**Exhibit 10.31**

May 9, 2005

 

Mr. Paul S. Viviano

19432 Beckonridge Lane

Huntington Beach, CA  92648

AMENDED AND RESTATED AGREEMENT

Dear Mr. Viviano:

1.     Reference is made to (i) the Alliance Imaging, Inc. 1999 EquityPlan (the “Option Plan”) and (ii) the Stock Option Agreements (the “OptionAgreements”) between Alliance Imaging, Inc. (the “Company”) and you, dated asof January 2, 2003, January 5, 2004 and January 3, 2005.  In consideration of the Company granting youoptions under the Option Plan, executing and delivering the Option Agreementsand making the payments described in Paragraph 5 below, you agree that noCompetition Event (as defined below) shall occur prior to two years after theDate of Termination (as defined in the employment agreement between the Companyand you as of the date hereof (the “Employment Agreement”)).  Defined terms used but not defined hereinshall have the meaning ascribed thereto in the Employment Agreement.

2.     For purposes of this letter agreement, a Competition Event shalloccur if you directly or indirectly (i) engage in any imaging business or anyother business that becomes material to the Company’s business during youremployment by the Company (the “Company Business”) within the United Statesthat is the same or substantially similar to or competitive with any serviceprovided by the Company; (ii) compete or participate as agent, employee,consultant, advisor, representative or otherwise in any enterprise engaged in abusiness which has any operations engaged in the Company Business within theUnited States that is the same or substantially similar to or competitive withany service provided by the Company; or (iii) compete or participate as astockholder, partner or joint venturer, or have any direct or indirectfinancial interest, in any enterprise which has any material operations engagedin the Company Business within the United States that is the same orsubstantially similar to or competitive with any service provided by theCompany; provided, however, that nothing contained herein shallprohibit you from (A) owning, operating or managing any business, or actingupon any business opportunity, after obtaining approval of a majority of theBoard of Directors of the Company and a majority of the independent members ofthe Board of Directors of the Company (if any); (B) acting in the capacity of aChief Executive Officer or Chief Operating Officer of a hospital or healthsystem which may have diagnostic imaging operations; or (C) owning no more thanfive percent (5%) of the equity of any publicly traded entity with respect towhich you do not serve as an officer, director, employee, consultant or in anyother capacity other than as an investor.

 

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3.     As a means reasonably designed to protect certain confidentialinformation of the Company which would otherwise inherently be utilized in thefollowing proscribed activities, and in partial consideration of the Company’scovenant to make the payments described in Paragraph 5, you agree that you willnot, prior to the date you cease to receive payments under Paragraph 5 below,solicit or make any other contact with, directly or indirectly, any customer ofthe Company as of the Date of Termination with respect to the provision by youof any service to any such customer that is the same or substantially similarto any service provided to such customer by the Company.

4.     In partial consideration of the Company’s covenant to make thepayments described in Paragraph 5, you agree that you will not, prior to thedate you cease to receive payments under paragraph 5, solicit or make any othercontact with, directly or indirectly, any employee of the Company on the Dateof Termination (or any person who was employed by the Company at any timeduring the three-month period prior to the Date of Termination) with respect toany employment, services or other business relationship.

5.     In partial consideration of your covenants contained herein, theCompany shall, following the Date of Termination, pay you an amount equal to twicethe sum of (A) your annual base salary as of the Date of Termination plus (B)your Bonus.  All payments under thisParagraph 5 shall be made in equal installments on a bi-weekly basis over a twoyear period.  Notwithstanding theforegoing, the Company shall not be obligated to make any payments under thisParagraph 5 to you if you (x) fail to cure a breach of this Agreement withinfifteen days after receipt of notice of such breach from the Company, or (y) ifyour employment with the Company is terminated by reason of your death ordisability or for Cause or by reason of your resignation other than for GoodReason.

6.     For purposes of this Letter Agreement, “Bonus” means the actualcash bonus earned by you for the calendar year completed immediately prior  to the Date of Termination.

7.     Notwithstanding paragraph 1 through 4 hereof, if the Companyshall fail to make any payment to you that the Company is obligated to makepursuant to Paragraph 5 and such failure shall continue for more than five daysafter receipt of notice from you, all future payments to you under Paragraph 5shall become immediately due and payable and you shall be relieved of allobligations under this Agreement.

 

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8.     For purposes of paragraph 2 through 4 hereof,the term Company shall include Alliance Imaging, Inc., its subsidiaries and/orits affiliates.

9.     You acknowledge that irreparable damage would occur in the eventof a breach of the provisions of this Agreement by you.  It is accordingly agreed that, in addition toany other remedy to which it is entitled at law or in equity, the Company shallbe entitled to an injunction or injunctions to prevent breaches of this letteragreement and to enforce specifically the terms and provisions of this letteragreement.

10.   If, at the time of enforcement, any sentence,paragraph, clause, or combination of the same of this Agreement is in violationof the law of any state where applicable, such sentence, paragraph, clause, orcombination of the same shall be void in the jurisdictions where it isunlawful, and the remainder of this Agreement shall remain binding on theparties.  In the event that any part ofany covenant of this Agreement is determined by a court of law to be overlybroad thereby making the covenant unenforceable, the parties agree that suchcourt shall substitute a judicially enforceable limitation in its place, andthat as so modified, the covenants shall be binding upon the parties as iforiginally set forth in this Agreement.

11.   This Letter Agreement embodies the entireunderstanding of the parties hereto and will supersede all other oral orwritten agreements between them regarding the subject matter hereof.

Ifyou are in agreement with the foregoing, please sign a copy of this letterwhere indicated below.
|                                                            |                  | Very truly yours,          |
|-----------------------------------------------------------------|-----------------------|----------------------------|
|                                                            |                  |                       |   |
|                                                            |                  | **ALLIANCE IMAGING, INC.** |
|                                                            |                  |                       |   |
|                                                            |                  | By:                        | /s/ Russell D.  Phillips, Jr. |
|                                                            |                  | Name:                      | Russell D. Phillips,  Jr. |
|                                                            |                  | Title:                     | Executive Vice  President   General Counsel |
|                                                            |                  |                       |   |
|                                                            |                  |                       |   |
| Acknowledged and agreed to as of the date first  above written: |                  |                       |
|                                                            |                  |                       |   |
| By:                                                             | /s/ Paul S. Viviano   |                       |   |
|                                                            | Name: Paul S. Viviano |                       |   |

 

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