| Item 1.01 | Entry into a Material Definitive Agreement. |
On December 3, 2021, Cushman & Wakefield of California, Inc. (“Cushman”), a wholly-owned subsidiary of Cushman & Wakefield plc (the “Company”), and Greystone Select Incorporated (“Greystone”) completed the previously announced strategic investment in Cushman Wakefield Greystone LLC, a newly formed Delaware limited liability company (“NewCo”), pursuant to that certain Contribution Agreement, dated October 19, 2021, by and between Cushman and Greystone (the “Contribution Agreement”), as further discussed in Item 2.01 below. In connection with the closing of the strategic investment, on December 3, 2021, Cushman, Greystone and NewCo entered into an Amended and Restated Limited Liability Company Agreement (the “LLC Agreement”).
As contemplated in the Contribution Agreement, Cushman and Greystone own 40% and 60% of the membership interests, respectively, in NewCo issued in respect of the Greystone Select I Business (as defined below), which interests are subject to certain transfer restrictions, among other limitations. In addition, prior to a transfer of all or any part of membership interests to a third party, each member must first offer such membership interests to the other member, subject to certain exceptions including transfer to an affiliate of the transferring member.
The LLC Agreement establishes a board of managers (“Board”) which shall be responsible for managing the business and affairs of NewCo in respect of Greystone Select I Business and shall consist of five individuals, of whom (i) three shall be designated by Greystone and (ii) two shall be designated by Cushman.
The Board may, by majority vote, designate one or more committees. Ordinary course decisions of the Board require simple majority consent. However, pursuant to the LLC Agreement, certain material decisions related to NewCo require the consent of Cushman, including, but not limited to, merger, consolidation, disposition of assets or other business combinations resulting in a change of control; sales of certain assets exceeding various defined thresholds; acquisition, merger or purchase of assets outside the ordinary course of business greater than $50 million or of a direct competitor of the Company; dissolution or winding up of NewCo; incurrence of debt greater than agreed-upon margin levels; removal of the chief executive officer of NewCo and appointment of a successor; and any amendment to the organizational documents of NewCo.
The LLC Agreement provides for customary drag-along rights for Greystone and customary tag-along, special transfer and registration rights for Cushman. In addition, the LLC Agreement provides for a right of first refusal for each of Cushman and Greystone in the event either entity intends to effectuate a permissible transfer of membership interests in NewCo.
As contemplated in the Contribution Agreement, Cushman and Greystone own 1% and 99% of the membership interests, respectively, in NewCo issued in respect of the Greystone Select II Business (as defined below). The LLC Agreement provides cross indemnity rights pursuant to which (a) Greystone Select II Business shall hold harmless and indemnify the Greystone Select I Business against losses incurred as the result of certain acts, omissions or liabilities of the Greystone Select II Business and (b) Greystone Select I Business shall hold harmless and indemnify the Greystone Select II Business against losses incurred as the result of certain acts, omissions or liabilities of the Greystone Select I Business.
The description of the, LLC Agreement contained in this Item 1.01 is qualified in its entirety by the full text of the LLC Agreement, which is filed as Exhibit 10.1 hereto and incorporated herein by reference (a substantially similar form of which was previously filed as an exhibit to the Contribution Agreement) .
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
On December 3, 2021, Cushman and Greystone completed the previously announced strategic investment in which Cushman contributed $500 million, subject to certain post-closing adjustments, in exchange for 40% of the equity interests of NewCo issued in respect of the Greystone Select I Business and (b) 1% of the equity interests of NewCo issued in respect of the Greystone Select II Business, pursuant to the Contribution Agreement. In turn, Greystone contributed to NewCo (a) certain of its origination, lending, investing, loan servicing and special servicing entities (the “Greystone Select I Business”) in exchange for 60% of the equity interests of NewCo issued in respect of the Greystone Select I Business and (b) certain of its lending and investing businesses (the “Greystone Select II Business”) in exchange for 99% of the equity interests of NewCo issued in respect of the Greystone Select II Business.
