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Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

                            CHAPTER 399-S.F.No. 1495 
                  An act relating to commerce; enacting revised article 
                  9 of the Uniform Commercial Code as adopted by the 
                  National Conference of Commissioners on Uniform State 
                  Laws; amending Minnesota Statutes 1998, sections 
                  336.1-105; 336.1-201; 336.2-103; 336.2-210; 336.2-326; 
                  336.2-502; 336.2-716; 336.2A-103; 336.2A-303; 
                  336.2A-307; 336.2A-309; 336.4-210; 336.7-503; 
                  336.8-103; 336.8-106; 336.8-110; 336.8-301; 336.8-302; 
                  and 336.8-510; proposing coding for new law in 
                  Minnesota Statutes, chapter 336; repealing Minnesota 
                  Statutes 1998, sections 336.9-101; 336.9-102; 
                  336.9-103; 336.9-104; 336.9-105; 336.9-106; 336.9-107; 
                  336.9-108; 336.9-109; 336.9-110; 336.9-112; 336.9-113; 
                  336.9-114; 336.9-115; 336.9-116; 336.9-201; 336.9-202; 
                  336.9-204; 336.9-205; 336.9-206; 336.9-207; 336.9-208; 
                  336.9-301; 336.9-302; 336.9-303; 336.9-304; 336.9-305; 
                  336.9-306; 336.9-307; 336.9-308; 336.9-309; 336.9-310; 
                  336.9-311; 336.9-312; 336.9-313; 336.9-314; 335.9-315; 
                  336.9-316; 336.9-317; 336.9-318; 336.9-403; 336.9-404; 
                  336.9-405; 336.9-406; 336.9-407; 336.9-408; 336.9-410; 
                  336.9-412; 336.9-413; 336.9-501; 336.9-502; 336.9-503; 
                  336.9-504; 336.9-505; 336.9-506; 336.9-507; and 
                  336.9-508; Minnesota Statutes 1999 Supplement, 
                  sections 336.9-203; 336.9-401; 336.9-402; and 
                  336.9-411. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE  1 
                               Revised Article 9 
                              SECURED TRANSACTIONS 
                                     Part 1 
                               GENERAL PROVISIONS 
                     SUBPART 1.  SHORT TITLE, DEFINITIONS, 
                              AND GENERAL CONCEPTS 
           Section 1.  [336.9-101] [SHORT TITLE.] 
           This article may be cited as Uniform Commercial Code - 
        Secured Transactions. 
           Sec. 2.  [336.9-102] [DEFINITIONS AND INDEX OF 
        DEFINITIONS.] 
           (a) [DEFINITIONS.] In this article: 
           (1) "Accession" means goods that are physically united with 
        other goods in such a manner that the identity of the original 
        goods is not lost. 
           (2) "Account," except as used in "account for," means a 
        right to payment of a monetary obligation, whether or not earned 
        by performance, (i) for property that has been or is to be sold, 
        leased, licensed, assigned, or otherwise disposed of, (ii) for 
        services rendered or to be rendered, (iii) for a policy of 
        insurance issued or to be issued, (iv) for a secondary 
        obligation incurred or to be incurred, (v) for energy provided 
        or to be provided, (vi) for the use or hire of a vessel under a 
        charter or other contract, (vii) arising out of the use of a 
        credit or charge card or information contained on or for use 
        with the card, or (viii) as winnings in a lottery or other game 
        of chance operated or sponsored by a state, governmental unit of 
        a state, or person licensed or authorized to operate the game by 
        a state or governmental unit of a state.  The term includes 
        health-care-insurance receivables.  The term does not include (i)
        rights to payment evidenced by chattel paper or an instrument, 
        (ii) commercial tort claims, (iii) deposit accounts, (iv) 
        investment property, (v) letter of credit rights or letters of 
        credit, or (vi) rights to payment for money or funds advanced or 
        sold, other than rights arising out of the use of a credit or 
        charge card or information contained on or for use with the card.
           (3) "Account debtor" means a person obligated on an 
        account, chattel paper, or general intangible.  The term does 
        not include persons obligated to pay a negotiable instrument, 
        even if the instrument constitutes part of chattel paper. 
           (4) "Accounting," except as used in "accounting for," means 
        a record: 
           (A) authenticated by a secured party; 
           (B) indicating the aggregate unpaid secured obligations as 
        of a date not more than 35 days earlier or 35 days later than 
        the date of the record; and 
           (C) identifying the components of the obligations in 
        reasonable detail. 
           (5) "Agricultural lien" means an interest, other than a 
        security interest, in farm products: 
           (A) which secures payment or performance of an obligation 
        for: 
           (i) goods or services furnished in connection with a 
        debtor's farming operation; or 
           (ii) rent on real property leased by a debtor in connection 
        with its farming operation; 
           (B) which is created by statute in favor of a person that: 
           (i) in the ordinary course of its business furnished goods 
        or services to a debtor in connection with a debtor's farming 
        operation; or 
           (ii) leased real property to a debtor in connection with 
        the debtor's farming operation; and 
           (C) whose effectiveness does not depend on the person's 
        possession of the personal property. 
           (6) "As-extracted collateral" means: 
           (A) oil, gas, or other minerals that are subject to a 
        security interest that: 
           (i) is created by a debtor having an interest in the 
        minerals before extraction; and 
           (ii) attaches to the minerals as extracted; or 
           (B) accounts arising out of the sale at the wellhead or 
        minehead of oil, gas, or other minerals in which the debtor had 
        an interest before extraction. 
           (7) "Authenticate" means: 
           (A) to sign; or 
           (B) to execute or otherwise adopt a symbol, or encrypt or 
        similarly process a record in whole or in part, with the present 
        intent of the authenticating person to identify the person and 
        adopt or accept a record. 
           (8) "Bank" means an organization that is engaged in the 
        business of banking.  The term includes savings banks, savings 
        and loan associations, credit unions, and trust companies. 
           (9) "Cash proceeds" means proceeds that are money, checks, 
        deposit accounts, or the like. 
           (10) "Certificate of title" means a certificate of title 
        with respect to which a statute provides for the security 
        interest in question to be indicated on the certificate as a 
        condition or result of the security interest's obtaining 
        priority over the rights of a lien creditor with respect to the 
        collateral. 
           (11) "Chattel paper" means a record or records that 
        evidence both a monetary obligation and a security interest in 
        specific goods, a security interest in specific goods and 
        software used in the goods, a security interest in specific 
        goods and license of software used in the goods, a lease of 
        specific goods, or a lease of specific goods and license of 
        software used in the goods.  In this paragraph, "monetary 
        obligation" means a monetary obligation secured by the goods or 
        owed under a lease of the goods and includes a monetary 
        obligation with respect to software used in the goods.  The term 
        does not include (i) charters or other contracts involving the 
        use or hire of a vessel or (ii) records that evidence a right to 
        payment arising out of the use of a credit or charge card or 
        information contained on or for use with the card.  If a 
        transaction is evidenced by records that include an instrument 
        or series of instruments, the group of records taken together 
        constitutes chattel paper. 
           (12) "Collateral" means the property subject to a security 
        interest or agricultural lien.  The term includes: 
           (A) proceeds to which a security interest attaches; 
           (B) accounts, chattel paper, payment intangibles, and 
        promissory notes that have been sold; and 
           (C) goods that are the subject of a consignment. 
           (13) "Commercial tort claim" means a claim arising in tort 
        with respect to which: 
           (A) the claimant is an organization; or 
           (B) the claimant is an individual and the claim: 
           (i) arose in the course of the claimant's business or 
        profession; and 
           (ii) does not include damages arising out of personal 
        injury to or the death of an individual. 
           (14) "Commodity account" means an account maintained by a 
        commodity intermediary in which a commodity contract is carried 
        for a commodity customer. 
           (15) "Commodity contract" means a commodity futures 
        contract, an option on a commodity futures contract, a commodity 
        option, or another contract if the contract or option is: 
           (A) traded on or subject to the rules of a board of trade 
        that has been designated as a contract market for such a 
        contract pursuant to federal commodities law; or 
           (B) traded on a foreign commodity board of trade, exchange, 
        or market, and is carried on the books of a commodity 
        intermediary for a commodity customer. 
           (16) "Commodity customer" means a person for which a 
        commodity intermediary carries a commodity contract on its books.
           (17) "Commodity intermediary" means a person that: 
           (A) is registered as a futures commission merchant under 
        federal commodities law; or 
           (B) in the ordinary course of its business provides 
        clearance or settlement services for a board of trade that has 
        been designated as a contract market pursuant to federal 
        commodities law. 
           (18) "Communicate" means: 
           (A) to send a written or other tangible record; 
           (B) to transmit a record by any means agreed upon by the 
        persons sending and receiving the record; or 
           (C) in the case of transmission of a record to or by a 
        filing office, to transmit a record by any means prescribed by 
        filing office rule. 
           (19) "Consignee" means a merchant to which goods are 
        delivered in a consignment. 
           (20) "Consignment" means a transaction, regardless of its 
        form, in which a person delivers goods to a merchant for the 
        purpose of sale and: 
           (A) the merchant: 
           (i) deals in goods of that kind under a name other than the 
        name of the person making delivery; 
           (ii) is not an auctioneer; and 
           (iii) is not generally known by its creditors to be 
        substantially engaged in selling the goods of others; 
           (B) with respect to each delivery, the aggregate value of 
        the goods is $1,000 or more at the time of delivery; 
           (C) the goods are not consumer goods immediately before 
        delivery; and 
           (D) the transaction does not create a security interest 
        that secures an obligation. 
           (21) "Consignor" means a person that delivers goods to a 
        consignee in a consignment. 
           (22) "Consumer debtor" means a debtor in a consumer 
        transaction. 
           (23) "Consumer goods" means goods that are used or bought 
        for use primarily for personal, family, or household purposes. 
           (24) "Consumer goods transaction" means a consumer 
        transaction in which: 
           (A) an individual incurs an obligation primarily for 
        personal, family, or household purposes; and 
           (B) a security interest in consumer goods secures the 
        obligation. 
           (25) "Consumer obligor" means an obligor who is an 
        individual and who incurred the obligation as part of a 
        transaction entered into primarily for personal, family, or 
        household purposes. 
           (26) "Consumer transaction" means a transaction in which (i)
        an individual incurs an obligation primarily for personal, 
        family, or household purposes, (ii) a security interest secures 
        the obligation, and (iii) the collateral is held or acquired 
        primarily for personal, family, or household purposes.  The term 
        includes consumer goods transactions. 
           (27) "Continuation statement" means an amendment of a 
        financing statement which: 
           (A) identifies, by its file number, the initial financing 
        statement to which it relates; and 
           (B) indicates that it is a continuation statement for, or 
        that it is filed to continue the effectiveness of, the 
        identified financing statement. 
           (28) "Debtor" means: 
           (A) a person having an interest, other than a security 
        interest or other lien, in the collateral, whether or not the 
        person is an obligor; 
           (B) a seller of accounts, chattel paper, payment 
        intangibles, or promissory notes; or 
           (C) a consignee. 
           (29) "Deposit account" means a demand, time, savings, 
        passbook, or similar account maintained with a bank.  The term 
        does not include investment property or accounts evidenced by an 
        instrument. 
           (30) "Document" means a document of title or a receipt of 
        the type described in section 336.7-201(2). 
           (31) "Electronic chattel paper" means chattel paper 
        evidenced by a record or records consisting of information 
        stored in an electronic medium. 
           (32) "Encumbrance" means a right, other than an ownership 
        interest, in real property.  The term includes mortgages and 
        other liens on real property. 
           (33) "Equipment" means goods other than inventory, farm 
        products, or consumer goods. 
           (34) "Farm products" means goods, other than standing 
        timber, with respect to which the debtor is engaged in a farming 
        operation and which are: 
           (A) crops grown, growing, or to be grown, including: 
           (i) crops produced on trees, vines, and bushes; and 
           (ii) aquatic goods produced in aquacultural operations; 
           (B) livestock, born or unborn, including aquatic goods 
        produced in aquacultural operations; 
           (C) supplies used or produced in a farming operation; or 
           (D) products of crops or livestock in their unmanufactured 
        states. 
           (35) "Farming operation" means raising, cultivating, 
        propagating, fattening, grazing, or any other farming, 
        livestock, or aquacultural operation. 
           (36) "File number" means the number assigned to an initial 
        financing statement pursuant to section 336.9-519(a). 
           (37) "Filing office" means an office designated in section 
        336.9-501 as the place to file a financing statement. 
           (38) "Filing office rule" means a rule adopted pursuant to 
        section 139. 
           (39) "Financing statement" means a record or records 
        composed of an initial financing statement and any filed record 
        relating to the initial financing statement. 
           (40) "Fixture filing" means the filing of a financing 
        statement covering goods that are or are to become fixtures and 
        satisfying section 336.9-502(a) and (b).  The term includes the 
        filing of a financing statement covering goods of a transmitting 
        utility which are or are to become fixtures. 
           (41) "Fixtures" means goods that have become so related to 
        particular real property that an interest in them arises under 
        real property law. 
           (42) "General intangible" means any personal property, 
        including things in action, other than accounts, chattel paper, 
        commercial tort claims, deposit accounts, documents, goods, 
        instruments, investment property, letter of credit rights, 
        letters of credit, money, and oil, gas, or other minerals before 
        extraction.  The term includes payment intangibles and software. 
           (43) "Good faith" means honesty in fact and the observance 
        of reasonable commercial standards of fair dealing. 
           (44) "Goods" means all things that are movable when a 
        security interest attaches.  The term includes (i) fixtures, 
        (ii) standing timber that is to be cut and removed under a 
        conveyance or contract for sale, (iii) the unborn young of 
        animals, (iv) crops grown, growing, or to be grown, even if the 
        crops are produced on trees, vines, or bushes, and (v) 
        manufactured homes.  The term also includes a computer program 
        embedded in goods and any supporting information provided in 
        connection with a transaction relating to the program if the 
        program is associated with the goods in such a manner that it 
        customarily is considered part of the goods, or by becoming the 
        owner of the goods, a person acquires a right to use the program 
        in connection with the goods.  The term does not include a 
        computer program embedded in goods that consist solely of the 
        medium in which the program is embedded.  The term also does not 
        include accounts, chattel paper, commercial tort claims, deposit 
        accounts, documents, general intangibles, instruments, 
        investment property, letter of credit rights, letters of credit, 
        money, or oil, gas, or other minerals before extraction. 
           (45) "Governmental unit" means a subdivision, agency, 
        department, county, parish, municipality, or other unit of the 
        government of the United States, a state, or a foreign country.  
        The term includes an organization having a separate corporate 
        existence if the organization is eligible to issue debt on which 
        interest is exempt from income taxation under the laws of the 
        United States. 
           (46) "Health-care-insurance receivable" means an interest 
        in or claim under a policy of insurance which is a right to 
        payment of a monetary obligation for health-care goods or 
        services provided. 
           (47) "Instrument" means a negotiable instrument or any 
        other writing that evidences a right to the payment of a 
        monetary obligation, is not itself a security agreement or 
        lease, and is of a type that in ordinary course of business is 
        transferred by delivery with any necessary endorsement or 
        assignment.  The term does not include (i) investment property, 
        (ii) letters of credit, or (iii) writings that evidence a right 
        to payment arising out of the use of a credit or charge card or 
        information contained on or for use with the card. 
           (48) "Inventory" means goods, other than farm products, 
        which: 
           (A) are leased by a person as lessor; 
           (B) are held by a person for sale or lease or to be 
        furnished under a contract of service; 
           (C) are furnished by a person under a contract of service; 
        or 
           (D) consist of raw materials, work in process, or materials 
        used or consumed in a business. 
           (49) "Investment property" means a security, whether 
        certificated or uncertificated, security entitlement, securities 
        account, commodity contract, or commodity account. 
           (50) "Jurisdiction of organization," with respect to a 
        registered organization, means the jurisdiction under whose law 
        the organization is organized. 
           (51) "Letter of credit right" means a right to payment or 
        performance under a letter of credit, whether or not the 
        beneficiary has demanded or is at the time entitled to demand 
        payment or performance.  The term does not include the right of 
        a beneficiary to demand payment or performance under a letter of 
        credit. 
           (52) "Lien creditor" means: 
           (A) a creditor that has acquired a lien on the property 
        involved by attachment, levy, or the like; 
           (B) an assignee for benefit of creditors from the time of 
        assignment; 
           (C) a trustee in bankruptcy from the date of the filing of 
        the petition; or 
           (D) a receiver in equity from the time of appointment. 
           (53) "Manufactured home" means a structure, transportable 
        in one or more sections, which, in the traveling mode, is eight 
        body feet or more in width or 40 body feet or more in length, 
        or, when erected on site, is 320 or more square feet, and which 
        is built on a permanent chassis and designed to be used as a 
        dwelling with or without a permanent foundation when connected 
        to the required utilities, and includes the plumbing, heating, 
        air-conditioning, and electrical systems contained therein.  The 
        term includes any structure that meets all of the requirements 
        of this paragraph except the size requirements and with respect 
        to which the manufacturer voluntarily files a certification 
        required by the United States Secretary of Housing and Urban 
        Development and complies with the standards established under 
        United States Code, title 42. 
           (54) "Manufactured home transaction" means a secured 
        transaction: 
           (A) that creates a purchase-money security interest in a 
        manufactured home, other than a manufactured home held as 
        inventory; or 
           (B) in which a manufactured home, other than a manufactured 
        home held as inventory, is the primary collateral. 
           (55) "Mortgage" means a consensual interest in real 
        property, including fixtures, which secures payment or 
        performance of an obligation. 
           (56) "New debtor" means a person that becomes bound as 
        debtor under section 336.9-203(d) by a security agreement 
        previously entered into by another person. 
           (57) "New value" means (i) money, (ii) money's worth in 
        property, services, or new credit, or (iii) release by a 
        transferee of an interest in property previously transferred to 
        the transferee.  The term does not include an obligation 
        substituted for another obligation. 
           (58) "Noncash proceeds" means proceeds other than cash 
        proceeds. 
           (59) "Obligor" means a person that, with respect to an 
        obligation secured by a security interest in or an agricultural 
        lien on the collateral, (i) owes payment or other performance of 
        the obligation, (ii) has provided property other than the 
        collateral to secure payment or other performance of the 
        obligation, or (iii) is otherwise accountable in whole or in 
        part for payment or other performance of the obligation.  The 
        term does not include issuers or nominated persons under a 
        letter of credit. 
           (60) "Original debtor", except as used in section 
        336.9-310(c), means a person that, as debtor, entered into a 
        security agreement to which a new debtor has become bound under 
        section 336.9-203(d). 
           (61) "Payment intangible" means a general intangible under 
        which the account debtor's principal obligation is a monetary 
        obligation. 
           (62) "Person related to," with respect to an individual, 
        means: 
           (A) the spouse of the individual; 
           (B) a brother, brother-in-law, sister, or sister-in-law of 
        the individual; 
           (C) an ancestor or lineal descendant of the individual or 
        the individual's spouse; or 
           (D) any other relative, by blood or marriage, of the 
        individual or the individual's spouse who shares the same home 
        with the individual. 
           (63) "Person related to," with respect to an organization, 
        means: 
           (A) a person directly or indirectly controlling, controlled 
        by, or under common control with the organization; 
           (B) an officer or director of, or a person performing 
        similar functions with respect to, the organization; 
           (C) an officer or director of, or a person performing 
        similar functions with respect to, a person described in 
        subparagraph (A); 
           (D) the spouse of an individual described in subparagraph 
        (A), (B), or (C); or 
           (E) an individual who is related by blood or marriage to an 
        individual described in subparagraph (A), (B), (C), or (D), and 
        shares the same home with the individual. 
           (64) "Proceeds", except as used in section 336.9-609(b), 
        means the following property: 
           (A) whatever is acquired upon the sale, lease, license, 
        exchange, or other disposition of collateral; 
           (B) whatever is collected on, or distributed on account of, 
        collateral; 
           (C) rights arising out of collateral; 
           (D) to the extent of the value of collateral, claims 
        arising out of the loss, nonconformity, or interference with the 
        use of, defects or infringement of rights in, or damage to, the 
        collateral; or 
           (E) to the extent of the value of collateral and to the 
        extent payable to the debtor or the secured party, insurance 
        payable by reason of the loss or nonconformity of, defects or 
        infringement of rights in, or damage to, the collateral. 
           (65) "Promissory note" means an instrument that evidences a 
        promise to pay a monetary obligation, does not evidence an order 
        to pay, and does not contain an acknowledgment by a bank that 
        the bank has received for deposit a sum of money or funds. 
           (66) "Proposal" means a record authenticated by a secured 
        party which includes the terms on which the secured party is 
        willing to accept collateral in full or partial satisfaction of 
        the obligation it secures pursuant to sections 336.9-620, 
        336.9-621, and 336.9-622. 
           (67) "Public-finance transaction" means a secured 
        transaction in connection with which: 
           (A) debt securities are issued; 
           (B) all or a portion of the securities issued have an 
        initial stated maturity of at least 20 years; and 
           (C) the debtor, obligor, secured party, account debtor or 
        other person obligated on collateral, assignor or assignee of a 
        secured obligation, or assignor or assignee of a security 
        interest is a state or a governmental unit of a state. 
           (68) "Pursuant to commitment," with respect to an advance 
        made or other value given by a secured party, means pursuant to 
        the secured party's obligation, whether or not a subsequent 
        event of default or other event not within the secured party's 
        control has relieved or may relieve the secured party from its 
        obligation. 
           (69) "Record," except as used in "for record," "of record," 
        "record or legal title," and "record owner," means information 
        that is inscribed on a tangible medium or which is stored in an 
        electronic or other medium and is retrievable in perceivable 
        form. 
           (70) "Registered organization" means an organization 
        organized solely under the law of a single state or the United 
        States and as to which the state or the United States must 
        maintain a public record showing the organization to have been 
        organized. 
           (71) "Secondary obligor" means an obligor to the extent 
        that: 
           (A) the obligor's obligation is secondary; or 
           (B) the obligor has a right of recourse with respect to an 
        obligation secured by collateral against the debtor, another 
        obligor, or property of either. 
           (72) "Secured party" means: 
           (A) a person in whose favor a security interest is created 
        or provided for under a security agreement, whether or not any 
        obligation to be secured is outstanding; 
           (B) a person that holds an agricultural lien; 
           (C) a consignor; 
           (D) a person to which accounts, chattel paper, payment 
        intangibles, or promissory notes have been sold; 
           (E) a trustee, indenture trustee, agent, collateral agent, 
        or other representative in whose favor a security interest or 
        agricultural lien is created or provided for; or 
           (F) a person that holds a security interest arising under 
        section 336.2-401, 336.2-505, 336.2-711(3), 336.2A-508(5), 
        336.4-210, or 336.5-118. 
           (73) "Security agreement" means an agreement that creates 
        or provides for a security interest. 
           (74) "Send," in connection with a record or notification, 
        means: 
           (A) to deposit in the mail, deliver for transmission, or 
        transmit by any other usual means of communication, with postage 
        or cost of transmission provided for, addressed to any address 
        reasonable under the circumstances; or 
           (B) to cause the record or notification to be received 
        within the time that it would have been received if properly 
        sent under subparagraph (A). 
           (75) "Software" means a computer program and any supporting 
        information provided in connection with a transaction relating 
        to the program.  The term does not include a computer program 
        that is included in the definition of goods. 
           (76) "State" means a state of the United States, the 
        District of Columbia, Puerto Rico, the United States Virgin 
        Islands, or any territory or insular possession subject to the 
        jurisdiction of the United States. 
           (77) "Supporting obligation" means a letter of credit right 
        or secondary obligation that supports the payment or performance 
        of an account, chattel paper, a document, a general intangible, 
        an instrument, or investment property. 
           (78) "Tangible chattel paper" means chattel paper evidenced 
        by a record or records consisting of information that is 
        inscribed on a tangible medium. 
           (79) "Termination statement" means an amendment of a 
        financing statement which: 
           (A) identifies, by its file number, the initial financing 
        statement to which it relates; and 
           (B) indicates either that it is a termination statement or 
        that the identified financing statement is no longer effective. 
           (80) "Transmitting utility" means a person primarily 
        engaged in the business of: 
           (A) operating a railroad, subway, street railway, or 
        trolley bus; 
           (B) transmitting communications electrically, 
        electromagnetically, or by light; 
           (C) transmitting goods by pipeline or sewer; or 
           (D) transmitting or producing and transmitting electricity, 
        steam, gas, or water. 
           (b) [DEFINITIONS IN OTHER ARTICLES.] The following 
        definitions in other articles apply to this article: 
             "Applicant"                    Section 336.5-102
             "Beneficiary"                  Section 336.5-102
             "Broker"                       Section 336.8-102
             "Certificated security"        Section 336.8-102
             "Check"                        Section 336.3-104
             "Clearing corporation"         Section 336.8-102
             "Contract for sale"            Section 336.2-106
             "Customer"                     Section 336.4-104
             "Entitlement holder"           Section 336.8-102
             "Financial asset"              Section 336.8-102
             "Holder in due course"         Section 336.3-302
             "Issuer" (with respect to a    
              letter of credit or
              letter of credit right)       Section 336.5-102
             "Issuer" (with respect to
              a security)                   Section 336.8-201
             "Lease"                        Section 336.2A-103
             "Lease agreement"              Section 336.2A-103
             "Lease contract"               Section 336.2A-103
             "Leasehold interest"           Section 336.2A-103
             "Lessee"                       Section 336.2A-103
             "Lessee in ordinary course
              of business"                  Section 336.2A-103
             "Lessor"                       Section 336.2A-103
             "Lessor's residual interest"   Section 336.2A-103
             "Letter of credit"             Section 336.5-102
             "Merchant"                     Section 336.2-104
             "Negotiable instrument"        Section 336.3-104
             "Nominated person"             Section 336.5-102
             "Note"                         Section 336.3-104
             "Proceeds of a letter of
              credit"                       Section 336.5-114
             "Prove"                        Section 336.3-103
             "Sale"                         Section 336.2-106
             "Securities account"           Section 336.8-501
             "Securities intermediary"      Section 336.8-102
             "Security"                     Section 336.8-102
             "Security certificate"         Section 336.8-102
             "Security entitlement"         Section 336.8-102
             "Uncertificated security"      Section 336.8-102
           (c) [ARTICLE 1 DEFINITIONS AND PRINCIPLES.] Article 1 
        contains general definitions and principles of construction and 
        interpretation applicable throughout this article. 
           Sec. 3.  [336.9-103] [PURCHASE-MONEY SECURITY INTEREST; 
        APPLICATION OF PAYMENTS; BURDEN OF ESTABLISHING.] 
           (a) [DEFINITIONS.] In this section: 
           (1) "purchase-money collateral" means goods or software 
        that secures a purchase-money obligation incurred with respect 
        to that collateral; and 
           (2) "purchase-money obligation" means an obligation of an 
        obligor incurred as all or part of the price of the collateral 
        or for value given to enable the debtor to acquire rights in or 
        the use of the collateral if the value is in fact so used. 
           (b) [PURCHASE-MONEY SECURITY INTEREST IN GOODS.] A security 
        interest in goods is a purchase-money security interest: 
           (1) to the extent that the goods are purchase-money 
        collateral with respect to that security interest; 
           (2) if the security interest is in inventory that is or was 
        purchase-money collateral, also to the extent that the security 
        interest secures a purchase-money obligation incurred with 
        respect to other inventory in which the secured party holds or 
        held a purchase-money security interest; and 
           (3) also to the extent that the security interest secures a 
        purchase-money obligation incurred with respect to software in 
        which the secured party holds or held a purchase-money security 
        interest. 
           (c) [PURCHASE-MONEY SECURITY INTEREST IN SOFTWARE.] A 
        security interest in software is a purchase-money security 
        interest to the extent that the security interest also secures a 
        purchase-money obligation incurred with respect to goods in 
        which the secured party holds or held a purchase-money security 
        interest if: 
           (1) the debtor acquired its interest in the software in an 
        integrated transaction in which it acquired an interest in the 
        goods; and 
           (2) the debtor acquired its interest in the software for 
        the principal purpose of using the software in the goods. 
           (d) [CONSIGNOR'S INVENTORY PURCHASE-MONEY SECURITY 
        INTEREST.] The security interest of a consignor in goods that 
        are the subject of a consignment is a purchase-money security 
        interest in inventory. 
           (e) [APPLICATION OF PAYMENT IN NONCONSUMER GOODS 
        TRANSACTION.] In a transaction other than a consumer goods 
        transaction, if the extent to which a security interest is a 
        purchase-money security interest depends on the application of a 
        payment to a particular obligation, the payment must be applied: 
           (1) in accordance with any reasonable method of application 
        to which the parties agree; 
           (2) in the absence of the parties' agreement to a 
        reasonable method, in accordance with any intention of the 
        obligor manifested at or before the time of payment; or 
           (3) in the absence of an agreement to a reasonable method 
        and a timely manifestation of the obligor's intention, in the 
        following order: 
           (A) to obligations that are not secured; and 
           (B) if more than one obligation is secured, to obligations 
        secured by purchase-money security interests in the order in 
        which those obligations were incurred. 
           (f) [NO LOSS OF STATUS OF PURCHASE-MONEY SECURITY INTEREST 
        IN NONCONSUMER GOODS TRANSACTION.] In a transaction other than a 
        consumer goods transaction, a purchase-money security interest 
        does not lose its status as such, even if: 
           (1) the purchase-money collateral also secures an 
        obligation that is not a purchase-money obligation; 
           (2) collateral that is not purchase-money collateral also 
        secures the purchase-money obligation; or 
           (3) the purchase-money obligation has been renewed, 
        refinanced, consolidated, or restructured. 
           (g) [BURDEN OF PROOF IN NONCONSUMER GOODS TRANSACTION.] In 
        a transaction other than a consumer goods transaction, a secured 
        party claiming a purchase-money security interest has the burden 
        of establishing the extent to which the security interest is a 
        purchase-money security interest. 
           (h) [NONCONSUMER GOODS TRANSACTION; NO INFERENCE.] The 
        limitation of the rules in subsections (e), (f), and (g) to 
        transactions other than consumer goods transactions is intended 
        to leave to the court the determination of the proper rules in 
        consumer goods transactions.  The court may not infer from that 
        limitation the nature of the proper rule in consumer goods 
        transactions and may continue to apply established approaches. 
           Sec. 4.  [336.9-104] [CONTROL OF DEPOSIT ACCOUNT.] 
           (a) [REQUIREMENTS FOR CONTROL.] A secured party has control 
        of a deposit account if: 
           (1) the secured party is the bank with which the deposit 
        account is maintained; 
           (2) the debtor, secured party, and bank have agreed in an 
        authenticated record that the bank will comply with instructions 
        originated by the secured party directing disposition of the 
        funds in the deposit account without further consent by the 
        debtor; or 
           (3) the secured party becomes the bank's customer with 
        respect to the deposit account. 
           (b) [DEBTOR'S RIGHT TO DIRECT DISPOSITION.] A secured party 
        that has satisfied subsection (a) has control, even if the 
        debtor retains the right to direct the disposition of funds from 
        the deposit account. 
           Sec. 5.  [336.9-105] [CONTROL OF ELECTRONIC CHATTEL PAPER.] 
           A secured party has control of electronic chattel paper if 
        the record or records comprising the chattel paper are created, 
        stored, and assigned in such a manner that: 
           (1) a single authoritative copy of the record or records 
        exists which is unique, identifiable, and, except as otherwise 
        provided in paragraphs (4), (5), and (6), unalterable; 
           (2) the authoritative copy identifies the secured party as 
        the assignee of the record or records; 
           (3) the authoritative copy is communicated to and 
        maintained by the secured party or its designated custodian; 
           (4) copies or revisions that add or change an identified 
        assignee of the authoritative copy can be made only with the 
        participation of the secured party; 
           (5) each copy of the authoritative copy and any copy of a 
        copy is readily identifiable as a copy that is not the 
        authoritative copy; and 
           (6) any revision of the authoritative copy is readily 
        identifiable as an authorized or unauthorized revision. 
           Sec. 6.  [336.9-106] [CONTROL OF INVESTMENT PROPERTY.] 
           (a) [CONTROL UNDER SECTION 336.8-106.] A person has control 
        of a certificated security, uncertificated security, or security 
        entitlement as provided in section 336.8-106. 
           (b) [CONTROL OF COMMODITY CONTRACT.] A secured party has 
        control of a commodity contract if: 
           (1) the secured party is the commodity intermediary with 
        which the commodity contract is carried; or 
           (2) the commodity customer, secured party, and commodity 
        intermediary have agreed that the commodity intermediary will 
        apply any value distributed on account of the commodity contract 
        as directed by the secured party without further consent by the 
        commodity customer. 
           (c) [EFFECT OF CONTROL OF SECURITIES ACCOUNT OR COMMODITY 
        ACCOUNT.] A secured party having control of all security 
        entitlements or commodity contracts carried in a securities 
        account or commodity account has control over the securities 
        account or commodity account. 
           Sec. 7.  [336.9-107] [CONTROL OF LETTER OF CREDIT RIGHT.] 
           A secured party has control of a letter of credit right to 
        the extent of any right to payment or performance by the issuer 
        or any nominated person if the issuer or nominated person has 
        consented to an assignment of proceeds of the letter of credit 
        under section 336.5-114(c) or otherwise applicable law or 
        practice. 
           Sec. 8.  [336.9-108] [SUFFICIENCY OF DESCRIPTION.] 
           (a) [SUFFICIENCY OF DESCRIPTION.] Except as otherwise 
        provided in subsections (c), (d), and (e), a description of 
        personal or real property is sufficient, whether or not it is 
        specific, if it reasonably identifies what is described. 
           (b) [EXAMPLES OF REASONABLE IDENTIFICATION.] Except as 
        otherwise provided in subsection (d), a description of 
        collateral reasonably identifies the collateral if it identifies 
        the collateral by: 
           (1) specific listing; 
           (2) category; 
           (3) except as otherwise provided in subsection (e), a type 
        of collateral defined in the Uniform Commercial Code; 
           (4) quantity; 
           (5) computational or allocational formula or procedure; or 
           (6) except as otherwise provided in subsection (c), any 
        other method, if the identity of the collateral is objectively 
        determinable. 
           (c) [SUPERGENERIC DESCRIPTION NOT SUFFICIENT.] A 
        description of collateral as "all the debtor's assets" or "all 
        the debtor's personal property" or using words of similar import 
        does not reasonably identify the collateral. 
           (d) [INVESTMENT PROPERTY.] Except as otherwise provided in 
        subsection (e), a description of a security entitlement, 
        securities account, or commodity account is sufficient if it 
        describes: 
           (1) the collateral by those terms or as investment 
        property; or 
           (2) the underlying financial asset or commodity contract. 
           (e) [WHEN DESCRIPTION BY TYPE INSUFFICIENT.] A description 
        only by type of collateral defined in the Uniform Commercial 
        Code is an insufficient description of: 
           (1) a commercial tort claim; or 
           (2) in a consumer transaction, consumer goods, a security 
        entitlement, a securities account, or a commodity account. 
                      SUBPART 2.  APPLICABILITY OF ARTICLE 
           Sec. 9.  [336.9-109] [SCOPE.] 
           (a) [GENERAL SCOPE OF ARTICLE.] Except as otherwise 
        provided in subsections (c) and (d), this article applies to: 
           (1) a transaction, regardless of its form, that creates a 
        security interest in personal property or fixtures by contract; 
           (2) an agricultural lien; 
           (3) a sale of accounts, chattel paper, payment intangibles, 
        or promissory notes; 
           (4) a consignment; 
           (5) a security interest arising under section 336.2-401, 
        336.2-505, 336.2-711(3), or 336.2A-508(5), as provided in 
        section 336.9-110; and 
           (6) a security interest arising under section 336.4-210 or 
        336.5-118. 
           (b) [SECURITY INTEREST IN SECURED OBLIGATION.] The 
        application of this article to a security interest in a secured 
        obligation is not affected by the fact that the obligation is 
        itself secured by a transaction or interest to which this 
        article does not apply. 
           (c) [EXTENT TO WHICH ARTICLE DOES NOT APPLY.] This article 
        does not apply to the extent that: 
           (1) a statute, regulation, or treaty of the United States 
        preempts this article; 
           (2) another statute of this state expressly governs the 
        creation, perfection, priority, or enforcement of a security 
        interest created by this state or a governmental unit of this 
        state; 
           (3) a statute of another state, a foreign country, or a 
        governmental unit of another state or a foreign country, other 
        than a statute generally applicable to security interests, 
        expressly governs creation, perfection, priority, or enforcement 
        of a security interest created by the state, country, or 
        governmental unit; or 
           (4) the rights of a transferee beneficiary or nominated 
        person under a letter of credit are independent and superior 
        under section 336.5-114. 
           (d) [INAPPLICABILITY OF ARTICLE.] This article does not 
        apply to: 
           (1) a landlord's lien, other than an agricultural lien; 
           (2) a lien, other than an agricultural lien, given by 
        statute or other rule of law for services or materials, but 
        section 336.9-333 applies with respect to priority of the lien; 
           (3) an assignment of a claim for wages, salary, or other 
        compensation of an employee; 
           (4) a sale of accounts, chattel paper, payment intangibles, 
        or promissory notes as part of a sale of the business out of 
        which they arose; 
           (5) an assignment of accounts, chattel paper, payment 
        intangibles, or promissory notes which is for the purpose of 
        collection only; 
           (6) an assignment of a right-to-payment under a contract to 
        an assignee that is also obligated to perform under the 
        contract; 
           (7) an assignment of a single account, payment intangible, 
        or promissory note to an assignee in full or partial 
        satisfaction of a preexisting indebtedness; 
           (8) a transfer of an interest in or an assignment of a 
        claim under a policy of insurance, other than an assignment by 
        or to a health-care provider of a health-care-insurance 
        receivable and any subsequent assignment of the 
        right-to-payment, but sections 336.9-315 and 336.9-322 apply 
        with respect to proceeds and priorities in proceeds; 
           (9) an assignment of a right represented by a judgment, 
        other than a judgment taken on a right-to-payment that was 
        collateral; 
           (10) a right of recoupment or set-off, but: 
           (A) section 336.9-340 applies with respect to the 
        effectiveness of rights of recoupment or set-off against deposit 
        accounts; and 
           (B) section 336.9-404 applies with respect to defenses or 
        claims of an account debtor; 
           (11) the creation or transfer of an interest in or lien on 
        real property, including a lease or rents thereunder, except to 
        the extent that provision is made for: 
           (A) liens on real property in sections 336.9-203 and 
        336.9-308; 
           (B) fixtures in section 336.9-334; 
           (C) fixture filings in sections 336.9-501, 336.9-502, 
        336.9-512, 336.9-516, and 336.9-519; and 
           (D) security agreements covering personal and real property 
        in section 336.9-604; 
           (12) an assignment of a claim arising in tort, other than a 
        commercial tort claim, but sections 336.9-315 and 336.9-322 
        apply with respect to proceeds and priorities in proceeds; 
           (13) an assignment of a deposit account in a consumer 
        transaction, but sections 336.9-315 and 336.9-322 apply with 
        respect to proceeds and priorities in proceeds; 
           (14) a claim or right to receive compensation for injuries 
        or sickness as described in United States Code, title 26, 
        section 104(a)(1) or (2), as amended from time to time; or 
           (15) a claim or right to receive benefits under a special 
        needs trust as described in United States Code, title 42, 
        section 1396p(d)(4), as amended from time to time. 
           Sec. 10.  [336.9-110] [SECURITY INTERESTS ARISING UNDER 
        ARTICLE 2 OR 2A.] 
           A security interest arising under section 336.2-401, 
        336.2-505, 336.2-711(3), or 336.2A-508(5) is subject to this 
        article.  However, until the debtor obtains possession of the 
        goods: 
           (1) the security interest is enforceable, even if section 
        336.9-203(b)(3) has not been satisfied; 
           (2) filing is not required to perfect the security 
        interest; 
           (3) the rights of the secured party after default by the 
        debtor are governed by article 2 or 2A; and 
           (4) the security interest has priority over a conflicting 
        security interest created by the debtor. 
                                     Part 2 
                      EFFECTIVENESS OF SECURITY AGREEMENT; 
                        ATTACHMENT OF SECURITY INTEREST; 
                    RIGHTS OF PARTIES TO SECURITY AGREEMENT 
                    SUBPART 1.  EFFECTIVENESS AND ATTACHMENT 
           Sec. 11.  [336.9-201] [GENERAL EFFECTIVENESS OF SECURITY 
        AGREEMENT.] 
           (a) [GENERAL EFFECTIVENESS.] Except as otherwise provided 
        in the Uniform Commercial Code, a security agreement is 
        effective according to its terms between the parties, against 
        purchasers of the collateral, and against creditors. 
           (b) [APPLICABLE CONSUMER LAWS AND OTHER LAW.] A transaction 
        subject to this article is subject to any applicable rule of law 
        which establishes a different rule for consumers and (i) any 
        other statute or regulation that regulates the rates, charges, 
        agreements, and practices for loans, credit sales, or other 
        extensions of credit and (ii) any consumer protection statute or 
        rule. 
           (c) [OTHER APPLICABLE LAW CONTROLS.] In case of conflict 
        between this article and a rule of law, statute, or regulation 
        described in subsection (b), the rule of law, statute, or 
        regulation controls.  Failure to comply with a statute or 
        regulation described in subsection (b) has only the effect the 
        statute or regulation specifies. 
           (d) [FURTHER DEFERENCE TO OTHER APPLICABLE LAW.] This 
        article does not: 
           (1) validate any rate, charge, agreement, or practice that 
        violates a rule of law, statute, or regulation described in 
        subsection (b); or 
           (2) extend the application of the rule of law, statute, or 
        regulation to a transaction not otherwise subject to it. 
           Sec. 12.  [336.9-202] [TITLE TO COLLATERAL IMMATERIAL.] 
           Except as otherwise provided with respect to consignments 
        or sales of accounts, chattel paper, payment intangibles, or 
        promissory notes, the provisions of this article with regard to 
        rights and obligations apply whether title to collateral is in 
        the secured party or the debtor. 
           Sec. 13.  [336.9-203] [ATTACHMENT AND ENFORCEABILITY OF 
        SECURITY INTEREST; PROCEEDS; SUPPORTING OBLIGATIONS; FORMAL 
        REQUISITES.] 
           (a) [ATTACHMENT.] A security interest attaches to 
        collateral when it becomes enforceable against the debtor with 
        respect to the collateral, unless an agreement expressly 
        postpones the time of attachment. 
           (b) [ENFORCEABILITY.] Except as otherwise provided in 
        subsections (c) through (i), a security interest is enforceable 
        against the debtor and third parties with respect to the 
        collateral only if: 
           (1) value has been given; 
           (2) the debtor has rights in the collateral or the power to 
        transfer rights in the collateral to a secured party; and 
           (3) one of the following conditions is met: 
           (A) the debtor has authenticated a security agreement that 
        provides a description of the collateral and, if the security 
        interest covers timber to be cut, a description of the land 
        concerned; 
           (B) the collateral is not a certificated security and is in 
        the possession of the secured party under section 336.9-313 
        pursuant to the debtor's security agreement; 
           (C) the collateral is a certificated security in registered 
        form and the security certificate has been delivered to the 
        secured party under section 336.8-301 pursuant to the debtor's 
        security agreement; or 
           (D) the collateral is deposit accounts, electronic chattel 
        paper, investment property, or letter of credit rights, and the 
        secured party has control under section 336.9-104, 336.9-105, 
        336.9-106, or 336.9-107 pursuant to the debtor's security 
        agreement. 
           (c) [OTHER UCC PROVISIONS.] Subsection (b) is subject to 
        section 336.4-210 on the security interest of a collecting bank, 
        section 336.5-118 on the security interest of a letter of credit 
        issuer or nominated person, section 336.9-110 on a security 
        interest arising under article 2 or 2A, and section 336.9-206 on 
        security interests in investment property. 
           (d) [WHEN PERSON BECOMES BOUND BY ANOTHER PERSON'S SECURITY 
        AGREEMENT.] A person becomes bound as debtor by a security 
        agreement entered into by another person if, by operation of law 
        other than this article or by contract: 
           (1) the security agreement becomes effective to create a 
        security interest in the person's property; or 
           (2) the person becomes generally obligated for the 
        obligations of the other person, including the obligation 
        secured under the security agreement, and acquires or succeeds 
        to all or substantially all of the assets of the other person. 
           (e) [EFFECT OF NEW DEBTOR BECOMING BOUND.] If a new debtor 
        becomes bound as debtor by a security agreement entered into by 
        another person: 
           (1) the agreement satisfies subsection (b)(3) with respect 
        to existing or after-acquired property of the new debtor to the 
        extent the property is described in the agreement; and 
           (2) another agreement is not necessary to make a security 
        interest in the property enforceable. 
           (f) [PROCEEDS AND SUPPORTING OBLIGATIONS.] The attachment 
        of a security interest in collateral gives the secured party the 
        rights to proceeds provided by section 336.9-315 and is also 
        attachment of a security interest in a supporting obligation for 
        the collateral. 
           (g) [LIEN SECURING RIGHT-TO-PAYMENT.] The attachment of a 
        security interest in a right-to-payment or performance secured 
        by a security interest or other lien on personal or real 
        property is also attachment of a security interest in the 
        security interest, mortgage, or other lien. 
           (h) [SECURITY ENTITLEMENT CARRIED IN SECURITIES 
        ACCOUNT.] The attachment of a security interest in a securities 
        account is also attachment of a security interest in the 
        security entitlements carried in the securities account. 
           (i) [COMMODITY CONTRACTS CARRIED IN COMMODITY ACCOUNT.] The 
        attachment of a security interest in a commodity account is also 
        attachment of a security interest in the commodity contracts 
        carried in the commodity account. 
           Sec. 14.  [336.9-204] [AFTER-ACQUIRED PROPERTY; FUTURE 
        ADVANCES.] 
           (a) [AFTER-ACQUIRED COLLATERAL.] Except as otherwise 
        provided in subsection (b), a security agreement may create or 
        provide for a security interest in after-acquired collateral. 
           (b) [WHEN AFTER-ACQUIRED PROPERTY CLAUSE NOT EFFECTIVE.] A 
        security interest does not attach under a term constituting an 
        after-acquired property clause to: 
           (1) consumer goods, other than an accession when given as 
        additional security, unless the debtor acquires rights in them 
        within ten days after the secured party gives value; or 
           (2) a commercial tort claim. 
           (c) [FUTURE ADVANCES AND OTHER VALUE.] A security agreement 
        may provide that collateral secures, or that accounts, chattel 
        paper, payment intangibles, or promissory notes are sold in 
        connection with future advances or other value, whether or not 
        the advances or value are given pursuant to commitment. 
           Sec. 15.  [336.9-205] [USE OR DISPOSITION OF COLLATERAL 
        PERMISSIBLE.] 
           (a) [WHEN SECURITY INTEREST NOT INVALID OR FRAUDULENT.] A 
        security interest is not invalid or fraudulent against creditors 
        solely because: 
           (1) the debtor has the right or ability to: 
           (A) use, commingle, or dispose of all or part of the 
        collateral, including returned or repossessed goods; 
           (B) collect, compromise, enforce, or otherwise deal with 
        collateral; 
           (C) accept the return of collateral or make repossessions; 
        or 
           (D) use, commingle, or dispose of proceeds; or 
           (2) the secured party fails to require the debtor to 
        account for proceeds or replace collateral. 
           (b) [REQUIREMENTS OF POSSESSION NOT RELAXED.] This section 
        does not relax the requirements of possession if attachment, 
        perfection, or enforcement of a security interest depends upon 
        possession of the collateral by the secured party. 
           Sec. 16.  [336.9-206] [SECURITY INTEREST ARISING IN 
        PURCHASE OR DELIVERY OF FINANCIAL ASSET.] 
           (a) [SECURITY INTEREST WHEN PERSON BUYS THROUGH SECURITIES 
        INTERMEDIARY.] A security interest in favor of a securities 
        intermediary attaches to a person's security entitlement if: 
           (1) the person buys a financial asset through the 
        securities intermediary in a transaction in which the person is 
        obligated to pay the purchase price to the securities 
        intermediary at the time of the purchase; and 
           (2) the securities intermediary credits the financial asset 
        to the buyer's securities account before the buyer pays the 
        securities intermediary. 
           (b) [SECURITY INTEREST SECURES OBLIGATION TO PAY FOR 
        FINANCIAL ASSET.] The security interest described in subsection 
        (a) secures the person's obligation to pay for the financial 
        asset. 
           (c) [SECURITY INTEREST IN PAYMENT AGAINST DELIVERY 
        TRANSACTION.] A security interest in favor of a person that 
        delivers a certificated security or other financial asset 
        represented by a writing attaches to the security or other 
        financial asset if: 
           (1) the security or other financial asset: 
           (A) in the ordinary course of business is transferred by 
        delivery with any necessary endorsement or assignment; and 
           (B) is delivered under an agreement between persons in the 
        business of dealing with such securities or financial assets; 
        and 
           (2) the agreement calls for delivery against payment. 
           (d) [SECURITY INTEREST SECURES OBLIGATION TO PAY FOR 
        DELIVERY.] The security interest described in subsection (c) 
        secures the obligation to make payment for the delivery. 
                         SUBPART 2.  RIGHTS AND DUTIES 
           Sec. 17.  [336.9-207] [RIGHTS AND DUTIES OF SECURED PARTY 
        HAVING POSSESSION OR CONTROL OF COLLATERAL.] 
           (a) [DUTY OF CARE WHEN SECURED PARTY IN POSSESSION.] Except 
        as otherwise provided in subsection (d), a secured party shall 
        use reasonable care in the custody and preservation of 
        collateral in the secured party's possession.  In the case of 
        chattel paper or an instrument, reasonable care includes taking 
        necessary steps to preserve rights against prior parties unless 
        otherwise agreed. 
           (b) [EXPENSES, RISKS, DUTIES, AND RIGHTS WHEN SECURED PARTY 
        IN POSSESSION.] Except as otherwise provided in subsection (d), 
        if a secured party has possession of collateral: 
           (1) reasonable expenses, including the cost of insurance 
        and payment of taxes or other charges incurred in the custody, 
        preservation, use, or operation of the collateral, are 
        chargeable to the debtor and are secured by the collateral; 
           (2) the risk of accidental loss or damage is on the debtor 
        to the extent of a deficiency in any effective insurance 
        coverage; 
           (3) the secured party shall keep the collateral 
        identifiable, but fungible collateral may be commingled; and 
           (4) the secured party may use or operate the collateral: 
           (A) for the purpose of preserving the collateral or its 
        value; 
           (B) as permitted by an order of a court having competent 
        jurisdiction; or 
           (C) except in the case of consumer goods, in the manner and 
        to the extent agreed by the debtor. 
           (c) [DUTIES AND RIGHTS WHEN SECURED PARTY IN POSSESSION OR 
        CONTROL.] Except as otherwise provided in subsection (d), a 
        secured party having possession of collateral or control of 
        collateral under section 336.9-104, 336.9-105, 336.9-106, or 
        336.9-107: 
           (1) may hold as additional security any proceeds, except 
        money or funds, received from the collateral; 
           (2) shall apply money or funds received from the collateral 
        to reduce the secured obligation, unless remitted to the debtor; 
        and 
           (3) may create a security interest in the collateral. 
           (d) [BUYER OF CERTAIN RIGHTS TO PAYMENT.] If the secured 
        party is a buyer of accounts, chattel paper, payment 
        intangibles, or promissory notes or a consignor: 
           (1) subsection (a) does not apply unless the secured party 
        is entitled under an agreement: 
           (A) to charge back uncollected collateral; or 
           (B) otherwise to full or limited recourse against the 
        debtor or a secondary obligor based on the nonpayment or other 
        default of an account debtor or other obligor on the collateral; 
        and 
           (2) subsections (b) and (c) do not apply. 
           Sec. 18.  [336.9-208] [ADDITIONAL DUTIES OF SECURED PARTY 
        HAVING CONTROL OF COLLATERAL.] 
           (a) [APPLICABILITY OF SECTION.] This section applies to 
        cases in which there is no outstanding secured obligation and 
        the secured party is not committed to make advances, incur 
        obligations, or otherwise give value. 
           (b) [DUTIES OF SECURED PARTY AFTER RECEIVING DEMAND FROM 
        DEBTOR.] Within ten days after receiving an authenticated demand 
        by the debtor: 
           (1) a secured party having control of a deposit account 
        under section 336.9-104(a)(2) shall send to the bank with which 
        the deposit account is maintained an authenticated statement 
        that releases the bank from any further obligation to comply 
        with instructions originated by the secured party; 
           (2) a secured party having control of a deposit account 
        under section 336.9-104(a)(3) shall: 
           (A) pay the debtor the balance on deposit in the deposit 
        account; or 
           (B) transfer the balance on deposit into a deposit account 
        in the debtor's name; 
           (3) a secured party, other than a buyer, having control of 
        electronic chattel paper under section 336.9-105 shall: 
           (A) communicate the authoritative copy of the electronic 
        chattel paper to the debtor or its designated custodian; 
           (B) if the debtor designates a custodian that is the 
        designated custodian with which the authoritative copy of the 
        electronic chattel paper is maintained for the secured party, 
        communicate to the custodian an authenticated record releasing 
        the designated custodian from any further obligation to comply 
        with instructions originated by the secured party and 
        instructing the custodian to comply with instructions originated 
        by the debtor; and 
           (C) take appropriate action to enable the debtor or its 
        designated custodian to make copies of or revisions to the 
        authoritative copy which add or change an identified assignee of 
        the authoritative copy without the consent of the secured party; 
           (4) a secured party having control of investment property 
        under section 336.8-106(d)(2) or 336.9-106(b) shall send to the 
        securities intermediary or commodity intermediary with which the 
        security entitlement or commodity contract is maintained an 
        authenticated record that releases the securities intermediary 
        or commodity intermediary from any further obligation to comply 
        with entitlement orders or directions originated by the secured 
        party; and 
           (5) a secured party having control of a letter of credit 
        right under section 336.9-107 shall send to each person having 
        an unfulfilled obligation to pay or deliver proceeds of the 
        letter of credit to the secured party an authenticated release 
        from any further obligation to pay or deliver proceeds of the 
        letter of credit to the secured party. 
           Sec. 19.  [336.9-209] [DUTIES OF SECURED PARTY IF ACCOUNT 
        DEBTOR HAS BEEN NOTIFIED OF ASSIGNMENT.] 
           (a) [APPLICABILITY OF SECTION.] Except as otherwise 
        provided in subsection (c), this section applies if: 
           (1) there is no outstanding secured obligation; and 
           (2) the secured party is not committed to make advances, 
        incur obligations, or otherwise give value. 
           (b) [DUTIES OF SECURED PARTY AFTER RECEIVING DEMAND FROM 
        DEBTOR.] Within ten days after receiving an authenticated demand 
        by the debtor, a secured party shall send to an account debtor 
        that has received notification of an assignment to the secured 
        party as assignee under section 336.9-406(a) an authenticated 
        record that releases the account debtor from any further 
        obligation to the secured party. 
           (c) [INAPPLICABILITY TO SALES.] This section does not apply 
        to an assignment constituting the sale of an account, chattel 
        paper, or payment intangible. 
           Sec. 20.  [336.9-210] [REQUEST FOR ACCOUNTING; REQUEST 
        REGARDING LIST OF COLLATERAL OR STATEMENT OF ACCOUNT.] 
           (a) [DEFINITIONS.] In this section: 
           (1) "Request" means a record of a type described in 
        paragraph (2), (3), or (4). 
           (2) "Request for an accounting" means a record 
        authenticated by a debtor requesting that the recipient provide 
        an accounting of the unpaid obligations secured by collateral 
        and reasonably identifying the transaction or relationship that 
        is the subject of the request. 
           (3) "Request regarding a list of collateral" means a record 
        authenticated by a debtor requesting that the recipient approve 
        or correct a list of what the debtor believes to be the 
        collateral securing an obligation and reasonably identifying the 
        transaction or relationship that is the subject of the request. 
           (4) "Request regarding a statement of account" means a 
        record authenticated by a debtor requesting that the recipient 
        approve or correct a statement indicating what the debtor 
        believes to be the aggregate amount of unpaid obligations 
        secured by collateral as of a specified date and reasonably 
        identifying the transaction or relationship that is the subject 
        of the request. 
           (b) [DUTY TO RESPOND TO REQUESTS.] Subject to subsections 
        (c), (d), (e), and (f), a secured party, other than a buyer of 
        accounts, chattel paper, payment intangibles, or promissory 
        notes or a consignor, shall comply with a request within 14 days 
        after receipt: 
           (1) in the case of a request for an accounting, by 
        authenticating and sending to the debtor an accounting; and 
           (2) in the case of a request regarding a list of collateral 
        or a request regarding a statement of account, by authenticating 
        and sending to the debtor an approval or correction. 
           (c) [REQUEST REGARDING LIST OF COLLATERAL; STATEMENT 
        CONCERNING TYPE OF COLLATERAL.] A secured party that claims a 
        security interest in all of a particular type of collateral 
        owned by the debtor may comply with a request regarding a list 
        of collateral by sending to the debtor an authenticated record 
        including a statement to that effect within 14 days after 
        receipt. 
           (d) [REQUEST REGARDING LIST OF COLLATERAL; NO INTEREST 
        CLAIMED.] A person that receives a request regarding a list of 
        collateral, claims no interest in the collateral when it 
        receives the request, and claimed an interest in the collateral 
        at an earlier time shall comply with the request within 14 days 
        after receipt by sending to the debtor an authenticated record: 
           (1) disclaiming any interest in the collateral; and 
           (2) if known to the recipient, providing the name and 
        mailing address of any assignee of or successor to the 
        recipient's interest in the collateral. 
           (e) [REQUEST FOR ACCOUNTING OR REGARDING STATEMENT OF 
        ACCOUNT; NO INTEREST IN OBLIGATION CLAIMED.] A person that 
        receives a request for an accounting or a request regarding a 
        statement of account, claims no interest in the obligations when 
        it receives the request, and claimed an interest in the 
        obligations at an earlier time shall comply with the request 
        within 14 days after receipt by sending to the debtor an 
        authenticated record: 
           (1) disclaiming any interest in the obligations; and 
           (2) if known to the recipient, providing the name and 
        mailing address of any assignee of or successor to the 
        recipient's interest in the obligations. 
           (f) [CHARGES FOR RESPONSES.] A debtor is entitled without 
        charge to one response to a request under this section during 
        any six-month period.  The secured party may require payment of 
        a charge not exceeding $25 for each additional response. 
                                     Part 3 
                            PERFECTION AND PRIORITY 
               SUBPART 1.  LAW GOVERNING PERFECTION AND PRIORITY 
           Sec. 21.  [336.9-301] [LAW GOVERNING PERFECTION AND 
        PRIORITY OF SECURITY INTERESTS.] 
           Except as otherwise provided in sections 336.9-303 through 
        336.9-306, the following rules determine the law governing 
        perfection, the effect of perfection or nonperfection, and the 
        priority of a security interest in collateral: 
           (1) Except as otherwise provided in this section, while a 
        debtor is located in a jurisdiction, the local law of that 
        jurisdiction governs perfection, the effect of perfection or 
        nonperfection, and the priority of a security interest in 
        collateral. 
           (2) While collateral is located in a jurisdiction, the 
        local law of that jurisdiction governs perfection, the effect of 
        perfection or nonperfection, and the priority of a possessory 
        security interest in that collateral. 
           (3) Except as otherwise provided in paragraph (4), while 
        negotiable documents, goods, instruments, money, or tangible 
        chattel paper is located in a jurisdiction, the local law of 
        that jurisdiction governs: 
           (A) perfection of a security interest in the goods by 
        filing a fixture filing; 
           (B) perfection of a security interest in timber to be cut; 
        and 
           (C) the effect of perfection or nonperfection and the 
        priority of a nonpossessory security interest in the collateral. 
           (4) The local law of the jurisdiction in which the wellhead 
        or minehead is located governs perfection, the effect of 
        perfection or nonperfection, and the priority of a security 
        interest in as-extracted collateral. 
           Sec. 22.  [336.9-302] [LAW GOVERNING PERFECTION AND 
        PRIORITY OF AGRICULTURAL LIENS.] 
           While farm products are located in a jurisdiction, the 
        local law of that jurisdiction governs perfection, the effect of 
        perfection or nonperfection, and the priority of an agricultural 
        lien on the farm products. 
           Sec. 23.  [336.9-303] [LAW GOVERNING PERFECTION AND 
        PRIORITY OF SECURITY INTERESTS IN GOODS COVERED BY A CERTIFICATE 
        OF TITLE.] 
           (a) [APPLICABILITY OF SECTION.] This section applies to 
        goods covered by a certificate of title, even if there is no 
        other relationship between the jurisdiction under whose 
        certificate of title the goods are covered and the goods or the 
        debtor. 
           (b) [WHEN GOODS COVERED BY CERTIFICATE OF TITLE.] Goods 
        become covered by a certificate of title when a valid 
        application for the certificate of title and the applicable fee 
        are delivered to the appropriate authority.  Goods cease to be 
        covered by a certificate of title at the earlier of the time the 
        certificate of title ceases to be effective under the law of the 
        issuing jurisdiction or the time the goods become covered 
        subsequently by a certificate of title issued by another 
        jurisdiction. 
           (c) [APPLICABLE LAW.] The local law of the jurisdiction 
        under whose certificate of title the goods are covered governs 
        perfection, the effect of perfection or nonperfection, and the 
        priority of a security interest in goods covered by a 
        certificate of title from the time the goods become covered by 
        the certificate of title until the goods cease to be covered by 
        the certificate of title. 
           Sec. 24.  [336.9-304] [LAW GOVERNING PERFECTION AND 
        PRIORITY OF SECURITY INTERESTS IN DEPOSIT ACCOUNTS.] 
           (a) [LAW OF BANK'S JURISDICTION GOVERNS.] The local law of 
        a bank's jurisdiction governs perfection, the effect of 
        perfection or nonperfection, and the priority of a security 
        interest in a deposit account maintained with that bank. 
           (b) [BANK'S JURISDICTION.] The following rules determine a 
        bank's jurisdiction for purposes of this part: 
           (1) If an agreement between the bank and the debtor 
        governing the deposit account expressly provides that a 
        particular jurisdiction is the bank's jurisdiction for purposes 
        of this part, this article, or this chapter, that jurisdiction 
        is the bank's jurisdiction. 
           (2) If paragraph (1) does not apply and an agreement 
        between the bank and its customer governing the deposit account 
        expressly provides that the agreement is governed by the law of 
        a particular jurisdiction, that jurisdiction is the bank's 
        jurisdiction. 
           (3) If neither paragraph (1) nor paragraph (2) applies and 
        an agreement between the bank and its customer governing the 
        deposit account expressly provides that the deposit account is 
        maintained at an office in a particular jurisdiction, that 
        jurisdiction is the bank's jurisdiction. 
           (4) If none of the preceding paragraphs applies, the bank's 
        jurisdiction is the jurisdiction in which the office identified 
        in an account statement as the office serving the customer's 
        account is located. 
           (5) If none of the preceding paragraphs applies, the bank's 
        jurisdiction is the jurisdiction in which the chief executive 
        office of the bank is located. 
           Sec. 25.  [336.9-305] [LAW GOVERNING PERFECTION AND 
        PRIORITY OF SECURITY INTERESTS IN INVESTMENT PROPERTY.] 
           (a) [GOVERNING LAW:  GENERAL RULES.] Except as otherwise 
        provided in subsection (c), the following rules apply: 
           (1) While a security certificate is located in a 
        jurisdiction, the local law of that jurisdiction governs 
        perfection, the effect of perfection or nonperfection, and the 
        priority of a security interest in the certificated security 
        represented thereby. 
           (2) The local law of the issuer's jurisdiction as specified 
        in section 336.8-110(d), governs perfection, the effect of 
        perfection or nonperfection, and the priority of a security 
        interest in an uncertificated security. 
           (3) The local law of the securities intermediary's 
        jurisdiction as specified in section 336.8-110(e), governs 
        perfection, the effect of perfection or nonperfection, and the 
        priority of a security interest in a security entitlement or 
        securities account. 
           (4) The local law of the commodity intermediary's 
        jurisdiction governs perfection, the effect of perfection or 
        nonperfection, and the priority of a security interest in a 
        commodity contract or commodity account. 
           (b) [COMMODITY INTERMEDIARY'S JURISDICTION.] The following 
        rules determine a commodity intermediary's jurisdiction for 
        purposes of this part: 
           (1) If an agreement between the commodity intermediary and 
        commodity customer governing the commodity account expressly 
        provides that a particular jurisdiction is the commodity 
        intermediary's jurisdiction for purposes of this part, this 
        article, or this chapter, that jurisdiction is the commodity 
        intermediary's jurisdiction. 
           (2) If paragraph (1) does not apply and an agreement 
        between the commodity intermediary and commodity customer 
        governing the commodity account expressly provides that the 
        agreement is governed by the law of a particular jurisdiction, 
        that jurisdiction is the commodity intermediary's jurisdiction. 
           (3) If neither paragraph (1) nor paragraph (2) applies and 
        an agreement between the commodity intermediary and commodity 
        customer governing the commodity account expressly provides that 
        the commodity account is maintained at an office in a particular 
        jurisdiction, that jurisdiction is the commodity intermediary's 
        jurisdiction. 
           (4) If none of the preceding paragraphs applies, the 
        commodity intermediary's jurisdiction is the jurisdiction in 
        which the office identified in an account statement as the 
        office serving the commodity customer's account is located. 
           (5) If none of the preceding paragraphs applies, the 
        commodity intermediary's jurisdiction is the jurisdiction in 
        which the chief executive office of the commodity intermediary 
        is located. 
           (c) [WHEN PERFECTION GOVERNED BY LAW OF JURISDICTION WHERE 
        DEBTOR LOCATED.] The local law of the jurisdiction in which the 
        debtor is located governs: 
           (1) perfection of a security interest in investment 
        property by filing; 
           (2) automatic perfection of a security interest in 
        investment property created by a broker or securities 
        intermediary; and 
           (3) automatic perfection of a security interest in a 
        commodity contract or commodity account created by a commodity 
        intermediary. 
           Sec. 26.  [336.9-306] [LAW GOVERNING PERFECTION AND 
        PRIORITY OF SECURITY INTERESTS IN LETTER OF CREDIT RIGHTS.] 
           (a) [GOVERNING LAW:  ISSUER'S OR NOMINATED PERSON'S 
        JURISDICTION.] Subject to subsection (c), the local law of the 
        issuer's jurisdiction or a nominated person's jurisdiction 
        governs perfection, the effect of perfection or nonperfection, 
        and the priority of a security interest in a letter of credit 
        right if the issuer's jurisdiction or nominated person's 
        jurisdiction is a state. 
           (b) [ISSUER'S OR NOMINATED PERSON'S JURISDICTION.] For 
        purposes of this part, an issuer's jurisdiction or nominated 
        person's jurisdiction is the jurisdiction whose law governs the 
        liability of the issuer or nominated person with respect to the 
        letter of credit right as provided in section 336.5-116. 
           (c) [WHEN SECTION NOT APPLICABLE.] This section does not 
        apply to a security interest that is perfected only under 
        section 336.9-308(d). 
           Sec. 27.  [336.9-307] [LOCATION OF DEBTOR.] 
           (a) [PLACE OF BUSINESS.] In this section, "place of 
        business" means a place where a debtor conducts its affairs. 
           (b) [DEBTOR'S LOCATION:  GENERAL RULES.] Except as 
        otherwise provided in this section, the following rules 
        determine a debtor's location: 
           (1) A debtor who is an individual is located at the 
        individual's principal residence. 
           (2) A debtor that is an organization and has only one place 
        of business is located at its place of business. 
           (3) A debtor that is an organization and has more than one 
        place of business is located at its chief executive office. 
           (c) [LIMITATION OF APPLICABILITY OF SUBSECTION 
        (B).] Subsection (b) applies only if a debtor's residence, place 
        of business, or chief executive office, as applicable, is 
        located in a jurisdiction whose law generally requires 
        information concerning the existence of a nonpossessory security 
        interest to be made generally available in a filing, recording, 
        or registration system as a condition or result of the security 
        interest's obtaining priority over the rights of a lien creditor 
        with respect to the collateral.  If subsection (b) does not 
        apply, the debtor is located in the District of Columbia. 
           (d) [CONTINUATION OF LOCATION:  CESSATION OF EXISTENCE, 
        ETC.] A person that ceases to exist, have a residence, or have a 
        place of business continues to be located in the jurisdiction 
        specified by subsections (b) and (c). 
           (e) [LOCATION OF REGISTERED ORGANIZATION ORGANIZED UNDER 
        STATE LAW.] A registered organization that is organized under 
        the law of a state is located in that state. 
           (f) [LOCATION OF REGISTERED ORGANIZATION ORGANIZED UNDER 
        FEDERAL LAW; BANK BRANCHES AND AGENCIES.] Except as otherwise 
        provided in subsection (i), a registered organization that is 
        organized under the law of the United States and a branch or 
        agency of a bank that is not organized under the law of the 
        United States or a state are located: 
           (1) in the state that the law of the United States 
        designates, if the law designates a state of location; 
           (2) in the state that the registered organization, branch, 
        or agency designates, if the law of the United States authorizes 
        the registered organization, branch, or agency to designate its 
        state of location; or 
           (3) in the District of Columbia, if neither paragraph (1) 
        nor paragraph (2) applies. 
           (g) [CONTINUATION OF LOCATION:  CHANGE IN STATUS OF 
        REGISTERED ORGANIZATION.] A registered organization continues to 
        be located in the jurisdiction specified by subsection (e) or 
        (f) notwithstanding: 
           (1) the suspension, revocation, forfeiture, or lapse of the 
        registered organization's status as such in its jurisdiction of 
        organization; or 
           (2) the dissolution, winding up, or cancellation of the 
        existence of the registered organization. 
           (h) [LOCATION OF UNITED STATES.] The United States is 
        located in the District of Columbia. 
           (i) [LOCATION OF FOREIGN BANK BRANCH OR AGENCY IF LICENSED 
        IN ONLY ONE STATE.] A branch or agency of a bank that is not 
        organized under the law of the United States or a state is 
        located in the state in which the branch or agency is licensed, 
        if all branches and agencies of the bank are licensed in only 
        one state. 
           (j) [LOCATION OF FOREIGN AIR CARRIER.] A foreign air 
        carrier under the Federal Aviation Act of 1958, as amended, is 
        located at the designated office of the agent upon which service 
        of process may be made on behalf of the carrier. 
           (k) [SECTION APPLIES ONLY TO THIS PART.] This section 
        applies only for purposes of this part. 
                             SUBPART 2.  PERFECTION 
           Sec. 28.  [336.9-308] [WHEN SECURITY INTEREST OR 
        AGRICULTURAL LIEN IS PERFECTED; CONTINUITY OF PERFECTION.] 
           (a) [PERFECTION OF SECURITY INTEREST.] Except as otherwise 
        provided in this section and section 336.9-309, a security 
        interest is perfected if it has attached and all of the 
        applicable requirements for perfection in sections 336.9-310 
        through 336.9-316 have been satisfied.  A security interest is 
        perfected when it attaches if the applicable requirements are 
        satisfied before the security interest attaches. 
           (b) [PERFECTION OF AGRICULTURAL LIEN.] An agricultural lien 
        is perfected if it has become effective and all of the 
        applicable requirements for perfection in section 336.9-310 have 
        been satisfied.  An agricultural lien is perfected when it 
        becomes effective if the applicable requirements are satisfied 
        before the agricultural lien becomes effective. 
           (c) [CONTINUOUS PERFECTION; PERFECTION BY DIFFERENT 
        METHODS.] A security interest or agricultural lien is perfected 
        continuously if it is originally perfected by one method under 
        this article and is later perfected by another method under this 
        article, without an intermediate period when it was unperfected. 
           (d) [SUPPORTING OBLIGATION.] Perfection of a security 
        interest in collateral also perfects a security interest in a 
        supporting obligation for the collateral. 
           (e) [LIEN SECURING RIGHT-TO-PAYMENT.] Perfection of a 
        security interest in a right-to-payment or performance also 
        perfects a security interest in a security interest, mortgage, 
        or other lien on personal or real property securing the right. 
           (f) [SECURITY ENTITLEMENT CARRIED IN SECURITIES 
        ACCOUNT.] Perfection of a security interest in a securities 
        account also perfects a security interest in the security 
        entitlements carried in the securities account. 
           (g) [COMMODITY CONTRACT CARRIED IN COMMODITY 
        ACCOUNT.] Perfection of a security interest in a commodity 
        account also perfects a security interest in the commodity 
        contracts carried in the commodity account. 
           Sec. 29.  [336.9-309] [SECURITY INTEREST PERFECTED UPON 
        ATTACHMENT.] The following security interests are perfected when 
        they attach: 
           (1) a purchase-money security interest in consumer goods, 
        except as otherwise provided in section 336.9-311(b) with 
        respect to consumer goods that are subject to a statute or 
        treaty described in section 336.9-311(a); 
           (2) an assignment of accounts or payment intangibles which 
        does not by itself or in conjunction with other assignments to 
        the same assignee transfer a significant part of the assignor's 
        outstanding accounts or payment intangibles; 
           (3) a sale of a payment intangible; 
           (4) a sale of a promissory note; 
           (5) a security interest created by the assignment of a 
        health-care-insurance receivable to the provider of the 
        health-care goods or services; 
           (6) a security interest arising under section 336.2-401, 
        336.2-505, 336.2-711(3), or 336.2A-508(5), until the debtor 
        obtains possession of the collateral; 
           (7) a security interest of a collecting bank arising under 
        section 336.4-210; 
           (8) a security interest of an issuer or nominated person 
        arising under section 336.5-118; 
           (9) a security interest arising in the delivery of a 
        financial asset under section 336.9-206(c); 
           (10) a security interest in investment property created by 
        a broker or securities intermediary; 
           (11) a security interest in a commodity contract or a 
        commodity account created by a commodity intermediary; 
           (12) an assignment for the benefit of all creditors of the 
        transferor and subsequent transfers by the assignee thereunder; 
        and 
           (13) a security interest created by an assignment of a 
        beneficial interest in a decedent's estate. 
           Sec. 30.  [336.9-310] [WHEN FILING REQUIRED TO PERFECT 
        SECURITY INTEREST OR AGRICULTURAL LIEN; SECURITY INTERESTS AND 
        AGRICULTURAL LIENS TO WHICH FILING PROVISIONS DO NOT APPLY.] 
           (a) [GENERAL RULE:  PERFECTION BY FILING.] Except as 
        otherwise provided in subsection (b) and section 336.9-312(b), a 
        financing statement must be filed to perfect all security 
        interests and agricultural liens. 
           (b) [EXCEPTIONS:  FILING NOT NECESSARY.] The filing of a 
        financing statement is not necessary to perfect a security 
        interest: 
           (1) that is perfected under section 336.9-308(d), (e), (f), 
        or (g); 
           (2) that is perfected under section 336.9-309 when it 
        attaches; 
           (3) in property subject to a statute, regulation, or treaty 
        described in section 336.9-311(a); 
           (4) in goods in possession of a bailee which is perfected 
        under section 336.9-312(d)(1) or (2); 
           (5) in certificated securities, documents, goods, or 
        instruments which is perfected without filing or possession 
        under section 336.9-312(e), (f), or (g); 
           (6) in collateral in the secured party's possession under 
        section 336.9-313; 
           (7) in a certificated security which is perfected by 
        delivery of the security certificate to the secured party under 
        section 336.9-313; 
           (8) in deposit accounts, electronic chattel paper, 
        investment property, or letter of credit rights which is 
        perfected by control under section 336.9-314; 
           (9) in proceeds which is perfected under section 336.9-315; 
        or 
           (10) that is perfected under section 336.9-316. 
           (c) [ASSIGNMENT OF PERFECTED SECURITY INTEREST.] If a 
        secured party assigns a perfected security interest or 
        agricultural lien, a filing under this article is not required 
        to continue the perfected status of the security interest 
        against creditors of and transferees from the original debtor. 
           Sec. 31.  [336.9-311] [PERFECTION OF SECURITY INTERESTS IN 
        PROPERTY SUBJECT TO CERTAIN STATUTES, REGULATIONS, AND 
        TREATIES.] 
           (a) [SECURITY INTEREST SUBJECT TO OTHER LAW.] Except as 
        otherwise provided in subsection (d), the filing of a financing 
        statement is not necessary or effective to perfect a security 
        interest in property subject to: 
           (1) a statute, regulation, or treaty of the United States 
        whose requirements for a security interest's obtaining priority 
        over the rights of a lien creditor with respect to the property 
        preempt section 336.9-310(a); 
           (2) sections 86B.820 to 86B.920 and 168A.01 to 168A.31; but 
        during any period which collateral is inventory held for sale by 
        a person who is in the business of selling goods of that kind, 
        the filing provisions of this article (part 5) apply to a 
        security interest in the collateral created by the person as a 
        debtor; or sections 300.11 to 300.115; or 
           (3) a certificate-of-title statute of another jurisdiction 
        which provides for a security interest to be indicated on the 
        certificate as a condition or result of the security interest's 
        obtaining priority over the rights of a lien creditor with 
        respect to the property. 
           (b) [COMPLIANCE WITH OTHER LAW.] Compliance with the 
        requirements of a statute, regulation, or treaty described in 
        subsection (a) for obtaining priority over the rights of a lien 
        creditor is equivalent to the filing of a financing statement 
        under this article.  Except as otherwise provided in subsection 
        (d) and sections 336.9-313 and 336.9-316(d) and (e) for goods 
        covered by a certificate of title, a security interest in 
        property subject to a statute, regulation, or treaty described 
        in subsection (a) may be perfected only by compliance with those 
        requirements, and a security interest so perfected remains 
        perfected notwithstanding a change in the use or transfer of 
        possession of the collateral. 
           (c) [DURATION AND RENEWAL OF PERFECTION.] Except as 
        otherwise provided in subsection (d) and section 336.9-316(d) 
        and (e), duration and renewal of perfection of a security 
        interest perfected by compliance with the requirements 
        prescribed by a statute, regulation, or treaty described in 
        subsection (a) are governed by the statute, regulation, or 
        treaty.  In other respects, the security interest is subject to 
        this article. 
           (d) [INAPPLICABILITY TO CERTAIN INVENTORY.] During any 
        period in which collateral subject to a statute specified in 
        subsection (a)(2) is inventory held for sale or lease by a 
        person or leased by that person as lessor and that person is in 
        the business of selling goods of that kind, this section does 
        not apply to a security interest in that collateral created by 
        that person. 
           Sec. 32.  [336.9-312] [PERFECTION OF SECURITY INTERESTS IN 
        CHATTEL PAPER, DEPOSIT ACCOUNTS, DOCUMENTS, GOODS COVERED BY 
        DOCUMENTS, INSTRUMENTS, INVESTMENT PROPERTY, LETTER OF CREDIT 
        RIGHTS, AND MONEY; PERFECTION BY PERMISSIVE FILING; TEMPORARY 
        PERFECTION WITHOUT FILING OR TRANSFER OF POSSESSION.] 
           (a) [PERFECTION BY FILING PERMITTED.] A security interest 
        in chattel paper, negotiable documents, instruments, or 
        investment property may be perfected by filing. 
           (b) [CONTROL OR POSSESSION OF CERTAIN COLLATERAL.] Except 
        as otherwise provided in section 336.9-315(c) and (d) for 
        proceeds: 
           (1) a security interest in a deposit account may be 
        perfected only by control under section 336.9-314; 
           (2) and except as otherwise provided in section 
        336.9-308(d), a security interest in a letter of credit right 
        may be perfected only by control under section 336.9-314; and 
           (3) a security interest in money may be perfected only by 
        the secured party's taking possession under section 336.9-313. 
           (c) [GOODS COVERED BY NEGOTIABLE DOCUMENT.] While goods are 
        in the possession of a bailee that has issued a negotiable 
        document covering the goods: 
           (1) a security interest in the goods may be perfected by 
        perfecting a security interest in the document; and 
           (2) a security interest perfected in the document has 
        priority over any security interest that becomes perfected in 
        the goods by another method during that time. 
           (d) [GOODS COVERED BY NONNEGOTIABLE DOCUMENT.] While goods 
        are in the possession of a bailee that has issued a 
        nonnegotiable document covering the goods, a security interest 
        in the goods may be perfected by: 
           (1) issuance of a document in the name of the secured 
        party; 
           (2) the bailee's receipt of notification of the secured 
        party's interest; or 
           (3) filing as to the goods. 
           (e) [TEMPORARY PERFECTION:  NEW VALUE.] A security interest 
        in certificated securities, negotiable documents, or instruments 
        is perfected without filing or the taking of possession for a 
        period of 20 days from the time it attaches to the extent that 
        it arises for new value given under an authenticated security 
        agreement. 
           (f) [TEMPORARY PERFECTION:  GOODS OR DOCUMENTS MADE 
        AVAILABLE TO DEBTOR.] A perfected security interest in a 
        negotiable document or goods in possession of a bailee, other 
        than one that has issued a negotiable document for the goods, 
        remains perfected for 20 days without filing if the secured 
        party makes available to the debtor the goods or documents 
        representing the goods for the purpose of: 
           (1) ultimate sale or exchange; or 
           (2) loading, unloading, storing, shipping, transshipping, 
        manufacturing, processing, or otherwise dealing with them in a 
        manner preliminary to their sale or exchange. 
           (g) [TEMPORARY PERFECTION:  DELIVERY OF SECURITY 
        CERTIFICATE OR INSTRUMENT TO DEBTOR.] A perfected security 
        interest in a certificated security or instrument remains 
        perfected for 20 days without filing if the secured party 
        delivers the security certificate or instrument to the debtor 
        for the purpose of: 
           (1) ultimate sale or exchange; or 
           (2) presentation, collection, enforcement, renewal, or 
        registration of transfer. 
           (h) [EXPIRATION OF TEMPORARY PERFECTION.] After the 20-day 
        period specified in subsection (e), (f), or (g) expires, 
        perfection depends upon compliance with this article. 
           Sec. 33.  [336.9-313] [WHEN POSSESSION BY OR DELIVERY TO 
        SECURED PARTY PERFECTS SECURITY INTEREST WITHOUT FILING.] 
           (a) [PERFECTION BY POSSESSION OR DELIVERY.] Except as 
        otherwise provided in subsection (b), a secured party may 
        perfect a security interest in negotiable documents, goods, 
        instruments, money, or tangible chattel paper by taking 
        possession of the collateral.  A secured party may perfect a 
        security interest in certificated securities by taking delivery 
        of the certificated securities under section 336.8-301. 
           (b) [GOODS COVERED BY CERTIFICATE OF TITLE.] With respect 
        to goods covered by a certificate of title issued by this state, 
        a secured party may perfect a security interest in the goods by 
        taking possession of the goods only in the circumstances 
        described in section 336.9-316(e). 
           (c) [COLLATERAL IN POSSESSION OF PERSON OTHER THAN DEBTOR.] 
        With respect to collateral other than certificated securities 
        and goods covered by a document, a secured party takes 
        possession of collateral in the possession of a person other 
        than the debtor, the secured party, or a lessee of the 
        collateral from the debtor in the ordinary course of the 
        debtor's business, when: 
           (1) the person in possession authenticates a record 
        acknowledging that it holds possession of the collateral for the 
        secured party's benefit; or 
           (2) the person takes possession of the collateral after 
        having authenticated a record acknowledging that it will hold 
        possession of collateral for the secured party's benefit. 
           (d) [TIME OF PERFECTION BY POSSESSION; CONTINUATION OF 
        PERFECTION.] If perfection of a security interest depends upon 
        possession of the collateral by a secured party, perfection 
        occurs no earlier than the time the secured party takes 
        possession and continues only while the secured party retains 
        possession. 
           (e) [TIME OF PERFECTION BY DELIVERY; CONTINUATION OF 
        PERFECTION.] A security interest in a certificated security in 
        registered form is perfected by delivery when delivery of the 
        certificated security occurs under section 336.8-301 and remains 
        perfected by delivery until the debtor obtains possession of the 
        security certificate. 
           (f) [ACKNOWLEDGMENT NOT REQUIRED.] A person in possession 
        of collateral is not required to acknowledge that it holds 
        possession for a secured party's benefit. 
           (g) [EFFECTIVENESS OF ACKNOWLEDGMENT; NO DUTIES OR 
        CONFIRMATION.] If a person acknowledges that it holds possession 
        for the secured party's benefit: 
           (1) the acknowledgment is effective under subsection (c) or 
        section 336.8-301(a), even if the acknowledgment violates the 
        rights of a debtor; and 
           (2) unless the person otherwise agrees or law other than 
        this article otherwise provides, the person does not owe any 
        duty to the secured party and is not required to confirm the 
        acknowledgment to another person. 
           (h) [SECURED PARTY'S DELIVERY TO PERSON OTHER THAN DEBTOR.] 
        A secured party having possession of collateral does not 
        relinquish possession by delivering the collateral to a person 
        other than the debtor or a lessee of the collateral from the 
        debtor in the ordinary course of the debtor's business if the 
        person was instructed before the delivery or is instructed 
        contemporaneously with the delivery: 
           (1) to hold possession of the collateral for the secured 
        party's benefit; or 
           (2) to redeliver the collateral to the secured party. 
           (i) [EFFECT OF DELIVERY UNDER SUBSECTION (H); NO DUTIES OR 
        CONFIRMATION.] A secured party does not relinquish possession, 
        even if a delivery under subsection (h) violates the rights of a 
        debtor.  A person to which collateral is delivered under 
        subsection (h) does not owe any duty to the secured party and is 
        not required to confirm the delivery to another person unless 
        the person otherwise agrees or law other than this article 
        otherwise provides. 
           Sec. 34.  [336.9-314] [PERFECTION BY CONTROL.] 
           (a) [PERFECTION BY CONTROL.] A security interest in 
        investment property, deposit accounts, letter of credit rights, 
        or electronic chattel paper may be perfected by control of the 
        collateral under section 336.9-104, 336.9-105, 336.9-106, or 
        336.9-107. 
           (b) [SPECIFIED COLLATERAL:  TIME OF PERFECTION BY CONTROL; 
        CONTINUATION OF PERFECTION.] A security interest in deposit 
        accounts, electronic chattel paper, or letter of credit rights 
        is perfected by control under section 336.9-104, 336.9-105, or 
        336.9-107 when the secured party obtains control and remains 
        perfected by control only while the secured party retains 
        control. 
           (c) [INVESTMENT PROPERTY:  TIME OF PERFECTION BY CONTROL; 
        CONTINUATION OF PERFECTION.] A security interest in investment 
        property is perfected by control under section 336.9-106 from 
        the time the secured party obtains control and remains perfected 
        by control until: 
           (1) the secured party does not have control; and 
           (2) one of the following occurs: 
           (A) if the collateral is a certificated security, the 
        debtor has or acquires possession of the security certificate; 
           (B) if the collateral is an uncertificated security, the 
        issuer has registered or registers the debtor as the registered 
        owner; or 
           (C) if the collateral is a security entitlement, the debtor 
        is or becomes the entitlement holder. 
           Sec. 35.  [336.9-315] [SECURED PARTY'S RIGHTS ON 
        DISPOSITION OF COLLATERAL AND IN PROCEEDS.] 
           (a) [DISPOSITION OF COLLATERAL:  CONTINUATION OF SECURITY 
        INTEREST OR AGRICULTURAL LIEN; PROCEEDS.] Except as otherwise 
        provided in this article and in section 336.2-403(2): 
           (1) a security interest or agricultural lien continues in 
        collateral notwithstanding sale, lease, license, exchange, or 
        other disposition thereof unless the secured party authorized 
        the disposition free of the security interest or agricultural 
        lien; and 
           (2) a security interest attaches to any identifiable 
        proceeds of collateral. 
           (b) [WHEN COMMINGLED PROCEEDS IDENTIFIABLE.] Proceeds that 
        are commingled with other property are identifiable proceeds: 
           (1) if the proceeds are goods, to the extent provided by 
        section 336.9-336; and 
           (2) if the proceeds are not goods, to the extent that the 
        secured party identifies the proceeds by a method of tracing, 
        including application of equitable principles, that is permitted 
        under law other than this article with respect to commingled 
        property of the type involved. 
           (c) [PERFECTION OF SECURITY INTEREST IN PROCEEDS.] A 
        security interest in proceeds is a perfected security interest 
        if the security interest in the original collateral was 
        perfected. 
           (d) [CONTINUATION OF PERFECTION.] A perfected security 
        interest in proceeds becomes unperfected on the 21st day after 
        the security interest attaches to the proceeds unless: 
           (1) the following conditions are satisfied: 
           (A) a filed financing statement covers the original 
        collateral; 
           (B) the proceeds are collateral in which a security 
        interest may be perfected by filing in the office in which the 
        financing statement has been filed; and 
           (C) the proceeds are not acquired with cash proceeds; 
           (2) the proceeds are identifiable cash proceeds; or 
           (3) the security interest in the proceeds is perfected 
        other than under subsection (c) when the security interest 
        attaches to the proceeds or within 20 days thereafter. 
           (e) [WHEN PERFECTED SECURITY INTEREST IN PROCEEDS BECOMES 
        UNPERFECTED.] If a filed financing statement covers the original 
        collateral, a security interest in proceeds which remains 
        perfected under subsection (d)(1) becomes unperfected at the 
        later of: 
           (1) when the effectiveness of the filed financing statement 
        lapses under section 336.9-515 or is terminated under section 
        336.9-513; or 
           (2) the 21st day after the security interest attaches to 
        the proceeds. 
           Sec. 36.  [336.9-316] [CONTINUED PERFECTION OF SECURITY 
        INTEREST FOLLOWING CHANGE IN GOVERNING LAW.] 
           (a) [GENERAL RULE:  EFFECT ON PERFECTION OF CHANGE IN 
        GOVERNING LAW.] A security interest perfected pursuant to the 
        law of the jurisdiction designated in section 336.9-301(1) or 
        336.9-305(c) remains perfected until the earliest of: 
           (1) the time perfection would have ceased under the law of 
        that jurisdiction; 
           (2) the expiration of four months after a change of the 
        debtor's location to another jurisdiction; or 
           (3) the expiration of one year after a transfer of 
        collateral to a person that thereby becomes a debtor and is 
        located in another jurisdiction. 
           (b) [SECURITY INTEREST PERFECTED OR UNPERFECTED UNDER LAW 
        OF NEW JURISDICTION.] If a security interest described in 
        subsection (a) becomes perfected under the law of the other 
        jurisdiction before the earliest time or event described in that 
        subsection, it remains perfected thereafter.  If the security 
        interest does not become perfected under the law of the other 
        jurisdiction before the earliest time or event, it becomes 
        unperfected and is deemed never to have been perfected as 
        against a purchaser of the collateral for value. 
           (c) [POSSESSORY SECURITY INTEREST IN COLLATERAL MOVED TO 
        NEW JURISDICTION.] A possessory security interest in collateral, 
        other than goods covered by a certificate of title and 
        as-extracted collateral consisting of goods, remains 
        continuously perfected if: 
           (1) the collateral is located in one jurisdiction and 
        subject to a security interest perfected under the law of that 
        jurisdiction; 
           (2) thereafter the collateral is brought into another 
        jurisdiction; and 
           (3) upon entry into the other jurisdiction, the security 
        interest is perfected under the law of the other jurisdiction. 
           (d) [GOODS COVERED BY CERTIFICATE OF TITLE FROM THIS 
        STATE.] Except as otherwise provided in subsection (e), a 
        security interest in goods covered by a certificate of title 
        which is perfected by any method under the law of another 
        jurisdiction when the goods become covered by a certificate of 
        title from this state remains perfected until the security 
        interest would have become unperfected under the law of the 
        other jurisdiction had the goods not become so covered. 
           (e) [WHEN SUBSECTION (D) SECURITY INTEREST BECOMES 
        UNPERFECTED AGAINST PURCHASERS.] A security interest described 
        in subsection (d) becomes unperfected as against a purchaser of 
        the goods for value and is deemed never to have been perfected 
        as against a purchaser of the goods for value if the applicable 
        requirements for perfection under section 336.9-311(b) or 
        336.9-313 are not satisfied before the earlier of: 
           (1) the time the security interest would have become 
        unperfected under the law of the other jurisdiction had the 
        goods not become covered by a certificate of title from this 
        state; or 
           (2) the expiration of four months after the goods had 
        become so covered. 
           (f) [CHANGE IN JURISDICTION OF BANK, ISSUER, NOMINATED 
        PERSON, SECURITIES INTERMEDIARY, OR COMMODITY INTERMEDIARY.] A 
        security interest in deposit accounts, letter of credit rights, 
        or investment property which is perfected under the law of the 
        bank's jurisdiction, the issuer's jurisdiction, a nominated 
        person's jurisdiction, the securities intermediary's 
        jurisdiction, or the commodity intermediary's jurisdiction, as 
        applicable, remains perfected until the earlier of: 
           (1) the time the security interest would have become 
        unperfected under the law of that jurisdiction; or 
           (2) the expiration of four months after a change of the 
        applicable jurisdiction to another jurisdiction. 
           (g) [SUBSECTION (F) SECURITY INTEREST PERFECTED OR 
        UNPERFECTED UNDER LAW OF NEW JURISDICTION.] If a security 
        interest described in subsection (f) becomes perfected under the 
        law of the other jurisdiction before the earlier of the time or 
        the end of the period described in that subsection, it remains 
        perfected thereafter.  If the security interest does not become 
        perfected under the law of the other jurisdiction before the 
        earlier of that time or the end of that period, it becomes 
        unperfected and is deemed never to have been perfected as 
        against a purchaser of the collateral for value. 
                              SUBPART 3.  PRIORITY 
           Sec. 37.  [336.9-317] [INTERESTS THAT TAKE PRIORITY OVER OR 
        TAKE FREE OF SECURITY INTEREST OR AGRICULTURAL LIEN.] 
           (a) [CONFLICTING SECURITY INTERESTS AND RIGHTS OF LIEN 
        CREDITORS.] A security interest or agricultural lien is 
        subordinate to the rights of: 
           (1) a person entitled to priority under section 336.9-322; 
        and 
           (2) except as otherwise provided in subsection (e), a 
        person that becomes a lien creditor before the earlier of the 
        time: 
           (A) the security interest or agricultural lien is 
        perfected; or 
           (B) one of the conditions specified in section 
        336.9-203(b)(3) is met 
        and a financing statement covering the collateral is filed. 
           (b) [BUYERS THAT RECEIVE DELIVERY.] Except as otherwise 
        provided in subsection (e), a buyer, other than a secured party, 
        of tangible chattel paper, documents, goods, instruments, or a 
        security certificate takes free of a security interest or 
        agricultural lien if the buyer gives value and receives delivery 
        of the collateral without knowledge of the security interest or 
        agricultural lien and before it is perfected. 
           (c) [LESSEES THAT RECEIVE DELIVERY.] Except as otherwise 
        provided in subsection (e), a lessee of goods takes free of a 
        security interest or agricultural lien if the lessee gives value 
        and receives delivery of the collateral without knowledge of the 
        security interest or agricultural lien and before it is 
        perfected. 
           (d) [LICENSEES AND BUYERS OF CERTAIN COLLATERAL.] A 
        licensee of a general intangible or a buyer, other than a 
        secured party, of accounts, electronic chattel paper, general 
        intangibles, or investment property other than a certificated 
        security takes free of a security interest if the licensee or 
        buyer gives value without knowledge of the security interest and 
        before it is perfected. 
           (e) [PURCHASE-MONEY SECURITY INTEREST.] Except as otherwise 
        provided in sections 336.9-320 and 336.9-321, if a person files 
        a financing statement with respect to a purchase-money security 
        interest before or within 20 days after the debtor receives 
        delivery of the collateral, the security interest takes priority 
        over the rights of a buyer, lessee, or lien creditor which arise 
        between the time the security interest attaches and the time of 
        filing. 
           Sec. 38.  [336.9-318] [NO INTEREST RETAINED IN RIGHT TO 
        PAYMENT THAT IS SOLD; RIGHTS AND TITLE OF SELLER OF ACCOUNT OR 
        CHATTEL PAPER WITH RESPECT TO CREDITORS AND PURCHASERS.] 
           (a) [SELLER RETAINS NO INTEREST.] A debtor that has sold an 
        account, chattel paper, payment intangible, or promissory note 
        does not retain a legal or equitable interest in the collateral 
        sold. 
           (b) [DEEMED RIGHTS OF DEBTOR IF BUYER'S SECURITY INTEREST 
        UNPERFECTED.] For purposes of determining the rights of 
        creditors of, and purchasers for value of an account or chattel 
        paper from, a debtor that has sold an account or chattel paper, 
        while the buyer's security interest is unperfected, the debtor 
        is deemed to have rights and title to the account or chattel 
        paper identical to those the debtor sold. 
           Sec. 39.  [336.9-319] [RIGHTS AND TITLE OF CONSIGNEE WITH 
        RESPECT TO CREDITORS AND PURCHASERS.] 
           (a) [CONSIGNEE HAS CONSIGNOR'S RIGHTS.] Except as otherwise 
        provided in subsection (b), for purposes of determining the 
        rights of creditors of, and purchasers for value of goods from, 
        a consignee, while the goods are in the possession of the 
        consignee, the consignee is deemed to have rights and title to 
        the goods identical to those the consignor had or had power to 
        transfer. 
           (b) [APPLICABILITY OF OTHER LAW.] For purposes of 
        determining the rights of a creditor of a consignee, law other 
        than this article determines the rights and title of a consignee 
        while goods are in the consignee's possession if, under this 
        part, a perfected security interest held by the consignor would 
        have priority over the rights of the creditor. 
           Sec. 40.  [336.9-320] [BUYER OF GOODS.] 
           (a) [BUYER IN ORDINARY COURSE OF BUSINESS.] Except as 
        otherwise provided in subsection (e), a buyer in ordinary course 
        of business, other than a person buying farm products from a 
        person engaged in farming operations, takes free of a security 
        interest created by the buyer's seller, even if the security 
        interest is perfected and the buyer knows of its existence. 
           (b) [BUYER OF CONSUMER GOODS.] Except as otherwise provided 
        in subsection (e), a buyer of goods from a person who used or 
        bought the goods for use primarily for personal, family, or 
        household purposes takes free of a security interest, even if 
        perfected, if the buyer buys: 
           (1) without knowledge of the security interest; 
           (2) for value; 
           (3) primarily for the buyer's personal, family, or 
        household purposes; and 
           (4) before the filing of a financing statement covering the 
        goods. 
           (c) [EFFECTIVENESS OF FILING FOR SUBSECTION (B).] To the 
        extent that it affects the priority of a security interest over 
        a buyer of goods under subsection (b), the period of 
        effectiveness of a filing made in the jurisdiction in which the 
        seller is located is governed by section 336.9-316(a) and (b). 
           (d) [BUYER IN ORDINARY COURSE OF BUSINESS AT WELLHEAD OR 
        MINEHEAD.] A buyer in ordinary course of business buying oil, 
        gas, or other minerals at the wellhead or minehead or after 
        extraction takes free of an interest arising out of an 
        encumbrance. 
           (e) [POSSESSORY SECURITY INTEREST NOT 
        AFFECTED.] Subsections (a) and (b) do not affect a security 
        interest in goods in the possession of the secured party under 
        section 336.9-313. 
           Sec. 41.  [336.9-321] [LICENSEE OF GENERAL INTANGIBLE AND 
        LESSEE OF GOODS IN ORDINARY COURSE OF BUSINESS.] 
           (a) [LICENSEE IN ORDINARY COURSE OF BUSINESS.] In this 
        section, "licensee in ordinary course of business" means a 
        person that becomes a licensee of a general intangible in good 
        faith, without knowledge that the license violates the rights of 
        another person in the general intangible, and in the ordinary 
        course from a person in the business of licensing general 
        intangibles of that kind.  A person becomes a licensee in the 
        ordinary course if the license to the person comports with the 
        usual or customary practices in the kind of business in which 
        the licensor is engaged or with the licensor's own usual or 
        customary practices. 
           (b) [RIGHTS OF LICENSEE IN ORDINARY COURSE OF BUSINESS.] A 
        licensee in ordinary course of business takes its rights under a 
        nonexclusive license free of a security interest in the general 
        intangible created by the licensor, even if the security 
        interest is perfected and the licensee knows of its existence. 
           (c) [RIGHTS OF LESSEE IN ORDINARY COURSE OF BUSINESS.] A 
        lessee in ordinary course of business takes its leasehold 
        interest free of a security interest in the goods created by the 
        lessor, even if the security interest is perfected and the 
        lessee knows of its existence. 
           Sec. 42.  [336.9-322] [PRIORITIES AMONG CONFLICTING 
        SECURITY INTERESTS IN AND AGRICULTURAL LIENS ON SAME 
        COLLATERAL.] 
           (a) [GENERAL PRIORITY RULES.] Except as otherwise provided 
        in this section, priority among conflicting security interests 
        and agricultural liens in the same collateral is determined 
        according to the following rules: 
           (1) Conflicting perfected security interests and 
        agricultural liens rank according to priority in time of filing 
        or perfection.  Priority dates from the earlier of the time a 
        filing covering the collateral is first made or the security 
        interest or agricultural lien is first perfected, if there is no 
        period thereafter when there is neither filing nor perfection. 
           (2) A perfected security interest or agricultural lien has 
        priority over a conflicting unperfected security interest or 
        agricultural lien. 
           (3) The first security interest or agricultural lien to 
        attach or become effective has priority if conflicting security 
        interests and agricultural liens are unperfected. 
           (b) [TIME OF PERFECTION:  PROCEEDS AND SUPPORTING 
        OBLIGATIONS.] For the purposes of subsection (a)(1): 
           (1) the time of filing or perfection as to a security 
        interest in collateral is also the time of filing or perfection 
        as to a security interest in proceeds; and 
           (2) the time of filing or perfection as to a security 
        interest in collateral supported by a supporting obligation is 
        also the time of filing or perfection as to a security interest 
        in the supporting obligation. 
           (c) [SPECIAL PRIORITY RULES:  PROCEEDS AND SUPPORTING 
        OBLIGATIONS.] Except as otherwise provided in subsection (f), a 
        security interest in collateral which qualifies for priority 
        over a conflicting security interest under section 336.9-327, 
        336.9-328, 336.9-329, 336.9-330, or 336.9-331 also has priority 
        over a conflicting security interest in: 
           (1) any supporting obligation for the collateral; and 
           (2) proceeds of the collateral if: 
           (A) the security interest in proceeds is perfected; 
           (B) the proceeds are cash proceeds or of the same type as 
        the collateral; and 
           (C) in the case of proceeds that are proceeds of proceeds, 
        all intervening proceeds are cash proceeds, proceeds of the same 
        type as the collateral, or an account relating to the collateral.
           (d) [FIRST-TO-FILE PRIORITY RULE FOR CERTAIN COLLATERAL.] 
        Subject to subsection (e) and except as otherwise provided in 
        subsection (f), if a security interest in chattel paper, deposit 
        accounts, negotiable documents, instruments, investment 
        property, or letter of credit rights is perfected by a method 
        other than filing, conflicting perfected security interests in 
        proceeds of the collateral rank according to priority in time of 
        filing. 
           (e) [APPLICABILITY OF SUBSECTION (D).] Subsection (d) 
        applies only if the proceeds of the collateral are not cash 
        proceeds, chattel paper, negotiable documents, instruments, 
        investment property, or letter of credit rights. 
           (f) [LIMITATIONS ON SUBSECTIONS (A) THROUGH 
        (E).] Subsections (a) through (e) are subject to: 
           (1) subsection (g) and the other provisions of this part; 
           (2) section 336.4-210 with respect to a security interest 
        of a collecting bank; 
           (3) section 336.5-118 with respect to a security interest 
        of an issuer or nominated person; and 
           (4) section 336.9-110 with respect to a security interest 
        arising under article 2 or 2A. 
           (g) [PRIORITY UNDER AGRICULTURAL LIEN STATUTE.] A perfected 
        agricultural lien on collateral has priority over a conflicting 
        security interest in or agricultural lien on the same collateral 
        if the statute creating the agricultural lien so provides. 
           Sec. 43.  [336.9-323] [FUTURE ADVANCES.] 
           (a) [WHEN PRIORITY BASED ON TIME OF ADVANCE.] Except as 
        otherwise provided in subsection (c), for purposes of 
        determining the priority of a perfected security interest under 
        section 336.9-322(a)(1), perfection of the security interest 
        dates from the time an advance is made to the extent that the 
        security interest secures an advance that: 
           (1) is made while the security interest is perfected only: 
           (A) under section 336.9-309 when it attaches; or 
           (B) temporarily under section 336.9-312(e), (f), or (g); 
        and 
           (2) is not made pursuant to a commitment entered into 
        before or while the security interest is perfected by a method 
        other than under section 336.9-309 or 336.9-312(e), (f), or (g). 
           (b) [LIEN CREDITOR.] Except as otherwise provided in 
        subsection (c), a security interest is subordinate to the rights 
        of a person that becomes a lien creditor to the extent that the 
        security interest secures an advance made more than 45 days 
        after the person becomes a lien creditor unless the advance is 
        made: 
           (1) without knowledge of the lien; or 
           (2) pursuant to a commitment entered into without knowledge 
        of the lien. 
           (c) [BUYER OF RECEIVABLES.] Subsections (a) and (b) do not 
        apply to a security interest held by a secured party that is a 
        buyer of accounts, chattel paper, payment intangibles, or 
        promissory notes or a consignor. 
           (d) [BUYER OF GOODS.] Except as otherwise provided in 
        subsection (e), a buyer of goods other than a buyer in ordinary 
        course of business takes free of a security interest to the 
        extent that it secures advances made after the earlier of: 
           (1) the time the secured party acquires knowledge of the 
        buyer's purchase; or 
           (2) 45 days after the purchase. 
           (e) [ADVANCES MADE PURSUANT TO COMMITMENT:  PRIORITY OF 
        BUYER OF GOODS.] Subsection (d) does not apply if the advance is 
        made pursuant to a commitment entered into without knowledge of 
        the buyer's purchase and before the expiration of the 45-day 
        period. 
           (f) [LESSEE OF GOODS.] Except as otherwise provided in 
        subsection (g), a lessee of goods, other than a lessee in 
        ordinary course of business, takes the leasehold interest free 
        of a security interest to the extent that it secures advances 
        made after the earlier of: 
           (1) the time the secured party acquires knowledge of the 
        lease; or 
           (2) 45 days after the lease contract becomes enforceable. 
           (g) [ADVANCES MADE PURSUANT TO COMMITMENT:  PRIORITY OF 
        LESSEE OF GOODS.] Subsection (f) does not apply if the advance 
        is made pursuant to a commitment entered into without knowledge 
        of the lease and before the expiration of the 45-day period. 
           Sec. 44.  [336.9-324] [PRIORITY OF PURCHASE-MONEY SECURITY 
        INTERESTS.] 
           (a) [GENERAL RULE:  PURCHASE-MONEY PRIORITY.] Except as 
        otherwise provided in subsection (g), a perfected purchase-money 
        security interest in goods other than inventory or livestock has 
        priority over a conflicting security interest in the same goods, 
        and, except as otherwise provided in section 336.9-327, a 
        perfected security interest in its identifiable proceeds also 
        has priority, if the purchase-money security interest is 
        perfected when the debtor receives possession of the collateral 
        or within 20 days thereafter. 
           (b) [INVENTORY PURCHASE-MONEY PRIORITY.] Subject to 
        subsection (c) and except as otherwise provided in subsection 
        (g), a perfected purchase-money security interest in inventory 
        has priority over a conflicting security interest in the same 
        inventory, has priority over a conflicting security interest in 
        chattel paper or an instrument constituting proceeds of the 
        inventory and in proceeds of the chattel paper, if so provided 
        in section 336.9-330, and, except as otherwise provided in 
        section 336.9-327, also has priority in identifiable cash 
        proceeds of the inventory to the extent the identifiable cash 
        proceeds are received on or before the delivery of the inventory 
        to a buyer, if: 
           (1) the purchase-money security interest is perfected when 
        the debtor receives possession of the inventory; 
           (2) the purchase-money secured party sends an authenticated 
        notification to the holder of the conflicting security interest; 
           (3) the holder of the conflicting security interest 
        receives the notification within five years before the debtor 
        receives possession of the inventory; and 
           (4) the notification states that the person sending the 
        notification has or expects to acquire a purchase-money security 
        interest in inventory of the debtor and describes the inventory. 
           (c) [HOLDERS OF CONFLICTING INVENTORY SECURITY INTERESTS TO 
        BE NOTIFIED.] Subsection (b)(2) through (4) apply only if the 
        holder of the conflicting security interest had filed a 
        financing statement covering the same types of inventory: 
           (1) if the purchase-money security interest is perfected by 
        filing, before the date of the filing; or 
           (2) if the purchase-money security interest is temporarily 
        perfected without filing or possession under section 
        336.9-312(f), before the beginning of the 20-day period 
        thereunder. 
           (d) [LIVESTOCK PURCHASE-MONEY PRIORITY.] Subject to 
        subsection (e) and except as otherwise provided in subsection 
        (g), a perfected purchase-money security interest in livestock 
        that are farm products has priority over a conflicting security 
        interest in the same livestock, and, except as otherwise 
        provided in section 336.9-327, a perfected security interest in 
        their identifiable proceeds and identifiable products in their 
        unmanufactured states also has priority, if: 
           (1) the purchase-money security interest is perfected when 
        the debtor receives possession of the livestock; 
           (2) the purchase-money secured party sends an authenticated 
        notification to the holder of the conflicting security interest; 
           (3) the holder of the conflicting security interest 
        receives the notification within six months before the debtor 
        receives possession of the livestock; and 
           (4) the notification states that the person sending the 
        notification has or expects to acquire a purchase-money security 
        interest in livestock of the debtor and describes the livestock. 
           (e) [HOLDERS OF CONFLICTING LIVESTOCK SECURITY INTERESTS TO 
        BE NOTIFIED.] Subsection (d)(2) through (4) apply only if the 
        holder of the conflicting security interest had filed a 
        financing statement covering the same types of livestock: 
           (1) if the purchase-money security interest is perfected by 
        filing, before the date of the filing; or 
           (2) if the purchase-money security interest is temporarily 
        perfected without filing or possession under section 
        336.9-312(f), before the beginning of the 20-day period 
        thereunder. 
           (f) [SOFTWARE PURCHASE-MONEY PRIORITY.] Except as otherwise 
        provided in subsection (g), a perfected purchase-money security 
        interest in software has priority over a conflicting security 
        interest in the same collateral, and, except as otherwise 
        provided in section 336.9-327, a perfected security interest in 
        its identifiable proceeds also has priority, to the extent that 
        the purchase-money security interest in the goods in which the 
        software was acquired for use has priority in the goods and 
        proceeds of the goods under this section. 
           (g) [CONFLICTING PURCHASE-MONEY SECURITY INTERESTS.] If 
        more than one security interest qualifies for priority in the 
        same collateral under subsection (a), (b), (d), or (f): 
           (1) a security interest securing an obligation incurred as 
        all or part of the price of the collateral has priority over a 
        security interest securing an obligation incurred for value 
        given to enable the debtor to acquire rights in or the use of 
        collateral; and 
           (2) in all other cases, section 336.9-322(a) applies to the 
        qualifying security interests. 
           Sec. 45.  [336.9-325] [PRIORITY OF SECURITY INTERESTS IN 
        TRANSFERRED COLLATERAL.] 
           (a) [SUBORDINATION OF SECURITY INTEREST IN TRANSFERRED 
        COLLATERAL.] Except as otherwise provided in subsection (b), a 
        security interest created by a debtor is subordinate to a 
        security interest in the same collateral created by another 
        person if: 
           (1) the debtor acquired the collateral subject to the 
        security interest created by the other person; 
           (2) the security interest created by the other person was 
        perfected when the debtor acquired the collateral; and 
           (3) there is no period thereafter when the security 
        interest is unperfected. 
           (b) [LIMITATION OF SUBSECTION (A) 
        SUBORDINATION.] Subsection (a) subordinates a security interest 
        only if the security interest: 
           (1) otherwise would have priority solely under section 
        336.9-322(a) or 336.9-324; or 
           (2) arose solely under section 336.2-711(3) or 
        336.2A-508(5). 
           Sec. 46.  [336.9-326] [PRIORITY OF SECURITY INTERESTS 
        CREATED BY NEW DEBTOR.] 
           (a) [SUBORDINATION OF SECURITY INTEREST CREATED BY NEW 
        DEBTOR.] Subject to subsection (b), a security interest created 
        by a new debtor which is perfected by a filed financing 
        statement that is effective solely under section 336.9-508 in 
        collateral in which a new debtor has or acquires rights is 
        subordinate to a security interest in the same collateral which 
        is perfected other than by a filed financing statement that is 
        effective solely under section 336.9-508. 
           (b) [PRIORITY UNDER OTHER PROVISIONS; MULTIPLE ORIGINAL 
        DEBTORS.] The other provisions of this part determine the 
        priority among conflicting security interests in the same 
        collateral perfected by filed financing statements that are 
        effective solely under section 336.9-508.  However, if the 
        security agreements to which a new debtor became bound as debtor 
        were not entered into by the same original debtor, the 
        conflicting security interests rank according to priority in 
        time of the new debtor's having become bound. 
           Sec. 47.  [336.9-327] [PRIORITY OF SECURITY INTERESTS IN 
        DEPOSIT ACCOUNT.] 
           The following rules govern priority among conflicting 
        security interests in the same deposit account: 
           (1) A security interest held by a secured party having 
        control of the deposit account under section 336.9-104 has 
        priority over a conflicting security interest held by a secured 
        party that does not have control. 
           (2) Except as otherwise provided in paragraphs (3) and (4), 
        security interests perfected by control under section 336.9-314 
        rank according to priority in time of obtaining control. 
           (3) Except as otherwise provided in paragraph (4), a 
        security interest held by the bank with which the deposit 
        account is maintained has priority over a conflicting security 
        interest held by another secured party. 
           (4) A security interest perfected by control under section 
        336.9-104(a)(3) has priority over a security interest held by 
        the bank with which the deposit account is maintained. 
           Sec. 48.  [336.9-328] [PRIORITY OF SECURITY INTERESTS IN 
        INVESTMENT PROPERTY.] 
           The following rules govern priority among conflicting 
        security interests in the same investment property: 
           (1) A security interest held by a secured party having 
        control of investment property under section 336.9-106 has 
        priority over a security interest held by a secured party that 
        does not have control of the investment property. 
           (2) Except as otherwise provided in paragraphs (3) and (4), 
        conflicting security interests held by secured parties each of 
        which has control under section 336.9-106 rank according to 
        priority in time of: 
           (A) if the collateral is a security, obtaining control; 
           (B) if the collateral is a security entitlement carried in 
        a securities account and: 
           (i) if the secured party obtained control under section 
        336.8-106(d)(1), the secured party's becoming the person for 
        which the securities account is maintained; 
           (ii) if the secured party obtained control under section 
        336.8-106(d)(2), the securities intermediary's agreement to 
        comply with the secured party's entitlement orders with respect 
        to security entitlements carried or to be carried in the 
        securities account; or 
           (iii) if the secured party obtained control through another 
        person under section 336.8-106(d)(3), the time on which priority 
        would be based under this paragraph if the other person were the 
        secured party; or 
           (C) if the collateral is a commodity contract carried with 
        a commodity intermediary, the satisfaction of the requirement 
        for control specified in section 336.9-106(b)(2) with respect to 
        commodity contracts carried or to be carried with the commodity 
        intermediary. 
           (3) A security interest held by a securities intermediary 
        in a security entitlement or a securities account maintained 
        with the securities intermediary has priority over a conflicting 
        security interest held by another secured party. 
           (4) A security interest held by a commodity intermediary in 
        a commodity contract or a commodity account maintained with the 
        commodity intermediary has priority over a conflicting security 
        interest held by another secured party. 
           (5) A security interest in a certificated security in 
        registered form which is perfected by taking delivery under 
        section 336.9-313(a) and not by control under section 336.9-314 
        has priority over a conflicting security interest perfected by a 
        method other than control. 
           (6) Conflicting security interests created by a broker, 
        securities intermediary, or commodity intermediary which are 
        perfected without control under section 336.9-106 rank equally. 
           (7) In all other cases, priority among conflicting security 
        interests in investment property is governed by sections 
        336.9-322 and 336.9-323. 
           Sec. 49.  [336.9-329] [PRIORITY OF SECURITY INTERESTS IN 
        LETTER OF CREDIT RIGHT.] 
           The following rules govern priority among conflicting 
        security interests in the same letter of credit right: 
           (1) A security interest held by a secured party having 
        control of the letter of credit right under section 336.9-107 
        has priority to the extent of its control over a conflicting 
        security interest held by a secured party that does not have 
        control. 
           (2) Security interests perfected by control under section 
        336.9-314 rank according to priority in time of obtaining 
        control. 
           Sec. 50.  [336.9-330] [PRIORITY OF PURCHASER OF CHATTEL 
        PAPER OR INSTRUMENT.] 
           (a) [PURCHASER'S PRIORITY:  SECURITY INTEREST CLAIMED 
        MERELY AS PROCEEDS.] A purchaser of chattel paper has priority 
        over a security interest in the chattel paper which is claimed 
        merely as proceeds of inventory subject to a security interest 
        if: 
           (1) in good faith and in the ordinary course of the 
        purchaser's business, the purchaser gives new value and takes 
        possession of the chattel paper or obtains control of the 
        chattel paper under section 336.9-105; and 
           (2) the chattel paper does not indicate that it has been 
        assigned to an identified assignee other than the purchaser. 
           (b) [PURCHASER'S PRIORITY:  OTHER SECURITY INTERESTS.] A 
        purchaser of chattel paper has priority over a security interest 
        in the chattel paper which is claimed other than merely as 
        proceeds of inventory subject to a security interest if the 
        purchaser gives new value and takes possession of the chattel 
        paper or obtains control of the chattel paper under section 
        336.9-105 in good faith, in the ordinary course of the 
        purchaser's business, and without knowledge that the purchase 
        violates the rights of the secured party. 
           (c) [CHATTEL PAPER PURCHASER'S PRIORITY IN 
        PROCEEDS.] Except as otherwise provided in section 336.9-327, a 
        purchaser having priority in chattel paper under subsection (a) 
        or (b) also has priority in proceeds of the chattel paper to the 
        extent that: 
           (1) section 336.9-322 provides for priority in the 
        proceeds; or 
           (2) the proceeds consist of the specific goods covered by 
        the chattel paper or cash proceeds of the specific goods, even 
        if the purchaser's security interest in the proceeds is 
        unperfected. 
           (d) [INSTRUMENT PURCHASER'S PRIORITY.] Except as otherwise 
        provided in section 336.9-331(a), a purchaser of an instrument 
        has priority over a security interest in the instrument 
        perfected by a method other than possession if the purchaser 
        gives value and takes possession of the instrument in good faith 
        and without knowledge that the purchase violates the rights of 
        the secured party. 
           (e) [HOLDER OF PURCHASE-MONEY SECURITY INTEREST GIVES NEW 
        VALUE.] For purposes of subsections (a) and (b), the holder of a 
        purchase-money security interest in inventory gives new value 
        for chattel paper constituting proceeds of the inventory. 
           (f) [INDICATION OF ASSIGNMENT GIVES KNOWLEDGE.] For 
        purposes of subsections (b) and (d), if chattel paper or an 
        instrument indicates that it has been assigned to an identified 
        secured party other than the purchaser, a purchaser of the 
        chattel paper or instrument has knowledge that the purchase 
        violates the rights of the secured party. 
           Sec. 51.  [336.9-331] [PRIORITY OF RIGHTS OF PURCHASERS OF 
        INSTRUMENTS, DOCUMENTS, AND SECURITIES UNDER OTHER ARTICLES; 
        PRIORITY OF INTERESTS IN FINANCIAL ASSETS AND SECURITY 
        ENTITLEMENTS UNDER ARTICLE 8.] 
           (a) [RIGHTS UNDER ARTICLES 3, 7, AND 8 NOT LIMITED.] This 
        article does not limit the rights of a holder in due course of a 
        negotiable instrument, a holder to which a negotiable document 
        of title has been duly negotiated, or a protected purchaser of a 
        security.  These holders or purchasers take priority over an 
        earlier security interest, even if perfected, to the extent 
        provided in articles 3, 7, and 8. 
           (b) [PROTECTION UNDER ARTICLE 8.] This article does not 
        limit the rights of or impose liability on a person to the 
        extent that the person is protected against the assertion of a 
        claim under article 8. 
           (c) [FILING NOT NOTICE.] Filing under this article does not 
        constitute notice of a claim or defense to the holders, or 
        purchasers, or persons described in subsections (a) and (b). 
           Sec. 52.  [336.9-332] [TRANSFER OF MONEY; TRANSFER OF FUNDS 
        FROM DEPOSIT ACCOUNT.] 
           (a) [TRANSFEREE OF MONEY.] A transferee of money takes the 
        money free of a security interest unless the transferee acts in 
        collusion with the debtor in violating the rights of the secured 
        party. 
           (b) [TRANSFEREE OF FUNDS FROM DEPOSIT ACCOUNT.] A 
        transferee of funds from a deposit account takes the funds free 
        of a security interest in the deposit account unless the 
        transferee acts in collusion with the debtor in violating the 
        rights of the secured party. 
           Sec. 53.  [336.9-333] [PRIORITY OF CERTAIN LIENS ARISING BY 
        OPERATION OF LAW.] 
           (a) [POSSESSORY LIEN.] In this section, "possessory lien" 
        means an interest, other than a security interest or an 
        agricultural lien: 
           (1) which secures payment or performance of an obligation 
        for services or materials furnished with respect to goods by a 
        person in the ordinary course of the person's business; 
           (2) which is created by statute or rule of law in favor of 
        the person; and 
           (3) whose effectiveness depends on the person's possession 
        of the goods. 
           (b) [PRIORITY OF POSSESSORY LIEN.] A possessory lien on 
        goods has priority over a security interest in the goods unless 
        the lien is created by a statute that expressly provides 
        otherwise. 
           Sec. 54.  [336.9-334] [PRIORITY OF SECURITY INTERESTS IN 
        FIXTURES AND CROPS.] 
           (a) [SECURITY INTEREST IN FIXTURES UNDER THIS ARTICLE.] A 
        security interest under this article may be created in goods 
        that are fixtures or may continue in goods that become 
        fixtures.  A security interest does not exist under this article 
        in ordinary building materials incorporated into an improvement 
        on land. 
           (b) [SECURITY INTEREST IN FIXTURES UNDER REAL PROPERTY 
        LAW.] This article does not prevent creation of an encumbrance 
        upon fixtures under real property law. 
           (c) [GENERAL RULE:  SUBORDINATION OF SECURITY INTEREST IN 
        FIXTURES.] In cases not governed by subsections (d) through (h), 
        a security interest in fixtures is subordinate to a conflicting 
        interest of an encumbrancer or owner of the related real 
        property other than the debtor. 
           (d) [FIXTURES PURCHASE-MONEY PRIORITY.] Except as otherwise 
        provided in subsection (h), a perfected security interest in 
        fixtures has priority over a conflicting interest of an 
        encumbrancer or owner of the real property if the debtor has an 
        interest of record in or is in possession of the real property 
        and: 
           (1) the security interest is a purchase-money security 
        interest; 
           (2) the interest of the encumbrancer or owner arises before 
        the goods become fixtures; and 
           (3) the security interest is perfected by a fixture filing 
        before the goods become fixtures or within 20 days thereafter. 
           (e) [PRIORITY OF SECURITY INTEREST IN FIXTURES OVER 
        INTERESTS IN REAL PROPERTY.] A perfected security interest in 
        fixtures has priority over a conflicting interest of an 
        encumbrancer or owner of the real property if: 
           (1) the debtor has an interest of record in the real 
        property or is in possession of the real property and the 
        security interest: 
           (A) is perfected by a fixture filing before the interest of 
        the encumbrancer or owner is of record; and 
           (B) has priority over any conflicting interest of a 
        predecessor in title of the encumbrancer or owner; 
           (2) before the goods become fixtures, the security interest 
        is perfected by any method permitted by this article and the 
        fixtures are readily removable: 
           (A) factory or office machines; 
           (B) equipment that is not primarily used or leased for use 
        in the operation of the real property; or 
           (C) replacements of domestic appliances that are consumer 
        goods; 
           (3) the conflicting interest is a lien on the real property 
        obtained by legal or equitable proceedings after the security 
        interest was perfected by any method permitted by this article; 
        or 
           (4) the security interest is: 
           (A) created in a manufactured home in a manufactured home 
        transaction; and 
           (B) perfected pursuant to a statute described in section 
        336.9-311(a)(2). 
           (f) [PRIORITY BASED ON CONSENT, DISCLAIMER, OR RIGHT TO 
        REMOVE.] A security interest in fixtures, whether or not 
        perfected, has priority over a conflicting interest of an 
        encumbrancer or owner of the real property if: 
           (1) the encumbrancer or owner has, in an authenticated 
        record, consented to the security interest or disclaimed an 
        interest in the goods as fixtures; or 
           (2) the debtor has a right to remove the goods as against 
        the encumbrancer or owner. 
           (g) [CONTINUATION OF PARAGRAPH (F)(2) PRIORITY.] The 
        priority of the security interest under paragraph (f)(2) 
        continues for a reasonable time if the debtor's right to remove 
        the goods as against the encumbrancer or owner terminates. 
           (h) [PRIORITY OF CONSTRUCTION MORTGAGE.] A mortgage is a 
        construction mortgage to the extent that it secures an 
        obligation incurred for the construction of an improvement on 
        land, including the acquisition cost of the land, if a recorded 
        record of the mortgage so indicates.  Except as otherwise 
        provided in subsections (e) and (f), a security interest in 
        fixtures is subordinate to a construction mortgage if a record 
        of the mortgage is recorded before the goods become fixtures and 
        the goods become fixtures before the completion of the 
        construction.  A mortgage has this priority to the same extent 
        as a construction mortgage to the extent that it is given to 
        refinance a construction mortgage. 
           (i) [PRIORITY OF SECURITY INTEREST IN CROPS.] A perfected 
        security interest in crops growing on real property has priority 
        over a conflicting interest of an encumbrancer or owner of the 
        real property if the debtor has an interest of record in or is 
        in possession of the real property. 
           (j) [SUBSECTION (i) PREVAILS.] Subsection (i) prevails over 
        any inconsistent provisions of the following statutes: 
           (1) section 557.12; and 
           (2) section 559.2091. 
           Sec. 55.  [336.9-335] [ACCESSIONS.] 
           (a) [CREATION OF SECURITY INTEREST IN ACCESSION.] A 
        security interest may be created in an accession and continues 
        in collateral that becomes an accession. 
           (b) [PERFECTION OF SECURITY INTEREST.] If a security 
        interest is perfected when the collateral becomes an accession, 
        the security interest remains perfected in the collateral. 
           (c) [PRIORITY OF SECURITY INTEREST.] Except as otherwise 
        provided in subsection (d), the other provisions of this part 
        determine the priority of a security interest in an accession. 
           (d) [COMPLIANCE WITH CERTIFICATE OF TITLE STATUTE.] A 
        security interest in an accession is subordinate to a security 
        interest in the whole which is perfected by compliance with the 
        requirements of a certificate of title statute under section 
        336.9-311(b). 
           (e) [REMOVAL OF ACCESSION AFTER DEFAULT.] After default, 
        subject to Part 6, a secured party may remove an accession from 
        other goods if the security interest in the accession has 
        priority over the claims of every person having an interest in 
        the whole. 
           (f) [REIMBURSEMENT FOLLOWING REMOVAL.] A secured party that 
        removes an accession from other goods under subsection (e) shall 
        promptly reimburse any holder of a security interest or other 
        lien on, or owner of, the whole or of the other goods, other 
        than the debtor, for the cost of repair of any physical injury 
        to the whole or the other goods.  The secured party need not 
        reimburse the holder or owner for any diminution in value of the 
        whole or the other goods caused by the absence of the accession 
        removed or by any necessity for replacing it.  A person entitled 
        to reimbursement may refuse permission to remove until the 
        secured party gives adequate assurance for the performance of 
        the obligation to reimburse. 
           Sec. 56.  [336.9-336] [COMMINGLED GOODS.] 
           (a) [COMMINGLED GOODS.] In this section, "commingled goods" 
        means goods that are physically united with other goods in such 
        a manner that their identity is lost in a product or mass. 
           (b) [NO SECURITY INTEREST IN COMMINGLED GOODS AS SUCH.] A 
        security interest does not exist in commingled goods as such.  
        However, a security interest may attach to a product or mass 
        that results when goods become commingled goods. 
           (c) [ATTACHMENT OF SECURITY INTEREST TO PRODUCT OR 
        MASS.] If collateral becomes commingled goods, a security 
        interest attaches to the product or mass. 
           (d) [PERFECTION OF SECURITY INTEREST.] If a security 
        interest in collateral is perfected before the collateral 
        becomes commingled goods, the security interest that attaches to 
        the product or mass under subsection (c) is perfected. 
           (e) [PRIORITY OF SECURITY INTEREST.] Except as otherwise 
        provided in subsection (f), the other provisions of this part 
        determine the priority of a security interest that attaches to 
        the product or mass under subsection (c). 
           (f) [CONFLICTING SECURITY INTERESTS IN PRODUCT OR MASS.] If 
        more than one security interest attaches to the product or mass 
        under subsection (c), the following rules determine priority: 
           (1) A security interest that is perfected under subsection 
        (d) has priority over a security interest that is unperfected at 
        the time the collateral becomes commingled goods. 
           (2) If more than one security interest is perfected under 
        subsection (d), the security interests rank equally in 
        proportion to the value of the collateral at the time it became 
        commingled goods. 
           Sec. 57.  [336.9-337] [PRIORITY OF SECURITY INTERESTS IN 
        GOODS COVERED BY CERTIFICATE OF TITLE.] 
           If, while a security interest in goods is perfected by any 
        method under the law of another jurisdiction, this state issues 
        a certificate of title that does not show that the goods are 
        subject to the security interest or contain a statement that 
        they may be subject to security interests not shown on the 
        certificate: 
           (1) a buyer of the goods, other than a person in the 
        business of selling goods of that kind, takes free of the 
        security interest if the buyer gives value and receives delivery 
        of the goods after issuance of the certificate and without 
        knowledge of the security interest; and 
           (2) the security interest is subordinate to a conflicting 
        security interest in the goods that attaches, and is perfected 
        under section 336.9-311(b), after issuance of the certificate 
        and without the conflicting secured party's knowledge of the 
        security interest. 
           Sec. 58.  [336.9-338] [PRIORITY OF SECURITY INTEREST OR 
        AGRICULTURAL LIEN PERFECTED BY FILED FINANCING STATEMENT 
        PROVIDING CERTAIN INCORRECT INFORMATION.] 
           If a security interest or agricultural lien is perfected by 
        a filed financing statement providing information described in 
        section 336.9-516(b)(5) which is incorrect at the time the 
        financing statement is filed: 
           (1) the security interest or agricultural lien is 
        subordinate to a conflicting perfected security interest in the 
        collateral to the extent that the holder of the conflicting 
        security interest gives value in reasonable reliance upon the 
        incorrect information; and 
           (2) a purchaser, other than a secured party, of the 
        collateral takes free of the security interest or agricultural 
        lien to the extent that, in reasonable reliance upon the 
        incorrect information, the purchaser gives value and, in the 
        case of chattel paper, documents, goods, instruments, or a 
        security certificate, receives delivery of the collateral. 
           Sec. 59.  [336.9-339] [PRIORITY SUBJECT TO SUBORDINATION.] 
           This article does not preclude subordination by agreement 
        by a person entitled to priority. 
                           SUBPART 4.  RIGHTS OF BANK 
           Sec. 60.  [336.9-340] [EFFECTIVENESS OF RIGHT OF RECOUPMENT 
        OR SET-OFF AGAINST DEPOSIT ACCOUNT.] 
           (a) [EXERCISE OF RECOUPMENT OR SET-OFF.] Except as 
        otherwise provided in subsection (c), a bank with which a 
        deposit account is maintained may exercise any right of 
        recoupment or set-off against a secured party that holds a 
        security interest in the deposit account. 
           (b) [RECOUPMENT OR SET-OFF NOT AFFECTED BY SECURITY 
        INTEREST.] Except as otherwise provided in subsection (c), the 
        application of this article to a security interest in a deposit 
        account does not affect a right of recoupment or set-off of the 
        secured party as to a deposit account maintained with the 
        secured party. 
           (c) [WHEN SET-OFF INEFFECTIVE.] The exercise by a bank of a 
        set-off against a deposit account is ineffective against a 
        secured party that holds a security interest in the deposit 
        account which is perfected by control under section 
        336.9-104(a)(3), if the set-off is based on a claim against the 
        debtor. 
           Sec. 61.  [336.9-341] [BANK'S RIGHTS AND DUTIES WITH 
        RESPECT TO DEPOSIT ACCOUNT.] 
           Except as otherwise provided in section 336.9-340(c), and 
        unless the bank otherwise agrees in an authenticated record, a 
        bank's rights and duties with respect to a deposit account 
        maintained with the bank are not terminated, suspended, or 
        modified by: 
           (1) the creation, attachment, or perfection of a security 
        interest in the deposit account; 
           (2) the bank's knowledge of the security interest; or 
           (3) the bank's receipt of instructions from the secured 
        party. 
           Sec. 62.  [336.9-342] [BANK'S RIGHT TO REFUSE TO ENTER INTO 
        OR DISCLOSE EXISTENCE OF CONTROL AGREEMENT.] 
           This article does not require a bank to enter into an 
        agreement of the kind described in section 336.9-104(a)(2), even 
        if its customer so requests or directs.  A bank that has entered 
        into such an agreement is not required to confirm the existence 
        of the agreement to another person unless requested to do so by 
        its customer. 
                                     Part 4 
                            RIGHTS OF THIRD PARTIES 
           Sec. 63.  [336.9-401] [ALIENABILITY OF DEBTOR'S RIGHTS.] 
           (a) [OTHER LAW GOVERNS ALIENABILITY; EXCEPTIONS.] Except as 
        otherwise provided in subsection (b) and sections 336.9-406, 
        336.9-407, 336.9-408, and 336.9-409, whether a debtor's rights 
        in collateral may be voluntarily or involuntarily transferred is 
        governed by law other than this article. 
           (b) [AGREEMENT DOES NOT PREVENT TRANSFER.] An agreement 
        between the debtor and secured party which prohibits a transfer 
        of the debtor's rights in collateral or makes the transfer a 
        default does not prevent the transfer from taking effect. 
           Sec. 64.  [336.9-402] [SECURED PARTY NOT OBLIGATED ON 
        CONTRACT OF DEBTOR OR IN TORT.] 
           The existence of a security interest, agricultural lien, or 
        authority given to a debtor to dispose of or use collateral, 
        without more, does not subject a secured party to liability in 
        contract or tort for the debtor's acts or omissions. 
           Sec. 65.  [336.9-403] [AGREEMENT NOT TO ASSERT DEFENSES 
        AGAINST ASSIGNEE.] 
           (a) [VALUE.] In this section, "value" has the meaning 
        provided in section 336.3-303(a). 
           (b) [AGREEMENT NOT TO ASSERT CLAIM OR DEFENSE.] Except as 
        otherwise provided in this section, an agreement between an 
        account debtor and an assignor not to assert against an assignee 
        any claim or defense that the account debtor may have against 
        the assignor is enforceable by an assignee that takes an 
        assignment: 
           (1) for value; 
           (2) in good faith; 
           (3) without notice of a claim of a property or possessory 
        right to the property assigned; and 
           (4) without notice of a defense or claim in recoupment of 
        the type that may be asserted against a person entitled to 
        enforce a negotiable instrument under section 336.3-305(a). 
           (c) [WHEN SUBSECTION (B) NOT APPLICABLE.] Subsection (b) 
        does not apply to defenses of a type that may be asserted 
        against a holder in due course of a negotiable instrument under 
        section 336.3-305(b). 
           (d) [OMISSION OF REQUIRED STATEMENT IN CONSUMER 
        TRANSACTION.] In a consumer transaction, if a record evidences 
        the account debtor's obligation, law other than this article 
        requires that the record include a statement to the effect that 
        the rights of an assignee are subject to claims or defenses that 
        the account debtor could assert against the original obligee, 
        and the record does not include such a statement: 
           (1) the record has the same effect as if the record 
        included such a statement; and 
           (2) the account debtor may assert against an assignee those 
        claims and defenses that would have been available if the record 
        included such a statement. 
           (e) [RULE FOR INDIVIDUAL UNDER OTHER LAW.] This section is 
        subject to law other than this article which establishes a 
        different rule for an account debtor who is an individual and 
        who incurred the obligation primarily for personal, family, or 
        household purposes. 
           (f) [OTHER LAW NOT DISPLACED.] Except as otherwise provided 
        in subsection (d), this section does not displace law other than 
        this article which gives effect to an agreement by an account 
        debtor not to assert a claim or defense against an assignee. 
           Sec. 66.  [336.9-404] [RIGHTS ACQUIRED BY ASSIGNEE; CLAIMS 
        AND DEFENSES AGAINST ASSIGNEE.] 
           (a) [ASSIGNEE'S RIGHTS SUBJECT TO TERMS, CLAIMS, AND 
        DEFENSES; EXCEPTIONS.] Unless an account debtor has made an 
        enforceable agreement not to assert defenses or claims, and 
        subject to subsections (b) through (e), the rights of an 
        assignee are subject to: 
           (1) all terms of the agreement between the account debtor 
        and assignor and any defense or claim in recoupment arising from 
        the transaction that gave rise to the contract; and 
           (2) any other defense or claim of the account debtor 
        against the assignor which accrues before the account debtor 
        receives a notification of the assignment authenticated by the 
        assignor or the assignee. 
           (b) [ACCOUNT DEBTOR'S CLAIM REDUCES AMOUNT OWED TO 
        ASSIGNEE.] Subject to subsection (c) and except as otherwise 
        provided in subsection (d), the claim of an account debtor 
        against an assignor may be asserted against an assignee under 
        subsection (a) only to reduce the amount the account debtor owes.
           (c) [RULE FOR INDIVIDUAL UNDER OTHER LAW.] This section is 
        subject to law other than this article which establishes a 
        different rule for an account debtor who is an individual and 
        who incurred the obligation primarily for personal, family, or 
        household purposes. 
           (d) [OMISSION OF REQUIRED STATEMENT IN CONSUMER 
        TRANSACTION.] In a consumer transaction, if a record evidences 
        the account debtor's obligation, law other than this article 
        requires that the record include a statement to the effect that 
        the account debtor's recovery against an assignee with respect 
        to claims and defenses against the assignor may not exceed 
        amounts paid by the account debtor under the record, and the 
        record does not include such a statement, the extent to which a 
        claim of an account debtor against the assignor may be asserted 
        against an assignee is determined as if the record included such 
        a statement. 
           (e) [INAPPLICABILITY TO HEALTH-CARE-INSURANCE 
        RECEIVABLE.] This section does not apply to an assignment of a 
        health-care-insurance receivable. 
           Sec. 67.  [336.9-405] [MODIFICATION OF ASSIGNED CONTRACT.] 
           (a) [EFFECT OF MODIFICATION ON ASSIGNEE.] A modification of 
        or substitution for an assigned contract is effective against an 
        assignee if made in good faith.  The assignee acquires 
        corresponding rights under the modified or substituted 
        contract.  The assignment may provide that the modification or 
        substitution is a breach of contract by the assignor.  This 
        subsection is subject to subsections (b) through (d). 
           (b) [APPLICABILITY OF SUBSECTION (A).] Subsection (a) 
        applies to the extent that: 
           (1) the right to payment or a part thereof under an 
        assigned contract has not been fully earned by performance; or 
           (2) the right to payment or a part thereof has been fully 
        earned by performance and the account debtor has not received 
        notification of the assignment under section 336.9-406(a). 
           (c) [RULE FOR INDIVIDUAL UNDER OTHER LAW.] This section is 
        subject to law other than this article which establishes a 
        different rule for an account debtor who is an individual and 
        who incurred the obligation primarily for personal, family, or 
        household purposes. 
           (d) [INAPPLICABILITY TO HEALTH-CARE-INSURANCE 
        RECEIVABLE.] This section does not apply to an assignment of a 
        health-care-insurance receivable. 
           Sec. 68.  [336.9-406] [DISCHARGE OF ACCOUNT DEBTOR; 
        NOTIFICATION OF ASSIGNMENT; IDENTIFICATION AND PROOF OF 
        ASSIGNMENT; RESTRICTIONS ON ASSIGNMENT OF ACCOUNTS, CHATTEL 
        PAPER, PAYMENT INTANGIBLES, AND PROMISSORY NOTES INEFFECTIVE.] 
           (a) [DISCHARGE OF ACCOUNT DEBTOR; EFFECT OF NOTIFICATION.] 
        Subject to subsections (b) through (i), an account debtor on an 
        account, chattel paper, or a payment intangible may discharge 
        its obligation by paying the assignor until, but not after, the 
        account debtor receives a notification, authenticated by the 
        assignor or the assignee, that the amount due or to become due 
        has been assigned and that payment is to be made to the 
        assignee.  After receipt of the notification, the account debtor 
        may discharge its obligation by paying the assignee and may not 
        discharge the obligation by paying the assignor. 
           (b) [WHEN NOTIFICATION INEFFECTIVE.] Subject to subsection 
        (h), notification is ineffective under subsection (a): 
           (1) if it does not reasonably identify the rights assigned; 
           (2) to the extent that an agreement between an account 
        debtor and a seller of a payment intangible limits the account 
        debtor's duty to pay a person other than the seller and the 
        limitation is effective under law other than this article; or 
           (3) at the option of an account debtor, if the notification 
        notifies the account debtor to make less than the full amount of 
        any installment or other periodic payment to the assignee, even 
        if: 
           (A) only a portion of the account, chattel paper, or 
        payment intangible has been assigned to that assignee; 
           (B) a portion has been assigned to another assignee; or 
           (C) the account debtor knows that the assignment to that 
        assignee is limited. 
           (c) [PROOF OF ASSIGNMENT.] Subject to subsection (h), if 
        requested by the account debtor, an assignee shall seasonably 
        furnish reasonable proof that the assignment has been made.  
        Unless the assignee complies, the account debtor may discharge 
        its obligation by paying the assignor, even if the account 
        debtor has received a notification under subsection (a). 
           (d) [TERM RESTRICTING ASSIGNMENT GENERALLY 
        INEFFECTIVE.] Except as otherwise provided in subsection (e) and 
        sections 336.2A-303 and 336.9-407, and subject to subsection 
        (h), a term in an agreement between an account debtor and an 
        assignor or in a promissory note is ineffective to the extent 
        that it: 
           (1) prohibits, restricts, or requires the consent of the 
        account debtor or person obligated on the promissory note to the 
        assignment or transfer of, or the creation, attachment, 
        perfection, or enforcement of a security interest in, the 
        account, chattel paper, payment intangible, or promissory note; 
        or 
           (2) provides that the assignment or transfer or the 
        creation, attachment, perfection, or enforcement of the security 
        interest may give rise to a default, breach, right of 
        recoupment, claim, defense, termination, right of termination, 
        or remedy under the account, chattel paper, payment intangible, 
        or promissory note. 
           (e) [INAPPLICABILITY OF SUBSECTION (D) TO CERTAIN SALES.] 
        Subsection (d) does not apply to the sale of a payment 
        intangible or promissory note. 
           (f) [LEGAL RESTRICTIONS ON ASSIGNMENT GENERALLY 
        INEFFECTIVE.] Except as otherwise provided in sections 
        336.2A-303 and 336.9-407, and subject to subsections (h) and 
        (i), a rule of law, statute, or regulation, that prohibits, 
        restricts, or requires the consent of a government, governmental 
        body or official, or account debtor to the assignment or 
        transfer of, or creation of a security interest in, an account 
        or chattel paper is ineffective to the extent that the rule of 
        law, statute, or regulation: 
           (1) prohibits, restricts, or requires the consent of the 
        government, governmental body or official, or account debtor to 
        the assignment or transfer of, or the creation, attachment, 
        perfection, or enforcement of a security interest in, the 
        account or chattel paper; or 
           (2) provides that the assignment or transfer or the 
        creation, attachment, perfection, or enforcement of the security 
        interest may give rise to a default, breach, right of 
        recoupment, claim, defense, termination, right of termination, 
        or remedy under the account or chattel paper. 
           (g) [SUBSECTION (B)(3) NOT WAIVABLE.] Subject to subsection 
        (h), an account debtor may not waive or vary its option under 
        subsection (b)(3). 
           (h) [RULE FOR INDIVIDUAL UNDER OTHER LAW.] This section is 
        subject to law other than this article which establishes a 
        different rule for an account debtor who is an individual and 
        who incurred the obligation primarily for personal, family, or 
        household purposes. 
           (i) [INAPPLICABILITY TO HEALTH-CARE-INSURANCE 
        RECEIVABLE.] This section does not apply to an assignment of a 
        health-care-insurance receivable. 
           Sec. 69.  [336.9-407] [RESTRICTIONS ON CREATION OR 
        ENFORCEMENT OF SECURITY INTEREST IN LEASEHOLD INTEREST OR IN 
        LESSOR'S RESIDUAL INTEREST.] 
           (a) [TERM RESTRICTING ASSIGNMENT GENERALLY 
        INEFFECTIVE.] Except as otherwise provided in subsection (b), a 
        term in a lease agreement is ineffective to the extent that it: 
           (1) prohibits, restricts, or requires the consent of a 
        party to the lease to the assignment or transfer of, or the 
        creation, attachment, perfection, or enforcement of a security 
        interest in, an interest of a party under the lease contract or 
        in the lessor's residual interest in the goods; or 
           (2) provides that the assignment or transfer or the 
        creation, attachment, perfection, or enforcement of the security 
        interest may give rise to a default, breach, right of 
        recoupment, claim, defense, termination, right of termination, 
        or remedy under the lease. 
           (b) [EFFECTIVENESS OF CERTAIN TERMS.] Except as otherwise 
        provided in section 336.2A-303(7), a term described in 
        subsection (a)(2) is effective to the extent that there is: 
           (1) a transfer by the lessee of the lessee's right of 
        possession or use of the goods in violation of the term; or 
           (2) a delegation of a material performance of either party 
        to the lease contract in violation of the term. 
           (c) [SECURITY INTEREST NOT MATERIAL IMPAIRMENT.] The 
        creation, attachment, perfection, or enforcement of a security 
        interest in the lessor's interest under the lease contract or 
        the lessor's residual interest in the goods is not a transfer 
        that materially impairs the lessee's prospect of obtaining 
        return performance or materially changes the duty of or 
        materially increases the burden or risk imposed on the lessee 
        within the purview of section 336.2A-303(4) unless, and then 
        only to the extent that, enforcement actually results in a 
        delegation of material performance of the lessor.  Even in that 
        event, the creation, attachment, perfection, and enforcement of 
        the security interest remain effective. 
           Sec. 70.  [336.9-408] [RESTRICTIONS ON ASSIGNMENT OF 
        PROMISSORY NOTES, HEALTH-CARE-INSURANCE RECEIVABLES, AND CERTAIN 
        GENERAL INTANGIBLES INEFFECTIVE.] 
           (a) [TERM RESTRICTING ASSIGNMENT GENERALLY 
        INEFFECTIVE.] Except as otherwise provided in subsection (b), a 
        term in a promissory note or in an agreement between an account 
        debtor and a debtor which relates to a health-care-insurance 
        receivable or a general intangible, including a contract, 
        permit, license, or franchise, and which term prohibits, 
        restricts, or requires the consent of the person obligated on 
        the promissory note or the account debtor to, the assignment or 
        transfer of, or creation, attachment, or perfection of a 
        security interest in, the promissory note, health-care-insurance 
        receivable, or general intangible, is ineffective to the extent 
        that the term: 
           (1) would impair the creation, attachment, or perfection of 
        a security interest; or 
           (2) provides that the assignment or transfer or the 
        creation, attachment, or perfection of the security interest may 
        give rise to a default, breach, right of recoupment, claim, 
        defense, termination, right of termination, or remedy under the 
        promissory note, health-care-insurance receivable, or general 
        intangible. 
           (b) [APPLICABILITY OF SUBSECTION (A) TO SALES OF CERTAIN 
        RIGHTS TO PAYMENT.] Subsection (a) applies to a security 
        interest in a payment intangible or promissory note only if the 
        security interest arises out of a sale of the payment intangible 
        or promissory note. 
           (c) [LEGAL RESTRICTIONS ON ASSIGNMENT GENERALLY 
        INEFFECTIVE.] A rule of law, statute, or regulation, that 
        prohibits, restricts, or requires the consent of a government, 
        governmental body or official, person obligated on a promissory 
        note, or account debtor to the assignment or transfer of, or 
        creation of a security interest in, a promissory note, 
        health-care-insurance receivable, or general intangible, 
        including a contract, permit, license, or franchise between an 
        account debtor and a debtor, is ineffective to the extent that 
        the rule of law, statute, or regulation: 
           (1) would impair the creation, attachment, or perfection of 
        a security interest; or 
           (2) provides that the assignment or transfer or the 
        creation, attachment, or perfection of the security interest may 
        give rise to a default, breach, right of recoupment, claim, 
        defense, termination, right of termination, or remedy under the 
        promissory note, health-care-insurance receivable, or general 
        intangible. 
           (d) [LIMITATION ON INEFFECTIVENESS UNDER SUBSECTIONS (A) 
        AND (C).] To the extent that a term in a promissory note or in 
        an agreement between an account debtor and a debtor which 
        relates to a health-care-insurance receivable or general 
        intangible or a rule of law, statute, or regulation described in 
        subsection (c) would be effective under law other than this 
        article but is ineffective under subsection (a) or (c), the 
        creation, attachment, or perfection of a security interest in 
        the promissory note, health-care-insurance receivable, or 
        general intangible: 
           (1) is not enforceable against the person obligated on the 
        promissory note or the account debtor; 
           (2) does not impose a duty or obligation on the person 
        obligated on the promissory note or the account debtor; 
           (3) does not require the person obligated on the promissory 
        note or the account debtor to recognize the security interest, 
        pay or render performance to the secured party, or accept 
        payment or performance from the secured party; 
           (4) does not entitle the secured party to use or assign the 
        debtor's rights under the promissory note, health-care-insurance 
        receivable, or general intangible, including any related 
        information or materials furnished to the debtor in the 
        transaction giving rise to the promissory note, 
        health-care-insurance receivable, or general intangible; 
           (5) does not entitle the secured party to use, assign, 
        possess, or have access to any trade secrets or confidential 
        information of the person obligated on the promissory note or 
        the account debtor; and 
           (6) does not entitle the secured party to enforce the 
        security interest in the promissory note, health-care-insurance 
        receivable, or general intangible. 
           Sec. 71.  [336.9-409] [RESTRICTIONS ON ASSIGNMENT OF LETTER 
        OF CREDIT RIGHTS INEFFECTIVE.] 
           (a) [TERM OR LAW RESTRICTING ASSIGNMENT GENERALLY 
        INEFFECTIVE.] A term in a letter of credit or a rule of law, 
        statute, regulation, custom, or practice applicable to the 
        letter of credit which prohibits, restricts, or requires the 
        consent of an applicant, issuer, or nominated person to a 
        beneficiary's assignment of or creation of a security interest 
        in a letter of credit right is ineffective to the extent that 
        the term or rule of law, statute, regulation, custom, or 
        practice: 
           (1) would impair the creation, attachment, or perfection of 
        a security interest in the letter of credit right; or 
           (2) provides that the assignment or the creation, 
        attachment, or perfection of the security interest may give rise 
        to a default, breach, right of recoupment, claim, defense, 
        termination, right of termination, or remedy under the letter of 
        credit right. 
           (b) [LIMITATION ON INEFFECTIVENESS UNDER SUBSECTION 
        (A).] To the extent that a term in a letter of credit is 
        ineffective under subsection (a) but would be effective under 
        law other than this article or a custom or practice applicable 
        to the letter of credit, to the transfer of a right to draw or 
        otherwise demand performance under the letter of credit, or to 
        the assignment of a right to proceeds of the letter of credit, 
        the creation, attachment, or perfection of a security interest 
        in the letter of credit right: 
           (1) is not enforceable against the applicant, issuer, 
        nominated person, or transferee beneficiary; 
           (2) imposes no duties or obligations on the applicant, 
        issuer, nominated person, or transferee beneficiary; and 
           (3) does not require the applicant, issuer, nominated 
        person, or transferee beneficiary to recognize the security 
        interest, pay or render performance to the secured party, or 
        accept payment or other performance from the secured party. 
                                     Part 5 
                                     FILING 
             SUBPART 1.  FILING OFFICE; CONTENTS AND EFFECTIVENESS 
                             OF FINANCING STATEMENT 
           Sec. 72.  [336.9-501] [FILING OFFICE.] 
           (a) [FILING OFFICES.] Except as otherwise provided in 
        subsection (b), if the local law of this state governs 
        perfection of a security interest or agricultural lien, the 
        office in which to file a financing statement to perfect the 
        security interest or agricultural lien is: 
           (1) the office designated for the filing or recording of a 
        record of a mortgage on the related real property, if: 
           (A) the collateral is as-extracted collateral or timber to 
        be cut; or 
           (B) the financing statement is filed as a fixture filing 
        and the collateral is goods that are or are to become fixtures; 
        or 
           (2) the central filing system operated by the office of the 
        secretary of state, in all other cases, including a case in 
        which the collateral is goods that are or are to become fixtures 
        and the financing statement is not filed as a fixture filing. 
           (b) [FILING OFFICE FOR TRANSMITTING UTILITIES.] The office 
        in which to file a financing statement to perfect a security 
        interest in collateral, including fixtures, of a transmitting 
        utility is the central filing system operated by the office of 
        the secretary of state.  The financing statement also 
        constitutes a fixture filing as to the collateral indicated in 
        the financing statement which is or is to become fixtures. 
           Sec. 73.  [336.9-502] [CONTENTS OF FINANCING STATEMENT; 
        RECORD OF MORTGAGE AS FINANCING STATEMENT; TIME OF FILING 
        FINANCING STATEMENT.] 
           (a) [SUFFICIENCY OF FINANCING STATEMENT.] Subject to 
        subsection (b), a financing statement is sufficient only if it: 
           (1) provides the name of the debtor; 
           (2) provides the name of the secured party or a 
        representative of the secured party; and 
           (3) indicates the collateral covered by the financing 
        statement. 
           (b) [REAL PROPERTY-RELATED FINANCING STATEMENTS.] Except as 
        otherwise provided in section 336.9-501(b), to be sufficient, a 
        financing statement that covers as-extracted collateral or 
        timber to be cut, or which is filed as a fixture filing and 
        covers goods that are or are to become fixtures, must satisfy 
        subsection (a) and also: 
           (1) indicate that it covers this type of collateral; 
           (2) indicate that it is to be filed for record in the real 
        property records; 
           (3) provide a description of the real property to which the 
        collateral is related sufficient to give constructive notice of 
        a mortgage under the law of this state if the description were 
        contained in a record of the mortgage of the real property; and 
           (4) if the debtor does not have an interest of record in 
        the real property, provide the name of a record owner. 
           (c) [RECORD OF MORTGAGE AS FINANCING STATEMENT.] A record 
        of a mortgage is effective, from the date of recording, as a 
        financing statement filed as a fixture filing or as a financing 
        statement covering as-extracted collateral or timber to be cut 
        only if: 
           (1) the record indicates the goods or accounts that it 
        covers; 
           (2) the goods are or are to become fixtures related to the 
        real property described in the record or the collateral is 
        related to the real property described in the record and is 
        as-extracted collateral or timber to be cut; 
           (3) the record satisfies the requirements for a financing 
        statement in this section other than an indication that it is to 
        be filed in the real property records; and 
           (4) the record is recorded in the office of the county 
        recorder or registrar of titles in the county where the real 
        property is located. 
           (d) [FILING BEFORE SECURITY AGREEMENT OR ATTACHMENT.] A 
        financing statement may be filed before a security agreement is 
        made or a security interest otherwise attaches. 
           Sec. 74.  [336.9-503] [NAME OF DEBTOR AND SECURED PARTY.] 
           (a) [SUFFICIENCY OF DEBTOR'S NAME.] A financing statement 
        sufficiently provides the name of the debtor: 
           (1) if the debtor is a registered organization, only if the 
        financing statement provides the name of the debtor indicated on 
        the public record of the debtor's jurisdiction of organization 
        which shows the debtor to have been organized; 
           (2) if the debtor is a decedent's estate, only if the 
        financing statement provides the name of the decedent and 
        indicates that the debtor is an estate; 
           (3) if the debtor is a trust or a trustee acting with 
        respect to property held in trust, only if the financing 
        statement: 
           (A) provides the name specified for the trust in its 
        organic documents or, if no name is specified, provides the name 
        of the settlor and additional information sufficient to 
        distinguish the debtor from other trusts having one or more of 
        the same settlors; and 
           (B) indicates, in the debtor's name or otherwise, that the 
        debtor is a trust or is a trustee acting with respect to 
        property held in trust; and 
           (4) in other cases: 
           (A) if the debtor has a name, only if it provides the 
        individual or organizational name of the debtor; and 
           (B) if the debtor does not have a name, only if it provides 
        the names of the partners, members, associates, or other persons 
        comprising the debtor. 
           (b) [ADDITIONAL DEBTOR-RELATED INFORMATION.] A financing 
        statement that provides the name of the debtor in accordance 
        with subsection (a) is not rendered ineffective by the absence 
        of: 
           (1) a trade name or other name of the debtor; or 
           (2) unless required under subsection (a)(4)(B), names of 
        partners, members, associates, or other persons comprising the 
        debtor. 
           (c) [DEBTOR'S TRADE NAME INSUFFICIENT.] A financing 
        statement that provides only the debtor's trade name does not 
        sufficiently provide the name of the debtor. 
           (d) [REPRESENTATIVE CAPACITY.] Failure to indicate the 
        representative capacity of a secured party or representative of 
        a secured party does not affect the sufficiency of a financing 
        statement. 
           (e) [MULTIPLE DEBTORS AND SECURED PARTIES.] A financing 
        statement may provide the name of more than one debtor and the 
        name of more than one secured party. 
           Sec. 75.  [336.9-504] [INDICATION OF COLLATERAL.] 
           A financing statement sufficiently indicates the collateral 
        that it covers if the financing statement provides: 
           (1) a description of the collateral pursuant to section 
        336.9-108; or 
           (2) an indication that the financing statement covers all 
        assets or all personal property. 
           Sec. 76.  [336.9-505] [FILING AND COMPLIANCE WITH OTHER 
        STATUTES AND TREATIES FOR CONSIGNMENTS, LEASES, OTHER BAILMENTS, 
        AND OTHER TRANSACTIONS.] 
           (a) [USE OF TERMS OTHER THAN DEBTOR AND SECURED PARTY.] A 
        consignor, lessor, or other bailor of goods, a licensor, or a 
        buyer of a payment intangible or promissory note may file a 
        financing statement, or may comply with a statute or treaty 
        described in section 336.9-311(a), using the terms "consignor," 
        "consignee," "lessor," "lessee," "bailor," "bailee," "licensor," 
        "licensee," "owner," "registered owner," "buyer," "seller," or 
        words of similar import, instead of the terms "secured party" 
        and "debtor." 
           (b) [EFFECT OF FINANCING STATEMENT UNDER SUBSECTION 
        (A).] This part applies to the filing of a financing statement 
        under subsection (a) and, as appropriate, to compliance that is 
        equivalent to filing a financing statement under section 
        336.9-311(b), but the filing or compliance is not of itself a 
        factor in determining whether the collateral secures an 
        obligation.  If it is determined for another reason that the 
        collateral secures an obligation, a security interest held by 
        the consignor, lessor, bailor, licensor, owner, or buyer which 
        attaches to the collateral is perfected by the filing or 
        compliance. 
           Sec. 77.  [336.9-506] [EFFECT OF ERRORS OR OMISSIONS.] 
           (a) [MINOR ERRORS AND OMISSIONS.] A financing statement 
        substantially satisfying the requirements of this part is 
        effective, even if it has minor errors or omissions, unless the 
        errors or omissions make the financing statement seriously 
        misleading. 
           (b) [FINANCING STATEMENT SERIOUSLY MISLEADING.] Except as 
        otherwise provided in subsection (c), a financing statement that 
        fails sufficiently to provide the name of the debtor in 
        accordance with section 336.9-503(a) is seriously misleading. 
           (c) [FINANCING STATEMENT NOT SERIOUSLY MISLEADING.] If a 
        search of the records of the filing office under the debtor's 
        correct name, using the filing office's standard search logic, 
        if any, would disclose a financing statement that fails 
        sufficiently to provide the name of the debtor in accordance 
        with section 336.9-503(a), the name provided does not make the 
        financing statement seriously misleading. 
           (d) [DEBTOR'S CORRECT NAME.] For purposes of section 
        336.9-508(b), the "debtor's correct name" in subsection (c) 
        means the correct name of the new debtor. 
           Sec. 78.  [336.9-507] [EFFECT OF CERTAIN EVENTS ON 
        EFFECTIVENESS OF FINANCING STATEMENT.] 
           (a) [DISPOSITION.] A filed financing statement remains 
        effective with respect to collateral that is sold, exchanged, 
        leased, licensed, or otherwise disposed of and in which a 
        security interest or agricultural lien continues, even if the 
        secured party knows of or consents to the disposition. 
           (b) [INFORMATION BECOMING SERIOUSLY MISLEADING.] Except as 
        otherwise provided in subsection (c) and section 336.9-508, a 
        financing statement is not rendered ineffective if, after the 
        financing statement is filed, the information provided in the 
        financing statement becomes seriously misleading under section 
        336.9-506. 
           (c) [CHANGE IN DEBTOR'S NAME.] If a debtor so changes its 
        name that a filed financing statement becomes seriously 
        misleading under section 336.9-506: 
           (1) the financing statement is effective to perfect a 
        security interest in collateral acquired by the debtor before, 
        or within four months after, the change; and 
           (2) the financing statement is not effective to perfect a 
        security interest in collateral acquired by the debtor more than 
        four months after the change, unless an amendment to the 
        financing statement which renders the financing statement not 
        seriously misleading is filed within four months after the 
        change. 
           Sec. 79.  [336.9-508] [EFFECTIVENESS OF FINANCING STATEMENT 
        IF NEW DEBTOR BECOMES BOUND BY SECURITY AGREEMENT.] 
           (a) [FINANCING STATEMENT NAMING ORIGINAL DEBTOR.] Except as 
        otherwise provided in this section, a filed financing statement 
        naming an original debtor is effective to perfect a security 
        interest in collateral in which a new debtor has or acquires 
        rights to the extent that the financing statement would have 
        been effective had the original debtor acquired rights in the 
        collateral. 
           (b) [FINANCING STATEMENT BECOMING SERIOUSLY MISLEADING.] If 
        the difference between the name of the original debtor and that 
        of the new debtor causes a filed financing statement that is 
        effective under subsection (a) to be seriously misleading under 
        section 336.9-506: 
           (1) the financing statement is effective to perfect a 
        security interest in collateral acquired by the new debtor 
        before, and within four months after, the new debtor becomes 
        bound under section 336.9-203(d); and 
           (2) the financing statement is not effective to perfect a 
        security interest in collateral acquired by the new debtor more 
        than four months after the new debtor becomes bound under 
        section 336.9-203(d) unless an initial financing statement 
        providing the name of the new debtor is filed before the 
        expiration of that time. 
           (c) [WHEN SECTION NOT APPLICABLE.] This section does not 
        apply to collateral as to which a filed financing statement 
        remains effective against the new debtor under section 
        336.9-507(a). 
           Sec. 80.  [336.9-509] [PERSONS ENTITLED TO FILE A RECORD.] 
           (a) [PERSON ENTITLED TO FILE RECORD.] A person may file an 
        initial financing statement, amendment that adds collateral 
        covered by a financing statement, or amendment that adds a 
        debtor to a financing statement only if: 
           (1) the debtor authorizes the filing in an authenticated 
        record or pursuant to subsection (b) or (c); or 
           (2) the person holds an agricultural lien that has become 
        effective at the time of filing and the financing statement 
        covers only collateral in which the person holds an agricultural 
        lien. 
           (b) [SECURITY AGREEMENT AS AUTHORIZATION.] By 
        authenticating or becoming bound as debtor by a security 
        agreement, a debtor or new debtor authorizes the filing of an 
        initial financing statement, and an amendment, covering: 
           (1) the collateral described in the security agreement; and 
           (2) property that becomes collateral under section 
        336.9-315(a)(2), whether or not the security agreement expressly 
        covers proceeds. 
           (c) [PERSON ENTITLED TO FILE CERTAIN AMENDMENTS.] A person 
        may file an amendment other than an amendment that adds 
        collateral covered by a financing statement or an amendment that 
        adds a debtor to a financing statement only if: 
           (1) the secured party of record authorizes the filing; or 
           (2) the amendment is a termination statement for a 
        financing statement as to which the secured party of record has 
        failed to file or send a termination statement as required by 
        section 336.9-513(a) or (c), the debtor authorizes the filing, 
        and the termination statement indicates that the debtor 
        authorized it to be filed. 
           (d) [MULTIPLE SECURED PARTIES OF RECORD.] If there is more 
        than one secured party of record for a financing statement, each 
        secured party of record may authorize the filing of an amendment 
        under subsection (c). 
           Sec. 81.  [336.9-510] [EFFECTIVENESS OF FILED RECORD.] 
           (a) [FILED RECORD EFFECTIVE IF AUTHORIZED.] A filed record 
        is effective only to the extent that it was filed by a person 
        that may file it under section 336.9-509. 
           (b) [AUTHORIZATION BY ONE SECURED PARTY OF RECORD.] A 
        record authorized by one secured party of record does not affect 
        the financing statement with respect to another secured party of 
        record. 
           (c) [CONTINUATION STATEMENT NOT TIMELY FILED.] A 
        continuation statement that is not filed within the six-month 
        period prescribed by section 336.9-515(d) is ineffective. 
           Sec. 82.  [336.9-511] [SECURED PARTY OF RECORD.] 
           (a) [SECURED PARTY OF RECORD.] A secured party of record 
        with respect to a financing statement is a person whose name is 
        provided as the name of the secured party or a representative of 
        the secured party in an initial financing statement that has 
        been filed.  If an initial financing statement is filed under 
        section 336.9-514(a), the assignee named in the initial 
        financing statement is the secured party of record with respect 
        to the financing statement. 
           (b) [AMENDMENT NAMING SECURED PARTY OF RECORD.] If an 
        amendment of a financing statement which provides the name of a 
        person as a secured party or a representative of a secured party 
        is filed, the person named in the amendment is a secured party 
        of record.  If an amendment is filed under section 336.9-514(b), 
        the assignee named in the amendment is a secured party of record.
           (c) [AMENDMENT DELETING SECURED PARTY OF RECORD.] A person 
        remains a secured party of record until the filing of an 
        amendment of the financing statement which deletes the person. 
           Sec. 83.  [336.9-512] [AMENDMENT OF FINANCING STATEMENT.] 
           (a) [AMENDMENT OF INFORMATION IN FINANCING 
        STATEMENT.] Subject to section 336.9-509, a person may add or 
        delete collateral covered by, continue or terminate the 
        effectiveness of, or, subject to subsection (e), otherwise amend 
        the information provided in, a financing statement by filing an 
        amendment that: 
           (1) identifies, by its file number, the initial financing 
        statement to which the amendment relates; and 
           (2) if the amendment relates to an initial financing 
        statement filed or recorded in a filing office described in 
        section 336.9-501(a)(1), provides the information specified in 
        section 336.9-502(b). 
           (b) [PERIOD OF EFFECTIVENESS NOT AFFECTED.] Except as 
        otherwise provided in section 336.9-515, the filing of an 
        amendment does not extend the period of effectiveness of the 
        financing statement. 
           (c) [EFFECTIVENESS OF AMENDMENT ADDING COLLATERAL.] A 
        financing statement that is amended by an amendment that adds 
        collateral is effective as to the added collateral only from the 
        date of the filing of the amendment. 
           (d) [EFFECTIVENESS OF AMENDMENT ADDING DEBTOR.] A financing 
        statement that is amended by an amendment that adds a debtor is 
        effective as to the added debtor only from the date of the 
        filing of the amendment. 
           (e) [CERTAIN AMENDMENTS INEFFECTIVE.] An amendment is 
        ineffective to the extent it: 
           (1) purports to delete all debtors and fails to provide the 
        name of a debtor to be covered by the financing statement; or 
           (2) purports to delete all secured parties of record and 
        fails to provide the name of a new secured party of record. 
           Sec. 84.  [336.9-513] [TERMINATION STATEMENT.] 
           (a) [CONSUMER GOODS.] A secured party shall cause the 
        secured party of record for a financing statement to file a 
        termination statement for the financing statement if the 
        financing statement covers consumer goods and: 
           (1) there is no obligation secured by the collateral 
        covered by the financing statement and no commitment to make an 
        advance, incur an obligation, or otherwise give value; or 
           (2) the debtor did not authorize the filing of the initial 
        financing statement. 
           (b) [TIME FOR COMPLIANCE WITH SUBSECTION (A).] To comply 
        with subsection (a), a secured party shall cause the secured 
        party of record to file the termination statement: 
           (1) within one month after there is no obligation secured 
        by the collateral covered by the financing statement and no 
        commitment to make an advance, incur an obligation, or otherwise 
        give value; or 
           (2) if earlier, within 20 days after the secured party 
        receives an authenticated demand from a debtor. 
           (c) [OTHER COLLATERAL.] In cases not governed by subsection 
        (a), within 20 days after a secured party receives an 
        authenticated demand from a debtor, the secured party shall 
        cause the secured party of record for a financing statement to 
        send to the debtor a termination statement for the financing 
        statement or file the termination statement in the filing office 
        if: 
           (1) except in the case of a financing statement covering 
        accounts or chattel paper that has been sold or goods that are 
        the subject of a consignment, there is no obligation secured by 
        the collateral covered by the financing statement and no 
        commitment to make an advance, incur an obligation, or otherwise 
        give value; 
           (2) the financing statement covers accounts or chattel 
        paper that has been sold but as to which the account debtor or 
        other person obligated has discharged its obligation; 
           (3) the financing statement covers goods that were the 
        subject of a consignment to the debtor but are not in the 
        debtor's possession; or 
           (4) the debtor did not authorize the filing of the initial 
        financing statement. 
           (d) [EFFECT OF FILING TERMINATION STATEMENT.] Except as 
        otherwise provided in section 336.9-510, upon the filing of a 
        termination statement with the filing office, the financing 
        statement to which the termination statement relates ceases to 
        be effective.  Except as otherwise provided in section 
        336.9-510, for purposes of sections 336.9-519(g), 336.9-522(a), 
        and 336.9-523(c), the filing with the filing office of a 
        termination statement relating to a filing statement that 
        indicates that the debtor is a transmitting utility also causes 
        the effectiveness of the financing statement to lapse. 
           Sec. 85.  [336.9-514] [ASSIGNMENT OF POWERS OF SECURED 
        PARTY OF RECORD.] 
           (a) [ASSIGNMENT REFLECTED ON INITIAL FINANCING 
        STATEMENT.] Except as otherwise provided in subsection (c), an 
        initial financing statement may reflect an assignment of all of 
        the secured party's power to authorize an amendment to the 
        financing statement by providing the name and mailing address of 
        the assignee as the name and address of the secured party. 
           (b) [ASSIGNMENT OF FILED FINANCING STATEMENT.] Except as 
        otherwise provided in subsection (c), a secured party of record 
        may assign of record all or part of its power to authorize an 
        amendment to a financing statement by filing in the filing 
        office an amendment of the financing statement which: 
           (1) identifies, by its file number, the initial financing 
        statement to which it relates; 
           (2) provides the name of the assignor; and 
           (3) provides the name and mailing address of the assignee. 
           (c) [ASSIGNMENT OF RECORD OF MORTGAGE.] An assignment of 
        record of a security interest in a fixture covered by a record 
        of a mortgage which is effective as a financing statement filed 
        as a fixture filing under section 336.9-502(c) may be made only 
        by an assignment of record of the mortgage in the manner 
        provided by law of this state other than the Uniform Commercial 
        Code. 
           Sec. 86.  [336.9-515] [DURATION AND EFFECTIVENESS OF 
        FINANCING STATEMENT; EFFECT OF LAPSED FINANCING STATEMENT.] 
           (a) [FIVE-YEAR EFFECTIVENESS.] Except as otherwise provided 
        in subsections (b), (e), (f), and (g), a filed financing 
        statement is effective for a period of five years after the date 
        of filing. 
           (b) [PUBLIC FINANCE OR MANUFACTURED HOME 
        TRANSACTION.] Except as otherwise provided in subsections (e), 
        (f), and (g), an initial financing statement filed in connection 
        with a public finance transaction or manufactured home 
        transaction is effective for a period of 30 years after the date 
        of filing if it indicates that it is filed in connection with a 
        public finance transaction or manufactured home transaction. 
           (c) [LAPSE AND CONTINUATION OF FINANCING STATEMENT.] The 
        effectiveness of a filed financing statement lapses on the 
        expiration of the period of its effectiveness unless before the 
        lapse a continuation statement is filed pursuant to subsection 
        (d).  Upon lapse, a financing statement ceases to be effective 
        and any security interest or agricultural lien that was 
        perfected by the financing statement becomes unperfected, unless 
        the security interest is perfected otherwise.  If the security 
        interest or agricultural lien becomes unperfected upon lapse, it 
        is deemed never to have been perfected as against a purchaser of 
        the collateral for value. 
           (d) [WHEN CONTINUATION STATEMENT MAY BE FILED.] A 
        continuation statement may be filed only within six months 
        before the expiration of the five-year period specified in 
        subsection (a) or the 30-year period specified in subsection 
        (b), whichever is applicable. 
           (e) [EFFECT OF FILING CONTINUATION STATEMENT.] Except as 
        otherwise provided in section 336.9-510, upon timely filing of a 
        continuation statement, the effectiveness of the initial 
        financing statement continues for a period of five years 
        commencing on the day on which the financing statement would 
        have become ineffective in the absence of the filing.  Upon the 
        expiration of the five-year period, the financing statement 
        lapses in the same manner as provided in subsection (c), unless, 
        before the lapse, another continuation statement is filed 
        pursuant to subsection (d).  Succeeding continuation statements 
        may be filed in the same manner to continue the effectiveness of 
        the initial financing statement. 
           (f) [TRANSMITTING UTILITY FINANCING STATEMENT.] If a debtor 
        is a transmitting utility and a filed financing statement so 
        indicates, the financing statement is effective until a 
        termination statement is filed. 
           (g) [RECORD OF MORTGAGE AS FINANCING STATEMENT.] A record 
        of a mortgage that is effective as a financing statement filed 
        as a fixture filing under section 336.9-502(c) remains effective 
        as a financing statement filed as a fixture filing until the 
        mortgage is released or satisfied of record or its effectiveness 
        otherwise terminates as to the real property. 
           Sec. 87.  [336.9-516] [WHAT CONSTITUTES FILING; 
        EFFECTIVENESS OF FILING.] 
           (a) [WHAT CONSTITUTES FILING.] Except as otherwise provided 
        in subsection (b), communication of a record to a filing office 
        and tender of the filing fee or acceptance of the record by the 
        filing office constitutes filing. 
           (b) [REFUSAL TO ACCEPT RECORD; FILING DOES NOT 
        OCCUR.] Filing does not occur with respect to a record that a 
        filing office refuses to accept because: 
           (1) the record is not communicated by a method or medium of 
        communication authorized by the filing office; 
           (2) an amount equal to or greater than the applicable 
        filing fee is not tendered; 
           (3) the filing office is unable to index the record because:
           (A) in the case of an initial financing statement, the 
        record does not provide a name for the debtor; 
           (B) in the case of an amendment or correction statement, 
        the record: 
           (i) does not identify the initial financing statement as 
        required by section 336.9-512 or 336.9-518, as applicable; or 
           (ii) identifies an initial financing statement whose 
        effectiveness has lapsed under section 336.9-515; 
           (C) in the case of an initial financing statement that 
        provides the name of a debtor identified as an individual or an 
        amendment that provides a name of a debtor identified as an 
        individual which was not previously provided in the financing 
        statement to which the record relates, the record does not 
        identify the debtor's last name; or 
           (D) in the case of a record filed or recorded in the filing 
        office described in section 336.9-501(a)(1), the record does not 
        provide a sufficient description of the real property to which 
        it relates; 
           (4) in the case of an initial financing statement or an 
        amendment that adds a secured party of record, the record does 
        not provide a name and mailing address for the secured party of 
        record; 
           (5) in the case of an initial financing statement or an 
        amendment that provides a name of a debtor which was not 
        previously provided in the financing statement to which the 
        amendment relates, the record does not: 
           (A) provide a mailing address for the debtor; 
           (B) indicate whether the debtor is an individual or an 
        organization; or 
           (C) if the financing statement indicates that the debtor is 
        an organization, provide: 
           (i) a type of organization for the debtor; 
           (ii) a jurisdiction of organization for the debtor; or 
           (iii) an organizational identification number for the 
        debtor or indicate that the debtor has none; 
           (6) in the case of an assignment reflected in an initial 
        financing statement under section 336.9-514(a) or an amendment 
        filed under section 336.9-514(b), the record does not provide a 
        name and mailing address for the assignee; or 
           (7) in the case of a continuation statement, the record is 
        not filed within the six-month period prescribed by section 
        336.9-515(d). 
           (c) [RULES APPLICABLE TO SUBSECTION (B).] For purposes of 
        subsection (b): 
           (1) a record does not provide information if the filing 
        office is unable to read or decipher the information; and 
           (2) a record that does not indicate that it is an amendment 
        or identify an initial financing statement to which it relates, 
        as required by section 336.9-512, 336.9-514, or 336.9-518, is an 
        initial financing statement. 
           (d) [REFUSAL TO ACCEPT RECORD; RECORD EFFECTIVE AS FILED 
        RECORD.] A record that is communicated to the filing office with 
        tender of the filing fee, but which the filing office refuses to 
        accept for a reason other than one set forth in subsection (b), 
        is effective as a filed record except as against a purchaser of 
        the collateral which gives value in reasonable reliance upon the 
        absence of the record from the files. 
           Sec. 88.  [336.9-517] [EFFECT OF INDEXING ERRORS.] 
           The failure of the filing office to index a record 
        correctly does not affect the effectiveness of the filed record. 
           Sec. 89.  [336.9-518] [CLAIM CONCERNING INACCURATE OR 
        WRONGFULLY FILED RECORD.] 
           (a) [CORRECTION STATEMENT.] A person may file in the filing 
        office a correction statement with respect to a record indexed 
        there under the person's name if the person believes that the 
        record is inaccurate or was wrongfully filed. 
           (b) [SUFFICIENCY OF CORRECTION STATEMENT.] A correction 
        statement must: 
           (1) identify the record to which it relates by the file 
        number assigned to the initial financing statement to which the 
        record relates; 
           (2) indicate that it is a correction statement; and 
           (3) provide the basis for the person's belief that the 
        record is inaccurate and indicate the manner in which the person 
        believes the record should be amended to cure any inaccuracy or 
        provide the basis for the person's belief that the record was 
        wrongfully filed. 
           (c) [RECORD NOT AFFECTED BY CORRECTION STATEMENT.] The 
        filing of a correction statement does not affect the 
        effectiveness of an initial financing statement or other filed 
        record. 
               SUBPART 2.  DUTIES AND OPERATION OF FILING OFFICE 
           Sec. 90.  [336.9-519] [NUMBERING, MAINTAINING, AND INDEXING 
        RECORDS; COMMUNICATING INFORMATION PROVIDED IN RECORDS.] 
           (a) [FILING OFFICE DUTIES.] For each record filed in a 
        filing office, the filing office shall: 
           (1) assign a unique number to the filed record; 
           (2) create a record that bears the number assigned to the 
        filed record and the date and time of filing; 
           (3) maintain the filed record for public inspection; and 
           (4) index the filed record in accordance with subsections 
        (c), (d), and (e). 
           (b) [FILE NUMBER.] A file number assigned after July 1, 
        2001, must include a digit that: 
           (1) is mathematically derived from or related to the other 
        digits of the file number; and 
           (2) enables the filing office to detect whether a number 
        communicated as the file number includes a single-digit or 
        transpositional error. 
           (c) [INDEXING:  GENERAL.] Except as otherwise provided in 
        subsections (d) and (e), the filing office shall: 
           (1) index an initial financing statement according to the 
        name of the debtor and index all filed records relating to the 
        initial financing statement in a manner that associates with one 
        another an initial financing statement and all filed records 
        relating to the initial financing statement; and 
           (2) index a record that provides a name of a debtor which 
        was not previously provided in the financing statement to which 
        the record relates also according to the name that was not 
        previously provided. 
           (d) [INDEXING:  REAL PROPERTY-RELATED FINANCING STATEMENT.] 
        If a financing statement is filed as a fixture filing or covers 
        as-extracted collateral or timber to be cut, it must be filed 
        for record and the filing office shall index it: 
           (1) under the names of the debtor and of each owner of 
        record shown on the financing statement as if they were the 
        mortgagors under a mortgage of the real property described; and 
           (2) to the extent that the law of this state provides for 
        indexing of records of mortgages under the name of the 
        mortgagee, under the name of the secured party as if the secured 
        party were the mortgagee thereunder, or, if indexing is by 
        description, as if the financing statement were a record of a 
        mortgage of the real property described. 
           (e) [INDEXING:  REAL PROPERTY-RELATED ASSIGNMENT.] If a 
        financing statement is filed as a fixture filing or covers 
        as-extracted collateral or timber to be cut, the filing office 
        shall index an assignment filed under section 336.9-514(a) or an 
        amendment filed under section 336.9-514(b): 
           (1) under the name of the assignor as grantor; and 
           (2) to the extent that the law of this state provides for 
        indexing a record of the assignment of a mortgage under the name 
        of the assignee, under the name of the assignee. 
           (f) [RETRIEVAL AND ASSOCIATION CAPABILITY.] The filing 
        office shall maintain a capability: 
           (1) to retrieve a record by the name of the debtor and by 
        the file number assigned to the initial financing statement to 
        which the record relates; and 
           (2) to associate and retrieve with one another an initial 
        financing statement and each filed record relating to the 
        initial financing statement. 
           (g) [REMOVAL OF DEBTOR'S NAME.] The filing office may not 
        remove a debtor's name from the index until one year after the 
        effectiveness of a financing statement naming the debtor lapses 
        under section 336.9-515 with respect to all secured parties of 
        record. 
           (h) [TIMELINESS OF FILING OFFICE PERFORMANCE.] The filing 
        office shall perform the acts required by subsections (a) 
        through (e) at the time and in the manner prescribed by filing 
        office rule, but not later than two business days after the 
        filing office receives the record in question. 
           (i) [INAPPLICABILITY TO REAL PROPERTY-RELATED FILING 
        OFFICE.] Subsections (b) and (h) do not apply to a filing office 
        described in section 336.9-501(a)(1). 
           Sec. 91.  [336.9-520] [ACCEPTANCE AND REFUSAL TO ACCEPT 
        RECORD.] 
           (a) [MANDATORY REFUSAL TO ACCEPT RECORD.] A filing office 
        shall refuse to accept a record for filing for a reason set 
        forth in section 336.9-516(b) and may refuse to accept a record 
        for filing only for a reason set forth in section 336.9-516(b). 
           (b) [COMMUNICATION CONCERNING REFUSAL.] If a filing office 
        refuses to accept a record for filing, it shall communicate to 
        the person that presented the record the fact of and reason for 
        the refusal and the date and time the record would have been 
        filed had the filing office accepted it.  The communication must 
        be made at the time and in the manner prescribed by filing 
        office rule, but in no event more than two business days after 
        the filing office receives the record. 
           (c) [WHEN FILED FINANCING STATEMENT EFFECTIVE.] A filed 
        financing statement satisfying section 336.9-502(a) and (b) is 
        effective, even if the filing office is required to refuse to 
        accept it for filing under subsection (a).  However, section 
        336.9-338 applies to a filed financing statement providing 
        information described in section 336.9-516(b)(5) which is 
        incorrect at the time the financing statement is filed. 
           (d) [SEPARATE APPLICATION TO MULTIPLE DEBTORS.] If a record 
        communicated to a filing office provides information that 
        relates to more than one debtor, this part applies as to each 
        debtor separately. 
           Sec. 92.  [336.9-521] [UNIFORM FORM OF WRITTEN FINANCING 
        STATEMENT AND AMENDMENT.] 
           (a) [INITIAL FINANCING STATEMENT FORM.] A filing office 
        that accepts written records may not refuse to accept a written 
        initial financing statement in the form and format adopted by 
        the National Conference of Commissioners on Uniform State Laws, 
        except for a reason set forth in section 336.9-516(b). 
           (b) [AMENDMENT FORM.] A filing office that accepts written 
        records may not refuse to accept a written record in the form 
        and format adopted by the National Conference of Commissioners 
        on Uniform State Laws, except for a reason set forth in section 
        336.9-516(b). 
           Sec. 93.  [336.9-522] [MAINTENANCE AND DESTRUCTION OF 
        RECORDS.] 
           (a) [POST-LAPSE MAINTENANCE AND RETRIEVAL OF 
        INFORMATION.] The filing office shall maintain a record of the 
        information provided in a filed financing statement for at least 
        one year after the effectiveness of the financing statement has 
        lapsed under section 336.9-515 with respect to all secured 
        parties of record.  The record must be retrievable by using the 
        name of the debtor and by using the file number assigned to the 
        initial financing statement to which the record relates. 
           (b) [DESTRUCTION OF WRITTEN RECORDS.] Except to the extent 
        that a statute governing disposition of public records provides 
        otherwise, the filing office immediately may destroy any written 
        record evidencing a financing statement.  However, if the filing 
        office destroys a written record, it shall maintain another 
        record of the financing statement which complies with subsection 
        (a). 
           Sec. 94.  [336.9-523] [INFORMATION FROM FILING OFFICE; SALE 
        OR LICENSE OF RECORDS.] 
           (a) [ACKNOWLEDGMENT OF FILING WRITTEN RECORD.] If a person 
        that files a written record requests an acknowledgment of the 
        filing, the filing office shall send to the person an image of 
        the record showing the number assigned to the record pursuant to 
        section 336.9-519(a)(1) and the date and time of the filing of 
        the record.  However, if the person furnishes a copy of the 
        record to the filing office, the filing office may instead: 
           (1) note upon the copy the number assigned to the record 
        pursuant to section 336.9-519(a)(1) and the date and time of the 
        filing of the record; and 
           (2) send the copy to the person. 
           (b) [ACKNOWLEDGMENT OF FILING OTHER RECORD.] If a person 
        files a record other than a written record, the filing office 
        shall communicate to the person an acknowledgment that provides: 
           (1) the information in the record; 
           (2) the number assigned to the record pursuant to section 
        336.9-519(a)(1); and 
           (3) the date and time of the filing of the record. 
           (c) [COMMUNICATION OF REQUESTED INFORMATION.] The filing 
        office shall communicate or otherwise make available in a record 
        the following information to any person that requests it: 
           (1) whether there is on file on a date and time specified 
        by the filing office, but not a date earlier than three business 
        days before the filing office receives the request, any 
        financing statement that: 
           (A) designates a particular debtor (or, if the request so 
        states, designates a particular debtor at the address specified 
        in the request); 
           (B) has not lapsed under section 336.9-515 with respect to 
        all secured parties of record; and 
           (C) if the request so states, has lapsed under section 
        336.9-515 and a record of which is maintained by the filing 
        office under section 336.9-522(a); 
           (2) the date and time of filing of each financing 
        statement; and 
           (3) the information provided in each financing statement. 
           (d) [MEDIUM FOR COMMUNICATING INFORMATION.] In complying 
        with its duty under subsection (c), the filing office may 
        communicate information in any medium.  However, if requested, 
        the filing office shall communicate information by issuing its 
        written certificate. 
           (e) [TIMELINESS OF FILING OFFICE PERFORMANCE.] The filing 
        office shall perform the acts required by subsections (a) 
        through (d) at the time and in the manner prescribed by filing 
        office rule, but not later than two business days after the 
        filing office receives the request. 
           (f) [PUBLIC AVAILABILITY OF RECORDS.] At least weekly, the 
        secretary of state shall offer to sell or license to the public 
        on a nonexclusive basis, in bulk, copies of all records filed in 
        it under this part, in every medium from time to time available 
        to the filing office. 
           Sec. 95.  [336.9-524] [DELAY BY FILING OFFICE.] 
           Delay by the filing office beyond a time limit prescribed 
        by this part is excused if: 
           (1) the delay is caused by interruption of communication or 
        computer facilities, war, emergency conditions, failure of 
        equipment, or other circumstances beyond control of the filing 
        office; and 
           (2) the filing office exercises reasonable diligence under 
        the circumstances. 
           Sec. 96.  [336.9-525] [FEES.] 
           (a) [INITIAL FINANCING STATEMENT OR OTHER RECORD:  GENERAL 
        RULE.] Except as otherwise provided in subsection (d), the fee 
        for filing and indexing a record under this part is $20.  
           (b) [NUMBER OF NAMES.] The number of names required to be 
        indexed does not affect the amount of the fee in subsection (a). 
           (c) [RESPONSE TO INFORMATION REQUEST.] The fee for 
        responding to a request for information from the filing office, 
        including for issuing a certificate showing whether there is on 
        file any financing statement naming a particular debtor, is $20. 
           (d) [RECORD OF MORTGAGE.] This section does not require a 
        fee with respect to a record of a mortgage which is effective as 
        a financing statement filed as a fixture filing or as a 
        financing statement covering as-extracted collateral or timber 
        to be cut under section 336.9-502(c).  However, the recording 
        and satisfaction fees that otherwise would be applicable to the 
        record of the mortgage apply. 
           Sec. 97.  [336.9-526] [DUTY TO REPORT.] 
           The secretary of state shall report annually on or before 
        January 1 to the legislature on the operation of the filing 
        office. 
           Sec. 98.  [336.9-527] [SATELLITE OFFICES AUTHORIZED.] 
           The secretary of state may establish satellite offices by 
        written agreements with public officials within the state for 
        the purpose of meeting the filing officer responsibilities 
        described in sections 336.9-528 to 336.9-530.  The term of the 
        agreement must be set by, and may be renewed by, mutual 
        agreement.  The agreement may be terminated upon 60 days' 
        notice.  The secretary must maintain a list of those public 
        officials authorized to act as satellite offices.  The secretary 
        of state must make this list available in an electronic format 
        and the list must be updated at least monthly.  
           Sec. 99.  [336.9-528] [FILING; ASSIGNMENT OF FILING 
        INFORMATION AT SATELLITE OFFICES.] 
           Satellite offices shall accept Uniform Commercial Code 
        documents and respond to requests for information pursuant to 
        the provisions of sections 336.9-101 to 336.9-708.  A filing 
        made at a satellite office is filed and effective at the same 
        time and under the same rules provided for filing in any other 
        manner in the Uniform Commercial Code information system.  The 
        filing date, time, and file number for any Uniform Commercial 
        Code document accepted at a satellite office must be 
        automatically assigned by the Uniform Commercial Code 
        information management system operated by the secretary of 
        state, and the file number must be the next available file 
        number in the Uniform Commercial Code information management 
        system.  
           Sec. 100.  [336.9-529] [MAINTENANCE AND RETRIEVAL OF 
        DOCUMENTS AND DATA.] 
           The secretary of state shall maintain all Uniform 
        Commercial Code documents and the database used to index them 
        regardless of where or how the Uniform Commercial Code document 
        was filed.  The Uniform Commercial Code documents and database 
        must be housed in the Uniform Commercial Code information 
        management system.  Uniform Commercial Code documents and data 
        shall be available from the secretary of state or any satellite 
        office.  The secretary of state shall arrange by mutual 
        agreement with county recorders for the storage and retrieval of 
        existing Uniform Commercial Code documents.  
           Any filing office within the Uniform Commercial Code 
        information management system may respond to requests for 
        information, and the secretary of state shall establish and 
        administer a system to facilitate those responses.  
           Sec. 101.  [336.9-530] [SATELLITE OFFICES; UNIFORMITY OF 
        SERVICES ASSURED.] 
           Subdivision 1.  [PERFORMANCE STANDARDS.] All filing 
        officers must perform the responsibilities in sections 336.9-501 
        to 336.9-530 and rules adopted under section 139 in a uniform 
        manner, whether services are provided by the secretary of state 
        or at a satellite office location.  Reports by citizens 
        describing concerns with performance of filing officer 
        responsibilities must be made to the secretary of state.  The 
        secretary of state is responsible for responding to reports 
        about performance in a manner the secretary of state determines 
        is appropriate.  
           Subd. 2.  [FAILURE TO MEET PERFORMANCE STANDARDS.] If, upon 
        investigation of citizen reports described in subdivision 1, the 
        secretary of state determines that performance by a satellite 
        office of the filing officer responsibilities has been so 
        unsatisfactory that customer service has been severely impaired, 
        the secretary of state must terminate the satellite office's 
        status and ability to perform filing office responsibilities.  
        If a satellite office's ability to perform filing office 
        responsibilities is terminated by the secretary of state, the 
        change in status must be posted in the former satellite office 
        and must also be publicly posted in the county courthouse in the 
        county in which the former satellite office is located and must 
        be made available in an electronic format. 
                                     Part 6 
                                    DEFAULT 
                     SUBPART 1.  DEFAULT AND ENFORCEMENT OF 
                               SECURITY INTEREST 
           Sec. 102.  [336.9-601] [RIGHTS AFTER DEFAULT; JUDICIAL 
        ENFORCEMENT; CONSIGNOR OR BUYER OF ACCOUNTS, CHATTEL PAPER, 
        PAYMENT INTANGIBLES, OR PROMISSORY NOTES.] 
           (a) [RIGHTS OF SECURED PARTY AFTER DEFAULT.] After default, 
        a secured party has the rights provided in this part and, except 
        as otherwise provided in section 336.9-602, those provided by 
        agreement of the parties.  A secured party: 
           (1) may reduce a claim to judgment, foreclose, or otherwise 
        enforce the claim, security interest, or agricultural lien by 
        any available judicial procedure; and 
           (2) if the collateral is documents, may proceed either as 
        to the documents or as to the goods they cover. 
           (b) [RIGHTS AND DUTIES OF SECURED PARTY IN POSSESSION OR 
        CONTROL.] A secured party in possession of collateral or control 
        of collateral under section 336.9-104, 336.9-105, 336.9-106, or 
        336.9-107 has the rights and duties provided in section 
        336.9-207. 
           (c) [RIGHTS CUMULATIVE; SIMULTANEOUS EXERCISE.] The rights 
        under subsections (a) and (b) are cumulative and may be 
        exercised simultaneously. 
           (d) [RIGHTS OF DEBTOR AND OBLIGOR.] Except as otherwise 
        provided in subsection (g) and section 336.9-605, after default, 
        a debtor and an obligor have the rights provided in this part 
        and by agreement of the parties. 
           (e) [LIEN OF LEVY AFTER JUDGMENT.] If a secured party has 
        reduced its claim to judgment, the lien of any levy that may be 
        made upon the collateral by virtue of an execution based upon 
        the judgment relates back to the earliest of: 
           (1) the date of perfection of the security interest or 
        agricultural lien in the collateral; 
           (2) the date of filing a financing statement covering the 
        collateral; or 
           (3) any date specified in a statute under which the 
        agricultural lien was created. 
           (f) [EXECUTION SALE.] A sale pursuant to an execution is a 
        foreclosure of the security interest or agricultural lien by 
        judicial procedure within the meaning of this section.  A 
        secured party may purchase at the sale and thereafter hold the 
        collateral free of any other requirements of this article. 
           (g) [CONSIGNOR OR BUYER OF CERTAIN RIGHTS TO 
        PAYMENT.] Except as otherwise provided in section 336.9-607(c), 
        this part imposes no duties upon a secured party that is a 
        consignor or is a buyer of accounts, chattel paper, payment 
        intangibles, or promissory notes. 
           Sec. 103.  [336.9-602] [WAIVER AND VARIANCE OF RIGHTS AND 
        DUTIES.] 
           Except as otherwise provided in section 336.9-624, to the 
        extent that they give rights to a debtor or obligor and impose 
        duties on a secured party, the debtor or obligor may not waive 
        or vary the rules stated in the following listed sections: 
           (1) section 336.9-207(b)(4)(C), which deals with use and 
        operation of the collateral by the secured party; 
           (2) section 336.9-210, which deals with requests for an 
        accounting and requests concerning a list of collateral and 
        statement of account; 
           (3) section 336.9-607(c), which deals with collection and 
        enforcement of collateral; 
           (4) sections 336.9-608(a) and 336.9-615(c) to the extent 
        that they deal with application or payment of noncash proceeds 
        of collection, enforcement, or disposition; 
           (5) sections 336.9-608(a) and 336.9-615(d) to the extent 
        that they require accounting for or payment of surplus proceeds 
        of collateral; 
           (6) section 336.9-609 to the extent that it imposes upon a 
        secured party that takes possession of collateral without 
        judicial process the duty to do so without breach of the peace; 
           (7) sections 336.9-610(b), 336.9-611, 336.9-613, and 
        336.9-614, which deal with disposition of collateral; 
           (8) section 336.9-615(f), which deals with calculation of a 
        deficiency or surplus when a disposition is made to the secured 
        party, a person related to the secured party, or a secondary 
        obligor; 
           (9) section 336.9-616, which deals with explanation of the 
        calculation of a surplus or deficiency; 
           (10) sections 336.9-620, 336.9-621, and 336.9-622, which 
        deal with acceptance of collateral in satisfaction of 
        obligation; 
           (11) section 336.9-623, which deals with redemption of 
        collateral; 
           (12) section 336.9-624, which deals with permissible 
        waivers; and 
           (13) sections 336.9-625 and 336.9-626, which deal with the 
        secured party's liability for failure to comply with this 
        article. 
           Sec. 104.  [336.9-603] [AGREEMENT ON STANDARDS CONCERNING 
        RIGHTS AND DUTIES.] 
           (a) [AGREED STANDARDS.] The parties may determine by 
        agreement the standards measuring the fulfillment of the rights 
        of a debtor or obligor and the duties of a secured party under a 
        rule stated in section 336.9-602 if the standards are not 
        manifestly unreasonable. 
           (b) [AGREED STANDARDS INAPPLICABLE TO BREACH OF 
        PEACE.] Subsection (a) does not apply to the duty under section 
        336.9-609 to refrain from breaching the peace. 
           Sec. 105.  [336.9-604] [PROCEDURE IF SECURITY AGREEMENT 
        COVERS REAL PROPERTY OR FIXTURES.] 
           (a) [ENFORCEMENT:  PERSONAL AND REAL PROPERTY.] If a 
        security agreement covers both personal and real property, a 
        secured party may proceed: 
           (1) under this part as to the personal property without 
        prejudicing any rights with respect to the real property; or 
           (2) as to both the personal property and the real property 
        in accordance with the rights with respect to the real property, 
        in which case the other provisions of this part do not apply. 
           (b) [ENFORCEMENT:  FIXTURES.] Subject to subsection (c), if 
        a security agreement covers goods that are or become fixtures, a 
        secured party may proceed: 
           (1) under this part; or 
           (2) in accordance with the rights with respect to real 
        property, in which case the other provisions of this part do not 
        apply. 
           (c) [REMOVAL OF FIXTURES.] Subject to the other provisions 
        of this part, if a secured party holding a security interest in 
        fixtures has priority over all owners and encumbrancers of the 
        real property, the secured party, after default, may remove the 
        collateral from the real property. 
           (d) [INJURY CAUSED BY REMOVAL.] A secured party that 
        removes collateral shall promptly reimburse any encumbrancer or 
        owner of the real property, other than the debtor, for the cost 
        of repair of any physical injury caused by the removal.  The 
        secured party need not reimburse the encumbrancer or owner for 
        any diminution in value of the real property caused by the 
        absence of the goods removed or by any necessity of replacing 
        them.  A person entitled to reimbursement may refuse permission 
        to remove until the secured party gives adequate assurance for 
        the performance of the obligation to reimburse. 
           Sec. 106.  [336.9-605] [UNKNOWN DEBTOR OR SECONDARY 
        OBLIGOR.] 
           A secured party does not owe a duty based on its status as 
        secured party: 
           (1) to a person that is a debtor or obligor, unless the 
        secured party knows: 
           (A) that the person is a debtor or obligor; 
           (B) the identity of the person; and 
           (C) how to communicate with the person; or 
           (2) to a secured party or lienholder that has filed a 
        financing statement against a person, unless the secured party 
        knows: 
           (A) that the person is a debtor; and 
           (B) the identity of the person. 
           Sec. 107.  [336.9-606] [TIME OF DEFAULT FOR AGRICULTURAL 
        LIEN.] 
           For purposes of this part, a default occurs in connection 
        with an agricultural lien at the time the secured party becomes 
        entitled to enforce the lien in accordance with the statute 
        under which it was created. 
           Sec. 108.  [336.9-607] [COLLECTION AND ENFORCEMENT BY 
        SECURED PARTY.] 
           (a) [COLLECTION AND ENFORCEMENT GENERALLY.] If so agreed, 
        and in any event after default, a secured party: 
           (1) may notify an account debtor or other person obligated 
        on collateral to make payment or otherwise render performance to 
        or for the benefit of the secured party; 
           (2) may take any proceeds to which the secured party is 
        entitled under section 336.9-315; 
           (3) may enforce the obligations of an account debtor or 
        other person obligated on collateral and exercise the rights of 
        the debtor with respect to the obligation of the account debtor 
        or other person obligated on collateral to make payment or 
        otherwise render performance to the debtor, and with respect to 
        any property that secures the obligations of the account debtor 
        or other person obligated on the collateral; 
           (4) if it holds a security interest in a deposit account 
        perfected by control under section 336.9-104(a)(1), may apply 
        the balance of the deposit account to the obligation secured by 
        the deposit account; 
           (5) if it holds a security interest in a deposit account 
        perfected by control under section 336.9-104(a)(2) or (3), may 
        instruct the bank to pay the balance of the deposit account to 
        or for the benefit of the secured party; and 
           (6) if the obligation of the account debtor or other person 
        obligated on collateral is secured by an interest in real 
        property and the account debtor or other person obligated on 
        collateral satisfies its obligation, must furnish the account 
        debtor or the other person obligated on collateral with a 
        release or satisfaction of the interest in real property 
        sufficient for recording in the real property records applicable 
        to that real property.  
           (b) [NONJUDICIAL ENFORCEMENT OF MORTGAGE.] (1) To exercise 
        under subsection (a)(3) the right of a debtor to enforce a 
        mortgage nonjudicially, the secured party must record in the 
        office in which a record of the mortgage is recorded: 
           (A) an assignment of the mortgage to the secured party; or 
           (B) the secured party's sworn affidavit of assignment in 
        recordable form stating: 
           (i) a default has occurred under a security agreement that 
        creates or provides for a security interest in the obligation 
        secured by the mortgage; 
           (ii) a true and correct copy of the security agreement is 
        attached to the affidavit; 
           (iii) the secured party is entitled to enforce the mortgage 
        nonjudicially; 
           (iv) the legal description of the real property encumbered 
        by the mortgage; 
           (v) the parties to the mortgage, the date of the mortgage, 
        the date of recording of the mortgage, the place of recording of 
        the mortgage, and the identifying number or other indexing 
        information that identifies the mortgage in the office of the 
        county recorder or registrar of titles where the mortgage is 
        recorded; 
           (vi) the secured party has succeeded to the interest of the 
        debtor under the mortgage; and 
           (vii) the affidavit of assignment shall be an assignment to 
        the secured party of the interest of the debtor under the 
        mortgage. 
           (2) The affidavit of assignment is entitled to be recorded 
        with the county recorder or the registrar of titles and upon 
        recording, the affidavit of assignment shall be deemed an 
        assignment to the secured party of the interest of the debtor 
        under the mortgage. 
           (c) [COMMERCIALLY REASONABLE COLLECTION AND ENFORCEMENT.] A 
        secured party shall proceed in a commercially reasonable manner 
        if the secured party: 
           (1) undertakes to collect from or enforce an obligation of 
        an account debtor or other person obligated on collateral; and 
           (2) is entitled to charge back uncollected collateral or 
        otherwise to full or limited recourse against the debtor or a 
        secondary obligor. 
           (d) [EXPENSES OF COLLECTION AND ENFORCEMENT.] A secured 
        party may deduct from the collections made pursuant to 
        subsection (c) reasonable expenses of collection and 
        enforcement, including reasonable attorneys fees and legal 
        expenses incurred by the secured party. 
           (e) [DUTIES TO SECURED PARTY NOT AFFECTED.] This section 
        does not determine whether an account debtor, bank, or other 
        person obligated on collateral owes a duty to a secured party. 
           (f) [SECURED PARTY TO OBTAIN ASSIGNMENT OF DEBTOR'S 
        INTEREST UNDER THE MORTGAGE.] If the obligation of an account 
        debtor or other person obligated on collateral is secured by an 
        interest in real property, the secured party promptly after 
        commencing exercise of any of its rights under this section 
        shall: 
           (1) file an assignment of the mortgage to the secured 
        party; 
           (2) proceed under section 336.9-619 and record a transfer 
        statement in the office of the county recorder or registrar of 
        titles where the mortgage is recorded; or 
           (3) file an affidavit of assignment as provided under 
        subsection (b). 
           Sec. 109.  [336.9-608] [APPLICATION OF PROCEEDS OF 
        COLLECTION OR ENFORCEMENT; LIABILITY FOR DEFICIENCY AND RIGHT TO 
        SURPLUS.] 
           (a) [APPLICATION OF PROCEEDS, SURPLUS, AND DEFICIENCY IF 
        OBLIGATION SECURED.] If a security interest or agricultural lien 
        secures payment or performance of an obligation, the following 
        rules apply: 
           (1) A secured party shall apply or pay over for application 
        the cash proceeds of collection or enforcement under section 
        336.9-607 in the following order to: 
           (A) the reasonable expenses of collection and enforcement 
        and, to the extent provided for by agreement and not prohibited 
        by law, reasonable attorneys fees and legal expenses incurred by 
        the secured party; 
           (B) the satisfaction of obligations secured by the security 
        interest or agricultural lien under which the collection or 
        enforcement is made; and 
           (C) the satisfaction of obligations secured by any 
        subordinate security interest in or other lien on the collateral 
        subject to the security interest or agricultural lien under 
        which the collection or enforcement is made if the secured party 
        receives an authenticated demand for proceeds before 
        distribution of the proceeds is completed. 
           (2) If requested by a secured party, a holder of a 
        subordinate security interest or other lien shall furnish 
        reasonable proof of the interest or lien within a reasonable 
        time.  Unless the holder complies, the secured party need not 
        comply with the holder's demand under paragraph (1)(C). 
           (3) A secured party need not apply or pay over for 
        application noncash proceeds of collection and enforcement under 
        section 336.9-607 unless the failure to do so would be 
        commercially unreasonable.  A secured party that applies or pays 
        over for application noncash proceeds shall do so in a 
        commercially reasonable manner. 
           (4) A secured party shall account to and pay a debtor for 
        any surplus, and the obligor is liable for any deficiency. 
           (b) [NO SURPLUS OR DEFICIENCY IN SALES OF CERTAIN RIGHTS TO 
        PAYMENT.] If the underlying transaction is a sale of accounts, 
        chattel paper, payment intangibles, or promissory notes, the 
        debtor is not entitled to any surplus, and the obligor is not 
        liable for any deficiency. 
           Sec. 110.  [336.9-609] [SECURED PARTY'S RIGHT TO TAKE 
        POSSESSION AFTER DEFAULT.] 
           (a) [POSSESSION; RENDERING EQUIPMENT UNUSABLE; DISPOSITION 
        ON DEBTOR'S PREMISES.] After default, a secured party: 
           (1) may take possession of the collateral; and 
           (2) without removal, may render equipment unusable and 
        dispose of collateral on a debtor's premises under section 
        336.9-610. 
           (b) [JUDICIAL AND NONJUDICIAL PROCESS.] A secured party may 
        proceed under subsection (a): 
           (1) pursuant to judicial process; or 
           (2) without judicial process, if it proceeds without breach 
        of the peace. 
           (c) [ASSEMBLY OF COLLATERAL.] If so agreed, and in any 
        event after default, a secured party may require the debtor to 
        assemble the collateral and make it available to the secured 
        party at a place to be designated by the secured party which is 
        reasonably convenient to both parties. 
           Sec. 111.  [336.9-610] [DISPOSITION OF COLLATERAL AFTER 
        DEFAULT.] 
           (a) [DISPOSITION AFTER DEFAULT.] After default, a secured 
        party may sell, lease, license, or otherwise dispose of any or 
        all of the collateral in its present condition or following any 
        commercially reasonable preparation or processing. 
           (b) [COMMERCIALLY REASONABLE DISPOSITION.] Every aspect of 
        a disposition of collateral, including the method, manner, time, 
        place, and other terms, must be commercially reasonable.  If 
        commercially reasonable, a secured party may dispose of 
        collateral by public or private proceedings, by one or more 
        contracts, as a unit or in parcels, and at any time and place 
        and on any terms. 
           (c) [PURCHASE BY SECURED PARTY.] A secured party may 
        purchase collateral: 
           (1) at a public disposition; or 
           (2) at a private disposition only if the collateral is of a 
        kind that is customarily sold on a recognized market or the 
        subject of widely distributed standard price quotations. 
           (d) [WARRANTIES ON DISPOSITION.] A contract for sale, 
        lease, license, or other disposition includes the warranties 
        relating to title, possession, quiet enjoyment, and the like 
        which by operation of law accompany a voluntary disposition of 
        property of the kind subject to the contract. 
           (e) [DISCLAIMER OF WARRANTIES.] A secured party may 
        disclaim or modify warranties under subsection (d): 
           (1) in a manner that would be effective to disclaim or 
        modify the warranties in a voluntary disposition of property of 
        the kind subject to the contract of disposition; or 
           (2) by communicating to the purchaser a record evidencing 
        the contract for disposition and including an express disclaimer 
        or modification of the warranties. 
           (f) [RECORD SUFFICIENT TO DISCLAIM WARRANTIES.] A record is 
        sufficient to disclaim warranties under subsection (e) if it 
        indicates "there is no warranty relating to title, possession, 
        quiet enjoyment, or the like in this disposition" or uses words 
        of similar import. 
           Sec. 112.  [336.9-611] [NOTIFICATION BEFORE DISPOSITION OF 
        COLLATERAL.] 
           (a) [NOTIFICATION DATE.] In this section, "notification 
        date" means the earlier of the date on which: 
           (1) a secured party sends to the debtor and any secondary 
        obligor an authenticated notification of disposition; or 
           (2) the debtor and any secondary obligor waive the right to 
        notification. 
           (b) [NOTIFICATION OF DISPOSITION REQUIRED.] Except as 
        otherwise provided in subsection (d), a secured party that 
        disposes of collateral under section 336.9-610 shall send to the 
        persons specified in subsection (c) a reasonable authenticated 
        notification of disposition. 
           (c) [PERSONS TO BE NOTIFIED.] To comply with subsection 
        (b), the secured party shall send an authenticated notification 
        of disposition to: 
           (1) the debtor; 
           (2) any secondary obligor; and 
           (3) if the collateral is other than consumer goods: 
           (A) any other person from which the secured party has 
        received, before the notification date, an authenticated 
        notification of a claim of an interest in the collateral; 
           (B) any other secured party or lienholder that, ten days 
        before the notification date, held a security interest in or 
        other lien on the collateral perfected by the filing of a 
        financing statement that: 
           (i) identified the collateral; 
           (ii) was indexed under the debtor's name as of that date; 
        and 
           (iii) was filed in the office in which to file a financing 
        statement against the debtor covering the collateral as of that 
        date; and 
           (C) any other secured party that, ten days before the 
        notification date, held a security interest in the collateral 
        perfected by compliance with a statute, regulation, or treaty 
        described in section 336.9-311(a). 
           (d) [SUBSECTION (B) INAPPLICABLE:  PERISHABLE COLLATERAL; 
        RECOGNIZED MARKET.] Subsection (b) does not apply if the 
        collateral is perishable or threatens to decline speedily in 
        value or is of a type customarily sold on a recognized market. 
           (e) [COMPLIANCE WITH SUBSECTION (C)(3)(B).] A secured party 
        complies with the requirement for notification prescribed by 
        subsection (c)(3)(B) if: 
           (1) not later than 20 days or earlier than 30 days before 
        the notification date, the secured party requests, in a 
        commercially reasonable manner, information concerning financing 
        statements indexed under the debtor's name in the office 
        indicated in subsection (c)(3)(B); and 
           (2) before the notification date, the secured party: 
           (A) did not receive a response to the request for 
        information; or 
           (B) received a response to the request for information and 
        sent an authenticated notification of disposition to each 
        secured party named in that response whose financing statement 
        covered the collateral. 
           Sec. 113.  [336.9-612] [TIMELINESS OF NOTIFICATION BEFORE 
        DISPOSITION OF COLLATERAL.] 
           (a) [REASONABLE TIME IS QUESTION OF FACT.] Except as 
        otherwise provided in subsection (b), whether a notification is 
        sent within a reasonable time is a question of fact. 
           (b) [TEN-DAY PERIOD SUFFICIENT IN NONCONSUMER TRANSACTION.] 
        In a transaction other than a consumer transaction, a 
        notification of disposition sent after default and ten days or 
        more before the earliest time of disposition set forth in the 
        notification is sent within a reasonable time before the 
        disposition. 
           Sec. 114.  [336.9-613] [CONTENTS AND FORM OF NOTIFICATION 
        BEFORE DISPOSITION OF COLLATERAL:  GENERAL.] 
           Except in a consumer goods transaction, the following rules 
        apply: 
           (1) The contents of a notification of disposition are 
        sufficient if the notification: 
           (A) describes the debtor and the secured party; 
           (B) describes the collateral that is the subject of the 
        intended disposition; 
           (C) states the method of intended disposition; 
           (D) states that the debtor is entitled to an accounting of 
        the unpaid indebtedness and states the charge, if any, for an 
        accounting; and 
           (E) states the time and place of a public disposition or 
        the time after which any other disposition is to be made. 
           (2) Whether the contents of a notification that lacks any 
        of the information specified in paragraph (1) are nevertheless 
        sufficient is a question of fact. 
           (3) The contents of a notification providing substantially 
        the information specified in paragraph (1) are sufficient, even 
        if the notification includes: 
           (A) information not specified by that paragraph; or 
           (B) minor errors that are not seriously misleading. 
           (4) A particular phrasing of the notification is not 
        required. 
           (5) The following form of notification and the form 
        appearing in section 336.9-614(3), when completed, each provides 
        sufficient information: 
                  NOTIFICATION OF DISPOSITION OF COLLATERAL 
         To:                 (Name of debtor, obligor, or other person 
                              to which the notification is sent) 
         From:               (Name, address, and telephone number of 
                              secured party)
         Name of Debtor(s):  (Include only if debtor(s) are not an 
                              addressee)
        (For a public disposition:) 
           We will sell (or lease or license, as applicable) the 
        .....(describe collateral)..... (to the highest qualified 
        bidder) in public as follows: 
          Day and Date:  ........................
          Time:          ........................
          Place:         ........................
        (For a private disposition:) 
           We will sell (or lease or license, as applicable) the 
        .....(describe collateral)..... privately sometime after ...(day 
        and date).... 
           You are entitled to an accounting of the unpaid 
        indebtedness secured by the property that we intend to sell (or 
        lease or license, as applicable) (for a charge of $.......).  
        You may request an accounting by calling us at ...(telephone 
        number).... 
           Sec. 115.  [336.9-614] [CONTENTS AND FORM OF NOTIFICATION 
        BEFORE DISPOSITION OF COLLATERAL:  CONSUMER GOODS TRANSACTION.] 
           In a consumer goods transaction, the following rules apply: 
           (1) A notification of disposition must provide the 
        following information: 
           (A) the information specified in section 336.9-613(1); 
           (B) a description of any liability for a deficiency of the 
        person to which the notification is sent; 
           (C) a telephone number from which the amount that must be 
        paid to the secured party to redeem the collateral under section 
        336.9-623 is available; and 
           (D) a telephone number or mailing address from which 
        additional information concerning the disposition and the 
        obligation secured is available. 
           (2) A particular phrasing of the notification is not 
        required. 
           (3) The following form of notification, when completed, 
        provides sufficient information: 
        (Name and address of secured party) 
        (Date) 
                     NOTICE OF OUR PLAN TO SELL PROPERTY 
        (Name and address of any obligor who is also a debtor) 
        Subject:  ....(Identification of Transaction).... 
           We have your ...(describe collateral)..., because you broke 
        promises in our agreement. 
        (For a public disposition:) 
           We will sell ...(describe collateral)... at public sale.  A 
        sale could include a lease or license.  The sale will be held as 
        follows: 
             Date:     .............
             Time:     .............
             Place:    .............
           You may attend the sale and bring bidders if you want. 
        (For a private disposition:) 
           We will sell ...(describe collateral)... at private sale 
        sometime after ..(date)...  A sale could include a lease or 
        license. 
           The money that we get from the sale (after paying our costs)
        will reduce the amount you owe.  If we get less money than you 
        owe, you ..(will or will not, as applicable).. still owe us the 
        difference.  If we get more money than you owe, you will get the 
        extra money, unless we must pay it to someone else. 
           You can get the property back at any time before we sell it 
        by paying us the full amount you owe (not just the past due 
        payments), including our expenses.  To learn the exact amount 
        you must pay, call us at ..(telephone number)... 
           If you want us to explain to you in writing how we have 
        figured the amount that you owe us, you may call us at 
        ..(telephone number).. (or write us at ..(secured party's 
        address)..) and request a written explanation.  (We will charge 
        you $....... for the explanation if we sent you another written 
        explanation of the amount you owe us within the last six months.)
           If you need more information about the sale call us at 
        ..(telephone number).. (or write us at ..(secured party's 
        address)..). 
           We are sending this notice to the following other people 
        who have an interest in ...(describe collateral)... or who owe 
        money under your agreement: 
        ..(Names of all other debtors and obligors, if any).. 
           (4) A notification in the form of paragraph (3) is 
        sufficient, even if additional information appears at the end of 
        the form. 
           (5) A notification in the form of paragraph (3) is 
        sufficient, even if it includes errors in information not 
        required by paragraph (1), unless the error is misleading with 
        respect to rights arising under this article. 
           (6) If a notification under this section is not in the form 
        of paragraph (3), law other than this article determines the 
        effect of including information not required by paragraph (1). 
           Sec. 116.  [336.9-615] [APPLICATION OF PROCEEDS OF 
        DISPOSITION; LIABILITY FOR DEFICIENCY AND RIGHT TO SURPLUS.] 
           (a) [APPLICATION OF PROCEEDS.] A secured party shall apply 
        or pay over for application the cash proceeds of disposition 
        under section 336.9-610 in the following order to: 
           (1) the reasonable expenses of retaking, holding, preparing 
        for disposition, processing, and disposing, and, to the extent 
        provided for by agreement and not prohibited by law, reasonable 
        attorneys fees and legal expenses incurred by the secured party; 
           (2) the satisfaction of obligations secured by the security 
        interest or agricultural lien under which the disposition is 
        made; 
           (3) the satisfaction of obligations secured by any 
        subordinate security interest in or other subordinate lien on 
        the collateral if: 
           (A) the secured party receives from the holder of the 
        subordinate security interest or other lien an authenticated 
        demand for proceeds before distribution of the proceeds is 
        completed; and 
           (B) in a case in which a consignor has an interest in the 
        collateral, the subordinate security interest or other lien is 
        senior to the interest of the consignor; and 
           (4) a secured party that is a consignor of the collateral 
        if the secured party receives from the consignor an 
        authenticated demand for proceeds before distribution of the 
        proceeds is completed. 
           (b) [PROOF OF SUBORDINATE INTEREST.] If requested by a 
        secured party, a holder of a subordinate security interest or 
        other lien shall furnish reasonable proof of the interest or 
        lien within a reasonable time.  Unless the holder does so, the 
        secured party need not comply with the holder's demand under 
        subsection (a)(3). 
           (c) [APPLICATION OF NONCASH PROCEEDS.] A secured party need 
        not apply or pay over for application noncash proceeds of 
        disposition under section 336.9-610 unless the failure to do so 
        would be commercially unreasonable.  A secured party that 
        applies or pays over for application noncash proceeds shall do 
        so in a commercially reasonable manner. 
           (d) [SURPLUS OR DEFICIENCY IF OBLIGATION SECURED.] If the 
        security interest under which a disposition is made secures 
        payment or performance of an obligation, after making the 
        payments and applications required by subsection (a) and 
        permitted by subsection (c): 
           (1) unless subsection (a)(4) requires the secured party to 
        apply or pay over cash proceeds to a consignor, the secured 
        party shall account to and pay a debtor for any surplus; and 
           (2) the obligor is liable for any deficiency. 
           (e) [NO SURPLUS OR DEFICIENCY IN SALES OF CERTAIN RIGHTS TO 
        PAYMENT.] If the underlying transaction is a sale of accounts, 
        chattel paper, payment intangibles, or promissory notes: 
           (1) the debtor is not entitled to any surplus; and 
           (2) the obligor is not liable for any deficiency. 
           (f) [CALCULATION OF SURPLUS OR DEFICIENCY IN DISPOSITION TO 
        PERSON RELATED TO SECURED PARTY.] The surplus or deficiency 
        following a disposition is calculated based on the amount of 
        proceeds that would have been realized in a disposition 
        complying with this part to a transferee other than the secured 
        party, a person related to the secured party, or a secondary 
        obligor if: 
           (1) the transferee in the disposition is the secured party, 
        a person related to the secured party, or a secondary obligor; 
        and 
           (2) the amount of proceeds of the disposition is 
        significantly below the range of proceeds that a complying 
        disposition to a person other than the secured party, a person 
        related to the secured party, or a secondary obligor would have 
        brought. 
           (g) [CASH PROCEEDS RECEIVED BY JUNIOR SECURED PARTY.] A 
        secured party that receives cash proceeds of a disposition in 
        good faith and without knowledge that the receipt violates the 
        rights of the holder of a security interest or other lien that 
        is not subordinate to the security interest or agricultural lien 
        under which the disposition is made: 
           (1) takes the cash proceeds free of the security interest 
        or other lien; 
           (2) is not obligated to apply the proceeds of the 
        disposition to the satisfaction of obligations secured by the 
        security interest or other lien; and 
           (3) is not obligated to account to or pay the holder of the 
        security interest or other lien for any surplus. 
           Sec. 117.  [336.9-616] [EXPLANATION OF CALCULATION OF 
        SURPLUS OR DEFICIENCY.] 
           (a) [DEFINITIONS.] In this section: 
           (1) "Explanation" means a writing that: 
           (A) states the amount of the surplus or deficiency; 
           (B) provides an explanation in accordance with subsection 
        (c) of how the secured party calculated the surplus or 
        deficiency; 
           (C) states, if applicable, that future debits, credits, 
        charges, including additional credit service charges or 
        interest, rebates, and expenses may affect the amount of the 
        surplus or deficiency; and 
           (D) provides a telephone number or mailing address from 
        which additional information concerning the transaction is 
        available. 
           (2) "Request" means a record: 
           (A) authenticated by a debtor or consumer obligor; 
           (B) requesting that the recipient provide an explanation; 
        and 
           (C) sent after disposition of the collateral under section 
        336.9-610. 
           (b) [EXPLANATION OF CALCULATION.] In a consumer goods 
        transaction in which the debtor is entitled to a surplus or a 
        consumer obligor is liable for a deficiency under section 
        336.9-615, the secured party shall: 
           (1) send an explanation to the debtor or consumer obligor, 
        as applicable, after the disposition and: 
           (A) before or when the secured party accounts to the debtor 
        and pays any surplus or first makes written demand on the 
        consumer obligor after the disposition for payment of the 
        deficiency; and 
           (B) within 14 days after receipt of a request; or 
           (2) in the case of a consumer obligor who is liable for a 
        deficiency, within 14 days after receipt of a request, send to 
        the consumer obligor a record waiving the secured party's right 
        to a deficiency. 
           (c) [REQUIRED INFORMATION.] To comply with subsection 
        (a)(1)(B), a writing must provide the following information in 
        the following order: 
           (1) the aggregate amount of obligations secured by the 
        security interest under which the disposition was made, and, if 
        the amount reflects a rebate of unearned interest or credit 
        service charge, an indication of that fact, calculated as of a 
        specified date: 
           (A) if the secured party takes or receives possession of 
        the collateral after default, not more than 35 days before the 
        secured party takes or receives possession; or 
           (B) if the secured party takes or receives possession of 
        the collateral before default or does not take possession of the 
        collateral, not more than 35 days before the disposition; 
           (2) the amount of proceeds of the disposition; 
           (3) the aggregate amount of the obligations after deducting 
        the amount of proceeds; 
           (4) the amount, in the aggregate or by type, and types of 
        expenses, including expenses of retaking, holding, preparing for 
        disposition, processing, and disposing of the collateral, and 
        attorneys fees secured by the collateral which are known to the 
        secured party and relate to the current disposition; 
           (5) the amount, in the aggregate or by type, and types of 
        credits, including rebates of interest or credit service 
        charges, to which the obligor is known to be entitled and which 
        are not reflected in the amount in paragraph (1); and 
           (6) the amount of the surplus or deficiency. 
           (d) [SUBSTANTIAL COMPLIANCE.] A particular phrasing of the 
        explanation is not required.  An explanation complying 
        substantially with the requirements of subsection (a) is 
        sufficient, even if it includes minor errors that are not 
        seriously misleading. 
           (e) [CHARGES FOR RESPONSES.] A debtor or consumer obligor 
        is entitled without charge to one response to a request under 
        this section during any six-month period in which the secured 
        party did not send to the debtor or consumer obligor an 
        explanation pursuant to subsection (b)(1).  The secured party 
        may require payment of a charge not exceeding $25 for each 
        additional response. 
           Sec. 118.  [336.9-617] [RIGHTS OF TRANSFEREE OF 
        COLLATERAL.] 
           (a) [EFFECTS OF DISPOSITION.] A secured party's disposition 
        of collateral after default: 
           (1) transfers to a transferee for value all of the debtor's 
        rights in the collateral; 
           (2) discharges the security interest under which the 
        disposition is made; and 
           (3) discharges any subordinate security interest or other 
        subordinate lien other than liens created under (cite acts or 
        statutes providing for liens, if any, that are not to be 
        discharged). 
           (b) [RIGHTS OF GOOD FAITH TRANSFEREE.] A transferee that 
        acts in good faith takes free of the rights and interests 
        described in subsection (a), even if the secured party fails to 
        comply with this article or the requirements of any judicial 
        proceeding. 
           (c) [RIGHTS OF OTHER TRANSFEREE.] If a transferee does not 
        take free of the rights and interests described in subsection 
        (a), the transferee takes the collateral subject to: 
           (1) the debtor's rights in the collateral; 
           (2) the security interest or agricultural lien under which 
        the disposition is made; and 
           (3) any other security interest or other lien. 
           Sec. 119.  [336.9-618] [RIGHTS AND DUTIES OF CERTAIN 
        SECONDARY OBLIGORS.] 
           (a) [RIGHTS AND DUTIES OF SECONDARY OBLIGOR.] A secondary 
        obligor acquires the rights and becomes obligated to perform the 
        duties of the secured party after the secondary obligor: 
           (1) receives an assignment of a secured obligation from the 
        secured party; 
           (2) receives a transfer of collateral from the secured 
        party and agrees to accept the rights and assume the duties of 
        the secured party; or 
           (3) is subrogated to the rights of a secured party with 
        respect to collateral. 
           (b) [EFFECT OF ASSIGNMENT, TRANSFER, OR SUBROGATION.] An 
        assignment, transfer, or subrogation described in subsection (a):
           (1) is not a disposition of collateral under section 
        336.9-610; and 
           (2) relieves the secured party of further duties under this 
        article. 
           Sec. 120.  [336.9-619] [TRANSFER OF RECORD OR LEGAL TITLE.] 
           (a) [TRANSFER STATEMENT.] (1) In this section, "transfer 
        statement" means a record authenticated by a secured party 
        stating: 
           (A) that the debtor has defaulted in connection with an 
        obligation secured by specified collateral; 
           (B) that the secured party has exercised its postdefault 
        remedies with respect to the collateral; 
           (C) that, by reason of the exercise, a transferee has 
        acquired the rights of the debtor in the collateral; 
           (D) the name and mailing address of the secured party, 
        debtor, and transferee; and 
           (E) in addition, if the statement is to be filed in the 
        real property records concerning a mortgage or other record 
        evidencing an interest in real property, the statement must 
        state the following information concerning the mortgage or other 
        record evidencing an interest in real property: 
           (i) the name and title on the record; 
           (ii) the date on the record; 
           (iii) the names of the parties on the record; 
           (iv) the identity of the office of the county recorder or 
        registrar of titles where the record is filed; 
           (v) the date the record was filed; and 
           (vi) the identifying number of the record in the office of 
        the county recorder or registrar of titles. 
           (2) A transfer statement that is to be filed in the real 
        property records must contain an acknowledgment by the secured 
        party in a form sufficient to satisfy the requirements of 
        chapter 358. 
           (b) [EFFECT OF TRANSFER STATEMENT.] A transfer statement 
        entitles the transferee to the transfer of record of all rights 
        of the debtor in the collateral specified in the statement in 
        any official filing, recording, registration, or certificate of 
        title system covering the collateral.  If a transfer statement 
        is presented with the applicable fee and request form to the 
        official or office responsible for maintaining the system, the 
        official or office shall: 
           (1) accept the transfer statement; 
           (2) promptly amend its records to reflect the transfer; and 
           (3) if applicable, issue a new appropriate certificate of 
        title in the name of transferee. 
           (c) [TRANSFER NOT A DISPOSITION; NO RELIEF OF SECURED 
        PARTY'S DUTIES.] A transfer of the record or legal title to 
        collateral to a secured party under subsection (b) or otherwise 
        is not of itself a disposition of collateral under this article 
        and does not of itself relieve the secured party of its duties 
        under this article. 
           Sec. 121.  [336.9-620] [ACCEPTANCE OF COLLATERAL IN FULL OR 
        PARTIAL SATISFACTION OF OBLIGATION; COMPULSORY DISPOSITION OF 
        COLLATERAL.] 
           (a) [CONDITIONS TO ACCEPTANCE IN SATISFACTION.] Except as 
        otherwise provided in subsection (g), a secured party may accept 
        collateral in full or partial satisfaction of the obligation it 
        secures only if: 
           (1) the debtor consents to the acceptance under subsection 
        (c); 
           (2) the secured party does not receive, within the time set 
        forth in subsection (d), a notification of objection to the 
        proposal authenticated by: 
           (A) a person to which the secured party was required to 
        send a proposal under section 336.9-621; or 
           (B) any other person, other than the debtor, holding an 
        interest in the collateral subordinate to the security interest 
        that is the subject of the proposal; 
           (3) if the collateral is consumer goods, the collateral is 
        not in the possession of the debtor when the debtor consents to 
        the acceptance; and 
           (4) subsection (e) does not require the secured party to 
        dispose of the collateral or the debtor waives the requirement 
        pursuant to section 336.9-624. 
           (b) [PURPORTED ACCEPTANCE INEFFECTIVE.] A purported or 
        apparent acceptance of collateral under this section is 
        ineffective unless: 
           (1) the secured party consents to the acceptance in an 
        authenticated record or sends a proposal to the debtor; and 
           (2) the conditions of subsection (a) are met. 
           (c) [DEBTOR'S CONSENT.] For purposes of this section: 
           (1) a debtor consents to an acceptance of collateral in 
        partial satisfaction of the obligation it secures only if the 
        debtor agrees to the terms of the acceptance in a record 
        authenticated after default; and 
           (2) a debtor consents to an acceptance of collateral in 
        full satisfaction of the obligation it secures only if the 
        debtor agrees to the terms of the acceptance in a record 
        authenticated after default or the secured party: 
           (A) sends to the debtor after default a proposal that is 
        unconditional or subject only to a condition that collateral not 
        in the possession of the secured party be preserved or 
        maintained; 
           (B) in the proposal, proposes to accept collateral in full 
        satisfaction of the obligation it secures; and 
           (C) does not receive a notification of objection 
        authenticated by the debtor within 20 days after the proposal is 
        sent. 
           (d) [EFFECTIVENESS OF NOTIFICATION.] To be effective under 
        subsection (a)(2), a notification of objection must be received 
        by the secured party: 
           (1) in the case of a person to which the proposal was sent 
        pursuant to section 336.9-621, within 20 days after notification 
        was sent to that person; and 
           (2) in other cases: 
           (A) within 20 days after the last notification was sent 
        pursuant to section 336.9-621; or 
           (B) if a notification was not sent, before the debtor 
        consents to the acceptance under subsection (c). 
           (e) [MANDATORY DISPOSITION OF CONSUMER GOODS.] A secured 
        party that has taken possession of collateral shall dispose of 
        the collateral pursuant to section 336.9-610 within the time 
        specified in subsection (f) if: 
           (1) 60 percent of the cash price has been paid in the case 
        of a purchase-money security interest in consumer goods; or 
           (2) 60 percent of the principal amount of the obligation 
        secured has been paid in the case of a non-purchase-money 
        security interest in consumer goods. 
           (f) [COMPLIANCE WITH MANDATORY DISPOSITION REQUIREMENT.] To 
        comply with subsection (e), the secured party shall dispose of 
        the collateral: 
           (1) within 90 days after taking possession; or 
           (2) within any longer period to which the debtor and all 
        secondary obligors have agreed in an agreement to that effect 
        entered into and authenticated after default. 
           (g) [NO PARTIAL SATISFACTION IN CONSUMER TRANSACTION.] In a 
        consumer transaction, a secured party may not accept collateral 
        in partial satisfaction of the obligation it secures. 
           Sec. 122.  [336.9-621] [NOTIFICATION OF PROPOSAL TO ACCEPT 
        COLLATERAL.] 
           (a) [PERSONS TO WHICH PROPOSAL TO BE SENT.] A secured party 
        that desires to accept collateral in full or partial 
        satisfaction of the obligation it secures shall send its 
        proposal to: 
           (1) any person from which the secured party has received, 
        before the debtor consented to the acceptance, an authenticated 
        notification of a claim of an interest in the collateral; 
           (2) any other secured party or lienholder that, ten days 
        before the debtor consented to the acceptance, held a security 
        interest in or other lien on the collateral perfected by the 
        filing of a financing statement that: 
           (A) identified the collateral; 
           (B) was indexed under the debtor's name as of that date; 
        and 
           (C) was filed in the office or offices in which to file a 
        financing statement against the debtor covering the collateral 
        as of that date; and 
           (3) any other secured party that, ten days before the 
        debtor consented to the acceptance, held a security interest in 
        the collateral perfected by compliance with a statute, 
        regulation, or treaty described in section 336.9-311(a). 
           (b) [PROPOSAL TO BE SENT TO SECONDARY OBLIGOR IN PARTIAL 
        SATISFACTION.] A secured party that desires to accept collateral 
        in partial satisfaction of the obligation it secures shall send 
        its proposal to any secondary obligor in addition to the persons 
        described in subsection (a). 
           Sec. 123.  [336.9-622] [EFFECT OF ACCEPTANCE OF 
        COLLATERAL.] 
           (a) [EFFECT OF ACCEPTANCE.] A secured party's acceptance of 
        collateral in full or partial satisfaction of the obligation it 
        secures: 
           (1) discharges the obligation to the extent consented to by 
        the debtor; 
           (2) transfers to the secured party all of a debtor's rights 
        in the collateral; 
           (3) discharges the security interest or agricultural lien 
        that is the subject of the debtor's consent and any subordinate 
        security interest or other subordinate lien; and 
           (4) terminates any other subordinate interest. 
           (b) [DISCHARGE OF SUBORDINATE INTEREST NOTWITHSTANDING 
        NONCOMPLIANCE.] A subordinate interest is discharged or 
        terminated under subsection (a), even if the secured party fails 
        to comply with this article. 
           Sec. 124.  [336.9-623] [RIGHT TO REDEEM COLLATERAL.] 
           (a) [PERSONS THAT MAY REDEEM.] A debtor, any secondary 
        obligor, or any other secured party or lienholder may redeem 
        collateral. 
           (b) [REQUIREMENTS FOR REDEMPTION.] To redeem collateral, a 
        person shall tender: 
           (1) fulfillment of all obligations secured by the 
        collateral; and 
           (2) the reasonable expenses and attorneys fees described in 
        section 336.9-615(a)(1). 
           (c) [WHEN REDEMPTION MAY OCCUR.] A redemption may occur at 
        any time before a secured party: 
           (1) has collected collateral under section 336.9-607; 
           (2) has disposed of collateral or entered into a contract 
        for its disposition under section 336.9-610; or 
           (3) has accepted collateral in full or partial satisfaction 
        of the obligation it secures under section 336.9-622. 
           Sec. 125.  [336.9-624] [WAIVER.] 
           (a) [WAIVER OF DISPOSITION NOTIFICATION.] A debtor or 
        secondary obligor may waive the right to notification of 
        disposition of collateral under section 336.9-611 only by an 
        agreement to that effect entered into and authenticated after 
        default. 
           (b) [WAIVER OF MANDATORY DISPOSITION.] A debtor may waive 
        the right to require disposition of collateral under section 
        336.9-620(e) only by an agreement to that effect entered into 
        and authenticated after default. 
           (c) [WAIVER OF REDEMPTION RIGHT.] Except in a consumer 
        goods transaction, a debtor or secondary obligor may waive the 
        right to redeem collateral under section 336.9-623 only by an 
        agreement to that effect entered into and authenticated after 
        default. 
                     SUBPART 2.  NONCOMPLIANCE WITH ARTICLE 
           Sec. 126.  [336.9-625] [REMEDIES FOR SECURED PARTY'S 
        FAILURE TO COMPLY WITH ARTICLE.] 
           (a) [JUDICIAL ORDERS CONCERNING NONCOMPLIANCE.] If it is 
        established that a secured party is not proceeding in accordance 
        with this article, a court may order or restrain collection, 
        enforcement, or disposition of collateral on appropriate terms 
        and conditions. 
           (b) [DAMAGES FOR NONCOMPLIANCE LOSSES.] Subject to 
        subsections (c), (d), and (f), a person is liable for damages in 
        the amount of any loss caused by a failure to comply with this 
        article.  Loss caused by a failure to comply may include loss 
        resulting from the debtor's inability to obtain, or increased 
        costs of, alternative financing. 
           (c) [PERSONS ENTITLED TO RECOVER DAMAGES; STATUTORY DAMAGES 
        IN CONSUMER GOODS TRANSACTION.] Except as otherwise provided in 
        section 336.9-628: 
           (1) a person that, at the time of the failure, was a 
        debtor, was an obligor, or held a security interest in or other 
        lien on the collateral may recover damages under subsection (b) 
        for its loss; and 
           (2) if the collateral is consumer goods, a person that was 
        a debtor or a secondary obligor at the time a secured party 
        failed to comply with this part may recover for that failure in 
        any event an amount not less than the credit service charge plus 
        ten percent of the principal amount of the obligation or the 
        time-price differential plus ten percent of the cash price. 
           (d) [RECOVERY WHEN DEFICIENCY ELIMINATED OR REDUCED.] A 
        debtor whose deficiency is eliminated under section 336.9-626 
        may recover damages for the loss of any surplus.  However, a 
        debtor or secondary obligor whose deficiency is eliminated or 
        reduced under section 336.9-626 may not otherwise recover under 
        subsection (b) for noncompliance with the provisions of this 
        part relating to collection, enforcement, disposition, or 
        acceptance. 
           (e) [STATUTORY DAMAGES:  NONCOMPLIANCE WITH SPECIFIED 
        PROVISIONS.] In addition to any damages recoverable under 
        subsection (b), the debtor, consumer obligor, or person named as 
        a debtor in a filed record, as applicable, may recover $500 in 
        each case from a person who: 
           (1) fails to comply with section 336.9-208; 
           (2) fails to comply with section 336.9-209; 
           (3) files a record that the person is not entitled to file 
        under section 336.9-509(a); 
           (4) fails to cause the secured party of record to file or 
        send a termination statement as required by section 336.9-513(a) 
        or (c); 
           (5) fails to comply with section 336.9-616(b)(1) and whose 
        failure is part of a pattern, or consistent with a practice, of 
        noncompliance; or 
           (6) fails to comply with section 336.9-616(b)(2). 
           (f) [STATUTORY DAMAGES:  NONCOMPLIANCE WITH SECTION 
        336.9-210.] A debtor or consumer obligor may recover damages 
        under subsection (b) and, in addition, $500 in each case from a 
        person that, without reasonable cause, fails to comply with a 
        request under section 336.9-210.  A recipient of a request under 
        section 336.9-210 which never claimed an interest in the 
        collateral or obligations that are the subject of a request 
        under that section has a reasonable excuse for failure to comply 
        with the request within the meaning of this subsection. 
           (g) [LIMITATION OF SECURITY INTEREST:  NONCOMPLIANCE WITH 
        SECTION 336.9-210.] If a secured party fails to comply with a 
        request regarding a list of collateral or a statement of account 
        under section 336.9-210, the secured party may claim a security 
        interest only as shown in the list or statement included in the 
        request as against a person that is reasonably misled by the 
        failure. 
           Sec. 127.  [336.9-626] [ACTION IN WHICH DEFICIENCY OR 
        SURPLUS IS IN ISSUE.] 
           (a) [APPLICABLE RULES IF AMOUNT OF DEFICIENCY OR SURPLUS IS 
        IN ISSUE.] In an action arising from a transaction, other than a 
        consumer transaction, in which the amount of a deficiency or 
        surplus is in issue, the following rules apply: 
           (1) A secured party need not prove compliance with the 
        provisions of this part relating to collection, enforcement, 
        disposition, or acceptance unless the debtor or a secondary 
        obligor places the secured party's compliance in issue. 
           (2) If the secured party's compliance is placed in issue, 
        the secured party has the burden of establishing that the 
        collection, enforcement, disposition, or acceptance was 
        conducted in accordance with this part. 
           (3) Except as otherwise provided in section 336.9-628, if a 
        secured party fails to prove that the collection, enforcement, 
        disposition, or acceptance was conducted in accordance with the 
        provisions of this part relating to collection, enforcement, 
        disposition, or acceptance, the liability of a debtor or a 
        secondary obligor for a deficiency is limited to an amount by 
        which the sum of the secured obligation, expenses, and attorneys 
        fees exceeds the greater of: 
           (A) the proceeds of the collection, enforcement, 
        disposition, or acceptance; or 
           (B) the amount of proceeds that would have been realized 
        had the noncomplying secured party proceeded in accordance with 
        the provisions of this part relating to collection, enforcement, 
        disposition, or acceptance. 
           (4) For purposes of paragraph (3)(B), the amount of 
        proceeds that would have been realized is equal to the sum of 
        the secured obligation, expenses, and attorneys fees unless the 
        secured party proves that the amount is less than that sum. 
           (5) If a deficiency or surplus is calculated under section 
        336.9-615(f), the debtor or obligor has the burden of 
        establishing that the amount of proceeds of the disposition is 
        significantly below the range of prices that a complying 
        disposition to a person other than the secured party, a person 
        related to the secured party, or a secondary obligor would have 
        brought. 
           (b) [NONCONSUMER TRANSACTIONS; NO INFERENCE.] The 
        limitation of the rules in subsection (a) to transactions other 
        than consumer transactions is intended to leave to the court the 
        determination of the proper rules in consumer transactions.  The 
        court may not infer from that limitation the nature of the 
        proper rule in consumer transactions and may continue to apply 
        established approaches. 
           Sec. 128.  [336.9-627] [DETERMINATION OF WHETHER CONDUCT 
        WAS COMMERCIALLY REASONABLE.] 
           (a) [GREATER AMOUNT OBTAINABLE UNDER OTHER CIRCUMSTANCES; 
        NO PRECLUSION OF COMMERCIAL REASONABLENESS.] The fact that a 
        greater amount could have been obtained by a collection, 
        enforcement, disposition, or acceptance at a different time or 
        in a different method from that selected by the secured party is 
        not of itself sufficient to preclude the secured party from 
        establishing that the collection, enforcement, disposition, or 
        acceptance was made in a commercially reasonable manner. 
           (b) [DISPOSITIONS THAT ARE COMMERCIALLY REASONABLE.] A 
        disposition of collateral is made in a commercially reasonable 
        manner if the disposition is made: 
           (1) in the usual manner on any recognized market; 
           (2) at the price current in any recognized market at the 
        time of the disposition; or 
           (3) otherwise in conformity with reasonable commercial 
        practices among dealers in the type of property that was the 
        subject of the disposition. 
           (c) [APPROVAL BY COURT OR ON BEHALF OF CREDITORS.] A 
        collection, enforcement, disposition, or acceptance is 
        commercially reasonable if it has been approved: 
           (1) in a judicial proceeding; 
           (2) by a bona fide creditors' committee; 
           (3) by a representative of creditors; or 
           (4) by an assignee for the benefit of creditors. 
           (d) [APPROVAL UNDER SUBSECTION (C) NOT NECESSARY; ABSENCE 
        OF APPROVAL HAS NO EFFECT.] Approval under subsection (c) need 
        not be obtained, and lack of approval does not mean that the 
        collection, enforcement, disposition, or acceptance is not 
        commercially reasonable. 
           Sec. 129.  [336.9-628] [NONLIABILITY AND LIMITATION ON 
        LIABILITY OF SECURED PARTY; LIABILITY OF SECONDARY OBLIGOR.] 
           (a) [LIMITATION OF LIABILITY OF SECURED PARTY FOR 
        NONCOMPLIANCE WITH ARTICLE.] Unless a secured party knows that a 
        person is a debtor or obligor, knows the identity of the person, 
        and knows how to communicate with the person: 
           (1) the secured party is not liable to the person, or to a 
        secured party or lienholder that has filed a financing statement 
        against the person, for failure to comply with this article; and 
           (2) the secured party's failure to comply with this article 
        does not affect the liability of the person for a deficiency. 
           (b) [LIMITATION OF LIABILITY BASED ON STATUS AS SECURED 
        PARTY.] A secured party is not liable because of its status as 
        secured party: 
           (1) to a person that is a debtor or obligor, unless the 
        secured party knows: 
           (A) that the person is a debtor or obligor; 
           (B) the identity of the person; and 
           (C) how to communicate with the person; or 
           (2) to a secured party or lienholder that has filed a 
        financing statement against a person, unless the secured party 
        knows: 
           (A) that the person is a debtor; and 
           (B) the identity of the person. 
           (c) [LIMITATION OF LIABILITY IF GOOD FAITH BELIEF THAT 
        TRANSACTION IS NOT A CONSUMER GOODS TRANSACTION OR CONSUMER 
        TRANSACTION.] A secured party is not liable to any person, and a 
        persons liability for a deficiency is not affected, because of 
        any act or omission arising out of the secured party's 
        reasonable belief that a transaction is not a consumer goods 
        transaction or a consumer transaction or that goods are not 
        consumer goods, if the secured party's belief is based on its 
        reasonable reliance on: 
           (1) a debtor's representation concerning the purpose for 
        which collateral was to be used, acquired, or held; or 
           (2) an obligor's representation concerning the purpose for 
        which a secured obligation was incurred. 
           (d) [LIMITATION OF LIABILITY FOR STATUTORY DAMAGES.] A 
        secured party is not liable to any person under section 
        336.9-625(c)(2) for its failure to comply with section 336.9-616.
           (e) [LIMITATION OF MULTIPLE LIABILITY FOR STATUTORY 
        DAMAGES.] A secured party is not liable under section 
        336.9-625(c)(2) more than once with respect to any one secured 
        obligation. 
                                     Part 7 
                                   TRANSITION 
           Sec. 130.  [336.9-701] [EFFECTIVE DATE.] 
           This act takes effect July 1, 2001. 
           Sec. 131.  [336.9-702] [SAVINGS CLAUSE.] 
           (a) [PREEFFECTIVE DATE TRANSACTIONS OR LIENS.] Except as 
        otherwise provided in this part, this act applies to a 
        transaction or lien within its scope, even if the transaction or 
        lien was entered into or created before this act takes effect. 
           (b) [CONTINUING VALIDITY.] Except as otherwise provided in 
        subsection (c) and sections 336.9-703 through 336.9-709: 
           (1) transactions and liens that were not governed by former 
        article 9, were validly entered into or created before this act 
        takes effect, and would be subject to this act if they had been 
        entered into or created after this act takes effect, and the 
        rights, duties, and interests flowing from those transactions 
        and liens remain valid after this act takes effect; and 
           (2) the transactions and liens may be terminated, 
        completed, consummated, and enforced as required or permitted by 
        this act or by the law that otherwise would apply if this act 
        had not taken effect. 
           (c) [PREEFFECTIVE DATE PROCEEDINGS.] This act does not 
        affect an action, case, or proceeding commenced before this act 
        takes effect. 
           Sec. 132.  [336.9-703] [SECURITY INTEREST PERFECTED BEFORE 
        EFFECTIVE DATE.] 
           (a) [CONTINUING PRIORITY OVER LIEN CREDITOR:  PERFECTION 
        REQUIREMENTS SATISFIED.] A security interest that is enforceable 
        immediately before this act takes effect and would have priority 
        over the rights of a person that becomes a lien creditor at that 
        time is a perfected security interest under this act if, when 
        this act takes effect, the applicable requirements for 
        enforceability and perfection under this act are satisfied 
        without further action. 
           (b) [CONTINUING PRIORITY OVER LIEN CREDITOR:  PERFECTION 
        REQUIREMENTS NOT SATISFIED.] Except as otherwise provided in 
        section 336.9-705, if, immediately before this act takes effect, 
        a security interest is enforceable and would have priority over 
        the rights of a person that becomes a lien creditor at that 
        time, but the applicable requirements for enforceability or 
        perfection under this act are not satisfied when this act takes 
        effect, the security interest: 
           (1) is a perfected security interest for one year after 
        this act takes effect; 
           (2) remains enforceable thereafter only if the security 
        interest becomes enforceable under section 336.9-203 before the 
        year expires; and 
           (3) remains perfected thereafter only if the applicable 
        requirements for perfection under this act are satisfied before 
        the year expires. 
           Sec. 133.  [336.9-704] [SECURITY INTEREST UNPERFECTED 
        BEFORE EFFECTIVE DATE.] 
           A security interest that is enforceable immediately before 
        this act takes effect but which would be subordinate to the 
        rights of a person that becomes a lien creditor at that time: 
           (1) remains an enforceable security interest for one year 
        after this act takes effect; 
           (2) remains enforceable thereafter if the security interest 
        becomes enforceable under section 336.9-203 when this act takes 
        effect or within one year thereafter; and 
           (3) becomes perfected: 
           (A) without further action, when this act takes effect if 
        the applicable requirements for perfection under this act are 
        satisfied before or at that time; or 
           (B) when the applicable requirements for perfection are 
        satisfied if the requirements are satisfied after that time. 
           Sec. 134.  [336.9-705] [EFFECTIVENESS OF ACTION TAKEN 
        BEFORE EFFECTIVE DATE.] 
           (a) [PREEFFECTIVE DATE ACTION; ONE-YEAR PERFECTION PERIOD 
        UNLESS REPERFECTED.] If action, other than the filing of a 
        financing statement, is taken before this act takes effect and 
        the action would have resulted in priority of a security 
        interest over the rights of a person that becomes a lien 
        creditor had the security interest become enforceable before 
        this act takes effect, the action is effective to perfect a 
        security interest that attaches under this act within one year 
        after this act takes effect.  An attached security interest 
        becomes unperfected one year after this act takes effect unless 
        the security interest becomes a perfected security interest 
        under this act before the expiration of that period. 
           (b) [PREEFFECTIVE DATE FILING.] The filing of a financing 
        statement before this act takes effect is effective to perfect a 
        security interest to the extent the filing would satisfy the 
        applicable requirements for perfection under this act. 
           (c) [PREEFFECTIVE DATE FILING IN JURISDICTION FORMERLY 
        GOVERNING PERFECTION.] This act does not render ineffective an 
        effective financing statement that, before this act takes 
        effect, is filed and satisfies the applicable requirements for 
        perfection under the law of the jurisdiction governing 
        perfection as provided in Minnesota Statutes 1998, section 
        336.9-103.  However, except as otherwise provided in subsections 
        (d) and (e) and section 336.9-706, the financing statement 
        ceases to be effective at the earlier of: 
           (1) the time the financing statement would have ceased to 
        be effective under the law of the jurisdiction in which it is 
        filed; or 
           (2) June 30, 2006. 
           (d) [CONTINUATION STATEMENT.] The filing of a continuation 
        statement after this act takes effect does not continue the 
        effectiveness of the financing statement filed before this act 
        takes effect.  However, upon the timely filing of a continuation 
        statement after this act takes effect and in accordance with the 
        law of the jurisdiction governing perfection as provided in Part 
        3, the effectiveness of a financing statement filed in the same 
        office in that jurisdiction before this act takes effect 
        continues for the period provided by the law of that 
        jurisdiction. 
           (e) [APPLICATION OF SUBSECTION (C)(2) TO TRANSMITTING 
        UTILITY FINANCING STATEMENT.] Subsection (c)(2) applies to a 
        financing statement that, before this act takes effect, is filed 
        against a transmitting utility and satisfies the applicable 
        requirements for perfection under the law of the jurisdiction 
        governing perfection as provided in Minnesota Statutes 1998, 
        section 336.9-103, only to the extent that Part 3 provides that 
        the law of a jurisdiction other than the jurisdiction in which 
        the financing statement is filed governs perfection of a 
        security interest in collateral covered by the financing 
        statement. 
           (f) [APPLICATION OF PART 5.] A financing statement that 
        includes a financing statement filed before this act takes 
        effect and a continuation statement filed after this act takes 
        effect is effective only to the extent that it satisfies the 
        requirements of Part 5 for an initial financing statement. 
           Sec. 135.  [336.9-706] [WHEN INITIAL FINANCING STATEMENT 
        SUFFICES TO CONTINUE EFFECTIVENESS OF FINANCING STATEMENT.] 
           (a) [INITIAL FINANCING STATEMENT IN LIEU OF CONTINUATION 
        STATEMENT.] The filing of an initial financing statement in the 
        office specified in section 336.9-501 continues the 
        effectiveness of a financing statement filed before this act 
        takes effect if: 
           (1) the filing of an initial financing statement in that 
        office would be effective to perfect a security interest under 
        this act; 
           (2) the preeffective date financing statement was filed in 
        an office in another state or another office in this state; and 
           (3) the initial financing statement satisfies subsection 
        (c). 
           (b) [PERIOD OF CONTINUED EFFECTIVENESS.] The filing of an 
        initial financing statement under subsection (a) continues the 
        effectiveness of the preeffective date financing statement: 
           (1) if the initial financing statement is filed before this 
        act takes effect, for the period provided in Minnesota Statutes 
        1998, section 336.9-403, with respect to a financing statement; 
        and 
           (2) if the initial financing statement is filed after this 
        act takes effect, for the period provided in section 336.9-515 
        with respect to an initial financing statement. 
           (c) [REQUIREMENTS FOR INITIAL FINANCING STATEMENT UNDER 
        SUBSECTION (A).] To be effective for purposes of subsection (a), 
        an initial financing statement must: 
           (1) satisfy the requirements of Part 5 for an initial 
        financing statement; 
           (2) identify the preeffective date financing statement by 
        indicating the office in which the financing statement was filed 
        and providing the dates of filing and file numbers, if any, of 
        the financing statement and of the most recent continuation 
        statement filed with respect to the financing statement; and 
           (3) indicate that the preeffective date financing statement 
        remains effective. 
           Sec. 136.  [336.9-707] [AMENDMENT OF PRE-EFFECTIVE DATE 
        FINANCING STATEMENT.] 
           (a) [PRE-EFFECTIVE DATE FINANCING STATEMENT.] In this 
        section, "pre-effective date financing statement" means a 
        financing statement filed before this act takes effect. 
           (b) [APPLICABLE LAW.] After this act takes effect, a person 
        may add or delete collateral covered by, continue or terminate 
        the effectiveness of, or otherwise amend the information 
        provided in, a pre-effective date financing statement only in 
        accordance with the law of the jurisdiction governing perfection 
        as provided in Part 3.  However, the effectiveness of a 
        pre-effective date financing statement also may be terminated in 
        accordance with the law of the jurisdiction in which the 
        financing statement is filed. 
           (c) [METHOD OF AMENDING:  GENERAL RULE.] Except as 
        otherwise provided in subsection (d), if the law of this state 
        governs perfection of a security interest, the information in a 
        pre-effective date financing statement may be amended after this 
        act takes effect only if: 
           (1) the pre-effective date financing statement and an 
        amendment are filed in the office specified in section 
        336.9-501; 
           (2) an amendment is filed in the office specified in 
        section 336.9-501 concurrently with, or after the filing in that 
        office of, an initial financing statement that satisfies section 
        336.9-706(c); or 
           (3) an initial financing statement that provides the 
        information as amended and satisfies section 336.9-706(c) is 
        filed in the office specified in section 336.9-501. 
           (d) [METHOD OF AMENDING:  CONTINUATION.] If the law of this 
        state governs perfection of a security interest, the 
        effectiveness of a pre-effective date financing statement may be 
        continued only under section 336.9-705(d) and (f) or 336.9-706. 
           (e) [METHOD OF AMENDING:  ADDITIONAL TERMINATION 
        RULE.] Whether or not the law of this state governs perfection 
        of a security interest, the effectiveness of a pre-effective 
        date financing statement filed in this state may be terminated 
        after this act takes effect by filing a termination statement in 
        the office in which the pre-effective date financing statement 
        is filed, unless an initial financing statement that satisfies 
        section 336.9-706(c) has been filed in the office specified by 
        the law of the jurisdiction governing perfection as provided in 
        Part 3 as the office in which to file a financing statement. 
           Sec. 137.  [336.9-708] [PERSONS ENTITLED TO FILE INITIAL 
        FINANCING STATEMENT OR CONTINUATION STATEMENT.] 
           A person may file an initial financing statement or a 
        continuation statement under this part if: 
           (1) the secured party of record authorizes the filing; and 
           (2) the filing is necessary under this part: 
           (A) to continue the effectiveness of a financing statement 
        filed before this act takes effect; or 
           (B) to perfect or continue the perfection of a security 
        interest. 
           Sec. 138.  [336.9-709] [PRIORITY.] 
           (a) [LAW GOVERNING PRIORITY.] This act determines the 
        priority of conflicting claims to collateral.  However, if the 
        relative priorities of the claims were established before this 
        act takes effect, former article 9 determines priority. 
           (b) [PRIORITY IF SECURITY INTERESTS BECOME ENFORCEABLE 
        UNDER SECTION 336.9-203.] For purposes of section 336.9-322(a), 
        the priority of a security interest that becomes enforceable 
        under section 336.9-203 dates from the time this act takes 
        effect if the security interest is perfected under this act by 
        the filing of a financing statement before this act takes effect 
        which would not have been effective to perfect the security 
        interest under former article 9.  This subsection does not apply 
        to conflicting security interests each of which is perfected by 
        the filing of such a financing statement. 
           Sec. 139.  [SATELLITE OFFICES; RULEMAKING.] 
           The secretary of state shall adopt rules governing the 
        establishment and operation of satellite offices under Minnesota 
        Statutes, sections 336.9-527 to 336.9-530, by July 1, 2000.  The 
        rules are exempt from the rulemaking provisions of Minnesota 
        Statutes, chapter 14, but must be adopted under Minnesota 
        Statutes, section 14.386.  Notwithstanding Minnesota Statutes, 
        section 14.386, paragraph (b), the rules remain in effect until 
        July 1, 2003. 
           The secretary of state may also adopt expedited rules 
        governing the establishment and operation of the central filing 
        system under Minnesota Statutes, sections 336.9-501 to 336.9-530 
        and 336.9-701 to 336.9-709, pursuant to section 14.389. 
           The authority to adopt rules under this section expires on 
        July 1, 2003.  The expiration of this authority does not affect 
        the validity of the rules adopted under it. 
           This section is effective the day following final enactment.
           Sec. 140.  [REPEALER.] 
           Minnesota Statutes 1998, sections 336.9-101; 336.9-102; 
        336.9-103; 336.9-104; 336.9-105; 336.9-106; 336.9-107; 
        336.9-108; 336.9-109; 336.9-110; 336.9-112; 336.9-113; 
        336.9-114; 336.9-115; 336.9-116; 336.9-201; 336.9-202; 
        336.9-204; 336.9-205; 336.9-206; 336.9-207; 336.9-208; 
        336.9-301; 336.9-302; 336.9-303; 336.9-304; 336.9-305; 
        336.9-306; 336.9-307; 336.9-308; 336.9-309; 336.9-310; 
        336.9-311; 336.9-312; 336.9-313; 336.9-314; 335.9-315; 
        336.9-316; 336.9-317; 336.9-318; 336.9-403; 336.9-404; 
        336.9-405; 336.9-406; 336.9-407; 336.9-408; 336.9-410; 
        336.9-412; 336.9-413; 336.9-501; 336.9-502; 336.9-503; 
        336.9-504; 336.9-505; 336.9-506; 336.9-507; and 336.9-508; and 
        Minnesota Statutes 1999 Supplement, sections 336.9-203; 
        336.9-401; 336.9-402; and 336.9-411, are repealed. 

                                   ARTICLE 2 
                    CONFORMING AMENDMENTS TO OTHER ARTICLES 
           Section 1.  Minnesota Statutes 1998, section 336.1-105, is 
        amended to read: 
           336.1-105 [TERRITORIAL APPLICATION OF THE CHAPTER; PARTIES' 
        POWER TO CHOOSE APPLICABLE LAW.] 
           (1) Except as provided hereafter in this section, when a 
        transaction bears a reasonable relation to this state and also 
        to another state or nation the parties may agree that the law 
        either of this state or of such other state or nation shall 
        govern their rights and duties.  Failing such agreement this 
        chapter applies to transactions bearing an appropriate relation 
        to this state. 
           (2) Where one of the following provisions of this chapter 
        specifies the applicable law, that provision governs and a 
        contrary agreement is effective only to the extent permitted by 
        the law (including the conflict of laws rules) so specified: 
           Rights of creditors against sold goods.  Section 336.2-402. 
           Applicability of the article on leases.  Sections 
        336.2A-105 and 336.2A-106.  
           Applicability of the article on bank deposits and 
        collections.  Section 336.4-102. 
           Governing law in the article on funds transfers.  Section 
        336.4A-507. 
           Letters of Credit.  Section 336.5-116. 
           Applicability of the article on investment securities. 
        Section 336.8-110. 
           Perfection provisions of the article on secured 
        transactions.  Section 336.9-103. 
           Law governing perfection, the effect of perfection or 
        nonperfection, and the priority of security interests and 
        agricultural liens.  Sections 336.9-301 to 336.9-307. 
           Sec. 2.  Minnesota Statutes 1998, section 336.1-201, is 
        amended to read: 
           336.1-201 [GENERAL DEFINITIONS.] 
           Subject to additional definitions contained in the 
        subsequent articles of this chapter which are applicable to 
        specific articles or parts thereof, and unless the context 
        otherwise requires, in this chapter: 
           (1) "Action" in the sense of a judicial proceeding includes 
        recoupment, counterclaim, setoff, suit in equity and any other 
        proceedings in which rights are determined. 
           (2) "Aggrieved party" means a party entitled to resort to a 
        remedy. 
           (3) "Agreement" means the bargain of the parties in fact as 
        found in their language or by implication from other 
        circumstances including course of dealing or usage of trade or 
        course of performance as provided in this chapter (sections 
        336.1-205 and 336.2-208).  Whether an agreement has legal 
        consequences is determined by the provisions of this chapter, if 
        applicable; otherwise by the law of contracts (section 
        336.1-103).  (Compare "Contract.") 
           (4) "Bank" means any person engaged in the business of 
        banking. 
           (5) "Bearer" means the person in possession of an 
        instrument, document of title, or certificated security payable 
        to bearer or endorsed in blank. 
           (6) "Bill of lading" means a document evidencing the 
        receipt of goods for shipment issued by a person engaged in the 
        business of transporting or forwarding goods, and includes an 
        airbill.  "Airbill" means a document serving for air 
        transportation as a bill of lading does for marine or rail 
        transportation, and includes an air consignment note or air 
        waybill. 
           (7) "Branch" includes a separately incorporated foreign 
        branch of a bank. 
           (8) "Burden of establishing" a fact means the burden of 
        persuading the triers of fact that the existence of the fact is 
        more probable than its nonexistence. 
           (9) "Buyer in ordinary course of business" means a person 
        who that buys goods in good faith and, without knowledge that 
        the sale to that person is in violation of violates the 
        ownership rights or security interest of a third party another 
        person in the goods buys, and in the ordinary course from a 
        person, other than a pawnbroker, in the business of selling 
        goods of that kind but does not include a pawnbroker.  All 
        persons who sell minerals or the like (including oil and gas) at 
        wellhead or minehead shall be deemed to be persons A person buys 
        goods in the ordinary course if the sale to the person comports 
        with the usual or customary practices in the kind of business in 
        which the seller is engaged or with the seller's own usual or 
        customary practices.  A person that sells oil, gas, or other 
        minerals at the wellhead or minehead is a person in the business 
        of selling goods of that kind.  "Buying" A buyer in ordinary 
        course of business may be buy for cash or, by exchange of 
        other property, or on secured or unsecured credit, and includes 
        receiving may acquire goods or documents of title under a 
        preexisting contract for sale but does not include a transfer in 
        bulk or as security for or in total or partial satisfaction of a 
        money debt.  Only a buyer that takes possession of the goods or 
        has a right to recover the goods from the seller under article 2 
        may be a buyer in ordinary course of business.  A person that 
        acquires goods in a transfer in bulk or as security for or in 
        total or partial satisfaction of a money debt is not a buyer in 
        ordinary course of business. 
           (10) "Conspicuous":  A term or clause is conspicuous when 
        it is so written that a reasonable person against whom it is to 
        operate ought to have noticed it.  A printing heading in 
        capitals (as:  NONNEGOTIABLE BILL OF LADING) is conspicuous.  
        Language in the body of a form is "conspicuous" if it is in 
        larger or other contrasting type or color.  But in a telegram 
        any stated term is "conspicuous".  Whether a term or clause is 
        "conspicuous" or not is for decision by the court. 
           (11) "Contract" means the total legal obligation which 
        results from the parties' agreement as affected by this chapter 
        and any other applicable rules of law. (Compare "Agreement.") 
           (12) "Creditor" includes a general creditor, a secured 
        creditor, a lien creditor and any representative of creditors, 
        including an assignee for the benefit of creditors, a trustee in 
        bankruptcy, a receiver in equity and an executor or 
        administrator of an insolvent debtor's or assignor's estate. 
           (13) "Defendant" includes a person in the position of 
        defendant in a cross-action or counterclaim. 
           (14) "Delivery" with respect to instruments, documents of 
        title, chattel paper, or certificated securities means voluntary 
        transfer of possession. 
           (15) "Document of title" includes bill of lading, dock 
        warrant, dock receipt, warehouse receipt or order for the 
        delivery of goods, and also any other document which in the 
        regular course of business or financing is treated as adequately 
        evidencing that the person in possession of it is entitled to 
        receive, hold and dispose of the document and the goods it 
        covers.  To be a document of title a document must purport to be 
        issued by or addressed to a bailee and purport to cover goods in 
        the bailee's possession which are either identified or are 
        fungible portions of an identified mass. 
           (16) "Fault" means wrongful act, omission or breach. 
           (17) "Fungible" with respect to goods or securities means 
        goods or securities of which any unit is, by nature or usage of 
        trade, the equivalent of any other like unit.  Goods which are 
        not fungible shall be deemed fungible for the purposes of this 
        chapter to the extent that under a particular agreement or 
        document unlike units are treated as equivalents. 
           (18) "Genuine" means free of forgery or counterfeiting. 
           (19) "Good faith" means honesty in fact in the conduct or 
        transaction concerned. 
           (20) "Holder," with respect to a negotiable instrument, 
        means the person in possession if the instrument is payable to 
        bearer or, in the case of an instrument payable to an identified 
        person, if the identified person is in possession.  "Holder," 
        with respect to a document of title, means the person in 
        possession if the goods are deliverable to bearer or to the 
        order of the person in possession. 
           (21) To "honor" is to pay or to accept and pay, or where a 
        credit so engages to purchase or discount a draft complying with 
        the terms of the credit. 
           (22) "Insolvency proceedings" includes any assignment for 
        the benefit of creditors or other proceedings intended to 
        liquidate or rehabilitate the estate of the person involved. 
           (23) A person is "insolvent" who either has ceased to pay 
        debts in the ordinary course of business or cannot pay the debts 
        as they become due or is insolvent within the meaning of the 
        federal bankruptcy law. 
           (24) "Money" means a medium of exchange authorized or 
        adopted by a domestic or foreign government and includes a 
        monetary unit of account established by an intergovernmental 
        organization or by agreement between two or more nations. 
           (25) A person has "notice" of a fact when that person 
           (a)  has actual knowledge of it; or 
           (b)  has received a notice or notification of it; or 
           (c) from all the facts and circumstances known to that 
        person at the time in question, has reason to know that it 
        exists. 
           A person "knows" or has "knowledge" of a fact when that 
        person has actual knowledge of it.  "Discover" or "learn" or a 
        word or phrase of similar import refers to knowledge rather than 
        to reason to know.  The time and circumstances under which a 
        notice or notification may cease to be effective are not 
        determined by this chapter. 
           (26) A person "notifies" or "gives" a notice or 
        notification to another by taking such steps as may be 
        reasonably required to inform the other in ordinary course 
        whether or not such other actually comes to know of it.  A 
        person "receives" a notice or notification when 
           (a) it comes to that person's attention; or 
           (b) it is duly delivered at the place of business through 
        which the contract was made or at any other place held out by 
        that person as the place for receipt of such communications. 
           (27) Notice, knowledge or a notice or notification received 
        by an organization is effective for a particular transaction 
        from the time when it is brought to the attention of the 
        individual conducting that transaction, and in any event from 
        the time when it would have been brought to the individual's 
        attention if the organization had exercised due diligence.  An 
        organization exercises due diligence if it maintains reasonable 
        routines for communicating significant information to the person 
        conducting the transaction and there is reasonable compliance 
        with the routines.  Due diligence does not require an individual 
        acting for the organization to communicate information unless 
        such communication is part of regular duties or unless the 
        individual has reason to know of the transaction and that the 
        transaction would be materially affected by the information. 
           (28) "Organization" includes a corporation, government or 
        governmental subdivision or agency, business trust, estate, 
        trust, partnership or association, two or more persons having a 
        joint or common interest, or any other legal or commercial 
        entity. 
           (29) "Party," as distinct from "third party," means a 
        person who has engaged in a transaction or made an agreement 
        within this chapter. 
           (30) "Person" includes an individual or an organization 
        (see section 336.1-102). 
           (31) "Presumption" or "presumed" means that the trier of 
        fact must find the existence of the fact presumed unless and 
        until evidence is introduced which would support a finding of 
        its nonexistence. 
           (32) "Purchase" includes taking by sale, discount, 
        negotiation, mortgage, pledge, lien, security interest, issue or 
        reissue, gift or any other voluntary transaction creating an 
        interest in property. 
           (33) "Purchaser" means a person who takes by purchase. 
           (34) "Remedy" means any remedial right to which an 
        aggrieved party is entitled with or without resort to a tribunal.
           (35) "Representative" includes an agent, an officer of a 
        corporation or association, and a trustee, executor or 
        administrator of an estate, or any other person empowered to act 
        for another. 
           (36) "Rights" includes remedies. 
           (37) "Security interest" means an interest in personal 
        property or fixtures which secures payment or performance of an 
        obligation.  The retention or reservation of title by a seller 
        of goods notwithstanding shipment or delivery to the buyer 
        (section 336.2-401) is limited in effect to a reservation of a 
        "security interest".  The term also includes any interest of a 
        consignor and a buyer of accounts or, chattel paper which, a 
        payment intangible, or a promissory note in a transaction that 
        is subject to article 9.  The special property interest of a 
        buyer of goods on identification of those goods to a contract 
        for sale under section 336.2-401 is not a "security interest," 
        but a buyer may also acquire a "security interest" by complying 
        with article 9.  Unless a consignment is intended as security, 
        reservation of title thereunder is not a "security interest," 
        but a consignment in any event is subject to the provisions on 
        consignment sales (section 336.2-326).  Except as otherwise 
        provided in section 336.2-505, the right of a seller or lessor 
        of goods under article 2 or 2a to retain or acquire possession 
        of the goods is not a "security interest," but a seller or 
        lessor may also acquire a security interest by complying with 
        article 9.  The retention or reservation of title by a seller of 
        goods notwithstanding shipment or delivery to the buyer (section 
        336.2-401) is limited in effect to a reservation of a security 
        interest. 
           Whether a transaction creates a lease or security interest 
        is determined by the facts of each case; however, a transaction 
        creates a security interest if the consideration the lessee is 
        to pay the lessor for the right to possession and use of the 
        goods is an obligation for the term of the lease not subject to 
        termination by the lessee, and 
           (a) the original term of the lease is equal to or greater 
        than the remaining economic life of the goods, 
           (b) the lessee is bound to renew the lease for the 
        remaining economic life of the goods or is bound to become the 
        owner of the goods, 
           (c) the lessee has an option to renew the lease for the 
        remaining economic life of the goods for no additional 
        consideration or nominal additional consideration upon 
        compliance with the lease agreement, or 
           (d) the lessee has an option to become the owner of the 
        goods for no additional consideration or nominal additional 
        consideration upon compliance with the lease agreement. 
           A transaction does not create a security interest merely 
        because it provides that 
           (a) the present value of the consideration the lessee is 
        obligated to pay the lessor for the right to possession and use 
        of the goods is substantially equal to or is greater than the 
        fair market value of the goods at the time the lease is entered 
        into, 
           (b) the lessee assumes risk of loss of the goods, or agrees 
        to pay taxes, insurance, filing, recording, or registration 
        fees, or service or maintenance costs with respect to the goods, 
           (c) the lessee has an option to renew the lease or to 
        become the owner of the goods, 
           (d) the lessee has an option to renew the lease for a fixed 
        rent that is equal to or greater than the reasonably predictable 
        fair market rent for the use of the goods for the term of the 
        renewal at the time the option is to be performed, or 
           (e) the lessee has an option to become the owner of the 
        goods for a fixed price that is equal to or greater than the 
        reasonably predictable fair market value of the goods at the 
        time the option is to be performed. 
           For purposes of this subsection (37): 
           (x) Additional consideration is not nominal if (i) when the 
        option to renew the lease is granted to the lessee the rent is 
        stated to be the fair market rent for the use of the goods for 
        the term of the renewal determined at the time the option is to 
        be performed, or (ii) when the option to become the owner of the 
        goods is granted to the lessee the price is stated to be the 
        fair market value of the goods determined at the time the option 
        is to be performed.  Additional consideration is nominal if it 
        is less than the lessee's reasonably predictable cost of 
        performing under the lease agreement if the option is not 
        exercised; 
           (y) "Reasonably predictable" and "remaining economic life 
        of the goods" are to be determined with reference to the facts 
        and circumstances at the time the transaction is entered into; 
        and 
           (z) "Present value" means the amount as of a date certain 
        of one or more sums payable in the future, discounted to the 
        date certain.  The discount is determined by the interest rate 
        specified by the parties if the rate is not manifestly 
        unreasonable at the time the transaction is entered into; 
        otherwise, the discount is determined by a commercially 
        reasonable rate that takes into account the facts and 
        circumstances of each case at the time the transaction was 
        entered into. 
           (38) "Send" in connection with any writing or notice means 
        to deposit in the mail or deliver for transmission by any other 
        usual means of communication with postage or cost of 
        transmission provided for and properly addressed and in the case 
        of an instrument to an address specified thereon or otherwise 
        agreed, or if there be none to any address reasonable under the 
        circumstances.  The receipt of any writing or notice within the 
        time at which it would have arrived if properly sent has the 
        effect of a proper sending. 
           (39) "Signed" includes any symbol executed or adopted by a 
        party with present intention to authenticate a writing. 
           (40) "Surety" includes guarantor. 
           (41) "Telegram" includes a message transmitted by radio, 
        teletype, cable, any mechanical method of transmission, or the 
        like. 
           (42) "Term" means that portion of an agreement which 
        relates to a particular matter. 
           (43) "Unauthorized" signature means one made without 
        actual, implied, or apparent authority and includes a forgery. 
           (44) "Value":  Except as otherwise provided with respect to 
        negotiable instruments and bank collections (sections 336.3-303, 
        336.4-210 and 336-4.211) a person gives "value" for rights by 
        acquiring them 
           (a) in return for a binding commitment to extend credit or 
        for the extension of immediately available credit whether or not 
        drawn upon and whether or not a chargeback is provided for in 
        the event of difficulties in collection; or 
           (b) as security for or in total or partial satisfaction of 
        a preexisting claim; or 
           (c) by accepting delivery pursuant to a preexisting 
        contract for purchase; or 
           (d) generally, in return for any consideration sufficient 
        to support a simple contract. 
           (45) "Warehouse receipt" means a receipt issued by a person 
        engaged in the business of storing goods for hire. 
           (46) "Written" or "writing" includes printing, typewriting 
        or any other intentional reduction to tangible form. 
           Sec. 3.  Minnesota Statutes 1998, section 336.2-103, is 
        amended to read: 
           336.2-103 [DEFINITIONS AND INDEX OF DEFINITIONS.] 
           (1) In this article unless the context otherwise requires: 
           (a) "Buyer" means a person who buys or contracts to buy 
        goods. 
           (b) "Good faith" in the case of a merchant means honesty in 
        fact and the observance of reasonable commercial standards of 
        fair dealing in the trade. 
           (c) "Receipt" of goods means taking physical possession of 
        them. 
           (d) "Seller" means a person who sells or contracts to sell 
        goods.  
           (2) Other definitions applying to this article or to 
        specified parts thereof, and the sections in which they appear 
        are: 
           "Acceptance," section 336.2-606. 
           "Banker's credit," section 336.2-325. 
           "Between merchants," section 336.2-104. 
           "Cancellation," section 336.2-106(4). 
           "Commercial unit," section 336.2-105. 
           "Confirmed credit," section 336.2-325. 
           "Conforming to contract," section 336.2-106. 
           "Contract for sale," section 336.2-106. 
           "Cover," section 336.2-712. 
           "Entrusting," section 336.2-403. 
           "Financing agency," section 336.2-104. 
           "Future goods," section 336.2-105. 
           "Goods," section 336.2-105. 
           "Identification," section 336.2-501. 
           "Installment contract," section 336.2-612. 
           "Letter of credit," section 336.2-325. 
           "Lot," section 336.2-105. 
           "Merchant," section 336.2-104. 
           "Overseas," section 336.2-323. 
           "Person in position of seller," section 336.2-707. 
           "Present sale," section 336.2-106. 
           "Sale," section 336.2-106. 
           "Sale on approval," section 336.2-326. 
           "Sale or return," section 336.2-326. 
           "Termination," section 336.2-106. 
           (3) The following definitions in other articles apply to 
        this article: 
           "Check," section 336.3-104. 
           "Consignee," section 336.7-102. 
           "Consignor," section 336.7-102. 
           "Consumer goods," section 336.9-109 336.9-102. 
           "Dishonor," section 336.3-502. 
           "Draft," section 336.3-104. 
           (4) In addition article 1 contains general definitions and 
        principles of construction and interpretation applicable 
        throughout this article. 
           Sec. 4.  Minnesota Statutes 1998, section 336.2-210, is 
        amended to read: 
           336.2-210 [DELEGATION OF PERFORMANCE; ASSIGNMENT OF 
        RIGHTS.] 
           (1) A party may perform a duty through a delegate unless 
        otherwise agreed or unless the other party has a substantial 
        interest in having the original promisor perform or control the 
        acts required by the contract.  No delegation of performance 
        relieves the party delegating of any duty to perform or any 
        liability for breach.  
           (2) Unless otherwise agreed all rights of either seller or 
        buyer can be assigned except where the assignment would 
        materially change the duty of the other party, or increase 
        materially the burden or risk imposed on the other party by the 
        contract, or impair materially the other party's chance of 
        obtaining return performance.  A right to damages for breach of 
        the whole contract or a right arising out of the assignor's due 
        performance of the assignor's entire obligation can be assigned 
        despite agreement otherwise.  
           (3) The creation, attachment, perfection, or enforcement of 
        a security interest in the seller's interest under a contract is 
        not a transfer that materially changes the duty of or increases 
        materially the burden or risk imposed on the buyer or impairs 
        materially the buyer's chance of obtaining return performance 
        within the purview of subsection (2) unless, and then only to 
        the extent that, enforcement actually results in a delegation of 
        material performance of the seller.  Even in that event, the 
        creation, attachment, perfection, and enforcement of the 
        security interest remain effective, but (i) the seller is liable 
        to the buyer for damages caused by the delegation to the extent 
        that the damages could not reasonably be prevented by the buyer, 
        and (ii) a court having jurisdiction may grant other appropriate 
        relief, including cancellation of the contract for sale or an 
        injunction against enforcement of the security interest or 
        consummation of the enforcement. 
           (4) Unless the circumstances indicate the contrary a 
        prohibition of assignment of "the contract" is to be construed 
        as barring only the delegation to the assignee of the assignor's 
        performance.  
           (4) (5) An assignment of "the contract" or of "all my 
        rights under the contract" or an assignment in similar general 
        terms is an assignment of rights and unless the language or the 
        circumstances (as in an assignment for security) indicate the 
        contrary, it is a delegation of performance of the duties of the 
        assignor and its acceptance by the assignee constitutes a 
        promise by the assignee to perform those duties.  This promise 
        is enforceable by either the assignor or the other party to the 
        original contract.  
           (5) (6) The other party may treat any assignment which 
        delegates performance as creating reasonable grounds for 
        insecurity and may without prejudice to the rights of the other 
        party against the assignor demand assurances from the assignee 
        (section 336.2-609). 
           Sec. 5.  Minnesota Statutes 1998, section 336.2-326, is 
        amended to read: 
           336.2-326 [SALE ON APPROVAL AND SALE OR RETURN; CONSIGNMENT 
        SALES AND RIGHTS OF CREDITORS.] 
           (1) Unless otherwise agreed, if delivered goods may be 
        returned by the buyer even though they conform to the contract, 
        the transaction is 
           (a) a "sale on approval" if the goods are delivered 
        primarily for use, and 
           (b) a "sale or return" if the goods are delivered primarily 
        for resale.  
           (2) Except as provided in subsection (3), Goods held on 
        approval are not subject to the claims of the buyer's creditors 
        until acceptance; goods held on sale or return are subject to 
        such claims while in the buyer's possession.  
           (3) Where goods are delivered to a person for sale and such 
        person maintains a place of business dealing in goods of the 
        kind involved, under a name other than the name of the person 
        making delivery, then with respect to claims of creditors of the 
        person conducting the business the goods are deemed to be on 
        sale or return.  The provisions of this subsection are 
        applicable even though an agreement purports to reserve title to 
        the person making delivery until payment or resale or uses such 
        words as "on consignment" or "on memorandum."  However, this 
        subsection is not applicable if the person making delivery 
           (a) complies with an applicable law providing for a 
        consignor's interest or the like to be evidenced by a sign, or 
           (b) establishes that the person conducting the business is 
        generally known by the person's creditors to be substantially 
        engaged in selling the goods of others, or 
           (c) complies with the filing provisions of the article on 
        secured transactions (article 9).  
           (4) Any "or return" term of a contract for sale is to be 
        treated as a separate contract for sale within the statute of 
        frauds section of this article (section 336.2-201) and as 
        contradicting the sale aspect of the contract within the 
        provisions of this article on parol or extrinsic evidence 
        (section 336.2-202).  
           Sec. 6.  Minnesota Statutes 1998, section 336.2-502, is 
        amended to read: 
           336.2-502 [BUYER'S RIGHT TO GOODS ON SELLER'S REPUDIATION, 
        FAILURE TO DELIVER, OR INSOLVENCY.] 
           (1) Subject to subsection subsections (2) and (3) and even 
        though the goods have not been shipped a buyer who has paid a 
        part or all of the price of goods in which the buyer has a 
        special property under the provisions of the immediately 
        preceding section may on making and keeping good a tender of any 
        unpaid portion of their price recover them from the seller if: 
           (a) in the case of goods bought for personal, family, or 
        household purposes, the seller repudiates or fails to deliver as 
        required by the contract; or 
           (b) in all cases, the seller becomes insolvent within ten 
        days after receipt of the first installment on their price.  
           (2) The buyer's right to recover the goods under subsection 
        (1)(a) vests upon acquisition of a special property, even if the 
        seller had not then repudiated or failed to deliver. 
           (3) If the identification creating the special property has 
        been made by the buyer, the buyer acquires the right to recover 
        the goods only if they conform to the contract for sale. 
           Sec. 7.  Minnesota Statutes 1998, section 336.2-716, is 
        amended to read: 
           336.2-716 [BUYER'S RIGHT TO SPECIFIC PERFORMANCE OR 
        REPLEVIN.] 
           (1) Specific performance may be decreed where the goods are 
        unique or in other proper circumstances.  
           (2) The decree for specific performance may include such 
        terms and conditions as to payment of the price, damages, or 
        other relief as the court may deem just.  
           (3) The buyer has a right of replevin for goods identified 
        to the contract if after reasonable effort the buyer is unable 
        to effect cover for such goods or the circumstances reasonably 
        indicate that such effort will be unavailing or if the goods 
        have been shipped under reservation and satisfaction of the 
        security interest in them has been made or tendered.  In the 
        case of goods bought for personal, family, or household 
        purposes, the buyer's right of replevin vests upon acquisition 
        of a special property, even if the seller had not then 
        repudiated or failed to deliver.  
           Sec. 8.  Minnesota Statutes 1998, section 336.2A-103, is 
        amended to read: 
           336.2A-103 [DEFINITIONS AND INDEX OF DEFINITIONS.] 
           (1) In this article unless the context otherwise requires: 
           (a) "Buyer in ordinary course of business" means a person 
        who in good faith and without knowledge that the sale is in 
        violation of the ownership rights or security interest or 
        leasehold interest of a third party in the goods, buys in 
        ordinary course from a person in the business of selling goods 
        of that kind but does not include a pawnbroker.  "Buying" may be 
        for cash or by exchange of other property or on secured or 
        unsecured credit and includes receiving goods or documents of 
        title under a preexisting contract for sale but does not include 
        a transfer in bulk or as security for or in total or partial 
        satisfaction of a money debt. 
           (b) "Cancellation" occurs when either party puts an end to 
        the lease contract for default by the other party. 
           (c) "Commercial unit" means a unit of goods that by 
        commercial usage is a single whole for purposes of lease and 
        division of which materially impairs its character or value on 
        the market or in use.  A commercial unit may be a single 
        article, as a machine, or a set of articles, as a suite of 
        furniture or a line of machinery, or a quantity, as a gross or 
        carload, or any other unit treated in use or in the relevant 
        market as a single whole. 
           (d) "Conforming" goods or performance under a lease 
        contract means goods or performance that are in accordance with 
        the obligations under the lease contract. 
           (e) "Consumer lease" means a lease that a lessor regularly 
        engaged in the business of leasing or selling makes to a lessee 
        who is an individual and who takes under the lease primarily for 
        a personal, family, or household purpose, if the total payments 
        to be made under the lease contract, excluding payments for 
        options to renew or buy, do not exceed $25,000. 
           (f) "Fault" means wrongful act, omission, breach, or 
        default. 
           (g) "Finance lease" means a lease in which 
           (1) the lessor does not select, manufacture, or supply the 
        goods, 
           (2) the lessor acquires the goods or the right to 
        possession and use of the goods in connection with the lease, 
        and 
           (3) either 
           (i) the lessee receives a copy of the contract evidencing 
        the lessor's purchase of the goods or a disclaimer statement on 
        or before signing the lease contract, or 
           (ii) the lessee's approval of the contract evidencing the 
        lessor's purchase of the goods or a disclaimer statement is a 
        condition to effectiveness of the lease contract.  
           "Disclaimer statement" means a written statement that is 
        part of or separate from the lease contract that discloses all 
        warranties and other rights provided to the lessee by the lessor 
        and supplier in connection with the lease contract and informs 
        the lessee in a conspicuous manner that there are no warranties 
        or other rights provided to the lessee by the lessor and 
        supplier other than those disclosed in the statement. 
           (h) "Goods" means all things that are movable at the time 
        of identification to the lease contract, or are fixtures 
        (section 336.2A-309), but the term does not include money, 
        documents, instruments, accounts, chattel paper, general 
        intangibles, or minerals or the like, including oil and gas, 
        before extraction.  The term also includes the unborn young of 
        animals. 
           (i) "Installment lease contract" means a lease contract 
        that authorizes or requires the delivery of goods in separate 
        lots to be separately accepted, even though the lease contract 
        contains a clause "each delivery is a separate lease" or its 
        equivalent. 
           (j) "Lease" means a transfer of the right to possession and 
        use of goods for a term in return for consideration, but a sale, 
        including a sale on approval or a sale or return, or retention 
        or creation of a security interest is not a lease.  Unless the 
        context clearly indicates otherwise, the term includes a 
        sublease. 
           (k) "Lease agreement" means the bargain, with respect to 
        the lease, of the lessor and the lessee in fact as found in 
        their language or by implication from other circumstances 
        including course of dealing or usage of trade or course of 
        performance as provided in this article.  Unless the context 
        clearly indicates otherwise, the term includes a sublease 
        agreement. 
           (l) "Lease contract" means the total legal obligation that 
        results from the lease agreement as affected by this article and 
        any other applicable rules of law.  Unless the context clearly 
        indicates otherwise, the term includes a sublease contract. 
           (m) "Leasehold interest" means the interest of the lessor 
        or the lessee under a lease contract. 
           (n) "Lessee" means a person who acquires the right to 
        possession and use of goods under a lease.  Unless the context 
        clearly indicates otherwise, the term includes a sublessee. 
           (o) "Lessee in ordinary course of business" means a person 
        who in good faith and without knowledge that the lease is in 
        violation of the ownership rights or security interest or 
        leasehold interest of a third party in the goods leases in 
        ordinary course from a person in the business of selling or 
        leasing goods of that kind but does not include a pawnbroker.  
        "Leasing" may be for cash or by exchange of other property or on 
        secured or unsecured credit and includes receiving goods or 
        documents of title under a preexisting lease contract but does 
        not include a transfer in bulk or as security for or in total or 
        partial satisfaction of a money debt. 
           (p) "Lessor" means a person who transfers the right to 
        possession and use of goods under a lease.  Unless the context 
        clearly indicates otherwise, the term includes a sublessor. 
           (q) "Lessor's residual interest" means the lessor's 
        interest in the goods after expiration, termination, or 
        cancellation of the lease contract. 
           (r) "Lien" means a charge against or interest in goods to 
        secure payment of a debt or performance of an obligation, but 
        the term does not include a security interest. 
           (s) "Lot" means a parcel or a single article that is the 
        subject matter of a separate lease or delivery, whether or not 
        it is sufficient to perform the lease contract. 
           (t) "Merchant lessee" means a lessee that is a merchant 
        with respect to goods of the kind subject to the lease. 
           (u) "Present value" means the amount as of a date certain 
        of one or more sums payable in the future, discounted to the 
        date certain.  The discount is determined by the interest rate 
        specified by the parties if the rate was not manifestly 
        unreasonable at the time the transaction was entered into; 
        otherwise, the discount is determined by a commercially 
        reasonable rate that takes into account the facts and 
        circumstances of each case at the time the transaction was 
        entered into. 
           (v) "Purchase" includes taking by sale, lease, mortgage, 
        security interest, pledge, gift, or any other voluntary 
        transaction creating an interest in goods. 
           (w) "Sublease" means a lease of goods the right to 
        possession and use of which was acquired by the lessor as a 
        lessee under an existing lease. 
           (x) "Supplier" means a person from whom a lessor buys or 
        leases goods to be leased under a finance lease. 
           (y) "Supply contract" means a contract under which a lessor 
        buys or leases goods to be leased. 
           (z) "Termination" occurs when either party pursuant to a 
        power created by agreement or law puts an end to the lease 
        contract otherwise than for default. 
           (2) Other definitions applying to this article and the 
        sections in which they appear are: 
           "Accessions."  Section 336.2A-310(1). 
           "Construction mortgage."  Section 336.2A-309(1)(d). 
           "Encumbrance."  Section 336.2A-309(1)(e). 
           "Fixtures."  Section 336.2A-309(1)(a). 
           "Fixture filing."  Section 336.2A-309(1)(b). 
           "Purchase money lease."  Section 336.2A-309(1)(c). 
           (3) The following definitions in other articles apply to 
        this article: 
           "Account."  Section 336.9-106 336.9-102(a)(2). 
           "Between merchants."  Section 336.2-104(3). 
           "Buyer."  Section 336.2-103(1)(a). 
           "Chattel paper."  Section 336.9-105(1)(b) 336.9-102(a)(11). 
           "Consumer goods."  Section 336.9-109(1) 336.9-102(a)(23). 
           "Document."  Section 336.9-105(1)(f) 336.9-102(a)(30). 
           "Entrusting."  Section 336.2-403(3). 
           "General intangibles intangible."  Section 336.9-106 
        336.9-102(a)(42). 
           "Good faith."  Section 336.2-103(1)(b). 
           "Instrument."  Section 336.9-105(1)(i) 336.9-102(a)(47). 
           "Merchant."  Section 336.2-104(1). 
           "Mortgage."  Section 336.9-105(1)(j) 336.9-102(a)(55). 
           "Pursuant to commitment."  
        Section 336.9-105(1)(k) 336.9-102(a)(68). 
           "Receipt."  Section 336.2-103(1)(c). 
           "Sale."  Section 336.2-106(1). 
           "Sale on approval."  Section 336.2-326. 
           "Sale or return."  Section 336.2-326. 
           "Seller."  Section 336.2-103(1)(d). 
           (4) In addition, sections 336.1-101 to 336.1-109 contain 
        general definitions and principles of construction and 
        interpretation applicable throughout this article. 
           Sec. 9.  Minnesota Statutes 1998, section 336.2A-303, is 
        amended to read: 
           336.2A-303 [ALIENABILITY OF PARTY'S INTEREST UNDER LEASE 
        CONTRACT OR OF LESSOR'S RESIDUAL INTEREST IN GOODS; DELEGATION 
        OF PERFORMANCE; TRANSFER OF RIGHTS.] 
           (1) As used in this section, "creation of a security 
        interest" includes the sale of a lease contract that is subject 
        to article 9, secured transactions, by reason of section 
        336.9-102(1)(b) 336.9-109(a)(3). 
           (2) Except as provided in subsections subsection (3) 
        and (4) section 336.9-407, a provision in a lease agreement that 
        (i) prohibits the voluntary or involuntary transfer, including a 
        transfer by sale, sublease, creation or enforcement of a 
        security interest, or attachment, levy, or other judicial 
        process, of an interest of a party under the lease contract or 
        of the lessor's residual interest in the goods, or (ii) makes 
        the transfer an event of default, gives rise to the rights and 
        remedies provided in subsection (5) (4), but a transfer that is 
        prohibited or is an event of default under the lease agreement 
        is otherwise effective. 
           (3) A provision in a lease agreement that (i) prohibits the 
        creation or enforcement of a security interest in an interest of 
        a party under the lease contract or in the lessor's residual 
        interest in the goods, or (ii) makes the transfer an event of 
        default, is not enforceable unless, and then only to the extent 
        that, there is an actual transfer by the lessee of the lessee's 
        right of possession or use of the goods in violation of the 
        provision or an actual delegation of a material performance of 
        either party to the lease contract in violation of the 
        provision.  Neither the granting nor the enforcement of a 
        security interest in (i) the lessor's interest under the lease 
        contract or (ii) the lessor's residual interest in the goods is 
        a transfer that materially impairs the prospect of obtaining 
        return performance by, materially changes the duty of, or 
        materially increases the burden or risk imposed on, the lessee 
        within the purview of subsection (5) unless, and then only to 
        the extent that, there is an actual delegation of a material 
        performance of the lessor. 
           (4) A provision in a lease agreement that (i) prohibits a 
        transfer of a right to damages for default with respect to the 
        whole lease contract or of a right to payment arising out of the 
        transferor's due performance of the transferor's entire 
        obligation, or (ii) makes the transfer an event of default, is 
        not enforceable, and the transfer is not a transfer that 
        materially impairs the prospect of obtaining return performance 
        by, materially changes the duty of, or materially increases the 
        burden or risk imposed on, the other party to the lease contract 
        within the purview of subsection (5) (4). 
           (5) (4) Subject to subsections subsection (3) 
        and (4) section 336.9-407:  
           (a) if a transfer is made that is made an event of default 
        under a lease agreement, the party to the lease contract not 
        making the transfer, unless that party waives the default or 
        otherwise agrees, has the rights and remedies described in 
        section 336.2A-501(2); 
           (b) if paragraph (a) is not applicable and if a transfer is 
        made that (i) is prohibited under a lease agreement or (ii) 
        materially impairs the prospect of obtaining return performance 
        by, materially changes the duty of, or materially increases the 
        burden or risk imposed on, the other party to the lease 
        contract, unless the party not making the transfer agrees at any 
        time to the transfer in the lease contract or otherwise, then, 
        except as limited by contract, (i) the transferor is liable to 
        the party not making the transfer for damages caused by the 
        transfer to the extent that the damages could not reasonably be 
        prevented by the party not making the transfer and (ii) a court 
        having jurisdiction may grant other appropriate relief, 
        including cancellation of the lease contract or an injunction 
        against the transfer. 
           (6) (5) A transfer of "the lease" or of "all my rights 
        under the lease," or a transfer in similar general terms, is a 
        transfer of rights and, unless the language or the 
        circumstances, as in a transfer for security, indicate the 
        contrary, the transfer is a delegation of duties by the 
        transferor to the transferee.  Acceptance by the transferee 
        constitutes a promise by the transferee to perform those 
        duties.  The promise is enforceable by either the transferor or 
        the other party to the lease contract. 
           (7) (6) Unless otherwise agreed by the lessor and the 
        lessee, a delegation of performance does not relieve the 
        transferor as against the other party of any duty to perform or 
        of any liability for default. 
           (8) (7) In a consumer lease, to prohibit the transfer of an 
        interest of a party under the lease contract or to make a 
        transfer an event of default, the language must be specific, by 
        a writing, and conspicuous. 
           Sec. 10.  Minnesota Statutes 1998, section 336.2A-307, is 
        amended to read: 
           336.2A-307 [PRIORITY OF LIENS ARISING BY ATTACHMENT OR LEVY 
        ON, SECURITY INTERESTS IN, AND OTHER CLAIMS TO GOODS.] 
           (1) Except as otherwise provided in section 336.2A-306, a 
        creditor of a lessee takes subject to the lease contract. 
           (2) Except as otherwise provided in subsections 
        subsection (3) and (4) and in sections 336.2A-306 and 
        336.2A-308, a creditor of a lessor takes subject to the lease 
        contract unless: 
           (a) the creditor holds a lien that attached to the goods 
        before the lease contract became enforceable;. 
           (b) the creditor holds a security interest in the goods and 
        the lessee did not give value and receive delivery of the goods 
        without knowledge of the security interest; or 
           (c) the creditor holds a security interest in the goods 
        which was perfected (section 336.9-303) before the lease 
        contract became enforceable. 
           (3) Except as otherwise provided in sections 336.9-317, 
        336.9-321, and 336.9-323, a lessee in the ordinary course of 
        business takes the a leasehold interest free of subject to a 
        security interest in the goods created by the lessor even though 
        the security interest is perfected (section 336.9-303) and the 
        lessee knows of its existence held by a creditor of the lessor. 
           (4) A lessee other than a lessee in the ordinary course of 
        business takes the leasehold interest free of a security 
        interest to the extent that it secures future advances made 
        after the secured party acquires knowledge of the lease or more 
        than 45 days after the lease contract becomes enforceable, 
        whichever first occurs, unless the future advances are made 
        pursuant to a commitment entered into without knowledge of the 
        lease and before the expiration of the 45-day period. 
           Sec. 11.  Minnesota Statutes 1998, section 336.2A-309, is 
        amended to read: 
           336.2A-309 [LESSOR'S AND LESSEE'S RIGHTS WHEN GOODS BECOME 
        FIXTURES.] 
           (1) In this section: 
           (a) goods are "fixtures" when they become so related to 
        particular real estate that an interest in them arises under 
        real estate law; 
           (b) a "fixture filing" is the filing, in the office where a 
        record of a mortgage on the real estate would be filed or 
        recorded, of a financing statement covering goods that are or 
        are to become fixtures and conforming to the requirements of 
        section 336.9-402(5) 336.9-502(a) and (b); 
           (c) a lease is a "purchase money lease" unless the lessee 
        has possession or use of the goods or the right to possession or 
        use of the goods before the lease agreement is enforceable; 
           (d) a mortgage is a "construction mortgage" to the extent 
        it secures an obligation incurred for the construction of an 
        improvement on land including the acquisition cost of the land, 
        if the recorded writing so indicates; and 
           (e) "encumbrance" includes real estate mortgages and other 
        liens on real estate and all other rights in real estate that 
        are not ownership interests. 
           (2) Under this article a lease may be of goods that are 
        fixtures or may continue in goods that become fixtures, but no 
        lease exists under this article of ordinary building materials 
        incorporated into an improvement on land. 
           (3) This article does not prevent creation of a lease of 
        fixtures pursuant to real estate law. 
           (4) The perfected interest of a lessor of fixtures has 
        priority over a conflicting interest of an encumbrancer or owner 
        of the real estate if: 
           (a) the lease is a purchase money lease, the conflicting 
        interest of the encumbrancer or owner arises before the goods 
        become fixtures, the interest of the lessor is perfected by a 
        fixture filing before the goods become fixtures or within ten 
        days after that, and the lessee has an interest of record in the 
        real estate or is in possession of the real estate; or 
           (b) the interest of the lessor is perfected by a fixture 
        filing before the interest of the encumbrancer or owner is of 
        record, the lessor's interest has priority over any conflicting 
        interest of a predecessor in title of the encumbrancer or owner, 
        and the lessee has an interest of record in the real estate or 
        is in possession of the real estate. 
           (5) The interest of a lessor of fixtures, whether or not 
        perfected, has priority over the conflicting interest of an 
        encumbrancer or owner of the real estate if: 
           (a) the fixtures are readily removable factory or office 
        machines, readily removable equipment that is not primarily used 
        or leased for use in the operation of the real estate, or 
        readily removable replacements of domestic appliances that are 
        goods subject to a consumer lease, and before the goods become 
        fixtures the lease contract is enforceable; or 
           (b) the conflicting interest is a lien on the real estate 
        obtained by legal or equitable proceedings after the lease 
        contract is enforceable; or 
           (c) the encumbrancer or owner has consented in writing to 
        the lease or has disclaimed an interest in the goods as 
        fixtures; or 
           (d) the lessee has a right to remove the goods as against 
        the encumbrancer or owner.  If the lessee's right to remove 
        terminates, the priority of the interest of the lessor continues 
        for a reasonable time. 
           (6) Notwithstanding subsection (4)(a) but otherwise subject 
        to subsections (4) and (5), the interest of a lessor of 
        fixtures, including the lessor's residual interest, is 
        subordinate to the conflicting interest of an encumbrancer of 
        the real estate under a construction mortgage recorded before 
        the goods become fixtures if the goods become fixtures before 
        the completion of the construction.  To the extent given to 
        refinance a construction mortgage, the conflicting interest of 
        an encumbrancer of the real estate under a mortgage has this 
        priority to the same extent as the encumbrancer of the real 
        estate under the construction mortgage. 
           (7) In cases not within the preceding subsections, priority 
        between the interest of a lessor of fixtures, including the 
        lessor's residual interest, and the conflicting interest of an 
        encumbrancer or owner of the real estate who is not the lessee 
        is determined by the priority rules governing conflicting 
        interests in real estate. 
           (8) If the interest of a lessor of fixtures, including the 
        lessor's residual interest, has priority over all conflicting 
        interests of all owners and encumbrancers of the real estate, 
        the lessor or the lessee may (i) on default, expiration, 
        termination, or cancellation of the lease agreement but subject 
        to the lease agreement and this article, or (ii) if necessary to 
        enforce the lessor's or lessee's other rights and remedies under 
        this article; remove the goods from the real estate, free and 
        clear of all conflicting interests of all owners and 
        encumbrancers of the real estate, but the lessor or lessee must 
        reimburse any encumbrancer or owner of the real estate who is 
        not the lessee and who has not otherwise agreed for the cost of 
        repair of any physical injury, but not for any diminution in 
        value of the real estate caused by the absence of the goods 
        removed or by any necessity of replacing them.  A person 
        entitled to reimbursement may refuse permission to remove until 
        the party seeking removal gives adequate security for the 
        performance of this obligation. 
           (9) Even though the lease agreement does not create a 
        security interest, the interest of a lessor of fixtures, 
        including the lessor's residual interest, is perfected by filing 
        a financing statement as a fixture filing for leased goods that 
        are or are to become fixtures in accordance with the relevant 
        provisions of the Article on Secured Transactions (article 9). 
           Sec. 12.  Minnesota Statutes 1998, section 336.4-210, is 
        amended to read: 
           336.4-210 [SECURITY INTEREST OF COLLECTING BANK IN ITEMS, 
        ACCOMPANYING DOCUMENTS, AND PROCEEDS.] 
           (a) A collecting bank has a security interest in an item 
        and any accompanying documents or the proceeds of either: 
           (1) in case of an item deposited in an account, to the 
        extent to which credit given for the item has been withdrawn or 
        applied; 
           (2) in case of an item for which it has given credit 
        available for withdrawal as of right, to the extent of the 
        credit given, whether or not the credit is drawn upon or there 
        is a right of chargeback; or 
           (3) if it makes an advance on or against the item. 
           (b) If credit given for several items received at one time 
        or pursuant to a single agreement is withdrawn or applied in 
        part, the security interest remains upon all the items, any 
        accompanying documents or the proceeds of either.  For the 
        purpose of this section, credits first given are first withdrawn.
           (c) Receipt by a collecting bank of a final settlement for 
        an item is a realization on its security interest in the item, 
        accompanying documents, and proceeds.  So long as the bank does 
        not receive final settlement for the item or give up possession 
        of the item or accompanying documents for purposes other than 
        collection, the security interest continues to that extent and 
        is subject to article 9, but: 
           (1) no security agreement is necessary to make the security 
        interest enforceable (section 336.9-203(1)(a)(b)(3)(A)); 
           (2) no filing is required to perfect the security interest; 
        and 
           (3) the security interest has priority over conflicting 
        perfected security interests in the item, accompanying 
        documents, or proceeds. 
           Sec. 13.  [336.5-118] [SECURITY INTEREST OF ISSUER OR 
        NOMINATED PERSON.] 
           (a) An issuer or nominated person has a security interest 
        in a document presented under a letter of credit to the extent 
        that the issuer or nominated person honors or gives value for 
        the presentation. 
           (b) So long as and to the extent that an issuer or 
        nominated person has not been reimbursed or has not otherwise 
        recovered the value given with respect to a security interest in 
        a document under subsection (a), the security interest continues 
        and is subject to article 9, but: 
           (1) a security agreement is not necessary to make the 
        security interest enforceable under section 336.9-203(b)(3); 
           (2) if the document is presented in a medium other than a 
        written or other tangible medium, the security interest is 
        perfected; and 
           (3) if the document is presented in a written or other 
        tangible medium and is not a certificated security, chattel 
        paper, a document of title, an instrument, or a letter of 
        credit, the security interest is perfected and has priority over 
        a conflicting security interest in the document so long as the 
        debtor does not have possession of the document. 
           Sec. 14.  Minnesota Statutes 1998, section 336.7-503, is 
        amended to read: 
           336.7-503 [DOCUMENT OF TITLE TO GOODS DEFEATED IN CERTAIN 
        CASES.] 
           (1) A document of title confers no right in goods against a 
        person who before issuance of the document had a legal interest 
        or a perfected security interest in them and who neither 
           (a) delivered or entrusted them or any document of title 
        covering them to the bailor or the bailor's nominee with actual 
        or apparent authority to ship, store or sell or with power to 
        obtain delivery under this article (section 336.7-403) or with 
        power of disposition under this chapter (sections 336.2-403 and 
        336.9-307 336.9-320) or other statute or rule of law; nor 
           (b) acquiesced in the procurement by the bailor or the 
        bailor's nominee of any document of title.  
           (2) Title to goods based upon an unaccepted delivery order 
        is subject to the rights of anyone to whom a negotiable 
        warehouse receipt or bill of lading covering the goods has been 
        duly negotiated.  Such a title may be defeated under the next 
        section to the same extent as the rights of the issuer or a 
        transferee from the issuer.  
           (3) Title to goods based upon a bill of lading issued to a 
        freight forwarder is subject to the rights of anyone to whom a 
        bill issued by the freight forwarder is duly negotiated; but 
        delivery by the carrier in accordance with part 4 of this 
        article pursuant to its own bill of lading discharges the 
        carrier's obligation to deliver.  
           Sec. 15.  Minnesota Statutes 1998, section 336.8-103, is 
        amended to read: 
           336.8-103 [RULES FOR DETERMINING WHETHER CERTAIN 
        OBLIGATIONS AND INTERESTS ARE SECURITIES OR FINANCIAL ASSETS.] 
           (a) A share or similar equity interest issued by a 
        corporation, business trust, joint stock company, or similar 
        entity is a security. 
           (b) An "investment company security" is a security.  
        "Investment company security" means a share or similar equity 
        interest issued by an entity that is registered as an investment 
        company under the federal investment company laws, an interest 
        in a unit investment trust that is so registered, or a 
        face-amount certificate issued by a face-amount certificate 
        company that is so registered.  Investment company security does 
        not include an insurance policy or endowment policy or annuity 
        contract issued by an insurance company. 
           (c) An interest in a partnership or limited liability 
        company is a general intangible and is not a security or a 
        financial asset, except as follows: 
           (1) An interest in a partnership or limited liability 
        company is a security and is not a general intangible if it is 
        dealt in or traded on a securities exchange or in a securities 
        market, its terms expressly provide that it is a security 
        governed by this article, or it is an investment company 
        security.  
           (2) An interest in a partnership or limited liability 
        company is a financial asset and is not a general intangible if 
        it is held in a securities account. 
           (d) A writing that is a security certificate is governed by 
        this article and not by article 3, even though it also meets the 
        requirements of that article.  However, a negotiable instrument 
        governed by article 3 is a financial asset if it is held in a 
        securities account. 
           (e) An option or similar obligation issued by a clearing 
        corporation to its participants is not a security, but is a 
        financial asset. 
           (f) A commodity contract, as defined in section 336.9-115 
        336.9-102(a)(15), is not a security or a financial asset. 
           Sec. 16.  Minnesota Statutes 1998, section 336.8-106, is 
        amended to read: 
           336.8-106 [CONTROL.] 
           (a) A purchaser has "control" of a certificated security in 
        bearer form if the certificated security is delivered to the 
        purchaser. 
           (b) A purchaser has "control" of a certificated security in 
        registered form if the certificated security is delivered to the 
        purchaser, and: 
           (1) the certificate is endorsed to the purchaser or in 
        blank by an effective endorsement; or 
           (2) the certificate is registered in the name of the 
        purchaser, upon original issue or registration of transfer by 
        the issuer. 
           (c) A purchaser has "control" of an uncertificated security 
        if: 
           (1) the uncertificated security is delivered to the 
        purchaser; or 
           (2) the issuer has agreed that it will comply with 
        instructions originated by the purchaser without further consent 
        by the registered owner. 
           (d) A purchaser has "control" of a security entitlement if: 
           (1) the purchaser becomes the entitlement holder; or 
           (2) the securities intermediary has agreed that it will 
        comply with entitlement orders originated by the purchaser 
        without further consent by the entitlement holder; or 
           (3) another person has control of the security entitlement 
        on behalf of the purchaser or, having previously acquired 
        control of the security entitlement, acknowledges that it has 
        control on behalf of the purchaser. 
           (e) If an interest in a security entitlement is granted by 
        the entitlement holder to the entitlement holder's own 
        securities intermediary, the securities intermediary has control.
           (f) A purchaser who has satisfied the requirements of 
        subsection (c)(2) (c) or (d)(2) (d) has control, even if the 
        registered owner in the case of subsection (c)(2) (c) or the 
        entitlement holder in the case of subsection (d)(2) (d) retains 
        the right to make substitutions for the uncertificated security 
        or security entitlement, to originate instructions or 
        entitlement orders to the issuer or securities intermediary, or 
        otherwise to deal with the uncertificated security or security 
        entitlement. 
           (g) An issuer or a securities intermediary may not enter 
        into an agreement of the kind described in subsection (c)(2) or 
        (d)(2) without the consent of the registered owner or 
        entitlement holder, but an issuer or a securities intermediary 
        is not required to enter into such an agreement even though the 
        registered owner or entitlement holder so directs.  An issuer or 
        securities intermediary that has entered into such an agreement 
        is not required to confirm the existence of the agreement to 
        another party unless requested to do so by the registered owner 
        or entitlement holder. 
           Sec. 17.  Minnesota Statutes 1998, section 336.8-110, is 
        amended to read: 
           336.8-110 [APPLICABILITY; CHOICE OF LAW.] 
           (a) The local law of the issuer's jurisdiction, as 
        specified in subsection (d), governs: 
           (1) the validity of a security; 
           (2) the rights and duties of the issuer with respect to 
        registration of transfer; 
           (3) the effectiveness of registration of transfer by the 
        issuer; 
           (4) whether the issuer owes any duties to an adverse 
        claimant to a security; and 
           (5) whether an adverse claim can be asserted against a 
        person to whom transfer of a certificated or uncertificated 
        security is registered or a person who obtains control of an 
        uncertificated security. 
           (b) The local law of the securities intermediary's 
        jurisdiction, as specified in subsection (e), governs: 
           (1) acquisition of a security entitlement from the 
        securities intermediary; 
           (2) the rights and duties of the securities intermediary 
        and entitlement holder arising out of a security entitlement; 
           (3) whether the securities intermediary owes any duties to 
        an adverse claimant to a security entitlement; and 
           (4) whether an adverse claim can be asserted against a 
        person who acquires a security entitlement from the securities 
        intermediary or a person who purchases a security entitlement or 
        interest therein from an entitlement holder. 
           (c) The local law of the jurisdiction in which a security 
        certificate is located at the time of delivery governs whether 
        an adverse claim can be asserted against a person to whom the 
        security certificate is delivered. 
           (d) "Issuer's jurisdiction" means the jurisdiction under 
        which the issuer of the security is organized or, if permitted 
        by the law of that jurisdiction, the law of another jurisdiction 
        specified by the issuer.  An issuer organized under the law of 
        this state may specify the law of another jurisdiction as the 
        law governing the matters specified in subsection (a)(2) through 
        (5). 
           (e) The following rules determine a "securities 
        intermediary's jurisdiction" for purposes of this section: 
           (1) If an agreement between the securities intermediary and 
        its entitlement holder specifies that it is governed by the law 
        of governing the securities account expressly provides that a 
        particular jurisdiction is the securities intermediary's 
        jurisdiction for purposes of this part, this article, or this 
        act, that jurisdiction is the securities intermediary's 
        jurisdiction. 
           (2) If paragraph (1) does not apply and an agreement 
        between the securities intermediary and its entitlement holder 
        governing the securities account expressly provides that the 
        agreement is governed by the law of a particular jurisdiction, 
        that jurisdiction is the securities intermediary's jurisdiction. 
           (3) If neither paragraph (1) nor (2) applies and an 
        agreement between the securities intermediary and its 
        entitlement holder does not specify the governing law as 
        provided in paragraph (1), but the securities account expressly 
        specifies provides that the securities account is maintained at 
        an office in a particular jurisdiction, that jurisdiction is the 
        securities intermediary's jurisdiction. 
           (3) (4) If an agreement between the securities intermediary 
        and its entitlement holder does not specify a jurisdiction as 
        provided in paragraph (1) or (2) none of the preceding 
        paragraphs apply, the securities intermediary's jurisdiction is 
        the jurisdiction in which is located the office identified in an 
        account statement as the office serving the entitlement holder's 
        account is located. 
           (4) (5) If an agreement between the securities intermediary 
        and its entitlement holder does not specify a jurisdiction as 
        provided in paragraph (1) or (2) and an account statement does 
        not identify an office serving the entitlement holder's account 
        as provided in paragraph (3) none of the preceding paragraphs 
        apply, the securities intermediary's jurisdiction is the 
        jurisdiction in which is located the chief executive office of 
        the securities intermediary is located. 
           (f) A securities intermediary's jurisdiction is not 
        determined by the physical location of certificates representing 
        financial assets, or by the jurisdiction in which is organized 
        the issuer of the financial asset with respect to which an 
        entitlement holder has a security entitlement, or by the 
        location of facilities for data processing or other 
        recordkeeping concerning the account. 
           Sec. 18.  Minnesota Statutes 1998, section 336.8-301, is 
        amended to read: 
           336.8-301 [DELIVERY.] 
           (a) Delivery of a certificated security to a purchaser 
        occurs when: 
           (1) the purchaser acquires possession of the security 
        certificate; 
           (2) another person, other than a securities intermediary, 
        either acquires possession of the security certificate on behalf 
        of the purchaser or, having previously acquired possession of 
        the certificate, acknowledges that it holds for the purchaser; 
        or 
           (3) a securities intermediary acting on behalf of the 
        purchaser acquires possession of the security certificate, only 
        if the certificate is in registered form and has been is (i) 
        registered in the name of the purchaser, (ii) payable to the 
        order of the purchaser, or (iii) specially endorsed to the 
        purchaser by an effective endorsement and has not been endorsed 
        to the securities intermediary or in blank. 
           (b) Delivery of an uncertificated security to a purchaser 
        occurs when: 
           (1) the issuer registers the purchaser as the registered 
        owner, upon original issue or registration of transfer; or 
           (2) another person, other than a securities intermediary, 
        either becomes the registered owner of the uncertificated 
        security on behalf of the purchaser or, having previously become 
        the registered owner, acknowledges that it holds for the 
        purchaser.  
           Sec. 19.  Minnesota Statutes 1998, section 336.8-302, is 
        amended to read: 
           336.8-302 [RIGHTS OF PURCHASER.] 
           (a) Except as otherwise provided in subsections (b) and 
        (c), upon delivery a purchaser of a certificated or 
        uncertificated security to a purchaser, the purchaser acquires 
        all rights in the security that the transferor had or had power 
        to transfer. 
           (b) A purchaser of a limited interest acquires rights only 
        to the extent of the interest purchased. 
           (c) A purchaser of a certificated security who as a 
        previous holder had notice of an adverse claim does not improve 
        its position by taking from a protected purchaser. 
           Sec. 20.  Minnesota Statutes 1998, section 336.8-510, is 
        amended to read: 
           336.8-510 [RIGHTS OF PURCHASER OF SECURITY ENTITLEMENT FROM 
        ENTITLEMENT HOLDER.] 
           (a) In a case not covered by the priority rules in article 
        9 or the rules stated in subsection (c), an action based on an 
        adverse claim to a financial asset or security entitlement, 
        whether framed in conversion, replevin, constructive trust, 
        equitable lien, or other theory, may not be asserted against a 
        person who purchases a security entitlement, or an interest 
        therein, from an entitlement holder if the purchaser gives 
        value, does not have notice of the adverse claim, and obtains 
        control.  
           (b) If an adverse claim could not have been asserted 
        against an entitlement holder under section 336.8-502, the 
        adverse claim cannot be asserted against a person who purchases 
        a security entitlement, or an interest therein, from the 
        entitlement holder.  
           (c) In a case not covered by the priority rules in article 
        9, a purchaser for value of a security entitlement, or an 
        interest therein, who obtains control has priority over a 
        purchaser of a security entitlement, or an interest therein, who 
        does not obtain control.  Except as otherwise provided in 
        subsection (d), purchasers who have control rank equally, except 
        that a according to priority in time of: 
           (1) the purchaser's becoming the person for whom the 
        securities account, in which the security entitlement is 
        carried, is maintained, if the purchaser obtained control under 
        section 336.8-106(d)(1); 
           (2) the securities intermediary's agreement to comply with 
        the purchaser's entitlement orders with respect to security 
        entitlements carried or to be carried in the securities account 
        in which the security entitlement is carried, if the purchaser 
        obtained control under section 336.8-106(d)(2); or 
           (3) if the purchaser obtained control through another 
        person under section 336.8-106(d)(3), the time on which priority 
        would be based under this subsection if the other person were 
        the secured party. 
           (d) A securities intermediary as purchaser has priority 
        over a conflicting purchaser who has control, unless otherwise 
        agreed by the securities intermediary. 
           Presented to the governor April 11, 2000 
           Signed by the governor April 14, 2000, 2:12 p.m.