Document:

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                                                                    EXHIBIT 10.8

                              MERGER AGREEMENT AND
                             PLAN OF REORGANIZATION

                                  BY AND AMONG

                                    CTI, INC.
                         CTI / PETNET MERGER CORP., AND
                    P.E.T.NET PHARMACEUTICAL SERVICES, INC.,

         This MERGER AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), is
made and entered into this 10th day of October 2000, by and among CTI, INC., a
Tennessee corporation ("CTI"), CTI / PETNET MERGER CORP., a Tennessee
corporation ("Merger Corp"), and P.E.T.NET PHARMACEUTICAL SERVICES, INC., a
Tennessee corporation ("P.E.T.Net").

                                    RECITALS:

         A.       The parties hereto wish to provide for the merger of P.E.T.Net
with and into Merger Corp (the "Merger"), pursuant to which Merger Corp will be
the surviving entity, upon the terms and conditions set forth in the Plan of
Merger attached hereto as EXHIBIT A (the "Plan of Merger") and the terms and
conditions set forth herein.

         B.       CTI, Merger Corp and P.E.T.Net intend that the Merger qualify
and be treated as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended.

                                   AGREEMENT:

         IN CONSIDERATION OF the foregoing recitals and the mutual agreements
contained herein, the parties hereto agree as follows:

         1.       MERGER.

                  (a)      Subject to, and upon, the terms and conditions set
forth in this Agreement, the parties hereto agree to effect the Merger of
P.E.T.Net with and into Merger Corp in accordance with the Tennessee Business
Corporation Act (the "Tennessee Corporation Act").

                  (b)      At the Effective Date (as defined below), P.E.T.Net
shall be merged with and into Merger Corp and the separate existence of
P.E.T.Net shall thereupon cease. Merger Corp shall be the surviving entity of
the Merger. Merger Corp, with all its purposes, objects, rights, privileges,
powers and franchises, shall continue unaffected and unimpaired by the Merger.

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                  (c)      The Merger has been approved by (i) the Board of
Directors of CTI, (ii) the Board of Directors of Merger Corp, and (iii) the
Board of Directors of P.E.T.Net. Upon the execution and delivery of this
Agreement, the Merger will be submitted to the shareholders of P.E.T.Net for
approval. Upon approval of the Merger by the shareholders of P.E.T.Net as
provided in SECTION 6, Merger Corp and P.E.T.Net will prepare, execute and file
(i) Articles of Merger under the Tennessee Corporation Act in the form attached
hereto as EXHIBIT B, to be filed with the Secretary of State of the State of
Tennessee; (ii) and the Plan of Mercer to be attached to and filed with the said
Articles of Merger. The Merger shall be effective upon the filing of such
Articles of Merger with the Secretary of State of the State of Tennessee, or at
such time thereafter as may be provided in the said Articles of Merger (the
"Effective Date").

         2.       EFFECT OF MERGER.

                  (a)      At the Effective Date, P.E.T.Net shall be merged with
and into Merger Corp, and the separate existence of P.E.T.Net shall thereupon
cease. Merger Corp shall be the surviving entity. The existence of Merger Corp.
with all its purposes, objects, rights, privileges, powers and franchises, shall
continue unaffected and unimpaired by the Merger.

                  (b)      All property, privileges, and powers of P.E.T.Net
shall be vested in Merger Corp without reversion or impairment.

                  (c)      All liabilities, debts, obligations and duties of
P.E.T.Net shall be vested in Merger Corp, and Merger Corp shall after the
Effective Date be responsible for all such liabilities, debts, obligations and
duties.

                  (d)      Any proceeding pending by or against P.E.T.Net may be
continued as if the Merger did not occur, or Merger Corp, as the surviving
entity, may be substituted in the proceeding for P.E.T.Net.

                  (e)      Except as provided in SECTION 2(F) below, the charter
and bylaws of Merger Corp as existing and constituted immediately prior to the
Effective Date shall remain, be and constitute the charter and bylaws of Merger
Corp, as the surviving entity.

                  (f)      The name of Merger Corp, as the surviving entity,
shall as a result of the Merger be changed to P.E.T.Net Pharmaceuticals, Inc.

                  (g)      If, at any time after the Effective Date-Merger Corp
shall consider or be advised that any deeds, bills of sale, assignments,
assurances or any other actions or things are necessary or desirable to vest,
perfect or confirm of record or otherwise in Mercer Corp its right, title or
interest in, to or under any of the rights, properties or assets of P.E.T.Net
acquired or to be acquired by Merger Corp as a result of, or in connection with,
the Merger or to otherwise carry out this Agreement,

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the officers of Merger Corp, or any one of them, shall and will be authorized to
execute and deliver, in the name and on behalf of the parties hereto or
otherwise, all such deeds, bills of sale, assignments and assurances and to take
and do, in the name and on behalf of the parties hereto or otherwise, all such
other actions and things as may be necessary or desirable to vest, perfect or
confirm any and all right, title and interest in, to and under such rights,
properties or assets in Merger Corp or to otherwise carry out this Agreement.

         3.       CONVERSION OF SHARES. All of the outstanding shares of stock
of P.E.T.Net shall be exchanged for and converted into shares of CTI, except as
provided below. The manner and basis of converting all outstanding shares of
stock of P.E.T.Net into shares of stock of CTI shall be as set forth in this
SECTION 3. As a result of the Merger, CTI common stock will be issued to the
shareholders of P.E.T.Net, as provided below.

                  (a)      As of the Effective Date, by virtue of the Merger,
and without any action on the part of CTI, Merger Corp., P.E.T.Net or any
shareholder of P.E.T.Net, each then issued and outstanding share of stock of
P.E.T.Net will be canceled and retired and converted into common stock of CTI as
follows:

                           (i)      The current shareholders of P.E.T.Net and
their P.E.T.Net shares are as set forth on SCHEDULE 3(A)(I) attached hereto. The
issued and outstanding shares of stock of P.E.T.Net, except for the P.E.T.Net
shares held by CTI, CTI Services, Inc. and Dissenting Shareholders (as defined
in SECTION 4), shall be converted into shares of common stock of CTI on the
basis of 3.6875 shares of P.E.T.Net common stock for one (1) share of CTI common
stock.

                           (ii)     The current participants under the P.E.T.Net
Amended and Restated Long-Term Incentive Plan who have the right to receive
common stock in P.E.T.Net in the event of a merger in which P.E.T.Net is not the
surviving entity ("Capital Event Stock") are as set forth on SCHEDULE 3(A)(II).
The shares of Capital Event Stock shall be converted into shares of common stock
of CTI on the basis of 3.6875 shares of Capital Event Stock for one (1) share of
CTI common stock.

                           (iii)    All common and preferred shares of P.E.T.Net
stock and all warrants held by CTI and CTI Services, Inc. prior to the Merger
shall be canceled and shall cease to exist from and after the Effective Date.

                  (b)      Prior to the date of this Agreement, P.E.T.Net made a
commitment to issue stock options in P.E.T.Net to certain of its employees,
officers and directors (the "Employee Stock Options") under the P.E.T.Net
Amended and Restated Long-Term Incentive Plan as set forth on SCHEDULE 3(B). As
a result of the Merger, the Employee Stock Options will be canceled and
converted into the right to be issued fully vested stock options to acquire CTI
common stock ("CTI Stock Options") based on the same conversion ratio set forth
above in SECTION 3(A)(I) and 3(A)(II). The exercise price for the CTI Stock
Options shall equal $5.63 per share of

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CTI common stock. The CTI Stock Options shall be exercisable into whole shares
of CTI common stock only. No fractional shares of CTI common stock shall be
issued upon the exercise of a CTI Stock Option, and no credit will be given to a
fractional share that may result from the conversion ratio between Employee
Stock Options and CTI Stock Options. Following the Effective Date and completion
of all legal compliance, CTI shall deliver to each holder of Employee Stock
Options as set forth on SCHEDULE 3(B) a CTI Stock Option pursuant to the CTI
Stock Option Plan on terms and conditions consistent with this Agreement.

                  (c)      Following the Effective Date, Merger Corp shall
deliver to each shareholder of P.E.T.Net and each holder of Capital Event Stock
entitled thereto one or more certificates representing the shares of common
stock of CTI to which such shareholder and holder of Capital Event Stock is
entitled. The CTI common stock certificates shall be promptly delivered after
the P.E.T.Net shareholder or holder of Capital Event Stock has delivered his
certificates of P.E.T.Net stock or Grant Agreements to Capital Event Stock to
Merger Corp for cancellation. Pending the delivery of the P.E.T.Net stock
certificates by a P.E.T.Net shareholder or the Grant Agreement by a holder of
Capital Event Stock after the Effective Date, such P.E.T.Net stock and Capital
Event Stock shall represent shares of common stock in CTI, in which it has been
converted as a part of the Merger.

                  (d)      Following the Merger, CTI shall hold all issued and
outstanding shares of stock of Merger Corp.

                  (e)      Fractional shares of CTI common stock will not be
issued. Each holder of P.E.T.Net and each holder of Capital Event Stock eligible
to receive a fractional interest in a share of CTI common stock shall receive a
cash distribution in lieu of such fractional share in the amount obtained by
multiplying such fraction by $5.63. No interest shall be payable with respect to
payment of such cash distribution.

                  (f)      The shares of CTI common stock received by the
P.E.T.Net shareholders and holders of Capital Event Stock pursuant to the Merger
and the shares of CTI common stock received by holders of Employee Stock Options
upon the exercise of CTI Stock Options after the Merger shall be subject to the
transfer restrictions set forth on EXHIBIT C, and the holders of shares of CTI
common stock received pursuant to the Merger or upon the exercise of CTI Stock
Options after the Merger shall be subject to the non-competition restrictions
set forth on EXHIBIT C. The CTI shares of common stock received by the P.E.T.Net
shareholders and holders of Capital Event Stock pursuant to the Merger and the
shares of CTI common stock received by holders of Employee Stock Options upon
the exercise of CTI Stock Options after the Merger shall bear a legend
reflecting the transfer restrictions set forth on EXHIBIT C. Said transfer and
non-competition restrictions shall, at CTI's option, be reflected in either or
both (i) the Bylaws of CTI to be in effect as of the Effective Date and (ii) in
an agreement executed by the P.E.T.Net shareholders and holders of Capital Event
Stock as a condition to receiving their shares of CTI common stock pursuant to
the Merger and in an agreement executed by the holder of Employee

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Stock Options as a condition to receiving shares of CTI common stock upon the
exercise of CTI Stock Options after the Merger.

         4.       DISSENTING SHAREHOLDERS. Notwithstanding anything to the
contrary contained in this Agreement, holders of shares of P.E..T.Net stock with
respect to which dissenters' rights, if any, are granted by reason of the Merger
under the Tennessee Corporation Act and who do not vote in favor of the Merger
and otherwise comply with the Tennessee Corporation Act ("Dissenting
Shareholders"), shall not be entitled to shares of CTI stock pursuant to SECTION
3, unless and until the Dissenting Shareholder shall have failed to perfect
or-shall have effectively withdrawn or lost his right to dissent from the Merger
under the Tennessee Corporation Act, and shall be entitled to receive only the
payment provided for pursuant to the Tennessee Corporation Act. If any such
Dissenting Shareholder shall have failed to perfect or shall have effectively
withdrawn or lost his dissenters' rights under the Tennessee Corporation Act,
such Dissenting Shareholder's P.E.T.Net stock shall thereupon be deemed to have
been automatically converted into, as of the Effective Date, CTI common stock
pursuant to SECTION 3.

         5.       THE SURVIVING ENTITY. None of the issued and outstanding
shares of stock of Merger Corp shall be converted as a result of the Merger. All
such shares shall remain issued and outstanding shares of common stock of Merger
Corp, as the surviving entity of the Merger. The board of directors and officers
of P.E.T.Net immediately prior to the Effective Date shall become the board of
directors and officers of Merger Corp immediately after the Effective Date.

         6.       APPROVAL OF SHAREHOLDERS. This Agreement shall be submitted to
the shareholders of P.E.T.Net as provided by the Tennessee Corporation Act at a
meeting called for that purpose. There shall be required for the adoption of
this Agreement the affirmative vote of the holders of at least a majority of all
the shares of P.E.T.Net stock issued and outstanding and entitled to vote.
Furthermore, unless otherwise agreed to by CTI in writing, P.E.T.Net
shareholders holding at least ninety percent (90%) of the number of shares of
P.E.T.Net common stock shall not have dissented to the Merger and P.E.T.Net
shall not have or be required to transfer ten percent (10%) or more of the fair
market value of its net assets or thirty percent (30%) or more of the fair
market value of its gross assets to third parties, including dissenting
shareholders, prior to or as a result of the Merger.

         7.       REPRESENTATIONS AND WARRANTIES OF P.E.T.NET. P.E.T.Net
represents and warrants that:

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                  (a)      CORPORATE ORGANIZATION AND GOOD STANDING. P.E.T.Net
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Tennessee, and is qualified to do business as a foreign
corporation in each jurisdiction, if any, in which its property or business
requires such qualification.

                  (b)      CAPITALIZATION. P.E.T.Net's authorized capital stock
consists of 25,000,000 shares of common stock and 25,000,000 shares of preferred
stock, of which 14,941,355 shares of common stock and 2,222,222 shares of
preferred stock are issued and outstanding, fully paid and nonassessable. There
are no options, warrants, or rights outstanding to purchase shares of P.E.T.Net
capital stock, except for (i) the warrant held by CTI to purchase 2,810,315
shares of common stock, (ii) 1,005,121 shares of Capital Event Stock held by
participants under the P.E.T.Net Amended and Restated Long-Term Incentive Plan,
and (iii) employee stock options to acquire up to 1,502,282 shares of P.E.T.Net
common stock, which has been agreed to by the P.E.T.Net board of directors but
which P.E.T.Net has not yet granted to its employees.

                  (c)      SUBSIDIARIES. P.E.T.Net has no subsidiaries.

                  (d)      FINANCIAL STATEMENTS. P.E.T.Net's audited financial
statements as of September 30, 1999, with related balance sheets and statements
of income and retained earnings for the period then ended, and the unaudited
financial statements, with related balance sheets and statements of income and
retained earnings for the period ended June 30, 2000, copies of which have been
delivered by P.E.T.Net to CTI, fairly present the financial condition of
P.E.T.Net as of said dates and the results of its operations for the periods
then ended, in conformity with generally accepted accounting principles
consistently applied for the periods covered.

                  (e)      ABSENCE OF UNDISCLOSED LIABILITIES. Except to the
extent reflected or reserved against in P.E.T.Net's balance sheet as of June 30,
2000, P.E.T.Net did not have at that date any liabilities or obligations
(secured, unsecured, contingent, or otherwise) of a nature customarily reflected
in a corporate balance sheet prepared in accordance with generally accepted
accounting principles.

                  (f)      ABSENCE OF CERTAIN CHANGES. Except as heretofore
disclosed in writing by P.E.T.Net to CTI, there has been no material adverse
change in the business, properties, financial condition or net worth of
P.E.T.Net since June 30, 2000.

                  (g)      LITIGATION, AND SO FORTH. Except as heretofore
disclosed in writing by P.E.T.Net to CTI, there is no litigation, proceeding, or
investigation pending or, to the knowledge of P.E.T.Net, threatened against
P.E.T.Net that, if successful, might result in a material adverse change in the
business, properties, or financial condition of P.E.T.Net.

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                  (h)      CONTRACTS. Except as heretofore disclosed in writing
by P.E.T.Net to CTI, P.E.T.Net is not a party to any material contract not in
the ordinary course of business that is to be performed in whole or in part at
or after the date of this Agreement.

                  (i)      TITLE. P.E.T.Net has good and marketable title to all
the real property and good and valid title to all other property included in the
balance sheet of P.E.T.Net as of June 30, 2000, other than property disposed of
in the ordinary course of business after said date. Except as heretofore
disclosed in writing by P.E.T.Net to CTI, the properties of P.E.T.Net are not
subject to any mortgage, encumbrance, or lien of any kind except minor
encumbrances that do not materially interfere with the use of the property in
the conduct of the business of P.E.T.Net.

                  (j)      TAX RETURNS. Except as heretofore disclosed in
writing by P.E.T.Net to CTI, the provisions for federal and state taxes
reflected in the financial, statements referred to in SECTION 7(D) hereof are
adequate to cover any such taxes that may be assessed against P.E.T.Net in
respect of its business and its operations during the periods covered by said
financial statements and all prior periods.

                  (k)      NO VIOLATION. Consummation of the Merger will not
constitute or result in a breach or default under any provision of any charter,
bylaw, indenture, mortgage, lease, or agreement, or any order, judgment, decree,
law, or regulation to which any property of P.E.T.Net is subject or by which
P.E.T.Net is bound, except for breaches or defaults that in the aggregate would
not have a materially adverse effect on P.E.T.Net's properties, business
operations, or financial condition.

                  (1)      AUTHORIZATION. Execution of this Agreement has been
duly authorized and approved by P.E.T.Net's board of directors.

                  (m)      STATEMENTS TRUE AND CORRECT. None of the information
prepared by or provided by P.E.T.Net regarding P.E.T.Net which is included or to
be included in the Private Offering Memorandum and Proxy Statement to be mailed
to the P.E.T.Net shareholders in connection with the shareholders' meeting to
vote on the Merger, and any other documents to be filed with the Securities and
Exchange Commission or any other regulatory authority in connection with the
transaction contemplated herein, will, at the respective times such documents
are filed, and, with respect to the Private Offering Memorandum and Proxy
Statement when first mailed to the P.E.T.Net shareholders be false or misleading
with respect to any material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, or, in the case of the Private Offering Memorandum
and Proxy Statement or any amendment thereof or supplement thereto, at the time
of the shareholders' meeting, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the shareholders' meeting.

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         8.       REPRESENTATIONS AND WARRANTIES OF CTI. CTI represents and
warrants that:

                  (a)      CORPORATE ORGANIZATION AND GOOD STANDING. CTI is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Tennessee, and is qualified to do business as a foreign
corporation in each jurisdiction, if any, in which its property or business
requires such qualification.

                  (b)      CAPITALIZATION. CTI's authorized capital stock
consists of 30,000,000 shares of common stock and 1,000,000 shares of preferred
stock, of which 17,209,884 shares of common stock, 400,000 shares of Series A
redeemable preferred stock and 200,000 shares of Series B convertible preferred
stock are issued and outstanding, fully paid and nonassessable. There are no
options, warrants, or rights outstanding to purchase shares of CTI capital stock
from CTI, except for (i) warrants and other rights held by First Union Capital
Partners, Inc. and (ii) qualified or non-qualified stock options which were
granted to employees of CTI by CTI's Stock Option Committee.

                  (c)      FINANCIAL STATEMENTS. CTI's audited financial
statements as of September 30, 1999, with related balance sheets and statements
of income and retained earnings for the period then ended, and the unaudited
financial statements, with related balance sheets and statements of income and
retained earnings for the period ended June 30, 2000, copies of which have been
delivered by CTI to P.E.T.Net, fairly present the financial condition of CTI as
of said dates and the results of its operations for the periods then ended, in
conformity with generally accepted accounting principles consistently applied
for the periods covered.

                  (d)      ABSENCE OF UNDISCLOSED LIABILITIES. Except to the
extent reflected or reserved against in CTI's balance sheet as of June 30, 2000,
CTI did not have at that date any liabilities or obligations (secured,
unsecured, contingent, or otherwise) of a nature customarily reflected in a
corporate balance sheet prepared in accordance with generally accepted
accounting principles.

                  (e)      ABSENCE OF CERTAIN CHANGES. Except as heretofore
disclosed in writing by CTI to P.E.T.Net, there has been no material adverse
change in the business, properties, financial condition or net worth of CTI
since June 30, 2000.

                  (f)      LITIGATION, AND SO FORTH. Except as heretofore
disclosed in writing by CTI to P.E.T.Net, there is no litigation, proceeding, or
investigation pending or, to the knowledge of CTI, threatened against CTI that,
if successful, might result in a material adverse change in the business,
properties, or financial condition of CTI.

                  (g)      CONTRACTS. Except as heretofore disclosed in writing
by CTI to P.E.T.Net, CTI is not a party to any material contract not in the
ordinary course of business that is to be performed in whole or in part at or
after the date of this Agreement.

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                  (h)      TITLE. CTI has good and marketable title to all the
real property and good and valid title to all other property included in the
balance sheet of CTI as of June 30, 2000, other than property disposed of in the
ordinary course of business after said date. Except as heretofore disclosed in
writing by CTI to P.E.T.Net, the properties of CTI are not subject to any
mortgage, encumbrance, or lien of any kind except minor encumbrances that do not
materially interfere with the use of the property in the conduct of the business
of CTI.

                  (i)      TAX RETURNS. Except as heretofore disclosed in
writing by P.E.T.Net to CTI, the provisions for federal and state taxes
reflected in the financial statements referred to in SECTION 8(C) hereof are
adequate to cover any such taxes that may be assessed against CTI in respect of
its business and its operations during the periods covered by said financial
statements and all prior periods.

                  (j)      NO VIOLATION. Consummation of the Merger will not
constitute or result in a breach or default under any provision of any charter,
bylaw, indenture, mortgage, lease, or agreement, or any order, judgment, decree,
law, or regulation to which any property of CTI is subject or by which CTI is
bound, except for breaches or defaults that in the aggregate would not have a
materially adverse effect on CTI's properties, business operations, or financial
condition.

                  (k)      AUTHORIZATION. Execution of this Agreement has been
duly authorized and approved by CTI's board of directors.

         9.       CONDUCT OF P.E.T.NET PENDING THE EFFECTIVE DATE. P.E.T.Net
covenants that between the date of this Agreement and the Effective Date:

                  (a)      CHARTER AND BYLAWS. No change will be made in
P.E.T.Net's charter or bylaws.

                  (b)      CAPITALIZATION, AND SO FORTH. P.E.T.Net will not make
any change in its authorized or issued capital stock, declare or pay any
dividend or other distribution, or issue, encumber, purchase, or otherwise
acquire any of its capital stock.

                  (c)      SHAREHOLDERS' MEETING. The P.E.T.Net board of
directors will submit this Agreement to the shareholders of P.E.T.Net at a
meeting as contemplated by SECTION 6.

                  (d)      PRIVATE OFFERING MEMORANDUM AND PROXY STATEMENT. In
connection with the shareholders' meeting contemplated by SECTION 6, P.E.T.Net
shall (i) assist CTI in the preparation of a Private Offering Memorandum and
Proxy Statement to be delivered to the P.E.T.Net shareholders; (ii) mail or
cause to be mailed such Private Offering Memorandum and Proxy Statement to its
shareholders; and (iii) furnish CTI with all information concerning P.E.T.Net
that CTI may reasonably request in connection with the preparation of the
Private Offering Memorandum and Proxy Statement.

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                  (e)      CONDUCT OF BUSINESS. P.E.T.Net will use its best
efforts to maintain and preserve its business organization, employee
relationships, and goodwill intact, and will not, without the written consent of
CTI, enter into any material commitment except in the ordinary course of
business or increase, directly or indirectly, the compensation of any officer or
employee whose annual rate of compensation after the increase will exceed
$20,000.

         10.      CONDUCT OF CTI PENDING THE EFFECTIVE DATE. CTI covenants that
between the date of this Agreement and the Effective Date:

                  (a)      CHARTER AND BYLAWS. No change will be made in CTI's
charter or bylaws except as contemplated herein.

                  (b)      CAPITALIZATION, AND SO FORTH. Without P.E.T.Net's
prior consent, CTI will make no change in its authorized or issued capital
stock, declare or pay any dividend or other distribution, or issue, encumber,
purchase, or otherwise acquire any of its capital stock.

                  (c)      CONDUCT OF BUSINESS. CTI will use its best efforts to
maintain and preserve its business organization, employee relationships, and
goodwill intact, and will not, without the written consent of P.E.T.Net, enter
into any material commitment except in the ordinary course of business.

         11.      CONDITIONS PRECEDENT TO OBLIGATION OF P.E.T.NET. P.E.T.Net's
obligation to consummate the Merger shall be subject to fulfillment on or before
the Effective Date of each of the following conditions, unless waived in writing
by P.E.T.Net:

                  (a)      CTI'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of CTI set forth in SECTION 8 hereof shall be
true and correct at the Effective Date as though made at and as of that date,
except as affected by transactions contemplated hereby.

                  (b)      CTI'S COVENANTS. CTI shall have performed all
covenants required by this Agreement to be performed by it on or before the
Effective Date.

                  (c)      SHAREHOLDER APPROVAL. This Agreement shall have been
adopted by the necessary vote of the holders of P:E.T.Net stock entitled to vote
as set forth in SECTION 6 hereof.

                  (d)      OPINION OF CTI'S COUNSEL. CTI shall have delivered to
P.E.T.Net the opinion of its counsel, prior to the Effective Date, in form and
substance satisfactory to counsel for P.E.T.Net, to the effect that:

                           (i)      CTI is a corporation duly organized, validly
existing, and in good standing, and is duly qualified to do business as a
foreign corporation in each

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jurisdiction (if any) in which, to the best knowledge of counsel, its property
or business requires such qualification.

                           (ii)     CTI's authorized capital stock is as set
forth in SECTION 8(B) hereof.

                           (iii)    The execution and consummation of this
Agreement have been duly authorized and approved by CTI's board of directors,
and consummation of this Agreement will not constitute or result in any breach
or default of the character described in SECTION 8(J) hereof of which counsel
has knowledge.

                           (iv)     Counsel has no knowledge of any liabilities
or obligations of the type described in SECTION 8(D) hereof; any litigation,
proceeding, or investigation of the type described in SECTION 8(F) hereof; or
any defects in title or mortgages, encumbrances, or liens of the type described
in SECTION 8(H) hereof.

                           (v)      The shares of CTI common stock into which
P.E.T.Net common stock is to be converted pursuant to this Agreement will, upon
such conversion, be duly and validly authorized and issued, and will be fully
paid and nonassessable.

                  (e)      OFFICER'S CERTIFICATE. Prior to execution of the Plan
of Merger, CTI shall deliver to P.E.T.Net an Officer's Certificate providing
that (i) each of the representations and warranties contained in SECTION 8 is
true and correct; (ii) all covenants contained in SECTION 10 have been performed
or satisfied; and (iii) there has been no material adverse chance in the
financial condition or net worth of CTI since June 30, 2000.

                  (f)      PROXY INFORMATION. None of the information with
respect to CTI that shall have been furnished by or on behalf of CTI for
inclusion in the proxy solicitation material sent to the shareholders of
P.E.T.Net in connection with the meeting of such shareholders to be held in
accordance with SECTION 6 hereof shall be false or, misleading in any material
respect or shall fail to state any fact necessary to make the statements therein
not false or misleading in any material respect.

         12.      CONDITIONS PRECEDENT TO OBLIGATION OF CTI. CTI's obligation to
consummate the Merger shall be subject to fulfillment on or before the Effective
Date of each of the following conditions, unless waived in writing by CTI:

                  (a)      P.E.T.NET'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of P.E.T.Net set forth in SECTION 7 hereof shall
be true and correct at the Effective Date as though made at and as of that date,
except as affected by transactions contemplated hereby.

                  (b)      P.E.T.NET'S COVENANTS. P.E.T.Net shall have performed
all covenants required by this Agreement to be performed by it on or before the
Effective Date.

                                       11
<PAGE>

                  (c)      SHAREHOLDER APPROVAL. This Agreement shall have been
adopted by the necessary vote of the holders of P.E.T.Net stock entitled to vote
asset forth in SECTION 6 hereof.

                  (d)      DISSENTING SHAREHOLDERS OF P.E.T.NET. Unless
otherwise agreed to by CTI in writing, (i) the number of shares of common stock
of P.E.T.Net with respect to which objections to the Merger and demands for
payment of the fair value thereof shall have been made in accordance with the
Tennessee Corporation Act,, and with respect to which such demands shall not
have been withdrawn, shall not exceed ten percent (10%) of the number of shares
entitled to object and make such demand; and (ii) P.E.T.Net shall not have or be
required to transfer ten percent (10%) or more of the fair market value of, its
net assets or thirty percent (30%) or more of the fair market value of its gross
assets to third parties, including dissenting shareholders, prior to or as a
result of the Merger.

                  (e)      OPINION OF P.E.T.NET'S COUNSEL. P.E.T.Net shall have
delivered to CTI the opinion of its counsel, prior to the Effective Date, in
form and substance satisfactory to counsel for CTI, to the effect that:

                           (i)      P.E.T.Net is a corporation duly organized,
validly existing, and in good standing, and is duly qualified to do business as
a foreign corporation in each jurisdiction (if any) in which, to the best
knowledge of counsel, its property or business requires such qualification.

                           (ii)     P.E.T.Net's authorized capital stock is as
set forth in SECTION 7(B) hereof.

                           (iii)    The execution and consummation of this
Agreement have been duly authorized and approved by P.E.T.Net's board of
directors and shareholders, and consummation; of this Agreement will not
constitute or result in any breach or default of the character described in
SECTION 7(K) hereof of which counsel has knowledge.

                           (iv)     Counsel has no knowledge of any liabilities
or obligations of the type described in SECTION 7(E) hereof; any litigation,
proceeding, or investigation of the type described in SECTION 7(G) hereof; or
any defects in title or mortgages, encumbrances, or liens of the type described
in SECTION 7(I) hereof.

                           (v)      Counsel has no knowledge of any options,
warrants, or rights to acquire shares of P.E.T.Net common stock except those
held by CTI, CTI Services, Inc. or participants under the P.E.T.Net Amended and
Restated Long-Term Incentive Plan.

                  (f)      OFFICER'S CERTIFICATE. Prior to execution of the Plan
of Merger, P.E.T.Net shall deliver to CTI an Officer's Certificate providing
that (i) each of the representations and warranties contained in SECTION 7 is
true and correct; (ii) all

                                       12
<PAGE>

covenants contained in SECTION 9 have been performed or satisfied; and (iii)
there has been no material adverse change in the financial condition or net
worth of P.E.T.Net since June 30, 2000.

                  (g)      EFFECTIVE DATE. Approval of the Merger by the
shareholders of P.E.T.Net and the filing of Articles of Merger with the
Secretary of State of Tennessee effectuating the Merger shall have occurred on
or before October 30, 2000.

         13.      ACCESS. From the date hereof to the Effective Date, CTI, and
P.E.T.Net shall provide each other with such information and permit each other's
officers and representatives such access to its properties and books and records
as the other may from time to time reasonably request. If the Merger is not
consummated, all documents received in connection with this Agreement shall be
returned to the party furnishing the same; and all information so received by
P.E.T.Net shall be treated as confidential; all information so received by CTI
shall be treated by CTI in accordance with its current rights and duties as
holder of a majority of the outstanding shares of capital stock of P.E.T.Net.

         14.      SECURITIES LAW COMPLIANCE. CTI will take such action required
to be taken under applicable securities laws and CTI will also take such action
to secure all necessary exemptions or clearances under all securities laws
applicable to (i) the Merger and (ii) the issuance of CTI common stock pursuant
thereto. CTI will promptly deliver to P.E.T.Net copies of any filings made by
CTI or Merger Corp pursuant to this Section.

         15.      THIRD PARTY CONSENTS. Each party to this Agreement shall use
its best efforts to obtain, as soon as reasonably practicable; all permits,
authorizations, consents, waivers and approvals from third parties or
governmental authorities necessary to consummate this Agreement and the
transactions contemplated hereby, including,, without limitation, any permits,
authorizations, consents, waivers and approvals required in connection with the
Merger.

         16.      TERMINATION.

                  (a)      CIRCUMSTANCES OF TERMINATION. This Agreement may be
terminated (notwithstanding approval by the shareholders of P.E.T.Net):

                           (i)      By the mutual consent in writing of the
boards of directors of P.E.T.Net and CTI.

                           (ii)     By the board of directors of P.E.T.Net if
any condition provided in SECTION 11 hereof has not been satisfied or waived on
or before the Effective Date.

                           (iii)    By the board of directors of CTI if any
condition provided in SECTION 12 hereof has not been satisfied or waived on or
before the Effective Date.

                                       13
<PAGE>

                           (iv)     By the board of directors of CTI if the
Effective Date has not occurred by October 30, 2000.

                  (b)      EFFECT OF TERMINATION. In the event of a termination
of this Agreement pursuant to SECTION 16(A) hereof, each party shall pay the
costs and expenses incurred by it in connection with this Agreement and no party
(or any of its officers, directors, and shareholders) shall be liable to any
other party for any costs, expenses, damage, or loss of anticipated profits
hereunder.

         17.      GENERAL PROVISIONS.

                  (a)      ENTIRE AGREEMENT. This Agreement (including the
exhibits hereto and any other documents or instruments referred to herein)
constitutes the entire agreement, and supersedes all prior agreements and
undertakings, both oral and written, among the parties with respect to the
subject matter hereof.

                  (b)      NO THIRD-PARTY BENEFICIARIES. This Agreement is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.

                  (c)      AMENDMENTS. This Agreement may not be amended except
by an instrument in writing signed by each of the parties hereto.

                  (d)      GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Tennessee.

                  (e)      RESOLUTION OF DISPUTES. Any dispute, controversy or
claim arising out of or relating to this Agreement shall be resolved by binding
arbitration before a single arbitrator held in Knoxville, Tennessee in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. The arbitrator shall resolve the dispute as
expeditiously as practicable. The decision of the arbitrator shall be final,
binding and not appealable. The arbitrator shall have the authority to award
relief under legal or equitable principles, including interim or preliminary
relief, and to allocate responsibility for the costs of the arbitration.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction.

                  (f)      WAIVER OF COMPLIANCE. Any failure by any party to
this Agreement to comply with any obligation, covenant, agreement, or condition
contained herein may be expressly waived in writing by the other parties hereto,
but such waiver to failure to insist upon strict compliance shall not operate as
a waiver of, or estoppel with respect to any subsequent or other failure.

                  (g)      ASSIGNMENT. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit to the parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any of the rights, interests, or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of all the other
parties.

                                       14
<PAGE>

                  (h)      COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

                  (i)      SEVERABILITY. If any term or provision of this
Agreement is determined to be invalid, illegal or incapable of being enforced,
all other conditions and provisions hereof will nevertheless remain in full
force and effect so long as the economic substance of the transactions
contemplated hereby is not affected in any manner adverse to any party hereto.

                  (j)      FURTHER ASSURANCES. Each of the parties hereto agrees
that after the Effective Date it will from time to time, upon the reasonable
request of another party hereto, take such further action as the other may
reasonably request to carry out the transactions contemplated by this Agreement,
including, without limitation, the execution and delivery of all further
evidences and instruments of transfer and assignment.

                  (k)      EFFECTIVENESS. This Agreement shall have no force or
effect whatsoever unless and until the same shall have been executed and
delivered by each of the parties hereto.

         IN WITNESS WHEREOF, the parties thereto have duly executed this
Agreement as of the date first above written.

                               CTI, INC.

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

                               CTI/P.E.T.NET MERGER CORP

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

                               P.E.T.NET PHARMACEUTICAL SERVICES, INC.

                               By:         /s/Mark Rhoads
                                    --------------------------------------------
                                     Mark Rhoads
                                     President

                                       15<PAGE>
                                                                    EXHIBIT 10.9

--------------------------------------------------------------------------------

                          REGISTRATION RIGHTS AGREEMENT

                                     between

                                    CTI, INC.

                                       and

                       FIRST UNION CAPITAL PARTNERS, INC.

                         Dated as of September 30, 1999

--------------------------------------------------------------------------------

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                 Page No.
                                                                                                 --------
<S>         <C>                                                                                  <C>
SECTION 1.  Definitions..........................................................................   1
SECTION 2.  Securities Subject to this Agreement.................................................   2
SECTION 3.  Demand Registration..................................................................   3
SECTION 4.  Piggy-Back Registration..............................................................   5
SECTION 5.  Form S-3 Registration................................................................   5
SECTION 6.  Holdback Agreements..................................................................   6
SECTION 7.  Registration Procedures..............................................................   7
SECTION 8.  Registration Expenses................................................................  11
SECTION 9.  Indemnification; Contribution.......................................................   11
SECTION 10. Rules 144 and 144A..................................................................   14
SECTION 11. Limitation on Registration Rights of Others.........................................   15
SECTION 12. Miscellaneous.......................................................................   15

</TABLE>

<PAGE>

                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT is dated as of September 30, 1999
(this "Agreement"), by and between CTI, INC., a Tennessee corporation (the
"Company"), and FIRST UNION CAPITAL PARTNERS, INC., a Virginia corporation
(together with its successors and assigns, "FUCP"):

                              Statement of Purpose

         Pursuant to a Securities Purchase Agreement, dated as of the date
hereof, between the Company and FUCP (the "Securities Purchase Agreement"), the
Company issued to, FUCP shares of its Series A Redeemable Preferred Stock and
Series B Convertible Preferred Stock (the "Series B Preferred Stock") and a
Common Stock Purchase Warrant to purchase shares of the Common Stock of the
Company. FUCP has requested, as a condition precedent tots entering into the
Securities Purchase Agreement, that the Company provide, and the Company has
agreed to provide, to FUCP certain registration rights with respect to the
Registrable Securities (as hereinafter defined) owned by FUCP.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

         SECTION 1. Definitions. For the purposes of this Agreement, in addition
to the terms defined elsewhere in this Agreement, the following terms have the
meanings set forth below:

         "Approved Underwriter" shall have the meaning assigned thereto in
Section 3(d) hereof.

         "Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.

         "Common Stock" means the Common Stock, par value $0.01 per share, as
described in the Restated Charter of the Company as in effect on the date
hereof, and any other capital stock into which such Common Stock is reclassified
or reconstituted.

         "Company Underwriter" shall have the meaning assigned thereto in
Section 4 hereof.

         "Demand Registration" means a demand registration requested by the
Requesting Holders pursuant to Section 3 hereof.

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

         "Holders' Counsel" shall have the meaning assigned thereto in Section
7(a)(i) hereof.

<PAGE>

         "Initial Public Offering" means the initial public offering of Common
Stock pursuant to an effective registration statement under the Securities Act.

         "Inspector" shall have the meaning assigned thereto in Section
7(a)(viii) hereof.

         "NASD" means the National Association of Securities Dealers, Inc.

         "Person" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability company, government (or an agency or political subdivision
thereof) or other entity of any kind, and shall include any successor (by merger
or otherwise) of such entity.

         "Records" shall have the meaning assigned hereto in Section 7(a)(viii)
hereof.

         "Registration Expenses" shall have the meaning assigned thereto in
Section 8.

         "Registrable Securities" means all shares of Common Stock now or
hereafter acquired by any party hereto (including pursuant to Section 12(f)) or
its successors or assigns, whether pursuant to conversion or exercise of
securities convertible into Common Stock or options, warrants or other rights to
subscribe for Common Stock or otherwise, including shares of Common Stock issued
upon conversion of the Series B Preferred Stock and exercise of the Warrant, and
any other common equity securities of the Company issued in exchange for, upon a
reclassification of, or in a distribution with respect to, the Common Stock.

         "Requesting Holders" means the holders of at least a majority of the
Registrable Securities.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Warrant" means any Warrant issued to FUCP pursuant to the Securities
Purchase Agreement.

         SECTION 2. Securities Subject to this Agreement.

         (a)      Registrable Securities. For the purposes of this Agreement,
Registrable Securities will cease to be Registrable Securities when (i) a
registration statement covering such Registrable Securities has been declared
effective under the Securities Act by the Commission and such Registrable
Securities have been disposed of pursuant to such effective registration
statement or (ii) the entire amount of Registrable Securities proposed to be
sold in a single sale are, or in the opinion of counsel reasonably satisfactory
to the Company may be, distributed to the public in such single sale pursuant to
Rule 144 (or any successor provision then in force) under the Securities Act.

         (b)      Holders of Registrable Securities. A Person is deemed to be a
holder of Registrable Securities whenever such Person owns of record Registrable
Securities, or holds an option, warrant or other right to purchase, or a
security convertible into, Registrable Securities, whether or not such
acquisition or conversion has actually been

                                       2
<PAGE>

effected. If the Company receives conflicting instructions, notices or elections
from two or more Persons with respect to the same Registrable Securities, the
Company may act upon the basis of the instructions, notice or election received
from the registered owner of such Registrable Securities. Registrable Securities
issuable upon exercise of an option, warrant or other right or upon conversion
of another security shall be deemed outstanding for the purposes of this
Agreement.

         SECTION 3. Demand Registration.

         (a)      Demand Registration. The Requesting Holders may, at any time
after the earlier of (i) the Initial Public Offering or (ii) September 30, 2003,
make a written request for registration of Registrable Securities under the
Securities Act, and under the securities or blue sky laws of any jurisdiction
reasonably designated by such holders; provided, that (A) subject to Section
3(c) below, the Company will not be required to effect more than two
registrations at the request of the Requesting Holders pursuant to this Section
3(a), (B) the Company will not be required to effect such registration within
the period beginning sixty (60) days prior to the date the Company in good faith
expects to file a registration statement on its behalf covering a firm
commitment underwritten public offering and ending one hundred eighty (180) days
after the effective date of such registration statement (but in no event shall
the period of time for which any demand registration is delayed under this
clause (B) exceed two hundred forty (240) days and the Company shall give the
Requesting Holders prompt notice of its expectation to file a registration
statement and any change in such expectation), (C) the Company will not be
required to effect such registration if in the good faith opinion of the Board
of Directors such registration would be detrimental to the Company and its
shareholders (but the Board of Directors may in no event make such determination
more than one time hereunder and may delay such registration for a period not to
exceed six (6) months), (D) the Company will not be required to effect such
registration if in the good faith opinion of the Requesting Holders at the time
of such request, the aggregate gross proceeds from the sale of the Registrable
Securities to which the request relates shall not be equal to or greater than
$1,000,000, and (E) the Company will not be required to effect such registration
if such request is made more than five (5) years after the Initial Public
Offering.

         (b)      Company Obligation to Register. Each request for a Demand
Registration pursuant to Section 3(a) shall specify the amount of the
Registrable Securities proposed to be sold, the intended method of disposition
thereof and the jurisdictions in which registration is reasonably desired. Upon
a request for a Demand Registration, the Company shall (i) promptly and in any
event at least 30 days prior to the filing date, give written notice of such
request to all other holders of Registrable Securities and Common Stock (other
than Registrable Securities) (who shall, subject to subsection (c) hereof, be
entitled to participate in such registration on the same basis as the Requesting
Holders if such other holders respond in writing within 20 days of receipt of
such notice), and (ii) with reasonable promptness and in any event not later
than ninety (90) days after the Company's receipt of such request, file a
registration statement with the Commission relating to such Registrable
Securities and Common Stock (other than Registrable Securities) as to which such
request for a Demand Registration relates and use its best efforts to cause all
Registrable Securities and Common Stock (other than Registrable Securities) that
such

                                       3
<PAGE>

other holders have requested to be registered to be registered under the
Securities Act. A registration shall not constitute a Demand Registration until
it has become effective and remains continuously effective for a period of not
less than 12 months or such shorter period which will terminate when all
Registrable Securities and Common Stock (other than Registrable Securities)
covered by such Registration Statement (A) have been sold (but not before the
expiration of the ninety (90) day period referred to in Section 4(3) of the
Securities Act and Rule 174 thereunder, if applicable), or (B) may, in the
opinion of, counsel reasonably satisfactory to the Company, be distributed to
the public in a single sale pursuant to Rule 144 (or any successor provision
then in force) under the Securities Act. In any registration initiated as a
Demand Registration, the Company shall pay all Registration Expenses in
connection therewith, whether or not such Demand Registration becomes effective.

         (c)      Underwriting Procedures. If the Requesting Holders so elect,
the offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of a firm commitment underwritten offering and the managing
underwriter or underwriters selected for such offering shall be the Approved
Underwriter selected in accordance with Section 3(d). In such event, if the
Approved Underwriter advises the Company, which advice shall be confirmed in
writing, that in its opinion marketing considerations require a limitation on
the number of securities to be sold, the Company shall include in such
registration only the number of Registrable Securities which, in the good faith
opinion of such Underwriter, can be sold, selected in the following order:

                  (i)      first, the Registrable Securities requested to be
included by the Requesting Holders;

                  (ii)     second, the Registrable Securities requested to be
included by the other holders of Registrable Securities, pro rata, based on the
number of Registrable Securities requested to be included by each such holder;
and

                  (iii)    third, the Common Stock requested to be included by
holders of Common Stock (other than Registrable Securities), pro rata, based on
the shares of Common Stock requested to be included by each such holder.

         To the extent Registrable Securities held by the Requesting Holders are
excluded from the offering to be made pursuant to the Demand Registration
requested by the Requesting Holders, then the Requesting Holders shall have the
right to one additional Demand Registration under this Section 3 with respect to
any remaining Registrable Securities.

         (d)      Selection of Underwriters. In connection with requesting a
Demand Registration of Registrable Securities pursuant to Section 3(a), the
Requesting Holders may select and obtain an investment banking firm of first
class national reputation to act as the managing underwriter of the offering
(the "Approved Underwriter"); provided that the Approved Underwriter shall, in
any case, be acceptable to the Company in its reasonable judgment.

                                       4
<PAGE>

         SECTION 4. Piggy-Back Registration. If the Company proposes to file a
registration statement under the Securities Act with respect to an offering by
the Company for its own account, or an offering for the account of any
stockholder of the Company or any group of such stockholders (other than a
registration statement on Form S-4 or S-8 or any successor forms or any other
forms not available for registering capital stock for sale to the public), then
the Company shall give written notice of such proposed filing to each holder of
Registrable Securities at least 30 days before the filing date, and such notice
shall describe in detail the proposed registration and distribution (including
whether the offering will be underwritten and those jurisdictions where
registration under the securities or blue sky laws is intended) and offer such
holder the opportunity to register the number of Registrable Securities as such
holder may request. The Company shall use its best efforts, within 10 days of
the notice provided for in the preceding sentence, to cause the managing
underwriter or underwriters of a proposed underwritten offering (the "Company
Underwriter") to permit the holders of Registrable Securities who have requested
to participate in the registration for such offering to include such Registrable
Securities in such offering on the same terms and conditions as the securities
of the Company included therein, including execution of an underwriting
agreement in customary form. The Company shall pay all Registration Expenses in
connection with such registration statement, but each holder of Registrable
Securities shall be responsible for his, her or its proportionate share of
underwriting discounts and commissions. Notwithstanding the foregoing, if the
Company Underwriter delivers a written opinion to the holders of Registrable
Securities that marketing considerations require a limitation on the number of
securities to be sold, the Company shall include in such registration only that
number of Registrable Securities which, in the good faith opinion of the Company
Underwriter, can be sold, selected in the following order (except in connection
with a Demand Registration, which priority shall be governed by Section 3):

                  (i)      first, the securities to be sold by the Company for
its own account;

                  (ii)     second, the Registrable Securities requested to be
included by FUCP;

                  (iii)    third, the Registrable Securities requested to be
included by the other holders of the Registrable Securities, pro rata, based on
the number of Registrable Securities requested to be included by each such
holder; and

                  (iv)     fourth, the Common Stock to be sold by any other
stockholder or group of stockholders.

         SECTION 5. Form S-3 Registration.

         (a)      Requests for Registration, on Form S-3. After the Initial
Public Offering, the Company shall use its best efforts to qualify to register
securities on Form S-3 (or any successor to such form). After the Company has
qualified for the use of Form S-3, in addition to the rights contained in the
foregoing provisions of this Agreement, any holder of at least fifteen percent
(15%) of the Registrable Securities shall have the right to request the
registration of any such Registrable Securities on Form S-3. All such requests
shall be in writing and shall state the number of shares of Registrable
Securities to be disposed of and

                                       5
<PAGE>

the intended methods of disposition of such shares by such holder or holders;
provided, that the Company shall not be required to effect a registration
pursuant to this Section 5(a) unless the holders of Registrable Securities
requesting registration propose to dispose of shares of Registrable Securities
having an aggregate price to the public (before deducting underwriting discounts
and expenses of sale) of at least $1,000,000 and the Company shall not be
required to effect more than two such registrations per calendar year. If the
Company shall receive from a holder of Registrable Securities a written request
that the Company effect a registration on Form S-3 pursuant to this Section
5(a), the Company shall (i) promptly give written notice of the proposed
registration to all other holders of Registrable Securities and (ii) use its
best efforts to effect as quickly as is reasonably practicable the registration
of the Registrable Securities specified in such request, together with the
Registrable Securities of any other holder or holders joining in such request as
are specified in a written request given within 20 days after receipt of such
written notice from the Company. No registration effected pursuant to this
Section 5 shall be counted as a Demand Registration for purposes of Section 3,
but the Company may effect a Demand Registration on Form S-3, and such Demand
Registration shall be effected in accordance with Section 3.

         (b)      Underwriting Procedures. If the holder of Registrable
Securities requesting registration on Form S-3 so elects, the offering of such
Registrable Securities pursuant to a registration effected pursuant to Section
5(a) shall be in the form of a firm commitment underwritten offering and the
managing underwriter or underwriters selected for such offering shall be an
Approved Underwriter selected by such holder in the same manner as described in
Section 3(d). In such event, if the Approved Underwriter advises the Company,
which advice shall be confirmed in writing, that in its opinion marketing
considerations require a limitation on the number of securities to be sold, then
the Company shall include in such registration only the number of Registrable
Securities which, in the good faith opinion of such Approved Underwriter, can be
sold, selected in the following order:

                  (i)      first, the Registrable Securities requested to be
included by FUCP;

                  (ii)     second, the Registrable Securities requested to be
included by the other holders of Registrable Securities, pro rata, based on the
number of Registrable Securities requested to be included by each such holder;
and

                  (iii)    third, the Common Stock to be sold by any other
stockholder or group of stockholders.

         SECTION 6. Holdback Agreements.

         (a)      Restrictions on Public Sale by Holders. In order to
participate in a registration effected hereby, to the extent not inconsistent
with applicable law, each holder of Registrable Securities agrees not to effect
any public sale or distribution of any Registrable Securities being registered
or of any securities convertible into or exchangeable or exercisable for such
Registrable Securities, including a sale pursuant to Rule 144 under the
Securities Act, during the period beginning on the filing of such

                                       6
<PAGE>

registration statement and ending on the later of (i) ninety (90) days after the
effective date of such registration statement or the commencement of a public
distribution of the Registrable Securities pursuant to such registration
statement or (ii) the expiration of any lock-up period required by the
underwriters.

         (b)      Restrictions on Public Sale by the Company. The Company agrees
not to effect any public sale or distribution of any of its securities, or any
securities convertible into or exchangeable or exercisable for such securities
(except pursuant to registrations on Form S-4 or S-8 or any successor to such
forms or any other forms not available for registering capital stock for sale to
the public) during the period beginning on the filing of any registration
statement in which the holders of Registrable Securities are participating and
ending on the later of (i) ninety (90) days after the effective date of any such
registration statement and (ii) the expiration of any lock-up period required by
the underwriters.

         SECTION 7. Registration Procedures.

         (a)      Obligations of the Company. Whenever registration of
Registrable Securities has been requested pursuant to Sections 3, 4 or 5 of this
Agreement, the Company shall use its best efforts to effect the registration and
sale of such Registrable Securities in accordance with the intended method of
distribution thereof as. quickly as practicable, and in connection with any such
request, the Company shall, as expeditiously as possible:

                  (i)      prepare and file with the Commission (as promptly as
practicable, but in any event not later than ninety (90) days after receipt of a
request to file a registration statement with respect to Registrable Securities)
a registration statement on any form for which the Company then qualifies or
which counsel for the Company shall deem appropriate and which form shall be
available for the sale of such Registrable Securities in accordance with the
intended method of distribution thereof, and use its best efforts to cause such
registration statement to become effective; provided, that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company shall (A) provide counsel selected by the holders of a majority of
the Registrable Securities being registered in such registration ("Holders'
Counsel") with an adequate and appropriate opportunity to participate in the
preparation of such registration statement and each prospectus included therein
(and each amendment or supplement thereto) to be filed with the Commission,
which documents shall be subject to the review of Holders' Counsel, and (B)
notify the Holders' Counsel and each seller of Registrable Securities of any
stop order issued or threatened by the Commission and take all reasonable action
required to prevent the entry of such stop order or to remove it if entered;

                  (ii)     prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for a period of not less than 12 months or such shorter period which
will terminate when all Registrable Securities covered by such registration
statement have been sold (but not

                                       7
<PAGE>

before the expiration of the ninety (90) day period referred to in Section 4(3)
of the Securities Act and Rule 174 thereunder, if applicable), and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;

                  (iii)    as soon as reasonably possible, furnish to each
seller of Registrable Securities, prior to filing a registration statement,
copies of such registration statement as it is proposed to be filed, and
thereafter such number of copies of such registration statement, each amendment
and supplement thereto (in each case including all exhibits thereto), the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as each such seller may reasonably request
in order to facilitate the disposition of the Registrable Securities owned by
such seller;

                  (iv)     use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller of Registrable Securities reasonably requests, and
to continue such qualification in effect in such jurisdictions for as long as is
permissible pursuant to the laws of such jurisdictions, or for as long as any
such seller requests or until all of such Registrable Securities are sold,
whichever is shortest, and do any and all other acts and things which may be
reasonably necessary or advisable to enable any such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller; provided, that the Company shall not be obligated to effect, or take any
action to effect, any such registration or qualification in any particular
jurisdiction in which the Company would be required to execute a general consent
to service of process in effecting such registration or qualification unless the
Company is already subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or regulations thereunder;

                  (v)      use its best efforts to cause the Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of the Company to enable the seller or
sellers of Registrable Securities to consummate the disposition of such
Registrable Securities;

                  (vi)     notify each seller of Registrable Securities at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such registration statement contains
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made, and the
Company shall promptly prepare a supplement or amendment to such prospectus and
furnish to each seller a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, after delivery to the
purchasers of such Registrable Securities, such prospectus shall not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein

                                       8
<PAGE>

or necessary to make the statements therein not misleading in light of the
circumstances under which they were made;

                  (vii)    enter into and perform customary agreements
(including an underwriting agreement in customary form with the Approved
Underwriter or Company Underwriter, if any, selected as provided in Sections 3,
4 or 5) and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities;

                  (viii)   make available for inspection by any seller of
Registrable Securities, any managing underwriter participating in any
disposition pursuant to such registration statement, Holders' Counsel and any
attorney, accountant or other agent retained by any such seller or any managing
underwriter (each, an "Inspector" and collectively, the "Inspectors"), all
financial and other records; pertinent corporate documents and properties of the
Company and its subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's and its subsidiaries' officers,
directors and employees, and the independent public accountants of the Company,
to supply all information reasonably requested by any such Inspector in
connection with such registration statement. The Records shall not be disclosed
by the Inspectors (except to any other Inspector) unless (A) the disclosure of
the Records is necessary to avoid or correct a misstatement or omission in the
registration statement or to confirm that no such misstatement or omission has
been made, (B) the release of the Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, (C) the disclosure of the
Records is necessary, in the good faith judgment of any Inspector, to exercise
any inspector's due diligence defense under Section 11(b) of the Securities Act
(or any similar defense under, any other law) or (D) the information in the
Records has been made generally available to the public or is required to be
filed with, or made available as supplemental information to, the Commission.
Each seller of Registrable Securities agrees that it shall, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction, give
notice to the Company and allow the Company, at the Company's expense, to
undertake appropriate action to prevent disclosure of the Records deemed
confidential;

                  (ix)     if such sale is pursuant to an underwritten offering,
obtain a "cold comfort" letter from the Company's independent public accountants
in customary form and covering such matters of the type customarily covered by
"cold comfort" letters and as Holders' Counsel or the managing underwriters
reasonably request;

                  (x)      furnish, at the request of any seller of Registrable
Securities on the date such securities are delivered to the underwriters for
sale pursuant to such registration or, if such securities are not being sold
through underwriters, on the date the registration statement with respect to
such securities becomes effective, an opinion, dated such date, of counsel
representing the Company for the purposes of such registration, addressed to the
underwriters, if any, and to the seller making such request, covering such legal
matters with respect to the registration in respect of which such opinion is
being given as such seller or underwriters may reasonably request and are
customarily included in such opinions;

                                       9
<PAGE>

                  (xi)     otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable but no later than 15 months
after the effective date of the registration statement, an earnings statement
covering a period of 12 months beginning after the effective date of the
registration statement, in a manner which satisfies the provisions of Section 11
(a) of the Securities Act;

                  (xii)    cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the Company are
then listed; provided, that the applicable listing requirements are satisfied;

                  (xiii)   keep each seller of Registrable Securities advised in
writing as to the initiation and progress of any registration under Sections 3,
4 or 5 hereunder;

                  (xiv)    provide officers' certificates and other customary
closing documents;

                  (xv)     cooperate with each seller of Registrable Securities
and each underwriter participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NASD; and

                  (xvi)    use its best efforts to take all other steps
necessary to effect the registration of the Registrable Securities contemplated
hereby and cooperate with the holders of such Registrable Securities to
facilitate the disposition of such Registrable Securities pursuant thereto.

         (b)      Seller Information. The Company shall be entitled to require
each seller of Registrable Securities as to which any registration is being
effected to furnish to the Company such information regarding the distribution
of such securities as the Company may from time to time reasonably request in
writing.

         (c)      Notice to Discontinue. Each holder of Registrable Securities
agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 7(a)(vi), such holder shall forthwith
discontinue disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such holder's receipt of
the copies of the supplemented or amended prospectus contemplated by Section
7(a)(vi) and, if so directed by the Company, such holder shall deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such holder's possession, of the prospectus covering such Registrable
Securities which is current at the time of receipt of such notice. If the
Company shall give any such notice, the Company shall extend the period during
which 'such registration statement shall be maintained effective pursuant to
this Agreement (including without limitation the period referred to in Section
7(a)(ii)) by the number of days during the period from and including the date of
the giving of such notice pursuant to Section 7(a)(vi) to and including the date
when the holder shall have received the

                                       10
<PAGE>

copies of the supplemented or amended prospectus contemplated by and meeting the
requirements of Section 7(a)(vi).

         SECTION 8. Registration Expenses.

         (a)      The Company shall pay all expenses (other than underwriting
discounts and commissions) arising from or incident to the performance of, or
compliance with, this Agreement, including without limitation, (i) Commission,
stock exchange and NASD registration and filing fees, (ii) all fees and expenses
incurred in complying with securities or blue sky laws (including reasonable
fees, charges and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), (iii) all printing, engraving,
messenger and delivery expenses and (iv) the fees, charges and disbursements of
counsel to the Company and of its independent public accountants and any other
accounting and legal fees, charges and expenses incurred by the Company
(including without limitation any fees and expenses in connection with any "cold
comfort" letters and any special audits incident to or required by any
registration or qualification) regardless of whether such registration statement
is declared effective (collectively, "Registration Expenses").

         (b)      The Company will, in any event, pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing of the
securities to be registered on each securities exchange on which securities of
the same class are then listed or the qualification for trading of the
securities to be registered in each inter-dealer quotation system in which
securities of the same class are then traded, and rating agency fees.

         (c)      In connection with each registration requested pursuant to
Section 3 of this Agreement, the Company will reimburse FUCP for the reasonable
fees and disbursements of its counsel.

         SECTION 9. Indemnification; Contribution.

         (a)      Indemnification by the Company. The Company agrees to
indemnify, to the full extent permitted by law, each holder of Registrable
Securities, its officers, directors, partners, employees and agents and each
Person who controls (within the meaning of the Securities Act or the Exchange
Act) such holder from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and,
subject to Section 9(c) hereof, reasonable fees, disbursements and other charges
of legal counsel) arising out of or based upon any untrue, or allegedly untrue,
statement of a material fact contained in any registration statement, prospectus
or preliminary prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or arising out of or based upon
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as the same are caused by or contained in any information
furnished in writing to the Company by such holder expressly for use therein.
The Company shall also indemnify any underwriters of the Registrable Securities,

                                       11
<PAGE>

their officers, directors and employees and each Person who controls such
underwriters (within the meaning of the Securities Act and the Exchange Act) to
the same extent as provided above with respect to the indemnification of the
holders of Registrable Securities.

         (b)      Indemnification by Holders. In connection with any
registration statement in which a holder of Registrable Securities is
participating pursuant to Sections 3, 4 or 5 hereof, each such holder shall
furnish to the Company in writing such information with respect to such holder
as the Company may reasonably request or as may be required by law for use in
connection with any such registration statement or prospectus and each holder
agrees to indemnify, to the extent permitted by law, the Company and any
underwriter retained by the Company and their respective directors, officers,
employees and each Person who controls the Company or such underwriter (within
the meaning of the Securities Act and the Exchange Act) to the same extent as
the foregoing indemnity from the Company to the holders, but only with respect
to any such information furnished in writing by such holder expressly for use in
such registration statement. Notwithstanding the provisions of this Section
9(b), a holder of Registrable Securities shall not be required to pay any
indemnification in an amount in excess of the net proceeds received by such
holder in the offering to which such registration statement relates.

         (c)      Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder (the "Indemnified Parry") agrees to give prompt
written notice to any party with indemnification obligations hereunder (the
"Indemnifying Party") after the receipt by the Indemnified Party of any written
notice of the commencement of any action, suit, proceeding or investigation or
threat thereof made in writing for which the Indemnified Party intends to claim
indemnification or contribution pursuant to this Agreement; provided, that the
failure so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of any liability that it may have to the Indemnified Party hereunder,
unless (and then solely to the extent that) the Indemnifying Party is materially
prejudiced thereby. If notice of commencement of any such action is given to the
Indemnifying Party as above provided, the Indemnifying Party shall be entitled
to participate in and, to the extent it may wish, jointly with any other
Indemnifying Party similarly notified, to assume the defense of such action at
its own expense, with counsel chosen by it and satisfactory to such Indemnified
Party. The Indemnified Party shall have the right to employ separate legal
counsel in any such action and participate in the defense thereof, but the fees,
disbursements and other charges of such legal counsel (other than reasonable
costs of investigation) shall be paid by the Indemnified Party unless (i) the
Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party fails to
assume the defense of such action with legal counsel satisfactory to the
Indemnified Party in its reasonable judgment or (iii) the named parties to any
such action (including any impleaded parties) have been advised by such legal
counsel that either (A) representation of such Indemnified Party and the
Indemnifying Party by the same legal counsel would be inappropriate under
applicable standards of professional conduct or (B) there may be one or more
legal defenses available to it which are different from or additional to those
available to the Indemnifying Party. In either of such cases the Indemnifying
Party shall not have the right to assume the defense of such action on behalf of
such Indemnified Party. No Indemnifying Party shall be liable for any settlement
entered into without its written consent, which consent shall not be
unreasonably withheld.

                                       12
<PAGE>

         (d)      Contribution. If the indemnification provided for in this
Section 9 from the Indemnifying Party is unavailable to an Indemnified Party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party and Indemnified Party in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative faults of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Sections 9(a), 9(b) and 9(c), any fees,
charges or expenses (including fees, disbursements and other charges of legal
counsel) reasonably incurred by such party in connection with any investigation
or proceeding.

         The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 9(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 9(d), a holder of Registrable
Securities shall not be required to contribute any amount in excess of the
amount by which the net proceeds received by such holder in the offering to
which such registration statement relates exceeds the amount of any damages that
such holder has otherwise been required to pay. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person.

         (e)      Survival. The indemnity and contribution covenants contained
in this Section 9 shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of a holder or any person
controlling a holder, (ii) any sale of any Registrable Securities pursuant to
this Agreement and receipt by the holders of the proceeds thereof, or (iii) any
termination of this Agreement for any reason, including after the initial filing
of the registration statement to which these indemnity and contribution
covenants relate.

         SECTION 10. Rules 144 and 144A. The Company covenants that it shall
duly and timely file any reports required to be filed by it under the Securities
Act and the Exchange Act and the rules and regulations adopted by the Commission
thereunder and that it shall take such further action as each holder of
Registrable Securities may reasonably request (including providing any
information necessary to comply with Rules 144 and 144A under the

                                       13
<PAGE>

Securities Act), all to the extent required from time to time to enable such
holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144 or Rule 144A
under the Securities Act, as such rules may be amended from time to time, or any
similar rules or regulations hereafter adopted by the Commission. The Company
shall, upon the request of any holder of Registrable Securities, deliver to such
holder a written statement as to whether it has complied with such requirements.
Without limiting the foregoing, the Company agrees that it will:

         (a)      if required by law, maintain a registration statement
(containing such information and documents as the Commission shall specify) with
respect to the Common Stock under Section 12 of the Exchange Act and will timely
file such information, documents and reports as the Commission may require or
prescribe for companies whose stock has been registered pursuant to said Section
12;

         (b)      if a registration statement with respect to the Common Stock
under Section 12 is effective, or if required by Section 15(d) of the Exchange
Act, make whatever filings with the Commission or otherwise make generally
available to the public such financial and other information as may be necessary
to enable the holders of Registrable Securities to be permitted to sell shares
of such Registrable Securities pursuant to the provisions of Rule. 144 or 144A
promulgated under the Securities Act (or any successor rule or regulation
thereto); and

         (c)      at any time when any holder of Registrable Securities desires
to make sales of any Registrable Securities in reliance on Rule 144A under the
Securities Act (or any successor rule or regulation), provide such holder and
any prospective purchaser therefrom with the information required by Rule 144A
and otherwise cooperate with the holder in connection with such sale.

         The Company represents and warrants that any registration statement or
any information document or report filed with the Commission in connection with
the foregoing or any information so made public shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements contained therein
not misleading. The Company agrees to indemnify and hold harmless (or to the
extent the same is not enforceable, make contribution to) the seller of
Registrable Securities, its partners, officers, directors, employees and agents
and, to the extent they have a claim against any of the foregoing or any person,
firm or corporation controlling (within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act) such seller, each broker,
dealer or underwriter (within the meaning of the Securities Act) acting for any
such seller in connection with any offering or sale by such seller of
Registrable Securities or any person, firm or corporation controlling (within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act) such seller and any such broker, dealer or underwriter from and
against any and all losses, claims, damages, liabilities or expenses (or actions
in respect thereof) arising out of or resulting from any breach of the foregoing
representation or warranty, all on terms and conditions comparable to those set
forth in Section 9 of this Agreement.

         SECTION 11. Limitation on Registration Rights of Others. The Company
represents and warrants that it has not granted to any Person the right to
request or require

                                       14
<PAGE>

the Company to register any securities issued by the Company. The Company
covenants and agrees that, so long as any Person holds any Registrable
Securities in respect of which any registration rights provided for in Section 3
of this Agreement remain in effect, the Company will not, directly or
indirectly, grant to any Person or agree to or otherwise become obligated in
respect of rights of registration in the nature or substantially in the nature
of those set forth in Section 3 of this Agreement without the consent of the
Holders of a majority of the Registrable Securities then entitled to request a
Demand Registration.

         SECTION 12. Miscellaneous.

         (a)      Recapitalizations, Exchanges, Etc. The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to the
Registrable Securities, to any and all shares of capital stock of the Company or
any successor or assign of the Company (whether by merger, consolidation, sale
of assets or otherwise) which may be issued in respect of, in exchange for or in
substitution of, the Registrable Securities and shall be appropriately adjusted
for any stock dividends, splits, reverse splits, combinations, recapitalizations
and the like occurring after the date hereof.

         (b)      No Inconsistent Agreements. The Company shall not enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the designated holders of the Registrable Securities in this
Agreement.

         (c)      Remedies. The holders of the Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, shall be entitled to specific performance of their rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive in any action for
specific performance the defense that a remedy at law would be adequate.

         (d)      Amendments and Waivers. Except as otherwise provided herein,
the provisions of this Agreement may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the prior written consent of the holders
of at least a majority of the. Registrable Securities.

         (e)      Notices. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopy,
recognized overnight courier service or personal delivery:

                                       15
<PAGE>

         (i)      if to the Company:

                  CTI, Inc.
                  810 Innovation Drive
                  Knoxville, Tennessee 37932
                  Attention:        Michael K. Templin
                  Telecopy:         (423) 675-3048

         (ii)     if to FUCP:

                  One First Union Center
                  301 S. College St., 5th Floor
                  Charlotte, North Carolina 28288-0732
                  Attention:        Frederick W. Eubank, II
                                    D. Neal Morrison
                  Telecopy:         (704) 374-6711

         (iii)    if to any other holder of Registrable Securities:
                  The most recent address of such holder shown in
                  the Company's record of securityholders

         All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; five business
days after being deposited in the mail, postage prepaid, if mailed; and when
receipt is acknowledged if telecopied.

         (f)      Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
and the registration rights and the other obligations of the Company contained
in this Agreement shall with respect to any Registrable Security be
automatically transferred to any subsequent holder, subject to the provisions of
the Shareholders Agreement, dated the date hereof, among the Company and certain
of its shareholders, of Registrable Securities (excluding any person who
acquires such securities in a transaction with respect to which a registration
statement under the Securities Act is effective at the time or pursuant to a
sale complying with Rule 144 under the Securities Act). Notwithstanding any
transfer of such rights, all of the obligations of the Company hereunder shall
survive any such transfer and shall continue to inure to the benefit of all
transferees.

         (g)      Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

         (h)      Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.

                                       16
<PAGE>

         (i)      Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina, without
regard to the principles of conflicts of law of such state.

         (j)      Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired, it being intended
that all of the rights and privileges of the holders of Registrable Securities
shall be enforceable to the fullest extent permitted by law.

         (k)      Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.

                           [SIGNATURE PAGES TO FOLLOW]

                                       17
<PAGE>

         IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed and delivered as of the day and year first above written.

                                  CTI, INC.

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

                                  FIRST UNION CAPITAL PARTNERS, INC.

                                  By:      /s/ D. Neal Morrison
                                     -------------------------------------------
                                        D. Neal Morrison
                                        Senior Vice President

                                       18

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