GENERAL COMPLIANCE POLICY & PROCEDURE

Department: All Departments General Policy: 001

Subject: Code of Ethics Product: All Product Lines HCPCS: N/A
Original Date: August 28, 1998
Change Order: C010332 Rev A CO Approval Date: October 3, 2001
C020235 Rev B CO Approval Date: November 1, 2002
C040002 Rev C CO Approval Date: March 8, 2004
C040006 Rev D CO Approval Date: May 4, 2004

CODE OF ETHICS

I. INTRODUCTION

OrthoLogic Corp. (“the Company”) is committed to conducting its business

lawfully and ethically. As the Company’s reputation is the sum of the reputations
of its employees, management and directors, it is critically important that they
meet the highest standards of legal and ethical conduct. To protect the
Company’s reputation and to assure uniformity in standards of conduct, this Code
of Ethics has been established as part of its Corporate Compliance Program.

This Code of Ethics establishes the general guidelines with which all the
Company employees and directors must comply to ensure that their conduct
conforms to the highest ethical standards and is in accordance with all applicable
laws, rules and regulations. In addition, portions of the Code of Ethics apply only
to the Chief Executive Officer, Chief Financial Officer and Controller. These
general guidelines are not meant to cover all situations. Any doubts whatsoever as
to the propriety of a particular situation, whether or not the situation is described
within this Code of Ethics, should be submitted either to an immediate supervisor
or to the Corporate Compliance Committee. The intent of the Corporate
Compliance Program is to safeguard the Company’s tradition of strong moral,
ethical and legal standards of conduct.

Every employee and director of the Company is required to understand and

comply fully with both the rules and approval procedures established by this Code
of Ethics. The standards of conduct that govern the Company’s relationship with
the government are applicable to all company representatives, whether or not the
person is directly engaged in performing activities relevant to any federal, state or
private contracts. Decisions regarding requests for interpretation of or exception
to this Code of Ethics may be made only by the Board of Directors with the
guidance of the Compliance Officer. Any employee violating the provisions of
this Code of Ethics will be subject to disciplinary action, up to and including

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 discharge from employment. Any director violating the Code of Ethics will be
subject to review by the Board of Directors. To the extent that any additional
policies are developed as part of the Corporate Compliance Program, those
policies should be consistent with this Code of Ethics. In case of any
inconsistency, this Code of Ethics shall govern.

II. COMPLIANCE WITH ALL LAWS AND REGULATIONS

All of the Company’s employees and directors must scrupulously comply with all
federal, state and local laws and government regulations. Any actual or perceived
violation of this Code of Ethics, the Corporate Compliance Program or any other
the Company policy must immediately be reported to the Company’s Compliance
Officer, on behalf of the Board of Directors.

III. DEALING HONESTLY WITH CUSTOMERS, OTHER SUPPLIERS AND

CONSULTANTS

A. Quality of Service

The Company is committed to providing products and services that meet

all contractual obligations and quality standards.

B. Contract Negotiation

The Company has an affirmative duty to disclose current, accurate and

complete cost and pricing data where such data are required under
appropriate federal or state law or regulation. Individuals involved in the
pricing of contract proposals or the negotiation of a contract must ensure
the accuracy, completeness and currency of all information and
representations made to customers, both government and commercial. A
representation, quotation, statement or certification that is false,
incomplete or misleading that is submitted to a federal government
customer, can result in civil and/or criminal liability for the Company, the
involved employee and any supervisors who condone such a practice.

C. Competitive Analysis

In conducting market analyses, the Company’s representatives should not

accept or use information known to be proprietary to a competitor.
Supervisors must ensure that a competitor’s proprietary information is not
improperly obtained or used in any improper fashion.

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 D. Antitrust Issues

Antitrust laws apply to all commercial and federal domestic (and some
foreign) transactions by the Company. The laws are designed to ensure
that competition exists and to preserve the free enterprise system. As this
is a highly complex area, and this policy cannot cover all situations in
which antitrust laws may apply, individuals promptly refer any questions
to the Compliance Officer, who will consult legal counsel as required.
Antitrust issues that may be encountered are in the areas of pricing,
boycotts and trade association activity.

Examples of actions that violate the antitrust laws and that must not be
engaged in under any circumstances include entering into or negotiating
an agreement with one or more competitors to: (a) fix prices at any level
or to fix other terms of service; (b) allocate customers or markets; or (c)
boycott a supplier or customer. In addition, individuals must refrain from
engaging in unfair practices that might restrict competition. For example,
do not discuss pricing schemes or market divisions with competitors to
avoid implicating these prohibitions. In addition, refrain from reciprocal
agreements and do not require purchasers to buy from the Company under
any kind of coercion, express or implied.

E. Anti-kickback and False Claims Issues

Federal and state laws prohibit the Company, its employees and directors
from offering or accepting any form of remuneration, including a
kickback, bribe or rebate, to an entity or person to induce that customer or
potential customer (including physicians, hospitals or other
provider/suppliers) to purchase services from or to refer a patient to the
Company. In addition, there are laws that prohibit the filing of false and
fraudulent claims to both governmental and private third-party payors.

Examples of the types of actions that could violate the federal Anti-
kickback Statute (the “Anti-kickback Statute”) and similar state anti-
kickback laws include the following:

1) Offering or paying anything of value to induce someone to refer a

patient to the Company;

2) Offering or paying anything of value to induce someone to purchase

items or services from the Company;

3) Soliciting or receiving anything of value for the referral of the

Company patients; or

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 4) Offering free goods to induce the person or entity to purchase or order
any items or services from the Company.

F. Providing Business Courtesies to Customers or Sources of Customers

The Company’s success in the marketplace results from providing

proprietary and innovative technologies with outstanding customer
support services. The Company does not seek to gain an improper
advantage by offering business courtesies such as entertainment, meals,
transportation or lodging to potential referral sources or purchasers of any
items or services furnished by the Company. In light of the Anti-kickback
Statute and other federal and state laws, employees should never offer any
type of business courtesy to a referral source or purchaser for the purpose
of obtaining favorable treatment or advantage or to induce such person or
entity to purchase or order any items or service from the Company

To avoid even the appearance of impropriety, representatives of the

Company must not provide any referral source or purchaser with any gifts,
meals, or promotional items that have more than a nominal value of
greater than $50 without the express approval of the Company’s
Compliance Officer. An employee may provide or pay travel or lodging
expenses of a customer or potential referral service only with the advance
approval of the corporate officer responsible for its unit or group, or a
designee, and the additional approval of the Compliance Officer.

G. Government Health Care Program Agreements

On a regular basis, the Company is a party to numerous agreements with

governmental health care programs such as the Medicare or Medicaid
programs. It is essential that all employees are knowledgeable of, and
comply with, all of the applicable laws, rules and regulations of all such
governmental agencies. Billing Personnel also must comply with the
Company’s Corporate Policy on Reimbursement and Billing Policies and
Procedures. Anyone who may have a concern or a question concerning
compliance with any governmental contract or subcontract should contact
their supervisor or the Compliance Officer.

The Company representatives also may not provide or pay for any meal,
refreshment, entertainment, travel or lodging expenses for government
employees without the prior approval of the Compliance Officer. State,
local and foreign governmental bodies may also have restrictions on the
provision of business courtesies, including meals and refreshments. The
Company’s representatives doing business with such governmental bodies
are expected to know and respect all such restrictions.
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IV. AVOIDING ABUSES OF TRUST

The Company expects its employees and directors to avoid engaging in any
activity that might interfere or appear to interfere with the independent exercise of
the person’s judgment in situations where the individual’s personal interests might
detract from or conflict with the Company’s best interest or the interests of the
Company’s customers or suppliers.

A. Conflict of Interest

No representative of the Company may have any employment, consulting

or other business relationship with a competitor, customer or supplier, or
invest in any competitor, customer or supplier (except for moderate
holdings of publicly traded securities) unless advance written permission
is granted by the Compliance Officer on behalf of the Board of Directors.
Advance written permission of the Compliance Officer, on behalf of the
Board of Directors, also is required before an individual may invest in any
privately held company or entity that performs services for the Company
or that employs providers who may refer patients to the Company. In
addition, directors and executive level employees must obtain waivers and
written permission directly from the Board of Directors.

B. Acceptance of Business Courtesies

Never accept anything of value from someone doing business with the
Company or someone whose services are subject to the Company’s review
if the gratuity is offered or appears to be offered in exchange for any type
of favorable treatment or advantage. To avoid even the appearance of
impropriety, do not accept any gifts or promotional items of more than
nominal value. Gifts received which are valued in excess of $50 must be
reported to the Compliance Officer. A representative may accept meals,
drinks or entertainment only if such courtesies are unsolicited,
infrequently provided and reasonable in amount. Such courtesies must
also be directly connected with business discussions, unless an exception
is approved by a supervisor. Do not accept reimbursement for lodging or
travel expenses or free lodging or travel without the express written
approval of the corporate officer responsible for the unit or group.

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 C. Government Proprietary and Source Selection Information

The Company does not solicit nor will it receive any sensitive proprietary
internal government information, including budgetary, program or source
selection information, before it is available through normal processes.

V. REPORT TO BOARD OF DIRECTORS

At least annually, the Corporate Compliance Officer shall report to the

Company’s Board of Directors concerning: (1) the Company’s adherence to the
standards of legal and ethical conduct contained in the Code of Ethics; and (2) the
Compliance Program, generally.

VI. REPORTING VIOLATIONS AND DISCIPLINE

Strict adherence to this Code of Ethics is vital. Supervisors are responsible for
ensuring that employees are aware of and adhere to the provisions of the Code of
Ethics. For clarification or guidance on any point in the Code of Ethics, please
consult the Compliance Officer.

Employees are expected to report any suspected violations of the Code of Ethics
or other irregularities to their supervisor or the Compliance Office within five (5)
working days. All reports must contain sufficient information for the Compliance
Officer to investigate the concerns raised. No adverse action or retribution of any
kind will be taken by the Company against an employee because he or she reports
a suspected violation of this Code of Ethics or other irregularity by any person.
The Company will attempt to treat such reports confidentially.

Upon receipt of credible reports of suspected violations or irregularities, the

Compliance Officer shall immediately begin a detailed investigation and take
corrective action where appropriate. Violations of the Code of Ethics may result
in discipline ranging from warnings and reprimand to discharge or, where
appropriate the filing of a civil or criminal complaint. Disciplinary decisions will
be made by operating management in accordance with the Company’s Corrective
Action Plan, and is subject to review by the Compliance Officer or designee.
Employees will be informed of the charges against them and will be given the
opportunity to state their position before disciplinary action is imposed.

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VII. LIMITATION ON EFFECT OF CODE OF ETHICS

Nothing contained in this code of Ethics is to be construed or interpreted to create

a contract of employment, either express or implied, nor is anything contained in
this Code of Ethics intended to alter a person’s status of employment with the
Company to anything but an “employment-at-will” relationship.

VIII. RESERVATION OF RIGHTS

The Company reserves the right to amend the Code of Ethics, in whole or in part,
at any time and solely at its discretion.

IX. SECTIONS OF THE CODE OF ETHICS THAT APPLY ONLY TO

SENIOR OFFICERS.

A. Introduction.

These sections of the OrthoLogic Code of Ethics apply only to the Chief
Executive Officer, Chief Financial Officer and Controller, if any, and have been
adopted to promote honest and ethical conduct, proper disclosure of financial
information in the Company’s periodic Securities and Exchange Commission
reports, and compliance with applicable laws, rules, and regulations by the
Company’s senior officers who have financial responsibilities.

B. Applicability.

As used in this section of the Code of Ethics, the term “senior officer”
means Orthologic’s Chief Executive Officer, Chief Financial Officer and
Controller, if any.

C. Principles and Practices.

In performing his or her duties, each of the senior officers must:

1. maintain high standards of honest and ethical conduct and avoid any
actual or apparent conflict of interest as defined in Orthologic’s Code of
Ethics section IV(A);

2. report to the Audit Committee of the Board of Directors any conflict of

interest that may arise and any material transaction or relationship that
reasonably could be expected to give rise to a conflict;

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 3. provide, or cause to be provided, full, fair, accurate, timely, and
understandable disclosure in reports and documents that Orthologic files
with or submits to the Securities and Exchange Commission and in other
public communications;

4. comply and take all reasonable actions to cause others to comply with
applicable governmental laws, rules, and regulations; and

5. promptly report violations of those sections of the Code of Conduct

which apply only to senior officers to the Audit Committee.

Senior officers must also comply with the rest of the Code of Ethics
generally.

D. Waiver.

Any request for a waiver of any provision of these sections of the Code of
Ethics applying only to senior officers must be in writing and addressed to the
Audit Committee. Any waiver of these sections of the Code of Ethics will be
disclosed promptly to the public by means approved by the Securities and
Exchange Commission.

E. Compliance and Accountability.

The Audit Committee will assess compliance with this Code, report material
violations to the Board of Directors, and recommend to the Board appropriate
action.

F. List of Exhibits:

A. Statement of Understanding of and Compliance with the

Company’s Code of Ethics and Compliance Program

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STATEMENT OF UNDERSTANDING OF AND COMPLIANCE
WITH THE COMPANY’S CODE OF ETHICS AND COMPLIANCE
PROGRAM

I certify that I have received, read and understand the Company Code of Ethics and the
Corporate Compliance Program. I acknowledge my commitment and responsibility to
follow the standards, policies and procedures discussed in the Company Code of Ethics
and the Corporate Compliance Program when I am involved in activities on the
Company’s behalf.

I also acknowledge my personal responsibility to seek guidance when I have questions or

need further clarification, and to report any alleged or suspected violation of any laws,
regulations, the Company Code of Ethics or the Corporate Compliance Program to my
supervisor or the Compliance Officer.

I understand that any violation of any laws, regulations, the Company Code of Ethics, the
Corporate Compliance Program or any other corporate compliance policy or procedure
including, but not limited to, my failure to report any alleged or suspected violations of
such policies is grounds for disciplinary action, up to and including discharge from my
employment with the Company.

I also certify that I have not been convicted of, or charged with, a criminal offense related
to health care nor have I been listed by a federal agency as debarred, excluded or
otherwise ineligible for participation in federally funded health care programs.

Signature Date

Print/Type Name

Position

Please return this form to the Corporate Compliance Office.

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