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EXHBIT 10.35    
    


 
  NON-QUALIFIED STOCK OPTION AGREEMENT    
    


        This Non-Qualified Stock Option Agreement (this "Agreement"), is entered into as of
[                                    , 200_] by and between
Alliance Imaging, Inc., a Delaware corporation hereinafter referred to as the "Company," and [                        ], an
employee or other service provider of the Company or a
Subsidiary (as defined below) or Affiliate (as defined below) of the Company, hereinafter referred to as "Optionee." 


        WHEREAS,
the Company wishes to afford the Optionee the opportunity to purchase shares of its $.01 par value Common Stock ("Common Stock"); 


        WHEREAS,
the Company wishes to carry out the Plan (as defined below), the terms of which are hereby incorporated by reference and made a part of this Agreement; and 



        WHEREAS,
the Committee (as defined below) appointed to administer the Plan has determined that it would be to the advantage and best interest of the Company and its stockholders to grant
the Non-Qualified Stock Option(s) provided for herein to the Optionee as an incentive for increased efforts during his term of employment or other service with the Company or its
Subsidiaries or Affiliates, and has advised the Company thereof and instructed the undersigned officers to issue said Options; 


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


 
 

ARTICLE I.
  DEFINITIONS    
    


        Whenever the following terms are used in this Agreement, they shall have the meaning specified in the Plan or below unless the context clearly indicates to the
contrary. 


Section 1.1    - Affiliate    


        "Affiliate"
shall mean with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person. 


Section 1.2    - Cause    


        "Cause"
shall mean (i) the Optionee's willful refusal to perform in any material respect the Optionee's lawful duties or responsibilities for the Company or its Subsidiaries,
(ii) the Optionee's willful disregard in any material respect of any financial or other budgetary limitations established in good faith by the Company's Board of Directors,
(iii) misconduct by the Optionee that causes material and demonstrable injury, monetarily or otherwise, to the Company or its Subsidiaries, including but not limited to misappropriation or
conversion of assets of the Company or its Subsidiaries (other than non-material assets); (iv) conviction of or entry of a plea of nolo contendere to a non-vehicular
felony; or (v) the Optionee's violation of any restrictive covenant contained in any employment or other service agreement to which he and the Company or one of its Subsidiaries are parties,
which violation constitutes a material breach by Optionee of such agreement. No act or failure to act by the Optionee shall be deemed "willful" if done, or omitted to be done, by him in good faith and
with the reasonable belief that his action or omission was in the best interest of the Company or consistent with Company policies or the directive of the Company's Board of Directors. 



Section 1.3    - Code    


        "Code"
shall mean the Internal Revenue Code of 1986, as amended. 


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Section 1.4    - Committee    


        "Committee"
shall mean the Compensation Committee of the Board of Directors or any other committee of the Board of Directors of the Company designated to administer the Plan. 


Section 1.5    - Exchange Act    


        "Exchange
Act" shall mean the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder. 


Section 1.6    - Options    



        "Options"
shall mean the Non-Qualified Stock Options to purchase Common Stock granted under this Agreement. 


Section 1.7    - Permanent Disability    


        The
Optionee shall be deemed to have a "Permanent Disability" if the Optionee is unable to engage in the activities required by his employment or other service to the Company or its
Subsidiary by reason of any medically determined physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not
less than 12 months, as reasonably determined by the Board of Directors of the Company in good faith and in its discretion. 


Section 1.8    - Permitted Holder    


        "Permitted
Holders" shall mean OCM Principal Opportunities Fund IV, L.P. ("Oaktree"), MTS Health Investors II, L.P. ("MTS") and Affiliates of Oaktree and MTS 


Section 1.9    - Permitted Retirement    


        "Permitted
Retirement" shall mean retirement at age 65 or over (or such other age as may be approved by the Board of Directors of the Company) after having been employed by the Company
or one of its Subsidiaries or Affiliates for at least three years after the Vesting Reference Date. 


Section 1.10    - Person    


        "Person"
shall mean an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity
of whatever nature, and "control" shall have the meaning given such term under Rule 405 of the Securities Act. 


Section 1.11    - Plan    


        "Plan"
shall mean the 1999 Equity Plan for Employees of Alliance Imaging, Inc. and Subsidiaries, as the same may be amended from time to time. 


Section 1.12    - Pronouns    



        The
masculine pronoun shall include the feminine and neuter, and the singular the plural, where the context so indicates. 


Section 1.13    - Related Parties    


        "Related
Parties" shall mean means any Person controlled by a Permitted Holder, including any partnership of which a Permitted Holder or its Affiliates is the general partner. 



Section 1.14    - Secretary    


        "Secretary"
shall mean the Secretary of the Company. 


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Section 1.15    - Securities Act    



        "Securities
Act" means the Securities Act of 1933, as amended and the rules and regulations promulgated thereunder. 


Section 1.16    - Subsidiary    


        "Subsidiary"
with respect to any entity shall mean any corporation in an unbroken chain of corporations beginning with such entity if each of the corporations, or group of commonly
controlled corporations, other than the last corporation in the unbroken chain, then owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other
corporations in such chain. 


Section 1.17    - Vesting Reference Date    


        "Vesting
Reference Date" shall mean the date of this Agreement. 


Section 1.18    - Voting Stock    


        "Voting
Stock" of the Company as of any date means the stock of the Company that is at the time entitled to vote in the election of the Board of Directors of the Company. 


 
 

ARTICLE II.
  GRANT OF OPTIONS    
    


Section 2.1    - Grant of Options    


        For
good and valuable consideration, on and as of the date hereof the Company irrevocably grants to the Optionee an Option to purchase any part or all of an aggregate of the number of
shares set forth with respect to each such Option on the signature page hereof of its Common Stock upon the terms and conditions set forth in this Agreement. 


Section 2.2    - Exercise Price    


        The
exercise price of the shares of stock covered by the Option(s) is set forth on the signature page hereto. 


Section 2.3    - Consideration to the Company    


        In
consideration of the granting of these Option(s) by the Company, the Optionee agrees to render faithful and efficient services to the Company or one of its Subsidiaries or Affiliates,
with such duties and responsibilities as the Company shall from time to time prescribe. Nothing in this Agreement or in the Plan shall confer upon the Optionee any right to continue in the employ or
service of the Company or any of its Subsidiaries or Affiliates or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries and Affiliates, which are hereby expressly
reserved, to terminate the employment or other service of the Optionee at any time for any reason whatsoever, with or without Cause. 


Section 2.4    - Adjustments in Options    


        Subject
to Section 11 of the Plan, in the event that the outstanding shares of the stock subject to an Option are, from time to time, changed into or exchanged for cash or a
different number or kind of shares of the Company or other securities of the Company by reason of a merger, consolidation, recapitalization, reclassification, stock split, stock dividend, combination
of shares, or otherwise, the Committee shall make an appropriate and equitable adjustment in the number and kind of shares or other consideration and the exercise price as to which such Option, or
portions thereof then unexercised, shall be exercisable in order to prevent dilution or enlargement of the benefits intended to 


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be
made available with respect to any Option. Any such adjustment made by the Committee shall be final and binding upon the Optionee, the Company and all other interested persons. 


 
 

ARTICLE III.
  PERIOD OF EXERCISABILITY    
    


Section 3.1    - Commencement of Exercisability    



        The
Option shall become exercisable with respect to 25% of the shares of Common Stock subject to such Option on each anniversary of the Vesting Reference Date; provided, that
notwithstanding the foregoing, the Option shall become exercisable as to 100% of the shares of Common Stock subject to such Option immediately prior to the consummation of a Change of Control (but
only to the extent such Option has not otherwise terminated); provided, however, that as a condition subsequent to the acceleration of the exercisability of the Option pursuant to this paragraph, the
Change of Control shall be consummated. In the event the contemplated Change of Control is not consummated, the acceleration of exercisability and the exercise, if any, of the Option shall be void ab
initio. A "Change of Control" means the occurrence of any of the following: 



        (a)   the
sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole;
or 


        (b)   the
acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision),
including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than the Permitted
Holders and their Related Parties, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of 50% or more of the total voting power of the Voting Stock of the Company. 




Section 3.2    - Expiration of Options    


        The
Options may not be exercised to any extent by anyone after the first to occur of the following events: 



        (a)   The
tenth anniversary of the date hereof; or 


        (b)   The
first anniversary of the date of the Optionee's termination of employment or other service with the Company by reason of death, Permanent Disability or Permitted
Retirement; or 


        (c)   The
first business day which is 90 days after termination of employment or other service of the Optionee for any reason other than for Cause, death, Permanent
Disability or Permitted Retirement; or 


        (d)   The
opening of business on the date of an Optionee's termination of employment or other service by the Company for Cause; or 



        (e)   Subject
to the provisions for accelerated exercisability pursuant to Section 3.1 upon a Change of Control, if the Committee so determines pursuant to
Section 11 of the Plan, the effective date of a Change of Control. At least ten (10) days prior to the effective date of such Change of Control, the Committee shall give the Optionee
notice of such event if the Option has not then been fully exercised. 



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ARTICLE IV.
  EXERCISE OF OPTION    
    


Section 4.1    - Person Eligible to Exercise    


        During
the lifetime of the Optionee, only he may exercise an Option or any portion thereof. After the death of the Optionee, any exercisable portion of an Option may, prior to the time
when an Option becomes unexercisable under Section 3.2, be exercised by his personal representative or by any person empowered to do so under the Optionee's will or under the then applicable
laws of descent and distribution. 


Section 4.2    - Partial Exercise    


        Any
exercisable portion of an Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion
thereof becomes unexercisable under Section 3.2; provided, however, that any partial exercise shall be for whole shares of Common Stock only. 


Section 4.3    - Manner of Exercise    


        An
Option, or any exercisable portion thereof, may be exercised solely by delivering to the Secretary or his office all of the following prior to the time when the Option or such portion
becomes unexercisable under Section 3.2: 



        (a)   Notice
by the Optionee or the other person then entitled to exercise the Option or portion thereof, in a form acceptable to the Committee, stating that the Option or
portion thereof is thereby exercised, such notice complying with all applicable rules established by the Committee; 


        (b)   Full
payment (in cash, by check or by a combination thereof) for the shares with respect to which such Option or portion thereof is exercised; 


        (c)   To
the extent determined necessary by the Committee, a bona fide written representation and agreement, in a form satisfactory to the Committee, signed by the Optionee or
other person then entitled to exercise such Option or portion thereof, stating that the shares of stock are being acquired for his own account, for investment and without any present intention of
distributing or reselling said shares or any of them except as may be permitted under the Securities Act, and then applicable rules and regulations thereunder, and that the Optionee or other person
then entitled to exercise such Option or portion thereof will indemnify the Company against and hold it free and harmless from any loss, damage, expense or liability resulting to the Company if any
sale or distribution of the shares by such person is contrary to the representation and agreement referred to above; provided, however, that the Committee may, in its absolute discretion, take
whatever additional actions it deems appropriate to ensure the observance and performance of such representation and agreement and to effect compliance with the Act and any other federal or state
securities laws or regulations; 


        (d)   Full
payment to the Company (in cash, by check or by a combination thereof) of all amounts which, under federal, state or local law, it is required to withhold upon
exercise of the Option; and 


        (e)   In
the event the Option or portion thereof shall be exercised pursuant to Section 4.1 by any person or persons other than the Optionee, appropriate proof of the
right of such person or persons to exercise the Option. 




Without
limiting the generality of the foregoing, the Committee may require an opinion of counsel acceptable to it to the effect that any subsequent transfer of shares acquired on exercise of an
Option does not violate the Securities Act, and may issue stop-transfer orders covering such shares. Share certificates evidencing stock issued on exercise of this Option shall bear an
appropriate legend referring 


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to
the provisions of subsection (c) above and the agreements herein. The written representation and agreement referred to in subsection (c) above shall, however, not be required if the
shares to be issued pursuant to such exercise have been registered under the Securities Act, and such registration is then effective in respect of such shares. 


Section 4.4    - Conditions to Issuance of Stock Certificates    


        The
shares of stock deliverable upon the exercise of an Option, or any portion thereof, may be either previously authorized but unissued shares or issued shares which have then been
reacquired by the Company. Such shares shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any certificate or certificates for shares of stock purchased upon
the exercise of an Option or portion thereof prior to fulfillment of all of the following conditions: 



        (a)   The
obtaining of approval or other clearance from any state or federal or foreign governmental agency which the Committee shall, in its absolute discretion, determine to
be necessary or advisable; and 


        (b)   The
lapse of such reasonable period of time following the exercise of the Option as the Committee may from time to time establish for reasons of administrative
convenience; provided, however, that no delay in the issuance of any certificate to be issued hereunder shall operate to prejudice or impair the Optionee's rights to participate in a corporate
transaction providing for the disposition of stock. 




Section 4.5    - Rights as Stockholder    


        The
holder of an Option shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the exercise of the Option or
any portion thereof unless and until certificates representing such shares shall have been issued by the Company to such holder or such shares are otherwise held of record by such holder as evidenced
to the Company's satisfaction. 


 
 

ARTICLE V.
  MISCELLANEOUS    
    


Section 5.1    - Administration    


        The
Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Optionee, the Company and
all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the Options. In its
absolute discretion, the Board of Directors may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan and this Agreement. 


Section 5.2    - Options Not Transferable    


        Neither
the Options nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Optionee or his successors in interest or shall be
subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect; provided,
however, that this Section 5.2 shall not prevent transfers by will or by the applicable laws of descent and distribution. 


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Section 5.3    - Shares to Be Reserved    



        The
Company shall at all times during the term of the Options reserve and keep available such number of shares of stock as will be sufficient to satisfy the requirements of this
Agreement. 


Section 5.4    - Limitations Applicable to Section 16 Persons    


        Notwithstanding
any other provision of the Plan or this Agreement, if Optionee is subject to Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
the Plan, the Options and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment
to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, this Agreement shall be deemed
amended to the extent necessary to conform to such applicable exemptive rule. 


Section 5.5    - Notices    


        Any
notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its Secretary, and any notice to be given to the Optionee shall be
addressed to him at his most recent address as reflected in the Company's records. By a notice given pursuant to this Section 5.5, either party may hereafter designate a different address for
notices to be given to him or it. Any notice which is required to be given to the Optionee shall, if the Optionee is then deceased, be given to the Optionee's personal representative if such
representative has previously informed the Company of his status and address by written notice under this Section 5.5. Any notice shall have been deemed duly given when enclosed in a properly
sealed envelope or wrapper addressed as aforesaid, and delivered by hand (whether by courier or otherwise) or sent by registered or certified mail, return receipt requested (with postage prepaid). 


Section 5.6    - Titles    


        Titles
are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. 


Section 5.7    - Applicability of Plan    


        The
Options and the shares of Common Stock issued to the Optionee upon exercise of the Options shall be subject to all of the terms and provisions of the Plan. In the event of any
conflict between this Agreement and the Plan, the terms of the Plan shall control. 


Section 5.8    - Amendment    



        This
Agreement may be amended only by a writing executed by the parties hereto, which specifically states that it is amending this Agreement. 


Section 5.9    - Governing Law    


        The
laws of the State of Delaware shall govern the interpretation, validity and performance of the terms of this Agreement regardless of the law that might be applied under principles of
conflicts of laws. 


Section 5.10    - Jurisdiction    



        Any
suit, action or proceeding against the Optionee with respect to this Agreement, or any judgment entered by any court in respect of any thereof, may be brought in any court of
competent jurisdiction in the State of Delaware, and the Optionee hereby submits to the non-exclusive jurisdiction of such courts for the purpose of any such suit, action, proceeding or
judgment. The Optionee hereby irrevocably waives any objections which he may now or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this
Agreement brought in any court of 


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competent
jurisdiction in the State of Delaware, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in any inconvenient
forum. No suit, action or proceeding against the Company with respect to this Agreement may be brought in any court, domestic or foreign, or before any similar domestic or foreign authority other than
in a court of competent jurisdiction in the State of Delaware, and the Optionee hereby irrevocably waives any right which he may otherwise have had to bring such an action in any other court, domestic
or foreign, or before any similar domestic or foreign authority. The Company hereby submits to the jurisdiction of such courts for the purpose of any such suit, action or proceeding. 



        IN
WITNESS WHEREOF, this Non-Qualified Stock Option Agreement has been executed and delivered by the parties hereto as of the date first written above. 



	
[                                    ], OPTIONEE	 	ALLIANCE IMAGING, INC.
	

 	
 	

 	

 
	 	 	By:	 
	
	 	 	

	Signature	 	Its:	 
	 	 	 	

	

 	
 	

 	

 
	

 	
 	

 	

 
	

 	
 	

 	

 
	
	 	 	 
	

 	
 	

 	

 
	

 	
 	

 	

 
	
 Optionee's Address	 	 	 
	

 	
 	

 	

 
	

 	
 	

 	

 
	

 	
 	

 	

 





Exercise
price per share:            [            ] 


Aggregate
number of shares of Common Stock for

which the Option granted hereunder is exercisable: [        ] 


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EXHBIT 10.35


NON-QUALIFIED STOCK OPTION AGREEMENT

ARTICLE I. DEFINITIONS

ARTICLE II. GRANT OF OPTIONS

ARTICLE III. PERIOD OF EXERCISABILITY

ARTICLE IV. EXERCISE OF OPTION

ARTICLE V. MISCELLANEOUS