Common use of Transfers to a Related Person Clause in Contracts

Transfers to a Related Person. There is no Change in Control event when there is a transfer to an entity that is controlled by the shareholders of the transferring corporation immediately after the transfer. A transfer of assets by a corporation is not treated as a change in the ownership of such assets if the assets are transferred to: a. A shareholder of the corporation (immediately before the asset transfer) in exchange for or with respect to its stock; b. An entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the corporation; c. A person, or more than one person acting as a group, that owns, directly or indirectly, 50 percent or more of the total value or voting power of all the outstanding stock of the corporation; or d. An entity, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person described in paragraph (c). For purposes of this paragraph and except as otherwise provided, a person’s status is determined immediately after the transfer of the assets. For example, a transfer to a corporation in which the transferor corporation has no ownership interest before the transaction, but which is a majority owned subsidiary of the transferor corporation after the transaction is not treated as a change in the ownership of the assets of the transferor corporation.

Transfers to a Related Person. There is no Change in Control event when there is a transfer to an entity that is controlled by the shareholders of the transferring corporation immediately after the transfer. A transfer of assets by a corporation is not treated as a change in the ownership of such assets if the assets are transferred to: a. (i) A shareholder of the corporation (immediately before the asset transfer) in exchange for or with respect to its stock; b. (ii) An entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the corporation; c. (iii) A person, or more than one person acting as a group, that owns, directly or indirectly, 50 percent or more of the total value or voting power of all the outstanding stock of the corporation; or d. (iv) An entity, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person described in paragraph (ciii). For purposes of this paragraph and except as otherwise provided, a person’s status is determined immediately after the transfer of the assets. For example, a transfer to a corporation in which the transferor corporation has no ownership interest before the transaction, but which is a majority owned subsidiary of the transferor corporation after the transaction is not treated as a change in the ownership of the assets of the transferor corporation.