Letter Agreement



 Exhibit 10.3 
 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, officer and director 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 14 hereof): 
 1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all
Insider Shares owned by him in accordance with the majority of the votes cast by the holders of the IPO Shares. 
 2. In the event that the
Company fails to consummate a Business Combination within 24 months from the effective date (“Effective Date”) of the registration statement relating to the IPO, the undersigned will (i) cause the Trust Fund to be liquidated and
distributed to the holders of IPO Shares and (ii) take all reasonable actions within his power to cause the Company to liquidate as soon as reasonably practicable. 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 his 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. In the event of the liquidation of the Trust Fund, the undersigned agrees to, jointly and
severally with Zachary Berk and Marlene Krauss, indemnify and hold harmless the Company against any 











 KBL Healthcare Acquisition Corp. III 
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 March 13, 2007 
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and all loss, liability, claims, damage and expense whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in
investigating, preparing or defending against any litigation, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor, service provider, financing provider or other person
who is owed money by the Company for services rendered or products sold or contracted for, or by any target business, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount in the
Trust Fund. 
 3. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to
present to the Company for its consideration, prior to presentation to any other person or entity, any suitable opportunity to acquire an operating business, which includes any potential target business operating in the healthcare industry with a
fair market value equal to 80% of the balance in the Trust Fund (less the deferred underwriting discounts and commissions and taxes payable) at the time of such Business Combination, until the earlier of the consummation by the Company of its
initial Business Combination, the liquidation of the Company or until such time as the undersigned ceases to be an officer or director of the Company, subject to any pre-existing fiduciary and contractual obligations the undersigned might have.

 4. 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. 
 5. 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 commencing on the Effective Date, KBL
Healthcare Management, Inc. (“Related Party”), shall be allowed to charge the Company $10,000 per month, representing an allocable share of Related Party’s overhead, to compensate it for the Company’s use of Related Party’s
offices, utilities and personnel. Related Party and the undersigned shall also be entitled to reimbursement from the Company for their out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination. 
 6. 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. 








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 March 13, 2007 
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 7. The undersigned will escrow all of his 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. 
 8. The undersigned agrees to be the Chief Operating Officer and Director of the Company until the earlier of the consummation by the Company of a
Business Combination and the liquidation of the Company. The undersigned’s biographical information furnished to the Company and Citigroup and attached hereto as Exhibit A is true and accurate in all respects, does not omit any material
information with respect to the undersigned’s background and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities Act of 1933. The undersigned’s
Questionnaire furnished to the Company and Citigroup and annexed as Exhibit B hereto is true and accurate in all respects. The undersigned represents and warrants that: 
 (a) he 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) he 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 he is not currently a defendant in any such criminal
proceeding; and 
 (c) he 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. 
 9. The undersigned has full right and power, without
violating any agreement by which he is bound, to enter into this letter agreement and to serve as Chief Operating Officer and Director of the Company. 
 10. The undersigned hereby waives his 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
he will not seek conversion with respect to such shares in connection with any vote to approve a Business Combination. 








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 11. 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. 
 12. 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. 
 13. 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 him 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 his 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. 








 KBL Healthcare Acquisition Corp. III 
 Citigroup Global Markets Inc. 
 March 13, 2007 
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 14. 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. 
 15. 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. 
  

	
	 Michael Kaswan
 Print Name of
Insider

	
	/s/ Michael Kaswan
	Signature









 Exhibit A 
 Michael Kaswan has served as our chief operating officer and a member of our board of directors since our inception. From July 1997 to November 1998, Mr. Kaswan served as a senior associate of KBL Healthcare, Inc.
Mr. Kaswan has been an employee of KBL Healthcare Management Inc. since November 1998, and is currently a managing director. He has also been affiliated with all of the KBL Funds since November 1998. In June 1999, Mr. Kaswan co-founded
Lumenos. Mr. Kaswan has been a member of the board of Scandius Biomedical, Inc., a privately held medical device company that designs, manufactures, and markets products for the orthopedic sports medicine market, since December 2003 and its
chairman since December 2006. Mr. Kaswan has also been a member of the board of directors or Remon Medical Technologies, Inc., a private company that is developing implantable biomedical sensors and communications systems, since September 2004.
Mr. Kaswan served as the chief operating officer and a member of the board of directors of KBL II from its inception in December 2004 until its merger with Summer in March 2007. Mr. Kaswan received a B.S. from the University of Virginia
and an M.B.A. from Harvard Business School.