Common use of Title XI Reserve Fund Net Income Clause in Contracts

Title XI Reserve Fund Net Income. The Agreement shall provide that within 105 days after the end of its ac- counting year, the Company will com- pute its net income attributable to the operation of the Vessel(s) that were constructed, reconstructed, recondi- tioned or refinanced with Title XI fi- nancing assistance (Title XI Reserve Fund Net Income). The computation utilizes a ratio expressed as a percent- age, and applies this percentage to the Company’s total net income after taxes. The numerator of the ratio is be the total original capitalized cost of all Company Vessels (whether leased or owned) which were constructed, recon- structed, reconditioned or refinanced with the assistance of Guarantees. The denominator shall be the total original capitalized cost of all the Company’s fixed assets. In the case of Shipyard Project, the Agreement shall provide that within 105 days after the end of its accounting year, the Company shall submit its audited financial statements showing its net cash flow in a manner acceptable to us, in lieu of any other computation of Reserve Fund Net In- come specified in this section for Ves- sels. The net income after taxes, com- puted in accordance with GAAP, will be adjusted as follows: (1) The depreciation expense applica- ble to the accounting year shall be added back. (2) There shall be subtracted: (i) An amount equal to the principal amount of debt required to be paid or redeemed, and actually paid or re- deemed by the Company (other than from the Title XI Reserve Fund) during the year; and (ii) The principal amount of Obliga- tions retired or paid (as defined in the Security Agreement), prepaid or re- deemed, in excess of the required re- demptions or payments which may be used by the Company as a credit against future required redemptions or other required payments with respect to the Obligations.