Document:

Exhibit 10.5

 

	 	 
	Mr. Brian S. Block	January 31, 2013
	EVP & Chief Financial Officer	 
	American Realty Capital Healthcare Trust II, Inc.	 
	405 Park Ave - 15th Floor	 
	New York, NY 10022	 

 

Re: Engagement Letter for Duff & Phelps’ Professional
Services

 

Dear Mr. Block

 

This Letter of Engagement confirms that we, Duff & Phelps,
LLC (“D&P”), have been retained by you, American Realty Capital Healthcare Trust II, Inc. (the “Company”)
to provide the services (the “Services”) set out below in connection with the valuation of real property (hereafter
referred to as the “Subject Properties”) on a quarterly basis (the “Valuation Dates”) commencing the first
quarter following the Company’s acquisition of at least $2.0 billion in total portfolio assets. Collectively, this arrangement
is referenced to as our “Engagement.” The Subject Properties are future acquisitions of net leased real estate located
across the United States and Europe.

 

It is understood that the purpose of the Services will be to
estimate the “as is” market value of the leased fee interest of the real property. The intended use by the Company
for the valuation is to provide a basis for valuation of net asset value as described in the Company’s registration statement
on Form S-11, as amended from time to time (the “Registration Statement”). We understand that the Services will be
to estimate the Fair Market Value of the real estate properties in a newly created fund.

 

Valuation Approaches/Premises

 

We will utilize standard and accepted appraisal methodology
in arriving at our opinions of value. This would include the cost, sales comparison and income approaches to value. All inquiries,
visits to or contact with any persons or facilities of the Company regarding the Services shall be conducted by D&P in a manner
that will assure the confidentiality of the purpose of the Services to be provided. D&P recognizes and agrees that maintaining
the confidentiality of this project is of importance to Company.

 

It is likely that the most appropriate approach to value the
subject properties will be the Income Capitalization approach to value. The Income Capitalization approach simulates the reasoning
of an investor who views the cash flows that would result from the anticipated revenue and expense on a property throughout its
lifetime. The net income figure developed in our analysis is the balance of potential income remaining after vacancy and collection
allowances and operating expenses. This net income is then capitalized at an appropriate rate to derive an estimate of value using
the Direct Capitalization method or discounted in a Discounted Cash Flow methodology. We may use the Sales Comparison and Cost
Approach methodologies as appropriate as well.

 

	 	 	 	 	 
	Duff & Phelps. LLC	 	T +1 312 697 4600	 	www.duffandphelps com
	311 South Wacker Drive	 	F +1 312 697 0112	 	 
	Suite 4200	 	 	 	 
	Chicago, IL 60606	 	 	 	 

 

    	 

    	 

    

 

Procedures

 

		•	We will complete a desktop valuation of a sampling (25 percent) of the owned property contained within the fund as of the end
of each quarter (March 31, June 30, September 31, December 31) updating the values previously concluded upon for the assets which
have been held since our previous valuation. We will rely upon the contractual rental stream provided for these assets on an individual
or master lease level to provide our value conclusion.

 

		•	We will incorporate any additional assets which have been acquired since this time period into our overall analysis and will
complete desktop valuations on these assets using the same methodology.

 

		•	We will provide a brief discussion of notable economic and market dynamics which have affected capitalization rates and will
complete an analysis of current capitalization rates to be applied to the properties on an individual or master lease level for
our Direct Capitalization or Discounted Cash Flow approach.

 

Form of Report and Timetable

 

At the conclusion of our analysis, we will provide you with
a narrative report (the “Report”) with supporting exhibits containing calculations leading to our value conclusions.
The report will be prepared in accordance with the Code of Professional Ethics and Standards of Professional Practice set for the
by the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice (USPAP) as adopted by the Appraisal Foundation.

 

We are ready to begin our work immediately upon our receipt
of this signed Engagement and upon receipt of information provided in conjunction with an agreed upon timetable considering the
various valuation dates. Once you have read the draft Report, we will issue our final Report bearing the firm’s signature.

 

We will work with the Company to arrive at a workable timetable
for delivery of the valuation conclusions and quarterly Report.

 

Staffing and Fees

 

Ross Prindle, CRE, MAI will be the Managing
Director in charge of the Services on behalf of D&P. Ross is the Managing Director in charge of the global Real Estate Services
Group at Duff & Phelps. Ross will call upon additional experienced staff when required.

 

Our fees for the Services to be provided
reflect the complexity of the Engagement, the time scale for its completion, the caliber of staff engaged, and the value of the
Services provided. Our estimated fees will depend on the assets acquired and as properties have not been acquired as of the writing
of this engagement letter, fees will be determined at a later date.

 

    	 

    	 

    

 

Expenses are not included in the fees and
any expenses associated with necessary property inspections and/or meetings with the Company will be billed in addition to these
fees,

 

Acknowledgement and Acceptance

 

In accordance with D&P policy, it is
necessary that we receive an executed copy of this Engagement Letter and the attached Terms and Conditions (to which this Engagement
is subject) prior to commencement of the Services. If the scope and terms of the Engagement Letter and the attached Terms and Conditions
are acceptable, please acknowledge your acceptance by signing the confirmation below and returning this Letter to us at the above
address and emailing ross.prindle@duffandphelps.com or by fax at 312-265-3581.

 

Please do not hesitate to contact me if you have any questions
or amendments.

 

Yours sincerely,

 

	/s/ Ross Prindle	 	Date:	JANUARY 31, 2013

 

	Duff & Phelps, LLC	 
	 	 	 
	By:	Ross Prindle, MAI, CRE	 
		Managing Director	 

 

 

Confirmation of Terms of Engagement

 

Having read this Engagement Letter from
Duff & Phelps, LLC and the attached Terms and Conditions, the Company acknowledges acceptance of and agree to engage Duff &
Phelps, LLC in accordance with the terms and provisions of this Engagement Letter and the attached Terms and Conditions.

 

	/s/
    Brian S. Block, EVP & CFO	 	Date:	JANUARY 31, 2013

 

	Signed:	Brian S. Block	 
	On behalf of:	American Realty Capital Healthcare Trust II, Inc.	 

 

    	 

    	 

    

 

Attachment to the Engagement Letter

 

Terms and Conditions

 

The following are the Terms and Conditions
on which Duff & Phelps will provide the Services set forth in the attached Engagement Letter. Together, the Terms and Conditions
and the Engagement Letter are referred to as the “ Contract ,” which forms the entire agreement between Duff
& Phelps and the Company relating to the Services.

 

Fees

 

		1.	Duff & Phelps’ invoices are payable upon receipt. If we do not receive payment of any
invoice within forty-five (45) days of the invoice date, we shall be entitled, without prejudice to any other rights that we may
have, to suspend provision of the Services until all sums due are paid in full. Under no circumstances can Duff & Phelps issue
its final Report with any billings that remain outstanding.

 

	 	2.	If any amounts payable hereunder are not paid within thirty (30) days when due, such amounts shall accrue interest at a rate equal to the lesser of two percent (2%) per month or the highest interest rate allowed under the law of New York. In the event that we are required to initiate a lawsuit or hire attorneys to collect any past due amounts, in addition to any other rights and remedies available to us, Duff & Phelps shall be entitled to reimbursement of its attorneys fees and other costs of collection.

 

	 	3.	Other than as set forth in the Company’s Registration Statement we have no responsibility to update any opinion, report, analysis or any other document relating to this Engagement for any events or circumstances occurring subsequent to the date of such opinion, report, analysis or other document. Any such subsequent consultations or work shall be subject to arrangements at Duff & Phelps’ then standard fees plus expenses.

 

	 	4.	Either party may request changes to the Services. We shall work with you to consider and, if appropriate, to vary any aspect of the Engagement, subject to payment of reasonable additional fees and a reasonable additional period to provide any additional services. Any variation to this Contract, including any variation to fees, services, or time for performance of the Services, shall be set forth in a separate engagement letter executed by both parties which shall form part of this Contract.

 

	 	5.	Duff & Phelps’ performance of the Services is dependent upon you providing us with accurate and timely information and assistance as we may reasonably require from time to time. You shall use reasonable skill, care and attention to ensure that all information we may reasonably require is provided on a timely basis and is accurate and complete. You shall notify us if you subsequently learn that the information provided is inaccurate or otherwise should not be relied upon. The inability to supply Duff & Phelps with the agreed upon information in a useable form within the amount of time reasonably required by Duff & Phelps may increase fees and delay completion. Additionally, in the event unforeseen complications are encountered which would significantly increase fees; we would discuss these with you and await your approval before proceeding,

 

    	 

    	 

    

 

Termination

 

	 	6.	The initial term of this Contract shall be for one year, which shall be deemed to be automatically renewed unless either Duff & Phelps or the Company provides prior written notice of no less than ninety (90) days of such party’s election to terminate this Contract. In addition, either party may terminate this Contract in the event that the other party has breached any material provision of this Contract and such breach has not been cured within ten (10) days after receipt of written notice from the then non-breaching party.

 

	 	7.	Upon termination of this Contract, each party shall, upon written request from the other, return to the other all property and documentation of the other that is in its possession, except that we shall be entitled to retain one copy of such documents in order to maintain a professional record of Duff & Phelps’ involvement in the Engagement, subject to Duff & Phelps’ continuing confidentiality obligations hereunder.

 

	 	8.	The provisions included within “Fees”, “Preservation of Confidential Information” and “Other Terms and Provisions” shall survive the termination or expiration of this Contract.

 

Valuation Work Products and Report

 

	 	9.	You acknowledge that Duff & Phelps will use and rely upon the financial and other information, including prospective financial information, provided by the Company. Duff & Phelps’ conclusion is dependent on such information being complete and accurate in all material respects. We assume no responsibility and make no representations as to the accuracy and completeness of such provided information. In addition, we will not independently verify any information that we obtain from public or other sources. There will usually be differences between estimated and actual results because events and circumstances frequently do not occur as expected, and those differences may be material. You acknowledge that no reliance shall be placed on draft Reports, conclusions or advice, whether oral or written, issued by us since the same may be subject to further work, revision and other factors which may mean that such drafts are substantially different from any final Report or advice issued.

 

	 	10.	Any advice given or Report issued by us is provided solely for your use and benefit and only in connection with the Services that are provided hereunder. You agree to obtain Duff & Phelps’ written consent which Duff & Phelps may at its discretion grant, withhold, or grant subject to conditions, before disclosing any of Duff & Phelps’s advice, analysis or Report to anyone else, or otherwise making reference to its role, whether orally or in writing; provided, however, that no prior written consent shall be required in connection with any federal or state regulatory or governmental inquiry or proceeding, pursuant to applicable law or in connection with any request by a third party due diligence firm (subject to such due diligence firm entering into a customary release letter in form and substance satisfactory to Duff & Phelps). When Duff & Phelps gives such consent, it is subject to the prior approval of Duff & Phelps of such disclosure. Further, you shall not provide such Report to any third party without the third party first executing a standard Duff & Phelps Release Letter. In no event, regardless of whether consent or pre-approval has been provided, shall we assume any responsibility to any third party to which any advice or Report is disclosed or otherwise made available.

 

    	 

    	 

    

 

	 	11.	It is understood and agreed that the final Report resulting from this Engagement shall remain your property. To the extent that Duff & Phelps utilizes any of its property (including, without limitation, any hardware or software) in connection with this Engagement, such property shall remain the property of Duff & Phelps, and you shall not acquire any right or interest in such property or in any partially completed Report. We shall have ownership (including, without limitation, copyright ownership) and all rights to use and disclose Duff & Phelps’ ideas, concepts, know-how, methods, techniques, processes and skills, and adaptations thereof in conducting its business (collectively, “ Know-How ”) regardless of whether such Know-How is incorporated in any way in the final Report.

 

	 	12.	The scope of the final Report we will provide pursuant to the terms of this Contract will be limited to the scope as described in the Scope of Services section. One or more additional issues may exist that could affect the Federal tax treatment of the subject matter of Duff & Phelps’ final Report. Duff & Phelps’ final Report will not consider or provide a conclusion with respect to any of those issues. With respect to any significant Federal tax issue outside the scope of the final Report, the final Report will not be written, and cannot be used, by anyone for the purpose of avoiding Federal tax penalties.

 

	 	13.	The Report or any results of Duff & Phelps’ Services shall not constitute a Solvency Opinion or a Fairness Opinion and may not be relied upon by you or any other party as such. Furthermore, any analyses we perform should not be taken to supplant any procedures that you should undertake in your consideration of any transaction or investment, and you acknowledge and agree that any decision relating to, or whether or not to enter into, any transaction or make any investment decision is solely the responsibility of Company management.

 

	 	14.	By its very nature, valuation work cannot be regarded as an exact science and the conclusions arrived at in many cases will of necessity be subjective and dependent on the exercise of individual judgment.

 

Preservation of Confidential Information

 

	 	15.	Neither Duff & Phelps nor the Company will disclose to any third party without the prior written consent of the other party any confidential information which is received from the other party for the purposes of providing or receiving the Services which if disclosed in tangible form is marked confidential or if disclosed otherwise is confirmed in writing as being confidential or, if disclosed in tangible form or otherwise, is manifestly confidential; it being understood that the reports prepared by Duff & Phelps for the Company shall not be considered confidential information for purposes herein. Duff & Phelps and the Company agree that any confidential information received from the other party shall only be used for the purposes of providing or receiving the Services under this or any other contract between Duff & Phelps and the Company.

 

    	 

    	 

    

 

	 	16.	These restrictions will not apply to any information which: (a) is or becomes generally available to the public other than as a result of a breach of an obligation by the receiving party; (b) is acquired from a third party who owes no obligation of confidence with respect to the information; or (c) is or has been independently developed by the recipient.

 

	 	17.	Notwithstanding the foregoing, either party will be entitled to disclose confidential information of the other (i) to Duff & Phelps’ or the Company’s respective insurers or legal advisors, or (ii) to a third party to the extent that this is required, by any court of competent jurisdiction, or by a governmental or regulatory authority or where there is a legal right, duty or requirement to disclose, provided that (and without breaching any legal or regulatory requirement) where reasonably practicable not less than two (2) business days notice in writing is first given to the other party.

 

Other Terms and Provisions

 

	 	18.	Except in the event of Duff & Phelps’ willful misconduct or fraud, in no event shall we be liable to you (or any person claiming through you) under this Contract, under any legal theory, for any amount in excess of the total professional fees paid by you to us under this Contract or any addendum to which the claim relates. In no event shall we be liable to you under this Contract under any legal theory for any consequential, indirect, lost profit or similar damages relating to or arising from Duff & Phelps’ Services provided under this Contract.

 

	 	19.	You accept and acknowledge that any legal proceedings arising from or in connection with this Contract (or any variation or addition thereto) must be commenced within one (1) year from the date when you become aware of or ought reasonably to have become aware of the facts, which give rise to Duff & Phelps’ alleged liability. You also agree that no action or claims will be brought against any Duff & Phelps employees personally.

 

	 	20.	You agree to indemnify and hold harmless Duff & Phelps, its affiliates and their respective employees from and against any and all third party claims, liabilities, losses, costs, demands and reasonable expenses, including but not limited to reasonable legal fees and expenses, internal management time and administrative costs, relating to Services we render under this Contract or otherwise arising under this Contract. The foregoing indemnification obligations shall not apply in the event that a court of competent jurisdiction finally determines that such claims resulted directly from the gross negligence, willful misconduct or fraudulent acts of Duff & Phelps.

 

	 	21.	You accept and acknowledge that we have not made any warranties or guarantees, whether express or implied, with respect to the Services or the results that you may obtain as a result of the provision of the Services.

 

    	 

    	 

    

 

	 	22.	Except for the Company’s payment obligations, neither Duff & Phelps nor the Company will be liable to the other for any delay or failure to fulfill obligations caused by circumstances outside our reasonable control.

 

	 	23.	This Contract constitutes the entire agreement between the parties hereto regarding the subject matter hereof and supersedes any prior agreements (whether written or oral) between the parties regarding the subject matter hereof. This Contract may be executed in any number of counterparts each of which shall be an original, but all of which together shall constitute one and the same instrument.

 

	 	24.	Duff & Phelps reserves the right to use your name and a description of the nature of the Engagement in general marketing materials.

 

	 	25.	This Contract shall be governed by and interpreted in accordance with the internal laws of the State of New York and the courts of the State of New York shall have exclusive jurisdiction in relation to any claim arising out of this Contract.

 

	 	26.	Duff & Phelps acknowledges that (A) its valuations will be used or incorporated into the Company’s Registration Statement and periodic filings; (B) Duff & Phelps will be named as an expert in the Registration Statement; (C) Duff & Phelps will provide a consent of independent valuer in form satisfactory to the Company and Duff & Phelps to be attached as an exhibit to the Registration Statement under Exhibit 99; and (D) Duff & Phelps’ provision of the aforementioned consent is subject to the Company providing Duff & Phelps a commercially reasonable opportunity to review and consent to references to Duff & Phelps in any regulatory filings which require Duff & Phelps to be named as an expert.EX 10.6 ARC HCT II 03.31.2013 10-Q SS

Exhibit 10.6

FORM OF RESTRICTED SHARE AWARD AGREEMENT 
PURSUANT TO THE
EMPLOYEE AND DIRECTOR INCENTIVE RESTRICTED SHARE PLAN 
OF 
AMERICAN REALTY CAPITAL HEALTHCARE TRUST II, INC. 

THIS RESTRICTED SHARE AWARD AGREEMENT (this “Agreement”), made as __________, 201___, is by and between American Realty Capital Healthcare Trust II, Inc., a Maryland corporation (the “Company”), and ___________ (the “Participant”).  
WHEREAS, the Board of Directors of the Company (the “Board”) adopted, and the stockholders of the Company approved, the Employee and Director Incentive Restricted Share Plan of American Realty Capital Healthcare Trust II, Inc. (as such plan may be amended from time to time, the “Plan”);
WHEREAS, as a non-employee director of the Company, pursuant to Section 6.1 of the Plan, upon the date of your initial election to the Board you were automatically granted shares of the Company’s common stock, par value $.01 per share (“Common Stock”) as set forth below and will be automatically granted additional shares of Common Stock on the date of each annual meeting of the Company’s stockholders after the date thereof that you remain a non-employee director of the Company as set forth below; and
WHEREAS, such shares of Common Stock are subject to certain restrictions prior to the vesting thereof as set forth herein.
NOW, THEREFORE, the Company and the Participant agree as follows:
1.     Grant of Shares.  Subject to the terms, conditions and restrictions of the Plan and this Agreement, as of each of (i) __________, 201____, the date of your initial election to the Board (the “Initial Grant Date”), and (ii) the date of each annual meeting of the Company’s stockholders thereafter (each an “Annual Grant Date”, and together with the Initial Grant Date, each a “Grant Date”), pursuant to Section 6.1 of the Plan, you were or will be, as applicable, automatically granted 1,333 shares of duly authorized, validly issued, fully paid and non-assessable Common Stock (the “Shares”).  To the extent required by applicable law, the Participant will pay the Company the par value ($.01) for each Share awarded to the Participant simultaneously with the execution of this Agreement in cash or cash equivalents payable to the order of the Company.  Pursuant to the Plan and Sections 2 and 3 of this Agreement, the Shares are subject to certain restrictions, which restrictions and possible risk of forfeiture will expire in accordance with the provisions of the Plan and Sections 2 and 3 hereof.  While such restrictions are in effect, the Shares subject to such restrictions will be referred to herein as “Restricted Shares” and the period during which the Shares are subject to such restrictions will be referred to herein as the “Restriction Period.”  
2.    Restrictions on Transfer.  The Participant will not sell, assign, transfer, pledge, exchange, encumber, hypothecate or otherwise dispose of the Restricted Shares, except 

1

as set forth in the Plan or this Agreement.  Any attempted sale, assignment, transfer, pledge, exchange, encumbrance, hypothecation or other disposition of the Restricted Shares in violation of the Plan or this Agreement will be void and of no effect and the Company will have the right to disregard the same on its books and records and to issue “stop transfer” instructions to its transfer agent.
3.    Vesting.  Subject to the terms of the Plan and this Agreement, the Restricted Shares will vest and cease to be Restricted Shares, and accordingly, the restrictions contained in Sections 2 and 5 will no longer apply (but the Shares will remain subject to Section 9) as follows:
(a)    Twenty percent (20%) upon each of the first, second, third, fourth and fifth anniversaries of the applicable Grant Date (i.e., upon the anniversaries of the Initial Grant Date with respect to the Restricted Shares granted upon the Participant’s initial election to the Board and upon the anniversaries of each applicable Annual Grant Date for any Restricted Shares granted to the Participant on the date of an annual meeting of the Company’s stockholders), subject in each case to the Participant not incurring a Termination prior to such vesting date.
(b)    Notwithstanding Section 3(a), the Restricted Shares will become fully vested and cease to be Restricted Shares on the effective date of the consummation of a Change in Control (as defined on Appendix A), subject to the Participant not incurring a Termination prior to such vesting date.
(c)    There will be no proportionate or partial vesting in the periods prior to the applicable vesting dates and all vesting will occur only on the appropriate vesting date.  
4.    Forfeiture.  If a Participant incurs a Termination for any reason, the Participant will automatically forfeit any unvested Restricted Shares and the Company will acquire such unvested Restricted Shares for the amount paid by the Participant for such Restricted Shares (or, if no amount was paid by the Participant for such Restricted Shares, then the Company will acquire such Restricted Shares for no consideration).
5.    Rights as a Holder of Restricted Shares.  From and after the Grant Date, the Participant will have, with respect to the Restricted Shares, all of the rights of a holder of shares of Common Stock, including, without limitation, the right to vote the Shares, to receive and retain all regular cash distributions payable to holders of Shares of record on and after the Grant Date (although such distributions will be treated, to the extent required by applicable law, as additional compensation for tax purposes), and to exercise all other rights, powers and privileges of a holder of Shares with respect to the Restricted Shares, with the exception that:  (i) to the extent the Company issues a distribution in the form other than a cash distribution, including in the form of Shares or other property, such distribution will be subject to the same restrictions that are then applicable to the Restricted Shares under the Plan and this Agreement and such restrictions will expire at the same time as the restrictions on the Restricted Shares expire;  and (ii) the Participant may not sell, assign, transfer, pledge, exchange, encumber, hypothecate or otherwise dispose of the Restricted Shares during the Restriction Period.  

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6.    Taxes; Section 83(b) Election.  The Participant will be solely responsible for all applicable foreign, Federal, state, local or other taxes with respect to the Restricted Shares; provided, however, that at any time the Company is required to withhold any such taxes, the Participant acknowledges that (i) no later than the date on which any Restricted Shares will have become vested, the Participant will pay to the Company, or make arrangements satisfactory to the Company regarding payment of, any Federal, state, local or other taxes of any kind required by law to be withheld with respect to any Restricted Shares which will have become so vested; (ii) the Company will, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to the Participant any Federal, state or local or other taxes of any kind required by law to be withheld with respect to any Restricted Shares which will have become so vested, including that the Company may, but will not be required to, sell a number of Restricted Shares sufficient to cover applicable withholding taxes; and (iii) in the event that the Participant does not satisfy (i) above on a timely basis, the Company may, but will not be required to, pay such required withholding and, to the extent permitted by Applicable Law, treat such amount as a demand loan to the Participant at the maximum rate permitted by law, with such loan, at the Company’s sole discretion and provided the Company so notifies the Participant within thirty (30) days of the making of the loan, secured by the Restricted Shares and any failure by the Participant to pay the loan upon demand will entitle the Company to all of the rights at law of a creditor secured by the Restricted Shares.  The Company may hold as security any certificates representing any Restricted Shares and, upon demand of the Company, the Participant will deliver to the Company any certificates in his or her possession representing the Restricted Shares together with a stock power duly endorsed in blank.  The Participant also acknowledges that it is his or her sole responsibility, and not the Company’s, to file timely and properly any election under Section 83(b) of the Code, and any corresponding provisions of state tax laws, if the Participant wishes to utilize such election.  Although the Company makes no guarantee with respect to the tax treatment of the Restricted Shares, the award of Restricted Shares pursuant to this Agreement is intended to be exempt from Section 409A of the Code and will be limited, construed and interpreted in accordance with such intent.  With respect to any distributions and other property issued in respect of the Shares, however, this Agreement is intended to comply with, or to be exempt from, the applicable requirements of Section 409A of the Code and will be limited, construed and interpreted in accordance with such intent.  In no event whatsoever will the Company or any of its affiliates be liable for any additional tax, interest or penalties that may be imposed on the Participant by Section 409A of the Code or any damages for failing to comply with Section 409A of the Code.
7.    No Obligation to Continue Employment or Service.  This Agreement is not an agreement of employment or service.  Neither the execution of this Agreement nor the issuance of the Restricted Shares hereunder constitute an agreement by the Company or any of its Affiliates to employ or retain, or to continue to employ or retain, the Participant during the entire, or any portion of, the term of this Agreement, including, but not limited to, any period during which any Restricted Shares are outstanding, nor does it modify in any respect the Company or its Affiliate’s right to terminate or modify the Participant’s service or compensation.

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8.    Legend.  In the event that a certificate evidencing the Restricted Shares is issued, the certificate representing the Restricted Shares will have endorsed thereon the following legends:
(a)    “THE ANTICIPATION, ALIENATION, ATTACHMENT, SALE, TRANSFER, ASSIGNMENT, PLEDGE, ENCUMBRANCE OR CHARGE OF THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE EMPLOYEE AND DIRECTOR INCENTIVE RESTRICTED SHARE PLAN OF AMERICAN REALTY CAPITAL HEALTHCARE TRUST II, INC. (THE “COMPANY”) (AS SUCH PLAN MAY BE AMENDED FROM TIME TO TIME, THE “PLAN”) AND AN AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND THE COMPANY DATED AS OF ______________, 201__.  COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.”
(b)    Any legend required to be placed thereon by applicable blue sky laws of any state. 
Notwithstanding the foregoing, in no event will the Company be obligated to issue a certificate representing the Restricted Shares prior to vesting as set forth in Section 3 hereof.
9.    Securities Representations.  The Shares are being issued to the Participant and this Agreement is being made by the Company in reliance upon the following express representations and warranties of the Participant.
The Participant acknowledges, represents and warrants that:
(a)    the Participant has been advised that the Participant may be an “affiliate” within the meaning of Rule 144 under the Securities Act of 1933, as amended (the “Act”), currently or at the time the Participant desires to sell the Shares following the vesting of the Restricted Shares, and in this connection the Company is relying in part on the Participant’s representations set forth in this section.
(b)    If the Participant is deemed an affiliate within the meaning of Rule 144 of the Act, the Shares must be held indefinitely unless an exemption from any applicable resale restrictions is available or the Company files an additional registration statement (or a “re-offer prospectus”) with regard to such Shares. 
(c)    The Company is under no obligation to register the Shares (or to file a “re-offer prospectus”).
(d)    If the Participant is deemed an affiliate within the meaning of Rule 144 of the Act, the Participant understands that the exemption from registration under Rule 144 will not be available unless (i) a public trading market then exists for the Common Stock, (ii) adequate information concerning the Company is then available to the public, and (iii) other terms and 

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conditions of Rule 144 or any exemption therefrom are complied with; and that any sale of the Shares may be made only in limited amounts in accordance with such terms and conditions.
10.    Power of Attorney.  The Company, its successors and assigns, is hereby appointed the attorney-in-fact, with full power of substitution, of the Participant for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instruments which such attorney-in-fact may deem necessary or advisable to accomplish the purposes hereof, which appointment as attorney-in-fact is irrevocable and coupled with an interest.  The Company, as attorney-in-fact for the Participant, may in the name and stead of the Participant, make and execute all conveyances, assignments and transfers of the Restricted Shares provided for herein, and the Participant hereby ratifies and confirms that which the Company, as said attorney-in-fact, will do by virtue hereof.  Nevertheless, the Participant will, if so requested by the Company, execute and deliver to the Company all such instruments as may, in the judgment of the Company, be advisable for this purpose.
11.    Miscellaneous.
(a)    This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective heirs, personal legal representatives, successors, trustees, administrators, distributees, devisees and legatees.  The Company may assign to, and require, any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree in writing to perform this Agreement.  Notwithstanding the foregoing, the Participant may not assign this Agreement or any of the Participant’s rights, interests or obligations hereunder. 
(b)    This award of Restricted Shares will not affect in any way the right or power of the Board or stockholders of the Company to make or authorize an adjustment, recapitalization or other change in the capital structure or the business of the Company, any merger or consolidation of the Company or subsidiaries, any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Restricted Shares, the dissolution or liquidation of the Company, any sale or transfer of all or part of its assets or business or any other corporate act or proceeding.
(c)    The Participant agrees that the award of the Restricted Shares hereunder is special incentive compensation and that it, any dividends paid thereon (even if treated as compensation for tax purposes) will not be taken into account as “salary” or “compensation” or “bonus” in determining the amount of any payment under any pension, retirement or profit-sharing plan of the Company or any life insurance, disability or other benefit plan of the Company.
(d)    No modification or waiver of any of the provisions of this Agreement will be effective unless in writing and signed by the party against whom it is sought to be enforced.
(e)    This Agreement may be executed in one or more counterparts (including by facsimile transmission), each of which will be deemed an original, but all of which together will constitute one and the same instrument.

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(f)    The failure of any party hereto at any time to require performance by another party of any provision of this Agreement will not affect the right of such party to require performance of that provision, and any waiver by any party of any breach of any provision of this Agreement will not be construed as a waiver of any continuing or succeeding breach of such provision, a waiver of the provision itself, or a waiver of any right under this Agreement.
(g)    The headings of the sections of this Agreement have been inserted for convenience of reference only and will in no way restrict or modify any of the terms or provisions hereof.
(h)    All notices, consents, requests, approvals, instructions and other communications provided for herein will be in writing and validly given or made when delivered, or on the second succeeding business day after being mailed by registered or certified mail, whichever is earlier, to the persons entitled or required to receive the same, addressed, in the case of the Company to the President of the Company at the principal office of the Company and, in the case of the Participant, at the address most recently on file with the Company.
(i)    This Agreement will be construed, interpreted and governed and the legal relationships of the parties determined in accordance with the internal laws of the State of Maryland without reference to rules relating to conflicts of law.
(j)    If any provision of this Agreement will be held invalid or unenforceable, such invalidity or unenforceability will not affect any other provisions hereof, and this Agreement will be construed and enforced as if such provisions had not been included.
12.    Provisions of Plan Control.  This Agreement is subject to all the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted thereunder and as may be in effect from time to time.  The Plan is incorporated herein by reference.  A copy of the Plan has been delivered to the Participant.  If and to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the Plan will control, and this Agreement will be deemed to be modified accordingly.  Unless otherwise indicated, any capitalized term used but not defined herein will have the meaning ascribed to such term in the Plan.  This Agreement contains the entire understanding of the parties with respect to the subject matter hereof (other than any other documents expressly contemplated herein or in the Plan) and supersedes any prior agreements between the Company and the Participant.
[Signature Page Follows]

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

American Realty Capital Healthcare Trust II, Inc.

By:_______________________________
     Name: 
         Title:

Participant

_______________________________
[Name]

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APPENDIX A

“Change in Control” means and includes any of the following events:
(i)    any Person is or becomes Beneficial Owner (as defined under Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power of the then outstanding securities of the Company, excluding (A) any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (x) of subsection (ii) below and (B) any Person who becomes such a Beneficial Owner through the issuance of such securities with respect to purchases made directly from the Company; or
(ii)    the consummation of a merger or consolidation of the Company with any other Person or the issuance of voting securities of the Company in connection with a merger or consolidation of the Company (or any direct or indirect subsidiary of the Company) pursuant to applicable stock exchange requirements, other than (x) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) thirty percent (30%) or more of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (y) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power of the then outstanding securities of the Company; or
(iii)    the consummation of a sale or disposition by the Company of all or substantially all of the assets of the Company; or
(iv)    persons who, as of the Grant Date, constitute the Board (the “Incumbent Directors”) cease for any reason, including, without limitation, as a result of a tender offer, proxy contest, merger or similar transaction, to constitute at least a majority of the Board, provided that any person becoming a director of the Company subsequent to such date shall be considered an Incumbent Director if such person’s election was approved by or such person was nominated for election a vote of at least a majority of the Incumbent Directors.

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