Common use of Capital Items Clause in Contracts

Capital Items. Except for real or personal property (i) included in a previously approved budget or (ii) costing less than the ceiling amount established by the Management Committee, Operator shall prepare and submit to Partnership a forecast of the cost of such property it proposes to acquire in the name of Partnership which, under any applicable accounting rules and regulations, might be capitalized. Upon approval of such forecast by Partnership, Operator shall have authority to purchase such property in Partnership's name without further approval or action by Partnership. To the extent that (i) Operator owns property necessary or desirable for the operation and maintenance of the Line which under any applicable accounting rules and regulations, might be capitalized, (ii) Operator in its sole discretion is willing to transfer such property for consideration to Partnership, (iii) such property can be transferred by Operator to Partnership free and clear of all prior liens and encumbrances, and (iv) Partnership approves of such transfer Operator may so transfer such property to Partnership and charge Partnership the fair market value thereof on the date of transfer.