Document:

Form of Trust Agreement

 Exhibit 10.13 
 INVESTMENT MANAGEMENT TRUST AGREEMENT 
 This Agreement is made as of
                    , 2007 by and between KBL Healthcare Acquisition Corp. III (the “Company”) and Continental Stock
Transfer & Trust Company (“Trustee”). 
 WHEREAS, the Company’s registration statement on Form S-1,
No. 333-             (“Registration Statement”), for its initial public offering of securities (“IPO”) has been declared effective as of the date hereof
(“Effective Date”) by the Securities and Exchange Commission (capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Registration Statement); and 
 WHEREAS, Citigroup Global Markets Inc. (“Citigroup”) is acting as the representative of the underwriters in the IPO; and 
 WHEREAS, as described in the Registration Statement, and in accordance with the Company’s Amended and Restated Certificate of Incorporation,
$96,975,000 of the proceeds of the IPO and sale of the Private Placement Warrants (as defined in the Registration Statement) (or $111,375,000 if the underwriters’ over-allotment option is exercised in full) will be delivered to the Trustee to
be deposited and held in a trust account for the benefit of the Company and the holders of the Company’s common stock, par value $.0001 per share, issued in the IPO as hereinafter provided (the amount to be delivered to the Trustee will be
referred to herein as the “Property”, the stockholders for whose benefit the Trustee shall hold the Property will be referred to as the “Public Stockholders,” and the Public Stockholders and the Company will be referred to
together as the “Beneficiaries”); and 
 WHEREAS, the Company and the Trustee desire to enter into this Agreement to set forth the
terms and conditions pursuant to which the Trustee shall hold the Property; 
 IT IS AGREED: 
 1. Agreements and Covenants of Trustee. The Trustee hereby agrees and covenants to: 
 (a) Hold the Property in trust for the Beneficiaries in accordance with the terms of this Agreement in a segregated trust account (“Trust Account”) established by the Trustee; 
 (b) Manage, supervise and administer the Trust Account subject to the terms and conditions set forth herein; 
 (c) In a timely manner, upon the instruction of the Company, to invest and reinvest the Property in United States “government securities”
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940 having a maturity of 180 days or less, and/or in any open ended investment company registered under the Investment Company Act of 1940 that holds itself out as a money
market fund selected by the Company meeting the conditions of paragraphs (c)(2), (c)(3) and (c)(4) of Rule 2a-7 promulgated under the Investment Company Act of 1940, as determined by the Company; 

 (d) Collect and receive, when due, all principal and income arising from the Property, which shall become
part of the “Property,” as such term is used herein; 
 (e) Notify the Company and Citigroup of all communications received by it
with respect to any Property requiring action by the Company; 
 (f) Supply any necessary information or documents as may be requested by the
Company in connection with the Company’s preparation of its tax returns; 
 (g) Participate in any plan or proceeding for protecting or
enforcing any right or interest arising from the Property if, as and when instructed by the Company and/or Citigroup to do so; 
 (h) Render
to the Company and to Citigroup, and to such other person as the Company may instruct, monthly written statements of the activities of and amounts in the Trust Account reflecting all receipts and disbursements of the Trust Account; and 

(i) Commence liquidation of the Trust Account only after and promptly after receipt of, and only in accordance with, the terms of a letter
(“Termination Letter”), in a form substantially similar to that attached hereto as either Exhibit A or Exhibit B hereto, signed on behalf of the Company by its President or Chairman of the Board of Directors and Secretary or Assistant
Secretary and affirmed by counsel for the Company, and complete the liquidation of the Trust Account and distribute the Property in the Trust Account only as directed in the Termination Letter and the other documents referred to therein;
provided, however, that in the event that a Termination Letter has not been received by the Trustee by the 24-month anniversary of the effective date of the Registration Statement (“Last Date”), the Trust Account shall be liquidated
in accordance with the procedures set forth in the Termination Letter attached as Exhibit B hereto and distributed to the stockholders of record on the Last Date. In all cases, the Trustee shall provide Citigroup with a copy of any Termination
Letters and/or any other correspondence that it receives with respect to any proposed withdrawal from the Trust Account promptly after it receives same. The provisions of this Section 1(i) may not be modified, amended or deleted under any
circumstances. 
 2. Limited Distributions of Income from Trust Account. 
 (a) Upon written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto as Exhibit C, the
Trustee shall distribute to the Company the amount requested by the Company to cover any income or franchise tax obligation owed by the Company; 
 (b) Upon written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto as Exhibit D, the Trustee shall distribute to the Company the amount requested by the Company to cover
expenses related to investigating and selecting a target business and other working capital requirements; provided, however, that the aggregate amount of all such distributions shall not exceed $1,400,000; and 
  

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 (c) The limited distributions referred to in Sections 2(a) and 2(b) above shall be made only from income
collected on the Property. Except as provided in Section 2(a) and 2(b) above, no other distributions from the Trust Account shall be permitted except in accordance with Section 1(i) hereof. 
 3. Agreements and Covenants of the Company. The Company hereby agrees and covenants to: 
 (a) Give all instructions to the Trustee hereunder in writing, signed by the Company’s Chairman of the Board of Directors or Chief Executive
Officer. In addition, except with respect to its duties under paragraphs 1(i), 2(a) and 2(b) above, the Trustee shall be entitled to rely on, and shall be protected in relying on, any verbal or telephonic advice or instruction which it in good faith
believes to be given by any one of the persons authorized above to give written instructions, provided that the Company shall promptly confirm such instructions in writing; 
 (b) Hold the Trustee harmless and indemnify the Trustee from and against, any and all expenses, including reasonable counsel fees and disbursements, or
loss suffered by the Trustee in connection with any action, suit or other proceeding brought against the Trustee involving any claim, or in connection with any claim or demand which in any way arises out of or relates to this Agreement, the services
of the Trustee hereunder, or the Property or any income earned from investment of the Property, except for expenses and losses resulting from the Trustee’s gross negligence or willful misconduct. Promptly after the receipt by the Trustee of
notice of demand or claim or the commencement of any action, suit or proceeding, pursuant to which the Trustee intends to seek indemnification under this paragraph, it shall notify the Company in writing of such claim (hereinafter referred to as the
“Indemnified Claim”). The Trustee shall have the right to conduct and manage the defense against such Indemnified Claim, provided, that the Trustee shall obtain the consent of the Company with respect to the selection of counsel, which
consent shall not be unreasonably withheld. The Trustee may not agree to settle any Indemnified Claim without the prior written consent of the Company unless such settlement includes a full release of the Company with respect to such Indemnified
Claim. The Company may participate in such action with its own counsel; 
 (c) Pay the Trustee an initial acceptance fee, an annual fee and a
transaction processing fee for each disbursement made pursuant to Section 2 as set forth on Schedule A hereto, which fees shall be subject to modification by the parties from time to time. It is expressly understood that the Property shall not
be used to pay such fees and further agreed that said transaction processing fees shall be deducted by the Trustee from accumulated income at the time that disbursements are made to the Company pursuant to Section 2. The Company shall pay the
Trustee the initial acceptance fee and first year’s fee at the consummation of the IPO and thereafter on the anniversary of the Effective Date. The Trustee shall refund to the Company the annual fee (on a pro rata basis) with respect to any
period after the liquidation of the Trust Fund. The Company shall not be responsible for any other fees or charges of the Trustee except as set forth in this Section 3(c) and as may be provided in Section 3(b) hereof (it being expressly
understood that the Property shall not be used to make any payments to the Trustee under such Sections); 
  

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 (d) In connection with any vote of the Company’s stockholders regarding a Business Combination,
provide to the Trustee an affidavit or certificate of a firm regularly engaged in the business of soliciting proxies and/or tabulating stockholder votes (which firm may be the Trustee) verifying the vote of the Company’s stockholders regarding
such Business Combination. 
 4. Limitations of Liability. The Trustee shall have no responsibility or liability to: 
 (a) Take any action with respect to the Property, other than as directed in paragraphs 1 and 2 hereof and the Trustee shall have no liability to any
party except for liability arising out of its own gross negligence or willful misconduct; 
 (b) Institute any proceeding for the collection
of any principal and income arising from, or institute, appear in or defend any proceeding of any kind with respect to, any of the Property unless and until it shall have received instructions from the Company given as provided herein to do so and
the Company shall have advanced or guaranteed to it funds sufficient to pay any expenses incident thereto; 
 (c) Change the investment of
any Property, other than in compliance with paragraph 1(c); 
 (d) Refund any depreciation in principal of any Property; 
 (e) Assume that the authority of any person designated by the Company to give instructions hereunder shall not be continuing unless provided otherwise in
such designation, or unless the Company shall have delivered a written revocation of such authority to the Trustee; 
 (f) The other parties
hereto or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith and in the exercise of its own best judgment, except for its gross negligence or willful misconduct. The Trustee may
rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Trustee), statement, instrument, report or other paper or document (not only as to its due
execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Trustee, in good faith, to be genuine and to be signed or presented by the
proper person or persons. The Trustee shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this Agreement or any of the terms hereof, unless evidenced by a written instrument delivered to the Trustee
signed by the proper party or parties and, if the duties or rights of the Trustee are affected, unless it shall give its prior written consent thereto; 
 (g) Verify the correctness of the information set forth in the Registration Statement or to confirm or assure that any acquisition made by the Company or any other action taken by it is as contemplated by the
Registration Statement; and 
  

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 (h) File information returns with the United States Internal Revenue Service and payee statements with
the Company, documenting the taxes payable by the Company, if any, relating to interest earned on the Property. 
 5. Termination. This Agreement
shall terminate as follows: 
 (a) If the Trustee gives written notice to the Company that it desires to resign under this Agreement, the
Company shall use its reasonable efforts to locate a successor trustee. At such time that the Company notifies the Trustee that a successor trustee has been appointed by the Company and has agreed to become subject to the terms of this Agreement,
the Trustee shall transfer the management of the Trust Account to the successor trustee, including but not limited to the transfer of copies of the reports and statements relating to the Trust Account, whereupon this Agreement shall terminate;
provided, however, that, in the event that the Company does not locate a successor trustee within ninety days of receipt of the resignation notice from the Trustee, the Trustee may submit an application to have the Property deposited with any court
in the State of New York or with the United States District Court for the Southern District of New York and upon such deposit, the Trustee shall be immune from any liability whatsoever that arises due to any actions or omissions to act by any party
after such deposit; or 
 (b) At such time that the Trustee has completed the liquidation of the Trust Account in accordance with the
provisions of paragraph 1(i) hereof, and distributed the Property in accordance with the provisions of the Termination Letter, this Agreement shall terminate except with respect to Paragraph 3(b). 
 6. Miscellaneous. 
 (a) The Company and the Trustee
each acknowledge that the Trustee will follow the security procedures set forth below with respect to funds transferred from the Trust Account. Upon receipt of written instructions, the Trustee will confirm such instructions with an Authorized
Individual at an Authorized Telephone Number listed on the attached Exhibit E. The Company and the Trustee will each restrict access to confidential information relating to such security procedures to authorized persons. Each party must notify
the other party immediately if it has reason to believe unauthorized persons may have obtained access to such information, or of any change in its authorized personnel. In executing funds transfers, the Trustee will rely upon account numbers or
other identifying numbers of a beneficiary, beneficiary’s bank or intermediary bank, rather than names. The Trustee shall not be liable for any loss, liability or expense resulting from any error in an account number or other identifying
number, provided it has accurately transmitted the numbers provided. 
 (b) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. It may be executed in several original or facsimile
counterparts, each one of which shall constitute an original, and together shall constitute but one instrument. 
  

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 (c) This Agreement contains the entire agreement and understanding of the parties hereto with respect to
the subject matter hereof. Except for Section 1(i) (which may not be amended under any circumstances), this Agreement or any provision hereof may only be changed, amended or modified by a writing signed by each of the parties hereto; provided,
however, that no such change, amendment or modification may be made without the prior written consent of Citigroup. As to any claim, cross-claim or counterclaim in any way relating to this Agreement, each party waives the right to trial by jury.

 (d) The parties hereto consent to the jurisdiction and venue of any state or federal court located in the City of New York, Borough of
Manhattan, for purposes of resolving any disputes hereunder. 
 (e) Any notice, consent or request to be given in connection with any of the
terms or provisions of this Agreement shall be in writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or by facsimile transmission: 
 if to the Trustee, to: 
 Continental Stock
Transfer & Trust Company 
 17 Battery Place 
 New York, New York 10004 
 Attn: Steven G. Nelson 
 Fax No.: (212) 509-5150 
 if to the
Company, to: 
 KBL Healthcare Acquisition Corp. III 
 757 Third Avenue, 21st Floor 
 New York, New York 10017 
 Attn: Marlene Krauss, Chief Executive Officer 
 Fax No.: (            )
            -             
 in either case with a copy to: 
 Citigroup Global Markets Inc. 
 388 Greenwich Street 
 New York, New York
10013 
 Attn: David Spivak 
 Facsimile: (212) 723-8871 
 (f) This Agreement may not be assigned by the Trustee without the prior consent of the Company and
Citigroup. 
  

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 (g) Each of the Trustee and the Company hereby represents that it has the full right and power and has
been duly authorized to enter into this Agreement and to perform its respective obligations as contemplated hereunder. The Trustee acknowledges and agrees that it shall not make any claims or proceed against the Trust Account, including by way of
set-off, and shall not be entitled to any funds in the Trust Account under any circumstance. 
 (h) Each of the Company and the Trustee
hereby acknowledge that Citigroup is a third party beneficiary of this Agreement. 
 [Signature Page Follows] 
  

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 IN WITNESS WHEREOF, the parties have duly executed this Investment Management Trust Agreement as of the
date first written above. 
  

			
	CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Trustee
		
	By:	 	  
		 	Name:
		 	Title:

  

			
	KBL HEALTHCARE ACQUISITION CORP. III
		
	By:	 	  
		 	Name:
		 	Title:

  

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 SCHEDULE A 
  

					
	 Fee Item
	  	 Time and method of payment
	  	Amount
	Initial acceptance fee	  	Initial closing of IPO by wire transfer	  	$1,000
	Annual fee	  	First year, initial closing of IPO by wire transfer; thereafter on the anniversary of the effective date of the IPO by wire transfer or check	  	$3,000
	Transaction processing fee for disbursements to Company under Section 2	  	Deduction by Trustee from accumulated income following disbursement made to Company under Section 2	  	$250

  

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 EXHIBIT A 
  

					
		  	[Letterhead of Company]	  	
			
		  	[Insert date]	  	

 Continental Stock Transfer & Trust Company 
 17 Battery Place 
 New York, New York 10004 
 Attn: Steven Nelson 
  

	 	Re:	Trust Account No.                     Termination Letter

 Gentlemen: 
 Pursuant to
paragraph 1(i) of the Investment Management Trust Agreement between KBL Healthcare Acquisition Corp. III (“Company”) and Continental Stock Transfer & Trust Company (“Trustee”), dated as of
                    , 2007 (“Trust Agreement”), this is to advise you that the Company has entered into an agreement (“Business
Agreement”) with                      (“Target Business”) to consummate a business combination with Target Business
(“Business Combination”) on or about [insert date]. The Company shall notify you at least 48 hours in advance of the actual date of the consummation of the Business Combination (“Consummation Date”). 
 In accordance with the terms of the Trust Agreement, we hereby authorize you to commence liquidation of the Trust Account to the effect that, on the
Consummation Date, all of funds held in the Trust Account will be immediately available for transfer to the account or accounts that the Company shall direct on the Consummation Date. 
 On the Consummation Date (i) the Company shall deliver to you written notification that the Business Combination has been consummated and
(ii) the Company shall deliver to you (a) [an affidavit] [a certificate] of                     , which verifies the vote of the
Company’s stockholders in connection with the Business Combination and (b) written instructions with respect to the transfer of the funds held in the Trust Account (“Instruction Letter”). You are hereby directed and authorized to
transfer the funds held in the Trust Account immediately upon your receipt of the notification letter and the Instruction Letter, in accordance with the terms of the Instruction Letter. In the event that certain deposits held in the Trust Account
may not be liquidated by the Consummation Date without penalty, you shall notify the Company of the same and the Company shall direct you as to whether such funds should remain in the Trust Account and distributed after the Consummation Date to the
Company. Upon the distribution of all the funds in the Trust Account pursuant to the terms hereof, the Trust Agreement shall be terminated and the Trust Account closed. 
 In the event that the Business Combination is not consummated on the Consummation Date described in the notice thereof and we have not notified you on or before the original Consummation Date of a new Consummation
Date, then the funds held in the Trust Account shall be reinvested as provided in the Trust Agreement on the business day immediately following the Consummation Date as set forth in the notice. 
  

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	Very truly yours,
	
	KBL HEALTHCARE ACQUISITION CORP. III
		
	By:	 	  
		 	Zachary Berk, Chairman of the Board

  

			
		
	By:	 	  
		 	Marlene Krauss, Secretary

 cc: Citigroup Global Markets Inc. 
  

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 EXHIBIT B 
  

					
		  	[Letterhead of Company]	  	
			
		  	[Insert date]	  	

 Continental Stock Transfer & Trust Company 
 17 Battery Place 
 New York, New York 10004 
 Attn: Steven Nelson 
  

	 	Re:	Trust Account No.                     Termination Letter

 Gentlemen: 
 Pursuant to
paragraph 1(i) of the Investment Management Trust Agreement between KBL Healthcare Acquisition Corp. III (“Company”) and Continental Stock Transfer & Trust Company (“Trustee”), dated as of
                    , 2007 (“Trust Agreement”), this is to advise you that the Company has been unable to effect a Business
Combination with a Target Company within the time frame specified in the Company’s Certificate of Incorporation, as described in the Company’s prospectus relating to its IPO. 
 In accordance with the terms of the Trust Agreement, we hereby authorize you, to commence liquidation of the Trust Account as promptly as practicable to
stockholders of record on the Last Date (as defined in the Trust Agreement). You will notify the Company in writing as to when all of the funds in the Trust Account will be available for immediate transfer (“Transfer Date”) in accordance
with the terms of the Trust Agreement and the Certificate of Incorporation of the Company. You shall commence distribution of such funds in accordance with the terms of the Trust Agreement and the Certificate of Incorporation of the Company and you
shall oversee the distribution of the funds. Upon the distribution of all the funds in the Trust Account, your obligations under the Trust Agreement shall be terminated. 
  

			
	Very truly yours,
	
	KBL HEALTHCARE ACQUISITION CORP. III
		
	By:	 	  
		 	Zachary Berk, Chairman of the Board

  

			
	
		
	By:	 	  
		 	Marlene Krauss, Secretary

 cc: Citigroup Global Markets Inc. 
  

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 EXHIBIT C 
  

					
		  	[Letterhead of Company]	  	
			
		  	[Insert date]	  	

 Continental Stock Transfer & Trust Company 
 17 Battery Place 
 New York, New York 10004 
 Attn: Steven Nelson 
  

	 	Re:	Trust Account No. 

 Gentlemen: 
 Pursuant to paragraph 2(a) of the Investment Management Trust Agreement between KBL Healthcare Acquisition Corp. III (“Company”) and
Continental Stock Transfer & Trust Company (“Trustee”), dated as of                     , 2007 (“Trust
Agreement”), this is to advise you that the Company hereby requests that you deliver to the Company $                     of the income
earned on the Property as of the date hereof. The Company needs such funds to pay for the tax obligations as set forth on the attached tax return or tax statement. In accordance with the terms of the Trust Agreement, you are hereby directed and
authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the Company’s operating account at: 
 [WIRE
INSTRUCTION INFORMATION] 
  

			
	Very truly yours,
	
	KBL HEALTHCARE ACQUISITION CORP. III
		
	By:	 	  
		 	Zachary Berk, Chairman of the Board
		
	By:	 	  
		 	Marlene Krauss, Secretary

 cc: Citigroup Global Markets Inc. 
  

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 EXHIBIT D 
  

					
		  	[Letterhead of Company]	  	
			
		  	[Insert date]	  	

 Continental Stock Transfer & Trust Company 
 17 Battery Place 
 New York, New York 10004 
 Attn: Steven Nelson 
  

	 	Re:	Trust Account No. 

 Gentlemen: 
 Pursuant to paragraph 2(b) of the Investment Management Trust Agreement between KBL Healthcare Acquisition Corp. III (“Company”) and
Continental Stock Transfer & Trust Company (“Trustee”), dated as of                     , 2007 (“Trust
Agreement”), this is to advise you that the Company hereby requests that you deliver to the Company $                     of the income
earned on the Property as of the date hereof. The Company needs such funds to cover its expenses relating to investigating and selecting a target business and other working capital requirements. In accordance with the terms of the Trust Agreement,
you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the Company’s operating account at: 
 [WIRE INSTRUCTION INFORMATION] 
  

			
	Very truly yours,
	
	KBL HEALTHCARE ACQUISITION CORP. III
		
	By:	 	  
		 	Zachary Berk, Chairman of the Board
		
	By:	 	  
		 	Marlene Krauss, Secretary

 cc: Citigroup Global Markets Inc. 
  

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 EXHIBIT E 
  

			
	 AUTHORIZED INDIVIDUAL(S)
 FOR TELEPHONE CALL BACK
	  	 AUTHORIZED
 TELEPHONE NUMBER(S)

		
	 Company:
	  	
		
	 KBL Healthcare Acquisition Corp. III
	  	
	 757 Third Avenue, 21st Floor
	  	
	 New York, New York 10017
	  	
	 Attn: Marlene Krauss, Chief Executive Officer
	  	 (212) 319-5555

		
	 Trustee:
	  	
		
	 Continental Stock Transfer & Trust Company
	  	
	 17 Battery Place
	  	
	 New York, New York 10004
	  	
	 Attn: Steven G. Nelson, Chairman
	  	 (212) 845-3200

  

 15Form of Escrow Agreement

 Exhibit 10.14 
 STOCK ESCROW AGREEMENT 
 STOCK ESCROW AGREEMENT, dated as of
                    , 2007 (“Agreement”), by and among KBL HEALTHCARE ACQUISITION CORP. III, a Delaware corporation
(“Company”), ZACHARY BERK, MARLENE KRAUSS, MICHAEL KASWAN, ELI BERK, EILEEN MORE, JOSEPH WILLIAMSON, SANDRA SANTOS, KENNETH ABRAMOWITZ, MARK LEBWOHL, ELLEN MARRAM, ERIC ROSE and MYRON WEISFELDT (collectively “Initial
Stockholders”) and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York corporation (“Escrow Agent”). 
 WHEREAS,
the Company has entered into an Underwriting Agreement, dated                     , 2007 (“Underwriting Agreement”), with Citigroup
Global Markets Inc. (“Citigroup”) acting as representative of the several underwriters (collectively, the “Underwriters”), pursuant to which, among other matters, the Underwriters have agreed to purchase 9,375,000 units
(“Units”) of the Company. Each Unit consists of one share of the Company’s common stock, par value $.0001 per share (“Common Stock”), and one warrant (“Warrant”), each Warrant to purchase one share of Common Stock
for $6.00, all as more fully described in the Company’s final Prospectus, dated                     , 2007 (“Prospectus”)
comprising part of the Company’s Registration Statement on Form S-1 (File No. 333-                    ) under the Securities
Act of 1933, as amended (“Registration Statement”), declared effective on                     , 2007 (“Effective Date”).

 WHEREAS, the Initial Stockholders have agreed as a condition of the sale of the Units to deposit their shares of Common Stock of the
Company, as set forth opposite their respective names in Exhibit A attached hereto (collectively “Escrow Shares”), in escrow as hereinafter provided. 
 WHEREAS, the Company and the Initial Stockholders desire that the Escrow Agent accept the Escrow Shares, in escrow, to be held and disbursed as hereinafter provided. 
 IT IS AGREED: 
 1. Appointment of Escrow
Agent. The Company and the Initial Stockholders hereby appoint the Escrow Agent to act in accordance with and subject to the terms of this Agreement and the Escrow Agent hereby accepts such appointment and agrees to act in accordance with and
subject to such terms. 
 2. Deposit of Escrow Shares. On or before the Effective Date, each of the Initial Stockholders shall deliver
to the Escrow Agent certificates representing his respective Escrow Shares, to be held and disbursed subject to the terms and conditions of this Agreement. Each Initial Stockholder acknowledges that the certificate representing his Escrow Shares is
legended to reflect the deposit of such Escrow Shares under this Agreement, provided, however, that such legends shall be removed upon the disbursement of the Escrow Shares as described below. 
 3. Disbursement of the Escrow Shares. The Escrow Agent shall hold the Escrow Shares until six months after the consummation of a Business
Combination (as defined in the Registration Statement) (“Escrow Period”), on which date it shall, upon written instructions from each Initial Stockholder, disburse each of the Initial Stockholder’s Escrow Shares (and any applicable
stock power) to such Initial Stockholder; provided, however, that if the Escrow Agent is 

 
notified by the Company pursuant to Section 6.7 hereof that the Company is being liquidated at any time during the Escrow Period, then the Escrow Agent
shall promptly destroy the certificates representing the Escrow Shares; provided further, however, that if, after the Company consummates a Business Combination (as such term is defined in the Registration Statement), it (or the surviving entity)
subsequently consummates a liquidation, merger, stock exchange or other similar transaction which results in all of the stockholders of such entity having the right to exchange their shares of Common Stock for cash, securities or other property,
then the Escrow Agent will, upon receipt of a certificate, executed by the Chief Executive Officer or other authorized officer of the Company, in form reasonably acceptable to the Escrow Agent, that such transaction is then being consummated,
release the Escrow Shares to the Initial Stockholders upon consummation of the transaction so that they can similarly participate. The Escrow Agent shall have no further duties hereunder after the disbursement or destruction of the Escrow Shares in
accordance with this Section 3. 
 4. Rights of Initial Stockholders in Escrow Shares. 
 4.1 Voting Rights as a Stockholder. Subject to the terms of the Insider Letter described in Section 4.4 hereof and except as
herein provided, the Initial Stockholders shall retain all of their rights as stockholders of the Company during the Escrow Period, including, without limitation, the right to vote such shares. 
 4.2 Dividends and Other Distributions in Respect of the Escrow Shares. During the Escrow Period, all dividends payable in cash with
respect to the Escrow Shares shall be paid to the Initial Stockholders, but all dividends payable in stock or other non-cash property (“Non-Cash Dividends”) shall be delivered to the Escrow Agent to hold in accordance with the terms
hereof. As used herein, the term “Escrow Shares” shall be deemed to include the Non-Cash Dividends distributed thereon, if any. 
 4.3 Restrictions on Transfer. During the Escrow Period, no sale, transfer or other disposition may be made of any or all of the Escrow Shares except (i) to an entity’s members upon its liquidation,
(ii) by gift to a member of an Initial Stockholder’s immediate family or to a trust, the beneficiary of which is an Initial Stockholder or a member of an Initial Stockholder’s immediate family, (iii) by virtue of the laws of
descent and distribution upon death of any Initial Stockholder, (iv) pursuant to a qualified domestic relations order or (v) by private sales made at or prior to the consummation of a Business Combination at prices no greater than the
price which the Initial Stockholder paid for the Escrow Shares; provided, however, that such transfers may be implemented only upon the respective transferee’s written agreement to be bound by the terms and conditions of this
Agreement and of the Insider Letter signed by the Initial Stockholder transferring the Escrow Shares. 
 4.4 Insider
Letters. Each of the Initial Stockholders has executed a letter agreement with Citigroup and the Company, dated as indicated on Exhibit A hereto, and which is filed as an exhibit to the Registration Statement (“Insider Letter”),
respecting the rights and obligations of such Initial Stockholder in certain events, including but not limited to the liquidation of the Company. 
  

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 5. Concerning the Escrow Agent. 
 5.1 Good Faith Reliance. The Escrow Agent shall not be liable for any action taken or omitted by it in good faith and in the
exercise of its own best judgment, and may rely conclusively on and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report
or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Escrow Agent to be genuine
and to be signed or presented by the proper person or persons. The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this Agreement unless evidenced by a writing delivered to the
Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall have given its prior written consent thereto. 
 5.2 Indemnification. The Escrow Agent shall be indemnified and held harmless by the Company from and against any expenses,
including counsel fees and disbursements, or loss suffered by the Escrow Agent in connection with any action, suit or other proceeding involving any claim which in any way, directly or indirectly, arises out of or relates to this Agreement, the
services of the Escrow Agent hereunder, or the Escrow Shares held by it hereunder, other than expenses or losses arising from the gross negligence or willful misconduct of the Escrow Agent. Promptly after the receipt by the Escrow Agent of notice of
any demand or claim or the commencement of any action, suit or proceeding, the Escrow Agent shall notify the other parties hereto in writing. In the event of the receipt of such notice, the Escrow Agent, in its sole discretion, may commence an
action in the nature of interpleader in an appropriate court to determine ownership or disposition of the Escrow Shares or it may deposit the Escrow Shares with the clerk of any appropriate court or it may retain the Escrow Shares pending receipt of
a final, non-appealable order of a court having jurisdiction over all of the parties hereto directing to whom and under what circumstances the Escrow Shares are to be disbursed and delivered. The provisions of this Section 5.2 shall survive in
the event the Escrow Agent resigns or is discharged pursuant to Sections 5.5 or 5.6 below. 
 5.3 Compensation. The
Escrow Agent shall be entitled to reasonable compensation from the Company for all services rendered by it hereunder. The Escrow Agent shall also be entitled to reimbursement from the Company for all expenses paid or incurred by it in the
administration of its duties hereunder including, but not limited to, all counsel, advisors’ and agents’ fees and disbursements and all taxes or other governmental charges. 
 5.4 Further Assurances. From time to time on and after the date hereof, the Company and the Initial Stockholders shall deliver or
cause to be delivered to the Escrow Agent such further documents and instruments and shall do or cause to be done such further acts as the Escrow Agent shall reasonably request to carry out more effectively the provisions and purposes of this
Agreement, to evidence compliance herewith or to assure itself that it is protected in acting hereunder. 
 5.5
Resignation. The Escrow Agent may resign at any time and be discharged from its duties as escrow agent hereunder by its giving the other parties hereto written notice and such resignation shall become effective as hereinafter provided. Such
resignation shall become effective at such time that the Escrow Agent shall turn over to a successor escrow agent appointed by the Company, the Escrow Shares held hereunder. If no new escrow agent is so appointed within the 60 day period following
the giving of such notice of resignation, the Escrow Agent may deposit the Escrow Shares with any court it reasonably deems appropriate. 
  

 3 

 5.6 Discharge of Escrow Agent. The Escrow Agent shall resign and be discharged
from its duties as escrow agent hereunder if so requested in writing at any time by the other parties hereto, jointly, provided, however, that such resignation shall become effective only upon acceptance of appointment by a successor escrow agent as
provided in Section 5.5. 
 5.7 Liability. Notwithstanding anything herein to the contrary, the Escrow Agent shall
not be relieved from liability hereunder for its own gross negligence or its own willful misconduct. 
  

	6.	Miscellaneous. 

 6.1 Governing
Law. This Agreement shall for all purposes be deemed to be made under and shall be construed in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the
substantive laws of another jurisdiction. 
 6.2 Third Party Beneficiaries. Each of the Initial Stockholders hereby
acknowledges that the Underwriters are third party beneficiaries of this Agreement and this Agreement may not be modified or changed without the prior written consent of Citigroup. 
 6.3 Entire Agreement. This Agreement contains the entire agreement of the parties hereto with respect to the subject matter hereof
and, except as expressly provided herein, may not be changed or modified except by an instrument in writing signed by the party to the charged. 
 6.4 Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation thereof. 
 6.5 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their legal
representatives, successors and assigns. 
 6.6 Notices. Any notice or other communication required or which may be
given hereunder shall be in writing and either be delivered personally or be mailed, certified or registered mail, or by private national courier service, return receipt requested, postage prepaid, and shall be deemed given when so delivered
personally or, if mailed, two days after the date of mailing, as follows: 
 If to the Company, to: 
 KBL Healthcare Acquisition Corp. III 
 757 Third Avenue, 21st Floor 
 New York, New York 10017 
 Attn: Chief Executive Officer 
  

 4 

 If to a Stockholder, to his address set forth in Exhibit A. 
 and if to the Escrow Agent, to: 
 Continental Stock Transfer & Trust Company 
 17 Battery Place 
 New York, New York 10004 
 Attn: Chairman 
 A copy of any notice sent hereunder shall be sent to: 
 and: 
 Citigroup Global
Markets Inc. 
 388 Greenwich Street 
 New York, New York 10013 
 Attn: 
 and: 
 Graubard Miller 
 The Chrysler Building 
 405 Lexington Avenue 
 New York, New York 10174 
 Attn: David Alan Miller, Esq. 
 and: 
 Sidley Austin LLP

 787 Seventh Avenue 
 New York, New York 10019 
 Attn: Jack I. Kantrowitz, Esq. 
 The parties may change the persons and addresses to which the notices or other communications are to be sent by giving written notice to
any such change in the manner provided herein for giving notice. 
 6.7 Liquidation of the Company. The Company shall
give the Escrow Agent written notification of the liquidation of the Company in the event that the Company fails to consummate a Business Combination within the time period specified in the Prospectus. 
  

 5 

 WITNESS the execution of this Agreement as of the date first above written. 
  

			
		 	KBL HEALTHCARE ACQUISITION CORP. III
		
	By:	 	  
		 	Name:
		 	Title:

  

			
		 	INITIAL STOCKHOLDERS:
		
		 	  
		 	Zachary Berk
		
		 	  
		 	Marlene Krauss
		
		 	  
		 	Michael Kaswan
		
		 	  
		 	Eli Berk
		
		 	  
		 	Eileen More
		
		 	  
		 	Joseph Williamson
		
		 	  
		 	Sandra Santos
		
		 	  
		 	Kenneth Abramowitz

  

 6 

			
		
		 	  
		 	Mark Lebwohl
		
		 	  
		 	Ellen Marram
		
		 	  
		 	Eric Rose
		
		 	  
		 	Myron Weisfeldt

  

			
	CONTINENTAL STOCK TRANSFER
	& TRUST COMPANY
		
	By:	 	  
		 	Name:
		 	Title:

  

 7 

 EXHIBIT A 
  

							
	 Name and Address of
 Initial Stockholder
	  	 Number
 of Shares
	  	 Stock
 Certificate Number
	  	 Date of
 Insider Letter

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