Key assets clause: Copy, customize, and use instantly
Introduction
A key assets clause outlines the assets that are deemed critical to the company’s operations, value, or business model. It often provides protections regarding the sale, transfer, or encumbrance of these assets, ensuring that the parties involved maintain control over important assets that are integral to the company’s success.
Below are templates for key assets clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard key assets clause
This version covers the basic definition of key assets.
The [Company] agrees that the following assets are considered key assets, critical to its operations and future growth: [list of assets]. The [Company] shall not sell, lease, transfer, or otherwise dispose of these key assets without the prior written consent of the [Investor] or the Board of Directors.
Key assets clause with prohibition on asset sales
This version prohibits the sale of key assets.
The [Company] shall not sell, lease, transfer, or encumber any key assets, including but not limited to [list of key assets], without the prior written consent of the [Investor] or the Board of Directors, except in the event of a sale of the [Company] as a whole.
Key assets clause with valuation of key assets
This version includes the valuation of key assets.
The [Company] shall ensure that all key assets, including [list of key assets], are valued at least once every [X] years by an independent third-party appraiser, and the results shall be shared with the [Investor].
Key assets clause with right to approve asset disposal
This version includes approval rights for asset disposal.
The [Investor] shall have the right to approve any sale, lease, or transfer of key assets, including [list of key assets], and such approval shall not be unreasonably withheld.
Key assets clause with asset protection
This version includes protections for key assets.
The [Company] agrees to take all reasonable steps to protect its key assets, including [list of key assets], from loss, damage, or deterioration. The [Company] shall maintain insurance coverage for these assets at all times.
Key assets clause with right to pledge assets
This version includes the right to pledge assets.
The [Company] shall not pledge, mortgage, or grant any security interest over its key assets, including [list of key assets], without the prior written consent of the [Investor] or the Board of Directors.
Key assets clause with exclusion of certain assets
This version excludes certain assets from the definition.
The following assets are considered key assets of the [Company], and no assets outside of this list, such as [specific exclusions], shall be considered key assets for the purposes of this Agreement.
Key assets clause with asset maintenance obligations
This version includes obligations for asset maintenance.
The [Company] agrees to maintain and repair the key assets, including [list of key assets], in good working condition, ensuring their continued functionality throughout the term of this Agreement.
Key assets clause with approval for leasing assets
This version includes approval for leasing key assets.
The [Company] shall not lease any key assets, including [list of key assets], to any third party without the prior approval of the [Investor] or the Board of Directors.
Key assets clause with right to purchase key assets
This version includes a right to purchase.
The [Investor] shall have the right to purchase the key assets, including [list of key assets], if the [Company] chooses to sell or dispose of them, at a price determined by an independent appraisal.
Key assets clause with restricted use of key assets
This version restricts the use of key assets.
The [Company] shall not use the key assets, including [list of key assets], for purposes other than those expressly permitted in this Agreement or the [Company]'s ordinary course of business.
Key assets clause with asset transfer restrictions
This version restricts the transfer of key assets.
The [Company] agrees not to transfer any key assets, including [list of key assets], to any third party without the prior written consent of the [Investor], except in connection with a sale of the entire business.
Key assets clause with valuation adjustments
This version adjusts asset valuations.
The value of the key assets, including [list of key assets], shall be adjusted annually to reflect any changes in the market or operational value, and these adjusted values shall be incorporated into the [Company]'s financial statements.
Key assets clause with right to inspect assets
This version includes the right to inspect key assets.
The [Investor] or their designated representatives shall have the right to inspect the key assets of the [Company] at any time during normal business hours, with prior notice, to ensure proper maintenance and security.
Key assets clause with buyout option for key asset holder
This version provides a buyout option.
In the event of a dispute over the key assets, the [Investor] or the [Company] shall have the option to buy out the other party's interest in the key assets, at a price determined by an independent valuation.
Key assets clause with asset insurance requirements
This version includes insurance requirements.
The [Company] shall maintain insurance coverage on its key assets, including [list of key assets], to cover risks of loss or damage, with coverage amounts acceptable to the [Investor].
Key assets clause with restriction on asset encumbrances
This version restricts encumbrances on key assets.
The [Company] shall not place any liens, encumbrances, or security interests on the key assets, including [list of key assets], without the prior written consent of the [Investor].
Key assets clause with prohibition on selling key assets below market value
This version prohibits the sale of assets below market value.
The [Company] agrees not to sell or dispose of any key assets, including [list of key assets], for a price below their fair market value, as determined by an independent appraiser.
Key assets clause with right to reclaim key assets
This version allows reclaiming of key assets.
In the event of a breach of this Agreement by the [Investor] or the [Company], the non-breaching party shall have the right to reclaim key assets, including [list of key assets], at their fair market value.
Key assets clause with restrictions on cross-border transfers
This version restricts cross-border transfers.
The [Company] shall not transfer key assets, including [list of key assets], across national borders without the prior written consent of the [Investor], due to regulatory and operational concerns.
Key assets clause with ongoing monitoring of key assets
This version includes monitoring provisions.
The [Company] agrees to implement an ongoing monitoring system for its key assets, including [list of key assets], to ensure that they are properly maintained, protected, and insured.
Key assets clause with buyout option upon asset impairment
This version includes a buyout option upon impairment.
If any key asset, including [list of key assets], is impaired or rendered materially less valuable, the [Investor] shall have the right to require the [Company] to repurchase their shares at a price determined by the impaired asset’s adjusted value.
Key assets clause with restrictions on sublicensing of key assets
This version includes restrictions on sublicensing.
The [Company] shall not sublicense or transfer the use of any key assets, including [list of key assets], to any third party without the prior approval of the [Investor].
Key assets clause with provision for asset replacement
This version provides for asset replacement.
If any key asset, including [list of key assets], becomes obsolete, damaged beyond repair, or otherwise unusable, the [Company] shall replace it with an equivalent asset of comparable value and functionality.
Key assets clause with asset preservation obligations
This version includes asset preservation obligations.
The [Company] shall take all necessary steps to preserve the value and integrity of the key assets, including [list of key assets], and shall avoid any action that could cause deterioration or loss of value.
Key assets clause with rights to assign key assets
This version includes rights to assign key assets.
The [Investor] shall have the right to assign or transfer their interest in the key assets, including [list of key assets], to another party, subject to the [Company]’s prior approval and the terms outlined in this Agreement.
Key assets clause with asset revaluation after major events
This version provides for asset revaluation after major events.
In the event of a merger, acquisition, or other major business event, the [Company] agrees to have its key assets, including [list of key assets], revalued by an independent third-party appraiser.
Key assets clause with protection for key intellectual property
This version provides protection for key intellectual property.
The [Company] shall take appropriate legal steps to protect any key intellectual property, including patents, trademarks, and copyrights, and shall not transfer or license such intellectual property without the prior consent of the [Investor].
Key assets clause with repurchase of key assets if performance targets are not met
This version allows repurchase if performance targets are unmet.
If the [Company] fails to meet the performance targets outlined in this Agreement, the [Investor] shall have the right to require the [Company] to repurchase any key assets at their fair market value.
Key assets clause with prohibition on key asset disposal for [X] years
This version prohibits disposal for a set period.
The [Company] agrees not to sell, lease, or transfer any of the key assets, including [list of key assets], for [X] years from the date of this Agreement, except as part of a sale of the entire business.
Key assets clause with right to repurchase key assets upon change in shareholder structure
This version allows repurchase upon change in shareholder structure.
In the event of a change in the shareholder structure of the [Company], the [Company] shall have the right to repurchase any key assets held by the [Investor] or any new shareholders that are deemed critical to the [Company]’s operations.
Key assets clause with inclusion of third-party stakeholders in key asset decisions
This version involves third-party stakeholders.
The [Company] agrees to involve third-party stakeholders, including [list of stakeholders], in any decisions regarding the sale or transfer of key assets, to ensure that their interests are protected.
Key assets clause with restriction on licensing key assets
This version restricts the licensing of key assets.
The [Company] shall not license any of its key assets, including [list of key assets], to any third party without the prior written consent of the [Investor] or the Board of Directors.
Key assets clause with valuation tied to business performance
This version ties asset valuation to business performance.
The valuation of the [Company]'s key assets, including [list of key assets], shall be adjusted based on the performance metrics of the [Company], including revenue growth and profitability.
Key assets clause with obligation to maintain key assets
This version includes the obligation to maintain key assets.
The [Company] agrees to maintain and protect its key assets, including [list of key assets], in good working condition, with regular servicing and updates as necessary to ensure their ongoing functionality.
Key assets clause with buyback upon asset impairment
This version allows buyback if key assets are impaired.
If any of the [Company]'s key assets, including [list of key assets], are impaired or damaged beyond repair, the [Investor] shall have the right to request that the [Company] repurchase their shares at the fair market value of the impaired asset.
Key assets clause with preemptive rights for asset sale
This version includes preemptive rights for asset sales.
In the event that the [Company] intends to sell any of its key assets, including [list of key assets], the [Investor] shall have the preemptive right to purchase the asset at a price determined by an independent valuation.
Key assets clause with restrictions on encumbrances
This version includes restrictions on encumbrances of key assets.
The [Company] shall not encumber any of its key assets, including [list of key assets], with any liens or security interests without the prior written consent of the [Investor].
Key assets clause with repurchase option for key asset holder
This version allows a repurchase option for the key asset holder.
If the [Company] undergoes a material change in ownership, the key asset holder may require the [Company] to repurchase the assets at fair market value, as determined by an independent appraiser.
Key assets clause with provision for annual asset revaluation
This version includes provisions for annual asset revaluation.
The value of the [Company]'s key assets, including [list of key assets], shall be revalued annually by an independent appraiser to reflect any changes in market conditions or asset value.
Key assets clause with repurchase upon exit of controlling shareholder
This version includes buyback upon the exit of a controlling shareholder.
In the event that the controlling shareholder of the [Company] exits, the [Company] shall have the option to repurchase the shares held by the [Investor] at the fair market value of the shares, based on the value of the key assets.
Key assets clause with buyback in case of loss of intellectual property
This version includes buyback if key intellectual property is lost.
If the [Company] loses any key intellectual property, including [list of IP assets], that was critical to the business, the [Investor] shall have the right to request that the [Company] repurchase their shares at the adjusted fair market value.
Key assets clause with right to approve asset transfer
This version includes approval rights for asset transfers.
The [Investor] shall have the right to approve any transfer of key assets, including [list of key assets], and such approval shall not be unreasonably withheld.
Key assets clause with restriction on asset distribution
This version restricts the distribution of key assets.
The [Company] shall not distribute or transfer any key assets, including [list of key assets], to any third party without the prior written consent of the [Investor].
Key assets clause with protection against asset depletion
This version includes protections against asset depletion.
The [Company] agrees to take reasonable steps to protect its key assets, including [list of key assets], and ensure that such assets are not depleted or used in ways that materially reduce their value.
Key assets clause with repurchase right if business valuation drops
This version includes a repurchase right tied to business valuation.
If the valuation of the [Company] drops by more than [X]% due to a loss in key assets, the [Investor] shall have the right to request that the [Company] repurchase their shares at a price adjusted for the loss of asset value.
Key assets clause with prohibition on asset collateralization
This version prohibits collateralization of key assets.
The [Company] agrees not to use any of its key assets, including [list of key assets], as collateral for any loan or debt without the prior written consent of the [Investor].
Key assets clause with rights to use key assets for specific purposes
This version includes rights to use key assets for specific purposes.
The [Investor] shall have the right to use the key assets, including [list of key assets], solely for the purposes defined in this Agreement, and not for any other purpose without the prior written consent of the [Company].
Key assets clause with automatic asset transfer upon certain events
This version includes automatic transfer of key assets.
In the event of a merger, acquisition, or dissolution of the [Company], the ownership of all key assets, including [list of key assets], shall automatically transfer to the new entity or surviving party.
Key assets clause with buyback option for departing shareholders
This version includes buyback for departing shareholders.
In the event that a shareholder departs from the [Company], the [Company] shall have the option to repurchase their shares, including those related to any key assets, at a price determined by an independent valuation.
Key assets clause with protection for intellectual property
This version provides protection for intellectual property.
The [Company] agrees to protect its intellectual property, including patents, trademarks, and copyrights, and shall not transfer or license any of these key assets without the prior written consent of the [Investor].
Key assets clause with requirement for asset insurance
This version requires asset insurance.
The [Company] agrees to maintain insurance on all key assets, including [list of key assets], to cover risks of loss, theft, or damage, with coverage amounts acceptable to the [Investor].
Key assets clause with annual inventory of key assets
This version includes an annual inventory requirement.
The [Company] agrees to conduct an annual inventory of its key assets, including [list of key assets], and provide a report to the [Investor] outlining the status, value, and condition of such assets.
Key assets clause with restriction on key asset sale to competitors
This version restricts asset sale to competitors.
The [Company] shall not sell or transfer any key assets, including [list of key assets], to any competitor of the [Company] without the prior written consent of the [Investor].
Key assets clause with buyback in case of divestiture
This version allows buyback in case of divestiture.
In the event of the [Company]'s divestiture of a portion of its business, the [Investor] shall have the right to request that the [Company] repurchase their shares at the fair market value, adjusted for any loss in value due to the divestiture.
Key assets clause with prohibition on key asset sale under certain conditions
This version prohibits asset sale under certain conditions.
The [Company] shall not sell, lease, or transfer any of its key assets, including [list of key assets], if such action would materially harm the [Company] or reduce the value of the [Investor]'s investment.
Key assets clause with repurchase in case of key asset destruction
This version allows repurchase in case of asset destruction.
If any key asset, including [list of key assets], is destroyed or becomes irreparable, the [Investor] shall have the right to request that the [Company] repurchase their shares at a price determined by the fair market value of the key asset.
Key assets clause with right to relocate key assets
This version allows relocation of key assets.
The [Investor] agrees that the [Company] may relocate its key assets, including [list of key assets], provided that the new location does not materially affect the value or accessibility of the assets.
Key assets clause with special provisions for intangible assets
This version includes provisions for intangible assets.
In addition to tangible assets, the [Company] agrees to treat its intangible assets, including [list of intangible assets], as key assets, with the same protections and restrictions as those placed on tangible key assets.
Key assets clause with right of first refusal for asset purchase
This version provides a right of first refusal for key asset purchases.
In the event that the [Company] decides to sell any of its key assets, including [list of key assets], the [Investor] shall have the right of first refusal to purchase the asset at the price offered by any third-party buyer.
Key assets clause with right to approve asset management decisions
This version grants approval rights for asset management.
The [Investor] shall have the right to approve any management decisions regarding the maintenance, disposition, or encumbrance of the [Company]'s key assets, including [list of key assets].
Key assets clause with buyback in case of corporate restructuring
This version allows buyback in case of corporate restructuring.
If the [Company] undergoes any significant restructuring, including the reorganization or downsizing of the business, the [Investor] shall have the right to request that the [Company] repurchase their shares, especially if key assets are impacted by the restructuring.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.