**Exhibit 10.1****INDEMNIFICATION AGREEMENT**     This Indemnification Agreement (the “Agreement”), which shall be effective as of April 15,2005, is by and between OrthoLogic Corp., a Delaware corporation (the “Company”), and James M.Pusey (the “Indemnitee”).**RECITALS**     A. Management of the Company believes that it is essential for the Company to be able toretain 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 claimsbeing asserted against directors and officers, and former directors and officers, of publiccompanies in today’s environment.     D. In recognition of Indemnitee’s need for substantial protection against personal liabilityin order to enhance Indemnitee’s continued service to the Company in an effective manner and inpart to provide Indemnitee with specific contractual assurance that the indemnification protectionprovided by the Certificate of Incorporation and Bylaws of the Company will be available toIndemnitee (regardless of, among other things, any amendment to or revocation of such Certificateof Incorporation and Bylaws or any change in the composition of the Company’s Board of Directors orany acquisition transaction relating to the Company), and in order to induce Indemnitee to continueto provide services to the Company, the Company wishes to provide in this Agreement for theindemnification of and the advancing of expenses to Indemnitee to the fullest extent (whetherpartial or complete) permitted by law and as set forth in this Agreement, and, to the extentinsurance 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 suchterm is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), otherthan a trustee or other fiduciary holding securities under an employee benefit plan of the Companyor a corporation owned directly or indirectly by the stockholders of the Company in substantiallythe same proportions as their ownership of stock of the Company, is or becomes the “beneficialowner” (as defined in Rule 13d-3 under said Act), directly or indirectly of securities of theCompany representing 20% or more of the total voting power represented by the Company’s thenoutstanding Voting Securities, or (ii) during any period of two consecutive years, individuals whoat the beginning of such period constitute the Board of Directors of the Company and any newdirector 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) ofthe directors then still in office who either were directors at the beginning of the period orwhose election or nomination for election was previously so approved, cease for any reason toconstitute a majority thereof, or (iii) the stockholders of the Company approve a merger orconsolidation of the Company with any other corporation, other than a merger or consolidation whichwould result in the Voting Securities of the Company outstanding immediately prior theretocontinuing to represent (either by remaining outstanding or by being converted into VotingSecurities of the surviving entity) at least 80% of the total voting power represented by theVoting Securities of the Company or such surviving entity outstanding immediately after such mergeror consolidation, or the stockholders of the Company approve a plan of complete liquidation of theCompany or an agreement for the sale or disposition by the Company (in one transaction or a seriesof transactions) of all or substantially all the Company’s assets.          (b) Claim: any threatened, pending or completed action, suit, proceeding or alternatedispute resolution mechanism, or any inquiry, hearing or investigation, whether conducted by theCompany or any other party, that Indemnitee in good faith believes might lead to the institution ofany 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 ofexperts, transcript costs, filing fees, witness fees, telephone charges, postage, delivery servicefees, expenses and obligations of any nature whatsoever paid or incurred in connection withinvestigating, defending, being a witness in or participating in (including on appeal), orpreparing to defend, be a witness in or participate in any Claim relating to any IndemnifiableEvent.          (d) Indemnifiable Event: any event or occurrence that takes place either prior to orafter 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 theCompany 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 ofanything done or not done by Indemnitee in any such capacity.          (e) Potential Change in Control: shall be deemed to have occurred if (i) the Companyenters into an agreement or arrangement, the consummation of which would result in the occurrenceof a Change in Control; (ii) any person (including the Company) publicly announces an intention totake 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 benefitplan of the Company acting in such capacity or a corporation owned, directly or indirectly, by thestockholders of the Company in substantially the same proportions as their ownership of stock ofthe Company, who is or becomes the beneficial owner, directly or indirectly, of securities of theCompany representing 10% or more of the combined voting power of the Company’s then outstandingVoting Securities, increases his beneficial ownership of such securities by 5% or more over thepercentage so owned by such person on the date hereof; or (iv) the Board adopts a resolution to theeffect 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 membersof the Company’s Board of Directors or any other person or body appointed by the Board who is not aparty to the particular Claim for which Indemnitee is seeking indemnification, or Independent LegalCounsel.          (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 otherwiseperformed services for the Company or Indemnitee within the last five years (other than inconnection with seeking indemnification under this Agreement). Independent Legal Counsel shall notbe any person who, under the applicable standards of professional conduct then prevailing, wouldhave a conflict of interest in representing either the Company or Indemnitee in an action todetermine Indemnitee’s rights under this Agreement, nor shall Independent Legal Counsel be anyperson who has been sanctioned or censured for ethical violations of applicable standards ofprofessional conduct.          (h) Voting Securities: any securities of the Company which vote generally in theelection of directors.     2. Basic Indemnification Arrangement.          (a) If Indemnitee was, is or becomes a party to or witness or other participant in, or isthreatened to be made a party to or witness or other participant in, a Claim by reasons of (orarising in part from) an Indemnifiable Event, the Company shall indemnify Indemnitee to the fullestextent permitted by law as soon as practicable but in any event no later than thirty days afterwritten 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 chargespaid or payable in connection with or in respect of such Expenses, judgments, fines, penalties oramounts paid in settlement) of such Claim and any federal, state, local or foreign taxes imposed onthe 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 byIndemnitee, the Company shall advance (within five business days of such request) any and allExpenses to Indemnitee (an “Expense Advance”). Notwithstanding anything in this Agreement to thecontrary and except as provided in Section 5, prior to a Change in Control, Indemnitee shall not beentitled to indemnification pursuant to this Agreement in connection with any Claim initiated byIndemnitee against the Company or any director or officer of the Company unless the Company hasjoined in or consented to the initiation of such Claim.          (b) Notwithstanding the foregoing, (i) the obligations of the Company under Section 2(a) shallbe subject to the condition that the Reviewing Party shall not have determined (in a writtenopinion, in any case in which the Independent Legal Counsel referred to in Section 3 hereof isinvolved) 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 subjectto the condition that, if, when and to the extent that the Reviewing Party determines thatIndemnitee would not be permitted to be so indemnified under applicable law, the Company shall beentitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all suchamounts theretofore paid; provided, however, that if Indemnitee has commenced legal proceedings ina 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 ReviewingParty that Indemnitee would not be permitted to be indemnified under applicable law shall not bebinding and Indemnitee shall not be required to reimburse the Company for any Expense Advance untila final judicial determination is made with respect thereto (as to which all rights of appealtherefrom have been exhausted or lapsed). Indemnitee’s obligation to reimburse the Company forExpense Advances shall be unsecured and no interest shall be charged thereon. If there has notbeen a Change in Control, the Reviewing Party shall be selected by the Board of Directors, and ifthere has been such a Change in Control, (other than a Change in Control which has been approved bya majority of the Company’s Board of Directors who were directors immediately prior to such Changein Control) the Reviewing Party shall be the Independent Legal Counsel referred to in Section 3hereof. If there has been no determination by the Reviewing Party or if the Reviewing Partydetermines that Indemnitee substantively would not be permitted to be indemnified in whole or inpart under applicable law, Indemnitee shall have the right to commence litigation in any court inthe States of Arizona or Delaware having subject matter jurisdiction thereof and in which venue isproper seeking an initial determination by the court or challenging any such determination by theReviewing Party or any aspect thereof, or the legal or factual bases therefor and the Companyhereby consents to service of process and to appear in any such proceeding. Any determination bythe 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 theCompany (other than a Change in Control which has been approved by a majority of the Company’sBoard of Directors who were directors immediately prior to such Change in Control) then IndependentLegal Counsel shall be selected by Indemnitee and approved by the Company (which approval shall notbe unreasonably withheld) and such Independent Legal Counsel shall determine whether the officer ordirector is entitled to indemnity payments and Expense Advances under this Agreement or any otheragreement or Certificate of Incorporation or Bylaws of the Company now or hereafter in effectrelating 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 theIndemnitee will be permitted to be indemnified. The Company agrees to pay the reasonable fees ofthe Independent Legal Counsel and to indemnify fully such Independent Legal Counsel against any andall expenses (including attorneys’ fees), claims, liabilities and damages arising from or relatingto 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 Companyshall, upon written request by Indemnitee, create a trust for the benefit of Indemnitee and fromtime to time upon written request of Indemnitee shall fund such trust in an amount sufficient tosatisfy any and all Expenses reasonably anticipated at the time of each such request to be incurredin connection with investigating, preparing for and defending any Claim relating to anIndemnifiable Event, and any and all judgments, fines, penalties and settlement amounts of any andall 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 trustpursuant to the foregoing funding obligation shall be determined by the Reviewing Party, in anycase in which the Independent Legal Counsel referred to above is involved. The terms of the trustshall provide that upon a Change in Control (i) the trust shall not be revoked or the principalthereof invaded, without the written consent of Indemnitee, (ii) the trustee shall advance, within
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five business days of a request by Indemnitee, any and all Expenses to Indemnitee (andIndemnitee hereby agrees to reimburse the trust under the circumstances under which Indemniteewould be required to reimburse the Company under Section 2(b) of this Agreement), (iii) the trustshall continue to be funded by the Company in accordance with the funding obligation set forthabove, (iv) the trustee shall promptly pay to Indemnitee all amounts for which Indemnitee shall beentitled to indemnification pursuant to this Agreement or otherwise, and (v) all unexpended fundsin such trust shall revert to the Company upon a final determination by the Reviewing Party or acourt of competent jurisdiction, as the case may be, that Indemnitee has been fully indemnifiedunder the terms of this Agreement. The trustee shall be chosen by Indemnitee. Nothing in thisSection 4 shall relieve the Company of any of its obligations under this Agreement. All incomeearned 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 Indemniteeagainst 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 incurredby Indemnitee in connection with any claim asserted against or in connection with any actionbrought by Indemnitee for (i) indemnification or advance payment of Expenses by the Company underthis Agreement or any other agreement or Certificate of Incorporation or Bylaws of the Company nowor hereafter in effect relating to Claims for Indemnifiable Events and/or (ii) recovery under anydirectors’ and officers’ liability insurance policies maintained by the Company, regardless ofwhether Indemnitee ultimately is determined to be entitled to such indemnification, advance expensepayment or insurance recovery, as the case may be.     6. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of thisAgreement 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 amountthereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to whichIndemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to theextent that Indemnitee has been successful on the merits or otherwise in defense of any or allClaims relating in whole or in part to an Indemnifiable Event or in defense of any issue or mattertherein, including dismissal without prejudice, Indemnitee shall be indemnified against allExpenses incurred in connection therewith.     7. Defense to Indemnification, Burden of Proof and Presumptions. It shall be adefense 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 Claimrelating to an Indemnifiable Event in advance of its final disposition where the requiredundertaking has been tendered to the Company) that the Indemnitee has not met the standards ofconduct that make it permissible under the Delaware General Corporation Law for the Company toindemnify the Indemnitee for the amount claimed. In connection with any determination by theReviewing 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 adetermination prior to the commencement of such action by the Indemnitee that indemnification ofthe claimant is proper under the circumstances because he or she has met the
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applicable standard of conduct set forth in the Delaware General Corporation Law, nor anactual 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 bea defense to the action or create a presumption that the Indemnitee has not met the applicablestandard of conduct. For purposes of this Agreement, the termination of any claim, action, suit orproceeding, 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 thatIndemnitee did not meet any particular standard of conduct or have any particular belief or that acourt has determined that indemnification is not permitted by applicable law.     8. Non-exclusivity, Etc. The rights of Indemnitee hereunder shall be in addition toany other rights Indemnitee may have under the Certificate of Incorporation or Bylaws of theCompany or the Delaware General Corporation Law or otherwise. To the extent that a change in theDelaware General Corporation Law (whether by statute or judicial decision) permits greaterindemnification by agreement than would be afforded currently under the Certificate ofIncorporation and Bylaws of the Company and this Agreement, it is the intent of the parties heretothat Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.     9. No Construction as Employment Agreement. Nothing contained herein shall beconstrued as giving Indemnitee any right to be retained in the employ of the Company or any of itssubsidiaries or to remain as an officer of the Company.     10. Liability Insurance. To the extent the Company maintains an insurance policy orpolicies providing directors’ and officers’ liability insurance, Indemnitee shall be covered bysuch policy or policies, in accordance with its or their terms, to the maximum extent of thecoverage available for any Company director or officer.     11. Period of Limitations. No legal action shall be brought and no cause of actionshall be asserted by or in the right of the Company or any affiliate of the Company againstIndemnitee, Indemnitee’s spouse, heirs, executors, administrators or personal or legalrepresentatives 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 deemedreleased 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 suchcause of action such shorter period shall govern.     12. Amendments, Etc. No supplement, modification or amendment of this Agreement shallbe binding unless executed in writing by both of the parties hereto. No waiver of any of theprovisions of this Agreement shall be deemed or shall constitute a waiver of any other provisionshereof (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 besubrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shallexecute all papers required and shall do everything that may be necessary to secure such
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rights, including the execution of such documents necessary to enable the Company effectivelyto bring suit to enforce such rights.     14. No Duplication of Payments. The Company shall not be liable under this Agreementto make any payment in connection with any claim made against Indemnitee to the extent Indemniteehas otherwise actually received payment (under any insurance policy, Certificate of Incorporationor 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 thebenefit 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 allor substantially all of the business and/or assets of the Company, spouses, heirs, and personal andlegal representatives. The Company shall require and cause any successor (whether direct orindirect by purchase, merger, consolidation or otherwise) to all, substantially all, or asubstantial part, of the business and/or assets of the Company, by written agreement in form andsubstance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement inthe same manner and to the same extent that the Company would be required to perform if no suchsuccession had taken place. This Agreement shall continue in effect regardless of whetherIndemnitee continues to serve as a director and/or officer of the Company or of any otherenterprise at the Company’s request.     16. Severability. The provisions of this Agreement shall be severable if any of theprovisions hereof (including any provision within a single section, paragraph or sentence) are heldby a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and theremaining 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 otherwiseunenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to giveeffect 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 inaccordance with the laws of the State of Delaware applicable to contracts made and to be performedin 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 ofthe 15th day of April, 2005.      **ORTHOLOGIC CORP.**