Exhibit 10.1

 

 

ESCROW AGREEMENT

 

THIS SUBSCRIPTION ESCROW AGREEMENT dated as of August 20, 2014 (this
“Agreement”), is entered into among Realty Capital Securities, LLC (the “Dealer
Manager”), American Realty Capital Healthcare Trust III, Inc. (the “Company”)
and UMB Bank, N.A., as escrow agent (the “Escrow Agent”).

 

WHEREAS, the Company intends to raise funds from Investors (as defined below)
pursuant to a public offering (the “Offering”) for gross proceeds of not less
than $2,000,000 (the “Minimum Amount”) from the sale of shares of common stock,
par value $0.01 per share, of the Company (the “Securities”), pursuant to the
registration statement on Form S-11 of the Company (No. 333-196302) (as amended,
the “Offering Document”) a copy of which is attached as Exhibit A hereto.

 

WHEREAS, the Company desires to establish an escrow account with the Escrow
Agent for funds contributed by the Investors with the Escrow Agent in accordance
with the Offering Document, to be held for the benefit of the Investors and the
Company until such time as (i) in the case of subscriptions received from
residents of Pennsylvania (“Pennsylvania Investors”), Securities sold in the
Offering to all Investors equal, in the aggregate, to $156,250,000 (the
“Pennsylvania Minimum Amount”), (ii) in the case of subscriptions received from
residents of Washington (“Washington Investors”), Securities sold in the
Offering to all Investors equal, in the aggregate, to $20,000,000 (the
“Washington Minimum Amount”) and (iii) in the case of subscriptions received
from all other Investors, Securities sold in the Offering equal the Minimum
Amount, in each case in accordance with the terms and subject to the conditions
of this Agreement.

 

WHEREAS, the Escrow Agent is willing to accept appointment as escrow agent only
for the express duties set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:

 

1.          Proceeds to be Escrowed. On or before the date (the “Initial
Effective Date”) the Offering Document was initially declared effective by the
Securities and Exchange Commission (the “SEC”), the Company shall establish an
escrow account with the Escrow Agent to be invested in accordance with Section 6
hereof entitled “ESCROW ACCOUNT FOR THE BENEFIT OF INVESTORS OF COMMON STOCK OF
AMERICAN REALTY CAPITAL HEALTHCARE TRUST III, INC.” (including such
abbreviations as are required for the Escrow Agent’s systems) (the “Escrow
Account”). All checks, wire transfers and other funds received from subscribers
of Securities (“Investors”, which term shall also include Washington Investors
and Pennsylvania Investors unless the context otherwise requires) in payment for
the Securities (“Investor Funds”) will be delivered to the Escrow Agent within
one (1) business day following the day upon which such Investor Funds are
received by the Company or its agents, and shall, upon receipt by the Escrow
Agent, be retained in escrow by the Escrow Agent and invested as stated herein.
During the term of this Agreement, the Company or its agents shall cause all
checks received by and made payable to it in payment for the Securities to be
endorsed for favor of the Escrow Agent and delivered to the Escrow Agent for
deposit in the Escrow Account.

 

The Company shall, and shall cause its agents to, cooperate with the Escrow
Agent in separately accounting for Investor Funds from Washington Investors and
Pennsylvania Investors in the Escrow Account, and the Escrow Agent shall be
entitled to rely upon information provided by the Company or its agents in this
regard.

 

The Escrow Agent shall have no duty to make any disbursement, investment or
other use of Investor Funds until and unless it has good and collected funds. If
any checks deposited in the Escrow Account are returned or prove uncollectible
after the funds represented thereby have been released by the Escrow Agent, then
the Company shall promptly reimburse the Escrow Agent for any and all costs
incurred for such, upon request, and the Escrow Agent shall deliver the returned
checks to the Company. The Escrow Agent shall be under no duty or responsibility
to enforce collection of any check delivered to it hereunder. The Escrow Agent
reserves the right to deny, suspend or terminate participation by an Investor to
the extent the Escrow Agent deems it advisable or necessary to comply with
applicable laws or to eliminate practices that are not consistent with the
purposes of the Offering.

 

 

 

 

2.          Investors. Investors will be instructed by the Dealer Manager or any
soliciting dealers retained by the Dealer Manager in connection with the
Offering (the “Soliciting Dealers”) to remit the purchase price in the form of
checks (hereinafter “instruments of payment”) payable to the order of, or funds
wired in favor of, “UMB BANK, N.A., ESCROW AGENT FOR AMERICAN REALTY CAPITAL
HEALTHCARE TRUST III, INC.” Any checks made payable to a party other than the
Escrow Agent shall be returned to the Dealer Manager or Soliciting Dealer that
submitted the check. By 12:00 p.m. (EST) the next business day after receipt by
the Escrow Agent of instruments of payment from the Offering, the Company or the
Dealer Manager shall furnish the Escrow Agent with a list of the Investors who
have paid for the Securities showing the name, address, tax identification
number, the amount of Securities subscribed for purchase, the amount paid and
whether such Investors are Washington Investors or Pennsylvania Investors. The
information comprising the identity of Investors shall be provided to the Escrow
Agent in substantially the format set forth in the list of investors attached
hereto as Exhibit B (the “List of Investors”). The Escrow Agent shall be
entitled to conclusively rely upon the List of Investors in determining whether
Investors are Washington Investors or Pennsylvania Investors, and shall have no
duty to independently determine or verify the same.

 

When a Soliciting Dealer’s internal supervisory procedures are conducted at the
site at which the subscription agreement and the check for the purchase of
Securities were initially received by Soliciting Dealer from the subscriber,
such Soliciting Dealer shall transmit the subscription agreement and such check
to the Escrow Agent by the end of the next business day following receipt of the
check for the purchase of Securities and subscription agreement. When, pursuant
to such Soliciting Dealer’s internal supervisory procedures, such Soliciting
Dealer’s final internal supervisory procedures are conducted at a different
location (the “Final Review Office”), such Soliciting Dealer shall transmit the
check for the purchase of Securities and subscription agreement to the Final
Review Office by the end of the next business day following Soliciting Dealer’s
receipt of the subscription agreement and the check for the purchase of
Securities. The Final Review Office will, by the end of the next business day
following its receipt of the subscription agreement and the check for the
purchase of Securities, forward both the subscription agreement and such check
to the Escrow Agent. If any subscription agreement solicited by a Soliciting
Dealer is rejected by the Dealer Manager or the Company, then the subscription
agreement and check for the purchase of Securities will be returned to the
rejected subscriber within ten (10) business days from the date of rejection.

 

All Investor Funds deposited in the Escrow Account shall not be subject to any
liens or charges by the Company or the Escrow Agent, or judgments or creditors’
claims against the Company, until and unless released to the Company as
hereinafter provided. The Company understands and agrees that the Company shall
not be entitled to any Investor Funds on deposit in the Escrow Account and no
such funds shall become the property of the Company, or any other entity except
as released to the Company pursuant to Sections 3, 4 or 5 hereto. The Escrow
Agent will not use the information provided to it by the Company for any purpose
other than to fulfill its obligations as Escrow Agent hereunder. The Company and
the Escrow Agent will treat all Investor information as confidential. The Escrow
Agent shall not be required to accept any Investor Funds which are not
accompanied by the information on the List of Investors.

 

3.          Disbursement of Funds. Once proceeds from the sale of Securities
equal the Minimum Amount (excluding Securities sold to Washington Investors and
Pennsylvania Investors), the Company shall notify the Escrow Agent of the same
in writing. Further, if the Minimum Amount has not been sold on or prior to the
Termination Date, the Company shall notify the Escrow Agent in writing of such.
At the end of the third business day following the Termination Date (as defined
in Section 6), the Escrow Agent shall notify the Company of the amount of the
Investor Funds received. If the Minimum Amount has been obtained on or before
the Termination Date, the Escrow Agent shall promptly notify the Company and,
upon receiving acknowledgement of such notice and written instructions from the
Company’s Chief Executive Officer, President or Chief Financial Officer to
disburse the Investor Funds, subject to Sections 3, 4 or 5, the Escrow Agent
shall disburse to the Company, by check or wire transfer, the funds in the
Escrow Account, except for amounts payable by the Company to the Escrow Agent
pursuant to Exhibit D to this Agreement that remain outstanding. The Escrow
Agent agrees that funds in the Escrow Account shall not be released to the
Company until and unless the Escrow Agent receives written instructions to
release the funds from the Company’s Chief Executive Officer, President or Chief
Financial Officer.

 

 

 

 

If the Company notifies the Escrow Agent in writing that the Minimum Amount has
not been obtained prior to the Termination Date, the Escrow Agent shall,
promptly following the Termination Date, but in no event more than ten (10)
business days after the Termination Date, refund to each Investor by check,
funds deposited in the Escrow Account, or shall return the instruments of
payment delivered to Escrow Agent if such instruments have not been processed
for collection prior to such time, directly to each Investor at the address
provided on the List of Investors. Included in the remittance shall be a
proportionate share of the income earned in the account allocable to each
Investor’s investment in accordance with the terms and conditions specified
herein, except that in the case of Investors who have not provided an executed
Form W-9 or substitute Form W-9 (or the applicable substitute Form W-8 for
foreign investors), the Escrow Agent shall withhold the applicable percentage of
the earnings attributable to those Investors in accordance with Internal Revenue
Service (“IRS”) regulations. Notwithstanding the foregoing, the Escrow Agent
shall not be required to remit any payments until funds represented by such
payments have been collected by the Escrow Agent.

 

If the Escrow Agent receives written notice from the Company that the Company
intends to reject an Investor’s subscription, the Escrow Agent shall pay to the
applicable Investor(s), within a reasonable time not to exceed ten (10) business
days after receiving notice of the rejection, by first class United States Mail
at the address provided on the List of Investors, or at such other address as
shall be furnished to the Escrow Agent by the Investor in writing, all collected
sums paid by the Investor for Securities and received by the Escrow Agent,
together with the interest earned on such Investor Funds (determined in
accordance with the terms and conditions specified herein).

 

4.          Disbursement of Proceeds for Pennsylvania Investors. Notwithstanding
the foregoing, proceeds from sales of Securities to Pennsylvania Investors will
not count towards meeting the Minimum Amount for purposes of Section 3. Proceeds
received from sales of Securities to Pennsylvania Investors will not be released
from the Escrow Account until the Pennsylvania Minimum Amount is obtained. If
the Pennsylvania Minimum Amount is obtained at any time prior to the Termination
Date, the Escrow Agent shall promptly notify the Company and, upon receiving
acknowledgement of such notice and written instructions from the Company’s Chief
Executive Officer, President or Chief Financial Officer, the Escrow Agent shall
disburse to the Company, by check or wire transfer, the funds in the Escrow
Account representing proceeds from Pennsylvania Investors, except for amounts
payable by the Company to the Escrow Agent pursuant to Exhibit D to this
Agreement that remain outstanding. The Escrow Agent agrees that the Pennsylvania
Minimum Amount in the Escrow Account shall not be released to the Company until
and unless the Escrow Agent receives written instructions to release the funds
from the Company’s Chief Executive Officer, President or Chief Financial
Officer.

 

If the Pennsylvania Minimum Amount has not been obtained prior to the
Termination Date, upon written instructions from the Company’s Chief Executive
Officer, President or Chief Financial Officer, the Escrow Agent shall promptly
refund to each Pennsylvania Investor by check funds deposited in the Escrow
Account, or shall return the instruments of payment delivered to Escrow Agent if
such instruments have not been processed for collection prior to such time,
directly to each Pennsylvania Investor at the address provided on the List of
Investors. Included in the remittance shall be a proportionate share of the
income earned in the account allocable to each Pennsylvania Investor’s
investment in accordance with the terms and conditions specified herein, except
that in the case of Investors who have not provided an executed Form W-9 or
substitute Form W-9, the Escrow Agent shall withhold the applicable percentage
of the earnings attributable to those Investors in accordance with IRS
regulations. Notwithstanding the foregoing, the Escrow Agent shall not be
required to remit any payments until funds represented by such payments have
been collected by Escrow Agent.

 

If the Escrow Agent is not in receipt of evidence of subscriptions accepted on
or before the close of business on such date that is 120 days after the Initial
Effective Date (the “Initial Escrow Period”), and instruments of payment dated
not later than that date, for the purchase of Securities providing for total
purchase proceeds from all nonaffiliated sources that equal or exceed the
Pennsylvania Minimum Amount, the Escrow Agent shall promptly notify the Company.
Thereafter, the Company or its agents shall send to each Pennsylvania Investor
by certified mail within ten (10) calendar days after the end of the Initial
Escrow Period a notification substantially in the form of Exhibit F. If,
pursuant to such notification, a Pennsylvania Investor requests the return of
his or her Investor Funds within ten (10) calendar days after receipt of the
notification (the “Request Period”), the Escrow Agent shall promptly refund
directly to each Pennsylvania Investor the collected funds deposited in the
Escrow Account on behalf of such Pennsylvania Investor or shall return the
instruments of payment delivered, but not yet processed for collection prior to
such time, to the address provided on the List of Investors, upon which the
Escrow Agent shall be

 

 

 

 

entitled to rely, together with interest income earned as determined in
accordance with the terms and conditions specified herein (which interest shall
be paid within five business days after the first business day of the succeeding
month). Notwithstanding the above, if the Escrow Agent has not received an
executed Form W-9 or substitute Form W-9 for such Pennsylvania Investor, the
Escrow Agent shall thereupon remit an amount to such Pennsylvania Investor in
accordance with the provisions hereof, withholding the applicable percentage for
backup withholding in accordance with IRS regulations, as then in effect, from
any interest income earned on Investor Funds (determined in accordance with the
terms and conditions specified herein) attributable to such Pennsylvania
Investor. However, the Escrow Agent shall not be required to remit such payments
until the Escrow Agent has collected funds represented by such payments.

 

The Investor Funds of Pennsylvania Investors who do not request the return of
their Investor Funds within the Request Period shall remain in the Escrow
Account for successive 120-day escrow periods (each a “Successive Escrow
Period”), each commencing automatically upon the termination of the prior
Successive Escrow Period, and the Company and Escrow Agent shall follow the
notification and payment procedure set forth above with respect to the Initial
Escrow Period for each Successive Escrow Period until the occurrence of the
earliest of (i) the Termination Date, (ii) the receipt and acceptance by the
Company of subscriptions for the purchase of Securities with total purchase
proceeds that equal or exceed the Pennsylvania Minimum Amount and the
disbursement of the Escrow Account on the terms specified herein, and (iii) all
funds reflecting purchases by Pennsylvania Investors and held in the Escrow
Account having been returned to the Pennsylvania Investors in accordance with
the provisions hereof.

 

5.          Disbursement of Proceeds for Washington Investors. Notwithstanding
the foregoing, proceeds from sales of Securities to Washington Investors will
not count towards meeting the Minimum Amount for purposes of Section 3. Proceeds
received from sales of Securities to Washington Investors will not be released
from the Escrow Account until the Washington Minimum Amount is obtained. If the
Washington Minimum Amount is obtained at any time prior to the Termination Date,
the Escrow Agent shall promptly notify the Company and, upon receiving
acknowledgement of such notice and written instructions from the Company’s Chief
Executive Officer, President or Chief Financial Officer, the Escrow Agent shall
disburse to the Company, by check or wire transfer, the funds in the Escrow
Account representing proceeds from Washington Investors, except for amounts
payable by the Company to the Escrow Agent pursuant to Exhibit D to this
Agreement that remain outstanding. The Escrow Agent agrees that the Washington
Minimum Amount in the Escrow Account shall not be released to the Company until
and unless the Escrow Agent receives written instructions to release the funds
from the Company’s Chief Executive Officer, President or Chief Financial
Officer.

 

If the Washington Minimum Amount has not been obtained prior to the Termination
Date, upon written instructions from the Company’s Chief Executive Officer,
President or Chief Financial Officer, the Escrow Agent shall promptly refund to
each Washington Investor by check funds deposited in the Escrow Account in
respect of purchases by Washington Investors, or shall return the instruments of
payment delivered to Escrow Agent if such instruments have not been processed
for collection prior to such time, directly to each Washington Investor at the
address provided on the List of Investors. Included in the remittance shall be a
proportionate share of the income earned in the account allocable to each
Washington Investor’s investment in accordance with the terms and conditions
specified herein, except that in the case of Investors who have not provided an
executed Form W-9 or substitute Form W-9, the Escrow Agent shall withhold the
applicable percentage of the earnings attributable to those Investors in
accordance with IRS regulations. Notwithstanding the foregoing, the Escrow Agent
shall not be required to remit any payments until funds represented by such
payments have been collected by Escrow Agent.

 

6.          Term of Escrow. This Escrow Agreement shall terminate (the
“Termination Date”) on the earliest of: (i) August 20, 2015, the one year
anniversary of the Initial Effective Date, if the Minimum Amount has not been
obtained prior to such date; (ii) the close of business on August 20, 2016, the
two year anniversary of the Initial Effective Date; (iii) the date on which all
funds held in the Escrow Account are distributed to the Company or to Investors
pursuant to Section 3 and for Pennsylvania Investors, Section 4 and for
Washington Investors, Section 5, and the Company has informed the Escrow Agent
in writing to close the Escrow Account; (iv) the date the Escrow Agent receives
written notice from the Company that it is abandoning the sale of the
Securities; and (v) the date the Escrow Agent receives notice from the SEC or
any other federal regulatory authority that a stop or similar order has been
issued with respect to the Offering Document and has remained in effect for at
least twenty (20) days. After the

 

 

 

 

Termination Date, the Company and its agents shall not deposit, and the Escrow
Agent shall not accept, any additional amounts representing payments by
prospective Investors.

 

7.          Duty and Liability of the Escrow Agent. The sole duty of the Escrow
Agent shall be to receive Investor Funds and hold them subject to release, in
accordance herewith, and the Escrow Agent shall be under no duty to determine
whether the Company or the Dealer Manager is complying with requirements of this
Agreement, the Offering or applicable securities or other laws in tendering the
Investor Funds to the Escrow Agent. No other agreement entered into between the
parties, or any of them, shall be considered as adopted or binding, in whole or
in part, upon the Escrow Agent notwithstanding that any such other agreement may
be referred to herein or deposited with the Escrow Agent or the Escrow Agent may
have knowledge thereof, including specifically but without limitation, the
Offering Document or any other document related to the Offering (including the
subscription agreement and exhibits thereto), and the Escrow Agent’s rights and
responsibilities shall be governed solely by this Agreement. The Escrow Agent
shall not be responsible for or be required to enforce any of the terms or
conditions of the Offering Document or any other document related to the
Offering (including the subscription agreement and exhibits thereto) or other
agreement between the Company and any other party. The Escrow Agent may
conclusively rely upon and shall be protected in acting upon any statement,
certificate, notice, request, consent, order or other document believed by it to
be genuine and to have been signed or presented by the proper party or parties.
The Escrow Agent shall have no duty or liability to verify any such statement,
certificate, notice, request, consent, order or other document, and its sole
responsibility shall be to act only as expressly set forth in this Agreement.
Concurrent with the execution of this Agreement, the Company and the Dealer
Manager shall each deliver to the Escrow Agent an authorized signers form in the
form of Exhibit C or Exhibit C-1 to this Agreement, as applicable. The Escrow
Agent shall be under no obligation to institute or defend any action, suit or
proceeding in connection with this Agreement unless first indemnified to its
satisfaction. The Escrow Agent may consult counsel of its own choice with
respect to any question arising under this Agreement. The Escrow Agent shall not
be liable for any action taken or omitted by it in good faith except to the
extent that a court of competent jurisdiction determines that the Escrow Agent’s
gross negligence or willful misconduct was the primary cause of loss. The Escrow
Agent is acting solely as escrow agent hereunder and owes no duties, covenants
or obligations, fiduciary or otherwise, to any other person by reason of this
Agreement, except as otherwise stated herein, and no implied duties, covenants
or obligations, fiduciary or otherwise, shall be read into this Agreement
against the Escrow Agent. If any disagreement between any of the parties to this
Agreement, or between any of them and any other person, including any Investor,
resulting in adverse claims or demands being made in connection with the matters
covered by this Agreement, or if the Escrow Agent is in doubt as to what action
it should take hereunder, the Escrow Agent may, at its option, refuse to comply
with any claims or demands on it, or refuse to take any other action hereunder,
so long as such disagreement continues or such doubt exists, and in any such
event, the Escrow Agent shall not be or become liable in any way or to any
person for its failure or refusal to act, and the Escrow Agent shall be entitled
to continue so to refrain from acting until (i) the rights of all interested
parties shall have been fully and finally adjudicated by a court of competent
jurisdiction, or (ii) all differences shall have been adjudged and all doubt
resolved by agreement among all of the interested persons, and the Escrow Agent
shall have been notified thereof in writing signed by all such persons.
Notwithstanding the foregoing, the Escrow Agent may in its discretion obey the
order, judgment, decree or levy of any court, whether with or without
jurisdiction and the Escrow Agent is hereby authorized in its sole discretion to
comply with and obey any such orders, judgments, decrees or levies. If any
controversy should arise with respect to this Agreement, the Escrow Agent shall
have the right, at its option, to institute an interpleader action in any court
of competent jurisdiction to determine the rights of the parties. IN NO EVENT
SHALL THE ESCROW AGENT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY SPECIAL,
INDIRECT OR CONSEQUENTIAL LOSSES OR DAMAGES OF ANY KIND WHATSOEVER (INCLUDING
WITHOUT LIMITATION LOST PROFITS), EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH LOSSES OR DAMAGES AND REGARDLESS OF THE FORM OF ACTION.
The parties hereto agree that the Escrow Agent has no role in the preparation of
the Offering Document or any other document related to the Offering (including
the subscription agreement and exhibits thereto) and makes no representations or
warranties with respect to the information contained therein or omitted
therefrom. The Escrow Agent shall have no obligation, duty or liability with
respect to compliance with any federal or state securities, disclosure or tax
laws concerning the Offering Document or any other document related to the
Offering (including the subscription agreement and exhibits thereto) or the
issuance, offering or sale of the Securities. The Escrow Agent shall have no
duty or obligation to monitor the application and use of the Investor Funds once
transferred to the Company, that being the sole obligation and responsibility of
the Company.

 

 

 

 

8.          Escrow Agent’s Fee. The Escrow Agent shall be entitled to
compensation for its services as stated in the fee schedule attached hereto as
Exhibit D, which compensation shall be paid by the Company. The fee agreed upon
for the services rendered hereunder is intended as full compensation for the
Escrow Agent’s services as contemplated by this Agreement; provided, however,
that if (i) the conditions for the disbursement of funds under this Agreement
are not fulfilled, (ii) the Escrow Agent renders any material service not
contemplated in this Agreement, (iii) there is any assignment of interest in the
subject matter of this Agreement, (iv) there is any material modification
hereof, (v) if any material controversy arises hereunder, or (vi) the Escrow
Agent is made a party to any litigation pertaining to this Agreement, or the
subject matter hereof, then the Escrow Agent shall be reasonably compensated for
such extraordinary services and reimbursed for all costs and expenses, including
reasonable attorney’s fees, occasioned by any delay, controversy, litigation or
event, and the same shall be recoverable from the Company. The Company’s
obligations under this Section 8 shall survive the resignation or removal of the
Escrow Agent and the assignment or termination of this Agreement.

 

9.        Investment of Investor Funds. The Investor Funds shall be deposited in
the Escrow Account in accordance with Section 1. The Escrow Agent is hereby
directed to invest all funds received under this Agreement, including principal
and interest in, the UMB Bank Money Market Deposit Account, as directed in
writing in the form of Exhibit E to this Agreement. In the absence of written
investment instructions from the Company to the contrary, the Escrow Agent is
hereby directed to invest the Investor Funds in the UMB Bank Money Market
Deposit Account. Notwithstanding the foregoing, Investor Funds shall not be
invested in anything other than “Short Term Investments” in compliance with Rule
15c2-4 of the Securities Exchange Act of 1934, as amended. The following are not
permissible investments: (a) money market mutual funds; (b) corporate debt or
equity securities; (c) repurchase agreements; (d) banker’s acceptance; (e)
commercial paper; and (f) municipal securities. Any interest received by the
Escrow Agent with respect to the Investor Funds, including reinvested interest
shall become part of the Investor Funds, and shall be disbursed pursuant to
Section 3, for Pennsylvania Investors, Section 4 and for Washington Investors,
Section 5.

 

The Escrow Agent shall be entitled to sell or redeem any such investments as
necessary to make any payments or distributions required under this Agreement.
The Escrow Agent shall have no responsibility or liability for any loss which
may result from any investment made pursuant to this Agreement, or for any loss
resulting from the sale of such investment. The parties acknowledge that the
Escrow Agent is not providing investment supervision, recommendations, or
advice.

 

On or prior to the date of this Agreement, the Company shall provide the Escrow
Agent with a certified tax identification number by furnishing an appropriate
IRS form W-9 or W-8 (or substitute Form W-9 or W-8) and other forms and
documents that the Escrow Agent may reasonably request, including without
limitation a tax form for each Investor. The Company understands that if such
tax reporting documentation is not so certified to the Escrow Agent, the Escrow
Agent may be required by the Internal Revenue Code of 1986, as amended, to
withhold a portion of any interest or other income earned on the Investor Funds
pursuant to this Agreement. For tax reporting purposes, all interest and other
income from investment of the Investor Funds shall, as of the end of each
calendar year and to the extent required by the IRS, be reported as having been
earned by the party to whom such interest or other income is distributed, in the
year in which it is distributed.

 

The Company agrees to indemnify and hold the Escrow Agent harmless from and
against any taxes, additions for late payment, interest, penalties and other
expenses that may be assessed against the Escrow Agent on or with respect to any
payment or other activities under this Agreement unless any such tax, addition
for late payment, interest, penalties and other expenses shall be determined by
a court of competent jurisdiction to have been caused by the Escrow Agent’s
gross negligence or willful misconduct. The terms of this Section shall survive
the termination of this Agreement and the resignation or removal of the Escrow
Agent.

 

10.          Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (a) on the date of service if served personally on the party to whom
notice is to be given, (b) on the day of transmission if sent by facsimile/email
transmission bearing an authorized signature to the facsimile number/email
address given below, and written confirmation of receipt is obtained promptly
after completion of transmission, (c) on the day after delivery to Federal
Express or similar overnight courier or the Express Mail service maintained by
the United States Postal Service, or (d) on the fifth day

 

 

 

 

after mailing, if mailed to the party to whom notice is to be given, by first
class mail, registered or certified, postage prepaid, and properly addressed,
return receipt requested, to the party as follows:

 

If to the Company:

 

American Realty Capital Healthcare Trust III, Inc.

405 Park Avenue, 15th Floor

New York, New York 10022

Fax: (212) 421-5799

Attention: Thomas P. D’Arcy, Chief Executive Officer

 

with a copy to:

 

Proskauer Rose LLP

Eleven Times Square

New York, NY 10036-8299

Telephone: (212) 969-3000

Fax: (212) 969-2900

Attention: Peter M. Fass, Esq.

 

If to the Dealer Manager:

 

Realty Capital Securities, LLC

One Beacon Street, 14th Floor

Boston, MA 02108

Attention: Louisa H. Quarto, President

 

with a copy to:

 

Proskauer Rose LLP

Eleven Times Square

New York, NY 10036-8299

Telephone: (212) 969-3000

Fax: (212) 969-2900

Attention: Peter M. Fass, Esq.

 

and:

 

American Realty Capital Healthcare Trust III, Inc.

405 Park Avenue, 15th Floor

New York, New York 10022

Fax: (212) 421-5799

Attention: Thomas P. D’Arcy, Chief Executive Officer

 

If to Escrow Agent:

 

UMB Bank, N.A.

1010 Grand Blvd., 4th Floor

Mail Stop: 1020409

Kansas City, Missouri 64106

Attention: Lara L. Stevens, Corporate Trust

Telephone: (816) 860-3017

Facsimile: (816) 860-3029

Email: lara.stevens@umb.com

 

 

 

 

Any party may change its address for purposes of this Section by giving the
other party written notice of the new address in the manner set forth above.

 

11.        Indemnification of Escrow Agent. The Company and the Dealer Manager
hereby agree to, jointly and severally, indemnify, defend and hold harmless the
Escrow Agent from and against, any and all loss, liability, cost, damage and
expense, including, without limitation, reasonable counsel fees and expenses,
which the Escrow Agent may suffer or incur by reason of any action, claim or
proceeding brought against the Escrow Agent arising out of or relating in any
way to this Agreement or any transaction to which this Agreement relates unless
such loss, liability, cost, damage or expense is finally determined by a court
of competent jurisdiction to have been primarily caused by the gross negligence
or willful misconduct of the Escrow Agent. The terms of this Section shall
survive the termination of this Agreement and the resignation or removal of the
Escrow Agent.

 

12.        Successors and Assigns. Except as otherwise provided in this
Agreement, no party hereto shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other parties
hereto and any such attempted assignment without such prior written consent
shall be void and of no force and effect. This Agreement shall inure to the
benefit of and shall be binding upon the successors and permitted assigns of the
parties hereto. Any corporation or association into which the Escrow Agent may
be converted or merged, or with which it may be consolidated, or to which it may
sell or transfer all or substantially all of its corporate trust business and
assets as a whole or substantially as a whole, or any corporation or association
resulting from any such conversion, sale, merger, consolidation or transfer to
which the Escrow Agent is a party, shall be and become the successor Escrow
Agent under this Agreement and shall have and succeed to the rights, powers,
duties, immunities and privileges as its predecessor, without the execution or
filing of any instrument or paper or the performance of any further act.

 

13.        Governing Law; Jurisdiction. This Agreement shall be construed,
performed, and enforced in accordance with, and governed by, the internal laws
of the State of New York, without giving effect to the principles of conflicts
of laws thereof.

 

14.        Severability. If any provision of this Agreement is declared by any
court or other judicial or administrative body to be null, void, or
unenforceable, said provision shall survive to the extent it is not so declared,
and all of the other provisions of this Agreement shall remain in full force and
effect.

 

15.        Amendments; Waivers. This Agreement may be amended or modified, and
any of the terms, covenants, representations, warranties, or conditions hereof
may be waived, only by a written instrument executed by the parties hereto, or
in the case of a waiver, by the party waiving compliance. Any waiver by any
party of any condition, or of the breach of any provision, term, covenant,
representation, or warranty contained in this Agreement, in any one or more
instances, shall not be deemed to be nor construed as further or continuing
waiver of any such condition, or of the breach of any other provision, term,
covenant, representation, or warranty of this Agreement. The Company and the
Dealer Manager agree that any requested waiver, modification or amendment of
this Agreement shall be consistent with the terms of the Offering.

 

16.        Entire Agreement. This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the escrow contemplated
hereby and supersedes and replaces all prior and contemporaneous agreements and
understandings, oral or written, with regard to such escrow.

 

17.        Section Headings. The section headings in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.

 

18.        Counterparts. This Agreement may be executed (including by facsimile
transmission) with counterpart signature pages or in counterparts, each of which
shall be deemed an original, but all of which shall constitute the same
instrument. Copies, telecopies, facsimiles, electronic files and other
reproductions of original executed documents shall be deemed to be authentic and
valid counterparts of such original documents for all purposes, including the
filing of any claim, action or suit in the appropriate court of law.

 

19.        Resignation. The Escrow Agent may resign upon 30 days’ advance
written notice to the parties hereto. If a successor escrow agent is not
appointed by the Company within the 30-day period following such notice,

 

 

 

 

the Escrow Agent may petition any court of competent jurisdiction to name a
successor escrow agent, or may interplead the Investor Funds with such court,
whereupon the Escrow Agent’s duties hereunder shall terminate.

 

20.        References to Escrow Agent. Other than the Offering Document, any of
the other documents related to the Offering (including the subscription
agreement and exhibits thereto) and any amendments thereof or supplements
thereto, no printed or other matter in any language (including, without
limitation, notices, reports and promotional material) which mentions the Escrow
Agent’s name or the rights, powers, or duties of the Escrow Agent shall be
issued by the Company or the Dealer Manager, or on the Company’s or the Dealer
Manager’s behalf, unless the Escrow Agent shall first have given its specific
written consent thereto. Notwithstanding the foregoing, any amendment or
supplement to the Offering Document or any other document related to the
Offering (including the subscription agreement and exhibits thereto) that
revises, alters, modifies, changes or adds to the description of the Escrow
Agent or its rights, powers or duties hereunder shall not be issued by the
Company or the Dealer Manager, or on the Company’s or Dealer Manager’s behalf,
unless the Escrow Agent has first given specific written consent thereto.

 

21.        Patriot Act Compliance; OFAC Search Duties. The Company shall provide
to the Escrow Agent upon the execution of this Agreement any documentation
requested and any information reasonably requested by the Escrow Agent to comply
with the USA Patriot Act of 2001, as amended from time to time. The Escrow
Agent, or its agent, shall complete a search with the Office of Foreign Assets
Control (“OFAC Search”), in compliance with its policy and procedures, of each
subscription check for the purchase of Securities and shall inform the Company
if a subscription check for the purchase of Securities fails the OFAC Search.

 

[Signature page follows]

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Subscription Escrow
Agreement to be executed the date and year first set forth above.

 

AMERICAN REALTY CAPITAL HEALTHCARE TRUST III, INC.

 

By:  /s/ Thomas S. D’Arcy     Name: Thomas P. D’Arcy     Title:   Chief
Executive Officer       REALTY CAPITAL SECURITIES, LLC         By: /s/ Louis H.
Quarto     Name: Louisa H. Quarto     Title:   President         UMB BANK, N.A.,
as Escrow Agent         By:  /s/ Lara L. Stevens     Name: Lara L. Stevens    
Title: Vice President  

 

 

 

 

Exhibit A

 

Copy of Offering Document

 

 

 

 

 

 

Exhibit B

 

List of Investors

 

Pursuant to the Escrow Agreement dated as August 20, 2014, among Realty Capital
Securities, LLC, American Realty Capital Healthcare Trust III, Inc. (the
“Company”), and UMB Bank, N.A. (the “Escrow Agent”), the Company or its agents
hereby certifies that the following Investors have paid money for the purchase
of shares of the Company’s common stock, par value $0.01 (“Securities”), and the
money has been deposited with the Escrow Agent:

 

  1. Name of Investor

Address

Tax Identification Number

Amount of Securities subscribed for

Amount of money paid and deposited with Escrow Agent

Is Investor a resident of Pennsylvania (Yes or No)?

Is Investor a resident of Washington (Yes or No)?

 

  2. Name of Investor

Address

Tax Identification Number

Amount of Securities subscribed for

Amount of money paid and deposited with Escrow Agent

Is Investor a resident of Pennsylvania (Yes or No)?

Is Investor a resident of Washington (Yes or No)?

 

Dated:    

 

REALTY CAPITAL SECURITIES, LLC

 

By:       Name: Louisa H. Quarto     Title:   President  

 

 

 

 

Exhibit C

 

CERTIFICATE AS TO AUTHORIZED SIGNATURES

 

The specimen signatures shown below are the specimen signatures of the
individuals who have been designated as Authorized Representatives of American
Realty Capital Healthcare Trust III, Inc. and are authorized to initiate and
approve transactions of all types for the above-mentioned account on behalf of
American Realty Capital Healthcare Trust III, Inc.

 

Name/Title   Specimen Signature       Nicholas S. Schorsch   /s/ Nicholas S.
Schorsch  Chairman of the Board of Directors   Signature       Thomas P. D’Arcy
  /s/ Thomas P. D’Arcy  Chief Executive Officer   Signature       Edward M.
Weil, Jr.   /s/ Edward M. Weil, Jr.  President, Treasurer and Secretary  
Signature       W. Todd Jensen   /s/ W. Todd Jensen  Executive Vice President
and Chief Investment Officer   Signature       Edward F. Lange, Jr.   /s/ Edward
F. Lange, Jr.  Chief Financial Officer and Chief Operating Officer   Signature  
   

 

 

 

 

 

Exhibit C-1

 

CERTIFICATE AS TO AUTHORIZED SIGNATURES

 

The specimen signatures shown below are the specimen signatures of the
individuals who have been designated as Authorized Representatives of Realty
Capital Securities, LLC and are authorized to initiate and approve transactions
of all types for the above-mentioned account on behalf of Realty Capital
Securities, LLC.

 

Name/Title   Specimen Signature       Edward M. Weil, Jr.   /s/ Edward M. Weil,
Jr. Chairman and Interim Chief Executive Officer   Signature       Louisa H.
Quarto   /s/ Louisa H. Quarto President   Signature       John H. Grady   /s/
John H. Grady Chief Operating Officer   Signature

 

 

 

 

Exhibit D

 

ESCROW FEES AND EXPENSES

 

Acceptance Fee

 

Review escrow agreement, establish account $3,000

DST Agency Engagement (if applicable) $250

 

Annual Fees

 

Annual Escrow Agent $2,500

 

Transactional Fees

 

Outgoing Wire Transfer $15 each

Daily Recon File to Transfer Agent $2.50 per Bus. Day

Daily Wire Ripping File to Transfer Agent $10 per Bus Day

Web Exchange Access $15 per month

Overnight Delivery/Mailings $16.50 each

IRS Tax Reporting $10 per 1099

 

Fees specified are for the regular, routine services contemplated by the
Subscription Escrow Agreement, and any additional or extraordinary services,
including, but not limited to disbursements involving a dispute or arbitration,
or administration while a dispute, controversy or adverse claim is in existence,
will be charged based upon time required at the then standard hourly rate. In
addition to the specified fees, all expenses related to the administration of
the Subscription Escrow Agreement (other than normal overhead expenses of the
regular staff) such as, but not limited to, travel, postage, shipping, courier,
telephone, facsimile, supplies, legal fees, accounting fees, etc., will be
reimbursable.

 

Acceptance fee and first year Annual Fee will be payable at the initiation of
the escrow. Thereafter, the Annual Fees will be billed annually in advance each
September and Transactional Fees will be billed quarterly in arrears each
December, March, June, and September, beginning December 2014. Other fees and
expenses will be billed as incurred.

 

 

 

 

Exhibit E

 

Agency and Custody Account Direction

For Cash Balances

UMB Bank Money Market Deposit Accounts

 

Direction to use the following UMB Bank Money Market Deposit Accounts for Cash
Balances for the escrow account (the “Account”) created under the Subscription
Escrow Agreement to which this Exhibit E is attached.

 

You are hereby directed to deposit, as indicated below, or as we shall direct
further in writing from time to time, all cash in the Account in the following
money market deposit account of UMB Bank, N.A. (“Bank”):

 

UMB Bank Money Market Special

 

We acknowledge that we have full power to direct investments in the Account.

 

We understand that we may change this direction at any time and that it shall
continue in effect until revoked or modified by us by written notice to you.

 

American Realty Capital Healthcare Trust III, Inc.

 

By:       Signature             Date  

 

 

 

 

Exhibit F

 

[Form of Notice to Pennsylvania Investors]

 

You have tendered a subscription to purchase shares of common stock of American
Realty Capital Healthcare Trust III, Inc. (the “Company”). Your subscription is
currently being held in escrow. The guidelines of the Pennsylvania Securities
Commission do not permit the Company to accept subscriptions from Pennsylvania
residents until an aggregate of $156,250,000 of gross offering proceeds have
been received by the Company. The Pennsylvania guidelines provide that until
this minimum amount of offering proceeds is received by the Company, every 120
days during the offering period Pennsylvania Investors may request that their
subscription be returned. If you wish to continue your subscription in escrow
until the Pennsylvania minimum subscription amount is received, nothing further
is required.

 

If you wish to terminate your subscription for the Company’s common stock and
have your subscription returned please so indicate below, sign, date, and return
to the Escrow Agent, UMB Bank, N.A. at 1010 Grand Blvd., 4th Floor, Mail Stop:
1020409, Kansas City, Missouri 64106, Attn: Lara L. Stevens, Corporate Trust.

 

I hereby terminate my prior subscription to purchase shares of common stock of
American Realty Capital Healthcare Trust III, Inc. and request the return of my
subscription funds. I certify to American Realty Capital Healthcare Trust III,
Inc. that I am a resident of Pennsylvania.

 

Signature:       Name:     (please print)     Date:  

 

Please send the subscription refund to: