Tanks Under Construction Clause Samples
The "Tanks Under Construction" clause defines the terms and conditions that apply to storage tanks or similar facilities that are in the process of being built and are not yet completed or operational. Typically, this clause outlines the responsibilities of the parties regarding construction timelines, quality standards, and risk allocation during the construction phase. For example, it may specify who bears the risk of loss or damage before the tanks are finished, or set requirements for inspections and certifications prior to use. The core function of this clause is to clarify obligations and manage risks associated with assets that are not yet fully constructed, thereby preventing disputes and ensuring a smooth transition from construction to operational use.
Tanks Under Construction. Tanks 2, 9, 15, 18 and 154 at the Tyler Refinery (the “Under Construction Tanks”) are under construction and, as of the date of this Agreement, such construction is incomplete. The Under Construction Tanks are owned by the Seller and have not been transferred to the Buyer prior to or contemporaneously with the Closing. Following the Closing, the Seller agrees that it shall complete the construction of the Under Construction Tanks in an expeditious and diligent manner and at the Seller’s sole cost and expense, and the Buyer shall be entitled to participate in all stages of planning, scheduling, implementing and oversight of the construction. Upon completion of the construction of each Under Construction Tank, the Seller shall take such further actions and execute such further documents as may be necessary or reasonably requested by the Buyer to convey title to it, free and clear of all Encumbrances, other than Permitted Encumbrances, to the Buyer. Prior to the conveyance of an Under Construction Tank as described in the prior sentence, risk of loss for the Under Construction Tank shall remain with the Seller, and any loss, destruction or damage to such tank shall not relieve the Seller of the obligation to diligently construct and convey such tank as described herein. Notwithstanding the foregoing, the Seller shall not be entitled to any consideration for conveyance of the Under Construction Tanks other than the consideration received under Section 2.5, and conveyance of the Under Construction Tanks shall not affect the Seller’s obligations under the Throughput and Tankage Agreement. Following the conveyance of each Under Construction Tank, the terms “Transferred Assets” and “Tankage” shall be deemed to include such Tank, as applicable, for all purposes, including (i) breaches of representations and warranties hereunder and any indemnification to which the Buyer is entitled as HOU02:1274360 16 a result thereof, and (ii) any Ancillary Documents containing provisions or defined terms that refer to or derive their meaning from the definition of “Transferred Assets” under this Agreement.
Tanks Under Construction. Following the Closing, VTDC agrees that it will complete or cause to be completed, the construction of tanks 211 and 212 that are owned by Valero Houston (the “Under Construction Tanks”) in an expeditious, diligent and good and workmanlike manner and at VTDC’s sole cost and expense, and the Partnership shall be entitled to participate in all stages of planning, scheduling, implementing and oversight of construction. Any Losses, Claims and Encumbrances that may arise out of the performance of such work on the Under Construction Tanks shall constitute Partnership Indemnified Costs, except to the extent they (a) arise out of the acts, omissions or negligence of any of the Partnership Indemnified Parties or (b) constitute Special Damages (other than Special Damages of the types identified in clauses (a) and (b) of the definition of Partnership Indemnified Costs). Neither the Contributors nor their Affiliates shall be entitled to any additional consideration by reason of VTDC’s undertakings in this Section 6.6, other than the Total Consideration, nor shall VTDC’s undertakings in this Section 6.6 affect the Contributors’ or their Affiliates’ obligations under the Houston Services Schedule.