Common use of Fixed and floating charge Clause in Contracts

Fixed and floating charge. The charge created under this Agreement is a fixed charge 3.7 Maintain Collateral: The Customer will maintain all Collateral in good order and repair,‌ in relation to Other Property. However, if that charge is not legally and fully effective as a fixed charge then, for so long as and to the extent it may not be so legally and fully effective, that charge is a floating charge until such time as it becomes a fixed charge by virtue of this clause. Any floating charge created under this Agreement will become a fixed charge:‌ (a) automatically, without the need for any notice or action by the Secured Party, immediately prior to or, if that would not result in the fixed charge being legally and fully effective, contemporaneously with, the occurrence of any Event of Default; or (b) on notice from the Secured Party to the Customer, in respect of such of the Other Property subject to that floating charge as is specified in the notice, if, in the Secured Party’s opinion, any of that Other Property is or might be or become seized or taken,‌‌ and will: (a) replace defective or worn out parts as and when necessary; (b) ensure that any Collateral intended by its manufacturer for use for a particular purpose is used for that purpose, and in accordance with any relevant recommendations of the manufacturer; (c) not alter or modify any Collateral, unless the Secured Party agrees; (d) not change any registration plate, identification number or similar identification mark in respect of any Collateral, unless the Secured Party agrees; (e) allow the Secured Party to inspect Collateral that is able to be inspected, at all reasonable times.

Fixed and floating charge. The charge created under this Agreement is a fixed charge 3.7 Maintain Collateral: The Customer will maintain all Collateral in good order and repair,‌ in relation to Other Property. However, if that charge is not legally and fully effective as a fixed charge then, for so long as and to the extent it may not be so legally and fully effective, that charge is a floating charge until such time as it becomes a fixed charge by virtue of this clause. Any floating charge created under this Agreement will become a fixed charge:‌ (a) automatically, without the need for any notice or action by the Secured Party, immediately prior to or, if that would not result in the fixed charge being legally and fully effective, contemporaneously with, the occurrence of any Event of Default; or (b) on notice from the Secured Party to the Customer, in respect of such of the Other Property subject to that floating charge as is specified in the notice, if, in the Secured Party’s opinion, any of that Other Property is or might be or become seized or taken,‌‌ and will: (a) replace defective or worn out parts as and when necessary; (b) ensure that any Collateral intended by its manufacturer for use for a particular purpose is used for that purpose, and in accordance with any relevant recommendations of the manufacturer; (c) not alter or modify any Collateral, unless the Secured Party agrees; (d) not change any registration plate, identification number or similar identification mark ▇▇▇▇ in respect of any Collateral, unless the Secured Party agrees; (e) allow the Secured Party to inspect Collateral that is able to be inspected, at all reasonable times.