American Shared Hospital Services Enters into Definitive Agreement to Provide Radiation Oncology Department Upgrade to Tufts-New England Medical Center

Business Wire, Oct 9, 2006

SAN FRANCISCO -- AMERICAN SHARED HOSPITAL SERVICES (AMEX:AMS)(PCX:AMS), a leading provider of turnkey technology solutions for advanced radiosurgical and radiation therapy services, announced today that it has finalized terms of its previously announced agreement to provide an image-guided radiation therapy (IGRT) system, a CT Simulator, and related service, support and maintenance services as part of a complete Radiation Oncology Department upgrade for Tufts-New England Medical Center (Tufts-NEMC). AMS currently anticipates commencing its lease agreement with TUFTS-NEMC in the second quarter of 2007.

"We are pleased to partner with Tufts-New England Medical Center in this innovative transaction that takes advantage of AMS' creative financing solutions to provide Tufts-NEMC with a complete, state-of-the-art radiation oncology department package. This agreement is a model for the type of transactions we hope to complete with leading medical institutions across the country," said Ernest A. Bates, M.D., Chairman and Chief Executive Officer of AMS.

About Tufts-New England Medical Center

Founded in 1796 as the Boston Dispensary to care for sick and needy Bostonians, Tufts-New England Medical Center is the oldest health care facility in New England. It serves as the principal clinical and teaching affiliate of Tufts University School of Medicine. Tufts-NEMC is a world-class, academic medical institution that is home to both a full-service hospital for adults and the Floating Hospital for Children and has long been recognized as a leader in cancer care, neurosurgery, cardiology, organ transplantation and pediatrics. For more information on Tufts-NEMC, access our web site, www.tufts-nemc.org.

About AMS

American Shared Hospital Services provides turnkey technology solutions for advanced radiosurgical and radiation therapy services. AMS is the world leader in providing Gamma Knife radiosurgery services, a non-invasive treatment for malignant and benign brain tumors, vascular malformations and trigeminal neuralgia (facial pain). The Company also offers the latest IGRT and IMRT systems, as well as its proprietary Operating Room for the 21st Century concept. Through its equity investment in Still River Systems, AMS also plans to complement these services with the Clinatron-250[TM] proton beam radiation therapy (PBRT) system, which has not yet been approved by the FDA.

Safe Harbor Statement

This press release 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 business, the risks of developing its IMRT and The Operating Room for the 21(st) Century[R] programs, and the risks of investing in a development-stage company, Still River Systems, Inc., 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's Annual Report on Form 10-K for the year ended December 31, 2005, the Form 10-Q for the three months ended March 31, 2006 and June 30, 2006, and the definitive Proxy Statement for the Annual Meeting of Shareholders on June 28, 2006.