Common use of Transfers to a Related Person Clause in Contracts

Transfers to a Related Person. There is no Change in Control event with respect to subsection (iii) when there is a transfer by a Corporation 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: (1) A shareholder of the Corporation (immediately before the asset transfer) in exchange for or with respect to its stock; (2) An entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the Corporation; (3) 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 (4) 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 subsection (3). For purposes of this subsection (C) 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.