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                                                                   EXHIBIT 10.18

                               DIGIRAD CORPORATION

                   SERIES F PREFERRED STOCK PURCHASE AGREEMENT

    THIS SERIES F PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is
made and entered into as of August 23, 2001 by and among Digirad Corporation,
a Delaware corporation (the "Company"), and each of the persons listed on
Schedule 1 (each of which persons is referred to herein as an "Investor," and
collectively, the "Investors").

    THE PARTIES HEREBY AGREE AS FOLLOWS:

1.  PURCHASE AND SALE OF SERIES F PREFERRED STOCK.

    1.1   SALE AND ISSUANCE OF SERIES F PREFERRED STOCK.

          (a) The Company shall adopt and file with the Secretary of State of
Delaware on or before the Closing (as defined below) the Amended and Restated
Certificate of Incorporation in the form attached hereto as EXHIBIT A (the
"Restated Certificate").

          (b) Subject to the terms and conditions of this Agreement, each
Investor agrees to purchase as applicable at the Closing, and the Company
agrees to sell and issue to each Investor at the Closing, that number of
shares of the Company's Series F Preferred Stock set forth opposite such
Investor's name on Schedule 1 for the purchase price of $3.25 per share.

    1.2   CLOSING. The purchase and sale of the Series F Preferred Stock
shall take place at the offices of Brobeck, Phleger & Harrison LLP, San
Diego, California, at 10:00 a.m., on August 23, 2001, or at such other time
and place as the Company and Investors acquiring more than half the aggregate
principal amount of the Series F Preferred Stock sold pursuant hereto shall
mutually agree, in writing (which time and place are designated as the
"Closing"). At the Closing, the Company shall deliver to each Investor a
certificate representing the shares of Series F Preferred Stock that such
Investor is purchasing at the Closing (as set forth on SCHEDULE 1) against
payment of the purchase price therefor by check or wire transfer or such
other form of payment as shall be mutually agreed upon by such Investor and
the Company.

2.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

    The Company hereby represents and warrants to each Investor that, except
as set forth on a Schedule of Exceptions furnished to each Investor and
attached hereto as EXHIBIT B, specifically identifying the relevant
subparagraph(s) hereof, which exceptions shall be deemed to be
representations and warranties as if made hereunder:

    2.1   ORGANIZATION; GOOD STANDING; QUALIFICATION. The Company and each of
Digirad Imaging Solutions, Inc. and Digirad Imaging Services, Inc. (each, a
"Subsidiary" and

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collectively, the "Subsidiaries") is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware, has
all requisite corporate power and authority to own and operate its respective
properties and assets and to carry on its respective business as now
conducted and as proposed to be conducted. The Company has all requisite
corporate power and authority to execute and deliver this Agreement, the
Amended and Restated Investors' Rights Agreement, attached hereto as EXHIBIT
C (the "Investors' Rights Agreement") and any other agreement to which the
Company is a party, the execution and delivery of which is contemplated
hereby, to issue and sell the Series F Preferred Stock and the Common Stock
issuable upon conversion thereof or upon conversion of the Series F Preferred
Stock, and to carry out the provisions of this Agreement and the Investors'
Rights Agreement. The Company and each Subsidiary is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure to so qualify would have a material adverse effect on its respective
business, properties, prospects, or financial condition.

    2.2   AUTHORIZATION. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement, the Investors' Rights Agreement and
any other agreement to which the Company is a party, the execution and
delivery of which is contemplated hereby, the performance of all obligations
of the Company hereunder and thereunder at the Closing, and the
authorization, issuance (or reservation for issuance), sale, and delivery of
the Series F Preferred Stock and the Common Stock issuable upon conversion
thereof has been taken or will be taken prior to the Closing. This Agreement
and the Investors' Rights Agreement constitute valid and legally binding
obligations of the Company, enforceable in accordance with their respective
terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
the enforcement of creditors' rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies, and (iii) to the extent the indemnification
provisions contained therein may be limited by applicable federal or state
securities laws.

    2.3   VALID ISSUANCE OF PREFERRED AND COMMON STOCK. The Series F
Preferred Stock being purchased by the Investors hereunder, when issued, paid
for and delivered in accordance with the terms of this Agreement for the
consideration expressed herein, will be duly and validly issued, and will be
free of restrictions on transfer other than restrictions on transfer under
this Agreement and the Investors' Rights Agreement and under applicable state
and federal securities laws. The Common Stock issuable upon conversion of the
Series F Preferred Stock purchased under this Agreement has been duly and
validly reserved for issuance and, when issued and paid for in accordance
with the terms of the Restated Certificate, will be duly and validly issued,
fully paid, and nonassessable and will be free of restrictions on transfer
other than restrictions on transfer set forth in this Agreement and the
Investors' Rights Agreement and under applicable state and federal securities
laws.

    2.4   GOVERNMENTAL CONSENTS. No consent, approval, qualification, order
or authorization of, or filing with, any local, state, or federal
governmental authority is required on the part of the Company in connection
with the Company's valid execution, delivery, or

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performance of this Agreement or the Investors' Rights Agreement, the offer,
sale or issuance of the Series F Preferred Stock or Common Stock upon
conversion of the Series F Preferred Stock, except (i) the filing of the
Restated Certificate with the Secretary of State of the State of Delaware,
(ii) such filings as have been made prior to the Closing, and (iii) any
notices of sale required to be filed with the Securities and Exchange
Commission under Regulation D of the Securities Act of 1933, as amended (the
"Securities Act"), or such post closing filings as may be required under
applicable state securities laws, which will be timely filed within the
applicable periods therefor.

    2.5   CAPITALIZATION AND VOTING RIGHTS. The authorized capital of the
Company consists, or will consist prior to the Closing, of:

          (i) PREFERRED STOCK. Thirty Million Three Hundred Twenty One
Thousand One Hundred Eight 30,321,108 shares of Preferred Stock (the
"Preferred Stock"), of which 2,250,000 shares have been designated Series A
Preferred Stock, all of which are issued and outstanding, 2,281,000 shares
have been designated Series B Preferred Stock, all of which are issued and
outstanding, 4,800,000 shares have been designated Series C Preferred Stock,
all of which are issued and outstanding, 8,668,140 shares have been
designated Series D Preferred Stock, all of which are issued and outstanding,
9,583,506 shares have been designated Series E Preferred Stock, 9,130,428 of
which are issued and outstanding, and 2,738,462 shares have been designated
Series F Preferred Stock, up to all of which may be issued pursuant to this
Agreement. The rights, privileges and preferences of the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock, Series E Preferred Stock and Series F Preferred Stock are as stated in
the Restated Certificate. Each of the outstanding shares of Preferred Stock
is currently convertible into one share of Common Stock pursuant to the terms
of the Restated Certificate.

          (ii) COMMON STOCK. Forty Two Million Seven Hundred Thirty Eight
Thousand Four Hundred Sixty Two (42,738,462) shares of Common Stock ("Common
Stock"), of which 4,586,082 shares are issued and outstanding and up to
2,738,462 of which shall be validly reserved for issuance upon conversion of
the Series F Preferred Stock issued pursuant to this Agreement.

          (iii) The outstanding shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock and Common Stock have been issued in accordance with the
registration or qualification provisions of the Securities Act and any
relevant state securities laws or pursuant to valid exemptions therefrom.

          (iv) Except for (A) the rights created under this Agreement, (B)
the conversion privileges of the Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred
Stock and Series F Preferred Stock, (C) the right of first offer set forth in
Section 1.2 of the Investors' Rights Agreement, (D) currently outstanding
options granted to employees, directors, consultants or advisors of the
Company under stock option and restricted stock purchase agreements approved
by the Board of

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Directors commencing as of May 1994 (each, an "Option," and collectively,
"Options") to purchase 5,952,426 shares of Common Stock and (E) currently
outstanding warrants to purchase 403,078 shares of Series E Preferred Stock
and 100,500 shares of Common Stock, there are no outstanding options,
warrants, rights (including conversion or preemptive rights and rights of
first refusal), or agreements for the purchase or acquisition from the
Company of any shares of its capital stock. Except for the voting rights of
the holders of Preferred Stock as provided for in the Restated Certificate,
the obligations provided for in that certain Amended and Restated Voting
Agreement dated August 8, 1997 and that certain Amended and Restated Series E
Voting Agreement dated November 10, 2000, as amended, and except pursuant to
this Agreement and the Investors' Rights Agreement, the Company is not a
party or subject to any agreement or understanding, and, to the best of the
Company's knowledge, there is no agreement or understanding between any other
persons that affects or relates to the voting or giving of written consents
with respect to any security or the voting by a director of the Company.

    2.6   SUBSIDIARIES. Section 2.6 of the Schedule of Exceptions contains a
true and complete list of each corporation, limited liability company,
association or other business entity in which the Company owns or controls,
directly or indirectly, any interest. The Company is not a participant in any
joint venture, partnership, or similar arrangement.

    2.7   CONTRACTS AND OTHER COMMITMENTS.

          (a) The Company does not have, and none of the Subsidiaries has,
any contract, agreement, lease, commitment, or proposed transaction, written
or oral, absolute or contingent, to which the Company or any Subsidiary is a
party or by which it is bound other than (i) contracts for the purchase of
goods and services that were entered into in the ordinary course of business
and that do not involve more than $100,000 each, and do not extend for more
than one (1) year beyond the date hereof, (ii) sales or lease contracts
entered into in the ordinary course of business, and (iii) contracts
terminable at will by the Company or the applicable Subsidiary on not more
than thirty (30) days' notice without cost or liability to the Company or
such applicable Subsidiary and that do not involve any employment or
consulting arrangement and are not material to the conduct of the business of
the Company or the Subsidiaries. For the purpose of this paragraph,
employment and consulting contracts and contracts with labor unions, and
license agreements and any other agreements relating to the acquisition or
disposition of any interest in the respective technology of the Company and
the Subsidiaries (other than standard end-user license agreements) shall not
be considered to be contracts entered into in the ordinary course of business.

          (b) The contracts set forth on the Schedule of Exceptions are
defined herein as the "Material Contracts." Copies of all Material Contracts
have been made available to the Investors and their counsel. Each Material
Contract is in full force and effect and will continue in full force and
effect following the consummation of the transactions contemplated by this
Agreement. The Company and, as applicable, each Subsidiary has fulfilled and
performed in all material respects its obligations under each of the Material
Contracts required to be performed prior to the date hereof, and to the best
knowledge of the Company and the Subsidiaries neither the Company nor any
Subsidiary is alleged to be in breach or default under, nor to the best

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knowledge of the Company and the Subsidiaries is there alleged to be any
basis for termination of, any of the Material Contracts. To the best
knowledge of the Company and the Subsidiaries, no other party to any of the
Material Contracts has materially breached or defaulted thereunder, and no
event has occurred and no condition or state of facts exists which, with the
passage of time or the giving of notice or both, would constitute such a
default or breach by the Company, any of the Subsidiaries, or by any such
other party.

    2.8   RELATED-PARTY TRANSACTIONS. No employee, officer, or director of
the Company or the Subsidiaries or member of his or her immediate family is
indebted to the Company or the Subsidiaries, nor is the Company or any
Subsidiary indebted (or committed to make loans or extend or guarantee
credit) to any of them. To the knowledge of the Company and the Subsidiaries,
none of such persons has any direct or indirect ownership interest in any
firm or corporation with which the Company or any Subsidiary is affiliated or
with which the Company or any Subsidiary has a business relationship, or any
firm or corporation that competes with the Company or any Subsidiary, except
that employees, officers, or directors of the Company and the Subsidiaries
and members of their immediate families may own stock in publicly traded
companies that may compete with the Company. To the knowledge of the Company
and the Subsidiaries, no officer or director of the Company or the
Subsidiaries or any member of their immediate families is, directly or
indirectly, interested in any Material Contract with the Company or the
Subsidiaries.

    2.9   REGISTRATION RIGHTS. Except as provided in the Investors' Rights
Agreement, the Company is not obligated to register under the Securities Act
any of its presently outstanding securities or any of its securities that may
subsequently be issued, and the Company has not granted or agreed to grant
any registration rights, including piggyback registration rights, to any
person or entity.

    2.10  COMPLIANCE WITH LAW; PERMITS; HEALTH-CARE REGULATORY MATTERS.

          (a) The Company and each Subsidiary has since inception and
currently conducts its respective business in accordance with all laws,
rules, regulations, and governmental orders applicable to the Company and
each Subsidiary or any of their respective assets or businesses. Neither the
Company nor any Subsidiary has received any notice alleging any default or
violation of any such law, rule, regulation or governmental order or has
knowledge of any events or conditions which may constitute potential defaults
or violations.

          (b) The Company and each Subsidiary has, and all professional
employees or agents of each of the Company and its Subsidiaries have, all
licenses, franchises, permits, authorizations, including certificates of
need, or approvals from all Governmental Authorities required for the conduct
of the business of each of the Company and its Subsidiaries as now being
conducted by them, the lack of which could materially and adversely affect
the respective business, properties, prospects, or financial condition of the
Company or any Subsidiary and can obtain, without undue burden or expense,
any similar authority for the conduct of its respective business as planned
to be conducted. Neither the Company nor any Subsidiary or the

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professional employees or agents of either is in default in any material
respect under any of such franchises, permits, licenses or other similar
authority.

          (c) FRAUD AND ABUSE MATTERS. Neither the Company nor any
Subsidiary, nor the officers, directors, employees or agents of any of the
Company or any Subsidiary, have engaged in any activities which are
prohibited, or are cause for criminal or civil penalties or mandatory or
permissive exclusion from Medicare, Medicaid or any other Federal Health Care
Program, under ss.ss. 1320a-7, 1320a-7a, 1320a-7b, or 1395nn of Title 42 of
the United States Code, the Federal Employees Health Benefits program
statute, or the regulations promulgated pursuant to such statutes or
regulations or related state or local statutes or which are prohibited by any
private accrediting organization from which the Company or any its
Subsidiaries seeks accreditation or by generally recognized professional
standards of care or conduct, including but not limited to the following
activities:

                   (i) knowingly and willfully making or causing to be made a
false statement or representation of a material fact in any application for
any benefit or payment;

                   (ii) knowingly and willfully making or causing to be made
any false statement or representation of a material fact for use in
determining rights to any benefit or payment;

                   (iii) presenting or causing to be presented a claim for
reimbursement under Medicare, Medicaid or any other Federal Health Care
Program that is (i) for an item or service that the person presenting or
causing to be presented knows or should know was not provided as claimed, or
(ii) for an item or service and the person presenting knows or should know
that the claim is false or fraudulent;

                   (iv) knowingly and willfully offering, paying, soliciting
or receiving any remuneration (including any kickback, bribe, or rebate),
directly or indirectly, overtly or covertly, in cash or in kind (i) in return
for referring, or to induce the referral of, an individual to a person for
the furnishing or arranging for the furnishing of any item or service for
which payment may be made in whole or in part by Medicare, Medicaid, or any
other Federal Health Care Program, or (iii) in return for, or to induce, the
purchase, lease, or order, or the arranging for or recommending of the
purchase, lease, or order, of any good, facility, service, or item for which
payment may be made in whole or in part by Medicare, Medicaid or any other
Federal Health Care Program; or

                   (v) knowingly and willfully making or causing to be made
or inducing or seeking to induce the making of any false statement or
representation (or omitting to state a material fact required to be stated
therein or necessary to make the statements contained therein not misleading)
or a material fact with respect to (i) the conditions or operations of a
facility in order that the facility may qualify for Medicare, Medicaid or any
other Federal Health Care Program certification, or (ii) information required
to be provided under SSA ss. 1124A.

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          (d) MEDICARE/MEDICAID PARTICIPATION. Neither the Company nor to the
best knowledge of the Company (without having performed any investigation or
due diligence) any other person who after the Closing will have a direct or
indirect ownership interest (as those terms are defined in 42 C.F.R. ss.
1001.1001(a)(2)) in the Company or any Subsidiary, or who will have an
ownership or control interest (as defined in SSA ss. 1124(a)(3) or any
regulations promulgated thereunder) in the Company or any Subsidiary, or who
will be an officer, director, agent (as defined in 42 C.F.R. ss.
1001.1001(a)(2)), or managing employee (as defined in SSA ss. 1126(b)) of the
Company or any Subsidiary has, as of the date of this Agreement: (1) had a
civil monetary penalty assessed against it under SSA ss. 1128A; (2) been
excluded from participation under Medicare, Medicaid or any other Federal
Health Care Program; (3) been convicted (as that term is defined in 42 C.F.R.
ss. 1001.2) of any of the following categories of offenses as described in
SSA ss. 1128(a) and (b)(1), (2), (3):

                   (i) criminal offenses relating to the delivery of an item
or service under Medicare, Medicaid or any other Federal Health Care Program;

                   (ii) criminal offenses under federal or state law relating
to patient neglect or abuse in connection with the delivery of a health care
item or service;

                   (iii) criminal offenses under federal or state law
relating to fraud, theft, embezzlement, breach of fiduciary responsibility,
or other financial misconduct in connection with the delivery of a health
care item or service or with respect to any act or omission in a program
operated by or financed in whole or in part by any federal, state or local
government agency;

                   (iv) federal or state laws relating to the interference
with or obstruction of any investigation into any criminal offense described
in (a) through (c) above; or

                   (v) criminal offenses under federal or state law relating
to the unlawful manufacture, distribution, prescription or dispensing of a
controlled substance.

          (e) DEFINITIONS. For purposes of this section 2.10, the following
definitions apply:

                   (i) "Federal Health Care Program" has the meaning set
forth in SSA Section 1128B(f).

                   (ii) "Governmental Authority" means any branch, component,
agency or instrumentality of federal, state or local government.

                   (iii) "SSA" means the federal Social Security Act and all
regulations promulgated pursuant thereto.

    2.11  COMPLIANCE WITH OTHER INSTRUMENTS. Neither the Company nor any
Subsidiary is in violation or default of any provision of its respective
Restated Certificate or Bylaws or in any material respect of any provision of
any mortgage, indenture, agreement, instrument, or

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contract to which it is a party or by which it is bound or any federal or
state judgment, order, writ, decree applicable to the Company or the
Subsidiaries. The execution, delivery, and performance by the Company of this
Agreement and the Investors' Rights Agreement, and the consummation of the
transactions contemplated hereby and thereby will not result in any such
violation or be in conflict with or constitute, with or without the passage
of time or the giving of notice, either a default under any such provision or
an event that results in the creation of any lien, charge, or encumbrance
upon any assets of the Company or the Subsidiaries (except as contemplated in
this Agreement and the Investors' Rights Agreement) or the suspension,
revocation, impairment, forfeiture, or nonrenewal of any permit, license,
authorization, or approval applicable to the Company or any of the
Subsidiaries, its respective business or operations, or any of its respective
assets or properties, which suspension, revocation, impairment, forfeiture,
or nonrenewal would be materially adverse to the Company or any of the
Subsidiaries.

    2.12  LITIGATION. There is no action, suit, proceeding, or investigation
pending or currently threatened against the Company that questions the
validity of this Agreement or the Investors' Rights Agreement or the right of
the Company to enter into such agreements, or to consummate the transactions
contemplated hereby or thereby, or that might result, either individually or
in the aggregate, in any material adverse change in the assets, business,
properties, prospects, or financial condition of the Company or the
Subsidiaries, or in any change in the current equity ownership of the Company
or the Subsidiaries. The foregoing includes, without limitation, any action,
suit, proceeding, or investigation pending or currently threatened involving
the prior employment of any of the respective employees of the Company or any
Subsidiary, their use in connection with the business of the Company or any
Subsidiary of any information or techniques allegedly proprietary to any of
their former employers, their obligations under any agreements with prior
employers, or negotiations by the Company or any Subsidiary with potential
backers of, or investors in, the Company or its proposed business. Neither
the Company nor any Subsidiary is a party to, nor to the best of its
respective knowledge, named in any order, writ, injunction, judgment, or
decree of any court, government agency, or instrumentality. There is no
action, suit, or proceeding by the Company or any Subsidiary currently
pending or that the Company or any Subsidiary currently intends to initiate.

    2.13  RETURNS AND COMPLAINTS. Neither the Company nor any Subsidiary has
received customer or beta test participant complaints concerning alleged
defects in its respective products (or the design thereof) that, if true,
would materially adversely affect the assets, business, properties, prospects
or financial condition of the Company or any Subsidiary.

    2.14  DISCLOSURE. The Company has provided each Investor with all the
information reasonably available to it that such Investor has requested for
deciding whether to purchase the Series F Preferred Stock and all information
that the Company believes is reasonably necessary to enable such Investor to
make such decision. Neither this Agreement nor any other written statements
or certificates made or delivered in connection herewith contains any untrue
statement of a material fact or omits to state a material fact necessary to
make the statements herein or therein not misleading.

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    2.15  OFFERING. Subject in part to the truth and accuracy of each
Investor's representations set forth in this Agreement, the offer, sale and
issuance of the Series F Preferred Stock, and the Common Stock issuable upon
conversion of the Series F Preferred Stock, as contemplated by this Agreement
are exempt from the registration requirements of the Securities Act and
applicable state securities laws, and neither the Company nor any authorized
agent acting on its behalf will take any action hereafter that would cause
the loss of such exemption.

    2.16  TITLE TO PROPERTY AND ASSETS; LEASES. Except (i) as reflected in
the Financial Statements (defined in paragraph 2.17), (ii) for liens for
current taxes not yet delinquent, (iii) for liens imposed by law and incurred
in the ordinary course of business for obligations not past due to carriers,
warehousemen, laborers, materialmen and the like, (iv) for liens in respect
of pledges or deposits under workers' compensation laws or similar
legislation or (v) for minor defects in title, none of which, individually or
in the aggregate, materially interferes with the use of such property, the
Company and each Subsidiary owns its respective property and assets free and
clear of all mortgages, liens, claims, and encumbrances. With respect to the
property and assets it leases, the Company and each Subsidiary is in
compliance with such leases and holds a valid leasehold interest free of any
liens, claims, or encumbrances, which would be materially adverse to the
Company or any Subsidiary, subject to clauses (i)-(v) above.

    2.17  FINANCIAL STATEMENTS. The Company has delivered to each Investor
its audited financial statements (balance sheet and profit and loss
statement, statement of stockholders equity and statement of cash flows
including notes thereto) at December 31, 2000, and for the fiscal year then
ended and its unaudited financial statements (balance sheet and profit and
loss statement) as at, and for the six-month period ended June 30, 2001
(collectively, the "Financial Statements"). The Financial Statements have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated except that
unaudited Financial Statements may not contain all footnotes required by
generally accepted accounting principles. The Financial Statements fairly
present the financial condition and operating results of the Company as of
the dates, and for the periods, indicated therein, subject in the case of the
unaudited Financial Statements to normal year-end audit adjustments. Except
as set forth in the Financial Statements, neither the Company nor any
Subsidiary has any liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to June
30, 2001 which are individually not in excess of $50,000 and in the aggregate
not in excess of $200,000 and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required
under generally accepted accounting principles to be reflected in the
Financial Statements, which, in both cases, individually or in the aggregate,
are not material to the financial condition or operating results of the
Company or any Subsidiary. Except as disclosed in the Financial Statements,
neither the Company nor any Subsidiary is a guarantor or indemnitor of any
indebtedness of any other person, firm, partnership, joint venture or
corporation. The Company maintains and will continue to maintain a standard
system of accounting established and administered in accordance with
generally accepted accounting principles.

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    2.18  CHANGES.  Since June 30, 2001, there has not been:

          (a) any change in the assets, liabilities, financial condition, or
operating results of the Company or any Subsidiary from that reflected in the
Financial Statements, except changes in the ordinary course of business that
have not been, in the aggregate, materially adverse;

          (b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the business, properties,
prospects, or financial condition of the Company or any Subsidiary (as such
business is presently conducted and as it is proposed to be conducted);

          (c) any waiver by the Company or any Subsidiary of a valuable right
or of a material debt owed to it;

          (d) any satisfaction or discharge of any lien, claim, or
encumbrance or payment of any obligation by the Company or any Subsidiary,
except in the ordinary course of business and that is not material to the
business, properties, prospects, or financial condition of the Company or any
Subsidiary (as such business is presently conducted and as it is proposed to
be conducted);

          (e) any material change to a contract or arrangement by or to which
the Company or any Subsidiary or any of its respective assets is bound or
subject;

          (f) any change in any compensation arrangement or agreement with
any employee, officer, director or stockholder;

          (g) any sale, assignment, or transfer of any interest in any
patents, trademarks, copyrights, or trade secrets;

          (h) any resignation or termination of employment of any key officer
of the Company or any Subsidiary; and neither the Company nor any Subsidiary
knows of the impending resignation or termination of employment of any such
officer;

          (i) receipt of notice that there has been a loss of, or material
order cancellation by, any major customer of the Company or any Subsidiary;

          (j) any mortgage, pledge, transfer of a security interest in, or
creation of a lien by the Company or any Subsidiary with respect to any of
its properties or assets, except liens for taxes not yet due or payable;

          (k) any loans or guarantees made by the Company or any Subsidiary
to or for the benefit of its respective employees, officers, or directors, or
any members of their immediate families, other than travel advances and other
similar advances made in the ordinary course of its respective business;

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              (l) any declaration, setting aside, or payment or other
distribution in respect of any of the capital stock of the Company or any
Subsidiary, or any direct or indirect redemption, purchase, or other
acquisition of any of such stock by the Company or any Subsidiary;

              (m) to the knowledge of the Company or the Subsidiaries, any
other event or condition of any character that might materially and adversely
affect the respective business, properties, prospects, or financial condition
of the Company or the Subsidiaries (as such business is presently conducted
and as it is proposed to be conducted); or

              (n) any agreement or commitment by the Company or any
Subsidiary to do any of the things described in this paragraph 2.18.

         2.19 INTELLECTUAL PROPERTY RIGHTS. The Company and each Subsidiary
owns or possesses all rights, title and interest in all patents, trademarks,
service marks, trade names, and any applications or registrations therefor,
both foreign and domestic, copyrights, trade secrets, information, and
proprietary rights and processes, (collectively, "Intellectual Property
Rights") and owns or possesses sufficient rights, title, and interest in all
licenses necessary for its business as now conducted and as proposed to be
conducted without any conflict with, or infringement of the rights of,
others. To the Company's knowledge, all Intellectual Property Rights are
valid and enforceable. The Schedule of Exceptions contains a complete list of
patents and pending patent applications of the Company. Except for agreements
with its own respective employees or consultants, substantially in the form
referenced in paragraph 2.22 below, and standard end-user license agreements,
there are no outstanding options, licenses, or agreements of any kind
relating to the foregoing, nor is the Company or any Subsidiary bound by or a
party to any options, licenses, or agreements of any kind with respect to the
patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information, and proprietary rights and processes of any other
person or entity which options, licenses or agreements are material to the
Company or any Subsidiary or its respective business as now conducted and as
proposed to be conducted. The Company and each Subsidiary has taken all
reasonable and appropriate steps, including without limitation the filing and
prosecution of patent, copyright, and trademark applications to perfect and
protect its interest in the Intellectual Property Rights in all countries in
which the Company and each Subsidiary conducts business or proposes to
conduct business; and the Company and each Subsidiary has the exclusive right
to file, prosecute and maintain such applications and the patents and
registrations that issue therefrom. The Company and each Subsidiary has taken
appropriate steps to protect and preserve the confidentiality of all
inventions, algorithms, formulas, schematics, technical drawings, ideas,
know-how, processes not otherwise protected by patents or patent
applications, source code, program listings, and trade secrets ("Confidential
Information"), including without limitation the marking of all such
Confidential Information with appropriate "Proprietary" or "Confidential"
legends and the acquisition of duly executed nondisclosure agreements from
any party receiving Confidential Information. To the Company's knowledge, no
person has used, divulged or appropriated Confidential Information to the
detriment of the Company or any Subsidiary other than pursuant to the terms
of written agreements between the Company or any Subsidiary and such other

                                     -11-
<Page>

persons. Neither the Company nor any Subsidiary has received any
communication challenging the ownership, validity, or enforceability of the
Intellectual Property Rights or alleging that the Company or any Subsidiary
has violated or, by conducting its respective business as proposed, would
violate any of the patents, trademarks, service marks, trade names,
copyrights, trade secrets, or other proprietary rights or processes of any
other person or entity and to the knowledge of the Company and the
Subsidiaries without further investigation, neither the Company nor any
Subsidiary is in such violation. Neither the Company nor any Subsidiary is
aware of any unauthorized use, infringement or misappropriation of any of the
Intellectual Property Rights by any third party, including without
limitation, any respective employee or consultant of the Company or any
Subsidiary. Neither the Company nor any Subsidiary has brought any actions or
lawsuits alleging infringement of any Intellectual Property Rights or breach
of any license, sublicense or other agreement authorizing another party to
use the Intellectual Property Rights. Neither the Company nor any Subsidiary
has entered into any agreement granting any third party the right to bring
infringement actions with respect to, or otherwise to enforce rights with
respect to, any Intellectual Property Right. Neither the Company nor any
Subsidiary is aware that any of the respective employees of the Company or
any Subsidiary is obligated under any contract (including licenses,
covenants, or commitments of any nature) or other agreement, or subject to
any judgment, decree, or order of any court or administrative agency, that
would interfere with the use of such employee's best efforts to promote the
interests of the Company or any Subsidiary or that would conflict with the
business of the Company or any Subsidiary as proposed to be conducted. No
Intellectual Property Right is subject to any outstanding order, judgment,
decree, stipulation, agreement, lien, encumbrance or security interest
related to or restricting in any manner the licensing, assignment, transfer
or conveyance thereof by the Company or any Subsidiary. The Company and each
Subsidiary has secured valid written assignments from all respective
consultants and employees who contributed to the creation or development of
Intellectual Property Rights or the rights to such contributions that the
Company or any Subsidiary does not already own by operation of law. Neither
the execution nor delivery of this Agreement, nor the carrying on of the
Company's or any Subsidiary's business by the respective employees of the
Company or any Subsidiary, nor the conduct of the Company's or any
Subsidiary's business as proposed, will, to the knowledge of the Company or
any Subsidiary, conflict with or result in a breach of the terms, conditions,
or provisions of, or constitute a default under, any contract, covenant, or
instrument under which any of such employees is now obligated. Neither the
Company nor any Subsidiary believes it is or will be necessary to use any
inventions of any of its respective employees (or persons it currently
intends to hire) made prior to their employment by the Company or any
Subsidiary.

         2.20 MANUFACTURING AND MARKETING RIGHTS. Neither the Company nor any
Subsidiary has granted rights to manufacture, produce, assemble, license,
market, or sell its respective products to any other person and is not bound
by any agreement that affects the exclusive right of the Company or any
Subsidiary to develop, manufacture, assemble, distribute, market, or sell its
respective products.

         2.21 EMPLOYEES; EMPLOYEE COMPENSATION. To the best of the knowledge
of the Company and any Subsidiary, there is no strike, or labor dispute or
union organization activities

                                    -12-
<Page>

pending or threatened between it and its respective employees. To the best
knowledge of the Company and any Subsidiary, none of its employees belongs to
any union or collective bargaining unit. To the best of the knowledge of the
Company and any Subsidiary, it has complied in all material respects with all
applicable state and federal equal employment opportunity and other laws
related to employment. To the best knowledge of the Company and any
Subsidiary, no employee of the Company or any Subsidiary is or will be in
violation of any judgment, decree, or order, or any term of any employment
contract, patent disclosure agreement, or other contract or agreement
relating to the relationship of such employee with the Company or any
Subsidiary, or any other party, because of the nature of the business
conducted or to be conducted by the Company or to the use by the employee of
his best efforts with respect to such business. Neither the Company nor any
Subsidiary is a party to or bound by any currently effective employment
contract, deferred compensation agreement, bonus plan, incentive plan, profit
sharing plan, retirement agreement, or other employee compensation agreement
other than with respect to agreements regarding Options, as defined in
Section 2.5(iv) above, including the 1997 and 1998 Stock Option Plans
(collectively with all Options, "Stock Option Plans"), and options granted
thereunder. Neither the Company nor any Subsidiary is aware that any
respective officer or key employee, or that any group of key employees,
intends to terminate their employment with the Company or any Subsidiary, nor
does the Company or any Subsidiary have a present intention to terminate the
employment of any of the foregoing. Subject to general principles related to
wrongful termination of employees, the employment of each officer and
employee of the Company or any Subsidiary is terminable at the will of the
Company or any Subsidiary.

         2.22 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS. Each
employee and officer of the Company and each Subsidiary has executed a
Proprietary Information and Inventions Agreement substantially in the form or
forms which have been delivered to the Investors.

         2.23 TAX RETURNS, PAYMENTS, AND ELECTIONS. The Company and each
Subsidiary has filed all tax returns and reports as required by law. These
returns and reports are true and correct in all material respects. The
Company and each Subsidiary has paid all taxes and other assessments due,
except those contested by it in good faith. The provision for taxes of the
Company as shown in the Financial Statements is adequate for taxes due or
accrued as of the date thereof. The Company has not elected pursuant to the
Internal Revenue Code of 1986, as amended ("Code"), to be treated as an S
corporation or a collapsible corporation pursuant to Section 1362(a) or
Section 341(o) of the Code, nor has it made any other election pursuant to
the Code (other than elections that relate solely to methods of accounting,
depreciation, or amortization) that would have a material effect on the
business, properties, prospects, or financial condition of the Company.
Neither the Company nor any Subsidiary has had any tax deficiency proposed or
assessed against it and neither the Company nor any Subsidiary has executed
any waiver of any statute of limitations on the assessment or collection of
any tax or governmental charge. None of the Company's or any Subsidiary's
federal income tax returns and none of its respective state income or
franchise tax or sales or use tax returns has ever been audited by
governmental authorities. Since the date of the Financial Statements, the
Company and each

                                    -13-
<Page>

Subsidiary has made adequate provisions on its respective books of account
for all taxes, assessments, and governmental charges with respect to its
respective business, properties, and operations for such period. The Company
and each Subsidiary has withheld or collected from each payment made to each
of its respective employees the amount of all taxes, including, but not
limited to, federal income taxes, Federal Insurance Contribution Act taxes
and Federal Unemployment Tax Act taxes required to be withheld or collected
therefrom, and has paid the same to the proper tax receiving officers or
authorized depositories.

         2.24 ENVIRONMENTAL AND SAFETY LAWS.

              (a) All of the real estate owned, leased, subleased, or used by
the Company and the Subsidiaries (collectively, the "Real Estate") is free of
contamination from any Hazardous Material except for such contamination that
would not result in Environmental Liabilities that could reasonably be
expected to have a material adverse effect on the Company or the Investors;
(ii) neither the Company nor any Subsidiary has caused or suffered to occur
any Release of Hazardous Materials on, at, in, under, above, to, from or
about any of its Real Estate; (iii) the Company and the Subsidiaries are and
have been in compliance with all Environmental Laws; (iv) the Company and the
Subsidiaries have obtained, and are in compliance with, all Environmental
Permits required by Environmental Laws for the operations of their respective
businesses as presently conducted or as proposed to be conducted, and all
such Environmental Permits are valid, uncontested and in good standing; (v)
neither the Company nor any Subsidiary is involved in operations or knows of
any facts, circumstances or conditions, including any Releases of Hazardous
Materials, that are likely to result in any Environmental Liabilities of the
Company or any Subsidiary that could reasonably be expected to have a
material adverse effect on the Company or the Investors; (vi) no notice has
been received by the Company or any Subsidiary identifying it as a
"potentially responsible party" or requesting information under any
Environmental Law, and to the knowledge of the Company and the Subsidiaries,
there are no facts, circumstances or conditions that may result in the
Company or any Subsidiary being identified as a "potentially responsible
party" under CERCLA or analogous state statutes; and (vii) the Company and
its Subsidiaries have provided to Investors copies of all existing
environmental reports, reviews and audits and all written information
pertaining to actual or potential Environmental Liabilities, in each case
relating to the Company and the Subsidiaries.

              (b) The following capitalized terms have the definitions
ascribed to them below:

         "Hazardous Material" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined
as a "solid waste," "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste," "restricted hazardous waste,"
"pollutant," "contaminant," "hazardous constituent," "special waste," "toxic
substance" or other similar term or phrase under any Environmental Laws, (b)
petroleum or any fraction or by-product thereof, asbestos, polychlorinated
biphenyls (PCB's), or any radioactive substance. "Environmental Laws" means
all applicable federal, state, local and foreign laws, statutes, ordinances,
codes, rules, standards and regulations, now or hereafter in effect, and any
applicable

                                    -14-
<Page>

judicial or administrative interpretation thereof, including any applicable
judicial or administrative order, consent decree, order or judgment, imposing
liability or standards of conduct for or relating to the regulation and
protection of human health, safety, the environment and natural resources
(including ambient air, surface water, groundwater, wetlands, land surface or
subsurface strata, wildlife, aquatic species and vegetation).

         "Environmental Laws" includes the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C. Sections 9601 et
seq.) ("CERCLA"); the Hazardous Materials Transportation Authorization Act of
1994 (49 U.S.C. Sections 5101 et seq.); the Federal Insecticide, Fungicide,
and Rodenticide Act (7 U.S.C. Sections 136 et seq.); the Solid Waste Disposal
Act (42 U.S.C. Sections 6901 et seq.); the Toxic Substance Control Act (15
U.S.C. Sections 2601 et seq.); the Clean Air Act (42 U.S.C. Sections 7401 et
seq.); the Federal Water Pollution Control Act (33 U.S.C. Sections 1251 et
seq.); the Occupational Safety and Health Act (29 U.S.C. Sections 651 et
seq.); and the Safe Drinking Water Act (42 U.S.C. Sections 300(f) et seq.),
and any and all regulations promulgated thereunder, and all analogous state,
local and foreign counterparts or equivalents and any transfer of ownership
notification or approval statutes.

         "Environmental Liabilities" means, with respect to the Company and
each of the Subsidiaries, all liabilities, obligations, responsibilities,
response, remedial and removal costs, investigation and feasibility study
costs, capital costs, operation and maintenance costs, losses, damages,
punitive damages, property damages, natural resource damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants), fines,
penalties, sanctions and interest incurred as a result of or related to any
claim, suit, action, investigation, proceeding or demand by any person,
whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising
under or related to any Environmental Laws, Environmental Permits, or in
connection with any Release or threatened Release or presence of a Hazardous
Material whether on, at, in, under, from or about or in the vicinity of any
real or personal property.

         "Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any governmental
authority under any Environmental Laws.

         "Release" means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water
or property.

         2.25 SECTION 83(b) ELECTIONS. To the best of the Company's
knowledge, all individuals who have purchased shares of the Company's Common
Stock have timely filed elections under Section 83(b) of the Internal Revenue
Code and any analogous provisions of applicable state tax laws.

                                    -15-
<Page>

         2.26 MINUTE BOOKS. The minute books of the Company and each
Subsidiary made available to Investors contain a complete summary of all
meetings of directors and stockholders since its respective incorporation and
reflect all transactions referred to in such minutes accurately in all
material respects.

         2.27 REAL PROPERTY HOLDING COMPANY. Neither the Company nor any
Subsidiary is a real property holding company within the meaning of Internal
Revenue Code Section 897.

         2.28 INSURANCE. The Company and its Subsidiaries maintain in full
force and effect insurance in such amounts and against such losses and risks
as is sufficient and reasonable given the nature of their respective
businesses. There are currently no claims pending under any insurance
policies of the Company and its Subsidiaries, and all premiums due and
payable with respect to the policies maintained by the Company and its
Subsidiaries have been paid to date.

         2.29 ERISA.

              (a) Section 2.29 of the Schedule of Exceptions lists all
material employee benefit plans (as defined in Section 3(3) of ERISA) and all
material bonus, stock option, stock purchase, incentive, deferred
compensation, supplemental retirement, severance and other similar fringe or
employee benefit plans, programs or arrangements maintained or contributed to
by the Company or any Subsidiaries for the benefit of or relating to any
employee of the Company, or any Subsidiaries (together the "Benefit Plans").
The Company has made available to each Investor a copy of the documents and
instruments governing each such Benefit Plan. No event has occurred and, to
the knowledge of the Company, there currently exists no condition or set of
circumstances in connection with which the Company or any Subsidiaries would
be subject to any material liability (other than for routine benefit
liabilities) under the terms of any Benefit Plans, ERISA, the Code or any
other applicable law, including, without limitation, any liability under
Title IV of ERISA. "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.

              (b) There will be no material payment, accrual of additional
benefits, acceleration of payments or vesting in any benefit under any
Benefit Plan solely by reason of entering into or in connection with the
transactions contemplated by this Agreement.

              (c) No Benefit Plan that is a welfare benefit plan within the
meaning of Section 3(1) of ERISA (other than a plan covering only one
individual employee or former employee and his or her dependents) provides
material benefits to former employees of the Company or its ERISA Affiliates
other than pursuant to Section 4980B of the Code.

         2.30 CO-SALE AGREEMENT. The Amended and Restated Co-Sale Agreement
dated November 10, 2000, as amended from time to time, by and among the
Company and the parties thereto (the "Co-Sale Agreement") has lapsed by its
own terms pursuant to Section 3(b) as each Founder (as defined in the Co-Sale
Agreement) holds less than 5% of the Company's outstanding shares.

                                    -16-
<Page>

         3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.

         Each Investor hereby represents warrants, covenants and agrees that:

         3.1 AUTHORIZATION. Such Investor has full power and authority to
enter into this Agreement and that this Agreement constitutes a valid and
legally binding obligation of such Investor.

         3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made with
each Investor in reliance upon such Investor's representation to the Company,
which by such Investor's execution of this Agreement such Investor hereby
confirms, that the Series F Preferred Stock or the Common Stock issuable upon
conversion thereof (collectively, the "Securities") will be acquired for
investment for such Investor'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
such Investor has no present intention of selling, granting any participation
in, or otherwise distributing the same. By executing this Agreement, each
Investor further represents that such Investor does not have any contract,
undertaking, agreement or arrangement with any person to sell, distribute or
grant participation to such person, or to any third person, with respect to
any of the Securities.

         3.3 RELIANCE UPON INVESTORS' REPRESENTATIONS. Each Investor
understands that the issuance of the Securities may not be registered under
the Securities Act on the ground that the sale provided for in this Agreement
and the issuance of the Securities hereunder is exempt from registration
under the Securities Act pursuant to Section 4(2) thereof and that the
Company's reliance on such exemption is predicated on the Investors'
representations set forth herein.

         3.4 RECEIPT OF INFORMATION. Each Investor believes such Investor has
received all the information such Investor considers necessary for deciding
whether to purchase the Series F Preferred Stock to be issued to it. Each
Investor further represents that such Investor has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the offering of the Series F Preferred Stock, and the business,
properties, prospects, and financial condition of the Company and to obtain
additional information (to the extent the Company possessed such information
or could acquire it without unreasonable effort or expense) necessary to
verify the accuracy of any information furnished to such Investor or to which
such Investor had access. The foregoing, however, does not limit or modify
the representations and warranties of the Company in Section 2 of this
Agreement or the right of the Investors to rely thereon.

         3.5 INVESTMENT EXPERIENCE. Each Investor represents that such
Investor is experienced in evaluating and investing in securities of
companies in the development state and acknowledges that such Investor is
able to fend for himself, herself or itself, can bear the economic risk of
such Investor's investment, and has such knowledge and experience in
financial and business matters that such Investor is capable of evaluating
the merits and risks of the investment in the Series F Preferred Stock. If
other than an individual, Investor also represents such Investor has not been
organized for the purpose of acquiring the Series F Preferred Stock,

                                    -17-
<Page>

or if such Investor has been organized for the purpose of acquiring the
Series F Preferred Stock that all investors in such fund are accredited.

         3.6 ACCREDITED INVESTOR. Except as otherwise disclosed to the
Company in writing, Investor either is (a) an accredited investor as defined
in Rule 501(a) of Regulation D of the SEC under the Securities Act, or (b)
neither (x) a national or resident of the United States, its territories,
possessions or any area subject to its jurisdiction, nor (y) a corporation,
partnership, trust or other entity created or organized in the United States,
its territories, possessions or any area subject to its jurisdiction, nor (z)
a corporation, partnership, trust or other entity, any of the equity owners
of which is described in clause (x) or (y) above and agrees not to sell,
hypothecate, pledge or otherwise dispose of any interest in the Securities in
the United States, its territories, possessions or any area subject to its
jurisdiction, or to any person who is a national thereof or resident therein
(including any estate of such person), or any corporation, partnership or
other entity created or organized therein, unless such securities have been
either registered under the Securities Act, or are exempt from the
registration requirements of the Securities Act, in the opinion of the
Company's counsel, and Investor has complied with any restrictions on
transfer contained in this Agreement.

         3.7 RESTRICTED SECURITIES. Each Investor understands that the Series
F Preferred Stock (and any Common Stock issued on conversion thereof) may not
be sold, transferred, or otherwise disposed of without registration under the
Securities Act or an exemption therefrom, and that in the absence of an
effective registration statement covering the Preferred Stock or Common Stock
issued on conversion thereof or an available exemption from registration
under the Securities Act, the Series F Preferred Stock (and any Common Stock
issued on conversion thereof) must be held indefinitely. In particular, each
Investor is aware that the Series F Preferred Stock (and any Common Stock
issued on conversion thereof) may not be sold pursuant to Rule 144
promulgated under the Securities Act unless all of the conditions of that
Rule are met. Among the conditions for use of Rule 144 may be the
availability of current information to the public about the Company. Such
information is not now available, and the Company has no present plans to
make such information available.

         3.8 CONFIDENTIALITY. Except for GE Capital Equity Investments, Inc.
who shall be bound by the confidentiality provisions in that certain letter
agreement between the Company and GE Capital Equity Investments, Inc. dated
of even date herewith, each Investor hereby represents, warrants and
covenants that it shall maintain in confidence, and shall not use or disclose
without the prior written consent of the Company, any information identified
as confidential that is furnished to it by the Company in connection with
this Agreement, including (without limitation) all financial statements,
budget and other information delivered or provided to such Investor. This
obligation of confidentiality shall not apply, however, to any information
(i) in the public domain through no unauthorized act or failure to act by
Investor, (ii) lawfully disclosed to Investor by a third party who possessed
such information without any obligation of confidentiality, (iii) known
previously by Investor or lawfully developed by Investor independent of any
disclosure by the Company or (iv) required to be disclosed by law. Each
Investor (other

                                    -18-
<Page>

than GE Capital Equity Investments, Inc.) further covenants that such
Investor shall return to the Company all tangible materials containing such
information upon request by the Company.

         3.9 FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting
the representations set forth above, each Investor further agrees not to make
any disposition of all or any portion of the Preferred Stock or Common Stock
issued on conversion thereof without the consent of the Company, unless and
until the transferee has agreed in writing for the benefit of the Company to
be bound by this Section 3 and the Investors' Rights Agreement, provided and
to the extent that such sections are applicable, and:

              (a) There is then in effect a Registration Statement under the
Securities Act covering such proposed disposition and such disposition is
made in accordance with such Registration Statement; or

              (b) The Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition and, if
reasonably requested by the Company, the Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company,
that such disposition will not require registration of such shares under the
Securities Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144, as currently in
existence, except in unusual circumstances.

              (c) Notwithstanding the provisions of subsections (a) and (b)
above, no such registration statement or opinion of counsel or consent of the
Company shall be necessary for a transfer by an Investor to an affiliated
entity which controls, is controlled by, or under common control with, the
Investor, provided that the transferee agrees in writing for the benefit of
the Company to be bound by this Section 3 and the Investors' Rights Agreement.

4.       CONDITIONS OF INVESTORS' OBLIGATIONS AT THE CLOSING.

         The obligations of each Investor under subparagraph 1.1(b) of this
Agreement are subject to the fulfillment on or before the Closing of each of the
following conditions:

         4.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 shall be true on and as of
the Closing.

         4.2 PERFORMANCE. The Company shall have performed and complied with
all agreements, obligations, and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing.

         4.3 COMPLIANCE CERTIFICATE. The President of the Company shall
deliver to each Investor at the Closing a certificate certifying that the
conditions specified in paragraphs 4.1 and 4.2 have been fulfilled.

                                    -19-
<Page>

         4.4 OPINION OF COMPANY COUNSEL. Each Investor shall have received
from Brobeck, Phleger & Harrison LLP, counsel for the Company, an opinion,
dated as of the Closing, substantially in the form attached hereto as EXHIBIT D.

         4.5 INVESTORS' RIGHTS AGREEMENT. The Company and each Investor shall
have entered into the Amended and Restated Investors' Rights Agreement, the
form of which is attached hereto as EXHIBIT C.

         4.6 STATE SECURITIES LAWS. The Company shall have obtained all
necessary state securities law permits and qualifications, or have the
availability of exemptions therefrom, required by any state for the offer and
sale of the Series F Preferred Stock and the Common Stock issuable upon
conversion of the Series F Preferred Stock.

         4.7 RESTATED CERTIFICATE. The Restated Certificate shall have been
filed with the Delaware Secretary of State.

5.       CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING.

         The obligations of the Company to each Investor under this Agreement
are subject to the fulfillment on or before the Closing of each of the following
conditions by that Investor:

         5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each Investor contained in Section 3 hereof shall be true on
and as of the Closing.

         5.2 STATE SECURITIES LAWS. The Company shall have obtained all
necessary state securities law permits and qualifications, or have the
availability of exemptions therefrom, required by any state for the offer and
sale of the Series F Preferred Stock and the Common Stock issuable upon
conversion of the Series F Preferred Stock.

         5.3 PAYMENT OF PURCHASE PRICE. Each Investor shall have delivered
the purchase price specified in Section 1.1.

         5.4 RESTATED CERTIFICATE. The Restated Certificate shall have been
filed with the Delaware Secretary of State.

6.       MISCELLANEOUS.

         6.1 ENTIRE AGREEMENT. This Agreement, a letter agreement between the
Company and GE Capital Equity Investments, Inc. dated of even date herewith
and the documents referred to herein constitute the entire agreement among
the parties hereto and no party shall be liable or bound to any other party
in any manner by any warranties, representations, or covenants except as
specifically set forth herein or therein.

         6.2 SURVIVAL OF WARRANTIES. The warranties, representations, and
covenants of the Company and the Investors contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing.

                                    -20-
<Page>

         6.3 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
permitted transferees of any Series F Preferred Stock or Common Stock issued
upon conversion thereof or upon conversion of Series F Preferred Stock).
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement.

         6.4 GOVERNING LAW; JURY TRIAL WAIVER. This Agreement shall be
governed by and construed under the laws of the State of California as
applied to agreements among California residents entered into and to be
performed entirely within California. THE PARTIES HERETO IRREVOCABLY WAIVE
ALL RIGHTS TO A TRIAL BY JURY IN ANY SUIT, ACTION OR OTHER PROCEEDING
INSTITUTED BY OR AGAINST THE PARTY IN RESPECT OF ITS OBLIGATIONS HEREUNDER OR
THE TRANSACTIONS CONTEMPLATED HEREBY.

         6.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         6.6 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

         6.7 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified (or upon
the date of attempted delivery where delivery is refused) or, if sent by
telecopier, telex, telegram, or other facsimile means, upon receipt of
appropriate confirmation of receipt, or upon deposit with the United States
Postal Service, by registered or certified mail, or next day air courier,
with postage and fees prepaid and addressed to the party entitled to such
notice at the address indicated for such party on the signature page hereof,
or at such other address as such party may designate by 10 days' advance
written notice to the other parties to this Agreement.

         6.8 FINDER'S FEES. Each party represents that it neither is nor will
be obligated for any finder's fee or commission in connection with this
transaction. Each Investor agrees to indemnify and to hold harmless the
Company from any liability for and commission or compensation in the nature
of a finder's fee (and the cost and expenses of defending against such
liability or asserted liability) for which the Investor or any of its
officers, partners, employees, or representatives is responsible.

         The Company agrees to indemnify and hold harmless each Investor from
any liability for any commission or compensation in the nature of a finder's fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees, or
representatives is responsible.

                                    -21-
<Page>

         6.9 EXPENSES. Irrespective of whether the Closing is effected, each
party shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery, and performance of this Agreement;
provided, however, that if the Closing is effected, the Company shall
reimburse GE Capital Equity Investments, Inc. for up to Fifteen Thousand
Dollars ($15,000) in expenses incurred in connection with the transactions
contemplated by this Agreement, including attorneys' fees and expenses.

         6.10 ATTORNEYS' FEES. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the Investors' Rights
Agreement or any other agreement contemplated hereby, 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.

         6.11 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement 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 holders
of at least sixty-six and two-thirds percent (66 2/3%) of the Common Stock
not previously sold to the public that is issued or issuable upon conversion
of the Series F Preferred Stock purchased pursuant to this Agreement. Any
amendment or waiver effected in accordance with this paragraph shall be
binding upon each holder of any securities purchased under this Agreement at
the time outstanding (including securities into which such securities have
been converted), each future holder of all such securities, and the Company.

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

         6.13 EXCULPATION AMONG INVESTORS. Each Investor acknowledges that it
is not relying upon any person, firm, or corporation, other than the Company
and its officers and directors, in making its investment or decision to
invest in the Company. Each Investor agrees that no Investor nor the
respective controlling persons, officers, directors, partners, agents, or
employees of any Investor shall be liable for any action heretofore or
hereafter taken or omitted to be taken by any of them in connection with the
Series F Preferred Stock or Common Stock issued upon conversion thereof.

         6.14 PUBLICITY. No party hereto shall originate any publicity, news
release, or other disclosure or announcement, written or oral (a "Press
Release"), relating to this Agreement, or to performance hereunder or the
existence of an arrangement between the parties hereto without the prior
written approval of each other party hereto, except where such Press Release
is required by applicable law; provided that in such event the party
intending to issue the Press Release shall consult with the other party or
parties with respect to the text thereof and such other party or parties
shall be provided with a copy of the Press Release prior to its release.

                                    -22-
<Page>

         6.15 INDEMNIFICATION.

              (a) The Company shall indemnify each Investor and its
respective directors, officers, employees and affiliates from and against any
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, attorneys' fees, expenses and disbursements of any kind
("Losses") which may be imposed upon, incurred by or asserted against such
Investor or any other indemnified party, relating to or arising out of any
untrue representation, breach of warranty or failure to perform any covenants
or agreement by the Company contained herein or in any certificate or
document delivered pursuant hereto (including, without limitation, the
Investors' Rights Agreement).

              (b) The Company shall indemnify each Investor and its
respective directors, officers, employees and affiliates from and against any
Losses resulting from or related to any claims by third parties relating to
or arising out of the transactions contemplated hereby (including, without
limitation, the Investors' Rights Agreement).

              (c) If any Investor shall believe that such Investor is
entitled to indemnification pursuant to this Section 6.15 in respect of any
Losses, such Investor shall give the Company prompt written notice thereof.
Any such notice shall set forth in reasonable detail and to the extent then
known the basis for such claim for indemnification. The failure of such
Investor to give notice of any claim for indemnification promptly shall not
adversely affect such Investor's right to indemnity hereunder except to the
extent that such failure materially adversely affects the right of the
Company to assert any reasonable defense to such claim. Each such claim for
indemnity shall expressly state that the Company shall have only the ten (10)
day period referred to in the next sentence to dispute or deny such claim.
The Company shall have ten (10) days following its receipt of such notice
either (y) to acquiesce in such claim and its respective responsibilities to
indemnify the Investor in respect thereof in accordance with the terms of
this Section 6.15 by giving such Investor written notice of such acquiescence
or (z) to object to the claim by giving such Investor written notice of the
objection. If the Company does not object thereto within such ten (10) day
period, the Company shall be deemed to have acquiesced in such claim and its
responsibility to indemnify the Investor in respect thereof in accordance
with the terms of this Section 6.15.

              (d) The Company shall reimburse the Investors for any
attorneys' fees and expenses constituting Losses pursuant to this Section
6.15 promptly and in no event later than fifteen (15) days following receipt
of a written invoice therefor.

              [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                    -23-
<Page>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

COMPANY:                            DIGIRAD CORPORATION,
                                    a Delaware corporation

                                    By:           /s/ Scott Huennekens
                                         --------------------------------------
                                         Scott Huennekens, President

INVESTORS:                          KINGSBURY CAPITAL PARTNERS, L.P., III

                                    By:  Kingsbury Associates, L.P.,
                                         Its General Partner

                                    By:      /s/ Timothy J. Wollaeger
                                         --------------------------------------
                                         Timothy J. Wollaeger,
                                         General Partner

                                    KINGSBURY CAPITAL PARTNERS, L.P., IV

                                    By:  Kingsbury Associates, L.P.,
                                         Its General Partner

                                    By:      /s/ Timothy J. Wollaeger
                                         ------------------------------------
                                         Timothy J. Wollaeger,
                                         General Partner

                      Address:      3655 Nobel Drive, Suite 490
                                    San Diego, CA  92122

              [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]

<Page>

                                    SORRENTO VENTURES III, L.P.

                                    By:     /s/ Robert M. Jaffe
                                        ---------------------------------------
                                        Robert M. Jaffe
                                        President, Sorrento Associates, Inc.
                                        General Partner, Sorrento Equity
                                        Partners III, L.P.
                                        General Partner, Sorrento Ventures III,
                                        L.P.

                                    SORRENTO VENTURES CE, L.P.

                                    By:     /s/ Robert M. Jaffe
                                        ---------------------------------------
                                        Robert M. Jaffe
                                        President, Sorrento Associates, Inc.
                                        General Partner, Sorrento Equity
                                        Partners III, L.P.
                                        General Partner, Sorrento Ventures
                                        CE, L.P.

                        Address:    4370 La Jolla Village Drive, Suite 1040
                                    San Diego, CA  92122

              [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]

<Page>

                                   VECTOR LATER-STAGE EQUITY FUND II
                                   (QP), L.P.

                                   By:      Vector Fund Management II, L.L.C.
                                            Its General Partner

                                   By:          /s/ Doug Reed
                                            -----------------------------------
                                            Doug Reed
                                            Managing Director

                                   VECTOR LATER-STAGE EQUITY FUND II, L.P.

                                   By:      Vector Fund Management II, L.L.C.
                                            Its General Partner

                                   By:          /s/ Doug Reed
                                            -----------------------------------
                                            Doug Reed
                                            Managing Director

                         Address:  1751 Lake Cook Road, Suite 350
                                   Deerfield, IL  60015

              [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]

<Page>

                                    ANACAPA INVESTORS, LLC -
                                    ANACAPA I

                                    By:          /s/ Robert Raede
                                            -----------------------------------
                                            Robert Raede
                                            Manager

                         Address:   32 W. Anapamu Street, #350
                                    Santa Barbara, CA  93101

              [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]

<Page>

                                     MERRILL LYNCH VENTURES, L.P. 2001

                                     By:      Merrill Lynch Ventures LLC
                                              Its General Partner

                                     By:          /s/ Edward J. Higgins
                                              ---------------------------------
                                              Edward J. Higgins
                                              Vice President

                     Address:        2 World Financial Center, 31st Floor
                                     New York, NY 10281
                                     Attn:  Jean Kim

                     All Notices:    Merrill Lynch Ventures, L.P. 2001
                                     Attn: Robert F. Tully
                                     95 Greene Street
                                     Jersey City, NJ 07302-3815

              [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]

<Page>

                                     INGLEWOOD VENTURES, L.P.

                                     By:          /s/ Daniel C. Wood
                                              ---------------------------------
                                              Daniel C. Wood

                                     Title:       Member
                                              ---------------------------------

                     Address:        12526 High Bluff Drive, Suite 300
                                     San Diego, CA  92130

              [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]

<Page>

                                     KENNETH E. OLSON TRUST DATED 3/16/89

                                     By:          K. Olson
                                              ---------------------------------

                                     Name:        Trustee
                                              ---------------------------------

                                     Title:
                                              ---------------------------------

                     Address:        404 Torrey Point Road
                                     Del Mar, CA  92014

              [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]
<Page>

                                   D. THEODORE BERGHORST

                                       /s/ D. Theodore Berghorst
                                   -------------------------------------------
                                   Signature

                    Address:       12 Kent Road
                                   Winnetca, IL 60093

                                   BERGHORST 1998 DYNASTIC TRUST

                                   By:       /s/ D. Theodore Berghorst
                                      ----------------------------------------
                                      D. Theodore Berghorst as Financial Advisor

                    Address:       12 Kent Road
                                   Winnetca, IL 60093

                 [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]

<Page>

                                    PETER F. DRAKE

                                            /s/ Peter F. Drake
                                    -------------------------------------------
                                    Signature

                    Address:        255 Mayflower Road
                                    Lake Forest, IL 60045

                 [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]

<Page>

                                     PALIVACINNI PARTNERS, LP

                                     By:          /s/ Doug Reed
                                              ---------------------------------
                                              Doug Reed
                                              Managing Director

                    Address:         1751 Lake Cook Road, Suite 350
                                     Deerfield, IL  60015

                 [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]

<Page>

                                    MID-CAROLINA CARDIOLOGY, PA

                                    By:               /s/ Stephen A. McAdams
                                             ----------------------------------
                                             Stephen A. McAdams, M.D.
                                             Chief Executive Officer

                    Address:        1718 East Fourth Street, Suite 501
                                    Charlotte, NC  28204

                                    STEPHEN A. MCADAMS AND LOU ANN MCADAMS

                                             /s/ Stephen A. McAdams
                                    -------------------------------------------
                                    Stephen A. McAdams

                                             /s/ Lou Ann McAdams
                                    -------------------------------------------
                                    Lou Ann McAdams

                    Address:        1718 East Fourth Street, Suite 501
                                    Charlotte, NC  28204

                 [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]

<Page>

                                     IMPERIAL VENTURES, INC.

                                     By:               /s/ James B. Rutter
                                              ---------------------------------
                                              James B. Rutter
                                              President

                    Address:         11512 El Camino Real, Suite 350
                                     San Diego, CA  92130

                 [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]

<Page>

                                     STEPHEN A. MCADAMS ROLLOVER IRA

                                     By:               /s/ Stephen A. McAdams
                                              ---------------------------------
                                              Stephen A. McAdams

                    Address:         1718 East Fourth Street, Suite 501
                                     Charlotte, NC  28204

                 [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]

<Page>

                                    W. AUGUST HILLENBRAND

                                            /s/ W. August Hillenbrand
                                    -------------------------------------------
                                    Signature

                    Address:        700 S.R. 46E
                                    Batesville, IN  47006

                 [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]

<Page>

                    TAH & H INVESTORS, LP

                    By:      Investment Committee
                             Brickyard Holdings. Inc.
                             Its General Partner

                    By:               /s/ Charles W. Crowther
                             --------------------------------------------
                             Charles W. Crowther
                             Investment Committee Member

                    KKH & C INVESTORS, LP

                    By:      Investment Committee
                             Brickyard Holdings. Inc.
                             Its General Partner

                    By:               /s/ Charles W. Crowther
                             --------------------------------------------
                             Charles W. Crowther
                             Investment Committee Member

                    WAH & M INVESTORS, LP

                    By:      Investment Committee
                             Brickyard Holdings. Inc.
                             Its General Partner

                    By:               /s/ Charles W. Crowther
                             --------------------------------------------
                             Charles W. Crowther
                             Investment Committee Member

    Address:        5 Observatory Hill
                    Cincinnati, OH  45208

                 [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]

<Page>

                     MLH & T INVESTORS, LP

                     By:      Investment Committee
                              Brickyard Holdings. Inc.
                              Its General Partner

                     By:               /s/ Charles W. Crowther
                              --------------------------------------------
                              Charles W. Crowther
                              Investment Committee Member

                     RDH & S INVESTORS, LP

                     By:      Investment Committee
                              Brickyard Holdings. Inc.
                              Its General Partner

                     By:               /s/ Charles W. Crowther
                              --------------------------------------------
                              Charles W. Crowther
                              Investment Committee Member

    Address:         5 Observatory Hill
                     Cincinnati, OH  45208

                 [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]

<Page>

                     GE CAPITAL EQUITY INVESTMENTS, INC.

                     By:          /s/ David Gibbs
                              -------------------------------------------------
                              David Gibbs
                              Senior Vice President

    Address:         120 Long Ridge Road
                     Stamford, CT  06927

                 [SIGNATURE PAGE TO SERIES F STOCK PURCHASE AGREEMENT]

<Page>

                                   SCHEDULE 1

                              SCHEDULE OF INVESTORS

                            CLOSING - AUGUST 23, 2001
<Table>
<Caption>
                INVESTOR                         SHARES TO BE PURCHASED     PURCHASE PRICE
                --------                         ----------------------     --------------
<S>                                              <C>                        <C>
Kingsbury Capital Partners, L.P., III                    55,385               $180,001.25
Kingsbury Capital Partners, L.P., IV                    129,231               $420,000.75
Sorrento Ventures III, L.P.                              63,900               $207,675.00
Sorrento Ventures CE, L.P.                               13,023                $42,324.75
Vector Later-Stage Equity Fund II, L.P.                  38,462               $125,001.50
Vector Later-Stage Equity Fund II (QP), L.P.            115,385               $375,001.25
Palivacinni Partners, LP                                 20,000                $65,000.00
Kenneth E. Olson Trust                                   30,769                $99,999.25
Anacapa Investors, LLC - Anacapa I                       76,923               $249,999.75
Imperial Ventures, Inc.                                 153,846               $499,999.50
Merrill Lynch Ventures, LP 2001                         107,692               $349,999.00
Inglewood Ventures, LP                                   76,923               $249,999.75
D. Theodore Berghorst                                   113,846               $369,999.00
Berghorst 1998 Dynastic Trust                           113,846               $369,999.50
Peter F. Drake                                           76,923               $249,999.75
Mid-Carolina Cardiology, PA                              52,308               $170,001.00
Stephen A. and Lou Ann McAdams                           41,538               $134,998.50
Stephen A. McAdams Rollover IRA                          76,923               $249,999.75
W. August Hillenbrand                                   184,615               $599,998.75
TAH & H Investors, LP                                    30,769                $99,999.25
KKH & C Investors, LP                                    30,769                $99,999.25
WAH & M Investors, LP                                    30,769                $99,999.25
MLH & T Investors, LP                                    30,769                $99,999.25
RDH & S Investors, LP                                    30,770               $100,002.50
GE Capital Equity Investments, Inc.                     923,077             $3,000,000.25
                         TOTALS                       2,618,461              8,509,998.25
                                                      =========              ============
</Table>

                                   SCHEDULE 1
<Page>

                                    EXHIBIT A

                  AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

Filed separately as an Exhibit to this Registration Statement

<Page>

                                    EXHIBIT B

                             SCHEDULE OF EXCEPTIONS

<Page>

                                    EXHIBIT B

                             SCHEDULE OF EXCEPTIONS

                                 AUGUST 23, 2001

         THIS SCHEDULE OF EXCEPTIONS IS MADE AND GIVEN WITH RESPECT TO SECTION 2
OF THE SERIES F PREFERRED STOCK PURCHASE AGREEMENT, DATED AS OF AUGUST 23, 2001,
BY AND AMONG DIGIRAD CORPORATION, A DELAWARE CORPORATION (THE "COMPANY"), AND
THE INVESTORS LISTED ON SCHEDULE 1 ATTACHED THERETO (THE "PURCHASE AGREEMENT").
ALTHOUGH THE SECTION NUMBERS SET FORTH BELOW CORRESPOND TO THE SECTION NUMBERS
IN THE PURCHASE AGREEMENT, ANY INFORMATION DISCLOSED HEREIN UNDER ANY SECTION
NUMBER SHALL BE DEEMED TO BE DISCLOSED AND INCORPORATED INTO ANY OTHER SECTION
NUMBER UNDER THE PURCHASE AGREEMENT WHERE SUCH DISCLOSURES WOULD BE APPROPRIATE.
WHERE THE TERMS OF A LEASE, CONTRACT OR OTHER DISCLOSURE ITEM HAVE BEEN
SUMMARIZED OR DESCRIBED IN THIS SCHEDULE, SUCH SUMMARY OR DESCRIPTION DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE MATERIAL TERMS OF SUCH LEASE, CONTRACT
OR OTHER ITEM. UNLESS THE CONTEXT OTHERWISE REQUIRES, ALL CAPITALIZED TERMS
SHALL HAVE THE SAME MEANING AS DEFINED IN THE PURCHASE AGREEMENT. UNLESS
OTHERWISE INDICATED BELOW, ALL REFERENCES TO THE CLOSING OR THE CLOSING DATE
SHALL BE DEEMED TO REFER TO SUCH TERMS AS THEY ARE DEFINED IN THE PURCHASE
AGREEMENT.

                                  SECTION 2.5
                                 CAPITALIZATION

         (a) Pursuant to the terms of that certain Consulting Agreement by and
between Digirad Imaging Systems, Inc. and Jeffrey Mandler dated September 29,
2000 (the "Mandler Consulting Agreement"), the Company may be obligated to issue
up to 150,000 shares of its common stock. The Company may be obligated to issue
a minimum of 100,000 of such 150,000 shares of its common stock to Jeffrey
Mandler so long as Jeffrey Mandler does not breach either the non-competition
provisions in the Mandler Consulting Agreement or that certain Non-Competition
and Non-Disclosure Agreement by and between Jeffrey Mandler and DIS (hereinafter
defined) dated as of September 29, 2000.

         Pursuant to the terms of that certain Asset Purchase Agreement by and
among the Company, Orion Imaging Systems, Inc., Florida Cardiology and Nuclear
Medicine Group, P.A. and Dr. John Kilgore, dated August 31, 2000, as amended
(the "Florida Cardiology Agreement"), the Company may be obligated to issue (a)
up to 100,000 shares of its common stock in connection with the achievement by
the Mobile Business (as defined in the Florida Cardiology Agreement) of certain
net revenues by August 2001 and (b) additional shares of its stock based upon
certain EBITDA revenues (the "Earn Out Payment"). The amount of the Earnout
Payment shall be determined by the following formula:

         "E = 3.5 (X - $900,000)

         E = Earnout Payment amount in dollars

         X = 2 times the Adjusted EBITDA actually achieved during the period
(the "Earnout Period")commencing six (6) months after the Closing Date and
ending on the first anniversary of the Closing Date (the "Earnout Determination
Date").

         Fifty percent (50%) of the amount of the Earnout Payment, when and if
paid, shall be payable in cash and fifty percent (50%) of the amount of the
Earnout Payment shall be payable

<Page>

in shares of capital stock of Digirad (the "Earnout Shares"). The value of the
Earnout Shares shall be the fair market value of such Earnout Shares on the
Earnout Determination Date, as determined in good faith and in the sole
discretion of the Board of Directors of Digirad. The Earnout Shares may consist
of common stock of Digirad or preferred stock of Digirad, or any combination
thereof, as determined in the sole discretion of the Board of Directors of
Digirad."

         Pursuant to terms of that certain Consulting Agreement with McAdams
and Witham Consulting ("MWC") dated July 31, 2001 (the "MWC Agreement"), the
Company is obligated to issue MWC (a) a warrant to purchase up to 100,000
shares of its common stock, currently exercisable for 40,000 shares of its
common stock with subsequent vesting of 20,000 shares a year for the next
three years, (b) a warrant to purchase 10,000 shares of its common stock for
every three of its digital cameras sold by MWC up to a maximum of 100,000
shares, and thereafter (c) a warrant to purchase 1,500 shares of its common
stock for each of its digital cameras sold by MWC.

                                  SECTION 2.6
                                  SUBSIDIARIES

         Digirad Imaging Solutions, Inc, a Delaware corporation ("DIS"), is a
wholly-owned subsidiary of the Company and Digirad Imaging Systems, Inc., a
Delaware corporation, is a wholly-owned subsidiary of DIS.

                                   SECTION 2.7
                          CONTRACTS AND OTHER COMMITMENTS

         The Company has, from time to time, entered into the following
Consulting Agreements:

         Joel Raichlen Medical Director Agreement dated November 6, 2000.

         Reference is made to the Mandler Consulting Agreement. See Section 2.5
above.

         Makago Electronics, Inc. Project Consulting Agreement dated January 27,
1998.

         Esther Saltz Consulting Agreement dated June 24, 1998.

         Nadine Wang Project Consulting Agreement dated July 1, 1998.

         Mel Davis Consulting Agreement dated July 20, 1998.

         Michael Borton Consulting Agreement dated August 8, 1998.

         Suzanne Farrand, CPA Consulting Agreement dated August 14, 1998.

         Gilbert Pantoja Consulting Agreement dated August 14, 1998.

         Chris Isaacson Mechanical Design Consulting Agreement dated June 19,
2000.

         Frank J. Papatheofanis, MD, PhD Consulting Service Agreement dated
March 4, 1999.

         Ted Tillinghast Mechanical Design Consulting Agreement dated June 14,
1999.

         C4S Consulting Agreement dated July 26, 1999.

         Doyle & Associates Consulting Agreement dated September 13, 1999.

         Charles Schmitz Consulting Agreement dated October 4, 1999.

         Alex Shek Consulting Agreement dated December 3, 1999.

         James Brunsch Consulting Agreement dated February 25, 2000.

<Page>

         Design & Development with Ogden Marsh & Associates dated February 18,
1998.

         James Engelmann Consulting Agreement dated March 14, 2001.

         Martin Shirley Independent Contractor Agreement dated July 8, 1999.

         Gerald McMullen Consulting Agreement dated December 14, 2000 (executed
         in connection with the Florida Cardiology Agreement).

         Reference is made to that certain Employment Agreement by and between
Dr. John Kilgore and Digirad Imaging Systems, Inc. dated December 14, 2000 (the
"Kilgore Employment Agreement") (executed in connection with the Florida
Cardiology Agreement).

         Reference is made to that certain Separation and General Release
Agreement with Joyce Mehrberg dated May 11, 2001 (the "Mehrberg Separation
Agreement").

         Reference is made to the MWC Agreement. See Section 2.5 above.

         Reference is made to that certain Asset Purchase Agreement by and among
Digirad Imaging Systems, Inc., Nuclear Imaging Systems, Inc. and Cardiovascular
Concepts, P.C. dated September 29, 2000 and its associated transaction documents
(the "NIS Agreement").

         Reference is made to the Florida Cardiology Agreement. See Section 2.5
above.

         Reference is made to the Right of First Refusal in favor of the Company
as set forth in Article VII of the Company's bylaws.

         The Company has outstanding agreements involving amounts in excess of
$100,000 with the following entities:

<Table>
<Caption>
            COMPANY           DESCRIPTION                                AMOUNT
            -------------------------------------------------------------------
            <S>               <C>                                        <C>
            HILGER              ***                                      $895,400
            SEGAMI              ***                                      Expect to pay $82,500
                                                                         on a monthly basis, as
                                                                         units are installed in
                                                                         the field
            MULTEK              ***                                      $156,865
            PHOTOPEAK           ***                                      $848,436
            QUIKSIL             ***                                      $192,645
            CROWN CIRCUITS      ***                                      $140,406
            KEARNY MESA FORD    ***                                      $144,000
            ABILITY CENTER      ***                                      $105,701
</Table>

         The Company has from time to time entered into standard common stock
purchase agreements and option agreements for common stock with its employees
and directors (the "Common Stock Agreements"). Forms of the Common Stock
Agreements are attached hereto as Exhibits A & B.

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

<Page>

         The Company has entered into standard indemnification agreements with
each of its directors (the "Indemnification Agreements"). A form of the
Indemnification Agreements is attached hereto as Exhibit C.

         The Company currently has outstanding warrant agreements for the
purchase of shares of its common stock with the following individuals and/or
entities:

<Table>
            <S>                                         <C>
            Cardiovascular Consultants                  10,000
            Robert McKenzie                                500
            Stephan McAdams                             30,000
            John Witham                                 30,000
            Oklahoma Cardiovascular Associates          20,000
            Austin Heart                                10,000
</Table>

         The Company currently has outstanding warrant agreements for the
purchase of shares of its Series E Preferred Stock with the following entities:

<Table>
            <S>                                                 <C>
            MMC/GATX Ventures, Inc.                             257,874
            Priority Capital                                     36,839
            Silicon Valley Bank                                  42,490
            Kingsbury Capital Partners, L.P. III                  9,881
            Kingsbury Capital Partners, L.P. IV                  23,057
            Ocean Avenue Investors LLC - Anacapa Fund I /
            Anacapa Investors LLC - Anacapa Fund I               16,469
            Vector Later-Stage Equity Fund II (QP), L.P.         12,351
            Vector Later-Stage Equity Fund II, L.P.               4,117
</Table>

         Reference is made to that certain Amended and Restated Investors'
Rights Agreement with the investors listed therein dated November 10, 2000, as
amended (the "Investors' Rights Agreement").

         Reference is made to that certain Amended and Restated Co-Sale
Agreement with the investors listed therein dated November 10, 2000, as amended
(the "Co-Sale Agreement").

         Reference is made to that certain Amended and Restated Voting Agreement
with investors listed therein dated August 8, 1997, as amended (the "Voting
Agreement").

         Reference is made to that certain Amended and Restated Series E Voting
Agreement with the investors listed therein dated November 10, 2000, as amended
(the "Series E Voting Agreement").

         Reference is made to that certain Contract V797P6897a with Department
of Veteran Affairs dated September 20, 2000.

         Reference is made to that certain Service Agreement with Universal
Servicetrends, Inc. dated August 25, 2000.

         Reference is made to that certain Development and supply agreement with
QuickSil, Inc. dated June 18, 1999 (the "Quicksil Agreement").

         Reference is made to that certain Master Lease Agreement with GE
Healthcare Financial Services dated September 26, 2000 (the "GE Healthcare
Agreement").

         Reference is made to that certain Irrevocable Standby Letter of Credit
with Silicon Valley Bank for the benefit of GE Company dated December 21, 2000
in amount of $205,000.

<Page>

         Reference is made to that certain Equipment Lease with MarCap
Corporation dated as of October 1, 2000 (the "MarCap Agreement").

         Reference is made to that certain Master Equipment Lease with DVI
Financial Services, Inc. dated as of May 24, 2001 (the "DVI Agreement").

         Reference is made to that certain Loan and Security Agreement with
Silicon Valley Bank dated as of April 1, 2000, as amended (the "First SVB
Agreement").

         Reference is made to that certain Loan and Security Agreement with
Silicon Valley Bank dated as of July 31, 2001 (the "Second SVB Agreement").

         Reference is made to that certain Loan and Security Agreement with
Heller Healthcare Finance dated January 9, 2001 (the "Heller Healthcare
Agreement").

         Reference is made to that certain Loan and Security Agreement with
MMC/GATX Partnership No. I dated October 27, 1999 (the "MMC/GATX Agreement").

         Reference is made to that certain First Amendment to Loan and Security
Agreement with MMC/GATX Partnership No. I dated August 14, 2000 (the "First
Amendment to MMC/GATX Agreement").

         Reference is made to that certain Second Amendment to Loan and Security
Agreement with MMC/GATX Partnership No. I dated November 27, 2000 (the "Second
Amendment to MMC/GATX Agreement").

         Reference is made to that certain Third Amendment to Loan and Security
Agreement with MMC/GATX Partnership No. I dated May 2, 2001 (the "Third
Amendment to MMC/GATX Agreement").

         Reference is made to that certain Fourth Amendment to Loan and Security
Agreement with MMC/GATX Partnership No. I effective as of July 31, 2001 (the
"Fourth Amendment to MMC/GATX Agreement").

         Reference is made to that certain Loan Agreement with Jack F. Butler in
an aggregate amount of $245,000 dated September 1, 1993, as amended (the "Butler
Loan").

         Reference is made to that certain Loan Agreement with Clinton L.
Lingren in an aggregate amount of $245,000 dated September 1, 1993, as amended
(the "Lingren Loan").

         Reference is made to that certain Loan Agreement with Gerald G. Loehr
(as sole trustee of the Gerald G. Loehr Revocable Trust) in an aggregate amount
of $245,000 dated September 1, 1993, as amended (the "Loehr Loan").

Reference is made to that certain License agreement for Detector with the
Regents of the University of California through the Ernest Orlando Lawrence
Berkeley National Laboratory dated May 19, 1999, as amended (the "Berkeley
License").

         Reference is made to that certain Termination Agreement with Ethicon
Endo-Surgery, Inc. dated June 22, 1999 (the "Ethicon Agreement").

         Reference is made to that certain Software License Agreement with
Segami Corporation dated June 16, 1999 (the "Segami Agreement").

         Reference is made to that certain License Agreement with Science
Applications International Corporation dated April 7, 2000 (the "SAIC
Agreement").

         Reference is made to that certain Software Products License Agreement
with Strategic Information Group, Inc. dated December 31, 1998 (the "SIG
Agreement").

<Page>

         Reference is made to that certain Software License Agreement with
Corporate Management Solutions, Inc. dated July 21, 1999 (the "CMS Agreement").

         Reference is made to that certain Software License and Maintenance
Agreement with Cadence Design Systems, Inc. dated November 16, 1999 (the "CDS
Agreement").

Reference is made to that certain Software Products License Agreement with QAD,
Inc. dated January 6, 1999 (the "QAD Agreement").

         The Company has entered into Distribution and Supply Agreements with
the following entities (the "D&S Agreements"):

            CMS Imaging, Inc.
            Performance Medical Group
            ADN CanadaMitsui & Co.

         Reference is made to that certain Lease for 9350 Trade Place, Suite A,
San Diego, CA dated January 27, 1998 with Judd/King No. 1.

         Reference is made to that certain Lease for 9333 Trade Place, San
Diego, CA dated February 21, 2001 with John Stephan, Trustee.

         Reference is made to that certain Lease for 7394 Trade Street, Suite B,
San Diego, CA dated September 1, 1997 with Manohar Daryanani.

         Reference is made to that certain Lease for 7408 Trade Street, San
Diego, CA dated May 26, 1996 with Research Diversified.

         Reference is made to that certain Lease for 7410 Trade Street, San
Diego, CA dated August 1, 1997 with James and Ila Piel Family Trust.

         Reference is made to that certain Lease for 7444 Trade Street, San
Diego, CA dated January 10, 1997 with H.G. Fenton Company.

         Reference is made to that certain Lease for 7414 Trade Street, Suite B,
San Diego, CA dated August 13, 1997 with Janice Brightman.

         Reference is made to that certain Lease for 7390 Trade Street, San
Diego, CA dated May 1, 1997 with John and Diana Purcell.

         Reference is made to that certain Lease for 7824B Causeway Blvd.,
Tampa, FL between Orion Imaging Systems and John and Jewell Talman dated
December 21, 2000.

         Reference is made to that certain Lease for 5 Laurel Drive, Unit 5,
Flanders, NJ 07836 between Digirad Imaging Solutions and Richard and Virginia
Lettorale dated March 29, 2001.

         Reference is made to that certain Lease for 930 N. St., Ste. 210,
Allentown, PA between Orion Imaging Systems and Fourth Street Development, LP
dated February 21, 2001.

         Reference is made to that certain Lease for 7404 Trade Street, San
Diego, CA with H.G. Fenton Company dated August 6, 2001.

         Reference is made to that certain Lease for 1811 Executive Drive,
Indianapolis, IN with Dugan Realty, LLC dated June 25, 2001.

         Reference is made to that certain Lease for 4700 Belle Grove Road,
Baltimore, MD with Crain Limited Partnership dated March 16, 2001.

         Reference is made to that certain Lease for 2579-P Eric Lane,
Burlington, NC with Peters Enterprises, Inc. dated August 15, 2000.

<Page>

         Reference is made to that certain Lease for 1246 Brittain Road, OH with
GMC Investments, Co., Ltd. dated May 31, 2001.

         Reference is made to that certain Lease for 7561 Currency Drive,
Orlando, OH with AMB Property, LP dated April 20, 2001.

         Reference is made to that certain Lease for 251-109 Dominion Drive,
Morrisville, NC with Best & Associates dated June 13, 2001.

See also disclosures in Section 2.19 with respect to Patents, Trademarks or
other technology of the Company.

                                  SECTION 2.8
                           RELATED-PARTY TRANSACTIONS

         Reference is made to the Common Stock Purchase Agreements, the
Indemnification Agreements, the Co-Sale Agreement, the Investors' Rights
Agreement, the Voting Agreement and the Series E Voting Agreement. See Section
2.7 above.

         Reference is made to the Butler Loan. See Section 2.7 above.

         Reference is made to the Lingren Loan. See Section 2.7 above.

         Reference is made to the Loehr Loan. See Section 2.7 above.

         Reference is made to the Kilgore Employment Agreement. See Section 2.7
above.

         Reference is made to that certain Promissory Note Secured by Stock
Pledge Agreement with Boris Apotovsky dated May 15, 2000 in the amount of
$33,419.

         Reference is made to that certain Promissory Note Secured by Stock
Pledge Agreement with Michael Robinson dated January 16, 2001 in the amount of
$3,500.

         Reference is made to that certain Promissory Note Secured by Stock
Pledge Agreement with Joel Tuckey dated September 22, 2000 in the amount of
$17,500.

         Reference is made to that certain Promissory Note Secured by Stock
Pledge Agreement with Rick Linder dated December 22, 2000 in the amount of
$17,500.

         Reference is made to that certain Promissory Note Secured by Stock
Pledge Agreement with Cameron Miller dated January 11, 2001 in the amount of
$5,000.

         The Company has, from time to time, issued shares of its Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, and Series E Preferred Stock pursuant to Stock Purchase
Agreements with investors affiliated with certain members of its Board of
Directors as follows:
<Page>

<Table>
         <S>                                        <C>
         SERIES A MARCH 1995

         Kingsbury Capital Partners                  1,550,000
         Kingsbury Capital Partners II               50,000

         SERIES B DECEMBER 1995

         Kingsbury Capital Partners                  917,364
         Kingsbury Capital Partners II               1,363,636

         SERIES C AUGUST 1997

         Kingsbury Capital Partners                  600,000
         Kingsbury Capital Partners II               600,000
         Sorrento Growth Partners I                  960,000
         Sorrento Ventures II                        400,000
         Sorrento Ventures III                       1,200,000
         Sorrento Ventures CE                        240,000

         SERIES D AUGUST 1997

         Kingsbury Capital Partners                  433,407
         Sorrento Growth Partners I                  457,350
         Sorrento Ventures II                        184,457
         Sorrento Ventures III                       544,721
         Sorrento Ventures CE                        113,693
         Vector Later-Stage Equity Fund              2,167,035
         Vector Later-Stage Equity Fund II           2,275,389

         SERIES E JUNE 1998, MARCH & NOVEMBER 2000, JANUARY 2001

         Kingsbury Capital Partners                  64,000
         Kingsbury Capital Partners II               61,000
         Kingsbury Capital Partners III              428,194
         Kingsbury Capital Partners IV               230,566
         Sorrento Growth Partners I                  113,859
         Sorrento Ventures II                        46,951
         Sorrento Ventures III                       140,157
         Sorrento Ventures CE                        28,413
         Vector Later-Stage Equity Fund              160,671
         Vector Later-Stage Equity Fund II           83,349
         Vector Later-Stage Equity Fund II (QP)      250,048
</Table>

         The Company has issued warrants to purchase up to 49,406 shares of its
Series E Preferred Stock to investors affiliated with certain members of its
Board of Directors as follows:

<Page>

<Table>
         <S>                                        <C>
         SEPTEMBER 29, 2000

         Kingsbury Capital Partners III              9,881
         Kingsbury Capital Partners IV               23,057
         Vector Later-Stage Equity Fund II           4,117
         Vector Later-Stage Equity Fund II (QP)      12,351
</Table>

                                   SECTION 2.9

                               REGISTRATION RIGHTS

         Reference is made to a certain warrant for 42,490 shares of Series E
Preferred Stock with Silicon Valley Bank dated July 31, 2001. Provided a
majority of the Registrable Securities to the Investors' Rights Agreement
consent, Silicon Valley Bank will be added as a signatory thereto as required
under the terms of the warrant.

                                  SECTION 2.10

          COMPLIANCE WITH LAW; PERMITS; HEALTH-CARE REGULATORY MATTERS

         The Company is aware of certain sales tax deficiencies in connection
with the sale of its products in certain states in an aggregate amount which it
believes do not exceed $153,000 (the "Sales Tax Deficiencies"). The Sales Tax
Deficiencies were incurred in connection with the sale of Company products in
states in which the Company did not have resale permits. The Company has
collected the Sales Tax Deficiencies and is in the process of securing resale
permits.

                                  SECTION 2.12

                                   LITIGATION

         In June 2001, the Company received a letter from an attorney
representing American Medical Systems ("AMS") alleging that the Company breached
the terms of an exclusive distributorship agreement and demanding payment of
approximately $210,000.

         In July 2001, the Company was served with a Writ of Garnishment with
respect to GENESIS PHARMACY SERVICES V. FLORIDA CARDIOLOGY AND NUCLEAR MEDICINE
GROUP, P.A. ET AL., a case currently pending in Hillsborough County, Florida
Civil Court. The plaintiff in the cause of action, Genesis Pharmacy Services
("Genesis"), is seeking approximately $157,600 plus interest from the defendants
("Florida Cardiology"). The Company has not been named as party to the
litigation. The Company purchased certain of the assets of Florida Cardiology
pursuant to a certain Asset Purchase Agreement executed with the defendants.
Through the Writ of Garnishment, Genesis is apparently attempting to determine
what funds Florida Cardiology and/or Dr. Kilgore may be owed by the Company. The
Company has engaged Florida counsel to assist with the Company's possible
involvement in the dispute.

In July 2001, the Company was served notice that MEDICAL MANAGEMENT CONCEPTS,
INC. V. DIGIRAD CORPORATION, ET AL. (the "Complaint") had been filed in the
United States District Court for the Eastern District of Pennsylvania. The
Complaint alleges, among other things, breach of the terms of a certain Services
Agreement and Employee Lease Agreement, each dated September 2000 and entered
into by and between Digirad Imaging Systems, Inc. and Medical Management
Concepts, and seeks recovery of damages in an amount in excess of $150,000, more

<Page>

specifically, approximately $81,000 plus 12.5% of the adjusted Estimated Net
Revenue generated from gross sums billed to the Company's mobile nuclear imaging
customers from May 1, 2001 to October 31, 2003, as more fully described in the
NIS Agreement referenced in Section 2.5 (a) above. The Company has engaged
Pennsylvania counsel to assist in responding to the litigation.

                                  SECTION 2.16
                      TITLE TO PROPERTY AND ASSETS; LEASES

         Certain of the Company's assets, including but not limited to, Company
equipment and inventory is subject to security interests and liens pursuant to
the MMC/GATX Agreement as referenced under Section 2.7 above.

         Certain of the Company's assets, including but not limited to, Company
licenses and intellectual property are subject to security interests and liens
pursuant to the First Amendment to MMC/GATX Agreement and the Fourth Amendment
to MMC/GATX Agreement as referenced under Section 2.7 above.

         Certain of the Company's assets, including but not limited to, Company
equipment is subject to security interests and liens pursuant to the Second
Amendment to MMC/GATX Agreement and the Third Amendment to MMC/GATX Agreement as
referenced under Section 2.7 above.

         Certain of the Company's assets, including but not limited to, Company
inventory, goods and equipment are subject to security interests and liens
pursuant to the First SVB Agreement as referenced under Section 2.7 above.

         Certain of the Company's assets, including but not limited to, Company
equipment, receivables and intellectual property are subject to security
interests and liens pursuant to the Second SVB Agreement as referenced under
Section 2.7 above.

         Certain of the Company's assets, including but not limited to, Company
equipment is subject to security interests and liens pursuant to the GE
Healthcare Agreement as referenced under Section 2.7 above.

         Certain of the Company's assets, including but not limited to, Company
accounts and associated items are subject to security interests and liens
pursuant to the Heller Healthcare Agreement as referenced under Section 2.7
above.

         Certain of the Company's assets, including but not limited to, Company
equipment is subject to security interests and liens pursuant to the MarCap
Agreement as referenced under Section 2.7 above.

         Certain of the Company's assets, including but not limited to, Company
equipment is subject to security interests and liens pursuant to the DVI
Agreement as referenced under Section 2.7 above.

<Page>

                                  SECTION 2.17
                              FINANCIAL STATEMENTS

         The following are liabilities subsequent to June 30, 2001 individually
in excess of $50,000 and in the aggregate in excess of $200,000:

<Table>
<Caption>
         COMPANY                    DESCRIPTION                        AMOUNT
-----------------------------------------------------------------------------------------
<S>                           <C>                                <C>
Brobeck, Phleger & Harrison    Legal services                      approximately $210,000

Crown Circuits, Inc.           ***                                                $82,937

Hilger Crystals, Ltd.          ***                                               $127,439

J.W. Marketing Inc.            ***                                               $141,578

Multek, Inc.                   ***                                                $78,854

Newmark Systems                ***                                               $182,294

Nycomed Amersham Imaging       ***                                               $144,884

Segami Corporation             ***                                                $67,090

Supercool Thermoelectric       ***                                                $60,298

Syncor International           ***                                               $194,074

Vista Industrial Products      ***                                               $143,431
</Table>

                                  SECTION 2.18
                                     CHANGES

         (e) Reference is made to the First SVB Agreement, as amended. See
Section 2.7 above.

         (e), (j) Reference is made to the Second SVB Agreement. See Section 2.7
above. Reference is made to the Fourth Amendment to MMC/GATX Agreement. See
Section 2.7 above.

         (f) Reference is made to the addition of Mr. Brad Nutter to the
Company's Board of Directors. In addition, reference is made to the anticipated
resignation of Mr. Vincent Burgess from the Company's Board of Directors.

         (h) Reference is made to the replacement of Ms. Joyce Mehrberg with Mr.
Gary Atkinson as the Company's Chief Financial Officer and Secretary.

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

<Page>

                                  SECTION 2.19
                             PATENTS AND TRADEMARKS

                                      ***
                                      ***
                                      ***

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

<Page>

                                      ***
                                      ***
                                      ***

Registration of "Digirad"

<Table>
<S>                                                           <C>
Filed Application.................................................September 6, 1994
Patent Office Action...............................................February 7, 1995
Amended Application filed...........................................August 14, 1995
Patent Office Action.................................................April 23, 1996
Reconsideration requested..............................................July 5, 1996
Appeal filed.......................................................October 18, 1996
Appeal Brief filed................................................December 20, 1996
Examining Attorney's Appeal Brief filed..............................March 10, 1997
Notice of Acceptance of Statement of Use..............................March 2, 1999

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

<Page>

Registration of "Digirad Imaging Solutions"

Filed Application.....................................................March 6, 2001

Registration of "Notebook Imager"

Application Serial No. 75/202,360 filed...........................November 22, 1996

Registration of "SPECTour"

Application Serial No. 75/799,823 filed..........................September 14, 1999

Registration of "2020TC Imager"

Application Serial No. 75/799,499 filed..........................September 14, 1999

Registration of "Agile"

Application Serial No. 76/064,092 filed................................June 5, 2000

</Table>

         Reference is made to the QuickSil Agreement. See Section 2.7 above.

         Reference is made to the Ethicon Agreement. See Section 2.7 above.

         Reference is made to the Berkeley License. See Section 2.7 above.

         Reference is made to the Segami Agreement. See Section 2.7 above.

         Reference is made to the SAIC Agreement. See Section 2.7 above.

         Reference is made to the SIG Agreement. See Section 2.7 above.

         Reference is made to the CMS Agreement. See Section 2.7 above.

         Reference is made to the CDS Agreement. See Section 2.7 above.

         Reference is made to the QAD Agreement. See Section 2.7 above.

         Reference is made to the First Amendment to MMC/GATX Agreement. See
Section 2.7 above.

         Reference is made to the Fourth Amendment to MMC/GATX Agreement. See
Section 2.7 above.

         Reference is made to the First SVB Agreement. See Section 2.7 above.

         Reference is made to the Second SVB Agreement. See Section 2.7 above.

<Page>

                                  SECTION 2.20
                       MANUFACTURING AND MARKETING RIGHTS

         Reference is made to that certain Quicksil Agreement. See Section 2.7
above.
         Reference is made to the D&S Agreements. See Section 2.7 above.

                                  SECTION 2.21
                        EMPLOYEES; EMPLOYEE COMPENSATION

         Reference is made to the Company's 401k Retirement Plan, 125 Plan and
2001 Leadership Bonus Plan (collectively, the "Company Benefit Plans").

         Reference is made to the Kilgore Employment Agreement. See Section 2.7
above.

         Reference is made to the Mehrberg Separation Agreement. See Section 2.7
above.
                                  SECTION 2.23
                      TAX RETURNS, PAYMENTS, AND ELECTIONS

         The Company was audited by the California Franchise Tax Board for 1993,
1994 and 1995 in routine examinations. No deficiencies were noted.

         The Company paid a $1,180.31 penalty assessed against it by the IRS for
a tax deficiency that occurred in 1991.

         Reference is made to the Sales Tax Deficiencies.

                                  SECTION 2.29
                                      ERISA

         Reference is made to the Company Benefit Plans. See Section 2.21 above.

         Reference is made to the Company's medical and dental insurance, long
term disability, paid time off, and Stock Option Plans.

         Reference is made to the Mehrberg Separation Agreement. See Section 2.7
above.

<Page>

                                    EXHIBIT A

<Page>

                                                         IMMEDIATELY EXERCISABLE

                               DIGIRAD CORPORATION
                            STOCK PURCHASE AGREEMENT

         AGREEMENT made as of this ___ day of ___________, 19__, by and among
Digirad Corporation, (the "Corporation"), _____________________, the holder of
a stock option (the "Optionee") under the Corporation's 1997 Stock Option/Stock
Issuance Plan and _______________, the Optionee's spouse.

         I.       EXERCISE OF OPTION

                  1.1 EXERCISE. Optionee hereby purchases ______________ shares
("Purchased Shares") of the Corporation's common stock ("Common Stock") pursuant
to that certain option ("Option") granted Optionee on _____________, 19___
("Grant Date") to purchase up to ____________ shares of the Common Stock ("Total
Purchasable Shares") under the Corporation's 1997 Stock Option/Stock Issuance
Plan (the "Plan") at an option price of $__________ per share ("Option Price").

                  1.2 PAYMENT. Concurrently with the delivery of this Agreement
to the Corporate Secretary of the Corporation, Optionee shall pay the Option
Price for the Purchased Shares in accordance with the provisions of the
agreement between the Corporation and Optionee evidencing the Option (the
"Option Agreement") and shall deliver whatever additional documents may be
required by the Option Agreement as a condition for exercise, together with a
duly-executed blank Assignment Separate from Certificate (in the form attached
hereto as Exhibit I) with respect to the Purchased Shares.

                  1.3 DELIVERY OF CERTIFICATES. The certificates representing
the Purchased Shares hereunder shall be held in escrow by the Corporate
Secretary of the Corporation in accordance with the provisions of Article VII.

                  1.4 SHAREHOLDER RIGHTS. Until such time as the Corporation
actually exercises its repurchase right, rights of first refusal or special
purchase right under this Agreement, Optionee (or any successor in interest)
shall have all the rights of a shareholder (including voting and dividend
rights) with respect to the Purchased Shares, including the Purchased Shares
held in escrow under Article VII, subject, however, to the transfer restrictions
of Article IV.

         II.      SECURITIES LAW COMPLIANCE

                  2.1 EXEMPTION FROM REGISTRATION. The Purchased Shares have not
been registered under the Securities Act of 1933, as amended (the "1933 Act"),
and are accordingly being issued to Optionee in reliance upon the exemption from
such registration provided by Rule 701 of the Securities and Exchange Commission
for stock issuances under compensatory benefit plans such as the Plan. Optionee
hereby acknowledges previous receipt of a copy of the documentation for such
Plan in the form

<Page>

of Exhibit C to the Notice of Grant of Stock Option (the "Grant Notice")
accompanying the Option Agreement.

                  2.2 RESTRICTED SECURITIES.

                  A. Optionee hereby confirms that Optionee has been informed
that the Purchased Shares are restricted securities under the 1933 Act and may
not be resold or transferred unless the Purchased Shares are first registered
under the Federal securities laws or unless an exemption from such registration
is available. Accordingly, Optionee hereby acknowledges that Optionee is
prepared to hold the Purchased Shares for an indefinite period and that Optionee
is aware that Rule 144 of the Securities and Exchange Commission issued under
the 1933 Act is not presently available to exempt the sale of the Purchased
Shares from the registration requirements of the 1933 Act.

                  B. Upon the expiration of the ninety (90)-day period
immediately following the date on which the Corporation first becomes subject to
the reporting requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the Purchased Shares, to the extent vested under Article
V, may be sold (without registration) pursuant to the applicable requirements of
Rule 144. If Optionee is at the time of such sale an affiliate of the
Corporation for purposes of Rule 144 or was such an affiliate during the
preceding three (3) months, then the sale must comply with all the requirements
of Rule 144 (including the volume limitation on the number of shares sold, the
broker/market-maker sale requirement and the requisite notice to the Securities
and Exchange Commission); however, the two (2)-year holding period requirement
of the Rule will not be applicable. If Optionee is not at the time of the sale
an affiliate of the Corporation nor was such an affiliate during the preceding
three (3) months, then none of the requirements of Rule 144 (other than the
broker/market-maker sale requirement for Purchased Shares held for less than
three (3) years following payment in cash of the Option Price therefor) will be
applicable to the sale.

                  C. Should the Corporation not become subject to the reporting
requirements of the Exchange Act, then Optionee may, provided he/she is not at
the time an affiliate of the Corporation (nor was such an affiliate during the
preceding three (3) months), sell the Purchased Shares (without registration)
pursuant to paragraph (k) of Rule 144 after the Purchased Shares have been held
for a period of three (3) years following the payment in cash of the Option
Price for such shares.

                  2.3 DISPOSITION OF SHARES. Optionee hereby agrees that
Optionee shall make no disposition of the Purchased Shares (other than a
permitted transfer under paragraph 4.1) unless and until there is compliance
with all of the following requirements:

                           (a) Optionee shall have notified the Corporation of
         the proposed disposition and provided a written summary of the terms
         and conditions of the proposed disposition.

                           (b) Optionee shall have complied with all
         require-ments of this Agreement applicable to the disposition of the
         Purchased Shares.

                                     -2-
<Page>

                           (c) Optionee shall have provided the Corporation with
         written assurances, in form and substance satisfactory to the
         Corporation, that (i) the proposed disposition does not require
         registration of the Purchased Shares under the 1933 Act or (ii) all
         appropriate action necessary for compliance with the registration
         requirements of the 1933 Act or of any exemption from registration
         available under the 1933 Act (including Rule 144) has been taken.

                           (d) Optionee shall have provided the Corporation with
         written assurances, in form and substance satisfactory to the
         Corporation, that the proposed disposition will not result in the
         contravention of any transfer restrictions applicable to the Purchased
         Shares pursuant to the provisions of the Commissioner Rules identified
         in paragraph 2.5.

                  The Corporation shall not be required (i) to transfer on its
books any Purchased Shares which have been sold or transferred in violation of
the provisions of this Article II nor (ii) to treat as the owner of the
Purchased Shares, or otherwise to accord voting or dividend rights to, any
transferee to whom the Purchased Shares have been transferred in contravention
of this Agreement.

                  2.4 RESTRICTIVE LEGENDS. In order to reflect the restrictions
on disposition of the Purchased Shares, the stock certificates for the Purchased
Shares will be endorsed with restrictive legends, including one or more of the
following legends:

                  (i) "The shares represented by this certificate have not been
registered under the Securities Act of 1933. The shares may not be sold or
offered for sale in the absence of (a) an effective registration statement for
the shares under such Act, (b) a 'no action' letter of the Securities and
Exchange Commission with respect to such sale or offer, or (c) satisfactory
assurances to the Corporation that registration under such Act is not required
with respect to such sale or offer."

                  (ii) "The shares represented by this certificate are unvested
and accordingly may not be sold, assigned, transferred, encumbered, or in any
manner disposed of except in conformity with the terms of a written agreement
dated ____________, 19 __ between the Corporation and the registered holder of
the shares (or the predecessor in interest to the shares). Such agreement grants
certain repurchase rights and rights of first refusal to the Corporation (or its
assignees) upon the sale, assignment, transfer, encumbrance or other disposition
of the Corporation's shares or upon termination of service with the Corporation.
The Corporation will upon written request furnish a copy of such agreement to
the holder hereof without charge."

                  III. SPECIAL TAX ELECTION

                  3.1 SECTION 83(b) ELECTION APPLICABLE TO THE EXERCISE OF A
NON-STATUTORY STOCK OPTION. If the Purchased Shares are acquired hereunder
pursuant to the exercise of a non-statutory stock option, as specified in the
Grant Notice, then the Optionee understands that under Section 83 of the
Internal Revenue Code of 1986, as amended (the "Code"), the excess of the fair
market value of the Purchased Shares on the

                                     -3-
<Page>

date any forfeiture restrictions applicable to such shares lapse over the
Option Price paid for such shares will be reportable as ordinary income on
such lapse date. For this purpose, the term "forfeiture restrictions"
includes the right of the Corporation to repurchase the Purchased Shares
pursuant to the Repurchase Right provided under Article V of this Agreement.
Optionee understands that he/she may elect under Section 83(b) of the Code to
be taxed at the time the Purchased Shares are acquired hereunder, rather than
when and as such Purchased Shares cease to be subject to such forfeiture
restrictions. Such election must be filed with the Internal Revenue Service
within thirty (30) days after the date of this Agreement. Even if the fair
market value of the Purchased Shares at the date of this Agreement equals the
Option Price paid (and thus no tax is payable), the election must be made to
avoid adverse tax consequences in the future. THE FORM FOR MAKING THIS
ELECTION IS ATTACHED AS EXHIBIT II HERETO. OPTIONEE UNDERSTANDS THAT FAILURE
TO MAKE THIS FILING WITHIN THE THIRTY (30)-DAY PERIOD WILL RESULT IN THE
RECOGNITION OF ORDINARY INCOME BY THE OPTIONEE AS THE FORFEITURE RESTRICTIONS
LAPSE.

                  3.2 CONDITIONAL SECTION 83(b) ELECTION APPLICABLE TO THE
EXERCISE OF AN INCENTIVE STOCK OPTION. If the Purchased Shares are acquired
hereunder pursuant to the exercise of an incentive stock option under the
Federal tax laws, as specified in the Grant Notice, then the following tax
principles shall be applicable to the Purchased Shares:

                           A. For regular tax purposes, no taxable income will
         be recognized at the time the Option is exercised.

                           B. The excess of (i) the fair market value of the
         Purchased Shares on the date the Option is exercised or (if later) on
         the date any forfeiture restrictions applicable to the Purchased Shares
         lapse over (ii) the Option Price paid for the Purchased Shares will be
         includible in the Optionee's taxable income for alternative minimum tax
         purposes.

                           C. If the Optionee makes a disqualifying disposition
         of the Purchased Shares, then the Optionee will recognize ordinary
         income in the year of such disposition equal in amount to the excess of
         (i) the fair market value of the Purchased Shares on the date the
         Option is exercised or (if later) on the date any forfeiture
         restrictions applicable to the Purchased Shares lapse over (ii) the
         Option Price paid for the Purchased Shares. Any additional gain
         recognized upon the disqualifying disposition will be either short-term
         or long-term capital gain depending upon the period for which the
         Purchased Shares are held prior to the disposition.

                           D. For purposes of the foregoing, the term
         "forfeiture restrictions" will include the right of the Corporation to
         repurchase the Purchased Shares pursuant to the Repurchase Right
         provided under Article V of this Agreement. The term "disqualifying
         disposition" means any sale or other

                                     -4-
<Page>

         disposition (1/) of the Purchased Shares within two (2) years after
         the Grant Date or within one (1) year after the execution date of
         this Agreement.

                           E. In the absence of final Treasury Regulations
         relating to incentive stock options, it is not certain whether the
         Optionee may, in connection with the exercise of the Option for any
         Purchased Shares at the time subject to forfeiture restrictions, file a
         protective election under Section 83(b) of the Code which would limit
         (I) the Optionee's alternative minimum taxable income upon exercise and
         (II) the Optionee's ordinary income upon a disqualifying disposition,
         to the excess of (i) the fair market value of the Purchased Shares on
         the date the Option is exercised over (ii) the Option Price paid for
         the Purchased Shares. THE APPROPRIATE FORM FOR MAKING SUCH A PROTECTIVE
         ELECTION IS ATTACHED AS EXHIBIT II TO THIS AGREEMENT AND MUST BE FILED
         WITH THE INTERNAL REVENUE SERVICE WITHIN THIRTY (30) DAYS AFTER THE
         DATE OF THIS AGREEMENT. HOWEVER, SUCH ELECTION IF PROPERLY FILED WILL
         ONLY BE ALLOWED TO THE EXTENT THE FINAL TREASURY REGULATIONS PERMIT
         SUCH A PROTECTIVE ELECTION.

                  3.3 OPTIONEE ACKNOWLEDGES THAT IT IS OPTIONEE'S SOLE
RESPONSIBILITY, AND NOT THE CORPORATION'S, TO FILE A TIMELY ELECTION UNDER
SECTION 83(b), EVEN IF OPTIONEE REQUESTS THE CORPORATION OR ITS REPRESENTATIVES
TO MAKE THIS FILING ON HIS/HER BEHALF. This filing should be made by registered
or certified mail, return receipt requested, and Optionee must retain two (2)
copies of the completed form for filing with his or her State and Federal tax
returns for the current tax year and an additional copy for his or her records.

         IV.      TRANSFER RESTRICTIONS

                  4.1 RESTRICTION ON TRANSFER. Optionee shall not transfer,
assign, encumber or otherwise dispose of any of the Purchased Shares which are
subject to the Corporation's Repur-chase Right under Article V. In addition,
Purchased Shares which are released from the Repurchase Right shall not be
transferred, assigned, encumbered or otherwise made the subject of disposition
in contravention of the Corporation's First Refusal Right under Article VI. Such
restrictions on transfer, however, shall not be applicable to (i) a gratuitous
transfer of the Purchased Shares made to the Optionee's spouse or issue,
including adopted children, or to a trust for the exclusive benefit of the
Optionee or the Optionee's spouse or issue, PROVIDED AND ONLY if the Optionee
obtains the Corporation's prior written consent to such transfer, (ii) a
transfer of title to the Purchased Shares effected pursuant to the Optionee's
will or the laws of intestate succession or (iii) a

-----------------
         (1/) Generally, a disposition of shares purchased under an incentive
stock option includes any transfer of legal title, including a transfer by sale,
exchange or gift, but does not include a transfer to the Optionee's spouse, a
transfer into joint ownership with right of survivorship if Optionee remains one
of the joint owners, a pledge, a transfer by bequest or inheritance or certain
tax free exchanges permitted under the Code.

                                     -5-
<Page>

transfer to the Corporation in pledge as security for any purchase-money
indebtedness incurred by the Optionee in connection with the acquisition of
the Purchased Shares.

                  4.2 TRANSFEREE OBLIGATIONS. Each person (other than the
Corporation) to whom the Purchased Shares are transferred by means of one of the
permitted transfers specified in paragraph 4.1 must, as a condition precedent to
the validity of such transfer, acknowledge in writing to the Corporation that
such person is bound by the provisions of this Agreement and that the
transferred shares are subject to (i) both the Corporation's Repurchase Right
and the Corporation's First Refusal Right granted hereunder and (ii) the market
stand-off provisions of paragraph 4.4, to the same extent such shares would be
so subject if retained by the Optionee.

                  4.3 DEFINITION OF OWNER. For purposes of Articles IV, V, VI
and VII of this Agreement, the term "Owner" shall include the Optionee and all
subsequent holders of the Purchased Shares who derive their chain of ownership
through a permitted transfer from the Optionee in accordance with paragraph 4.1.

                  4.4 MARKET STAND-OFF PROVISIONS.

                  A. In connection with any underwritten public offering by the
Corporation of its equity securities pursuant to an effective registration
statement filed under the 1933 Act, including the Corporation's initial public
offering, Owner shall not sell, make any short sale of, loan, hypothecate,
pledge, grant any option for the purchase of, or otherwise dispose or transfer
for value or otherwise agree to engage in any of the foregoing transactions with
respect to, any Purchased Shares without the prior written consent of the
Corporation or its underwriters. Such limitations shall be in effect for such
period of time from and after the effective date of such registration statement
as may be requested by the Corporation or such underwriters; PROVIDED, however,
that in no event shall such period exceed one hundred-eighty (180) days. The
limitations of this paragraph 4.4 shall remain in effect for the two-year period
immediately following the effective date of the Corporation's initial public
offering and shall thereafter terminate and cease to have any force or effect.

                  B. Owner shall be subject to the market stand-off provisions
of this paragraph 4.4 PROVIDED AND ONLY IF the officers and directors of the
Corporation are also subject to similar arrangements.

                  C. In the event of any stock dividend, stock split,
recapitalization or other change affecting the Corporation's outstanding Common
Stock effected as a class without receipt of considera-tion, then any new,
substituted or additional securities distributed with respect to the Purchased
Shares shall be immediately subject to the provisions of this paragraph 4.4, to
the same extent the Purchased Shares are at such time covered by such
provisions.

                  D. In order to enforce the limitations of this paragraph 4.4,
the Corporation may impose stop-transfer instruc-tions with respect to the
Purchased Shares until the end of the applicable stand-off period.

                                      -6-
<Page>

         V.       REPURCHASE RIGHT

                  5.1 GRANT. The Corporation is hereby granted the right (the
"Repurchase Right"), exercisable at any time during the sixty (60)-day period
following the date the Optionee ceases for any reason to remain in Service or
(if later) during the sixty (60)-day period following the execution date of this
Agreement, to repurchase at the Option Price all or (at the discretion of the
Corporation and with the consent of the Optionee) any portion of the Purchased
Shares in which the Optionee has not acquired a vested interest in accordance
with the vesting provisions of paragraph 5.3 (such shares to be hereinafter
called the "Unvested Shares"). For purposes of this Agreement, the Optionee
shall be deemed to remain in Service for so long as the Optionee continues to
render periodic services to the Corporation or any parent or subsidiary
corporation, whether as an employee, a non-employee member of the board of
directors, or an independent contractor or consultant.

                  5.2 EXERCISE OF THE REPURCHASE RIGHT. The Repurchase Right
shall be exercisable by written notice delivered to the Owner of the Unvested
Shares prior to the expiration of the applicable sixty (60)-day period specified
in paragraph 5.1. The notice shall indicate the number of Unvested Shares to be
repurchased and the date on which the repurchase is to be effected, such date to
be not more than thirty (30) days after the date of notice. To the extent one or
more certificates representing Unvested Shares may have been previously
delivered out of escrow to the Owner, then Owner shall, prior to the close of
business on the date specified for the repurchase, deliver to the Secretary of
the Corporation the certificates representing the Unvested Shares to be
repurchased, each certificate to be properly endorsed for transfer. The
Corporation shall, concurrently with the receipt of such stock certificates
(either from escrow in accordance with paragraph 7.3 or from Owner as herein
provided), pay to Owner in cash or cash equivalents (including the cancellation
of any purchase-money indebtedness), an amount equal to the Option Price
previously paid for the Unvested Shares which are to be repurchased.

                  5.3 TERMINATION OF THE REPURCHASE RIGHT. The Repurchase Right
shall terminate with respect to any Unvested Shares for which it is not timely
exercised under paragraph 5.2. In addition, the Repurchase Right shall
terminate, and cease to be exercisable, with respect to any and all Purchased
Shares in which the Optionee vests in accordance with the vesting schedule
specified in the Grant Notice. All Purchased Shares as to which the Repurchase
Right lapses shall, however, continue to be subject to (i) the First Refusal
Right of the Corporation and its assignees under Article VI, (ii) the market
stand-off provisions of paragraph 4.4 and (iii) the Special Purchase Right under
Article VIII.

                  5.4 AGGREGATE VESTING LIMITATION. If the Option is exercised
in more than one increment so that the Optionee is a party to one or more other
Stock Purchase Agreements ("Prior Purchase Agreements") which are executed prior
to the date of this Agreement, then the total number of Purchased Shares as to
which the Optionee shall be deemed to have a fully-vested interest under this
Agreement and all Prior Purchase Agreements shall not exceed in the aggregate
the number of Purchased Shares in which the Optionee would otherwise at the time
be vested, in accordance with the vesting

                                     -7-
<Page>

provisions of paragraph 5.3, had all the Purchased Shares been acquired
exclusively under this Agreement.

                  5.5 FRACTIONAL SHARES. No fractional shares shall be
repurchased by the Corporation. Accordingly, should the Repurchase Right extend
to a fractional share (in accordance with the vesting provisions of paragraph
5.3) at the time the Optionee ceases Service, then such fractional share shall
be added to any fractional share in which the Optionee is at such time vested in
order to make one whole vested share no longer subject to the Repurchase Right.

                  5.6 ADDITIONAL SHARES OR SUBSTITUTED SECURITIES. In the event
of any stock dividend, stock split, recapitalization or other change affecting
the Corporation's outstanding Common Stock as a class effected without receipt
of consideration, then any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which is
by reason of any such transaction distributed with respect to the Purchased
Shares shall be immediately subject to the Repurchase Right, but only to the
extent the Purchased Shares are at the time covered by such right. Appropriate
adjustments to reflect the distribution of such securities or property shall be
made to the number of Purchased Shares and Total Purchasable Shares hereunder
and to the price per share to be paid upon the exercise of the Repurchase Right
in order to reflect the effect of any such transaction upon the Corporation's
capital structure; provided, however, that the aggregate purchase price shall
remain the same.

                  5.7 CORPORATE TRANSACTION.

                  A. The Repurchase Rights shall automatically terminate and
cease to be exercisable upon the consummation of any Corporate Transaction,
provided that such repurchase right shall not terminate if and to the extent the
Repurchase Rights are assigned to the successor corporation (or parent thereof)
in connection with such Corporate Transaction.

                  B. Repurchase rights which are assigned in connection with a
Corporate Transaction shall be exercisable with respect to the property issued
to the Optionee upon consummation of such Corporate Transaction in exchange for
the Common Stock held by the Optionee subject to the repurchase rights
immediately prior to the Corporate Transaction.

                  C. Any Repurchase Rights which are assigned in a Corporate
Transaction and do not otherwise become vested at that time, shall automatically
terminate and cease to be exercisable in the event the Optionee's Service should
subsequently terminate by reason of an Involuntary Termination within
twenty-four (24) months following the effective date of such Corporate
Transaction.

                  D. This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise make changes in its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.

                                     -8-
<Page>

         VI.      RIGHT OF FIRST REFUSAL

                  6.1 GRANT. The Corporation is hereby granted rights of first
refusal (the "First Refusal Right"), exercisable in connection with any proposed
transfer of the Purchased Shares in which the Optionee has vested in accordance
with the vesting provisions of Article V. For purposes of this Article VI, the
term "transfer" shall include any sale, assignment, pledge, encumbrance or other
disposition for value of the Purchased Shares intended to be made by the Owner,
but shall not include any of the permitted transfers under paragraph 4.1.

                  6.2 NOTICE OF INTENDED DISPOSITION. In the event the Owner
desires to accept a bona fide third-party offer for the transfer of any or all
of the Purchased Shares (the shares subject to such offer to be hereinafter
called the "Target Shares"), Owner shall promptly (i) deliver to the Corporate
Secretary of the Corporation written notice (the "Disposition Notice") of the
terms and conditions of the offer, including the purchase price and the identity
of the third-party offeror, and (ii) provide satisfactory proof that the
disposition of the Target Shares to such third-party offeror would not be in
contravention of the provisions set forth in Articles II and IV of this
Agreement.

                  6.3 EXERCISE OF RIGHT. The Corporation shall, for a period of
forty-five (45) days following receipt of the Disposition Notice, have the right
to repurchase any or all of the Target Shares specified in the Disposition
Notice upon the same terms and conditions specified therein or upon terms and
conditions which do not materially vary from those specified therein. Such right
shall be exercisable by delivery of written notice (the "Exercise Notice") to
Owner prior to the expiration of the forty-five (45)-day exercise period. If
such right is exercised with respect to all the Target Shares specified in the
Disposition Notice, then the Corporation (or its assignees) shall effect the
repurchase of the Target Shares, including payment of the purchase price, not
more than ten (10) business days after delivery of the Exercise Notice; and at
such time Owner shall deliver to the Corporation the certificates repre-senting
the Target Shares to be repurchased, each certificate to be properly endorsed
for transfer. To the extent any of the Target Shares are at the time held in
escrow under Article VII, the certificates for such shares shall automatically
be released from escrow and delivered to the Corporation for purchase. Should
the purchase price specified in the Disposition Notice be payable in property
other than cash or evidences of indebtedness, the Corporation (or its assignees)
shall have the right to pay the purchase price in the form of cash equal in
amount to the value of such property. If the Owner and the Corporation (or its
assignees) cannot agree on such cash value within ten (10) days after the
Corporation's receipt of the Disposition Notice, the valuation shall be made by
an appraiser of recognized standing selected by the Owner and the Corporation
(or its assignees) or, if they cannot agree on an appraiser within twenty (20)
days after the Corporation's receipt of the Disposition Notice, each shall
select an appraiser of recognized standing and the two appraisers shall
designate a third appraiser of recognized standing, whose appraisal shall be
determinative of such value. The cost of such appraisal shall be shared equally
by the Owner and the Corporation. The closing shall then be held on the later of
(i) the tenth business day following delivery of the Exercise Notice or (ii) the
tenth business day after such cash valuation shall have been made.

                                      -9-
<Page>

                  6.4 NON-EXERCISE OF RIGHT. In the event the Exercise Notice is
not given to Owner within forty-five (45) days following the date of the
Corporation's receipt of the Dis-position Notice, Owner shall have a period of
thirty (30) days thereafter in which to sell or otherwise dispose of the Target
Shares to the third-party offeror identified in the Disposition Notice upon
terms and conditions (including the purchase price) no more favorable to such
third-party offeror than those specified in the Disposition Notice; provided,
however, that any such sale or disposition must not be effected in contravention
of the provisions of Article II of this Agreement. To the extent any of the
Target Shares are at the time held in escrow under Article VII, the certificates
for such shares shall automatically be released from escrow and surrendered to
the Owner. The third-party offeror shall acquire the Target Shares free and
clear of the Corporation's Repurchase Right under Article V and the
Corporation's First Refusal Right hereunder, but the acquired shares shall
remain subject to (i) the securities law restrictions of paragraph 2.2(a) and
(ii) the market stand-off provisions of paragraph 4.4. In the event Owner does
not effect such sale or disposition of the Target Shares within the specified
thirty (30)-day period, the Corporation's First Refusal Right shall continue to
be applicable to any subsequent disposition of the Target Shares by Owner until
such right lapses in accordance with paragraph 6.7.

                  6.5 PARTIAL EXERCISE OF RIGHT. In the event the Corporation
(or its assignees) makes a timely exercise of the First Refusal Right with
respect to a portion, but not all, of the Target Shares specified in the
Disposition Notice, Owner shall have the option, exercisable by written notice
to the Corporation delivered within thirty (30) days after the date of the
Disposition Notice, to effect the sale of the Target Shares pursuant to one of
the following alternatives:

                                    (i)     sale or other disposition of all the
         Target Shares to the third-party offeror identified in the Disposition
         Notice, but in full compliance with the requirements of paragraph 6.4,
         as if the Corporation did not exercise the First Refusal Right
         hereunder; or

                                    (ii)    sale to the Corporation (or its
         assignees) of the portion of the Target Shares which the Corporation
         (or its assignees) has elected to purchase, such sale to be effected in
         substantial conformity with the provisions of paragraph 6.3.

                  Failure of Owner to deliver timely notification to the
Corporation under this paragraph 6.5 shall be deemed to be an election by Owner
to sell the Target Shares pursuant to alternative (i) above.

                  6.6 RECAPITALIZATION/MERGER.

                  (a) In the event of any stock dividend, stock split,
recapitalization or other transaction affecting the Corporation's outstanding
Common Stock as a class effected without receipt of consideration, then any new,
substituted or additional securities or other property which is by reason of
such transaction distributed with respect to the Purchased Shares shall be
immediately subject to the Corporation's

                                     -10-
<Page>

First Refusal Right hereunder, but only to the extent the Purchased Shares
are at the time covered by such right.

                  (b) In the event of any of the following transactions:

                                            (i)      a merger or consolidation
         in which the Corporation is not the surviving entity,

                                            (ii)     a sale, transfer or other
         disposition of all or substantially all of the Corporation's assets,

                                            (iii)    a reverse merger in which
         the Corporation is the surviving entity but in which the Corporation's
         outstanding voting securities are transferred in whole or in part to
         person or persons other than those who held such securities immediately
         prior to the merger, or

                                            (iv)     any transaction effected
         primarily to change the State in which the Corporation is incorporated,
         or to create a holding company structure,

                  the Corporation's First Refusal Right shall remain in full
force and effect and shall apply to the new capital stock or other property
received in exchange for the Purchased Shares in consummation of the transaction
but only to the extent the Purchased Shares are at the time covered by such
right.

            6.7 LAPSE. The First Refusal Right under this Article VI shall
lapse and cease to have effect upon the earliest to occur of (i) the first date
on which shares of the Corporation's Common Stock are held of record by more
than five hundred (500) persons, (ii) a determination is made by the
Corporation's Board of Directors that a public market exists for the outstanding
shares of the Corporation's Common Stock, or (iii) a firm commitment
underwritten public offering pursuant to an effective registration statement
under the 1933 Act, covering the offer and sale of the Corporation's Common
Stock in the aggregate amount of at least $5,000,000. However, the market
stand-off provisions of paragraph 4.4 shall continue to remain in full force and
effect following the lapse of the First Refusal Right hereunder.

     VII.     ESCROW

              7.1 DEPOSIT. Upon issuance, the certificates for any Unvested
Shares purchased hereunder shall be deposited in escrow with the Corporate
Secretary of the Corporation- to be held in accordance with the provisions of
this Article VII. Each deposited certificate shall be accompanied by a
duly-executed Assignment Separate from Certificate in the form of Exhibit I. The
deposited certificates, together with any other assets or securities from time
to time deposited with the Corporate Secretary pursuant to the requirements of
this Agreement, shall remain in escrow until such time or times as the
certificates (or other assets and securities) are to be released or otherwise
surrendered for cancellation in accordance with paragraph 7.3. Upon delivery of
the certificates (or other assets and securities) to the Corporate Secretary of
the Corporation, the Owner shall be

                                     -11-

<Page>

issued an instrument of deposit acknowledging the number of Unvested Shares
(or other assets and securities) delivered in escrow.

                  7.2 RECAPITALIZATION. All regular cash dividends on the
Unvested Shares (or other securities at the time held in escrow) shall be paid
directly to the Owner and shall not be held in escrow. However, in the event of
any stock dividend, stock split, recapitalization or other change affecting the
Corporation's outstanding Common Stock as a class effected without receipt of
consideration or in the event of a Corporate Transaction, any new, substituted
or additional securities or other property which is by reason of such
transaction distributed with respect to the Unvested Shares shall be immediately
delivered to the Corporate Secretary to be held in escrow under this Article
VII, but only to the extent the Unvested Shares are at the time subject to the
escrow requirements of paragraph 7.1.

                  7.3 RELEASE/SURRENDER. The Unvested Shares, together with any
other assets or securities held in escrow hereunder, shall be subject to the
following terms and conditions relating to their release from escrow or their
surrender to the Corporation for repurchase and cancellation:

                                    (i)     Should the Corporation (or its
         assignees) elect to exercise the Repurchase Right under Article V with
         respect to any Unvested Shares, then the escrowed certificates for such
         Unvested Shares (together with any other assets or securities issued
         with respect thereto) shall be delivered to the Corporation
         concurrently with the payment to the Owner, in cash or cash equivalent
         (including the cancellation of any purchase-money indebtedness), of an
         amount equal to the aggregate Option Price for such Unvested Shares,
         and the Owner shall cease to have any further rights or claims with
         respect to such Unvested Shares (or other assets or securities
         attributable to such Unvested Shares).

                                    (ii)    Should the Corporation (or its
         assignees) elect to exercise its First Refusal Right under Article VI
         with respect to any vested Target Shares held at the time in escrow
         hereunder, then the escrowed certificates for such Target Shares
         (together with any other assets or securities attributable thereto)
         shall, concurrently with the payment of the paragraph 6.3 purchase
         price for such Target Shares to the Owner, be surrendered to the
         Corporation, and the Owner shall cease to have any further rights or
         claims with respect to such Target Shares (or other assets or
         securities).

                                    (iii)   Should the Corporation (or its
         assignees) elect not to exercise its First Refusal Right under Article
         VI with respect to any Target Shares held at the time in escrow
         hereunder, then the escrowed certificates for such Target Shares
         (together with any other assets or securities attributable thereto)
         shall be surrendered to the Owner for disposition in accordance with
         provisions of paragraph 6.4.

                                    (iv)    As the interest of the Optionee in
         the Unvested Shares (or any other assets or securities attributable
         thereto) vests in accordance

                                       -12-
<Page>

         with the provisions of Article V, the certificates for such vested
         shares (as well as all other vested assets and securities) shall be
         released from escrow and delivered to the Owner in accordance with the
         following schedule:

                                            a.       The initial release of
                  vested shares (or other vested assets and securities) from
                  escrow shall be effected within thirty (30) days following the
                  expiration of the initial twelve (12)-month period measured
                  from the Grant Date.

                                            b.       Subsequent releases of
                  vested shares (or other vested assets and securities) from
                  escrow shall be effected at semi-annual intervals thereafter,
                  with the first such semi-annual release to occur eighteen (18)
                  months after the Grant Date.

                                            c.       Upon the Optionee's
                  cessation of Service, any escrowed Purchased Shares (or other
                  assets or securities) in which the Optionee is at the time
                  vested shall be promptly released from escrow.

                                            d.       Upon any earlier
                  termination of the Corporation-'s Repurchase Right in
                  accordance with the applicable provisions of Article V, any
                  Purchased Shares (or other assets or securities) at the time
                  held in escrow hereunder shall promptly be released to the
                  Owner as fully-vested shares or other property.

                                    (v)     All Purchased Shares (or other
         assets or securities) released from escrow in accordance with the
         provisions of subparagraph (iv) above shall nevertheless remain subject
         to (I) the Corporation's First Refusal Right under Article VI until
         such right lapses pursuant to paragraph 6.7, (II) the market stand-off
         provisions of paragraph 4.4 until such provisions terminate in
         accordance therewith and (III) the Special Purchase Right under Article
         VIII.

         VIII.  MARITAL DISSOLUTION OR LEGAL SEPARATION

                  8.1 GRANT. In connection with the dissolution of the
Optionee's marriage or the legal separation of the Optionee and the Optionee's
spouse, the Corporation shall have the right (the "Special Purchase Right"),
exercisable at any time during the thirty (30)-day period following the
Corporation's receipt of the required Dissolution Notice under paragraph 8.2, to
purchase from the Optionee's spouse, in accordance with the provisions of
paragraph 8.3, all or any portion of the Purchased Shares which would otherwise
be awarded to such spouse in settlement of any community property or other
marital property rights such spouse may have in such shares.

                  8.2 NOTICE OF DECREE OR AGREEMENT. The Optionee shall promptly
provide the Secretary of the Corporation with written notice (the "Dissolution
Notice") of (i) the entry of any judicial decree or order resolving the property
rights of the Optionee and the Optionee's spouse in connection with their
marital dissolu-tion or legal separation or (ii) the execution of any contract
or agreement relating to the distribution or division of

                                       -13-
<Page>

such property rights. The Dissolution Notice shall be accompanied by a copy
of the actual decree of dissolution or settlement agreement between the
Optionee and the Optionee's spouse which provides for the award to the spouse
of one or more Purchased Shares in settlement of any community property or
other marital property rights such spouse may have in such shares.

                  8.3 EXERCISE OF SPECIAL PURCHASE RIGHT. The Special Purchase
Right shall be exercisable by delivery of written notice (the "Purchase Notice")
to the Optionee and the Optionee's spouse within thirty (30) days after the
Corporation's receipt of the Dissolution Notice. The Purchase Notice shall
indicate the number of shares to be purchased by the Corporation, the date such
purchase is to be effected (such date to be not less than five (5) business
days, nor more than ten (10) business days, after the date of the Purchase
Notice), and the fair market value to be paid for such Purchased Shares. The
Optionee (or the Optionee's spouse, to the extent such spouse has physical
possession of the Purchased Shares) shall, prior to the close of business on the
date specified for the purchase, deliver to the Corporate Secretary of the
Corporation the certificates representing the shares to be purchased, each
certificate to be properly endorsed for transfer. To the extent any of the
shares to be purchased by the Corporation are at the time held in escrow under
Article VII, the certificates for such shares shall be promptly delivered out of
escrow to the Corporation. The Corporation shall, concurrently with the receipt
of the stock certificates, pay to the Optionee's spouse (in cash or cash
equivalents) an amount equal to the fair market value specified for such shares
in the Purchase Notice.

                   If the Optionee's spouse does not agree with the fair market
value specified for the shares in the Purchase Notice, then the spouse shall
promptly notify the Corporation in writing of such disagreement and the fair
market value of such shares shall thereupon be determined by an appraiser of
recognized standing selected by the Corporation and the spouse. If they cannot
agree on an appraiser within twenty (20) days after the date of the Purchase
Notice, each shall select an appraiser of recognized standing, and the two
appraisers shall designate a third appraiser of recognized standing whose
appraisal shall be determinative of such value. The cost of the appraisal shall
be shared equally by the Corporation and the Optionee's spouse. The closing
shall then be held on the fifth business day following the completion of such
appraisal; provided, however, that if the appraised value is more than fifteen
percent (15%) greater than the fair market value specified for the shares in the
Purchase Notice, the Corporation shall have the right, exercisable prior to the
expiration of such five (5)-business-day period, to rescind the exercise of the
Special Purchase Right and thereby revoke its election to purchase the shares
awarded to the spouse.

                  8.4 LAPSE. The Special Purchase Right under this Article VIII
shall lapse and cease to have effect upon the earlier to occur of (i) the first
date on which the First Refusal Right under Article VI lapses or (ii) the
expiration of the thirty (30)-day exercise period specified in paragraph 8.3, to
the extent the Special Purchase Right is not timely exercised in accordance with
such paragraph.

                                       -14-
<Page>

         IX.      GENERAL PROVISIONS

                  9.1 ASSIGNMENT. The Corporation may assign its Repurchase
Right under Article V, its First Refusal Right under Article VI and/or its
Special Purchase Right under Article VIII to any person or entity selected by
the Corporation's Board of Directors, including (without limitation) one or more
shareholders of the Corporation.

                   If the assignee of the Repurchase Right is other than a one
hundred percent (100%) owned subsidiary corporation of the Corporation or the
parent corporation owning one hundred percent (100%) of the Corporation, then
such assignee must make a cash payment to the Corporation, upon the assignment
of the Repurchase Right, in an amount equal to the excess (if any) of (i) the
fair market value of the Unvested Shares at the time subject to the assigned
Repurchase Right over (ii) the aggregate repurchase price payable for the
Unvested Shares thereunder.

                  9.2 DEFINITIONS. For purposes of this Agreement, the following
provisions shall be applicable in determining the parent and subsidiary
corporations of the Corporation:

                                    (i)     Any corporation (other than the
         Corporation) in an unbroken chain of corporations ending with the
         Corporation shall be considered to be a parent corporation of the
         Corporation, provided each such corporation in the unbroken chain
         (other than the Corporation) owns, at the time of the determination,
         stock possessing fifty percent (50%) or more of the total combined
         voting power of all classes of stock in one of the other corporations
         in such chain.

                                    (ii)    Each corporation (other than the
         Corporation) in an unbroken chain of corporations beginning with the
         Corporation shall be considered to be a subsidiary of the Corporation,
         provided each such corporation (other than the last corporation) in the
         unbroken chain owns, at the time of the determination, stock possessing
         fifty percent (50%) or more of the total combined voting power of all
         classes of stock in one of the other corporations in such chain.

                  9.3 NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this
Agreement or in the Plan shall confer upon the Optionee any right to continue in
the Service of the Corporation (or any parent or subsidiary corporation of the
Corporation employing or retaining Optionee) for any period of specific duration
or interfere with or otherwise restrict in any way the rights of the Corporation
(or any parent or subsidiary corporation of the Corporation employing or
retaining Optionee) or the Optionee, which rights are hereby expressly reserved
by each, to terminate the Optionee's Service at any time for any reason
whatsoever, with or without cause.

                  9.4 NOTICES. Any notice required in connection with (i) the
Repurchase Right, the Special Purchase Right or the First Refusal Right or (ii)
the disposition of any Purchased Shares covered thereby shall be given in
writing and shall be deemed effective upon personal delivery or upon deposit in
the United States mail, registered or certified, postage prepaid and addressed
to the party entitled to such notice at the address indicated below such party's
signature line on this Agreement or at such

                                       -15-
<Page>

other address as such party may designate by ten (10) days advance written
notice under this paragraph 9.4 to all other parties to this Agreement.

                  9.5 NO WAIVER. The failure of the Corporation (or its
assignees) in any instance to exercise the Repurchase Right granted under
Article V, or the failure of the Corporation (or its assignees) in any instance
to exercise the First Refusal Right granted under Article VI, or the failure of
the Corporation (or its assignees) in any instance to exercise the Special
Purchase Right granted under Article VIII shall not constitute a waiver of any
other repurchase rights and/or rights of first refusal that may subsequently
arise under the provisions of this Agreement or any other agreement between the
Corporation and the Optionee or the Optionee's spouse. No waiver of any breach
or condition of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different nature.

                  9.6 CANCELLATION OF SHARES. If the Corporation (or its
assignees) shall make available, at the time and place and in the amount and
form provided in this Agreement, the consideration for the Purchased Shares to
be repurchased in accordance with the provisions of this Agreement, then from
and after such time, the person from whom such shares are to be repurchased
shall no longer have any rights as a holder of such shares (other than the right
to receive payment of such consideration in accordance with this Agreement), and
such shares shall be deemed purchased in accordance with the applicable
provisions hereof and the Corporation (or its assignees) shall be deemed the
owner and holder of such shares, whether or not the certificates therefor have
been delivered as required by this Agreement.

         X.       MISCELLANEOUS PROVISIONS

                  10.1 OPTIONEE UNDERTAKING. Optionee hereby agrees to take
whatever additional action and execute whatever additional documents the
Corporation may in its judgment deem necessary or advisable in order to carry
out or effect one or more of the obligations or restrictions imposed on either
the Optionee or the Purchased Shares pursuant to the express provisions of this
Agreement.

                  10.2 AGREEMENT IS ENTIRE CONTRACT. This Agreement constitutes
the entire contract between the parties hereto with regard to the subject matter
hereof. This Agreement is made pursuant to the provisions of the Plan and shall
in all respects be construed in conformity with the express terms and provisions
of the Plan.

                  10.3 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, as such laws
are applied to contracts entered into and performed in such State without resort
to that State's conflict-of-laws rules.

                  10.4 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

                                       -16-
<Page>

                  10.5 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall inure to the benefit of, and be binding upon, the Corporation and its
successors and assigns and the Optionee and the Optionee's legal
representatives, heirs, legatees, distributees, assigns and transferees by
operation of law, whether or not any such person shall have become a party to
this Agreement and have agreed in writing to join herein and be bound by the
terms and conditions hereof.

                  10.6 POWER OF ATTORNEY. Optionee's spouse hereby appoints
Optionee his or her true and lawful attorney in fact, for him or her and in his
or her name, place and stead, and for his or her use and benefit, to agree to
any amendment or modification of this Agreement and to execute such further
instruments and take such further actions as may reasonably be necessary to
carry out the intent of this Agreement. Optionee's spouse further gives and
grants unto Optionee as his or her attorney in fact full power and authority to
do and perform every act necessary and proper to be done in the exercise of any
of the foregoing powers as fully as he or she might or could do if personally
present, with full power of substitution and revocation, hereby ratifying and
confirming all that Optionee shall lawfully do and cause to be done by virtue of
this power of attorney.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       -17-
<Page>

                  IN WITNESS WHEREOF, the parties have executed this Agreement
on the day and year first indicated above.

                                    DIGIRAD CORPORATION

                                    By:
                                             ----------------------------------
                                    Title:
                                             ----------------------------------
                                    Address:
                                             ----------------------------------

                                            -----------------------------------

                                            -----------------------------------
                                                         Optionee (*/)

                           Address:
                                            -----------------------------------

                                            -----------------------------------

         The undersigned spouse of Optionee has read and hereby approves the
foregoing Stock Purchase Agreement. In consider-ation of the Corporation's
granting the Optionee the right to acquire the Purchased Shares in accordance
with the terms of such Agreement, the undersigned hereby agrees to be
irrevocably bound by all the terms and provisions of such Agreement, including
(specifically) the right of the Corporation (or its assignees) to purchase any
and all interest or right the undersigned may otherwise have in such shares
pursuant to community property laws or other marital property rights.

                                            -----------------------------------
                                            Optionee's Spouse

                           Address:
                                            -----------------------------------

                                            -----------------------------------

----------------------
(*/) I have executed the Section 83(b) election that was attached hereto as an
Exhibit. As set forth in Article III, I understand that I, and NOT the
Corporation, will be responsible for completing the form and filing the election
with the appropriate office of the Federal and State tax authorities and that if
such filing is not completed within thirty (30) days after the date of this
Agreement, I will not be entitled to the tax benefits provided by Section 83(b).

<Page>

                                    EXHIBIT I

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

                  FOR VALUE RECEIVED _____________ hereby sell(s), assign(s) and
transfer(s) unto Digirad Corporation (the "Corporation"), _____________(_______)
shares of the Common Stock of the Corporation standing in his\her name on the
books of the Corporation represented by Certificate No.__________________ and do
hereby irrevocably constitute and appoint __________________ as Attorney to
transfer the said stock on the books of the Corporation with full power of
substitution in the premises. Dated:___________________

                                   Signature _____________________________

INSTRUCTION: Please do not fill in any blanks other than the signature line. The
purpose of this assignment is to enable the Corporation to exercise its
Repurchase Right set forth in the Agreement without requiring additional
signatures on the part of the Optionee.

<Page>

                                                               REPURCHASE RIGHTS

                                   EXHIBIT II

                           SECTION 83(b) TAX ELECTION

This statement is being made under Section 83(b) of the Internal Revenue Code,
pursuant to Treas. Reg. Section 1.83-2.

(1)      The taxpayer who performed the services is:

         Name:
         Address:
         Taxpayer Ident. No.:

(2)      The property with respect to which the election is being made is
         ______________ shares of the common stock of Digirad Corporation.

(3)      The property was issued on ______________, 19___.

(4)      The taxable year in which the election is being made is the calendar
         year 19 .

(5)      The property is subject to a repurchase right pursuant to which the
         issuer has the right to acquire the property at the original purchase
         price if for any reason taxpayer's employment with the issuer is
         terminated. The issuer's repurchase right lapses in a series of annual
         and monthly installments over a four year period ending on ___________,
         19___.

(6)      The fair market value at the time of transfer (determined without
         regard to any restriction other than a restriction which by its terms
         will never lapse) is $________ per share.

(7)      The amount paid for such property is $___________ per share.

(8)      A copy of this statement was furnished to Digirad Corporation for whom
         taxpayer rendered the services underlying the transfer of property.

(9)      This statement is executed as of: ____________________.

_________________________         ___________________________
Spouse (if any)...                      Taxpayer

This form must be filed with the Internal Revenue Service Center with which
taxpayer files his/her Federal income tax returns. The filing must be made
within 30 days after the execution date of the Stock Purchase Agreement.

<Page>

         SPECIAL PROTECTIVE ELECTION PURSUANT TO SECTION 83(b) OF THE INTERNAL
         REVENUE CODE WITH RESPECT TO PROPERTY ACQUIRED UPON EXERCISE OF AN
         INCENTIVE STOCK OPTION

The property described in the above Section 83(b) election is comprised of
shares of common stock acquired pursuant to the exercise of an incentive stock
option under Section 422 of the Code. Accordingly, it is the intent of the
Taxpayer to utilize this election to achieve the following tax results:

         1.       The purpose of this election is to have the alternative
minimum taxable income attributable to the purchased shares measured by the
amount by which the fair market value of such shares at the time of their
transfer to the Taxpayer exceeds the purchase price paid for the shares. In the
absence of this election, such alternative minimum taxable income would be
measured by the spread between the fair market value of the purchased shares and
the purchase price which exists on the various lapse dates in effect for the
forfeiture restric-tions applicable to such shares. The election is to be
effective to the full extent permitted under the Internal Revenue Code.

         2.       Section 421(a)(1) of the Code expressly excludes from income
any excess of the fair market value of the purchased shares over the amount paid
for such shares. Accordingly, this election is also intended to be effective in
the event there is a "disqualifying disposition" of the shares, within the
meaning of Section 421(b) of the Code, which would otherwise render the
provisions of Section 83(a) of the Code applicable at that time. Consequently,
the Taxpayer hereby elects to have the amount of disqualifying disposition
income measured by the excess of the fair market value of the purchased shares
on the date of transfer to the Taxpayer over the amount paid for such shares.
Since Section 421(a) presently applies to the shares which are the subject of
this Section 83(b) election, no taxable income is actually recognized for
regular tax purposes at this time, and no income taxes are payable, by the
Taxpayer as a result of this election.

This form should be filed with the Internal Revenue Service Center with which
taxpayer files his/her Federal income tax returns. The filing must be made
within 30 days after the execution date of the Stock Purchase Agreement.

         NOTE:  PAGE 2 SHOULD BE ATTACHED ONLY IF YOU ARE EXERCISING AN
         INCENTIVE STOCK OPTION.

<Page>

                                    EXHIBIT B

<Page>

                               DIGIRAD CORPORATION
                             STOCK OPTION AGREEMENT

                                    RECITALS

         A. The Board of Directors of the Corporation has adopted the Digirad
Corporation 1997 Stock Option/Stock Issuance Plan (the "Plan") for the purpose
of attracting and retaining the services of persons who contribute to the growth
and financial success of the Corporation.

         B. Optionee is a person who the Plan Administrator believes has and
will contribute to the growth and financial success of the Corporation and this
Agreement is executed pursuant to and is intended to carry out the purposes of
the Plan.

                                    AGREEMENT

         NOW, THEREFORE, it is hereby agreed as follows:

         1.       GRANT OF OPTION. Subject to and upon the terms and conditions
set forth in this Agreement, the Corporation hereby grants to Optionee, as of
the grant date (the "Grant Date") specified in the accompanying Notice of Grant
of Stock Option (the "Grant Notice"), a stock option to purchase up to that
number of shares of the Corporation's Common Stock (the "Option Shares") as is
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term at the option price per share (the "Option
Price") specified in the Grant Notice. Capitalized terms used herein which are
not otherwise defined shall have the meaning ascribed to such terms in the Plan.

         2.       OPTION TERM. This option shall have a maximum term of ten (10)
years measured from the Grant Date and shall expire at the close of business on
the expiration date (the "Expiration Date") specified in the Grant Notice,
unless sooner terminated in accordance with Paragraph 5, 6 or 17.

         3.       LIMITED TRANSFERABILITY. This option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee.

         4.       DATES OF EXERCISE. This option may not be exercised in whole
or in part at any time prior to the time the Plan is approved by the
Corporation's shareholders in accordance with Paragraph 17. Provided such
shareholder approval is obtained, this option shall thereupon become exercisable
for the Option Shares in one or more installments as is specified in the Grant
Notice. As the option becomes exercisable in one or more installments, the
installments shall accumulate and the option shall remain

<Page>

exercisable for such installments until the Expiration Date or the sooner
termination of the option term under Paragraph 5 or Paragraph 6 of this
Agreement.

         5.       SPECIAL TERMINATION OF OPTION TERM. The option term specified
in Paragraph 2 shall terminate (and this option shall cease to be exercisable)
prior to the Expiration Date should any of the following provisions become
applicable:

                                    (i)     Except as otherwise provided in
         subparagraph (ii) or (iii) below, should Optionee cease to remain in
         Service while this option is outstanding, then the period for
         exercising this option shall be reduced to a three (3)-month period
         commencing with the date of such cessation of Service, but in no event
         shall this option be exercisable at any time after the Expiration Date.
         Upon the expiration of such three (3)-month period or (if earlier) upon
         the Expiration Date, this option shall terminate and cease to be
         outstanding.

                                    (ii)    Should Optionee die while this
         option is outstanding, then the personal representative of the
         Optionee's estate or the person or persons to whom the option is
         transferred pursuant to the Optionee's will or in accordance with the
         law of descent and distribution shall have the right to exercise this
         option. Such right shall lapse and this option shall cease to be
         exercisable upon the earlier of (A) the expiration of the twelve (12)
         month period measured from the date of Optionee's death or (B) the
         Expiration Date. Upon the expiration of such twelve (12) month period
         or (if earlier) upon the Expiration Date, this option shall terminate
         and cease to be outstanding.

                                    (iii)   Should Optionee become permanently
         disabled and cease by reason thereof to remain in Service while this
         option is outstanding, then the Optionee shall have a period of twelve
         (12) months (commencing with the date of such cessation of Service)
         during which to exercise this option, but in no event shall this option
         be exercisable at any time after the Expiration Date. Optionee shall be
         deemed to be permanently disabled if Optionee is unable to engage in
         any substantial gainful activity for the Corporation or the parent or
         subsidiary corporation retaining his/her services by reason of any
         medically determinable physical or mental impairment, which can be
         expected to result in death or which has lasted or can be expected to
         last for a continuous period of not less than twelve (12) months. Upon
         the expiration of such limited period of exercisability or (if earlier)
         upon the Expiration Date, this option shall terminate and cease to be
         outstanding.

                                    (iv)    During the limited period of
         exercisability applicable under subparagraph (i), (ii) or (iii) above,
         this option may be exercised for any or all of the Option Shares for
         which this option is, at the time of the Optionee's cessation of
         Service, exercisable in accordance with the exercise schedule specified
         in the Grant Notice and the provisions of Paragraph 6 of this
         Agreement.

                                    (v)     For purposes of this Paragraph 5 and
         for all other purposes under this Agreement:

                                       -2-
<Page>

                 A.       The Optionee shall be deemed to remain in Service
for so long as the Optionee continues to render periodic services to the
Corporation or any parent or subsidiary corporation, whether as an Employee,
a non-employee member of the board of directors, or an independent contractor
or consultant.

                  B.       The Optionee shall be deemed to be an Employee of
the Corporation and to continue in the Corporation's employ for so long as
the Optionee remains in the employ of the Corporation or one or more of its
parent or subsidiary corporations, subject to the control and direction of
the employer entity as to both the work to be performed and the manner and
method of performance.

                  C.       A corporation shall be considered to be a
subsidiary corporation of the Corporation if it is a member of an unbroken
chain of corporations beginning with the Corporation, provided each such
corporation in the chain (other than the last corporation) owns, at the time
of determination, stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

                  D.       A corporation shall be considered to be a parent
corporation of the Corporation if it is a member of an unbroken chain ending
with the Corporation, provided each such corporation in the chain (other than
the Corporation) owns, at the time of determination, stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

         6.       EFFECT OF CORPORATE TRANSACTION.

                  A.       Optionee shall automatically vest in full with
respect to all of the Option Shares in the event of a Corporate Transaction
so that each such option shall, immediately prior to the effective date of
the Corporate Transaction, may be exercised for any or all of the Option
Shares as fully-vested shares of Common Stock, provided that the Option
Shares shall not automatically vest in full if and to the extent: (i) this
option is, in connection with the Corporate Transaction, either to be assumed
by the successor corporation (or parent thereof) or to be replaced with a
comparable option to purchase shares of the capital stock of the successor
corporation (or parent thereof), or (ii) such option is to be replaced with a
cash incentive program of the successor corporation which preserves the
spread existing on the unvested option shares at the time of the Corporate
Transaction and provides for subsequent payout in accordance with the same
vesting schedule applicable to those option shares. The determination of
option comparability under clause (i) above shall be made by the Plan
Administrator, and its determination shall be final, binding and conclusive.

                  B.       To the extent not previously exercised, this
Option shall terminate and cease to be exercisable upon the consummation of a
Corporate Transaction unless it is expressly assumed by the successor
corporation or parent thereof.

                  C.       Option Shares available under any options which
are assumed or replaced in the Corporate Transaction and do not otherwise
accelerate at that time, shall automatically vest in full in the event the
Optionee's Service should subsequently

                                       -3-
<Page>

terminated by reason of an Involuntary Termination within twenty-four (24)
months following the effective date of such Corporate Transaction. Any
options so accelerated shall remain exercisable for fully-vested shares until
the earlier of (i) the expiration of the option term or (ii) the expiration
of the one (1)-year period measured from the effective date of the
Involuntary Termination.

                  D.       This Agreement shall not in any way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise make
changes in its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.

         7.       EFFECT OF CHANGE IN CONTROL

                  In the event of any Change in Control, Optionee shall
automatically vest in full with respect to all Option Shares so that each
such option shall, immediately prior to the effective date of the Change in
Control, be fully exercisable for any or all of Option Shares as fully-vested
shares of Common Stock.

         8.       ADJUSTMENT IN OPTION SHARES.

                  A. In the event any change is made to the Corporation's
outstanding Common Stock by reason of any stock split, stock dividend,
combination of shares, exchange of shares, or other change affecting the
outstanding Common Stock as a class without receipt of consideration, then
appropriate adjustments shall be made to (i) the total number of Option
Shares subject to this option, (ii) the number of Option Shares for which
this option is to be exercisable from and after each installment date
specified in the Grant Notice and (iii) the Option Price payable per share in
order to reflect such change and thereby preclude a dilution or enlargement
of benefits hereunder.

                  B. If this option is to be assumed in connection with a
Corporate Transaction described in Paragraph 6 or is otherwise to remain
outstanding, then this option shall be appropriately adjusted, immediately
after such Corporate Transaction, to apply and pertain to the number and
class of securities which would have been issuable to the Optionee in the
consummation of such Corporate Transaction had the option been exercised
immediately prior to such Corporate Transaction, and appropriate adjustments
shall also be made to the Option Price payable per share, provided the
aggregate Option Price payable hereunder shall remain the same.

         9.       PRIVILEGE OF STOCK OWNERSHIP. The holder of this option shall
not have any of the rights of a shareholder with respect to the Option Shares
until such individual shall have exercised the option and paid the Option Price.

         10.      MANNER OF EXERCISING OPTION.

                  A.       In order to exercise this option with respect to
all or any part of the Option Shares for which this option is at the time
exercisable, Optionee (or in the case of exercise after Optionee's death, the
Optionee's executor, administrator, heir or legatee, as the case may be) must
take the following actions:

                                       -4-
<Page>

                                            (i)      Execute and deliver to the
         Secretary of the Corporation a stock purchase agreement (the "Purchase
         Agreement") in substantially the form of Exhibit B to the Grant Notice.

                                            (ii)     Pay the aggregate Option
         Price for the purchased shares in one or more forms approved under the
         Plan.

                                            (iii)    Furnish to the Corporation
         appropriate documentation that the person or persons exercising the
         option, if other than Optionee, have the right to exercise this option.

                  B.       For purposes of this Agreement, the Exercise Date
shall be the date on which the executed Purchase Agreement shall have been
delivered to the Corporation, and the fair market value of a share of Common
Stock on any relevant date shall be determined in accordance with
subparagraphs (i) through (iii) below:

                                            (i)      If the Common Stock is not
         at the time listed or admitted to trading on any stock exchange but is
         traded on the NASDAQ National Market System, the fair market value
         shall be the closing selling price of one share of Common Stock on the
         date in question, as such price is reported by the National Association
         of Securities Dealers through its NASDAQ system or any successor
         system. If there is no closing selling price for the Common Stock on
         the date in question, then the closing selling price on the last
         preceding date for which such quotation exists shall be determinative
         of fair market value.

                                            (ii)     If the Common Stock is at
         the time listed or admitted to trading on any stock exchange, then the
         fair market value shall be the closing selling price per share of
         Common Stock on the date in question on the stock exchange determined
         by the Plan Administrator to be the primary market for the Common
         Stock, as such price is officially quoted in the composite tape of
         transactions on such exchange. If there is no reported sale of Common
         Stock on such exchange on the date in question, then the fair market
         value shall be the closing selling price on the exchange on the last
         preceding date for which such quotation exists.

                                            (iii)    If the Common Stock at the
         time is neither listed nor admitted to trading on any stock exchange
         nor traded in the over-the-counter market, or if the Plan Administrator
         determines that the value determined pursuant to subparagraphs (i) and
         (ii) above does not accurately reflect the fair market value of the
         Common Stock, then such fair market value shall be determined by the
         Plan Administrator after taking into account such factors as the Plan
         Administrator shall deem appropriate.

                  C.       As soon after the Exercise Date as practical, the
Corporation shall mail or deliver to Optionee or to the other person or
persons exercising this option a certificate or certificates representing the
shares so purchased and paid for, with the appropriate legends affixed
thereto.

                                       -5-
<Page>

                  D.       In no event may this option be exercised for any
fractional shares.

         11.      COMPLIANCE WITH LAWS AND REGULATIONS.

                  A.       The exercise of this option and the issuance of
Option Shares upon such exercise shall be subject to compliance by the
Corporation and the Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange on which
shares of the Corporation's Common Stock may be listed at the time of such
exercise and issuance.

                  B.       In connection with the exercise of this option,
Optionee shall execute and deliver to the Corporation such representations in
writing as may be requested by the Corporation in order for it to comply with
the applicable requirements of Federal and State securities laws.

         12.      SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraph 3 or 6, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the successors, administrators, heirs,
legal representatives and assigns of Optionee and the successors and assigns of
the Corporation.

         13.      LIABILITY OF CORPORATION.

                  A.       If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common Stock which may
without shareholder approval be issued under the Plan, then this option shall
be void with respect to such excess shares, unless shareholder approval of an
amendment sufficiently increasing the number of shares of Common Stock
issuable under the Plan is obtained in accordance with the provisions of
Article IV, Section 3, of the Plan.

                  B.       The inability of the Corporation to obtain
approval from any regulatory body having authority deemed by the Corporation
to be necessary to the lawful issuance and sale of any Common Stock pursuant
to this option shall relieve the Corporation of any liability with respect to
the non-issuance or sale of the Common Stock as to which such approval shall
not have been obtained. The Corporation, however, shall use its best efforts
to obtain all such approvals.

         14.      NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation in care of the Corporate Secretary at its principal corporate
offices. Any notice required to be given or delivered to Optionee shall be in
writing and addressed to Optionee at the address indicated below Optionee's
signature line on the Grant Notice. All notices shall be deemed to have been
given or delivered upon personal delivery or upon deposit in the U.S. mail,
postage prepaid and properly addressed to the party to be notified.

         15.      LOANS. The Plan Administrator may, in its absolute discretion
and without any obligation to do so, assist the Optionee in the exercise of this
option by (i) authorizing the extension of a loan to the Optionee from the
Corporation or (ii) permitting

                                       -6-
<Page>

the Optionee to pay the option price for the purchased Common Stock in
installments over a period of years. The terms of any such loan or
installment method of payment (including the interest rate, the requirements
for collateral and the terms of repayment) shall be established by the Plan
Administrator in its sole discretion.

         16.      CONSTRUCTION. This Agreement and the option evidenced hereby
are made and granted pursuant to the Plan and are in all respects limited by and
subject to the express terms and provisions of the Plan. All decisions of the
Plan Administrator with respect to any question or issue arising under the Plan
or this Agreement shall be conclusive and binding on all persons having an
interest in this option.

         17.      GOVERNING LAW. The interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the State of
Delaware without resort to that State's conflict-of-laws rules.

         18.      SHAREHOLDER APPROVAL. The grant of this option is subject to
approval of the Plan by the Corporation's shareholders within twelve (12) months
after the adoption of the Plan by the Board of Directors. NOTWITHSTANDING ANY
PROVISION OF THIS AGREEMENT TO THE CONTRARY, THIS OPTION MAY NOT BE EXERCISED IN
WHOLE OR IN PART UNTIL SUCH SHAREHOLDER APPROVAL IS OBTAINED. In the event that
such shareholder approval is not obtained, then this option shall thereupon
terminate in its entirety and the Optionee shall have no further rights to
acquire any Option Shares hereunder.

         19.      ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE STOCK OPTION. In
the event this option is designated an incentive stock option in the Grant
Notice, the following terms and conditions shall also apply to the grant:

                  A.       This option shall cease to qualify for favorable
tax treatment as an incentive stock option under the Federal tax laws if (and
to the extent) this option is exercised for one or more Option Shares: (i)
more than three (3) months after the date the Optionee ceases to be an
Employee for any reason other than death or permanent disability (as defined
in Paragraph 5) or (ii) more than one (1) year after the date the Optionee
ceases to be an Employee by reason of permanent disability.

                  B.       Should this option be designated as immediately
exercisable in the Grant Notice, then this option shall not become
exercisable in the calendar year in which granted if (and to the extent) the
aggregate fair market value (determined at the Grant Date) of the
Corporation's Common Stock for which this option would otherwise first become
exercisable in such calendar year would, when added to the aggregate fair
market value (determined as of the respective date or dates of grant) of the
Corporation's Common Stock for which this option or one or more other
incentive stock options granted to the Optionee prior to the Grant Date
(whether under the Plan or any other option plan of the Corporation or its
parent or subsidiary corporations) first become exercisable during the same
calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. To the extent the exercisability of this option is deferred by
reason of the foregoing limitation, the deferred portion will first become
exercisable in the first calendar year or years thereafter in which the One
Hundred Thousand Dollar ($100,000) limitation of this Paragraph 18.B would
not be contravened.

                                       -7-
<Page>

                  C.       Should this option be designated as exercisable in
installments in the Grant Notice, then no installment under this option
(whether annual or monthly) shall qualify for favorable tax treatment as an
incentive stock option under the Federal tax laws if (and to the extent) the
aggregate fair market value (determined at the Grant Date) of the
Corporation's Common Stock for which such installment first becomes
exercisable hereunder will, when added to the aggregate fair market value
(determined as of the respective date or dates of grant) of the Corporation's
Common Stock for which one or more other incentive stock options granted to
the Optionee prior to the Grant Date (whether under the Plan or any other
option plan of the Corporation or any parent or subsidiary corporation) first
become exercisable during the same calendar year, exceed One Hundred Thousand
Dollars ($100,000) in the aggregate.

         20.      WITHHOLDING. Optionee hereby agrees to make appropriate
arrangements with the Corporation or parent or subsidiary corporation
employing Optionee for the satisfaction of all Federal, State or local income
tax withholding requirements and Federal social security employee tax
requirements applicable to the exercise of this option.

                                       -8-

<Page>

                                    EXHIBIT C

<Page>

                            INDEMNIFICATION AGREEMENT

         THIS AGREEMENT is made and entered into this ____ day of _______, 19__
between DIGIRAD CORPORATION., a Delaware corporation ("Corporation"), and
_____________________________ ("Director").

                                    RECITALS:

         A.       Director, a member of the Board of Directors of Corporation,
performs a valuable service in such capacity for Corporation; and

         B.       The stockholders of Corporation have adopted Bylaws (the
"Bylaws") providing for the indemnification of the officers, directors,
agents and employees of Corporation to the maximum extent authorized by
Section 145 of the Delaware General Corporation Law, as amended (the "Law");
and

         C.       The Bylaws and the Law, by their non-exclusive nature,
permit contracts between Corporation and the members of its Board of
Directors with respect to indemnification of such directors; and

         D.       In accordance with the authorization as provided by the
Law, Corporation may from time to time purchase and maintain a policy or
policies of Directors and Officers Liability Insurance ("D & O Insurance"),
covering certain liabilities which may be incurred by its directors and
officers in the performance of services as directors and officers of
Corporation; and

         E.       As a result of developments affecting the terms, scope and
availability of D & O Insurance there exists general uncertainty as to the
extent and overall desirability of protection afforded members of the Board
of Directors by such D & O Insurance, if any, and by statutory and bylaw
indemnification provisions; and

         F.       In order to induce Director to continue to serve as a
member of the Board of Directors of Corporation, Corporation has determined
and agreed to enter into this contract with Director;

         NOW, THEREFORE, in consideration of Director's continued service as
a director after the date hereof, the parties hereto agree as follows:

         1.       INDEMNITY OF DIRECTOR. Corporation hereby agrees to hold
harmless and indemnify Director to the fullest extent authorized or permitted
by the provisions of the Law, as may be amended from time to time.

         2.       ADDITIONAL INDEMNITY. Subject only to the exclusions set
forth in Section 3 hereof, Corporation hereby further agrees to hold harmless
and indemnify Director:

<Page>

         (a)      against any and all expenses (including attorneys' fees),
witness fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred by Director in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (including an action by or in the right of Corporation) to
which Director is, was or at any time becomes a party, or is threatened to be
made a party, by reason of the fact that Director is, was or at any time
becomes a director, officer, employee or agent of Corporation, or is or was
serving or at any time serves at the request of Corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise; and

         (b)      otherwise to the fullest extent as may be provided to
Director by Corporation under the non-exclusivity provisions of the Bylaws of
Corporation and the Law.

         3.       LIMITATIONS ON ADDITIONAL INDEMNITY. No indemnity pursuant
to Section 2 hereof shall be paid by Corporation:

         (a)      except to the extent the aggregate of losses to be
indemnified thereunder exceeds the sum of such losses for which the Director
is indemnified pursuant to Section 1 hereof or pursuant to any D & O
Insurance purchased and maintained by Corporation;

         (b)      in respect of remuneration paid to Director if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of law;

         (c)      on account of any action, suit or proceeding in which
judgment is rendered against Director for an accounting of profits made from
the purchase or sale by Director of securities of Corporation pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934 and
amendments thereto or similar provisions of any federal, state or local
statutory law;

         (d)      on account of Director's conduct which is finally adjudged
to have been knowingly fraudulent or deliberately dishonest, or to constitute
willful misconduct;

         (e)      on account of Director's conduct which is the subject of an
action, suit or proceeding described in Section 7(c)(ii) hereof;

         (f)      on account of or arising in response to any action, suit or
proceeding (other than an action, suit or proceeding referred to in Section
8(b) hereof) initiated by Director or any of Director's affiliates against
Corporation or any officer, director or stockholder of Corporation unless
such action, suit or proceeding was authorized in the specific case by action
of the Board of Directors of Corporation;

         (g)      on account of any action, suit or proceeding to the extent
that Director is a plaintiff, a counter-complainant or a cross-complainant
therein (other than an action, suit or proceeding permitted by Section 3(f)
hereof); or

         (h)      if a final decision by a Court having jurisdiction in the
matter shall determine that such indemnification is not lawful (and, in this
respect, both Corporation and Director have been

<Page>

advised that the Securities and Exchange Commission believes that
indemnification for liabilities arising under the federal securities laws is
against public policy and is, therefore, unenforceable and that claims for
indemnification should be submitted to appropriate courts for adjudication).

         4.       CONTRIBUTION. If the indemnification provided in Sections 1
and 2 is unavailable and may not be paid to Director for any reason other
than those set forth in paragraphs (b) through (g) of Section 3, then in
respect of any threatened, pending or completed action, suit or proceeding in
which Corporation is or is alleged to be jointly liable with Director (or
would be if joined in such action, suit or proceeding), Corporation shall
contribute to the amount of expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred and
paid or payable by Director in such proportion as is appropriate to reflect
(i) the relative benefits received by Corporation on the one hand and
Director on the other hand from the transaction from which such action, suit
or proceeding arose, and (ii) the relative fault of Corporation on the one
hand and of Director on the other hand in connection with the events which
resulted in such expenses, judgments, fines or settlement amounts, as well as
any other relevant equitable considerations. The relative fault of
Corporation on the one hand and of Director on the other shall be determined
by reference to, among other things, the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent the circumstances
resulting in such expenses, judgments, fines or settlement amounts.
Corporation agrees that it would not be just and equitable if contribution
pursuant to this Section 4 were determined by pro rata allocation or any
other method of allocation which does not take account of the foregoing
equitable considerations.

         5.       CONTINUATION OF OBLIGATIONS. All agreements and obligations
of Corporation contained herein shall continue during the period Director is
a director, officer, employee or agent of Corporation (or is or was serving
at the request of Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise) and shall continue thereafter so long as Director shall
be subject to any possible claim or threatened, pending or completed action,
suit or proceeding, whether civil, criminal or investigative, by reason of
the fact that Director was serving Corporation or such other entity in any
capacity referred to herein.

         6.       NOTIFICATION AND DEFENSE OF CLAIM. Not later than thirty
(30) days after receipt by Director of notice of the commencement of any
action, suit or proceeding, Director will, if a claim in respect thereof is
to be made against Corporation under this Agreement, notify Corporation of
the commencement thereof; but the omission so to notify Corporation will not
relieve it from any liability which it may have to Director otherwise than
under this Agreement. With respect to any such action, suit or proceeding as
to which Director notifies Corporation of the commencement thereof:

         (a)      Corporation will be entitled to participate therein at its
own expense;

         (b)      except as otherwise provided below, to the extent that it
may wish, Corporation jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel
reasonably satisfactory to Director. After notice from Corporation to
Director of its election to assume the defense thereof, Corporation will not
be liable to Director

<Page>

under this Agreement for any legal or other expenses subsequently incurred by
Director in connection with the defense thereof other than reasonable costs
of investigation or as otherwise provided below. Director shall have the
right to employ his own counsel in such action, suit or proceeding but the
fees and expenses of such counsel incurred after notice from Corporation of
its assumption of the defense thereof shall be at the expense of Director
unless (i) the employment of counsel by Director has been authorized by
Corporation, (ii) Director shall have reasonably concluded that there may be
a conflict of interest between Corporation and Director in the conduct of the
defense of such action or (iii) Corporation shall not in fact have employed
counsel to assume the defense of such action, in each of which cases the fees
and expenses of Director's separate counsel shall be at the expense of
Corporation. Corporation shall not be entitled to assume the defense of any
action, suit or proceeding brought by or on behalf of Corporation or as to
which Director shall have made the conclusion provided for in (ii) above; and

         (c)      Corporation shall not be liable to indemnify Director under
this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. Corporation shall be permitted to
settle any action except that it shall not settle any action or claim in any
manner which would impose any penalty, out-of-pocket liability, or limitation
on Director without Director's written consent. Neither Corporation nor
Director will unreasonably withhold its or his consent to any proposed
settlement.

         7.       ADVANCEMENT AND REPAYMENT OF EXPENSES.

         (a)      In the event that Director employs his own counsel pursuant
to Section 6(b)(i) through (iii) above, Corporation shall advance to
Director, prior to any final disposition of any threatened or pending action,
suit or proceeding, whether civil, criminal, administrative or investigative,
any and all reasonable expenses (including legal fees and expenses) incurred
in investigating or defending any such action, suit or proceeding within ten
(10) days after receiving copies of invoices presented to Director for such
expenses.

         (b)      Director agrees that Director will reimburse Corporation
for all reasonable expenses paid by Corporation in defending any civil or
criminal action, suit or proceeding against Director in the event and only to
the extent it shall be ultimately determined by a final judicial decision
(from which there is no right of appeal) that Director is not entitled, under
the provisions of the Law, the Bylaws, this Agreement or otherwise, to be
indemnified by Corporation for such expenses.

         (c)      Notwithstanding the foregoing, Corporation shall not be
required to advance such expenses to Director if Director (i) commences any
action, suit or proceeding as a plaintiff unless such advance is specifically
approved by a majority of the Board of Directors or (ii) is a party to an
action, suit or proceeding brought by Corporation and approved by a majority
of the Board which alleges willful misappropriation of corporate assets by
Director, disclosure of confidential information in violation of Director's
fiduciary or contractual obligations to Corporation, or any other willful and
deliberate breach in bad faith of Director's duty to Corporation or its
shareholders.

<Page>

         8.       Enforcement.

         (a)      Corporation expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on
Corporation hereby in order to induce Director to continue as a director of
Corporation, and acknowledges that Director is relying upon this Agreement in
continuing in such capacity.

         (b)      In the event Director is required to bring any action to
enforce rights or to collect moneys due under this Agreement and is
successful in such action, the Corporation shall reimburse Director for all
Director's reasonable fees and expenses (including attorneys' fees) in
bringing and pursuing such action.

         9.       SUBROGATION. In the event of payment under this agreement,
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Director, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable
Corporation effectively to bring suit to enforce such rights.

         10.      NON-EXCLUSIVITY OF RIGHTS. The rights conferred on Director
by this Agreement shall not be exclusive of any other right which Director
may have or hereafter acquire under any statute, provision of Corporation's
Certificate of Incorporation or Bylaws, agreement, vote of stockholders or
directors, or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office.

         11.      SURVIVAL OF RIGHTS. The rights conferred on Director by
this Agreement shall continue after Director has ceased to be a director,
officer, employee or other agent of Corporation or such other entity.

         12.      SEPARABILITY. Each of the provisions of this Agreement is a
separate and distinct agreement and independent of the others, so that if any
or all of the provisions hereof shall be held to be invalid or unenforceable
to any extent for any reason, such invalidity or unenforceability shall not
affect the validity or enforceability of the other provisions hereof or the
obligation of the Corporation to indemnify the Director to the full extent
provided by the Bylaws or the Law, and the affected provision shall be
construed and enforced so as to effectuate the parties' intent to the maximum
extent possible.

         13.      GOVERNING LAW. This Agreement shall be interpreted and
enforced in accordance with the internal laws of the State of Delaware.

<Page>

         14.      BINDING EFFECT. This Agreement shall be binding upon Director
and upon Corporation, its successors and assigns, and shall inure to the benefit
of Director, his heirs, executors, administrators, personal representatives and
assigns and to the benefit of Corporation, its successors and assigns.

         15.      AMENDMENT AND TERMINATION. No amendment, modification,
termination or cancellation of this Agreement shall be effective unless set
forth in a writing signed by both parties hereto.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.

DIRECTOR:                                 DIGIRAD CORPORATION

                                          By:
--------------------------------              ---------------------------------
(Signature)                                     (Signature)

--------------------------------          -------------------------------------
Print Name                                     Print Name and Title

<Page>

                                    EXHIBIT C

                AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT

Filed separately as an Exhibit to this Registration Statement

<Page>

                                    EXHIBIT D

                                 FORM OF OPINION

<Page>

August 23, 1002                                                    [LETTERHEAD]

To the Investors Listed on the
Schedule of Investors to the
Digirad Corporation Series F Stock Purchase Agreement
dated August 23, 2001

Ladies and Gentlemen:

We have acted as counsel for Digirad Corporation, a Delaware corporation (the
"Company"), in connection with the issuance and sale of shares of its Series
F Preferred Stock pursuant to the Digirad Corporation Series F Stock Purchase
Agreement dated August 23, 2001 (the "Stock Purchase Agreement") among the
Company and you. This opinion letter is being rendered to you pursuant to
Section 4.4 of the Stock Purchase Agreement in connection with the Closing of
the sale of the Series F Preferred Stock. Capitalized terms not otherwise
defined in this opinion letter have the meanings given them in the Stock
Purchase Agreement.

In connection with the opinions expressed herein, we have made such
examination of matters of law and of fact as we considered appropriate or
advisable for purposes hereof. As to matters of fact material to the opinions
expressed herein, we have relied upon the representations and warranties as
to factual matters contained in and made by the Company pursuant to the Stock
Purchase Agreement and upon certificates and statements of government
officials and of officers of the Company. With respect to our opinion in
paragraph 3 regarding issued and outstanding capital stock of the Company,
such opinion is based solely on our review of a certificate of the Company
and of the Company's stock records and resolutions of the Company's Board of
Directors relating to such issuances. We have also examined originals or
copies of such corporate documents or records of the Company as we have
considered appropriate for the opinions expressed herein. We have assumed for
the purposes of this opinion letter the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of the documents
submitted to us as originals, the conformity to the original documents of all
documents submitted to us as certified, facsimile or photostatic copies, and
the authenticity of the originals of such copies.

In rendering this opinion letter we have also assumed: (A) that the Stock
Purchase Agreement and the Amended and Restated Investors' Rights Agreement
(the "Investors' Rights Agreement") (collectively, the "Transaction
Agreements") have been duly and validly executed and delivered by you or on
your behalf, that each of you has the power to enter into and perform all
your obligations thereunder and has taken any and all necessary corporate,
partnership or other relevant action to authorize the Transaction Agreements,
and that the Transaction Agreements constitute valid, legal, binding and
enforceable obligations upon you; (B) that the representations and warranties
made in the Stock Purchase Agreement by you are true and

<Page>

August 23, 2001
Page 2

correct; (C) that any wire transfers, drafts or checks tendered by you will
be honored; (D) if you are a corporation or other entity, that you have filed
any required state franchise, income or similar tax returns and have paid any
required state franchise, income or similar taxes; and (E) if you are a small
business investment company subject to the Small Business Investment Act of
1958, as amended, that you have complied with the provisions of such Act and
the regulations promulgated thereunder (the "SBIA Laws").

As used in this opinion letter, the expression "we are not aware" or the
phrase "to our knowledge," or any similar expression or phrase with respect
to our knowledge of matters of fact, means as to matters of fact that, based
on the actual knowledge of individual attorneys within the firm principally
responsible for handling current matters for the Company (and not including
any constructive or imputed notice of any information), and after an
examination of documents referred to herein and after inquiries of certain
officers of the Company, no facts have been disclosed to us that have caused
us to conclude that the opinions expressed are factually incorrect; but
beyond that we have made no factual investigation for the purposes of
rendering this opinion letter. Specifically, but without limitation, we have
not searched the dockets of any courts and we have made no inquiries of
securities holders or employees of the Company, other than such officers.
Nothing in this opinion or any inference from the fact that we represent the
Company shall be construed to imply that we are opining or representing to
you that the Transaction Agreements do not contain any untrue statement of a
material fact or do not omit to state a material fact necessary to make the
statements therein not misleading.

This opinion letter relates solely to the laws of the State of California,
the General Corporation Law of the State of Delaware and the federal law of
the United States and we express no opinion with respect to the effect or
application of any other laws. Special rulings of authorities administering
such laws or opinions of other counsel have not been sought or obtained.

Based upon our examination of and reliance upon the foregoing and subject to
the limitations, exceptions, qualifications and assumptions set forth below,
we are of the opinion that as of the date hereof:

         1. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, and the Company
has the requisite corporate power and authority to own its properties and to
conduct its business as, to our knowledge, it is presently conducted. The
Company is qualified to do business as a foreign corporation in the states of
California and Florida.

         2. The Company has the requisite corporate power and authority to
execute, deliver and perform the Transaction Agreements. Each of the
Transaction Agreements has been duly and validly authorized by the Company,
duly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company, enforceable by you against the Company in
accordance with its terms.

<Page>

August 23, 2001
Page 3

         3. The capitalization of the Company is as follows:

                  (a) PREFERRED STOCK. The Company has 30,321,108 authorized
shares of Preferred Stock, par value $0.001 per share (the "Preferred
Stock"), of which (i) 2,250,000 shares have been designated Series A
Preferred Stock, all of which are currently issued and outstanding, (ii)
2,281,000 shares have been designated Series B Preferred Stock, all of which
are currently issued and outstanding, (iii) 4,800,000 shares have been
designated Series C Preferred Stock, all of which are currently issued and
outstanding, (iv) 8,668,140 shares have been designated Series D Preferred
Stock, all of which are currently issued and outstanding, (v) 9,583,506
shares have been designated Series E Preferred Stock, 9,130,428 shares of
which are currently issued and outstanding, and (vi) 2,738,462 shares have
been designated Series F Preferred Stock and some or all or which may be
purchased pursuant to the Stock Purchase Agreement. Such shares of
outstanding Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock and Series E Preferred Stock have
been duly authorized and validly issued, are nonassessable and fully paid.
The shares of Series F Preferred Stock to be purchased at the Closing have
been duly authorized and, upon purchase at the Closing pursuant to the terms
of the Stock Purchase Agreement, will be validly issued, nonassessable and
fully paid. The respective rights, privileges, restrictions and preferences
of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock, Series D Preferred Stock, Series E Preferred Stock and Series F
Preferred Stock are as stated in the Company's Amended and Restated
Certificate of Incorporation attached as Exhibit A to the Stock Purchase
Agreement.

                  (b) COMMON STOCK. The Company has 42,738,462 authorized
shares of Common Stock, par value $0.001 per share (the "Common Stock"),
4,526,474 shares of which are currently issued and outstanding. Such
4,526,474 shares of outstanding Common Stock have been duly authorized and
validly issued, are nonassessable, and, to our knowledge, are fully paid.

                  (c) The Common Stock issuable upon conversion of the Series
F Preferred Stock to be purchased at the Closing has been duly and validly
reserved for issuance and, when and if issued upon such conversion in
accordance with the Company's Amended and Restated Certificate of
Incorporation, will be validly issued, fully paid and nonassessable.

                  (d) There are no statutory or charter preemptive rights
nor, to our knowledge, are there any options, warrants, conversion privileges
or other rights (or agreements for any such rights) outstanding to purchase
or otherwise obtain from the Company any of the Company's equity securities,
except for (i) the conversion privileges of the Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock and Series F Preferred Stock, (ii) outstanding
options to purchase 5,952,426 shares of Common Stock pursuant to options
granted to employees, directors, consultants or advisors of the Company under
stock option and restricted stock purchase agreements approved by the Board
of Directors , (iii) outstanding warrants to purchase 403,078 shares of
Series E Preferred Stock, (iv)

<Page>

August 23, 2001
Page 4

warrants to purchase 100,500 shares of Common Stock, (v) the right of first
offer as set forth in Section 1.2 of the Investors' Rights Agreement, (vi)
the right to receive up to 150,000 shares of the Company's Common Stock
pursuant to that certain Consulting Agreement by and between Digirad Imaging
Systems, Inc. and Jeffrey Mandler dated September 9, 2000, (vii) the right to
receive up to 100,000 shares of the Company's Common Stock pursuant to that
certain Asset Purchase Agreement by and among the Company, Orion Imaging
Systems, Inc., Florida Cardiology and Nuclear Medicine Group, P.A. and Dr.
John Kilgore, dated August 31, 2000, as amended (the "Florida Cardiology
Agreement"); (viii) the right to receive an indeterminate number of shares of
the Company's Common or Preferred Stock pursuant to the Florida Cardiology
Agreement; (ix) the right to receive a warrant to purchase up to 100,000
shares of the Company's Common Stock pursuant to that certain Consulting
Agreement with McAdams and Witham Consulting ("MWC") dated July 31 2001 (the
"MWC Agreement"); (x) the right to receive warrants to purchase up to 100,000
shares of the Company's Common Stock pursuant to the MWC Agreement; and (xi)
the right to receive warrants to purchase an indeterminate number of shares
of the Company's Common Stock pursuant to the MWC Agreement.

         4. Other than in connection with any securities laws (with respect
to which we direct you to paragraph 6 below), the Company's execution and
delivery of, and its performance and compliance as of the date hereof with
the terms of, the Transaction Agreements (including the issuance of the
Series F Preferred Stock and the Common Stock issuable upon conversion
thereof), do not violate any provision of any federal, Delaware corporate or
California law, rule or regulation applicable to the Company or any provision
of the Company's Amended and Restated Certificate of Incorporation or Bylaws
and do not conflict with or constitute a default under the provisions of any
judgment, writ, decree or order specifically identified in the Schedule of
Exceptions or the material provisions of any of the material agreements
specifically identified in the Schedule of Exceptions.

         5. Other than in connection with any securities laws (with respect
to which we direct you to paragraph 6 below), all consents, approvals,
permits, orders or authorizations of, and all qualifications by and
registrations with, any federal or Delaware corporate or California state
governmental authority on the part of the Company required in connection with
the execution and delivery of the Stock Purchase Agreement and consummation
at the Closing of the transactions contemplated by the Stock Purchase
Agreement have been obtained, and are effective, and we are not aware of any
proceedings, or written threat of any proceedings, that question the validity
thereof.

         6. On the assumption that the representations of the Investors in
the Stock Purchase Agreement are correct, the offer and sale of the Series F
Preferred Stock to the Investors pursuant to the terms of the Stock Purchase
Agreement are exempt from the registration requirement of Section 5 of the
Securities Act of 1933, as amended, and from the qualification requirement of
the California Corporate Securities Law of 1968, as amended, and, under such
securities laws as they presently exist, the issuance of Common Stock to you
upon conversion of

<Page>

August 23, 2001
Page 5

the Series F Preferred Stock would also be exempt from such registration and
qualification requirements.

         7. We are not aware that there is any action, proceeding or
governmental investigation pending, or threatened in writing, against the
Company which questions the validity of the Transaction Agreements or the
right of the Company to enter into the Transaction Agreements nor are we
aware of, except as disclosed in Section 2.12 of the Schedule of Exceptions,
any litigation pending, or threatened in writing, against the Company by
reason of the proposed activities of the Company, the past employment
relationships of its officers, directors or employees, or negotiations by the
Company with possible investors in the Company or its business.

Our opinions expressed above are specifically subject to the following
limitations, exceptions, qualifications and assumptions:

         A. The legality, validity, binding nature and enforceability of the
Company's obligations under the Transaction Agreements may be subject to or
limited by (1) bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent transfer and other similar laws affecting the rights
of creditors generally; (2) general principles of equity (whether relief is
sought in a proceeding at law or in equity), including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing, and the
discretion of any court of competent jurisdiction in awarding specific
performance or injunctive relief and other equitable remedies; and (3)
without limiting the generality of the foregoing, (a) principles requiring
the consideration of the impracticability or impossibility of performance of
the Company's obligations at the time of the attempted enforcement of such
obligations, and (b) the effect of California court decisions and statutes
which indicate that provisions of the Transaction Agreements which permit any
of you to take action or make determinations may be subject to a requirement
that such action be taken or such determinations be made on a reasonable
basis in good faith or that it be shown that such action is reasonably
necessary for your protection.

         B. We express no opinion as to the Company's or this transaction's
compliance or noncompliance with applicable federal or state antifraud or
antitrust statutes, laws, rules and regulations or the Exon-Florio Amendment.

         C. We express no opinion concerning the past, present or future fair
market value of any securities.

         D. We express no opinion as to the enforceability under certain
circumstances of any provisions indemnifying a party against, or requiring
contributions toward, that party's liability for its own wrongful or
negligent acts, or where indemnification or contribution is contrary to
public policy or prohibited by law. In this regard, we advise you that in the
opinion of the Securities and Exchange Commission, provisions regarding
indemnification of directors, officers

<Page>

August 23, 2001
Page 6

and controlling persons of an issuer against liabilities arising under the
Securities Act of 1933, as amended, are against public policy and are
therefore unenforceable.

         E. We express no opinion as to the enforceability under certain
circumstances of any provisions prohibiting waivers of any terms of the
Transaction Agreements other than in writing, or prohibiting oral
modifications thereof or modification by course of dealing. In addition, our
opinions are subject to the effect of judicial decisions which may permit the
introduction of extrinsic evidence to interpret the terms of written
contracts.

         F. We express no opinion as to the effect of Section 1670.5 of the
California Civil Code or any other California law, federal law or equitable
principle which provides that a court may refuse to enforce, or may limit the
application of, a contract or any clause thereof which the court finds to
have been unconscionable at the time it was made or contrary to public policy.

         G. We express no opinion as to the effect of Sections 1203 and
1102(3) of the California Uniform Commercial Code or any other California
law, federal law or equitable principle, providing for an obligation of good
faith in the performance or enforcement of contracts and prohibiting
disclaimer of such obligation.

         H. Our opinions in paragraphs 4 and 5 above are limited to laws and
regulations normally applicable to transactions of the type contemplated in
the Transaction Agreements and do not extend to licenses, permits and
approvals necessary for the conduct of the Company's business. In addition
and without limiting the previous sentence, we express no opinion herein with
respect to the effect of any land use, safety, hazardous material,
environmental or similar law, or any local or regional law. Further, we
express no opinion as to the effect of or compliance with any state or
federal laws or regulations applicable to the transactions contemplated by
the Transaction Agreements because of the nature of the business of any party
thereto other than the Company. Also, we express no opinion with respect to
any patent, copyright, trademark or other intellectual property matter, or as
to the statutes, regulations, treaties or common laws of any nation, state or
jurisdiction with regard thereto.

         I. In connection with our opinion in paragraph 4 relating to the
agreements listed on the Schedule of Exceptions, we have not reviewed, and
express no opinion on, (i) financial covenants or similar provisions
requiring financial calculations or determinations to ascertain whether there
is any such conflict or (ii) provisions relating to the occurrence of a
"material adverse event" or words of similar import. In addition, our
opinions are subject to the effect of judicial decisions which may permit the
introduction of extrinsic evidence to interpret the terms of written
contracts. Moreover, to the extent that any of the agreements listed on the
Schedule of Exceptions are governed by the laws of any jurisdiction other
than the State of California our opinion relating to those agreements is
based solely upon the plain meaning of their language without regard to
interpretation or construction that might be indicated by the laws governing
those agreements.

<Page>

August 23, 2001
Page 7

         J. We express no opinion as to your compliance with any federal or
state law relating to your legal or regulatory status or the nature of your
business.

         K. We express no opinion as to the compliance of the Company or the
sale of the Series F Preferred Stock to the Investors with the provisions of
the SBIA Laws, except to the extent that such compliance relates to the sale
of Series F Preferred Stock to Investors which are expressly identified in
the Stock Purchase Agreement as being small business investment companies.

         L. We express no opinion as to the effect on our opinion in
paragraph 6 above of any subsequent public offering of securities of the
Company.

         M. We express no opinion as to the effect of subsequent issuances of
securities of the Company, to the extent that further issuances which may be
integrated with the Closing may include purchasers that do not meet the
definition of "accredited investors" under Rule 501 of Regulation D and
equivalent definitions under state securities or "blue sky" laws and to the
extent that notwithstanding its reservation of shares the Company may issue
so many shares of Common Stock that there are not enough remaining authorized
but unissued shares of Common Stock for the conversion of the Series F
Preferred Stock (or may issue securities which by antidilution adjustment so
reduce the Conversion Price (as such term is defined in the Company's Amended
and Restated Certificate of Incorporation) of the Series F Preferred Stock
and/or other Company derivative securities that the outstanding shares of the
Series F Preferred Stock become convertible for more shares of Common Stock
than remain authorized but unissued).

         N. We express no opinion as to:

                  (1) The effect on the redemption and liquidation provisions
of the Amended and Restated Certificate of Incorporation of applicable state
law, federal law or equitable principles restricting in certain circumstances
distributions by a corporation to its shareholders, relating to dissenters'
rights or relating to involuntary dissolution;

                  (2) The enforceability under certain circumstances of
provisions to the effect that rights or remedies may be exercised without
notice, or that failure to exercise or delay in exercising rights or remedies
will not operate as a waiver of any such right or remedy;

                  (3) Any provision providing for the exclusive jurisdiction
of a particular court or purporting to waive rights to trial by jury, service
of process or objections to the laying of venue or to forum on the basis of
forum NON CONVENIENS, in connection with any litigation arising out of or
pertaining to the Transaction Agreements;

<Page>

August 23, 2001
Page 8

                  (4) Section 2.4 of the Stock Purchase Agreement and Section
5.2 of the Investors' Rights Agreement to the extent that each purports to
exclude conflict of law principles under California law;

                  (5) The effect of any California or Delaware law, federal
law or equitable principles which limit the amount of attorneys' fees that
can be recovered under certain circumstances.

This opinion letter is rendered as of the date first written above solely for
your benefit in connection with the Stock Purchase Agreement and may not be
delivered to, quoted or relied upon by any person other than you, or for any
other purpose, without our prior written consent. Our opinion is expressly
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company. We
assume no obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinions expressed herein.

Very truly yours,

BROBECK PHLEGER & HARRISON LLP<Page>

                                                                   EXHIBIT 10.19

                               DIGIRAD CORPORATION

                AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT

                                 August 23, 2001

<Page>

                           INVESTORS' RIGHTS AGREEMENT

         This AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (this
"Agreement") is made as of the 23rd day of August, 2001, by and between
Digirad Corporation, a Delaware corporation (the "Company"), holders of a
majority of the shares held by the founders of the Company identified on
SCHEDULE A attached hereto under the heading "Founders" (the "Founders"),
holders of a majority of the Preferred Stock of the Company identified on
SCHEDULE A attached hereto under the heading "Existing Investors" (the
"Existing Investors") and each of the purchasers of the Series F Preferred
Stock of the Company identified on SCHEDULE A attached hereto under the
heading "New Investors" and Silicon Valley Bank (collectively, the "New
Investors"). The Existing Investors and the New Investors are collectively
referred to herein as, individually, an "Investor" and collectively, the
"Investors."

                                    RECITALS

         A. The Company has previously sold and issued shares of its capital
stock to the Founders and to the Existing Investors, pursuant to which the
Founders and the Existing Investors have become parties to that certain
Investors' Rights Agreement dated November 10, 2000, as amended (the
"Investors' Rights Agreement");

         B. The Company desires to sell and issue shares of its Series F
Preferred Stock to the New Investors pursuant to that certain Series F
Preferred Stock Purchase Agreement of even date herewith (the "Purchase
Agreement"); and

         C. As an inducement to the New Investors to purchase shares of its
Series F Preferred Stock, the Company, the Founders and the Existing
Investors all desire to completely amend and restate the Investors' Rights
Agreement pursuant to Section 5.7 with respect to the matters set forth
therein.

         NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein it is hereby agreed:

1.       COVENANTS OF THE COMPANY.

                  1.1 BOARD EXPENSES. The Company shall reimburse the Board
members for all reasonable out-of-pocket travel and expenses incurred by such
directors in attending the meetings of the Board and committees of the Board
of which any such director is a member.

                  1.2 RIGHT OF FIRST OFFER. Subject to the terms and
conditions specified in this Section 1.2, the Company hereby grants to
Investors, and to Jack F. Butler, Sr. and Clinton L. Lingren (and their
respective transferees) (collectively, the "Founders" and each an "Offeree"),
a right of first offer with respect to future sales by the Company of its
Shares (as hereinafter defined). Investors shall be entitled to apportion the
right of the first offer hereby granted among themselves and their partners
and affiliates in such proportions as they deem appropriate.

<Page>

                  Each time the Company proposes to offer any shares of, or
securities convertible into or exercisable for, any class of its capital
stock (the "Shares"), the Company shall first make an offering of such Shares
to each Offeree in accordance with the following provisions:

                  (a) The Company shall deliver a notice by certified mail
("Notice") to the Offeree stating (i) its bona fide intention to offer or
issue such Shares, (ii) the number of such Shares to be offered, and (iii)
the price, if any, for which it proposes to offer such Shares.

                  (b) Within 20 calendar days after receipt of the Notice,
the Offeree may elect to purchase or obtain, at the price and on the terms
specified in the Notice, up to that portion of such Shares which equals the
proportion that the number of shares of Common Stock issued and held, or
issuable upon conversion of the Preferred Stock then held, by such Offeree
bears to the total number of shares of outstanding Common Stock and Common
Stock issuable upon conversion of the Preferred Stock then outstanding. The
Company shall promptly in writing, inform each Offeree which purchases all
the shares available to it (a "Fully Exercising Offeree") of any other
Offeree's failure to do likewise. During the 10-day period commencing after
receipt of such information, each Fully Exercising Offeree shall be entitled
to obtain that portion of the shares subject to such right of first refusal
and not subscribed for by the Offerees which is equal to the proportion that
the number of shares of Common Stock issued and held , or issuable upon
conversion of the Preferred Stock then held, by such Fully Exercising Offeree
bears to the total number of shares of Common Stock issued and held, or
issuable upon conversion of the Preferred Stock then held, by all Fully
Exercising Offerees who wish to purchase some of the unsubscribed shares.

                  (c) If all such Shares referred to in the Notice are not
elected to be obtained as provided in subsection 1.2(b) hereof, the Company
may, during the 60-day period following the expiration of the period provided
in subsection 1.2(b) hereof, offer the remaining unsubscribed Shares to any
person or persons at a price not less than that, and upon terms no more
favorable to the offeree than those, specified in the Notice. If the Company
does not enter into an agreement for the sale of the Shares within such
period, or if such agreement is not consummated within 60 days of the
execution thereof, the right provided hereunder shall be deemed to be revived
and such Shares shall not be offered unless first reoffered to the Offerees
in accordance herewith.

                  (d) The right of first offer granted in this Section 1.2
shall not be applicable (i) to the issuance or sale of shares of Common
Stock, or options granted to employees, directors, consultants or advisors of
the Company under stock option and restricted stock purchase agreements
approved by the Board of Directors commencing as of May 1994 (each, an
"Option, and collectively, "Options") or warrants therefor, to employees,
directors, consultants or advisors of the Company, provided each such person
executes an agreement relating to such issuance or sale in substantially the
form as approved by the Company's Board of Directors, (ii) to the issuance
and sale of the Company's securities to a corporation, partnership,
educational institution or other entity in connection with a research and
development partnership or licensing or other collaborative arrangement
between the Company and such institution or entity, (iii) to or after
consummation of a bona fide, firmly underwritten public offering of shares of
the Company's Common Stock registered under the Securities Act of 1933, as
amended (the "Securities Act"), which results in gross proceeds of at least
$15,000,000 at a price per share of

                                    -2-
<Page>

at least $7.50 (adjusted for any subsequent stock splits, stock dividends or
other recapitalizations), (iv) to the issuance of securities pursuant to the
conversion or exercise of convertible or exercisable securities, (v) to the
issuance of securities in connection with a bona fide business acquisition of
or by the Company, whether by merger, consolidation, sale of assets, sale or
exchange of stock or otherwise, and (vi) to the issuance of securities in
connection with credit agreements with equipment lessors or commercial
lenders.

                  (e) Any term of this Section 1.2 may be amended and the
observance of any term of this Section 1.2 may be waived (either generally or
in a particular instance and either retroactively or prospectively), only
with the written consent of (i) the Company, (ii) the holders of a majority
of the shares held by the Founders, and (iii) the Investors holding of a
majority of the Common Stock issued or issuable upon conversion of the Series
A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series
D Preferred Stock, Series E Preferred Stock and Series F Preferred Stock,
voting as a single class. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each holder of any securities of the
Company at the time outstanding (including securities into which such
securities are convertible) with rights under this Section 1.2, each future
holder of all such securities, and the Company.

                  1.3 BOARD OBSERVATION RIGHTS. A person beneficially holding
or controlling 300,000 (adjusted for stock splits, reverse stock splits, and
similar changes in capitalization) or more shares of the Company's Series A
Preferred Stock who is not a member of the Company's Board of Directors shall
receive from the Company, with such limitations as are provided herein,
notice of all meetings for the Board of Directors, and such stockholder shall
receive any materials distributed for such meeting and may attend such
meetings; provided, however, that the Company may require as a condition
precedent that such stockholder in requesting to attend any meeting of the
Board of Directors shall agree to hold it in confidence and trust all
information received during or in connection with such meeting and require
that such stockholder sign a confidentiality agreement with the Company and,
provided further, that the Company reserves the right not to provide
information and to exclude such stockholder from any meeting or portion
thereof if attendance at such meeting by such stockholder or dissemination of
any information at such meeting to such stockholder would, in the good faith
judgment of the Board of Directors, result in a conflict of interest. If such
stockholder in his or her good faith judgment believes that an item to be
discussed by the Board of Directors would result in any conflict of interest,
such stockholder shall promptly bring such conflict to the attention of the
stockholder on the Board. In no event shall any such stockholder have the
right to vote at any such meeting or shall any provision of this paragraph
waive any obligation of confidentiality to the Company owed by such
stockholder.

2.       REGISTRATION RIGHTS.

         The Company covenants and agrees as follows:

                  2.1 DEFINITIONS. For purposes of this Section 2:

                  (a) The terms "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with

                                    -3-
<Page>

the Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document;

                  (b) The term "Registrable Securities" means (i) the Common
Stock issuable or issued upon conversion of the Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock and Series F Preferred Stock and (ii) any Common
Stock of the Company issued as (or issuable upon the conversion or exercise
of any warrant, right or other security which is issued as) a dividend or
other distribution with respect to, or in exchange for or in replacement of,
such Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock, Series D Preferred Stock, Series E Preferred Stock, Series F Preferred
Stock or Common Stock, excluding in all cases, however, any Registrable
Securities sold by a person in a transaction in which such person's
registration rights are not assigned;

                  (c) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are exercisable
or convertible into, Registrable Securities;

                  (d) The term "Holder" means any person owning or having the
right to acquire Registrable Securities or any assignee thereof in accordance
with Section 2.13 hereof; and

                  (e) The term "Form S-3" means such form under the
Securities Act as in effect on the date hereof or any registration form under
the Securities Act subsequently adopted by the SEC in lieu of Form S-3 which
permits inclusion or incorporation of substantial information by reference to
other documents filed by the Company with the SEC.

                  2.2 REQUEST FOR REGISTRATION.

                  (a) If the Company shall receive at any time after the
earlier of (i) January 1, 2002 or (ii) one year after the effective date of
the first registration statement for a public offering of securities of the
Company (other than a registration statement relating either to the sale of
securities to employees of the Company pursuant to a stock option, stock
purchase or similar plan or a SEC Rule 145 transaction), a written request
from the Holders of at least 30% of the Registrable Securities then
outstanding (or at least 25% of the Registrable Securities then outstanding
if such request is made following any Closing of the offering referred to in
subsection (ii) of this Section 2.2(a)) that the Company file a registration
statement under the Securities Act covering the registration of at least 20%
of the Registrable Securities then outstanding (or a lesser percent if the
anticipated aggregate offering price, net of underwriting discounts and
commissions, would exceed $15,000,000), then the Company shall, within 10
days of the receipt thereof, give written notice of such request to all
Holders and shall, subject to the limitations of subsection 2.2(b), file as
soon as practicable, and in any event within 60 days of the receipt of such
request, a registration statement under the Securities Act covering all
Registrable Securities which the Holders request to be registered within 20
days of the mailing of such notice by the Company in accordance with Section
5.5.

                                    -4-
<Page>

                  (b) If the Holders initiating the registration request
hereunder (the "Initiating Holders") intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall
so advise the Company as a part of their request made pursuant to this
Section 2.2 and the Company shall include such information in the written
notice referred to in subsection 2.2(a). In such event, the right of any
Holder to include such Holder's Registrable Securities in such registration
shall be conditioned upon such Holder's participation in such underwriting
and the inclusion of such Holder's Registrable Securities in the underwriting
(unless otherwise mutually agreed by a majority in interest of the Initiating
Holders and such Holder) to the extent provided herein. All Holders proposing
to distribute their securities through such underwriting shall (together with
the Company as provided in subsection 2.4(e)) enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for
such underwriting by the Company and consented to by a majority in interest
of the Holders proposing to distribute securities through such underwriting
(which consent shall not be unreasonably withheld). Notwithstanding any other
provision of this Section 2.2, if the underwriter advises the Company and the
Initiating Holders in writing that marketing factors require a limitation of
the number of shares to be underwritten, then the Company shall so advise all
Holders of Registrable Securities which would otherwise be underwritten
pursuant hereto, and the number of shares of Registrable Securities that may
be included in the underwriting shall be allocated among all Holders thereof,
including the Initiating Holders, in proportion (as nearly as practicable) to
the number of Registrable Securities of the Company owned by each Holder
including securities in the underwriting.

                  (c) The Company is obligated to effect only two such
registrations pursuant to this Section 2.2; provided, however, that the
Company shall not be obligated to effect a registration pursuant to this
Section 2.2 if within the 12 months immediately preceding a request hereunder
the Company has effected a demand registration under this Section 2.2.

                  (d) Notwithstanding the foregoing, if the Company shall
furnish to Holders requesting a registration statement pursuant to this
Section 2.2 a certificate signed by the President of the Company stating that
in the good faith judgment of the Board of Directors of the Company it would
be seriously detrimental to the Company and its stockholders for such
registration statement to be filed and it is therefore essential to defer the
filing of such registration statement, the Company shall have the right to
defer such filing for a period of not more than 90 days after receipt of the
request of the Initiating Holders; provided, however, that the Company may
not utilize this right more than twice in the aggregate and not more than
once in any 12-month period.

                  2.3 COMPANY REGISTRATION. If (but without any obligation to
do so) the Company proposes to register (including for this purpose a
registration effected by the Company for stockholders other than the Holders)
any of its stock or other securities under the Securities Act in connection
with the public offering of such securities solely for cash (other than a
registration relating solely to the sale of securities to participants in a
Company stock plan, or a registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities), the
Company shall, at such time, promptly give each Holder written notice of such
registration. Upon the written request of each Holder given within 20 days
after mailing of such

                                      -5-
<Page>

notice by the Company in accordance with Section 5.5, the Company shall,
subject to the provisions of Section 2.8, cause to be registered under the
Securities Act all of the Registrable Securities that each such Holder has
requested to be registered. No Holder shall have any rights under this
Section 2.3 unless it is the owner of at least 200,000 shares of the
Company's Common Stock either directly or through ownership of Preferred
Stock, as adjusted to reflect any stock splits, stock dividends or other
recapitalizations.

                  2.4 OBLIGATIONS OF THE COMPANY. Whenever required under
this Section 2 to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:

                  (a) Prepare and file with the Securities and Exchange
Commission (the "SEC") a registration statement with respect to such
Registrable Securities and use its reasonable efforts to cause such
registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder,
keep such registration statement effective for up to 120 days.

                  (b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement.

                  (c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.

                  (d) Use its reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities
or blue sky laws of such jurisdictions as shall be reasonably requested by
the Holders, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.

                  (e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering. Each
Holder participating in such underwriting shall also enter into and perform
its obligations under such an agreement.

                  (f) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the
circumstances then existing.

                  (g) Furnish, at the request of any Holder requesting
registration of Registrable

                                    -6-
<Page>

Securities pursuant to this Section 2, on the date that such Registrable
Securities are delivered to the underwriters for sale in connection with a
registration pursuant to this Section 2, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to
such securities becomes effective, (i) an opinion, dated such date, of the
counsel representing the Company for the purposes of such registration, in
form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities and (ii) a letter dated
such date, from the independent certified public accountants of the Company,
in form and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to
the underwriters, if any, and to the Holders requesting registration of
Registrable Securities.

         2.5 FURNISH INFORMATION.

                  (a) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Section 2 that the selling
Holders shall furnish to the Company such information regarding themselves,
the Registrable Securities held by them, and the intended method of
disposition of such securities as shall be required to effect the
registration of the Registrable Securities.

                  (b) The Company shall have no obligation with respect to
any registration requested pursuant to Section 2.2 or Section 2.12 if, due to
the operation of subsection 2.5(a), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Company's
obligation to initiate such registration as specified in subsection 2.2(a) or
subsection 2.12(b)(ii), whichever is applicable.

                  2.6 EXPENSES OF DEMAND REGISTRATION. The Company shall bear
and pay all expenses other than underwriting discounts and commissions
incurred in connection with registrations, filings or qualifications pursuant
to Section 2.2, including (without limitation) all registration, filing and
qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company and the reasonable fees and expenses of one counsel
for the selling Holders selected by them; provided, however, that the Company
shall not be required to pay for any expenses of any registration proceeding
begun pursuant to Section 2.2 if the registration request is subsequently
withdrawn at the request of the Holders of a majority of the Registrable
Securities to be registered (in which case all participating Holders shall
bear such expenses), unless the Holders of a majority of the Registrable
Securities agree to forfeit their right to one demand registration pursuant
to Section 2.2; provided further, however, that if at the time of such
withdrawal, the Holders have learned of a material adverse change in the
condition, business or prospects of the Company from that known to the
Holders at the time of their request, then the Holders shall not be required
to pay any of such expenses and shall retain their rights pursuant to Section
2.2.

                  2.7 EXPENSES OF COMPANY REGISTRATION. The Company shall
bear and pay all expenses incurred in connection with any registration,
filing or qualification of Registrable

                                     -7-
<Page>

Securities with respect to the registrations pursuant to Section 2.3 for each
Holder (which right may be assigned as provided in Section 2.13), including
(without limitation) all registration, filing and qualification fees,
printers' and accounting fees relating or apportionable thereto and the
reasonable fees and expenses of one counsel for the selling Holders selected
by them, but excluding underwriting discounts and commissions relating to
Registrable Securities.

                  2.8 UNDERWRITING REQUIREMENTS. In connection with any
offering involving an underwriting of shares being issued by the Company, the
Company shall not be required under Section 2.3 to include any of the
Holders' securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected
by it, and then only in such quantity as will not, in the opinion of the
underwriters, jeopardize the success of the offering by the Company. If the
total number of securities, including Registrable Securities, requested by
stockholders to be included in such offering exceeds the number of securities
sold other than by the Company that the underwriters reasonably believe
compatible with the success of the offering, then the Company shall be
required to include in the offering only that number of such securities,
including Registrable Securities, which the underwriters believe will not
jeopardize the success of the offering (the securities so included to be
apportioned pro rata among the selling stockholders according to the total
number of securities entitled to be included therein owned by each selling
stockholder or in such other proportions as shall mutually be agreed to by
such selling stockholders) but in no event shall the number of securities of
the selling Holders included in the offering be reduced below 30% of the
total number of securities included in such offering, unless such offering is
the initial public offering of the Company's securities in which case the
selling stockholders may be excluded if the underwriters make the
determination described above and no other stockholder's securities are
included.

                  2.9 DELAY OF REGISTRATION. No Holder shall have any right
to obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect
to the interpretation or implementation of this Section 2.

                  2.10 INDEMNIFICATION. In the event any Registrable
Securities are included in a registration statement under this Section 2:

                  (a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the officers and directors of each
Holder, any underwriter (as defined in the Securities Act) for such Holder
and each person, if any, who controls such Holder or underwriter within the
meaning of the Securities Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), against any losses, claims, damages or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations (each, a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary
to make the

                                    -8-
<Page>

statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law; and the Company will
reimburse each such Holder, officer or director, underwriter or controlling
person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement
contained in this subsection 2.10(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any
such case for any such loss, claim, damage, liability or action to the extent
that it arises out of or is based upon a Violation which occurs in reliance
upon and in conformity with written information furnished expressly for use
in connection with such registration by any such Holder, officer, director,
underwriter or controlling person.

                  (b) To the extent permitted by law, each selling Holder
will severally and not jointly indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the registration
statement, each person, if any, who controls the Company within the meaning
of the Securities Act, any underwriter and any other Holder selling
securities in such registration statement or any of its directors or officers
or any person who controls such Holder, against any losses, claims, damages
or liabilities (joint or several) to which the Company or any such director,
officer, controlling person, or underwriter or controlling person, or other
such Holder or director, officer or controlling person may become subject,
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in connection with such registration; and each such Holder will
reimburse any legal or other expenses reasonably incurred by the Company or
any such director, officer, controlling person, underwriter or controlling
person, other Holder, officer, director, or controlling person in connection
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
subsection 2.10(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld; provided, that, in no event shall any indemnity under this
subsection 2.10(b) exceed the net proceeds (after deducting any discounts or
commissions received by an underwriter in connection with such registration)
from the offering received by such Holder.

                  (c) Promptly after receipt by an indemnified party under
this Section 2.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 2.10,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the
fees and

                                     -9-
<Page>

expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of its obligations under this Agreement,
except to the extent, but only to the extent, that the indemnifying party's
ability to defend against such action is actually and materially impaired as
a result of the failure to give such notice. The omission to so deliver
written notice to the indemnifying party will not relieve the indemnifying
party of any liability that it may have to any indemnified party otherwise
than under this Section 2.10.

                  (d) If the indemnification provided for in Sections
2.10(a), (b) and (c) is unavailable to an indemnified party under such
Sections (other than by reason of exceptions provided in those Sections) in
respect of any claims referred to in such Sections, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such claims in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and of the Holders of
Registrable Securities on the other in connection with the statements or
omissions which resulted in such claims as well as any other relevant
equitable considerations. The amount paid or payable by a party as a result
of the claims referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The relative fault of the
Company on the one hand and of the Holders of Registrable Securities on the
other shall be determined by reference to, among other things, whether the
applicable misstatement or alleged misstatement relates to information
supplied by the Company or by the applicable Holder of Registrable Securities
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such misstatement or alleged misstatement.
The Company and each Holder of Registrable Securities agree that it would not
be just and equitable if contribution pursuant to this Section 2.10(d) were
determined by PRO RATA allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 2.10(d), no Holder shall be
required to contribute any amount in excess of the net proceeds (after
deducting any discounts or commissions received by an underwriter in
connection with such registration) from the offering received by such Holder.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
hereunder from any person who was not guilty of such fraudulent
misrepresentation.

                  (e) The obligations of the Company and Holders under this
Section 2.10 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 2, and otherwise.

                  2.11 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a
view to making available to the Holders the benefits of Rule 144 promulgated
under the Securities Act and any other rule or regulation of the SEC that may
at any time permit a Holder to sell securities of the Company to the public
without registration or pursuant to a registration on Form S-3, the Company
agrees to:

                                    -10-
<Page>

                  (a) make and keep public information available, as those
terms are understood and defined in SEC Rule 144, at all times after 90 days
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public;

                  (b) take such action, including the voluntary registration
of its Common Stock under section 12 of the Exchange Act, as is necessary to
enable the Holders to utilize Form S-3 for the sale of their Registrable
Securities, such action to be taken as soon as practicable after the end of
the fiscal year in which the first registration statement filed by the
Company for the offering of its securities to the general public is declared
effective;

                  (c) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and

                  (d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has compiled with the reporting requirements of SEC Rule 144
(at any time after 90 days after the effective date of the first registration
statement filed by the Company), the Securities Act and the Exchange Act (at
any time after it has become subject to such reporting requirements), or that
it qualifies as a registrant whose securities may be resold pursuant to Form
S-3 (at any time after it so qualifies), (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and
documents so filed by the Company and (iii) such other information as may be
reasonably requested in availing any Holder of any rule or regulation of the
SEC which permits the selling of any such securities without registration or
pursuant to such form.

                  2.12 FORM S-3 REGISTRATION. In case the Company shall
receive from any Holder or Holders a written request or requests that the
Company effect a registration on Form S-3 and any related qualification or
compliance with respect to all or a part of the Registrable Securities owned
by such Holder or Holders, the Company will:

                  (a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other
Holders; and

                  (b) as soon as practicable, effect such registration and
all such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Holder's or Holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written
request given within 15 days after receipt of such written notice from the
Company; provided, however, that the Company shall not be obligated to effect
any such registration, qualification or compliance pursuant to this Section
2.12: (i) if Form S-3 is not available for such offering by the Holders; (ii)
if the Holders, together with the holders of any other securities of the
Company entitled to inclusion in such registration, propose to sell
Registrable Securities and such other securities (if any) at an aggregate
price to the public (net of any underwriters' discounts or commissions) of
less than $1,000,000; (iii) if the Company shall furnish to the Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company it would be seriously
detrimental to the Company and stockholders for such Form S-3

                                    -11-
<Page>

Registration to be effected at such time, in which event the Company shall
have the right to defer the filing of the Form S-3 Registration Statement for
a period of not more than 90 days after receipt of the request of the Holder
or Holders under this Section 2.12; provided, however, that the Company shall
not utilize this right more than once in any 12-month period; (iv) if the
Company has, within the 12-month period preceding the date of such request,
already effected two registrations on Form S-3 for the Holders pursuant to
this Section 2.12 and other similar provisions granting rights to
registration on Form S-3; (v) if in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification
or compliance; or (vi) if the Holders hold in the aggregate less than 1% of
the outstanding shares of the Company's capital stock.

                  (c) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt
of the request or requests of the Holders. All expenses incurred in
connection with a registration requested pursuant to Section 2.12, including
(without limitation) all registration, filing, qualification, printer's and
accounting fees and the reasonable fees and disbursements of counsel for the
selling Holder or Holders and counsel for the Company (with the payment of
fees and disbursements of counsel for the Company dependent upon the
Company's including securities in such registration), shall be borne pro rata
by the Holder or Holders participating in the Form S-3 Registration;
provided, however, that the Company shall bear and pay all such expenses,
including (without limitation) all registration, filing and qualification
fees, printer's and accounting fees and the fees and disbursements of one
counsel for the selling Holders, but excluding underwriting discounts and
commission relative to the Registrable Securities, with respect to the first
three such registration pursuant to this Section 2.12. Registrations effected
pursuant to this Section 2.12 shall not be counted as demands for
registration effected pursuant to Section 2.2.

                  2.13 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause
the Company to register Registrable Securities pursuant to this Section 2 may
be assigned by a Holder to (i) a transferee or assignee of at least 100,000
of such Holder's shares of Registrable Securities, (ii) another Holder, (iii)
in the case of a partnership to a partner or retired partner of such
partnership who after such assignment holds at least 20,000 shares of
Registrable Securities or (iv) an affiliated entity controlling, controlled
by, or under common control with, such Holder; provided, in each case, the
Company is, within a reasonable time after such transfer, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
and provided, further, that such assignment shall be effective only if
immediately following such transfer the further disposition of such
securities by the transferee or assignee is restricted under the Securities
Act.

                  2.14 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From
and after the date of this Agreement, the Company shall not, without the
prior written consent of the Holders of a majority of the outstanding
Registrable Securities, enter into any agreement with any holder or
prospective holder of any securities of the Company which would allow such
holder or prospective holder (a) to include such securities in any
registration filed under Sections 2.2 or 2.3 hereof, unless under the terms
of such agreement, such holder or prospective holder may include

                                    -12-
<Page>

such securities in any such registration only to the extent that the
inclusion of such holder's securities will not reduce the amount of the
Registrable Securities of the Holders which is included or (b) to make a
demand registration which could result in such registration statement being
declared effective prior to the earlier of either of the dates set forth in
subsection 2.2(a) or within 120 days of the effective date of any
registration effected pursuant to Section 2.2.

                  2.15 MARKET STAND-OFF AGREEMENT. Each Holder hereby agrees
that it shall not, to the extent requested by the Company and an underwriter
of Common Stock (or other securities) of the Company, sell or otherwise
transfer or dispose (other than to those donees who agree to be similarly
bound) of any Registrable Securities during a reasonable and customary period
of time, as agreed to by the Company and the underwriters, not to exceed 180
days, following the effective date of a registration statement of the Company
filed under the Securities Act (the "Lock-Up Period"); provided, however,
that:

                  (a) such agreement shall be applicable only to the first
such registration statement of the Company which covers shares (or
securities) to be sold on its behalf to the public in an underwritten
offering; and

                  (b) all officers and directors of the Company, all holders
of at least one percent (1%) of the issued and outstanding securities of the
Company and all other persons with registration rights (whether or not
pursuant to this Agreement) enter into similar agreements.

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

                  Neither the Company nor the underwriters in a public
offering shall reduce or eliminate the Lock-Up Period for any security holder
of the Company without similarly reducing or eliminating the Lock-Up Period
for each Holder.

                  2.16 TERMINATION OF REGISTRATION RIGHTS. The Company's
obligations pursuant to this Section 2 shall terminate as to any Holder of
Registrable Securities on the earlier of (i) when the Holder can sell all of
such Holder's shares pursuant to Rule 144 under the Securities Act during any
90-day period or (ii) on the seventh anniversary of any Closing of the
Company's sale of its Common Stock in a bona fide, firm commitment
underwritten public offering registered under the Securities Act which
results in gross offering proceeds of at least $15,000,000, at a public
offering price of not less than $7.50 per share (adjusted to reflect stock
dividends, stock splits or recapitalizations); provided, however, in no event
shall such obligations terminate earlier than the first anniversary of any
Closing of the offering described in subsection (ii) of this Section 2.17.

3.       COVENANTS.

                  3.1 DELIVERY OF FINANCIAL STATEMENTS. The Company shall
deliver to each Investor and assignee holding that certain number of shares
of Series A Preferred Stock, Series B

                                    -13-
<Page>

Preferred Stock, Series C Preferred Stock or Series D Preferred Stock,
adjusted for stock splits, reverse stock splits and similar changes in
capitalization (the "Preferred Shares") as designated below and any such
Investor or assignee may redistribute to any other Investor or assignee the
information specified in paragraphs (a) through (f) below:

                  (a) to holders of at least 100,000 Preferred Shares, as
soon as practicable, but in any event within 90 days after the end of each
fiscal year of the Company, a statement of operations for such fiscal year, a
balance sheet of the Company as of the end of such year, and a statement of
cash flows for such year, such year-end financial reports to be in reasonable
detail, prepared in accordance with generally accepted accounting principles
("GAAP"), and audited and certified by independent public accountants of
nationally recognized standing selected by the Company;

                  (b) to holders of at least 100,000 Preferred Shares, within
30 days of the end of each calendar quarter, an unaudited statement of
operations, statement of cash flows and balance sheet for and as of the end
of such quarter, in reasonable detail; such quarterly statements shall also
contain the foregoing information on a year-to-date basis and shall also
compare actual performance to budget;

                  (c) to holders of at least 500,000 Preferred Shares, within
30 days of the end of each month, an unaudited statement of operations,
statement of cash flows and balance sheet for and as of the end of such
month, in reasonable detail; such monthly statements shall also contain the
foregoing information on a year-to-date basis and shall also compare actual
performance to budget;

                  (d) to holders of at least 100,000 Preferred Shares, not
less than 30 days prior to the close of each fiscal year, a comprehensive
operating budget for the next fiscal year forecasting the Company's revenues,
expenses and cash positions, prepare on a monthly basis, including balance
sheets and sources and applications of funds statements for such months and,
as soon as prepared, any other budgets or revised budgets prepared by the
Company;

                  (e) to holders of at least 100,000 Preferred Shares, such
other information relating to the financial condition, business, prospects or
corporate affairs of the Company as Investor may from time to time request,
provided, however, that the Company shall not be obligated to provide
information which it deems in good faith to be proprietary; and

                  (f) with respect to the financial statements called for in
subsection (a) of this Section 3.1, an instrument executed by the Chief
Financial Officer or the President of the Company and certifying that such
financials were prepared in accordance with internally consistent accounting
methods consistently applied with prior practice for earlier periods and
fairly present the financial condition of the Company and its results of
operation for the period specified, subject to year-end audit adjustment.

                  3.2 INSPECTION. The Company shall permit each Investor, at
such Investor's expense and with reasonable prior notice, to visit and
inspect the Company's properties, to examine its books of account and records
and to discuss the Company's affairs, finances and

                                     -14-
<Page>

accounts with its officers, all at such reasonable times as may be requested
by Investor; provided, however, that the Company shall not be obligated
pursuant to this Section 3.2 to provide access to any information which it
reasonably considers to be a trade secret or similar confidential information.

                  3.3 TERMINATION OF COVENANTS. The covenants set forth in
Sections 3.1 and 3.2 hereof shall terminate and be of no further force or
effect when the sale of securities pursuant to a registration statement filed
by the Company under the Securities Act in connection with the firm
commitment underwritten offering of its securities to the general public is
consummated or when the Company first becomes subject to the periodic
reporting requirements of section 13(a) or 15(d) of the Exchange Act,
whichever event shall first occur; provided that the Company shall furnish,
for five years following the termination of such covenants, to Investor
copies of its reports on Forms 10-K and 10-Q within 10 days after filing with
the SEC.

                  3.4 PROPRIETARY INFORMATION AGREEMENTS. The Company shall
use its best efforts to cause that all employees of and consultants to the
Company having access to the Company's proprietary and confidential
information shall execute proprietary information agreements with the Company
approved by the Company's Board of Directors.

                  3.5 OPTION VESTING. All options or warrants hereafter
granted by the Company to its employees, officers, directors, consultants or
advisors ("Restricted Parties"), all Options previously granted by the
Company's Board of Directors but not yet evidenced by an Option grant, and
all restricted stock purchase agreements hereafter entered into by the
Company with Restricted Parties, will be subject to a vesting schedule
providing for twenty-five percent (25%) vesting after the first twelve (12)
months of employment and daily vesting as to the remaining seventy-five
percent (75%) of the shares over the following thirty six (36) months after
the first anniversary of the employment commencement date, or such other
vesting schedule as is approved by the Company's Compensation Committee.

                  3.6 COMPLIANCE WITH LAW. (i) The operations of the Company
and its Subsidiaries will be conducted in compliance with all Applicable Laws
promulgated by any Governmental Authority, including, without limitation, all
Applicable Laws relating to consumer protection, equal opportunity, health,
health care industry regulation, third party reimbursement (including
Medicare, Medicaid, and workers compensation), environmental protection,
fire, zoning and building and occupational safety matters, except for
noncompliance that individually or in the aggregate would not and, insofar as
may reasonably be foreseen, in the future will not, have a material adverse
effect on the Company or any Subsidiary.

                  (ii) In addition to and without limiting the generality of
the foregoing, the Company shall adopt and implement a compliance plan
adequate to assure such compliance. The compliance plan shall include all
material elements of an effective program to prevent and detect violations of
law as identified in Commentary 3(k) to Section 8A1.2 of the federal
Sentencing Guidelines.

                  (iii) DEFINITIONS.  For purposed of this Section 3.6:

                                     -15-
<Page>

                  "Applicable Law" means, with respect to any person or
entity, any federal, state or local statute, law, ordinance, rule,
administrative interpretation, regulation, order, writ, injunction,
directive, judgment, decree or other requirement of any governmental
authority applicable to such person or entity or any of its Subsidiaries or
any of their respective properties, assets, officers, directors, employees,
consultants or agents.

                  "Governmental Authority" means any branch, component,
agency or instrumentality of federal, state or local government.

                  "Subsidiary" means any entity which is wholly-owned by the
Company or in which the Company has a beneficial ownership interest,
including any partnership or joint venture entity.

                  3.7 INSURANCE. The Company and each of the Subsidiaries
will maintain in full force and effect with insurers insurance in such
amounts and against such losses and risks as is sufficient and reasonable
given the nature of their respective businesses.

4.       SALES BY INVESTORS.

                  4.1 RIGHT OF FIRST REFUSAL. The parties agree that before
there can be a valid sale, assignment or transfer by any Investor of 20,000
shares or more of the Company's Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred
Stock or Series F Preferred Stock within any six (6) month period (other than
(i) a transfer not involving a change in beneficial ownership, (ii)
transactions involving the distribution of such shares by any of the
Investors to any of their partners, or stockholders, (iii) pursuant to a
transfer without consideration to the spouse or lineal descendants of the
transferring Investor, or a trust for the benefit of the transferring
Investor, his spouse and/or lineal descendants or (iv) a transfer to an
affiliated entity controlling, controlled by, or under common control with,
the Investor), the Investor intending to transfer (the "Selling Investor")
shall first give notice in writing (the "Notice of Sale") to the Company of
his, her or its intention to sell such shares (the "Noticed Shares"). Such
Notice of Sale shall specify the number of Notice Shares to be sold, the name
of the proposed purchaser (the "Proposed Investor Purchaser"), the price per
Noticed Share and the terms and conditions upon which the Selling Investor
intends to make such sale. Promptly upon the Company's receipt of such Notice
of Sale, the Secretary of the Company shall mail or deliver a copy of such
Notice of Sale to all Investors owning an aggregate of Common Stock
Equivalents (as hereafter defined) representing at least 100,000 shares of
Common Stock (as adjusted for stock splits, contributions and stock
dividends) (such stockholders being hereinafter referred to as the "Optionee
Investors"). Within thirty (30) days thereafter, any such Optionee Investor
or Investor (the "Offering Investor") desiring to acquire any part or all of
the Noticed Shares shall deliver by mail or otherwise to the Secretary of the
Company a written offer or offers, to purchase a specified number of such
Noticed Shares at the price and upon the terms and conditions stated in such
Notice of Sale, accompanied by the stated consideration therefor with
authorization to transfer such consideration against delivery of such shares,
which offers, subject to Section 4.2, shall be accepted by the Selling
Investor. As used herein, "Common Stock Equivalents" shall mean outstanding
shares of Common Stock and shares of Common Stock issuable upon conversion of

                                      -16-
<Page>

outstanding Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, Series E Preferred Stock or Series
F Preferred Stock.

                  If the total number of shares specified in said offers to
the Secretary exceeds the number of the Noticed Shares, each Offering
Investor shall be entitled to purchase that number of shares which is equal
to the lesser of:

                  (i) the number of shares specified in said offer or,

                  (ii) such proportion of the Notice Shares as the number of
shares (on an as-if-converted basis) that such Offering Investor holds bears
to the total number of shares held by all the Offering Investors (on an
as-if-converted basis).

                  If all of the Noticed Shares are not disposed of under the
apportionment pursuant to this Section 4.1, those shares remaining undisposed
of shall be apportioned among those Offering Investors whose number of Shares
specified in their respective offers under Section 4.1 exceed the number of
shares allocated to them, which excess shares shall be apportioned on the
basis of the apportionment formula set forth in this Section, and said
apportionment process shall be repeated with respect to any excess shares
after each apportionment until all Noticed Shares are allocated.

                  4.2 FAILURE TO EXERCISE OPTIONS AND MAKE OFFERS FOR ALL
SHARES. If options are not exercised and/or offers made in the aggregate for
all of the Noticed Shares within the thirty (30) day period referred to
herein, the Selling Investors shall not be obligated to sell the Noticed
Shares or any fraction thereof to the Optionee Investors, and may dispose of
all of the Noticed Shares to the Proposed Purchaser named in said Notice of
Sale, provided, however, that the Selling Investor shall not sell less than
all of said Noticed Shares nor shall it sell such shares at a lower price or
on terms or conditions more favorable to the Proposed Purchaser than those
specified in said Notice of Sale without first offering the new price, terms
and conditions to Optionee Investors as hereinabove set forth. If the Selling
Investor does not so sell the Noticed Shares to such Proposed Purchaser
within one hundred twenty (120) days after it first gave notice to the
Company pursuant to Section 4.1, it shall again first offer such shares to
the Optionee Investors prior to selling them to any Proposed Purchaser.

                  4.3 NONMONETARY CONSIDERATION.

                  (a) If part or all of the purchase consideration specified
in a Notice of Sale is other than money or purchaser's promissory note or
other evidence of indebtedness, such Notice of Sale shall also specify the
fair market value in cash of such other consideration. The Optionee Investors
shall have the right to exercise their respective options to purchase the
Noticed Shares by delivery of a written offer or offers specifying a cash
purchase price equal to the total of the monetary consideration and the fair
market value of the nonmonetary consideration specified in the Notice of Sale.

                  (b) If any Optionee Investor objects to the amount
specified in the Notice of Sale as the fair market value of any nonmonetary
consideration, such Optionee Investor shall,

                                     -17-
<Page>

within twenty (20) days of the receipt of the Notice of Sale, submit a
written request to the Company that the matter be submitted to the Board of
Directors for determination. Pending such determination, or a determination
pursuant to subsection (c) below, the time for exercising options to purchase
shares shall be stayed as of the date of such notice. Promptly upon the
Company's receipt of such notice from the objecting Optionee Investor, the
Secretary of the Company shall notice and call a special meeting of the Board
of Directors, to be held within fifteen (15) days of the Company's receipt of
notice from the objecting Optionee Investor, for the purpose of determining
in good faith the fair market value of the nonmonetary consideration
specified in the Notice of Sale. Any decision of the Board of Directors made
in good faith shall be final and binding upon all parties. The Board of
Directors shall promptly give written notice of its decision and the
resulting calculation of the purchase price to the parties.

                  (c) If the Board of Directors fails or refuses to make a
determination of the fair market value of such nonmonetary consideration within
such fifteen (15) day period from the date of the Company's receipt of notice
from the objecting Optionee Investor, the objecting Optionee Investor and the
Selling Investor shall select and agree upon a single appraiser. If the parties
are unable to agree upon a single appraiser within ten (10) days after the end
of the fifteen (15) day period specified above, then either party may apply to
the San Diego Superior Court (pursuant to a petition to compel arbitration) for
the appointment of a single appraiser in accordance with Section 1280 ET SEQ. of
the California Code of Civil Procedure. Such appraiser shall thereupon promptly
determine the fair market value of the nonmonetary consideration specified in
the Notice of Sale, and shall promptly give written notice of such appraiser's
decision and the resulting calculation of the purchase price to the parties and
to the Company.

                  (d) All expenses of the determination by the Board of
Directors or the appraisal and proceedings to appoint an appraiser, as the case
may be, shall be borne one-half by the Optionee Investors who exercise their
options to purchase the Noticed Shares (who shall share such expenses among
themselves in proportion to the number of shares each elects to purchase) and
one-half by the Selling Investor, unless the Optionee Investors thereafter fail
to exercise their respective options, in which case the objecting Optionee
Investor shall bear all such expenses.

                  4.4 TERMINATION. Notwithstanding the foregoing, the rights of
first refusal set forth in this Section 4 shall terminate upon any Closing of
the Company's first firmly underwritten public offering of its Common Stock
registered under the Securities Act of 1933.

5.       MISCELLANEOUS.

                  5.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including transferees of any shares of Registrable Securities). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.

                                     -18-
<Page>
                  5.2 GOVERNING LAW; JURY TRIAL WAIVER. This Agreement shall be
governed by and construed under the laws of the State of California as applied
to agreements among California residents entered into and to be performed
entirely within California. THE PARTIES HERETO IRREVOCABLY WAIVE ALL RIGHTS TO A
TRIAL BY JURY IN ANY SUIT, ACTION OR OTHER PROCEEDING INSTITUTED BY OR AGAINST
THE PARTY IN RESPECT OF ITS OBLIGATIONS HEREUNDER OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

                  5.3 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                  5.4 TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

                  5.5 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid, and telecopier, and addressed to the party to be notified at
the address indicated for such party on the signature page hereof, or at such
other address as such party may designate by ten (10) days' advance written
notice to the other parties.

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

                  5.7 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement 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 holders of
a majority of the Registrable Securities then outstanding; provided, however,
that any such amendment or waiver which would have a disproportionate effect on
any Holder shall require the written consent of such Holder. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any Registrable Securities then outstanding, each future holder of all
such Registrable Securities, and the Company.

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

                  5.9 AGGREGATION OF STOCK. All shares of Registrable Securities
held or acquired by affiliated entities or persons shall be aggregated together
for the purpose of determining the availability of any rights under this
Agreement.

                                     -19-
<Page>

                  5.10 ENTIRE AGREEMENT. This Agreement, a letter agreement
between the Company and GE Capital Equity Investments, Inc. dated of even date
herewith, a letter agreement between the Company and Merrill Lynch Ventures L.P.
2001 dated of even date herewith and the documents referred to herein constitute
the entire agreement among the parties hereto and no party shall be liable or
bound to any other party in any manner by any warranties, representations, or
covenants except as specifically set forth herein or therein.

              [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                     -20-
<Page>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

COMPANY:                           DIGIRAD CORPORATION,
                                   a Delaware corporation

                                   By:      /s/ Scott Huennekens
                                      -----------------------------------------
                                            Scott Huennekens, President

FOUNDERS:                          JACK F. BUTLER

                                   By:      /s/ Jack F. Butler
                                      -----------------------------------------
                                               Jack F. Butler

                     Address:      16650 Las Cuestas
                                   Rancho Santa Fe, CA  92067

                                   CLINTON L. LINGREN

                                   By:     /s/ Clinton L. Lingren
                                      -----------------------------------------
                                              Clinton L. Lingren

                     Address:      6211 Hannon Ct.
                                   San Diego, CA  92117

                           [SIGNATURE PAGE TO AMENDED AND RESTATED
                                INVESTORS' RIGHTS AGREEMENT]

<Page>

EXISTING INVESTORS:

                                   KINGSBURY CAPITAL PARTNERS, L.P.

                                   By:      Kingsbury Associates, L.P.,
                                            Its General Partner

                                   By:    /s/ Timothy J. Wollaeger
                                      -----------------------------------------
                                            Timothy J. Wollaeger,
                                            General Partner

                                   KINGSBURY CAPITAL PARTNERS, L.P., II

                                   By:      Kingsbury Associates, L.P.,
                                            Its General Partner

                                   By:     /s/ Timothy J. Wollaeger
                                      -----------------------------------------
                                            Timothy J. Wollaeger,
                                            General Partner

                                   KINGSBURY CAPITAL PARTNERS, L.P., III

                                   By:      Kingsbury Associates, L.P.,
                                            Its General Partner

                                   By:     /s/ Timothy J. Wollaeger
                                      -----------------------------------------
                                            Timothy J. Wollaeger,
                                            General Partner

                                   KINGSBURY CAPITAL PARTNERS, L.P., IV

                                   By:      Kingsbury Associates, L.P.,
                                            Its General Partner

                                   By:     /s/ Timothy J. Wollaeger
                                      -----------------------------------------
                                            Timothy J. Wollaeger,
                                            General Partner

                  Address:         3655 Nobel Drive, Suite 490
                                   San Diego, CA  92122

                           [SIGNATURE PAGE TO AMENDED AND RESTATED
                                INVESTORS' RIGHTS AGREEMENT]

<Page>

EXISTING INVESTORS:

                                   SORRENTO GROWTH PARTNERS I, L.P.

                                   By:      Sorrento Equity Growth Partners
                                            I, L.P., Its General Partner

                                   By:      Sorrento Associates, Inc.,
                                            Its General Partner

                                   By:     /s/ Robert M. Jaffee
                                      -----------------------------------------
                                            Robert M. Jaffe, President

                                   SORRENTO VENTURES II, L.P.

                                   By:      Sorrento Equity Partners, L.P.,
                                            Its General Partner

                                   By:      Sorrento Associates, Inc.,
                                            Its General Partner

                                   By:     /s/ Robert M. Jaffe
                                      -----------------------------------------
                                            Robert M. Jaffe, President

                  Address:         4370 La Jolla Village Drive, Suite 1040
                                   San Diego, CA  92122

                           [SIGNATURE PAGE TO AMENDED AND RESTATED
                                INVESTORS' RIGHTS AGREEMENT]

<Page>

EXISTING INVESTORS:

                       SORRENTO VENTURES III, L.P.

                       By:    /s/ Robert M. Jaffe
                          -----------------------------------------
                            Robert M. Jaffe
                            President, Sorrento Associates, Inc.
                            General Partner, Sorrento Equity Partners III, L.P.
                            General Partner, Sorrento Ventures III, L.P.

                       SORRENTO VENTURES CE, L.P.

                       By:    /s/ Robert M. Jaffe
                          -----------------------------------------
                            Robert M. Jaffe
                            President, Sorrento Associates, Inc.
                            General Partner, Sorrento Equity Partners III, L.P.
                            General Partner, Sorrento Ventures CE, L.P.

               Address:     4370 La Jolla Village Drive, Suite 1040
                            San Diego, CA  92122

                           [SIGNATURE PAGE TO AMENDED AND RESTATED
                                INVESTORS' RIGHTS AGREEMENT]

<Page>

EXISTING INVESTORS:

                                  VECTOR LATER-STAGE EQUITY FUND, L.P.

                                  By:      Vector Fund Management II, L.L.C.
                                           Its General Partner

                                  By:     /s/ Doug Reed
                                     -----------------------------------------
                                           Doug Reed
                                           Managing Director

                                 VECTOR LATER-STAGE EQUITY FUND II, L.P.

                                 By:      Vector Fund Management II, L.L.C.
                                          Its General Partner

                                 By:      /s/ Doug Reed
                                     -----------------------------------------
                                           Doug Reed
                                           Managing Director

                                 VECTOR LATER-STAGE EQUITY FUND II (Q.P.), L.P.

                                  By:      Vector Fund Management II, L.L.C.
                                           Its General Partner

                                  By:     /s/ Doug Reed
                                      -----------------------------------------
                                           Doug Reed
                                           Managing Director

                  Address:         1751 Lake Cook Road, Suite 350
                                   Deerfield, IL  60015

                           [SIGNATURE PAGE TO AMENDED AND RESTATED
                               INVESTORS' RIGHTS AGREEMENT]

<Page>

EXISTING INVESTORS:

                                   PALIVACINNI PARTNERS, LP

                                   By:    /s/ Doug Reed
                                      -----------------------------------------
                                           Doug Reed
                                           Managing Director

                  Address:         1751 Lake Cook Road, Suite 350
                                   Deerfield, IL  60015

                           [SIGNATURE PAGE TO AMENDED AND RESTATED
                               INVESTORS' RIGHTS AGREEMENT]

<Page>

EXISTING INVESTORS:

                                   AUREUS DIGIRAD, LLC

                                   By:          /s/ Robert M. Averick
                                      -----------------------------------------

                                   Name:        Robert M. Averick
                                      -----------------------------------------

                                   Its:         Member
                                      -----------------------------------------

                  Address:         100 First Stamford Place
                                   Stamford, CT  06902

<Page>

EXISTING INVESTORS:

                                   MERRILL LYNCH VENTURES, L.P. 2001

                                   By:      Merrill Lynch Ventures LLC
                                            Its General Partner

                                   By:          /s/ Edward J. Higgins
                                      -----------------------------------------
                                            Edward J. Higgins
                                            Vice President

                  Address:         2 World Financial Center, 31st Floor
                                   New York, NY 10281
                                   Attn:  Jean Kim

                   All Notices:    Merrill Lynch Ventures, L.P. 2001
                                   95 Greene Street
                                   Jersey City, NJ 07302-3815
                                   Attn:  Robert F. Tully

<Page>

EXISTING INVESTORS:

                                   INGLEWOOD VENTURES, L.P.

                                   By:          /s/ Daniel C. Wood
                                      -----------------------------------------
                                            Daniel C. Wood
                                   Title:       Member
                                         --------------------------------------

                  Address:         12526 High Bluff Drive, Suite 300
                                   San Diego, CA  92130

<Page>

EXISTING INVESTORS:

                                    ANACAPA INVESTORS, LLC -
                                    ANACAPA I

                                    By:          /s/ Robert Raede
                                       ----------------------------------------
                                             Robert Raede
                                             Manager

                   Address:         32 W. Anapamu Street, #350
                                    Santa Barbara, CA  93101

<Page>

EXISTING INVESTORS:

                                   KENNETH E. OLSON TRUST DATED 3/16/89

                                   By:          K. Olson
                                      -----------------------------------------

                                   Name:        Trustee
                                        ---------------------------------------

                                  Title:
                                        ---------------------------------------

                 Address:         404 Torrey Point Road
                                  Del Mar, CA  92014

<Page>

EXISTING INVESTORS:

                                     MID-CAROLINA CARDIOLOGY, PA

                                     By:      /s/ Stephen A. McAdams
                                        ---------------------------------------
                                              Stephen A. McAdams, M.D.
                                              Chief Executive Officer

                     Address:        1718 East Fourth Street, Suite 501
                                     Charlotte, NC  28204

                                     STEPHEN A. MCADAMS AND LOU ANN MCADAMS

                                              /s/ Stephen A. McAdams
                                     ------------------------------------------
                                     Stephen A. McAdams

                                              /s/ Lou A. McAdams
                                     ------------------------------------------
                                     Lou Ann McAdams

                     Address:        1718 East Fourth Street, Suite 501
                                     Charlotte, NC  28204

<Page>

NEW INVESTORS:

                                    SILICON VALLEY BANK

                                    By:               /s/ Patrick J. O'Donnell
                                       ----------------------------------------

                                    Name:             Patrick J. O'Donnell
                                         --------------------------------------

                                    Title:            Regional Market Manager
                                          -------------------------------------

                                    Dated as of the Date of the Agreement

                    Address:        3003 Tasman Drive, HG 110
                                    Santa Clara, CA  95054
                                    Attention:  Treasury Department

<Page>

NEW INVESTORS:

                                    D. THEODORE BERGHORST

                                    /s/ D. Theodore Berghorst
                                    -------------------------------------------
                                    Signature

                    Address:        12 Kent Road
                                    Winnetka, IL 60093

                                    BERGHORST 1998 DYNASTIC TRUST

                         By:               /s/ D. Theodore Berghorst
                                    -------------------------------------------
                                    D. Theodore Berghorst as Financial Advisor

                    Address:        12 Kent Road
                                    Winnetka, IL  60093

<Page>

NEW INVESTORS:

                                    PETER F. DRAKE

                                             /s/ Peter F. Drake
                                    -----------------------------------------
                                    Signature

                    Address:        255 Mayflower Road
                                    Lake Forest, IL 60045

<Page>

NEW INVESTORS:

                                   IMPERIAL VENTURES, INC.

                                   By:       /s/ James Rutter
                                        ---------------------------------------
                                        James B. Rutter
                                        President

                      Address:     11512 El Camino Real, Suite 350
                                   San Diego, CA  92130

<Page>

NEW INVESTORS:

                                    STEPHEN A. MCADAMS ROLLOVER IRA

                                    By:         /s/ Stephen A. McAdams
                                          -------------------------------------
                                          Stephen A. McAdams

                       Address:     1718 East Fourth Street, Suite 501
                                    Charlotte, NC  28204

<Page>

NEW INVESTORS:

                                    W AUGUST HILLENBRAND

                                          /s/ W. August Hillenbrand
                                    ------------------------------------------
                                    Signature

                        Address:    700 S.R. 46E
                                    Batesville, IN  47006

<Page>

NEW INVESTORS:

                                    TAH & H INVESTORS, LP

                                    By:      Investment Committee
                                             Brickyard Holdings. Inc.
                                             Its General Partner

                                    By:            /s/ Charles W. Crowther
                                             ----------------------------------
                                             Charles W. Crowther
                                             Investment Committee Member

                                    KKH & C INVESTORS, LP

                                    By:      Investment Committee
                                             Brickyard Holdings. Inc.
                                             Its General Partner

                                    By:             /s/ Charles W. Crowther
                                             ----------------------------------
                                             Charles W. Crowther
                                             Investment Committee Member

                                    WAH & M INVESTORS, LP

                                    By:      Investment Committee
                                             Brickyard Holdings. Inc.
                                             Its General Partner

                                    By:            /s/ Charles W. Crowther
                                             ----------------------------------
                                             Charles W. Crowther
                                             Investment Committee Member

                    Address:        5 Observatory Hill
                                    Cincinnati, OH  45208

<Page>

NEW INVESTORS:

                                    MLH & T INVESTORS, LP

                                    By:      Investment Committee
                                             Brickyard Holdings. Inc.
                                             Its General Partner

                                    By:            /s/  Charles W. Crowther
                                             ----------------------------------
                                             Charles W. Crowther
                                             Investment Committee Member

                                    RDH & S INVESTORS, LP

                                    By:      Investment Committee
                                             Brickyard Holdings. Inc.
                                             Its General Partner

                                    By:            /s/ Charles W. Crowther
                                             ----------------------------------
                                             Charles W. Crowther
                                             Investment Committee Member

                    Address:        5 Observatory Hill
                                    Cincinnati, OH  45208

<Page>

NEW INVESTORS:

                                   GE CAPITAL EQUITY INVESTMENTS, INC.

                                   By:      /s/ David Gibbs
                                         --------------------------------------
                                         David Gibbs
                                         Senior Vice President

                  Address:         120 Long Ridge Road
                                   Stamford, CT  06927

<Page>

                                   SCHEDULE A

FOUNDERS

Jack Butler, Sr.
Jack Butler, Jr.
Alice Butler
Michael Butler
Patricia Butler
Clinton Lingren
Leslie Lingren
David Lingren
Corinne Avayo
Wallace Goodson
LaVerne Clark
Marcia McChesney
Vera Williams
Marilyn Sargent
Grant Heileson
Carma Farley
Darlene Logan
Kathleen Ipsen
Terry Tervort
Michelle Belnap
Alison Komm

EXISTING INVESTORS

Vector Later-Stage Equity Fund, L.P.
Vector Later-Stage Equity Fund II, L.P.
Vector Later-Stage Equity Fund II (Q.P.), L.P.
Furman Selz SBIC L.P.
Sorrento Growth Partners I, L.P.
Sorrento Ventures II, L.P.
Sorrento Ventures III, L.P.
Sorrento Ventures CE, L.P.
Kingsbury Capital Partners, L.P.
Kingsbury Capital Partners, L.P., II
Kingsbury Capital Partners, L.P., III
Kingsbury Capital Partners L.P., IV
Jack F. Butler, Sr.
Gerald G. Loehr Trust
William L. Ashburn
Karen A. Klause
Kenneth E. Olson Trust
Peter T. Dunn

                                      SCHEDULE A-1

<Page>

Dunn Family Trust
Nathan P. Dunn
Kyla E. Dunn
The Arthur & Sophie Brody Revocable Trust DTD 04/13/89
Malin Burnham
Philip L. Elkus Trust DTD 09/09/74
Elliot Feuerstein Trust DTD 05/14/82
Stanley and Maxine Firestone Trust DTD 12/02/88
Ira R. and Joan P. Katz Qualified Marital Trust
Knowles Family Trust
The SDL Trust
Arthur E. Nicholas
The Stanley E. and Pauline M. Foster Trust DTD  07/31/81
Page Trust DTD 03/03/89
Forrest N. Shumway & Patricia K. Shumway Trust DTD 04/26/94
Derbes Family Trust U/D/T 04/25/86
Sutro Investment Partners V., LLC
SBSF Biotechnology Fund, L.P.
SBSF Biotechnology Partners Fund, L.P.
ABS Employees' Venture Fund Limited Partnership
JAFCO Co., Ltd.
JAFCO R-3 Investment Enterprise Partnership
JAFCO JS3 Investment Enterprise Partnership
JAFCO G-6 (A) Investment Enterprise Partnership
JAFCO G-6 (B) Investment Enterprise Partnership
JAFCO G-7 (A) Investment Enterprise Partnership
JAFCO G-7 (B) Investment Enterprise Partnership
Johnson & Johnson Development Corporation
Health Care Indemnity, Inc.
Mitsui & Co., Ltd.
MVC Global Japan Fund I
Ocean Avenue Investors, LLC - Founders Fund
Ocean Avenue Investors, LLC - Redstone Fund
Aureus Digirad, LLC
Merrill Lynch Ventures, L.P. 2001
Mid-Carolina Cardiology, PA
Stephen A. McAdams and Lou Ann McAdams, as Joint Tenants
Akinyele Aluko, M.D.
Harvey Family LLC
GFP Digirad
Dr. Jerome Williams, Jr.
Dwayne A. Schmidt
Richard N. and Judy F. Linder
Fisk Ventures LLC
IngleWood Ventures, L.P.
The University of North Carolina at Chapel Hill
         Foundation Investment Fund, Inc.
Palivaccini Partners, LP

                                      SCHEDULE A-2

<Page>

Anacapa Investors, LLC -Anacapa I

NEW INVESTORS

GE Capital Equity Investments, Inc.
D. Theodore Berghorst
Imperial Ventures, Inc.
W August Hillenbrand
TAH & H Investors, LP
KKH & C Investors, LP
WAH & M Investors, LP
MLH & T Investors, LP
RDH & S Investors, LP
Peter F. Drake
Silicon Valley Bank
Stephen A. McAdams Rollover IRA

                                      SCHEDULE A-3

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