1.1                          A bill for an act 
  1.2             relating to commerce; enacting revised article 9 of 
  1.3             the Uniform Commercial Code as adopted by the National 
  1.4             Conference of Commissioners on Uniform State Laws; 
  1.5             appropriating money; amending Minnesota Statutes 1998, 
  1.6             sections 336.1-105; 336.1-201; 336.2-103; 336.2-210; 
  1.7             336.2-326; 336.2-502; 336.2-716; 336.2A-103; 
  1.8             336.2A-303; 336.2A-307; 336.2A-309; 336.4-210; 
  1.9             336.7-503; 336.8-103; 336.8-106; 336.8-110; 336.8-301; 
  1.10            336.8-302; and 336.8-510; proposing coding for new law 
  1.11            in Minnesota Statutes, chapter 336; repealing 
  1.12            Minnesota Statutes 1998, sections 336.9-101; 
  1.13            336.9-102; 336.9-103; 336.9-104; 336.9-105; 336.9-106; 
  1.14            336.9-107; 336.9-108; 336.9-109; 336.9-110; 336.9-112; 
  1.15            336.9-113; 336.9-114; 336.9-115; 336.9-116; 336.9-201; 
  1.16            336.9-202; 336.9-204; 336.9-205; 336.9-206; 336.9-207; 
  1.17            336.9-208; 336.9-301; 336.9-302; 336.9-303; 336.9-304; 
  1.18            336.9-305; 336.9-306; 336.9-307; 336.9-308; 336.9-309; 
  1.19            336.9-310; 336.9-311; 336.9-312; 336.9-313; 336.9-314; 
  1.20            335.9-315; 336.9-316; 336.9-317; 336.9-318; 336.9-403; 
  1.21            336.9-404; 336.9-405; 336.9-406; 336.9-407; 336.9-408; 
  1.22            336.9-410; 336.9-412; 336.9-413; 336.9-501; 336.9-502; 
  1.23            336.9-503; 336.9-504; 336.9-505; 336.9-506; 336.9-507; 
  1.24            and 336.9-508; Minnesota Statutes 1999 Supplement, 
  1.25            sections 336.9-203; 336.9-401; 336.9-402; and 
  1.26            336.9-411. 
  1.27  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.28                             ARTICLE  1 
  1.29                         Revised Article 9 
  1.30                        SECURED TRANSACTIONS 
  1.31                               Part 1 
  1.32                         GENERAL PROVISIONS 
  1.33               SUBPART 1.  SHORT TITLE, DEFINITIONS, 
  1.34                        AND GENERAL CONCEPTS 
  1.35     Section 1.  [336.9-101] [SHORT TITLE.] 
  1.36     This article may be cited as Uniform Commercial Code - 
  2.1   Secured Transactions. 
  2.2      Sec. 2.  [336.9-102] [DEFINITIONS AND INDEX OF 
  2.3   DEFINITIONS.] 
  2.4      (a) [DEFINITIONS.] In this article: 
  2.5      (1) "Accession" means goods that are physically united with 
  2.6   other goods in such a manner that the identity of the original 
  2.7   goods is not lost. 
  2.8      (2) "Account," except as used in "account for," means a 
  2.9   right to payment of a monetary obligation, whether or not earned 
  2.10  by performance, (i) for property that has been or is to be sold, 
  2.11  leased, licensed, assigned, or otherwise disposed of, (ii) for 
  2.12  services rendered or to be rendered, (iii) for a policy of 
  2.13  insurance issued or to be issued, (iv) for a secondary 
  2.14  obligation incurred or to be incurred, (v) for energy provided 
  2.15  or to be provided, (vi) for the use or hire of a vessel under a 
  2.16  charter or other contract, (vii) arising out of the use of a 
  2.17  credit or charge card or information contained on or for use 
  2.18  with the card, or (viii) as winnings in a lottery or other game 
  2.19  of chance operated or sponsored by a state, governmental unit of 
  2.20  a state, or person licensed or authorized to operate the game by 
  2.21  a state or governmental unit of a state.  The term includes 
  2.22  health-care-insurance receivables.  The term does not include (i)
  2.23  rights to payment evidenced by chattel paper or an instrument, 
  2.24  (ii) commercial tort claims, (iii) deposit accounts, (iv) 
  2.25  investment property, (v) letter of credit rights or letters of 
  2.26  credit, or (vi) rights to payment for money or funds advanced or 
  2.27  sold, other than rights arising out of the use of a credit or 
  2.28  charge card or information contained on or for use with the card.
  2.29     (3) "Account debtor" means a person obligated on an 
  2.30  account, chattel paper, or general intangible.  The term does 
  2.31  not include persons obligated to pay a negotiable instrument, 
  2.32  even if the instrument constitutes part of chattel paper. 
  2.33     (4) "Accounting," except as used in "accounting for," means 
  2.34  a record: 
  2.35     (A) authenticated by a secured party; 
  2.36     (B) indicating the aggregate unpaid secured obligations as 
  3.1   of a date not more than 35 days earlier or 35 days later than 
  3.2   the date of the record; and 
  3.3      (C) identifying the components of the obligations in 
  3.4   reasonable detail. 
  3.5      (5) "Agricultural lien" means an interest, other than a 
  3.6   security interest, in farm products: 
  3.7      (A) which secures payment or performance of an obligation 
  3.8   for: 
  3.9      (i) goods or services furnished in connection with a 
  3.10  debtor's farming operation; or 
  3.11     (ii) rent on real property leased by a debtor in connection 
  3.12  with its farming operation; 
  3.13     (B) which is created by statute in favor of a person that: 
  3.14     (i) in the ordinary course of its business furnished goods 
  3.15  or services to a debtor in connection with a debtor's farming 
  3.16  operation; or 
  3.17     (ii) leased real property to a debtor in connection with 
  3.18  the debtor's farming operation; and 
  3.19     (C) whose effectiveness does not depend on the person's 
  3.20  possession of the personal property. 
  3.21     (6) "As-extracted collateral" means: 
  3.22     (A) oil, gas, or other minerals that are subject to a 
  3.23  security interest that: 
  3.24     (i) is created by a debtor having an interest in the 
  3.25  minerals before extraction; and 
  3.26     (ii) attaches to the minerals as extracted; or 
  3.27     (B) accounts arising out of the sale at the wellhead or 
  3.28  minehead of oil, gas, or other minerals in which the debtor had 
  3.29  an interest before extraction. 
  3.30     (7) "Authenticate" means: 
  3.31     (A) to sign; or 
  3.32     (B) to execute or otherwise adopt a symbol, or encrypt or 
  3.33  similarly process a record in whole or in part, with the present 
  3.34  intent of the authenticating person to identify the person and 
  3.35  adopt or accept a record. 
  3.36     (8) "Bank" means an organization that is engaged in the 
  4.1   business of banking.  The term includes savings banks, savings 
  4.2   and loan associations, credit unions, and trust companies. 
  4.3      (9) "Cash proceeds" means proceeds that are money, checks, 
  4.4   deposit accounts, or the like. 
  4.5      (10) "Certificate of title" means a certificate of title 
  4.6   with respect to which a statute provides for the security 
  4.7   interest in question to be indicated on the certificate as a 
  4.8   condition or result of the security interest's obtaining 
  4.9   priority over the rights of a lien creditor with respect to the 
  4.10  collateral. 
  4.11     (11) "Chattel paper" means a record or records that 
  4.12  evidence both a monetary obligation and a security interest in 
  4.13  specific goods, a security interest in specific goods and 
  4.14  software used in the goods, a security interest in specific 
  4.15  goods and license of software used in the goods, a lease of 
  4.16  specific goods, or a lease of specific goods and license of 
  4.17  software used in the goods.  In this paragraph, "monetary 
  4.18  obligation" means a monetary obligation secured by the goods or 
  4.19  owed under a lease of the goods and includes a monetary 
  4.20  obligation with respect to software used in the goods.  The term 
  4.21  does not include (i) charters or other contracts involving the 
  4.22  use or hire of a vessel or (ii) records that evidence a right to 
  4.23  payment arising out of the use of a credit or charge card or 
  4.24  information contained on or for use with the card.  If a 
  4.25  transaction is evidenced by records that include an instrument 
  4.26  or series of instruments, the group of records taken together 
  4.27  constitutes chattel paper. 
  4.28     (12) "Collateral" means the property subject to a security 
  4.29  interest or agricultural lien.  The term includes: 
  4.30     (A) proceeds to which a security interest attaches; 
  4.31     (B) accounts, chattel paper, payment intangibles, and 
  4.32  promissory notes that have been sold; and 
  4.33     (C) goods that are the subject of a consignment. 
  4.34     (13) "Commercial tort claim" means a claim arising in tort 
  4.35  with respect to which: 
  4.36     (A) the claimant is an organization; or 
  5.1      (B) the claimant is an individual and the claim: 
  5.2      (i) arose in the course of the claimant's business or 
  5.3   profession; and 
  5.4      (ii) does not include damages arising out of personal 
  5.5   injury to or the death of an individual. 
  5.6      (14) "Commodity account" means an account maintained by a 
  5.7   commodity intermediary in which a commodity contract is carried 
  5.8   for a commodity customer. 
  5.9      (15) "Commodity contract" means a commodity futures 
  5.10  contract, an option on a commodity futures contract, a commodity 
  5.11  option, or another contract if the contract or option is: 
  5.12     (A) traded on or subject to the rules of a board of trade 
  5.13  that has been designated as a contract market for such a 
  5.14  contract pursuant to federal commodities law; or 
  5.15     (B) traded on a foreign commodity board of trade, exchange, 
  5.16  or market, and is carried on the books of a commodity 
  5.17  intermediary for a commodity customer. 
  5.18     (16) "Commodity customer" means a person for which a 
  5.19  commodity intermediary carries a commodity contract on its books.
  5.20     (17) "Commodity intermediary" means a person that: 
  5.21     (A) is registered as a futures commission merchant under 
  5.22  federal commodities law; or 
  5.23     (B) in the ordinary course of its business provides 
  5.24  clearance or settlement services for a board of trade that has 
  5.25  been designated as a contract market pursuant to federal 
  5.26  commodities law. 
  5.27     (18) "Communicate" means: 
  5.28     (A) to send a written or other tangible record; 
  5.29     (B) to transmit a record by any means agreed upon by the 
  5.30  persons sending and receiving the record; or 
  5.31     (C) in the case of transmission of a record to or by a 
  5.32  filing office, to transmit a record by any means prescribed by 
  5.33  filing office rule. 
  5.34     (19) "Consignee" means a merchant to which goods are 
  5.35  delivered in a consignment. 
  5.36     (20) "Consignment" means a transaction, regardless of its 
  6.1   form, in which a person delivers goods to a merchant for the 
  6.2   purpose of sale and: 
  6.3      (A) the merchant: 
  6.4      (i) deals in goods of that kind under a name other than the 
  6.5   name of the person making delivery; 
  6.6      (ii) is not an auctioneer; and 
  6.7      (iii) is not generally known by its creditors to be 
  6.8   substantially engaged in selling the goods of others; 
  6.9      (B) with respect to each delivery, the aggregate value of 
  6.10  the goods is $1,000 or more at the time of delivery; 
  6.11     (C) the goods are not consumer goods immediately before 
  6.12  delivery; and 
  6.13     (D) the transaction does not create a security interest 
  6.14  that secures an obligation. 
  6.15     (21) "Consignor" means a person that delivers goods to a 
  6.16  consignee in a consignment. 
  6.17     (22) "Consumer debtor" means a debtor in a consumer 
  6.18  transaction. 
  6.19     (23) "Consumer goods" means goods that are used or bought 
  6.20  for use primarily for personal, family, or household purposes. 
  6.21     (24) "Consumer goods transaction" means a consumer 
  6.22  transaction in which: 
  6.23     (A) an individual incurs an obligation primarily for 
  6.24  personal, family, or household purposes; and 
  6.25     (B) a security interest in consumer goods secures the 
  6.26  obligation. 
  6.27     (25) "Consumer obligor" means an obligor who is an 
  6.28  individual and who incurred the obligation as part of a 
  6.29  transaction entered into primarily for personal, family, or 
  6.30  household purposes. 
  6.31     (26) "Consumer transaction" means a transaction in which (i)
  6.32  an individual incurs an obligation primarily for personal, 
  6.33  family, or household purposes, (ii) a security interest secures 
  6.34  the obligation, and (iii) the collateral is held or acquired 
  6.35  primarily for personal, family, or household purposes.  The term 
  6.36  includes consumer goods transactions. 
  7.1      (27) "Continuation statement" means an amendment of a 
  7.2   financing statement which: 
  7.3      (A) identifies, by its file number, the initial financing 
  7.4   statement to which it relates; and 
  7.5      (B) indicates that it is a continuation statement for, or 
  7.6   that it is filed to continue the effectiveness of, the 
  7.7   identified financing statement. 
  7.8      (28) "Debtor" means: 
  7.9      (A) a person having an interest, other than a security 
  7.10  interest or other lien, in the collateral, whether or not the 
  7.11  person is an obligor; 
  7.12     (B) a seller of accounts, chattel paper, payment 
  7.13  intangibles, or promissory notes; or 
  7.14     (C) a consignee. 
  7.15     (29) "Deposit account" means a demand, time, savings, 
  7.16  passbook, or similar account maintained with a bank.  The term 
  7.17  does not include investment property or accounts evidenced by an 
  7.18  instrument. 
  7.19     (30) "Document" means a document of title or a receipt of 
  7.20  the type described in section 336.7-201(2). 
  7.21     (31) "Electronic chattel paper" means chattel paper 
  7.22  evidenced by a record or records consisting of information 
  7.23  stored in an electronic medium. 
  7.24     (32) "Encumbrance" means a right, other than an ownership 
  7.25  interest, in real property.  The term includes mortgages and 
  7.26  other liens on real property. 
  7.27     (33) "Equipment" means goods other than inventory, farm 
  7.28  products, or consumer goods. 
  7.29     (34) "Farm products" means goods, other than standing 
  7.30  timber, with respect to which the debtor is engaged in a farming 
  7.31  operation and which are: 
  7.32     (A) crops grown, growing, or to be grown, including: 
  7.33     (i) crops produced on trees, vines, and bushes; and 
  7.34     (ii) aquatic goods produced in aquacultural operations; 
  7.35     (B) livestock, born or unborn, including aquatic goods 
  7.36  produced in aquacultural operations; 
  8.1      (C) supplies used or produced in a farming operation; or 
  8.2      (D) products of crops or livestock in their unmanufactured 
  8.3   states. 
  8.4      (35) "Farming operation" means raising, cultivating, 
  8.5   propagating, fattening, grazing, or any other farming, 
  8.6   livestock, or aquacultural operation. 
  8.7      (36) "File number" means the number assigned to an initial 
  8.8   financing statement pursuant to section 336.9-519(a). 
  8.9      (37) "Filing office" means an office designated in section 
  8.10  336.9-501 as the place to file a financing statement. 
  8.11     (38) "Filing office rule" means a rule adopted pursuant to 
  8.12  section 140. 
  8.13     (39) "Financing statement" means a record or records 
  8.14  composed of an initial financing statement and any filed record 
  8.15  relating to the initial financing statement. 
  8.16     (40) "Fixture filing" means the filing of a financing 
  8.17  statement covering goods that are or are to become fixtures and 
  8.18  satisfying section 336.9-502(a) and (b).  The term includes the 
  8.19  filing of a financing statement covering goods of a transmitting 
  8.20  utility which are or are to become fixtures. 
  8.21     (41) "Fixtures" means goods that have become so related to 
  8.22  particular real property that an interest in them arises under 
  8.23  real property law. 
  8.24     (42) "General intangible" means any personal property, 
  8.25  including things in action, other than accounts, chattel paper, 
  8.26  commercial tort claims, deposit accounts, documents, goods, 
  8.27  instruments, investment property, letter of credit rights, 
  8.28  letters of credit, money, and oil, gas, or other minerals before 
  8.29  extraction.  The term includes payment intangibles and software. 
  8.30     (43) "Good faith" means honesty in fact and the observance 
  8.31  of reasonable commercial standards of fair dealing. 
  8.32     (44) "Goods" means all things that are movable when a 
  8.33  security interest attaches.  The term includes (i) fixtures, 
  8.34  (ii) standing timber that is to be cut and removed under a 
  8.35  conveyance or contract for sale, (iii) the unborn young of 
  8.36  animals, (iv) crops grown, growing, or to be grown, even if the 
  9.1   crops are produced on trees, vines, or bushes, and (v) 
  9.2   manufactured homes.  The term also includes a computer program 
  9.3   embedded in goods and any supporting information provided in 
  9.4   connection with a transaction relating to the program if the 
  9.5   program is associated with the goods in such a manner that it 
  9.6   customarily is considered part of the goods, or by becoming the 
  9.7   owner of the goods, a person acquires a right to use the program 
  9.8   in connection with the goods.  The term does not include a 
  9.9   computer program embedded in goods that consist solely of the 
  9.10  medium in which the program is embedded.  The term also does not 
  9.11  include accounts, chattel paper, commercial tort claims, deposit 
  9.12  accounts, documents, general intangibles, instruments, 
  9.13  investment property, letter of credit rights, letters of credit, 
  9.14  money, or oil, gas, or other minerals before extraction. 
  9.15     (45) "Governmental unit" means a subdivision, agency, 
  9.16  department, county, parish, municipality, or other unit of the 
  9.17  government of the United States, a state, or a foreign country.  
  9.18  The term includes an organization having a separate corporate 
  9.19  existence if the organization is eligible to issue debt on which 
  9.20  interest is exempt from income taxation under the laws of the 
  9.21  United States. 
  9.22     (46) "Health-care-insurance receivable" means an interest 
  9.23  in or claim under a policy of insurance which is a right to 
  9.24  payment of a monetary obligation for health-care goods or 
  9.25  services provided. 
  9.26     (47) "Instrument" means a negotiable instrument or any 
  9.27  other writing that evidences a right to the payment of a 
  9.28  monetary obligation, is not itself a security agreement or 
  9.29  lease, and is of a type that in ordinary course of business is 
  9.30  transferred by delivery with any necessary endorsement or 
  9.31  assignment.  The term does not include (i) investment property, 
  9.32  (ii) letters of credit, or (iii) writings that evidence a right 
  9.33  to payment arising out of the use of a credit or charge card or 
  9.34  information contained on or for use with the card. 
  9.35     (48) "Inventory" means goods, other than farm products, 
  9.36  which: 
 10.1      (A) are leased by a person as lessor; 
 10.2      (B) are held by a person for sale or lease or to be 
 10.3   furnished under a contract of service; 
 10.4      (C) are furnished by a person under a contract of service; 
 10.5   or 
 10.6      (D) consist of raw materials, work in process, or materials 
 10.7   used or consumed in a business. 
 10.8      (49) "Investment property" means a security, whether 
 10.9   certificated or uncertificated, security entitlement, securities 
 10.10  account, commodity contract, or commodity account. 
 10.11     (50) "Jurisdiction of organization," with respect to a 
 10.12  registered organization, means the jurisdiction under whose law 
 10.13  the organization is organized. 
 10.14     (51) "Letter of credit right" means a right to payment or 
 10.15  performance under a letter of credit, whether or not the 
 10.16  beneficiary has demanded or is at the time entitled to demand 
 10.17  payment or performance.  The term does not include the right of 
 10.18  a beneficiary to demand payment or performance under a letter of 
 10.19  credit. 
 10.20     (52) "Lien creditor" means: 
 10.21     (A) a creditor that has acquired a lien on the property 
 10.22  involved by attachment, levy, or the like; 
 10.23     (B) an assignee for benefit of creditors from the time of 
 10.24  assignment; 
 10.25     (C) a trustee in bankruptcy from the date of the filing of 
 10.26  the petition; or 
 10.27     (D) a receiver in equity from the time of appointment. 
 10.28     (53) "Manufactured home" means a structure, transportable 
 10.29  in one or more sections, which, in the traveling mode, is eight 
 10.30  body feet or more in width or 40 body feet or more in length, 
 10.31  or, when erected on site, is 320 or more square feet, and which 
 10.32  is built on a permanent chassis and designed to be used as a 
 10.33  dwelling with or without a permanent foundation when connected 
 10.34  to the required utilities, and includes the plumbing, heating, 
 10.35  air-conditioning, and electrical systems contained therein.  The 
 10.36  term includes any structure that meets all of the requirements 
 11.1   of this paragraph except the size requirements and with respect 
 11.2   to which the manufacturer voluntarily files a certification 
 11.3   required by the United States Secretary of Housing and Urban 
 11.4   Development and complies with the standards established under 
 11.5   United States Code, title 42. 
 11.6      (54) "Manufactured home transaction" means a secured 
 11.7   transaction: 
 11.8      (A) that creates a purchase-money security interest in a 
 11.9   manufactured home, other than a manufactured home held as 
 11.10  inventory; or 
 11.11     (B) in which a manufactured home, other than a manufactured 
 11.12  home held as inventory, is the primary collateral. 
 11.13     (55) "Mortgage" means a consensual interest in real 
 11.14  property, including fixtures, which secures payment or 
 11.15  performance of an obligation. 
 11.16     (56) "New debtor" means a person that becomes bound as 
 11.17  debtor under section 336.9-203(d) by a security agreement 
 11.18  previously entered into by another person. 
 11.19     (57) "New value" means (i) money, (ii) money's worth in 
 11.20  property, services, or new credit, or (iii) release by a 
 11.21  transferee of an interest in property previously transferred to 
 11.22  the transferee.  The term does not include an obligation 
 11.23  substituted for another obligation. 
 11.24     (58) "Noncash proceeds" means proceeds other than cash 
 11.25  proceeds. 
 11.26     (59) "Obligor" means a person that, with respect to an 
 11.27  obligation secured by a security interest in or an agricultural 
 11.28  lien on the collateral, (i) owes payment or other performance of 
 11.29  the obligation, (ii) has provided property other than the 
 11.30  collateral to secure payment or other performance of the 
 11.31  obligation, or (iii) is otherwise accountable in whole or in 
 11.32  part for payment or other performance of the obligation.  The 
 11.33  term does not include issuers or nominated persons under a 
 11.34  letter of credit. 
 11.35     (60) "Original debtor", except as used in section 
 11.36  336.9-310(c), means a person that, as debtor, entered into a 
 12.1   security agreement to which a new debtor has become bound under 
 12.2   section 336.9-203(d). 
 12.3      (61) "Payment intangible" means a general intangible under 
 12.4   which the account debtor's principal obligation is a monetary 
 12.5   obligation. 
 12.6      (62) "Person related to," with respect to an individual, 
 12.7   means: 
 12.8      (A) the spouse of the individual; 
 12.9      (B) a brother, brother-in-law, sister, or sister-in-law of 
 12.10  the individual; 
 12.11     (C) an ancestor or lineal descendant of the individual or 
 12.12  the individual's spouse; or 
 12.13     (D) any other relative, by blood or marriage, of the 
 12.14  individual or the individual's spouse who shares the same home 
 12.15  with the individual. 
 12.16     (63) "Person related to," with respect to an organization, 
 12.17  means: 
 12.18     (A) a person directly or indirectly controlling, controlled 
 12.19  by, or under common control with the organization; 
 12.20     (B) an officer or director of, or a person performing 
 12.21  similar functions with respect to, the organization; 
 12.22     (C) an officer or director of, or a person performing 
 12.23  similar functions with respect to, a person described in 
 12.24  subparagraph (A); 
 12.25     (D) the spouse of an individual described in subparagraph 
 12.26  (A), (B), or (C); or 
 12.27     (E) an individual who is related by blood or marriage to an 
 12.28  individual described in subparagraph (A), (B), (C), or (D), and 
 12.29  shares the same home with the individual. 
 12.30     (64) "Proceeds", except as used in section 336.9-609(b), 
 12.31  means the following property: 
 12.32     (A) whatever is acquired upon the sale, lease, license, 
 12.33  exchange, or other disposition of collateral; 
 12.34     (B) whatever is collected on, or distributed on account of, 
 12.35  collateral; 
 12.36     (C) rights arising out of collateral; 
 13.1      (D) to the extent of the value of collateral, claims 
 13.2   arising out of the loss, nonconformity, or interference with the 
 13.3   use of, defects or infringement of rights in, or damage to, the 
 13.4   collateral; or 
 13.5      (E) to the extent of the value of collateral and to the 
 13.6   extent payable to the debtor or the secured party, insurance 
 13.7   payable by reason of the loss or nonconformity of, defects or 
 13.8   infringement of rights in, or damage to, the collateral. 
 13.9      (65) "Promissory note" means an instrument that evidences a 
 13.10  promise to pay a monetary obligation, does not evidence an order 
 13.11  to pay, and does not contain an acknowledgment by a bank that 
 13.12  the bank has received for deposit a sum of money or funds. 
 13.13     (66) "Proposal" means a record authenticated by a secured 
 13.14  party which includes the terms on which the secured party is 
 13.15  willing to accept collateral in full or partial satisfaction of 
 13.16  the obligation it secures pursuant to sections 336.9-620, 
 13.17  336.9-621, and 336.9-622. 
 13.18     (67) "Public-finance transaction" means a secured 
 13.19  transaction in connection with which: 
 13.20     (A) debt securities are issued; 
 13.21     (B) all or a portion of the securities issued have an 
 13.22  initial stated maturity of at least 20 years; and 
 13.23     (C) the debtor, obligor, secured party, account debtor or 
 13.24  other person obligated on collateral, assignor or assignee of a 
 13.25  secured obligation, or assignor or assignee of a security 
 13.26  interest is a state or a governmental unit of a state. 
 13.27     (68) "Pursuant to commitment," with respect to an advance 
 13.28  made or other value given by a secured party, means pursuant to 
 13.29  the secured party's obligation, whether or not a subsequent 
 13.30  event of default or other event not within the secured party's 
 13.31  control has relieved or may relieve the secured party from its 
 13.32  obligation. 
 13.33     (69) "Record," except as used in "for record," "of record," 
 13.34  "record or legal title," and "record owner," means information 
 13.35  that is inscribed on a tangible medium or which is stored in an 
 13.36  electronic or other medium and is retrievable in perceivable 
 14.1   form. 
 14.2      (70) "Registered organization" means an organization 
 14.3   organized solely under the law of a single state or the United 
 14.4   States and as to which the state or the United States must 
 14.5   maintain a public record showing the organization to have been 
 14.6   organized. 
 14.7      (71) "Secondary obligor" means an obligor to the extent 
 14.8   that: 
 14.9      (A) the obligor's obligation is secondary; or 
 14.10     (B) the obligor has a right of recourse with respect to an 
 14.11  obligation secured by collateral against the debtor, another 
 14.12  obligor, or property of either. 
 14.13     (72) "Secured party" means: 
 14.14     (A) a person in whose favor a security interest is created 
 14.15  or provided for under a security agreement, whether or not any 
 14.16  obligation to be secured is outstanding; 
 14.17     (B) a person that holds an agricultural lien; 
 14.18     (C) a consignor; 
 14.19     (D) a person to which accounts, chattel paper, payment 
 14.20  intangibles, or promissory notes have been sold; 
 14.21     (E) a trustee, indenture trustee, agent, collateral agent, 
 14.22  or other representative in whose favor a security interest or 
 14.23  agricultural lien is created or provided for; or 
 14.24     (F) a person that holds a security interest arising under 
 14.25  section 336.2-401, 336.2-505, 336.2-711(3), 336.2A-508(5), 
 14.26  336.4-210, or 336.5-118. 
 14.27     (73) "Security agreement" means an agreement that creates 
 14.28  or provides for a security interest. 
 14.29     (74) "Send," in connection with a record or notification, 
 14.30  means: 
 14.31     (A) to deposit in the mail, deliver for transmission, or 
 14.32  transmit by any other usual means of communication, with postage 
 14.33  or cost of transmission provided for, addressed to any address 
 14.34  reasonable under the circumstances; or 
 14.35     (B) to cause the record or notification to be received 
 14.36  within the time that it would have been received if properly 
 15.1   sent under subparagraph (A). 
 15.2      (75) "Software" means a computer program and any supporting 
 15.3   information provided in connection with a transaction relating 
 15.4   to the program.  The term does not include a computer program 
 15.5   that is included in the definition of goods. 
 15.6      (76) "State" means a state of the United States, the 
 15.7   District of Columbia, Puerto Rico, the United States Virgin 
 15.8   Islands, or any territory or insular possession subject to the 
 15.9   jurisdiction of the United States. 
 15.10     (77) "Supporting obligation" means a letter of credit right 
 15.11  or secondary obligation that supports the payment or performance 
 15.12  of an account, chattel paper, a document, a general intangible, 
 15.13  an instrument, or investment property. 
 15.14     (78) "Tangible chattel paper" means chattel paper evidenced 
 15.15  by a record or records consisting of information that is 
 15.16  inscribed on a tangible medium. 
 15.17     (79) "Termination statement" means an amendment of a 
 15.18  financing statement which: 
 15.19     (A) identifies, by its file number, the initial financing 
 15.20  statement to which it relates; and 
 15.21     (B) indicates either that it is a termination statement or 
 15.22  that the identified financing statement is no longer effective. 
 15.23     (80) "Transmitting utility" means a person primarily 
 15.24  engaged in the business of: 
 15.25     (A) operating a railroad, subway, street railway, or 
 15.26  trolley bus; 
 15.27     (B) transmitting communications electrically, 
 15.28  electromagnetically, or by light; 
 15.29     (C) transmitting goods by pipeline or sewer; or 
 15.30     (D) transmitting or producing and transmitting electricity, 
 15.31  steam, gas, or water. 
 15.32     (b) [DEFINITIONS IN OTHER ARTICLES.] The following 
 15.33  definitions in other articles apply to this article: 
 15.34       "Applicant"                    Section 336.5-102
 15.35       "Beneficiary"                  Section 336.5-102
 15.36       "Broker"                       Section 336.8-102
 16.1        "Certificated security"        Section 336.8-102
 16.2        "Check"                        Section 336.3-104
 16.3        "Clearing corporation"         Section 336.8-102
 16.4        "Contract for sale"            Section 336.2-106
 16.5        "Customer"                     Section 336.4-104
 16.6        "Entitlement holder"           Section 336.8-102
 16.7        "Financial asset"              Section 336.8-102
 16.8        "Holder in due course"         Section 336.3-302
 16.9        "Issuer" (with respect to a    
 16.10        letter of credit or
 16.11        letter of credit right)       Section 336.5-102
 16.12       "Issuer" (with respect to
 16.13        a security)                   Section 336.8-201
 16.14       "Lease"                        Section 336.2A-103
 16.15       "Lease agreement"              Section 336.2A-103
 16.16       "Lease contract"               Section 336.2A-103
 16.17       "Leasehold interest"           Section 336.2A-103
 16.18       "Lessee"                       Section 336.2A-103
 16.19       "Lessee in ordinary course
 16.20        of business"                  Section 336.2A-103
 16.21       "Lessor"                       Section 336.2A-103
 16.22       "Lessor's residual interest"   Section 336.2A-103
 16.23       "Letter of credit"             Section 336.5-102
 16.24       "Merchant"                     Section 336.2-104
 16.25       "Negotiable instrument"        Section 336.3-104
 16.26       "Nominated person"             Section 336.5-102
 16.27       "Note"                         Section 336.3-104
 16.28       "Proceeds of a letter of
 16.29        credit"                       Section 336.5-114
 16.30       "Prove"                        Section 336.3-103
 16.31       "Sale"                         Section 336.2-106
 16.32       "Securities account"           Section 336.8-501
 16.33       "Securities intermediary"      Section 336.8-102
 16.34       "Security"                     Section 336.8-102
 16.35       "Security certificate"         Section 336.8-102
 16.36       "Security entitlement"         Section 336.8-102
 17.1        "Uncertificated security"      Section 336.8-102
 17.2      (c) [ARTICLE 1 DEFINITIONS AND PRINCIPLES.] Article 1 
 17.3   contains general definitions and principles of construction and 
 17.4   interpretation applicable throughout this article. 
 17.5      Sec. 3.  [336.9-103] [PURCHASE-MONEY SECURITY INTEREST; 
 17.6   APPLICATION OF PAYMENTS; BURDEN OF ESTABLISHING.] 
 17.7      (a) [DEFINITIONS.] In this section: 
 17.8      (1) "purchase-money collateral" means goods or software 
 17.9   that secures a purchase-money obligation incurred with respect 
 17.10  to that collateral; and 
 17.11     (2) "purchase-money obligation" means an obligation of an 
 17.12  obligor incurred as all or part of the price of the collateral 
 17.13  or for value given to enable the debtor to acquire rights in or 
 17.14  the use of the collateral if the value is in fact so used. 
 17.15     (b) [PURCHASE-MONEY SECURITY INTEREST IN GOODS.] A security 
 17.16  interest in goods is a purchase-money security interest: 
 17.17     (1) to the extent that the goods are purchase-money 
 17.18  collateral with respect to that security interest; 
 17.19     (2) if the security interest is in inventory that is or was 
 17.20  purchase-money collateral, also to the extent that the security 
 17.21  interest secures a purchase-money obligation incurred with 
 17.22  respect to other inventory in which the secured party holds or 
 17.23  held a purchase-money security interest; and 
 17.24     (3) also to the extent that the security interest secures a 
 17.25  purchase-money obligation incurred with respect to software in 
 17.26  which the secured party holds or held a purchase-money security 
 17.27  interest. 
 17.28     (c) [PURCHASE-MONEY SECURITY INTEREST IN SOFTWARE.] A 
 17.29  security interest in software is a purchase-money security 
 17.30  interest to the extent that the security interest also secures a 
 17.31  purchase-money obligation incurred with respect to goods in 
 17.32  which the secured party holds or held a purchase-money security 
 17.33  interest if: 
 17.34     (1) the debtor acquired its interest in the software in an 
 17.35  integrated transaction in which it acquired an interest in the 
 17.36  goods; and 
 18.1      (2) the debtor acquired its interest in the software for 
 18.2   the principal purpose of using the software in the goods. 
 18.3      (d) [CONSIGNOR'S INVENTORY PURCHASE-MONEY SECURITY 
 18.4   INTEREST.] The security interest of a consignor in goods that 
 18.5   are the subject of a consignment is a purchase-money security 
 18.6   interest in inventory. 
 18.7      (e) [APPLICATION OF PAYMENT IN NONCONSUMER GOODS 
 18.8   TRANSACTION.] In a transaction other than a consumer goods 
 18.9   transaction, if the extent to which a security interest is a 
 18.10  purchase-money security interest depends on the application of a 
 18.11  payment to a particular obligation, the payment must be applied: 
 18.12     (1) in accordance with any reasonable method of application 
 18.13  to which the parties agree; 
 18.14     (2) in the absence of the parties' agreement to a 
 18.15  reasonable method, in accordance with any intention of the 
 18.16  obligor manifested at or before the time of payment; or 
 18.17     (3) in the absence of an agreement to a reasonable method 
 18.18  and a timely manifestation of the obligor's intention, in the 
 18.19  following order: 
 18.20     (A) to obligations that are not secured; and 
 18.21     (B) if more than one obligation is secured, to obligations 
 18.22  secured by purchase-money security interests in the order in 
 18.23  which those obligations were incurred. 
 18.24     (f) [NO LOSS OF STATUS OF PURCHASE-MONEY SECURITY INTEREST 
 18.25  IN NONCONSUMER GOODS TRANSACTION.] In a transaction other than a 
 18.26  consumer goods transaction, a purchase-money security interest 
 18.27  does not lose its status as such, even if: 
 18.28     (1) the purchase-money collateral also secures an 
 18.29  obligation that is not a purchase-money obligation; 
 18.30     (2) collateral that is not purchase-money collateral also 
 18.31  secures the purchase-money obligation; or 
 18.32     (3) the purchase-money obligation has been renewed, 
 18.33  refinanced, consolidated, or restructured. 
 18.34     (g) [BURDEN OF PROOF IN NONCONSUMER GOODS TRANSACTION.] In 
 18.35  a transaction other than a consumer goods transaction, a secured 
 18.36  party claiming a purchase-money security interest has the burden 
 19.1   of establishing the extent to which the security interest is a 
 19.2   purchase-money security interest. 
 19.3      (h) [NONCONSUMER GOODS TRANSACTION; NO INFERENCE.] The 
 19.4   limitation of the rules in subsections (e), (f), and (g) to 
 19.5   transactions other than consumer goods transactions is intended 
 19.6   to leave to the court the determination of the proper rules in 
 19.7   consumer goods transactions.  The court may not infer from that 
 19.8   limitation the nature of the proper rule in consumer goods 
 19.9   transactions and may continue to apply established approaches. 
 19.10     Sec. 4.  [336.9-104] [CONTROL OF DEPOSIT ACCOUNT.] 
 19.11     (a) [REQUIREMENTS FOR CONTROL.] A secured party has control 
 19.12  of a deposit account if: 
 19.13     (1) the secured party is the bank with which the deposit 
 19.14  account is maintained; 
 19.15     (2) the debtor, secured party, and bank have agreed in an 
 19.16  authenticated record that the bank will comply with instructions 
 19.17  originated by the secured party directing disposition of the 
 19.18  funds in the deposit account without further consent by the 
 19.19  debtor; or 
 19.20     (3) the secured party becomes the bank's customer with 
 19.21  respect to the deposit account. 
 19.22     (b) [DEBTOR'S RIGHT TO DIRECT DISPOSITION.] A secured party 
 19.23  that has satisfied subsection (a) has control, even if the 
 19.24  debtor retains the right to direct the disposition of funds from 
 19.25  the deposit account. 
 19.26     Sec. 5.  [336.9-105] [CONTROL OF ELECTRONIC CHATTEL PAPER.] 
 19.27     A secured party has control of electronic chattel paper if 
 19.28  the record or records comprising the chattel paper are created, 
 19.29  stored, and assigned in such a manner that: 
 19.30     (1) a single authoritative copy of the record or records 
 19.31  exists which is unique, identifiable, and, except as otherwise 
 19.32  provided in paragraphs (4), (5), and (6), unalterable; 
 19.33     (2) the authoritative copy identifies the secured party as 
 19.34  the assignee of the record or records; 
 19.35     (3) the authoritative copy is communicated to and 
 19.36  maintained by the secured party or its designated custodian; 
 20.1      (4) copies or revisions that add or change an identified 
 20.2   assignee of the authoritative copy can be made only with the 
 20.3   participation of the secured party; 
 20.4      (5) each copy of the authoritative copy and any copy of a 
 20.5   copy is readily identifiable as a copy that is not the 
 20.6   authoritative copy; and 
 20.7      (6) any revision of the authoritative copy is readily 
 20.8   identifiable as an authorized or unauthorized revision. 
 20.9      Sec. 6.  [336.9-106] [CONTROL OF INVESTMENT PROPERTY.] 
 20.10     (a) [CONTROL UNDER SECTION 336.8-106.] A person has control 
 20.11  of a certificated security, uncertificated security, or security 
 20.12  entitlement as provided in section 336.8-106. 
 20.13     (b) [CONTROL OF COMMODITY CONTRACT.] A secured party has 
 20.14  control of a commodity contract if: 
 20.15     (1) the secured party is the commodity intermediary with 
 20.16  which the commodity contract is carried; or 
 20.17     (2) the commodity customer, secured party, and commodity 
 20.18  intermediary have agreed that the commodity intermediary will 
 20.19  apply any value distributed on account of the commodity contract 
 20.20  as directed by the secured party without further consent by the 
 20.21  commodity customer. 
 20.22     (c) [EFFECT OF CONTROL OF SECURITIES ACCOUNT OR COMMODITY 
 20.23  ACCOUNT.] A secured party having control of all security 
 20.24  entitlements or commodity contracts carried in a securities 
 20.25  account or commodity account has control over the securities 
 20.26  account or commodity account. 
 20.27     Sec. 7.  [336.9-107] [CONTROL OF LETTER OF CREDIT RIGHT.] 
 20.28     A secured party has control of a letter of credit right to 
 20.29  the extent of any right to payment or performance by the issuer 
 20.30  or any nominated person if the issuer or nominated person has 
 20.31  consented to an assignment of proceeds of the letter of credit 
 20.32  under section 336.5-114(c) or otherwise applicable law or 
 20.33  practice. 
 20.34     Sec. 8.  [336.9-108] [SUFFICIENCY OF DESCRIPTION.] 
 20.35     (a) [SUFFICIENCY OF DESCRIPTION.] Except as otherwise 
 20.36  provided in subsections (c), (d), and (e), a description of 
 21.1   personal or real property is sufficient, whether or not it is 
 21.2   specific, if it reasonably identifies what is described. 
 21.3      (b) [EXAMPLES OF REASONABLE IDENTIFICATION.] Except as 
 21.4   otherwise provided in subsection (d), a description of 
 21.5   collateral reasonably identifies the collateral if it identifies 
 21.6   the collateral by: 
 21.7      (1) specific listing; 
 21.8      (2) category; 
 21.9      (3) except as otherwise provided in subsection (e), a type 
 21.10  of collateral defined in the Uniform Commercial Code; 
 21.11     (4) quantity; 
 21.12     (5) computational or allocational formula or procedure; or 
 21.13     (6) except as otherwise provided in subsection (c), any 
 21.14  other method, if the identity of the collateral is objectively 
 21.15  determinable. 
 21.16     (c) [SUPERGENERIC DESCRIPTION NOT SUFFICIENT.] A 
 21.17  description of collateral as "all the debtor's assets" or "all 
 21.18  the debtor's personal property" or using words of similar import 
 21.19  does not reasonably identify the collateral. 
 21.20     (d) [INVESTMENT PROPERTY.] Except as otherwise provided in 
 21.21  subsection (e), a description of a security entitlement, 
 21.22  securities account, or commodity account is sufficient if it 
 21.23  describes: 
 21.24     (1) the collateral by those terms or as investment 
 21.25  property; or 
 21.26     (2) the underlying financial asset or commodity contract. 
 21.27     (e) [WHEN DESCRIPTION BY TYPE INSUFFICIENT.] A description 
 21.28  only by type of collateral defined in the Uniform Commercial 
 21.29  Code is an insufficient description of: 
 21.30     (1) a commercial tort claim; or 
 21.31     (2) in a consumer transaction, consumer goods, a security 
 21.32  entitlement, a securities account, or a commodity account. 
 21.33                SUBPART 2.  APPLICABILITY OF ARTICLE 
 21.34     Sec. 9.  [336.9-109] [SCOPE.] 
 21.35     (a) [GENERAL SCOPE OF ARTICLE.] Except as otherwise 
 21.36  provided in subsections (c) and (d), this article applies to: 
 22.1      (1) a transaction, regardless of its form, that creates a 
 22.2   security interest in personal property or fixtures by contract; 
 22.3      (2) an agricultural lien; 
 22.4      (3) a sale of accounts, chattel paper, payment intangibles, 
 22.5   or promissory notes; 
 22.6      (4) a consignment; 
 22.7      (5) a security interest arising under section 336.2-401, 
 22.8   336.2-505, 336.2-711(3), or 336.2A-508(5), as provided in 
 22.9   section 336.9-110; and 
 22.10     (6) a security interest arising under section 336.4-210 or 
 22.11  336.5-118. 
 22.12     (b) [SECURITY INTEREST IN SECURED OBLIGATION.] The 
 22.13  application of this article to a security interest in a secured 
 22.14  obligation is not affected by the fact that the obligation is 
 22.15  itself secured by a transaction or interest to which this 
 22.16  article does not apply. 
 22.17     (c) [EXTENT TO WHICH ARTICLE DOES NOT APPLY.] This article 
 22.18  does not apply to the extent that: 
 22.19     (1) a statute, regulation, or treaty of the United States 
 22.20  preempts this article; 
 22.21     (2) another statute of this state expressly governs the 
 22.22  creation, perfection, priority, or enforcement of a security 
 22.23  interest created by this state or a governmental unit of this 
 22.24  state; 
 22.25     (3) a statute of another state, a foreign country, or a 
 22.26  governmental unit of another state or a foreign country, other 
 22.27  than a statute generally applicable to security interests, 
 22.28  expressly governs creation, perfection, priority, or enforcement 
 22.29  of a security interest created by the state, country, or 
 22.30  governmental unit; or 
 22.31     (4) the rights of a transferee beneficiary or nominated 
 22.32  person under a letter of credit are independent and superior 
 22.33  under section 336.5-114. 
 22.34     (d) [INAPPLICABILITY OF ARTICLE.] This article does not 
 22.35  apply to: 
 22.36     (1) a landlord's lien, other than an agricultural lien; 
 23.1      (2) a lien, other than an agricultural lien, given by 
 23.2   statute or other rule of law for services or materials, but 
 23.3   section 336.9-333 applies with respect to priority of the lien; 
 23.4      (3) an assignment of a claim for wages, salary, or other 
 23.5   compensation of an employee; 
 23.6      (4) a sale of accounts, chattel paper, payment intangibles, 
 23.7   or promissory notes as part of a sale of the business out of 
 23.8   which they arose; 
 23.9      (5) an assignment of accounts, chattel paper, payment 
 23.10  intangibles, or promissory notes which is for the purpose of 
 23.11  collection only; 
 23.12     (6) an assignment of a right-to-payment under a contract to 
 23.13  an assignee that is also obligated to perform under the 
 23.14  contract; 
 23.15     (7) an assignment of a single account, payment intangible, 
 23.16  or promissory note to an assignee in full or partial 
 23.17  satisfaction of a preexisting indebtedness; 
 23.18     (8) a transfer of an interest in or an assignment of a 
 23.19  claim under a policy of insurance, other than an assignment by 
 23.20  or to a health-care provider of a health-care-insurance 
 23.21  receivable and any subsequent assignment of the 
 23.22  right-to-payment, but sections 336.9-315 and 336.9-322 apply 
 23.23  with respect to proceeds and priorities in proceeds; 
 23.24     (9) an assignment of a right represented by a judgment, 
 23.25  other than a judgment taken on a right-to-payment that was 
 23.26  collateral; 
 23.27     (10) a right of recoupment or set-off, but: 
 23.28     (A) section 336.9-340 applies with respect to the 
 23.29  effectiveness of rights of recoupment or set-off against deposit 
 23.30  accounts; and 
 23.31     (B) section 336.9-404 applies with respect to defenses or 
 23.32  claims of an account debtor; 
 23.33     (11) the creation or transfer of an interest in or lien on 
 23.34  real property, including a lease or rents thereunder, except to 
 23.35  the extent that provision is made for: 
 23.36     (A) liens on real property in sections 336.9-203 and 
 24.1   336.9-308; 
 24.2      (B) fixtures in section 336.9-334; 
 24.3      (C) fixture filings in sections 336.9-501, 336.9-502, 
 24.4   336.9-512, 336.9-516, and 336.9-519; and 
 24.5      (D) security agreements covering personal and real property 
 24.6   in section 336.9-604; 
 24.7      (12) an assignment of a claim arising in tort, other than a 
 24.8   commercial tort claim, but sections 336.9-315 and 336.9-322 
 24.9   apply with respect to proceeds and priorities in proceeds; or 
 24.10     (13) an assignment of a deposit account in a consumer 
 24.11  transaction, but sections 336.9-315 and 336.9-322 apply with 
 24.12  respect to proceeds and priorities in proceeds. 
 24.13     Sec. 10.  [336.9-110] [SECURITY INTERESTS ARISING UNDER 
 24.14  ARTICLE 2 OR 2A.] 
 24.15     A security interest arising under section 336.2-401, 
 24.16  336.2-505, 336.2-711(3), or 336.2A-508(5) is subject to this 
 24.17  article.  However, until the debtor obtains possession of the 
 24.18  goods: 
 24.19     (1) the security interest is enforceable, even if section 
 24.20  336.9-203(b)(3) has not been satisfied; 
 24.21     (2) filing is not required to perfect the security 
 24.22  interest; 
 24.23     (3) the rights of the secured party after default by the 
 24.24  debtor are governed by article 2 or 2A; and 
 24.25     (4) the security interest has priority over a conflicting 
 24.26  security interest created by the debtor. 
 24.27                               Part 2 
 24.28                EFFECTIVENESS OF SECURITY AGREEMENT; 
 24.29                  ATTACHMENT OF SECURITY INTEREST; 
 24.30              RIGHTS OF PARTIES TO SECURITY AGREEMENT 
 24.31              SUBPART 1.  EFFECTIVENESS AND ATTACHMENT 
 24.32     Sec. 11.  [336.9-201] [GENERAL EFFECTIVENESS OF SECURITY 
 24.33  AGREEMENT.] 
 24.34     (a) [GENERAL EFFECTIVENESS.] Except as otherwise provided 
 24.35  in the Uniform Commercial Code, a security agreement is 
 24.36  effective according to its terms between the parties, against 
 25.1   purchasers of the collateral, and against creditors. 
 25.2      (b) [APPLICABLE CONSUMER LAWS AND OTHER LAW.] A transaction 
 25.3   subject to this article is subject to any applicable rule of law 
 25.4   which establishes a different rule for consumers and (i) any 
 25.5   other statute or regulation that regulates the rates, charges, 
 25.6   agreements, and practices for loans, credit sales, or other 
 25.7   extensions of credit and (ii) any consumer protection statute or 
 25.8   rule. 
 25.9      (c) [OTHER APPLICABLE LAW CONTROLS.] In case of conflict 
 25.10  between this article and a rule of law, statute, or regulation 
 25.11  described in subsection (b), the rule of law, statute, or 
 25.12  regulation controls.  Failure to comply with a statute or 
 25.13  regulation described in subsection (b) has only the effect the 
 25.14  statute or regulation specifies. 
 25.15     (d) [FURTHER DEFERENCE TO OTHER APPLICABLE LAW.] This 
 25.16  article does not: 
 25.17     (1) validate any rate, charge, agreement, or practice that 
 25.18  violates a rule of law, statute, or regulation described in 
 25.19  subsection (b); or 
 25.20     (2) extend the application of the rule of law, statute, or 
 25.21  regulation to a transaction not otherwise subject to it. 
 25.22     Sec. 12.  [336.9-202] [TITLE TO COLLATERAL IMMATERIAL.] 
 25.23     Except as otherwise provided with respect to consignments 
 25.24  or sales of accounts, chattel paper, payment intangibles, or 
 25.25  promissory notes, the provisions of this article with regard to 
 25.26  rights and obligations apply whether title to collateral is in 
 25.27  the secured party or the debtor. 
 25.28     Sec. 13.  [336.9-203] [ATTACHMENT AND ENFORCEABILITY OF 
 25.29  SECURITY INTEREST; PROCEEDS; SUPPORTING OBLIGATIONS; FORMAL 
 25.30  REQUISITES.] 
 25.31     (a) [ATTACHMENT.] A security interest attaches to 
 25.32  collateral when it becomes enforceable against the debtor with 
 25.33  respect to the collateral, unless an agreement expressly 
 25.34  postpones the time of attachment. 
 25.35     (b) [ENFORCEABILITY.] Except as otherwise provided in 
 25.36  subsections (c) through (i), a security interest is enforceable 
 26.1   against the debtor and third parties with respect to the 
 26.2   collateral only if: 
 26.3      (1) value has been given; 
 26.4      (2) the debtor has rights in the collateral or the power to 
 26.5   transfer rights in the collateral to a secured party; and 
 26.6      (3) one of the following conditions is met: 
 26.7      (A) the debtor has authenticated a security agreement that 
 26.8   provides a description of the collateral and, if the security 
 26.9   interest covers timber to be cut, a description of the land 
 26.10  concerned; 
 26.11     (B) the collateral is not a certificated security and is in 
 26.12  the possession of the secured party under section 336.9-313 
 26.13  pursuant to the debtor's security agreement; 
 26.14     (C) the collateral is a certificated security in registered 
 26.15  form and the security certificate has been delivered to the 
 26.16  secured party under section 336.8-301 pursuant to the debtor's 
 26.17  security agreement; or 
 26.18     (D) the collateral is deposit accounts, electronic chattel 
 26.19  paper, investment property, or letter of credit rights, and the 
 26.20  secured party has control under section 336.9-104, 336.9-105, 
 26.21  336.9-106, or 336.9-107 pursuant to the debtor's security 
 26.22  agreement. 
 26.23     (c) [OTHER UCC PROVISIONS.] Subsection (b) is subject to 
 26.24  section 336.4-210 on the security interest of a collecting bank, 
 26.25  section 336.5-118 on the security interest of a letter of credit 
 26.26  issuer or nominated person, section 336.9-110 on a security 
 26.27  interest arising under article 2 or 2A, and section 336.9-206 on 
 26.28  security interests in investment property. 
 26.29     (d) [WHEN PERSON BECOMES BOUND BY ANOTHER PERSON'S SECURITY 
 26.30  AGREEMENT.] A person becomes bound as debtor by a security 
 26.31  agreement entered into by another person if, by operation of law 
 26.32  other than this article or by contract: 
 26.33     (1) the security agreement becomes effective to create a 
 26.34  security interest in the person's property; or 
 26.35     (2) the person becomes generally obligated for the 
 26.36  obligations of the other person, including the obligation 
 27.1   secured under the security agreement, and acquires or succeeds 
 27.2   to all or substantially all of the assets of the other person. 
 27.3      (e) [EFFECT OF NEW DEBTOR BECOMING BOUND.] If a new debtor 
 27.4   becomes bound as debtor by a security agreement entered into by 
 27.5   another person: 
 27.6      (1) the agreement satisfies subsection (b)(3) with respect 
 27.7   to existing or after-acquired property of the new debtor to the 
 27.8   extent the property is described in the agreement; and 
 27.9      (2) another agreement is not necessary to make a security 
 27.10  interest in the property enforceable. 
 27.11     (f) [PROCEEDS AND SUPPORTING OBLIGATIONS.] The attachment 
 27.12  of a security interest in collateral gives the secured party the 
 27.13  rights to proceeds provided by section 336.9-315 and is also 
 27.14  attachment of a security interest in a supporting obligation for 
 27.15  the collateral. 
 27.16     (g) [LIEN SECURING RIGHT-TO-PAYMENT.] The attachment of a 
 27.17  security interest in a right-to-payment or performance secured 
 27.18  by a security interest or other lien on personal or real 
 27.19  property is also attachment of a security interest in the 
 27.20  security interest, mortgage, or other lien. 
 27.21     (h) [SECURITY ENTITLEMENT CARRIED IN SECURITIES 
 27.22  ACCOUNT.] The attachment of a security interest in a securities 
 27.23  account is also attachment of a security interest in the 
 27.24  security entitlements carried in the securities account. 
 27.25     (i) [COMMODITY CONTRACTS CARRIED IN COMMODITY ACCOUNT.] The 
 27.26  attachment of a security interest in a commodity account is also 
 27.27  attachment of a security interest in the commodity contracts 
 27.28  carried in the commodity account. 
 27.29     Sec. 14.  [336.9-204] [AFTER-ACQUIRED PROPERTY; FUTURE 
 27.30  ADVANCES.] 
 27.31     (a) [AFTER-ACQUIRED COLLATERAL.] Except as otherwise 
 27.32  provided in subsection (b), a security agreement may create or 
 27.33  provide for a security interest in after-acquired collateral. 
 27.34     (b) [WHEN AFTER-ACQUIRED PROPERTY CLAUSE NOT EFFECTIVE.] A 
 27.35  security interest does not attach under a term constituting an 
 27.36  after-acquired property clause to: 
 28.1      (1) consumer goods, other than an accession when given as 
 28.2   additional security, unless the debtor acquires rights in them 
 28.3   within ten days after the secured party gives value; or 
 28.4      (2) a commercial tort claim. 
 28.5      (c) [FUTURE ADVANCES AND OTHER VALUE.] A security agreement 
 28.6   may provide that collateral secures, or that accounts, chattel 
 28.7   paper, payment intangibles, or promissory notes are sold in 
 28.8   connection with future advances or other value, whether or not 
 28.9   the advances or value are given pursuant to commitment. 
 28.10     Sec. 15.  [336.9-205] [USE OR DISPOSITION OF COLLATERAL 
 28.11  PERMISSIBLE.] 
 28.12     (a) [WHEN SECURITY INTEREST NOT INVALID OR FRAUDULENT.] A 
 28.13  security interest is not invalid or fraudulent against creditors 
 28.14  solely because: 
 28.15     (1) the debtor has the right or ability to: 
 28.16     (A) use, commingle, or dispose of all or part of the 
 28.17  collateral, including returned or repossessed goods; 
 28.18     (B) collect, compromise, enforce, or otherwise deal with 
 28.19  collateral; 
 28.20     (C) accept the return of collateral or make repossessions; 
 28.21  or 
 28.22     (D) use, commingle, or dispose of proceeds; or 
 28.23     (2) the secured party fails to require the debtor to 
 28.24  account for proceeds or replace collateral. 
 28.25     (b) [REQUIREMENTS OF POSSESSION NOT RELAXED.] This section 
 28.26  does not relax the requirements of possession if attachment, 
 28.27  perfection, or enforcement of a security interest depends upon 
 28.28  possession of the collateral by the secured party. 
 28.29     Sec. 16.  [336.9-206] [SECURITY INTEREST ARISING IN 
 28.30  PURCHASE OR DELIVERY OF FINANCIAL ASSET.] 
 28.31     (a) [SECURITY INTEREST WHEN PERSON BUYS THROUGH SECURITIES 
 28.32  INTERMEDIARY.] A security interest in favor of a securities 
 28.33  intermediary attaches to a person's security entitlement if: 
 28.34     (1) the person buys a financial asset through the 
 28.35  securities intermediary in a transaction in which the person is 
 28.36  obligated to pay the purchase price to the securities 
 29.1   intermediary at the time of the purchase; and 
 29.2      (2) the securities intermediary credits the financial asset 
 29.3   to the buyer's securities account before the buyer pays the 
 29.4   securities intermediary. 
 29.5      (b) [SECURITY INTEREST SECURES OBLIGATION TO PAY FOR 
 29.6   FINANCIAL ASSET.] The security interest described in subsection 
 29.7   (a) secures the person's obligation to pay for the financial 
 29.8   asset. 
 29.9      (c) [SECURITY INTEREST IN PAYMENT AGAINST DELIVERY 
 29.10  TRANSACTION.] A security interest in favor of a person that 
 29.11  delivers a certificated security or other financial asset 
 29.12  represented by a writing attaches to the security or other 
 29.13  financial asset if: 
 29.14     (1) the security or other financial asset: 
 29.15     (A) in the ordinary course of business is transferred by 
 29.16  delivery with any necessary endorsement or assignment; and 
 29.17     (B) is delivered under an agreement between persons in the 
 29.18  business of dealing with such securities or financial assets; 
 29.19  and 
 29.20     (2) the agreement calls for delivery against payment. 
 29.21     (d) [SECURITY INTEREST SECURES OBLIGATION TO PAY FOR 
 29.22  DELIVERY.] The security interest described in subsection (c) 
 29.23  secures the obligation to make payment for the delivery. 
 29.24                   SUBPART 2.  RIGHTS AND DUTIES 
 29.25     Sec. 17.  [336.9-207] [RIGHTS AND DUTIES OF SECURED PARTY 
 29.26  HAVING POSSESSION OR CONTROL OF COLLATERAL.] 
 29.27     (a) [DUTY OF CARE WHEN SECURED PARTY IN POSSESSION.] Except 
 29.28  as otherwise provided in subsection (d), a secured party shall 
 29.29  use reasonable care in the custody and preservation of 
 29.30  collateral in the secured party's possession.  In the case of 
 29.31  chattel paper or an instrument, reasonable care includes taking 
 29.32  necessary steps to preserve rights against prior parties unless 
 29.33  otherwise agreed. 
 29.34     (b) [EXPENSES, RISKS, DUTIES, AND RIGHTS WHEN SECURED PARTY 
 29.35  IN POSSESSION.] Except as otherwise provided in subsection (d), 
 29.36  if a secured party has possession of collateral: 
 30.1      (1) reasonable expenses, including the cost of insurance 
 30.2   and payment of taxes or other charges incurred in the custody, 
 30.3   preservation, use, or operation of the collateral, are 
 30.4   chargeable to the debtor and are secured by the collateral; 
 30.5      (2) the risk of accidental loss or damage is on the debtor 
 30.6   to the extent of a deficiency in any effective insurance 
 30.7   coverage; 
 30.8      (3) the secured party shall keep the collateral 
 30.9   identifiable, but fungible collateral may be commingled; and 
 30.10     (4) the secured party may use or operate the collateral: 
 30.11     (A) for the purpose of preserving the collateral or its 
 30.12  value; 
 30.13     (B) as permitted by an order of a court having competent 
 30.14  jurisdiction; or 
 30.15     (C) except in the case of consumer goods, in the manner and 
 30.16  to the extent agreed by the debtor. 
 30.17     (c) [DUTIES AND RIGHTS WHEN SECURED PARTY IN POSSESSION OR 
 30.18  CONTROL.] Except as otherwise provided in subsection (d), a 
 30.19  secured party having possession of collateral or control of 
 30.20  collateral under section 336.9-104, 336.9-105, 336.9-106, or 
 30.21  336.9-107: 
 30.22     (1) may hold as additional security any proceeds, except 
 30.23  money or funds, received from the collateral; 
 30.24     (2) shall apply money or funds received from the collateral 
 30.25  to reduce the secured obligation, unless remitted to the debtor; 
 30.26  and 
 30.27     (3) may create a security interest in the collateral. 
 30.28     (d) [BUYER OF CERTAIN RIGHTS TO PAYMENT.] If the secured 
 30.29  party is a buyer of accounts, chattel paper, payment 
 30.30  intangibles, or promissory notes or a consignor: 
 30.31     (1) subsection (a) does not apply unless the secured party 
 30.32  is entitled under an agreement: 
 30.33     (A) to charge back uncollected collateral; or 
 30.34     (B) otherwise to full or limited recourse against the 
 30.35  debtor or a secondary obligor based on the nonpayment or other 
 30.36  default of an account debtor or other obligor on the collateral; 
 31.1   and 
 31.2      (2) subsections (b) and (c) do not apply. 
 31.3      Sec. 18.  [336.9-208] [ADDITIONAL DUTIES OF SECURED PARTY 
 31.4   HAVING CONTROL OF COLLATERAL.] 
 31.5      (a) [APPLICABILITY OF SECTION.] This section applies to 
 31.6   cases in which there is no outstanding secured obligation and 
 31.7   the secured party is not committed to make advances, incur 
 31.8   obligations, or otherwise give value. 
 31.9      (b) [DUTIES OF SECURED PARTY AFTER RECEIVING DEMAND FROM 
 31.10  DEBTOR.] Within ten days after receiving an authenticated demand 
 31.11  by the debtor: 
 31.12     (1) a secured party having control of a deposit account 
 31.13  under section 336.9-104(a)(2) shall send to the bank with which 
 31.14  the deposit account is maintained an authenticated statement 
 31.15  that releases the bank from any further obligation to comply 
 31.16  with instructions originated by the secured party; 
 31.17     (2) a secured party having control of a deposit account 
 31.18  under section 336.9-104(a)(3) shall: 
 31.19     (A) pay the debtor the balance on deposit in the deposit 
 31.20  account; or 
 31.21     (B) transfer the balance on deposit into a deposit account 
 31.22  in the debtor's name; 
 31.23     (3) a secured party, other than a buyer, having control of 
 31.24  electronic chattel paper under section 336.9-105 shall: 
 31.25     (A) communicate the authoritative copy of the electronic 
 31.26  chattel paper to the debtor or its designated custodian; 
 31.27     (B) if the debtor designates a custodian that is the 
 31.28  designated custodian with which the authoritative copy of the 
 31.29  electronic chattel paper is maintained for the secured party, 
 31.30  communicate to the custodian an authenticated record releasing 
 31.31  the designated custodian from any further obligation to comply 
 31.32  with instructions originated by the secured party and 
 31.33  instructing the custodian to comply with instructions originated 
 31.34  by the debtor; and 
 31.35     (C) take appropriate action to enable the debtor or its 
 31.36  designated custodian to make copies of or revisions to the 
 32.1   authoritative copy which add or change an identified assignee of 
 32.2   the authoritative copy without the consent of the secured party; 
 32.3      (4) a secured party having control of investment property 
 32.4   under section 336.8-106(d)(2) or 336.9-106(b) shall send to the 
 32.5   securities intermediary or commodity intermediary with which the 
 32.6   security entitlement or commodity contract is maintained an 
 32.7   authenticated record that releases the securities intermediary 
 32.8   or commodity intermediary from any further obligation to comply 
 32.9   with entitlement orders or directions originated by the secured 
 32.10  party; and 
 32.11     (5) a secured party having control of a letter of credit 
 32.12  right under section 336.9-107 shall send to each person having 
 32.13  an unfulfilled obligation to pay or deliver proceeds of the 
 32.14  letter of credit to the secured party an authenticated release 
 32.15  from any further obligation to pay or deliver proceeds of the 
 32.16  letter of credit to the secured party. 
 32.17     Sec. 19.  [336.9-209] [DUTIES OF SECURED PARTY IF ACCOUNT 
 32.18  DEBTOR HAS BEEN NOTIFIED OF ASSIGNMENT.] 
 32.19     (a) [APPLICABILITY OF SECTION.] Except as otherwise 
 32.20  provided in subsection (c), this section applies if: 
 32.21     (1) there is no outstanding secured obligation; and 
 32.22     (2) the secured party is not committed to make advances, 
 32.23  incur obligations, or otherwise give value. 
 32.24     (b) [DUTIES OF SECURED PARTY AFTER RECEIVING DEMAND FROM 
 32.25  DEBTOR.] Within ten days after receiving an authenticated demand 
 32.26  by the debtor, a secured party shall send to an account debtor 
 32.27  that has received notification of an assignment to the secured 
 32.28  party as assignee under section 336.9-406(a) an authenticated 
 32.29  record that releases the account debtor from any further 
 32.30  obligation to the secured party. 
 32.31     (c) [INAPPLICABILITY TO SALES.] This section does not apply 
 32.32  to an assignment constituting the sale of an account, chattel 
 32.33  paper, or payment intangible. 
 32.34     Sec. 20.  [336.9-210] [REQUEST FOR ACCOUNTING; REQUEST 
 32.35  REGARDING LIST OF COLLATERAL OR STATEMENT OF ACCOUNT.] 
 32.36     (a) [DEFINITIONS.] In this section: 
 33.1      (1) "Request" means a record of a type described in 
 33.2   paragraph (2), (3), or (4). 
 33.3      (2) "Request for an accounting" means a record 
 33.4   authenticated by a debtor requesting that the recipient provide 
 33.5   an accounting of the unpaid obligations secured by collateral 
 33.6   and reasonably identifying the transaction or relationship that 
 33.7   is the subject of the request. 
 33.8      (3) "Request regarding a list of collateral" means a record 
 33.9   authenticated by a debtor requesting that the recipient approve 
 33.10  or correct a list of what the debtor believes to be the 
 33.11  collateral securing an obligation and reasonably identifying the 
 33.12  transaction or relationship that is the subject of the request. 
 33.13     (4) "Request regarding a statement of account" means a 
 33.14  record authenticated by a debtor requesting that the recipient 
 33.15  approve or correct a statement indicating what the debtor 
 33.16  believes to be the aggregate amount of unpaid obligations 
 33.17  secured by collateral as of a specified date and reasonably 
 33.18  identifying the transaction or relationship that is the subject 
 33.19  of the request. 
 33.20     (b) [DUTY TO RESPOND TO REQUESTS.] Subject to subsections 
 33.21  (c), (d), (e), and (f), a secured party, other than a buyer of 
 33.22  accounts, chattel paper, payment intangibles, or promissory 
 33.23  notes or a consignor, shall comply with a request within 14 days 
 33.24  after receipt: 
 33.25     (1) in the case of a request for an accounting, by 
 33.26  authenticating and sending to the debtor an accounting; and 
 33.27     (2) in the case of a request regarding a list of collateral 
 33.28  or a request regarding a statement of account, by authenticating 
 33.29  and sending to the debtor an approval or correction. 
 33.30     (c) [REQUEST REGARDING LIST OF COLLATERAL; STATEMENT 
 33.31  CONCERNING TYPE OF COLLATERAL.] A secured party that claims a 
 33.32  security interest in all of a particular type of collateral 
 33.33  owned by the debtor may comply with a request regarding a list 
 33.34  of collateral by sending to the debtor an authenticated record 
 33.35  including a statement to that effect within 14 days after 
 33.36  receipt. 
 34.1      (d) [REQUEST REGARDING LIST OF COLLATERAL; NO INTEREST 
 34.2   CLAIMED.] A person that receives a request regarding a list of 
 34.3   collateral, claims no interest in the collateral when it 
 34.4   receives the request, and claimed an interest in the collateral 
 34.5   at an earlier time shall comply with the request within 14 days 
 34.6   after receipt by sending to the debtor an authenticated record: 
 34.7      (1) disclaiming any interest in the collateral; and 
 34.8      (2) if known to the recipient, providing the name and 
 34.9   mailing address of any assignee of or successor to the 
 34.10  recipient's interest in the collateral. 
 34.11     (e) [REQUEST FOR ACCOUNTING OR REGARDING STATEMENT OF 
 34.12  ACCOUNT; NO INTEREST IN OBLIGATION CLAIMED.] A person that 
 34.13  receives a request for an accounting or a request regarding a 
 34.14  statement of account, claims no interest in the obligations when 
 34.15  it receives the request, and claimed an interest in the 
 34.16  obligations at an earlier time shall comply with the request 
 34.17  within 14 days after receipt by sending to the debtor an 
 34.18  authenticated record: 
 34.19     (1) disclaiming any interest in the obligations; and 
 34.20     (2) if known to the recipient, providing the name and 
 34.21  mailing address of any assignee of or successor to the 
 34.22  recipient's interest in the obligations. 
 34.23     (f) [CHARGES FOR RESPONSES.] A debtor is entitled without 
 34.24  charge to one response to a request under this section during 
 34.25  any six-month period.  The secured party may require payment of 
 34.26  a charge not exceeding $25 for each additional response. 
 34.27                               Part 3 
 34.28                      PERFECTION AND PRIORITY 
 34.29         SUBPART 1.  LAW GOVERNING PERFECTION AND PRIORITY 
 34.30     Sec. 21.  [336.9-301] [LAW GOVERNING PERFECTION AND 
 34.31  PRIORITY OF SECURITY INTERESTS.] 
 34.32     Except as otherwise provided in sections 336.9-303 through 
 34.33  336.9-306, the following rules determine the law governing 
 34.34  perfection, the effect of perfection or nonperfection, and the 
 34.35  priority of a security interest in collateral: 
 34.36     (1) Except as otherwise provided in this section, while a 
 35.1   debtor is located in a jurisdiction, the local law of that 
 35.2   jurisdiction governs perfection, the effect of perfection or 
 35.3   nonperfection, and the priority of a security interest in 
 35.4   collateral. 
 35.5      (2) While collateral is located in a jurisdiction, the 
 35.6   local law of that jurisdiction governs perfection, the effect of 
 35.7   perfection or nonperfection, and the priority of a possessory 
 35.8   security interest in that collateral. 
 35.9      (3) Except as otherwise provided in paragraph (4), while 
 35.10  negotiable documents, goods, instruments, money, or tangible 
 35.11  chattel paper is located in a jurisdiction, the local law of 
 35.12  that jurisdiction governs: 
 35.13     (A) perfection of a security interest in the goods by 
 35.14  filing a fixture filing; 
 35.15     (B) perfection of a security interest in timber to be cut; 
 35.16  and 
 35.17     (C) the effect of perfection or nonperfection and the 
 35.18  priority of a nonpossessory security interest in the collateral. 
 35.19     (4) The local law of the jurisdiction in which the wellhead 
 35.20  or minehead is located governs perfection, the effect of 
 35.21  perfection or nonperfection, and the priority of a security 
 35.22  interest in as-extracted collateral. 
 35.23     Sec. 22.  [336.9-302] [LAW GOVERNING PERFECTION AND 
 35.24  PRIORITY OF AGRICULTURAL LIENS.] 
 35.25     While farm products are located in a jurisdiction, the 
 35.26  local law of that jurisdiction governs perfection, the effect of 
 35.27  perfection or nonperfection, and the priority of an agricultural 
 35.28  lien on the farm products. 
 35.29     Sec. 23.  [336.9-303] [LAW GOVERNING PERFECTION AND 
 35.30  PRIORITY OF SECURITY INTERESTS IN GOODS COVERED BY A CERTIFICATE 
 35.31  OF TITLE.] 
 35.32     (a) [APPLICABILITY OF SECTION.] This section applies to 
 35.33  goods covered by a certificate of title, even if there is no 
 35.34  other relationship between the jurisdiction under whose 
 35.35  certificate of title the goods are covered and the goods or the 
 35.36  debtor. 
 36.1      (b) [WHEN GOODS COVERED BY CERTIFICATE OF TITLE.] Goods 
 36.2   become covered by a certificate of title when a valid 
 36.3   application for the certificate of title and the applicable fee 
 36.4   are delivered to the appropriate authority.  Goods cease to be 
 36.5   covered by a certificate of title at the earlier of the time the 
 36.6   certificate of title ceases to be effective under the law of the 
 36.7   issuing jurisdiction or the time the goods become covered 
 36.8   subsequently by a certificate of title issued by another 
 36.9   jurisdiction. 
 36.10     (c) [APPLICABLE LAW.] The local law of the jurisdiction 
 36.11  under whose certificate of title the goods are covered governs 
 36.12  perfection, the effect of perfection or nonperfection, and the 
 36.13  priority of a security interest in goods covered by a 
 36.14  certificate of title from the time the goods become covered by 
 36.15  the certificate of title until the goods cease to be covered by 
 36.16  the certificate of title. 
 36.17     Sec. 24.  [336.9-304] [LAW GOVERNING PERFECTION AND 
 36.18  PRIORITY OF SECURITY INTERESTS IN DEPOSIT ACCOUNTS.] 
 36.19     (a) [LAW OF BANK'S JURISDICTION GOVERNS.] The local law of 
 36.20  a bank's jurisdiction governs perfection, the effect of 
 36.21  perfection or nonperfection, and the priority of a security 
 36.22  interest in a deposit account maintained with that bank. 
 36.23     (b) [BANK'S JURISDICTION.] The following rules determine a 
 36.24  bank's jurisdiction for purposes of this part: 
 36.25     (1) If an agreement between the bank and the debtor 
 36.26  governing the deposit account expressly provides that a 
 36.27  particular jurisdiction is the bank's jurisdiction for purposes 
 36.28  of this part, this article, or this chapter, that jurisdiction 
 36.29  is the bank's jurisdiction. 
 36.30     (2) If paragraph (1) does not apply and an agreement 
 36.31  between the bank and its customer governing the deposit account 
 36.32  expressly provides that the agreement is governed by the law of 
 36.33  a particular jurisdiction, that jurisdiction is the bank's 
 36.34  jurisdiction. 
 36.35     (3) If neither paragraph (1) nor paragraph (2) applies and 
 36.36  an agreement between the bank and its customer governing the 
 37.1   deposit account expressly provides that the deposit account is 
 37.2   maintained at an office in a particular jurisdiction, that 
 37.3   jurisdiction is the bank's jurisdiction. 
 37.4      (4) If none of the preceding paragraphs applies, the bank's 
 37.5   jurisdiction is the jurisdiction in which the office identified 
 37.6   in an account statement as the office serving the customer's 
 37.7   account is located. 
 37.8      (5) If none of the preceding paragraphs applies, the bank's 
 37.9   jurisdiction is the jurisdiction in which the chief executive 
 37.10  office of the bank is located. 
 37.11     Sec. 25.  [336.9-305] [LAW GOVERNING PERFECTION AND 
 37.12  PRIORITY OF SECURITY INTERESTS IN INVESTMENT PROPERTY.] 
 37.13     (a) [GOVERNING LAW:  GENERAL RULES.] Except as otherwise 
 37.14  provided in subsection (c), the following rules apply: 
 37.15     (1) While a security certificate is located in a 
 37.16  jurisdiction, the local law of that jurisdiction governs 
 37.17  perfection, the effect of perfection or nonperfection, and the 
 37.18  priority of a security interest in the certificated security 
 37.19  represented thereby. 
 37.20     (2) The local law of the issuer's jurisdiction as specified 
 37.21  in section 336.8-110(d), governs perfection, the effect of 
 37.22  perfection or nonperfection, and the priority of a security 
 37.23  interest in an uncertificated security. 
 37.24     (3) The local law of the securities intermediary's 
 37.25  jurisdiction as specified in section 336.8-110(e), governs 
 37.26  perfection, the effect of perfection or nonperfection, and the 
 37.27  priority of a security interest in a security entitlement or 
 37.28  securities account. 
 37.29     (4) The local law of the commodity intermediary's 
 37.30  jurisdiction governs perfection, the effect of perfection or 
 37.31  nonperfection, and the priority of a security interest in a 
 37.32  commodity contract or commodity account. 
 37.33     (b) [COMMODITY INTERMEDIARY'S JURISDICTION.] The following 
 37.34  rules determine a commodity intermediary's jurisdiction for 
 37.35  purposes of this part: 
 37.36     (1) If an agreement between the commodity intermediary and 
 38.1   commodity customer governing the commodity account expressly 
 38.2   provides that a particular jurisdiction is the commodity 
 38.3   intermediary's jurisdiction for purposes of this part, this 
 38.4   article, or this chapter, that jurisdiction is the commodity 
 38.5   intermediary's jurisdiction. 
 38.6      (2) If paragraph (1) does not apply and an agreement 
 38.7   between the commodity intermediary and commodity customer 
 38.8   governing the commodity account expressly provides that the 
 38.9   agreement is governed by the law of a particular jurisdiction, 
 38.10  that jurisdiction is the commodity intermediary's jurisdiction. 
 38.11     (3) If neither paragraph (1) nor paragraph (2) applies and 
 38.12  an agreement between the commodity intermediary and commodity 
 38.13  customer governing the commodity account expressly provides that 
 38.14  the commodity account is maintained at an office in a particular 
 38.15  jurisdiction, that jurisdiction is the commodity intermediary's 
 38.16  jurisdiction. 
 38.17     (4) If none of the preceding paragraphs applies, the 
 38.18  commodity intermediary's jurisdiction is the jurisdiction in 
 38.19  which the office identified in an account statement as the 
 38.20  office serving the commodity customer's account is located. 
 38.21     (5) If none of the preceding paragraphs applies, the 
 38.22  commodity intermediary's jurisdiction is the jurisdiction in 
 38.23  which the chief executive office of the commodity intermediary 
 38.24  is located. 
 38.25     (c) [WHEN PERFECTION GOVERNED BY LAW OF JURISDICTION WHERE 
 38.26  DEBTOR LOCATED.] The local law of the jurisdiction in which the 
 38.27  debtor is located governs: 
 38.28     (1) perfection of a security interest in investment 
 38.29  property by filing; 
 38.30     (2) automatic perfection of a security interest in 
 38.31  investment property created by a broker or securities 
 38.32  intermediary; and 
 38.33     (3) automatic perfection of a security interest in a 
 38.34  commodity contract or commodity account created by a commodity 
 38.35  intermediary. 
 38.36     Sec. 26.  [336.9-306] [LAW GOVERNING PERFECTION AND 
 39.1   PRIORITY OF SECURITY INTERESTS IN LETTER OF CREDIT RIGHTS.] 
 39.2      (a) [GOVERNING LAW:  ISSUER'S OR NOMINATED PERSON'S 
 39.3   JURISDICTION.] Subject to subsection (c), the local law of the 
 39.4   issuer's jurisdiction or a nominated person's jurisdiction 
 39.5   governs perfection, the effect of perfection or nonperfection, 
 39.6   and the priority of a security interest in a letter of credit 
 39.7   right if the issuer's jurisdiction or nominated person's 
 39.8   jurisdiction is a state. 
 39.9      (b) [ISSUER'S OR NOMINATED PERSON'S JURISDICTION.] For 
 39.10  purposes of this part, an issuer's jurisdiction or nominated 
 39.11  person's jurisdiction is the jurisdiction whose law governs the 
 39.12  liability of the issuer or nominated person with respect to the 
 39.13  letter of credit right as provided in section 336.5-116. 
 39.14     (c) [WHEN SECTION NOT APPLICABLE.] This section does not 
 39.15  apply to a security interest that is perfected only under 
 39.16  section 336.9-308(d). 
 39.17     Sec. 27.  [336.9-307] [LOCATION OF DEBTOR.] 
 39.18     (a) [PLACE OF BUSINESS.] In this section, "place of 
 39.19  business" means a place where a debtor conducts its affairs. 
 39.20     (b) [DEBTOR'S LOCATION:  GENERAL RULES.] Except as 
 39.21  otherwise provided in this section, the following rules 
 39.22  determine a debtor's location: 
 39.23     (1) A debtor who is an individual is located at the 
 39.24  individual's principal residence. 
 39.25     (2) A debtor that is an organization and has only one place 
 39.26  of business is located at its place of business. 
 39.27     (3) A debtor that is an organization and has more than one 
 39.28  place of business is located at its chief executive office. 
 39.29     (c) [LIMITATION OF APPLICABILITY OF SUBSECTION 
 39.30  (B).] Subsection (b) applies only if a debtor's residence, place 
 39.31  of business, or chief executive office, as applicable, is 
 39.32  located in a jurisdiction whose law generally requires 
 39.33  information concerning the existence of a nonpossessory security 
 39.34  interest to be made generally available in a filing, recording, 
 39.35  or registration system as a condition or result of the security 
 39.36  interest's obtaining priority over the rights of a lien creditor 
 40.1   with respect to the collateral.  If subsection (b) does not 
 40.2   apply, the debtor is located in the District of Columbia. 
 40.3      (d) [CONTINUATION OF LOCATION:  CESSATION OF EXISTENCE, 
 40.4   ETC.] A person that ceases to exist, have a residence, or have a 
 40.5   place of business continues to be located in the jurisdiction 
 40.6   specified by subsections (b) and (c). 
 40.7      (e) [LOCATION OF REGISTERED ORGANIZATION ORGANIZED UNDER 
 40.8   STATE LAW.] A registered organization that is organized under 
 40.9   the law of a state is located in that state. 
 40.10     (f) [LOCATION OF REGISTERED ORGANIZATION ORGANIZED UNDER 
 40.11  FEDERAL LAW; BANK BRANCHES AND AGENCIES.] Except as otherwise 
 40.12  provided in subsection (i), a registered organization that is 
 40.13  organized under the law of the United States and a branch or 
 40.14  agency of a bank that is not organized under the law of the 
 40.15  United States or a state are located: 
 40.16     (1) in the state that the law of the United States 
 40.17  designates, if the law designates a state of location; 
 40.18     (2) in the state that the registered organization, branch, 
 40.19  or agency designates, if the law of the United States authorizes 
 40.20  the registered organization, branch, or agency to designate its 
 40.21  state of location; or 
 40.22     (3) in the District of Columbia, if neither paragraph (1) 
 40.23  nor paragraph (2) applies. 
 40.24     (g) [CONTINUATION OF LOCATION:  CHANGE IN STATUS OF 
 40.25  REGISTERED ORGANIZATION.] A registered organization continues to 
 40.26  be located in the jurisdiction specified by subsection (e) or 
 40.27  (f) notwithstanding: 
 40.28     (1) the suspension, revocation, forfeiture, or lapse of the 
 40.29  registered organization's status as such in its jurisdiction of 
 40.30  organization; or 
 40.31     (2) the dissolution, winding up, or cancellation of the 
 40.32  existence of the registered organization. 
 40.33     (h) [LOCATION OF UNITED STATES.] The United States is 
 40.34  located in the District of Columbia. 
 40.35     (i) [LOCATION OF FOREIGN BANK BRANCH OR AGENCY IF LICENSED 
 40.36  IN ONLY ONE STATE.] A branch or agency of a bank that is not 
 41.1   organized under the law of the United States or a state is 
 41.2   located in the state in which the branch or agency is licensed, 
 41.3   if all branches and agencies of the bank are licensed in only 
 41.4   one state. 
 41.5      (j) [LOCATION OF FOREIGN AIR CARRIER.] A foreign air 
 41.6   carrier under the Federal Aviation Act of 1958, as amended, is 
 41.7   located at the designated office of the agent upon which service 
 41.8   of process may be made on behalf of the carrier. 
 41.9      (k) [SECTION APPLIES ONLY TO THIS PART.] This section 
 41.10  applies only for purposes of this part. 
 41.11                       SUBPART 2.  PERFECTION 
 41.12     Sec. 28.  [336.9-308] [WHEN SECURITY INTEREST OR 
 41.13  AGRICULTURAL LIEN IS PERFECTED; CONTINUITY OF PERFECTION.] 
 41.14     (a) [PERFECTION OF SECURITY INTEREST.] Except as otherwise 
 41.15  provided in this section and section 336.9-309, a security 
 41.16  interest is perfected if it has attached and all of the 
 41.17  applicable requirements for perfection in sections 336.9-310 
 41.18  through 336.9-316 have been satisfied.  A security interest is 
 41.19  perfected when it attaches if the applicable requirements are 
 41.20  satisfied before the security interest attaches. 
 41.21     (b) [PERFECTION OF AGRICULTURAL LIEN.] An agricultural lien 
 41.22  is perfected if it has become effective and all of the 
 41.23  applicable requirements for perfection in section 336.9-310 have 
 41.24  been satisfied.  An agricultural lien is perfected when it 
 41.25  becomes effective if the applicable requirements are satisfied 
 41.26  before the agricultural lien becomes effective. 
 41.27     (c) [CONTINUOUS PERFECTION; PERFECTION BY DIFFERENT 
 41.28  METHODS.] A security interest or agricultural lien is perfected 
 41.29  continuously if it is originally perfected by one method under 
 41.30  this article and is later perfected by another method under this 
 41.31  article, without an intermediate period when it was unperfected. 
 41.32     (d) [SUPPORTING OBLIGATION.] Perfection of a security 
 41.33  interest in collateral also perfects a security interest in a 
 41.34  supporting obligation for the collateral. 
 41.35     (e) [LIEN SECURING RIGHT-TO-PAYMENT.] Perfection of a 
 41.36  security interest in a right-to-payment or performance also 
 42.1   perfects a security interest in a security interest, mortgage, 
 42.2   or other lien on personal or real property securing the right. 
 42.3      (f) [SECURITY ENTITLEMENT CARRIED IN SECURITIES 
 42.4   ACCOUNT.] Perfection of a security interest in a securities 
 42.5   account also perfects a security interest in the security 
 42.6   entitlements carried in the securities account. 
 42.7      (g) [COMMODITY CONTRACT CARRIED IN COMMODITY 
 42.8   ACCOUNT.] Perfection of a security interest in a commodity 
 42.9   account also perfects a security interest in the commodity 
 42.10  contracts carried in the commodity account. 
 42.11     Sec. 29.  [336.9-309] [SECURITY INTEREST PERFECTED UPON 
 42.12  ATTACHMENT.] The following security interests are perfected when 
 42.13  they attach: 
 42.14     (1) a purchase-money security interest in consumer goods, 
 42.15  except as otherwise provided in section 336.9-311(b) with 
 42.16  respect to consumer goods that are subject to a statute or 
 42.17  treaty described in section 336.9-311(a); 
 42.18     (2) an assignment of accounts or payment intangibles which 
 42.19  does not by itself or in conjunction with other assignments to 
 42.20  the same assignee transfer a significant part of the assignor's 
 42.21  outstanding accounts or payment intangibles; 
 42.22     (3) a sale of a payment intangible; 
 42.23     (4) a sale of a promissory note; 
 42.24     (5) a security interest created by the assignment of a 
 42.25  health-care-insurance receivable to the provider of the 
 42.26  health-care goods or services; 
 42.27     (6) a security interest arising under section 336.2-401, 
 42.28  336.2-505, 336.2-711(3), or 336.2A-508(5), until the debtor 
 42.29  obtains possession of the collateral; 
 42.30     (7) a security interest of a collecting bank arising under 
 42.31  section 336.4-210; 
 42.32     (8) a security interest of an issuer or nominated person 
 42.33  arising under section 336.5-118; 
 42.34     (9) a security interest arising in the delivery of a 
 42.35  financial asset under section 336.9-206(c); 
 42.36     (10) a security interest in investment property created by 
 43.1   a broker or securities intermediary; 
 43.2      (11) a security interest in a commodity contract or a 
 43.3   commodity account created by a commodity intermediary; 
 43.4      (12) an assignment for the benefit of all creditors of the 
 43.5   transferor and subsequent transfers by the assignee thereunder; 
 43.6   and 
 43.7      (13) a security interest created by an assignment of a 
 43.8   beneficial interest in a decedent's estate. 
 43.9      Sec. 30.  [336.9-310] [WHEN FILING REQUIRED TO PERFECT 
 43.10  SECURITY INTEREST OR AGRICULTURAL LIEN; SECURITY INTERESTS AND 
 43.11  AGRICULTURAL LIENS TO WHICH FILING PROVISIONS DO NOT APPLY.] 
 43.12     (a) [GENERAL RULE:  PERFECTION BY FILING.] Except as 
 43.13  otherwise provided in subsection (b) and section 336.9-312(b), a 
 43.14  financing statement must be filed to perfect all security 
 43.15  interests and agricultural liens. 
 43.16     (b) [EXCEPTIONS:  FILING NOT NECESSARY.] The filing of a 
 43.17  financing statement is not necessary to perfect a security 
 43.18  interest: 
 43.19     (1) that is perfected under section 336.9-308(d), (e), (f), 
 43.20  or (g); 
 43.21     (2) that is perfected under section 336.9-309 when it 
 43.22  attaches; 
 43.23     (3) in property subject to a statute, regulation, or treaty 
 43.24  described in section 336.9-311(a); 
 43.25     (4) in goods in possession of a bailee which is perfected 
 43.26  under section 336.9-312(d)(1) or (2); 
 43.27     (5) in certificated securities, documents, goods, or 
 43.28  instruments which is perfected without filing or possession 
 43.29  under section 336.9-312(e), (f), or (g); 
 43.30     (6) in collateral in the secured party's possession under 
 43.31  section 336.9-313; 
 43.32     (7) in a certificated security which is perfected by 
 43.33  delivery of the security certificate to the secured party under 
 43.34  section 336.9-313; 
 43.35     (8) in deposit accounts, electronic chattel paper, 
 43.36  investment property, or letter of credit rights which is 
 44.1   perfected by control under section 336.9-314; 
 44.2      (9) in proceeds which is perfected under section 336.9-315; 
 44.3   or 
 44.4      (10) that is perfected under section 336.9-316. 
 44.5      (c) [ASSIGNMENT OF PERFECTED SECURITY INTEREST.] If a 
 44.6   secured party assigns a perfected security interest or 
 44.7   agricultural lien, a filing under this article is not required 
 44.8   to continue the perfected status of the security interest 
 44.9   against creditors of and transferees from the original debtor. 
 44.10     Sec. 31.  [336.9-311] [PERFECTION OF SECURITY INTERESTS IN 
 44.11  PROPERTY SUBJECT TO CERTAIN STATUTES, REGULATIONS, AND 
 44.12  TREATIES.] 
 44.13     (a) [SECURITY INTEREST SUBJECT TO OTHER LAW.] Except as 
 44.14  otherwise provided in subsection (d), the filing of a financing 
 44.15  statement is not necessary or effective to perfect a security 
 44.16  interest in property subject to: 
 44.17     (1) a statute, regulation, or treaty of the United States 
 44.18  whose requirements for a security interest's obtaining priority 
 44.19  over the rights of a lien creditor with respect to the property 
 44.20  preempt section 336.9-310(a); 
 44.21     (2) sections 86B.820 to 86B.920 and 168A.01 to 168A.31; but 
 44.22  during any period which collateral is inventory held for sale by 
 44.23  a person who is in the business of selling goods of that kind, 
 44.24  the filing provisions of this article (part 5) apply to a 
 44.25  security interest in the collateral created by the person as a 
 44.26  debtor; or sections 300.11 to 300.115; or 
 44.27     (3) a certificate-of-title statute of another jurisdiction 
 44.28  which provides for a security interest to be indicated on the 
 44.29  certificate as a condition or result of the security interest's 
 44.30  obtaining priority over the rights of a lien creditor with 
 44.31  respect to the property. 
 44.32     (b) [COMPLIANCE WITH OTHER LAW.] Compliance with the 
 44.33  requirements of a statute, regulation, or treaty described in 
 44.34  subsection (a) for obtaining priority over the rights of a lien 
 44.35  creditor is equivalent to the filing of a financing statement 
 44.36  under this article.  Except as otherwise provided in subsection 
 45.1   (d) and sections 336.9-313 and 336.9-316(d) and (e) for goods 
 45.2   covered by a certificate of title, a security interest in 
 45.3   property subject to a statute, regulation, or treaty described 
 45.4   in subsection (a) may be perfected only by compliance with those 
 45.5   requirements, and a security interest so perfected remains 
 45.6   perfected notwithstanding a change in the use or transfer of 
 45.7   possession of the collateral. 
 45.8      (c) [DURATION AND RENEWAL OF PERFECTION.] Except as 
 45.9   otherwise provided in subsection (d) and section 336.9-316(d) 
 45.10  and (e), duration and renewal of perfection of a security 
 45.11  interest perfected by compliance with the requirements 
 45.12  prescribed by a statute, regulation, or treaty described in 
 45.13  subsection (a) are governed by the statute, regulation, or 
 45.14  treaty.  In other respects, the security interest is subject to 
 45.15  this article. 
 45.16     (d) [INAPPLICABILITY TO CERTAIN INVENTORY.] During any 
 45.17  period in which collateral subject to a statute specified in 
 45.18  subsection (a)(2) is inventory held for sale or lease by a 
 45.19  person or leased by that person as lessor and that person is in 
 45.20  the business of selling goods of that kind, this section does 
 45.21  not apply to a security interest in that collateral created by 
 45.22  that person. 
 45.23     Sec. 32.  [336.9-312] [PERFECTION OF SECURITY INTERESTS IN 
 45.24  CHATTEL PAPER, DEPOSIT ACCOUNTS, DOCUMENTS, GOODS COVERED BY 
 45.25  DOCUMENTS, INSTRUMENTS, INVESTMENT PROPERTY, LETTER OF CREDIT 
 45.26  RIGHTS, AND MONEY; PERFECTION BY PERMISSIVE FILING; TEMPORARY 
 45.27  PERFECTION WITHOUT FILING OR TRANSFER OF POSSESSION.] 
 45.28     (a) [PERFECTION BY FILING PERMITTED.] A security interest 
 45.29  in chattel paper, negotiable documents, instruments, or 
 45.30  investment property may be perfected by filing. 
 45.31     (b) [CONTROL OR POSSESSION OF CERTAIN COLLATERAL.] Except 
 45.32  as otherwise provided in section 336.9-315(c) and (d) for 
 45.33  proceeds: 
 45.34     (1) a security interest in a deposit account may be 
 45.35  perfected only by control under section 336.9-314; 
 45.36     (2) and except as otherwise provided in section 
 46.1   336.9-308(d), a security interest in a letter of credit right 
 46.2   may be perfected only by control under section 336.9-314; and 
 46.3      (3) a security interest in money may be perfected only by 
 46.4   the secured party's taking possession under section 336.9-313. 
 46.5      (c) [GOODS COVERED BY NEGOTIABLE DOCUMENT.] While goods are 
 46.6   in the possession of a bailee that has issued a negotiable 
 46.7   document covering the goods: 
 46.8      (1) a security interest in the goods may be perfected by 
 46.9   perfecting a security interest in the document; and 
 46.10     (2) a security interest perfected in the document has 
 46.11  priority over any security interest that becomes perfected in 
 46.12  the goods by another method during that time. 
 46.13     (d) [GOODS COVERED BY NONNEGOTIABLE DOCUMENT.] While goods 
 46.14  are in the possession of a bailee that has issued a 
 46.15  nonnegotiable document covering the goods, a security interest 
 46.16  in the goods may be perfected by: 
 46.17     (1) issuance of a document in the name of the secured 
 46.18  party; 
 46.19     (2) the bailee's receipt of notification of the secured 
 46.20  party's interest; or 
 46.21     (3) filing as to the goods. 
 46.22     (e) [TEMPORARY PERFECTION:  NEW VALUE.] A security interest 
 46.23  in certificated securities, negotiable documents, or instruments 
 46.24  is perfected without filing or the taking of possession for a 
 46.25  period of 20 days from the time it attaches to the extent that 
 46.26  it arises for new value given under an authenticated security 
 46.27  agreement. 
 46.28     (f) [TEMPORARY PERFECTION:  GOODS OR DOCUMENTS MADE 
 46.29  AVAILABLE TO DEBTOR.] A perfected security interest in a 
 46.30  negotiable document or goods in possession of a bailee, other 
 46.31  than one that has issued a negotiable document for the goods, 
 46.32  remains perfected for 20 days without filing if the secured 
 46.33  party makes available to the debtor the goods or documents 
 46.34  representing the goods for the purpose of: 
 46.35     (1) ultimate sale or exchange; or 
 46.36     (2) loading, unloading, storing, shipping, transshipping, 
 47.1   manufacturing, processing, or otherwise dealing with them in a 
 47.2   manner preliminary to their sale or exchange. 
 47.3      (g) [TEMPORARY PERFECTION:  DELIVERY OF SECURITY 
 47.4   CERTIFICATE OR INSTRUMENT TO DEBTOR.] A perfected security 
 47.5   interest in a certificated security or instrument remains 
 47.6   perfected for 20 days without filing if the secured party 
 47.7   delivers the security certificate or instrument to the debtor 
 47.8   for the purpose of: 
 47.9      (1) ultimate sale or exchange; or 
 47.10     (2) presentation, collection, enforcement, renewal, or 
 47.11  registration of transfer. 
 47.12     (h) [EXPIRATION OF TEMPORARY PERFECTION.] After the 20-day 
 47.13  period specified in subsection (e), (f), or (g) expires, 
 47.14  perfection depends upon compliance with this article. 
 47.15     Sec. 33.  [336.9-313] [WHEN POSSESSION BY OR DELIVERY TO 
 47.16  SECURED PARTY PERFECTS SECURITY INTEREST WITHOUT FILING.] 
 47.17     (a) [PERFECTION BY POSSESSION OR DELIVERY.] Except as 
 47.18  otherwise provided in subsection (b), a secured party may 
 47.19  perfect a security interest in negotiable documents, goods, 
 47.20  instruments, money, or tangible chattel paper by taking 
 47.21  possession of the collateral.  A secured party may perfect a 
 47.22  security interest in certificated securities by taking delivery 
 47.23  of the certificated securities under section 336.8-301. 
 47.24     (b) [GOODS COVERED BY CERTIFICATE OF TITLE.] With respect 
 47.25  to goods covered by a certificate of title issued by this state, 
 47.26  a secured party may perfect a security interest in the goods by 
 47.27  taking possession of the goods only in the circumstances 
 47.28  described in section 336.9-316(e). 
 47.29     (c) [COLLATERAL IN POSSESSION OF PERSON OTHER THAN DEBTOR.] 
 47.30  With respect to collateral other than certificated securities 
 47.31  and goods covered by a document, a secured party takes 
 47.32  possession of collateral in the possession of a person other 
 47.33  than the debtor, the secured party, or a lessee of the 
 47.34  collateral from the debtor in the ordinary course of the 
 47.35  debtor's business, when: 
 47.36     (1) the person in possession authenticates a record 
 48.1   acknowledging that it holds possession of the collateral for the 
 48.2   secured party's benefit; or 
 48.3      (2) the person takes possession of the collateral after 
 48.4   having authenticated a record acknowledging that it will hold 
 48.5   possession of collateral for the secured party's benefit. 
 48.6      (d) [TIME OF PERFECTION BY POSSESSION; CONTINUATION OF 
 48.7   PERFECTION.] If perfection of a security interest depends upon 
 48.8   possession of the collateral by a secured party, perfection 
 48.9   occurs no earlier than the time the secured party takes 
 48.10  possession and continues only while the secured party retains 
 48.11  possession. 
 48.12     (e) [TIME OF PERFECTION BY DELIVERY; CONTINUATION OF 
 48.13  PERFECTION.] A security interest in a certificated security in 
 48.14  registered form is perfected by delivery when delivery of the 
 48.15  certificated security occurs under section 336.8-301 and remains 
 48.16  perfected by delivery until the debtor obtains possession of the 
 48.17  security certificate. 
 48.18     (f) [ACKNOWLEDGMENT NOT REQUIRED.] A person in possession 
 48.19  of collateral is not required to acknowledge that it holds 
 48.20  possession for a secured party's benefit. 
 48.21     (g) [EFFECTIVENESS OF ACKNOWLEDGMENT; NO DUTIES OR 
 48.22  CONFIRMATION.] If a person acknowledges that it holds possession 
 48.23  for the secured party's benefit: 
 48.24     (1) the acknowledgment is effective under subsection (c) or 
 48.25  section 336.8-301(a), even if the acknowledgment violates the 
 48.26  rights of a debtor; and 
 48.27     (2) unless the person otherwise agrees or law other than 
 48.28  this article otherwise provides, the person does not owe any 
 48.29  duty to the secured party and is not required to confirm the 
 48.30  acknowledgment to another person. 
 48.31     (h) [SECURED PARTY'S DELIVERY TO PERSON OTHER THAN DEBTOR.] 
 48.32  A secured party having possession of collateral does not 
 48.33  relinquish possession by delivering the collateral to a person 
 48.34  other than the debtor or a lessee of the collateral from the 
 48.35  debtor in the ordinary course of the debtor's business if the 
 48.36  person was instructed before the delivery or is instructed 
 49.1   contemporaneously with the delivery: 
 49.2      (1) to hold possession of the collateral for the secured 
 49.3   party's benefit; or 
 49.4      (2) to redeliver the collateral to the secured party. 
 49.5      (i) [EFFECT OF DELIVERY UNDER SUBSECTION (H); NO DUTIES OR 
 49.6   CONFIRMATION.] A secured party does not relinquish possession, 
 49.7   even if a delivery under subsection (h) violates the rights of a 
 49.8   debtor.  A person to which collateral is delivered under 
 49.9   subsection (h) does not owe any duty to the secured party and is 
 49.10  not required to confirm the delivery to another person unless 
 49.11  the person otherwise agrees or law other than this article 
 49.12  otherwise provides. 
 49.13     Sec. 34.  [336.9-314] [PERFECTION BY CONTROL.] 
 49.14     (a) [PERFECTION BY CONTROL.] A security interest in 
 49.15  investment property, deposit accounts, letter of credit rights, 
 49.16  or electronic chattel paper may be perfected by control of the 
 49.17  collateral under section 336.9-104, 336.9-105, 336.9-106, or 
 49.18  336.9-107. 
 49.19     (b) [SPECIFIED COLLATERAL:  TIME OF PERFECTION BY CONTROL; 
 49.20  CONTINUATION OF PERFECTION.] A security interest in deposit 
 49.21  accounts, electronic chattel paper, or letter of credit rights 
 49.22  is perfected by control under section 336.9-104, 336.9-105, or 
 49.23  336.9-107 when the secured party obtains control and remains 
 49.24  perfected by control only while the secured party retains 
 49.25  control. 
 49.26     (c) [INVESTMENT PROPERTY:  TIME OF PERFECTION BY CONTROL; 
 49.27  CONTINUATION OF PERFECTION.] A security interest in investment 
 49.28  property is perfected by control under section 336.9-106 from 
 49.29  the time the secured party obtains control and remains perfected 
 49.30  by control until: 
 49.31     (1) the secured party does not have control; and 
 49.32     (2) one of the following occurs: 
 49.33     (A) if the collateral is a certificated security, the 
 49.34  debtor has or acquires possession of the security certificate; 
 49.35     (B) if the collateral is an uncertificated security, the 
 49.36  issuer has registered or registers the debtor as the registered 
 50.1   owner; or 
 50.2      (C) if the collateral is a security entitlement, the debtor 
 50.3   is or becomes the entitlement holder. 
 50.4      Sec. 35.  [336.9-315] [SECURED PARTY'S RIGHTS ON 
 50.5   DISPOSITION OF COLLATERAL AND IN PROCEEDS.] 
 50.6      (a) [DISPOSITION OF COLLATERAL:  CONTINUATION OF SECURITY 
 50.7   INTEREST OR AGRICULTURAL LIEN; PROCEEDS.] Except as otherwise 
 50.8   provided in this article and in section 336.2-403(2): 
 50.9      (1) a security interest or agricultural lien continues in 
 50.10  collateral notwithstanding sale, lease, license, exchange, or 
 50.11  other disposition thereof unless the secured party authorized 
 50.12  the disposition free of the security interest or agricultural 
 50.13  lien; and 
 50.14     (2) a security interest attaches to any identifiable 
 50.15  proceeds of collateral. 
 50.16     (b) [WHEN COMMINGLED PROCEEDS IDENTIFIABLE.] Proceeds that 
 50.17  are commingled with other property are identifiable proceeds: 
 50.18     (1) if the proceeds are goods, to the extent provided by 
 50.19  section 336.9-336; and 
 50.20     (2) if the proceeds are not goods, to the extent that the 
 50.21  secured party identifies the proceeds by a method of tracing, 
 50.22  including application of equitable principles, that is permitted 
 50.23  under law other than this article with respect to commingled 
 50.24  property of the type involved. 
 50.25     (c) [PERFECTION OF SECURITY INTEREST IN PROCEEDS.] A 
 50.26  security interest in proceeds is a perfected security interest 
 50.27  if the security interest in the original collateral was 
 50.28  perfected. 
 50.29     (d) [CONTINUATION OF PERFECTION.] A perfected security 
 50.30  interest in proceeds becomes unperfected on the 21st day after 
 50.31  the security interest attaches to the proceeds unless: 
 50.32     (1) the following conditions are satisfied: 
 50.33     (A) a filed financing statement covers the original 
 50.34  collateral; 
 50.35     (B) the proceeds are collateral in which a security 
 50.36  interest may be perfected by filing in the office in which the 
 51.1   financing statement has been filed; and 
 51.2      (C) the proceeds are not acquired with cash proceeds; 
 51.3      (2) the proceeds are identifiable cash proceeds; or 
 51.4      (3) the security interest in the proceeds is perfected 
 51.5   other than under subsection (c) when the security interest 
 51.6   attaches to the proceeds or within 20 days thereafter. 
 51.7      (e) [WHEN PERFECTED SECURITY INTEREST IN PROCEEDS BECOMES 
 51.8   UNPERFECTED.] If a filed financing statement covers the original 
 51.9   collateral, a security interest in proceeds which remains 
 51.10  perfected under subsection (d)(1) becomes unperfected at the 
 51.11  later of: 
 51.12     (1) when the effectiveness of the filed financing statement 
 51.13  lapses under section 336.9-515 or is terminated under section 
 51.14  336.9-513; or 
 51.15     (2) the 21st day after the security interest attaches to 
 51.16  the proceeds. 
 51.17     Sec. 36.  [336.9-316] [CONTINUED PERFECTION OF SECURITY 
 51.18  INTEREST FOLLOWING CHANGE IN GOVERNING LAW.] 
 51.19     (a) [GENERAL RULE:  EFFECT ON PERFECTION OF CHANGE IN 
 51.20  GOVERNING LAW.] A security interest perfected pursuant to the 
 51.21  law of the jurisdiction designated in section 336.9-301(1) or 
 51.22  336.9-305(c) remains perfected until the earliest of: 
 51.23     (1) the time perfection would have ceased under the law of 
 51.24  that jurisdiction; 
 51.25     (2) the expiration of four months after a change of the 
 51.26  debtor's location to another jurisdiction; or 
 51.27     (3) the expiration of one year after a transfer of 
 51.28  collateral to a person that thereby becomes a debtor and is 
 51.29  located in another jurisdiction. 
 51.30     (b) [SECURITY INTEREST PERFECTED OR UNPERFECTED UNDER LAW 
 51.31  OF NEW JURISDICTION.] If a security interest described in 
 51.32  subsection (a) becomes perfected under the law of the other 
 51.33  jurisdiction before the earliest time or event described in that 
 51.34  subsection, it remains perfected thereafter.  If the security 
 51.35  interest does not become perfected under the law of the other 
 51.36  jurisdiction before the earliest time or event, it becomes 
 52.1   unperfected and is deemed never to have been perfected as 
 52.2   against a purchaser of the collateral for value. 
 52.3      (c) [POSSESSORY SECURITY INTEREST IN COLLATERAL MOVED TO 
 52.4   NEW JURISDICTION.] A possessory security interest in collateral, 
 52.5   other than goods covered by a certificate of title and 
 52.6   as-extracted collateral consisting of goods, remains 
 52.7   continuously perfected if: 
 52.8      (1) the collateral is located in one jurisdiction and 
 52.9   subject to a security interest perfected under the law of that 
 52.10  jurisdiction; 
 52.11     (2) thereafter the collateral is brought into another 
 52.12  jurisdiction; and 
 52.13     (3) upon entry into the other jurisdiction, the security 
 52.14  interest is perfected under the law of the other jurisdiction. 
 52.15     (d) [GOODS COVERED BY CERTIFICATE OF TITLE FROM THIS 
 52.16  STATE.] Except as otherwise provided in subsection (e), a 
 52.17  security interest in goods covered by a certificate of title 
 52.18  which is perfected by any method under the law of another 
 52.19  jurisdiction when the goods become covered by a certificate of 
 52.20  title from this state remains perfected until the security 
 52.21  interest would have become unperfected under the law of the 
 52.22  other jurisdiction had the goods not become so covered. 
 52.23     (e) [WHEN SUBSECTION (D) SECURITY INTEREST BECOMES 
 52.24  UNPERFECTED AGAINST PURCHASERS.] A security interest described 
 52.25  in subsection (d) becomes unperfected as against a purchaser of 
 52.26  the goods for value and is deemed never to have been perfected 
 52.27  as against a purchaser of the goods for value if the applicable 
 52.28  requirements for perfection under section 336.9-311(b) or 
 52.29  336.9-313 are not satisfied before the earlier of: 
 52.30     (1) the time the security interest would have become 
 52.31  unperfected under the law of the other jurisdiction had the 
 52.32  goods not become covered by a certificate of title from this 
 52.33  state; or 
 52.34     (2) the expiration of four months after the goods had 
 52.35  become so covered. 
 52.36     (f) [CHANGE IN JURISDICTION OF BANK, ISSUER, NOMINATED 
 53.1   PERSON, SECURITIES INTERMEDIARY, OR COMMODITY INTERMEDIARY.] A 
 53.2   security interest in deposit accounts, letter of credit rights, 
 53.3   or investment property which is perfected under the law of the 
 53.4   bank's jurisdiction, the issuer's jurisdiction, a nominated 
 53.5   person's jurisdiction, the securities intermediary's 
 53.6   jurisdiction, or the commodity intermediary's jurisdiction, as 
 53.7   applicable, remains perfected until the earlier of: 
 53.8      (1) the time the security interest would have become 
 53.9   unperfected under the law of that jurisdiction; or 
 53.10     (2) the expiration of four months after a change of the 
 53.11  applicable jurisdiction to another jurisdiction. 
 53.12     (g) [SUBSECTION (F) SECURITY INTEREST PERFECTED OR 
 53.13  UNPERFECTED UNDER LAW OF NEW JURISDICTION.] If a security 
 53.14  interest described in subsection (f) becomes perfected under the 
 53.15  law of the other jurisdiction before the earlier of the time or 
 53.16  the end of the period described in that subsection, it remains 
 53.17  perfected thereafter.  If the security interest does not become 
 53.18  perfected under the law of the other jurisdiction before the 
 53.19  earlier of that time or the end of that period, it becomes 
 53.20  unperfected and is deemed never to have been perfected as 
 53.21  against a purchaser of the collateral for value. 
 53.22                        SUBPART 3.  PRIORITY 
 53.23     Sec. 37.  [336.9-317] [INTERESTS THAT TAKE PRIORITY OVER OR 
 53.24  TAKE FREE OF SECURITY INTEREST OR AGRICULTURAL LIEN.] 
 53.25     (a) [CONFLICTING SECURITY INTERESTS AND RIGHTS OF LIEN 
 53.26  CREDITORS.] A security interest or agricultural lien is 
 53.27  subordinate to the rights of: 
 53.28     (1) a person entitled to priority under section 336.9-322; 
 53.29  and 
 53.30     (2) except as otherwise provided in subsection (e), a 
 53.31  person that becomes a lien creditor before the earlier of the 
 53.32  time: 
 53.33     (A) the security interest or agricultural lien is 
 53.34  perfected; or 
 53.35     (B) one of the conditions specified in section 
 53.36  336.9-203(b)(3) is met 
 54.1   and a financing statement covering the collateral is filed. 
 54.2      (b) [BUYERS THAT RECEIVE DELIVERY.] Except as otherwise 
 54.3   provided in subsection (e), a buyer, other than a secured party, 
 54.4   of tangible chattel paper, documents, goods, instruments, or a 
 54.5   security certificate takes free of a security interest or 
 54.6   agricultural lien if the buyer gives value and receives delivery 
 54.7   of the collateral without knowledge of the security interest or 
 54.8   agricultural lien and before it is perfected. 
 54.9      (c) [LESSEES THAT RECEIVE DELIVERY.] Except as otherwise 
 54.10  provided in subsection (e), a lessee of goods takes free of a 
 54.11  security interest or agricultural lien if the lessee gives value 
 54.12  and receives delivery of the collateral without knowledge of the 
 54.13  security interest or agricultural lien and before it is 
 54.14  perfected. 
 54.15     (d) [LICENSEES AND BUYERS OF CERTAIN COLLATERAL.] A 
 54.16  licensee of a general intangible or a buyer, other than a 
 54.17  secured party, of accounts, electronic chattel paper, general 
 54.18  intangibles, or investment property other than a certificated 
 54.19  security takes free of a security interest if the licensee or 
 54.20  buyer gives value without knowledge of the security interest and 
 54.21  before it is perfected. 
 54.22     (e) [PURCHASE-MONEY SECURITY INTEREST.] Except as otherwise 
 54.23  provided in sections 336.9-320 and 336.9-321, if a person files 
 54.24  a financing statement with respect to a purchase-money security 
 54.25  interest before or within 20 days after the debtor receives 
 54.26  delivery of the collateral, the security interest takes priority 
 54.27  over the rights of a buyer, lessee, or lien creditor which arise 
 54.28  between the time the security interest attaches and the time of 
 54.29  filing. 
 54.30     Sec. 38.  [336.9-318] [NO INTEREST RETAINED IN RIGHT TO 
 54.31  PAYMENT THAT IS SOLD; RIGHTS AND TITLE OF SELLER OF ACCOUNT OR 
 54.32  CHATTEL PAPER WITH RESPECT TO CREDITORS AND PURCHASERS.] 
 54.33     (a) [SELLER RETAINS NO INTEREST.] A debtor that has sold an 
 54.34  account, chattel paper, payment intangible, or promissory note 
 54.35  does not retain a legal or equitable interest in the collateral 
 54.36  sold. 
 55.1      (b) [DEEMED RIGHTS OF DEBTOR IF BUYER'S SECURITY INTEREST 
 55.2   UNPERFECTED.] For purposes of determining the rights of 
 55.3   creditors of, and purchasers for value of an account or chattel 
 55.4   paper from, a debtor that has sold an account or chattel paper, 
 55.5   while the buyer's security interest is unperfected, the debtor 
 55.6   is deemed to have rights and title to the account or chattel 
 55.7   paper identical to those the debtor sold. 
 55.8      Sec. 39.  [336.9-319] [RIGHTS AND TITLE OF CONSIGNEE WITH 
 55.9   RESPECT TO CREDITORS AND PURCHASERS.] 
 55.10     (a) [CONSIGNEE HAS CONSIGNOR'S RIGHTS.] Except as otherwise 
 55.11  provided in subsection (b), for purposes of determining the 
 55.12  rights of creditors of, and purchasers for value of goods from, 
 55.13  a consignee, while the goods are in the possession of the 
 55.14  consignee, the consignee is deemed to have rights and title to 
 55.15  the goods identical to those the consignor had or had power to 
 55.16  transfer. 
 55.17     (b) [APPLICABILITY OF OTHER LAW.] For purposes of 
 55.18  determining the rights of a creditor of a consignee, law other 
 55.19  than this article determines the rights and title of a consignee 
 55.20  while goods are in the consignee's possession if, under this 
 55.21  part, a perfected security interest held by the consignor would 
 55.22  have priority over the rights of the creditor. 
 55.23     Sec. 40.  [336.9-320] [BUYER OF GOODS.] 
 55.24     (a) [BUYER IN ORDINARY COURSE OF BUSINESS.] Except as 
 55.25  otherwise provided in subsection (e), a buyer in ordinary course 
 55.26  of business, other than a person buying farm products from a 
 55.27  person engaged in farming operations, takes free of a security 
 55.28  interest created by the buyer's seller, even if the security 
 55.29  interest is perfected and the buyer knows of its existence. 
 55.30     (b) [BUYER OF CONSUMER GOODS.] Except as otherwise provided 
 55.31  in subsection (e), a buyer of goods from a person who used or 
 55.32  bought the goods for use primarily for personal, family, or 
 55.33  household purposes takes free of a security interest, even if 
 55.34  perfected, if the buyer buys: 
 55.35     (1) without knowledge of the security interest; 
 55.36     (2) for value; 
 56.1      (3) primarily for the buyer's personal, family, or 
 56.2   household purposes; and 
 56.3      (4) before the filing of a financing statement covering the 
 56.4   goods. 
 56.5      (c) [EFFECTIVENESS OF FILING FOR SUBSECTION (B).] To the 
 56.6   extent that it affects the priority of a security interest over 
 56.7   a buyer of goods under subsection (b), the period of 
 56.8   effectiveness of a filing made in the jurisdiction in which the 
 56.9   seller is located is governed by section 336.9-316(a) and (b). 
 56.10     (d) [BUYER IN ORDINARY COURSE OF BUSINESS AT WELLHEAD OR 
 56.11  MINEHEAD.] A buyer in ordinary course of business buying oil, 
 56.12  gas, or other minerals at the wellhead or minehead or after 
 56.13  extraction takes free of an interest arising out of an 
 56.14  encumbrance. 
 56.15     (e) [POSSESSORY SECURITY INTEREST NOT 
 56.16  AFFECTED.] Subsections (a) and (b) do not affect a security 
 56.17  interest in goods in the possession of the secured party under 
 56.18  section 336.9-313. 
 56.19     Sec. 41.  [336.9-321] [LICENSEE OF GENERAL INTANGIBLE AND 
 56.20  LESSEE OF GOODS IN ORDINARY COURSE OF BUSINESS.] 
 56.21     (a) [LICENSEE IN ORDINARY COURSE OF BUSINESS.] In this 
 56.22  section, "licensee in ordinary course of business" means a 
 56.23  person that becomes a licensee of a general intangible in good 
 56.24  faith, without knowledge that the license violates the rights of 
 56.25  another person in the general intangible, and in the ordinary 
 56.26  course from a person in the business of licensing general 
 56.27  intangibles of that kind.  A person becomes a licensee in the 
 56.28  ordinary course if the license to the person comports with the 
 56.29  usual or customary practices in the kind of business in which 
 56.30  the licensor is engaged or with the licensor's own usual or 
 56.31  customary practices. 
 56.32     (b) [RIGHTS OF LICENSEE IN ORDINARY COURSE OF BUSINESS.] A 
 56.33  licensee in ordinary course of business takes its rights under a 
 56.34  nonexclusive license free of a security interest in the general 
 56.35  intangible created by the licensor, even if the security 
 56.36  interest is perfected and the licensee knows of its existence. 
 57.1      (c) [RIGHTS OF LESSEE IN ORDINARY COURSE OF BUSINESS.] A 
 57.2   lessee in ordinary course of business takes its leasehold 
 57.3   interest free of a security interest in the goods created by the 
 57.4   lessor, even if the security interest is perfected and the 
 57.5   lessee knows of its existence. 
 57.6      Sec. 42.  [336.9-322] [PRIORITIES AMONG CONFLICTING 
 57.7   SECURITY INTERESTS IN AND AGRICULTURAL LIENS ON SAME 
 57.8   COLLATERAL.] 
 57.9      (a) [GENERAL PRIORITY RULES.] Except as otherwise provided 
 57.10  in this section, priority among conflicting security interests 
 57.11  and agricultural liens in the same collateral is determined 
 57.12  according to the following rules: 
 57.13     (1) Conflicting perfected security interests and 
 57.14  agricultural liens rank according to priority in time of filing 
 57.15  or perfection.  Priority dates from the earlier of the time a 
 57.16  filing covering the collateral is first made or the security 
 57.17  interest or agricultural lien is first perfected, if there is no 
 57.18  period thereafter when there is neither filing nor perfection. 
 57.19     (2) A perfected security interest or agricultural lien has 
 57.20  priority over a conflicting unperfected security interest or 
 57.21  agricultural lien. 
 57.22     (3) The first security interest or agricultural lien to 
 57.23  attach or become effective has priority if conflicting security 
 57.24  interests and agricultural liens are unperfected. 
 57.25     (b) [TIME OF PERFECTION:  PROCEEDS AND SUPPORTING 
 57.26  OBLIGATIONS.] For the purposes of subsection (a)(1): 
 57.27     (1) the time of filing or perfection as to a security 
 57.28  interest in collateral is also the time of filing or perfection 
 57.29  as to a security interest in proceeds; and 
 57.30     (2) the time of filing or perfection as to a security 
 57.31  interest in collateral supported by a supporting obligation is 
 57.32  also the time of filing or perfection as to a security interest 
 57.33  in the supporting obligation. 
 57.34     (c) [SPECIAL PRIORITY RULES:  PROCEEDS AND SUPPORTING 
 57.35  OBLIGATIONS.] Except as otherwise provided in subsection (f), a 
 57.36  security interest in collateral which qualifies for priority 
 58.1   over a conflicting security interest under section 336.9-327, 
 58.2   336.9-328, 336.9-329, 336.9-330, or 336.9-331 also has priority 
 58.3   over a conflicting security interest in: 
 58.4      (1) any supporting obligation for the collateral; and 
 58.5      (2) proceeds of the collateral if: 
 58.6      (A) the security interest in proceeds is perfected; 
 58.7      (B) the proceeds are cash proceeds or of the same type as 
 58.8   the collateral; and 
 58.9      (C) in the case of proceeds that are proceeds of proceeds, 
 58.10  all intervening proceeds are cash proceeds, proceeds of the same 
 58.11  type as the collateral, or an account relating to the collateral.
 58.12     (d) [FIRST-TO-FILE PRIORITY RULE FOR CERTAIN COLLATERAL.] 
 58.13  Subject to subsection (e) and except as otherwise provided in 
 58.14  subsection (f), if a security interest in chattel paper, deposit 
 58.15  accounts, negotiable documents, instruments, investment 
 58.16  property, or letter of credit rights is perfected by a method 
 58.17  other than filing, conflicting perfected security interests in 
 58.18  proceeds of the collateral rank according to priority in time of 
 58.19  filing. 
 58.20     (e) [APPLICABILITY OF SUBSECTION (D).] Subsection (d) 
 58.21  applies only if the proceeds of the collateral are not cash 
 58.22  proceeds, chattel paper, negotiable documents, instruments, 
 58.23  investment property, or letter of credit rights. 
 58.24     (f) [LIMITATIONS ON SUBSECTIONS (A) THROUGH 
 58.25  (E).] Subsections (a) through (e) are subject to: 
 58.26     (1) subsection (g) and the other provisions of this part; 
 58.27     (2) section 336.4-210 with respect to a security interest 
 58.28  of a collecting bank; 
 58.29     (3) section 336.5-118 with respect to a security interest 
 58.30  of an issuer or nominated person; and 
 58.31     (4) section 336.9-110 with respect to a security interest 
 58.32  arising under article 2 or 2A. 
 58.33     (g) [PRIORITY UNDER AGRICULTURAL LIEN STATUTE.] A perfected 
 58.34  agricultural lien on collateral has priority over a conflicting 
 58.35  security interest in or agricultural lien on the same collateral 
 58.36  if the statute creating the agricultural lien so provides. 
 59.1      Sec. 43.  [336.9-323] [FUTURE ADVANCES.] 
 59.2      (a) [WHEN PRIORITY BASED ON TIME OF ADVANCE.] Except as 
 59.3   otherwise provided in subsection (c), for purposes of 
 59.4   determining the priority of a perfected security interest under 
 59.5   section 336.9-322(a)(1), perfection of the security interest 
 59.6   dates from the time an advance is made to the extent that the 
 59.7   security interest secures an advance that: 
 59.8      (1) is made while the security interest is perfected only: 
 59.9      (A) under section 336.9-309 when it attaches; or 
 59.10     (B) temporarily under section 336.9-312(e), (f), or (g); 
 59.11  and 
 59.12     (2) is not made pursuant to a commitment entered into 
 59.13  before or while the security interest is perfected by a method 
 59.14  other than under section 336.9-309 or 336.9-312(e), (f), or (g). 
 59.15     (b) [LIEN CREDITOR.] Except as otherwise provided in 
 59.16  subsection (c), a security interest is subordinate to the rights 
 59.17  of a person that becomes a lien creditor to the extent that the 
 59.18  security interest secures an advance made more than 45 days 
 59.19  after the person becomes a lien creditor unless the advance is 
 59.20  made: 
 59.21     (1) without knowledge of the lien; or 
 59.22     (2) pursuant to a commitment entered into without knowledge 
 59.23  of the lien. 
 59.24     (c) [BUYER OF RECEIVABLES.] Subsections (a) and (b) do not 
 59.25  apply to a security interest held by a secured party that is a 
 59.26  buyer of accounts, chattel paper, payment intangibles, or 
 59.27  promissory notes or a consignor. 
 59.28     (d) [BUYER OF GOODS.] Except as otherwise provided in 
 59.29  subsection (e), a buyer of goods other than a buyer in ordinary 
 59.30  course of business takes free of a security interest to the 
 59.31  extent that it secures advances made after the earlier of: 
 59.32     (1) the time the secured party acquires knowledge of the 
 59.33  buyer's purchase; or 
 59.34     (2) 45 days after the purchase. 
 59.35     (e) [ADVANCES MADE PURSUANT TO COMMITMENT:  PRIORITY OF 
 59.36  BUYER OF GOODS.] Subsection (d) does not apply if the advance is 
 60.1   made pursuant to a commitment entered into without knowledge of 
 60.2   the buyer's purchase and before the expiration of the 45-day 
 60.3   period. 
 60.4      (f) [LESSEE OF GOODS.] Except as otherwise provided in 
 60.5   subsection (g), a lessee of goods, other than a lessee in 
 60.6   ordinary course of business, takes the leasehold interest free 
 60.7   of a security interest to the extent that it secures advances 
 60.8   made after the earlier of: 
 60.9      (1) the time the secured party acquires knowledge of the 
 60.10  lease; or 
 60.11     (2) 45 days after the lease contract becomes enforceable. 
 60.12     (g) [ADVANCES MADE PURSUANT TO COMMITMENT:  PRIORITY OF 
 60.13  LESSEE OF GOODS.] Subsection (f) does not apply if the advance 
 60.14  is made pursuant to a commitment entered into without knowledge 
 60.15  of the lease and before the expiration of the 45-day period. 
 60.16     Sec. 44.  [336.9-324] [PRIORITY OF PURCHASE-MONEY SECURITY 
 60.17  INTERESTS.] 
 60.18     (a) [GENERAL RULE:  PURCHASE-MONEY PRIORITY.] Except as 
 60.19  otherwise provided in subsection (g), a perfected purchase-money 
 60.20  security interest in goods other than inventory or livestock has 
 60.21  priority over a conflicting security interest in the same goods, 
 60.22  and, except as otherwise provided in section 336.9-327, a 
 60.23  perfected security interest in its identifiable proceeds also 
 60.24  has priority, if the purchase-money security interest is 
 60.25  perfected when the debtor receives possession of the collateral 
 60.26  or within 20 days thereafter. 
 60.27     (b) [INVENTORY PURCHASE-MONEY PRIORITY.] Subject to 
 60.28  subsection (c) and except as otherwise provided in subsection 
 60.29  (g), a perfected purchase-money security interest in inventory 
 60.30  has priority over a conflicting security interest in the same 
 60.31  inventory, has priority over a conflicting security interest in 
 60.32  chattel paper or an instrument constituting proceeds of the 
 60.33  inventory and in proceeds of the chattel paper, if so provided 
 60.34  in section 336.9-330, and, except as otherwise provided in 
 60.35  section 336.9-327, also has priority in identifiable cash 
 60.36  proceeds of the inventory to the extent the identifiable cash 
 61.1   proceeds are received on or before the delivery of the inventory 
 61.2   to a buyer, if: 
 61.3      (1) the purchase-money security interest is perfected when 
 61.4   the debtor receives possession of the inventory; 
 61.5      (2) the purchase-money secured party sends an authenticated 
 61.6   notification to the holder of the conflicting security interest; 
 61.7      (3) the holder of the conflicting security interest 
 61.8   receives the notification within five years before the debtor 
 61.9   receives possession of the inventory; and 
 61.10     (4) the notification states that the person sending the 
 61.11  notification has or expects to acquire a purchase-money security 
 61.12  interest in inventory of the debtor and describes the inventory. 
 61.13     (c) [HOLDERS OF CONFLICTING INVENTORY SECURITY INTERESTS TO 
 61.14  BE NOTIFIED.] Subsection (b)(2) through (4) apply only if the 
 61.15  holder of the conflicting security interest had filed a 
 61.16  financing statement covering the same types of inventory: 
 61.17     (1) if the purchase-money security interest is perfected by 
 61.18  filing, before the date of the filing; or 
 61.19     (2) if the purchase-money security interest is temporarily 
 61.20  perfected without filing or possession under section 
 61.21  336.9-312(f), before the beginning of the 20-day period 
 61.22  thereunder. 
 61.23     (d) [LIVESTOCK PURCHASE-MONEY PRIORITY.] Subject to 
 61.24  subsection (e) and except as otherwise provided in subsection 
 61.25  (g), a perfected purchase-money security interest in livestock 
 61.26  that are farm products has priority over a conflicting security 
 61.27  interest in the same livestock, and, except as otherwise 
 61.28  provided in section 336.9-327, a perfected security interest in 
 61.29  their identifiable proceeds and identifiable products in their 
 61.30  unmanufactured states also has priority, if: 
 61.31     (1) the purchase-money security interest is perfected when 
 61.32  the debtor receives possession of the livestock; 
 61.33     (2) the purchase-money secured party sends an authenticated 
 61.34  notification to the holder of the conflicting security interest; 
 61.35     (3) the holder of the conflicting security interest 
 61.36  receives the notification within six months before the debtor 
 62.1   receives possession of the livestock; and 
 62.2      (4) the notification states that the person sending the 
 62.3   notification has or expects to acquire a purchase-money security 
 62.4   interest in livestock of the debtor and describes the livestock. 
 62.5      (e) [HOLDERS OF CONFLICTING LIVESTOCK SECURITY INTERESTS TO 
 62.6   BE NOTIFIED.] Subsection (d)(2) through (4) apply only if the 
 62.7   holder of the conflicting security interest had filed a 
 62.8   financing statement covering the same types of livestock: 
 62.9      (1) if the purchase-money security interest is perfected by 
 62.10  filing, before the date of the filing; or 
 62.11     (2) if the purchase-money security interest is temporarily 
 62.12  perfected without filing or possession under section 
 62.13  336.9-312(f), before the beginning of the 20-day period 
 62.14  thereunder. 
 62.15     (f) [SOFTWARE PURCHASE-MONEY PRIORITY.] Except as otherwise 
 62.16  provided in subsection (g), a perfected purchase-money security 
 62.17  interest in software has priority over a conflicting security 
 62.18  interest in the same collateral, and, except as otherwise 
 62.19  provided in section 336.9-327, a perfected security interest in 
 62.20  its identifiable proceeds also has priority, to the extent that 
 62.21  the purchase-money security interest in the goods in which the 
 62.22  software was acquired for use has priority in the goods and 
 62.23  proceeds of the goods under this section. 
 62.24     (g) [CONFLICTING PURCHASE-MONEY SECURITY INTERESTS.] If 
 62.25  more than one security interest qualifies for priority in the 
 62.26  same collateral under subsection (a), (b), (d), or (f): 
 62.27     (1) a security interest securing an obligation incurred as 
 62.28  all or part of the price of the collateral has priority over a 
 62.29  security interest securing an obligation incurred for value 
 62.30  given to enable the debtor to acquire rights in or the use of 
 62.31  collateral; and 
 62.32     (2) in all other cases, section 336.9-322(a) applies to the 
 62.33  qualifying security interests. 
 62.34     Sec. 45.  [336.9-325] [PRIORITY OF SECURITY INTERESTS IN 
 62.35  TRANSFERRED COLLATERAL.] 
 62.36     (a) [SUBORDINATION OF SECURITY INTEREST IN TRANSFERRED 
 63.1   COLLATERAL.] Except as otherwise provided in subsection (b), a 
 63.2   security interest created by a debtor is subordinate to a 
 63.3   security interest in the same collateral created by another 
 63.4   person if: 
 63.5      (1) the debtor acquired the collateral subject to the 
 63.6   security interest created by the other person; 
 63.7      (2) the security interest created by the other person was 
 63.8   perfected when the debtor acquired the collateral; and 
 63.9      (3) there is no period thereafter when the security 
 63.10  interest is unperfected. 
 63.11     (b) [LIMITATION OF SUBSECTION (A) 
 63.12  SUBORDINATION.] Subsection (a) subordinates a security interest 
 63.13  only if the security interest: 
 63.14     (1) otherwise would have priority solely under section 
 63.15  336.9-322(a) or 336.9-324; or 
 63.16     (2) arose solely under section 336.2-711(3) or 
 63.17  336.2A-508(5). 
 63.18     Sec. 46.  [336.9-326] [PRIORITY OF SECURITY INTERESTS 
 63.19  CREATED BY NEW DEBTOR.] 
 63.20     (a) [SUBORDINATION OF SECURITY INTEREST CREATED BY NEW 
 63.21  DEBTOR.] Subject to subsection (b), a security interest created 
 63.22  by a new debtor which is perfected by a filed financing 
 63.23  statement that is effective solely under section 336.9-508 in 
 63.24  collateral in which a new debtor has or acquires rights is 
 63.25  subordinate to a security interest in the same collateral which 
 63.26  is perfected other than by a filed financing statement that is 
 63.27  effective solely under section 336.9-508. 
 63.28     (b) [PRIORITY UNDER OTHER PROVISIONS; MULTIPLE ORIGINAL 
 63.29  DEBTORS.] The other provisions of this part determine the 
 63.30  priority among conflicting security interests in the same 
 63.31  collateral perfected by filed financing statements that are 
 63.32  effective solely under section 336.9-508.  However, if the 
 63.33  security agreements to which a new debtor became bound as debtor 
 63.34  were not entered into by the same original debtor, the 
 63.35  conflicting security interests rank according to priority in 
 63.36  time of the new debtor's having become bound. 
 64.1      Sec. 47.  [336.9-327] [PRIORITY OF SECURITY INTERESTS IN 
 64.2   DEPOSIT ACCOUNT.] 
 64.3      The following rules govern priority among conflicting 
 64.4   security interests in the same deposit account: 
 64.5      (1) A security interest held by a secured party having 
 64.6   control of the deposit account under section 336.9-104 has 
 64.7   priority over a conflicting security interest held by a secured 
 64.8   party that does not have control. 
 64.9      (2) Except as otherwise provided in paragraphs (3) and (4), 
 64.10  security interests perfected by control under section 336.9-314 
 64.11  rank according to priority in time of obtaining control. 
 64.12     (3) Except as otherwise provided in paragraph (4), a 
 64.13  security interest held by the bank with which the deposit 
 64.14  account is maintained has priority over a conflicting security 
 64.15  interest held by another secured party. 
 64.16     (4) A security interest perfected by control under section 
 64.17  336.9-104(a)(3) has priority over a security interest held by 
 64.18  the bank with which the deposit account is maintained. 
 64.19     Sec. 48.  [336.9-328] [PRIORITY OF SECURITY INTERESTS IN 
 64.20  INVESTMENT PROPERTY.] 
 64.21     The following rules govern priority among conflicting 
 64.22  security interests in the same investment property: 
 64.23     (1) A security interest held by a secured party having 
 64.24  control of investment property under section 336.9-106 has 
 64.25  priority over a security interest held by a secured party that 
 64.26  does not have control of the investment property. 
 64.27     (2) Except as otherwise provided in paragraphs (3) and (4), 
 64.28  conflicting security interests held by secured parties each of 
 64.29  which has control under section 336.9-106 rank according to 
 64.30  priority in time of: 
 64.31     (A) if the collateral is a security, obtaining control; 
 64.32     (B) if the collateral is a security entitlement carried in 
 64.33  a securities account and: 
 64.34     (i) if the secured party obtained control under section 
 64.35  336.8-106(d)(1), the secured party's becoming the person for 
 64.36  which the securities account is maintained; 
 65.1      (ii) if the secured party obtained control under section 
 65.2   336.8-106(d)(2), the securities intermediary's agreement to 
 65.3   comply with the secured party's entitlement orders with respect 
 65.4   to security entitlements carried or to be carried in the 
 65.5   securities account; or 
 65.6      (iii) if the secured party obtained control through another 
 65.7   person under section 336.8-106(d)(3), the time on which priority 
 65.8   would be based under this paragraph if the other person were the 
 65.9   secured party; or 
 65.10     (C) if the collateral is a commodity contract carried with 
 65.11  a commodity intermediary, the satisfaction of the requirement 
 65.12  for control specified in section 336.9-106(b)(2) with respect to 
 65.13  commodity contracts carried or to be carried with the commodity 
 65.14  intermediary. 
 65.15     (3) A security interest held by a securities intermediary 
 65.16  in a security entitlement or a securities account maintained 
 65.17  with the securities intermediary has priority over a conflicting 
 65.18  security interest held by another secured party. 
 65.19     (4) A security interest held by a commodity intermediary in 
 65.20  a commodity contract or a commodity account maintained with the 
 65.21  commodity intermediary has priority over a conflicting security 
 65.22  interest held by another secured party. 
 65.23     (5) A security interest in a certificated security in 
 65.24  registered form which is perfected by taking delivery under 
 65.25  section 336.9-313(a) and not by control under section 336.9-314 
 65.26  has priority over a conflicting security interest perfected by a 
 65.27  method other than control. 
 65.28     (6) Conflicting security interests created by a broker, 
 65.29  securities intermediary, or commodity intermediary which are 
 65.30  perfected without control under section 336.9-106 rank equally. 
 65.31     (7) In all other cases, priority among conflicting security 
 65.32  interests in investment property is governed by sections 
 65.33  336.9-322 and 336.9-323. 
 65.34     Sec. 49.  [336.9-329] [PRIORITY OF SECURITY INTERESTS IN 
 65.35  LETTER OF CREDIT RIGHT.] 
 65.36     The following rules govern priority among conflicting 
 66.1   security interests in the same letter of credit right: 
 66.2      (1) A security interest held by a secured party having 
 66.3   control of the letter of credit right under section 336.9-107 
 66.4   has priority to the extent of its control over a conflicting 
 66.5   security interest held by a secured party that does not have 
 66.6   control. 
 66.7      (2) Security interests perfected by control under section 
 66.8   336.9-314 rank according to priority in time of obtaining 
 66.9   control. 
 66.10     Sec. 50.  [336.9-330] [PRIORITY OF PURCHASER OF CHATTEL 
 66.11  PAPER OR INSTRUMENT.] 
 66.12     (a) [PURCHASER'S PRIORITY:  SECURITY INTEREST CLAIMED 
 66.13  MERELY AS PROCEEDS.] A purchaser of chattel paper has priority 
 66.14  over a security interest in the chattel paper which is claimed 
 66.15  merely as proceeds of inventory subject to a security interest 
 66.16  if: 
 66.17     (1) in good faith and in the ordinary course of the 
 66.18  purchaser's business, the purchaser gives new value and takes 
 66.19  possession of the chattel paper or obtains control of the 
 66.20  chattel paper under section 336.9-105; and 
 66.21     (2) the chattel paper does not indicate that it has been 
 66.22  assigned to an identified assignee other than the purchaser. 
 66.23     (b) [PURCHASER'S PRIORITY:  OTHER SECURITY INTERESTS.] A 
 66.24  purchaser of chattel paper has priority over a security interest 
 66.25  in the chattel paper which is claimed other than merely as 
 66.26  proceeds of inventory subject to a security interest if the 
 66.27  purchaser gives new value and takes possession of the chattel 
 66.28  paper or obtains control of the chattel paper under section 
 66.29  336.9-105 in good faith, in the ordinary course of the 
 66.30  purchaser's business, and without knowledge that the purchase 
 66.31  violates the rights of the secured party. 
 66.32     (c) [CHATTEL PAPER PURCHASER'S PRIORITY IN 
 66.33  PROCEEDS.] Except as otherwise provided in section 336.9-327, a 
 66.34  purchaser having priority in chattel paper under subsection (a) 
 66.35  or (b) also has priority in proceeds of the chattel paper to the 
 66.36  extent that: 
 67.1      (1) section 336.9-322 provides for priority in the 
 67.2   proceeds; or 
 67.3      (2) the proceeds consist of the specific goods covered by 
 67.4   the chattel paper or cash proceeds of the specific goods, even 
 67.5   if the purchaser's security interest in the proceeds is 
 67.6   unperfected. 
 67.7      (d) [INSTRUMENT PURCHASER'S PRIORITY.] Except as otherwise 
 67.8   provided in section 336.9-331(a), a purchaser of an instrument 
 67.9   has priority over a security interest in the instrument 
 67.10  perfected by a method other than possession if the purchaser 
 67.11  gives value and takes possession of the instrument in good faith 
 67.12  and without knowledge that the purchase violates the rights of 
 67.13  the secured party. 
 67.14     (e) [HOLDER OF PURCHASE-MONEY SECURITY INTEREST GIVES NEW 
 67.15  VALUE.] For purposes of subsections (a) and (b), the holder of a 
 67.16  purchase-money security interest in inventory gives new value 
 67.17  for chattel paper constituting proceeds of the inventory. 
 67.18     (f) [INDICATION OF ASSIGNMENT GIVES KNOWLEDGE.] For 
 67.19  purposes of subsections (b) and (d), if chattel paper or an 
 67.20  instrument indicates that it has been assigned to an identified 
 67.21  secured party other than the purchaser, a purchaser of the 
 67.22  chattel paper or instrument has knowledge that the purchase 
 67.23  violates the rights of the secured party. 
 67.24     Sec. 51.  [336.9-331] [PRIORITY OF RIGHTS OF PURCHASERS OF 
 67.25  INSTRUMENTS, DOCUMENTS, AND SECURITIES UNDER OTHER ARTICLES; 
 67.26  PRIORITY OF INTERESTS IN FINANCIAL ASSETS AND SECURITY 
 67.27  ENTITLEMENTS UNDER ARTICLE 8.] 
 67.28     (a) [RIGHTS UNDER ARTICLES 3, 7, AND 8 NOT LIMITED.] This 
 67.29  article does not limit the rights of a holder in due course of a 
 67.30  negotiable instrument, a holder to which a negotiable document 
 67.31  of title has been duly negotiated, or a protected purchaser of a 
 67.32  security.  These holders or purchasers take priority over an 
 67.33  earlier security interest, even if perfected, to the extent 
 67.34  provided in articles 3, 7, and 8. 
 67.35     (b) [PROTECTION UNDER ARTICLE 8.] This article does not 
 67.36  limit the rights of or impose liability on a person to the 
 68.1   extent that the person is protected against the assertion of a 
 68.2   claim under article 8. 
 68.3      (c) [FILING NOT NOTICE.] Filing under this article does not 
 68.4   constitute notice of a claim or defense to the holders, or 
 68.5   purchasers, or persons described in subsections (a) and (b). 
 68.6      Sec. 52.  [336.9-332] [TRANSFER OF MONEY; TRANSFER OF FUNDS 
 68.7   FROM DEPOSIT ACCOUNT.] 
 68.8      (a) [TRANSFEREE OF MONEY.] A transferee of money takes the 
 68.9   money free of a security interest unless the transferee acts in 
 68.10  collusion with the debtor in violating the rights of the secured 
 68.11  party. 
 68.12     (b) [TRANSFEREE OF FUNDS FROM DEPOSIT ACCOUNT.] A 
 68.13  transferee of funds from a deposit account takes the funds free 
 68.14  of a security interest in the deposit account unless the 
 68.15  transferee acts in collusion with the debtor in violating the 
 68.16  rights of the secured party. 
 68.17     Sec. 53.  [336.9-333] [PRIORITY OF CERTAIN LIENS ARISING BY 
 68.18  OPERATION OF LAW.] 
 68.19     (a) [POSSESSORY LIEN.] In this section, "possessory lien" 
 68.20  means an interest, other than a security interest or an 
 68.21  agricultural lien: 
 68.22     (1) which secures payment or performance of an obligation 
 68.23  for services or materials furnished with respect to goods by a 
 68.24  person in the ordinary course of the person's business; 
 68.25     (2) which is created by statute or rule of law in favor of 
 68.26  the person; and 
 68.27     (3) whose effectiveness depends on the person's possession 
 68.28  of the goods. 
 68.29     (b) [PRIORITY OF POSSESSORY LIEN.] A possessory lien on 
 68.30  goods has priority over a security interest in the goods unless 
 68.31  the lien is created by a statute that expressly provides 
 68.32  otherwise. 
 68.33     Sec. 54.  [336.9-334] [PRIORITY OF SECURITY INTERESTS IN 
 68.34  FIXTURES AND CROPS.] 
 68.35     (a) [SECURITY INTEREST IN FIXTURES UNDER THIS ARTICLE.] A 
 68.36  security interest under this article may be created in goods 
 69.1   that are fixtures or may continue in goods that become 
 69.2   fixtures.  A security interest does not exist under this article 
 69.3   in ordinary building materials incorporated into an improvement 
 69.4   on land. 
 69.5      (b) [SECURITY INTEREST IN FIXTURES UNDER REAL PROPERTY 
 69.6   LAW.] This article does not prevent creation of an encumbrance 
 69.7   upon fixtures under real property law. 
 69.8      (c) [GENERAL RULE:  SUBORDINATION OF SECURITY INTEREST IN 
 69.9   FIXTURES.] In cases not governed by subsections (d) through (h), 
 69.10  a security interest in fixtures is subordinate to a conflicting 
 69.11  interest of an encumbrancer or owner of the related real 
 69.12  property other than the debtor. 
 69.13     (d) [FIXTURES PURCHASE-MONEY PRIORITY.] Except as otherwise 
 69.14  provided in subsection (h), a perfected security interest in 
 69.15  fixtures has priority over a conflicting interest of an 
 69.16  encumbrancer or owner of the real property if the debtor has an 
 69.17  interest of record in or is in possession of the real property 
 69.18  and: 
 69.19     (1) the security interest is a purchase-money security 
 69.20  interest; 
 69.21     (2) the interest of the encumbrancer or owner arises before 
 69.22  the goods become fixtures; and 
 69.23     (3) the security interest is perfected by a fixture filing 
 69.24  before the goods become fixtures or within 20 days thereafter. 
 69.25     (e) [PRIORITY OF SECURITY INTEREST IN FIXTURES OVER 
 69.26  INTERESTS IN REAL PROPERTY.] A perfected security interest in 
 69.27  fixtures has priority over a conflicting interest of an 
 69.28  encumbrancer or owner of the real property if: 
 69.29     (1) the debtor has an interest of record in the real 
 69.30  property or is in possession of the real property and the 
 69.31  security interest: 
 69.32     (A) is perfected by a fixture filing before the interest of 
 69.33  the encumbrancer or owner is of record; and 
 69.34     (B) has priority over any conflicting interest of a 
 69.35  predecessor in title of the encumbrancer or owner; 
 69.36     (2) before the goods become fixtures, the security interest 
 70.1   is perfected by any method permitted by this article and the 
 70.2   fixtures are readily removable: 
 70.3      (A) factory or office machines; 
 70.4      (B) equipment that is not primarily used or leased for use 
 70.5   in the operation of the real property; or 
 70.6      (C) replacements of domestic appliances that are consumer 
 70.7   goods; 
 70.8      (3) the conflicting interest is a lien on the real property 
 70.9   obtained by legal or equitable proceedings after the security 
 70.10  interest was perfected by any method permitted by this article; 
 70.11  or 
 70.12     (4) the security interest is: 
 70.13     (A) created in a manufactured home in a manufactured home 
 70.14  transaction; and 
 70.15     (B) perfected pursuant to a statute described in section 
 70.16  336.9-311(a)(2). 
 70.17     (f) [PRIORITY BASED ON CONSENT, DISCLAIMER, OR RIGHT TO 
 70.18  REMOVE.] A security interest in fixtures, whether or not 
 70.19  perfected, has priority over a conflicting interest of an 
 70.20  encumbrancer or owner of the real property if: 
 70.21     (1) the encumbrancer or owner has, in an authenticated 
 70.22  record, consented to the security interest or disclaimed an 
 70.23  interest in the goods as fixtures; or 
 70.24     (2) the debtor has a right to remove the goods as against 
 70.25  the encumbrancer or owner. 
 70.26     (g) [CONTINUATION OF PARAGRAPH (F)(2) PRIORITY.] The 
 70.27  priority of the security interest under paragraph (f)(2) 
 70.28  continues for a reasonable time if the debtor's right to remove 
 70.29  the goods as against the encumbrancer or owner terminates. 
 70.30     (h) [PRIORITY OF CONSTRUCTION MORTGAGE.] A mortgage is a 
 70.31  construction mortgage to the extent that it secures an 
 70.32  obligation incurred for the construction of an improvement on 
 70.33  land, including the acquisition cost of the land, if a recorded 
 70.34  record of the mortgage so indicates.  Except as otherwise 
 70.35  provided in subsections (e) and (f), a security interest in 
 70.36  fixtures is subordinate to a construction mortgage if a record 
 71.1   of the mortgage is recorded before the goods become fixtures and 
 71.2   the goods become fixtures before the completion of the 
 71.3   construction.  A mortgage has this priority to the same extent 
 71.4   as a construction mortgage to the extent that it is given to 
 71.5   refinance a construction mortgage. 
 71.6      (i) [PRIORITY OF SECURITY INTEREST IN CROPS.] A perfected 
 71.7   security interest in crops growing on real property has priority 
 71.8   over a conflicting interest of an encumbrancer or owner of the 
 71.9   real property if the debtor has an interest of record in or is 
 71.10  in possession of the real property. 
 71.11     (j) [SUBSECTION (i) PREVAILS.] Subsection (i) prevails over 
 71.12  any inconsistent provisions of the following statutes: 
 71.13     (1) section 557.12; and 
 71.14     (2) section 559.2091. 
 71.15     Sec. 55.  [336.9-335] [ACCESSIONS.] 
 71.16     (a) [CREATION OF SECURITY INTEREST IN ACCESSION.] A 
 71.17  security interest may be created in an accession and continues 
 71.18  in collateral that becomes an accession. 
 71.19     (b) [PERFECTION OF SECURITY INTEREST.] If a security 
 71.20  interest is perfected when the collateral becomes an accession, 
 71.21  the security interest remains perfected in the collateral. 
 71.22     (c) [PRIORITY OF SECURITY INTEREST.] Except as otherwise 
 71.23  provided in subsection (d), the other provisions of this part 
 71.24  determine the priority of a security interest in an accession. 
 71.25     (d) [COMPLIANCE WITH CERTIFICATE OF TITLE STATUTE.] A 
 71.26  security interest in an accession is subordinate to a security 
 71.27  interest in the whole which is perfected by compliance with the 
 71.28  requirements of a certificate of title statute under section 
 71.29  336.9-311(b). 
 71.30     (e) [REMOVAL OF ACCESSION AFTER DEFAULT.] After default, 
 71.31  subject to Part 6, a secured party may remove an accession from 
 71.32  other goods if the security interest in the accession has 
 71.33  priority over the claims of every person having an interest in 
 71.34  the whole. 
 71.35     (f) [REIMBURSEMENT FOLLOWING REMOVAL.] A secured party that 
 71.36  removes an accession from other goods under subsection (e) shall 
 72.1   promptly reimburse any holder of a security interest or other 
 72.2   lien on, or owner of, the whole or of the other goods, other 
 72.3   than the debtor, for the cost of repair of any physical injury 
 72.4   to the whole or the other goods.  The secured party need not 
 72.5   reimburse the holder or owner for any diminution in value of the 
 72.6   whole or the other goods caused by the absence of the accession 
 72.7   removed or by any necessity for replacing it.  A person entitled 
 72.8   to reimbursement may refuse permission to remove until the 
 72.9   secured party gives adequate assurance for the performance of 
 72.10  the obligation to reimburse. 
 72.11     Sec. 56.  [336.9-336] [COMMINGLED GOODS.] 
 72.12     (a) [COMMINGLED GOODS.] In this section, "commingled goods" 
 72.13  means goods that are physically united with other goods in such 
 72.14  a manner that their identity is lost in a product or mass. 
 72.15     (b) [NO SECURITY INTEREST IN COMMINGLED GOODS AS SUCH.] A 
 72.16  security interest does not exist in commingled goods as such.  
 72.17  However, a security interest may attach to a product or mass 
 72.18  that results when goods become commingled goods. 
 72.19     (c) [ATTACHMENT OF SECURITY INTEREST TO PRODUCT OR 
 72.20  MASS.] If collateral becomes commingled goods, a security 
 72.21  interest attaches to the product or mass. 
 72.22     (d) [PERFECTION OF SECURITY INTEREST.] If a security 
 72.23  interest in collateral is perfected before the collateral 
 72.24  becomes commingled goods, the security interest that attaches to 
 72.25  the product or mass under subsection (c) is perfected. 
 72.26     (e) [PRIORITY OF SECURITY INTEREST.] Except as otherwise 
 72.27  provided in subsection (f), the other provisions of this part 
 72.28  determine the priority of a security interest that attaches to 
 72.29  the product or mass under subsection (c). 
 72.30     (f) [CONFLICTING SECURITY INTERESTS IN PRODUCT OR MASS.] If 
 72.31  more than one security interest attaches to the product or mass 
 72.32  under subsection (c), the following rules determine priority: 
 72.33     (1) A security interest that is perfected under subsection 
 72.34  (d) has priority over a security interest that is unperfected at 
 72.35  the time the collateral becomes commingled goods. 
 72.36     (2) If more than one security interest is perfected under 
 73.1   subsection (d), the security interests rank equally in 
 73.2   proportion to the value of the collateral at the time it became 
 73.3   commingled goods. 
 73.4      Sec. 57.  [336.9-337] [PRIORITY OF SECURITY INTERESTS IN 
 73.5   GOODS COVERED BY CERTIFICATE OF TITLE.] 
 73.6      If, while a security interest in goods is perfected by any 
 73.7   method under the law of another jurisdiction, this state issues 
 73.8   a certificate of title that does not show that the goods are 
 73.9   subject to the security interest or contain a statement that 
 73.10  they may be subject to security interests not shown on the 
 73.11  certificate: 
 73.12     (1) a buyer of the goods, other than a person in the 
 73.13  business of selling goods of that kind, takes free of the 
 73.14  security interest if the buyer gives value and receives delivery 
 73.15  of the goods after issuance of the certificate and without 
 73.16  knowledge of the security interest; and 
 73.17     (2) the security interest is subordinate to a conflicting 
 73.18  security interest in the goods that attaches, and is perfected 
 73.19  under section 336.9-311(b), after issuance of the certificate 
 73.20  and without the conflicting secured party's knowledge of the 
 73.21  security interest. 
 73.22     Sec. 58.  [336.9-338] [PRIORITY OF SECURITY INTEREST OR 
 73.23  AGRICULTURAL LIEN PERFECTED BY FILED FINANCING STATEMENT 
 73.24  PROVIDING CERTAIN INCORRECT INFORMATION.] 
 73.25     If a security interest or agricultural lien is perfected by 
 73.26  a filed financing statement providing information described in 
 73.27  section 336.9-516(b)(5) which is incorrect at the time the 
 73.28  financing statement is filed: 
 73.29     (1) the security interest or agricultural lien is 
 73.30  subordinate to a conflicting perfected security interest in the 
 73.31  collateral to the extent that the holder of the conflicting 
 73.32  security interest gives value in reasonable reliance upon the 
 73.33  incorrect information; and 
 73.34     (2) a purchaser, other than a secured party, of the 
 73.35  collateral takes free of the security interest or agricultural 
 73.36  lien to the extent that, in reasonable reliance upon the 
 74.1   incorrect information, the purchaser gives value and, in the 
 74.2   case of chattel paper, documents, goods, instruments, or a 
 74.3   security certificate, receives delivery of the collateral. 
 74.4      Sec. 59.  [336.9-339] [PRIORITY SUBJECT TO SUBORDINATION.] 
 74.5      This article does not preclude subordination by agreement 
 74.6   by a person entitled to priority. 
 74.7                      SUBPART 4.  RIGHTS OF BANK 
 74.8      Sec. 60.  [336.9-340] [EFFECTIVENESS OF RIGHT OF RECOUPMENT 
 74.9   OR SET-OFF AGAINST DEPOSIT ACCOUNT.] 
 74.10     (a) [EXERCISE OF RECOUPMENT OR SET-OFF.] Except as 
 74.11  otherwise provided in subsection (c), a bank with which a 
 74.12  deposit account is maintained may exercise any right of 
 74.13  recoupment or set-off against a secured party that holds a 
 74.14  security interest in the deposit account. 
 74.15     (b) [RECOUPMENT OR SET-OFF NOT AFFECTED BY SECURITY 
 74.16  INTEREST.] Except as otherwise provided in subsection (c), the 
 74.17  application of this article to a security interest in a deposit 
 74.18  account does not affect a right of recoupment or set-off of the 
 74.19  secured party as to a deposit account maintained with the 
 74.20  secured party. 
 74.21     (c) [WHEN SET-OFF INEFFECTIVE.] The exercise by a bank of a 
 74.22  set-off against a deposit account is ineffective against a 
 74.23  secured party that holds a security interest in the deposit 
 74.24  account which is perfected by control under section 
 74.25  336.9-104(a)(3), if the set-off is based on a claim against the 
 74.26  debtor. 
 74.27     Sec. 61.  [336.9-341] [BANK'S RIGHTS AND DUTIES WITH 
 74.28  RESPECT TO DEPOSIT ACCOUNT.] 
 74.29     Except as otherwise provided in section 336.9-340(c), and 
 74.30  unless the bank otherwise agrees in an authenticated record, a 
 74.31  bank's rights and duties with respect to a deposit account 
 74.32  maintained with the bank are not terminated, suspended, or 
 74.33  modified by: 
 74.34     (1) the creation, attachment, or perfection of a security 
 74.35  interest in the deposit account; 
 74.36     (2) the bank's knowledge of the security interest; or 
 75.1      (3) the bank's receipt of instructions from the secured 
 75.2   party. 
 75.3      Sec. 62.  [336.9-342] [BANK'S RIGHT TO REFUSE TO ENTER INTO 
 75.4   OR DISCLOSE EXISTENCE OF CONTROL AGREEMENT.] 
 75.5      This article does not require a bank to enter into an 
 75.6   agreement of the kind described in section 336.9-104(a)(2), even 
 75.7   if its customer so requests or directs.  A bank that has entered 
 75.8   into such an agreement is not required to confirm the existence 
 75.9   of the agreement to another person unless requested to do so by 
 75.10  its customer. 
 75.11                               Part 4 
 75.12                      RIGHTS OF THIRD PARTIES 
 75.13     Sec. 63.  [336.9-401] [ALIENABILITY OF DEBTOR'S RIGHTS.] 
 75.14     (a) [OTHER LAW GOVERNS ALIENABILITY; EXCEPTIONS.] Except as 
 75.15  otherwise provided in subsection (b) and sections 336.9-406, 
 75.16  336.9-407, 336.9-408, and 336.9-409, whether a debtor's rights 
 75.17  in collateral may be voluntarily or involuntarily transferred is 
 75.18  governed by law other than this article. 
 75.19     (b) [AGREEMENT DOES NOT PREVENT TRANSFER.] An agreement 
 75.20  between the debtor and secured party which prohibits a transfer 
 75.21  of the debtor's rights in collateral or makes the transfer a 
 75.22  default does not prevent the transfer from taking effect. 
 75.23     Sec. 64.  [336.9-402] [SECURED PARTY NOT OBLIGATED ON 
 75.24  CONTRACT OF DEBTOR OR IN TORT.] 
 75.25     The existence of a security interest, agricultural lien, or 
 75.26  authority given to a debtor to dispose of or use collateral, 
 75.27  without more, does not subject a secured party to liability in 
 75.28  contract or tort for the debtor's acts or omissions. 
 75.29     Sec. 65.  [336.9-403] [AGREEMENT NOT TO ASSERT DEFENSES 
 75.30  AGAINST ASSIGNEE.] 
 75.31     (a) [VALUE.] In this section, "value" has the meaning 
 75.32  provided in section 336.3-303(a). 
 75.33     (b) [AGREEMENT NOT TO ASSERT CLAIM OR DEFENSE.] Except as 
 75.34  otherwise provided in this section, an agreement between an 
 75.35  account debtor and an assignor not to assert against an assignee 
 75.36  any claim or defense that the account debtor may have against 
 76.1   the assignor is enforceable by an assignee that takes an 
 76.2   assignment: 
 76.3      (1) for value; 
 76.4      (2) in good faith; 
 76.5      (3) without notice of a claim of a property or possessory 
 76.6   right to the property assigned; and 
 76.7      (4) without notice of a defense or claim in recoupment of 
 76.8   the type that may be asserted against a person entitled to 
 76.9   enforce a negotiable instrument under section 336.3-305(a). 
 76.10     (c) [WHEN SUBSECTION (B) NOT APPLICABLE.] Subsection (b) 
 76.11  does not apply to defenses of a type that may be asserted 
 76.12  against a holder in due course of a negotiable instrument under 
 76.13  section 336.3-305(b). 
 76.14     (d) [OMISSION OF REQUIRED STATEMENT IN CONSUMER 
 76.15  TRANSACTION.] In a consumer transaction, if a record evidences 
 76.16  the account debtor's obligation, law other than this article 
 76.17  requires that the record include a statement to the effect that 
 76.18  the rights of an assignee are subject to claims or defenses that 
 76.19  the account debtor could assert against the original obligee, 
 76.20  and the record does not include such a statement: 
 76.21     (1) the record has the same effect as if the record 
 76.22  included such a statement; and 
 76.23     (2) the account debtor may assert against an assignee those 
 76.24  claims and defenses that would have been available if the record 
 76.25  included such a statement. 
 76.26     (e) [RULE FOR INDIVIDUAL UNDER OTHER LAW.] This section is 
 76.27  subject to law other than this article which establishes a 
 76.28  different rule for an account debtor who is an individual and 
 76.29  who incurred the obligation primarily for personal, family, or 
 76.30  household purposes. 
 76.31     (f) [OTHER LAW NOT DISPLACED.] Except as otherwise provided 
 76.32  in subsection (d), this section does not displace law other than 
 76.33  this article which gives effect to an agreement by an account 
 76.34  debtor not to assert a claim or defense against an assignee. 
 76.35     Sec. 66.  [336.9-404] [RIGHTS ACQUIRED BY ASSIGNEE; CLAIMS 
 76.36  AND DEFENSES AGAINST ASSIGNEE.] 
 77.1      (a) [ASSIGNEE'S RIGHTS SUBJECT TO TERMS, CLAIMS, AND 
 77.2   DEFENSES; EXCEPTIONS.] Unless an account debtor has made an 
 77.3   enforceable agreement not to assert defenses or claims, and 
 77.4   subject to subsections (b) through (e), the rights of an 
 77.5   assignee are subject to: 
 77.6      (1) all terms of the agreement between the account debtor 
 77.7   and assignor and any defense or claim in recoupment arising from 
 77.8   the transaction that gave rise to the contract; and 
 77.9      (2) any other defense or claim of the account debtor 
 77.10  against the assignor which accrues before the account debtor 
 77.11  receives a notification of the assignment authenticated by the 
 77.12  assignor or the assignee. 
 77.13     (b) [ACCOUNT DEBTOR'S CLAIM REDUCES AMOUNT OWED TO 
 77.14  ASSIGNEE.] Subject to subsection (c) and except as otherwise 
 77.15  provided in subsection (d), the claim of an account debtor 
 77.16  against an assignor may be asserted against an assignee under 
 77.17  subsection (a) only to reduce the amount the account debtor owes.
 77.18     (c) [RULE FOR INDIVIDUAL UNDER OTHER LAW.] This section is 
 77.19  subject to law other than this article which establishes a 
 77.20  different rule for an account debtor who is an individual and 
 77.21  who incurred the obligation primarily for personal, family, or 
 77.22  household purposes. 
 77.23     (d) [OMISSION OF REQUIRED STATEMENT IN CONSUMER 
 77.24  TRANSACTION.] In a consumer transaction, if a record evidences 
 77.25  the account debtor's obligation, law other than this article 
 77.26  requires that the record include a statement to the effect that 
 77.27  the account debtor's recovery against an assignee with respect 
 77.28  to claims and defenses against the assignor may not exceed 
 77.29  amounts paid by the account debtor under the record, and the 
 77.30  record does not include such a statement, the extent to which a 
 77.31  claim of an account debtor against the assignor may be asserted 
 77.32  against an assignee is determined as if the record included such 
 77.33  a statement. 
 77.34     (e) [INAPPLICABILITY TO HEALTH-CARE-INSURANCE 
 77.35  RECEIVABLE.] This section does not apply to an assignment of a 
 77.36  health-care-insurance receivable. 
 78.1      Sec. 67.  [336.9-405] [MODIFICATION OF ASSIGNED CONTRACT.] 
 78.2      (a) [EFFECT OF MODIFICATION ON ASSIGNEE.] A modification of 
 78.3   or substitution for an assigned contract is effective against an 
 78.4   assignee if made in good faith.  The assignee acquires 
 78.5   corresponding rights under the modified or substituted 
 78.6   contract.  The assignment may provide that the modification or 
 78.7   substitution is a breach of contract by the assignor.  This 
 78.8   subsection is subject to subsections (b) through (d). 
 78.9      (b) [APPLICABILITY OF SUBSECTION (A).] Subsection (a) 
 78.10  applies to the extent that: 
 78.11     (1) the right to payment or a part thereof under an 
 78.12  assigned contract has not been fully earned by performance; or 
 78.13     (2) the right to payment or a part thereof has been fully 
 78.14  earned by performance and the account debtor has not received 
 78.15  notification of the assignment under section 336.9-406(a). 
 78.16     (c) [RULE FOR INDIVIDUAL UNDER OTHER LAW.] This section is 
 78.17  subject to law other than this article which establishes a 
 78.18  different rule for an account debtor who is an individual and 
 78.19  who incurred the obligation primarily for personal, family, or 
 78.20  household purposes. 
 78.21     (d) [INAPPLICABILITY TO HEALTH-CARE-INSURANCE 
 78.22  RECEIVABLE.] This section does not apply to an assignment of a 
 78.23  health-care-insurance receivable. 
 78.24     Sec. 68.  [336.9-406] [DISCHARGE OF ACCOUNT DEBTOR; 
 78.25  NOTIFICATION OF ASSIGNMENT; IDENTIFICATION AND PROOF OF 
 78.26  ASSIGNMENT; RESTRICTIONS ON ASSIGNMENT OF ACCOUNTS, CHATTEL 
 78.27  PAPER, PAYMENT INTANGIBLES, AND PROMISSORY NOTES INEFFECTIVE.] 
 78.28     (a) [DISCHARGE OF ACCOUNT DEBTOR; EFFECT OF NOTIFICATION.] 
 78.29  Subject to subsections (b) through (i), an account debtor on an 
 78.30  account, chattel paper, or a payment intangible may discharge 
 78.31  its obligation by paying the assignor until, but not after, the 
 78.32  account debtor receives a notification, authenticated by the 
 78.33  assignor or the assignee, that the amount due or to become due 
 78.34  has been assigned and that payment is to be made to the 
 78.35  assignee.  After receipt of the notification, the account debtor 
 78.36  may discharge its obligation by paying the assignee and may not 
 79.1   discharge the obligation by paying the assignor. 
 79.2      (b) [WHEN NOTIFICATION INEFFECTIVE.] Subject to subsection 
 79.3   (h), notification is ineffective under subsection (a): 
 79.4      (1) if it does not reasonably identify the rights assigned; 
 79.5      (2) to the extent that an agreement between an account 
 79.6   debtor and a seller of a payment intangible limits the account 
 79.7   debtor's duty to pay a person other than the seller and the 
 79.8   limitation is effective under law other than this article; or 
 79.9      (3) at the option of an account debtor, if the notification 
 79.10  notifies the account debtor to make less than the full amount of 
 79.11  any installment or other periodic payment to the assignee, even 
 79.12  if: 
 79.13     (A) only a portion of the account, chattel paper, or 
 79.14  payment intangible has been assigned to that assignee; 
 79.15     (B) a portion has been assigned to another assignee; or 
 79.16     (C) the account debtor knows that the assignment to that 
 79.17  assignee is limited. 
 79.18     (c) [PROOF OF ASSIGNMENT.] Subject to subsection (h), if 
 79.19  requested by the account debtor, an assignee shall seasonably 
 79.20  furnish reasonable proof that the assignment has been made.  
 79.21  Unless the assignee complies, the account debtor may discharge 
 79.22  its obligation by paying the assignor, even if the account 
 79.23  debtor has received a notification under subsection (a). 
 79.24     (d) [TERM RESTRICTING ASSIGNMENT GENERALLY 
 79.25  INEFFECTIVE.] Except as otherwise provided in subsection (e) and 
 79.26  sections 336.2A-303 and 336.9-407, and subject to subsection 
 79.27  (h), a term in an agreement between an account debtor and an 
 79.28  assignor or in a promissory note is ineffective to the extent 
 79.29  that it: 
 79.30     (1) prohibits, restricts, or requires the consent of the 
 79.31  account debtor or person obligated on the promissory note to the 
 79.32  assignment or transfer of, or the creation, attachment, 
 79.33  perfection, or enforcement of a security interest in, the 
 79.34  account, chattel paper, payment intangible, or promissory note; 
 79.35  or 
 79.36     (2) provides that the assignment or transfer or the 
 80.1   creation, attachment, perfection, or enforcement of the security 
 80.2   interest may give rise to a default, breach, right of 
 80.3   recoupment, claim, defense, termination, right of termination, 
 80.4   or remedy under the account, chattel paper, payment intangible, 
 80.5   or promissory note. 
 80.6      (e) [INAPPLICABILITY OF SUBSECTION (D) TO CERTAIN SALES.] 
 80.7   Subsection (d) does not apply to the sale of a payment 
 80.8   intangible or promissory note. 
 80.9      (f) [LEGAL RESTRICTIONS ON ASSIGNMENT GENERALLY 
 80.10  INEFFECTIVE.] Except as otherwise provided in sections 
 80.11  336.2A-303 and 336.9-407, and subject to subsections (h) and 
 80.12  (i), a rule of law, statute, or regulation, that prohibits, 
 80.13  restricts, or requires the consent of a government, governmental 
 80.14  body or official, or account debtor to the assignment or 
 80.15  transfer of, or creation of a security interest in, an account 
 80.16  or chattel paper is ineffective to the extent that the rule of 
 80.17  law, statute, or regulation: 
 80.18     (1) prohibits, restricts, or requires the consent of the 
 80.19  government, governmental body or official, or account debtor to 
 80.20  the assignment or transfer of, or the creation, attachment, 
 80.21  perfection, or enforcement of a security interest in, the 
 80.22  account or chattel paper; or 
 80.23     (2) provides that the assignment or transfer or the 
 80.24  creation, attachment, perfection, or enforcement of the security 
 80.25  interest may give rise to a default, breach, right of 
 80.26  recoupment, claim, defense, termination, right of termination, 
 80.27  or remedy under the account or chattel paper. 
 80.28     (g) [SUBSECTION (B)(3) NOT WAIVABLE.] Subject to subsection 
 80.29  (h), an account debtor may not waive or vary its option under 
 80.30  subsection (b)(3). 
 80.31     (h) [RULE FOR INDIVIDUAL UNDER OTHER LAW.] This section is 
 80.32  subject to law other than this article which establishes a 
 80.33  different rule for an account debtor who is an individual and 
 80.34  who incurred the obligation primarily for personal, family, or 
 80.35  household purposes. 
 80.36     (i) [INAPPLICABILITY TO HEALTH-CARE-INSURANCE 
 81.1   RECEIVABLE.] This section does not apply to an assignment of a 
 81.2   health-care-insurance receivable. 
 81.3      Sec. 69.  [336.9-407] [RESTRICTIONS ON CREATION OR 
 81.4   ENFORCEMENT OF SECURITY INTEREST IN LEASEHOLD INTEREST OR IN 
 81.5   LESSOR'S RESIDUAL INTEREST.] 
 81.6      (a) [TERM RESTRICTING ASSIGNMENT GENERALLY 
 81.7   INEFFECTIVE.] Except as otherwise provided in subsection (b), a 
 81.8   term in a lease agreement is ineffective to the extent that it: 
 81.9      (1) prohibits, restricts, or requires the consent of a 
 81.10  party to the lease to the assignment or transfer of, or the 
 81.11  creation, attachment, perfection, or enforcement of a security 
 81.12  interest in, an interest of a party under the lease contract or 
 81.13  in the lessor's residual interest in the goods; or 
 81.14     (2) provides that the assignment or transfer or the 
 81.15  creation, attachment, perfection, or enforcement of the security 
 81.16  interest may give rise to a default, breach, right of 
 81.17  recoupment, claim, defense, termination, right of termination, 
 81.18  or remedy under the lease. 
 81.19     (b) [EFFECTIVENESS OF CERTAIN TERMS.] Except as otherwise 
 81.20  provided in section 336.2A-303(7), a term described in 
 81.21  subsection (a)(2) is effective to the extent that there is: 
 81.22     (1) a transfer by the lessee of the lessee's right of 
 81.23  possession or use of the goods in violation of the term; or 
 81.24     (2) a delegation of a material performance of either party 
 81.25  to the lease contract in violation of the term. 
 81.26     (c) [SECURITY INTEREST NOT MATERIAL IMPAIRMENT.] The 
 81.27  creation, attachment, perfection, or enforcement of a security 
 81.28  interest in the lessor's interest under the lease contract or 
 81.29  the lessor's residual interest in the goods is not a transfer 
 81.30  that materially impairs the lessee's prospect of obtaining 
 81.31  return performance or materially changes the duty of or 
 81.32  materially increases the burden or risk imposed on the lessee 
 81.33  within the purview of section 336.2A-303(4) unless, and then 
 81.34  only to the extent that, enforcement actually results in a 
 81.35  delegation of material performance of the lessor.  Even in that 
 81.36  event, the creation, attachment, perfection, and enforcement of 
 82.1   the security interest remain effective. 
 82.2      Sec. 70.  [336.9-408] [RESTRICTIONS ON ASSIGNMENT OF 
 82.3   PROMISSORY NOTES, HEALTH-CARE-INSURANCE RECEIVABLES, AND CERTAIN 
 82.4   GENERAL INTANGIBLES INEFFECTIVE.] 
 82.5      (a) [TERM RESTRICTING ASSIGNMENT GENERALLY 
 82.6   INEFFECTIVE.] Except as otherwise provided in subsection (b), a 
 82.7   term in a promissory note or in an agreement between an account 
 82.8   debtor and a debtor which relates to a health-care-insurance 
 82.9   receivable or a general intangible, including a contract, 
 82.10  permit, license, or franchise, and which term prohibits, 
 82.11  restricts, or requires the consent of the person obligated on 
 82.12  the promissory note or the account debtor to, the assignment or 
 82.13  transfer of, or creation, attachment, or perfection of a 
 82.14  security interest in, the promissory note, health-care-insurance 
 82.15  receivable, or general intangible, is ineffective to the extent 
 82.16  that the term: 
 82.17     (1) would impair the creation, attachment, or perfection of 
 82.18  a security interest; or 
 82.19     (2) provides that the assignment or transfer or the 
 82.20  creation, attachment, or perfection of the security interest may 
 82.21  give rise to a default, breach, right of recoupment, claim, 
 82.22  defense, termination, right of termination, or remedy under the 
 82.23  promissory note, health-care-insurance receivable, or general 
 82.24  intangible. 
 82.25     (b) [APPLICABILITY OF SUBSECTION (A) TO SALES OF CERTAIN 
 82.26  RIGHTS TO PAYMENT.] Subsection (a) applies to a security 
 82.27  interest in a payment intangible or promissory note only if the 
 82.28  security interest arises out of a sale of the payment intangible 
 82.29  or promissory note. 
 82.30     (c) [LEGAL RESTRICTIONS ON ASSIGNMENT GENERALLY 
 82.31  INEFFECTIVE.] A rule of law, statute, or regulation, that 
 82.32  prohibits, restricts, or requires the consent of a government, 
 82.33  governmental body or official, person obligated on a promissory 
 82.34  note, or account debtor to the assignment or transfer of, or 
 82.35  creation of a security interest in, a promissory note, 
 82.36  health-care-insurance receivable, or general intangible, 
 83.1   including a contract, permit, license, or franchise between an 
 83.2   account debtor and a debtor, is ineffective to the extent that 
 83.3   the rule of law, statute, or regulation: 
 83.4      (1) would impair the creation, attachment, or perfection of 
 83.5   a security interest; or 
 83.6      (2) provides that the assignment or transfer or the 
 83.7   creation, attachment, or perfection of the security interest may 
 83.8   give rise to a default, breach, right of recoupment, claim, 
 83.9   defense, termination, right of termination, or remedy under the 
 83.10  promissory note, health-care-insurance receivable, or general 
 83.11  intangible. 
 83.12     (d) [LIMITATION ON INEFFECTIVENESS UNDER SUBSECTIONS (A) 
 83.13  AND (C).] To the extent that a term in a promissory note or in 
 83.14  an agreement between an account debtor and a debtor which 
 83.15  relates to a health-care-insurance receivable or general 
 83.16  intangible or a rule of law, statute, or regulation described in 
 83.17  subsection (c) would be effective under law other than this 
 83.18  article but is ineffective under subsection (a) or (c), the 
 83.19  creation, attachment, or perfection of a security interest in 
 83.20  the promissory note, health-care-insurance receivable, or 
 83.21  general intangible: 
 83.22     (1) is not enforceable against the person obligated on the 
 83.23  promissory note or the account debtor; 
 83.24     (2) does not impose a duty or obligation on the person 
 83.25  obligated on the promissory note or the account debtor; 
 83.26     (3) does not require the person obligated on the promissory 
 83.27  note or the account debtor to recognize the security interest, 
 83.28  pay or render performance to the secured party, or accept 
 83.29  payment or performance from the secured party; 
 83.30     (4) does not entitle the secured party to use or assign the 
 83.31  debtor's rights under the promissory note, health-care-insurance 
 83.32  receivable, or general intangible, including any related 
 83.33  information or materials furnished to the debtor in the 
 83.34  transaction giving rise to the promissory note, 
 83.35  health-care-insurance receivable, or general intangible; 
 83.36     (5) does not entitle the secured party to use, assign, 
 84.1   possess, or have access to any trade secrets or confidential 
 84.2   information of the person obligated on the promissory note or 
 84.3   the account debtor; and 
 84.4      (6) does not entitle the secured party to enforce the 
 84.5   security interest in the promissory note, health-care-insurance 
 84.6   receivable, or general intangible. 
 84.7      Sec. 71.  [336.9-409] [RESTRICTIONS ON ASSIGNMENT OF LETTER 
 84.8   OF CREDIT RIGHTS INEFFECTIVE.] 
 84.9      (a) [TERM OR LAW RESTRICTING ASSIGNMENT GENERALLY 
 84.10  INEFFECTIVE.] A term in a letter of credit or a rule of law, 
 84.11  statute, regulation, custom, or practice applicable to the 
 84.12  letter of credit which prohibits, restricts, or requires the 
 84.13  consent of an applicant, issuer, or nominated person to a 
 84.14  beneficiary's assignment of or creation of a security interest 
 84.15  in a letter of credit right is ineffective to the extent that 
 84.16  the term or rule of law, statute, regulation, custom, or 
 84.17  practice: 
 84.18     (1) would impair the creation, attachment, or perfection of 
 84.19  a security interest in the letter of credit right; or 
 84.20     (2) provides that the assignment or the creation, 
 84.21  attachment, or perfection of the security interest may give rise 
 84.22  to a default, breach, right of recoupment, claim, defense, 
 84.23  termination, right of termination, or remedy under the letter of 
 84.24  credit right. 
 84.25     (b) [LIMITATION ON INEFFECTIVENESS UNDER SUBSECTION 
 84.26  (A).] To the extent that a term in a letter of credit is 
 84.27  ineffective under subsection (a) but would be effective under 
 84.28  law other than this article or a custom or practice applicable 
 84.29  to the letter of credit, to the transfer of a right to draw or 
 84.30  otherwise demand performance under the letter of credit, or to 
 84.31  the assignment of a right to proceeds of the letter of credit, 
 84.32  the creation, attachment, or perfection of a security interest 
 84.33  in the letter of credit right: 
 84.34     (1) is not enforceable against the applicant, issuer, 
 84.35  nominated person, or transferee beneficiary; 
 84.36     (2) imposes no duties or obligations on the applicant, 
 85.1   issuer, nominated person, or transferee beneficiary; and 
 85.2      (3) does not require the applicant, issuer, nominated 
 85.3   person, or transferee beneficiary to recognize the security 
 85.4   interest, pay or render performance to the secured party, or 
 85.5   accept payment or other performance from the secured party. 
 85.6                                Part 5 
 85.7                                FILING 
 85.8        SUBPART 1.  FILING OFFICE; CONTENTS AND EFFECTIVENESS 
 85.9                        OF FINANCING STATEMENT 
 85.10     Sec. 72.  [336.9-501] [FILING OFFICE.] 
 85.11     (a) [FILING OFFICES.] Except as otherwise provided in 
 85.12  subsection (b), if the local law of this state governs 
 85.13  perfection of a security interest or agricultural lien, the 
 85.14  office in which to file a financing statement to perfect the 
 85.15  security interest or agricultural lien is: 
 85.16     (1) the office designated for the filing or recording of a 
 85.17  record of a mortgage on the related real property, if: 
 85.18     (A) the collateral is as-extracted collateral or timber to 
 85.19  be cut; or 
 85.20     (B) the financing statement is filed as a fixture filing 
 85.21  and the collateral is goods that are or are to become fixtures; 
 85.22  or 
 85.23     (2) the central filing system operated by the office of the 
 85.24  secretary of state, in all other cases, including a case in 
 85.25  which the collateral is goods that are or are to become fixtures 
 85.26  and the financing statement is not filed as a fixture filing. 
 85.27     (b) [FILING OFFICE FOR TRANSMITTING UTILITIES.] The office 
 85.28  in which to file a financing statement to perfect a security 
 85.29  interest in collateral, including fixtures, of a transmitting 
 85.30  utility is the central filing system operated by the office of 
 85.31  the secretary of state.  The financing statement also 
 85.32  constitutes a fixture filing as to the collateral indicated in 
 85.33  the financing statement which is or is to become fixtures. 
 85.34     Sec. 73.  [336.9-502] [CONTENTS OF FINANCING STATEMENT; 
 85.35  RECORD OF MORTGAGE AS FINANCING STATEMENT; TIME OF FILING 
 85.36  FINANCING STATEMENT.] 
 86.1      (a) [SUFFICIENCY OF FINANCING STATEMENT.] Subject to 
 86.2   subsection (b), a financing statement is sufficient only if it: 
 86.3      (1) provides the name of the debtor; 
 86.4      (2) provides the name of the secured party or a 
 86.5   representative of the secured party; and 
 86.6      (3) indicates the collateral covered by the financing 
 86.7   statement. 
 86.8      (b) [REAL PROPERTY-RELATED FINANCING STATEMENTS.] Except as 
 86.9   otherwise provided in section 336.9-501(b), to be sufficient, a 
 86.10  financing statement that covers as-extracted collateral or 
 86.11  timber to be cut, or which is filed as a fixture filing and 
 86.12  covers goods that are or are to become fixtures, must satisfy 
 86.13  subsection (a) and also: 
 86.14     (1) indicate that it covers this type of collateral; 
 86.15     (2) indicate that it is to be filed for record in the real 
 86.16  property records; 
 86.17     (3) provide a description of the real property to which the 
 86.18  collateral is related sufficient to give constructive notice of 
 86.19  a mortgage under the law of this state if the description were 
 86.20  contained in a record of the mortgage of the real property; and 
 86.21     (4) if the debtor does not have an interest of record in 
 86.22  the real property, provide the name of a record owner. 
 86.23     (c) [RECORD OF MORTGAGE AS FINANCING STATEMENT.] A record 
 86.24  of a mortgage is effective, from the date of recording, as a 
 86.25  financing statement filed as a fixture filing or as a financing 
 86.26  statement covering as-extracted collateral or timber to be cut 
 86.27  only if: 
 86.28     (1) the record indicates the goods or accounts that it 
 86.29  covers; 
 86.30     (2) the goods are or are to become fixtures related to the 
 86.31  real property described in the record or the collateral is 
 86.32  related to the real property described in the record and is 
 86.33  as-extracted collateral or timber to be cut; 
 86.34     (3) the record satisfies the requirements for a financing 
 86.35  statement in this section other than an indication that it is to 
 86.36  be filed in the real property records; and 
 87.1      (4) the record is recorded. 
 87.2      (d) [FILING BEFORE SECURITY AGREEMENT OR ATTACHMENT.] A 
 87.3   financing statement may be filed before a security agreement is 
 87.4   made or a security interest otherwise attaches. 
 87.5      Sec. 74.  [336.9-503] [NAME OF DEBTOR AND SECURED PARTY.] 
 87.6      (a) [SUFFICIENCY OF DEBTOR'S NAME.] A financing statement 
 87.7   sufficiently provides the name of the debtor: 
 87.8      (1) if the debtor is a registered organization, only if the 
 87.9   financing statement provides the name of the debtor indicated on 
 87.10  the public record of the debtor's jurisdiction of organization 
 87.11  which shows the debtor to have been organized; 
 87.12     (2) if the debtor is a decedent's estate, only if the 
 87.13  financing statement provides the name of the decedent and 
 87.14  indicates that the debtor is an estate; 
 87.15     (3) if the debtor is a trust or a trustee acting with 
 87.16  respect to property held in trust, only if the financing 
 87.17  statement: 
 87.18     (A) provides the name specified for the trust in its 
 87.19  organic documents or, if no name is specified, provides the name 
 87.20  of the settlor and additional information sufficient to 
 87.21  distinguish the debtor from other trusts having one or more of 
 87.22  the same settlors; and 
 87.23     (B) indicates, in the debtor's name or otherwise, that the 
 87.24  debtor is a trust or is a trustee acting with respect to 
 87.25  property held in trust; and 
 87.26     (4) in other cases: 
 87.27     (A) if the debtor has a name, only if it provides the 
 87.28  individual or organizational name of the debtor; and 
 87.29     (B) if the debtor does not have a name, only if it provides 
 87.30  the names of the partners, members, associates, or other persons 
 87.31  comprising the debtor. 
 87.32     (b) [ADDITIONAL DEBTOR-RELATED INFORMATION.] A financing 
 87.33  statement that provides the name of the debtor in accordance 
 87.34  with subsection (a) is not rendered ineffective by the absence 
 87.35  of: 
 87.36     (1) a trade name or other name of the debtor; or 
 88.1      (2) unless required under subsection (a)(4)(B), names of 
 88.2   partners, members, associates, or other persons comprising the 
 88.3   debtor. 
 88.4      (c) [DEBTOR'S TRADE NAME INSUFFICIENT.] A financing 
 88.5   statement that provides only the debtor's trade name does not 
 88.6   sufficiently provide the name of the debtor. 
 88.7      (d) [REPRESENTATIVE CAPACITY.] Failure to indicate the 
 88.8   representative capacity of a secured party or representative of 
 88.9   a secured party does not affect the sufficiency of a financing 
 88.10  statement. 
 88.11     (e) [MULTIPLE DEBTORS AND SECURED PARTIES.] A financing 
 88.12  statement may provide the name of more than one debtor and the 
 88.13  name of more than one secured party. 
 88.14     Sec. 75.  [336.9-504] [INDICATION OF COLLATERAL.] 
 88.15     A financing statement sufficiently indicates the collateral 
 88.16  that it covers if the financing statement provides: 
 88.17     (1) a description of the collateral pursuant to section 
 88.18  336.9-108; or 
 88.19     (2) an indication that the financing statement covers all 
 88.20  assets or all personal property. 
 88.21     Sec. 76.  [336.9-505] [FILING AND COMPLIANCE WITH OTHER 
 88.22  STATUTES AND TREATIES FOR CONSIGNMENTS, LEASES, OTHER BAILMENTS, 
 88.23  AND OTHER TRANSACTIONS.] 
 88.24     (a) [USE OF TERMS OTHER THAN DEBTOR AND SECURED PARTY.] A 
 88.25  consignor, lessor, or other bailor of goods, a licensor, or a 
 88.26  buyer of a payment intangible or promissory note may file a 
 88.27  financing statement, or may comply with a statute or treaty 
 88.28  described in section 336.9-311(a), using the terms "consignor," 
 88.29  "consignee," "lessor," "lessee," "bailor," "bailee," "licensor," 
 88.30  "licensee," "owner," "registered owner," "buyer," "seller," or 
 88.31  words of similar import, instead of the terms "secured party" 
 88.32  and "debtor." 
 88.33     (b) [EFFECT OF FINANCING STATEMENT UNDER SUBSECTION 
 88.34  (A).] This part applies to the filing of a financing statement 
 88.35  under subsection (a) and, as appropriate, to compliance that is 
 88.36  equivalent to filing a financing statement under section 
 89.1   336.9-311(b), but the filing or compliance is not of itself a 
 89.2   factor in determining whether the collateral secures an 
 89.3   obligation.  If it is determined for another reason that the 
 89.4   collateral secures an obligation, a security interest held by 
 89.5   the consignor, lessor, bailor, licensor, owner, or buyer which 
 89.6   attaches to the collateral is perfected by the filing or 
 89.7   compliance. 
 89.8      Sec. 77.  [336.9-506] [EFFECT OF ERRORS OR OMISSIONS.] 
 89.9      (a) [MINOR ERRORS AND OMISSIONS.] A financing statement 
 89.10  substantially satisfying the requirements of this part is 
 89.11  effective, even if it has minor errors or omissions, unless the 
 89.12  errors or omissions make the financing statement seriously 
 89.13  misleading. 
 89.14     (b) [FINANCING STATEMENT SERIOUSLY MISLEADING.] Except as 
 89.15  otherwise provided in subsection (c), a financing statement that 
 89.16  fails sufficiently to provide the name of the debtor in 
 89.17  accordance with section 336.9-503(a) is seriously misleading. 
 89.18     (c) [FINANCING STATEMENT NOT SERIOUSLY MISLEADING.] If a 
 89.19  search of the records of the filing office under the debtor's 
 89.20  correct name, using the filing office's standard search logic, 
 89.21  if any, would disclose a financing statement that fails 
 89.22  sufficiently to provide the name of the debtor in accordance 
 89.23  with section 336.9-503(a), the name provided does not make the 
 89.24  financing statement seriously misleading. 
 89.25     (d) [DEBTOR'S CORRECT NAME.] For purposes of section 
 89.26  336.9-508(b), the "debtor's correct name" in subsection (c) 
 89.27  means the correct name of the new debtor. 
 89.28     Sec. 78.  [336.9-507] [EFFECT OF CERTAIN EVENTS ON 
 89.29  EFFECTIVENESS OF FINANCING STATEMENT.] 
 89.30     (a) [DISPOSITION.] A filed financing statement remains 
 89.31  effective with respect to collateral that is sold, exchanged, 
 89.32  leased, licensed, or otherwise disposed of and in which a 
 89.33  security interest or agricultural lien continues, even if the 
 89.34  secured party knows of or consents to the disposition. 
 89.35     (b) [INFORMATION BECOMING SERIOUSLY MISLEADING.] Except as 
 89.36  otherwise provided in subsection (c) and section 336.9-508, a 
 90.1   financing statement is not rendered ineffective if, after the 
 90.2   financing statement is filed, the information provided in the 
 90.3   financing statement becomes seriously misleading under section 
 90.4   336.9-506. 
 90.5      (c) [CHANGE IN DEBTOR'S NAME.] If a debtor so changes its 
 90.6   name that a filed financing statement becomes seriously 
 90.7   misleading under section 336.9-506: 
 90.8      (1) the financing statement is effective to perfect a 
 90.9   security interest in collateral acquired by the debtor before, 
 90.10  or within four months after, the change; and 
 90.11     (2) the financing statement is not effective to perfect a 
 90.12  security interest in collateral acquired by the debtor more than 
 90.13  four months after the change, unless an amendment to the 
 90.14  financing statement which renders the financing statement not 
 90.15  seriously misleading is filed within four months after the 
 90.16  change. 
 90.17     Sec. 79.  [336.9-508] [EFFECTIVENESS OF FINANCING STATEMENT 
 90.18  IF NEW DEBTOR BECOMES BOUND BY SECURITY AGREEMENT.] 
 90.19     (a) [FINANCING STATEMENT NAMING ORIGINAL DEBTOR.] Except as 
 90.20  otherwise provided in this section, a filed financing statement 
 90.21  naming an original debtor is effective to perfect a security 
 90.22  interest in collateral in which a new debtor has or acquires 
 90.23  rights to the extent that the financing statement would have 
 90.24  been effective had the original debtor acquired rights in the 
 90.25  collateral. 
 90.26     (b) [FINANCING STATEMENT BECOMING SERIOUSLY MISLEADING.] If 
 90.27  the difference between the name of the original debtor and that 
 90.28  of the new debtor causes a filed financing statement that is 
 90.29  effective under subsection (a) to be seriously misleading under 
 90.30  section 336.9-506: 
 90.31     (1) the financing statement is effective to perfect a 
 90.32  security interest in collateral acquired by the new debtor 
 90.33  before, and within four months after, the new debtor becomes 
 90.34  bound under section 336.9-203(d); and 
 90.35     (2) the financing statement is not effective to perfect a 
 90.36  security interest in collateral acquired by the new debtor more 
 91.1   than four months after the new debtor becomes bound under 
 91.2   section 336.9-203(d) unless an initial financing statement 
 91.3   providing the name of the new debtor is filed before the 
 91.4   expiration of that time. 
 91.5      (c) [WHEN SECTION NOT APPLICABLE.] This section does not 
 91.6   apply to collateral as to which a filed financing statement 
 91.7   remains effective against the new debtor under section 
 91.8   336.9-507(a). 
 91.9      Sec. 80.  [336.9-509] [PERSONS ENTITLED TO FILE A RECORD.] 
 91.10     (a) [PERSON ENTITLED TO FILE RECORD.] A person may file an 
 91.11  initial financing statement, amendment that adds collateral 
 91.12  covered by a financing statement, or amendment that adds a 
 91.13  debtor to a financing statement only if: 
 91.14     (1) the debtor authorizes the filing in an authenticated 
 91.15  record or pursuant to subsection (b) or (c); or 
 91.16     (2) the person holds an agricultural lien that has become 
 91.17  effective at the time of filing and the financing statement 
 91.18  covers only collateral in which the person holds an agricultural 
 91.19  lien. 
 91.20     (b) [SECURITY AGREEMENT AS AUTHORIZATION.] By 
 91.21  authenticating or becoming bound as debtor by a security 
 91.22  agreement, a debtor or new debtor authorizes the filing of an 
 91.23  initial financing statement, and an amendment, covering: 
 91.24     (1) the collateral described in the security agreement; and 
 91.25     (2) property that becomes collateral under section 
 91.26  336.9-315(a)(2), whether or not the security agreement expressly 
 91.27  covers proceeds. 
 91.28     (c) [PERSON ENTITLED TO FILE CERTAIN AMENDMENTS.] A person 
 91.29  may file an amendment other than an amendment that adds 
 91.30  collateral covered by a financing statement or an amendment that 
 91.31  adds a debtor to a financing statement only if: 
 91.32     (1) the secured party of record authorizes the filing; or 
 91.33     (2) the amendment is a termination statement for a 
 91.34  financing statement as to which the secured party of record has 
 91.35  failed to file or send a termination statement as required by 
 91.36  section 336.9-513(a) or (c), the debtor authorizes the filing, 
 92.1   and the termination statement indicates that the debtor 
 92.2   authorized it to be filed. 
 92.3      (d) [MULTIPLE SECURED PARTIES OF RECORD.] If there is more 
 92.4   than one secured party of record for a financing statement, each 
 92.5   secured party of record may authorize the filing of an amendment 
 92.6   under subsection (c). 
 92.7      Sec. 81.  [336.9-510] [EFFECTIVENESS OF FILED RECORD.] 
 92.8      (a) [FILED RECORD EFFECTIVE IF AUTHORIZED.] A filed record 
 92.9   is effective only to the extent that it was filed by a person 
 92.10  that may file it under section 336.9-509. 
 92.11     (b) [AUTHORIZATION BY ONE SECURED PARTY OF RECORD.] A 
 92.12  record authorized by one secured party of record does not affect 
 92.13  the financing statement with respect to another secured party of 
 92.14  record. 
 92.15     (c) [CONTINUATION STATEMENT NOT TIMELY FILED.] A 
 92.16  continuation statement that is not filed within the six-month 
 92.17  period prescribed by section 336.9-515(d) is ineffective. 
 92.18     Sec. 82.  [336.9-511] [SECURED PARTY OF RECORD.] 
 92.19     (a) [SECURED PARTY OF RECORD.] A secured party of record 
 92.20  with respect to a financing statement is a person whose name is 
 92.21  provided as the name of the secured party or a representative of 
 92.22  the secured party in an initial financing statement that has 
 92.23  been filed.  If an initial financing statement is filed under 
 92.24  section 336.9-514(a), the assignee named in the initial 
 92.25  financing statement is the secured party of record with respect 
 92.26  to the financing statement. 
 92.27     (b) [AMENDMENT NAMING SECURED PARTY OF RECORD.] If an 
 92.28  amendment of a financing statement which provides the name of a 
 92.29  person as a secured party or a representative of a secured party 
 92.30  is filed, the person named in the amendment is a secured party 
 92.31  of record.  If an amendment is filed under section 336.9-514(b), 
 92.32  the assignee named in the amendment is a secured party of record.
 92.33     (c) [AMENDMENT DELETING SECURED PARTY OF RECORD.] A person 
 92.34  remains a secured party of record until the filing of an 
 92.35  amendment of the financing statement which deletes the person. 
 92.36     Sec. 83.  [336.9-512] [AMENDMENT OF FINANCING STATEMENT.] 
 93.1      (a) [AMENDMENT OF INFORMATION IN FINANCING 
 93.2   STATEMENT.] Subject to section 336.9-509, a person may add or 
 93.3   delete collateral covered by, continue or terminate the 
 93.4   effectiveness of, or, subject to subsection (e), otherwise amend 
 93.5   the information provided in, a financing statement by filing an 
 93.6   amendment that: 
 93.7      (1) identifies, by its file number, the initial financing 
 93.8   statement to which the amendment relates; and 
 93.9      (2) if the amendment relates to an initial financing 
 93.10  statement filed or recorded in a filing office described in 
 93.11  section 336.9-501(a)(1), provides the information specified in 
 93.12  section 336.9-502(b). 
 93.13     (b) [PERIOD OF EFFECTIVENESS NOT AFFECTED.] Except as 
 93.14  otherwise provided in section 336.9-515, the filing of an 
 93.15  amendment does not extend the period of effectiveness of the 
 93.16  financing statement. 
 93.17     (c) [EFFECTIVENESS OF AMENDMENT ADDING COLLATERAL.] A 
 93.18  financing statement that is amended by an amendment that adds 
 93.19  collateral is effective as to the added collateral only from the 
 93.20  date of the filing of the amendment. 
 93.21     (d) [EFFECTIVENESS OF AMENDMENT ADDING DEBTOR.] A financing 
 93.22  statement that is amended by an amendment that adds a debtor is 
 93.23  effective as to the added debtor only from the date of the 
 93.24  filing of the amendment. 
 93.25     (e) [CERTAIN AMENDMENTS INEFFECTIVE.] An amendment is 
 93.26  ineffective to the extent it: 
 93.27     (1) purports to delete all debtors and fails to provide the 
 93.28  name of a debtor to be covered by the financing statement; or 
 93.29     (2) purports to delete all secured parties of record and 
 93.30  fails to provide the name of a new secured party of record. 
 93.31     Sec. 84.  [336.9-513] [TERMINATION STATEMENT.] 
 93.32     (a) [CONSUMER GOODS.] A secured party shall cause the 
 93.33  secured party of record for a financing statement to file a 
 93.34  termination statement for the financing statement if the 
 93.35  financing statement covers consumer goods and: 
 93.36     (1) there is no obligation secured by the collateral 
 94.1   covered by the financing statement and no commitment to make an 
 94.2   advance, incur an obligation, or otherwise give value; or 
 94.3      (2) the debtor did not authorize the filing of the initial 
 94.4   financing statement. 
 94.5      (b) [TIME FOR COMPLIANCE WITH SUBSECTION (A).] To comply 
 94.6   with subsection (a), a secured party shall cause the secured 
 94.7   party of record to file the termination statement: 
 94.8      (1) within one month after there is no obligation secured 
 94.9   by the collateral covered by the financing statement and no 
 94.10  commitment to make an advance, incur an obligation, or otherwise 
 94.11  give value; or 
 94.12     (2) if earlier, within 20 days after the secured party 
 94.13  receives an authenticated demand from a debtor. 
 94.14     (c) [OTHER COLLATERAL.] In cases not governed by subsection 
 94.15  (a), within 20 days after a secured party receives an 
 94.16  authenticated demand from a debtor, the secured party shall 
 94.17  cause the secured party of record for a financing statement to 
 94.18  send to the debtor a termination statement for the financing 
 94.19  statement or file the termination statement in the filing office 
 94.20  if: 
 94.21     (1) except in the case of a financing statement covering 
 94.22  accounts or chattel paper that has been sold or goods that are 
 94.23  the subject of a consignment, there is no obligation secured by 
 94.24  the collateral covered by the financing statement and no 
 94.25  commitment to make an advance, incur an obligation, or otherwise 
 94.26  give value; 
 94.27     (2) the financing statement covers accounts or chattel 
 94.28  paper that has been sold but as to which the account debtor or 
 94.29  other person obligated has discharged its obligation; 
 94.30     (3) the financing statement covers goods that were the 
 94.31  subject of a consignment to the debtor but are not in the 
 94.32  debtor's possession; or 
 94.33     (4) the debtor did not authorize the filing of the initial 
 94.34  financing statement. 
 94.35     (d) [EFFECT OF FILING TERMINATION STATEMENT.] Except as 
 94.36  otherwise provided in section 336.9-510, upon the filing of a 
 95.1   termination statement with the filing office, the financing 
 95.2   statement to which the termination statement relates ceases to 
 95.3   be effective.  Except as otherwise provided in section 
 95.4   336.9-510, for purposes of sections 336.9-519(g), 336.9-522(a), 
 95.5   and 336.9-523(c), the filing with the filing office of a 
 95.6   termination statement relating to a filing statement that 
 95.7   indicates that the debtor is a transmitting utility also causes 
 95.8   the effectiveness of the financing statement to lapse. 
 95.9      Sec. 85.  [336.9-514] [ASSIGNMENT OF POWERS OF SECURED 
 95.10  PARTY OF RECORD.] 
 95.11     (a) [ASSIGNMENT REFLECTED ON INITIAL FINANCING 
 95.12  STATEMENT.] Except as otherwise provided in subsection (c), an 
 95.13  initial financing statement may reflect an assignment of all of 
 95.14  the secured party's power to authorize an amendment to the 
 95.15  financing statement by providing the name and mailing address of 
 95.16  the assignee as the name and address of the secured party. 
 95.17     (b) [ASSIGNMENT OF FILED FINANCING STATEMENT.] Except as 
 95.18  otherwise provided in subsection (c), a secured party of record 
 95.19  may assign of record all or part of its power to authorize an 
 95.20  amendment to a financing statement by filing in the filing 
 95.21  office an amendment of the financing statement which: 
 95.22     (1) identifies, by its file number, the initial financing 
 95.23  statement to which it relates; 
 95.24     (2) provides the name of the assignor; and 
 95.25     (3) provides the name and mailing address of the assignee. 
 95.26     (c) [ASSIGNMENT OF RECORD OF MORTGAGE.] An assignment of 
 95.27  record of a security interest in a fixture covered by a record 
 95.28  of a mortgage which is effective as a financing statement filed 
 95.29  as a fixture filing under section 336.9-502(c) may be made only 
 95.30  by an assignment of record of the mortgage in the manner 
 95.31  provided by law of this state other than the Uniform Commercial 
 95.32  Code. 
 95.33     Sec. 86.  [336.9-515] [DURATION AND EFFECTIVENESS OF 
 95.34  FINANCING STATEMENT; EFFECT OF LAPSED FINANCING STATEMENT.] 
 95.35     (a) [FIVE-YEAR EFFECTIVENESS.] Except as otherwise provided 
 95.36  in subsections (b), (e), (f), and (g), a filed financing 
 96.1   statement is effective for a period of five years after the date 
 96.2   of filing. 
 96.3      (b) [PUBLIC FINANCE OR MANUFACTURED HOME 
 96.4   TRANSACTION.] Except as otherwise provided in subsections (e), 
 96.5   (f), and (g), an initial financing statement filed in connection 
 96.6   with a public finance transaction or manufactured home 
 96.7   transaction is effective for a period of 30 years after the date 
 96.8   of filing if it indicates that it is filed in connection with a 
 96.9   public finance transaction or manufactured home transaction. 
 96.10     (c) [LAPSE AND CONTINUATION OF FINANCING STATEMENT.] The 
 96.11  effectiveness of a filed financing statement lapses on the 
 96.12  expiration of the period of its effectiveness unless before the 
 96.13  lapse a continuation statement is filed pursuant to subsection 
 96.14  (d).  Upon lapse, a financing statement ceases to be effective 
 96.15  and any security interest or agricultural lien that was 
 96.16  perfected by the financing statement becomes unperfected, unless 
 96.17  the security interest is perfected otherwise.  If the security 
 96.18  interest or agricultural lien becomes unperfected upon lapse, it 
 96.19  is deemed never to have been perfected as against a purchaser of 
 96.20  the collateral for value. 
 96.21     (d) [WHEN CONTINUATION STATEMENT MAY BE FILED.] A 
 96.22  continuation statement may be filed only within six months 
 96.23  before the expiration of the five-year period specified in 
 96.24  subsection (a) or the 30-year period specified in subsection 
 96.25  (b), whichever is applicable. 
 96.26     (e) [EFFECT OF FILING CONTINUATION STATEMENT.] Except as 
 96.27  otherwise provided in section 336.9-510, upon timely filing of a 
 96.28  continuation statement, the effectiveness of the initial 
 96.29  financing statement continues for a period of five years 
 96.30  commencing on the day on which the financing statement would 
 96.31  have become ineffective in the absence of the filing.  Upon the 
 96.32  expiration of the five-year period, the financing statement 
 96.33  lapses in the same manner as provided in subsection (c), unless, 
 96.34  before the lapse, another continuation statement is filed 
 96.35  pursuant to subsection (d).  Succeeding continuation statements 
 96.36  may be filed in the same manner to continue the effectiveness of 
 97.1   the initial financing statement. 
 97.2      (f) [TRANSMITTING UTILITY FINANCING STATEMENT.] If a debtor 
 97.3   is a transmitting utility and a filed financing statement so 
 97.4   indicates, the financing statement is effective until a 
 97.5   termination statement is filed. 
 97.6      (g) [RECORD OF MORTGAGE AS FINANCING STATEMENT.] A record 
 97.7   of a mortgage that is effective as a financing statement filed 
 97.8   as a fixture filing under section 336.9-502(c) remains effective 
 97.9   as a financing statement filed as a fixture filing until the 
 97.10  mortgage is released or satisfied of record or its effectiveness 
 97.11  otherwise terminates as to the real property. 
 97.12     Sec. 87.  [336.9-516] [WHAT CONSTITUTES FILING; 
 97.13  EFFECTIVENESS OF FILING.] 
 97.14     (a) [WHAT CONSTITUTES FILING.] Except as otherwise provided 
 97.15  in subsection (b), communication of a record to a filing office 
 97.16  and tender of the filing fee or acceptance of the record by the 
 97.17  filing office constitutes filing. 
 97.18     (b) [REFUSAL TO ACCEPT RECORD; FILING DOES NOT 
 97.19  OCCUR.] Filing does not occur with respect to a record that a 
 97.20  filing office refuses to accept because: 
 97.21     (1) the record is not communicated by a method or medium of 
 97.22  communication authorized by the filing office; 
 97.23     (2) an amount equal to or greater than the applicable 
 97.24  filing fee is not tendered; 
 97.25     (3) the filing office is unable to index the record because:
 97.26     (A) in the case of an initial financing statement, the 
 97.27  record does not provide a name for the debtor; 
 97.28     (B) in the case of an amendment or correction statement, 
 97.29  the record: 
 97.30     (i) does not identify the initial financing statement as 
 97.31  required by section 336.9-512 or 336.9-518, as applicable; or 
 97.32     (ii) identifies an initial financing statement whose 
 97.33  effectiveness has lapsed under section 336.9-515; 
 97.34     (C) in the case of an initial financing statement that 
 97.35  provides the name of a debtor identified as an individual or an 
 97.36  amendment that provides a name of a debtor identified as an 
 98.1   individual which was not previously provided in the financing 
 98.2   statement to which the record relates, the record does not 
 98.3   identify the debtor's last name; or 
 98.4      (D) in the case of a record filed or recorded in the filing 
 98.5   office described in section 336.9-501(a)(1), the record does not 
 98.6   provide a sufficient description of the real property to which 
 98.7   it relates; 
 98.8      (4) in the case of an initial financing statement or an 
 98.9   amendment that adds a secured party of record, the record does 
 98.10  not provide a name and mailing address for the secured party of 
 98.11  record; 
 98.12     (5) in the case of an initial financing statement or an 
 98.13  amendment that provides a name of a debtor which was not 
 98.14  previously provided in the financing statement to which the 
 98.15  amendment relates, the record does not: 
 98.16     (A) provide a mailing address for the debtor; 
 98.17     (B) indicate whether the debtor is an individual or an 
 98.18  organization; or 
 98.19     (C) if the financing statement indicates that the debtor is 
 98.20  an organization, provide: 
 98.21     (i) a type of organization for the debtor; 
 98.22     (ii) a jurisdiction of organization for the debtor; or 
 98.23     (iii) an organizational identification number for the 
 98.24  debtor or indicate that the debtor has none; 
 98.25     (6) in the case of an assignment reflected in an initial 
 98.26  financing statement under section 336.9-514(a) or an amendment 
 98.27  filed under section 336.9-514(b), the record does not provide a 
 98.28  name and mailing address for the assignee; or 
 98.29     (7) in the case of a continuation statement, the record is 
 98.30  not filed within the six-month period prescribed by section 
 98.31  336.9-515(d). 
 98.32     (c) [RULES APPLICABLE TO SUBSECTION (B).] For purposes of 
 98.33  subsection (b): 
 98.34     (1) a record does not provide information if the filing 
 98.35  office is unable to read or decipher the information; and 
 98.36     (2) a record that does not indicate that it is an amendment 
 99.1   or identify an initial financing statement to which it relates, 
 99.2   as required by section 336.9-512, 336.9-514, or 336.9-518, is an 
 99.3   initial financing statement. 
 99.4      (d) [REFUSAL TO ACCEPT RECORD; RECORD EFFECTIVE AS FILED 
 99.5   RECORD.] A record that is communicated to the filing office with 
 99.6   tender of the filing fee, but which the filing office refuses to 
 99.7   accept for a reason other than one set forth in subsection (b), 
 99.8   is effective as a filed record except as against a purchaser of 
 99.9   the collateral which gives value in reasonable reliance upon the 
 99.10  absence of the record from the files. 
 99.11     Sec. 88.  [336.9-517] [EFFECT OF INDEXING ERRORS.] 
 99.12     The failure of the filing office to index a record 
 99.13  correctly does not affect the effectiveness of the filed record. 
 99.14     Sec. 89.  [336.9-518] [CLAIM CONCERNING INACCURATE OR 
 99.15  WRONGFULLY FILED RECORD.] 
 99.16     (a) [CORRECTION STATEMENT.] A person may file in the filing 
 99.17  office a correction statement with respect to a record indexed 
 99.18  there under the person's name if the person believes that the 
 99.19  record is inaccurate or was wrongfully filed. 
 99.20     (b) [SUFFICIENCY OF CORRECTION STATEMENT.] A correction 
 99.21  statement must: 
 99.22     (1) identify the record to which it relates by the file 
 99.23  number assigned to the initial financing statement to which the 
 99.24  record relates; 
 99.25     (2) indicate that it is a correction statement; and 
 99.26     (3) provide the basis for the person's belief that the 
 99.27  record is inaccurate and indicate the manner in which the person 
 99.28  believes the record should be amended to cure any inaccuracy or 
 99.29  provide the basis for the person's belief that the record was 
 99.30  wrongfully filed. 
 99.31     (c) [RECORD NOT AFFECTED BY CORRECTION STATEMENT.] The 
 99.32  filing of a correction statement does not affect the 
 99.33  effectiveness of an initial financing statement or other filed 
 99.34  record. 
 99.35         SUBPART 2.  DUTIES AND OPERATION OF FILING OFFICE 
 99.36     Sec. 90.  [336.9-519] [NUMBERING, MAINTAINING, AND INDEXING 
100.1   RECORDS; COMMUNICATING INFORMATION PROVIDED IN RECORDS.] 
100.2      (a) [FILING OFFICE DUTIES.] For each record filed in a 
100.3   filing office, the filing office shall: 
100.4      (1) assign a unique number to the filed record; 
100.5      (2) create a record that bears the number assigned to the 
100.6   filed record and the date and time of filing; 
100.7      (3) maintain the filed record for public inspection; and 
100.8      (4) index the filed record in accordance with subsections 
100.9   (c), (d), and (e). 
100.10     (b) [FILE NUMBER.] A file number assigned after July 1, 
100.11  2001, must include a digit that: 
100.12     (1) is mathematically derived from or related to the other 
100.13  digits of the file number; and 
100.14     (2) enables the filing office to detect whether a number 
100.15  communicated as the file number includes a single-digit or 
100.16  transpositional error. 
100.17     (c) [INDEXING:  GENERAL.] Except as otherwise provided in 
100.18  subsections (d) and (e), the filing office shall: 
100.19     (1) index an initial financing statement according to the 
100.20  name of the debtor and index all filed records relating to the 
100.21  initial financing statement in a manner that associates with one 
100.22  another an initial financing statement and all filed records 
100.23  relating to the initial financing statement; and 
100.24     (2) index a record that provides a name of a debtor which 
100.25  was not previously provided in the financing statement to which 
100.26  the record relates also according to the name that was not 
100.27  previously provided. 
100.28     (d) [INDEXING:  REAL PROPERTY-RELATED FINANCING STATEMENT.] 
100.29  If a financing statement is filed as a fixture filing or covers 
100.30  as-extracted collateral or timber to be cut, it must be filed 
100.31  for record and the filing office shall index it: 
100.32     (1) under the names of the debtor and of each owner of 
100.33  record shown on the financing statement as if they were the 
100.34  mortgagors under a mortgage of the real property described; and 
100.35     (2) to the extent that the law of this state provides for 
100.36  indexing of records of mortgages under the name of the 
101.1   mortgagee, under the name of the secured party as if the secured 
101.2   party were the mortgagee thereunder, or, if indexing is by 
101.3   description, as if the financing statement were a record of a 
101.4   mortgage of the real property described. 
101.5      (e) [INDEXING:  REAL PROPERTY-RELATED ASSIGNMENT.] If a 
101.6   financing statement is filed as a fixture filing or covers 
101.7   as-extracted collateral or timber to be cut, the filing office 
101.8   shall index an assignment filed under section 336.9-514(a) or an 
101.9   amendment filed under section 336.9-514(b): 
101.10     (1) under the name of the assignor as grantor; and 
101.11     (2) to the extent that the law of this state provides for 
101.12  indexing a record of the assignment of a mortgage under the name 
101.13  of the assignee, under the name of the assignee. 
101.14     (f) [RETRIEVAL AND ASSOCIATION CAPABILITY.] The filing 
101.15  office shall maintain a capability: 
101.16     (1) to retrieve a record by the name of the debtor and by 
101.17  the file number assigned to the initial financing statement to 
101.18  which the record relates; and 
101.19     (2) to associate and retrieve with one another an initial 
101.20  financing statement and each filed record relating to the 
101.21  initial financing statement. 
101.22     (g) [REMOVAL OF DEBTOR'S NAME.] The filing office may not 
101.23  remove a debtor's name from the index until one year after the 
101.24  effectiveness of a financing statement naming the debtor lapses 
101.25  under section 336.9-515 with respect to all secured parties of 
101.26  record. 
101.27     (h) [TIMELINESS OF FILING OFFICE PERFORMANCE.] The filing 
101.28  office shall perform the acts required by subsections (a) 
101.29  through (e) at the time and in the manner prescribed by filing 
101.30  office rule, but not later than two business days after the 
101.31  filing office receives the record in question. 
101.32     (i) [INAPPLICABILITY TO REAL PROPERTY-RELATED FILING 
101.33  OFFICE.] Subsections (b) and (h) do not apply to a filing office 
101.34  described in section 336.9-501(a)(1). 
101.35     Sec. 91.  [336.9-520] [ACCEPTANCE AND REFUSAL TO ACCEPT 
101.36  RECORD.] 
102.1      (a) [MANDATORY REFUSAL TO ACCEPT RECORD.] A filing office 
102.2   shall refuse to accept a record for filing for a reason set 
102.3   forth in section 336.9-516(b) and may refuse to accept a record 
102.4   for filing only for a reason set forth in section 336.9-516(b). 
102.5      (b) [COMMUNICATION CONCERNING REFUSAL.] If a filing office 
102.6   refuses to accept a record for filing, it shall communicate to 
102.7   the person that presented the record the fact of and reason for 
102.8   the refusal and the date and time the record would have been 
102.9   filed had the filing office accepted it.  The communication must 
102.10  be made at the time and in the manner prescribed by filing 
102.11  office rule, but in no event more than two business days after 
102.12  the filing office receives the record. 
102.13     (c) [WHEN FILED FINANCING STATEMENT EFFECTIVE.] A filed 
102.14  financing statement satisfying section 336.9-502(a) and (b) is 
102.15  effective, even if the filing office is required to refuse to 
102.16  accept it for filing under subsection (a).  However, section 
102.17  336.9-338 applies to a filed financing statement providing 
102.18  information described in section 336.9-516(b)(5) which is 
102.19  incorrect at the time the financing statement is filed. 
102.20     (d) [SEPARATE APPLICATION TO MULTIPLE DEBTORS.] If a record 
102.21  communicated to a filing office provides information that 
102.22  relates to more than one debtor, this part applies as to each 
102.23  debtor separately. 
102.24     Sec. 92.  [336.9-521] [UNIFORM FORM OF WRITTEN FINANCING 
102.25  STATEMENT AND AMENDMENT.] 
102.26     (a) [INITIAL FINANCING STATEMENT FORM.] A filing office 
102.27  that accepts written records may not refuse to accept a written 
102.28  initial financing statement in the form and format adopted by 
102.29  the National Conference of Commissioners on Uniform State Laws, 
102.30  except for a reason set forth in section 336.9-516(b). 
102.31     (b) [AMENDMENT FORM.] A filing office that accepts written 
102.32  records may not refuse to accept a written record in the form 
102.33  and format adopted by the National Conference of Commissioners 
102.34  on Uniform State Laws, except for a reason set forth in section 
102.35  336.9-516(b). 
102.36     Sec. 93.  [336.9-522] [MAINTENANCE AND DESTRUCTION OF 
103.1   RECORDS.] 
103.2      (a) [POST-LAPSE MAINTENANCE AND RETRIEVAL OF 
103.3   INFORMATION.] The filing office shall maintain a record of the 
103.4   information provided in a filed financing statement for at least 
103.5   one year after the effectiveness of the financing statement has 
103.6   lapsed under section 336.9-515 with respect to all secured 
103.7   parties of record.  The record must be retrievable by using the 
103.8   name of the debtor and by using the file number assigned to the 
103.9   initial financing statement to which the record relates. 
103.10     (b) [DESTRUCTION OF WRITTEN RECORDS.] Except to the extent 
103.11  that a statute governing disposition of public records provides 
103.12  otherwise, the filing office immediately may destroy any written 
103.13  record evidencing a financing statement.  However, if the filing 
103.14  office destroys a written record, it shall maintain another 
103.15  record of the financing statement which complies with subsection 
103.16  (a). 
103.17     Sec. 94.  [336.9-523] [INFORMATION FROM FILING OFFICE; SALE 
103.18  OR LICENSE OF RECORDS.] 
103.19     (a) [ACKNOWLEDGMENT OF FILING WRITTEN RECORD.] If a person 
103.20  that files a written record requests an acknowledgment of the 
103.21  filing, the filing office shall send to the person an image of 
103.22  the record showing the number assigned to the record pursuant to 
103.23  section 336.9-519(a)(1) and the date and time of the filing of 
103.24  the record.  However, if the person furnishes a copy of the 
103.25  record to the filing office, the filing office may instead: 
103.26     (1) note upon the copy the number assigned to the record 
103.27  pursuant to section 336.9-519(a)(1) and the date and time of the 
103.28  filing of the record; and 
103.29     (2) send the copy to the person. 
103.30     (b) [ACKNOWLEDGMENT OF FILING OTHER RECORD.] If a person 
103.31  files a record other than a written record, the filing office 
103.32  shall communicate to the person an acknowledgment that provides: 
103.33     (1) the information in the record; 
103.34     (2) the number assigned to the record pursuant to section 
103.35  336.9-519(a)(1); and 
103.36     (3) the date and time of the filing of the record. 
104.1      (c) [COMMUNICATION OF REQUESTED INFORMATION.] The filing 
104.2   office shall communicate or otherwise make available in a record 
104.3   the following information to any person that requests it: 
104.4      (1) whether there is on file on a date and time specified 
104.5   by the filing office, but not a date earlier than three business 
104.6   days before the filing office receives the request, any 
104.7   financing statement that: 
104.8      (A) designates a particular debtor (or, if the request so 
104.9   states, designates a particular debtor at the address specified 
104.10  in the request); 
104.11     (B) has not lapsed under section 336.9-515 with respect to 
104.12  all secured parties of record; and 
104.13     (C) if the request so states, has lapsed under section 
104.14  336.9-515 and a record of which is maintained by the filing 
104.15  office under section 336.9-522(a); 
104.16     (2) the date and time of filing of each financing 
104.17  statement; and 
104.18     (3) the information provided in each financing statement. 
104.19     (d) [MEDIUM FOR COMMUNICATING INFORMATION.] In complying 
104.20  with its duty under subsection (c), the filing office may 
104.21  communicate information in any medium.  However, if requested, 
104.22  the filing office shall communicate information by issuing its 
104.23  written certificate. 
104.24     (e) [TIMELINESS OF FILING OFFICE PERFORMANCE.] The filing 
104.25  office shall perform the acts required by subsections (a) 
104.26  through (d) at the time and in the manner prescribed by filing 
104.27  office rule, but not later than two business days after the 
104.28  filing office receives the request. 
104.29     (f) [PUBLIC AVAILABILITY OF RECORDS.] At least weekly, the 
104.30  secretary of state shall offer to sell or license to the public 
104.31  on a nonexclusive basis, in bulk, copies of all records filed in 
104.32  it under this part, in every medium from time to time available 
104.33  to the filing office. 
104.34     Sec. 95.  [336.9-524] [DELAY BY FILING OFFICE.] 
104.35     Delay by the filing office beyond a time limit prescribed 
104.36  by this part is excused if: 
105.1      (1) the delay is caused by interruption of communication or 
105.2   computer facilities, war, emergency conditions, failure of 
105.3   equipment, or other circumstances beyond control of the filing 
105.4   office; and 
105.5      (2) the filing office exercises reasonable diligence under 
105.6   the circumstances. 
105.7      Sec. 96.  [336.9-525] [FEES.] 
105.8      (a) [FILING OR OTHER RECORD:  GENERAL RULE.] Except as 
105.9   otherwise provided in subsection (e), the fee for filing and 
105.10  indexing a record under this part, other than an initial 
105.11  financing statement of the kind described in subsection (b), is 
105.12  $20.  
105.13     (b) [INITIAL FINANCING STATEMENT:  PUBLIC-FINANCE AND 
105.14  MANUFACTURED HOUSING TRANSACTIONS.] Except as otherwise provided 
105.15  in subsection (e), the fee for filing and indexing an initial 
105.16  financing statement of the following kind is $20.  
105.17     (c) [NUMBER OF NAMES.] The number of names required to be 
105.18  indexed does not affect the amount of the fee in subsections (a) 
105.19  and (b). 
105.20     (d) [RESPONSE TO INFORMATION REQUEST.] The fee for 
105.21  responding to a request for information from the filing office, 
105.22  including for issuing a certificate showing whether there is on 
105.23  file any financing statement naming a particular debtor, is $20. 
105.24     (e) [RECORD OF MORTGAGE.] This section does not require a 
105.25  fee with respect to a record of a mortgage which is effective as 
105.26  a financing statement filed as a fixture filing or as a 
105.27  financing statement covering as-extracted collateral or timber 
105.28  to be cut under section 336.9-502(c).  However, the recording 
105.29  and satisfaction fees that otherwise would be applicable to the 
105.30  record of the mortgage apply. 
105.31     Sec. 97.  [336.9-526] [DUTY TO REPORT.] 
105.32     The secretary of state shall report annually on or before 
105.33  January 1 to the legislature on the operation of the filing 
105.34  office. 
105.35     Sec. 98.  [336.9-527] [SATELLITE OFFICES AUTHORIZED.] 
105.36     The secretary of state may establish satellite offices by 
106.1   written agreements with public officials within the state for 
106.2   the purpose of meeting the filing officer responsibilities 
106.3   described in sections 336.9-528 to 336.9-530.  The term of the 
106.4   agreement must be set by, and may be renewed by, mutual 
106.5   agreement.  The agreement may be terminated upon 60 days' 
106.6   notice.  The secretary must maintain a list of those public 
106.7   officials authorized to act as satellite offices.  The secretary 
106.8   of state must make this list available in an electronic format 
106.9   and the list must be updated at least monthly.  
106.10     Sec. 99.  [336.9-528] [FILING; ASSIGNMENT OF FILING 
106.11  INFORMATION AT SATELLITE OFFICES.] 
106.12     Satellite offices shall accept Uniform Commercial Code 
106.13  documents and respond to requests for information pursuant to 
106.14  the provisions of sections 336.9-101 to 336.9-708.  A filing 
106.15  made at a satellite office is filed and effective at the same 
106.16  time and under the same rules provided for filing in any other 
106.17  manner in the Uniform Commercial Code information system.  The 
106.18  filing date, time, and file number for any Uniform Commercial 
106.19  Code document accepted at a satellite office must be 
106.20  automatically assigned by the Uniform Commercial Code 
106.21  information management system operated by the secretary of 
106.22  state, and the file number must be the next available file 
106.23  number in the Uniform Commercial Code information management 
106.24  system.  
106.25     Sec. 100.  [336.9-529] [MAINTENANCE AND RETRIEVAL OF 
106.26  DOCUMENTS AND DATA.] 
106.27     The secretary of state shall maintain all Uniform 
106.28  Commercial Code documents and the database used to index them 
106.29  regardless of where or how the Uniform Commercial Code document 
106.30  was filed.  The Uniform Commercial Code documents and database 
106.31  must be housed in the Uniform Commercial Code information 
106.32  management system.  Uniform Commercial Code documents and data 
106.33  shall be available from the secretary of state or any satellite 
106.34  office.  The secretary of state shall arrange by mutual 
106.35  agreement with county recorders for the storage and retrieval of 
106.36  existing Uniform Commercial Code documents.  
107.1      Any filing office within the Uniform Commercial Code 
107.2   information management system may respond to requests for 
107.3   information, and the secretary of state shall establish and 
107.4   administer a system to facilitate those responses.  
107.5      Sec. 101.  [336.9-530] [SATELLITE OFFICES; UNIFORMITY OF 
107.6   SERVICES ASSURED.] 
107.7      Subdivision 1.  [PERFORMANCE STANDARDS.] All filing 
107.8   officers must perform the responsibilities in sections 336.9-501 
107.9   to 336.9-530 and rules adopted under section 140 in a uniform 
107.10  manner, whether services are provided by the secretary of state 
107.11  or at a satellite office location.  Reports by citizens 
107.12  describing concerns with performance of filing officer 
107.13  responsibilities must be made to the secretary of state.  The 
107.14  secretary of state is responsible for responding to reports 
107.15  about performance in a manner the secretary of state determines 
107.16  is appropriate.  
107.17     Subd. 2.  [FAILURE TO MEET PERFORMANCE STANDARDS.] If, upon 
107.18  investigation of citizen reports described in subdivision 1, the 
107.19  secretary of state determines that performance by a satellite 
107.20  office of the filing officer responsibilities has been so 
107.21  unsatisfactory that customer service has been severely impaired, 
107.22  the secretary of state must terminate the satellite office's 
107.23  status and ability to perform filing office responsibilities.  
107.24  If a satellite office's ability to perform filing office 
107.25  responsibilities is terminated by the secretary of state, the 
107.26  change in status must be posted in the former satellite office 
107.27  and must also be publicly posted in the county courthouse in the 
107.28  county in which the former satellite office is located and must 
107.29  be made available in an electronic format. 
107.30                               Part 6 
107.31                              DEFAULT 
107.32               SUBPART 1.  DEFAULT AND ENFORCEMENT OF 
107.33                         SECURITY INTEREST 
107.34     Sec. 102.  [336.9-601] [RIGHTS AFTER DEFAULT; JUDICIAL 
107.35  ENFORCEMENT; CONSIGNOR OR BUYER OF ACCOUNTS, CHATTEL PAPER, 
107.36  PAYMENT INTANGIBLES, OR PROMISSORY NOTES.] 
108.1      (a) [RIGHTS OF SECURED PARTY AFTER DEFAULT.] After default, 
108.2   a secured party has the rights provided in this part and, except 
108.3   as otherwise provided in section 336.9-602, those provided by 
108.4   agreement of the parties.  A secured party: 
108.5      (1) may reduce a claim to judgment, foreclose, or otherwise 
108.6   enforce the claim, security interest, or agricultural lien by 
108.7   any available judicial procedure; and 
108.8      (2) if the collateral is documents, may proceed either as 
108.9   to the documents or as to the goods they cover. 
108.10     (b) [RIGHTS AND DUTIES OF SECURED PARTY IN POSSESSION OR 
108.11  CONTROL.] A secured party in possession of collateral or control 
108.12  of collateral under section 336.9-104, 336.9-105, 336.9-106, or 
108.13  336.9-107 has the rights and duties provided in section 
108.14  336.9-207. 
108.15     (c) [RIGHTS CUMULATIVE; SIMULTANEOUS EXERCISE.] The rights 
108.16  under subsections (a) and (b) are cumulative and may be 
108.17  exercised simultaneously. 
108.18     (d) [RIGHTS OF DEBTOR AND OBLIGOR.] Except as otherwise 
108.19  provided in subsection (g) and section 336.9-605, after default, 
108.20  a debtor and an obligor have the rights provided in this part 
108.21  and by agreement of the parties. 
108.22     (e) [LIEN OF LEVY AFTER JUDGMENT.] If a secured party has 
108.23  reduced its claim to judgment, the lien of any levy that may be 
108.24  made upon the collateral by virtue of an execution based upon 
108.25  the judgment relates back to the earliest of: 
108.26     (1) the date of perfection of the security interest or 
108.27  agricultural lien in the collateral; 
108.28     (2) the date of filing a financing statement covering the 
108.29  collateral; or 
108.30     (3) any date specified in a statute under which the 
108.31  agricultural lien was created. 
108.32     (f) [EXECUTION SALE.] A sale pursuant to an execution is a 
108.33  foreclosure of the security interest or agricultural lien by 
108.34  judicial procedure within the meaning of this section.  A 
108.35  secured party may purchase at the sale and thereafter hold the 
108.36  collateral free of any other requirements of this article. 
109.1      (g) [CONSIGNOR OR BUYER OF CERTAIN RIGHTS TO 
109.2   PAYMENT.] Except as otherwise provided in section 336.9-607(c), 
109.3   this part imposes no duties upon a secured party that is a 
109.4   consignor or is a buyer of accounts, chattel paper, payment 
109.5   intangibles, or promissory notes. 
109.6      Sec. 103.  [336.9-602] [WAIVER AND VARIANCE OF RIGHTS AND 
109.7   DUTIES.] 
109.8      Except as otherwise provided in section 336.9-624, to the 
109.9   extent that they give rights to a debtor or obligor and impose 
109.10  duties on a secured party, the debtor or obligor may not waive 
109.11  or vary the rules stated in the following listed sections: 
109.12     (1) section 336.9-207(b)(4)(C), which deals with use and 
109.13  operation of the collateral by the secured party; 
109.14     (2) section 336.9-210, which deals with requests for an 
109.15  accounting and requests concerning a list of collateral and 
109.16  statement of account; 
109.17     (3) section 336.9-607(c), which deals with collection and 
109.18  enforcement of collateral; 
109.19     (4) sections 336.9-608(a) and 336.9-615(c) to the extent 
109.20  that they deal with application or payment of noncash proceeds 
109.21  of collection, enforcement, or disposition; 
109.22     (5) sections 336.9-608(a) and 336.9-615(d) to the extent 
109.23  that they require accounting for or payment of surplus proceeds 
109.24  of collateral; 
109.25     (6) section 336.9-609 to the extent that it imposes upon a 
109.26  secured party that takes possession of collateral without 
109.27  judicial process the duty to do so without breach of the peace; 
109.28     (7) sections 336.9-610(b), 336.9-611, 336.9-613, and 
109.29  336.9-614, which deal with disposition of collateral; 
109.30     (8) section 336.9-615(f), which deals with calculation of a 
109.31  deficiency or surplus when a disposition is made to the secured 
109.32  party, a person related to the secured party, or a secondary 
109.33  obligor; 
109.34     (9) section 336.9-616, which deals with explanation of the 
109.35  calculation of a surplus or deficiency; 
109.36     (10) sections 336.9-620, 336.9-621, and 336.9-622, which 
110.1   deal with acceptance of collateral in satisfaction of 
110.2   obligation; 
110.3      (11) section 336.9-623, which deals with redemption of 
110.4   collateral; 
110.5      (12) section 336.9-624, which deals with permissible 
110.6   waivers; and 
110.7      (13) sections 336.9-625 and 336.9-626, which deal with the 
110.8   secured party's liability for failure to comply with this 
110.9   article. 
110.10     Sec. 104.  [336.9-603] [AGREEMENT ON STANDARDS CONCERNING 
110.11  RIGHTS AND DUTIES.] 
110.12     (a) [AGREED STANDARDS.] The parties may determine by 
110.13  agreement the standards measuring the fulfillment of the rights 
110.14  of a debtor or obligor and the duties of a secured party under a 
110.15  rule stated in section 336.9-602 if the standards are not 
110.16  manifestly unreasonable. 
110.17     (b) [AGREED STANDARDS INAPPLICABLE TO BREACH OF 
110.18  PEACE.] Subsection (a) does not apply to the duty under section 
110.19  336.9-609 to refrain from breaching the peace. 
110.20     Sec. 105.  [336.9-604] [PROCEDURE IF SECURITY AGREEMENT 
110.21  COVERS REAL PROPERTY OR FIXTURES.] 
110.22     (a) [ENFORCEMENT:  PERSONAL AND REAL PROPERTY.] If a 
110.23  security agreement covers both personal and real property, a 
110.24  secured party may proceed: 
110.25     (1) under this part as to the personal property without 
110.26  prejudicing any rights with respect to the real property; or 
110.27     (2) as to both the personal property and the real property 
110.28  in accordance with the rights with respect to the real property, 
110.29  in which case the other provisions of this part do not apply. 
110.30     (b) [ENFORCEMENT:  FIXTURES.] Subject to subsection (c), if 
110.31  a security agreement covers goods that are or become fixtures, a 
110.32  secured party may proceed: 
110.33     (1) under this part; or 
110.34     (2) in accordance with the rights with respect to real 
110.35  property, in which case the other provisions of this part do not 
110.36  apply. 
111.1      (c) [REMOVAL OF FIXTURES.] Subject to the other provisions 
111.2   of this part, if a secured party holding a security interest in 
111.3   fixtures has priority over all owners and encumbrancers of the 
111.4   real property, the secured party, after default, may remove the 
111.5   collateral from the real property. 
111.6      (d) [INJURY CAUSED BY REMOVAL.] A secured party that 
111.7   removes collateral shall promptly reimburse any encumbrancer or 
111.8   owner of the real property, other than the debtor, for the cost 
111.9   of repair of any physical injury caused by the removal.  The 
111.10  secured party need not reimburse the encumbrancer or owner for 
111.11  any diminution in value of the real property caused by the 
111.12  absence of the goods removed or by any necessity of replacing 
111.13  them.  A person entitled to reimbursement may refuse permission 
111.14  to remove until the secured party gives adequate assurance for 
111.15  the performance of the obligation to reimburse. 
111.16     Sec. 106.  [336.9-605] [UNKNOWN DEBTOR OR SECONDARY 
111.17  OBLIGOR.] 
111.18     A secured party does not owe a duty based on its status as 
111.19  secured party: 
111.20     (1) to a person that is a debtor or obligor, unless the 
111.21  secured party knows: 
111.22     (A) that the person is a debtor or obligor; 
111.23     (B) the identity of the person; and 
111.24     (C) how to communicate with the person; or 
111.25     (2) to a secured party or lienholder that has filed a 
111.26  financing statement against a person, unless the secured party 
111.27  knows: 
111.28     (A) that the person is a debtor; and 
111.29     (B) the identity of the person. 
111.30     Sec. 107.  [336.9-606] [TIME OF DEFAULT FOR AGRICULTURAL 
111.31  LIEN.] 
111.32     For purposes of this part, a default occurs in connection 
111.33  with an agricultural lien at the time the secured party becomes 
111.34  entitled to enforce the lien in accordance with the statute 
111.35  under which it was created. 
111.36     Sec. 108.  [336.9-607] [COLLECTION AND ENFORCEMENT BY 
112.1   SECURED PARTY.] 
112.2      (a) [COLLECTION AND ENFORCEMENT GENERALLY.] If so agreed, 
112.3   and in any event after default, a secured party: 
112.4      (1) may notify an account debtor or other person obligated 
112.5   on collateral to make payment or otherwise render performance to 
112.6   or for the benefit of the secured party; 
112.7      (2) may take any proceeds to which the secured party is 
112.8   entitled under section 336.9-315; 
112.9      (3) may enforce the obligations of an account debtor or 
112.10  other person obligated on collateral and exercise the rights of 
112.11  the debtor with respect to the obligation of the account debtor 
112.12  or other person obligated on collateral to make payment or 
112.13  otherwise render performance to the debtor, and with respect to 
112.14  any property that secures the obligations of the account debtor 
112.15  or other person obligated on the collateral; 
112.16     (4) if it holds a security interest in a deposit account 
112.17  perfected by control under section 336.9-104(a)(1), may apply 
112.18  the balance of the deposit account to the obligation secured by 
112.19  the deposit account; and 
112.20     (5) if it holds a security interest in a deposit account 
112.21  perfected by control under section 336.9-104(a)(2) or (3), may 
112.22  instruct the bank to pay the balance of the deposit account to 
112.23  or for the benefit of the secured party. 
112.24     (b) [NONJUDICIAL ENFORCEMENT OF MORTGAGE.] If necessary to 
112.25  enable a secured party to exercise under subsection (a)(3) the 
112.26  right of a debtor to enforce a mortgage nonjudicially, the 
112.27  secured party may record in the office in which a record of the 
112.28  mortgage is recorded: 
112.29     (1) a copy of the security agreement that creates or 
112.30  provides for a security interest in the obligation secured by 
112.31  the mortgage; and 
112.32     (2) the secured party's sworn affidavit in recordable form 
112.33  stating that: 
112.34     (A) a default has occurred; and 
112.35     (B) the secured party is entitled to enforce the mortgage 
112.36  nonjudicially. 
113.1      (c) [COMMERCIALLY REASONABLE COLLECTION AND ENFORCEMENT.] A 
113.2   secured party shall proceed in a commercially reasonable manner 
113.3   if the secured party: 
113.4      (1) undertakes to collect from or enforce an obligation of 
113.5   an account debtor or other person obligated on collateral; and 
113.6      (2) is entitled to charge back uncollected collateral or 
113.7   otherwise to full or limited recourse against the debtor or a 
113.8   secondary obligor. 
113.9      (d) [EXPENSES OF COLLECTION AND ENFORCEMENT.] A secured 
113.10  party may deduct from the collections made pursuant to 
113.11  subsection (c) reasonable expenses of collection and 
113.12  enforcement, including reasonable attorneys fees and legal 
113.13  expenses incurred by the secured party. 
113.14     (e) [DUTIES TO SECURED PARTY NOT AFFECTED.] This section 
113.15  does not determine whether an account debtor, bank, or other 
113.16  person obligated on collateral owes a duty to a secured party. 
113.17     Sec. 109.  [336.9-608] [APPLICATION OF PROCEEDS OF 
113.18  COLLECTION OR ENFORCEMENT; LIABILITY FOR DEFICIENCY AND RIGHT TO 
113.19  SURPLUS.] 
113.20     (a) [APPLICATION OF PROCEEDS, SURPLUS, AND DEFICIENCY IF 
113.21  OBLIGATION SECURED.] If a security interest or agricultural lien 
113.22  secures payment or performance of an obligation, the following 
113.23  rules apply: 
113.24     (1) A secured party shall apply or pay over for application 
113.25  the cash proceeds of collection or enforcement under section 
113.26  336.9-607 in the following order to: 
113.27     (A) the reasonable expenses of collection and enforcement 
113.28  and, to the extent provided for by agreement and not prohibited 
113.29  by law, reasonable attorneys fees and legal expenses incurred by 
113.30  the secured party; 
113.31     (B) the satisfaction of obligations secured by the security 
113.32  interest or agricultural lien under which the collection or 
113.33  enforcement is made; and 
113.34     (C) the satisfaction of obligations secured by any 
113.35  subordinate security interest in or other lien on the collateral 
113.36  subject to the security interest or agricultural lien under 
114.1   which the collection or enforcement is made if the secured party 
114.2   receives an authenticated demand for proceeds before 
114.3   distribution of the proceeds is completed. 
114.4      (2) If requested by a secured party, a holder of a 
114.5   subordinate security interest or other lien shall furnish 
114.6   reasonable proof of the interest or lien within a reasonable 
114.7   time.  Unless the holder complies, the secured party need not 
114.8   comply with the holder's demand under paragraph (1)(C). 
114.9      (3) A secured party need not apply or pay over for 
114.10  application noncash proceeds of collection and enforcement under 
114.11  section 336.9-607 unless the failure to do so would be 
114.12  commercially unreasonable.  A secured party that applies or pays 
114.13  over for application noncash proceeds shall do so in a 
114.14  commercially reasonable manner. 
114.15     (4) A secured party shall account to and pay a debtor for 
114.16  any surplus, and the obligor is liable for any deficiency. 
114.17     (b) [NO SURPLUS OR DEFICIENCY IN SALES OF CERTAIN RIGHTS TO 
114.18  PAYMENT.] If the underlying transaction is a sale of accounts, 
114.19  chattel paper, payment intangibles, or promissory notes, the 
114.20  debtor is not entitled to any surplus, and the obligor is not 
114.21  liable for any deficiency. 
114.22     Sec. 110.  [336.9-609] [SECURED PARTY'S RIGHT TO TAKE 
114.23  POSSESSION AFTER DEFAULT.] 
114.24     (a) [POSSESSION; RENDERING EQUIPMENT UNUSABLE; DISPOSITION 
114.25  ON DEBTOR'S PREMISES.] After default, a secured party: 
114.26     (1) may take possession of the collateral; and 
114.27     (2) without removal, may render equipment unusable and 
114.28  dispose of collateral on a debtor's premises under section 
114.29  336.9-610. 
114.30     (b) [JUDICIAL AND NONJUDICIAL PROCESS.] A secured party may 
114.31  proceed under subsection (a): 
114.32     (1) pursuant to judicial process; or 
114.33     (2) without judicial process, if it proceeds without breach 
114.34  of the peace. 
114.35     (c) [ASSEMBLY OF COLLATERAL.] If so agreed, and in any 
114.36  event after default, a secured party may require the debtor to 
115.1   assemble the collateral and make it available to the secured 
115.2   party at a place to be designated by the secured party which is 
115.3   reasonably convenient to both parties. 
115.4      Sec. 111.  [336.9-610] [DISPOSITION OF COLLATERAL AFTER 
115.5   DEFAULT.] 
115.6      (a) [DISPOSITION AFTER DEFAULT.] After default, a secured 
115.7   party may sell, lease, license, or otherwise dispose of any or 
115.8   all of the collateral in its present condition or following any 
115.9   commercially reasonable preparation or processing. 
115.10     (b) [COMMERCIALLY REASONABLE DISPOSITION.] Every aspect of 
115.11  a disposition of collateral, including the method, manner, time, 
115.12  place, and other terms, must be commercially reasonable.  If 
115.13  commercially reasonable, a secured party may dispose of 
115.14  collateral by public or private proceedings, by one or more 
115.15  contracts, as a unit or in parcels, and at any time and place 
115.16  and on any terms. 
115.17     (c) [PURCHASE BY SECURED PARTY.] A secured party may 
115.18  purchase collateral: 
115.19     (1) at a public disposition; or 
115.20     (2) at a private disposition only if the collateral is of a 
115.21  kind that is customarily sold on a recognized market or the 
115.22  subject of widely distributed standard price quotations. 
115.23     (d) [WARRANTIES ON DISPOSITION.] A contract for sale, 
115.24  lease, license, or other disposition includes the warranties 
115.25  relating to title, possession, quiet enjoyment, and the like 
115.26  which by operation of law accompany a voluntary disposition of 
115.27  property of the kind subject to the contract. 
115.28     (e) [DISCLAIMER OF WARRANTIES.] A secured party may 
115.29  disclaim or modify warranties under subsection (d): 
115.30     (1) in a manner that would be effective to disclaim or 
115.31  modify the warranties in a voluntary disposition of property of 
115.32  the kind subject to the contract of disposition; or 
115.33     (2) by communicating to the purchaser a record evidencing 
115.34  the contract for disposition and including an express disclaimer 
115.35  or modification of the warranties. 
115.36     (f) [RECORD SUFFICIENT TO DISCLAIM WARRANTIES.] A record is 
116.1   sufficient to disclaim warranties under subsection (e) if it 
116.2   indicates "there is no warranty relating to title, possession, 
116.3   quiet enjoyment, or the like in this disposition" or uses words 
116.4   of similar import. 
116.5      Sec. 112.  [336.9-611] [NOTIFICATION BEFORE DISPOSITION OF 
116.6   COLLATERAL.] 
116.7      (a) [NOTIFICATION DATE.] In this section, "notification 
116.8   date" means the earlier of the date on which: 
116.9      (1) a secured party sends to the debtor and any secondary 
116.10  obligor an authenticated notification of disposition; or 
116.11     (2) the debtor and any secondary obligor waive the right to 
116.12  notification. 
116.13     (b) [NOTIFICATION OF DISPOSITION REQUIRED.] Except as 
116.14  otherwise provided in subsection (d), a secured party that 
116.15  disposes of collateral under section 336.9-610 shall send to the 
116.16  persons specified in subsection (c) a reasonable authenticated 
116.17  notification of disposition. 
116.18     (c) [PERSONS TO BE NOTIFIED.] To comply with subsection 
116.19  (b), the secured party shall send an authenticated notification 
116.20  of disposition to: 
116.21     (1) the debtor; 
116.22     (2) any secondary obligor; and 
116.23     (3) if the collateral is other than consumer goods: 
116.24     (A) any other person from which the secured party has 
116.25  received, before the notification date, an authenticated 
116.26  notification of a claim of an interest in the collateral; 
116.27     (B) any other secured party or lienholder that, ten days 
116.28  before the notification date, held a security interest in or 
116.29  other lien on the collateral perfected by the filing of a 
116.30  financing statement that: 
116.31     (i) identified the collateral; 
116.32     (ii) was indexed under the debtor's name as of that date; 
116.33  and 
116.34     (iii) was filed in the office in which to file a financing 
116.35  statement against the debtor covering the collateral as of that 
116.36  date; and 
117.1      (C) any other secured party that, ten days before the 
117.2   notification date, held a security interest in the collateral 
117.3   perfected by compliance with a statute, regulation, or treaty 
117.4   described in section 336.9-311(a). 
117.5      (d) [SUBSECTION (B) INAPPLICABLE:  PERISHABLE COLLATERAL; 
117.6   RECOGNIZED MARKET.] Subsection (b) does not apply if the 
117.7   collateral is perishable or threatens to decline speedily in 
117.8   value or is of a type customarily sold on a recognized market. 
117.9      (e) [COMPLIANCE WITH SUBSECTION (C)(3)(B).] A secured party 
117.10  complies with the requirement for notification prescribed by 
117.11  subsection (c)(3)(B) if: 
117.12     (1) not later than 20 days or earlier than 30 days before 
117.13  the notification date, the secured party requests, in a 
117.14  commercially reasonable manner, information concerning financing 
117.15  statements indexed under the debtor's name in the office 
117.16  indicated in subsection (c)(3)(B); and 
117.17     (2) before the notification date, the secured party: 
117.18     (A) did not receive a response to the request for 
117.19  information; or 
117.20     (B) received a response to the request for information and 
117.21  sent an authenticated notification of disposition to each 
117.22  secured party named in that response whose financing statement 
117.23  covered the collateral. 
117.24     Sec. 113.  [336.9-612] [TIMELINESS OF NOTIFICATION BEFORE 
117.25  DISPOSITION OF COLLATERAL.] 
117.26     (a) [REASONABLE TIME IS QUESTION OF FACT.] Except as 
117.27  otherwise provided in subsection (b), whether a notification is 
117.28  sent within a reasonable time is a question of fact. 
117.29     (b) [TEN-DAY PERIOD SUFFICIENT IN NONCONSUMER TRANSACTION.] 
117.30  In a transaction other than a consumer transaction, a 
117.31  notification of disposition sent after default and ten days or 
117.32  more before the earliest time of disposition set forth in the 
117.33  notification is sent within a reasonable time before the 
117.34  disposition. 
117.35     Sec. 114.  [336.9-613] [CONTENTS AND FORM OF NOTIFICATION 
117.36  BEFORE DISPOSITION OF COLLATERAL:  GENERAL.] 
118.1      Except in a consumer goods transaction, the following rules 
118.2   apply: 
118.3      (1) The contents of a notification of disposition are 
118.4   sufficient if the notification: 
118.5      (A) describes the debtor and the secured party; 
118.6      (B) describes the collateral that is the subject of the 
118.7   intended disposition; 
118.8      (C) states the method of intended disposition; 
118.9      (D) states that the debtor is entitled to an accounting of 
118.10  the unpaid indebtedness and states the charge, if any, for an 
118.11  accounting; and 
118.12     (E) states the time and place of a public disposition or 
118.13  the time after which any other disposition is to be made. 
118.14     (2) Whether the contents of a notification that lacks any 
118.15  of the information specified in paragraph (1) are nevertheless 
118.16  sufficient is a question of fact. 
118.17     (3) The contents of a notification providing substantially 
118.18  the information specified in paragraph (1) are sufficient, even 
118.19  if the notification includes: 
118.20     (A) information not specified by that paragraph; or 
118.21     (B) minor errors that are not seriously misleading. 
118.22     (4) A particular phrasing of the notification is not 
118.23  required. 
118.24     (5) The following form of notification and the form 
118.25  appearing in section 336.9-614(3), when completed, each provides 
118.26  sufficient information: 
118.27            NOTIFICATION OF DISPOSITION OF COLLATERAL 
118.28   To:                 (Name of debtor, obligor, or other person 
118.29                        to which the notification is sent) 
118.30   From:               (Name, address, and telephone number of 
118.31                        secured party)
118.32   Name of Debtor(s):  (Include only if debtor(s) are not an 
118.33                        addressee)
118.34  (For a public disposition:) 
118.35     We will sell (or lease or license, as applicable) the 
118.36  .....(describe collateral)..... (to the highest qualified 
119.1   bidder) in public as follows: 
119.2     Day and Date:  ........................
119.3     Time:          ........................
119.4     Place:         ........................
119.5   (For a private disposition:) 
119.6      We will sell (or lease or license, as applicable) the 
119.7   .....(describe collateral)..... privately sometime after ...(day 
119.8   and date).... 
119.9      You are entitled to an accounting of the unpaid 
119.10  indebtedness secured by the property that we intend to sell (or 
119.11  lease or license, as applicable) (for a charge of $.......).  
119.12  You may request an accounting by calling us at ...(telephone 
119.13  number).... 
119.14     Sec. 115.  [336.9-614] [CONTENTS AND FORM OF NOTIFICATION 
119.15  BEFORE DISPOSITION OF COLLATERAL:  CONSUMER GOODS TRANSACTION.] 
119.16     In a consumer goods transaction, the following rules apply: 
119.17     (1) A notification of disposition must provide the 
119.18  following information: 
119.19     (A) the information specified in section 336.9-613(1); 
119.20     (B) a description of any liability for a deficiency of the 
119.21  person to which the notification is sent; 
119.22     (C) a telephone number from which the amount that must be 
119.23  paid to the secured party to redeem the collateral under section 
119.24  336.9-623 is available; and 
119.25     (D) a telephone number or mailing address from which 
119.26  additional information concerning the disposition and the 
119.27  obligation secured is available. 
119.28     (2) A particular phrasing of the notification is not 
119.29  required. 
119.30     (3) The following form of notification, when completed, 
119.31  provides sufficient information: 
119.32  (Name and address of secured party) 
119.33  (Date) 
119.34               NOTICE OF OUR PLAN TO SELL PROPERTY 
119.35  (Name and address of any obligor who is also a debtor) 
119.36  Subject:  ....(Identification of Transaction).... 
120.1      We have your ...(describe collateral)..., because you broke 
120.2   promises in our agreement. 
120.3   (For a public disposition:) 
120.4      We will sell ...(describe collateral)... at public sale.  A 
120.5   sale could include a lease or license.  The sale will be held as 
120.6   follows: 
120.7        Date:     .............
120.8        Time:     .............
120.9        Place:    .............
120.10     You may attend the sale and bring bidders if you want. 
120.11  (For a private disposition:) 
120.12     We will sell ...(describe collateral)... at private sale 
120.13  sometime after ..(date)...  A sale could include a lease or 
120.14  license. 
120.15     The money that we get from the sale (after paying our costs)
120.16  will reduce the amount you owe.  If we get less money than you 
120.17  owe, you ..(will or will not, as applicable).. still owe us the 
120.18  difference.  If we get more money than you owe, you will get the 
120.19  extra money, unless we must pay it to someone else. 
120.20     You can get the property back at any time before we sell it 
120.21  by paying us the full amount you owe (not just the past due 
120.22  payments), including our expenses.  To learn the exact amount 
120.23  you must pay, call us at ..(telephone number)... 
120.24     If you want us to explain to you in writing how we have 
120.25  figured the amount that you owe us, you may call us at 
120.26  ..(telephone number).. (or write us at ..(secured party's 
120.27  address)..) and request a written explanation.  (We will charge 
120.28  you $....... for the explanation if we sent you another written 
120.29  explanation of the amount you owe us within the last six months.)
120.30     If you need more information about the sale call us at 
120.31  ..(telephone number).. (or write us at ..(secured party's 
120.32  address)..). 
120.33     We are sending this notice to the following other people 
120.34  who have an interest in ...(describe collateral)... or who owe 
120.35  money under your agreement: 
120.36  ..(Names of all other debtors and obligors, if any).. 
121.1      (4) A notification in the form of paragraph (3) is 
121.2   sufficient, even if additional information appears at the end of 
121.3   the form. 
121.4      (5) A notification in the form of paragraph (3) is 
121.5   sufficient, even if it includes errors in information not 
121.6   required by paragraph (1), unless the error is misleading with 
121.7   respect to rights arising under this article. 
121.8      (6) If a notification under this section is not in the form 
121.9   of paragraph (3), law other than this article determines the 
121.10  effect of including information not required by paragraph (1). 
121.11     Sec. 116.  [336.9-615] [APPLICATION OF PROCEEDS OF 
121.12  DISPOSITION; LIABILITY FOR DEFICIENCY AND RIGHT TO SURPLUS.] 
121.13     (a) [APPLICATION OF PROCEEDS.] A secured party shall apply 
121.14  or pay over for application the cash proceeds of disposition 
121.15  under section 336.9-610 in the following order to: 
121.16     (1) the reasonable expenses of retaking, holding, preparing 
121.17  for disposition, processing, and disposing, and, to the extent 
121.18  provided for by agreement and not prohibited by law, reasonable 
121.19  attorneys fees and legal expenses incurred by the secured party; 
121.20     (2) the satisfaction of obligations secured by the security 
121.21  interest or agricultural lien under which the disposition is 
121.22  made; 
121.23     (3) the satisfaction of obligations secured by any 
121.24  subordinate security interest in or other subordinate lien on 
121.25  the collateral if: 
121.26     (A) the secured party receives from the holder of the 
121.27  subordinate security interest or other lien an authenticated 
121.28  demand for proceeds before distribution of the proceeds is 
121.29  completed; and 
121.30     (B) in a case in which a consignor has an interest in the 
121.31  collateral, the subordinate security interest or other lien is 
121.32  senior to the interest of the consignor; and 
121.33     (4) a secured party that is a consignor of the collateral 
121.34  if the secured party receives from the consignor an 
121.35  authenticated demand for proceeds before distribution of the 
121.36  proceeds is completed. 
122.1      (b) [PROOF OF SUBORDINATE INTEREST.] If requested by a 
122.2   secured party, a holder of a subordinate security interest or 
122.3   other lien shall furnish reasonable proof of the interest or 
122.4   lien within a reasonable time.  Unless the holder does so, the 
122.5   secured party need not comply with the holder's demand under 
122.6   subsection (a)(3). 
122.7      (c) [APPLICATION OF NONCASH PROCEEDS.] A secured party need 
122.8   not apply or pay over for application noncash proceeds of 
122.9   disposition under section 336.9-610 unless the failure to do so 
122.10  would be commercially unreasonable.  A secured party that 
122.11  applies or pays over for application noncash proceeds shall do 
122.12  so in a commercially reasonable manner. 
122.13     (d) [SURPLUS OR DEFICIENCY IF OBLIGATION SECURED.] If the 
122.14  security interest under which a disposition is made secures 
122.15  payment or performance of an obligation, after making the 
122.16  payments and applications required by subsection (a) and 
122.17  permitted by subsection (c): 
122.18     (1) unless subsection (a)(4) requires the secured party to 
122.19  apply or pay over cash proceeds to a consignor, the secured 
122.20  party shall account to and pay a debtor for any surplus; and 
122.21     (2) the obligor is liable for any deficiency. 
122.22     (e) [NO SURPLUS OR DEFICIENCY IN SALES OF CERTAIN RIGHTS TO 
122.23  PAYMENT.] If the underlying transaction is a sale of accounts, 
122.24  chattel paper, payment intangibles, or promissory notes: 
122.25     (1) the debtor is not entitled to any surplus; and 
122.26     (2) the obligor is not liable for any deficiency. 
122.27     (f) [CALCULATION OF SURPLUS OR DEFICIENCY IN DISPOSITION TO 
122.28  PERSON RELATED TO SECURED PARTY.] The surplus or deficiency 
122.29  following a disposition is calculated based on the amount of 
122.30  proceeds that would have been realized in a disposition 
122.31  complying with this part to a transferee other than the secured 
122.32  party, a person related to the secured party, or a secondary 
122.33  obligor if: 
122.34     (1) the transferee in the disposition is the secured party, 
122.35  a person related to the secured party, or a secondary obligor; 
122.36  and 
123.1      (2) the amount of proceeds of the disposition is 
123.2   significantly below the range of proceeds that a complying 
123.3   disposition to a person other than the secured party, a person 
123.4   related to the secured party, or a secondary obligor would have 
123.5   brought. 
123.6      (g) [CASH PROCEEDS RECEIVED BY JUNIOR SECURED PARTY.] A 
123.7   secured party that receives cash proceeds of a disposition in 
123.8   good faith and without knowledge that the receipt violates the 
123.9   rights of the holder of a security interest or other lien that 
123.10  is not subordinate to the security interest or agricultural lien 
123.11  under which the disposition is made: 
123.12     (1) takes the cash proceeds free of the security interest 
123.13  or other lien; 
123.14     (2) is not obligated to apply the proceeds of the 
123.15  disposition to the satisfaction of obligations secured by the 
123.16  security interest or other lien; and 
123.17     (3) is not obligated to account to or pay the holder of the 
123.18  security interest or other lien for any surplus. 
123.19     Sec. 117.  [336.9-616] [EXPLANATION OF CALCULATION OF 
123.20  SURPLUS OR DEFICIENCY.] 
123.21     (a) [DEFINITIONS.] In this section: 
123.22     (1) "Explanation" means a writing that: 
123.23     (A) states the amount of the surplus or deficiency; 
123.24     (B) provides an explanation in accordance with subsection 
123.25  (c) of how the secured party calculated the surplus or 
123.26  deficiency; 
123.27     (C) states, if applicable, that future debits, credits, 
123.28  charges, including additional credit service charges or 
123.29  interest, rebates, and expenses may affect the amount of the 
123.30  surplus or deficiency; and 
123.31     (D) provides a telephone number or mailing address from 
123.32  which additional information concerning the transaction is 
123.33  available. 
123.34     (2) "Request" means a record: 
123.35     (A) authenticated by a debtor or consumer obligor; 
123.36     (B) requesting that the recipient provide an explanation; 
124.1   and 
124.2      (C) sent after disposition of the collateral under section 
124.3   336.9-610. 
124.4      (b) [EXPLANATION OF CALCULATION.] In a consumer goods 
124.5   transaction in which the debtor is entitled to a surplus or a 
124.6   consumer obligor is liable for a deficiency under section 
124.7   336.9-615, the secured party shall: 
124.8      (1) send an explanation to the debtor or consumer obligor, 
124.9   as applicable, after the disposition and: 
124.10     (A) before or when the secured party accounts to the debtor 
124.11  and pays any surplus or first makes written demand on the 
124.12  consumer obligor after the disposition for payment of the 
124.13  deficiency; and 
124.14     (B) within 14 days after receipt of a request; or 
124.15     (2) in the case of a consumer obligor who is liable for a 
124.16  deficiency, within 14 days after receipt of a request, send to 
124.17  the consumer obligor a record waiving the secured party's right 
124.18  to a deficiency. 
124.19     (c) [REQUIRED INFORMATION.] To comply with subsection 
124.20  (a)(1)(B), a writing must provide the following information in 
124.21  the following order: 
124.22     (1) the aggregate amount of obligations secured by the 
124.23  security interest under which the disposition was made, and, if 
124.24  the amount reflects a rebate of unearned interest or credit 
124.25  service charge, an indication of that fact, calculated as of a 
124.26  specified date: 
124.27     (A) if the secured party takes or receives possession of 
124.28  the collateral after default, not more than 35 days before the 
124.29  secured party takes or receives possession; or 
124.30     (B) if the secured party takes or receives possession of 
124.31  the collateral before default or does not take possession of the 
124.32  collateral, not more than 35 days before the disposition; 
124.33     (2) the amount of proceeds of the disposition; 
124.34     (3) the aggregate amount of the obligations after deducting 
124.35  the amount of proceeds; 
124.36     (4) the amount, in the aggregate or by type, and types of 
125.1   expenses, including expenses of retaking, holding, preparing for 
125.2   disposition, processing, and disposing of the collateral, and 
125.3   attorneys fees secured by the collateral which are known to the 
125.4   secured party and relate to the current disposition; 
125.5      (5) the amount, in the aggregate or by type, and types of 
125.6   credits, including rebates of interest or credit service 
125.7   charges, to which the obligor is known to be entitled and which 
125.8   are not reflected in the amount in paragraph (1); and 
125.9      (6) the amount of the surplus or deficiency. 
125.10     (d) [SUBSTANTIAL COMPLIANCE.] A particular phrasing of the 
125.11  explanation is not required.  An explanation complying 
125.12  substantially with the requirements of subsection (a) is 
125.13  sufficient, even if it includes minor errors that are not 
125.14  seriously misleading. 
125.15     (e) [CHARGES FOR RESPONSES.] A debtor or consumer obligor 
125.16  is entitled without charge to one response to a request under 
125.17  this section during any six-month period in which the secured 
125.18  party did not send to the debtor or consumer obligor an 
125.19  explanation pursuant to subsection (b)(1).  The secured party 
125.20  may require payment of a charge not exceeding $25 for each 
125.21  additional response. 
125.22     Sec. 118.  [336.9-617] [RIGHTS OF TRANSFEREE OF 
125.23  COLLATERAL.] 
125.24     (a) [EFFECTS OF DISPOSITION.] A secured party's disposition 
125.25  of collateral after default: 
125.26     (1) transfers to a transferee for value all of the debtor's 
125.27  rights in the collateral; 
125.28     (2) discharges the security interest under which the 
125.29  disposition is made; and 
125.30     (3) discharges any subordinate security interest or other 
125.31  subordinate lien other than liens created under (cite acts or 
125.32  statutes providing for liens, if any, that are not to be 
125.33  discharged). 
125.34     (b) [RIGHTS OF GOOD FAITH TRANSFEREE.] A transferee that 
125.35  acts in good faith takes free of the rights and interests 
125.36  described in subsection (a), even if the secured party fails to 
126.1   comply with this article or the requirements of any judicial 
126.2   proceeding. 
126.3      (c) [RIGHTS OF OTHER TRANSFEREE.] If a transferee does not 
126.4   take free of the rights and interests described in subsection 
126.5   (a), the transferee takes the collateral subject to: 
126.6      (1) the debtor's rights in the collateral; 
126.7      (2) the security interest or agricultural lien under which 
126.8   the disposition is made; and 
126.9      (3) any other security interest or other lien. 
126.10     Sec. 119.  [336.9-618] [RIGHTS AND DUTIES OF CERTAIN 
126.11  SECONDARY OBLIGORS.] 
126.12     (a) [RIGHTS AND DUTIES OF SECONDARY OBLIGOR.] A secondary 
126.13  obligor acquires the rights and becomes obligated to perform the 
126.14  duties of the secured party after the secondary obligor: 
126.15     (1) receives an assignment of a secured obligation from the 
126.16  secured party; 
126.17     (2) receives a transfer of collateral from the secured 
126.18  party and agrees to accept the rights and assume the duties of 
126.19  the secured party; or 
126.20     (3) is subrogated to the rights of a secured party with 
126.21  respect to collateral. 
126.22     (b) [EFFECT OF ASSIGNMENT, TRANSFER, OR SUBROGATION.] An 
126.23  assignment, transfer, or subrogation described in subsection (a):
126.24     (1) is not a disposition of collateral under section 
126.25  336.9-610; and 
126.26     (2) relieves the secured party of further duties under this 
126.27  article. 
126.28     Sec. 120.  [336.9-619] [TRANSFER OF RECORD OR LEGAL TITLE.] 
126.29     (a) [TRANSFER STATEMENT.] In this section, "transfer 
126.30  statement" means a record authenticated by a secured party 
126.31  stating: 
126.32     (1) that the debtor has defaulted in connection with an 
126.33  obligation secured by specified collateral; 
126.34     (2) that the secured party has exercised its postdefault 
126.35  remedies with respect to the collateral; 
126.36     (3) that, by reason of the exercise, a transferee has 
127.1   acquired the rights of the debtor in the collateral; and 
127.2      (4) the name and mailing address of the secured party, 
127.3   debtor, and transferee. 
127.4      (b) [EFFECT OF TRANSFER STATEMENT.] A transfer statement 
127.5   entitles the transferee to the transfer of record of all rights 
127.6   of the debtor in the collateral specified in the statement in 
127.7   any official filing, recording, registration, or certificate of 
127.8   title system covering the collateral.  If a transfer statement 
127.9   is presented with the applicable fee and request form to the 
127.10  official or office responsible for maintaining the system, the 
127.11  official or office shall: 
127.12     (1) accept the transfer statement; 
127.13     (2) promptly amend its records to reflect the transfer; and 
127.14     (3) if applicable, issue a new appropriate certificate of 
127.15  title in the name of transferee. 
127.16     (c) [TRANSFER NOT A DISPOSITION; NO RELIEF OF SECURED 
127.17  PARTY'S DUTIES.] A transfer of the record or legal title to 
127.18  collateral to a secured party under subsection (b) or otherwise 
127.19  is not of itself a disposition of collateral under this article 
127.20  and does not of itself relieve the secured party of its duties 
127.21  under this article. 
127.22     Sec. 121.  [336.9-620] [ACCEPTANCE OF COLLATERAL IN FULL OR 
127.23  PARTIAL SATISFACTION OF OBLIGATION; COMPULSORY DISPOSITION OF 
127.24  COLLATERAL.] 
127.25     (a) [CONDITIONS TO ACCEPTANCE IN SATISFACTION.] Except as 
127.26  otherwise provided in subsection (g), a secured party may accept 
127.27  collateral in full or partial satisfaction of the obligation it 
127.28  secures only if: 
127.29     (1) the debtor consents to the acceptance under subsection 
127.30  (c); 
127.31     (2) the secured party does not receive, within the time set 
127.32  forth in subsection (d), a notification of objection to the 
127.33  proposal authenticated by: 
127.34     (A) a person to which the secured party was required to 
127.35  send a proposal under section 336.9-621; or 
127.36     (B) any other person, other than the debtor, holding an 
128.1   interest in the collateral subordinate to the security interest 
128.2   that is the subject of the proposal; 
128.3      (3) if the collateral is consumer goods, the collateral is 
128.4   not in the possession of the debtor when the debtor consents to 
128.5   the acceptance; and 
128.6      (4) subsection (e) does not require the secured party to 
128.7   dispose of the collateral or the debtor waives the requirement 
128.8   pursuant to section 336.9-624. 
128.9      (b) [PURPORTED ACCEPTANCE INEFFECTIVE.] A purported or 
128.10  apparent acceptance of collateral under this section is 
128.11  ineffective unless: 
128.12     (1) the secured party consents to the acceptance in an 
128.13  authenticated record or sends a proposal to the debtor; and 
128.14     (2) the conditions of subsection (a) are met. 
128.15     (c) [DEBTOR'S CONSENT.] For purposes of this section: 
128.16     (1) a debtor consents to an acceptance of collateral in 
128.17  partial satisfaction of the obligation it secures only if the 
128.18  debtor agrees to the terms of the acceptance in a record 
128.19  authenticated after default; and 
128.20     (2) a debtor consents to an acceptance of collateral in 
128.21  full satisfaction of the obligation it secures only if the 
128.22  debtor agrees to the terms of the acceptance in a record 
128.23  authenticated after default or the secured party: 
128.24     (A) sends to the debtor after default a proposal that is 
128.25  unconditional or subject only to a condition that collateral not 
128.26  in the possession of the secured party be preserved or 
128.27  maintained; 
128.28     (B) in the proposal, proposes to accept collateral in full 
128.29  satisfaction of the obligation it secures; and 
128.30     (C) does not receive a notification of objection 
128.31  authenticated by the debtor within 20 days after the proposal is 
128.32  sent. 
128.33     (d) [EFFECTIVENESS OF NOTIFICATION.] To be effective under 
128.34  subsection (a)(2), a notification of objection must be received 
128.35  by the secured party: 
128.36     (1) in the case of a person to which the proposal was sent 
129.1   pursuant to section 336.9-621, within 20 days after notification 
129.2   was sent to that person; and 
129.3      (2) in other cases: 
129.4      (A) within 20 days after the last notification was sent 
129.5   pursuant to section 336.9-621; or 
129.6      (B) if a notification was not sent, before the debtor 
129.7   consents to the acceptance under subsection (c). 
129.8      (e) [MANDATORY DISPOSITION OF CONSUMER GOODS.] A secured 
129.9   party that has taken possession of collateral shall dispose of 
129.10  the collateral pursuant to section 336.9-610 within the time 
129.11  specified in subsection (f) if: 
129.12     (1) 60 percent of the cash price has been paid in the case 
129.13  of a purchase-money security interest in consumer goods; or 
129.14     (2) 60 percent of the principal amount of the obligation 
129.15  secured has been paid in the case of a non-purchase-money 
129.16  security interest in consumer goods. 
129.17     (f) [COMPLIANCE WITH MANDATORY DISPOSITION REQUIREMENT.] To 
129.18  comply with subsection (e), the secured party shall dispose of 
129.19  the collateral: 
129.20     (1) within 90 days after taking possession; or 
129.21     (2) within any longer period to which the debtor and all 
129.22  secondary obligors have agreed in an agreement to that effect 
129.23  entered into and authenticated after default. 
129.24     (g) [NO PARTIAL SATISFACTION IN CONSUMER TRANSACTION.] In a 
129.25  consumer transaction, a secured party may not accept collateral 
129.26  in partial satisfaction of the obligation it secures. 
129.27     Sec. 122.  [336.9-621] [NOTIFICATION OF PROPOSAL TO ACCEPT 
129.28  COLLATERAL.] 
129.29     (a) [PERSONS TO WHICH PROPOSAL TO BE SENT.] A secured party 
129.30  that desires to accept collateral in full or partial 
129.31  satisfaction of the obligation it secures shall send its 
129.32  proposal to: 
129.33     (1) any person from which the secured party has received, 
129.34  before the debtor consented to the acceptance, an authenticated 
129.35  notification of a claim of an interest in the collateral; 
129.36     (2) any other secured party or lienholder that, ten days 
130.1   before the debtor consented to the acceptance, held a security 
130.2   interest in or other lien on the collateral perfected by the 
130.3   filing of a financing statement that: 
130.4      (A) identified the collateral; 
130.5      (B) was indexed under the debtor's name as of that date; 
130.6   and 
130.7      (C) was filed in the office or offices in which to file a 
130.8   financing statement against the debtor covering the collateral 
130.9   as of that date; and 
130.10     (3) any other secured party that, ten days before the 
130.11  debtor consented to the acceptance, held a security interest in 
130.12  the collateral perfected by compliance with a statute, 
130.13  regulation, or treaty described in section 336.9-311(a). 
130.14     (b) [PROPOSAL TO BE SENT TO SECONDARY OBLIGOR IN PARTIAL 
130.15  SATISFACTION.] A secured party that desires to accept collateral 
130.16  in partial satisfaction of the obligation it secures shall send 
130.17  its proposal to any secondary obligor in addition to the persons 
130.18  described in subsection (a). 
130.19     Sec. 123.  [336.9-622] [EFFECT OF ACCEPTANCE OF 
130.20  COLLATERAL.] 
130.21     (a) [EFFECT OF ACCEPTANCE.] A secured party's acceptance of 
130.22  collateral in full or partial satisfaction of the obligation it 
130.23  secures: 
130.24     (1) discharges the obligation to the extent consented to by 
130.25  the debtor; 
130.26     (2) transfers to the secured party all of a debtor's rights 
130.27  in the collateral; 
130.28     (3) discharges the security interest or agricultural lien 
130.29  that is the subject of the debtor's consent and any subordinate 
130.30  security interest or other subordinate lien; and 
130.31     (4) terminates any other subordinate interest. 
130.32     (b) [DISCHARGE OF SUBORDINATE INTEREST NOTWITHSTANDING 
130.33  NONCOMPLIANCE.] A subordinate interest is discharged or 
130.34  terminated under subsection (a), even if the secured party fails 
130.35  to comply with this article. 
130.36     Sec. 124.  [336.9-623] [RIGHT TO REDEEM COLLATERAL.] 
131.1      (a) [PERSONS THAT MAY REDEEM.] A debtor, any secondary 
131.2   obligor, or any other secured party or lienholder may redeem 
131.3   collateral. 
131.4      (b) [REQUIREMENTS FOR REDEMPTION.] To redeem collateral, a 
131.5   person shall tender: 
131.6      (1) fulfillment of all obligations secured by the 
131.7   collateral; and 
131.8      (2) the reasonable expenses and attorneys fees described in 
131.9   section 336.9-615(a)(1). 
131.10     (c) [WHEN REDEMPTION MAY OCCUR.] A redemption may occur at 
131.11  any time before a secured party: 
131.12     (1) has collected collateral under section 336.9-607; 
131.13     (2) has disposed of collateral or entered into a contract 
131.14  for its disposition under section 336.9-610; or 
131.15     (3) has accepted collateral in full or partial satisfaction 
131.16  of the obligation it secures under section 336.9-622. 
131.17     Sec. 125.  [336.9-624] [WAIVER.] 
131.18     (a) [WAIVER OF DISPOSITION NOTIFICATION.] A debtor or 
131.19  secondary obligor may waive the right to notification of 
131.20  disposition of collateral under section 336.9-611 only by an 
131.21  agreement to that effect entered into and authenticated after 
131.22  default. 
131.23     (b) [WAIVER OF MANDATORY DISPOSITION.] A debtor may waive 
131.24  the right to require disposition of collateral under section 
131.25  336.9-620(e) only by an agreement to that effect entered into 
131.26  and authenticated after default. 
131.27     (c) [WAIVER OF REDEMPTION RIGHT.] Except in a consumer 
131.28  goods transaction, a debtor or secondary obligor may waive the 
131.29  right to redeem collateral under section 336.9-623 only by an 
131.30  agreement to that effect entered into and authenticated after 
131.31  default. 
131.32               SUBPART 2.  NONCOMPLIANCE WITH ARTICLE 
131.33     Sec. 126.  [336.9-625] [REMEDIES FOR SECURED PARTY'S 
131.34  FAILURE TO COMPLY WITH ARTICLE.] 
131.35     (a) [JUDICIAL ORDERS CONCERNING NONCOMPLIANCE.] If it is 
131.36  established that a secured party is not proceeding in accordance 
132.1   with this article, a court may order or restrain collection, 
132.2   enforcement, or disposition of collateral on appropriate terms 
132.3   and conditions. 
132.4      (b) [DAMAGES FOR NONCOMPLIANCE LOSSES.] Subject to 
132.5   subsections (c), (d), and (f), a person is liable for damages in 
132.6   the amount of any loss caused by a failure to comply with this 
132.7   article.  Loss caused by a failure to comply may include loss 
132.8   resulting from the debtor's inability to obtain, or increased 
132.9   costs of, alternative financing. 
132.10     (c) [PERSONS ENTITLED TO RECOVER DAMAGES; STATUTORY DAMAGES 
132.11  IN CONSUMER GOODS TRANSACTION.] Except as otherwise provided in 
132.12  section 336.9-628: 
132.13     (1) a person that, at the time of the failure, was a 
132.14  debtor, was an obligor, or held a security interest in or other 
132.15  lien on the collateral may recover damages under subsection (b) 
132.16  for its loss; and 
132.17     (2) if the collateral is consumer goods, a person that was 
132.18  a debtor or a secondary obligor at the time a secured party 
132.19  failed to comply with this part may recover for that failure in 
132.20  any event an amount not less than the credit service charge plus 
132.21  ten percent of the principal amount of the obligation or the 
132.22  time-price differential plus ten percent of the cash price. 
132.23     (d) [RECOVERY WHEN DEFICIENCY ELIMINATED OR REDUCED.] A 
132.24  debtor whose deficiency is eliminated under section 336.9-626 
132.25  may recover damages for the loss of any surplus.  However, a 
132.26  debtor or secondary obligor whose deficiency is eliminated or 
132.27  reduced under section 336.9-626 may not otherwise recover under 
132.28  subsection (b) for noncompliance with the provisions of this 
132.29  part relating to collection, enforcement, disposition, or 
132.30  acceptance. 
132.31     (e) [STATUTORY DAMAGES:  NONCOMPLIANCE WITH SPECIFIED 
132.32  PROVISIONS.] In addition to any damages recoverable under 
132.33  subsection (b), the debtor, consumer obligor, or person named as 
132.34  a debtor in a filed record, as applicable, may recover $500 in 
132.35  each case from a person who: 
132.36     (1) fails to comply with section 336.9-208; 
133.1      (2) fails to comply with section 336.9-209; 
133.2      (3) files a record that the person is not entitled to file 
133.3   under section 336.9-509(a); 
133.4      (4) fails to cause the secured party of record to file or 
133.5   send a termination statement as required by section 336.9-513(a) 
133.6   or (c); 
133.7      (5) fails to comply with section 336.9-616(b)(1) and whose 
133.8   failure is part of a pattern, or consistent with a practice, of 
133.9   noncompliance; or 
133.10     (6) fails to comply with section 336.9-616(b)(2). 
133.11     (f) [STATUTORY DAMAGES:  NONCOMPLIANCE WITH SECTION 
133.12  336.9-210.] A debtor or consumer obligor may recover damages 
133.13  under subsection (b) and, in addition, $500 in each case from a 
133.14  person that, without reasonable cause, fails to comply with a 
133.15  request under section 336.9-210.  A recipient of a request under 
133.16  section 336.9-210 which never claimed an interest in the 
133.17  collateral or obligations that are the subject of a request 
133.18  under that section has a reasonable excuse for failure to comply 
133.19  with the request within the meaning of this subsection. 
133.20     (g) [LIMITATION OF SECURITY INTEREST:  NONCOMPLIANCE WITH 
133.21  SECTION 336.9-210.] If a secured party fails to comply with a 
133.22  request regarding a list of collateral or a statement of account 
133.23  under section 336.9-210, the secured party may claim a security 
133.24  interest only as shown in the list or statement included in the 
133.25  request as against a person that is reasonably misled by the 
133.26  failure. 
133.27     Sec. 127.  [336.9-626] [ACTION IN WHICH DEFICIENCY OR 
133.28  SURPLUS IS IN ISSUE.] 
133.29     (a) [APPLICABLE RULES IF AMOUNT OF DEFICIENCY OR SURPLUS IS 
133.30  IN ISSUE.] In an action arising from a transaction, other than a 
133.31  consumer transaction, in which the amount of a deficiency or 
133.32  surplus is in issue, the following rules apply: 
133.33     (1) A secured party need not prove compliance with the 
133.34  provisions of this part relating to collection, enforcement, 
133.35  disposition, or acceptance unless the debtor or a secondary 
133.36  obligor places the secured party's compliance in issue. 
134.1      (2) If the secured party's compliance is placed in issue, 
134.2   the secured party has the burden of establishing that the 
134.3   collection, enforcement, disposition, or acceptance was 
134.4   conducted in accordance with this part. 
134.5      (3) Except as otherwise provided in section 336.9-628, if a 
134.6   secured party fails to prove that the collection, enforcement, 
134.7   disposition, or acceptance was conducted in accordance with the 
134.8   provisions of this part relating to collection, enforcement, 
134.9   disposition, or acceptance, the liability of a debtor or a 
134.10  secondary obligor for a deficiency is limited to an amount by 
134.11  which the sum of the secured obligation, expenses, and attorneys 
134.12  fees exceeds the greater of: 
134.13     (A) the proceeds of the collection, enforcement, 
134.14  disposition, or acceptance; or 
134.15     (B) the amount of proceeds that would have been realized 
134.16  had the noncomplying secured party proceeded in accordance with 
134.17  the provisions of this part relating to collection, enforcement, 
134.18  disposition, or acceptance. 
134.19     (4) For purposes of paragraph (3)(B), the amount of 
134.20  proceeds that would have been realized is equal to the sum of 
134.21  the secured obligation, expenses, and attorneys fees unless the 
134.22  secured party proves that the amount is less than that sum. 
134.23     (5) If a deficiency or surplus is calculated under section 
134.24  336.9-615(f), the debtor or obligor has the burden of 
134.25  establishing that the amount of proceeds of the disposition is 
134.26  significantly below the range of prices that a complying 
134.27  disposition to a person other than the secured party, a person 
134.28  related to the secured party, or a secondary obligor would have 
134.29  brought. 
134.30     (b) [NONCONSUMER TRANSACTIONS; NO INFERENCE.] The 
134.31  limitation of the rules in subsection (a) to transactions other 
134.32  than consumer transactions is intended to leave to the court the 
134.33  determination of the proper rules in consumer transactions.  The 
134.34  court may not infer from that limitation the nature of the 
134.35  proper rule in consumer transactions and may continue to apply 
134.36  established approaches. 
135.1      Sec. 128.  [336.9-627] [DETERMINATION OF WHETHER CONDUCT 
135.2   WAS COMMERCIALLY REASONABLE.] 
135.3      (a) [GREATER AMOUNT OBTAINABLE UNDER OTHER CIRCUMSTANCES; 
135.4   NO PRECLUSION OF COMMERCIAL REASONABLENESS.] The fact that a 
135.5   greater amount could have been obtained by a collection, 
135.6   enforcement, disposition, or acceptance at a different time or 
135.7   in a different method from that selected by the secured party is 
135.8   not of itself sufficient to preclude the secured party from 
135.9   establishing that the collection, enforcement, disposition, or 
135.10  acceptance was made in a commercially reasonable manner. 
135.11     (b) [DISPOSITIONS THAT ARE COMMERCIALLY REASONABLE.] A 
135.12  disposition of collateral is made in a commercially reasonable 
135.13  manner if the disposition is made: 
135.14     (1) in the usual manner on any recognized market; 
135.15     (2) at the price current in any recognized market at the 
135.16  time of the disposition; or 
135.17     (3) otherwise in conformity with reasonable commercial 
135.18  practices among dealers in the type of property that was the 
135.19  subject of the disposition. 
135.20     (c) [APPROVAL BY COURT OR ON BEHALF OF CREDITORS.] A 
135.21  collection, enforcement, disposition, or acceptance is 
135.22  commercially reasonable if it has been approved: 
135.23     (1) in a judicial proceeding; 
135.24     (2) by a bona fide creditors' committee; 
135.25     (3) by a representative of creditors; or 
135.26     (4) by an assignee for the benefit of creditors. 
135.27     (d) [APPROVAL UNDER SUBSECTION (C) NOT NECESSARY; ABSENCE 
135.28  OF APPROVAL HAS NO EFFECT.] Approval under subsection (c) need 
135.29  not be obtained, and lack of approval does not mean that the 
135.30  collection, enforcement, disposition, or acceptance is not 
135.31  commercially reasonable. 
135.32     Sec. 129.  [336.9-628] [NONLIABILITY AND LIMITATION ON 
135.33  LIABILITY OF SECURED PARTY; LIABILITY OF SECONDARY OBLIGOR.] 
135.34     (a) [LIMITATION OF LIABILITY OF SECURED PARTY FOR 
135.35  NONCOMPLIANCE WITH ARTICLE.] Unless a secured party knows that a 
135.36  person is a debtor or obligor, knows the identity of the person, 
136.1   and knows how to communicate with the person: 
136.2      (1) the secured party is not liable to the person, or to a 
136.3   secured party or lienholder that has filed a financing statement 
136.4   against the person, for failure to comply with this article; and 
136.5      (2) the secured party's failure to comply with this article 
136.6   does not affect the liability of the person for a deficiency. 
136.7      (b) [LIMITATION OF LIABILITY BASED ON STATUS AS SECURED 
136.8   PARTY.] A secured party is not liable because of its status as 
136.9   secured party: 
136.10     (1) to a person that is a debtor or obligor, unless the 
136.11  secured party knows: 
136.12     (A) that the person is a debtor or obligor; 
136.13     (B) the identity of the person; and 
136.14     (C) how to communicate with the person; or 
136.15     (2) to a secured party or lienholder that has filed a 
136.16  financing statement against a person, unless the secured party 
136.17  knows: 
136.18     (A) that the person is a debtor; and 
136.19     (B) the identity of the person. 
136.20     (c) [LIMITATION OF LIABILITY IF GOOD FAITH BELIEF THAT 
136.21  TRANSACTION IS NOT A CONSUMER GOODS TRANSACTION OR CONSUMER 
136.22  TRANSACTION.] A secured party is not liable to any person, and a 
136.23  persons liability for a deficiency is not affected, because of 
136.24  any act or omission arising out of the secured party's 
136.25  reasonable belief that a transaction is not a consumer goods 
136.26  transaction or a consumer transaction or that goods are not 
136.27  consumer goods, if the secured party's belief is based on its 
136.28  reasonable reliance on: 
136.29     (1) a debtor's representation concerning the purpose for 
136.30  which collateral was to be used, acquired, or held; or 
136.31     (2) an obligor's representation concerning the purpose for 
136.32  which a secured obligation was incurred. 
136.33     (d) [LIMITATION OF LIABILITY FOR STATUTORY DAMAGES.] A 
136.34  secured party is not liable to any person under section 
136.35  336.9-625(c)(2) for its failure to comply with section 336.9-616.
136.36     (e) [LIMITATION OF MULTIPLE LIABILITY FOR STATUTORY 
137.1   DAMAGES.] A secured party is not liable under section 
137.2   336.9-625(c)(2) more than once with respect to any one secured 
137.3   obligation. 
137.4                                Part 7 
137.5                              TRANSITION 
137.6      Sec. 130.  [336.9-701] [EFFECTIVE DATE.] 
137.7      This act takes effect July 1, 2001. 
137.8      Sec. 131.  [336.9-702] [SAVINGS CLAUSE.] 
137.9      (a) [PREEFFECTIVE DATE TRANSACTIONS OR LIENS.] Except as 
137.10  otherwise provided in this part, this act applies to a 
137.11  transaction or lien within its scope, even if the transaction or 
137.12  lien was entered into or created before this act takes effect. 
137.13     (b) [CONTINUING VALIDITY.] Except as otherwise provided in 
137.14  subsection (c) and sections 336.9-703 through 336.9-709: 
137.15     (1) transactions and liens that were not governed by former 
137.16  article 9, were validly entered into or created before this act 
137.17  takes effect, and would be subject to this act if they had been 
137.18  entered into or created after this act takes effect, and the 
137.19  rights, duties, and interests flowing from those transactions 
137.20  and liens remain valid after this act takes effect; and 
137.21     (2) the transactions and liens may be terminated, 
137.22  completed, consummated, and enforced as required or permitted by 
137.23  this act or by the law that otherwise would apply if this act 
137.24  had not taken effect. 
137.25     (c) [PREEFFECTIVE DATE PROCEEDINGS.] This act does not 
137.26  affect an action, case, or proceeding commenced before this act 
137.27  takes effect. 
137.28     Sec. 132.  [336.9-703] [SECURITY INTEREST PERFECTED BEFORE 
137.29  EFFECTIVE DATE.] 
137.30     (a) [CONTINUING PRIORITY OVER LIEN CREDITOR:  PERFECTION 
137.31  REQUIREMENTS SATISFIED.] A security interest that is enforceable 
137.32  immediately before this act takes effect and would have priority 
137.33  over the rights of a person that becomes a lien creditor at that 
137.34  time is a perfected security interest under this act if, when 
137.35  this act takes effect, the applicable requirements for 
137.36  enforceability and perfection under this act are satisfied 
138.1   without further action. 
138.2      (b) [CONTINUING PRIORITY OVER LIEN CREDITOR:  PERFECTION 
138.3   REQUIREMENTS NOT SATISFIED.] Except as otherwise provided in 
138.4   section 336.9-705, if, immediately before this act takes effect, 
138.5   a security interest is enforceable and would have priority over 
138.6   the rights of a person that becomes a lien creditor at that 
138.7   time, but the applicable requirements for enforceability or 
138.8   perfection under this act are not satisfied when this act takes 
138.9   effect, the security interest: 
138.10     (1) is a perfected security interest for one year after 
138.11  this act takes effect; 
138.12     (2) remains enforceable thereafter only if the security 
138.13  interest becomes enforceable under section 336.9-203 before the 
138.14  year expires; and 
138.15     (3) remains perfected thereafter only if the applicable 
138.16  requirements for perfection under this act are satisfied before 
138.17  the year expires. 
138.18     Sec. 133.  [336.9-704] [SECURITY INTEREST UNPERFECTED 
138.19  BEFORE EFFECTIVE DATE.] 
138.20     A security interest that is enforceable immediately before 
138.21  this act takes effect but which would be subordinate to the 
138.22  rights of a person that becomes a lien creditor at that time: 
138.23     (1) remains an enforceable security interest for one year 
138.24  after this act takes effect; 
138.25     (2) remains enforceable thereafter if the security interest 
138.26  becomes enforceable under section 336.9-203 when this act takes 
138.27  effect or within one year thereafter; and 
138.28     (3) becomes perfected: 
138.29     (A) without further action, when this act takes effect if 
138.30  the applicable requirements for perfection under this act are 
138.31  satisfied before or at that time; or 
138.32     (B) when the applicable requirements for perfection are 
138.33  satisfied if the requirements are satisfied after that time. 
138.34     Sec. 134.  [336.9-705] [EFFECTIVENESS OF ACTION TAKEN 
138.35  BEFORE EFFECTIVE DATE.] 
138.36     (a) [PREEFFECTIVE DATE ACTION; ONE-YEAR PERFECTION PERIOD 
139.1   UNLESS REPERFECTED.] If action, other than the filing of a 
139.2   financing statement, is taken before this act takes effect and 
139.3   the action would have resulted in priority of a security 
139.4   interest over the rights of a person that becomes a lien 
139.5   creditor had the security interest become enforceable before 
139.6   this act takes effect, the action is effective to perfect a 
139.7   security interest that attaches under this act within one year 
139.8   after this act takes effect.  An attached security interest 
139.9   becomes unperfected one year after this act takes effect unless 
139.10  the security interest becomes a perfected security interest 
139.11  under this act before the expiration of that period. 
139.12     (b) [PREEFFECTIVE DATE FILING.] The filing of a financing 
139.13  statement before this act takes effect is effective to perfect a 
139.14  security interest to the extent the filing would satisfy the 
139.15  applicable requirements for perfection under this act. 
139.16     (c) [PREEFFECTIVE DATE FILING IN JURISDICTION FORMERLY 
139.17  GOVERNING PERFECTION.] This act does not render ineffective an 
139.18  effective financing statement that, before this act takes 
139.19  effect, is filed and satisfies the applicable requirements for 
139.20  perfection under the law of the jurisdiction governing 
139.21  perfection as provided in Minnesota Statutes 1998, section 
139.22  336.9-103.  However, except as otherwise provided in subsections 
139.23  (d) and (e) and section 336.9-706, the financing statement 
139.24  ceases to be effective at the earlier of: 
139.25     (1) the time the financing statement would have ceased to 
139.26  be effective under the law of the jurisdiction in which it is 
139.27  filed; or 
139.28     (2) June 30, 2006. 
139.29     (d) [CONTINUATION STATEMENT.] The filing of a continuation 
139.30  statement after this act takes effect does not continue the 
139.31  effectiveness of the financing statement filed before this act 
139.32  takes effect.  However, upon the timely filing of a continuation 
139.33  statement after this act takes effect and in accordance with the 
139.34  law of the jurisdiction governing perfection as provided in Part 
139.35  3, the effectiveness of a financing statement filed in the same 
139.36  office in that jurisdiction before this act takes effect 
140.1   continues for the period provided by the law of that 
140.2   jurisdiction. 
140.3      (e) [APPLICATION OF SUBSECTION (C)(2) TO TRANSMITTING 
140.4   UTILITY FINANCING STATEMENT.] Subsection (c)(2) applies to a 
140.5   financing statement that, before this act takes effect, is filed 
140.6   against a transmitting utility and satisfies the applicable 
140.7   requirements for perfection under the law of the jurisdiction 
140.8   governing perfection as provided in Minnesota Statutes 1998, 
140.9   section 336.9-103, only to the extent that Part 3 provides that 
140.10  the law of a jurisdiction other than the jurisdiction in which 
140.11  the financing statement is filed governs perfection of a 
140.12  security interest in collateral covered by the financing 
140.13  statement. 
140.14     (f) [APPLICATION OF PART 5.] A financing statement that 
140.15  includes a financing statement filed before this act takes 
140.16  effect and a continuation statement filed after this act takes 
140.17  effect is effective only to the extent that it satisfies the 
140.18  requirements of Part 5 for an initial financing statement. 
140.19     Sec. 135.  [336.9-706] [WHEN INITIAL FINANCING STATEMENT 
140.20  SUFFICES TO CONTINUE EFFECTIVENESS OF FINANCING STATEMENT.] 
140.21     (a) [INITIAL FINANCING STATEMENT IN LIEU OF CONTINUATION 
140.22  STATEMENT.] The filing of an initial financing statement in the 
140.23  office specified in section 336.9-501 continues the 
140.24  effectiveness of a financing statement filed before this act 
140.25  takes effect if: 
140.26     (1) the filing of an initial financing statement in that 
140.27  office would be effective to perfect a security interest under 
140.28  this act; 
140.29     (2) the preeffective date financing statement was filed in 
140.30  an office in another state or another office in this state; and 
140.31     (3) the initial financing statement satisfies subsection 
140.32  (c). 
140.33     (b) [PERIOD OF CONTINUED EFFECTIVENESS.] The filing of an 
140.34  initial financing statement under subsection (a) continues the 
140.35  effectiveness of the preeffective date financing statement: 
140.36     (1) if the initial financing statement is filed before this 
141.1   act takes effect, for the period provided in Minnesota Statutes 
141.2   1998, section 336.9-403, with respect to a financing statement; 
141.3   and 
141.4      (2) if the initial financing statement is filed after this 
141.5   act takes effect, for the period provided in section 336.9-515 
141.6   with respect to an initial financing statement. 
141.7      (c) [REQUIREMENTS FOR INITIAL FINANCING STATEMENT UNDER 
141.8   SUBSECTION (A).] To be effective for purposes of subsection (a), 
141.9   an initial financing statement must: 
141.10     (1) satisfy the requirements of Part 5 for an initial 
141.11  financing statement; 
141.12     (2) identify the preeffective date financing statement by 
141.13  indicating the office in which the financing statement was filed 
141.14  and providing the dates of filing and file numbers, if any, of 
141.15  the financing statement and of the most recent continuation 
141.16  statement filed with respect to the financing statement; and 
141.17     (3) indicate that the preeffective date financing statement 
141.18  remains effective. 
141.19     Sec. 136.  [336.9-707] [AMENDMENT OF PRE-EFFECTIVE DATE 
141.20  FINANCING STATEMENT.] 
141.21     (a) [PRE-EFFECTIVE DATE FINANCING STATEMENT.] In this 
141.22  section, "pre-effective date financing statement" means a 
141.23  financing statement filed before this act takes effect. 
141.24     (b) [APPLICABLE LAW.] After this act takes effect, a person 
141.25  may add or delete collateral covered by, continue or terminate 
141.26  the effectiveness of, or otherwise amend the information 
141.27  provided in, a pre-effective date financing statement only in 
141.28  accordance with the law of the jurisdiction governing perfection 
141.29  as provided in Part 3.  However, the effectiveness of a 
141.30  pre-effective date financing statement also may be terminated in 
141.31  accordance with the law of the jurisdiction in which the 
141.32  financing statement is filed. 
141.33     (c) [METHOD OF AMENDING:  GENERAL RULE.] Except as 
141.34  otherwise provided in subsection (d), if the law of this state 
141.35  governs perfection of a security interest, the information in a 
141.36  pre-effective date financing statement may be amended after this 
142.1   act takes effect only if: 
142.2      (1) the pre-effective date financing statement and an 
142.3   amendment are filed in the office specified in section 
142.4   336.9-501; 
142.5      (2) an amendment is filed in the office specified in 
142.6   section 336.9-501 concurrently with, or after the filing in that 
142.7   office of, an initial financing statement that satisfies section 
142.8   336.9-706(c); or 
142.9      (3) an initial financing statement that provides the 
142.10  information as amended and satisfies section 336.9-706(c) is 
142.11  filed in the office specified in section 336.9-501. 
142.12     (d) [METHOD OF AMENDING:  CONTINUATION.] If the law of this 
142.13  state governs perfection of a security interest, the 
142.14  effectiveness of a pre-effective date financing statement may be 
142.15  continued only under section 336.9-705(d) and (f) or 336.9-706. 
142.16     (e) [METHOD OF AMENDING:  ADDITIONAL TERMINATION 
142.17  RULE.] Whether or not the law of this state governs perfection 
142.18  of a security interest, the effectiveness of a pre-effective 
142.19  date financing statement filed in this state may be terminated 
142.20  after this act takes effect by filing a termination statement in 
142.21  the office in which the pre-effective date financing statement 
142.22  is filed, unless an initial financing statement that satisfies 
142.23  section 336.9-706(c) has been filed in the office specified by 
142.24  the law of the jurisdiction governing perfection as provided in 
142.25  Part 3 as the office in which to file a financing statement. 
142.26     Sec. 137.  [336.9-708] [PERSONS ENTITLED TO FILE INITIAL 
142.27  FINANCING STATEMENT OR CONTINUATION STATEMENT.] 
142.28     A person may file an initial financing statement or a 
142.29  continuation statement under this part if: 
142.30     (1) the secured party of record authorizes the filing; and 
142.31     (2) the filing is necessary under this part: 
142.32     (A) to continue the effectiveness of a financing statement 
142.33  filed before this act takes effect; or 
142.34     (B) to perfect or continue the perfection of a security 
142.35  interest. 
142.36     Sec. 138.  [336.9-709] [PRIORITY.] 
143.1      (a) [LAW GOVERNING PRIORITY.] This act determines the 
143.2   priority of conflicting claims to collateral.  However, if the 
143.3   relative priorities of the claims were established before this 
143.4   act takes effect, former article 9 determines priority. 
143.5      (b) [PRIORITY IF SECURITY INTERESTS BECOME ENFORCEABLE 
143.6   UNDER SECTION 336.9-203.] For purposes of section 336.9-322(a), 
143.7   the priority of a security interest that becomes enforceable 
143.8   under section 336.9-203 dates from the time this act takes 
143.9   effect if the security interest is perfected under this act by 
143.10  the filing of a financing statement before this act takes effect 
143.11  which would not have been effective to perfect the security 
143.12  interest under former article 9.  This subsection does not apply 
143.13  to conflicting security interests each of which is perfected by 
143.14  the filing of such a financing statement. 
143.15     Sec. 139.  [CENTRAL FILING SYSTEM SURCHARGE.] 
143.16     The secretary of state shall impose a $12 surcharge on all 
143.17  filings of financing statements received and all searches 
143.18  performed from July 1, 2000, through June 30, 2001. 
143.19     The surcharge amounts under this section must be deposited 
143.20  in the state treasury and credited to the Uniform Commercial 
143.21  Code Account established in Minnesota Statutes, section 
143.22  336.9-413. 
143.23     Money from this surcharge is appropriated from the Uniform 
143.24  Commercial Code Account to the secretary of state for the 
143.25  purpose of constructing and maintaining the central filing 
143.26  system created by this act. 
143.27     As of July 1, 2000, the department of finance shall allow 
143.28  the secretary of state to access up to the full amount of the 
143.29  annualized cash flow to be created by the surcharge imposed 
143.30  under this section. 
143.31     This section expires July 1, 2001. 
143.32     Sec. 140.  [SATELLITE OFFICES; EXEMPT RULEMAKING.] 
143.33     The secretary of state shall adopt rules governing the 
143.34  establishment and operation of satellite offices under Minnesota 
143.35  Statutes, sections 336.9-527 to 336.9-530, by July 1, 2000.  
143.36     The rules are exempt from the rulemaking provisions of 
144.1   Minnesota Statutes, chapter 14, but must be adopted under 
144.2   Minnesota Statutes, section 14.386.  Notwithstanding Minnesota 
144.3   Statutes, section 14.386, paragraph (b), the rules remain in 
144.4   effect until otherwise amended or repealed.  
144.5      The authority to adopt rules under this section expires on 
144.6   the date the rules are effective.  The expiration of this 
144.7   authority does not affect the validity of the rules adopted 
144.8   under it. 
144.9      This section is effective the day following final enactment.
144.10     Sec. 141.  [REPEALER.] 
144.11     Minnesota Statutes 1998, sections 336.9-101; 336.9-102; 
144.12  336.9-103; 336.9-104; 336.9-105; 336.9-106; 336.9-107; 
144.13  336.9-108; 336.9-109; 336.9-110; 336.9-112; 336.9-113; 
144.14  336.9-114; 336.9-115; 336.9-116; 336.9-201; 336.9-202; 
144.15  336.9-204; 336.9-205; 336.9-206; 336.9-207; 336.9-208; 
144.16  336.9-301; 336.9-302; 336.9-303; 336.9-304; 336.9-305; 
144.17  336.9-306; 336.9-307; 336.9-308; 336.9-309; 336.9-310; 
144.18  336.9-311; 336.9-312; 336.9-313; 336.9-314; 335.9-315; 
144.19  336.9-316; 336.9-317; 336.9-318; 336.9-403; 336.9-404; 
144.20  336.9-405; 336.9-406; 336.9-407; 336.9-408; 336.9-410; 
144.21  336.9-412; 336.9-413; 336.9-501; 336.9-502; 336.9-503; 
144.22  336.9-504; 336.9-505; 336.9-506; 336.9-507; and 336.9-508; and 
144.23  Minnesota Statutes 1999 Supplement, sections 336.9-203; 
144.24  336.9-401; 336.9-402; and 336.9-411, are repealed. 
144.25                             ARTICLE 2 
144.26              CONFORMING AMENDMENTS TO OTHER ARTICLES 
144.27     Section 1.  Minnesota Statutes 1998, section 336.1-105, is 
144.28  amended to read: 
144.29     336.1-105 [TERRITORIAL APPLICATION OF THE CHAPTER; PARTIES' 
144.30  POWER TO CHOOSE APPLICABLE LAW.] 
144.31     (1) Except as provided hereafter in this section, when a 
144.32  transaction bears a reasonable relation to this state and also 
144.33  to another state or nation the parties may agree that the law 
144.34  either of this state or of such other state or nation shall 
144.35  govern their rights and duties.  Failing such agreement this 
144.36  chapter applies to transactions bearing an appropriate relation 
145.1   to this state. 
145.2      (2) Where one of the following provisions of this chapter 
145.3   specifies the applicable law, that provision governs and a 
145.4   contrary agreement is effective only to the extent permitted by 
145.5   the law (including the conflict of laws rules) so specified: 
145.6      Rights of creditors against sold goods.  Section 336.2-402. 
145.7      Applicability of the article on leases.  Sections 
145.8   336.2A-105 and 336.2A-106.  
145.9      Applicability of the article on bank deposits and 
145.10  collections.  Section 336.4-102. 
145.11     Governing law in the article on funds transfers.  Section 
145.12  336.4A-507. 
145.13     Letters of Credit.  Section 336.5-116. 
145.14     Applicability of the article on investment securities. 
145.15  Section 336.8-110. 
145.16     ~~Perfection provisions of the article on secured~~ 
145.17  ~~transactions.  Section 336.9-103.~~ 
145.18     Law governing perfection, the effect of perfection or 
145.19  nonperfection, and the priority of security interests and 
145.20  agricultural liens.  Sections 336.9-301 to 336.9-307. 
145.21     Sec. 2.  Minnesota Statutes 1998, section 336.1-201, is 
145.22  amended to read: 
145.23     336.1-201 [GENERAL DEFINITIONS.] 
145.24     Subject to additional definitions contained in the 
145.25  subsequent articles of this chapter which are applicable to 
145.26  specific articles or parts thereof, and unless the context 
145.27  otherwise requires, in this chapter: 
145.28     (1) "Action" in the sense of a judicial proceeding includes 
145.29  recoupment, counterclaim, setoff, suit in equity and any other 
145.30  proceedings in which rights are determined. 
145.31     (2) "Aggrieved party" means a party entitled to resort to a 
145.32  remedy. 
145.33     (3) "Agreement" means the bargain of the parties in fact as 
145.34  found in their language or by implication from other 
145.35  circumstances including course of dealing or usage of trade or 
145.36  course of performance as provided in this chapter (sections 
146.1   336.1-205 and 336.2-208).  Whether an agreement has legal 
146.2   consequences is determined by the provisions of this chapter, if 
146.3   applicable; otherwise by the law of contracts (section 
146.4   336.1-103).  (Compare "Contract.") 
146.5      (4) "Bank" means any person engaged in the business of 
146.6   banking. 
146.7      (5) "Bearer" means the person in possession of an 
146.8   instrument, document of title, or certificated security payable 
146.9   to bearer or endorsed in blank. 
146.10     (6) "Bill of lading" means a document evidencing the 
146.11  receipt of goods for shipment issued by a person engaged in the 
146.12  business of transporting or forwarding goods, and includes an 
146.13  airbill.  "Airbill" means a document serving for air 
146.14  transportation as a bill of lading does for marine or rail 
146.15  transportation, and includes an air consignment note or air 
146.16  waybill. 
146.17     (7) "Branch" includes a separately incorporated foreign 
146.18  branch of a bank. 
146.19     (8) "Burden of establishing" a fact means the burden of 
146.20  persuading the triers of fact that the existence of the fact is 
146.21  more probable than its nonexistence. 
146.22     (9) "Buyer in ordinary course of business" means a person 
146.23  ~~who~~ that buys goods in good faith ~~and~~, without knowledge that 
146.24  the sale ~~to that person is in violation of~~ violates the 
146.25  ~~ownership~~ rights ~~or security interest~~ of ~~a third party~~ another 
146.26  person in the goods ~~buys~~, and in the ordinary course from a 
146.27  person, other than a pawnbroker, in the business of selling 
146.28  goods of that kind ~~but does not include a pawnbroker~~.  ~~All~~ 
146.29  ~~persons who sell minerals or the like (including oil and gas) at~~ 
146.30  ~~wellhead or minehead shall be deemed to be persons~~ A person buys 
146.31  goods in the ordinary course if the sale to the person comports 
146.32  with the usual or customary practices in the kind of business in 
146.33  which the seller is engaged or with the seller's own usual or 
146.34  customary practices.  A person that sells oil, gas, or other 
146.35  minerals at the wellhead or minehead is a person in the business 
146.36  of selling goods of that kind.  ~~"Buying"~~ A buyer in ordinary 
147.1   course of business may ~~be~~ buy for cash ~~or~~, by exchange of 
147.2   other property, or on secured or unsecured credit, and ~~includes~~ 
147.3   ~~receiving~~ may acquire goods or documents of title under a 
147.4   preexisting contract for sale ~~but does not include a transfer in~~ 
147.5   ~~bulk or as security for or in total or partial satisfaction of a~~ 
147.6   ~~money debt~~.  Only a buyer that takes possession of the goods or 
147.7   has a right to recover the goods from the seller under article 2 
147.8   may be a buyer in ordinary course of business.  A person that 
147.9   acquires goods in a transfer in bulk or as security for or in 
147.10  total or partial satisfaction of a money debt is not a buyer in 
147.11  ordinary course of business. 
147.12     (10) "Conspicuous":  A term or clause is conspicuous when 
147.13  it is so written that a reasonable person against whom it is to 
147.14  operate ought to have noticed it.  A printing heading in 
147.15  capitals (as:  NONNEGOTIABLE BILL OF LADING) is conspicuous.  
147.16  Language in the body of a form is "conspicuous" if it is in 
147.17  larger or other contrasting type or color.  But in a telegram 
147.18  any stated term is "conspicuous".  Whether a term or clause is 
147.19  "conspicuous" or not is for decision by the court. 
147.20     (11) "Contract" means the total legal obligation which 
147.21  results from the parties' agreement as affected by this chapter 
147.22  and any other applicable rules of law. (Compare "Agreement.") 
147.23     (12) "Creditor" includes a general creditor, a secured 
147.24  creditor, a lien creditor and any representative of creditors, 
147.25  including an assignee for the benefit of creditors, a trustee in 
147.26  bankruptcy, a receiver in equity and an executor or 
147.27  administrator of an insolvent debtor's or assignor's estate. 
147.28     (13) "Defendant" includes a person in the position of 
147.29  defendant in a cross-action or counterclaim. 
147.30     (14) "Delivery" with respect to instruments, documents of 
147.31  title, chattel paper, or certificated securities means voluntary 
147.32  transfer of possession. 
147.33     (15) "Document of title" includes bill of lading, dock 
147.34  warrant, dock receipt, warehouse receipt or order for the 
147.35  delivery of goods, and also any other document which in the 
147.36  regular course of business or financing is treated as adequately 
148.1   evidencing that the person in possession of it is entitled to 
148.2   receive, hold and dispose of the document and the goods it 
148.3   covers.  To be a document of title a document must purport to be 
148.4   issued by or addressed to a bailee and purport to cover goods in 
148.5   the bailee's possession which are either identified or are 
148.6   fungible portions of an identified mass. 
148.7      (16) "Fault" means wrongful act, omission or breach. 
148.8      (17) "Fungible" with respect to goods or securities means 
148.9   goods or securities of which any unit is, by nature or usage of 
148.10  trade, the equivalent of any other like unit.  Goods which are 
148.11  not fungible shall be deemed fungible for the purposes of this 
148.12  chapter to the extent that under a particular agreement or 
148.13  document unlike units are treated as equivalents. 
148.14     (18) "Genuine" means free of forgery or counterfeiting. 
148.15     (19) "Good faith" means honesty in fact in the conduct or 
148.16  transaction concerned. 
148.17     (20) "Holder," with respect to a negotiable instrument, 
148.18  means the person in possession if the instrument is payable to 
148.19  bearer or, in the case of an instrument payable to an identified 
148.20  person, if the identified person is in possession.  "Holder," 
148.21  with respect to a document of title, means the person in 
148.22  possession if the goods are deliverable to bearer or to the 
148.23  order of the person in possession. 
148.24     (21) To "honor" is to pay or to accept and pay, or where a 
148.25  credit so engages to purchase or discount a draft complying with 
148.26  the terms of the credit. 
148.27     (22) "Insolvency proceedings" includes any assignment for 
148.28  the benefit of creditors or other proceedings intended to 
148.29  liquidate or rehabilitate the estate of the person involved. 
148.30     (23) A person is "insolvent" who either has ceased to pay 
148.31  debts in the ordinary course of business or cannot pay the debts 
148.32  as they become due or is insolvent within the meaning of the 
148.33  federal bankruptcy law. 
148.34     (24) "Money" means a medium of exchange authorized or 
148.35  adopted by a domestic or foreign government and includes a 
148.36  monetary unit of account established by an intergovernmental 
149.1   organization or by agreement between two or more nations. 
149.2      (25) A person has "notice" of a fact when that person 
149.3      (a)  has actual knowledge of it; or 
149.4      (b)  has received a notice or notification of it; or 
149.5      (c) from all the facts and circumstances known to that 
149.6   person at the time in question, has reason to know that it 
149.7   exists. 
149.8      A person "knows" or has "knowledge" of a fact when that 
149.9   person has actual knowledge of it.  "Discover" or "learn" or a 
149.10  word or phrase of similar import refers to knowledge rather than 
149.11  to reason to know.  The time and circumstances under which a 
149.12  notice or notification may cease to be effective are not 
149.13  determined by this chapter. 
149.14     (26) A person "notifies" or "gives" a notice or 
149.15  notification to another by taking such steps as may be 
149.16  reasonably required to inform the other in ordinary course 
149.17  whether or not such other actually comes to know of it.  A 
149.18  person "receives" a notice or notification when 
149.19     (a) it comes to that person's attention; or 
149.20     (b) it is duly delivered at the place of business through 
149.21  which the contract was made or at any other place held out by 
149.22  that person as the place for receipt of such communications. 
149.23     (27) Notice, knowledge or a notice or notification received 
149.24  by an organization is effective for a particular transaction 
149.25  from the time when it is brought to the attention of the 
149.26  individual conducting that transaction, and in any event from 
149.27  the time when it would have been brought to the individual's 
149.28  attention if the organization had exercised due diligence.  An 
149.29  organization exercises due diligence if it maintains reasonable 
149.30  routines for communicating significant information to the person 
149.31  conducting the transaction and there is reasonable compliance 
149.32  with the routines.  Due diligence does not require an individual 
149.33  acting for the organization to communicate information unless 
149.34  such communication is part of regular duties or unless the 
149.35  individual has reason to know of the transaction and that the 
149.36  transaction would be materially affected by the information. 
150.1      (28) "Organization" includes a corporation, government or 
150.2   governmental subdivision or agency, business trust, estate, 
150.3   trust, partnership or association, two or more persons having a 
150.4   joint or common interest, or any other legal or commercial 
150.5   entity. 
150.6      (29) "Party," as distinct from "third party," means a 
150.7   person who has engaged in a transaction or made an agreement 
150.8   within this chapter. 
150.9      (30) "Person" includes an individual or an organization 
150.10  (see section 336.1-102). 
150.11     (31) "Presumption" or "presumed" means that the trier of 
150.12  fact must find the existence of the fact presumed unless and 
150.13  until evidence is introduced which would support a finding of 
150.14  its nonexistence. 
150.15     (32) "Purchase" includes taking by sale, discount, 
150.16  negotiation, mortgage, pledge, lien, security interest, issue or 
150.17  reissue, gift or any other voluntary transaction creating an 
150.18  interest in property. 
150.19     (33) "Purchaser" means a person who takes by purchase. 
150.20     (34) "Remedy" means any remedial right to which an 
150.21  aggrieved party is entitled with or without resort to a tribunal.
150.22     (35) "Representative" includes an agent, an officer of a 
150.23  corporation or association, and a trustee, executor or 
150.24  administrator of an estate, or any other person empowered to act 
150.25  for another. 
150.26     (36) "Rights" includes remedies. 
150.27     (37) "Security interest" means an interest in personal 
150.28  property or fixtures which secures payment or performance of an 
150.29  obligation.  ~~The retention or reservation of title by a seller~~ 
150.30  ~~of goods notwithstanding shipment or delivery to the buyer~~ 
150.31  ~~(section 336.2-401) is limited in effect to a reservation of a~~ 
150.32  ~~"security interest".~~  The term also includes any interest of a 
150.33  consignor and a buyer of accounts ~~or~~, chattel paper ~~which~~, a 
150.34  payment intangible, or a promissory note in a transaction that 
150.35  is subject to article 9.  The special property interest of a 
150.36  buyer of goods on identification of those goods to a contract 
151.1   for sale under section 336.2-401 is not a "security interest," 
151.2   but a buyer may also acquire a "security interest" by complying 
151.3   with article 9.  ~~Unless a consignment is intended as security,~~ 
151.4   ~~reservation of title thereunder is not a "security interest,"~~ 
151.5   ~~but a consignment in any event is subject to the provisions on~~ 
151.6   ~~consignment sales (section 336.2-326).~~  Except as otherwise 
151.7   provided in section 336.2-505, the right of a seller or lessor 
151.8   of goods under article 2 or 2a to retain or acquire possession 
151.9   of the goods is not a "security interest," but a seller or 
151.10  lessor may also acquire a security interest by complying with 
151.11  article 9.  The retention or reservation of title by a seller of 
151.12  goods notwithstanding shipment or delivery to the buyer (section 
151.13  336.2-401) is limited in effect to a reservation of a security 
151.14  interest. 
151.15     Whether a transaction creates a lease or security interest 
151.16  is determined by the facts of each case; however, a transaction 
151.17  creates a security interest if the consideration the lessee is 
151.18  to pay the lessor for the right to possession and use of the 
151.19  goods is an obligation for the term of the lease not subject to 
151.20  termination by the lessee, and 
151.21     (a) the original term of the lease is equal to or greater 
151.22  than the remaining economic life of the goods, 
151.23     (b) the lessee is bound to renew the lease for the 
151.24  remaining economic life of the goods or is bound to become the 
151.25  owner of the goods, 
151.26     (c) the lessee has an option to renew the lease for the 
151.27  remaining economic life of the goods for no additional 
151.28  consideration or nominal additional consideration upon 
151.29  compliance with the lease agreement, or 
151.30     (d) the lessee has an option to become the owner of the 
151.31  goods for no additional consideration or nominal additional 
151.32  consideration upon compliance with the lease agreement. 
151.33     A transaction does not create a security interest merely 
151.34  because it provides that 
151.35     (a) the present value of the consideration the lessee is 
151.36  obligated to pay the lessor for the right to possession and use 
152.1   of the goods is substantially equal to or is greater than the 
152.2   fair market value of the goods at the time the lease is entered 
152.3   into, 
152.4      (b) the lessee assumes risk of loss of the goods, or agrees 
152.5   to pay taxes, insurance, filing, recording, or registration 
152.6   fees, or service or maintenance costs with respect to the goods, 
152.7      (c) the lessee has an option to renew the lease or to 
152.8   become the owner of the goods, 
152.9      (d) the lessee has an option to renew the lease for a fixed 
152.10  rent that is equal to or greater than the reasonably predictable 
152.11  fair market rent for the use of the goods for the term of the 
152.12  renewal at the time the option is to be performed, or 
152.13     (e) the lessee has an option to become the owner of the 
152.14  goods for a fixed price that is equal to or greater than the 
152.15  reasonably predictable fair market value of the goods at the 
152.16  time the option is to be performed. 
152.17     For purposes of this subsection (37): 
152.18     (x) Additional consideration is not nominal if (i) when the 
152.19  option to renew the lease is granted to the lessee the rent is 
152.20  stated to be the fair market rent for the use of the goods for 
152.21  the term of the renewal determined at the time the option is to 
152.22  be performed, or (ii) when the option to become the owner of the 
152.23  goods is granted to the lessee the price is stated to be the 
152.24  fair market value of the goods determined at the time the option 
152.25  is to be performed.  Additional consideration is nominal if it 
152.26  is less than the lessee's reasonably predictable cost of 
152.27  performing under the lease agreement if the option is not 
152.28  exercised; 
152.29     (y) "Reasonably predictable" and "remaining economic life 
152.30  of the goods" are to be determined with reference to the facts 
152.31  and circumstances at the time the transaction is entered into; 
152.32  and 
152.33     (z) "Present value" means the amount as of a date certain 
152.34  of one or more sums payable in the future, discounted to the 
152.35  date certain.  The discount is determined by the interest rate 
152.36  specified by the parties if the rate is not manifestly 
153.1   unreasonable at the time the transaction is entered into; 
153.2   otherwise, the discount is determined by a commercially 
153.3   reasonable rate that takes into account the facts and 
153.4   circumstances of each case at the time the transaction was 
153.5   entered into. 
153.6      (38) "Send" in connection with any writing or notice means 
153.7   to deposit in the mail or deliver for transmission by any other 
153.8   usual means of communication with postage or cost of 
153.9   transmission provided for and properly addressed and in the case 
153.10  of an instrument to an address specified thereon or otherwise 
153.11  agreed, or if there be none to any address reasonable under the 
153.12  circumstances.  The receipt of any writing or notice within the 
153.13  time at which it would have arrived if properly sent has the 
153.14  effect of a proper sending. 
153.15     (39) "Signed" includes any symbol executed or adopted by a 
153.16  party with present intention to authenticate a writing. 
153.17     (40) "Surety" includes guarantor. 
153.18     (41) "Telegram" includes a message transmitted by radio, 
153.19  teletype, cable, any mechanical method of transmission, or the 
153.20  like. 
153.21     (42) "Term" means that portion of an agreement which 
153.22  relates to a particular matter. 
153.23     (43) "Unauthorized" signature means one made without 
153.24  actual, implied, or apparent authority and includes a forgery. 
153.25     (44) "Value":  Except as otherwise provided with respect to 
153.26  negotiable instruments and bank collections (sections 336.3-303, 
153.27  336.4-210 and 336-4.211) a person gives "value" for rights by 
153.28  acquiring them 
153.29     (a) in return for a binding commitment to extend credit or 
153.30  for the extension of immediately available credit whether or not 
153.31  drawn upon and whether or not a chargeback is provided for in 
153.32  the event of difficulties in collection; or 
153.33     (b) as security for or in total or partial satisfaction of 
153.34  a preexisting claim; or 
153.35     (c) by accepting delivery pursuant to a preexisting 
153.36  contract for purchase; or 
154.1      (d) generally, in return for any consideration sufficient 
154.2   to support a simple contract. 
154.3      (45) "Warehouse receipt" means a receipt issued by a person 
154.4   engaged in the business of storing goods for hire. 
154.5      (46) "Written" or "writing" includes printing, typewriting 
154.6   or any other intentional reduction to tangible form. 
154.7      Sec. 3.  Minnesota Statutes 1998, section 336.2-103, is 
154.8   amended to read: 
154.9      336.2-103 [DEFINITIONS AND INDEX OF DEFINITIONS.] 
154.10     (1) In this article unless the context otherwise requires: 
154.11     (a) "Buyer" means a person who buys or contracts to buy 
154.12  goods. 
154.13     (b) "Good faith" in the case of a merchant means honesty in 
154.14  fact and the observance of reasonable commercial standards of 
154.15  fair dealing in the trade. 
154.16     (c) "Receipt" of goods means taking physical possession of 
154.17  them. 
154.18     (d) "Seller" means a person who sells or contracts to sell 
154.19  goods.  
154.20     (2) Other definitions applying to this article or to 
154.21  specified parts thereof, and the sections in which they appear 
154.22  are: 
154.23     "Acceptance," section 336.2-606. 
154.24     "Banker's credit," section 336.2-325. 
154.25     "Between merchants," section 336.2-104. 
154.26     "Cancellation," section 336.2-106(4). 
154.27     "Commercial unit," section 336.2-105. 
154.28     "Confirmed credit," section 336.2-325. 
154.29     "Conforming to contract," section 336.2-106. 
154.30     "Contract for sale," section 336.2-106. 
154.31     "Cover," section 336.2-712. 
154.32     "Entrusting," section 336.2-403. 
154.33     "Financing agency," section 336.2-104. 
154.34     "Future goods," section 336.2-105. 
154.35     "Goods," section 336.2-105. 
154.36     "Identification," section 336.2-501. 
155.1      "Installment contract," section 336.2-612. 
155.2      "Letter of credit," section 336.2-325. 
155.3      "Lot," section 336.2-105. 
155.4      "Merchant," section 336.2-104. 
155.5      "Overseas," section 336.2-323. 
155.6      "Person in position of seller," section 336.2-707. 
155.7      "Present sale," section 336.2-106. 
155.8      "Sale," section 336.2-106. 
155.9      "Sale on approval," section 336.2-326. 
155.10     "Sale or return," section 336.2-326. 
155.11     "Termination," section 336.2-106. 
155.12     (3) The following definitions in other articles apply to 
155.13  this article: 
155.14     "Check," section 336.3-104. 
155.15     "Consignee," section 336.7-102. 
155.16     "Consignor," section 336.7-102. 
155.17     "Consumer goods," section ~~336.9-109~~ 336.9-102. 
155.18     "Dishonor," section 336.3-502. 
155.19     "Draft," section 336.3-104. 
155.20     (4) In addition article 1 contains general definitions and 
155.21  principles of construction and interpretation applicable 
155.22  throughout this article. 
155.23     Sec. 4.  Minnesota Statutes 1998, section 336.2-210, is 
155.24  amended to read: 
155.25     336.2-210 [DELEGATION OF PERFORMANCE; ASSIGNMENT OF 
155.26  RIGHTS.] 
155.27     (1) A party may perform a duty through a delegate unless 
155.28  otherwise agreed or unless the other party has a substantial 
155.29  interest in having the original promisor perform or control the 
155.30  acts required by the contract.  No delegation of performance 
155.31  relieves the party delegating of any duty to perform or any 
155.32  liability for breach.  
155.33     (2) Unless otherwise agreed all rights of either seller or 
155.34  buyer can be assigned except where the assignment would 
155.35  materially change the duty of the other party, or increase 
155.36  materially the burden or risk imposed on the other party by the 
156.1   contract, or impair materially the other party's chance of 
156.2   obtaining return performance.  A right to damages for breach of 
156.3   the whole contract or a right arising out of the assignor's due 
156.4   performance of the assignor's entire obligation can be assigned 
156.5   despite agreement otherwise.  
156.6      (3) The creation, attachment, perfection, or enforcement of 
156.7   a security interest in the seller's interest under a contract is 
156.8   not a transfer that materially changes the duty of or increases 
156.9   materially the burden or risk imposed on the buyer or impairs 
156.10  materially the buyer's chance of obtaining return performance 
156.11  within the purview of subsection (2) unless, and then only to 
156.12  the extent that, enforcement actually results in a delegation of 
156.13  material performance of the seller.  Even in that event, the 
156.14  creation, attachment, perfection, and enforcement of the 
156.15  security interest remain effective, but (i) the seller is liable 
156.16  to the buyer for damages caused by the delegation to the extent 
156.17  that the damages could not reasonably be prevented by the buyer, 
156.18  and (ii) a court having jurisdiction may grant other appropriate 
156.19  relief, including cancellation of the contract for sale or an 
156.20  injunction against enforcement of the security interest or 
156.21  consummation of the enforcement. 
156.22     (4) Unless the circumstances indicate the contrary a 
156.23  prohibition of assignment of "the contract" is to be construed 
156.24  as barring only the delegation to the assignee of the assignor's 
156.25  performance.  
156.26     ~~(4)~~ (5) An assignment of "the contract" or of "all my 
156.27  rights under the contract" or an assignment in similar general 
156.28  terms is an assignment of rights and unless the language or the 
156.29  circumstances (as in an assignment for security) indicate the 
156.30  contrary, it is a delegation of performance of the duties of the 
156.31  assignor and its acceptance by the assignee constitutes a 
156.32  promise by the assignee to perform those duties.  This promise 
156.33  is enforceable by either the assignor or the other party to the 
156.34  original contract.  
156.35     ~~(5)~~ (6) The other party may treat any assignment which 
156.36  delegates performance as creating reasonable grounds for 
157.1   insecurity and may without prejudice to the rights of the other 
157.2   party against the assignor demand assurances from the assignee 
157.3   (section 336.2-609). 
157.4      Sec. 5.  Minnesota Statutes 1998, section 336.2-326, is 
157.5   amended to read: 
157.6      336.2-326 [SALE ON APPROVAL AND SALE OR RETURN; ~~CONSIGNMENT~~ 
157.7   ~~SALES AND~~ RIGHTS OF CREDITORS.] 
157.8      (1) Unless otherwise agreed, if delivered goods may be 
157.9   returned by the buyer even though they conform to the contract, 
157.10  the transaction is 
157.11     (a) a "sale on approval" if the goods are delivered 
157.12  primarily for use, and 
157.13     (b) a "sale or return" if the goods are delivered primarily 
157.14  for resale.  
157.15     (2) ~~Except as provided in subsection (3),~~ Goods held on 
157.16  approval are not subject to the claims of the buyer's creditors 
157.17  until acceptance; goods held on sale or return are subject to 
157.18  such claims while in the buyer's possession.  
157.19     (3) ~~Where goods are delivered to a person for sale and such~~ 
157.20  ~~person maintains a place of business dealing in goods of the~~ 
157.21  ~~kind involved, under a name other than the name of the person~~ 
157.22  ~~making delivery, then with respect to claims of creditors of the~~ 
157.23  ~~person conducting the business the goods are deemed to be on~~ 
157.24  ~~sale or return.  The provisions of this subsection are~~ 
157.25  ~~applicable even though an agreement purports to reserve title to~~ 
157.26  ~~the person making delivery until payment or resale or uses such~~ 
157.27  ~~words as "on consignment" or "on memorandum."  However, this~~ 
157.28  ~~subsection is not applicable if the person making delivery~~ 
157.29     ~~(a) complies with an applicable law providing for a~~ 
157.30  ~~consignor's interest or the like to be evidenced by a sign, or~~ 
157.31     ~~(b) establishes that the person conducting the business is~~ 
157.32  ~~generally known by the person's creditors to be substantially~~ 
157.33  ~~engaged in selling the goods of others, or~~ 
157.34     ~~(c) complies with the filing provisions of the article on~~ 
157.35  ~~secured transactions (article 9).~~  
157.36     ~~(4)~~ Any "or return" term of a contract for sale is to be 
158.1   treated as a separate contract for sale within the statute of 
158.2   frauds section of this article (section 336.2-201) and as 
158.3   contradicting the sale aspect of the contract within the 
158.4   provisions of this article on parol or extrinsic evidence 
158.5   (section 336.2-202).  
158.6      Sec. 6.  Minnesota Statutes 1998, section 336.2-502, is 
158.7   amended to read: 
158.8      336.2-502 [BUYER'S RIGHT TO GOODS ON SELLER'S REPUDIATION, 
158.9   FAILURE TO DELIVER, OR INSOLVENCY.] 
158.10     (1) Subject to ~~subsection~~ subsections (2) and (3) and even 
158.11  though the goods have not been shipped a buyer who has paid a 
158.12  part or all of the price of goods in which the buyer has a 
158.13  special property under the provisions of the immediately 
158.14  preceding section may on making and keeping good a tender of any 
158.15  unpaid portion of their price recover them from the seller if: 
158.16     (a) in the case of goods bought for personal, family, or 
158.17  household purposes, the seller repudiates or fails to deliver as 
158.18  required by the contract; or 
158.19     (b) in all cases, the seller becomes insolvent within ten 
158.20  days after receipt of the first installment on their price.  
158.21     (2) The buyer's right to recover the goods under subsection 
158.22  (1)(a) vests upon acquisition of a special property, even if the 
158.23  seller had not then repudiated or failed to deliver. 
158.24     (3) If the identification creating the special property has 
158.25  been made by the buyer, the buyer acquires the right to recover 
158.26  the goods only if they conform to the contract for sale. 
158.27     Sec. 7.  Minnesota Statutes 1998, section 336.2-716, is 
158.28  amended to read: 
158.29     336.2-716 [BUYER'S RIGHT TO SPECIFIC PERFORMANCE OR 
158.30  REPLEVIN.] 
158.31     (1) Specific performance may be decreed where the goods are 
158.32  unique or in other proper circumstances.  
158.33     (2) The decree for specific performance may include such 
158.34  terms and conditions as to payment of the price, damages, or 
158.35  other relief as the court may deem just.  
158.36     (3) The buyer has a right of replevin for goods identified 
159.1   to the contract if after reasonable effort the buyer is unable 
159.2   to effect cover for such goods or the circumstances reasonably 
159.3   indicate that such effort will be unavailing or if the goods 
159.4   have been shipped under reservation and satisfaction of the 
159.5   security interest in them has been made or tendered.  In the 
159.6   case of goods bought for personal, family, or household 
159.7   purposes, the buyer's right of replevin vests upon acquisition 
159.8   of a special property, even if the seller had not then 
159.9   repudiated or failed to deliver.  
159.10     Sec. 8.  Minnesota Statutes 1998, section 336.2A-103, is 
159.11  amended to read: 
159.12     336.2A-103 [DEFINITIONS AND INDEX OF DEFINITIONS.] 
159.13     (1) In this article unless the context otherwise requires: 
159.14     (a) "Buyer in ordinary course of business" means a person 
159.15  who in good faith and without knowledge that the sale is in 
159.16  violation of the ownership rights or security interest or 
159.17  leasehold interest of a third party in the goods, buys in 
159.18  ordinary course from a person in the business of selling goods 
159.19  of that kind but does not include a pawnbroker.  "Buying" may be 
159.20  for cash or by exchange of other property or on secured or 
159.21  unsecured credit and includes receiving goods or documents of 
159.22  title under a preexisting contract for sale but does not include 
159.23  a transfer in bulk or as security for or in total or partial 
159.24  satisfaction of a money debt. 
159.25     (b) "Cancellation" occurs when either party puts an end to 
159.26  the lease contract for default by the other party. 
159.27     (c) "Commercial unit" means a unit of goods that by 
159.28  commercial usage is a single whole for purposes of lease and 
159.29  division of which materially impairs its character or value on 
159.30  the market or in use.  A commercial unit may be a single 
159.31  article, as a machine, or a set of articles, as a suite of 
159.32  furniture or a line of machinery, or a quantity, as a gross or 
159.33  carload, or any other unit treated in use or in the relevant 
159.34  market as a single whole. 
159.35     (d) "Conforming" goods or performance under a lease 
159.36  contract means goods or performance that are in accordance with 
160.1   the obligations under the lease contract. 
160.2      (e) "Consumer lease" means a lease that a lessor regularly 
160.3   engaged in the business of leasing or selling makes to a lessee 
160.4   who is an individual and who takes under the lease primarily for 
160.5   a personal, family, or household purpose, if the total payments 
160.6   to be made under the lease contract, excluding payments for 
160.7   options to renew or buy, do not exceed $25,000. 
160.8      (f) "Fault" means wrongful act, omission, breach, or 
160.9   default. 
160.10     (g) "Finance lease" means a lease in which 
160.11     (1) the lessor does not select, manufacture, or supply the 
160.12  goods, 
160.13     (2) the lessor acquires the goods or the right to 
160.14  possession and use of the goods in connection with the lease, 
160.15  and 
160.16     (3) either 
160.17     (i) the lessee receives a copy of the contract evidencing 
160.18  the lessor's purchase of the goods or a disclaimer statement on 
160.19  or before signing the lease contract, or 
160.20     (ii) the lessee's approval of the contract evidencing the 
160.21  lessor's purchase of the goods or a disclaimer statement is a 
160.22  condition to effectiveness of the lease contract.  
160.23     "Disclaimer statement" means a written statement that is 
160.24  part of or separate from the lease contract that discloses all 
160.25  warranties and other rights provided to the lessee by the lessor 
160.26  and supplier in connection with the lease contract and informs 
160.27  the lessee in a conspicuous manner that there are no warranties 
160.28  or other rights provided to the lessee by the lessor and 
160.29  supplier other than those disclosed in the statement. 
160.30     (h) "Goods" means all things that are movable at the time 
160.31  of identification to the lease contract, or are fixtures 
160.32  (section 336.2A-309), but the term does not include money, 
160.33  documents, instruments, accounts, chattel paper, general 
160.34  intangibles, or minerals or the like, including oil and gas, 
160.35  before extraction.  The term also includes the unborn young of 
160.36  animals. 
161.1      (i) "Installment lease contract" means a lease contract 
161.2   that authorizes or requires the delivery of goods in separate 
161.3   lots to be separately accepted, even though the lease contract 
161.4   contains a clause "each delivery is a separate lease" or its 
161.5   equivalent. 
161.6      (j) "Lease" means a transfer of the right to possession and 
161.7   use of goods for a term in return for consideration, but a sale, 
161.8   including a sale on approval or a sale or return, or retention 
161.9   or creation of a security interest is not a lease.  Unless the 
161.10  context clearly indicates otherwise, the term includes a 
161.11  sublease. 
161.12     (k) "Lease agreement" means the bargain, with respect to 
161.13  the lease, of the lessor and the lessee in fact as found in 
161.14  their language or by implication from other circumstances 
161.15  including course of dealing or usage of trade or course of 
161.16  performance as provided in this article.  Unless the context 
161.17  clearly indicates otherwise, the term includes a sublease 
161.18  agreement. 
161.19     (l) "Lease contract" means the total legal obligation that 
161.20  results from the lease agreement as affected by this article and 
161.21  any other applicable rules of law.  Unless the context clearly 
161.22  indicates otherwise, the term includes a sublease contract. 
161.23     (m) "Leasehold interest" means the interest of the lessor 
161.24  or the lessee under a lease contract. 
161.25     (n) "Lessee" means a person who acquires the right to 
161.26  possession and use of goods under a lease.  Unless the context 
161.27  clearly indicates otherwise, the term includes a sublessee. 
161.28     (o) "Lessee in ordinary course of business" means a person 
161.29  who in good faith and without knowledge that the lease is in 
161.30  violation of the ownership rights or security interest or 
161.31  leasehold interest of a third party in the goods leases in 
161.32  ordinary course from a person in the business of selling or 
161.33  leasing goods of that kind but does not include a pawnbroker.  
161.34  "Leasing" may be for cash or by exchange of other property or on 
161.35  secured or unsecured credit and includes receiving goods or 
161.36  documents of title under a preexisting lease contract but does 
162.1   not include a transfer in bulk or as security for or in total or 
162.2   partial satisfaction of a money debt. 
162.3      (p) "Lessor" means a person who transfers the right to 
162.4   possession and use of goods under a lease.  Unless the context 
162.5   clearly indicates otherwise, the term includes a sublessor. 
162.6      (q) "Lessor's residual interest" means the lessor's 
162.7   interest in the goods after expiration, termination, or 
162.8   cancellation of the lease contract. 
162.9      (r) "Lien" means a charge against or interest in goods to 
162.10  secure payment of a debt or performance of an obligation, but 
162.11  the term does not include a security interest. 
162.12     (s) "Lot" means a parcel or a single article that is the 
162.13  subject matter of a separate lease or delivery, whether or not 
162.14  it is sufficient to perform the lease contract. 
162.15     (t) "Merchant lessee" means a lessee that is a merchant 
162.16  with respect to goods of the kind subject to the lease. 
162.17     (u) "Present value" means the amount as of a date certain 
162.18  of one or more sums payable in the future, discounted to the 
162.19  date certain.  The discount is determined by the interest rate 
162.20  specified by the parties if the rate was not manifestly 
162.21  unreasonable at the time the transaction was entered into; 
162.22  otherwise, the discount is determined by a commercially 
162.23  reasonable rate that takes into account the facts and 
162.24  circumstances of each case at the time the transaction was 
162.25  entered into. 
162.26     (v) "Purchase" includes taking by sale, lease, mortgage, 
162.27  security interest, pledge, gift, or any other voluntary 
162.28  transaction creating an interest in goods. 
162.29     (w) "Sublease" means a lease of goods the right to 
162.30  possession and use of which was acquired by the lessor as a 
162.31  lessee under an existing lease. 
162.32     (x) "Supplier" means a person from whom a lessor buys or 
162.33  leases goods to be leased under a finance lease. 
162.34     (y) "Supply contract" means a contract under which a lessor 
162.35  buys or leases goods to be leased. 
162.36     (z) "Termination" occurs when either party pursuant to a 
163.1   power created by agreement or law puts an end to the lease 
163.2   contract otherwise than for default. 
163.3      (2) Other definitions applying to this article and the 
163.4   sections in which they appear are: 
163.5      "Accessions."  Section 336.2A-310(1). 
163.6      "Construction mortgage."  Section 336.2A-309(1)(d). 
163.7      "Encumbrance."  Section 336.2A-309(1)(e). 
163.8      "Fixtures."  Section 336.2A-309(1)(a). 
163.9      "Fixture filing."  Section 336.2A-309(1)(b). 
163.10     "Purchase money lease."  Section 336.2A-309(1)(c). 
163.11     (3) The following definitions in other articles apply to 
163.12  this article: 
163.13     "Account."  Section ~~336.9-106~~ 336.9-102(a)(2). 
163.14     "Between merchants."  Section 336.2-104(3). 
163.15     "Buyer."  Section 336.2-103(1)(a). 
163.16     "Chattel paper."  Section ~~336.9-105(1)(b)~~ 336.9-102(a)(11). 
163.17     "Consumer goods."  Section ~~336.9-109(1)~~ 336.9-102(a)(23). 
163.18     "Document."  Section ~~336.9-105(1)(f)~~ 336.9-102(a)(30). 
163.19     "Entrusting."  Section 336.2-403(3). 
163.20     "General ~~intangibles~~ intangible."  Section ~~336.9-106~~ 
163.21  336.9-102(a)(42). 
163.22     "Good faith."  Section 336.2-103(1)(b). 
163.23     "Instrument."  Section ~~336.9-105(1)(i)~~ 336.9-102(a)(47). 
163.24     "Merchant."  Section 336.2-104(1). 
163.25     "Mortgage."  Section ~~336.9-105(1)(j)~~ 336.9-102(a)(55). 
163.26     "Pursuant to commitment."  
163.27  Section ~~336.9-105(1)(k)~~ 336.9-102(a)(68). 
163.28     "Receipt."  Section 336.2-103(1)(c). 
163.29     "Sale."  Section 336.2-106(1). 
163.30     "Sale on approval."  Section 336.2-326. 
163.31     "Sale or return."  Section 336.2-326. 
163.32     "Seller."  Section 336.2-103(1)(d). 
163.33     (4) In addition, sections 336.1-101 to 336.1-109 contain 
163.34  general definitions and principles of construction and 
163.35  interpretation applicable throughout this article. 
163.36     Sec. 9.  Minnesota Statutes 1998, section 336.2A-303, is 
164.1   amended to read: 
164.2      336.2A-303 [ALIENABILITY OF PARTY'S INTEREST UNDER LEASE 
164.3   CONTRACT OR OF LESSOR'S RESIDUAL INTEREST IN GOODS; DELEGATION 
164.4   OF PERFORMANCE; TRANSFER OF RIGHTS.] 
164.5      (1) As used in this section, "creation of a security 
164.6   interest" includes the sale of a lease contract that is subject 
164.7   to article 9, secured transactions, by reason of section 
164.8   ~~336.9-102(1)(b)~~ 336.9-109(a)(3). 
164.9      (2) Except as provided in ~~subsections~~ subsection (3) 
164.10  and ~~(4)~~ section 336.9-407, a provision in a lease agreement that 
164.11  (i) prohibits the voluntary or involuntary transfer, including a 
164.12  transfer by sale, sublease, creation or enforcement of a 
164.13  security interest, or attachment, levy, or other judicial 
164.14  process, of an interest of a party under the lease contract or 
164.15  of the lessor's residual interest in the goods, or (ii) makes 
164.16  the transfer an event of default, gives rise to the rights and 
164.17  remedies provided in subsection ~~(5)~~ (4), but a transfer that is 
164.18  prohibited or is an event of default under the lease agreement 
164.19  is otherwise effective. 
164.20     (3) ~~A provision in a lease agreement that (i) prohibits the~~ 
164.21  ~~creation or enforcement of a security interest in an interest of~~ 
164.22  ~~a party under the lease contract or in the lessor's residual~~ 
164.23  ~~interest in the goods, or (ii) makes the transfer an event of~~ 
164.24  ~~default, is not enforceable unless, and then only to the extent~~ 
164.25  ~~that, there is an actual transfer by the lessee of the lessee's~~ 
164.26  ~~right of possession or use of the goods in violation of the~~ 
164.27  ~~provision or an actual delegation of a material performance of~~ 
164.28  ~~either party to the lease contract in violation of the~~ 
164.29  ~~provision.  Neither the granting nor the enforcement of a~~ 
164.30  ~~security interest in (i) the lessor's interest under the lease~~ 
164.31  ~~contract or (ii) the lessor's residual interest in the goods is~~ 
164.32  ~~a transfer that materially impairs the prospect of obtaining~~ 
164.33  ~~return performance by, materially changes the duty of, or~~ 
164.34  ~~materially increases the burden or risk imposed on, the lessee~~ 
164.35  ~~within the purview of subsection (5) unless, and then only to~~ 
164.36  ~~the extent that, there is an actual delegation of a material~~ 
165.1   ~~performance of the lessor.~~ 
165.2      ~~(4)~~ A provision in a lease agreement that (i) prohibits a 
165.3   transfer of a right to damages for default with respect to the 
165.4   whole lease contract or of a right to payment arising out of the 
165.5   transferor's due performance of the transferor's entire 
165.6   obligation, or (ii) makes the transfer an event of default, is 
165.7   not enforceable, and the transfer is not a transfer that 
165.8   materially impairs the prospect of obtaining return performance 
165.9   by, materially changes the duty of, or materially increases the 
165.10  burden or risk imposed on, the other party to the lease contract 
165.11  within the purview of subsection ~~(5)~~ (4). 
165.12     ~~(5)~~ (4) Subject to ~~subsections~~ subsection (3) 
165.13  and ~~(4)~~ section 336.9-407:  
165.14     (a) if a transfer is made that is made an event of default 
165.15  under a lease agreement, the party to the lease contract not 
165.16  making the transfer, unless that party waives the default or 
165.17  otherwise agrees, has the rights and remedies described in 
165.18  section 336.2A-501(2); 
165.19     (b) if paragraph (a) is not applicable and if a transfer is 
165.20  made that (i) is prohibited under a lease agreement or (ii) 
165.21  materially impairs the prospect of obtaining return performance 
165.22  by, materially changes the duty of, or materially increases the 
165.23  burden or risk imposed on, the other party to the lease 
165.24  contract, unless the party not making the transfer agrees at any 
165.25  time to the transfer in the lease contract or otherwise, then, 
165.26  except as limited by contract, (i) the transferor is liable to 
165.27  the party not making the transfer for damages caused by the 
165.28  transfer to the extent that the damages could not reasonably be 
165.29  prevented by the party not making the transfer and (ii) a court 
165.30  having jurisdiction may grant other appropriate relief, 
165.31  including cancellation of the lease contract or an injunction 
165.32  against the transfer. 
165.33     ~~(6)~~ (5) A transfer of "the lease" or of "all my rights 
165.34  under the lease," or a transfer in similar general terms, is a 
165.35  transfer of rights and, unless the language or the 
165.36  circumstances, as in a transfer for security, indicate the 
166.1   contrary, the transfer is a delegation of duties by the 
166.2   transferor to the transferee.  Acceptance by the transferee 
166.3   constitutes a promise by the transferee to perform those 
166.4   duties.  The promise is enforceable by either the transferor or 
166.5   the other party to the lease contract. 
166.6      ~~(7)~~ (6) Unless otherwise agreed by the lessor and the 
166.7   lessee, a delegation of performance does not relieve the 
166.8   transferor as against the other party of any duty to perform or 
166.9   of any liability for default. 
166.10     ~~(8)~~ (7) In a consumer lease, to prohibit the transfer of an 
166.11  interest of a party under the lease contract or to make a 
166.12  transfer an event of default, the language must be specific, by 
166.13  a writing, and conspicuous. 
166.14     Sec. 10.  Minnesota Statutes 1998, section 336.2A-307, is 
166.15  amended to read: 
166.16     336.2A-307 [PRIORITY OF LIENS ARISING BY ATTACHMENT OR LEVY 
166.17  ON, SECURITY INTERESTS IN, AND OTHER CLAIMS TO GOODS.] 
166.18     (1) Except as otherwise provided in section 336.2A-306, a 
166.19  creditor of a lessee takes subject to the lease contract. 
166.20     (2) Except as otherwise provided in ~~subsections~~ 
166.21  subsection (3) ~~and (4)~~ and in sections 336.2A-306 and 
166.22  336.2A-308, a creditor of a lessor takes subject to the lease 
166.23  contract unless~~:~~ 
166.24     ~~(a)~~ the creditor holds a lien that attached to the goods 
166.25  before the lease contract became enforceable~~;~~. 
166.26     ~~(b) the creditor holds a security interest in the goods and~~ 
166.27  ~~the lessee did not give value and receive delivery of the goods~~ 
166.28  ~~without knowledge of the security interest; or~~ 
166.29     ~~(c) the creditor holds a security interest in the goods~~ 
166.30  ~~which was perfected (section 336.9-303) before the lease~~ 
166.31  ~~contract became enforceable.~~ 
166.32     (3) Except as otherwise provided in sections 336.9-317, 
166.33  336.9-321, and 336.9-323, a lessee ~~in the ordinary course of~~ 
166.34  ~~business~~ takes ~~the~~ a leasehold interest ~~free of~~ subject to a 
166.35  security interest ~~in the goods created by the lessor even though~~ 
166.36  ~~the security interest is perfected (section 336.9-303) and the~~ 
167.1   ~~lessee knows of its existence~~ held by a creditor of the lessor. 
167.2      ~~(4) A lessee other than a lessee in the ordinary course of~~ 
167.3   ~~business takes the leasehold interest free of a security~~ 
167.4   ~~interest to the extent that it secures future advances made~~ 
167.5   ~~after the secured party acquires knowledge of the lease or more~~ 
167.6   ~~than 45 days after the lease contract becomes enforceable,~~ 
167.7   ~~whichever first occurs, unless the future advances are made~~ 
167.8   ~~pursuant to a commitment entered into without knowledge of the~~ 
167.9   ~~lease and before the expiration of the 45-day period.~~ 
167.10     Sec. 11.  Minnesota Statutes 1998, section 336.2A-309, is 
167.11  amended to read: 
167.12     336.2A-309 [LESSOR'S AND LESSEE'S RIGHTS WHEN GOODS BECOME 
167.13  FIXTURES.] 
167.14     (1) In this section: 
167.15     (a) goods are "fixtures" when they become so related to 
167.16  particular real estate that an interest in them arises under 
167.17  real estate law; 
167.18     (b) a "fixture filing" is the filing, in the office where a 
167.19  record of a mortgage on the real estate would be filed or 
167.20  recorded, of a financing statement covering goods that are or 
167.21  are to become fixtures and conforming to the requirements of 
167.22  section ~~336.9-402(5)~~ 336.9-502(a) and (b); 
167.23     (c) a lease is a "purchase money lease" unless the lessee 
167.24  has possession or use of the goods or the right to possession or 
167.25  use of the goods before the lease agreement is enforceable; 
167.26     (d) a mortgage is a "construction mortgage" to the extent 
167.27  it secures an obligation incurred for the construction of an 
167.28  improvement on land including the acquisition cost of the land, 
167.29  if the recorded writing so indicates; and 
167.30     (e) "encumbrance" includes real estate mortgages and other 
167.31  liens on real estate and all other rights in real estate that 
167.32  are not ownership interests. 
167.33     (2) Under this article a lease may be of goods that are 
167.34  fixtures or may continue in goods that become fixtures, but no 
167.35  lease exists under this article of ordinary building materials 
167.36  incorporated into an improvement on land. 
168.1      (3) This article does not prevent creation of a lease of 
168.2   fixtures pursuant to real estate law. 
168.3      (4) The perfected interest of a lessor of fixtures has 
168.4   priority over a conflicting interest of an encumbrancer or owner 
168.5   of the real estate if: 
168.6      (a) the lease is a purchase money lease, the conflicting 
168.7   interest of the encumbrancer or owner arises before the goods 
168.8   become fixtures, the interest of the lessor is perfected by a 
168.9   fixture filing before the goods become fixtures or within ten 
168.10  days after that, and the lessee has an interest of record in the 
168.11  real estate or is in possession of the real estate; or 
168.12     (b) the interest of the lessor is perfected by a fixture 
168.13  filing before the interest of the encumbrancer or owner is of 
168.14  record, the lessor's interest has priority over any conflicting 
168.15  interest of a predecessor in title of the encumbrancer or owner, 
168.16  and the lessee has an interest of record in the real estate or 
168.17  is in possession of the real estate. 
168.18     (5) The interest of a lessor of fixtures, whether or not 
168.19  perfected, has priority over the conflicting interest of an 
168.20  encumbrancer or owner of the real estate if: 
168.21     (a) the fixtures are readily removable factory or office 
168.22  machines, readily removable equipment that is not primarily used 
168.23  or leased for use in the operation of the real estate, or 
168.24  readily removable replacements of domestic appliances that are 
168.25  goods subject to a consumer lease, and before the goods become 
168.26  fixtures the lease contract is enforceable; or 
168.27     (b) the conflicting interest is a lien on the real estate 
168.28  obtained by legal or equitable proceedings after the lease 
168.29  contract is enforceable; or 
168.30     (c) the encumbrancer or owner has consented in writing to 
168.31  the lease or has disclaimed an interest in the goods as 
168.32  fixtures; or 
168.33     (d) the lessee has a right to remove the goods as against 
168.34  the encumbrancer or owner.  If the lessee's right to remove 
168.35  terminates, the priority of the interest of the lessor continues 
168.36  for a reasonable time. 
169.1      (6) Notwithstanding subsection (4)(a) but otherwise subject 
169.2   to subsections (4) and (5), the interest of a lessor of 
169.3   fixtures, including the lessor's residual interest, is 
169.4   subordinate to the conflicting interest of an encumbrancer of 
169.5   the real estate under a construction mortgage recorded before 
169.6   the goods become fixtures if the goods become fixtures before 
169.7   the completion of the construction.  To the extent given to 
169.8   refinance a construction mortgage, the conflicting interest of 
169.9   an encumbrancer of the real estate under a mortgage has this 
169.10  priority to the same extent as the encumbrancer of the real 
169.11  estate under the construction mortgage. 
169.12     (7) In cases not within the preceding subsections, priority 
169.13  between the interest of a lessor of fixtures, including the 
169.14  lessor's residual interest, and the conflicting interest of an 
169.15  encumbrancer or owner of the real estate who is not the lessee 
169.16  is determined by the priority rules governing conflicting 
169.17  interests in real estate. 
169.18     (8) If the interest of a lessor of fixtures, including the 
169.19  lessor's residual interest, has priority over all conflicting 
169.20  interests of all owners and encumbrancers of the real estate, 
169.21  the lessor or the lessee may (i) on default, expiration, 
169.22  termination, or cancellation of the lease agreement but subject 
169.23  to the lease agreement and this article, or (ii) if necessary to 
169.24  enforce the lessor's or lessee's other rights and remedies under 
169.25  this article; remove the goods from the real estate, free and 
169.26  clear of all conflicting interests of all owners and 
169.27  encumbrancers of the real estate, but the lessor or lessee must 
169.28  reimburse any encumbrancer or owner of the real estate who is 
169.29  not the lessee and who has not otherwise agreed for the cost of 
169.30  repair of any physical injury, but not for any diminution in 
169.31  value of the real estate caused by the absence of the goods 
169.32  removed or by any necessity of replacing them.  A person 
169.33  entitled to reimbursement may refuse permission to remove until 
169.34  the party seeking removal gives adequate security for the 
169.35  performance of this obligation. 
169.36     (9) Even though the lease agreement does not create a 
170.1   security interest, the interest of a lessor of fixtures, 
170.2   including the lessor's residual interest, is perfected by filing 
170.3   a financing statement as a fixture filing for leased goods that 
170.4   are or are to become fixtures in accordance with the relevant 
170.5   provisions of the Article on Secured Transactions (article 9). 
170.6      Sec. 12.  Minnesota Statutes 1998, section 336.4-210, is 
170.7   amended to read: 
170.8      336.4-210 [SECURITY INTEREST OF COLLECTING BANK IN ITEMS, 
170.9   ACCOMPANYING DOCUMENTS, AND PROCEEDS.] 
170.10     (a) A collecting bank has a security interest in an item 
170.11  and any accompanying documents or the proceeds of either: 
170.12     (1) in case of an item deposited in an account, to the 
170.13  extent to which credit given for the item has been withdrawn or 
170.14  applied; 
170.15     (2) in case of an item for which it has given credit 
170.16  available for withdrawal as of right, to the extent of the 
170.17  credit given, whether or not the credit is drawn upon or there 
170.18  is a right of chargeback; or 
170.19     (3) if it makes an advance on or against the item. 
170.20     (b) If credit given for several items received at one time 
170.21  or pursuant to a single agreement is withdrawn or applied in 
170.22  part, the security interest remains upon all the items, any 
170.23  accompanying documents or the proceeds of either.  For the 
170.24  purpose of this section, credits first given are first withdrawn.
170.25     (c) Receipt by a collecting bank of a final settlement for 
170.26  an item is a realization on its security interest in the item, 
170.27  accompanying documents, and proceeds.  So long as the bank does 
170.28  not receive final settlement for the item or give up possession 
170.29  of the item or accompanying documents for purposes other than 
170.30  collection, the security interest continues to that extent and 
170.31  is subject to article 9, but: 
170.32     (1) no security agreement is necessary to make the security 
170.33  interest enforceable (section 336.9-203~~(1)(a)~~(b)(3)(A)); 
170.34     (2) no filing is required to perfect the security interest; 
170.35  and 
170.36     (3) the security interest has priority over conflicting 
171.1   perfected security interests in the item, accompanying 
171.2   documents, or proceeds. 
171.3      Sec. 13.  [336.5-118] [SECURITY INTEREST OF ISSUER OR 
171.4   NOMINATED PERSON.] 
171.5      (a) An issuer or nominated person has a security interest 
171.6   in a document presented under a letter of credit to the extent 
171.7   that the issuer or nominated person honors or gives value for 
171.8   the presentation. 
171.9      (b) So long as and to the extent that an issuer or 
171.10  nominated person has not been reimbursed or has not otherwise 
171.11  recovered the value given with respect to a security interest in 
171.12  a document under subsection (a), the security interest continues 
171.13  and is subject to article 9, but: 
171.14     (1) a security agreement is not necessary to make the 
171.15  security interest enforceable under section 336.9-203(b)(3); 
171.16     (2) if the document is presented in a medium other than a 
171.17  written or other tangible medium, the security interest is 
171.18  perfected; and 
171.19     (3) if the document is presented in a written or other 
171.20  tangible medium and is not a certificated security, chattel 
171.21  paper, a document of title, an instrument, or a letter of 
171.22  credit, the security interest is perfected and has priority over 
171.23  a conflicting security interest in the document so long as the 
171.24  debtor does not have possession of the document. 
171.25     Sec. 14.  Minnesota Statutes 1998, section 336.7-503, is 
171.26  amended to read: 
171.27     336.7-503 [DOCUMENT OF TITLE TO GOODS DEFEATED IN CERTAIN 
171.28  CASES.] 
171.29     (1) A document of title confers no right in goods against a 
171.30  person who before issuance of the document had a legal interest 
171.31  or a perfected security interest in them and who neither 
171.32     (a) delivered or entrusted them or any document of title 
171.33  covering them to the bailor or the bailor's nominee with actual 
171.34  or apparent authority to ship, store or sell or with power to 
171.35  obtain delivery under this article (section 336.7-403) or with 
171.36  power of disposition under this chapter (sections 336.2-403 and 
172.1   ~~336.9-307~~ 336.9-320) or other statute or rule of law; nor 
172.2      (b) acquiesced in the procurement by the bailor or the 
172.3   bailor's nominee of any document of title.  
172.4      (2) Title to goods based upon an unaccepted delivery order 
172.5   is subject to the rights of anyone to whom a negotiable 
172.6   warehouse receipt or bill of lading covering the goods has been 
172.7   duly negotiated.  Such a title may be defeated under the next 
172.8   section to the same extent as the rights of the issuer or a 
172.9   transferee from the issuer.  
172.10     (3) Title to goods based upon a bill of lading issued to a 
172.11  freight forwarder is subject to the rights of anyone to whom a 
172.12  bill issued by the freight forwarder is duly negotiated; but 
172.13  delivery by the carrier in accordance with part 4 of this 
172.14  article pursuant to its own bill of lading discharges the 
172.15  carrier's obligation to deliver.  
172.16     Sec. 15.  Minnesota Statutes 1998, section 336.8-103, is 
172.17  amended to read: 
172.18     336.8-103 [RULES FOR DETERMINING WHETHER CERTAIN 
172.19  OBLIGATIONS AND INTERESTS ARE SECURITIES OR FINANCIAL ASSETS.] 
172.20     (a) A share or similar equity interest issued by a 
172.21  corporation, business trust, joint stock company, or similar 
172.22  entity is a security. 
172.23     (b) An "investment company security" is a security.  
172.24  "Investment company security" means a share or similar equity 
172.25  interest issued by an entity that is registered as an investment 
172.26  company under the federal investment company laws, an interest 
172.27  in a unit investment trust that is so registered, or a 
172.28  face-amount certificate issued by a face-amount certificate 
172.29  company that is so registered.  Investment company security does 
172.30  not include an insurance policy or endowment policy or annuity 
172.31  contract issued by an insurance company. 
172.32     (c) An interest in a partnership or limited liability 
172.33  company is a general intangible and is not a security or a 
172.34  financial asset, except as follows: 
172.35     (1) An interest in a partnership or limited liability 
172.36  company is a security and is not a general intangible if it is 
173.1   dealt in or traded on a securities exchange or in a securities 
173.2   market, its terms expressly provide that it is a security 
173.3   governed by this article, or it is an investment company 
173.4   security.  
173.5      (2) An interest in a partnership or limited liability 
173.6   company is a financial asset and is not a general intangible if 
173.7   it is held in a securities account. 
173.8      (d) A writing that is a security certificate is governed by 
173.9   this article and not by article 3, even though it also meets the 
173.10  requirements of that article.  However, a negotiable instrument 
173.11  governed by article 3 is a financial asset if it is held in a 
173.12  securities account. 
173.13     (e) An option or similar obligation issued by a clearing 
173.14  corporation to its participants is not a security, but is a 
173.15  financial asset. 
173.16     (f) A commodity contract, as defined in section ~~336.9-115~~ 
173.17  336.9-102(a)(15), is not a security or a financial asset. 
173.18     Sec. 16.  Minnesota Statutes 1998, section 336.8-106, is 
173.19  amended to read: 
173.20     336.8-106 [CONTROL.] 
173.21     (a) A purchaser has "control" of a certificated security in 
173.22  bearer form if the certificated security is delivered to the 
173.23  purchaser. 
173.24     (b) A purchaser has "control" of a certificated security in 
173.25  registered form if the certificated security is delivered to the 
173.26  purchaser, and: 
173.27     (1) the certificate is endorsed to the purchaser or in 
173.28  blank by an effective endorsement; or 
173.29     (2) the certificate is registered in the name of the 
173.30  purchaser, upon original issue or registration of transfer by 
173.31  the issuer. 
173.32     (c) A purchaser has "control" of an uncertificated security 
173.33  if: 
173.34     (1) the uncertificated security is delivered to the 
173.35  purchaser; or 
173.36     (2) the issuer has agreed that it will comply with 
174.1   instructions originated by the purchaser without further consent 
174.2   by the registered owner. 
174.3      (d) A purchaser has "control" of a security entitlement if: 
174.4      (1) the purchaser becomes the entitlement holder; ~~or~~ 
174.5      (2) the securities intermediary has agreed that it will 
174.6   comply with entitlement orders originated by the purchaser 
174.7   without further consent by the entitlement holder; or 
174.8      (3) another person has control of the security entitlement 
174.9   on behalf of the purchaser or, having previously acquired 
174.10  control of the security entitlement, acknowledges that it has 
174.11  control on behalf of the purchaser. 
174.12     (e) If an interest in a security entitlement is granted by 
174.13  the entitlement holder to the entitlement holder's own 
174.14  securities intermediary, the securities intermediary has control.
174.15     (f) A purchaser who has satisfied the requirements of 
174.16  subsection ~~(c)(2)~~ (c) or ~~(d)(2)~~ (d) has control, even if the 
174.17  registered owner in the case of subsection ~~(c)(2)~~ (c) or the 
174.18  entitlement holder in the case of subsection ~~(d)(2)~~ (d) retains 
174.19  the right to make substitutions for the uncertificated security 
174.20  or security entitlement, to originate instructions or 
174.21  entitlement orders to the issuer or securities intermediary, or 
174.22  otherwise to deal with the uncertificated security or security 
174.23  entitlement. 
174.24     (g) An issuer or a securities intermediary may not enter 
174.25  into an agreement of the kind described in subsection (c)(2) or 
174.26  (d)(2) without the consent of the registered owner or 
174.27  entitlement holder, but an issuer or a securities intermediary 
174.28  is not required to enter into such an agreement even though the 
174.29  registered owner or entitlement holder so directs.  An issuer or 
174.30  securities intermediary that has entered into such an agreement 
174.31  is not required to confirm the existence of the agreement to 
174.32  another party unless requested to do so by the registered owner 
174.33  or entitlement holder. 
174.34     Sec. 17.  Minnesota Statutes 1998, section 336.8-110, is 
174.35  amended to read: 
174.36     336.8-110 [APPLICABILITY; CHOICE OF LAW.] 
175.1      (a) The local law of the issuer's jurisdiction, as 
175.2   specified in subsection (d), governs: 
175.3      (1) the validity of a security; 
175.4      (2) the rights and duties of the issuer with respect to 
175.5   registration of transfer; 
175.6      (3) the effectiveness of registration of transfer by the 
175.7   issuer; 
175.8      (4) whether the issuer owes any duties to an adverse 
175.9   claimant to a security; and 
175.10     (5) whether an adverse claim can be asserted against a 
175.11  person to whom transfer of a certificated or uncertificated 
175.12  security is registered or a person who obtains control of an 
175.13  uncertificated security. 
175.14     (b) The local law of the securities intermediary's 
175.15  jurisdiction, as specified in subsection (e), governs: 
175.16     (1) acquisition of a security entitlement from the 
175.17  securities intermediary; 
175.18     (2) the rights and duties of the securities intermediary 
175.19  and entitlement holder arising out of a security entitlement; 
175.20     (3) whether the securities intermediary owes any duties to 
175.21  an adverse claimant to a security entitlement; and 
175.22     (4) whether an adverse claim can be asserted against a 
175.23  person who acquires a security entitlement from the securities 
175.24  intermediary or a person who purchases a security entitlement or 
175.25  interest therein from an entitlement holder. 
175.26     (c) The local law of the jurisdiction in which a security 
175.27  certificate is located at the time of delivery governs whether 
175.28  an adverse claim can be asserted against a person to whom the 
175.29  security certificate is delivered. 
175.30     (d) "Issuer's jurisdiction" means the jurisdiction under 
175.31  which the issuer of the security is organized or, if permitted 
175.32  by the law of that jurisdiction, the law of another jurisdiction 
175.33  specified by the issuer.  An issuer organized under the law of 
175.34  this state may specify the law of another jurisdiction as the 
175.35  law governing the matters specified in subsection (a)(2) through 
175.36  (5). 
176.1      (e) The following rules determine a "securities 
176.2   intermediary's jurisdiction" for purposes of this section: 
176.3      (1) If an agreement between the securities intermediary and 
176.4   its entitlement holder ~~specifies that it is governed by the law~~ 
176.5   ~~of~~ governing the securities account expressly provides that a 
176.6   particular jurisdiction is the securities intermediary's 
176.7   jurisdiction for purposes of this part, this article, or this 
176.8   act, that jurisdiction is the securities intermediary's 
176.9   jurisdiction. 
176.10     (2) If paragraph (1) does not apply and an agreement 
176.11  between the securities intermediary and its entitlement holder 
176.12  governing the securities account expressly provides that the 
176.13  agreement is governed by the law of a particular jurisdiction, 
176.14  that jurisdiction is the securities intermediary's jurisdiction. 
176.15     (3) If neither paragraph (1) nor (2) applies and an 
176.16  agreement between the securities intermediary and its 
176.17  entitlement holder ~~does not specify the~~ governing ~~law as~~ 
176.18  ~~provided in paragraph (1), but~~ the securities account expressly 
176.19  ~~specifies~~ provides that the securities account is maintained at 
176.20  an office in a particular jurisdiction, that jurisdiction is the 
176.21  securities intermediary's jurisdiction. 
176.22     ~~(3)~~ (4) If ~~an agreement between the securities intermediary~~ 
176.23  ~~and its entitlement holder does not specify a jurisdiction as~~ 
176.24  ~~provided in paragraph (1) or (2)~~ none of the preceding 
176.25  paragraphs apply, the securities intermediary's jurisdiction is 
176.26  the jurisdiction in which ~~is located~~ the office identified in an 
176.27  account statement as the office serving the entitlement holder's 
176.28  account is located. 
176.29     ~~(4)~~ (5) If ~~an agreement between the securities intermediary~~ 
176.30  ~~and its entitlement holder does not specify a jurisdiction as~~ 
176.31  ~~provided in paragraph (1) or (2) and an account statement does~~ 
176.32  ~~not identify an office serving the entitlement holder's account~~ 
176.33  ~~as provided in paragraph (3)~~ none of the preceding paragraphs 
176.34  apply, the securities intermediary's jurisdiction is the 
176.35  jurisdiction in which ~~is located~~ the chief executive office of 
176.36  the securities intermediary is located. 
177.1      (f) A securities intermediary's jurisdiction is not 
177.2   determined by the physical location of certificates representing 
177.3   financial assets, or by the jurisdiction in which is organized 
177.4   the issuer of the financial asset with respect to which an 
177.5   entitlement holder has a security entitlement, or by the 
177.6   location of facilities for data processing or other 
177.7   recordkeeping concerning the account. 
177.8      Sec. 18.  Minnesota Statutes 1998, section 336.8-301, is 
177.9   amended to read: 
177.10     336.8-301 [DELIVERY.] 
177.11     (a) Delivery of a certificated security to a purchaser 
177.12  occurs when: 
177.13     (1) the purchaser acquires possession of the security 
177.14  certificate; 
177.15     (2) another person, other than a securities intermediary, 
177.16  either acquires possession of the security certificate on behalf 
177.17  of the purchaser or, having previously acquired possession of 
177.18  the certificate, acknowledges that it holds for the purchaser; 
177.19  or 
177.20     (3) a securities intermediary acting on behalf of the 
177.21  purchaser acquires possession of the security certificate, only 
177.22  if the certificate is in registered form and ~~has been~~ is (i) 
177.23  registered in the name of the purchaser, (ii) payable to the 
177.24  order of the purchaser, or (iii) specially endorsed to the 
177.25  purchaser by an effective endorsement and has not been endorsed 
177.26  to the securities intermediary or in blank. 
177.27     (b) Delivery of an uncertificated security to a purchaser 
177.28  occurs when: 
177.29     (1) the issuer registers the purchaser as the registered 
177.30  owner, upon original issue or registration of transfer; or 
177.31     (2) another person, other than a securities intermediary, 
177.32  either becomes the registered owner of the uncertificated 
177.33  security on behalf of the purchaser or, having previously become 
177.34  the registered owner, acknowledges that it holds for the 
177.35  purchaser.  
177.36     Sec. 19.  Minnesota Statutes 1998, section 336.8-302, is 
178.1   amended to read: 
178.2      336.8-302 [RIGHTS OF PURCHASER.] 
178.3      (a) Except as otherwise provided in subsections (b) and 
178.4   (c), ~~upon delivery~~ a purchaser of a certificated or 
178.5   uncertificated security ~~to a purchaser, the purchaser~~ acquires 
178.6   all rights in the security that the transferor had or had power 
178.7   to transfer. 
178.8      (b) A purchaser of a limited interest acquires rights only 
178.9   to the extent of the interest purchased. 
178.10     (c) A purchaser of a certificated security who as a 
178.11  previous holder had notice of an adverse claim does not improve 
178.12  its position by taking from a protected purchaser. 
178.13     Sec. 20.  Minnesota Statutes 1998, section 336.8-510, is 
178.14  amended to read: 
178.15     336.8-510 [RIGHTS OF PURCHASER OF SECURITY ENTITLEMENT FROM 
178.16  ENTITLEMENT HOLDER.] 
178.17     (a) In a case not covered by the priority rules in article 
178.18  9 or the rules stated in subsection (c), an action based on an 
178.19  adverse claim to a financial asset or security entitlement, 
178.20  whether framed in conversion, replevin, constructive trust, 
178.21  equitable lien, or other theory, may not be asserted against a 
178.22  person who purchases a security entitlement, or an interest 
178.23  therein, from an entitlement holder if the purchaser gives 
178.24  value, does not have notice of the adverse claim, and obtains 
178.25  control.  
178.26     (b) If an adverse claim could not have been asserted 
178.27  against an entitlement holder under section 336.8-502, the 
178.28  adverse claim cannot be asserted against a person who purchases 
178.29  a security entitlement, or an interest therein, from the 
178.30  entitlement holder.  
178.31     (c) In a case not covered by the priority rules in article 
178.32  9, a purchaser for value of a security entitlement, or an 
178.33  interest therein, who obtains control has priority over a 
178.34  purchaser of a security entitlement, or an interest therein, who 
178.35  does not obtain control.  Except as otherwise provided in 
178.36  subsection (d), purchasers who have control rank ~~equally, except~~ 
179.1   ~~that a~~ according to priority in time of: 
179.2      (1) the purchaser's becoming the person for whom the 
179.3   securities account, in which the security entitlement is 
179.4   carried, is maintained, if the purchaser obtained control under 
179.5   section 336.8-106(d)(1); 
179.6      (2) the securities intermediary's agreement to comply with 
179.7   the purchaser's entitlement orders with respect to security 
179.8   entitlements carried or to be carried in the securities account 
179.9   in which the security entitlement is carried, if the purchaser 
179.10  obtained control under section 336.8-106(d)(2); or 
179.11     (3) if the purchaser obtained control through another 
179.12  person under section 336.8-106(d)(3), the time on which priority 
179.13  would be based under this subsection if the other person were 
179.14  the secured party. 
179.15     (d) A securities intermediary as purchaser has priority 
179.16  over a conflicting purchaser who has control, unless otherwise 
179.17  agreed by the securities intermediary.