Document:

Exhibit

AMENDMENT NO. 1 TO REVOLVING CREDIT AGREEMENT
This Amendment No. 1 to Revolving Credit Agreement (“Amendment”) dated January 30, 2018 (“Amendment No. 1 Effective Date”) is made between Digirad Corporation, a Delaware corporation (“Borrower”) and Comerica Bank, a Texas banking association (“Bank”).
Borrower and Bank entered into a Revolving Credit Agreement dated June 21, 2017 (“Credit Agreement”) providing terms and conditions governing certain loans and other credit accommodations extended by Bank to Borrower.  
Borrower and Bank have agreed to amend the terms of the Credit Agreement as provided in this Amendment.  
Accordingly, Borrower and Bank agree as follows:
1.Capitalized Terms.  In this Amendment, capitalized terms that are used without separate definition shall have the meanings given to them in the Credit Agreement.
2.    Amendments.  The Credit Agreement is amended as follows:
(a)    The following terms, which are defined in the Credit Agreement, are given the following amended definitions: 
“Adjusted EBITDA” shall mean, in respect of any applicable Person(s) and for any applicable period of determination, the sum (without duplication) of (i) the EBITDA of such Person(s) for such period; plus (ii) non-recurring costs and expenses and integration charges related to Permitted Acquisitions, in an aggregate amount up to three percent (3.0%) of the EBITDA of such Person(s) for such period; plus (iii) non-recurring costs and expenses related to Permitted Litigation, in an aggregate amount to be agreed upon between Bank and Borrower in writing for the period ending December 31, 2017; plus (iv) non-recurring fees, costs, and expenses incurred in connection with the consummation of the transactions contemplated by the Loan Documents, including but not limited to, non-cash debt extinguishment costs related to the termination of Borrower’s credit facility with Wells Fargo Bank, NA, (i.e., GAAP accounting impact of terminating debt and related costs under credit facility); plus (v) non-cash stock based compensation; plus (vi) non-cash gains or losses; plus (vii) one-time expenses for severance and relocation payments incurred in connection with the restructuring associated with the sale of DMS service contracts pursuant to that certain Asset Purchase Agreement dated December 22, 2017, between DMS Health Technologies, Inc. as seller and Philips North America LLC as buyer (the “Asset Sale”), provided, that the amount of such expenses added back for purposes of calculating Adjusted EBITDA shall be limited to $750,000 during the term of this Agreement; plus (viii) other additions and adjustments acceptable to Bank in its sole discretion, all as determined in accordance with GAAP.
“FCCR Capital Expenditures” shall mean the greater of (a) Capital Expenditures made during such period, excluding that portion of Capitalized Leases that was not paid for in cash, or (b) $2,800,000.
“Revolving Credit Commitment’ shall mean Twenty Five Million Dollars ($25,000,000), provided that upon the closing of the Asset Sale and the application of net proceeds therefrom (less any amount heldback in escrow), the Revolving Credit Commitment shall be Twenty Million Dollars ($20,000,000).

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(b)    Exhibit B to the Credit Agreement (Revolving Credit Note) is amended entirely to be in the form of attached Amended Exhibit B. 
3.    Representations.  Borrower represents and agrees that:
(a)    Except as expressly modified in this Amendment, (i) the representations and warranties set forth in the Credit Agreement and in each of the Loan Documents remain true and correct in all respects, except to the extent that they expressly speak as of a specific prior date, and (ii) the covenants set forth in the Credit Agreement continue to be satisfied in all respects, and are legal, valid and binding obligations with the same force and effect as if entirely restated in this Amendment.  
(b)    When executed, this Amendment will be a duly authorized, legal, valid, and binding obligation of Borrower enforceable in accordance with its terms, and will not conflict with or violate any of Borrower’s organization documents or any agreement, instrument, law, or order to which Borrower or any material portion of its assets is subject or bound.  
(c)    Except for events or conditions for which Bank is giving its waiver in this Amendment, there is no default continuing under the Credit Agreement, or any related document, agreement, or instrument, and no event has occurred or condition exists that is or, with the giving of notice or lapse of time or both, would be such a default.  
4.    Conditions Precedent.  The effectiveness of this Amendment is subject to Bank’s receipt of or Borrower’s satisfaction of all of the following:
(a)    this Amendment, the $20,000,000 Revolving Credit Note, the Consent Letter and such other agreements and instruments reasonably requested by Bank pursuant hereto (including such documents as are necessary to create and perfect Bank’s interest in the Collateral), each duly executed by Borrower and any other applicable party;
(b)    execution and delivery by the Guarantors of the Acknowledgement and Consent of Guarantors as set forth below; 
(c)    payment of all of Bank’s expenses incurred through the date of this Amendment together with the costs of recording any amendment required by this Amendment and upon Borrower’s execution of this Amendment, Bank will be authorized to charge any deposit or other account of Borrower maintained with Bank for such expenses; and
(d)    such other documents and completion of such other matters as Bank may reasonably deem necessary or appropriate.
5.    No Other Changes.  Except as specifically provided in this Amendment, it does not vary the terms and provisions of any the Loan Documents.  This Amendment shall not impair the rights, remedies, and security given in and by the Loan Documents.  The terms of this Amendment shall control any conflict between its terms and those of the Credit Agreement.
6.    Ratification.  Except for the modifications under this Amendment, the parties ratify and confirm the Credit Agreement and the Loan Documents and agree that they remain in full force and effect.
7.    Further Modification; No Reliance.  This Amendment may be altered or modified only by written instrument duly executed by Borrower and Bank.  In executing this Amendment, Borrower is not relying 

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on any promise or commitment of Bank that is not in writing signed by Bank.  This Amendment shall not be more strictly construed against any one of the parties as compared to any other.  
8.    Successors and Assigns.  This Amendment shall inure to the benefit of and be binding upon the parties and their respective successors and assigns.
9.    Governing Law.  The parties agree that the terms and provisions of this Amendment shall be governed by and construed in accordance with the internal laws of the State of California, without regard to principles of conflicts of law.
10.    Release and Waiver.  Borrower waives, discharges, and forever releases Bank, Bank’s employees, officers, directors, attorneys, stockholders, and their successors and assigns, from and of any and all claims, causes of action, allegations or assertions that Borrower has or may have had at any time up through and including the date of this Amendment, against any or all of the foregoing, regardless of whether any such claims, causes of action, allegations or assertions are known to Borrower or whether any such claims, causes of action, allegations or assertions arose as result of Bank’s actions or omissions in connection with the Credit Agreement, any other Loan Document, any amendments, extensions or modifications thereto, or Bank’s administration of the Indebtedness. It is further understood and agreed that any and all rights under the provisions of Section 1542 of the California Civil Code are expressly waived by Borrower.  Section 1542 of the California Civil Code provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
11.    Expenses.  Borrower shall promptly pay all out-of-pocket fees, costs, charges, expenses, and disbursements of Bank incurred in connection with the preparation, execution, and delivery of this Amendment, and the other documents contemplated by this Amendment. Borrower hereby authorizes Bank to charge any deposit or other account of Borrower maintained with Bank for reimbursement of any such fees, costs, charges, expenses, and disbursements.  
12.    Counterparts.  This Amendment may be executed in one or more counterparts, and by separate parties on separate counterparts, all of which shall constitute one and the same agreement.
[end of amendment – signature page follows]

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This Amendment No. 1 to Revolving Credit Agreement is executed and delivered as of the Amendment No. 1 Effective Date.
	
		
	Comerica Bank

By:  /s/ Christopher Burden 
        Christopher Burden
Its:   Portfolio Manager

	Digirad Corporation

By:    /s/ Jeffry R. Keyes            
         Jeffry R. Keyes
Its:   Chief Financial Officer

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Acknowledgement and Consent of Guarantor
The undersigned have guaranteed the payment and performance of the Indebtedness pursuant to the Guaranty dated June 21, 2017 (“Guaranty”).  The undersigned (a) acknowledges and consents to the execution, delivery and performance of the foregoing Amendment No. 1 to Revolving Credit Agreement, and (b) agrees that (i) its guaranty remains in full force and effect and (ii) it has absolutely no defenses, claims, rights of set-off, or counterclaims against Bank under, arising out of, or in connection with, the foregoing Amendment No. 1 to Revolving Credit Agreement, the Revolving Credit Agreement, the Guaranty, or the other Loan Documents.  The undersigned further represents that it is in compliance with all of the terms and conditions of the Guaranty. 
Dated January 30, 2018
	
		
	

DIGIRAD IMAGING SOLUTIONS, INC.

By: /s/ Jeffry R. Keyes          
          Jeffry R. Keyes
Its:    Chief Financial Officer

	

PROJECT RENDEZVOUS ACQUISITION CORPORATION 

By: /s/ Jeffry R. Keyes          
         Jeffry R. Keyes
Its:    Chief Financial Officer

	TELERHYTHMICS, LLC

By: /s/ Jeffry R. Keyes          
          Jeffry R. Keyes
Its:    Chief Financial Officer

	DMS HEALTH TECHNOLOGIES, INC.

By: /s/ Jeffry R. Keyes          
          Jeffry R. Keyes
Its:    Chief Financial Officer

	MD OFFICE SOLUTIONS

By: /s/ Jeffry R. Keyes         
          Jeffry R. Keyes
Its:     President, Chief Executive Officer & Chief                                        Financial Officer 

	DMS IMAGING, INC.

By: /s/ Jeffry R. Keyes          
          Jeffry R. Keyes
Its:    Chief Financial Officer

	PROJECT RENDEZVOUS HOLDING CORPORATION

By: /s/ Jeffry R. Keyes         
         Jeffry R. Keyes
Its:    Chief Financial Officer

	DMS HEALTH TECHNOLOGIES-CANADA, INC.

By: /s/ Jeffry R. Keyes          
         Jeffry R. Keyes
Its:    Chief Financial Officer

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AMENDED EXHIBIT B
REVOLVING CREDIT NOTE
 
$20,000,000.00                                     January 30, 2018

On or before the Revolving Credit Maturity Date, FOR VALUE RECEIVED, Digirad Corporation, a Delaware corporation (“Borrower”), promises to pay to the order of Comerica Bank (“Bank”) at any office of the Bank in the State of California, in lawful money of the United States of America, so much of the sum of Twenty Million and 00/100 Dollars ($20,000,000.00), as may from time to time have been advanced by Bank and then be outstanding hereunder pursuant to the Revolving Credit Agreement made as of the 21st day of June, 2017 (as amended, restated or otherwise modified from time to time, the “Credit Agreement”), by and between Bank and Borrower.  Each of the Revolving Credit Advances made hereunder shall bear interest at the Applicable Interest Rate from time to time applicable thereto under the Credit Agreement or as otherwise determined thereunder, and interest shall be computed, assessed and payable on the unpaid principal amount of each Revolving Credit Advance made by the Bank from the date of such Revolving Credit Advance until paid at the rate and at the times set forth in the Credit Agreement.
This Note is a note under which Revolving Credit Advances (including refundings and conversions), repayments and readvances may be made from time to time, but only in accordance with the terms and conditions of the Credit Agreement. This Note evidences borrowings under, is subject to, is secured in accordance with, and may be accelerated or matured under, the terms of the Credit Agreement, to which reference is hereby made. Capitalized terms used herein, except as defined to the contrary, shall have the meanings given them in the Credit Agreement.
This Note shall be interpreted and the rights of the parties hereunder shall be determined under the laws of, and enforceable in, the State of California.
The Borrower hereby waives presentment for payment, demand, protest and notice of dishonor and nonpayment of this Note and agrees that no obligation hereunder shall be discharged by reason of any extension, indulgence, release, or forbearance granted by any holder of this Note to any party now or hereafter liable hereon or any present or subsequent owner of any property, real or personal, which is now or hereafter security for this Note.
This Note constitutes a restatement, replacement and substitution for, that certain Revolving Credit Note dated June 21, 2017 in the original principal amount of $25,000,000.00, executed by the undersigned and made payable to the order of the Bank (the “Prior Note”).  The indebtedness evidenced by the Prior Note is continuing indebtedness evidenced hereby, and nothing herein shall be deemed to constitute a payment, settlement or novation of the Prior Note, or to release or otherwise adversely affect any lien, mortgage or security interest securing such indebtedness or any rights of the Bank against any guarantor, surety, or other party primarily or secondarily liable for such indebtedness.
*     *     *
[SIGNATURES FOLLOW ON SUCCEEDING PAGE]

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Nothing herein shall limit any right granted Bank by any other instrument or by law.
DIGIRAD CORPORATION

By:           /s/ Jeffry R. Keyes                                 

Its:       Chief Financial OfficerExhibit 10.1

AT&T INC.

SHORT TERM INCENTIVE PLAN

The Short Term Incentive Plan ("Plan") is established to provide Executive Officers, Officers, Senior Managers and, where appropriate, other Employees, with short-term incentive compensation based upon the achievement of performance goals.

	
1.

	
Definitions.

For purposes of this Plan, the following underlined words and phrases shall have the meanings indicated, unless the context clearly indicates otherwise:

Award shall mean an award under this Plan, which shall consist of the Target Award and related payout schedule, together with the associated Performance Goals, Performance Period, and any other terms and conditions, as well as the Key Contributor Award.

AT&T or the Company shall mean AT&T Inc., a Delaware Corporation.

Disability shall mean absence of an Employee from work under the relevant Employer disability plan.

Employee shall mean any person designated as an employee in the payroll and personnel records of an Employer and paid on an Employer's payroll system.

Executive Officer shall mean any Officer who is identified by AT&T as an executive officer under Rule 3b-7 of the Securities Exchange Act of 1934.

Employer shall mean AT&T or any of its Subsidiaries.

Leave of Absence shall mean an Employee's absence from employment with an Employer on a formally granted leave of absence (i.e., the absence is with formal permission in order to prevent a break in the continuity of term of employment, which permission is granted (and not revoked) in conformity with the rules of the applicable Employer, as adopted from time to time).

Officer shall mean an Employee who is designated as an officer for compensation purposes on the records of AT&T.

Performance Goals shall mean any financial, service, or other goals applicable to the payment of Target Awards under this Plan.

Performance Period shall mean the time period over which Performance Goals are measured, but in no case shall a Performance Period exceed one (1) year.

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Retire or Retirement shall mean the Termination of an Employee's employment with AT&T or any of its subsidiaries on or after attaining one of the following combinations of age and Term of Employment (as determined under the applicable Employer pension plan), as applicable:

     Term of Employment Age

     10 years or more      65 or older

     20 years or more      55 or older

     25 years or more      50 or older

     30 years or more      Any age

Notwithstanding the foregoing, "Retire" or "Retirement" for an Officer also refers to the Termination of Employment of an Officer, other than for cause, who has attained age 55 and has completed a 5 year Term of Employment, provided, however, that individuals who are designated as an Officer on or after October 1, 2015, must have completed a 10-year Term of Employment.

Senior Manager shall mean an Employee who is designated as a senior manager for compensation purposes on the records of AT&T.

SEVP-HR shall mean the AT&T's highest ranking Officer (below the Chief Executive Officer (CEO)) who is specifically responsible for human resources matters.  Any authority granted to the SEVP-HR shall also be held by the CEO.

Subsidiary shall mean any U.S. corporation in which AT&T owns, directly or indirectly, more than fifty percent (50%) of the total combined voting power of all classes of stock, or any other entity (including, but not limited to, partnerships and joint ventures) in which AT&T owns, directly or indirectly, more than fifty percent (50%) of the combined equity thereof.

Target Award shall mean a specific dollar value or percentage of salary that may be paid based on the 100% achievement of the related Performance Goals.

Termination of Employment, Termination, or a similar reference shall mean the event where the Employee ceases to be an Employee and is no longer employed by an Employer.

2. Administration.

The Human Resources Committee (the "Committee") shall have complete authority over the administration of the Plan and the authority to construe, interpret, and implement the Plan or any Award thereunder, and make factual determinations under the Plan.    The CEO and the SEVP-HR, in their sole respective discretions, shall have complete authority to construe, interpret, and implement the provisions of the Plan or any Award solely with respect to Plan or Award matters delegated to them or to delegate all or part of their authority.  All actions and determinations by the Committee, the CEO, the SEVP-HR (each an "Administrator"), or their respective delegates, authorized by this Plan shall be final and binding and shall be afforded the greatest legal deference on review.

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3.

	
Establishing, Modifying, or Terminating Awards.

Awards under this Plan shall be established, modified, or terminated by the Committee, the CEO, or the SEVP-HR, as follows:

	
A.

	
   The Committee may establish, modify, or terminate an Award for any Employee.

	
B.

	
 Except as prohibited by the Committee, the CEO may interpret, establish, modify or terminate an Award for any Officer (other than an Executive Officer) or lower level employee, even if the Award was originally granted by the Committee.

	
C.

	
 Except as prohibited by the Committee or the CEO, the SEVP-HR may interpret, establish, modify or terminate an Award for any Employee that is not an Officer, even if the Award was originally granted by the Committee or the CEO.

	
D.

	
 Except as prohibited by the Committee or the Plan, in the event of a promotion, change in responsibility, or new hire during the Performance Period, the CEO or SEVP-HR may establish or modify an Award for an Employee.

4. Award Terms.

An authorized Administrator establishing an Award, shall determine the terms and conditions of the Award, including any Performance Goals and associated performance exclusions that would be used to determine, in whole or in part, the amount of any payout of an Award.  The terms of an Award, including any Performance Goals and associated performance exclusions, may be modified, reduced or cancelled at any time before the Award is finally distributed.

5. Final Award Determination.

Actual performance shall be compared to any predetermined Performance Goals to determine payout of Awards.  An authorized Administrator shall then determine the percentage of the Target Award (using the related payout schedule) to be distributed to Employees for the relevant Performance Period as it may determine in its sole and complete discretion.

The final Award to be distributed to an Employee (or former Employee) may be more or less in an authorized Administrator's discretion (including no award) than the percentage of the Target Award determined for such Employee; for example, an authorized Administrator may approve a final Award greater or less than the (prorated, if applicable) performance-adjusted Target Award.

Determination and distribution of all Awards is subject to approval by an authorized Administrator, except as provided herein.  All Awards are payable in cash and will be paid within two and one-half (2 1⁄2) months of the end of the Performance Period and in all cases no later than March 15 of the year following the year in which a Performance Period ends.

For purposes of other plans, the portion of an Award payout that is earned while an Employee is a Senior Manager or below shall be classified as an Annual Bonus; and the portion earned while an Employee is an Officer shall be classified as a Short Term

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Incentive Award.  In each case, unless otherwise provided by an authorized Administrator, the Key Contributor Award, if any, paid with respect to a Performance Period shall be classified as either an Annual Bonus or a Short Term Incentive Award, based upon the recipient's management level at the end of the Performance Period.

6. Key Contributor Awards.

An authorized Administrator may provide an additional payment to recipients of Target Awards to recognize and reward outstanding or exceptional achievement.  Such a payment shall be called a "Key Contributor Award" or "KCA."  The number of Employees within an organization that may receive a KCA may be limited by an authorized Administrator.

7. Award Adjustments.

Unless otherwise provided by an authorized Administrator, an Employee who experiences one of the following events during the Performance Period shall have his/her Award under this Plan automatically adjusted as follows:

 

  

	
When an Award is established after the beginning of the Performance Period

	 	
Award shall be prorated based on the time period of active service under the applicable Award terms

	 
	
Modification of an Award during the Performance Period

	 	

Award shall be prorated based on the time period of active service under each applicable set of Award terms

 

	 
	
Leave of Absence during the Performance Period

	 	

Award shall be prorated to exclude the time period of the leave

 

	 
	

Involuntary Termination during the Performance Period

 

	 	

Award shall be prorated to the date of Termination of Employment

 

	 
	

Voluntary Termination prior to the end of the performance period (except as provided below)

 

	 	
No Award

	 
	

Retirement or Termination of Employment due to death or Disability during the performance period

 

	 	
Award shall be prorated to the date of Termination of Employment

	 
	
Dismissal for cause, even if Retirement eligible, during or after a Performance Period, but prior to Award payout

	 	
Award shall be forfeited upon Termination of Employment

	 

The receipt of short-term Disability benefits during the Performance Period shall have no effect on an Award.

Page 4

8. Other Conditions.

	
A.

	
No person shall have any claim to be granted an Award under the Plan and there is no obligation for uniformity of treatment of Employees under the Plan.  Awards under the Plan may not be assigned or alienated.

	
B.

	
Neither the Plan nor any action taken hereunder shall be construed as giving to any Employee the right to be retained in the employ of AT&T or any subsidiary thereof.

	
C.

	
Awards shall be subject to applicable withholding taxes as required by law.

	
D.

	
The Plan shall be governed by the laws of the State of Texas and applicable Federal law.

	
E.

	
The AT&T Rules for Employee Beneficiary Designations shall apply to Awards under this Plan.

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