Document:

EXHIBIT 10.30

 

	
   

  	
  *** CERTAIN CONFIDENTIAL
  INFORMATION CONTAINED IN THIS DOCUMENT (INDICATED BY ASTERISKS) HAS BEEN
  OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
  PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER 17 C.F.R. SECTIONS
  200.80(B)(4), 200.83 AND 230.406.

  

 

AMENDED AND RESTATED
WARRANT ISSUANCE AGREEMENT

 

This Amended
and Restated Warrant Issuance Agreement (this “Agreement”) is effective as of
November 13, 2002 (the “Effective Date”) by and between Digirad Corporation, a
Delaware corporation (the “Company”), McAdams and Whitham Consulting, LLC (“MWC
Consulting”) and Dr. Stephen A. McAdams and John C. Whitham
(each, a “Principal” and collectively, the “Principals”).  Capitalized terms used herein which are not
defined shall have the definitions ascribed to them in the Consulting Agreement
(as defined below).

RECITALS

 

WHEREAS, the
Company, MWC Consulting and the Principals are party to a certain Warrant
Issuance Agreement dated July 31, 2001 (the “Prior Issuance Agreement”),
pursuant to which the Company is obligated to periodically issue to the
Principals certain warrants to purchase shares of the Common Stock of the
Company (“Common Stock”);

 

WHEREAS, the
Company and MWC Consulting have entered into a certain Consulting Agreement
dated November 13, 2002 (the “Consulting Agreement”), pursuant to which the
Company is obligated to periodically issue to MWC Consulting certain warrants
to purchase shares of the Common Stock of the Company;

 

WHEREAS, the
Company, MWC Consulting and the Principals desire that the issuance of warrants
pursuant to the Consulting Agreement be governed by this Agreement and further
agree that the Prior Issuance Agreement shall be superceded and replaced in its
entirety by this Agreement and that this Agreement shall govern the rights of
MWC Consulting and the Principals to be issued warrants to purchase shares of
Common Stock of the Company and other matters as set forth herein;

 

WHEREAS, Dr.
Stephen A. McAdams and Mr. John C. Whitham are the sole principals of MWC
Consulting and desire to have any Warrants (as defined below) issued to them in
their individual names;

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Company, MWC Consulting and the Principals
hereby agree as follows:

 

1.             Issuance of Warrants.

 

1.1           Number: Issuance Schedule:
Exercise Price.  Subject to the
terms and conditions of the Consulting Agreement and this Agreement, the
Company shall issue to each Principal warrants in substantially the form
attached hereto as Exhibit A (each, a “Warrant” and collectively, the
“Warrants”), to purchase up to that number of shares of Common Stock as is

 

 

determined pursuant to Section 1.2.  The Warrants will be issued and delivered
from time to time as is determined pursuant to Section 1.3.  The Warrants will be exercisable at a price
per share as is determined pursuant to Section 1.4.

 

1.2           Number of Warrant Shares.  Subject to this Section 1.2 and
Section 1.3, the Company shall issue to each Principal Warrants,
exercisable at a price per share as is determined pursuant to Section 1.4, to
purchase up to that number of shares of Common Stock as is determined pursuant
to the following:

 

(a)           The Company shall
issue to each Principal a Warrant to purchase up to  ***  shares of Common
Stock of the Company for each Unit sold to an Identified Customer (as defined
in the Consulting Agreement) on or after the Effective Date;

 

(b)           As a condition
precedent to the Company’s obligation to issue to the Principals any Warrant or
Warrants pursuant to this Agreement, MWC Consulting shall deliver to the
Company documentation reasonably satisfactory to the Company and signed by each
of the Principals, confirming that the Unit(s)have been sold to the Identified
Customer(s) (a “Sales Report”).

 

(c)           The Company’s
obligation to issue to the Principals any Warrant or Warrants pursuant to this
Agreement shall terminate upon either (i) the Company’s or MWC
Consulting’s receipt of notice of termination of the Consulting Agreement or
(ii) the Principals’ receipt of Warrants to purchase up to an aggregate
of     ***    shares of Common Stock pursuant to this Agreement.

 

(d)           For purposes of this
Section 1.2, a “Unit” or “Units” shall mean a
                     ***                     
a
                ***               
or any successor *** designated by the Company.

 

1.3           Issuance Schedule.  After the Company’s receipt and acceptance
of a Sales Report, at the next meeting of the Board of Directors (the “Board”)
of the Company (such date, the “Meeting Date”), the Company shall issue to the
Principals Warrants, exercisable at a price as is determined pursuant to
Section 1.4, to purchase up to that number of shares of Common Stock as is
determined pursuant to Section 1.2. The “Date of Issuance” of each such Warrant
shall be the Meeting Date. Such Warrant shall thereafter be delivered to the
Principals within                                ***.

 

1.4           Exercise Price.  The Exercise Price of any Warrant issued
pursuant to Section 1.3 shall
be                        ***                            ***              ,
with reference to the following:

 

	
  (a)

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  

 

***        Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.

 

2

 

	
  (b)

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  
	
   

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ; and

  
	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
  ***.

  

 

2.             Representations and Warranties
of the Principals.  Each Principal
hereby represents and warrants to and for the benefit of the Company, with
knowledge that the Company is relying thereon in entering into this Agreement
and issuing the Warrants to the Principals, as follows:

 

2.1           Purchase Entirely for Own Account.  By the Principals’ execution of this
Agreement, each Principal hereby confirms that any Warrant to be received by
the Principal and the Common Stock issuable upon exercise of such Warrant
(collectively, the “Securities”) shall be acquired for investment for the
Principal’s own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that the Principal has no
present intention of selling, granting any participation in, or otherwise
distributing the Securities.  By
executing this Agreement, each Principal further represents that each Principal
does not have any contract, undertaking, agreement or arrangement with any person
to sell, transfer or grant participation to such person or to any third person,
with respect to any of the Securities. Each Principal represents that he has
full power and authority to enter into this Agreement.

 

2.2           Investment Experience.  Each Principal is an investor in securities
of companies in the development stage and acknowledges that he is able to fend
for himself, can bear the economic risk of his investment and has such
knowledge and experience in financial or business matters that he is capable of
evaluating the merits and risks of the investment in the Securities.

 

2.3           Accredited Investor.  Each Principal is an “accredited investor”
within the meaning of Securities and Exchange Commission Rule 501 of Regulation
D, as now in effect.

 

2.4           Restricted Securities.  Each Principal understands that the
Securities he is and shall be acquiring are characterized as “restricted
securities” under the federal securities laws inasmuch as they are being
acquired from the Company in a transaction not involving a public offering and
that under such laws and applicable regulations the Securities may be resold
without registration under the Securities Act of 1933, as amended (the “Act”),
only in certain limited circumstances. In this connection, each Principal
represents that he is familiar with Rule 144 promulgated under the Act, as now
in effect, and understands the resale limitations imposed thereby and by the
Act.

 

2.5           Legends.  Each Principal understands that the
certificates evidencing the Securities may bear one or more of the following or
other legends:

 

***        Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.

 

3

 

(a)           “The securities
evidenced by this certificate have not been registered under the Securities Act
of 1933, as amended (the “Act”) or the securities laws of any state of the
United States. The securities evidenced by this certificate may not be offered,
sold or transferred for value, directly or indirectly, in the absence of such
registration under the Act and qualification under applicable state laws, or
pursuant to an exemption from registration under the Act and qualification
under applicable state laws, the availability of which is to be established to
the reasonable satisfaction of the Company.”

 

(b)           Any legend required
by the laws of the states of California or Delaware, including any legend
required by the California Department of Corporations and Sections 417 and 418
of the California Corporations Code.

 

(c)           Any legend required
to be placed on the Securities purchased by Principals in any future sale or
offering of any Securities.

 

3.             Restrictions on Disposition.  Without in any way limiting the
representations set forth in Section 2 above, each Principal further agrees not
to make any disposition of all or any portion of the Securities unless and
until the transferee (if such sale is in a privately negotiated transaction)
has agreed in writing for the benefit of the Company to be bound by this
Section 3, and in addition thereto, one of the following conditions is
satisfied:

 

3.1           Securities Registered.  There is then in effect a registration
statement under the Act covering such proposed disposition and such disposition
is made in accordance with such registration statement.

 

3.2           Registration Not Required. The
Principals shall have (i) notified the Company of the proposed disposition and
shall have furnished the Company with a reasonably detailed statement of the
circumstances surrounding the proposed disposition and (ii) if reasonably
requested by the Company, furnished the Company with an opinion of counsel,
satisfactory to the Company, that such disposition will not require
registration of such securities under the Act; provided, however, that
the Company will not require opinions of counsel for transactions made pursuant
to Rule 144, except in unusual circumstances.

 

4.             Market Stand-Off Agreement.  Each Principal hereby agrees that, during
the period of duration specified by the Company and an underwriter of Common
Stock or other securities of the Company, following the effective date of a
registration statement of the Company filed under the Act, he shall not, to the
extent requested by the Company and such underwriter, directly or indirectly
sell, offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) any securities of the Company
held by him at any time during such period except Common  Stock
included in such registration; provided, however, that:

 

4.1           Such agreement shall not exceed 180
days for the first such registration statement of the Company which covers
Common Stock (or other securities) to be sold on its behalf to the public in an
underwritten offering;

 

4.2           Such agreement shall not exceed
ninety (90) days for any subsequent

 

2

 

registration statement of the Company which
covers Common Stock (or other securities) to be sold on its behalf to the
public in an underwritten offering; and

 

4.3           All directors and officers of the
Company as well as all holders of one percent (1 %) or more of the Company’s
outstanding capital stock are similarly bound.

 

In order to
enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Securities of the Principal (and the shares or
securities of every other person subject to the foregoing restriction) until
the end of such period.

 

5.             General Provisions.

 

5.1          Governing Law.  This Agreement and/or the Warrants shall be
governed by and construed and enforced in accordance with the laws of the State
of California as applied to agreements among California residents entered into
and to be performed entirely within California.

 

5.2           Entire Agreement.  This Agreement, together with the agreements
and documents referred to herein, the Consulting Agreement, and those certain
Warrants to Purchase Common Stock dated November 13,2002 issued to each of the
Principals, constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and supersede all prior and
contemporaneous negotiations, agreements and understandings.

 

5.3           Notices.  Any notice required or permitted under this
Agreement and/or the Warrants shall be in writing and shall be hand delivered,
sent by facsimile or other electronic medium, by registered or certified mail,
postage prepaid, or by nationally recognized overnight carrier to the Company,
MWC Consulting or the Principals at the address set forth below or to such
other address as may be furnished in writing to the other party hereto. Such
notice shall be deemed effectively given (i) if hand delivered, upon delivery,
(ii) if sent by facsimile or other electronic medium, when confirmed, if sent
during the normal business hours of the recipient (and if not sent during the
normal business hours of the recipient, then on the next business day), (iii)
if sent by mail, five days after having been sent or (iv) if sent by nationally
recognized overnight courier, one day after deposit with such courier:

 

	
  MWC
  Consulting:

  	
   

  	
  McAdams and
  Whitham Consulting, LLC

  
	
   

  	
   

  	
  1718 East
  Fourth St., Suite 501

  
	
   

  	
   

  	
  Charlotte,
  NC 28204

  
	
   

  	
   

  	
  Attention:  Dr. Stephen A. McAdams

  
	
   

  	
   

  	
   

  
	
  Company:

  	
   

  	
  Digirad
  Corporation

  
	
   

  	
   

  	
  9350 Trade
  Place

  
	
   

  	
   

  	
  San Diego,
  CA 92126-6334

  
	
   

  	
   

  	
  Attention:
  Chief Executive Officer

  

 

3

 

	
  Principals:

  	
   

  	
  Stephen A.
  McAdams

  
	
   

  	
   

  	
  McAdams and
  Whitham Consulting, LLC

  
	
   

  	
   

  	
  1718 East
  Fourth St., Suite 501

  
	
   

  	
   

  	
  Charlotte,
  NC 28204

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  John C.
  Whitham

  
	
   

  	
   

  	
  McAdams and
  Whitham Consulting, LLC

  
	
   

  	
   

  	
  1718 East
  Fourth St., Suite 501

  
	
   

  	
   

  	
  Charlotte,
  NC 28204

  

 

5.4           Successors and Assigns.  This Agreement, and the rights and
obligations of each of the parties hereunder, may not be assigned by MWC
Consulting or the Principals without the prior written consent of the Company.
Subject to the foregoing sentence, this Agreement shall inure to the benefit
of, and shall be binding upon, the parties and their successors and assigns.

 

5.5           Severability.  If one or more provisions of this Agreement
and/or the Warrants are held to be unenforceable under applicable law, such
provision shall be excluded from this Agreement and the balance of this
Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms.

 

5.6           Amendments and Waivers.  Any term of this Agreement and the Warrants
may be amended and the observance of any other term of this Warrant may be
waived (either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Company, MWC Consulting
and the Principals.

 

5.7           Attorneys’ Fees.  If any action at law or in equity is
necessary to enforce or interpret the terms of this Warrant, the prevailing
party shall be entitled to reasonable attorneys’ fees, costs and disbursements
in addition to any other relief to which such party may be entitled.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

4

 

The
undersigned have caused this Agreement to be executed as of the date first
written above.

 

	
  COMPANY:

  	
  DIGIRAD
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  David M.
  Sheehan

  
	
   

  	
   

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  MWC
  CONSULTING:

  	
  MCADAMS AND
  WHITHAM CONSULTING, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Stephen A.
  McAdams

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  John C.
  Whitham

  
	
   

  	
   

  
	
   

  	
   

  
	
  PRINCIPALS:

  	
   

  	
   

  
	
   

  	
  Stephen A.
  McAdams

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  John C.
  Whitham

  

 

[SIGNATURE PAGE TO

AMENDED AND REST A TED WARRANT ISSUANCE AGREEMENT]

 

 

EXHIBIT A

 

FORM OF WARRANT TO PURCHASE COMMON STOCK

 

 

THIS WARRANT AND THE COMMON STOCK ISSUABLE
UPON THE EXERCISE HEREOF (COLLECTIVELY, THE “SECURITIES”) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT UNDER THE ACT WITH RESPECT TO THE
SECURITIES OR DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE COMPANY THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE
OR HYPOTHECATION IS IN COMPLIANCE WITH THE ACT OR UNLESS SOLD IN FULL
COMPLIANCE WITH RULE 144 UNDER THE ACT.

 

WARRANT TO PURCHASE
COMMON STOCK

 

OF

 

DIGIRAD CORPORATION

 

	
  MWC - 

  	
   

  	
  Date of
  Issuance - 

  

 

This Warrant
is one of several warrants issued by Digirad Corporation, a Delaware
corporation (the “Company”), in connection with that certain
Amended and Restated Warrant Issuance Agreement dated November 13,2002 (the “Issuance
Agreement”), by and between the Company, McAdams and Whitham
Consulting, LLC and [Stephen A. McAdams/John C. Whitham]
(including any successors and assigns, the “Holder”) and is subject to, and the
Company and the Holder shall be bound by, all of the terms, conditions and
provisions of the Issuance Agreement.

 

The Company
hereby certifies that, for value received, the Holder is entitled, subject to
the terms set forth below, to purchase from the Company at any time or from
time to time, before 5:00 PM Pacific time on the date which is        ***         after the Date
of Issuance noted above (the “Expiration Date”) up to fully paid and
nonassessable shares of Common Stock of the Company (“Common Stock”), as determined
by Section 1.2 of the Issuance Agreement and subject to adjustment as provided
herein (the “Warrant Shares”). The purchase price per share of such Common
Stock upon exercise of this Warrant shall be
$                   ,
as determined pursuant to Section 1.4 of the Issuance Agreement and subject to
adjustment as provided herein (the “Exercise Price”).

 

1.             Exercise Period.  Subject to Section 2.2 herein, this Warrant
may be exercised by the Holder at any time or from time to time after the Date
of Issuance noted above but before 5:00 PM, Pacific time on the Expiration Date
(the “Exercise
Period”) for up to that number of Warrant Shares as is set forth
above.

 

2.             Exercise of Warrant Number of
Warrant Shares: Termination.

 

2.1           Exercise of Warrant Partial
Exercise.  This Warrant may be
exercised in full or in part by the Holder with respect to any or all of the
Warrant Shares by surrender of this

 

***        Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.

 

 

Warrant, together with the form of
subscription attached hereto as Schedule 1, duly executed by the Holder,
to the Company at its principal office, accompanied by payment, in cash or by
certified or official bank check payable to the order of the Company, of the
aggregate Exercise Price for the Warrant Shares to be purchased hereunder. For
any partial exercise hereof, the Holder shall designate in a notice of exercise
or net issue election notice that number of shares of Common Stock that he
wishes to purchase. On any such partial exercise, the Company at its expense
shall forthwith issue and deliver to the Holder a new warrant of like tenor, in
the name of the Holder, which shall be exercisable for such number of shares of
Common Stock represented by this Warrant which have not been purchased upon
such exercise.

 

2.2           Termination of the Warrant Upon a
Corporate Transaction. Immediately following a Corporate Transaction (as
hereinafter defined), this Warrant shall terminate and cease to be outstanding,
provided that written notice has been given to the Holder at least 20 days
prior to the occurrence of the Corporate Transaction. For the purposes of this
Warrant, a “Corporate Transaction” shall mean: (i) a merger or consolidation in
which securities possessing more than fifty percent (50%) of the total combined
voting power of the Company’s outstanding securities are transferred to a
person or persons different from the persons holding those securities
immediately prior to such transaction; or (ii) the sale, transfer or other
disposition of all or substantially all of the Company’s assets in complete
liquidation or dissolution of the Company.

 

3.             Net Issuance.

 

3.1           Right to Convert.  The Holder shall have the right to convert
this Warrant or any portion thereof (the “Conversion Right”) into shares of Common
Stock as provided in this Section 3 at any time or from time to time during the
Exercise Period. Upon exercise of the Conversion Right with respect to a
particular number of Warrant Shares (the “Converted Warrant Shares”), the Company
shall deliver to the Holder (without payment by the Holder of any exercise
price or any cash or other consideration) that number of shares of fully paid
and nonassessable shares of Common Stock computed using the following formula:

 

X = Y(A - B)

A

 

Where          X = the number of
shares of Common Stock to be delivered to the Holder

 

Y = the number of Converted Warrant Shares

 

A = the fair market value of one share of the
Company’s Common Stock on the Conversion Date (as defined below)

 

B = the Exercise Price (as adjusted through the Conversion Date)

 

The Conversion
Right may only be exercised with respect to a whole number of Warrant Shares.
No fractional shares shall be issuable upon exercise of the Conversion Right,
and if the number of shares to be issued determined in accordance with the
foregoing formula is other than a whole number, the Company shall pay to the
Holder an amount in cash equal to the fair market value of

 

2

 

the resulting
fractional share on the Conversion Date (as defined below). Shares issued
pursuant to the Conversion Right shall be treated as if they were issued upon
the exercise of this Warrant.

 

3.2           Method of Exercise.  The Conversion Right may be exercised by the
Holder by the surrender of this Warrant at the principal office of the Company
together with a written statement specifying that the Holder thereby intends to
exercise the Conversion Right and indicating the total number of shares under
this Warrant that the Holder is exercising through the Conversion Right. Such
conversion shall be effective upon receipt by the Company of this Warrant
together with the aforesaid written statement, or on such later date as is
specified therein (the “Conversion Date”) and at such time the
person in whose name any certificate for shares of Common Stock shall be
issuable upon such exercise shall be deemed to be the record holder of such
Common Stock for all purposes. Certificates for the shares issuable upon
exercise of the Conversion Right and, if applicable, a new warrant evidencing
the balance of the shares remaining subject to the Warrant, shall be issued as
of the Conversion Date and shall be delivered to the Holder promptly following
the Conversion Date.

 

3.3           Determination of Fair Market Value.  For purposes of this Section 3, fair market
value of a share of Common Stock on the Conversion Date shall mean:

 

(1)           If traded on a stock exchange, the
fair market value of the Common Stock shall be deemed to be the average of the
closing selling prices of the Common Stock on the stock exchange determined by
the Board of Directors of the Company (the “Board”) to be the primary
market for the Common Stock over the ten (10) trading day period (or such
shorter period immediately following the closing of the Company’s initial
public offering) ending on the date prior to the Conversion Date, as such
prices are officially quoted in the composite tape of transactions on such
exchange;

 

(2)           If traded over-the-counter, the fair
market value of the Common Stock shall be deemed to be the average of the
closing bid prices (or, if such information is available, the closing selling
prices) of the Common Stock over the ten (10) trading day period (or such
shorter period immediately following the closing of the Company’s initial
public offering) ending on the date prior to the Conversion Date, as such
prices are reported by the National Association of Securities Dealers through
its NASDAQ system or any successor system; and

 

(3)           If there is no public market for the
Common Stock, the fair market value of the Common Stock shall be determined in
good faith by the Board.

 

4.             When Exercise Effective.  The exercise of this Warrant pursuant to
Section 2 shall be deemed to have been effected immediately prior to the close
of business on the business day on which this Warrant is surrendered to the
Company as provided in Section 2.1, or on such later date as is specified in
the form of subscription, and at such time the person in whose name any
certificate for shares of Common Stock shall be issuable upon such exercise, as
provided in Section 5, shall be deemed to be the record holder of such Common
Stock for all purposes.

 

5.             Delivery on Exercise.  As soon as practicable after the exercise of
this Warrant in full or in part pursuant to Section 2, the Company at its
expense (including the payment by it of

 

3

 

any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder, or as the Holder may direct,
a certificate or certificates for the number of fully paid and nonassessable
full shares of Common  Stock to which the Holder shall be
entitled on such exercise, together with cash, in lieu of any fraction of a
share, equal to such fraction of the current market value of one full share of Common  Stock
as determined pursuant to Section 3.3.

 

6.             Adjustments.  The number and kind of shares of Common  Stock
(or any shares of stock or other securities which may be) issuable upon the
exercise of this Warrant and the Exercise Price shall be subject to adjustment
from time to time upon the happening of certain events, as follows:

 

6.1           Dividends. Distributions. Stock
Splits or Combinations.  If the
Company shall at any time or from time to time after the date hereof (a) make
or issue, or fix a record date for the determination of holders of Common  Stock
(or any shares of stock or other securities which may be issuable upon the
exercise of this Warrant) entitled to receive, a dividend or other distribution
payable in additional shares of common or preferred stock, (b) subdivide its
outstanding shares of Common  Stock (or any shares of stock or
other securities which may be issuable upon exercise of this Warrant) into a
larger number of shares of Common  Stock (or any shares of stock or
other securities which may be issuable upon exercise of this Warrant) or (c)
combine its outstanding shares of Common  Stock (or any shares of stock or
other securities which may be issuable upon exercise of this W arrant) into a
smaller number of shares of Common  Stock (or any shares of stock or
other securities which may be issuable upon exercise of this Warrant), then and
in each such event the Exercise Price then in effect and the number of shares
issuable upon exercise of this Warrant shall be appropriately adjusted.

 

6.2           Reclassification or
Reorganization. If the Common  Stock (or any shares of stock or
other securities which may be) issuable upon the exercise of this Warrant shall
be changed into the same or different number of shares of any class or classes
of stock, whether by capital reorganization, reclassification or otherwise
(other than a subdivision or combination of shares or stock dividend provided
for in Section 6.1 above, or pursuant to a Corporate Transaction), then and in
each such event the Holder shall be entitled to receive upon the exercise of
this Warrant the kind and amount of shares of stock and other securities and
property receivable upon such reorganization, reclassification or other change
to which a holder of the number of shares of Common  Stock (or
any shares of stock or other securities which may be) issuable upon the
exercise of this Warrant would have received if this Warrant had been exercised
immediately prior to such reorganization, reclassification or other change, all
subject to further adjustment as provided herein.

 

6.3           Notice of Adjustments and Record
Dates.  The Company shall promptly
notify the Holder in writing of each adjustment or readjustment of the Exercise
Price and the number of shares of Common  Stock (or any shares of stock or
other securities which may be) issuable upon the exercise of this Warrant. Such
notice shall state the adjustment or readjustment and show in reasonable detail
the facts on which that adjustment or readjustment is based. In the event of
any taking by the Company of a record of the holders of Common  Stock (or
any shares of stock or other securities which may be issuable upon the exercise
of this Warrant) for the purpose of determining the holders thereof who are
entitled to receive any dividend or other

 

4

 

distribution, the Company shall notify Holder
in writing of such record date at least twenty (20) days prior to the date
specified therein.

 

6.4           When Adjustments To Be Made.  No adjustment in the Exercise Price shall be
required by this Section 6 if such adjustment either by itself or with other
adjustments not previously made would require an increase or decrease of less
than one percent (1 %) in such price. Any adjustment representing a change of
less than such minimum amount which is postponed shall be carried forward and
made as soon as such adjustment, together with other adjustments required by
this Section 6 and not previously made, would result in a minimum adjustment.
Notwithstanding the foregoing, any adjustment carried forward shall be made no
later than ten (10) business days prior to the Expiration Date. All
calculations under this Section 6.4 shall be made to the nearest cent. For the
purpose of any adjustment, any specified event shall be deemed to have occurred
at the close of business on the date of its occurrence.

 

6.5           Certain Other Events.  If any change in the outstanding Common
Stock (or any shares of stock or other securities which may be issuable upon
the exercise of this Warrant) or any other event occurs as to which the other
provisions of this Section 6 are not strictly applicable or if strictly
applicable would not fairly protect the purchase rights of the Holder of the
Warrant in accordance with such provisions, then the Board shall make an
adjustment in the number and class of shares available under this Warrant, the
Exercise Price or the application of such provisions, so as to protect such
purchase rights as aforesaid. The adjustment shall be such as will give the
Holder, upon exercise of this Warrant, the same aggregate Exercise Price and
the same total number, class and kind of shares as the Holder would have owned
had this Warrant been exercised prior to the event and had the Holder continued
to hold such shares until after the event requiring adjustment.

 

7.             Replacement of Warrants.  On receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of such Warrant, the Company at its
expense will execute and deliver to the Holder, in lieu thereof, a new warrant
of like tenor.

 

8.             No Rights or Liability as a
Stockholder.  This Warrant does not
entitle the Holder hereof to any voting rights or other rights as a stockholder
of the Company. No provisions hereof, in the absence of affirmative action by
the Holder to purchase Common Stock, and no enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the Holder as a
stockholder of the Company.

 

 

[REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK]

 

5

 

IN WITNESS
WHEREOF, the undersigned have caused this Warrant to be executed by its
officers thereunto duly authorized.

 

	
   

  	
  DIGIRAD
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
						

 

 

[SIGNATURE PAGE TO WARRANT TO PURCHASE COMMON STOCK OF DIGIRAD

CORPORATION]

 

 

SCHEDULE 1

 

FORM OF SUBSCRIPTION

 

(To be signed only on exercise of Warrant)

 

To:          Digirad Corporation

 

The
undersigned, the holder of the Warrant attached hereto, hereby irrevocably
elects to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder,
                *
shares of common stock of Digirad Corporation, and herewith makes payment of
$                   
therefor, and requests that the certificates for such shares be issued in the
name of, and delivered to
                                      ,
whose address is
                                      

 

 

	
   

  	
   

  	
   

  
	
   

  	
  (Signature
  must conform in all respects to

  name of the Holder as specified on the face

  of the Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Print Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
					

 

 

* Insert here
the number of shares as to which the Warrant is being exercised.EXHIBIT 10.32

 

***
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT (INDICATED BY
ASTERISKS) HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER 17
C.F.R. SECTIONS 200.80(B)(4), 200.83 AND 230.406.

 

THIS
WARRANT AND THE COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF (COLLECTIVELY,
THE “SECURITIES”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
UNDER THE ACT WITH RESPECT TO THE SECURITIES OR DELIVERY TO THE COMPANY OF AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY THAT SUCH OFFER,
SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE ACT OR
UNLESS SOLD IN FULL COMPLIANCE WITH RULE 144 UNDER THE ACT.

 

WARRANT TO PURCHASE
COMMON STOCK

 

OF

 

DIGIRAD CORPORATION

 

	
  MWC
  -            

  	
   

  	
  Date of Issuance
  – November 13, 2002

  

 

 

Void after
November 13, 2007

 

Digirad Corporation, a Delaware corporation (the “Company”),
hereby certifies that, for value received
                                      
(including any successors and assigns, the “Holder”), is entitled, subject to the
terms set forth below, to purchase from the Company at any time or from time to
time, before 5:00 PM, Pacific time on November 13, 2007 (the “Expiration
Date”) up to   ***    shares of
Common Stock of the Company (the “Warrant Shares”), subject to adjustment as
provided herein.  The purchase price per
share of such Common Stock upon exercise of this Warrant shall be $ ***  (the “Exercise Price”), subject to adjustment as
provided herein.

 

1.             Exercise
Period.  Subject to Section 2.2
herein, this Warrant may be exercised by the Holder at any time or from time to
time after the Date of Issuance noted above but before 5:00 PM, Pacific time on
the Expiration Date (the “Exercise Period”).

 

2.             Exercise of
Warrant; Number of Warrant Shares; Termination.

 

2.1           Exercise
of Warrant; Partial Exercise.  This
Warrant may be exercised in full or in part by the Holder with respect to any
or all of the Warrant Shares by surrender of this Warrant, together with the
form of subscription attached hereto as Schedule 1, duly executed by the
Holder, to the Company at its principal office, accompanied by payment, in cash
or by certified or official bank check payable to the order of the Company, of
the aggregate Exercise Price for the Warrant Shares to be purchased hereunder.  For any partial exercise hereof, the Holder
shall designate in a notice of exercise or net issue election notice that
number of shares of Common Stock that he wishes to purchase.  On any such partial exercise, the Company at
its

 

***    Portions of this page have been omitted
pursuant to a request for Confidential Treatment and filed separately with the
commission.

 

 

expense shall forthwith issue and deliver to the Holder a new warrant
of like tenor, in the name of the Holder, which shall be exercisable for such
number of shares of Common Stock represented by this Warrant which have not
been purchased upon such exercise.

 

2.2           Termination
of the Warrant Upon a Corporate Transaction.  Immediately following the occurrence of a Corporate Transaction,
this Warrant shall terminate and cease to be outstanding, provided that written
notice has been given to the Holder at least 20 days prior to the occurrence of
the Corporate Transaction.  For the
purposes of this Warrant, a “Corporate Transaction” shall mean: (i) a merger
or consolidation in which securities possessing more than fifty percent (50%)
of the total combined voting power of the Company’s outstanding securities are
transferred to a person or persons different from the persons holding those
securities immediately prior to such transaction; or (ii) the sale,
transfer or other disposition of all or substantially all of the Company’s
assets in complete liquidation or dissolution of the Company.

 

3.             Net Issuance.

 

3.1           Right
to Convert.  The Holder shall have
the right to convert this Warrant or any portion thereof (the “Conversion
Right”) into shares of Common Stock as provided in this Section 3 at
any time or from time to time during the Exercise Period.  Upon exercise of the Conversion Right with
respect to a particular number of Warrant Shares (the “Converted Warrant  Shares”),
the Company shall deliver to the Holder (without payment by the Holder of any
exercise price or any cash or other consideration) that number of shares of
fully paid and nonassessable shares of Common Stock computed using the
following formula:

 

	
  X

  	
  =

  	
  Y (A - B)

  	
   

  
	
   

  	
   

  	
  A

  	
   

  

 

	
  Where

  	
   

  	
  X

  	
  =

  	
  the number of shares of
  Common Stock to be delivered to the Holder

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Y

  	
  =

  	
  the number of Converted
  Warrant Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A

  	
  =

  	
  the fair market value
  of one share of the Company’s Common Stock on the Conversion Date (as defined
  below)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B

  	
  =

  	
  the Exercise Price (as
  adjusted through the Conversion Date)

  

 

The Conversion Right may only be exercised with
respect to a whole number of Warrant Shares. 
No fractional shares shall be issuable upon exercise of the Conversion
Right, and if the number of shares to be issued determined in accordance with
the foregoing formula is other than a whole number, the Company shall pay to
the Holder an amount in cash equal to the fair market value of the resulting
fractional share on the Conversion Date (as defined below).  Shares issued pursuant to the Conversion
Right shall be treated as if they were issued upon the exercise of this
Warrant.

 

3.2           Method
of Exercise.  The Conversion Right
may be exercised by the Holder by the surrender of this Warrant at the
principal office of the Company together with a written statement specifying
that the Holder thereby intends to exercise the Conversion Right and indicating
the total number of shares under this Warrant that the Holder is exercising
through the Conversion Right.  Such
conversion shall be effective upon receipt by the Company of this

 

2

 

Warrant together with the aforesaid written statement, or on such later
date as is specified therein (the “Conversion Date”) and at such time the
person in whose name any certificate for shares of Common Stock shall be
issuable upon such exercise shall be deemed to be the record holder of such
Common Stock for all purposes. 
Certificates for the shares issuable upon exercise of the Conversion
Right and, if applicable, a new warrant evidencing the balance of the shares
remaining subject to the Warrant, shall be issued as of the Conversion Date and
shall be delivered to the Holder promptly following the Conversion Date.

 

3.3           Determination
of Fair Market Value.  For purposes
of this Section 3, fair market value of a share of Common Stock on the
Conversion Date shall mean:

 

(1)           If traded on a stock exchange, the fair market value
of the Common Stock shall be deemed to be the average of the closing selling
prices of the Common Stock on the stock exchange determined by the Board of
Directors of the Company (the “Board”) to be the primary market for the
Common Stock over the ten (10) trading day period (or such shorter period
immediately following the closing of the Company’s initial public offering)
ending on the date prior to the Conversion Date, as such prices are officially
quoted in the composite tape of transactions on such exchange;

 

(2)           If traded over-the-counter, the fair market value of
the Common Stock shall be deemed to be the average of the closing bid prices
(or, if such information is available, the closing selling prices) of the
Common Stock over the ten (10) trading day period (or such shorter period
immediately following the closing of the Company’s initial public offering)
ending on the date prior to the Conversion Date, as such prices are reported by
the National Association of Securities Dealers through its NASDAQ system or any
successor system; and

 

(3)           If there is no public market for the Common Stock, the
fair market value of the Common Stock shall be determined in good faith by the
Board.

 

4.             When
Exercise Effective.  The exercise of
this Warrant pursuant to Section 2 shall be deemed to have been effected
immediately prior to the close of business on the business day on which this
Warrant is surrendered to the Company as provided in Section 2.1, or on
such later date as is specified in the form of subscription, and at such time
the person in whose name any certificate for shares of Common Stock shall be
issuable upon such exercise, as provided in Section 5, shall be deemed to
be the record holder of such Common Stock for all purposes.

 

5.             Delivery
on Exercise.  As soon as practicable
after the exercise of this Warrant in full or in part pursuant to Section 2,
the Company at its expense (including the payment by it of any applicable issue
taxes) will cause to be issued in the name of and delivered to the Holder, or
as the Holder may direct, a certificate or certificates for the number of fully
paid and nonassessable full shares of Common Stock to which the Holder shall be
entitled on such exercise, together with cash, in lieu of any fraction of a
share, equal to such fraction of the current market value of one full share of
Common Stock as determined pursuant to Section 3.3.

 

6.             Adjustments.  The number and kind of shares of Common
Stock (or any shares of stock or other securities which may be) issuable upon
the exercise of this Warrant and the

 

3

 

Exercise Price shall be subject to adjustment from time to time upon
the happening of certain events, as follows:

 

6.1           Dividends,
Distributions, Stock Splits or Combinations.  If the Company shall at any time or from time to time after the
date hereof (a) make or issue, or fix a record date for the determination of
holders of Common Stock (or any shares of stock or other securities which may
be issuable upon the exercise of this Warrant) entitled to receive, a dividend
or other distribution payable in additional shares of common or preferred stock
(as the case may be), (b) subdivide its outstanding shares of Common Stock (or
any shares of stock or other securities which may be issuable upon the exercise
of this Warrant) into a larger number of shares of Common Stock (or any shares
of stock or other securities which may be issuable upon the exercise of this
Warrant) or (c) combine its outstanding shares of Common Stock (or any shares
of stock or other securities which may be issuable upon the exercise of this
Warrant) into a smaller number of shares of Common Stock (or any shares of
stock or other securities which may be issuable upon the exercise of this Warrant),
then and in each such event the Exercise Price then in effect and the number of
shares issuable upon exercise of this Warrant shall be appropriately adjusted.

 

6.2           Reclassification
or Reorganization.  If the Common
Stock (or any shares of stock or other securities which may be) issuable upon
the exercise of this Warrant shall be changed into the same or different number
of shares of any class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of
shares or stock dividend provided for in Section 6.1 above, or pursuant to a
Corporate Transaction), then and in each such event the Holder shall be
entitled to receive upon the exercise of this Warrant the kind and amount of
shares of stock and other securities and property receivable upon such
reorganization, reclassification or other change to which a holder of the
number of shares of Common Stock (or any shares of stock or other securities
which may be) issuable upon the exercise of this Warrant would have received if
this Warrant had been exercised immediately prior to such reorganization,
reclassification or other change, all subject to further adjustment as provided
herein.

 

6.3           Notice
of Adjustments and Record Dates. 
The Company shall promptly notify the Holder in writing of each
adjustment or readjustment of the Exercise Price and the number of shares of
Common Stock (or any shares of stock or other securities which may be) issuable
upon the exercise of this Warrant.  Such
notice shall state the adjustment or readjustment and show in reasonable detail
the facts on which that adjustment or readjustment is based.  In the event of any taking by the Company of
a record of the holders of Common Stock (or any shares of stock or other
securities which may be issuable upon the exercise of this Warrant) for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, the Company shall notify Holder in writing of
such record date at least twenty (20) days prior to the date specified therein.

 

6.4           When
Adjustments To Be Made.  No
adjustment in the Exercise Price shall be required by this Section 6 if such
adjustment either by itself or with other adjustments not previously made would
require an increase or decrease of less than one percent (1%) in such
price.  Any adjustment representing a
change of less than such minimum amount which is postponed shall be carried
forward and made as soon as such adjustment, together with other

 

4

 

adjustments required by this Section 6 and not previously made, would
result in a minimum adjustment. 
Notwithstanding the foregoing, any adjustment carried forward shall be
made no later than ten (10) business days prior to the Expiration Date.  All calculations under this Section 6.4
shall be made to the nearest cent.  For
the purpose of any adjustment, any specified event shall be deemed to have
occurred at the close of business on the date of its occurrence.

 

6.5           Certain
Other Events.  If any change in the
outstanding Common Stock (or any shares of stock or other securities which may
be issuable upon the exercise of this Warrant) or any other event occurs as to
which the other provisions of this Section 6 are not strictly applicable or if
strictly applicable would not fairly protect the purchase rights of the Holder
of the Warrant in accordance with such provisions, then the Board shall make an
adjustment in the number and class of shares available under this Warrant, the
Exercise Price or the application of such provisions, so as to protect such
purchase rights as aforesaid.  The
adjustment shall be such as will give the Holder, upon exercise of this
Warrant, the same aggregate Exercise Price and the same total number, class and
kind of shares as the Holder would have owned had this Warrant been exercised
prior to the event and had the Holder continued to hold such shares until after
the event requiring adjustment.

 

7.             Replacement
of Warrants.  On receipt by the
Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of any such loss,
theft or destruction of this Warrant, on delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in the case of
any such mutilation, on surrender and cancellation of such Warrant, the Company
at its expense will execute and deliver to the Holder, in lieu thereof, a new
warrant of like tenor.

 

8.             No
Rights or Liability as a Stockholder. 
This Warrant does not entitle the Holder hereof to any voting rights or
other rights as a stockholder of the Company. 
No provisions hereof, in the absence of affirmative action by the Holder
to purchase Common Stock, and no enumeration herein of the rights or privileges
of the Holder, shall give rise to any liability of the Holder as a stockholder
of the Company.

 

9.             Representations of
Holder.

 

The Holder hereby represents, covenants and
acknowledges to the Company that:

 

(1)           this Warrant and the Warrant Shares are “restricted
securities” as such term is used in the rules and regulations under the
Securities Act of 1933, as amended (the “Act”) and that this Warrant and the
Warrant Shares have not been registered under the Act and the Company has no
present intention of registering the Securities under the Act or any state
securities law, and that this Warrant and the Warrant Shares must be held
indefinitely unless a transfer can be made pursuant to appropriate exemptions;

 

(2)           the Holder has read, and fully understands, the terms
of this Warrant set forth on its face and the attachments hereto, including the
restrictions on transfer contained herein;

 

(3)           the Holder is purchasing for investment for his own
account and not with a view to or for sale in connection with any distribution
of this Warrant or the Warrant

 

5

 

Shares and he has no intention of selling such securities in a public
distribution in violation of the federal securities laws or any applicable
state securities laws;

 

(4)           the Holder is an “accredited investor” within the
meaning of paragraph (a) of Rule 501 of Regulation D promulgated by the
Securities and Exchange Commission (the “Commission”); and

 

(5)           the Holder (i) has received all information the Holder
has requested from the Company and considers necessary or appropriate for
deciding whether to acquire this Warrant and the Warrant Shares, (ii) has had
an opportunity to ask questions and receive answers from the Company regarding
the terms and conditions of this Warrant and the Warrant Shares and to obtain
any additional information necessary to verify the accuracy of the information
given to the Holder, and (iii) has such knowledge and experience in financial
and business matters such that the Holder is capable of evaluating the merits
and risks of the investment in this Warrant and the Warrant Shares.

 

10.           Market
Stand-Off Agreement.  The Holder
hereby agrees that, during the period of duration specified by the Company and
an underwriter of Common Stock or other securities of the Company, following
the effective date of a registration statement of the Company filed under the
Act, he shall not, to the extent requested by the Company and such underwriter,
directly or indirectly sell, offer to sell, contract to sell (including,
without limitation, any short sale), grant any option to purchase or otherwise
transfer or dispose of (other than to donees who agree to be similarly bound)
any securities of the Company held by it at any time during such period except
Common Stock included in such registration; provided, however, that:

 

(1)           Such agreement shall not exceed 180 days for the first
such registration statement of the Company which covers Common Stock (or other
securities) to be sold on its behalf to the public in an underwritten offering;

 

(2)           Such agreement shall not exceed ninety (90) days for
any subsequent registration statement of the Company which covers Common Stock
(or other securities) to be sold on its behalf to the public in an underwritten
offering; and

 

(3)           All directors and officers of the Company as well as
all holders of one percent (1%) or more of the Company’s outstanding capital
stock are similarly bound.

 

In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to securities held
by the Holder (and the shares or securities of every other person subject to
the foregoing restriction) until the end of such period.

 

11.           Miscellaneous.

 

11.1         Transfer
of Warrant.  This Warrant shall not
be transferable or assignable by the Holder without the express written consent
of the Company.

 

11.2         Notices.  Any notice required or permitted under this
Warrant shall be in writing and shall be hand delivered, sent by facsimile or
other electronic medium, by registered or certified mail, postage prepaid, or
by nationally recognized overnight carrier to the Company

 

6

 

or to the Holder at the address set forth below on the signature page
to this Warrant or to such other address as may be furnished in writing to the
other party hereto.  Such notice shall
be deemed effectively given (i) if hand delivered, upon delivery, (ii) if sent
by facsimile or other electronic medium, when confirmed, if sent during the
normal business hours of the recipient (if not sent during the normal business
hours of the recipient, then on the next business day), (iii) if sent by mail,
five days after having been sent, or (iv) if sent by nationally recognized overnight
courier, one day after deposit with such courier.

 

11.3         Attorneys’
Fees.  If any action at law or in
equity is necessary to enforce or interpret the terms of this Warrant, the
prevailing party shall be entitled to reasonable attorneys’ fees, costs and
disbursements in addition to any other relief to which such party may be
entitled.

 

11.4         Amendments
and Waivers.  Any term of this
Warrant may be amended and the observance of any other term of this Warrant may
be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the Holder.

 

11.5         Severability.  If one or more provisions of this Warrant
are held to be unenforceable under applicable law, such provision shall be excluded
from this Warrant and the balance of the Warrant shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.

 

11.6         Governing
Law.  This Warrant shall be governed
by and construed and enforced in accordance with the laws of the State of
California as applied to agreements among California residents entered into and
to be performed entirely within California.

 

 

[REMAINDER OF THIS
PAGE INTENTIONALLY LEFT BLANK]

 

7

 

IN WITNESS WHEREOF, the undersigned have caused this
Warrant to be executed by its officers thereunto duly authorized.

 

	
  COMPANY:

  	
  DIGIRAD CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	 

	
   

  	
   

  	
  David M. Sheehan

  
	
   

  	
   

  	
  President and
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HOLDER:

  	
   

  	
   

  

 

 

[COUNTERPART SIGNATURE
PAGE TO WARRANT TO PURCHASE COMMON STOCK

OF DIGIRAD CORPORATION]

 

 

SCHEDULE 1

 

FORM OF SUBSCRIPTION

 

(To be signed only on exercise of Warrant)

 

To:          Digirad
Corporation

 

The undersigned, the
holder of the Warrant attached hereto, hereby irrevocably elects to exercise
the purchase rights represented by such Warrant for, and to purchase
thereunder,
              *
shares of common stock of Digirad Corporation, and herewith makes payment of
$                    
therefor, and requests that the certificates for such shares be issued in the
name of, and delivered to
                                        ,
whose address is
                                                          .

 

 

	
   

  	
   

  
	
   

  	
  (Signature must conform in all respects to name of
  the Holder as specified on the face of the Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Print Name)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Address)

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
				

 

 

* Insert here the number of shares as to which the Warrant is being
exercised.

 

 

SCHEDULE OF INVESTORS

 

WARRANTHOLDER

 

Stephen A. McAdams

 

John C. Whitham

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