Document:

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                                                           Exhibit 10.12

                               September 23, 1998

VIA FACSIMILE

OrthoLogic Corporation
1275 West Washington Street
Tempe, AZ 85281

Ladies and Gentlemen:

         By this Letter of Amendment (the "LOA") it is understood that
OrthoLogic Corp., ("OrthoLogic") a Delaware corporation, with offices at 1275
West Washington Street, Tempe, Arizona, and Chrysalis BioTechnology, Inc.
("Chrysalis") a Texas corporation, with offices at 2200 Market, Galveston,
Texas, agree to modify the original Definitive Agreement regarding the TP508 (or
Chrysalin) technology ("Technology") for orthopedic applications signed by the
two parties as of December 31, 1997 as follows:

         1.       Extension of License Option. Chrysalis and OrthoLogic agree to
extend the evaluation period and the outside exercise date for the option for US
fracture applications described in Section IV(a) of the Definitive Agreement
from the original date of September 30th, 1998 to the earlier of January 1, 1999
or until OrthoLogic collects sufficient additional preclinical data to complete
its evaluation of the Technology.

         2.       Payments. OrthoLogic agrees to make a non-refundable partial
payment of $250,000 for the extension, payable to Chrysalis by September 30,
1998. If OrthoLogic decides to exercise its option by the date agreed to in
paragraph (1) above, the partial payment will be applied to the originally
agreed upon amount of $750,000, and OrthoLogic shall then immediately pay only
$500,000 to Chrysalis to exercise its option for the Technology for United
States fracture applications.

         3.       Other Payments. All other payments due to Chrysalis will be
made by OrthoLogic by the dates specified in the Definitive Agreement except
that the $250,000 payment pursuant to Section IV(b) in the Definitive Agreement
may instead be paid by January 1, 1999. The timing and amounts of all other
milestone payments shall remain unchanged.

         4.       Limited Modification. Except as modified herein, all terms and
conditions of the original Definitive Agreement shall remain in full force and
effect.

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OrthLogic Corporation
September 23, 1998
Page 2

         5.       Counterparts. This LOA may be executed by facsimile or manual
signatures. It may be executed in several counterparts, each of which shall be
deemed an original, but such counterparts shall together constitute one
agreement.

                                          Chrysalis BioTechnology, Inc.

                                          By:  /s/ Darrell H. Carney
                                               ---------------------------------
                                               Darrell H. Carney, Ph.D.
                                               Title:  President

                                   ACCEPTANCE

         The foregoing LOA correctly sets forth our agreement concerning the
Amendments to the Definitive Agreement.

         Dated:  September 29, 1998

                                             OrthoLogic Corp.

                                             By: /s/ Thomas R. Trotter
                                                 -------------------------------
                                                 Thomas R. Trotter
                                                 Title:  President/CEO<PAGE>

                                                            Exhibit 10.13

                      MARKETING AND DISTRIBUTION AGREEMENT

         This Marketing and Distribution Agreement (the "Agreement"), which
shall be effective as of January 14, 1999, is between OrthoLogic Corp. and
Chrysalis BioTechnology, Inc. Based on the mutual consideration between the
parties recited below, the parties agree as follows:

                            I. BACKGROUND AND PARTIES

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

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

         1.3      The Technology. Chrysalis owns or holds comprehensive license
rights relating to a technology known as the "Chrysalis Technology."

         1.4      The Definitive Agreement and the Payment. Chrysalis and
OrthoLogic are parties to a definitive agreement dated as of December 31, 1997,
which was amended by the Letter of Amendment dated September 23, 1998, and which
addresses the transactions contemplated by this Agreement (the "Definitive
Agreement").

         1.5      Rights. Pursuant to Section IV(a) of the Definitive Agreement,
OrthoLogic has the right to acquire from Chrysalis certain exclusive rights for
United States fracture applications.

         1.6      United States Rights for Fracture Applications. Prior to or
contemporaneously with the execution of this Agreement, OrthoLogic has made the
$750,000 payment contemplated by Section IV(a) of the Definitive Agreement.

         1.7      Governing Agreements. This Agreement and the Definitive
Agreement describe OrthoLogic's rights and obligations with respect to such
United States fracture applications.

                                 II. DEFINITIONS

         2.1      Except as otherwise defined in this Agreement, Capitalized
terms used in this Agreement shall have the same meanings they have in the
Definitive Agreement.

                     III. MARKETING, AND DISTRIBUTION RIGHTS

         3.1      Description of Rights. To the extent, and for the term,
provided in this Agreement and in the Definitive Agreement, Chrysalis hereby
grants to OrthoLogic the exclusive right to develop further, use and sell
Licensed Products under the Technology Rights for fracture applications in the
United States. In addition, Chrysalis hereby grants to OrthoLogic certain
limited rights to make or have made Licensed Products and to assign its rights
described herein, all as set forth in the Definitive Agreement.

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                       IV. REPRESENTATIONS AND WARRANTIES

         4.1      Reaffirmation of OrthoLogic Representations. OrthoLogic hereby
reaffirms its Representations and Warranties in the Definitive Agreement as of
the date of this Agreement.

         4.2      Reaffirmation of Chrysalis Representations. Chrysalis hereby
reaffirms its Representations and Warranties in the Definitive Agreement as of
the date of this Agreement.

                                   V. GENERAL

         5.1      Attorneys Fees. If any litigation or arbitration is commenced
between the parties hereto or their successors in interest, concerning any
provisions of this Agreement, or the rights and duties of any person in relation
thereto, the party prevailing in such litigation or arbitration shall be
entitled, in addition to such other relief as may be granted, to a reasonable
sum for its attorney's fees and litigation costs as determined by the court or
arbitrator, and not by a jury, or in a separate action brought for that purpose.

         5.2      Authorization and Signatures. By signing below, each party
represents that this Agreement has been duly authorized and constitutes an
agreement by which it is bound.

         5.3      Binding Effect; Benefits. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective heirs,
successors, executors, administrators and assigns. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.

         5.4      Construction. The language in all parts of this Agreement
shall in all cases be construed as a whole according to its fair meaning and not
strictly for or against either party. The Article and Section headings contained
in this Agreement are for reference purposes only and will not affect the
meaning or interpretation of this Agreement in any way. All terms used in one
number or gender shall be construed to include any other number or gender as the
context may require. The parties agree that each party has reviewed this
Agreement and has had the opportunity to have counsel review the same and that
any rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not apply in the interpretation of this
Agreement or any amendment or any exhibits thereto.

         5.5      Legal and Brokerage Fees. Each party shall pay and be
responsible for its legal fees, accounting fees, and related expense incurred in
connection with the preparation and execution of this Agreement.

         5.6      Publicity. Each of the parties agrees that it will not make
any public statements regarding this Agreement without first consulting the
other party hereto in order that such public statement shall be jointly issued
by the parties, except to the extent required by law, provided that in any such
situation, the party seeking to make the disclosure agrees to use its best
efforts to provide the other party with advance notice of any such request for
disclosure as promptly as feasible in order that the other party may seek a
protective order or such other appropriate remedy as the other party deems
necessary.

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         5.7      Continuing Cooperation. Each party to this Agreement shall be
obligated hereunder to perform such other and further acts, including without
limitation the execution of any documents or instruments, which are reasonable
and may be necessary or convenient in carrying out the purpose and intent of
this Agreement.

         5.8      Counterparts. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same agreement.

         5.9      Entire Agreement. This Agreement, plus the Definitive
Agreement and the Confidentiality Agreement executed by the parties in December
1997 constitute the final written expression of all of the agreements between
the parties with respect to the Chrysalin Technology and the Technology Rights
and are a complete and exclusive statement of those terms. They supersede all
understandings and negotiations concerning the matters specified herein, and
shall take precedence over all inconsistent provisions in any purchase orders or
any other documents unless agreed to in writing by both parties. Any oral
representations, promises, warranties or statements made by either party that
relate to the rights granted hereunder and differ in any way from the terms of
this written Agreement, the Definitive Agreement and the Confidentiality
Agreement shall be given no force or effect. The parties specifically represent,
each to the other, that there are no additional or supplemental agreements
between them related in any way to the Chrysalin Technology or the Technology
Rights unless specifically included or referred to herein. No addition to or
modification of any provision of this Agreement shall be binding upon any party
unless made in writing and signed by all parties.

         5.10     Force Majeure. Neither party shall be in default hereunder by
reason of its delay in the performance of or failure to perform any of its
obligations hereunder, if such delay or failure is caused by strikes, acts of
God or a public enemy, riots, fire, interference by civil or military
authorities, compliance with governmental laws, rules, regulations or orders,
delays in transit or delivery, inability to secure necessary governmental
priorities or materials, or any fault beyond its control or without its fault or
negligence.

         5.11     Indemnification and Attorney's Fees. Each of OrthoLogic and
Chrysalis shall defend, indemnify and hold harmless the other and its
affiliates, employees, officers, directors and agents from and against all
fines, suits, proceedings, claims, demands, debts, obligations, liabilities and
actions of any kind by anyone (including reasonable attorney's fees and costs)
allegedly arising from or connected with (i) violations by the indemnifying
party of any law, ordinance, rule or regulation of the United States or any
state or city or other international or domestic governmental body, (ii) the
indemnifying party's actions or omissions in furtherance of this Agreement,
(iii) any breach of a representation or warranty by or any breach or default in
the performance of any obligation of the indemnifying party, or (v) any other
activities or operations of the indemnifying party, its employees, officers,
directors or agents.

         5.12     Notice. All notices, demands, instructions, or requests
relating to this Agreement shall be in writing and, except as otherwise provided
herein, shall be deemed to have been given for all purposes (i) upon personal
delivery, (ii) one day after being sent, when sent by professional overnight
courier service from and to locations within the continental United States,
(iii) five days after posting when sent by United States registered or certified
mail, with postage

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paid, or (iv) on the date of transmission when sent by facsimile with evidence
of transmission and hard copy mailed, if directed to the person or entity to
which notice is to be given at his or its address set forth in this Agreement or
at any other address such person or entity has designated by notice.

         5.13     Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule or law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby are not affected in any manner materially
adverse to either party. Upon such determination that any term or other
provisions is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions be consummated as originally contemplated to the
fullest extent possible.

         5.14     Survival. The rights and obligations of those Sections of this
Agreement that by their nature survive and continue after any expiration or
termination of this Agreement, shall bind the parties and their legal
representatives, successors, heirs and assigns after expiration or termination.

         5.15     Waiver. The failure of either party to insist on strict
performance of any term or condition hereof or to exercise any option contained
herein, shall not be construed as a waiver of that party's right to enforce that
term of condition in the future or any other term or condition to this Agreement
in any other instance.

         5.16     Independent Entities. Chrysalis and OrthoLogic each have
separate and independent rights and obligations under this Agreement. Nothing
contained herein shall be construed as creating, forming or constituting any
partnership, joint venture, merger or consolidation of Chrysalis and OrthoLogic
for any purpose or in any respect.

         IN WITNESS WHEREOF, OrthoLogic and Chrysalis have executed this
Agreement as of the day and year first written above.

CHRYSALIS BIOTECHNOLOGY, INC.               ORTHOLOGIC CORP.

By: /s/ Darrell H. Carney                   By: /s/ Thomas R. Trotter
    ------------------------------              -------------------------------
    Darrell H. Carney, Ph.D.                    Thomas R. Trotter
    President                                   President

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