Document:

Exhibit
10.1

LOAN
AGREEMENT

Senior
Subordinated Promissory Note

Series I

$1,400,000.00

MADE BY
AND BETWEEN

STAR
BUFFET, INC.,

a Delaware corporation

AND

ROBERT E.
WHEATON &

SUZANNE H. WHEATON,

Dated as
of June 15, 2007

LOAN
AGREEMENT

BY
THIS AGREEMENT made and entered into as of the 15th day of June, 2007, STAR BUFFET, INC., a
Delaware corporation, whose address is 1312 N. Scottsdale Road, Scottsdale,
Arizona 85257 (hereinafter severally and collectively called “Borrower”),
and ROBERT E. WHEATON & SUZANNE H. WHEATON, whose address is 4716 East
Valley Vista Lane, Paradise Valley, Arizona 85253 (hereinafter called “Lender”),
for and in consideration of the recitals and mutual promises contained herein,
confirm and agree as follows:

SECTION 1.         RECITALS

1.0           Loan.  Borrower has applied to Lender for a term
loan in the amount of ONE MILLION FOUR HUNDRED THOUSAND AND NO/100THS DOLLARS
($1,400,000.00), upon the terms, conditions and provisions set forth herein,
for the sole purpose of providing working capital for Borrower in the ordinary
course of business.

SECTION 2.         DEFINITIONS

1.0           Defined Terms.  As used herein, the following capitalized
terms shall have the meanings specified below, unless the context otherwise
requires.

( )            Adjusted Tangible Net Worth.  Tangible net worth plus subordinated debt,
determined in accordance with GAAP, plus the amount of any reductions in
tangible net worth for non-cash charges required under Financial Accounting
Standard 144 and reserves for notes receivable.

( )            Advance.  Omitted.

( )            Affiliate.  Any person or entity (i) that directly
or indirectly controls, or is controlled by, or is under common control with,
Borrower; (ii) that directly or indirectly beneficially owns or holds five
percent (5%) or more of any class of voting stock of or membership in Borrower;
(iii) five percent (5%) or more of the voting stock of or membership in
which entity is directly or indirectly beneficially owned or held by Borrower;
(iv) that is an officer, director or manager of Borrower; (v) of
which another Affiliate is an officer, director or manager; or (vi) who is
related by blood, adoption, or marriage to another Affiliate.  The term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of an entity, whether through the ownership of voting
securities, by contract, or otherwise.

( )            Business Day.  Any day other than a Saturday, Sunday, public
holiday, or other day when commercial banks in Arizona are authorized or
required to close.

( )            Capital Expenditures.  For a period, any expenditures of money
during such period for the lease, purchase or construction of assets that are
capitalized on Borrower’s balance sheet.

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(a)           Closing.  The satisfaction of all of the conditions
precedent set forth in SECTION 5 hereof and the consummation of all of the loan
transactions contemplated by this Loan Agreement.

( )            Closing Date.  The date, on or before June 15, 2007, on
which the Closing occurs.

( )            Commitment.  As defined in Paragraph 3.1 hereof.

( )            Compliance Certificate. A
certification of compliance in the form attached hereto as Exhibit “A.”

( )            CPLTD.  The amount of principal payments on long term
debt and the amount of capitalized leases that are to be paid within one year.

( )            Disbursement Account.  Omitted.

( )            EBITDA.  Pretax earnings from continuing operations
plus interest expense, depreciation and amortization, impairment of long-lived
assets and reserves for notes receivable, computed and calculated in accordance
with GAAP calculated on a rolling four (4) quarter basis.

( )            Environmental Law.  Any federal, state or local statute,
ordinance, or regulation pertaining to health, industrial hygiene, or the
environment, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C.
Section 9601, et  seq. (“CERCLA”); the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901, et  seq.
(“RCRA”); and the Arizona Environmental Quality Act, Title 49, Arizona
Revised Statutes, and all rules adopted and guidelines promulgated pursuant to
the foregoing.

( )            ERISA.  The Employee Retirement Income Security Act
of 1974, as amended and as in effect from time to time.

(b)           Event of Default.  As defined in Paragraph 1.0 hereof.

( )            Facility.  Any real property and improvements owned or
occupied by Borrower in the conduct of its business.  

( )            Fixed Charge Coverage.  The ratio of (a) EBITDA, less cash taxes and
maintenance Capital Expenditures plus rent expense, to (b) CPLTD, plus interest
expense plus rent expense calculated on a rolling four (4) quarter basis.

( )            GAAP.  Those generally accepted accounting
principles and practices that are recognized as such by the American Institute
of Certified Public Accountants acting through its Accounting Principles Board
or by the Financial Accounting Standards Board or through other appropriate
boards or committees thereof and which are consistently applied for all periods
after the date thereof so as to properly reflect the financial condition, and
the results of operations and changes in the financial position, of Borrower.

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( )            Hazardous
Substance:  Includes:

( )                                     those
substances included within the definitions of “hazardous substances,” “hazardous
materials,” “toxic substances,” or “solid waste” in CERCLA, RCRA, and the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.,
and in the regulations promulgated pursuant thereto;

( )                                     those
substances defined as “hazardous substances” in A.R.S. Section 49-201
and in rules adopted or guidelines promulgated pursuant thereto;

( )                                     those
substances listed in the United States Department of Transportation Table (49
CFR 172.101 and amendments thereto) or by the Environmental Protection Agency
as hazardous substances (40 CFR Part 302 and amendments thereto); and

( )                                     all
other substances, materials and wastes that are, or that become, regulated
under, or that are classified as hazardous or toxic under, any Environmental
Law.

( )            Indebtedness.  The total outstanding indebtedness owed
Lender by Borrower under or in connection with the Loan, including principal
and interest accrued but not previously paid.

( )            Lien.  Any lien, mortgage, security interest, tax
lien, pledge, encumbrance, conditional sale or title retention arrangement, or
any other interest in property designed to secure the payment of any
indebtedness or performance of any obligation, whether arising by agreement or
under any statute or law, or otherwise.

( )            Loan Documents.  This Agreement, the Note and all other
documents now or hereafter executed or delivered in connection with the Loan.

(c)           Loan.  As defined in Paragraph 1.0 hereof.

( )            Long Term Debt.  Financing that has a maturity of greater than
one year.

(y)           Maintenance
Capital.  Expenditures defined by
GAAP to be capitalized that are necessary to maintain the operations of the
existing restaurants.

(z)            Material Adverse Effect.  Any event or condition that either
(i) would have a material adverse effect upon the validity, performance or
enforceability of this Agreement, or any of the other Loan Documents,
(ii) is material and adverse to the properties, financial condition,
credit or business operations and prospects of Borrower or any Subsidiary,
(iii) would impair the ability of Borrower to fulfill its obligations
under this Agreement, or any of the other Loan Documents, or (iv) causes
an Event of Default or an event or condition that with notice or lapse of time
or both, would become an Event of Default.

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( )            Termination Date.  Shall mean June 5, 2012; provided, however,
upon the request of Borrower, such date may be extended in writing by Lender in
its sole and absolute discretion.

(d)           Note.  As defined in Paragraph 2.0 hereof.

( )            Obligations.  Any and all of the representations,
warranties, covenants and other obligations made or undertaken by Borrower in
this Agreement or in any of the other Loan Documents.

( )            PBGC.  The Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.

( )            Permitted Liens.  (i) Liens granted to Lender;
(ii) existing Liens approved by Lender and listed on Exhibit “B” hereto,
(iii) future Liens approved in writing by Lender in its sole discretion;
(iv) Liens for taxes, assessments and other governmental charges that are
not past due or delinquent; (v) Liens imposed by law, such as mechanics’ liens,
arising in the ordinary course of business and that secure payments not yet
due; (vi) Mortgage Liens secured by a Facility where Lender has been notified
in writing in advance of such lien being recorded; and (vii) Liens on other
assets to the extent that such Liens secure financing for the acquisition of
that asset.

( )            Plan.  Each pension, profit sharing, stock bonus,
thrift, savings, and employee stock ownership plan established or maintained,
or to which contributions have been made, by Borrower or any trade or business
which together with Borrower would be treated as a single employer under ERISA.

( )            Primary Lender.  M&I Marshall & Ilsley Bank.

( )            SEC.  The United States Security and Exchange
Commission.

( )            Subsidiary.  Any corporation fifty percent (50%) or more
of which is owned, directly or indirectly, by Borrower.

( )            Total Funded Debt.  All financings, capitalized lease obligations
and outstanding letters of credit.

(kk)         Total
Funded Debt to EBITDA.  The ratio
Total Funded Debt to EBITDA calculated on a rolling four (4) quarter basis.

2.0           Other Terms.  All accounting and financial terms used and
not otherwise defined in this Agreement shall have the meanings accorded them
under GAAP.

SECTION 3.         LOAN

1.0           Loan.  Subject to the conditions herein set forth,
Lender agrees to loan to or for the benefit of Borrower, and Borrower agrees to
borrow, in the manner and upon the terms and conditions herein expressed,
amounts that shall not exceed at any time the Commitment (the “Loan”).  The “Commitment” shall be the
principal sum of $1,400,000.00.

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2.0           Note.  The Loan shall be evidenced by a promissory
note of Borrower, executed and delivered simultaneously with the execution of
this Agreement, in the amount of the $1,400,000.00 payable to Lender upon the
terms and conditions contained therein (the “Note”).

3.0           Advances.  Omitted.

4.0           Readvances.  Omitted.

5.0           Other Disbursements by Lender.  Lender, from time to time in its sole
discretion, may make disbursements in payment of interest accrued and payable
upon the Loan and any charges and expenses that are the obligation of Borrower
under this Agreement or any of the other Loan Documents and any charges or matters
necessary to cure any Event of Default, all of which shall be added to and be
part of the Indebtedness.

6.0           Repayment.  Borrower, from time to time, may repay the
Loan in whole or in part at any time, without penalty, provided that any
repayment complies with terms then in effect between borrow and Primary
Lender.  Borrower shall immediately repay
to Lender, from time to time, an amount equal to any amount by which the
outstanding principal balance of the Loan exceeds the Commitment.

7.0           Termination.  The entire outstanding principal balance, all
accrued and unpaid interest, and all other sums payable in connection with the
Loan shall be due and payable on that date.

8.0           Application of Payments.  So long as no Event of Default exists, all
payments shall be applied first to the payment of any costs, fees and other
charges incurred in connection with the Loan, next to the payment of any
accrued interest and then to the reduction of the principal balance.  Upon the occurrence and during the
continuation of any Event of Default, all payments shall be applied by Lender
to the Indebtedness and Obligations in such order and manner as Lender shall
determine in its sole and absolute discretion. 
All payments shall be applied to the Indebtedness and Obligations only
when received in immediately available funds.

9.0           Prior Performance.  Although Lender shall have no obligation to
make any Advance unless and until all of the requirements and conditions
precedent set forth herein have been satisfied, Lender, at its sole discretion,
may make any Advance prior to that time without waiving or releasing any of the
requirements or conditions precedent of this Agreement; Borrower shall continue
to be strictly obligated to perform, and shall be subject to, all such requirements
and conditions notwithstanding any such disbursement.

10.0         Right to Advance.  Omitted.

SECTION 4.         LOAN
FEE

1.0           Loan Fee.  Omitted.

2.0           Commitment Fee.  Omitted.

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SECTION 5.         CONDITIONS
PRECEDENT FOR CLOSING

The
obligation of Lender to make the Loan, and to make any Advance at Closing, is
subject to the following express conditions precedent, all of which shall have
been satisfied prior to Closing:

1.0           Documents Required.  Borrower shall have executed (or obtained the
execution or issuing of) and delivered to Lender the following documents, all
in form satisfactory to Lender:

( )            This Agreement

( )            The Note

2.0           Loan Fee.  Omitted.

3.0           Items Required.  Borrower, at its expense, shall have obtained
and delivered to Lender the following items, all of which shall be in form and
content satisfactory to Lender and shall be subject to approval in writing by
Lender:

( )            A copy of the articles of
incorporation and bylaws of Borrower and each Subsidiary, including all
amendment thereto, certified by the secretary of Borrower or each Subsidiary,
as appropriate, as being true, complete and correct as of the date of
certification.

( )            Certificates of good standing for
Borrower and each Subsidiary issued by the Secretary of State of the state of
incorporation of that corporation.

( )            Resolutions of Borrower approving
the execution, delivery and performance of this Agreement and the other Loan
Documents and the transaction contemplated thereby, duly adopted by Borrower’s
board of directors and accompanied by a certificate of the Secretary of
Borrower stating that such resolutions are true and correct and are in full
force and effect.

( )            A signed certificate of the
secretary of Borrower which shall certify the names of the officers of Borrower
authorized to sign each of the Loan Documents, together with the true signature
of each such officer.

4.0           Representative and Warranties True.  All representations and warranties by
Borrower shall remain true and correct in all material respects and all
agreements that Borrower is to have performed or complied with by the date
hereof shall have been performed or complied with.

5.0           No Default.  No Event of Default exists, and no event has
occurred and no condition exists that, after notice or lapse of time, or both,
would constitute an Event of Default.

SECTION 6.         ADDITIONAL
CONDITIONS

The
obligation of Lender to make the Loan shall be subject to the following
additional conditions precedent, all of which shall have been satisfied and
remain satisfied at the time of each Advance of the Loan:

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1.2           Prior Conditions.  All of the conditions precedent provided in
SECTION 5 hereof shall have been satisfied.

2.0           Request for Advance.  Omitted.

3.0           Representatives and Warranties
True.  All representations and
warranties by Borrower shall remain true and correct in all material respects
and all agreements that Borrower is to have performed or complied with by the
date of the requested Advance shall have been performed or complied with.

4.0           No Default.  No Event of Default exists, and no event has
occurred and no condition exists that, after notice or lapse of time, or both,
would constitute an Event of Default.

SECTION 7.         REPRESENTATIONS
AND WARRANTIES

Borrower
represents and warrants to Lender as follows:

1.0           Recitals True.  The recitals appearing in this Agreement are
true and correct.

2.0           Organization and Good Standing.  Borrower and each Subsidiary is a corporation
duly organized, validly existing and in good standing under the laws of the
state of its incorporation and is qualified to do business and is in good
standing in each state in which the nature of its business and property makes
such qualification necessary or appropriate.

3.0           Power and Authority.  Borrower and each Subsidiary has full power
and authority to own its properties and assets and to carry on its business as
now being conducted.  Borrower has full
power and authority to execute, deliver and perform this Agreement and the
other Loan Documents to which Borrower is a party.

4.0           Authorization.  Borrower is fully authorized and permitted to
enter into this Agreement, to execute any and all documentation required
herein, to borrow the amounts contemplated herein upon the terms set forth
herein, and to perform the terms of this Agreement.

5.0           No Breach or Default as to
Borrower.  The execution, delivery
and performance by Borrower of this Agreement and the other Loan Documents to
which it is a party will not conflict with or result in a default under:  (i) any law, rule or regulation
applicable to Borrower, (ii) the organizational documents of Borrower, or
(iii) the terms, conditions or provisions of any agreement or instrument
under which Borrower is a party or is obligated.

6.0           Enforceable Obligations.  This Agreement and each of the other Loan
Documents to which Borrower is a party are valid and binding legal obligations
of Borrower and each is enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency or other laws of general application relating
to the enforcement of creditors’ rights.

7.0           No Liens.  Except for Permitted Liens, all of the
properties and assets of Borrower and its Subsidiaries are free and clear of
all Liens and other adverse claims of any nature, and such corporations have
good and marketable title to such properties and assets.

 7
 

8.0           No Adverse Proceedings.  No actions, suits or proceedings are pending
or, to the knowledge of Borrower, threatened against Borrower or any Subsidiary
that could result in a Material Adverse Effect. 
Neither Borrower nor any Subsidiary is in default with respect to any
order, writ, injunction or decree, of any court, governmental department,
commission, board, agency or official, which default could result in a Material
Adverse Effect.  No actions, suits or
proceedings are pending or threatened against Borrower or any Subsidiary other
than as set forth in Exhibit ”C.”

9.0           Licenses; Permits; Agreements.  Borrower and its Subsidiaries have obtained,
and there remains in full force and effect, all licenses, permits, rights,
approvals and agreements necessary or appropriate for the operation of their
respective businesses.  Neither Borrower
nor any Subsidiary is in default under any material agreement to which it is a
party or by which it or any of its properties is bound.

10.0         Compliance with Laws.  Borrower and each of its Subsidiaries are in
compliance with all material laws, rules, regulations, orders and decrees that
are applicable to Borrower or any Subsidiary, or its or their properties.

11.0         No Violation of Environmental Laws.  To the best of their respective knowledge,
neither Borrower nor any Subsidiary, nor any Facility owned by them or any
Affiliate thereof, is in violation of any Environmental Law and neither
Borrower or any Subsidiary, nor any Facility owned by them or any Affiliate
thereof is subject to any existing, pending or, to the best of their respective
knowledge, threatened investigation by any federal, state or local governmental
authority under or in connection with any Environmental Law.  Borrower has not obtained as the result of
the requirements of any Environmental Law, and is not required by any
Environmental Law to obtain, any permit or license to construct or use any
improvements, fixtures or equipment that are a part of, or are located on, any
Facility or to operate any business that is being conducted or intended to be
conducted on any Facility.  Borrower has
not caused or permitted the Release of, or has any knowledge of the Release or
presence of, any Hazardous Substance on any Facility or the migration of any
Hazardous Substance from or to any other property adjacent to, or in the
vicinity of, any Facility.  Borrower’s
prior and present use of each Facility has not resulted in, and its future use
of each Facility will not result in, the Release of any Hazardous Substance on
the Facility.

12.0         Statements Correct.  All financial statements, profit and loss
statements, statements as to ownership and other statements or reports
previously or hereafter given to Lender by or on behalf of Borrower and its
Subsidiaries are and shall be true, complete and correct in all material
respects as of the date thereof.  There
has been no change since the latest financial statements of Borrower and its
Subsidiaries given to Lender that could have a Material Adverse Effect.  There is no material fact that Borrower has
not disclosed to Lender that would have a Material Adverse Effect.

13.0         Tax Returns Filed.  Borrower and its Subsidiaries have properly
prepared, executed and filed (unless an extension of time has been granted by
the proper authorities) all federal, state and local tax returns required by
law and has paid all of its respective current obligations before delinquent,
including all federal, state and local taxes and all other payments required
under federal, state or local law.

14.0         No Margin Security.  Borrower does not own any “margin security”
as that term is defined in Regulation U of the Board of Governors of the
Federal Reserve System except 

 8
 

amounts thereof that do not and will not in the
aggregate constitute a substantial part of Borrower’s assets.

15.0         ERISA Compliance.  Borrower is in compliance in all material
respects with all applicable provisions of ERISA.  Neither a “reportable event” as defined in
ERISA nor a “prohibited transaction” as set forth in ERISA or in the Internal
Revenue Code has occurred and is continuing with respect to any Plan.  No notice of intent to terminate a Plan has
been filed nor has any Plan been terminated; no circumstances exist that
constitute grounds under ERISA entitling PBGC to institute proceedings to
terminate, or appoint a trustee to administer, a Plan, nor has the PBGC
instituted any such proceedings. 
Borrower is not a party to, and has no employees who are covered by, a
multi-employer pension or benefit plan. 
Borrower has met its minimum funding requirements under ERISA with
respect to each Plan and the present value of all vested benefits under each
Plan did not exceed the fair market value of all Plan assets allocable to such
benefits, as determined on the most recent valuation date of ERISA for
calculating the potential liability of Borrower to the PBGC or the Plan under
ERISA.  Borrower has not incurred any
liability to the PBGC under ERISA.

16.0         Principal Office.  The principal office of Borrower is at
Borrower’s address at 1312 North Scottsdale Road, Scottsdale, Arizona
85257.  Borrower maintains its principal
books and records at that address.

17.0         Subsidiaries.  Borrower does have Subsidiaries.

18.0         Affirmation.  Each request by Borrower for an Advance shall
constitute an affirmation on the part of Borrower that the representations and
warranties contained herein are true and correct in all material respects as of
the time of such request and that the conditions precedent for that Advance
have been satisfied.

19.0         Survival.  All representations and warranties made
herein shall survive the execution of this Agreement, all Advances, and the
execution and delivery of all other Loan Documents, so long as Lender has any
commitment to lend to Borrower hereunder and until the Indebtedness has been
fully paid and all of the Obligations have been fully performed.

SECTION 8.         AFFIRMATIVE
COVENANTS

Until
the Indebtedness as been fully paid and all of the Obligations have been fully
performed:

1.0           No Change in Documents.  Borrower shall, and shall cause each of its
Subsidiaries to, maintain its corporate existence with no material amendments
or changes in its organizational documents without the prior written approval
of the Lender, which consent shall not be unreasonably withheld.

2.0           Licenses, Permits; Agreements.  Borrower shall, and shall cause each of its
Subsidiaries, to comply with and maintain in full force and effect all
licenses, permits, rights, approvals and agreements necessary or desirable to
conduct its business and to comply with its obligations under this Agreement
and the other Loan Documents.

 9

3.0           Maintain Business.  Borrower shall, and shall cause each of its
Subsidiaries, to act prudently and in accordance with customary industry
standards in managing and operating its properties, assets and business.  Borrower shall, and shall cause each of its
Subsidiaries, to keep all of its properties in good condition and repair
(subject to ordinary wear and tear) and shall make all needed and proper
repairs and improvements to its properties in order to properly conduct its
business.

4.0           Comply With Laws.  Borrower shall comply in all material
respects with all applicable laws, including without limitation, all applicable
Environmental Laws.  Borrower will not,
and will not permit any third party to, use, generate, manufacture, produce,
store, or Release on, under or about any Facility, or transfer to or from any
Facility, any Hazardous Substance except in compliance with all applicable
Environmental Laws.

5.0           Management.  Borrower shall, and shall cause each of its
Subsidiaries, to at all times hire and retain executive and management
personnel adequate for the proper management, supervision and conduct of its
business, operations and properties.

6.0           Maintain Insurance.  Borrower shall at all times maintain
insurance with responsible and reputable insurers in such amounts and against
such risks as may from time to time be required by Lender, but in all events in
such amounts and against such risks, including public liability, property
damage and worker’s compensation insurance, as is usually carried by companies
engaged in similar business and owning properties in the same general areas in
which Borrower operates.

7.0           Loan Payments.  Borrower shall make all payments of interest
and principal on the Loan and shall keep and comply with all terms, conditions
and provisions of the Loan Documents.

8.0           Pay Obligations.  Borrower shall pay all of its current
obligations before they become delinquent, including all federal, state and
local taxes, assessments, levies and governmental charges and all other
payments required under any federal, state or local law.

9.0           Statements and Reports.  Borrower shall maintain a standard, modern
system of accounting that reflects the application of GAAP, consistently
applied, and shall furnish to Lender the following:

( )            Omitted.

( )            Omitted.

( )            Omitted.

( )            Omitted.

( )            Omitted.

( )            Omitted.

 10
 

10.0         Records.  Borrower shall maintain, in a safe place,
proper and accurate books, ledgers, correspondence and other records relating
to its operations and business affairs.

11.0         No Margin Security.  Borrower shall not use any proceeds of the
Loan, or any proceeds of any other or future loan from Lender to Borrower,
directly or indirectly, to purchase or carry any “margin security” as that term
is defined in Regulation U of the Board of Governors of the Federal
Reserve System or to reduce or retire any indebtedness undertaken for such
purposes within the meaning of said Regulation U, and will not use such
proceeds in a manner that would cause Borrower to be in violation of Regulation
G, T, or X of such Board, nor use such proceeds for any purpose
not permitted by Section 7 of the Securities Exchange Act of 1934, as
amended, or any of the rules or regulations respecting the extensions of credit
promulgated thereunder.

12.0         Further Assurance.  Borrower shall execute and deliver such
additional documents and do such other acts as Lender may reasonably require in
connection with this Loan.

SECTION 9.         NEGATIVE
COVENANTS

Until the Indebtedness as
been fully paid and all of the Obligations have been fully performed, without
receiving the prior written consent of Lender, Borrower shall not, and shall
not permit any Subsidiary to:

1.0           Incur Debt.  Become or remain obligated either directly or
as a guarantor or surety for any indebtedness for borrowed money or for any
indebtedness incurred in connection with the acquisition of any property, real
or personal, tangible or intangible, except:

( )            Indebtedness to Primary Lender;

( )            Indebtedness to Lender;

( )            Indebtedness secured by Permitted
Liens;

( )            Current liabilities for taxes and
assessments incurred in the ordinary course of business; unsecured trade,
utility or non-extraordinary accounts payable arising in the ordinary
course of its business;

( )            Real estate debt in connection with
the purchase of restaurant properties.

2.0           Negative Pledge.  Create or permit to be created or exist any
Lien on any of its property or assets which it now owns or hereafter acquires
except Permitted Liens.

3.0           Loans.  Make any loan, advance, extension of credit,
or gift to any person or entity except items not to exceed $10,000.00 in the
aggregate for Borrower and all Subsidiaries in any fiscal year.

4.0           Investments.  Omitted.

5.0           Dissolution; Management Change.  Dissolve or liquidate, or merge or
consolidate with or into any other entity; sell, transfer, lease or otherwise
dispose of all or any substantial 

 11
 

part of its property, assets or business; or, turn
over the management or operation of its property, assets or business to any
other person, firm or corporation or make any other material change in its
management or operations.

6.0           Fiscal Year.  Change the times of commencement or
termination of its fiscal year or other accounting periods; or change its
methods of accounting other than to conform to GAAP.

7.0           Guarantees.  Guarantee, directly or indirectly, or
otherwise become contingently liable or obligated for, any indebtedness or
obligation of any other person or entity except for the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection.

8.0           Dividends.  Omitted.

9.0           Acquisitions.  Omitted.

10.0         Nature of Business.  Engage in any line of business materially
different from that in which it is presently engaged, or purchase, lease or
otherwise acquire assets not related to the operation of its business.

11.0         Capital Expenditures.  Omitted.

12.0         Salaries.  Pay excessive or unreasonable salaries,
bonuses, commissions or other compensation; or increase the salary, bonus,
commissions or other compensation of any director, officer, or consultant, or
any member of their families, by more than 20% in any one fiscal year, either
individually or in the aggregate for all such persons.

13.0         Financial Covenants.  For Borrower and its Subsidiaries, on a
combined basis, as determined as of end of each fiscal quarter from the
financial statements included in Borrower’s Form 10K and Form 10-Qs filed with
the SEC, permit:

( )            Adjusted Tangible Net Worth to be
less than $17,000,000.00.

( )            The ratio of Total Funded Debt to
EBITDA to be greater than 2.75 to 1.0.

( )            The Fixed Charge Coverage to exceed
1.00 to 1.00.

All computations
made to determine compliance with the requirements contained in this paragraph
shall be made in accordance with GAAP and shall be certified as true and
correct by Borrower.

SECTION 10.       WAIVER

1.0           Notice Waivers.  Borrower waives presentment, demand, protest
and notices of protest, nonpayment, partial payment and all other notices and
formalities except as expressly called for in this Agreement or in the Note.  Borrower consents to and waives notice of:
(i) the granting of indulgences or extensions of time of payment, (ii) the
taking or releasing of security, and (iii) the addition or release of persons
who may be or become primarily or secondarily liable 

 12
 

on or with respect to the Indebtedness or any part
thereof, and all in such manner and at such time as Lender may deem advisable.

2.0           No Waivers By Lender.  No delay or omission by Lender in exercising
any right, power or remedy hereunder, and no indulgence given to Borrower, with
respect to any term, condition or provision set forth herein, shall impair any
right, power or remedy of Lender under this Agreement, or be construed as a
waiver by Lender of, or acquiescence in, any Event of Default.  Likewise, no such delay, omission or
indulgence by Lender shall be construed as a variation or waiver of any of the
terms, conditions or provisions of this Agreement.  Any actual waiver by Lender of any Event of
Default shall not be a waiver of any other prior or subsequent Event of Default
or of the same Event of Default after notice to Borrower demanding strict
performance.

SECTION 11.       DEFAULT

1.0           Events of Default.  The occurrence of any of the following events
or conditions shall constitute an “Event of Default” under this Agreement:

( )            Any failure to pay any interest or
principal or any other part of the Indebtedness when the same becomes due and
payable.

(a)           Any failure or neglect to perform or
observe any of the terms, provisions, conditions or covenants of this Agreement
or any other Loan Document, other than those referred to in the other
provisions of this Paragraph 1.0, and such failure or neglect either
(i) cannot be remedied,  (ii) can be
remedied within fifteen (15) days by prompt and diligent action, but it
continues unremedied for a period of fifteen (15) days after notice thereof to
Borrower, or (iii) can be remedied, although not within fifteen (15) days even
by prompt and diligent action, but such remedy is not commenced within fifteen
(15) days after notice thereof to Borrower or is not diligently prosecuted to
completion within a total of thirty (30) days from the date of such notice.

( )            Any warranty, representation or
statement contained in this Agreement, in the Note, in any other Loan Document,
or made or furnished to Lender by or on behalf of Borrower that shall be or
shall prove to have been false or misleading in any material respect as of the
time made or furnished.

( )            The filing by Borrower or any
Subsidiary of any proceeding under the federal bankruptcy laws now or hereafter
existing or any other similar statute now or hereafter in effect; or the entry
of an order for relief under such laws with respect to Borrower or any
Subsidiary.

(b)           The commencement of any proceeding
described in subparagraph 4.0( )above against Borrower or any Subsidiary
unless dismissal of such proceeding is promptly sought and diligently
prosecuted and such proceeding is in fact dismissed within sixty (60) days from
the date of such commencement; the acquiescence by Borrower or such Subsidiary
to such proceedings; or the appointment of a receiver, trustee, custodian or
conservator for all or any part of the assets of Borrower or any Subsidiary.

 13
 

( )            The insolvency of Borrower or any
Subsidiary; or the execution by Borrower or any Subsidiary of an assignment for
the benefit of creditors; or the convening by Borrower or any Subsidiary of a
meeting of its creditors, or any class thereof, for purposes of affecting a
moratorium upon or extension or composition of its debts; or the failure of Borrower
or any Subsidiary to pay its debts as they mature; or if Borrower or any
Subsidiary is generally not paying its debts as they mature.

( )            The admission in writing by Borrower
or any Subsidiary that it is unable to pay its debts as they mature or that it
is generally not paying its debts as they mature.

( )            The liquidation, termination or
dissolution of Borrower or any of its Subsidiaries.

( )            Any final judgment for the payment
of money in excess of $500,000.00 (other than a judgment covered by insurance
where coverage has been acknowledged by the insurer) is entered against
Borrower or any Subsidiary and such judgment is not satisfied or discharged
with thirty (30) days after the entry thereof.

( )            The existence or the filing of any
Lien, other than Permitted Liens, in excess of $500,000.00 against any property
or assets of Borrower or any Subsidiary that is not removed, released, bonded
or stayed to the satisfaction of Lender within thirty (30) days after its
creation.

( )            Any levy or execution upon, or
judicial seizure of, any property of Borrower or any Subsidiary that has a fair
market value in excess of $250,000.00.

( )            The entry of any judgment, order or
decree, or any other type of adverse ruling, against Borrower or any Subsidiary
that could have a Material Adverse Effect.

( )            The abandonment by Borrower or any
Subsidiary of all or any material part of its property or assets.

( )            The loss, theft or destruction of,
or any substantial damage to, any material part of the property of Borrower or
any Subsidiary that is not adequately covered by insurance.

( )            The occurrence of any event or
condition, that with the giving of notice or passage of time, or both, could
result in a material default by Borrower under any other contract, loan,
obligation or agreement of any kind to which Borrower is a party that results
in a Material Adverse Effect.

( )            The issuance of any order or decree
enjoining or prohibiting Lender or Borrower from performing under this
Agreement or any of the other Loan Documents, which order or decree is not
vacated within fifteen (15) days after the granting thereof.

( )            The occurrence of any default under
any of the other Loan Documents that is not cured within any period for cure
set forth therein.

(c)           Any failure or neglect to satisfy any
of the financial covenants set forth in Paragraph 12.0 hereof which
failure or neglect is not fully remedied and cured by the end of the next
calendar month.

 14
 

( )            The occurrence of any event or
condition that Lender, in its reasonably judgment, believes results in a
Material Adverse Effect.

1.3           Remedies.  Upon the occurrence of any Event of Default,
and at any time thereafter while such Event of Default is continuing, Lender
may do one or more of the following [except that in the case of an Event of Default
described in subparagraphs 4.0( ) through 7.0( ) above relating to
Borrower, acceleration shall be automatic]:

( )            Declare the entire Loan and the rest
of the Indebtedness immediately due and payable, without notice or demand.

( )            Proceed to protect and enforce its
rights under this Agreement, the Note and all other Loan Documents.

( )            Avail itself of any other relief to
which Lender may be legally or equitably entitled.

3.0           Payment of Costs.  Borrower shall pay all costs and expenses
including, without limitation, court costs and reasonable attorneys’ fees
incurred in enforcing payment of the Indebtedness and performance of the
Obligation or in exercising the rights and remedies of Lender hereunder.  In the event of any court proceedings, court
costs and reasonable attorneys’ fees shall be set by the court and not by jury
and shall be included in any judgment obtained by Lender.

4.0           Right to Pay and Perform.  If Borrower shall fail to pay any amount as
required herein or in any of the other Loan Documents, to satisfy any
requirement hereof or of any of the other Loan Documents, or to perform
otherwise as required herein or in any of the other Loan Documents, Lender may
advance the moneys necessary to pay the same, to satisfy such requirements or
to so perform.

5.0           No Prejudice to Lender.  No failure on the part of Lender to exercise
any of its rights hereunder arising upon any Event of Default shall be
construed to prejudice its rights upon the occurrence of any other or
subsequent Event of Default.  No delay on
the part of Lender in exercising any such rights shall be construed to preclude
it from the exercise thereof at any time during the continuance of that Event
of Default.  Lender may enforce any one
or more remedies or rights hereunder successively or concurrently.  By accepting payment of any of the
Indebtedness or performance of any of the Obligation after its due date, Lender
shall not thereby waive the agreement contained herein that time is of the
essence, nor shall Lender waive either its right to require prompt payment when
due of the remainder of the Indebtedness or performance when due of the
remainder of the Obligation or its right to consider the failure to so pay or
perform an Event of Default.

SECTION 12.       ACTION
UPON AGREEMENT

1.0           No Third Party Beneficiaries.  This Agreement is made for the sole
protection and benefit of the parties hereto and no other person or
organization shall have any right of action hereon or be a third party
beneficiary hereof.

2.0           Entire Agreement.  This Agreement, together with the documents
and instruments referred to herein, embodies the entire Agreement of the
parties with regard to the 

 15
 

subject matter hereof. 
There are no representations, promises, warranties, understandings or
agreements expressed or implied, oral or otherwise, in relation thereto, except
those expressly referred to or set forth herein.  Borrower acknowledges that the execution and
delivery of this Agreement is its free and voluntary act and deed, and that
said execution and delivery have not been induced by, nor done in reliance
upon, any representations, promises, warranties, understandings or agreements
made by Lender, its agents, officers, employees or representatives, other than
as set forth herein.

3.0           Changes in Writing.  No promise, representation, warranty or
agreement made subsequent to the execution and delivery of this Agreement by
either party hereto, and no revocation, partial or otherwise, or change,
amendment or addition to, or alteration or modification of, this Agreement shall
be valid unless the same shall be in writing signed by all parties hereto.

4.0           Separate Entities.  Lender and Borrower have separate and
independent rights and obligations under this Agreement.  Nothing contained herein shall be construed
as creating, forming or constituting any partnership, joint venture, merger or
consolidation of Lender and Borrower for any purpose or in any respect.

SECTION 13.       GENERAL

1.0           Agreement to Continue.  This Agreement, and the representations,
warranties, and covenants contained herein shall survive the making of the Loan
and shall remain in full force and effect until the Indebtedness as been fully
paid and all of the Obligations have been fully performed.

2.0           Lender’s Investigations.  Borrower shall be solely responsible for all
aspects of Borrower’s business and activities. 
Any investigation or review by Lender or its counsel shall be solely for
Lender’s benefit, including to determine whether Borrower is properly
discharging its obligations to Lender, and may not be relied upon by Borrower
or any third party.  Neither Lender, nor
Lender’s counsel, owes any duty of care to Borrower or to any third party to
protect against, or to inform Borrower or any third party of, any matters
disclosed by any investigation or review by Lender or its counsel.

3.0           Rights to Protect Lender.  All rights, powers and remedies granted
Lender herein, or otherwise available to Lender, are for the sole benefit and
protection of Lender, and Lender may exercise any such right, power or remedy
at its option and in its sole and absolute discretion without any obligation to
do so.  In addition, if, under the terms
hereof, Lender is given two or more alternative courses of action, Lender may
elect any alternative or combination of alternatives, at its option and in its
sole and absolute discretion.  All monies
advanced by Lender under the terms hereof and all amounts paid, suffered or
incurred by Lender in exercising any authority granted herein, including
reasonable attorneys’ fees, shall bear interest at the highest rate payable on
any of the Indebtedness until paid, and shall be due and payable by Borrower to
Lender immediately without demand.

4.0           Indemnity.  Borrower shall indemnify and hold Lender
harmless from and against all claims, costs, expenses, actions, suits,
proceedings, losses, damages and liabilities of any kind whatsoever, including
but not limited to reasonable attorneys’ fees and expenses, arising out of any
matter relating, directly or indirectly, to the Loan, whether resulting from
internal disputes of the Borrower or whether involving other third persons or
entities, or out of any other 

 16
 

matter whatsoever related to this Agreement, the other
Loan Documents, or any Facility, including but not limited to (i) any use,
generation, manufacture, production, storage, Release, threatened Release, or
presence of a Hazardous Substance; (ii) any violation or claim of
violation of any Environmental Law; or (iii) any breach of any of the
warranties, representations and covenants contained herein, but excluding any
claim or liability which arises as the direct result of the gross negligence or
willful misconduct of Lender.  This
indemnity provision shall continue in full force and effect and shall survive
not only the making of the Loan but shall also survive the payment of the
Indebtedness and the performance of the Obligations.

5.0           Joint and Several; Context.  If Borrower consists of more than one person
or entity their liability shall be joint and several.  The provisions hereof shall apply to the parties
according to the context thereof and without regard to the number or gender of
words or expressions used.

6.0           Time of the Essence.  Time is expressly made of the essence of this
Agreement.

7.0           Notices.  All notices required or permitted to be given
hereunder shall be in writing and may be given in person or by United States
mail, by commercial delivery service or by electronic transmission with
verified receipt.  Any notice directed to
a party to this Agreement shall become effective upon the earliest of the
following:  (i) actual receipt by
that party; (ii) delivery to the designated address of that party,
addressed to that party; or (iii) if given by certified or registered
United States mail, the earlier of the date of delivery shown on the return receipt
or twenty-four (24) hours after deposit with the United States Postal Service,
postage prepaid, addressed to that party at its designated address.  The designated address of a party shall be
the address of the party shown below or such other address within the
continental United States as that party, from time to time, may specify by
notice to the other parties:

Borrower:                                                                                                                                                                                            Star
Buffet, Inc.

1312 N. Scottsdale Road

Scottsdale, AZ  85257

Lender:                                                                                                                                                                                                        Robert
E. Wheaton and 

Suzanne H. Wheaton

4716 E. Valley Vista Lane 

Paradise Valley, AZ  85253 

8.0           Costs and Expenses.  Borrower shall pay all costs and expenses
arising from the preparation of this Agreement, the closing of the Loan and the
making of the Advance, including but not limited to, Lender’s attorneys’ fees,
any other charges that may be imposed on Lender as a result of this
transaction.

9.0           Choice of Law.  This Agreement shall be governed by and
construed according to the laws of the State of Arizona.

10.0         Venue.  Lender may bring any action or proceeding to
enforce or arising out of this Agreement in any court of competent
jurisdiction.  If Lender commences such
an action in a court located in the County of Maricopa, State of Arizona, or
the United States District Court for the District of Arizona, Borrower hereby
agrees that it will submit and does hereby irrevocably submit to the personal
jurisdiction of such courts and will not attempt to have such action dismissed,
abated, or transferred on the ground of forum non convenience or similar
grounds; provided, however, that nothing contained herein shall prohibit
Borrower from seeking, by 

 17
 

appropriate motion, to remove any action brought in a
Arizona state court to the United States District Court for the District of
Arizona.  If such action is so removed,
however, Borrower shall not seek to transfer such action to any other district,
nor shall Borrower seek to transfer to any other district any action which
Lender originally commences in such federal court.  Any action or proceeding brought by Borrower
arising out of this Agreement or any of the other Loan Documents shall be
brought solely in a court of competent jurisdiction located in the County of
Maricopa, State of Arizona, or in the United States District Court for the
District of Arizona.  Borrower waives any
objection which it may now or hereafter have to venue of any such action or
proceeding and waives any right to seek removal of any action or proceeding
commenced in accordance herewith.

11.0         WAIVER OF TRIAL BY JURY.  BORROWER AND LENDER EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR THE DEALINGS OF THE PARTIES WITH RESPECT THE
TRANSACTION THAT IS THE SUBJECT OF THIS AGREEMENT WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.  THIS WAIVER HAS BEEN NEGOTIATED BY THE
PARTIES AND IS AN ESSENTIAL PART OF THEIR BARGAIN.  EITHER PARTY MAY FILE A COPY OF THIS
PROVISION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO
THE WAIVER OF ANY RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY JURY.

12.0         Successors and Assigns.  Except as otherwise provided herein, this
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their successors and assigns.

13.0         Headings.  The headings or captions of sections and
paragraphs in this Agreement are for convenience and reference only, do not
define, control or limit the provisions of such sections or paragraphs, and
shall not affect the interpretation of this Agreement.

14.0         Participations.  Lender, at any time, shall have the right to
sell, assign, or grant participations in all or any portion of the Loan and in
any of the Loan Documents.  Lender is
authorized to furnish any purchaser or participant, or prospective purchaser or
participant, any documents or information provided to Lender or that Lender may
have obtained relating to Borrower or relating to the Loan.

15.0         Loan Agreement to Prevail.  In the event of any direct conflict between
the provisions of this Agreement and those of the Note or any other Loan
Document, the provisions of this Agreement shall prevail.

 18
 

IN WITNESS
WHEREOF, these presents are executed as of the date indicated above.

	
  

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
  STAR BUFFET, INC., a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ron Dowdy

  
	
   

  	
  Name:

  	
  Ron Dowdy

  
	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
  Robert E. Wheaton and Suzanne H. Wheaton

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert E. Wheaton

  
	
   

  	
  Name:

  	
  Robert E. Wheaton

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Suzanne H. Wheaton

  
	
   

  	
  Name:

  	
  Suzanne H. Wheaton

  

 

 19Exhibit
4.4

 

THIRD SUPPLEMENTAL
INDENTURE

 

Dated as of July
9, 2007

among

INSIGHT HEALTH
SERVICES CORP.

as Issuer,

INSIGHT HEALTH
SERVICES HOLDINGS CORP. and

THE SUBSIDIARIES LISTED IN THE PREAMBLE

as Guarantors,

and

U.S. BANK NATIONAL
ASSOCIATION,

as Trustee,

to

INDENTURE

Dated as of September 22,
2005

 

This THIRD
SUPPLEMENTAL INDENTURE, dated as of July 9, 2007 (the “Third Supplemental
Indenture”), is entered into by and among InSight Health Services Corp., a
Delaware corporation (the “Company”), InSight Health Services Holdings
Corp., a Delaware corporation (the “Parent”), and the Subsidiary
Guarantors signatory hereto (collectively, the “Subsidiary Guarantors”
and together with the Parent, the “Guarantors”), and U.S. Bank National
Association, a national banking association, as trustee (the “Trustee”).

RECITALS

WHEREAS, the
Company, the Guarantors and the Trustee have entered into an Indenture, dated
as of September 22, 2005, as amended and supplemented by a First Supplemental
Indenture dated May 18, 2006 and a Second Supplemental Indenture dated May 29,
2007 (as amended and supplemented, the “Existing Indenture”), pursuant
to which the Company initially issued $300,000,000 aggregate principal amount
of Notes (such term and all other capitalized terms used herein and not
otherwise defined herein having the meanings in the Existing Indenture); and

WHEREAS, in
accordance with Section 2.02 of the Existing Indenture and subject to Article
Four, the Trustee may at any time and from time to time, upon receipt of an
Authentication Order, authenticate for original issue Notes in the aggregate
principal amount specified in such Authentication Order up to an unlimited
amount, provided that certain conditions set forth in Section 2.02 of the
Existing Indenture are satisfied; and

WHEREAS, in
accordance with Section 9.01 of the Existing Indenture, the Company, the
Guarantors and the Trustee may amend or supplement the Existing Indenture
without the consent of the Holders to, among other things, provide for the
issuance of Additional Notes in accordance with the limitations set forth in
the Existing Indenture and make certain changes that do not adversely affect
the interests of the Holders in any material respect; and

WHEREAS, the Board
of the Company has, as evidenced by a Board Resolution, authorized the
amendment of the Existing Indenture pursuant to this Third Supplemental
Indenture to clarify certain definitions in the Existing Indenture in
connection with the issuance of $15,000,000 aggregate principal amount of Additional
Notes on the date of this Third Supplemental Indenture (the “Second Issue
Date”); and

WHEREAS, all
things necessary to make this Third Supplemental Indenture a valid supplement
to the Existing Indenture according to its terms have been done and the Existing
Indenture, as amended and supplemented by the Third Supplemental Indenture, is
hereafter referred as the Indenture.

NOW, THEREFORE,
THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH:

For and in
consideration of the premises, and of other valuable consideration the
sufficiency of which is hereby acknowledged, each of the Company and the
Guarantors, jointly

 2
 

and severally, covenant
and agree with the Trustee, for the equal and proportionate benefit of all
Holders, as follows:

ARTICLE I

DEFINITIONS

Section 1.1.  Amendment to Definitions.  Each of the following defined terms in
Section 1.01 of the Existing Indenture is amended and restated as follows:

“Registration Rights Agreement” means (i)
with respect to the Notes initially issued on the Issue Date, the Registration
Rights Agreement, dated as of the Issue Date, by and among the Company, the
Guarantors and the other parties named on the signature pages thereof, as such
agreement may be amended, modified or supplemented from time to time and (ii)
with respect to the Notes issued on the Second Issue Date, the Registration
Rights Agreement, dated as of July 9, 2007, by and among the Company, the
Guarantors party thereto and the other parties named on the signature pages
thereof, as such agreement may be amended, modified or supplemented from time
to time.

“Second Issue Date” means the date on which
the $15,000,000 aggregate principal amount of Additional Notes are issued.

ARTICLE II

CLOSING DOCUMENTS

Section 2.1.  Documents to Be Given to Trustee.  Pursuant to the provisions of Sections 2.02,
9.01 and 13.05 of the Indenture, the Company will deliver to the Trustee
concurrently with the execution and delivery of this Third Supplemental
Indenture (i) an Authentication Order dated as of July 9, 2007, satisfying the
provisions of Section 2.02 of the Indenture, (ii) a Board Resolution satisfying
the provisions of Section 9.01 of the Indenture and (iii) an Opinion of Counsel
and an Officer’s Certificate, each dated as of July 9, 2007, satisfying the
provisions of Sections 13.04 and 13.05 of the Indenture.

ARTICLE III

MISCELLANEOUS

Section 3.1.  Trustee’s Acceptance.  The Trustee accepts the provisions of this
Third Supplemental Indenture upon the terms and conditions set forth in the
Existing Indenture; provided, however, that the foregoing acceptance shall not
make the Trustee responsible in any manner whatsoever for the correctness of
recitals or statements by other parties herein.

Section 3.2.  Indenture to Remain in Full Force and
Effect.  Except as hereby expressly provided
in this Third Supplemental Indenture, the Existing Indenture, as supplemented
and amended by the First Supplemental

 3
 

Indenture and the Second
Supplemental Indenture, is in all respects ratified and confirmed and all its
terms, provisions and conditions shall be and remain in full force and effect.

Section 3.3.  Guarantees.  Each Guarantor hereby agrees, ratifies and
reaffirms that its Guarantee pursuant to Section 11.01 of the Indenture shall
remain in full force and effect with respect to the Notes (including the Notes
issued on the Issue Date, the Notes issued on the Second Issue Date, any other
Notes issued in accordance with the Indenture and any Exchange Notes issued in
exchange therefor).

Section 3.4.  Rights, Etc. of Trustee.  All recitals in this Third Supplemental
Indenture are made by the Company and the Guarantors and not by the
Trustee.  All of the provisions contained
in the Existing Indenture in respect of the rights, privileges, immunities,
powers and duties of the Trustee shall be applicable in respect hereof as fully
and with like effect as if set forth herein in full.

Section 3.5.  Successors and Assigns.  All covenants and agreements in this Third
Supplemental Indenture made by the Company and the Guarantors shall bind their
respective successors and assigns, whether so expressed or not.

Section 3.6.  Conflict with Trust Indenture Act.  If any provision of this Third Supplemental
Indenture limits, qualifies or conflicts with the duties imposed by the
operation of Trust Indenture Act Section 318(c), the imposed duties shall
control.

Section 3.7.  Governing Law.  The laws of the State of New York shall
govern this Third Supplemental Indenture. 
The Trustee, the Company and the Guarantors agree to submit to the
jurisdiction of the courts of the State of New York in any action or proceeding
arising out of or relating to this Third Supplemental Indenture.

Section 3.8.  Titles, Headings, Etc.  The Article and Section headings of this
Third Supplemental Indenture are for convenience only and shall not affect the
construction hereof.

Section 3.9.  Severability. In case any provision in
this Third Supplemental Indenture shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

Section 3.10.  Execution in Counterparts.  This Third Supplemental Indenture may be
executed in any number of counterparts, each of which shall be deemed an
original, but such counterparts shall together represent one and the same
instrument.

 4
 

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

	
  

  	
   

  	
  INSIGHT HEALTH SERVICES CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mitch C.
  Hill

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitch C. Hill

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief Financial 

  
	
   

  	
   

  	
   

  	
  Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INSIGHT HEALTH SERVICES HOLDINGS

  CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mitch C. Hill

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitch C. Hill

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief Financial

  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WILKES-BARRE IMAGING, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: InSight Health Corp., as the sole member and

  sole manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mitch C. Hill

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitch C. Hill

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief Financial

  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MRI ASSOCIATES, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: InSight Health Corp., as the general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mitch C. Hill

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitch C. Hill

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief Financial

  Officer

  
						

 

 

[Signatures continued
on following page]

 5
 

 

	
  

  	
   

  	
  VALENCIA MRI, LLC

  ORANGE COUNTY REGIONAL PET CENTER-

  IRVINE, LLC

  SAN FERNANDO VALLEY REGIONAL PET

  CENTER, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: InSight Health Corp., as the general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mitch C. Hill

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitch C. Hill

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief Financial

  Officer

  
						

 

	
  

  	
   

  	
  PARKWAY IMAGING CENTER, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Manager

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitch C. Hill

  
	
   

  	
   

  	
  Title:

  	
  Manager

  
						

 

[Signatures continued on
following page]

 6
 

INSIGHT HEALTH CORP.

OPEN MRI, INC.

MAXUM HEALTH CORP.

RADIOSURGERY CENTERS, INC.

DIAGNOSTIC SOLUTIONS CORP.

MAXUM HEALTH SERVICES OF NORTH

TEXAS, INC.

MAXUM HEALTH SERVICES OF DALLAS,

INC.

NDDC, INC.

SIGNAL MEDICAL SERVICES, INC.

INSIGHT IMAGING SERVICES CORP.

COMPREHENSIVE MEDICAL IMAGING,

INC.

COMPREHENSIVE MEDICAL IMAGING

CENTERS, INC.

COMPREHENSIVE MEDICAL IMAGING-

BILTMORE, INC.

COMPREHENSIVE OPEN MRI-EAST MESA,

INC.

TME ARIZONA, INC.

COMPREHENSIVE MEDICAL IMAGING-

FREMONT, INC.

COMPREHENSIVE MEDICAL IMAGING-

SAN FRANCISCO, INC.

COMPREHENSIVE OPEN MRI- GARLAND,

INC.

IMI OF ARLINGTON, INC.

COMPREHENSIVE MEDICAL IMAGING-

FAIRFAX, INC.

IMI OF KANSAS CITY, INC.

COMPREHENSIVE MEDICAL IMAGING-

BAKERSFIELD, INC.

MAXUM HEALTH SERVICES CORP.

	
  

  	
   

  	
  By:

  	
  /s/ Mitch C. Hill

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitch C. Hill

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief Financial

  Officer

  
						

 

[Signatures
continued
on following page]

 7
 

 

	
  

  	
   

  	
  COMPREHENSIVE OPEN MRI-

  CARMICHAEL/FOLSOM, LLC

  SYNCOR DIAGNOSTICS SACRAMENTO, LLC

  SYNCOR DIAGNOSTICS BAKERSFIELD, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Comprehensive Medical Imaging, Inc. and
  Comprehensive Medical Imaging Centers, Inc., as the partners

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mitch C. Hill

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitch C. Hill

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief Financial

  Officer

  
						

 

 

	
  

  	
   

  	
  PHOENIX REGIONAL PET CENTER-

  THUNDERBIRD, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 
  Comprehensive Medical Imaging Centers, Inc.,

  as the sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mitch C. Hill

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitch C. Hill

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief Financial

  Officer

  
						

 

 

[Signatures continued on following page]

 8
 

 

	
  

  	
   

  	
  MESA MRI

  MOUNTAIN VIEW MRI

  LOS GATOS IMAGING CENTER

  WOODBRIDGE MRI

  JEFFERSON MRI-BALA

  JEFFERSON MRI

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 
  Comprehensive Medical Imaging, Inc. and Comprehensive Medical Imaging
  Centers, Inc., as the members

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mitch C. Hill

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitch C. Hill

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and Chief Financial

  Officer

  
						

 

[Signatures continued on following page]

 9
 

This foregoing Third
Supplemental Indenture is hereby confirmed and accepted by the Trustee as of the
date first written above.

 

	
  

  	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James E.
  Murphy

  	
   

  
	
   

  	
   

  	
   

  	
  Name: James E. Murphy

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  

 

 10

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