In exchange for their respective contributions, at closing:
- The Company will hold approximately 25% of the membership interests in, and will be the managing member of, the Operating Subsidiary, and
- Tiptree will hold approximately 75% of the membership interests in the Operating Subsidiary plus shares of Class B common stock of the Company, which shares will have voting rights but no economic rights. Upon redemption of each unit of membership interest redeemed by Tiptree, one share of Class B common stock of Care will be redeemed for no consideration.
- All currently outstanding shares of common stock of Care will be renamed Class A common stock, without any change in the economic or voting rights of such shares.
The percentages above include certain warrants, options and restricted stock units at Care and Tiptree that are expected to be outstanding at closing.
In connection with the transaction, Tiptree intends to privately offer to qualified Tiptree limited partners the right to receive shares of Care common stock currently owned by Tiptree, in exchange for such limited partners' proportionate interests in Tiptree. Such shares also have registration rights pursuant to a registration rights agreement between Care and Tiptree.
Consummation of the transactions contemplated by the contribution agreement is subject to standard closing conditions, including accuracy of representations and warranties, compliance with pre-closing covenants and absence of any material adverse change, as well as the affirmative vote of a majority of the shares of outstanding voting common stock of Care (which includes the shares of voting common stock owned by Tiptree, which intends to vote all of its shares in favor of the transaction) and the outstanding limited partnership interests of Tiptree, and receipt of certain third-party consents. Care and Tiptree expect that, if the transaction closes as contemplated, the Company would become a taxable corporation retroactive from the closing date to
January 1, 2013
About Tiptree Financial Partners, L.P.
Formed in 2007, Tiptree Financial Partners, L.P. is a diversified financial services holding company. Through its consolidated operating subsidiaries, Tiptree currently operates in the following sectors: real estate, insurance, corporate and tax exempt credit and asset management. It is primarily owned by a diverse group of major financial institutions.
For more information on Tiptree please call (646) 388-5931.