Exhibit 10.4


ALLIANCE
IMAGING, INC.


AMENDMENT
OF EMPLOYMENT AGREEMENT


THIS
AMENDMENT OF EMPLOYMENT AGREEMENT (the “Amendment”) is entered into as of April
16, 2007 (the “Effective Date”), between Howard K. Aihara (“Executive”) and Alliance
Imaging, Inc., a Delaware corporation (the “Company”).


RECITALS


WHEREAS,
on December 1, 2005, the Company and the Executive entered into an Employment
Agreement (the “Employment Agreement”) and a related Letter Agreement (the “Letter
Agreement”); and


WHEREAS, the parties wish to amend certain provisions of such
agreements regarding the benefits to be provided upon the termination of the
Executive’s employment with the Company pursuant to the terms and conditions
set forth below.


AGREEMENT


NOW THEREFORE, in consideration of the foregoing and the mutual  agreements contained herein and intending to
be legally bound hereby, the parties hereby agree as follows effective as of
the Effective Date.  Except as otherwise
defined herein, capitalized terms shall have the meanings assigned to them in
the Employment Agreement or the Letter Agreement, as the case may be.


1.             Noncompetition.  The second sentence of paragraph 1 of the
Letter Agreement shall be amended to read in its entirety as follows:


“In consideration of the Company granting you
options under the Option Plan, executing and delivering the Option Agreements
and making the payments described in Paragraph 5 below, you agree that no
Competition Event (as defined below) shall occur prior to the date you cease to
receive payments under Paragraph 5.”


2.             Nonsolicitation.  Paragraph 4 of the Letter Agreement shall be
amended to read in its entirety as follows:


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













3.             Salary
Continuation Period.  Paragraphs 5 and
6 of the Letter Agreement shall be amended and replaced in their entirety as
follows:


“5.           In
partial consideration of your covenants contained herein, the Company shall,
following the Date of Termination, pay you severance pay equal to two (2) years
of your annual base salary as of the Date of Termination (such time period
shall be referred to herein as the “Salary Continuation Period”), payable on a
bi-weekly basis.  Following the Date of
Termination, the Company shall also pay you an amount equal to 100% of your
current annual target incentive bonus as of the Date of Termination (“Bonus”)
for each year (or portion thereof) of the Salary Continuation Period.  The Bonus payment shall be payable by the
Company on a bi-weekly basis during the Salary Continuation Period.  Notwithstanding the foregoing, effective two
(2) years after the Effective Date of this Amendment, the Salary Continuation
Period shall be reduced to eighteen (18) months, and the amount of severance
and benefits payable pursuant to this Amendment and the Employment Agreement
shall be adjusted accordingly.  In
addition, the Company shall not be obligated to make any payments under this paragraph
to you if (x) you fail to cure a breach of this Agreement within fifteen days
after receipt of notice of such breach from the Company, (y) your employment
with the Company is terminated by reason of your death or disability or for
Cause or by reason of your resignation other than for Good Reason, or (z) you
fail to sign (and not revoke) a release of any and all claims that you have or
may have against the Company and its past and then current officers, directors
and employees relating to or arising out of your employment (or termination of
employment) with the Company (under this Agreement or otherwise), in a form
prescribed by the Company.”


4.             Term.  Paragraph 1(b) of the Employment Agreement
shall be amended in its entirety to read as follows:


“The term of the Executive’s employment under this
Agreement shall end on the second anniversary of the Effective Date of this
Amendment, subject to the extension of such term as hereinafter provided and
subject to earlier termination as provided in Paragraph 8.  The expiration of the term of this Agreement
shall be extended automatically by an additional three months as of the last
day of each quarterly period following the end of the term described in the
preceding sentence unless either party desires to modify or terminate this
Agreement and notifies the other party of its desire to modify or terminate
this Agreement at least 30 days prior to any such quarterly renewal date.  The period of employment as provided in this
Paragraph 1(b) is sometimes referred to herein as the “Term”.”


5.             Other
Severance Benefits.  Paragraphs
9(b)(ii) and (iii) of the Employment Agreement shall be amended in their
entirety and replaced with the following:


“(ii)         During
the Salary Continuation Period, the Corporation shall continue to provide
benefits to the Executive and/or the Executive’s dependents at least equal to
those which would have been provided to them in accordance with the plans,
programs and arrangements referred to in Paragraph 6(d) and (e) of this
Agreement; and


(iii)          The
Corporation shall reimburse Executive’s actual costs up to $35,000 for
outplacement services and administrative support related to Executive’s search
for new employment, the scope and provider of which shall be mutually agreed
upon by the Executive and the Corporation.”



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6.             Excess
Parachute Payments.  Paragraph 10 of
the Employment Agreement shall be amended in its entirety to read as follows:


“Excess Parachute Payments.


(a)           Excise
Tax.  Generally, it is the intention
of the Corporation and Executive that Executive receive the full benefits
available in the event of a termination “Without Cause” or a resignation by
Executive for “Good Reason”.  In the
event that


(i)            all
or any portion of any payment or benefit provided by the Corporation in
connection with the Executive’s termination of employment with the Corporation (a
“Payment”), would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”), or any successor provision
thereto, by reason of being considered “contingent on a change in ownership or
control” of the Corporation, within the meaning of Section 280G of the Code (or
any successor provision thereto), or any interest or penalties with respect to
such tax (such tax, together with any such interest and penalties, being
hereafter collectively referred to as the “Excise Tax”), and


(ii)           the
aggregate present value of Executive’s “parachute payments” as defined in
Section 280G(b)(2) of the Code and as determined in accordance with the
requirements of Section 280G of the Code and the regulations promulgated
thereunder (“280G Parachute Value”) exceeds 110% of Executive’s “280G Parachute
Limit” (such limit is equal to three times Executive’s “base amount” (as
defined in Section 280G(b)(3) of the Code)), then Executive shall be entitled
to receive an additional payment or payments (collectively, a “Gross-Up Payment”)
as described in paragraph 10(b).


However, if Executive’s 280G Parachute Value is equal to or greater
than the 280G Parachute Limit, but does not exceed 110% of the 280G Parachute
Limit, then the Payments shall be reduced such that the 280G Parachute Value
that Executive is entitled to receive shall be one dollar ($1) less than the
maximum amount which Executive may receive without becoming subject to the tax
imposed by Section 4999 of the Code.


(b)           Gross-Up
Payment.  In the event that Executive’s
280G Parachute Value exceeds 110% of the 280G Parachute Limit, the Corporation
shall provide Executive with a Gross-Up Payment in an amount such that, after
payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes and including any Excise Tax) imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.


(c)           Determination.  The amount of the Excise Tax, whether a
Gross-Up Payment is required to be paid by the Corporation to the Executive
pursuant to paragraph 10(b) or a reduction of Payments is required pursuant to paragraph
10(a), and the amount of such Gross-Up Payment or Payment reduction, if any,
shall be made by a nationally recognized accounting firm (the “Accounting Firm”)
selected by the Corporation and reasonably acceptable to the Executive.  For purposes of making the calculations
required by this paragraph, the Accounting Firm may make reasonable assumptions
and approximations concerning applicable taxes and may rely on reasonable, good
faith interpretations concerning the application of



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Sections 280G and 4999 of the Code. 
The Corporation shall bear all fees and expenses that the Accounting
Firm may reasonably incur in connection with any calculations contemplated by
this paragraph.  The Corporation and the
Executive shall furnish to the Accounting Firm such information and documents
as the Accounting Firm may reasonably request in order to make its
determination under this paragraph.  The Corporation
shall direct the Accounting Firm to submit its determination and detailed
supporting calculations to both the Corporation and the Executive within thirty
(30) days after the date on which the release described in Section 1 of this
Amendment becomes effective.  Any
Gross-Up Payment under this paragraph shall be paid to Executive as soon as may
be practicable after such final determination is made, with the intent that
such Gross-Up Payments shall be made proportionately and contemporaneously with
the Payment(s) which are subject to the Excise Tax.”


7.             Section
409A.  Notwithstanding any provision
to the contrary in this Amendment, the Employment Agreement or the Letter
Agreement, no termination benefits to which Executive becomes entitled under this
Amendment, the Employment Agreement or the Letter Agreement shall be provided
to Executive prior to the earlier of (a) the expiration of the 6-month period
measured from the date of his “separation from service” with the Company (as
such term is defined in Treasury Regulations issued under Section 409A of the
Code or (ii) the date of his death, if the Executive is deemed at the time of
his separation from service to be a “key employee” for purposes of Code Section
416(i) and such delayed commencement is otherwise required in order to avoid a
prohibited distribution under Code Section 409A(a)(2)(b)(i).  Upon the expiration of the applicable Code
Section 409A(a)(2) deferral period, all payments deferred pursuant to this
Section 5 of this Amendment shall be paid in a lump sum to the Executive, and
any remaining payments due under this Amendment, the Employment Agreement or
the Letter Agreement shall be paid as otherwise provided herein or therein.


8.             Continuation
of Other Terms.  Except as set forth
herein, all other terms and conditions of the Employment Agreement and the
Letter Agreement shall remain in full force and effect.


9.             Complete Agreement.  This Amendment, the Employment Agreement and
the Letter Agreement together constitute the entire agreement between Executive
and the Company with respect to the subject matter described herein and they
are the complete, final and exclusive embodiment of their agreement with regard
to this subject matter.  However, if
there are any ancillary benefits set forth in the form of Executive Severance
Agreement attached as Exhibit 10.2 to the Form 8-K filed by the Company on
March 22, 2007 which are more beneficial to Executive in any respect than what
is provided for in this Amendment, the Employment Agreement and/or the Letter
Agreement, such ancillary benefits shall be made available to Executive.  This Amendment is entered into without
reliance on any promise or representation other than those expressly contained
herein.


10.           Applicable Law.  This Amendment shall be governed by the law
of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California.


[Signature page
follows]



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IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be executed as of the date first written above.


	
  

  	
  ALLIANCE IMAGING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eli H. Glovinsky

  	
   

  
	
   

  	
  Name:

  	
  Eli H. Glovinsky

  
	
   

  	
  Title:

  	
  Executive Vice President,

  
	
   

  	
   

  	
  General Counsel and Corporate Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Howard K. Aihara

  	
   

  
	
   

  	
  Name:

  	
  Howard K. Aihara

  
	
   

  	
   

  	
  Executive Vice President and
  Chief

  Financial Officer

  



 



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