A "Change of Control" clause defines the conditions under which a shift in ownership or management of a company occurs, typically outlining scenarios like mergers, acquisitions, or significant transfers of shares. This clause ensures that both parties are aware of the triggers that could alter the contractual relationship or obligations under the agreement.
“Change of Control” — (a) Anadarko shall cease to, directly or indirectly, Control the General Partner, or (b) the General Partner shall cease to be the sole general partner of the Borrower; provided, that, notwithstanding the foregoing, neither a Permitted MLP General Partner Removal nor a Permitted Transaction (as defined below) shall constitute a Change of Control; provided, further, that following a Permitted MLP General Partner Removal or a Permitted Transaction, “Change of Control” shall mean an event or series of events by which: A. at any time prior to consummation of a General Partner IPO, if applicable, either (i) the Permitted Holders shall cease to beneficially own and control more than 50% on a fully diluted basis of the voting interest in the Equity Interests of the General Partner or (ii) the General Partner shall cease to be the sole general partner of the Borrower; B. at any time on or after consummation of a General Partner IPO, either (i) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), but excluding any employee benefit plan of such person or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) other than Permitted Holders, becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a “person” or “group” shall be deemed to have “beneficial ownership” of all Equity Interests that such “person” or “group” has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of thirty-five percent (35%) or more on a fully diluted basis of the voting interest in the Equity Interests of the General Partner or (ii) the General Partner shall cease to be the sole general partner of the Borrower; or C. a majority of the seats (other than vacant seats) on the board of directors (or other equivalent governing body) of the MLP General Partner shall not constitute Continuing Directors.
2.2Definition of Change of Control. Section 1.1 of the Subscription Agreement shall be amended by inserting the following clarifications in the proviso to the definition of "Change of Control": 1. inserting "(i)" immediately after the words "provided, that"; and 2.inserting the words "and (ii) notwithstanding clause (3) above, no Change of Control shall occur as a result of any direct or indirect transfer of the Capital Stock of Parent (or any direct or indirect parent of Parent) (it being understood that such transfer is not subject to the provisions of this Agreement)" immediately after the words "shall not be a Change of Control", so as amended the proviso will read as follows: "provided, that (i) the preceding clauses (1) through (4) in the definition of “Change of Control” shall apply in respect of the Servicer only if the Servicer is an Affiliate of the Company; and provided further a Bona-fide IPO shall not be a Change of Control and (ii) notwithstanding clause (3) above, no Change of Control shall occur as a result of any direct or indirect transfer of the Capital Stock of Parent (or any direct or indirect parent of Parent) (it being understood that such transfer is not subject to the provisions of this Agreement). For the avoidance of doubt, the Holding Company must continue to own 100% of Company and Company must continue to own 100% of its Obligors, as provided herein."
Change of Control. Section 2(g) of the Plan shall be amended and restated in its entirety to amend the definition of Change of Control as follows: ““Change of Control” means the closing of a transaction that is (i) a sale of all or substantially all of the assets of the Company (other than in connection with financing transactions, or sale and leaseback transactions) to a Person that is not a Controlled Affiliate (a “Third Party”), (ii) a sale, series of sales or merger or other transactions resulting in more than 50% of the voting stock of the Company or of any company directly or indirectly controlling the Company being held by a Third Party, (iii) a transaction or provision that gives a Third Party the right to appoint a majority of the Board of Directors of the Company or of any company directly or indirectly controlling the Company or (iv) the liquidation or dissolution of the Company with respect to which there are or were distributable assets.”
Appendix B Definition of Change of Control and Related Terms For purposes of this Agreement, a “Change of Control” means the occurrence of any of the following events: (i) the date any one person, or more than one person acting as a group, acquires, whether by merger, consolidation or otherwise, ownership of the capital stock of the Company that constitutes more than fifty percent (50%) of the total voting power of the outstanding capital stock of the Company, (ii) the date any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions, (iii) the date any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing thirty percent (30%) or more of the total voting power of the stock of the Company, or (iv) the date a majority of members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election. For purposes of this definition of Change of Control, the term “person” shall mean and include an individual, a trust, an estate, a partnership, a limited liability company, an association, a company or corporation, other than the Company or any employee benefit plan(s) sponsored by the Company. For purposes of this definition of Change of Control, the term “gross fair market value” means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. Notwithstanding the foregoing, a Change of Control shall not occur unless such transaction constitutes a change in the ownership of the Company, a change in the ownership of a substantial portion of the Company’s assets or a change in the effective control of the Company under Code Section 409A and the Treasury Regulations promulgated thereunder.
Definition of Change of Control. The following circumstances are considered a Change of Control: a. (i) in case of a sale, lease, swap or other transfer of all or a major part of the assets of the Company in the course of a legal transaction or a succession of legal transactions, with the exception of any transfers as referred to above that would result in the Company either directly or indirectly holding 50% or more of the voting rights of the company or companies to which the relevant assets are transferred, or if the Company has the power to decide on the use of 50% or more of the voting rights of such companies; in both cases including powers under the law of obligations (by contract, agreements, covenants, relationships or otherwise); (ii) in case of a fusion or merger of the Company, irrespective of the approval of the executive board, with the exception of a fusion or merger that would result in the outstanding shares of the Company immediately prior to such a fusion or merger continuing to account for more than 50% of the total voting rights of the Company or the accepting company or parent company of such company immediately after such fusion or merger (either because they retain their voting rights or are converted into vote-bearing shares of the legal entity or parent company of such company); or (iii) in case of liquidation of the Company with the exception of a liquidation following dissolution as a consequence of insolvency or similar proceedings.
“Change of Control” shall mean (i) any individual, entity, or group (including within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that, for purposes of this Section 1(b), the following acquisitions shall not constitute a Change of Control: (I) any acquisition of Outstanding Company Common Stock or Outstanding Company Voting Securities directly from the Company that is approved by the Incumbent Board (defined below), (II) any acquisition of Outstanding Company Common Stock or Outstanding Company Voting Securities by the Company, (III) any acquisition of Outstanding Company Common Stock or Outstanding Company Voting Securities by any employee benefit plan (or related trust) sponsored or maintained by the Company or any affiliate thereof, or (IV) any acquisition of Outstanding Company Common Stock or Outstanding Company Voting Securities in a transaction that is part of a Business Combination that complies with Sections 1(b)(iii)(A), 1(b)(iii)(B), and 1(b)(iii)(C) below; (ii) individuals who, as of the date hereof, constitute the board of directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual was a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the board of directors; (iii) consummation of a reorganization, merger, statutory share exchange, or consolidation or similar transaction involving the Company, a sale or other disposition of all or substantially all of the assets of the Company (including by sale, reorganization, merger, statutory share exchange, or consolidation or similar transaction involving the shares of all or substantially all of the Company’s subsidiaries), or the acquisition of assets or securities of another entity by the Company or any of its subsidiaries (each, a “Business Combination”), in each case unless, following such Business Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination, and (B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) of the entity resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such entity, except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement and at the time of the action of the board of directors providing for such Business Combination; or (iv) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
“Change of Control” means the occurrence of any of the following: (1) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or more series of related transactions, of all or substantially all of the Guarantor’s assets and the assets of the Guarantor’s Subsidiaries, taken as a whole, to any person, other than the Guarantor or one of its Subsidiaries; or (2) the Guarantor becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by any person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), in a single transaction or in a related series of transactions, by way of acquisition, merger, amalgamation, consolidation, transfer, conveyance or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of more than 50% of the total voting power of the voting stock of the Guarantor, other than by virtue of the imposition of a holding company, or the reincorporation of the Guarantor in another jurisdiction, so long as the beneficial owners of the voting stock of the Guarantor immediately prior to such transaction hold a majority of the voting power of the voting stock of such holding company or reincorporation entity immediately thereafter. Any disposition of a “disposed group” permitted pursuant to Section 5.01(b) of the Indenture will not constitute a Change of Control pursuant to clause (1) of the first sentence of this definition.
A change of control refers to a significant shift in the ownership or management structure of a company. It often involves the acquisition of the majority of a company’s voting shares or a merger, where a new entity gains control over the company’s assets and operations. This change can impact the strategic direction, financial stability, and operational management of the organization. It is a critical clause found in many corporate contracts and agreements to protect parties involved against unforeseen shifts in business conditions.
A change of control clause should be used when entering into agreements where the control of one of the parties involved could materially affect the terms or execution of the contract. It is particularly relevant in:
When drafting a change of control clause, clarity and precision are crucial. A basic clause should cover:
Definition of Change of Control: Clearly specify what constitutes a change of control, such as the acquisition of a certain percentage of shares, a merger, or changes in board composition.
Notification Requirement: State any obligations to notify other parties in advance of the change or as soon as reasonably possible.
Consequences and Rights Triggered: Outline what the change initiates, such as the right for termination, renegotiation, or acceleration of certain payments or obligations.
Example:
“For the purposes of this Agreement, a ‘Change of Control’ shall mean any event where a person or group acquires more than 50% of the voting equity interests of [Company Name], or the ability to appoint a majority of the board of directors. In such an event, [Party] shall be notified within 30 days and shall have the option to terminate this Agreement with a written notice.”
Change of control clauses are commonly incorporated into various types of business and legal contracts, including:
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