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]