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EXHIBIT 10.23 

GE Healthcare Financial Services  

 
 

MASTER LEASE AGREEMENT    
    
    DATED AS OF               
    

	

	Customer's Name:	 	Type of Customer:
	Digirad Corporation	 	 	 	 	 	 
	 	 	o	Sole Proprietorship	 	o	Partnership
	Customer's Address:	 	ý	Corporation	 	o	Joint Venture
	9350 Trade Place	 	o	For-Profit	 	o	Not-for-Profit
	 	 	o	Gov't–Federal	 	o	Gov't–Other
	San Diego, CA 92126	 	 	 	 	 	 
	

Subject to, and in accordance with, the definitions, terms and conditions set forth on the face and subsequent pages of this Master Lease Agreement and in any applicable
Schedule, addendum, exhibit or attachment hereto, and subject to credit approval, General Electric Company ("GE", "we" or "us") agrees to lease GE Equipment and license any Operating Package for the
GE Equipment to the undersigned lessee (hereinafter "Lessee" or "you"), and in the case of Non-GE Equipment, we agree to lease the Non-GE Equipment to you. 

This
Master Lease Agreement, together with the terms and conditions of any applicable Schedule, addendum, exhibit or attachment hereto governs your lease of both GE Equipment and Non-GE
Equipment from us. 

You
and we acknowledge and agree that this Agreement, together with the terms of any applicable Schedule, addendum, exhibit or attachment hereto apply to and govern each transaction described in any
Schedule hereto. 

I.    GENERAL DEFINITIONS  

"Advance
Rental" means the monetary amount identified in a Schedule as the "Advance Rental", which is payable by you to us upon or before your execution and return of that Schedule to us. 

"Agreement"
means this document, entitled "Master Lease Agreement" and any and all Schedules, exhibits, addenda and/or attachments hereto. 

"Equipment"
means the hardware identified in a Schedule and all additions and accessions to and modifications, substitutions and replacements of the hardware. The term "Equipment" specifically
excludes the Operating Package, the InSite Package, and all parts of those packages. 

"Federal
Rate" means the current week's yield on "Treasury Constant Maturities: 5-Year" as published in the latest Federal Reserve Statistical Release available on a specified date. 

"GE
Equipment" means any Equipment which is listed on a Schedule, which Schedule is marked: 

TO
BE USED WITH GE EQUIPMENT ONLY 

"Monthly
Rental" means the monetary amount, identified in a Schedule as the "Monthly Rental," which is payable by you to us, as specified in that Schedule, for your lease of the Equipment in
accordance with the terms and conditions of that Schedule. 

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"Non-GE
Equipment" means any Equipment listed on a Schedule, which Schedule is marked: 

TO
BE USED WITH NON-GE EQUIPMENT ONLY 

"Sales
Order" means the final order of Non-GE Equipment (including equipment descriptions, quantities, model numbers, serial numbers, other identification and cost) accepted by Supplier
and you, for Supplier's sale of the Equipment to you. 

"Schedule"
means each transaction schedule made a part of this Agreement which sets forth additional terms and conditions of each separate transaction between us. Each transaction schedule in
combination with this Agreement will constitute a fully integrated transaction existing in accordance with its own terms and conditions separate from and independent of all other transactions covered
by this Agreement. Each transaction schedule in combination with this Agreement will be collectively
referred to as the "Schedule." If any provision of a transaction schedule conflicts with a provision of this Agreement, the conflicting provision of that transaction schedule will prevail. 

"Site"
means the specific geographic location or the specific vehicle and geographic location identified in a Schedule within which the Equipment and any Operating Package will be used by you and any
InSite Package might be used by us. 

"Software"
means a computer program or compilation of data that is fixed in any tangible medium of expression, or any storage medium from which the program may be perceived, reproduced or otherwise
communicated, either directly or with the aid of a machine or device. 

"Supplier"
means the person or entity who or which will sell or has sold the Equipment to you in accordance with the terms and conditions of the Sales Order. 

"Term"
or "Term of a (that) Schedule" means the period of time over which (1) in the case of GE Equipment, we have agreed to lease and license to you and you have agreed to hire, license and
accept from us the Equipment and any Operating Package for the Equipment identified in each (or a particular) Schedule; and (2) in the case of Non-GE Equipment, we have agreed to
lease to you and you have agreed to hire and accept from us the Equipment identified in each (or a particular) Schedule. 

II.    GENERAL PROVISIONS  

ACCESS AND REMOVAL  

We
may have unrestricted access to the Equipment at all reasonable times while a Schedule is in force and unrestricted access at all reasonable times to remove the Equipment after expiration or
earlier termination of the Schedule. Nothing herein shall be construed to obligate us to remove the Equipment after expiration or early termination of the Schedule, as you are obligated to do so
below. 

At
the expiration or earlier termination of a Schedule, you will arrange for the removal and return of the Equipment at your expense, including all transportation to a place designated by us within
the Continental United States of America. If you make modifications to the Site after the Equipment has been installed which impede the removal of the Equipment, the cost of removing the impediments
and restoring the Site will be at your expense. The Equipment will be returned to us or our assigns on the expiration or earlier termination of a Schedule in the same condition and appearance as when
received by you (reasonable wear and tear excepted) and in good working order and condition, operable in accordance with our then prevailing performance specifications, or in the case of
Non-GE Equipment, the Supplier's and, if different, the manufacturer's then prevailing performance specifications for it. All waste material and fluid must be removed from the Equipment
and disposed of by you in accordance with then current waste disposal laws. If the Equipment is not so returned, we, at your sole expense, may have the Equipment restored to such a condition. If we so
require, the units of Equipment shall 

2

 

be
de-installed and crated by an authorized manufacturer's representative or such other service person as is reasonably satisfactory to us. 

If
we so require, at our sole discretion, you shall obtain a policy of transit insurance for the return of the Equipment to us in an amount equal to the replacement value of the Equipment. Such
transit insurance must name us as the loss payee. You shall pay for all costs of complying with this section. 

You
shall provide to us a detailed inventory of all components of the Equipment including model and serial numbers. You shall also provide an up to date copy of all other documentation pertaining to
the Equipment. 

All
service manuals, blueprints, process flow diagrams, operating manuals, inventory and maintenance records shall be given to us at least ninety (90) days, and not more than one hundred twenty
(120) days prior to a lease termination. 

You
shall make the Equipment available for on-site operational inspections by potential purchasers at least one hundred twenty (120) days prior to and continuing up to lease
termination. We shall provide you with reasonable notice prior to any inspection. You shall provide personnel, power and other requirements necessary to demonstrate electrical, hydraulic and
mechanical systems for each item of Equipment. 

Until
you have fully complied with the terms of this section and have returned the Equipment to us, your rent payment obligation and all other obligations under this Agreement and the Schedule shall
continue from month to month notwithstanding any expiration or termination of the lease term. 

You
shall, at all times, keep accurate and complete records of the Equipment and we, our successors, and assigns, and their respective agents, shall have the right to examine, inspect and make
extracts from all of your books and records relating to the Equipment at any time during normal business hours. 

ALTERATION AND MOVEMENT OF EQUIPMENT OR OPERATING PACKAGE  

You
will not, without our prior written consent, alter or change the Equipment or any Operating Package. Any modification, improvement or substitution becomes our property. We reserve the right, in
the case of GE Equipment, to modify the Equipment and any Operating Package as may be required by law or regulation or to avoid alleged patent or copyright infringement. In the case of
Non-GE Equipment, if you fail to do so in a timely manner, we reserve the right to have the Equipment modified, at your expense, as may be required by law or regulation or to avoid alleged
patent or copyright infringement. 

You
will not move the Equipment or any Operating Package from the Site to any other location, except with our advance written consent. All costs of moving the Equipment and any Operating Package
during the Term of a Schedule will be at your expense. 

ADDITIONS OR REPLACEMENTS  

If
you request, additional or replacement Equipment will be furnished on our terms and rates then in effect. 

If,
after the signing and delivery of a Schedule, applicable law sets different standards that require a modification or replacement of the Equipment, we will adjust the Monthly Rental to reflect
those necessary modifications or replacements on our terms and rates then in effect. 

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CARE, MAINTENANCE AND OPERATION OF EQUIPMENT  

Care
of the Equipment and any Operating Package is your sole obligation and responsibility. You agree to care for and maintain the Equipment and any Operating Package in good working order and
operating condition at all times during the Term of a Schedule in accordance with our then prevailing specifications, or, in the case of Non-GE Equipment, the Supplier's and, if different,
the manufacturer's then prevailing specifications. 

You
promptly will make all repairs, and will effect such repairs, replacements, parts, and the like as might be necessary to maintain the Equipment and any Operating Package in good working order and
operating condition at all times during the Term of a Schedule in accordance with our then prevailing specifications, or, in the case of Non-GE Equipment, the Supplier's and, if different,
the manufacturer's then prevailing specifications. 

The
cost of all such care, maintenance, repairs, replacements, parts and the like will be borne solely by you as a normal operating cost incident to a Schedule. We have the right to inspect the
Equipment and its maintenance records at all reasonable times during the Term of a Schedule. 

All
repairs, replacements, substitutions, parts, and the like and all other accessions to the Equipment and/or any Operating Package will become our property. 

You
assume full responsibility for the safety and any consequence of lack of safety of the Equipment and any Operating Package. 

YOUR REPRESENTATIONS, WARRANTIES & COVENANTS  

You
hereby represent and warrant to us, and covenant that as of the date hereof and as of the date of execution of each Schedule hereto that: 

	(a)
	You
are, and will remain, duly organized, existing and in good standing under the laws of the State set forth on the first page of this Agreement, have your chief executive offices at
the location set forth on such page, and you are, and will remain, duly qualified and licensed in every jurisdiction wherever necessary to carry on your business and operations, including, but not
limited to the jurisdiction(s) where the Equipment is or is to be located;

	(b)
	You
have adequate power and capacity to enter into, and to perform your obligations under this Agreement, each Schedule and any other documents evidencing, or given in connection
with, any of the transactions contemplated by a Schedule (all of the foregoing being hereinafter referred to as the "Lease Documents");

	(c)
	This
Agreement and the other Lease Documents have been duly authorized, executed and delivered by you and constitute legal, valid and binding agreements enforceable under all
applicable laws in accordance with their terms, except to the extent that the enforcement of remedies may be limited under applicable bankruptcy and insolvency laws;

	(d)
	No
approval, consent or withholding of objections is required from any governmental authority or instrumentality with respect to the entry into, or performance by you, of any of the
Lease Documents, except such as may have already been obtained;

	(e)
	Your
entry into, and performance of the Lease Documents will not (i) violate any of your organizational documents or any judgment, order, law or regulation applicable to you,
or (ii) result in any breach of, constitute a default under, or result in the creation of any lien, claim or encumbrance on any of your property pursuant to, any indenture mortgage, deed of
trust, bank loan, credit agreement, or other agreement or instrument to which you are a party; 

4

 

	(f)
	There
are no suits or proceedings pending or threatened in any court or before any commission, board or other administrative agency against or affecting you which could, in the
aggregate, have a material adverse effect on you, your business or operations, or your ability to perform your obligations under the Lease Documents;

	(g)
	All
financial statements delivered to us by you have been prepared in accordance with generally accepted accounting principles, and since the date of the most recent financial
statement, there has been no material adverse change:

	(h)
	The
Equipment is not, and will not be, used by you for consumer, personal, family or household purposes;

	(i)
	The
Equipment is, and you will keep it, in good condition and repair and you will not be negligent in the care and use thereof;

	(j)
	The
Equipment is, and you will keep it, free and clear of all liens, claims and encumbrances of every kind, nature and description;

	(k)
	All
Equipment shall remain personal property regardless of how and to what degree it may be affixed or attached to any building or structure or what may be the consequences of its
being removed from such building or structure, or for what purpose the Equipment or the building or structure may be used. You agree not to remove any of the Equipment from the Site without our prior
written consent;

	(l)
	You
will (i) use the Equipment only in your trade or business, and (ii) use and maintain the Equipment only in compliance with all applicable laws; and

	(m)
	You
will not, without our prior written consent, (i) part with possession of any of the Equipment (except to us or for maintenance and repair), (ii) remove any of the
Equipment from the Continental United States, or (iii) sell, rent, sublease, mortgage, grant a security interest in or otherwise transfer or encumber any of the Equipment. 

CHATTEL PAPER  

To
the extent that any Schedule would constitute chattel paper, as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction, no security interest therein may be
created through the transfer of possession of this Agreement in and of itself without the transfer of possession of the original of the Schedule executed pursuant to this Agreement and incorporating
this Agreement by reference; and no security interest in this Agreement and a Schedule may be created by the transfer of possession of any counterpart of the Schedule other than the original thereof,
which shall be identified as the document marked "Original" and all other counterparts shall be marked "Duplicate". 

INSURANCE  

You
agree, at your own expense, to keep the Equipment insured with companies acceptable to us for such amounts and against such hazards as we may require, including, but not limited to, all risk
physical damage insurance for the Equipment itself, with losses under the policies payable to us or our assigns, if any, and liability coverage for personal injuries, death and/or property damages on
terms satisfactory to us, and to deliver the policies, or evidence of insurance as may be satisfactory to us, with current premium receipts. GE and/or its officers, agents, employees and/or successors
and/or assigns shall be named as an additional insured under all such insurance policies with loss payable clauses under said policies payable in our favor, as our interest may appear, irrespective of
any breach of warranty and/or other omission by you. Said Equipment shall be insured for not less than its stated replacement value or such other amount as we shall specify. Said liability insurance
shall be in an 

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amount
of not less than two million dollars ($2,000,000.00) or such other amount as we shall specify. No insurance shall be subject to any co-insurance clause. You hereby appoint us as your
attorney-in-fact to make proof of loss and claims for insurance and to make adjustments with insurers and to receive payment of and execute or endorse all documents, checks or
drafts in connection with payments made with respect to the insurance policies. You will not make adjustments with insurers except with our prior written consent. The policies will provide that the
insurance may not be altered or canceled by the insurer until after thirty days written notice to us. In the event of damage to or loss, secretion, destruction or theft of the Equipment, or any
portion of the Equipment, whether in whole or in part, you will pay to us the replacement value of all Equipment, or of the portion of the Equipment affected if the value and use of the remainder of
the Equipment are not affected at the time of such occurrence (except the extent that we receive proceeds of insurance covering such Equipment), plus any indemnification pursuant to a provision of the
Schedule, We may, at our option, apply proceeds of insurance, in whole or in part, (1) to repair or compare replace the Equipment or any portion of it, (2) to satisfy any of your
obligations pursuant to any indemnification provision of this Agreement or a Schedule, (3) to afford you a pro-rata reduction in rent payments attributable to the Equipment or any
unit of it, or (4) to satisfy any other of your obligations to us. 

If
any Equipment is lost or damaged where the estimated repair costs would exceed the greater of ten percent (10%) of the original Equipment cost or Ten Thousand Dollars ($10,000.00), or is otherwise
involved in an accident causing personal injury or property damage, you will promptly and fully report the event to us in writing. 

TAXES  

You
will not be obligated to pay any federal, state or local tax imposed upon or measured by our net income, You will report (to the extent that it is legally permissible) and pay promptly all other
taxes, fees and assessments relating to the Equipment or the purchase, ownership, delivery, leasing,
possession, use, operation or service of the Equipment, or any Schedule (all hereinafter called "Taxes"). You will (1) promptly reimburse us upon receipt of our written request for
reimbursement for any Taxes charged to or assessed against us; (2) on our request, submit to us written evidence of your payment of Taxes, (3) on all reports or returns show the
ownership of the Equipment by us and send a copy of the tax report or return to us, or (4) provide us with a tax exemption certificate acceptable to the taxing authority. 

Your
failure to comply with the terms of this section will constitute an event of default as more fully set forth in the "Events of Default" section below, and may, at our option, under the terms of
"Remedies Upon Default" section below result in the increase in your Monthly Rental. The inclusion of the foregoing sentence in this section of the Agreement is for informational purposes and is not
intended, and shall not be construed to limit, in anyway, the events which constitute Events of Default or the resulting remedies. 

If
any tax or other lien shall attach to any Equipment, you will notify us in writing, within ten days after you become aware of the tax or lien. The notice shall include the full particulars of the
tax or lien and the location of such Equipment on the date of the notice. 

FILING  

You
will sign and return to us, when requested, such instrument(s) as applicable law requires or permits to give public notice of our interest in the Equipment. You hereby irrevocably appoint us or
our designee as your agent and attorney-in-fact to sign such instrument(s) on your behalf and to file them. 

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CONFIDENTIALITY OF INFORMATION  

We,
and in the case of GE Equipment our service contractor, will treat patient information as confidential. 

INDEPENDENT CONTRACTOR  

We
are an independent contractor of yours. Our employees are under our exclusive direction and control. In the case of GE Equipment, our service contractor's employees are under our service
contractor's exclusive direction and control. Nothing in a Schedule will be construed to designate us, any of our employees, our service contractor or any of its employees as your employees, agents,
joint venturers or partners. 

FINANCIAL STATEMENTS  

Upon
our request during the Term of a Schedule, you will provide us with copies of your annual financial statements which will include your balance sheet, statement of revenues and expenses, a
statement of sources and uses of funds, and notes to your financial statements prepared by an independent certified public accountant for each of your fiscal years that partially or completely falls
within the Term of a Schedule. Between fiscal years, you will provide us, upon our request, the most recent copies of your previously mentioned financial statements, which need not be audited but must
be certified by your chief financial employee. 

ASSIGNMENTS AND SUBLEASING  

We
may assign a Schedule or any interest of ours in a Schedule to any person or entity. Our assignees may reassign a Schedule to us. If the entity to which we assign a Schedule or any interest of ours
in a Schedule is not an affiliated entity of ours, we will provide you with prior written notice of such assignment. Such notice to you will be for informational purposes only and you do not, and will
not
have any right to approve or object to such assignment. You agree that if we do assign a Schedule, our assignee will have the same rights and benefits we now have. You agree that the rights of our
assignee will not be subject to claims, defenses or set-offs that you may have against us. 

In
the case of GE Equipment, we may subcontract to a service contractor of our choice any of our service obligations to you. No such assignment or subcontract will release us from those obligations,
if any, to you. 

You
may not assign or otherwise transfer a Schedule, or any interest in a Schedule, without our prior written consent. Any assignment or transfer without this type of consent will be void. Any consent
to such assignment or transfer will not be deemed to be a consent to any later assignment or transfer. 

You
will not sublease the Equipment in whole or in part without our prior written consent. Any sublease without this type of consent will be void. 

No
Schedule or interest in a Schedule and no Equipment or any related Operating Package or service will be subject to involuntary assignment or transfer. Any such attempted assignment, sublease,
sublicense, transfer or sale will be void, and will, at our option, terminate the Schedule and every lease of sublease of Equipment. 

LIMITATIONS OF REMEDIES AND DAMAGES  

THE
TOTAL LIABILITY OF US AND OUR REPRESENTATIVES TO YOU AND YOUR EXCLUSIVE REMEDY RELATING TO A SCHEDULE AND THE WARRANTY SERVICE TO 

7

 

BE
PROVIDED UNDER IT, IF ANY, IS LIMITED TO THE MONTHLY RENTAL FOR THE SERVICE WHICH IS THE BASIS FOR THE CLAIM. 

You
agree that we and our representatives have no liability to you for (1) any penal, punitive, incidental, special, or consequential damages such as lost profit or revenue, (2) any
assistance not required under the Schedule, or (3) anything occurring after the end of a Schedule. 

You
will be barred from any remedy unless you give us prompt written notice of the problem. 

This
is a commercial lease transaction. Any claim related to this contract will be covered solely by commercial legal principles. WE, OUR REPRESENTATIVES AND YOU WILL NOT HAVE ANY NEGLIGENCE OR OTHER
TORT LIABILITY TO THE OTHER ARISING FROM A SCHEDULE. This limitation does not, in the case of GE Equipment only, affect claims by third parties for personal injury due to our, our representatives', or
your negligence or product liability. 

INDEMNIFICATION  

You
hereby agree to indemnify us and hold us harmless, as well as our officers, agents, employees, successors and assigns, now and in the future, and save us, as well as our officers, agents,
employees, successors and assigns, from and against any and all losses, damages, penalties, injuries, claims, actions, causes of action, suits and/or liabilities, including attorney fee claims, that
we may incur directly or indirectly, of any kind an any nature whatsoever, arising out of, or resulting from, this Agreement and any Schedules. 

Your
agreement to indemnify us and hold us harmless, includes, but is not limited to, any matter that concerns the manufacture, purchase, acceptance or rejection of the Equipment. It also includes,
but is not limited to, your ownership, transfer, delivery, installation, lease, possession, use, operation, maintenance or failure to maintain, disposition or return of the Equipment. It also
includes, but is not limited to, latent and other defects, in the Equipment, whether or not discoverable by us or you. It also includes, but is not limited to, any claim for patent, trademark,
copyright, or other intellectual property rights infringement or environmental claims or litigation, other than claims for which we are obligated to indemnify you under the "Patent and Copyright
Limited Warranties" section, if such section exists in a Schedule hereto. 

You
agree to indemnify us and hold us harmless, as well as our officers, agents, employees, successors and assigns, for our own negligence and/or negligent acts and/or errors and/or omissions, as well
as any injuries and/or damages resulting therefrom. 

We
agree that you are not indemnifying us, nor our officers, agents, employees, successors and assigns, for our own willful, wanton, intentional and/or gross acts, errors and/or omissions, nor for any
injuries and/or damages resulting therefrom as claimed by you or third parties to this Agreement or any Schedule. 

You
shall, upon request, defend any actions based on, or arising out of, any of the foregoing at your own expense. 

Your
agreement to indemnify us and hold us harmless is expressly made for the benefit of, the inducement of, and will be enforceable by us, our officers, agents, successors and assigns. 

Your
agreement to indemnify us and hold us harmless will continue in full force and effect notwithstanding the expiration or early termination of this Agreement or any Schedule. 

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EVENTS OF DEFAULT  

An
event of default will occur under a Schedule if you (1) fail to pay any installment of Advance Rental, Monthly Rental, or other payment required under the Schedule or this Agreement when due
and such failure continues for a period of ten days, or (2) are determined by us to have made any false or misleading statement or representation in connection with a Schedule, or this
Agreement, including, but not limited to, the representations and warranties contained in the "Your Representation, Warranties and Covenants" section above, or (3) attempt, without our prior
written consent to sell, assign, sublease, mortgage, grant a security interest in or otherwise transfer or encumber all or any part of your interest in a Schedule or the Equipment, or (4) fail
to perform or observe any other covenant, condition or agreement to be performed by you under a Schedule or this Agreement and such failure continues uncured for a period of ten days after written
notice is sent by us, including, but not limited to, your failure to comply with the terms of the section "Taxes" above, or (5) terminate your existence, enter into a merger or consolidation,
or permit a change in your ownership or management control, or (6) breach any of your insurance obligations, including, but not limited to those obligations under the section "Insurance" above,
or (7) become insolvent or cease to do business as a going concern, or (8) or any Guarantor of your obligations hereunder become the subject of a petition, either voluntary or
involuntary, under any bankruptcy, insolvency or reorganization law, and in the case of an involuntary petition, the petition is not dismissed within thirty (30)-days of its filing date,
or (9) or any of the Equipment is subjected to, or threatened with attachment, execution, levy, seizure or confiscation in any legal proceeding or otherwise, or (10) or any Guarantor of
your obligations under a Schedule have a receiver appointed for any part of your respective properties. 

Your
default under a Schedule or a default by you or any entity managed or controlled by you or by any principal of yours under any other agreement or contract with us, regardless of when the
agreement or contract was entered into, will, at our sole option, constitute a default of that Schedule and all other agreements and contracts between you and/or such a principal or entity and us,
including, but not limited to this Agreement and any Schedule hereunder. 

REMEDIES UPON DEFAULT  

Upon
the occurrence of any event of default under a Schedule or this Agreement and at any time thereafter, we may, at our sole discretion, do one or more of the following: (1) collect from you,
on all moneys due but unpaid for more than ten days, a late charge of five cents per dollar on, and in addition to, the amount of all such moneys, but not exceeding the lawful maximum,
(2) terminate any or all Schedules, whereupon all of your right to the Equipment described in any terminated Schedule and every part thereof will absolutely cease and terminate,
(3) declare all sums due and the present value of all sums to become due for the full Term of any or all Schedule(s) immediately due and payable, (4) demand that you return all Equipment
described in any Schedule to us in accordance with the section entitled "Access and Removal," (5) enter upon any premises where the Equipment described in any Schedule is located and take
immediate possession of and remove it, all without liability to us or our agents for such entry or for damage to property, or otherwise, (6) sell any or all of the Equipment described in any
Schedule at public or private sale, or otherwise dispose of, hold, use, operate, lease to others or keep idle the Equipment described in any Schedule, with or without notice to you or advertisement,
all free and clear of any of your rights and without any duty to account to you for such action or inaction or for any proceeds, other than to apply such proceeds (a) first to any and all costs
and expenses, including, but not limited to legal fees, of such disposition, and (b) to any amounts owing by you to us (7) if the event of default is your failure to pay or reimburse us
for the payment of taxes as required in section "Taxes" above, we may, but need not, unilaterally increase the Monthly Rental to be paid by you by an amount necessary to amortize the amount of such
unpaid or unreimbursed taxes over the balance of the Term at an interest rate determined by us at our sole 

9

 

discretion,
but not exceeding the lawful maximum or (8) exercise any other right or remedy which might be available to us under applicable law including, without limitation, the rights to
specific performance and to recover damages for breach. In addition, you will be liable for all legal fees and other costs and expenses resulting from the foregoing defaults and the exercise of our
remedies. 

You
and we hereby waive unconditionally all rights to a jury trial of any claim or cause of action related to, based upon or arising out of this Agreement, any Schedule, any related documents, any
dealings between us and you relating to the subject matter of this transaction or any related transactions and/or the relationship that is being established between us and you. The scope of this
waiver is intended to be all encompassing of any and all disputes that may be filed in any court. This
waiver is irrevocable, and may not be modified either orally or in writing. This waiver shall also apply to any subsequent amendments, renewals, supplements or modifications to this Agreement and to
any other documents or agreements relating to this transaction or any related transaction. In the event of litigation, this Agreement may be filed as a written consent to trial by the court. 

No
remedy referred to in this section is intended to be exclusive, but each will be cumulative and in addition to any other remedy referred to above or otherwise available to us at law or in equity.
To the extent permitted by applicable law, you hereby waive any rights now or later conferred by statute or otherwise which might require us to use, sell, lease or otherwise dispose of any Equipment
in mitigation of damages or which might otherwise limit or modify any of our rights or remedies under a Schedule. 

STATUS OF LESSEE AND EQUIPMENT  

You
shall promptly notify us, in writing, in the event of (i) any change in your name, (ii) any relocation of your chief executive offices, (iii) any relocation of any Equipment,
or (iv) any lien, claim or incumbrance attaching or being made against any of the Equipment. 

SURVIVAL, WAIVER, SEVERABILITY, AND CHOICE OF LAW  

All
of our rights, privileges and remedies with respect to a Schedule and this Agreement will continue in full force and effect after the end of the Schedule. 

Our
failure to enforce any provision of a Schedule is not a waiver of that provision or of our right to later enforce each and every provision. If any part of a Schedule is found to be invalid, the
remaining part will be effective. The law of the state where the Equipment is located will govern any dispute between us. 

Time
is of the essence with respect to this Agreement and any Schedule hereunder. 

All
notices required to be given hereunder shall be deemed adequately given if sent by registered or certified mail to the addressee at its address stated herein, or at such other place as addressee
may have specified in writing. 

ENTIRE AGREEMENT  

Each
Schedule, including each exhibit, is intended to be a complete and exclusive statement of the terms of the contract between us. No prior proposals, statements, course of dealing or usage of the
trade will be a part of a Schedule. 

A
Schedule may be entered into only by one of our Region Sales Managers, one of our Financial Services Account Managers or our Manager, Financial Services and you. A Schedule may only be modified or
amended (whether concurrently with, or subsequent to, its execution) by a writing signed by our designated representative and you. 

10

 

This
Agreement may be entered into by, one of our Region Sales Managers, one of our Financial Services Account Managers, or a designated financial services manager and you. This Agreement may only be
modified or amended (whether concurrently with, or subsequent to, its execution) by a writing signed by our designated representative and you. 

You
and we have caused this Agreement to be executed by a duly authorized representative of each of us on the date below his/her signature. This Agreement may be executed in several originals, which
together constitute but one and the same Agreement. You and we agree that a signature affixed to any one of the originals and delivered by facsimile shall be valid, binding and enforceable. 

	GENERAL ELECTRIC COMPANY	 	Digirad Corporation
	

/s/  Colleen Kantz      
 Authorized Signature	
 	

/s/  Joyce Mehrberg      
 Authorized Signature
	
TC
 Title	
 	
CFO
 Title
	
9/27/00
 Date	
 	
9/26/00
 Date
	

City                State                        
        Telephone	
 	

San Diego, CA                                    858 530
1201

City                State                        
        Telephone
	

 	
 	

Send Executed Documents To:
	 	 	Joyce Mehrberg

11

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EXHIBIT 10.31 

THIS
WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO AN EXEMPTION UNDER SUCH ACT. 

Void
after

January 25, 2007 

 
 

COMMON STOCK WARRANT
  OF
  DIGIRAD CORPORATION    
    

        THIS CERTIFIES THAT, for value received,
                        , together with his, her or its successors and assigns (the "Holder") is
entitled to subscribe for and purchase, on the terms hereof, shares of Common Stock of Digirad Corporation, a Delaware corporation (the "Company"), subject to the following terms and conditions: 

        1.    Convertible Promissory Note and Warrant Agreement.    This Warrant ("Warrant") is
issued pursuant to that certain Convertible Promissory Note and Warrant Agreement dated January 25, 2002 (the "Agreement") by and among the Company, the Holder and other Investors (as defined
in the Agreement). Pursuant to the Agreement, the Company also issued the Holder in connection with the Closing (as defined in the Agreement) a certain Convertible Promissory Note (the "Note"). The
Note and the other convertible promissory notes issued pursuant to the Agreement are collectively referred to herein as the "Notes." 

        2.    Exercise of Warrant.    The terms and conditions upon which this Warrant may be
exercised, and the Common Stock covered hereby may be purchased, are as follows: 

        2.1    Term.    Subject to the terms hereof, this Warrant may be exercised at any time,
or from time to time, in whole or in part (the "Exercise Date"), on or before the earlier of the following (the "Expiration Period"): (a) 5:00 p.m. (Pacific Time) on January 25,
2007, or (b) immediately prior to the closing of the acquisition of the Company by another entity by means of a transaction or series of related transactions, or the closing of the sale of all
or substantially all of the assets of the Company, unless the Company's shareholders of record prior to such acquisition or sale shall hold at least fifty percent (50%) of the voting power of the
acquiring or surviving entity immediately after such acquisition or sale (each, an "Acquisition Event"). At least ten (10) business days prior to the occurrence of an Acquisition Event, the
Company shall send to the Holder notice of such event and that the Holder's rights under this Warrant shall terminate upon the occurrence of such event; provided, that if the Company sends such notice
less than ten (10) days prior to the occurrence of such event, the Holder's right to exercise this Warrant shall be extended for a period of ten (10) days after the date the Holder
receives such notice, after which time the Holder's rights under this Warrant shall terminate. The notice required by this section may be waived by the Holder. 

        2.2    Number of Shares.    Prior to March 31, 2002, this Warrant may be exercised
for an aggregate of up to                     shares of Common Stock (the "Initial Warrant Shares"). In the event that as of March 31, 2002,
the Note remains
outstanding and the Conversion Amount (as defined in the Note) has not yet been paid or otherwise converted into shares of the Company's capital stock prior to a Payment Date (as defined in the
Notes), then this Warrant will become 

 

exercisable
for an increasing number of shares of Common Stock, as expressed by the following formula: 

A =                +    [(.005) (B) (C)]

	 	 	A =	 	The aggregate number of shares of Common Stock that may be purchased by Holder pursuant to this Warrant.
	

 	
 	

B =	
 	

The original principal amount of the Note.
	

 	
 	

C =	
 	

Prior to March 31, 2002, "C" shall equal zero (0). In the event that the Note remains outstanding and the Conversion Amount (as defined in the Note) has not yet been paid or converted into shares of the Company's capital stock prior to a Payment
Date (as defined in the Notes), then: (i) as of March 31, 2002, "C" shall equal one (1); (ii) as of April 30, 2002, "C" shall equal two (2); as of May 31, 2002, "C" shall equal three (3); as of June 30, 2002, "C" shall
equal four (4); as of July 31, 2002, "C" shall equal five (5); as of August 31, 2002, "C" shall equal six (6); as of September 30, 2002, "C" shall equal seven (7); as of October 31, 2002, "C" shall equal eight (8); as of
November 30, 2002, "C" shall equal nine (9); and, as of December 31, 2002, "C" shall equal ten (10).

        2.3    Exercise Price.    This Warrant shall be exercisable to purchase the number of
shares of Common Stock specified in Section 2.2 above at a price of $1.50 per share. 

        2.4    Method of Exercise.    The exercise of the purchase rights evidenced by this
Warrant shall be effected by (a) the surrender of the Warrant, together with a duly executed copy of the form of subscription attached hereto as Schedule A,
to the Company at its principal offices and (b) the delivery of the purchase price by check or bank draft payable to the Company's order or by wire transfer of same day funds to the Company's
account for the number of shares for which the purchase rights hereunder are being exercised or any other form of consideration approved by the Company's Board of Directors. Each exercise of this
Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided herein or at such later
date as may be specified in the executed form of subscription (the "Conversion Date"), and at such time, the person or persons in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such exercise, as provided herein, shall be deemed to have become the holder or holders of record thereof. 

        2.5    Net Issue Exercise.    In lieu of exercising this Warrant by paying the Exercise
Price in cash or by check, Holder may elect to receive shares equal to the value of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the
Company together with the Notice of Cashless Exercise annexed hereto as Schedule B duly 

2

 

completed
and executed in which event the Company shall issue to Holder a number of shares of Common Stock computed using the following formula: 

	 	 	 	 	 	 	X= (Y)(A-B)
	 	 	 	 	 	 	          A
	

 	
 	

Where	
 	

X =	
 	

The number of shares of Common Stock to be issued to Holder.
	

 	
 	

 	
 	

Y =	
 	

The number of shares of Common Stock purchasable under this Warrant pursuant to Section 2.2.
	

 	
 	

 	
 	

A =	
 	

The fair market value of one share of Common Stock on the Conversion Date.
	

 	
 	

 	
 	

B =	
 	

The Exercise Price (as determined pursuant to Section 2.3) on the Conversion Date.

        2.6    Determination of Fair Market Value.    For purposes of this Section 2, the
fair market value of a share of Common Stock on the Conversion Date shall mean: 

        (a)   If
exercised in connection with an initial public offering of the Company's stock pursuant to the Securities Act of 1933, as amended, the fair market value of the Common
Stock shall be the price at which shares of Common Stock are sold to the public as determined by the Company and any underwriters as reflected in the prospectus. 

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

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

        (d)   If
there is no public market for the Common Stock, then the fair market value shall be determined in good faith by the Company's Board of Directors. 

        3.    Adjustments to Exercise Price.    The number of shares of Common Stock issuable
upon the exercise of this Warrant and the exercise price hereunder shall be subject to adjustment from time to time upon the happening of certain events, as follows: 

        3.1    Splits and Subdivisions.    If the Company should at any time or from time to time
fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of the holders of Common Stock entitled to receive a dividend or other
distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common
Stock (hereinafter referred to as the "Common Stock Equivalents") without payment of any consideration by such holder for the additional shares of Common Stock or Common Stock Equivalents, then, as of
such record date (or the date of such distribution, split or subdivision if no record date is fixed), the purchase price shall be appropriately decreased and the number of shares 

3

 

of
Common Stock which this Warrant is exercisable for, if any, shall be appropriately increased in proportion to such increase of outstanding shares. 

        3.2    Combination of Shares.    If the number of shares of Common Stock outstanding at
any time after the date hereof is decreased by a combination of the outstanding shares of Common Stock, the purchase price shall be appropriately increased and the number of shares of Common Stock for
which this Warrant is exercisable, if any, shall be appropriately decreased in proportion to such decrease in outstanding shares. 

        3.3    Adjustments for Other Distributions.    In the event the Company shall declare a
distribution payable in securities of other persons, evidences of indebtedness issued by the Company or other persons, assets (excluding cash dividends) or options or rights not referred to in
Section 3.1, then, in each such case for the purpose of this Section 3.3, upon exercise of this Warrant the Holder shall be entitled to a proportionate share of any such distribution as
though such Holder was the holder of the number of shares of Common Stock of the Company into which this Warrant may be exercised as of the record date fixed for the determination of the holders of
Common Stock of the Company entitled to receive such distribution. 

        3.4    Reclassification or Reorganization.    If the Common Stock (or any shares of stock
or other securities which may be) issuable upon the exercise of this Warrant shall be changed into the same or different number of shares of any class or classes of stock, whether by capital
reorganization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for in Sections 3.1, 3.2 and 3.3 above), then and in each such event the
Holder shall be entitled to receive upon the exercise of this Warrant the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification or
other change, to which a holder of the number of shares of Common Stock (or any shares of stock or other securities which may be) issuable upon the exercise of this Warrant would have received if this
Warrant had been exercised immediately prior to such reorganization, reclassification or other change, all subject to further adjustment as provided herein. 

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

        3.6    No Impairment.    The Company shall not avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by the Company, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant. Without
limiting the generality of the foregoing, the Company (a) shall at all times following the beginning of the Expiration Period reserve and keep available a number of its authorized shares of
Common Stock, free from all preemptive rights therein, which shall be sufficient to permit the exercise of this Warrant and (b) shall take all such action as may be necessary or appropriate in
order that all shares of Common Stock as may be issued pursuant to the exercise of this Warrant shall, upon issuance, be duly and validly issued, fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof. 

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

4

 

        5.    Investment Intent.    Unless a current registration statement under the Securities
Act of 1933, as amended, shall be in effect with respect to the securities to be issued upon exercise of this Warrant, the Holder, by accepting this Warrant, covenants and agrees that, at the time of
exercise hereof, and at the time of any proposed transfer of any securities acquired upon exercise hereof, the Holder shall deliver to the Company a written statement that the securities acquired by
the Holder upon exercise hereof are for the account of the Holder for investment and are not acquired with a view to, or for sale in connection with, any distribution thereof (or any portion thereof)
and are being acquired with no present intention (at any such time) of offering or distributing such securities (or any portion thereof). 

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

        7.    Miscellaneous.    

        7.1    Transfer of Warrant.    This Warrant shall not be transferable or assignable in
any manner and no interest shall be pledged or otherwise encumbered by Holder except in accordance with Section 3.10 of the Agreement. Subject to the foregoing sentence, this Warrant shall
inure to the benefit of, and shall be binding upon, the parties and their successors and assigns. 

        7.2    Titles and Subtitles.    The titles and subtitles used in this Warrant are for
convenience only and are not to be considered in construing or interpreting this Warrant. 

        7.3    Notices.    Any notice required or permitted under this Warrant shall be given in
writing and in accordance with Section 5.3 of the Agreement (for purposes of which, the term "Investors" shall mean Holder hereunder), except as otherwise expressly provided in this Warrant. 

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

        7.5    Amendments and Waivers.    This Warrant is issued by the Company pursuant to the
Agreement. Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or
prospectively), with the written consent of (a) the Company, (b) the holders of Warrants representing together the right to purchase at least a majority of all of the Common Stock of the
Company subject to purchase pursuant to all of the Warrants and (c) a majority in number of Investors with any Warrants outstanding; provided, however, that any amendments made to this Warrant
must be made to each of the Warrants. Any amendment or
waiver effected in accordance with this Section 7.5 shall be binding upon the Holder of this Warrant (and of any securities into which this Warrant is convertible), each future holder of all
such securities, and the Company. 

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

        7.7    Governing Law.    This Warrant shall be governed by and construed and enforced in
accordance with the laws of the State of California, without giving effect to its conflicts of laws principles. 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK] 

5

        8.    Counterparts.    This Warrant may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which shall constitute one and the same instrument. 

	Date: January     , 2002	 	DIGIRAD CORPORATION,

a Delaware corporation
	

 	
 	

By:	

 R. Scott Huennekens,

President and Chief Executive Officer
	

ACKNOWLEDGED AND AGREED:	
 	

 	

 
	

	
 	

 	

 

	

By:	
 	

	

 

[SIGNATURE PAGE TO WARRANT] 

 
 

SCHEDULE A
  
    FORM OF SUBSCRIPTION
  
    (TO BE SIGNED ONLY ON EXERCISE OF WARRANT)    

To:
DIGIRAD CORPORATION 

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

Dated:
                              

	 	 	 	 	                                        
                           

(Signature must conform in all respects to

name of the Holder as specified on the face

of the Warrant)
	

 	
 	

 	
 	

                                         
                          
	 	 	 	 	                          (Print Name)
	

 	
 	

Address:	
 	

                                         
                          
	

 	
 	

 	
 	

                                         
                          
	

 	
 	

 	
 	

                                         
                          

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

Schedule
A 

 
 

SCHEDULE B
  
    NOTICE OF CASHLESS EXERCISE    

To:
DIGIRAD CORPORATION 

        (1)   The
undersigned hereby elects to acquire in a cashless exercise                     shares of the Common Stock (as defined in the attached
Warrant) of Digirad Corporation pursuant to the terms of Section 2.5 of the attached Warrant. 

        (2)   Please
issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below: 

	 	 	 	 	                                        
                           
	

 	
 	

By:	
 	

                                         
                          
	

 	
 	

Name:	
 	

                                         
                          

Schedule
B 

 
 

SCHEDULE OF INVESTORS    

	

WARRANTHOLDER
	 	NUMBER OF INITIAL

WARRANT SHARES

	Kingsbury Capital Partners, L.P.	 	1,667
	

Kingsbury Capital Partners, L.P., III	
 	

20,000
	

Kingsbury Capital Partners, L.P., IV	
 	

46,667
	

Merrill Lynch Ventures, L.P. 2001	
 	

6,667
	

Vector Later-Stage Equity Fund II, L.P.	
 	

3,333
	

Vector Later-Stage Equity Fund II (Q.P.), L.P.	
 	

10,000
	

Kenneth E. Olson Trust	
 	

6,667
	

EndPoint Late Stage Fund, L.P.	
 	

6,667

Schedule
of Investors 

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COMMON STOCK WARRANT OF DIGIRAD CORPORATION

SCHEDULE A FORM OF SUBSCRIPTION (TO BE SIGNED ONLY ON EXERCISE OF WARRANT)

SCHEDULE B NOTICE OF CASHLESS EXERCISE

SCHEDULE OF INVESTORS

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