AGREEMENT
Exhibit 2.1
AGREEMENT
This agreement (this “Agreement”) is dated as of September 16, 2016, by and among Axar Master Fund Ltd., a Cayman Islands exempted company (the “Purchaser”), AR Capital, LLC, a Delaware limited liability company (“AR Capital” or the “Seller”), and AR Capital Acquisition Corp., a Delaware corporation (the “Company” and together with AR Capital and the Purchaser, each a “Party” and collectively the “Parties”).
WHEREAS, the Parties desire that the Company amend the Company’s amended and restated certificate of incorporation (the “Company Charter”) to (i) extend the date before the Company must consummate an initial Business Combination from October 7, 2016 to December 31, 2017 (the “Extension”) and (ii) change the Company’s name from “AR Capital Acquisition Corp.” to “Axar Acquisition Corp.” (the “Name Change”);
The following terms, as used herein, have the following meanings:
“1933 Act” means the Securities Act of 1933, as amended.
“1934 Act” means the Securities Exchange Act of 1934, as amended.
“AR Capital” has the meaning set forth in the above.
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in the 1933 Act.
“Xxxxxxx” means Xxxxxx Xxxxxxx.
“Benichou” means Xxxxxx Xxxxxxxx.
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“Board” has the meaning set forth in the recitals.
“Business Combination” has the meaning set forth in the recitals.
“Business Day” means any day other than a Saturday, Sunday or legal or bank holiday in the City of New York, State of New York. If any time period set forth in this Agreement expires on other than a Business Day, such period shall be extended to and through the next succeeding Business Day.
“Closing” has the meaning set forth in Section 2.2.
“Closing Date” has the meaning set forth in Section 2.2.
“Common Stock” has the meaning set forth in the recitals.
“Company Actions” has the meaning set forth in the recitals.
Company Charter” has the meaning set forth in the recitals.
“Company SEC Documents” means all forms, reports, schedules, statements and documents, as the same may have been amended (and, if amended, only the most recent form of such form, report, schedule, statement and document shall be deemed to be one of the “Company SEC Documents”), filed by the Company with the SEC under the 1933 Act, the 1934 Act or any other applicable securities law since its formation.
“Compensation Reimbursement Agreement” means the agreement dated October 1, 2014, between the Company and AR Capital as sponsor of the Company to pay AR Capital, as sponsor, an amount not to exceed $15,000.00 per month as reimbursement for a portion of the compensation paid to its personnel, including certain of the Company’s officers who work on the Company’s behalf, commencing on the date the Company’s securities were first listed on NASDAQ.
“Escrow Agreement” means that certain Escrow Agreement, dated as of October 1, 2014, by and among the Company, AR Capital, the Securities Escrow Agent and the other parties thereto.
“Extension” has the meaning set forth in the recitals.
“Founder Securities” has the meaning set forth in the recitals.
“Founder Shares” has the meaning set forth in the recitals.
“Founders” means Schorsch, Kahane, Radesca and Wiegenfeld.
“Fraud” means with respect to any Person (i) a false representation made by such Person, (ii) such Person’s knowledge or belief that such representation was false or was made with reckless indifference to the truth, (iii) an intent to induce, or reckless indifference to the fact that such representation could induce, a second Person to act or to refrain from acting, (iv) such second Person’s action or inaction taken in justifiable reliance upon such representation and (v) damage to such second Person as a result of such reliance.
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“Governmental Authority” means any government or political subdivisions, regulatory entity or body, commission, board, bureau, agency or instrumentality thereof, and any court, tribunal or judicial body or authority.
“Indemnified Damages” has the meaning set forth in Section 6.1.
“Initial Purchase Price” has the meaning set forth in Section 2.1.
“Insider Letter” means the letter agreement dated October 1, 2014, by and among AR Capital, the Founders and the Company.
“Xxxxxx” means Xxxxxxx X. Xxxxxx.
“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, encumbrance or other adverse claim of any kind in respect of such property or asset.
“Loans” has the meaning set forth in Section 2.4.2.
“Name Change” has the meaning set forth in the recitals.
“New Management Director” has the meaning set forth in Section 2.5.2.
“New Management Officers” has the meaning set forth in Section 2.5.3.
“Party” and “Parties” has the meaning set forth in the above.
“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization.
“Private Placement Warrants” has the meaning set forth in the recitals.
“Public Warrants” has the meaning set forth in the recitals.
“Public Shares” means the shares of Common Stock included in the units sold in the Company’s initial public offering.
“Purchase Price” has the meaning set forth in Section 2.1.
“Purchaser” has the meaning set forth in the above.
“Radesca” means Xxxxxxxx Xxxxxxx.
“Registration Rights Agreement” has the meaning set forth in Section 7.2.
“Xxxxxxxx” means Xxxxxxxx X. Xxxxxxxx.
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“SEC” means the Securities and Exchange Commission.
“Securities Escrow Agent” means Continental Stock Transfer & Trust Company.
“Seller” has the meaning set forth in the above.
“Third Party Claim” has the meaning set forth in Section 6.4.
“Transaction” has the meaning set forth in the recitals.
“Trust Account” means the account into which certain proceeds from the Company’s initial public offering of securities and sale of the Private Placement Warrants were deposited pursuant to the Trust Agreement.
“Trust Agreement” has the meaning set forth in the recitals.
“Trust Amendment” has the meaning set forth in the recitals.
“Trust Loans” has the meaning set forth in Section 2.4.2.
“U.S. GAAP” has the meaning set forth in Section 4.2.10.
“Warrant Amendment” has the meaning set forth in the recitals.
“Wiegenfeld” means Xxxx Xxxxxxxxxx.
“Working Capital Loan” has the meaning set forth in Section 2.4.2.
Any reference in this Agreement to (i) a statute shall be to such statute, as amended from time to time, and to the rules and regulations promulgated thereunder, and (ii) the word “including” shall mean “including, without limitation.”
Article
2
TRANSACTIONS
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2.3.1 a number of Founder Shares equal to the excess (if positive) of (a) 6,000,000 over (b) 25% of the sum of (i) the total number of Public Shares outstanding immediately following the completion of the Company Actions and Extension Redemptions plus (ii) the excess of (x) the total number of shares of Common Stock issued or deemed issued, or issuable upon the conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any shares of Common Stock or equity-linked securities exercisable for or convertible into shares of Common Stock issued, or to be issued, to any seller in the initial Business Combination or to the Purchaser and its Affiliates, over (y) the total number of Public Shares redeemed in connection with the Business Combination (for the avoidance of doubt, no Founder Shares shall be forfeited under this Section 2.3.1 if sum of the foregoing clauses (a) and (b) is equal to or less than zero); and
2.3.2 a number of Private Placement Warrants equal to 6,550,000 multiplied by a fraction, the numerator of which is the number of Founder Shares required to be forfeited pursuant to Section 2.3.1 and the denominator of which is 5,947,827.
(i) On January 1, 2017 and the first (1st) day of each fiscal quarter commencing thereafter through the fiscal quarter in which the Company consummates an initial Business Combination or liquidates the Trust Account, the Purchaser shall loan to the Company an amount equal to the lesser of (X) $250,000.00 and (Y) $0.05 multiplied by the number of outstanding Public Shares following the completion of the Company Actions and Extension Redemptions (collectively, the “Trust Loans”), the proceeds of which shall be deposited by the Company into the Trust Account.
(ii) Following the Closing, as required (in the discretion of the Company) to satisfy the Company’s working capital and other expenses, the Purchaser shall make loans to the Company, in the aggregate amount not to exceed $2,000,000 without the approval of the Purchaser (the “Working Capital Loan” and together with the Trust Loans, the “Loans”).
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(iii) The Loans will not bear interest and will be repayable to the Purchaser upon consummation of an initial Business Combination.
2.6.1 Resignations of Officers. Xxxxxx and Xxxxxxx shall each resign as an officer of the Company;
Article
3
CONDITIONS TO CLOSING
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Article
4
REPRESENTATIONS AND WARRANTIES
OF THE SELLER AND THE COMPANY
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4.2.2 Corporate Existence and Power. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has all corporate powers and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted.
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Article
5
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER
The Purchaser makes the representations and warranties contained in this Article 5 as of the date hereof to the Company and the Seller intending that the Company and the Seller rely on each of such representations and warranties in order to induce the Company and the Seller to enter into and consummate the transactions contemplated by this Agreement.
5.3 Investment Representations.
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6.6 Company Charter Protections; Directors’ and Officers’ Liability Insurance.
6.6.1 All rights to exculpation or indemnification for acts or omissions occurring through the date hereof now existing in favor of any of the officers and directors of the Company prior to the consummation of the transactions contemplated hereby as provided in the Company Charter or bylaws of the Company shall survive the execution of this Agreement and the Closing and shall continue in full force and effect in accordance with their terms and shall not be amended by the Company to eliminate or reduce such rights except to the extent required by law.
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6.6.2 Until the earlier of (i) the date on which the Company consummates a Business Combination and (ii) the date on which the Company dissolves and liquidates prior to the consummation of a Business Combination, the Company shall cause to be maintained in effect the current policies of directors’ and officers’ liability insurance maintained by the Company (or policies of at least the same coverage and amounts containing terms and conditions which are no less advantageous to the Company’s current directors and officers), with respect to claims arising from facts and events that occurred through the Closing.
6.6.3 If the Company or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving entity of such consolidation or merger, or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, in each such case, to the extent necessary, proper provision shall be made so that the successors and assigns of the Company assume the obligations set forth in this Section 6.6.
6.7 Limitations on Indemnification.
6.7.1 No indemnified party shall be entitled to recover from an indemnifying party for, and the indemnified parties waive any right to recover, punitive, special, indirect or exemplary damages arising in connection with or with respect to any claim under this Agreement, except as may be awarded in connection to a Third Party Claim.
6.7.2 No indemnified party who has been determined by a court of competent jurisdiction in a final judgment from which no appeal can be made to have engaged in any Fraud, willful misconduct or gross negligence shall be entitled, to the extent that the Indemnified Damages were caused by such activity, to claim indemnification from any Person.
6.7.3 In the event any indemnification claim is brought against the Seller, the Purchaser expressly agrees that its recourse against the Seller is expressly limited to the full amount of the Purchase Price that would be payable upon the closing of an initial Business Combination, except in the case of Fraud, willful misconduct or gross negligence by the Seller.
6.7.4 In the event any indemnification claim is brought against the Purchaser, the Seller expressly agrees that its recourse against the Purchaser is expressly limited to the full amount of the Purchase Price that would be payable upon the closing of an initial Business Combination, except in the case of Fraud, willful misconduct or gross negligence by the Purchaser.
6.7.5 Each Party hereby acknowledges and agrees that, from and after the Closing, the sole and exclusive remedy of such Party, with respect to any and all claims for Indemnified Damages arising out of or relating to this Agreement shall be pursuant and subject to the requirements of the indemnification provisions set forth in this Article 6. Notwithstanding any of the foregoing, nothing contained in this Article 6 or elsewhere in this Agreement shall in any way impair, modify or otherwise any Party’s right to bring any claim or proceeding against any other Party based upon such other Party’s Fraud, willful misconduct or gross negligence.
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Article
7
COVENANTS
7.1 Releases.
7.1.1 The Seller hereby releases the Company and each of its officers, directors and shareholders from any claims the Seller may have now or in the future, whether contractual, statutory or otherwise, against any of the Company, its officers, directors or shareholders relating to the Company or its securities, including (i) the formation of the Company, (ii) the operation of the Company (including agreements between the Seller and the Company) up to the Closing and (iii) the dismissal of the Seller or any of its officers, directors or employees as an officer, director or employee of the Company, as applicable. Notwithstanding the foregoing, nothing herein shall be construed as a waiver or release of (x) any claim for indemnification that the Seller may have against the Company regardless of whether such claim arises after the Closing or (y) any rights under this Agreement or any of the agreements executed and delivered pursuant hereto.
7.1.2 The Company hereby releases the Seller and their respective officers, directors and shareholders from any claims the Company may have now or in the future, whether contractual, statutory or otherwise, against any of the Seller and their respective officers, directors and shareholders relating to the Company or its securities, including (i) the formation of the Company and (ii) the operation of the Company (including agreements between the Seller and the Company) up to the Closing. Notwithstanding the foregoing, nothing herein shall be construed as a waiver or release of any rights under this Agreement or any of the agreements executed and delivered pursuant hereto.
7.1.3 Nothing contained herein shall preclude the Company or the Seller from being named as a defendant or co-defendant in any Third Party Claim with respect to their actions prior to the date hereof.
7.1.4 No Party shall be released in the event of Fraud, willful misconduct or gross negligence of that Party.
7.2 Assignment of Registration Rights. The Seller hereby assigns to the Purchaser the Seller’s rights and obligations under that certain Registration Rights Agreement dated as of October 1, 2014, by and among the Company and each of the parties executing a signature page thereto (the “Registration Rights Agreement”) with respect to the Founder Securities.
7.3 Delivery of Records. Promptly after the request of the Purchaser, AR Capital shall deliver all of the Company’s organization documents, minute and stock record books and the corporate seal, books of account, general, financial, tax and personnel records, invoices, shipping records, supplier lists, correspondence and other documents, records and files and computer software and programs to a location designated by the Purchaser. AR Capital shall not retain copies of the foregoing, except for archiving and legal recordkeeping purposes.
7.4 Further Assurances. Each Party agrees that it will execute and deliver, or cause to be executed and delivered, on or after the date of this Agreement, all such other documents and instruments as are reasonably required for the performance of such Party’s obligations hereunder and will take all commercially reasonable actions as may be necessary to consummate the transactions contemplated hereby and to effectuate the provisions and purposes hereof. In addition, without limiting the foregoing, the Seller agrees to cooperate with the Company and the Purchaser with respect to all filings that the Company or the Purchaser elects to make or is required by law to make in connection with the transactions contemplated hereby.
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To the Seller: | AR Capital, LLC |
000 Xxxx Xxxxxx, 00xx Xxxxx | |
Xxx Xxxx, Xxx Xxxx 00000 | |
Attention: Legal Department | |
Facsimile: (000) 000-0000 | |
To the Company: | AR Capital Acquisition Corp. |
000 Xxxx Xxxxxx, 00xx Xxxxx | |
Xxx Xxxx, Xxx Xxxx 00000 | |
Attention: Legal Department | |
Facsimile: (000) 000-0000 | |
In either case, with a copy to: | Winston & Xxxxxx LLP |
000 Xxxx Xxx. | |
Xxx Xxxx, Xxx Xxxx 00000 | |
Attention: Xxxx Xxxxxxxxxx, Esq. | |
Facsimile: (000) 000-0000 | |
To the Purchaser: | Axar Master Fund Ltd. |
c/o Axar Capital Management LP | |
1330 Avenue of the Americas, Xxxxx Xxxxx | |
Xxx Xxxx, XX 00000 | |
Attention: Xxxxxx Xxxxxxx | |
Facsimile: (000) 000-0000 | |
With a copy to: |
Sidley Austin LLP Xxx Xxxxx Xxxxxxxx Xxxxxx Xxxxxxx, XX 00000 Attention: Xxxxxx X. Xxxxx, Esq. and Xxxxxxx X. Xxxxx, Esq. Facsimile: (000) 000-0000 |
All notices shall be deemed given and received upon their delivery to the addresses for the respective Party(ies), with the copies indicated, as provided in this Section.
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8.11 Governing Law. This Agreement and the interpretation of its terms shall be governed by the laws of the State of Delaware, without application of conflicts of law principles.
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[Remainder of page intentionally left blank; signature page to follow.]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set forth above.
SELLER: | ||
AR CAPITAL, LLC | ||
By: | /s/ Xxxxxx Xxxxxxx Xxxx, Xx. | |
Name: Xxxxxx Xxxxxxx Xxxx, Xx. | ||
Title: CEO |
[Signature Page to Transfer Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set forth above.
COMPANY: | ||
AR CAPITAL ACQUISITION CORP. | ||
By: | /s/ Xxxxxxx Xxxxxx | |
Name: Xxxxxxx Xxxxxx | ||
Title: CEO |
[Signature Page to Transfer Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set forth above.
PURCHASER: | ||
AXAR MASTER FUND LTD. | ||
By: Axar Capital Management LP, its investment manager | ||
By: Axar GP LLC, its general partner | ||
By: | /s/ Xxxxxx Xxxxxxx | |
Name: Xxxxxx Xxxxxxx | ||
Title: Sole Member | ||
Date: |
[Signature Page to Transfer Agreement]
SCHEDULE I
Contracts
Exhibit A
Secretary’s Certificate
Exhibit B
Form of Insider Letter Agreement
October [ ], 2016
[ ]
[Address]
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”), 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 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.
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.
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.
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]
Sincerely, | |||||
AXAR MASTER FUND LTD. | |||||
By: | |||||
Name: | |||||
Title: | |||||
Acknowledged and Agreed: | |||||
AR CAPITAL ACQUISITION CORP. | |||||
By: | |||||
Name: | |||||
Title: |
Exhibit C
Form of Insider Letter Amendment
October [ ], 2016
[ ]
[Address]
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”), 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 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.
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.
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.
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]
Sincerely, | |||||
AXAR MASTER FUND LTD. | |||||
By: | |||||
Name: | |||||
Title: | |||||
Acknowledged and Agreed: | |||||
AR CAPITAL ACQUISITION CORP. | |||||
By: | |||||
Name: | |||||
Title: |
Exhibit D
Form of Securities Escrow Agreement Amendment
Exhibit E
Form of Compensation Reimbursement Agreement Termination