Letter Agreement



 Exhibit 10.6 
 March 13, 2007 
 KBL Healthcare
Acquisition Corp. III 
 757 Third Avenue, 21st Floor 
 New York,
New York 10017 
 Citigroup Global Markets Inc. 
 388 Greenwich
Street 
 New York, New York 10013 
  

	 	Re:	Initial Public Offering 

 Gentlemen: 
 The undersigned stockholder of KBL Healthcare Acquisition Corp. III (“Company”), in consideration of Citigroup Global Markets Inc.
(“Citigroup”) agreeing to underwrite an initial public offering of the securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein are defined in paragraph
13 hereof): 
 1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all Insider
Shares owned by her in accordance with the majority of the votes cast by the holders of the IPO Shares. 
 2. The undersigned hereby waives
any and all right, title, interest or claim of any kind in or to any distribution of the Trust Fund and any remaining net assets of the Company as a result of such liquidation with respect to her Insider Shares (“Claim”) and hereby waives
any Claim the undersigned may have in the future as a result of, or arising out of, any contracts or agreements with the Company and will not seek recourse against the Trust Fund for any reason whatsoever. 
 3. The undersigned acknowledges and agrees that the Company will not consummate any Business Combination which involves a company which is affiliated
with any of the Insiders unless the Company obtains an opinion from an independent investment banking firm reasonably acceptable to Citigroup that the business combination is fair to the Company’s stockholders from a financial perspective.

 4. Neither the undersigned, any member of the family of the undersigned, nor any affiliate (“Affiliate”) of the undersigned will
be entitled to receive 








 
and will not accept any compensation for services rendered to the Company prior to or in connection with the consummation of the Business Combination;
provided that the undersigned shall also be entitled to reimbursement from the Company for her out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination. 
 5. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive or accept a
finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any Affiliate of the undersigned originates a Business Combination. 
 6. The undersigned will escrow all of her Insider Shares acquired prior to the IPO until six months after the consummation by the Company of a Business
Combination subject to the terms of a Stock Escrow Agreement which the Company will enter into with the undersigned and an escrow agent acceptable to the Company. 
 7. The undersigned’s Questionnaire furnished to the Company and Citigroup and annexed as Exhibit A hereto is true and accurate in all respects. The undersigned represents and warrants that: 
 (a) she is not subject to, or a respondent in, any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain
from any act or practice relating to the offering of securities in any jurisdiction; 
 (b) she has never been convicted of or pleaded guilty
to any crime (i) involving any fraud or (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and she is not currently a defendant in any such criminal
proceeding; and 
 (c) she has never been suspended or expelled from membership in any securities or commodities exchange or association or
had a securities or commodities license or registration denied, suspended or revoked. 
 8. The undersigned has full right and power, without
violating any agreement by which she is bound, to enter into this letter agreement. 
 9. The undersigned hereby waives her right to exercise
conversion rights with respect to any shares of the Company’s common stock owned or to be owned by the undersigned, directly or indirectly, and agrees that she will not seek conversion with respect to such shares in connection with any vote to
approve a Business Combination. 
 10. The undersigned hereby agrees to not propose, or vote in favor of, an amendment to the Company’s
Certificate of Incorporation to extend the period of time 








 
in which the Company must consummate a Business Combination prior to its liquidation. This paragraph may not be modified or amended under any circumstances.

 11. The undersigned authorizes any employer, financial institution, or consumer credit reporting agency to release to Citigroup and its
legal representatives or agents (including any investigative search firm retained by Citigroup) any information they may have about the undersigned’s background and finances (“Information”). Neither Citigroup nor its agents shall be
violating the undersigned’s right of privacy in any manner in requesting and obtaining the Information and the undersigned hereby releases them from liability for any damage whatsoever in that connection. 
 12. This letter agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to
conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The undersigned hereby (i) agrees that any action, proceeding or claim against her arising out of or relating in any way to this
letter agreement (a “Proceeding”) shall be brought and enforced in the courts of the State of New York or the United States of America for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction
shall be exclusive, (ii) waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum and (iii) irrevocably agrees to appoint Graubard Miller as agent for the service of process in the State of
New York to receive, for the undersigned and on her behalf, service of process in any Proceeding. If for any reason such agent is unable to act as such, the undersigned will promptly notify the Company and Citigroup and appoint a substitute agent
acceptable to each of the Company and Citigroup within 30 days and nothing in this letter will affect the right of either party to serve process in any other manner permitted by law. 
 13. As used herein, (i) a “Business Combination” shall mean an acquisition by merger, capital stock exchange, asset or stock acquisition,
reorganization or otherwise, of an operating business; (ii) “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO; (iii) “Insider Shares” shall mean all of the shares
of Common Stock of the Company acquired by an Insider prior to the IPO; (iv) “IPO Shares” shall mean the shares of Common Stock issued in the Company’s IPO; and (v) Trust Fund” shall mean the trust fund into which a
portion of the net proceeds of the Company’s IPO will be deposited. 
 14. The undersigned acknowledges and understands that the Company
and Citigroup will rely upon the agreements, representations and warranties set forth herein in proceeding with the IPO. Nothing contained herein shall be deemed to render Citigroup a representative of, or a fiduciary with respect to, the Company,
its stockholders, or any creditor or vendor of the Company with respect to the subject matter hereof. The undersigned represents and warrants to Citigroup that upon its execution and delivery, this letter agreement shall be a valid and binding
agreement of, and shall be enforceable against, the undersigned and such person’s respective successors, personal representatives and assigns. This letter agreement shall terminate on the earlier of the 








 
consummation of an initial Business Combination and the liquidation of the Company; provided that such termination shall not relieve the undersigned
from liability for any breach of this agreement prior to its termination. No term or provision of this letter agreement may be amended, changed, waived, altered or modified except by written instrument executed and delivered by the party against
whom such amendment, change, waiver, alteration or modification is to be enforced. 
  

	
	Sandra Santos
	Print Name of Insider
	
	/s/ Sandra Santos
	Signature