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<SEC-DOCUMENT>0000950134-08-009511.txt : 20080514
<SEC-HEADER>0000950134-08-009511.hdr.sgml : 20080514
<ACCEPTANCE-DATETIME>20080514145215
ACCESSION NUMBER:		0000950134-08-009511
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20080331
FILED AS OF DATE:		20080514
DATE AS OF CHANGE:		20080514

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AMERICAN SHARED HOSPITAL SERVICES
		CENTRAL INDEX KEY:			0000744825
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-MEDICAL LABORATORIES [8071]
		IRS NUMBER:				942918118
		STATE OF INCORPORATION:			CA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-08789
		FILM NUMBER:		08831263

	BUSINESS ADDRESS:	
		STREET 1:		FOUR EMBARCADERO CENTER
		STREET 2:		SUITE 3700
		CITY:			SAN FRANCISCO
		STATE:			CA
		ZIP:			94111-4107
		BUSINESS PHONE:		415-788-5300

	MAIL ADDRESS:	
		STREET 1:		FOUR EMBARCADERO CENTER
		STREET 2:		SUITE 3700
		CITY:			SAN FRANCISCO
		STATE:			CA
		ZIP:			94111-4107
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>f40856e10vq.htm
<DESCRIPTION>FORM 10-Q
<TEXT>
<HTML>
<HEAD>
<TITLE>e10vq</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>WASHINGTON, DC 20549</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 10-Q</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>(Mark One)</B>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#254;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 12%"><B><B>For the quarterly period ended March&nbsp;31, 2008 or</B>
</B>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 12%"><B><B>For the transition period from <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to </B><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><B>.</B>
</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Commission file number 1-08789</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>American
Shared Hospital Services</B></div>
<DIV align="center" style="font-size: 10pt; margin-top: 0pt"><b>(Exact name of registrant as specified in its charter)</B></DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>California</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>94-2918118</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><B>(State or other jurisdiction of</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>(IRS Employer</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><B>Incorporation or organization)</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Identification No.)</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top" nowrap><B>Four Embarcadero Center, Suite&nbsp;3700, San Francisco, California<BR>
(Address of Principal Executive Offices)</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>94111<BR>
(Zip Code)</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Registrant&#146;s telephone number, including area code: (415)&nbsp;788-5300</B></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant: (1)&nbsp;has filed all reports required to be filed by
Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12&nbsp;months (or for
such shorter period that the Registrant was required to file such reports), and (2)&nbsp;has been
subject to such filing requirements for the past 90&nbsp;days. Yes
<FONT face="Wingdings">&#254;</FONT> No <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer or a smaller reporting company. See definition of &#147;large accelerated filer&#148;,
&#147;accelerated filer&#148;, and &#147;smaller reporting company&#148; in Rule&nbsp;12b-2 of the Exchange Act. (Check
one):
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="22%"></TD>
    <TD width="3%"></TD>
    <TD width="22%"></TD>
    <TD width="3%"></TD>
    <TD width="22%"></TD>
    <TD width="3%"></TD>
    <TD width="22%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Large Accelerated Filer <FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Accelerated Filer
<FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Non-Accelerated Filer <FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>Smaller reporting company
<FONT face="Wingdings">&#254;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>(Do not check if a smaller reporting company)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of April&nbsp;1, 2008, there are outstanding 5,026,587 shares of the Registrant&#146;s common stock.
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">PART I &#151; FINANCIAL INFORMATION</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#001">ITEM 1. FINANCIAL STATEMENTS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#002">CONDENSED CONSOLIDATED BALANCE SHEETS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#003">CONDENSED CONSOLIDATED STATEMENTS OF INCOME</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#004">CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#005">NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#006">Item&nbsp;2. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#007">Item&nbsp;3. Quantitative and Qualitative Disclosures About Market Risk</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#008">Item&nbsp;4. Controls and Procedures</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">PART II &#151; OTHER INFORMATION</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#010">Item&nbsp;1. Legal Proceedings</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#011">Item&nbsp;1A. Risk Factors</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#012">Item&nbsp;2. Unregistered Sales of Equity Securities and Use of Proceeds</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#013">Item&nbsp;3. Defaults Upon Senior Securities</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#014">Item&nbsp;4. Submission of Matters to a Vote of Securities Holders</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#015">Item&nbsp;5. Other Information</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#016">Item&nbsp;6. Exhibits and Reports on Form&nbsp;8-K</A></TD></TR>
<TR><TD colspan="9"><A HREF="#017">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="f40856exv10w30a.htm">EXHIBIT 10.30A</A></TD></TR>
<TR><TD colspan="9"><A HREF="f40856exv10w30b.htm">EXHIBIT 10.30B</A></TD></TR>
<TR><TD colspan="9"><A HREF="f40856exv10w57.htm">EXHIBIT 10.57</A></TD></TR>
<TR><TD colspan="9"><A HREF="f40856exv31w1.htm">EXHIBIT 31.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="f40856exv31w2.htm">EXHIBIT 31.2</A></TD></TR>
<TR><TD colspan="9"><A HREF="f40856exv32w1.htm">EXHIBIT 32.1</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>






<!-- link1 "PART I &#151; FINANCIAL INFORMATION" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">PART I &#151; FINANCIAL INFORMATION
</DIV>

<!-- link2 "ITEM 1. FINANCIAL STATEMENTS" -->
<DIV align="left"><A NAME="001"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 1. FINANCIAL STATEMENTS</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AMERICAN SHARED HOSPITAL SERVICES</B>
</DIV>

<!-- link2 "CONDENSED CONSOLIDATED BALANCE SHEETS" -->
<DIV align="left"><A NAME="002"></A></DIV>
<DIV align="center" style="font-size: 10pt">CONDENSED CONSOLIDATED BALANCE SHEETS</DIV>



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(audited)</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">March 31, 2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">December 31, 2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>ASSETS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current assets:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,292,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,340,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Restricted cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Securities-current</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,170,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,605,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accounts receivable, net of allowance for
doubtful accounts of $100,000 in 2008
and $170,000 in 2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,238,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,886,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other receivables</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,833,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">250,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Prepaid expenses and other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">420,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">417,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Current deferred tax assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">301,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">301,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total current assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17,304,000</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>14,849,000</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Property and equipment:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Medical equipment and facilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">68,232,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66,562,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Office equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">699,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">699,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Deposits and construction in progress</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,609,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,947,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75,540,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">76,208,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accumulated depreciation and
amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(32,146,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(31,982,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net property and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43,394,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,226,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities-long term</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,065,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investment in preferred stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,617,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,617,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">278,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">287,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>63,593,000</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>63,044,000</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>LIABILITIES AND
SHAREHOLDERS&#146; EQUITY</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current liabilities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accounts payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">844,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">795,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Employee
compensation and benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"></TD>
    <TD align="right">122,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"></TD>
    <TD align="right">142,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other accrued liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">830,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">793,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Current portion of long-term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,685,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,180,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Current portion of obligations under capital leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,114,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,092,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Line of credit advances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,100,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,100,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total current liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>14,695,000</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>14,102,000</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt, less current portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,291,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,285,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term capital leases, less current portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,433,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,719,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,245,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,245,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Minority interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,199,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,153,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Shareholders&#146; equity:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Common stock, without par
value: authorized shares - 10,000,000; issued
and outstanding shares, 5,026,000 in 2008
and 5,026,000 in 2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,320,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,320,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Additional paid-in capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,338,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,304,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Retained earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,072,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,916,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total shareholders&#146; equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,730,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,540,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total liabilities and shareholders&#146; equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>63,593,000</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>63,044,000</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See accompanying notes
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AMERICAN SHARED HOSPITAL SERVICES</B>
</DIV>

<!-- link2 "CONDENSED CONSOLIDATED STATEMENTS OF INCOME" -->
<DIV align="left"><A NAME="003"></A></DIV>
<DIV align="center" style="font-size: 10pt">CONDENSED CONSOLIDATED STATEMENTS OF INCOME<br>
(Unaudited)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 0px solid #000000">Three Months ended March 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Medical services revenue</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,725,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,749,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Costs of revenue:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Maintenance and supplies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">278,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">346,000</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Depreciation and amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,558,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,453,000</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other direct operating costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">820,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">720,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,656,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,519,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross Margin</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,069,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,230,000</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Selling and administrative expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,107,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,161,000</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">568,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">467,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">394,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">602,000</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest and other income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">147,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">118,000</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Minority interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(236,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(300,000</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income before income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">305,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">420,000</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income tax expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">149,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">195,000</TD>
    <TD>&nbsp;</TD>
</TR>


<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">156,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">225,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income per share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Earnings per common share &#151; basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.04</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Earnings per common share &#151; assuming dilution</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.04</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See accompanying notes
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AMERICAN SHARED HOSPITAL SERVICES</B>
</DIV>

<!-- link2 "CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS" -->
<DIV align="left"><A NAME="004"></A></DIV>
<DIV align="center" style="font-size: 10pt">CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS<br>
(Unaudited)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 0px solid #000000">Three Months ended March 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating activities:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">156,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">225,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Adjustments to reconcile net income to net cash from
operating activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Depreciation and amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,593,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,484,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Gain on sale of assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(56,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Minority interest in consolidated subsidiaries</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">236,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">300,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Stock based compensation expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Changes in operating assets and liabilities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Receivables</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(462,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(50,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Prepaid expenses and other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Accounts payable and accrued liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(65,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net cash from operating activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,563,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,948,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Investing activities:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Payment for purchase of property and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,168,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,209,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from sales and maturities of marketable securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">753,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Investment in marketable securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,494,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net cash from investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,668,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,950,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Financing activities:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Payment of dividends</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(239,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Distribution to minority owners</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(190,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(361,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Long term debt financing on purchase of property and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,839,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,110,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Payments on line of credit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(800,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Principal payments on capital leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(264,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(245,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Principal payments on long-term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,328,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,194,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net cash from financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(729,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net change in cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(48,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(731,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash and cash equivalents at beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,340,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,952,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash and cash equivalents at end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,292,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,221,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Supplemental cash flow disclosure:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash paid during the period for:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">789,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">503,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">52,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">210,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Schedule of non-cash investing and financing activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accrued dividends</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">239,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other receivables- Gamma Knife sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,473,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See accompanying notes
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">AMERICAN SHARED HOSPITAL SERVICES
</DIV>

<!-- link2 "NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS" -->
<DIV align="left"><A NAME="005"></A></DIV>
<DIV align="center" style="font-size: 10pt">NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS<br>
(Unaudited)</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 1. Basis of Presentation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the opinion of management, the accompanying unaudited condensed consolidated financial
statements contain all adjustments (consisting of only normal recurring accruals) necessary to
present fairly American Shared Hospital Services&#146; consolidated financial position as of March&nbsp;31,
2008 and the results of its operations for the three month periods ended March&nbsp;31, 2008 and 2007,
which results are not necessarily indicative of results on an annualized basis. Consolidated
balance sheet amounts as of December&nbsp;31, 2007 have been derived from audited financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These unaudited consolidated financial statements should be read in conjunction with the
audited financial statements for the year ended December&nbsp;31, 2007 included in the Company&#146;s 10-K
filed with the Securities and Exchange Commission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These financial statements include the accounts of American Shared Hospital Services (the
&#147;Company&#148;) and its wholly-owned subsidiaries: OR21, Inc. (&#147;OR21&#148;); MedLeader.com, Inc.
(&#147;MedLeader&#148;); American Shared Radiosurgery Services (&#147;ASRS&#148;); and ASRS majority-owned subsidiary,
GK Financing, LLC (&#147;GK Financing&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company through its majority-owned subsidiary, GK Financing, provided Gamma Knife units to
nineteen medical centers as of March&nbsp;31, 2008 in Arkansas, Connecticut, Florida, Illinois,
Maryland, Massachusetts, Mississippi, Nevada, New Jersey, New Mexico, New York, Tennessee,
Oklahoma, Ohio, Pennsylvania, Texas and Wisconsin. The customer in Maryland exercised an early
termination option in its contract and purchased the Gamma Knife equipment it had been leasing
effective as of March&nbsp;31, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company also directly provides radiation therapy and related equipment, including
Intensity Modulated Radiation Therapy (IMRT), Image Guided Radiation Therapy (IGRT)&nbsp;and a CT
Simulator to the radiation therapy department at an existing Gamma Knife site. This equipment
became operational during September&nbsp;2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All significant intercompany accounts and transactions have been eliminated in consolidation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain reclassifications have been made to the 2007 balances to conform with the 2008
presentation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Note 2. Per Share Amounts</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Per share information has been computed based on the weighted average number of common shares
and dilutive common share equivalents outstanding. For the three months ended March&nbsp;31, 2008 basic
earnings per share was computed using 5,026,000 common shares and
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">diluted earnings per share was
computed using 5,028,000 common shares and equivalents. For the three months ended March&nbsp;31,
2007 basic earnings per share was computed using 5,023,000 common shares and diluted earnings per
share was computed using 5,049,000 common shares and equivalents.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 3. Stock-based Compensation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;28, 2006, the Company&#146;s shareholders approved the 2006 Stock Incentive Plan (the
&#147;2006 Plan&#148;) under which 750,000 shares of the Company&#146;s common stock are reserved for issuance of
shares to officers of the Company, other key employees, non-employee directors, and advisors. The
2006 Plan serves as successor to the Company&#146;s previous two stock-based employee compensation
plans, the 1995 and 2001 Stock Option Plans. The shares reserved under those two plans, including
the shares of common stock subject to currently outstanding options under the plans, were
transferred to the 2006 Plan, and no further grants or share issuances will be made under the 1995
Plan or 2001 Plans. Under the 2006 Plan, there are 1,500 restricted stock units granted,
consisting of annual automatic grants to non-employee directors, and approximately 568,000 options
granted, of which approximately 142,000 options are vested, as of March&nbsp;31, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with FASB Statement No.&nbsp;123R, <I>Accounting for Stock-Based Compensation</I>, at the
beginning of 2006 the Company began expensing the fair value of its stock options issued, using the
modified prospective format. The Company&#146;s stock-based awards to employees are calculated using
the Black-Scholes valuation model. The Company&#146;s stock-based awards have characteristics
significantly different from those of traded options, and changes in the subjective input
assumptions can materially affect the present value estimates. The estimated fair value of the
Company&#146;s option grants awarded during 2008 was estimated assuming the following weighted-average
assumptions: seven year expected life, 40.6% expected volatility, 3.4% dividend yield, and 4.0%
risk-free interest rate. The estimated fair value of the Company&#146;s option grants awarded during
2007 was estimated assuming the following weighted-average assumptions: seven year expected life,
25&#151;72.5% expected volatility, 3.4% dividend yield, and 4.9&#151;5.4% risk-free interest rate. The
estimated fair value of the Company&#146;s options is amortized over the period during which an employee
is required to provide service in exchange for the award, usually the vesting period. Accordingly,
stock-based compensation cost before income tax effect in the amount of approximately $34,000 is
reflected in first quarter 2008 net income, compared to approximately $15,000 in the same period in
the prior year.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">FASB Statement No.&nbsp;123R requires that excess tax benefits be reported as a financing cash inflow
rather than as a reduction of taxes paid. There were 50,000 options issued and no options
exercised during the three month period ended March&nbsp;31, 2008. There were no excess tax benefits to
report.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 4. Convertible Preferred Stock Investment</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April&nbsp;10, 2006 the Company invested $2,000,000 for a convertible preferred stock interest
in Still River Systems, Inc. (&#147;Still River&#148;), a development-stage company based in Littleton,
Massachusetts, which in collaboration with scientists from MIT&#146;s Plasma Science and
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fusion Center, is developing a medical device for the treatment of cancer patients using proton beam radiation
therapy (PBRT). At the same time, the Company also purchased for $1,000,000 an option to acquire
two Monarch<SUP style="font-size: 85%; vertical-align: text-top">250</SUP>&#153; (formerly Clinatron 250&#153;) PBRT systems from Still River for anticipated
delivery in 2009. The Company subsequently exercised the option to purchase the two PBRT systems
and has made additional deposits of $1,000,000 towards their purchase. The PBRT systems are not
currently FDA approved.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s initial investment in Still River consisted of approximately 2,353,000 shares of
Series&nbsp;B Convertible Preferred Stock. The Series&nbsp;B Convertible Preferred Stock is considered pari
passu with previously issued Series&nbsp;A Convertible Preferred Stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;5, 2007 the Company invested approximately $617,000 for an additional equity
interest in Still River Systems, Inc. This investment represents approximately 588,000 shares of
Series&nbsp;C Convertible Preferred Stock, which is considered pari passu with the previously issued
Series&nbsp;A and Series&nbsp;B Convertible Preferred Stock (all issues together &#147;Preferred Stock&#148;). Upon
conversion, the Company&#146;s fully diluted common stock interest in Still River is currently
approximately 5.9%.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Preferred Stock is convertible at any time at the option of the holder into shares of
common stock of Still River at a conversion price, subject to certain adjustments, but initially
set at the original purchase price. The Preferred Stock has voting rights equivalent to the number
of common stock shares into which it is convertible, and holders of the Preferred Stock, subject to
certain exceptions, have a pro-rata right to participate in subsequent stock offerings. In the
event of liquidation, dissolution, or winding up of Still River, the Preferred Stock holders have
preference to the holders of common stock, and any other class or series of stock that is junior to
the Preferred Stock<B>. </B>The Company does not have the right to appoint a member of the Board of
Directors of Still River.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company accounts for its investment in Still River under the cost method.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 5. Accounting for Uncertainty in Income Taxes</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective January&nbsp;1, 2007, the Company adopted Financial Accounting Standards Interpretation,
or FIN, No.&nbsp;48, &#147;Accounting for Uncertainty in Income Taxes &#151; an interpretation of FASB Statement
No.&nbsp;109&#148; (FIN 48). FIN 48 prescribes a recognition threshold and measurement attribute for the
financial statement recognition and measurement of uncertain tax positions taken or expected to be
taken in a company&#146;s income tax return, and also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods, disclosure, and transition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the implementation of FIN 48, the Company recognized no change in the liability
for unrecognized tax benefits related to tax positions taken in prior periods, and no corresponding
change in retained earnings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additionally, FIN 48 specifies that tax positions for which the timing of the ultimate
resolution is uncertain should be recognized as long-term liabilities. The Company made no
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">reclassifications between current taxes payable and long term taxes payable upon adoption of FIN
48. Also, the Company had no amounts of unrecognized tax benefits that, if recognized, would
affect its effective income tax rate for January&nbsp;1, 2007 and March&nbsp;31, 2008.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s policy for deducting interest and penalties is to treat interest as interest
expense and penalties as taxes. As of March&nbsp;31, 2008 the Company had no amount accrued for the
payment of interest and penalties related to unrecognized tax benefits and no amounts as of the
adoption date of FIN 48.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The tax return years 2003 through 2007 remain open to examination by the major domestic taxing
jurisdictions to which the Company is subject. Net operating losses generated on a tax return
basis by the Company in 1995 through 1997 and 1999 through 2004 remain open to examination by the
major domestic taxing jurisdictions.
</DIV>
<!-- link2 "Item&nbsp;2. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations" -->
<DIV align="left"><A NAME="006"></A></DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;2.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This quarterly report to the Securities and Exchange Commission may be deemed to contain
certain forward-looking statements with respect to the financial condition, results of operations
and future plans of American Shared Hospital Services, which involve risks and uncertainties
including, but not limited to, the risks of the Gamma Knife and radiation therapy businesses, the
risks of developing The Operating Room for the 21<SUP style="font-size: 85%; vertical-align: text-top">st</SUP> Century<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> program, and the risks of
investing in a development-stage company, Still River Systems, Inc. (&#147;Still River&#148;), without a
proven product. Further information on potential factors that could affect the financial
condition, results of operations and future plans of American Shared Hospital Services is included
in the filings of the Company with the Securities and Exchange Commission, including the Company&#146;s
Annual Report on Form 10-K for the year ended December&nbsp;31, 2007 and the definitive Proxy Statement
for the Annual Meeting of Shareholders to be held on June&nbsp;20, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Medical services revenue decreased $24,000 to $4,725,000 for the three month period ended
March&nbsp;31, 2008 from $4,749,000 for the three month period ended March&nbsp;31, 2007. The decrease is
primarily due to the termination of two Gamma Knife contracts at the end of their terms, one at the
end of third quarter 2007, and one in early 2008. The lower revenue was also attributable to three
Gamma Knife units being out of service for extended periods of time during first quarter 2008 for
upgrades or cobalt reloads. As a result of the contract terminations and upgrades, revenue from
Gamma Knife operations decreased to $4,361,000 for the three month period ended March&nbsp;31, 2008
compared to $4,749,000 for the three month period ended March&nbsp;31, 2007. The decrease in Gamma
Knife revenue was partially offset by $364,000 in revenue generated from the Company&#146;s new
radiation therapy contract, which became operational in September&nbsp;2007, to provide IGRT and related
equipment and services to an existing Gamma Knife customer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company had nineteen Gamma Knife units in operation at March&nbsp;31, 2008 compared to
twenty-one at March&nbsp;31, 2007. One Gamma Knife retail customer chose to exercise an early
termination provision in its lease, effective as of March&nbsp;31, 2008, which reduces the number of
Gamma Knife units the Company has in operation as of April&nbsp;1, 2008 to eighteen.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fourteen of the
Company&#146;s eighteen current Gamma Knife customers are under fee-per-use contracts, and four
customers are under retail arrangements. Retail arrangements are further classified as either
turn-key or net revenue sharing. Revenue from fee per use contracts is recorded on a gross basis
as determined by each hospital&#146;s contracted rate. Under turn-key arrangements, the Company
receives payment from the hospital in the amount of its reimbursement from third party payors, and
is responsible for paying all the operating costs of the Gamma Knife. Revenue is recorded on a
gross basis and estimated based on historical experience and hospital contracts with third party
payors. For net revenue sharing arrangements the Company receives a contracted percentage of the
reimbursement received by the hospital less the operating expenses of the Gamma Knife. Revenue is
recorded on a net basis and estimated based on historical experience.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The equipment provided under the Company&#146;s contract to provide additional radiation therapy
and related equipment services to an existing Gamma Knife customer began operation in September
2007. This contract is considered a retail arrangement and revenue is recorded on a net revenue
sharing basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The number of Gamma Knife procedures decreased by 130 to 477 in first quarter 2008 from 607 in
the same quarter in the prior year. This decrease was primarily due to the loss of two Gamma Knife
contracts, whose leases expired at the end of their terms in September&nbsp;2007 and January&nbsp;2008. It
was also partially due to down time of several weeks at two existing Gamma Knife sites for upgrades
to Perfexion systems and a cobalt reload at another of the Company&#146;s sites.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total costs of revenue increased $137,000 to $2,656,000 for the three month period ended March
31, 2008 from $2,519,000 for the three month period ended March&nbsp;31, 2007. Maintenance and supplies
decreased by $68,000 for the three month period ended March&nbsp;31, 2008 compared to the same period in
the prior year, primarily due to fewer Gamma Knife customer contracts, as well as more Gamma Knife
units under warranty because of upgrades. Depreciation and amortization increased by $105,000 for
the three month period ended March&nbsp;31, 2008 compared to the same period in the prior year primarily
due to additional equipment cost because of the new radiation therapy contract and the Gamma Knife
upgrades and cobalt reloads, which more than offset any reduction in depreciation from the two
discontinued Gamma Knife sites. Other direct operating costs increased by $100,000 for the three
month period ended March&nbsp;31, 2008 compared to the same period in the prior year primarily due to
higher site specific marketing related costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling and administrative costs decreased by $54,000 to $1,107,000 for the three month period
ended March&nbsp;31, 2008 from $1,161,000 for the three month period ended March&nbsp;31, 2007. This
decrease was primarily due to lower costs from consulting services, partially offset by increased
payroll related costs and accounting fees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense increased by $101,000 to $568,000 for the three month period ended March&nbsp;31,
2008 from $467,000 for the three month period ended March&nbsp;31, 2007 primarily due to term financing
obtained on the radiation therapy contract, the three Gamma Knife upgrades and the two Gamma Knife
cobalt reloads over the previous several months. The additional
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->9<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">interest expense from this
financing was partially offset by lower interest expense on the debt relating to the more mature
Gamma Knife units. The mature units have lower interest expense because interest expense decreases
as the outstanding principal balance of each loan is reduced.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest and other income increased by $29,000 to $147,000 for the three month period ended
March&nbsp;31, 2008 from $118,000 for the three month period ended March&nbsp;31, 2007 primarily due to a
gain on the sale of equipment of approximately $56,000, which was partially offset by a reduction
in interest income as a result of lower interest rates available on invested cash balances.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Minority interest decreased by $64,000 to $236,000 for the three month period ended March&nbsp;31,
2008 from $300,000 for the three month period ended March&nbsp;31, 2007 due to decreased profitability
of GK Financing. Minority interest represents the 19% interest of GK Financing owned by a third
party.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax expense decreased by $46,000 to $149,000 in the first quarter 2008 compared to
$195,000 in the first quarter 2007. Based on the Company&#146;s current estimated effective income tax
rate for 2008, a 49% income tax provision was recorded in first quarter 2008 compared to a 46%
income tax provision in first quarter 2007; however, income tax expense is lower because income
before income taxes is $115,000 less than in first quarter 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company had net income of $156,000 ($0.03 per diluted share) for the three month period
ended March&nbsp;31, 2008 compared to net income of $225,000 ($0.04 per diluted share) in the same
period in the prior year. The decrease was primarily due to increased costs of revenue,
specifically depreciation from additional equipment, and interest expense from the related
financing on that equipment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Liquidity and Capital Resources</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company had cash and cash equivalents of $6,292,000 at March&nbsp;31, 2008 compared to
$6,340,000 at December&nbsp;31, 2007. The Company&#146;s cash position decreased by $48,000 due to payments
for the purchase of property and equipment of $2,168,000, principal payments on long term debt and
capital leases of $1,592,000, and distributions to minority owners of $190,000. These decreases
were offset by net cash from operating activities of $1,563,000, debt financing towards the
purchase of property and equipment of $1,839,000, and proceeds from the sale of marketable
securities of $500,000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the first quarter of 2008, a Gamma Knife customer with an early termination option
chose to exercise that option and purchase the equipment effective March&nbsp;31, 2008. As a result,
the Company recorded a gain on the sale of the Gamma Knife of approximately $56,000 during the
quarter. Cash proceeds of $1,473,000 from the sale were received in the second quarter of 2008,
and are recorded in other receivables at March&nbsp;31, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company as of March&nbsp;31, 2008 had shareholders&#146; equity of $19,730,000, working capital of
$2,609,000 and total assets of approximately $63,593,000.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->10<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has scheduled interest and principal payments under its debt obligations of
approximately $9,468,000 and scheduled capital lease payments of approximately $1,355,000 during
the next 12&nbsp;months. The Company believes that its cash flow from operations and cash resources are
adequate to meet its scheduled debt and capital lease obligations during the next 12&nbsp;months.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has a $6,000,000 line of credit, renewable annually, available as needed for
equipment purchases and working capital. Amounts drawn against the line of credit are secured by
the Company&#146;s cash invested with the bank. At March&nbsp;31, 2008 there was $4,100,000 drawn against
the line of credit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company invests its cash primarily in money market or similar funds and high quality short
to long-term fixed income securities in order to maximize current income while minimizing the
potential for principal erosion. A portion of these investments are classified as securities on
the balance sheet and are considered <I>held-to-maturity </I>investments because it is the Company&#146;s
ability and intent to hold these securities until maturity. Securities with maturity dates between
three and twelve months in the amount of $3,170,000 are classified as current assets, while
securities with maturities in excess of one year are classified as long-term. There were no
long-term securities as of March&nbsp;31, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has a $2,617,000 preferred stock investment in Still River Systems, Inc., which is
considered a long-term investment on the balance sheet and is recorded at cost. The Company has
also made deposits of $1,000,000 per machine towards the purchase of two Still River
Monarch<SUP style="font-size: 85%; vertical-align: text-top">250</SUP> PBRT systems, which are classified under Deposits and construction in
progress on the balance sheet. The Company has obtained interim financing from a lender for the
total amount of the deposits paid to date. The Company has a commitment to pay additional deposits
of $2,000,000 per machine until FDA approval is received, at which time the remaining balance
towards the purchase of the equipment is committed. It is anticipated that similar interim
financing will be available on the future deposits. The Still River PBRT system is not
commercially proven and there is no assurance FDA approval will be received. The Company reviews
the carrying value of these deposits for impairment on a quarterly basis, or as events or
circumstances might indicate that the carrying value may not be recoverable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company made a deposit of $480,000 in first quarter 2008 towards the purchase of a
Perfexion Gamma Knife unit to be placed at a new customer site in the last half of 2008. The
Company has obtained a financing commitment from a lender towards the purchase of this equipment.
During 2007, the Company traded in an existing Gamma Knife, and made deposits of $615,000, towards
the future purchase of a LGK Model 4 Gamma Knife at a site still to be determined. It is
anticipated that financing will be obtained for this unit, pending final site selection. The
Company has obtained financing for a Perfexion unit being installed at an existing Gamma Knife
customer site to be completed in second quarter 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Including the commitments for the two Monarch<SUP style="font-size: 85%; vertical-align: text-top">250</SUP> systems, the two Perfexion units
and the LGK Model 4 Gamma Knife, the Company has total remaining commitments to purchase equipment
in the amount of approximately $25,000,000. The Company believes it has the ability, and it is its
intent, to finance these purchase commitments as needed.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->11<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link2 "Item&nbsp;3. Quantitative and Qualitative Disclosures About Market Risk" -->
<DIV align="left"><A NAME="007"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;3. Quantitative and Qualitative Disclosures About Market Risk</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company does not hold or issue derivative instruments for trading purposes and is not a
party to any instruments with leverage or prepayment features. The Company does not have
affiliation with partnerships, trust or other entities whose purpose is to facilitate off-balance
sheet financial transactions or similar arrangements<B>, </B>and therefore has no exposure to the
financing, liquidity, market or credit risks associated with such entities. At March&nbsp;31, 2008 the
Company had no significant long-term, market-sensitive investments.
</DIV>
<!-- link2 "Item&nbsp;4. Controls and Procedures" -->
<DIV align="left"><A NAME="008"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4. Controls and Procedures</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under the supervision and with the participation of our management, including our chief executive
officer and our chief financial officer, we have evaluated the effectiveness of the design and
operation of our disclosure controls and procedures as defined in Rule&nbsp;13a-15(e) of the Securities
Exchange Act of 1934. These controls and procedures are designed to ensure that material
information relating to the company and its subsidiaries is communicated to the chief executive
officer and the chief financial officer. Based on that evaluation, our chief executive officer and
our chief financial officer concluded that, as of March&nbsp;31, 2008, our disclosure controls and
procedures are effective to ensure that information required to be disclosed by us in reports that
we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to the
chief executive officer and the chief financial officer, and recorded, processed, summarized and
reported within the time periods specified in Securities and Exchange Commission rules and forms.
Disclosure controls and procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by an issuer in the reports that it files or
submits under the Act is accumulated and communicated to the issuer&#146;s management, including its
principal executive and principal financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There were no changes in our internal control over financial reporting during the three months
ended March&nbsp;31, 2008, that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
</DIV>
<!-- link1 "PART II &#151; OTHER INFORMATION" -->
<DIV align="left"><A NAME="009"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>PART II &#151; OTHER INFORMATION</B>
</DIV>

<!-- link2 "Item&nbsp;1. Legal Proceedings" -->
<DIV align="left"><A NAME="010"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><b>Item&nbsp;1. Legal Proceedings</B><B>.</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.
</DIV>
<!-- link2 "Item&nbsp;1A. Risk Factors" -->
<DIV align="left"><A NAME="011"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;1A. Risk Factors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are no changes from those listed in the Company&#146;s Annual Report on Form&nbsp;10-K
for the year ended December&nbsp;31, 2007.
</DIV>

<!-- link2 "Item&nbsp;2. Unregistered Sales of Equity Securities and Use of Proceeds" -->
<DIV align="left"><A NAME="012"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;2. Unregistered Sales of Equity Securities and Use of Proceeds.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->12<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link2 "Item&nbsp;3. Defaults Upon Senior Securities" -->
<DIV align="left"><A NAME="013"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;3. Defaults Upon Senior Securities.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.
</DIV>
<!-- link2 "Item&nbsp;4. Submission of Matters to a Vote of Securities Holders" -->
<DIV align="left"><A NAME="014"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4. Submission of Matters to a Vote of Securities Holders.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.
</DIV>
<!-- link2 "Item&nbsp;5. Other Information" -->
<DIV align="left"><A NAME="015"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;5. Other Information.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.
</DIV>
<!-- link2 "Item&nbsp;6. Exhibits and Reports on Form&nbsp;8-K" -->
<DIV align="left"><A NAME="016"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;6. Exhibits and Reports on Form&nbsp;8-K.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Exhibits
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following exhibits are filed herewith:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Exhibit Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.30a
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Addendum One to Lease Agreement for a Gamma Knife Unit dated January
9, 2008 between GK Financing, LLC and The Community Hospital Group,
Inc. dba JFK Medical Center. (Confidential material appearing in this
document has been omitted and filed separately with the Securities and
Exchange Commission in accordance with Rule&nbsp;24b-2, promulgated under
the Securities and Exchange Act of 1934, as amended. Omitted
information has been replaced with asterisks).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.30b
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Addendum Two to Lease Agreement for a Gamma Knife Unit dated January
9, 2008 between GK Financing, LLC and The Community Hospital Group,
Inc. dba JFK Medical Center. (Confidential material appearing in this
document has been omitted and filed separately with the Securities and
Exchange Commission in accordance with Rule&nbsp;24b-2, promulgated under
the Securities and Exchange Act of 1934, as amended. Omitted
information has been replaced with asterisks).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.57
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Purchased Services Agreement for a Gamma Knife
Perfexion Unit dated as of March&nbsp;5, 2008 between GK Financing, LLC and
USC University Hospital,
Inc. (Confidential material appearing in this
document has been omitted and filed separately with
the Securities and Exchange Commission in accordance
with Rule&nbsp;24b-2, promulgated under the Securities and
Exchange Act of 1934, as amended. Omitted
information has been replaced with asterisks).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section&nbsp;302 of the Sarbanes-Oxley Act of
2002.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section&nbsp;302 of the Sarbanes-Oxley Act of
2002.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of
2002.</TD>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->13<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="017"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">SIGNATURES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">AMERICAN SHARED HOSPITAL SERVICES<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Registrant<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Date: May 14, 2008&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Ernest A. Bates, M.D.
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Ernest A. Bates, M.D.&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Chairman of the Board and Chief Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left"> Date: May 14, 2008&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Craig K. Tagawa
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Craig K. Tagawa&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Senior Vice President
<BR>
Chief Operating and Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->14<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.30A
<SEQUENCE>2
<FILENAME>f40856exv10w30a.htm
<DESCRIPTION>EXHIBIT 10.30A
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w30a</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;10.30a</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ADDENDUM ONE<BR>
TO LEASE AGREEMENT FOR A GAMMA KNIFE UNIT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This ADDENDUM ONE TO LEASE AGREEMENT FOR A GAMMA KNIFE UNIT (this &#147;Addendum&#148;) is dated on
January&nbsp;9, 2008, but is made effective as of July&nbsp;1, 2002, between The Community Hospital Group,
Inc., dba JFK Medical Center, a New Jersey corporation (&#147;JFK&#148;), and GK Financing, LLC, a California
limited liability company (&#147;GKF&#148;).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RECITALS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, on or about December&nbsp;11, 1996, GKF and JFK executed a Lease Agreement for a Gamma
Knife Unit (the &#147;Original Lease&#148;);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, effective July&nbsp;1, 2002, the parties verbally agreed to modify certain terms of the
Original Lease, but inadvertently neglected to execute a document memorializing the same; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the parties desire to enter into this Addendum in order to memorialize their verbal
agreement effective July 1 2002, to modify terms of the Original Lease.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AGREEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;<U>Defined Terms</U>. Unless otherwise defined herein, the capitalized terms used herein
shall have the same meaning set forth in the Original Lease.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;<U>Per Procedure Payments</U>. In recognition of the decreases in the Medicare
reimbursement rates which occurred after the Original Lease was entered into, and pursuant to
Section&nbsp;7 of the Original Lease, the per procedure payment for the use of the Equipment shall be
reduced from the per procedure rate set forth in the Original Lease of * per procedure, to the
following amounts:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>From July&nbsp;1, 2002 through and including December&nbsp;31, 2002,
the per procedure payment payable by JFK to GKF shall be equal to * per
procedure.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>From and after January&nbsp;1, 2003, the per procedure payment
payable by JFK to GKF shall be * per procedure.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;<U>Marketing Support</U>. The last sentence of Section 9(e) of the Original Lease shall
be deleted in its entirety and replaced with the following:
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 1 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&#147;As funds are expended by JFK in accordance with the marketing
budget and plan, JFK shall submit invoices (together with
documentary evidence supporting the invoices) for its expenditures
and, promptly following the receipt of such invoices, GKF shall
reimburse JFK for * of the expenditures up to the GKF limit of *
per year.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;<U>Full Force and Effect</U>. Except as otherwise amended hereby or provided herein, all
of the terms and provisions of the Original Lease shall remain in full force and effect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties have executed this Addendum effective as of the date first
written above.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000"><U><B>GKF:</B>&nbsp;</u></TD>
    <TD style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 0px solid #000000"><U><B>JFK:</B>&nbsp;</u></TD>
    <TD style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">GK FINANCING, LLC</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left">THE COMMUNITY HOSPITAL GROUP, INC.,</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left">dba JFK Medical Center</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Ernest A. Bates, M.D.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ J. Scott Gebhard</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Ernest A. Bates, M.D.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-bottom: 0px solid #000000">J. Scott Gebhard</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Policy Committee Member
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">EVP/COO
<DIV style="font-size: 1pt; border-top: 0px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->- 2 -<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.30B
<SEQUENCE>3
<FILENAME>f40856exv10w30b.htm
<DESCRIPTION>EXHIBIT 10.30B
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w30b</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="RIGHT" style="font-size: 10pt; margin-top: 6pt"><b>Exhibit
10.30b</B></div>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ADDENDUM TWO<BR>
TO LEASE AGREEMENT FOR A GAMMA KNIFE UNIT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This ADDENDUM TWO TO LEASE AGREEMENT FOR A GAMMA KNIFE UNIT (this &#147;Addendum&#148;) is dated
effective as of January&nbsp;9, 2008, between The Community Hospital Group, Inc., dba JFK Medical
Center, a New Jersey corporation (&#147;JFK&#148;), and GK Financing, LLC, a California limited liability
company (&#147;GKF&#148;).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RECITALS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, on December&nbsp;11, 1996, GKF and JFK executed a Lease Agreement for a Gamma Knife Unit
(the &#147;Original Lease&#148;), which lease agreement was amended by a certain Addendum One dated effective
as of July&nbsp;1, 2002 (such Lease Agreement, as amended by such Addendum One, is referred to herein as
the &#147;Lease&#148;); and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the parties desire to further amend the terms and provisions of the Lease as set
forth herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AGREEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;<U><B>Defined Terms</B>.</U> Unless otherwise defined herein, the capitalized terms used herein
shall have the same meanings set forth in the Lease.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;<U><B>Extension of Lease Term</B></U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. It is acknowledged that the First Procedure Date under the Lease was April&nbsp;25, 2000, and
therefore, pursuant to Section&nbsp;4 of the Lease, the initial Term of the Lease will expire at 11:59
p.m. on April&nbsp;24, 2010.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. In consideration of the &#147;Reload&#148; of the cobalt-60 source as described below, the Term of
the Lease as set forth in Section&nbsp;4 thereof, is hereby extended for an additional five (5)&nbsp;year
period (the &#147;Extension&#148;), which Extension shall commence at 12:00&nbsp;a.m. on April&nbsp;25, 2010, and shall
continue until 11:59&nbsp;p.m. on April&nbsp;24, 2015, at which time the Term shall expire.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. All references in the Lease to the &#147;Term&#148; shall be deemed to refer to the Term, as extended
by the Extension.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;<U><B>Cobalt Reload of the Equipment</B></U><B>. </B>Section&nbsp;15 of the Lease is hereby deleted in its
entirety and replaced with the following:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;15.1 <U>Cobalt Reload</U>. Subject to the terms and conditions set forth
below, (a)&nbsp;GKF, at GKF&#146;s cost and expense, shall reload the Equipment
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 1 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">with new
cobalt-60 that meets the manufacturer&#146;s radioactivity level specifications (the
&#147;Reload&#148;), which Reload shall be performed at the Site and shall include any
required installation and rigging; and (b)&nbsp;GKF shall use its commercially
reasonable efforts to perform the Reload in first quarter 2008, subject to
scheduling availability. It is anticipated that the Equipment will be unavailable
to perform procedures for approximately four (4)&nbsp;weeks due to the Reload process.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;15.2 <U>JFK Support</U>. In connection with the Reload, JFK, at JFK&#146;s cost
and expense, shall provide GKF with JFK personnel (including JFK&#146;s physicists) and
services upon request and as required by GKF, among other things, to oversee,
supervise and assist with construction and compliance with local, state and
federal regulatory requirements and with nuclear regulatory compliance issues and
the calibration of the Equipment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;15.3 <U>Permits</U>. Notwithstanding the foregoing, the Reload shall be
performed by GKF only after all necessary and appropriate licenses, permits,
approvals, consents and authorizations, including, without limitation, the proper
handling of the cobalt-60 (collectively, the &#147;Permits&#148;), have been obtained by JFK
at JFK&#146;s sole cost and expense (other than any filing or registration fees which
shall be paid for by GKF). The timing and procedure for such Reload shall be as
mutually agreed upon between the parties. Notwithstanding anything to the
contrary
contained in this Agreement, GKF makes no representation or warranty to JFK
concerning the Reload, and GKF shall have no obligation or liability to pay any
damages to JFK resulting therefrom, including, without limitation, any lost
revenues or profits during the period of time that the Equipment is unavailable to
perform procedures due to the Reload process.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;<U><B>Per Procedure Payment</B></U><B>. </B>Commencing from and after the first procedure performed
using the Equipment following the completion of the cobalt-60 Reload, the per procedure payment for
the use of the Equipment as set forth in Section&nbsp;7 of the Lease shall be equal to * per procedure.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;<U><B>No Responsibility for Additional Upgrades or Reloading</B></U><B>. </B>It is understood by the
parties that GKF is not responsible for any additional upgrades, hardware, cobalt reloading,
software changes and/or other modifications to the Equipment, except as expressly set forth herein
or otherwise agreed upon in writing by JFK and GKF.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;<U><B>Assignment
by GKF to Subsidiary. </B></U>GKF may, at any time, assign all of its rights and
obligations under the Lease (as now or hereafter amended) to its wholly-owned subsidiary whose
obligations thereunder shall be guaranteed by GKF.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;<U><B>Captions</B></U><B>. </B>The captions and paragraph headings used herein are for convenience only
and shall not be used in construing or interpreting this Addendum Two.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 2 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;<U><B>Full Force and Effect</B></U><B>. </B>Except as amended by this Addendum Two, all of the terms
and provisions of the Lease shall remain in full force and effect, including, without limitation,
the charity care provisions set forth in Section&nbsp;7 of the Lease.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties have executed this Addendum Two effective as of the date first
written above.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000"><U><B>GKF:&nbsp;</B></u></TD>
    <TD style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 0px solid #000000"><U><B>JFK:&nbsp;</B></u></TD>
    <TD style="border-bottom:0px solid #000000">&nbsp;</TD>
    <TD style="border-bottom:0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<tr>
    <TD>&nbsp;</TD>
</tr>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">GK FINANCING, LLC</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left">THE COMMUNITY HOSPITAL GROUP, INC.,</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left">dba JFK Medical Center</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Ernest A. Bates, M.D.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ J. Scott Gebhard</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Ernest A. Bates, M.D.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-bottom: 0px solid #000000">J. Scott Gebhard</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Policy Committee Member
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">EVP/COO
<DIV style="font-size: 1pt; border-top: 0px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
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<DOCUMENT>
<TYPE>EX-10.57
<SEQUENCE>4
<FILENAME>f40856exv10w57.htm
<DESCRIPTION>EXHIBIT 10.57
<TEXT>
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<TITLE>exv10w57</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;10.57</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>PURCHASED SERVICES AGREEMENT</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THIS PURCHASED SERVICES AGREEMENT </B>(&#147;Agreement&#148;) is made and entered into on March&nbsp;5, 2008, by
and between <B>GK FINANCING, LLC, </B>a California limited liability company (&#147;GKF&#148;), or its wholly owned
subsidiary whose obligation under this agreement shall be guaranteed by GKF, and <B>USC UNIVERSITY
HOSPITAL, Inc. </B>(&#147;Hospital&#148;), with reference to the following facts:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>R E C I T A L S</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, Hospital wants to obtain the right to use a Leksell Gamma Knife Perfexion (the
&#147;Equipment&#148;), manufactured by Elekta Instruments, Inc., a Georgia corporation (&#147;Elekta&#148;); and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, GKF is willing to provide Hospital with the right to use the Equipment which GKF has
acquired from Elekta, pursuant to the terms and conditions of this Agreement; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, Hospital is willing to transfer ownership of its current Gamma Knife Model C unit,
serial number <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (the &#147;Model C&#148;) to GKF for *.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>A G R E E M E N T</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOW, THEREFORE, </B>in consideration of the mutual covenants, conditions and agreements set forth
herein, and for such other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;<U>Right to Use the Equipment</U>. Subject to and in accordance with the covenants and
conditions set forth in this Agreement, GKF hereby grants the right to use the Equipment to
Hospital, and Hospital hereby accepts the right to use the Equipment from GKF. The Equipment to be
placed at the Hospital pursuant to this Agreement shall include the Gamma Knife technology as
specified in Exhibit&nbsp;1, including all hardware and software related thereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;<U>LGK Agreement</U>. Simultaneously with the execution of this Agreement, Hospital and
Elekta shall enter into that certain Leksell Gamma Knife End User Agreement (the &#147;LGK Agreement&#148;),
a copy of which is attached hereto as Exhibit&nbsp;2. Hospital shall perform, satisfy and fulfill all
of its obligations arising under the LGK Agreement when and as required thereunder. Hospital
acknowledges that GKF is a third party beneficiary of the LGK Agreement and, in that capacity, GKF
shall be entitled to enforce Hospital&#146;s performance, satisfaction and fulfillment of its
obligations thereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;<U>Term of the Agreement</U>. The initial term of this Agreement (the &#147;Term&#148;) shall
commence as of the date hereof and, unless earlier terminated or extended in accordance with the
provisions of this Agreement, shall continue for a period of ten (10)&nbsp;years following the date of
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the performance of the first clinical Procedure (as defined in Section&nbsp;8) performed on the
Equipment (the &#147;First Procedure Date&#148;) at the Site (as defined in Section&nbsp;5.1). The parties agree
to amend this Agreement to memorialize the First Procedure Date upon the performance of the first
clinical Procedure performed on the Equipment. Hospital&#146;s obligation to make the Purchased
Services Payments to GKF for the Equipment described in Section&nbsp;8 below shall commence as of the
First Procedure Date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;<U>User License</U>. Hospital shall apply for and use its reasonable efforts to obtain in
a timely manner a User License from the Nuclear Regulatory Commission and, if necessary, from the
applicable state agency authorizing it to take possession of and maintain the Cobalt supply
required in connection with the use of the Equipment during the term of this Agreement. Hospital
also shall apply for and use its reasonable efforts to obtain in a timely manner all other
licenses, permits, approvals, consents and authorizations which may be required by state or local
governmental or other regulatory agencies for the development, construction and preparation of the
Site, the charging of the Equipment with its Cobalt supply, the conduct of acceptance tests with
respect to the Equipment, and the use of the Equipment during the Term, as more fully set forth in
Article&nbsp;2.1 of the LGK Agreement. GKF shall provide assistance to the Hospital in applying for and
for obtaining all such licenses, permits, approvals, consents or authorizations. If the applicable
regulatory authorities affirmatively decline to issue a required license, permit, approval, consent
or authorization notwithstanding Hospital&#146;s best efforts to obtain the same, all parties shall be
released from further performance or any obligations or duties arising under this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;<U>Delivery of Equipment; Site</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 GKF shall coordinate with Elekta and Hospital to have the Equipment delivered to Hospital
at the site at which the Model C is currently located, as described in Exhibit&nbsp;5.1 of this
Agreement (the &#147;Site&#148;), which delivery shall be on or prior to the delivery date agreed upon by
Elekta and GKF when the Equipment is ordered by GKF. GKF makes no representations or warranties
concerning delivery of the Equipment to the Site or the actual date thereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 Hospital shall provide access to the Site for the Equipment. GKF at its cost and expense
shall prepare the Site for the Equipment in accordance with Elekta&#146;s guidelines, specifications,
technical instructions and site planning criteria (which site planning criteria are attached as
Exhibit&nbsp;5.2 of this Agreement) (collectively the &#147;Site Planning Criteria&#148;). The location of the
Site has been agreed upon by Hospital and GKF as described in Exhibit&nbsp;5.1 of this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;<U>Site Preparation, Deinstallation of Model C and Installation of
Equipment</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 GKF, at its cost, expense and risk, shall prepare all plans and specifications required to
construct and improve the Site for the installation, use and operation of the Equipment during the
Term. The plans and specifications shall comply in all respects with
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the Site Planning Criteria and with all applicable federal, state and local laws, rules and
regulations. All plans and specifications prepared by or on behalf of GKF (and all material changes
thereto following approval by Hospital and Elekta) shall be subject to the written approval of
Hospital and Elekta prior to commencement of construction at the Site. GKF shall provide Hospital
and Elekta with a reasonable period of time for the review and consideration of all plans and
specifications following the submission thereof for approval. Following approval of the plans and
specifications by Hospital and Elekta, GKF, at its cost and expense, shall assist Hospital in
obtaining all permits, certifications, approvals or authorizations required by applicable federal,
state or local laws, rules or regulations necessary to construct and improve the Site for the
installation, use and operation of the Equipment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 Based upon the plans and specifications approved by Hospital and Elekta, GKF, at its cost,
expense and risk, shall prepare, construct and improve the Site as necessary for the installation,
use and operation of the Equipment during the Term, including, without limitation, providing all
temporary or permanent shielding required for the charging of the Equipment with the Cobalt supply
and for its subsequent use, selecting and constructing a proper foundation for the Equipment and
the temporary or permanent shielding, aligning the Site for the Equipment, and installing all
electrical systems and other wiring required for the Equipment. In connection with the
construction of the Site, GKF, at its cost and expense, shall select, purchase and install all
radiation monitoring equipment, devices, safety circuits and radiation warning signs required, if
any, at the Site in connection with the use and operation of the Equipment, all in accordance with
applicable federal, state and local laws, rules, regulations or custom.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 GKF, at its cost, expense and risk, shall be responsible for the installation of the
Equipment at the Site, including the positioning of the Equipment on its foundation at the Site in
compliance with the Site Planning Criteria.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 GKF ensures that, to its best knowledge, upon completion of construction, the Site shall
(a)&nbsp;comply in all respects with the Site Planning Criteria and all applicable federal, state and
local laws, rules and regulations, and (b)&nbsp;be safe and suitable for the ongoing use and operation
of the Equipment during the Term.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 GKF at its cost, expense and risk, shall coordinate with Elekta the deinstallation and
removal of the Model C including unloading and disposing of the cobalt.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 GKF shall use its reasonable efforts to satisfy its obligations under this Section&nbsp;6 in a
timely manner. GKF shall keep Hospital informed on a regular basis of its progress in the design
of the Site, the preparation of plans and specifications, the construction and improvement of the
Site, and the satisfaction of its other obligations under this Section&nbsp;6. In all events, GKF shall
complete all construction and improvement of the Site required for the installation, positioning
and testing of the Equipment on or prior to the delivery date described in Section&nbsp;5.1 above.
During the Term, Hospital, at its cost and expense, shall maintain the Site in a good working
order, condition and repair, reasonable wear and tear excepted.
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7 GKF shall be responsible for all costs and expenses in connection with Section&nbsp;6.1, 6.2,
6.3 and 6.5 up to *. All costs in excess of * shall be the responsibility of Hospital.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;<U>Marketing Support.</U> GKF, in coordination with Hospital, shall provide Hospital with
marketing support for the service to be provided by Hospital using the Equipment. Notwithstanding
the preceding sentence or any provision to the contrary herein, GKF shall not engage in any direct
or indirect marketing or advertising of the Gamma Knife services to be rendered by Hospital during
the term of this Agreement. Not less than ninety (90)&nbsp;days prior to the First Procedure Date and
the commencement of each succeeding twelve (12)&nbsp;month period during the Term, GKF and Hospital
shall develop a mutually agreed upon marketing budget and plan (&#147;Plan&#148;) for the clinical service to
be supported by the Equipment for the succeeding twelve (12)&nbsp;month period of the Term. Once
approved, the Plan shall be implemented by Hospital in accordance with its terms. If Hospital has
not approved or disapproved of the Plan within thirty (30)&nbsp;days following its receipt, Hospital
shall be deemed to have approved the same. All advertisements, brochures and other marketing
materials pertaining to the Plan shall be subject to review and written approval by Hospital and
GKF prior to their use. Hospital and GKF shall discuss the Plan on a regular basis not less than
once per quarter. Hospital&#146;s and any Hospital subsidiary&#146;s or related corporation&#146;s name,
trademarks, service marks, or other identifying names, marks, images or designations shall be and
remain the sole and exclusive property of Hospital, but which may be used in any approved marketing
materials without payment of any license or royalty fee. As funds are expended by Hospital in
accordance with the Plan, Hospital shall submit invoices (together with documentary evidence
supporting the invoices) for its expenditures and, promptly following the receipt of such invoices,
GKF shall reimburse Hospital for * of approved expenditures. GKF&#146;s reimbursement to Hospital shall
not exceed an average of * annually during the term of the Agreement. It is acknowledged by the
parties that such expenses to be reimbursed by GKF as provided in Section&nbsp;7 have been included in
GKF&#146;s calculation of Hospital&#146;s Purchased Services Payments so as to allow GKF to recover such GKF
expenses during the Term of this Agreement; provided that, without limiting or otherwise affecting
Hospital&#146;s obligation to pay the Purchased Services Payments as set forth herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;<U>Purchased Services Payments.</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The parties have negotiated this Agreement at arm&#146;s length based upon reasonable, jointly
derived, assumptions regarding the capacity for clinical services available from the Equipment,
Hospital&#146;s capabilities in providing high quality radiation oncology services and market dynamics,
GKF&#146;s risk in providing the Equipment, and the provision to GKF of a reasonable rate of return on
its investment in support of the Equipment. Based thereon, the Parties believe that the &#147;Purchased
Services Payments&#148; as defined below represent fair market value for the use of the Equipment, the
deinstallation and removal of the Model C, the preparation, construction and improvement of the
Site, and the marketing support and other services to be provided by GKF to Hospital hereunder.
Hospital undertakes no obligation to perform any minimum number of Procedures on the Equipment and
the use of the Equipment for
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the performance of Procedures is wholly based on the independent judgment of physicians who
order such Procedures to meet the medical needs of their patients.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;In consideration for and as compensation to GKF for deinstallation and removal of the
Model C, the preparation, construction and improvement of the Site, installation of the Equipment
and marketing support and the other additional services to be provided by GKF under this Agreement,
Hospital shall pay to GKF, on a monthly basis, the applicable per Procedure payments set forth in
Exhibit&nbsp;8 of this Agreement (the &#147;Purchased Services Payments&#148;) for each &#147;Procedure&#148; that is
performed by Hospital or its representatives or affiliates, whether on an inpatient or outpatient
basis, and irrespective of whether the Procedure is performed on the Equipment or using any other
equipment or devices, including any &#147;Additional GK Unit&#148; (defined below); <U>provided</U> that no
Purchased Services Payments shall be payable for any Procedures performed at the Hospital using the
Cyberknife equipment as presently configured, upgraded or replaced and located at the Hospital on
the date hereof. Notwithstanding the foregoing, and for the avoidance of doubt, if at any time in
addition to the Equipment, Hospital purchases, leases or otherwise acquires the use of a Leksell
Gamma Knife unit(s) of any model type or configuration (an &#147;Additional GK Unit&#148;), then, in addition
to the Purchased Services Payments that are payable to GKF for Procedures performed using the
Equipment as set forth above, Hospital shall pay to GKF the Purchased Services Payments on a
monthly basis for any and all Procedures performed at the Hospital using the Additional GK Unit,
whether on an inpatient or outpatient basis. As used herein, a &#147;Procedure&#148; means any treatment
that involves stereotactic, external, single fraction, conformal radiation, commonly called
radiosurgery, that may include one or more isocenters during the patient treatment session,
delivered to any site(s) superior to the foramen magnum.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;GKF shall submit an invoice to Hospital on the fifteenth (15th) and the last day of each
calendar month (or portion thereof) for the actual number of Procedures performed utilizing the
Equipment (and, if applicable, any Additional GK Unit) during the first and second half of the
calendar month, respectively. Upon request by GKF, Hospital shall inform GKF in writing as to the
number of Procedures performed during that month utilizing the Equipment and any other equipment or
devices. If no Procedures are performed by Hospital or any other person utilizing the Equipment
(and, if applicable, any Additional GK Unit), no Purchased Services Payments shall be owing by
Hospital to GKF. Hospital shall pay the invoice within forty-five (45)&nbsp;days after submission by
GKF to Hospital. All or any portion of an invoice which is not paid in full within ninety (90)
days after submission shall bear interest at the rate of one and one-half percent (1.50%) per month
(or the maximum monthly interest rate permitted to be charged by law between an unrelated,
commercial borrower and lender, if less) until the unpaid invoice together with all accrued
interest thereon is paid in full. Subject to Section&nbsp;20.1.1 below, if GKF shall at any time accept
a Purchased Services Payment from Hospital after it shall become due, such acceptance shall not
constitute or be construed as a waiver of any or all of GKF&#146;s rights under this Agreement,
including the rights of GKF set forth in Section&nbsp;20 hereof.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Within ten (10)&nbsp;days after Hospital&#146;s receipt of written request by GKF, GKF shall have
the right to audit Hospital&#146;s books and records (including, without limitation, the books and
records pertaining to any other radiosurgery equipment or devices) during normal business hours to
verify the number of Procedures that have been performed by Hospital utilizing the Equipment and
any other equipment or devices, and Hospital shall provide GKF with access to such books and
records; provided that any patient names or identifiers or other Protected Health Information shall
not be disclosed.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;<U>Use of the Equipment</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 The Equipment shall be used by Hospital only at the Site and shall not be removed
therefrom. Hospital shall use the Equipment only in the regular and ordinary course of Hospital&#146;s
business operations and only within the capacity of the Equipment as determined by Elekta&#146;s
specifications. Hospital shall not use nor permit the Equipment to be used in any manner nor for
any purpose which, in the opinion of Elekta or GKF, the Equipment is not designed or reasonably
suitable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 Notwithstanding anything to the contrary contained in this Agreement, this is an agreement
of purchasing a service only. Nothing herein shall be construed as conveying to Hospital any
right, title or interest in or to the Equipment, except for the express right to use the Equipment
granted herein to Hospital for the Term. All Equipment shall remain personal property (even though
said Equipment may hereafter become attached or affixed to real property) and the title thereto
shall at all times remain exclusively in GKF.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 During the Term, upon the request of GKF, Hospital shall promptly affix to the Equipment
in a prominent place, or as otherwise directed by GKF, labels, plates, insignia, lettering or other
markings supplied by GKF indicating GKF&#146;s ownership of the Equipment, and shall keep the same
affixed for the entire Term. Hospital hereby authorizes GKF to cause this Agreement or any
statement or other instrument showing the interest of GKF in the Equipment to be filed or recorded,
or refiled or re-recorded, with all governmental agencies considered appropriate by GKF. Hospital
also shall promptly execute and deliver, or cause to be executed and delivered, to GKF any
statement or instrument reasonably requested by GKF for the purpose of evidencing GKF&#146;s interest in
the Equipment, including financing statements and waivers with respect to rights in the Equipment
from any owners or mortgagees of any real estate where the Equipment may be located.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 At Hospital&#146;s cost and expense, Hospital shall (a)&nbsp;protect and defend GKF&#146;s ownership of
and title to the Equipment from and against all persons claiming against or through Hospital, (b)
at all times keep the Equipment free from any and all liens, encumbrances, attachments, levies,
executions, burdens, charges or legal processes imposed against Hospital, (c)&nbsp;give GKF immediate
written notice of any matter described in clause (b), and (d)&nbsp;in the manner described in Section&nbsp;22
below indemnify GKF harmless from and against any loss, cost or expense (including reasonable
attorneys&#146; fees) with respect to any of the foregoing.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;<U>Additional Covenants of Hospital</U>. In addition to the other covenants of Hospital
contained in this Agreement, Hospital shall, at its cost and expense:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 Provide properly trained professional, technical and support personnel and supplies
required for the proper performance of Gamma Knife procedures utilizing the Equipment. In this
regard, Hospital shall make reasonable efforts to maintain on staff a minimum of two (2)&nbsp;Gamma
Knife trained teams comprised of neurosurgeons, radiation oncologists and physicists. The Gamma
Knife shall be available for use by all credentialed neurosurgeons, radiation oncologists and
physicists.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 Direct, supervise and administer the provision of all services relating to the
performance of Procedures utilizing the Equipment in accordance with all applicable laws, rules and
regulations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 Provide reasonable and customary marketing materials (i.e. brochures, announcements,
etc.) together with administrative and physician support (e.g., seminars for physicians by
neurosurgeons and radiation therapists, in accordance with Hospital&#146;s policies and procedures,
etc.) for the Equipment to be operated by the Hospital. The obligation to provide marketing
materials and administration and physician support shall be included in, and not in addition to,
the annual marketing budget referenced in Section&nbsp;7 above.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4 Keep and maintain the Equipment and the Site fully protected, secure and free from
unauthorized access or use by any person to the extent that Hospital provides security for its
other radiation oncology services.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.5 Operate a fully functional radiation therapy department at the Site or Affiliate site
which shall include the Equipment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;<U>Additional Covenants of GKF</U>. In addition to the other covenants of GKF contained
in this Agreement, GKF, at its cost and expense, shall:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 Use its best efforts to require Elekta to meets its contractual obligations to GKF and
Hospital upon delivery of the Equipment and put the Equipment, as soon as reasonably possible, into
good, safe and serviceable condition and fit for its intended use in accordance with the
manufacturer&#146;s specifications, guidelines and field modification instructions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 Cause Hospital to enjoy the use of the Equipment, free of the rights of any other persons
except for those rights reserved by GKF or granted to Elekta under the LGK Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;<U>Maintenance of Equipment; Damage or Destruction of Equipment</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 During the Term and except as otherwise provided in this Agreement, GKF, at its cost and
expense, shall (a)&nbsp;maintain the Equipment in good operating condition and
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">repair, reasonable wear and tear excepted, and (b)&nbsp;maintain in full force and effect a service
agreement with Elekta (&#147;Service Agreement&#148;) and any other service or other agreements required to
fulfill GKF&#146;s obligation to repair and maintain the Equipment under this Section&nbsp;12. Hospital
shall promptly notify GKF in the event of any damage or destruction to the Equipment or of any
required maintenance or repairs to the Equipment, regardless of whether such repairs or maintenance
are covered or not covered by the Service Agreement. GKF shall pursue all remedies available to it
under the Service Agreement and under any warranties made by Elekta with respect to the Equipment
so that the Equipment will be free from defects in design, materials and workmanship and will
conform to Elekta&#146;s technical specifications concerning the Equipment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 GKF and Elekta shall have the right to access the Equipment for the purpose of inspection
and the performance of repairs at all reasonable times, upon reasonable advance notice and with a
minimum of interference or disruptions to Hospital&#146;s regular business operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 Hospital shall be liable for, and in the manner described in Section&nbsp;22 below shall
indemnify GKF from and against, any damage to or destruction of the Equipment caused by the misuse,
improper use, or other intentional and wrongful or negligent acts or omissions of Hospital&#146;s
officers, employees, agents, contractors and physicians. In the event the Equipment is damaged as
a result of the misuse, improper use, or other intentional and wrongful or negligent acts or
omissions of Hospital&#146;s officers, employees, agents, contractors and/or physicians, to the extent
such damage is not covered by the Service Agreement or any warranties or insurance, GKF may service
or repair the Equipment as needed and the cost thereof shall be paid by Hospital to GKF immediately
upon written request together with interest thereon at the rate of one and one-half percent (1.50%)
per month (or the maximum monthly interest rate permitted to be charged by law between an
unrelated, commercial borrower and lender, if less) and reasonable attorneys&#146; fees and costs
incurred by GKF in collecting such amount from Hospital. Any work so performed by GKF shall not
deprive GKF of any of its rights, remedies or actions against Hospital for such damages.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 If the Equipment is rendered unusable as a result of any physical damage to or
destruction of the Equipment, Hospital shall give GKF written notice thereof. GKF shall determine,
within thirty (30)&nbsp;days after it is given written notice of such damage or destruction, whether the
Equipment can be repaired. In the event GKF determines that the Equipment cannot be repaired (a)
subject to Section&nbsp;12.3 above, GKF, at its cost and expense, shall replace the Equipment as soon as
reasonably possible taking into account the availability of replacement equipment from Elekta,
Elekta&#146;s other then existing orders for equipment, and the then existing limitations on Elekta&#146;s
manufacturing capabilities, (b)&nbsp;the Term of this Agreement shall be extended for the period of time
the Equipment is unusable, and (c)&nbsp;this Agreement shall continue in full force and effect as though
such damage or destruction had not occurred. In the event GKF determines that the Equipment can be
repaired, GKF shall cause the Equipment to be repaired as soon as reasonably possible thereafter.
Hospital shall fully cooperate with GKF to effect the
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">replacement of the Equipment or the repair of the Equipment (including, without limitation,
providing full access to the Site) following the damage or destruction thereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;<U>Alterations and Upgrades to Equipment</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 Hospital shall not make any modifications, alterations or additions to the Equipment
(other than normal operating accessories or controls) without the prior written consent of GKF.
Hospital shall not, and shall not permit any person other than representatives of Elekta or any
other person authorized by GKF to, effect any inspection, adjustment, preventative or remedial
maintenance, or repair to the Equipment without the prior written consent of GKF. All
modifications, alterations, additions, accessories or operating controls incorporated in or affixed
to the Equipment (herein collectively called &#147;additions&#148; and included in the definition of
&#147;Equipment&#148;) shall become the property of the GKF upon termination of this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2 The necessity and financial responsibility for modifications, additions or upgrades to
the Equipment, including the reloading of the Cobalt-60 source, shall be mutually agreed upon by
GKF and Hospital. In the event GKF and Hospital agree to reload the Cobalt-60 source (i.e., in
approximately the seventh (7th) year of the Term), and GKF pays the costs associated therewith,
notwithstanding any provisions to the contrary herein, the initial Term shall be automatically
extended for an additional two years.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;<U>Financing of Equipment by GKF</U>. GKF, in its sole discretion, may finance the
Equipment. Financing may be in the form of an installment loan, a capitalized lease or other
commercially available debt or financing instrument. If GKF finances the Equipment through an
installment loan, GKF shall be required to provide the Equipment as collateral for the loan. If
GKF finances the Equipment through a capitalized lease, title shall vest with the lessor until such
time as GKF exercises its buy-out option under the lease, if any. If required by the lender,
lessor or other financing entity (the &#147;Lender&#148;), GKF may assign its interest under this Agreement
as security for the financing. Hospital&#146;s interest under this Agreement shall be subject to the
interests of the Lender.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;<U>Equipment Operational Costs</U>. Except as otherwise expressly provided in this
Agreement, Hospital shall be responsible and liable for all costs and expenses incurred, directly
or indirectly, in connection with the operation and use of the Equipment during the Term,
including, without limitation, the costs and expenses required to provide trained physicians,
professionals, and technical and support personnel, supplies and other items required to properly
operate the Equipment and perform Procedures.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;<U>Taxes</U>. GKF shall pay all sales or use taxes imposed or assessed in connection
with the use or purchase of the Equipment and all personal property taxes imposed, levied or
assessed on the ownership and possession of the Equipment during the Term. All other taxes,
assessments, licenses or other charges imposed, levied or assessed on the Equipment during the Term
shall be paid by Hospital before the same shall become delinquent, whether such taxes are assessed
or would ordinarily be assessed against GKF or Hospital; provided, however, Hospital
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">shall not be required to pay any federal, state or local income, franchise, corporation or
excise taxes imposed upon GKF&#146;s net income realized from the lease of the Equipment. In case of a
failure by either party to pay any taxes, assessments, licenses or other charges when and as
required under this Section, the other party may pay all or any part of such taxes, in which event
the amount paid by such paying party shall be immediately payable to the paying party upon written
request together with interest thereon at the rate of at the rate of one and one-half percent
(1.50%) per month (or the maximum monthly interest rate permitted to be charged by law between an
unrelated, commercial borrower and lender, if less).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;<U>No Warranties by GKF</U>. Hospital warrants that as of the First Procedure Date, it
shall have (a)&nbsp;thoroughly inspected the Equipment to the best of their knowledge, (b)&nbsp;determined
that to the best of its knowledge the Equipment is consistent with the size, design, capacity and
manufacture selected by it, and (c)&nbsp;satisfied itself that to the best of its knowledge the
Equipment is suitable for Hospital intended purposes and is good working order, condition and
repair. GKF will work with Hospital in good faith to remedy any problems identified in writing by
Hospital during Hospital&#146;s inspection. GKF SUPPLIES THE EQUIPMENT UNDER THIS AGREEMENT IN ITS &#147;AS
IS&#148; CONDITION. GKF, NOT BEING THE MANUFACTURER OF THE EQUIPMENT OR THE MANUFACTURER&#146;S AGENT, MAKES
NO WARRANTY OR REPRESENTATION, EITHER EXPRESSED OR IMPLIED, AS TO THE EQUIPMENT&#146;S MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE OR USE, DESIGN, CONDITION, DURABILITY, CAPACITY, MATERIAL OR
WORKMANSHIP OR AS TO PATENT INFRINGEMENT OR THE LIKE. As between GKF and Hospital, Hospital shall
bear all risks with respect to the foregoing warranties. GKF shall not be liable for any direct,
indirect and consequential losses or damages suffered by Hospital or by any other person, and
Hospital expressly waives any right to hold GKF liable hereunder for, any claims, demands and
liabilities arising out of or in connection with the design, manufacture, possession or operation
of the Equipment, including<B>, </B>without limitation, injury to persons or property resulting from the
failure of, defective or faulty design, operation, condition, suitability or use of the Equipment<B>.</B>
All warranty or other similar claims with respect to the Equipment shall be made by Hospital solely
and exclusively against Elekta and any other manufacturers or suppliers, but shall in no event be
asserted against GKF. In this regard and with prior written approval of GKF, Hospital may, in
GKF&#146;s name, but at Hospital sole cost and expense, enforce all warranties, agreements or
representations, if any, which may have been made by Elekta or manufacturers, suppliers or other
third parties regarding the Equipment to GKF or Hospital. GKF shall not be responsible for the
delivery or operation of the Equipment or for any delay or inadequacy of either or both of the
foregoing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.&nbsp;<U>Termination for Economic Justification</U>. If, following the initial thirty six (36)
months after the First Procedure Date and following each subsequent 12&nbsp;month period thereafter
during the Term, based upon the utilization of the Equipment and other factors considered relevant
by GKF in the exercise of its reasonable discretion, within a reasonable period of time after GKF&#146;s
written request, Hospital does not provide GKF with a reasonable economic justification to continue
this Agreement and the utilization of the Equipment at the Hospital, then
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and in that event, GKF shall have the option to terminate this Agreement by giving a written
notice thereof to Hospital not less than one hundred eighty (180)&nbsp;days prior to the effective date
of the termination designated in GKF&#146;s written notice. For purposes of this Section, &#147;reasonable
economic justification to continue this Agreement&#148; shall not be deemed to exist if, during the
twelve (12)&nbsp;month period immediately preceding the issuance of GKF&#146;s written notice of termination,
the &#147;Net Cash Flow&#148; is negative. As used herein, &#147;Net Cash Flow&#148; shall mean, for the applicable
period, (a)&nbsp;the aggregate Purchased Services Payments during such period, minus (b)&nbsp;the sum of the
aggregate (i)&nbsp;debt service on the Equipment, (ii)&nbsp;maintenance expenses, (iii)&nbsp;marketing support,
and (iv)&nbsp;Equipment-related personal property taxes and insurance during such period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.&nbsp;<U>Options to Extend Agreement</U>. As of the end of the Term, Hospital shall have the
option either to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.1 Extend the Term of this Agreement for a specified period of time and upon such other
terms and conditions as may be agreed upon by GKF and Hospital;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.2 Terminate this Agreement as of the expiration of the Term.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Hospital shall exercise one (1)&nbsp;of the two (2)&nbsp;options referred to above by giving an irrevocable
written notice thereof to GKF at least one (1)&nbsp;year prior to the expiration of the initial Term.
Any such notice shall be sufficient if it states in substance that Hospital elects to exercise its
option and states which of the two (2)&nbsp;options referred to above Hospital is exercising. If
Hospital fails to exercise the option granted herein at least one (1)&nbsp;year prior to the expiration
of the initial Term, the option shall lapse and this Agreement shall expire as of the end of the
initial Term. Further, if Hospital exercises the option specified in Section&nbsp;19.1 above and the
parties are unable to mutually agree upon the length of the extension of the Term or any other
terms or conditions applicable to such extension prior to the expiration of the Term, this
Agreement shall expire as of the end of the initial Term.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.&nbsp;<U>Events of Default by Hospital and Remedies</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.1 The occurrence of any one of the following shall constitute an event of default under
this Agreement (an &#147;Event of Default&#148;):
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.1.1 Hospital fails to pay any Purchased Services Payment when due pursuant to Paragraph&nbsp;8
above and such failure continues for a period of thirty (30)&nbsp;days after written notice thereof is
given by GKF or its assignee to Hospital; however, if Hospital cures the Purchased Services Payment
default within the applicable thirty (30)&nbsp;day period, such default shall not constitute an Event of
Default.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.1.2 Hospital attempts to remove, sell, transfer, encumber, assign, sublet or part with
possession of the Equipment or any items thereof, except as expressly permitted herein.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.1.3 Hospital fails to observe or perform any of its covenants, duties or obligations
arising under this Agreement or the LGK Agreement and such failure continues for a period of thirty
(30)&nbsp;days after written notice thereof by GKF to Hospital; however, if Hospital cures the default
within the applicable thirty (30)&nbsp;day period or if the default reasonably requires more than thirty
(30)&nbsp;days to cure, Hospital commences to cure the default during the initial thirty (30)&nbsp;day period
and Hospital diligently completes the cure within sixty (60)&nbsp;days following the end of the thirty
(30)&nbsp;day period, such default shall not constitute an Event of Default.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.1.4 Hospital ceases doing business as a going concern, makes an assignment for the benefit
of creditors, admits in writing its inability to pay its debts as they become due, files a
voluntary petition in bankruptcy, is adjudicated a bankrupt or an insolvent, files a petition
seeking for itself any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar arrangement under any present or future statute, law or regulation or files
an answer admitting the material allegations of a petition filed against it in any such proceeding,
consents to or acquiesces in the appointment of a trustee, receiver, or liquidator of it or of all
or any substantial part of its assets or properties, or it or its shareholders shall take any
action looking to its dissolution or liquidation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.1.5 Within sixty (60)&nbsp;days after the commencement of any proceedings against Hospital
seeking reorganization, arrangement, readjustment, liquidation, dissolution or similar relief under
any present or future statute, law or regulation, such proceedings shall not have been dismissed,
or if within thirty (30)&nbsp;days after the appointment without Hospital consent or acquiescence of any
trustee, receiver or liquidator of it or of all or any substantial part of its assets and
properties, such appointment shall not be vacated.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.1.6 Hospital is suspended or terminated from participation in the Medicare program.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.2 Upon the occurrence of an Event of Default with respect to Hospital, GKF may at its
option do any or all of the following:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.2.1 By written notice to Hospital, immediately terminate this Agreement as to the
Equipment, wherever situated. As a result of the termination, GKF may enter upon the Site and
remove the Equipment without liability of any kind or nature for so doing or GKF may demand that
Hospital remove and return the Equipment to GKF, all at Hospital sole cost and expense.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.2.2 Recover from Hospital as liquidated damages for the loss of the bargain represented by
this Agreement and not as a penalty an amount equal to the present value of the unpaid estimated
future Purchased Services Payments to be made by Hospital to GKF through the end of the Term
discounted at the rate of * which liquidated damages shall become immediately due and payable. The
unpaid estimated future Purchased Services Payments shall be based on the prior twelve (12)&nbsp;months
Purchased Services Payments made by Hospital to
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">GKF hereunder with an annual * increase thereof through the end of the Term. Hospital and GKF
acknowledge that the liquidated damages formula set forth in this Section&nbsp;20.2.2 constitutes a
reasonable method to calculate GKF&#146;s damages resulting from an Event of Default under the
circumstances existing as of the date of this Agreement. The liquidated damages remedy available
under this Section&nbsp;20.2.2 shall apply if and only to the extent an Event of Default has occurred
under Sections&nbsp;20.1.1 and/or 20.1.2 above.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.2.3 Sell, dispose of, hold, use or lease the Equipment, as GKF in its sole and absolute
discretion may determine (and GKF shall not be obligated to give preference to the sale, lease or
other disposition of the Equipment over the sale, lease or other disposition of similar Equipment
owned or leased by GKF).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.2.4 Exercise any other right or remedy which may be available to GKF under the Uniform
Commercial Code or any other applicable law or proceed by appropriate court action, without
affecting GKF&#146;s title or right to possession of the Equipment, to enforce the terms hereof or to
recover damages for the breach hereof or to cancel this Agreement as to the Equipment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.2.5 In addition to the foregoing remedies, Hospital shall be liable to GKF for all
reasonable attorneys fees, costs and expenses incurred by GKF as a result of the Event of Default
or the exercise of GKF&#146;s remedies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.3 Upon termination of this Agreement or the exercise of any other rights or remedies under
this Agreement or available under applicable law following an Event of Default, Hospital shall,
without further request or demand, pay to GKF all Purchased Services Payments and other sums owing
under this Agreement. In the event that Hospital shall pay the liquidated damages referred to in
Section&nbsp;20.2.2 above to GKF, GKF shall pay to Hospital promptly after receipt thereof all rentals
or proceeds received from the reletting or sale of the Equipment during the balance of the initial
Term (after deduction of all costs and expenses, including reasonable attorneys fees and costs,
incurred by GKF as a result of the Event of Default), said amount never to exceed the amount of the
liquidated damages paid by Hospital. However, Hospital acknowledges that GKF shall have no
obligation to sell the Equipment. Hospital shall in any event remain fully liable for all damages
as may be provided by law and for all costs and expenses incurred by GKF on account of such
default, including but not limited to, all court costs and reasonable attorneys&#146; fees. The rights
and remedies afforded GKF under this Agreement shall be deemed cumulative and not exclusive, and
shall be in addition to any other rights or remedies to GKF provided by law or in equity.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.&nbsp;<U>Insurance</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.1 During the Term, GKF shall, at its cost and expense, purchase and maintain in effect an
all risk property and casualty insurance policy covering the Equipment. The all risk property and
casualty insurance policy shall be for an amount not less than the replacement cost of the
Equipment. Hospital shall be named as an additional insured party on
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the all risk property and casualty insurance policy to the extent of its interest in the
Equipment arising under this Agreement. The all risk property and casualty insurance policy
maintained by GKF shall be evidenced by a certificate of insurance or other reasonable
documentation which shall be delivered by GKF to Hospital upon request following the commencement
of this Agreement and as of each annual renewal of such policy during the Term.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.2 During the Term, Hospital shall, at its cost and expense, purchase and maintain in effect
general liability and professional liability insurance policies covering the Site (together with
all premises where the Site is located) and the use or operation of the Equipment by Hospital or
its officers, directors, agents, employees, contractors or physicians. The general liability and
professional liability insurance policies shall provide coverage in amounts not less than One
Million Dollars ($1,000,000.00) per occurrence and Five Million Dollars ($5,000,000.00) annual
aggregate. GKF shall be named as additional insured party on the general liability and
professional liability insurance policies to be maintained hereunder by Hospital. The policies to
be maintained by Hospital hereunder shall be evidenced by a certificate of insurance or other
reasonable documentation which shall be delivered by Hospital upon request to GKF no later than the
First Procedure Date and as of each annual renewal of such policies during the Term.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.3 During the construction of the Site and prior to the First Procedure Date, Hospital, at
its cost and expense, shall purchase and maintain a general liability insurance policy which
conforms with the coverage amounts and other requirements described in Section&nbsp;21.2 above and which
names GKF as an additional insured party. The policy to be maintained by Hospital hereunder shall
be evidenced by a certificate of insurance or other reasonable documentation which shall be
delivered by Hospital to GKF prior to the commencement of any construction at the Site.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.4 During the Term, Hospital shall purchase and maintain all workers compensation insurance
to the maximum extent required by applicable law.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.&nbsp;<U>Indemnification</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.1 Hospital shall be liable for and shall indemnify, defend, protect and hold GKF and its
members, managers, officers, employees, agents and contractors (collectively &#147;GKF&#148;) harmless from
and against all losses, claims, damages, liabilities, assessments, deficiencies, actions,
proceedings, orders, judgments, liens, costs and other expenses (including reasonable attorney&#146;s
fees) of any nature or kind whatsoever asserted against or incurred by GKF (collectively &#147;Damages&#148;)
which in any manner arise out of or relate to (a)&nbsp;the failure by Hospital to fully perform, observe
or satisfy its covenants, duties or obligations contained in this Agreement or in the LGK
Agreement; (b)&nbsp;negligent, intentional or wrongful acts or omissions by Hospital or any of its
officers, directors, agents, contractors (or their subcontractors), or employees in connection with
the use and operation of the Equipment during the Term; (c)&nbsp;defects arising out of materials or
parts provided, modified or designed by Hospital for or with
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">respect to the Site; (d)&nbsp;the maintenance of the Site during the Term by Hospital; (e)&nbsp;Damages
to the Equipment caused by the negligent or wrongful acts or omissions of Hospital, its agents,
officers, employees or contractors (if the Equipment is destroyed or rendered unusable, subject to
Section&nbsp;22.6 below, this indemnity shall extend up to (but not exceed) the full replacement value
of the Equipment at the time of its destruction less salvage value, if any); (f)&nbsp;the events or
occurrences described in Article&nbsp;7.3 of the LGK Agreement to the same extent that Hospital agrees
to indemnify Elekta thereunder (other than with respect to the failure of the Site to comply with
the Site Planning Criteria or defective maintenance of the Equipment under the Service Agreement);
and (g)&nbsp;any other matters for which Hospital has specifically agreed to indemnify GKF pursuant to
this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.2 Upon the occurrence of an event for which GKF is entitled to indemnification under this
Agreement, GKF shall give written notice thereof to Hospital setting forth the type and amount of
Damages. If the indemnity relates to a Third Party Claim (as defined in Section&nbsp;22.3 below), the
matter shall be subject to Section&nbsp;22.3 below. If the indemnity relates to any Damages other than
a Third Party Claim, not more than thirty (30)&nbsp;days after GKF&#146;s written notice is given, Hospital
shall acknowledge its obligation in writing to GKF to indemnify hereunder and pay the Damages in
full to GKF.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.3 GKF shall give written notice to Hospital as soon as reasonably possible after GKF has
knowledge of any third party claim or legal proceedings (&#147;Third Party Claim&#148;) for which GKF is
entitled to indemnification under this Section&nbsp;22. Hospital shall (a)&nbsp;immediately assume, at its
sole cost and expense, the defense of the Third Party Claim with legal counsel approved by GKF
(which approval will not be unreasonably withheld, delayed or conditioned), and (b)&nbsp;as soon as
reasonably possible after GKF&#146;s written notice is given to Hospital, acknowledge in writing to GKF
its obligation to indemnify GKF in accordance with the terms of this Agreement. If Hospital fails
to assume the defense of a Third Party Claim or fails to timely acknowledge in writing its
obligation to indemnify GKF, GKF may assume the defense of the Third Party Claim in the manner
described in Section&nbsp;22.4 below. GKF shall cooperate with Hospital in the defense of any Third
Party Claim. Any settlement or compromise of a Third Party Claim to which GKF is a party shall be
subject to the express written approval of GKF, which approval shall not be unreasonably withheld,
delayed or conditioned as long as an unconditional term of the settlement or compromise is the full
and absolute release of GKF from all Damages arising out of the Third Party Claim. GKF, at its own
cost and expense, may participate on its own behalf with legal counsel of its own selection in the
defense of any Third Party Claim which may have a material impact on GKF.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.4 If Hospital fails to promptly assume the defense of any Third Party Claim, GKF may assume
the defense of the Third Party Claim with legal counsel selected by GKF, all at the Hospital&#146;s cost
and expense. The defense of an action by GKF under this Section&nbsp;22.4 shall not impair, limit or
otherwise restrict Hospital&#146;s indemnification obligations arising under this Section&nbsp;22 or GKF&#146;s
right to enforce such obligations.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.5 The indemnity obligations under this Section&nbsp;22 shall expire on the date that is five (5)
years following the expiration or termination of this Agreement<B>.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.6 The indemnification obligations set forth in this Agreement are intended to supplement,
and not supersede, supplant or replace, any coverage for Damages which may be available under any
insurance policies that may be maintained by GKF or Hospital. In the event any Damages may be
covered by insurance policies, the parties shall exercise good faith and use their best efforts to
obtain the benefits of and apply the available insurance coverage to the Damages subject to
indemnification under this Agreement. In the event that an insurer provides coverage under an
insurance policy on the basis of a &#147;reservation of rights&#148;, the indemnification obligations under
this Agreement shall apply to all Damages which are finally determined as not being covered under
the insurance policy.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.&nbsp;<U>Miscellaneous</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.1 <U>Binding Effect</U>. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Hospital shall not assign this
Agreement or any of its rights hereunder or sublease the Equipment without the prior written
consent of GKF, which consent shall not be unreasonably withheld ; provided, however that the
Hospital may assign this Agreement without prior written consent of GKF to an entity controlled by,
controlling, or under common control with the Hospital and which entity is the holder of the
general acute care hospital license for the facility at which the Equipment is located, and
provided further, that such entity shall have credit rating and financial position equivalent to
that of Hospital as reasonably determined by GKF<B>. </B>An assignment or sublease shall not relieve
Hospital of any liability for performance of this Agreement during the remainder of the Term. Any
purported assignment or sublease made without GKF&#146;s prior written consent shall be null, void and
of no force or effect ; provided, however that the Hospital may assign this Agreement without prior
written consent of GKF to an entity controlled by, controlling, or under common control with the
Hospital and which entity is the holder of the general acute care hospital license for the facility
at which the Equipment is located, and provided further, that such entity shall have a credit
rating and financial position equivalent to that of Hospital as reasonably determined by GKF<B>.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.2 <U>Agreement to Perform Necessary Acts</U>. Each party agrees to perform any further
acts and execute and deliver any further documents which may be reasonably necessary or otherwise
reasonably required to carry out the provisions of this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.3 <U>Validity</U>. If for any reason any clause or provision of this Agreement, or the
application of any such clause or provision in a particular context or to a particular situation,
circumstance or person, should be held unenforceable, invalid or in violation of law by any court
or other tribunal of competent jurisdiction, then the application of such clause or provision in
contexts or to situations, circumstances or persons other than that in or to which it is held
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">unenforceable, invalid or in violation of law shall not be affected thereby, and the remaining
clauses and provisions hereof shall nevertheless remain in full force and effect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.4 <U>Attorney&#146;s Fees and Costs</U>. In the event of any action, arbitration or other
proceedings between or among the parties hereto with respect to this Agreement, the non-prevailing
party or parties to such action, arbitration or proceedings shall pay to the prevailing party or
parties all costs and expenses, including reasonable attorneys&#146; fees, incurred in the defense or
prosecution thereof by the prevailing party or parties. The party which is a &#147;prevailing party&#148;
shall be determined by the arbitrator(s) or judge(s) hearing the matter and shall be the party who
is entitled to recover his, her or its costs of suit, whether or not the matter proceeds to a final
judgment, decree or determination. A party not entitled to recover his, her or its costs of suit
shall not recover attorneys&#146; fees. If a prevailing party or parties shall recover a decision,
decree or judgment in any action, arbitration or proceeding, the costs and expenses awarded to such
party may be included in and as part of such decision, decree or judgment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.5 <U>Entire Agreement; Amendment</U>. This Agreement together with the Exhibits attached
hereto constitutes the full and complete agreement and understanding between the parties hereto
concerning the subject matter hereof and shall supersede any and all prior written and oral
agreements with regard to such subject matter. This Agreement may be modified or amended only by a
written instrument executed by all of the parties hereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.6 <U>Number and Gender</U>. Words in the singular shall include the plural, and words in
a particular gender shall include either or both additional genders, when the context in which such
words are used indicates that such is the intent.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.7 <U>Effect of Headings</U>. The titles or headings of the various paragraphs hereof are
intended solely for convenience or reference and are not intended and shall not be deemed to
modify, explain or place any construction upon any of the provisions of this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.8 <U>Counterparts</U>. This Agreement may be executed in one or more counterparts by the
parties hereto. All counterparts shall be construed together and shall constitute one agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.9 <U>Governing Law</U>. This Agreement shall be interpreted and enforced in accordance
with the internal laws, and not the law of conflicts, of the State of California applicable to
agreements made and to be performed in that State.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.10 <U>Exhibits</U>. All exhibits attached hereto and referred to in this Agreement are
hereby incorporated by reference herein as though fully set forth at length.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.11 <U>Ambiguities</U>. The general rule that ambiguities are to be construed against the
drafter shall not apply to this Agreement. In the event that any provision of this Agreement
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">is found to be ambiguous, each party shall have an opportunity to present evidence as to the
actual intent of the parties with respect to such ambiguous provision.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.12 <U>Representations</U>. Each of the parties hereto represents (a)&nbsp;that no
representation or promise not expressly contained in this Agreement has been made by any other
party hereto or by any of its agents, employees, representatives or attorneys; (b)&nbsp;that this
Agreement is not being entered into on the basis of, or in reliance on, any promise or
representation, expressed or implied, other than such as are set forth expressly in this Agreement;
(c)&nbsp;that it has been represented by counsel of its own choice in this matter or has affirmatively
elected not to be represented by counsel; (d)&nbsp;it is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (e)&nbsp;it has full power and
authority to execute, deliver and perform this Agreement, and (f)&nbsp;the execution, delivery and
performance of this Agreement has been duly authorized by all necessary corporate or other similar
action.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.13 <U>Non-Waiver</U>. No failure or delay by a party to insist upon the strict
performance of any term, condition, covenant or agreement of this Agreement, or to exercise any
right, power or remedy hereunder or under law or consequent upon a breach hereof or thereof shall
constitute a waiver of any such term, condition, covenant, agreement, right, power or remedy or of
any such breach or preclude such party from exercising any such right, power or remedy at any later
time or times.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.14 <U>Notices</U>. All notices, requests, demands or other communications required or
permitted to be given under this Agreement shall be in writing and shall be delivered to the party
to whom notice is to be given either (a)&nbsp;by personal delivery (in which case such notice shall be
deemed to have been duly given on the date of delivery), (b)&nbsp;by next business day air courier
service (e.g., Federal Express or other similar service) (in which case such notice shall be deemed
given on the business day following deposit with the air courier service), or (c)&nbsp;by United States
mail, first class, postage prepaid, registered or certified, return receipt requested (in which
case such notice shall be deemed given on the third (3rd) day following the date of mailing), and
properly addressed as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="70%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">To GKF:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Craig K. Tagawa</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">GK Financing, LLC</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Four Embarcadero Center, Suite&nbsp;3700</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">San Francisco, CA 94111</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">To Hospital:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">University of Southern California University Hospital</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1500 San Pablo Street</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Los Angeles, CA 90033</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Attn: Debbie Walsh</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A party to this Agreement may change his, her or its address for purposes of this Section by giving
written notice to the other parties in the manner specified herein.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.15 <U>Special Provisions Respecting Medicare and Medicaid Patients</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.15.1 Hospital and GKF shall generate such records and make such disclosures as may be
required, from time to time, by the Medicare, Medicaid and other third party payment programs with
respect to this Agreement in order to meet all requirements for participation and payment
associated with such programs, including but not limited to the matters covered by Section
1861(v)(1)(I) of the Social Security Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.15.1 For the purpose of compliance with Section&nbsp;1861(v)(1)(I) of the Social Security Act,
as amended, and any regulations promulgated pursuant thereto, both parties agree to comply with the
following statutory requirements (a)&nbsp;Until the expiration of four (4)&nbsp;years after the termination
of this Agreement, both parties shall make available, upon written request to the Secretary of
Health and Human Services or, upon request, to the Comptroller General of the United States, or any
of their duly authorized representatives, the contract, and books, documents and records of such
party that are necessary to certify the nature and extent of such costs, and (b)&nbsp;if either party
carries out any of the duties of the contract through a subcontract with a value or cost of $10,000
or more over a twelve month period, with a related organization, such subcontract shall contain a
clause to the effect that until the expiration of four (4)&nbsp;years after the furnishing of such
services pursuant to such subcontract, the related organization shall make available, upon written
request to the Secretary, or upon request to the Comptroller General, or any of their duly
authorized representatives the subcontract, and books, documents and records of such organization
that are necessary to verify the nature and extent of such costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.16 <U>Force Majeure</U>. Failure to perform by either party will be excused in the event
of any delay or inability to perform its duties under this Agreement directly or indirectly caused
by conditions beyond its reasonable control, including, without limitation, fires, floods,
earthquakes, snow, ice, disasters, acts of God, accidents, riots, wars, operation of law, strikes,
governmental action or regulations, shortages of labor, fuel, power, materials, manufacturer delays
or transportation problems. Notwithstanding the foregoing, all parties shall make good faith
efforts to perform under this Agreement in the event of any such circumstance. Further, once such
an event is resolved, the parties shall again perform their respective obligations under this
Agreement. Notwithstanding the foregoing, and for the avoidance of doubt, no reductions or other
changes to reimbursement amounts and/or payment methodology(ies) pertaining to any third party
payors or governmental programs, including, without limitation, Medicare, Medicaid, any other
federal or state programs, and/or any commercial payors, shall be deemed to constitute a force
majeure event under this Section, and shall not excuse or delay a party&#146;s performance under this
Agreement.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->- 19 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.17 <U>Independent Contractor</U>. It is mutually understood and agreed that nothing in
this Agreement is intended nor shall be construed to create between GKF and Hospital, with respect
to their relationship hereunder, an employer/employee relationship, a partnership or joint venture
relationship, or a landlord/tenant relationship.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.18 <U>Notice</U>. The parties hereto agree that, notwithstanding anything to the contrary
set forth in this Agreement, this Agreement is and shall be treated and interpreted as a &#147;finance
lease,&#148; as such term is defined in the California Uniform Commercial Code, that GKF shall be
treated as a finance lessor who is entitled to the benefits and releases from liability accorded to
a finance lessor under the California Uniform Commercial Code. In furtherance of the foregoing,
Hospital acknowledges that, before signing this Agreement, GKF has informed Hospital in writing (a)
that Elekta is the entity supplying the Equipment to GKF, (b)&nbsp;that Hospital is entitled under the
California Uniform Commercial Code to the promises and warranties, including those of any third
party, provided to GKF by Elekta which is the entity supplying the goods in connection with or as
part of the contract by which GKF acquired the Equipment or the right to possession and use of the
Equipment, and (c)&nbsp;that Hospital may communicate with Elekta and receive an accurate and complete
statement of those promises and warranties, including any disclaimers and limitations of them or of
remedies. Hospital also acknowledges that Hospital has selected Elekta to supply the Equipment and
has directed GKF to acquire the Equipment or the right to possession and use of the Equipment from
Elekta.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.19 <U>Transfer of Title to Model C</U>. Effective upon the commencement of the
deinstallation by GKF of the Model C, and for a purchase price of * Hospital shall sell, assign,
transfer and convey to GKF, and GKF shall purchase and acquire the Model C from Hospital, free and
clear of all liens, encumbrances and adverse claims. In furtherance of the foregoing, concurrently
with the execution of this Agreement, Hospital shall deliver to GKF a duly executed bill of sale in
substantially the form set forth on Exhibit&nbsp;23.19 attached hereto. Hospital shall be responsible
for any sales and use taxes levied by any state or political subdivision thereof which may become
due and owing by reason of the sale of the Model C.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.20 <FONT style="font-variant: SMALL-CAPS"><B>Compliance Obligations. </B></FONT> It is acknowledged that GKF is a vendor whose sole
connection with Tenet is providing medical supplies or equipment to Tenet, and therefore, GKF is
not a &#147;Covered Person&#148; that is subject to compliance with the Corporate Integrity Agreement between
the Office of the Inspector General of the Department of Health and Human Services, and Tenet
Healthcare Corporation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.21 <FONT style="font-variant: SMALL-CAPS"><B>Exclusion Lists Screening. </B></FONT>Group<FONT style="font-variant: SMALL-CAPS"> </FONT>shall screen all of its current and
prospective owners, legal entities, officers, directors, employees (&#147;Screened Persons&#148;) against (a)
the United States Department of Health and Human Services/Office of Inspector General List of
Excluded Individuals/Entities (available through the Internet at <U>http://www.oig.hhs.gov</U>),
and (b)&nbsp;the General Services Administration&#146;s List of Parties Excluded from Federal Programs
(available through the Internet at <U>http://www.epls.gov</U>) (collectively, the
&#147;Exclusion Lists&#148;) to ensure that none of the Screened Persons (y)&nbsp;are currently excluded,
debarred, suspended, or otherwise
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 20 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">ineligible to participate in Federal healthcare programs or in
Federal procurement or nonprocurement programs, or (z)&nbsp;have been convicted of a criminal offense
that falls within the ambit of 42 U.S.C. &#167; 1320a-7(a), but have not yet been excluded, debarred,
suspended, or otherwise declared ineligible (each, an &#147;Ineligible Person&#148;). If, at any time during
the term of this Agreement any Screened Person becomes an Ineligible Person or proposed to be an
Ineligible Person, Group shall immediately notify Hospital of the same. Screened Persons shall not
include any employee, contractor or agent who is not providing services under this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN WITNESS WHEREOF</B>, the parties hereto have caused this Agreement to be executed as of the
date first set forth above.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="43%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&#147;GKF&#148;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>GK FINANCING, LLC</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Ernest A. Bates
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Ernest A. Bates, M.D.,
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Policy Committee Member</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&#147;HOSPITAL&#148;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>USC UNIVERSITY HOSPITAL</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Debbie Walsh
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Debbie Walsh
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->- 21 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>Exhibit&nbsp;1</B></U>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">GAMMA KNIFE TECHNOLOGY

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 22 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>Exhibit&nbsp;2</B></U>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">LGK AGREEMENT

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 23 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>Exhibit&nbsp;5.1</B></U>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">DESCRIPTION OF SITE

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 24 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>Exhibit&nbsp;5.2</B></U>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">SITE PLANNING CRITERIA<U> </U>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->- 25 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>Exhibit&nbsp;8</B></U>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">PER PROCEDURE PAYMENTS

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 8pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Year
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Annual Procedures Performed
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Fee Per Procedure</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">1-10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">*</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Notwithstanding anything to the contrary set forth herein, for purposes of determining the per
procedure payment, the number of annual procedures performed shall be reset to zero (0)&nbsp;at the
commencement of each anniversary of the First Procedure Date.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->- 26 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>Exhibit&nbsp;23.19</B></U>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">BILL OF SALE

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This BILL OF SALE (the &#147;Bill of Sale&#148;), is dated the 5th day of March&nbsp;2008, but is made
effective on the &#147;Effective Date&#148; (defined below), by and between GK FINANCING, LLC, a California
limited liability company (&#147;GKF&#148;), and USC UNIVERSITY HOSPITAL (&#147;Hospital&#148;), with reference to the
following facts:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RECITALS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, Hospital and GKF are parties to a certain Purchased Services Agreement (the
&#147;Agreement&#148;), pursuant to which, among other things, GKF has agreed to deinstall and purchase from
Hospital, and Hospital has agreed to sell to GKF, the Gamma Knife Model C unit currently owned by
Hospital, serial number <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (the &#147;Model C&#148;). Capitalized terms used herein without
definition shall have the same meanings ascribed to them in the Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, this Bill of Sale shall be executed and delivered by Hospital to GKF concurrently
with the execution and delivery of the Agreement, <U>provided</U> that this Bill of Sale shall not
become effective until and upon the commencement of the deinstallation by GKF of the Model C, as
indicated in writing by GKF to Hospital (the &#147;Effective Date&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of the payment by GKF of the sum of One Dollar ($1.00), and
in further consideration of the mutual covenants and agreements contained in the Agreement, the
receipt and sufficiency of which consideration are hereby acknowledged, Hospital hereby covenants
and agrees as follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As of the Effective Date, Hospital hereby sells, conveys, assigns, transfers and delivers to
GKF, and GKF hereby accepts, all of Hospital&#146;s right, title and interest in and to the Model
C, free and clear of all liens, encumbrances and adverse claims.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>TO HAVE AND TO HOLD, all and singular, for its own use forever, the Model C hereby sold,
assigned, transferred, conveyed and delivered, or intended so to be, unto GKF, its
successors and assigns forever.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>HOSPITAL IS SELLING THE MODEL C IN ITS &#147;AS IS,&#148; &#147;WHERE IS&#148; CONDITION. HOSPITAL, NOT BEING
THE MANUFACTURER OF THE MODEL C OR THE MANUFACTURER&#146;S AGENT, MAKES NO WARRANTY OR
REPRESENTATION, EITHER EXPRESSED OR IMPLIED, AS TO THE MODEL C&#146;S MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE OR USE, DESIGN, CONDITION, DURABILITY, CAPACITY, MATERIAL OR WORKMANSHIP
OR AS TO PATENT INFRINGEMENT OR THE LIKE, AND ALL WARRANTIES, EXPRESS OR IMPLIED, ARE EXCLUDED
FROM THIS BILL OF SALE AND SHALL NOT APPLY TO THE GOODS SOLD. THE PARTIES AGREE THAT, TO THE
EXTENT REQUIRED BY LAW, THE DISCLAIMERS CONTAINED HEREIN ARE &#147;CONSPICUOUS&#148; DISCLAIMERS FOR THE
PURPOSE OF ANY</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->- 27 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>LAW, RULE OR ORDER. THIS BILL OF SALE IS IN ALL RESPECTS SUBJECT TO THE PROVISIONS OF THE
AGREEMENT AND IS NOT INTENDED IN ANY WAY TO SUPERSEDE, LIMIT OR QUALIFY ANY PROVISION OF THE
AGREEMENT.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Further Assurances</U>. Each party hereby agrees to make, execute, acknowledge and
deliver any and all further documents and instruments, and to do and cause to be done all such
further acts, reasonably requested by the other party to evidence and/or in any manner to
perfect the transfer and assignment to GKF of the Model C.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Successors</U>. This Bill of Sale shall inure to the benefit of and is binding upon the
respective successors and assigns of Hospital and GKF.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties have caused this Bill of Sale to be executed and delivered
effective as of the date first written above.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="43%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:30px; text-indent:-0px">&#147;GKF&#148;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>GK FINANCING, LLC</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Ernest A. Bates
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Ernest A. Bates, M.D.,
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Policy Committee Member</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:30px; text-indent:-0px">&#147;HOSPITAL&#148;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>USC UNIVERSITY HOSPITAL</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Debbie Walsh
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Debbie Walsh
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->- 28 -<!-- /Folio -->
</DIV>



</BODY>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>5
<FILENAME>f40856exv31w1.htm
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;31.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">CERTIFICATION
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, Ernest A. Bates, M.D., as chief executive officer of American Shared Hospital Services, certify
that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. I have reviewed this quarterly report on Form 10-Q of American Shared Hospital Services;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. Based on my knowledge, this annual report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this annual report;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3. Based on my knowledge, the financial statements, and other financial information included in
this annual report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this annual
report;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">4. The registrant&#146;s other certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules&nbsp;13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">a) designed such disclosure controls and procedures to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">b) designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">c) evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">d) disclosed in this report any changes in the registrant&#146;s internal control over financial
reporting that occurred during registrant&#146;s most recent fiscal quarter (or the fourth fiscal
quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant&#146;s internal control over financial reporting;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">5. The registrant&#146;s other certifying officers and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit
committee of registrant&#146;s board of directors (or persons performing the equivalent function):
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">a) all significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s
ability to record, process, summarize and report financial information; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant&#146;s internal controls over financial reporting.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">May&nbsp;14, 2008
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Ernest A. Bates, M.D.
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Ernest A. Bates, M.D.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Chief Executive Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>6
<FILENAME>f40856exv31w2.htm
<DESCRIPTION>EXHIBIT 31.2
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;31.2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">CERTIFICATION
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, Craig K. Tagawa., as chief financial officer of American Shared Hospital Services, certify that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. I have reviewed this quarterly report on Form 10-Q of American Shared Hospital Services;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. Based on my knowledge, this annual report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this annual report;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3. Based on my knowledge, the financial statements, and other financial information included in
this annual report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this annual
report;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">4. The registrant&#146;s other certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules&nbsp;13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">a) designed such disclosure controls and procedures to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">b) designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">c) evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">d) disclosed in this report any changes in the registrant&#146;s internal control over financial
reporting that occurred during registrant&#146;s most recent fiscal quarter (or the fourth fiscal
quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant&#146;s internal control over financial reporting;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">5. The registrant&#146;s other certifying officers and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit
committee of registrant&#146;s board of directors (or persons performing the equivalent function):
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">a) all significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s
ability to record, process, summarize and report financial information; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant&#146;s internal controls over financial reporting.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">May&nbsp;14, 2008
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Craig K. Tagawa
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Craig K. Tagawa<br>
Chief Financial Officer
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>7
<FILENAME>f40856exv32w1.htm
<DESCRIPTION>EXHIBIT 32.1
<TEXT>
<HTML>
<HEAD>
<TITLE>exv32w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;32.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The certification set forth below is being submitted in connection with the Quarterly Report
on Form 10-Q of American Shared Hospital Services for the quarterly period ended March&nbsp;31, 2008
(the &#147;Report&#148;) for the purpose of complying with Rule&nbsp;13a-14(b) or Rule&nbsp;15d-14(b) of the Securities
Exchange Act of 1934 (the &#147;Exchange Act&#148;) and Section&nbsp;1350 of Chapter&nbsp;63 of Title 18 of the United
States Code.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ernest A. Bates, M.D., the Chief Executive Officer and Craig K. Tagawa, the Chief Financial
Officer of American Shared Hospital Services, each certifies that, to the best of his knowledge:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;the information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of American Shared Hospital Services.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">May&nbsp;14, 2008
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Ernest A. Bates, M.D.
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Ernest A. Bates, M.D.&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Chief Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Craig K. Tagawa
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Craig K. Tagawa&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



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