Exhibit 10.26


                   FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT

     THIS FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT ("Amendment") is made and
entered into as of the 6th day of July, 2001, by and among OrthoLogic Corp., a
Delaware corporation ("OrthoLogic"), OrthoLogic Canada Ltd., a Canada
corporation ("OrthoCanada"; and together with OrthoLogic, "Seller"), OrthoRehab,
Inc., a Delaware corporation ("OrthoRehab") and 2002819 Ontario Limited, a
Canada Corporation ("RehabCanada;" and together with OrthoRehab, "Purchaser").

                                   WITNESSETH:

     WHEREAS, pursuant to the Asset Purchase Agreement dated as of May 8, 2001
by and between Seller and Purchaser (the "Agreement"), the Seller agreed to sell
and the Purchaser agreed to purchase substantially all of the Seller's assets
relating exclusively to the Division Business (as defined therein);

     WHEREAS, the Parties desire to make certain amendments to the Agreement.

     WHEREAS, capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Agreement.

     NOW, THEREFORE, in consideration of the mutual agreements and covenants
hereinafter set forth, the parties hereby agree to the following amendments to
the Agreement:

A. SCHEDULE 1.2(d) LEASED PREMISES

     Schedule 1.2(d) of the Agreement is hereby deleted in its entirety and
replaced with SCHEDULE 1.2(D) annexed hereto.

B. SCHEDULE 1.2(i) CONTRACTS

     Schedule 1.2(i) of the Agreement is hereby deleted in its entirety and
replaced with SCHEDULE 1.2(i) annexed hereto.

C. SCHEDULE 1.2(k) INTELLECTUAL PROPERTY

     Schedule 1.2(k) of the Agreement is hereby deleted in its entirety and
replaced with SCHEDULE 1.2(k) annexed hereto.

                                       1
<PAGE>
D. SCHEDULE 2.2(a)/(b) ASSUMED LIABILITIES

     Schedule 2.2(a)/(b) of the Agreement is hereby deleted in its entirety and
replaced with SCHEDULE 2.2(a)/(Bb annexed hereto.

E. SCHEDULE 2.2(c) LIABILITIES AND OBLIGATIONS OF SELLER

     Schedule 2.2(c) of the Agreement is hereby deleted in its entirety and
replaced with SCHEDULE 2.2(c) annexed hereto.

F. SECTION 2.1 AGREEMENT TO ASSUME

     Section 2.1 of the Agreement is amended by deleting the text therefrom in
its entirety and substituting therefor the following:

"2.1 AGREEMENT TO ASSUME. At the Closing (as herein defined), Purchaser shall
assume and agree to discharge and perform when due, the liabilities and
obligations of Seller with respect to the Division Business which are described
in Section 2.2 (the "Assumed Liabilities"); provided, however, that all Assumed
Liabilities referred to in Section 2.2(a) and 2.2(b) shall be specifically
listed on SCHEDULE 2.2(a)/(b), shall not exceed $2,000,000. To the extent that
the Schedules required by Section 2.2 require amendment due to changes in such
liabilities and obligation in the Ordinary Course of Business as of the Closing
the parties shall mutually amend such Schedules to provide for such changes on
the Closing Date, and such amendments shall be deemed to be a part of this
Agreement and incorporated herein by reference. All liabilities and obligations
of Seller enumerated in Section 2.3 are collectively referred to herein" as
"Excluded Liabilities." Seller shall remain liable for the Excluded Liabilities.

G. SECTION 3.3 MANNER OF PAYMENT OF THE PURCHASE PRICE

     Section 3.3 of the Agreement is amended by deleting the text therefrom in
its entirety and substituting therefor the following:

"3.3 MANNER OF PAYMENT OF THE PURCHASE PRICE. At the Closing:

     (a) Purchaser shall assume the Assumed Liabilities;

     (b) Purchaser shall pay $12,000,000 (the "Cash Portion") to Seller, by wire
transfer to such account as Seller shall designate by written notice delivered
to Purchaser on or prior to the Closing Date; and

     (c) ON THE DATE WHICH IS 390 DAYS AFTER THE CLOSING DATE, PURCHASER SHALL
PAY AN ADDITIONAL CONTINGENT PAYMENT EQUAL TO THE LESSER OF (i) ANY AMOUNTS
COLLECTED BY PURCHASER FROM THE PURCHASED RECEIVABLES IN EXCESS OF 50% OF THE
NET PURCHASED RECEIVABLES AMOUNT, OR (ii) $2,500,000 (THE "CONTINGENT PAYMENT

                                       2
<PAGE>
AMOUNT"), PROVIDED THAT SELLER SHALL USE ITS BEST EFFORTS TO ENSURE THAT THE NET
PURCHASED RECEIVABLES ARE EQUAL TO OR GREATER THAN $5,000,000.

H. SECTION 11.2 RIGHT TO TERMINATE

     Section 11.2 of the Agreement is amended by deleting the text therefrom in
its entirety and substituting therefor the following:

"11.2 RIGHT TO TERMINATE. This Agreement and the transactions contemplated
hereby may be terminated at any time prior to the Closing by prompt notice given
in accordance with Section 13.4:

(a)      by the mutual written consent of Purchaser and Seller; or

         (b) by either of such parties if the Closing shall not have occurred at
or before 11:59 p.m. Eastern Standard Time on July 11, 2001 (the "Outside
Date"), provided, however, that the right to terminate this Agreement under this
Section 11.2(b) shall not be available to any party whose breach of
representation or warranty or failure to fulfill any of its obligations under
this Agreement has been the cause of or resulted in the failure of the Closing
to occur on or prior to the aforesaid date."

I.       REAFFIRMATION AND CONFIRMATION OF AGREEMENT

         Except as otherwise set forth in this Amendment, the Agreement is
ratified and confirmed in all respects.

J.       COUNTERPARTS

         This Amendment may be executed in more that one counterpart, each of
which together shall constitute one and the same instrument.



         [REMAINDER OF PAGE INTENTIONALLY BLANK/SIGNATURE PAGE FOLLOWS]

                                       3
<PAGE>
     IN WITNESS WHEREOF, the parties have executed this Amendment on the date
first above written.

SELLER:

ORTHOLOGIC CORP.                            ORTHOLOGIC CANADA LTD.


By: /s/ Thomas R. Trotter                   By: /s/ Thomas R. Trotter
    -------------------------------             --------------------------------
Name: Thomas R. Trotter                     Name: Thomas R. Trotter
Title: President and CEO                          Title: President and CEO

                                       4
<PAGE>
PURCHASER:

ORTHOREHAB, INC.                            2002819 ONTARIO LIMITED


By: /s/ Michael A. Rusnak                   By: /s/ Michael A. Rusnak
    -------------------------------             --------------------------------
    Name: Michael A. Rusnak                     Name: Michael A. Rusnak
    Title: Chief Executive Officer              Title: Vice-President

                                       5