Document:

First Supplemental Indenture

 Exhibit 4.3 
 FIRST SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of June 29, 2007, among the Subsidiaries of the
Company (as defined below) listed on Schedule II(a) hereto (the “Guaranteeing Subsidiaries”) and Schedule II(b) hereto (the “New LLC Guarantors”), Asbury Automotive Group, Inc., a Delaware corporation (the
“Company”), the other Guarantors (as defined in the Indenture referred to herein) and The Bank of New York, as trustee under the indenture referred to below (the “Trustee”). 
 WITNESSETH 
 WHEREAS, the Company has
heretofore executed and delivered to the Trustee an indenture, dated as of March 16, 2007 (the “Indenture”), providing for the issuance of 3.00% Senior Subordinated Convertible Notes due 2012 (the “Notes”);

 WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiaries shall execute and deliver to the Trustee a
supplemental indenture pursuant to which each Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Subsidiary
Guarantee”); 
 WHEREAS, certain of the Guarantors listed on Schedule III hereto (the “Predecessor Guarantors”)
have merged with and into (the “Mergers”) the New LLC Guarantors and Asbury Automotive Texas L.L.C., a Delaware limited liability company and a Guarantor (together with the New LLC Guarantors, the “Texas LLC
Guarantors”) with the applicable Texas LLC Guarantor as the surviving entity in each of the Mergers; 
 WHEREAS, as a result of the
Mergers, each of the applicable Texas LLC Guarantors (i) is hereby entering into this Supplemental Indenture to evidence the Mergers and (ii) is assuming, by operation of law, the respective obligations of each of the Predecessor
Guarantors under the Indenture, their respective Subsidiary Guarantees and the Registration Rights Agreement; 
 WHEREAS, pursuant to
Section 11.05 of the Indenture, each of the Guarantors listed on Schedule IV hereto (the “Texas LP Guarantors”) is being released and relieved of its obligations under its Subsidiary Guarantee and this Supplemental Indenture
hereby evidences the release of such Texas LP Guarantor from its obligations under its Subsidiary Guarantee; and 
 WHEREAS, pursuant to
Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture. 
 NOW THEREFORE, in
consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company, the Guaranteeing Subsidiaries, the New LLC Guarantors, the Texas LP Guarantors, the other
Guarantors and the Trustee, as applicable, mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: 
 1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture. 

 2. ASSUMPTION BY THE TEXAS LLC GUARANTORS. Each of the Texas LLC Guarantors hereby assumes the
obligations of the applicable Predecessor Guarantor for the due and punctual payment of the principal of, premium, if any, and interest on all outstanding Notes issued pursuant to the Indenture and the performance and observance of each other
obligation and covenant set forth in the Indenture, its respective Subsidiary Guarantee and the Registration Rights Agreement to be performed or observed on the part of the Predecessor Guarantor. Each of the Texas LLC Guarantors is hereby
substituted for, and may exercise every right and power of, the applicable Predecessor Guarantor under the Indenture with the same effect as if each of the Texas LLC Guarantors had been named as Guarantors in the Indenture, and each of the Texas LLC
Guarantors is a successor Person under the Indenture. 
 3. AGREEMENT TO GUARANTEE. Each Guaranteeing Subsidiary hereby agrees as follows:

 (a) Along with all Guarantors named in the Indenture, to jointly and severally Guarantee to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, the Notes or the obligations of the Company hereunder or thereunder, that: 
 (i) the principal of and interest on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and 
 (ii) in case of any extension of time of payment or renewal of any Notes
or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. 
 (b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the
Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any
other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. 
 (c) The
following is hereby waived: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all
demands whatsoever. 
  

 2 

 (d) This Subsidiary Guarantee shall not be discharged except by complete performance of
the obligations contained in the Notes and the Indenture, and such Guaranteeing Subsidiary accepts all obligations of a Guarantor under the Indenture. 
 (e) If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors, or any Custodian, Trustee, liquidator or other similar official acting in relation to either the Company
or the Guarantors, any amount paid by either to the Trustee or such Holder, this Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. 
 (f) Such Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. 
 (g) As between the Guarantors, on
the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 of the Indenture for the purposes of this Subsidiary Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such
obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Subsidiary Guarantee. 
 (h) The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantee. 
 (i) Pursuant to Section 11.03 of the Indenture, after giving effect to any maximum amount and any other contingent and fixed
liabilities that are relevant under any applicable Bankruptcy Law or fraudulent conveyance laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect
of the obligations of such other Guarantor under Article 11 of the Indenture, this new Subsidiary Guarantee shall be limited to the maximum amount permissible such that the obligations of such Guarantor under this Subsidiary Guarantee will not
constitute a fraudulent transfer or conveyance. 
 4. EXECUTION AND DELIVERY. Each of the Guaranteeing Subsidiaries and each of the Texas LLC
Guarantors agree that the Subsidiary Guarantees shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Subsidiary Guarantees. 
 5. GUARANTEEING SUBSIDIARIES MAY CONSOLIDATE, ETC. ON CERTAIN TERMS. Except as set forth in Articles 4 and 5 of the Indenture, and notwithstanding
clauses (a) and (b) above, nothing contained in the Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor. 
  

 3 

 6. RELEASES. 
 (a) In the event of (i) a sale or other disposition of all or substantially all of the assets of any Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the capital stock of any Guarantor, in each case to a Person that is not (either before or after giving effect to such transaction) the Company or any other Guarantor, (ii) a
termination of one or more Guarantees by any Guarantor of any other Senior Subordinated Indebtedness of the Company or any other Guarantor which results in such Guarantor no longer being subject to any Guarantee of any other Senior Subordinated
Indebtedness of the Company or any other Guarantor or (iii) any Guarantor ceasing to be a Restricted Subsidiary, then such Guarantor (in the event described in clauses (ii) and (iii) of this paragraph) or the corporation acquiring the
property (in the event described in clause (i) of this paragraph) will be released and relieved of any obligations under its Subsidiary Guarantee. Upon delivery by the Company to the Trustee of an Officers’ Certificate and an Opinion of
Counsel to the effect that such sale or other disposition was made by the Company in accordance with the provisions of the Indenture, the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from
its obligations under its Subsidiary Guarantee. 
 (b) Any Guarantor not released from its obligations under its Subsidiary
Guarantee shall remain liable for the full amount of principal of and interest on the Notes and for the other obligations of any Guarantor under the Indenture as provided in Article 11 of the Indenture. 
 (c) Pursuant to Section 11.05 of the Indenture, each of the Texas LP Guarantors are hereby released and relieved of its obligations
under its Subsidiary Guarantee and this Supplemental Indenture hereby evidences the release of such Texas LP Guarantor from its obligations under its Subsidiary Guarantee. 
 7. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator, stockholder or agent of any Guaranteeing Subsidiary
or any Texas LLC Guarantor, as such, shall have any liability for any obligations of the Company, any Guaranteeing Subsidiary or any Texas LLC Guarantor under the Notes, any Subsidiary Guarantees, the Indenture or this Supplemental Indenture or for
any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the
Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy. 
 8. INDENTURE. Except as expressly amended hereby, the Indenture shall continue in full force and effect in accordance with the provisions thereof as in existence on the date hereof. This Supplemental Indenture shall
form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby. 
  

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 9. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE
THIS SUPPLEMENTAL INDENTURE. 
 10. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy
shall be an original, but all of them together represent the same agreement. 
 11. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof. 
 12. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guarantors and the Company. 
  

 5 

 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all
as of the date first above written. 
  

					
	SIGNATURES	 	
		
	ASBURY AUTOMOTIVE GROUP, INC.	 	
			
	By:	 	 /S/ LYNNE A. BURGESS
	 	
	Name:	 	 Lynne A. Burgess
	 	
	Title:	 	 Vice President, General Counsel & Secretary
	 	
		
	EACH GUARANTOR LISTED ON SCHEDULE I HERETO	 	
			
	By:	 	 /S/ LYNNE A. BURGESS
	 	
	Name:	 	 Lynne A. Burgess
	 	
	Title:	 	Vice President and Assistant Secretary or Secretary of each Limited Liability Company or Corporation, or the General Partner of each Limited Partnership listed on the attached
Schedule	 	
		
	EACH GUARANTEEING SUBSIDIARY LISTED ON SCHEDULE II(a) HERETO	 	
			
	By:	 	 /S/ LYNNE A. BURGESS
	 	
	Name:	 	 Lynne A. Burgess
	 	
	Title:	 	 Vice President of each Limited
 Liability Company or
the Sole
 Member of each Limited Liability
 Company listed on the
attached
 Schedule
	 	
		
	EACH NEW LLC GUARANTOR LISTED ON SCHEDULE II(b) HERETO	 	
			
	By:	 	 /S/ LYNNE A. BURGESS
	 	
	Name:	 	 Lynne A. Burgess
	 	
	Title:	 	 Vice President of each Limited
 Liability Company or
the Sole
 Member of each Limited Liability
 Company listed on the
attached
 Schedule
	 	

  

 6 

			
	THE BANK OF NEW YORK
		
	By:	 	 /S/ CARLOS R. LUCIANO

	Name:	 	Carlos R. Luciano
	Title:	 	Vice President

  

 7 

 Schedule I 
 SCHEDULE OF GUARANTORS 
 The following schedule lists each Guarantor as of March 16, 2007, the date of
the Indenture: 
 Asbury Automotive Financial Services, Inc. 
 Asbury Automotive Group Holdings, Inc. 
 Asbury Automotive Group L.L.C. 
 Asbury Automotive Management L.L.C. 
 Asbury
Automotive South, L.L.C. 
 Asbury Automotive West, L.L.C. 
 Asbury Automotive Southern California L.L.C. 
 Asbury Arkansas Hund L.L.C. 
 Asbury AR Niss L.L.C. 
 Asbury Automotive
Arkansas Dealership Holdings L.L.C. 
 Asbury Automotive Arkansas L.L.C. 
 Asbury MS Gray-Daniels L.L.C. 
 Asbury MS
Metro L.L.C. 
 Escude-M L.L.C. 
 Escude-MO L.L.C. 
 Escude-NN L.L.C. 
 Escude-NS L.L.C. 
 Escude-T L.L.C. 
 NP FLM L.L.C. 
 NP MZD L.L.C. 
 NP VKW L.L.C. 
 Premier NSN L.L.C. 

Premier Pon L.L.C. 
 Prestige Bay L.L.C.

 Prestige Toy L.L.C. 
 Asbury
Atlanta AC L.L.C. 
 Asbury Atlanta AU L.L.C. 
 Asbury Atlanta BM L.L.C. 
 Asbury Atlanta Chevrolet L.L.C. 
 Asbury Atlanta Hon L.L.C. 
 Asbury Atlanta
Infiniti L.L.C. 
 Asbury Atlanta Jaguar L.L.C. 
 Asbury Atlanta Lex L.L.C. 
 Asbury Atlanta VL L.L.C. 
 Asbury Automotive Atlanta L.L.C. 
 Atlanta
Real Estate Holdings L.L.C. 
 Spectrum Insurance Services L.L.C. 
 Asbury Automotive Fresno L.L.C. 
 Asbury
Fresno Imports L.L.C. 
 AF Motors, L.L.C. 
 ALM Motors, L.L.C. 
 ANL, L.P. 
 Asbury Automotive Central Florida, L.L.C. 
 Asbury Automotive Deland, L.L.C. 
 Asbury Automotive Florida, L.L.C. 
 Asbury
Automotive Jacksonville GP L.L.C. 
  

 I-1 

 Schedule I 
 Asbury Automotive Jacksonville, L.P. 
 Asbury Deland Imports 2, L.L.C. 
 Asbury Jax AC, L.L.C. 
 Asbury Jax Holdings,
L.P. 
 Asbury Jax K, L.L.C. 
 Asbury Jax Management L.L.C. 
 Asbury Jax PB Chev, L.L.C. 
 Asbury-Deland Imports, L.L.C. 
 Avenues
Motors, Ltd. 
 Bayway Financial Services, L.P. 
 BFP Motors L.L.C. 
 C&O Properties, Ltd. 
 CFP Motors, Ltd. 
 CH Motors, Ltd. 

CHO Partnership, Ltd. 
 CK Chevrolet L.L.C.

 CK Motors LLC 
 CN Motors, Ltd.

 Coggin Automotive Corp. 
 Coggin Cars L.L.C. 
 Coggin Chevrolet L.L.C. 
 Coggin Management, L.P. 
 CP-GMC Motors, Ltd. 
 CSA Imports L.L.C. 
 HFP Motors L.L.C.

 KP Motors L.L.C. 
 Asbury
Automotive Mississippi, L.L.C. 
 Asbury MS Chev, L.L.C. 
 Asbury MS Wimber L.L.C. 
 Asbury MS Yazoo L.L.C. 
 Asbury No Cal Niss L.L.C. 
 Asbury Sacramento
Imports L.L.C. 
 Asbury So Cal DC L.L.C. 
 Asbury So Cal Hon L.L.C. 
 Asbury So Cal Niss L.L.C. 
 Asbury Automotive North Carolina Dealership Holdings L.L.C. 
 Asbury Automotive North Carolina L.L.C.

 Asbury Automotive North Carolina Management L.L.C. 
 Asbury Automotive North Carolina Real Estate Holdings L.L.C. 
 Camco Finance II L.L.C. 
 Camco Finance L.L.C. 
 Crown Acura/Nissan, LLC

 Crown Battleground, LLC 
 Crown
CHH L.L.C. 
 Crown CHO L.L.C. 
 Crown CHV L.L.C. 
 Crown Dodge, LLC 
 Crown FDO L.L.C. 
 Crown FFO Holdings L.L.C. 
 Crown FFO L.L.C. 
 Crown Fordham L.L.C.

  

 I-2 

 Schedule I 
 Crown GAC L.L.C. 
 Crown GAU L.L.C. 
 Crown GBM L.L.C. 
 Crown GCA L.L.C.

 Crown GCH L.L.C. 
 Crown GDO
L.L.C. 
 Crown GHO L.L.C. 
 Crown
GKI L.L.C. 
 Crown GMI L.L.C. 
 Crown GNI L.L.C. 
 Crown GPG L.L.C. 
 Crown GVO L.L.C. 
 Crown Honda, LLC 
 Crown Honda-Volvo, LLC 
 Crown Mitsubishi, LLC

 Crown Motorcar Company L.L.C. 
 Crown Raleigh L.L.C. 
 Crown RIA L.L.C. 
 Crown RIB L.L.C. 
 Crown Royal Pontiac, LLC 
 Crown SJC L.L.C. 
 Crown SNI L.L.C.

 RER Properties, LLC 
 RWIJ
Properties, LLC 
 Asbury Automotive Oregon L.L.C. 
 Asbury Automotive Oregon Management L.L.C. 
 Thomason Frd L.L.C. 
 Thomason Auto Credit Northwest, Inc. 
 Thomason Dam L.L.C. 
 Thomason Hon L.L.C. 
 Thomason Hund L.L.C. 
 Thomason Maz L.L.C. 
 Thomason Niss L.L.C. 
 Thomason Outfitters
L.L.C. 
 Thomason Pontiac-GMC L.L.C. 
 Thomason Suzu L.L.C. 
 Thomason TY L.L.C. 
 Thomason Zuk L.L.C. 
 Asbury Automotive St. Louis, L.L.C. 
 Asbury St. Louis Lex L.L.C. 
 Asbury St. Louis
Cadillac L.L.C. 
 Asbury St. Louis Gen L.L.C. 
 Asbury Automotive Brandon, L.P. 
 Asbury Automotive Tampa GP L.L.C. 
 Asbury Automotive Tampa, L.P. 
 Asbury Tampa
Management L.L.C. 
 JC Dealer Systems LLC (formerly known as Dealer Profit Systems L.L.C.) 
 Precision Computer Services, Inc. 
 Precision
Enterprises Tampa, Inc. 
 Precision Infiniti, Inc. 
 Precision Motorcars, Inc. 
  

 I-3 

 Schedule I 
 Precision Nissan, Inc. 
 Tampa Hund, L.P. 
 Tampa Kia, L.P. 
 Tampa LM, L.P. 

Tampa Mit, L.P. 
 Tampa Suzu, L.P.

 WMZ Brandon Motors, L.P. 
 WMZ
Motors, L.P. 
 WTY Motors, L.P. 
 Asbury Automotive Texas Holdings L.L.C. 
 Asbury Automotive Texas L.L.C. 
 Asbury Automotive Texas Real Estate Holdings L.P. 
 Asbury Texas Management L.L.C. 
 McDavid Auction, L.P. 
 McDavid Austin-Acra, L.P. 
 McDavid Frisco-Hon, L.P. 
 McDavid Grande, L.P. 
 McDavid Houston-Hon,
L.P. 
 McDavid Houston-Kia, L.P. 
 McDavid Houston-Niss, L.P. 
 McDavid Irving-Hon, L.P. 
 McDavid Irving-PB&G, L.P. 
 McDavid Irving-Zuk, L.P. 
 McDavid Outfitters, L.P. 
 McDavid Plano-Acra,
L.P. 
 Plano Lincoln-Mercury, Inc. 
  

 I-4 

 Schedule II(a) 
 SCHEDULE OF GUARANTEEING SUBSIDIARIES 
 The following schedule lists each Guaranteeing Subsidiary becoming a
Guarantor under the Indenture pursuant to the Supplemental Indenture to which this Schedule II(a) is attached: 
 Asbury Atlanta Inf
L.L.C. 
 Asbury Atlanta Nis L.L.C. 
 Schedule II(b) 
 SCHEDULE OF NEW LLC GUARANTORS 
 The following schedule lists each New LLC Guarantor becoming a Guarantor under the Indenture as a result of the Mergers and evidenced by the Supplemental
Indenture to which this Schedule II(b) is attached: 
 McDavid Austin-Acra, L.L.C. 
 McDavid Frisco-Hon, L.L.C. 
 McDavid
Houston-Niss, L.L.C. 
 McDavid Houston-Hon, L.L.C. 
 McDavid Plano-Acra, L.L.C. 
 McDavid Grande, L.L.C. 
 McDavid Irving-Hon, L.L.C. 
 McDavid
Outfitters, L.L.C. 
 Asbury Automotive Texas Real Estate Holdings L.L.C. 
  

 II-1 

 Schedule III 
 SCHEDULE OF PREDECESSOR GUARANTORS 
 The following schedule lists each Predecessor Guarantor that has been
merged with and into the Texas LLC Guarantors pursuant to the Mergers: 
 McDavid Austin-Acra, L.P. 
 McDavid Frisco-Hon, L.P. 
 McDavid
Houston-Niss, L.P. 
 McDavid Houston-Hon, L.P. 
 McDavid Plano-Acra, L.P. 
 McDavid Grande, L.P. 
 McDavid Irving-Hon, L.P. 
 McDavid Outfitters,
L.P. 
 Asbury Automotive Texas Real Estate Holdings L.P. 
 Asbury Automotive West, L.L.C. 
 Asbury Automotive Texas Holdings L.L.C. 
 Asbury Texas Management L.L.C. 
  

 III-1 

 Schedule IV 
 SCHEDULE OF THE TEXAS LP GUARANTORS 
 The following schedule lists each Texas LP Guarantor that is being
released as a Guarantor pursuant to Section 11.05 of the Indenture: 
 McDavid Auction, L.P. 
 McDavid Houston-Kia, L.P. 
 McDavid
Irving-PB&G, L.P. 
 McDavid Irving-Zuk, L.P. 
  

 IV-1f8k070207ex10i_americansur.htm

    THIS
      NOTE
      HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL
      (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
      “ACT”) SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT
      BY THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
      TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION
      WITH
      SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES
      LAWS.

    

    

    

    AMERICAN
      SURGICAL HOLDINGS, INC.

    

    Promissory
      Note

    

    
      
        	
                $[_____]

              	
                [_________],
                  2007

              

      

    

     

    

    FOR
      VALUE
      RECEIVED, American Surgical Holdings, Inc., a Delaware corporation (the
“Company”) with its principal executive office at 10039
      Bissonnet #250, Houston, Texas 77036-7852, promises to pay to the order of
      [_____], at [______] (the “Payee” or the
“Holder”) or registered assigns,
      on the earlier of
      [_____], 2008 or upon the completion of a Qualified Offering (as defined herein)
      or a Liquidity Event (as defined herein), unless accelerated due to the
      occurrence of an Event of Default (the earlier of such dates is referred to
      as
      the “Maturity Date”), the principal amount of [_____]
      Dollars ($[_____]) (the “Principal Amount”) and interest
      on the Principal Amount (as set forth in Section 3), in such coin or currency
      of
      the United States of America as at the time of payment shall be legal tender
      for
      the payment of public and private debts.  Interest on this Note shall
      accrue on the Principal Amount outstanding from time to time at a rate per
      annum
      computed in accordance with Section 3 hereof.

    

    A
      “Qualified Offering” means the completion of an offering
      or offerings of Company securities, including any offering of debt or equity
      securities, or securities convertible into debt or equity securities, in the
      amount of no less than $3.0 million.  For the purposes of this
      definition, if the Company completes multiple discrete offerings of securities,
      such securities shall be aggregated in order to determine if the $3.0 million
      amount has been obtained.

    

    A
      “Liquidity Event” means any of the
      following:  (i) a merger of the Company into or with another person or
      any sale or transfer of the equity interests of the Company in any such case
      in
      which the equity holders of the Company immediately prior to such transaction
      possess less than 50% of the Company’s or the surviving entity's issued and
      outstanding equity interests immediately after such transaction; or (ii) the
      sale by the Company of all or substantially all of its assets.

    

    Copies
      of
      all payments shall be sent to Dawson James Securities, Inc., 925 South Federal
      Highway, 6th Floor, Boca Raton FL 33432, Attn: David Weinstein or Richard
      Aulicino (the “Placement Agent”).

    

    Any
      payment by the Company pursuant to this Note shall be made without set-off
      or
      counterclaim and in immediately available funds.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    The
      Company (i) waives presentment, demand, protest or notice of any kind in
      connection with this Note and (ii) agrees, in the event of an Event of Default,
      to pay to the holder of this Note, on demand, all costs and expenses (including
      reasonable legal fees) incurred in connection with the enforcement and
      collection of this Note.

    

    1.           Security;
      Unit Offering.  The obligations of the Company hereunder shall be
      unsecured obligations of the Company. This Note is part of a Unit issue (the
      “Offering”) conducted by the Company pursuant to the
      Private Placement Memorandum dated May 4, 2007 (including all exhibits and
      appendices thereto, the “Offering Documents”) pursuant
      to which the Company may issue up to $2,500,000 in principal amount of Notes;
      provided that the Placement Agent shall have the option to offer and sell an
      additional $1,000,000 in principal amount of Notes.

    

    2.           Right
      of Participation in a Qualified Offering.

    

    A.           If
      the Company commences a Qualified Offering prior to the Maturity Date, in lieu
      of repayment of principal and interest on the Notes, at the Holder’s option, the
      Holder may acquire securities in the Qualified Offering in the amount of such
      principal and interest at a purchase price per security equal to 85% of the
      price per security sold in the Qualified Offering.

    

    B.           If
      the Company commences a Qualified Offering prior to the Maturity Date, the
      Company will deliver to the Holder a notice (the “Offer Notice”), stating the
      price and other terms and conditions thereof not later than 15 business days
      prior to the closing date of the Qualified Offering.  The Holder will
      thereafter have the right to convert the principal and interest accrued pursuant
      to this Note into the securities issuable in the Qualified Offering at a
      purchase price per security equal to 85% of the price per security sold in
      the
      Qualified Offering, calculated as of the date the Qualified Offering is
      completed, by providing written notice to the Company delivered not later than
      10 days after the receipt of the Offer Notice.  The notice
      requirements set forth herein will apply to any Qualified Offerings commenced
      prior to the Maturity Date.

    

    3.           Computation
      of Interest.

    

    A.           Base
      Interest Rate.  Subject to subsection 3B, the outstanding
      Principal Amount shall bear interest at the rate of fifteen percent (15%) per
      annum, provided that in no event shall the interest rate exceed the Maximum
      Rate
      provided in Section 3B below. Accrued interest will be due and payable on the
      Maturity Date.  Interest shall be based on a 360 day
      year.

    

    B.           Maximum
      Rate.  In the event that it is determined that, under the laws
      relating to usury applicable to the Company or the indebtedness evidenced by
      this Note (“Applicable Usury Laws”), the interest
      charges and fees payable by the Company in connection herewith or in connection
      with any other document or instrument executed and delivered in connection
      herewith cause the effective interest rate applicable to the indebtedness
      evidenced by this Note to exceed the maximum rate allowed by law (the
“Maximum Rate”), then such interest shall be
      recalculated for the period in question and any excess over the Maximum Rate
      paid with respect to such period shall be credited, without further agreement
      or
      notice, to the Principal Amount outstanding hereunder to reduce said balance
      by
      such amount with the same force and effect as though the Company had
      specifically designated such extra sums to be so applied to principal and the
      Payee had agreed to accept such extra payment(s) as a premium-free
      prepayment.  

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    All
      such
      deemed prepayments shall be applied to the principal balance payable at
      maturity.  In no event shall any agreed-to or actual exaction as
      consideration for this Note exceed the limits imposed or provided by Applicable
      Usury Laws in the jurisdiction in which the Company is resident applicable
      to
      the use or detention of money or to forbearance in seeking its collection in
      the
      jurisdiction in which the Company is resident.

    

    4.           Covenants
      of Company

    

    A.           Affirmative
      Covenants.  The Company (for this purpose to include all
      subsidiaries of the Company) covenants and agrees that, so long as this Note
      shall be outstanding, it will perform the obligations set forth in this Section
      4A:

    

    (i)           Maintenance
      of Existence.  The Company will do or cause to be done all things
      reasonably necessary to preserve and keep in full force and effect its corporate
      existence, rights and franchises and comply with all laws applicable to the
      Company, except where the failure to comply would not have a material adverse
      effect on the Company;

    

    (ii)           Maintenance
      of Property.  The Company will at all times maintain, preserve,
      protect and keep its property used or useful in the conduct of its business
      in
      good repair, working order and condition, and from time to time make all needful
      and proper repairs, renewals, replacements and improvements thereto as shall
      be
      reasonably required in the conduct of its business;

    

    (iii)           Books
      and Records.  The Company will at all times keep true and correct
      books, records and accounts reflecting all of its business affairs and
      transactions in accordance with GAAP.  Such books and records shall be
      open at reasonable times and upon reasonable notice to the inspection of the
      Payee or its agents;

    

    (iv)           Notice
      of Certain Events.  The Company will give prompt written notice
      (with a description in reasonable detail) to the Payee of:

    

    (a)           the
      occurrence of any Event of Default or any event which, with the giving of notice
      or the lapse of time, would constitute an Event of Default; and

    

    (b)           the
      delivery of any notice effecting the acceleration of any indebtedness;
      and

    

    B.           Negative
      Covenants.  The Company (for this purpose to include all
      subsidiaries of the Company) covenants and agrees that, so long as this Note
      shall be outstanding, it will perform the obligations set forth in this Section
      4B (unless waived by or on behalf of the Holder):

    

    (i)           Liquidation,
      Dissolution, etc.  The Company will not engage in a Liquidity
      Event;

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    (ii)           Sales
      of Assets.  The Company will not sell, transfer, lease or
      otherwise dispose of any of its properties or assets to any person or entity,
      provided that this clause (ii) shall not restrict any disposition made in the
      ordinary course of business and consisting of

    

    (a)           capital
      goods which are obsolete or have no remaining useful life; or

    

    (b)           finished
      goods inventories;

    

    (iii)           Redemptions.  The
      Company will not redeem or repurchase any outstanding equity securities of
      the
      Company;

    

    (iv)           Indebtedness.  The
      Company will hereafter not create, incur, assume or suffer to exist,
      contingently or otherwise, any indebtedness for borrowed money (except for
      the
      incurrence of trade and vendor payables in the ordinary course of business)
      except that outstanding on the date hereof and indebtedness which has the prior
      approval of the Holder or its representative;

    

    (v)           Transactions
      with Affiliates.  Except as set forth in the Offering Documents,
      without the prior consent of the Holder or its representative, the Company
      will
      not enter into any transaction, including, without limitation, the purchase,
      sale, lease or exchange of property, real or personal, the purchase or sale
      of
      any security, the borrowing or lending of any money, or the rendering of any
      service, with any person or entity affiliated directly or indirectly with the
      Company (including officers, directors and shareholders owning 5% or more of
      the
      Company’s outstanding capital stock), except in the ordinary course of and
      pursuant to the reasonable requirements of its business and upon fair and
      reasonable terms not less favorable than would be obtained in a comparable
      arms-length transaction with any other person or entity not affiliated with
      the
      Company.

     

    

    (vi)           Dividends.  The
      Company will not declare or pay any cash dividends or distributions on its
      outstanding capital stock.

    

    5.           Events
      of Default

    

    A.           The
      term “Event of Default” shall mean any of the events set forth in this
      Section 5A (the term “Company” for this purpose shall include all subsidiaries
      of the Company):

    

    (i)           Non-Payment
      of Obligations.  The Company shall default in the payment of the
      principal or accrued interest of this Note as and when the same shall become
      due
      and payable, whether by acceleration or otherwise.

    

    (ii)           Non-Performance
      of Affirmative Covenants.  The Company shall default in the due
      observance or performance of any covenant set forth in Section 4A, which default
      shall continue uncured for thirty (30) days after notice thereof.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
 

    (iii)           Non-Performance
      of Negative Covenants.  The Company shall default in the due
      observance or performance of any covenant set forth in Section 4B, which default
      shall continue uncured for thirty (30) days after notice thereof.

    

    (iv)           Bankruptcy,
      Insolvency, etc.  The Company shall:

    

    (a)           admit
      in writing its inability to pay its debts as they become due;

    

    (b)           apply
      for, consent to, or acquiesce in, the appointment of a trustee, receiver,
      sequestrator or other custodian for the Company or any of its property, or
      make
      a general assignment for the benefit of creditors;

    

    (c)           in
      the absence of such application, consent or acquiesce in, permit or suffer
      to
      exist the appointment of a trustee, receiver, sequestrator or other custodian
      for the Company or for any part of its property;

    

    (d)           permit
      or suffer to exist the commencement of any bankruptcy, reorganization, debt
      arrangement or other case or proceeding under any bankruptcy or insolvency
      law,
      or any dissolution, winding up or liquidation proceeding, in respect of the
      Company, and, if such case or proceeding is not commenced by the Company or
      converted to a voluntary case, such case or proceeding shall be consented to
      or
      acquiesced in by the Company or shall result in the entry of an order for
      relief; or

    

    (e)           take
      any corporate or other action authorizing, or in furtherance of, any of the
      foregoing.

    

    (v)           Cross-Default.  The
      Company shall default in the payment when due of any amount payable under any
      other obligation of the Company for money borrowed in excess of
      $50,000.

    

    B.           Action
      if Bankruptcy.  If any Event of Default described in clauses
      (iv)(a) through (d) of Section 5A shall occur, the outstanding principal amount
      of this Note and all other obligations hereunder shall automatically be and
      become immediately due and payable, without notice or demand.

    

    C.           Action
      if Other Event of Default.  If any Event of Default (other than
      any Event of Default described in clauses (iv)(a) through (d) of Section 5A)
      shall occur for any reason, whether voluntary or involuntary, and be continuing,
      for 30 days after notice, the Holder may, upon notice to the Company, declare
      all or any portion of the outstanding principal amount of the Note, together
      with interest accrued thereon, to be due and payable and any or all other
      obligations hereunder to be due and payable, whereupon the full unpaid principal
      amount hereof, such accrued interest and any and all other such obligations
      which shall be so declared due and payable shall be and become immediately
      due
      and payable, without further notice, demand, or presentment.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    6.           Miscellaneous.

    

    A.           Parties
      in Interest.  All covenants, agreements and undertakings in this
      Note binding upon the Company or the Payee shall bind and inure to the benefit
      of the successors and permitted assigns of the Company and the Payee,
      respectively, whether so expressed or not.

    

    B.           Governing
      Law.   This Note shall be governed by the laws of the State
      of Texas as applied to contracts entered into and to be performed entirely
      within the State of Texas.

    

    C.           Waiver
      of Jury Trial.  THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
      INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
      OF
      ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
      THIS NOTE OR ANY OTHER DOCUMENT OR INSTRUMENT EXECUTED AND DELIVERED IN
      CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
      (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE PAYEE OR THE
      COMPANY.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PAYEE'S
      PURCHASING THIS NOTE.

    

    D.           Notice.  All
      notices shall be in writing, and shall be deemed given when actually delivered
      to a party at its address set forth herein personally, by a reputable overnight
      messenger.

    

    E.           No
      Waiver.  No delay in exercising any right hereunder shall be
      deemed a waiver thereof, and no waiver shall be deemed to have any application
      to any future default or exercise of rights hereunder.

    

    

    IN
      WITNESS WHEREOF, this Note has been executed and delivered on the date specified
      above by the duly authorized representative of the Company.

    

    AMERICAN
      SURGICAL HOLDINGS, INC.

    

    

    By:________________________________

          [______],
      [_____]

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