Document:

Second Amendment to Amended and Restated Loan and Security Agreement

 Exhibit 10.43 
 EXECUTION COPY 
 SECOND AMENDMENT TO AMENDED AND RESTATED 
 LOAN AND SECURITY AGREEMENT 
 SECOND
AMENDMENT, dated as of February 12, 2007 (this “Amendment”), to the Amended and Restated Loan and Security Agreement, dated as of January 24, 2006 (the “Loan Agreement”), among AMERICAN RAILCAR INDUSTRIES, INC., a
Delaware corporation, as successor-by-merger to American Railcar Industries, Inc., a Missouri corporation (the “Borrower”), each of the financial institutions identified as a Lender on Schedule 1 thereto (together with each of their
respective direct or indirect successors and assigns, and collectively, the “Lenders”), and NORTH FORK BUSINESS CAPITAL CORPORATION, a New York corporation (“NFBC”), as agent for the Lenders (the “Agent”). Capitalized
terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement. 
 W
I T N E S S E T H : 
 WHEREAS, the Borrower, the Agent and the
Lenders are parties to the Loan Agreement; and 
 WHEREAS, the parties wish to amend the Loan Agreement in connection with the
Borrower’s proposed investment in a joint venture to build a railcar component manufacturing facility. 
 NOW, THEREFORE, the
Borrower, the Lenders and the Agent agree as follows: 
 SECTION 1. Amendments to the Loan Agreement. Effective as of the date
hereof, the Loan Agreement is amended as follows: 
  

	 	(a)	Section 1.1 is amended as follows: 

  

	 	(i)	The following new definitions are inserted in proper order: 

 “‘Blocked Account Notice’ has the meaning specified in Section 2.7.” 
 “‘Component
Manufacturer” means a Person designated by the Borrower and acceptable to the Agent in its reasonable discretion, the equity ownership of which will be held by the Borrower (or a direct or indirect Subsidiary of the Borrower) and one or
more other Persons.” 
 “‘Excess Availability’ means, on any date, the excess of (i) the lesser of
(A) (I) the Borrowing Base plus (II) 80% of the cost of the Equipment financed with the proceeds of CapEx Loans (excluding the cost of any software, warranties or other intangible assets related thereto) and (B) (I) the Maximum
Amount of the Facility minus (II) the aggregate amount of CapEx Loans that have been repaid, over (ii) the aggregate outstanding amount of such Loans.” 

 “‘Excess Availability Shortfall’ means, on any date, that Excess Availability on
such date is less than $30,000,000 until Excess Availability is equal to or greater than $30,000,000 for any period of ninety consecutive days after such date.” 
  

	 	(ii)	the definition of “EBITDA” is amended by 

 (A) inserting “less (ix) net income (as that term is determined in accordance with GAAP) for such period derived from the Borrower’s ownership interest in the Component Manufacturer unless the
Borrower is liable for, or any of the Borrower’s assets serves as security or otherwise provides support for, payment or performance of any of the Component Manufacturer’s Indebtedness, in which case a percentage of the Component
Manufacturer’s net income equal to the percentage of the Component Manufacturer’s Indebtedness for which the Borrower is liable for, or for which any of the Borrower’s assets serves as security or otherwise provides support for,
payment or performance of shall be included in EBITDA, it being understood that cash dividends and other cash distributions received by the Borrower on account of the Borrower’s direct or indirect ownership of the Component Manufacturer shall
not be deducted under this clause (ix) except to the extent that the inclusion of any such distributions in EBITDA would be duplicative of the net income included in EBITDA as a result of the Borrower’s liability for, or the availability
of the Borrower’s assets as security or other support for, the payment or performance of the Indebtedness of the Component Manufacturer,” immediately before “in each case”, 
 (B) replacing “or (viii)” with “, (viii) or (ix)”, and 
 (C) inserting the following sentence at the end of such definition: “EBITDA shall be calculated on a pro forma basis to give effect
to any acquisition or disposition consummated during the applicable fiscal period of the Borrower ending on the last day of the fiscal quarter then most recently ended, as if such acquisition had been effected on the first day of such fiscal period
and as if each such disposition had been consummated on the day prior to the first day of such fiscal period, provided that any changes to EBITDA that would result from this sentence shall be made if and to the extent that such changes are
acceptable to the Agent in its sole discretion.”; and 
  

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 (iii) the definition of “Indebtedness” is amended by (A) replacing “Borrower or its
Subsidiaries” with “Borrower, any of its Subsidiaries or such other Person” in clause (iv) and (B) inserting at the end of such definition “and (C) Indebtedness shall not include Indebtedness of the Component
Manufacturer for which the Borrower is not liable for payment or performance or with respect to which the Borrower’s assets are not encumbered or do not otherwise provide support for”; 
 (b) Section 7.1(k)(iii) is amended by inserting (i) “, if an Excess Availability Shortfall has occurred and is continuing or the Borrower
has created, incurred or assumed any Indebtedness during such quarter” immediately before “a compliance certificate” and (ii) “, provided that, if an Excess Availability Shortfall occurs at any time during the
subsequent fiscal quarter, the Borrower shall deliver to the Agent a Compliance Certificate with respect to such previous quarter within five Business Days of such occurrence” immediately after “end of such quarter”; 
 (c) Section 8.1 is amended by inserting “if an Excess Availability Shortfall (i) has occurred and is continuing as of such last day or
(ii) occurs at any time during the subsequent calendar quarter” immediately after “1.0”; 
 (d) Section 8.2 is
amended by inserting “if (x) an Excess Availability Shortfall (i) has occurred and is continuing as of such last day or (ii) occurs at any time during the subsequent calendar quarter or (y) the Borrower has created, incurred
or assumed any Indebtedness during such quarter” immediately after “1.0”; 
 (e) Section 9.2(c) is amended by inserting
(A) “as of the most recent quarter end” immediately after “giving effect to such action” and (B) “, in each case if an Excess Availability Shortfall has occurred and is continuing or would occur after giving effect
to such action” immediately after “as the case may be”; 
 (f) Section 9.2(c)(F) is amended by inserting “, if an
Excess Availability Shortfall has occurred and is continuing or would occur after giving effect to such loan or advance” immediately after “respectively”; 
 (g) Section 9.2(c)(H) is amended by inserting “, if an Excess Availability Shortfall has occurred and is continuing or would occur after giving effect to such payment, purchase, redemption, defeasance,
retirement, acquisition or distribution” immediately after “respectively”; 
 (h) Section 9.2(c)(I) is amended by
inserting “, if an Excess Availability Shortfall has occurred and is continuing or would occur after giving effect to such acquisition,” immediately after “on a pro forma basis”; 
  

 -3- 

 (i) Schedule 6.1(g) shall be automatically amended to include the Borrower’s ownership interests in
the Component Manufacturer once sufficient information is available to describe such interests thereon; and 
 (j) Exhibit D is amended and
restated in the form of Annex I hereto. 
 SECTION 2. Conditions of Effectiveness. This Amendment shall become effective when,
and only when, the Agent shall have received (a) payment of the costs and expenses (including, without limitation, reasonable attorneys’ fees) incurred by the Agent in connection with this Amendment and (b) each of the following
documents (collectively, the “Amendment Documents”), which documents shall be in form and substance satisfactory to the Agent and dated as of the date hereof or such other date as shall be acceptable to the Agent: 
 (i) a counterpart of this Amendment, duly executed by the Borrower and each Lender; 
 (ii) a copy of the resolutions of the Board of Directors (or similar evidence of authorization) of the Borrower authorizing the execution,
delivery and performance of this Amendment and the other Amendment Documents to which the Borrower is a party and the transactions contemplated hereby and thereby, attached to which is a certificate of the Secretary or an Assistant Secretary of the
Borrower certifying the incumbency, names and true signatures of the officers of the Borrower authorized to sign this Amendment and the other Amendment Documents to which the Borrower is a party; and 
 (iii) such other agreements, instruments, documents and evidence as the Agent deems necessary in its reasonable discretion in connection
with the transactions contemplated hereby. 
 Notwithstanding the foregoing conditions, this Amendment shall become effective and the
conditions set forth above shall be deemed to have been satisfied upon delivery to the Borrower by the Agent of a copy of this Amendment, fully executed by the Agent and the Lenders. 
 SECTION 3. Representations and Warranties of the Borrower. The Borrower represents and warrants as follows: 
 (a) The Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified,
authorized to do business and in good standing in each jurisdiction in which it is presently engaged in business except to the extent that the failure to so qualify or be in good standing could not reasonably be expected to have a Material Adverse
Effect. 
 (b) The execution, delivery and performance by the Borrower of this Amendment and the other Amendment Documents (i) are
within the Borrower’s corporate powers, have been duly authorized by all necessary corporate action, (ii) do not contravene (A) any of the Borrower’s Governing Documents, (B) any Requirement of Law or (C) any 

  

 -4- 

 
contract of the Borrower listed as an exhibit to the Registration Statement or otherwise filed by the Borrower with the Securities and Exchange Commission
and (iii) will not result in the imposition of any Lien upon any of its properties except in favor of the Agent. 
 (c) No consent,
authorization or approval of, or filing with or other act by, any shareholders of the Borrower, any Governmental Authority or any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this
Amendment or any other Amendment Document to which the Borrower is a party, the consummation of the transactions contemplated hereby or thereby or the continuing operations of the Borrower following such consummation. 
 (d) This Amendment, the other Amendment Documents to which the Borrower is a party and the Loan Agreement as amended hereby constitute the legal, valid
and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms, except as enforceability may be limited by (i) bankruptcy, insolvency or similar laws affecting creditors’ rights generally
and (ii) general principles of equity. 
 (e) No judgments, orders, writs or decrees are outstanding against it, nor is there now
pending or, to its knowledge, threatened litigation, contested claim, investigation, arbitration, or governmental proceeding by or against the Borrower that (i) individually or in the aggregate could reasonably be expected to have a Material
Adverse Effect or (ii) purports to affect the legality, validity or enforceability of this Amendment, any of the other Amendment Documents to which the Borrower is a party, the Loan Agreement as amended hereby or the consummation of the
transactions contemplated hereby or thereby. 
 (f) No Default or Event of Default has occurred and is continuing. 
 SECTION 4. Reference to and Effect on the Loan Agreement. 
 (a) On and after the date hereof, each reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” and words of like import, and each reference in the
other Loan Documents to the Loan Agreement shall mean and be a reference to the Loan Agreement as amended hereby. 
 (b) The Loan Agreement
and each other Loan Document shall remain in full force and effect and are hereby ratified and confirmed by each of the parties hereto. 
 (c) Neither the Agent nor the Lenders shall be deemed to have waived any rights or remedies they may have under the Loan Agreement, any other Loan Document or applicable law. 
 (d) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as an amendment to any right,
power or remedy of the Agent or the Lenders under any of the Loan Documents, or constitute a waiver of or an amendment to any provision of any of the Loan Documents. 
  

 -5- 

 SECTION 5. Costs and Expenses; Component Manufacturer Documents. 
 (a) The Borrower agrees to pay, on demand, all reasonable out-of-pocket costs and expenses incurred by the Agent and the Lenders in connection with the
preparation, negotiation and execution of this Amendment and the other Amendment Documents (including, without limitation, the reasonable fees and expenses of counsel to the Agent and the Lenders). 
 (b) The Borrower shall deliver to the Agent a certificate of the Secretary or an Assistant Secretary of the Component Manufacturer, or of any similar
officer or person responsible for the records of the Component Manufacturer, attached to which shall be true and correct copies of (a) the Governing Documents of the Component Manufacturer and (b) a good standing certificate for the
Component Manufacturer dated as of a recent date, in each case as soon as practicable after such documents are available. 
 SECTION 6.
Counterparts; Telecopied Signatures. This Amendment may be executed in counterparts and by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. This Amendment may be executed and delivered by telecopier or other facsimile transmission all with the same force and effect as if the same were a fully executed and delivered original manual counterpart.

 SECTION 7. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AMENDMENT AND ANY DISPUTE ARISING OUT OF OR
IN CONNECTION WITH THIS AMENDMENT, WHETHER SOUNDING IN CONTRACT, TORT OR EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW)
AND DECISIONS OF THE STATE OF NEW YORK. 
  

 -6- 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their proper
and duly authorized officers as of the date first set forth above. 
  

			
	BORROWER
	
	AMERICAN RAILCAR INDUSTRIES, INC.
		
	By:	 	  
 /s/ William P.
Benac

		 	Name: William P. Benac
		 	Title: Sr. V.P., CFO and Treasurer
	
	LENDERS
	
	 NORTH FORK BUSINESS CAPITAL
 CORPORATION

		
	By:	 	/s/ Ari Kaplan
		 	Name: Ari Kaplan
		 	Title: Vice President
	
	THE CIT GROUP/BUSINESS CREDIT, INC.
		
	By:	 	  
		 	Name:
		 	Title:
	
	 ASSOCIATED BANK, NATIONAL
 ASSOCIATION

		
	By:	 	  
 /s/ Patrick
Mundelville

		 	Name: Patrick Mundelville
		 	Title: Sr. Vice President
	
	CITIBANK, N.A.
		
	By:	 	  
 /s/ JaHan Wang

		 	Name: JaHan Wang
		 	Title: Vice President

  

 -7- 

			
	AGENT
	
	 NORTH FORK BUSINESS CAPITAL
 CORPORATION

		
	By:	 	 /s/ Ari Kaplan

		 	Name: Ari Kaplan
		 	Title: Vice President

  

 -8- 

 ANNEX I 
 EXHIBIT D 
 [Form of Compliance Certificate]Letter of Intent for American Surgical Holdings, Inc.

     

    

    February
      7, 2007

    

    Mr.
      Zak
      W. Elgamal

    Director
      & CEO

    ASAH
      Corporation

    10039
      Bissonnet #250,

    Houston,
      Texas 77036 -7852

    

    Re:     Letter
      of
      Intent for American Surgical Holdings, Inc.

    Re:
      Proposed Public Offering Of Units

    

    Dear
      Mr.
      Elgamal:

    

    This
      letter of intent (the “Letter of Intent”) sets forth the basic terms and
      provisions that ASAH Corporation (the “Company”), on the one hand, and Dawson
      James Securities, Inc. (“the “Representative”), on the other hand, have
      discussed concerning the proposed public offering of the Company’s securities
      (the “Offering”) for which Offering the Representative shall serve as the lead
      underwriter. 

    

    In
      the
      course of such discussions, the Company has submitted and will continue
      submitting to us, among other things, recently audited and unaudited financial
      statements prepared in accordance with the Generally Accepted Accounting
      Principles (GAAP), consistently applied, and which, as the Company and its
      principals represented to us, fairly and accurately reflect the financial
      condition of the Company and certain additional information and projections
      relating to the Company’s proposed business activities as may be requested by
      us. 

    

    Based
      upon the foregoing discussions with and the representations made by the Company
      and its principals, the Company’s operations and financial condition, and upon
      our appraisal of the general conditions of the securities markets and subject
      to
      further due diligence, we hereby confirm our interest in either acting as the
      underwriter or as the Representatives of several underwriters to underwrite,
      on
      a firm commitment basis, the Offering in accordance with the basic terms and
      conditions set forth below herein below. The Representatives’ foregoing
      obligation to underwrite the Offering is subject to: (i) in the Representatives’
sole determination, satisfactory completion of its due diligence examination
      of
      the Company, its operations and financial condition; (ii) execution of a
      definitive underwriting agreement and related agreements thereto; (iii) mutual
      agreement by and between the Company and the Representatives on the valuation
      and pricing of the securities to be offered; (iv) market conditions on the
      effective date of the Offering, (v) approval of all matters relating to the
      Offering by our legal counsel, and (vi) the cooperation of the Company and
      its
      officers, directors, affiliates and counsel.

    

    The
      following terms, as used in this Letter of Intent, shall have the meanings
      set
      forth below:

     

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    
 

    “Securities
      Act” shall mean the Securities Act of 1933, as amended.

     

    “Commission”
      shall mean the United States Securities and Exchange Commission.

    

    “Common
      Stock” shall mean the common stock, par value $0.001 per shares, of the Company
      bearing that designation in its Certificate of Incorporation, as
      amended.

    

    “Exchange
      Act” shall mean the Securities Exchange Act of 1934, as amended.

    

    “Effective
      Date” shall mean the date of the prospectus supplement for the public offering
      of securities contemplated hereby.

    

    The
      “Public Offering Price” shall mean the price that when paid by an investor shall
      entitle such investor to receive the Securities Being Offered. It is anticipated
      that the Offering will result in gross proceeds of between three and seven
      million dollars ($3,000,000 to $7,000,000), and that the per unit Public
      Offering Price will be determined by mutual agreement of the Company and the
      Representatives. 

    

    “Registration
      Statement” shall mean the offering Statement declared effective and on file with
      the Commission relating to the public offering of the Company’s securities which
      are the subject of this Letter of Intent.

    

    “Representative
      Warrants” shall mean those warrants to be sold by the Company to the
      Representatives and/or persons related to the Representatives for nominal
      consideration, each such warrant evidencing the right to purchase one (1) unit
      at an exercise price equal to one hundred twenty percent (120%) of the per
      unit
      price and which shall be exercisable for a period of five (5) years commencing
      on the first anniversary of the Effective Date.

    

    “Securities
      Being Offered” shall mean units of securities to be determined

    

    1. (a)
      Prior
      to the initiation of the Offering, the Company, a corporation organized under
      the laws of the State of Delaware, shall provide to the Representatives and
      its
      counsel evidence of (i) its good standing under laws of its state of
      organization, and (ii) its capitalization so that the Company shall be
      authorized to issue up to one hundred million (100,000,000) shares of Common
      Stock, and ten million (10,000,000) shares of preferred stock, par value $0.001
      per share, of which capital stock there shall be no more than 18,000,000 shares
      of Common Stock issued and outstanding on the Effective Date. On the Effective
      Date, there will be no authorized, issued and/or outstanding securities of
      the
      Company except those securities disclosed to the Representative in writing,
      and
      there will be no commitments by the Company to issue any additional securities
      of the Company, except such commitments undertaken by the Company in the
      ordinary course of business (including, but not limited to stock option plans)
      and disclosed to the Representative in writing. No holders of any of the
      securities of the Company shall have any preemptive rights of any nature.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    From
      the
      date of signing of this Letter of Intent through one hundred twenty (120) days
      from the date of the final prospectus, the Company shall not, without the prior
      written consent of the Representatives, issue, sell, offer to sell, grant any
      option for the sale of, to otherwise dispose of, directly or indirectly, any
      equity securities or other securities convertible into, exercisable for, or
      exchangeable for equity securities except with respect to the Offering other
      than the issuance of shares of the Common Stock upon exercise of stock options
      and warrants disclosed as outstanding and the grant of options under stock
      option plans. It is agreed that a bona fide Offering shall commence within
      three
      (3) business days of the Effective Date. Further, the Company shall not
      designate or issue any of its securities prior to or in connection with the
      proposed Offering or a business combination without the prior written consent
      of
      the Representatives, which consent shall be unreasonably withheld by such
      Representatives.

    

    (b)
      We
      estimate that the Securities Being Offered will be offered to the public at
      the
      Public Offering Price to be determined at the time of the Offering by the
      Representatives subject to market and other applicable conditions.

    

    2. Subject
      to and consistent with any applicable fiduciary duties and responsibilities,
      the
      Company will take any and all necessary and required corporate action and will
      undertake and effect any and all filings and submissions to authorize the
      issuance and sale of the Securities Being Offered. 

    

     

    3. The
      Company will take all reasonable steps necessary to ensure that the Registration
      Statement covers: (a) the Securities Being Offered in the Offering (including,
      at the Representatives’ discretion, an over-allotment equal to fifteen percent
      (15%) (or such lesser amount as may be specified by the National Association
      of
      Securities Dealers, Inc., (“NASD”) of the Securities Being Offered); (b) the
      securities included in and/or issuable upon exercise of the securities included
      in the Securities Being Offered; and (c) the Representative Warrants and number
      of Shares, Warrants and shares of the Common Stock underlying the Representative
      Warrants.

    

    	4.  	
            There
              is no “Finder” involved in this
              transaction.

          

    

    5. It
      is the
      intention of the Representatives, pursuant to an agreement to be executed by
      and
      between the Company and the Representatives (the “Underwriting Agreement”), to
      act as principal in purchasing the Securities Being Offered from the Company
      and
      to offer the Securities Being Offered in the Offering on a “firm commitment”
basis. The Underwriters (as defined below) shall receive a gross discount equal
      to ten percent (10%) of the Public Offering Price on each unit of Securities
      Being Offered sold by or through the Representatives. The Representatives may,
      at their discretion, negotiate with other underwriters (the “Underwriters”) who
      are members in good standing with the NASD, and who, acting severally, would
      contract to act as an Underwriter in connection with the sale of the Securities
      Being Offered in the Offering. The Representatives shall also have the right
      to
      re-offer all or any part of the Securities Being Offered to broker-dealers
      who
      are members of the NASD (the “Selected Dealers”) and may allow a concession, to
      be determined by the Representatives, to such Selected Dealers in accordance
      with the NASD Conduct Rules. 

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    Pending
      completion of the financing contemplated herein, the Company agrees that it
      will
      not negotiate with any other underwriter relating to a possible private or
      public offering or placement of its securities. 

    

    6. For
      the
      purpose of covering over-allotments, the Company shall grant to the
      Representatives an option to purchase a number of Securities Being Offered
      equal
      to up to an aggregate not to exceed 15 percent of the Securities Being Offered
      at the Public Offering Price, in whole or in part, from time to time, only
      during a period of forty-five (45) days from the Effective Date, at the price
      equal to the Public Offering Price less
      underwriting discount and non-accountable expense allowance, if any. However,
      in
      no event shall the amount of securities sold exceed the amount registered under
      the Registration Statement.

    

    7. The
      Representatives shall be entitled to an expense allowance equal to three percent
      (3%) of the gross proceeds of the Offering. Said expense allowance is intended
      to cover the internal expenses of the Representatives incurred by them in
      connection with the Offering contemplated by this Letter of Intent. The
      Representatives shall not be required to make an accounting to the Company
      with
      respect to said expenses. Such expense allowance shall not include any costs
      and
      expenses set forth in Section 11 hereof. 

    

    8. At
      the
      closing of the Offering, the Company shall sell to the Representatives and/or
      their designees (the “Holders”), the Representative Warrants. The Representative
      Warrants shall be for that number of Units equal to ten percent (10%) of the
      total number of Units sold to the public in the Offering. The Representative
      Warrants cannot be transferred, sold, assigned or hypothecated by the Holders
      during the first twelve (12) months following the Effective Date, except (1)
      to
      officers, directors employees and/or partners of the Representatives and
      Selected Dealers; (2) by will; or (3) by operation of law, and may be exercised
      in whole or in part at any time, and from time to time, during the five (5)
      year
      period following the Effective Date at one hundred twenty percent (120%) of
      the
      price at which the Units are sold to the public in the Offering. Such
      Representative Warrants shall contain customary anti-dilution, exercise terms
      and provisions satisfactory to the Representatives and consistent with the
      NASD
      Rules. 

    

    9.
      From
      the date hereof until such time as the Representative Warrants are outstanding,
      the Company shall promptly take such action as may be necessary so that the
      Registration Statement and any amendment thereto and the prospectus and any
      amendment or supplement thereto (and each report or other document incorporated
      by reference therein in each case) remains effective and complies in all
      material respects with the Securities Act and the Exchange Act and the
      respective rules and regulations thereunder, (ii) the Registration Statement
      and
      any amendment thereto does not contain an untrue statement of a material fact
      or
      omit to state a material fact required to be stated therein or necessary to
      make
      the statements therein, in light of the circumstances under which they were
      made, not misleading and (iii) each of the prospectus and any amendment or
      supplement to the prospectus does not include an untrue statement of a material
      fact or omit to state a material fact necessary in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading. 

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    10.
      During such time as the Representative Warrants are outstanding, the Company
      will agree not to merge, consolidate, reorganize, or take any other action
      that
      would have the effect of terminating the Representatives Warrants without first
      making adequate provisions for the Representatives Warrants. Other terms
      regarding the rights of the holders of the Representatives Warrants will be
      included in an agreement to be entered into by and between the Company and
      the
      Representatives.

    

    11.
      The
      Company will pay $50,000.00 to the Representative for its due diligence of
      the
      Company. Said deposit is non refundable.

    

    12.
      (a)
      If the Offering is successfully completed, the Company will bear all other
      expenses directly and necessarily incurred in connection with the Offering
      minus
      the $50,000 deposit paid upon executing this LOI, including, but not limited
      to,
      the following items:

    

    
      	 	
              (i)

            	
              Cost
                of preparing, printing and filing with the Commission and the NASD
                the
                Registration Statement and amendments and supplements thereto, and
                post-effective amendments, and payment of all necessary fees and
                the
                printing of a sufficient quantity of preliminary and final prospectuses
                as
                the Representatives may reasonably
                request;

            

    

    

    
      	 	
              (ii)

            	
              Cost
                of preparing, printing and delivering exhibits thereto, in such quantities
                as the Representatives may reasonably
                request;

            

    

    

    	(iii)  	
            Cost
              of preparing and delivering all certificates including those representing
              the Units, Common Stock and Warrants;

          

    

    	(iv)  	
            Fees
              of counsel and accountants for the
              Company;

          

    

    	(v)  	
            The
              cost of preparing and delivering to the Representatives and its counsel,
              bound volumes containing copies of all documents and appropriate
              correspondence filed with or received from the Commission and the NASD
              and
              all closing documents;

          

    

    	(vi)  	
            The
              fees and disbursements of the transfer agent for the Company’s
              securities;

          

    

    	(vii)  	
            The
              legal fees and expenses of preparing the Underwriting Agreement, Agreement
              among Underwriters, Selling Agreement, Underwriters’ Questionnaire and
              Power of Attorney and any other agreements reasonably related to the
              effective discharge of the Representatives’ obligations under this Letter
              of Intent;

          

    

    	(viii)  	
            Fees
              and expenses of counsel in connection with NASD compensation
              review;

          

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
 

    	(ix)  	
            All
              reasonable travel and lodging expenses incurred by the Representatives
              and/or its counsel in connection with visits to, and examinations of,
              the
              Company’s premises;

          

    

    	(x)  	
            The
              reasonable cost for due diligence meetings and/or roadshows, including
              the
              cost of informational meetings at the offices of the
              Representatives;

          

    

    	(xi)  	
            The
              background and credit searches of its directors, officers and
              affiliates;

          

    

    	(xii)  	
            The
              Company will prepare at its expense a videotape of approximately five
              minutes duration or a “power point” presentation of the Company and its
              business; and

          

    

    	(xiii)  	
            The
              cost of “tombstone” advertisements, which shall announce the completion of
              the offering to the financial community, of at least 5 x 5 inches in
              publications to be designated by the Representatives at a total cost
              not
              to exceed $10,000.

          

    

    (b)  At
      the
      closing of the Offering, the Company will reimburse the Representatives the
      fees
      and expenses in full set forth in subparagraphs (a)(vii)-(xi) of Section 11
      hereof. 

    

    13. The
      Company’s auditors will be independent certified public accountants as that term
      is defined under the Securities Act and the rules and regulations promulgated
      thereunder and will comply with provisions of the Sarbanes-Oxley Act of 2002
      and
      rules and regulations promulgated thereunder, and at the Effective Date and
      at
      each closing date will give a cold comfort letter acceptable to the
      Representatives and their legal counsel.

    

    14. As
      of the
      Effective Date of the Offering, the Company agrees that the Company’s securities
      shall be registered pursuant to Section 12 of the Exchange Act, and the Company
      agrees to maintain such registration.

    

    15. The
      Offering is contingent upon the Company’s listing of either the preferred stock
      or the common stock on either The OTCBB, The Nasdaq Stock Market, Inc.
      (“Nasdaq”) to quote the Common Stock thereon or the American Stock Exchange.

     

    16. All
      information included in the Registration Statement, in addition to audited
      and
      unaudited financial statements prepared in accordance with GAAP, consistently
      applied, such other information concerning the Company’s business, properties,
      prospects, capitalization, principal shareholders, management and history as
      may
      be required under the federal and state securities and other applicable laws,
      was true, accurate and correct in all material respects on the date the
      Registration Statement was declared effective by the Commission. 

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    
 

    17. The
      Company represents to the Representatives that neither the Company nor its
      management knows of any facts which would materially and adversely affect the
      Company’s projections or the financial condition of the Company as a whole, or
      which would materially and adversely affect its earnings or prospects, which
      have not been fully disclosed to the Representatives, are not contained in
      the
      Company’s financial statements or in the Registration Statement. Until the
      Effective Date or until the termination of this Letter of Intent, whichever
      first occurs, the Company will notify the Representatives promptly of the
      occurrence of any event which might material affect the public offering or
      the
      status of the Company.

    

    18. The
      Offering will be subject to compliance with the Securities Act and other
      applicable federal and state securities laws. All relevant terms, conditions
      and
      circumstances relating to the proposed offering will be reasonably satisfactory
      to the Representatives and its counsel. The feasibility of the Offering will
      depend upon the results of the Representatives’ due diligence and additional
      investigation of the Company, information about the Company that the
      Representatives may receive, including, but not limited to, due diligence
      reports concerning the Company’s operations, management, and business plan, and
      the continuation of the operation of the Company, without material adverse
      change. 

    

    19. In
      the
      event that the Securities Being Offered are sold by the Representatives, the
      Company agrees that it will, for a period of two (2) years from the Closing
      Date
      of said Offering:

     

    
      	 	
              (i)

            	
              Furnish
                to the Representatives an annual report and annual financial statements;
                and,

            

    

     

    
      	 	
              (ii)

            	
              Furnish
                the Representatives with copies of all filings with the Commission,
                excluding filings made on the Commission’s EDGAR system.
                .

            

    

     

    

    20. All
      officers, directors, consultants and principal stockholders (owners of five
      percent (5%) or more of the Company’s securities) that own any of the Company’s
      securities (including warrants, options and Common Stock of the Company) as
      of
      the Effective Date shall agree in writing, in a form satisfactory to the
      Representatives and their counsel, not to sell, transfer or otherwise dispose
      of
      any of such securities (or underlying securities) of the Company for a period
      of
      ninety (90) days from the Effective Date or any longer period required by the
      NASD, Nasdaq or any State (each a “Lock-up Letter”), without the express written
      consent of the Representatives.

    

    21. Except
      for routine customary advertising of the Company’s products and services and as
      required by any applicable law or the directive of any relevant regulatory
      authority in any relevant jurisdiction or Nasdaq continued listing requirements,
      no news releases or other publicity about the Company will be permitted without
      approval by legal counsel of the Representatives and the Company prior to the
      Effective Date.

    

    22. Pending
      completion of the Offering contemplated herein, the Company agrees that it
      will
      not negotiate with any other broker-dealer or other person relating to a
      possible private and/or public offering of its securities without the written
      consent of the Representatives, provided that the Representatives remain in
      good
      standing with the NASD. 

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    In
      the
      event the Company enters into a Letter of Intent or effectuates a private and/or
      a public offering of its securities with another broker-dealer or any other
      person without the written permission of the Representatives, after the
      execution of this Letter of Intent and prior to May 31, 2007, the Company,
      in
      compliance with the NASD Conduct Rules, shall be liable to the Representatives
      for the out-of-pocket accountable expenses of the Representatives due and
      payable immediately upon such engagement with another broker-dealer. In
      addition, the Company agrees that if the Company is sold, merged or otherwise
      disposed of or enters into a business combination or similar transaction in
      a
      manner not contemplated by this Letter of Intent after execution of this Letter
      of Intent and prior to December 31, 2007, as the result of which the Company
      is
      not the surviving entity or cannot complete the Offering, the Company shall
      pay
      the out-of-pocket accountable expenses of the Representatives due and payable
      immediately upon such corporate event or transaction. 

    

    23. Governing
      Law. 
      This Agreement shall be governed by and construed and enforced in accor-dance
      with the laws of the State of Florida, without giving effect to conflicts of
      law
      principles that would result in the application of the substantive laws of
      another jurisdiction.  The Company hereby agrees that any action,
      proceeding or claim against it arising out of, or relating in any way to this
      Agreement shall be brought and enforced in the courts of the State of Florida
      or
      the United States of America for the Southern District of Florida, and
      irrevocably submits to such jurisdiction, which jurisdiction shall be
      exclu-sive.  The Company hereby waives any objection to such exclusive
      jurisdiction and that such courts represent an inconvenient forum.  Any
      such process or summons to be served upon the Company may be served by
      transmitting a copy thereof by registered or certified mail, return receipt
      requested, postage prepaid, addressed to it at the address set forth in Section
      10 hereof.  Such mailing shall be deemed personal service and shall be
      legal and binding upon the Company in any action, proceeding or claim.  The
      Company agrees that the pre-vailing party(ies) in any such action shall be
      entitled to recover from the other party(ies) all of its reasonable attor-neys’
fees and expenses relating to such action or proceeding and/or incurred in
      connection with the preparation therefor.

    

    

    24. The
      within Letter of Intent may be signed in counterparts, but all such counterparts
      shall be considered as a single document.

    

    25. Except
      for the Company’s obligations to the Representatives as expressly set forth in
      this Letter of Intent, which obligations are intended to be and are binding
      obligations, this Letter of Intent is entered into as a letter of intent only,
      which evidences a brief outline and mutual intention at this time to effect
      the
      proposed transactions described herein as contemplated, but does not constitute
      a binding obligation to do so. Any further legal obligations between the parties
      thereto shall be undertaken only in an Underwriting Agreement, and related
      documents. 

    

    26. Pending
      completion of the Offering contemplated herein, the Company agrees that it
      will
      not negotiate with any other broker-dealer or other person relating to a
      possible private and/or public offering of its securities without the written
      consent of the Representatives, provided that the Representatives remain in
      good
      standing with the NASD. 

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    In
      the
      event the Company enters into a Letter of Intent or effectuates a private and/or
      a public offering of its securities with another broker-dealer or any other
      person without the written permission of the Representatives, after the
      execution of this Letter of Intent and prior to one (1) year after the date
      of
      this Letter of Intent, the Company shall be liable to the Representatives for
      the accountable expenses of the Representatives and $125,000 due and payable
      immediately upon such engagement with another broker-dealer. In addition, the
      Company agrees that if the Company is sold, merged or otherwise disposed of
      or
      enters into a business combination or similar transaction in a manner not
      contemplated by this Letter of Intent after execution of this Letter of Intent
      and prior to one (1) year after the date of this Letter of intent, as the result
      of which the Company is not the surviving entity or cannot complete the
      Offering, the Company shall pay the accountable expenses of the Representatives
      and $125,000 due and payable immediately upon such corporate event or
      transaction. 

    

    

    27. This
      Letter of Intent shall remain in full force and effect until May 31, 2007
      subject to: (i) earlier execution of an Underwriting Agreement and related
      documents and (ii) extension of the term hereof by agreement of the parties
      hereto in writing. 

    

    If
      you
      are in accord with the terms of this Letter of Intent, please sign where
      indicated below and return a signed copy to the undersigned. 

     

    Very
      truly yours,

     

    Dawson
      James Securities, Inc.

    

                                          
/s/
      David H. Weinstein_____________

    David
      H.
      Weinstein

    Managing
      Director, Investment Banking

     

    

    The
      terms
      of this Letter of Intent have been accepted and agreed to as of the date first
      above written.

    

    ACCEPTED
      AND AGREED TO this 7th
      day of February, 2007.

    

    American
      Surgical Holdings, Inc.

    

    

    By:_/s/
      Zak W. Elgamal________

    Name:
      Zak
      W. Elgamal

    Title:
      Director, CEO

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