Asset disposal clause: Copy, customize, and use instantly
Introduction
An asset disposal clause outlines the terms and conditions under which a company may dispose of its assets, whether through sale, transfer, lease, or any other method. It provides clarity on the process, including any restrictions or requirements that must be met before such transactions can occur.
Below are templates for asset disposal clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard asset disposal clause
This version covers the basic terms for asset disposal.
The [Company] shall not dispose of any assets, including [list of key assets], without the prior written consent of the [Investor] or the Board of Directors, except in the ordinary course of business. Any sale or transfer of assets must be at fair market value.
Asset disposal clause with restrictions on disposal
This version includes restrictions on asset disposal.
The [Company] shall not dispose of any key assets, including [list of key assets], unless such disposal is necessary for the operation of the business, and the proceeds from the sale shall be used to further the objectives of the [Company].
Asset disposal clause with approval requirement
This version includes approval for asset disposal.
The [Company] agrees to obtain the prior written approval of the [Investor] or the Board of Directors before disposing of any significant asset, including [list of key assets], whether through sale, lease, or transfer.
Asset disposal clause with right of first refusal
This version includes a right of first refusal.
In the event that the [Company] decides to dispose of any 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.
Asset disposal clause with post-disposal reporting
This version includes post-disposal reporting.
The [Company] agrees to provide a detailed report of any asset disposal, including [list of assets], to the [Investor] within [X] days of the transaction, outlining the terms, proceeds, and impact on the [Company].
Asset disposal clause with environmental consideration
This version includes environmental considerations.
The [Company] shall ensure that any disposal of assets, including [list of assets], complies with all applicable environmental laws and regulations, and shall take necessary measures to minimize environmental impact during the disposal process.
Asset disposal clause with approval for disposal method
This version includes approval for disposal methods.
The [Company] shall obtain the prior written consent of the [Investor] or the Board of Directors before selecting the method of disposal for any key assets, including [list of assets], including sale, lease, or donation.
Asset disposal clause with requirement for fair market value
This version requires disposal at fair market value.
The [Company] shall dispose of any assets, including [list of assets], at fair market value, as determined by an independent appraiser, unless otherwise agreed upon by the [Investor].
Asset disposal clause with buyback rights
This version includes buyback rights for the [Investor].
The [Investor] shall have the right to buy back any assets disposed of by the [Company] within [X] months of the disposal, at the original purchase price, plus any necessary adjustments.
Asset disposal clause with third-party disposal restrictions
This version restricts third-party disposal.
The [Company] shall not sell, lease, or transfer any key assets, including [list of assets], to any third party without the prior written consent of the [Investor] or the Board of Directors.
Asset disposal clause with proceeds use requirements
This version outlines the use of proceeds from asset disposal.
The [Company] agrees that any proceeds from the disposal of assets, including [list of assets], shall be used exclusively to further the business objectives of the [Company] and shall not be distributed to shareholders or used for personal purposes.
Asset disposal clause with approval for asset sale price
This version includes approval for asset sale price.
The [Investor] or the Board of Directors must approve the sale price of any disposed assets, including [list of assets], to ensure it aligns with the fair market value or the agreed-upon price in the Agreement.
Asset disposal clause with tax consideration
This version includes tax considerations.
The [Company] shall consider the tax implications of disposing of any assets, including [list of assets], and shall ensure that the sale or transfer minimizes any adverse tax impact for the [Company] or the [Investor].
Asset disposal clause with asset category exclusions
This version excludes certain assets from disposal requirements.
The following assets, including [specific exclusions], shall not be considered for disposal under this clause and may be disposed of at the discretion of the [Company] without prior approval.
Asset disposal clause with repurchase right
This version includes the right to repurchase disposed assets.
In the event that the [Company] disposes of any assets, including [list of assets], the [Investor] shall have the right to repurchase such assets at the fair market value, provided the buyback is exercised within [X] months.
Asset disposal clause with restriction on sale of strategic assets
This version restricts the sale of strategic assets.
The [Company] agrees not to dispose of any strategic assets, including [list of key strategic assets], without prior written consent from the [Investor], as these assets are critical to the [Company]’s long-term success.
Asset disposal clause with post-disposal audit
This version includes an audit after asset disposal.
Following the disposal of any key assets, including [list of assets], the [Company] agrees to submit to an independent audit to confirm that the asset was disposed of according to the terms of this Agreement and to ensure proper accounting of the transaction.
Asset disposal clause with notice requirement
This version includes a notice requirement.
The [Company] agrees to provide the [Investor] with at least [X] days' written notice before disposing of any key assets, including [list of assets], to allow the [Investor] time to evaluate the disposal terms.
Asset disposal clause with mandatory competitive bidding process
This version requires a competitive bidding process.
The [Company] shall ensure that any disposal of key assets, including [list of assets], follows a competitive bidding process to maximize the sale price, and the [Investor] shall be involved in the selection of bidders.
Asset disposal clause with protection of intellectual property
This version includes protections for intellectual property.
In the event of the disposal of any intellectual property assets, including [list of IP assets], the [Company] shall ensure that any buyer or transferee agrees to protect the intellectual property in accordance with applicable laws and the terms of this Agreement.
Asset disposal clause with restriction on transfer of valuable assets
This version includes a restriction on valuable assets.
The [Company] shall not transfer or dispose of any valuable assets, including [list of valuable assets], to a third party without the prior approval of the [Investor], unless the transfer is part of a larger sale of the [Company].
Asset disposal clause with specified disposal timeline
This version includes a specified disposal timeline.
The [Company] agrees to dispose of any non-essential assets, including [list of assets], within [X] months of the date of this Agreement, unless an extension is mutually agreed upon in writing by the [Investor].
Asset disposal clause with restriction on asset disposal during financial downturn
This version restricts asset disposal during a downturn.
The [Company] agrees not to dispose of any key assets, including [list of assets], during a financial downturn or when the market value of the assets is lower than the fair market value, unless the [Investor] consents in writing.
Asset disposal clause with requirement for disposal report
This version includes a requirement for a disposal report.
After the disposal of any key assets, including [list of assets], the [Company] agrees to provide the [Investor] with a detailed report outlining the asset's value, the disposal method, and the final transaction terms.
Asset disposal clause with consent for asset lease
This version includes consent for asset leasing.
The [Company] may lease any of its key assets, including [list of key assets], to third parties only with the prior written consent of the [Investor], provided such leases do not negatively affect the value of the assets.
Asset disposal clause with alternative asset transfer option
This version provides an alternative to disposal.
The [Company] may transfer key assets, including [list of key assets], to a third party, provided the [Investor] is given the option to acquire the asset at the agreed-upon sale price before the transfer takes place.
Asset disposal clause with right to approve buyer
This version includes approval for the buyer of key assets.
The [Company] agrees not to sell or transfer any key assets, including [list of key assets], to any buyer that the [Investor] deems unacceptable, and must obtain the [Investor]’s written approval before finalizing any transaction.
Asset disposal clause with obligation to protect employee-related assets
This version includes protections for employee-related assets.
The [Company] shall not dispose of any employee-related assets, including pension funds, stock options, or employment contracts, without the prior written consent of the [Investor], as these assets are crucial for employee retention.
Asset disposal clause with repurchase in case of asset failure
This version includes repurchase if an asset fails.
If any key asset, including [list of assets], fails to perform according to its expected use or causes significant operational disruptions, the [Investor] shall have the right to require the [Company] to repurchase such asset at a price determined by an independent appraisal.
Asset disposal clause with prohibition on sale to competitors
This version prohibits the sale of assets to competitors.
The [Company] agrees not to sell or dispose of any of its key assets, including [list of key assets], to any direct competitor of the [Company], without the prior written consent of the [Investor].
Asset disposal clause with restriction on asset lease for non-usage
This version includes restrictions on leasing unused assets.
If any key assets, including [list of assets], are not in use for a period of [X] months, the [Company] may lease such assets to a third party, but only with the prior written consent of the [Investor].
Asset disposal clause with anti-dilution protection during asset transfer
This version includes anti-dilution protection.
If the [Company] disposes of any key assets, including [list of assets], in a manner that dilutes the value of the [Investor]'s shares, the [Company] shall offer anti-dilution protection to the [Investor], adjusting their equity interest accordingly.
Asset disposal clause with non-compete during asset transfer
This version includes a non-compete provision during asset transfer.
The [Company] agrees that during any sale, lease, or transfer of its key assets, including [list of key assets], the buyer or recipient shall not engage in any business that competes directly with the [Company] for a period of [X] years.
Asset disposal clause with right of first refusal for employees
This version provides a right of first refusal for employees.
If the [Company] decides to sell any key assets, including [list of key assets], employees who are directly involved with the asset shall have the right of first refusal to purchase the asset on the same terms as offered by third-party buyers.
Asset disposal clause with protection for trade secrets
This version includes protections for trade secrets.
The [Company] shall not dispose of or transfer any assets related to trade secrets, including intellectual property or confidential business information, without the prior written consent of the [Investor], and must ensure the buyer agrees to maintain confidentiality.
Asset disposal clause with valuation based on EBITDA
This version values assets based on EBITDA.
The disposal price for any key assets, including [list of key assets], shall be based on the [Company]’s EBITDA (earnings before interest, taxes, depreciation, and amortization) for the preceding [X] years, as determined by an independent financial expert.
Asset disposal clause with limited right to dispose of assets
This version limits the right to dispose of assets.
The [Company] agrees that it shall only dispose of key assets, including [list of key assets], in the event of a business acquisition, bankruptcy, or other extraordinary circumstances, and shall obtain the [Investor]’s prior approval in all other cases.
Asset disposal clause with an option for deferred sale
This version includes a deferred sale option.
The [Company] may defer the sale of key assets, including [list of key assets], for a period of [X] years if necessary, and the proceeds from the sale shall be used to fund the [Company]’s growth or for reinvestment into the business.
Asset disposal clause with buyer’s obligations
This version includes buyer’s obligations upon asset purchase.
The [Company] shall require that any buyer of its key assets, including [list of key assets], agree to uphold the same environmental, employee, and operational standards as the [Company], as outlined in this Agreement.
Asset disposal clause with conditions for asset disposal in the event of a sale
This version specifies conditions for asset disposal in the event of a sale.
If the [Company] undergoes a sale or merger, the [Investor] shall have the right to approve any asset disposals, including [list of key assets], and such disposals shall only occur if they align with the strategic goals of the [Company].
Asset disposal clause with requirements for asset audit
This version includes requirements for an asset audit.
Prior to the disposal of any key assets, including [list of key assets], the [Company] shall conduct a full audit of the asset's condition, value, and remaining useful life, and provide the [Investor] with the audit results.
Asset disposal clause with right to approve the terms of asset sale
This version includes approval rights for asset sale terms.
The [Investor] shall have the right to approve the terms of the sale or transfer of any key assets, including [list of key assets], including the terms of payment, warranties, and representations made by the buyer.
Asset disposal clause with restriction on sale to affiliated parties
This version restricts asset sales to affiliated parties.
The [Company] shall not sell or transfer any of its key assets, including [list of key assets], to any affiliate or related party without the prior written consent of the [Investor], to avoid conflicts of interest.
Asset disposal clause with requirement for asset condition report
This version includes a condition report requirement.
Before disposing of any key assets, including [list of key assets], the [Company] shall provide a detailed report on the condition of the asset, including any damage, repairs, or updates made to the asset.
Asset disposal clause with buyout clause if asset becomes non-functional
This version allows buyout if the asset becomes non-functional.
If any key asset, including [list of key assets], becomes non-functional or obsolete, the [Investor] shall have the right to require the [Company] to repurchase the asset at the price initially paid for the asset or its depreciated value.
Asset disposal clause with post-disposal non-compete clause
This version includes a non-compete clause after disposal.
If the [Company] disposes of any key assets, including [list of key assets], the [Investor] agrees to a non-compete clause for a period of [X] years in relation to the business conducted with the disposed assets.
Asset disposal clause with mandatory public auction
This version mandates a public auction for asset disposal.
In the event of the disposal of any key assets, including [list of key assets], the [Company] shall hold a public auction for the sale of such assets to ensure transparency and maximize the sales price.
Asset disposal clause with requirement for asset insurance during disposal
This version requires insurance during disposal.
The [Company] agrees to maintain insurance on all key assets, including [list of key assets], throughout the disposal process, ensuring the assets are covered against any loss or damage during this period.
Asset disposal clause with asset recovery rights
This version includes recovery rights.
If any asset, including [list of key assets], is sold or transferred to a third party, and the [Investor] believes that such transfer has caused harm to the [Company], the [Investor] shall have the right to recover the asset or its equivalent value from the buyer.
Asset disposal clause with retention of right to intellectual property
This version retains intellectual property rights.
In the event of the disposal of any key assets, including [list of intellectual property assets], the [Company] shall retain all rights to the intellectual property related to those assets, including patents, trademarks, and copyrights.
Asset disposal clause with limitation on disposal of tangible assets
This version limits the disposal of tangible assets.
The [Company] agrees not to dispose of any tangible assets, including machinery, inventory, or real property, without obtaining prior approval from the [Investor] or the Board of Directors.
Asset disposal clause with requirement for environmental compliance
This version includes environmental compliance requirements.
The [Company] shall ensure that all asset disposals, including [list of assets], comply with applicable environmental laws and regulations and that no environmental harm results from the disposal process.
Asset disposal clause with asset disposal approval by independent party
This version includes approval by an independent party.
The [Company] shall obtain approval for the disposal of any key assets, including [list of key assets], from an independent third-party advisor or appraiser to ensure the assets are sold for their fair market value.
Asset disposal clause with sales proceeds allocation
This version specifies the allocation of proceeds.
The [Company] agrees that any proceeds from the sale of key assets, including [list of key assets], shall be allocated as follows: [percentage] to the [Investor] and the remaining to the [Company] for reinvestment in business operations.
Asset disposal clause with warranty for undisclosed liabilities
This version includes warranties regarding undisclosed liabilities.
The [Company] warrants that any key assets sold, including [list of assets], are free from undisclosed liabilities or encumbrances, and the [Investor] shall be compensated for any liabilities that arise post-sale.
Asset disposal clause with buyback if sale price falls below appraised value
This version allows buyback if the sale price is too low.
If the [Company] disposes of any key asset, including [list of key assets], for a price that is lower than the appraised fair market value, the [Investor] shall have the right to require the [Company] to repurchase the asset at the appraised price.
Asset disposal clause with restriction on disposal of customer contracts
This version includes a restriction on disposing of customer contracts.
The [Company] shall not dispose of any customer contracts, including [list of contracts], without obtaining prior written consent from the [Investor], as these contracts are integral to the company’s ongoing revenue streams.
Asset disposal clause with buyback after asset devaluation
This version allows buyback after asset devaluation.
If the value of any key asset, including [list of key assets], declines by more than [X]% over a [Y]-year period, the [Investor] may require the [Company] to repurchase the asset at the devalued price.
Asset disposal clause with repurchase if buyer fails to meet obligations
This version includes repurchase rights if the buyer defaults.
In the event the buyer of any key asset, including [list of key assets], fails to fulfill the obligations under the sale agreement, the [Investor] may request that the [Company] repurchase the asset at the agreed-upon price.
Asset disposal clause with approval for strategic asset sales
This version includes approval for the sale of strategic assets.
The [Company] shall obtain the prior written approval of the [Investor] before disposing of any key strategic assets, including [list of strategic assets], as these are vital to the [Company]'s business model.
Asset disposal clause with obligation to replace disposed assets
This version requires the replacement of disposed assets.
If any key asset, including [list of key assets], is disposed of by the [Company], the [Company] agrees to replace the asset with a similar asset of equal or greater value within [X] months.
Asset disposal clause with notice of impending sale to [Investor]
This version includes a notice requirement before asset sale.
The [Company] shall provide the [Investor] with written notice of its intention to sell or dispose of any key assets, including [list of assets], at least [X] days before the proposed sale or transfer.
Asset disposal clause with requirement to maintain asset condition until sale
This version requires asset maintenance until sale.
The [Company] agrees to maintain the condition of its key assets, including [list of key assets], in good working order until the completion of any sale or transfer to a third party.
Asset disposal clause with right of first negotiation
This version grants the right of first negotiation.
Before disposing of any key assets, including [list of key assets], the [Company] shall first offer the [Investor] the right to negotiate the terms of the sale or transfer.
Asset disposal clause with restrictions on asset removal
This version restricts asset removal before disposal.
The [Company] agrees not to remove or otherwise damage any key assets, including [list of key assets], before the completion of the sale, transfer, or disposal process.
Asset disposal clause with reporting obligations after asset sale
This version includes reporting obligations after the asset sale.
The [Company] shall provide the [Investor] with a detailed report of any asset sale, including [list of assets], including the terms of the sale, the proceeds, and the impact on the business.
Asset disposal clause with obligation to preserve business value
This version includes preservation of business value.
The [Company] agrees that the disposal of key assets, including [list of key assets], will not result in a material reduction in the value of the [Company] or harm its ability to continue operations.
Asset disposal clause with tax indemnification
This version includes tax indemnification provisions.
The [Company] shall indemnify the [Investor] against any taxes, penalties, or liabilities incurred as a result of the disposal of key assets, including [list of assets], and shall ensure that any sale complies with applicable tax laws.
Asset disposal clause with limitation on sale to competitors
This version limits sale to competitors.
The [Company] shall not dispose of any of its key assets, including [list of key assets], to any competitor of the [Company] without the prior written consent of the [Investor], to avoid conflicts of interest.
Asset disposal clause with provisions for asset depreciation
This version includes provisions for asset depreciation.
The [Company] agrees that any key asset, including [list of key assets], disposed of before its expected lifespan shall be valued with respect to its depreciation, and the sale price shall reflect the asset’s depreciated value.
Asset disposal clause with asset disposal for strategic reasons
This version allows asset disposal for strategic reasons.
The [Company] may dispose of any key assets, including [list of key assets], for strategic reasons such as business realignment or to raise capital, subject to the approval of the [Investor].
Asset disposal clause with approval for off-market transactions
This version includes approval for off-market transactions.
The [Investor] shall have the right to approve any sale or transfer of key assets, including [list of key assets], that occurs off-market or outside of typical market channels.
Asset disposal clause with right to return proceeds from asset sale
This version includes a right to return the proceeds.
The [Company] agrees to return the proceeds from the sale of any key assets, including [list of key assets], to the [Investor] if the sale does not meet the conditions set forth in this Agreement.
Asset disposal clause with protection against asset impairment during sale
This version protects against asset impairment.
The [Company] agrees not to impair the value of key assets, including [list of key assets], during the process of sale, and any impairment will result in a price adjustment in favor of the [Investor].
Asset disposal clause with asset disposal review
This version includes a review of asset disposal.
The [Company] agrees to undergo a review of any proposed asset sale, including [list of key assets], with an independent third party to ensure the sale meets market standards and is not detrimental to the [Company] or the [Investor].
Asset disposal clause with conditions for asset disposal upon liquidation
This version includes conditions for disposal during liquidation.
In the event of liquidation, the [Company] agrees to dispose of any key assets, including [list of key assets], in accordance with applicable liquidation laws, and the proceeds will be used to satisfy any outstanding obligations to the [Investor].
Asset disposal clause with fair market value consideration for asset sales
This version requires fair market value for asset sales.
The [Company] agrees that any disposal of key assets, including [list of assets], shall be done at fair market value, as determined by an independent appraiser, and in accordance with industry standards.
Asset disposal clause with repurchase if asset sale harms business
This version allows repurchase if asset sale harms the business.
If the sale of any key asset, including [list of key assets], is found to harm the [Company]’s business or strategic direction, the [Investor] shall have the right to require the [Company] to repurchase the asset at a fair market value.
Asset disposal clause with consent for related asset sales
This version includes consent for related asset sales.
The [Investor] shall have the right to approve the sale or transfer of any key assets, including [list of related assets], that are considered ancillary or integral to the core business operations of the [Company].
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.