Common use of Transformation Clause in Contracts

Transformation. The Grantor may not, without the Agent’s prior written consent or unless the Agent shall have received an acknowledgement (in form and substance satisfactory to the Agent) of its prior Lien, transform any of the movables forming part of the Hypothecated Property either by incorporating such movables into an immovable or by combining or mixing them with other movables so as to form new property, unless such immovable or new property are themselves subject or made subject to the hypothec hereby granted or to a Lien in favour of the Agent or unless such transformation is made in the ordinary course of operating an enterprise of the Grantor that is engaged in the business of manufacturing or transforming property. In no event, however, may the Grantor transform any such property where such transformation would result in the Agent’s security or rights hereunder, including in particular their rank, being diminished. In the event of any such transformation, even without the Agent’s authorization, the Grantor (who shall not be relieved of the default resulting from the failure to obtain authorization) shall immediately inform the Agent of the details of such transformation and shall in particular provide the Agent with a description of the property thereby affected, the name and address of the owner of the property that may result therefrom and the address where such property is located.