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                                                                   Exhibit 10.17


                                 AMENDMENT NO. 4
                  TO LOAN AND SECURITY AGREEMENT ("AGREEMENT")
                          DATED JANUARY 31, 1996 AMONG
             AMERICAN SHARED-CURACARE AND CURACARE, INC. (BORROWER),
                AMERICAN SHARED HOSPITAL SERVICES ("GUARANTOR"),
                 ERNEST A. BATES, M.D. ("INDIVIDUAL GUARANTOR"),
              AND DVI BUSINESS CREDIT RECEIVABLES CORP. ("LENDER")

FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree to amend the Agreement as follows:

1)   Section 2.1 "The Loan" first sentence shall be amended to read as follows:

2)  Subject to the terms and conditions and relying on the representations and
    warranties set forth herein, Lender agrees to advance to Borrower,
    individually or collectively, from time to time, and Borrower agrees to
    borrow from Lender, revolving loans in the amount not to exceed the lesser
    of (i) Five Million and 00/100 Dollars ($5,000,000.00) (the "Commitment
    Amount"), and (ii) the Borrowing Base, which shall be evidenced by a Note.

3)  Upon execution hereof, Borrower shall pay Lender an Origination Fee of one
    percent (1%) of the $500,000.00 increased Commitment Amount.

Any provision in Amendment No. 4 ("Amendment") hereof that may be contrary to
any provision of the Agreement shall prevail and override the Agreement. Except
as expressly set forth herein, all other provisions of the Agreement shall
remain in full force and effect. Both parties warrant to each other that this
Amendment has been authorized and duly executed and is binding on both parties
hereto as of ___ day of _______ 1997.

LENDER:
DVI BUSINESS CREDIT RECEIVABLES CORP.

By: /s/ Cynthia J. Cohn
   ----------------------
Name:  Cynthia J. Cohn

Title:  Executive Vice President

BORROWER:                                          BORROWER:
AMERICAN SHARED-CURACARE                           CURACARE, INC.
A CALIFORNIA PARTNERSHIP

By: /s/ Ernest A. Bates                            By: /s/ Ernest A. Bates
   ----------------------                              -------------------------
Name: Ernest A. Bates                              Name: Ernest A. Bates

Title: Chairman & CEO                              Title: Chairman & CEO

The undersigned acknowledges that DVI has no obligation to provide it with
notice of, or to obtain its consent to, the terms of this Amendment to Loan and
Security Agreement. The undersigned nevertheless acknowledges and agrees to the
terms and conditions of this Amendment and acknowledges that its Guaranty
remains fully valid, binding, and enforceable against it in accordance with its
terms.

GUARANTOR:                                     GUARANTOR:
AMERICAN SHARED HOSPITAL SERVICES              ERNEST A. BATES, M.D., INDIVIDUAL

By: /s/ Ernest A. Bates                        By:  /s/ Ernest A. Bates
   ----------------------                           ----------------------------
Print Name: Ernest A. Bates                    Print Name: Ernest A. Bates

Title: Chairman & CEO

Date: 7/31/97                                  Date: 7/31/97