**Exhibit10.36**

 

CERTAIN MATERIAL (INDICATED BYTHREE ASTERISKS) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FORCONFIDENTIAL TREATMENT.  THE OMITTEDMATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

AMENDMENT NO. 3

TO

SALES REPRESENTATIVE AGREEMENT

 

This Amendment No. 3 to Sales RepresentativeAgreement is made and entered into effective as of September 15, 2003 byand between OrthoLogic Corp., a Delaware corporation, with its principal placeof business at 1275 West Washington Street, Tempe, AZ 85281 (“OrthoLogic”), andDePuy AcroMed, Inc., an Ohio corporation, with its principal place of businessat 325 Paramount Drive, Raynham, MA 02767 (“DePuy AcroMed”).

 

WHEREAS, OrthoLogic and DePuy AcroMed areparties to a Sales Representative Agreement, dated August 18, 2000, asamended on August 1, 2001 and March 1, 2002  (as amended, the “Agreement”), under which OrthoLogic appointedDePuy AcroMed as its exclusive sales representative to sell OrthoLogic’sSpinaLogic bone growth stimulation product, as set forth in Section 1.8 ofthe Agreement;

 

WHEREAS, the Parties wish to alter theirobligations under the Agreement so that OrthoLogic will be responsible forfollowing up with prescribing physicians to obtain certain supportingdocumentation needed for sales of the Products;

 

WHEREAS, the Parties wish to change thecommission rate to be paid to DePuy AcroMed on the sales of Products to reflectthe decrease in the obligations of DePuy AcroMed under the Agreement.

 

NOW, THEREFORE, in consideration of theforegoing premises and the following mutual covenants, the adequacy andsufficiency of which are hereby acknowledged, the parties hereby agree asfollows:

 

1.                                       Capitalizedterms used herein without definition shall have the meanings set forth in theAgreement.

 

2.                                       Section 5.2of the Agreement is hereby amended by adding the following language after thefirst sentence:

 

In addition, from and after January 1,2004, OrthoLogic will be responsible for obtaining the necessary supportingdocuments for billing as provided in Section 8.1 hereof.

 

3.                                       The firstsentence of Section 5.6 of the Agreement is amended and restated to readin its entirety as follows:

 

OrthoLogic shall maintain adequate andcompetent personnel to manufacture, store and deliver, obtain supportingdocuments as provided in Section 8.1 hereof, perform patient fitting, andprepare invoices and any other manufacturer-generated materials necessary toenable OrthoLogic to

 

----

 

invoice purchasers and third-party payers inconnection with the sale of Products, and such manufacture, storage, sales,collection of supporting documents, delivery, patient fitting and invoicesshall be undertaken and effected in a manner that does not violate anyapplicable federal, state or foreign laws and regulations, and otherwise, in amanner that is in accordance with the provisions of OrthoLogic’s CorporateCompliance Program.

 

4.                                       The firstsentence of Section 6.9 of the Agreement is hereby amended and restated,effective January 1, 2004, to read in its entirety as follows:

 

DePuy AcroMed or its employees andDistributors shall provide from the treating physician or direct the treatingphysician or the physician’s staff to provide directly to OrthoLogic a writtenprescription order form for the purchase of the Products.

 

5.                                       Section 8.1of the Agreement is hereby amended and restated, effective January 1,2004, to read in its entirety as follows:

 

OrthoLogic shall be responsible forprocessing all U.S. orders for Products once a valid prescription order form isobtained from a physician by DePuy AcroMed. This processing by OrthoLogic includes commercially reasonable effortsto obtain all necessary supporting documents, the prior authorization of theprescription with the patient’s insurance company and the generation of anyadditional paperwork required to process the prescription for payment.

 

In addition, there is added at the end of Section 8.1 thefollowing language:

 

It is understood that from time to timeOrthoLogic may elect to employ one or more independent contractors to performportions of its obligations under this Agreement as deemed appropriate byOrthoLogic, including any required follow up with prescribing physicians toobtain supporting documents, and that such independent contractors shall beacting solely on behalf of OrthoLogic when obtaining such supporting documentseven though such independent contractors may be persons or entities with whichor whom DePuy also has an independent contractor relationship, includingDistributors.

 

6.                                       Section 12.2of the Agreement is hereby amended and restated to read in its entirety asfollows:

 

Subject to the last sentence of thisSection 12.2 and to Section 12.2.1, OrthoLogic will pay to DePuyAcroMed the commissions at the rates set forth below on sales of Productsduring the indicated periods:

 

2

----

 
| **Period**                                                              |   | **Commission, as a  percentage of Net Sales  Price, for all sales up to  and including the  applicable annual Sales  Quota** |   | **Commission, as a  percentage of Net Sales  Price, for all sales during a  year in excess of the  applicable annual Sales  Quota** |
|-------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------|
| Effective date of this Amendment No. 3  through September 30, 2003 |   | ***%                                                                                                                         |   | ***%                                                                                                                                |
| October 1, 2003 through  December 31, 2003                    |   | ***%                                                                                                                         |   | ***%                                                                                                                                |
| From and after January 1, 2004                                     |   | ***%                                                                                                                         |   | ***%                                                                                                                                |

 

***.

 

Section 12.2.1 shall remain in effect without change.

 

7.                                       Section 14.1of the Agreement is amended by deleting “or” after clause (f) and by adding thefollowing language to the end of the Section:

 

; or (h) to the extent arising from theaction of any independent contractor of OrthoLogic, who or which also is anindependent contractor of DePuy AcroMed, in the course of performing serviceson behalf of OrthoLogic in connection with this Agreement, provided that theindemnity in this clause (h) shall not apply to any Damages arising from anyaction or inaction of an independent contractor of DePuy AcroMed in the courseof performing services on behalf of DePuy AcroMed or pursuant to any agreementwith DePuy AcroMed.

 

8.                                       Section  20.3of the Agreement is amended by deleting the notice copy address forOrthoLogic’s counsel and adding the following language:

 
| with a copy to: |   | Quarles & Brady LLP             |
|-----------------|--------|-------------------------------------|
|            |   | Two North Central Avenue            |
|            |   | Phoenix, Arizona 85004              |
|            |   | Attention:   Steven P. Emerick |
|            |   | Facsimile No.  602-417-2980    |

 

----

***Certain information on thispage has been filed separately with the Securities and ExchangeCommission.  Confidential treatment hasbeen requested with respect to the omitted portions.

 

3

----

 

9.                                       Except asamended hereby, all provisions and terms of the Agreement shall remain in fullforce and effect.

 
| ORTHOLOGIC CORP. | DEPUY ACROMED, INC.   |
|------------------|-----------------------|
|             |                  |
| Name:            | (signature illegible) |   | Name: | (signature illegible) |   |
|             |                  |
| Title:           | Senior Vice President |   | Title: | VP, Sales |   |
|             |                  |
| Date:            | 9/15/03               |   | Date: | 9/16/03 |   |
|                  |                       |  |  |  |  |  |  |  |  |  |  |

 

4

----