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                                                                    EXHIBIT 10.3

                               SECOND AMENDMENT OF
                         STOCK PURCHASE, REORGANIZATION
                           AND JOINT VENTURE AGREEMENT

         This SECOND AMENDMENT OF STOCK PURCHASE, REORGANIZATION AND JOINT
VENTURE AGREEMENT is made and entered into as of the 30th day of June, 1997, by
and among CTI, INC., a Tennessee corporation (hereinafter "CTI"); SIEMENS
MEDICAL SYSTEMS, INC., a Delaware corporation (hereinafter "Siemens"; successor
in interest to Siemens Gammasonics, Inc.); CTI PET SYSTEMS, INC., a Tennessee
corporation ("CTI"); and DR. TERRY D. DOUGLASS, DR. RONALD NUTT, MICHAEL C.
CRABTREE, and J. KELLY MILAM (hereinafter "Management").

         WHEREAS, CTI, Siemens, CPS and Management heretofore made and entered
into a Stock Purchase, Reorganization and Joint Venture Agreement dated as of
December 10, 1987, as amended by Amendment of Stock Purchase, Reorganization and
Joint Venture Agreement dated as of March 31, 1995 (hereinafter, the "Joint
Venture Agreement"), pursuant to which Siemens purchased and holds a 49.9%
interest in CPS, and pursuant to which Siemens and CTI holds the remaining 50.1%
interest in CPS, operate CPS as a joint venture company; and

         WHEREAS, the parties wish to amend the Joint Venture Agreement in
certain respects, as set forth below.

         NOW, THEREFORE, in consideration of the terms and conditions contained
herein, the parties hereto mutually agree as follows:

         1.       Agreement. The Joint Venture Agreement is incorporated herein
by reference. Capitalized terms not defined herein shall have the meanings given
them in the Joint Venture Agreement. As amended hereby, the Joint Venture
Agreement shall remain in full force and effect.

         2.       Directors of CPS. Section 13.1 of the Joint Venture Agreement
is amended by deleting the original language in its entirety and substituting in
its place the following:

                           Election of Directors. Siemens and CTI shall have
                  equal representation on the Board of Directors of CPS
                  (formerly Group). The Board of Directors of CPS shall be
                  comprised of five (5) directors, two (2) designated by Siemens
                  and two (2) designated by CTI. Upon any change in the
                  ownership of CPS Common Stock (formerly Group Common Stock),
                  representation on the Board of Directors of CPS, as between
                  Siemens and CTI, shall be proportional to each stockholder's
                  stock ownership, rounded to the nearest whole number. The
                  fifth director shall be affiliated in some manner with a
                  customer of Siemens and CPS, and shall be familiar with
                  Siemens' nuclear medicine products and CPS' PET products. The
                  fifth director shall be selected in the following manner, or
                  in such other manner as may be agreed upon by Siemens and CTI.
                  CTI shall provide to Siemens within two weeks after the
                  execution of this


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                  Second Amendment, a list of ten (10) candidates for the
                  position, with a statement of the qualifications of each.
                  Siemens shall, within three (3) weeks after receiving the list
                  of candidates, select the fifth director from the list
                  submitted by CTI. In subsequent years, CTI shall submit the
                  list of ten (10) candidates for the position to Siemens at
                  least one month prior to the CPS annual meeting, and Siemens
                  shall select the fifth director from the list no later than
                  the date of the annual meeting. The fifth director shall serve
                  for a term of three (3) years, and shall be eligible to serve
                  a maximum of two (2) consecutive three (3) years terms, for a
                  maximum total of six (6) years.

         3.       Dispute Resolution. Section 18 of the Joint Venture Agreement
is amended by deleting the original language in its entirety and substituting in
its place the following:

                  18.      Dispute Resolution.

                           18.1     Negotiation by Executives. Except with
                  respect to events of impasse, for which a separate procedure
                  is set forth at Section 13.7 above, the parties shall attempt
                  in good faith to resolve any dispute arising out of or
                  relating to this Agreement promptly by executives who have
                  authority to settle the controversy. All reasonable requests
                  for information made by one party to the other shall be
                  honored in a timely fashion. If the matter in dispute has not
                  been resolved within ninety (90) days after any party provides
                  notice that it is invoking this Section 18, either party may
                  initiate subsequent proceedings as contemplated herein.

                           18.2     Confidentiality. All negotiations and any
                  mediation or arbitration proceeding conducted pursuant to this
                  Section 18 (and any of the parties' submissions in
                  contemplation hereof) shall be kept confidential by the
                  parties and shall be treated by the parties and their
                  respective representatives as compromise and settlement
                  negotiations for purposes of the Federal Rules of Evidence and
                  any similar state rules.

                           18.3     Mediation and Arbitration. In the event the
                  parties are unable to resolve any dispute arising hereunder by
                  negotiation by executives, the parties agree first to try in
                  good faith to settle the dispute by mediation administered by
                  the American Arbitration Association (the "AAA") under its
                  Commercial Mediation Rules. In the event the parties are
                  unable to resolve any dispute arising hereunder by mediation,
                  either party (the "claimant") may give written notice to the
                  other (hereinafter "respondent") of its intention to
                  arbitrate, which notice shall contain a statement setting
                  forth the nature


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                  of the dispute, the amount involved, if any, and the remedy
                  sought, and file with the Atlanta office of the AAA three
                  copies of the notice and three copies of the arbitration
                  provisions of this Agreement, together with the appropriate
                  filing fee as provided in the AAA Commercial Rules. The AAA
                  shall give notice of such filing to the respondent which may
                  file an answering statement in duplicate with the AAA within
                  ten days after notice from the AAA, in which event the
                  respondent shall at the same time send a copy of the answering
                  statement to the claimant. If a counterclaim is asserted, it
                  shall contain a statement setting forth the nature of the
                  counterclaim, the amount involved, if any, and the remedy
                  sought. If a counterclaim is made, the appropriate fee shall
                  be forwarded to the AAA with the answering statement. If no
                  answering statement is filed within the stated time, it will
                  be treated as a denial of the claim. Failure to file an
                  answering statement shall not operate to delay the
                  arbitration. The AAA Commercial Arbitration Rules, as modified
                  or revised by the provisions herein, shall govern these
                  proceedings. The arbitration shall be conducted by a single
                  arbitrator selected pursuant to Rule 13 thereof. The
                  arbitration conducted by the AAA pursuant to this Agreement
                  shall be binding on the parties. Any award rendered by the
                  arbitrators pursuant to the procedure provided above shall be
                  final and binding on the parties. Such award shall be
                  enforceable under the Federal Arbitration Act and applicable
                  state law. Judgment on such award may be entered by either
                  party in any court having jurisdiction. The provisions hereof
                  shall be a complete bar and defense to any suit, action or
                  proceeding instituted in any court or before any
                  administrative tribunal with respect to any dispute or
                  controversy arising out of or in connection with this
                  Agreement. The arbitration provisions hereof shall, such
                  dispute or controversy, survive the termination or expiration
                  hereof. The parties shall each bear all of their respective
                  arbitration costs and expenses; provided, however, that the
                  disputing parties shall share the costs and expenses of the
                  arbitrator.

         4.       Siemens Coincidence Option. The parties agree that,
notwithstanding any provision of the Joint Venture Agreement, Siemens shall have
the right to pursue a sodium iodide coincidence option on its dual-headed SPECT
(single photon emission computerized tomography) cameras without paying any
royalty or other consideration to CTI, and that such activities of Siemens shall
not be deemed to be in violation of the non-competition provisions of the Joint
Venture Agreement. Siemens will use, as needed, experience, coincidence-related
intellectual property, services and other material or resources of CPS at
commercially,


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reasonable rates, as provided in the Agreement on CPS Input for Siemens
Coincidence Option attached hereto as Exhibit B.

         5.       LSO and YSO Crystal Production. The parties agree that,
notwithstanding any provision of the Joint Venture Agreement, CTI shall have the
right to pursue LSO and YSO crystal material production for all applications, to
sell LSO and YSO crystal material for applications other than PET, and to sell
LSO and YSO crystal material for PET applications to CPS and others, and that
such activities of CTI shall not be deemed to be in violation f the
non-competition provisions of the Joint Venture Agreement. CTI will provide LSO
material to CPS on a most favored customer basis at a price that will provide to
CTI a commercially reasonable rate of return on its investment in LSO
technology. CPS shall have the exclusive right to use such material for
detectors for PET, SPECT and combination PET/SPECT cameras and other medical
imaging technologies for two years from the date of the shipment of the first
commercial sale of a combination PET/SPECT camera using the LSO technology.
After such two years, CTI shall be free to sell LSO material to others for use
in PET and PET/SPECT cameras, but will sell such material to CPS on terms more
favorable than those offered to any other customer in the world.

         6.       LSO/YSO Hybrid Camera.

                  (a)      CPS is developing an LSO/YSO hybrid camera capable of
performing both PET and SPECT functions. The LSO/YSO hybrid camera shall be
deemed a cooperative product development of CPS and Siemens, because it requires
experience, knowledge and intellectual property of both CPS and Siemens. CPS
will manage the development of the camera and will utilize experience in SPECT
from Siemens as needed, and will pay for development efforts on the camera by
Siemens at cost. The division of individual component responsibilities will be
determined on the basis of core competencies, and to maximize profitability of
the product, under the management and overall leadership of the Board of
Directors of CPS.

                  (b)      Technical contributions by CPS will include LSO/YSO
detector assemblies; detector and acquisition electronics, including
pre-processing corrections and PET post-processing; acquisition and processing
software; general system architecture; and any other technologies necessary to
the successful development of the camera.

                  (c)      Contributions by Siemens will include gantry
mechanics; motion control software; collimators; and future contributions in
SPECT acquisition and process software and general system architecture,
including common software architecture (CSA); user interface, remote
serviceability and connectivity; and any other technologies necessary to the
successful development of the camera.

                  (d)      Profits from the cooperative product development of
the LSO/YSO camera will be shared by CPS and Siemens in proportion to the
respective contributions from each party. Any components that are pre-developed
and non-specific to the LSO/YSO hybrid camera (for example, E.CAM basic gantry
and collimators) used initially by CPS in the LSO/YSO hybrid camera will be
priced at cost plus a markup not greater than 20% of cost, which price shall be
determined prior to incorporation of the components into the camera.


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                  (e)      The Board of Directors of CPS will determine how and
where to manufacture the LSO/YSO hybrid camera.

                  (f)      Siemens will have exclusive distribution rights for
the LSO/YSO hybrid camera. CPS and Siemens will enter into a distribution
agreement for the LSO/YSO hybrid camera and similar hybrid products which will
include profit-sharing on the sales and services functions based on their
relative contributions to the design manufacturing, sales and service of the
products, and will include sales and market performance criteria and pricing,
transfer pricing and cost criteria for the products.

                  (g)      The Parties intend that CPS and Siemens complete and
execute a distribution agreement for the LSO/YSO hybrid camera consistent with
this Section 6 by December 31, 1997. If CPS and Siemens are unable to agree upon
the terms of such distribution agreement and execute it by that date, either CPS
or Siemens shall have the right to submit any unresolved issues involving the
LSO/YSO hybrid camera distribution agreement to resolution under the Dispute
Resolution provisions of the Joint Venture Agreement (Section 18 thereof), as
revised by this Second Amendment.

         7.       PET OEM Agreement. Simultaneous with the execution and
delivery of this Second Amendment, CPS and Siemens will enter into a new OEM
Exclusive Distribution Rights Agreement for sales and service of current and
future CPS dedicated PET products in the form of Exhibit A attached hereto.

         IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment on the day and yea first above written.

CTI, INC.                                       MANAGEMENT:



By:     /s/ Terry D. Douglass                        /s/ Terry D. Douglass
   --------------------------------             ------------------------------
   Terry D. Douglass                            Dr. Terry D. Douglass
   President



                                                         /s/ Ronald Nutt
                                                -------------------------------
                                                Dr. Ronald Nutt



By:      /s/ Ronald Nutt
   --------------------------------
   Ronald Nutt                                     /s/ Michael C. Crabtree
   Senior Vice President                       --------------------------------
                                               Michael C. Crabtree



                                                      /s/ J. Kelly Milam
                                               --------------------------------
                                               J. Kelly Milam


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SIEMENS MEDICAL SYSTEMS, INC.



By:      /s/ Thomas McCausland
   --------------------------------------
   Thomas McCausland
   President and Chief Executive Officer



By:      /s/ Wolfgang Kroll
   --------------------------------------
   Wolfgang Kroll
   Executive Vice President
   and Chief Financial Officer

CTI PET SYSTEMS, INC.



By:      /s/ Terry D. Douglass
   --------------------------------------
   Terry D. Douglass
   President



By:      /s/ Ronald Nutt
   --------------------------------------
   Ronald Nutt
   Senior Vice President


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