Introductory Note
On January 28, 2021, TPG Pace Tech Opportunities Corp., a Cayman Islands exempted company (“TPG Pace”), TPG Pace Tech Merger Sub LLC, a Delaware limited liability company (“Nerdy Merger Sub”), TCV VIII (A) VT, Inc., a Delaware corporation (“TCV Blocker”), LCSOF XI VT, Inc., a Delaware corporation (“Learn Blocker” and, together with TCV Blocker, the “Blockers”), TPG Pace Blocker Merger Sub I Inc., a Delaware corporation (“Blocker Merger Sub I”), TPG Pace Blocker Merger Sub II Inc., a Delaware corporation (“Blocker Merger Sub II” and, together with Blocker Merger Sub I, the “Blocker Merger Subs” and, together with Nerdy Merger Sub, the “Merger Subs”), Live Learning Technologies LLC, a Delaware limited liability company (“Nerdy”), and, solely for the purposes described therein, certain entities affiliated with the Blockers (“Blocker Holders”) entered into a Business Combination Agreement (as amended, the “Business Combination Agreement,” and the transactions contemplated thereby, the “Business Combination”), pursuant to which, among other things and subject to the terms and conditions contained therein, (i) Nerdy Merger Sub will merge with and into Nerdy (the “Merger”), with Nerdy surviving the Merger, (ii) simultaneously with the Merger, Blocker Merger Sub I will merge with and into TCV Blocker, with TCV Blocker surviving such merger, and Blocker Merger Sub II will merge with and into Learn Blocker, with Learn Blocker surviving such merger (each a “Reverse Blocker Merger” and, together, the “Reverse Blocker Mergers”), and (iii) immediately following the Merger and the Reverse Blocker Mergers, each surviving Blocker will merge with and into Nerdy Inc. (each a “Direct Blocker Merger” and, together, the “Direct Blocker Mergers”), with Nerdy Inc. surviving each Direct Blocker Merger.
Item 1.01 Entry into a Material Definitive Agreement
On July 14, 2021, TPG Pace, the Merger Subs, the Blockers, Nerdy and the Blocker Holders entered into the Second Amendment to Business Combination Agreement (the “Second Amendment”), pursuant to which, among other things and subject to the terms and conditions contained therein, the parties thereto (a) adopted a new form of Second Amended and Restated Limited Liability Company Agreement of Nerdy, LLC, a Delaware limited liability company (“OpCo”), in which the parties further refined the governance structure of OpCo to provide that in the event that TPG Pace holds less than a majority of the outstanding limited liability company units in OpCo (“OpCo Units”), the Board shall be fixed at five (5) Managers and such Managers shall be designated as follows: (i) two (2) Persons shall be individuals designated by TPG Pace; (ii) one (1) Person shall be designated by Charles Cohn so long as an entity controlled by Charles Cohn remains a member; (iii) one (1) Person shall be designated by TCV VIII, L.P. or its affiliates, so long as TCV VIII, L.P. remains a member; and (iv) one (1) Person shall be designated by Davis VT LLC or its affiliates, so long as Davis VT LLC remains a member; provided that if any of an entity controlled by Charles Cohn, TCV VIII, L.P. or Davis VT LLC cease to be members, the manager designated with respect to clause (ii), (iii) or (iv) of this sentence, as applicable, shall instead be designated by the member holding the next greatest number of OpCo Units after TPG Pace and any other members then holding manager designation rights, (b) revised the six month lock-up provision to provide that, to the extent that redemptions in connection with the Business Combination are in excess of the number of shares necessary for TPG Pace to retain in excess of 50.0% of OpCo and any holder of Nerdy securities (“Nerdy Holder”) elects to receive shares of TPG Pace Class A Common Stock instead of shares of Nerdy Inc. Class B Common Stock and OpCo Units at closing of the Business Combination (“Closing”) solely to the extent necessary for TPG Pace to retain in excess of 50.0% of OpCo at Closing, such Nerdy Holder shall be permitted to sell a number of shares of TPG Pace Class A Common Stock necessary to cover the cost of income taxes incurred by such member in connection with the receipt of such shares of TPG Pace Class A Common Stock at Closing at any time and (c) amended the Outside Date (as defined in the Business Combination Agreement) from the date that is 180 days after the date of the Business Combination Agreement to August 31, 2021.
The foregoing description of the Second Amendment does not purport to be complete and is qualified in its entirety by the terms and conditions of the Second Amendment, a copy of which is filed as Exhibit 2.3 to this Current Report on Form 8-K and is incorporated herein by reference.
