AMERICAN SHARED HOSPITAL SERVICES
EXHIBIT 10.35
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<TYPE>EX-10.35
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<FILENAME>f32994exv10w35.htm
<DESCRIPTION>EXHIBIT 10.35
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;10.35</B>
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ADDENDUM</B>
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<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>TO LEASE AGREEMENT FOR A GAMMA KNIFE UNIT</B>

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<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 April&nbsp;13, 2007, and is entered into between GK FINANCING, LLC, a California limited
liability company (&#147;GKF&#148;) or its wholly owned subsidiary whose obligation under this Agreement
shall be guaranteed by GKF, and OSF Healthcare System, an Illinois not for profit corporation,
owner and operator of St. Francis Medical Center (&#147;Medical Center&#148;), with reference to the
following recitals:
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>Recitals</B></U><B>:</B>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, on February&nbsp;18, 2000, GKF and Medical Center executed a Lease Agreement for a Gamma
Knife Unit (the &#147;Lease&#148;); and
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the parties desire to amend the terms and provisions of the Lease as set forth
herein.
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<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:
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>Agreement</B></U><B>:</B>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;<U><B>Defined Terms</B></U><B>. </B>Unless otherwise defined herein, the capitalized terms used herein
shall have the same meanings set forth in the Lease.
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<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>.
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<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 Commencement Date of the Lease is May&nbsp;14, 2001. In view of the
provisions set forth below in this Section, Section&nbsp;18 of the Lease is hereby deleted in its
entirety.
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<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;Upgrade and First Reload&#148; described below, the Term of the Lease
as set forth in Section&nbsp;6 of the Lease is hereby extended for an additional five (5)&nbsp;years
(collectively, the &#147;First Extension&#148;). The First Extension shall commence on May&nbsp;14, 2011 (which
is the expiration date of the initial Term of the Lease).
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. If the &#147;Second Reload&#148; is performed as described below, then, in consideration thereof, the
Term of the Lease (as extended by the First Extension) shall be automatically extended for an
additional three (3)&nbsp;years (collectively, the &#147;Second Extension&#148;). The Second Extension shall
commence on May&nbsp;14, 2016 (which is the expiration date of the First Extension).
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. All references in the Lease to the &#147;Term&#148; shall be deemed to refer to the Term, as extended
by the First Extension and the Second Extension, as applicable.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;<U><B>Upgrade and 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:
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;15.1 <U>Upgrade and First Reload</U>. Subject to the terms and conditions
set forth below, (a)&nbsp;GKF, at GKF&#146;s cost and expense, shall replace and upgrade the
Equipment to a Leksell Gamma Knife Perfexion model (the &#147;Perfexion Model&#148;) and
reload the Equipment (as upgraded) with new cobalt-60 (the &#147;Upgrade and First
Reload&#148;), which Upgrade and First Reload shall be performed at the Site; and (b)&nbsp;GKF
shall use its commercially reasonable efforts to perform the Upgrade and First
Reload during summer/fall 2007, subject to availability of the Perfexion Model from
the equipment manufacturer. It is anticipated that the Equipment will be
unavailable to perform procedures for approximately four to five weeks due to the
Upgrade and First Reload process. Medical Center agrees to be responsible for all
insurance, rigging, site modifications and installation costs related to the Upgrade
and First Reload, and the de-installation and removal of the existing Equipment.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;15.2 <U>Second Reload</U>. Subject to the terms and conditions set forth
below, (a)&nbsp;GKF may elect, at its sole option and at its cost and expense, to reload
the Perfexion Model with new cobalt-60 (the &#147;Second Reload&#148;), which Second Reload
shall be performed at the Site; and (b)&nbsp;if GKF has elected to do so, GKF shall use
its commercially reasonable efforts to perform the Second Reload during the
13<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> year of the Lease. Medical Center agrees to be responsible for all
insurance, rigging, site modifications and installation costs related to the Second
Reload.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;15.3 <U>Medical Center Support</U>. In connection with both the Upgrade and
First Reload and the Second Reload, Medical Center, at Medical Center&#146;s cost and
expense, shall provide GKF with Medical Center personnel (including Medical Center
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 Perfexion Model.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;15.4 <U>Permits</U>. Notwithstanding the foregoing, the Upgrade and First
Reload and the Second Reload (if applicable) 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 Medical Center at Medical
Center&#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 Upgrade and First
Reload and the Second Reload (if applicable) 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 Medical Center concerning the
Upgrade and First Reload and/or the Second Reload (if applicable), and GKF shall
have no obligation or liability to pay any damages to Medical Center resulting
therefrom.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;15.5 All references in this Agreement to (a) &#147;Installation&#148; shall be deemed to
refer to the Upgrade and First Reload and the Second Reload, as applicable; and (b)
&#147;Equipment&#148; shall be deemed, immediately following its upgrade, to mean the
Perfexion Model.&#148;
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<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <U><B>Per Procedure Payment</B></U><B>.</B>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Notwithstanding the provisions of Section&nbsp;7 of the Lease, commencing from and after the
first day of the first month after installation of the Perfexion Model, the per procedure payment
set forth in Section&nbsp;7 of the Lease shall be amended to equal * per procedure, and no further
adjustment to such per procedure payment shall be made based on the number of procedures performed
during any year or other time period under the Lease. As used in the Lease, the term &#147;procedure&#148;
shall mean each individual treatment session (fraction), whether performed on an inpatient or
outpatient basis, during which a patient receives treatment, imaging or other procedures,
including, without limitation, treatment planning and delivery, imaging and other ancillary
services, using the Equipment and/or any other equipment or devices that are used in lieu of, or as
an alternative to, the Equipment.
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<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>Notwithstanding anything
to the contrary contained herein or in the Lease, 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 Perfexion Model, except as expressly set forth herein or otherwise agreed upon
in writing by Medical Center and GKF.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&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.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;<U><B>Full Force and Effect</B></U><B>. </B>Except as amended by this Addendum, all of the terms and
provisions of the Lease shall remain in full force and effect.
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<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.
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    <TD colspan="3" valign="top" align="left"><B>GK FINANCING, LLC</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>OSF HEALTHCARE SYSTEM</B>, owner and<br>
operator of Saint Francis Medical Center</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
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    <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>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By: <BR>
Name:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Ernest A. Bates, M.D.
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Ernest A. Bates, M.D.
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:<BR>
Name:
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ John Moore
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
John Moore
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">GKF 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">Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
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