and as of each Closing Date:

 

(a)            Good Standing.  Seller is a corporation, duly organized, validly existing, and in good standing under the laws of the state of Delaware.

 

(b)           Due and Valid Issuance.  At each Closing, the Shares will be duly authorized and, when issued, delivered and paid for in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable.

 

(c)            Authority and Consent.  Seller has all requisite power, legal capacity, and authority to enter into and perform Seller’s obligations under this Agreement, and no approval or consent of, or filing or registration with, any court, governmental or regulatory agency or authority or other third party is necessary or required to consummate the transactions contemplated hereby, other than required filings with the Securities and Exchange Commission (“SEC”). All action on the part of Seller necessary for the execution and delivery of this Agreement, and the performance and consummation of the transactions contemplated hereby, has been taken.  Upon execution and delivery by Seller, this Agreement will constitute a valid and binding obligation of Seller enforceable against Seller in accordance with its terms.

  

(d)          No Violation or Breach.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (i) will be in compliance with all applicable agreements to which Seller is a party and that govern the rights and obligations of the Shares, and (ii) will not violate or result in the breach by Seller of, or constitute a default under, or conflict with, or cause any acceleration of any obligation with respect to any provision or restriction of any material loan, mortgage, lien, agreement, contract, instrument, order, judgment, award, decree, or any other restriction of any kind or character to which any material assets or properties of Seller is subject or by which Seller is bound. 

 

     

     

    
 

(e)        No Litigation.  There is no litigation or governmental or administrative proceeding or investigation pending with respect to the Shares or, to the actual knowledge of Seller after reasonable inquiry or investigation, threatened against Seller with respect to the Shares, nor, to the knowledge of Seller, has there occurred any event or does there exist any condition on the basis of which any such claim may be asserted.

 

(f)        No General Solicitation or Advertising.  At no time has Seller presented Buyer or any other party with or solicited Buyer or any other party through any article, notice, or other communication published in any newspaper or other leaflet, public promotional meeting, television, radio or other broadcast or transmittal advertisement, or any other form of general solicitation or advertising.

 

(g)           Full Disclosure.  No Form 10-K, Form 10-Q, Form 8-K or Registration Statement No. 333-232738 and any prospectus supplement thereto (the “Registration Statement”) filed by Seller with the SEC contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein not misleading unless corrected in a later filing prior to the date hereof. 

 

(h)          Brokers.  No broker, finder, or investment banker is entitled to any brokerage, finder’s, or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller.

 

3.           Representations and Warranties of Buyer.  Buyer hereby represents and warrants to Seller as follows as of the date of this Agreement and as of each Closing Date:

 

(a)           Good Standing.  If Buyer is not a natural person, Buyer is a corporation, partnership or other entity duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization.

 

(b)           Authority and Consent.  Buyer has the right, power, legal capacity, and authority to enter into and perform Buyer’s obligations under this Agreement, and no approval or consent of any governmental or regulatory authority or other person is necessary in connection herewith.  All action on the part of Buyer necessary for the execution and delivery of this Agreement, and the performance and consummation of the transactions contemplated hereby, has been taken.  Upon execution and delivery by Buyer, this Agreement will constitute a valid and binding obligation of Buyer enforceable against buyer in accordance with its terms.

 

(c)           No Violation or Breach.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not violate or result in the breach by Buyer of, or constitute a default under, or conflict with, or cause any acceleration of any obligation with respect to any provision or restriction of any material loan, mortgage, lien, agreement, contract, instrument, order, judgment, award, decree, or any other restriction of any kind or character to which any material assets or properties of Buyer is subject or by which Buyer is bound. 

 

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(d)           Purchase Entirely for Own Account.  Buyer is acquiring the Shares for its own account only and not with a view to, or for resale in connection with, any “distribution” of the Shares within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), and Buyer has no contract, undertaking, or arrangement to sell or transfer the Shares to another person. Buyer has determined to purchase the Shares based on Buyer’s own investigation of Seller.

 

(e)           Available Information.  Buyer (i) has been furnished by Seller all information regarding Seller, the Shares and any additional information that Buyer, its representative, attorney and/or accountant deem necessary to enable it to make an informed investment decision concerning the purchase of the Shares; (ii) has been provided an opportunity for a reasonable time prior to the date hereof to obtain additional information concerning the Shares, Seller and all other information to the extent Seller possesses such information or can acquire it without unreasonable effort or expense; (iii) has been given the opportunity for a reasonable time prior to the date hereof to ask questions of, and receive answers from, Seller or its representatives concerning the terms and conditions of the Shares and other matters pertaining to an investment in the Shares, or that which was otherwise provided in order for them to evaluate the merits and risks of a purchase of the Shares to the extent Seller possesses such information or can acquire it without unreasonable effort or expense; and (iv) has determined that the Shares are a suitable investment for Buyer and that at this time Buyer has no need for liquidity in an investment in the Shares and could bear a complete loss of its investment in the Shares.

 

(f)          Absence of Representations and Warranties.  Except as set forth in Section 2, Buyer confirms that neither Seller nor anyone purportedly acting on behalf of Seller has made any representations, warranties, agreements, or statements, express or implied, respecting the Shares or the business, affairs, financial condition, plans, or prospects of Seller nor has Buyer relied on any representations, warranties, agreements, or statements in the belief that they were made on behalf of any of the foregoing nor has Buyer relied on the absence of any such representations, warranties, agreements, or statements in reaching Buyer’s decision to purchase the Shares. 

 

(g)         Shares Restricted.  Buyer understands that the Shares will be “restricted securities” within the meaning of Rule 144 under the Securities Act and that Buyer may be considered an “affiliate” of Seller as referenced in such Rule.

 

(h)           No Registration.  Buyer acknowledges that the Shares have not been registered under the Securities Act or the securities laws of any state, and the Shares cannot be resold unless the shares are registered for resale or an exemption from registration is available.  Buyer further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements, including the time and manner of sale, the holding period for the Shares, and requirements relating to the Company that are outside of such Buyer’s control, and which Seller is under no obligation and may not be able to satisfy.

 

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(i)            Legends.  Buyer acknowledges that the certificate(s) or book-entry record evidencing the Shares will bear a restrictive legend (i) stating that the Shares may not be sold, transferred, hypothecated, or otherwise distributed in the absence of an effective registration under the Securities Act and any applicable state securities laws or the receipt of an opinion of counsel that is satisfactory to the Company that such registration is not required, and (ii) as required by the securities laws of any state to the extent such laws are applicable to the shares represented by the certificate so legended. 

 

(j)            No General Solicitation or Advertising.  The offer to sell the Shares was communicated directly to Buyer by Seller or Seller’s agent.  At no time was Buyer presented with or solicited by or through any article, notice or other communication published in any newspaper or other leaflet, public promotional meeting, television, radio or other broadcast or transmittal advertisement or any other form of general solicitation or advertising.

 

(k)          Accredited Investor.  Buyer is an Accredited Investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.  Buyer (i) can bear the economic risk of the purchase of the Shares, including the complete loss of Buyer’s investment, and (ii) has sufficient knowledge and experience in business and financial matters as to be capable of evaluating the merits and risks of Buyer’s purchase of the Shares.

 

(l)            Brokers.  No broker, finder, or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transaction contemplated by this Agreement based upon arrangements made by or on behalf of Buyer.

 

4.          Conditions Precedent to Buyer’s Performance.  The obligations of Buyer under this Agreement are subject to the satisfaction or waiver, at or before each Closing, of all the conditions set out below in this Section 4. 

 

(a)           Accuracy of Seller’s Representations and Warranties.  All representations and warranties by Seller in this Agreement, or in any written statement that shall be delivered to Buyer by Seller pursuant to this Agreement, shall be true on and as of the Closing Date (as hereinafter defined) as though such representations and warranties were made on and as of that date.

 

(b)           Performance by Seller.  Seller shall have performed, satisfied, and complied with all covenants, agreements, and conditions required by this Agreement to be performed or complied with by Seller on or before the Closing Date.

 

(c)             Completion of Merger.  The merger of Digirad Acquisition Corporation with and into ATRM Holdings, Inc. (“ATRM”), with ATRM as the surviving entity (the “Merger”), shall have become completed in accordance with that certain Agreement and Plan of Merger, dated as of July 3, 2019, by and among Seller, ATRM and Digirad Acquisition Corporation. 

 

(d)             No Material Adverse Change.  There shall not have occurred a material adverse change in the condition of Seller.

 

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5.             Conditions Precedent to Seller’s Performance.  The obligations of Seller under this Agreement are subject to the satisfaction or waiver, at or before the Closing, of all the following conditions. 

 

(a)         Accuracy of Buyer’s Representations and Warranties.  All representations and warranties of Buyer contained in this Agreement or in any written statement delivered by Buyer pursuant to this Agreement shall be true on and as of the Closing Date as though such representations and warranties were made on and as of that date.

 

(b)         Performance by Buyer.  Buyer shall have performed, satisfied, and complied with all covenants, agreements, and conditions required by this Agreement to be performed or complied with by Buyer on or before the Closing Date.

 

(c)         Completion of Merger.  The Merger shall have been completed.

 

6.             Closings.  Each closing of the transactions contemplated by this Agreement (the “Closing”) shall take place via the electronic exchange of documents as specified in Section 1 above, or at such other time, place, and manner as the parties may agree to in writing.  The date of each Closing is herein called a “Closing Date”.

 

(a)         Obligations of Seller.  At the Closing, Seller shall deliver to Buyer, or cause Seller’s transfer agent to deliver to Buyer, a certificate or copy of the electronic book-entry record evidencing issuance of the Shares to Buyer.

 

(b)         Obligations of Buyer.  At the Closing, Buyer shall deliver to Seller the Purchase Price by wire transfer to an account designated by Seller. 

 

7.            Miscellaneous.

 

(a)      Further Assurances.  Each of the parties hereto shall execute and deliver any and all such other instruments, documents, and agreements and take all such actions as either party may reasonably request from time to time in order to effectuate the purposes of this Agreement.

 

(b)        Controlling Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York without application of the conflict of laws principles thereof.

 

(c)        Binding Nature of Agreement; No Assignment.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that no party may assign or transfer its rights or obligations under this Agreement without the prior consent of the other party hereto. 

 

(d)   
 Entire Agreement.  This Agreement contains the entire understanding between the parties hereto with respect
to the purchase and sale of the Shares, and supersedes all prior and contemporaneous agreements and understandings,
inducements, or conditions, express or implied, oral or written, between the parties hereto, with respect to the purchase and
sale of the Shares.  Except as otherwise expressly provided herein, this Agreement may not be modified or amended other
than by an agreement executed in writing by the parties hereto.  In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement shall
continue in full force and effect without said provision. 

 

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(e)           Notices.  All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given, made, and received when delivered against receipt, when sent by email, or one day after being sent by a nationally recognized overnight carrier, addressed as set forth below:

 

	
 

	
(i)

	
If to Buyer:

 

53 Forest Ave., 1st Floor 

Old Greenwich, CT 06870 

Attention:  Jeffrey Eberwein 

Email: je@lonestarvm.com

 

	
 

	
(ii)

	
If to Seller:

 

Digirad Corporation 

1048 Industrial Court 

Suwanee, GA 30024 

Attention:  Matthew Molchan, Chief Executive Officer 

Email:  matt.molchan@digirad.com

 

Any party may alter the address to which communications or copies are to be sent by giving notice of such change of address in conformity with the provisions of this paragraph for the giving of notice.

 

(f)          Survival of Representations and Warranties.  All representations and warranties made or undertaken by each party in this Agreement shall survive the applicable Closing Date for a period of 24 months.  The covenants and agreements of the parties hereto contained herein shall survive in accordance with their respective terms, and this Section 7(g) shall not limit any covenant or agreement of the parties that contemplates performance after the Closing.

 

(g)         Counterparts.  This Agreement may be executed in any number of counterparts, which shall, collectively, constitute one agreement, and may be executed by email pdf transmission of an executed counterpart of or signature page to this Agreement and any email pdf or photocopy of an executed counterpart of or signature page to this Agreement shall be given the same effect as the original.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, Seller and Buyer have executed and delivered this Agreement as of the day and year first above written.

	
 

	
 

	
 

	
 

	
BUYER:

	
 

	
 

	
 

	
 

	
 

	
/s/ Jeffrey Eberwein

	
 

	
 

	
Jeffrey Eberwein

	
 

	
 

	
 

	
 

	
 

	
 

	
SELLER:

	
 

	
 

	
 

	
 

	
 

	
DIGIRAD CORPORATION

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ Matthew Molchan

	
 

	
 

	
Name: Matthew Molchan

	
 

	
 

	
Title: Chief Executive Officer

	
 

 

[Signature Page to Digirad Corporation Put Option Stock Purchase Agreement]Digirad Corporation 8-K

 

Exhibit 10.4

 

CONSENT AND ACKNOWLEDGMENT AGREEMENT

AND TWELFTH AMENDMENT TO LOAN AGREEMENT

 

THIS CONSENT
AND ACKNOWLEDGMENT AGREEMENT AND TWELFTH AMENDMENT TO LOAN AGREEMENT (this “Agreement”)
is entered into as of this 10th day of September, 2019(the “Effective Date”), by and among Gerber
Finance Inc. (“Lender”), KBS Builders, Inc. (the “Borrower”), ATRM
Holdings, Inc., (“Existing Guarantor”), and Digirad Corporation, a
Delaware Corporation (“New Guarantor” and, together with Existing Guarantor, individually or
collectively, as the context may require, “Guarantor”), having an address at 1048 Industrial Court,
Suwanee, GA 30024.

 

RECITALS

 

A.           
Lender, Borrower, and Existing Guarantor entered into a Loan and Security Agreement dated as of February 23, 2016, as amended
by (i) the First Amendment to Loan and Security Agreement dated November 30, 2016, (ii) the Second Amendment to Loan and
Security Agreement dated November 30, 2016, (iii) the Third Amendment to Loan and Security Agreement dated June 30, 2017,
(iv) the Fourth Amendment to Loan and Security Agreement dated July 19, 2017, (v) the Fifth Amendment to Loan and Security
Agreement dated September 29, 2017, (vi) the Sixth Amendment to Loan and Security Agreement dated December 22, 2017, (vii) a
series of emails between representatives of the parties sent January 12 – 14, 2018 characterized as a Seventh Agreement
of Amendment to Loan and Security Agreement), (viii) the Eight Amendment to Loan and Security Agreement dated October 1,
2018, (ix) the Ninth Amendment to Loan and Security Agreement dated February 22, 2019, (x) the Tenth Amendment to Loan and
Security Agreement dated April 1, 2019, and (xi) the Eleventh Amendment to Loan and Security Agreement dated April 15, 2019,
(such Loan and Security Agreement, as so amended and as it may be further amended, restated, supplemented or otherwise
modified from time to time, being the “Loan Agreement”). Capitalized terms used herein and not otherwise defined
shall have the respective meanings ascribed thereto in the Loan Agreement.

 

B.             The Loans are secured by, among other things, Existing Guarantor’s guaranty by its execution of the Loan Agreement as a Corporate Credit Party (“Guaranty”).

 

C.             Existing Guarantor owns, directly or indirectly, one hundred percent (100%) of the equity interests in Borrower.

 

D.   
       New Guarantor intends to acquire Existing Guarantor, and upon such acquisition the New
Guarantor will own, directly or indirectly, one hundred percent (100%) of the equity interests in Existing Guarantor (the
“Acquisition”) pursuant to the Agreement and Plan of Merger dated as of July 3, 2019 and those documents
(including but not limited to disclosure schedules attached hereto as Exhibit A and the transactions contemplated
therein.

 

E.            Pursuant to certain letter in connection with the Loan Agreement dated August 1, 2019, (“Overadvance Letter”) Lender agreed on an OverAdvance in an amount not to exceed US $500,000.00 (the “OverAdvance Amount”).

 

F.            Pursuant to Pledge and Security Agreement dated October 4, 2016, as amended (“Pledge Agreement”), Lone Star Value Investors, L.P. pledged $3,300,000 of cash collateral (“Cash Collateral”) to secure the Obligations of EdgeBuilder, Inc. and Glenbrook Building Supply, Inc. to Lender in Loan and Security Agreement dated October 4, 2016 as amended (‘EGBL Obligations”) and Obligations of Borrower, of which Cash Collateral $150,000 has been allocated to secure the Loans.

 

 

 

 

G.            Guarantor has requested that Lender consent to and discharge its security interest in a portion of the Cash Collateral in order to enable Guarantor to effectuate the Acquisition.  Lender has agreed to such discharge (“Discharge”) simultaneously upon Lender’s receipt of indefeasible payment in full of the EGBL Obligations and such expense, reserves and attorneys’ fees set forth in Lender’s payoff letter of even date (“Payoff Letter”) by a direct payment to Lender of a portion of the proceeds of the Cash Collateral from the Pledged Account defined in the Pledge Agreement.

 

H.           Upon payment in full of the EGBL Obligations, the amount of the Cash Collateral will be reduced to $300,000 which the parties have agreed will remain as Collateral for the Loans.

 

I.             As of the effective date hereof, Existing Guarantor has on deposit $200,000 in the Collateral Account maintained with Lender to secure the Loans.

 

J.             Upon consummation of the Acquisition, New Guarantor will directly and/or indirectly collectively own 100% of the equity interests in Borrower, and New Guarantor has represented that it will derive substantial benefit from the Requested Actions.

 

K. 
         The Note,the Guaranty, the Subordination Agreement, the Loan Agreement, and all other
Credit Documents and Ancillary Loan Documents executed by Borrower and Existing Guarantor, Credit Parties and Ancillary
Credit Parties and/or others in connection with the Loans in effect and as amended prior to the date hereof are hereafter
collectively referred to as the “Original Loan Documents.” The Original Loan Documents, as further amended by
this Agreement, and any and all other documents executed in connection with this Agreement, all as same may be further
modified, amended, restated,consolidated, renewed, or replaced are hereafter collectively referred to as the “Loan
Documents.”

 

NOW, THEREFORE, in
consideration of the covenants and agreements set forth herein, in consideration of the Recitals above which are incorporated
into and made a part of this Agreement and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

 

1.   
         Consent to the Requested Actions. Subject to each of the terms and
conditions set forth herein, Lender hereby consents to the Requested Actions and acknowledges and agrees that the Acquisition
shall not constitute an Event of Default under the Loan Agreement. Furthermore, the parties hereto agree that Lender’s
consent to the Requested Actions is a onetime consent restricted to the Requested Actions and Acquisition, and such consent
shall not otherwise constitute a consent, waiver or modification of any right, remedy or power of Lender under any of the
Loan Documents except as provided herein.

 

2.             Representations and Warranties.

 

(a)         Borrower Organizational Documents.
Borrower represents and warrants to Lender that as of the Effective Date, the certificate of formation, the articles of
organization, and any other organizational documents of Borrower delivered to Lender in connection with the making of the
Loans have not been amended, modified or revoked since the Loan Agreement closing date, other than any such amendment or
modification that was effectuated in accordance with the Loan Documents. Pursuant to the Acquisition, the articles of
incorporation and bylaws of Existing Guarantor shall be replaced as set forth in Exhibit A upon the consummation of
the Acquisition, and Lender hereby consents to such actions and acknowledges and agrees that such actions shall not
constitute an Event of Default under the Loan Agreement.

 

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(b)         Execution,
Delivery, Authority, No Violations.  Borrower  and
 each Guarantor represents and warrants to Lender that as of the Effective Date: (i) it is or will be duly formed,
validly existing and in good standing as a limited liability company,  limited partnership, or corporation, as
applicable, under the laws of the state of its formation, with full power and authority to own its assets and conduct its
business, and is duly qualified in all jurisdictions in which the ownership or leasing of its property or the conduct of its
business requires such qualification, except where the failure to be so qualified would not result in a material adverse
effect on the Borrower and Guarantor, (ii) this Agreement and the other documents executed  in connection with the
Requested Actions by such entity have been duly executed and delivered and constitute the legal, valid and binding
obligations of such entity, enforceable against such entity in accordance with their terms; (iii) the execution and delivery
of this Agreement and the other documents executed in connection herewith by such entity, and the performance of its
respective obligations hereunder and thereunder, and the consummation of the Requested Actions contemplated hereunder, (A)
have been duly authorized by all requisite organizational action on the part of such entity and will not violate any
provision of any applicable legal requirements, decree, order, injunction or demand of any court or other governmental
authority applicable to such entity or any organizational document of such entity and (B) do not require any consent,
approval, authorization or order of any court, governmental authority or any other Person, other than for those which have
already been obtained by such entity prior to the Effective Date; and (iv) except to the extent modified by this Agreement or
as may have been previously modified by written agreement executed by Borrower and Lender or any predecessor of Lender, the
terms of the Original Loan Documents remain unmodified and the respective obligations of Borrower and Guarantor under the
Loan Documents remain in full force and effect in accordance with the terms and provisions thereof.

 

(c)   
     Consents. Borrower and each Guarantor represents
and warrants to Lender that as of the Effective Date, no consent,approval or authorization to the Requested Actions or the
execution and delivery of this Agreement and the other documents executed in connection herewith by such entity, and the
performance of its respective obligations hereunder and thereunder, and the consummation of the Requested Actions
contemplated hereunder is required pursuant to any material agreement of Borrower.

 

(d)        Transfer
of Interests. Except for the Requested Actions, Borrower has not pledged, sold, conveyed or
otherwise encumbered or transferred except as may be expressly permitted in Loan Documents, and will not pledge, sell, convey
or otherwise encumber or transfer all or any part of the direct or indirect interests in Borrower or its property, without
first having obtained or without obtaining the prior written consent of Lender except as expressly permitted in Loan
Documents.

 

(e)         Legal Proceedings.
There are no pending or, to Borrower’s knowledge, threatened suits, judgments, arbitration proceedings, administrative
claims, executions or other legal or equitable actions or proceedings against Borrower or its property, which have not
been disclosed to Lender in writing and which, if adversely determined, would materially impair Borrower’s ability to
perform its covenants or obligations hereunder or under the Loan Documents.

 

(f)         Original
Loan Document Representations and Warranties.  Borrower represents and warrants to Lender that the
representations and warranties made by Borrower and set forth in the Loan Agreement or in any of the other Loan Documents are
true and correct in all material respects as if made by Borrower on and as of the Effective Date, except as to matters that
relate to a specific date or time or that are expected by their nature to change or become inapplicable with the passage of
time.

 

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(g)         Financial
Statements. Borrower and each Guarantor represents and warrants to Lender that the financial statements of
Borrower and of each Guarantor, and any of their respective affiliates most recently delivered to Lender on or prior to the
date hereof:

 

(i) are true,
correct and complete, in all material respects; (ii) accurately present the financial condition of such entities as of the
date of such statements; and (iii) have been prepared in accordance with generally accepted accounting
principles consistently applied or other accounting standards expressly approved by Lender in writing, except,in the case of
financial statements other than annual audited financial statements, for the absence of footnotes and normal year-end
adjustments. Borrower and each Guarantor further represent and warrant to Lender that, since the date of such financial
statements, there has been no material adverse change in the financial condition of Borrower, of any Guarantor, or any of
their affiliates or Subsidiaries.

 

(h)        Information. Borrower and each Guarantor represents and warrants to Lender that no information provided by or on behalf of Borrower or any Guarantor to Lender in connection with the Requested Actions, or the amendments herein, contains any untrue statement of a material fact or omits to state any material fact necessary to make such information not misleading in any material respect.

 

(i)        
No Defaults. Borrower and each Guarantor represent and warrant to Lender that, as of the Effective Date, no Event of Default
has occurred and remains uncured under any of the Original Loan Documents.

 

(j)        
Organizational Chart. Borrower and each Guarantor represents and warrants to Lender that (i) the organizational chart attached
hereto as Schedule 1 relating to Borrower, Existing Guarantor, and the other named persons and/or entities therein is true,
correct and complete immediately prior to the consummation of the Requested Actions, and (ii) the organizational chart attached
hereto as Schedule 2 relating to Borrower, Guarantor and the other named persons and/or entities therein is true, correct
and complete upon consummation of the Requested Actions.

 

(k)         Requested Actions Documents. Borrower represents and warrants that it has delivered to Lender all material documents executed and/or delivered by Borrower, Existing Guarantor or New Guarantor in connection with the Requested Actions.

 

(l)         No Material Adverse Effect. Borrower and each Guarantor represents and warrants to Lender that the consummation of the Requested Actions will not, (i) adversely affect the Loan Documents, or (ii) deprive Lender of any direct or indirect benefits of, or rights under, any of the Loan Documents except as expressly agreed to by Lender in writing.

 

(m)        Financial Certification. None of Borrower, any Guarantor, or of any managing member, general partner or controlling stockholder of Borrower or of any Guarantor is currently a debtor in any bankruptcy, reorganization, insolvency or similar proceeding. None of Borrower or any Guarantor is presently insolvent, and the proposed Requested Actions will not render Borrower or any Guarantor insolvent.

 

3.             Simultaneous Proceedings. The following are simultaneous proceedings that are consideration for the Requested Actions.  All of such proceedings must occur simultaneously for this Agreement to be effective:

 

(a)         Indefeasible payment in full to Lender of the EGBL Obligations and all amounts set forth in the Payoff Letter by a direct payment of the proceeds of the Cash Collateral from the Pledged Account defined in the Pledge Agreement;

 

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(b)        Receipt by Lender of a signed counterpart to the Payoff Letter from all parties thereto;

 

(c)         Lender’s receipt of all of the Costs and Expenses set forth in Section 11 below in accordance with the Payoff Letter;

 

(d)       Lender’s receipt of reasonably satisfactory written evidence from Borrower that on the Effective Date all insurance coverage required under the Loan Agreement continues to be in full force and effect notwithstanding the consummation of the Requested Actions;

 

(e)         Lender’s receipt of satisfactory evidence that, New Guarantor shall be the sole owner of Existing Guarantor;

 

(f)         receipt by Lender of a consent to this Agreement executed by Borrower, each Guarantor, each Credit Party and each Ancillary Credit Party;

 

(g)            No Event of Default shall have occurred and be continuing; and

 

(h)           Borrower and each Guarantor shall deliver or cause to be delivered to Lender an officer’s certificate and a guarantor’s certificate in forms reasonably acceptable to Lender certifying to Lender that all of the foregoing conditions precedent have been satisfied, which certificate shall include certificates of good standing for Borrower and each Guarantor and all parties signing on behalf of such entities for its respective state of organization dated no more than 30 days prior to the Effective Date.

 

4.     
    Breach of this Agreement. If (i) any representation or warranty in this Agreement shall have been false or
misleading in any material respect when made and such inaccuracy is not cured within 30 days (except for any intentional misrepresentation
which shall not be subject to any cure period), or (ii) there shall be a default by Borrower or by any Guarantor of a covenant
in this Agreement, at Lender’s option in its reasonable discretion, an Event of Default shall exist.

 

5.     
    Amendments to Loan Documents. Borrower, each Guarantor, each Credit Party each Ancillary Credit Party and
Lender agree (or to the extent they are not a party thereto, acknowledge) that the Loan Documents are hereby amended as of the
Effective Date as follows:

 

(a)            The definition of “Cash Collateral”, “Credit Parties”, “Guarantor” and “Pledge and Security Agreement” as set forth in Section 1.1 of the Loan Agreement are hereby deleted in its entirety and the following is inserted in its place:

 

“Cash Collateral” means that money in the amount of not less than $300,000 deposited by Lone Star Value Investors, LP into a deposit account located at MUFG UNION BANK, N.A. pledged as Collateral to Lender pursuant to the Pledge and Security Agreement and perfected in favor of Lender by the Securities Account Control Agreement.

 

“Credit Parties” means each Borrower and each other Person (other than the Lender) that is or may become a party to this Agreement or any other Credit Document, including but not limited to ATRM Holdings, Inc. and Digirad Corporation.

 

5

 

 

“Guarantor” shall mean jointly and severally ATRM Holdings, Inc. and Digirad Corporation and any other entity or person guaranteeing any payment or performance obligation of Borrower which executes a guaranty or a support, put or other similar agreement in favor of Lender in connection with the transactions contemplated by this Agreement.

 

“Pledge and Security Agreement” means the pledge and security agreement dated October 4, 2016 executed by Lender and Lone Star Value Investors, LP, as amended, by which money in U.S. Dollars in the amount of not less than $300,000 in a deposit account at MUFG Union Bank, N.A. pursuant to which Lender has a first and only perfected security interest.”

 

(b)   
      The second paragraph of the Overadvance Letter is hereby amended to read as follows:

 

“I am writing to confirm that subject to the terms and conditions of the Loan Agreement Lender agrees to make Revolving Credit Advances in excess of the Borrowing Base in an amount not to exceed $500,000 (the “Overadvance”). The Overadvance expires and shall be repaid in full to Lender on or prior to October 1, 2019.  Should such payment not occur on or prior to October 1, 2019, the Overadvance will be repaid at the rate of $38,461.54 per week commencing Friday, October 4, 2019 and each succeeding Friday thereafter through and including December 27th, 2019.  Borrower agrees to provide weekly Borrowing Base Certificates on each repayment date confirming the required reduction of the Overadvance.”

 

(c)         The “Description of Collateral” in the Pledge Agreement is hereby amended to provide that the amount of proceeds is reduced to $300,000.

 

6.   
         Borrower Confirmation of Loan Documents.  Neither the consummation of the
Requested Actions nor anything contained herein shall limit, impair, terminate or revoke the obligations of the parties under
the Loan Documents, and such obligations shall continue in full force and effect in accordance with the respective terms and
provisions of the Loan Documents, as modified hereby. Borrower hereby ratifies and agrees to pay when due all sums due or to
become due or owing under the Loan Agreement or the other Loan Documents and the parties shall hereafter faithfully perform
all of its obligations under and be bound by all of the provisions of the Loan Documents, as modified hereby, and hereby
ratifies and reaffirms all of its obligations and liabilities under the Loan Documents, as modified hereby.

 

7.              Guaranty.

 

(a)         Confirmation
of Existing Guarantor. Neither the consummation of the Requested Actions nor anything contained herein shall
limit, impair, terminate or revoke the obligations of Existing Guarantor under the Guaranty. The Guaranty shall continue in
full force and effect in accordance with the terms and provisions of the Guaranty.  Existing Guarantor hereby ratifies
and reaffirms all of its obligations and liabilities under the Guaranty. The Guaranty constitutes the valid, legally binding
obligation of Existing Guarantor, enforceable against Existing Guarantor in accordance with its terms. By Existing
Guarantor’s execution hereof, Existing Guarantor waives and releases any and all defenses, affirmative defenses,
setoffs, claims,counterclaims and causes of action of any kind or nature which Existing Guarantor has asserted as of the
Effective Date against Lender which in any way relate to or arise out of the Guaranty or any of the other Loan Documents.

 

6

 

 

(b)        Assumption
by New Guarantor of Guaranty. On the Effective Date, New Guarantor assumes on a joint and several basis with
Existing Guarantor and agrees to be liable and responsible for and bound by all of Existing Guarantor’s obligations,
agreements and liabilities, under the Guaranty, as amended by the terms hereof, as fully and completely as if New Guarantor
had originally executed and delivered such Guaranty, as amended by the terms hereof. New Guarantor further agrees to pay,
perform and discharge each and every obligation of payment and performance of any guarantor under, pursuant to and as set
forth in the Guaranty, as amended by the terms hereof, at the time, in the manner and otherwise in all respects as therein
provided. For the avoidance of doubt, and without limitation, such assumption and agreement of New Guarantor is not limited
to obligations, agreements and liabilities arising after the date of this Agreement but relates to and includes all
obligations, agreements and liabilities of “Guarantor” under or in connection with the Guaranty, as amended by
the terms hereof, without regard to the time period with respect to which the same arose or may hereafter arise, whether
prior to, on or as of, or after the date of this Agreement. New Guarantor’s assumption of the Guaranty, as amended by
the terms hereof, on a joint and several basis with Existing Guarantor set forth herein (i) is absolute, unconditional and is
not subject to any defenses, waivers, claims or offsets arising prior to the date of this Agreement, and (ii) shall not be
affected or impaired by any agreement, condition, statement or representation of any person or entity other than any written
agreement, condition, statement or representation of Lender executed concurrently herewith or after the date hereof. Without
limiting the generality of the foregoing assumption of the Guaranty by New Guarantor on a joint and several basis with
Existing Guarantor, New Guarantor, on the Effective Date, specifically ratifies, reaffirms and confirms the obligations,
warranties and representations of “Guarantor” as set forth in the Guaranty, as amended by the terms hereof.

 

8.             Same
Indebtedness; Priority of Liens Not Affected. This Agreement and the execution of the other documents required to be
executed in connection herewith do not constitute the creation of a new debt or the extinguishment of the debt evidenced
by the Loan Documents, nor will they in any way affect or impair the liens and security interests created by the Loan
Documents except as otherwise provided with respect to the Discharge.  The parties agree that the lien and security
interests created by the Loan Documents continue to be in full force and effect, unaffected and unimpaired by this Agreement
and that said liens and security interests shall so continue in their perfection and priority until the Obligations secured
by the Loan Documents are fully discharged.  Following the Discharge, Lender agrees to execute such documents reasonably
requested to effectuate the discharge of Lender’s security interest in the Cash Collateral as provided hereby
only.

 

9.   
         Release and Covenant Not to Sue. Each of Borrower, Existing Guarantor and New
Guarantor on behalf of itself and its affiliates, heirs, successors and assigns (collectively, “Releasing
Parties”), hereby releases and forever discharges Lender, any trustee of the Loans, any servicer of the Loans, each of
their respective predecessors-in-interest and successors and assigns, together with the officers, directors, partners,
employees, investors, certificate holders and agents of each of the foregoing (collectively, the “Lender
Parties”), from all debts, accountings, bonds, warranties, representations, covenants, promises, contracts,
controversies, agreements, claims, damages, judgments, executions, actions, inactions, liabilities, demands or causes of
action of any nature, at law or in equity, known or unknown, which such Releasing Party has or had  prior to and
including the date hereof relating in any manner whatsoever to matters arising out of: (a) the Loans, including, without
limitation, its funding, administration and servicing; (b) the Loan Documents; (c) any reserve and/or escrow balances held by
Lender or any servicers of the Loans; or  (e) the Requested Actions.

 

7

 

 

10.           Indemnity.
Borrower and each Guarantor,jointly and severally, agree to reimburse, defend, indemnify and hold Lender Parties
harmless from and against any and all liabilities, claims, damages, penalties, reasonable expenditures, losses or charges
(including, but not limited to, all reasonable legal fees and court costs), which may now or in the future be undertaken,
suffered, paid, awarded, assessed or otherwise incurred as a result of or arising out of any fraudulent conduct of Borrower,
Existing Guarantor or New Guarantor in connection with this Agreement or of any breach of any of the representations or
warranties made in Section 2 in any material respect.

 

11.      
  Costs and Expenses. The following fees, costs and expenses charged or incurred by Lender as a result of the Loans
to Borrower in connection with  the Requested Actions, this Agreement and the actions contemplated hereunder shall be paid
by the terms of the Payoff Letter (except as otherwise provided herein): (i) reasonable attorney’s fees incurred by Lender’s
counsel; (ii) all out of pocket costs and expenses incurred by Lender, including but not limited to, an amendment fee of US$2,500
(collectively, the “Costs and Expenses”). To the extent that Borrower fails to satisfy any obligation under this Section
11, Guarantor shall be liable for any and all Costs and Expenses.

 

12.          Notices. With respect to all notices or other written communications hereunder, such notice or written communication shall be given in writing, and shall be deemed effective upon delivery by a recognized next-day courier service, pursuant to the Loan Agreement, as amended by this Agreement to:

 

	
Name:

	
Gerber Finance Inc.

	
Address:

	
488 Madison Avenue, Suite 800

	
 

	
New York, New York 10022

	
Attention:

	
Gerald L. Joseph

	
Telephone:

	
(212) 888-3833

	
Facsimile:

	
(212) 888-1637

	
 

	
 

	
Name:

	
KBS Builders, Inc.

	
Address:

	
300 Park Street

	
 

	
South Paris, Maine 0428

	
Attention:

	
Dan Koch

	
Telephone:

	
(651) 235-6430

	
Facsimile:

	
(651) 704-1820

	
 

	
 

	
Name:

	
ATRM Holdings, Inc.

	
Address:

	
3050 Echo Lake Avenue, Suite 300

	
 

	
Mahtomedi, Minnesota 55155

	
Attention:

	
Dan Koch

	
Telephone:

	
(651) 235-6430

	
Facsimile:

	
(651) 704-1820

 

8

 

 

	
Name:

	
Digirad Corporation

	
Address:

	
1048 Industrial Court

	
 

	
Suwanee, GA 30024

	
Attention:

	
David Noble, Chief Financial Officer

	
Telephone:

	
(203) 489-9502

	
Facsimile:

	
(858) 726-1546

 

13. 
          Loan Documents. This Agreement and all other documents executed in connection
herewith shall each constitute a Loan Document for all purposes under the Note, the Guaranty, the Subordination Agreement,
the Loan Agreement and the other Loan Documents. All references in each of the Loan Documents to the Loan Agreement shall be
deemed to be a reference to the Loan Agreement as amended by this Agreement and as the same may be further amended, restated,
replaced, supplemented, renewed, extended or otherwise modified from time to time. All references in each of the Loan
Documents to the Loan Documents or to any particular Loan Document shall be deemed to be a reference to such Loan Documents
as amended by this Agreement, and as the same may be further amended, restated, replaced, supplemented, renewed, extended or
otherwise modified from time to time. All references in the Loan Documents to a particular section of a Loan Document shall
be deemed to be a reference to the particular section of such Loan Document as amended by this Agreement, and as the same may
be further amended, restated, replaced, supplemented, renewed, extended or otherwise modified from time to time.

 

14.     
    No Other Amendments. Except as expressly amended hereby, each Loan Document shall remain in full force
and effect in accordance with its terms and provisions, without any waiver, amendment or modification of any provision thereof.

 

15.     
     No Further Modifications.  This Agreement may not be amended, modified or otherwise changed in
any manner except by a writing executed by all of the parties hereto.

 

16.         Severability. In case any provision of this Agreement shall be invalid, illegal, or unenforceable, such provision shall be deemed to have been modified to the extent necessary to make it valid, legal and enforceable. The validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

17.     
     Successors and Assigns. This Agreement is binding on, and shall inure to the benefit of the parties
hereto, their administrators, executors, and successors and assigns; provided, however, that Borrower and each Guarantor may only
assign its rights hereunder to the extent permitted in the Loan Documents.

 

18.     
     Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the
State of New York, without giving effect to the conflict of laws provisions of said state.

 

19.     
     Entire Agreement. This Agreement constitutes all of the agreements among the parties relating to the
matters set forth herein and supersedes all other prior or concurrent oral or written letters, agreements and understandings with
respect to the matters set forth herein.

 

20.          
Counterparts. This Agreement may be signed in any number of counterparts by the parties hereto, all of which taken together
shall constitute one and the same instrument.

 

9

 

 

21. 
   WAIVER OF TRIAL BY JURY.  BORROWER, GUARANTOR, AND LENDER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY
JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD
TO THIS AGREEMENT, THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, GUARANTOR, AND LENDER, AND IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER
IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER
AND GUARANTOR.

 

[Signatures appear on the following pages]

 

10

 

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the day and year first above written.

 

	
 

	
LENDER:

	
 

	
 

	
 

	
 

	
 

	
 

	
GERBER FINANCE, INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ Jennifer Palmer

	
 

	
 

	
 

	
Name: Jennifer Palmer

	
 

	
 

	
 

	
Title: President

	
 

	
 

	
 

	
 

	
 

	
 

	
BORROWER:

	
 

	
 

	
 

	
 

	
 

	
 

	
KBS BUILDERS, INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ Daniel M. Koch

	
 

	
 

	
 

	
Name: Daniel M. Koch

	
 

	
 

	
 

	
Title: President

	
 

	
 

	
 

	
 

	
 

	
 

	
EXISTING GUARANTOR

	
 

	
 

	
 

	
 

	
 

	
 

	
ATRM HOLDINGS, INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ Daniel M. Koch

	
 

	
 

	
 

	
Name: Daniel M. Koch

	
 

	
 

	
 

	
Title: President

	
 

	
 

	
 

	
 

	
 

	
 

	
NEW GUARANTOR

	
 

	
 

	
 

	
 

	
 

	
 

	
DIGIRAD CORPORATION

	
 

	
 

	
 

	
 

	
 

	
By:

	
Matthew G. Molchan

	
 

	
 

	
Name: Matthew G. Molchan

	
 

	
 

	
Title: President and Chief Executive Officer

	
 

 

[Signature Page to Consent and Acknowledgement Agreement and Twelfth Amendment to Loan Agreement

 

11

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