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                                                                    EXHIBIT 4.11

                          ALLIANCE MEDICAL CORPORATION
                           THIRD AMENDED AND RESTATED
                             REGISTRATION AGREEMENT

      THIS AGREEMENT is made as of August 13, 2001, by and among Alliance
Medical Corporation, a Delaware corporation (the "Company"), and the Persons
listed on the Schedule of Investors attached hereto (collectively referred to
herein as "Stockholders" and each as a "Stockholder").

      Certain of the Stockholders and the Company have entered into that certain
Second Amended and Restated Registration Agreement dated February 6, 2001 (the
"Prior Registration Agreement") and, in accordance with Section 8(d) of the
Prior Registration Agreement, the Company and certain of the signatories to the
Prior Registration Agreement whose signatures appear below and who hold, in the
aggregate, the percentage of capital stock of the Company required to amend and
restate the Prior Registration Agreement desire to amend and restate the Prior
Registration Agreement as set forth herein.

      The Stockholders have purchased shares of the Company's Series A 8%
Participating Preferred Stock (the "Series A Preferred Stock"), Series B 8%
Participating Preferred Stock (the "Series B Preferred Stock"), Series C 8%
Participating Preferred Stock (the "Series C Preferred Stock"), and Series D 8%
Participating Preferred Stock (the "Series D Preferred Stock") (collectively,
the "Preferred Stock") pursuant to various stock purchase agreements, most
recently pursuant to that certain Stock Purchase Agreement by and among the
Company and certain Stockholders of even date herewith (the "Purchase
Agreement").

      The execution and delivery of this Agreement is a condition to the Closing
under the Purchase Agreement. Certain capitalized terms used herein are defined
in Section 8 hereof. Any capitalized terms not defined herein shall have the
meanings set forth in the Purchase Agreement.

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

      1. Demand Registrations.

            (a) Requests for Registration. At any time after July 19, 2002 or,
if earlier, nine (9) months after the Company has completed a Qualified Public
Offering, the holders of at least twenty percent (20%) of the Registrable
Securities may request registration under the Securities Act of all or any
portion of their Registrable Securities on Form S-1 or any similar long-form
registration ("Long-Form Registrations"), or, if available, on Form S-2 or S-3
or any similar short-form registration ("Short-Form Registrations"); provided
that in the case of the first Demand Registration hereunder, the holders of a
majority of the Registrable Securities must request such registration unless the
Company has previously completed a registered public offering of its Common
Stock under the Securities Act. All registrations requested pursuant to this
subsection 1(a) are referred to herein as "Demand Registrations." Each request
for a
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Demand Registration shall specify the approximate number of Registrable
Securities requested to be registered and the anticipated per share price range
for such offering. Within ten days after receipt of any such request, the
Company shall give written notice of such requested registration to all other
holders of Registrable Securities and shall include in such registration all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within 15 days after the receipt of the Company's
notice.

            (b) Long-Form Registrations. The holders of Registrable Securities
shall be entitled to request one Long-Form Registration in which the Company
shall pay all Registration Expenses ("Company-paid Long-Form Registrations"). A
registration shall not count as the permitted Long-Form Registration until it
has become effective (unless such Long-Form Registration has not become
effective due solely to the fault of the holders requesting such registration);
provided that in any event the Company shall pay all Registration Expenses in
connection with any registration initiated as a Company-paid Long-Form
Registration whether or not it has become effective and whether or not such
registration has counted as the permitted Company-paid Long-Form Registration.

            (c) Short-Form Registrations. In addition to the Long-Form
Registration provided pursuant to Section 1(b), the holders of Registrable
Securities shall be entitled to request three Short-Form Registrations in which
the Company shall pay all Registration Expenses; provided that the aggregate
offering value of the Registrable Securities requested to be registered in any
Short-Form Registration must equal at least $2,500,000. Demand Registrations
shall be Short-Form Registrations whenever the Company is permitted to use any
applicable short form. After the Company has become subject to the reporting
requirements of the Securities Exchange Act, the Company shall use its best
efforts to make Short-Form Registrations on Form S-3 available for the sale of
Registrable Securities.

            (d) Priority on Demand Registrations. The Company shall not include
in any Demand Registration any securities which are not Registrable Securities
without the prior written consent of the holders of a majority of the
Registrable Securities included in such registration. If a Demand Registration
is an underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering
exceeds the number of Registrable Securities and other securities, if any, which
can be sold therein without adversely affecting the marketability of the
offering, the Company shall include in such registration prior to the inclusion
of any securities which are not Registrable Securities the number of Registrable
Securities requested to be included which in the opinion of such underwriters
can be sold without adversely affecting the marketability of the offering, pro
rata among the respective holders thereof on the basis of the amount of
Registrable Securities owned by each such holder (provided that at any time
after one year following a public offering of the Company's Common Stock, the
Commonwealth Group may request that its shares of the Company's Common Stock be
included in such registration pro rata with the Registrable Securities). Any
Persons other than holders of Registrable Securities who participate in Demand
Registrations which are not at the Company's expense must pay their share of the
Registration Expenses as provided in Section 5 hereof.

            (e) Restrictions on Demand Registrations. The Company shall not be
obligated to effect any Demand Registration within nine months after a Qualified
Public

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Offering or 180 days after the effective date of a previous Demand Registration
or a previous registration in which the holders of Registrable Securities were
given piggyback rights pursuant to Section 2 and in which there was no reduction
in the number of Registrable Securities requested to be included. The Company
may postpone for up to 180 days the filing or the effectiveness of a
registration statement for a Demand Registration if a majority of the Company's
board of directors concludes and the holders of a majority of the Registrable
Securities agree in good faith that such Demand Registration would reasonably be
expected to have a material adverse effect on the Company, its business or on
any proposal or plan by the Company or any of its Subsidiaries to engage in any
acquisition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer, reorganization or similar transaction;
provided that in such event, the holders of Registrable Securities initially
requesting such Demand Registration shall be entitled to withdraw such request
and, if such request is withdrawn, such Demand Registration shall not count as
one of the permitted Demand Registrations hereunder and the Company shall pay
all Registration Expenses in connection with such registration. The Company may
delay a Demand Registration hereunder only once in any twelve-month period.

            (f) Selection of Underwriters. The holders of a majority of the
Registrable Securities included in any Demand Registration shall have the right
to select the investment banker(s) and manager(s) to administer the offering,
subject to the Company's approval, which shall not be unreasonably withheld.

            (g) Other Registration Rights. Except as provided in this Agreement,
the Company shall not grant to any Persons the right to request the Company to
register any equity securities of the Company, or any securities convertible or
exchangeable into or exercisable for such securities, without the prior written
consent of the holders of a majority of the Registrable Securities; provided
that the Company may grant rights to other Persons to participate in Piggyback
Registrations so long as such rights are subordinate to the rights of the
holders of Registrable Securities with respect to such Piggyback Registrations.

      2. Piggyback Registrations.

            (a) Right to Piggyback. Whenever the Company proposes to register
any of its equity securities under the Securities Act (other than pursuant to an
initial public offering or a Demand Registration, or a registration statement on
Form S-4 or S-8 or similar form) and the registration form to be used may be
used for the registration of Registrable Securities (a "Piggyback
Registration"), the Company shall give prompt written notice to all holders of
Registrable Securities of its intention to effect such a registration and shall
include in such registration all Registrable Securities with respect to which
the Company has received written requests for inclusion therein within 20 days
after the receipt of the Company's notice.

            (b) Piggyback Expenses. The Registration Expenses of the holders of
Registrable Securities shall be paid by the Company in all Piggyback
Registrations.

            (c) Priority on Primary Registrations. If a Piggyback Registration
is an underwritten primary registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be

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included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering, the
Company shall include in such registration (i) first, the securities the Company
proposes to sell, (ii) second, the Registrable Securities requested to be
included in such registration, pro rata among the holders of such Registrable
Securities on the basis of the number of shares owned by each such holder
(provided that at any time after one year following a public offering of the
Company's Common Stock, the Commonwealth Group may request that its shares of
the Company's Common Stock be included in such registration pro rata with the
Registrable Securities), and (iii) third, other securities requested to be
included in such registration pursuant to registration rights granted prior to
the date of this Agreement.

            (d) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of the Company's
securities, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering without
adversely affecting the marketability of the offering, the Company shall include
in such registration (i) first, the securities requested to be included therein
by the holders requesting such registration, (ii) second, the Registrable
Securities requested to be included in such registration, pro rata among the
holders of such Registrable Securities on the basis of the number of shares
owned by each such holder (provided that at any time after one year following a
public offering of the Company's Common Stock, the Commonwealth Group may
request that its shares of the Company's Common Stock be included in such
registration pro rata with the Registrable Securities), and (iii) third, other
securities requested to be included in such registration.

            (e) Other Registrations. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant to
Section 1 or pursuant to this Section 2, and if such previous registration has
not been withdrawn or abandoned, the Company shall not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-8 or any successor form), whether on its
own behalf or at the request of any holder or holders of such securities, until
a period of at least 180 days has elapsed from the effective date of such
previous registration.

      3. Registration Procedures. Whenever the holders of Registrable Securities
have requested that any Registrable Securities be registered pursuant to this
Agreement, the Company shall use its best efforts to effect the registration and
the sale of such Registrable Securities in accordance with the intended method
of disposition thereof, and pursuant thereto the Company shall as expeditiously
as possible:

            (a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities 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 relating to a Demand Registration or Piggyback Registration,
the Company shall furnish to the counsel selected by the holders of a majority
of the Registrable Securities covered by such registration statement copies

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of all such documents proposed to be filed, which documents shall be subject to
the review and comment of such counsel);

            (b) notify each holder of Registrable Securities of the
effectiveness of each registration statement filed hereunder and prepare and
file with the Securities and Exchange 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 more than 180 days (provided that the holders of a majority of Registrable
Securities included in any Demand Registration shall have the right to require
that the registration statement remain effective for 180 days) 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;

            (c) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;

            (d) 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 reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company shall not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subsection, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);

            (e) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of 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 any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company shall
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading;

            (f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the New York Stock Exchange, the
American Stock Exchange, or the NASD automated quotation system and, if listed
on the NASD automated quotation system, use its best efforts to secure
designation of all such Registrable Securities covered by such registration
statement as a NASDAQ "national market system security" within the meaning of
Rule 11Aa2-1 of the Securities and Exchange Commission or, failing that, to
secure NASDAQ authorization for such Registrable Securities and, without
limiting the generality of the foregoing, to arrange

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for at least two market makers to register as such with respect to such
Registrable Securities with the NASD;

            (g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;

            (h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including effecting a stock split or a combination of
shares);

            (i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;

            (j) otherwise use its best efforts to comply with all applicable
rules and regulations of the Securities and Exchange Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Company's first full calendar quarter after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; and

            (k) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company shall use its best efforts promptly to obtain the
withdrawal of such order.

      4. Registration Expenses.

            (a) All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, fees and disbursements
of custodians, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding discounts and
commissions) and other Persons retained by the Company (all such expenses being
herein called "Registration Expenses"), shall be borne as provided in this
Agreement, except that the Company shall, 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 or quarterly review, the expense of any liability insurance and
the expenses and fees for listing the securities to be registered on each
securities exchange on which

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similar securities issued by the Company are then listed or on the NASD
automated quotation system.

            (b) In connection with each Demand Registration and each Piggyback
Registration, the Company shall reimburse the holders of Registrable Securities
included in such registration for the reasonable fees and disbursements of one
counsel chosen by the holders of a majority of the Registrable Securities
included in such registration (not to include underwriter's discounts and
commissions).

            (c) To the extent Registration Expenses are not required to be paid
by the Company, each holder of securities included in any registration hereunder
shall pay those Registration Expenses allocable to the registration of such
holder's securities so included, and any Registration Expenses not so allocable
shall be borne by all sellers of securities included in such registration in
proportion to the aggregate selling price of the securities to be so registered.

      5. Indemnification.

            (a) The Company agrees to indemnify, to the extent permitted by law,
each holder of Registrable Securities, its officers and directors and each
Person who controls such holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses caused by any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of 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 or by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with a sufficient number of copies of the
same. In connection with an underwritten offering, the Company shall indemnify
such underwriters, their officers and directors and each Person who controls
such underwriters (within the meaning of the Securities Act) to the same extent
as provided above with respect to the indemnification of the holders of
Registrable Securities.

            (b) In connection with any registration statement in which a holder
of Registrable Securities is participating, each such holder shall furnish to
the Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, shall indemnify the Company, its
directors and officers and each Person who controls the Company (within the
meaning of the Securities Act) against any losses, claims, damages, liabilities
and expenses resulting from any untrue or alleged untrue statement of material
fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement is contained in any information or affidavit so furnished in
writing by such holder or relates to information required to be furnished by
such holder; provided that the obligation to indemnify shall be individual, not
joint and several, for each holder and shall be

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limited to the net amount of proceeds received by such holder from the sale of
Registrable Securities pursuant to such registration statement.

            (c) Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.

            (d) The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and shall survive the transfer of securities. The
Company also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.

      6. Participation in Underwritten Registrations. No Person may participate
in any registration hereunder which is underwritten unless such Person (i)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; provided that no
holder of Registrable Securities included in any underwritten registration shall
be required to make any representations or warranties to the Company or the
underwriters (other than representations and warranties regarding such holder
and such holder's intended method of distribution) or to undertake any
indemnification obligations to the Company or the underwriters with respect
thereto, except as otherwise provided in Section 5 hereof.

      7. Definitions.

      "Commonwealth Group" means Commonwealth Associates, a New York limited
partnership and Keith Rosenbloom, collectively.

      "Qualified Public Offering" means a firm commitment underwritten public
offering registered under the Securities Act of shares of the Company's Common
Stock in which (i) the aggregate price paid by the public for the shares shall
be at least $30 million, and (ii) the price per share paid by the public for
such shares shall be at least 300% of the largest of the

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Conversion Price of (a) the Series A Preferred Stock, (b) the Series B Preferred
Stock, or (c) the Series C Preferred Stock, in effect immediately prior to the
closing of the sale of such shares pursuant to the public offering.

      "Registrable Securities" means (i) any Common Stock issued upon the
conversion of any Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, or Series D Preferred Stock (ii) or any other Common Stock
issued or issuable with respect to the securities referred to in clause (i)
above by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization, and (iii) any other shares of Common Stock held by Persons
holding securities described in clauses (i) and (ii) above. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when they have been distributed to the public pursuant to an offering registered
under the Securities Act or sold to the public through a broker, dealer or
market maker in compliance with Rule 144 under the Securities Act (or any
similar rule then in force) or repurchased by the Company or any Subsidiary. For
purposes of this Agreement, a Person shall be deemed to be a holder of
Registrable Securities, and the Registrable Securities shall be deemed to be in
existence, whenever such Person has the right to acquire directly or indirectly
such Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected, and such Person shall be entitled to exercise the
rights of a holder of Registrable Securities hereunder.

      8. Miscellaneous.

            (a) No Inconsistent Agreements. The Company shall not hereafter
enter into any agreement with respect to its securities which is inconsistent
with, grants any holders of securities of the Company any superior rights to
those granted to holders of Preferred Stock herein, or which violates the rights
granted to the holders of Registrable Securities in this Agreement.

            (b) Adjustments Affecting Registrable Securities. The Company shall
not take any action, or permit any change to occur, with respect to its
securities which would materially and adversely affect the ability of the
holders of Registrable Securities to include such Registrable Securities in a
registration undertaken pursuant to this Agreement or which would materially and
adversely affect the marketability of such Registrable Securities in any such
registration (including, without limitation, effecting a stock split or a
combination of shares).

            (c) Remedies. Any Person having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.

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         (d) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and holders of a majority of the Registrable
Securities.

         (e) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities.

         (f) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.

         (g) Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together shall constitute one
and the same Agreement.

         (h) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.

         (i) Governing Law. The corporate law of the State of Delaware shall
govern all issues and questions concerning the relative rights of the Company
and its stockholders. All other issues and questions concerning the
construction, validity, interpretation and enforcement of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the State of Arizona, without giving effect to any choice of
law or conflict of law rules or provisions (whether of the State of Arizona or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Arizona. In furtherance of the foregoing,
the internal law of the State of Arizona shall control the interpretation and
construction of this Agreement (and all schedules and exhibits hereto), even
though under that jurisdiction's choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily apply.

         (j) Notices. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, one business day after being sent to the recipient by reputable
overnight courier service (charges prepaid) or five business days after being
mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
shall be sent to each Investor at the address indicated on the Schedule of
Investors attached hereto with a copy (which shall not constitute notice) to
Greenberg Traurig, LLP, One E. Camelback, Suite 1100, Phoenix, Arizona 85012,
Attn: Robert S. Kant and to the Company at the address indicated below:

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                         Alliance Medical Corporation
                         10232 South 51st Street
                         Phoenix, AZ 85044
                         Attn:  Mr. Ricardo M. Ferreira

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

                         Snell & Wilmer, L.L.P.
                         One Arizona Center
                         Phoenix, AZ 85004-0001
                         Attn:  Richard B. Stagg

or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.

                                    * * * * *

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

                                   ALLIANCE MEDICAL CORPORATION

                                   By:
                                      ------------------------------------------

                                   Its:
                                       -----------------------------------------

                                   APAX EXCELSIOR VI, L.P.

                                   By: APAX Excelsior VI Partners, L.P.
                                   Its: General Partner

                                   By: Patricof & Co. Managers, Inc.
                                   Its: General Partner

                                   By:
                                      ------------------------------------------
                                         Janet G. Effland
                                         Vice President

                                   PATRICOF PRIVATE INVESTMENT CLUB III, L.P.

                                   By: APAX Excelsior VI Partners, L.P.
                                   Its: General Partner

                                   By: Patricof & Co. Managers, Inc.
                                   Its: General Partner

                                   By:
                                      ------------------------------------------
                                         Janet G. Effland
                                         Vice President

                   [SIGNATURE PAGE FOR REGISTRATION AGREEMENT]

                                       12
<PAGE>   13
                                   DELPHI VENTURES IV, L.P.

                                   By:   Delphi Management Partners IV, L.L.C.
                                   Its:  General Partner

                                   By:
                                      ------------------------------------------
                                         Managing Member

                                   DELPHI BIOINVESTMENTS IV, L.P.

                                   By:   Delphi Management Partners IV, L.L.C.
                                   Its:  General Partner

                                   By:
                                      ------------------------------------------
                                         Managing Member

                                   VALLEY VENTURES II, L.P.

                                   By:   VV II Management, L.L.C.
                                   Its:  General Partner

                                   By:
                                      ------------------------------------------
                                         Managing Member

                                   CORAL PARTNERS V, LIMITED PARTNERSHIP

                                   By:   Coral Management Partners V, Limited
                                         Partnership
                                   Its:  General Partner

                                   By:
                                      ------------------------------------------
                                         General Partner

                   [SIGNATURE PAGE FOR REGISTRATION AGREEMENT]

                                       13
<PAGE>   14
                                   ---------------------------------------------
                                   Peter H. McNerney

                                   SPINAL PARTNERS II, LLC

                                   By:   Musculoskeletal Partners I, LLC
                                   Its:  Managing Member

                                   By:
                                      ------------------------------------------
                                         Anthony G. Viscogliosi
                                         Managing Member

                                   AFFINITY VENTURES III, L.P.

                                   By: Affinity Capital Advisors III, LLC
                                   Its: General Partner

                                   By:
                                      ------------------------------------------
                                         Edson W. Spencer, Jr.
                                         Managing Member

                                   AFFINITY VENTURES II, LLC

                                   By: Affinity Capital Advisors II, LLP
                                   Its: Managing Member

                                   By:
                                      ------------------------------------------
                                         Edson W. Spencer, Jr.
                                         General Partner

                                   HENRY KLYCE

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

                   [SIGNATURE PAGE FOR REGISTRATION AGREEMENT]

                                       14
<PAGE>   15
                              SCHEDULE OF INVESTORS
<TABLE>
<CAPTION>
                                           NO. OF SHARES OF      NO. OF SHARES OF      NO. OF SHARES OF        NO. OF SHARES OF
            NAMES AND ADDRESSES            SERIES A PREFERRED    SERIES B PREFERRED    SERIES C PREFERRED      SERIES D PREFERRED
--------------------------------           ------------------    ------------------    ------------------      -------------------
<S>                                        <C>                   <C>                   <C>                     <C>
Affinity Ventures III, L.P.                           0                        0                1,612,903               285,714
901 Marquette Avenue, Suite 1810
Minneapolis, MN 55402

Affinity Ventures II, LLC                             0                        0                  225,806                40,000
901 Marquette Avenue, Suite 1810
Minneapolis, MN 55402

APAX Excelsior VI, L.P.                               0                3,053,030                1,378,788               732,727
2100 Geng Road, Suite 150
Palo Alto, CA 94303

Patricof Private Investment                           0                  102,500                   46,290                24,600
Club III, L.P.
2100 Geng Road, Suite 150
Palo Alto, CA 94303

APAX Excelsior VI-A C.V., L.P.                        0                  249,539                  112,695                59,889
2100 Geng Road, Suite 150
Palo Alto, CA 94303

APAX Excelsior VI-B C.V., L.P.                        0                  166,360                   75,130                39,926
2100 Geng Road, Suite 150
Palo Alto, CA 94303

Delphi Ventures IV, L.P.                      3,117,545                  874,821                  632,129               139,971
3000 Sand Hill Road
Building 1, Suite 135
Menlo Park, CA 94035

Delphi BioInvestments IV, L.P.                   64,273                   18,036                   13,032                 2,886
3000 Sand Hill Road
Building 1, Suite 135
Menlo Park, CA 94035

Valley Ventures II, L.P.                      1,818,182                  357,143                  258,065                     0
6720 N. Scottsdale Road
Suite 280
Scottsdale, AZ 85253
</TABLE>
<PAGE>   16
<TABLE>
<CAPTION>
                                           NO. OF SHARES OF      NO. OF SHARES OF      NO. OF SHARES OF        NO. OF SHARES OF
            NAMES AND ADDRESSES            SERIES A PREFERRED    SERIES B PREFERRED    SERIES C PREFERRED      SERIES D PREFERRED
--------------------------------           ------------------    ------------------    ------------------      -------------------

<S>                                        <C>                   <C>                   <C>                     <C>
Coral Partners V, Limited Partnership         2,699,545                  703,563                  638,710               114,286
60 South 6th Street
Suite 3510
Minneapolis, MN 55402

Peter H. McNerney                                18,182                    7,150                    6,452                 2,286
Coral Ventures
60 South 6th Street, Suite 3510
Minneapolis, MN 55402

Mark C. Headrick                                    909                      715                        0                     0
Coral Ventures
60 South 6th Street, Suite 3510
Minneapolis, MN 55402

Linda Watchmaker                                    909                      715                        0                     0
Coral Ventures
60 South 6th Street, Suite 3510
Minneapolis, MN 55402

Coral Group, Inc. Retirement Plan, Yuval              0                    2,143                        0                     0
Almog, Peter H. McNerney and Linda
Watchmaker, Trustees, FBO Karen Boezi

Spinal Partners II, LLC                               0                  142,857                   96,774                     0
c/o Viscogliosi Brothers LLC
505 Park Avenue, 14th Floor
New York, NY 10022

Viscogliosi Brothers Venture Partners I,              0                        0                        0               176,000
LLC
505 Park Avenue, 14th Floor
New York, NY 10022

Anthony G. Viscogliosi                                0                        0                        0                51,429
505 Park Avenue, 14th Floor
New York, NY 10022

Henry Klyce                                           0                        0                   64,516                     0
1900 Bates Avenue, Suites L&M
Concord, CA 94520
</TABLE>

                                       2
<PAGE>   17

<TABLE>
<CAPTION>
                                           NO. OF SHARES OF      NO. OF SHARES OF      NO. OF SHARES OF        NO. OF SHARES OF
            NAMES AND ADDRESSES            SERIES A PREFERRED    SERIES B PREFERRED    SERIES C PREFERRED      SERIES D PREFERRED
--------------------------------           ------------------    ------------------    ------------------      -------------------

<S>                                        <C>                   <C>                   <C>                     <C>
Karen Boezi                                       2,273                        0                        0                     0
Coral Ventures
3000 Sand Hill Rd.
Bldg. 3210
Menlo Park, CA 94025

William Baumel                                      909                        0                        0                     0
RWI Group
720 University Avenue #103
Palo Alto, CA 94301

Delaware Charter Guarantee & Trust                4,545                        0                        0                     0
Co. Ttee FBO Yuval Almog IRA
Darlene Lewis
c/o B.T. Alex. Brown IRA Department
35 West Padonia Road
Timonieum, MD 21093

John Rogers                                           0                        0                        0               142,857

Hexagon Investments, Inc.                             0                        0                        0               285,714

627324 Ontario Limited                                0                   35,714                        0                42,857

Terence Winters                                       0                        0                        0                17,143

Rick Ferreira                                         0                        0                        0                 6,571

Barbara Parnes                                        0                        0                        0                 6,571

                                             ---------                ---------                ----------             ---------
TOTAL                                         7,727,272                5,714,286                5,161,290             2,171,427
</TABLE>

                                       3<PAGE>   1
                                                                    Exhibit 10.1

                         ALLIANCE MEDICAL CORPORATION
                           1999 STOCK INCENTIVE PLAN

         ARTICLE 1 PURPOSE

         1.1 GENERAL. The purpose of the Alliance Medical Corporation 1999 Stock
Incentive Plan (the "Plan") is to promote the success and enhance the value of
Alliance Medical Corporation (the "Company") by linking the personal interests
of its officers, employees, directors, and consultants or independent
contractors to those of Company stockholders and by providing such individuals
with an incentive for outstanding performance. The Plan is further intended to
provide flexibility to the Company in its ability to motivate, attract, and
retain the services of officers, employees, directors, and consultants or
independent contractors upon whose judgment, interest, and special effort the
successful conduct of the Company's operation is largely dependent.

         ARTICLE 2 EFFECTIVE AND EXPIRATION DATES

         2.1 EFFECTIVE DATE. The Plan is effective as of August 3, 1999 (the
"Effective Date"). Within 12 months of the Effective Date the shareholders of
the Company must approve the Plan. If the shareholders do not approve the Plan
within this time, no Incentive Stock Options may be granted under the Plan and
to the extent that Incentive Stock Options were granted, they will be considered
Non-Qualified Stock Options.

         2.2 EXPIRATION DATE. Unless the Plan is sooner terminated under Article
10, the Plan will expire on August 2, 2009 ("Expiration Date") and after that
date no new Options may be granted under the Plan. However, Options granted
prior to the Expiration Date may continue to be outstanding after such date.

         ARTICLE 3 DEFINITIONS AND CONSTRUCTION

         3.1 DEFINITIONS. When a word or phrase appears in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in this
Section or in Sections 1.1 or 2.1 unless a clearly different meaning is required
by the context. The following words and phrases shall have the following
meanings:

            (a) "Board" means the Board of Directors of the Company.

            (b) "Change of Control" means and includes each of the following:
<PAGE>   2
                  (1) When the individuals who constituted the Board of
      Directors at the beginning of any one-year period cease, for any reason,
      to constitute at least a majority of the Board of Directors, unless the
      election or nomination for election of each new director was approved by
      the vote of at least two-thirds of the directors then still in office who
      were directors at the beginning of such period;

                  (2) A change of control of the Company through a transaction
      or series of transactions, such that any person (as that term is used in
      Section 13 and 14(d)(2) of the Exchange Act), excluding affiliates of the
      Company as of the Effective Date, is or becomes the beneficial owner (as
      that term is used in Section 13(d) of the Exchange Act) directly or
      indirectly of securities of the Company representing 50.1% or more of the
      combined voting power of the Company's then outstanding securities;

                  (3) Any consolidation or liquidation of the Company in which
      the Company is not the continuing or surviving corporation or pursuant to
      which Stock would be converted into cash, securities or other property,
      other than a merger of the Company in which the holders of the shares of
      Stock immediately before the merger have substantially the same
      proportionate ownership of common stock of the surviving corporation
      immediately after the merger;

                  (4)   The stockholders of the Company approve any plan or
      proposal for the liquidation or dissolution of the Company; or

                  (5) Substantially all of the assets of the Company are sold or
      otherwise transferred to parties that are not within a "controlled group
      of corporations" (as defined in Section 1563 of the Code) of which the
      Company is a member.

            (c) "Code" means the Internal Revenue Code of 1986, as amended.

            (d) "Committee" means the committee of the Board described in
      Article 4.

            (e) "Disability" means any illness or other physical or mental
      condition of a Participant which renders the Participant incapable of
      performing his customary and usual duties for the Company, or any
      medically determinable illness or other physical or mental condition
      resulting from a bodily injury, disease or mental disorder which in the
      judgment of the Committee is permanent and continuous in nature. The
      Committee may require such medical or other evidence as it deems necessary
      to judge the nature and permanency of the Participant's condition.

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

                                       2
<PAGE>   3
            (g) "Fair Market Value" means, as of any given date, the fair market
      value of Stock on a particular date determined by the Committee in
      accordance with such methods or procedures as may be established from time
      to time in good faith by the Committee.

            (h) "Incentive Stock Option" means an Option that is intended to
      meet the requirements of Section 422 of the Code or any successor
      provision thereto.

            (i) "Non-Qualified Stock Option" means an Option that is not
      intended to be an Incentive Stock Option.

            (j) "Option" means a right granted to a Participant under Article 7
      of the Plan to purchase Stock at a specified price during specified time
      periods. An Option may be either an Incentive Stock Option or a
      Non-Qualified Stock Option.

            (k) "Option Agreement" means any written agreement, contract, or
      other instrument or document evidencing an Option.

            (l) "Participant" means a person who, as an officer, employee,
      director, consultant or independent contractor of the Company or any
      Subsidiary, has been granted an Option under the Plan.

            (m) "Plan" means the Alliance Medical Corporation 1999 Stock
      Incentive Plan, as amended from time to time.

            (n) "Stock" means the common stock of the Company and such other
      securities of the Company that may be substituted for Stock pursuant to
      Article 8.

            (o) "Subsidiary" means any corporation of which a majority of the
      outstanding voting stock or voting power is beneficially owned directly or
      indirectly by the Company.

         ARTICLE 4 ADMINISTRATION

         4.1 COMMITTEE. The Plan shall be administered by a Committee that is
appointed by, and shall serve at the discretion of, the Board. If the Board does
not appoint a Committee, references in the Plan to Committee will refer to the
Board.

                                        3
<PAGE>   4
         4.2 ACTION BY THE COMMITTEE. A majority of the Committee shall
constitute a quorum. The acts of a majority of the members present at any
meeting at which a quorum is present and acts approved in writing by a majority
of the Committee in lieu of a meeting shall be deemed the acts of the Committee.
Each member of the Committee is entitled to, in good faith, rely or act upon any
report or other information furnished to that member by any officer or other
employee of the Company or any Subsidiary, the Company's independent certified
public accountants, or any executive compensation consultant or other
professional retained by the Company to assist in the administration of the
Plan.

         4.3 AUTHORITY OF COMMITTEE. The Committee has the exclusive power,
authority and discretion to:

            (a) Designate Participants to receive Options;

            (b) Determine the type or types of Options to be granted to each
      Participant;

            (c) Determine the number of Options to be granted and the number of
      shares of Stock to which an Option will relate;

            (d) Determine the terms and conditions of any Option granted under
      the Plan including but not limited to, the exercise price, grant price, or
      purchase price, any restrictions or limitations on the Option, any
      schedule for lapse of forfeiture restrictions or restrictions on the
      exercisability of an Option, accelerations or waivers thereof, and any
      rights of first refusal or other restrictions on the sale of Stock, based
      in each case on such considerations as the Committee in its sole
      discretion determines;

            (e) Determine whether, to what extent, and under what circumstances
      an Option may be settled in, or the exercise price of an Option may be
      paid in, cash, Stock, other Options, or other property, or an Option may
      be canceled, forfeited, or surrendered;

            (f) Prescribe the form of each Option Agreement, which need not be
      identical for each Participant;

            (g) Decide all other matters that must be determined in connection
      with an Option;

            (h) Establish, adopt or revise any rules and regulations as it may
      deem necessary or advisable to administer the Plan; and

            (i) Make all other decisions and determinations that may be required
      under the Plan or as the Committee deems necessary or advisable to
      administer the Plan.

                                       4
<PAGE>   5
         4.4 DECISIONS BINDING. The Committee's interpretation of the Plan, any
Options granted under the Plan, any Option Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.

         ARTICLE 5 SHARES SUBJECT TO THE PLAN

         5.1 NUMBER OF SHARES. Subject to adjustment provided in Section 9, the
aggregate number of shares of Stock reserved and available for grant under the
Plan shall be 1,000,000.

         5.2 LAPSED OPTIONS. To the extent that an Option terminates, expires or
lapses for any reason, any shares of Stock subject to the Option will again be
available for the grant of an Option under the Plan.

         5.3 STOCK DISTRIBUTED. Any Stock distributed pursuant to an Option may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.

         ARTICLE 6 ELIGIBILITY AND PARTICIPATION

         6.1 ELIGIBILITY. Persons eligible to participate in this Plan include
all officers, employees, directors, and consultants or independent contractors
of the Company or a Subsidiary, as determined by the Committee, including
employees who are also members of the Board.

         6.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from among all eligible individuals,
those to whom Options shall be granted and shall determine the nature and amount
of each Option. No individual shall have any right to be granted an Option under
this Plan.

         ARTICLE 7 STOCK OPTIONS

         7.1 GENERAL. The Committee is authorized to grant Options to
Participants on the following terms and conditions:

            (a) EXERCISE PRICE. The exercise price per share of Stock under an
Option shall be determined by the Committee and set forth in the Option
Agreement. It is the intention under the Plan that the exercise price for any
Option shall not be less than the Fair Market Value as of the date of grant;
provided, however that the Committee may, in its discretion, grant Options
(other than Incentive Stock Options) with an exercise price of less than Fair
Market Value on the date of grant.

            (b) TIME AND CONDITIONS OF EXERCISE. The Committee shall determine
the time or times at which an Option may be exercised in whole or in part. The

                                       5
<PAGE>   6
Committee also shall determine the performance or other conditions, if any, that
must be satisfied before all or part of an Option may be exercised.

            (c) PAYMENT. The Committee shall determine the methods by which the
exercise price of an Option may be paid, the form of payment, including, without
limitation, cash, shares of Stock, or other property (including broker-assisted
"cashless exercise" arrangements), and the methods by which shares of Stock
shall be delivered or deemed to be delivered to Participants.

            (d) EVIDENCE OF GRANT. All Options shall be evidenced by a written
Option Agreement between the Company and the Participant. The Option Agreement
shall include such provisions as may be specified by the Committee.

         7.2 INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be granted
only to employees and the terms of any Incentive Stock Options granted under the
Plan must comply with the following additional rules:

            (a) EXERCISE PRICE. The exercise price per share of Stock shall be
set by the Committee, provided that the exercise price for any Incentive Stock
Option may not be less than the Fair Market Value as of the date of the grant.

            (b) EXERCISE. In no event may any Incentive Stock Option be
exercisable for more than ten years from the date of its grant.

            (c) LAPSE OF OPTION. An Incentive Stock Option shall lapse under the
following circumstances:

                  (1) The Incentive Stock Option will terminate ten years from
      the date it is granted, unless an earlier time is set in the Option
      Agreement.

                  (2) The Incentive Stock Option will terminate three months
      after the Participant's termination of employment, if the termination of
      employment is for any reason other than death or Disability, provided that
      the Committee has approved, in writing, the continuation of any Incentive
      Stock Option outstanding on the date of the Participant's termination of
      employment.

                  (3) If the Participant dies or becomes Disabled before the
      Option lapses pursuant to paragraph (1) or (2), above, the Incentive Stock
      Option shall lapse, unless it is previously exercised, on the earlier of
      (i) the Option"s Expiration Date; or (ii) 12 months after the date of the
      Participant's termination of employment due to death or Disability. Upon
      the Participant's death or Disability, any Incentive Stock Options
      exercisable at the Participant"s death or Disability may be exercised by
      the Participant's legal representative or representatives, by the person
      or persons entitled to do so under the Participant's last will and
      testament, or, if the Participant shall fail to make testamentary

                                       6
<PAGE>   7
      disposition of such Incentive Stock Option or shall die intestate, by the
      person or persons entitled to receive said Incentive Stock Option under
      the applicable laws of descent and distribution.

             (d) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair Market Value
      (determined as of the time an Option is made) of all shares of Stock with
      respect to which Incentive Stock Options are first exercisable by a
      Participant in any calendar year may not exceed $100,000.00 or such other
      limitation as imposed by Section 422(d) of the Code, or any successor
      provision. To the extent that Incentive Stock Options are first
      exercisable by a Participant in excess of such limitation, the excess
      shall be considered Non-Qualified Stock Options.

             (e) TEN PERCENT OWNERS. Any Incentive Stock Option granted to an
      individual who, at the date of grant, owns stock possessing more than ten
      percent of the total combined voting power of all classes of Stock of the
      Company must be granted at a price that is not less than 110% of Fair
      Market Value on the date of grant and the Option must not be exercisable
      for more than five years from the date of grant.

             (f) EXPIRATION OF INCENTIVE STOCK OPTIONS. No award of an Incentive
      Stock Option may be made pursuant to this Plan after the tenth anniversary
      of the Effective Date.

             (g) RIGHT TO EXERCISE. During a Participant's lifetime, an
      Incentive Stock Option may be exercised only by the Participant.

      ARTICLE 8 PROVISIONS APPLICABLE TO OPTIONS

      8.1 TERM OF OPTION. The term of each Option shall be for the period as
determined by the Committee, provided that in no event shall the term of any
Incentive Stock Option exceed a period of ten years from the date of its grant.

      8.2 FORM OF PAYMENT FOR OPTIONS. Subject to the terms of the Plan and any
applicable law or Option Agreement, payments or transfers to be made by the
Company or a Subsidiary on the grant or exercise of an Option may be made in
such forms as the Committee determines at or after the time of grant, including
without limitation, cash, Stock, other Options, or other property, or any
combination, and may be made in a single payment or transfer, in installments,
or on a deferred basis, in each case determined in accordance with rules adopted
by, and at the discretion of, the Committee.

      8.3 LIMITS ON TRANSFER. No right or interest of a Participant in any
Option may be pledged, encumbered, or hypothecated to or in favor of any party
other than the Company or a Subsidiary, or shall be subject to any lien,
obligation, or liability of such Participant to any other party other than the
Company or a Subsidiary. Except as otherwise provided by the Committee,

                                       7
<PAGE>   8
no Option shall be assignable or transferable by a Participant other than by
will or the laws of descent and distribution.

      8.4 BENEFICIARIES. Notwithstanding Section 8.3, a Participant may, in the
manner determined by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Option upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Option Agreement applicable to the
Participant, except to the extent the Plan and Option Agreement otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Committee. If the Participant is married, a designation of a person other
than the Participant's spouse as his beneficiary with respect to more than 50
percent of the Participant's interest in the Option shall not be effective
without the written consent of the Participant's spouse. If no beneficiary has
been designated or survives the Participant, payment shall be made to the person
entitled thereto under the Participant's will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed
or revoked by a Participant at any time provided the change or revocation is
filed with the Committee.

      8.5 STOCK CERTIFICATES. All Stock certificates delivered under the Plan
are subject to any stop-transfer orders and other restrictions as the Committee
deems necessary or advisable to comply with Federal or state securities laws,
rules and regulations and the rules of any national securities exchange or
automated quotation system on with the Stock is listed, quoted, or traded. The
Committee may place legends on any Stock certificate to reference restrictions
applicable to the Stock.

      8.6 ACCELERATION UPON A CHANGE OF CONTROL. If a Change of Control occurs,
Options may, in the discretion of the Committee, become fully exercisable and
all restrictions on outstanding Options may be waived. To the extent that this
provision causes Incentive Stock Options to exceed the dollar limitation set
forth in Section 7.2(d), the excess Options shall be deemed to be Non-Qualified
Stock Options. Upon, or in anticipation of, such an event, the Committee may
cause every Option outstanding hereunder to terminate at a specific time in the
future and shall give each Participant the right to exercise Options during a
period of time as the Committee, in its sole and absolute discretion, shall
determine, except in the event that the surviving or resulting entity agrees to
assume the Options on terms and conditions that substantially preserve the
Participant"s rights and benefits of the Option then outstanding.

                                       8
<PAGE>   9
      ARTICLE 9 CHANGES IN CAPITAL STRUCTURE

      9.1 GENERAL. In the event a stock dividend is declared upon the Stock, the
shares of Stock then subject to each Option (and the number of shares subject
thereto) shall be increased proportionately without any change in the aggregate
purchase price therefor. In the event the Stock shall be changed into or
exchanged for a different number or class of shares of Stock or of another
corporation, whether through reorganization, recapitalization, stock split-up,
combination of shares, merger or consolidation, there shall be substituted for
each such share of Stock then subject to each Option (and for each share of
Stock then subject thereto) the number and class of shares of Stock into which
each outstanding share of Stock shall be so exchanged, all without any change in
the aggregate purchase price for the shares then subject to each Option.

             ARTICLE 10 AMENDMENT, MODIFICATION AND TERMINATION

             10.1 AMENDMENT, MODIFICATION AND TERMINATION. With the approval of
the Board, at any time and from time to time, the Committee may terminate, amend
or modify the Plan.

             10.2 OPTIONS PREVIOUSLY GRANTED. No termination, amendment, or
modification of the Plan shall adversely affect in any material way any Option
previously granted under the Plan, without the written consent of the
Participant.

             ARTICLE 11 GENERAL PROVISIONS

             11.1 NO RIGHTS TO OPTIONS. No Participant , employee, or other
person shall have any claim to be granted any Option under the Plan, and neither
the Company nor the Committee is obligated to treat Participants, employees, and
other persons uniformly.

             11.2 NO STOCKHOLDERS RIGHTS. No Option gives the Participant any of
the rights of a stockholder of the Company unless and until shares of Stock are
in fact issued to such person in connection with such Option.

             11.3 WITHHOLDING. The Company or any Subsidiary shall have the
authority and the right to deduct or withhold, or require a Participant to remit
to the Company, an amount sufficient to satisfy Federal, state, and local taxes
(including the Participant's FICA obligation) required by law to be withheld
with respect to any taxable event arising as a result of this Plan.

             11.4 NO RIGHT TO EMPLOYMENT. Nothing in the Plan or any Option
Agreement shall interfere with or limit in any way the right of the Company or
any Subsidiary to terminate any Participant's employment at any time, nor confer
upon any Participant any right to continue in the employ of the Company or any
Subsidiary.

             11.5 UNFUNDED STATUS OF OPTIONS. The Plan is intended to be an
"unfunded" plan for incentive compensation. With respect to any payments not yet
made to a

                                       9
<PAGE>   10
Participant pursuant to an Option, nothing contained in the Plan or any Option
Agreement shall give the Participant any rights that are greater than those of a
general creditor of the Company or any Subsidiary.

             11.6 INDEMNIFICATION. To the extent allowable under applicable law,
each member of the Committee or of the Board shall be indemnified and held
harmless by the Company from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by such member in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or failure
to act under the Plan and against and from any and all amounts paid by him or
her in satisfaction of judgment in such action, suit, or proceeding against him
or her provided he or she gives the Company an opportunity, at its own expense,
to handle and defend the same before he or she undertakes to handle and defend
it on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Articles of Incorporation or By-Laws, as a matter
of law, or otherwise, or any power that the Company may have to indemnify them
or hold them harmless.

             11.7 RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan
shall be taken into account in determining any benefits under any pension,
retirement, savings, profit sharing, group insurance, welfare or other benefit
plan of the Company or any Subsidiary.

             11.8 EXPENSES. The expenses of administering the Plan shall be
borne by the Company and its Subsidiaries.

             11.9 TITLES AND HEADINGS. The titles and headings of the Sections
in the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.

             11.10 FRACTIONAL SHARES. No fractional shares of stock shall be
issued and the Committee shall determine, in its discretion, whether cash shall
be given in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up.

             11.11 SECURITIES LAW COMPLIANCE. With respect to any person who is,
on the relevant date, obligated to file reports under Section 16 of the Exchange
Act, transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Committee fails to so comply, it
shall be void to the extent permitted by law and voidable as deemed advisable by
the Committee.

             11.12 GOVERNMENT AND OTHER REGULATIONS. The obligation of the
Company to make payment of Options in Stock or otherwise shall be subject to all
applicable laws, rules, and regulations, and to such approvals by government
agencies as may be required. The Company shall be under no obligation to
register under the Securities Act of 1933, as

                                       10
<PAGE>   11
amended (the "1933 Act"), any of the shares of Stock paid under the Plan. If the
shares paid under the Plan may in certain circumstances be exempt from
registration under the 1933 Act, the Company may restrict the transfer of such
shares in such manner as it deems advisable to ensure the availability of any
such exemption.

             11.13 GOVERNING LAW. The Plan and all Option Agreements shall be
construed in accordance with and governed by the laws of the State of Arizona.

                                       11

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