Document:

SETTLEMENT
AGREEMENT

    

    THIS SETTLEMENT AGREEMENT (this “Agreement”)
is made and entered into as of the 16th day of October, 2008 by and among Lantis
Laser, Inc. (“Plaintiff”),
a corporation registered in the State of Nevada having its principal place of
business located at 11 Stonebridge Court, Denville, New Jersey 07834 on the one
hand, and Ice Cold Stocks, LLC, a New York limited liability corporation and has
its principal place of business located 24748 Long Valley Road,
Calabasas,  Los Angeles County, California, Var Growth Corporation, an
inactive New York corporation with its principal place of business located at
24748 Long Valley Road, Calabasas, California, Debbie Sutz, an individual who
resides at 419 Roads End Street, Glendale, California 91205, Barry Davis, an
individual who resides at 419 Roads End Street, Glendale, California 91205 and
Interwest Transfer Co., Inc., a corporation registered in the State of Utah
having its principal place of business located at 1981 East 4800 South, Suite
100, Salt Lake City, Utah 84117 (collectively,  “Defendants”),
on the other hand.

    

    WHEREAS,  Plaintiff
has filed a complaint against the Defendants captioned  Lantis Laser, Inc.
v.  Lantis Laser Inc. (“Lantis” or “Plaintiff”) v. Ice Cold Stocks,
Var Growth Corporation, Barry Davis, Debbie Sutz, United States District
Court Central District of California – Western Division, Case No.: CV 08-03587
(the “Litigation”);
and

     

    
       WHEREAS,
Defendants transferred 335,000 shares of Lantis Laser, Inc. stock to Thomas
Sweeney, Kim Davis, Daphna Rose, Glenn Meyers, Michael Lamis, Doug Newman,
Harvey Glicker, and Alan Schwartz (the “Transferred Stock”);
and 

    

    

    WHEREAS,
Plaintiff and Defendants desire to finally and completely resolve the
Litigation.

    

    NOW,
THEREFORE, for the consideration and mutual promises set forth herein, the legal
adequacy and sufficiency of which is acknowledged by all parties, the
undersigned parties agree as follows:

    

    Section 1.  Effective upon
the execution of this Agreement, and in consideration of the promises set forth
above, the Parties agree to release and relinquish any and all claims as to each
other as follows:

     

                         a.        The
words “claims” or “claim” wherever appearing in this Agreement, shall mean each
and every claim, demand, controversy, injury, damage, debt, liability, judgment
(whether in law or in equity), account, reckoning, obligation, contract,
agreement, loss, cost, expense, lien, suit and action or cause of action
relating to or concerning the Disputes and the claims released in this Agreement
(including but not limited to claims for costs and attorney’s fees for
settlement negotiation and other expenses).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

                         b.        Except
as set forth in paragraph 4 below, the Parties, for themselves, their
representatives, employees, attorneys, associates, administrators, insurance
companies, agents, independent contractors, contractors, predecessors, heirs,
successors, assigns and transferees, and all persons acting by, through under
and in concert with them, or any of them, hereby fully and forever release and
fully and forever discharge each other, together with each of their respective
employees, representatives, contractors, officers, directors, agents,
shareholders, trustees, beneficiaries, co-venturers and partners, associates,
owners, parents, subsidiaries, affiliates, insurers, predecessors, successors,
assignees, transferees, heirs, attorneys, administrators, independent
contractors and all persons acting by, through, under or in concert with them,
or any of them, from any and all liability for any and all claims, including,
but not limited to, all fees, costs, payments, penalties or for any
indemnification or subrogation, arising in any way from  the
Litigation and Consulting Agreement, whether known or unknown,
suspected or unsuspected, fixed or contingent, whether at law or in equity, of
whatsoever kind nature or description, arising from the beginning of time to the
date of this Agreement.

     

                         c.        The
mutual releases given herein by the parties are and shall be releases of all
claims each of the Parties have against one another arising from or relating to
the Disputes and the Lawsuit, whether known or unknown, and the Parties
knowingly release and waive all rights reserved by Civil Code § 1542, which
provides as follows:

     

                         "A
GENERAL RELEASE DOES NOT EXTEND TO THE CLAIMS WHICH THE CREDITOR DOES NOT KNOW
OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."

     

    Plaintiff
and the Defendant represent that they have read and understand the effect and
import of this provision, and that they have been represented and advised by
their respective attorneys concerning this provision.

     

                         d.        The
Parties hereby acknowledge they are aware that they may hereafter discover facts
in addition to or different from those which they now know or believe to exist
with respect to all or a part of the subject matter of the release set forth
herein, but that the release given and made in this Agreement shall remain in
effect as a full, complete and irrevocable general release notwithstanding the
discovery or existence of any such additional or different facts.

     

                         e.        Notwithstanding
anything to the contrary contained in this Agreement or in the release herein,
whether appearing hereinabove or herein below, the Parties to this Agreement do
not and shall not release, discharge, relinquish or impair any rights, claims or
obligations which this Agreement creates or expressly preserves.  The
rights and claims which are preserved herein shall wholly and completely survive
the releases set forth herein and the performance of this
Agreement.

     

    Section
2.        Dismissal of Claims by
Plaintiff and Counterclaims by Defendants.  Within ten (10)
days of the date of this Re-Issuance of Stock to Defendants as set forth in
Section 3, below, Plaintiff shall dismiss with prejudice all claims asserted or
that could have been asserted by Plaintiff against Defendants in the
Litigation.  Within ten (10) days of the date of Re-Issuance of Stock
to Defendants as set forth in Section 3, below, Defendants shall dismiss with
prejudice all counterclaims asserted or that could have been asserted by
Defendants against Plaintiff in the Litigation.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Section
3.        Plaintiff’s Re-Issuance of
Stock to Defendants.

    

     a.        Plaintiff
shall re-issue one or more certificates as instructed by Defendants
for 1,415,000 shares (1,750,000 shares minus 335,000 shares of the
Transferred Stock) (the “Reissued Shares”) of its common stock within (10)
days after the date of this Agreement. The Reissued Shares shall be unregistered
and shall bear an appropriate restrictive legend. The Reissued Shares shall be
provided as a replacement for the certificate previously issued pursuant to the
Consulting Agreement dated November 14, 2007, and shall be deemed to have been
issued as of that date. 

    

     b.        Pursuant
to Securities and Exchange Commission Rule 144, the holding period for the
Reissued Shares shall expire on or about November 14, 2008.  The
Defendants hereby agree that they will not submit any of the Reissued Shares for
removal of the restrictive legend on or after November 14, 2008 except as
follows:  (i) at any time on or after January 15, 2009, Defendants may
submit up to 100,000 shares of the Reissued Shares to the transfer agent for the
removal of the restrictive legend; (ii) at any time on or after March 15, 2009
the Defendants may submit up to an additional 150,000 shares of the Reissued
Shares to the transfer agent for the removal of the restrictive legend; (iii) at
any time on or after April 15, 2009 the Defendants may submit up to an
additional 150,000 shares of the Reissued Shares to the transfer agent for the
removal of the restrictive legend; (iv) at any time on or after June 15, 2009
the Defendants may submit any or all of the balance of 1,015,000 of the Reissued
Shares to the transfer agent for the removal of the restrictive legend; and (vi)
at any time on or after June 15, 2009 the Transferred Stock may be submitted to
the transfer agent for removal of the restrictive legend. Provided that the
Defendants have supplied the transfer agent with all required information with
respect to the request to remove the restrictive legends pursuant to the
schedule set forth above, the Plaintiff shall instruct its transfer agent to
comply with the Defendants request and remove the restrictive legend from the
submitted shares.   It is expressly understood that should the
Defendants submit any of the Reissued Shares to the transfer agent for removal
of the restrictive legend prior to the dates set forth above that the transfer
agent may reject such request, and the Defendants expressly waive any potential
claim against the transfer agent based on its refusal to remove the restrictive
legend except as provided for in this paragraph. 

    

     c.        Defendants
shall return within one (1) day after the date of this Agreement by overnight
courier addressed to Plaintiff at the address set forth above the certificate
previously issued by Plaintiff in the amount of 3,165,000 (3,500,000 minus
335,000 shares of the Transferred Stock) shares to Plaintiff that Plaintiff
shall cancel and replace with the certificate above for 1,415,000 shares issued
in the name as directed by Defendant Davis.  Plaintiff makes no
assurance of the price at which the shares of its common stock may be sold by
Defendants and Defendants expressly waive any potential claim against Plaintiff
based on any expectation by the Defendants of the price at which such shares
could or should be sold. 

    

    Section
4.        Non-Disparagement.
The parties agree that they will not make any disparaging or defamatory remarks
or comments regarding each other (including, but not limited to, any other
party’s employees, practices, products, and services), expressly or by
implication.

    

    Section
5.        Termination of Consulting
Agreement.  Plaintiff and Defendants agree that, except with
respect to the issuance of shares and the reissuance of said shares as provided
for in paragraph 5, above, the Consulting Agreement dated November 15, 2007 upon
which the Litigation was brought is hereby terminated and shall be considered
null and void and of no further effect.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section
6.        Severability.  Should
any provision in this Agreement be declared or determined to be illegal or
invalid, the validity of the remaining parts, terms, or provisions shall not be
affected thereby, and the illegal or invalid part, term, or provision shall be
deemed not to be part of this Agreement, and all remaining provisions shall
remain valid and enforceable.

    

    Section
7.        No
Waiver.  The failure of any party to this Agreement to enforce
at any time, or for any period of time, any one or more of the terms of this
Agreement shall not be a waiver of such terms or conditions or of such party’s
right thereafter to enforce each and every term and condition of this
Agreement.

     

    Section
8.        Authority.   The
corporate parties listed below, by their signatures, represent and warrant that
the persons signing this Agreement on their  behalf have full and
binding authority to do so.

     

    Section
9.        Choice of
Law.  This Agreement shall be interpreted and enforced in
accordance with the laws of California, notwithstanding any contrary choice of
law principles.

     

    Section
10.        Jurisdiction.  The
parties understand and agree that the Superior Court of United States District
Court Central District Of California – Western Division has continuing
jurisdiction of this action for purposes of enforcing the terms of this
Agreement.

     

    Section
11.        Entire
Agreement.  This Agreement constitutes the entire and exclusive
agreement between and among the parties on the matters set forth herein, and any
and all prior or contemporaneous agreements, understandings, promises,
representations, warranties, and covenants, whether written or oral, and whether
express, implied, or apparent, are hereby deemed to be merged into and made part
of this Agreement.

     

    Section
12.        No Presumption Against
Drafter.  This Agreement has been drafted through a cooperative
effort of all parties, and none of the parties shall be considered the drafter
of this Agreement so as to give rise to any presumption or convention regarding
construction of this document.

     

    Section
13.        Fees and
Costs.  Except as set forth above, the parties agree to bear
their own costs and attorneys’ fees related to the Litigation.

     

    Section
14.        Confidentiality of this
Settlement Agreement.  The terms of this Agreement are to be
kept confidential by the parties except as may be necessary to enforce any terms
of this Agreement or otherwise required by law.

     

    Section
15.        Recitals.  The
parties acknowledge the accuracy of the Recitals and incorporate the Recitals
into and make them a part of this Agreement.

     

    Section
16.        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.  Each such original, electronically-imaged, or facsimile
copy of this Agreement executed in counterpart by any of the parties shall be
deemed to be an original for all purposes.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section
17.        Legal
Advice.  The parties understand and agree to the terms of this
Agreement.  They represent that they have sought and obtained legal
advice about its scope and effect and have entered into the Agreement freely and
voluntarily.

    [Signature Page to Settlement
Agreement follows]

    
      
        
           

          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        LANTIS
      LASER, INC.

                                      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                        By:

                                      	

                                        /s/

                                      	 
      	 
      
	
                                        Its:

                                      	 
      	 
      	
                                        
                                          /s/

                                        

                                      
	 
      	 
      	 
      	
                                        Debbie
      Sutz

                                      
	 
      	 
      	 
      	 
      
	 	 	 	 
	 
      	 
      	 
      	
                                        VAR
      GROWTH CORPORATION

                                      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                        
                                          /s/

                                        

                                      	 
      	
                                        By:

                                      	
                                        
                                          /s/

                                        

                                      
	
                                        Barry
      Davis

                                      	 
      	
                                        Its:

                                      	
                                         

                                      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

          
            
              
                
                  
                    
                      
                        
                          
                             

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    [Signature Page to Settlement
Agreement]Exhibit
10.1

      EXECUTIVE
EMPLOYMENT AGREEMENT

      

      THIS
EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into
effective as of February 7, 2009 by and between Digirad Corporation, a Delaware
Corporation (the “Company”) and Richard Slansky (“Executive”).  The
Company and Executive are hereinafter collectively referred to as the “Parties,”
and individually referred to each or any as a “Party.”

       

      RECITALS

       

      A.           WHEREAS,
the Company wishes to employ Executive on the terms and conditions set forth in
this Agreement; and

       

      B.           WHEREAS,
Executive desires to become an employee of the Company on the terms and
conditions set forth in this Agreement.

       

      AGREEMENT

       

      NOW,
THEREFORE, in consideration of the promises and the mutual covenants herein
contained, and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the Parties, intending to be legally bound, agree
as follows:

       

      1.           Employment.

       

      1.1           Title/Responsibilities.  Executive
shall serve as Chief Financial Officer of the Company and each of its subsidiary
companies, Digirad Imaging Solutions, Inc. (“DIS”) and Digirad Ultrascan
Solutions, Inc. (“DUS”).  Executive shall have the normal duties,
responsibilities and authority of such offices, unless otherwise determined from
time to time by the Company’s Board of Directors.  Executive shall do
and perform all services, acts, or responsibilities necessary or advisable to
carry out the job duties of Chief Financial Officer of the Company, and as Chief
Financial Officer of DIS and DUS, as assigned by the Company’s Board of
Directors, provided, however, that at all times during his employment Executive
shall be subject to the direction and policies from time to time established by
the Board of Directors of the Company.

       

      1.2           Full Time
Attention.  Executive shall devote his reasonable best efforts
and his full business time and attention to the performance of the services
customarily incident to such office and to such other services as the Company’s
Board of Directors may reasonably request.

       

      1.3           Other
Activities.  Except upon the prior written consent of the Board
of Directors, Executive shall not during the period of employment engage,
directly or indirectly, in any other business activity (whether or not pursued
for pecuniary advantage) that is or may be competitive with, or that might place
him in a competing position to that of the Company or any other corporation or
entity that directly or indirectly controls, is controlled by, or is under
common control with the Company (an “Affiliated Company”), provided that
Executive may own less than two percent of the outstanding securities of any
such competing corporation that is publicly traded.  Executive shall
also disclose to and obtain the prior consent of the Board of Directors for any
other, non-competitive business activities in which he may wish to engage, such
as joining the board of directors of another entity.

       

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      2.           Term of
Employment.

       

      2.1           Employment At
Will.  Executive’s employment is at will, and not for any
specific term.  Executive’s employment may be terminated by Executive
or by the Company at any time for any reason, with or without cause or notice,
and without liability of any kind other than as specifically set forth
below.

       

      3.           Compensation.

       

      3.1           Base
Salary.  Beginning on or before March 9, 2009 Executive
commences his duties as the Company’s Chief Financial Officer (the “Start
Date”), the Company shall pay Executive a salary (the “Base Salary”) of
$9,423.08 paid bi-weekly ($245,000 on an annual equivalence), payable in
accordance with the Company’s normal payroll practices for Executives. The
Company's Board of Directors shall provide Executive with annual performance
reviews, and, thereafter, Executive shall be entitled to such Base Salary as the
Board of Directors may from time to time establish in its sole
discretion.

       

      3.2           Stock
Options.  Executive shall also be granted, effective as of
March 9, 2009, a stock option granting Executive the right to purchase 225,000
shares of the Company’s common stock with an exercise price equal to the fair
market value of the Company’s common stock on the date of
grant.  Twenty-five percent (25%) of the shares subject to the option
shall vest and become exercisable on the one (1) year anniversary of the date of
grant, and one forty-eighth (1/48th) of the
shares subject to the option shall vest each become exercisable each month
thereafter on the same day of the month, or to the extent such a month does not
have the corresponding day, on the last day of any such month, until all the
shares are vested and exercisable, subject to Executive continuing to be an
employee on each such date.  The terms and conditions of this stock
option grant shall be governed by the Company’s 2004 Stock Incentive Plan (the
“Plan”) and shall be set forth in a separate stock option
agreement.

       

      3.3           Other Compensation.
In addition to the Base Salary payable to Executive hereunder, Executive shall
be eligible to receive the following benefits:

       

      3.3.1                      Performance
Bonus.  Executive shall be eligible to receive an annual
performance bonus of up to a specified percentage of Base Salary conditioned
upon achievement of certain corporate performance milestones as well as
performance milestones personal to Executive, all to be established and
determined by the Company’s Board of Directors or Chief Executive Officer after
discussion and consultant with Executive.  For the 2009 calendar year
only, the annual performance bonus shall have a target value of at least forty
percent (40%) of Base Salary.  The Board of Directors or the
Compensation Committee of the Board of Directors, as applicable, in its sole
discretion, shall determine whether such performance milestones have been
attained.

       

      3.3.2                      Benefits.  Benefits
to which other executive officers of the Company are entitled as determined by
the Company’s Board of Directors, on terms comparable thereto, including but not
limited to, participation in any and all pension and profit sharing plans, bonus
and incentive payment programs, group life insurance policies and plans,
medical, health, dental and disability insurance policies and plans, and the
like, which may be maintained by the Company, in the sole discretion of the
Company’s Board of Directors, for the benefit of its executive
officers.

       

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      3.3.3                      Paid Time
Off.  Executive shall be eligible to receive ten (10) days of
paid holidays and sixteen (16) days of paid time off per year, accruing annually
beginning on the Start Date, and such paid time off may be adjusted pursuant to
Company policies, if proportional to paid-time off adjustments then made as to
all the Company’s other executive officers.

       

      3.3.4                      Expense
Reimbursement.  The Company may reimburse Executive for all
reasonable out-of-pocket expenses incurred by him in the course of performing
his duties under this Agreement, which conform to the Company’s policies in
effect from time to time with respect to travel, entertainment and other
business expenses, subject to the Company’s requirements with respect to
reporting and documentation of such expenses pursuant to Company
policy.

       

      3.4           Withholdings.  Except
as expressly stated herein, all of Executive’s compensation shall be subject to
customary federal, state, local and other withholding taxes and any other
employment taxes as are commonly required to be collected or withheld by the
Company.

       

      4.           Termination.

       

      4.1           Termination for
Cause.  The Company shall terminate this Agreement for Cause
(as defined herein) by delivery of written notice to Executive specifying the
cause or causes relied upon for such termination.  If Executive’s
employment under this Agreement is terminated by the Company for Cause before
the last day of any calendar month, Executive shall be entitled to receive as
compensation for such calendar month, all accrued but unused paid-time off plus
the Base Salary set forth in Section 4.1 prorated to the date of termination on
the basis of a 30-day calendar month, and will forfeit any claims to a bonus or
other compensation or benefits, except as provided by law.  Grounds
for the Company to terminate this Agreement for “Cause” shall include only the
occurrence of any of the following events:

       

      4.1.1                      Executive’s
willful misconduct or gross negligence in the performance of his duties
hereunder;

       

      4.1.2                      Executive’s
willful failure or refusal to perform in the usual manner at the usual time
those duties which he regularly and routinely performs in connection with the
business of the Company or such other duties reasonably related to the capacity
in which he is employed hereunder which may be assigned to him by the Company’s
Board of Directors, if such failure or refusal has not been substantially cured
to the satisfaction of the Company’s Board of Directors within thirty (30) days
after written notice of such failure or refusal has been given by the Company to
Executive;

       

      4.1.3                      Executive’s
performance of any material action when specifically and reasonably instructed
not to do so by the Company’s Board of Directors;

       

      4.1.4                      Executive
engaging or in any manner participating in any activity which is directly
competitive with or intentionally injurious to the Company;

       

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      4.1.5                      Executive’s
commission of any fraud, or use or appropriation for his personal use or benefit
of any funds, properties or opportunities of the Company not authorized by the
Company’s Board of Directors to be so used or appropriated; or

       

      4.1.6                      Executive’s
conviction of any felony involving moral turpitude; or

       

      4.1.7                      Executive’s
willful or grossly negligent violation of the Company’s Code of
Ethics.

       

      For this
purpose of this definition, no act or failure to act by the Executive shall be
considered “willful” or “grossly negligent” if the Executive acted (or failed to
act) in good faith with the reasonable belief that his actions or omissions were
in the Company’s best interest.

       

      Any
notice of termination given pursuant to Section 4.1 shall effect termination as
of the date specified in such notice, or in the event no such date is specified,
on the last day of the month in which such notice is delivered.

       

      4.2           Termination Without Cause or
Resignation for Good Reason.  

       

      4.2.1               The
Company may voluntarily terminate this Agreement, and Executive’s employment,
without Cause by giving written notice to Executive.  Any such notice
shall specify the exact date of termination (the “Termination
Date”).  If Executive’s employment under this Agreement is terminated
by the Company without Cause (as defined herein), or if Executive resigns for
Good Reason (as defined herein), Executive shall be entitled to receive
severance payments in an amount equal to the higher of (A) his Base Salary at
the rate currently being paid as of the Termination Date for an additional six
(6) months of service as an employee, or (B) $122,500 (with such severance
payments being paid over the six (6) months following such termination in
accordance with the Company’s general payroll practices, as and when such
amounts would have been paid had Executive’s employment not been
terminated).  The Company also agrees to provide Executive with the
same level of health coverage and benefits as in effect for Executive (and his
eligible dependants) on the day immediately preceding the Termination Date;
provided, however, that (1) Executive constitutes a qualified beneficiary, as
defined in Section 4980(B)(g)(1) of the Code; and (2) Executive elects
continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended (“COBRA”), within the time prescribed pursuant to
COBRA.  The Company will continue to provide such continuation
coverage through the earlier of (A) the date six (6) months after the
Termination Date, or (B) the date upon which the Executive and Executive’s
eligible dependents become covered under another health
plan.  Executive will thereafter be responsible for the payment of
COBRA premiums (including, without limitation, all administrative expenses) for
the remaining COBRA period.  Notwithstanding the foregoing, Executive
shall not be entitled to exercise any options granted to Executive to purchase
shares of the Company’s stock that are unvested at the time of such termination.
The severance payments provided for in this paragraph shall be in lieu of, and
not in addition to, severance, if any, payable under any other plan or policy
now in effect or adopted or modified from time to time by the
Company.  Notwithstanding anything in this agreement to the contrary,
Executive’s right to receive severance pay is conditioned upon Executive’s
execution and delivery of a release of claims agreement, releasing all claims
Executive may have or claim to have against the Company and its respective
agents and representatives, in a form acceptable to the Company, in its sole
discretion (the “Release”).  The Release must be executed and returned
to the Company prior to any payment of severance benefits under this Agreement,
and in all cases prior to the date sixty (60) days after the Termination
Date.  Executive shall not be under any obligation to mitigate the
Company’s obligation by securing other employment or otherwise.

       

      

      
        
           

        

        
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      4.2.2                 Good
Reason.  For purposes of this Agreement, “Good Reason” means
the occurrence of any of the following, without Executive’s express written
consent:

       

       

      4.2.3                 A
material reduction of Executive’s responsibilities, authority or title relative
to Executive’s responsibilities, authority or title in effect immediately prior
to such reduction; including a reduction in responsibilities, authority or title
by virtue of the Company being acquired and made part of another entity (as, for
example, when the Chief Executive Officer of the Company remains as the senior
executive officer of a division or subsidiary of the acquiror which division or
subsidiary either contains substantially all of the Company’s business or is of
a comparable size), or a change in the Executive’s reporting position such that
Executive no longer reports directly to the CEO of a publicly-traded company
(unless Executive is reporting to the Chief Executive Officer of the parent
corporation in a group of controlled corporations, none of which is a
publicly-traded company);

       

      4.2.4                 A
material reduction in Executive’s Base Salary or benefits as in effect
immediately prior to such reduction other than pursuant to a reduction that also
is applied to substantially all other executive officers of the Company and
which reduction reduces the Base Salary and annual value of benefits, combined,
by a percentage reduction that is no greater than 10%;

       

      4.2.5                 The
relocation of Executive to a facility or location more than forty (40) miles
from his primary place of employment;

       

      4.2.6                 Any
purported termination of the Executive’s employment for “Cause” without first
satisfying the procedural protections, as applicable, required by the definition
of “Cause” in this Agreement; or

       

      4.2.7                 The
failure of the Company to obtain the assumption of this Agreement by a successor
and/or acquiror and an agreement that Executive will retain the substantially
similar responsibilities (to the extent described in Section 1) in the acquiror
or the merged or surviving company as he had prior to the
transaction.

       

      

      Executive
will not resign for Good Reason without first providing the Company with written
notice of the acts or omissions constituting the grounds for “Good Reason”
within ninety (90) days of the initial existence of the grounds for “Good
Reason” and, if such grounds are susceptible to cure, a reasonable cure period
of not less than thirty (30) days following the date of such
notice.  Any resignation for Good Reason must occur within two years
of the initial existence of the grounds constituting Good Reason.

       

      

      
        
           

        

        
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      4.3               Voluntary Termination
without Good Reason by Executive.  Executive may voluntarily
terminate this Agreement, without Good Reason, upon no less than thirty (30)
days written notice of such termination submitted to the Company’s Board of
Directors, and in such event Executive shall be entitled to receive all amounts
due to him through the date of termination, but not to any severance
payments.

       

      5.           Death or Disability During
Employment.

       

      5.1           This
Agreement shall terminate without notice upon the date of Executive’s death or
the date when Executive becomes “completely disabled” as that term is defined in
Section 5.4.

       

      5.2           In
the event of Executive’s death, all rights of Executive to compensation (Base
Salary and annual performance bonuses) hereunder shall automatically terminate
immediately upon his death, except that Executive’s heirs, personal
representatives or estate shall be entitled to any unpaid portion of his salary
and accrued benefits earned up to the date of his death.

       

      5.3           In
the event Executive is disabled, Executive shall be entitled to receive such
disability benefits as would apply to other senior Executives in the Company,
subject to the terms and conditions of any such Company disability
program.

       

      5.4           The
term “completely disabled” as used in this Agreement shall mean the inability of
Executive to perform his duties under this Agreement because he has become
permanently disabled within the meaning of any policy and disability income
insurance covering Executives of the Company then in force.  In the
event the Company has no policy of disability income insurance covering
Executives of the Company in force when Executive becomes disabled, the term
“completely disabled” shall mean the inability of Executive to perform his
normal and customary duties under this Agreement for a total of four (4)
consecutive months by reason of any incapacity, physical or mental, based upon
medical advice or an opinion provided by a licensed physician, acceptable to the
Company in its sole discretion, determines to have incapacitated Executive from
satisfactorily performing all of his usual services for the Company during the
foreseeable future.  The action of the Company shall be final and
binding and the date such action is taken shall be the date of such complete
disability for purposes of this Agreement, and upon such date this Agreement
shall become null and void and of no further force and effect.

       

      6.           Proprietary and Confidential
Information.

       

      6.1           Proprietary Information and
Inventions Assignment Agreement.  Executive represents and
warrants that he has executed and delivered to the Company the Company’s
Employee Proprietary Information and Inventions Assignment Agreement, attached
hereto and incorporated herein by reference.  Executive will not
disclose, nor use in the performance of his responsibilities at the Company, any
trade secret or other confidential information of any former employer, unless he
first obtains written authorization for its disclosure and use.

       

      6.2           Preservation and Return of
Property.  Executive will exercise reasonable care, consistent
with good business judgment to preserve in good working order, subject to
reasonable wear and tear from authorized usage, and to prevent loss of, any
equipment, instruments or accessories of the Company in his custody for the
purpose of conducting the business of the Company.  Upon request,
Executive will promptly surrender the same to the Company at the conclusion of
his employment, or if not surrendered, Executive will account to the Company to
its reasonable satisfaction as to the present location of all such instruments
or accessories and the business purpose for their placement at such
location.  At the conclusion of Executive’s employment with the
Company, he agrees to return such instruments or accessories to the Company or
to account for same to the Company’s reasonable satisfaction.

       

      

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      6.3           No Inconsistent
Agreements.  Executive affirms that he has no agreement with
any other party that would preclude his compliance with any obligations under
this Agreement.

       

      7.           Assignment and Binding
Effect.

       

      7.1           This
Agreement shall be binding upon and inure to the benefit of Executive and
Executive’s heirs, executors, administrators, estate, beneficiaries, and legal
representatives.  Neither this Agreement nor any rights or obligations
under this Agreement shall be assignable by either party without the prior
express written consent of the other party.  This Agreement shall be
binding upon and inure to the benefit of the Company and its successors, assigns
and legal representatives.

       

      8.           Notices.

       

      8.1           All
notices or demands of any kind required or permitted to be given by the Company
or Executive under this Agreement shall be given in writing and shall be
personally delivered (and receipted for) or sent by facsimile (with confirmation
of receipt), or sent by recognized commercial overnight courier, or mailed by
certified mail, return receipt requested, postage prepaid, addressed as
follows:

       

      If to the
Company:

      

      Chairman
of the Board of Directors

      Digirad
Corporation

      13950
Stowe Drive

      Poway,
California 92064-8803

      Telephone:  (858)
726-1600

      Facsimile:  (858)
726-1700

      

       

      If to
Executive:

      

      Richard
Slansky

      __________________

      __________________

      

      Any such
written notice shall be deemed received when personally delivered or upon
receipt in the event of facsimile or overnight courier, or three (3) days after
its deposit in the United States mail by certified mail as specified
above.  Either Party may change its address for notices by giving
notice to the other Party in the manner specified in this section.

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      

       

      9.           Choice of
Law.

       

      9.1           This
Agreement is made in Poway, California.  This Agreement shall be
construed and interpreted in accordance with the internal laws of the State of
California.  Each of the parties hereto agrees to the exclusive
jurisdiction of the state and federal courts located in the State of California
for any and all actions between the parties.  Any controversy or claim
arising out of or relating to this Agreement or breach thereof, whether
involving remedies at law or in equity, shall be adjudicated in San Diego
County, California.

       

      10.           Integration.

       

      10.1           This
Agreement, together with the standard forms of stock option agreements and the
stock option plan that contain the terms and conditions of Executive’s
outstanding equity awards, represents the entire agreement of the parties
relating to the subject matter of this Agreement, and supersedes all prior oral
and written employment agreements or arrangements between the
Parties.  This Agreement cannot be amended or modified except by a
written agreement signed by Executive and the Company.

       

      11.           Waiver.

       

      11.1           No
term, covenant or condition of this Agreement or any breach thereof shall be
deemed waived, except with the written consent of the Party against whom the
waiver is claimed, and any waiver of any such term, covenant, condition or
breach shall not be deemed to be a waiver of any preceding or succeeding breach
of the same or any other term, covenant, condition or breach.  No
failure to exercise, delay in exercising, or single or partial exercise of any
right, power or remedy by either party hereto shall constitute a waiver thereof
or shall preclude any other or further exercise of the same or any other right,
power or remedy.

       

      12.           Severability.

       

      12.1           The
unenforceability, invalidity, or illegality of any provision of this Agreement
shall not render any other provision of this Agreement unenforceable, invalid or
illegal.

       

      13.           Interpretation;
Construction.

       

      13.1           The
headings set forth in this Agreement are for convenience only and shall not be
used in interpreting this Agreement.  The Parties acknowledge that
each Party and its counsel has reviewed and revised, or had an opportunity to
review and revise, this Agreement, and the normal rule of construction to the
effect any ambiguities are to be resolved against the drafting party shall not
be employed in the interpretation of this Agreement.

       

      14.           Attorneys’
Fees.

       

      14.1           In
any controversy or claim arising out of or relating to this Agreement or the
breach thereof, which results in legal action, proceeding or arbitration, the
prevailing party in such action, as determined by the court or arbitrator, shall
be entitled to recover reasonable attorneys’ fees and costs incurred in such
action.

       

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      15.           Counterparts.

       

      15.1           This
Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall together constitute an original
thereof.

       

      16.           Representations and
Warranties.

       

      16.1           Executive
represents and warrants that he is not restricted or prohibited, contractually
or otherwise, from entering into and performing each of the terms and covenants
contained in this Agreement, and that his execution and performance of this
Agreement will not violate or breach any other agreement between Executive and
any other person or entity.

       

       

      17.           Code Section
409A.

       

      

      17.1           Notwithstanding
anything to the contrary in this Agreement, no Deferred Compensation Separation
Benefits (as defined below) will become payable under this Agreement until
Executive has a “separation from service” within the meaning of Section 409A of
the Code, and any proposed or final regulations and guidance promulgated
thereunder (“Section 409A”).  Further, if Executive is a “specified
employee” within the meaning of Section 409A at the time of Executive’s
termination (other than due to death), and the severance payable to Executive,
if any, pursuant to this Agreement, when considered together with any other
severance payments or separation benefits, are considered deferred compensation
under Section 409A (together, the “Deferred Compensation Separation Benefits”),
such Deferred Compensation Separation Payments that are otherwise payable within
the first six (6) months following Executive’s termination of employment will
become payable on the first payroll date that occurs on or after the date six
(6) months and one (1) day following the date of Executive’s termination of
employment.  All subsequent Deferred Compensation Separation Benefits,
if any, will be payable in accordance with the payment schedule applicable to
each payment or benefit.  Notwithstanding anything herein to the
contrary, if Executive dies following his termination but prior to the six (6)
month anniversary of his termination, then any payments delayed in accordance
with this paragraph will be payable in a lump sum as soon as administratively
practicable after the date of Executive’s death and all other Deferred
Compensation Separation Benefits will be payable in accordance with the payment
schedule applicable to each payment or benefit.  Each payment and
benefit payable under this Agreement is intended to constitute separate payments
for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

      

      17.2           Any
amount paid under this Agreement that satisfies the requirements of the
“short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury
Regulations shall not constitute Deferred Compensation Separation Benefits for
purposes of Section 17.1 above.

       

      17.3           Any
amount paid under this Agreement that qualifies as a payment made as a result of
an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii)
of the Treasury Regulations that does not exceed the Section 409A Limit (as
defined below) shall not constitute Deferred Compensation Separation Benefits
for purposes of Section 17.1 above.  For purposes of this Section
17.1, “Section 409A Limit” will mean the lesser of two (2) times: (i)
Executive’s annualized compensation based upon the annual rate of pay paid to
Executive during the Company’s taxable year preceding the Company’s taxable year
of Executive’s termination of employment as determined under Treasury Regulation
1.409A-1(b)(9)(iii)(A)(1); or (ii) the maximum amount that may be taken into
account under a qualified plan pursuant to Section 401(a)(17) of the Code for
the year in which Executive’s employment is terminated.

       

      

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

      17.4           The
foregoing provisions are intended to comply with the requirements of Section
409A so that none of the severance payments and benefits to be provided
hereunder will be subject to the additional tax imposed under Section 409A, and
any ambiguities herein will be interpreted to so comply.  The Company
and Executive agree to work together in good faith to consider amendments to
this Agreement and to take such reasonable actions which are necessary,
appropriate or desirable to avoid imposition of any additional tax or income
recognition prior to actual payment to Executive under Section
409A.

       

       

      18.           Limitation on
Payments.  In the event that the severance and other benefits
provided for in this Agreement or otherwise payable to Executive (i) constitute
“parachute payments” within the meaning of Section 280G of the Code and (ii) but
for this Section 18, would be subject to the excise tax imposed by Section 4999
of the Code, then Executive’s severance benefits under this Agreement will be
either:

       

      (a)           delivered
in full, or

       

      
        	
                 
      

              	
                (b)

              	
                delivered
      as to such lesser extent which would result in no portion of such
      severance benefits being subject to excise tax under Section 4999 of the
      Code,

              

      

      

      whichever
of the foregoing amounts, taking into account the applicable federal, state and
local income taxes and the excise tax imposed by Section 4999 of the Code,
results in the receipt by Executive on an after-tax basis, of the greatest
amount of severance benefits, notwithstanding that all or some portion of such
severance benefits may be taxable under Section 4999 of the
Code.  Unless the Company and Executive otherwise agree in writing,
any determination required under this Section 18 will be made in writing by the
Company’s independent public accountants immediately prior to a Change in
Control (the “Accountants”), whose determination will be conclusive and binding
upon Executive and the Company for all purposes.  For purposes of
making the calculations required by this Section 18, the Accountants may
make reasonable assumptions and approximations concerning applicable taxes and
may rely on reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code.  The Company and Executive will
furnish to the Accountants such information and documents as the Accountants may
reasonably request in order to make a determination under this
Section.  The Company will bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by this
Section 18.  Any reduction in payments and/or benefits required by
this Section 18 shall occur in the following order: (1) reduction of cash
payments; and (2) reduction of other benefits paid to Executive.  In
the event that acceleration of vesting of any equity awards is to be reduced,
such acceleration of vesting shall be cancelled in the reverse order of the date
of grant for Executive’s equity awards.

       

      

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

       

      19.           Arbitration.  

       

      19.1           In
the event of any dispute or claim relating to or arising out of this Agreement
and Executive’s employment relationship with the Company, Executive and the
Company agree to an arbitration in which (i) Executive is waiving any and
all rights to a jury trial but all court remedies will be available in
arbitration, (ii) Executive and the Company agree that all disputes between
Executive and the Company shall be fully and finally resolved by binding
arbitration, (iii) all disputes shall be resolved by a neutral arbitrator
who shall issue a written opinion, (iv) the arbitration shall provide for
adequate discovery, and (v) the Company shall pay all the arbitration fees,
except an amount equal to the filing fees Executive would have paid had
Executive filed a complaint in a court of law.  Executive and the
Company further agree that the arbitration shall be conducted in San Diego
County, California administered by Judicial Arbitration & Mediation
Services, Inc. (“JAMS”), pursuant to its Employment Arbitration Rules &
Procedures then in effect.

       

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

       

      
        
          	
                  THE
      COMPANY:

                  DIGIRAD
      CORPORATION

                  a
      Delaware Corporation

                  By: /s/
      Todd
      Clyde                                              
      

                  Todd
      Clyde, Chief Executive Officer

                   

                	
                  EXECUTIVE:

                   

                   

                  /s/ Richard
      Slansky                                              
      

                  Richard
      Slansky

                

        

      

      
 

       

       

       

       

       

       

      
        
           

        

        
          11

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