Document:

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                                                                  EXHIBIT 10.23

                         AGREEMENT AND PLAN OF MERGER

                                    BETWEEN

                          VIEWER ACQUISITION CORP.,

                                      AND

                            ALLIANCE IMAGING, INC.

                              SEPTEMBER 13, 1999

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                              TABLE OF CONTENTS

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                                                                                PAGE
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ARTICLE I THE MERGER..........................................................     2

  1.1   THE MERGER............................................................     2
  1.2   CONSUMMATION OF THE MERGER............................................     2
  1.3   CLOSING...............................................................     3
  1.4   EFFECTS OF THE MERGER.................................................     3
  1.5   CERTIFICATE OF INCORPORATION AND BYLAWS...............................     3
  1.6   DIRECTORS.............................................................     3
  1.7   OFFICERS..............................................................     3

ARTICLE II EFFECTS OF THE MERGER..............................................     4

  2.1   EFFECT ON CAPITAL STOCK...............................................     4
  2.2   EXCHANGE OF CERTIFICATES..............................................     5
  2.3   THE DEBT OFFER........................................................     6
  2.4   CORPORATION STOCK OPTIONS.............................................     7
  2.5   MERGER PRICE..........................................................     8

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE CORPORATION.................     8

  3.1   ORGANIZATION, STANDING, QUALIFICATION AND POWER.......................     8
  3.2   AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY.....................     8
  3.3   NO CONFLICTS; CONSENTS................................................     9
  3.4   CAPITALIZATION........................................................     9
  3.5   SUBSIDIARIES..........................................................    10
  3.6   SEC DOCUMENTS; FINANCIAL STATEMENTS; OTHER FINANCIAL INFORMATION......    11
  3.7   ASSETS OTHER THAN REAL PROPERTY INTERESTS.............................    11
  3.8   REAL PROPERTY.........................................................    12
  3.9   INTELLECTUAL PROPERTY.................................................    12
  3.10  MATERIAL CONTRACTS....................................................    13
  3.11  PERMITS...............................................................    14
  3.12  TAXES.................................................................    15
  3.13  PROCEEDINGS...........................................................    15
  3.14  BENEFIT PLANS.........................................................    16
  3.15  ABSENCE OF CHANGES OR EVENTS..........................................    17
  3.16  COMPLIANCE WITH APPLICABLE LAWS.......................................    18
  3.17  ENVIRONMENTAL MATTERS.................................................    19
  3.18  EMPLOYEE AND LABOR MATTERS............................................    19
  3.19  AFFILIATE TRANSACTIONS................................................    20
  3.20  STATE TAKEOVER STATUTES...............................................    20
  3.21  OPINION OF FINANCIAL ADVISOR..........................................    20
  3.22  CERTAIN ADDITIONAL REGULATORY MATTERS.................................    20
  3.23  MEDICARE/MEDICAID PARTICIPATION ACCREDITATION.........................    21
  3.24  BROKERS OR FINDERS....................................................    22
  3.25  NO ADDITIONAL REPRESENTATIONS.........................................    22

ARTICLE IV REPRESENTATION AND WARRANTIES OF PARENT CORP. AND NEW CO...........    23

  4.1   ORGANIZATION, STANDING, QUALIFICATION AND POWER.......................    23
  4.2   AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY.....................    23
  4.3   NO CONFLICTS; CONSENT.................................................    23
  4.4   LITIGATION............................................................    24
  4.5   AVAILABILITY OF FUNDS.................................................    24

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  4.6   BROKERS OR FINDERS....................................................    25
  4.7   NEWCO................................................................     25

ARTICLE V COVENANTS...........................................................    25

  5.1   CONDUCT OF BUSINESS...................................................    25
  5.2   ACCESS TO INFORMATION.................................................    27
  5.3   CONFIDENTIALITY.......................................................    28
  5.4   EFFORTS TO CONSUMMATE.................................................    28
  5.5   EXPENSES..............................................................    29
  5.6   PUBLICITY.............................................................    29
  5.7   EMPLOYEE MATTERS......................................................    29
  5.8   INDEMNIFICATION, EXCULPATION..........................................    30
  5.9   NO SOLICITATION.......................................................    30
  5.10  FINANCIAL INFORMATION.................................................    31
  5.11  NOTICE OF CHANGES.....................................................    31
  5.12  REGISTRATION RIGHTS AGREEMENT.........................................    31
  5.13  AFFILIATE AGREEMENTS..................................................    31
  5.14  LEASE AGREEMENTS......................................................    31

ARTICLE VI CONDITIONS PRECEDENT...............................................    32

  6.1   CONDITIONS TO EACH PARTY'S OBLIGATION.................................    32
  6.2   CONDITIONS TO OBLIGATION OF NEWCO.....................................    32
  6.3   CONDITIONS TO THE OBLIGATION OF THE CORPORATION.......................    34

ARTICLE VII TERMINATION.......................................................    35

  7.1   TERMINATION...........................................................    35
  7.2   EFFECT OF TERMINATION.................................................    36

ARTICLE VIII GENERAL PROVISIONS...............................................    36

  8.1   ASSIGNMENT............................................................    36
  8.2   NO THIRD-PARTY BENEFICIARIES..........................................    36
  8.3   SURVIVAL..............................................................    36
  8.4   NOTICES...............................................................    36
  8.5   INTERPRETATION; EXHIBITS AND SCHEDULES................................    37
  8.6   COUNTERPARTS..........................................................    38
  8.7   ENTIRE AGREEMENT......................................................    38
  8.8   AMENDMENTS AND WAIVERS................................................    38
  8.9   SEVERABILITY..........................................................    38
  8.10  CONSENT TO JURISDICTION...............................................    39
  8.11  LIMITATION OF DAMAGES.................................................    39
  8.12  GOVERNING LAW.........................................................    39
  8.13  WAIVER OF JURY TRIAL..................................................    39
  8.14  EQUITABLE REMEDIES....................................................    40

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                                           AGREEMENT AND PLAN OF MERGER dated
                                     as of September 13, 1999, between VIEWER
                                     ACQUISITION CORPORATION, a Delaware
                                     corporation ("NEWCO") and ALLIANCE IMAGING,
                                     INC., a Delaware corporation (the
                                     "CORPORATION"). Capitalized terms used but
                                     not defined herein have the meanings set
                                     forth in ANNEX I hereto.

     WHEREAS, the Board of Directors of the Corporation (the "BOARD") and
Newco have determined that the merger of Newco with and into the Corporation
(the "MERGER") pursuant to Section 251 of the Delaware General Corporation
Law ("DGCL"), upon the terms and subject to the conditions set forth in this
Agreement, would be fair and in the best interests of their respective
stockholders, and such Boards of Directors have approved this Agreement and
such Merger, pursuant to which each share of (A) Common Stock, par value $.01
per share, of the Corporation (the "COMMON STOCK") issued and outstanding
immediately prior to the Effective Time (other than (i) shares of Common
Stock owned, directly or indirectly, by the Corporation or any of its
Subsidiaries, (ii) shares of Common Stock owned by Viewer Holdings LLC, a
Delaware limited liability company ("HOLDINGS LLC"), a subsidiary of KKR 1996
Fund, L.P. ("PARENT"), Viewer Acquisition LLC, a Delaware limited liability
company, a subsidiary of Holdings LLC ("ACQUISITION LLC") and Newco, a
subsidiary of Acquisition LLC, (iii) the Retained Shares and (iv) Dissenting
Shares) will be converted into the right to receive the Cash Merger Price,
and (B) Series F Redeemable Preferred Stock, par value $.01 per share (the
"SERIES F PREFERRED") issued and outstanding immediately prior to the
Effective Time will be converted into the right to receive the Preferred
Merger Price;

     WHEREAS, Apollo Investment Fund III, L.P., Apollo Overseas Partners III,
L.P., Apollo (U.K.) Partners III, L.P. and Newport Investment LLC
(collectively, the "PRINCIPAL STOCKHOLDERS") own 5,033,762 shares of Common
Stock and 141,000 shares of Series F Preferred;

     WHEREAS, after the Board approved this Agreement and the Merger, the
Merger and this Agreement was approved by the written consent of the
Principal Stockholders as owners of at least a majority of the outstanding
shares of the Common Stock and by Newport Investment LLC as the owner of
141,000 of the outstanding shares of Series F Preferred;

     WHEREAS, Newco is unwilling to enter into this Agreement unless,
contemporaneously with the execution and delivery of this Agreement, each of
the Principal Stockholders enter into an agreement (each, a "STOCKHOLDER
SUPPORT AGREEMENT") providing for certain actions relating to the shares of
Common Stock and Series F Preferred owned by them; and the Corporation has
approved the entering into by Holdings LLC and each Principal Stockholder of
a Stockholder Support Agreement, and such parties have, simultaneously with
the execution of this Agreement, executed and delivered a Stockholder Support
Agreement;

     WHEREAS, the Principal Stockholders are unwilling to authorize the
transactions contemplated by this Agreement or enter into a Stockholder
Support Agreement unless, contemporaneously with the execution and delivery
of this Agreement, Holdings LLC and the

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Corporation enter into an agreement (the "STOCKHOLDERS AGREEMENT") with the
Principal Stockholders and the Substitute Principal Stockholders that will
hold Retained Shares providing for certain minority shareholder protections,
and such parties have, simultaneously with the execution of this Agreement,
executed and delivered the Stockholders Agreement;

     WHEREAS, the Board has approved and authorized for all purposes under
the DGCL, the Stockholder Support Agreements and the Stockholder Agreement;

     WHEREAS, it is intended that the Merger be recorded as a recapitalization
for financial reporting purposes; and

     WHEREAS, Newco and the Corporation desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger.

     NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Newco and the Corporation hereby agrees as follows:

                                   ARTICLE I

                                  THE MERGER

1.1  THE MERGER.

     Upon the terms and subject to the conditions hereof, and in accordance
with the relevant provisions of the DGCL, Newco shall be merged with and into
the Corporation as soon as practicable following the satisfaction or waiver,
if permissible, of the conditions set forth in Article VI. The Corporation
shall be the surviving corporation in the Merger (the "SURVIVING CORPORATION")
and shall continue its existence under the laws of Delaware. From and after
the Effective Time, the separate corporate existence of Newco shall cease.

1.2  CONSUMMATION OF THE MERGER.

     Subject to the provisions of this Agreement, as soon as practicable
following the satisfaction or waiver, if permissible, of the conditions set
forth in ARTICLE VI, the parties hereto shall cause the Merger to be
consummated by filing with the Secretary of State of the State of Delaware a
duly executed certificate of merger (the "CERTIFICATE OF MERGER"), as
required by the DGCL, and shall take all such other and further actions as
may be required by law to make the Merger effective as promptly as
practicable. The Merger will become effective at such time as the Certificate
of Merger is duly filed with the Secretary of State of the State of Delaware,
or at such other time as is permissible in accordance with the DGCL and as
Newco and the Corporation shall agree should be specified in the Certificate
of Merger (the time the Merger becomes effective being the "EFFECTIVE TIME").

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1.3  CLOSING.

     Prior to the filing of the Certificate of Merger, a closing (the
"CLOSING") will be held at the offices of Latham & Watkins, 855 Third Avenue,
Suite 1000, New York, New York for such other place as the parties may
agree). The Closing shall take place on a date (the "CLOSING DATE") to be
mutually agreed upon by the parties.

1.4  EFFECTS OF THE MERGER.

     The Merger shall have the effects set forth in the applicable provisions
of the DGCL and as set forth herein.

1.5  CERTIFICATE OF INCORPORATION AND BYLAWS.

     (a)  At the Effective Time, and without any further action on the part
of the Corporation and Newco, the Restated Certificate of Incorporation of
the Corporation (the "CERTIFICATE OF INCORPORATION") as in effect immediately
prior to the Effective Time shall be amended so as to read in its entirety in
the form set forth as EXHIBIT A hereto, and as so amended, until thereafter
changed or amended as provided therein or by applicable law, it shall be the
certificate of incorporation of the Surviving Corporation.

     (b)  At the Effective Time, and without any further action on the part
of the Corporation and Newco, the by-laws of the Corporation (the "BY-LAWS")
as in effect immediately prior to the Effective Time shall be amended so as
to read in their entirety in the form set forth in EXHIBIT B, and as so
amended, shall be the by-laws of the Surviving Corporation, until thereafter
changed or amended as provided therein or by applicable law.

1.6  DIRECTORS.

     The directors of Newco at the Effective Time shall be the directors of
the Surviving Corporation until the earlier of their resignation or removal
or until their successors are duly elected or appointed and qualified.

1.7  OFFICERS.

     The officers of the Corporation at the Effective Time shall be the
officers of the Surviving Corporation until the earlier of their resignation
or removal or until their successors are duly elected or appointed and
qualified.

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                                 ARTICLE II

                            EFFECTS OF THE MERGER

2.1     EFFECT ON CAPITAL STOCK

        As of the Effective Time, by virtue of the Merger and without any
action on the part of the Corporation, Newco or any holder of any shares of
Common Stock, Series F Preferred or any shares of capital stock of Newco:

             (a)   COMMON STOCK OF NEWCO. The common stock of Newco issued
and outstanding immediately prior to the Effective Time shall be converted,
in the aggregate, into a number of shares of the Common Stock, par value $.01
per share, of the Surviving Corporation following the Merger equal to the
quotient of (i) the aggregate cash contributed to Newco prior to or at the
Effective Time in exchange for Newco Common Stock and retained by Newco
through the Effective Time divided by (ii) the Cash Merger Price.

             (b)   CANCELLATION OF TREASURY STOCK. Each share of Common Stock
that is owned by the Corporation or by any Subsidiary of the Corporation
shall automatically be cancelled and retired and shall cease to exist.

             (c)   COMMON STOCK OF THE CORPORATION. Except as otherwise
provided herein, each issued and outstanding share of Common Stock (other than
any share of Common Stock that is owned by Newco, Acquisition LLC or Holdings
LLC and Retained Shares, each of which shall remain outstanding, shares
cancelled pursuant to Section 2.1(b) and Dissenting Shares)(the "MERGER
SHARES") shall be converted into the right to receive from the Surviving
Corporation, in cash, the Cash Merger Price.

             (d)   SERIES F PREFERRED. Each issued and outstanding share of
Series F Preferred shall be converted into the right to receive from the
Surviving Corporation, in cash, the Preferred Merger Price.

             (e)   RETAINED SHARES. Each issued and outstanding Retained
Share shall convert into the right to retain one fully paid and
nonassessable share of Common Stock and each issued and outstanding share of
Common Stock that is owned by Newco, Acquisition LLC or Holding LLC shall
convert into the right to retain one fully paid and nonassessable share of
Common Stock.

             (f)   DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, shares of Common Stock issued and outstanding
immediately prior to the Effective Time held by a holder (if any) who has the
right to demand payment for and an appraisal of such shares in accordance
with Section 262 of the DGCL (or any successor provision)("DISSENTING SHARES")
shall not be converted into a right to receive the Cash Merger Price (but
shall have the rights set forth in Section 262 of the DGCL (or any successor
provision)) unless such holder fails to perfect or otherwise loses such
holder's right to such payment or appraisal, if any. If, after the Effective
Time, such holder fails to perfect or loses any such right to appraisal, each
such share of such holder shall be treated as a Merger Share in accordance
with SECTION 2.1(c). The Corporation shall give prompt notice to Newco of any
demands received by the Corporation for

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appraisal of shares of Common Stock, and Newco shall have the right to
participate in and approve all negotiations and proceedings with respect to
such demands. The Corporation shall not, except with the prior written
consent of Newco, make any payment with respect to, or settle or offer to
settle, any such demands.

             (g)   CANCELLATION AND RETIREMENT OF COMMON STOCK AND SERIES F
PREFERRED. As of the Effective Time, all shares of Common Stock (other than
the Dissenting Shares, the Retained Shares and the other shares described in
SECTION 2.1(e)) and all shares of Series F Preferred issued and outstanding
immediately prior to the Effective Time, shall no longer be outstanding and
shall automatically be cancelled and retired and shall cease to exist, and
each holder of a certificate representing any such shares of Common Stock or
Series F Preferred shall, to the extent such certificate represents such
shares, cease to have any rights with respect thereto, except the right to
receive cash to be issued or paid in consideration therefor upon surrender of
such certificate in accordance with Section 2.2.

2.2     EXCHANGE OF CERTIFICATES.

             (a)   The Corporation shall appoint an independent bank or trust
company, reasonably acceptable to Newco, to act as paying agent (the "PAYING
AGENT"), which Paying Agent shall be responsible for payment of the Cash
Merger Price and Preferred Merger Price for all Merger Shares and shares of
Series F Preferred. As soon as reasonably practicable as of or after the
Effective Time, the Surviving Corporation shall deposit with the Paying
Agent, for payment in accordance with this Article II, the funds necessary to
pay the Cash Merger Price and Preferred Merger Price for all Merger Shares
and Series F Preferred.

             (b)   As soon as practicable after the Effective Time, each
holder of an outstanding certificate or certificates which prior thereto
represented Merger Shares or shares of Series F Preferred, upon surrender to
the Paying Agent of such certificate or certificates and acceptance thereof
by the Paying Agent, shall be entitled to a certificate or certificates
representing the number of Retained Shares, if any, represented by such
certificate or certificates and the amount of cash into which the number of
Merger Shares or shares of Series F Preferred previously represented by such
certificate or certificates surrendered shall have been converted pursuant to
this Agreement. The Paying Agent shall accept such certificates upon
compliance with such reasonable terms and conditions as the Paying Agent may
impose to effect an orderly exchange thereof in accordance with normal
exchange practices, which shall include paying cash into which the Merger
Shares and shares of Series F Preferred shall have been converted at the
Effective Time to holders who have complied with such terms and conditions
prior to such time. After the Effective Time, there shall be no further
transfer on the records of the Corporation or its transfer agent of
certificates representing Merger Shares and shares of Series F Preferred
which have been converted, in whole or in part, pursuant to this Agreement,
into the right to receive cash, and if such certificates are presented to the
Corporation for transfer, they shall be canceled against delivery of such
cash. If any certificate for Retained Shares is to be issued or cash is to be
remitted to a name other than that in which the certificate for Merger Shares
surrendered for exchange is registered, it shall be a condition of such
exchange that the certificate so surrendered shall be properly endorsed, with
signature guaranteed or otherwise in proper form for transfer. Until
surrendered as contemplated by this SECTION 2.2(b), each certificate for
Merger Shares and shares of Series F Preferred shall be deemed at any time
after

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the Effective Time to represent only the right to receive upon such surrender
the Cash Merger Price for each Merger Share or the Preferred Merger Price for
each share of Series F Preferred. No interest will be paid or will accrue on
any cash payable in the Merger.

             (c)   All cash paid upon the surrender for exchange of
certificates representing Merger Shares and shares of Series F Preferred in
accordance with the terms of this ARTICLE II shall be deemed to have been
paid in full satisfaction of all rights pertaining to the Merger Shares and
shares of Series F Preferred exchanged for cash theretofor represented by
such certificates.

             (d)   Any cash deposited with the Paying Agent pursuant to this
SECTION 2.2 (the "EXCHANGE FUND") which remains undistributed to the holders
of the certificates representing Merger Shares and shares of Series F
Preferred 180 days after the Effective Time shall be delivered to the
Surviving Corporation at such time and any holders of Merger Shares or shares
of Series F Preferred prior to the Merger who have not theretofore complied
with this Article II shall thereafter look only to the Surviving Corporation
and only as general unsecured creditors thereof for payment of their claim
for cash.

             (e)   None of Newco or the Corporation or the Paying Agent shall
be liable to any person in respect of any cash from the Exchange Fund
delivered to a public office pursuant to any applicable abandoned property,
escheat or similar law. If any certificates representing Merger Shares or
shares of Series F Preferred shall not have been surrendered prior to one
year after the Effective Time (or immediately prior to such earlier date on
which any cash in respect of such certificate would otherwise escheat to or
become the property of any Governmental Entity), any such cash in respect of
such certificate shall, to the extent permitted by Applicable Law, become the
property of the Surviving Corporation, free and clear of all claims or
interest of any person previously entitled thereto.

             (f)   The Paying Agent shall invest any cash included in the
Exchange Fund, as directed by the Corporation, on a daily basis.

             (g)   The Surviving Corporation shall pay all charges and
expenses of the Paying Agent.

             (h)   Notwithstanding anything to the contrary set forth in this
Agreement, Newco and the Surviving Corporation shall cause the Paying Agent
to pay by wire transfer at the Effective Time, in immediately available
funds, the full Cash Merger Price and the Preferred Merger Price payable to
the Principal Stockholders and to each other stockholder requesting payment
by wire transfer at such time in writing at least two Business Days prior to
the Closing.

2.3     THE DEBT OFFERS.

             (a)   Provided that this Agreement shall not have been
terminated in accordance with SECTION 7.1, the Corporation shall commence an
offer to purchase (i) all of the outstanding aggregate principal amount of
the Corporation's Senior Subordinated Notes and (ii) at the request of Newco,
all of the outstanding principal amount of the FIRSTS, in each case, on the
terms and conditions as are reasonably acceptable to Newco, subject to the
terms and conditions set forth in the indenture governing the Existing Notes
as amended to the date hereof (collectively, the "DEBT OFFERS"). The
Corporation shall waive any of the conditions to either

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[2.3 CONTINUING]

[2.4 TO COME]

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2.5     MERGER PRICE.

        At least two days prior to the Closing Date, the Corporation shall
deliver to Newco a certificate which sets forth the estimated Cash Merger
Price. If Newco objects to any calculation set forth therein, the parties
will cooperate in good faith to resolve any disputed items prior to the
Effective Time.

                                 ARTICLE III

              REPRESENTATIONS AND WARRANTIES OF THE CORPORATION

        For purposes of this Agreement, the phrase "TO THE KNOWLEDGE OF THE
CORPORATION," or other language of similar effect, shall mean to the actual
knowledge, without investigation or inquiry, of Richard N. Zehner, Vincent S.
Pino, Kenneth Ord or Russell D. Phillips, Jr. The exceptions, modifications,
descriptions and disclosures in any Schedule or Exhibit hereto are exceptions
to each representation and warranty set forth in this Agreement if a prudent
Person in the applicable party's position would reasonably conclude that such
exception, modification, description or disclosure would constitute an
exception, modification, description or disclosure to the applicable
representation and warranty if included in the appropriate Schedule or
Exhibit. Disclosure of any items not otherwise required to be disclosed shall
not create an inference of materiality. The Corporation hereby represents and
warrants to Newco as of the date hereof and as of the Closing Date as set
forth below:

3.1     ORGANIZATION, STANDING, QUALIFICATION AND POWER.

        The Corporation is duly organized, validly existing and in good
standing under the laws of the State of Delaware and has full corporate power
and authority to own, lease and operate its properties and to carry on its
business as presently conducted. The Corporation is duly qualified and in
good standing to do business in each jurisdiction in which the property owned
or leased or operated by it or by the nature of the business conducted by it
makes such qualification necessary, except where the failure to be so
qualified is not reasonably likely to have a Material Adverse Effect. The
Corporation has made available to Newco or its counsel, representatives or
advisors, complete and correct copies of its certificate of incorporation, as
in effect on the date hereof and in effect immediately prior to the Effective
Time, and the by-laws, as amended to the date hereof.

3.2     AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY.

        The Corporation has all corporate power and authority to execute this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
the Corporation of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of the Corporation, including all required
stockholder approval, and no other corporate proceedings on the part of the
Corporation are necessary to authorize the execution, delivery and performance
of this Agreement or the consummation of the transactions contemplated hereby
(other than notice to stockholders pursuant to Sections 228 and 262 of the
DGCL). The Corporation has duly executed and delivered this Agreement and this

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Agreement constitutes a legal, valid and binding obligation of the
Corporation, enforceable against it in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance or other similar laws affecting the enforcement of creditors'
rights generally and general equitable principles.

3.3  NO CONFLICTS; CONSENTS.

         (a) Except as set forth in SCHEDULE 3.3, the execution and delivery
by the Corporation of this Agreement and the consummation of the transactions
contemplated hereby does not conflict with, or result in any violation of or
default under, or give rise to any increase payment, loss of a material
benefit, a requirement of prepayment or offer to purchase any debt, a right
of termination, cancellation or acceleration of any obligation, or result in
the creation of any Lien (other than a Permitted Lien) upon any of the assets
owned or used by the Corporation or any of its Subsidiaries under, any
provision of (a) the Certification of Incorporation or By-Laws, (b) any
Contract to which the Corporation or any Subsidiary is a party or (c) any
judgment, writ, injunction, order or decree ("Judgment") or Applicable Law
applicable to the Corporation, other than, in the case of clauses (b) and (c)
above, any such conflicts, violations, defaults, rights or Liens that,
individually or in the aggregate, would not have a Material Adverse Effect.

         (b) Except as set forth in SCHEDULE 3.3, no material consent,
approval, Permit, order or authorization of, or registration, declaration or
filing with, any Governmental Entity is required to be obtained or made by or
with respect to the Corporation or any of its Subsidiaries in connection
with the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, other than (i)
compliance with and filings under the HSR Act, (ii) compliance with and
filings and notifications under applicable Environmental Laws, (iii) those
the failure of which to obtain or make would not have a Material Adverse
Effect, (iv) those that have been obtained, (v) those that may be required
solely by reason of Newco's (as opposed to any other third party's)
participation in the transactions contemplated hereby and (vi) filings
required pursuant to the indenture governing the Existing Notes or applicable
securities laws.

3.4  CAPITALIZATION

     The authorized capital stock of the Corporation consists of 10,000,000
shares of Common Stock, consisting of 9,500,000 shares of voting common
stock, par value $.01 ("VOTING COMMON"), 500,000 shares of non-voting common
stock, par value $.01 ("NON-VOTING COMMON"), and 500,000 shares of preferred
stock, undesignated as to series ("PREFERRED STOCK"), of which 300,000 shares
have been designated and authorized by the Board as Series F Redeemable
Preferred Stock, $.01 par value. At the close of business of the date hereof,
(i) 5,506,651 shares of Voting Common, 242,898 shares of Non-Voting Common
and 150,000 shares of Series F Preferred are validly issued and outstanding,
fully paid and nonassessable, (ii) no shares of Voting Common, Non-Voting
Common or Series F Preferred are held by the Corporation in its treasury and
(iii) 842,033 shares of Common Stock were reserved for issuance upon the
exercise of options granted or available for grant under the Corporation
Stock Option Plans. Except as set forth above, except for shares issued since
the close of business on the Business Day immediately preceding the date
hereof upon the exercise of any then outstanding Corporation Stock Option,
since such date no shares of capital stock or other voting securities of

                                      -9-
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the Corporation have been issued or reserved for issuance.  All outstanding
Shares and shares of Series F Preferred are duly authorized, validly issued,
fully paid and nonassessable and not subject to preemptive rights. There are
no bonds, debentures, notes or other indebtedness of the Corporation having
the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which stockholders of the
Corporation may vote. Except for Corporation Stock Options with respect to
759,932 Shares, there are no securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which
the Corporation is a party or by which it is bound obligating the Corporation
to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other voting securities of the
Corporation or obligating the Corporation to issue, grant, extend or enter
into any such security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. Except as set forth in the Series F Preferred
Certificate of Designations relating to the Corporation's Series F Preferred
or SCHEDULE 3.4, there are no outstanding contractual obligations of the
Corporation to repurchase, redeem or otherwise acquire any shares of capital
stock of the Corporation.

3.5  SUBSIDIARIES.

         (a) Except as set forth on SCHEDULE 3.5, all of the outstanding
shares of capital stock of Subsidiaries are owned of record and beneficially
by the Corporation, free and clear of all Liens other than Permitted Liens.

         (b) Except as set forth on SCHEDULE 3.5, since June 30, 1999, no
shares of capital stock or other voting securities of any Subsidiary were
issued, reserved for issuance or issuable. All outstanding shares of capital
stock of Subsidiaries are, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. There are no bonds,
debentures, notes or other indebtedness of any Subsidiary having the right to
vote (or convertible into, or exchangeable for, securities having the right
to vote) on any matters on which stockholders of Subsidiaries may vote. There
are no securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Corporation or any
Subsidiary is a party or by which any of them is bound obligating the
Corporation or any Subsidiary to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other voting
securities of any Subsidiary or obligating the Corporation or any Subsidiary
to issue, grant, extend or enter into any such security, option, warrant,
call, right, commitment, agreement, arrangement or undertaking. There are no
outstanding contractual obligations of the Corporation or any Subsidiary to
repurchase, redeem or otherwise acquire any shares of capital stock of any
Subsidiary. There are no voting trusts, proxies or other agreements or
understandings to which the Corporation or its Subsidiaries is a party or by
which the Corporation or any of its Subsidiaries is bound with respect to the
voting of any shares of capital stock, or any other equity or voting security
or interest of the Corporation or any of its Subsidiaries. Except for
the Corporation's interest in the Subsidiaries, as set forth in SCHEDULE 3.5,
neither the Corporation nor any Subsidiary owns directly or indirectly any
interest or investment in the form of equity in, and neither the Corporation
nor any Subsidiary is subject to any obligation or requirement to provide for
or to make any investment in, any Person (other than financially
insignificant holdings of publicly reporting companies held in order to
obtain filings).

                                      -10-
<PAGE>

3.6  SEC DOCUMENTS; FINANCIAL STATEMENTS; OTHER FINANCIAL INFORMATION.

         (a) The Corporation has filed with the SEC all reports, forms,
schedules and statements and other documents required to be filed by it since
December 18, 1997 (the "SEC Documents"). As of their respective filing dates,
(i) the SEC Documents complied in all material respects with the requirements
of the Securities Act, or the Securities Exchange Act of 1934, as amended
("Exchange Act"), as the case may be, and the rules and regulations of the
Securities and Exchange Commission ("SEC") promulgated thereunder applicable
to such SEC Documents, and (ii) none of the SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein under applicable federal securities laws in
order to make the statements therein, in light of the circumstances under
which they were made, not materially misleading. The financial statements
included in the SEC Documents complied, as of their respective filing dates
as to form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereof, were
prepared in accordance with GAAP (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly present, in all material respects, the consolidated
financial position of the Corporation and its Subsidiaries as of the dates
thereof and the results of its operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).

         (b) Neither the Corporation nor any of its Subsidiaries has any
debts, liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) that would be required to be reflected on, or
disclosed or reserved against in, a consolidated balance sheet of the
Corporation and its Subsidiaries or in the notes thereto, prepared in
accordance with GAAP consistently applied, except for debts, liabilities or
obligations (a) that were so reserved on, or disclosed or reflected in, the
consolidated balance sheet of the Corporation and its Subsidiaries as of
June 30, 1999 and the notes thereto, included in the Quarterly Report on Form
10-Q of the Corporation for the quarter then ended, or the consolidated
balance sheet of the Corporation and its Subsidiaries as of December 31, 1998
and the notes thereto, included in the Annual Report on Form 10-K of the
Corporation for the year then ended, (b) arising in the ordinary course of
business since June 30, 1999, (c) incurred in connection with the purchase of
equipment or (d) that have not had and are not reasonably likely to have a
Material Adverse Effect.

3.7  ASSETS OTHER THAN REAL PROPERTY INTERESTS.

         Each of the Corporation and its Subsidiaries has good and valid
title to all of the assets and properties reflected on the latest balance
sheet included in the SEC Documents or acquired subsequent thereto (except for
assets and properties sold, consumed or otherwise disposed of in the
ordinary course of business since the date thereof and except for real
property or interests in real property, such items being the subject of
SECTION 3.8), free and clear of all Liens, except Permitted Liens and except
as set forth in SCHEDULE 3.7. The properties and assets of the Corporation
and its Subsidiaries are in sufficient repair and operating condition for the
conduct of the business of the Corporation and Subsidiaries as presently
conducted.

                                      -11-

<PAGE>

3.8  REAL PROPERTY.

         (a) Except as set forth on SCHEDULE 3.8, neither the Corporation nor
any of its Subsidiaries owns in fee any real property (the "OWNED REAL
PROPERTY"). SCHEDULE 3.8 sets forth as of the date hereof, a complete and
correct list of all real property leases, subleases, licenses and use or
occupancy ("LEASES") agreements pursuant to which the Corporation or any of
its Subsidiaries is the lessee, sublessee, licensee, user or occupant of real
property, or interests therein, requiring annual payments in excess of
$150,000 (the "LEASED PROPERTY"). Each of the Corporation and its
Subsidiaries has good and valid title to the leasehold estate or other
interest created under its respective leases, free and clear of any Liens
other than Permitted Liens. Each Lease is valid or in full force and effect
without any material default thereunder by the Corporation or such
Subsidiary, except failures to be in full force and effect and defaults
which, individually or in the aggregate, is not reasonably likely to have a
Material Adverse Effect.

         (b) The Corporation has not received notice that the location,
construction, occupancy, operation or use of the buildings located on the
Leased Property violates any restrictive covenant or deed restriction or any
other Applicable Laws, except for such violations or restrictions which,
individually or in the aggregate, is not reasonably likely to have a Material
Adverse Effect.

3.9  INTELLECTUAL PROPERTY.

         The Corporation and each Subsidiary owns, or is validly licensed or
otherwise has the right to use, as applicable, all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, service marks,
service mark rights, copyrights, trade secrets and other proprietary
intellectual property rights and computer programs that are used in the
conduct of the business of the Corporation and its Subsidiaries as now
operated (collectively, "INTELLECTUAL PROPERTY RIGHTS") other than those
Intellectual Property Rights in which the failure to own, license or have the
right to use would not be reasonably likely to have a Material Adverse
Effect. SCHEDULE 3.9 sets forth a description of all material patents,
trademarks and copyrights and applications therefor owned by or licensed to
the Corporation or its Subsidiaries that are used in the conduct of the
business of the Corporation or its Subsidiaries as now operated (excluding
customary commercial software licenses). No claims are pending or, to the
knowledge of the Corporation, threatened against the Corporation or any of
its Subsidiaries that the Corporation or any of its Subsidiaries is, and to
the knowledge of the Corporation, neither the Corporation nor any Subsidiary
is, infringing or otherwise adversely affecting the rights of any Person with
regard to any Intellectual Property Right, except for claims, infringements
or adverse effects which, individually, or in the aggregate, is not
reasonably likely to have a Material Adverse Effect. To the knowledge of the
Corporation, no Person is infringing the rights of the Corporation with
respect to any Intellectual Property Right in any manner that is reasonably
likely to have a Material Adverse Effect. The Corporation has not licensed,
or otherwise granted, to any Person, any rights in or to any Intellectual
Property Rights and none of the Corporation or its Subsidiaries has any
obligation to grant licenses or other right to any of the material
Intellectual Property Rights to any other Person, except for such licenses,
grants or obligations that are not reasonably likely to have a Material
Adverse Effect. The Corporation is not, nor will it be as a result of the
execution and delivery of this Agreement or the performance of its
obligations under this Agreement, in breach of any license, sublicense or
other agreement

                                      -12-

<PAGE>

relating to the Intellectual Property Rights, except for breaches which,
individually or in the aggregate, is not reasonably likely to have a Material
Adverse Effect. To the Corporation's knowledge, the information technology
systems of the Corporation and its Subsidiaries (including but not limited to
software), equipment and software which are used in business as currently
conducted by Corporation and its Subsidiaries, are (or will be prior to
December 31, 1999) "year 2000 compliant" in that they are (or will be prior to
December 31, 1999) designed to be used prior to, during and after the calendar
year 2000 A.D., except for such failure to be "year 2000 complaint" which,
individually or in the aggregate, would not have and is not reasonably likely to
have a Material Adverse Effect.

3.10 MATERIAL CONTRACTS.

           (a)  Except as set forth in SCHEDULE 3.10, as of the date hereof,
neither the Corporation nor any of its Subsidiaries is a party to or bound by
any Contract that is used in the operation or conduct of its business and
that is:

                   (i)    a Contract not to compete against the diagnostic
     imaging systems and related radiology services business of any third party
     or a Contract that restricts the Corporation or any of its Subsidiary or
     Affiliates from entering or conducting any line of business in any
     location at any time, except for restrictions on providing imaging
     services contained in Contracts with hospitals, clinics, medical or
     healthcare providers or other customers and except for Contracts with
     holders of equity interests in Subsidiaries and other Persons in which the
     Corporation holds directly or indirectly equity interests, none of which
     has had or is reasonably likely to have a Material Adverse Effect);

                   (ii)   a Contract (other than Benefit Plans) with any
     shareholder, officer, director or Affiliate of the Corporation requiring
     annual payments in excess of $150,000;

                   (iii)  a lease or similar Contract in connection with
     tangible personal property requiring annual payments in excess of $200,000;

                   (iv)   a Contract under which the Corporation or such
     Subsidiary has directly or indirectly guaranteed indebtedness of any other
     Person, other than endorsements for the purpose of collection in the
     ordinary course of business that, individually, is in excess of $100,000
     and other than guarantees of any indebtedness of the Corporation or any
     Subsidiary.

                   (v)    a Contract granting a Lien upon any assets of the
     Corporation, the foreclosure of which would have a Material Adverse Effect;

                   (vi)   a Contract involving an annual payment to or by the
     Corporation or such Subsidiary of more than $150,000 (unless terminable
     without payment or penalty) other than sales orders and purchase orders
     entered into in the ordinary course of business after the date of this
     Agreement;

                   (vii)  a material Contract that relate to services provided
     by the Corporation to or at hospitals, clinics, medical or healthcare
     providers or other customers or services paid for by health maintenance
     organizations or other third party payors;

                                     -13-
<PAGE>

                   (viii)  a material Contract that relates to the construction,
     reconstruction, maintenance, transportation or use of Magnetic Resonance
     Imaging equipment which will require payments in excess of $250,000.

                   (ix)    a Contract for indebtedness for borrowed money in
     excess of $200,000, or

                   (x)     a Contract other than as set forth above to which the
     Corporation or such Subsidiary is a party, the absence of which would have
     a Material Adverse Effect.

           (b)  Except as set forth in SCHEDULE 3.10(b), neither the Corporation
nor any Subsidiary is and, to the knowledge of the Corporation (which for
purposes, hereof, shall also include the actual knowledge of Jay Mericle,
without inquiry or investigation), no other party is in violation of or in
default under (nor does there exist any condition affecting the Corporation or
any Subsidiary, or to the Corporation's knowledge, other parties to the material
Contracts which upon the passage of time or the giving of notice or both is
reasonably likely to cause such a violation of or default under) any material
Contract to which it is a party or by which it or any of its properties or
assets is bound (it being understood that any non-payment shall be deemed not to
be a violation of or default under any such Contract if the financial statements
included in the most recently filed SEC Documents reflects, in the aggregate,
adequate reserves for doubtful accounts as of the date of filing). Each
material Contract constitutes a valid and binding obligation of the Corporation
and/or Subsidiary party thereto and, to the knowledge of the Corporation, each
other party thereto, enforceable against such other party in accordance with
its terms, except if the failure to be valid, binding and enforceable has not
had and is not reasonably likely to have a Material Adverse Effect. No party has
given any written notice or to the knowledge of the Corporation, oral notice of
termination or cancellation of any material Contract or that it intends to
assert a breach of, or seek to terminate or cancel, any material Contract as a
result of the transactions contemplated hereby, in each case that has had or is
reasonably likely to have a Material Adverse Effect. Copies of all Contracts
listed in SCHEDULE 3.10 have been made available to Newco or its representatives
or agents.

3.11 PERMITS.

     Except as set forth in SCHEDULE 3.11, as of the date hereof, each of the
Corporation and its Subsidiaries holds all material certificates, franchises,
consents, licenses, permits, notices, rights, authorizations and approvals
(including, without limitation, all certificates of need) from all Governmental
Entities as are necessary for it to own, lease or operate its properties and
assets and to conduct the business of the Corporation and such Subsidiaries as
currently conducted as of the date hereof (collectively, "PERMITS"), except
where the failure to have any such Permit, individually or in the aggregate, is
not reasonably likely to have a Material Adverse Effect. SCHEDULE 3.11 contains
a list of all material Permits (including, without limitation, all certificates
of need), and copies thereof have been provided or made available to Newco or
its representatives or agents. No default under any Permit has occurred, except
for defaults under Permits that, individually or in the aggregate, is not
reasonably likely to have a Material Adverse Effect.

                                     -14-
<PAGE>

3.12 TAXES.

           (a)  Except as set forth in SCHEDULE 3.12(a), the Corporation and
each of its Subsidiaries, and any consolidated, combined, unitary or aggregate
group for Tax purposes of which the Corporation or any of its Subsidiaries is
or has been a member (a "CONSOLIDATED GROUP") (i) has timely filed all material
Tax Returns required to be filed by it (and, with respect to any such
Consolidated Group, during the period for which they have been a member thereof)
and (ii) such Tax Returns are complete and correct in all material respects and
(iii) has paid all Taxes shown thereon to be due. The most recent financial
statements reflect adequate reserves for any Taxes payable by the Corporation
and its Subsidiaries, for all taxable periods and portions thereof that have not
been paid, whether or not shown as being due on any returns through the date of
such financial statements. Except as set forth in SCHEDULE 3.12(a), to the best
knowledge of the Corporation (which for purposes, hereof, shall also include the
actual knowledge of Michelle Horn, without inquiry or investigation), no audit
of any Tax Return of the Corporation or any of its Subsidiaries is pending,
threatened or being conducted by a Tax authority. No extension of the statute
of limitations on the assessment of any Taxes has been granted by the
Corporation or any of its Subsidiaries and is currently in effect. No consent
under Section 341(f) of the Code has been filed with respect to the Corporation
or any of its Subsidiaries. None of the Corporation or its Subsidiaries has been
a United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code. All Taxes required to be withheld, collected or
deposited by or with respect to the Corporation and each of its Subsidiaries
have been timely withheld, collected or deposited, as the case may be, and, to
the extent required, have been paid to the relevant taxing authority except to
the extent the failure to so withhold, collected or deposited is reasonably
likely to have a Material Adverse Effect. No power of attorney that is
currently in force has been granted with respect to any matter relating to
Taxes that could materially affect the Tax liability of the Corporation or one
of its Subsidiaries and that are reasonably likely to have a Material Adverse
Effect. Neither the Corporation nor any of its subsidiaries (i) is a party to
or bound by any tax indemnity, tax sharing or tax allocation agreement (or
administrative or accounting practice having substantially the same effect as
such an agreement), (ii) has agreed to make or is required to make any material
adjustment under Section 481(a) of the Code by reason of a change in accounting
method or otherwise, or (iii) owns material assets that directly or indirectly
secure indebtedness the interest on which is tax-exempt under Section 103(a) of
the Code.

           (b)  Except as set forth in SCHEDULE 3.12, none of the Corporation or
any of its Subsidiaries has any liabilities for the Taxes of any Person (other
than any of the Corporation or any of its Subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or foreign
law) as a transferee or successor, by contract or otherwise.

3.13 PROCEEDINGS.

     SCHEDULE 3.13 sets forth a list of all pending Proceedings, and to the
Corporation's knowledge (which for purposes, hereof, shall also include the
actual knowledge of Barbara Leeman, without inquiry or investigation),
threatened Proceedings, involving the Corporation or any of its Subsidiaries
which (i) relate to or involve more than $200,000 (in excess of available
insurance coverage), (ii) seek any equitable relief or (iii) which in any case,
individually or in the

                                     -15-
<PAGE>

aggregate, would materially impair the ability of the Corporation to perform its
obligations under this Agreement. Neither the Corporation nor any of its
Subsidiaries is a party or subject to or in default under any material Judgment
applicable to the conduct or the business of the Corporation or such Subsidiary,
except as, individually or in the aggregate, is not reasonably likely to have a
Material Adverse Effect.

3.14 BENEFIT PLANS.

           (a)  SCHEDULE 3.14(a) hereto contains a true and complete list of
each material employee benefit plan (as defined in Section 3(3) of ERISA),
stock option plans and severance agreements and plans that the Corporation and
its Subsidiaries has any present or future obligations or liability on behalf of
its employees or former employees, contractual employees or their dependents or
beneficiaries (collectively, the "BENEFIT PLANS"). The following have been made
available to Newco (i) true and complete copies of all Benefit Plans (or in the
case of unwritten Benefit Plans, descriptions thereof), including, without
limitation, with respect to each Benefit Plan, all amendments to the Benefit
Plans, and any trust or other funding arrangement, (ii) Form 5500s for each
Benefit Plan for the two most recent plan years, (iii) the most recently
completed actuarial valuation for each Benefit Plan for which an actuarial
report is required by ERISA or for financial reporting purposes, and (iv) the
most recent summary plan description for each Benefit Plan for which a summary
plan description is required by ERISA.

           (b)  None of the Benefit Plans which is a "pension plan" within the
meaning of Section 3(2) of ERISA (a "PENSION PLAN") is a "multiemployer plan" as
defined in Section 3(37) of ERISA, or is subject to the requirements of Title IV
of ERISA, Section 302 of ERISA or Section 412 of the Code. Neither the
Corporation nor any Subsidiary has any liability under Title IV of ERISA that
has had or is reasonably likely to have a Material Adverse Effect. Each Pension
Plan that is intended to be "qualified" within the meaning of Section 401(a) of
the Code has received a determination letter from the IRS that it is so
qualified or the remedial amendment period for such Pension Plan has not
expired, and no fact or event has occurred since the date of such determination
letter that could adversely affect the qualified status of any such Pension
Plan, except if the failure to be so qualified or the expiration of such
remedial amendment period would not be reasonably likely to have a Material
Adverse Effect.

           (c)  Neither Corporation nor any Subsidiary has incurred any
liability for any penalty or tax under Sections 4971, 4972, 4975, 4976, 4979, or
4980 of the Code or Section 502 of ERISA which is reasonably likely to have a
Material Adverse Effect.

           (d)  Each of the Benefit Plans that is a "group health plan" (as
defined in Code Section 5000(b)) has at all times been in compliance with the
provisions of Section 4980B of the Code and Parts 6 and 7 of Title I of ERISA
and any similar applicable state laws except to the extent that the failure to
be in compliance would not be reasonably likely to have a Material Adverse
Effect. No Benefit Plan that is a "welfare plan" (as defined in Section 3(1) of
ERISA) (the "WELFARE PLANS") provides or promises post-retirement health or
life benefits to current employees or retirees of Corporation or any Subsidiary,
except to the extent required under any applicable state law or under Section
601 of ERISA. Each Welfare Plan contains a procedure for amendment and
termination of such plan.

                                     -16-
<PAGE>

           (e) No Benefit Plan is funded by a trust described in Section
501(c)(9) of the Code or subject to the provisions of Section 505 of the Code.

           (f) Payment of all material amounts has been made to each Benefit
Plan which are required to be made as contributions thereto, under Applicable
Law or under any Benefit Plan or any agreement relating to a Benefit Plan as
of the last day of the most recent fiscal year of such Benefit Plan ended
prior to the date hereof. There is no accumulated funding deficiency with
respect to any Benefit Plan.

           (g) Except as set forth in SCHEDULE 3.14 and except as provided in
the Corporation's certificates and bylaws or as expressly provided in this
Agreement, there exist no employment, consulting, severance, termination or
indemnification agreements between the Corporation and any current or former
employee, officer or director of the Corporation providing for a lump sum or
annual payment in excess of $100,000. Except as set forth in SCHEDULE 3.14,
the execution and delivery of, and performance of the transactions
contemplated by, this Agreement will not (either alone or upon the occurrence
of any additional or subsequent events) constitute an event under any Benefit
Plan or individual agreement that will result in any payment (whether of
severance pay or otherwise), acceleration, vesting or increase in benefits
with respect to any employee.

           (b) All applicable filings, notice or reports (including, without
limitation, annual reports filed on IRS Form 5500 and disclosure to
participants and beneficiaries) relating to any Benefit Plan have been timely
made.

           (i) For purposes of this SECTION 3.14, any reference to the
Corporation shall be deemed also to refer to any entity which is under common
control or affiliated with the Corporation within the meaning of Section 4001
of ERISA and the rules and regulations thereunder and/or Section 414 of the
Code and the rules and regulations thereunder.

3.15 ABSENCE OF CHANGES OR EVENTS.

     Except as set forth on SCHEDULE 3.15 hereto, since December 31, 1998,
the Corporation and its Subsidiaries have conducted their respective
businesses only in the ordinary course consistent with prior practice except
in connection with the transactions contemplated hereby and the sale process,
and there has not been:

           (a) any change, development, condition or effect that,
individually or in the aggregate, has had or is reasonably likely to have a
Material Adverse Effect;

           (b) any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with respect to any
of the Corporation's capital stock other than the declaration of dividends in
respect of the Series F Preferred;

           (c) any split, combination or reclassification of any of its
capital stock or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for shares of
its capital stock;

                                       -17-

<PAGE>

           (d) except in the ordinary course of business (i) any granting by
the Corporation or any Subsidiary to any officer of the Corporation of any
material increase in compensation, (ii) any granting by the Corporation or
any Subsidiary to any officer, employee, director or consultant of any
increase in severance or termination pay, (iii) any entry by the Corporation
or any Subsidiary into any written employment agreement, or any severance or
termination agreement or arrangement with any officer, employee, director or
consultant, or (iv) any adoption or amendment of any Benefits Plans, in the
case of clauses (i) through (iv) that has had or is reasonably likely to have
a Material Adverse Effect;

           (e) any damage, destruction or loss to property, whether or not
covered by insurance, that, individually or in the aggregate, has not been
cured and is not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect;

           (f) any material change in accounting methods, principles or
practices by the Corporation or any Subsidiary; or

           (g) any material revaluation for financial statement purposes by
the Corporation or any of its Subsidiaries of any of asset (including,
without limitation, any material writing down of the value of any material
property, investment or assets).

3.16 COMPLIANCE WITH APPLICABLE LAWS.

     The Corporation and its Subsidiaries are not in conflict with, or in
default or violation of, its respective certificate of incorporation, by-laws,
partnership agreement or other charter or organizational documents, except in
the case of the Subsidiaries if such conflict, default or violation has not
had and is not reasonably likely to have a Material Adverse Effect. The
Corporation and its Subsidiaries have complied in all material respects
with all Applicable Laws, except for instances of noncompliance
which, individually or in the aggregate, is not reasonably likely to have a
Material Adverse Effect. Except as set forth in SCHEDULE 3.16, neither the
Corporation nor any of its Subsidiaries has received any written (or to the
knowledge of the Corporation, oral) communication during the past three years
from a Governmental Entity that alleges that the Corporation or its
Subsidiaries is not in compliance in any material respect with any Applicable
Law, except if such non-compliance has not had and is not reasonably likely
to have a Material Adverse Effect. Except as set forth in SCHEDULE 3.16,
neither the Corporation nor any of its Subsidiaries has received any written
(or to the knowledge of the Corporation, oral) communication during the past
three years from a Governmental Entity that alleges that the Corporation or
its Subsidiaries is not in compliance in any material respect with any
Applicable Law, except for any such non-compliance that has not had and is
not reasonably likely to have a Material Adverse Effect. Except as set forth
in SCHEDULE 3.16, the Corporation has not received any written (or to the
knowledge of the Corporation, oral) notice of any pending investigation by
any Governmental Entity with respect to any non-compliance with Applicable
Law by the Corporation or any of its Subsidiaries, which has had or is
reasonably likely to have a Material Adverse Effect. The Corporation's Common
Stock is not required to be registered pursuant to Section 12 of the Exchange
Act.

                                       -18-

<PAGE>

3.17 ENVIRONMENTAL MATTERS.

     Except as set forth in SCHEDULE 3.16:

           (a) the Corporation and each Subsidiary is, and has been, in
compliance with all applicable Environmental Laws except for any
noncompliance that, individually or in the aggregate, has not had a Material
Adverse Effect that has not been cured and is not reasonably likely to have a
Material Adverse Effect. The term "ENVIRONMENTAL LAWS" means any Federal,
state, provincial, regional, municipal, local or foreign judgment, order,
decree, statute, law, ordinance, rule, regulation, code, permit, consent,
approval, license, writ, decree, directive, injunction or other enforceable
governmental requirement, including any registration requirement, relating
to: (A) Releases or threatened Releases of Hazardous Materials into the
environment; (B) the generation, treatment, storage, disposal, use, handling,
manufacturing, transportation or shipment of Hazardous Materials; or (C)
otherwise relating to pollution or protection of health or safety or the
environment;

           (b) since December 18, 1997 (and prior to such date, to the
knowledge of the Corporation), there has been no Release or threatened
Release of Hazardous Materials, in, on, under or affecting any property now
or previously owned, leased, controlled or operated by the Corporation or any
Subsidiary or, to the knowledge of the Corporation, any adjacent site, which
Release or threatened Release has had or is reasonably likely to have a
Material Adverse Effect. The term "RELEASE" has the meaning set forth in 42
U.S.C. (S) 9601(22). The term "HAZARDOUS MATERIALS" means any pollutant,
contaminant, hazardous, radioactive or toxic substance, material, constituent
or waste, or any other waste, substance, chemical or material regulated under
any Environmental Law, including (1) petroleum, crude oil and any fractions
thereof, (2) natural gas, synthetic gas and any mixtures thereof, (3)
asbestos and or asbestos-containing material, (4) radon and (5)
polychlorinated biphenyls ("PCBs"), or materials or fluids containing PCBs;

           (c) there is no pending, or, to the knowledge of the Corporation,
threatened claim, action, demand, investigation or inquiry of or against the
Corporation or any of its Subsidiaries by any Governmental Entity or other
Person relating to any actual or potential violations of Environmental Law or
any actual or potential obligation to investigate or remediate a Release or
threatened Release of any Hazardous Materials, in each case, that has had or
is reasonably likely to have a Material Adverse Effect;

           (d) neither the Corporation nor any Subsidiary has used any waste
disposal site, or otherwise disposed of, transported, or arranged for the
transportation of, any Hazardous Materials to any place or location, except
for any such use, disposal, transportation or arrangement that has not had a
Material Adverse Effect that has not been cured and is not reasonably likely
to have a Material Adverse Effect.

3.18 EMPLOYEE AND LABOR MATTERS.

     Except as set forth in SCHEDULE 3.18, (i) neither the Corporation nor
any Subsidiary is a party to any collective bargaining agreement or similar
agreement with a labor organization, union or association; (ii) there are no
unfair labor practice complaints pending against the Corporation or any
Subsidiary, or to the Corporation's knowledge, threatened against any of

                                       -19-

<PAGE>

them, before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is pending against any of them; (iii) no strike, labor dispute,
slowdown or stoppage is pending (or to the Corporation's knowledge,
threatened) against the Corporation or any Subsidiary; (iv) there is no union
representation question existing with respect to the employees of the
Corporation or any Subsidiary, and (v) to the knowledge of the Corporation,
since January 1, 1998, neither the Corporation nor any Subsidiary has
encountered any labor union organizing activity, except with respect to any
matter specified above, which in the case of clauses (ii)-(v), individually
or in the aggregate, is not reasonably likely to have a Material Adverse
Effect.

3.19 AFFILIATE TRANSACTIONS.

     SCHEDULE 3.19 sets forth a description of all transactions between the
Corporation or its Subsidiaries, on the one hand, and the Principal
Stockholders or any of their respective Affiliates, on the other hand, in
each case consummated at any time since January 1, 1999 and required to be
disclosed in an SEC Document (if such transaction occurred during the time
period covered by such SEC Document). Except as set forth on SCHEDULE 3.19,
there are no agreements or arrangements between the Corporation or its
Subsidiaries, on the one hand, and the Principal Stockholders or any of their
respective Affiliates, on the other hand, in each case, required to be
disclosed in an SEC Document (if such agreement or arrangement was in
existence during the time period covered by such SEC Document). To the
knowledge of the Corporation, no Principal Stockholder or any of their
respective Affiliates owns any interest in any asset or property (real or
personal, tangible or intangible), business or contract used or intended for
use or otherwise relating to the business currently conducted by the
Corporation or any Subsidiary other than minority investments in publicly
traded corporations.

3.20 STATE TAKEOVER STATUTES.

     The Board has approved the Merger and this Agreement and the Stockholder
Support Agreements, and such approval is sufficient to render inapplicable to
the Merger, this Agreement and the Stockholder Support Agreements the
provisions of Section 203 of the DGCL to the extent, if any such Section is
applicable to the Merger, this Agreement, the Stockholder Support Agreement
and the transactions contemplated by this Agreement and the Stockholder
Support Agreements. To the knowledge of the Corporation, no other state
takeover statute or similar statute or regulation applies to the Merger, this
Agreement or the transactions contemplated by this Agreement and the
Stockholder Support Agreements.

3.21 OPINION OF FINANCIAL ADVISOR

     The Board has received the opinion of Salomon Smith Barney Inc., the
financial advisor to the Corporation.

3.22 CERTAIN ADDITIONAL REGULATORY MATTERS.

     None of (x) the Corporation, any Subsidiary of the Corporation, or, the
officers, directors, or employees or agents of the Corporation or any
Subsidiary or (y) to the Corporation's knowledge (which for purposes, hereof,
shall also include the actual knowledge of Wanda Mauk), any Affiliate of the
Corporation having a direct or indirect ownership interest in the

                                       -20-

<PAGE>

Corporation or any of its Subsidiaries within the meaning of Section
1320a-7(b)(8) of Title 42 of the United States Code have engaged in any
activities which constitute violations of, or are cause for imposition of
civil penalties upon the Corporation or mandatory or permissive exclusion of
the Corporation from Medicare or Medicaid, under Sections 1320a-7, 1320a-7a,
1320a-7b, or 1395nn of Title 42 of the United States Code, the federal
Civilian Health and Medical Plan of the Uniformed Services statute
("CHAMPUS"), or the regulations promulgated pursuant to such statutes or
regulations or related state or local statutes, including the following
activities (a) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment: (b) knowingly and willfully making or causing to be made
any false statement or representaiton of a material fact for use in
determining rights to any benefit or payment; (c) presenting or causing to be
presented a claim for reimbursement under CHAMPUS, Medicare, Medicaid or any
other State Health Care Program (as defined below) or Federal Health Care
Program (as defined below) that is (i) for an item or service that the Person
presenting or causing to be presented knows or should know was not provided as
claimed, or (ii) for an item or service and the Person presenting knows or
should know that the claim is false or fraudulent; (d) knowingly and
willfully offering, paying, soliciting or receiving any remuneration
(including any kickback, bribe or rebate), directly or indirectly, overtly or
covertly, in cash or in kind (i) in return for referring, or to induce the
referral of, an individual to a Person for the furnishing or arranging for
the furnishing of any item or service for, which payment may be made in whole
or in part by CHAMPUS, Medicare or Medicaid, or any other State Health Care
Program or any Federal Health Care Program, or (ii) in return for, or to
induce, the purchase, lease, or order, or the arranging for or recommending
of the purchase, lease, or order, of any good, facility, service, or item for
which payment may be made in whole or in part by CHAMPUS, Medicare or
Medicaid or any other State Health Care Program or any Federal Health Care
Program; or (e) knowingly and willfully making or causing to be made or
inducing or seeking to induce the making of any false statement or
representation (or omitting to state a material fact required to be stated
therein or necessary to make the statements contained therein not misleading)
of a material fact with respect to (i) the conditions or operations of a
facility in order that the facility may qualify for CHAMPUS, Medicare,
Medicaid or any other State Health Care Program certification or any Federal
Health Care Program certification, or (iii) information required to be
provided under Section 1124(A) of the Social Security Act ("SSA") (Section
1320a-3 of Title 42 of the United States Code), except for such matters
which, individually or in the aggregate, is not reasonably likely to have a
Material Adverse Effect. For purposes of this SECTION 3.22 only, "Subsidiary"
shall also include, without limitation, the entities set forth in SCHEDULE
3.22.

3.23 MEDICARE/MEDICAID PARTICIPATION ACCREDITATION.

     (a)  None of the Corporation, its Subsidiaries or any existing officers
or directors of the Corporation or the respective Subsidiary who (based on
advice by Newco to the Corporation) is expected to be an officer, director,
agent (as defined in 42 C.F.R. Section 1001.1001(a)(2)), or managing employee
(as defined in SSA Section 1126(b) or any regulations promulgated thereunder)
of the Corporation or the respective Subsidiary: (1) has had a civil monetary
penalty assessed against it under Section 1128A of the SSA or any regulations
promulgated thereunder; (2) has A-I-21 been excluded from participation under
the Medicare program or a state health care program as defined in SSA Section
1128(h) or any regulations promulgated thereunder ("STATE HEALTH CARE
PROGRAM") or a federal health care program as defined in SSA Section

                                    -21-

<PAGE>

1123B(f) ("FEDERAL HEALTH CARE PROGRAM"): or (3) has been convicted (as that
term is defined in 42 C.F.R. Section 1001.2) of any of the following
categories of offenses as described in SSA Section 1128(a) and (b)(1),(2),(3)
or any regulations promulgated thereunder: (i) criminal offenses relating to
the delivery of an item or service under Medicare or any State Health Care
Program or any Federal Health Care Program; (ii) criminal offenses under
federal or state law relating to patient neglect or abuse in connection with
the delivery of a health care item or service: criminal offenses under
federal or state law relating to fraud, theft, embezzlement, breach of
fiduciary responsibility, or other financial misconduct in connection with
the delivery of a health care item or service or with respect to any act or
omission in a program operated by or financed in whole or in part by any
federal, state or local governmental agency; (iii) federal or state laws
relating to the interference with or obstruction of any investigation into
any criminal offense described above in this clause (a); or (iv) criminal
offenses under federal or state law relating to the unlawful manufacture,
distribution, prescription or dispensing of a controlled substance, except
for such matters which, individually or in the aggregate, is not reasonably
likely to have a Material Adverse Effect.

     (b)  The Corporation or a Subsidiary has a Medicare provider number, and
a participating provider agreement in force with a Medicare Part B carrier,
in each locale, as applicable, in which the Corporation or such Subsidiary
bills directly to Medicare for services furnished by the Corporation or such
Subsidiary.

     (c)  The Corporation or a Subsidiary has a Medicaid number and a
participating provider agreement in each state, as applicable, in which the
Corporation or such Subsidiary bills directly to such states' Medicaid agency
for services provided by the Corporation or such Subsidiary.

     (d)  For purposes of this SECTION 3.23 only, "Subsidiary" shall also
include, without limitation, the entities set forth in SCHEDULE 3.23.

3.24 BROKERS OR FINDERS.

     The Corporation represents, as to itself and its Affiliates, that no
agent, broker, investment banker or other firm or Person is or will be
entitled to any broker's or finder's fee or any other commission or similar
fee in connection with any of the transactions contemplated by this
Agreement, except Salomon Smith Barney, Inc. and BT Alex. Brown & Co., based
upon arrangements made by or on behalf of the Corporation. The Corporation
has heretofore provided or made available to Newco or its representatives or
agents a true and complete copy of all valid and binding written agreements
between the Corporation and such firms pursuant to which such firms would be
entitled to any payment from the Corporation relating to the Merger.

3.25 NO ADDITIONAL REPRESENTATIONS.

     THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE III ARE THE
ONLY REPRESENTATIONS AND WARRANTIES MADE BY THE CORPORATION, EXCEPT AS
SPECIFICALLY SET FORTH HEREIN, ALL WARRANTIES, EXPRESS OR IMPLIED, ARE HEREBY
DISCLAIMED AND EXCLUDED, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A

                                     -22-

<PAGE>

PARTICULAR PURPOSE. IN NO EVENT SHALL THE CORPORATION BE LIABLE FOR SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES. THE CORPORATION MAKES NO REPRESENTATION
OR WARRANTY AS TO THE ACCURACY OR RELIABILITY OF ANY FORECASTS OR PROJECTIONS
OF REVENUES, SALES, EXPENSES OR PROFITS OF THE BUSINESS.

                                  ARTICLE IV

           REPRESENTATIONS AND WARRANTIES OF PARENT CORP. AND NEWCO

     Newco hereby represent and warrant to the Corporation, as of the date
hereof, and as of the Closing Date, as follows:

4.1  ORGANIZATION, STANDING, QUALIFICATION AND POWER

     Newco is duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full corporate power and authority to
own, lease and operate its properties and to carry on its business as
presently conducted. Newco is duly qualified and in good standing to do
business in each jurisdiction in which the property owned or leased or
operated by it or by the nature of business conducted by it makes such
qualification necessary, except where the failure to be so qualified would
not have a Material Adverse Effect. From the date of its incorporation, Newco
has not engaged in any activities other than in connection with or as
contemplated by this Agreement and the Merger or in connection with or as
contemplated by this Agreement and the Merger. Newco has made available to
the Corporation or its counsel, representatives or advisors, complete and
correct copies of its certificate of incorporation, as in effect on the date
hereof and its by-laws.

4.2  AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY

     Newco has all corporate power and authority to execute this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Newco of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action on the
part of Newco, and no other corporate proceedings on the part of Newco are
necessary to authorize the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby. Newco
has duly executed and delivered this Agreement and this Agreement constitutes
a legal, valid and binding obligation of Newco, enforceable against it in
accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance or other similar laws
affecting the enforcement of creditors' rights generally and general
equitable principles.

4.3  NO CONFLICTS; CONSENT

     The execution and delivery by Newco of this Agreement does not, and the
consummation of the transactions contemplated hereby and compliance by Newco
with the terms hereof will not conflict with, or result in any violation of
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any
obligation or a loss of a material benefit under, or result in the creation
of any Lien upon any of the

                                     -23-

<PAGE>

properties or assets of Newco under any provision of (a) the certificate of
incorporation or by-laws of Newco, (b) any Contract to which Newco is a party
or by which any of its properties or assets is bound or (c) any Judgment or
Applicable Law applicable to Newco or its properties or assets. No consent of
or registration, declaration or filing with any Governmental Entity is
required to be obtained or made by or with respect to Newco in connection
with the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, other than (i)
compliance with and filings under the HSR Act and (ii) as set forth in
SCHEDULE 4.3.

4.4  LITIGATION

     There are not any (a) outstanding Judgments against Newco, or (b)
Proceedings pending or, to the knowledge of Newco, threatened against Newco
or its Affiliates that are in any case, individually or in the aggregate, are
reasonably likely to materially impair the ability of Newco to perform its
obligations under this Agreement or to materially delay the consummation of
the transactions contemplated hereunder.

4.5  AVAILABILITY OF FUNDS

     (a)  SCHEDULE 4.5(a) contains a true, correct and complete copy of a
commitment letter from Bankers Trust Corporation for the aggregate amount of
$650 million in senior bank financing.

     (b)  SCHEDULE 4.5(b) contains a true, correct and complete copy of
commitment letters for the aggregate amount of $260 million in subordinated
debt financing. SCHEDULE 4.5(b) also contains a true, correct and complete
copy of a commitment letter from Parent for equity financing. Newco cannot
amend the letters set forth in SCHEDULE 4.5(b) without the consent of the
Corporation.

     (c)  The commitment letters referred to in SECTIONS 4.5(a) and (b) are
hereinafter referred to as the "FINANCING COMMITMENTS."

     (d)  No Financing Commitment has been modified, withdrawn or terminated
as of the date hereof, and Newco has no reason to believe as of the date
hereof that the Financing Commitments will not lead to the financing as
contemplated by the Financing Commitments. Assuming the satisfaction or
waiver of the conditions set forth in the Financing Commitment, the Financing
Commitments are sufficient to pay the Cash Merger Price, the Preferred Merger
Price and all fees and expenses arising out of or relating to the
transactions contemplated by this Agreement, including, without limitation,
the amount required to purchase or defease all of the outstanding Senior
Subordinated Notes and to purchase or redeem all of the outstanding FIRSTS.

4.6  BROKERS OR FINDERS.

     Except for JP Morgan and Kohlberg Kravis Roberts & Co. LLP, Newco
represents, as to itself and its Affiliates, that no agent, broker,
investment banker or other firm or Person is or will be entitled to any
broker's or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement. No Principal
Stockholder shall

                                     -24-
<PAGE>

have any liability or obligation, and if this Agreement is terminated, the
Corporation shall not have any liability or obligation to JP Morgan or
Kohlberg, Kravis Roberts & Co. LLP.

4.7  NEWCO.

     No Affiliate of Parent or Newco owns any material equity interest in any
Person engaged in the mobile magnetic resonance imaging business. Newco has
no reason to believe that the Federal Trade Commission or the Department of
Justice will request any information in connection with the consummation of
the transactions contemplated by this Agreement or that there is any
antitrust impediment to the consummation of the transactions contemplated
hereby.

                                  ARTICLE V

                                  COVENANTS

5.1  CONDUCT OF BUSINESS.

     From the date hereof to the Effective Time (or the termination of this
Agreement), except as set forth on SCHEDULE 5.1, the Corporation shall, and
shall cause each Subsidiary to, carry on its business in the ordinary course
consistent with past practice and use reasonable efforts to preserve intact
its current business organization, keep available the services of its current
officers and employees and preserve its relationships with customers,
suppliers, licensors, licensees and others having material business dealings
with it, in each case in accordance with past practice. Without limiting the
generality of the foregoing, from the date hereof to the Effective Time, the
Corporation shall not and shall cause each Subsidiary not to (except as
expressly permitted or contemplated by this Agreement or with the prior
written consent of Newco, which consent will not be unreasonably withheld or
delayed):

     (a)  (i)  declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, (ii) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of
its capital stock, or (iii) purchase, redeem or otherwise acquire any Shares
or any capital stock of the Corporation or any Subsidiary or any other
securities thereof or any rights, warrants or options to acquire any such
shares or other securities;

     (b)  issue, deliver, sell, pledge or otherwise encumber any shares of
its capital stock, any other voting securities or any securities convertible
into, or any rights, warrants or options to acquire, any such shares, voting
securities or convertible securities (other than the issuance of Shares upon
the exercise of Corporation Stock Options outstanding on the date hereof);

     (c)  amend its Certificate of Incorporation or Bylaws or other
comparable charter or organizational documents;

     (d)  acquire or agree to acquire (i) by merging or consolidating with,
or by purchasing a substantial portion of the assets or stock of, or by any
other manner, any business or any person, other than as set forth on SCHEDULE
5.1 or (ii) any assets or make other capital expenditures except for the
purchase of equipment or other assets consistent with the

                                    -25-

<PAGE>

Corporation's capital expenditure forecast for 1999 and the first quarter of
2000 as set forth in SCHEDULE 5.1(d); PROVIDED that the Corporation may agree
to acquire any asset or agree to make any capital expenditure if such
agreement is terminable or may be substantially delayed for any reason by the
Corporation without premium or penalty;

     (e)  sell, lease, license, mortgage or otherwise encumber or subject to
any Lien or otherwise dispose of any of its properties or assets, except (i)
immaterial assets, (ii) in the ordinary course of business (including for
trade-ins) or (iii) where the amount of such sales does not exceed,
individually or in the aggregate, $1,000,000 (excluding trade-ins);

     (f)  (i)  incur any indebtedness or guarantee any such indebtedness of
another Person, issue or sell any debt securities or warrants or other rights
to acquire any debt securities of the Corporation or any Subsidiary (other
than incurrence of indebtedness under the Corporation's revolving credit
facility or equipment financing in the ordinary course of business
consistent with past practice), guarantee any debt securities of another
Person, enter into any "keep well" or other agreement to maintain any
financial statement condition of another Person or enter into any arrangement
having the economic effect of any of the foregoing, or (ii) make any loans,
advances (other than advances to Subsidiaries or among Subsidiaries) or
capital contributions to, or investments in, any other Person;

     (g)  make any material tax election or settle or compromise any
material income tax liability other than the payment of taxes in the ordinary
course of business;

     (h)  pay, discharge, settle or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the ordinary
course of business consistent with past practice or in accordance with their
terms, or liabilities reflected or reserved against in the most recent
consolidated financial statements (or the notes thereto) of the Corporation
included in the SEC Documents or incurred thereafter in the ordinary course
of business consistent with past practice, or waive any material benefits of,
or agree to modify in any material respect, any confidentiality, standstill,
non-solicitation or similar agreement to which the Corporation or any
Subsidiary is a party;

     (i)  modify, amend or terminate any material Contract to which the
Corporation or any Subsidiary is a party (other than those Contracts subject
to SECTION 5.1(j)), or waive, release or assign any material rights or claims
under any material Contract (other than those Contracts subject to SECTION
5.1(j)), other than in the ordinary course of business consistent with past
practice;

     (j)  enter into any material Contract, which is not terminable by the
Corporation without premium or penalty, relating to the provision of services
by the Corporation or any Subsidiary, the maintenance of any MRI Unit or CT
Unit or the distribution, sale or marketing by third parties of the
Corporation's or any Subsidiary's services, including any material Contract
with any hospital, clinic, medical or healthcare provider, health maintenance
organization or other customer or third party payor, other than in the
ordinary course of business consistent with past practice; PROVIDED that the
Corporation shall be permitted to enter into any Contract or engage in any
transaction which is otherwise permitted under this SECTION 5.1;

                                    -26-

<PAGE>

     (k)  except as set forth in SCHEDULE 5.1(k) and except as required to
comply with Applicable Law, (i) adopt, enter into, terminate or amend any
Benefit Plan or other arrangement for the benefit or welfare of any director,
officer or current or former employee, other than, in the case of
non-executive officer employees, in the ordinary course of business consistent
with past practice, (ii) materially increase in any manner the compensation
or fringe benefits of, or pay any material bonus to any director or executive
officer (other than as set forth on SCHEDULE 5.1(k)), (iii) pay any material
benefit to any director or executive officer not provided for under any
Benefit Plan (other than customary director fees and expenses), (iv) except
as permitted in clause (ii), grant any awards under any bonus, incentive,
performance or other compensation plan or arrangement or Benefit Plan
(including the grant of stock options, stock appreciation rights, stock based
or stock related awards, performance units or restricted stock, or the removal
of existing restrictions in any Benefit Plans or agreement or awards made
thereunder) or (v) fund or secure the payment of material compensation or
benefits under any Benefit Plan other than in the ordinary course of business
consistent with past practice;

     (l)  terminate the employment of Richard N. Zehner, Vincent S. Pino,
Kenneth Ord or Russell D. Phillips, Jr.;

     (m)  willingly allow or permit to be done, any act by which any of the
material Insurance Policies may be suspended, materially impaired or canceled;

     (n)  enter into, renew, modify or revise any agreement or transaction
with any Principal Stockholder or any of its Affiliates if such renewal,
modification or revision is not on an arms' length basis or would be required
to be disclosed in an SEC Document assuming the renewal, modification or
revision was executed or the transaction occurred during the period covered
by such SEC Document; or

     (o)  authorize any of, or commit or agree to take any of, the foregoing
actions.

5.2  ACCESS TO INFORMATION.

     The Corporation shall, and shall cause its Subsidiaries and its and
their respective officers, directors, employees and agents to, afford to
Newco, its Affiliates and their respective accountants, counsel and other
representatives reasonable access during normal business hours during the
period prior to the Effective Time to all the properties, officers,
employees, agents, attorneys, accountants, books, contracts, commitments, Tax
Returns and records of the Corporation and its Subsidiaries and, during such
period shall furnish promptly to Newco any information concerning the
Corporation and its Subsidiaries as Newco may reasonably request; PROVIDED,
HOWEVER, that (a) such access does not unreasonably disrupt the normal
operations of the Corporation or any of its Subsidiaries, (b) the Corporation
is under no obligation to disclose to Newco any information, the disclosure
of which is restricted by Contract or Applicable Law or any information
relating to the proposed sale of the Corporation or (c) the Corporation may
withhold access to any of the foregoing to the extent the matters covered
thereby have been previously disclosed to Newco.

                                    -27-

<PAGE>

5.3  CONFIDENTIALITY.

     Newco acknowledges that the information being provided to it in
connection with the consummation of the transactions contemplated hereby is
subject to the terms of a confidentiality agreement dated as of June 18, 1999
between the Corporation and Affiliates of Newco as if Newco was a party to
such Confidentiality Agreement (the "CONFIDENTIALITY AGREEMENT"), the terms
of which are incorporated herein by reference.

5.4  EFFORTS TO CONSUMMATE.

     (a)  Subject to the terms and conditions of this Agreement, the parties
agree (i) to use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by
this Agreement, (ii) to execute any documents, instruments or conveyances of
any kind which may be reasonably necessary or advisable to carry out any of
the transactions contemplated hereunder, and (iii) to cooperate with each
other in connection with the foregoing. Without limiting the foregoing, the
parties agree to use their respective reasonable efforts (A) to obtain all
necessary waivers, consents and approvals from any Person; PROVIDED, HOWEVER
that neither the Corporation nor Newco shall be required to make any
payments, commence litigation or agree to modifications of the terms of any
Contracts in order to obtain any such waivers, consents or approvals, (B) to
obtain all necessary Permits as are required to be obtained under any
Applicable Law, (C) to give all notices to, and make all registrations and
filings with third parties, including without limitation submissions of
information requested by Governmental Entities, (D) to reasonably cooperate
with all potential sources of financing to the Corporation in connection
with the Merger, and the other transactions contemplated by this Agreement,
and to take all reasonable steps as may be necessary or advisable to
consummate one or more financing transactions with such potential sources of
financing, (E) to the extent necessary to obtain recapitalization accounting
treatment of the Merger, taking reasonable actions to restructure the
transactions contemplated by this Agreement; PROVIDED that the Corporation
will not be required to take any action that, in the Corporation's reasonable
discretion, may materially delay the consummation of the Merger or may
adversely affect the Cash Merger Price, the Preferred Merger Price, the Taxes
payable by any holder of the Corporation's Common Stock or the risk of
liability to any such holder and (F) to cause all conditions to this
Agreement to be satisfied; PROVIDED, HOWEVER that neither the Corporation nor
Newco shall be required to make any payments or commence litigation in
connection therewith.

     (b)  Each of the Corporation and Newco shall, as promptly as
practicable, but in no event later than ten Business Days following the
execution and delivery of this Agreement, file with the United States Federal
Trade Commission (the "FTC") and the United States Department of Justice (the
"DOJ") the notification and report form, if any, required for the
transactions contemplated hereby and any supplemental information requested
in connection therewith pursuant to the HSR Act. Any such notification and
report form and supplemental information shall be in substantial compliance
with the requirements of the HSR Act. Each of Newco and the Corporation shall
furnish to the other such necessary information and reasonable assistance as
the other may request in connection with its preparation of any filing or
submission that is necessary under the HSR Act. The Corporation and Newco
shall keep each other apprised of the status of any communications with, and
any inquiries or requests for additional information

                                    -28-

<PAGE>

from, the FTC and the DOJ and shall comply promptly with any such inquiry or
request. Each of the Corporation and Newco shall use its reasonable efforts to
obtain any clearance required under the HSR Act for the consummation of the
transactions contemplated by this Agreement.

     (c)  Without limiting the foregoing, Newco shall use its commercially
reasonable best efforts to obtain the requisite funds for the consummation of
the transactions contemplated hereby, including the Merger, the Debt Offers
(or the defeasance of the Senior Subordinated Notes and the redemption of the
FIRSTS), and to pay the related fees and expenses, on substantially the terms
and conditions set forth in the Financing Commitments or on substantially
comparable terms.

     (d)  Without limiting the foregoing, the Corporation shall defease all
of the outstanding Senior Subordinated Notes and redeem all of the
outstanding FIRSTS at the Effective Time to the extent that the Debt Offer
with respect to such Existing Notes has not been consummated, in each case,
with the proceeds from the Financing Commitments.

5.5  EXPENSES.

     Whether or not the Closing takes place, all costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such expense, including all costs and
expenses incurred pursuant to SECTION 5.4(a). Upon the Closing, the Surviving
Corporation shall pay the fees and expenses incurred by Newco and its
Affiliates in connection with this Agreement and the transactions
contemplated hereby, including the financial advisory fees of Kohlberg Kravis
Roberts & Co. ("KKR") and shall enter into a fee agreement pursuant to which
the Surviving Corporation will agree to pay KKR an annual management fee,
reimburse KKR's expenses in connection with its services to the Surviving
Corporation and its ownership of Shares and indemnify Newco and its
Affiliates and their respective partners, members, shareholders, officers,
directors, employees, agents, representatives and advisors in connection with
their service on the board of directors of the Corporation and the provision
of services under the fee agreement.

5.6  PUBLICITY.

     From the date hereof through the Closing Date, Newco, on the one hand,
and the Corporation on the other hand, will consult with each other before
issuing, and provide each other the opportunity to review and comment upon,
any press release or other public statements with respect to the transactions
contemplated hereby. Without the prior written consent of the other party
(which consent shall not be unreasonably withheld), no public release or
announcement concerning the transactions contemplated hereby shall be issued
by the Corporation, on the one hand, or Newco, on the other hand, without the
prior consent of Newco, as the case may be, except as such release or
announcement may be required by law or the rules or regulations of any United
States or foreign securities exchange.

5.7  EMPLOYEE MATTERS.

     Newco has no present intention to provide employees of the Corporation
with benefits substantially different from those in effect on the date
hereof, except for equity incentive programs. Newco has no present intention
to terminate the employment of any employee of the

                                     -29-

<PAGE>

Corporation or any of its Subsidiaries within 60 days following the Closing
Date except for existing plans of the Corporation.

5.8  INDEMNIFICATION, EXCULPATION.

     (a)  All rights to indemnification and exculpation (including the
advancement of expenses) from liabilities for acts or omissions occurring at
or prior to the Effective Time (including with respect to the transactions
contemplated by this Agreement) existing as of the date hereof in favor of
the current or former directors, officers and employees of the Corporation,
as provided in the Certificate of Incorporation and or the By-Laws and or any
indemnification agreements and pursuant to applicable law shall be assumed by
the Surviving Corporation in the Merger, without further action, as of the
Effective Time and shall survive the Merger and shall continue in full force
and effect without amendment, modification or repeal in accordance with their
terms for a period of not less than 5 years after the Effective Time;
PROVIDED, HOWEVER, that if any claims are asserted or made within such
period, all rights to indemnification (and to advancement of expenses)
hereunder in respect of any such claims shall continue, without diminution,
until disposition of any and all such claims.

     (b)  For a period of at least five years after the Effective Time, the
Surviving Corporation shall cause to be maintained in effect standard
policies of directors' and officers' liability insurance in an aggregate
coverage amount not less than the coverage amounts maintained by the
Corporation as of the date hereof and including coverage with respect to
claim arising from facts or events which occurred before the Effective Time
to the extent available; provided, however, that (i) the Surviving
Corporation shall not be required in order to maintain or procure such
coverage to pay an annual premium in excess of $200,000 (other than with
respect to any existing run-off coverage) and that if equivalent can be
obtained only by paying an annual premium in excess of such limit, the
Surviving Corporation shall only be required to obtain as much coverage as
can be obtained by paying an annual premium equal to such limit (subject to
the availability of such (or similar) coverage) and (ii) such policies may in
the sole discretion of the Surviving Corporation be one or more "tail"
policies for all or portion of the full five years.

     (c)  The provisions of this Section 5.8 are intended to be for the
benefit of, and will be enforceable by, each indemnified party, his or her
heirs and his or her representatives.

5.9  NO SOLICITATION.

     The Corporation shall, and shall cause each Subsidiary to, and shall
direct and use reasonable efforts to cause its and its Subsidiaries'
officers, directors, employees, representatives and agents to, immediately
cease any discussions or negotiations with any parties other than Parent,
Newco and their Affiliates and representatives that may be ongoing with
respect to an Alternative Transaction. The Corporation shall not, shall cause
each Subsidiary not to, and shall not authorize and shall direct and use
reasonable efforts to cause its and its Subsidiaries' officers, directors,
employees and any investment banker, financial advisor, attorney, accountant
or other representative retained by it not to, directly or indirectly, (i)
solicit, initiate or encourage (including by way of furnishing information),
or take any other action to facilitate, any inquiries

                                     -30-

<PAGE>

or the making of any proposal that may lead to an Alternative Transaction, or
(ii) participate in any discussions or negotiations regarding any proposed
Alternative Transaction.

5.10  FINANCIAL INFORMATION.

      The Corporation shall furnish to Newco the following financial
information (all to be prepared in accordance with GAAP consistently applied,
subject, in the case of unaudited financial information, to normal year-end
audit adjustments): (a) as soon as available but in any event within 45 days
of each of March 31, June 30, September 30 and December 31 and 35 days of
each other month, the unaudited consolidated balance sheets and income
statements of the Corporation, showing its financial condition as of the
close of such month and the results of operations during such month and for
the then elapsed portion of the Corporation's fiscal year, in each case,
setting forth the comparative figures for the corresponding month in the
prior fiscal year, the corresponding elapsed portion of the prior fiscal year
and the corresponding period in the Corporation's budget for 1999 as in
effect on the date hereof; and (b) all documents filed with or submitted to
the SEC by the Corporation simultaneously with such filing or submission.

5.11  NOTICE OF CHANGES.

      From the date hereof to the Effective Time, each party (the "BREACHING
PARTY") shall give reasonably prompt notice to the other party of any breach
of any representation, warranty or covenant made by the Breaching Party that
it becomes aware of, in each case, which breach would cause a condition to
the non-Breaching Party's obligations not to be satisfied. The Corporation
shall give reasonably prompt notice to Newco of any action commenced after
the date hereof and prior to the Effective Time that could reasonably be
expected to materially affect the Corporation or its Subsidiaries. A breach
of this SECTION 5.11 shall be deemed not to have occurred if the failure to
give any notice hereunder has not materially prejudiced the non-Breaching
Party.

5.12  REGISTRATION RIGHTS AGREEMENT.

      Immediately prior to the Effective Time, the Corporation shall execute
and deliver to Parent or Holdings LLC, the Principal Stockholders and any
Substitute Principal Stockholder a registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT") substantially in the form set forth in
SCHEDULE 5.12.

5.13  AFFILIATE AGREEMENTS.

      The Corporation shall use its reasonable efforts to cause the condition
set forth in SECTION 6.2(h) to be satisfied prior to the Effective Time.

5.14  LEASE AGREEMENTS.

      The Corporation shall use its reasonable efforts to amend all real
estate leases in respect of retail sites that have provisions for lease
payments that are based on revenues at the applicable site to provide for
lease payments that are not based on revenues.

                                     -31-

<PAGE>

                                  ARTICLE VI

                             CONDITIONS PRECEDENT

6.1  CONDITIONS TO EACH PARTY'S OBLIGATION.

     The respective obligations of each party to effect the Merger are
subject to the satisfaction or waiver, where permissible, prior to the
Effective Time, of the following conditions:

         (a)  HSR ACT.  The waiting period (and any extensions thereof) under
the HSR Act shall have expired or been terminated.

         (b)  NO INJUNCTIONS OR RESTRAINTS.  No Applicable Law or injunction
enacted, entered, promulgated, enforced or issued by any Governmental Entity
or other legal restraint or prohibition preventing the consummation of the
transactions contemplated hereby shall be in effect; PROVIDED, HOWEVER, that
each of the Corporation and Newco shall have used its reasonable efforts to
prevent the entry of any such injunction or other order and to appeal as
promptly as possible any such injunction or other order that may be entered.

6.2  CONDITIONS TO OBLIGATION OF NEWCO.

     The obligation of Newco to effect the Merger is subject to the
satisfaction (or waiver by Newco) on or prior to the Closing of the following
conditions:

         (a)  REPRESENTATIONS AND WARRANTIES.  The representations and
warranties of the Corporation made in this Agreement shall be true and
correct (without giving effect to any limitation as to "materiality" or
"Material Adverse Effect"), as of the Closing Date as though made on and as
of the Closing Date (except as to any representation or warranty that
expressly relates to a specific date, which representation and warranty shall
be true and correct on the date so specified), except where the failure to be
so true and correct is not, individually or in the aggregate reasonably
likely to have a Material Adverse Effect. Newco shall have received a
certificate signed by an authorized officer of the Corporation certifying as
to fulfillment of the conditions set forth in this SECTION 6.2(a) with
respect to the Corporation.

         (b)  PERFORMANCE OF OBLIGATIONS.  The Corporation shall have
performed or complied in all material respects with all obligations and
covenants required by this Agreement to be performed or complied with by the
Corporation by the time of the Closing, and Newco shall have received a
certificate signed by an authorized officer of the Corporation certifying as
to fulfillment of the conditions set forth in this SECTION 6.2(b) with
respect to the Corporation.

         (c)  SECRETARY'S CERTIFICATES.  Newco shall have received a
certificate, dated as of the Closing Date, signed by the Secretary of the
Corporation and certifying as to (i) its certificate of incorporation and
bylaws, (ii) the incumbency of officers executing this Agreement and (iii)
the resolutions of the board of director of the Corporation authorizing the
execution, delivery, and performance by the Corporation of this Agreement.

                                     -32-

<PAGE>

     (d)  NO MATERIAL ADVERSE CHANGE. Since the date hereof, there shall have
been no change, development, condition or effect that has had or is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect.

     (e)  NO LITIGATION. If Newco has complied in all material respects with
its obligations under SECTION 5.4, there shall not be pending by any
Governmental Entity (x) any suit, action or proceeding (i) challenging or
seeking to restrain or prohibit the consummation of the Merger or the
Stockholder Support Agreements, (ii) seeking to prohibit or limit the
ownership or operation by the Corporation, Parent or any of their respective
Affiliates of any material portion of the business or assets of the
Corporation or any of its Subsidiaries, to dispose of or hold separate any
material portion of the business or assets of the Corporation or any of its
Subsidiaries, as a result of the Merger or any of the other transactions
contemplated by this Agreement or the Stockholder Support Agreements, (iii)
seeking to impose limitations on the ability of Parent, Newco or their
Affiliates to acquire or hold, or exercise full rights of ownership of, any
shares of the Common Stock, including, without limitation, the right to vote
the Common Stock on all matters properly presented to the stockholders of the
Corporation, or (iv) seeking to prohibit Parent or any of its Affiliates from
effectively controlling in any material respect the business or operation of
the Corporation or its Subsidiaries, or (y) any formal investigation, audit or
Qui Tam proceeding with respect to the Corporation's compliance with Health
Care Laws that Newco reasonably determines has the potential to be material
to the Corporation and its Subsidiaries, taken as a whole (other than any
such investigation, audit or Qui Tam proceeding relating to a matter that has
been previously disclosed to Newco); PROVIDED that the condition set forth in
this SECTION 6.2(e)(y) shall be deemed to be waived on the tenth Business Day
following delivery of a notice to Newco of any such investigation, audit or
Qui Tam proceeding if Newco shall not have delivered on or prior to such
tenth day a notice to the effect that it has reasonably determined that such
investigation, audit or Qui Tam proceeding has the potential to be material
and adverse to the Company and its Subsidiaries, taken as a whole.

     (f)  FINANCING. The Corporation shall have received the proceeds of
financing described in the Financing Commitment referred to in Section
4.5(a) on substantially the terms set forth in the Financing Commitment or on
substantially comparable terms.

     (g)  PAYOUT OPTIONS. Each Payout Option, except for Payout Options which
are exercisable with respect to fewer than 50,000 shares of Common Stock,
shall have been cancelled for the cash payment contemplated by SECTION 2.4.

     (h)  TERMINATION OF AFFILIATE AGREEMENTS. Each of the agreements set
forth in SCHEDULE 6.2(h) shall have been terminated without further
liability (it being understood that all amounts payable thereunder shall be
paid at or prior to the Effective Time), and all obligations and liabilities
of the Corporation to the Principal Stockholders and their Affiliates
thereunder shall be cancelled, except, in each case for rights to
indemnification and exculpation set forth in the agreements referred to in
SCHEDULE 6.2(h).

     (i)  RESIGNATIONS. Prior to the Effective Time, each member of the Board
that is employed by or an Affiliate of the Principal Stockholders shall have
executed letters of resignation which shall become effective as of the
Effective Time.

                                     -33-

<PAGE>

     (j)  STOCKHOLDER AGREEMENTS. Each of the Principal Stockholders shall
have performed in all material respects its obligations under each of the
Stockholder Support Agreements.

     (k)  RECAPITALIZATION ACCOUNTING TREATMENT. The Chief Accountant or other
senior staff members of the SEC shall not have issued any public
communication which (i) changes its policy with respect to recapitalization
accounting treatment as in effect on the date hereof and (ii) would result in
transactions contemplated by this Agreement not to be treated as a
recapitalization for accounting purposes.

6.3  CONDITIONS TO THE OBLIGATION OF THE CORPORATION.

     The obligation of the Corporation to effect the Merger is subject to the
satisfaction (or waiver by the Corporation) on or prior to the Closing Date
of the following conditions:

     (a)  REPRESENTATIONS AND WARRANTIES OF NEWCO. The representations and
warranties of Newco made in this Agreement shall be true and correct (without
giving effect to any limitation as to "materiality" or "Material Adverse
Effect"), as of the Closing Date as though made on and as of the Closing Date
(except as to any representation or warranty that expressly relates to a
specific date, which representation and warranty shall be correct in all
material respects on the date so specified), except where the failure to be
so true and correct is not, individually or in the aggregate reasonably
likely to have a Material Adverse Effect (except for the representations
contained in Sections 4.1 and 4.2, which shall be true and correct in all
respects). The Corporation shall have received a certificate signed by an
authorized officer of Newco to such effect.

     (b)  PERFORMANCE OF OBLIGATIONS OF NEWCO. Newco shall have performed or
complied in all material respects with all obligations and covenants
required by this Agreement to be performed or complied with by Newco by the
time of the Closing, and the Corporation shall have received a certificate
signed by an authorized officer of Newco to such effect (it being understood
that Newco shall not have been deemed to have complied in all material
respects if it has not paid the Cash Merger Price and the Preferred Merger
Price in full).

     (c)  SECRETARY'S CERTIFICATE. The Corporation shall have received a
certificate, dated as of the Closing Date, signed by the Secretary of Newco
certifying as to (i) its certificate of incorporation and bylaws, (ii) the
incumbency of officers executing this Agreement and (iii) the resolutions of
the board of directors of Newco authorizing the execution, delivery and
performance by Newco of this Agreement.

                                      -34-

<PAGE>

                                  ARTICLE VII

                                  TERMINATION

7.1 TERMINATION.

     (a)  Subject to the provisions of SECTION 7.2, this Agreement may be
terminated and the transactions contemplated by this Agreement abandoned at
any time prior to the Closing, notwithstanding approval thereof by the
stockholders of the Corporation:

            (i)   by mutual written consent of the Corporation and Newco;

            (ii)  by either the Corporation or Newco, if the Effective Time
     shall not have occurred on or before November 30, 1999; PROVIDED that
     the right to terminate this Agreement pursuant to this SECTION
     7.1(a)(ii) shall not be available to the party seeking to terminate if
     any willful failure of such party to perform any of its obligations
     under this Agreement required to be performed at or prior to the
     Effective Time has been the cause of the failure of the Effective Time
     to occur on or before such date and such failure constitutes a breach of
     this Agreement;

            (iii) by the Corporation, on or after November 8, 1999 if all
     conditions to the obligations of Newco shall have been satisfied or
     waived on or before such date other than the condition set forth in
     Section 6.2(f); PROVIDED that Newco shall be entitled to extend such
     date to a date not later than November 12, 1999 if the Corporation is
     required under Applicable Law to extend the Debt Offer beyond November
     8, 1999; PROVIDED, FURTHER, that the right to terminate this Agreement
     pursuant to this SECTION 7.1(a)(iii) shall not be available to the party
     seeking to terminate if any willful failure of such party to perform any
     of its obligations under this Agreement required to be performed at or
     prior to the Effective Time has been the cause of the failure of the
     Effective Time to occur on or before November 8, 1999 (or, if extended,
     November 12, 1999) and such failure constitutes a breach of this
     Agreement;

            (iv)  by the Corporation or Newco if any Governmental Entity shall
     have issued a final order, decree or ruling or taken any other final action
     permanently restraining, enjoining or otherwise prohibiting the Merger and
     such order, decree or other action is or shall have become final and
     nonappealable; or

            (v)   by the Corporation following delivery by Newco to the
     Corporation of a notice pursuant to SECTION 6.2(e).

     (b)  In the event of termination by the Corporation or Newco pursuant to
this SECTION 7.1, written notice thereof shall forthwith be given to the
other and the transactions contemplated by this Agreement shall be terminated
without further action by any party.

                                     -35-

<PAGE>

7.2  EFFECT OF TERMINATION.

     If this Agreement is terminated and the transactions contemplated hereby
are abandoned as described in SECTION 7.1, this Agreement shall become null
and void and of no further force and effect, except for the provisions of
SECTIONS 2.3, 5.3, 5.5, 5.6, this Article VII and Article VIII. Nothing in
this SECTION 7.2 shall be deemed to release any party from any liability for
any breach by such party of the terms and provisions of this Agreement.

                                 ARTICLE VIII

                              GENERAL PROVISIONS

8.1  ASSIGNMENT.

     This Agreement and the rights and obligations hereunder shall not be
assignable or transferable by Newco or the Corporation (including by
operation of law in connection with a merger or consolidation of Newco or the
Corporation) without the prior written consent of the other party hereto. Any
attempted assignment in violation of this SECTION 8.1 shall be void.

8.2  NO THIRD-PARTY BENEFICIARIES.

     This Agreement is for the sole benefit of the parties hereto and their
permitted assigns and nothing herein expressed or implied shall give or be
construed to give to any Person, other than the parties hereto and such
assigns, any legal or equitable rights hereunder.

8.3  SURVIVAL.

     The representations and warranties and covenants applicable to periods
prior to the Closing contained in this Agreement and in any document
delivered in connection herewith shall survive until the Closing and the
consummation of the transactions contemplated hereby and shall not survive
the Closing. From and after the Effect Time, no party shall have any claim or
cause of action arising out of or relating to this Agreement, including any
claim or cause of action in respect of any breach of any representation or
warranty or covenant applicable to periods prior to the Closing contained in
this Agreement, other than any claim in respect of any covenant to be
performed after the Closing Date.

8.4  NOTICES.

     All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be delivered by hand or sent by
facsimile or sent, postage prepaid, by registered, certified or nationally
recognized overnight courier service and shall be deemed given when so
delivered by hand or facsimile, or if mailed, three days after mailing (one
Business Day in the case of overnight courier service), as follows:

            (i)   if to Newco, or the Surviving Corporation after the Closing,
     to

                       Viewer Acquisition Corporation
                       c/o Kohlberg Kravis Roberts & Co. LLP

                                     -36-
<PAGE>

                                   2300 Sand Hill Road
                                   Menlo Park, CA 94025
                                   Telephone: (650) 233-6560
                                   Telecopier: (650) 233-6561
                                   Attention: Michael Michelson

                            with a copy to:

                                   Latham & Watkins
                                   135 Commonwealth Avenue
                                   Menlow Park, California 94025
                                   Telephone: (650) 328-1600
                                   Telecopier: (650) 463-2600
                                   Attention: Peter F. Kerman, Esq.

                (ii) if to the Corporation prior to the Closing to:

                                   Alliance Imaging, Inc.
                                   1065 North PacifiCenter Drive, Suite 200
                                   Anaheim, California 92806
                                   Telephone: (714) 688-7100
                                   Telecopier: (714) 688-3377
                                   Attention: Chief Executive Officer

                            with a copy to:

                                   Apollo Management, L.P.
                                   1301 Avenue of the Americas, 38th Floor
                                   New York, New York 10019
                                   Telephone:  (212) 515-3200
                                   Telecopier: (212) 515-3263
                                   Attention: Mr. Joshua Harris

                            and

                                   O'Sullivan Graev & Karabell, LLP
                                   30 Rockefeller Plaza
                                   New York, New York 10112
                                   Attention: John S. Sullivan, Esq.
                                   Telephone:  (212) 408-2400
                                   Telecopier: (212) 728-5950

8.5      INTERPRETATION: EXHIBITS AND SCHEDULES.

         The headings contained in this Agreement, in any Exhibit or Schedule
hereto and in the table of contents to this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement. Except when the context requires otherwise, any reference
in this Agreement to any Article, Section, clause, Schedule or Exhibit

                                     -37-
<PAGE>

shall be to the Articles, Sections and clauses of, and Schedules and Exhibits
to this Agreement. The words "include," "includes" and "including" are deemed
to be followed by the phrase "without limitation." Any reference to the
masculine, feminine or neuter gender shall include such other genders and any
reference to the singular or plural shall include the other, in each case
unless the context otherwise requires. All Exhibits and Schedules annexed
hereto or referred to herein are hereby incorporated in and made a part of
this Agreement as if set forth on full herein. The consummation of the
matters set forth on EXHIBIT C shall be exceptions to the representations,
warranties and covenants of the Corporation contained in this Agreement.

8.6      COUNTERPARTS.

         This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by each of the
parties and delivered to the other party.

8.7      ENTIRE AGREEMENT.

         This Agreement, the Stockholder Support Agreements, the Stockholder
Agreement, the Registration Rights Agreement and the Confidentiality
Agreement contain the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersede all prior
agreements relating to such subject matter. Neither party hereto shall be
liable or bound to the other party hereto in any manner by any
representations, warranties or covenants relating to such subject matter
except as specifically set forth herein or in such other documents set forth
in this Section 8.7.

8.8      AMENDMENTS AND WAIVERS.

         This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto. By an instrument in writing
the Corporation, on the one hand, or Newco, on the other hand, may waive
compliance by the other party with any term or provision of this Agreement
that such other party was or is obligated to comply with or perform. No delay
on the part of any party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part
of any party hereto of any right, power or privilege hereunder operate as a
waiver of any other right, power or privilege hereunder or preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege hereunder. Unless otherwise provided, the rights and remedies
herein provided are cumulative and are not exclusive of any rights or
remedies which the parties hereto may otherwise have at law or in equity.

8.9      SEVERABILITY.

         It is the desire and intent of the parties hereto that the
provisions of this Agreement be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated by a court of competent jurisdiction to be
invalid, prohibited or unenforceable for any reason, such provision, as to
such jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of
this Agreement or affecting the validity or enforceability of such provision
in any other

                                     -38-
<PAGE>

jurisdiction so long as the economic or legal substance of the transactions
contemplated hereunder not affected in any manner adverse to any party.
Notwithstanding the foregoing, if such provision could be more narrowly drawn
so as not to be invalid, prohibited or unenforceable in such jurisdiction, it
shall, as to such jurisdiction, be so narrowly drawn, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Upon such
adjudication that any particular provision shall be invalid, prohibited or
unenforceable, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely
as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the fullest extent possible.

8.10     CONSENT TO JURISDICTION.

         Each of Newco and the Corporation irrevocably submits to the
non-exclusive jurisdiction of the Supreme Court of the State of New York, New
York County, the United States District Court for the Southern District of
New York and any appellate courts thereof, for the purposes of any suit,
action or other proceeding arising out of this Agreement or any transaction
contemplated hereby. Each of Newco and the Corporation further agrees that
service of any process, summons, notice or document by U.S. registered mail
to such party's respective address set forth above shall be effective service
of process for any action, suit or proceeding in New York with respect to any
matters to which it has submitted to jurisdiction in this SECTION 8.10. Each
of Newco and the Corporation irrevocably, and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising
out of this Agreement or the transactions contemplated hereby in the Supreme
Court of the State of New York, New York County, the United States District
Court for the Southern District of New York and any appellate courts thereof,
and hereby and thereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient
forum.

8.11     LIMITATION OF DAMAGES.

         Notwithstanding any provision of this Agreement, no party shall be
liable for any punitive, exemplary or consequential damages, including loss
of revenue or income, or loss of business reputation or opportunity relating
to the breach of this Agreement.

8.12     GOVERNING LAW.

         This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Delaware applicable to agreements made
and to be performed entirely within such State, without regard to the
conflicts of law principles of such State.

8.13     WAIVER OF JURY TRIAL.

         EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY

                                      -39-
<PAGE>

ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT IN THE EVENT OF LITIGATION SEEK TO ENFORCE
EITHER OF SUCH WAIVERS, (ii) IT UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF SUCH WAIVERS, (iii) IT MAKES SUCH WAIVERS VOLUNTARILY, AND
(iv) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.13

8.14     EQUITABLE REMEDIES.

         Each of the parties acknowledges and agrees that the other party
would be irreparably damaged in the event any of the provisions of this
Agreement are not performed in accordance with their specific terms or
otherwise are breached. Therefore, notwithstanding anything to the contrary
in this Agreement, each of the parties agrees that the other party shall be
entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically the performance by
the other party under this Agreement, and each party agrees to waive the
defense in any such suit that the other party has an adequate remedy at law
and to interpose no opposition, legal or otherwise, as to the propriety of
injunction or specific performance as a remedy. The equitable remedies
described in this Section 8.14 shall be in addition to, and not in lieu of,
any other remedies at law or in equity that the parties hereto may elect to
pursue.

                                  *  *  *

                                     -40-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement and Plan of Merger as of the date first written above.

                                   VIEWER ACQUISITION
                                   CORPORATION

                                   By:  /s/ MICHAEL W. MICHELSON
                                       -----------------------------------
                                   Name: Michael W. Michelson
                                   Title: President

                                   ALLIANCE IMAGING, INC.

                                   By:
                                       -----------------------------------
                                   Name:
                                   Title:

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement and Plan of Merger as of the date first written above.

                                   VIEWER ACQUISITION
                                   CORPORATION

                                   By:
                                       -----------------------------------
                                   Name:
                                   Title:

                                   ALLIANCE IMAGING, INC.

                                   By:    /s/ RICHARD N. ZEHNER
                                       -----------------------------------
                                   Name:  Richard N. Zehner
                                   Title: Chairman and Chief Executive Officer

<PAGE>

                                                                         ANNEX I

                                  DEFINITIONS

         As used in this Agreement, the following terms shall have the
following respective meanings:

         "ACQUISITION LLC" has the meaning set forth in the preamble hereto.

         "AFFILIATE" of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such first Person.

         "AGREEMENT" means this Agreement and Plan of Merger.

         "ALTERNATIVE TRANSACTION" means (i) any acquisition or purchase of
20% or more of the consolidated assets of the Corporation and its
Subsidiaries or of over 20% of any class of equity securities of the
Corporation or any of its Subsidiaries, (ii) any tender offer (including a
self tender offer) or exchange offer that if consummated would result in any
Person beneficially owning 20% or more of any class of equity securities of
the Corporation or any of its Subsidiaries, (iii) any merger, consolidation,
business combination, sale of all or substantially all of the assets,
recapitalization, liquidation, dissolution or similar transaction involving
the Corporation or any of its Subsidiaries whose assets, individually or in
the aggregate, constitute more than 20% of the consolidated assets of the
Corporation other than the transactions contemplated by this Agreement, or
(iv) any other transaction the consummation of which would be reasonably
likely to impede, interfere with, prevent or materially delay the Merger or
which would be reasonably likely to materially dilute the benefits to Newco
of the transaction contemplated hereby.

         "APPLICABLE LAW" means shall mean any laws, statutes, ordinances,
regulations, rules, notice requirements, court decisions, agency guidelines,
principles of law and orders of any Governmental Entity.

         "BENEFIT PLAN" has the meaning set forth in SECTION 3.14(a).

         "BOARD" has the meaning set forth in the preamble hereof.

         "BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day which banking institutions in New York, New York are not required to be
open.

         "BY-LAWS" has the meaning set forth in SECTION 1.5(b)

         "CASH MERGER PRICE" means (a) an amount equal to (i) $915 million
PLUS (ii) the aggregate exercise price of all Corporation Stock Options
(whether or not vested) outstanding immediately prior to the Effective Time
PLUS (iii) all cash proceeds received by the Corporation in connection with
the exercise of any Corporation Stock Option after the date hereof and prior

<PAGE>

to the Effective Time (any such exercised Corporation Stock Options shall not
be considered outstanding under clause (ii) above LESS (iv) the Net Debt
Amount LESS (v) the product of 150,000 multiplied by the Preferred Merger
Price LESS (vi) the Corporation Expenses LESS (vii) the aggregate retention
bonuses paid or payable in accordance with the arrangements set forth in
EXHIBIT C (as the amount of such bonuses may be revised by the
Corporation, in its sole discretion, from time to time prior to the Effective
Time) PLUS (viii) $582,500 (adjusted in the same proportion as the retention
bonuses) divided by (b) the total number of shares of Common Stock
outstanding immediately prior to the Effective Time assuming all Corporation
Stock Options (whether or not vested) have been exercised.

         "CERTIFICATE OF INCORPORATION" has the meaning set forth in
SECTION 1.5(a).

         "CERTIFICATE OF MERGER" has the meaning set forth SECTION 1.2.

         "CLOSING"  has the meaning set forth in SECTION 1.3.

         "CLOSING DATE" has the meaning set forth in SECTION 1.3.

         "CODE" means the Internal Revenue Code of 1986, as amended.

         "COMMON STOCK" has the meaning set forth in the preamble hereof.

         "CONFIDENTIALITY AGREEMENT" has the meaning set forth in SECTION 5.3.

         "CONSENT" has the meaning set forth in SECTION 3.3(b).

         "CONTRACT" all agreements, contracts, leases, purchase orders,
undertakings, understandings, covenants not to compete, employment
agreements, confidentiality agreements, licenses, instruments, obligations
and commitments to which the Corporation or one of its Subsidiaries is a party
or by which any assets of the Corporation or its Subsidiaries are bound or
affected, whether written or oral.

         "CONTROL" (including the terms "CONTROLLED", "CONTROLLED BY" and
"UNDER COMMON CONTROL WITH") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management policies of a
Person, whether through the ownership of stock, by contract or credit
arrangement or otherwise.

         "CORPORATION" has the meaning set forth in the caption.

         "CORPORATION EXPENSES" means all expenses incurred by the
Corporation in connection with the negotiation, execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby,
including all fees payable to the Corporation's financial advisors and
counsel in connection with such transactions, other than those expenses
relating to the Debt Offers, the debt and equity financing to be provided in
connection with the Merger, the financial advisory work provided to Newco
and its Affiliates and the rollover of management equity and other
compensation arrangements for management after the Closing (it being
understood that the Corporation will cause its financial advisors and

<PAGE>

counsel to provide final invoices prior to Closing for all services that are
included in Corporation Expenses).

         "CORPORATION STOCK OPTION PLANS" means the Corporation's 1991 Stock
Option Plan, 1997 Stock Option Plan, 1999 Non-Employee Director Stock Option
Plan, the Three Rivers Holding Corp. 1997 Stock Option Plan, the Rollover
Option Agreements between Three Rivers Holding Corp. and certain of its
employees and any other plan, agreement or arrangement which grants options
or any other rights in Common Stock, in each case, as amended, supplemented
or restated to the date hereof.

         "CORPORATION STOCK OPTIONS" means all options to acquire Common
Stock.

         "CREDIT AGREEMENT" means the Third Amended and Restated Credit
Agreement dated as of May 13, 1999, among the Corporation, Salomon Brothers
Holding Company, Inc., Bankers Trust Company and the Various Lending
Institutions party thereto.

         "DEBT OFFERS" has the meaning set forth in SECTION 2.3.

         "DGCL" has the meaning set forth in the preamble hereof.

         "DISSENTING SHARES" has the meaning set forth in SECTION 2.1.

         "DOJ" has the meaning set forth in SECTION 5.4(b).

         "EFFECTIVE TIME" has the meaning set forth in SECTION 1.2.

         "ENVIRONMENTAL LAW" has the meaning set forth in SECTION 3.17.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, the regulations promulgated thereunder.

         "EXCHANGE FUND" has the meaning set forth in SECTION 2.2(d).

         "EXISTING NOTES" means the FIRSTS and the Senior Subordinated Notes.

         "FIRSTS" means the Corporation's Floating Interest Rate Subordinated
Term Securities due 2005.

         "FTC" has the meaning set forth in SECTION 5.4(b).

         "GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession in the United States, consistently applied.

         "GOVERNMENTAL ENTITY" means any Federal, state, local or foreign
government or any court of competent jurisdiction, administrative agency or
commission or other governmental authority, agency, department, board,
commission or instrumentality, domestic or foreign.

<PAGE>

         "HAZARDOUS MATERIALS" has the meaning set forth in SECTION 3.17.

         "HEALTH CARE LAWS" means laws and regulations relating to the
Permits referred to in SECTION 3.11 that are specific to the healthcare
industry (such as certificates of need and clinic licenses), laws and
regulations referred to in SECTIONS 3.22 and 3.23 and laws and regulations
enacted or promulgated pursuant to State Health Care Programs and Federal
Health Care Programs.

         "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.

         "JUDGMENT" means any judgment, decision, ruling, writ, injunction,
order, award or decree of any Governmental Entity.

         "LEASED PROPERTY" has the meaning set forth in SECTION 3.8.

         "LEASES" has the meaning set forth in SECTION 3.8.

         "LIENS" means mortgages, liens, security interests, pledges,
easements, rights of first refusal, options, restrictions, claims, easements,
encroachment, building or use restriction, or encumbrances of any kind,
whether voluntarily incurred or arising by operation of law, and includes any
agreement to give any of the foregoing in the future and any contingent sale
or other title retention agreement or lease in the nature thereof.

         "MATERIAL ADVERSE EFFECT" means (i) a material adverse effect on the
business, assets, liabilities, properties, condition (financial or
otherwise) or results of operations of the Corporation and its Subsidiaries,
taken as a whole, other than any such effect caused by or relating to general
economic conditions or (ii) the prevention or material delay of the ability
of the Corporation to consummate the transactions contemplated hereby.

         "MERGER" has the meaning set forth in the preamble hereof.

         "MERGER SHARES" has the meaning set forth in SECTION 2.1(a)(i).

         "NET DEBT AMOUNT" means (a) $526,998,000 less (b) if the Effective
Time occurs after October 31 but prior to November 30, the product of
$141,333 multiplied by the number of days that has elapsed from October 31
through the Closing Date.

         "NEWCO" has the meaning set forth in the first paragraph hereof.

         "NON-VOTING COMMON" has the meaning set forth in SECTION 3.4(a).

         "OFFER DOCUMENTS" has the meaning set forth in SECTION 2.3.

         "OWNED REAL PROPERTY" has the meaning set forth in SECTION 3.8(a).

         "PARENT" has the meaning set forth in the preamble hereof.

         "PAYING AGENT" has the meaning set forth in SECTION 2.2.

<PAGE>

         "PAYOUT OPTIONS" has the meaning set forth in SECTION 2.4.

         "PERMITS" has the meaning set forth in SECTION 3.11.

         "PERMITTED LIENS" means (i) those Liens granted pursuant to real
property loans and leases disclosed in SCHEDULE 3.8 or which the failure to
disclose would not be reasonably likely to have a Material Adverse Effect,
(ii) mechanics', carriers', workmen's, repairmen's or other like Liens
arising or incurred in the ordinary course of business, Liens arising under
original purchase price conditional sales contracts and equipment leases with
third parties entered into in the ordinary course of business and liens for
Taxes that continued use and operation of the Corporation's or its
Subsidiaries' assets in the conduct of its business as presently conducted,
(iv) easements, covenants, rights-of-way and other similar restrictions of
record, (v) any conditions that may be shown by a current, accurate survey or
physical inspection of any Owned Real Property made prior to Closing, (vi)(A)
zoning, building and other similar restrictions, (B) Liens that have been
placed by any developer, landlord or other third party on property are not
due and payable or that may thereafter be paid without penalty or that are
being contested in good faith by appropriate proceedings, (iii) other
imperfections of title or encumbrances, if any, that do not, individually or
in the aggregate, materially impair the over which the Corporation has
easement rights and (C) unrecorded easements, covenants, rights-of-way and
other similar restrictions (none of which have had or are reasonably likely
to have a Material Adverse Effect), (vi) liens granted pursuant to the Credit
Agreement and (vii) other Liens which have not had and are not reasonably
likely to have a Material Adverse Effect.

         "PERSON" means and includes any person or entity, whether an
individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization, firm or a governmental entity (or any department,
agency or political subdivision thereof).

         "PREFERRED MERGER PRICE" means a per share amount equal to the
amount that a holder of a share of Series F Preferred would have received if
that share of Series F Preferred was redeemed immediately prior to the
Effective Time.

         "PREFERRED STOCK" has the meaning set forth in SECTION 3.4.

         "PRINCIPAL STOCKHOLDERS" has the meaning set forth in the preamble
hereto.

         "PROCEEDING" means any claim, action, suit, investigation or
proceeding before any Governmental Entity.

         "RELEASE" has the meaning set forth in SECTION 3.17.

         "REGISTRATION RIGHTS AGREEMENT" has the meaning set forth in SECTION
5.12.

         "RETAINED SHARES" means the number of shares of Common Stock set
forth opposite the name of each stockholder set forth on SCHEDULE 2.1;
PROVIDED that after the date hereof, the Corporation and/or the Principal
Stockholders may, in their sole discretion, amend SCHEDULE 2.1 to add
additional stockholders who have agreed to retain shares of Voting Common
Stock in lieu of a portion of the shares set forth opposite the name of the
Principal Stockholders

<PAGE>

in such Schedule (a "SUBSTITUTE PRINCIPAL STOCKHOLDER"); PROVIDED, FURTHER,
that (i) no such Substitute Principal Stockholder shall retain more than 5%
of the number of Shares it holds immediately prior to the Effective Time and
(ii) that an employee, officer or director of the Corporation shall not be a
Substitute Principal Shareholder.

         "SEC DOCUMENTS" has the meaning set forth in SECTION 3.6.

         "SECURITIES ACT" means the Securities Act of 1933, as amended, and
as the same may be further amended, modified or supplemented from time to
time, or any successor statute, and the rules and regulations thereunder, as
the same are from time to time in effect.

         "SENIOR SUBORDINATED NOTES" means the 9.625% Senior Subordinated
Notes, due 2005.

         "SERIES F PREFERRED" has the meaning set forth in the preamble
hereof.

         "SERIES F PREFERRED CERTIFICATE OF DESIGNATIONS" means the
Certificate of Designations, Powers, Preferences and Rights of Series F
Preferred, dated as of December 17, 1997.

         "SHARES" means shares of Voting Common and Non-Voting Common issued
and outstanding.

         "STOCKHOLDERS AGREEMENT" has the meaning set forth in the preamble
hereof.

         "STOCKHOLDER SUPPORT AGREEMENTS" has the meaning set forth in the
preamble hereof.

         "SUBSIDIARY" of any Person means another Person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its board of directors or
other governing body (or, if there are no such voting interests, more than
50% of the equity interests of which) is owned (either alone or through or
together with any other Subsidiary or Subsidiaries) directly or indirectly by
such first Person.

         "SUBSTITUTE PRINCIPAL SHAREHOLDER" has the meaning set forth in the
definition of Retained Shares.

         "SURVIVING CORPORATION" has the meaning set forth in SECTION 1.1.

         "TAXES" shall mean all taxes of any kind, including, without
limitation, those on or measured by or referred to as income, gross receipts,
sales, use, ad valorem, franchise, net worth, profits, license, estimated,
withholding, payroll, employment, excise, severance, stamp, occupation,
premium, value added, property or windfall profits taxes, customs, duties or
similar fees, transfer taxes, assessments or charges of any kind whatsoever,
together with any interest and any penalties, additions to tax or additional
amounts imposed by any Governmental Entity.

         "TAX RETURN" shall mean any return, report or statement required to
be filed with any Governmental Entity with respect to Taxes.

<PAGE>

         "VOTING COMMON STOCK" has the meaning set forth in SECTION 3.4.

<PAGE>

               AMENDMENT NO. 1 TO THE AGREEMENT AND PLAN OF MERGER

     This Amendment No.1 to the Agreement and Plan of Merger (the "Amendment
No. 1") is entered into as of November 1, 1999 by and between Alliance Imaging,
Inc., a Delaware corporation ("Alliance"), and Viewer Acquisition Corporation, a
Delaware corporation ("Newco").

                                    RECITALS

     WHEREAS, Newco and Alliance have entered into the Agreement and Plan of
Merger (the "Merger Agreement") dated as of September 13, 1999, whereby Newco
shall merge with and into Alliance, with Alliance as the surviving corporation.

     WHEREAS, the parties wish to amend the Merger Agreement.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants herein provided, the parties agree as follows:

     1. Clause (ii) of the first "WHEREAS" paragraph of the Merger Agreement
shall be amended in its entirety as follows:

          "(ii) shares of Common Stock owned by Viewer Holdings LLC, a Delaware
     limited liability company ("HOLDINGS LLC"), a subsidiary of KKR 1996 Fund,
     L.P. ("PARENT") and Newco.

     2. EXHIBIT A to the Merger Agreement shall be deleted and be replaced with
EXHIBIT A attached hereto.

     3. Section 1.6 shall be deleted in its entirety and shall be replaced as
follows:

         "The directors of the Corporation at the Effective Time shall be the
         directors of the Surviving Corporation until the earlier of their
         resignation or removal or until their successors are duly elected or
         appointed and qualified."

     4. The definition of "ACQUISITION LLC" in ANNEX I to the Merger Agreement
shall be deleted in its entirety. References to Acquisition LLC in Sections
2.1(c) and 2.1(e) and elsewhere in the Merger Agreement shall be deleted.

     5. SCHEDULE 2.1 provided in the definition of "Retained Shares" in ANNEX I
to the Merger Agreement shall be deleted and be replaced with SCHEDULE 2.1
attached hereto.

<PAGE>

     6. SCHEDULE 2.4 attached to the Merger Agreement shall be deleted and be
replaced with SCHEDULE 2.4 attached hereto.

     7. On and after the date of this Amendment No. 1, each reference in the
Merger Agreement shall mean the Merger Agreement as amended hereby. Except as
specifically amended above, the Merger Agreement shall remain in full force and
effect and is hereby ratified and confirmed. The execution, delivery and
execution of this Amendment No. 1 shall not, except as expressly provided
herein, operate as a waiver of any right, power or remedy of any of the parties.
The Merger Agreement shall not be amended without the prior written consent of
the majority of the outstanding shares of the Common Stock.

     8. This Amendment No. 1 shall be governed by, and construed in accordance
with, the internal laws of the State of New York applicable to agreements made
and to be performed entirely within such State, without regard to conflict of
laws principles.

     9. This Amendment No. 1 may be executed in any number of counterparts and
by facsimile, each of which shall be deemed to be an original, and all of which
together shall constitute one agreement binding on the parties hereto.

<PAGE>

     IN WITNESS WHEREOF, the undersigned have duly executed this Amendment No. 1
to the Agreement and Plan of Merger as of the date first written above.

                             VIEWER ACQUISITION CORPORATION,
                             a Delaware corporation

                             By: /s/ MICHAEL W. MICHELSON
                                -------------------------------------------
                                Michael W. Michelson,
                                President and Chief Executive Officer

                             ALLIANCE IMAGING, INC.,
                             a Delaware corporation

                             By: /s/ RICHARD N. ZEHNER
                                -------------------------------------------
                                Name:  Richard N. Zehner
                                Title: Chairman and Chief Executive Officer

<PAGE>

                                    EXHIBIT A

               "AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                             ALLIANCE IMAGING, INC.

                                    ARTICLE I

     The name of the corporation (the "Corporation") is:

                                  Alliance Imaging, Inc.

                                   ARTICLE II

     The address of its registered office in the State of Delaware is 9 East
Loockerman Street, in the City of Dover, County of Kent, 19901. The name of its
registered agent at such address is National Registered Agents, Inc.

                                   ARTICLE III

     The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware.

                                   ARTICLE IV

     The total number of shares of stock which the Corporation shall have
authority to issue is ten million (10,000,000), all of which shall be Common
Stock, $.01 par value per share.

                                   ARTICLE V

     In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized to adopt, amend or repeal the
Bylaws of the Corporation.

                                   ARTICLE VI

     Election of directors need not be by written ballot unless the Bylaws of
the Corporation shall so provide.

<PAGE>

                                   ARTICLE VII

     No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of the law, (iii) under Section 174 of the General Corporation Law of
Delaware, or (iv) for any transaction from which the director derived an
improper personal benefit."

<PAGE>

                                  SCHEDULE 2.1

<TABLE>
<CAPTION>
--------------------------------------------------------------------------
                     STOCKHOLDER                  NO. OF RETAINED SHARES

--------------------------------------------------------------------------
<S>                                               <C>
Apollo Investment Fund III, L.P.                        248,244
--------------------------------------------------------------------------
Apollo Overseas Partners III, L.P.                       14,838
--------------------------------------------------------------------------
Apollo (U.K.) Partners III, L.P.                          9,175
--------------------------------------------------------------------------
BT Investment Partners, Inc.                             12,144
--------------------------------------------------------------------------
Michael Pino                                             16,250
--------------------------------------------------------------------------
Tiffany Pino                                             16,250
--------------------------------------------------------------------------
</TABLE>

<PAGE>

                                  SCHEDULE 2.4
A.

<TABLE>
<CAPTION>

---------------------------------------------------------------------------
OPTION HOLDER       OPTION GRANT DATE                   ROLLOVER OPTIONS
---------------------------------------------------------------------------
                       ALLIANCE
<S>               <C>                                   <C>
---------------------------------------------------------------------------
ZEHNER            12/18/1997 (98,953);                       102,077
                  02/05/98 (3,124)
---------------------------------------------------------------------------
PINO              12/18/1997; 02/06/1998                      85,350
---------------------------------------------------------------------------
ORD               01/19/1998                                  33,750
---------------------------------------------------------------------------
MERICLE           01/02/1998                                   8,800
---------------------------------------------------------------------------
ANDRUES           01/02/1998                                   8,800
---------------------------------------------------------------------------
FORD              01/02/1998                                   8,800
---------------------------------------------------------------------------
PINSON            01/02/1998                                   3,400
---------------------------------------------------------------------------
DODD              01/02/1998                                   2,200
---------------------------------------------------------------------------
GRISMER           01/02/1998                                   2,618
---------------------------------------------------------------------------
CALFO             01/02/1998                                   2,000
---------------------------------------------------------------------------
BRAUN             01/02/1998                                     500
---------------------------------------------------------------------------
MAUK              01/02/1998                                     500
---------------------------------------------------------------------------
HORN              01/02/1998                                     500
---------------------------------------------------------------------------
ALMIERI           04/28/1998                                   5,400
---------------------------------------------------------------------------
EASTMAN           04/28/1998                                   3,400
---------------------------------------------------------------------------
TUCCIO            04/28/1998                                   3,400
---------------------------------------------------------------------------
PHILLIPS          03/10/1999                                   4,250
---------------------------------------------------------------------------
AMIN              04/28/1998                                     750
---------------------------------------------------------------------------
GRAHAM            03/10/1999                                   2,000
---------------------------------------------------------------------------
HAYS              03/10/1999                                   2,000
---------------------------------------------------------------------------
KNILL             03/10/1999                                     750
---------------------------------------------------------------------------
BAKER             10/14/1997                                   2,810
---------------------------------------------------------------------------
BERGMAN           10/14/1997                                   9,835
---------------------------------------------------------------------------
BYINGTON          10/14/1997                                     787
---------------------------------------------------------------------------
COOK              10/14/1997                                   2,810
---------------------------------------------------------------------------
DICKMAN           10/14/1997                                   9,835
---------------------------------------------------------------------------
GRADY             10/14/1997                                     900
---------------------------------------------------------------------------
PANNICK           10/14/1997                                     169
---------------------------------------------------------------------------
PASKO             10/14/97 (635); 12/31/1998 (735)             1,370
---------------------------------------------------------------------------
PETCHENY          10/14/1997                                   1,405
---------------------------------------------------------------------------
SILVA             10/14/1997                                     338
---------------------------------------------------------------------------
SNIDER            10/14/1997                                     450
---------------------------------------------------------------------------
SPINDLER          10/14/1997 (4,608);                          8,180
                  12/31/1998 (3,572)
---------------------------------------------------------------------------
STONER            10/14/1997 (19); 12/31/1998 (1,225)          1,244
---------------------------------------------------------------------------
WONSETTLER        10/15/1997 (1,700);                          5,620
                  12/31/1998 (3,920)
---------------------------------------------------------------------------
COMBS             10/14/1997                                      48
---------------------------------------------------------------------------
SMITH             10/14/1997 (645); 12/31/1998 (980)           1,625
---------------------------------------------------------------------------
GRAND TOTAL                                                  328,671
---------------------------------------------------------------------------
</TABLE>

B.       ALLIANCE IMAGING, INC. 1997 STOCK OPTION PLAN.
         THREE RIVERS HOLDING CORP. 1997 STOCK OPTION PLAN<PAGE>

                                                             EXHIBIT 10.24

                          REGISTRATION RIGHTS AGREEMENT

                                  by and among

                             ALLIANCE IMAGING, INC.,

                               VIEWER HOLDINGS LLC

                        APOLLO INVESTMENT FUND III, L.P.

                     APOLLO OVERSEAS PARTNERS III, L.P. and

                        APOLLO (U.K.) PARTNERS III, L.P.

                          DATED AS OF NOVEMBER 2, 1999

<PAGE>

                          REGISTRATION RIGHTS AGREEMENT

                  This Registration Rights Agreement (the "Agreement") is
made and entered into as of November 2, 1999, by and among (i) Alliance
Imaging, Inc., a Delaware corporation (the "Issuer"), (ii) Viewer Holdings
LLC, a Delaware limited liability company ("Viewer LLC"), and (iii) Apollo
Investment Fund III, L.P., a Delaware limited partnership, Apollo Overseas
Partners III, L.P., a Delaware limited partnership and Apollo (U.K.) Partners
III, a Delaware limited partnership (collectively "Apollo").

                  This Agreement is made pursuant to that certain Agreement
and Plan of Merger, dated as of September 13, 1999, as amended, by and
between the Issuer and Viewer Acquisition Corporation (the "Merger
Agreement"). In order to induce the Investors to consummate the transactions
contemplated by the Merger Agreement, the Issuer has agreed to provide the
registration rights set forth in this Agreement.

                  In consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:

         1.       DEFINITIONS

                  As used in this Agreement, the following capitalized terms
shall have the following meanings:

                  AFFILIATE: With respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control
with such Person.

                  APOLLO HOLDER: Apollo and any of its Affiliates that hold
Registrable Securities that are permitted assigns hereunder and that agrees
in writing to be bound by the provisions of this Agreement, collectively.

                  BOARD:  The Board of Directors of the Issuer.

                  COMMON STOCK: The Common Stock, par value $0.01 per share,
of the Issuer.

                  DEMAND-NOTICE:  see Section 3(a) hereof.

                  DEMAND REGISTRATION: A registration pursuant to Section
3(a) hereof.

                  EXCHANGE ACT: The Securities Exchange Act of 1934, as
amended from time to time.

                  HOLDER: Any party hereto (other than the Issuer) and any
holder of Registrable Securities who are permitted assigns hereunder and
agrees in writing to be bound by the provisions of this Agreement.

<PAGE>

                  INITIAL PUBLIC OFFERING: The first underwritten public
offering of the Issuer's Common Stock on a firm commitment basis pursuant to
an effective Registration Statement after the date hereof.

                  INVESTORS: Viewer LLC and any of its Affiliates which hold
Registrable Securities, collectively.

                  NASD:  National Association of Securities Dealers, Inc.

                  PERSON: An individual, partnership, limited liability
company, joint venture, corporation, trust or unincorporated organization, a
government or any department, agency or political subdivision thereof or
other entity.

                  PIGGYBACK NOTICE:  See Section 4(a) hereof.

                  PIGGYBACK REGISTRATION: A registration pursuant to Section
4 hereof.

                  PROSPECTUS: The prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement and by all other amendments
and supplements to the prospectus, including post-effective amendments and
all material incorporated by reference in such prospectus.

                  REGISTRABLE SECURITIES: All shares of Common Stock (i)
owned by the Investors on the date hereof or hereafter, (ii) owned by the
Apollo Holders on the date hereof, and (iii) any securities of the Issuer
which may be issued or distributed with respect to, or in exchange or
substitution for, or conversion of, such Common Stock and such other
securities pursuant to a stock dividend, stock split or other distribution,
merger, consolidation, recapitalization or reclassification or otherwise;
PROVIDED, HOWEVER, that any Registrable Securities shall cease to be
Registrable Securities when (i) a Registration Statement with respect to the
sale of such Registrable Securities has been declared effective under the
Securities Act and such Registrable Securities have been disposed of in
accordance with the plan of distribution set forth in such Registration
Statement, or (ii) such Registrable Securities are distributed pursuant to
Rule 144 (or any similar provision then in force) under the Securities Act;
and PROVIDED, FURTHER, that any securities that have ceased to be Registrable
Securities cannot thereafter become Registrable Securities and any security
that is issued or distributed in respect of securities that have ceased to be
Registrable Securities is not a Registrable Security.

                  REGISTRATION: A Demand Registration or a Piggyback
Registration.

                  REGISTRATION EXPENSES:  See Section 7 hereof.

                  REGISTRATION STATEMENT: Any registration statement of the
Issuer which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective
amendments, all exhibits and all material incorporated by reference in such
Registration Statement.

                                        2

<PAGE>

                  SEC:  The Securities and Exchange Commission.

                  SECURITIES ACT: The Securities Act of 1933, as amended from
time to time.

                  UNDERWRITTEN REGISTRATION or UNDERWRITTEN OFFERING: A sale
of securities of the Issuer to an underwriter for reoffering to the public.

         2.       SECURITIES SUBJECT TO THIS AGREEMENT

                  (a) REGISTRABLE SECURITIES. The securities entitled to the
benefits of this Agreement are the Registrable Securities.

                  (b) HOLDERS OF REGISTRABLE SECURITIES. A Person is deemed
to be a Holder of Registrable Securities whenever such Person owns
Registrable Securities or has the right to acquire such Registrable
Securities, whether or not such acquisition has actually been effected and
disregarding any legal restrictions upon the exercise of such right.

         3.       DEMAND REGISTRATION

                  (a) RIGHT TO DEMAND; DEMAND NOTICES.

                           (i) Subject to the provisions of this Section 3 at
any time and from time to time commencing 30 days after the date hereof, the
Investors may make a written request to the Issuer for registration under and
in accordance with the provisions of the Securities Act of all or part of the
Registrable Securities. Promptly upon receipt of any such request (but in no
event more than five business days thereafter), the Issuer will serve written
notice (the "Demand Notice") of such registration request to all Holders, and
the Issuer will include in such registration all Registrable Securities of
any Holder with respect to which the Issuer has received written requests for
inclusion therein within 10 business days after the Demand Notice has been
given to the applicable Holders. All requests made pursuant to this Section 3
will specify the aggregate amount of Registrable Securities to be registered
and will also specify the intended methods of disposition thereof.

                           (ii) Notwithstanding the foregoing clause (i), all
Apollo Holders shall only be entitled to participate in a registration
pursuant to this Section 3 (i) if such registration is the Initial Public
Offering, or (ii) if no Apollo Holder has participated in any registration
pursuant to this Agreement other than the Initial Public Offering.

                  (b) ISSUER'S RIGHT TO DEFER REGISTRATION. If the Issuer is
requested to effect a Demand Registration and the Issuer furnishes to the
Investors requesting such registration a copy of a resolution of the Board
certified by the secretary of the Issuer stating that in the good faith
judgment of the Board it would be materially adverse to the Issuer and its
securityholders for such registration statement to be filed on or before the
date such filing would otherwise be required hereunder, the Issuer shall have
the right to defer such filing for a period of not more than 90 days after
receipt of the request for such registration from such Investors. If the
Issuer shall so postpone the filing of a registration statement and if the
Investors within 30 days after receipt of the notice of postponement advise
the Issuer in writing that such Investors have

                                        3
<PAGE>

determined to withdraw such request for registration, then such Demand
Registration shall be deemed to be withdrawn and such request shall be deemed
not to have been exercised for purposes of determining whether the Holders
included in such Demand Registration are required to pay their PRO RATA
portion of the Registration Expenses pursuant to Section 3(d) hereof.

                  (c) REGISTRATION STATEMENT FORM. Registrations under this
Section 3 shall be on such appropriate registration form of the SEC (i) as
shall be selected by the Issuer and as shall be reasonably acceptable to the
Investors and (ii) as shall permit the disposition of such Registrable
Securities in accordance with the intended method or methods of disposition
specified in the Investors' request for such registration. If, in connection
with any registration under this Section 3 which is proposed by the Issuer to
be on Form S-3 or any successor form to such Form, the managing underwriter,
if any, shall advise the Issuer in writing that in its opinion the use of
another permitted form is of material importance to the success of the
offering, then such registration shall be on such other permitted form.

                  (d) EXPENSES. The Issuer will pay all Registration Expenses
in connection with the first eight (8) Demand Registrations of Registrable
Securities pursuant to this Section 3 upon the written request of the
Investors. All expenses for any subsequent Demand Registrations of
Registrable Securities pursuant to this Section 3 shall be paid PRO RATA by
the Issuer and all other Persons (including the Holders) participating in
such Demand Registration on the basis of the relative number of shares of
Common Stock of each such Person included in such registration.

                  (e) EFFECTIVE REGISTRATION STATEMENT. The Issuer shall be
deemed to have effected a Demand Registration if (i) the Registration
Statement relating to such Demand Registration is declared effective by the
SEC; PROVIDED, HOWEVER, that no Demand Registration shall be deemed to have
been effected if (x) such registration, after it has become effective, is
interfered with by any stop order, injunction or other order or requirement
of the SEC or other governmental agency or court by reason of an act or
omission by the Issuer or (y) the conditions to closing specified in the
purchase agreement or underwriting agreement entered into in connection with
such registration are not satisfied because of an act or omission by the
Issuer (other than a failure of the Issuer or any of its representatives to
execute or deliver any closing certificate by reason of facts or
circumstances not within the control of the Issuer or such representatives)
or (ii) at any time after the Investors request a Demand Registration and
prior to the effectiveness of the Registration Statement, the preparation of
such Registration Statement is discontinued or such Registration Statement is
withdrawn or abandoned at the request of the Investors unless such Investors
have elected to pay and have paid to the Issuer in full the Registration
Expenses in connection with such Registration Statement.

                  (f)      PRIORITY ON DEMAND REGISTRATIONS.

                           (i) If the Registration pursuant to this Section
3 involves an Underwritten Offering and the managing underwriter or agent of a
Demand Registration advises the Issuer that in its opinion the number of
securities requested to be included in such Demand Registration exceeds the
number which can be sold in the offering covered by such Demand Registration
without an adverse effect on the price, timing or distribution of the securities

                                        4
<PAGE>

offered, the Issuer will include in such registration only the number of
securities that, in the opinion of such underwriter or agent, can be sold
without an adverse effect on the price, timing or distribution of the
securities offered, selected PRO RATA among the Holders which have requested
to be included in such Demand Registration based upon the Registrable
Securities owned by such Holders to the extent necessary to reduce the total
amount of securities to be included in such offering to the amount
recommended by such underwriters or agent. The Issuer and other holders of
securities of the Issuer may include such securities in such Registration if,
but only if, such underwriter or agent concludes that such inclusion will not
interfere with the successful marketing of all the Registrable Securities
requested to be included in such registration.

                           (ii) Notwithstanding the foregoing clause (i), (x)
if the registration is the Initial Public Offering, and Apollo Holders have
elected to participate in such offering, then the allocation of shares to be
included in the Demand Registration among Holders shall be made as if the
Apollo Holders owned twice the number of Registrable Securities they actually
owned, and (y) if the registration is not the Initial Public Offering and
Apollo Holders have included Registrable Securities in the registration, then
the allocation of shares to be included in the Demand Registration among
Holders shall result in the Registrable Securities of Apollo Holders being
included in the registration before any shares of Registrable Securities held
by any other Holders are included in such registration.

                  (g) SELECTION OF UNDERWRITERS. If any offering pursuant to
a Demand Registration involves an Underwritten Offering, the Holders of a
majority of the Registrable Securities included in such Demand Registration
shall have the right to select the managing underwriter or underwriters to
administer the offering, which managing underwriters shall be a firm of
nationally recognized standing and reasonably satisfactory to the Issuer.

         4.       PIGGYBACK REGISTRATIONS

                  (a) PARTICIPATION.

                           (i) Subject to Sections 4(b) hereof, if at any time
after the date hereof the Issuer files a Registration Statement (other than a
registration on Form S-4 or S-8 or any successor form to such Forms or any
registration of securities as it relates to an offering and sale to management
of the Issuer pursuant to any employee stock plan or other employee benefit plan
arrangement) with respect to an offering that includes any shares of Common
Stock, then the Issuer shall give prompt notice (the "Initial Notice") to the
Investors and the Investors shall be entitled to include in such Registration
Statement the Registrable Securities held by them. If the Investors elect to
include any or all of their Registrable Securities in such Registration
Statement, then the Issuer shall give prompt notice (the "Piggyback Notice") to
each Holder (excluding the Investors) and each such Holder shall be entitled to
include in such Registration Statement the Registrable Securities held by it.
The Initial Notice and Piggyback Notice shall offer the Investors and the
Holders, respectively, the opportunity to register such number of shares of
Registrable Securities as each Investor and each Holder may request and shall
set forth (i) the anticipated filing date of such Registration Statement and
(ii) the number of shares of Common Stock that is proposed to be included in
such Registration Statement. The Issuer shall include in

                                        5
<PAGE>

such Registration Statement such shares of Registrable Securities for which
it has received written requests to register such shares within 15 days after
the Initial Notice and 7 days after the Piggyback Notice has been given.

                           (ii)     Notwithstanding the foregoing clause (i),
if the registration is the Initial Public Offering, and the Investor does not
elect to include Registrable Securities in such Registration Statement, then
the Apollo Holders may include Registrable Securities in such registration
provided that the managing underwriter or underwriters of such proposed
Initial Public Offering does not reasonably conclude that the inclusion of
such shares of Registrable Securities would have an adverse affect on the
price, timing or distribution of the securities offered in such offering.
Notwithstanding the foregoing clause (i), all Apollo Holders shall only be
entitled to participate in such registration (i) if such registration is the
Initial Public Offering, or (ii) if no Apollo Holder has participated in any
registration pursuant to this Agreement other than the Initial Public
Offering.

                  (b)      UNDERWRITER'S CUTBACK.

                           (i) Notwithstanding the foregoing, if a
Registration pursuant to this Section 4 involves an Underwritten Offering and
the managing underwriter or underwriters of such proposed Underwritten
Offering advises the Issuer that in its opinion the total or kind of
securities which such Holders and any other persons or entities intend to
include in such offering would be reasonably likely to adversely affect the
price, timing or distribution of the securities offered in such offering,
then the Issuer shall include in such Registration (x) first, 100% of the
securities the Issuer, or the Person initiating such Registration (other than
a Registration initiated pursuant to Section 3), proposes to sell, and (y)
second, to the extent of the amount of securities which all Holders have
requested to be included in such Registration, which, in the opinion of the
managing underwriter or underwriters, can be sold without such adverse effect
referred to above, such amount to be allocated PRO RATA among all Holders
based upon the relative aggregate amount of Registrable Securities owned by
such Holders..

                           (ii) Notwithstanding the foregoing clause (i), (x)
if the registration is the Initial Public Offering, and Apollo Holders have
elected to participate in such offering, then the allocation of shares to be
included in the Piggyback Registration among Holders shall be made as if the
Apollo Holders owned twice the number of Registrable Securities they actually
owned, and (y) if the registration is not the Initial Public Offering and
Apollo Holders have included Registrable Securities in the registration, then
the allocation of shares to be included in the Piggyback Registration among
Holders shall result in the Registrable Securities of Apollo Holders being
included in the registration before any shares of Registrable Securities held
by any other Holders are included in such registration.

                  (c) EXPENSES. The Issuer will pay all Registration Expenses
in connection with each registration of Registrable Securities requested
pursuant to this Section 4.

                  (d) ISSUER CONTROL. The Issuer may decline to file a
Registration Statement after giving the Initial Notice or the Piggyback Notice,
or withdraw a Registration Statement after filing and after such Notices, but
prior to the effectiveness of the Registration Statement,

                                        6

<PAGE>

provided that the Issuer shall promptly notify each Holder in writing of any
such action and provided further that the Issuer shall bear all reasonable
expenses incurred by such Holder or otherwise in connection with such
withdrawn Registration Statement.

                  (e) NO EFFECT ON DEMAND REGISTRATIONS. No registration
effected under this Section 4 shall be deemed to have been effected pursuant
to Section 3 hereof or shall relieve the Issuer of its obligation to effect
any registration upon request under Section 3 hereof.

         5.       HOLD-BACK AGREEMENTS

                  (a) RESTRICTIONS ON PUBLIC SALE BY HOLDER OF REGISTRABLE
SECURITIES. Each Holder whose Registrable Securities are covered by a
Registration Statement filed pursuant to Sections 3 or 4 hereof agrees, if
requested by the managing underwriters in an Underwritten Offering, not to
effect any public sale or distribution of securities of the Issuer the same
as or similar to those being registered, or any securities convertible into
or exchangeable or exercisable for such securities, in such Registration
Statement, including a sale pursuant to Rule 144 under the Securities Act
(except as part of such Underwritten Registration), during the 7-day period
prior to, and during the 90-day period (or such longer period of up to 180
days as may be required by such underwriter in connection with the Issuer's
Initial Public Offering) beginning on, the effective date of any Registration
Statement in which such Holders are participating (except as part of such
Registration) or the commencement of the public distribution of securities,
to the extent timely notified in writing by the Issuer or the managing
underwriters; provided, however, that the Apollo Holders agree not to effect
any public sale or distribution of such securities only in connection with
the Initial Public Offering (whether or not the Apollo Holders have
Registrable Securities included therein), during the 7-day period prior to,
and during the 90-day period beginning on the effective date of such
Registration Statement.

                  (b) RESTRICTIONS ON PUBLIC SALE BY THE ISSUER AND OTHERS.
The Issuer agrees not to effect any public sale or distribution of any
securities the same as or similar to those being registered by the Issuer, or
any securities convertible into or exchangeable or exercisable for such
securities, during the 7-day period prior to, and during the 90-day period
(or such longer period of up to 180 days as may be required by such
underwriter) beginning with, the effective date of a Registration Statement
filed under Sections 3 and 4 hereof or the commencement of the public
distribution of securities to the extent timely notified in writing by the
Investors or the managing underwriters (except as part of such registration,
if permitted, or pursuant to registrations on Forms S-4 or S-8 or any
successor form to such Forms or any registration of securities for offering
and sale to management of the Issuer pursuant to any employee stock plan or
other employee benefit plan arrangement). The Issuer agrees to use reasonable
efforts to obtain from each holder of its securities the same as or similar
to those being registered by the Issuer, or any securities convertible into
or exchangeable or exercisable for any of such securities, an agreement not
to effect any public sale or distribution of such securities (other than
securities purchased in a public offering) during such period, except as part
of any such registration if permitted.

                  (c) NO INCONSISTENT AGREEMENTS. Except with respect to the
registration rights described in Section 10 hereof, the Issuer will not enter
into any agreement with respect to its securities which is inconsistent with
the rights granted to the Holders by this Agreement.

                                        7
<PAGE>

         6.       REGISTRATION PROCEDURES

                  In connection with the Issuer's Registration obligations
pursuant to Sections 3 and 4 hereof, the Issuer will use its reasonable
efforts to effect such Registration to permit the sale of such Registrable
Securities in accordance with the intended method or methods of distribution
thereof, and pursuant thereto the Issuer will as expeditiously as possible:

                  (a) prepare and file with the SEC a Registration Statement
or Registration Statements relating to the applicable Demand Registration or
Piggyback Registration including all exhibits and financial statements
required by the SEC to be filed therewith, and use its reasonable efforts to
cause such Registration Statement to become effective; PROVIDED, that the
Issuer will furnish copies of any amendments or supplements in the form filed
with respect to any Piggyback Registration, simultaneously with the filing of
such amendments or supplements;

                  (b) prepare and file with the SEC such amendments and
post-effective amendments to the Registration Statement as may be necessary
to keep the Registration Statement effective for a period of not less than
180 days (or such shorter period which will terminate when all Registrable
Securities covered by such Registration Statement have been sold or
withdrawn), or, if such Registration Statement relates to an Underwritten
Offering, such longer period as in the opinion of counsel for the
underwriters a Prospectus is required by law to be delivered in connection
with sales of Registrable Securities by an underwriter or dealer; cause the
Prospectus to be supplemented by any required Prospectus supplement, and as
so supplemented to be filed pursuant to Rule 424 under the Securities Act;
and comply with the provisions of the Securities Act, the Exchange Act, and
the rules and regulations promulgated thereunder with respect to the
disposition of all securities covered by such Registration Statement during
the applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration Statement
or supplement to the Prospectus;

                  (c) notify the selling Holders and the managing
underwriters, if any, and (if requested) confirm such advice in writing, as
soon as practicable after notice thereof is received by the Issuer (i) when
the Registration Statement or any amendment thereto has been filed or becomes
effective, the Prospectus or any amendment or supplement to the Prospectus
has been filed, and, to furnish such selling Holders and managing
underwriters with copies thereof, (ii) of any request by the SEC for
amendments or supplements to the Registration Statement or the Prospectus or
for additional information, (iii) of the issuance by the SEC of any stop
order suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any preliminary Prospectus or Prospectus
or the initiation or threatening of any proceedings for such purposes, (iv)
if at any time the representations and warranties of the Issuer contemplated
by paragraph (m) below cease to be true and correct and (v) of the receipt by
the Issuer of any notification with respect to the suspension of the
qualification of the Registrable Securities for offering or sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose;

                  (d) promptly notify the selling Holders and the managing
underwriters, if any, at any time prior to nine months after the time of
issue of the Prospectus, when the Issuer becomes aware of the happening of
any event as a result of which the Prospectus included in

                                        8

<PAGE>

such Registration Statement (as then in effect) contains any untrue statement
of a material fact or omits to state a material fact necessary to make the
statements therein (in the case of the Prospectus and any preliminary
Prospectus, in light of the circumstances under which they were made) when
such Prospectus was delivered not misleading or, if for any other reason it
shall be necessary during such time period to amend or supplement the
Prospectus in order to comply with the Securities Act and, in either case as
promptly as practicable thereafter, prepare and file with the SEC, and
furnish without charge to the selling Holders and the managing underwriters,
if any, a supplement or amendment to such Prospectus which will correct such
statement or omission or effect such compliance;

                  (e) make every reasonable effort to obtain the withdrawal
of any stop order or other order suspending the use of any preliminary
Prospectus or Prospectus or suspending any qualification of the Registrable
Securities;

                  (f) if requested by the managing underwriter or
underwriters or a Holder of Registrable Securities being sold in connection
with an Underwritten Offering, promptly incorporate in a Prospectus
supplement or post-effective amendment such information as the managing
underwriters and the Holders of a majority of the Registrable Securities
being sold agree should be included therein relating to the plan of
distribution with respect to such Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities
being sold to such underwriters, the purchase price being paid therefor by
such underwriters and with respect to any other terms of the Underwritten (or
best efforts underwritten) Offering of the Registrable Securities to be sold
in such offering; and make all required filings of such Prospectus supplement
or post-effective amendment as soon as notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;

                  (g) furnish to each selling Holder and each managing
underwriter, without charge, one executed copy and as many conformed copies
as they may reasonably request, of the Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference);

                  (h) deliver to each selling Holder and the underwriters, if
any, without charge, as many copies of the Prospectus (including each
preliminary Prospectus) and any amendment or supplement thereto as such
Persons may reasonably request (it being understood that the Issuer consents
to the use of the Prospectus or any amendment or supplement thereto by each
of the selling Holders and the underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by the Prospectus or
any amendment or supplement thereto) and such other documents as such selling
Holder may reasonably request in order to facilitate the disposition of the
Registrable Securities by such Holder;

                  (i) on or prior to the date on which the Registration
Statement is declared effective, use its reasonable efforts to register or
qualify, and cooperate with the selling Holders, the managing underwriter or
agent, if any, and their respective counsel in connection with the registration
or qualification of such Registrable Securities for offer and sale under the
securities or blue sky laws of each state and other jurisdiction of the United
States as any such seller,

                                        9
<PAGE>

underwriter or agent reasonably requests in writing and do any and all other
acts or things reasonably necessary or advisable to keep such registration or
qualification in effect for so long as such Registration Statement remains in
effect and so as to permit the continuance of sales and dealings therein for
as long as may be necessary to complete the distribution of the Registrable
Securities covered by the Registration Statement; PROVIDED that the Issuer
will not be required to qualify generally to do business in any jurisdiction
where it in not then so qualified or to take any action which would subject
it to general service of process in any such jurisdiction where it is not
then so subject;

                  (j) cooperate with the selling Holders and the managing
underwriter or agent, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends; and enable such Registrable Securities
to be in such denominations and registered in such names as the managing
underwriters may request at least two business days prior to any sale of
Registrable Securities to the underwriters;

                  (k) use its reasonable efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriters, if
any, to consummate the disposition of such Registrable Securities;

                  (l) not later than the effective date of the applicable
Registration, provide a CUSIP number for all Registrable Securities and
provide the applicable trustee or transfer agent with printed certificates
for the Registrable Securities which are in a form eligible for deposit with
The Depository Trust Company;

                  (m) make such representations and warranties to the Holders
of Registrable Securities being registered, and the underwriters or agents,
if any, in form, substance and scope as are customarily made by issuers in
primary underwritten public offerings;

                  (n) enter into such customary agreements (including an
underwriting agreement) and take all such other actions as the majority of
the Holders of any Registrable Securities being sold or the managing
underwriter or agent, if any, reasonably request in order to expedite or
facilitate the Registration and disposition of such Registrable Securities;

                  (o) obtain for delivery to the Holders of Registrable
Securities being registered and to the underwriter or agent an opinion or
opinions from counsel for the Issuer, upon consummation of the sale of such
Registrable Securities to the underwriters (the "Closing Date") in customary
form and in form, substance and scope reasonably satisfactory to such
Holders, underwriters or agents and their counsel;

                  (p) obtain for delivery to the Issuer and the underwriter
or agent, with copies to the Holders, a cold comfort letter from the Issuer's
independent public accountants in customary form and covering such matters of
the type customarily covered by cold comfort letters as the managing
underwriter or the Holders of a majority of the Registrable Securities

                                        10

<PAGE>

being sold reasonably request, dated the effective date of the Registration
Statement and brought down to the Closing Date;

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

                  (r) make available for inspection by a representative of
the Holders of a majority of the Registrable Securities, any underwriter
participating in any disposition pursuant to such Registration, and any
attorney or accountant retained by such Holders or underwriter, all financial
and other records, pertinent corporate documents and properties of the
Issuer, and cause the Issuer's officers, directors and employees to supply
all information reasonably requested by any such representative, underwriter,
attorney or accountant in connection with such Registration; PROVIDED that
any records, information or documents that are designated by the Issuer in
writing as confidential shall be kept confidential by such Persons unless
disclosure of such records, information or documents is required by law;

                  (s) use its reasonable efforts to comply with all
applicable rules and regulations of the SEC and make generally available to
its security holders, as soon as reasonably practicable (but not more than
eighteen months) after the effective date of the Registration Statement, an
earnings statement satisfying the provisions of Section 11(a) of the
Securities Act and the rules and regulations promulgated thereunder;

                  (t) as promptly as practicable after filing with the SEC of
any document which is incorporated by reference into the Registration
Statement or the Prospectus, provide copies of such document to counsel for
the selling Holders and to the managing underwriters, if any;

                  (u) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such Registration
Statement from and after a date not later than the effective date of such
Registration Statement; and

                  (v) use its reasonable efforts to list (if such Registrable
Securities are not already listed) all Registrable Securities covered by such
Registration Statement on The New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market.

                  The Issuer may require each Holder of Registrable
Securities as to which any Registration is being effected to furnish to the
Issuer such information regarding the distribution of such securities and
such other information relating to such Holder and its ownership of
Registrable Securities as the Issuer may from time to time reasonably request
in writing. Each Holder agrees to furnish such information to the Issuer and
to cooperate with the Issuer as necessary to enable the Issuer to comply with
the provisions of this Agreement.

                  Each Holder agrees by acquisition of such Registrable
Securities that, upon receipt of any notice from the Issuer of the happening
of any event of the kind described in Section 6(d) hereof, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to

                                        11

<PAGE>

such Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 6(d) hereof, or
until it is advised in writing by the Issuer that the use of the Prospectus
may be resumed, and has received copies of any additional or supplemental
filings which are incorporated by reference in the Prospectus, and, if so
directed by the Issuer, such Holder will deliver to the Issuer (at the
Issuer's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.

         7.       REGISTRATION EXPENSES

                  All expenses incident to the Issuer's performance of or
compliance with this Agreement, including without limitation (i) all
registration and filing fees, and any other fees and expenses associated with
filings required to be made with any stock exchange, the SEC and the NASD
(including, if applicable, the fees and expenses of any "qualified
independent underwriter" and its counsel as may be required by the rules and
regulations of the NASD), (ii) all fees and expenses of compliance with state
securities or blue sky laws (including fees and disbursements of counsel for
the underwriters or selling Holders in connection with blue sky
qualifications of the Registrable Securities and determination of their
eligibility for investment under the laws of such jurisdictions as the
managing underwriters or the majority of the Holders of the Registrable
Securities being sold may designate), (iii) all printing and related
messenger and delivery expenses (including expenses of printing certificates
for the Registrable Securities in a form eligible for deposit with The
Depository Trust Company and of printing prospectuses), (iv) all fees and
disbursements of counsel for the Issuer and of all independent certified
public accountants of the Issuer (including the expenses of any special audit
and "cold comfort" letters required by or incident to such performance), (v)
Securities Act liability insurance if the Issuer so desires or the
underwriters so require, (vi) all fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange and
all rating agency fees, (vii) all reasonable fees and disbursements of one
counsel selected by the Holders of the Registrable Securities being
registered to represent such Holders in connection with such registration,
(viii) all fees and disbursements of underwriters customarily paid by the
issuers or sellers of securities, excluding underwriting discounts and
commissions and transfer taxes, if any, and fees and disbursements of counsel
to underwriters (other than such fees and disbursements incurred in
connection with any registration or qualification of Registrable Securities
under the securities or blue sky laws of any state), and (ix) fees and
expenses of other Persons retained by the Issuer (all such expenses being
herein called "Registration Expenses"), will be borne by the Issuer,
regardless of whether the Registration Statement becomes effective (except as
provided in Section 3(e) hereof). The Issuer will, in any event, pay its
internal expenses (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting duties), the
expense of any audit and the fees and expenses of any Person, including
special experts, retained by the Issuer.

         8.       INDEMNIFICATION

                  (a) INDEMNIFICATION BY ISSUER. The Issuer agrees to indemnify
and hold harmless, to the full extent permitted by law, each Holder, its
officers, directors and employees and each Person who controls such Holder
(within the meaning of the Securities Act) against all

                                        12

<PAGE>

losses, claims, damages, liabilities and expenses caused by any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, Prospectus or preliminary Prospectus or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
the same are caused by or contained in any information furnished in writing
to the Issuer by such Holder expressly for use therein; PROVIDED, HOWEVER,
that the Issuer shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or expense arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in any such preliminary Prospectus if (i) such Holder failed to
deliver or cause to be delivered a copy of the Prospectus to the Person
asserting such loss, claim, damage, liability or expense after the Issuer had
furnished such Holder with a sufficient number of copies of the same and (ii)
the Prospectus completely corrected in a timely manner such untrue statement
or omission; and PROVIDED, FURTHER, that the Issuer shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission in the Prospectus, if such untrue
statement or alleged untrue statement, omission or alleged omission is
completely corrected in an amendment or supplement to the Prospectus and the
Holder thereafter fails to deliver such Prospectus as so amended or
supplemented prior to or concurrently with the sale of the Registrable
Securities to the Person asserting such loss, claim, damage, liability or
expense after the Issuer had furnished such Holder with a sufficient number
of copies of the same. The Issuer will also indemnify underwriters, selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers and directors and each
Person who controls such Persons (within the meaning of the Securities Act)
to the same extent as provided above with respect to the indemnification of
the Holders, if requested.

                  (b) INDEMNIFICATION BY SELLING HOLDER OF UNDERLYING
SECURITIES. In connection with each Registration, each selling Holder will
furnish to the Issuer in writing such information and affidavits as the
Issuer reasonably requests for use in connection with any Registration
Statement or Prospectus and agrees to indemnify and hold harmless, to the
full extent permitted by law, the Issuer, its directors and officers and each
Person who controls the Issuer (within the meaning of the Securities Act)
against any losses, claims, damages or liabilities and expenses resulting
from any untrue statement of a material fact or any omission of a material
fact required to be stated in the Registration Statement or Prospectus or
preliminary Prospectus or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such untrue statement
or omission is contained in any information or affidavit so furnished in
writing by such selling Holder to the Issuer specifically for inclusion in
such Registration Statement or Prospectus and has not been corrected in a
subsequent writing prior to or concurrently with the sale of the Registrable
Securities to the Person asserting such loss, claim, damage, liability or
expense. In no event shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation. The Issuer shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, to the
same extent as provided above with respect to information so furnished in
writing by such Persons specifically for inclusion in any Prospectus or
Registration Statement.

                                        13

<PAGE>

                  (c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person
entitled to indemnification hereunder will (i) give prompt (but in any event
within 30 days after such Person has actual knowledge of the facts
constituting the basis for indemnification) written notice to the
indemnifying party of any claim with respect to which it seeks
indemnification and (ii) permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified party;
PROVIDED, HOWEVER, that any delay or failure to so notify the indemnifying
party shall relieve the indemnifying party of its obligations hereunder only
to the extent, if at all, that it is prejudiced by reason of such delay or
failure; PROVIDED, FURTHER HOWEVER, that any Person entitled to
indemnification hereunder shall have the right to select and employ separate
counsel and to participate in the defense of such claim, but the fees and
expenses of such counsel shall be at the expense of such Person unless (a)
the indemnifying party has agreed in writing to pay such fees or expenses, or
(b) the indemnifying party shall have failed to assume the defense of such
claim within a reasonable time after receipt of notice of such claim from the
Person entitled to indemnification hereunder and employ counsel reasonably
satisfactory to such Person or (c) in the reasonable judgment of any such
Person, based upon advice of its counsel, a conflict of interest may exist
between such Person and the indemnifying party with respect to such claims
(in which case, if the Person notifies the indemnifying party in writing that
such Person elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such claim on behalf of such Person). If such defense is not
assumed by the indemnifying party, the indemnifying party will not be subject
to any liability for any settlement made without its consent (but such
consent will not be unreasonably withheld), PROVIDED that an indemnified
party shall not be required to consent to any settlement involving the
imposition of equitable remedies or involving the imposition of any material
obligations on such indemnified party other than financial obligations for
which such indemnified party will be indemnified hereunder. No indemnifying
party will be required to consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation. Whenever the indemnified
party or the indemnifying party receives a firm offer to settle a claim for
which indemnification is sought hereunder, it shall promptly notify the other
of such offer. If the indemnifying party refuses to accept such offer within
20 business days after receipt of such offer (or of notice thereof), such
claim shall continue to be contested and, if such claim is within the scope
of the indemnifying party's indemnity contained herein, the indemnified party
shall be indemnified pursuant to the terms hereof. If the indemnifying party
notifies the indemnified Party in writing that the indemnifying party desires
to accept such offer, but the indemnified party refuses to accept such offer
within 20 business days after receipt of such notice, the indemnified party
may continue to contest such claim and, in such event, the total maximum
liability of the indemnifying party to indemnify or otherwise reimburse the
indemnified party hereunder with respect to such claim shall be limited to
and shall not exceed the amount of such offer, plus reasonable out-of-pocket
costs and expenses (including reasonable attorneys' fees and disbursements)
to the date of notice that the indemnifying party desires to accept such
offer, PROVIDED that this sentence shall not apply to any settlement of any
claim involving the imposition of equitable remedies or to any settlement
imposing any material obligations on such indemnified party other than
financial obligations for which such indemnified party will be indemnified
hereunder. An indemnifying party who is not entitled to, or elects not to,
assume the

                                        14
<PAGE>

defense of a claim will 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 in any one jurisdiction, unless in the written opinion
of counsel to the indemnified party, reasonably satisfactory to the
indemnifying party, use of one counsel would be expected to give rise to a
conflict of interest between such indemnified party and any other of such
indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of one
such additional counsel.

                  (d) OTHER INDEMNIFICATION. Indemnification similar to that
specified in this Section 8 (with appropriate modifications) shall be given
by the Issuer and each seller of Registrable Securities with respect to any
required registration or other qualification of securities under federal or
state law or regulation of governmental authority other than the Securities
Act.

                  (e) CONTRIBUTION. If for any reason the indemnification
provided for in the preceding clauses (a) and (b) is unavailable to an
indemnified party or insufficient to hold it harmless as contemplated by the
preceding clauses (a) and (b), then the indemnifying party shall contribute
to the amount paid or payable by the indemnified party as a result of such
loss, claim, damage or liability in such proportion as is appropriate to
reflect not only the relative benefits received by the indemnified party and
the indemnifying party, but also the relative fault of the indemnified party
and the indemnifying party, as well as any other relevant equitable
considerations, provided that no selling Holder shall be required to
contribute in an amount greater than the dollar amount of the proceeds
received by such selling Holder with respect to the sale of any securities.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.

         9.       RULE 144

                  Following the Initial Public Offering, the Issuer covenants
that it will file the reports required to be filed by it under the Securities
Act and the Exchange Act and the rules and regulations adopted by the SEC
thereunder, and it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such Holder
to sell Registrable Securities without registration under the Securities Act
within the limitation of the exemption provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of
any Holder, the Issuer will deliver to such Holder a written statement as to
whether it has complied with such information and requirements.
Notwithstanding anything contained in this Section 9, the Issuer may
deregister under Section 12 of the Exchange Act if it is then permitted to do
so pursuant to the Exchange Act and the rules and regulations thereunder.

         10.      ADDITIONAL PARTIES

                  The Issuer may enter into various stockholder's and stock
option agreements on or subsequent to the date hereof with certain key
employees of the Issuer or one of its subsidiaries (the "Management
Investors") pursuant to which the Management Investors will agree to purchase
and/or will receive options to purchase shares of Common Stock. Such
agreements

                                        15
<PAGE>

may provide that in the event the Issuer registers shares of Common Stock
held by the Investors, the Management Investors have the right, subject to
certain conditions, to require the Issuer to register under the Securities
Act shares of Common Stock held by them. Each of the parties hereto
acknowledges the registration rights of the Management Investors and agrees
that the Issuer's obligations under this Agreement coincide with its
obligations to the Management Investors with respect to registration rights
and that the Management Investors, subject to certain limitations, shall be
treated as Holders under this Agreement.

         11.      PARTICIPATION IN UNDERWRITTEN REGISTRATIONS

                  No Person may participate in any Underwritten Registration
hereunder unless such Person (a) agrees to sell such Person's securities on
the basis provided in any underwriting arrangements approved by the Persons
entitled to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
Nothing in this Section 11 shall be construed to create any additional rights
regarding the Registration of Registrable Securities in any Person otherwise
than as set forth herein.

         12.      MISCELLANEOUS

                  (a) REMEDIES. Remedies for breach by the Issuer of its
obligations to register the Registrable Securities shall be as set forth
herein. Each Holder, in addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The
Issuer agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of this
Agreement and hereby agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.

                  (b) AMENDMENTS AND WAIVERS. The provisions of this
Agreement, including the provisions of this sentence, may only be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may only be given if the Issuer has obtained the written
consent of the Holders of a majority of the outstanding Registrable
Securities, so long as such amendment, modification, supplement, waiver or
consent does not adversely affect the rights of Holders of Registrable
Securities hereunder unequally; PROVIDED, HOWEVER, that no amendments,
modifications, supplements, waivers or consents may be made to Sections
3(a)(ii), 3(f)(ii), 4(a)(ii), 4(b)(ii), 5 or 8(b) which is adverse to the
Apollo Holders without the consent of the Apollo Holders owning a majority of
the Registrable Securities owned by the Apollo Holders.

                  (c) NOTICES. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telex, telecopier, or air courier guaranteeing
overnight delivery:

                           (i) if to a Holder, at the most current address
given by such Holder to the Issuer in accordance with the provisions of this
Section 12(c), which address initially is, with respect to the Investors, c/o
Kohlberg Kravis Roberts & Co., 2800 Sand Hill Road, Suite 200,

                                        16
<PAGE>

Menlo Park, California 94025, Attention: Michael Michelson and with respect
to the Apollo Holder c/o Apollo Management, L.P., 1301 Avenue of the
Americas, 38th floor, New York, New York, 10019, Attention: Joshua Harris; and

                           (ii) if to the Issuer, initially at the address
set forth below and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 12(c): c/o Kohlberg
Kravis Roberts & Co., 2800 Sand Hill Road, Suite 200, Menlo Park, California
94025, Attention: Michael Michelson.

                           All such notices and communications shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; 4 business days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged
by addressee, if by facsimile transmission; and on the next business day it
timely delivered to an air courier guaranteeing overnight delivery.

                  (d) SUCCESSORS AND ASSIGNS. This Agreement including,
without limitation, all registration rights in connection with the ownership
of all or a portion of the Registrable Securities pursuant to Sections 3 and
4 hereof, shall inure to the benefit of and be binding upon the successors
and assigns of each of the parties, including, without limitation, and
without the need for an express assignment subsequent Holders of Registrable
Securities, PROVIDED, HOWEVER, that an Apollo Holder may only assign its
rights hereunder to one of its Affiliate to whom Registrable Securities are
transferred.

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

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

                  (g) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
regard to the principles of conflicts of laws.

                  (h) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.

                  (i) ENTIRE AGREEMENT. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Issuer herein.
This

                                        17

<PAGE>

Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matters.

                  (j) ADDITIONAL RIGHTS. If the Issuer at any time grants to
any other holder of Common Stock any rights to request the Issuer to effect
the Registration of any shares of Common Stock, or any "piggyback"
registration rights with respect to shares of Common Stock, on terms that are
more favorable to such holders than the terms set forth herein, then the
terms of this Agreement shall be deemed amended or supplemented to the extent
necessary to provide the Holders such more favorable rights and benefits.

                  (k) LIMITED LIABILITY OF PARTNERS. Notwithstanding any
provision hereof, none of the obligations of any Investor or Apollo Holder
under this Agreement shall be an obligation of any officer, director, member,
limited partner or general partner of such Investor or Apollo Holder or its
Affiliates. Any liability or obligation of any Investor or Apollo Holder
arising out of this Agreement shall be limited to and satisfied only out of
the assets of such Investor or Apollo Holder.

                                        18
<PAGE>

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

The Issuer:                 ALLIANCE IMAGING, INC.,
                            a Delaware corporation

                            By: /s/ RUSSELL D. PHILLIPS, JR.
                                --------------------------------
                                Name:   Russell D. Phillips, Jr.
                                Title:  Secretary

Investor:                   VIEWER HOLDING LLC,
                            a Delaware limited liability company

                            By: /s/ MICHAEL W. MICHELSON
                                --------------------------------
                                Michael W. Michelson,
                                President and Chief Executive Officer

Apollo:                     APOLLO INVESTMENT FUND III, L.P.
                            a Delaware limited partnership
                            By:  Apollo Advisors II, L.P.

                                 By:  Apollo Capital Management II, Inc.

                                      By: /s/ JOSHUA J. HARRIS
                                          ----------------------------
                                          Name:   Joshua J. Harris
                                          Title:

                            APOLLO OVERSEAS PARTNERS III, L.P.
                            a Delaware limited partnership

                            By:  Apollo Advisors II, L.P.

                                 By:  Apollo Capital Management II, Inc.

                                      By:  /s/ JOSHUA J. HARRIS
                                           -----------------------------
                                           Name:    Joshua J. Harris
                                           Title:

<PAGE>

                            APOLLO (U.K.) PARTNERS III, L.P.
                            a Delaware limited partnership

                            By:  Apollo Advisors II, L.P.

                                 By:  Apollo Capital Management II, Inc.

                                      By:  /s/ JOSHUA J. HARRIS
                                           -----------------------------
                                           Name:    Joshua J. Harris
                                           Title:

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