Document:

exv10w2

 

Exhibit 10.2

INTELLECTUAL PROPERTY, CONFIDENTIALITY

AND NON-COMPETITION AGREEMENT

(EMPLOYEES)

     This Agreement made as of the 10th day of January, 2006, will be
effective as of the 16th day of January, 2006, between
OrthoLogic, Corp., a Delaware corporation with its principal place of business in Arizona (the
“Company”) and Les M. Taeger, an employee of the Company (the “Employee”).

RECITALS

     A. The Employee is engaged by the Company, or is about to be engaged by the Company, as an
employee (the “Engagement”).

     B. The Employee has been, or will be, given access by the Company to confidential and
proprietary information of the Company.

     C. The Company has retained the Employee pursuant to the terms of the Engagement. If Employee
is already employed, the Company is offering the Employee new employment benefits and/or other
consideration in exchange for the Employee’s promise to abide by the terms of this Agreement.

     D. During the term of the Engagement, Employee may, in the course of providing services under
the Engagement, create or develop Inventions and/or Creations for the Company, as defined herein,
that are intended to be owned exclusively by the Company, and the parties understand that Company
shall exclusively own all Inventions and Creations.

AGREEMENTS

     IN CONSIDERATION of the foregoing and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Employee and the Company agree as follows:

     1. Nondisclosure of Proprietary Information. The Company invents, develops,
manufactures and markets processes and products that involve experimental or inventive work. The
Company’s success depends upon the protection of these processes and products by patent, by
copyright, or by secrecy. The Employee has had, or may have, access
to the Company’s Proprietary
Information, as defined in this Section 1. Access to this Proprietary Information is given to the
Employee only if the Employee agrees to keep that information secret as follows:

     (a) “Proprietary Information” is all information, in whatever form, tangible or intangible,
pertaining in any manner to the business of the Company, or any of its agents or employees, which
was produced by any employee, consultant, or other independent employee of the Company including:
(i) any and all methods, inventions, improvements, information, data or discoveries, whether or not
patentable, that are secret, proprietary, confidential or generally undisclosed, (including
information originated or provided by the Employee) in any area of knowledge, including information
concerning trade secrets, processes, software, products, patents, patent applications, inventions,
formulae, apparatus, techniques, technical data, clinical

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data, clinical trials, improvements, specifications, servicing, attributes and relative
attributes relating to any of the Company’s equipment, devices, processes, or products, or research
and development thereof; and (ii) the identities of the Company’s customers and potential customers
(“Customers”) including Customers the Employee successfully cultivates or maintains during this
Engagement using the Company’s products, name or infrastructure and the identities of contact
persons at Customers including the preferences, likes, dislikes and technical and other
requirements of Customers and contact persons with respect to product types, pricing, sales calls,
timing, sales terms, rental terms, lease terms, service plans, and other marketing terms and
techniques; (iii) the Company’s business methods, practices, strategies, forecasts, know-how,
pricing, and marketing plans and techniques; (iv) the identity of key accounts, the identity of
potential key accounts; and (v) the identities of the Company’s key employees. Proprietary
Information shall not include information which (i) is known to Employee on a non-confidential
basis prior to the Engagement with the Company; (ii) is or hereafter becomes known to the general
public without breach or fault on the part of Employee; or (iii) is required to be disclosed in a
judicial proceeding (including a proceeding to enforce this Agreement), or is otherwise required to
be disclosed by law.

     (b) The Employee acknowledges that the Company has exclusive property rights to all
Proprietary Information and the Employee hereby assigns any and all rights Employee might otherwise
possess in any Proprietary Information to the Company. Except as required in the performance of
the duties of this Engagement with the Company, the Employee will not at any time during or after
the term of this Engagement, without the prior written consent of the Company, directly or
indirectly use, communicate, disclose, disseminate, lecture upon, publish articles or otherwise put
in the public domain, any Proprietary Information or any other information of a secret,
proprietary, confidential or general undisclosed nature relating to the Company, its products,
Customers, processes or services, including information relating to testing, research, development,
manufacturing, marketing or selling.

     (c) All documents, records, notebooks, notes, memoranda, data bases, and similar repositories
containing Proprietary Information made or compiled by the Employee at any time, including any and
all copies thereof, are and shall be the property of the Company, shall be held by Employee in
trust solely for the benefit of the Company, and shall be delivered to the Company by Employee on
the termination of this Engagement or at any other time upon the request of the Company.

     (d) The Employee agrees to certify in writing at or before final termination of the Engagement
that the Employee no longer has in the Employee’s possession, custody or control, any copies of any
business documents generated at or relating to the Company nor any Proprietary Information, whether
in hard copy, on a computer’s hard drive, on disks or in any other form or media.

     (e) All information regarding the Company’s business disclosed to, learned by or developed by
the Employee during the course of the Engagement shall be presumed to be Proprietary Information.

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     (f) The Employee agrees to provide notification, at the start of any new engagement or
employment, to all subsequent employers or contracting parties who are involved in any way in the
medical products or services industry or are otherwise competitors of the Company, of the terms and
conditions of this Agreement, along with a copy of this Agreement.

     2. Inventions.

     (a) “Inventions” shall include discoveries, concepts, and ideas, whether patentable or not,
including improvements, know-how, data, processes, methods, formulae, and techniques, concerning
any past, present or prospective Company activities that the Employee makes, discovers or conceives
(whether or not during the hours of this Engagement or with the use of the Company’s facilities,
materials or personnel), either solely or jointly with others during this Engagement by the Company
and, if based on or related to Proprietary Information, at any time after termination of such
Engagement. All Inventions shall be solely the property of the Company and the Employee agrees to
perform the requirements of this Section with respect thereto without the payment by the Company of
any royalty or any consideration other than as provided in this Agreement.

     (b) The Employee shall maintain written notebooks in which Employee shall set forth on a
current basis information as to all Inventions describing in detail the procedures employed and the
results achieved as well as information as to any studies or research projects undertaken on the
Company’s behalf, whether or not in the Employee’s opinion a given project has resulted in an
Invention. The written notebooks shall at all times be the property of the Company and shall be
surrendered to the Company upon termination of this Engagement or upon request of the Company.

     (c) The Employee shall apply, at the Company’s request and expense, for United States and
foreign letters patent either in the Employee’s name or otherwise as the Company shall desire.

     (d) The Employee hereby assigns to the Company all of Employee’s rights to Inventions,
applications for United States Patent and/or foreign letters patent and to United States and/or
foreign letters patent granted upon Inventions, including without limitation, all renewals,
reissues, extensions, continuations, divisions or continuations-in-part thereof.

     (e) The Employee shall acknowledge and deliver promptly to the Company without charge to the
Company but at its expense such written instruments (including applications and assignments) and do
such other acts, such as giving testimony in support of the Employee’s inventorship, as may be
necessary in the opinion of the Company to obtain, maintain, extend, reissue and enforce United
States and/or foreign letters patent relating to the Inventions and to vest the entire right and
title thereto in the Company or its nominee.

     (f) The Employee’s obligation to assist the Company in obtaining and enforcing patents for
Inventions in any and all countries shall continue beyond the Engagement, but the Company shall
compensate the Employee at a reasonable rate for time actually spent at the Company’s request on
such assistance. If the Company is unable for any reason whatsoever

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to secure the Employee’s signature to any lawful and necessary document required to apply for
or execute any patent application with respect to any Inventions, including renewals, reissues,
extensions, continuations, divisions or continuations-in-part thereof, the Employee hereby
irrevocably designates and appoints the Company and its duly authorized officers and agents, as
agents and attorneys-in-fact to act for and in Employee’s behalf and instead of the Employee, to
execute and file any application and to do all other lawful permitted acts to further the
prosecution and issuance of patents with the same legal force and effect as if executed by the
Employee.

     (g) As a matter of record the Employee has identified on Exhibit A, attached hereto, all
inventions or improvements relevant to the activity of the Company which have been made or
conceived or first reduced to practice by the Employee alone or jointly with others prior to
Engagement by the Company, that Employee desires to remove from the operation of this Section 2;
and the Employee covenants that such list is complete. If there is no such list or if no Exhibit A
is attached, the Employee represents that no such inventions and improvements have been made at the
time of signing this Agreement.

     (h) The Employee will not assert any rights under any inventions, discoveries, concepts or
ideas, or improvements thereof, or know-how related thereto, as having been made or acquired prior
to engagement by the Company or during the term of Engagement if based on or otherwise related to
Proprietary Information.

     (i) No provisions of this Section shall be deemed to limit the restrictions applicable to the
Employee under Section 1.

     3. Creations.

     (a) “Creations” shall include, without limitation, all designs, logos, slogans, improvements,
plans, developments, marks, names, symbols, phrases, graphics, advertising, images, art work,
processes, business methods, trade secrets, any and all copyrightable expression, all copyrightable
works, and all patentable subject matter, in all media (whether existing now or to be invented),
whether or not protected by statute, including all derivative works.

     (b) Creations, whether conceived, created, made, developed, or acquired by or for Employee as
a result of the work performed during the Engagement shall be deemed “work made for hire” under the
United States Copyright laws, Title 17 of the United States Code, and Company will be deemed the
author of the Work Product.

     (c) Employee hereby assigns to Company its entire right, title, and interest, if any, in and
to any and all Creations, including without limitation all copyright rights, patent rights, trade
secrets, trademark rights and associated goodwill, along with all rights to derivative works and
the right to apply for and obtain any applicable registrations and all other available legal
protections for the Creations.

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     (d) The Employee shall acknowledge and deliver promptly to the Company without charge to the
Company but at its expense such written instruments (including applications and assignments) and do
such other acts, such as giving testimony in support of the Employee’s creation, as may be
necessary in the opinion of the Company to obtain, maintain, extend, reissue and enforce any
applicable registrations relating to the Creations and to vest the entire right and title thereto
in the Company or its nominee.

     4. Shop Rights. The Company shall also have the royalty-free right to use in its
business, and to make, use and sell products, processes and/or services derived from any
inventions, discoveries, concepts and ideas, whether or not patentable, including processes,
methods, formulas and techniques, as well as improvements thereof or know-how related thereto,
which are not within the scope of Inventions as defined in Section 2 but which are conceived or
made by the Employee during the period Employee is engaged by the Company or with the use or
assistance of the Company’s facilities, materials or personnel.

     5. Non-solicitation of Customers or Employees of Company.

     (a) During the Customer Non-Solicitation Term (as hereinafter defined), Employee agrees not to
solicit or call on, either for Employee or on behalf of any third party or entity, any Customer,
with or for whom Employee had any contact or notice of during the Engagement unless the products or
service represented do not compete with any of the products or services sold by the Company.

     (b) During the Employee Non-Solicitation Term (as hereinafter defined), the Employee will not
solicit any of the Company’s employees for a competing business or otherwise induce or attempt to
induce such employees to terminate their employment with the Company.

     (c) “Customer Non-Solicitation Term” shall refer to a period of one year after the termination
of the Engagement unless a court of competent jurisdiction finds such definition unenforceable, in
which case the “Customer Non-Solicitation Term” shall refer to a period of six months after the
termination of the Engagement, unless a court of competent jurisdiction finds such definition to be
unenforceable, in which case “Customer Non-Solicitation Term” shall refer to a period of three
months after the termination of the Engagement.

     (d) “Employee Non-Solicitation Term” shall refer to a period of one year after the termination
of the Engagement unless a court of competent jurisdiction finds such definition unenforceable, in
which case the “Employee Non-Solicitation Term” shall refer to a period of six months after the
termination of the Engagement, unless a court of competent jurisdiction finds such definition to be
unenforceable, in which case “Employee Non-Solicitation Term” shall refer to a period of three
months after the termination of the Engagement.

     6. Exclusive Engagement. During the period of this Engagement by the Company, the
Employee shall not, without the Company’s express written consent, engage in any employment,
consulting activity or business other than for the Company. Activity as a passive investor in or
outside director for another business enterprise shall not be considered a violation of this
Section for so long as such business enterprise is not competing or conducting business

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with the
Company and so long as such activities do not adversely impact
Employee’s performance
of job duties.

     7. Non-Compete. The parties acknowledge that the Employee has acquired or will
acquire much knowledge and information concerning the Company’s business and Customers as the
result of the Employee’s Engagement. The parties further acknowledge that the scope of business in
which the Company is engaged is nationwide and very competitive, that such business is one in which
few companies can compete successfully, and that competition by the Employee in that business would
injure the Company severely. Accordingly, Employee agrees that during this Engagement and through
the Non-Compete Term (as hereinafter defined), Employee will not take any of the following actions
with respect to any customer that Employee worked with during the engagement:

     (a) Directly or indirectly, sell or attempt to sell products for or on behalf of any business
that manufactures, assembles, distributes, offers or sells any products that compete with products
manufactured, assembled, distributed, offered or sold by the Company;

     (b) Persuade or attempt to persuade any Customer or client to which the Company has made a
proposal or sale, or with which the Company has been having discussions, not to transact business
with the Company, or instead to transact business with another person or organization;

     (c) Solicit the business of any company that has been a Customer or client of the Company at
any time during the Employee’s Engagement by the Company, provided, however, if the Employee
becomes employed by or represents a business that exclusively sells products that do not compete
with products then marketed or intended to be marketed by the Company, such contact shall be
permissible; or

     (d) Work directly or indirectly in any position that could result in the disclosure of
Proprietary Information.

     “Non-Compete Term” shall mean a period of one year following the termination of the Engagement
unless a court of competent jurisdiction finds such definition to be unenforceable, in which case
“Non-Compete Term” shall mean a period of six months following the termination of the Engagement,
unless a court of competent jurisdiction finds such definition to be unenforceable, in which case
“Non-Compete Term” shall mean a period of three months following the termination of the Engagement.

     8. Compliance with Law and Amendment by Court. If there is any conflict between any
provision of this Agreement and any statute, law, regulation or judicial precedent, the latter
shall prevail, but the provisions of this Agreement thus affected shall be curtailed and limited
only to the extent necessary to bring them within the requirements of the law. If any part of this
Agreement shall be held by a court of proper jurisdiction to be indefinite, invalid or otherwise
unenforceable, the entire Agreement shall not fail on account thereof, but: (i) the balance of the
Agreement shall continue in full force and effect unless such construction would clearly be
contrary to the intention of the parties or would result in an unconscionable injustice; and (ii)
the

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court shall amend the Agreement to the extent necessary to make the Agreement valid and
enforceable.

     9. Freedom From Engagement Restrictions. The Employee represents and warrants that
the Employee has not entered into any agreement, whether express, implied, oral, or written, that
poses an impediment to the Employee’s Engagement by the Company including the Employee’s compliance
with the terms of this Agreement. In particular, the Employee is not subject to a preexisting
non-competition agreement, and no restrictions or limitations exist respecting the Employee’s
ability to perform fully the Employee’s obligations with the Company including the Employee’s
compliance with the terms of this Agreement.

     10. Third Party Trade Secrets. During the Employee’s Engagement by the Company, the
Employee agrees not to copy, refer to, or in any way use information which is proprietary to any
third party (including any previous employer). The Employee represents and warrants that the
Employee has not improperly taken any documents, listings, hardware, software, discs, or any other
tangible medium that embodies proprietary information from any third party, and that the Employee
does not intend to copy, refer to, or in any way use information which is proprietary to any third
party in performing the Employee’s duties for the Company.

     11. Legitimate Business Purpose. Employee hereby acknowledges and agrees that each
and every provision of this Agreement serves a legitimate business purpose and exists to protect
the legitimate business interests of the Company.

     12. Injunctive Relief; Legal Fees. The Employee acknowledges that a breach of this
Agreement is likely to result in irreparable and unreasonable harm to the Company, that damages
caused by a breach would be extremely difficult to calculate, and that injunctive relief, as well
as damages, would be appropriate. If the Employee breaches this Agreement as determined by a court
of competent jurisdiction, the Employee shall promptly reimburse the Company for all reasonable
legal fees (and disbursements) incurred by the Company to enforce this Agreement or to pursue
remedies arising as a result of such breach.

     13. Successors and Assigns. This Agreement is personal to the Employee and may not be
assigned by Employee. Any and all rights acknowledged or granted to the Company under this
Agreement may be freely assigned by the Company.

     14. Prior Agreements; Waiver. If Employee currently has a written confidentiality or
non-compete agreement with the Company, this Agreement will supersede all provisions of that
agreement that cover the same subject matter as this Agreement. This Agreement constitutes the
entire Agreement between the parties pertaining to the subject matter contained in it and
supersedes those provisions of all prior and contemporaneous agreements, representations and
understandings of the parties pertaining to the same subject matter. No waiver of any of the
provisions of this Agreement shall be deemed to, or shall constitute a waiver of, any other
provisions, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the waiver.

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     15. Governing Law. This Agreement is entered into in Arizona and shall be governed by
the laws of the State of Arizona for all purposes. The parties hereby submit themselves to the
courts of the State of Arizona, located in the County of Maricopa, for the purpose of personal
jurisdiction in any action to enforce this Agreement.

     16. Construction. The language in all parts of this Agreement shall in all cases be
construed as a whole according to its fair meaning and not strictly for or against either party.
The headings contained in this Agreement are for reference purposes only and will not affect the
meaning or interpretation of this Agreement in any way. All terms used in one number or gender
shall be construed to include any other number or gender as the context may require. The parties
agree that each party has reviewed this Agreement and has had the opportunity to have counsel
review the same and that any rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not apply in the interpretation of this Agreement. Whenever the
words “include,” “includes,” or “including” are used in the Agreement, they shall be deemed to be
followed by the words “without limitation.”

     17. Consultation. The Employee is advised to obtain the advice of legal counsel
before signing this Agreement. By their signatures below, the Employee and the Company’s
representative acknowledge that they have each read the entire contents of this Agreement, that
they fully understand the terms and conditions hereof, and that each has independently had an
opportunity to review and discuss the Agreement with the advisor(s) or counsel of their respective
choosing.

OrthoLogic Corp.

/s/ James M. Pusey

James M. Pusey

For the Company

Employee’s Signature: /s/ Les M. Taeger                    

Print Name and Title of the Employee: Les M. Taeger, Senior Vice President, Chief Financial

Officer

Date:  January 10, 2006                    

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EXHIBIT A

Ladies and Gentlemen:

     The following is a complete list of all inventions or improvements relevant to the subject
matter of my engagement by OrthoLogic (the “Company”) which have been made or conceived or first
reduced to practice by me alone or jointly with others prior to my engagement by the Company:

	 	 	X    No inventions or improvements
	 
	 	 	

___    See below
	 
	 	 	

___Additional sheets attached

Name: /s/ Les M. Taeger                    

Date: 1-10-06                    

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Exhibit 10.3

INDEMNIFICATION AGREEMENT

     This Indemnification Agreement (the “Agreement”), which shall be effective as of January 16,
2006, is by and between OrthoLogic Corp., a Delaware corporation (the “Company”), and Les M. Taeger
(the “Indemnitee”).

RECITALS

     A. Management of the Company believes that it is essential for the Company to be able to
retain and attract as directors and officers the most capable persons available.

     B. Indemnitee currently is an Officer of the Company.

     C. Both the Company and Indemnitee recognize the increased risk of litigation and other claims
being asserted against directors and officers, and former directors and officers, of public
companies in today’s environment.

     D. In recognition of Indemnitee’s need for substantial protection against personal liability
in order to enhance Indemnitee’s continued service to the Company in an effective manner and in
part to provide Indemnitee with specific contractual assurance that the indemnification protection
provided by the Certificate of Incorporation and Bylaws of the Company will be available to
Indemnitee (regardless of, among other things, any amendment to or revocation of such Certificate
of Incorporation and Bylaws or any change in the composition of the Company’s Board of Directors or
any acquisition transaction relating to the Company), and in order to induce Indemnitee to continue
to provide services to the Company, the Company wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to Indemnitee to the fullest extent (whether
partial or complete) permitted by law and as set forth in this Agreement, and, to the extent
insurance is maintained, for the continued coverage of Indemnitee under the Company’s directors’
and officers’ liability insurance policies.

COVENANTS

     In consideration of the promises in this Agreement, and intending to be legally bound hereby,
the parties agree as follows:

     1. Certain Definitions.

          (a) Change in Control: shall be deemed to have occurred if (i) any “person” (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other
than a trustee or other fiduciary holding securities under an employee benefit plan of the Company
or a corporation owned directly or indirectly by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the Company, is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under said Act), directly or indirectly of securities of the
Company representing 20% or more of the total voting power represented by the Company’s then
outstanding Voting Securities, or (ii) during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board of Directors of the Company and any new
director whose election by the Board of Directors or nomination for

 

 

election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or consolidation which
would result in the Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding immediately after such merger
or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company (in one transaction or a series
of transactions) of all or substantially all the Company’s assets.

          (b) Claim: any threatened, pending or completed action, suit, proceeding or alternate
dispute resolution mechanism, or any inquiry, hearing or investigation, whether conducted by the
Company or any other party, that Indemnitee in good faith believes might lead to the institution of
any such action, suit, proceeding or alternate dispute resolution mechanism, whether civil,
criminal, administrative, investigative or other.

          (c) Expenses: include attorneys’ fees and all other costs, travel expenses, fees of
experts, transcript costs, filing fees, witness fees, telephone charges, postage, delivery service
fees, expenses and obligations of any nature whatsoever paid or incurred in connection with
investigating, defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in any Claim relating to any Indemnifiable
Event.

          (d) Indemnifiable Event: any event or occurrence that takes place either prior to or
after the execution of this Agreement related to the fact that Indemnitee is or was a director,
officer, employee, agent or fiduciary of the Company, or is or was serving at the request of the
Company as a director, officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise, or by reason of
anything done or not done by Indemnitee in any such capacity.

          (e) Potential Change in Control: shall be deemed to have occurred if (i) the Company
enters into an agreement or arrangement, the consummation of which would result in the occurrence
of a Change in Control; (ii) any person (including the Company) publicly announces an intention to
take or to consider taking actions which if consummated would constitute a Change in Control; (iii)
any person, other than a trustee or other fiduciary holding securities under an employee benefit
plan of the Company acting in such capacity or a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their ownership of stock of
the Company, who is or becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 10% or more of the combined voting power of the Company’s then outstanding
Voting Securities, increases his beneficial ownership of such securities by 5% or more over the
percentage so owned by such person on the date hereof; or (iv) the Board adopts a resolution to the
effect that, for purposes of this Agreement, a Potential Change in Control has occurred.

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          (f) Reviewing Party: any appropriate person or body consisting of a member or members
of the Company’s Board of Directors or any other person or body appointed by the Board who is not a
party to the particular Claim for which Indemnitee is seeking indemnification, or Independent Legal
Counsel.

          (g) Independent Legal Counsel: Independent Legal Counsel shall refer to an attorney,
selected in accordance with the provisions of Section 3 hereof, who shall not have otherwise
performed services for the Company or Indemnitee within the last five years (other than in
connection with seeking indemnification under this Agreement). Independent Legal Counsel shall not
be any person who, under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in an action to
determine Indemnitee’s rights under this Agreement, nor shall Independent Legal Counsel be any
person who has been sanctioned or censured for ethical violations of applicable standards of
professional conduct.

          (h) Voting Securities: any securities of the Company which vote generally in the
election of directors.

     2. Basic Indemnification Arrangement.

          (a) If Indemnitee was, is or becomes a party to or witness or other participant in, or is
threatened to be made a party to or witness or other participant in, a Claim by reasons of (or
arising in part from) an Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest
extent permitted by law as soon as practicable but in any event no later than thirty days after
written demand is presented to the Company, against any and all Expenses, judgments, fines,
penalties and amounts paid in settlement (including all interest, assessments and other charges
paid or payable in connection with or in respect of such Expenses, judgments, fines, penalties or
amounts paid in settlement) of such Claim and any federal, state, local or foreign taxes imposed on
the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement
(including the creation of the trust referred to in Section 4 hereof). If so requested by
Indemnitee, the Company shall advance (within five business days of such request) any and all
Expenses to Indemnitee (an “Expense Advance”). Notwithstanding anything in this Agreement to the
contrary and except as provided in Section 5, prior to a Change in Control, Indemnitee shall not be
entitled to indemnification pursuant to this Agreement in connection with any Claim initiated by
Indemnitee against the Company or any director or officer of the Company unless the Company has
joined in or consented to the initiation of such Claim.

          (b) Notwithstanding the foregoing, (i) the obligations of the Company under Section 2(a) shall
be subject to the condition that the Reviewing Party shall not have determined (in a written
opinion, in any case in which the Independent Legal Counsel referred to in Section 3 hereof is
involved) that Indemnitee would not be permitted to be indemnified under applicable law, and (ii)
the obligation of the Company to make an Expense Advance pursuant to Section 2(a) shall be subject
to the condition that, if, when and to the extent that the Reviewing Party determines that
Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all such
amounts theretofore paid; provided, however, that if Indemnitee has commenced legal proceedings in
a court of competent jurisdiction to secure a determination that

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Indemnitee should be indemnified under applicable law, any determination made by the Reviewing
Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be
binding and Indemnitee shall not be required to reimburse the Company for any Expense Advance until
a final judicial determination is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or lapsed). Indemnitee’s obligation to reimburse the Company for
Expense Advances shall be unsecured and no interest shall be charged thereon. If there has not
been a Change in Control, the Reviewing Party shall be selected by the Board of Directors, and if
there has been such a Change in Control, (other than a Change in Control which has been approved by
a majority of the Company’s Board of Directors who were directors immediately prior to such Change
in Control) the Reviewing Party shall be the Independent Legal Counsel referred to in Section 3
hereof. If there has been no determination by the Reviewing Party or if the Reviewing Party
determines that Indemnitee substantively would not be permitted to be indemnified in whole or in
part under applicable law, Indemnitee shall have the right to commence litigation in any court in
the States of Arizona or Delaware having subject matter jurisdiction thereof and in which venue is
proper seeking an initial determination by the court or challenging any such determination by the
Reviewing Party or any aspect thereof, or the legal or factual bases therefor and the Company
hereby consents to service of process and to appear in any such proceeding. Any determination by
the Reviewing Party otherwise shall be conclusive and binding on the Company and Indemnitee.

     3. Change in Control. The Company agrees that if there is a Change in Control of the
Company (other than a Change in Control which has been approved by a majority of the Company’s
Board of Directors who were directors immediately prior to such Change in Control) then Independent
Legal Counsel shall be selected by Indemnitee and approved by the Company (which approval shall not
be unreasonably withheld) and such Independent Legal Counsel shall determine whether the officer or
director is entitled to indemnity payments and Expense Advances under this Agreement or any other
agreement or Certificate of Incorporation or Bylaws of the Company now or hereafter in effect
relating to Claims for Indemnifiable Events. Such Independent Legal Counsel, among other things,
shall render its written opinion to the Company and Indemnitee as to whether and to what extent the
Indemnitee will be permitted to be indemnified. The Company agrees to pay the reasonable fees of
the Independent Legal Counsel and to indemnify fully such Independent Legal Counsel against any and
all expenses (including attorneys’ fees), claims, liabilities and damages arising from or relating
to this Agreement or the engagement of Independent Legal Counsel pursuant hereto.

     4. Establishment of Trust. In the event of a Potential Change in Control, the Company
shall, upon written request by Indemnitee, create a trust for the benefit of Indemnitee and from
time to time upon written request of Indemnitee shall fund such trust in an amount sufficient to
satisfy any and all Expenses reasonably anticipated at the time of each such request to be incurred
in connection with investigating, preparing for and defending any Claim relating to an
Indemnifiable Event, and any and all judgments, fines, penalties and settlement amounts of any and
all Claims relating to an Indemnifiable Event from time to time actually paid or claimed,
reasonably anticipated or proposed to be paid. The amount or amounts to be deposited in the trust
pursuant to the foregoing funding obligation shall be determined by the Reviewing Party, in any
case in which the Independent Legal Counsel referred to above is involved. The terms of the trust
shall provide that upon a Change in Control (i) the trust shall not be revoked or the principal
thereof invaded, without the written consent of Indemnitee, (ii) the trustee shall advance, within

4

 

five business days of a request by Indemnitee, any and all Expenses to Indemnitee (and
Indemnitee hereby agrees to reimburse the trust under the circumstances under which Indemnitee
would be required to reimburse the Company under Section 2(b) of this Agreement), (iii) the trust
shall continue to be funded by the Company in accordance with the funding obligation set forth
above, (iv) the trustee shall promptly pay to Indemnitee all amounts for which Indemnitee shall be
entitled to indemnification pursuant to this Agreement or otherwise, and (v) all unexpended funds
in such trust shall revert to the Company upon a final determination by the Reviewing Party or a
court of competent jurisdiction, as the case may be, that Indemnitee has been fully indemnified
under the terms of this Agreement. The trustee shall be chosen by Indemnitee. Nothing in this
Section 4 shall relieve the Company of any of its obligations under this Agreement. All income
earned on the assets held in the trust shall be reported as income by the Company for federal,
state, local and foreign tax purposes.

     5. Indemnification for Additional Expenses. The Company shall indemnify Indemnitee
against any and all expenses (including attorneys’ fees) and, if requested by Indemnitee, shall
(within five business days of such request) advance such expenses to Indemnitee, which are incurred
by Indemnitee in connection with any claim asserted against or in connection with any action
brought by Indemnitee for (i) indemnification or advance payment of Expenses by the Company under
this Agreement or any other agreement or Certificate of Incorporation or Bylaws of the Company now
or hereafter in effect relating to Claims for Indemnifiable Events and/or (ii) recovery under any
directors’ and officers’ liability insurance policies maintained by the Company, regardless of
whether Indemnitee ultimately is determined to be entitled to such indemnification, advance expense
payment or insurance recovery, as the case may be.

     6. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the Expenses, judgment, fines,
penalties and amounts paid in settlement of a Claim but not, however, for all of the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to the
extent that Indemnitee has been successful on the merits or otherwise in defense of any or all
Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter
therein, including dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.

     7. Defense to Indemnification, Burden of Proof and Presumptions. It shall be a
defense to any action brought by the Indemnitee against the Company to enforce this Agreement
(other than an action brought to enforce a claim for expenses incurred in defending a Claim
relating to an Indemnifiable Event in advance of its final disposition where the required
undertaking has been tendered to the Company) that the Indemnitee has not met the standards of
conduct that make it permissible under the Delaware General Corporation Law for the Company to
indemnify the Indemnitee for the amount claimed. In connection with any determination by the
Reviewing Party or otherwise as to whether the Indemnitee is entitled to be indemnified hereunder,
the burden of proving such a defense shall be on the Company. Neither the failure of the Company
(including its Board of Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action by the Indemnitee that indemnification of
the claimant is proper under the circumstances because he or she has met the

5

 

applicable standard of conduct set forth in the Delaware General Corporation Law, nor an
actual determination by the Company (including its Board of Directors, independent legal counsel,
or its stockholders) that the Indemnitee had not met such applicable standard of conduct, shall be
a defense to the action or create a presumption that the Indemnitee has not met the applicable
standard of conduct. For purposes of this Agreement, the termination of any claim, action, suit or
proceeding, by judgment, order, settlement (whether with or without court approval) or conviction,
or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that
Indemnitee did not meet any particular standard of conduct or have any particular belief or that a
court has determined that indemnification is not permitted by applicable law.

     8. Non-exclusivity, Etc. The rights of Indemnitee hereunder shall be in addition to
any other rights Indemnitee may have under the Certificate of Incorporation or Bylaws of the
Company or the Delaware General Corporation Law or otherwise. To the extent that a change in the
Delaware General Corporation Law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under the Certificate of
Incorporation and Bylaws of the Company and this Agreement, it is the intent of the parties hereto
that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.

     9. No Construction as Employment Agreement. Nothing contained herein shall be
construed as giving Indemnitee any right to be retained in the employ of the Company or any of its
subsidiaries or to remain as an officer of the Company.

     10. Liability Insurance. To the extent the Company maintains an insurance policy or
policies providing directors’ and officers’ liability insurance, Indemnitee shall be covered by
such policy or policies, in accordance with its or their terms, to the maximum extent of the
coverage available for any Company director or officer.

     11. Period of Limitations. No legal action shall be brought and no cause of action
shall be asserted by or in the right of the Company or any affiliate of the Company against
Indemnitee, Indemnitee’s spouse, heirs, executors, administrators or personal or legal
representatives after the expiration of two years from the date of accrual of such cause of action,
and any claim or cause of action of the Company or its affiliate shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within such two-year period;
provided, however, that if any shorter period of limitations is otherwise applicable to any such
cause of action such shorter period shall govern.

     12. Amendments, Etc. No supplement, modification or amendment of this Agreement shall
be binding unless executed in writing by both of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

     13. Subrogation. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall
execute all papers required and shall do everything that may be necessary to secure such

6

 

rights, including the execution of such documents necessary to enable the Company effectively
to bring suit to enforce such rights.

     14. No Duplication of Payments. The Company shall not be liable under this Agreement
to make any payment in connection with any claim made against Indemnitee to the extent Indemnitee
has otherwise actually received payment (under any insurance policy, Certificate of Incorporation
or Bylaws of the Company or otherwise) of the amounts otherwise indemnifiable hereunder.

     15. Binding Effect, Etc. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger, consolidation or otherwise to all
or substantially all of the business and/or assets of the Company, spouses, heirs, and personal and
legal representatives. The Company shall require and cause any successor (whether direct or
indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a
substantial part, of the business and/or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to perform if no such
succession had taken place. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as a director and/or officer of the Company or of any other
enterprise at the Company’s request.

     16. Severability. The provisions of this Agreement shall be severable if any of the
provisions hereof (including any provision within a single section, paragraph or sentence) are held
by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the
remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore,
to the fullest extent possible, the provisions of this Agreement (including, without limitation,
each portion of this Agreement containing any provision held to be invalid, void or otherwise
unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or unenforceable.

     17. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made and to be performed
in such state without giving effect to the principles of conflicts of laws.

[Signature page follows]

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     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of
the 10th day of January, 2006.

	 	 	 	 	 
	 	ORTHOLOGIC CORP.

 	 
	 	By:  	/s/ James M. Pusey
 	 
	 	 	James M. Pusey 	 
	 	 	Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	INDEMNITEE

 	 
	 	/s/ Les M. Taeger
 	 
	 	Les M. Taeger 	 
	 	 	 
	 

8

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