Document:

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EXHIBIT 10.29

                                                                  EXECUTION COPY

                               PHARMANETICS, INC.

                  SERIES B STOCK PURCHASE AND WARRANT AGREEMENT

                           DATED AS OF APRIL 30, 2003

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                                TABLE OF CONTENTS

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                                                                                     Page
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<S>                                                                                  <C>
1.  DEFINITIONS                                                                         1
2.  SALE AND PURCHASE OF Shares..................................................       1
    2.1  Sale and Purchase of Shares.............................................       1
    2.2  Closing.................................................................       2
3.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................       2
    3.1  Organization and Standing...............................................       2
    3.2  Subsidiaries............................................................       2
    3.3  Capitalization..........................................................       3
    3.4  SEC Reports; Financial Statements.......................................       3
    3.5  No Undisclosed Liabilities..............................................       4
    3.6  Accounting; Accounts Receivable.........................................       4
    3.7  Taxes...................................................................       5
    3.8  No Consents.............................................................       5
    3.9  Title to Property and Assets; Leases....................................       6
    3.10 Insurance...............................................................       6
    3.11 Intellectual Property...................................................       7
    3.12 Compliance with Laws; Regulatory Approvals..............................       9
    3.13 Litigation; Disputes....................................................       9
    3.14 Labor Relations.........................................................      10
    3.15 Pension and Benefit Plans...............................................      10
    3.16 Environmental...........................................................      13
    3.17 Transactions with Related Parties.......................................      14
    3.18 Material Contracts......................................................      14
    3.19 Authorization; No Conflict..............................................      14
    3.20 Absence of Violation....................................................      15
    3.21 Binding Obligation......................................................      15
    3.22 Status of Shares........................................................      15
    3.23 Offering of Shares......................................................      16
    3.24 Disclosure..............................................................      16
    3.25 Use of Proceeds.........................................................      16
    3.26 Investment Company......................................................      17
    3.27 No Brokers or Finders...................................................      17
4.  REPRESENTATIONS AND WARRANTIES OF THE INVESTORS..............................      17
    4.1  Organization and Standing...............................................      17
    4.2  Authorization...........................................................      17
    4.3  Binding Obligation......................................................      18
    4.4  No Registration Under the Securities Act................................      18
    4.5  Acquisition for Investment..............................................      18
    4.6  Evaluation of Merits and Risks of Investment............................      18
    4.7  Additional Information..................................................      18
    4.8  Legend..................................................................      19
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<S>                                                                                 <C>
5.  COVENANTS OF THE COMPANY....................................................     19
    5.1  Registered Securities..................................................     19
    5.2  Authorized Common Stock................................................     20
    5.3  Rule 144...............................................................     20
    5.4  Insurance..............................................................     21
6.  REGISTRATION................................................................     21
    6.1  Registration of Shares.................................................     21
    6.2  Limitations on Registration Rights.....................................     21
    6.3  Registration Procedure.................................................     22
    6.4  Requirements of Investors..............................................     23
    6.5  Assignment of Rights...................................................     23
    6.6  Indemnification........................................................     23
    6.7  Payments by the Company................................................     25
7.  CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY..........................     27
    7.1  Representations and Warranties.........................................     27
    7.2  Performance............................................................     27
    7.3  Legal Proceedings......................................................     27
    7.4  Articles of Incorporation..............................................     27
8.  CONDITIONS PRECEDENT TO OBLIGATIONS OF THE INVESTORS........................     27
    8.1  Representations and Warranties.........................................     28
    8.2  Performance............................................................     28
    8.3  Officer's Certificate..................................................     28
    8.4  Legal Proceedings......................................................     28
    8.5  Shareholders' Agreement................................................     28
    8.6  Registration Rights Agreement..........................................     28
    8.7  Opinions of Counsel....................................................     28
    8.8  Election of Directors..................................................     29
    8.9  Consents...............................................................     29
    8.10 Articles of Incorporation..............................................     29
    8.11 Documents at Closing...................................................     29
9.  CLOSING.....................................................................     29
    9.1  Deliveries by the Company to the Investors at the Closing..............     29
    9.2  Deliveries by the Investors to the Company at the Closing..............     30
10. SURVIVAL OF REPRESENTATIONS; REMEDIES.......................................     30
    10.1 Survival of Representations............................................     30
    10.2 Remedies Cumulative....................................................     31
11. MISCELLANEOUS...............................................................     31
    11.1 Additional Actions and Documents.......................................     31
    11.2 No Brokers.............................................................     31
    11.3 Expenses...............................................................     31
    11.4 Assignment.............................................................     31
    11.5 Entire Agreement; Amendment............................................     32
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<S>                                                                                  <C>
    11.6  Waiver................................................................     32
    11.7  Severability..........................................................     32
    11.8  Governing Law.........................................................     32
    11.9  Notices...............................................................     33
    11.10 Headings..............................................................     34
    11.11 Execution in Counterparts.............................................     34
    11.12 Limitation on Benefits................................................     34
    11.13 Binding Effect........................................................     34
</TABLE>

SCHEDULE A  Investors and Purchase Price Payable at Closing
EXHIBIT A   Definitions
EXHIBIT B   Second Amended and Restated Articles of Incorporation
EXHIBIT C   Warrant
EXHIBIT D   Shareholders' Agreement
EXHIBIT E   Registration Rights Agreement
EXHIBIT F   Form of Legal Opinion

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                  SERIES B STOCK PURCHASE AND WARRANT AGREEMENT

          THIS SERIES B STOCK PURCHASE AGREEMENT (this "Agreement") is entered
into as of April 30, 2003 by and among PharmaNetics, Inc., a North Carolina
corporation (the "Company"), Camden Partners Strategic Fund II-A, L.P., a
Delaware limited partnership, Camden Partners Strategic Fund II-B, L.P., a
Delaware limited partnership (collectively, "Camden") and each of the persons
listed on Schedule A hereto, each of which is herein referred to as an
"Investor".

          WHEREAS, the Company desires to issue to each Investor, and each
Investor desires to subscribe for and acquire from the Company, an equity
interest in the Company, upon the terms and conditions hereinafter set forth;

          NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:

1.   DEFINITIONS

          For all purposes of this Agreement, certain capitalized terms
specified in Exhibit A shall have the meanings set forth in that Exhibit A,
except as otherwise expressly provided.

2.   SALE AND PURCHASE OF Shares

     2.1  Sale and Purchase of Shares

          On the basis of the representations, warranties and agreements
contained herein, and subject to the terms and conditions hereof, the Company
agrees to issue to each Investor, and each Investor agrees, severally and not
jointly, to purchase from the Company on the Closing Date, that number of shares
of the Company's Series B Convertible Preferred Stock, no par value per share
(the "Series B Stock") indicated on Schedule A hereto, having the rights,
preferences and other terms set forth in the Second Amended and Restated
Articles of Incorporation in the form attached hereto as Exhibit B, at a
purchase price of $100 (one hundred dollars) per share (the "Purchase Price")
and a warrant, in the form attached hereto as Exhibit C (the "Warrant"), to
purchase that number of shares of Common Stock, equal to thirty-two percent
(32%) of the number of the Series B Stock purchased hereunder (rounded to the
nearest whole number) at an initial exercise price of $7.121. The Purchase Price
shall be allocated among the Investors as set forth on Schedule A.

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     2.2  Closing

          (a)  The closing of the sale and purchase of the Series B Stock and
Warrants shall take place at the offices of Hogan & Hartson L.L.P., 111 South
Calvert Street, Suite 1600, Baltimore, Maryland 21202, at 10:00 a.m., Baltimore
time, on the date hereof or at such other location, date and time as may be
agreed upon among the Investors and the Company (the "Closing"). At the Closing,
the Company shall issue and deliver to the Investors (i) stock certificates in
definitive form, registered in the name of each Investor, representing the
Series B Stock and (ii) Warrants being purchased by each Investor as set forth
on Schedule A. As payment in full for the shares of Series B Stock and the
Warrant being purchased by it at the Closing, and against delivery of the stock
certificate or certificates and Warrant therefore as aforesaid, on the Closing,
each Investor shall deliver to the Company by wire transfer of immediately
available funds, the amount set forth under the heading "Purchase Price Payable
at Closing" on Schedule A.

          (b)  The Company may sell up to the balance of the authorized number
of shares of Series B Stock and Warrants as set forth on Schedule A not sold at
the Closing to such purchasers as it shall select, such new purchasers to become
parties to this Agreement by executing a signature page hereto.

3.   REPRESENTATIONS AND WARRANTIES OF the company

          The Company hereby represents and warrants to each Investor as
follows:

     3.1  Organization and Standing

          The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of North Carolina, and has all
requisite corporate power and authority to own, operate and lease its Assets, to
carry on its business as currently conducted, to execute, deliver and perform
its obligations under this Agreement, the Registration Rights Agreement, the
Shareholders' Agreement and the Second Amended and Restated Articles of
Incorporation (collectively, the "Company Agreements"). The Company is duly
qualified to conduct its business, and is in good standing, in each jurisdiction
in which the nature of the business conducted by the Company or the character of
the Assets owned, leased or otherwise held by it makes any such qualification
necessary, except where the failure to be so qualified would not have a Material
Adverse Effect.

     3.2  Subsidiaries

          Except as set forth on Schedule 3.2, the Company has no Subsidiaries
and no equity investment or other interest in, nor has the Company made advances
or loans to, any corporation, association, partnership, joint venture or other
entity. Each Subsidiary listed on Schedule 3.2 has been duly organized, is
validly existing

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and in good standing under the laws of the jurisdiction of its organization, has
all requisite corporate power and authority to own and operate its properties,
to lease the properties it operates as lessee and to conduct the business in
which it is engaged, and is duly qualified to transact business and is in good
standing under the laws of the jurisdiction in which the conduct of its business
or the nature of its properties requires such qualification except where the
failure to be so qualified or in good standing would not reasonably be expected
to have a Material Adverse Effect. Except as disclosed on Schedule 3.2, all of
the issued and outstanding stock (or equivalent interests) of each Subsidiary
set forth on Schedule 3.2 has been duly authorized and validly issued, is fully
paid and non-assessable and is owned by the Company free and clear of any
Encumbrances and there are no rights, options or warrants outstanding or other
agreements to acquire shares of stock (or equivalent interests) of such
Subsidiary. Cardiovascular Diagnostics Europe, B.V. is an inactive wholly owned
subsidiary of the Company that has no assets or liabilities.

     3.3  Capitalization

          The authorized stock of the Company consists of (i) 40,000,000 of
Common Stock and (ii) 1,000,000 shares of preferred stock of which 120,000
shares are designated as Series A Convertible Preferred Stock, no par value per
share ("Series A Stock") and 130,000 shares are designated as Series B Stock. As
of the date hereof, (a) no shares of Series B Stock are issued or outstanding,
(b) 81,000 shares of Series A Stock were issued and outstanding and (c)
9,746,386 shares of Common Stock were issued and outstanding. All such issued
and outstanding shares have been duly authorized and validly issued and are
fully paid and non-assessable. The Company has reserved an additional (x)
251,000 shares of Common Stock for or subject to issuance upon the exercise of
outstanding warrants issued pursuant to the Series A Preferred Stock and Warrant
Purchase Agreement dated February 24, 2000 and (y) 1,722,368 shares of the
Common Stock as may be determined by the Company's Board of Directors from time
to time pursuant to the 1994 Stock Plan and 1995 Stock Plan (the "Stock Plans"),
as amended, of which 1,526,634 shares are subject to issuance upon the exercise
of outstanding options under the Stock Plans.

     3.4  SEC Reports; Financial Statements

          The Company has timely filed all SEC Reports. Each SEC Report complied
in all material respects with the applicable requirements of the Securities Act
or the Exchange Act, as applicable, and did not as of their respective filing
dates contain any untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
in the SEC Reports, in light of the circumstances under which they were made,
not misleading. Each of the Company's financial statements (including, in each
case, any related notes) contained in the SEC Reports complied as to form in all
material respects with applicable published rules and regulations of the
Commission with

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respect thereto, was prepared in accordance with GAAP applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
to such financial statements) and fairly presented the financial position of the
Company and its Subsidiaries as at the respective date and the results of
operations and cash flows for the periods indicated, except that unaudited
financial statements were subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount or effect.

          (b)  Since December 31, 2002, except as described in the SEC Reports
filed with the Commission prior to the date hereof or as otherwise publicly
disclosed by press release prior to the date hereof, (i) each of the Company and
its Subsidiaries has operated in the ordinary course and (ii) there has occurred
no fact, event, circumstance or development that, individually or in the
aggregate, has had or would reasonably be expected to have a Material Adverse
Effect.

     3.5  No Undisclosed Liabilities

          Neither the Company nor any of its Subsidiaries has any material
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise, except (a) liabilities or obligations disclosed or reserved against
in the SEC Reports filed prior to the date of this Agreement or (b) liabilities
or obligations which arose after the last date of any such SEC Report, in the
ordinary course of business consistent with past practice that, individually or
in the aggregate, have not had, and could not reasonably be expected to have, a
Material Adverse Effect or (c) liabilities incurred in connection with or as a
result of the transactions contemplated by this Agreement or (d) liabilities not
required under GAAP to be shown on the SEC Reports or (e) other undisclosed
liabilities which are not material to the Company.

     3.6  Accounting; Accounts Receivable

          (a)  The Company and each of its Subsidiaries maintains a system of
internal accounting controls sufficient to the knowledge of management to
provide reasonable assurance that there are no material deficiencies in the
Company's accounting system.

          (b)  The accounts receivable of the Company shown on the financial
statements included in or incorporated by reference into the SEC Reports, or
thereafter acquired by the Company until the date hereof, represent bona fide
transactions of the Company, and to the knowledge of management have been
collected or are collectible in amounts not less than the amounts thereof
carried on the books of the Company, except to the extent of the allowance for
doubtful accounts shown on such financial statements.

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     3.7  Taxes

          (a)  The Company has duly filed (or obtained extensions with respect
to) all Tax Returns required to be filed on or before the Closing with respect
to all applicable Taxes. To the knowledge of management, no penalties or other
charges are or will become due with respect to any such Tax Returns as the
result of the late filing thereof. All of the Tax Returns are true and complete
in all material respects. The Company: (i) has paid all Taxes due or claimed to
be due by any taxing authority as shown on any such Tax Returns; or (ii) has
established in its financial statements adequate reserves (in conformity with
GAAP consistently applied) for the payment of such Taxes. The amounts set up as
reserves for Taxes on the financial statements are to the knowledge of
management sufficient for the payment of all unpaid Taxes as of the dates
thereof, whether or not such Taxes are disputed or are yet due and payable, for
or with respect to the period, and for which the Company may be liable in its
own right or as a transferee of the Assets of, or successor to, any corporation,
person, association, partnership, joint venture or other entity.

          (b)  The Company, either in its own right or as a transferee, does not
to the knowledge of management have any liability for Taxes payable for or with
respect to any periods prior to and including the Closing in excess of the
amounts actually paid prior to the Closing or reserved for in the financial
statements.

          (c)  There is no action, suit, proceeding, audit, investigation or
claim pending or, to the knowledge of the Company, threatened in respect of any
Taxes for which the Company is or may become liable, nor has any deficiency or
claim for any such Taxes been proposed, asserted or threatened. The Company has
not consented to any waivers or extensions of any statute of limitations with
respect to the collection or assessment of any Taxes against the Company. There
is no agreement, waiver or consent providing for an extension of time with
respect to the assessment or collection of any Taxes against the Company.

          (d)  The Company has not: (i) been a partner in a partnership or an
owner of an interest in an entity treated as a partnership for federal income
tax purposes; (ii) executed or filed with the Internal Revenue Service any
consent to have the provisions of Section 341(f) of the Code apply to it; (iii)
been subject to Section 999 of the Code; or (iv) been a party to any agreement
relating to the sharing, allocation or payment of, or indemnity for, Taxes. The
Company is not a United States real property holding corporation as defined in
Section 897(c)(2) of the Code.

     3.8  No Consents

          Except as set forth on Schedule 3.8, no consent, approval, exemption
or authorization of or designation, declaration or filing with any Governmental
Entity

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on the part of the Company or any Subsidiary is necessary or required in
connection with the execution, delivery and performance of this Agreement, the
offer, sale or issuance of the Series B Stock and Warrants, or the consummation
of any other transaction contemplated hereby, except such filings as may be
required to be made with the Commission, state securities or "blue sky" laws,
the Nasdaq Stock Market ("Nasdaq"), and the North Carolina Secretary of State.
All consents and waivers required from any Person in order to carry out the
transactions contemplated hereby under any contract, lease or agreement to which
the Company or any Subsidiary is a party are set forth on Schedule 3.8, except
those that the failure to make or obtain would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect or prevent,
materially delay or materially impair the ability of the Company to consummate
the transactions contemplated by this Agreement.

     3.9  Title to Property and Assets; Leases

          Each of the Company and its Subsidiaries has good and marketable
title, free and clear of all Encumbrances to all of its Assets, including all
real property leased, subleased or otherwise occupied by the Company and its
Subsidiaries, except (i) liens for taxes not yet due and payable, (ii) liens
that do not interfere with the use (or contemplated use), utility or value of
such Assets in any material respect or (iii) liens disclosed in any SEC Report.
All leases to which the Company or any of its Subsidiaries is a party
(collectively, the "Leases") are valid and binding and in full force and effect,
and no material default (or event which, with the giving of notice or passage of
time, or both, would constitute a material default) by the Company or any of its
Subsidiaries, or to the knowledge of the Company by any other party thereto, has
occurred or is continuing thereunder. The Company and its Subsidiaries enjoy a
peaceful and undisturbed possession under all such Leases to which any of them
is party as lessee with such exceptions as do not materially interfere with the
use made by the Company or such Subsidiary. As used herein, the term "Lease"
shall also include subleases or other occupancy agreements. The term "lessee"
shall also include any sublessee or other occupant.

     3.10 Insurance

          The Company and its Subsidiaries maintain, with reputable insurers,
insurance in such amounts, including deductible arrangements, and of such a
character as is usually maintained by reasonably prudent managers of companies
engaged in the same or similar business. All policies of title, fire, liability,
casualty, business interruption, workers' compensation and other forms of
insurance including, but not limited to, directors and officers insurance and
key man insurance, held by the Company and its Subsidiaries, are in full force
and effect in accordance with their terms. Neither the Company or any of its
Subsidiaries is in default in any material respect under any provisions of any
such policy of insurance and no such Person has received notice of cancellation
of any such insurance.

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     3.11 Intellectual Property

          (a)  The Company owns, or is licensed or otherwise possesses all
necessary rights to use, all patents, patent applications, patent disclosures,
trademarks, trade names, service marks, trade dress, copyrights and any
applications therefore, maskworks, domain name registrations, schematics,
technology, know-how, trade secrets, inventions, improvements thereto, ideas,
algorithms, processes, computer software programs and applications (source code
or object code form) and tangible or intangible proprietary information or
material ("Intellectual Property") necessary for the conduct of the Company's
business as currently conducted and as proposed to be conducted.

          (b)  Schedule 3.11(b) lists all (i) patents, patent applications,
patent disclosures that the Company has referred to patent counsel for possible
patenting, registered and unregistered trademarks, trade names and service
marks, registered and unregistered copyrights, and maskworks included in the
Intellectual Property that are owned by the Company, including the
jurisdictions, both domestic and foreign, in which each such item of
Intellectual Property has been issued or registered or in which any application
for such issuance and registration has been filed, (ii) licenses, sublicenses
and other agreements as to which the Company is a party and pursuant to which
any Person is authorized to use any Intellectual Property owned by the Company,
and (iii) licenses, sublicenses and other agreements to which the Company is a
party and pursuant to which the Company is authorized to use any third party
patents, trademarks or copyrights, including software ("Third Party Intellectual
Property Rights") which are incorporated in, are, or form a part of, any Company
product. No third party who has licensed any Third Party Intellectual Property
Rights of the Company has ownership rights or rights to improvements made by the
Company in or to such Third Party Intellectual Property Rights, except as
disclosed in the SEC Reports.

          (c)  The Company has taken all material action in all jurisdictions
where the Company reasonably believes such action is appropriate, both domestic
and foreign, to register and maintain the registration of all material
Intellectual Property. In each case in which the Company has acquired
Intellectual Property rights from any person, the Company has obtained a valid
and enforceable assignment of the same and the Company has recorded each such
assignment relating to registered Intellectual Property with the U.S. Patent and
Trademark Office, the U.S. Copyright Office, domain name registrar or their
respective foreign equivalents.

          (d)  To the knowledge of the Company, there is no unauthorized use,
disclosure, infringement or misappropriation of any Intellectual Property rights
of the Company, or any Third Party Intellectual Property Rights to the extent
licensed by or through the Company, by any third party, including any employee
or former employee of the Company. Except as set forth on Schedule 3.11(d),
there are no

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royalties, fees or other payments or compensation payable by the Company to any
Person by reason of the Company's ownership, use, sale or disposition of
Intellectual Property.

          (e)  The Company is not, nor will it be as a result of the execution
and delivery of this Agreement or the agreements contemplated hereby, or the
performance of its obligations hereunder and thereunder, in breach of any
license, sublicense or other agreement relating to the Intellectual Property,
including Third Party Intellectual Property Rights.

          (f)  The conduct of the business and the products of the Company do
not, to the knowledge of management, infringe or misappropriate any patent,
trademark, service mark, copyright, trade secret or other proprietary right of
any third party, violate the rights of any person (including rights to privacy
or publicity) or constitute unfair competition or trade practices under the laws
of any jurisdiction.

          (g)  All current and former officers, employees and material
consultants of the Company that have contributed to the development of any
Intellectual Property used in the business or the products of the Company have
executed and delivered to the Company an agreement assigning to the Company any
and all Intellectual Property, including patent rights, arising from services
performed for the Company by such Persons. There is no Intellectual Property
developed by a shareholder, director, officer, consultant or employee of the
Company that is used in the business of the Company that has not been
transferred to the Company. To the knowledge of the management, there is no
pending dispute with any current or former officer, employee or consultant of
the Company regarding ownership of Intellectual Property used in the business or
products of the Company.

          (h)  The Company has entered into written confidentiality agreements
with all employees, consultants and third parties having access to Company-owned
confidential Intellectual Property or confidential Intellectual Property
disclosed to the Company by third parties under obligations of confidentiality
in connection with the disclosure to, or use or appropriation by, those third
parties, of Intellectual Property owned by the Company that has not otherwise
been made public pursuant to an issued patent.

          (i)  None of the Intellectual Property claimed to be owned or
developed by the Company, its employees or consultants, or assigned to the
Company, was developed by or on behalf of, or using grants or other subsidies
of, any governmental entity or any university, nor was any government funding,
facilities or resources of a university, college, other educational institution
or research center or funding from third parties was used in the development of
such Intellectual Property, where any such Intellectual Property would be
available for

                                       -8-

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commercial use or exploitation by any such governmental entity, university,
college or other educational institution or research center.

     3.12 Compliance with Laws; Regulatory Approvals

          Except as disclosed in the SEC Reports and except for matters which in
the aggregate would not have a Material Adverse Effect, the operations of the
Company and its Subsidiaries have been conducted in compliance with all
applicable Laws. Neither the Company nor any Subsidiary has received written
notice of any material violation (or of any investigation, inspection, audit, or
other proceeding by any Governmental Entity involving allegations of any
violation) of any Law, nor has the Company received written notice that it is in
material default with respect to any Law. Except for matters which in the
aggregate, as would not have a Material Adverse Effect, (a) all Regulatory
Approvals required by the Company and its Subsidiaries to conduct their
respective business as now conducted by them have been obtained and are in full
force and effect, (b) the Company and its Subsidiaries are in compliance with
the terms and requirements of such Regulatory Approvals, and (c) to the
knowledge of the Company, no event has occurred which constitutes, or with due
notice or lapse of time or both may constitute, a material default by the
Company or any Subsidiary under any Regulatory Approval. No Regulatory Approvals
obtained by the Company will in any way be affected by, or terminate or lapse by
reason of, the transactions contemplated by this Agreement or any of the other
Company Agreements, except for such Regulatory Approvals as would not,
individually or in the aggregate, have a Material Adverse Effect.

     3.13 Litigation; Disputes

          (a)  Except as set forth in Schedule 3.13, there is no legal action,
suit, arbitration or other legal, administrative or other governmental
investigation, inquiry or proceeding pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries
or relating to any of the Company Agreements or the contemplated transactions
hereof which, if determined adversely to the Company or any of its Subsidiaries,
would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect or would reasonably be expected to prohibit or
materially delay the Closing. The Company is not subject to any legal action,
suit, arbitration or other legal, administrative or other governmental
investigation, inquiry or proceeding that, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect.

          (b)  Except as disclosed in the SEC Reports, the Company is not
currently involved in nor reasonably anticipates any dispute with any of its
current or former employees, agents, brokers, distributors, vendors, customers,
business consultants, franchisees, franchisers, representatives or independent
contractors (or any current or former employees of any of the foregoing persons
or entities).

                                       -9-

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          (c)  The Company has not been the subject of, nor reasonably
anticipates, any materially disruptive activity such as boycotts or other civil
disobedience measures instituted by or on behalf of any activist groups seeking
to protect animal rights in laboratory testing that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect on the
Company.

     3.14 Labor Relations

          The Company has complied and is in compliance in all material respects
with all Laws relating to employment or the workplace, including, without
limitation, provisions relating to wages, hours, collective bargaining, safety
and health, work authorization, equal employment opportunity, immigration,
withholding, unemployment compensation, worker's compensation, employee privacy
and right to know. There are no collective bargaining agreements, employment
agreements between the Company and any of its employees, or professional service
agreements not terminable at will relating to the business and Assets of the
Company. The consummation of the transactions contemplated hereby will not cause
the Company or the Investors to incur or suffer any liability relating to, or
obligation to pay, severance, termination or other employment related payments,
including but not limited to benefits or penalties, to any person or entity.

     3.15 Pension and Benefit Plans

          (a)  Except as set forth on Schedule 3.15(a), the Company (i) does not
maintain and has never maintained any Plan or Other Arrangement, (ii) is not and
has never been a party to any Plan or Other Arrangement and (iii) does not have
obligations under any Plan or Other Arrangement.

          (b)  The Company has Furnished or otherwise made available to each
Investor true and complete copies of each of the following Documents: (i) the
Documents setting forth the terms of each Plan; (ii) all related trust
agreements or annuity agreements (and any other funding Document) for each Plan;
(iii) for the three most recent plan years, all annual reports (Form 5500
series) on each Plan that have been filed with any governmental agency; (iv) the
current summary plan description and subsequent summaries of material
modifications for each Title I Plan; (v) all DOL opinions on any Plan and all
correspondence relating to the request for and receipt of each opinion; (vi) all
correspondence with the PBGC on any Plan; and (vii) all IRS rulings, opinions or
technical advice relating to any Plan and all correspondence relating to the
request for and receipt of each ruling, opinion or technical advice. For each
Other Arrangement, the Company has Furnished to each Investor true and complete
copies of each policy, Agreement or other Document setting forth or explaining
the terms of the Other Arrangement, all related trust agreements or other
funding Documents (including, without limitation, insurance contracts,
certificates of deposit, money market accounts, etc.), all written

                                      -10-

<PAGE>

communications directed to employees or participants at large, and all
correspondence or other submissions with any governmental agency.

          (c)  No Plan is a Multiemployer Plan.

          (d)  No Plan is an ESOP.

          (e)  No Plan is a Defined Benefit Plan.

          (f)  The Company has made all contributions and other payments
required by and due under the terms of each Plan and Other Arrangement and has
taken no action (including, without limitation, actions required by Law)
relating to any Plan or Other Arrangement that will increase in any material
respect each Investor's or the Company's obligation under any Plan or Other
Arrangement, except as disclosed in the SEC Reports.

          (g)  Schedule 3.15(g) sets forth a list of all Qualified Plans. All
Qualified Plans and any related trust agreements or annuity agreements (or any
other funding Document) comply and have complied in all material respects with
ERISA, the Code (including, without limitation, the requirements for Tax
qualification described in Section 401 thereof), and all other Laws. The trusts
established under such Plans are exempt from federal income taxes under Section
501(a) of the Code. The Company has received determination letters issued by the
IRS with respect to each Qualified Plan (or the plan sponsor has received such
letters), and the Company has Furnished to each Investor true and complete
copies of all such determination letters and all correspondence relating to the
applications therefore. All statements made by or on behalf of the Company to
the IRS in connection with applications for determinations with respect to each
Qualified Plan were true and complete when made. Nothing has occurred since the
date of the most recent applicable determination letter that would adversely
affect the tax-qualified status of any Qualified Plan.

          (h)  The Company has complied in all material respects with all
applicable provisions of the Code, ERISA, the National Labor Relations Act,
Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act, the Fair Labor Standards Act, the Securities Act, the Securities Exchange
Act of 1934, and all other Laws pertaining to the Plans, Other Arrangements and
other employee or employment related benefits, and all premiums and assessments
relating to all Plans or Other Arrangements. The Company has no pending unfair
labor practice charges, contract grievances under any collective bargaining
agreement, other administrative charges, claims, grievances or lawsuits before
any court, governmental agency, regulatory body, or arbiter arising under any
Law governing any Plan, and to the Company's knowledge there exist no facts that
could give rise to such a claim.

                                      -11-

<PAGE>

          (i)  Schedule 3.15(i) describes all transactions in which Company or
any of the Plans has engaged in violation of Section 406(a) or 406(b) of ERISA
for which no exemption exists under Section 408 of ERISA and all "prohibited
transactions" (as such term is defined in Section 4975(c)(1) of the Code), for
which no exemption exists under Section 4975(c)(2) or 4975(d) of the Code. The
Company has Furnished to each Investor true and complete copies of each request
for a prohibited transaction exemption and each exemption obtained in response
to such request. All such requests were true and complete when made.

          (j)  Schedule 3.15(j) identifies any Plan that covered any current or
former Company employees that has been terminated within the five calendar years
preceding the date hereof. The Company has Furnished to each Investor true and
complete copies of all government filings, employee communications, board
minutes and all other Documents relating to each Plan termination.

          (k)  Except as set forth on Schedule 3.15(k), no Plan or Other
Arrangement, individually or collectively, provides for any payment by Company
to any employee or independent contractor that is not deductible under Section
162(a)(1) or 404 of the Code or that is an "excess parachute payment" pursuant
to Section 280G of the Code.

          (l)  No Plan has experienced a "reportable event" (as such term is
defined in Section 4043(b) of ERISA) that is not subject to an administrative or
statutory waiver from the reporting requirement.

          (m)  No Plan is a "qualified foreign plan" (as such term is defined in
Section 404A(e) of the Code), and no Plan is subject to the Laws of any
jurisdiction other than the United States of America or one of its political
subdivisions.

          (n)  The Company has timely filed and Company has Furnished to each
Investor true and complete copies of each Form 5330 (Return of Excise Taxes
Related to Employee Benefit Plans) that the Company filed on any Plan. The
Company has no liability for Taxes required to be reported on Form 5330.

          (o)  All Welfare Plans and the related trusts that are subject to
Section 4980B(f) of the Code and Sections 601 through 609 of ERISA comply with
and have been administered in compliance in all material respects with the
health care continuation-coverage requirements for tax-favored status under
Section 4980B(f) of the Code, Sections 601 through 609 of ERISA, and all
Treasury regulations explaining those requirements.

          (p)  No Plan promises or provides post-retirement medical, life
insurance or other benefits due now or in the future to current, former or
retired employees of the Company.

                                      -12-

<PAGE>

          (q)  The Company has (i) filed or caused to be filed all returns and
reports on the Plans that it is required to file and (ii) paid or made adequate
provision for all fees, interest, penalties, assessments or deficiencies that
have become due pursuant to those returns or reports or pursuant to any
assessment or adjustment that has been made relating to those returns or
reports. All other fees, interest, penalties and assessments that are payable by
or for the Company have been timely reported, fully paid and discharged. There
are no unpaid fees, penalties, interest or assessments due from the Company or
from any other person that are or could become a lien on any Asset of the
Company or could otherwise adversely affect the businesses or Assets of the
Company. The Company has collected or withheld all amounts that are required to
be collected or withheld by it to discharge its obligations, and all of those
amounts have been paid to the appropriate governmental agencies or set aside in
appropriate accounts for future payment when due.

     3.16 Environmental

          (a)  The Company has complied in all material respects and is in
material compliance with, and the Real Property and all improvements thereon are
in material compliance with, all Environmental Laws.

          (b)  The Company does not have any material liability under any
Environmental Law, except for any liability that could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. There
are no pending or threatened actions, suits, claims, legal proceedings or other
proceedings based on, and neither the Company nor any officer, director or
stockholder thereof has directly or indirectly received any formal or informal
notice of any complaint, order, directive, citation, notice of responsibility,
notice of potential responsibility, or information request from any governmental
authority or any other person or entity or arising out of or attributable to:
(i) the current or past presence, Release, or threatened Release of Hazardous
Materials at or from any part of the Real Property; (ii) the off-site disposal
or treatment of Hazardous Materials originating on or from the Real Property or
the businesses or Assets of the Company; (iii) any facility operations,
procedures or designs of the Company which do not conform to requirements of the
Environmental Laws; or (iv) any violation of Environmental Laws at any part of
the Real Property or arising from Company's activities (or the activities of the
Company's predecessors in title) involving Hazardous Materials.

          (c)  The Company and the Subsidiaries have been duly issued, and
currently have and will maintain through the Closing, all permits, licenses,
certificates and approvals required under any Environmental Law, except where
the failure to have such permits, licenses, artifacts or approvals, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect. Except in accordance with such permits, licenses, certificates and
approvals, there

                                      -13-

<PAGE>

has been no Release or discharge of any other material regulated by such
permits, licenses, certificates or approvals.

     3.17 Transactions with Related Parties

          Except as set forth in the SEC Reports with the Commission prior to
the date hereof (a) neither the Company nor any of its Subsidiaries is or has
been a party to any transaction or series of transactions described in Item 404
of Regulation S-K under the Securities Act; provided, however, that for purposes
hereof, reference in such Item 404 to the "registrant" shall be deemed to be
references to the Company or such Subsidiary, as the case may be, and references
to the "beginning of the registrant's last fiscal year" shall be deemed to be
references to the beginning of the Company's fiscal year ended December 31,
2000, and (b) no current or former officer or director of the Company or any of
its Subsidiaries and no Affiliate or associate of any such current or former
officer or director has, directly or indirectly, any interest in any contract,
arrangement or property (real or personal, tangible or intangible) used by the
Company and any such Subsidiary or in their respective businesses, or in any
supplier, distributor or customer of the Company or any such Subsidiary.

     3.18 Material Contracts

          All of the Company's Contractual Obligations that are required to be
described in the SEC Reports or to be filed as exhibits thereto are described in
the SEC Reports or are filed as exhibits thereto, as so required. Neither the
Company nor any of its Subsidiaries nor (to the knowledge of the Company) any
other party is in breach in any material respect of, or in default in any
material respect under, any of its Contractual Obligations or organizational
documents, except where any such breach or default, individually or in
aggregate, would not reasonably be expected to have a Material Adverse Effect.

     3.19 Authorization; No Conflict

          The Company has all the corporate right, power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby and
thereby. All corporate action on the part of the Company and its Board of
Directors necessary for the authorization, execution, delivery and performance
of this Agreement by the Company, the authorization, sale, issuance and delivery
of Series B Stock and Warrants contemplated hereby, and the performance of the
Company's obligations hereunder has been taken. The issuance and sale of the
Series B Stock and Warrants contemplated hereby will not give rise to any
preemptive rights or rights of first refusal in existence on the date hereof on
behalf of any person, except where any such person has waived such right or
rights. There are no preemptive rights, rights of first refusal or other similar
rights on behalf of any person under any provision of applicable law or any
provision of the Articles of Incorporation or

                                      -14-

<PAGE>

Bylaws of the Company or of any agreement or instrument to which the Company is
a party or by which the Company is bound in respect of any capital stock or
other securities of the Company other than those that have been waived and other
than pursuant to this Agreement and the anti-dilution provisions contained in
the Series A Stock and the warrants to purchase Common Stock issued in
connection with the Series A Stock.

     3.20 Absence of Violation

          The Company is not in violation of or default in any material respect
under, nor has it breached, any term or provision of its articles of
incorporation or bylaws or any material agreement or restriction to which the
Company is a party or by which the Company or any Asset thereof is bound or
affected. Neither the Company, nor any of its officers, directors, employees or
agents (or stockholders, distributors, representatives or other persons acting
on the express, implied or apparent authority of the Company) have paid, given
or received or have offered or promised to pay, give or receive, any bribe or
other unlawful, questionable or unusual payment of money or other thing of
value, any extraordinary discount, or any other unlawful or unusual inducement,
to or from any person, business association or governmental official or entity
in the United States or elsewhere in connection with or in furtherance of the
business of the Company (including, without limitation, any offer, payment or
promise to pay money or other thing of value (i) to any foreign official or
political party (or official thereof) for the purposes of influencing any act,
decision or omission in order to assist the Company in obtaining business for or
with, or directing business to, any person, or (ii) to any person, while knowing
that all or a portion of such money or other thing of value will be offered,
given or promised to any such official or party for such purposes). The business
of the Company is not in any manner dependent upon the making or receipt of such
payments, discounts or other inducements.

     3.21 Binding Obligation

          This Agreement constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms, is in full force and effect
and constitutes a legal, valid and binding obligation of, and is legally
enforceable against, the Company, and each of the Company Agreements, when
executed and delivered in accordance with the provisions hereof, shall be a
valid and binding obligation of the Company, enforceable in accordance with its
terms and, to the Company's knowledge, the other parties thereto.

     3.22 Status of Shares

          The Series B Stock to be issued to each Investor on the Closing Date
has been duly authorized by all necessary corporate action on the part of the
Company, and when issued in accordance with this Agreement, will be validly

                                      -15-

<PAGE>

issued, fully paid and nonassessable and will be free and clear of all
Encumbrances except for restrictions on transfer under applicable federal and
state securities laws and except as provided in the Company Agreements. The
shares of Common Stock (i) issuable upon conversion of the Series B Stock issued
to each Investor on the Closing Date and (ii) issuable upon exercise of the
Warrant have been duly authorized by all necessary corporate action on the part
of the Company and such shares of Common Stock have been validly reserved for
issuance, and upon issuance upon such conversion will be validly issued and
outstanding, fully paid and nonassessable and will be free and clear of all
Encumbrances except for restrictions on transfer under applicable federal and
state securities laws and except as provided in the Company Agreements.

     3.23 Offering of Shares

          Assuming the accuracy of the representations and warranties of each
Investor set forth in Section 4 hereof, the offer and sale of the Series B Stock
and Warrant to each Investor is exempt from the registration and prospectus
delivery requirements of the Securities Act. Neither the Company nor anyone
acting on its behalf has taken or will take any action (including, without
limitation, any offering of any securities of the Company under circumstances
which would require the integration of such offering with the offering of the
Series B Stock under the Securities Act and the rules and regulations of the
Commission thereunder) which would subject the offering, issuance and sale of
the Series B Stock to the registration requirements of the Securities Act.

     3.24 Disclosure

          The Company has provided the Investors with all applicable or relevant
documents and information that the Investors have requested in writing. True and
complete copies of all documents listed in the Schedules to this Agreement have
been made available or provided to the Investors. No representation or warranty
of the Company in this Agreement, and no document furnished or to be Furnished
to the Investors pursuant to this Agreement, or in connection herewith or with
the transactions contemplated hereby, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they are made, not misleading.

     3.25 Use of Proceeds

          The Company shall use the proceeds of the sale of Series B Stock and
Warrants to fund the expansion of the Company's sales and marketing efforts and
for working capital and other general corporate purposes.

                                      -16-

<PAGE>

     3.26 Investment Company

          The Company represents and warrants that it is not an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended (the "1940 Act"). In
addition, the Company agrees that it shall not become an "investment company" or
a company "controlled" by an "investment company", within the meaning of the
1940 Act. In the event that the Company breaches the foregoing, the Company
shall forthwith notify the Investors and shall take immediate corrective action
to remedy such breach.

     3.27 No Brokers or Finders

          Except for SG Cowen Securities Corporation, no agent, broker, finder
or investment or commercial banker or other Person (if any) engaged by or acting
on behalf of the Company or any Subsidiary or Affiliate is or will be entitled
to any brokerage or finder's or similar fee or other commission as a result of
the Company Agreements or the transactions contemplated thereof.

4.   REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

          Each Investor hereby, severally and not jointly, represents and
warrants to the Company as to itself as follows:

     4.1  Organization and Standing

          Each Investor is duly organized, validly existing and in good standing
under the laws of the state or jurisdiction of its organization and has the full
and unrestricted power and authority to carry on its business as currently
conducted, to enter into this Agreement and to carry out the transactions
contemplated hereby.

     4.2  Authorization

          The execution, delivery and performance by each Investor of each
Company Agreement to which it is a party and the transactions contemplated
hereby, the fulfillment of and the compliance with the respective terms and
provisions hereof, and the consummation by each Investor of the transactions
contemplated hereby has been duly authorized (which authorization has not been
modified or rescinded and is in full force and effect), and will not: (a)
conflict with, or violate any provision of, any term or provision of each
Investor's certificate or agreement of limited partnership or other governing
documents or (b) conflict with, or result in any breach of, or constitute a
default under, any Company Agreement to which each Investor is a party or by
which each Investor is bound. No other action is necessary for each Investor to
enter into each Company Agreement to which it is a party and to consummate the
transactions contemplated hereby.

                                      -17-

<PAGE>

     4.3  Binding Obligation

          This Agreement constitutes a valid and binding obligation of each
Investor, enforceable in accordance with its terms. Each Company Agreement to be
executed by each Investor pursuant hereto, when executed and delivered in
accordance with the provisions hereof, shall be a valid and binding obligation
of each Investor, enforceable in accordance with its terms.

     4.4  No Registration Under the Securities Act

          Each Investor understands that the Series B Stock to be purchased by
it pursuant to the terms of this Agreement and the Common Stock of the Company
into which the Series B Stock is convertible and into which the Warrants are
exercisable (collectively, the "Securities") have not been registered under the
Securities Act or any state securities law and will be issued, in reliance upon
exemptions contained in the Securities Act or interpretations thereof and in the
applicable state securities laws, and cannot be offered for sale, sold or
otherwise transferred unless the Securities are so registered or qualify for
exemption from registration under the Securities Act.

     4.5  Acquisition for Investment

          The Securities are being acquired under this Agreement by each
Investor in good faith solely for its own account, for investment and not with a
view toward resale or other distribution within the meaning of the Securities
Act. The Securities will not be offered for sale, sold or otherwise transferred
by each Investor without either registration or exemption from registration
under the Securities Act and any applicable state securities laws.

     4.6  Evaluation of Merits and Risks of Investment

          Each Investor has such knowledge and experience in financial and
business matters such that is it capable of evaluating the merits and risks of
its investment in the Securities being acquired hereunder. Each Investor is an
"accredited investor" within the meaning of Rule 501(a) under the Securities
Act. Each Investor understands and is able to bear any economic risks associated
with such investment (including, without limitation, the necessity of holding
the Securities for an indefinite period of time, inasmuch as the Securities have
not been registered under the Securities Act).

     4.7  Additional Information

          Each Investor acknowledges that it has been afforded the opportunity
to ask questions and receive answers concerning the Company and to obtain
additional information that it has requested to verify the accuracy of the
information contained

                                      -18-

<PAGE>

herein. Notwithstanding the foregoing, nothing contained herein shall operate to
modify or limit in any respect the representations and warranties of the Company
or to relieve them from any obligations to each Investor for breach thereof or
the making of misleading statements or the omission of material facts in
connection with the transactions contemplated herein.

     4.8  Legend

          The certificates evidencing the Securities will bear a legend
substantially similar to the following:

          The shares represented by this certificate have not been registered
          under the Securities Act of 1933 (the "Act") or state securities laws
          and cannot be offered, sold or otherwise transferred in the absence of
          registration or the availability of an exemption from registration
          under the Act and regulations promulgated thereunder and applicable
          state securities laws.

          In addition, for so long as the referenced Shareholders' Agreement is
in effect, each such certificate shall also bear a legend substantially similar
to the following:

          The voting rights with respect to, and sale or other disposition of,
          the securities represented by this certificate are restricted by and
          subject to the provisions of a Shareholders' Agreement dated as of May
          1, 2003, as the same may be amended from time to time, a copy of which
          is available for inspection at the offices of the Company.

5.   COVENANTS OF THE COMPANY

          The Company covenants and agrees with Investor as follows:

     5.1  Registered Securities

          For so long as any of the Series B Stock is outstanding, and in any
case for a period of forty (40) calendar days thereafter, the Company will
undertake best efforts to cause its Common Stock to continue to be registered
under Section 12(b) or 12(g) of the Exchange Act, will comply in all material
respects with its reporting and filing obligations under said act, and will not
knowingly and voluntarily take any action or file any document (whether or not
permitted by the Securities Act or the Exchange Act or the rules thereunder) to
terminate or suspend its reporting or filing obligations under said acts, except
as permitted herein. For so long as any of the Series B Stock is outstanding,
and in any case for a period of forty (40) calendar days thereafter, the Company
will use commercially responsible efforts to continue

                                      -19-

<PAGE>

the listing of trading of its Common Stock on the Nasdaq or on a national
securities exchange (as defined in the Exchange Act) and will comply in all
material respects with the Company's reporting, filing and other obligations
under the bylaws or rules of the National Association of Securities Dealers and
Nasdaq. Notwithstanding the foregoing, the provisions of this subsection shall
not in any way restrict the Company's ability to negotiate and consummate the
consolidation, reorganization or merger of the Company with or into any other
corporation or corporations or a sale, conveyance or other disposition of all or
substantially all of the Company's property or business.

     5.2  Authorized Common Stock

          For so long as any of the Series B Stock are outstanding and any
Warrants are exercisable, the Company shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but unissued
Common Stock, for issuance upon conversion of such Series B Stock or upon
exercise of the Warrants (the "Conversion Stock"), not less than the maximum
number of shares of Conversion Stock then so issuable.

     5.3  Rule 144

          With a view to making available the benefits of certain rules and
regulations of the Commission that may at any time permit the sale of any
restricted securities to the public without registration, the Company agrees to:

          (a)  use its best efforts to make and keep public information
available, as those terms are understood and defined in Rule 144 under the
Securities Act;

          (b)  use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and

          (c)  so long as any Investor owns any Series B Stock, furnish to the
Investor upon request, a written statement by the Company as to its compliance
with the reporting requirements of said Rule 144 and of the Securities Act and
of the Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents of the Company as the Investor may
reasonably request in availing itself of any rule or regulation of the
Commission allowing the Investor to sell any such securities without
registration.

                                      -20-

<PAGE>

     5.4  Insurance

          The Company and its Subsidiaries shall maintain, with nationally
reputable insurers, insurance in such amounts, including deductible
arrangements, and of such a character as is usually maintained by reasonably
prudent managers of companies engaged in the same or similar business including,
but not limited to, directors and officers insurance and key man insurance.

6.   REGISTRATION

     6.1  Registration of Shares

          The Company shall file with the Commission, as promptly as practicable
following the Closing, but in any event within thirty (30) days following the
Closing, a registration statement under Form S-1 or S-3 under the Securities Act
covering the resale to the public by each Investor of the Conversion Stock (the
"Registration Statement"). The Company's obligation to register the Conversion
Stock shall include any shares of Common Stock issued as an in-kind dividend on
the Series B Stock. The Company shall use its best efforts to cause the
Registration Statement to be declared effective by the Commission as soon as
practicable after the Closing, but in any event within 120 days following the
Closing (see Section 6.7 for penalties). The Company shall cause the
Registration Statement to remain effective until the earlier of two (2) years
from the Closing Date or such time as all Conversion Stock may be sold under
Rule 144 within a ninety- (90-) day period (assuming exercise of all Warrants
and conversion of all Series B Stock) or such earlier time as all the Conversion
Stock covered by the Registration Statement has been sold pursuant thereto (the
"Registration Period").

     6.2  Limitations on Registration Rights

          (a)  The Company may, by written notice to the Investors, suspend (for
up to a total of thirty (30) days within any twelve- (12-) month period) the
Registration Statement after effectiveness and require that the Investor
immediately cease sales of shares pursuant to the Registration Statement, in the
event and during such period as the Company determines that the existence of any
fact or the happening of any event (including without limitation pending
negotiations relating to, or the consummation of, a transaction or the
occurrence of any other event) would require additional disclosure of material
information by the Company in the Registration Statement the confidentiality of
which the Company has a business purpose to preserve or which fact or event
would render the Company unable to comply with Commission requirements (in
either case, a "Suspension Event"). In the case of any Suspension Event
occurring prior to and delaying the filing of the Registration Statement, the
Company shall be required to keep the Registration Statement effective until the
earlier of (x) such time as all of

                                      -21-

<PAGE>

the shares offered thereby have been disposed of in accordance with the intended
methods of distribution set forth in the Registration Statement or (y) the
period required by Section 6.1 above plus an extended period equal to the number
of days during which any such suspension was in effect. Any suspension
occasioned by the filing of a registration statement at the request of the
Investors pursuant to the Registration Rights Agreement shall not count for
purposes of the thirty day calculation provided in the first sentence of this
Section 6.2(a).

          (b)  If the Company delays or suspends the Registration Statement or
requires the Investor to cease sales of shares pursuant to paragraph (a) above,
the Company shall, as promptly as practicable following the termination of the
circumstance which entitled the Company to do so, take such actions as may be
necessary to file or reinstate the effectiveness of the Registration Statement
and/or give written notice to all Investors authorizing them to resume sales
pursuant to the Registration Statement. If as a result thereof the prospectus
included in the Registration Statement has been amended to comply with the
requirements of the Securities Act, the Company shall enclose such revised
prospectus with the notice to Investors given pursuant to this paragraph (b),
and the Investor shall make no offers or sales of shares pursuant to the
Registration Statement other than by means of such revised prospectus.

     6.3  Registration Procedure

          (a)  In connection with the filing by the Company of the Registration
Statement, the Company shall furnish to each Investor a copy of the prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act and such additional copies as are reasonably requested by the
Investor.

          (b)  The Company shall use its best efforts to register or qualify the
Conversion Stock covered by the Registration Statement under the securities laws
of such states as the Investors shall reasonably request; provided, however that
the Company shall not be required in connection with this paragraph (b) to
qualify as a foreign corporation or execute a general consent to service of
process in any jurisdiction.

          (c)  If the Company has delivered a final prospectus to the Investors
and after having done so the prospectus is amended to comply with the
requirements of the Securities Act, the Company shall promptly notify the
Investors and, if requested by the Company, the Investors shall immediately
cease making offers or sales of shares under the Registration Statement and
return all prospectuses to the Company. The Company shall promptly provide the
Investors with revised prospectuses and, following receipt of the revised
prospectuses, the

                                      -22-

<PAGE>

Investors shall be free to resume making offers and sales under the Registration
Statement.

          (d)  The Company shall pay the expenses incurred by it in complying
with its obligations under this Section 6, including all registration and filing
fees, exchange listing fees, fees and expenses of counsel for the Company, the
fees and expenses of one counsel retained by Investors and fees and expenses of
accountants for the Company, but excluding any brokerage fees, selling
commissions or underwriting discounts incurred by the Investor in connection
with sales under the Registration Statement.

     6.4  Requirements of Investors

          The Company shall not be required to include any Conversion Stock in
the Registration Statement unless the Investor owning such shares furnishes to
the Company in writing such information regarding such Investor and the proposed
sale of Conversion Stock by such Investor as the Company may reasonably request
in writing in connection with the Registration Statement or as shall be required
in connection therewith by the Commission or any state securities law
authorities.

     6.5  Assignment of Rights

          An Investor may assign any of its rights under this Section 6 in
connection with the transfer of some or all of its Series B Stock or Conversion
Stock to any party so long as the transfer complies with the provisions of
Section 4 of this Agreement.

     6.6  Indemnification

          (a)  To the extent permitted by law, the Company shall indemnify and
hold each Investor, the partners, members or officers, directors and
stockholders of each Investor, legal counsel and accountants for each Investor,
any underwriter (as defined in the Securities Act) for such Investor and each
person, if any, who controls such Investor or underwriter within the meaning of
the Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or any state securities laws, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations in connection with the Registration Statement (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements

                                      -23-

<PAGE>

therein not misleading, or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state securities laws or
any rule or regulation promulgated under the Securities Act, the Exchange Act or
any state securities laws; and the Company will reimburse each such Investor,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this subsection 6.6(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation that occurs in reliance upon and in
conformity with written information Furnished expressly for use in connection
with such registration by any such Investor, underwriter or controlling person;
provided further, however, that the foregoing indemnity agreement with respect
to any preliminary prospectus shall not inure to the benefit of any Investor or
underwriter, or any person controlling such Investor or underwriter, from whom
the person asserting any such losses, claims, damages or liabilities purchased
shares in the offering, if the Company shall have Furnished to the Investor a
revised prospectus (by amendment or supplement) which cures the defect giving
rise to such loss, claim, damage or liability and if a copy of such revised
prospectus (as then amended or supplemented) was not sent or given by or on
behalf of such Investor or underwriter to such person, if required by law so to
have been delivered, at or prior to the written confirmation of the sale of the
shares to such person.

          (b)  To the extent permitted by law, each selling Investor shall
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, and each person, if any, who
controls the Company within the meaning of the Securities Act, against any
losses, claims, damages or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Securities Act, the Exchange Act
or any state securities laws, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
Furnished by such Investor expressly for use in connection with such
registration; and each such Investor will reimburse any person intended to be
indemnified pursuant to this subsection 6.6(b), for any legal or other expenses
reasonably incurred by such person in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this subsection 6.6(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Investor (which
consent shall not be unreasonably withheld), provided that in no event shall any
indemnity in the

                                      -24-

<PAGE>

aggregate under this subsection 6.6(b) exceed the dollar amount of the net
proceeds from the offering received by such Investor.

          (c) Promptly after receipt by an indemnified party under this Section
6.6 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 6.6, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
6.6, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 6.6.

          (d)  If the indemnification provided for in this Section 6.6 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage or expense referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relevant intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.

          (e)  Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.

     6.7  Payments by the Company

          The Company shall use its best efforts to cause the Registration
Statement required to be filed pursuant to Section 6.1 hereof to become
effective as soon as practicable, but in no event later than the 120th day after
the Closing Date (the "Registration Deadline"). If (i) the Registration
Statement(s) covering the

                                      -25-

<PAGE>

Conversion Stock required to be filed by the Company pursuant to Section 6.1
hereof is not declared effective by the Commission on or before the Registration
Deadline, (ii) after the Registration Statement has been declared effective by
the SEC and prior to the expiration of the Registration Period, sales of all the
Registrable Securities cannot be made pursuant to the Registration Statement or
(iii) the Common Stock is not listed or included for quotation on the Nasdaq
National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, the
American Stock Exchange, the OTC Bulletin Board, or such other exchange or
market as the Company may designate and qualify under as its principal exchange
at any time during the Registration Period, then the Company will make payments
to the Investor in such amounts and at such times as shall be determined
pursuant to this Section 6.7 as liquidated damages to the Investor by reason of
any such delay in or reduction of their ability to sell the Conversion Stock.
The Company shall pay to each holder an amount equal to (i) the Purchase Price
of the Series B Stock then held by such holder (and, in the case of holders of
Conversion Stock, the Purchase Price of Preferred Shares from which such
Conversion Stock was converted) (in each case, the "Aggregate Share Price"),
multiplied by (ii) one and one-half percent (1 1/2%), multiplied by (iii) the
sum of (x) the number of months (prorated for partial months) after the
Registration Deadline and prior to the date the Registration Statement filed
pursuant to Section 6.1 is declared effective by the Commission, plus (y) the
number of months (prorated for partial months) prior to the expiration of the
Registration Period that sales of all the Registrable Securities cannot be made
pursuant to the Registration Statement after the Registration Statement has been
declared effective (including, without limitation, when sales cannot be made by
reason of the Company's failure to properly supplement or amend the prospectus
included therein in accordance with the terms of this Agreement or otherwise);
provided, however, that there shall be excluded from each such period any delays
which are solely attributable to (i) the Investor's failure to timely provide
information to the Company in accordance with Section 6.4 hereof, or (ii)
changes required by the Investor in the Registration Statement with respect to
information relating to the Investor, including, without limitation, changes to
the plan of distribution. For example, if the Registration Statement is not
effective by the Registration Deadline, the Company would pay $15,000 for each
$1,000,000 of Aggregate Share Price for each month after the Registration
Deadline until the Registration Statement becomes effective (prorated for
partial months). Such amount shall be paid in cash with fifteen days after the
end of each period that gives rise to such obligation. If any such payments of
cash are not timely made, each Investor holding Series B Stock can elect to add
the amount of such payments to the stated value of the Series B Stock then held
by such Investor and such amounts shall thereafter be convertible into Common
Stock at the "Conversion Price" (as defined in the Articles of Incorporation).

                                      -26-

<PAGE>

7.   CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY

          The obligations of the Company under this Agreement are subject to the
fulfillment, at or prior to the Closing Date, of each of the following
conditions, and failure to satisfy any such condition shall excuse and discharge
all obligations of the Company to carry out the provisions of this Agreement,
unless such failure is waived in writing by the Company:

     7.1  Representations and Warranties

          The representations and warranties of the Investors contained in
Section 4 shall be true on and as of the Closing with the same effect as though
such representations and warranties had been made on and as of the date of such
Closing, except for representations and warranties made as of a particular date,
which shall be true and correct as of such date.

     7.2  Performance

          Each Investor shall have performed and complied with all agreements
and conditions required by this Agreement to be performed or complied with by
them on or prior to the Closing Date.

     7.3  Legal Proceedings

          No action or proceeding by or before any governmental authority shall
have been instituted or threatened (and not subsequently dismissed, settled or
otherwise terminated) which is reasonably expected to restrain, prohibit or
invalidate the transactions contemplated by this Agreement, other than an action
or proceeding instituted or threatened by the Company.

     7.4  Articles of Incorporation

          The Second Amended and Restated Articles of Incorporation required to
designate the number, preferences and rights of the Series B Stock, as set forth
in Exhibit B shall have been accepted for filing by the Secretary of State for
the State of North Carolina.

8.   CONDITIONS PRECEDENT TO OBLIGATIONS OF THE INVESTORS

          The obligations of each Investor under this Agreement are subject to
the fulfillment, at or prior to the Closing, of each of the following
conditions, and failure to satisfy any such condition shall excuse and discharge
all obligations of such Investor to carry out the provisions of this Agreement,
unless such failure is waived in writing by such Investor:

                                      -27-

<PAGE>

     8.1  Representations and Warranties

          The representations and warranties made by the Company in this
Agreement and the statements contained on the Schedules and Exhibits attached
hereto or in any document Furnished by the Company pursuant to this Agreement
shall be true and complete when made, and on and as of the Closing Date as
though such representations and warranties were made on and as of such date.

     8.2  Performance

          The Company shall have performed and complied with all agreements,
obligations and conditions required by this Agreement to be performed or
complied with prior to the Closing Date.

     8.3  Officer's Certificate

          The President of the Company shall deliver to the Investors at the
Closing a certificate stating that the conditions specified in Sections 8.1 and
8.2 have been fulfilled and stating that there shall have been no material
adverse change in the business, affairs, operations, properties, assets or
financial condition of the Company since the date of this Agreement.

     8.4  Legal Proceedings

          No action or proceeding by or before any governmental authority shall
have been instituted or threatened (and not subsequently settled, dismissed or
otherwise terminated) which is reasonably expected to restrain, prohibit or
invalidate the transactions contemplated by this Agreement other than an action
or proceeding instituted or threatened by an Investor.

     8.5  Shareholders' Agreement

          The Company and the Investors shall execute and deliver a
Shareholders' Agreement substantially in the form of Exhibit D.

     8.6  Registration Rights Agreement

          The Company and the Investors shall execute and deliver a Registration
Rights Agreement substantially in the form of Exhibit E.

     8.7  Opinions of Counsel

          Each Investor shall have received an opinion of Wyrick Robbins Yates &
Ponton LLP, counsel for the Company, dated as of the Closing Date, to the effect
and substantially in the form of Exhibit F.

                                      -28-

<PAGE>

     8.8  Election of Directors

          The Company shall have fixed the membership of the Board of Directors
at seven (7) members. At the Closing, the holders of Series B Shares and the
Company shall have caused the election of Richard M. Johnston to the Board of
Directors as the Series B Preferred Director in accordance with the
Shareholders' Agreement.

     8.9  Consents

          The Company shall have received on or prior to the Closing Date all
consents, authorizations and approvals of governmental, and private parties
which are required to be obtained in order to consummate the transactions
contemplated hereby on or prior to the Closing Date, as indicated on the
Schedule 3.19 to Section 3.19 hereof.

     8.10 Articles of Incorporation

          The Second Amended and Restated Articles of Incorporation required to
designate the number, preferences and rights of the Series B Stock, as set forth
in Exhibit B shall have been accepted for filing by the Secretary of State for
the State of North Carolina.

     8.11 Documents at Closing

          All documents required to be Furnished by the Company to each Investor
prior to or at the Closing shall have been so Furnished.

9.   CLOSING

     9.1  Deliveries by the Company to the Investors at the Closing

          At the Closing, the Company shall deliver to each Investor the
following:

          (a)  stock certificates in definitive form registered in the name of
each Investor, representing the Series B Stock being purchased by it at the
Closing pursuant hereto;

          (b)  a Warrant in definitive form in the name of each Investor,
representing the Warrant being purchased by it at the Closing pursuant hereto;

          (c)  a certified copy of the resolutions adopted by the Board of
Directors authorizing the transactions contemplated by this Agreement;

                                      -29-

<PAGE>

          (d)  an opinion of Wyrick Robbins Yates & Ponton LLP, dated as of the
Closing Date, to the effect and substantially in the form of Exhibit F, as
required by Section 8.7;

          (e)  the officer's certificate required by Section 8.3 and
certificates of incumbency and specimen signatures of the signatory officers of
the Company;

          (f)  good standing certificates as of a date not more than ten (10)
days prior to the Closing Date issued by the Secretary of State of North
Carolina of the Company and Cardiovascular Diagnostics, Inc.;

          (g)  certified copies of the certificate of incorporation and bylaws
of the Company and Cardiovascular Diagnostics, Inc.;

          (h)  the Shareholders' Agreement required by Section 8.5;

          (i)  the Registration Rights Agreement required by Section 8.6; and

          (j)  such other Documents as the Investors may reasonably request.

     9.2  Deliveries by the Investors to the Company at the Closing

          At the Closing, the Investors shall deliver to the Company the
following:

          (a)  a wire transfer of funds or other payment of funds to an account
designated by the Company in the amount of the total aggregate Purchase Price
for all shares of Series B Stock set forth on Schedule A hereto;

          (b)  the Shareholders' Agreement required by Section 8.5;

          (c)  the Registration Rights Agreement required by Section 8.6; and

          (d)  such other Documents as the Company may reasonably request.

10.  SURVIVAL OF REPRESENTATIONS; REMEDIES

     10.1 Survival of Representations

          All representations, warranties, covenants, indemnities and other
agreements made by a party to this Agreement herein or pursuant hereto shall
also be deemed made on and as of the Closing Date as though such
representations, warranties, covenants, indemnities and other agreements were
made on and as of such date, and all such representations, warranties,
covenants, indemnities and other Agreements shall survive the Closing until
September 30, 2005, and any investigation, audit or inspection at any time made
by or on behalf of any party hereto.

                                      -30-

<PAGE>

     10.2 Remedies Cumulative

          The remedies provided herein shall be cumulative and shall not
preclude the assertion by the Company or an Investor of any other rights or the
seeking of any other remedies against the other, or their respective successors
or assigns.

11.  MISCELLANEOUS

     11.1 Additional Actions and Documents

          Each of the parties hereto hereby agrees to take or cause to be taken
such further actions, to execute, deliver and file or cause to be executed,
delivered and filed such further Documents, and will obtain such consents, as
may be necessary or as may be reasonably requested by the other party hereto in
order to fully effectuate the purposes, terms and conditions of this Agreement.

     11.2 No Brokers

          Except as otherwise disclosed in this Agreement, each party hereto
represents and warrants to the other parties (and to each of them) that such
party has not engaged any broker, finder or agent in connection with the
transactions contemplated by this Agreement and has not incurred (and will not
incur) any unpaid liability to any broker, finder or agent for any brokerage
fees, finders' fees or commissions, with respect to the transactions
contemplated by this Agreement. Each party agrees to indemnify, defend and hold
harmless each of the other parties from and against any and all claims asserted
against such parties for any such fees or commissions by any persons purporting
to act or to have acted for or on behalf of the indemnifying party.

     11.3 Expenses

          Subject to the provisions of this Section 11.3, each party hereto
shall pay its own expenses incident to this Agreement and the transactions
contemplated hereunder, including all legal and accounting fees and
disbursements, except that the Company agrees to pay, within ten (10) days
following receipt of appropriate invoices, the reasonable out-of-pocket expenses
of Camden, including the fees and other charges of Hogan & Hartson L.L.P.,
counsel to Camden, and the fees and expenses of other advisors to Camden, which
in the aggregate shall not exceed $75,000.

     11.4 Assignment

          Each Investor shall have the right to assign its rights and
obligations under this Agreement, in whole or in part, to an Affiliate or to
designate any Affiliate (to the extent permitted by Law) to receive directly the
Series B Stock to be

                                      -31-

<PAGE>

purchased hereunder or to exercise any of the rights of such Investor, or to
perform any of its obligations. The Company shall not assign its rights and
obligations under this Agreement, in whole or in part, whether by operation of
law or otherwise, without the prior written consent of a majority of the
Investors, including Camden, and any such assignment contrary to the terms
hereof shall be null and void and of no force and effect. In no event shall the
assignment by the Company or such Investors of their rights or obligations under
this Agreement, whether before or after the Closing, release the Company, or any
Investor from their respective liabilities and obligations hereunder.

     11.5 Entire Agreement; Amendment

          This Agreement, including the Schedules, the Exhibits and other
Documents referred to herein or Furnished pursuant hereto, constitutes the
entire agreement between the parties hereto with respect to the transactions
contemplated herein, and it supersedes all prior oral or written Agreements,
commitments or understandings with respect to the matters provided for herein.
No amendment, modification or discharge of this Agreement shall be valid or
binding unless set forth in writing and duly executed and delivered by the party
against whom enforcement of the amendment, modification, or discharge is sought.

     11.6 Waiver

          No delay or failure on the part of any party hereto in exercising any
right, power or privilege under this Agreement or under any other Documents
Furnished in connection with or pursuant to this Agreement shall impair any such
right, power or privilege or be construed as a waiver of any default or any
acquiescence therein. No single or partial exercise of any such right, power or
privilege shall preclude the further exercise of such right, power or privilege,
or the exercise of any other right, power or privilege. No waiver shall be valid
against any party hereto unless made in writing and approved by the holders of
not less than 75% of the Series B Stock issued hereunder.

     11.7 Severability

          If any part of any provision of this Agreement or any other Agreement
or document given pursuant to or in connection with this Agreement shall be
invalid or unenforceable in any respect, such part shall be ineffective to the
extent of such invalidity or unenforceability only, without in any way affecting
the remaining parts of such provision or the remaining provisions of this
Agreement.

     11.8 Governing Law

     This Agreement, the rights and obligations of the parties hereto, and any
claims or disputes relating thereto, shall be governed by and construed in

                                      -32-

<PAGE>

accordance with the laws of the State of Delaware (excluding the choice of law
rules thereof).

     11.9 Notices

          All notices, demands, requests, or other communications which may be
or are required to be given, served, or sent by any party to any other party
pursuant to this Agreement shall be in writing and shall be hand delivered, sent
by overnight courier or mailed by first-class, registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:

          (i)   If to the Company:

                PharmaNetics, Inc.
                9401 Globe Center Drive, Suite 140
                Morrisville, North Carolina 27560
                Attention: John P. Funkhouser

          with a copy (which shall not constitute notice) to:

                Wyrick Robbins Yates & Ponton LLP
                The Summit
                4101 Lake Boone Trail, Suite 300
                Raleigh, North Carolina 27607
                Attention: Larry E. Robbins

          (ii)  If to Camden:

                Camden Partners Holdings, LLC
                One South Street, Suite 2150
                Baltimore, Maryland 21202
                Attention: Richard M. Johnston
                           and Richard M. Berkeley

          with a copy (which shall not constitute notice) to:

                Hogan & Hartson L.L.P.
                111 South Calvert Street
                Suite 1600
                Baltimore, Maryland 21202
                Attention: Thene M. Martin

          (iii) If to any other holder of Series B Stock:

                To such Series B Preferred Shareholder's address shown on
                Exhibit B of the Shareholders' Agreement.

                                      -33-

<PAGE>

Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or sent.
Each notice, demand, request, or communication which shall be hand delivered,
sent, mailed, in the manner described above, shall be deemed sufficiently given,
served, sent, received or delivered for all purposes at such time as it is
delivered to the addressee (with the return receipt or the delivery receipt
being deemed conclusive, but not exclusive, evidence of such delivery) or at
such time as delivery is refused by the addressee upon presentation.

     11.10 Headings

           Section headings contained in this Agreement are inserted for
convenience of reference only, shall not be deemed to be a part of this
Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.

     11.11 Execution in Counterparts

           To facilitate execution, this Agreement may be executed in as many
counterparts as may be required. It shall not be necessary that the signatures
of, or on behalf of, each party, or that the signatures of all persons required
to bind any party, appear on each counterpart; but it shall be sufficient that
the signature of, or on behalf of, each party, or that the signatures of the
persons required to bind any party, appear on one or more of the counterparts.
All counterparts shall collectively constitute a single Agreement. It shall not
be necessary in making proof of this Agreement to produce or account for more
than a number of counterparts containing the respective signatures of, or on
behalf of, all of the parties hereto.

     11.12 Limitation on Benefits

           The covenants, undertakings and agreements set forth in this
Agreement shall be solely for the benefit of, and shall be enforceable only by,
the parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and permitted assigns.

     11.13 Binding Effect

           Subject to any provisions hereof restricting assignment, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors, heirs, executors, administrators, legal
representatives and assigns. Whenever statements as to enforceability are made
in this Agreement, it is acknowledged and agreed that such enforceability may be
limited by insolvency, bankruptcy, moratorium, or similar laws, rules and
regulations affecting creditors' rights generally and by general principles of
equity.

                                      -34-

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have duly executed this Series
B Stock Purchase and Warrant Agreement, or have caused this Agreement to be duly
executed on their behalf, as of the day and year first above written.

                                       PHARMANETICS, INC.

                                       By: __________________________________
                                       Name:
                                       Title:

                                       INVESTORS:

                                       CAMDEN PARTNERS STRATEGIC
                                        FUND II-A, L.P.

                                       By: Camden Partners Strategic II, LLC,
                                            Its General Partner

                                       By: __________________________________
                                       Name: Richard M. Johnston
                                       Title: Managing Member

                                       CAMDEN PARTNERS STRATEGIC
                                        FUND II-B, L.P.

                                       By: Camden Partners Strategic II, LLC,
                                             Its General Partner

                                       By: __________________________________
                                       Name: Richard M. Johnston
                                       Title: Managing Member

<PAGE>

                                       AIG DKR SOUNDSHORE PRIVATE
                                        INVESTORS HOLDING FUND LTD.

                                       By: __________________________________
                                       Name: Barbara Burger
                                       Title: Authorized Signatory

STOCK PURCHASE AGREEMENT SIGNATURE PAGE

<PAGE>

                                       BAYSTAR CAPITAL II, LP, a Delaware
                                         limited partnership

                                       By: BayStar Capital Management, LLC,
                                             Its General Partner

                                       By: __________________________________
                                       Name: Steven M. Lamar
                                       Title: Managing Member

STOCK PURCHASE AGREEMENT SIGNATURE PAGE

<PAGE>

                                       CAPITAL VENTURES INTERNATIONAL

                                       By: Heights Capital Management,
                                            Its Authorized Agent

                                       By: __________________________________
                                       Name: Martin Kobinger
                                       Title: Investment Manager

STOCK PURCHASE AGREEMENT SIGNATURE PAGE

<PAGE>

                                       CRESTVIEW CAPITAL FUND I, LP

                                       By: __________________________________
                                       Name: Richard Levy
                                       Title: Managing Partner

                                       CRESTVIEW CAPITAL FUND II, LP

                                       By: __________________________________
                                       Name: Richard Levy
                                       Title: Managing Partner

                                       CRESTVIEW CAPITAL OFFSHORE FUND, INC.

                                       By: __________________________________
                                       Name: Richard Levy
                                       Title: Secretary

STOCK PURCHASE AGREEMENT SIGNATURE PAGE

<PAGE>

                                       MAINFIELD ENTERPRISES INC.

                                       By: __________________________________
                                       Name: Kenneth L. Henderson
                                       Title: Attorney-in-Fact

STOCK PURCHASE AGREEMENT SIGNATURE PAGE

<PAGE>

                                      OMICRON MASTER TRUST

                                      By: Omicron Capital L.P.,
                                            As Advisor

                                      By: Omicron Capital Inc.,
                                            Its General Partner

                                      By: ___________________________________
                                      Name: Olivier Morali
                                      Title: President

STOCK PURCHASE AGREEMENT SIGNATURE PAGE

<PAGE>

                                      SMITHFIELD FIDUCIARY LLC

                                      By: ___________________________________
                                      Name: Adam J. Chill
                                      Title: Authorized Signatory

STOCK PURCHASE AGREEMENT SIGNATURE PAGE

<PAGE>

                                   SCHEDULE A
                TO SERIES B STOCK AND WARRANT PURCHASE AGREEMENT
                           DATED AS OF APRIL 30, 2003

<TABLE>
<CAPTION>
                                       Shares to be                                 Common Shares to
                                       ------------                                 ----------------
                                       Purchased at          Purchase Price         be Issued in the
                                       ------------          --------------         ----------------
           Investor                       Closing          Payable at Closing     Warrant to Investor
           --------                       -------          ------------------     --------------------
<S>                                   <C>                  <C>                    <C>
Camden Partners Strategic Fund
II-A, L.P.                                 48,144               $4,814.400                256,768

Camden Partners Strategic Fund
II-B, L.P.                                  2,856               $  285,600                 15,232

AIG DKR SoundShore Private
Investors Holding Fund Ltd.                 5,500               $  549,996                 29,333

BayStar Capital II, LP                     10,000               $  999,996                 53,333

Capital Ventures International              6,000               $  600,000                 32,000

Crestview Capital Fund I, LP                1,500               $  150,000                  8,000

Crestview Capital Fund II, LP               5,500               $  550,000                 29,334

Crestview Capital Offshore
Fund, Inc.                                    500               $   50,000                  2,666

Mainfield Enterprises Inc.                  4,800               $  480,000                 25,600

Omicron Master Trust                        5,000               $  499,998                 26,666

Smithfield Fiduciary LLC                    6,000               $  600,000                 32,000

TOTAL                                      95,800               $ 9579,990                510,932
</TABLE>

<PAGE>

                                    EXHIBIT A
                TO SERIES B STOCK AND WARRANT PURCHASE AGREEMENT
                           DATED AS OF APRIL 30, 2003

DEFINITIONS

          "Affiliate" means: (a) with respect to a person, any member of such
person's family; (b) with respect to an entity, any officer, director,
stockholder or partner of or in such entity or of or in any Affiliate of such
entity; and (c) with respect to a person or entity, any person or entity which
directly or indirectly, through one or more intermediaries, Controls, is
Controlled by, or is under common Control with such person or entity.

          "Agreement" means this Stock Agreement, including the Disclosure
Schedule and all Exhibits hereto.

          "Articles of Incorporation" means the Second Amended and Restated
Articles of Incorporation of the Company.

          "Assets" means assets of every kind and everything that is or may be
available for the payment of liabilities (whether inchoate, tangible or
intangible), including, without limitation, real and personal property.

          "Board of Directors" shall mean the Board of Directors of the Company.

          "Closing" means the closing of the sale and purchase of Series B Stock
pursuant to Section 2.2 of the Agreement.

          "Code" means the Internal Revenue Code of 1986, as amended, and all
Laws promulgated pursuant thereto or in connection therewith.

          "Commission" means the Securities and Exchange Commission.

          "Common Stock" means the common stock, no par value per share, of the
Company.

          "Company" means PharmaNetics, Inc., a North Carolina corporation.

          "Contractual Obligation" means, as to any Person, any agreement,
undertaking, contract, indenture, mortgage, deed of trust, credit agreement,
note, evidence of indebtedness or other instrument, written or otherwise, to
which such Person is a party or by which it or any of its property is bound.

<PAGE>

          "Control" means possession, directly or indirectly, of power to direct
or cause the direction of management or policies (whether through ownership of
voting securities, by Agreement or otherwise).

          "Defined Benefit Plan" means a Plan that is or was a "defined benefit
plan" as such term is defined in Section 3(35) of ERISA.

          "Disclosure Schedule" means the disclosure schedule identified as the
Disclosure Schedule to the Agreement.

          "Documents" means any paper or other material (including, without
limitation, computer storage media) on which is recorded (by letters, numbers or
other marks) information that may be evidentially used, including, without
limitation, legal opinions, mortgages, indentures, notes, instruments, leases,
Agreements, insurance policies, reports, studies, financial statements
(including, without limitation, the notes thereto), other written financial
information, schedules, certificates, charts, maps, plans, photographs, letters,
memoranda and all similar materials.

          "DOL" means the United States Department of Labor.

          "Encumbrance" means any mortgage, lien, pledge, encumbrance, security
interest, deed of trust, option, encroachment, reservation, order, decree,
judgment, condition, restriction, charge, Agreement, claim or equity of any
kind, except for liens for taxes incurred and not yet payable.

          "Environmental Laws" means any Laws (including, without limitation,
the Comprehensive Environmental Response, Compensation, and Liability Act),
including any plans, other criteria, or guidelines promulgated pursuant to such
Laws, now or hereafter in effect relating to the generation, production,
installation, use, storage, treatment, transportation, release, threatened
release, or disposal of Hazardous Materials, or noise control, or the protection
of human health, safety, natural resources, animal health or welfare, or the
environment.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and all Laws promulgated pursuant thereto or in connection therewith.

          "ESOP" means an "employee stock option plan" as such term is defined
in Section 407(d)(6) of ERISA or Section 4975(e)(7) of the Code.

          "Exchange Act" means the Exchange Act of 1934, as amended.

          "Exhibit" means an exhibit attached to the Agreement.

          "Furnished" means supplied, delivered or provided in any way.

                                      -ii-

<PAGE>

          "GAAP" means United States generally accepted accounting principles.

          "Governmental Entity" means the government of any nation, state, city,
locality or other political subdivision of any thereof, and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government or any international regulatory body
having or asserting any jurisdiction of a Person, its business or its property.

          "Hazardous Materials" means any wastes, substances, radiation, or
materials (whether solids, liquids or gases): (i) which are hazardous, toxic,
infectious, explosive, radioactive, carcinogenic, or mutagenic; (ii) which are
or become defined as "pollutants," "contaminants," "hazardous materials,"
"hazardous wastes," "hazardous substances," "toxic substances," "radioactive
materials," "solid wastes," or other similar designations in, or otherwise
subject to regulation under, any Environmental Laws; (iii) the presence of which
on the Real Property cause or threaten to cause a nuisance pursuant to
applicable statutory or common law upon the Real Property or to adjacent
properties; (iv) which contain without limitation polychlorinated biphenyls
(PCBs), asbestos or asbestos-containing materials, lead-based paints,
urea-formaldehyde foam insulation, or petroleum or petroleum products
(including, without limitation, crude oil or any fraction thereof); or (v) which
pose a hazard to human health, safety, natural resources, industrial hygiene, or
the environment, or an impediment to working conditions.

          "Laws" means all foreign, federal, state and local statutes, laws,
ordinances, regulations, rules, resolutions, orders, determinations, writs,
injunctions, awards (including, without limitation, awards of any arbitrator),
judgments and decrees applicable to the specified persons or entities and to the
businesses and Assets thereof (including, without limitation, Laws relating to
securities registration and regulation; the sale, leasing, ownership or
management of real property; employment practices, terms and conditions, and
wages and hours; building standards, land use and zoning; safety, health and
fire prevention; and environmental protection, including Environmental Laws).

          "Material Adverse Effect" means any material adverse change in or
affecting (i) the business, properties, Assets, liabilities, operations, results
of operations, management, condition, financial or otherwise, or prospects of
the Company and its Subsidiaries taken as a whole or (ii) the ability of the
Company or its Subsidiaries to consummate the transactions contemplated by the
Company Agreements other than any effect resulting from changes in general
economic conditions.

          "Multiemployer Plan" means a "multiemployer plan" as such term is
defined in Section 3(37) of ERISA.

                                      -iii-

<PAGE>

          "Ordinary Course of Business" means ordinary course of business and/or
consistent with the business plan of the Company and prudent business
operations.

          "Other Arrangement" means a benefit program or practice providing for
bonuses, incentive compensation, vacation pay, severance pay, insurance,
restricted stock, stock options, employee discounts, company cars, tuition
reimbursement or any other perquisite or benefit (including, without limitation,
any fringe benefit under Section 132 of the Code) to employees, officers or
independent contractors that is not a Plan.

          "Pension Plan" means an "employee pension benefit plan" as such term
is defined in Section 3(2) of ERISA.

          "Permitted Encumbrance" means (i) tax liens with respect to taxes not
yet due and payable or which are being contested in good faith by appropriate
proceedings and for which appropriate reserves have been established in
accordance with GAAP; (ii) deposits or pledges made in connection with, or to
secure payment of, utilities or similar services, workers' compensation,
unemployment insurance, old age pensions or other social security obligations;
(iii) encumbrances arising out of leasehold interests; (iv) mechanics',
materialmens' or contractors' liens or encumbrances or any similar lien or
encumbrance created by statute for amounts not yet due and payable (v)
easements, rights-of-way, restrictions and other similar charges and (vi)
encumbrances not interfering with the Ordinary Course of Business of the
Company.

          "Person" means any individual, partnership, joint venture,
corporation, trust, unincorporated organization, government or department or
agency of a government.

          "PBGC" means the Pension Benefit Guaranty Corporation or its
successor.

          "Plan" means any plan, program or arrangement, whether or not written,
that is or was an "employee benefit plan" as such term is defined in Section
3(3) of ERISA and (a) which was or is established or maintained by the Company;
(b) to which the Company contributed or was obligated to contribute or to fund
or provide benefits; or (c) which provides or promises benefits to any person
who performs or who has performed services for the Company and because of those
services is or has been (i) a participant therein or (ii) entitled to benefits
thereunder.

          "Qualified Plan" means a Pension Plan that satisfies, or is intended
by the Company to satisfy, the requirements for tax qualifications described in
Section 401 of the Code.

                                      -iv-

<PAGE>

          "Real Property" means the real property owned or leased by the Company
as of December 31, 2001, and any additional real property owned or leased since
that date, and, for purposes of Section 3.20, any real property formerly owned
or operated by the Company or any predecessor in interest thereto.

          "Registration Rights Agreement" means the Registration Rights
Agreement dated as of the date hereof by and among the Company and certain
parties named therein.

          "Regulatory Approvals" means any and all certificates, permits,
licenses, franchises, concessions, grants, consents, approvals, orders,
registrations, authorizations, waivers, variances or clearance from a
Governmental Entity.

          "SEC Reports" means all proxy statements, registration statements,
reports and other documents filed or required to be filed by the Company and any
of its Subsidiaries with the Commission pursuant to the Securities Act or the
Exchange Act since January 1, 2000.

          "Section" means a Section (or a subsection) of the Agreement.

          "Securities Act" means the Securities Act of 1933, as amended, and all
laws promulgated pursuant thereto or in connection therewith.

          "Shareholders' Agreement" means the Shareholders' Agreement dated as
of the date hereof by and among the Company and certain parties named therein.

          "Tax Return" means any return, report, statement, schedule, notice,
form or other document or information filed with or submitted to any government
authority in connection with the determination, assessment, collection, or
payment of any Taxes.

          "Taxes" means all federal, state, local and foreign taxes (including,
without limitation, income, profit, franchise, sales, use, real property,
personal property, ad valorem, excise, employment, social security and wage
withholding taxes) and installments of estimated taxes, assessments,
deficiencies, levies, imports, duties, withholdings, or other similar charges of
every kind, character or description imposed by any governmental or
quasi-governmental authorities, and any interest, penalties or additions to tax
imposed thereon or in connection therewith.

          "Welfare Plan" means an "employee welfare benefit plan" as such term
is defined in Section 3(1) of ERISA.

                                       -v-

<PAGE>

                                    EXHIBIT B
                TO SERIES B STOCK AND WARRANT PURCHASE AGREEMENT
                           DATED AS OF APRIL 30, 2003

            Second Amended and Restated Certificate of Incorporation

<PAGE>

                                    EXHIBIT C
                TO SERIES B STOCK AND WARRANT PURCHASE AGREEMENT
                           DATED AS OF APRIL 30, 2003

                                     Warrant

<PAGE>

                                    EXHIBIT D
                TO SERIES B STOCK AND WARRANT PURCHASE AGREEMENT
                           DATED AS OF APRIL 30, 2003

                             Shareholders' Agreement

<PAGE>

                                    EXHIBIT E
                TO SERIES B STOCK AND WARRANT PURCHASE AGREEMENT
                           DATED AS OF APRIL 30, 2003

                          Registration Rights Agreement

<PAGE>

                                    EXHIBIT F
                TO SERIES B STOCK AND WARRANT PURCHASE AGREEMENT
                           DATED AS OF APRIL 30, 2003

                              FORM OF LEGAL OPINION<PAGE>

Exhibit 10.30

                                                                   FORM OF
                                                                   WARRANT

THESE SECURITIES HAVE BEEN ISSUED PURSUANT TO EXEMPTIONS FOR NONPUBLIC OFFERINGS
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
AND APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, THESE SECURITIES MAY NOT
BE RESOLD OR OTHERWISE DISPOSED OF UNLESS, IN THE OPINION OF COUNSEL FOR OR
SATISFACTORY TO THE ISSUER, REGISTRATION UNDER THE APPLICABLE FEDERAL OR STATE
SECURITIES LAWS IS NOT REQUIRED OR COMPLIANCE IS MADE WITH SUCH REGISTRATION
REQUIREMENTS.

                Void after 5:00 p.m. Eastern Time, on May 1, 2008

             WARRANT TO PURCHASE ___________ SHARES OF COMMON STOCK

                                       OF

                               PHARMANETICS, INC.

         This is to certify that, FOR VALUE RECEIVED, CAMDEN PARTNERS STRATEGIC
FUND [II-A][II-B], L.P. or its registered assigns pursuant to Section (d) hereof
("Holder"), is entitled to purchase, subject to the provisions of this Warrant,
from PharmaNetics, Inc., a North Carolina corporation (the "Company"), ________
fully paid, validly issued and nonassessable shares of Common Stock, no par
value, of the Company ("Common Stock"), at the exercise price of $7.121 per
share until May 1, 2008. The number of shares of Common Stock to be received
upon the exercise of this Warrant and the price to be paid for each share of
Common Stock may be adjusted from time to time as hereinafter set forth. The
shares of Common Stock deliverable upon such exercise, and as adjusted from time
to time, are hereinafter sometimes referred to as "Warrant Shares," and the
exercise price of a share of Common Stock as adjusted from time to time is
hereinafter sometimes referred to as the "Exercise Price."

         (a)  EXERCISE OF WARRANT; NOTIFICATION OF EXPIRATION DATE OF WARRANT.
The Warrant may be exercised as to Warrant Shares at any time or from time to
time, from and after November 1, 2003 until 5:00 P.M. Eastern time on May 1,
2008 (the "Expiration Date"), provided, however, that if such day is a day on
which banking institutions in the State of New York are authorized by law to
close, then on the next succeeding day which shall not be such a day; provided,
further, that in the event that a Corporate Transaction (as defined in Section
(f)(1) below) occurs prior to the date this Warrant becomes exercisable, this
Warrant may be exercised in full or in part immediately prior to the
consummation of such Corporate Transaction. The Warrant may be exercised by
presentation and surrender hereof to the Company at its principal office, or at
the office of its stock transfer agent, if any, with the Purchase Form annexed
hereto duly executed (with signature guaranteed if required by the

                                        1

<PAGE>

                                                                   FORM OF
                                                                   WARRANT

Company or its stock transfer agent) and accompanied by payment of the Exercise
Price for the number of Warrant Shares specified in such form and any applicable
taxes. The purchase price for any Warrant Shares purchased pursuant to the
exercise of this Warrant shall be paid in full upon such exercise in cash or by
certified or bank check or pursuant to a cashless exercise procedure whereby the
Warrant Shares issued upon exercise of this Warrant will be sold with Holder
receiving the difference between the Exercise Price and the sale price, in cash,
and the Company receiving the Exercise Price for the Warrant Shares, in cash, or
any combination of the foregoing methods of paying the Exercise Price. In the
alternative, the Warrant may be exchanged for Warrant shares as described in
Section (k). As soon as practicable after each such exercise of the Warrants,
but not later than seven (7) business days from the date of such exercise, the
Company shall issue and deliver to the Holder a certificate or certificates for
the Warrant Shares issuable upon such exercise, registered in the name of the
Holder or the Holder's designee, except in the case of a cashless exercise. If
the Warrant should be exercised in part only, the Company shall, upon surrender
of the Warrant for cancellation, execute and deliver a new Warrant evidencing
the rights of the Holder thereof to purchase the balance of the Warrant Shares
purchasable thereunder. In the event of a cash exercise, upon receipt by the
Company of the Warrant at its office, or by the stock transfer agent of the
Company at its office, in proper form for exercise, together with the exercise
price thereof and taxes as aforesaid in cash or certified or bank check and the
investment letter described below, the Holder shall be deemed to be the holder
of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be physically delivered to the Holder. In order to assure the availability
of an exemption from registration under the federal or applicable state
securities laws, the Company may condition the exercise of the Warrant upon the
Holder delivering to the Company an investment letter in the form as customarily
used by the Company from time to time in connection with the exercise of
non-registered options and warrants which are issued by the Company. It is
further understood that certificates for the Warrant Shares, if any, to be
issued upon exercise of the Warrant may contain a restrictive legend in
accordance with Section (i) hereof.

         (b)  RESERVATION OF SHARES. The Company shall at all times reserve for
issuance and/or delivery upon exercise of this Warrant such number of shares of
its Common Stock as shall be required for issuance and delivery upon exercise of
the Warrants. If the Common Stock is or becomes listed on any national
securities exchange or the NASDAQ National Market System, the Company shall also
list such shares on such exchange subject to notice of issuance or maintain the
listing of its Common Stock on the NASDAQ National Market System, as the case
may be.

         (c)  FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of the Warrant. With respect
to any fraction of a share called for upon any exercise hereof, the Company
shall pay to the Holder an amount in cash equal to such fraction multiplied by
the current market value of a share, determined as follows:

              (1) If the Common Stock is listed on a national securities
              exchange or admitted to unlisted trading privileges on such
              exchange or listed for trading on the NASDAQ National Market
              System, the current market value shall be the last

                                        2

<PAGE>

                                                                   FORM OF
                                                                   WARRANT

              reported sale price of the Common Stock on such exchange or system
              on the last business day prior to the date of exercise of this
              Warrant or if no such sale is made on such day, the average bid
              and asked prices for such day on such exchange or system;

              (2) If the Common Stock is not so listed or admitted to unlisted
              trading privileges, the current market value shall be the mean of
              the last reported bid and asked prices reported by the National
              Quotation Bureau, Inc., on the last business day prior to the date
              of the exercise of this Warrant; or

              (3) If the Common Stock is not so listed or admitted to unlisted
              trading privileges and bid and asked prices are not so reported,
              the current market value shall be an amount, not less than the
              book value thereof as at the end of the most recent fiscal year of
              the Company ending prior to the date of the exercise of the
              Warrant, determined in such reasonable manner as may be prescribed
              by the Board of Directors of the Company.

         (d)  EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. The Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations entitling the
Holder thereof to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. Subject to Section (i) hereof, the Holder may
transfer or assign the Warrant, in whole or in part and from time to time to a
Qualified Institutional Buyer, as such term is defined in Rule 144A promulgated
under the Securities Act of 1933, as amended. Upon surrender of this Warrant to
the Company at its principal office or at the office of its stock transfer
agent, if any, with the Assignment Form annexed hereto duly executed (with
signature guaranteed, if required by the Company or its stock transfer agent)
and funds sufficient to pay any transfer tax, the Company shall, without charge,
execute and deliver a new Warrant in the name of the assignee or assignees named
in such instrument of assignment and this Warrant shall promptly be canceled.
This Warrant may be divided by or combined with other Warrants which carry the
same rights upon presentation hereof at the principal office of the Company or
at the office of its stock transfer agent, if any, together with a written
notice specifying the names and denominations in which new Warrants are to be
issued and signed by the Holder hereof. The term "Warrant" as used herein
includes any Warrants into which this Warrant may be divided or exchanged. Upon
receipt by the Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in the case of loss, theft or
destruction, of reasonable satisfactory indemnification (including a surety
bond), and upon surrender and cancellation of this Warrant, if mutilated, the
Company will execute and deliver a new Warrant of like tenor, date and amount.
Any such new Warrant executed and delivered shall constitute an additional
contractual obligation on the part of the Company, whether or not the original
Warrant shall be at any time enforceable (subject to the Company's right of
indemnification as provided above) by anyone.

         (e)  RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the

                                        3

<PAGE>

                                                                   FORM OF
                                                                   WARRANT

Holder are limited to those expressed in the Warrant and are not enforceable
against the Company except to the extent set forth herein.

         (f)  CERTAIN ADJUSTMENTS. So long as this Warrant shall be outstanding,
the Exercise Price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrants shall be subject to adjustment
from time to time upon the happening of certain events as follows:

              (1)   Reclassification, Consolidation or Merger. In case of any
                    reclassification or change of outstanding securities of the
                    class issuable upon exercise of this Warrant (other than a
                    change in par value, or from par value to no par value, or
                    as a result of a subdivision or combination), or in case of
                    any consolidation or merger of the Company with or into
                    another corporation, (other than a merger (i) with another
                    corporation in which the Company is the surviving
                    corporation and which does not result in any
                    reclassification or change of outstanding securities
                    issuable upon exercise of this Warrant or (ii) a merger in
                    which the Company is not the surviving corporation and
                    holders of equity securities of the Company as a result of
                    such merger receive more than 50% of the equity securities
                    of the surviving corporation), or in case of any sale of all
                    or substantially all of the assets of the Company, or in
                    case of a share exchange in which 80% or more of the
                    outstanding capital stock of the Company is exchanged for
                    capital stock of another corporation, any of which
                    transactions shall be referred to hereinafter as a
                    "Corporate Transaction", the Company or such successor or
                    purchasing company or entity, as the case may be, shall
                    execute with the Holder of this Warrant an agreement
                    pursuant to which the Holder of the Warrant shall have the
                    right thereafter to purchase upon exercise of the Warrant
                    the kind and amount of shares, and/or other securities and
                    property that the Holder of the Warrant would have owned or
                    have been entitled to receive after the happening of such
                    Corporate Transaction had the Warrant been exercised
                    immediately prior to such action. The provisions of this
                    subsection (1) may be waived on behalf of the Holder by
                    holders of warrants representing at least a majority of the
                    Common Stock exercisable under the warrants issued by the
                    Company pursuant to the Series B Stock Purchase and Warrant
                    Agreement dated as of the date hereof among the Company, the
                    Holder and the other parties named therein and, assuming
                    that notice of the Corporate Transaction has been properly
                    delivered to the Holder in accordance with Section (h)
                    hereof, this Warrant may be canceled at the election of the
                    Company or the successor entity upon consummation of the
                    Corporate Transaction. The agreement referred to in this
                    subsection (1) shall provide for adjustments which shall be
                    as nearly equivalent as may be practicable to the
                    adjustments provided for in this Section (f). The provisions
                    of this subsection (1) shall similarly apply to successive
                    Corporate Transactions unless waived in accordance with the
                    provisions set forth above.

                                        4

<PAGE>

                                                                   FORM OF
                                                                   WARRANT

              (2)   Subdivision or Combination of Shares. If the Company at any
                    time while this Warrant remains outstanding and unexpired
                    shall subdivide or combine its Common Stock, the Warrant
                    Price shall be proportionately decreased in the case of a
                    subdivision or increased in the case of a combination.

              (3)   Stock Dividends. If the Company at any time while this
                    Warrant is outstanding and unexpired shall pay a dividend
                    with respect to Common Stock payable in, or make any other
                    distribution with respect to Common Stock (except any
                    distribution provided for in the foregoing subsection (1) or
                    (2)), of Common Stock, then the Exercise Price shall be
                    adjusted, from and after the date of determination of
                    shareholders entitled to receive such dividend or
                    distribution, to that price determined by multiplying the
                    Warrant Price in effect immediately prior to such date of
                    determination by a fraction (a) the numerator of which shall
                    be the total number of shares of Common Stock outstanding
                    immediately prior to such dividend or distribution and
                    (b) the denominator of which shall be the total number of
                    shares of Common Stock outstanding immediately after such
                    dividend or distribution.

              (4)   Adjustment of Number of Warrant Shares. Upon each adjustment
                    in the Exercise Price, the number of Warrant Shares
                    purchasable hereunder shall be adjusted, to the nearest
                    whole share, to the product obtained by multiplying the
                    number of Warrant Shares purchasable immediately prior to
                    such adjustment in the Exercise Price by a fraction, the
                    numerator of which shall be the Exercise Price immediately
                    prior to such adjustment and the denominator of which shall
                    be the Exercise Price immediately thereafter.

              (5)   No adjustment in the Exercise Price shall be required unless
                    such adjustment would require an increase or decrease of at
                    least $.01 in such price; provided, however, that any
                    adjustments which by reason of this subsection (f)(5) are
                    not required to be made shall be carried forward and taken
                    into account in any subsequent adjustment required to be
                    made hereunder.

              (6)   Each computation required by this Section (f) for purposes
                    of determining whether the Exercise Price shall be adjusted
                    shall be performed by the Company's Chief Financial Officer
                    on the basis of the Company's internally prepared unaudited
                    financial statements. Such unaudited financial statements
                    shall be accompanied by a certificate signed by the
                    President and Chief Financial Officer certifying that such
                    unaudited statements have been prepared in accordance with
                    GAAP on a basis consistently applied and included all
                    adjustments (consisting only of normal, recurring accruals)
                    necessary for a fair presentation of the financial position
                    and results of the Company as of the end each such

                                        5

<PAGE>

                                                                   FORM OF
                                                                   WARRANT

                    period. Any dispute between a holder and the Company in
                    regard to such a computation shall be referred to and
                    decided by the Company's then engaged firm of independent
                    certified public accountants, which shall be a firm of
                    recognized national reputation (the "Accounting Firm"). The
                    computations of the Accounting Firm shall be final and
                    binding on the Company and the Holder.

              (7)   Whenever the Exercise Price is adjusted, as herein provided,
                    the Company shall promptly cause a notice setting forth the
                    adjusted Exercise Price and adjusted number of Warrant
                    Shares issuable upon exercise of each Warrant to be mailed
                    to the Holder, at its address appearing in the Warrant
                    Register, and shall cause a certified copy thereof to be
                    mailed to its transfer agent, if any.

              (8)   All calculations under this Section (f) shall be made to the
                    nearest cent or to the nearest Warrant Share, as the case
                    may be.

              (9)   In the event that at any time, as a result of an adjustment
                    made pursuant to this Section (f) above, the Holder of this
                    Warrant thereafter shall become entitled to receive any
                    shares of the Company, other than Common Stock, thereafter
                    the number of such other shares so receivable upon exercise
                    of this Warrant shall be subject to adjustment from time to
                    time in a manner and on terms as nearly equivalent as
                    practicable to the provisions with respect to the Common
                    Stock contained in subsection (1) above.

              (10)  Irrespective of any adjustments in the Exercise Price or the
                    number or kind of Warrant Shares purchasable upon exercise
                    of this Warrant, Warrants theretofore or thereafter issued
                    may continue to express the same price and number and kind
                    of shares as are stated in the similar Warrants initially
                    issuable pursuant to this Agreement.

         (g)  OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be
adjusted as required by the provisions of the foregoing Section, the Company
shall forthwith file in the custody of its Secretary or an Assistant Secretary
at its principal office and with its stock transfer agent, if any, an officer's
certificate showing the adjusted Exercise Price determined as herein provided,
setting forth in reasonable detail the facts requiring such adjustment,
including a statement of the number of additional shares of Common Stock, if
any, and such other facts as shall be necessary to show the reason for and the
manner of computing such adjustment. Each such officer's certificate shall be
made available at all reasonable times for inspection by the Holder or any
holder of a Warrant executed and/or delivered pursuant to Section (a) or Section
(d), and the Company shall, forthwith after each such adjustment, mail, by
certified mail, a copy of such certificate to the Holder or any such holder.

         (h)  NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be
outstanding, (i) if the Company shall pay any dividend or make any distribution
upon the Common Stock, or (ii) if the Company shall offer to the holders of
Common Stock for

                                        6

<PAGE>

                                                                   FORM OF
                                                                   WARRANT

subscription or purchase by them any shares of any class or any other rights, or
(iii) if any capital reorganization of the Company, reclassification of the
capital stock of the Company, consolidation or merger of the Company with or
into another corporation, sale, lease or transfer of all or substantially all of
the property and assets of the Company to another corporation, or voluntary or
involuntary dissolution, liquidation or winding up of the Company shall be
effected, then in any such case, the Company shall cause to be mailed by
certified mail to the Holder or any holder of a Warrant executed and/or
delivered pursuant to Section (a) or Section (d), at least 15 days prior to the
date specified in (x) or (y) below, as the case may be, a notice containing a
brief description of the proposed action and stating the date on which (x) a
record is to be taken for the purpose of such dividend, distribution or rights,
or (y) such reclassification, reorganization, consolidation, merger, conveyance,
lease, dissolution, liquidation or winding up is to take place and the date, if
any is to be fixed, as of which the holders of Common Stock or other securities
shall receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation or
winding up.

         (i)  SECURITIES LAW COMPLIANCE

              (1)   The Holder of the Warrant, by acceptance hereof,
                    acknowledges that the Warrant and the shares of Common Stock
                    to be issued upon exercise hereof or conversion thereof are
                    being acquired solely for the Holder's own account and not
                    as a nominee for any other party, and for investment, and
                    that the Holder will not offer, sell, transfer, assign or
                    otherwise dispose of this Warrant or any shares of Common
                    Stock to be issued upon exercise hereof or conversion
                    thereof except under circumstances that will not result in a
                    violation of the Act or any state securities laws. Upon
                    exercise of the Warrant, the Holder shall, if requested by
                    the Company, confirm in writing, in a form satisfactory to
                    the Company, that the shares of Common Stock so purchased
                    are being acquired solely for the Holder's own account and
                    not as a nominee for any other party, for investment, and
                    not with a view toward distribution or resale.

              (2)   If appropriate, the Warrant and any Warrants issued upon
                    exercise or substitution or upon assignment or transfer
                    pursuant to Section (a) or Section (d), as the case may be,
                    and all shares of Common Stock issued upon exercise hereof
                    or conversion thereof shall be stamped or imprinted with
                    legends setting forth the restrictions on transfer arising
                    under applicable federal and state securities laws.

         (j)  REGISTRATION RIGHTS UNDER THE SECURITIES ACT OF 1933. The Holder
of this Warrant or of the Warrant Shares, upon execution thereof, shall be
entitled to the registration rights afforded under (1) Article 6 of the Series B
Stock Purchase and Warrant Agreement, dated as of the date hereof, among the
Company, the Holder and the other parties named therein, and (2) the
Registration Rights Agreement, dated as of the date hereof, among the Company,
the Holder and the other parties named therein.

                                        7

<PAGE>

                                                                   FORM OF
                                                                   WARRANT

         (k)  RIGHT TO CONVERT WARRANT INTO COMMON STOCK.

              (1)   Right to Convert. The Holder shall have the right to require
                    the Company to convert this Warrant provided in this Section
                    (k), into common stock (the "Net Conversion Right"). Upon
                    exercise of the Net Conversion Right, the Company shall
                    deliver to the Holder (without payment by the Holder of any
                    Exercise Price or of any other cash or consideration) that
                    number of shares of Common Stock equal to the quotient
                    obtained by dividing (x) the value of this Warrant at the
                    time the Conversion Right is exercised (determined by
                    subtracting the aggregate Exercise Price in effect
                    immediately prior to the exercise of the Conversion Right
                    from the aggregate fair market value of the shares of Common
                    Stock issuable upon exercise of this Warrant immediately
                    prior to the exercise of the Conversion Right) by (y) the
                    fair market value of one share of Common Stock immediately
                    prior to the exercise of the Conversion Right.

              (2)   Method of Exercise. The Net Conversion Right may be
                    exercised by the Holder by the surrender of this Warrant at
                    the principal office of the Company together with a written
                    statement specifying that the Holder thereby intends to
                    exercise the Net Conversion Right. Certificates for the
                    shares of Common Stock issuable upon exercise of the Net
                    Conversion Right shall be delivered to the Holder within
                    five (5) days following the Company's receipt of this
                    Warrant together with the aforesaid written statement.

              (3)   Determination of Fair Market Value. For purposes of this
                    Section (k), fair market value of a share of Common Stock as
                    of a particular date (the "Determination Date") shall be
                    determined in accordance with Section (c) of this Warrant.

         (l)  AMENDMENTS. Neither the Warrant nor any term hereof may be
changed, waived, discharged or terminated without the prior written consent of
the Holder.

         (m)  NO IMPAIRMENT. The Company will not avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Warrant and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of any
Holder.

         (n)  GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of North Carolina.

         (o)  NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first class mail,
postage prepaid, addressed (a) if to the Holder, c/o Camden Partners Holdings,
LLC, One South Street, Baltimore, Maryland 21202, Attention: Richard M. Johnston
and Richard M. Berkeley or (b) if to the Company, to

                                        8

<PAGE>

                                                                   FORM OF
                                                                   WARRANT

PharmaNetics, Inc., 9401 Globe Center Drive, Suite 140, Morrisville, NC 27560,
Attention: John P. Funkhouser, or at such other address as to the Company shall
have furnished to the Holder in writing.

                            [SIGNATURE PAGE FOLLOWS]

                                        9

<PAGE>

                                                                   FORM OF
                                                                   WARRANT

         IN WITNESS WHEREOF, PharmaNetics, Inc. has caused this Warrant to be
executed by its officer thereunto duly authorized.

Dated:   May 1, 2003

                                           PHARMANETICS, INC.:

                                           By: _________________________________
                                           Name: _______________________________
                                           Title: ______________________________

                                       10

<PAGE>

                                                                   FORM OF
                                                                   WARRANT

                                  PURCHASE FORM

                                        Dated ___________________, 200_

         The undersigned hereby irrevocably elects to exercise its rights
pursuant to this Warrant to the extent of purchasing ______ shares of Common
Stock of __________ __________, and hereby makes payment of $___________, in
cash, in payment of the exercise price thereof.

         The undersigned hereby irrevocably elects to exercise its rights
pursuant to this Warrant to the extent of purchasing _____ shares of Common
Stock and hereby authorizes you to deliver such shares of Common Stock for sale
to ___________, and to retain from the proceeds of such sale $__________, in
cash, in payment of the exercise price thereof and to remit to the undersigned
the balance of such proceeds.

                     INSTRUCTIONS FOR REGISTRATION OF STOCK

Name ___________________________________________________________________________
              (Please typewrite or print in block letters)

Address ________________________________________________________________________

Signature ______________________________________________________________________

                                 ASSIGNMENT FORM

         FOR VALUE RECEIVED, _________________________________________ hereby
sells, assigns and transfers unto

Name ___________________________________________________________________________
              (Please typewrite or print in block letters)

Address ________________________________________________________________________

the right to purchase Common Stock of PharmaNetics, Inc. (the "Company"),
represented by this Warrant to the extent of __________ shares as to which such
right is exercisable and does hereby irrevocably constitute and appoint
_____________________________ as Attorney, to transfer the same on the books of
the Company with full power of substitution in the premises.

Date ___________, 200_

Signature ______________________________________________________________________

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