Common use of Total Loss or sale Clause in Contracts

Total Loss or sale. If any Vessel is sold or otherwise is disposed of (whether in whole or in part) or suffers a Total Loss, the Facility shall be prepaid by an amount equal to the Facility Reduction Amount on the Facility Reduction Date. Such prepayments shall be applied in accordance with Clause 9.7 (Application of proceeds and reduction of Commitments). If the Facility Reduction Amount is higher than the Loans then outstanding, the Available Facility shall be reduced on the Facility Reduction Date in order to ensure that the aggregate amount prepaid and so reduced is equal to the Facility Reduction Amount. a) Following receipt of the Facility Reduction Amount, and subject to a closing procedure to be agreed between the Borrowers and the Security Agent (in its sole discretion), the Security Agent shall, unless otherwise specified in the Finance Documents, release (including taking any steps necessary to giving effect to such release) any Security relating to the relevant Vessel and release the Borrowers from their obligations under the Finance Documents in respect of such Vessel. The Security Agent (acting on behalf of the Lenders) shall further be obliged to release the Mortgage against the relevant Vessel when the Agent has received the Facility Reduction Amount. b) For the purposes of this Clause 8.1 the following definitions shall apply:

Total Loss or sale. a) If any Vessel is sold or otherwise is disposed of (whether in whole or in part) or suffers a Total Loss: (i) the Borrower may propose that another vessel (the “Replacement Vessel”) be financed under the Facility, and the Agent (acting on behalf of the Lenders) may (in the sole discretion of the Lenders) and subject to satisfaction of conditions precedent (to be set by the Agent on behalf of the Lenders) in respect of the Replacement Vessel consent to this; or (ii) the Facility shall be prepaid by an amount equal to the Facility Reduction Amount on the Facility Reduction Date. Such prepayments shall be applied in accordance with Clause 9.7 (Application of proceeds and reduction of Commitments). If the Facility Reduction Amount is higher than the Loans then outstanding, the Available Facility shall be reduced on a proportionate basis on the Facility Reduction Date in order to ensure that the aggregate amount prepaid and so reduced is equal to the Facility Reduction Amount. ab) Following receipt of the Facility Reduction Amount, and subject to a closing procedure to be agreed between the Borrowers Borrower and the Security Agent (in its sole discretion), the Security Agent shall, unless otherwise specified in the Finance Documents, release (including taking any steps necessary to giving effect to such release) any Security relating to the relevant Vessel and to release the Borrowers relevant Obligor from their its obligations under the Finance Documents in respect of such Vessel. The Security Agent (acting on behalf of the Lenders) shall further be obliged to release the Mortgage against the relevant Vessel when the Agent has received the Facility Reduction Amount. bc) For the purposes of this Clause 8.1 the following definitions shall apply: