Exhibit 10.4
EXCHANGE AGREEMENT
EXCHANGE AGREEMENT (this “Agreement”), dated as of August 4, 2021, by and among EWC Ventures LLC, a Delaware limited liability company (the “Company”), European Wax Center, Inc., a Delaware corporation (“Pubco”), and the holders of Common Units (as defined below) and shares of Class B Common Stock (as defined below) from time to time party hereto (each, a “Holder”).
W I T N E S S E T H:
WHEREAS, on the date hereof, the Company, Pubco and certain of the Holders entered into the LLC Agreement (as defined below); and
WHEREAS, the parties hereto desire to provide for the exchange of Common Units and corresponding surrender for cancellation of Class B Shares, as applicable for, in Pubco’s sole discretion as the Managing Member of the Company, either, (a) shares of Class A Common Stock (as defined below) or (b) cash, on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein made and other good and valuable consideration, the parties hereto hereby agree as follows:
DEFINITIONS AND USAGE
“Affiliated Transferee” means (i) in the case of any Holder that is an individual, any transferee of Units of such Holder that is (a) a Family Member of such Holder, (b) a trust, family-partnership or estate-planning vehicle for the benefit of such Holder and/or any of such Holder’s Family Members, (c) a charitable institution controlled by such Holder and/or such Holder’s Family Members, (d) an individual mandated under a qualified domestic relations order, (e) a legal or personal representative of such Holder and/or such Holder’s Family Member in the event of the death or disability thereof, or (f) otherwise an Affiliate of such Holder or (ii) in the case of any Holder that is a corporation, partnership, limited liability company or other entity, any transferee of Units of such Holder that is (w) a Family Member of the individual that controls a majority of the voting or economic interest in such Holder, (x) a trust, family-partnership or estate-planning vehicle for the benefit of such individual and/or any of its Family Members, (y) otherwise an Affiliate of such Holder or (z) in the case of a Sponsor Member, any investment fund managed, sponsored, controlled or advised by, or managed accounts of, General Atlantic LLC and any successor thereto or any of its Affiliates.
“Applicable Law” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority or Regulatory Agency that is binding upon or applicable to such Person or its assets, as amended unless expressly specified otherwise.
“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.
“Class A Common Stock” means Class A common stock, $0.00001 par value per share, of Pubco.
“Class B Common Stock” means Class B common stock, $0.00001 par value per share, of Pubco.
“Code” means the Internal Revenue Code of 1986.
“Common Unit” means a Common Unit (as such term is defined in the LLC Agreement).
“Deliverable Common Stock” means with respect to Paired Interests, Class A Common Stock.
“Employee Equity Agreements” means those Employee Equity Agreements, dated as of the date hereof, by and between Employee Holdco and the parties named therein.
“Employee Holdco” means EWC Management Holdco, LLC.
“Exchange Act” means the Securities Exchange Act of 1934.
“Exchange Date” means the date of effectiveness of an Exchange.
“Exchange Rate” means with respect to Paired Interests the number of shares of Class A Common Stock for which one Paired Interest is entitled to be Exchanged. On the date of this Agreement, the Exchange Rate for the purposes of the Paired Interests shall be one (1) share, subject to adjustment pursuant to Section 2.03 of this Agreement.
“Exchanging Holder” means a Holder effecting an Exchange pursuant to this Agreement.
“Fair Market Value” means with respect to any Exchange, the arithmetic average of the volume weighted average prices for a share of Class A Common Stock on the Principal Market on which the Class A Common Stock trades, as reported by Bloomberg, L.P., or its successor, for each of the five (5) consecutive full Trading Days ending on and including the last full Trading Day immediately prior to the related Exchange Date, subject to appropriate and equitable adjustment for any stock splits, reverse splits, stock dividends or similar events affecting the Class A Common Stock. If the Class A Common Stock no longer trades on a Principal Market, then the Fair Market Value shall be determined in good faith by a majority of the disinterested members of the board of directors of Pubco or a committee of disinterested directors of the board of directors of Pubco.
“Family Member” means any immediate family member of an individual, including parents, grandparents, lineal descendants, siblings or spouse of such individual, and lineal descendants of siblings of such individual or of such individual’s spouse.
“Governmental Authority” means any transnational, domestic or foreign federal, state or local governmental, regulatory or administrative authority, department, court, agency or official, including any political subdivision thereof.
“LLC Agreement” means the Fifth Amended and Restated Limited Liability Company Agreement of the Company, dated on or about the date hereof, as such agreement may be amended from time to time.
“Market Disruption Event” means a failure by the Principal Market to open for trading during its regular trading session.
“NASDAQ” means The Nasdaq Stock Market LLC.
“Paired Interest” means one Common Unit together with one share of Class B Common Stock, subject to adjustment pursuant to Section 2.03(a).
“Person” means any individual, firm, corporation, partnership, limited liability company, trust, estate, joint venture, Governmental Authority or other entity.
“Principal Market” means (i) NASDAQ if the Class A Common Stock is listed on NASDAQ, (ii) the principal U.S. national or regional securities exchange on which the Class A Common Stock is listed, if the Class A Common Stock is not listed on NASDAQ or (iii) the principal market on which the Class A Common Stock is then traded, if the Class A Common Stock is not listed on NASDAQ or any other U.S. national or regional securities exchange.
“Pubco Charter” means the Amended and Restated Certificate of Incorporation of Pubco.
“Registration Rights Agreement” means the Registration Rights Agreement by and among Pubco and the stockholders party thereto, dated on or about the date hereof.
“Regulatory Agency” means the United States Securities and Exchange Commission, Financial Industry Regulatory Authority, Inc., the Financial Services Authority, any non-U.S. regulatory agency and any other regulatory authority or body (including any state or provincial securities authority and any self-regulatory organization) with jurisdiction over the Company or any of its subsidiaries.
“Securities Act” means the United States Securities Act of 1933.
“Sponsor Member” means any of (i) General Atlantic Partners AIV (EW), LP, (ii) GAPCO AIV Interholdco (EW), LP, and (iii) any Affiliated Transferee to whom any of them transfers any of the Common Units.
“Tax Receivable Agreement” shall have the meaning given to such term in the LLC Agreement.
“Trading Day” means a day on which (i) trading in securities generally occurs on the Principal Market, (ii) a volume weighted average price for the Class A Common Stock is able to be calculated with respect to the Principal Market and (iii) there is no Market Disruption Event with respect to the Principal Market.
Term | Section |
Agreement | Preamble |
Company | Preamble |
4.03 | |
Exchange | 2.01 |
Exchange Agent | 2.02(a) |
Holder | Preamble |
Notice of Exchange | 2.02(a) |
Permitted Transferee | 4.01 |
Process Agent | 4.05(b) |
Pubco | Preamble |
Pubco Offer | Section 2.04 |
EXCHANGE
THE TRANSFER OF THESE SECURITIES HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION, AND MAY NOT BE SOLD OR TRANSFERRED OTHER THAN IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (OR OTHER APPLICABLE LAW), OR AN EXEMPTION THEREFROM.
REPRESENTATIONS AND WARRANTIES
MISCELLANEOUS
(a) if to Pubco, to:
European Wax Center Corporate Office
5830 Granite Pkwy
3rd Floor
Plano, TX 75024
Attention: Gavin O’Connor, Chief Legal Officer & Corporate Secretary
(b) if to the Company, to:
European Wax Center Corporate Office
5830 Granite Pkwy
3rd Floor
Plano, TX 75024
Attention: Gavin O’Connor, Chief Legal Officer & Corporate Secretary
(c) if to any Holder, to the address and other contact information set forth in the records of Pubco or the Company from time to time, or to such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. New York City time on a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt.
In the event that this Agreement is amended, whether or not the prior written consent of the relevant Sponsor Member or a majority in interest of such disproportionately affected Holder or Holders are required, the Company and Pubco shall make a copy of such amendment available to all Holders.
[signature pages follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first written above.
EUROPEAN WAX CENTER, INC.
By: /s/ Gavin O’Connor
Name: Gavin O’Connor
Title: Secretary
EWC VENTURES, LLC
By: European Wax Center, Inc.,
its managing member
By: /s/ Gavin O’Connor
Name: Gavin O’Connor
Title: Secretary
HOLDERS:
EWC MANAGEMENT HOLDCO, LLC
By: European Wax Center, Inc.,
its manager
By: /s/ Gavin O’Connor
Name: Gavin O’Connor
Title: Secretary
GAPCO AIV INTERHOLDCO (EW), L.P.
By: General Atlantic (SPV) GP, LLC,
its general partner
By: General Atlantic, L.P.,
its sole member
By: /s/ Michael Gosk
Name: Michael Gosk
Title: Managing Director
GENERAL ATLANTIC PARTNERS AIV (EW), L.P.
By: General Atlantic GenPar (EW), L.P.,
its general partner
By: General Atlantic (SPV) GP, LLC,
its general partner
By: General Atlantic, L.P.,
its sole member
By: /s/ Michael Gosk
Name: Michael Gosk
Title: Managing Director
EWC HOLDINGS, INC.
By: /s/ David Coba
Name: David Coba
Title: President
/s/ Sanjeev Khanna
Name: Sanjeev Khanna
/s/ Govind Agrawal
Name: Govind Agrawal
EXHIBIT A
[FORM OF]
NOTICE OF EXCHANGE
European Wax Center, Inc.
European Wax Center Corporate Office
5830 Granite Pkwy
3rd Floor
Plano, TX 75024
Attention: Gavin O’Connor, Chief Legal Officer & Corporate Secretary
EWC Ventures, LLC
European Wax Center Corporate Office
5830 Granite Pkwy
3rd Floor
Plano, TX 75024
Attention: Gavin O’Connor, Chief Legal Officer & Corporate Secretary
Reference is hereby made to the Exchange Agreement, dated as of [ ], 2021 (the “Exchange Agreement”), by and among European Wax Center, Inc., a Delaware corporation (“Pubco”), EWC Ventures, LLC, a Delaware limited liability company (the “Company”), and the holders of Common Units and shares of Class B Common Stock from time to time party hereto (each, a “Holder”). Capitalized terms used but not defined herein shall have the meanings given to them in the Exchange Agreement.
The undersigned desires to transfer to the Company the number of shares of Class B Common Stock plus Common Units set forth below (the “Paired Interests”) in exchange for, at the election of Pubco, in its capacity of the Managing Member of the Company, (i) shares of Class A Common Stock (the “Deliverable Common Stock”) to be issued in its name as set forth below or (ii) cash, in each case, in accordance with the terms of the Exchange Agreement.
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The undersigned hereby represents and warrants that (i) the undersigned has full legal capacity to execute and deliver this Notice of Exchange and to perform the undersigned’s obligations hereunder; (ii) this Notice of Exchange has been duly executed and delivered by the undersigned and is the legal, valid and binding obligation of the undersigned enforceable against it in accordance with the terms thereof or hereof, as the case may be, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and the availability of equitable remedies; (iii) the Paired Interests subject to this Notice of Exchange are being transferred to the Company free and clear of any pledge, lien, security interest, encumbrance, equities or claim; (iv) no consent, approval, authorization, order, registration or qualification of any third party or with any court or governmental agency or body having jurisdiction over the undersigned or the Paired Interests subject to this Notice of Exchange is required to be obtained by the undersigned for the transfer of such Paired Interests to the Company; and (v) the applicable representations and warranties made by the undersigned in Article III of the Exchange Agreement and that certain Subscription Agreement, dated as of [ ], by and between Pubco, the undersigned and the other subscribers listed therein/the undersigned’s Employee Equity Agreement will be true and correct as of the Exchange Date.
The undersigned hereby irrevocably constitutes and appoints any officer of Pubco as the attorney of the undersigned, with full power of substitution and resubstitution in the premises, to do any and all things and to take any and all actions that may be necessary to transfer to the Company the Paired Interests subject to this Notice of Exchange and to deliver to the undersigned the shares of Deliverable Common Stock or cash, as applicable, to be delivered in Exchange therefor.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice of Exchange to be executed and delivered by the undersigned or by its duly authorized attorney.
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EXHIBIT B
[FORM OF]
JOINDER AGREEMENT
This Joinder Agreement (“Joinder Agreement”) is a joinder to the Exchange Agreement, dated as of [ ], 2021 (the “Agreement”), among European Wax Center, Inc., a Delaware corporation (“Pubco”), EWC Ventures, LLC, a Delaware limited liability company (the “Company”), and the holders of Common Units and shares of Class B Common Stock from time to time party hereto (each, a “Holder”). Capitalized terms used but not defined in this Joinder Agreement shall have their meanings given to them in the Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such State that would result in the application of the laws of any other State. In the event of any conflict between this Joinder Agreement and the Agreement, the terms of this Joinder Agreement shall control.
The undersigned, having acquired shares of Class B Common Stock and Common Units, hereby joins and enters into the Agreement. By signing and returning this Joinder Agreement to Pubco, the undersigned (i) accepts and agrees to be bound by and subject to all of the terms and conditions of and agreements of a Holder contained in the Agreement, with all attendant rights, duties and obligations of a Holder thereunder and (ii) makes each of the representations and warranties of a Holder set forth in Section 3.02 of the Agreement as fully as if such representations and warranties were set forth herein. The parties to the Agreement shall treat the execution and delivery hereof by the undersigned as the execution and delivery of the Agreement by the undersigned and, upon receipt of this Joinder Agreement by Pubco and by the Company, the signature of the undersigned set forth below shall constitute a counterpart signature to the signature page of the Agreement.
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