Document:

exv10w2

 

Exhibit 10.2

EXECUTION VERSION

OrthoLogic Corp.

Registration Rights Agreement

February 24, 2006

PharmaBio Development Inc.

as Investor

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Pages
	1.

	 	Certain Definitions
	 	 	1	 
	 
	2.

	 	Registration Requirements
	 	 	2	 
	 
	3.

	 	Registration Procedures
	 	 	3	 
	 
	4.

	 	Suspensions of Effectiveness
	 	 	4	 
	 
	5.

	 	Indemnification
	 	 	5	 
	 
	6.

	 	Contribution
	 	 	7	 
	 
	7.

	 	Survival
	 	 	8	 
	 
	8.

	 	Transfer or Assignment of Rights
	 	 	8	 
	 
	9.

	 	Miscellaneous
	 	 	8	 

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REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (this “Rights Agreement”), is dated and entered
into as of February 24, 2006, between PharmaBio Development Inc., a North Carolina
corporation (the “Investor”) and OrthoLogic Corp., a Delaware corporation (the
“Company”).

W I T N E S S E T H:

     WHEREAS, pursuant to that certain Common Stock and Warrant Purchase Agreement by and between
the Company and the Investor dated as of the date hereof (the “Agreement”), the parties
desire that, upon the terms and subject to the conditions thereof, the Company shall issue to the
Investor, and, subject to the terms and conditions thereof, the Investor shall purchase from the
Company, from time to time as provided in the Agreement, shares of the Company’s common stock, par
value $.0005 per share (“Common Shares”), and Warrants to purchase shares of such Common
Shares as described therein (the “Warrant Shares” and, together with the Common Shares, the
“Common Stock”);

     WHEREAS, pursuant to the terms of, and in partial consideration for, the Investor’s commitment
to enter into the Agreement, the Company has agreed to provide the Investor with certain
registration rights with respect to the Common Stock as set forth in this Rights Agreement;

     NOW, THEREFORE, in consideration of the mutual promises, representations, warranties,
covenants and conditions set forth in the Agreement and this Rights Agreement and for other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, intended
to be legally bound hereby, the Company and the Investor agree as follows:

     1. Certain Definitions. Capitalized terms used in this Rights Agreement and not
otherwise defined herein shall have the same meaning ascribed to them in the Agreement. The
following terms shall have the following respective meanings:

     “Agreement Date” shall mean the date as of which the Agreement was duly executed by
the parties thereto.

     “Commission” shall mean the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.

     “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.

     “Investor” shall include the Investor and any permitted assignee or transferee of the
rights under the Agreement to whom the registration rights conferred by this Rights Agreement have
been transferred in compliance with Section 8 of this Rights Agreement.

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     “Principal Market” shall mean the Nasdaq National Market, or any similar organization
or agency succeeding such market or exchange’s functions of reporting prices, whichever is at the
time the principal U.S. trading exchange or market for the Common Stock.

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

     The terms “register,” “registered” and “registration” shall refer to a
registration effected by preparing and filing an appropriate registration statement in compliance
with the Securities Act and applicable rules and regulations thereunder, and the declaration or
ordering of the effectiveness of such registration statement.

     2. Registration Requirements. The Company shall use its reasonable best efforts to
effect the registration of the Common Stock (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification under applicable blue sky
or other state securities laws and appropriate compliance with applicable regulations issued under
the Securities Act) as would permit or facilitate the resale of all the Common Stock in the manner
(including manner of sale) and in all states reasonably requested by the Investor for purposes of
maximizing the proceeds realizable by the Investor from such sale. Such reasonable best efforts by
the Company shall include without limitation the following:

          (a) Subject to the terms and conditions of this Rights Agreement, the Company shall, within
forty-five (45) days after the date of this Rights Agreement, file with the Commission an
appropriate registration statement on Form S-3 (or any successor or other appropriate form) under
the Securities Act for the registration of the Common Stock (the “Registration Statement”).
Furthermore, at the time of filing of the Registration Statement, the Company shall file (A) such
blue sky filings as shall have been requested by the Investor; and (B) any required filings with
the National Association of Securities Dealers, Inc. or exchange or market where the Common Stock
is traded. The Company shall use its best efforts to have all filings declared effective as
promptly as practicable.

          (b) The Company shall enter into such customary agreements and take all such other reasonable
actions in connection therewith in order to expedite or facilitate the disposition of the Common
Stock.

     3. Registration Procedures. The Company will keep the Investor advised in writing as
to the initiation of each registration and as to the completion thereof. The Company also will
provide to Investor’s counsel a copy of the Registration Statement prior to filing with the
Commission, and promptly inform such counsel as to the substance of any comment letters or similar
notices received by the Company from the Commission with respect thereto. At its expense, the
Company will use its reasonable best efforts to:

          (a) Keep such registration continuously effective until the earlier of (i) the sale under the
Registration Statement of all of the shares of Common Stock and (ii) and such date as all remaining
unsold shares of Common Stock can be sold by the Investor without restriction pursuant to the
requirements of Rule 144 of the Securities Act.

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          (b) Furnish such number of prospectuses and amendments and supplements thereto, and other
documents incident thereto as the Investor from time to time may reasonably request;

          (c) Prepare and file with the Commission such amendments and post- effective amendments to the
Registration Statement as may be necessary to keep such Registration Statement effective for the
applicable period; cause the related prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act; and
comply with the provisions of the Securities Act applicable to it with respect to the disposition
of all securities covered by such Registration Statement during the applicable period in accordance
with the intended methods of disposition by the sellers thereof set forth in such Registration
Statement or supplement to such prospectus;

          (d) Notify the Investor and its counsel (as designated in writing by the Investor) promptly,
and confirm such notice (a “Notice”) in writing, (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and, with respect to the Registration
Statement or any post-effective amendment, when the same has become effective, (ii) of any request
by the Commission for amendments or supplements to the Registration Statement or related prospectus
or for additional information, (iii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any proceedings for that
purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of
the qualification of any of the Common Stock for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (v) of the happening of any event as a result of
which the prospectus included in the Registration Statement (as then in effect) contains any untrue
statement of a material fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein (in the case of the prospectus or any preliminary
prospectus, in light of the circumstances under which they were made) not misleading, and (vi) of
the Company’s reasonable determination that a post-effective amendment to the Registration
Statement would be appropriate or that there exist circumstances not yet disclosed to the public
which make further sales under such Registration Statement inadvisable pending such disclosure and
post-effective amendment;

          (e) Upon the occurrence of any event contemplated by Section 3(d)(ii)-(vi) (unless a Blocking
Notice shall be in effect) and immediately upon the expiration of any Blocking Notice (as defined
in Section 4), prepare, if the occurrence of such event or period requires such preparation, a
supplement or post-effective amendment to the Registration Statement or related prospectus or any
document incorporated therein by reference or file any other required document so that, as
thereafter delivered to the purchasers of the Common Stock being sold thereunder, such prospectus
will not contain an untrue statement of a material fact or omit to state any material fact
necessary to make the statements, in light of the circumstances under which they were made, not
misleading;

          (f) Obtain the withdrawal of any order suspending the effectiveness of the Registration
Statement, or the lifting of any suspension of the qualification of any of the Common Stock for
sale in any jurisdiction, at the earliest possible moment;

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          (g) Cause all Common Stock subject to the Registration Statement at all times to be registered
or qualified for offer and sale under the securities or blue sky laws of such jurisdictions as any
Investor reasonably requests in writing; use its best efforts to keep each such registration or
qualification effective, including through new filings or amendments or renewals, during the period
the Registration Statement is required to be kept effective and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the Common Stock covered
by the Registration Statement; provided, however, that the Company will not be
required to qualify to do business or take any action that would subject it to taxation or general
service of process in any jurisdiction where it is not then so qualified or subject; and

          (h) Cause all Common Stock included in such Registration Statement to be listed, by the date
of first sale of Common Stock pursuant to such Registration Statement, on the Principal Market.

     4. Suspensions of Effectiveness. The Company may suspend dispositions under the
Registration Statement and notify the Investor that it may not sell the Common Stock pursuant to
any Registration Statement or prospectus (a “Blocking Notice”) if the Company’s management
determines in its good faith judgment that the Company’s obligation to ensure that such
Registration Statement and prospectus are current and complete would require the Company to take
actions that might reasonably be expected to have a materially adverse effect on the Company and
its shareholders; provided, that such suspension pursuant to a Blocking Notice or
Prospectus Inadequacy Notice (as defined below) or as a result of the circumstances described in
Section 3(d)(ii)-(vi) may not exceed sixty (60) days (whether or not consecutive) in any twelve
(12) month period. The Investor agrees by acquisition of the Common Stock that, upon receipt of a
Blocking Notice or “Prospectus Inadequacy Notice” from the Company of the existence of any fact of
the kind described in the following sentence, the Investor shall not dispose of, sell or offer for
sale the Common Stock pursuant to the Registration Statement until such Investor receives (i)
copies of the supplemented or amended prospectus, or until counsel for the Company shall have
determined that such disclosure is not required due to subsequent events, (ii) notice in writing
(the “Advice”) from the Company that the use of the prospectus may be resumed and (iii)
copies of any additional or supplemental filings that are incorporated by reference in the
Prospectus. Pursuant to the immediately preceding sentence, the Company may provide such
Prospectus Inadequacy Notice to the Investor upon the determination by the Company of the existence
of any fact or the happening or any event that makes any statement of a material fact made in the
Registration Statement, the prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue in any material respect, or that requires the making of
any additions to or changes in the Registration Statement or the prospectus, in order to make the
statements therein not misleading in any material respect. If so directed by the Company in
connection with any such notice, each Investor will deliver to the Company (at the Company’s
expense) all copies, other than permanent file copies then in such Investor’s possession, of the
prospectus covering such Common Stock that was current immediately prior to the time of receipt of
such notice. Delivery of a Blocking Notice or Prospectus Inadequacy Notice and the related
suspension of any Registration Statement shall not constitute a default under this Rights
Agreement. During any suspension as contemplated by this section, the Company will not allow any
of its officers or directors to buy or sell securities of the Company.

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     5. Indemnification.

          (a) Company Indemnity. The Company will indemnify and hold harmless the Investor,
each of its officers, directors and partners, and each person controlling the Investor, within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the rules and
regulations thereunder with respect to which registration, qualification or compliance has been
effected pursuant to this Rights Agreement, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus (including any related registration
statement, notification or the like or any amendment thereto) incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any state securities law or in
either case, any rule or regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration, qualification or
compliance, and will reimburse the Investor, each of its officers, directors and partners, and each
person controlling the Investor, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action, provided,
that the Company will not be liable in any such case to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement or omission (or
alleged untrue statement or omission) that is made in reliance upon and in conformity with written
information furnished to the Company by the Investor and stated to be specifically for use therein;
provided, however, that nothing contained herein shall limit the Company’s
obligation to provide indemnification pursuant to the Agreement. In addition to any other
information furnished in writing to the Company by the Investor, the information in the
Registration Statement concerning the Investor or any of its Affiliates under the caption “Plan of
Distribution” (or any similarly captioned Section containing information required pursuant to Item
508 of Regulation S-K) shall be deemed information furnished in writing to the Company by the
Investor to the extent it conforms to information actually supplied in writing by the Investor.
The indemnity agreement contained in this Section 5(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company (which consent will not be unreasonably withheld).

          (b) Investor Indemnity. The Investor will indemnify and hold harmless the Company,
each of its directors, officers, partners, and each person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the rules and
regulations thereunder, and each of their officers, directors and partners, and each person
controlling such other Investor (if any), and each of their officers, directors, and partners, and
each person controlling such other Investor against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in the Registration Statement (or any amendment thereto) or
prospectus or any omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statement therein not misleading, and will reimburse the
Company and its directors, officers and partners, or control persons for any legal or any other
expenses reasonably incurred in connection with investigating and defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent, that such untrue

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statement (or alleged untrue statement) or omission (or alleged omission) is made in such
registration statement or prospectus in reliance upon and in conformity with written information
furnished to the Company by the Investor and stated to be specifically for use therein, and
provided that the Investor shall not be liable under this indemnity for an amount in excess of the
proceeds received by the Investor from the sale of the Common Stock pursuant to such Registration
Statement; provided, however, that nothing contained herein shall limit the
Investor’s obligation to provide indemnification pursuant to the Agreement. In addition to any
other information furnished in writing to the Company by the Investor, the information in the
Registration Statement concerning the Investor under the caption “Plan of Distribution” (or any
similarly captioned Section containing information required pursuant to Item 508 of Regulation S-K)
shall be deemed information furnished in writing to the Company by the Investor to the extent it
conforms to information actually supplied in writing by the Investor. The indemnity agreement
contained in this Section 5(b) shall not apply to amounts paid in settlement of any such claims,
losses, damages or liabilities if such settlement is effected without the written consent of the
Investor (which consent shall not be unreasonably withheld).

          (c) Procedure. Each party entitled to indemnification under this Section 5 (the
“Indemnified Party”) shall give notice to the party required to provide indemnification
(the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of
any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim in any litigation resulting therefrom, provided, that counsel
for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such party’s expense, and,
provided, further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations under this Article
except to the extent that the Indemnifying Party is materially and adversely affected by such
failure to provide notice. The Indemnifying Party shall not, in connection with any one such
action or proceeding or separate but substantially similar or related actions or proceedings in the
same jurisdiction arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local
counsel) at any time for such Indemnified Party, provided, however, that if
separate firm(s) of attorneys are required due to a conflict of interest, then the indemnifying
party shall be liable for the reasonable fees and expenses of one additional firm. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.

     6. Contribution. If the indemnification provided for in Section 5 hereof is
unavailable to the Indemnified Party in respect of any losses, claims, damages or liabilities
referred to herein (other than by reason of the exceptions provided therein), then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such losses, claims, damages or

-6-

 

liabilities (i) as between the Company on the one hand and the Investor on the other, in such
proportion as is appropriate to reflect the relative benefits received by the Company on the one
hand or Investor on the other from the offering of the Common Stock, or if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand and of the Investor on the
other, in connection with the statements or omissions which resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable considerations and (ii) as between
the Company on the one hand and the Investor on the other, in such proportion as is appropriate to
reflect the relative fault of the Company and of the Investor in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations.

     The relative benefits received by the Company on the one hand and the Investor on the other
shall be deemed to be in the same proportion as the proceeds from the offering of Common Stock by
the Company to the Investor pursuant to the Agreement bear to the proceeds received by the Investor
from the sale of Common Stock pursuant to the Registration Statement. The relative fault of the
Company on the one hand and of the Investor on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the Company or by the
Investor.

     In no event shall the obligation of any Indemnifying Party to contribute under this Section 6
exceed the amount that such Indemnifying Party would have been obligated to pay by way of
indemnification if the indemnification provided for under Section 5(a) or Section 5(b) hereof had
been available under the circumstances.

     The Company and the Investor agree that it would not be just and equitable if contribution
pursuant to this Section 6 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred to in the
immediately preceding paragraphs. The amount paid or payable by an Indemnified Party as a result
of the losses, claims, damages and liabilities referred to in the immediately preceding paragraphs
shall be deemed to include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this section, the Investor shall not be
required to contribute any amount in excess of the amount by which the total price at which the
shares of Common Stock offered by the Investor and distributed to the public, or offered to the
public, exceeds the amount of any damages that the Investor has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.

     7. Survival. The indemnity and contribution agreements contained in Section 5 and
Section 6 shall remain operative and in full force and effect regardless of (i) any termination of
the Agreement or any underwriting agreement, (ii) any investigation made by or on behalf of any
Indemnified Party or by or on behalf of the Company and (iii) the consummation of the sale or
successive resales of the Registrable Securities.

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     8. Transfer or Assignment of Rights. Neither this Rights Agreement nor any rights of
the Investor or the Company hereunder may be assigned by either party to any other person.
Notwithstanding the foregoing, upon prior written notice to the Company, the Investor’s rights and
obligations under this Rights Agreement may be assigned, in whole or in part, to (each a
“Permitted Transferee”): (a) any Affiliate of the Investor, provided,
however, that any such assignment shall not release the Investor from its obligations
hereunder and (b) an assignee of each of (i) the Initial Class A Warrant and the Additional Class A
Warrants, (ii) the Class B Warrant, (iii) the Class C Warrant, and (iv) the Class D Warrant.

     9. Miscellaneous.

          (a) Entire Agreement. This Rights Agreement, together with the Agreement, contains
the entire understanding and agreement of the parties relating to the registration of Registrable
Securities, and may not be modified or terminated except by a written agreement signed by both
parties.

          (b) Notices. All notices, demands, requests, consents, approvals or other
communications required or permitted to be given hereunder or which are given with respect to this
Rights Agreement shall be in writing and shall be personally served or deposited in the mail,
registered or certified, return receipt requested, postage prepaid, or delivered by reputable air
courier service with charges prepaid, or transmitted by hand delivery, telegram or facsimile,
addressed as set forth below, or to such other address as such party shall have specified most
recently by written notice:

	 	 	 
	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
	 
	 	 
	With a copy to:

	 	Quarles & Brady Streich Lang llp
	 

	 	Attn: Steven P. Emerick
	 

	 	Two North Central Avenue
	 

	 	Phoenix, Arizona 85004
	 

	 	Phone: (602) 230-5517
	 

	 	Fax: (602) 417-2980
	 
	 	 
	If to the Investor:

	 	PharmaBio Development Inc.
	 

	 	4709 Creekstone Drive
	 

	 	Suite 200 Riverbirch Building
	 

	 	Durham, NC 27703
	 

	 	Attn: President
	 

	 	Phone: (919) 998-2080
	 

	 	Fax: (919) 998-2090
	 
	 	 
	With a copy to:

	 	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

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     Subject to Section 2.3(b) of the Agreement, notice shall be deemed given on the date of
service or transmission if personally served or transmitted by telegram, telex or facsimile during
normal business hours of the recipient. Notice otherwise sent as provided herein shall be deemed
given on the third business day following the date mailed or on the second business day following
delivery of such notice by a reputable air courier service.

          (c) Registration Expenses. The Company shall be responsible for the expenses to be
incurred by the Company in connection with Investor’s exercise of its registration rights under
this Rights Agreement, including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company, blue sky fees and expenses, and the
expense of any special audits that may be required in connection herewith.

          (d) Gender of Terms. All terms used herein shall be deemed to include the feminine
and the neuter, and the singular and the plural, as the context requires.

          (e) Governing Law. This Rights 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, as applied to agreements executed and performed entirely in the State of North Carolina,
without regard to conflicts of law rules.

          (f) Titles. The titles used in this Rights Agreement are used for convenience only
and are not to be considered in construing or interpreting this Rights Agreement.

          (g) Counterparts. This Rights Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.

[Signature Page follows]

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[Signature Page to Registration Rights Agreement]

     IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to be duly executed
as of the date first above written.

	 	 	 	 	 
	 

	 	 	 	 
	OrthoLogic Corp.	 	 
	 
	 	 	 	 
	By:

	 	      /s/ Les M. Taeger	 	 
	 

	 	 	 	 
	 

	 	Name: Les M. Taeger	 	 
	 

	 	Title: Sr. VP and CFO	 	 
	 
	 	 	 	 
	PharmaBio Development Inc.	 	 
	 
	 	 	 	 
	By:

	 	     /s/ Patrick B. Jordan	 	 
	 

	 	 	 	 
	 

	 	Name: Patrick B. Jordan	 	 
	 

	 	Title: Vice President, Corporate Developmentexv10w3

 

Exhibit 10.3

REGISTRATION RIGHTS AGREEMENT

by and among

ORTHOLOGIC CORP.

and

AZERX, INC.

and

The shareholders listed

on the signature pages hereto

Dated as of February 27, 2006

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE 1	 	DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 2	 	REGISTRATION RIGHTS	 	 	3	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.1	 	Resale Registration	 	 	3	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.2	 	Obligations of the Company in Connection with a Registration	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.3	 	Information	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.4	 	Indemnification and Contribution	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.5	 	Rule 144 Undertaking	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.6	 	Assignment of Registration Rights	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.7	 	“Market Stand-off” Agreement	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 3	 	MISCELLANEOUS	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.1	 	Successors and Assigns	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.2	 	No Inconsistent Agreements	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.3	 	Remedies	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.4	 	Governing Law	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.5	 	Counterparts	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.6	 	Titles and Subtitles	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.7	 	Notices	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.8	 	Amendments and Waivers	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.9	 	Severability	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.10	 	Entire Agreement	 	 	10	 

EXHIBITS

Exhibit A — Notice of Registration Statement and Selling Securityholder Questionnaire

Exhibit B — Form of Joinder Agreement

i

 

Execution Copy

REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is made as of February 27, 2006,
by and among ORTHOLOGIC CORP., a Delaware corporation (together with its successors, the
“Company”), AZERX, INC., a Delaware corporation (the “Seller”), and each of the
other shareholders of the Company listed on the signature pages hereof and such other shareholders
of the Company as may, from time to time, become parties to this Agreement in accordance with the
provisions hereof (collectively with the Seller, the “Shareholders”).

RECITALS

     WHEREAS, the Company and the Seller are parties to that certain Asset Purchase Agreement dated
February 23, 2006 (the “Purchase Agreement”);

     WHEREAS, pursuant to the Purchase Agreement, the Company agreed to issue to the Seller
1,325,000 shares of the Company’s Common Stock, $.0005 par value (the “Shares”), as partial
consideration for the Acquired Assets;

     WHEREAS, the Seller intends to distribute the Shares to its shareholders as soon as is
practicable after Closing; and

     WHEREAS, pursuant to the terms of, and in partial consideration for, the Seller’s commitment
to enter into the Purchase Agreement, and to induce Seller to do so, the Company has agreed to
provide Seller and the Shareholders with certain registration rights with respect to the Company’s
Common Stock (as defined below) as set forth in this Agreement.

     NOW, THEREFORE, in consideration of the mutual premises and covenants set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

     Terms not otherwise defined herein shall have the same meaning as set forth in the Purchase
Agreement. As used in this Agreement, the following terms shall have the meanings specified:

     “1933 Act”: the Securities Act of 1933, as amended.

     “1934 Act”: the Securities Exchange Act of 1934, as amended.

     “Affiliate” has the meaning set forth in Rule 12b-2 of the regulations promulgated
under the 1934 Act.

 

 

     “Business Day”: any day other than Saturdays, Sundays and days on which banking
institutions located in Arizona are authorized by law or other governmental action to be closed,
unless there shall have been an offering of the Common Stock registered under the 1933 Act, in
which case “Business Day” means: (a) if the Common Stock is listed or admitted to trading on a
national securities exchange, a day on which the principal national securities exchange on which
the Common Stock is listed or admitted to trading is open for business; or (b) if the Common Stock
is not so listed or admitted to trading, a day on which the New York Stock Exchange is open for
business.

     “Common Stock”: the Common Stock of the Company, $.0005 par value, and any class of
securities issued in exchange therefor or into which the Common Stock is converted.

     “Fully Diluted Basis”: calculation of the number of securities of the Company after
giving effect to (x) all shares of Common Stock then outstanding, (y) all shares of Common Stock
issuable upon the exercise of any then outstanding option, warrant or similar right and (z) all
shares of Common Stock issuable upon the exercise of any conversion or exchange right contained in
any then outstanding security convertible into or exchangeable for shares of Common Stock.

     “Holder”: any record owner of Registrable Securities or any assignee thereof pursuant
to Section 2.6 hereof.

     “Holders’ Counsel”: one counsel for the selling Holders, which counsel shall be
selected by a majority in interest of all participating Holders in the case of the preparation and
filing of a Resale Registration Statement.

     “Issue Date”: the first date of the original issuance of the Shares to Seller.

     “Person”: an individual, a partnership, a limited liability partnership, a limited
liability company, a joint venture, a corporation, a trust, an unincorporated organization or a
government or any department or agency thereof.

     “Registrable Securities”: (i) the Shares of Common Stock issued to the Shareholders
or any of their Affiliates as contemplated by the Purchase Agreement, and any additional shares of
Common Stock issued to AzTE in connection with the assignment of the AzTE Agreement to the Company;
and (ii) Common Stock issued as (or issued upon the conversion or exercise of any warrant, right or
other security which is issued as) a dividend or other distribution with respect to, or in exchange
for or in replacement of the shares described in the foregoing clause (i), excluding in all cases,
however, any shares of Common Stock which (x) are sold by a Person in a transaction in which the
rights under this Agreement are not assigned pursuant to Section 2.6 hereof, (y) are then
registered under an effective registration statement under the 1933 Act or (z) may be sold under
paragraph (k) of Rule 144.

     “Registration Expenses”: all expenses incident to the Company’s performance of or
compliance with Sections 2.1 through 2.7 hereof, which shall include, without limitation, the
following costs and expenses, whether or not the Company is otherwise expressly required to pay
such amounts in Sections 2.1 through 2.7 hereof: (i) all registration, filing, NASD and listing

2

 

fees; (ii) all fees and expenses of complying with securities or blue sky laws; (iii) all word
processing, duplicating, printing and electronic filing expenses; (iv) all messenger and delivery
expenses; (v) the fees and disbursements of Company’s counsel and the Company’s independent public
accountants, including the expenses of any special audits required by or incident to such
performance and compliance; (vi) premiums and other costs of policies of insurance (if any) against
liabilities arising out of the public offering of the Registrable Securities being registered if
the Company desires such insurance; (vii) any fees or disbursements of underwriters customarily
paid by issuers or sellers of securities, but not including underwriting discounts and commissions
and transfer taxes, if any; and (viii) the reasonable out-of-pocket expenses of the Holders of the
Registrable Securities to be registered incurred in connection with such registration, including
but not limited to the reasonable fees and disbursements of not more than one counsel chosen by the
holders of a majority of the Registrable Securities to be included in any Resale Registration
Statement; provided, that the fees and disbursements of such counsel chosen by a majority
of the Holders shall only be paid by the Company to the extent that such fees and disbursements do
not exceed $10,000; provided further, that in any case where Registration Expenses
are not to be borne by the Company, such expenses shall not include (i) salaries of Company
personnel or general overhead expenses of the Company, (ii) auditing fees not otherwise described
herein, (iii) premiums or other expenses relating to liability insurance required by underwriters
of the Company or (iv) other expenses for the preparation of financial statements or other data, to
the extent such data is normally prepared by the Company in the ordinary course of its business or
would have been incurred by the Company had no public offering taken place.

     “Resale Registration”: a registration of Registrable Securities pursuant to Section
2.1.

     “Rule 144”: Rule 144 promulgated under the 1933 Act, as amended.

     “SEC”: the U.S. Securities and Exchange Commission.

ARTICLE 2

REGISTRATION RIGHTS

     The Company covenants and agrees as follows:

     2.1 Resale Registration.

          (a) Resale Registration. The Company shall prepare and file or cause to be prepared
and filed with the SEC, as soon as practicable but in any event by the date (the “Filing
Deadline Date”) sixty (60) days after the Issue Date, a registration statement registering the
resale, by Holders thereof, of all of the Registrable Securities (the “Resale Registration
Statement”). The Resale Registration Statement shall be on Form S-3 or another appropriate
form permitting registration of such Registrable Securities for resale by such Holders. The
Company shall use its reasonable best efforts to cause the Resale Registration Statement to be
declared effective under the Securities Act as promptly as is practicable but in any event by the
date (the “Effectiveness Deadline Date”) that is one hundred twenty (120) days after the
Issue

3

 

Date. Each Holder shall promptly, but not later than the forty-fifth (45th) day
after the Issue Date, give the Company written notice (“Notice”) in the form attached
hereto as Exhibit A, specifying the number of Registrable Securities held by Holder to be
registered for resale on the Resale Registration Statement, the full legal name of the Holder and
such other information requested in the form of Notice. None of the Company’s securityholders
(other than the Holders of Registrable Securities) shall have the right to include any of the
Company’s securities in the Resale Registration Statement. If any Resale Registration Statement
filed pursuant to this Article 2 ceases to be effective for any reason prior to the end of the
period set forth in Section 2.2(a), the Company shall promptly prepare and file, as soon as
practicable, another registration statement pursuant to this Article 2, which shall be deemed to be
a “Resale Registration Statement” hereunder and for such purpose, the “Issue Date” shall mean the
date the previously effective Resale Registration Statement ceased to be effective.

          (b) Underwriting; Limitation due to Marketing Factors. If a registered offering under
this Section 2.1 involves an underwriting, the Company shall not be required to include any of a
Holder’s Registrable Securities in such registration unless such Holder accepts the terms of the
underwriting as agreed upon between the Company or the persons entitled to select the underwriters,
as the case may be, and the underwriters thereof.

          (c) Expenses of Resale Registration. The Company shall bear and pay all Registration
Expenses incurred in connection with the Resale Registration.

     2.2 Obligations of the Company in Connection with a Registration.

     Whenever required hereunder to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:

          (a) Prepare and file with the SEC a registration statement on the appropriate form with
respect to such Registrable Securities and use its commercially reasonable efforts to cause such
registration statement to become effective and remain effective for a period ending upon expiration
of the Lock-Up Period (as defined in the Lockup Agreement) or until the distribution of all
Registrable Securities contemplated in the registration statement has been completed, whichever
first occurs.

          (b) Prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration statement as, in the opinion
of counsel to the Company, may be necessary to comply with the provisions of the 1933 Act with
respect to the disposition of all securities covered by such registration statement.

          (c) Furnish to the Holders, upon request, without charge, such reasonable number of conformed
copies of such registration statement and of each amendment and supplement thereto (including all
exhibits), financial statements, schedules and all documents incorporated therein, deemed to be
incorporated therein by reference or filed therewith (except that the Company shall not be
obligated to furnish more than two (2) copies of such exhibits and documents), and numbers of
copies of a prospectus, including a preliminary prospectus and each

4

 

prospectus supplement or amendment, in conformity with the requirements of the 1933 Act, as
they may reasonably request.

          (d) Use its commercially reasonable efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such jurisdictions as
shall be reasonably requested by the Holders and keep such registrations and qualifications
effective during the period a registration statement is required to be effective; provided that the
Company shall not be required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states or jurisdictions,
unless the Company is already subject to service in such jurisdiction.

          (e) In the event of any underwritten public offering, enter into an underwriting agreement
with such underwriters for such offering, such agreement to be reasonably satisfactory in substance
and form to the Company and to contain such representations and warranties by the Company and such
other terms as are generally prevailing in agreements of such type, including, without limitation,
indemnities to the effect and to the extent provided in Section 2.4 hereof.

          (f) Cause all such Registrable Securities to be listed on each securities exchange or
automated inter-dealer quotation system on which similar securities issued by the Company are then
listed.

          (g) Provide a transfer agent, registrar and CUSIP number for all such Registrable Securities,
in each case not later than the effective date of such registration.

          (h) Use its commercially reasonable efforts to comply with all applicable rules and
regulations of the SEC.

          (i) Use its commercially reasonable efforts to cause such Registrable Securities to be
registered with or approved by such other governmental agencies or authorities as may be necessary
to enable the sellers thereof to consummate the disposition of such Registrable Securities.

     2.3 Information.

          (a) It shall be a condition precedent to the obligations of the Company to take any action
hereunder with respect to the Registrable Securities of any Holder that such Holder furnish to the
Company such information regarding itself, the Registrable Securities held by it, and the intended
method of disposition of such securities as shall be required to effect the registration of such
Holder’s Registrable Securities.

          (b) The Company shall make available for inspection by any seller of Registrable Securities,
any underwriter participating in any disposition pursuant to such registration statement and any
attorney, accountant or other agent retained by any such seller or underwriter, all financial and
other records, pertinent corporate documents and properties of the Company, and cause the Company’s
officers, directors, employees and independent accountants to supply all information reasonably
requested by any such seller, underwriter, attorney, accountant or agent in connection with such
registration statement, provided the foregoing

5

 

persons first shall execute such confidentiality agreements as reasonably may be required by
the Company.

          (c) The Company shall furnish to counsel (if any) selected by the Holders of a majority of the
Registrable Securities covered by a registration statement and to counsel for the underwriters in
any underwritten offering copies of all documents proposed to be filed with the SEC in connection
with such registration a reasonable time prior to the proposed filing thereof and give reasonable
consideration in good faith to any comments of such Holders, counsel and underwriters.

     2.4 Indemnification and Contribution. In the event any Registrable Securities are
included in a registration statement hereunder:

          (a) The Company will indemnify and hold harmless each Holder, the officers, directors,
partners, members, employees and representatives of each Holder, any underwriter (as defined in the
1933 Act) for such Holder and each Person, if any, who controls such Holder or underwriter within
the meaning of the 1933 Act or the 1934 Act (each, a “Company Indemnified Person”), against any
losses, claims, damages, or liabilities (joint or several) to which they or any of them may become
subject under the 1933 Act, the 1934 Act or any other federal or state laws, or otherwise, whether
direct or indirect, including without limitation any obligation to indemnify any underwriter
against any such losses, claims, damages, or liabilities, in each case insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a “Violation”): (i) any untrue
statement or alleged untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or any amendments or
supplements thereto; (ii) the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein not misleading; or (iii)
any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any state
securities laws, or any rule or regulation promulgated under any of the foregoing; and the Company
will pay, or promptly reimburse to such Company Indemnified Person, as incurred, any legal or other
expenses reasonably incurred by any Company Indemnified Person, in connection with investigating or
defending any such loss, claim, damages, liability or action; provided, however, that the indemnity
agreement contained in this Section 2.4(a) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability, or action if such settlement is effected without the consent
of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable
in any such case for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such registration by any such
Company Indemnified Person.

          (b) Each selling Holder, by requesting securities to be covered by any registration statement
hereunder, agrees to indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each Person, if any, who controls the Company
within the meaning of the 1933 Act, any underwriter, any other Holder selling securities in such
registration statement and any of the directors, officers, partners or members and any controlling
person of any such underwriter or other Holder (each, a “Holder

6

 

Indemnified Person”), against any losses, claims, damages, or liabilities (joint or several)
to which any of the foregoing persons may become subject, under the 1933 Act, the 1934 Act, or any
other federal or state laws or otherwise, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection with such
registration; and each such Holder will pay, as incurred, any legal or other expenses reasonably
incurred by any Holder Indemnified Person, in connection with investigating or defending any such
loss, claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this Section 2.4(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected without the consent of
the indemnifying Holder, which consent shall not be unreasonably withheld.

          (c) Promptly after receipt by an indemnified party under this Section 2.4 of notice of the
commencement of any action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this Section 2.4,
deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying
party shall have the right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without conflict by one
counsel) shall have the right to retain one separate counsel if representation of such indemnified
party by the counsel retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party represented by
such counsel in such proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, to the extent prejudicial to its
ability to defend such action, shall relieve such indemnifying party of liability to the
indemnified party under this Section 2.4 only to the extent of such prejudice, but the omission so
to deliver written notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 2.4.

          (d) If the indemnification provided for in this Section 2.4 is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim,
damage, or expense referred to herein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage, or expense 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 in connection with the statements or omissions that resulted in such
loss, liability, claim, damage, or expense as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and of the indemnified party 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.

7

 

     The Company and the Holders agree that it would not be just and equitable if contribution
pursuant to this Section 2.4(d) were determined by pro rata allocation (even if the Holders and any
underwriters were treated as one entity for such purpose) or by any other method of allocation that
does not take account of the equitable considerations referred to in the immediately preceding
paragraph.

     Notwithstanding the provisions of this Section 2.4(d), no Holder shall be required to
contribute any amount in excess of the amount by which the net proceeds received by such Holder
from the sale of Registrable Securities exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of the Violation giving rise to such loss, liability,
claim, damage, or expense. No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

          (e) The obligations of the Company and Holders under this Section 2.4 shall survive the
completion of any offering of Registrable Securities in a registration statement hereunder, and
otherwise.

     2.5 Rule 144 Undertaking. The Company shall use its reasonable efforts to make
publicly available and available to the Holders, pursuant to Rule 144, such information as is
necessary to enable the Holders to make sales of Registrable Securities pursuant to Rule 144. The
Company shall use its best efforts to file timely with the SEC all documents and reports required
of the Company under the 1934 Act. The Company shall furnish to any Holder, upon request, a
written statement executed by the Company as to compliance with the current public information
requirements of Rule 144.

     2.6 Assignment of Registration Rights. The rights to cause the Company to register
all or any portion of any Registrable Securities pursuant hereto may be assigned (but only with all
related obligations) from time to time by a Holder to any transferee or assignee of such Holder’s
Registrable Securities; provided such transferee or assignee agrees in writing to be bound by and
subject to the terms and conditions of this Agreement.

     2.7 “Market Stand-off” Agreement. Each Holder hereby agrees that it shall not, to the
extent requested by the Company or an underwriter of Common Stock (or other securities) of the
Company, sell or otherwise transfer or dispose of any Registrable Securities in a market
transaction during the seven days prior to and 180 days following the effective date of a
registration statement of the Company filed under the 1933 Act, but only if:

          (a) the Holders are entitled under Section 2.1 to participate in such registration with
respect to all of their Registrable Securities (provided that such agreement shall not apply to any
shares which are included in any such registration); and

          (b) all officers and directors of the Company and shareholders who beneficially own more than
5% of the Company’s outstanding Common Stock (determined on a Fully Diluted Basis) and all other
Persons with registration rights (whether or not pursuant to this agreement) enter into similar
agreements.

8

 

     In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions
with respect to the Registrable Securities of each Holder (and the shares or securities of every
other person subject to the foregoing restriction) until the end of such 180-day period.

ARTICLE 3

MISCELLANEOUS

     3.1 Successors and Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

     3.2 No Inconsistent Agreements. The Company will not hereafter enter into any
agreement with respect to its securities which is inconsistent with the rights granted to the
Holders in this Agreement.

     3.3 Remedies. Any Person having rights under any provision of this Agreement will be
entitled to enforce such rights specifically to recover damages caused by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by law. The parties
hereto agree and acknowledge that money damages may not be a complete and adequate remedy for any
breach of the provisions of this Agreement and that any party may in its sole discretion apply to
any court of law or equity of competent jurisdiction (without posting any bond or other security)
for specific performance and for other injunctive relief in order to enforce or prevent violation
of the provisions of this Agreement.

     3.4 Governing Law. This Agreement shall be governed by and construed under the laws
of the State of Arizona, applicable to contracts made and performed in such state, disregarding
such state’s principles of conflicts of laws which would otherwise provide for the application of
the substantive laws of another jurisdiction.

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

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

     3.7 Notices. Unless otherwise provided, any notice required or permitted hereunder
shall be given in writing and shall be deemed effectively given upon the earliest of (i) the date
of personal delivery to the party to be notified, (ii) the date of facsimile delivery with a
confirmation copy sent simultaneously by registered or certified mail, postage prepaid, (iii) one
Business Day after deposit for overnight delivery with a nationally recognized overnight courier,
shipping charges prepaid, or (iv) four days after deposit with the United States Post Office by
registered or certified mail, postage prepaid. Such notices shall be addressed to the appropriate

9

 

party to the attention of the person who executed this Agreement at the address and, as
appropriate, the facsimile number, set forth under such party’s signature below (or to the
attention of such other person or to such other address or facsimile number as such party shall
have furnished to each other party in accordance with this Section 3.7).

     3.8 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived, only with the written consent of the
Company and the holders of sixty six and two-thirds percent (66 2/3%) of the Registrable Securities
then outstanding, provided that no such amendment or waiver shall be effective with respect to the
rights of any Holder in respect of any registration effected prior to such amendment or waiver
without the written consent of such Holder. Except as provided in the preceding sentence, any
amendment or waiver effected in accordance with this Section 3.8 shall be binding upon each holder
of any Registrable Securities then outstanding, each future holder of all such Registrable
Securities, and the Company. Notwithstanding the foregoing, a waiver or consent with respect to a
matter which relates exclusively to the rights of Holders of Registrable Securities whose
securities are being sold pursuant to a registration statement and which does not directly or
indirectly affect the rights of other Holders may be given by the holders of a majority of the
Registrable Securities being sold. Notwithstanding the foregoing, Holders receiving Registrable
Securities pursuant to Section 2.6 hereof may become parties hereto automatically upon execution
and delivery to the Company of a joinder agreement, in substantially the form attached hereto as
Exhibit B, to assume the obligations of a Holder hereunder and to be bound hereby, and thereafter
each such Holder shall be deemed to be a “Holder,” and such Registrable Securities held by such
Holder shall be deemed “Registrable Securities” hereunder. The Company shall promptly provide
written notice to the other Holders of any new Holder becoming party to the Agreement.

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

     3.10 Entire Agreement. This Agreement, together with the exhibits hereto, and the
Purchase Agreement constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof.

[The remainder of this page is intentionally blank]

10

 

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

	 	 	 	 	 
	 	COMPANY:

ORTHOLOGIC CORP., a Delaware corporation

 	 
	 	By:  	/s/ James M. Pusey
 	 
	 	 	Name:  	James M. Pusey, M.D. 	 
	 	 	Title:  	President and Chief Executive Officer	 
	 	 	Address: 	1275 West Washington Street	 
	 	 	 	Tempe, Arizona  85281	 
	 	 	Facsimile No.: 	(602) 470-7080 	 
	 
	 	SELLER:

AzERx, Inc., a Delaware corporation

 	 
	 	By:  	/s/ Colleen M. Brophy
 	 
	 	 	Name:  	Colleen M. Brophy, M.D. 	 
	 	 	Title:  	Chief Executive Officer	 
	 	 	Address: 	3863 West Park Avenue	 
	 	 	 	Chandler, AZ  85226	 
	 	 	Facsimile No.:	(480) 965-0037 	 
	 

[Signature page to Registration Rights Agreement]

 

 

COUNTERPART SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

	 	 	 	 	 
	 	 	 
	 	       /s/ Alyssa Panitch
 	 
	 	Alyssa Panitch 	 
	 	 	 
	 	
 	 
	 	Number of Registrable Securities 	 
	 	 	 
	 	       /s/ Colleen M. Brophy
 	 
	 	Colleen M. Brophy 	 
	 	 	 
	 	
 	 
	 	Number of Registrable Securities 	 
	 	 	 
	 	       /s/ Lokesh Joshi
 	 
	 	Lokesh Joshi 	 
	 	 	 
	 	
 	 
	 	Number of Registrable Securities 	 
	 	 	 
	 	       /s/ Elizabeth Furnish
 	 
	 	Elizabeth Furnish 	 
	 	 	 
	 	
 	 
	 	Number of Registrable Securities 	 
	 	 	 
	 	       /s/ Terry E. Winters
 	 
	 	Terry E. Winters 	 
	 	 	 
	 	
 	 
	 	Number of Registrable Securities 	 
	 	 	 

 

 

COUNTERPART SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

	 	 	 	 	 
	 	 	 
	 	       /s/ Dennis Goldberg
 	 
	 	Dennis Goldberg 	 
	 	 	 
	 	
 	 
	 	Number of Registrable Securities 	 
	 	 	 
	 	       /s/ Randolph Steer
 	 
	 	Randolph Steer 	 
	 	 	 
	 	
 	 
	 	Number of Registrable Securities 	 
	 	 	 
	 	       /s/ Padmini Komalavilas
 	 
	 	Padmini Komalavilas 	 
	 	 	 
	 	
 	 
	 	Number of Registrable Securities 	 
	 	 	 
	 	       /s/ Charles Robb Flynn
 	 
	 	Charles Robb Flynn 	 
	 	 	 
	 	
 	 
	 	Number of Registrable Securities 	 
	 	 	 
	 	       /s/ Brandon Seal
 	 
	 	Brandon Seal 	 
	 	 	 
	 	
 	 
	 	Number of Registrable Securities 	 
	 	 	 

 

 

COUNTERPART SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

	 	 	 	 	 
	 	 	 
	 	       /s/ Jeffery Thresher
 	 
	 	Jeffrey Thresher 	 
	 	 	 
	 	
 	 
	 	Number of Registrable Securities 	 
	 	 	 
	 	       /s/ Catherine Parmiter
 	 
	 	Catherine Parmiter 	 
	 	 	 
	 	
 	 
	 	Number of Registrable Securities 	 
	 	 	 
	 	       /s/ Elisabeth McLemore
 	 
	 	Elisabeth McLemore 	 
	 	 	 
	 	
 	 
	 	Number of Registrable Securities 	 
	 	 	 
	 	       /s/ David Woodrum
 	 
	 	David Woodrum 	 
	 	 	 
	 	
 	 
	 	Number of Registrable Securities 	 
	 	 	 
	 	       /s/ Adam Hansen
 	 
	 	Adam Hansen 	 
	 	 	 
	 	
 	 
	 	Number of Registrable Securities 	 
	 	 	 

 

 

COUNTERPART SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

	 	 	 	 	 
	 	 	 
	 	       /s/ Deron Tessier
 	 
	 	Deron Tessier 	 
	 	 	 
	 	
 	 
	 	Number of Registrable Securities 	 

VALLEY VENTURES III, L.P.,

By VV III Management, L.L.C., its General Partner

Its:      General Partner

	 	 	 	 
	 	By: /s/ Gregg E. Adkin
 

	 
	 	Name:  	Gregg E. Adkin 	 
	 	Title:  	Managing Member 	 

ARIZONA SCIENCE & TECHNOLOGY ENTERPRISES, LLC

	 	 	 
	By: /s/ Peter Slate
 

	 
	Name:  	Peter Slate 	 
	Title:  	CEO 	 

 

 

	 	 	 	 	 

COUNTERPART SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

EXHIBIT A

ORTHOLOGIC CORP.

NOTICE OF REGISTRATION STATEMENT

and

SELLING SECURITYHOLDER QUESTIONNAIRE

     Reference is hereby made to the Registration Rights Agreement (the “Registration Rights
Agreement”) by and among OrthoLogic Corp. (the “Company”), AzERx, Inc. and the
shareholders listed therein. Pursuant to the Registration Rights Agreement, the Company will file
with the United States Securities and Exchange Commission (the “Commission”) a registration
statement on Form S-3 (the “Resale Registration Statement”) for the registration and resale
under the Securities Act of 1933, as amended (the “Securities Act”), the shares of common
stock, par value $.0005 per share (the “Common Stock”), issuable pursuant to the Asset
Purchase Agreement and Plan of Reorganization between the Company and AzERx, Inc. dated February
___, 2006. A copy of the Registration Rights Agreement is attached hereto. All capitalized terms
not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights
Agreement.

     Each beneficial owner of Registrable Securities (as defined below) is entitled to have the
Registrable Securities beneficially owned by it included in the Resale Registration Statement. In
order to have Registrable Securities included in the Resale Registration Statement, this Notice of
Registration Statement and Selling Securityholder Questionnaire (“Notice and
Questionnaire”) must be completed, executed and delivered to the Company’s counsel at the
address set forth herein for receipt within 45 days from the Issue Date. Beneficial owners of
Registrable Securities who do not complete, execute and return this Notice and Questionnaire by
such date (i) will not be named as selling securityholders in the Resale Registration Statement,
and (ii) may not use the Prospectus forming a part thereof for resales of Registrable Securities.

     Certain legal consequences arise from being named as a selling securityholder in the Resale
Registration Statement and related Prospectus. Accordingly, holders and beneficial owners of
Registrable Securities are advised to consult their own securities law counsel regarding the
consequences of being named or not being named as a selling securityholder in the Resale
Registration Statement and related Prospectus.

     The term “Registrable Securities” is defined in the Registration Rights Agreement to mean (i)
the Shares of Common Stock issued to the Shareholders or any of their Affiliates as contemplated by
the Purchase Agreement; and (ii) Common Stock issued as (or issued upon the
conversion or exercise of any warrant, right or other security which is issued as) a dividend or

 

 

other distribution with respect to, or in exchange for or in replacement of the shares described
in the foregoing clause (i), excluding in all cases, however, any shares of Common Stock which (x)
are sold by a Person in a transaction in which the rights under this Agreement are not assigned
pursuant to Section 2.6 hereof, (y) are then registered under an effective registration statement
under the 1933 Act or (z) may be sold under paragraph (k) of Rule 144.

ELECTION

     The undersigned holder (the “Selling Securityholder”) of Registrable Securities hereby
elects to include in the Resale Registration Statement the Registrable Securities beneficially
owned by it and listed below in Item (3). The undersigned, by signing and returning this Notice and
Questionnaire, agrees to be bound with respect to such Registrable Securities by the terms and
conditions of this Notice and Questionnaire and the Registration Rights Agreement.

     Upon any sale of Registrable Securities pursuant to the Resale Registration Statement, the
Selling Securityholder will be required to deliver to the Company the Notice of Transfer to be set
forth in Appendix A to the Prospectus.

     The Selling Securityholder hereby provides the following information to the Company and
represents and warrants that such information is accurate and complete:

2

 

QUESTIONNAIRE

(1) (a) Full legal name of Selling Securityholder:

 

 

 

(b) Full legal name of Registered Holder (if not the same as in (a) above) of
Registrable Securities listed in Item (3) below:

 

 

 

(c) Full legal name of DTC participant (if applicable and if not the same as
(b) above) through which registrable securities listed in Item (3) below are
held:

 

 

 

(2) Address for notices to Selling Securityholder:

 

 

 

 

 

 

	 	 	 	 	 
	 

	 	Telephone:	 	 
	 

	 	 	 	 

	 	 	 	 	 
	 

	 	Fax:	 	 
	 

	 	 	 	 

	 	 	 	 	 
	 

	 	Contact Person:	 	 
	 

	 	 	 	 

(3) Beneficial Ownership of Securities:

Except as set forth below in this Item (3) and Item (4), the undersigned does not beneficially own
any shares of Common Stock or any other securities of the Company.

	 	(a)	 	Number of Registrable Securities (as defined in the Registration
Rights Agreement) beneficially owned:
                                        
shares
	 
	 	(b)	 	Number of Registrable Securities which the undersigned wishes to be
included in the Resale Registration Statement:
                                         shares

3

 

(4) Beneficial Ownership of Other Securities of the Company:                                                                                 

Except as set forth below in this Item (4), the undersigned Selling Securityholder is not the
beneficial or registered owner of any shares of Common Stock or any other securities of the
Company, other than the Registrable Securities listed above in Item (3).

State any exceptions here:

 

(5) Indicate below if the undersigned is (a) a broker-dealer or (b) an affiliate of a
broker-dealer. Except as set forth below, if the undersigned is an affiliate of a broker-dealer,
the undersigned represents and warrants that it bought the Registrable Securities in the ordinary
course of business and at the time of the purchase had no agreements or understandings, directly or
indirectly, with any person to distribute the Registrable Securities:

 

 

If you are (a) a broker-dealer or (b) an affiliate of a broker-dealer who did not buy Registrable
Securities in the ordinary course of business and at the time of your purchase had an agreement or
understanding, directly or indirectly, with any person to distribute the Registrable Securities,
then you will be identified as an underwriter in the Resale Registration Statement.

(6) Relationships with the Company:

Except as set forth below, neither the Selling Securityholder nor any of its affiliates, officers,
directors or principal equity holders (5% or more) has held any position or office or has had any
other material relationship with the Company (or its predecessors or affiliates) during the past
three years.

State any exceptions here:

 

(7) Plan of Distribution:

Except as set forth below, the undersigned Selling Securityholder intends to distribute the
Registrable Securities listed above in Item (3) only as follows (if at all): Such Registrable
Securities may be sold from time to time directly by the undersigned Selling Securityholder or,
alternatively, through underwriters, broker-dealers or agents. Such Registrable Securities may be
sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale, or at negotiated prices. Such sales may be
effected in transactions (which may involve crosses or block transactions) (i) on any national
securities exchange or quotation service on which the Registered Securities may be listed or quoted
at the time of sale, (ii) in the over-the-counter market, (iii) in transactions otherwise than on
such exchanges or services or in the over-the-counter market, or (iv) through the writing of

4

 

options. In connection with sales of the Registrable Securities or otherwise, the Selling
Securityholder may enter into hedging transactions with broker-dealers, which may in turn engage in
short sales of the Registrable Securities in the course of hedging the positions they assume. The
Selling Securityholder may also sell Registrable Securities short and deliver Registrable
Securities to close out such short positions, or loan or pledge Registrable Securities to
broker-dealers that in turn may sell such securities.

State any exceptions here:

 

     Note: In no event may such method(s) of distribution take the form of an underwritten
offering of the Registrable Securities without the prior agreement of the Company.

     By signing below, the Selling Securityholder acknowledges that it understands its obligation
to comply, and agrees that it will comply, with the provisions of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder, particularly Regulation M.

     In the event that the Selling Securityholder transfers all or any portion of the Registrable
Securities listed in Item (3) above after the date on which such information is provided to the
Company, the Selling Securityholder agrees to notify the transferee(s) at the time of the transfer
of its rights and obligations under this Notice and Questionnaire and under the Registration Rights
Agreement.

     By signing below, the Selling Securityholder consents to the disclosure of the information
contained herein in its answers to Items (1) through (7) above and the inclusion of such
information in the Resale Registration Statement and related Prospectus. The Selling Securityholder
understands that such information will be relied upon by the Company in connection with the
preparation of the Resale Registration Statement and related Prospectus.

     The Selling Securityholder agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein which may occur subsequent to the date hereof at any
time while the Resale Registration Statement remains in effect. All notices hereunder and pursuant
to the Registration Rights Agreement shall be made in writing, by hand-delivery, first-class mail,
or air courier guaranteeing overnight delivery as follows:

     (i) To the Company:

OrthoLogic Corp.

1275 West Washington Street

Tempe, AZ 85281

Attn: James M. Pusey, M.D.

Tel: (602) 286-5520

Fax: (602) 470-7080

5

 

     (ii) With a copy to:

Quarles & Brady LLP

One Renaissance Square

Two North Central Avenue

Phoenix, Arizona 85004-2391

Attn: Steven P. Emerick, Esq.

Fax: (602) 417-2980

Tel: (602) 230-5517

     Once this Notice and Questionnaire is executed by the Selling Securityholder and received by
the Company’s counsel, the terms of this Notice and Questionnaire, and the representations and
warranties contained herein, shall be binding on, shall inure to the benefit of and shall be
enforceable by the respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Securityholder with respect to the Registrable Securities beneficially
owned by such Selling Securityholder and listed in Item (3) above. This Agreement shall be governed
in all respects by the laws of the State of Arizona without giving effect to any of the conflict of
law rules thereof.

6

 

     IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and
Questionnaire to be executed and delivered either in person or by its duly authorized agent.

	 	 	 	 	 
	 

	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 	 	 

Selling Securityholder (Print/type full legal name of

beneficial owner of Registrable Securities)

	 	 	 	 	 
	 

	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

7

 

EXHIBIT B

FORM OF JOINDER AGREEMENT

     This Agreement (the “Agreement”) is made and entered into as of                     , 2006 by
                     (the “Joining Holder”) with ORTHOLOGIC CORP., a Delaware corporation
(together with its successors, the “Company”).

RECITALS

     WHEREAS, the Company, AzERx, Inc., a Delaware corporation, and certain of the shareholders of
the Company are parties to that certain Registration Rights Agreement dated as of February      ,
2006 (the “Rights Agreement”); and

     WHEREAS, the Rights Agreement contemplates that Holders (as such term is defined in the Rights
Agreement) of Registrable Securities (as such term is defined in the Rights Agreement) may become
parties to the Rights Agreement and be bound thereto; and

     WHEREAS, Joining Holder has acquired Registrable Securities and desires to become a party to
the Rights Agreement, all on the terms and conditions set forth in this Agreement.

     NOW THEREFORE, in consideration of the foregoing recitals, the mutual promises hereinafter set
forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     1. By executing and delivering this Agreement to the Company, Joining Holder hereby agrees to
become a party to, to be bound by, and to assume the obligations of a “Holder” under the Rights
Agreement (as such term is defined in the Rights Agreement), in the same manner as if Joining
Holder were an original signatory to the Rights Agreement. Joining Holder shall be considered to
be a “Holder” and the stock held by Joining Holder shall be deemed to be “Registrable Securities”
(as such terms are defined in the Rights Agreement).

     Accordingly, the undersigned has executed and delivered this Agreement as of the date first
written above.

	 	 	 	 	 
	 

	 	 	 	 
	 

	 	JOINING HOLDER:	 	 
	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	[Print Name]

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