Document:

exv4w8

 

Exhibit 4.8

Confidential

FINAL

[Form of Warrant for Additional Closings]

CLASS A-___WARRANT AGREEMENT

     This
CLASS A-___ WARRANT AGREEMENT (this “Warrant Agreement”) is dated and entered into as of
[                    ], 2006, by and between ORTHOLOGIC CORP., a Delaware corporation (the “Company”), and
PHARMABIO DEVELOPMENT INC., a North Carolina corporation (“PharmaBio”).

     WHEREAS, the Company and PharmaBio have entered into the Common Stock and Warrant Purchase
Agreement, dated as of the date hereof (the “Purchase Agreement”);

     WHEREAS, the Company and Quintiles, Inc., an affiliate of PharmaBio, have entered into a
Master Services Agreement also dated as of the date hereof;

     WHEREAS, pursuant to the Purchase Agreement, the Company desires to grant to PharmaBio the
rights set forth in this Warrant Agreement;

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties, the parties agree as follows:

     1. The Warrant.

          (a) The Company hereby agrees to issue and sell to PharmaBio, its designee or assigns (the
“Holder”)
                     shares (the “Warrant Shares”) of the Company’s Common Stock, $.0005 par value per
share (“Common Stock”), at an exercise price of                      Dollars ($                    ) per share (the “Exercise
Price”), upon the terms and conditions herein set forth. (Such number of shares was calculated as
follows: $1,500,000, divided by the average of the closing prices of the shares of Common Stock
for the fifteen (15) trading days prior to the date of the applicable additional closing referred
to in the Purchase Agreement (the “Average Price”), multiplied by 13%. Such exercise price was
calculated as follows: the Average Price multiplied by 115%.) The Exercise Price and the number of
Warrant Shares purchasable upon exercise of this Warrant Agreement are subject to adjustment from
time to time as provided in Section 4 of this Warrant Agreement.

     2. Expiration Date. This Warrant Agreement, and the Holder’s right to purchase any of
the Warrant Shares, will expire at 5:00 p.m. Eastern Time on the tenth anniversary of the date of
this Warrant Agreement (the “Expiration Date”).

     3. Exercise of this Warrant Agreement. The Holder may exercise this Warrant
Agreement, on any Business Day, at any time from and after the date hereof and prior to the
Expiration Date, in whole or in part, as adjusted from time to time as provided in Section 4 of

 

 

this Warrant Agreement, by: (a) the surrender of this Warrant Agreement, with the Exercise Form
substantially in the form attached hereto as Annex A properly completed and executed, at the
principal office of the Company, and (b) upon payment by the delivery of a certified check,
official bank check or wire transfer of immediately available funds, payable to the order of the
Company, in an amount equal to the aggregate purchase price for the Warrant Shares being purchased
upon such exercise. Upon receipt thereof by the Company, the Holder will be deemed to be the
holder of record of the Warrant Shares issuable upon such exercise as of the close of business on
the date of such receipt by the Company, and the Company will promptly execute or cause to be
executed and delivered to the Holder, a certificate or certificates representing the aggregate
number of Warrant Shares specified in the Exercise Form. If this Warrant Agreement is exercised
only in part, the Company will, at the time of delivery of said stock certificate or certificates,
deliver to the Holder a new Warrant Agreement of like tenor evidencing the right of the Holder to
purchase the remaining Warrant Shares then covered by this Warrant Agreement. “Business Day” shall
mean any day, other than a Saturday, Sunday or legal holiday during which banks in North Carolina,
United States are open for the conduct of their banking business.

     4. Certain Adjustments. The Exercise Price at which Warrant Shares may be purchased
and the number of Warrant Shares to be purchased upon exercise of this Warrant Agreement are
subject to change or adjustment from time to time as follows:

          (a) Merger, Sale of Assets, etc. If at any time while this Warrant Agreement, or any
portion hereof, is outstanding and unexpired there shall be (i) a reorganization (other than a
combination, reclassification, exchange or subdivision of shares otherwise provided for herein),
(ii) a merger or consolidation of the Company with or into another corporation or entity in which
the Company is not the surviving entity, or a reverse triangular merger or share exchange in which
the Company is the surviving entity but the shares of the Company’s capital stock outstanding
immediately prior to the merger or share exchange are exchanged or converted by virtue of the
merger or share exchange into other property, whether in the form of securities, cash, or
otherwise, or (iii) a sale, lease, license or other transfer of all or substantially all of the
Company’s properties or assets to any other person or entity, then, as a part of such
reorganization, merger, consolidation, exchange or other transfer, lawful provision shall be made
so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant Agreement,
during the period specified herein and upon payment of the Exercise Price then in effect, the
number of shares of stock or other securities or property resulting from such reorganization,
merger, consolidation, exchange or other transfer that a holder of the shares deliverable upon
exercise of this Warrant Agreement would have been entitled to receive in such reorganization,
merger, consolidation, exchange or other transfer if this Warrant Agreement had been exercised
immediately before the record date of (or the date of, if no record date is fixed) such
reorganization, merger, consolidation, exchange or other transfer, all subject to further
adjustment as provided in this Section 4. The foregoing provisions of this Section 4(a) shall
similarly apply to successive reorganizations, mergers, consolidations, exchanges or other
transfers and to the stock or securities of any other corporation that are at the time receivable
upon the exercise of this Warrant Agreement. If the per-share consideration payable to the Holder
hereof for shares in connection with any such transaction is in a form other than cash or
marketable securities, then the value of such consideration shall be reasonably determined in good
faith by the Company’s Board of Directors. In all events, appropriate adjustment (as

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reasonably determined in good faith by the Company’s Board of Directors) shall be made in the
application of the provisions of this Warrant Agreement with respect to the rights and interests of
the Holder after any of the above-referenced transactions, to the end that the provisions of this
Warrant Agreement shall be applicable after such event, as near as reasonably may be, in relation
to any shares or other property deliverable after such event upon exercise of this Warrant
Agreement.

          (b) Reclassification, etc. If the Company, at any time while this Warrant Agreement,
or any portion hereof, remains outstanding and unexpired, by reclassification of securities or
otherwise, shall change any of the securities as to which purchase rights under this Warrant
Agreement exist into the same or a different number of securities of any other class or classes,
this Warrant Agreement shall thereafter represent the right to acquire such number and kind of
securities as the Holder would have received if this Warrant Agreement had been exercised in full
immediately prior to such reclassification or other change or immediately prior to the record date
with respect thereto and the Exercise Price therefor shall be appropriately adjusted, all subject
to further adjustment as provided in this Section 4. The foregoing provisions of this Section 4(b)
shall similarly apply to successive reclassifications or other changes.

          (c) Split, Subdivision or Combination of Shares. If the Company, at any time while
this Warrant Agreement, or any portion hereof, remains outstanding and unexpired, shall split,
subdivide or combine the securities as to which purchase rights under this Warrant Agreement exist,
into a different number of securities of the same class, the Exercise Price for such securities
shall be proportionately decreased in the case of a split or subdivision or proportionately
increased in the case of a combination. Upon each adjustment in the Exercise Price pursuant to
this subsection, the number of shares of such securities purchasable hereunder shall be adjusted,
to the nearest whole share, to the product obtained by multiplying the number of shares purchasable
immediately prior to such adjustment in the Exercise Price by a fraction, the numerator of which
shall be the Exercise Price immediately prior to such adjustment and the denominator of which shall
be the Exercise Price immediately thereafter.

          (d) Certificate as to Adjustments. Upon the occurrence of each adjustment pursuant to
this Section 4, the Company at its expense shall promptly compute such adjustment in accordance
with the terms hereof and furnish to any Holder of this Warrant Agreement a certificate signed by
its Chief Financial Officer setting forth such adjustment and showing in detail the event requiring
the adjustment, the amount of such adjustment, the method by which such adjustment was calculated,
the Exercise Price at the time in effect, and the number of shares and the amount, if any, of the
property that at the time would be received upon the exercise of this Warrant Agreement, together
with the facts upon which such adjustment is based. The Company shall, upon the written request,
at any time, of any Holder, promptly furnish or cause to be furnished to such Holder a like
certificate setting forth: (i) all such previous adjustments; (ii) the Exercise Price at the time
in effect; and (iii) the number of shares and the amount, if any, of other property that at the
time would be received upon the exercise of this Warrant Agreement.

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          (e) No Dilution or Impairment. The Company will not, by amendment of its certificate
of incorporation or through any reorganization, recapitalization, reclassification, transfer of
assets, consolidation, merger, business combination, or dissolution, avoid or seek to avoid the
intent of this Section 4 or the observance or performance of any of the terms to be observed or
performed by the Company under this Warrant Agreement, but will at all times in good faith assist
in the carrying out of all the provisions of this Section 4 and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the holder of this Warrant
Agreement against impairment.

          (f) Conformity with Warrant Agreement. In the event that at any time, as a result of
any adjustment made pursuant to this Section 4, the Holder thereafter shall become entitled to
receive any shares of capital stock of the Company other than Common Stock, thereafter the number
of such other shares so receivable upon exercise of the Warrant Agreement shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in this Section 4.

     5. Fractional Shares. Fractional shares will not be issued upon the exercise of this
Warrant Agreement, but in any case where the Holder would, except for the provisions of this
Section, be entitled under the terms of this Warrant Agreement to receive a fractional share upon
the exercise of this Warrant Agreement, the Company will, upon the exercise of this Warrant
Agreement for the largest number of whole shares then called for, pay a sum in cash equal to the
excess of the fair market value of such fractional share (determined in such reasonable manner as
may be prescribed by the Board of Directors of the Company in its discretion) over the proportional
part of the per share purchase price represented by such fractional share.

     6. Notices of Certain Events. In case:

          (a) the Company shall take a record of the holders of its Common Stock (or other stock or
securities at the time receivable upon the exercise of this Warrant Agreement) for the purpose of
entitling them to receive any dividend or other distribution, or stock subdivision or combination,
or any right to subscribe for or purchase any shares of stock of any class or any other securities,
or to receive any other right, or

          (b) of any reorganization or recapitalization of the Company, any reclassification of the
capital stock of the Company, any consolidation, merger, share exchange or other business
combination of the Company with or into another corporation or entity, or any sale, lease, license
or other transfer of all or substantially all of the assets of the Company to another corporation
or entity, or

          (c) of any voluntary dissolution, liquidation or winding-up of the Company, then, and in each
such case, the Company will cause written notice thereof to be delivered to the Holder specifying,
as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend, distribution or right
or (ii) the date on which such reorganization, recapitalization, reclassification, consolidation,
merger, share exchange, business combination, transfer, dissolution, liquidation or winding-up is
to take place, and the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such stock or securities at the time receivable

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upon the exercise of this Warrant Agreement) shall be entitled to exchange their shares of
Common Stock (or such other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, recapitalization, consolidation, merger, share exchange,
business combination, transfer, dissolution, liquidation or winding-up. Such notice shall be
delivered at least ten (10) Business Days prior to the date required to be specified therein
pursuant to this Section 6.

     7. No Rights as Stockholder; Limitation of Liability. This Warrant Agreement, as
distinct from the shares for which this Warrant Agreement is exercisable, will not entitle the
Holder to any of the rights of a stockholder of the Company. No provision of this Warrant
Agreement, prior to the exercise of this Warrant Agreement, and no mere enumeration herein of the
rights or privileges of the Holder, will give rise to any liability of the Holder for the purchase
price or as a stockholder of the Company, whether such liability is asserted by the Company or by
creditors of the Company.

     8. Miscellaneous.

          (a) Successors and Assigns. This Warrant Agreement shall be binding on and inure to
the benefit of the Holder and the Company and their respective successors and assigns.

          (b) Amendments and Waivers. This Warrant Agreement and any provision hereof may be
amended, changed, waived, discharged or terminated only by an instrument in writing signed by both
parties hereto.

          (c) Loss, Theft, Destruction or Mutilation. Upon receipt by the Company of evidence
reasonably satisfactory to it that this Warrant Agreement has been lost, stolen, destroyed or
mutilated, and in the case of any lost, stolen or destroyed Warrant Agreement, an indemnity
reasonably satisfactory to the Company, or in the case of a mutilated Warrant Agreement, upon
surrender and cancellation hereof, the Company will execute and deliver in the name of the
registered holder of this Warrant Agreement, in exchange and substitution for the Warrant Agreement
so lost, stolen, destroyed or mutilated, a new Warrant Agreement of like tenor and amount.

          (d) Warrant Exchangeable for Different Denominations. This Warrant Agreement is
exchangeable, upon the surrender hereof by the Holder at the principal office of the Company for
new Warrant Agreements of like tenor representing in the aggregate the right to purchase the number
of shares which may be purchased hereunder, each of such new Warrant Agreements to represent the
right to purchase such number of Warrant Shares as shall be designated by said Holder hereof at the
time of such surrender.

          (e) Law Governing. This Warrant Agreement will be governed by, and construed and
enforced in accordance with, the laws of the State of North Carolina, without regard to
conflicts-of-laws principles that would require the application of any other law.

          (f) Entire Agreement. This Warrant Agreement, together with the Purchase Agreement
and the other transaction documents referred to therein or contemplated thereby,

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constitutes the full and entire understanding and agreement among the parties with regard to the
subject matter of this Warrant Agreement, and supersedes all prior agreements, understandings,
inducements or conditions, express or implied, oral or written, with respect to the subject matter
of this Warrant Agreement.

          (g) Notices. Unless otherwise provided herein, all notices, requests, demands and
other communications required or permitted under this Warrant Agreement shall be in writing and
will be deemed to have been duly made and received: (i) upon personal delivery; (ii) three (3)
Business Days after deposit with the United States Post Office, by registered or certified mail or
by first class mail, postage prepaid, addressed as set forth below; or (iii) one (1) Business Day
after deposit with a nationally recognized, overnight courier (for next business day delivery),
shipping prepaid, addressed as set forth below:

	 	 	 	 	 
	 

	 	If to Company:
	 	OrthoLogic Corp.
	 

	 	 	 	1275 West Washington Street
	 

	 	 	 	Tempe, Arizona 85281
	 

	 	 	 	Attn: James M. Pusey, M.D.
	 

	 	 	 	Facsimile: (602) 470-7080
	 
	 	 	 	 
	 

	 	With a copy to	 	 
	 

	 	(which shall not	 	 
	 

	 	constitute notice):
	 	Quarles & Brady Streich Lang llp
	 

	 	 	 	One Renaissance Square
	 

	 	 	 	Two North Central Avenue
	 

	 	 	 	Phoenix, Arizona 85004
	 

	 	 	 	Attn: Steven P. Emerick
	 

	 	 	 	Facsimile: (602) 417-2980
	 
	 	 	 	 
	 

	 	If to Purchaser:
	 	PharmaBio Development Inc.
	 

	 	 	 	4709 Creekstone Drive
	 

	 	 	 	Suite 200 Riverbirch Building
	 

	 	 	 	Durham, NC 27703
	 

	 	 	 	Attn: President
	 

	 	 	 	Facsimile: (919) 998-2090
	 
	 	 	 	 
	 

	 	With a copy to	 	 
	 

	 	(which shall not	 	 
	 

	 	constitute notice):
	 	Smith, Anderson, Blount, Dorsett
	 

	 	 	 	Mitchell & Jernigan, L.L.P.
	 

	 	 	 	2500 Wachovia Capitol Center
	 

	 	 	 	Raleigh, NC 27601
	 

	 	 	 	Attn: Christopher B. Capel
	 

	 	 	 	Facsimile: (919) 821-6800

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Either party may change the address to which communications are to be sent by giving five (5)
Business Days’ advance notice of such change of address to the other party in conformity with the
provisions of this Section.

          (h) Execution; Counterparts. This Warrant Agreement and any amendment hereto may be
executed in counterparts, each of which when executed and delivered shall be deemed to be an
original and all of which counterparts taken together shall constitute but one and the same
instrument. The exchange of copies of this Warrant Agreement or amendments thereto and of
signature pages by facsimile transmission or by email transmission in portable digital format, or
similar format, shall constitute effective execution and delivery of such instrument(s) as to the
parties and may be used in lieu of the original Warrant Agreement or amendment for all purposes.
Signatures of the parties transmitted by facsimile or by email transmission in portable digital
format, or similar format, shall be deemed to be their original signatures for all purposes.

[signature page follows]

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[Signature Page to Class A-__ Warrant Agreement]

     IN WITNESS WHEREOF, the parties have caused this Warrant Agreement to be duly executed and
delivered as of the day and year first written above.

	 	 	 	 	 	 	 
	 	 	ORTHOLOGIC CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	PHARMABIO DEVELOPMENT INC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

ANNEX A

EXERCISE FORM

TO BE EXECUTED BY THE REGISTERED HOLDER

TO EXERCISE THE ATTACHED CLASS ___ WARRANT AGREEMENT OF

ORTHOLOGIC CORP.

     The
undersigned, [                                        ], pursuant to the provisions of the Class A-___ Warrant
Agreement between OrthoLogic Corp. (the “Company”) and PharmaBio Development Inc. dated as of
February [___], 2006 (the “Warrant Agreement”), hereby elects to exercise the Warrant Agreement by
agreeing to subscribe for and purchase [                                        ] shares (the “Warrant Shares”) of Common
Stock, $.0005 par value per share, of the Company, and hereby makes payment of $[                    ] by
certified or official bank check or wire transfer of immediately available funds payable to the
order of the Company in payment of the exercise price therefor.

     The undersigned acknowledges that the sale, transfer, assignment or hypothecation of the
Warrant Shares to be issued upon exercise of this Warrant Agreement is subject to the terms and
conditions of the Warrant Agreement.

	 	 	 	 	 	 	 
	 	 	PharmaBio Development Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Address: 4709 Creekstone Drive	 	 
	 

	 	 	 	Suite 200 Riverbirch Building	 	 
	 

	 	 	 	Durham, NC 27703	 	 

Dated:                                         ,exv10w1

 

Exhibit 10.1

Confidential

EXECUTION VERSION

COMMON STOCK AND WARRANT PURCHASE AGREEMENT

     THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT (this “Agreement”) is dated and
entered into as of February 24, 2006, by and between OrthoLogic Corp., a Delaware
corporation (the “Company”), and PharmaBio Development Inc., a North Carolina
corporation (the “Purchaser”).

PREAMBLE

     WHEREAS, the Company and Quintiles, Inc., an Affiliate of Purchaser, have entered into a
Master Services Agreement, dated as of the date hereof.

     WHEREAS, in connection with the foregoing, Purchaser desires to acquire and the Company is
willing to issue and sell to Purchaser shares of common stock, $.0005 par value per share, of the
Company (the “Common Stock”) and Warrants to purchase shares of Common Stock as described
herein, subject to the terms and conditions specified herein;

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties, the parties agree as follows:

ARTICLE I

DEFINITIONS

     1.01 Definitions. For purposes of this Agreement, in addition to the terms defined
elsewhere herein, the following terms shall have the meanings set forth below:

     “Additional Class A Warrants” shall have the meaning specified in Section 2.02.

     “Additional Shares” shall have the meaning specified in Section 2.02.

     “Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common control with, such
Person. For the purposes of this definition, “control” when used with respect to any Person means
the power to direct the management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the terms “controlling”
and “controlled” have meanings correlative to the foregoing.

     “Business Day” shall mean any day other than a Saturday, Sunday or legal holiday on
which banks in North Carolina and New York are open for the conduct of their banking business.

     “Class A-1 Warrant” shall have the meaning specified in Section 2.02.

     “Class A-2 Warrant” shall have the meaning specified in Section 2.02.

 

 

     “Class B Warrant” shall have the meaning specified in Section 2.01.

     “Class C Warrant” shall have the meaning specified in Section 2.01.

     “Class D Warrant” shall have the meaning specified in Section 2.01.

     “Common Stock” shall have the meaning specified in the Preamble to this Agreement.

     “Company SEC Reports” shall have the meaning specified in Section 4.05.

     “Disclosure Documents” shall have the meaning specified in Section 4.24.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as from time to time
amended, and the rules and regulations of the SEC promulgated thereunder.

     “FDA” shall mean the U.S. Food and Drug Administration.

     “FFDCA” shall mean the United States Federal Food, Drug and Cosmetic Act, as amended
from time to time, and all regulations promulgated thereunder.

     “Governmental Authority” shall mean any foreign, United States Federal, state, or
local foreign court or governmental or regulatory agency or authority.

     “Initial Class A Warrant” shall have the meaning specified in Section 2.01.

     “Initial Closing” shall have the meaning specified in Section 2.01.

     “Initial Closing Date” shall have the meaning specified in Section 2.01.

     “Initial Closing Stock Price” shall have the meaning specified in Section 2.01.

     “Initial Shares” shall have the meaning specified in Section 2.01.

     “Intellectual Property” shall have the meaning specified in Section 4.12.

     “Law” shall mean any United States Federal, or state, local or foreign law, statute,
rule, regulation, order, writ, injunction, judgment or decree of any Governmental Authority.

     “Master Services Agreement” shall mean the services agreement entered into by the
Company and Quintiles, Inc., an Affiliate of Purchaser, dated as of the date of this Agreement.

     “Material Adverse Effect” shall mean a material adverse effect on or change in the
business, operations, properties, assets, liabilities, results of operation or financial condition
of the Company.

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     “Material Agreements” shall have the meaning specified in Section 4.07.

     “Nasdaq” shall mean the Nasdaq National Market.

     “Person” shall mean any individual, partnership, corporation, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated organization,
government or agency or political subdivision thereof, or other entity.

     “Phase III Trial” shall have the meaning specified in Section 7.11.

     “Preferred Stock” shall have the meaning specified in Section 4.03.

     “Prospectus” shall mean the prospectus in the form included in the Registration
Statement, as supplemented by any prospectus supplement to the Registration Statement filed with
the SEC pursuant to Rule 424(b).

     “Registration Rights Agreement” shall have the meaning specified in Section 4.21.

     “Registration Statement” shall mean a registration statement on Form S-3 to be filed
under the Securities Act by the Company after the Initial Closing Date as required by Section 4.21,
as such Registration Statement may be amended from time to time.

     “Registrable Securities” shall have the meaning specified in Section 4.21.

     “SEC” shall mean the Securities and Exchange Commission.

     “Second Closing” shall have the meaning specified in Section 2.02.

     “Second Closing Date” shall have the meaning specified in Section 2.02.

     “Second Closing Stock Price” shall have the meaning specified in Section 2.02.

     “Securities” shall have the meaning specified in Section 4.04.

     “Securities Act” means the Securities Act of 1933, as from time to time amended, and
the rules and regulations of the SEC promulgated thereunder.

     “Shares” shall mean collectively, the Initial Shares and the Additional Shares issued
at any additional closings, if any.

     “Third Closing” shall have the meaning specified in Section 2.02.

     “Third Closing Date” shall have the meaning specified in Section 2.02.

     “Third Closing Stock Price” shall have the meaning specified in Section 2.02.

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     “Transaction Agreements” shall mean this Agreement, the Warrants, the Registration
Rights Agreement and the Master Services Agreement.

     “Transactions” shall mean the transactions contemplated by the Transaction
Agreements.

     “Warrant Shares” shall mean the shares issuable by the Company upon the exercise of
the Warrants.

     “Warrants” shall mean the Initial Class A Warrant, the Additional Class A Warrants,
the Class B Warrant, the Class C Warrant and the Class D Warrant described in Sections 2.01 and
2.02.

ARTICLE II

PURCHASE AND SALE OF THE SHARES AND THE WARRANTS

     2.01 Initial Closing.

          (a) Subject to the terms and conditions of this Agreement, on the date hereof (the
“Initial Closing Date”), the Company agrees to issue and sell to Purchaser, and Purchaser
agrees to purchase from the Company for an aggregate purchase price of Two Million Dollars
($2,000,000):

               (i) a number of shares of Common Stock (the “Initial Shares”) equal to Two Million
Dollars ($2,000,000) divided by $5.5667 (the “Initial Closing Stock Price”) (such price
being the average of the closing prices on Nasdaq of the Common Stock for the 15 trading days
prior to the Initial Closing Date), with any fractional share amount rounded to the nearest whole
share and with 0.5 shares or more rounded up;

               (ii) a warrant, with an exercise price of 115% of the Initial Closing Stock Price, in the
form attached hereto as Exhibit A to purchase a number of shares of Common Stock equal to
Two Million Dollars ($2,000,000) divided by the Initial Closing Stock Price multiplied by thirteen
percent (13%) (the “Initial Class A Warrant”), with any fractional share rounded to the
nearest whole share and with 0.5 shares a more rounded up;

               (iii) a warrant, with an exercise price of 115% of the Initial Closing Stock Price, to
purchase 80,000 shares of Common Stock, subject to certain vesting provisions, in the form
attached hereto as Exhibit B (the “Class B Warrant”);

               (iv) a warrant, with an exercise price of 115% of the Initial Closing Stock Price, to
purchase 80,000 shares of Common Stock, subject to certain vesting provisions, in the form
attached hereto as Exhibit C (the “Class C Warrant”); and

               (v) a warrant, with an exercise price of 115% of the Initial Closing Stock Price, to
purchase 80,000 shares of Common Stock, subject to certain vesting provisions, in the form
attached hereto as Exhibit D (the “Class D Warrant”).

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          (b) The purchase and sale of the Initial Shares, the Initial Class A Warrant, the Class B
Warrant, the Class C Warrant and the Class D Warrant shall take place at a closing (the
“Initial Closing”) to be held at the offices of Smith, Anderson, Blount, Dorsett, Mitchell
& Jernigan, L.L.P., 2500 Wachovia Capitol Center, Raleigh, NC 27601 at 10:00 a.m. Eastern Time on
the Initial Closing Date, or at such other location, time and date as may be mutually agreed upon
by the parties. The initial closing shall take place contemporaneously with the execution and
delivery of this Agreement and the other Transaction Agreements by the parties thereto.

          (c) At the Initial Closing, subject to the terms and conditions contained in this Agreement,
in payment of the full purchase price for the Initial Shares, the Initial Class A Warrant, the
Class B Warrant, the Class C Warrant and the Class D Warrant, Purchaser shall provide a wire
transfer of immediately available funds to the Company in an amount equal to Two Million Dollars
($2,000,000) using the wire transfer instructions separately provided to Purchaser by the Company.

          (d) Delivery of Shares and Warrants at the Initial Closing. At the Initial Closing,
the Company shall deliver the Initial Class A Warrant, the Class B Warrant, the Class C Warrant
and the Class D Warrant and, as soon as reasonably practicable after the Initial Closing Date, the
Company shall deliver a stock certificate evidencing the Initial Shares, all issued in the name of
Purchaser and dated as of the Initial Closing Date.

     2.02 Additional Closings.

          (a) Second Closing. Subject to the terms and conditions of this Agreement (including
without limitation the Blocking Events set forth in Section 2.03 below) and upon the Company’s
written notice to Purchaser of the Company’s intent to sell and issue additional shares of Common
Stock pursuant to this Agreement on June 30, 2006 (the “Second Closing Date”) as described
below, delivered not less than ten (10) Business Days prior to the Second Closing Date, the
Company agrees to issue and sell to Purchaser, and Purchaser agrees to purchase from the Company,
on the Second Closing Date, for an aggregate purchase price of One Million Five Hundred Thousand
Dollars ($1,500,000):

               (i) a number of shares of Common Stock equal to One Million Five Hundred Thousand Dollars
($1,500,000) divided by the average of the closing prices on the Nasdaq of the Common Stock for
the fifteen (15) trading days prior to the Second Closing Date (the “Second Closing Stock
Price”), with any fractional share amount rounded to the nearest whole share and with 0.5
shares or more rounded up, and

               (ii) a warrant, with an exercise price of 115% of the Second Closing Stock Price, in the form
attached hereto as Exhibit A-1 (the “Class A-1 Warrant”) to purchase a number of
shares of Common Stock equal to One Million Five Hundred Thousand Dollars ($1,500,000) divided by
the Second Closing Stock Price multiplied by thirteen percent (13%), with any fractional share
amount rounded to the nearest whole share and with 0.5 shares or more rounded up.

5

 

          (b) Third Closing. Subject to the terms and conditions of this Agreement (including
without limitation the Blocking Events set forth in Section 2.03 below) and upon the Company’s
written notice to Purchaser of the Company’s intent to sell and issue additional shares of Common
Stock pursuant to this Agreement on September 29, 2006 (the “Third Closing Date”) as
described below, delivered not less than ten (10) Business Days prior to the Third Closing Date,
the Company agrees to issue and sell to Purchaser, and Purchaser agrees to purchase from the
Company, on the Third Closing Date, for an aggregate purchase price of One Million Five Hundred
Thousand Dollars ($1,500,000):

               (i) a number of shares of Common Stock equal to One Million Five Hundred Thousand Dollars
($1,500,000) divided by the average of the closing prices on the Nasdaq of the Common Stock for
the fifteen (15) trading days prior to the Third Closing Date (the “Third Closing Stock
Price”), with any fractional share amount rounded to the nearest whole share and with 0.5
shares or more rounded up (such shares, together with the shares described in Section 2.02(a)(i),
the “Additional Shares”), and

               (ii) a warrant, with an exercise price of 115% of the Third Closing Stock Price, in the form
attached hereto as Exhibit A-1 (the “Class A-2 Warrant” and together with the
Class A-1 Warrant, the “Additional Class A Warrants”) to purchase a number of shares of
Common Stock equal to One Million Five Hundred Thousand Dollars ($1,500,000) divided by the Third
Closing Stock Price multiplied by thirteen percent (13%), with any fractional share amount rounded
to the nearest whole share and with 0.5 shares or more rounded up.

          (c) Each of the Second Closing and Third Closing described in this Section 2.02 shall take
place at a closing to be held at the offices of Smith, Anderson, Blount, Dorsett, Mitchell &
Jernigan, L.L.P., 2500 Wachovia Capitol Center, Raleigh, NC 27601 at 10:00 a.m. Eastern Time on
the Second Closing Date or Third Closing Date as applicable, or at such other location, time and
date as may be mutually agreed upon by the parties. At the Second Closing or Third Closing as the
case may be, (i) the Company shall deliver (A) the Additional Class A Warrant required to be
delivered at such closing, issued in the name of Purchaser and dated as of such closing date, and
(B) a copy of the Company’s instruction letter transmitted to its stock transfer agent directing
such transfer agent to issue to Purchaser the stock certificate for the Additional Shares required
to be delivered at such closing, issued in the name of Purchaser and dated as of such closing
date; and (ii) Purchaser shall provide a wire transfer of immediately available funds, in an
amount equal to the aggregate purchase price to be paid for the Additional Shares and Additional
Class A Warrant being purchased at such closing, to the account designated by the Company under
Section 2.01(c) or other account specified by the Company.

          (d) As soon as reasonably practicable after the Second Closing Date or Third Closing Date as
applicable, the Company shall deliver a stock certificate evidencing the Additional Shares
purchased at the Second Closing and Third Closing as the case may be, issued in the name of
Purchaser and dated as of the applicable closing date.

          (e) Any Additional Shares sold pursuant to this Section 2.02 shall be deemed “Shares”
for all purposes under this Agreement.

6

 

     2.03 Blocking Events. Purchaser shall not be obligated to purchase any Additional
Shares from the Company pursuant to this Agreement unless and until the Registration Statement
shall have been declared effective, and thereafter shall not be obligated to purchase any
Additional Shares from the Company pursuant to this Agreement when there shall have occurred any
one or more of the following events:

          (a) The withdrawal or suspension of the effectiveness of the Registration Statement;

          (b) The failure to have the number of shares of Common Stock proposed to be issued in the
relevant additional closing covered by the Registration Statement;

          (c) The failure of the Common Stock issuable under this Agreement to be validly listed on
Nasdaq;

          (d) The failure to continue to have the Common Stock registered under Sections 12(b) or 12(g)
of the Exchange Act;

          (e) The receipt of a notification that the SEC or the National Association of Securities
Dealers, Inc. is contemplating terminating the Company’s registration or listing, respectively;

          (f) The suspension of trading of the Common Stock by the SEC, Nasdaq or the National
Association of Securities Dealers, Inc.

          (g) The failure to file with the SEC any form, report or document required to be filed by it
under the Exchange Act since the date of this Agreement;

          (h) The commencement as a debtor of a voluntary bankruptcy case or proceeding; the consent to
the entry of an order for relief against it in an involuntary bankruptcy case or proceeding; the
commencement of any bankruptcy case against it; the consent to the appointment of a receiver of
the Company or for all or substantially all of its property; the general assignment for the
benefit of the Company’s creditors; the filing of a petition in bankruptcy or answer or consent
seeking reorganization or relief; or the consent to the filing of such a petition or the
appointment of or taking possession by a receiver;

          (i) The entry into a definitive agreement with respect to or the consummation of or the
occurrence of any of the following: (a) any “person” or “group” (as such terms are defined in
Section 13(d) and Section 14(d) of the Exchange Act) becomes the “beneficial owner” (as determined
in accordance with Rule 13d-3 under the Exchange Act), directly or indirectly, of shares of voting
securities of the Company representing 50% or more of the total voting power of all outstanding
voting securities of the Company; (b) the sale, lease, license, exchange or other transfer (in one
or a series of transactions) of all or substantially all of the assets of the Company, or all or
substantially all of the assets relating to TP508; or (c) any merger, consolidation, share
exchange, business combination or similar transaction in which the Company is not the surviving
entity or in which the holders of the outstanding shares of stock of the Company immediately

7

 

prior to such transaction hold, immediately after such transaction, less that 51% of the
total voting power of the outstanding securities of the surviving or resulting entity in such
transaction;

          (j) The valid termination of the Master Services Agreement arising from a default by the
Company under such Master Services Agreement;

          (k) The entry of a temporary restraining order, preliminary or permanent injunction or other
order issued by any court of competent jurisdiction or other legal or regulatory restraint or
prohibition preventing the consummation of an additional closing;

          (l) The enactment, issuance, promulgation, enforcement or entry by a governmental entity of
any statute, rule, regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which has the effect of making an issuance of Additional
Shares illegal or otherwise prohibiting consummation of the issuance of Additional Shares; or

          (m) The occurrence of an event that has a Material Adverse Effect on the Company.

The Company shall provide notice of the occurrence of any of the events described in this Section
2.03 to Purchaser promptly (and in any case within three (3) Business Days following the occurrence
of said event).

ARTICLE III

CONDITIONS TO CLOSING

     3.01 Conditions to Purchaser’s Obligations at Closing. The obligation of Purchaser
to purchase and pay for the Initial Shares, the Initial Class A Warrant, the Class B Warrant, the
Class C Warrant and the Class D Warrant at the Initial Closing is subject to each of the following
conditions precedent:

          (a) Opinion of Counsel. Quarles & Brady Streich Lang LLP, counsel to the Company,
shall have delivered a legal opinion to Purchaser, in the form acceptable to the parties,
regarding the Transaction Agreements and the Transactions;

          (b) Board Resolutions. Purchaser shall have received at the Initial Closing copies of
the resolutions of the Board of Directors of the Company authorizing the execution, delivery and
performance of the Transaction Agreements by the Company and the consummation of the Transactions,
certified by an appropriate officer of the Company;

          (c) Officer’s Certificate. Purchaser shall have received at the Initial Closing a
certificate, executed by the appropriate officer of the Company and dated as of the Initial
Closing Date, together with and certifying (i) the names of the officers of the Company authorized
to sign the Transaction Agreements together with the true signatures of such officers; (ii) a copy
of the certificate of incorporation of the Company, as amended and in effect as of the Initial
Closing Date; (iii) a copy of the bylaws of the Company, as amended and in effect as of

8

 

the Initial Closing Date; (iv) that the representations and warranties contained in Article IV
hereof are true and correct as of the Initial Closing Date; and (v) the Company has complied with
all the agreements and satisfied all the conditions herein on its part to be performed or
satisfied on or prior to the Initial Closing Date;

          (d) Good Standing Certificate. Purchasers shall have received from the Company a
Good Standing Certificate from the Delaware Secretary of State with respect to the Company.

          (e) Transaction Agreements. Purchaser shall have received the Transaction
Agreements, duly executed by an authorized officer of the Company; and

          (f) Instruction Letter. The Company shall have transmitted an instruction letter to
its stock transfer agent directing it to issue to Purchaser the stock certificate for the Initial
Shares, and Purchaser shall have received a copy of such letter.

     3.02 Conditions to Company’s Obligations at Initial Closing. The obligation of the
Company to issue and sell the Initial Shares and Warrants being purchased at the Initial Closing
is subject to each of the following conditions precedent:

          (a) Transaction Agreements. The Company shall have received the Transaction
Agreements, duly executed by an authorized officer of Purchaser or its Affiliates, as the case may
be;

          (b) Payment. Purchaser shall have delivered Two Million Dollars ($2,000,000) in
immediately available funds to Company’s specified account in accordance with Section 2.01(c); and

          (c) Officer’s Certificate. The Company shall have received at the Initial Closing a
certificate, executed by the appropriate officer of Purchaser and dated as of the Initial Closing
Date, certifying (i) the names of the officers of Purchaser authorized to sign the Transaction
Agreements on behalf of Purchaser together with the true signatures of such officers; and (ii)
that Purchaser has taken all actions necessary to authorize and approve Purchaser’s execution and
delivery of the Transaction Agreements and the consummation by Purchaser of its obligations
thereunder.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF COMPANY

     The Company represents and warrants to Purchaser and its Affiliates as follows:

     4.01 Corporate Status. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and the Company is qualified to do
business as a foreign corporation in each jurisdiction in which qualification is required, except
where failure to so qualify have not had and could not reasonably be expected to

9

 

have a Material Adverse Effect. The Company has all necessary corporate power and authority to
carry on its business as now conducted.

     4.02 Authority and Consents. The Company has all necessary corporate power and
authority to execute and deliver the Transaction Agreements and to consummate the Transactions.
The execution and delivery of the Transaction Agreements and consummation of the Transactions have
been duly authorized by all necessary corporate action on the part of the Company and no other
corporate proceedings on the part of the Company are necessary to authorize the Transaction
Agreements or to consummate the Transactions. No further approval or authority of the board of
directors or stockholders of the Company will be required for the issuance and sale of the
Securities to be sold by the Company as contemplated herein. Each of the Transaction Agreements
has been duly and validly executed and delivered by the Company and constitutes a valid, legal and
binding agreement of the Company, enforceable against the Company in accordance with its terms.
Except for (a) applicable filings, if any, with the SEC pursuant to the Exchange Act and the
Securities Act, (b) filings with Nasdaq in connection with the listing of the Shares and the
Warrant Shares, and (c) filings, if any, under state securities or “blue sky” laws, no consent
from, authorization or order of, notice to, or filing or registration with, any Governmental
Authority or any other Person is required to be obtained or made by the Company for the execution,
delivery and performance of the Transaction Agreements or the consummation of the Transactions.
Neither the execution, delivery and performance of the Transaction Agreements by the Company nor
the consummation by the Company of the Transactions will (i) conflict with or result in any breach
of any provision of the certificate of incorporation or bylaws of the Company; (ii) violate any
Law applicable to the Company or the Transactions; or (iii) result in the creation of any lien,
charge, security interest or encumbrance upon any assets of the Company pursuant to the terms or
provisions of, or will not conflict with, result in the breach or violation of, or constitute,
either by itself or upon notice or the passage of time or both, a default under any agreement,
mortgage, deed of trust, lease, franchise, license, indenture, permit or other instrument to which
the Company is a party or by which the Company or its properties may be bound, except in the case
of clauses (ii) and (iii) for such violation, lien, charge, security interest, default or
encumbrance which, individually or in the aggregate, have not had and could not reasonably be
expected to have a Material Adverse Effect.

     4.03 Authorized Capital Stock.

          (a) The authorized capital stock of the Company consists of 100,000,000 shares of Common
Stock, of which 38,994,742 shares were issued and 38,744,742 outstanding as of the close of
business on February 22, 2006 and 2,000,000 shares of preferred stock, of which no shares were
issued and outstanding as of the close of business on the date hereof (the “Preferred Stock”). As
of the date hereof, 2,555,000 shares of Common Stock were reserved for issuance and issuable or
otherwise deliverable, including in connection with the exercise of outstanding stock options or
warrants.

          (b) Except as set forth on Schedule 4.03(b), as of the Initial Closing Date, there are
no outstanding subscriptions, options, warrants, rights, calls, contracts, demands, commitments,
conversion rights or other agreements or arrangements of any character or nature whatever under
which the Company is or may be obligated (x) to issue or sell shares of its

10

 

Common Stock or Preferred Stock, or (y) to register shares of its Common Stock or Preferred
Stock. No holder of any security of the Company is entitled to any preemptive, subscription or
similar rights to purchase any securities (including the Shares or Warrants) of the Company, except
as set forth on Schedule 4.03(b).

          (c) The Company has reserved an adequate number of authorized but unissued shares of Common
Stock for issuance upon exercise of the Warrants and such shares shall remain so reserved (subject
to reduction from time to time for Common Stock issued upon the exercise of the Warrants), as long
as the Warrants are exercisable.

     4.04 Issuance, Sale and Delivery of the Securities. The Shares, the Warrants and the
Warrant Shares, when issued and paid for pursuant to the terms of this Agreement or the exercise
provisions of the Warrants, as the case may be, will be duly and validly authorized, issued and
outstanding, fully paid, nonassessable and free and clear of all pledges, liens, encumbrances and
restrictions. The issuance of the Shares, the Warrants and the Warrant Shares by the Company
pursuant to this Agreement or the Warrants (hereinafter such securities are sometimes collectively
referred to as the “Securities”) are not subject to any preemptive or other similar
rights.

     4.05 The Company SEC Reports; Financial Statements. The Company has made available
to Purchaser (i) the Company’s Annual Reports on Form 10-K for each of the fiscal years ended
December 31, 2003 and December 31, 2004; (ii) all definitive proxy statements relating to the
Company’s meetings of stockholders (whether annual or special) held since January 1, 2004; and
(iii) all other reports or registration statements filed by the Company with the SEC since January
1, 2004 (all such filings at (i) through (iii), collectively, the “Company SEC Reports”).
As of their respective filing dates, the Company SEC Reports were prepared in all material
respects in accordance with the requirements of the Securities Act or the Exchange Act, as the
case may be, applicable to the Company SEC Reports. None of such forms, reports or registration
statements contained, when filed, any untrue statement of a material fact or omitted to state a
material fact required to be stated or incorporated by reference therein or necessary in order to
make the statements therein, in light of the circumstances under which they were made, not
misleading. The consolidated financial statements of the Company included in the Company SEC
Reports complied as to form in all material respects with applicable accounting requirements and
the rules and regulations of the SEC with respect thereto when the same were filed and fairly
presented, in conformity with United States generally accepted accounting principles applied on a
consistent basis, the consolidated financial condition of the Company as of the dates thereof and
its results of operations and changes in financial condition for the periods then ended (subject,
in the case of the unaudited interim financial statements, to normal year-end adjustments). The
Company has filed with the SEC all forms, reports and documents required to be filed by it under
the Exchange Act since January 1, 2004.

     4.06 No Defaults. Except as to defaults, violations and breaches which individually
or in the aggregate have not had and could not reasonably be expected to have a Material Adverse
Effect on the Company, the Company is not in violation or default of any provision of its
certificate of incorporation or bylaws, or other organizational documents, or in breach of or
default with respect to any provision of any agreement, judgment, decree, order, mortgage, deed

11

 

of trust, lease, franchise, license, indenture, permit or other instrument to which it is a
party or by which it or any of its properties are bound; and there does not exist any state of
fact which, with notice or lapse of time or both, would constitute an event of default or default
on the part of the Company as defined in such documents, except such defaults which individually
or in the aggregate has not had and could not reasonably be expected to have a Material Adverse
Effect.

     4.07 Material Agreements. Except as included or incorporated by reference in, or
otherwise referred to in, the Company SEC Reports, the Company is not a party to or bound by any
written or oral contract, instrument, agreement, commitment, obligation, plan or arrangement, a
copy of which would be required to be filed with the SEC as an exhibit to a registration statement
on Form S-1 (collectively, “Material Agreements”) if the Company was registering securities
under the Securities Act. The Material Agreements are in full force and effect and the Company has
in all material respects performed all the obligations required to be performed by it under such
agreements, has received no notice of default and, to the best of the Company’s knowledge, neither
the Company nor any party obligated to the Company is in default under any Material Agreement, the
result of which has had and could reasonably be expected to have a Material Adverse Effect. All
Material Agreements constitute valid and binding obligations of the Company, enforceable against
the Company and, to the knowledge of the Company the other party thereto, in accordance with their
respective terms.

     4.08 No Actions. There is no pending, or to the Company’s knowledge, threatened
action, arbitration, investigation, litigation, proceedings, or suits before or involving any
Governmental Authority or arbitrator by, against or involving the Company or its properties or
business which has had or which could reasonably be expected to have a Material Adverse Effect, or
which challenges or that may have the effect of preventing, delaying or otherwise interfering with
the Transactions. The Company is not a party to or subject to the provisions of any material
injunction, judgment, decree or order of any Governmental Authority or Arbitrator.

     4.09 Absence of Undisclosed Liabilities. Except as and to the extent specifically
reflected or reserved against on the consolidated balance sheets of the Company as of September
30, 2005, included in the Company’s Quarterly Report on Form 10-Q for the nine-months ended
September 30, 2005, the Company has no material debts, liabilities or obligations of any nature,
whether accrued or unaccrued, absolute a contingent, disputed or undisputed, or otherwise, and
whether due or to become due, arising out of transactions entered into, or any state of facts
existing on or prior to the date of this Agreement, other than liabilities and obligations arising
in the ordinary course of business after September 30, 2005, which have not had and could not
reasonably be expected to have a Material Adverse Effect.

     4.10 Absence of Changes. Except as set forth on Schedule 4.10 and other than
as set forth in Section 7.11, since September 30, 2005, (a) no Material Adverse Effect has occurred
and no event has occurred or circumstance exists that could reasonably be expected to have a
Material Adverse Effect; and (b) the Company has not paid or declared any dividends or other
distributions with respect to the Common Stock and the Company is not in default in the payment of
principal or interest on any outstanding debt or other obligations.

12

 

     4.11 No Defaults. Except as to defaults, violations and breaches which individually
or in the aggregate have not had or could not reasonably be expected to have a Material Adverse
Effect, the Company is not in violation or default of any provision of its certificate of
incorporation or bylaws, or other organizational documents, or in breach of or default with respect
to any provision of any agreement, judgment, decree, order, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which it is a party or by which it or
any of its properties are bound; and there does not exist any state of fact which, with notice or
lapse of time or both, would constitute an event of default or default on the part of the Company
as defined in such documents or instruments, except such defaults which individually or in the
aggregate have not had or could not reasonably be expected to have a Material Adverse Effect on the
Company.

     4.12 Intellectual Property. To the Company’s knowledge, (a) the Company owns or has
obtained valid rights to use the inventions, patents, patent applications, trademarks (both
registered and unregistered), tradenames, copyrights, know-how, and trade secrets necessary for
the conduct of the Company’s business (as described in the Company SEC Reports) (collectively, the
“Intellectual Property”); and (b) to the Company’s knowledge: (i) there are no third
parties who have any ownership rights to any Intellectual Property that is owned by, or has been
licensed to, the Company that would preclude the Company from conducting its business (as
described in the Company SEC Reports), except for the ownership rights of the owners of the
Intellectual Property licensed or optioned by the Company; (ii) there are currently no sales of
any products that would constitute an infringement by third parties of any Intellectual Property
owned, licensed or optioned by the Company; (iii) there is no pending or threatened action, suit,
proceeding or claim by others challenging the rights of the Company in or to any Intellectual
Property owned, licensed or optioned by the Company; (iv) there is no pending or threatened
action, suit, proceeding or claim by others challenging the validity or scope of any Intellectual
Property owned, licensed or optioned by the Company; (v) there is no pending or threatened action,
suit, proceeding or claim by others that the Company infringes or otherwise violates any patent,
trademark, copyright, know-how, trade secret or any other intellectual property proprietary right
of others; (vi) none of the Intellectual Property or the use thereof by the Company infringes,
misappropriated or makes any unauthorized use of any intellectual property or proprietary right of
any third party, and no third party is infringing, misappropriating or making any unauthorized use
of the Intellectual Property; and (vii) the Company is not subject to any judgment, order, writ,
injunction or decree of any court or any Federal, state, local, foreign or other Governmental
Authority, or any arbitrator, and the Company has not entered into or is a party to any contract
which restricts or impairs the use of any such Intellectual Property.

     4.13 Compliance. Except as set forth on Schedule 4.13, the Company has been
and is in compliance in all material respects with all applicable laws, rules, regulations and
orders, in respect of the conduct of its business and the ownership of its properties, including
without limitation with respect to the FFDCA, environmental matters, employment matters, and taxes
and other governmental charges. The Company has all franchises, permits, licenses, consents and
other governmental or regulatory authorizations and approvals necessary for the conduct of its
business as now being conducted unless the failure to possess such franchises, permits, licenses,
consents and other governmental or regulatory authorizations and approvals,

13

 

individually or in the aggregate, has not had and could not reasonably be expected to have a
Material Adverse Effect.

     4.14 Insurance. The Company maintains insurance with sound and reputable insurance
companies of the types and in the amounts that the Company reasonably believes is adequate for its
business, including without limitation insurance covering all risks customarily insured against by
similarly situated companies, all of which insurance is in full force and effect.

     4.15 Certain Regulatory and Other Matters.

          (a) The Company holds all applicable approvals and authorizations from any Governmental
Authority necessary for the Company to conduct its business in the manner in which such business is
being conducted with respect to TP508, including, without limitation, the development and testing
of TP508, and all such approvals and authorizations are in good standing and in full force and
effect. The Company has not received any written notice, or to the knowledge of the Company, any
other communication, from any Governmental Authority, regarding any actual or possible revocation,
withdrawal, suspension, cancellation, termination or material modification of any such approvals or
authorizations.

          (b) The Company has not made any untrue statement of a material fact or fraudulent statement
to the FDA or any other Governmental Authority, failed to disclose a material fact required to be
disclosed to the FDA or other Governmental Authority, or committed an act, made a statement or
failed to make a statement, that provides, or could reasonably be expected to provide, a basis for
the FDA or other Governmental Authority to invoke, with respect to the Company, the FDA’s policy
respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities” set forth
in 56 Fed. Reg. 46191 (September 10, 1991) or any similar policy.

          (c) Except as set forth on Schedule 4.15(c), the Company is not and has not been: (A)
debarred by the FDA; (B) debarred, excluded, suspended, or otherwise ineligible to participate in
federal health care programs such as Medicare or Medicaid or in federal procurement and
non-procurement programs; or (C) a party to a settlement, consent or similar agreement with the FDA
or other Governmental Authority.

          (d) TP508 is being, and all times has been (as applicable), developed, tested, manufactured,
labeled, stored, distributed, promoted and marketed in compliance, in all material respects, with
all applicable Laws, including, with respect to investigational use, good clinical practices, good
laboratory practices, good manufacturing practices, record keeping, security, and filing of
reports.

          (e) TP508 has not been the subject of, or subject to (as applicable), any recall, suspension,
market withdrawal or seizure, any warning letter, other written communication asserting lack of
compliance with any applicable Laws, or any serious adverse event; and no clinical trial of TP508
has been suspended, put on hold, or terminated prior to completion as a result of any action by the
FDA or other Governmental Authority or voluntarily, based on adverse effects on human health. To
the knowledge of the Company, no event has occurred or

14

 

circumstances exist that is reasonably likely to give rise to, or serve as a basis for, any of
the foregoing events.

          (f) The Company has made available to Purchaser an accurate and complete copy of the
Investigational New Drug Application for TP508, including all supplements, amendments and reports,
and all material correspondence with the FDA with respect to TP508.

          (g) The Company has not received any adverse written notice from the FDA or any other
Governmental Authority regarding the approvability or approval of TP508.

     4.16 Taxes. The Company has filed all federal, state, local and foreign income and
other tax returns required to be filed by it and has paid or accrued all taxes shown as due
thereon, and the Company has no knowledge of a tax deficiency which has been or might be asserted
or threatened against it.

     4.17 Transfer Taxes. On the Initial Closing Date, all stock transfer or other
similar taxes which are required to be paid in connection with the sale and transfer of the
Securities to be sold to the Purchaser hereunder will be, or will have been, fully paid or
provided for by the Company and all laws imposing such taxes will be or will have been fully
complied with.

     4.18 Registration and Listing of Stock. The Common Stock is registered pursuant to
Section 12(g) of the Exchange Act and is quoted on Nasdaq, and the Company has taken no action
designed to, or likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act or de-listing the Common Stock from Nasdaq, nor has the Company received
any notification that the SEC or the National Association of Securities Dealers, Inc. is
contemplating terminating such registration or listing.

     4.19 No Manipulation of Stock. The Company has not taken any action designed to, or
that might reasonably be expected to, cause or result in stabilization or manipulation of the
price of the Common Stock to facilitate the transactions contemplated hereby or otherwise.

     4.20 Investment Company. The Company is not, and is not controlled by, an
“investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for an
investment company, within the meaning of the Investment Company Act of 1940, as amended.

     4.21 Securities Matters.

          (a) The Company has complied in all material respects with all applicable Laws, including
securities laws, in connection with the offer, issuance and sale of the Securities hereunder.

          (b) Pursuant to the terms of a registration rights agreement in the form attached hereto as
Exhibit E (the “Registration Rights Agreement”), the Company will file a
Registration Statement with the SEC covering the resale of the Shares and the Warrant Shares,
together with any securities issued or issuable upon any stock split, dividend or other

15

 

distribution, recapitalization or similar event with respect to the Warrant Shares (the
“Registrable Securities”), and covenants that, prior to the sale of any Additional Shares
and any Additional Class A Warrants, the Registration Statement will have been declared effective
by the SEC and no stop order suspending the effectiveness of the Registration Statement will have
been issued.

          (c) Indemnification and Contribution.

               (i) To the extent permitted by applicable law, the Company will indemnify and hold harmless
each seller of Registrable Securities that were registered pursuant to the Registration Statement,
each underwriter of such Registrable Securities thereunder, and each other person, if any, who
controls such seller or underwriter within the meaning of Section 5 of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, to which such seller, underwriter or
controlling person may become subject under the Securities Act or other applicable Federal or State
securities or “blue sky” laws, to the extent that such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement under which such Registrable
Securities were registered under the Securities Act, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each such seller, each
such underwriter and each such controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable to any
such indemnitee if, and to the extent that, any such loss, claim, damage or liability arises out
of, or is based upon, an: (i) untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by or on behalf of such indemnitee in
writing specifically for use in such registration statement or prospectus; or (ii) such untrue
statement or alleged untrue statement or omission or alleged omission was contained in a
preliminary or earlier effective prospectus and corrected in a final or amended prospectus, and
such holder of Registrable Securities failed to deliver a copy of the final or amended prospectus
at or prior to the confirmation of the sale of the Registrable Securities to the buyer of such
Registrable Securities; provided, further, that the indemnity agreement contained
in this Section 4.21 shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the Company, which
consent shall not be unreasonably withheld, provided, that such consent shall not be
required if the settlement shall include, as an unconditional term thereof, the giving, by the
claimant or plaintiff, to such indemnified party, of a release of the Company from all liability in
respect of such claim or litigation.

               (ii) To the extent permitted by applicable law, each seller of Registrable Securities that
were registered pursuant to the Registration Statement, severally and not jointly, will indemnify
and hold harmless the Company, each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, each officer of the Company who signs the Registration Statement,
each director of the Company, each underwriter and each person who controls any underwriter within
the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or
several, to which the Company or such officer, director,

16

 

underwriter or controlling person may become subject under the Securities Act or other
applicable Federal or State securities or “blue sky” laws, to the extent that such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of, or are based upon, any untrue
statement or alleged untrue statement of any material fact contained in the Registration Statement
under which such Registrable Securities were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise
out of, or are based upon, the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading, and will
reimburse the Company and each such officer, director, underwriter and controlling person for any
legal or other expenses reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that such
seller will be liable hereunder in any such case if, and only to the extent that, any such loss,
claim, damage or liability arises out of, or is based upon, an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in conformity with information
pertaining to such seller, as such, furnished in writing to the Company by, or on behalf of, such
seller specifically for use in such registration statement or prospectus, and provided,
further, that the indemnity agreement contained in this Section 4.21 shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement
is effected without the consent of such seller, which consent shall not be unreasonably withheld,
provided, that such consent shall not be required if the settlement shall include, as an
unconditional term thereof, the giving, by the claimant or plaintiff, to such indemnified party of
a release of such seller from all liability in respect of such claim or litigation;
provided, further, that the liability of each seller hereunder shall be limited to
the net proceeds received for the account of such seller from the sale of Registrable Securities
covered by such registration statement.

               (iii) Promptly after receipt by an indemnified party hereunder of notice of the commencement
of any action, such indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the
omission so to notify the indemnifying party shall not relieve it from any liability which it may
have to such indemnified party other than under this Section 4.21 and shall only relieve it from
any liability which it may have to such indemnified party under this Section 4.21 if, and to the
extent that, the indemnifying party is prejudiced by such omission. In case any such action shall
be brought against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent
it shall wish, to assume and undertake the defense thereof, with counsel reasonably satisfactory to
such indemnified party, and, after notice from the indemnifying party to such indemnified party of
its election so to assume and undertake the defense thereof, the indemnifying party shall not be
liable to such indemnified party under this Section 4.21 for any legal expenses subsequently
incurred by such indemnified party in connection with the defense thereof, other than reasonable
costs of investigation and of liaison with counsel so selected, provided, however,
that, if the defendants in any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those available to the
indemnifying party, or if the interests of the indemnified party reasonably may be deemed to
conflict with the interests of the indemnifying party, the indemnified party shall have the right
to select a separate counsel and to assume such legal defenses and otherwise to participate in the

17

 

defense of such action, with the reasonable expenses and fees of such separate counsel and
other expenses related to such participation to be reimbursed by the indemnifying party as
incurred; provided, further, that the Company shall not have any reimbursement
obligation for the expenses and fees of more than one such separate counsel for all indemnitees.

               (iv) In order to provide for just and equitable contribution to joint liability under the
Securities Act in any case in which either (1) any holder of Registrable Securities, or any
controlling person of any such holder, makes a claim for indemnification pursuant to this Section
4.21 but it is judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the last right of
appeal) that such indemnification may not be enforced in such case notwithstanding the fact that
this Section 4.21 provides for indemnification in such case, or (2) contribution under the
Securities Act may be required on the part of any such selling holder or any such controlling
person in circumstances for which indemnification is provided under this Section 4.21; then, and in
each such case, the Company and such holder will contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject (after contribution from others) in such
proportion as is appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other, as well as any other relevant equitable
considerations. The relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission to state
a material fact relates to information supplied by the indemnifying party or by the indemnified
party and the parties’ relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission; provided, however, that, in any such case,
(A) no such holder will be required to contribute any amount in excess of the public offering price
of all such Registrable Securities offered by it pursuant to such registration statement; and (B)
no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) will be entitled to contribution from any person or entity who was not guilty
of such fraudulent misrepresentation.

     4.22 Rule 144 Reporting. With a view to making available the benefits of certain
rules and regulations of the SEC that may permit the sale of securities to the public without
registration, the Company agrees to use its best efforts to make and keep public information
regarding the Company available as contemplated by Rule 144 under the Securities Act and file with
the SEC all reports and other documents required to be filed by the Company under the Securities
Act and the Exchange Act, and furnish a written report to Purchaser, upon written request, as to
the Company’s compliance with the reporting requirements of Rule 144 and of the Securities Act and
the Exchange Act.

     4.23 Employees. As of the date hereof, the Company has no collective bargaining
arrangements or agreements covering any of its employees. As of the date hereof, since September
30, 2005, no officer, consultant or key employee of the Company whose termination, either
individually or in the aggregate, has had and could reasonably be expected to have a Material
Adverse Effect, has terminated or, to the knowledge of the Company, has any present intention of
terminating his or her employment or engagement with the Company.

18

 

     4.24 Disclosure. The information contained or incorporated in this Agreement and any
disclosure schedule delivered by the Company to the Purchaser simultaneously with the execution of
this Agreement (the “Disclosure Documents”) is true and correct in all material respects,
as of the date hereof or thereof, as the case may be; and the Disclosure Documents do not contain
an untrue statement of a material fact, or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they
are made, not misleading.

     4.25 No Solicitation. The Company has not, in the past nor will it hereafter, take
any action to sell, offer for sale or solicit offers to buy any securities of the Company which
would bring the offer, issuance or sale of the Securities, as contemplated by this Agreement,
within the provisions of Section 5 of the Securities Act, unless such offer, issuance or sale was
or shall be within the exemptions of Section 4 (or other appropriate exemption) of the Securities
Act.

     4.26 No Integration. Neither the Company, nor any of its Affiliates, nor any person
acting on the Company’s behalf has, directly or indirectly, at any time within the past six (6)
months, made any offer or sale of any security or solicitation of any offer to buy any security
under circumstances that would eliminate the availability of the exemption from registration under
Regulation D under the Securities Act in connection with the offer and sale of the Securities as
contemplated hereby.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF PURCHASER

     Purchaser represents and warrants to the Company as follows:

     5.01 Corporate Status. Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of North Carolina.

     5.02 Authority and Consents. Purchaser has all necessary corporate power and
authority to execute and deliver the Transaction Agreements and to consummate the Transactions.
The execution and delivery of the Transaction Agreements and consummation of the Transactions have
been duly authorized by all necessary corporate action on the part of Purchaser and no other
corporate proceedings on the part of Purchaser are necessary to authorize the Transaction
Agreements or to consummate the Transactions.

     5.03 Investment. Purchaser is acquiring the Securities for Purchaser’s own account,
and not with a view to, or for resale in connection with, any distribution or public offering
thereof within the meaning of the Securities Act. Purchaser acknowledges receiving and reviewing
the Company SEC Reports. Purchaser is aware of the Company’s business affairs and financial
condition and has been afforded: (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Company concerning the business
affairs and financial condition of the Company; and (ii) the opportunity to request such
additional information which the Company possesses or can acquire without unreasonable effort or
expense and has had access to and has acquired sufficient information about the

19

 

Company to reach an informed and knowledgeable decision to acquire the Securities to be
purchased hereunder. Purchaser, either by reason of its own business or financial experience or
the business or financial experience of its professional advisors (who are unaffiliated with and
who are not compensated by the Company or any affiliate, finder or selling agent of the Company,
directly or indirectly), has such business and financial experience as is required to give it the
capacity to utilize the information received, to evaluate the risks involved in purchasing such
securities, to make an informed decision about purchasing the Securities and to protect its own
interests in connection with the purchase of the Securities and is able to bear the risks of an
investment in the Securities. Purchaser is able to bear the economic risk of holding the
Securities for an indefinite period of time and can afford a complete loss of its investment.
Purchaser is not itself a “broker” or a “dealer” as defined in the Exchange Act and is not an
“affiliate” of the Company as defined in Rule 405 promulgated under the Securities Act.

     5.04 Accredited Investor. Purchaser is an “accredited investor” within the meaning of
Rule 501 of Regulation D promulgated under the Securities Act.

ARTICLE VI

COVENANTS; INDEMNIFICATION

     6.01 Notice of Issuance. The Company shall notify Purchaser and its Affiliates,
concurrently with public disclosure of the same, of any plan approved by the Company’s Board of
Directors to issue or sell any shares of Common Stock.

     6.02 Securities Compliance. The Company shall notify the SEC and Nasdaq in
accordance with their rules and regulations, of the transactions contemplated by this Agreement,
and shall take all other necessary action and proceedings as may be required by applicable Law for
the legal and valid issuance of the Securities to Purchaser.

     6.03 Indemnification. The Company covenants and agrees to indemnify and hold harmless
Purchaser and its respective officers, directors, employees, stockholders, assigns, successors and
Affiliates for, and will pay to Purchaser the amount of, any loss, liability, claim, damage (but
excluding special, incidental and consequential damages), expense (including costs of investigation
and defense and reasonable attorney fees) whether or not involving a third-party claim, arising
from any material breach of any representation or warranty made by the Company in this Agreement.

ARTICLE VII

MISCELLANEOUS

     7.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement, nor
consent to any departure by the Company therefrom, shall, in any event, be effective unless the
same shall be in writing and signed by Purchaser, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given.

20

 

     7.02 Notices. All notices and other communications provided for hereunder shall be
in writing, shall specifically refer to this Agreement, shall be addressed to the receiving
party’s address set forth below or to such other address as a party may designate by notice
hereunder, and shall be deemed to have been sufficiently given for all purposes if: (a) mailed by
first class certified or registered mail, postage prepaid, (b) sent by nationally recognized
overnight courier for next Business Day delivery, (c) personally delivered, or (d) made by
telecopy or facsimile transmission with confirmed receipt.

			
	     If to the Company:	 	OrthoLogic Corp.

Attn: James M. Pusey, M.D.

1275 West Washington Street

Tempe, Arizona 85281

Phone: (602) 286-5520

Fax: (602) 470-7080

Email: jpusey@olgc.com

			
	     With a copy to

     (which shall not 

     constitute notice):	 	

Quarles & Brady Streich Lang llp

Attn: Steven P. Emerick

Two North Central Avenue

Phoenix, Arizona 85004

Phone: (602) 230-5517

Fax: (602) 417-2980

Email: emerick@quarles.com

			
	     If to Purchaser:     	 	PharmaBio Development Inc.

4709 Creekstone Drive

Suite 200 Riverbirch Building

Durham, NC 27703

Attn: General Counsel

Phone: (919) 998-2418

Fax: (919) 998-2090

Email: john.russell@quintiles.com

			
	     With a copy to

     (which shall not

     constitute notice):	 	

 Smith, Anderson, Blount, Dorsett

Mitchell & Jernigan, L.L.P.

2500 Wachovia Capitol Center

Raleigh, NC 27601

Attn: Christopher B. Capel
		 	Phone: (919) 821-6759

Fax: (919) 821-6800

Email: ccapel@smithlaw.com

21

 

     7.03 No Waiver; Remedies. No failure on the part of Purchaser to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

     7.04 Attorneys’ Fees. In the event that any dispute among the parties to this
Agreement relating to this Agreement, the Warrants or the Registration Rights Agreement should
result in litigation, the prevailing party in such dispute shall be entitled to recover from the
losing party all fees, costs and expenses enforcing any right of such prevailing party under or
with respect to this Agreement, the Warrants or the Registration Rights Agreement as the case may
be, including without limitation, such reasonable fees and expenses of attorneys and accountants,
which shall include, without limitation, all fees, costs and expense of appeals.

     7.05 Binding Effect; Assignment. This Agreement shall be binding upon and inure to
the benefit of the Company and Purchaser and their respective successors and assigns,
provided, that neither the Company nor Purchaser may assign or transfer any or all of its
rights or obligations under this Agreement without the prior written consent of the other party
and any attempted assignment without such consent shall be null and void; provided,
however, that Purchaser may at any time assign or transfer any of its rights or
obligations under this Agreement to any Affiliate.

     7.06 Severability. To the extent any provision of this Agreement is prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Agreement.

     7.07 Entire Agreement. This Agreement and the other Transaction Agreements embody
the entire agreement and understanding between the parties hereto with respect to the subject
matter thereof and supersede all prior oral or written agreements and understandings relating to
the subject matter thereof. No statement, representation, warranty, covenant or agreement of any
kind not expressly set forth in the Transaction Agreements shall affect, or be used to interpret,
change or restrict, the express terms and provisions of the Transaction Agreements.

     7.08 Further Action. Each party shall, without further consideration, take such
further action and execute and deliver such further documents as may be reasonably requested by
the other party in order to carry out the provisions and purposes of this Agreement.

     7.09 Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original and all of which, when taken together, shall constitute

22

 

one and the same instrument. This Agreement may be executed and delivered by telecopy or
facsimile transmission and any execution by such means shall be deemed an original

     7.10 Survival. The representations, warranties, covenants and agreements made herein
by the Company and Purchaser shall survive the Initial Closing and expire on the first anniversary
of the Initial Closing Date.

     7.11 Phase III Trial Data. The parties hereby acknowledge that the Company has
represented to the Purchaser that: (i) enrollment is complete in the Company’s Phase III trial in
patients with unstable and/or displaced distal radius fractures (the “Phase III Trial”),
(ii) the data relating to the Phase III Trial is currently being processed; and (iii) as of the
date of this Agreement, the Company has no access to such data or any other non-public information
relating to the results of such Phase III Trial. The parties further acknowledge that the Company
has advised the Purchaser that, subsequent to the execution of this Agreement, the Company will,
at a date in the future, have access to the data from the Phase III Trial for processing, analysis
and evaluation and that, once disclosed to the public in due course, the results of such data
processing, analysis and evaluation will have a material effect on the price of the Company’s
Common Stock. The Purchaser, by approval and execution of this Agreement, hereby agrees: (i) to
assume the risk of investment in the Company’s Common Stock in light of the future events
described in this Section 7.11 and the effect such events will have on the price of the Shares
received pursuant to this Agreement and/or the business prospects of the Company; and (ii) any
such effect on the price of the Shares and/or the business prospects of the Company will not be
deemed to be a Material Adverse Effect under this Agreement.

     7.12 Publicity. Except as otherwise required by applicable Law or by obligations
pursuant to any listing agreement with or rules of any securities exchange or automated quotation
system, each party shall, and shall cause its respective Affiliates to, not issue any press
release or make any other public statement relating to the other party, connected with or arising
out of this Agreement or the matters contained herein, without the other parties’ prior written
approval of the contents and the manner of presentation and publication thereof (which approval
shall not be unreasonably withheld or delayed).

     7.13 Governing Law. This Agreement, including, without limitation, the
interpretation, performance, enforcement, breach or termination thereof and any remedies relating
thereto, shall be governed by and construed in accordance with the laws of the State of North
Carolina, United States of America, as applied to agreements executed and performed entirely in
the State of North Carolina, without regard to conflicts of law rules.

[signature page follows]

23

 

     [Signature Page to Common Stock and Warrant Purchase Agreement]

     IN WITNESS WHEREOF, the Company and the Purchaser have caused this Common Stock and
Warrant Purchase Agreement to be duly executed by their duly authorized representatives
effective as of the date first above written.

	 	 	 	 	 	 	 
	 	 	OrthoLogic Corp.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Les M. Taeger	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Les M. Taeger	 	 
	 

	 	 	 	Title: Sr. VP, CFO	 	 
	 
	 	 	 	 	 	 
	 	 	PharmaBio Development Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Patrick B. Jordan	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Patrick B. Jordan	 	 
	 	 	 	 	Title: Vice President, Corporate Development

EXHIBIT A

Form of Class A Warrant

 

 

EXHIBIT A-1

Form of Additional Class A Warrant

2

 

EXHIBIT B

Form of Class B Warrant

3

 

EXHIBIT C

Form of Class C Warrant

4

 

EXHIBIT D

Form of Class D Warrant

5

 

EXHIBIT E

Form of Registration Rights Agreement

6

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