ORIGINAL HOUSE ENGROSSED

BILL NO. 0111

ENROLLED ACT NO. 85, HOUSE OF REPRESENTATIVES

FIFTY-SIXTH LEGISLATURE OF THE STATE OF WYOMING

2001 GENERAL SESSION

AN ACT relating to revisions of article 9 of the Uniform
Commercial Code; providing for a central filing system at
the office of the secretary of state; maintaining local
filing to perfect a security interest in a motor vehicle;
making an appropriation; authorizing additional positions;
requiring a local area network to be implemented by July 1,
2002; and providing for effective dates.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1. W.S. 34.1-9-101 through 34.1-9-708 are
repealed and recreated to read:

ARTICLE 9

SECURED TRANSACTIONS

34.1-9-101. Short title.

This article may be cited as Uniform Commercial Code-
Secured Transactions.

34.1-9-102. Definitions and index of definitions.

(a) In this article:

(i) "Accession" means goods that are physically
united with other goods in such a manner that the identity
of the original goods is not lost;

(ii) "Account", except as used in "account for",
means a right to payment of a monetary obligation, whether
or not earned by performance, (1) for property that has
been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (2) for services rendered or to be
rendered, (3) for a policy of insurance issued or to be

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issued, (4) for a secondary obligation incurred or to be
incurred, (5) for energy provided or to be provided, (6)
for the use or hire of a vessel under a charter or other
contract, (7) arising out of the use of a credit or charge
card or information contained on or for use with the card
or (8) 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 (1) rights to payment evidenced by chattel
paper or an instrument, (2) commercial tort claims, (3)
deposit accounts, (4) investment property, (5) letter-of-
credit rights or letters of credit, or (6) 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;

(iii) "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;

(iv) "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 thirty-five (35)
days earlier or thirty-five (35) days later than the date
of the record; and

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(v) "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

(vi) "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

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(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.

(vii) "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.

(viii) "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;

(ix) "Cash proceeds" means proceeds that are
money, checks, deposit accounts or the like;

(x) "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;

(xi) "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

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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
charters or other contracts involving the use or hire of a
vessel or 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;

(xii) "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

(xiii) "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

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(II) Does not include damages arising
out of personal injury to or the death of an individual.

(xiv) "Commodity account" means an account
maintained by a commodity intermediary in which a commodity
contract is carried for a commodity customer;

(xv) "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
laws; 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.

(xvi) "Commodity customer" means a person for
which a commodity intermediary carries a commodity contract
on its books;

(xvii) "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.

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(xviii) "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.

(xix) "Consignee" means a merchant to which
goods are delivered in a consignment;

(xx) "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 one thousand dollars
($1,000.00) or more at the time of delivery;

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(D) The transaction does not create a
security interest that secures an obligation.

(xxi) "Consignor" means a person that delivers
goods to a consignee in a consignment;

(xxii) "Consumer debtor" means a debtor in a
consumer transaction;

(xxiii) "Consumer goods" means goods that are
used or bought for use primarily for personal, family or
household purposes;

(xxiv) "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.

(xxv) "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;

(xxvi) "Consumer transaction" means a
transaction in which (1) an individual incurs an obligation
primarily for personal, family or household purposes, (2) a
security interest secures the obligation, and (3) the
collateral is held or acquired primarily for personal,

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family or household purposes. The term includes
consumer-goods transactions;

(xxvii) "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.

(xxviii) "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

(xxix) "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;

(xxx) "Document" means a document of title or a
receipt of the type described in section 34.1-7-201(b);

(xxxi) "Electronic chattel paper" means chattel
paper evidenced by a record or records consisting of
information stored in an electronic medium;

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(xxxii) "Encumbrance" means a right, other than
an ownership interest, in real property. The term includes
mortgages and other liens on real property;

(xxxiii) "Equipment" means goods other than
inventory, farm products or consumer goods;

(xxxiv) "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;

(D) Products of crops or livestock in their
unmanufactured states.

(xxxv) "Farming operation" means raising,
cultivating, propagating, fattening, grazing or any other
farming, livestock or aquacultural operation;

(xxxvi) "File number" means the number assigned
to an initial financing statement pursuant to section
34.1-9-519(a);

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(xxxvii) "Filing office" means an office
designated in section 34.1-9-501 as the place to file a
financing statement;

(xxxviii) "Filing-office rule" means a rule
adopted pursuant to section 34.1-9-526;

(xxxix) "Financing statement" means a record or
records composed of an initial financing statement and any
filed record relating to the initial financing statement;

(xl) "Fixture filing" means the filing of a
financing statement covering goods that are or are to
become fixtures and satisfying section 34.1-9-502(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;

(xli) "Fixtures" means goods that have become so
related to particular real property that an interest in
them arises under real property law;

(xlii) "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;

(xliii) "Good faith" means honesty in fact and
the observance of reasonable commercial standards of fair
dealing;

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(xliv) "Goods" means all things that are movable
when a security interest attaches. The term includes (1)
fixtures, (2) standing timber that is to be cut and removed
under a conveyance or contract for sale, (3) the unborn
young of animals, (4) crops grown, growing or to be grown,
even if the crops are produced on trees, vines or bushes,
and (5) 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 (1) the program is associated
with the goods in such a manner that it customarily is
considered part of the goods, or (2) 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;

(xlv) "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;

(xlvi) "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;

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(xlvii) "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 indorsement or assignment. The term does not
include (1) investment property, (2) letters of credit or
(3) 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;

(xlviii) "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;

(D) Consist of raw materials, work in
process or materials used or consumed in a business.

(xlix) "Investment property" means a security,
whether certificated or uncertificated, security
entitlement, securities account, commodity contract or
commodity account;

(l) "Jurisdiction of organization", with respect
to a registered organization, means the jurisdiction under
whose law the organization is organized;

(li) "Letter-of-credit right" means a right to
payment or performance under a letter of credit, whether or

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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;

(lii) "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;

(D) A receiver in equity from the time of
appointment.

(liii) "Manufactured home" means a structure,
transportable in one (1) or more sections, which, in the
traveling mode, is eight (8) body feet or more in width or
forty (40) body feet or more in length, or, when erected on
site, is three hundred twenty (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 title 42 of the United States Code;

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(liv) "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.

(lv) "Mortgage" means a consensual interest in
real property, including fixtures, which secures payment or
performance of an obligation;

(lvi) "New debtor" means a person that becomes
bound as debtor under section 34.1-9-203(d) by a security
agreement previously entered into by another person;

(lvii) "New value" means (1) money, (2) money's
worth in property, services or new credit or (3) 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;

(lviii) "Noncash proceeds" means proceeds other
than cash proceeds;

(lix) "Obligor" means a person that, with
respect to an obligation secured by a security interest in
or an agricultural lien on the collateral, (1) owes payment
or other performance of the obligation, (2) has provided
property other than the collateral to secure payment or
other performance of the obligation or (3) is otherwise
accountable in whole or in part for payment or other

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performance of the obligation. The term does not include
issuers or nominated persons under a letter of credit;

(lx) "Original debtor," except as used in W.S.
34.1-9-310(c), means a person that, as debtor, entered into
a security agreement to which a new debtor has become bound
under section 34.1-9-203(d);

(lxi) "Payment intangible" means a general
intangible under which the account debtor's principal
obligation is a monetary obligation;

(lxii) "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;

(D) Any other relative, by blood or
marriage, of the individual or the individual's spouse who
shares the same home with the individual.

(lxiii) "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;

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(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.

(lxiv) "Proceeds", except as used in section
34.1-9-609(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;

(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

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nonconformity of, defects or infringement of rights in, or
damage to, the collateral.

(lxv) "Production-money crops" means crops that
secure a production-money obligation incurred with respect
to the production of those crops;

(lxvi) "Production-money obligation" means an
obligation of an obligor incurred for new value given to
enable the debtor to produce crops if the value is in fact
used for the production of the crops;

(lxvii) "Production of crops" includes tilling
and otherwise preparing land for growing, planting,
cultivating, fertilizing, irrigating, harvesting and
gathering crops and protecting them from damage or disease;

(lxviii) "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;

(lxix) "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 34.1-9-620, 34.1-9-621 and 34.1-9-622;

(lxx) "Public-finance transaction" means a
secured transaction in connection with which:

(A) Debt securities are issued;

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(B) All or a portion of the securities
issued have an initial stated maturity of at least twenty
(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.

(lxxi) "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;

(lxxii) "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;

(lxxiii) "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;

(lxxiv) "Secondary obligor" means an obligor to
the extent that:

(A) The obligor's obligation is secondary;
or

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(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.

(lxxv) "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;

(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 34.1-2-401, 34.1-2-505,
34.1-2-711(c), 34.1-2A-508(e), 34.1-4-210 or 34.1-5-118.

(lxxvi) "Security agreement" means an agreement
that creates or provides for a security interest;

(lxxvii) "Send", in connection with a record or
notification, means:

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(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).

(lxxviii) "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;

(lxxix) "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;

(lxxx) "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;

(lxxxi) "Tangible chattel paper" means chattel
paper evidenced by a record or records consisting of
information that is inscribed on a tangible medium;

(lxxxii) "Termination statement" means an
amendment of a financing statement which:

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(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.

(lxxxiii) "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;

(D) Transmitting or producing and
transmitting electricity, steam, gas or water.

(b) The following definitions in other articles apply
to this article:

"Applicant" Section 34.1-5-102.

"Beneficiary" Section 34.1-5-102.

"Broker" Section 34.1-8-102.

"Certificated security" Section 34.1-8-102.

"Check" Section 34.1-3-104.

"Clearing corporation" Section 34.1-8-102.

"Contract for sale" Section 34.1-2-106.

"Customer" Section 34.1-4-104.

"Entitlement holder" Section 34.1-8-102.

"Financial asset" Section 34.1-8-102.

"Holder in due course" Section 34.1-3-302.

"Issuer" (with respect to a

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letter of credit or

letter-of-credit right) Section 34.1-5-102.

"Issuer" (with respect to a

security) Section 34.1-8-201.

"Lease" Section 34.1-2A-103.

"Lease agreement" Section 34.1-2A-103.

"Lease contract" Section 34.1-2A-103.

"Leasehold interest" Section 34.1-2A-103.

"Lessee" Section 34.1-2A-103.

"Lessee in ordinary course of

business" Section 34.1-2A-103.

"Lessor" Section 34.1-2A-103.

"Lessor's residual interest" Section 34.1-2A-103.

"Letter of credit" Section 34.1-5-102.

"Merchant" Section 34.1-2-104.

"Negotiable instrument" Section 34.1-3-104.

"Nominated person" Section 34.1-5-102.

"Note" Section 34.1-3-104.

"Proceeds of a letter of

credit" Section 34.1-5-114.

"Prove" Section 34.1-3-103.

"Sale" Section 34.1-2-106.

"Securities account" Section 34.1-8-501.

"Securities intermediary" Section 34.1-8-102.

"Security" Section 34.1-8-102.

"Security certificate" Section 34.1-8-102.

"Security entitlement" Section 34.1-8-102.

"Uncertificated security" Section 34.1-8-102.

(c) Article 1 contains general definitions and
principles of construction and interpretation applicable
throughout this article.

34.1-9-103. Purchase-money security interest;
application of payments; burden of establishing.

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(a) In this section:

(i) "Purchase-money collateral" means goods or
software that secures a purchase-money obligation incurred
with respect to that collateral; and

(ii) "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) A security interest in goods is a purchase-money
security interest:

(i) To the extent that the goods are
purchase-money collateral with respect to that security
interest;

(ii) 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

(iii) 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) 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:

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(i) The debtor acquired its interest in the
software in an integrated transaction in which it acquired
an interest in the goods; and

(ii) The debtor acquired its interest in the
software for the principal purpose of using the software in
the goods.

(d) The security interest of a consignor in goods
that are the subject of a consignment is a purchase-money
security interest in inventory.

(e) 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:

(i) In accordance with any reasonable method of
application to which the parties agree;

(ii) 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

(iii) 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 (1) obligation is
secured, to obligations secured by purchase-money security

Page 25

interests in the order in which those obligations were
incurred.

(f) In a transaction other than a consumer-goods
transaction, a purchase-money security interest does not
lose its status as such, even if:

(i) The purchase-money collateral also secures
an obligation that is not a purchase-money obligation;

(ii) Collateral that is not purchase-money
collateral also secures the purchase-money obligation; or

(iii) The purchase-money obligation has been
renewed, refinanced, consolidated or restructured.

(g) 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) 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.

34.1-9-103A. "Production-money crops"; "production-
money obligation"; production-money security interest;
burden of establishing.

Page 26

(a) A security interest in crops is a
production-money security interest to the extent that the
crops are production-money crops.

(b) If the extent to which a security interest is a
production-money security interest depends on the
application of a payment to a particular obligation, the
payment must be applied:

(i) In accordance with any reasonable method of
application to which the parties agree;

(ii) 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

(iii) 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 (1) obligation is
secured, to obligations secured by production-money
security interests in the order in which those obligations
were incurred.

(i) The production-money crops also secure an
obligation that is not a production-money obligation;

(ii) Collateral that is not production-money
crops also secures the production-money obligation; or

Page 27

(iii) The production-money obligation has been
renewed, refinanced or restructured.

(d) A secured party claiming a production-money
security interest has the burden of establishing the extent
to which the security interest is a production-money
security interest.

34.1-9-104. Control of deposit account.

(a) A secured party has control of a deposit account
if:

(i) The secured party is the bank with which the
deposit account is maintained;

(ii) 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

(iii) The secured party becomes the bank's
customer with respect to the deposit account.

(b) 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.

34.1-9-105. Control of electronic chattel paper.

(a) 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:

Page 28

(i) A single authoritative copy of the record or
records exists which is unique, identifiable and, except as
otherwise provided in paragraphs (iv), (v) and (vi),
unalterable;

(ii) The authoritative copy identifies the
secured party as the assignee of the record or records;

(iii) The authoritative copy is communicated to
and maintained by the secured party or its designated
custodian;

(iv) 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;

(v) 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

(vi) Any revision of the authoritative copy is
readily identifiable as an authorized or unauthorized
revision.

34.1-9-106. Control of investment property.

(a) A person has control of a certificated security,
uncertificated security or security entitlement as provided
in section 34.1-8-106.

(b) A secured party has control of a commodity
contract if:

(i) The secured party is the commodity
intermediary with which the commodity contract is carried;
or

Page 29

(ii) 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) 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.

34.1-9-107. 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 34.1-5-114(c) or otherwise
applicable law or practice.

34.1-9-108. Sufficiency of description.

(a) 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) Except as otherwise provided in subsection (d), a
description of collateral reasonably identifies the
collateral if it identifies the collateral by:

(i) Specific listing;

(ii) Category;

Page 30

(iii) Except as otherwise provided in subsection
(e), a type of collateral defined in this title;

(iv) Quantity;

(v) Computational or allocational formula or
procedure; or

(vi) Except as otherwise provided in subsection
(c), any other method, if the identity of the collateral is
objectively determinable.

(c) 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) Except as otherwise provided in subsection (e), a
description of a security entitlement, securities account
or commodity account is sufficient if it describes:

(i) The collateral by those terms or as
investment property; or

(ii) The underlying financial asset or commodity
contract.

(e) A description only by type of collateral defined
in this title is an insufficient description of:

(i) A commercial tort claim; or

(ii) In a consumer transaction, consumer goods,
a security entitlement, a securities account or a commodity
account.

Page 31

SUBPART 2

APPLICABILITY OF ARTICLE

34.1-9-109. Scope.

(a) Except as otherwise provided in subsections (c)
and (d), this article applies to:

(i) A transaction, regardless of its form, that
creates a security interest in personal property or
fixtures by contract;

(ii) An agricultural lien;

(iii) A sale of accounts, chattel paper, payment
intangibles or promissory notes;

(iv) A consignment;

(v) A security interest arising under section
34.1-2-401, 34.1-2-505, 34.1-2-711(c) or 34.1-2A-508(e), as
provided in section 34.1-9-110; and

(vi) A security interest arising under section
34.1-4-210 or 34.1-5-118.

(b) 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.

(i) A statute, regulation or treaty of the
United States preempts this article;

Page 32

(ii) 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;

(iii) 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

(iv) The rights of a transferee beneficiary or
nominated person under a letter of credit are independent
and superior under section 34.1-5-114.

(d) This article does not apply to:

(i) A landlord's lien, other than an
agricultural lien;

(ii) A lien, other than an agricultural lien,
given by statute or other rule of law for services or
materials, but section 34.1-9-333 applies with respect to
priority of the lien;

(iii) An assignment of a claim for wages, salary
or other compensation of an employee;

(iv) A sale of accounts, chattel paper, payment
intangibles or promissory notes as part of a sale of the
business out of which they arose;

(v) An assignment of accounts, chattel paper,
payment intangibles or promissory notes which is for the
purpose of collection only;

Page 33

(vi) An assignment of a right to payment under a
contract to an assignee that is also obligated to perform
under the contract;

(vii) An assignment of a single account, payment
intangible or promissory note to an assignee in full or
partial satisfaction of a preexisting indebtedness;

(viii) 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 34.1-9-315
and 34.1-9-322 apply with respect to proceeds and
priorities in proceeds;

(ix) An assignment of a right represented by a
judgment, other than a judgment taken on a right to payment
that was collateral;

(x) A right of recoupment or set-off, but:

(A) Section 34.1-9-340 applies with respect
to the effectiveness of rights of recoupment or set-off
against deposit accounts; and

(B) Section 34.1-9-404 applies with respect
to defenses or claims of an account debtor;

(xi) 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:

Page 34

(A) Liens on real property in sections
34.1-9-203 and 34.1-9-308;

(B) Fixtures in section 34.1-9-334;

(D) Security agreements covering personal
and real property in section 34.1-9-604;

(xii) An assignment of a claim arising in tort,
other than a commercial tort claim, but sections 34.1-9-315
and 34.1-9-322 apply with respect to proceeds and
priorities in proceeds;

(xiii) An assignment of a deposit account in a
consumer transaction, but sections 34.1-9-315 and
34.1-9-322 apply with respect to proceeds and priorities in
proceeds; or

(xiv) Notwithstanding paragraph (c)(ii) of this
section, a transfer by this state or governmental unit of
this state.

34.1-9-110. Security interests arising under article
2 or 2A.

(a) A security interest arising under section
34.1-2-401, 34.1-2-505, 34.1-2-711(c) or 34.1-2A-508(e) is
subject to this article. However, until the debtor obtains
possession of the goods:

(i) The security interest is enforceable, even
if section 34.1-9-203(b)(iii) has not been satisfied;

Page 35

(ii) Filing is not required to perfect the
security interest;

(iii) The rights of the secured party after
default by the debtor are governed by article 2 or 2A; and

(iv) 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

34.1-9-201. General effectiveness of security
agreement.

(a) Except as otherwise provided in this title, a
security agreement is effective according to its terms
between the parties, against purchasers of the collateral,
and against creditors.

(b) A transaction subject to this article is subject
to any applicable rule of law which establishes a different
rule for consumers, to any other statute or regulation of
this state that regulates the rates, charges, agreements
and practices for loans, credit sales or other extensions
of credit and to any consumer-protection statute or
regulation of this state.

(c) 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.

Page 36

Failure to comply with a statute or regulation described in
subsection (b) has only the effect the statute or
regulation specifies.

(d) This article does not:

(i) Validate any rate, charge, agreement or
practice that violates a rule of law, statute or regulation
described in subsection (b); or

(ii) Extend the application of the rule of law,
statute or regulation to a transaction not otherwise
subject to it.

34.1-9-202. 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.

34.1-9-203. Attachment and enforceability of security
interest; proceeds; supporting obligations; formal
requisites.

(a) 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) Except as otherwise provided in subsections (c)
through (j), a security interest is enforceable against the
debtor and third parties with respect to the collateral
only if:

Page 37

(i) Value has been given;

(ii) The debtor has rights in the collateral or
the power to transfer rights in the collateral to a secured
party; and

(iii) One (1) 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 34.1-9-313 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
34.1-8-301 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 34.1-9-104, 34.1-9-105, 34.1-9-106 or
34.1-9-107 pursuant to the debtor's security agreement.

(c) Subsection (b) is subject to section 34.1-4-210
on the security interest of a collecting bank, section
34.1-5-118 on the security interest of a letter-of-credit
issuer or nominated person, section 34.1-9-110 on a
security interest arising under article 2 or 2A, and

Page 38

section 34.1-9-206 on security interests in investment
property.

(d) 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:

(i) The security agreement becomes effective to
create a security interest in the person's property; or

(ii) 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) If a new debtor becomes bound as debtor by a
security agreement entered into by another person:

(i) The agreement satisfies paragraph (b)(iii)
with respect to existing or after-acquired property of the
new debtor to the extent the property is described in the
agreement; and

(ii) Another agreement is not necessary to make
a security interest in the property enforceable.

(f) The attachment of a security interest in
collateral gives the secured party the rights to proceeds
provided by section 34.1-9-315 and is also attachment of a
security interest in a supporting obligation for the
collateral.

(g) 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

Page 39

of a security interest in the security interest, mortgage
or other lien.

(h) 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.

(j) 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.

34.1-9-204. After-acquired property; future advances.

(a) Except as otherwise provided in subsection (b), a
security agreement may create or provide for a security
interest in after-acquired collateral.

(b) A security interest does not attach under a term
constituting an after-acquired property clause to:

(i) Consumer goods, other than an accession when
given as additional security, unless the debtor acquires
rights in them within ten (10) days after the secured party
gives value; or

(ii) A commercial tort claim.

(c) 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.

Page 40

34.1-9-205. Use or disposition of collateral
permissible.

(a) A security interest is not invalid or fraudulent
against creditors solely because:

(i) 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;

(D) Use, commingle or dispose of proceeds;
or

(ii) The secured party fails to require the
debtor to account for proceeds or replace collateral.

(b) 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.

34.1-9-206. Security interest arising in purchase or
delivery of financial asset.

(a) A security interest in favor of a securities
intermediary attaches to a person's security entitlement
if:

Page 41

(i) 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

(ii) The securities intermediary credits the
financial asset to the buyer's securities account before
the buyer pays the securities intermediary.

(b) The security interest described in subsection (a)
secures the person's obligation to pay for the financial
asset.

(c) 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:

(i) The security or other financial asset:

(A) In the ordinary course of business is
transferred by delivery with any necessary indorsement or
assignment; and

(B) Is delivered under an agreement between
persons in the business of dealing with such securities or
financial assets; and

(ii) The agreement calls for delivery against
payment.

(d) The security interest described in subsection (c)
secures the obligation to make payment for the delivery.

SUBPART 2

RIGHTS AND DUTIES

Page 42

34.1-9-207. Rights and duties of secured party having
possession or control of collateral.

(a) 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) Except as otherwise provided in subsection (d),
if a secured party has possession of collateral:

(i) 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;

(ii) The risk of accidental loss or damage is on
the debtor to the extent of a deficiency in any effective
insurance coverage;

(iii) The secured party shall keep the
collateral identifiable, but fungible collateral may be
commingled; and

(iv) 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

Page 43

(c) Except as otherwise provided in subsection (d), a
secured party having possession of collateral or control of
collateral under section 34.1-9-104, 34.1-9-105, 34.1-9-106
or 34.1-9-107:

(i) May hold as additional security any
proceeds, except money or funds, received from the
collateral;

(ii) Shall apply money or funds received from
the collateral to reduce the secured obligation, unless
remitted to the debtor; and

(iii) May create a security interest in the
collateral.

(d) If the secured party is a buyer of accounts,
chattel paper, payment intangibles or promissory notes or a
consignor:

(i) 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

(ii) Subsections (b) and (c) do not apply.

Page 44

34.1-9-208. Additional duties of secured party having
control of collateral.

(a) 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) Within ten (10) days after receiving an
authenticated demand by the debtor:

(i) A secured party having control of a deposit
account under section 34.1-9-104(a)(ii) 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;

(ii) A secured party having control of a deposit
account under section 34.1-9-104(a)(iii) 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;

(iii) A secured party, other than a buyer,
having control of electronic chattel paper under section
34.1-9-105 shall:

(A) Communicate the authoritative copy of
the electronic chattel paper to the debtor or its
designated custodian;

Page 45

(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.

(iv) A secured party having control of
investment property under section 34.1-8-106(d)(ii) or
34.1-9-106(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

(v) A secured party having control of a
letter-of-credit right under section 34.1-9-107 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.

34.1-9-209. Duties of secured party if account debtor
has been notified of assignment.

Page 46

(a) Except as otherwise provided in subsection (c),
this section applies if:

(i) There is no outstanding secured obligation;
and

(ii) The secured party is not committed to make
advances, incur obligations or otherwise give value.

(b) Within ten (10) 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 34.1-9-406(a) an authenticated record that releases
the account debtor from any further obligation to the
secured party.

(c) This section does not apply to an assignment
constituting the sale of an account, chattel paper or
payment intangible.

34.1-9-210. Request for accounting; request regarding
list of collateral or statement of account.

(a) In this section:

(i) "Request" means a record of a type described
in paragraph (ii), (iii) or (iv);

(ii) "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;

Page 47

(iii) "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;

(iv) "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) 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 fourteen (14)
days after receipt:

(i) In the case of a request for an accounting,
by authenticating and sending to the debtor an accounting;
and

(ii) 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) 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 fourteen (14)
days after receipt.

Page 48

(d) 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 fourteen (14) days after receipt by sending to the
debtor an authenticated record:

(i) Disclaiming any interest in the collateral;
and

(ii) 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) 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 fourteen
(14) days after receipt by sending to the debtor an
authenticated record:

(i) Disclaiming any interest in the obligations;
and

(ii) 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) A debtor is entitled without charge to one (1)
response to a request under this section during any six (6)
month period. The secured party may require payment of a
charge not exceeding twenty-five dollars ($25.00) for each
additional response.

Page 49

PART 3

PERFECTION AND PRIORITY

SUBPART 1

LAW GOVERNING PERFECTION AND PRIORITY

34.1-9-301. Law governing perfection and priority of
security interests.

(a) Except as otherwise provided in sections
34.1-9-303 through 34.1-9-306, the following rules
determine the law governing perfection, the effect of
perfection or nonperfection, and the priority of a security
interest in collateral:

(i) 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;

(ii) 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;

(iii) Except as otherwise provided in paragraph
(iv), 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;

Page 50

(B) Perfection of a security interest in
timber to be cut; and

(iv) 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.

34.1-9-302. 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.

34.1-9-303. Law governing perfection and priority of
security interests in goods covered by a certificate of
title.

(a) 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) 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

Page 51

jurisdiction or the time the goods become covered
subsequently by a certificate of title issued by another
jurisdiction.

(c) 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.

34.1-9-304. Law governing perfection and priority of
security interests in deposit accounts.

(a) 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) The following rules determine a bank's
jurisdiction for purposes of this part:

(i) 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 title, that
jurisdiction is the bank's jurisdiction;

(ii) If paragraph (i) 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;

Page 52

(iii) If neither paragraph (i) nor (ii) 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;

(iv) 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;

(v) 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.

34.1-9-305. Law governing perfection and priority of
security interests in investment property.

(a) Except as otherwise provided in subsection (c),
the following rules apply:

(i) 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;

(ii) The local law of the issuer's jurisdiction
as specified in section 34.1-8-110(d) governs perfection,
the effect of perfection or nonperfection and the priority
of a security interest in an uncertificated security;

(iii) The local law of the securities
intermediary's jurisdiction as specified in section
34.1-8-110(e) governs perfection, the effect of perfection

Page 53

or nonperfection and the priority of a security interest in
a security entitlement or securities account;

(iv) 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) The following rules determine a commodity
intermediary's jurisdiction for purposes of this part:

(i) 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 title, that jurisdiction
is the commodity intermediary's jurisdiction;

(ii) If paragraph (i) 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;

(iii) If neither paragraph (i) nor (ii) 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;

(iv) If none of the preceding paragraphs
applies, the commodity intermediary's jurisdiction is the
jurisdiction in which the office identified in an account

Page 54

statement as the office serving the commodity customer's
account is located;

(v) 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.

(i) Perfection of a security interest in
investment property by filing;

(ii) Automatic perfection of a security interest
in investment property created by a broker or securities
intermediary; and

(iii) Automatic perfection of a security
interest in a commodity contract or commodity account
created by a commodity intermediary.

34.1-9-306. Law governing perfection and priority of
security interests in letter-of-credit rights.

(a) 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) 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

Page 55

or nominated person with respect to the letter-of-credit
right as provided in section 34.1-5-116.

34.1-9-307. Location of debtor.

(a) In this section, "place of business" means a
place where a debtor conducts its affairs.

(b) Except as otherwise provided in this section, the
following rules determine a debtor's location:

(i) A debtor who is an individual is located at
the individual's principal residence;

(ii) A debtor that is an organization and has
only one (1) place of business is located at its place of
business;

(iii) A debtor that is an organization and has
more than one (1) place of business is located at its chief
executive office.

(c) 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.

Page 56

(d) 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) A registered organization that is organized under
the law of a state is located in that state.

(f) Except as otherwise provided in subsection (j), 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:

(i) In the state that the law of the United
States designates, if the law designates a state of
location;

(ii) 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

(iii) In the District of Columbia, if neither
paragraph (i) nor (ii) applies.

(g) A registered organization continues to be located
in the jurisdiction specified by subsection (e) or (f)
notwithstanding:

(i) The suspension, revocation, forfeiture or
lapse of the registered organization's status as such in
its jurisdiction of organization; or

(ii) The dissolution, winding up or cancellation
of the existence of the registered organization.

Page 57

(h) The United States is located in the District of
Columbia.

(j) 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 (1) state.

(k) 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.

(m) This section applies only for purposes of this
part.

SUBPART 2

PERFECTION

34.1-9-308. When security interest or agricultural
lien is perfected; continuity of perfection.

(a) Except as otherwise provided in this section and
section 34.1-9-309, a security interest is perfected if it
has attached and all of the applicable requirements for
perfection in sections 34.1-9-310 through 34.1-9-316 have
been satisfied. A security interest is perfected when it
attaches if the applicable requirements are satisfied
before the security interest attaches.

(b) An agricultural lien is perfected if it has
become effective and all of the applicable requirements for
perfection in section 34.1-9-310 have been satisfied. An
agricultural lien is perfected when it becomes effective if

Page 58

the applicable requirements are satisfied before the
agricultural lien becomes effective.

(c) A security interest or agricultural lien is
perfected continuously if it is originally perfected by one
(1) method under this article and is later perfected by
another method under this article, without an intermediate
period when it was unperfected.

(d) Perfection of a security interest in collateral
also perfects a security interest in a supporting
obligation for the collateral.

(e) 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) Perfection of a security interest in a securities
account also perfects a security interest in the security
entitlements carried in the securities account.

(g) Perfection of a security interest in a commodity
account also perfects a security interest in the commodity
contracts carried in the commodity account.

34.1-9-309. Security interest perfected upon
attachment.

(a) The following security interests are perfected
when they attach:

(i) A purchase-money security interest in
consumer goods, except as otherwise provided in section
34.1-9-311(b) with respect to consumer goods that are

Page 59

subject to a statute or treaty described in section
34.1-9-311(a);

(ii) 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;

(iii) A sale of a payment intangible;

(iv) A sale of a promissory note;

(v) A security interest created by the
assignment of a health-care-insurance receivable to the
provider of the health-care goods or services;

(vi) A security interest arising under section
34.1-2-401, 34.1-2-505, 34.1-2-711(c) or 34.1-2A-508(e),
until the debtor obtains possession of the collateral;

(vii) A security interest of a collecting bank
arising under section 34.1-4-210;

(viii) A security interest of an issuer or
nominated person arising under section 34.1-5-118;

(ix) A security interest arising in the delivery
of a financial asset under section 34.1-9-206(c);

(x) A security interest in investment property
created by a broker or securities intermediary;

(xi) A security interest in a commodity contract
or a commodity account created by a commodity intermediary;

Page 60

(xii) An assignment for the benefit of all
creditors of the transferor and subsequent transfers by the
assignee thereunder; and

(xiii) A security interest created by an
assignment of a beneficial interest in a decedent's estate.

34.1-9-310. When filing required to perfect security
interest or agricultural lien; security interests and
agricultural liens to which filing provisions do not apply.

(a) Except as otherwise provided in subsection (b)
and section 34.1-9-312(b), a financing statement must be
filed to perfect all security interests and agricultural
liens.

(b) The filing of a financing statement is not
necessary to perfect a security interest:

(i) That is perfected under section
34.1-9-308(d), (e), (f) or (g);

(ii) That is perfected under section 34.1-9-309
when it attaches;

(iii) In property subject to a statute,
regulation, or treaty described in section 34.1-9-311(a);

(iv) In goods in possession of a bailee which is
perfected under section 34.1-9-312(d)(i) or (ii);

(v) In certificated securities, documents, goods
or instruments which is perfected without filing or
possession under section 34.1-9-312(e), (f) or (g);

Page 61

(vi) In collateral in the secured party's
possession under section 34.1-9-313;

(vii) In a certificated security which is
perfected by delivery of the security certificate to the
secured party under section 34.1-9-313;

(viii) In deposit accounts, electronic chattel
paper, investment property or letter-of-credit rights which
is perfected by control under section 34.1-9-314;

(ix) In proceeds which is perfected under
section 34.1-9-315; or

(x) That is perfected under section 34.1-9-316.

(c) 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.

34.1-9-311. Perfection of security interests in
property subject to certain statutes, regulations and
treaties.

(a) 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:

(i) 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 34.1-9-310(a);

Page 62

(ii) The following statutes of this state: there
are no statutes;

(iii) 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 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 34.1-9-313 and 34.1-9-316(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) Except as otherwise provided in subsection (d)
and section 34.1-9-316(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) During any period in which collateral subject to
a statute specified in subsection (a)(ii) of this section
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

Page 63

to a security interest in that collateral created by that
person.

34.1-9-312. 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) A security interest in chattel paper, negotiable
documents, instruments or investment property may be
perfected by filing.

(b) Except as otherwise provided in section
34.1-9-315(c) and (d) for proceeds:

(i) A security interest in a deposit account may
be perfected only by control under section 34.1-9-314;

(ii) And except as otherwise provided in section
34.1-9-308(d), a security interest in a letter-of-credit
right may be perfected only by control under section
34.1-9-314; and

(iii) A security interest in money may be
perfected only by the secured party's taking possession
under section 34.1-9-313.

(i) A security interest in the goods may be
perfected by perfecting a security interest in the
document; and

Page 64

(ii) 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) 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:

(i) Issuance of a document in the name of the
secured party;

(ii) The bailee's receipt of notification of the
secured party's interest; or

(iii) Filing as to the goods.

(e) A security interest in certificated securities,
negotiable documents or instruments is perfected without
filing or the taking of possession for a period of twenty
(20) days from the time it attaches to the extent that it
arises for new value given under an authenticated security
agreement.

(f) 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 twenty (20) days without filing if
the secured party makes available to the debtor the goods
or documents representing the goods for the purpose of:

(i) Ultimate sale or exchange; or

(ii) Loading, unloading, storing, shipping,
transshipping, manufacturing, processing or otherwise

Page 65

dealing with them in a manner preliminary to their sale or
exchange.

(g) A perfected security interest in a certificated
security or instrument remains perfected for twenty (20)
days without filing if the secured party delivers the
security certificate or instrument to the debtor for the
purpose of:

(i) Ultimate sale or exchange; or

(ii) Presentation, collection, enforcement,
renewal or registration of transfer.

(h) After the twenty (20) day period specified in
subsection (e), (f) or (g) expires, perfection depends upon
compliance with this article.

34.1-9-313. When possession by or delivery to secured
party perfects security interest without filing.

(a) 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 34.1-8-301.

(b) 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
34.1-9-316(d).

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(c) 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:

(i) The person in possession authenticates a
record acknowledging that it holds possession of the
collateral for the secured party's benefit; or

(ii) 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) 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) A security interest in a certificated security in
registered form is perfected by delivery when delivery of
the certificated security occurs under section 34.1-8-301
and remains perfected by delivery until the debtor obtains
possession of the security certificate.

(f) A person in possession of collateral is not
required to acknowledge that it holds possession for a
secured party's benefit.

(g) If a person acknowledges that it holds possession
for the secured party's benefit:

Page 67

(i) The acknowledgment is effective under
subsection (c) or section 34.1-8-301(a), even if the
acknowledgment violates the rights of a debtor; and

(ii) 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) 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:

(i) To hold possession of the collateral for the
secured party's benefit; or

(ii) To redeliver the collateral to the secured
party.

(j) 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.

34.1-9-314. Perfection by control.

(a) A security interest in investment property,
deposit accounts, letter-of-credit rights or electronic
chattel paper may be perfected by control of the collateral

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under section 34.1-9-104, 34.1-9-105, 34.1-9-106 or
34.1-9-107.

(b) A security interest in deposit accounts,
electronic chattel paper, or letter-of-credit rights is
perfected by control under section 34.1-9-104, 34.1-9-105
or 34.1-9-107 when the secured party obtains control and
remains perfected by control only while the secured party
retains control.

(c) A security interest in investment property is
perfected by control under section 34.1-9-106 from the time
the secured party obtains control and remains perfected by
control until:

(i) The secured party does not have control; and

(ii) One (1) 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

34.1-9-315. Secured party's rights on disposition of
collateral and in proceeds.

(a) Except as otherwise provided in this article and
in section 34.1-2-403(b):

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(i) 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

(ii) A security interest attaches to any
identifiable proceeds of collateral.

(b) Proceeds that are commingled with other property
are identifiable proceeds:

(i) If the proceeds are goods, to the extent
provided by section 34.1-9-336; and

(ii) 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) A security interest in proceeds is a perfected
security interest if the security interest in the original
collateral was perfected.

(d) A perfected security interest in proceeds becomes
unperfected on the twenty-first day after the security
interest attaches to the proceeds unless:

(i) The following conditions are satisfied:

(A) A filed financing statement covers the
original collateral;

Page 70

(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

(ii) The proceeds are identifiable cash
proceeds; or

(iii) The security interest in the proceeds is
perfected other than under subsection (c) when the security
interest attaches to the proceeds or within twenty (20)
days thereafter.

(e) If a filed financing statement covers the
original collateral, a security interest in proceeds which
remains perfected under paragraph (d)(i) becomes
unperfected at the later of:

(i) When the effectiveness of the filed
financing statement lapses under section 34.1-9-515 or is
terminated under section 34.1-9-513; or

(ii) The twenty-first day after the security
interest attaches to the proceeds.

34.1-9-316. Continued perfection of security interest
following change in governing law.

(a) A security interest perfected pursuant to the law
of the jurisdiction designated in section 34.1-9-301(a)(i)
or 34.1-9-305(c) remains perfected until the earliest of:

(i) The time perfection would have ceased under
the law of that jurisdiction;

Page 71

(ii) The expiration of four (4) months after a
change of the debtor's location to another jurisdiction; or

(iii) The expiration of one (1) year after a
transfer of collateral to a person that thereby becomes a
debtor and is located in another jurisdiction.

(b) 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) 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:

(i) The collateral is located in one (1)
jurisdiction and subject to a security interest perfected
under the law of that jurisdiction;

(ii) Thereafter the collateral is brought into
another jurisdiction; and

(iii) Upon entry into the other jurisdiction,
the security interest is perfected under the law of the
other jurisdiction.

(d) Except as otherwise provided in subsection (e), a
security interest in goods covered by a certificate of

Page 72

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) 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 34.1-9-311(b) or
34.1-9-313 are not satisfied before the earlier of:

(i) 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

(ii) The expiration of four (4) months after the
goods had become so covered.

(f) 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:

(i) The time the security interest would have
become unperfected under the law of that jurisdiction; or

(ii) The expiration of four (4) months after a
change of the applicable jurisdiction to another
jurisdiction.

Page 73

(g) 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

34.1-9-317. Interests that take priority over or take
free of security interest or agricultural lien.

(a) A security interest or agricultural lien is
subordinate to the rights of:

(i) A person entitled to priority under section
34.1-9-322; and

(ii) 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 (1) of the conditions specified in
W.S. 34.1-9-203(b)(iii) is met and a financing
statement covering the collateral is filed.

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(b) 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) 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) 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) Except as otherwise provided in sections
34.1-9-320 and 34.1-9-321, if a person files a financing
statement with respect to a purchase-money security
interest before or within twenty (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.

34.1-9-318. 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.

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(a) 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) 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.

34.1-9-319. Rights and title of consignee with
respect to creditors and purchasers.

(a) 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) 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.

34.1-9-320. Buyer of goods.

(a) 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

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the buyer's seller, even if the security interest is
perfected and the buyer knows of its existence.

(b) 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:

(i) Without knowledge of the security interest;

(ii) For value;

(iii) Primarily for the buyer's personal, family
or household purposes; and

(iv) Before the filing of a financing statement
covering the goods.

(c) 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 34.1-9-316(a) and (b).

(d) 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) Subsections (a) and (b) do not affect a security
interest in goods in the possession of the secured party
under section 34.1-9-313.

34.1-9-321. Licensee of general intangible and lessee
of goods in ordinary course of business.

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(a) 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) 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) 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.

34.1-9-322. Priorities among conflicting security
interests in and agricultural liens on same collateral.

(a) 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:

(i) 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

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the security interest or agricultural lien is first
perfected, if there is no period thereafter when there is
neither filing nor perfection;

(ii) A perfected security interest or
agricultural lien has priority over a conflicting
unperfected security interest or agricultural lien;

(iii) The first security interest or
agricultural lien to attach or become effective has
priority if conflicting security interests and agricultural
liens are unperfected.

(b) For the purposes of paragraph (a)(i):

(i) 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

(ii) 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) Except as otherwise provided in subsection (f), a
security interest in collateral which qualifies for
priority over a conflicting security interest under section
34.1-9-327, 34.1-9-328, 34.1-9-329, 34.1-9-330 or
34.1-9-331 also has priority over a conflicting security
interest in:

(i) Any supporting obligation for the
collateral; and

(ii) Proceeds of the collateral if:

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(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) 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) 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) Subsections (a) through (e) are subject to:

(i) Subsection (g) and the other provisions of
this part;

(ii) Section 34.1-4-210 with respect to a
security interest of a collecting bank;

(iii) Section 34.1-5-118 with respect to a
security interest of an issuer or nominated person; and

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(iv) Section 34.1-9-110 with respect to a
security interest arising under article 2 or 2A.

(g) 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.

34.1-9-323. Future advances.

(a) Except as otherwise provided in subsection (c),
for purposes of determining the priority of a perfected
security interest under section 34.1-9-322(a)(i),
perfection of the security interest dates from the time an
advance is made to the extent that the security interest
secures an advance that:

(i) Is made while the security interest is
perfected only:

(A) Under section 34.1-9-309 when it
attaches; or

(B) Temporarily under section
34.1-9-312(e), (f) or (g); and

(ii) Is not made pursuant to a commitment
entered into before or while the security interest is
perfected by a method other than under section 34.1-9-309
or 34.1-9-312(e), (f) or (g).

(b) 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

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forty-five (45) days after the person becomes a lien
creditor unless the advance is made:

(i) Without knowledge of the lien; or

(ii) Pursuant to a commitment entered into
without knowledge of the lien.

(c) 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) 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:

(i) The time the secured party acquires
knowledge of the buyer's purchase; or

(ii) Forty-five (45) days after the purchase.

(e) 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 forty-five (45) day period.

(f) 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:

(i) The time the secured party acquires
knowledge of the lease; or

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(ii) Forty-five (45) days after the lease
contract becomes enforceable.

(g) 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
forty-five (45) day period.

34.1-9-324. Priority of purchase-money security
interests.

(a) 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 34.1-9-327, 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 twenty (20) days thereafter.

(b) 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 34.1-9-330, and, except as otherwise
provided in section 34.1-9-327, 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:

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(i) The purchase-money security interest is
perfected when the debtor receives possession of the
inventory;

(ii) The purchase-money secured party sends an
authenticated notification to the holder of the conflicting
security interest;

(iii) The holder of the conflicting security
interest receives the notification within five (5) years
before the debtor receives possession of the inventory; and

(iv) 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) Paragraphs (b)(ii) through (iv) apply only if the
holder of the conflicting security interest had filed a
financing statement covering the same types of inventory:

(i) If the purchase-money security interest is
perfected by filing, before the date of the filing; or

(ii) If the purchase-money security interest is
temporarily perfected without filing or possession under
section 34.1-9-312(f), before the beginning of the twenty
(20) day period thereunder.

(d) 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
34.1-9-327, a perfected security interest in their

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identifiable proceeds and identifiable products in their

unmanufactured states also has priority, if:

(i) The purchase-money security interest is
perfected when the debtor receives possession of the
livestock;

(ii) The purchase-money secured party sends an
authenticated notification to the holder of the conflicting
security interest;

(iii) The holder of the conflicting security
interest receives the notification within six (6) months
before the debtor receives possession of the livestock; and

(iv) 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) Paragraphs (d)(ii) through (iv) apply only if the
holder of the conflicting security interest had filed a
financing statement covering the same types of livestock:

(i) If the purchase-money security interest is
perfected by filing, before the date of the filing; or

(ii) If the purchase-money security interest is
temporarily perfected without filing or possession under
section 34.1-9-312(f), before the beginning of the twenty
(20) day period thereunder.

(f) 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

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34.1-9-327, 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) If more than one (1) security interest qualifies
for priority in the same collateral under subsection (a),
(b), (d) or (f):

(i) 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

(ii) In all other cases, section 34.1-9-322(a)
applies to the qualifying security interests.

34.1-9-324A. Priority of production-money security
interests and agricultural liens.

(a) Except as otherwise provided in subsections (c),
(d) and (e), if the requirements of subsection (b) are
satisfied, a perfected production-money security interest
in production-money crops has priority over a conflicting
security interest in the same crops and, except as
otherwise provided in section 34.1-9-327, also has priority
in their identifiable proceeds.

(b) A production-money security interest has priority
under subsection (a) if:

(i) The production-money security interest is
perfected by filing when the production-money secured party

Page 86

first gives new value to enable the debtor to produce the
crops;

(ii) The production-money secured party sends an
authenticated notification to the holder of the conflicting
security interest not less than ten (10) or more than
thirty (30) days before the production-money secured party
first gives new value to enable the debtor to produce the
crops if the holder had filed a financing statement
covering the crops before the date of the filing made by
the production-money secured party; and

(iii) The notification states that the
production-money secured party has or expects to acquire a
production-money security interest in the debtor's crops
and provides a description of the crops.

(c) Except as otherwise provided in subsection (d) or
(e), if more than one (1) security interest qualifies for
priority in the same collateral under subsection (a), the
security interests rank according to priority in time of
filing under section 34.1-9-322(a).

(d) To the extent that a person holding a perfected
security interest in production-money crops that are the
subject of a production-money security interest gives new
value to enable the debtor to produce the production-money
crops and the value is in fact used for the production of
the production-money crops, the security interests rank
according to priority in time of filing under section
34.1-9-322(a).

(e) To the extent that a person holds both an
agricultural lien and a production-money security interest
in the same collateral securing the same obligations, the

Page 87

rules of priority applicable to agricultural liens govern
priority.

34.1-9-325. Priority of security interests in
transferred collateral.

(a) 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:

(i) The debtor acquired the collateral subject
to the security interest created by the other person;

(ii) The security interest created by the other
person was perfected when the debtor acquired the
collateral; and

(iii) There is no period thereafter when the
security interest is unperfected.

(b) Subsection (a) subordinates a security interest
only if the security interest:

(i) Otherwise would have priority solely under
section 34.1-9-322(a) or 34.1-9-324; or

(ii) Arose solely under section 34.1-2-711(c) or
34.1-2A-508(e).

34.1-9-326. Priority of security interests created by
new debtor.

(a) 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

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34.1-9-508 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 34.1-9-508.

(b) 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 34.1-9-508. 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.

34.1-9-327. Priority of security interests in deposit
account.

(a) The following rules govern priority among
conflicting security interests in the same deposit account:

(i) A security interest held by a secured party
having control of the deposit account under section
34.1-9-104 has priority over a conflicting security
interest held by a secured party that does not have
control;

(ii) Except as otherwise provided in paragraphs
(iii) and (iv), security interests perfected by control
under section 34.1-9-314 rank according to priority in time
of obtaining control;

(iii) Except as otherwise provided in paragraph
(iv), a security interest held by the bank with which the
deposit account is maintained has priority over a

Page 89

conflicting security interest held by another secured
party;

(iv) A security interest perfected by control
under section 34.1-9-104(a)(iii) has priority over a
security interest held by the bank with which the deposit
account is maintained.

34.1-9-328. Priority of security interests in
investment property.

(a) The following rules govern priority among
conflicting security interests in the same investment
property:

(i) A security interest held by a secured party
having control of investment property under section
34.1-9-106 has priority over a security interest held by a
secured party that does not have control of the investment
property.

(ii) Except as otherwise provided in paragraphs
(iii) and (iv), conflicting security interests held by
secured parties each of which has control under section
34.1-9-106 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 34.1-8-106(d)(i), the secured party's
becoming the person for which the securities account is
maintained;

Page 90

(II) If the secured party obtained
control under section 34.1-8-106(d)(ii), 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
34.1-8-106(d)(iii), 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 34.1-9-106(b)(ii) with respect to commodity
contracts carried or to be carried with the commodity
intermediary.

(iii) 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;

(iv) 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;

(v) A security interest in a certificated
security in registered form which is perfected by taking
delivery under section 34.1-9-313(a) and not by control

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under section 34.1-9-314 has priority over a conflicting
security interest perfected by a method other than control;

(vi) Conflicting security interests created by a
broker, securities intermediary or commodity intermediary
which are perfected without control under section
34.1-9-106 rank equally;

(vii) In all other cases, priority among
conflicting security interests in investment property is
governed by sections 34.1-9-322 and 34.1-9-323.

34.1-9-329. Priority of security interests in
letter-of-credit right.

(a) The following rules govern priority among
conflicting security interests in the same letter-of-credit
right:

(i) A security interest held by a secured party
having control of the letter-of-credit right under section
34.1-9-107 has priority to the extent of its control over a
conflicting security interest held by a secured party that
does not have control.

(ii) Security interests perfected by control
under section 34.1-9-314 rank according to priority in time
of obtaining control.

34.1-9-330. Priority of purchaser of chattel paper or
instrument.

(a) 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:

Page 92

(i) 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 34.1-9-105; and

(ii) The chattel paper does not indicate that it
has been assigned to an identified assignee other than the
purchaser.

(b) 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 34.1-9-105 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) Except as otherwise provided in section
34.1-9-327, 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:

(i) Section 34.1-9-322 provides for priority in
the proceeds; or

(ii) 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) Except as otherwise provided in section
34.1-9-331(a), a purchaser of an instrument has priority
over a security interest in the instrument perfected by a

Page 93

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) 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) 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.

34.1-9-331. 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) 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) 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 an adverse claim
under article 8.

Page 94

(c) 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).

34.1-9-332. Transfer of money; transfer of funds from
deposit account.

(a) 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) 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.

34.1-9-333. Priority of certain liens arising by
operation of law.

(a) In this section, "possessory lien" means an
interest, other than a security interest or an agricultural
lien:

(i) 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;

(ii) Which is created by statute or rule of law
in favor of the person; and

(iii) Whose effectiveness depends on the
person's possession of the goods.

Page 95

(b) 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.

34.1-9-334. Priority of security interests in
fixtures and crops.

(a) 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) This article does not prevent creation of an
encumbrance upon fixtures under real property law.

(c) 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) 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:

(i) The security interest is a purchase-money
security interest;

(ii) The interest of the encumbrancer or owner
arises before the goods become fixtures; and

(iii) The security interest is perfected by a
fixture filing before the goods become fixtures or within
twenty (20) days thereafter.

Page 96

(e) A perfected security interest in fixtures has
priority over a conflicting interest of an encumbrancer or
owner of the real property if:

(i) 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.

(ii) 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

(iii) 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

(iv) The security interest is:

Page 97

(A) Created in a manufactured home in a
manufactured-home transaction; and

(B) Perfected pursuant to a statute
described in section 34.1-9-311(a)(ii).

(f) 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:

(i) The encumbrancer or owner has, in an
authenticated record, consented to the security interest or
disclaimed an interest in the goods as fixtures; or

(ii) The debtor has a right to remove the goods
as against the encumbrancer or owner.

(g) The priority of the security interest under
paragraph (f)(ii) continues for a reasonable time if the
debtor's right to remove the goods as against the
encumbrancer or owner terminates.

(h) 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.

Page 98

(j) 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.

(k) Subsection (j) prevails over any inconsistent
provisions of title 1, chapter 15, articles 1 and 2 and
title 29, chapter 5.

34.1-9-335. Accessions.

(a) A security interest may be created in an
accession and continues in collateral that becomes an
accession.

(b) If a security interest is perfected when the
collateral becomes an accession, the security interest
remains perfected in the collateral.

(c) Except as otherwise provided in subsection (d),
the other provisions of this part determine the priority of
a security interest in an accession.

(d) 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 34.1-9-311(b).

(e) 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) A secured party that removes an accession from
other goods under subsection (e) shall promptly reimburse

Page 99

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.

34.1-9-336. Commingled goods.

(a) 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) 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.

(d) 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) 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).

Page 100

(f) If more than one (1) security interest attaches
to the product or mass under subsection (c), the following
rules determine priority:

(i) 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.

(ii) If more than one (1) security interest is
perfected under subsection (d), the security interests rank
equally in proportion to value of the collateral at the
time it became commingled goods.

34.1-9-337. Priority of security interests in goods
covered by certificate of title.

(a) 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:

(i) 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

(ii) The security interest is subordinate to a
conflicting security interest in the goods that attaches,
and is perfected under section 34.1-9-311(b), after
issuance of the certificate and without the conflicting
secured party's knowledge of the security interest.

Page 101

34.1-9-338. Priority of security interest or
agricultural lien perfected by filed financing statement
providing certain incorrect information.

(a) If a security interest or agricultural lien is
perfected by a filed financing statement providing
information described in section 34.1-9-516(b)(v) which is
incorrect at the time the financing statement is filed:

(i) 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

(ii) 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.

34.1-9-339. Priority subject to subordination.

This article does not preclude subordination by agreement
by a person entitled to priority.

SUBPART 4

RIGHTS OF BANK

34.1-9-340. Effectiveness of right of recoupment or
set-off against deposit account.

(a) Except as otherwise provided in subsection (c), a
bank with which a deposit account is maintained may

Page 102

exercise any right of recoupment or set-off against a
secured party that holds a security interest in the deposit
account.

(b) 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) 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 34.1-9-104(a)(iii), if
the set-off is based on a claim against the debtor.

34.1-9-341. Bank's rights and duties with respect to
deposit account.

(a) Except as otherwise provided in section
34.1-9-340(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:

(i) The creation, attachment or perfection of a
security interest in the deposit account;

(ii) The bank's knowledge of the security
interest; or

(iii) The bank's receipt of instructions from
the secured party.

34.1-9-342. Bank's right to refuse to enter into or
disclose existence of control agreement.

Page 103

This article does not require a bank to enter into an
agreement of the kind described in section
34.1-9-104(a)(ii), 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

34.1-9-401. Alienability of debtor's rights.

(a) Except as otherwise provided in subsection (b)
and sections 34.1-9-406, 34.1-9-407, 34.1-9-408 and
34.1-9-409, whether a debtor's rights in collateral may be
voluntarily or involuntarily transferred is governed by law
other than this article.

(b) 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.

34.1-9-402. 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.

34.1-9-403. Agreement not to assert defenses against
assignee.

Page 104

(a) In this section, "value" has the meaning provided
in section 34.1-3-303(a).

(b) 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:

(i) For value;

(ii) In good faith;

(iii) Without notice of a claim of a property or
possessory right to the property assigned; and

(iv) 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 34.1-3-305(a).

(c) 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 34.1-3-305(b).

(d) 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:

(i) The record has the same effect as if the
record included such a statement; and

Page 105

(ii) 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) 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) 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.

34.1-9-404. Rights acquired by assignee; claims and
defenses against assignee.

(a) 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:

(i) 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

(ii) 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) 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

Page 106

under subsection (a) only to reduce the amount the account
debtor owes.

(c) 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) 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) This section does not apply to an assignment of a
health-care-insurance receivable.

34.1-9-405. Modification of assigned contract.

(a) 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) Subsection (a) applies to the extent that:

Page 107

(i) The right to payment or a part thereof under
an assigned contract has not been fully earned by
performance; or

(ii) 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
34.1-9-406(a).

(d) This section does not apply to an assignment of a
health-care-insurance receivable.

34.1-9-406. 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) Subject to subsections (b) through (j), 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) Subject to subsection (h), notification is
ineffective under subsection (a):

Page 108

(i) If it does not reasonably identify the
rights assigned;

(ii) 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

(iii) 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) 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) Except as otherwise provided in subsection (e)
and sections 34.1-2A-303 and 34.1-9-407, 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:

Page 109

(i) 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

(ii) 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) Subsection (d) does not apply to the sale of a
payment intangible or promissory note.

(f) Except as otherwise provided in sections
34.1-2A-303 and 34.1-9-407 and subject to subsections (h)
and (j), 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:

(i) 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

(ii) 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

Page 110

of recoupment, claim, defense, termination, right of
termination or remedy under the account or chattel paper.

(g) Subject to subsection (h), an account debtor may
not waive or vary its option under paragraph (b)(iii).

(h) 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.

(j) This section prevails over any inconsistent
provision of an existing or future statute, rule or
regulation of this state unless the provision is contained
in a statute of this state, refers expressly to this
section and states that the provision prevails over this
section. Subsection (f) of this section does not apply to
an assignment or transfer of, or the creation, attachment,
perfection or enforcement of a security interest in, a
right the transfer of which is prohibited or restricted by
any of the following statutes to the extent that the
statute is inconsistent with subsection (f) of this
section: W.S. 1-40-113, 26-15-132 and 27-14-702.

(k) Except to the extent otherwise provided in
subsection (j), this section prevails over any inconsistent
provision of an existing or future statute, rule or
regulation of this state unless the provision is contained
in a statute of this state, refers expressly to this
section and states that the provision prevails over this
section.

34.1-9-407. Restrictions on creation or enforcement
of security interest in leasehold interest or in lessor's
residual interest.

Page 111

(a) Except as otherwise provided in subsection (b), a
term in a lease agreement is ineffective to the extent that
it:

(i) 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

(b) Except as otherwise provided in section
34.1-2A-303(g), a term described in paragraph (a)(ii) is
effective to the extent that there is:

(i) A transfer by the lessee of the lessee's
right of possession or use of the goods in violation of the
term; or

(ii) A delegation of a material performance of
either party to the lease contract in violation of the
term.

(c) 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

Page 112

section 34.1-2A-303(d) unless, and then only to the extent
that, enforcement actually results in a delegation of
material performance of the lessor.

34.1-9-408. Restrictions on assignment of promissory
notes, health-care-insurance receivables and certain
general intangibles ineffective.

(a) 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:

(i) Would impair the creation, attachment or
perfection of a security interest; or

(ii) 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) 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.

Page 113

(c) 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:

(i) Would impair the creation, attachment or
perfection of a security interest; or

(d) 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:

(i) Is not enforceable against the person
obligated on the promissory note or the account debtor;

Page 114

(ii) Does not impose a duty or obligation on the
person obligated on the promissory note or the account
debtor;

(iii) 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;

(iv) 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;

(v) 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

(vi) Does not entitle the secured party to
enforce the security interest in the promissory note,
health-care-insurance receivable or general intangible.

(e) Except to the extent otherwise provided in
subsection (f), this section prevails over any inconsistent
provision of an existing or future statute, rule or
regulation of this state unless the provision is contained
in a statute of this state, refers expressly to this
section and states that the provision prevails over this
section.

Page 115

(f) Subsection (c) of this section does not apply to
an assignment or transfer of, or the creation, attachment,
perfection, or enforcement of a security interest in, a
right the transfer of which is prohibited or restricted by
any of the following statutes, to the extent that the
statute is inconsistent with subsection (c) of this
section: W.S. 1-40-113, 26-15-132 and 27-14-702.

34.1-9-409. Restrictions on assignment of
letter-of-credit rights ineffective.

(a) 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:

(i) Would impair the creation, attachment or
perfection of a security interest in the letter-of-credit
right; or

(ii) 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) 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

Page 116

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:

(i) Is not enforceable against the applicant,
issuer, nominated person or transferee beneficiary;

(ii) Imposes no duties or obligations on the
applicant, issuer, nominated person or transferee
beneficiary; and

(iii) 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

34.1-9-501. Filing office.

(a) 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:

(i) The office designated for the filing or
recording of a record of a mortgage on the related real
property, if:

Page 117

(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

(ii) 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; or

(iii) The office of the county clerk for
perfection of a security interest in vehicles or motor
vehicles.

(b) The office in which to file a financing statement
to perfect a security interest in collateral, including
fixtures, of a transmitting utility is 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.

34.1-9-502. Contents of financing statement; record
of mortgage as financing statement; time of filing
financing statement.

(a) Subject to subsection (b), a financing statement
is sufficient only if it:

(i) Provides the name of the debtor;

(ii) Provides the name of the secured party or a
representative of the secured party; and

Page 118

(iii) Indicates the collateral covered by the
financing statement.

(b) Except as otherwise provided in section
34.1-9-501(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:

(i) Indicate that it covers this type of
collateral;

(ii) Indicate that it is to be filed for record
in the real property records;

(iii) 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

(iv) If the debtor does not have an interest of
record in the real property, provide the name of a record
owner.

(c) 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:

(i) The record indicates the goods or accounts
that it covers;

Page 119

(ii) 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;

(iii) 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

(iv) The record is duly recorded.

(d) A financing statement may be filed before a
security agreement is made or a security interest otherwise
attaches.

34.1-9-503. Name of debtor and secured party.

(a) A financing statement sufficiently provides the
name of the debtor:

(i) 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;

(ii) 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;

(iii) If the debtor is a trust or a trustee
acting with respect to property held in trust, only if the
financing statement:

Page 120

(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 (1) 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

(iv) 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) A financing statement that provides the name of
the debtor in accordance with subsection (a) is not
rendered ineffective by the absence of:

(i) A trade name or other name of the debtor; or

(ii) Unless required under subparagraph
(a)(iv)(B), names of partners, members, associates or other
persons comprising the debtor.

(c) A financing statement that provides only the
debtor's trade name does not sufficiently provide the name
of the debtor.

Page 121

(d) 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) A financing statement may provide the name of
more than one (1) debtor and the name of more than one (1)
secured party.

34.1-9-504. Indication of collateral.

(a) A financing statement sufficiently indicates the
collateral that it covers if the financing statement
provides:

(i) A description of the collateral pursuant to
section 34.1-9-108; or

(ii) An indication that the financing statement
covers all assets or all personal property.

34.1-9-505. Filing and compliance with other statutes
and treaties for consignments, leases, other bailments and
other transactions.

(a) 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 34.1-9-311(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) 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

Page 122

statement under section 34.1-9-311(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.

34.1-9-506. Effect of errors or omissions.

(a) 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) Except as otherwise provided in subsection (c), a
financing statement that fails sufficiently to provide the
name of the debtor in accordance with section 34.1-9-503(a)
is seriously misleading.

(c) 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 34.1-9-503(a), the
name provided does not make the financing statement
seriously misleading.

(d) For purposes of section 34.1-9-508(b), the
"debtor's correct name" in subsection (c) means the correct
name of the new debtor.

34.1-9-507. Effect of certain events on effectiveness
of financing statement.

Page 123

(a) 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) Except as otherwise provided in subsection (c)
and section 34.1-9-508, 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 34.1-9-506.

(c) If a debtor so changes its name that a filed
financing statement becomes seriously misleading under
section 34.1-9-506:

(i) The financing statement is effective to
perfect a security interest in collateral acquired by the
debtor before, or within four (4) months after, the change;
and

(ii) The financing statement is not effective to
perfect a security interest in collateral acquired by the
debtor more than four (4) months after the change, unless
an amendment to the financing statement which renders the
financing statement not seriously misleading is filed
within four (4) months after the change.

34.1-9-508. Effectiveness of financing statement if
new debtor becomes bound by security agreement.

(a) 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

Page 124

that the financing statement would have been effective had
the original debtor acquired rights in the collateral.

(b) 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 34.1-9-506:

(i) The financing statement is effective to
perfect a security interest in collateral acquired by the
new debtor before, and within four (4) months after, the
new debtor becomes bound under section 34.1-9-203(d); and

(ii) The financing statement is not effective to
perfect a security interest in collateral acquired by the
new debtor more than four (4) months after the new debtor
becomes bound under section 34.1-9-203(d) unless an initial
financing statement providing the name of the new debtor is
filed before the expiration of that time.

(c) This section does not apply to collateral as to
which a filed financing statement remains effective against
the new debtor under section 34.1-9-507(a).

34.1-9-509. Persons entitled to file a record.

(a) 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:

(i) The debtor authorizes the filing in an
authenticated record or pursuant to subsection (b) or (c)
of this section; or

Page 125

(ii) 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) 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:

(i) The collateral described in the security
agreement; and

(ii) Property that becomes collateral under
section 34.1-9-315(a)(ii), whether or not the security
agreement expressly covers proceeds.

(c) By acquiring collateral in which a security
interest or agricultural lien continues under section
34.1-9-315(a)(i), a debtor authorizes the filing of an
initial financing statement, and an amendment, covering the
collateral and property that becomes collateral under
section 34.1-9-315(a)(ii).

(d) 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:

(i) The secured party of record authorizes the
filing; or

(ii) 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 34.1-9-513(a) or (c), the debtor

Page 126

authorizes the filing, and the termination statement
indicates that the debtor authorized it to be filed.

(e) If there is more than one (1) secured party of
record for a financing statement, each secured party of
record may authorize the filing of an amendment under
subsection (d).

34.1-9-510. Effectiveness of filed record.

(a) A filed record is effective only to the extent
that it was filed by a person that may file it under
section 34.1-9-509.

(b) A record authorized by one (1) secured party of
record does not affect the financing statement with respect
to another secured party of record.

(c) A continuation statement that is not filed within
the six (6) month period prescribed by section
34.1-9-515(d) is ineffective.

34.1-9-511. Secured party of record.

(a) 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 34.1-9-514(a), the assignee named in the
initial financing statement is the secured party of record
with respect to the financing statement.

(b) 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

Page 127

named in the amendment is a secured party of record. If an
amendment is filed under section 34.1-9-514(b), the
assignee named in the amendment is a secured party of
record.

(c) A person remains a secured party of record until
the filing of an amendment of the financing statement which
deletes the person.

34.1-9-512. Amendment of financing statement.

(a) Subject to section 34.1-9-509, 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:

(i) Identifies, by its file number, the initial
financing statement to which the amendment relates; and

(ii) If the amendment relates to an initial
financing statement filed or recorded in a filing office
described in section 34.1-9-501(a)(i), provides the date
and time that the initial financing statement was filed or
recorded and the information specified in section
34.1-9-502(b).

(b) Except as otherwise provided in section
34.1-9-515, the filing of an amendment does not extend the
period of effectiveness of the financing statement.

(c) 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.

Page 128

(d) 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) An amendment is ineffective to the extent it:

(i) Purports to delete all debtors and fails to
provide the name of a debtor to be covered by the financing
statement; or

(ii) Purports to delete all secured parties of
record and fails to provide the name of a new secured party
of record.

34.1-9-513. Termination statement.

(a) 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:

(i) 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

(ii) The debtor did not authorize the filing of
the initial financing statement.

(b) To comply with subsection (a), a secured party
shall cause the secured party of record to file the
termination statement:

(i) Within one (1) month after there is no
obligation secured by the collateral covered by the

Page 129

financing statement and no commitment to make an advance,
incur an obligation or otherwise give value; or

(ii) If earlier, within twenty (20) days after
the secured party receives an authenticated demand from a
debtor.

(c) In cases not governed by subsection (a), within
twenty (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:

(i) 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;

(ii) 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;

(iii) The financing statement covers goods that
were the subject of a consignment to the debtor but are not
in the debtor's possession; or

(iv) The debtor did not authorize the filing of
the initial financing statement.

(d) Except as otherwise provided in section
34.1-9-510, upon the filing of a termination statement with

Page 130

the filing office, the financing statement to which the
termination statement relates ceases to be effective.
Except as otherwise provided in W.S. 34.1-9-510, for
purposes of W.S. 34.1-9-519(g), 34.1-9-522(a), and
34.1-9-523(c), the filing with the filing office of a
termination statement relating to a financing statement
that indicates that the debtor is a transmitting utility
also causes the effectiveness of the financing statement to
lapse.

34.1-9-514. Assignment of powers of secured party of
record.

(a) 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) 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:

(i) Identifies, by its file number, the initial
financing statement to which it relates;

(ii) Provides the name of the assignor; and

(iii) Provides the name and mailing address of
the assignee.

Page 131

effective as a financing statement filed as a fixture
filing under section 34.1-9-502(c) may be made only by an
assignment of record of the mortgage in the manner provided
by law of this state other than this title.

34.1-9-515. Duration and effectiveness of financing
statement; effect of lapsed financing statement.

(a) Except as otherwise provided in subsections (b),
(e), (f) and (g), a filed financing statement is effective
for a period of five (5) years after the date of filing.

(b) 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
thirty (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) 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) A continuation statement may be filed only within
six (6) months before the expiration of the five (5) year
period specified in subsection (a) or the thirty (30) year

Page 132

period specified in subsection (b), whichever is
applicable.

(e) Except as otherwise provided in section
34.1-9-510, upon timely filing of a continuation statement,
the effectiveness of the initial financing statement
continues for a period of five (5) 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 (5) 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) 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) A record of a mortgage that is effective as a
financing statement filed as a fixture filing under section
34.1-9-502(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.

34.1-9-516. What constitutes filing; effectiveness of
filing.

(a) 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.

Page 133

(b) Filing does not occur with respect to a record
that a filing office refuses to accept because:

(i) The record is not communicated by a method
or medium of communication authorized by the filing office;

(ii) An amount equal to or greater than the
applicable filing fee is not tendered;

(iii) 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 34.1-9-512 or
34.1-9-518, as applicable; or

(II) Identifies an initial financing
statement whose effectiveness has lapsed under section
34.1-9-515.

(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

Page 134

(D) In the case of a record filed or
recorded in the filing office described in section
34.1-9-501(a)(i), the record does not provide a sufficient
description of the real property to which it relates.

(iv) 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;

(v) 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

(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.

(vi) In the case of an assignment reflected in
an initial financing statement under section 34.1-9-514(a)

Page 135

or an amendment filed under section 34.1-9-514(b), the
record does not provide a name and mailing address for the
assignee; or

(vii) In the case of a continuation statement,
the record is not filed within the six (6) month period
prescribed by section 34.1-9-515(d).

(i) A record does not provide information if the
filing office is unable to read or decipher the
information; and

(ii) 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 34.1-9-512,
34.1-9-514 or 34.1-9-518, is an initial financing
statement.

(d) 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.

34.1-9-517. Effect of indexing errors.

The failure of the filing office to index a record
correctly does not affect the effectiveness of the filed
record.

34.1-9-518. Claim concerning inaccurate or wrongfully
filed record.

Page 136

(a) 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) A correction statement must:

(i) Identify the record to which it relates by:

(A) The file number assigned to the initial
financing statement to which the record relates; and

(B) If the correction statement relates to
a record filed or recorded in a filing office described in
section 34.1-9-501(a)(i), the date and time that the
initial financing statement was filed or recorded and the
information specified in section 34.1-9-502(b);

(ii) Indicate that it is a correction statement;
and

(iii) 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) 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

Page 137

34.1-9-519. Numbering, maintaining, and indexing
records; communicating information provided in records.

(a) For each record filed in a filing office, the
filing office shall:

(i) Assign a unique number to the filed record;

(ii) Create a record that bears the number
assigned to the filed record and the date and time of
filing;

(iii) Maintain the filed record for public
inspection; and

(iv) Index the filed record in accordance with
subsections (c), (d) and (e).

(b) A file number assigned after January 1, 2005,
must include a digit that:

(i) Is mathematically derived from or related to
the other digits of the file number; and

(ii) Aids the filing office in determining
whether a number communicated as the file number includes a
single-digit or transpositional error.

(i) 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

Page 138

financing statement and all filed records relating to the
initial financing statement; and

(ii) 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) 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:

(i) 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

(ii) 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) 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 34.1-9-514(a) or an amendment filed under
section 34.1-9-514(b):

(i) Under the name of the assignor as grantor;
and

Page 139

(ii) 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) The filing office shall maintain a capability:

(i) To retrieve a record by the name of the
debtor and:

(A) If the filing office is described in
section 34.1-9-501(a)(i), by the file number assigned to
the initial financing statement to which the record relates
and the date and time that the record was filed or
recorded; or

(B) If the filing office is described in
section 34.1-9-501(a)(ii), by the file number assigned to
the initial financing statement to which the record
relates; and

(ii) To associate and retrieve with one another
an initial financing statement and each filed record
relating to the initial financing statement.

(g) The filing office may not remove a debtor's name
from the index until one (1) year after the effectiveness
of a financing statement naming the debtor lapses under
section 34.1-9-515 with respect to all secured parties of
record.

(h) 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 (2) business days after the filing office receives the
record in question.

Page 140

(j) Subsections (b) and (h) do not apply to a filing
office described in section 34.1-9-501(a)(i).

34.1-9-520. Acceptance and refusal to accept record.

(a) A filing office shall refuse to accept a record
for filing for a reason set forth in section 34.1-9-516(b)
and may refuse to accept a record for filing only for a
reason set forth in section 34.1-9-516(b).

(b) 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 the case of a filing office described in
section 34.1-9-501(a)(ii), in no event more than two (2)
business days after the filing office receives the record.

(c) A filed financing statement satisfying section
34.1-9-502(a) and (b) is effective, even if the filing
office is required to refuse to accept it for filing under
subsection (a). However, section 34.1-9-338 applies to a
filed financing statement providing information described
in section 34.1-9-516(b)(v) which is incorrect at the time
the financing statement is filed.

(d) If a record communicated to a filing office
provides information that relates to more than one (1)
debtor, this part applies as to each debtor separately.

34.1-9-521. Uniform form of written financing
statement and amendment.

Page 141

(a) A filing office that accepts written records may
not refuse to accept a written initial financing statement
in the following form and format except for a reason set
forth in section 34.1-9-516(b):

Page 142

UCC FINANCING STATEMENT

Follow INSTRUCTIONS (front and back) CAREFULLY

B. SEND ACKNOWLEDGMENT TO: (Name and Address)

THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY

1. DEBTOR'S EXACT FULL LEGAL NAME insert only one debtor name (1a or 1b) – do not abbreviate or combine names

	1a. ORGANIZATION'S NAME
or	1b. INDIVIDUAL'S LAST NAME			FIRST NAME	MIDDLE NAME		SUFFIX
1c. MAILING ADDRESS				CITY	STATE	POSTAL CODE	COUNTRY
1d. Tax ID #: SSN OR EIN		ADD'L INFO RE ORGANIZATION DEBTOR	1e. TYPE OF ORGANIZATION	1f. JURISDICTION OF ORGANIZATION	1g. ORGANIZATION ID #, if any NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME insert only one debtor name (2a or 2b) - do not abbreviate or combine names
	2a. ORGANIZATION'S NAME
or	2b. INDIVIDUAL'S LAST NAME			FIRST NAME	MIDDLE NAME		SUFFIX
2c. MAILING ADDRESS				CITY	STATE	POSTAL CODE	COUNTRY
2d. Tax ID #: SSN OR EIN		ADD'L INFO RE ORGANIZATION DEBTOR	2e. TYPE OF ORGANIZATION	2f. JURISDICTION OF ORGANIZATION	2g. ORGANIZATION ID #, if any NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) - insert only one secured party name (3a or 3b)
	3a. ORGANIZATION'S NAME
or	3b. INDIVIDUAL'S LAST NAME			FIRST NAME	MIDDLE NAME		SUFFIX
3c. MAILING ADDRESS				CITY	STATE	POSTAL CODE	COUNTRY
3d. Tax ID #: SSN OR EIN		ADD'L INFO RE ORGANIZATION DEBTOR	3e. TYPE OF ORGANIZATION	3f. JURISDICTION OF ORGANIZATION	3g. ORGANIZATION ID #, if any NONE

4. This FINANCING STATEMENT covers the following collateral:

5. ALTERNATIVE DESIGNATION [If applicable] :˜ LESSEE/LESSOR ˜ CONSIGNEE/CONSIGNOR ˜ BAILEE/BAILOR ˜ SELLER/BUYER ˜ AG. LIEN ˜ NON-UCC FILING

6. ˜ This FINANCING STATEMENT IS TO BE FILED (for record) (or recorded) in the REAL ESTATE RECORDS. Attach Addendum (if applicable)

7. Check to REQUEST SEARCH REPORT(S) on Debtor(s)

(ADDITIONAL FEE) (optional) ˜ All Debtors ˜ Debtor 1 ˜ Debtor 2

8. OPTIONAL FILER REFERENCE DATA

Page 143

UCC FINANCING STATEMENT ADDENDUM

Follow INSTRUCTIONS (front and back) CAREFULLY

9. NAME OF FIRST DEBTOR (1a OR 1b) ON RELATED FINANCING STATEMENT
	9a. ORGANIZATION'S NAME
OR	9b. INDIVIDUAL'S LAST NAME	FIRST NAME	MIDDLE NAME, SUFFIX
10. MISCELLANEOUS:				THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY

11. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME insert only one debtor name (11a or 11b) – do not abbreviate or combine names

	11a. ORGANIZATION'S NAME
or	11b. INDIVIDUAL'S LAST NAME			FIRST NAME	MIDDLE NAME		SUFFIX
11c. MAILING ADDRESS				CITY	STATE	POSTAL CODE	COUNTRY
11d. Tax ID #: SSN OR EIN		ADD'L INFO RE ORGANIZATION DEBTOR	11e. TYPE OF ORGANIZATION	11f. JURISDICTION OF ORGANIZATION	11g. ORGANIZATION ID #, if any NONE
12. ADDITIONAL SECURED PARTY'S or ˜ ASSIGNOR S/P'S NAME - insert only one name (12a or 12b)
	12a. ORGANIZATION'S NAME
or	12b. INDIVIDUAL'S LAST NAME			FIRST NAME	MIDDLE NAME		SUFFIX
12c. MAILING ADDRESS				CITY	STATE	POSTAL CODE	COUNTRY
13. This FINANCING STATEMENT covers ˜ timber to be cut or ˜ as-extracted collateral, or is filed as a ˜ fixture filing. 14. Description of real estate: 15. Name and address of a RECORD OWNER of above-described real estate (if Debtor does not have a record interest):				16. Additional collateral description:
				17. Check one if applicable and check only one box. Debtor is a ˜ Trust or ˜ Trustee acting with respect to property held in trust or ˜ Decedent's Estate
				18. Check only if applicable and check only one box. ˜ Debtor is a TRANSMITTING UTILITY ˜ Filed in connection with a Manufactured-Home transaction - effective 30 years ˜Filed in connection with a Public-Finance Transaction - effective 30 years

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(b) A filing office that accepts written records may not refuse to accept a written record in the following form and format except for a reason set forth in section 34.1-9-516(b):

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UCC FINANCING STATEMENT AMENDMENT

Follow INSTRUCTIONS (front and back) CAREFULLY

A. NAME & PHONE OF CONTACT AT FILER (optional)
B. SEND ACKNOWLEDGMENT TO: (Name and Address)					THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1a. INITIAL FINANCING STATEMENT FILE #							1b. This FINANCING STATEMENT AMENDMENT is to be filed (for record) (or recorded) in the REAL ESTATE RECORDS.
2. TERMINATION: Effectiveness of the Financing Statement identified above is terminated with respect to security interest(s) of the Secured Party authorizing this Termination Statement.
3. CONTINUATION: Effectiveness of the Financing Statement identified above with respect to security interest(s) of the Secured Party authorizing this Continuation Statement is continued for the additional period provided by applicable law.
4. ASSIGNMENT (full or partial): Give name of assignee in item 7a or 7b and address of assignee in item 7c; and also give name of assignor in item 9.
5. AMENDMENT (PARTY INFORMATION): This Amendment affects Debtor or Secured Party of record. Check only one of these two boxes. Also check one of the following three boxes and provide appropriate information in items 6 and/or 7. CHANGE name and/or address: Give current record name in item 6a or 6b; also give new DELETE name: Give record name ADD name: complete item 7a or 7b, and also name (if name change) in item 7a or 7b and/or new address (if address change) in item 7c. to be deleted in items 6a or 6b. item 7c; also complete items 7d-7g (if applicable).
6. CURRENT RECORD INFORMATION:
		6a. ORGANIZATION'S NAME
or		6b. INDIVIDUAL'S LAST NAME				FIRST NAME		MIDDLE NAME		SUFFIX
7. CHANGED (NEW) OR ADDED INFORMATION:
		7a. ORGANIZATION'S NAME
or		7b. INDIVIDUAL'S LAST NAME				FIRST NAME		MIDDLE NAME		SUFFIX
7c. MAILING ADDRESS						CITY		STATE	POSTAL CODE	COUNTRY
7d. Tax ID #: SSN OR EIN			ADD'L INFO RE ORGANIZATION DEBTOR	7e. TYPE OF ORGANIZATION		7f. JURISDICTION OF ORGANIZATION		7g. ORGANIZATION ID #, if any NONE
8. AMENDMENT (COLLATERAL CHANGE): check only one box. Describe collateral deleted or added, or give entire restated collateral description, or describe collateral assigned.
9. NAME OF SECURED PARTY OF RECORD AUTHORIZING THIS AMENDMENT (name of assignor, if this is an Assignment). If this is an Amendment authorized by a Debtor which adds collateral or adds the authorizing Debtor, or if this is a Termination authorized by a Debtor, check here and enter name of DEBTOR authorizing this Amendment.
		9a. ORGANIZATION'S NAME
or		9b. INDIVIDUAL'S LAST NAME				FIRST NAME		MIDDLE NAME		SUFFIX
	10. OPTIONAL FILER REFERENCE DATA

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UCC FINANCING STATEMENT ADDENDUM

Follow INSTRUCTIONS (front and back) CAREFULLY

11. INITIAL FINANCING STATEMENT FILE # (same as item 1a on Amendment form)
	12a. ORGANIZATION'S NAME
OR	12b. INDIVIDUAL'S LAST NAME	FIRST NAME	MIDDLE NAME, SUFFIX
13. Use this space for additional information				THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY

34.1-9-522. Maintenance and destruction of records.

(a) The filing office shall maintain a record of the
information provided in a filed financing statement for at
least one (1) year after the effectiveness of the financing
statement has lapsed under section 34.1-9-515 with respect
to all secured parties of record. The record must be
retrievable by using the name of the debtor and:

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(i) If the record was filed or recorded in the
filing office described in section 34.1-9-501(a)(i), by
using the file number assigned to the initial financing
statement to which the record relates and the date and time
that the record was filed or recorded; or

(ii) If the record was filed in the filing
office described in section 34.1-9-501(a)(ii), by using the
file number assigned to the initial financing statement to
which the record relates.

(b) 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).

34.1-9-523. Information from filing office; sale or
license of records.

(a) 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
34.1-9-519(a)(i) 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:

(i) Note upon the copy the number assigned to
the record pursuant to section 34.1-9-519(a)(i) and the
date and time of the filing of the record; and

(ii) Send the copy to the person.

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(b) If a person files a record other than a written
record, the filing office shall communicate to the person
an acknowledgment that provides:

(i) The information in the record;

(ii) The number assigned to the record pursuant
to section 34.1-9-519(a)(i); and

(iii) The date and time of the filing of the
record.

(c) The filing office shall communicate or otherwise
make available in a record the following information to any
person that requests it:

(i) Whether there is on file on a date and time
specified by the filing office, but not a date earlier than
three (3) business days before the filing office receives
the request, any financing statement that:

(A) Designates a particular debtor;

(B) Has not lapsed under section 34.1-9-515
with respect to all secured parties of record; and

(C) If the request so states, has lapsed
under section 34.1-9-515 and a record of which is
maintained by the filing office under section
34.1-9-522(a).

(ii) The date and time of filing of each
financing statement; and

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(iii) The information provided in each financing
statement.

(d) 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) 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 (2) business days after the filing office receives the
request.

(f) 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.

34.1-9-524. Delay by filing office.

(a) Delay by the filing office beyond a time limit
prescribed by this part is excused if:

(i) 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

(ii) The filing office exercises reasonable
diligence under the circumstances.

34.1-9-525. Fees.

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(a) Except as otherwise provided in subsection (e),
fees for services rendered by the filing office under this
part must be set by rule adopted by the secretary of state.
The rule must set the fees for filing and indexing a record
under this article on the following basis:

(i) If a record presented for filing is
communicated to the filing office in writing and consists
of more than two (2) pages, the fee for filing and indexing
the record must be at least twice the amount of the fee for
a record communicated in writing that consists of one (1)
or two (2) pages; and

(ii) If the record is communicated by another
medium authorized by filing-office rule, the fee for filing
and indexing the record must be no more than half the
amount of the fee for a record communicated in writing that
consists of one (1) or two (2) pages.

(b) There is no subsection (b).

(d) The rule adopted pursuant to subsection (a) must
set the fee for responding to a request for information
from the filing office, including for communicating whether
there is on file any financing statement naming a
particular debtor. A fee for responding to a request
communicated in writing must be not less than twice the
amount of the fee for responding to a request communicated
by another medium authorized by filing-office rule. This
subsection does not require that a fee be charged for
remote access searching of the filing office data base.
The rule adopted pursuant to subsection (a) need not

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specify a fee for remote access searching of the filing
office data base.

(e) This section does not require a fee with respect
to a record of mortgage that 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 34.1-9-502(c). However, the recording
and satisfaction fees that otherwise would be applicable to
the record of mortgage apply.

34.1-9-526. Filing-office rules.

(a) The secretary of state shall adopt and publish
rules to implement this article. The filing-office rules
must be:

(i) Consistent with this article; and

(ii) Adopted and published in accordance with
the Wyoming Administrative Procedure Act.

(b) To keep the filing-office rules and practices of
the filing office in harmony with the rules and practices
of filing offices in other jurisdictions that enact
substantially this part, and to keep the technology used by
the filing office compatible with the technology used by
filing offices in other jurisdictions that enact
substantially this part, the secretary of state, so far as
is consistent with the purposes, policies and provisions of
this article, in adopting, amending and repealing
filing-office rules, shall:

(i) Consult with filing offices in other
jurisdictions that enact substantially this part; and

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(ii) Consult the most recent version of the
Model Rules promulgated by the International Association of
Corporate Administrators or any successor organization; and

(iii) Take into consideration the rules and
practices of, and the technology used by, filing offices in
other jurisdictions that enact substantially this part.

34.1-9-527. Duty to report.

(a) The secretary of state shall report before
January 1 of each odd numbered year to the legislature on
the operation of the filing office. The report must
contain a statement of the extent to which:

(i) The filing-office rules are not in harmony
with the rules of filing offices in other jurisdictions
that enact substantially this part and the reasons for
these variations; and

(ii) The filing-office rules are not in harmony
with the most recent version of the Model Rules promulgated
by the International Association of Corporate
Administrators, or any successor organization, and the
reasons for these variations.

PART 6

DEFAULT

34.1-9-601. Rights after default; judicial
enforcement; consignor or buyer of accounts, chattel paper,
payment intangibles or promissory notes.

(a) After default, a secured party has the rights
provided in this part and, except as otherwise provided in

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section 34.1-9-602, those provided by agreement of the
parties. A secured party:

(i) May reduce a claim to judgment, foreclose or
otherwise enforce the claim, security interest or
agricultural lien by any available judicial procedure; and

(ii) If the collateral is documents, may proceed
either as to the documents or as to the goods they cover.

(b) A secured party in possession of collateral or
control of collateral under section 34.1-9-104, 34.1-9-105,
34.1-9-106 or 34.1-9-107 has the rights and duties provided
in section 34.1-9-207.

(d) Except as otherwise provided in subsection (g)
and section 34.1-9-605, after default, a debtor and an
obligor have the rights provided in this part and by
agreement of the parties.

(e) 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:

(i) The date of perfection of the security
interest or agricultural lien in the collateral;

(ii) The date of filing a financing statement
covering the collateral; or

(iii) Any date specified in a statute under
which the agricultural lien was created.

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(f) 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) Except as otherwise provided in section
34.1-9-607(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.

34.1-9-602. Waiver and variance of rights and duties.

(a) Except as otherwise provided in section
34.1-9-624, 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:

(i) Section 34.1-9-207(b)(iv)(C), which deals
with use and operation of the collateral by the secured
party;

(ii) Section 34.1-9-210, which deals with
requests for an accounting and requests concerning a list
of collateral and statement of account;

(iii) Section 34.1-9-607(c), which deals with
collection and enforcement of collateral;

(iv) Sections 34.1-9-608(a) and 34.1-9-615(c) to
the extent that they deal with application or payment of
noncash proceeds of collection, enforcement or disposition;

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(v) Sections 34.1-9-608(a) and 34.1-9-615(d) to
the extent that they require accounting for or payment of
surplus proceeds of collateral;

(vi) Section 34.1-9-609 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;

(vii) Sections 34.1-9-610(b), 34.1-9-611,
34.1-9-613 and 34.1-9-614, which deal with disposition of
collateral;

(viii) Section 34.1-9-615(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;

(ix) Section 34.1-9-616, which deals with
explanation of the calculation of a surplus or deficiency;

(x) Sections 34.1-9-620, 34.1-9-621 and
34.1-9-622, which deal with acceptance of collateral in
satisfaction of obligation;

(xi) Section 34.1-9-623, which deals with
redemption of collateral;

(xii) Section 34.1-9-624, which deals with
permissible waivers; and

(xiii) Sections 34.1-9-625 and 34.1-9-626, which
deal with the secured party's liability for failure to
comply with this article.

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34.1-9-603. Agreement on standards concerning rights
and duties.

(a) 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 34.1-9-602 if the standards are not
manifestly unreasonable.

(b) Subsection (a) does not apply to the duty under
section 34.1-9-609 to refrain from breaching the peace.

34.1-9-604. Procedure if security agreement covers
real property or fixtures.

(a) If a security agreement covers both personal and
real property, a secured party may proceed:

(i) Under this part as to the personal property
without prejudicing any rights with respect to the real
property; or

(ii) 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) Subject to subsection (c), if a security
agreement covers goods that are or become fixtures, a
secured party may proceed:

(i) Under this part; or

(ii) In accordance with the rights with respect
to real property, in which case the other provisions of
this part do not apply.

Page 157

(c) 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) 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.

34.1-9-605. Unknown debtor or secondary obligor.

(a) A secured party does not owe a duty based on its
status as secured party:

(i) 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

(ii) To a secured party or lienholder that has
filed a financing statement against a person, unless the
secured party knows:

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(A) That the person is a debtor; and

(B) The identity of the person.

34.1-9-606. 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.

34.1-9-607. Collection and enforcement by secured
party.

(a) If so agreed, and in any event after default, a
secured party:

(i) 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;

(ii) May take any proceeds to which the secured
party is entitled under section 34.1-9-315;

(iii) 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;

(iv) If it holds a security interest in a
deposit account perfected by control under section

Page 159

34.1-9-104(a)(i), may apply the balance of the deposit
account to the obligation secured by the deposit account;
and

(v) If it holds a security interest in a deposit
account perfected by control under section
34.1-9-104(a)(ii) or (iii), may instruct the bank to pay
the balance of the deposit account to or for the benefit of
the secured party.

(b) If necessary to enable a secured party to
exercise under paragraph (a)(iii) the right of a debtor to
enforce a mortgage nonjudicially, the secured party may
record in the office in which a record of the mortgage is
recorded:

(i) A copy of the security agreement that
creates or provides for a security interest in the
obligation secured by the mortgage; and

(ii) The secured party's sworn affidavit in
recordable form stating that:

(A) A default has occurred; and

(B) The secured party is entitled to
enforce the mortgage nonjudicially.

(i) Undertakes to collect from or enforce an
obligation of an account debtor or other person obligated
on collateral; and

Page 160

(ii) Is entitled to charge back uncollected
collateral or otherwise to full or limited recourse against
the debtor or a secondary obligor.

(d) A secured party may deduct from the collections
made pursuant to subsection (c) reasonable expenses of
collection and enforcement, including reasonable attorney's
fees and legal expenses incurred by the secured party.

(e) This section does not determine whether an
account debtor, bank or other person obligated on
collateral owes a duty to a secured party.

34.1-9-608. Application of proceeds of collection or
enforcement; liability for deficiency and right to surplus.

(a) If a security interest or agricultural lien
secures payment or performance of an obligation, the
following rules apply:

(i) A secured party shall apply or pay over for
application the cash proceeds of collection or enforcement
under W.S. 34.1-9-607 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 attorney's
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

Page 161

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.

(ii) 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
subparagraph (a)(i)(C);

(iii) A secured party need not apply or pay over
for application noncash proceeds of collection and
enforcement under W.S. 34.1-9-607 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;

(iv) A secured party shall account to and pay a
debtor for any surplus, and the obligor is liable for any
deficiency.

(b) 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.

34.1-9-609. Secured party's right to take possession
after default.

(a) After default, a secured party:

(i) May take possession of the collateral; and

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(ii) Without removal, may render equipment
unusable and dispose of collateral on a debtor's premises
under section 34.1-9-610.

(b) A secured party may proceed under subsection (a):

(i) Pursuant to judicial process; or

(ii) Without judicial process, if it proceeds
without breach of the peace.

(c) 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.

34.1-9-610. Disposition of collateral after default.

(a) 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) 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 (1) or more
contracts, as a unit or in parcels, and at any time and
place and on any terms.

(i) At a public disposition; or

Page 163

(ii) 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) 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) A secured party may disclaim or modify warranties
under subsection (d):

(i) 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

(ii) By communicating to the purchaser a record
evidencing the contract for disposition and including an
express disclaimer or modification of the warranties.

(f) 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.

34.1-9-611. Notification before disposition of
collateral.

(a) In this section, "notification date" means the
earlier of the date on which:

Page 164

(i) A secured party sends to the debtor and any
secondary obligor an authenticated notification of
disposition; or

(ii) The debtor and any secondary obligor waive
the right to notification.

(b) Except as otherwise provided in subsection (d), a
secured party that disposes of collateral under section
34.1-9-610 shall send to the persons specified in
subsection (c) a reasonable authenticated notification of
disposition.

(i) The debtor;

(ii) Any secondary obligor; and

(iii) 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 (10) 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;

Page 165

(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 (10)
days before the notification date, held a security interest
in the collateral perfected by compliance with a statute,
regulation or treaty described in section 34.1-9-311(a).

(d) 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) A secured party complies with the requirement for
notification prescribed by subparagraph (c)(iii)(B) if:

(i) Not later than twenty (20) days or earlier
than thirty (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
subparagraph (c)(iii)(B); and

(ii) 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 or other lienholder named

Page 166

in that response whose financing statement covered the
collateral.

34.1-9-612. Timeliness of notification before
disposition of collateral.

(a) Except as otherwise provided in subsection (b),
whether a notification is sent within a reasonable time is
a question of fact.

(b) In a transaction other than a consumer
transaction, a notification of disposition sent after
default and ten (10) days or more before the earliest time
of disposition set forth in the notification is sent within
a reasonable time before the disposition.

34.1-9-613. Contents and form of notification before
disposition of collateral: general.

(a) Except in a consumer-goods transaction, the
following rules apply:

(i) 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;

Page 167

(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.

(ii) Whether the contents of a notification that
lacks any of the information specified in paragraph (i) are
nevertheless sufficient is a question of fact;

(iii) The contents of a notification providing
substantially the information specified in paragraph (i)
are sufficient, even if the notification includes:

(A) Information not specified by that
paragraph; or

(B) Minor errors that are not seriously
misleading.

(iv) A particular phrasing of the notification
is not required;

(v) The following form of notification and the
form appearing in section 34.1-9-614(c), 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)

Page 168

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.

34.1-9-614. Contents and form of notification before
disposition of collateral: consumer-goods transaction.

(a) In a consumer-goods transaction, the following
rules apply:

(i) A notification of disposition must provide
the following information:

(A) The information specified in section
34.1-9-613(a)(i);

(B) A description of any liability for a
deficiency of the person to which the notification is sent;

Page 169

(C) A telephone number from which the
amount that must be paid to the secured party to redeem the
collateral under section 34.1-9-623 is available; and

(D) A telephone number or mailing address
from which additional information concerning the
disposition and the obligation secured is available.

(ii) A particular phrasing of the notification
is not required;

(iii) 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:

Page 170

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 (6) 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 _______________

(iv) A notification in the form of paragraph
(iii) is sufficient, even if additional information appears
at the end of the form;

Page 171

(v) A notification in the form of paragraph
(iii) is sufficient, even if it includes errors in
information not required by paragraph (i), unless the error
is misleading with respect to rights arising under this
article;

(vi) If a notification under this section is not
in the form of paragraph (iii), law other than this article
determines the effect of including information not required
by paragraph (i).

34.1-9-615. Application of proceeds of disposition;
liability for deficiency and right to surplus.

(a) A secured party shall apply or pay over for
application the cash proceeds of disposition under W.S.
34.1-9-610 in the following order to:

(i) 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 attorney's fees and legal
expenses incurred by the secured party;

(ii) The satisfaction of obligations secured by
the security interest or agricultural lien under which the
disposition is made;

(iii) 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

Page 172

(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

(iv) 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) 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
paragraph (a)(iii).

(c) A secured party need not apply or pay over for
application noncash proceeds of disposition under W.S.
34.1-9-610 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) 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):

(i) Unless paragraph (a)(iv) 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

(ii) The obligor is liable for any deficiency.

Page 173

(e) If the underlying transaction is a sale of
accounts, chattel paper, payment intangibles or promissory
notes:

(i) The debtor is not entitled to any surplus;
and

(ii) The obligor is not liable for any
deficiency.

(f) 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:

(i) The transferee in the disposition is the
secured party, a person related to the secured party or a
secondary obligor; and

(ii) 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) 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:

(i) Takes the cash proceeds free of the security
interest or other lien;

Page 174

(ii) Is not obligated to apply the proceeds of
the disposition to the satisfaction of obligations secured
by the security interest or other lien; and

(iii) Is not obligated to account to or pay the
holder of the security interest or other lien for any
surplus.

34.1-9-616. Explanation of calculation of surplus or
deficiency.

(a) In this section:

(i) "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.

(ii) "Request" means a record:

(A) Authenticated by a debtor or consumer
obligor;

Page 175

(B) Requesting that the recipient provide
an explanation; and

(b) 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 34.1-9-615, the
secured party shall:

(i) 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 fourteen (14) days after receipt
of a request; or

(ii) In the case of a consumer obligor who is
liable for a deficiency, within fourteen (14) days after
receipt of a request, send to the consumer obligor a record
waiving the secured party's right to a deficiency.

(i) 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

Page 176

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
thirty-five (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
thirty-five (35) days before the disposition.

(ii) The amount of proceeds of the disposition;

(iii) The aggregate amount of the obligations
after deducting the amount of proceeds;

(iv) 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 attorney's fees secured by
the collateral which are known to the secured party and
relate to the current disposition;

(v) 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 (i); and

(vi) The amount of the surplus or deficiency.

(d) A particular phrasing of the explanation is not
required. An explanation complying substantially with the

Page 177

requirements of subsection (a) is sufficient, even if it
includes minor errors that are not seriously misleading.

(e) A debtor or consumer obligor is entitled without
charge to one (1) response to a request under this section
during any six (6) month period in which the secured party
did not send to the debtor or consumer obligor an
explanation pursuant to paragraph (b)(i). The secured party
may require payment of a charge not exceeding twenty-five
dollars ($25.00) for each additional response.

34.1-9-617. Rights of transferee of collateral.

(a) A secured party's disposition of collateral after
default:

(i) Transfers to a transferee for value all of
the debtor's rights in the collateral;

(ii) Discharges the security interest under
which the disposition is made; and

(iii) Discharges any subordinate security
interest or other subordinate lien.

(b) 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) If a transferee does not take free of the rights
and interests described in subsection (a), the transferee
takes the collateral subject to:

(i) The debtor's rights in the collateral;

Page 178

(ii) The security interest or agricultural lien
under which the disposition is made; and

(iii) Any other security interest or other lien.

34.1-9-618. Rights and duties of certain secondary
obligors.

(a) A secondary obligor acquires the rights and
becomes obligated to perform the duties of the secured
party after the secondary obligor:

(i) Receives an assignment of a secured
obligation from the secured party;

(ii) Receives a transfer of collateral from the
secured party and agrees to accept the rights and assume
the duties of the secured party; or

(iii) Is subrogated to the rights of a secured
party with respect to collateral.

(b) An assignment, transfer or subrogation described
in subsection (a):

(i) Is not a disposition of collateral under
section 34.1-9-610; and

(ii) Relieves the secured party of further
duties under this article.

34.1-9-619. Transfer of record or legal title.

(a) In this section, "transfer statement" means a
record authenticated by a secured party stating:

Page 179

(i) That the debtor has defaulted in connection
with an obligation secured by specified collateral;

(ii) That the secured party has exercised its
post-default remedies with respect to the collateral;

(iii) That, by reason of the exercise, a
transferee has acquired the rights of the debtor in the
collateral; and

(iv) The name and mailing address of the secured
party, debtor and transferee.

(b) 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:

(i) Accept the transfer statement;

(ii) Promptly amend its records to reflect the
transfer; and

(iii) If applicable, issue a new appropriate
certificate of title in the name of the transferee.

(c) 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.

Page 180

34.1-9-620. Acceptance of collateral in full or
partial satisfaction of obligation; compulsory disposition
of collateral.

(a) 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:

(i) The debtor consents to the acceptance under
subsection (c);

(ii) 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 34.1-9-621; 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.

(iii) If the collateral is consumer goods, the
collateral is not in the possession of the debtor when the
debtor consents to the acceptance; and

(iv) Subsection (e) does not require the secured
party to dispose of the collateral or the debtor waives the
requirement pursuant to section 34.1-9-624.

(b) A purported or apparent acceptance of collateral
under this section is ineffective unless:

Page 181

(i) The secured party consents to the acceptance
in an authenticated record or sends a proposal to the
debtor; and

(ii) The conditions of subsection (a) are met.

(i) 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

(ii) 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 twenty (20)
days after the proposal is sent.

(d) To be effective under paragraph (a)(ii), a
notification of objection must be received by the secured
party:

Page 182

(i) In the case of a person to which the
proposal was sent pursuant to section 34.1-9-621, within
twenty (20) days after notification was sent to that
person; and

(ii) In other cases:

(A) Within twenty (20) days after the last
notification was sent pursuant to section 34.1-9-621; or

(B) If a notification was not sent, before
the debtor consents to the acceptance under subsection (c).

(e) A secured party that has taken possession of
collateral shall dispose of the collateral pursuant to
section 34.1-9-610 within the time specified in subsection
(f) if:

(i) Sixty percent (60%) of the cash price has
been paid in the case of a purchase-money security interest
in consumer goods; or

(ii) Sixty percent (60%) of the principal amount
of the obligation secured has been paid in the case of a
nonpurchase-money security interest in consumer goods.

(f) To comply with subsection (e), the secured party
shall dispose of the collateral:

(i) Within ninety (90) days after taking
possession; or

(ii) 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.

Page 183

(g) In a consumer transaction, a secured party may
not accept collateral in partial satisfaction of the
obligation it secures.

34.1-9-621. Notification of proposal to accept
collateral.

(a) A secured party that desires to accept collateral
in full or partial satisfaction of the obligation it
secures shall send its proposal to:

(i) 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;

(ii) Any other secured party or lienholder that,
ten (10) 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

(iii) Any other secured party that, ten (10)
days before the debtor consented to the acceptance, held a
security interest in the collateral perfected by compliance

Page 184

with a statute, regulation or treaty described in section
34.1-9-311(a).

(b) 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).

34.1-9-622. Effect of acceptance of collateral.

(a) A secured party's acceptance of collateral in
full or partial satisfaction of the obligation it secures:

(i) Discharges the obligation to the extent
consented to by the debtor;

(ii) Transfers to the secured party all of a
debtor's rights in the collateral;

(iii) 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

(iv) Terminates any other subordinate interest.

(b) A subordinate interest is discharged or
terminated under subsection (a), even if the secured party
fails to comply with this article.

34.1-9-623. Right to redeem collateral.

(a) A debtor, any secondary obligor or any other
secured party or lienholder may redeem collateral.

(b) To redeem collateral, a person shall tender:

Page 185

(i) Fulfillment of all obligations secured by
the collateral; and

(ii) The reasonable expenses and attorney's fees
described in section 34.1-9-615(a)(i).

(i) Has collected collateral under section
34.1-9-607;

(ii) Has disposed of collateral or entered into
a contract for its disposition under section 34.1-9-610; or

(iii) Has accepted collateral in full or partial
satisfaction of the obligation it secures under section
34.1-9-622.

34.1-9-624. Waiver.

(a) A debtor or secondary obligor may waive the right
to notification of disposition of collateral under section
34.1-9-611 only by an agreement to that effect entered into
and authenticated after default.

(b) A debtor may waive the right to require
disposition of collateral under section 34.1-9-620(e) only
by an agreement to that effect entered into and
authenticated after default.

(c) Except in a consumer-goods transaction, a debtor
or secondary obligor may waive the right to redeem
collateral under section 34.1-9-623 only by an agreement to
that effect entered into and authenticated after default.

Page 186

SUBPART 2

NONCOMPLIANCE WITH ARTICLE

34.1-9-625. Remedies for secured party's failure to
comply with article.

(a) 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) 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.

(i) 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

(ii) 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 (10%) of the
principal amount of the obligation or the time-price
differential plus ten percent (10%) of the cash price.

Page 187

(d) A debtor whose deficiency is eliminated under
section 34.1-9-626 may recover damages for the loss of any
surplus. However, a debtor or secondary obligor whose
deficiency is eliminated or reduced under section
34.1-9-626 may not otherwise recover under subsection (b)
for noncompliance with the provisions of this part relating
to collection, enforcement, disposition or acceptance.

(e) 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 five hundred dollars ($500.00) in each case from a
person that:

(i) Fails to comply with section 34.1-9-208;

(ii) Fails to comply with section 34.1-9-209;

(iii) Files a record that the person is not
entitled to file under section 34.1-9-509(a);

(iv) Fails to cause the secured party of record
to file or send a termination statement as required by
section 34.1-9-513(a) or (c);

(v) Fails to comply with section
34.1-9-616(b)(i) and whose failure is part of a pattern, or
consistent with a practice, of noncompliance; or

(vi) Fails to comply with section
34.1-9-616(b)(ii).

(f) A debtor or consumer obligor may recover damages
under subsection (b) and, in addition, five hundred dollars
($500.00) in each case from a person that, without
reasonable cause, fails to comply with a request under

Page 188

section 34.1-9-210. A recipient of a request under section
34.1-9-210 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) If a secured party fails to comply with a request
regarding a list of collateral or a statement of account
under section 34.1-9-210, 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.

34.1-9-626. Action in which deficiency or surplus is
in issue.

(a) 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:

(i) 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;

(ii) 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;

(iii) Except as otherwise provided in section
34.1-9-628, if a secured party fails to prove that the
collection, enforcement, disposition or acceptance was

Page 189

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 attorney's
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.

(iv) For purposes of subparagraph (a)(iii)(B),
the amount of proceeds that would have been realized is
equal to the sum of the secured obligation, expenses and
attorney's fees unless the secured party proves that the
amount is less than that sum;

(v) If a deficiency or surplus is calculated
under section 34.1-9-615(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) 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.

Page 190

34.1-9-627. Determination of whether conduct was
commercially reasonable.

(a) 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) A disposition of collateral is made in a
commercially reasonable manner if the disposition is made:

(i) In the usual manner on any recognized
market;

(ii) At the price current in any recognized
market at the time of the disposition; or

(iii) Otherwise in conformity with reasonable
commercial practices among dealers in the type of property
that was the subject of the disposition.

(i) In a judicial proceeding;

(ii) By a bona fide creditors' committee;

(iii) By a representative of creditors; or

Page 191

(iv) By an assignee for the benefit of
creditors.

(d) 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.

34.1-9-628. Nonliability and limitation on liability
of secured party; liability of secondary obligor.

(a) 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:

(i) 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

(ii) The secured party's failure to comply with
this article does not affect the liability of the person
for a deficiency.

(b) A secured party is not liable because of its
status as secured party:

(i) 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

Page 192

(ii) 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) A secured party is not liable to any person, and
a person's 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:

(i) A debtor's representation concerning the
purpose for which collateral was to be used, acquired or
held; or

(ii) An obligor's representation concerning the
purpose for which a secured obligation was incurred.

(d) A secured party is not liable to any person under
section 34.1-9-625(c)(ii) for its failure to comply with
section 34.1-9-616.

(e) A secured party is not liable under section
34.1-9-625(c)(ii) more than once with respect to any one
(1) secured obligation.

PART 7

TRANSITION

34.1-9-701. Effective date.

Page 193

This act takes effect on July 1, 2001. References in this
part to "this Act" refer to the legislative enactment by
which this part is added to article 9 of title 34.
References in this part to "former article 9" are to
article of title 34 as in effect immediately before this
act takes effect.

34.1-9-702. Savings clause.

(a) 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) Except as otherwise provided in subsection (c)
and sections 34.1-9-703 through 34.1-9-709:

(i) 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

(ii) 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.

34.1-9-703. Security interest perfected before
effective date.

Page 194

(a) 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) Except as otherwise provided in section
34.1-9-705, 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:

(i) Is a perfected security interest for one (1)
year after this act takes effect;

(ii) Remains enforceable thereafter only if the
security interest becomes enforceable under section
34.1-9-203 before the year expires; and

(iii) Remains perfected thereafter only if the
applicable requirements for perfection under this act are
satisfied before the year expires.

34.1-9-704. Security interest unperfected before
effective date.

(a) 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:

Page 195

(i) Remains an enforceable security interest for
one (1) year after this act takes effect;

(ii) Remains enforceable thereafter if the
security interest becomes enforceable under section
34.1-9-203 when this act takes effect or within one (1)
year thereafter; and

(iii) 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.

34.1-9-705. Effectiveness of action taken before
effective date.

(a) 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 (1) year after this act takes effect. An
attached security interest becomes unperfected one (1) 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) The filing of a financing statement before this
act takes effect is effective to perfect a security

Page 196

interest to the extent the filing would satisfy the
applicable requirements for perfection under this act.

(c) 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 former section 34.1-9-103.
However, except as otherwise provided in subsections (d)
and (e) and section 34.1-9-706, the financing statement
ceases to be effective at the earlier of:

(i) The time the financing statement would have
ceased to be effective under the law of the jurisdiction in
which it is filed; or

(ii) June 30, 2006.

(d) 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) Paragraph (c)(ii) 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 former
section 34.1-9-103 only to the extent that Part 3 provides
that the law of a jurisdiction other than jurisdiction in

Page 197

which the financing statement is filed governs perfection
of a security interest in collateral covered by the
financing statement.

(f) 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.

34.1-9-706. When initial financing statement suffices
to continue effectiveness of financing statement.

(a) The filing of an initial financing statement in
the office specified in section 34.1-9-501 continues the
effectiveness of a financing statement filed before this
act takes effect if:

(i) The filing of an initial financing statement
in that office would be effective to perfect a security
interest under this act;

(ii) The preeffective date financing statement
was filed in an office in another state or another office
in this state; and

(iii) The initial financing statement satisfies
subsection (c).

(b) The filing of an initial financing statement
under subsection (a) continues the effectiveness of the
prefecture date financing statement:

(i) If the initial financing statement is filed
before this act takes effect, for the period provided in

Page 198

former section 34.1-9-403 with respect to a financing
statement; and

(ii) If the initial financing statement is filed
after this act takes effect, for the period provided in
section 34.1-9-515 with respect to an initial financing
statement.

(i) Satisfy the requirements of Part 5 for an
initial financing statement;

(ii) 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

(iii) Indicate that the preeffective date
financing statement remains effective.

34.1-9-707. Amendment of preeffective date financing
statement.

(a) In this section, "pre-effective-date financing
statement" means a financing statement filed before this
act takes effect.

(b) 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 preeffective date financing statement only
in accordance with the law of the jurisdiction governing

Page 199

perfection as provided in part 3. However, the
effectiveness of a preeffective date financing statement
also may be terminated in accordance with the law of the
jurisdiction in which the financing statement is filed.

(c) Except as otherwise provided in subsection (d) of
this section, if the law of this state governs perfection
of a security interest, the information in a preeffective
date financing statement may be amended after this act
takes effect only if:

(i) The preeffective date financing statement
and an amendment are filed in the office specified in
section 34.1-9-501;

(ii) An amendment is filed in the office
specified in section 34.1-9-501 concurrently with, or after
the filing in that office of, an initial financing
statement that satisfies section 34.1-9-706(c); or

(iii) An initial financing statement that
provides the information as amended and satisfies section
34.1-9-706(c) is filed in the office specified in section
23.1-9-501.

(d) If the law of this state governs perfection of a
security interest, the effectiveness of a preeffective date
financing statement may be continued only under section
34.1-9-705(d) and (f) or 34.1-9-706.

(e) Whether or not the law of this state governs
perfection of a security interest, the effectiveness of a
preeffective 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
preeffective date financing statement is filed, unless an

Page 200

initial financing statement that satisfies section
34.1-9-706(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.

34.1-9-708. Persons entitled to file initial
financing statement or continuation statement.

(a) A person may file an initial financing statement
or a continuation statement under this part if:

(i) The secured party of record authorizes the
filing; and

(ii) 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.

34.1-9-709. Priority.

(a) 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) For purposes of section 34.1-9-322(a), the
priority of a security interest that becomes enforceable
under section 34.1-9-203 of this act 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

Page 201

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.

Section 2. W.S. 31-2-701 and 34.1-5-118 are created
to read:

ARTICLE 7

MOTOR VEHICLE SECURITY INTERESTS

31-2-701. Perfection of a security interest in a
vehicle or motor vehicle.

(a) Two (2) steps are required for perfection of a
security interest in a vehicle or motor vehicle required to
be licensed as hereinafter defined:

(i) A financing statement or security agreement
must be filed in the office of the county clerk of the
county in which the vehicle is located; and

(ii) A notation of the security interest must be
endorsed on the certificate of title to the vehicle or
motor vehicle, the endorsement to be made concurrently with
the filing of the financing statement or security
agreement.

(b) Each owner of a vehicle or motor vehicle
concerning which an original or substitute certificate of
title has been issued who encumbers the title thereto,
shall deliver the certificate to the holder of the security
interest who, within five (5) days thereafter, shall
deliver the certificate to the clerk of the county in which
the vehicle is located, and the clerk shall then endorse on
the face of the certificate appropriate notation showing

Page 202

the date and amount of the security interest, and the name
of the secured party. If such clerk issued the certificate,
he shall immediately endorse the same security interest
data on the certificate copy on file in his office. If the
certificate was issued in some other county or state, he
shall promptly transmit to the state or county officer who
issued the certificate the same security interest data and
such other officer shall promptly endorse same on the
certificate copy on file in his office. Every financing
statement or security agreement when filed pursuant to the
provisions of this subsection shall take effect and be in
force from and after the time of filing and not before, as
to all creditors, subsequent purchasers, and holders of a
security interest in good faith for valuable consideration
and without notice.

(c) When a termination statement has been filed
pursuant to W.S. 34.1-9-513, the owner of the motor vehicle
shall present the certificate of title to the county clerk
in whose office the financing statement has been filed, and
the county clerk shall endorse a statement of the
termination of the security interest on the face of the
certificate. If the clerk issued the certificate of title,
he shall endorse a like statement of termination of the
security interest on the certificate copy on file in his
office, but otherwise he shall promptly transmit to the
state or county officer who issued the certificate of title
the statement of termination for endorsement on the
certificate copy on file in his office.

(d) The term "vehicle or motor vehicle required to be
licensed" and the words "vehicle" and "motor vehicle" as
used in this section means and includes all vehicles, motor
vehicles, house trailers, trailers, semitrailers, motor
coaches, trailer coaches, trucks, motorcycles and mobile
homes required by the motor vehicle laws of the state of

Page 203

Wyoming to have a certificate of title or required to be
registered or licensed under the laws of this state and
includes off-road recreational vehicles for which a
certificate of title has been issued under the laws of this
state.

(e) Any security interest in a mobile home required
to have a certificate of title under W.S. 31-2-501 through
31-2-508 which was perfected prior to July 1, 1985, is not
invalid or ineffective solely because a notation of the
security interest is not endorsed on the certificate of
title.

34.1-5-118. 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) of
this section, the security interest continues and is
subject to article 9, but:

(i) A security agreement is not necessary to
make the security interest enforceable under W.S.
34.1-9-203(b)(iii);

(ii) If the document is presented in a medium
other than a written or other tangible medium, the security
interest is perfected; and

Page 204

(iii) 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.

Section 3. W.S. 34-21-1107, 34.1-1-105(b)(vi) and by
creating a new paragraph (ix), 34.1-1-201(a)(ix), (xxxii)
and (xxxvii)(intro), 34.1-2-103(c), 34.1-2-210(b), by
creating a new subsection (c) and by renumbering (c)
through (e) as (d) through (f), 34.1-2-326(b),
34.1-2-502(a), by creating a new subsection (b) and by
renumbering (b) as (c), 34.1-2-716(c), 34.1-2.A-103(c),
34.1-2.A-303(a), (b), (d) and (e)(intro),
34.1-2.A-307(b)(intro) and by creating a new subsection
(e), 34.1-2.A-309(a)(ii), 34.1-4-210(c)(i),
34.1-7-503(a)(i), 34.1-8-103(f), 34.1-8-106(d)(i), (ii), by
creating a new paragraph (iii) and (f), 34.1-8-110(e),
34.1-8-301(a)(iii), 34.1-8-302(a), 34.1-8-510(a), (c) and
by creating a new subsection (d) and 37-4-103 are amended
to read:

34-21-1107. Fees.

(a) The secretary of state shall, ~~collect the~~
~~following fees:~~ while determining appropriate fees under
W.S. 34.1-9-525 for original financing statements,
determine appropriate fees for effective financing
statement filings, statements of amendments, continuation,
assignment and release and for statements of termination by
rules. The rules must be adopted in accordance with the
Wyoming Administrative Procedure Act.

Page 205

~~(i)~~ ~~For filing and indexing an original~~
financing statement containing farm products as collateral
or an original effective financing statement or reproduced
copy thereof or both a financing statement and an effective
financing statement, if filed together on the same debtor
using the same standard form........................$ 15.00

~~(ii)~~ ~~For statements of amendments, continuation,~~
assignment and release to an original financing statement
which contained farm products as collateral or for
statements of amendment and continuation to an original
effective financing statement or for any one (1) of these
statements made to both the financing statement and the
effective financing statement of the same debtor's
originally combined filing of a financing statement and
effective financing statement, if filed together on the
same standard form...................................$15.00

~~(iii)~~ ~~For each additional listing of a farm~~
product, a county or combination thereof in excess of the
first ten (10) listed ................................... $ 2.00

~~(iv)~~ ~~Penalty for presenting a standard statement~~
~~form with attachments or presenting a nonstandard form .. $10.00~~

~~(v)~~ ~~For each written confirmation to an oral or~~
~~written name inquiry on the central filing system....... $ 5.00~~

~~(vi)~~ ~~For annual registration under W.S.~~
~~34-21-1102(a)(iv)...................................... $ 50.00~~

~~(vii)~~ ~~For amending annual registration under~~
~~W.S. 34-21-1102(a)(iv)................................. $ 10.00~~

Page 206

~~(viii)~~ ~~(A)~~ ~~For either a statewide crop list by~~
county or a statewide livestock list provided on
microfiche, the annual fee is............................. FREE

~~(B)~~ ~~For both a statewide crop list by~~
county and a statewide livestock list provided on
microfiche, the annual fee is........................... $ 50.00

~~(ix)~~ ~~For either a statewide crop list or a~~
~~statewide livestock list on paper, the annual fee is... $100.00~~

~~(x)~~ ~~For each farm product list which is~~
requested less than statewide or less than all crop years
an additional annual fee of............................ $150.00

~~(xi)~~ ~~For statements of termination to an~~
original financing statement which contained farm products
as collateral, for statements of termination to an original
effective financing statement or for any statements of
termination made to both the financing statement and the
effective financing statement of the same debtor's
originally combined filing of a financing statement and
effective financing statement, if filed together on the
same standard form...................................... $ 5.00

34.1-1-105. Territorial application of the act;
parties' power to choose applicable law.

(b) Where one (1) of the following provisions of this
act 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:

Page 207

(vi) Policy and scope of the article on secured
transactions. ~~Sections 34.1-9-102 and 34.1-9-103~~ Section
34.1-9-109;

(ix) Law governing perfection, the effect of
perfection or nonperfection, and the priority of security
interests and agricultural liens. Sections 34.1-9-301
through 34.1-9-307.

34.1-1-201. General definitions.

(a) Subject to additional definitions contained in
the subsequent articles of this act which are applicable
to specific articles or parts thereof, and unless the
context otherwise requires, in this act:

(ix) "Buyer in ordinary course of business"
means a person ~~who~~ that buys goods in good faith, ~~and~~
without knowledge that the sale ~~to him is in violation of~~
violates the ~~ownership~~ rights ~~or security interest~~ of a
~~third party~~ another person in the goods, and ~~buys~~ 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. "Buying"~~ 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. 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

Page 208

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;

(xxxii) "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;

(xxxvii) "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 34.1-2-401) 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 34.1-2-401 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
34.1-2-326) Except as otherwise provided in section
34.1-2-505, 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

Page 209

buyer (section 34.1-2-401) is limited in effect to a
reservation of a "security interest".

34.1-2-103. Definitions and index of definitions.

"Check". W.S. 34.1-3-104.

"Consignee". W.S. 34.1-7-102.

"Consignor". W.S. 34.1-7-102.

"Consumer goods". W.S. ~~34.1-9-109~~ 34.1-9-102.

"Dishonor". W.S. ~~34.1-3-507~~ 34.1-3-502.

"Draft". W.S. 34.1-3-104.

34.1-2-210. Delegation of performance; assignment of
rights.

(b) Except as otherwise provided in section
34.1-9-406, 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 him by
his contract, or impair materially his 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 his entire obligation can be assigned
despite agreement otherwise.

(c) 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 (b) unless, and then only to the extent that,

Page 210

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 (1) 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 (2) 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.

~~(c)~~(d) 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.

~~(d)~~(e) 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 him to
perform those duties. This promise is enforceable by either
the assignor or the other party to the original contract.

~~(e)~~(f) The other party may treat any assignment which
delegates performance as creating reasonable grounds for
insecurity and may without prejudice to his rights against
the assignor demand assurances from the assignee (section
34.1-2-609).

34.1-2-326. Sale on approval and sale or return;
consignment sales and rights of creditors.

Page 211

(b) ~~Except as provided in subsection (c),~~ 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.

34.1-2-502. Buyer's right to goods on seller's
repudiation, failure to deliver or insolvency.

(a) Subject to ~~subsection~~ subsections (b) and (c) 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 he 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:

(i) 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

(ii) In all cases, the seller becomes insolvent
within ten (10) days after receipt of the first installment
on their price.

(b) The buyer's right to recover the goods under
paragraph (a)(i) vests upon acquisition of a special
property, even if the seller had not then repudiated or
failed to deliver.

~~(b)~~(c) If the identification creating his special
property has been made by the buyer he acquires the right
to recover the goods only if they conform to the contract
for sale.

34.1-2-716. Buyer's right to specific performance or
replevin.

Page 212

(c) The buyer has a right of replevin for goods
identified to the contract if after reasonable effort he 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.

34.1-2.A-103. Definitions and index of definitions.

"Account". Section ~~34.1-9-106~~ 34.1-9-102(a)(ii).

"Between merchants". Section 34.1-2-104(c).

"Buyer". Section 34.1-2-103(a)(i).

"Chattel paper". Section ~~34.1-9-105(a)(ii)~~
34.1-9-102(a)(xi).

"Consumer goods". Section ~~34.1-9-109(a)~~
34.1-9-102(a)(xxiii).

"Document". Section ~~34.1-9-105(a)(vi)~~
34.1-9-102(a)(xxx).

"Entrusting". Section 34.1-2-403(c).

~~"General intangibles".~~ ~~Section 34.1-9-106.~~

"General intangible". Section 34.1-9-102(a)(xlii).

"Good faith". Section 34.1-2-103(a)(ii).

"Instrument". Section ~~34.1-9-105(a)(ix)~~
34.1-9-102(a)(xlvii).

"Merchant". Section 34.1-2-104(a).

"Mortgage". Section 34.1-9-105(a)(x).

"Pursuant to commitment". Section 34.1-9-105(a)(xi).

"Receipt". Section 34.1-2-103(a)(iii).

"Sale". Section 34.1-2-106(a).

Page 213

"Sale on approval". Section 34.1-2-326.

"Sale or return". Section 34.1-2-326.

"Seller". Section 34.1-2-103(a)(iv).

34.1-2.A-303. Alienability of party's interest under
lease contract or of lessor's residual interest in goods;
delegation of performance; transfer of rights.

(a) 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 ~~34.1-9-102(a)(ii)~~ 34.1-9-109(a)(iii).

(b) Except as provided in ~~subsections (c) and~~
subsection (d) and section 34.1-9-407, a provision in a
lease agreement which (1) 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 (2) makes such
a transfer an event of default, gives rise to the rights
and remedies provided in subsection (e), but a transfer
that is prohibited or is an event of default under the
lease agreement is otherwise effective.

~~(d)~~(c) A provision in a lease agreement which (1)
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 (2) makes such a
transfer an event of default, is not enforceable, and such
a 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

Page 214

risk imposed on, the other party to the lease contract
within the purview of subsection ~~(e)~~ (d).

~~(e)~~(d) Subject to ~~subsections (c) and (d)~~ subsection
(e) and section 34.1-9-407:

34.1-2.A-307. Priority of liens arising by attachment
or levy on, security interests in, and other claims to
goods.

(b) Except as otherwise provided in ~~subsections (c)~~
~~and~~ subsection (d) and in sections 34.1-2.A-306 and
34.1-2.A-308, a creditor of a lessor takes subject to the
lease contract unless:

(e) Except as otherwise provided in sections
34.1-9-717, 34.1-9-321 and 34.1-9-323, a lessee takes a
leasehold interest subject to a security interest held by a
creditor of the lessor.

34.1-2.A-309. Lessor's and lessee's rights when goods
become fixtures.

(a) In this section:

(ii) 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 ~~34.1-9-402(e)~~
34.1-9-502(a) and (b);

34.1-4-210. Security interest of collecting bank in
items accompanying documents and proceeds.

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(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:

(i) No security agreement is necessary to make
the security interest enforceable (section ~~34.1-9-203(a)(i)~~
34.1-9-203(b)(iii)(A));

34.1-7-503. Document of title to goods defeated in
certain cases.

(a) 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:

(i) Delivered or entrusted them or any document
of title covering them to the bailor or his nominee with
actual or apparent authority to ship, store or sell or with
power to obtain delivery under this article (section
34.1-7-403) or with power of disposition under this act
(sections 34.1-2-403 and ~~34.1-9-307~~ 34.1-9-320) or other
statute or rule of law; nor

34.1-8-103. Rules for determining whether certain
obligations and interests are securities or financial
assets.

(f) A commodity contract, as defined in W.S.
~~34.1-9-115~~ 34.1-9-102(a)(xv), is not a security or a
financial asset.

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34.1-8-106. Control.

(d) A purchaser has "control" of a security
entitlement if:

(i) The purchaser becomes the entitlement
holder; or

(ii) The securities intermediary has agreed that
it will comply with entitlement orders originated by the
purchaser without further consent by the entitlement
holder;. or

(iii) 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.

(f) A purchaser who has satisfied the requirements of
~~paragraph (c)(ii) or (d)(ii)~~ subsection (c) or (d) of this
section has control, even if the registered owner in the
case of ~~paragraph (c)(ii)~~ subsection (c) or the entitlement
holder in the case of ~~paragraph (d)(ii)~~ subsection (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.

34.1-8-110. Applicability; choice of law.

(e) The following rules determine a "securities
intermediary's jurisdiction" for purposes of this section:

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(i) If an agreement between the securities
intermediary and its entitlement holder ~~specifies that it~~
~~is governed by the law of a particular jurisdiction~~
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;

(ii) If paragraph (i) 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;

~~(ii)~~(iii) If neither paragraph (i) nor (ii)
applies and an agreement between the securities
intermediary and its entitlement holder ~~does not specify~~
the governing law as provided in paragraph (i) of this
subsection, but governing 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;

~~(iii)~~(iv) If ~~an agreement between the securities~~
intermediary and its entitlement holder does not specify a
jurisdiction as provided in paragraph (i) or (ii) of this
subsection none of the preceding paragraphs applies, 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;

~~(iv)~~(v) If ~~an agreement between the securities~~
~~intermediary and its entitlement holder does not specify a~~

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~~jurisdiction as provided in paragraph (i) or (ii) of this~~
subsection and an account statement does not identify an
office serving the entitlement holder's account as provided
in paragraph (iii) of this subsection none of the preceding
paragraphs applies, the securities intermediary's
jurisdiction is the jurisdiction in which ~~is located~~ the
chief executive office of the securities intermediary is
located.

34.1-8-301. Delivery.

(a) Delivery of a certificated security to a
purchaser occurs when:

(iii) 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 (1) registered in the name of the
purchaser, (2) payable to the order of the purchaser, or
(3) specially indorsed to the purchaser by an effective
indorsement and has not been indorsed to the securities
intermediary or in blank.

34.1-8-302. Rights of purchaser.

(a) Except as otherwise provided in subsections (b)
and (c) of this section, ~~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.

34.1-8-510. 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

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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.

(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. ~~Purchasers~~ Except as
otherwise provided in subsection (d), purchasers who have
control rank ~~equally, except that~~ according to priority in
time of:

(i) 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 34.1-8-106(d)(i);

(ii) 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
34.1-8-106(d)(ii); or

(iii) If the purchaser obtained control through
another person under section 34.1-8-106(d)(iii), the time
on which priority would be based under this subsection if
the other person were the secured party.

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(d) A securities intermediary as purchaser has
priority over a conflicting purchaser who has control
unless otherwise agreed by the securities intermediary.

37-4-103. Filing security interests.

~~(a)~~ ~~Notwithstanding sections 9-302(3), as amended,~~
9-302(4), as amended, 9-401(1), as amended, and 9-402 of
the Uniform Commercial Code:

~~(i)~~(a) If filing is required under the Uniform
Commercial Code, the proper place to file in order to
perfect a security interest in personal property or
fixtures of a transmitting utility is in the office of the
secretary of state.;

~~(ii)~~(b) When the financing statement covers goods of
a transmitting utility which are or are to become fixtures,
no description of the real estate concerned is required.;

~~(iii)~~(c) A security interest in rolling stock of a
transmitting utility may be perfected either as provided in
section 20(c) of the Interstate Commerce Act or by filing a
financing statement pursuant to the Uniform Commercial Code
as provided in subsection ~~(i)~~ (a).

Section 4. W.S. 34.1-2-326(c), 34.1-2.A-303(c) and
34.1-2.A-307(b)(ii), (iii), (c) and (d) are repealed.

Section 5.

(a) In this section:

(i) "Local filing office" means a filing office,
other than the secretary of state's office, that is
designated as the proper place to file a financing

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statement under section 34.1-9-401(a) of former article 9.
The term applies only with respect to a record that covers
a type of collateral as to which the filing office is
designated in that section as the proper place to file.

(ii) "Former article 9 records" means:

(A) Financing statements and other records
that have been filed in a local-filing office before July
1, 2001, and that are, or upon processing and indexing will
be, reflected in the index maintained, as of June 30, 2001,
by the local-filing office for financing statements and
other records filed in the local-filing office before July
1, 2001; and

(B) The index as of June 30, 2001;

(C) The term does not include records
presented to a local-filing office for filing after June
30, 2001, whether or not the records relate to financing
statements filed in the local-filing office before July 1,
2001.

(iii) "Mortgage," "as-extracted collateral",
"fixture filing", "goods", and "fixtures" have the meanings
set forth in revised article 9 for those terms.

(b) A local-filing office must not accept for filing
a record presented after June 30, 2001, whether or not the
record relates to a financing statement filed in the
local-filing office before July 1, 2001.

(c) Until July 1, 2008, each local-filing office must
maintain all former article 9 records in accordance with
former article 9. A former article 9 record that is not
reflected on the index maintained at June 30, 2001, by the

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local-filing office must be processed and indexed, and
reflected on the index as of June 30, 2001, as soon as
practicable but in any event no later than July 30, 2001.

(d) Until at least June 30, 2008, each local filing
office must respond to requests for information with
respect to former article 9 records relating to a debtor
and issue certificates, in accordance with former article
9. The fees charged for responding to requests for
information relating to a debtor and issuing certificates
with respect to former article 9 records must be the fees
in effect under former article 9 on June 30, 2001, unless a
different fee is later set by the local filing office.

(e) After June 30, 2008, each local-filing office may
remove and destroy, in accordance with any then applicable
record retention law of this state, all former article 9
records, including the related index.

(f) This section does not apply to financing
statements or security agreements filed at the local-filing
office to protect interests in motor vehicles or with
respect to financing statements and other records, to a
filing office in which mortgages or records of mortgages on
real property are required to be filed or recorded, if:

(i) The collateral is timber to be cut or as
extracted collateral; or

(ii) The record is or relates to a financing
statement filed as a fixture filing and the collateral is
goods that are or are to become fixtures.

Section 6. The legislative service office is
authorized to conform any other bill passed by the
legislature during the 2001 general session which amends or

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references article 9 of title 34.1 to conform to the format
and numbering adopted by this act.

Section 7. There is appropriated from the general
fund to the office of the secretary of state an amount of
one million sixty-two thousand dollars ($1,062,000.00) for
the purposes of this act. Of this general fund
appropriation, ninety-seven thousand two hundred dollars
($97,200.00) shall be expended for the administration of
this act for the period beginning April 1, 2001 and ending
June 30, 2002, and nine hundred sixty-four thousand eight
hundred dollars ($964,800.00) shall be expended for
purposes of section 8 of this act. The secretary of state
is authorized two (2) full-time positions.

Section 8. The secretary of state shall utilize a
local area network computer operations system and have the
system operational by July 1, 2002, for purposes of fully
implementing this act.

Section 9. In addition to the reports required by
W.S. 34.1-9-527(a), the secretary of state shall report to
the legislature before January 1, 2002 on the operation of
the filing office. The report shall include an update on
the implementation of a local area network computer
operations system required under section 8 of this act.

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Section 10.

(a) Except as provided by subsection (b) of this
section, this act is effective July 1, 2001.

(b) Notwithstanding subsection (a) of this section,
section 7 of this act is effective April 1, 2001.

(END)

Speaker of the House President of the Senate

Governor

TIME APPROVED: _________

DATE APPROVED: _________

I hereby certify that this act originated in the House.

Chief Clerk

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