AMENDMENT TO MARKETING AND DISTRIBUTION AGREEMENT

           The effective date of this Amendment will be July 12, 2000.

For good and valuable  consideration,  the receipt and  sufficiency  of which is
hereby  acknowledged  and confessed,  the parties to that certain  Marketing and
Distribution  Agreement,  effective  date December 31, 1997,  and its associated
extensions  and  amendments  (hereinafter  collectively  called the  Agreement),
between the ORTHOLOGIC  CORP.  (OrthoLogic)  and CHRYSALIS  BIOTECHNOLOGY,  INC.
(Chrysalis),  hereby  agree to amend the  Agreement in the  following  respects,
to-wit.

WHEREAS,  it is the desire of  OrthoLogic  and Chrysalis to expand the territory
for OrthoLogic  marketing and distribution of Chrysalin(TM) for fracture healing
to worldwide and to license worldwide  marketing and distribution rights for use
of Chrysalin(TM) in other orthopedic hard tissue applications, and

WHEREAS,  it is the desire of Chrysalis to grant and of OrthoLogic to acquire an
Option to license  orthopedic soft tissue  applications for worldwide  marketing
and distribution,

NOW  THEREFORE,  the parties hereby agree to amend the Agreement as follows with
reference to specific numbered items within the Agreement:

                            I. BACKGROUND AND PARTIES

1.1     CHRYSALIS.  Chrysalis  BioTechnology,  Inc.  ("CHRYSALIS") is a Delaware
        corporation,  having a principal place of business at 2200 Market, Suite
        600, Galveston, Texas 77550.

1.2     ORTHOLOGIC.  OrthoLogic Corp.  ("ORTHOLOGIC") is a Delaware corporation,
        having a principal  place of business  at 1275 West  Washington  Street,
        Tempe, Arizona 85281.

PARAGRAPH  2.7 OF THE  AGREEMENT  IS HEREBY  REPLACED  WITH THE  FOLLOWING:

                           II. ADDITIONAL DEFINITIONS

2.7     "FIELD OF USE"  shall  mean the use of the  Technology  Rights in one or
        more of the indications described in paragraphs  2.7.1-2.7.3 below under
        the terms and conditions of this Amendment.

2.7.1   "ORTHOPEDIC  FRACTURE  INDICATION"  shall be limited to the human use of
        the  Technology  Rights in  connection  with the treatment of fractures.

2.7.2   "ORTHOPEDIC HARD TISSUE  INDICATIONS"  shall be limited to the human use
        of the Technology Rights in connection with repair, grafting, or filling

************Text has been omitted pursuant to a confidentiality request. Omitted
text has been filed with the Securities & Exchange Commission.

                                                                          Page 1
<PAGE>
        of gaps in bone  that  may  result  from  trauma,  non-unions,  surgical
        removal of bone, or need to fuse two or more bone segments.  Thus, these
        indications  will include  treatment of segmental bone defects and spine
        fusion.  Excluded uses of the Technology Rights shall include, but shall
        not be limited to, dental and oral applications.

2.7.3   "ORTHOPEDIC SOFT TISSUE  INDICATIONS"  shall be limited to the human use
        of the  Technology  Rights in  connection  with  treatment and repair of
        damage  to  meniscus,  cartilage,  tendons  and  ligaments,  coating  or
        preparation  of  bone or  joint  implants,  and to  treatment  aimed  to
        directly affect disk repair.

PARAGRAPHS 2.11 AND 2.12 ARE ADDED AS FOLLOWS:

2.11    "TERRITORY"  Worldwide for (1) currently  licensed  Orthopedic  Fracture
        Indications,  (2) Orthopedic Hard Tissue Indications, and (3) Orthopedic
        Soft Tissue  Indications.  OrthoLogic's right to market products outside
        of the United  States  ("International  Rights") is based on  OrthoLogic
        meeting  the  following  conditions.   Failure  to  meet  the  following
        conditions would lead to forfeiture of all International  Rights for all
        applications within the Field of Use.

2.11.1. OrthoLogic  shall elect a  "Marketing  Partner"  based on the  Marketing
        Partner's qualifications, to include significant international marketing
        and sales  capability to orthopedic  products along with the ability and
        resources to rapidly initiate clinical trials in Europe and Asia.

2.11.2. ************

2.12    "RIGHTS"shall  mean the rights described in paragraphs  2.12.1 to 3.12.3
        below.

2.12.1  "RIGHT TO MARKET AND  DISTRIBUTE"  OrthoLogic and its Marketing  Partner
        shall have the Right to Market and Distribute  products within the Field
        of Use in the Licensed  Territory.  2.12.2 "RIGHT TO LIMITED END-PRODUCT
        MANUFACTURE"  OrthoLogic and its Marketing  Partner shall have the Right
        to undertake Limited End-product Manufacturing as per the Agreement, but
        not  the  right  to  manufacture  Chrysalis  peptides  (except  for  the
        allowances  in Section  IX).  2.12.3  "RIGHT TO  DISTRIBUTE  THROUGH 3RD
        PARTIES"  OrthoLogic or their Marketing  Partner shall have the right to
        distribute  products  for use in Field of Use in the  Territory  through
        third party distributors subject to the terms of 2.11. As per Agreement,
        all  sales  and   distributions  by  Marketing   Partner  or  3rd  Party
        distributors  will be treated for royalty  purposes as if they were sold
        directly by OrthoLogic.

          PARAGRAPH IV OF THE AGREEMENT IS HEREBY MODIFIED AS FOLLOWS:

************Text has been omitted pursuant to a confidentiality request. Omitted
text has been filed with the Securities & Exchange Commission.

                                                                          Page 2
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                         IV. OPTION GRANTS AND PAYMENTS

(e)(i-iii)-Unchanged.

(e)(iv) Within 3 days of the Effective Date of this  Agreement,  OrthoLogic will
pay $2 million by direct wire transfer to Chrysalis for the exclusive  Rights to
Chrysalin(TM)  for  Orthopedic  Hard Tissue  Indications  within the  Territory,
subject to the  conditions  in  Sections  2.11.1  and 2.11.2 and  payment of the
milestone payments herein.

(e)(v) Upon execution of this Amendment,  OrthoLogic will initiate an aggressive
development  program for  Chrysalin(TM) use in segmental bone defect filling and
spine fusion  indications in  collaboration  with  Chrysalis.  OrthoLogic  shall
pursue the following  milestones with Reasonable Efforts, and make the following
payments to Chrysalis  upon the  occurrence  of the events set forth below or to
extend the time for  achieving  the events,  so long as  OrthoLogic,  one of its
Affiliates,  or a sublicensing  partner, is still proceeding with the license or
licenses contemplated by each such payment.

         SPINE FUSION MILESTONES:

         1)       ************
         2)       ************
         3)       ************

         OTHER ORTHOPEDIC HARD TISSUE INDICATION MILESTONES:

         4)       ************
         5)       ************

(e)(vi)  Upon  execution of the  Amendment,  Chrysalis  will grant  OrthoLogic a
************ option for rights to Orthopedic Soft Tissue Indications. OrthoLogic
will have the right to execute its Option at any time within ************ of the
Effective Date of this Amendment by making a ************  payment to Chrysalis.
************ Upon exercise of the option for Orthopedic Soft Tissue Indications,
OrthoLogic will initiate an aggressive  development  program for at lease one of
the Orthopedic Soft Tissue Indications in collaboration with Chrysalis.

If  OrthoLogic  exercises  its option for the rights to  Orthopedic  Soft Tissue
Indications,  then it shall be  responsible  for the  payment  of the  following
milestones to Chrysalis:

         1)       ************
         2)       ************
         3)       ************

(e)(vii) If OrthoLogic retains its International Rights, subject to the terms of
2.11,  OrthoLogic and its Marketing Partner will pursue with Reasonable  Efforts
the initiations of clinical trials in Europe

************Text has been omitted pursuant to a confidentiality request. Omitted
text has been filed with the Securities & Exchange Commission.

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<PAGE>
and Asia and other  steps  required  to  obtain  regulatory  approval  to market
products for Fracture  healing,  Orthopedic Hard Tissue,  and (if exercising its
option)  Orthopedic  Soft Tissue  Indications  in Europe,  Asia, and other major
markets  within  the  Territory.  The  following  milestones  will be paid  upon
achievement of such marketing approvals.

         a)       ************
         b)       ************
         c)       ************

(f)  unchanged.

(g)  deleted.

(h);(i)  unchanged.

(j) OrthoLogic  will not promote and will use  reasonable  efforts to discourage
the use of any Chrysalis  Product for Indications  outside of the licensed Field
of  Use.  It  will  also  use  reasonable  efforts  to  insure  that  commercial
embodiments or  formulations  using  Chrysalis  Product will be so formulated to
focus the product use for the  licensed  Indication.  Chrysalis  will have input
into all  formation  decisions  whether  or not  Chrysalis  is  involved  in the
manufacturing of the final formation.

PARAGRAPH 5.2 IS ADDED AFTER ROYALTY RATE TABLE AS FOLLOWS:

5.2  CATEGORIES OF NET SALES.  For the purpose of  calculating  royalties due to
Chrysalis  if  OrthoLogic  exercised  its option for Rights to  Orthopedic  Soft
Tissue  Indications all sales of products for Orthopedic Soft Tissue Indications
shall  be  separated  from  sales  of  Fracture  and   Orthopedic   Hard  Tissue
Indications. ************

************

In the event that a given product is sold for  indications  in both  categories,
its sales will be  calculated  in total in the category that has the lower total
Net Sales for the royalty period.

PARAGRAPH 5.2 BECOMES 5.3:

SECTION "VI" IS AMENDED AS FOLLOWS:

6.1 REPORTS. Last sentence to end . . . . specified by Sections 5.1 through 5.3.

PARAGRAPH 8.2 IS AMENDED TO ADD:

************Text  has been omitted pursuant to a confidentiality  request to the
Securities  and  Exchange  Commission.  Omitted  text  has been  filed  with the
Securities and Exchange Commission.

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<PAGE>
          a)   If OrthoLogic or its Marketing Partners chooses to have Chrysalis
               provide  Chrysalin in a commercial  formulation  that  includes a
               matrix,   encapsulation,   or  specific   delivery   vehicle  for
               Fractures,  hard  Orthopedic  Tissue  or Soft  Orthopedic  Tissue
               Indications, an additional component to the transfer cost will be
               added  to  cover  the  additional  manufacturing  cost of the new
               formulation,************.

PARAGRAPH XVI "GENERAL" IS RENUMBERED AS PARAGRAPH XVII.  THE NEW
PARAGRAPH XVI IS AS FOLLOWS:

                           XVI. INTELLECTUAL PROPERTY

It is  anticipated  that  development  programs  may result in the  creation  of
intellectual property (IP) based on usage, dose, and/or specific formulations of
Chrysalin(TM)  or related  peptides or Technology  Improvements.  Chrysalis will
retain rights to any and all patents  resulting from development  programs using
TP508 or related peptides regardless of inventorship.  Where such patents extend
the exclusive  right to manufacture,  sell, or use TP508or related  peptides for
Orthopedic  Indications in the Field,  the  additional  patent  protection  will
likewise  extend the term of the original and amended  agreement and obligations
of  OrthoLogic,  its  partners  or  successors,  to  purchase  TP508 and related
peptides from Chrysalis and pay Royalties to Chrysalis.  In addition,  Chrysalis
will retain the following rights:

1.   SOLE OR JOINTLY DEVELOPED IP. Any and all patents resulting from IP jointly
     developed by Chrysalis  (or  Chrysalis/UTMB)  personnel  and  OrthoLogic or
     OrthoLogic  Partner  scientists  will be  assigned to  Chrysalis  (or UTMB)
     without fee and will be filed and prosecuted  either by or in consultations
     with Chrysalis IP Counsel.

2.   ORTHOLOGIC (OR PARTNER) IP (NO CHRYSALIS/UTMB INVENTORSHIP). All inventions
     related to the Chrysalin(TM)/TO508  technology will be promptly reported to
     Chrysalis. Any resulting patents related to or contributing to products for
     Licensed Indications will be assigned to Chrysalis without fee. Any patents
     resulting  from IP that  uses the  Chrysalin(TM)/TP508  technology,  but is
     specific to applications  outside of the Licensed  Indications may be owned
     and  patented  by  OrthoLogic  or Partner,  but right of first  refusal for
     licensing  such new IP will be  granted to  Chrysalis.  The  assignment  of
     patents  alone  under  this  condition  would  not  give  Chrysalis  use of
     OrthoLogic  or Partner  proprietary  matrix or  delivery  products  without
     additional license agreements.

************Text  has been omitted pursuant to a confidentiality  request to the
Securities  and  Exchange  Commission.  Omitted  text  has been  filed  with the
Securities and Exchange Commission.

                                                                          Page 5
<PAGE>
All of the terms and conditions of the Agreement shall remain  unchanged  except
as specified above.

SIGNED in multiple originals this the __ day of __________, 2000.

                                        ORTHOLOGIC CORP.


                                        By:
                                            ------------------------------------
                                                   Tom Trotter, President


                                        CHRYSALIS BIOTECHNOLOGY, INC.


                                        By:
                                            ------------------------------------
                                                Darrell H. Carney, President


************Text  has been omitted pursuant to a confidentiality  request to the
Securities  and  Exchange  Commission.  Omitted  text  has been  filed  with the
Securities and Exchange Commission.

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