Exhibit 10.1

 

October 7, 2016

 

AR Capital Acquisition Corp.

405 Park Avenue, 14th Floor

New York, New York 10022

 

Re: Agreement of New Sponsor

 

Ladies and Gentlemen:

 

In connection with the consummation of the transactions contemplated by that
certain Agreement, dated September 16, 2016, by and among the undersigned, AR
Capital Acquisition Corp. (the “Company”) and AR Capital, LLC (“ARC LLC”), as
amended by the First Amendment to the Agreement, dated September 27, 2016, the
undersigned hereby agrees as follows (certain capitalized terms used herein are
defined in paragraph 8 hereof):

 

1. If the Company seeks stockholder approval of a proposed Business Combination,
then in connection with such proposed Business Combination, the undersigned will
vote all Founder Shares and any shares acquired by it in the secondary public
market in favor of such proposed Business Combination.

 

2. The undersigned hereby agrees that in the event that the Company fails to
consummate a Business Combination by October 1, 2017 or if prior to October 1,
2017, the Company publicly discloses that an extension past October 1, 2017 will
not prevent the Company from maintaining the listing of its securities on The
Nasdaq Capital Market, December 31, 2017, or such later period approved by the
Company’s stockholders in accordance with the Company’s amended and restated
certificate of incorporation (the “Outside Date”), the undersigned shall take
all reasonable steps to cause the Company to (i) cease all operations except for
the purpose of winding up, (ii) as promptly as reasonably possible but not more
than 10 business days thereafter, redeem 100% of the Common Stock sold as part
of the Units in the Public Offering (the “Offering Shares”), at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the
Trust Account, including interest not previously released to the Company to pay
its franchise and income taxes (less up to $100,000 of interest to pay
dissolution expenses), divided by the number of then outstanding public shares,
which redemption will completely extinguish Public Stockholders’ rights as
stockholders (including the right to receive further liquidation distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of the Company’s remaining
stockholders and the Company’s board of directors, dissolve and liquidate,
subject in each case to the Company’s obligations under Delaware law to provide
for claims of creditors and other requirements of applicable law. The
undersigned agrees to not propose any amendment to the Company’s amended and
restated certificate of incorporation that would affect the substance or timing
of the Company’s obligation to redeem 100% of the Offering Shares if the Company
does not complete a Business Combination by the Outside Date, unless the Company
provides its public stockholders with the opportunity to redeem their shares of
Common Stock upon approval of any such amendment at a per share price, payable
in cash, equal to the aggregate amount then on deposit in the Trust Account
including interest earned on the funds held in the Trust Account and not
previously released to the Company to pay its franchise and income taxes,
divided by the number of then outstanding public shares.

 

   

 

 

The undersigned agrees that it has no right, title, interest or claim of any
kind in or to any monies held in the Trust Account or any other asset of the
Company as a result of any liquidation of the Company with respect to the
Founder Shares. The undersigned hereby further waives, with respect to any
shares of the Common Stock held by it, him or her, any redemption rights it, he
or she may have in connection with the consummation of a Business Combination,
including, without limitation, any such rights available in the context of a
stockholder vote to approve such Business Combination or in the context of a
tender offer made by the Company to purchase shares of the Common Stock
(although the undersigned shall be entitled to redemption and liquidation rights
with respect to any shares of Common Stock (other than the Founder Shares) it
holds if the Company fails to consummate a Business Combination by the Outside
Date).

 

3. In the event of the liquidation of the Trust Account, the undersigned (the
“Indemnitor”) agrees to indemnify and hold harmless the Company against any and
all loss, liability, claim, damage and expense whatsoever (including, but not
limited to, any and all legal or other expenses reasonably incurred in
investigating, preparing or defending against any litigation, whether pending or
threatened, or any claim whatsoever) to which the Company may become subject as
a result of any claim by (i) any third party for services rendered or products
sold to the Company or (ii) a prospective target business with which the Company
has entered into an acquisition agreement (a “Target”); provided, however, that
such indemnification of the Company by the Indemnitor shall apply only to the
extent necessary to ensure that such claims by a third party for services
rendered (other than the Company’s independent public accountants) or products
sold to the Company or a Target do not reduce the amount of funds in the Trust
Account, provided, further, that such indemnification of the Company by the
Indemnitor shall apply only if such third party or Target has not executed an
agreement waiving claims against and all rights to seek access to the Trust
Account whether or not such agreement is enforceable. In the event that any such
executed waiver is deemed to be unenforceable against such third party, the
Indemnitor shall not be responsible for any liability as a result of any such
third party claims. Notwithstanding any of the foregoing, such indemnification
of the Company by the Indemnitor shall not apply as to any claims under the
Company’s obligation to indemnify the underwriters of the Public Offering (the
“Underwriters”) against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. The Indemnitor shall have the right to
defend against any such claim with counsel of its choice reasonably satisfactory
to the Company if, within 15 days following written receipt of notice of the
claim to the Indemnitor, the Indemnitor notifies the Company in writing that it
shall undertake such defense.

 

4. The undersigned hereby agrees not to participate in the formation of, or
become an officer or director of, any other blank check company that is formed
in the United States until the Company has entered into a definitive agreement
with respect to a Business Combination or the Company has failed to complete a
Business Combination by the Outside Date.

 

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5. (a) The undersigned acknowledges that the Founder Shares are held in an
escrow account maintained in New York, New York by Continental Stock Transfer &
Trust Company, acting as escrow agent. Subject to certain limited exceptions,
the undersigned agrees not to transfer, assign, sell or release the shares from
escrow until one year after the date of the consummation of a Business
Combination or earlier if, subsequent to a Business Combination, (i) the last
sale price of the Company’s common stock equals or exceeds $12.00 per share (as
adjusted for stock splits, stock dividends, reorganizations and
recapitalizations) for any 20 trading days within any 30-trading day period
commencing at least 150 days after the consummation of a Business Combination or
(ii) the Company consummates a subsequent liquidation, merger, stock exchange or
other similar transaction which results in all of the Company’s stockholders
having the right to exchange their shares of common stock for cash, securities
or other property (the “Lock-up”).

 

(b) The undersigned agrees that it shall not effectuate any Transfer of Private
Placement Warrants, or Common Stock underlying such warrants, until 30 days
after the completion of a Business Combination.

 

(c) Notwithstanding the provisions set forth in paragraphs 6(a) and (b),
Transfers of the Founder Shares, Private Placement Warrants and shares of Common
Stock underlying the Private Placement Warrants are permitted (a) to the
Company’s officers or directors, any affiliates or family members of any of the
Company’s officers or directors, any members of the undersigned or its
affiliates, or any affiliates of the undersigned, (b) in the case of an
individual, by gift to a member of the individual’s immediate family, to a
trust, the beneficiary of which is a member of the individual’s immediate family
or an affiliate of such person, or to a charitable organization; (c) in the case
of an individual, by virtue of laws of descent and distribution upon death of
the individual; (d) in the case of an individual, pursuant to a qualified
domestic relations order; (e) by private sales or transfers made in connection
with the consummation of a Business Combination at prices no greater than the
price at which the securities were originally purchased; (f) by virtue of the
laws of the state of Delaware or the undersigned’s limited liability company
agreement upon dissolution of the undersigned; (g) in the event of the Company’s
liquidation prior to the completion of a Business Combination; or (h) in the
event of completion of a liquidation, merger, stock exchange or other similar
transaction which results in all of the Company’s stockholders having the right
to exchange their shares of Common Stock for cash, securities or other property
subsequent to the completion of a Business Combination; provided, however, that
in the case of clauses (a) through (f) these permitted transferees must enter
into a written agreement agreeing to be bound by these transfer restrictions.

 

6. Neither the undersigned nor any affiliate of the undersigned, nor any
director or officer of the Company, shall receive any finder’s fee,
reimbursement, consulting fee, monies in respect of any repayment of a loan or
other compensation prior to, or in connection with any services rendered in
order to effectuate the consummation of the Company’s initial Business
Combination (regardless of the type of transaction that it is), other than
reimbursement for any reasonable out-of-pocket expenses related to identifying,
investigating and completing an initial Business Combination, so long as no
proceeds of the Public Offering held in the Trust Account may be applied to the
payment of such expenses prior to the consummation of a Business Combination;
and repayment of loans, if any, and on such terms as to be determined by the
Company from time to time, made by the undersigned or an affiliate of the
undersigned or certain of the Company’s officers and directors to finance
transaction costs in connection with an intended initial Business Combination,
provided, that, if the Company does not consummate an initial Business
Combination, a portion of the working capital held outside the Trust Account may
be used by the Company to repay such loaned amounts so long as no proceeds from
the Trust Account are used for such repayment.

 

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7. The undersigned has full right and power, without violating any agreement to
which it is bound (including, without limitation, any non-competition or
non-solicitation agreement with any employer or former employer) to enter into
this Letter Agreement.

 

8. As used herein, (i) “Business Combination” shall mean a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar business
combination, involving the Company and one or more businesses; (ii) “Founder
Shares” shall mean the shares of the Common Stock of the Company issued prior to
the consummation of the Public Offering; (iii) “Private Placement Warrants ”
shall mean the Warrants to purchase 6,550,000 shares of Common Stock that were
acquired by ARC LLC for an aggregate purchase price of $6.55 million, or $1.00
per Warrant, in a private placement that occurred simultaneously with the
consummation of the Public Offering; (iv) “Public Offering” means the initial
public offering of the Company that closed on October 7, 2014; (v) “Public
Stockholders” shall mean the holders of securities issued in the Public
Offering; and (vi) “Transfer” shall mean the (a) sale of, offer to sell,
contract or agreement to sell, hypothecate, pledge, grant of any option to
purchase or otherwise dispose of or agreement to dispose of, directly or
indirectly, or establishment or increase of a put equivalent position or
liquidation with respect to or decrease of a call equivalent position within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder with respect
to, any security, (b) entry into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
any security, whether any such transaction is to be settled by delivery of such
securities, in cash or otherwise, or (c) public announcement of any intention to
effect any transaction specified in clause (a) or (b).

 

9. This Letter Agreement constitutes the entire agreement and understanding of
the parties hereto in respect of the subject matter hereof and supersedes all
prior understandings, agreements, or representations by or among the parties
hereto, written or oral, to the extent they relate in any way to the subject
matter hereof or the transactions contemplated hereby. This Letter Agreement may
not be changed, amended, modified or waived (other than to correct a
typographical error) as to any particular provision, except by a written
instrument executed by all parties hereto.

 

10. No party hereto may assign either this Letter Agreement or any of its
rights, interests, or obligations hereunder without the prior written consent of
the other party. Any purported assignment in violation of this paragraph shall
be void and ineffectual and shall not operate to transfer or assign any interest
or title to the purported assignee. This Letter Agreement shall be binding on
the undersigned and each of its successors, heirs and assigns.

 

11. This Letter 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. The parties hereto (i) all agree that
any action, proceeding, claim or dispute arising out of, or relating in any way
to, this Letter Agreement shall be brought and enforced in the courts of New
York City, in the State of New York, and irrevocably submits to such
jurisdiction and venue, which jurisdiction and venue shall be exclusive and (ii)
waives any objection to such exclusive jurisdiction and venue or that such
courts represent an inconvenient forum.

 

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12. Any notice, consent or request to be given in connection with any of the
terms or provisions of this Letter 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 facsimile transmission.

 

13. This Letter Agreement shall terminate on the earlier of (i) the expiration
of the Lock-up or (ii) the liquidation of the Company.

 

[Signature Page Follows]

 

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  Sincerely,       AXAR MASTER FUND LTD.       By:  /s/ Andrew Axelrod     Name:
Andrew Axelrod     Title: Director

 

[Signature Page to Letter Agreement]

 

   

 

 

Acknowledged and Agreed:       AR CAPITAL ACQUISITION CORP.       By:  /s/
William Kahane     Name: William Kahane     Title: CEO  

 

[Signature Page to Letter Agreement]