EXHIBIT 10.1 SEPARATION AGREEMENT AND RELEASE

EXHIBIT 10 .1

SEPARATION AGREEMENT AND RELEASE

This Separation Agreement and Release (“Agreement and Release”) is made by and between James T. Ryaby, Ph.D. (“Executive”) and OrthoLogic Corp., a Delaware corporation (the “Company”) as of November 17, 2006. Executive and the Company mutually desire to sever their employment relationship and, notwithstanding Section 6(b) of the Employment Agreement between Executive and the Company dated June 1, 2001, as amended (the “Employment Agreement”), agree as follows:

1.      The Employment Agreement is terminated effective on the date hereof (the “Separation Date”) and, except as expressly provided herein, Executive shall not have any further rights thereunder. Executive hereby resigns as Senior Vice President and Chief Scientific Officer and from each other office and employment position with the Company effective on the Separation Date.

2.      In connection with this Agreement and Release, the Company and Executive are simultaneously entering into a Consulting Agreement effective upon the Separation Date, providing for compensation and other benefits to Executive for services to be provided thereunder (the “Consulting Agreement”). The Company shall have no obligation to pay further compensation or other amounts, or provide any benefits to Executive other than as expressly provided in the Consulting Agreement, except that the Company shall pay the following to Executive:

a.      Accrued and unpaid base salary, including accrued and unpaid vacation pay, under the Employment Agreement through the Separation Date, which shall be paid, net of required withholding, in accordance with the Company’s normal payroll practices; and

b.      Within 30 days of the Separation Date, Executive's reasonable documented out-of-pocket business expenses properly incurred (including receipt of necessary pre-approvals) prior to the Separation date but not yet reimbursed.

3.      a.      Except as expressly provided herein, Executive hereby releases the Company, its past and present parent, subsidiary and affiliated corporations or business entities and its and their past and present directors, officers, agents and employees, from any and all past and present causes of action, claims, rights and liabilities, known or unknown, statutory or at common law, arising out of Executive’s employment or termination of employment with the Company; provided, that the foregoing release shall not apply to the Company's obligations under this Agreement or the Consulting Agreement or to the Company's obligations to indemnify Executive in his capacity as an officer of the Company pursuant to the Certificate of Incorporation or Bylaws of the Company.

b.      By way of example only and without limiting the immediately preceding paragraph, this release is applicable to any cause of action, right, claim or liability under any federal, state or local law, regulation, ordinance or order that regulates the employment relationship and/or employee benefits, including Title VII of the Civil Rights Act of 1964 as amended, The Age Discrimination in Employment Act, the Americans with Disabilities Act of 1990 as amended, the Civil Rights Act of 1991, the Equal Pay Act of 1963, as amended, the Employee Retirement Income Security Act of 1974, as amended, the Family and Medical Leave Acts, the Arizona Employment Protection Act, any state or federal laws providing “whistleblower” protection, and any other law