Common use of Title XI Reserve Fund Clause in Contracts

Title XI Reserve Fund. (a) The Secretary has established a Deposit Fund with the U.S. Department of Treasury pursuant to Section 1109 of the Act and in accordance with the terms and conditions of the Depository Agreement (herein called the "Title XI Reserve Fund"). (1) Within one hundred and five (105) days after the end of each fiscal year of K-Sea LP (each, a "Fiscal Year"), K-Sea LP shall compute the consolidated net income of K-Sea LP, K-Sea OLP and their respective consolidated subsidiaries (the "Consolidated Group") attributable to the operation of the Vessels ("Title XI Reserve Fund Net Income"). This computation requires the multiplication of the Consolidated Group's Adjusted Net Income After Taxes by a fraction with a numerator composed of the total original capitalized cost of the Vessels (prorated if any such Vessel has been operated for a period of less than a full year) and a denominator composed of the total original capitalized cost of all the Consolidated Group's fixed assets. "Adjusted Net Income After Taxes", for the purposes hereof, shall mean consolidated net income after taxes computed in accordance with generally accepted accounting principles, adjusted as follows: (A) The depreciation expense applicable to the accounting year shall be added back; (B) There shall be subtracted an amount equal to the required major maintenance (shipyard) expenditures actually paid by the Consolidated Group during the year, to the extent such expenditures have not already been expensed by the Consolidated Group for financial reporting purposes; (C) There shall be subtracted an amount equal to the principal amount of debt required to be paid or redeemed, and actually paid or redeemed by the Consolidated Group during the year; and the principal amount of Obligations Retired or Paid, prepaid or redeemed, in excess of the required Redemptions or payments which may be used by the Consolidated Group as a credit against future required Redemptions or other required payments with respect to the Obligations, but excluding payments from the Title XI Reserve Fund and the Title XI Escrow Fund. (2) Promptly after the computation of the Title XI Reserve Fund Net Income by the Consolidated Group: (A) For each Vessel owned by the Consolidated Group, then from the Title XI Reserve Fund Net Income for such Vessel there shall be deducted, annually, an amount (pro rated for a period of less than a full Fiscal Year) which is ten percent (10%) of the Consolidated Group's aggregate original equity investment in such Vessel, as specified in Attachment A; (B) The Partnerships shall, unless otherwise approved by the Secretary in writing, transmit to the Secretary for the Secretary's prompt deposit into the Title XI Reserve Fund an amount equal to fifty percent (50%) of the balance of the Title XI Reserve Fund Net Income remaining after the above deductions; (C) Irrespective of the Partnerships' deposit requirements for the Title XI Reserve Fund, the Partnerships shall not be required to make any deposits in the Title XI Reserve Fund if (i) the Obligations and the related Secretary's Note with respect to the Vessels shall have been satisfied and discharged and if the Partnerships shall have paid or caused to be paid all other sums secured under the Security Agreement or the Mortgage, (ii) all of the Guarantees on the Outstanding Obligations shall have been terminated pursuant to the Security Agreement, or (iii) the amount (including any securities at current market value) in the Title XI Reserve Fund is equal to, or in excess of fifty percent (50%) of the principal amount of the Outstanding Obligations of each Series; (D) The Partnerships shall deliver to the Secretary at the time of each deposit for the Title XI Reserve Fund pursuant to Section 2(b)(2)(B), and any deposits required under the Security Agreement, a statement of an independent certified public accountant (who may be the regular auditors for either of the Partnerships) stating that such deposit has been computed in accordance with Section 2(b)(2)(B), (and the Security Agreement, if applicable) and showing the pertinent calculations; (E) In addition, the Partnerships shall deliver to the Secretary, within one hundred and five (105) days after the end of each Fiscal Year of the Partnerships, a statement by such certified public accountant stating (i) the total amount of all deposits which were required to be so deposited into the Title XI Reserve Fund for such Fiscal Year (and showing the pertinent calculations), or (ii) that no such deposit was required to be made for such Fiscal Year (and showing the pertinent calculations) and that at the end of such Fiscal Year no adjustments pursuant to Section 2(b)(2)(F) were required to be made (and, if such adjustments were required to be made, stating the reasons therefor); (F) The computation of all deposits required by this Section 2 shall be made on the basis of information available to the Partnerships at the time of each such deposit. Each such deposit shall be subject to adjustments from time to time in the event and to the extent that the same would be required or permitted by mistakes or omissions, additional information becoming available to the Partnerships, or judicial or administrative determinations made subsequent to the making of such deposits. (3) Notwithstanding the foregoing, the Partnerships shall not be required to make any deposits into the Title XI Reserve Fund if the income of the Vessels (which would cause such deposit under Section 2(b)(2) above) is earned during the Partnerships' Fiscal Year at the end of which the Partnerships are in compliance with the financial requirements indicated in Section 8(b)(i), (ii) and (iii) hereof.

Title XI Reserve Fund. (a) The Secretary has established a Deposit Fund with the U.S. Department of Treasury pursuant to Section 1109 of the Act and in accordance with the terms and conditions of the Depository Agreement (herein called the "“Title XI Reserve Fund"”). (1) Within one hundred and five (105) days after the end of each fiscal year of K-Sea LP (each, a "“Fiscal Year"”), K-Sea LP shall compute the consolidated net income of K-Sea LP, K-Sea OLP and their respective consolidated subsidiaries (the "“Consolidated Group"”) attributable to the operation of the Vessels ("“Title XI Reserve Fund Net Income"”). This computation requires the multiplication of the Consolidated Group's ’s Adjusted Net Income After Taxes by a fraction with a numerator composed of the total original capitalized cost of the Vessels (prorated if any such Vessel has been operated for a period of less than a full year) and a denominator composed of the total original capitalized cost of all the Consolidated Group's ’s fixed assets. "“Adjusted Net Income After Taxes"”, for the purposes hereof, shall mean consolidated net income after taxes computed in accordance with generally accepted accounting principles, adjusted as follows: (A) The depreciation expense applicable to the accounting year shall be added back; (B) There shall be subtracted an amount equal to the required major maintenance (shipyard) expenditures actually paid by the Consolidated Group during the year, to the extent such expenditures have not already been expensed by the Consolidated Group for financial reporting purposes; (C) There shall be subtracted an amount equal to the principal amount of debt required to be paid or redeemed, and actually paid or redeemed by the Consolidated Group during the year; and the principal amount of Obligations Retired or Paid, prepaid or redeemed, in excess of the required Redemptions or payments which may be used by the Consolidated Group as a credit against future required Redemptions or other required payments with respect to the Obligations, but excluding payments from the Title XI Reserve Fund and the Title XI Escrow Fund. (2) Promptly after the computation of the Title XI Reserve Fund Net Income by the Consolidated Group: (A) For each Vessel owned by the Consolidated Group, then from the Title XI Reserve Fund Net Income for such Vessel there shall be deducted, annually, an amount (pro rated for a period of less than a full Fiscal Year) which is ten percent (10%) of the Consolidated Group's ’s aggregate original equity investment in such Vessel, as specified in Attachment A; (B) The Partnerships shall, unless otherwise approved by the Secretary in writing, transmit to the Secretary for the Secretary's ’s prompt deposit into the Title XI Reserve Fund an amount equal to fifty percent (50%) of the balance of the Title XI Reserve Fund Net Income remaining after the above deductions; (C) Irrespective of the Partnerships' ’ deposit requirements for the Title XI Reserve Fund, the Partnerships shall not be required to make any deposits in the Title XI Reserve Fund if (i) the Obligations and the related Secretary's ’s Note with respect to the Vessels shall have been satisfied and discharged and if the Partnerships shall have paid or caused to be paid all other sums secured under the Security Agreement or the Mortgage, (ii) all of the Guarantees on the Outstanding Obligations shall have been terminated pursuant to the Security Agreement, or (iii) the amount (including any securities at current market value) in the Title XI Reserve Fund is equal to, or in excess of fifty percent (50%) of the principal amount of the Outstanding Obligations of each Series; (D) The Partnerships shall deliver to the Secretary at the time of each deposit for the Title XI Reserve Fund pursuant to Section 2(b)(2)(B), and any deposits required under the Security Agreement, a statement of an independent certified public accountant (who may be the regular auditors for either of the Partnerships) stating that such deposit has been computed in accordance with Section 2(b)(2)(B), (and the Security Agreement, if applicable) and showing the pertinent calculations; (E) In addition, the Partnerships shall deliver to the Secretary, within one hundred and five (105) days after the end of each Fiscal Year of the Partnerships, a statement by such certified public accountant stating (i) the total amount of all deposits which were required to be so deposited into the Title XI Reserve Fund for such Fiscal Year (and showing the pertinent calculations), or (ii) that no such deposit was required to be made for such Fiscal Year (and showing the pertinent calculations) and that at the end of such Fiscal Year no adjustments pursuant to Section 2(b)(2)(F) were required to be made (and, if such adjustments were required to be made, stating the reasons therefor); (F) The computation of all deposits required by this Section 2 shall be made on the basis of information available to the Partnerships at the time of each such deposit. Each such deposit shall be subject to adjustments from time to time in the event and to the extent that the same would be required or permitted by mistakes or omissions, additional information becoming available to the Partnerships, or judicial or administrative determinations made subsequent to the making of such deposits. (3) Notwithstanding the foregoing, the Partnerships shall not be required to make any deposits into the Title XI Reserve Fund if the income of the Vessels (which would cause such deposit under Section 2(b)(2) above) is earned during the Partnerships' ’ Fiscal Year at the end of which the Partnerships are in compliance with the financial requirements indicated in Section 8(b)(i), (ii) and (iii) hereof.

Title XI Reserve Fund. (a) The Secretary has established shall establish a Deposit Fund with the U.S. Department Treasury of Treasury the United States pursuant to Section 1109 of the Act Title XI and in accordance with the terms and conditions of the Depository Agreement (herein called the "“Title XI Reserve Fund"”). (1) Within one hundred and five (105) 105 days after the end of each fiscal year of K-Sea LP (eachthe Assuming Shipowner, a "Fiscal Year"), K-Sea LP the Assuming Shipowner shall compute the consolidated its net income of K-Sea LP, K-Sea OLP and their respective consolidated subsidiaries (the "Consolidated Group") attributable to the operation of the Vessels Vessel ("“Title XI Reserve Fund Net Income"”). This computation requires The net income attributable to the multiplication operation of the Consolidated Group's Adjusted Net Income After Taxes by a fraction with a numerator composed of the total original capitalized cost of the Vessels (prorated if any such Vessel has been operated for a period of less than a full year) and a denominator composed of the total original capitalized cost of all the Consolidated Group's fixed assets. "Adjusted Net Income After Taxes"Vessel, for the purposes hereof, shall mean consolidated net income after taxes as provided for in Section 8(a)(1)(A), computed in accordance with generally accepted accounting principles, shall be adjusted as follows: (A) The depreciation expense applicable to the accounting year shall be added back;. (B) There shall be subtracted an amount equal to the required major maintenance (shipyard) expenditures actually paid by the Consolidated Group during the year, to the extent such expenditures have not already been expensed by the Consolidated Group for financial reporting purposes; (C) There shall be subtracted an amount equal to the principal amount of debt required to be paid or redeemed, and actually paid or redeemed by the Consolidated Group Assuming Shipowner during the year; and the principal amount of Obligations Retired or Paid, prepaid or redeemed, in excess of the required Redemptions or payments which that may be used by the Consolidated Group Assuming Shipowner as a credit against future required Redemptions or other required payments with respect to the Obligations, but excluding payments from the Title XI Reserve Fund and the Title XI Escrow Fund. (2) Promptly Unless (i) the Long-Term Debt of the Assuming Shipowner is equal to or less than its Long-Term Debt as of the date of this Financial Agreement, which is set forth in Attachment A hereto, and (ii) the Net Worth of the Assuming Shipowner meets the requirements set forth in Attachment A hereto, then promptly after the computation of the Title XI Reserve Fund Net Income by the Consolidated GroupAssuming Shipowner: (A) For each If the Vessel is owned by the Consolidated GroupAssuming Shipowner, then from the Title XI Reserve Fund Net Income for such the Vessel there shall be deducted, annually, an amount (pro rated for a period of less than a full Fiscal Yearfiscal year) which is ten percent (10%) % of the Consolidated Group's Assuming Shipowner’s aggregate original equity investment in such said Vessel, as specified in Attachment A;A. (B) The Partnerships Assuming Shipowner shall, unless otherwise approved by the Secretary in writing, transmit to the Secretary for the Secretary's ’s prompt deposit into the Title XI Reserve Fund an amount equal to fifty 50 percent (50%) of the balance of the Title XI Reserve Fund Net Income income remaining after the above deductions;. (C) Irrespective of the Partnerships' Assuming Shipowner’s deposit requirements for the Title XI Reserve Fund, the Partnerships Assuming Shipowner shall not be required to make any deposits in for the Title XI Reserve Fund if (i) the Obligations and the related Secretary's ’s Note with respect to the Vessels Vessel shall have been satisfied and discharged and if the Partnerships Assuming Shipowner shall have paid or caused to be paid all other sums secured under the Security Agreement or the Mortgage, (ii) all of the Guarantees on the Outstanding Obligations shall have been terminated pursuant to the Security Agreement, or (iii) the amount (including any securities at current market value) in the Title XI Reserve Fund is equal to, or in excess of fifty percent (50%) % of the principal amount of the Outstanding Obligations of each SeriesObligations; (D) The Partnerships Assuming Shipowner shall deliver to the Secretary at the time of each deposit for the Title XI Reserve Fund pursuant to Section 2(b)(2)(B), and any deposits required under the Security Agreement, a statement of an independent certified public accountant (who may be the regular auditors for either of the PartnershipsAssuming Shipowner) stating that such deposit has been computed in accordance with Section 2(b)(2)(B), (and the Security Agreement, if applicable) and showing the pertinent calculations;. (E) In addition, the Partnerships Assuming Shipowner shall deliver to the Secretary, within one hundred and five (105) 105 days after the end of each Fiscal Year of the Partnershipsits fiscal year, a statement by such certified public accountant stating (i) the total amount of all deposits which were required to be so deposited into the Title XI Reserve Fund by the Assuming Shipowner for such Fiscal Year fiscal year (and showing the pertinent calculations), or (ii) that no such deposit was required to be made for such Fiscal Year fiscal year (and showing the pertinent calculations) and that at the end of such Fiscal Year fiscal year no adjustments pursuant to Section 2(b)(2)(F) were required to be made (and, if such adjustments were required to be made, stating the reasons therefor);. (F) The computation of all deposits required by this Section 2 shall be made on the basis of information available to the Partnerships Assuming Shipowner at the time of each such deposit. Each such deposit shall be subject to adjustments from time to time in the event and to the extent that the same would be required or permitted by mistakes or omissions, additional information becoming available to the PartnershipsAssuming Shipowner, or judicial or administrative determinations made subsequent to the making of such deposits. (3) Notwithstanding the foregoing, the Partnerships shall not be required to make any deposits into the Title XI Reserve Fund if the income of the Vessels (which would cause such deposit under Section 2(b)(2) above) is earned during the Partnerships' Fiscal Year at the end of which the Partnerships are in compliance with the financial requirements indicated in Section 8(b)(i), (ii) and (iii) hereof.