U.C.C. - ARTICLE 1 - GENERAL PROVISIONS PART 1. GENERAL PROVISIONS 1-101. Short Titles. (a) This A!t" #a$ %e !

!ite& as the U'i(or# Co##er!ial Co&e. (%) This arti!le #a$ %e !ite& as U'i(or# Co##er!ial Co&e-Ge'eral Pro)isio's. 1-10*. S!o+e o( Arti!le. This arti!le a++lies to a tra'sa!tio' to the e,te't that it is -o)er'e& %$ a'other arti!le o( the U'i(or# Co##er!ial Co&e". 1-10.. Co'str/!tio' o( U'i(or# Co##er!ial Co&e" to Pro#ote its P/r+oses a'& Poli!ies0 A++li!a%ilit$ o( S/++le#e'tal Pri'!i+les o( La1. (a) The U'i(or# Co##er!ial Co&e" #/st %e li%erall$ !o'str/e& a'& a++lie& to +ro#ote its /'&erl$i'- +/r+oses a'& +oli!ies2 1hi!h are0 (1) to si#+li($2 !lari($2 a'& #o&er'i3e the la1 -o)er'i'- !o##er!ial tra'sa!tio's4 (*) to +er#it the !o'ti'/e& e,+a'sio' o( !o##er!ial +ra!ti!es thro/-h !/sto#2 /sa-e2 a'& a-ree#e't o( the +arties4 a'& (.) to #a5e /'i(or# the la1 a#o'- the )ario/s 6/ris&i!tio's. (%) U'less &is+la!e& %$ the +arti!/lar +ro)isio's o( the U'i(or# Co##er!ial Co&e"2 the +ri'!i+les o( la1 a'& e7/it$2 i'!l/&i'- the la1 #er!ha't a'& the la1 relati)e to !a+a!it$ to !o'tra!t2 +ri'!i+al a'& a-e't2 esto++el2 (ra/&2 #isre+rese'tatio'2 &/ress2 !oer!io'2 #ista5e2 %a'5r/+t!$2 a'& other )ali&ati'- or i')ali&ati'- !a/se s/++le#e't its +ro)isio's. 1-108. Co'str/!tio' A-ai'st I#+lie& Re+eal. The U'i(or# Co##er!ial Co&e" %ei'- a -e'eral a!t i'te'&e& as a /'i(ie& !o)era-e o( its s/%6e!t #atter2 'o +art o( it shall %e &ee#e& to %e i#+lie&l$ re+eale& %$ s/%se7/e't le-islatio' i( s/!h !o'str/!tio' !a' reaso'a%l$ %e a)oi&e&. 1-109. Se)era%ilit$. I( a'$ +ro)isio' or !la/se o( the U'i(or# Co##er!ial Co&e" or its a++li!atio' to a'$ +erso' or !ir!/#sta'!e is hel& i')ali&2 the i')ali&it$ &oes 'ot a((e!t other +ro)isio's or a++li!atio's o( the U'i(or# Co##er!ial Co&e" 1hi!h !a' %e -i)e' e((e!t 1itho/t the i')ali& +ro)isio' or a++li!atio'2 a'& to this e'& the +ro)isio's o( the U'i(or# Co##er!ial Co&e" are se)era%le. 1-10:. Use o( Si'-/lar a'& Pl/ral4 Ge'&er. I' the U'i(or# Co##er!ial Co&e"2 /'less the stat/tor$ !o'te,t other1ise re7/ires0 (1) 1or&s i' the si'-/lar '/#%er i'!l/&e the +l/ral2 a'& those i' the +l/ral i'!l/&e the si'-/lar4 a'& (*) 1or&s o( a'$ -e'&er also re(er to a'$ other -e'&er. 1-10;. Se!tio' Ca+tio's. Se!tio' !a+tio's are +art o( the U'i(or# Co##er!ial Co&e". 1-10<. Relatio' to Ele!tro'i! Si-'at/res i' Glo%al a'& Natio'al Co##er!e A!t. This arti!le #o&i(ies2 li#its2 a'& s/+erse&es the (e&eral Ele!tro'i! Si-'at/res i' Glo%al a'& Natio'al Co##er!e A!t2 19 U.S.C. Se!tio' ;001 et se7.2 e,!e+t that 'othi'- i' this arti!le #o&i(ies2 li#its2 or s/+erse&es Se!tio' ;001(!) o( that A!t or a/thori3es ele!tro'i! &eli)er$ o( a'$ o( the 'oti!es &es!ri%e& i' Se!tio' ;00.(%) o( that A!t. PART *. GENERAL =E>INITIONS AN= PRINCIPLES O> INTERPRETATION 1-*01. Ge'eral =e(i'itio's.

(a) U'less the !o'te,t other1ise re7/ires2 1or&s or +hrases &e(i'e& i' this se!tio'2 or i' the a&&itio'al &e(i'itio's !o'tai'e& i' other arti!les o( the U'i(or# Co##er!ial Co&e" that a++l$ to +arti!/lar arti!les or +arts thereo(2 ha)e the #ea'i'-s state&. (%) S/%6e!t to &e(i'itio's !o'tai'e& i' other arti!les o( the U'i(or# Co##er!ial Co&e" that a++l$ to +arti!/lar arti!les or +arts thereo(0 (1) ?A!tio'?2 i' the se'se o( a 6/&i!ial +ro!ee&i'-2 i'!l/&es re!o/+#e't2 !o/'ter!lai#2 set-o((2 s/it i' e7/it$2 a'& a'$ other +ro!ee&i'- i' 1hi!h ri-hts are &eter#i'e&. (*) ?A--rie)e& +art$? #ea's a +art$ e'title& to +/rs/e a re#e&$. (.) ?A-ree#e't?2 as &isti'-/ishe& (ro# ?!o'tra!t?2 #ea's the %ar-ai' o( the +arties i' (a!t2 as (o/'& i' their la'-/a-e or i'(erre& (ro# other !ir!/#sta'!es2 i'!l/&i'- !o/rse o( +er(or#a'!e2 !o/rse o( &eali'-2 or /sa-e o( tra&e as +ro)i&e& i' Se!tio' 1-.0.. (8) ?@a'5? #ea's a +erso' e'-a-e& i' the %/si'ess o( %a'5i'- a'& i'!l/&es a sa)i'-s %a'52 sa)i'-s a'& loa' asso!iatio'2 !re&it /'io'2 a'& tr/st !o#+a'$. (9) ?@earer? #ea's a +erso' i' +ossessio' o( a 'e-otia%le i'str/#e't2 &o!/#e't o( title2 or !erti(i!ate& se!/rit$ that is +a$a%le to %earer or i'&orse& i' %la'5. (:) ?@ill o( la&i'-? #ea's a &o!/#e't e)i&e'!i'- the re!ei+t o( -oo&s (or shi+#e't iss/e& %$ a +erso' e'-a-e& i' the %/si'ess o( tra's+orti'- or (or1ar&i'- -oo&s. (;) ?@ra'!h? i'!l/&es a se+aratel$ i'!or+orate& (orei-' %ra'!h o( a %a'5. (<) ?@/r&e' o( esta%lishi'-? a (a!t #ea's the %/r&e' o( +ers/a&i'- the trier o( (a!t that the e,iste'!e o( the (a!t is #ore +ro%a%le tha' its 'o'e,iste'!e. (A) ?@/$er i' or&i'ar$ !o/rse o( %/si'ess? #ea's a +erso' that %/$s -oo&s i' -oo& (aith2 1itho/t 5'o1le&-e that the sale )iolates the ri-hts o( a'other +erso' i' the -oo&s2 a'& i' the or&i'ar$ !o/rse (ro# a +erso'2 other tha' a +a1'%ro5er2 i' the %/si'ess o( selli'- -oo&s o( that 5i'&. A +erso' %/$s -oo&s i' the or&i'ar$ !o/rse i( the sale to the +erso' !o#+orts 1ith the /s/al or !/sto#ar$ +ra!ti!es i' the 5i'& o( %/si'ess i' 1hi!h the seller is e'-a-e& or 1ith the sellerBs o1' /s/al or !/sto#ar$ +ra!ti!es. A +erso' that sells oil2 -as2 or other #i'erals at the 1ellhea& or #i'ehea& is a +erso' i' the %/si'ess o( selli'- -oo&s o( that 5i'&. A %/$er i' or&i'ar$ !o/rse o( %/si'ess #a$ %/$ (or !ash2 %$ e,!ha'-e o( other +ro+ert$2 or o' se!/re& or /'se!/re& !re&it2 a'& #a$ a!7/ire -oo&s or &o!/#e'ts o( title /'&er a +ree,isti'- !o'tra!t (or sale. O'l$ a %/$er that ta5es +ossessio' o( the -oo&s or has a ri-ht to re!o)er the -oo&s (ro# the seller /'&er Arti!le * #a$ %e a %/$er i' or&i'ar$ !o/rse o( %/si'ess. ?@/$er i' or&i'ar$ !o/rse o( %/si'ess? &oes 'ot i'!l/&e a +erso' that a!7/ires -oo&s i' a tra's(er i' %/l5 or as se!/rit$ (or or i' total or +artial satis(a!tio' o( a #o'e$ &e%t. (10) ?Co's+i!/o/s?2 1ith re(ere'!e to a ter#2 #ea's so 1ritte'2 &is+la$e&2 or +rese'te& that a reaso'a%le +erso' a-ai'st 1hi!h it is to o+erate o/-ht to ha)e 'oti!e& it. Chether a ter# is ?!o's+i!/o/s? or 'ot is a &e!isio' (or the !o/rt. Co's+i!/o/s ter#s i'!l/&e the (ollo1i'-0 (A) a hea&i'- i' !a+itals e7/al to or -reater i' si3e tha' the s/rro/'&i'- te,t2 or i' !o'trasti'- t$+e2 (o't2 or !olor to the s/rro/'&i'- te,t o( the sa#e or lesser si3e4 a'& (@) la'-/a-e i' the %o&$ o( a re!or& or &is+la$ i' lar-er t$+e tha' the s/rro/'&i'te,t2 or i' !o'trasti'- t$+e2 (o't2 or !olor to the s/rro/'&i'- te,t o( the sa#e si3e2 or set o(( (ro# s/rro/'&i'- te,t o( the sa#e si3e %$ s$#%ols or other #ar5s that !all atte'tio' to the la'-/a-e.

(11) ?Co's/#er? #ea's a' i'&i)i&/al 1ho e'ters i'to a tra'sa!tio' +ri#aril$ (or +erso'al2 (a#il$2 or ho/sehol& +/r+oses. (1*) ?Co'tra!t?2 as &isti'-/ishe& (ro# ?a-ree#e't?2 #ea's the total le-al o%li-atio' that res/lts (ro# the +artiesB a-ree#e't as &eter#i'e& %$ the U'i(or# Co##er!ial Co&e" as s/++le#e'te& %$ a'$ other a++li!a%le la1s. (1.) ?Cre&itor? i'!l/&es a -e'eral !re&itor2 a se!/re& !re&itor2 a lie' !re&itor2 a'& a'$ re+rese'tati)e o( !re&itors2 i'!l/&i'- a' assi-'ee (or the %e'e(it o( !re&itors2 a tr/stee i' %a'5r/+t!$2 a re!ei)er i' e7/it$2 a'& a' e,e!/tor or a&#i'istrator o( a' i'sol)e't &e%torBs or assi-'orBs estate. (18) ?=e(e'&a't? i'!l/&es a +erso' i' the +ositio' o( &e(e'&a't i' a !o/'ter!lai#2 !ross!lai#2 or thir&-+art$ !lai#. (19) ?=eli)er$?2 1ith res+e!t to a' i'str/#e't2 &o!/#e't o( title2 or !hattel +a+er2 #ea's )ol/'tar$ tra's(er o( +ossessio'. (1:) ?=o!/#e't o( title? i'!l/&es %ill o( la&i'-2 &o!5 1arra't2 &o!5 re!ei+t2 1areho/se re!ei+t or or&er (or the &eli)er$ o( -oo&s2 a'& also a'$ other &o!/#e't 1hi!h i' the re-/lar !o/rse o( %/si'ess or (i'a'!i'- is treate& as a&e7/atel$ e)i&e'!i'- that the +erso' i' +ossessio' o( it is e'title& to re!ei)e2 hol&2 a'& &is+ose o( the &o!/#e't a'& the -oo&s it !o)ers. To %e a &o!/#e't o( title2 a &o!/#e't #/st +/r+ort to %e iss/e& %$ or a&&resse& to a %ailee a'& +/r+ort to !o)er -oo&s i' the %aileeBs +ossessio' 1hi!h are either i&e'ti(ie& or are (/'-i%le +ortio's o( a' i&e'ti(ie& #ass. (1;) ?>a/lt? #ea's a &e(a/lt2 %rea!h2 or 1ro'-(/l a!t or o#issio'. (1<) ?>/'-i%le -oo&s? #ea's0 (A) -oo&s o( 1hi!h a'$ /'it2 %$ 'at/re or /sa-e o( tra&e2 is the e7/i)ale't o( a'$ other li5e /'it4 or (@) -oo&s that %$ a-ree#e't are treate& as e7/i)ale't. (1A) ?Ge'/i'e? #ea's (ree o( (or-er$ or !o/'ter(eiti'-. (*0) ?Goo& (aith2? e,!e+t as other1ise +ro)i&e& i' Arti!le 92 #ea's ho'est$ i' (a!t a'& the o%ser)a'!e o( reaso'a%le !o##er!ial sta'&ar&s o( (air &eali'-. (*1) ?Dol&er? #ea's0 (A) the +erso' i' +ossessio' o( a 'e-otia%le i'str/#e't that is +a$a%le either to %earer or to a' i&e'ti(ie& +erso' that is the +erso' i' +ossessio'4 or (@) the +erso' i' +ossessio' o( a &o!/#e't o( title i( the -oo&s are &eli)era%le either to %earer or to the or&er o( the +erso' i' +ossessio'. (**) ?I'sol)e'!$ +ro!ee&i'-? i'!l/&es a' assi-'#e't (or the %e'e(it o( !re&itors or other +ro!ee&i'- i'te'&e& to li7/i&ate or reha%ilitate the estate o( the +erso' i')ol)e&. (*.) ?I'sol)e't? #ea's0 (A) ha)i'- -e'erall$ !ease& to +a$ &e%ts i' the or&i'ar$ !o/rse o( %/si'ess other tha' as a res/lt o( %o'a (i&e &is+/te4 (@) %ei'- /'a%le to +a$ &e%ts as the$ %e!o#e &/e4 or (C) %ei'- i'sol)e't 1ithi' the #ea'i'- o( (e&eral %a'5r/+t!$ la1. (*8) ?Eo'e$? #ea's a #e&i/# o( e,!ha'-e !/rre'tl$ a/thori3e& or a&o+te& %$ a &o#esti! or (orei-' -o)er'#e't. The ter# i'!l/&es a #o'etar$ /'it o( a!!o/'t esta%lishe& %$ a' i'ter-o)er'#e'tal or-a'i3atio' or %$ a-ree#e't %et1ee' t1o or #ore !o/'tries. (*9) ?Or-a'i3atio'? #ea's a +erso' other tha' a' i'&i)i&/al. (*:) ?Part$?2 as &isti'-/ishe& (ro# ?thir& +art$?2 #ea's a +erso' that has e'-a-e& i' a tra'sa!tio' or #a&e a' a-ree#e't s/%6e!t to the U'i(or# Co##er!ial Co&e".

(*;) ?Perso'? #ea's a' i'&i)i&/al2 !or+oratio'2 %/si'ess tr/st2 estate2 tr/st2 +art'ershi+2 li#ite& lia%ilit$ !o#+a'$2 asso!iatio'2 6oi't )e't/re2 -o)er'#e't2 -o)er'#e'tal s/%&i)isio'2 a-e'!$2 or i'str/#e'talit$2 +/%li! !or+oratio'2 or a'$ other le-al or !o##er!ial e'tit$. (*<) ?Prese't )al/e? #ea's the a#o/'t as o( a &ate !ertai' o( o'e or #ore s/#s +a$a%le i' the (/t/re2 &is!o/'te& to the &ate !ertai' %$ /se o( either a' i'terest rate s+e!i(ie& %$ the +arties i( that rate is 'ot #a'i(estl$ /'reaso'a%le at the ti#e the tra'sa!tio' is e'tere& i'to or2 i( a' i'terest rate is 'ot so s+e!i(ie&2 a !o##er!iall$ reaso'a%le rate that ta5es i'to a!!o/'t the (a!ts a'& !ir!/#sta'!es at the ti#e the tra'sa!tio' is e'tere& i'to. (*A) ?P/r!hase? #ea's ta5i'- %$ sale2 lease2 &is!o/'t2 'e-otiatio'2 #ort-a-e2 +le&-e2 lie'2 se!/rit$ i'terest2 iss/e or reiss/e2 -i(t2 or a'$ other )ol/'tar$ tra'sa!tio' !reati'a' i'terest i' +ro+ert$. (.0) ?P/r!haser? #ea's a +erso' that ta5es %$ +/r!hase. (.1) ?Re!or&? #ea's i'(or#atio' that is i's!ri%e& o' a ta'-i%le #e&i/# or that is store& i' a' ele!tro'i! or other #e&i/# a'& is retrie)a%le i' +er!ei)a%le (or#. (.*) ?Re#e&$? #ea's a'$ re#e&ial ri-ht to 1hi!h a' a--rie)e& +art$ is e'title& 1ith or 1itho/t resort to a tri%/'al. (..) ?Re+rese'tati)e? #ea's a +erso' e#+o1ere& to a!t (or a'other2 i'!l/&i'- a' a-e't2 a' o((i!er o( a !or+oratio' or asso!iatio'2 a'& a tr/stee2 e,e!/tor2 or a&#i'istrator o( a' estate. (.8) ?Ri-ht? i'!l/&es re#e&$. (.9) ?Se!/rit$ i'terest? #ea's a' i'terest i' +erso'al +ro+ert$ or (i,t/res 1hi!h se!/res +a$#e't or +er(or#a'!e o( a' o%li-atio'. ?Se!/rit$ i'terest? i'!l/&es a'$ i'terest o( a !o'si-'or a'& a %/$er o( a!!o/'ts2 !hattel +a+er2 a +a$#e't i'ta'-i%le2 or a +ro#issor$ 'ote i' a tra'sa!tio' that is s/%6e!t to Arti!le A. ?Se!/rit$ i'terest? &oes 'ot i'!l/&e the s+e!ial +ro+ert$ i'terest o( a %/$er o( -oo&s o' i&e'ti(i!atio' o( those -oo&s to a !o'tra!t (or sale /'&er Se!tio' *-9092 the ri-ht o( a seller or lessor o( -oo&s /'&er Arti!le * or *A to retai' or a!7/ire +ossessio' o( the -oo&s is 'ot a ?se!/rit$ i'terest?2 %/t a seller or lessor #a$ also a!7/ire a ?se!/rit$ i'terest? %$ !o#+l$i'- 1ith Arti!le A. The rete'tio' or reser)atio' o( title %$ a seller o( -oo&s 'ot1ithsta'&i'- shi+#e't or &eli)er$ to the %/$er /'&er Se!tio' *-801 is li#ite& i' e((e!t to a reser)atio' o( a ?se!/rit$ i'terest.? Chether a tra'sa!tio' i' the (or# o( a lease !reates a ?se!/rit$ i'terest? is &eter#i'e& +/rs/a't to Se!tio' 1-*0.. (.:) ?Se'&? i' !o''e!tio' 1ith a 1riti'-2 re!or&2 or 'oti!e #ea's0 (A) to &e+osit i' the #ail or &eli)er (or tra's#issio' %$ a'$ other /s/al #ea's o( !o##/'i!atio' 1ith +osta-e or !ost o( tra's#issio' +ro)i&e& (or a'& +ro+erl$ a&&resse& a'&2 i' the !ase o( a' i'str/#e't2 to a' a&&ress s+e!i(ie& thereo' or other1ise a-ree&2 or i( there %e 'o'e to a'$ a&&ress reaso'a%le /'&er the !ir!/#sta'!es4 or (@) i' a'$ other 1a$ to !a/se to %e re!ei)e& a'$ re!or& or 'oti!e 1ithi' the ti#e it 1o/l& ha)e arri)e& i( +ro+erl$ se't. (.;) ?Si-'e&? i'!l/&es /si'- a'$ s$#%ol e,e!/te& or a&o+te& 1ith +rese't i'te'tio' to a&o+t or a!!e+t a 1riti'-.

(.<) ?State? #ea's a State o( the U'ite& States2 the =istri!t o( Col/#%ia2 P/erto Ri!o2 the U'ite& States Vir-i' Isla'&s2 or a'$ territor$ or i's/lar +ossessio' s/%6e!t to the 6/ris&i!tio' o( the U'ite& States. (.A) ?S/ret$? i'!l/&es a -/ara'tor or other se!o'&ar$ o%li-or. (80) ?Ter#? #ea's a +ortio' o( a' a-ree#e't that relates to a +arti!/lar #atter. (81) ?U'a/thori3e& si-'at/re? #ea's a si-'at/re #a&e 1itho/t a!t/al2 i#+lie&2 or a++are't a/thorit$. The ter# i'!l/&es a (or-er$. (8*) ?Careho/se re!ei+t? #ea's a re!ei+t iss/e& %$ a +erso' e'-a-e& i' the %/si'ess o( stori'- -oo&s (or hire. (8.) ?Criti'-? i'!l/&es +ri'ti'-2 t$+e1riti'-2 or a'$ other i'te'tio'al re&/!tio' to ta'-i%le (or#. ?Critte'? has a !orres+o'&i'- #ea'i'-. 1-*0*. Noti!e4 F'o1le&-e. (a) S/%6e!t to s/%se!tio' (()2 a +erso' has ?'oti!e? o( a (a!t i( the +erso'0 (1) has a!t/al 5'o1le&-e o( it4 (*) has re!ei)e& a 'oti!e or 'oti(i!atio' o( it4 or (.) (ro# all the (a!ts a'& !ir!/#sta'!es 5'o1' to the +erso' at the ti#e i' 7/estio'2 has reaso' to 5'o1 that it e,ists. (%) ?F'o1le&-e? #ea's a!t/al 5'o1le&-e. ?F'o1s? has a !orres+o'&i'- #ea'i'-. (!) ?=is!o)er?2 ?lear'?2 or 1or&s o( si#ilar i#+ort re(er to 5'o1le&-e rather tha' to reaso' to 5'o1. (&) A +erso' ?'oti(ies? or ?-i)es? a 'oti!e or 'oti(i!atio' to a'other +erso' %$ ta5i's/!h ste+s as #a$ %e reaso'a%l$ re7/ire& to i'(or# the other +erso' i' or&i'ar$ !o/rse2 1hether or 'ot the other +erso' a!t/all$ !o#es to 5'o1 o( it. (e) S/%6e!t to s/%se!tio' (()2 a +erso' ?re!ei)es? a 'oti!e or 'oti(i!atio' 1he'0 (1) it !o#es to that +erso'Bs atte'tio'4 or (*) it is &/l$ &eli)ere& i' a (or# reaso'a%le /'&er the !ir!/#sta'!es at the +la!e o( %/si'ess thro/-h 1hi!h the !o'tra!t 1as #a&e or at a'other lo!atio' hel& o/t %$ that +erso' as the +la!e (or re!ei+t o( s/!h !o##/'i!atio's. (() Noti!e2 5'o1le&-e2 or a 'oti!e or 'oti(i!atio' re!ei)e& %$ a' or-a'i3atio' is e((e!ti)e (or a +arti!/lar tra'sa!tio' (ro# the ti#e it is %ro/-ht to the atte'tio' o( the i'&i)i&/al !o'&/!ti'- that tra'sa!tio' a'&2 i' a'$ e)e't2 (ro# the ti#e it 1o/l& ha)e %ee' %ro/-ht to the i'&i)i&/alBs atte'tio' i( the or-a'i3atio' ha& e,er!ise& &/e &ili-e'!e. A' or-a'i3atio' e,er!ises &/e &ili-e'!e i( it #ai'tai's reaso'a%le ro/ti'es (or !o##/'i!ati'- si-'i(i!a't i'(or#atio' to the +erso' !o'&/!ti'- the tra'sa!tio' a'& there is reaso'a%le !o#+lia'!e 1ith the ro/ti'es. =/e &ili-e'!e &oes 'ot re7/ire a' i'&i)i&/al a!ti'- (or the or-a'i3atio' to !o##/'i!ate i'(or#atio' /'less the !o##/'i!atio' is +art o( the i'&i)i&/alBs re-/lar &/ties or the i'&i)i&/al has reaso' to 5'o1 o( the tra'sa!tio' a'& that the tra'sa!tio' 1o/l& %e #ateriall$ a((e!te& %$ the i'(or#atio'. 1-*0.. Lease =isti'-/ishe& (ro# Se!/rit$ I'terest. (a) Chether a tra'sa!tio' i' the (or# o( a lease !reates a lease or se!/rit$ i'terest is &eter#i'e& %$ the (a!ts o( ea!h !ase. (%) A tra'sa!tio' i' the (or# o( a lease !reates a se!/rit$ i'terest i( the !o'si&eratio' that the lessee is to +a$ the lessor (or the ri-ht to +ossessio' a'& /se o( the -oo&s is a' o%li-atio' (or the ter# o( the lease a'& is 'ot s/%6e!t to ter#i'atio' %$ the lessee2 a'&0

(1) the ori-i'al ter# o( the lease is e7/al to or -reater tha' the re#ai'i'- e!o'o#i! li(e o( the -oo&s4 (*) the lessee is %o/'& to re'e1 the lease (or the re#ai'i'- e!o'o#i! li(e o( the -oo&s or is %o/'& to %e!o#e the o1'er o( the -oo&s4 (.) the lessee has a' o+tio' to re'e1 the lease (or the re#ai'i'- e!o'o#i! li(e o( the -oo&s (or 'o a&&itio'al !o'si&eratio' or (or 'o#i'al a&&itio'al !o'si&eratio' /+o' !o#+lia'!e 1ith the lease a-ree#e't4 or (8) the lessee has a' o+tio' to %e!o#e the o1'er o( the -oo&s (or 'o a&&itio'al !o'si&eratio' or (or 'o#i'al a&&itio'al !o'si&eratio' /+o' !o#+lia'!e 1ith the lease a-ree#e't. (!) A tra'sa!tio' i' the (or# o( a lease &oes 'ot !reate a se!/rit$ i'terest #erel$ %e!a/se0 (1) the +rese't )al/e o( the !o'si&eratio' the lessee is o%li-ate& to +a$ the lessor (or the ri-ht to +ossessio' a'& /se o( the -oo&s is s/%sta'tiall$ e7/al to or is -reater tha' the (air #ar5et )al/e o( the -oo&s at the ti#e the lease is e'tere& i'to4 (*) the lessee ass/#es ris5 o( loss o( the -oo&s4 (.) the lessee a-rees to +a$2 1ith res+e!t to the -oo&s2 ta,es2 i's/ra'!e2 (ili'-2 re!or&i'-2 or re-istratio' (ees2 or ser)i!e or #ai'te'a'!e !osts4 (8) the lessee has a' o+tio' to re'e1 the lease or to %e!o#e the o1'er o( the -oo&s4 (9) the lessee has a' o+tio' to re'e1 the lease (or a (i,e& re't that is e7/al to or -reater tha' the reaso'a%l$ +re&i!ta%le (air #ar5et re't (or the /se o( the -oo&s (or the ter# o( the re'e1al at the ti#e the o+tio' is to %e +er(or#e&4 or (:) the lessee has a' o+tio' to %e!o#e the o1'er o( the -oo&s (or a (i,e& +ri!e that is e7/al to or -reater tha' the reaso'a%l$ +re&i!ta%le (air #ar5et )al/e o( the -oo&s at the ti#e the o+tio' is to %e +er(or#e&. (&) A&&itio'al !o'si&eratio' is 'o#i'al i( it is less tha' the lesseeBs reaso'a%l$ +re&i!ta%le !ost o( +er(or#i'- /'&er the lease a-ree#e't i( the o+tio' is 'ot e,er!ise&. A&&itio'al !o'si&eratio' is 'ot 'o#i'al i(0 (1) 1he' the o+tio' to re'e1 the lease is -ra'te& to the lessee2 the re't is state& to %e the (air #ar5et re't (or the /se o( the -oo&s (or the ter# o( the re'e1al &eter#i'e& at the ti#e the o+tio' is to %e +er(or#e&4 or (*) 1he' the o+tio' to %e!o#e the o1'er o( the -oo&s is -ra'te& to the lessee2 the +ri!e is state& to %e the (air #ar5et )al/e o( the -oo&s &eter#i'e& at the ti#e the o+tio' is to %e +er(or#e&. (e) The ?re#ai'i'- e!o'o#i! li(e o( the -oo&s? a'& ?reaso'a%l$ +re&i!ta%le? (air #ar5et re't2 (air #ar5et )al/e2 or !ost o( +er(or#i'- /'&er the lease a-ree#e't #/st %e &eter#i'e& 1ith re(ere'!e to the (a!ts a'& !ir!/#sta'!es at the ti#e the tra'sa!tio' is e'tere& i'to. 1-*08. Val/e. E,!e+t as other1ise +ro)i&e& i' Arti!les .2 82 a'&" 92 a'& :"2 a +erso' -i)es )al/e (or ri-hts i( the +erso' a!7/ires the#0 (1) i' ret/r' (or a %i'&i'- !o##it#e't to e,te'& !re&it or (or the e,te'sio' o( i##e&iatel$ a)aila%le !re&it2 1hether or 'ot &ra1' /+o' a'& 1hether or 'ot a !har-e-%a!5 is +ro)i&e& (or i' the e)e't o( &i((i!/lties i' !olle!tio'4 (*) as se!/rit$ (or2 or i' total or +artial satis(a!tio' o(2 a +ree,isti'- !lai#4 (.) %$ a!!e+ti'- &eli)er$ /'&er a +ree,isti'- !o'tra!t (or +/r!hase4 or (8) i' ret/r' (or a'$ !o'si&eratio' s/((i!ie't to s/++ort a si#+le !o'tra!t. 1-*09. Reaso'a%le ti#e4 Seaso'a%le'ess. (a) Chether a ti#e (or ta5i'- a' a!tio' re7/ire& %$ the U'i(or# Co##er!ial Co&e" is reaso'a%le &e+e'&s o' the 'at/re2 +/r+ose2 a'& !ir!/#sta'!es o( the a!tio'.

(%) A' a!tio' is ta5e' seaso'a%l$ i( it is ta5e' at or 1ithi' the ti#e a-ree& or2 i( 'o ti#e is a-ree&2 at or 1ithi' a reaso'a%le ti#e. 1-*0:. Pres/#+tio's. Che'e)er the U'i(or# Co##er!ial Co&e" !reates a ?+res/#+tio'? 1ith res+e!t to a (a!t2 or +ro)i&es that a (a!t is ?+res/#e&2? the trier o( (a!t #/st (i'& the e,iste'!e o( the (a!t /'less a'& /'til e)i&e'!e is i'tro&/!e& that s/++orts a (i'&i'- o( its 'o'e,iste'!e. PART .. TERRITORIAL APPLICA@ILITG AN= GENERAL RULES 1-.01. Territorial A++li!a%ilit$4 PartiesB Po1er to Choose A++li!a%le La1. (a) I' this se!tio'0 (1) ?=o#esti! tra'sa!tio'? #ea's a tra'sa!tio' other tha' a' i'ter'atio'al tra'sa!tio'. (*) ?I'ter'atio'al tra'sa!tio'? #ea's a tra'sa!tio' that %ears a reaso'a%le relatio' to a !o/'tr$ other tha' the U'ite& States. (%) This se!tio' a++lies to a tra'sa!tio' to the e,te't that it is -o)er'e& %$ a'other arti!le o( the U'i(or# Co##er!ial Co&e". (!) E,!e+t as other1ise +ro)i&e& i' this se!tio'0 (1) a' a-ree#e't %$ +arties to a &o#esti! tra'sa!tio' that a'$ or all o( their ri-hts a'& o%li-atio's are to %e &eter#i'e& %$ the la1 o( this State or o( a'other State is e((e!ti)e2 1hether or 'ot the tra'sa!tio' %ears a relatio' to the State &esi-'ate&4 a'& (*) a' a-ree#e't %$ +arties to a' i'ter'atio'al tra'sa!tio' that a'$ or all o( their ri-hts a'& o%li-atio's are to %e &eter#i'e& %$ the la1 o( this State or o( a'other State or !o/'tr$ is e((e!ti)e2 1hether or 'ot the tra'sa!tio' %ears a relatio' to the State or !o/'tr$ &esi-'ate&. (&) I' the a%se'!e o( a' a-ree#e't e((e!ti)e /'&er s/%se!tio' (!)2 a'& e,!e+t as +ro)i&e& i' s/%se!tio's (e) a'& (-)2 the ri-hts a'& o%li-atio's o( the +arties are &eter#i'e& %$ the la1 that 1o/l& %e sele!te& %$ a++li!atio' o( this StateBs !o'(li!t o( la1s +ri'!i+les. (e) I( o'e o( the +arties to a tra'sa!tio' is a !o's/#er2 the (ollo1i'- r/les a++l$0 (1) A' a-ree#e't re(erre& to i' s/%se!tio' (!) is 'ot e((e!ti)e /'less the tra'sa!tio' %ears a reaso'a%le relatio' to the State or !o/'tr$ &esi-'ate&. (*) A++li!atio' o( the la1 o( the State or !o/'tr$ &eter#i'e& +/rs/a't to s/%se!tio' (!) or (&) #a$ 'ot &e+ri)e the !o's/#er o( the +rote!tio' o( a'$ r/le o( la1 -o)er'i'- a #atter 1ithi' the s!o+e o( this se!tio'2 1hi!h %oth is +rote!ti)e o( !o's/#ers a'& #a$ 'ot %e )arie& %$ a-ree#e't0 (A) o( the State or !o/'tr$ i' 1hi!h the !o's/#er +ri'!i+all$ resi&es2 /'less s/%+ara-ra+h (@) a++lies4 or (@) i( the tra'sa!tio' is a sale o( -oo&s2 o( the State or !o/'tr$ i' 1hi!h the !o's/#er %oth #a5es the !o'tra!t a'& ta5es &eli)er$ o( those -oo&s2 i( s/!h State or !o/'tr$ is 'ot the State or !o/'tr$ i' 1hi!h the !o's/#er +ri'!i+all$ resi&es. (() A' a-ree#e't other1ise e((e!ti)e /'&er s/%se!tio' (!) is 'ot e((e!ti)e to the e,te't that a++li!atio' o( the la1 o( the State or !o/'tr$ &esi-'ate& 1o/l& %e !o'trar$ to a (/'&a#e'tal +oli!$ o( the State or !o/'tr$ 1hose la1 1o/l& -o)er' i' the a%se'!e o( a-ree#e't /'&er s/%se!tio' (&). (-) To the e,te't that the U'i(or# Co##er!ial Co&e" -o)er's a tra'sa!tio'2 i( o'e o( the (ollo1i'- +ro)isio's o( the U'i(or# Co##er!ial Co&e" s+e!i(ies the a++li!a%le la12

that +ro)isio' -o)er's a'& a !o'trar$ a-ree#e't is e((e!ti)e o'l$ to the e,te't +er#itte& %$ the la1 so s+e!i(ie&0 (1) Se!tio' *-80*4 (*) Se!tio's *A-109 a'& *A-10:4 (.) Se!tio' 8-10*4 (8) Se!tio' 8A-90;4 (9) Se!tio' 9-11:4 (:) Se!tio' :-10.4" (;) Se!tio' <-1104 (<) Se!tio's A-.01 thro/-h A-.0;. 1-.0*. Variatio' %$ A-ree#e't. (a) E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (%) or else1here i' the U'i(or# Co##er!ial Co&e"2 the e((e!t o( +ro)isio's o( the U'i(or# Co##er!ial Co&e" #a$ %e )arie& %$ a-ree#e't. (%) The o%li-atio's o( -oo& (aith2 &ili-e'!e2 reaso'a%le'ess2 a'& !are +res!ri%e& %$ the U'i(or# Co##er!ial Co&e" #a$ 'ot %e &is!lai#e& %$ a-ree#e't. The +arties2 %$ a-ree#e't2 #a$ &eter#i'e the sta'&ar&s %$ 1hi!h the +er(or#a'!e o( those o%li-atio's is to %e #eas/re& i( those sta'&ar&s are 'ot #a'i(estl$ /'reaso'a%le. Che'e)er the U'i(or# Co##er!ial Co&e" re7/ires a' a!tio' to %e ta5e' 1ithi' a reaso'a%le ti#e2 a ti#e that is 'ot #a'i(estl$ /'reaso'a%le #a$ %e (i,e& %$ a-ree#e't. (!) The +rese'!e i' !ertai' +ro)isio's o( the U'i(or# Co##er!ial Co&e" o( the +hrase ?/'less other1ise a-ree&?2 or 1or&s o( si#ilar i#+ort2 &oes 'ot i#+l$ that the e((e!t o( other +ro)isio's #a$ 'ot %e )arie& %$ a-ree#e't /'&er this se!tio'. 1-.0.. Co/rse o( Per(or#a'!e2 Co/rse o( =eali'-2 a'& Usa-e o( Tra&e. (a) A ?!o/rse o( +er(or#a'!e? is a se7/e'!e o( !o'&/!t %et1ee' the +arties to a +arti!/lar tra'sa!tio' that e,ists i(0 (1) the a-ree#e't o( the +arties 1ith res+e!t to the tra'sa!tio' i')ol)es re+eate& o!!asio's (or +er(or#a'!e %$ a +art$4 a'& (*) the other +art$2 1ith 5'o1le&-e o( the 'at/re o( the +er(or#a'!e a'& o++ort/'it$ (or o%6e!tio' to it2 a!!e+ts the +er(or#a'!e or a!7/ies!es i' it 1itho/t o%6e!tio'. (%) A ?!o/rse o( &eali'-? is a se7/e'!e o( !o'&/!t !o'!er'i'- +re)io/s tra'sa!tio's %et1ee' the +arties to a +arti!/lar tra'sa!tio' that is (airl$ to %e re-ar&e& as esta%lishi'- a !o##o' %asis o( /'&ersta'&i'- (or i'ter+reti'- their e,+ressio's a'& other !o'&/!t. (!) A ?/sa-e o( tra&e? is a'$ +ra!ti!e or #etho& o( &eali'- ha)i'- s/!h re-/larit$ o( o%ser)a'!e i' a +la!e2 )o!atio'2 or tra&e as to 6/sti($ a' e,+e!tatio' that it 1ill %e o%ser)e& 1ith res+e!t to the tra'sa!tio' i' 7/estio'. The e,iste'!e a'& s!o+e o( s/!h a /sa-e #/st %e +ro)e& as (a!ts. I( it is esta%lishe& that s/!h a /sa-e is e#%o&ie& i' a tra&e !o&e or si#ilar re!or&2 the i'ter+retatio' o( the re!or& is a 7/estio' o( la1. (&) A !o/rse o( +er(or#a'!e or !o/rse o( &eali'- %et1ee' the +arties or /sa-e o( tra&e i' the )o!atio' or tra&e i' 1hi!h the$ are e'-a-e& or o( 1hi!h the$ are or sho/l& %e a1are is rele)a't i' as!ertai'i'- the #ea'i'- o( the +artiesB a-ree#e't2 #a$ -i)e +arti!/lar #ea'i'- to s+e!i(i! ter#s o( the a-ree#e't2 a'& #a$ s/++le#e't or 7/ali($ the ter#s o( the a-ree#e't. A /sa-e o( tra&e a++li!a%le i' the +la!e i' 1hi!h +art o( the +er(or#a'!e /'&er the a-ree#e't is to o!!/r #a$ %e so /tili3e& as to that +art o( the +er(or#a'!e. (e) E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (()2 the e,+ress ter#s o( a' a-ree#e't a'& a'$ a++li!a%le !o/rse o( +er(or#a'!e2 !o/rse o( &eali'-2 or /sa-e o( tra&e #/st %e !o'str/e& 1he'e)er reaso'a%le as !o'siste't 1ith ea!h other. I( s/!h a !o'str/!tio' is /'reaso'a%le0 (1) e,+ress ter#s +re)ail o)er !o/rse o( +er(or#a'!e2 !o/rse o( &eali'-2

a'& /sa-e o( tra&e4 (*) !o/rse o( +er(or#a'!e +re)ails o)er !o/rse o( &eali'- a'& /sa-e o( tra&e4 a'& (.) !o/rse o( &eali'- +re)ails o)er /sa-e o( tra&e. (() S/%6e!t to Se!tio' *-*0A2 a !o/rse o( +er(or#a'!e is rele)a't to sho1 a 1ai)er or #o&i(i!atio' o( a'$ ter# i'!o'siste't 1ith the !o/rse o( +er(or#a'!e. (-) E)i&e'!e o( a rele)a't /sa-e o( tra&e o((ere& %$ o'e +art$ is 'ot a&#issi%le /'less that +art$ has -i)e' the other +art$ 'oti!e that the !o/rt (i'&s s/((i!ie't to +re)e't /'(air s/r+rise to the other +art$. 1-.08. O%li-atio' o( Goo& >aith. E)er$ !o'tra!t or &/t$ 1ithi' the U'i(or# Co##er!ial Co&e" i#+oses a' o%li-atio' o( -oo& (aith i' its +er(or#a'!e a'& e'(or!e#e't. 1-.09. Re#e&ies to %e Li%erall$ A&#i'istere&. (a) The re#e&ies +ro)i&e& %$ the U'i(or# Co##er!ial Co&e" #/st %e li%erall$ a&#i'istere& to the e'& that the a--rie)e& +art$ #a$ %e +/t i' as -oo& a +ositio' as i( the other +art$ ha& (/ll$ +er(or#e& %/t 'either !o'se7/e'tial or s+e!ial &a#a-es 'or +e'al &a#a-es #a$ %e ha& e,!e+t as s+e!i(i!all$ +ro)i&e& i' the U'i(or# Co##er!ial Co&e" or %$ other r/le o( la1. (%) A'$ ri-ht or o%li-atio' &e!lare& %$ the U'i(or# Co##er!ial Co&e" is e'(or!ea%le %$ a!tio' /'less the +ro)isio' &e!lari'- it s+e!i(ies a &i((ere't a'& li#ite& e((e!t. 1-.0:. Cai)er or Re'/'!iatio' o( Clai# or Ri-ht A(ter @rea!h. A !lai# or ri-ht arisi'- o/t o( a' alle-e& %rea!h #a$ %e &is!har-e& i' 1hole or i' +art 1itho/t !o'si&eratio' %$ a-ree#e't o( the a--rie)e& +art$ i' a' a/the'ti!ate& re!or&. 1-.0;. Pri#a >a!ie E)i&e'!e %$ Thir&-Part$ =o!/#e'ts. A &o!/#e't i' &/e (or# +/r+orti'- to %e a %ill o( la&i'-2 +oli!$ or !erti(i!ate o( i's/ra'!e2 o((i!ial 1ei-herBs or i's+e!torBs !erti(i!ate2 !o's/lar i')oi!e2 or a'$ other &o!/#e't a/thori3e& or re7/ire& %$ the !o'tra!t to %e iss/e& %$ a thir& +art$ is +ri#a (a!ie e)i&e'!e o( its o1' a/the'ti!it$ a'& -e'/i'e'ess a'& o( the (a!ts state& i' the &o!/#e't %$ the thir& +art$. 1-.0<. Per(or#a'!e or A!!e+ta'!e U'&er Reser)atio' o( Ri-hts. (a) A +art$ that 1ith e,+li!it reser)atio' o( ri-hts +er(or#s or +ro#ises +er(or#a'!e or asse'ts to +er(or#a'!e i' a #a''er &e#a'&e& or o((ere& %$ the other +art$ &oes 'ot there%$ +re6/&i!e the ri-hts reser)e&. S/!h 1or&s as ?1itho/t +re6/&i!e2? ?/'&er +rotest2? or the li5e are s/((i!ie't. (%) S/%se!tio' (a) &oes 'ot a++l$ to a' a!!or& a'& satis(a!tio'. 1-.0A. O+tio' to A!!elerate at Cill. A ter# +ro)i&i'- that o'e +art$ or that +art$Bs s/!!essor i' i'terest #a$ a!!elerate +a$#e't or +er(or#a'!e or re7/ire !ollateral or a&&itio'al !ollateral ?at 1ill? or 1he' the +art$ ?&ee#s itsel( i'se!/re2? or 1or&s o( si#ilar i#+ort2 #ea's that the +art$ has +o1er to &o so o'l$ i( that +art$ i' -oo& (aith %elie)es that the +ros+e!t o( +a$#e't or +er(or#a'!e is i#+aire&. The %/r&e' o( esta%lishi'- la!5 o( -oo& (aith is o' the +art$ a-ai'st 1hi!h the +o1er has %ee' e,er!ise&. 1-.10. S/%or&i'ate& O%li-atio's. A' o%li-atio' #a$ %e iss/e& as s/%or&i'ate& to +er(or#a'!e o( a'other o%li-atio' o( the +erso' o%li-ate&2 or a !re&itor #a$ s/%or&i'ate its ri-ht to +er(or#a'!e o( a' o%li-atio' %$ a-ree#e't 1ith either the +erso' o%li-ate& or a'other !re&itor o( the +erso'

o%li-ate&. S/%or&i'atio' &oes 'ot !reate a se!/rit$ i'terest as a-ai'st either the !o##o' &e%tor or a s/%or&i'ate& !re&itor. U.C.C. - ARTICLE * - SALES PART 1. SDORT TITLE2 GENERAL CONSTRUCTION AN= SU@HECT EATTER *-101. Short Title. This Arti!le shall %e 5'o1' a'& #a$ %e !ite& as U'i(or# Co##er!ial Co&e-Sales. *-10*. S!o+e4 Certai' Se!/rit$ a'& Other Tra'sa!tio's E,!l/&e& >ro# This Arti!le. U'less the !o'te,t other1ise re7/ires2 this Arti!le a++lies to tra'sa!tio's i' -oo&s4 it &oes 'ot a++l$ to a'$ tra'sa!tio' 1hi!h altho/-h i' the (or# o( a' /'!o'&itio'al !o'tra!t to sell or +rese't sale is i'te'&e& to o+erate o'l$ as a se!/rit$ tra'sa!tio' 'or &oes this Arti!le i#+air or re+eal a'$ stat/te re-/lati'- sales to !o's/#ers2 (ar#ers or other s+e!i(ie& !lasses o( %/$ers. *-10.. =e(i'itio's a'& I'&e, o( =e(i'itio's. (1) I' this Arti!le /'less the !o'te,t other1ise re7/ires (a) ?@/$er? #ea's a +erso' that %/$s or !o'tra!ts to %/$ -oo&s. (%) ?Co's+i!/o/s?2 1ith re(ere'!e to a ter#2 #ea's so 1ritte'2 &is+la$e&2 or +rese'te& that a reaso'a%le +erso' a-ai'st 1hi!h it is to o+erate o/-ht to ha)e 'oti!e& it. A ter# i' a' ele!tro'i! re!or& i'te'&e& to e)o5e a res+o'se %$ a' ele!tro'i! a-e't is !o's+i!/o/s i( it is +rese'te& i' a (or# that 1o/l& e'a%le a reaso'a%l$ !o'(i-/re& ele!tro'i! a-e't to ta5e it i'to a!!o/'t or rea!t to it 1itho/t re)ie1 o( the re!or& %$ a' i'&i)i&/al. Chether a ter# is ?!o's+i!/o/s? or 'ot is a &e!isio' (or the !o/rt. Co's+i!/o/s ter#s i'!l/&e the (ollo1i'-0 (i) (or a +erso'0 (A) a hea&i'- i' !a+itals e7/al to or -reater i' si3e tha' the s/rro/'&i'- te,t2 or i' !o'trasti'- t$+e2 (o't2 or !olor to the s/rro/'&i'- te,t o( the sa#e or lesser si3e4 a'& (@) la'-/a-e i' the %o&$ o( a re!or& or &is+la$ i' lar-er t$+e tha' the s/rro/'&i'- te,t2 or i' !o'trasti'- t$+e2 (o't2 or !olor to the s/rro/'&i'- te,t o( the sa#e si3e2 or set o(( (ro# s/rro/'&i'- te,t o( the sa#e si3e %$ s$#%ols or other #ar5s that !all atte'tio' to the la'-/a-e4 a'& (ii) (or a +erso' or a' ele!tro'i! a-e't2 a ter# that is so +la!e& i' a re!or& or &is+la$ that the +erso' or ele!tro'i! a-e't #a$ 'ot +ro!ee& 1itho/t ta5i'- a!tio' 1ith res+e!t to the +arti!/lar ter#. (!) ?Co's/#er? #ea's a' i'&i)i&/al 1ho %/$s or !o'tra!ts to %/$ -oo&s that2 at the ti#e o( !o'tra!ti'-2 are i'te'&e& %$ the i'&i)i&/al to %e /se& +ri#aril$ (or +erso'al2 (a#il$2 or ho/sehol& +/r+oses. (&) ?Co's/#er !o'tra!t? #ea's a !o'tra!t %et1ee' a #er!ha't seller a'& a !o's/#er. (e) ?=eli)er$? #ea's the )ol/'tar$ tra's(er o( +h$si!al +ossessio' or !o'trol o( -oo&s. (() ?Ele!tro'i!? #ea's relati'- to te!h'olo-$ ha)i'- ele!tri!al2 &i-ital2 #a-'eti!2 1ireless2 o+ti!al2 ele!tro#a-'eti!2 or si#ilar !a+a%ilities. (-) ?Ele!tro'i! a-e't? #ea's a !o#+/ter +ro-ra# or a' ele!tro'i! or other a/to#ate& #ea's /se& i'&e+e'&e'tl$ to i'itiate a' a!tio' or res+o'& to ele!tro'i! re!or&s or +er(or#a'!es i' 1hole or i' +art2 1itho/t re)ie1 or a!tio' %$ a' i'&i)i&/al.

(h) ?Ele!tro'i! re!or&? #ea's a re!or& !reate&2 -e'erate&2 se't2 !o##/'i!ate&2 re!ei)e&2 or store& %$ ele!tro'i! #ea's. (i) ?>orei-' e,!ha'-e tra'sa!tio'? #ea's a tra'sa!tio' i' 1hi!h o'e +art$ a-rees to &eli)er a 7/a'tit$ o( a s+e!i(ie& #o'e$ or /'it o( a!!o/'t i' !o'si&eratio' o( the other +art$Bs a-ree#e't to &eli)er a'other 7/a'tit$ o( a &i((ere't #o'e$ or /'it o( a!!o/'t either !/rre'tl$ or at a (/t/re &ate2 a'& i' 1hi!h &eli)er$ is to %e thro/-h (/'&s tra's(er2 %oo5 e'tr$ a!!o/'ti'-2 or other (or# o( +a$#e't or&er2 or other a-ree& #ea's to tra's(er a !re&it %ala'!e. The ter# i'!l/&es a tra'sa!tio' o( this t$+e i')ol)i'- t1o or #ore #o'e$s a'& s+ot2 (or1ar&2 o+tio'2 or other +ro&/!ts &eri)e& (ro# /'&erl$i'#o'e$s a'& a'$ !o#%i'atio' o( these tra'sa!tio's. The ter# &oes 'ot i'!l/&e a tra'sa!tio' i')ol)i'- t1o or #ore #o'e$s i' 1hi!h o'e or %oth o( the +arties is o%li-ate& to #a5e +h$si!al &eli)er$2 at the ti#e o( !o'tra!ti'- or i' the (/t/re2 o( %a'5'otes2 !oi's2 or other (or# o( le-al te'&er or s+e!ie. (6) Reser)e&" (6) ?Goo& (aith? #ea's ho'est$ i' (a!t a'& the o%ser)a'!e o( reaso'a%le !o##er!ial sta'&ar&s o( (air &eali'-." Le-islati)e Note0 The &e(i'itio' o( ?-oo& (aith? sho/l& 'ot %e a&o+te& i( the 6/ris&i!tio' has e'a!te& this &e(i'itio' as +art o( Arti!le 1. (5) ?Goo&s? #ea's all thi'-s that are #o)a%le at the ti#e o( i&e'ti(i!atio' to a !o'tra!t (or sale. The ter# i'!l/&es (/t/re -oo&s2 s+e!iall$ #a'/(a!t/re& -oo&s2 the /'%or' $o/'- o( a'i#als2 -ro1i'- !ro+s2 a'& other i&e'ti(ie& thi'-s atta!he& to realt$ as &es!ri%e& i' Se!tio' *-10;. The ter# &oes 'ot i'!l/&e i'(or#atio'2 the #o'e$ i' 1hi!h the +ri!e is to %e +ai&2 i')est#e't se!/rities /'&er Arti!le <2 the s/%6e!t #atter o( (orei-' e,!ha'-e tra'sa!tio's2 or !hoses i' a!tio'. (l) ?Re!ei+t o( -oo&s? #ea's ta5i'- +h$si!al +ossessio' o( -oo&s. (#) ?Re!or&? #ea's i'(or#atio' that is i's!ri%e& o' a ta'-i%le #e&i/# or that is store& i' a' ele!tro'i! or other #e&i/# a'& is retrie)a%le i' +er!ei)a%le (or#. Le-islati)e Note0 The &e(i'itio' o( ?re!or&? sho/l& 'ot %e a&o+te& i( the 6/ris&i!tio' has e'a!te& re)ise& Arti!le 1. (') ?Re#e&ial +ro#ise? #ea's a +ro#ise %$ the seller to re+air or re+la!e -oo&s or to re(/'& all or +art o( the +ri!e o( -oo&s /+o' the ha++e'i'- o( a s+e!i(ie& e)e't. (o) ?Seller? #ea's a +erso' that sells or !o'tra!ts to sell -oo&s. (+) ?Si-'? #ea's2 1ith +rese't i'te't to a/the'ti!ate or a&o+t a re!or&0 (i) to e,e!/te or a&o+t a ta'-i%le s$#%ol4 or (ii) to atta!h to or lo-i!all$ asso!iate 1ith the re!or& a' ele!tro'i! so/'&2 s$#%ol2 or +ro!ess. (*) Other &e(i'itio's a++l$i'- to this Arti!le or to s+e!i(ie& Parts thereo(2 a'& the se!tio's i' 1hi!h the$ a++ear are0 ?A!!e+ta'!e?. Se!tio' *-:0:. ?@et1ee' #er!ha'ts?. Se!tio' *-108. ?Ca'!ellatio'?. Se!tio' *-10:(8). ?Co##er!ial /'it?. Se!tio' *-109. ?Co'(or#i'- to !o'tra!t?. Se!tio' *-10:. ?Co'tra!t (or sale?. Se!tio' *-10:.

?Co)er?. Se!tio' *-;1*. ?E'tr/sti'-?. Se!tio' *-80.. ?>i'a'!i'- a-e'!$?. Se!tio' *-108. ?>/t/re Goo&s?. Se!tio' *-109. ?Goo&s?. Se!tio' *-10.. ?I&e'ti(i!atio'?. Se!tio' *-901. ?I'stall#e't !o'tra!t?. Se!tio' *-:1*. ?Lot?. Se!tio' *-109. ?Eer!ha't?. Se!tio' *-108. ?Perso' i' +ositio' o( Seller?. Se!tio' *-;0;. ?Prese't sale?. Se!tio' *-10:. ?Sale?. Se!tio' *-10:. ?Sale o' a++ro)al?. Se!tio' *-.*:. ?Sale or ret/r'?. Se!tio' *-.*:. ?Ter#i'atio'?. Se!tio' *-10:. (.) ?Co'trol? as +ro)i&e& i' Se!tio' ;-10: a'& the (ollo1i'- &e(i'itio's i' other Arti!les a++l$ to this Arti!le0 ?Che!5?. Se!tio' .-108((). ?Co'si-'ee?. Se!tio' ;-10*(.). ?Co'si-'or?. Se!tio' ;-10*(8). ?Co's/#er Goo&s?. Se!tio' A-10*(a)(*.). ?=isho'or?. Se!tio' .-90*. ?=ra(t?. Se!tio' .-108(e). ?Do'or?. Se!tio' 9-10*(a)(<). ?I'6/'!tio' a-ai'st ho'or?. Se!tio' 9-10A(%). ?Letter o( !re&it?. Se!tio' 9-10*(a)(10). (8) I' a&&itio' Arti!le 1 !o'tai's -e'eral &e(i'itio's a'& +ri'!i+les o( !o'str/!tio' a'& i'ter+retatio' a++li!a%le thro/-ho/t this Arti!le. *-108. =e(i'itio's0 ?Eer!ha't?4 ?@et1ee' Eer!ha'ts?4 ?>i'a'!i'- A-e'!$?. (1) ?Eer!ha't? #ea's a +erso' that &eals i' -oo&s o( the 5i'& or other1ise hol&s itsel( o/t %$ o!!/+atio' as ha)i'- 5'o1le&-e or s5ill +e!/liar to the +ra!ti!es or -oo&s i')ol)e& i' the tra'sa!tio' or to 1hi!h the 5'o1le&-e or s5ill #a$ %e attri%/te& %$ the +erso'Bs e#+lo$#e't o( a' a-e't or %ro5er or other i'ter#e&iar$ that hol&s itsel( o/t %$ o!!/+atio' as ha)i'- the 5'o1le&-e or s5ill. (*) ?>i'a'!i'- a-e'!$? #ea's a %a'52 (i'a'!e !o#+a'$ or other +erso' that i' the or&i'ar$ !o/rse o( %/si'ess #a5es a&)a'!es a-ai'st -oo&s or &o!/#e'ts o( title or that %$ arra'-e#e't 1ith either the seller or the %/$er i'ter)e'es i' or&i'ar$ !o/rse to #a5e or !olle!t +a$#e't &/e or !lai#e& /'&er the !o'tra!t (or sale2 as %$ +/r!hasi'- or +a$i'- the sellerBs &ra(t or #a5i'- a&)a'!es a-ai'st it or %$ #erel$ ta5i'- it (or !olle!tio' 1hether or 'ot &o!/#e'ts o( title a!!o#+a'$ or are asso!iate& 1ith the &ra(t. The ter# i'!l/&es also a %a'5 or other +erso' that si#ilarl$ i'ter)e'es %et1ee' +erso's that are i' the +ositio' o( seller a'& %/$er i' res+e!t to the -oo&s (Se!tio' *-;0;). (.) ?@et1ee' Eer!ha'ts? #ea's i' a'$ tra'sa!tio' 1ith res+e!t to 1hi!h %oth +arties are !har-ea%le 1ith the 5'o1le&-e or s5ill o( #er!ha'ts.

 *-109. =e(i'itio's0 Tra's(era%ilit$4 ?>/t/re? Goo&s4 ?Lot?4 ?Co##er!ial U'it?. (1) Goo&s #/st %e %oth e,isti'- a'& i&e'ti(ie& %e(ore a'$ i'terest i' the# #a$ +ass. Goo&s that are 'ot %oth e,isti'- a'& i&e'ti(ie& are ?(/t/re? -oo&s. A +/r+orte& +rese't sale o( (/t/re -oo&s or o( a'$ i'terest therei' o+erates as a !o'tra!t to sell. (*) There #a$ %e a sale o( a +art i'terest i' e,isti'- i&e'ti(ie& -oo&s. (.) A' /'&i)i&e& share i' a' i&e'ti(ie& %/l5 o( (/'-i%le -oo&s is s/((i!ie'tl$ i&e'ti(ie& to %e sol& altho/-h the 7/a'tit$ o( the %/l5 is 'ot &eter#i'e&. A'$ a-ree& +ro+ortio' o( the %/l5 or a'$ 7/a'tit$ thereo( a-ree& /+o' %$ '/#%er2 1ei-ht2 or other #eas/re #a$ to the e,te't o( the sellerBs i'terest i' the %/l5 %e sol& to the %/$er that the' %e!o#es a' o1'er i' !o##o'. (8) ?Lot? #ea's a +ar!el or a si'-le arti!le 1hi!h is the s/%6e!t #atter o( a se+arate sale or &eli)er$2 1hether or 'ot it is s/((i!ie't to +er(or# the !o'tra!t. (9) ?Co##er!ial /'it? #ea's s/!h a /'it o( -oo&s as %$ !o##er!ial /sa-e is a si'-le 1hole (or +/r+oses o( sale a'& &i)isio' o( 1hi!h #ateriall$ i#+airs its !hara!ter or )al/e o' the #ar5et or i' /se. A !o##er!ial /'it #a$ %e a si'-le arti!le (as a #a!hi'e) or a set o( arti!les (as a s/ite o( (/r'it/re or a' assort#e't o( si3es) or a 7/a'tit$ (as a %ale2 -ross2 or !arloa&) or a'$ other /'it treate& i' /se or i' the rele)a't #ar5et as a si'-le 1hole. *-10:. =e(i'itio's0 ?Co'tra!t?4 ?A-ree#e't?4 ?Co'tra!t (or sale?4 ?Sale?4 ?Prese't sale?4 ?Co'(or#i'-? to Co'tra!t4 ?Ter#i'atio'?4 ?Ca'!ellatio'?. (1) I' this Arti!le /'less the !o'te,t other1ise re7/ires ?!o'tra!t? a'& ?a-ree#e't? are li#ite& to those relati'- to the +rese't or (/t/re sale o( -oo&s. ?Co'tra!t (or sale? i'!l/&es %oth a +rese't sale o( -oo&s a'& a !o'tra!t to sell -oo&s at a (/t/re ti#e. A ?sale? !o'sists i' the +assi'- o( title (ro# the seller to the %/$er (or a +ri!e (Se!tio' *801). A ?+rese't sale? #ea's a sale 1hi!h is a!!o#+lishe& %$ the #a5i'- o( the !o'tra!t. (*) Goo&s or !o'&/!t i'!l/&i'- a'$ +art o( a +er(or#a'!e are ?!o'(or#i'-? or !o'(or# to the !o'tra!t 1he' the$ are i' a!!or&a'!e 1ith the o%li-atio's /'&er the !o'tra!t. (.) ?Ter#i'atio'? o!!/rs 1he' either +art$ +/rs/a't to a +o1er !reate& %$ a-ree#e't or la1 +/ts a' e'& to the !o'tra!t other1ise tha' (or its %rea!h. O' ?ter#i'atio'? all o%li-atio's 1hi!h are still e,e!/tor$ o' %oth si&es are &is!har-e& %/t a'$ ri-ht %ase& o' +rior %rea!h or +er(or#a'!e s/r)i)es. (8) ?Ca'!ellatio'? o!!/rs 1he' either +art$ +/ts a' e'& to the !o'tra!t (or %rea!h %$ the other a'& its e((e!t is the sa#e as that o( ?ter#i'atio'? e,!e+t that the !a'!elli'- +art$ also retai's a'$ re#e&$ (or %rea!h o( the 1hole !o'tra!t or a'$ /'+er(or#e& %ala'!e. *-10;. Goo&s to @e Se)ere& >ro# Realt$0 Re!or&i'-. (1) A !o'tra!t (or the sale o( #i'erals or the li5e (i'!l/&i'- oil a'& -as) or a str/!t/re or its #aterials to %e re#o)e& (ro# realt$ is a !o'tra!t (or the sale o( -oo&s 1ithi' this Arti!le i( the$ are to %e se)ere& %$ the seller %/t /'til se)era'!e a +/r+orte& +rese't sale thereo( 1hi!h is 'ot e((e!ti)e as a tra's(er o( a' i'terest i' la'& is e((e!ti)e o'l$ as a !o'tra!t to sell. (*) A !o'tra!t (or the sale a+art (ro# the la'& o( -ro1i'- !ro+s or other thi'-s atta!he& to realt$ a'& !a+a%le o( se)era'!e 1itho/t #aterial har# thereto %/t 'ot &es!ri%e& i' s/%se!tio' (1) or o( ti#%er to %e !/t is a !o'tra!t (or the sale o( -oo&s 1ithi' this Arti!le

1hether the s/%6e!t #atter is to %e se)ere& %$ the %/$er or %$ the seller e)e' tho/-h it (or#s +art o( the realt$ at the ti#e o( !o'tra!ti'-2 a'& the +arties !a' %$ i&e'ti(i!atio' e((e!t a +rese't sale %e(ore se)era'!e. (.) The +ro)isio's o( this se!tio' are s/%6e!t to a'$ thir& +art$ ri-hts +ro)i&e& %$ the la1 relati'- to realt$ re!or&s2 a'& the !o'tra!t (or sale #a$ %e e,e!/te& a'& re!or&e& as a &o!/#e't tra's(erri'- a' i'terest i' la'& a'& shall the' !o'stit/te 'oti!e to thir& +arties o( the %/$erBs ri-hts /'&er the !o'tra!t (or sale. *-10<. Tra'sa!tio's S/%6e!t to Other La1 (1) A tra'sa!tio' s/%6e!t to this arti!le is also s/%6e!t to a'$ a++li!a%le0 (a) list a'$ !erti(i!ate o( title stat/tes o( this State !o)eri'- a/to#o%iles2 trailers2 #o%ile ho#es2 %oats2 (ar# tra!tors2 or the li5e"2 e,!e+t 1ith res+e!t to the ri-hts o( a %/$er i' or&i'ar$ !o/rse o( %/si'ess /'&er Se!tio' *-80.(*) 1hi!h arise %e(ore a !erti(i!ate o( title !o)eri'- the -oo&s is e((e!ti)e i' the 'a#e o( a'$ other %/$er4 (%) r/le o( la1 that esta%lishes a &i((ere't r/le (or !o's/#ers4 or (!) stat/te o( this state a++li!a%le to the tra'sa!tio'2 s/!h as a stat/te &eali'- 1ith0 (i) the sale or lease o( a-ri!/lt/ral +ro&/!ts4 (ii) the tra's(er o( h/#a' %loo&2 %loo& +ro&/!ts2 tiss/es2 or +arts4 (iii) the !o'si-'#e't or tra's(er %$ artists o( 1or5s o( art or (i'e +ri'ts4 (i)) &istri%/tio' a-ree#e'ts2 (ra'!hises2 a'& other relatio'shi+s thro/-h 1hi!h -oo&s are sol&4 ()) the #is%ra'&i'- or a&/lteratio' o( (oo& +ro&/!ts or &r/-s4 a'& ()i) &ealers i' +arti!/lar +ro&/!ts2 s/!h as a/to#o%iles2 #otori3e& 1heel!hairs2 a-ri!/lt/ral e7/i+#e't2 a'& heari'- ai&s. (*) E,!e+t (or the ri-hts o( a %/$er i' or&i'ar$ !o/rse o( %/si'ess /'&er s/%se!tio' (1) (a)2 i' the e)e't o( a !o'(li!t %et1ee' this arti!le a'& a la1 re(erre& to i' s/%se!tio' (1)2 that la1 -o)er's. (.) >or +/r+oses o( this arti!le2 (ail/re to !o#+l$ 1ith a la1 re(erre& to i' s/%se!tio' (1) has o'l$ the e((e!t s+e!i(ie& i' that la1. (8) This arti!le #o&i(ies2 li#its2 a'& s/+erse&es the (e&eral Ele!tro'i! Si-'at/res i' Glo%al a'& Natio'al Co##er!e A!t2 19 U.S.C. Se!tio' ;001 et se7.2 e,!e+t that 'othi'i' this arti!le #o&i(ies2 li#its2 or s/+erse&es Se!tio' ;001(!) o( that A!t or a/thori3es ele!tro'i! &eli)er$ o( a'$ o( the 'oti!es &es!ri%e& i' Se!tio' ;00.(%) o( that A!t. PART *. >ORE2 >OREATION AN= REA=HUSTEENT O> CONTRACT *-*01. >or#al Re7/ire#e'ts4 Stat/te o( >ra/&s. (1) A !o'tra!t (or the sale o( -oo&s (or the +ri!e o( I92000 or #ore is 'ot e'(or!ea%le %$ 1a$ o( a!tio' or &e(e'se /'less there is so#e re!or& s/((i!ie't to i'&i!ate that a !o'tra!t (or sale has %ee' #a&e %et1ee' the +arties a'& si-'e& %$ the +art$ a-ai'st 1hi!h e'(or!e#e't is so/-ht or %$ the +art$Bs a/thori3e& a-e't or %ro5er. A re!or& is 'ot i's/((i!ie't %e!a/se it o#its or i'!orre!tl$ states a ter# a-ree& /+o' %/t the !o'tra!t is 'ot e'(or!ea%le /'&er this s/%se!tio' %e$o'& the 7/a'tit$ o( -oo&s sho1' i' the re!or&. (*) @et1ee' #er!ha'ts i( 1ithi' a reaso'a%le ti#e a re!or& i' !o'(ir#atio' o( the !o'tra!t a'& s/((i!ie't a-ai'st the se'&er is re!ei)e& a'& the +art$ re!ei)i'- it has reaso' to 5'o1 its !o'te'ts2 it satis(ies the re7/ire#e'ts o( s/%se!tio' (1) a-ai'st the

re!i+ie't /'less 'oti!e o( o%6e!tio' to its !o'te'ts is -i)e' i' a re!or& 1ithi' 10 &a$s a(ter it is re!ei)e&. (.) A !o'tra!t that &oes 'ot satis($ the re7/ire#e'ts o( s/%se!tio' (1) %/t 1hi!h is )ali& i' other res+e!ts is e'(or!ea%le0 (a) i( the -oo&s are to %e s+e!iall$ #a'/(a!t/re& (or the %/$er a'& are 'ot s/ita%le (or sale to others i' the or&i'ar$ !o/rse o( the sellerBs %/si'ess a'& the seller2 %e(ore 'oti!e o( re+/&iatio' is re!ei)e& a'& /'&er !ir!/#sta'!es that reaso'a%l$ i'&i!ate that the -oo&s are (or the %/$er2 has #a&e either a s/%sta'tial %e-i''i'- o( their #a'/(a!t/re or !o##it#e'ts (or their +ro!/re#e't4 (%) i( the +art$ a-ai'st 1hi!h e'(or!e#e't is so/-ht a&#its i' the +art$Bs +lea&i'-2 or i' the +art$Bs testi#o'$ or other1ise /'&er oath that a !o'tra!t (or sale 1as #a&e2 %/t the !o'tra!t is 'ot e'(or!ea%le /'&er this +ara-ra+h %e$o'& the 7/a'tit$ o( -oo&s a&#itte&4 or (!) 1ith res+e!t to -oo&s (or 1hi!h +a$#e't has %ee' #a&e a'& a!!e+te& or 1hi!h ha)e %ee' re!ei)e& a'& a!!e+te& (Se!. *-:0:). (8) A !o'tra!t that is e'(or!ea%le /'&er this se!tio' is 'ot /'e'(or!ea%le #erel$ %e!a/se it is 'ot !a+a%le o( %ei'- +er(or#e& 1ithi' o'e $ear or a'$ other +erio& a(ter its #a5i'-. *-*0*. >i'al E,+ressio' i' a Re!or&0 Parol or E,tri'si! E)i&e'!e. (1) Ter#s 1ith res+e!t to 1hi!h the !o'(ir#ator$ re!or&s o( the +arties a-ree or 1hi!h are other1ise set (orth i' a re!or& i'te'&e& %$ the +arties as a (i'al e,+ressio' o( their a-ree#e't 1ith res+e!t to s/!h ter#s as are i'!l/&e& therei' #a$ 'ot %e !o'tra&i!te& %$ e)i&e'!e o( a'$ +rior a-ree#e't or o( a !o'te#+ora'eo/s oral a-ree#e't %/t #a$ %e s/++le#e'te& %$ e)i&e'!e o(0 (a) !o/rse o( +er(or#a'!e2 !o/rse o( &eali'-2 or /sa-e o( tra&e (Se!tio' 1-.0.)4 a'& (%) !o'siste't a&&itio'al ter#s /'less the !o/rt (i'&s the re!or& to ha)e %ee' i'te'&e& also as a !o#+lete a'& e,!l/si)e state#e't o( the ter#s o( the a-ree#e't . (*) Ter#s i' a re!or& #a$ %e e,+lai'e& %$ e)i&e'!e o( !o/rse o( +er(or#a'!e2 !o/rse o( &eali'-2 or /sa-e o( tra&e 1itho/t a +reli#i'ar$ &eter#i'atio' %$ the !o/rt that the la'-/a-e /se& is a#%i-/o/s. *-*0.. Seals I'o+erati)e. The a((i,i'- o( a seal to a re!or& e)i&e'!i'- a !o'tra!t (or sale or a' o((er to %/$ or sell -oo&s &oes 'ot !o'stit/te the re!or& a seale& i'str/#e't. The la1 1ith res+e!t to seale& i'str/#e'ts &oes 'ot a++l$ to s/!h a !o'tra!t or o((er. *-*08. >or#atio' i' Ge'eral. (1) A !o'tra!t (or sale o( -oo&s #a$ %e #a&e i' a'$ #a''er s/((i!ie't to sho1 a-ree#e't2 i'!l/&i'- o((er a'& a!!e+ta'!e2 !o'&/!t %$ %oth +arties 1hi!h re!o-'i3es the e,iste'!e o( a !o'tra!t2 the i'tera!tio' o( ele!tro'i! a-e'ts2 a'& the i'tera!tio' o( a' ele!tro'i! a-e't a'& a' i'&i)i&/al. (*) A' a-ree#e't s/((i!ie't to !o'stit/te a !o'tra!t (or sale #a$ %e (o/'& e)e' i( the #o#e't o( its #a5i'- is /'&eter#i'e&. (.) E)e' i( o'e or #ore ter#s are le(t o+e'2 a !o'tra!t (or sale &oes 'ot (ail (or i'&e(i'ite'ess i( the +arties ha)e i'te'&e& to #a5e a !o'tra!t a'& there is a reaso'a%l$ !ertai' %asis (or -i)i'- a' a++ro+riate re#e&$.

(8) E,!e+t as other1ise +ro)i&e& i' Se!tio's *-*11 thro/-h *-*1.2 the (ollo1i'- r/les a++l$0 (a) A !o'tra!t #a$ %e (or#e& %$ the i'tera!tio' o( ele!tro'i! a-e'ts o( the +arties2 e)e' i( 'o i'&i)i&/al 1as a1are o( or re)ie1e& the ele!tro'i! a-e'tsB a!tio's or the res/lti'ter#s a'& a-ree#e'ts. (%) A !o'tra!t #a$ %e (or#e& %$ the i'tera!tio' o( a' ele!tro'i! a-e't a'& a' i'&i)i&/al a!ti'- o' the i'&i)i&/alBs o1' %ehal( or (or a'other +erso'. A !o'tra!t is (or#e& i( the i'&i)i&/al ta5es a!tio's that the i'&i)i&/al is (ree to re(/se to ta5e or #a5es a state#e't2 a'& the i'&i)i&/al has reaso' to 5'o1 that the a!tio's or state#e't 1ill0 (i) !a/se the ele!tro'i! a-e't to !o#+lete the tra'sa!tio' or +er(or#a'!e4 or (ii) i'&i!ate a!!e+ta'!e o( a' o((er2 re-ar&less o( other e,+ressio's or a!tio's %$ the i'&i)i&/al to 1hi!h the ele!tro'i! a-e't !a''ot rea!t. *-*09. >ir# O((ers. A' o((er %$ a #er!ha't to %/$ or sell -oo&s i' a si-'e& re!or& that %$ its ter#s -i)es ass/ra'!e that it 1ill %e hel& o+e' is 'ot re)o!a%le2 (or la!5 o( !o'si&eratio'2 &/ri'- the ti#e state& or i( 'o ti#e is state& (or a reaso'a%le ti#e2 %/t i' 'o e)e't #a$ s/!h +erio& o( irre)o!a%ilit$ e,!ee& three #o'ths4 %/t i' 'o e)e't #a$ the +erio& o( irre)o!a%ilit$ e,!ee& three #o'ths. A'$ s/!h ter# o( ass/ra'!e i' a (or# s/++lie& %$ the o((eree #/st %e se+aratel$ si-'e& %$ the o((eror. *-*0:. O((er a'& A!!e+ta'!e i' >or#atio' o( Co'tra!t. (1) U'less other1ise /'a#%i-/o/sl$ i'&i!ate& %$ the la'-/a-e or !ir!/#sta'!es (a) a' o((er to #a5e a !o'tra!t shall %e !o'str/e& as i')iti'- a!!e+ta'!e i' a'$ #a''er a'& %$ a'$ #e&i/# reaso'a%le i' the !ir!/#sta'!es0 (%) a' or&er or other o((er to %/$ -oo&s (or +ro#+t or !/rre't shi+#e't shall %e !o'str/e& as i')iti'- a!!e+ta'!e either %$ a +ro#+t +ro#ise to shi+ or %$ the +ro#+t or !/rre't shi+#e't o( !o'(or#i'- or 'o'!o'(or#i'- -oo&s2 %/t the shi+#e't o( 'o'!o'(or#i'- -oo&s is 'ot a' a!!e+ta'!e i( the seller seaso'a%l$ 'oti(ies the %/$er that the shi+#e't is o((ere& o'l$ as a' a!!o##o&atio' to the %/$er. (*) I( the %e-i''i'- o( a re7/este& +er(or#a'!e is a reaso'a%le #o&e o( a!!e+ta'!e2 a' o((eror that is 'ot 'oti(ie& o( a!!e+ta'!e 1ithi' a reaso'a%le ti#e #a$ treat the o((er as ha)i'- la+se& %e(ore a!!e+ta'!e. (.) A &e(i'ite a'& seaso'a%le e,+ressio' o( a!!e+ta'!e i' a re!or& o+erates as a' a!!e+ta'!e e)e' i( it !o'tai's ter#s a&&itio'al to or &i((ere't (ro# the o((er. *-*0;. Ter#s o( Co'tra!t4 E((e!t o( Co'(ir#atio'. S/%6e!t to Se!tio' *-*0*2 i( (i) !o'&/!t %$ %oth +arties re!o-'i3es the e,iste'!e o( a !o'tra!t altho/-h their re!or&s &o 'ot other1ise esta%lish a !o'tra!t2 (ii) a !o'tra!t is (or#e& %$ a' o((er a'& a!!e+ta'!e2 or (iii) a !o'tra!t (or#e& i' a'$ #a''er is !o'(ir#e& %$ a re!or& that !o'tai's ter#s a&&itio'al to or &i((ere't (ro# those i' the !o'tra!t %ei'- !o'(ir#e&2 the ter#s o( the !o'tra!t are0 (a) ter#s that a++ear i' the re!or&s o( %oth +arties4 (%) ter#s2 1hether i' a re!or& or 'ot2 to 1hi!h %oth +arties a-ree4 a'& (!) ter#s s/++lie& or i'!or+orate& /'&er a'$ +ro)isio' o( this A!t. *-*0<. Reser)e&" *-*0A. Eo&i(i!atio'2 Res!issio' a'& Cai)er.

(1) A' a-ree#e't #o&i($i'- a !o'tra!t 1ithi' this Arti!le 'ee&s 'o !o'si&eratio' to %e %i'&i'-. (*) A' a-ree#e't i' a si-'e& re!or& 1hi!h e,!l/&es #o&i(i!atio' or res!issio' e,!e+t %$ a si-'e& re!or& #a$ 'ot %e other1ise #o&i(ie& or res!i'&e&2 %/t e,!e+t as %et1ee' #er!ha'ts s/!h a re7/ire#e't i' a (or# s/++lie& %$ the #er!ha't #/st %e se+aratel$ si-'e& %$ the other +art$. (.) The re7/ire#e'ts o( Se!tio' *-*01 #/st %e satis(ie& i( the !o'tra!t as #o&i(ie& is 1ithi' its +ro)isio's. (8) Altho/-h a' atte#+t at #o&i(i!atio' or res!issio' &oes 'ot satis($ the re7/ire#e'ts o( s/%se!tio' (*) or (.)2 it #a$ o+erate as a 1ai)er. (9) A +art$ that has #a&e a 1ai)er a((e!ti'- a' e,e!/tor$ +ortio' o( a !o'tra!t #a$ retra!t the 1ai)er %$ reaso'a%le 'oti(i!atio' re!ei)e& %$ the other +art$ that stri!t +er(or#a'!e 1ill %e re7/ire& o( a'$ ter# 1ai)e&2 /'less the retra!tio' 1o/l& %e /'6/st i' )ie1 o( a #aterial !ha'-e o( +ositio' i' relia'!e o' the 1ai)er. *-*10. =ele-atio' o( Per(or#a'!e4 Assi-'#e't o( Ri-hts. (1) I( the seller or %/$er assi-'s ri-hts /'&er a !o'tra!t2 the (ollo1i'- r/les a++l$0 (a) S/%6e!t to +ara-ra+h (%) a'& e,!e+t as other1ise +ro)i&e& i' Se!tio' A-80: or as other1ise a-ree&2 all ri-hts o( the seller or the %/$er #a$ %e assi-'e& /'less the assi-'#e't 1o/l& #ateriall$ !ha'-e the &/t$ o( the other +art$2 i'!rease #ateriall$ the %/r&e' or ris5 i#+ose& o' that +art$ %$ the !o'tra!t2 or i#+air #ateriall$ that +art$Bs !ha'!e o( o%tai'i'- ret/r' +er(or#a'!e. A ri-ht to &a#a-es (or %rea!h o( the 1hole !o'tra!t or a ri-ht arisi'- o/t o( the assi-'orBs &/e +er(or#a'!e o( its e'tire o%li-atio' #a$ %e assi-'e& &es+ite a' a-ree#e't other1ise. (%) The !reatio'2 atta!h#e't2 +er(e!tio'2 or e'(or!e#e't o( a se!/rit$ i'terest i' the sellerBs i'terest /'&er a !o'tra!t is 'ot a' assi-'#e't that #ateriall$ !ha'-es the &/t$ o( or #ateriall$ i'!reases the %/r&e' or ris5 i#+ose& o' the %/$er or #ateriall$ i#+airs the %/$erBs !ha'!e o( o%tai'i'- ret/r' +er(or#a'!e /'&er +ara-ra+h (a) /'less2 a'& o'l$ to the e,te't that2 e'(or!e#e't o( the se!/rit$ i'terest res/lts i' a &ele-atio' o( a #aterial +er(or#a'!e o( the seller. E)e' i' that e)e't2 the !reatio'2 atta!h#e't2 +er(e!tio'2 a'& e'(or!e#e't o( the se!/rit$ i'terest re#ai' e((e!ti)e. Do1e)er2 the seller is lia%le to the %/$er (or &a#a-es !a/se& %$ the &ele-atio' to the e,te't that the &a#a-es !o/l& 'ot reaso'a%l$ %e +re)e'te& %$ the %/$er2 a'& a !o/rt #a$ -ra't other a++ro+riate relie(2 i'!l/&i'- !a'!ellatio' o( the !o'tra!t or a' i'6/'!tio' a-ai'st e'(or!e#e't o( the se!/rit$ i'terest or !o's/##atio' o( the e'(or!e#e't. (*) I( the seller or %/$er &ele-ates +er(or#a'!e o( its &/ties /'&er a !o'tra!t2 the (ollo1i'- r/les a++l$0 (a) A +art$ #a$ +er(or# its &/ties thro/-h a &ele-ate /'less other1ise a-ree& or /'less the other +art$ has a s/%sta'tial i'terest i' ha)i'- the ori-i'al +ro#isor +er(or# or !o'trol the a!ts re7/ire& %$ the !o'tra!t. =ele-atio' o( +er(or#a'!e &oes 'ot relie)e the &ele-ati'- +art$ o( a'$ &/t$ to +er(or# or lia%ilit$ (or %rea!h. (%) A!!e+ta'!e o( a &ele-atio' o( &/ties %$ the assi-'ee !o'stit/tes a +ro#ise to +er(or# those &/ties. The +ro#ise is e'(or!ea%le %$ either the assi-'or or the other +art$ to the ori-i'al !o'tra!t.

(!) The other +art$ #a$ treat a'$ &ele-atio' o( &/ties as !reati'- reaso'a%le -ro/'&s (or i'se!/rit$ a'& #a$ 1itho/t +re6/&i!e to its ri-hts a-ai'st the assi-'or &e#a'& ass/ra'!es (ro# the assi-'ee /'&er Se!tio' *--:0A. (&) A !o'tra!t/al ter# +rohi%iti'- the &ele-atio' o( &/ties other1ise &ele-a%le /'&er +ara-ra+h (a) is e'(or!ea%le2 a'& a' atte#+te& &ele-atio' is 'ot e((e!ti)e. (.) A' assi-'#e't o( ?the !o'tra!t? or o( ?all #$ ri-hts /'&er the !o'tra!t? or a' assi-'#e't i' si#ilar -e'eral ter#s is a' assi-'#e't o( ri-hts a'& /'less the la'-/a-e or the !ir!/#sta'!es2 as i' a' assi-'#e't (or se!/rit$2 i'&i!ate the !o'trar$2 it is also a &ele-atio' o( +er(or#a'!e o( the &/ties o( the assi-'or. (8) U'less the !ir!/#sta'!es i'&i!ate the !o'trar$2 a +rohi%itio' o( assi-'#e't o( ?the !o'tra!t? is to %e !o'str/e& as %arri'- o'l$ the &ele-atio' to the assi-'ee o( the assi-'orBs +er(or#a'!e. *-*11. Le-al Re!o-'itio' o( Ele!tro'i! Co'tra!ts2 Re!or&s2 a'& Si-'at/res (1) A re!or& or si-'at/re #a$ 'ot %e &e'ie& le-al e((e!t or e'(or!ea%ilit$ solel$ %e!a/se it is i' ele!tro'i! (or#. (*) A !o'tra!t #a$ 'ot %e &e'ie& le-al e((e!t or e'(or!ea%ilit$ solel$ %e!a/se a' ele!tro'i! re!or& 1as /se& i' its (or#atio'. (.) This arti!le &oes 'ot re7/ire a re!or& or si-'at/re to %e !reate&2 -e'erate&2 se't2 !o##/'i!ate&2 re!ei)e&2 store&2 or other1ise +ro!esse& %$ ele!tro'i! #ea's or i' ele!tro'i! (or#. (8) A !o'tra!t (or#e& %$ the i'tera!tio' o( a' i'&i)i&/al a'& a' ele!tro'i! a-e't /'&er Se!tio' *-*08(8)(%) &oes 'ot i'!l/&e ter#s +ro)i&e& %$ the i'&i)i&/al i( the i'&i)i&/al ha& reaso' to 5'o1 that the a-e't !o/l& 'ot rea!t to the ter#s as +ro)i&e&. *-*1*. ATTRI@UTION A' ele!tro'i! re!or& or ele!tro'i! si-'at/re is attri%/ta%le to a +erso' i( it 1as the a!t o( the +erso' or the +erso'Bs ele!tro'i! a-e't or the +erso' is other1ise le-all$ %o/'& %$ the a!t. *-*1.. ELECTRONIC COEEUNICATION (1) I( the re!ei+t o( a' ele!tro'i! !o##/'i!atio' has a le-al e((e!t2 it has that e((e!t e)e' i( 'o i'&i)i&/al is a1are o( its re!ei+t. (*) Re!ei+t o( a' ele!tro'i! a!5'o1le&-#e't o( a' ele!tro'i! !o##/'i!atio' esta%lishes that the !o##/'i!atio' 1as re!ei)e& %/t2 i' itsel(2 &oes 'ot esta%lish that the !o'te't se't !orres+o'&s to the !o'te't re!ei)e&. PART .. GENERAL O@LIGATION AN= CONSTRUCTION O> CONTRACT *-.01. Ge'eral O%li-atio's o( Parties. The o%li-atio' o( the seller is to tra's(er a'& &eli)er a'& that o( the %/$er is to a!!e+t a'& +a$ i' a!!or&a'!e 1ith the !o'tra!t. *-.0*. U'!o's!io'a%le !o'tra!t or Ter#. (1) I( the !o/rt as a #atter o( la1 (i'&s the !o'tra!t or a'$ ter# o( the !o'tra!t to ha)e %ee' /'!o's!io'a%le at the ti#e it 1as #a&e the !o/rt #a$ re(/se to e'(or!e the !o'tra!t2 or it #a$ e'(or!e the re#ai'&er o( the !o'tra!t 1itho/t the /'!o's!io'a%le ter#2 or it #a$ so li#it the a++li!atio' o( a'$ /'!o's!io'a%le ter# as to a)oi& a'$ /'!o's!io'a%le res/lt.

(*) I( it is !lai#e& or a++ears to the !o/rt that the !o'tra!t or a'$ ter# thereo( #a$ %e /'!o's!io'a%le the +arties shall %e a((or&e& a reaso'a%le o++ort/'it$ to +rese't e)i&e'!e as to its !o##er!ial setti'-2 +/r+ose2 a'& e((e!t to ai& the !o/rt i' #a5i'- the &eter#i'atio'. *-.0.. Allo!atio' or =i)isio' o( Ris5s. Chere this Arti!le allo!ates a ris5 or a %/r&e' as %et1ee' the +arties ?/'less other1ise a-ree&?2 the a-ree#e't #a$ 'ot o'l$ shi(t the allo!atio' %/t #a$ also &i)i&e the ris5 or %/r&e'. *-.08. Pri!e Pa$a%le i' Eo'e$2 Goo&s2 Realt$2 or Other1ise. (1) The +ri!e #a$ %e #a&e +a$a%le i' #o'e$ or other1ise. I( it is +a$a%le i' 1hole or i' +art i' -oo&s ea!h +art$ is a seller o( the -oo&s that the +art$ is to tra's(er. (*) E)e' i( all or +art o( the +ri!e is +a$a%le i' a' i'terest i' real +ro+ert$ the tra's(er o( the -oo&s a'& the sellerBs o%li-atio's 1ith re(ere'!e to the# are s/%6e!t to this Arti!le2 %/t 'ot the tra's(er o( the i'terest i' real +ro+ert$ or the tra's(erorBs o%li-atio's i' !o''e!tio' there1ith. *-.09. O+e' Pri!e Ter#. (1) The +arties i( the$ so i'te'& #a$ !o'!l/&e a !o'tra!t (or sale e)e' i( the +ri!e is 'ot settle&. I' s/!h a !ase the +ri!e is a reaso'a%le +ri!e at the ti#e (or &eli)er$ i(0 (a) 'othi'- is sai& as to +ri!e4 (%) the +ri!e is le(t to %e a-ree& %$ the +arties a'& the$ (ail to a-ree4 or (!) the +ri!e is to %e (i,e& i' ter#s o( so#e a-ree& #ar5et or other sta'&ar& as set or re!or&e& %$ a thir& +erso' or a-e'!$ a'& it is 'ot so set or re!or&e&. (*) A +ri!e to %e (i,e& %$ the seller or %$ the %/$er #ea's a +ri!e to %e (i,e& i' -oo& (aith. (.) I( a +ri!e le(t to %e (i,e& other1ise tha' %$ a-ree#e't o( the +arties (ails to %e (i,e& thro/-h (a/lt o( o'e +art$ the other #a$ at the +art$Bs o+tio' treat the !o'tra!t as !a'!elle& or the +art$ #a$ (i, a reaso'a%le +ri!e. (8) I(2 ho1e)er2 the +arties i'te'& 'ot to %e %o/'& /'less the +ri!e is (i,e& or a-ree& a'& it is 'ot (i,e& or a-ree& there is 'o !o'tra!t. I' s/!h a !ase the %/$er #/st ret/r' a'$ -oo&s alrea&$ re!ei)e& or i( /'a%le to &o so #/st +a$ their reaso'a%le )al/e at the ti#e o( &eli)er$ a'& the seller #/st ret/r' a'$ +ortio' o( the +ri!e +ai& o' a!!o/'t. *-.0:. O/t+/t2 Re7/ire#e'ts a'& E,!l/si)e =eali'-s. (1) A ter# 1hi!h #eas/res the 7/a'tit$ %$ the o/t+/t o( the seller or the re7/ire#e'ts o( the %/$er #ea's s/!h a!t/al o/t+/t or re7/ire#e'ts as #a$ o!!/r i' -oo& (aith2 e,!e+t that 'o 7/a'tit$ /'reaso'a%l$ &is+ro+ortio'ate to a'$ state& esti#ate or i' the a%se'!e o( a state& esti#ate to a'$ 'or#al or other1ise !o#+ara%le +rior o/t+/t or re7/ire#e'ts #a$ %e te'&ere& or &e#a'&e&. (*) A la1(/l a-ree#e't %$ either the seller or the %/$er (or e,!l/si)e &eali'- i' the 5i'& o( -oo&s !o'!er'e& i#+oses /'less other1ise a-ree& a' o%li-atio' %$ the seller to /se %est e((orts to s/++l$ the -oo&s a'& %$ the %/$er to /se %est e((orts to +ro#ote their sale. *-.0;. =eli)er$ i' Si'-le Lot or Se)eral Lots. U'less other1ise a-ree& all -oo&s !alle& (or %$ a !o'tra!t (or sale #/st %e te'&ere& i' a si'-le &eli)er$ a'& +a$#e't is &/e o'l$ o' s/!h te'&er %/t 1here the !ir!/#sta'!es

-i)e either +art$ the ri-ht to #a5e or &e#a'& &eli)er$ i' lots the +ri!e i( it !a' %e a++ortio'e& #a$ %e &e#a'&e& (or ea!h lot. *-.0<. A%se'!e o( S+e!i(ie& Pla!e (or =eli)er$. U'less other1ise a-ree& (a) the +la!e (or &eli)er$ o( -oo&s is the sellerBs +la!e o( %/si'ess or i( 'o'e2 the sellerBs resi&e'!e4 %/t (%) i' a !o'tra!t (or sale o( i&e'ti(ie& -oo&s 1hi!h to the 5'o1le&-e o( the +arties at the ti#e o( !o'tra!ti'- are i' so#e other +la!e2 that +la!e is the +la!e (or their &eli)er$4 a'& (!) &o!/#e'ts o( title #a$ %e &eli)ere& thro/-h !/sto#ar$ %a'5i'- !ha''els. *-.0A. A%se'!e o( S+e!i(i! Ti#e Pro)isio's4 Noti!e o( Ter#i'atio'. (1) The ti#e (or shi+#e't or &eli)er$ or a'$ other a!tio' /'&er a !o'tra!t i( 'ot +ro)i&e& i' this Arti!le or a-ree& /+o' shall %e a reaso'a%le ti#e. (*) I( the !o'tra!t +ro)i&es (or s/!!essi)e +er(or#a'!es %/t is i'&e(i'ite i' &/ratio'2 it is )ali& (or a reaso'a%le ti#e %/t /'less other1ise a-ree& #a$ %e ter#i'ate& at a'$ ti#e %$ either +art$. (.) Ter#i'atio' o( a !o'tra!t %$ o'e +art$ e,!e+t o' the ha++e'i'- o( a' a-ree& e)e't re7/ires that reaso'a%le 'oti(i!atio' %e re!ei)e& %$ the other +art$ a'& a' a-ree#e't &is+e'si'- 1ith 'oti(i!atio' is i')ali& i( its o+eratio' 1o/l& %e /'!o's!io'a%le. A ter# s+e!i($i'- sta'&ar&s (or the 'at/re a'& ti#i'- o( 'oti!e is e'(or!ea%le i( the sta'&ar&s are 'ot #a'i(estl$ /'reaso'a%le. *-.10. O+e' Ti#e (or Pa$#e't or R/''i'- o( Cre&it4 A/thorit$ to Shi+ U'&er Reser)atio'. U'less other1ise a-ree& (a) +a$#e't is &/e at the ti#e a'& +la!e at 1hi!h the %/$er is to re!ei)e the -oo&s e)e' tho/-h the +la!e o( shi+#e't is the +la!e o( &eli)er$4 (%) i( the seller is re7/ire& or a/thori3e& to se'& the -oo&s2 the seller #a$ shi+ the# /'&er reser)atio'2 a'& #a$ te'&er the &o!/#e'ts o( title2 %/t the %/$er #a$ i's+e!t the -oo&s a(ter their arri)al %e(ore +a$#e't is &/e /'less the i's+e!tio' is i'!o'siste't 1ith the ter#s o( the !o'tra!t (Se!tio' *-91.)4 (!) i( te'&er o( &eli)er$ is a-ree& to %e #a&e %$ 1a$ o( &o!/#e'ts o( title other1ise tha' %$ +ara-ra+h (%)2 the' +a$#e't is &/e re-ar&less o( 1here the -oo&s are to %e re!ei)e& (i) at the ti#e a'& +la!e at 1hi!h the %/$er is to re!ei)e &eli)er$ o( the ta'-i%le &o!/#e'ts2 or (ii) at the ti#e the %/$er is to re!ei)e &eli)er$ o( the ele!tro'i! &o!/#e'ts a'& at the sellerBs +la!e o( %/si'ess or i( 'o'e2 the sellerBs resi&e'!e4 a'& (&) i( the seller is re7/ire& or a/thori3e& to shi+ the -oo&s o' !re&it the !re&it +erio& r/'s (ro# the ti#e o( shi+#e't %/t +ost&ati'- the i')oi!e or &ela$i'- its &is+at!h 1ill !orres+o'&i'-l$ &ela$ the starti'- o( the !re&it +erio&. *-.11. O+tio's a'& Coo+eratio' Res+e!ti'- Per(or#a'!e. (1) A' a-ree#e't (or sale 1hi!h is other1ise s/((i!ie'tl$ &e(i'ite (Se!tio' *-*08(.)) to %e a !o'tra!t is 'ot #a&e i')ali& %$ the (a!t that it lea)es +arti!/lars o( +er(or#a'!e to %e s+e!i(ie& %$ o'e o( the +arties. A'$ s/!h s+e!i(i!atio' #/st %e #a&e i' -oo& (aith a'& 1ithi' li#its set %$ !o##er!ial reaso'a%le'ess.

(*) U'less other1ise a-ree&2 s+e!i(i!atio's relati'- to assort#e't o( the -oo&s are at the %/$erBs o+tio' a'& s+e!i(i!atio's or arra'-e#e'ts relati'- to shi+#e't are at the sellerBs o+tio'. (.) I( the s+e!i(i!atio' 1o/l& #ateriall$ a((e!t the other +art$Bs +er(or#a'!e %/t is 'ot seaso'a%l$ #a&e or i( o'e +art$Bs !oo+eratio' is 'e!essar$ to the a-ree& +er(or#a'!e o( the other %/t is 'ot seaso'a%l$ (orth!o#i'-2 the other +art$ i' a&&itio' to all other re#e&ies0 (a) is e,!/se& (or a'$ res/lti'- &ela$ i' that +art$Bs +er(or#a'!e4 a'& (%) #a$ also either +ro!ee& to +er(or# i' a'$ reaso'a%le #a''er or a(ter the ti#e (or a #aterial +art o( that +art$Bs +er(or#a'!e treat the (ail/re to s+e!i($ or to !oo+erate as a %rea!h %$ (ail/re to &eli)er or a!!e+t the -oo&s. *-.1*. Carra't$ o( Title a'& A-ai'st I'(ri'-e#e't4 @/$erBs O%li-atio' A-ai'st I'(ri'-e#e't. (1) S/%6e!t to s/%se!tio' (.)2 there is i' a !o'tra!t (or sale a 1arra't$ %$ the seller that0 (a) the title !o')e$e& shall %e -oo& a'& its tra's(er ri-ht(/l a'& shall 'ot /'reaso'a%l$ e,+ose the %/$er to liti-atio' %e!a/se o( a'$ !olora%le !lai# to or i'terest i' the -oo&s4 a'& (%) the -oo&s shall %e &eli)ere& (ree (ro# a'$ se!/rit$ i'terest or other lie' or e'!/#%ra'!e o( 1hi!h the %/$er at the ti#e o( !o'tra!ti'- has 'o 5'o1le&-e. (*) U'less other1ise a-ree&2 a seller that is a #er!ha't re-/larl$ &eali'- i' -oo&s o( the 5i'& 1arra'ts that the -oo&s shall %e &eli)ere& (ree o( the ri-ht(/l !lai# o( a'$ thir& +erso' %$ 1a$ o( i'(ri'-e#e't or the li5e %/t a %/$er that (/r'ishes s+e!i(i!atio's to the seller #/st hol& the seller har#less a-ai'st a'$ s/!h !lai# that arises o/t o( !o#+lia'!e 1ith the s+e!i(i!atio's. (.) A 1arra't$ /'&er this se!tio' #a$ %e &is!lai#e& or #o&i(ie& o'l$ %$ s+e!i(i! la'-/a-e or %$ !ir!/#sta'!es that -i)e the %/$er reaso' to 5'o1 that the seller &oes 'ot !lai# title2 that the seller is +/r+orti'- to sell o'l$ the ri-ht or title as the seller or a thir& +erso' #a$ ha)e2 or that the seller is selli'- s/%6e!t to a'$ !lai#s o( i'(ri'-e#e't or the li5e. *-.1.. E,+ress Carra'ties %$ A((ir#atio'2 Pro#ise2 =es!ri+tio'2 Sa#+le. (1) I' this se!tio'2 ?i##e&iate %/$er? #ea's a %/$er that e'ters i'to a !o'tra!t 1ith the seller. (*) E,+ress 1arra'ties %$ the seller to the i##e&iate %/$er are !reate& as (ollo1s0 (a) A'$ a((ir#atio' o( (a!t or +ro#ise #a&e %$ the seller 1hi!h relates to the -oo&s a'& %e!o#es +art o( the %asis o( the %ar-ai' !reates a' e,+ress 1arra't$ that the -oo&s shall !o'(or# to the a((ir#atio' or +ro#ise. (%) A'$ &es!ri+tio' o( the -oo&s 1hi!h is #a&e +art o( the %asis o( the %ar-ai' !reates a' e,+ress 1arra't$ that the -oo&s shall !o'(or# to the &es!ri+tio'. (!) A'$ sa#+le or #o&el that is #a&e +art o( the %asis o( the %ar-ai' !reates a' e,+ress 1arra't$ that the 1hole o( the -oo&s shall !o'(or# to the sa#+le or #o&el. (.) It is 'ot 'e!essar$ to the !reatio' o( a' e,+ress 1arra't$ that the seller /se (or#al 1or&s s/!h as ?1arra't? or ?-/ara'tee? or that the seller ha)e a s+e!i(i! i'te'tio' to #a5e a 1arra't$2 %/t a' a((ir#atio' #erel$ o( the )al/e o( the -oo&s or a state#e't

+/r+orti'- to %e #erel$ the sellerBs o+i'io' or !o##e'&atio' o( the -oo&s &oes 'ot !reate a 1arra't$. (8) A'$ re#e&ial +ro#ise #a&e %$ the seller to the i##e&iate %/$er !reates a' o%li-atio' that the +ro#ise 1ill %e +er(or#e& /+o' the ha++e'i'- o( the s+e!i(ie& e)e't. *-.1.A O%li-atio' to Re#ote P/r!haser Create& %$ Re!or& Pa!5a-e& Cith or A!!o#+a'$i'- Goo&s (1) I' this se!tio'0 (a) ?I##e&iate %/$er? #ea's a %/$er that e'ters i'to a !o'tra!t 1ith the seller. (%) ?Re#ote +/r!haser? #ea's a +erso' that %/$s or leases -oo&s (ro# a' i##e&iate %/$er or other +erso' i' the 'or#al !hai' o( &istri%/tio'. (*) This se!tio' a++lies o'l$ to 'e1 -oo&s a'& -oo&s sol& or lease& as 'e1 -oo&s i' a tra'sa!tio' o( +/r!hase i' the 'or#al !hai' o( &istri%/tio'. (.) I( i' a re!or& +a!5a-e& 1ith or a!!o#+a'$i'- the -oo&s the seller #a5es a' a((ir#atio' o( (a!t or +ro#ise that relates to the -oo&s2 +ro)i&es a &es!ri+tio' that relates to the -oo&s2 or #a5es a re#e&ial +ro#ise2 a'& the seller reaso'a%l$ e,+e!ts the re!or& to %e2 a'& the re!or& is2 (/r'ishe& to the re#ote +/r!haser2 the seller has a' o%li-atio' to the re#ote +/r!haser that0 (a) the -oo&s 1ill !o'(or# to the a((ir#atio' o( (a!t2 +ro#ise2 or &es!ri+tio' /'less a reaso'a%le +erso' i' the +ositio' o( the re#ote +/r!haser 1o/l& 'ot %elie)e that the a((ir#atio' o( (a!t2 +ro#ise2 or &es!ri+tio' !reate& a' o%li-atio'4 a'& (%) the seller 1ill +er(or# the re#e&ial +ro#ise. (8) It is 'ot 'e!essar$ to the !reatio' o( a' o%li-atio' /'&er this se!tio' that the seller /se (or#al 1or&s s/!h as ?1arra't? or ?-/ara'tee? or that the seller ha)e a s+e!i(i! i'te'tio' to /'&erta5e a' o%li-atio'2 %/t a' a((ir#atio' #erel$ o( the )al/e o( the -oo&s or a state#e't +/r+orti'- to %e #erel$ the sellerBs o+i'io' or !o##e'&atio' o( the -oo&s &oes 'ot !reate a' o%li-atio'. (9) The (ollo1i'- r/les a++l$ to the re#e&ies (or %rea!h o( a' o%li-atio' !reate& /'&er this se!tio'0 (a) The seller #a$ #o&i($ or li#it the re#e&ies a)aila%le to the re#ote +/r!haser i( the #o&i(i!atio' or li#itatio' is (/r'ishe& to the re#ote +/r!haser 'o later tha' the ti#e o( +/r!hase or i( the #o&i(i!atio' or li#itatio' is !o'tai'e& i' the re!or& that !o'tai's the a((ir#atio' o( (a!t2 +ro#ise2 or &es!ri+tio'. (%) S/%6e!t to a #o&i(i!atio' or li#itatio' o( re#e&$2 a seller i' %rea!h is lia%le (or i'!i&e'tal or !o'se7/e'tial &a#a-es /'&er Se!tio' *-;192 %/t 'ot (or lost +ro(its. (!) The re#ote +/r!haser #a$ re!o)er as &a#a-es (or %rea!h o( a sellerBs o%li-atio' arisi'- /'&er s/%se!tio' (.) the loss res/lti'- i' the or&i'ar$ !o/rse o( e)e'ts as &eter#i'e& i' a'$ reaso'a%le #a''er. (:) A' o%li-atio' that is 'ot a re#e&ial +ro#ise is %rea!he& i( the -oo&s &i& 'ot !o'(or# to the a((ir#atio' o( (a!t2 +ro#ise2 or &es!ri+tio' !reati'- the o%li-atio' 1he' the -oo&s le(t the sellerBs !o'trol. *-.1.@ O%li-atio' to Re#ote P/r!haser Create& %$ Co##/'i!atio' to the P/%li! (1) I' this se!tio'0 (a) ?I##e&iate %/$er? #ea's a %/$er that e'ters i'to a !o'tra!t 1ith the seller.

(%) ?Re#ote +/r!haser? #ea's a +erso' that %/$s or leases -oo&s (ro# a' i##e&iate %/$er or other +erso' i' the 'or#al !hai' o( &istri%/tio'. (*) This se!tio' a++lies o'l$ to 'e1 -oo&s a'& -oo&s sol& or lease& as 'e1 -oo&s i' a tra'sa!tio' o( +/r!hase i' the 'or#al !hai' o( &istri%/tio'. (.) I( i' a' a&)ertise#e't or a si#ilar !o##/'i!atio' to the +/%li! a seller #a5es a' a((ir#atio' o( (a!t or +ro#ise that relates to the -oo&s2 +ro)i&es a &es!ri+tio' that relates to the -oo&s2 or #a5es a re#e&ial +ro#ise2 a'& the re#ote +/r!haser e'ters i'to a tra'sa!tio' o( +/r!hase 1ith 5'o1le&-e o( a'& 1ith the e,+e!tatio' that the -oo&s 1ill !o'(or# to the a((ir#atio' o( (a!t2 +ro#ise2 or &es!ri+tio'2 or that the seller 1ill +er(or# the re#e&ial +ro#ise2 the seller has a' o%li-atio' to the re#ote +/r!haser that0 (a) the -oo&s 1ill !o'(or# to the a((ir#atio' o( (a!t2 +ro#ise2 or &es!ri+tio' /'less a reaso'a%le +erso' i' the +ositio' o( the re#ote +/r!haser 1o/l& 'ot %elie)e that the a((ir#atio' o( (a!t2 +ro#ise2 or &es!ri+tio' !reate& a' o%li-atio'4 a'& (%) the seller 1ill +er(or# the re#e&ial +ro#ise. (8) It is 'ot 'e!essar$ to the !reatio' o( a' o%li-atio' /'&er this se!tio' that the seller /se (or#al 1or&s s/!h as ?1arra't? or ?-/ara'tee? or that the seller ha)e a s+e!i(i! i'te'tio' to /'&erta5e a' o%li-atio'2 %/t a' a((ir#atio' #erel$ o( the )al/e o( the -oo&s or a state#e't +/r+orti'- to %e #erel$ the sellerBs o+i'io' or !o##e'&atio' o( the -oo&s &oes 'ot !reate a' o%li-atio'. (9) The (ollo1i'- r/les a++l$ to the re#e&ies (or %rea!h o( a' o%li-atio' !reate& /'&er this se!tio'0 (a) The seller #a$ #o&i($ or li#it the re#e&ies a)aila%le to the re#ote +/r!haser i( the #o&i(i!atio' or li#itatio' is (/r'ishe& to the re#ote +/r!haser 'o later tha' the ti#e o( +/r!hase. The #o&i(i!atio' or li#itatio' #a$ %e (/r'ishe& as +art o( the !o##/'i!atio' that !o'tai's the a((ir#atio' o( (a!t2 +ro#ise2 or &es!ri+tio'. (%) S/%6e!t to a #o&i(i!atio' or li#itatio' o( re#e&$2 a seller i' %rea!h is lia%le (or i'!i&e'tal or !o'se7/e'tial &a#a-es /'&er Se!tio' *-;192 %/t 'ot (or lost +ro(its. (!) The re#ote +/r!haser #a$ re!o)er as &a#a-es (or %rea!h o( a sellerBs o%li-atio' arisi'- /'&er s/%se!tio' (.) the loss res/lti'- i' the or&i'ar$ !o/rse o( e)e'ts as &eter#i'e& i' a'$ reaso'a%le #a''er. (:) A' o%li-atio' that is 'ot a re#e&ial +ro#ise is %rea!he& i( the -oo&s &i& 'ot !o'(or# to the a((ir#atio' o( (a!t2 +ro#ise2 or &es!ri+tio' !reati'- the o%li-atio' 1he' the -oo&s le(t the sellerBs !o'trol. *-.18. I#+lie& Carra't$0 Eer!ha'ta%ilit$4 Usa-e o( Tra&e. (1) U'less e,!l/&e& or #o&i(ie& (Se!tio' *-.1:)2 a 1arra't$ that the -oo&s shall %e #er!ha'ta%le is i#+lie& i' a !o'tra!t (or their sale i( the seller is a #er!ha't 1ith res+e!t to -oo&s o( that 5i'&. U'&er this se!tio' the ser)i'- (or )al/e o( (oo& or &ri'5 to %e !o's/#e& either o' the +re#ises or else1here is a sale. (*) Goo&s to %e #er!ha'ta%le #/st %e at least s/!h as0 (a) +ass 1itho/t o%6e!tio' i' the tra&e /'&er the !o'tra!t &es!ri+tio'4 (%) i' the !ase o( (/'-i%le -oo&s2 are o( (air a)era-e 7/alit$ 1ithi' the &es!ri+tio'4 (!) are (it (or the or&i'ar$ +/r+oses (or 1hi!h -oo&s o( that &es!ri+tio' are /se&4

(&) r/'2 1ithi' the )ariatio's +er#itte& %$ the a-ree#e't2 o( e)e' 5i'&2 7/alit$ a'& 7/a'tit$ 1ithi' ea!h /'it a'& a#o'- all /'its i')ol)e&4 (e) are a&e7/atel$ !o'tai'e&2 +a!5a-e&2 a'& la%ele& as the a-ree#e't #a$ re7/ire4 a'& (() !o'(or# to the +ro#ise or a((ir#atio's o( (a!t #a&e o' the !o'tai'er or la%el i( a'$. (.) U'less e,!l/&e& or #o&i(ie& (Se!tio' *-.1:) other i#+lie& 1arra'ties #a$ arise (ro# !o/rse o( &eali'- or /sa-e o( tra&e. *-.19. I#+lie& Carra't$0 >it'ess (or Parti!/lar P/r+ose. Chere the seller at the ti#e o( !o'tra!ti'- has reaso' to 5'o1 a'$ +arti!/lar +/r+ose (or 1hi!h the -oo&s are re7/ire& a'& that the %/$er is rel$i'- o' the sellerBs s5ill or 6/&-#e't to sele!t or (/r'ish s/ita%le -oo&s2 there is /'less e,!l/&e& or #o&i(ie& /'&er the 'e,t se!tio' a' i#+lie& 1arra't$ that the -oo&s shall %e (it (or s/!h +/r+ose. *-.1:. E,!l/sio' or Eo&i(i!atio' o( Carra'ties. (1) Cor&s or !o'&/!t rele)a't to the !reatio' o( a' e,+ress 1arra't$ a'& 1or&s or !o'&/!t te'&i'- to 'e-ate or li#it 1arra't$ shall %e !o'str/e& 1here)er reaso'a%le as !o'siste't 1ith ea!h other4 %/t s/%6e!t to Se!tio' *-*0*2 'e-atio' or li#itatio' is i'o+erati)e to the e,te't that s/!h !o'str/!tio' is /'reaso'a%le. (*) S/%6e!t to s/%se!tio' (.)2 to e,!l/&e or #o&i($ the i#+lie& 1arra't$ o( #er!ha'ta%ilit$ or a'$ +art o( it i' a !o's/#er !o'tra!t the la'-/a-e #/st %e i' a re!or&2 %e !o's+i!/o/s2 a'& state ?The seller /'&erta5es 'o res+o'si%ilit$ (or the 7/alit$ o( the -oo&s e,!e+t as other1ise +ro)i&e& i' this !o'tra!t2? a'& i' a'$ other !o'tra!t the la'-/a-e #/st #e'tio' #er!ha'ta%ilit$ a'& i' !ase o( a re!or& #/st %e !o's+i!/o/s. S/%6e!t to s/%se!tio' (.)2 to e,!l/&e or #o&i($ the i#+lie& 1arra't$ o( (it'ess2 the e,!l/sio' #/st %e i' a re!or& a'& %e !o's+i!/o/s. La'-/a-e to e,!l/&e all i#+lie& 1arra'ties o( (it'ess i' a !o's/#er !o'tra!t #/st state ?The seller ass/#es 'o res+o'si%ilit$ that the -oo&s 1ill %e (it (or a'$ +arti!/lar +/r+ose (or 1hi!h $o/ #a$ %e %/$i'- these -oo&s2 e,!e+t as other1ise +ro)i&e& i' the !o'tra!t2? a'& i' a'$ other !o'tra!t the la'-/a-e is s/((i!ie't i( it states2 (or e,a#+le2 that ?There are 'o 1arra'ties that e,te'& %e$o'& the &es!ri+tio' o' the (a!e hereo(.? La'-/a-e that satis(ies the re7/ire#e'ts o( this s/%se!tio' (or the e,!l/sio' or #o&i(i!atio' o( a 1arra't$ i' a !o's/#er !o'tra!t also satis(ies the re7/ire#e'ts (or a'$ other !o'tra!t. (.) Not1ithsta'&i'- s/%se!tio' (*) (a) /'less the !ir!/#sta'!es i'&i!ate other1ise2 all i#+lie& 1arra'ties are e,!l/&e& %$ e,+ressio's li5e ?as is?2 ?1ith all (a/lts? or other la'-/a-e that i' !o##o' /'&ersta'&i'- !alls the %/$erBs atte'tio' to the e,!l/sio' o( 1arra'ties2 #a5es +lai' that there is 'o i#+lie& 1arra't$2 a'&2 i' a !o's/#er !o'tra!t e)i&e'!e& %$ a re!or&2 is set (orth !o's+i!/o/sl$ i' the re!or&4 (%) i( the %/$er %e(ore e'teri'- i'to the !o'tra!t has e,a#i'e& the -oo&s or the sa#+le or #o&el as (/ll$ as &esire& or has re(/se& to e,a#i'e the -oo&s a(ter a &e#a'& %$ the seller there is 'o i#+lie& 1arra't$ 1ith re-ar& to &e(e!ts that a' e,a#i'atio' i' the !ir!/#sta'!es sho/l& ha)e re)eale& to the %/$er4 a'& (!) a' i#+lie& 1arra't$ #a$ also %e e,!l/&e& or #o&i(ie& %$ !o/rse o( &eali'- or !o/rse o( +er(or#a'!e or /sa-e o( tra&e.

(8) Re#e&ies (or %rea!h o( 1arra't$ #a$ %e li#ite& i' a!!or&a'!e 1ith Se!tio's *-;1< a'& *-;1A. 2-317. Cumulation and Conflict of Warranties Express or Implied. Carra'ties 1hether e,+ress or i#+lie& shall %e !o'str/e& as !o'siste't 1ith ea!h other a'& as !/#/lati)e2 %/t i( s/!h !o'str/!tio' is /'reaso'a%le the i'te'tio' o( the +arties shall &eter#i'e 1hi!h 1arra't$ is &o#i'a't. I' as!ertai'i'- that i'te'tio' the (ollo1i'r/les a++l$0 (a) E,a!t or te!h'i!al s+e!i(i!atio's &is+la!e a' i'!o'siste't sa#+le or #o&el or -e'eral la'-/a-e o( &es!ri+tio'. (%) A sa#+le (ro# a' e,isti'- %/l5 &is+la!es i'!o'siste't -e'eral la'-/a-e o( &es!ri+tio'. (!) E,+ress 1arra'ties &is+la!e i'!o'siste't i#+lie& 1arra'ties other tha' a' i#+lie& 1arra't$ o( (it'ess (or a +arti!/lar +/r+ose. 2-318. Third art! "eneficiaries of Warranties Express or Implied. (1) I' this se!tio'0 (a) ?I##e&iate %/$er? #ea's a %/$er that e'ters i'to a !o'tra!t 1ith the seller. (%) ?Re#ote +/r!haser? #ea's a +erso' that %/$s or leases -oo&s (ro# a' i##e&iate %/$er or other +erso' i' the 'or#al !hai' o( &istri%/tio'. Alter'ati)e A to s/%se!tio' (*) A sellerBs 1arra't$ to a' i##e&iate %/$er2 1hether e,+ress or i#+lie&2 a sellerBs re#e&ial +ro#ise to a' i##e&iate %/$er2 or a sellerBs o%li-atio' to a re#ote +/r!haser /'&er Se!tio' *-.1.A or *-.1.@ e,te'&s to a'$ i'&i)i&/al 1ho is i' the (a#il$ or ho/sehol& o( the i##e&iate %/$er or the re#ote +/r!haser or 1ho is a -/est i' the ho#e o( either i( it is reaso'a%le to e,+e!t that the +erso' #a$ /se2 !o's/#e2 or %e a((e!te& %$ the -oo&s a'& 1ho is i'6/re& i' +erso' %$ %rea!h o( the 1arra't$2 re#e&ial +ro#ise2 or o%li-atio'. A seller #a$ 'ot e,!l/&e or li#it the o+eratio' o( this se!tio'. Alter'ati)e @ to s/%se!tio' (*) A sellerBs 1arra't$ to a' i##e&iate %/$er2 1hether e,+ress or i#+lie&2 a sellerBs re#e&ial +ro#ise to a' i##e&iate %/$er2 or a sellerBs o%li-atio' to a re#ote +/r!haser /'&er Se!tio' *-.1.A or *-.1.@ e,te'&s to a'$ i'&i)i&/al 1ho #a$ reaso'a%l$ %e e,+e!te& to /se2 !o's/#e2 or %e a((e!te& %$ the -oo&s a'& 1ho is i'6/re& i' +erso' %$ %rea!h o( the 1arra't$2 re#e&ial +ro#ise2 or o%li-atio'. A seller #a$ 'ot e,!l/&e or li#it the o+eratio' o( this se!tio'. Alter'ati)e C to s/%se!tio' (*) A sellerBs 1arra't$ to a' i##e&iate %/$er2 1hether e,+ress or i#+lie&2 a sellerBs re#e&ial +ro#ise to a' i##e&iate %/$er2 or a sellerBs o%li-atio' to a re#ote +/r!haser /'&er Se!tio' *-.1.A or *-.1.@ e,te'&s to a'$ +erso' that #a$ reaso'a%l$ %e e,+e!te& to /se2 !o's/#e2 or %e a((e!te& %$ the -oo&s a'& that is i'6/re& %$ %rea!h o( the 1arra't$2 re#e&ial +ro#ise2 or o%li-atio'. A seller #a$ 'ot e,!l/&e or li#it the o+eratio' o( this se!tio' 1ith res+e!t to i'6/r$ to the +erso' o( a' i'&i)i&/al to 1ho# the 1arra't$2 re#e&ial +ro#ise2 or o%li-atio' e,te'&s. # 2-31$. %eser&ed' *-.*0. Reser)e&" *-.*1. Reser)e&" *-.**. Reser)e&" *-.*.. Reser)e&" *-.*8. Reser)e&" 2-32(. )*etter of Credit) Term+ )Confirmed Credit).

I( the +arties a-ree that the +ri#ar$ #etho& o( +a$#e't 1ill %e %$ letter o( !re&it2 the (ollo1i'- r/les a++l$0 (a) The %/$erBs o%li-atio' to +a$ is s/s+e'&e& %$ seaso'a%le &eli)er$ to the seller o( a letter o( !re&it iss/e& or !o'(ir#e& %$ a (i'a'!i'- a-e'!$ o( -oo& re+/te i' 1hi!h the iss/er a'& a'$ !o'(ir#er /'&erta5e to +a$ a-ai'st +rese'tatio' o( &o!/#e'ts that e)i&e'!e &eli)er$ o( the -oo&s. (%) >ail/re o( a +art$ seaso'a%l$ to (/r'ish a letter o( !re&it as a-ree& is a %rea!h o( the !o'tra!t (or sale. (!) I( the letter o( !re&it is &isho'ore& or re+/&iate&2 the seller2 o' seaso'a%le 'oti(i!atio'2 #a$ re7/ire +a$#e't &ire!tl$ (ro# the %/$er. 2-32,. -ale on .ppro&al and -ale or %eturn+ Consi/nment -ales and %i/hts of Creditors. (1) U'less other1ise a-ree&2 i( &eli)ere& -oo&s #a$ %e ret/r'e& %$ the %/$er e)e' i( the$ !o'(or# to the !o'tra!t2 the tra'sa!tio' is0 (a) a ?sale o' a++ro)al? i( the -oo&s are &eli)ere& +ri#aril$ (or /se4 a'& (%) a ?sale or ret/r'? i( the -oo&s are &eli)ere& +ri#aril$ (or resale. (*) Goo&s hel& o' a++ro)al are 'ot s/%6e!t to the !lai#s o( the %/$erBs !re&itors /'til a!!e+ta'!e4 -oo&s hel& o' sale or ret/r' are s/%6e!t to s/!h !lai#s 1hile i' the %/$erBs +ossessio'. (.) A'$ ?or ret/r'? ter# o( a !o'tra!t (or sale is to %e treate& as a se+arate !o'tra!t (or sale /'&er Se!tio' *-*01 a'& as !o'tra&i!ti'- the sale as+e!t o( the !o'tra!t /'&er Se!tio' *-*0*. 2-327. -pecial Incidents of -ale on .ppro&al and -ale or %eturn. (1) U'&er a sale o' a++ro)al /'less other1ise a-ree& (a) altho/-h the -oo&s are i&e'ti(ie& to the !o'tra!t the ris5 o( loss a'& the title &o 'ot +ass to the %/$er /'til a!!e+ta'!e4 a'& (%) /se o( the -oo&s !o'siste't 1ith the +/r+ose o( trial is 'ot a!!e+ta'!e %/t (ail/re seaso'a%l$ to 'oti($ the seller o( ele!tio' to ret/r' the -oo&s is a!!e+ta'!e2 a'& i( the -oo&s !o'(or# to the !o'tra!t a!!e+ta'!e o( a'$ +art is a!!e+ta'!e o( the 1hole4 a'& (!) a(ter &/e 'oti(i!atio' o( ele!tio' to ret/r'2 the ret/r' is at the sellerBs ris5 a'& e,+e'se %/t a #er!ha't %/$er #/st (ollo1 a'$ reaso'a%le i'str/!tio's. (*) U'&er a sale or ret/r' /'less other1ise a-ree& (a) the o+tio' to ret/r' e,te'&s to the 1hole or a'$ !o##er!ial /'it o( the -oo&s 1hile i' s/%sta'tiall$ their ori-i'al !o'&itio'2 %/t #/st %e e,er!ise& seaso'a%l$4 a'& (%) the ret/r' is at the %/$erBs ris5 a'& e,+e'se. 2-328. -ale 0! .uction. (1) I' a sale %$ a/!tio'2 i( -oo&s are +/t /+ i' lots ea!h lot is the s/%6e!t o( a se+arate sale. (*) A sale %$ a/!tio' is !o#+lete 1he' the a/!tio'eer so a''o/'!es %$ the (all o( the ha##er or i' other !/sto#ar$ #a''er. I( a %i& is #a&e &/ri'- the +ro!ess o( !o#+leti'- the sale %/t %e(ore a +rior %i& is a!!e+te&2 the a/!tio'eer has &is!retio' to reo+e' the %i&&i'- or to &e!lare the -oo&s sol& /'&er the +rior %i&. (.) A sale %$ a/!tio' is s/%6e!t to the sellerBs ri-ht to 1ith&ra1 the -oo&s /'less at the ti#e the -oo&s are +/t /+ or &/ri'- the !o/rse o( the a/!tio' it is a''o/'!e& i' e,+ress

ter#s that the ri-ht to 1ith&ra1 the -oo&s is 'ot reser)e&. I' a' a/!tio' i' 1hi!h the ri-ht to 1ith&ra1 the -oo&s is reser)e&2 the a/!tio'eer #a$ 1ith&ra1 the -oo&s at a'$ ti#e /'til !o#+letio' o( the sale is a''o/'!e& %$ the a/!tio'eer. I' a' a/!tio' i' 1hi!h the ri-ht to 1ith&ra1 the -oo&s is 'ot reser)e&2 a(ter the a/!tio'eer !alls (or %i&s o' a' arti!le or lot2 the arti!le or lot #a$ 'ot %e 1ith&ra1' /'less 'o %i& is #a&e 1ithi' a reaso'a%le ti#e. I' either !ase a %i&&er #a$ retra!t a %i& /'til the a/!tio'eerBs a''o/'!e#e't o( !o#+letio' o( the sale2 %/t a %i&&erBs retra!tio' &oes 'ot re)i)e a'$ +re)io/s %i&. (8) I( the a/!tio'eer 5'o1i'-l$ re!ei)es a %i& o' the sellerBs %ehal( or the seller #a5es or +ro!/res s/!h a %i&2 a'& 'oti!e has 'ot %ee' -i)e' that li%ert$ (or s/!h %i&&i'- is reser)e&2 the %/$er #a$ at the %/$erBs o+tio' a)oi& the sale or ta5e the -oo&s at the +ri!e o( the last -oo& (aith %i& +rior to the !o#+letio' o( the sale. This s/%se!tio' shall 'ot a++l$ to a'$ %i& at a' a/!tio' re7/ire& %$ la1. .%T 1. TIT*E2 C%E3IT4%- .53 6443 7.IT8 2-1:1. -ection. Ea!h +ro)isio' o( this Arti!le 1ith re-ar& to the ri-hts2 o%li-atio's a'& re#e&ies o( the seller2 the %/$er2 +/r!hasers or other thir& +arties a++lies irres+e!ti)e o( title to the -oo&s e,!e+t 1here the +ro)isio' re(ers to s/!h title. I'so(ar as sit/atio's are 'ot !o)ere& %$ the other +ro)isio's o( this Arti!le a'& #atters !o'!er'i'- title %e!o#e #aterial the (ollo1i'- r/les a++l$0 (1) Title to -oo&s !a''ot +ass /'&er a !o'tra!t (or sale +rior to their i&e'ti(i!atio' to the !o'tra!t (Se!tio' *-901)2 a'& /'less other1ise e,+li!itl$ a-ree& the %/$er a!7/ires %$ their i&e'ti(i!atio' a s+e!ial +ro+ert$ as li#ite& %$ this A!t. A'$ rete'tio' or reser)atio' %$ the seller o( the title (+ro+ert$) i' -oo&s shi++e& or &eli)ere& to the %/$er is li#ite& i' e((e!t to a reser)atio' o( a se!/rit$ i'terest. S/%6e!t to these +ro)isio's a'& to the +ro)isio's o( Arti!le A2 title to -oo&s +asses (ro# the seller to the %/$er i' a'$ #a''er a'& o' a'$ !o'&itio's e,+li!itl$ a-ree& o' %$ the +arties. (*) U'less other1ise e,+li!itl$ a-ree& title +asses to the %/$er at the ti#e a'& +la!e at 1hi!h the seller !o#+letes +er(or#a'!e 1ith re(ere'!e to the +h$si!al &eli)er$ o( the -oo&s2 &es+ite a'$ reser)atio' o( a se!/rit$ i'terest a'& e)e' tho/-h a &o!/#e't o( title is to %e &eli)ere& at a &i((ere't ti#e or +la!e4 a'& i' +arti!/lar a'& &es+ite a'$ reser)atio' o( a se!/rit$ i'terest %$ the %ill o( la&i'(a) i( the !o'tra!t re7/ires or a/thori3es the seller to se'& the -oo&s to the %/$er %/t &oes 'ot re7/ire the seller to &eli)er the# at &esti'atio'2 title +asses to the %/$er at the ti#e a'& +la!e o( shi+#e't4 %/t (%) i( the !o'tra!t re7/ires &eli)er$ at &esti'atio'2 title +asses o' te'&er there. (.) U'less other1ise e,+li!itl$ a-ree& 1here &eli)er$ is to %e #a&e 1itho/t #o)i'- the -oo&s2 (a) i( the seller is to &eli)er a ta'-i%le &o!/#e't o( title2 title +asses at the ti#e 1he' a'& the +la!e 1here he &eli)ers s/!h &o!/#e'ts a'& i( the seller is to &eli)er a' ele!tro'i! &o!/e#'t o( title2 title +asses 1he' the seller &eli)ers the &o!/#e't4 or (%) i( the -oo&s are at the ti#e o( !o'tra!ti'- alrea&$ i&e'ti(ie& a'& 'o &o!/#e'ts o( title are to %e &eli)ere&2 title +asses at the ti#e a'& +la!e o( !o'tra!ti'-. 9%C8.-E%assin/ of Title+ %eser&ation for -ecurit!+ *imited .pplication of This

(8) A re6e!tio' or other re(/sal %$ the %/$er to re!ei)e or retai' the -oo&s2 1hether or 'ot 6/sti(ie&2 or a 6/sti(ie& re)o!atio' o( a!!e+ta'!e re)ests title to the -oo&s i' the seller. S/!h re)esti'- o!!/rs %$ o+eratio' o( la1 a'& is 'ot a ?sale?. 2-1:2. %i/hts of -eller;s Creditors ./ainst -old 6oods. (1) E,!e+t as +ro)i&e& i' s/%se!tio's (*) a'& (.)2 ri-hts o( /'se!/re& !re&itors o( the seller 1ith res+e!t to -oo&s 1hi!h ha)e %ee' i&e'ti(ie& to a !o'tra!t (or sale are s/%6e!t to the %/$erBs ri-hts to re!o)er the -oo&s /'&er this Arti!le (Se!tio's *-90* a'& *-;1:). (*) A !re&itor o( the seller #a$ treat a sale or a' i&e'ti(i!atio' o( -oo&s to a !o'tra!t (or sale as )oi& i( as a-ai'st hi# a rete'tio' o( +ossessio' %$ the seller is (ra/&/le't /'&er a'$ r/le o( la1 o( the state 1here the -oo&s are sit/ate&2 e,!e+t that rete'tio' o( +ossessio' i' -oo& (aith a'& !/rre't !o/rse o( tra&e %$ a #er!ha't-seller (or a !o##er!iall$ reaso'a%le ti#e a(ter a sale or i&e'ti(i!atio' is 'ot (ra/&/le't. (.) Nothi'- i' this Arti!le shall %e &ee#e& to i#+air the ri-hts o( !re&itors o( the seller (a) /'&er the +ro)isio's o( the Arti!le o' Se!/re& Tra'sa!tio's (Arti!le A)4 or (%) 1here i&e'ti(i!atio' to the !o'tra!t or &eli)er$ is #a&e 'ot i' !/rre't !o/rse o( tra&e %/t i' satis(a!tio' o( or as se!/rit$ (or a +re-e,isti'- !lai# (or #o'e$2 se!/rit$ or the li5e a'& is #a&e /'&er !ir!/#sta'!es 1hi!h /'&er a'$ r/le o( la1 o( the state 1here the -oo&s are sit/ate& 1o/l& a+art (ro# this Arti!le !o'stit/te the tra'sa!tio' a (ra/&/le't tra's(er or )oi&a%le +re(ere'!e. 2-1:3. o<er to Transfer+ 6ood 7aith urchase of 6oods+ )Entrustin/). (1) A +/r!haser o( -oo&s a!7/ires all title 1hi!h his tra's(eror ha& or ha& +o1er to tra's(er e,!e+t that a +/r!haser o( a li#ite& i'terest a!7/ires ri-hts o'l$ to the e,te't o( the i'terest +/r!hase&. A +erso' 1ith )oi&a%le title has +o1er to tra's(er a -oo& title to a -oo& (aith +/r!haser (or )al/e. Che' -oo&s ha)e %ee' &eli)ere& /'&er a tra'sa!tio' o( +/r!hase the +/r!haser has s/!h +o1er e)e' tho/-h (a) the tra's(eror 1as &e!ei)e& as to the i&e'tit$ o( the +/r!haser2 or (%) the &eli)er$ 1as i' e,!ha'-e (or a !he!5 1hi!h is later &isho'ore&2 or (!) it 1as a-ree& that the tra'sa!tio' 1as to %e a ?!ash sale?2 or (&) the &eli)er$ 1as +ro!/re& thro/-h (ra/& +/'isha%le as lar!e'o/s /'&er the !ri#i'al la1. (*) A'$ e'tr/sti'- o( +ossessio' o( -oo&s to a #er!ha't that &eals i' -oo&s o( that 5i'& -i)es hi# +o1er to tra's(er all ri-hts o( the e'tr/ster to a %/$er i' or&i'ar$ !o/rse o( %/si'ess. (.) ?E'tr/sti'-? i'!l/&es a'$ &eli)er$ a'& a'$ a!7/ies!e'!e i' rete'tio' o( +ossessio' re-ar&less o( a'$ !o'&itio' e,+resse& %et1ee' the +arties to the &eli)er$ or a!7/ies!e'!e a'& re-ar&less o( 1hether the +ro!/re#e't o( the e'tr/sti'- or the +ossessorBs &is+ositio' o( the -oo&s ha)e %ee' s/!h as to %e lar!e'o/s /'&er the !ri#i'al la1. Note0 I( a state a&o+ts the re+ealer o( Arti!le :-@/l5 Tra's(ers (Alter'ati)e A)2 s/%se!. (8) sho/l& rea& as (ollo1s0" (8) The ri-hts o( other +/r!hasers o( -oo&s a'& o( lie' !re&itors are -o)er'e& %$ the Arti!les o' Se!/re& Tra'sa!tio's (Arti!le A) a'& =o!/#e'ts o( Title (Arti!le ;). Note0 I( a state a&o+ts Re)ise& Arti!le :-@/l5 Sales (Alter'ati)e @)2 s/%se!. (8) sho/l& rea& as (ollo1s0"

(8) The ri-hts o( other +/r!hasers o( -oo&s a'& o( lie' !re&itors are -o)er'e& %$ the Arti!les o' Se!/re& Tra'sa!tio's (Arti!le A)2 @/l5 Sales (Arti!le :) a'& =o!/#e'ts o( Title (Arti!le ;). .%T (. E%74%=.5CE 2-(:1. Insura0le Interest in 6oods+ =anner of Identification of 6oods. (1) The %/$er o%tai's a s+e!ial +ro+ert$ a'& a' i's/ra%le i'terest i' -oo&s %$ i&e'ti(i!atio' o( e,isti'- -oo&s as -oo&s to 1hi!h the !o'tra!t re(ers e)e' tho/-h the -oo&s so i&e'ti(ie& are 'o'-!o'(or#i'- a'& he has a' o+tio' to ret/r' or re6e!t the#. S/!h i&e'ti(i!atio' !a' %e #a&e at a'$ ti#e a'& i' a'$ #a''er e,+li!itl$ a-ree& to %$ the +arties. I' the a%se'!e o( e,+li!it a-ree#e't i&e'ti(i!atio' o!!/rs (a) 1he' the !o'tra!t is #a&e i( it is (or the sale o( -oo&s alrea&$ e,isti'- a'& i&e'ti(ie&4 (%) i( the !o'tra!t is (or the sale o( (/t/re -oo&s other tha' those &es!ri%e& i' +ara-ra+h (!)2 1he' -oo&s are shi++e&2 #ar5e& or other1ise &esi-'ate& %$ the seller as -oo&s to 1hi!h the !o'tra!t re(ers4 (!) 1he' the !ro+s are +la'te& or other1ise %e!o#e -ro1i'- !ro+s or the $o/'- are !o'!ei)e& i( the !o'tra!t is (or the sale o( /'%or' $o/'- to %e %or' 1ithi' t1el)e #o'ths a(ter !o'tra!ti'- or (or the sale o( !ro+s to %e har)este& 1ithi' t1el)e #o'ths or the 'e,t 'or#al har)est reaso' a(ter !o'tra!ti'- 1hi!he)er is lo'-er. (*) The seller retai's a' i's/ra%le i'terest i' -oo&s so lo'- as title to or a'$ se!/rit$ i'terest i' the -oo&s re#ai's i' hi# a'& 1here the i&e'ti(i!atio' is %$ the seller alo'e he #a$ /'til &e(a/lt or i'sol)e'!$ or 'oti(i!atio' to the %/$er that the i&e'ti(i!atio' is (i'al s/%stit/te other -oo&s (or those i&e'ti(ie&. (.) Nothi'- i' this se!tio' i#+airs a'$ i's/ra%le i'terest re!o-'i3e& /'&er a'$ other stat/te or r/le o( la1. 2-(:2. "u!er;s %i/ht to 6oods on -eller;s %epudiation2 7ailure to 3eli&er or Insol&enc!. (1) S/%6e!t to s/%se!tio's (*) a'& (.) a'& e)e' tho/-h the -oo&s ha)e 'ot %ee' shi++e& a %/$er 1ho has +ai& a +art or all o( the +ri!e o( -oo&s i' 1hi!h he has a s+e!ial +ro+ert$ /'&er the +ro)isio's o( the i##e&iatel$ +re!e&i'- se!tio' #a$ o' #a5i'- a'& 5ee+i'- -oo& a te'&er o( a'$ /'+ai& +ortio' o( their +ri!e re!o)er the# (ro# the seller i(0 (a) i' the !ase o( -oo&s %o/-ht (or +erso'al2 (a#il$2 or ho/sehol& +/r+oses2 the seller re+/&iates or (ails to &eli)er as re7/ire& %$ the !o'tra!t4 or (%) i' other !ases2 the seller %e!o#es i'sol)e't 1ithi' te' &a$s a(ter re!ei+t o( the (irst i'stall#e't o' their +ri!e. (*) The %/$erBs ri-ht to re!o)er the -oo&s /'&er s/%se!tio' (1)(a) )ests /+o' a!7/isitio' o( a s+e!ial +ro+ert$2 e)e' i( the seller ha& 'ot the' re+/&iate& or (aile& to &eli)er. (.) I( the i&e'ti(i!atio' !reati'- his s+e!ial +ro+ert$ has %ee' #a&e %$ the %/$er he a!7/ires the ri-ht to re!o)er the -oo&s o'l$ i( the$ !o'(or# to the !o'tra!t (or sale. 2-(:3. =anner of -eller;s Tender of 3eli&er!. (1) Te'&er o( &eli)er$ re7/ires that the seller +/t a'& hol& !o'(or#i'- -oo&s at the %/$erBs &is+ositio' a'& -i)e the %/$er a'$ 'oti(i!atio' reaso'a%l$ 'e!essar$ to e'a%le

hi# to ta5e &eli)er$. The #a''er2 ti#e a'& +la!e (or te'&er are &eter#i'e& %$ the a-ree#e't a'& this Arti!le2 a'& i' +arti!/lar (a) te'&er #/st %e at a reaso'a%le ho/r2 a'& i( it is o( -oo&s the$ #/st %e 5e+t a)aila%le (or the +erio& reaso'a%l$ 'e!essar$ to e'a%le the %/$er to ta5e +ossessio'4 %/t (%) /'less other1ise a-ree& the %/$er #/st (/r'ish (a!ilities reaso'a%l$ s/ite& to the re!ei+t o( the -oo&s. (*) Chere the !ase is 1ithi' the 'e,t se!tio' res+e!ti'- shi+#e't te'&er re7/ires that the seller !o#+l$ 1ith its +ro)isio's. (.) Chere the seller is re7/ire& to &eli)er at a +arti!/lar &esti'atio' te'&er re7/ires that he !o#+l$ 1ith s/%se!tio' (1) a'& also i' a'$ a++ro+riate !ase te'&er &o!/#e'ts as &es!ri%e& i' s/%se!tio's (8) a'& (9) o( this se!tio'. (8) Chere -oo&s are i' the +ossessio' o( a %ailee a'& are to %e &eli)ere& 1itho/t %ei'#o)e& (a) te'&er re7/ires that the seller either te'&er a 'e-otia%le &o!/#e't o( title !o)eri's/!h -oo&s or +ro!/re a!5'o1le&-#e't %$ the %ailee o( the %/$erBs ri-ht to +ossessio' o( the -oo&s4 %/t (%) te'&er to the %/$er o( a 'o'-'e-otia%le &o!/#e't o( title or o( a re!or& &ire!ti'- the %ailee to &eli)er is s/((i!ie't te'&er /'less the %/$er seaso'a%l$ o%6e!ts2 a'& e,!e+t as other1ise +ro)i&e& i' Arti!le A re!ei+t %$ the %ailee o( 'oti(i!atio' o( the %/$erBs ri-hts (i,es those ri-hts as a-ai'st the %ailee a'& all thir& +erso's4 %/t ris5 o( loss o( the -oo&s a'& o( a'$ (ail/re %$ the %ailee to ho'or the 'o'-'e-otia%le &o!/#e't o( title or to o%e$ the &ire!tio' re#ai's o' the seller /'til the %/$er has ha& a reaso'a%le ti#e to +rese't the &o!/#e't or &ire!tio'2 a'& a re(/sal %$ the %ailee to ho'or the &o!/#e't or to o%e$ the &ire!tio' &e(eats the te'&er. (9) Chere the !o'tra!t re7/ires the seller to &eli)er &o!/#e'ts (a) he #/st te'&er all s/!h &o!/#e'ts i' !orre!t (or#2 e,!e+t as +ro)i&e& i' this Arti!le 1ith res+e!t to %ills o( la&i'- i' a set (s/%se!tio' (*) o( Se!tio' *-.*.)4 a'& (%) te'&er thro/-h !/sto#ar$ %a'5i'- !ha''els is s/((i!ie't a'& &isho'or o( a &ra(t a!!o#+a'$i'- or asso!iate& 1ith the &o!/#e'ts !o'stit/tes 'o'-a!!e+ta'!e or re6e!tio'. 2-(:1. -hipment 0! -eller. Chere the seller is re7/ire& or a/thori3e& to se'& the -oo&s to the %/$er a'& the !o'tra!t &oes 'ot re7/ire hi# to &eli)er the# at a +arti!/lar &esti'atio'2 the' /'less other1ise a-ree& he #/st (a) +/t the -oo&s i' the +ossessio' o( s/!h a !arrier a'& #a5e s/!h a !o'tra!t (or their tra's+ortatio' as #a$ %e reaso'a%le ha)i'- re-ar& to the 'at/re o( the -oo&s a'& other !ir!/#sta'!es o( the !ase4 a'& (%) o%tai' a'& +ro#+tl$ &eli)er or te'&er i' &/e (or# a'$ &o!/#e't 'e!essar$ to e'a%le the %/$er to o%tai' +ossessio' o( the -oo&s or other1ise re7/ire& %$ the a-ree#e't or %$ /sa-e o( tra&e4 a'& (!) +ro#+tl$ 'oti($ the %/$er o( the shi+#e't. >ail/re to 'oti($ the %/$er /'&er +ara-ra+h (!) or to #a5e a +ro+er !o'tra!t /'&er +ara-ra+h (a) is a -ro/'& (or re6e!tio' o'l$ i( #aterial &ela$ or loss e's/es. 2-(:(. -eller;s -hipment 9nder %eser&ation.

(1) Chere the seller has i&e'ti(ie& -oo&s to the !o'tra!t %$ or %e(ore shi+#e't0 (a) his +ro!/re#e't o( a 'e-otia%le %ill o( la&i'- to his o1' or&er or other1ise reser)es i' hi# a se!/rit$ i'terest i' the -oo&s. Dis +ro!/re#e't o( the %ill to the or&er o( a (i'a'!i'- a-e'!$ or o( the %/$er i'&i!ates i' a&&itio' o'l$ the sellerBs e,+e!tatio' o( tra's(erri'- that i'terest to the +erso' 'a#e&. (%) a 'o'-'e-otia%le %ill o( la&i'- to hi#sel( or his 'o#i'ee reser)es +ossessio' o( the -oo&s as se!/rit$ %/t e,!e+t i' a !ase o( !o'&itio'al &eli)er$ (s/%se!tio' (*) o( Se!tio' *-90;) a 'o'-'e-otia%le %ill o( la&i'- 'a#i'- the %/$er as !o'si-'ee reser)es 'o se!/rit$ i'terest e)e' tho/-h the seller retai's +ossessio' or !o'trol o( the %ill o( la&i'-. (*) Che' shi+#e't %$ the seller 1ith reser)atio' o( a se!/rit$ i'terest is i' )iolatio' o( the !o'tra!t (or sale it !o'stit/tes a' i#+ro+er !o'tra!t (or tra's+ortatio' 1ithi' the +re!e&i'- se!tio' %/t i#+airs 'either the ri-hts -i)e' to the %/$er %$ shi+#e't a'& i&e'ti(i!atio' o( the -oo&s to the !o'tra!t 'or the sellerBs +o1ers as a hol&er o( a 'e-otia%le &o!/#e't o( title. 2-(:,. %i/hts of 7inancin/ a/enc!. (1) A (i'a'!i'- a-e'!$ %$ +a$i'- or +/r!hasi'- (or )al/e a &ra(t 1hi!h relates to a shi+#e't o( -oo&s a!7/ires to the e,te't o( the +a$#e't or +/r!hase a'& i' a&&itio' to its o1' ri-hts /'&er the &ra(t a'& a'$ &o!/#e't o( title se!/ri'- it a'$ ri-hts o( the shi++er i' the -oo&s i'!l/&i'- the ri-ht to sto+ &eli)er$ a'& the shi++erBs ri-ht to ha)e the &ra(t ho'ore& %$ the %/$er. (*) The ri-ht to rei#%/rse#e't o( a (i'a'!i'- a-e'!$ 1hi!h has i' -oo& (aith ho'ore& or +/r!hase& the &ra(t /'&er !o##it#e't to or a/thorit$ (ro# the %/$er is 'ot i#+aire& %$ s/%se7/e't &is!o)er$ o( &e(e!ts 1ith re(ere'!e to a'$ rele)a't &o!/#e't 1hi!h 1as a++are'tl$ re-/lar. 2-(:7. Effect of -eller;s Tender+ 3eli&er! on Condition. (1) Te'&er o( &eli)er$ is a !o'&itio' to the %/$erBs &/t$ to a!!e+t the -oo&s a'&2 /'less other1ise a-ree&2 to his &/t$ to +a$ (or the#. Te'&er e'titles the seller to a!!e+ta'!e o( the -oo&s a'& to +a$#e't a!!or&i'- to the !o'tra!t. (*) Chere +a$#e't is &/e a'& &e#a'&e& o' the &eli)er$ to the %/$er o( -oo&s or &o!/#e'ts o( title2 his ri-ht as a-ai'st the seller to retai' or &is+ose o( the# is !o'&itio'al /+o' his #a5i'- the +a$#e't &/e. Per#a'e't E&itorial @oar& Co##e'tar$" 2-(:8. Cure 0! -eller of Improper Tender or 3eli&er!+ %eplacement. (1) Chere a'$ te'&er or &eli)er$ %$ the seller is re6e!te& %e!a/se 'o'-!o'(or#i'- a'& the ti#e (or +er(or#a'!e has 'ot $et e,+ire&2 the seller #a$ seaso'a%l$ 'oti($ the %/$er o( his i'te'tio' to !/re a'& #a$ the' 1ithi' the !o'tra!t ti#e #a5e a !o'(or#i'&eli)er$. (*) Chere the %/$er re6e!ts a 'o'-!o'(or#i'- te'&er 1hi!h the seller ha& reaso'a%le -ro/'&s to %elie)e 1o/l& %e a!!e+ta%le 1ith or 1itho/t #o'e$ allo1a'!e the seller #a$ i( he seaso'a%l$ 'oti(ies the %/$er ha)e a (/rther reaso'a%le ti#e to s/%stit/te a !o'(or#i'- te'&er. 2-(:$. %is> of *oss in the .0sence of "reach. (1) Chere the !o'tra!t re7/ires or a/thori3es the seller to shi+ the -oo&s %$ !arrier

(a) i( it &oes 'ot re7/ire hi# to &eli)er the# at a +arti!/lar &esti'atio'2 the ris5 o( loss +asses to the %/$er 1he' the -oo&s are &/l$ &eli)ere& to the !arrier e)e' tho/-h the shi+#e't is /'&er reser)atio' (Se!tio' *-909)4 %/t (%) i( it &oes re7/ire hi# to &eli)er the# at a +arti!/lar &esti'atio' a'& the -oo&s are there &/l$ te'&ere& 1hile i' the +ossessio' o( the !arrier2 the ris5 o( loss +asses to the %/$er 1he' the -oo&s are there &/l$ so te'&ere& as to e'a%le the %/$er to ta5e &eli)er$. (*) Chere the -oo&s are hel& %$ a %ailee to %e &eli)ere& 1itho/t %ei'- #o)e&2 the ris5 o( loss +asses to the %/$er (a) o' his re!ei+t o( +ossessio' or !o'trol o( a 'e-otia%le &o!/#e't o( title !o)eri'- the -oo&s4 or (%) o' a!5'o1le&-#e't %$ the %ailee o( the %/$erBs ri-ht to +ossessio' o( the -oo&s4 or (!) a(ter his re!ei+t o( +osessio' or !o'trol o( a 'o'-'e-otia%le &o!/#e't o( title or other &ire!tio' to &eli)er i' a re!or&2 as +ro)i&e& i' s/%se!tio' (8)(%) o( Se!tio' *-90.. (.) I' a'$ !ase 'ot 1ithi' s/%se!tio' (1) or (*)2 the ris5 o( loss +asses to the %/$er o' his re!ei+t o( the -oo&s i( the seller is a #er!ha't4 other1ise the ris5 +asses to the %/$er o' te'&er o( &eli)er$. (8) The +ro)isio's o( this se!tio' are s/%6e!t to !o'trar$ a-ree#e't o( the +arties a'& to the +ro)isio's o( this Arti!le o' sale o' a++ro)al (Se!tio' *-.*;) a'& o' e((e!t o( %rea!h o' ris5 o( loss (Se!tio' *-910). 2-(1:. Effect of "reach on %is> of *oss. (1) Chere a te'&er or &eli)er$ o( -oo&s so (ails to !o'(or# to the !o'tra!t as to -i)e a ri-ht o( re6e!tio' the ris5 o( their loss re#ai's o' the seller /'til !/re or a!!e+ta'!e. (*) Chere the %/$er ri-ht(/ll$ re)o5es a!!e+ta'!e he #a$ to the e,te't o( a'$ &e(i!ie'!$ i' his e((e!ti)e i's/ra'!e !o)era-e treat the ris5 o( loss as ha)i'- reste& o' the seller (ro# the %e-i''i'-. (.) Chere the %/$er as to !o'(or#i'- -oo&s alrea&$ i&e'ti(ie& to the !o'tra!t (or sale re+/&iates or is other1ise i' %rea!h %e(ore ris5 o( their loss has +asse& to hi#2 the seller #a$ to the e,te't o( a'$ &e(i!ie'!$ i' his e((e!ti)e i's/ra'!e !o)era-e treat the ris5 o( loss as resti'- o' the %/$er (or a !o##er!iall$ reaso'a%le ti#e. 2-(11. Tender of a!ment 0! "u!er+ a!ment 0! Chec>. (1) U'less other1ise a-ree& te'&er o( +a$#e't is a !o'&itio' to the sellerBs &/t$ to te'&er a'& !o#+lete a'$ &eli)er$. (*) Te'&er o( +a$#e't is s/((i!ie't 1he' #a&e %$ a'$ #ea's or i' a'$ #a''er !/rre't i' the or&i'ar$ !o/rse o( %/si'ess /'less the seller &e#a'&s +a$#e't i' le-al te'&er a'& -i)es a'$ e,te'sio' o( ti#e reaso'a%l$ 'e!essar$ to +ro!/re it. (.) S/%6e!t to the +ro)isio's o( this A!t o' the e((e!t o( a' i'str/#e't o' a' o%li-atio' (Se!tio' .-<0*)2 +a$#e't %$ !he!5 is !o'&itio'al a'& is &e(eate& as %et1ee' the +arties %$ &isho'or o( the !he!5 o' &/e +rese't#e't. 2-(12. a!ment 0! "u!er "efore Inspection. (1) Chere the !o'tra!t re7/ires +a$#e't %e(ore i's+e!tio' 'o'-!o'(or#it$ o( the -oo&s &oes 'ot e,!/se the %/$er (ro# so #a5i'- +a$#e't /'less (a) the 'o'-!o'(or#it$ a++ears 1itho/t i's+e!tio'4 or

(%) &es+ite te'&er o( the re7/ire& &o!/#e'ts the !ir!/#sta'!es 1o/l& 6/sti($ i'6/'!tio' a-ai'st ho'or /'&er this A!t (Se!tio' 9-10A(%)). (*) Pa$#e't +/rs/a't to s/%se!tio' (1) &oes 'ot !o'stit/te a' a!!e+ta'!e o( -oo&s or i#+air the %/$erBs ri-ht to i's+e!t or a'$ o( his re#e&ies. 2-(13. "u!er;s %i/ht to Inspection of 6oods. (1) U'less other1ise a-ree& a'& s/%6e!t to s/%se!tio' (.)2 1here -oo&s are te'&ere& or &eli)ere& or i&e'ti(ie& to the !o'tra!t (or sale2 the %/$er has a ri-ht %e(ore +a$#e't or a!!e+ta'!e to i's+e!t the# at a'$ reaso'a%le +la!e a'& ti#e a'& i' a'$ reaso'a%le #a''er. Che' the seller is re7/ire& or a/thori3e& to se'& the -oo&s to the %/$er2 the i's+e!tio' #a$ %e a(ter their arri)al. (*) E,+e'ses o( i's+e!tio' #/st %e %or'e %$ the %/$er %/t #a$ %e re!o)ere& (ro# the seller i( the -oo&s &o 'ot !o'(or# a'& are re6e!te&. (.) U'less other1ise a-ree& a'& s/%6e!t to the +ro)isio's o( this Arti!le o' C.I.>. !o'tra!ts (s/%se!tio' (.) o( Se!tio' *-.*1)2 the %/$er is 'ot e'title& to i's+e!t the -oo&s %e(ore +a$#e't o( the +ri!e 1he' the !o'tra!t +ro)i&es (a) (or &eli)er$ ?C.O.=.? or o' other li5e ter#s4 or (%) (or +a$#e't a-ai'st &o!/#e'ts o( title2 e,!e+t 1here s/!h +a$#e't is &/e o'l$ a(ter the -oo&s are to %e!o#e a)aila%le (or i's+e!tio'. (8) A +la!e or #etho& o( i's+e!tio' (i,e& %$ the +arties is +res/#e& to %e e,!l/si)e %/t /'less other1ise e,+ressl$ a-ree& it &oes 'ot +ost+o'e i&e'ti(i!atio' or shi(t the +la!e (or &eli)er$ or (or +assi'- the ris5 o( loss. I( !o#+lia'!e %e!o#es i#+ossi%le2 i's+e!tio' shall %e as +ro)i&e& i' this se!tio' /'less the +la!e or #etho& (i,e& 1as !learl$ i'te'&e& as a' i'&is+e'sa%le !o'&itio' (ail/re o( 1hi!h a)oi&s the !o'tra!t. 2-(11. When 3ocuments 3eli&era0le on .cceptance+ When on a!ment. U'less other1ise a-ree& &o!/#e'ts a-ai'st 1hi!h a &ra(t is &ra1' are to %e &eli)ere& to the &ra1ee o' a!!e+ta'!e o( the &ra(t i( it is +a$a%le #ore tha' three &a$s a(ter +rese't#e't4 other1ise2 o'l$ o' +a$#e't. 2-(1(. reser&in/ E&idence of 6oods in 3ispute. I' (/rthera'!e o( the a&6/st#e't o( a'$ !lai# or &is+/te (a) either +art$ o' reaso'a%le 'oti(i!atio' to the other a'& (or the +/r+ose o( as!ertai'i'- the (a!ts a'& +reser)i'- e)i&e'!e has the ri-ht to i's+e!t2 test a'& sa#+le the -oo&s i'!l/&i'- s/!h o( the# as #a$ %e i' the +ossessio' or !o'trol o( the other4 a'& (%) the +arties #a$ a-ree to a thir& +art$ i's+e!tio' or s/r)e$ to &eter#i'e the !o'(or#it$ or !o'&itio' o( the -oo&s a'& #a$ a-ree that the (i'&i'-s shall %e %i'&i'/+o' the# i' a'$ s/%se7/e't liti-atio' or a&6/st#e't. .%T ,. "%E.C82 %E 93I.TI45 .53 E?C9-E 2-,:1. "u!er;s %i/hts on Improper 3eli&er!. S/%6e!t to the +ro)isio's o( this Arti!le o' %rea!h i' i'stall#e't !o'tra!ts (Se!tio' *:1*) a'& /'less other1ise a-ree& /'&er the se!tio's o' !o'tra!t/al li#itatio's o( re#e&$ (Se!tio's *-;1< a'& *-;1A)2 i( the -oo&s or the te'&er o( &eli)er$ (ail i' a'$ res+e!t to !o'(or# to the !o'tra!t2 the %/$er #a$ (a) re6e!t the 1hole4 or (%) a!!e+t the 1hole4 or

(!) a!!e+t a'$ !o##er!ial /'it or /'its a'& re6e!t the rest. 2-,:2. =anner and Effect of %i/htful %e@ection. (1) Re6e!tio' o( -oo&s #/st %e 1ithi' a reaso'a%le ti#e a(ter their &eli)er$ or te'&er. It is i'e((e!ti)e /'less the %/$er seaso'a%l$ 'oti(ies the seller. (*) S/%6e!t to the +ro)isio's o( the t1o (ollo1i'- se!tio's o' re6e!te& -oo&s (Se!tio's *-:0. a'& *-:08)2 (a) a(ter re6e!tio' a'$ e,er!ise o( o1'ershi+ %$ the %/$er 1ith res+e!t to a'$ !o##er!ial /'it is 1ro'-(/l as a-ai'st the seller4 a'& (%) i( the %/$er has %e(ore re6e!tio' ta5e' +h$si!al +ossessio' o( -oo&s i' 1hi!h he &oes 'ot ha)e a se!/rit$ i'terest /'&er the +ro)isio's o( this Arti!le (s/%se!tio' (.) o( Se!tio' *-;11)2 he is /'&er a &/t$ a(ter re6e!tio' to hol& the# 1ith reaso'a%le !are at the sellerBs &is+ositio' (or a ti#e s/((i!ie't to +er#it the seller to re#o)e the#4 %/t (!) the %/$er has 'o (/rther o%li-atio's 1ith re-ar& to -oo&s ri-ht(/ll$ re6e!te&. (.) The sellerBs ri-hts 1ith res+e!t to -oo&s 1ro'-(/ll$ re6e!te& are -o)er'e& %$ the +ro)isio's o( this Arti!le o' sellerBs re#e&ies i' -e'eral (Se!tio' *-;0.). 2-,:3. =erchant "u!er;s 3uties as to %i/htfull! %e@ected 6oods. (1) S/%6e!t to a'$ se!/rit$ i'terest i' the %/$er (s/%se!tio' (.) o( Se!tio' *-;11)2 1he' the seller has 'o a-e't or +la!e o( %/si'ess at the #ar5et o( re6e!tio' a #er!ha't %/$er is /'&er a &/t$ a(ter re6e!tio' o( -oo&s i' his +ossessio' or !o'trol to (ollo1 a'$ reaso'a%le i'str/!tio's re!ei)e& (ro# the seller 1ith res+e!t to the -oo&s a'& i' the a%se'!e o( s/!h i'str/!tio's to #a5e reaso'a%le e((orts to sell the# (or the sellerBs a!!o/'t i( the$ are +erisha%le or threate' to &e!li'e i' )al/e s+ee&il$. I'str/!tio's are 'ot reaso'a%le i( o' &e#a'& i'&e#'it$ (or e,+e'ses is 'ot (orth!o#i'-. (*) Che' the %/$er sells -oo&s /'&er s/%se!tio' (1)2 he is e'title& to rei#%/rse#e't (ro# the seller or o/t o( the +ro!ee&s (or reaso'a%le e,+e'ses o( !ari'- (or a'& selli'the#2 a'& i( the e,+e'ses i'!l/&e 'o selli'- !o##issio' the' to s/!h !o##issio' as is /s/al i' the tra&e or i( there is 'o'e to a reaso'a%le s/# 'ot e,!ee&i'- te' +er !e't o' the -ross +ro!ee&s. (.) I' !o#+l$i'- 1ith this se!tio' the %/$er is hel& o'l$ to -oo& (aith a'& -oo& (aith !o'&/!t here/'&er is 'either a!!e+ta'!e 'or !o')ersio' 'or the %asis o( a' a!tio' (or &a#a-es. 2-,:1. "u!er;s 4ptions as to -al&a/e of %i/htfull! %e@ected 6oods. S/%6e!t to the +ro)isio's o( the i##e&iatel$ +re!e&i'- se!tio' o' +erisha%les i( the seller -i)es 'o i'str/!tio's 1ithi' a reaso'a%le ti#e a(ter 'oti(i!atio' o( re6e!tio' the %/$er #a$ store the re6e!te& -oo&s (or the sellerBs a!!o/'t or reshi+ the# to hi# or resell the# (or the sellerBs a!!o/'t 1ith rei#%/rse#e't as +ro)i&e& i' the +re!e&i'se!tio'. S/!h a!tio' is 'ot a!!e+ta'!e or !o')ersio'. 2-,:(. Wai&er of "u!er;s 40@ections 0! 7ailure to articulariAe. (1) The %/$erBs (ail/re to state i' !o''e!tio' 1ith re6e!tio' a +arti!/lar &e(e!t 1hi!h is as!ertai'a%le %$ reaso'a%le i's+e!tio' +re!l/&es hi# (ro# rel$i'- o' the /'state& &e(e!t to 6/sti($ re6e!tio' or to esta%lish %rea!h (a) 1here the seller !o/l& ha)e !/re& it i( state& seaso'a%l$4 or (%) %et1ee' #er!ha'ts 1he' the seller has a(ter re6e!tio' #a&e a re7/est i' 1riti'- (or a (/ll a'& (i'al 1ritte' state#e't o( all &e(e!ts o' 1hi!h the %/$er +ro+oses to rel$.

(*) Pa$#e't a-ai'st &o!/#e'ts #a&e 1itho/t reser)atio' o( ri-hts +re!l/&es re!o)er$ o( the +a$#e't (or &e(e!ts a++are't i' the &o!/#e'ts. 2-,:,. What Constitutes .cceptance of 6oods. (1) A!!e+ta'!e o( -oo&s o!!/rs 1he' the %/$er (a) a(ter a reaso'a%le o++ort/'it$ to i's+e!t the -oo&s si-'i(ies to the seller that the -oo&s are !o'(or#i'- or that he 1ill ta5e or retai' the# i' s+ite o( their 'o'!o'(or#it$4 or (%) (ails to #a5e a' e((e!ti)e re6e!tio' (s/%se!tio' (1) o( Se!tio' *-:0*)2 %/t s/!h a!!e+ta'!e &oes 'ot o!!/r /'til the %/$er has ha& a reaso'a%le o++ort/'it$ to i's+e!t the#4 or (!) &oes a'$ a!t i'!o'siste't 1ith the sellerBs o1'ershi+4 %/t i( s/!h a!t is 1ro'-(/l as a-ai'st the seller it is a' a!!e+ta'!e o'l$ i( rati(ie& %$ hi#. (*) A!!e+ta'!e o( a +art o( a'$ !o##er!ial /'it is a!!e+ta'!e o( that e'tire /'it. 2-,:7. Effect of .cceptance+ 5otice of "reach+ "urden of Esta0lishin/ "reach .fter .cceptance+ 5otice of Claim or *iti/ation to erson .ns<era0le 4&er. (1) The %/$er #/st +a$ at the !o'tra!t rate (or a'$ -oo&s a!!e+te&. (*) A!!e+ta'!e o( -oo&s %$ the %/$er +re!l/&es re6e!tio' o( the -oo&s a!!e+te& a'& i( #a&e 1ith 5'o1le&-e o( a 'o'-!o'(or#it$ !a''ot %e re)o5e& %e!a/se o( it /'less the a!!e+ta'!e 1as o' the reaso'a%le ass/#+tio' that the 'o'-!o'(or#it$ 1o/l& %e seaso'a%l$ !/re& %/t a!!e+ta'!e &oes 'ot o( itsel( i#+air a'$ other re#e&$ +ro)i&e& %$ this Arti!le (or 'o'-!o'(or#it$. (.) Chere a te'&er has %ee' a!!e+te& (a) the %/$er #/st 1ithi' a reaso'a%le ti#e a(ter he &is!o)ers or sho/l& ha)e &is!o)ere& a'$ %rea!h 'oti($ the seller o( %rea!h or %e %arre& (ro# a'$ re#e&$4 a'& (%) i( the !lai# is o'e (or i'(ri'-e#e't or the li5e (s/%se!tio' (.) o( Se!tio' *-.1*) a'& the %/$er is s/e& as a res/lt o( s/!h a %rea!h he #/st so 'oti($ the seller 1ithi' a reaso'a%le ti#e a(ter he re!ei)es 'oti!e o( the liti-atio' or %e %arre& (ro# a'$ re#e&$ o)er (or lia%ilit$ esta%lishe& %$ the liti-atio'. (8) The %/r&e' is o' the %/$er to esta%lish a'$ %rea!h 1ith res+e!t to the -oo&s a!!e+te&. (9) Chere the %/$er is s/e& (or %rea!h o( a 1arra't$ or other o%li-atio' (or 1hi!h his seller is a's1era%le o)er (a) he #a$ -i)e his seller 1ritte' 'oti!e o( the liti-atio'. I( the 'oti!e states that the seller #a$ !o#e i' a'& &e(e'& a'& that i( the seller &oes 'ot &o so he 1ill %e %o/'& i' a'$ a!tio' a-ai'st hi# %$ his %/$er %$ a'$ &eter#i'atio' o( (a!t !o##o' to the t1o liti-atio's2 the' /'less the seller a(ter seaso'a%le re!ei+t o( the 'oti!e &oes !o#e i' a'& &e(e'& he is so %o/'&. (%) i( the !lai# is o'e (or i'(ri'-e#e't or the li5e (s/%se!tio' (.) o( Se!tio' *-.1*) the ori-i'al seller #a$ &e#a'& i' 1riti'- that his %/$er t/r' o)er to hi# !o'trol o( the liti-atio' i'!l/&i'- settle#e't or else %e %arre& (ro# a'$ re#e&$ o)er a'& i( he also a-rees to %ear all e,+e'se a'& to satis($ a'$ a&)erse 6/&-#e't2 the' /'less the %/$er a(ter seaso'a%le re!ei+t o( the &e#a'& &oes t/r' o)er !o'trol the %/$er is so %arre&.

(:) The +ro)isio's o( s/%se!tio's (.)2 (8) a'& (9) a++l$ to a'$ o%li-atio' o( a %/$er to hol& the seller har#less a-ai'st i'(ri'-e#e't or the li5e (s/%se!tio' (.) o( Se!tio' *.1*). 2-,:8. %e&ocation of .cceptance in Whole or in art. (1) The %/$er #a$ re)o5e his a!!e+ta'!e o( a lot or !o##er!ial /'it 1hose 'o'!o'(or#it$ s/%sta'tiall$ i#+airs its )al/e to hi# i( he has a!!e+te& it (a) o' the reaso'a%le ass/#+tio' that its 'o'-!o'(or#it$ 1o/l& %e !/re& a'& it has 'ot %ee' seaso'a%l$ !/re&4 or (%) 1itho/t &is!o)er$ o( s/!h 'o'-!o'(or#it$ i( his a!!e+ta'!e 1as reaso'a%l$ i'&/!e& either %$ the &i((i!/lt$ o( &is!o)er$ %e(ore a!!e+ta'!e or %$ the sellerBs ass/ra'!es. (*) Re)o!atio' o( a!!e+ta'!e #/st o!!/r 1ithi' a reaso'a%le ti#e a(ter the %/$er &is!o)ers or sho/l& ha)e &is!o)ere& the -ro/'& (or it a'& %e(ore a'$ s/%sta'tial !ha'-e i' !o'&itio' o( the -oo&s 1hi!h is 'ot !a/se& %$ their o1' &e(e!ts. It is 'ot e((e!ti)e /'til the %/$er 'oti(ies the seller o( it. (.) A %/$er 1ho so re)o5es has the sa#e ri-hts a'& &/ties 1ith re-ar& to the -oo&s i')ol)e& as i( he ha& re6e!te& the#. (8) I( a %/$er /ses the -oo&s a(ter a ri-ht(/l re6e!tio' or 6/sti(ia%le re)o!atio' o( a!!e+ta'!e2 the (ollo1i'- r/les a++l$0 (a) A'$ /se %$ the %/$er that is /'reaso'a%le /'&er the !ir!/#sta'!es is 1ro'-(/l as a-ai'st the seller a'& is a' a!!e+ta'!e o'l$ i( rati(ie& %$ the seller. (%) A'$ /se o( the -oo&s that is reaso'a%le /'&er the !ir!/#sta'!es is 'ot 1ro'-(/l as a-ai'st the seller a'& is 'ot a' a!!e+ta'!e2 %/t i' a' a++ro+riate !ase the %/$er is o%li-ate& to the seller (or the )al/e o( the /se to the %/$er. 2-,:$. %i/ht to .deBuate .ssurance of erformance. (1) A !o'tra!t (or sale i#+oses a' o%li-atio' o' ea!h +art$ that the otherBs e,+e!tatio' o( re!ei)i'- &/e +er(or#a'!e 1ill 'ot %e i#+aire&. Che' reaso'a%le -ro/'&s (or i'se!/rit$ arise 1ith res+e!t to the +er(or#a'!e o( either +art$ the other #a$ i' 1riti'&e#a'& a&e7/ate ass/ra'!e o( &/e +er(or#a'!e a'& /'til he re!ei)es s/!h ass/ra'!e #a$ i( !o##er!iall$ reaso'a%le s/s+e'& a'$ +er(or#a'!e (or 1hi!h he has 'ot alrea&$ re!ei)e& the a-ree& ret/r'. (*) @et1ee' #er!ha'ts the reaso'a%le'ess o( -ro/'&s (or i'se!/rit$ a'& the a&e7/a!$ o( a'$ ass/ra'!e o((ere& shall %e &eter#i'e& a!!or&i'- to !o##er!ial sta'&ar&s. (.) A!!e+ta'!e o( a'$ i#+ro+er &eli)er$ or +a$#e't &oes 'ot +re6/&i!e the a--rie)e& +art$Bs ri-ht to &e#a'& a&e7/ate ass/ra'!e o( (/t/re +er(or#a'!e. (8) A(ter re!ei+t o( a 6/sti(ie& &e#a'& (ail/re to +ro)i&e 1ithi' a reaso'a%le ti#e 'ot e,!ee&i'- thirt$ &a$s s/!h ass/ra'!e o( &/e +er(or#a'!e as is a&e7/ate /'&er the !ir!/#sta'!es o( the +arti!/lar !ase is a re+/&iatio' o( the !o'tra!t. 2-,1:. .nticipator! %epudiation. Che' either +art$ re+/&iates the !o'tra!t 1ith res+e!t to a +er(or#a'!e 'ot $et &/e the loss o( 1hi!h 1ill s/%sta'tiall$ i#+air the )al/e o( the !o'tra!t to the other2 the a--rie)e& +art$ #a$ (a) (or a !o##er!iall$ reaso'a%le ti#e a1ait +er(or#a'!e %$ the re+/&iati'- +art$4 or

(%) resort to a'$ re#e&$ (or %rea!h (Se!tio' *-;0. or Se!tio' *-;11)2 e)e' tho/-h he has 'oti(ie& the re+/&iati'- +art$ that he 1o/l& a1ait the latterBs +er(or#a'!e a'& has /r-e& retra!tio'4 a'& (!) i' either !ase s/s+e'& his o1' +er(or#a'!e or +ro!ee& i' a!!or&a'!e 1ith the +ro)isio's o( this Arti!le o' the sellerBs ri-ht to i&e'ti($ -oo&s to the !o'tra!t 'ot1ithsta'&i'- %rea!h or to sal)a-e /'(i'ishe& -oo&s (Se!tio' *-;08). 2-,11. %etraction of .nticipator! %epudiation. (1) U'til the re+/&iati'- +art$Bs 'e,t +er(or#a'!e is &/e he !a' retra!t his re+/&iatio' /'less the a--rie)e& +art$ has si'!e the re+/&iatio' !a'!elle& or #ateriall$ !ha'-e& his +ositio' or other1ise i'&i!ate& that he !o'si&ers the re+/&iatio' (i'al. (*) Retra!tio' #a$ %e %$ a'$ #etho& 1hi!h !learl$ i'&i!ates to the a--rie)e& +art$ that the re+/&iati'- +art$ i'te'&s to +er(or#2 %/t #/st i'!l/&e a'$ ass/ra'!e 6/sti(ia%l$ &e#a'&e& /'&er the +ro)isio's o( this Arti!le (Se!tio' *-:0A). (.) Retra!tio' rei'states the re+/&iati'- +art$Bs ri-hts /'&er the !o'tra!t 1ith &/e e,!/se a'& allo1a'!e to the a--rie)e& +art$ (or a'$ &ela$ o!!asio'e& %$ the re+/&iatio'. 2-,12. )Installment contract)+ "reach. (1) A' ?i'stall#e't !o'tra!t? is o'e 1hi!h re7/ires or a/thori3es the &eli)er$ o( -oo&s i' se+arate lots to %e se+aratel$ a!!e+te&2 e)e' tho/-h the !o'tra!t !o'tai's a !la/se ?ea!h &eli)er$ is a se+arate !o'tra!t? or its e7/i)ale't. (*) The %/$er #a$ re6e!t a'$ i'stall#e't 1hi!h is 'o'-!o'(or#i'- i( the 'o'-!o'(or#it$ s/%sta'tiall$ i#+airs the )al/e o( that i'stall#e't a'& !a''ot %e !/re& or i( the 'o'!o'(or#it$ is a &e(e!t i' the re7/ire& &o!/#e'ts4 %/t i( the 'o'-!o'(or#it$ &oes 'ot (all 1ithi' s/%se!tio' (.) a'& the seller -i)es a&e7/ate ass/ra'!e o( its !/re the %/$er #/st a!!e+t that i'stall#e't. (.) Che'e)er 'o'-!o'(or#it$ or &e(a/lt 1ith res+e!t to o'e or #ore i'stall#e'ts s/%sta'tiall$ i#+airs the )al/e o( the 1hole !o'tra!t there is a %rea!h o( the 1hole. @/t the a--rie)e& +art$ rei'states the !o'tra!t i( he a!!e+ts a 'o'-!o'(or#i'- i'stall#e't 1itho/t seaso'a%l$ 'oti($i'- o( !a'!ellatio' or i( he %ri'-s a' a!tio' 1ith res+e!t o'l$ to +ast i'stall#e'ts or &e#a'&s +er(or#a'!e as to (/t/re i'stall#e'ts. 2-,13. Casualt! to Identified 6oods. Chere the !o'tra!t re7/ires (or its +er(or#a'!e -oo&s i&e'ti(ie& 1he' the !o'tra!t is #a&e2 a'& the -oo&s s/((er !as/alt$ 1itho/t (a/lt o( either +art$ %e(ore the ris5 o( loss +asses to the %/$er2 or i' a +ro+er !ase /'&er a ?'o arri)al2 'o sale? ter# (Se!tio' *.*8) the' (a) i( the loss is total the !o'tra!t is a)oi&e&4 a'& (%) i( the loss is +artial or the -oo&s ha)e so &eteriorate& as 'o lo'-er to !o'(or# to the !o'tra!t the %/$er #a$ 'e)ertheless &e#a'& i's+e!tio' a'& at his o+tio' either treat the !o'tra!t as a)oi&e& or a!!e+t the -oo&s 1ith &/e allo1a'!e (ro# the !o'tra!t +ri!e (or the &eterioratio' or the &e(i!ie'!$ i' 7/a'tit$ %/t 1itho/t (/rther ri-ht a-ai'st the seller. 2-,11. -u0stituted erformance. (1) Chere 1itho/t (a/lt o( either +art$ the a-ree& %erthi'-2 loa&i'-2 or /'loa&i'(a!ilities (ail or a' a-ree& t$+e o( !arrier %e!o#es /'a)aila%le or the a-ree& #a''er o(

&eli)er$ other1ise %e!o#es !o##er!iall$ i#+ra!ti!a%le %/t a !o##er!iall$ reaso'a%le s/%stit/te is a)aila%le2 s/!h s/%stit/te +er(or#a'!e #/st %e te'&ere& a'& a!!e+te&. (*) I( the a-ree& #ea's or #a''er o( +a$#e't (ails %e!a/se o( &o#esti! or (orei-' -o)er'#e'tal re-/latio'2 the seller #a$ 1ithhol& or sto+ &eli)er$ /'less the %/$er +ro)i&es a #ea's or #a''er o( +a$#e't 1hi!h is !o##er!iall$ a s/%sta'tial e7/i)ale't. I( &eli)er$ has alrea&$ %ee' ta5e'2 +a$#e't %$ the #ea's or i' the #a''er +ro)i&e& %$ the re-/latio' &is!har-es the %/$erBs o%li-atio' /'less the re-/latio' is &is!ri#i'ator$2 o++ressi)e or +re&ator$. 2-,1(. Excuse 0! 7ailure of resupposed Conditions. E,!e+t so (ar as a seller #a$ ha)e ass/#e& a -reater o%li-atio' a'& s/%6e!t to the +re!e&i'- se!tio' o' s/%stit/te& +er(or#a'!e0 (a) =ela$ i' &eli)er$ or 'o'-&eli)er$ i' 1hole or i' +art %$ a seller that !o#+lies 1ith +ara-ra+hs (%) a'& (!) is 'ot a %rea!h o( his &/t$ /'&er a !o'tra!t (or sale i( +er(or#a'!e as a-ree& has %ee' #a&e i#+ra!ti!a%le %$ the o!!/rre'!e o( a !o'ti'-e'!$ the 'o'-o!!/rre'!e o( 1hi!h 1as a %asi! ass/#+tio' o' 1hi!h the !o'tra!t 1as #a&e or %$ !o#+lia'!e i' -oo& (aith 1ith a'$ a++li!a%le (orei-' or &o#esti! -o)er'#e'tal re-/latio' or or&er 1hether or 'ot it later +ro)es to %e i')ali&. (%) Chere the !a/ses #e'tio'e& i' +ara-ra+h (a) a((e!t o'l$ a +art o( the sellerBs !a+a!it$ to +er(or#2 he #/st allo!ate +ro&/!tio' a'& &eli)eries a#o'- his !/sto#ers %/t #a$ at his o+tio' i'!l/&e re-/lar !/sto#ers 'ot the' /'&er !o'tra!t as 1ell as his o1' re7/ire#e'ts (or (/rther #a'/(a!t/re. De #a$ so allo!ate i' a'$ #a''er 1hi!h is (air a'& reaso'a%le. (!) The seller #/st 'oti($ the %/$er seaso'a%l$ that there 1ill %e &ela$ or 'o'-&eli)er$ a'&2 1he' allo!atio' is re7/ire& /'&er +ara-ra+h (%)2 o( the esti#ate& 7/ota th/s #a&e a)aila%le (or the %/$er. 2-,1,. rocedure on 5otice Claimin/ Excuse. (1) Chere the %/$er re!ei)es 'oti(i!atio' o( a #aterial or i'&e(i'ite &ela$ or a' allo!atio' 6/sti(ie& /'&er the +re!e&i'- se!tio' he #a$ %$ 1ritte' 'oti(i!atio' to the seller as to a'$ &eli)er$ !o'!er'e&2 a'& 1here the +ros+e!ti)e &e(i!ie'!$ s/%sta'tiall$ i#+airs the )al/e o( the 1hole !o'tra!t /'&er the +ro)isio's o( this Arti!le relati'- to %rea!h o( i'stall#e't !o'tra!ts (Se!tio' *-:1*)2 the' also as to the 1hole2 (a) ter#i'ate a'& there%$ &is!har-e a'$ /'e,e!/te& +ortio' o( the !o'tra!t4 or (%) #o&i($ the !o'tra!t %$ a-reei'- to ta5e his a)aila%le 7/ota i' s/%stit/tio'. (*) I( a(ter re!ei+t o( s/!h 'oti(i!atio' (ro# the seller the %/$er (ails so to #o&i($ the !o'tra!t 1ithi' a reaso'a%le ti#e 'ot e,!ee&i'- thirt$ &a$s the !o'tra!t la+ses 1ith res+e!t to a'$ &eli)eries a((e!te&. (.) The +ro)isio's o( this se!tio' #a$ 'ot %e 'e-ate& %$ a-ree#e't e,!e+t i' so (ar as the seller has ass/#e& a -reater o%li-atio' /'&er the +re!e&i'- se!tio'.s .%T 7. %E=E3IE 2-7:1. %emedies for "reach of Collateral contracts 5ot Impaired. Re#e&ies (or %rea!h o( a'$ o%li-atio' or +ro#ise !ollateral or a'!illar$ to a !o'tra!t (or sale are 'ot i#+aire& %$ the +ro)isio's o( this Arti!le. 2-7:2. -eller;s %emedies on 3isco&er! of "u!er;s Insol&enc!.

(1) Chere the seller &is!o)ers the %/$er to %e i'sol)e't he #a$ re(/se &eli)er$ e,!e+t (or !ash i'!l/&i'- +a$#e't (or all -oo&s thereto(ore &eli)ere& /'&er the !o'tra!t2 a'& sto+ &eli)er$ /'&er this Arti!le (Se!tio' *-;09). (*) Chere the seller &is!o)ers that the %/$er has re!ei)e& -oo&s o' !re&it 1hile i'sol)e't2 the seller #a$ re!lai# the -oo&s /+o' &e#a'& #a&e 1ithi' a reaso'a%le ti#e a(ter the %/$erBs re!ei+t o( the -oo&s. E,!e+t as +ro)i&e& i' this s/%se!tio'2 the seller #a$ 'ot %ase a ri-ht to re!lai# -oo&s o' the %/$erBs (ra/&/le't or i''o!e't #isre+rese'tatio' o( sol)e'!$ or o( i'te't to +a$. (.) The sellerBs ri-ht to re!lai# /'&er s/%se!tio' (*) is s/%6e!t to the ri-hts o( a %/$er i' or&i'ar$ !o/rse o( %/si'ess or other -oo& -(aith +/r!haser (or )al/e /'&er Se!tio' *80.. S/!!ess(/l re!la#atio' o( -oo&s e,!l/&es all other re#e&ies 1ith res+e!t to the#. 2-7:3. -eller;s %emedies in 6eneral. (1) A %rea!h o( !o'tra!t %$ the %/$er i'!l/&es the %/$erBs 1ro'-(/l re6e!tio' or 1ro'-(/l atte#+t to re)o5e a!!e+ta'!e o( -oo&s2 1ro'-(/l (ail/re to +er(or# a !o'tra!t/al o%li-atio'2 (ail/re to #a5e a +a$#e't 1he' &/e2 a'& re+/&iatio'. (*) I( the %/$er is i' %rea!h o( !o'tra!t the seller2 to the e,te't +ro)i&e& (or %$ this A!t or other la12 #a$0 (a) 1ithhol& &eli)er$ o( s/!h -oo&s4 (%) sto+ &eli)er$ o( the -oo&s /'&er Se!tio' *-;094 (!) +ro!ee& /'&er Se!tio' *-;08 1ith res+e!t to -oo&s /'i&e'ti(ie& to the !o'tra!t or /'(i'ishe&4 (&) re!lai# the -oo&s /'&er Se!tio' *-90;(*) or *-;0*(*)4 (e) re7/ire +a$#e't &ire!tl$ (ro# the %/$er /'&er Se!tio' *-.*9(!)4 (() !a'!el4 (-) resell a'& re!o)er &a#a-es /'&er Se!tio' *-;0:4 (h) re!o)er &a#a-es (or 'o'-a!!e+ta'!e or re+/&iatio' /'&er (Se!tio' *-;0<(1) or i' a +ro+er !ase the +ri!e (Se!tio' *-;0A)4 (6) re!o)er the +ri!e /'&er Se!tio' *-;0A4 (5) o%tai' s+e!i(i! +er(or#a'!e /'&er Se!tio' *-;1:4 (l) re!o)er li7/i&ate& &a#a-es /'&er Se!tio' *-;1<4 (#) i' other !ases2 re!o)er &a#a-es i' a'$ #a''er that is reaso'a%le /'&er the !ir!/#sta'!es. (.) I( the %/$er %e!o#es i'sol)e't2 the seller #a$0 (a) 1ithhol& &eli)er$ /'&er Se!tio' *-;0*(1)4 (%) sto+ &eli)er$ o( the -oo&s /'&er Se!tio' *-;094 (!) re!lai# the -oo&s /'&er Se!tio' *-;0*(*). 2-7:1. -eller;s %i/ht to Identif! 6oods to the Contract 5ot<ithstandin/ "reach or to -al&a/e 9nfinished 6oods. (1) A' a--rie)e& seller /'&er the +re!e&i'- se!tio' #a$ (a) i&e'ti($ to the !o'tra!t !o'(or#i'- -oo&s 'ot alrea&$ i&e'ti(ie& i( at the ti#e he lear'e& o( the %rea!h the$ are i' his +ossessio' or !o'trol4 (%) treat as the s/%6e!t o( resale -oo&s 1hi!h ha)e &e#o'stra%l$ %ee' i'te'&e& (or the +arti!/lar !o'tra!t e)e' tho/-h those -oo&s are /'(i'ishe&.

(*) Chere the -oo&s are /'(i'ishe& a' a--rie)e& seller #a$ i' the e,er!ise o( reaso'a%le !o##er!ial 6/&-#e't (or the +/r+oses o( a)oi&i'- loss a'& o( e((e!ti)e reali3atio' either !o#+lete the #a'/(a!t/re a'& 1holl$ i&e'ti($ the -oo&s to the !o'tra!t or !ease #a'/(a!t/re a'& resell (or s!ra+ or sal)a-e )al/e or +ro!ee& i' a'$ other reaso'a%le #a''er. *-;09. SellerBs Sto++a-e o( =eli)er$ i' Tra'sit or Other1ise. (1) The seller #a$ sto+ &eli)er$ o( -oo&s i' the +ossessio' o( a !arrier or other %ailee 1he' he &is!o)ers the %/$er to %e i'sol)e't (Se!tio' *-;0*) or i( the %/$er re+/&iates or (ails to #a5e a +a$#e't &/e %e(ore &eli)er$ or i( (or a'$ other reaso' the seller has a ri-ht to 1ithhol& or re!lai# the -oo&s. (*) As a-ai'st s/!h %/$er the seller #a$ sto+ &eli)er$ /'til (a) re!ei+t o( the -oo&s %$ the %/$er4 or (%) a!5'o1le&-#e't to the %/$er %$ a'$ %ailee o( the -oo&s e,!e+t a !arrier that the %ailee hol&s the -oo&s (or the %/$er4 or (!) s/!h a!5'o1le&-#e't to the %/$er %$ a !arrier %$ reshi+#e't or as a 1areho/se4 or (&) 'e-otiatio' to the %/$er o( a'$ 'e-otia%le &o!/#e't o( title !o)eri'- the -oo&s. (.)(a) To sto+ &eli)er$ the seller #/st so 'oti($ as to e'a%le the %ailee %$ reaso'a%le &ili-e'!e to +re)e't &eli)er$ o( the -oo&s. (%) A(ter s/!h 'oti(i!atio' the %ailee #/st hol& a'& &eli)er the -oo&s a!!or&i'- to the &ire!tio's o( the seller %/t the seller is lia%le to the %ailee (or a'$ e's/i'- !har-es or &a#a-es. (!) I( a 'e-otia%le &o!/#e't o( title has %ee' iss/e& (or -oo&s the %ailee is 'ot o%li-e& to o%e$ a 'oti(i!atio' to sto+ /'til s/rre'&er o( +ossessio' or !o'trol o( the &o!/#e't. (&) A !arrier that has iss/e& a 'o'-'e-otia%le %ill o( la&i'- is 'ot o%li-e& to o%e$ a 'oti(i!atio' to sto+ re!ei)e& (ro# a +erso' other tha' the !o'si-'or. 2-7:,. -eller;s %esale Includin/ Contract for %esale. (1) U'&er the !o'&itio's state& i' Se!tio' *-;0. o' sellerBs re#e&ies2 the seller #a$ resell the -oo&s !o'!er'e& or the /'&eli)ere& %ala'!e thereo(. Chere the resale is #a&e i' -oo& (aith a'& i' a !o##er!iall$ reaso'a%le #a''er the seller #a$ re!o)er the &i((ere'!e %et1ee' the resale +ri!e a'& the !o'tra!t +ri!e to-ether 1ith a'$ i'!i&e'tal &a#a-es allo1e& /'&er the +ro)isio's o( this Arti!le (Se!tio' *-;10)2 %/t less e,+e'ses sa)e& i' !o'se7/e'!e o( the %/$erBs %rea!h. (*) E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (.) or /'less other1ise a-ree& resale #a$ %e at +/%li! or +ri)ate sale i'!l/&i'- sale %$ 1a$ o( o'e or #ore !o'tra!ts to sell or o( i&e'ti(i!atio' to a' e,isti'- !o'tra!t o( the seller. Sale #a$ %e as a /'it or i' +ar!els a'& at a'$ ti#e a'& +la!e a'& o' a'$ ter#s %/t e)er$ as+e!t o( the sale i'!l/&i'- the #etho&2 #a''er2 ti#e2 +la!e a'& ter#s #/st %e !o##er!iall$ reaso'a%le. The resale #/st %e reaso'a%l$ i&e'ti(ie& as re(erri'- to the %ro5e' !o'tra!t2 %/t it is 'ot 'e!essar$ that the -oo&s %e i' e,iste'!e or that a'$ or all o( the# ha)e %ee' i&e'ti(ie& to the !o'tra!t %e(ore the %rea!h. (.) Chere the resale is at +ri)ate sale the seller #/st -i)e the %/$er reaso'a%le 'oti(i!atio' o( his i'te'tio' to resell. (8) Chere the resale is at +/%li! sale

(a) o'l$ i&e'ti(ie& -oo&s !a' %e sol& e,!e+t 1here there is a re!o-'i3e& #ar5et (or a +/%li! sale o( (/t/res i' -oo&s o( the 5i'&4 a'& (%) it #/st %e #a&e at a /s/al +la!e or #ar5et (or +/%li! sale i( o'e is reaso'a%l$ a)aila%le a'& e,!e+t i' the !ase o( -oo&s 1hi!h are +erisha%le or threate' to &e!li'e i' )al/e s+ee&il$ the seller #/st -i)e the %/$er reaso'a%le 'oti!e o( the ti#e a'& +la!e o( the resale4 a'& (!) i( the -oo&s are 'ot to %e 1ithi' the )ie1 o( those atte'&i'- the sale the 'oti(i!atio' o( sale #/st state the +la!e 1here the -oo&s are lo!ate& a'& +ro)i&e (or their reaso'a%le i's+e!tio' %$ +ros+e!ti)e %i&&ers4 a'& (&) the seller #a$ %/$. (9) A +/r!haser that %/$s i' -oo& (aith at a resale ta5es the -oo&s (ree o( a'$ ri-hts o( the ori-i'al %/$er e)e' tho/-h the seller (ails to !o#+l$ 1ith o'e or #ore o( the re7/ire#e'ts o( this se!tio'. (:) The seller is 'ot a!!o/'ta%le to the %/$er (or a'$ +ro(it #a&e o' a'$ resale. A +erso' i' the +ositio' o( a seller (Se!tio' *-;0;) or a %/$er that has ri-ht(/ll$ re6e!te& or 6/sti(ia%l$ re)o5e& a!!e+ta'!e #/st a!!o/'t (or a'$ e,!ess o)er the a#o/'t o( his se!/rit$ i'terest2 as herei'a(ter &e(i'e& (s/%se!tio' (.) o( Se!tio' *-;11). 2-7:7. ) erson in the osition of a -eller). (1) A ?+erso' i' the +ositio' o( a seller? i'!l/&es as a-ai'st a +ri'!i+al a' a-e't that has +ai& or %e!o#e res+o'si%le (or the +ri!e o( -oo&s o' %ehal( o( his +ri'!i+al or a'$o'e that other1ise hol&s a se!/rit$ i'terest or other ri-ht i' -oo&s si#ilar to that o( a seller. (*) A +erso' i' the +ositio' o( a seller has the sa#e re#e&ies as a seller /'&er this Arti!le. 2-7:8. -eller;s 3ama/es for 5on-acceptance or %epudiation. (1) S/%6e!t to s/%se!tio' (*) a'& to Se!tio' *-;*.0 (a) the #eas/re o( &a#a-es (or 'o'a!!e+ta'!e %$ the %/$er is the &i((ere'!e %et1ee' the !o'tra!t +ri!e a'& the #ar5et +ri!e at the ti#e a'& +la!e (or te'&er to-ether 1ith a'$ i'!i&e'tal or !o'se7/e'tial &a#a-es +ro)i&e& i' Se!tio' *-;102 %/t less e,+e'ses sa)e& i' !o'se7/e'!e o( the %/$erBs %rea!h4 a'& (%) the #eas/re o( &a#a-es (or re+/&iatio' %$ the %/$er is the &i((ere'!e %et1ee' the !o'tra!t +ri!e a'& the #ar5et +ri!e at the +la!e (or te'&er at the e,+iratio' o( a !o##er!iall$ reaso'a%le ti#e a(ter the seller lear'e& o( the re+/&iatio'2 %/t 'o later tha' the ti#e state& i' +ara-ra+h (a)2 to-ether 1ith a'$ i'!i&e'tal or !o'se7/e'tial &a#a-es +ro)i&e& i' Se!tio' *-;102 less e,+e'ses sa)e& i' !o'se7/e'!e o( the %/$erBs %rea!h. (*) I( the #eas/re o( &a#a-es +ro)i&e& i' s/%se!tio' (1) is i'a&e7/ate to +/t the seller i' as -oo& a +ositio' as +er(or#a'!e 1o/l& ha)e &o'e the' the #eas/re o( &a#a-es is the +ro(it (i'!l/&i'- reaso'a%le o)erhea&) 1hi!h the seller 1o/l& ha)e #a&e (ro# (/ll +er(or#a'!e %$ the %/$er2 to-ether 1ith a'$ i'!i&e'tal &a#a-es +ro)i&e& i' this Arti!le (Se!tio' *-;10)2 &/e allo1a'!e (or !osts reaso'a%l$ i'!/rre& a'& &/e !re&it (or +a$#e'ts or +ro!ee&s o( resale. 2-7:$. .ction for the rice. (1) Che' the %/$er (ails to +a$ the +ri!e as it %e!o#es &/e the seller #a$ re!o)er2 to-ether 1ith a'$ i'!i&e'tal &a#a-es /'&er the 'e,t se!tio'2 the +ri!e

(a) o( -oo&s a!!e+te& or o( !o'(or#i'- -oo&s lost or &a#a-e& 1ithi' a !o##er!iall$ reaso'a%le ti#e a(ter ris5 o( their loss has +asse& to the %/$er4 a'& (%) o( -oo&s i&e'ti(ie& to the !o'tra!t i( the seller is /'a%le a(ter reaso'a%le e((ort to resell the# at a reaso'a%le +ri!e or the !ir!/#sta'!es reaso'a%l$ i'&i!ate that s/!h e((ort 1ill %e /'a)aili'-. (*) Chere the seller s/es (or the +ri!e he #/st hol& (or the %/$er a'$ -oo&s 1hi!h ha)e %ee' i&e'ti(ie& to the !o'tra!t a'& are still i' his !o'trol e,!e+t that i( resale %e!o#es +ossi%le he #a$ resell the# at a'$ ti#e +rior to the !olle!tio' o( the 6/&-#e't. The 'et +ro!ee&s o( a'$ s/!h resale #/st %e !re&ite& to the %/$er a'& +a$#e't o( the 6/&-#e't e'titles hi# to a'$ -oo&s 'ot resol&. (.) A(ter the %/$er has 1ro'-(/ll$ re6e!te& or re)o5e& a!!e+ta'!e o( the -oo&s or has (aile& to #a5e a +a$#e't &/e or has re+/&iate& (Se!tio' *-:10)2 a seller that is hel& 'ot e'title& to the +ri!e /'&er this se!tio' shall 'e)ertheless %e a1ar&e& &a#a-es (or 'o'-a!!e+ta'!e /'&er the +re!e&i'- se!tio'. 2-71:. -eller;s Incidental 3ama/es. (1) I'!i&e'tal &a#a-es to a' a--rie)e& seller i'!l/&e a'$ !o##er!iall$ reaso'a%le !har-es2 e,+e'ses or !o##issio's i'!/rre& i' sto++i'- &eli)er$2 i' the tra's+ortatio'2 !are a'& !/sto&$ o( -oo&s a(ter the %/$erBs %rea!h2 i' !o''e!tio' 1ith ret/r' or resale o( the -oo&s or other1ise res/lti'- (ro# the %rea!h. (*) Co'se7/e'tial &a#a-es res/lti'- (ro# the %/$erBs %rea!h i'!l/&e a'$ loss res/lti'(ro# -e'eral or +arti!/lar re7/ire#e'ts a'& 'ee&s o( 1hi!h the %/$er at the ti#e o( !o'tra!ti'- ha& reaso' to 5'o1 a'& 1hi!h !o/l& 'ot reaso'a%l$ %e +re)e'te& %$ resale or other1ise. (.) I' a !o's/#er !o'tra!t2 a seller #a$ 'ot re!o)er !o'se7/e'tial &a#a-es (ro# a !o's/#er. 2-711. "u!er;s %emedies in 6eneral+ "u!er;s -ecurit! Interest in %e@ected 6oods. (1) A %rea!h o( !o'tra!t %$ the seller i'!l/&es the sellerBs 1ro'-(/l (ail/re to &eli)er or to +er(or# a !o'tra!t/al o%li-atio'2 #a5i'- o( a 'o'!o'(or#i'- te'&er o( &eli)er$ or +er(or#a'!e2 a'& re+/&iatio'. (*) I( the seller is i' %rea!h o( !o'tra!t /'&er s/%se!tio' (1)2 the %/$er2 to the e,te't +ro)i&e& (or %$ this A!t or other la12 #a$0 (a) i' the !ase o( ri-ht(/l !a'!ellatio'2 ri-ht(/l re6e!tio'2 or 6/sti(ia%le re)o!atio' o( a!!e+ta'!e2 re!o)er so #/!h o( the +ri!e as has %ee' +ai&4 (%) &e&/!t &a#a-es (ro# a'$ +art o( the +ri!e still &/e /'&er Se!tio' *-;1;4 (!) !a'!el4 (&) !o)er a'& ha)e &a#a-es /'&er Se!tio' *-;1* as to all -oo&s a((e!te& 1hether or 'ot the$ ha)e %ee' i&e'ti(ie& to the !o'tra!t4 (e) re!o)er &a#a-es (or 'o'&eli)er$ or re+/&iatio' /'&er Se!tio' *-;1.4 (() re!o)er &a#a-es (or %rea!h 1ith re-ar& to a!!e+te& -oo&s or %rea!h 1ith re-ar& to a re#e&ial +ro#ise /'&er Se!tio' *-;184 (-) re!o)er i&e'ti(ie& -oo&s /'&er Se!tio' *-90*4 (h) o%tai' s+e!i(i! +er(or#a'!e or o%tai' the -oo&s %$ re+le)i' or si#ilar re#e&$ /'&er Se!tio' *-;1:4

(i) re!o)er li7/i&ate& &a#a-es /'&er Se!tio' *-;1<4 (6) i' other !ases2 re!o)er &a#a-es i' a'$ #a''er that is reaso'a%le /'&er the !ir!/#sta'!es. (.) O' ri-ht(/l re6e!tio' or 6/sti(ia%le re)o!atio' o( a!!e+ta'!e a %/$er has a se!/rit$ i'terest i' -oo&s i' his +ossessio' or !o'trol (or a'$ +a$#e'ts #a&e o' their +ri!e a'& a'$ e,+e'ses reaso'a%l$ i'!/rre& i' their i's+e!tio'2 re!ei+t2 tra's+ortatio'2 !are a'& !/sto&$ a'& #a$ hol& s/!h -oo&s a'& resell the# i' li5e #a''er as a' a--rie)e& seller (Se!tio' *-;0:). 2-712. )Co&er)+ "u!er;s rocurement of -u0stitute 6oods. (1) I( the seller 1ro'-(/ll$ (ails to &eli)er or re+/&iates or the %/$er ri-ht(/ll$ re6e!ts or 6/sti(ia%l$ re)o5es a!!e+ta'!e2 the %/$er #a$ ?!o)er? %$ #a5i'- i' -oo& (aith a'& 1itho/t /'reaso'a%le &ela$ a'$ reaso'a%le +/r!hase o( or !o'tra!t to +/r!hase -oo&s i' s/%stit/tio' (or those &/e (ro# the seller. (*) The %/$er #a$ re!o)er (ro# the seller as &a#a-es the &i((ere'!e %et1ee' the !ost o( !o)er a'& the !o'tra!t +ri!e to-ether 1ith a'$ i'!i&e'tal or !o'se7/e'tial &a#a-es as herei'a(ter &e(i'e& (Se!tio' *-;19)2 %/t less e,+e'ses sa)e& i' !o'se7/e'!e o( the sellerBs %rea!h. (.) >ail/re o( the %/$er to e((e!t !o)er 1ithi' this se!tio' &oes 'ot %ar hi# (ro# a'$ other re#e&$. 2-713. "u!er;s 3ama/es for 5on-deli&er! or %epudiation. (1) S/%6e!t to Se!tio' *-;*.2 i( the seller 1ro'-(/ll$ (ails to &eli)er or re+/&iates or the %/$er ri-ht(/ll$ re6e!ts or 6/sti(ia%l$ re)o5es a!!e+ta'!e0 (a) the #eas/re o( &a#a-es i' the !ase o( 1ro'-(/l (ail/re to &eli)er %$ the seller or ri-ht(/l re6e!tio' or 6/sti(ia%le re)o!atio' o( a!!e+ta'!e %$ the %/$er is the &i((ere'!e %et1ee' the #ar5et +ri!e at the ti#e (or te'&er /'&er the !o'tra!t a'& the !o'tra!t +ri!e to-ether 1ith a'$ i'!i&e'tal or !o'se7/e'tial &a#a-es /'&er Se!tio' *-;192 %/t less e,+e'ses sa)e& i' !o'se7/e'!e o( the sellerBs %rea!h4 a'& (%) the #eas/re o( &a#a-es (or re+/&iatio' %$ the seller is the &i((ere'!e %et1ee' the #ar5et +ri!e at the e,+iratio' o( a !o##er!iall$ reaso'a%le ti#e a(ter the %/$er lear'e& o( the re+/&iatio'2 %/t 'o later tha' the ti#e state& i' +ara-ra+h (a)2 a'& the !o'tra!t +ri!e to-ether 1ith a'$ i'!i&e'tal or !o'se7/e'tial &a#a-es +ro)i&e& i' this Arti!le (Se!tio' *--;19)2 less e,+e'ses sa)e& i' !o'se7/e'!e o( the sellerBs %rea!h. (*) Ear5et +ri!e is to %e &eter#i'e& as o( the +la!e (or te'&er or2 i' !ases o( re6e!tio' a(ter arri)al or re)o!atio' o( a!!e+ta'!e2 as o( the +la!e o( arri)al. 2-711. "u!er;s 3ama/es for "reach in %e/ard to .ccepted 6oods. (1) Chere the %/$er has a!!e+te& -oo&s a'& -i)e' 'oti(i!atio' (s/%se!tio' (.) o( Se!tio' *-:0;) he #a$ re!o)er as &a#a-es (or a'$ 'o'-!o'(or#it$ o( te'&er the loss res/lti'- i' the or&i'ar$ !o/rse o( e)e'ts (ro# the sellerBs %rea!h as &eter#i'e& i' a'$ #a''er 1hi!h is reaso'a%le. (*) The #eas/re o( &a#a-es (or %rea!h o( 1arra't$ is the &i((ere'!e at the ti#e a'& +la!e o( a!!e+ta'!e %et1ee' the )al/e o( the -oo&s a!!e+te& a'& the )al/e the$ 1o/l& ha)e ha& i( the$ ha& %ee' as 1arra'te&2 /'less s+e!ial !ir!/#sta'!es sho1 +ro,i#ate &a#a-es o( a &i((ere't a#o/'t.

(.) I' a +ro+er !ase a'$ i'!i&e'tal a'& !o'se7/e'tial &a#a-es /'&er the 'e,t se!tio' #a$ also %e re!o)ere&. 2-71(. "u!er;s Incidental and ConseBuential 3ama/es. (1) I'!i&e'tal &a#a-es res/lti'- (ro# the sellerBs %rea!h i'!l/&e e,+e'ses reaso'a%l$ i'!/rre& i' i's+e!tio'2 re!ei+t2 tra's+ortatio' a'& !are a'& !/sto&$ o( -oo&s ri-ht(/ll$ re6e!te&2 a'$ !o##er!iall$ reaso'a%le !har-es2 e,+e'ses or !o##issio's i' !o''e!tio' 1ith e((e!ti'- !o)er a'& a'$ other reaso'a%le e,+e'se i'!i&e't to the &ela$ or other %rea!h. (*) Co'se7/e'tial &a#a-es res/lti'- (ro# the sellerBs %rea!h i'!l/&e (a) a'$ loss res/lti'- (ro# -e'eral or +arti!/lar re7/ire#e'ts a'& 'ee&s o( 1hi!h the seller at the ti#e o( !o'tra!ti'- ha& reaso' to 5'o1 a'& 1hi!h !o/l& 'ot reaso'a%l$ %e +re)e'te& %$ !o)er or other1ise4 a'& (%) i'6/r$ to +erso' or +ro+ert$ +ro,i#atel$ res/lti'- (ro# a'$ %rea!h o( 1arra't$. 2-71,. "u!er;s %i/ht to -pecific erformance or %eple&in. (1) S+e!i(i! +er(or#a'!e #a$ %e &e!ree& i( the -oo&s are /'i7/e or i' other +ro+er !ir!/#sta'!es. I' a !o'tra!t other tha' a !o's/#er !o'tra!t2 s+e!i(i! +er(or#a'!e #a$ %e &e!ree& i( the +arties ha)e a-ree& to that re#e&$. Do1e)er2 e)e' i( the +arties a-ree to s+e!i(i! +er(or#a'!e2 s+e!i(i! +er(or#a'!e #a$ 'ot %e &e!ree& i( the %rea!hi'+art$Bs sole re#ai'i'- !o'tra!t/al o%li-atio' is the +a$#e't o( #o'e$. (*) The &e!ree (or s+e!i(i! +er(or#a'!e #a$ i'!l/&e s/!h ter#s a'& !o'&itio's as to +a$#e't o( the +ri!e2 &a#a-es2 or other relie( as the !o/rt #a$ &ee# 6/st. (.) The %/$er has a ri-ht o( re+le)i' or si#ilar re#e&$ (or -oo&s i&e'ti(ie& to the !o'tra!t i( a(ter reaso'a%le e((ort the %/$er is /'a%le to e((e!t !o)er (or s/!h -oo&s or the !ir!/#sta'!es reaso'a%l$ i'&i!ate that s/!h e((ort 1ill %e /'a)aili'- or i( the -oo&s ha)e %ee' shi++e& /'&er reser)atio' a'& satis(a!tio' o( the se!/rit$ i'terest i' the# has %ee' #a&e or te'&ere&. (8) The %/$erBs ri-ht /'&er s/%se!tio' (.) )ests /+o' a!7/isitio' o( a s+e!ial +ro+ert$2 e)e' i( the seller ha& 'ot the' re+/&iate& or (aile& to &eli)er. 2-717. 3eduction of 3ama/es 7rom the rice. The %/$er o' 'oti($i'- the seller o( his i'te'tio' to &o so #a$ &e&/!t all or a'$ +art o( the &a#a-es res/lti'- (ro# a'$ %rea!h o( the !o'tra!t (ro# a'$ +art o( the +ri!e still &/e /'&er the sa#e !o'tra!t. 2-718. *iBuidation or *imitation of 3ama/es+ 3eposits. (1) =a#a-es (or %rea!h %$ either +art$ #a$ %e li7/i&ate& i' the a-ree#e't %/t o'l$ at a' a#o/'t 1hi!h is reaso'a%le i' the li-ht o( the a'ti!i+ate& or a!t/al har# !a/se& %$ the %rea!h2 the &i((i!/lties o( +roo( o( loss2 a'& the i'!o')e'ie'!e or 'o'(easi%ilit$ o( other1ise o%tai'i'- a' a&e7/ate re#e&$. Se!tio' *-;1A &eter#i'es the e'(or!ea%ilit$ o( a ter# that li#its %/t &oes 'ot li7/i&ate &a#a-es. (*) I( the seller 6/sti(ia%l$ 1ithhol&s &eli)er$ o( -oo&s or sto+s +er(or#a'!e %e!a/se o( the %/$erBs %rea!h or i'sol)e'!$2 the %/$er is e'title& to restit/tio' o( a'$ a#o/'t %$ 1hi!h the s/# o( the %/$erBs +a$#e'ts e,!ee&s the a#o/'t to 1hi!h the seller is e'title& %$ )irt/e o( ter#s li7/i&ati'- the sellerBs &a#a-es i' a!!or&a'!e 1ith s/%se!tio' (1)

(a) the a#o/'t to 1hi!h the seller is e'title& %$ )irt/e o( ter#s li7/i&ati'- the sellerBs &a#a-es i' a!!or&a'!e 1ith s/%se!tio' (1)2 or (%) i' the a%se'!e o( s/!h ter#s2 t1e't$ +er !e't o( the )al/e o( the total +er(or#a'!e (or 1hi!h the %/$er is o%li-ate& /'&er the !o'tra!t or I9002 1hi!he)er is s#aller. (.) The %/$erBs ri-ht to restit/tio' /'&er s/%se!tio' (*) is s/%6e!t to o((set to the e,te't that the seller esta%lishes0 (a) a ri-ht to re!o)er &a#a-es /'&er the +ro)isio's o( this Arti!le other tha' s/%se!tio' (1)2 a'& (%) the a#o/'t or )al/e o( a'$ %e'e(its re!ei)e& %$ the %/$er &ire!tl$ or i'&ire!tl$ %$ reaso' o( the !o'tra!t. (8) Chere a seller has re!ei)e& +a$#e't i' -oo&s their reaso'a%le )al/e or the +ro!ee&s o( their resale shall %e treate& as +a$#e'ts (or the +/r+oses o( s/%se!tio' (*)4 %/t i( the seller has 'oti!e o( the %/$erBs %rea!h %e(ore reselli'- -oo&s re!ei)e& i' +art +er(or#a'!e2 his resale is s/%6e!t to the !o'&itio's lai& &o1' i' this Arti!le o' resale %$ a' a--rie)e& seller (Se!tio' *-;0:). 2-71$. Contractual =odification or *imitation of %emed!. (1) S/%6e!t to the +ro)isio's o( s/%se!tio's (*) a'& (.) o( this se!tio' a'& o( the +re!e&i'- se!tio' o' li7/i&atio' a'& li#itatio' o( &a#a-es2 (a) the a-ree#e't #a$ +ro)i&e (or re#e&ies i' a&&itio' to or i' s/%stit/tio' (or those +ro)i&e& i' this Arti!le a'& #a$ li#it or alter the #eas/re o( &a#a-es re!o)era%le /'&er this Arti!le2 as %$ li#iti'- the %/$erBs re#e&ies to ret/r' o( the -oo&s a'& re+a$#e't o( the +ri!e or to re+air a'& re+la!e#e't o( 'o'-!o'(or#i'- -oo&s or +arts4 a'& (%) resort to a re#e&$ as +ro)i&e& is o+tio'al /'less the re#e&$ is e,+ressl$ a-ree& to %e e,!l/si)e2 i' 1hi!h !ase it is the sole re#e&$. (*) Chere !ir!/#sta'!es !a/se a' e,!l/si)e or li#ite& re#e&$ to (ail o( its esse'tial +/r+ose2 re#e&$ #a$ %e ha& as +ro)i&e& i' this A!t. (.) Co'se7/e'tial &a#a-es #a$ %e li#ite& or e,!l/&e& /'less the li#itatio' or e,!l/sio' is /'!o's!io'a%le. Li#itatio' o( !o'se7/e'tial &a#a-es (or i'6/r$ to the +erso' i' the !ase o( !o's/#er -oo&s is +ri#a (a!ie /'!o's!io'a%le %/t li#itatio' o( &a#a-es 1here the loss is !o##er!ial is 'ot. 2-72:. Effect of )Cancellation) or )%escission) on Claims for .ntecedent "reach. U'less the !o'trar$ i'te'tio' !learl$ a++ears2 e,+ressio's o( ?!a'!ellatio'? or ?res!issio'? o( the !o'tra!t or the li5e shall 'ot %e !o'str/e& as a re'/'!iatio' or &is!har-e o( a'$ !lai# i' &a#a-es (or a' a'te!e&e't %rea!h. 2-721. %emedies for 7raud. Re#e&ies (or #aterial #isre+rese'tatio' or (ra/& i'!l/&e all re#e&ies a)aila%le /'&er this Arti!le (or 'o'-(ra/&/le't %rea!h. Neither res!issio' or a !lai# (or res!issio' o( the !o'tra!t (or sale 'or re6e!tio' or ret/r' o( the -oo&s shall %ar or %e &ee#e& i'!o'siste't 1ith a !lai# (or &a#a-es or other re#e&$. 2-722. Who Can -ue Third arties for In@ur! to 6oods. Chere a thir& +art$ so &eals 1ith -oo&s 1hi!h ha)e %ee' i&e'ti(ie& to a !o'tra!t (or sale as to !a/se a!tio'a%le i'6/r$ to a +art$ to that !o'tra!t

(a) a ri-ht o( a!tio' a-ai'st the thir& +art$ is i' either +art$ to the !o'tra!t (or sale that has title to or a se!/rit$ i'terest or a s+e!ial +ro+ert$ or a' i's/ra%le i'terest i' the -oo&s4 a'& i( the -oo&s ha)e %ee' &estro$e& or !o')erte& a ri-ht o( a!tio' is also i' the +art$ that either %ore the ris5 o( loss /'&er the !o'tra!t (or sale or has si'!e the i'6/r$ ass/#e& that ris5 as a-ai'st the other4 (%) i( at the ti#e o( the i'6/r$ the +art$ +lai'ti(( &i& 'ot %ear the ris5 o( loss as a-ai'st the other +art$ to the !o'tra!t (or sale a'& there is 'o arra'-e#e't %et1ee' the# (or &is+ositio' o( the re!o)er$2 his s/it or settle#e't is2 s/%6e!t to his o1' i'terest2 as a (i&/!iar$ (or the other +art$ to the !o'tra!t4 (!) either +art$ #a$ 1ith the !o'se't o( the other s/e (or the %e'e(it o( 1hi!h it #a$ !o'!er'. 2-723. roof of =ar>et riceC Time and lace. (1) I( e)i&e'!e o( a +ri!e +re)aili'- at the ti#es or +la!es &es!ri%e& i' this Arti!le is 'ot rea&il$ a)aila%le the +ri!e +re)aili'- 1ithi' a'$ reaso'a%le ti#e %e(ore or a(ter the ti#e &es!ri%e& or at a'$ other +la!e 1hi!h i' !o##er!ial 6/&-#e't or /'&er /sa-e o( tra&e 1o/l& ser)e as a reaso'a%le s/%stit/te (or the o'e &es!ri%e& #a$ %e /se&2 #a5i'- a'$ +ro+er allo1a'!e (or the !ost o( tra's+orti'- the -oo&s to or (ro# s/!h other +la!e. (*) E)i&e'!e o( a rele)a't +ri!e +re)aili'- at a ti#e or +la!e other tha' the o'e &es!ri%e& i' this Arti!le o((ere& %$ o'e +art$ is 'ot a&#issi%le /'less a'& /'til he has -i)e' the other +art$ s/!h 'oti!e as the !o/rt (i'&s s/((i!ie't to +re)e't /'(air s/r+rise. 2-721. .dmissi0ilit! of =ar>et Duotations. Che'e)er the +re)aili'- +ri!e or )al/e o( a'$ -oo&s re-/larl$ %o/-ht a'& sol& i' a'$ esta%lishe& !o##o&it$ #ar5et is i' iss/e2 re+orts i' o((i!ial +/%li!atio's or tra&e 6o/r'als or i' 'e1s+a+ers or +erio&i!als o( -e'eral !ir!/latio' +/%lishe& as the re+orts o( s/!h #ar5et shall %e a&#issi%le i' e)i&e'!e. The !ir!/#sta'!es o( the +re+aratio' o( s/!h a re+ort #a$ %e sho1' to a((e!t its 1ei-ht %/t 'ot its a&#issi%ilit$. 2-72(. -tatute of *imitations in Contracts for -ale. (1) E,!e+t as other1ise +ro)i&e& i' this se!tio'2 a' a!tio' (or %rea!h o( a'$ !o'tra!t (or sale #/st %e !o##e'!e& 1ithi' the later o( (o/r $ears a(ter the ri-ht o( a!tio' has a!!r/e& /'&er s/%se!tio' (*) or (.) or o'e $ear a(ter the %rea!h 1as or sho/l& ha)e %ee' &is!o)ere&2 %/t 'o lo'-er tha' (i)e $ears a(ter the ri-ht o( a!tio' a!!r/e&. @$ the ori-i'al a-ree#e't the +arties #a$ re&/!e the +erio& o( li#itatio' to 'ot less tha' o'e $ear %/t #a$ 'ot e,te'& it. Do1e)er2 i' a !o's/#er !o'tra!t2 the +erio& o( li#itatio' #a$ 'ot %e re&/!e&. (*) E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (.)2 the (ollo1i'- r/les a++l$0 (a) E,!e+t as other1ise +ro)i&e& i' this s/%se!tio'2 a ri-ht o( a!tio' (or %rea!h o( a !o'tra!t a!!r/es 1he' the %rea!h o!!/rs2 e)e' i( the a--rie)e& +art$ &i& 'ot ha)e 5'o1le&-e o( the %rea!h. (%) >or %rea!h o( a !o'tra!t %$ re+/&iatio'2 a ri-ht o( a!tio' a!!r/es at the earlier o( 1he' the a--rie)e& +art$ ele!ts to treat the re+/&iatio' as a %rea!h or 1he' a !o##er!iall$ reaso'a%le ti#e (or a1aiti'- +er(or#a'!e has e,+ire&. (!) >or %rea!h o( a re#e&ial +ro#ise2 a ri-ht o( a!tio' a!!r/es 1he' the re#e&ial +ro#ise is 'ot +er(or#e& 1he' +er(or#a'!e is &/e.

(&) I' a' a!tio' %$ a %/$er a-ai'st a +erso' that is a's1era%le o)er to the %/$er (or a !lai# asserte& a-ai'st the %/$er2 the %/$erBs ri-ht o( a!tio' a-ai'st the +erso' a's1era%le o)er a!!r/es at the ti#e the !lai# 1as ori-i'all$ asserte& a-ai'st the %/$er. (.) I( a %rea!h o( a 1arra't$ arisi'- /'&er Se!tio' *-.1*2 *-.1.(*)2 *-.182 or *-.192 or a %rea!h o( a' o%li-atio'2 other tha' a re#e&ial +ro#ise2 arisi'- /'&er Se!tio' *-.1.A or *-.1.@2 is !lai#e&2 the (ollo1i'- r/les a++l$0 (a) E,!e+t as other1ise +ro)i&e& i' +ara-ra+h (!)2 a ri-ht o( a!tio' (or %rea!h o( a 1arra't$ arisi'- /'&er Se!tio' *-.1.(*)2 *-.182 or *-.19 a!!r/es 1he' the seller has te'&ere& &eli)er$ to the i##e&iate %/$er2 as &e(i'e& i' Se!tio' *-.1.2 a'& has !o#+lete& +er(or#a'!e o( a'$ a-ree& i'stallatio' or asse#%l$ o( the -oo&s. (%) E,!e+t as other1ise +ro)i&e& i' +ara-ra+h (!)2 a ri-ht o( a!tio' (or %rea!h o( a' o%li-atio'2 other tha' a re#e&ial +ro#ise2 arisi'- /'&er Se!tio' *-.1.A or *-.1.@ a!!r/es 1he' the re#ote +/r!haser2 as &e(i'e& i' Se!tio' *-.1.A or *-.1.@2 re!ei)es the -oo&s. (!) I( a 1arra't$ arisi'- /'&er Se!tio' *-.1.(*) or a' o%li-atio'2 other tha' a re#e&ial +ro#ise2 arisi'- /'&er Se!tio' *-.1.A or *-.1.@ e,+li!itl$ e,te'&s to (/t/re +er(or#a'!e o( the -oo&s a'& &is!o)er$ o( the %rea!h #/st a1ait the ti#e (or +er(or#a'!e2 the ri-ht o( a!tio' a!!r/es 1he' the i##e&iate %/$er as &e(i'e& i' Se!tio' *-.1. or the re#ote +/r!haser as &e(i'e& i' Se!tio' *-.1.A or *-.1.@ &is!o)ers or sho/l& ha)e &is!o)ere& the %rea!h. (&) A ri-ht o( a!tio' (or %rea!h o( 1arra't$ arisi'- /'&er Se!tio' *-.1* a!!r/es 1he' the a--rie)e& +art$ &is!o)ers or sho/l& ha)e &is!o)ere& the %rea!h. Do1e)er2 a' a!tio' (or %rea!h o( the 1arra't$ o( 'o'i'(ri'-e#e't #a$ 'ot %e !o##e'!e& #ore tha' si, $ears a(ter te'&er o( &eli)er$ o( the -oo&s to the a--rie)e& +art$. (8) Chere a' a!tio' !o##e'!e& 1ithi' the ti#e li#ite& %$ s/%se!tio' (1) is so ter#i'ate& as to lea)e a)aila%le a re#e&$ %$ a'other a!tio' (or the sa#e %rea!h s/!h other a!tio' #a$ %e !o##e'!e& a(ter the e,+iratio' o( the ti#e li#ite& a'& 1ithi' si, #o'ths a(ter the ter#i'atio' o( the (irst a!tio' /'less the ter#i'atio' res/lte& (ro# )ol/'tar$ &is!o'ti'/a'!e or (ro# &is#issal (or (ail/re or 'e-le!t to +rose!/te. (9) This se!tio' &oes 'ot alter the la1 o' tolli'- o( the stat/te o( li#itatio's 'or &oes it a++l$ to !a/ses o( a!tio' 1hi!h ha)e a!!r/e& %e(ore this A!t %e!o#es e((e!ti)e. 9.C.C. - .%TIC*E 2. - *E.-E.%T 1. 6E5E%.* %4EI-I45-. 2.-1:1. -84%T TIT*E. This Arti!le shall %e 5'o1' a'& #a$ %e !ite& as the U'i(or# Co##er!ial Co&e - Leases. 2.-1:2. -C4 E. This Arti!le a++lies to a'$ tra'sa!tio'2 re-ar&less o( (or#2 that !reates a lease. 2.-1:3. 3E7I5ITI45- .53 I53E? 47 3E7I5ITI45-. (1) I' this Arti!le /'less the !o'te,t other1ise re7/ires0 (a) ?@/$er i' or&i'ar$ !o/rse o( %/si'ess? #ea's a +erso' 1ho i' -oo& (aith a'& 1itho/t 5'o1le&-e that the sale to hi# or her" is i' )iolatio' o( the o1'ershi+ ri-hts or se!/rit$ i'terest or leasehol& i'terest o( a thir& +art$ i' the -oo&s2 %/$s i' or&i'ar$ !o/rse (ro# a +erso' i' the %/si'ess o( selli'- -oo&s o( that 5i'& %/t &oes 'ot i'!l/&e a

+a1'%ro5er. ?@/$i'-? #a$ %e (or !ash or %$ e,!ha'-e o( other +ro+ert$ or o' se!/re& or /'se!/re& !re&it a'& i'!l/&es a!7/iri'- -oo&s or &o!/#e'ts o( title /'&er a +ree,isti'- !o'tra!t (or sale %/t &oes 'ot i'!l/&e a tra's(er i' %/l5 or as se!/rit$ (or or i' total or +artial satis(a!tio' o( a #o'e$ &e%t. (%) ?Ca'!ellatio'? o!!/rs 1he' either +art$ +/ts a' e'& to the lease !o'tra!t (or &e(a/lt %$ the other +art$. (!) ?Co##er!ial /'it? #ea's s/!h a /'it o( -oo&s as %$ !o##er!ial /sa-e is a si'-le 1hole (or +/r+oses o( lease a'& &i)isio' o( 1hi!h #ateriall$ i#+airs its !hara!ter or )al/e o' the #ar5et or i' /se. A !o##er!ial /'it #a$ %e a si'-le arti!le2 as a #a!hi'e2 or a set o( arti!les2 as a s/ite o( (/r'it/re or a li'e o( #a!hi'er$2 or a 7/a'tit$2 as a -ross or !arloa&2 or a'$ other /'it treate& i' /se or i' the rele)a't #ar5et as a si'-le 1hole. (&) ?Co'(or#i'-? -oo&s or +er(or#a'!e /'&er a lease !o'tra!t #ea's -oo&s or +er(or#a'!e that are i' a!!or&a'!e 1ith the o%li-atio's /'&er the lease !o'tra!t. (e) ?Co's/#er lease? #ea's a lease that a lessor re-/larl$ e'-a-e& i' the %/si'ess o( leasi'- or selli'- #a5es to a lessee 1ho is a' i'&i)i&/al a'& 1ho ta5es /'&er the lease +ri#aril$ (or a +erso'al2 (a#il$2 or ho/sehol& +/r+ose 2 i( the total +a$#e'ts to %e #a&e /'&er the lease !o'tra!t2 e,!l/&i'- +a$#e'ts (or o+tio's to re'e1 or %/$2 &o 'ot e,!ee& IJJJJJJJ". (() ?>a/lt? #ea's 1ro'-(/l a!t2 o#issio'2 %rea!h2 or &e(a/lt. (-) ?>i'a'!e lease? #ea's a lease 1ith res+e!t to 1hi!h0 (i) the lessor &oes 'ot sele!t2 #a'/(a!t/re2 or s/++l$ the -oo&s4 (ii) the lessor a!7/ires the -oo&s or the ri-ht to +ossessio' a'& /se o( the -oo&s i' !o''e!tio' 1ith the lease4 a'& (iii) o'e o( the (ollo1i'- o!!/rs0 (A) the lessee re!ei)es a !o+$ o( the !o'tra!t %$ 1hi!h the lessor a!7/ire& the -oo&s or the ri-ht to +ossessio' a'& /se o( the -oo&s %e(ore si-'i'- the lease !o'tra!t 4 (@) the lesseeBs a++ro)al o( the !o'tra!t %$ 1hi!h the lessor a!7/ire& the -oo&s or the ri-ht to +ossessio' a'& /se o( the -oo&s is a !o'&itio' to e((e!ti)e'ess o( the lease !o'tra!t4 (C) the lessee2 %e(ore si-'i'- the lease !o'tra!t2 re!ei)es a' a!!/rate a'& !o#+lete state#e't &esi-'ati'- the +ro#ises a'& 1arra'ties2 a'& a'$ &is!lai#ers o( 1arra'ties2 li#itatio's or #o&i(i!atio's o( re#e&ies2 or li7/i&ate& &a#a-es2 i'!l/&i'- those o( a thir& +art$2 s/!h as the #a'/(a!t/rer o( the -oo&s2 +ro)i&e& to the lessor %$ the +erso' s/++l$i'- the -oo&s i' !o''e!tio' 1ith or as +art o( the !o'tra!t %$ 1hi!h the lessor a!7/ire& the -oo&s or the ri-ht to +ossessio' a'& /se o( the -oo&s4 or (=) i( the lease is 'ot a !o's/#er lease2 the lessor2 %e(ore the lessee si-'s the lease !o'tra!t2 i'(or#s the lessee i' 1riti'- (a) o( the i&e'tit$ o( the +erso' s/++l$i'- the -oo&s to the lessor2 /'less the lessee has sele!te& that +erso' a'& &ire!te& the lessor to a!7/ire the -oo&s or the ri-ht to +ossessio' a'& /se o( the -oo&s (ro# that +erso'2 (%) that the lessee is e'title& /'&er this Arti!le to the +ro#ises a'& 1arra'ties2 i'!l/&i'those o( a'$ thir& +art$2 +ro)i&e& to the lessor %$ the +erso' s/++l$i'- the -oo&s i' !o''e!tio' 1ith or as +art o( the !o'tra!t %$ 1hi!h the lessor a!7/ire& the -oo&s or the ri-ht to +ossessio' a'& /se o( the -oo&s2 a'& (!) that the lessee #a$ !o##/'i!ate 1ith

the +erso' s/++l$i'- the -oo&s to the lessor a'& re!ei)e a' a!!/rate a'& !o#+lete state#e't o( those +ro#ises a'& 1arra'ties2 i'!l/&i'- a'$ &is!lai#ers a'& li#itatio's o( the# or o( re#e&ies. (h) ?Goo&s? #ea's all thi'-s that are #o)a%le at the ti#e o( i&e'ti(i!atio' to the lease !o'tra!t2 or are (i,t/res (Se!tio' *A-.0A)2 %/t the ter# &oes 'ot i'!l/&e #o'e$2 &o!/#e'ts2 i'str/#e'ts2 a!!o/'ts2 !hattel +a+er2 -e'eral i'ta'-i%les2 or #i'erals or the li5e2 i'!l/&i'- oil a'& -as2 %e(ore e,tra!tio'. The ter# also i'!l/&es the /'%or' $o/'o( a'i#als. (i) ?I'stall#e't lease !o'tra!t? #ea's a lease !o'tra!t that a/thori3es or re7/ires the &eli)er$ o( -oo&s i' se+arate lots to %e se+aratel$ a!!e+te&2 e)e' tho/-h the lease !o'tra!t !o'tai's a !la/se ?ea!h &eli)er$ is a se+arate lease? or its e7/i)ale't. (6) ?Lease? #ea's a tra's(er o( the ri-ht to +ossessio' a'& /se o( -oo&s (or a ter# i' ret/r' (or !o'si&eratio'2 %/t a sale2 i'!l/&i'- a sale o' a++ro)al or a sale or ret/r'2 or rete'tio' or !reatio' o( a se!/rit$ i'terest is 'ot a lease. U'less the !o'te,t !learl$ i'&i!ates other1ise2 the ter# i'!l/&es a s/%lease. (5) ?Lease a-ree#e't? #ea's the %ar-ai'2 1ith res+e!t to the lease2 o( the lessor a'& the lessee i' (a!t as (o/'& i' their la'-/a-e or %$ i#+li!atio' (ro# other !ir!/#sta'!es i'!l/&i'- !o/rse o( &eali'- or /sa-e o( tra&e or !o/rse o( +er(or#a'!e as +ro)i&e& i' this Arti!le. U'less the !o'te,t !learl$ i'&i!ates other1ise2 the ter# i'!l/&es a s/%lease a-ree#e't. (l) ?Lease !o'tra!t? #ea's the total le-al o%li-atio' that res/lts (ro# the lease a-ree#e't as a((e!te& %$ this Arti!le a'& a'$ other a++li!a%le r/les o( la1. U'less the !o'te,t !learl$ i'&i!ates other1ise2 the ter# i'!l/&es a s/%lease !o'tra!t. (#) ?Leasehol& i'terest? #ea's the i'terest o( the lessor or the lessee /'&er a lease !o'tra!t. (') ?Lessee? #ea's a +erso' 1ho a!7/ires the ri-ht to +ossessio' a'& /se o( -oo&s /'&er a lease. U'less the !o'te,t !learl$ i'&i!ates other1ise2 the ter# i'!l/&es a s/%lessee. (o) ?Lessee i' or&i'ar$ !o/rse o( %/si'ess? #ea's a +erso' 1ho i' -oo& (aith a'& 1itho/t 5'o1le&-e that the lease to hi# or her" is i' )iolatio' o( the o1'ershi+ ri-hts or se!/rit$ i'terest or leasehol& i'terest o( a thir& +art$ i' the -oo&s leases i' or&i'ar$ !o/rse (ro# a +erso' i' the %/si'ess o( selli'- or leasi'- -oo&s o( that 5i'& %/t &oes 'ot i'!l/&e a +a1'%ro5er. ?Leasi'-? #a$ %e (or !ash or %$ e,!ha'-e o( other +ro+ert$ or o' se!/re& or /'se!/re& !re&it a'& i'!l/&es a!7/iri'- -oo&s or &o!/#e'ts o( title /'&er a +re-e,isti'- lease !o'tra!t %/t &oes 'ot i'!l/&e a tra's(er i' %/l5 or as se!/rit$ (or or i' total or +artial satis(a!tio' o( a #o'e$ &e%t. (+) ?Lessor? #ea's a +erso' 1ho tra's(ers the ri-ht to +ossessio' a'& /se o( -oo&s /'&er a lease. U'less the !o'te,t !learl$ i'&i!ates other1ise2 the ter# i'!l/&es a s/%lessor. (7) ?LessorBs resi&/al i'terest? #ea's the lessorBs i'terest i' the -oo&s a(ter e,+iratio'2 ter#i'atio'2 or !a'!ellatio' o( the lease !o'tra!t. (r) ?Lie'? #ea's a !har-e a-ai'st or i'terest i' -oo&s to se!/re +a$#e't o( a &e%t or +er(or#a'!e o( a' o%li-atio'2 %/t the ter# &oes 'ot i'!l/&e a se!/rit$ i'terest.

(s) ?Lot? #ea's a +ar!el or a si'-le arti!le that is the s/%6e!t #atter o( a se+arate lease or &eli)er$2 1hether or 'ot it is s/((i!ie't to +er(or# the lease !o'tra!t. (t) ?Eer!ha't lessee? #ea's a lessee that is a #er!ha't 1ith res+e!t to -oo&s o( the 5i'& s/%6e!t to the lease. (/) ?Prese't )al/e? #ea's the a#o/'t as o( a &ate !ertai' o( o'e or #ore s/#s +a$a%le i' the (/t/re2 &is!o/'te& to the &ate !ertai'. The &is!o/'t is &eter#i'e& %$ the i'terest rate s+e!i(ie& %$ the +arties i( the rate 1as 'ot #a'i(estl$ /'reaso'a%le at the ti#e the tra'sa!tio' 1as e'tere& i'to4 other1ise2 the &is!o/'t is &eter#i'e& %$ a !o##er!iall$ reaso'a%le rate that ta5es i'to a!!o/'t the (a!ts a'& !ir!/#sta'!es o( ea!h !ase at the ti#e the tra'sa!tio' 1as e'tere& i'to. ()) ?P/r!hase? i'!l/&es ta5i'- %$ sale2 lease2 #ort-a-e2 se!/rit$ i'terest2 +le&-e2 -i(t2 or a'$ other )ol/'tar$ tra'sa!tio' !reati'- a' i'terest i' -oo&s. (1) ?S/%lease? #ea's a lease o( -oo&s the ri-ht to +ossessio' a'& /se o( 1hi!h 1as a!7/ire& %$ the lessor as a lessee /'&er a' e,isti'- lease. (,) ?S/++lier? #ea's a +erso' (ro# 1ho# a lessor %/$s or leases -oo&s to %e lease& /'&er a (i'a'!e lease. ($) ?S/++l$ !o'tra!t? #ea's a !o'tra!t /'&er 1hi!h a lessor %/$s or leases -oo&s to %e lease&. (3) ?Ter#i'atio'? o!!/rs 1he' either +art$ +/rs/a't to a +o1er !reate& %$ a-ree#e't or la1 +/ts a' e'& to the lease !o'tra!t other1ise tha' (or &e(a/lt. (*) Other &e(i'itio's a++l$i'- to this Arti!le a'& the se!tio's i' 1hi!h the$ a++ear are0 ?A!!essio's?. ?E'!/#%ra'!e?. ?>i,t/res?. ?>i,t/re (ili'-?. ?P/r!hase #o'e$ lease?. ?A!!o/'t?. ?@/$er?. ?Chattel +a+er?. ?Co's/#er -oo&s?. ?=o!/#e't?. ?E'tr/sti'-?. ?Ge'eral i'ta'-i%le?. ?I'str/#e't?. ?Eer!ha't?. ?Eort-a-e?. ?Re!ei+t?. ?Sale?. ?Sale o' a++ro)al?. ?Sale or ret/r'?. Se!tio' *A-.10(1). Se!tio' *A-.0A(1)(&). Se!tio' *A-.0A(1)(e). Se!tio' *A-.0A(1)(a). Se!tio' *A-.0A(1)(%). Se!tio' *A-.0A(1)(!). ?Co'str/!tio' #ort-a-e?.

(.) The (ollo1i'- &e(i'itio's i' other Arti!les a++l$ to this Arti!le0 Se!tio' A-10*(a)(*). Se!tio' *-108(.). Se!tio' *-10.(1)(a). Se!tio' A-10*(a)(11). Se!tio' A-10*(a)(*.). Se!tio' A-10*(a)(.0). Se!tio' *-80.(.). Se!tio' A-10*(a)(8*). Se!tio' A-10*(a)(8;). Se!tio' *-108(1). Se!tio' A-10*(a)(99). Se!tio' A-10*(a)(:<). Se!tio' *-10.(1)(!). Se!tio' *-10:(1). Se!tio' *-.*:. Se!tio' *-.*:. ?@et1ee' #er!ha'ts?.

?P/rs/a't to !o##it#e't?.

?Seller?.

Se!tio' *-10.(1)(&).

(8) I' a&&itio'2 Arti!le 1 !o'tai's -e'eral &e(i'itio's a'& +ri'!i+les o( !o'str/!tio' a'& i'ter+retatio' a++li!a%le thro/-ho/t this Arti!le. 2.-1:1. *E.-E- -9"FECT T4 4T8E% *.W. (1) A lease2 altho/-h s/%6e!t to this Arti!le2 is also s/%6e!t to a'$ a++li!a%le0 (a) !erti(i!ate o( title stat/te o( this State0 (list a'$ !erti(i!ate o( title stat/tes !o)eri'a/to#o%iles2 trailers2 #o%ile ho#es2 %oats2 (ar# tra!tors2 a'& the li5e)4 (%) !erti(i!ate o( title stat/te o( a'other 6/ris&i!tio' (Se!tio' *A-109)4 or (!) !o's/#er +rote!tio' stat/te o( this State2 or (i'al !o's/#er +rote!tio' &e!isio' o( a !o/rt o( this State e,isti'- o' the e((e!ti)e &ate o( this Arti!le. (*) I' !ase o( !o'(li!t %et1ee' this Arti!le2 other tha' Se!tio's *A-1092 *A-.08(.)2 a'& *A-.09(.)2 a'& a stat/te or &e!isio' re(erre& to i' s/%se!tio' (1)2 the stat/te or &e!isio' !o'trols. (.) >ail/re to !o#+l$ 1ith a' a++li!a%le la1 has o'l$ the e((e!t s+e!i(ie& therei'. 2.-1:(. TE%%IT4%I.* . CE%TI7IC.TE 47 TIT*E. S/%6e!t to the +ro)isio's o( Se!tio's *A-.08(.) a'& *A-.09(.)2 1ith res+e!t to -oo&s !o)ere& %$ a !erti(i!ate o( title iss/e& /'&er a stat/te o( this State or o( a'other 6/ris&i!tio'2 !o#+lia'!e a'& the e((e!t o( !o#+lia'!e or 'o'!o#+lia'!e 1ith a !erti(i!ate o( title stat/te are -o)er'e& %$ the la1 (i'!l/&i'- the !o'(li!t o( la1s r/les) o( the 6/ris&i!tio' iss/i'- the !erti(i!ate /'til the earlier o( (a) s/rre'&er o( the !erti(i!ate2 or (%) (o/r #o'ths a(ter the -oo&s are re#o)e& (ro# that 6/ris&i!tio' a'& therea(ter /'til a 'e1 !erti(i!ate o( title is iss/e& %$ a'other 6/ris&i!tio'. 2.-1:,. *I=IT.TI45 45 C844-E . 4WE% 47 .%TIE- T4 C45-9=E% *E.-E T4 *IC."*E *.W .53 F93ICI.* 74%9=. *IC.TI45 47 .%TIC*E T4 6443- C4EE%E3 "G

(1) I( the la1 !hose' %$ the +arties to a !o's/#er lease is that o( a 6/ris&i!tio' other tha' a 6/ris&i!tio' i' 1hi!h the lessee resi&es at the ti#e the lease a-ree#e't %e!o#es e'(or!ea%le or 1ithi' .0 &a$s therea(ter or i' 1hi!h the -oo&s are to %e /se&2 the !hoi!e is 'ot e'(or!ea%le. (*) I( the 6/&i!ial (or/# !hose' %$ the +arties to a !o's/#er lease is a (or/# that 1o/l& 'ot other1ise ha)e 6/ris&i!tio' o)er the lessee2 the !hoi!e is 'ot e'(or!ea%le. 2.-1:7. W.IEE% 4% %E595CI.TI45 47 C*.I= 4% %I68T .7TE% 3E7.9*T. A'$ !lai# or ri-ht arisi'- o/t o( a' alle-e& &e(a/lt or %rea!h o( 1arra't$ #a$ %e &is!har-e& i' 1hole or i' +art 1itho/t !o'si&eratio' %$ a 1ritte' 1ai)er or re'/'!iatio' si-'e& a'& &eli)ere& %$ the a--rie)e& +art$. 2.-1:8. 95C45-CI45."I*ITG. (1) I( the !o/rt as a #atter o( la1 (i'&s a lease !o'tra!t or a'$ !la/se o( a lease !o'tra!t to ha)e %ee' /'!o's!io'a%le at the ti#e it 1as #a&e the !o/rt #a$ re(/se to e'(or!e the lease !o'tra!t2 or it #a$ e'(or!e the re#ai'&er o( the lease !o'tra!t 1itho/t the /'!o's!io'a%le !la/se2 or it #a$ so li#it the a++li!atio' o( a'$ /'!o's!io'a%le !la/se as to a)oi& a'$ /'!o's!io'a%le res/lt. (*) Cith res+e!t to a !o's/#er lease2 i( the !o/rt as a #atter o( la1 (i'&s that a lease !o'tra!t or a'$ !la/se o( a lease !o'tra!t has %ee' i'&/!e& %$ /'!o's!io'a%le !o'&/!t

or that /'!o's!io'a%le !o'&/!t has o!!/rre& i' the !olle!tio' o( a !lai# arisi'- (ro# a lease !o'tra!t2 the !o/rt #a$ -ra't a++ro+riate relie(. (.) @e(ore #a5i'- a (i'&i'- o( /'!o's!io'a%ilit$ /'&er s/%se!tio' (1) or (*)2 the !o/rt2 o' its o1' #otio' or that o( a +art$2 shall a((or& the +arties a reaso'a%le o++ort/'it$ to +rese't e)i&e'!e as to the setti'-2 +/r+ose2 a'& e((e!t o( the lease !o'tra!t or !la/se thereo(2 or o( the !o'&/!t. (8) I' a' a!tio' i' 1hi!h the lessee !lai#s /'!o's!io'a%ilit$ 1ith res+e!t to a !o's/#er lease0 (a) I( the !o/rt (i'&s /'!o's!io'a%ilit$ /'&er s/%se!tio' (1) or (*)2 the !o/rt shall a1ar& reaso'a%le attor'e$Bs (ees to the lessee. (%) I( the !o/rt &oes 'ot (i'& /'!o's!io'a%ilit$ a'& the lessee !lai#i'/'!o's!io'a%ilit$ has %ro/-ht or #ai'tai'e& a' a!tio' he or she" 5'e1 to %e -ro/'&less2 the !o/rt shall a1ar& reaso'a%le attor'e$Bs (ees to the +art$ a-ai'st 1ho# the !lai# is #a&e. (!) I' &eter#i'i'- attor'e$Bs (ees2 the a#o/'t o( the re!o)er$ o' %ehal( o( the !lai#a't /'&er s/%se!tio's (1) a'& (*) is 'ot !o'trolli'-. 2.-1:$. 4 TI45 T4 .CCE*E%.TE .T WI**. (1) A ter# +ro)i&i'- that o'e +art$ or his or her" s/!!essor i' i'terest #a$ a!!elerate +a$#e't or +er(or#a'!e or re7/ire !ollateral or a&&itio'al !ollateral ?at 1ill? or ?1he' he or she" &ee#s hi#sel( or hersel(" i'se!/re? or i' 1or&s o( si#ilar i#+ort #/st %e !o'str/e& to #ea' that he or she" has +o1er to &o so o'l$ i( he or she" i' -oo& (aith %elie)es that the +ros+e!t o( +a$#e't or +er(or#a'!e is i#+aire&. (*) Cith res+e!t to a !o's/#er lease2 the %/r&e' o( esta%lishi'- -oo& (aith /'&er s/%se!tio' (1) is o' the +art$ 1ho e,er!ise& the +o1er4 other1ise the %/r&e' o( esta%lishi'- la!5 o( -oo& (aith is o' the +art$ a-ai'st 1ho# the +o1er has %ee' e,er!ise&. .%T 2. 74%=.TI45 .53 C45-T%9CTI45 47 *E.-E C45T%.CT 2.-2:1. -T.T9TE 47 7%.93-. (1) A lease !o'tra!t is 'ot e'(or!ea%le %$ 1a$ o( a!tio' or &e(e'se /'less0 (a) the total +a$#e'ts to %e #a&e /'&er the lease !o'tra!t2 e,!l/&i'- +a$#e'ts (or o+tio's to re'e1 or %/$2 are less tha' I120004 or (%) there is a 1riti'-2 si-'e& %$ the +art$ a-ai'st 1ho# e'(or!e#e't is so/-ht or %$ that +art$Bs a/thori3e& a-e't2 s/((i!ie't to i'&i!ate that a lease !o'tra!t has %ee' #a&e %et1ee' the +arties a'& to &es!ri%e the -oo&s lease& a'& the lease ter#. (*) A'$ &es!ri+tio' o( lease& -oo&s or o( the lease ter# is s/((i!ie't a'& satis(ies s/%se!tio' (1)(%)2 1hether or 'ot it is s+e!i(i!2 i( it reaso'a%l$ i&e'ti(ies 1hat is &es!ri%e&. (.) A 1riti'- is 'ot i's/((i!ie't %e!a/se it o#its or i'!orre!tl$ states a ter# a-ree& /+o'2 %/t the lease !o'tra!t is 'ot e'(or!ea%le /'&er s/%se!tio' (1)(%) %e$o'& the lease ter# a'& the 7/a'tit$ o( -oo&s sho1' i' the 1riti'-. (8) A lease !o'tra!t that &oes 'ot satis($ the re7/ire#e'ts o( s/%se!tio' (1)2 %/t 1hi!h is )ali& i' other res+e!ts2 is e'(or!ea%le0 (a) i( the -oo&s are to %e s+e!iall$ #a'/(a!t/re& or o%tai'e& (or the lessee a'& are 'ot s/ita%le (or lease or sale to others i' the or&i'ar$ !o/rse o( the lessorBs %/si'ess2 a'&

the lessor2 %e(ore 'oti!e o( re+/&iatio' is re!ei)e& a'& /'&er !ir!/#sta'!es that reaso'a%l$ i'&i!ate that the -oo&s are (or the lessee2 has #a&e either a s/%sta'tial %e-i''i'- o( their #a'/(a!t/re or !o##it#e'ts (or their +ro!/re#e't4 (%) i( the +art$ a-ai'st 1ho# e'(or!e#e't is so/-ht a&#its i' that +art$Bs +lea&i'-2 testi#o'$ or other1ise i' !o/rt that a lease !o'tra!t 1as #a&e2 %/t the lease !o'tra!t is 'ot e'(or!ea%le /'&er this +ro)isio' %e$o'& the 7/a'tit$ o( -oo&s a&#itte&4 or (!) 1ith res+e!t to -oo&s that ha)e %ee' re!ei)e& a'& a!!e+te& %$ the lessee. (9) The lease ter# /'&er a lease !o'tra!t re(erre& to i' s/%se!tio' (8) is0 (a) i( there is a 1riti'- si-'e& %$ the +art$ a-ai'st 1ho# e'(or!e#e't is so/-ht or %$ that +art$Bs a/thori3e& a-e't s+e!i($i'- the lease ter#2 the ter# so s+e!i(ie&4 (%) i( the +art$ a-ai'st 1ho# e'(or!e#e't is so/-ht a&#its i' that +art$Bs +lea&i'-2 testi#o'$2 or other1ise i' !o/rt a lease ter#2 the ter# so a&#itte&4 or (!) a reaso'a%le lease ter#. 2.-2:2. 7I5.* W%ITTE5 E? %E--I45C .%4* 4% E?T%I5-IC EEI3E5CE. Ter#s 1ith res+e!t to 1hi!h the !o'(ir#ator$ #e#ora'&a o( the +arties a-ree or 1hi!h are other1ise set (orth i' a 1riti'- i'te'&e& %$ the +arties as a (i'al e,+ressio' o( their a-ree#e't 1ith res+e!t to s/!h ter#s as are i'!l/&e& therei' #a$ 'ot %e !o'tra&i!te& %$ e)i&e'!e o( a'$ +rior a-ree#e't or o( a !o'te#+ora'eo/s oral a-ree#e't %/t #a$ %e e,+lai'e& or s/++le#e'te&0 (a) %$ !o/rse o( &eali'- or /sa-e o( tra&e or %$ !o/rse o( +er(or#a'!e4 a'& (%) %$ e)i&e'!e o( !o'siste't a&&itio'al ter#s /'less the !o/rt (i'&s the 1riti'- to ha)e %ee' i'te'&e& also as a !o#+lete a'& e,!l/si)e state#e't o( the ter#s o( the a-ree#e't. 2.-2:3. -E.*- I54 E%.TIEE. The a((i,i'- o( a seal to a 1riti'- e)i&e'!i'- a lease !o'tra!t or a' o((er to e'ter i'to a lease !o'tra!t &oes 'ot re'&er the 1riti'- a seale& i'str/#e't a'& the la1 1ith res+e!t to seale& i'str/#e'ts &oes 'ot a++l$ to the lease !o'tra!t or o((er. 2.-2:1. 74%=.TI45 I5 6E5E%.*. (1) A lease !o'tra!t #a$ %e #a&e i' a'$ #a''er s/((i!ie't to sho1 a-ree#e't2 i'!l/&i'- !o'&/!t %$ %oth +arties 1hi!h re!o-'i3es the e,iste'!e o( a lease !o'tra!t. (*) A' a-ree#e't s/((i!ie't to !o'stit/te a lease !o'tra!t #a$ %e (o/'& altho/-h the #o#e't o( its #a5i'- is /'&eter#i'e&. (.) Altho/-h o'e or #ore ter#s are le(t o+e'2 a lease !o'tra!t &oes 'ot (ail (or i'&e(i'ite'ess i( the +arties ha)e i'te'&e& to #a5e a lease !o'tra!t a'& there is a reaso'a%l$ !ertai' %asis (or -i)i'- a' a++ro+riate re#e&$. 2.-2:(. 7I%= 477E%-. A' o((er %$ a #er!ha't to lease -oo&s to or (ro# a'other +erso' i' a si-'e& 1riti'- that %$ its ter#s -i)es ass/ra'!e it 1ill %e hel& o+e' is 'ot re)o!a%le2 (or la!5 o( !o'si&eratio'2 &/ri'- the ti#e state& or2 i( 'o ti#e is state&2 (or a reaso'a%le ti#e2 %/t i' 'o e)e't #a$ the +erio& o( irre)o!a%ilit$ e,!ee& . #o'ths. A'$ s/!h ter# o( ass/ra'!e o' a (or# s/++lie& %$ the o((eree #/st %e se+aratel$ si-'e& %$ the o((eror. 2.-2:,. 477E% .53 .CCE T.5CE I5 74%=.TI45 47 *E.-E C45T%.CT.

(1) U'less other1ise /'a#%i-/o/sl$ i'&i!ate& %$ the la'-/a-e or !ir!/#sta'!es2 a' o((er to #a5e a lease !o'tra!t #/st %e !o'str/e& as i')iti'- a!!e+ta'!e i' a'$ #a''er a'& %$ a'$ #e&i/# reaso'a%le i' the !ir!/#sta'!es. (*) I( the %e-i''i'- o( a re7/este& +er(or#a'!e is a reaso'a%le #o&e o( a!!e+ta'!e2 a' o((eror 1ho is 'ot 'oti(ie& o( a!!e+ta'!e 1ithi' a reaso'a%le ti#e #a$ treat the o((er as ha)i'- la+se& %e(ore a!!e+ta'!e. 2.-2:8. =43I7IC.TI452 %E-CI--I45 .53 W.IEE%. (1) A' a-ree#e't #o&i($i'- a lease !o'tra!t 'ee&s 'o !o'si&eratio' to %e %i'&i'-. (*) A si-'e& lease a-ree#e't that e,!l/&es #o&i(i!atio' or res!issio' e,!e+t %$ a si-'e& 1riti'- #a$ 'ot %e other1ise #o&i(ie& or res!i'&e&2 %/t2 e,!e+t as %et1ee' #er!ha'ts2 s/!h a re7/ire#e't o' a (or# s/++lie& %$ a #er!ha't #/st %e se+aratel$ si-'e& %$ the other +art$. (.) Altho/-h a' atte#+t at #o&i(i!atio' or res!issio' &oes 'ot satis($ the re7/ire#e'ts o( s/%se!tio' (*)2 it #a$ o+erate as a 1ai)er. (8) A +art$ 1ho has #a&e a 1ai)er a((e!ti'- a' e,e!/tor$ +ortio' o( a lease !o'tra!t #a$ retra!t the 1ai)er %$ reaso'a%le 'oti(i!atio' re!ei)e& %$ the other +art$ that stri!t +er(or#a'!e 1ill %e re7/ire& o( a'$ ter# 1ai)e&2 /'less the retra!tio' 1o/l& %e /'6/st i' )ie1 o( a #aterial !ha'-e o( +ositio' i' relia'!e o' the 1ai)er. 2.-2:$. *E--EE 953E% 7I5.5CE *E.-E .- "E5E7ICI.%G 47 -9 C45T%.CT. (1) The %e'e(it o( a s/++lierBs +ro#ises to the lessor /'&er the s/++l$ !o'tra!t a'& o( all 1arra'ties2 1hether e,+ress or i#+lie&2 i'!l/&i'- those o( a'$ thir& +art$ +ro)i&e& i' !o''e!tio' 1ith or as +art o( the s/++l$ !o'tra!t2 e,te'&s to the lessee to the e,te't o( the lesseeBs leasehol& i'terest /'&er a (i'a'!e lease relate& to the s/++l$ !o'tra!t2 %/t is s/%6e!t to the ter#s o( the 1arra't$ a'& o( the s/++l$ !o'tra!t a'& all &e(e'ses or !lai#s arisi'- there(ro#. (*) The e,te'sio' o( the %e'e(it o( a s/++lierBs +ro#ises a'& o( 1arra'ties to the lessee (Se!tio' *A-*0A(1)) &oes 'ot0 (i) #o&i($ the ri-hts a'& o%li-atio's o( the +arties to the s/++l$ !o'tra!t2 1hether arisi'- there(ro# or other1ise2 or (ii) i#+ose a'$ &/t$ or lia%ilit$ /'&er the s/++l$ !o'tra!t o' the lessee. (.) A'$ #o&i(i!atio' or res!issio' o( the s/++l$ !o'tra!t %$ the s/++lier a'& the lessor is e((e!ti)e %et1ee' the s/++lier a'& the lessee /'less2 %e(ore the #o&i(i!atio' or res!issio'2 the s/++lier has re!ei)e& 'oti!e that the lessee has e'tere& i'to a (i'a'!e lease relate& to the s/++l$ !o'tra!t. I( the #o&i(i!atio' or res!issio' is e((e!ti)e %et1ee' the s/++lier a'& the lessee2 the lessor is &ee#e& to ha)e ass/#e&2 i' a&&itio' to the o%li-atio's o( the lessor to the lessee /'&er the lease !o'tra!t2 +ro#ises o( the s/++lier to the lessor a'& 1arra'ties that 1ere so #o&i(ie& or res!i'&e& as the$ e,iste& a'& 1ere a)aila%le to the lessee %e(ore #o&i(i!atio' or res!issio'. (8) I' a&&itio' to the e,te'sio' o( the %e'e(it o( the s/++lierBs +ro#ises a'& o( 1arra'ties to the lessee /'&er s/%se!tio' (1)2 the lessee retai's all ri-hts that the lessee #a$ ha)e a-ai'st the s/++lier 1hi!h arise (ro# a' a-ree#e't %et1ee' the lessee a'& the s/++lier or /'&er other la1. 2.-21:. E? %E-- W.%%.5TIE-. (1) E,+ress 1arra'ties %$ the lessor are !reate& as (ollo1s0 *G

(a) A'$ a((ir#atio' o( (a!t or +ro#ise #a&e %$ the lessor to the lessee 1hi!h relates to the -oo&s a'& %e!o#es +art o( the %asis o( the %ar-ai' !reates a' e,+ress 1arra't$ that the -oo&s 1ill !o'(or# to the a((ir#atio' or +ro#ise. (%) A'$ &es!ri+tio' o( the -oo&s 1hi!h is #a&e +art o( the %asis o( the %ar-ai' !reates a' e,+ress 1arra't$ that the -oo&s 1ill !o'(or# to the &es!ri+tio'. (!) A'$ sa#+le or #o&el that is #a&e +art o( the %asis o( the %ar-ai' !reates a' e,+ress 1arra't$ that the 1hole o( the -oo&s 1ill !o'(or# to the sa#+le or #o&el. (*) It is 'ot 'e!essar$ to the !reatio' o( a' e,+ress 1arra't$ that the lessor /se (or#al 1or&s2 s/!h as ?1arra't? or ?-/ara'tee2? or that the lessor ha)e a s+e!i(i! i'te'tio' to #a5e a 1arra't$2 %/t a' a((ir#atio' #erel$ o( the )al/e o( the -oo&s or a state#e't +/r+orti'- to %e #erel$ the lessorBs o+i'io' or !o##e'&atio' o( the -oo&s &oes 'ot !reate a 1arra't$. 2.-211. W.%%.5TIE- .6.I5-T I5TE%7E%E5CE .53 .6.I5-T I57%I56E=E5T+ *E--EE;- 4"*I6.TI45 .6.I5-T I57%I56E=E5T. (1) There is i' a lease !o'tra!t a 1arra't$ that (or the lease ter# 'o +erso' hol&s a !lai# to or i'terest i' the -oo&s that arose (ro# a' a!t or o#issio' o( the lessor2 other tha' a !lai# %$ 1a$ o( i'(ri'-e#e't or the li5e2 1hi!h 1ill i'ter(ere 1ith the lesseeBs e'6o$#e't o( its leasehol& i'terest. (*) E,!e+t i' a (i'a'!e lease there is i' a lease !o'tra!t %$ a lessor 1ho is a #er!ha't re-/larl$ &eali'- i' -oo&s o( the 5i'& a 1arra't$ that the -oo&s are &eli)ere& (ree o( the ri-ht(/l !lai# o( a'$ +erso' %$ 1a$ o( i'(ri'-e#e't or the li5e. (.) A lessee 1ho (/r'ishes s+e!i(i!atio's to a lessor or a s/++lier shall hol& the lessor a'& the s/++lier har#less a-ai'st a'$ !lai# %$ 1a$ o( i'(ri'-e#e't or the li5e that arises o/t o( !o#+lia'!e 1ith the s+e!i(i!atio's. 2.-212. I= *IE3 W.%%.5TG 47 =E%C8.5T."I*ITG. (1) E,!e+t i' a (i'a'!e lease2 a 1arra't$ that the -oo&s 1ill %e #er!ha'ta%le is i#+lie& i' a lease !o'tra!t i( the lessor is a #er!ha't 1ith res+e!t to -oo&s o( that 5i'&. (*) Goo&s to %e #er!ha'ta%le #/st %e at least s/!h as (a) +ass 1itho/t o%6e!tio' i' the tra&e /'&er the &es!ri+tio' i' the lease a-ree#e't4 (%) i' the !ase o( (/'-i%le -oo&s2 are o( (air a)era-e 7/alit$ 1ithi' the &es!ri+tio'4 (!) are (it (or the or&i'ar$ +/r+oses (or 1hi!h -oo&s o( that t$+e are /se&4 (&) r/'2 1ithi' the )ariatio' +er#itte& %$ the lease a-ree#e't2 o( e)e' 5i'&2 7/alit$2 a'& 7/a'tit$ 1ithi' ea!h /'it a'& a#o'- all /'its i')ol)e&4 (e) are a&e7/atel$ !o'tai'e&2 +a!5a-e&2 a'& la%ele& as the lease a-ree#e't #a$ re7/ire4 a'& (() !o'(or# to a'$ +ro#ises or a((ir#atio's o( (a!t #a&e o' the !o'tai'er or la%el. (.) Other i#+lie& 1arra'ties #a$ arise (ro# !o/rse o( &eali'- or /sa-e o( tra&e. 2.-213. I= *IE3 W.%%.5TG 47 7IT5E-- 74% .%TIC9*.% 9% 4-E. E,!e+t i' a (i'a'!e lease2 i( the lessor at the ti#e the lease !o'tra!t is #a&e has reaso' to 5'o1 o( a'$ +arti!/lar +/r+ose (or 1hi!h the -oo&s are re7/ire& a'& that the lessee is rel$i'- o' the lessorBs s5ill or 6/&-#e't to sele!t or (/r'ish s/ita%le -oo&s2 there is i' the lease !o'tra!t a' i#+lie& 1arra't$ that the -oo&s 1ill %e (it (or that +/r+ose. 2.-211. E?C*9-I45 4% =43I7IC.TI45 47 W.%%.5TIE-.

(1) Cor&s or !o'&/!t rele)a't to the !reatio' o( a' e,+ress 1arra't$ a'& 1or&s or !o'&/!t te'&i'- to 'e-ate or li#it a 1arra't$ #/st %e !o'str/e& 1here)er reaso'a%le as !o'siste't 1ith ea!h other4 %/t2 s/%6e!t to the +ro)isio's o( Se!tio' *A-*0* o' +arol or e,tri'si! e)i&e'!e2 'e-atio' or li#itatio' is i'o+erati)e to the e,te't that the !o'str/!tio' is /'reaso'a%le. (*) S/%6e!t to s/%se!tio' (.)2 to e,!l/&e or #o&i($ the i#+lie& 1arra't$ o( #er!ha'ta%ilit$ or a'$ +art o( it the la'-/a-e #/st #e'tio' ?#er!ha'ta%ilit$?2 %e %$ a 1riti'-2 a'& %e !o's+i!/o/s. S/%6e!t to s/%se!tio' (.)2 to e,!l/&e or #o&i($ a'$ i#+lie& 1arra't$ o( (it'ess the e,!l/sio' #/st %e %$ a 1riti'- a'& %e !o's+i!/o/s. La'-/a-e to e,!l/&e all i#+lie& 1arra'ties o( (it'ess is s/((i!ie't i( it is i' 1riti'-2 is !o's+i!/o/s a'& states2 (or e,a#+le2 ?There is 'o 1arra't$ that the -oo&s 1ill %e (it (or a +arti!/lar +/r+ose?. (.) Not1ithsta'&i'- s/%se!tio' (*)2 %/t s/%6e!t to s/%se!tio' (8)2 (a) /'less the !ir!/#sta'!es i'&i!ate other1ise2 all i#+lie& 1arra'ties are e,!l/&e& %$ e,+ressio's li5e ?as is2? or ?1ith all (a/lts2? or %$ other la'-/a-e that i' !o##o' /'&ersta'&i'- !alls the lesseeBs atte'tio' to the e,!l/sio' o( 1arra'ties a'& #a5es +lai' that there is 'o i#+lie& 1arra't$2 i( i' 1riti'- a'& !o's+i!/o/s4 (%) i( the lessee %e(ore e'teri'- i'to the lease !o'tra!t has e,a#i'e& the -oo&s or the sa#+le or #o&el as (/ll$ as &esire& or has re(/se& to e,a#i'e the -oo&s2 there is 'o i#+lie& 1arra't$ 1ith re-ar& to &e(e!ts that a' e,a#i'atio' o/-ht i' the !ir!/#sta'!es to ha)e re)eale&4 a'& (!) a' i#+lie& 1arra't$ #a$ also %e e,!l/&e& or #o&i(ie& %$ !o/rse o( &eali'-2 !o/rse o( +er(or#a'!e2 or /sa-e o( tra&e. (8) To e,!l/&e or #o&i($ a 1arra't$ a-ai'st i'ter(ere'!e or a-ai'st i'(ri'-e#e't (Se!tio' *A-*11) or a'$ +art o( it2 the la'-/a-e #/st %e s+e!i(i!2 %e %$ a 1riti'-2 a'& %e !o's+i!/o/s2 /'less the !ir!/#sta'!es2 i'!l/&i'- !o/rse o( +er(or#a'!e2 !o/rse o( &eali'-2 or /sa-e o( tra&e2 -i)e the lessee reaso' to 5'o1 that the -oo&s are %ei'lease& s/%6e!t to a !lai# or i'terest o( a'$ +erso'. 2.-21(. C9=9*.TI45 .53 C457*ICT 47 W.%%.5TIE- E? %E-- 4% I= *IE3. Carra'ties2 1hether e,+ress or i#+lie&2 #/st %e !o'str/e& as !o'siste't 1ith ea!h other a'& as !/#/lati)e2 %/t i( that !o'str/!tio' is /'reaso'a%le2 the i'te'tio' o( the +arties &eter#i'es 1hi!h 1arra't$ is &o#i'a't. I' as!ertai'i'- that i'te'tio' the (ollo1i'- r/les a++l$0 (a) E,a!t or te!h'i!al s+e!i(i!atio's &is+la!e a' i'!o'siste't sa#+le or #o&el or -e'eral la'-/a-e o( &es!ri+tio'. (%) A sa#+le (ro# a' e,isti'- %/l5 &is+la!es i'!o'siste't -e'eral la'-/a-e o( &es!ri+tio'. (!) E,+ress 1arra'ties &is+la!e i'!o'siste't i#+lie& 1arra'ties other tha' a' i#+lie& 1arra't$ o( (it'ess (or a +arti!/lar +/r+ose. 2.-21,. T8I%3- .%TG "E5E7ICI.%IE- 47 E? %E-- .53 I= *IE3 W.%%.5TIE-. .lternati&e .

A 1arra't$ to or (or the %e'e(it o( a lessee /'&er this Arti!le2 1hether e,+ress or i#+lie&2 e,te'&s to a'$ 'at/ral +erso' 1ho is i' the (a#il$ or ho/sehol& o( the lessee or 1ho is a -/est i' the lesseeBs ho#e i( it is reaso'a%le to e,+e!t that s/!h +erso' #a$ /se2 !o's/#e2 or %e a((e!te& %$ the -oo&s a'& 1ho is i'6/re& i' +erso' %$ %rea!h o( the 1arra't$. This se!tio' &oes 'ot &is+la!e +ri'!i+les o( la1 a'& e7/it$ that e,te'& a 1arra't$ to or (or the %e'e(it o( a lessee to other +erso's. The o+eratio' o( this se!tio' #a$ 'ot %e e,!l/&e&2 #o&i(ie&2 or li#ite&2 %/t a' e,!l/sio'2 #o&i(i!atio'2 or li#itatio' o( the 1arra't$2 i'!l/&i'- a'$ 1ith res+e!t to ri-hts a'& re#e&ies2 e((e!ti)e a-ai'st the lessee is also e((e!ti)e a-ai'st a'$ %e'e(i!iar$ &esi-'ate& /'&er this se!tio'. .lternati&e " A 1arra't$ to or (or the %e'e(it o( a lessee /'&er this Arti!le2 1hether e,+ress or i#+lie&2 e,te'&s to a'$ 'at/ral +erso' 1ho #a$ reaso'a%l$ %e e,+e!te& to /se2 !o's/#e2 or %e a((e!te& %$ the -oo&s a'& 1ho is i'6/re& i' +erso' %$ %rea!h o( the 1arra't$. This se!tio' &oes 'ot &is+la!e +ri'!i+les o( la1 a'& e7/it$ that e,te'& a 1arra't$ to or (or the %e'e(it o( a lessee to other +erso's. The o+eratio' o( this se!tio' #a$ 'ot %e e,!l/&e&2 #o&i(ie&2 or li#ite&2 %/t a' e,!l/sio'2 #o&i(i!atio'2 or li#itatio' o( the 1arra't$2 i'!l/&i'- a'$ 1ith res+e!t to ri-hts a'& re#e&ies2 e((e!ti)e a-ai'st the lessee is also e((e!ti)e a-ai'st the %e'e(i!iar$ &esi-'ate& /'&er this se!tio'. .lternati&e C A 1arra't$ to or (or the %e'e(it o( a lessee /'&er this Arti!le2 1hether e,+ress or i#+lie&2 e,te'&s to a'$ +erso' 1ho #a$ reaso'a%l$ %e e,+e!te& to /se2 !o's/#e2 or %e a((e!te& %$ the -oo&s a'& 1ho is i'6/re& %$ %rea!h o( the 1arra't$. The o+eratio' o( this se!tio' #a$ 'ot %e e,!l/&e&2 #o&i(ie&2 or li#ite& 1ith res+e!t to i'6/r$ to the +erso' o( a' i'&i)i&/al to 1ho# the 1arra't$ e,te'&s2 %/t a' e,!l/sio'2 #o&i(i!atio'2 or li#itatio' o( the 1arra't$2 i'!l/&i'- a'$ 1ith res+e!t to ri-hts a'& re#e&ies2 e((e!ti)e a-ai'st the lessee is also e((e!ti)e a-ai'st the %e'e(i!iar$ &esi-'ate& /'&er this se!tio'. 2.-217. I3E5TI7IC.TI45. I&e'ti(i!atio' o( -oo&s as -oo&s to 1hi!h a lease !o'tra!t re(ers #a$ %e #a&e at a'$ ti#e a'& i' a'$ #a''er e,+li!itl$ a-ree& to %$ the +arties. I' the a%se'!e o( e,+li!it a-ree#e't2 i&e'ti(i!atio' o!!/rs0 (a) 1he' the lease !o'tra!t is #a&e i( the lease !o'tra!t is (or a lease o( -oo&s that are e,isti'- a'& i&e'ti(ie&4 (%) 1he' the -oo&s are shi++e&2 #ar5e&2 or other1ise &esi-'ate& %$ the lessor as -oo&s to 1hi!h the lease !o'tra!t re(ers2 i( the lease !o'tra!t is (or a lease o( -oo&s that are 'ot e,isti'- a'& i&e'ti(ie&4 or (!) 1he' the $o/'- are !o'!ei)e&2 i( the lease !o'tra!t is (or a lease o( /'%or' $o/'- o( a'i#als. 2.-218. I5-9%.5CE .53 %4CEE3-. (1) A lessee o%tai's a' i's/ra%le i'terest 1he' e,isti'- -oo&s are i&e'ti(ie& to the lease !o'tra!t e)e' tho/-h the -oo&s i&e'ti(ie& are 'o'!o'(or#i'- a'& the lessee has a' o+tio' to re6e!t the#. (*) I( a lessee has a' i's/ra%le i'terest o'l$ %$ reaso' o( the lessorBs i&e'ti(i!atio' o( the -oo&s2 the lessor2 /'til &e(a/lt or i'sol)e'!$ or 'oti(i!atio' to the lessee that i&e'ti(i!atio' is (i'al2 #a$ s/%stit/te other -oo&s (or those i&e'ti(ie&.

(.) Not1ithsta'&i'- a lesseeBs i's/ra%le i'terest /'&er s/%se!tio's (1) a'& (*)2 the lessor retai's a' i's/ra%le i'terest /'til a' o+tio' to %/$ has %ee' e,er!ise& %$ the lessee a'& ris5 o( loss has +asse& to the lessee. (8) Nothi'- i' this se!tio' i#+airs a'$ i's/ra%le i'terest re!o-'i3e& /'&er a'$ other stat/te or r/le o( la1. (9) The +arties %$ a-ree#e't #a$ &eter#i'e that o'e or #ore +arties ha)e a' o%li-atio' to o%tai' a'& +a$ (or i's/ra'!e !o)eri'- the -oo&s a'& %$ a-ree#e't #a$ &eter#i'e the %e'e(i!iar$ o( the +ro!ee&s o( the i's/ra'!e. 2.-21$. %I-H 47 *4--. (1) E,!e+t i' the !ase o( a (i'a'!e lease2 ris5 o( loss is retai'e& %$ the lessor a'& &oes 'ot +ass to the lessee. I' the !ase o( a (i'a'!e lease2 ris5 o( loss +asses to the lessee. (*) S/%6e!t to the +ro)isio's o( this Arti!le o' the e((e!t o( &e(a/lt o' ris5 o( loss (Se!tio' *A-**0)2 i( ris5 o( loss is to +ass to the lessee a'& the ti#e o( +assa-e is 'ot state&2 the (ollo1i'- r/les a++l$0 (a) I( the lease !o'tra!t re7/ires or a/thori3es the -oo&s to %e shi++e& %$ !arrier (i) a'& it &oes 'ot re7/ire &eli)er$ at a +arti!/lar &esti'atio'2 the ris5 o( loss +asses to the lessee 1he' the -oo&s are &/l$ &eli)ere& to the !arrier4 %/t (ii) i( it &oes re7/ire &eli)er$ at a +arti!/lar &esti'atio' a'& the -oo&s are there &/l$ te'&ere& 1hile i' the +ossessio' o( the !arrier2 the ris5 o( loss +asses to the lessee 1he' the -oo&s are there &/l$ so te'&ere& as to e'a%le the lessee to ta5e &eli)er$. (%) I( the -oo&s are hel& %$ a %ailee to %e &eli)ere& 1itho/t %ei'- #o)e&2 the ris5 o( loss +asses to the lessee o' a!5'o1le&-#e't %$ the %ailee o( the lesseeBs ri-ht to +ossessio' o( the -oo&s. (!) I' a'$ !ase 'ot 1ithi' s/%se!tio' (a) or (%)2 the ris5 o( loss +asses to the lessee o' the lesseeBs re!ei+t o( the -oo&s i( the lessor2 or2 i' the !ase o( a (i'a'!e lease2 the s/++lier2 is a #er!ha't4 other1ise the ris5 +asses to the lessee o' te'&er o( &eli)er$. 2.-22:. E77ECT 47 3E7.9*T 45 %I-H 47 *4--. (1) Chere ris5 o( loss is to +ass to the lessee a'& the ti#e o( +assa-e is 'ot state&0 (a) I( a te'&er or &eli)er$ o( -oo&s so (ails to !o'(or# to the lease !o'tra!t as to -i)e a ri-ht o( re6e!tio'2 the ris5 o( their loss re#ai's 1ith the lessor2 or2 i' the !ase o( a (i'a'!e lease2 the s/++lier2 /'til !/re or a!!e+ta'!e. (%) I( the lessee ri-ht(/ll$ re)o5es a!!e+ta'!e2 he or she"2 to the e,te't o( a'$ &e(i!ie'!$ i' his or her" e((e!ti)e i's/ra'!e !o)era-e2 #a$ treat the ris5 o( loss as ha)i'- re#ai'e& 1ith the lessor (ro# the %e-i''i'-. (*) Chether or 'ot ris5 o( loss is to +ass to the lessee2 i( the lessee as to !o'(or#i'-oo&s alrea&$ i&e'ti(ie& to a lease !o'tra!t re+/&iates or is other1ise i' &e(a/lt /'&er the lease !o'tra!t2 the lessor2 or2 i' the !ase o( a (i'a'!e lease2 the s/++lier2 to the e,te't o( a'$ &e(i!ie'!$ i' his or her" e((e!ti)e i's/ra'!e !o)era-e #a$ treat the ris5 o( loss as resti'- o' the lessee (or a !o##er!iall$ reaso'a%le ti#e. 2.-221. C.-9.*TG T4 I3E5TI7IE3 6443-. I( a lease !o'tra!t re7/ires -oo&s i&e'ti(ie& 1he' the lease !o'tra!t is #a&e2 a'& the -oo&s s/((er !as/alt$ 1itho/t (a/lt o( the lessee2 the lessor or the s/++lier %e(ore &eli)er$2 or the -oo&s s/((er !as/alt$ %e(ore ris5 o( loss +asses to the lessee +/rs/a't to the lease a-ree#e't or Se!tio' *A-*1A2 the'0

(a) i( the loss is total2 the lease !o'tra!t is a)oi&e&4 a'& (%) i( the loss is +artial or the -oo&s ha)e so &eteriorate& as to 'o lo'-er !o'(or# to the lease !o'tra!t2 the lessee #a$ 'e)ertheless &e#a'& i's+e!tio' a'& at his or her" o+tio' either treat the lease !o'tra!t as a)oi&e& or2 e,!e+t i' a (i'a'!e lease that is 'ot a !o's/#er lease2 a!!e+t the -oo&s 1ith &/e allo1a'!e (ro# the re't +a$a%le (or the %ala'!e o( the lease ter# (or the &eterioratio' or the &e(i!ie'!$ i' 7/a'tit$ %/t 1itho/t (/rther ri-ht a-ai'st the lessor. .%T 3. E77ECT 47 *E.-E C45T%.CT 2.-3:1. E574%CE."I*ITG 47 *E.-E C45T%.CT. E,!e+t as other1ise +ro)i&e& i' this Arti!le2 a lease !o'tra!t is e((e!ti)e a'& e'(or!ea%le a!!or&i'- to its ter#s %et1ee' the +arties2 a-ai'st +/r!hasers o( the -oo&s a'& a-ai'st !re&itors o( the +arties. 2.-3:2. TIT*E T4 .53 4--E--I45 47 6443-. E,!e+t as other1ise +ro)i&e& i' this Arti!le2 ea!h +ro)isio' o( this Arti!le a++lies 1hether the lessor or a thir& +art$ has title to the -oo&s2 a'& 1hether the lessor2 the lessee2 or a thir& +art$ has +ossessio' o( the -oo&s2 'ot1ithsta'&i'- a'$ stat/te or r/le o( la1 that +ossessio' or the a%se'!e o( +ossessio' is (ra/&/le't. 2.-3:3. .*IE5."I*ITG 47 T%.5-7E% 47 %I68T-. (1) As /se& i' this se!tio'2 ?!reatio' o( a se!/rit$ i'terest? i'!l/&es the sale o( a lease !o'tra!t that is s/%6e!t to Arti!le A2 Se!/re& Tra'sa!tio's2 %$ reaso' o( Se!tio' A-10A(a) (.). (*) E,!e+t as +ro)i&e& i' s/%se!tio' (.) a'& Se!tio' A-80;2 a +ro)isio' i' a lease a-ree#e't 1hi!h (i) +rohi%its the )ol/'tar$ or i')ol/'tar$ tra's(er2 i'!l/&i'- a tra's(er %$ sale2 s/%lease2 !reatio' or e'(or!e#e't o( a se!/rit$ i'terest2 or atta!h#e't2 le)$2 or other 6/&i!ial +ro!ess2 o( a' i'terest o( a +art$ /'&er the lease !o'tra!t or o( the lessorBs resi&/al i'terest i' the -oo&s2 or (ii) #a5es s/!h a tra's(er a' e)e't o( &e(a/lt2 -i)es rise to the ri-hts a'& re#e&ies +ro)i&e& i' s/%se!tio' (8)2 %/t a tra's(er that is +rohi%ite& or is a' e)e't o( &e(a/lt /'&er the lease a-ree#e't is other1ise e((e!ti)e. (.) A +ro)isio' i' a lease a-ree#e't 1hi!h (i) +rohi%its a tra's(er o( a ri-ht to &a#a-es (or &e(a/lt 1ith res+e!t to the 1hole lease !o'tra!t or o( a ri-ht to +a$#e't arisi'- o/t o( the tra's(erorBs &/e +er(or#a'!e o( the tra's(erorBs e'tire o%li-atio' 2 or (ii) #a5es s/!h a tra's(er a' e)e't o( &e(a/lt2 is 'ot e'(or!ea%le2 a'& s/!h a tra's(er is 'ot a tra's(er that #ateriall$ i#+airs the +ros+e!t o( o%tai'i'- ret/r' +er(or#a'!e %$2 #ateriall$ !ha'-es the &/t$ o(2 or #ateriall$ i'!reases the %/r&e' or ris5 i#+ose& o'2 the other +art$ to the lease !o'tra!t 1ithi' the +/r)ie1 o( s/%se!tio' (8). (8) S/%6e!t to s/%se!tio' (.) a'& Se!tio' A-80;0 (a) i( a tra's(er is #a&e 1hi!h is #a&e a' e)e't o( &e(a/lt /'&er a lease a-ree#e't2 the +art$ to the lease !o'tra!t 'ot #a5i'- the tra's(er2 /'less that +art$ 1ai)es the &e(a/lt or other1ise a-rees2 has the ri-hts a'& re#e&ies &es!ri%e& i' Se!tio' *A-901(*)4 (%) i( +ara-ra+h (a) is 'ot a++li!a%le a'& i( a tra's(er is #a&e that (i) is +rohi%ite& /'&er a lease a-ree#e't or (ii) #ateriall$ i#+airs the +ros+e!t o( o%tai'i'- ret/r' +er(or#a'!e %$2 #ateriall$ !ha'-es the &/t$ o(2 or #ateriall$ i'!reases the %/r&e' or .%TG;- I5TE%E-T 953E% *E.-E C45T%.CT 4% E%74%=.5CE+ 47 *E--4%;- %E-I39.* I5TE%E-T I5 6443-+ 3E*E6.TI45 47

ris5 i#+ose& o'2 the other +art$ to the lease !o'tra!t2 /'less the +art$ 'ot #a5i'- the tra's(er a-rees at a'$ ti#e to the tra's(er i' the lease !o'tra!t or other1ise2 the'2 e,!e+t as li#ite& %$ !o'tra!t2 (i) the tra's(eror is lia%le to the +art$ 'ot #a5i'- the tra's(er (or &a#a-es !a/se& %$ the tra's(er to the e,te't that the &a#a-es !o/l& 'ot reaso'a%l$ %e +re)e'te& %$ the +art$ 'ot #a5i'- the tra's(er a'& (ii) a !o/rt ha)i'6/ris&i!tio' #a$ -ra't other a++ro+riate relie(2 i'!l/&i'- !a'!ellatio' o( the lease !o'tra!t or a' i'6/'!tio' a-ai'st the tra's(er. (9) A tra's(er o( ?the lease? or o( ?all #$ ri-hts /'&er the lease?2 or a tra's(er i' si#ilar -e'eral ter#s2 is a tra's(er o( ri-hts a'&2 /'less the la'-/a-e or the !ir!/#sta'!es2 as i' a tra's(er (or se!/rit$2 i'&i!ate the !o'trar$2 the tra's(er is a &ele-atio' o( &/ties %$ the tra's(eror to the tra's(eree. A!!e+ta'!e %$ the tra's(eree !o'stit/tes a +ro#ise %$ the tra's(eree to +er(or# those &/ties. The +ro#ise is e'(or!ea%le %$ either the tra's(eror or the other +art$ to the lease !o'tra!t. (:) U'less other1ise a-ree& %$ the lessor a'& the lessee2 a &ele-atio' o( +er(or#a'!e &oes 'ot relie)e the tra's(eror as a-ai'st the other +art$ o( a'$ &/t$ to +er(or# or o( a'$ lia%ilit$ (or &e(a/lt. (;) I' a !o's/#er lease2 to +rohi%it the tra's(er o( a' i'terest o( a +art$ /'&er the lease !o'tra!t or to #a5e a tra's(er a' e)e't o( &e(a/lt2 the la'-/a-e #/st %e s+e!i(i!2 %$ a 1riti'-2 a'& !o's+i!/o/s. 2.-3:1. -9"-ED9E5T *E.-E 47 6443- "G *E--4%. (1) S/%6e!t to Se!tio' *A-.0.2 a s/%se7/e't lessee (ro# a lessor o( -oo&s /'&er a' e,isti'- lease !o'tra!t o%tai's2 to the e,te't o( the leasehol& i'terest tra's(erre&2 the leasehol& i'terest i' the -oo&s that the lessor ha& or ha& +o1er to tra's(er2 a'& e,!e+t as +ro)i&e& i' s/%se!tio' (*) a'& Se!tio' *A-9*;(8)2 ta5es s/%6e!t to the e,isti'- lease !o'tra!t. A lessor 1ith )oi&a%le title has +o1er to tra's(er a -oo& leasehol& i'terest to a -oo& (aith s/%se7/e't lessee (or )al/e2 %/t o'l$ to the e,te't set (orth i' the +re!e&i'- se'te'!e. I( -oo&s ha)e %ee' &eli)ere& /'&er a tra'sa!tio' o( +/r!hase2 the lessor has that +o1er e)e' tho/-h0 (a) the lessorBs tra's(eror 1as &e!ei)e& as to the i&e'tit$ o( the lessor4 (%) the &eli)er$ 1as i' e,!ha'-e (or a !he!5 1hi!h is later &isho'ore&4 (!) it 1as a-ree& that the tra'sa!tio' 1as to %e a ?!ash sale?4 or (&) the &eli)er$ 1as +ro!/re& thro/-h (ra/& +/'isha%le as lar!e'o/s /'&er the !ri#i'al la1. (*) A s/%se7/e't lessee i' the or&i'ar$ !o/rse o( %/si'ess (ro# a lessor 1ho is a #er!ha't &eali'- i' -oo&s o( that 5i'& to 1ho# the -oo&s 1ere e'tr/ste& %$ the e,isti'- lessee o( that lessor %e(ore the i'terest o( the s/%se7/e't lessee %e!a#e e'(or!ea%le a-ai'st that lessor o%tai's2 to the e,te't o( the leasehol& i'terest tra's(erre&2 all o( that lessorBs a'& the e,isti'- lesseeBs ri-hts to the -oo&s2 a'& ta5es (ree o( the e,isti'- lease !o'tra!t. (.) A s/%se7/e't lessee (ro# the lessor o( -oo&s that are s/%6e!t to a' e,isti'- lease !o'tra!t a'& are !o)ere& %$ a !erti(i!ate o( title iss/e& /'&er a stat/te o( this State or o( a'other 6/ris&i!tio' ta5es 'o -reater ri-hts tha' those +ro)i&e& %oth %$ this se!tio' a'& %$ the !erti(i!ate o( title stat/te. 2.-3:(. -.*E 4% -9"*E.-E 47 6443- "G *E--EE.

(1) S/%6e!t to the +ro)isio's o( Se!tio' *A-.0.2 a %/$er or s/%lessee (ro# the lessee o( -oo&s /'&er a' e,isti'- lease !o'tra!t o%tai's2 to the e,te't o( the i'terest tra's(erre&2 the leasehol& i'terest i' the -oo&s that the lessee ha& or ha& +o1er to tra's(er2 a'& e,!e+t as +ro)i&e& i' s/%se!tio' (*) a'& Se!tio' *A-911(8)2 ta5es s/%6e!t to the e,isti'- lease !o'tra!t. A lessee 1ith a )oi&a%le leasehol& i'terest has +o1er to tra's(er a -oo& leasehol& i'terest to a -oo& (aith %/$er (or )al/e or a -oo& (aith s/%lessee (or )al/e2 %/t o'l$ to the e,te't set (orth i' the +re!e&i'- se'te'!e. Che' -oo&s ha)e %ee' &eli)ere& /'&er a tra'sa!tio' o( lease the lessee has that +o1er e)e' tho/-h0 (a) the lessor 1as &e!ei)e& as to the i&e'tit$ o( the lessee4 (%) the &eli)er$ 1as i' e,!ha'-e (or a !he!5 1hi!h is later &isho'ore&4 or (!) the &eli)er$ 1as +ro!/re& thro/-h (ra/& +/'isha%le as lar!e'o/s /'&er the !ri#i'al la1. (*) A %/$er i' the or&i'ar$ !o/rse o( %/si'ess or a s/%lessee i' the or&i'ar$ !o/rse o( %/si'ess (ro# a lessee 1ho is a #er!ha't &eali'- i' -oo&s o( that 5i'& to 1ho# the -oo&s 1ere e'tr/ste& %$ the lessor o%tai's2 to the e,te't o( the i'terest tra's(erre&2 all o( the lessorBs a'& lesseeBs ri-hts to the -oo&s2 a'& ta5es (ree o( the e,isti'- lease !o'tra!t. (.) A %/$er or s/%lessee (ro# the lessee o( -oo&s that are s/%6e!t to a' e,isti'- lease !o'tra!t a'& are !o)ere& %$ a !erti(i!ate o( title iss/e& /'&er a stat/te o( this State or o( a'other 6/ris&i!tio' ta5es 'o -reater ri-hts tha' those +ro)i&e& %oth %$ this se!tio' a'& %$ the !erti(i!ate o( title stat/te. 2.-3:,. %I4%ITG 47 CE%T.I5 *IE5- .%I-I56 "G 4 E%.TI45 47 *.W. I( a +erso' i' the or&i'ar$ !o/rse o( his or her" %/si'ess (/r'ishes ser)i!es or #aterials 1ith res+e!t to -oo&s s/%6e!t to a lease !o'tra!t2 a lie' /+o' those -oo&s i' the +ossessio' o( that +erso' -i)e' %$ stat/te or r/le o( la1 (or those #aterials or ser)i!es ta5es +riorit$ o)er a'$ i'terest o( the lessor or lessee /'&er the lease !o'tra!t or this Arti!le /'less the lie' is !reate& %$ stat/te a'& the stat/te +ro)i&es other1ise or /'less the lie' is !reate& %$ r/le o( la1 a'& the r/le o( la1 +ro)i&es other1ise. 2.-3:7. %I4%ITG 47 *IE5- .%I-I56 "G .TT.C8=E5T 4% *EEG 452 -EC9%ITG I5TE%E-T- I52 .53 4T8E% C*.I=- T4 6443-. (1) E,!e+t as other1ise +ro)i&e& i' Se!tio' *A-.0:2 a !re&itor o( a lessee ta5es s/%6e!t to the lease !o'tra!t. (*) E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (.) a'& i' Se!tio's *A-.0: a'& *A-.0<2 a !re&itor o( a lessor ta5es s/%6e!t to the lease !o'tra!t /'less the !re&itor hol&s a lie' that atta!he& to the -oo&s %e(ore the lease !o'tra!t %e!a#e e'(or!ea%le. (.) E,!e+t as other1ise +ro)i&e& i' Se!tio's A-.1;2 A-.*12 a'& A-.*.2 a lessee ta5es a leasehol& i'terest s/%6e!t to a se!/rit$ i'terest hel& %$ a !re&itor o( the lessor. 2.-3:8. - ECI.* %I68T- 47 C%E3IT4%-. (1) A !re&itor o( a lessor i' +ossessio' o( -oo&s s/%6e!t to a lease !o'tra!t #a$ treat the lease !o'tra!t as )oi& i( as a-ai'st the !re&itor rete'tio' o( +ossessio' %$ the lessor is (ra/&/le't /'&er a'$ stat/te or r/le o( la12 %/t rete'tio' o( +ossessio' i' -oo& (aith a'& !/rre't !o/rse o( tra&e %$ the lessor (or a !o##er!iall$ reaso'a%le ti#e a(ter the lease !o'tra!t %e!o#es e'(or!ea%le is 'ot (ra/&/le't.

(*) Nothi'- i' this Arti!le i#+airs the ri-hts o( !re&itors o( a lessor i( the lease !o'tra!t (a) %e!o#es e'(or!ea%le2 'ot i' !/rre't !o/rse o( tra&e %/t i' satis(a!tio' o( or as se!/rit$ (or a +re-e,isti'- !lai# (or #o'e$2 se!/rit$2 or the li5e2 a'& (%) is #a&e /'&er !ir!/#sta'!es 1hi!h /'&er a'$ stat/te or r/le o( la1 a+art (ro# this Arti!le 1o/l& !o'stit/te the tra'sa!tio' a (ra/&/le't tra's(er or )oi&a%le +re(ere'!e. (.) A !re&itor o( a seller #a$ treat a sale or a' i&e'ti(i!atio' o( -oo&s to a !o'tra!t (or sale as )oi& i( as a-ai'st the !re&itor rete'tio' o( +ossessio' %$ the seller is (ra/&/le't /'&er a'$ stat/te or r/le o( la12 %/t rete'tio' o( +ossessio' o( the -oo&s +/rs/a't to a lease !o'tra!t e'tere& i'to %$ the seller as lessee a'& the %/$er as lessor i' !o''e!tio' 1ith the sale or i&e'ti(i!atio' o( the -oo&s is 'ot (ra/&/le't i( the %/$er %o/-ht (or )al/e a'& i' -oo& (aith. 2.-3:$. *E--4%;- .53 *E--EE;- %I68T- W8E5 6443- "EC4=E 7I?T9%E-. (1) I' this se!tio'0 (a) -oo&s are ?(i,t/res? 1he' the$ %e!o#e so relate& to +arti!/lar real estate that a' i'terest i' the# arises /'&er real estate la14 (%) a ?(i,t/re (ili'-? is the (ili'-2 i' the o((i!e 1here a #ort-a-e o' the real estate 1o/l& %e (ile& or re!or&e& 2 o( a (i'a'!i'- state#e't !o)eri'- -oo&s that are or are to %e!o#e (i,t/res a'& !o'(or#i'- to the re7/ire#e'ts o( Se!tio' A-90*(a) a'& (%)4 (!) a lease is a ?+/r!hase #o'e$ lease? /'less the lessee has +ossessio' or /se o( the -oo&s or the ri-ht to +ossessio' or /se o( the -oo&s %e(ore the lease a-ree#e't is e'(or!ea%le4 (&) a #ort-a-e is a ?!o'str/!tio' #ort-a-e? to the e,te't it se!/res a' o%li-atio' i'!/rre& (or the !o'str/!tio' o( a' i#+ro)e#e't o' la'& i'!l/&i'- the a!7/isitio' !ost o( the la'&2 i( the re!or&e& 1riti'- so i'&i!ates4 a'& (e) ?e'!/#%ra'!e? i'!l/&es real estate #ort-a-es a'& other lie's o' real estate a'& all other ri-hts i' real estate that are 'ot o1'ershi+ i'terests. (*) U'&er this Arti!le a lease #a$ %e o( -oo&s that are (i,t/res or #a$ !o'ti'/e i' -oo&s that %e!o#e (i,t/res2 %/t 'o lease e,ists /'&er this Arti!le o( or&i'ar$ %/il&i'#aterials i'!or+orate& i'to a' i#+ro)e#e't o' la'&. (.) This Arti!le &oes 'ot +re)e't !reatio' o( a lease o( (i,t/res +/rs/a't to real estate la1. (8) The +er(e!te& i'terest o( a lessor o( (i,t/res has +riorit$ o)er a !o'(li!ti'- i'terest o( a' e'!/#%ra'!er or o1'er o( the real estate i(0 (a) the lease is a +/r!hase #o'e$ lease2 the !o'(li!ti'- i'terest o( the e'!/#%ra'!er or o1'er arises %e(ore the -oo&s %e!o#e (i,t/res2 the i'terest o( the lessor is +er(e!te& %$ a (i,t/re (ili'- %e(ore the -oo&s %e!o#e (i,t/res or 1ithi' te' &a$s therea(ter2 a'& the lessee has a' i'terest o( re!or& i' the real estate or is i' +ossessio' o( the real estate4 or (%) the i'terest o( the lessor is +er(e!te& %$ a (i,t/re (ili'- %e(ore the i'terest o( the e'!/#%ra'!er or o1'er is o( re!or&2 the lessorBs i'terest has +riorit$ o)er a'$ !o'(li!ti'i'terest o( a +re&e!essor i' title o( the e'!/#%ra'!er or o1'er2 a'& the lessee has a' i'terest o( re!or& i' the real estate or is i' +ossessio' o( the real estate. (9) The i'terest o( a lessor o( (i,t/res2 1hether or 'ot +er(e!te&2 has +riorit$ o)er the !o'(li!ti'- i'terest o( a' e'!/#%ra'!er or o1'er o( the real estate i(0

(a) the (i,t/res are rea&il$ re#o)a%le (a!tor$ or o((i!e #a!hi'es2 rea&il$ re#o)a%le e7/i+#e't that is 'ot +ri#aril$ /se& or lease& (or /se i' the o+eratio' o( the real estate2 or rea&il$ re#o)a%le re+la!e#e'ts o( &o#esti! a++lia'!es that are -oo&s s/%6e!t to a !o's/#er lease2 a'& %e(ore the -oo&s %e!o#e (i,t/res the lease !o'tra!t is e'(or!ea%le4 or (%) the !o'(li!ti'- i'terest is a lie' o' the real estate o%tai'e& %$ le-al or e7/ita%le +ro!ee&i'-s a(ter the lease !o'tra!t is e'(or!ea%le4 or (!) the e'!/#%ra'!er or o1'er has !o'se'te& i' 1riti'- to the lease or has &is!lai#e& a' i'terest i' the -oo&s as (i,t/res4 or (&) the lessee has a ri-ht to re#o)e the -oo&s as a-ai'st the e'!/#%ra'!er or o1'er. I( the lesseeBs ri-ht to re#o)e ter#i'ates2 the +riorit$ o( the i'terest o( the lessor !o'ti'/es (or a reaso'a%le ti#e. (:) Not1ithsta'&i'- s/%se!tio' (8)(a) %/t other1ise s/%6e!t to s/%se!tio's (8) a'& (9)2 the i'terest o( a lessor o( (i,t/res2 i'!l/&i'- the lessorBs resi&/al i'terest2 is s/%or&i'ate to the !o'(li!ti'- i'terest o( a' e'!/#%ra'!er o( the real estate /'&er a !o'str/!tio' #ort-a-e re!or&e& %e(ore the -oo&s %e!o#e (i,t/res i( the -oo&s %e!o#e (i,t/res %e(ore the !o#+letio' o( the !o'str/!tio'. To the e,te't -i)e' to re(i'a'!e a !o'str/!tio' #ort-a-e2 the !o'(li!ti'- i'terest o( a' e'!/#%ra'!er o( the real estate /'&er a #ort-a-e has this +riorit$ to the sa#e e,te't as the e'!/#%ra'!er o( the real estate /'&er the !o'str/!tio' #ort-a-e. (;) I' !ases 'ot 1ithi' the +re!e&i'- s/%se!tio's2 +riorit$ %et1ee' the i'terest o( a lessor o( (i,t/res2 i'!l/&i'- the lessorBs resi&/al i'terest2 a'& the !o'(li!ti'- i'terest o( a' e'!/#%ra'!er or o1'er o( the real estate 1ho is 'ot the lessee is &eter#i'e& %$ the +riorit$ r/les -o)er'i'- !o'(li!ti'- i'terests i' real estate. (<) I( the i'terest o( a lessor o( (i,t/res2 i'!l/&i'- the lessorBs resi&/al i'terest2 has +riorit$ o)er all !o'(li!ti'- i'terests o( all o1'ers a'& e'!/#%ra'!ers o( the real estate2 the lessor or the lessee #a$ (i) o' &e(a/lt2 e,+iratio'2 ter#i'atio'2 or !a'!ellatio' o( the lease a-ree#e't %/t s/%6e!t to the lease a-ree#e't a'& this Arti!le2 or (ii) i( 'e!essar$ to e'(or!e other ri-hts a'& re#e&ies o( the lessor or lessee /'&er this Arti!le2 re#o)e the -oo&s (ro# the real estate2 (ree a'& !lear o( all !o'(li!ti'- i'terests o( all o1'ers a'& e'!/#%ra'!ers o( the real estate2 %/t the lessor or lessee #/st rei#%/rse a'$ e'!/#%ra'!er or o1'er o( the real estate 1ho is 'ot the lessee a'& 1ho has 'ot other1ise a-ree& (or the !ost o( re+air o( a'$ +h$si!al i'6/r$2 %/t 'ot (or a'$ &i#i'/tio' i' )al/e o( the real estate !a/se& %$ the a%se'!e o( the -oo&s re#o)e& or %$ a'$ 'e!essit$ o( re+la!i'- the#. A +erso' e'title& to rei#%/rse#e't #a$ re(/se +er#issio' to re#o)e /'til the +art$ see5i'- re#o)al -i)es a&e7/ate se!/rit$ (or the +er(or#a'!e o( this o%li-atio'. (A) E)e' tho/-h the lease a-ree#e't &oes 'ot !reate a se!/rit$ i'terest2 the i'terest o( a lessor o( (i,t/res2 i'!l/&i'- the lessorBs resi&/al i'terest2 is +er(e!te& %$ (ili'- a (i'a'!i'- state#e't as a (i,t/re (ili'- (or lease& -oo&s that are or are to %e!o#e (i,t/res i' a!!or&a'!e 1ith the rele)a't +ro)isio's o( the Arti!le o' Se!/re& Tra'sa!tio's (Arti!le A). 2.-31:. *E--4%;- .53 *E--EE;- %I68T- W8E5 6443- "EC4=E .CCE--I45-.

(1) Goo&s are ?a!!essio's? 1he' the$ are i'stalle& i' or a((i,e& to other -oo&s. (*) The i'terest o( a lessor or a lessee /'&er a lease !o'tra!t e'tere& i'to %e(ore the -oo&s %e!a#e a!!essio's is s/+erior to all i'terests i' the 1hole e,!e+t as state& i' s/%se!tio' (8). (.) The i'terest o( a lessor or a lessee /'&er a lease !o'tra!t e'tere& i'to at the ti#e or a(ter the -oo&s %e!a#e a!!essio's is s/+erior to all s/%se7/e'tl$ a!7/ire& i'terests i' the 1hole e,!e+t as state& i' s/%se!tio' (8) %/t is s/%or&i'ate to i'terests i' the 1hole e,isti'- at the ti#e the lease !o'tra!t 1as #a&e /'less the hol&ers o( s/!h i'terests i' the 1hole ha)e i' 1riti'- !o'se'te& to the lease or &is!lai#e& a' i'terest i' the -oo&s as +art o( the 1hole. (8) The i'terest o( a lessor or a lessee /'&er a lease !o'tra!t &es!ri%e& i' s/%se!tio' (*) or (.) is s/%or&i'ate to the i'terest o( (a) a %/$er i' the or&i'ar$ !o/rse o( %/si'ess or a lessee i' the or&i'ar$ !o/rse o( %/si'ess o( a'$ i'terest i' the 1hole a!7/ire& a(ter the -oo&s %e!a#e a!!essio's4 or (%) a !re&itor 1ith a se!/rit$ i'terest i' the 1hole +er(e!te& %e(ore the lease !o'tra!t 1as #a&e to the e,te't that the !re&itor #a5es s/%se7/e't a&)a'!es 1itho/t 5'o1le&-e o( the lease !o'tra!t. (9) Che' /'&er s/%se!tio's (*) or (.) a'& (8) a lessor or a lessee o( a!!essio's hol&s a' i'terest that is s/+erior to all i'terests i' the 1hole2 the lessor or the lessee #a$ (a) o' &e(a/lt2 e,+iratio'2 ter#i'atio'2 or !a'!ellatio' o( the lease !o'tra!t %$ the other +art$ %/t s/%6e!t to the +ro)isio's o( the lease !o'tra!t a'& this Arti!le2 or (%) i( 'e!essar$ to e'(or!e his or her" other ri-hts a'& re#e&ies /'&er this Arti!le2 re#o)e the -oo&s (ro# the 1hole2 (ree a'& !lear o( all i'terests i' the 1hole2 %/t he or she" #/st rei#%/rse a'$ hol&er o( a' i'terest i' the 1hole 1ho is 'ot the lessee a'& 1ho has 'ot other1ise a-ree& (or the !ost o( re+air o( a'$ +h$si!al i'6/r$ %/t 'ot (or a'$ &i#i'/tio' i' )al/e o( the 1hole !a/se& %$ the a%se'!e o( the -oo&s re#o)e& or %$ a'$ 'e!essit$ (or re+la!i'- the#. A +erso' e'title& to rei#%/rse#e't #a$ re(/se +er#issio' to re#o)e /'til the +art$ see5i'- re#o)al -i)es a&e7/ate se!/rit$ (or the +er(or#a'!e o( this o%li-atio'. 2.-311. +riorit$. .%T 1. E%74%=.5CE 47 *E.-E C45T%.CTC %E 93I.TE32 -9"-TIT9TE3 E%74%=.5CE. .53 E?C9-E3 2.-1:1. I5-EC9%ITGC .3ED9.TE .--9%.5CE 47 re!ei)i'- &/e +er(or#a'!e 1ill 'ot %e i#+aire&. (*) I( reaso'a%le -ro/'&s (or i'se!/rit$ arise 1ith res+e!t to the +er(or#a'!e o( either +art$2 the i'se!/re +art$ #a$ &e#a'& i' 1riti'- a&e7/ate ass/ra'!e o( &/e +er(or#a'!e. U'til the i'se!/re +art$ re!ei)es that ass/ra'!e2 i( !o##er!iall$ reaso'a%le the i'se!/re +art$ #a$ s/s+e'& a'$ +er(or#a'!e (or 1hi!h he or she" has 'ot alrea&$ re!ei)e& the a-ree& ret/r'. (.) A re+/&iatio' o( the lease !o'tra!t o!!/rs i( ass/ra'!e o( &/e +er(or#a'!e a&e7/ate /'&er the !ir!/#sta'!es o( the +arti!/lar !ase is 'ot +ro)i&e& to the i'se!/re +art$ (1) A lease !o'tra!t i#+oses a' o%li-atio' o' ea!h +art$ that the otherBs e,+e!tatio' o( %I4%ITG -9"FECT T4 -9"4%3I5.TI45. Nothi'- i' this Arti!le +re)e'ts s/%or&i'atio' %$ a-ree#e't %$ a'$ +erso' e'title& to

1ithi' a reaso'a%le ti#e2 'ot to e,!ee& .0 &a$s a(ter re!ei+t o( a &e#a'& %$ the other +art$. (8) @et1ee' #er!ha'ts2 the reaso'a%le'ess o( -ro/'&s (or i'se!/rit$ a'& the a&e7/a!$ o( a'$ ass/ra'!e o((ere& #/st %e &eter#i'e& a!!or&i'- to !o##er!ial sta'&ar&s. (9) A!!e+ta'!e o( a'$ 'o'!o'(or#i'- &eli)er$ or +a$#e't &oes 'ot +re6/&i!e the a--rie)e& +art$Bs ri-ht to &e#a'& a&e7/ate ass/ra'!e o( (/t/re +er(or#a'!e. 2.-1:2. .5TICI .T4%G %E 93I.TI45. I( either +art$ re+/&iates a lease !o'tra!t 1ith res+e!t to a +er(or#a'!e 'ot $et &/e /'&er the lease !o'tra!t2 the loss o( 1hi!h +er(or#a'!e 1ill s/%sta'tiall$ i#+air the )al/e o( the lease !o'tra!t to the other2 the a--rie)e& +art$ #a$0 (a) (or a !o##er!iall$ reaso'a%le ti#e2 a1ait retra!tio' o( re+/&iatio' a'& +er(or#a'!e %$ the re+/&iati'- +art$4 (%) #a5e &e#a'& +/rs/a't to Se!tio' *A-801 a'& a1ait ass/ra'!e o( (/t/re +er(or#a'!e a&e7/ate /'&er the !ir!/#sta'!es o( the +arti!/lar !ase4 or (!) resort to a'$ ri-ht or re#e&$ /+o' &e(a/lt /'&er the lease !o'tra!t or this Arti!le2 e)e' tho/-h the a--rie)e& +art$ has 'oti(ie& the re+/&iati'- +art$ that the a--rie)e& +art$ 1o/l& a1ait the re+/&iati'- +art$Bs +er(or#a'!e a'& ass/ra'!e a'& has /r-e& retra!tio'. I' a&&itio'2 1hether or 'ot the a--rie)e& +art$ is +/rs/i'- o'e o( the (ore-oi'- re#e&ies2 the a--rie)e& +art$ #a$ s/s+e'& +er(or#a'!e or2 i( the a--rie)e& +art$ is the lessor2 +ro!ee& i' a!!or&a'!e 1ith the +ro)isio's o( this Arti!le o' the lessorBs ri-ht to i&e'ti($ -oo&s to the lease !o'tra!t 'ot1ithsta'&i'- &e(a/lt or to sal)a-e /'(i'ishe& -oo&s (Se!tio' *A-9*8). 2.-1:3. %ET%.CTI45 47 .5TICI .T4%G %E 93I.TI45. (1) U'til the re+/&iati'- +art$Bs 'e,t +er(or#a'!e is &/e2 the re+/&iati'- +art$ !a' retra!t the re+/&iatio' /'less2 si'!e the re+/&iatio'2 the a--rie)e& +art$ has !a'!elle& the lease !o'tra!t or #ateriall$ !ha'-e& the a--rie)e& +art$Bs +ositio' or other1ise i'&i!ate& that the a--rie)e& +art$ !o'si&ers the re+/&iatio' (i'al. (*) Retra!tio' #a$ %e %$ a'$ #etho& that !learl$ i'&i!ates to the a--rie)e& +art$ that the re+/&iati'- +art$ i'te'&s to +er(or# /'&er the lease !o'tra!t a'& i'!l/&es a'$ ass/ra'!e &e#a'&e& /'&er Se!tio' *A-801. (.) Retra!tio' rei'states a re+/&iati'- +art$Bs ri-hts /'&er a lease !o'tra!t 1ith &/e e,!/se a'& allo1a'!e to the a--rie)e& +art$ (or a'$ &ela$ o!!asio'e& %$ the re+/&iatio'. 2.-1:1. -9"-TIT9TE3 E%74%=.5CE. (1) I( 1itho/t (a/lt o( the lessee2 the lessor a'& the s/++lier2 the a-ree& %erthi'-2 loa&i'-2 or /'loa&i'- (a!ilities (ail or the a-ree& t$+e o( !arrier %e!o#es /'a)aila%le or the a-ree& #a''er o( &eli)er$ other1ise %e!o#es !o##er!iall$ i#+ra!ti!a%le2 %/t a !o##er!iall$ reaso'a%le s/%stit/te is a)aila%le2 the s/%stit/te +er(or#a'!e #/st %e te'&ere& a'& a!!e+te&. (*) I( the a-ree& #ea's or #a''er o( +a$#e't (ails %e!a/se o( &o#esti! or (orei-' -o)er'#e'tal re-/latio'0 (a) the lessor #a$ 1ithhol& or sto+ &eli)er$ or !a/se the s/++lier to 1ithhol& or sto+ &eli)er$ /'less the lessee +ro)i&es a #ea's or #a''er o( +a$#e't that is !o##er!iall$ a s/%sta'tial e7/i)ale't4 a'&

(%) i( &eli)er$ has alrea&$ %ee' ta5e'2 +a$#e't %$ the #ea's or i' the #a''er +ro)i&e& %$ the re-/latio' &is!har-es the lesseeBs o%li-atio' /'less the re-/latio' is &is!ri#i'ator$2 o++ressi)e2 or +re&ator$. 2.-1:(. E?C9-E3 E%74%=.5CE. S/%6e!t to Se!tio' *A-808 o' s/%stit/te& +er(or#a'!e2 the (ollo1i'- r/les a++l$0 (a) =ela$ i' &eli)er$ or 'o'&eli)er$ i' 1hole or i' +art %$ a lessor or a s/++lier 1ho !o#+lies 1ith +ara-ra+hs (%) a'& (!) is 'ot a &e(a/lt /'&er the lease !o'tra!t i( +er(or#a'!e as a-ree& has %ee' #a&e i#+ra!ti!a%le %$ the o!!/rre'!e o( a !o'ti'-e'!$ the 'o'o!!/rre'!e o( 1hi!h 1as a %asi! ass/#+tio' o' 1hi!h the lease !o'tra!t 1as #a&e or %$ !o#+lia'!e i' -oo& (aith 1ith a'$ a++li!a%le (orei-' or &o#esti! -o)er'#e'tal re-/latio' or or&er2 1hether or 'ot the re-/latio' or or&er later +ro)es to %e i')ali&. (%) I( the !a/ses #e'tio'e& i' +ara-ra+h (a) a((e!t o'l$ +art o( the lessorBs or the s/++lierBs !a+a!it$ to +er(or#2 he or she" shall allo!ate +ro&/!tio' a'& &eli)eries a#o'- his or her" !/sto#ers %/t at his or her" o+tio' #a$ i'!l/&e re-/lar !/sto#ers 'ot the' /'&er !o'tra!t (or sale or lease as 1ell as his or her" o1' re7/ire#e'ts (or (/rther #a'/(a!t/re. De or she" #a$ so allo!ate i' a'$ #a''er that is (air a'& reaso'a%le. (!) The lessor seaso'a%l$ shall 'oti($ the lessee a'& i' the !ase o( a (i'a'!e lease the s/++lier seaso'a%l$ shall 'oti($ the lessor a'& the lessee2 i( 5'o1'2 that there 1ill %e &ela$ or 'o'&eli)er$ a'&2 i( allo!atio' is re7/ire& /'&er +ara-ra+h (%)2 o( the esti#ate& 7/ota th/s #a&e a)aila%le (or the lessee. 2.-1:,. %4CE39%E 45 E?C9-E3 E%74%=.5CE. (1) I( the lessee re!ei)es 'oti(i!atio' o( a #aterial or i'&e(i'ite &ela$ or a' allo!atio' 6/sti(ie& /'&er Se!tio' *A-8092 the lessee #a$ %$ 1ritte' 'oti(i!atio' to the lessor as to a'$ -oo&s i')ol)e&2 a'& 1ith res+e!t to all o( the -oo&s i( /'&er a' i'stall#e't lease !o'tra!t the )al/e o( the 1hole lease !o'tra!t is s/%sta'tiall$ i#+aire& (Se!tio' *A910)0 (a) ter#i'ate the lease !o'tra!t (Se!tio' *A-909(*))4 or (%) e,!e+t i' a (i'a'!e lease that is 'ot a !o's/#er lease2 #o&i($ the lease !o'tra!t %$ a!!e+ti'- the a)aila%le 7/ota i' s/%stit/tio'2 1ith &/e allo1a'!e (ro# the re't +a$a%le (or the %ala'!e o( the lease ter# (or the &e(i!ie'!$ %/t 1itho/t (/rther ri-ht a-ai'st the lessor. (*) I(2 a(ter re!ei+t o( a 'oti(i!atio' (ro# the lessor /'&er Se!tio' *A-8092 the lessee (ails so to #o&i($ the lease a-ree#e't 1ithi' a reaso'a%le ti#e 'ot e,!ee&i'- .0 &a$s2 the lease !o'tra!t la+ses 1ith res+e!t to a'$ &eli)eries a((e!te&. 2.-1:7. I%%EE4C."*E %4=I-E-C 7I5.5CE *E.-E-. (1) I' the !ase o( a (i'a'!e lease that is 'ot a !o's/#er lease the lesseeBs +ro#ises /'&er the lease !o'tra!t %e!o#e irre)o!a%le a'& i'&e+e'&e't /+o' the lesseeBs a!!e+ta'!e o( the -oo&s. (*) A +ro#ise that has %e!o#e irre)o!a%le a'& i'&e+e'&e't /'&er s/%se!tio' (1)0 (a) is e((e!ti)e a'& e'(or!ea%le %et1ee' the +arties2 a'& %$ or a-ai'st thir& +arties i'!l/&i'- assi-'ees o( the +arties 4 a'&

(%) is 'ot s/%6e!t to !a'!ellatio'2 ter#i'atio'2 #o&i(i!atio'2 re+/&iatio'2 e,!/se2 or s/%stit/tio' 1itho/t the !o'se't o( the +art$ to 1ho# the +ro#ise r/'s. (.) This se!tio' &oes 'ot a((e!t the )ali&it$ /'&er a'$ other la1 o( a !o)e'a't i' a'$ lease !o'tra!t #a5i'- the lesseeBs +ro#ises irre)o!a%le a'& i'&e+e'&e't /+o' the lesseeBs a!!e+ta'!e o( the -oo&s. .%T (. 3E7.9*T .. I5 6E5E%.* 2.-(:1. 3E7.9*TC %4CE39%E. (1) Chether the lessor or the lessee is i' &e(a/lt /'&er a lease !o'tra!t is &eter#i'e& %$ the lease a-ree#e't a'& this Arti!le. (*) I( the lessor or the lessee is i' &e(a/lt /'&er the lease !o'tra!t2 the +art$ see5i'e'(or!e#e't has ri-hts a'& re#e&ies as +ro)i&e& i' this Arti!le a'&2 e,!e+t as li#ite& %$ this Arti!le2 as +ro)i&e& i' the lease a-ree#e't. (.) I( the lessor or the lessee is i' &e(a/lt /'&er the lease !o'tra!t2 the +art$ see5i'e'(or!e#e't #a$ re&/!e the +art$Bs !lai# to 6/&-#e't2 or other1ise e'(or!e the lease !o'tra!t %$ sel(-hel+ or a'$ a)aila%le 6/&i!ial +ro!e&/re or 'o'6/&i!ial +ro!e&/re2 i'!l/&i'- a&#i'istrati)e +ro!ee&i'-2 ar%itratio'2 or the li5e2 i' a!!or&a'!e 1ith this Arti!le. (8) E,!e+t as other1ise +ro)i&e& i' Se!tio' 1-10:(1) or this Arti!le or the lease a-ree#e't2 the ri-hts a'& re#e&ies re(erre& to i' s/%se!tio's (*) a'& (.) are !/#/lati)e. (9) I( the lease a-ree#e't !o)ers %oth real +ro+ert$ a'& -oo&s2 the +art$ see5i'e'(or!e#e't #a$ +ro!ee& /'&er this Part as to the -oo&s2 or /'&er other a++li!a%le la1 as to %oth the real +ro+ert$ a'& the -oo&s i' a!!or&a'!e 1ith that +art$Bs ri-hts a'& re#e&ies i' res+e!t o( the real +ro+ert$2 i' 1hi!h !ase this Part &oes 'ot a++l$. 2.-(:2. 54TICE .7TE% 3E7.9*T. E,!e+t as other1ise +ro)i&e& i' this Arti!le or the lease a-ree#e't2 the lessor or lessee i' &e(a/lt /'&er the lease !o'tra!t is 'ot e'title& to 'oti!e o( &e(a/lt or 'oti!e o( e'(or!e#e't (ro# the other +art$ to the lease a-ree#e't. 2.-(:3. =43I7IC.TI45 4% I= .I%=E5T 47 %I68T- .53 %E=E3IE-. (1) E,!e+t as other1ise +ro)i&e& i' this Arti!le2 the lease a-ree#e't #a$ i'!l/&e ri-hts a'& re#e&ies (or &e(a/lt i' a&&itio' to or i' s/%stit/tio' (or those +ro)i&e& i' this Arti!le a'& #a$ li#it or alter the #eas/re o( &a#a-es re!o)era%le /'&er this Arti!le. (*) Resort to a re#e&$ +ro)i&e& /'&er this Arti!le or i' the lease a-ree#e't is o+tio'al /'less the re#e&$ is e,+ressl$ a-ree& to %e e,!l/si)e. I( !ir!/#sta'!es !a/se a' e,!l/si)e or li#ite& re#e&$ to (ail o( its esse'tial +/r+ose2 or +ro)isio' (or a' e,!l/si)e re#e&$ is /'!o's!io'a%le2 re#e&$ #a$ %e ha& as +ro)i&e& i' this Arti!le. (.) Co'se7/e'tial &a#a-es #a$ %e li7/i&ate& /'&er Se!tio' *A-9082 or #a$ other1ise %e li#ite&2 altere&2 or e,!l/&e& /'less the li#itatio'2 alteratio'2 or e,!l/sio' is /'!o's!io'a%le. Li#itatio'2 alteratio'2 or e,!l/sio' o( !o'se7/e'tial &a#a-es (or i'6/r$ to the +erso' i' the !ase o( !o's/#er -oo&s is +ri#a (a!ie /'!o's!io'a%le %/t li#itatio'2 alteratio'2 or e,!l/sio' o( &a#a-es 1here the loss is !o##er!ial is 'ot +ri#a (a!ie /'!o's!io'a%le.

(8) Ri-hts a'& re#e&ies o' &e(a/lt %$ the lessor or the lessee 1ith res+e!t to a'$ o%li-atio' or +ro#ise !ollateral or a'!illar$ to the lease !o'tra!t are 'ot i#+aire& %$ this Arti!le. 2.-(:1. *ID9I3.TI45 47 3.=.6E-. (1) =a#a-es +a$a%le %$ either +art$ (or &e(a/lt2 or a'$ other a!t or o#issio'2 i'!l/&i'i'&e#'it$ (or loss or &i#i'/tio' o( a'ti!i+ate& ta, %e'e(its or loss or &a#a-e to lessorBs resi&/al i'terest2 #a$ %e li7/i&ate& i' the lease a-ree#e't %/t o'l$ at a' a#o/'t or %$ a (or#/la that is reaso'a%le i' li-ht o( the the' a'ti!i+ate& har# !a/se& %$ the &e(a/lt or other a!t or o#issio'. (*) I( the lease a-ree#e't +ro)i&es (or li7/i&atio' o( &a#a-es2 a'& s/!h +ro)isio' &oes 'ot !o#+l$ 1ith s/%se!tio' (1)2 or s/!h +ro)isio' is a' e,!l/si)e or li#ite& re#e&$ that !ir!/#sta'!es !a/se to (ail o( its esse'tial +/r+ose2 re#e&$ #a$ %e ha& as +ro)i&e& i' this Arti!le. (.) I( the lessor 6/sti(ia%l$ 1ithhol&s or sto+s &eli)er$ o( -oo&s %e!a/se o( the lesseeBs &e(a/lt or i'sol)e'!$ (Se!tio' *A-9*9 or *A-9*:)2 the lessee is e'title& to restit/tio' o( a'$ a#o/'t %$ 1hi!h the s/# o( his or her" +a$#e'ts e,!ee&s0 (a) the a#o/'t to 1hi!h the lessor is e'title& %$ )irt/e o( ter#s li7/i&ati'- the lessorBs &a#a-es i' a!!or&a'!e 1ith s/%se!tio' (1)4 or (%) i' the a%se'!e o( those ter#s2 *0 +er!e't o( the the' +rese't )al/e o( the total re't the lessee 1as o%li-ate& to +a$ (or the %ala'!e o( the lease ter#2 or2 i' the !ase o( a !o's/#er lease2 the lesser o( s/!h a#o/'t or I900. (8) A lesseeBs ri-ht to restit/tio' /'&er s/%se!tio' (.) is s/%6e!t to o((set to the e,te't the lessor esta%lishes0 (a) a ri-ht to re!o)er &a#a-es /'&er the +ro)isio's o( this Arti!le other tha' s/%se!tio' (1)4 a'& (%) the a#o/'t or )al/e o( a'$ %e'e(its re!ei)e& %$ the lessee &ire!tl$ or i'&ire!tl$ %$ reaso' o( the lease !o'tra!t. 2.-(:(. C.5CE**.TI45 .53 TE%=I5.TI45 .53 E77ECT 47 C.5CE**.TI452 TE%=I5.TI452 %E-CI--I452 4% 7%.93 45 %I68T- .53 %E=E3IE-. (1) O' !a'!ellatio' o( the lease !o'tra!t2 all o%li-atio's that are still e,e!/tor$ o' %oth si&es are &is!har-e&2 %/t a'$ ri-ht %ase& o' +rior &e(a/lt or +er(or#a'!e s/r)i)es2 a'& the !a'!elli'- +art$ also retai's a'$ re#e&$ (or &e(a/lt o( the 1hole lease !o'tra!t or a'$ /'+er(or#e& %ala'!e. (*) O' ter#i'atio' o( the lease !o'tra!t2 all o%li-atio's that are still e,e!/tor$ o' %oth si&es are &is!har-e& %/t a'$ ri-ht %ase& o' +rior &e(a/lt or +er(or#a'!e s/r)i)es. (.) U'less the !o'trar$ i'te'tio' !learl$ a++ears2 e,+ressio's o( ?!a'!ellatio'2??res!issio'2? or the li5e o( the lease !o'tra!t #a$ 'ot %e !o'str/e& as a re'/'!iatio' or &is!har-e o( a'$ !lai# i' &a#a-es (or a' a'te!e&e't &e(a/lt. (8) Ri-hts a'& re#e&ies (or #aterial #isre+rese'tatio' or (ra/& i'!l/&e all ri-hts a'& re#e&ies a)aila%le /'&er this Arti!le (or &e(a/lt. (9) Neither res!issio' 'or a !lai# (or res!issio' o( the lease !o'tra!t 'or re6e!tio' or ret/r' o( the -oo&s #a$ %ar or %e &ee#e& i'!o'siste't 1ith a !lai# (or &a#a-es or other ri-ht or re#e&$. 2.-(:,. -T.T9TE 47 *I=IT.TI45-.

(1) A' a!tio' (or &e(a/lt /'&er a lease !o'tra!t2 i'!l/&i'- %rea!h o( 1arra't$ or i'&e#'it$2 #/st %e !o##e'!e& 1ithi' 8 $ears a(ter the !a/se o( a!tio' a!!r/e&. @$ the ori-i'al lease !o'tra!t the +arties #a$ re&/!e the +erio& o( li#itatio' to 'ot less tha' o'e $ear. (*) A !a/se o( a!tio' (or &e(a/lt a!!r/es 1he' the a!t or o#issio' o' 1hi!h the &e(a/lt or %rea!h o( 1arra't$ is %ase& is or sho/l& ha)e %ee' &is!o)ere& %$ the a--rie)e& +art$2 or 1he' the &e(a/lt o!!/rs2 1hi!he)er is later. A !a/se o( a!tio' (or i'&e#'it$ a!!r/es 1he' the a!t or o#issio' o' 1hi!h the !lai# (or i'&e#'it$ is %ase& is or sho/l& ha)e %ee' &is!o)ere& %$ the i'&e#'i(ie& +art$2 1hi!he)er is later. (.) I( a' a!tio' !o##e'!e& 1ithi' the ti#e li#ite& %$ s/%se!tio' (1) is so ter#i'ate& as to lea)e a)aila%le a re#e&$ %$ a'other a!tio' (or the sa#e &e(a/lt or %rea!h o( 1arra't$ or i'&e#'it$2 the other a!tio' #a$ %e !o##e'!e& a(ter the e,+iratio' o( the ti#e li#ite& a'& 1ithi' : #o'ths a(ter the ter#i'atio' o( the (irst a!tio' /'less the ter#i'atio' res/lte& (ro# )ol/'tar$ &is!o'ti'/a'!e or (ro# &is#issal (or (ail/re or 'e-le!t to +rose!/te. (8) This se!tio' &oes 'ot alter the la1 o' tolli'- o( the stat/te o( li#itatio's 'or &oes it a++l$ to !a/ses o( a!tio' that ha)e a!!r/e& %e(ore this Arti!le %e!o#es e((e!ti)e. 2.-(:7. %447 47 =.%HET %E5TC TI=E .53 *.CE. (1) =a#a-es %ase& o' #ar5et re't (Se!tio' *A-91A or *A-9*<) are &eter#i'e& a!!or&i'- to the re't (or the /se o( the -oo&s !o'!er'e& (or a lease ter# i&e'ti!al to the re#ai'i'- lease ter# o( the ori-i'al lease a-ree#e't a'& +re)aili'- at the ti#es s+e!i(ie& i' Se!tio's *A-91A a'& *A-9*<. (*) I( e)i&e'!e o( re't (or the /se o( the -oo&s !o'!er'e& (or a lease ter# i&e'ti!al to the re#ai'i'- lease ter# o( the ori-i'al lease a-ree#e't a'& +re)aili'- at the ti#es or +la!es &es!ri%e& i' this Arti!le is 'ot rea&il$ a)aila%le2 the re't +re)aili'- 1ithi' a'$ reaso'a%le ti#e %e(ore or a(ter the ti#e &es!ri%e& or at a'$ other +la!e or (or a &i((ere't lease ter# 1hi!h i' !o##er!ial 6/&-#e't or /'&er /sa-e o( tra&e 1o/l& ser)e as a reaso'a%le s/%stit/te (or the o'e &es!ri%e& #a$ %e /se&2 #a5i'- a'$ +ro+er allo1a'!e (or the &i((ere'!e2 i'!l/&i'- the !ost o( tra's+orti'- the -oo&s to or (ro# the other +la!e. (.) E)i&e'!e o( a rele)a't re't +re)aili'- at a ti#e or +la!e or (or a lease ter# other tha' the o'e &es!ri%e& i' this Arti!le o((ere& %$ o'e +art$ is 'ot a&#issi%le /'less a'& /'til he or she" has -i)e' the other +art$ 'oti!e the !o/rt (i'&s s/((i!ie't to +re)e't /'(air s/r+rise. (8) I( the +re)aili'- re't or )al/e o( a'$ -oo&s re-/larl$ lease& i' a'$ esta%lishe& #ar5et is i' iss/e2 re+orts i' o((i!ial +/%li!atio's or tra&e 6o/r'als or i' 'e1s+a+ers or +erio&i!als o( -e'eral !ir!/latio' +/%lishe& as the re+orts o( that #ar5et are a&#issi%le i' e)i&e'!e. The !ir!/#sta'!es o( the +re+aratio' o( the re+ort #a$ %e sho1' to a((e!t its 1ei-ht %/t 'ot its a&#issi%ilit$. ". 3E7.9*T "G *E--4% 2.-(:8. *E--EE;- %E=E3IE-. (1) I( a lessor (ails to &eli)er the -oo&s i' !o'(or#it$ to the lease !o'tra!t (Se!tio' *A90A) or re+/&iates the lease !o'tra!t (Se!tio' *A-80*)2 or a lessee ri-ht(/ll$ re6e!ts the -oo&s (Se!tio' *A-90A) or 6/sti(ia%l$ re)o5es a!!e+ta'!e o( the -oo&s (Se!tio' *A-91;)2

the' 1ith res+e!t to a'$ -oo&s i')ol)e&2 a'& 1ith res+e!t to all o( the -oo&s i( /'&er a' i'stall#e't lease !o'tra!t the )al/e o( the 1hole lease !o'tra!t is s/%sta'tiall$ i#+aire& (Se!tio' *A-910)2 the lessor is i' &e(a/lt /'&er the lease !o'tra!t a'& the lessee #a$0 (a) !a'!el the lease !o'tra!t (Se!tio' *A-909(1))4 (%) re!o)er so #/!h o( the re't a'& se!/rit$ as has %ee' +ai& a'& is 6/st /'&er the !ir!/#sta'!es4 (!) !o)er a'& re!o)er &a#a-es as to all -oo&s a((e!te& 1hether or 'ot the$ ha)e %ee' i&e'ti(ie& to the lease !o'tra!t (Se!tio's *A-91< a'& *A-9*0)2 or re!o)er &a#a-es (or 'o'&eli)er$ (Se!tio's *A-91A a'& *A-9*0)4 (&) e,er!ise a'$ other ri-hts or +/rs/e a'$ other re#e&ies +ro)i&e& i' the lease !o'tra!t. (*) I( a lessor (ails to &eli)er the -oo&s i' !o'(or#it$ to the lease !o'tra!t or re+/&iates the lease !o'tra!t2 the lessee #a$ also0 (a) i( the -oo&s ha)e %ee' i&e'ti(ie&2 re!o)er the# (Se!tio' *A-9**)4 or (%) i' a +ro+er !ase2 o%tai' s+e!i(i! +er(or#a'!e or re+le)$ the -oo&s (Se!tio' *A-9*1). (.) I( a lessor is other1ise i' &e(a/lt /'&er a lease !o'tra!t2 the lessee #a$ e,er!ise the ri-hts a'& +/rs/e the re#e&ies +ro)i&e& i' the lease !o'tra!t2 1hi!h #a$ i'!l/&e a ri-ht to !a'!el the lease2 a'& i' Se!tio' *A-91A(.). (8) I( a lessor has %rea!he& a 1arra't$2 1hether e,+ress or i#+lie&2 the lessee #a$ re!o)er &a#a-es (Se!tio' *A-91A(8)). (9) O' ri-ht(/l re6e!tio' or 6/sti(ia%le re)o!atio' o( a!!e+ta'!e2 a lessee has a se!/rit$ i'terest i' -oo&s i' the lesseeBs +ossessio' or !o'trol (or a'$ re't a'& se!/rit$ that has %ee' +ai& a'& a'$ e,+e'ses reaso'a%l$ i'!/rre& i' their i's+e!tio'2 re!ei+t2 tra's+ortatio'2 a'& !are a'& !/sto&$ a'& #a$ hol& those -oo&s a'& &is+ose o( the# i' -oo& (aith a'& i' a !o##er!iall$ reaso'a%le #a''er2 s/%6e!t to Se!tio' *A-9*;(9). (:) S/%6e!t to the +ro)isio's o( Se!tio' *A-80;2 a lessee2 o' 'oti($i'- the lessor o( the lesseeBs i'te'tio' to &o so2 #a$ &e&/!t all or a'$ +art o( the &a#a-es res/lti'- (ro# a'$ &e(a/lt /'&er the lease !o'tra!t (ro# a'$ +art o( the re't still &/e /'&er the sa#e lease !o'tra!t. 2.-(:$. *E--EE;- %I68T- 45 I= %4 E% 3E*IEE%G+ %I68T79* %EFECTI45. (1) S/%6e!t to the +ro)isio's o( Se!tio' *A-910 o' &e(a/lt i' i'stall#e't lease !o'tra!ts2 i( the -oo&s or the te'&er or &eli)er$ (ail i' a'$ res+e!t to !o'(or# to the lease !o'tra!t2 the lessee #a$ re6e!t or a!!e+t the -oo&s or a!!e+t a'$ !o##er!ial /'it or /'its a'& re6e!t the rest o( the -oo&s. (*) Re6e!tio' o( -oo&s is i'e((e!ti)e /'less it is 1ithi' a reaso'a%le ti#e a(ter te'&er or &eli)er$ o( the -oo&s a'& the lessee seaso'a%l$ 'oti(ies the lessor. 2.-(1:. I5-T.**=E5T *E.-E C45T%.CT-C %EFECTI45 .53 3E7.9*T. (1) U'&er a' i'stall#e't lease !o'tra!t a lessee #a$ re6e!t a'$ &eli)er$ that is 'o'!o'(or#i'- i( the 'o'!o'(or#it$ s/%sta'tiall$ i#+airs the )al/e o( that &eli)er$ a'& !a''ot %e !/re& or the 'o'!o'(or#it$ is a &e(e!t i' the re7/ire& &o!/#e'ts4 %/t i( the 'o'!o'(or#it$ &oes 'ot (all 1ithi' s/%se!tio' (*) a'& the lessor or the s/++lier -i)es a&e7/ate ass/ra'!e o( its !/re2 the lessee #/st a!!e+t that &eli)er$. (*) Che'e)er 'o'!o'(or#it$ or &e(a/lt 1ith res+e!t to o'e or #ore &eli)eries s/%sta'tiall$ i#+airs the )al/e o( the i'stall#e't lease !o'tra!t as a 1hole there is a

&e(a/lt 1ith res+e!t to the 1hole. @/t2 the a--rie)e& +art$ rei'states the i'stall#e't lease !o'tra!t as a 1hole i( the a--rie)e& +art$ a!!e+ts a 'o'!o'(or#i'- &eli)er$ 1itho/t seaso'a%l$ 'oti($i'- o( !a'!ellatio' or %ri'-s a' a!tio' 1ith res+e!t o'l$ to +ast &eli)eries or &e#a'&s +er(or#a'!e as to (/t/re &eli)eries. 2.-(11. =E%C8.5T *E--EE;- 39TIE- .- T4 %I68T79**G %EFECTE3 6443-. (1) S/%6e!t to a'$ se!/rit$ i'terest o( a lessee (Se!tio' *A-90<(9))2 i( a lessor or a s/++lier has 'o a-e't or +la!e o( %/si'ess at the #ar5et o( re6e!tio'2 a #er!ha't lessee2 a(ter re6e!tio' o( -oo&s i' his or her" +ossessio' or !o'trol2 shall (ollo1 a'$ reaso'a%le i'str/!tio's re!ei)e& (ro# the lessor or the s/++lier 1ith res+e!t to the -oo&s. I' the a%se'!e o( those i'str/!tio's2 a #er!ha't lessee shall #a5e reaso'a%le e((orts to sell2 lease2 or other1ise &is+ose o( the -oo&s (or the lessorBs a!!o/'t i( the$ threate' to &e!li'e i' )al/e s+ee&il$. I'str/!tio's are 'ot reaso'a%le i( o' &e#a'& i'&e#'it$ (or e,+e'ses is 'ot (orth!o#i'-. (*) I( a #er!ha't lessee (s/%se!tio' (1)) or a'$ other lessee (Se!tio' *A-91*) &is+oses o( -oo&s2 he or she" is e'title& to rei#%/rse#e't either (ro# the lessor or the s/++lier or o/t o( the +ro!ee&s (or reaso'a%le e,+e'ses o( !ari'- (or a'& &is+osi'- o( the -oo&s a'&2 i( the e,+e'ses i'!l/&e 'o &is+ositio' !o##issio'2 to s/!h !o##issio' as is /s/al i' the tra&e2 or i( there is 'o'e2 to a reaso'a%le s/# 'ot e,!ee&i'- 10 +er!e't o( the -ross +ro!ee&s. (.) I' !o#+l$i'- 1ith this se!tio' or Se!tio' *A-91*2 the lessee is hel& o'l$ to -oo& (aith. Goo& (aith !o'&/!t here/'&er is 'either a!!e+ta'!e or !o')ersio' 'or the %asis o( a' a!tio' (or &a#a-es. (8) A +/r!haser 1ho +/r!hases i' -oo& (aith (ro# a lessee +/rs/a't to this se!tio' or Se!tio' *A-91* ta5es the -oo&s (ree o( a'$ ri-hts o( the lessor a'& the s/++lier e)e' tho/-h the lessee (ails to !o#+l$ 1ith o'e or #ore o( the re7/ire#e'ts o( this Arti!le. 2.-(12. *E--EE;- 39TIE- .- T4 %I68T79**G %EFECTE3 6443-. (1) E,!e+t as other1ise +ro)i&e& 1ith res+e!t to -oo&s that threate' to &e!li'e i' )al/e s+ee&il$ (Se!tio' *A-911) a'& s/%6e!t to a'$ se!/rit$ i'terest o( a lessee (Se!tio' *A90<(9))0 (a) the lessee2 a(ter re6e!tio' o( -oo&s i' the lesseeBs +ossessio'2 shall hol& the# 1ith reaso'a%le !are at the lessorBs or the s/++lierBs &is+ositio' (or a reaso'a%le ti#e a(ter the lesseeBs seaso'a%le 'oti(i!atio' o( re6e!tio'4 (%) i( the lessor or the s/++lier -i)es 'o i'str/!tio's 1ithi' a reaso'a%le ti#e a(ter 'oti(i!atio' o( re6e!tio'2 the lessee #a$ store the re6e!te& -oo&s (or the lessorBs or the s/++lierBs a!!o/'t or shi+ the# to the lessor or the s/++lier or &is+ose o( the# (or the lessorBs or the s/++lierBs a!!o/'t 1ith rei#%/rse#e't i' the #a''er +ro)i&e& i' Se!tio' *A-9114 %/t (!) the lessee has 'o (/rther o%li-atio's 1ith re-ar& to -oo&s ri-ht(/ll$ re6e!te&. (*) A!tio' %$ the lessee +/rs/a't to s/%se!tio' (1) is 'ot a!!e+ta'!e or !o')ersio'. 2.-(13. C9%E "G *E--4% 47 I= %4 E% TE53E% 4% 3E*IEE%G+ %E *.CE=E5T. (1) I( a'$ te'&er or &eli)er$ %$ the lessor or the s/++lier is re6e!te& %e!a/se 'o'!o'(or#i'- a'& the ti#e (or +er(or#a'!e has 'ot $et e,+ire&2 the lessor or the s/++lier #a$ seaso'a%l$ 'oti($ the lessee o( the lessorBs or the s/++lierBs i'te'tio' to

!/re a'& #a$ the' #a5e a !o'(or#i'- &eli)er$ 1ithi' the ti#e +ro)i&e& i' the lease !o'tra!t. (*) I( the lessee re6e!ts a 'o'!o'(or#i'- te'&er that the lessor or the s/++lier ha& reaso'a%le -ro/'&s to %elie)e 1o/l& %e a!!e+ta%le 1ith or 1itho/t #o'e$ allo1a'!e2 the lessor or the s/++lier #a$ ha)e a (/rther reaso'a%le ti#e to s/%stit/te a !o'(or#i'te'&er i( he or she" seaso'a%l$ 'oti(ies the lessee. 2.-(11. W.IEE% 47 *E--EE;- 4"FECTI45-. (1) I' re6e!ti'- -oo&s2 a lesseeBs (ail/re to state a +arti!/lar &e(e!t that is as!ertai'a%le %$ reaso'a%le i's+e!tio' +re!l/&es the lessee (ro# rel$i'- o' the &e(e!t to 6/sti($ re6e!tio' or to esta%lish &e(a/lt0 (a) i(2 state& seaso'a%l$2 the lessor or the s/++lier !o/l& ha)e !/re& it (Se!tio' *A-91.)4 or (%) %et1ee' #er!ha'ts i( the lessor or the s/++lier a(ter re6e!tio' has #a&e a re7/est i' 1riti'- (or a (/ll a'& (i'al 1ritte' state#e't o( all &e(e!ts o' 1hi!h the lessee +ro+oses to rel$. (*) A lesseeBs (ail/re to reser)e ri-hts 1he' +a$i'- re't or other !o'si&eratio' a-ai'st &o!/#e'ts +re!l/&es re!o)er$ o( the +a$#e't (or &e(e!ts a++are't i' the &o!/#e'ts. *A-919. ACCEPTANCE O> GOO=S. (1) A!!e+ta'!e o( -oo&s o!!/rs a(ter the lessee has ha& a reaso'a%le o++ort/'it$ to i's+e!t the -oo&s a'& (a) the lessee si-'i(ies or a!ts 1ith res+e!t to the -oo&s i' a #a''er that si-'i(ies to the lessor or the s/++lier that the -oo&s are !o'(or#i'- or that the lessee 1ill ta5e or retai' the# i' s+ite o( their 'o'!o'(or#it$4 or (%) the lessee (ails to #a5e a' e((e!ti)e re6e!tio' o( the -oo&s (Se!tio' *A-90A(*)). (*) A!!e+ta'!e o( a +art o( a'$ !o##er!ial /'it is a!!e+ta'!e o( that e'tire /'it. *A-91:. E>>ECT O> ACCEPTANCE O> GOO=S4 NOTICE O> =E>AULT4 @UR=EN O> ESTA@LISDING =E>AULT A>TER ACCEPTANCE4 NOTICE O> CLAIE OR LITIGATION TO PERSON ANSCERA@LE OVER. (1) A lessee #/st +a$ re't (or a'$ -oo&s a!!e+te& i' a!!or&a'!e 1ith the lease !o'tra!t2 1ith &/e allo1a'!e (or -oo&s ri-ht(/ll$ re6e!te& or 'ot &eli)ere&. (*) A lesseeBs a!!e+ta'!e o( -oo&s +re!l/&es re6e!tio' o( the -oo&s a!!e+te&. I' the !ase o( a (i'a'!e lease2 i( #a&e 1ith 5'o1le&-e o( a 'o'!o'(or#it$2 a!!e+ta'!e !a''ot %e re)o5e& %e!a/se o( it. I' a'$ other !ase2 i( #a&e 1ith 5'o1le&-e o( a

'o'!o'(or#it$2 a!!e+ta'!e !a''ot %e re)o5e& %e!a/se o( it /'less the a!!e+ta'!e 1as o' the reaso'a%le ass/#+tio' that the 'o'!o'(or#it$ 1o/l& %e seaso'a%l$ !/re&. A!!e+ta'!e &oes 'ot o( itsel( i#+air a'$ other re#e&$ +ro)i&e& %$ this Arti!le or the lease a-ree#e't (or 'o'!o'(or#it$. (.) I( a te'&er has %ee' a!!e+te&0 (a) 1ithi' a reaso'a%le ti#e a(ter the lessee &is!o)ers or sho/l& ha)e &is!o)ere& a'$ &e(a/lt2 the lessee shall 'oti($ the lessor a'& the s/++lier2 i( a'$2 or %e %arre& (ro# a'$ re#e&$ a-ai'st the +art$ 'ot 'oti(ie&4 (%) e,!e+t i' the !ase o( a !o's/#er lease2 1ithi' a reaso'a%le ti#e a(ter the lessee re!ei)es 'oti!e o( liti-atio' (or i'(ri'-e#e't or the li5e (Se!tio' *A-*11) the lessee shall 'oti($ the lessor or %e %arre& (ro# a'$ re#e&$ o)er (or lia%ilit$ esta%lishe& %$ the liti-atio'4 a'& (!) the %/r&e' is o' the lessee to esta%lish a'$ &e(a/lt. (8) I( a lessee is s/e& (or %rea!h o( a 1arra't$ or other o%li-atio' (or 1hi!h a lessor or a s/++lier is a's1era%le o)er the (ollo1i'- a++l$0 (a) The lessee #a$ -i)e the lessor or the s/++lier2 or %oth2 1ritte' 'oti!e o( the liti-atio'. I( the 'oti!e states that the +erso' 'oti(ie& #a$ !o#e i' a'& &e(e'& a'& that i( the +erso' 'oti(ie& &oes 'ot &o so that +erso' 1ill %e %o/'& i' a'$ a!tio' a-ai'st that +erso' %$ the lessee %$ a'$ &eter#i'atio' o( (a!t !o##o' to the t1o liti-atio's2 the' /'less the +erso' 'oti(ie& a(ter seaso'a%le re!ei+t o( the 'oti!e &oes !o#e i' a'& &e(e'& that +erso' is so %o/'&. (%) The lessor or the s/++lier #a$ &e#a'& i' 1riti'- that the lessee t/r' o)er !o'trol o( the liti-atio' i'!l/&i'- settle#e't i( the !lai# is o'e (or i'(ri'-e#e't or the li5e (Se!tio' *A-*11) or else %e %arre& (ro# a'$ re#e&$ o)er. I( the &e#a'& states that the lessor or the s/++lier a-rees to %ear all e,+e'se a'& to satis($ a'$ a&)erse 6/&-#e't2 the' /'less the lessee a(ter seaso'a%le re!ei+t o( the &e#a'& &oes t/r' o)er !o'trol the lessee is so %arre&. (9) S/%se!tio's (.) a'& (8) a++l$ to a'$ o%li-atio' o( a lessee to hol& the lessor or the s/++lier har#less a-ai'st i'(ri'-e#e't or the li5e (Se!tio' *A-*11). *A-91;. REVOCATION O> ACCEPTANCE O> GOO=S. (1) A lessee #a$ re)o5e a!!e+ta'!e o( a lot or !o##er!ial /'it 1hose 'o'!o'(or#it$ s/%sta'tiall$ i#+airs its )al/e to the lessee i( the lessee has a!!e+te& it0

(a) e,!e+t i' the !ase o( a (i'a'!e lease2 o' the reaso'a%le ass/#+tio' that its 'o'!o'(or#it$ 1o/l& %e !/re& a'& it has 'ot %ee' seaso'a%l$ !/re&4 or (%) 1itho/t &is!o)er$ o( the 'o'!o'(or#it$ i( the lesseeBs a!!e+ta'!e 1as reaso'a%l$ i'&/!e& either %$ the lessorBs ass/ra'!es or2 e,!e+t i' the !ase o( a (i'a'!e lease2 %$ the &i((i!/lt$ o( &is!o)er$ %e(ore a!!e+ta'!e. (*) E,!e+t i' the !ase o( a (i'a'!e lease that is 'ot a !o's/#er lease2 a lessee #a$ re)o5e a!!e+ta'!e o( a lot or !o##er!ial /'it i( the lessor &e(a/lts /'&er the lease !o'tra!t a'& the &e(a/lt s/%sta'tiall$ i#+airs the )al/e o( that lot or !o##er!ial /'it to the lessee. (.) I( the lease a-ree#e't so +ro)i&es2 the lessee #a$ re)o5e a!!e+ta'!e o( a lot or !o##er!ial /'it %e!a/se o( other &e(a/lts %$ the lessor. (8) Re)o!atio' o( a!!e+ta'!e #/st o!!/r 1ithi' a reaso'a%le ti#e a(ter the lessee &is!o)ers or sho/l& ha)e &is!o)ere& the -ro/'& (or it a'& %e(ore a'$ s/%sta'tial !ha'-e i' !o'&itio' o( the -oo&s 1hi!h is 'ot !a/se& %$ the 'o'!o'(or#it$. Re)o!atio' is 'ot e((e!ti)e /'til the lessee 'oti(ies the lessor o( the +rese't )al/e as o( the sa#e &ate o( the total re't (or the the' re#ai'i'- lease ter# o( the ori-i'al lease a-ree#e't2 a'& (ii) a'$ i'!i&e'tal or !o'se7/e'tial &a#a-es2 less e,+e'ses sa)e& i' !o'se7/e'!e o( the lessorBs &e(a/lt. *A-91<. COVER4 SU@STITUTE GOO=S. (1) A(ter a &e(a/lt %$ a lessor /'&er the lease !o'tra!t o( the t$+e &es!ri%e& i' Se!tio' *A-90<(1)2 or2 i( a-ree&2 a(ter other &e(a/lt %$ the lessor2 the lessee #a$ !o)er %$ #a5i'- a'$ +/r!hase or lease o( or !o'tra!t to +/r!hase or lease -oo&s i' s/%stit/tio' (or those &/e (ro# the lessor. (*) E,!e+t as other1ise +ro)i&e& 1ith res+e!t to &a#a-es li7/i&ate& i' the lease a-ree#e't (Se!tio' *A-908) or other1ise &eter#i'e& +/rs/a't to a-ree#e't o( the +arties (Se!tio's 1-.0* a'& *A-90.)2 i( a lesseeBs !o)er is %$ a lease a-ree#e't s/%sta'tiall$ si#ilar to the ori-i'al lease a-ree#e't a'& the 'e1 lease a-ree#e't is #a&e i' -oo& (aith a'& i' a !o##er!iall$ reaso'a%le #a''er2 the lessee #a$ re!o)er (ro# the lessor as &a#a-es (i) the +rese't )al/e2 as o( the &ate o( the !o##e'!e#e't o( the ter# o( the 'e1 lease a-ree#e't2 o( the re't /'&er the 'e1 lease a-ree#e't a++li!a%le to that +erio& o( the 'e1 lease ter# 1hi!h is !o#+ara%le to the the' re#ai'i'- ter# o( the ori-i'al lease a-ree#e't #i'/s the +rese't )al/e as o( the sa#e &ate o( the total re't (or the the' re#ai'i'- lease ter# o( the ori-i'al lease a-ree#e't2 a'& (ii) a'$ i'!i&e'tal or !o'se7/e'tial &a#a-es2 less e,+e'ses sa)e& i' !o'se7/e'!e o( the lessorBs &e(a/lt.

(.) I( a lesseeBs !o)er is %$ lease a-ree#e't that (or a'$ reaso' &oes 'ot 7/ali($ (or treat#e't /'&er s/%se!tio' (*)2 or is %$ +/r!hase or other1ise2 the lessee #a$ re!o)er (ro# the lessor as i( the lessee ha& ele!te& 'ot to !o)er a'& Se!tio' *A-91A -o)er's. *A-91A. LESSEEBS =AEAGES >OR NON-=ELIVERG2 REPU=IATION2 =E>AULT2 AN= @REACD O> CARRANTG IN REGAR= TO ACCEPTE= GOO=S. (1) E,!e+t as other1ise +ro)i&e& 1ith res+e!t to &a#a-es li7/i&ate& i' the lease a-ree#e't (Se!tio' *A-908) or other1ise &eter#i'e& +/rs/a't to a-ree#e't o( the +arties ( Se!tio's 1-.0* a'& *A-90.)2 i( a lessee ele!ts 'ot to !o)er or a lessee ele!ts to !o)er a'& the !o)er is %$ lease a-ree#e't that (or a'$ reaso' &oes 'ot 7/ali($ (or treat#e't /'&er Se!tio' *A-91<(*)2 or is %$ +/r!hase or other1ise2 the #eas/re o( &a#a-es (or 'o'-&eli)er$ or re+/&iatio' %$ the lessor or (or re6e!tio' or re)o!atio' o( a!!e+ta'!e %$ the lessee is the +rese't )al/e2 as o( the &ate o( the &e(a/lt2 o( the the' #ar5et re't #i'/s the +rese't )al/e as o( the sa#e &ate o( the ori-i'al re't2 !o#+/te& (or the re#ai'i'- lease ter# o( the ori-i'al lease a-ree#e't2 to-ether 1ith i'!i&e'tal a'& !o'se7/e'tial &a#a-es2 less e,+e'ses sa)e& i' !o'se7/e'!e o( the lessorBs &e(a/lt. (*) Ear5et re't is to %e &eter#i'e& as o( the +la!e (or te'&er or2 i' !ases o( re6e!tio' a(ter arri)al or re)o!atio' o( a!!e+ta'!e2 as o( the +la!e o( arri)al. (.) E,!e+t as other1ise a-ree&2 i( the lessee has a!!e+te& -oo&s a'& -i)e' 'oti(i!atio' (Se!tio' *A-91:(.))2 the #eas/re o( &a#a-es (or 'o'-!o'(or#i'- te'&er or &eli)er$ or other &e(a/lt %$ a lessor is the loss res/lti'- i' the or&i'ar$ !o/rse o( e)e'ts (ro# the lessorBs &e(a/lt as &eter#i'e& i' a'$ #a''er that is reaso'a%le to-ether 1ith i'!i&e'tal a'& !o'se7/e'tial &a#a-es2 less e,+e'ses sa)e& i' !o'se7/e'!e o( the lessorBs &e(a/lt. (8) E,!e+t as other1ise a-ree&2 the #eas/re o( &a#a-es (or %rea!h o( 1arra't$ is the +rese't )al/e at the ti#e a'& +la!e o( a!!e+ta'!e o( the &i((ere'!e %et1ee' the )al/e o( the /se o( the -oo&s a!!e+te& a'& the )al/e i( the$ ha& %ee' as 1arra'te& (or the lease ter#2 /'less s+e!ial !ir!/#sta'!es sho1 +ro,i#ate &a#a-es o( a &i((ere't a#o/'t2 to-ether 1ith i'!i&e'tal a'& !o'se7/e'tial &a#a-es2 less e,+e'ses sa)e& i' !o'se7/e'!e o( the lessorBs &e(a/lt or %rea!h o( 1arra't$. *A-9*0. LESSEEBS INCI=ENTAL AN= CONSEKUENTIAL =AEAGES. (1) I'!i&e'tal &a#a-es res/lti'- (ro# a lessorBs &e(a/lt i'!l/&e e,+e'ses reaso'a%l$ i'!/rre& i' i's+e!tio'2 re!ei+t2 tra's+ortatio'2 a'& !are a'& !/sto&$ o( -oo&s ri-ht(/ll$ re6e!te& or -oo&s the a!!e+ta'!e o( 1hi!h is 6/sti(ia%l$ re)o5e&2 a'$ !o##er!iall$ reaso'a%le !har-es2 e,+e'ses or !o##issio's i' !o''e!tio' 1ith e((e!ti'- !o)er2 a'& a'$ other reaso'a%le e,+e'se i'!i&e't to the &e(a/lt. (*) Co'se7/e'tial &a#a-es res/lti'- (ro# a lessorBs &e(a/lt i'!l/&e0

(a) a'$ loss res/lti'- (ro# -e'eral or +arti!/lar re7/ire#e'ts a'& 'ee&s o( 1hi!h the lessor at the ti#e o( !o'tra!ti'- ha& reaso' to 5'o1 a'& 1hi!h !o/l& 'ot reaso'a%l$ %e +re)e'te& %$ !o)er or other1ise4 a'& (%) i'6/r$ to +erso' or +ro+ert$ +ro,i#atel$ res/lti'- (ro# a'$ %rea!h o( 1arra't$. *A-9*1. LESSEEBS RIGDT TO SPECI>IC PER>OREANCE OR REPLEVIN. (1) S+e!i(i! +er(or#a'!e #a$ %e &e!ree& i( the -oo&s are /'i7/e or i' other +ro+er !ir!/#sta'!es. (*) A &e!ree (or s+e!i(i! +er(or#a'!e #a$ i'!l/&e a'$ ter#s a'& !o'&itio's as to +a$#e't o( the re't2 &a#a-es2 or other relie( that the !o/rt &ee#s 6/st. (.) A lessee has a ri-ht o( re+le)i'2 &eti'/e2 se7/estratio'2 !lai# a'& &eli)er$2 or the li5e (or -oo&s i&e'ti(ie& to the lease !o'tra!t i( a(ter reaso'a%le e((ort the lessee is /'a%le to e((e!t !o)er (or those -oo&s or the !ir!/#sta'!es reaso'a%l$ i'&i!ate that the e((ort 1ill %e /'a)aili'-. *A-9**. LESSEEBS RIGDT TO GOO=S ON LESSORBS INSOLVENCG. (1) S/%6e!t to s/%se!tio' (*) a'& e)e' tho/-h the -oo&s ha)e 'ot %ee' shi++e&2 a lessee 1ho has +ai& a +art or all o( the re't a'& se!/rit$ (or -oo&s i&e'ti(ie& to a lease !o'tra!t (Se!tio' *A-*1;) o' #a5i'- a'& 5ee+i'- -oo& a te'&er o( a'$ /'+ai& +ortio' o( the re't a'& se!/rit$ &/e /'&er the lease !o'tra!t #a$ re!o)er the -oo&s i&e'ti(ie& (ro# the lessor i( the lessor %e!o#es i'sol)e't 1ithi' 10 &a$s a(ter re!ei+t o( the (irst i'stall#e't o( re't a'& se!/rit$. (*) A lessee a!7/ires the ri-ht to re!o)er -oo&s i&e'ti(ie& to a lease !o'tra!t o'l$ i( the$ !o'(or# to the lease !o'tra!t. C. =E>AULT @G LESSEE *A-9*.. LESSORBS REEE=IES. (1) I( a lessee 1ro'-(/ll$ re6e!ts or re)o5es a!!e+ta'!e o( -oo&s or (ails to #a5e a +a$#e't 1he' &/e or re+/&iates 1ith res+e!t to a +art or the 1hole2 the'2 1ith res+e!t to a'$ -oo&s i')ol)e&2 a'& 1ith res+e!t to all o( the -oo&s i( /'&er a' i'stall#e't lease !o'tra!t the )al/e o( the 1hole lease !o'tra!t is s/%sta'tiall$ i#+aire& (Se!tio' *A910)2 the lessee is i' &e(a/lt /'&er the lease !o'tra!t a'& the lessor #a$0 (a) !a'!el the lease !o'tra!t (Se!tio' *A-909(1))4 (%) +ro!ee& res+e!ti'- -oo&s 'ot i&e'ti(ie& to the lease !o'tra!t (Se!tio' *A-9*8)4

(!) 1ithhol& &eli)er$ o( the -oo&s a'& ta5e +ossessio' o( -oo&s +re)io/sl$ &eli)ere& (Se!tio' *A-9*9)4 (&) sto+ &eli)er$ o( the -oo&s %$ a'$ %ailee (Se!tio' *A-9*:)4 (e) &is+ose o( the -oo&s a'& re!o)er &a#a-es (Se!tio' *A-9*;)2 or retai' the -oo&s a'& re!o)er &a#a-es (Se!tio' *A-9*<)2 or i' a +ro+er !ase re!o)er re't (Se!tio' *A9*A)4 (() e,er!ise a'$ other ri-hts or +/rs/e a'$ other re#e&ies +ro)i&e& i' the lease !o'tra!t. (*) I( a lessor &oes 'ot (/ll$ e,er!ise a ri-ht or o%tai' a re#e&$ to 1hi!h the lessor is e'title& /'&er s/%se!tio' (1)2 the lessor #a$ re!o)er the loss res/lti'- i' the or&i'ar$ !o/rse o( e)e'ts (ro# the lesseeBs &e(a/lt as &eter#i'e& i' a'$ reaso'a%le #a''er2 to-ether 1ith i'!i&e'tal &a#a-es2 less e,+e'ses sa)e& i' !o'se7/e'!e o( the lesseeBs &e(a/lt. (.) I( a lessee is other1ise i' &e(a/lt /'&er a lease !o'tra!t2 the lessor #a$ e,er!ise the ri-hts a'& +/rs/e the re#e&ies +ro)i&e& i' the lease !o'tra!t 2 1hi!h #a$ i'!l/&e a ri-ht to !a'!el the lease. I' a&&itio'2 /'less other1ise +ro)i&e& i' the lease !o'tra!t0 (a) i( the &e(a/lt s/%sta'tiall$ i#+airs the )al/e o( the lease !o'tra!t to the lessor2 the lessor #a$ e,er!ise the ri-hts a'& +/rs/e the re#e&ies +ro)i&e& i' s/%se!tio's (1) or (*)4 or (%) i( the &e(a/lt &oes 'ot s/%sta'tiall$ i#+air the )al/e o( the lease !o'tra!t to the lessor2 the lessor #a$ re!o)er as +ro)i&e& i' s/%se!tio' (*). *A-9*8. LESSORBS RIGDT TO I=ENTI>G GOO=S TO LEASE CONTRACT. (1) A(ter &e(a/lt %$ the lessee /'&er the lease !o'tra!t o( the t$+e &es!ri%e& i' Se!tio' *A-9*.(1) or Se!tio' *A-9*.(.)(a) or2 i( a-ree&2 a(ter other &e(a/lt %$ the lessee2 the lessor #a$0 (a) i&e'ti($ to the lease !o'tra!t !o'(or#i'- -oo&s 'ot alrea&$ i&e'ti(ie& i( at the ti#e the lessor lear'e& o( the &e(a/lt the$ 1ere i' the lessorBs or the s/++lierBs +ossessio' or !o'trol4 a'& (%) &is+ose o( -oo&s (Se!tio' *A-9*;(1)) that &e#o'stra%l$ ha)e %ee' i'te'&e& (or the +arti!/lar lease !o'tra!t e)e' tho/-h those -oo&s are /'(i'ishe&.

(*) I( the -oo&s are /'(i'ishe&2 i' the e,er!ise o( reaso'a%le !o##er!ial 6/&-#e't (or the +/r+oses o( a)oi&i'- loss a'& o( e((e!ti)e reali3atio'2 a' a--rie)e& lessor or the s/++lier #a$ either !o#+lete #a'/(a!t/re a'& 1holl$ i&e'ti($ the -oo&s to the lease !o'tra!t or !ease #a'/(a!t/re a'& lease2 sell2 or other1ise &is+ose o( the -oo&s (or s!ra+ or sal)a-e )al/e or +ro!ee& i' a'$ other reaso'a%le #a''er. *A-9*9. LESSORBS RIGDT TO POSSESSION O> GOO=S. (1) I( a lessor &is!o)ers the lessee to %e i'sol)e't2 the lessor #a$ re(/se to &eli)er the -oo&s. (*) A(ter a &e(a/lt %$ the lessee /'&er the lease !o'tra!t o( the t$+e &es!ri%e& i' Se!tio' *A-9*.(1) or *A-9*.(.)(a) or2 i( a-ree&2 a(ter other &e(a/lt %$ the lessee2 the lessor has the ri-ht to ta5e +ossessio' o( the -oo&s. I( the lease !o'tra!t so +ro)i&es2 the lessor #a$ re7/ire the lessee to asse#%le the -oo&s a'& #a5e the# a)aila%le to the lessor at a +la!e to %e &esi-'ate& %$ the lessor 1hi!h is reaso'a%l$ !o')e'ie't to %oth +arties. Citho/t re#o)al2 the lessor #a$ re'&er /'/sa%le a'$ -oo&s e#+lo$e& i' tra&e or %/si'ess2 a'& #a$ &is+ose o( -oo&s o' the lesseeBs +re#ises (Se!tio' *A-9*;). (.) The lessor #a$ +ro!ee& /'&er s/%se!tio' (*) 1itho/t 6/&i!ial +ro!ess i( it !a' %e &o'e 1itho/t %rea!h o( the +ea!e or the lessor #a$ +ro!ee& %$ a!tio'. *A-9*:. LESSORBS STOPPAGE O> =ELIVERG IN TRANSIT OR OTDERCISE. (1) A lessor #a$ sto+ &eli)er$ o( -oo&s i' the +ossessio' o( a !arrier or other %ailee i( the lessor &is!o)ers the lessee to %e i'sol)e't a'& #a$ sto+ &eli)er$ o( !arloa&2 tr/!5loa&2 +la'eloa&2 or lar-er shi+#e'ts o( e,+ress or (rei-ht i( the lessee re+/&iates or (ails to #a5e a +a$#e't &/e %e(ore &eli)er$2 1hether (or re't2 se!/rit$ or other1ise /'&er the lease !o'tra!t2 or (or a'$ other reaso' the lessor has a ri-ht to 1ithhol& or ta5e +ossessio' o( the -oo&s. (*) I' +/rs/i'- its re#e&ies /'&er s/%se!tio' (1)2 the lessor #a$ sto+ &eli)er$ /'til (a) re!ei+t o( the -oo&s %$ the lessee4 (%) a!5'o1le&-#e't to the lessee %$ a'$ %ailee o( the -oo&s2 e,!e+t a !arrier2 that the %ailee hol&s the -oo&s (or the lessee4 or (!) s/!h a' a!5'o1le&-#e't to the lessee %$ a !arrier )ia reshi+#e't or as 1areho/se. (.)(a) To sto+ &eli)er$2 a lessor shall so 'oti($ as to e'a%le the %ailee %$ reaso'a%le &ili-e'!e to +re)e't &eli)er$ o( the -oo&s.

(%) A(ter 'oti(i!atio'2 the %ailee shall hol& a'& &eli)er the -oo&s a!!or&i'- to the &ire!tio's o( the lessor2 %/t the lessor is lia%le to the %ailee (or a'$ e's/i'- !har-es or &a#a-es. (!) A !arrier 1ho has iss/e& a 'o''e-otia%le %ill o( la&i'- is 'ot o%li-e& to o%e$ a 'oti(i!atio' to sto+ re!ei)e& (ro# a +erso' other tha' the !o'si-'or. *A-9*;. LESSORBS RIGDTS TO =ISPOSE O> GOO=S. (1) A(ter a &e(a/lt %$ a lessee /'&er the lease !o'tra!t o( the t$+e &es!ri%e& i' Se!tio' *A-9*.(1) or *A-9*.(.)(a) or a(ter the lessor re(/ses to &eli)er or ta5es +ossessio' o( -oo&s (Se!tio' *A-9*9 or *A-9*:)2 or2 i( a-ree&2 a(ter other &e(a/lt %$ a lessee2 the lessor #a$ &is+ose o( the -oo&s !o'!er'e& or the /'&eli)ere& %ala'!e thereo( %$ lease2 sale2 or other1ise. (*) E,!e+t as other1ise +ro)i&e& 1ith res+e!t to &a#a-es li7/i&ate& i' the lease a-ree#e't (Se!tio' *A-908) or other1ise &eter#i'e& +/rs/a't to a-ree#e't o( the +arties ( Se!tio's 1-.0* a'& *A-90.)2 i( the &is+ositio' is %$ lease a-ree#e't s/%sta'tiall$ si#ilar to the ori-i'al lease a-ree#e't a'& the 'e1 lease a-ree#e't is #a&e i' -oo& (aith a'& i' a !o##er!iall$ reaso'a%le #a''er2 the lessor #a$ re!o)er (ro# the lessee as &a#a-es (i) a!!r/e& a'& /'+ai& re't as o( the &ate o( the !o##e'!e#e't o( the ter# o( the 'e1 lease a-ree#e't2 (ii) the +rese't )al/e2 as o( the sa#e &ate2 o( the total re't (or the the' re#ai'i'- lease ter# o( the ori-i'al lease a-ree#e't #i'/s the +rese't )al/e2 as o( the sa#e &ate2 o( the re't /'&er the 'e1 lease a-ree#e't a++li!a%le to that +erio& o( the 'e1 lease ter# 1hi!h is !o#+ara%le to the the' re#ai'i'- ter# o( the ori-i'al lease a-ree#e't2 a'& (iii) a'$ i'!i&e'tal &a#a-es allo1e& /'&er Se!tio' *A-9.02 less e,+e'ses sa)e& i' !o'se7/e'!e o( the lesseeBs &e(a/lt. (.) I( the lessorBs &is+ositio' is %$ lease a-ree#e't that (or a'$ reaso' &oes 'ot 7/ali($ (or treat#e't /'&er s/%se!tio' (*)2 or is %$ sale or other1ise2 the lessor #a$ re!o)er (ro# the lessee as i( the lessor ha& ele!te& 'ot to &is+ose o( the -oo&s a'& Se!tio' *A9*< -o)er's. (8) A s/%se7/e't %/$er or lessee 1ho %/$s or leases (ro# the lessor i' -oo& (aith (or )al/e as a res/lt o( a &is+ositio' /'&er this se!tio' ta5es the -oo&s (ree o( the ori-i'al lease !o'tra!t a'& a'$ ri-hts o( the ori-i'al lessee e)e' tho/-h the lessor (ails to !o#+l$ 1ith o'e or #ore o( the re7/ire#e'ts o( this Arti!le. (9) The lessor is 'ot a!!o/'ta%le to the lessee (or a'$ +ro(it #a&e o' a'$ &is+ositio'. A lessee 1ho has ri-ht(/ll$ re6e!te& or 6/sti(ia%l$ re)o5e& a!!e+ta'!e shall a!!o/'t to the lessor (or a'$ e,!ess o)er the a#o/'t o( the lesseeBs se!/rit$ i'terest (Se!tio' *A90<(9)).

 *A-9*<. LESSORBS =AEAGES >OR NON-ACCEPTANCE2 >AILURE TO PAG2 REPU=IATION2 OR OTDER =E>AULT. (1) E,!e+t as other1ise +ro)i&e& 1ith res+e!t to &a#a-es li7/i&ate& i' the lease a-ree#e't (Se!tio' *A-908) or other1ise &eter#i'e& +/rs/a't to a-ree#e't o( the +arties ( Se!tio's 1-.0* a'& *A-90.)2 i( a lessor ele!ts to retai' the -oo&s or a lessor ele!ts to &is+ose o( the -oo&s a'& the &is+ositio' is %$ lease a-ree#e't that (or a'$ reaso' &oes 'ot 7/ali($ (or treat#e't /'&er Se!tio' *A-9*;(*)2 or is %$ sale or other1ise2 the lessor #a$ re!o)er (ro# the lessee as &a#a-es (or a &e(a/lt o( the t$+e &es!ri%e& i' Se!tio' *A-9*.(1) or *A-9*.(.)(a)2 or2 i( a-ree&2 (or other &e(a/lt o( the lessee2 (i) a!!r/e& a'& /'+ai& re't as o( the &ate o( &e(a/lt i( the lessee has 'e)er ta5e' +ossessio' o( the -oo&s2 or2 i( the lessee has ta5e' +ossessio' o( the -oo&s2 as o( the &ate the lessor re+ossesses the -oo&s or a' earlier &ate o' 1hi!h the lessee #a5es a te'&er o( the -oo&s to the lessor2 (ii) the +rese't )al/e as o( the &ate &eter#i'e& /'&er !la/se (i) o( the total re't (or the the' re#ai'i'- lease ter# o( the ori-i'al lease a-ree#e't #i'/s the +rese't )al/e as o( the sa#e &ate o( the #ar5et re't at the +la!e 1here the -oo&s are lo!ate& !o#+/te& (or the sa#e lease ter#2 a'& (iii) a'$ i'!i&e'tal &a#a-es allo1e& /'&er Se!tio' *A-9.02 less e,+e'ses sa)e& i' !o'se7/e'!e o( the lesseeBs &e(a/lt. (*) I( the #eas/re o( &a#a-es +ro)i&e& i' s/%se!tio' (1) is i'a&e7/ate to +/t a lessor i' as -oo& a +ositio' as +er(or#a'!e 1o/l& ha)e2 the #eas/re o( &a#a-es is the +rese't )al/e o( the +ro(it2 i'!l/&i'- reaso'a%le o)erhea&2 the lessor 1o/l& ha)e #a&e (ro# (/ll +er(or#a'!e %$ the lessee2 to-ether 1ith a'$ i'!i&e'tal &a#a-es allo1e& /'&er Se!tio' *A-9.02 &/e allo1a'!e (or !osts reaso'a%l$ i'!/rre& a'& &/e !re&it (or +a$#e'ts or +ro!ee&s o( &is+ositio'. *A-9*A. LESSORBS ACTION >OR TDE RENT. (1) A(ter &e(a/lt %$ the lessee /'&er the lease !o'tra!t o( the t$+e &es!ri%e& i' Se!tio' *A-9*.(1)) or *A-9*.(.)(a) or2 i( a-ree&2 a(ter other &e(a/lt %$ the lessee2 i( the lessor !o#+lies 1ith s/%se!tio' (*)2 the lessor #a$ re!o)er (ro# the lessee as &a#a-es0 (a) (or -oo&s a!!e+te& %$ the lessee a'& 'ot re+ossesse& %$ or te'&ere& to the lessor2 a'& (or !o'(or#i'- -oo&s lost or &a#a-e& 1ithi' a !o##er!iall$ reaso'a%le ti#e a(ter ris5 o( loss +asses to the lessee (Se!tio' *A-*1A)2 (i) a!!r/e& a'& /'+ai& re't as o( the &ate o( e'tr$ o( 6/&-#e't i' (a)or o( the lessor2 (ii) the +rese't )al/e as o( the sa#e &ate o( the re't (or the the' re#ai'i'- lease ter# o( the lease a-ree#e't2 a'& (iii) a'$ i'!i&e'tal &a#a-es allo1e& /'&er Se!tio' *A-9.02 less e,+e'ses sa)e& i' !o'se7/e'!e o( the lesseeBs &e(a/lt4 a'& (%) (or -oo&s i&e'ti(ie& to the lease !o'tra!t i( the lessor is /'a%le a(ter reaso'a%le e((ort to &is+ose o( the# at a reaso'a%le +ri!e or the !ir!/#sta'!es reaso'a%l$ i'&i!ate that e((ort 1ill %e /'a)aili'-2 (i) a!!r/e& a'& /'+ai& re't as o( the &ate o( e'tr$ o(

6/&-#e't i' (a)or o( the lessor2 (ii) the +rese't )al/e as o( the sa#e &ate o( the re't (or the the' re#ai'i'- lease ter# o( the lease a-ree#e't2 a'& (iii) a'$ i'!i&e'tal &a#a-es allo1e& /'&er Se!tio' *A-9.02 less e,+e'ses sa)e& i' !o'se7/e'!e o( the lesseeBs &e(a/lt. (*) E,!e+t as +ro)i&e& i' s/%se!tio' (.)2 the lessor shall hol& (or the lessee (or the re#ai'i'- lease ter# o( the lease a-ree#e't a'$ -oo&s that ha)e %ee' i&e'ti(ie& to the lease !o'tra!t a'& are i' the lessorBs !o'trol. (.) The lessor #a$ &is+ose o( the -oo&s at a'$ ti#e %e(ore !olle!tio' o( the 6/&-#e't (or &a#a-es o%tai'e& +/rs/a't to s/%se!tio' (1). I( the &is+ositio' is %e(ore the e'& o( the re#ai'i'- lease ter# o( the lease a-ree#e't2 the lessorBs re!o)er$ a-ai'st the lessee (or &a#a-es is -o)er'e& %$ Se!tio' *A-9*; or Se!tio' *A-9*<2 a'& the lessor 1ill !a/se a' a++ro+riate !re&it to %e +ro)i&e& a-ai'st a 6/&-#e't (or &a#a-es to the e,te't that the a#o/'t o( the 6/&-#e't e,!ee&s the re!o)er$ a)aila%le +/rs/a't to Se!tio' *A-9*; or *A-9*<. (8) Pa$#e't o( the 6/&-#e't (or &a#a-es o%tai'e& +/rs/a't to s/%se!tio' (1) e'titles the lessee to the /se a'& +ossessio' o( the -oo&s 'ot the' &is+ose& o( (or the re#ai'i'lease ter# o( a'& i' a!!or&a'!e 1ith the lease a-ree#e't. (9) A(ter &e(a/lt %$ the lessee /'&er the lease !o'tra!t o( the t$+e &es!ri%e& i' Se!tio' *A-9*.(1) or Se!tio' *A-9*.(.)(a) or2 i( a-ree&2 a(ter other &e(a/lt %$ the lessee2 a lessor 1ho is hel& 'ot e'title& to re't /'&er this se!tio' #/st 'e)ertheless %e a1ar&e& &a#a-es (or 'o'-a!!e+ta'!e /'&er Se!tio' *A-9*; or Se!tio' *A-9*<. *A-9.0. LESSORBS INCI=ENTAL =AEAGES. I'!i&e'tal &a#a-es to a' a--rie)e& lessor i'!l/&e a'$ !o##er!iall$ reaso'a%le !har-es2 e,+e'ses2 or !o##issio's i'!/rre& i' sto++i'- &eli)er$2 i' the tra's+ortatio'2 !are a'& !/sto&$ o( -oo&s a(ter the lesseeBs &e(a/lt2 i' !o''e!tio' 1ith ret/r' or &is+ositio' o( the -oo&s2 or other1ise res/lti'- (ro# the &e(a/lt. *A-9.1. STAN=ING TO SUE TDIR= PARTIES >OR INHURG TO GOO=S. (1) I( a thir& +art$ so &eals 1ith -oo&s that ha)e %ee' i&e'ti(ie& to a lease !o'tra!t as to !a/se a!tio'a%le i'6/r$ to a +art$ to the lease !o'tra!t (a) the lessor has a ri-ht o( a!tio' a-ai'st the thir& +art$2 a'& (%) the lessee also has a ri-ht o( a!tio' a-ai'st the thir& +art$ i( the lessee0 (i) has a se!/rit$ i'terest i' the -oo&s4 (ii) has a' i's/ra%le i'terest i' the -oo&s4 or

(iii) %ears the ris5 o( loss /'&er the lease !o'tra!t or has si'!e the i'6/r$ ass/#e& that ris5 as a-ai'st the lessor a'& the -oo&s ha)e %ee' !o')erte& or &estro$e&. (*) I( at the ti#e o( the i'6/r$ the +art$ +lai'ti(( &i& 'ot %ear the ris5 o( loss as a-ai'st the other +art$ to the lease !o'tra!t a'& there is 'o arra'-e#e't %et1ee' the# (or &is+ositio' o( the re!o)er$2 his or her" s/it or settle#e't2 s/%6e!t to his or her" o1' i'terest2 is as a (i&/!iar$ (or the other +art$ to the lease !o'tra!t. (.) Either +art$ 1ith the !o'se't o( the other #a$ s/e (or the %e'e(it o( 1ho# it #a$ !o'!er'. *A-9.*. LESSORBS RIGDTS TO RESI=UAL INTEREST. I' a&&itio' to a'$ other re!o)er$ +er#itte& %$ this Arti!le or other la12 the lessor #a$ re!o)er (ro# the lessee a' a#o/'t that 1ill (/ll$ !o#+e'sate the lessor (or a'$ loss o( or &a#a-e to the lessorBs resi&/al i'terest i' the -oo&s !a/se& %$ the &e(a/lt o( the lessee. U.C.C. - ARTICLE . - NEGOTIA@LE INSTRUEENTS PART 1. GENERAL PROVISIONS AN= =E>INITIONS .-101. SDORT TITLE. This Arti!le #a$ %e !ite& as U'i(or# Co##er!ial Co&e -- Ne-otia%le I'str/#e'ts. .-10*. SU@HECT EATTER. (a) This Arti!le a++lies to 'e-otia%le i'str/#e'ts. It &oes 'ot a++l$ to #o'e$2 to +a$#e't or&ers -o)er'e& %$ Arti!le 8A2 or to se!/rities -o)er'e& %$ Arti!le <. (%) I( there is !o'(li!t %et1ee' this Arti!le a'& Arti!le 8 or A2 Arti!les 8 a'& A -o)er'. (!) Re-/latio's o( the @oar& o( Go)er'ors o( the >e&eral Reser)e S$ste# a'& o+erati'!ir!/lars o( the >e&eral Reser)e @a'5s s/+erse&e a'$ i'!o'siste't +ro)isio' o( this Arti!le to the e,te't o( the i'!o'siste'!$. .-10.. =E>INITIONS. (a) I' this Arti!le0 (1) ?A!!e+tor? #ea's a &ra1ee 1ho has a!!e+te& a &ra(t.

(*) ?Co's/#er a!!o/'t? #ea's a' a!!o/'t esta%lishe& %$ a' i'&i)i&/al +ri#aril$ (or +erso'al2 (a#il$2 or ho/sehol& +/r+oses. (.) ?Co's/#er tra'sa!tio'? #ea's a tra'sa!tio' i' 1hi!h a' i'&i)i&/al i'!/rs a' o%li-atio' +ri#aril$ (or +erso'al2 (a#il$2 or ho/sehol& +/r+oses. (8) ?=ra1ee? #ea's a +erso' or&ere& i' a &ra(t to #a5e +a$#e't. (9) ?=ra1er? #ea's a +erso' 1ho si-'s or is i&e'ti(ie& i' a &ra(t as a +erso' or&eri'+a$#e't. (:) reser)e&"

(;) ?Ea5er? #ea's a +erso' 1ho si-'s or is i&e'ti(ie& i' a 'ote as a +erso' /'&erta5i'to +a$. (<) ?Or&er? #ea's a 1ritte' i'str/!tio' to +a$ #o'e$ si-'e& %$ the +erso' -i)i'- the i'str/!tio'. The i'str/!tio' #a$ %e a&&resse& to a'$ +erso'2 i'!l/&i'- the +erso' -i)i'- the i'str/!tio'2 or to o'e or #ore +erso's 6oi'tl$ or i' the alter'ati)e %/t 'ot i' s/!!essio'. A' a/thori3atio' to +a$ is 'ot a' or&er /'less the +erso' a/thori3e& to +a$ is also i'str/!te& to +a$. (A) ?Or&i'ar$ !are? i' the !ase o( a +erso' e'-a-e& i' %/si'ess #ea's o%ser)a'!e o( reaso'a%le !o##er!ial sta'&ar&s2 +re)aili'- i' the area i' 1hi!h the +erso' is lo!ate&2 1ith res+e!t to the %/si'ess i' 1hi!h the +erso' is e'-a-e&. I' the !ase o( a %a'5 that ta5es a' i'str/#e't (or +ro!essi'- (or !olle!tio' or +a$#e't %$ a/to#ate& #ea's2 reaso'a%le !o##er!ial sta'&ar&s &o 'ot re7/ire the %a'5 to e,a#i'e the i'str/#e't i( the (ail/re to e,a#i'e &oes 'ot )iolate the %a'5Bs +res!ri%e& +ro!e&/res a'& the %a'5Bs +ro!e&/res &o 'ot )ar$ /'reaso'a%l$ (ro# -e'eral %a'5i'- /sa-e 'ot &isa++ro)e& %$ this Arti!le or Arti!le 8. (10) ?Part$? #ea's a +art$ to a' i'str/#e't. (11) ?Pri'!i+al o%li-or2? 1ith res+e!t to a' i'str/#e't2 #ea's the a!!o##o&ate& +art$ or a'$ other +art$ to the i'str/#e't a-ai'st 1ho# a se!o'&ar$ o%li-or has re!o/rse /'&er this arti!le. (1*) ?Pro#ise? #ea's a 1ritte' /'&erta5i'- to +a$ #o'e$ si-'e& %$ the +erso' /'&erta5i'- to +a$. A' a!5'o1le&-#e't o( a' o%li-atio' %$ the o%li-or is 'ot a +ro#ise /'less the o%li-or also /'&erta5es to +a$ the o%li-atio'. (1.) ?Pro)e? 1ith res+e!t to a (a!t #ea's to #eet the %/r&e' o( esta%lishi'- the (a!t (Se!tio' 1-*01(%)(<)).

(18)

reser)e&"

(19) ?Re#itter? #ea's a +erso' 1ho +/r!hases a' i'str/#e't (ro# its iss/er i( the i'str/#e't is +a$a%le to a' i&e'ti(ie& +erso' other tha' the +/r!haser. (1:) ?Re#otel$-!reate& !o's/#er ite#? #ea's a' ite# &ra1' o' a !o's/#er a!!o/'t2 1hi!h is 'ot !reate& %$ the +a$or %a'5 a'& &oes 'ot %ear a ha'&1ritte' si-'at/re +/r+orti'- to %e the si-'at/re o( the &ra1er. (1;) ?Se!o'&ar$ o%li-or2? 1ith res+e!t to a' i'str/#e't2 #ea's (a) a' i'&orser or a' a!!o##o&atio' +art$2 (%) a &ra1er ha)i'- the o%li-atio' &es!ri%e& i' Se!tio' .-818(&)2 or (!) a'$ other +art$ to the i'str/#e't that has re!o/rse a-ai'st a'other +art$ to the i'str/#e't +/rs/a't to Se!tio' .-11:(%). (%) Other &e(i'itio's a++l$i'- to this Arti!le a'& the se!tio's i' 1hi!h the$ a++ear are0 ?A!!e+ta'!e? Se!tio' .-80A Se!tio' .-81A Se!tio' .-81A

?A!!o##o&ate& +art$? ?A!!o##o&atio' +art$? ?A!!o/'t? ?Alteratio'?

Se!tio' 8-108 Se!tio' .-80; Se!tio' .-*09

?A'o#alo/s i'&orse#e't? ?@la'5 i'&orse#e't? ?CashierBs !he!5?

Se!tio' .-*09

Se!tio' .-108 Se!tio' .-108

?Certi(i!ate o( &e+osit? ?Certi(ie& !he!5? ?Che!5?

Se!tio' .-80A

Se!tio' .-108 Se!tio' .-.0.

?Co'si&eratio'? ?=ra(t?

Se!tio' .-108 Se!tio' .-.0*

?Dol&er i' &/e !o/rse?

?I'!o#+lete i'str/#e't? ?I'&orse#e't? ?I'&orser? ?I'str/#e't? ?Iss/e? ?Iss/er?

Se!tio' .-119

Se!tio' .-*08

Se!tio' .-*08 Se!tio' .-108

Se!tio' .-109 Se!tio' .-109 Se!tio' .-108

?Ne-otia%le i'str/#e't? ?Ne-otiatio'? ?Note?

Se!tio' .-*01

Se!tio' .-108 Se!tio' .-10<

?Pa$a%le at a &e(i'ite ti#e? ?Pa$a%le o' &e#a'&? ?Pa$a%le to %earer? ?Pa$a%le to or&er? ?Pa$#e't?

Se!tio' .-10< Se!tio' .-10A

Se!tio' .-10A

Se!tio' .-:0* Se!tio' .-.01

?Perso' e'title& to e'(or!e? ?Prese't#e't? ?Rea!7/isitio'?

Se!tio' .-901 Se!tio' .-*0; Se!tio' .-*09

?S+e!ial i'&orse#e't? ?TellerBs !he!5?

Se!tio' .-108 Se!tio' .-*0.

?Tra's(er o( i'str/#e't? ?Tra)elerBs !he!5? ?Val/e?

Se!tio' .-108

Se!tio' .-.0.

(!) The (ollo1i'- &e(i'itio's i' other Arti!les a++l$ to this Arti!le0 ?@a'5i'- &a$? ?Cleari'- ho/se? ?Colle!ti'- %a'5? ?=e+ositar$ %a'5? ?=o!/#e'tar$ &ra(t? ?I'ter#e&iar$ %a'5? ?Ite#? Se!tio' 8-108 Se!tio' 8-108 Se!tio' 8-109 Se!tio' 8-109 Se!tio' 8-108 Se!tio' 8-109

Se!tio' 8-108 Se!tio' 8-109 Se!tio' 8-108

?Pa$or %a'5?

?S/s+e'&s +a$#e'ts?

(&) I' a&&itio'2 Arti!le 1 !o'tai's -e'eral &e(i'itio's a'& +ri'!i+les o( !o'str/!tio' a'& i'ter+retatio' a++li!a%le thro/-ho/t this Arti!le. .-108. NEGOTIA@LE INSTRUEENT. (a) E,!e+t as +ro)i&e& i' s/%se!tio's (!) a'& (&)2 ?'e-otia%le i'str/#e't? #ea's a' /'!o'&itio'al +ro#ise or or&er to +a$ a (i,e& a#o/'t o( #o'e$2 1ith or 1itho/t i'terest or other !har-es &es!ri%e& i' the +ro#ise or or&er2 i( it0 (1) is +a$a%le to %earer or to or&er at the ti#e it is iss/e& or (irst !o#es i'to +ossessio' o( a hol&er4 (*) is +a$a%le o' &e#a'& or at a &e(i'ite ti#e4 a'& (.) &oes 'ot state a'$ other /'&erta5i'- or i'str/!tio' %$ the +erso' +ro#isi'- or or&eri'- +a$#e't to &o a'$ a!t i' a&&itio' to the +a$#e't o( #o'e$2 %/t the +ro#ise or or&er #a$ !o'tai' (i) a' /'&erta5i'- or +o1er to -i)e2 #ai'tai'2 or +rote!t !ollateral to se!/re +a$#e't2 (ii) a' a/thori3atio' or +o1er to the hol&er to !o'(ess 6/&-#e't or reali3e o' or &is+ose o( !ollateral2 or (iii) a 1ai)er o( the %e'e(it o( a'$ la1 i'te'&e& (or the a&)a'ta-e or +rote!tio' o( a' o%li-or. (%) ?I'str/#e't? #ea's a 'e-otia%le i'str/#e't.

(!) A' or&er that #eets all o( the re7/ire#e'ts o( s/%se!tio' (a)2 e,!e+t +ara-ra+h (1)2 a'& other1ise (alls 1ithi' the &e(i'itio' o( ?!he!5? i' s/%se!tio' (() is a 'e-otia%le i'str/#e't a'& a !he!5. (&) A +ro#ise or or&er other tha' a !he!5 is 'ot a' i'str/#e't i(2 at the ti#e it is iss/e& or (irst !o#es i'to +ossessio' o( a hol&er2 it !o'tai's a !o's+i!/o/s state#e't2 ho1e)er e,+resse&2 to the e((e!t that the +ro#ise or or&er is 'ot 'e-otia%le or is 'ot a' i'str/#e't -o)er'e& %$ this Arti!le. (e) A' i'str/#e't is a ?'ote? i( it is a +ro#ise a'& is a ?&ra(t? i( it is a' or&er. I( a' i'str/#e't (alls 1ithi' the &e(i'itio' o( %oth ?'ote? a'& ?&ra(t2? a +erso' e'title& to e'(or!e the i'str/#e't #a$ treat it as either. (() ?Che!5? #ea's (i) a &ra(t2 other tha' a &o!/#e'tar$ &ra(t2 +a$a%le o' &e#a'& a'& &ra1' o' a %a'5 or (ii) a !ashierBs !he!5 or tellerBs !he!5. A' i'str/#e't #a$ %e a !he!5 e)e' tho/-h it is &es!ri%e& o' its (a!e %$ a'other ter#2 s/!h as ?#o'e$ or&er.? (-) ?CashierBs !he!5? #ea's a &ra(t 1ith res+e!t to 1hi!h the &ra1er a'& &ra1ee are the sa#e %a'5 or %ra'!hes o( the sa#e %a'5. (h) ?TellerBs !he!5? #ea's a &ra(t &ra1' %$ a %a'5 (i) o' a'other %a'52 or (ii) +a$a%le at or thro/-h a %a'5. (i) ?Tra)elerBs !he!5? #ea's a' i'str/#e't that (i) is +a$a%le o' &e#a'&2 (ii) is &ra1' o' or +a$a%le at or thro/-h a %a'52 (iii) is &esi-'ate& %$ the ter# ?tra)elerBs !he!5? or %$ a s/%sta'tiall$ si#ilar ter#2 a'& (i)) re7/ires2 as a !o'&itio' to +a$#e't2 a !o/'tersi-'at/re %$ a +erso' 1hose s+e!i#e' si-'at/re a++ears o' the i'str/#e't. (6) ?Certi(i!ate o( &e+osit? #ea's a' i'str/#e't !o'tai'i'- a' a!5'o1le&-#e't %$ a %a'5 that a s/# o( #o'e$ has %ee' re!ei)e& %$ the %a'5 a'& a +ro#ise %$ the %a'5 to re+a$ the s/# o( #o'e$. A !erti(i!ate o( &e+osit is a 'ote o( the %a'5. .-109. ISSUE O> INSTRUEENT. (a) ?Iss/e? #ea's the (irst &eli)er$ o( a' i'str/#e't %$ the #a5er or &ra1er2 1hether to a hol&er or 'o'hol&er2 (or the +/r+ose o( -i)i'- ri-hts o' the i'str/#e't to a'$ +erso'. (%) A' /'iss/e& i'str/#e't2 or a' /'iss/e& i'!o#+lete i'str/#e't that is !o#+lete&2 is %i'&i'- o' the #a5er or &ra1er2 %/t 'o'iss/a'!e is a &e(e'se. A' i'str/#e't that is !o'&itio'all$ iss/e& or is iss/e& (or a s+e!ial +/r+ose is %i'&i'- o' the #a5er or &ra1er2 %/t (ail/re o( the !o'&itio' or s+e!ial +/r+ose to %e (/l(ille& is a &e(e'se.

(!) ?Iss/er? a++lies to iss/e& a'& /'iss/e& i'str/#e'ts a'& #ea's a #a5er or &ra1er o( a' i'str/#e't. .-10:. UNCON=ITIONAL PROEISE OR OR=ER. (a) E,!e+t as +ro)i&e& i' this se!tio'2 (or the +/r+oses o( Se!tio' .-108(a)2 a +ro#ise or or&er is /'!o'&itio'al /'less it states (i) a' e,+ress !o'&itio' to +a$#e't2 (ii) that the +ro#ise or or&er is s/%6e!t to or -o)er'e& %$ a'other re!or&2 or (iii) that ri-hts or o%li-atio's 1ith res+e!t to the +ro#ise or or&er are state& i' a'other re!or&. A re(ere'!e to a'other re!or& &oes 'ot o( itsel( #a5e the +ro#ise or or&er !o'&itio'al. (%) A +ro#ise or or&er is 'ot #a&e !o'&itio'al (i) %$ a re(ere'!e to a'other re!or& (or a state#e't o( ri-hts 1ith res+e!t to !ollateral2 +re+a$#e't2 or a!!eleratio'2 or (ii) %e!a/se +a$#e't is li#ite& to resort to a +arti!/lar (/'& or so/r!e. (!) I( a +ro#ise or or&er re7/ires2 as a !o'&itio' to +a$#e't2 a !o/'tersi-'at/re %$ a +erso' 1hose s+e!i#e' si-'at/re a++ears o' the +ro#ise or or&er2 the !o'&itio' &oes 'ot #a5e the +ro#ise or or&er !o'&itio'al (or the +/r+oses o( Se!tio' .-108(a). I( the +erso' 1hose s+e!i#e' si-'at/re a++ears o' a' i'str/#e't (ails to !o/'tersi-' the i'str/#e't2 the (ail/re to !o/'tersi-' is a &e(e'se to the o%li-atio' o( the iss/er2 %/t the (ail/re &oes 'ot +re)e't a tra's(eree o( the i'str/#e't (ro# %e!o#i'- a hol&er o( the i'str/#e't. (&) I( a +ro#ise or or&er at the ti#e it is iss/e& or (irst !o#es i'to +ossessio' o( a hol&er !o'tai's a state#e't2 re7/ire& %$ a++li!a%le stat/tor$ or a&#i'istrati)e la12 to the e((e!t that the ri-hts o( a hol&er or tra's(eree are s/%6e!t to !lai#s or &e(e'ses that the iss/er !o/l& assert a-ai'st the ori-i'al +a$ee2 the +ro#ise or or&er is 'ot there%$ #a&e !o'&itio'al (or the +/r+oses o( Se!tio' .-108(a)4 %/t i( the +ro#ise or or&er is a' i'str/#e't2 there !a''ot %e a hol&er i' &/e !o/rse o( the i'str/#e't. .-10;. INSTRUEENT PAGA@LE IN >OREIGN EONEG. U'less the i'str/#e't other1ise +ro)i&es2 a' i'str/#e't that states the a#o/'t +a$a%le i' (orei-' #o'e$ #a$ %e +ai& i' the (orei-' #o'e$ or i' a' e7/i)ale't a#o/'t i' &ollars !al!/late& %$ /si'- the !/rre't %a'5-o((ere& s+ot rate at the +la!e o( +a$#e't (or the +/r!hase o( &ollars o' the &a$ o' 1hi!h the i'str/#e't is +ai&. .-10<. PAGA@LE ON =EEAN= OR AT =E>INITE TIEE. (a) A +ro#ise or or&er is ?+a$a%le o' &e#a'&? i( it (i) states that it is +a$a%le o' &e#a'& or at si-ht2 or other1ise i'&i!ates that it is +a$a%le at the 1ill o( the hol&er2 or (ii) &oes 'ot state a'$ ti#e o( +a$#e't.

(%) A +ro#ise or or&er is ?+a$a%le at a &e(i'ite ti#e? i( it is +a$a%le o' ela+se o( a &e(i'ite +erio& o( ti#e a(ter si-ht or a!!e+ta'!e or at a (i,e& &ate or &ates or at a ti#e or ti#es rea&il$ as!ertai'a%le at the ti#e the +ro#ise or or&er is iss/e&2 s/%6e!t to ri-hts o( (i) +re+a$#e't2 (ii) a!!eleratio'2 (iii) e,te'sio' at the o+tio' o( the hol&er2 or (i)) e,te'sio' to a (/rther &e(i'ite ti#e at the o+tio' o( the #a5er or a!!e+tor or a/to#ati!all$ /+o' or a(ter a s+e!i(ie& a!t or e)e't. (!) I( a' i'str/#e't2 +a$a%le at a (i,e& &ate2 is also +a$a%le /+o' &e#a'& #a&e %e(ore the (i,e& &ate2 the i'str/#e't is +a$a%le o' &e#a'& /'til the (i,e& &ate a'&2 i( &e#a'& (or +a$#e't is 'ot #a&e %e(ore that &ate2 %e!o#es +a$a%le at a &e(i'ite ti#e o' the (i,e& &ate. .-10A. PAGA@LE TO @EARER OR TO OR=ER. (a) A +ro#ise or or&er is +a$a%le to %earer i( it0 (1) states that it is +a$a%le to %earer or to the or&er o( %earer or other1ise i'&i!ates that the +erso' i' +ossessio' o( the +ro#ise or or&er is e'title& to +a$#e't4 (*) &oes 'ot state a +a$ee4 or (.) states that it is +a$a%le to or to the or&er o( !ash or other1ise i'&i!ates that it is 'ot +a$a%le to a' i&e'ti(ie& +erso'. (%) A +ro#ise or or&er that is 'ot +a$a%le to %earer is +a$a%le to or&er i( it is +a$a%le (i) to the or&er o( a' i&e'ti(ie& +erso' or (ii) to a' i&e'ti(ie& +erso' or or&er. A +ro#ise or or&er that is +a$a%le to or&er is +a$a%le to the i&e'ti(ie& +erso'.

(!) A' i'str/#e't +a$a%le to %earer #a$ %e!o#e +a$a%le to a' i&e'ti(ie& +erso' i( it is s+e!iall$ i'&orse& +/rs/a't to Se!tio' .-*09(a). A' i'str/#e't +a$a%le to a' i&e'ti(ie& +erso' #a$ %e!o#e +a$a%le to %earer i( it is i'&orse& i' %la'5 +/rs/a't to Se!tio' .*09(%). .-110. I=ENTI>ICATION O> PERSON TO CDOE INSTRUEENT IS PAGA@LE. (a) The +erso' to 1ho# a' i'str/#e't is i'itiall$ +a$a%le is &eter#i'e& %$ the i'te't o( the +erso'2 1hether or 'ot a/thori3e&2 si-'i'- as2 or i' the 'a#e or %ehal( o(2 the iss/er o( the i'str/#e't. The i'str/#e't is +a$a%le to the +erso' i'te'&e& %$ the si-'er e)e' i( that +erso' is i&e'ti(ie& i' the i'str/#e't %$ a 'a#e or other i&e'ti(i!atio' that is 'ot that o( the i'te'&e& +erso'. I( #ore tha' o'e +erso' si-'s i' the 'a#e or %ehal( o( the iss/er o( a' i'str/#e't a'& all the si-'ers &o 'ot i'te'& the sa#e +erso' as +a$ee2 the i'str/#e't is +a$a%le to a'$ +erso' i'te'&e& %$ o'e or #ore o( the si-'ers.

(%) I( the si-'at/re o( the iss/er o( a' i'str/#e't is #a&e %$ a/to#ate& #ea's2 s/!h as a !he!5-1riti'- #a!hi'e2 the +a$ee o( the i'str/#e't is &eter#i'e& %$ the i'te't o( the +erso' 1ho s/++lie& the 'a#e or i&e'ti(i!atio' o( the +a$ee2 1hether or 'ot a/thori3e& to &o so. (!) A +erso' to 1ho# a' i'str/#e't is +a$a%le #a$ %e i&e'ti(ie& i' a'$ 1a$2 i'!l/&i'%$ 'a#e2 i&e'ti($i'- '/#%er2 o((i!e2 or a!!o/'t '/#%er. >or the +/r+ose o( &eter#i'i'the hol&er o( a' i'str/#e't2 the (ollo1i'- r/les a++l$0 (1) I( a' i'str/#e't is +a$a%le to a' a!!o/'t a'& the a!!o/'t is i&e'ti(ie& o'l$ %$ '/#%er2 the i'str/#e't is +a$a%le to the +erso' to 1ho# the a!!o/'t is +a$a%le. I( a' i'str/#e't is +a$a%le to a' a!!o/'t i&e'ti(ie& %$ '/#%er a'& %$ the 'a#e o( a +erso'2 the i'str/#e't is +a$a%le to the 'a#e& +erso'2 1hether or 'ot that +erso' is the o1'er o( the a!!o/'t i&e'ti(ie& %$ '/#%er. (*) I( a' i'str/#e't is +a$a%le to0 (i) a tr/st2 a' estate2 or a +erso' &es!ri%e& as tr/stee or re+rese'tati)e o( a tr/st or estate2 the i'str/#e't is +a$a%le to the tr/stee2 the re+rese'tati)e2 or a s/!!essor o( either2 1hether or 'ot the %e'e(i!iar$ or estate is also 'a#e&4 (ii) a +erso' &es!ri%e& as a-e't or si#ilar re+rese'tati)e o( a 'a#e& or i&e'ti(ie& +erso'2 the i'str/#e't is +a$a%le to the re+rese'te& +erso'2 the re+rese'tati)e2 or a s/!!essor o( the re+rese'tati)e4 (iii) a (/'& or or-a'i3atio' that is 'ot a le-al e'tit$2 the i'str/#e't is +a$a%le to a re+rese'tati)e o( the #e#%ers o( the (/'& or or-a'i3atio'4 or (i)) a' o((i!e or to a +erso' &es!ri%e& as hol&i'- a' o((i!e2 the i'str/#e't is +a$a%le to the 'a#e& +erso'2 the i'!/#%e't o( the o((i!e2 or a s/!!essor to the i'!/#%e't. (&) I( a' i'str/#e't is +a$a%le to t1o or #ore +erso's alter'ati)el$2 it is +a$a%le to a'$ o( the# a'& #a$ %e 'e-otiate&2 &is!har-e&2 or e'(or!e& %$ a'$ or all o( the# i' +ossessio' o( the i'str/#e't. I( a' i'str/#e't is +a$a%le to t1o or #ore +erso's 'ot alter'ati)el$2 it is +a$a%le to all o( the# a'& #a$ %e 'e-otiate&2 &is!har-e&2 or e'(or!e& o'l$ %$ all o( the#. I( a' i'str/#e't +a$a%le to t1o or #ore +erso's is a#%i-/o/s as to 1hether it is +a$a%le to the +erso's alter'ati)el$2 the i'str/#e't is +a$a%le to the +erso's alter'ati)el$. .-111. PLACE O> PAGEENT. E,!e+t as other1ise +ro)i&e& (or ite#s i' Arti!le 82 a' i'str/#e't is +a$a%le at the +la!e o( +a$#e't state& i' the i'str/#e't. I( 'o +la!e o( +a$#e't is state&2 a' i'str/#e't is +a$a%le at the a&&ress o( the &ra1ee or #a5er state& i' the i'str/#e't. I( 'o a&&ress

is state&2 the +la!e o( +a$#e't is the +la!e o( %/si'ess o( the &ra1ee or #a5er. I( a &ra1ee or #a5er has #ore tha' o'e +la!e o( %/si'ess2 the +la!e o( +a$#e't is a'$ +la!e o( %/si'ess o( the &ra1ee or #a5er !hose' %$ the +erso' e'title& to e'(or!e the i'str/#e't. I( the &ra1ee or #a5er has 'o +la!e o( %/si'ess2 the +la!e o( +a$#e't is the resi&e'!e o( the &ra1ee or #a5er. .-11*. INTEREST. (a) U'less other1ise +ro)i&e& i' the i'str/#e't2 (i) a' i'str/#e't is 'ot +a$a%le 1ith i'terest2 a'& (ii) i'terest o' a' i'terest-%eari'- i'str/#e't is +a$a%le (ro# the &ate o( the i'str/#e't. (%) I'terest #a$ %e state& i' a' i'str/#e't as a (i,e& or )aria%le a#o/'t o( #o'e$ or it #a$ %e e,+resse& as a (i,e& or )aria%le rate or rates. The a#o/'t or rate o( i'terest #a$ %e state& or &es!ri%e& i' the i'str/#e't i' a'$ #a''er a'& #a$ re7/ire re(ere'!e to i'(or#atio' 'ot !o'tai'e& i' the i'str/#e't. I( a' i'str/#e't +ro)i&es (or i'terest2 %/t the a#o/'t o( i'terest +a$a%le !a''ot %e as!ertai'e& (ro# the &es!ri+tio'2 i'terest is +a$a%le at the 6/&-#e't rate i' e((e!t at the +la!e o( +a$#e't o( the i'str/#e't a'& at the ti#e i'terest (irst a!!r/es. .-11.. =ATE O> INSTRUEENT. (a) A' i'str/#e't #a$ %e a'te&ate& or +ost&ate&. The &ate state& &eter#i'es the ti#e o( +a$#e't i( the i'str/#e't is +a$a%le at a (i,e& +erio& a(ter &ate. E,!e+t as +ro)i&e& i' Se!tio' 8-801(!)2 a' i'str/#e't +a$a%le o' &e#a'& is 'ot +a$a%le %e(ore the &ate o( the i'str/#e't. (%) I( a' i'str/#e't is /'&ate&2 its &ate is the &ate o( its iss/e or2 i' the !ase o( a' /'iss/e& i'str/#e't2 the &ate it (irst !o#es i'to +ossessio' o( a hol&er. .-118. CONTRA=ICTORG TERES O> INSTRUEENT. I( a' i'str/#e't !o'tai's !o'tra&i!tor$ ter#s2 t$+e1ritte' ter#s +re)ail o)er +ri'te& ter#s2 ha'&1ritte' ter#s +re)ail o)er %oth2 a'& 1or&s +re)ail o)er '/#%ers. .-119. INCOEPLETE INSTRUEENT. (a) ?I'!o#+lete i'str/#e't? #ea's a si-'e& 1riti'-2 1hether or 'ot iss/e& %$ the si-'er2 the !o'te'ts o( 1hi!h sho1 at the ti#e o( si-'i'- that it is i'!o#+lete %/t that the si-'er i'te'&e& it to %e !o#+lete& %$ the a&&itio' o( 1or&s or '/#%ers. (%) S/%6e!t to s/%se!tio' (!)2 i( a' i'!o#+lete i'str/#e't is a' i'str/#e't /'&er Se!tio' .-1082 it #a$ %e e'(or!e& a!!or&i'- to its ter#s i( it is 'ot !o#+lete&2 or a!!or&i'- to its ter#s as a/-#e'te& %$ !o#+letio'. I( a' i'!o#+lete i'str/#e't is 'ot

a' i'str/#e't /'&er Se!tio' .-1082 %/t2 a(ter !o#+letio'2 the re7/ire#e'ts o( Se!tio' .-108 are #et2 the i'str/#e't #a$ %e e'(or!e& a!!or&i'- to its ter#s as a/-#e'te& %$ !o#+letio'. (!) I( 1or&s or '/#%ers are a&&e& to a' i'!o#+lete i'str/#e't 1itho/t a/thorit$ o( the si-'er2 there is a' alteratio' o( the i'!o#+lete i'str/#e't /'&er Se!tio' .-80;. (&) The %/r&e' o( esta%lishi'- that 1or&s or '/#%ers 1ere a&&e& to a' i'!o#+lete i'str/#e't 1itho/t a/thorit$ o( the si-'er is o' the +erso' asserti'- the la!5 o( a/thorit$. .-11:. HOINT AN= SEVERAL LIA@ILITG4 CONTRI@UTION. (a) E,!e+t as other1ise +ro)i&e& i' the i'str/#e't2 t1o or #ore +erso's 1ho ha)e the sa#e lia%ilit$ o' a' i'str/#e't as #a5ers2 &ra1ers2 a!!e+tors2 i'&orsers 1ho i'&orse as 6oi't +a$ees2 or a'o#alo/s i'&orsers are 6oi'tl$ a'& se)erall$ lia%le i' the !a+a!it$ i' 1hi!h the$ si-'. (%) E,!e+t as +ro)i&e& i' Se!tio' .-81A(e) or %$ a-ree#e't o( the a((e!te& +arties2 a +art$ ha)i'- 6oi't a'& se)eral lia%ilit$ 1ho +a$s the i'str/#e't is e'title& to re!ei)e (ro# a'$ +art$ ha)i'- the sa#e 6oi't a'& se)eral lia%ilit$ !o'tri%/tio' i' a!!or&a'!e 1ith a++li!a%le la1. .-11;. OTDER AGREEEENTS A>>ECTING INSTRUEENT. S/%6e!t to a++li!a%le la1 re-ar&i'- e,!l/sio' o( +roo( o( !o'te#+ora'eo/s or +re)io/s a-ree#e'ts2 the o%li-atio' o( a +art$ to a' i'str/#e't to +a$ the i'str/#e't #a$ %e #o&i(ie&2 s/++le#e'te&2 or '/lli(ie& %$ a se+arate a-ree#e't o( the o%li-or a'& a +erso' e'title& to e'(or!e the i'str/#e't2 i( the i'str/#e't is iss/e& or the o%li-atio' is i'!/rre& i' relia'!e o' the a-ree#e't or as +art o( the sa#e tra'sa!tio' -i)i'- rise to the a-ree#e't. To the e,te't a' o%li-atio' is #o&i(ie&2 s/++le#e'te&2 or '/lli(ie& %$ a' a-ree#e't /'&er this se!tio'2 the a-ree#e't is a &e(e'se to the o%li-atio'. .-11<. STATUTE O> LIEITATIONS. (a) E,!e+t as +ro)i&e& i' s/%se!tio' (e)2 a' a!tio' to e'(or!e the o%li-atio' o( a +art$ to +a$ a 'ote +a$a%le at a &e(i'ite ti#e #/st %e !o##e'!e& 1ithi' si, $ears a(ter the &/e &ate or &ates state& i' the 'ote or2 i( a &/e &ate is a!!elerate&2 1ithi' si, $ears a(ter the a!!elerate& &/e &ate. (%) E,!e+t as +ro)i&e& i' s/%se!tio' (&) or (e)2 i( &e#a'& (or +a$#e't is #a&e to the #a5er o( a 'ote +a$a%le o' &e#a'&2 a' a!tio' to e'(or!e the o%li-atio' o( a +art$ to +a$ the 'ote #/st %e !o##e'!e& 1ithi' si, $ears a(ter the &e#a'&. I( 'o &e#a'& (or

+a$#e't is #a&e to the #a5er2 a' a!tio' to e'(or!e the 'ote is %arre& i( 'either +ri'!i+al 'or i'terest o' the 'ote has %ee' +ai& (or a !o'ti'/o/s +erio& o( 10 $ears. (!) E,!e+t as +ro)i&e& i' s/%se!tio' (&)2 a' a!tio' to e'(or!e the o%li-atio' o( a +art$ to a' /'a!!e+te& &ra(t to +a$ the &ra(t #/st %e !o##e'!e& 1ithi' three $ears a(ter &isho'or o( the &ra(t or 10 $ears a(ter the &ate o( the &ra(t2 1hi!he)er +erio& e,+ires (irst. (&) A' a!tio' to e'(or!e the o%li-atio' o( the a!!e+tor o( a !erti(ie& !he!5 or the iss/er o( a tellerBs !he!52 !ashierBs !he!52 or tra)elerBs !he!5 #/st %e !o##e'!e& 1ithi' three $ears a(ter &e#a'& (or +a$#e't is #a&e to the a!!e+tor or iss/er2 as the !ase #a$ %e. (e) A' a!tio' to e'(or!e the o%li-atio' o( a +art$ to a !erti(i!ate o( &e+osit to +a$ the i'str/#e't #/st %e !o##e'!e& 1ithi' si, $ears a(ter &e#a'& (or +a$#e't is #a&e to the #a5er2 %/t i( the i'str/#e't states a &/e &ate a'& the #a5er is 'ot re7/ire& to +a$ %e(ore that &ate2 the si,-$ear +erio& %e-i's 1he' a &e#a'& (or +a$#e't is i' e((e!t a'& the &/e &ate has +asse&. (() A' a!tio' to e'(or!e the o%li-atio' o( a +art$ to +a$ a' a!!e+te& &ra(t2 other tha' a !erti(ie& !he!52 #/st %e !o##e'!e& (i) 1ithi' si, $ears a(ter the &/e &ate or &ates state& i' the &ra(t or a!!e+ta'!e i( the o%li-atio' o( the a!!e+tor is +a$a%le at a &e(i'ite ti#e2 or (ii) 1ithi' si, $ears a(ter the &ate o( the a!!e+ta'!e i( the o%li-atio' o( the a!!e+tor is +a$a%le o' &e#a'&. (-) U'less -o)er'e& %$ other la1 re-ar&i'- !lai#s (or i'&e#'it$ or !o'tri%/tio'2 a' a!tio' (i) (or !o')ersio' o( a' i'str/#e't2 (or #o'e$ ha& a'& re!ei)e&2 or li5e a!tio' %ase& o' !o')ersio'2 (ii) (or %rea!h o( 1arra't$2 or (iii) to e'(or!e a' o%li-atio'2 &/t$2 or ri-ht arisi'- /'&er this Arti!le a'& 'ot -o)er'e& %$ this se!tio' #/st %e !o##e'!e& 1ithi' three $ears a(ter the !a/se o( a!tio'" a!!r/es. .-11A. NOTICE O> RIGDT TO =E>EN= ACTION. I' a' a!tio' (or %rea!h o( a' o%li-atio' (or 1hi!h a thir& +erso' is a's1era%le o)er +/rs/a't to this Arti!le or Arti!le 82 the &e(e'&a't #a$ -i)e the thir& +erso' 'oti!e o( the liti-atio' i' a re!or&2 a'& the +erso' 'oti(ie& #a$ the' -i)e si#ilar 'oti!e to a'$ other +erso' 1ho is a's1era%le o)er. I( the 'oti!e states (i) that the +erso' 'oti(ie& #a$ !o#e i' a'& &e(e'& a'& (ii) that (ail/re to &o so 1ill %i'& the +erso' 'oti(ie& i' a' a!tio' later %ro/-ht %$ the +erso' -i)i'- the 'oti!e as to a'$ &eter#i'atio' o( (a!t !o##o' to the t1o liti-atio's2 the +erso' 'oti(ie& is so %o/'& /'less a(ter seaso'a%le re!ei+t o( the 'oti!e the +erso' 'oti(ie& &oes !o#e i' a'& &e(e'&. PART *. NEGOTIATION2 TRANS>ER2 AN= IN=ORSEEENT .-*01. NEGOTIATION.

(a) ?Ne-otiatio'? #ea's a tra's(er o( +ossessio'2 1hether )ol/'tar$ or i')ol/'tar$2 o( a' i'str/#e't %$ a +erso' other tha' the iss/er to a +erso' 1ho there%$ %e!o#es its hol&er. (%) E,!e+t (or 'e-otiatio' %$ a re#itter2 i( a' i'str/#e't is +a$a%le to a' i&e'ti(ie& +erso'2 'e-otiatio' re7/ires tra's(er o( +ossessio' o( the i'str/#e't a'& its i'&orse#e't %$ the hol&er. I( a' i'str/#e't is +a$a%le to %earer2 it #a$ %e 'e-otiate& %$ tra's(er o( +ossessio' alo'e. .-*0*. NEGOTIATION SU@HECT TO RESCISSION. (a) Ne-otiatio' is e((e!ti)e e)e' i( o%tai'e& (i) (ro# a' i'(a't2 a !or+oratio' e,!ee&i'its +o1ers2 or a +erso' 1itho/t !a+a!it$2 (ii) %$ (ra/&2 &/ress2 or #ista5e2 or (iii) i' %rea!h o( &/t$ or as +art o( a' ille-al tra'sa!tio'. (%) To the e,te't +er#itte& %$ other la12 'e-otiatio' #a$ %e res!i'&e& or #a$ %e s/%6e!t to other re#e&ies2 %/t those re#e&ies #a$ 'ot %e asserte& a-ai'st a s/%se7/e't hol&er i' &/e !o/rse or a +erso' +a$i'- the i'str/#e't i' -oo& (aith a'& 1itho/t 5'o1le&-e o( (a!ts that are a %asis (or res!issio' or other re#e&$. .-*0.. TRANS>ER O> INSTRUEENT4 RIGDTS ACKUIRE= @G TRANS>ER. (a) A' i'str/#e't is tra's(erre& 1he' it is &eli)ere& %$ a +erso' other tha' its iss/er (or the +/r+ose o( -i)i'- to the +erso' re!ei)i'- &eli)er$ the ri-ht to e'(or!e the i'str/#e't. (%) Tra's(er o( a' i'str/#e't2 1hether or 'ot the tra's(er is a 'e-otiatio'2 )ests i' the tra's(eree a'$ ri-ht o( the tra's(eror to e'(or!e the i'str/#e't2 i'!l/&i'- a'$ ri-ht as a hol&er i' &/e !o/rse2 %/t the tra's(eree !a''ot a!7/ire ri-hts o( a hol&er i' &/e !o/rse %$ a tra's(er2 &ire!tl$ or i'&ire!tl$2 (ro# a hol&er i' &/e !o/rse i( the tra's(eree e'-a-e& i' (ra/& or ille-alit$ a((e!ti'- the i'str/#e't. (!) U'less other1ise a-ree&2 i( a' i'str/#e't is tra's(erre& (or )al/e a'& the tra's(eree &oes 'ot %e!o#e a hol&er %e!a/se o( la!5 o( i'&orse#e't %$ the tra's(eror2 the tra's(eree has a s+e!i(i!all$ e'(or!ea%le ri-ht to the /'7/ali(ie& i'&orse#e't o( the tra's(eror2 %/t 'e-otiatio' o( the i'str/#e't &oes 'ot o!!/r /'til the i'&orse#e't is #a&e. (&) I( a tra's(eror +/r+orts to tra's(er less tha' the e'tire i'str/#e't2 'e-otiatio' o( the i'str/#e't &oes 'ot o!!/r. The tra's(eree o%tai's 'o ri-hts /'&er this Arti!le a'& has o'l$ the ri-hts o( a +artial assi-'ee. .-*08. IN=ORSEEENT.

(a) ?I'&orse#e't? #ea's a si-'at/re2 other tha' that o( a si-'er as #a5er2 &ra1er2 or a!!e+tor2 that alo'e or a!!o#+a'ie& %$ other 1or&s is #a&e o' a' i'str/#e't (or the +/r+ose o( (i) 'e-otiati'- the i'str/#e't2 (ii) restri!ti'- +a$#e't o( the i'str/#e't2 or (iii) i'!/rri'- i'&orserBs lia%ilit$ o' the i'str/#e't2 %/t re-ar&less o( the i'te't o( the si-'er2 a si-'at/re a'& its a!!o#+a'$i'- 1or&s is a' i'&orse#e't /'less the a!!o#+a'$i'- 1or&s2 ter#s o( the i'str/#e't2 +la!e o( the si-'at/re2 or other !ir!/#sta'!es /'a#%i-/o/sl$ i'&i!ate that the si-'at/re 1as #a&e (or a +/r+ose other tha' i'&orse#e't. >or the +/r+ose o( &eter#i'i'- 1hether a si-'at/re is #a&e o' a' i'str/#e't2 a +a+er a((i,e& to the i'str/#e't is a +art o( the i'str/#e't. (%) ?I'&orser? #ea's a +erso' 1ho #a5es a' i'&orse#e't. (!) >or the +/r+ose o( &eter#i'i'- 1hether the tra's(eree o( a' i'str/#e't is a hol&er2 a' i'&orse#e't that tra's(ers a se!/rit$ i'terest i' the i'str/#e't is e((e!ti)e as a' /'7/ali(ie& i'&orse#e't o( the i'str/#e't. (&) I( a' i'str/#e't is +a$a%le to a hol&er /'&er a 'a#e that is 'ot the 'a#e o( the hol&er2 i'&orse#e't #a$ %e #a&e %$ the hol&er i' the 'a#e state& i' the i'str/#e't or i' the hol&erBs 'a#e or %oth2 %/t si-'at/re i' %oth 'a#es #a$ %e re7/ire& %$ a +erso' +a$i'- or ta5i'- the i'str/#e't (or )al/e or !olle!tio'. .-*09. SPECIAL IN=ORSEEENT4 @LANF IN=ORSEEENT4 ANOEALOUS IN=ORSEEENT. (a) I( a' i'&orse#e't is #a&e %$ the hol&er o( a' i'str/#e't2 1hether +a$a%le to a' i&e'ti(ie& +erso' or +a$a%le to %earer2 a'& the i'&orse#e't i&e'ti(ies a +erso' to 1ho# it #a5es the i'str/#e't +a$a%le2 it is a ?s+e!ial i'&orse#e't.? Che' s+e!iall$ i'&orse&2 a' i'str/#e't %e!o#es +a$a%le to the i&e'ti(ie& +erso' a'& #a$ %e 'e-otiate& o'l$ %$ the i'&orse#e't o( that +erso'. The +ri'!i+les state& i' Se!tio' .-110 a++l$ to s+e!ial i'&orse#e'ts. (%) I( a' i'&orse#e't is #a&e %$ the hol&er o( a' i'str/#e't a'& it is 'ot a s+e!ial i'&orse#e't2 it is a ?%la'5 i'&orse#e't.? Che' i'&orse& i' %la'52 a' i'str/#e't %e!o#es +a$a%le to %earer a'& #a$ %e 'e-otiate& %$ tra's(er o( +ossessio' alo'e /'til s+e!iall$ i'&orse&. (!) The hol&er #a$ !o')ert a %la'5 i'&orse#e't that !o'sists o'l$ o( a si-'at/re i'to a s+e!ial i'&orse#e't %$ 1riti'-2 a%o)e the si-'at/re o( the i'&orser2 1or&s i&e'ti($i'the +erso' to 1ho# the i'str/#e't is #a&e +a$a%le. (&) ?A'o#alo/s i'&orse#e't? #ea's a' i'&orse#e't #a&e %$ a +erso' 1ho is 'ot the hol&er o( the i'str/#e't. A' a'o#alo/s i'&orse#e't &oes 'ot a((e!t the #a''er i' 1hi!h the i'str/#e't #a$ %e 'e-otiate&.

 .-*0:. RESTRICTIVE IN=ORSEEENT. (a) A' i'&orse#e't li#iti'- +a$#e't to a +arti!/lar +erso' or other1ise +rohi%iti'(/rther tra's(er or 'e-otiatio' o( the i'str/#e't is 'ot e((e!ti)e to +re)e't (/rther tra's(er or 'e-otiatio' o( the i'str/#e't. (%) A' i'&orse#e't stati'- a !o'&itio' to the ri-ht o( the i'&orsee to re!ei)e +a$#e't &oes 'ot a((e!t the ri-ht o( the i'&orsee to e'(or!e the i'str/#e't. A +erso' +a$i'- the i'str/#e't or ta5i'- it (or )al/e or !olle!tio' #a$ &isre-ar& the !o'&itio'2 a'& the ri-hts a'& lia%ilities o( that +erso' are 'ot a((e!te& %$ 1hether the !o'&itio' has %ee' (/l(ille&. (!) I( a' i'str/#e't %ears a' i'&orse#e't (i) &es!ri%e& i' Se!tio' 8-*01(%)2 or (ii) i' %la'5 or to a +arti!/lar %a'5 /si'- the 1or&s ?(or &e+osit2? ?(or !olle!tio'2? or other 1or&s i'&i!ati'- a +/r+ose o( ha)i'- the i'str/#e't !olle!te& %$ a %a'5 (or the i'&orser or (or a +arti!/lar a!!o/'t2 the (ollo1i'- r/les a++l$0 (1) A +erso'2 other tha' a %a'52 1ho +/r!hases the i'str/#e't 1he' so i'&orse& !o')erts the i'str/#e't /'less the a#o/'t +ai& (or the i'str/#e't is re!ei)e& %$ the i'&orser or a++lie& !o'siste'tl$ 1ith the i'&orse#e't. (*) A &e+ositar$ %a'5 that +/r!hases the i'str/#e't or ta5es it (or !olle!tio' 1he' so i'&orse& !o')erts the i'str/#e't /'less the a#o/'t +ai& %$ the %a'5 1ith res+e!t to the i'str/#e't is re!ei)e& %$ the i'&orser or a++lie& !o'siste'tl$ 1ith the i'&orse#e't. (.) A +a$or %a'5 that is also the &e+ositar$ %a'5 or that ta5es the i'str/#e't (or i##e&iate +a$#e't o)er the !o/'ter (ro# a +erso' other tha' a !olle!ti'- %a'5 !o')erts the i'str/#e't /'less the +ro!ee&s o( the i'str/#e't are re!ei)e& %$ the i'&orser or a++lie& !o'siste'tl$ 1ith the i'&orse#e't. (8) E,!e+t as other1ise +ro)i&e& i' +ara-ra+h (.)2 a +a$or %a'5 or i'ter#e&iar$ %a'5 #a$ &isre-ar& the i'&orse#e't a'& is 'ot lia%le i( the +ro!ee&s o( the i'str/#e't are 'ot re!ei)e& %$ the i'&orser or a++lie& !o'siste'tl$ 1ith the i'&orse#e't. (&) E,!e+t (or a' i'&orse#e't !o)ere& %$ s/%se!tio' (!)2 i( a' i'str/#e't %ears a' i'&orse#e't /si'- 1or&s to the e((e!t that +a$#e't is to %e #a&e to the i'&orsee as a-e't2 tr/stee2 or other (i&/!iar$ (or the %e'e(it o( the i'&orser or a'other +erso'2 the (ollo1i'- r/les a++l$0 (1) U'less there is 'oti!e o( %rea!h o( (i&/!iar$ &/t$ as +ro)i&e& i' Se!tio' .-.0;2 a +erso' 1ho +/r!hases the i'str/#e't (ro# the i'&orsee or ta5es the i'str/#e't (ro# the i'&orsee (or !olle!tio' or +a$#e't #a$ +a$ the +ro!ee&s o( +a$#e't or the )al/e -i)e' (or the i'str/#e't to the i'&orsee 1itho/t re-ar& to 1hether the i'&orsee )iolates a (i&/!iar$ &/t$ to the i'&orser.

(*) A s/%se7/e't tra's(eree o( the i'str/#e't or +erso' 1ho +a$s the i'str/#e't is 'either -i)e' 'oti!e 'or other1ise a((e!te& %$ the restri!tio' i' the i'&orse#e't /'less the tra's(eree or +a$or 5'o1s that the (i&/!iar$ &ealt 1ith the i'str/#e't or its +ro!ee&s i' %rea!h o( (i&/!iar$ &/t$. (e) The +rese'!e o' a' i'str/#e't o( a' i'&orse#e't to 1hi!h this se!tio' a++lies &oes 'ot +re)e't a +/r!haser o( the i'str/#e't (ro# %e!o#i'- a hol&er i' &/e !o/rse o( the i'str/#e't /'less the +/r!haser is a !o')erter /'&er s/%se!tio' (!) or has 'oti!e or 5'o1le&-e o( %rea!h o( (i&/!iar$ &/t$ as state& i' s/%se!tio' (&). (() I' a' a!tio' to e'(or!e the o%li-atio' o( a +art$ to +a$ the i'str/#e't2 the o%li-or has a &e(e'se i( +a$#e't 1o/l& )iolate a' i'&orse#e't to 1hi!h this se!tio' a++lies a'& the +a$#e't is 'ot +er#itte& %$ this se!tio'. .-*0;. REACKUISITION. Rea!7/isitio' o( a' i'str/#e't o!!/rs i( it is tra's(erre& to a (or#er hol&er2 %$ 'e-otiatio' or other1ise. A (or#er hol&er 1ho rea!7/ires the i'str/#e't #a$ !a'!el i'&orse#e'ts #a&e a(ter the rea!7/irer (irst %e!a#e a hol&er o( the i'str/#e't. I( the !a'!ellatio' !a/ses the i'str/#e't to %e +a$a%le to the rea!7/irer or to %earer2 the rea!7/irer #a$ 'e-otiate the i'str/#e't. A' i'&orser 1hose i'&orse#e't is !a'!ele& is &is!har-e&2 a'& the &is!har-e is e((e!ti)e a-ai'st a'$ s/%se7/e't hol&er. PART .. EN>ORCEEENT O> INSTRUEENTS .-.01. PERSON ENTITLE= TO EN>ORCE INSTRUEENT. ?Perso' e'title& to e'(or!e? a' i'str/#e't #ea's (i) the hol&er o( the i'str/#e't2 (ii) a 'o'hol&er i' +ossessio' o( the i'str/#e't 1ho has the ri-hts o( a hol&er2 or (iii) a +erso' 'ot i' +ossessio' o( the i'str/#e't 1ho is e'title& to e'(or!e the i'str/#e't +/rs/a't to Se!tio' .-.0A or .-81<(&). A +erso' #a$ %e a +erso' e'title& to e'(or!e the i'str/#e't e)e' tho/-h the +erso' is 'ot the o1'er o( the i'str/#e't or is i' 1ro'-(/l +ossessio' o( the i'str/#e't. .-.0*. DOL=ER IN =UE COURSE. (a) S/%6e!t to s/%se!tio' (!) a'& Se!tio' .-10:(&)2 ?hol&er i' &/e !o/rse? #ea's the hol&er o( a' i'str/#e't i(0 (1) the i'str/#e't 1he' iss/e& or 'e-otiate& to the hol&er &oes 'ot %ear s/!h a++are't e)i&e'!e o( (or-er$ or alteratio' or is 'ot other1ise so irre-/lar or i'!o#+lete as to !all i'to 7/estio' its a/the'ti!it$4 a'&

(*) the hol&er too5 the i'str/#e't (i) (or )al/e2 (ii) i' -oo& (aith2 (iii) 1itho/t 'oti!e that the i'str/#e't is o)er&/e or has %ee' &isho'ore& or that there is a' /'!/re& &e(a/lt 1ith res+e!t to +a$#e't o( a'other i'str/#e't iss/e& as +art o( the sa#e series2 (i)) 1itho/t 'oti!e that the i'str/#e't !o'tai's a' /'a/thori3e& si-'at/re or has %ee' altere&2 ()) 1itho/t 'oti!e o( a'$ !lai# to the i'str/#e't &es!ri%e& i' Se!tio' .-.0:2 a'& ()i) 1itho/t 'oti!e that a'$ +art$ has a &e(e'se or !lai# i' re!o/+#e't &es!ri%e& i' Se!tio' .-.09(a). (%) Noti!e o( &is!har-e o( a +art$2 other tha' &is!har-e i' a' i'sol)e'!$ +ro!ee&i'-2 is 'ot 'oti!e o( a &e(e'se /'&er s/%se!tio' (a)2 %/t &is!har-e is e((e!ti)e a-ai'st a +erso' 1ho %e!a#e a hol&er i' &/e !o/rse 1ith 'oti!e o( the &is!har-e. P/%li! (ili'- or re!or&i'- o( a &o!/#e't &oes 'ot o( itsel( !o'stit/te 'oti!e o( a &e(e'se2 !lai# i' re!o/+#e't2 or !lai# to the i'str/#e't. (!) E,!e+t to the e,te't a tra's(eror or +re&e!essor i' i'terest has ri-hts as a hol&er i' &/e !o/rse2 a +erso' &oes 'ot a!7/ire ri-hts o( a hol&er i' &/e !o/rse o( a' i'str/#e't ta5e' (i) %$ le-al +ro!ess or %$ +/r!hase i' a' e,e!/tio'2 %a'5r/+t!$2 or !re&itorBs sale or si#ilar +ro!ee&i'-2 (ii) %$ +/r!hase as +art o( a %/l5 tra'sa!tio' 'ot i' or&i'ar$ !o/rse o( %/si'ess o( the tra's(eror2 or (iii) as the s/!!essor i' i'terest to a' estate or other or-a'i3atio'. (&) I(2 /'&er Se!tio' .-.0.(a)(1)2 the +ro#ise o( +er(or#a'!e that is the !o'si&eratio' (or a' i'str/#e't has %ee' +artiall$ +er(or#e&2 the hol&er #a$ assert ri-hts as a hol&er i' &/e !o/rse o( the i'str/#e't o'l$ to the (ra!tio' o( the a#o/'t +a$a%le /'&er the i'str/#e't e7/al to the )al/e o( the +artial +er(or#a'!e &i)i&e& %$ the )al/e o( the +ro#ise& +er(or#a'!e. (e) I( (i) the +erso' e'title& to e'(or!e a' i'str/#e't has o'l$ a se!/rit$ i'terest i' the i'str/#e't a'& (ii) the +erso' o%li-e& to +a$ the i'str/#e't has a &e(e'se2 !lai# i' re!o/+#e't2 or !lai# to the i'str/#e't that #a$ %e asserte& a-ai'st the +erso' 1ho -ra'te& the se!/rit$ i'terest2 the +erso' e'title& to e'(or!e the i'str/#e't #a$ assert ri-hts as a hol&er i' &/e !o/rse o'l$ to a' a#o/'t +a$a%le /'&er the i'str/#e't 1hi!h2 at the ti#e o( e'(or!e#e't o( the i'str/#e't2 &oes 'ot e,!ee& the a#o/'t o( the /'+ai& o%li-atio' se!/re&. (() To %e e((e!ti)e2 'oti!e #/st %e re!ei)e& at a ti#e a'& i' a #a''er that -i)es a reaso'a%le o++ort/'it$ to a!t o' it. (-) This se!tio' is s/%6e!t to a'$ la1 li#iti'- stat/s as a hol&er i' &/e !o/rse i' +arti!/lar !lasses o( tra'sa!tio's. .-.0.. VALUE AN= CONSI=ERATION. (a) A' i'str/#e't is iss/e& or tra's(erre& (or )al/e i(0

(1) the i'str/#e't is iss/e& or tra's(erre& (or a +ro#ise o( +er(or#a'!e2 to the e,te't the +ro#ise has %ee' +er(or#e&4 (*) the tra's(eree a!7/ires a se!/rit$ i'terest or other lie' i' the i'str/#e't other tha' a lie' o%tai'e& %$ 6/&i!ial +ro!ee&i'-4 (.) the i'str/#e't is iss/e& or tra's(erre& as +a$#e't o(2 or as se!/rit$ (or2 a' a'te!e&e't !lai# a-ai'st a'$ +erso'2 1hether or 'ot the !lai# is &/e4 (8) the i'str/#e't is iss/e& or tra's(erre& i' e,!ha'-e (or a 'e-otia%le i'str/#e't4 or (9) the i'str/#e't is iss/e& or tra's(erre& i' e,!ha'-e (or the i'!/rri'- o( a' irre)o!a%le o%li-atio' to a thir& +art$ %$ the +erso' ta5i'- the i'str/#e't. (%) ?Co'si&eratio'? #ea's a'$ !o'si&eratio' s/((i!ie't to s/++ort a si#+le !o'tra!t. The &ra1er or #a5er o( a' i'str/#e't has a &e(e'se i( the i'str/#e't is iss/e& 1itho/t !o'si&eratio'. I( a' i'str/#e't is iss/e& (or a +ro#ise o( +er(or#a'!e2 the iss/er has a &e(e'se to the e,te't +er(or#a'!e o( the +ro#ise is &/e a'& the +ro#ise has 'ot %ee' +er(or#e&. I( a' i'str/#e't is iss/e& (or )al/e as state& i' s/%se!tio' (a)2 the i'str/#e't is also iss/e& (or !o'si&eratio'. .-.08. OVER=UE INSTRUEENT. (a) A' i'str/#e't +a$a%le o' &e#a'& %e!o#es o)er&/e at the earliest o( the (ollo1i'ti#es0 (1) o' the &a$ a(ter the &a$ &e#a'& (or +a$#e't is &/l$ #a&e4 (*) i( the i'str/#e't is a !he!52 A0 &a$s a(ter its &ate4 or (.) i( the i'str/#e't is 'ot a !he!52 1he' the i'str/#e't has %ee' o/tsta'&i'- (or a +erio& o( ti#e a(ter its &ate 1hi!h is /'reaso'a%l$ lo'- /'&er the !ir!/#sta'!es o( the +arti!/lar !ase i' li-ht o( the 'at/re o( the i'str/#e't a'& /sa-e o( the tra&e. (%) Cith res+e!t to a' i'str/#e't +a$a%le at a &e(i'ite ti#e the (ollo1i'- r/les a++l$0 (1) I( the +ri'!i+al is +a$a%le i' i'stall#e'ts a'& a &/e &ate has 'ot %ee' a!!elerate&2 the i'str/#e't %e!o#es o)er&/e /+o' &e(a/lt /'&er the i'str/#e't (or 'o'+a$#e't o( a' i'stall#e't2 a'& the i'str/#e't re#ai's o)er&/e /'til the &e(a/lt is !/re&. (*) I( the +ri'!i+al is 'ot +a$a%le i' i'stall#e'ts a'& the &/e &ate has 'ot %ee' a!!elerate&2 the i'str/#e't %e!o#es o)er&/e o' the &a$ a(ter the &/e &ate.

(.) I( a &/e &ate 1ith res+e!t to +ri'!i+al has %ee' a!!elerate&2 the i'str/#e't %e!o#es o)er&/e o' the &a$ a(ter the a!!elerate& &/e &ate. (!) U'less the &/e &ate o( +ri'!i+al has %ee' a!!elerate&2 a' i'str/#e't &oes 'ot %e!o#e o)er&/e i( there is &e(a/lt i' +a$#e't o( i'terest %/t 'o &e(a/lt i' +a$#e't o( +ri'!i+al. .-.09. =E>ENSES AN= CLAIES IN RECOUPEENT. (a) E,!e+t as other1ise +ro)i&e& i' this se!tio'2 the ri-ht to e'(or!e the o%li-atio' o( a +art$ to +a$ a' i'str/#e't is s/%6e!t to the (ollo1i'-0 (1) a &e(e'se o( the o%li-or %ase& o' (i) i'(a'!$ o( the o%li-or to the e,te't it is a &e(e'se to a si#+le !o'tra!t2 (ii) &/ress2 la!5 o( le-al !a+a!it$2 or ille-alit$ o( the tra'sa!tio' 1hi!h2 /'&er other la12 '/lli(ies the o%li-atio' o( the o%li-or2 (iii) (ra/& that i'&/!e& the o%li-or to si-' the i'str/#e't 1ith 'either 5'o1le&-e 'or reaso'a%le o++ort/'it$ to lear' o( its !hara!ter or its esse'tial ter#s2 or (i)) &is!har-e o( the o%li-or i' i'sol)e'!$ +ro!ee&i'-s4 (*) a &e(e'se o( the o%li-or state& i' a'other se!tio' o( this Arti!le or a &e(e'se o( the o%li-or that 1o/l& %e a)aila%le i( the +erso' e'title& to e'(or!e the i'str/#e't 1ere e'(or!i'- a ri-ht to +a$#e't /'&er a si#+le !o'tra!t4 a'& (.) a !lai# i' re!o/+#e't o( the o%li-or a-ai'st the ori-i'al +a$ee o( the i'str/#e't i( the !lai# arose (ro# the tra'sa!tio' that -a)e rise to the i'str/#e't4 %/t the !lai# o( the o%li-or #a$ %e asserte& a-ai'st a tra's(eree o( the i'str/#e't o'l$ to re&/!e the a#o/'t o1i'- o' the i'str/#e't at the ti#e the a!tio' is %ro/-ht. (%) The ri-ht o( a hol&er i' &/e !o/rse to e'(or!e the o%li-atio' o( a +art$ to +a$ the i'str/#e't is s/%6e!t to &e(e'ses o( the o%li-or state& i' s/%se!tio' (a)(1)2 %/t is 'ot s/%6e!t to &e(e'ses o( the o%li-or state& i' s/%se!tio' (a)(*) or !lai#s i' re!o/+#e't state& i' s/%se!tio' (a)(.) a-ai'st a +erso' other tha' the hol&er. (!) E,!e+t as state& i' s/%se!tio' (&)2 i' a' a!tio' to e'(or!e the o%li-atio' o( a +art$ to +a$ the i'str/#e't2 the o%li-or #a$ 'ot assert a-ai'st the +erso' e'title& to e'(or!e the i'str/#e't a &e(e'se2 !lai# i' re!o/+#e't2 or !lai# to the i'str/#e't (Se!tio' ..0:) o( a'other +erso'2 %/t the other +erso'Bs !lai# to the i'str/#e't #a$ %e asserte& %$ the o%li-or i( the other +erso' is 6oi'e& i' the a!tio' a'& +erso'all$ asserts the !lai# a-ai'st the +erso' e'title& to e'(or!e the i'str/#e't. A' o%li-or is 'ot o%li-e& to +a$ the i'str/#e't i( the +erso' see5i'- e'(or!e#e't o( the i'str/#e't &oes 'ot ha)e ri-hts o( a hol&er i' &/e !o/rse a'& the o%li-or +ro)es that the i'str/#e't is a lost or stole' i'str/#e't.

(&) I' a' a!tio' to e'(or!e the o%li-atio' o( a' a!!o##o&atio' +art$ to +a$ a' i'str/#e't2 the a!!o##o&atio' +art$ #a$ assert a-ai'st the +erso' e'title& to e'(or!e the i'str/#e't a'$ &e(e'se or !lai# i' re!o/+#e't /'&er s/%se!tio' (a) that the a!!o##o&ate& +art$ !o/l& assert a-ai'st the +erso' e'title& to e'(or!e the i'str/#e't2 e,!e+t the &e(e'ses o( &is!har-e i' i'sol)e'!$ +ro!ee&i'-s2 i'(a'!$2 a'& la!5 o( le-al !a+a!it$. (e) I' a !o's/#er tra'sa!tio'2 i( la1 other tha' this arti!le re7/ires that a' i'str/#e't i'!l/&e a state#e't to the e((e!t that the ri-hts o( a hol&er or tra's(eree are s/%6e!t to a !lai# or &e(e'se that the iss/er !o/l& assert a-ai'st the ori-i'al +a$ee2 a'& the i'str/#e't &oes 'ot i'!l/&e s/!h a state#e't0 (1) the i'str/#e't has the sa#e e((e!t as i( the i'str/#e't i'!l/&e& s/!h a state#e't4 (*) the iss/er #a$ assert a-ai'st the hol&er or tra's(eree all !lai#s a'& &e(e'ses that 1o/l& ha)e %ee' a)aila%le i( the i'str/#e't i'!l/&e& s/!h a state#e't4 a'& (.) the e,te't to 1hi!h !lai#s #a$ %e asserte& a-ai'st the hol&er or tra's(eree is &eter#i'e& as i( the i'str/#e't i'!l/&e& s/!h a state#e't. (() This se!tio' is s/%6e!t to la1 other tha' this arti!le that esta%lishes a &i((ere't r/le (or !o's/#er tra'sa!tio's. .-.0:. CLAIES TO AN INSTRUEENT. A +erso' ta5i'- a' i'str/#e't2 other tha' a +erso' ha)i'- ri-hts o( a hol&er i' &/e !o/rse2 is s/%6e!t to a !lai# o( a +ro+ert$ or +ossessor$ ri-ht i' the i'str/#e't or its +ro!ee&s2 i'!l/&i'- a !lai# to res!i'& a 'e-otiatio' a'& to re!o)er the i'str/#e't or its +ro!ee&s. A +erso' ha)i'- ri-hts o( a hol&er i' &/e !o/rse ta5es (ree o( the !lai# to the i'str/#e't. .-.0;. NOTICE O> @REACD O> >I=UCIARG =UTG. (a) I' this se!tio'0 (1) ?>i&/!iar$? #ea's a' a-e't2 tr/stee2 +art'er2 !or+orate o((i!er or &ire!tor2 or other re+rese'tati)e o1i'- a (i&/!iar$ &/t$ 1ith res+e!t to a' i'str/#e't. (*) ?Re+rese'te& +erso'? #ea's the +ri'!i+al2 %e'e(i!iar$2 +art'ershi+2 !or+oratio'2 or other +erso' to 1ho# the &/t$ state& i' +ara-ra+h (1) is o1e&. (%) I( (i) a' i'str/#e't is ta5e' (ro# a (i&/!iar$ (or +a$#e't or !olle!tio' or (or )al/e2 (ii) the ta5er has 5'o1le&-e o( the (i&/!iar$ stat/s o( the (i&/!iar$2 a'& (iii) the re+rese'te& +erso' #a5es a !lai# to the i'str/#e't or its +ro!ee&s o' the %asis that the tra'sa!tio' o( the (i&/!iar$ is a %rea!h o( (i&/!iar$ &/t$2 the (ollo1i'- r/les a++l$0

(1) Noti!e o( %rea!h o( (i&/!iar$ &/t$ %$ the (i&/!iar$ is 'oti!e o( the !lai# o( the re+rese'te& +erso'. (*) I' the !ase o( a' i'str/#e't +a$a%le to the re+rese'te& +erso' or the (i&/!iar$ as s/!h2 the ta5er has 'oti!e o( the %rea!h o( (i&/!iar$ &/t$ i( the i'str/#e't is (i) ta5e' i' +a$#e't o( or as se!/rit$ (or a &e%t 5'o1' %$ the ta5er to %e the +erso'al &e%t o( the (i&/!iar$2 (ii) ta5e' i' a tra'sa!tio' 5'o1' %$ the ta5er to %e (or the +erso'al %e'e(it o( the (i&/!iar$2 or (iii) &e+osite& to a' a!!o/'t other tha' a' a!!o/'t o( the (i&/!iar$2 as s/!h2 or a' a!!o/'t o( the re+rese'te& +erso'. (.) I( a' i'str/#e't is iss/e& %$ the re+rese'te& +erso' or the (i&/!iar$ as s/!h2 a'& #a&e +a$a%le to the (i&/!iar$ +erso'all$2 the ta5er &oes 'ot ha)e 'oti!e o( the %rea!h o( (i&/!iar$ &/t$ /'less the ta5er 5'o1s o( the %rea!h o( (i&/!iar$ &/t$. (8) I( a' i'str/#e't is iss/e& %$ the re+rese'te& +erso' or the (i&/!iar$ as s/!h2 to the ta5er as +a$ee2 the ta5er has 'oti!e o( the %rea!h o( (i&/!iar$ &/t$ i( the i'str/#e't is (i) ta5e' i' +a$#e't o( or as se!/rit$ (or a &e%t 5'o1' %$ the ta5er to %e the +erso'al &e%t o( the (i&/!iar$2 (ii) ta5e' i' a tra'sa!tio' 5'o1' %$ the ta5er to %e (or the +erso'al %e'e(it o( the (i&/!iar$2 or (iii) &e+osite& to a' a!!o/'t other tha' a' a!!o/'t o( the (i&/!iar$2 as s/!h2 or a' a!!o/'t o( the re+rese'te& +erso'. .-.0<. PROO> O> SIGNATURES AN= STATUS AS DOL=ER IN =UE COURSE. (a) I' a' a!tio' 1ith res+e!t to a' i'str/#e't2 the a/the'ti!it$ o(2 a'& a/thorit$ to #a5e2 ea!h si-'at/re o' the i'str/#e't is a&#itte& /'less s+e!i(i!all$ &e'ie& i' the +lea&i'-s. I( the )ali&it$ o( a si-'at/re is &e'ie& i' the +lea&i'-s2 the %/r&e' o( esta%lishi'- )ali&it$ is o' the +erso' !lai#i'- )ali&it$2 %/t the si-'at/re is +res/#e& to %e a/the'ti! a'& a/thori3e& /'less the a!tio' is to e'(or!e the lia%ilit$ o( the +/r+orte& si-'er a'& the si-'er is &ea& or i'!o#+ete't at the ti#e o( trial o( the iss/e o( )ali&it$ o( the si-'at/re. I( a' a!tio' to e'(or!e the i'str/#e't is %ro/-ht a-ai'st a +erso' as the /'&is!lose& +ri'!i+al o( a +erso' 1ho si-'e& the i'str/#e't as a +art$ to the i'str/#e't2 the +lai'ti(( has the %/r&e' o( esta%lishi'- that the &e(e'&a't is lia%le o' the i'str/#e't as a re+rese'te& +erso' /'&er Se!tio' .-80*(a). (%) I( the )ali&it$ o( si-'at/res is a&#itte& or +ro)e& a'& there is !o#+lia'!e 1ith s/%se!tio' (a)2 a +lai'ti(( +ro&/!i'- the i'str/#e't is e'title& to +a$#e't i( the +lai'ti(( +ro)es e'title#e't to e'(or!e the i'str/#e't /'&er Se!tio' .-.012 /'less the &e(e'&a't +ro)es a &e(e'se or !lai# i' re!o/+#e't. I( a &e(e'se or !lai# i' re!o/+#e't is +ro)e&2 the ri-ht to +a$#e't o( the +lai'ti(( is s/%6e!t to the &e(e'se or !lai#2 e,!e+t to the e,te't the +lai'ti(( +ro)es that the +lai'ti(( has ri-hts o( a hol&er i' &/e !o/rse 1hi!h are 'ot s/%6e!t to the &e(e'se or !lai#. .-.0A. EN>ORCEEENT O> LOST2 =ESTROGE=2 OR STOLEN INSTRUEENT.

(a) A +erso' 'ot i' +ossessio' o( a' i'str/#e't is e'title& to e'(or!e the i'str/#e't i(0 (1) the +erso' see5i'- to e'(or!e the i'str/#e't (A) 1as e'title& to e'(or!e it the i'str/#e't 1he' loss o( +ossessio' o!!/rre&2 or (@) has &ire!tl$ or i'&ire!tl$ a!7/ire& o1'ershi+ o( the i'str/#e't (ro# a +erso' 1ho 1as e'title& to e'(or!e the i'str/#e't 1he' loss o( +ossessio' o!!/rre&4 (*) the loss o( +ossessio' 1as 'ot the res/lt o( a tra's(er %$ the +erso' or a la1(/l sei3/re4 a'& (.) the +erso' !a''ot reaso'a%l$ o%tai' +ossessio' o( the i'str/#e't %e!a/se the i'str/#e't 1as &estro$e&2 its 1herea%o/ts !a''ot %e &eter#i'e&2 or it is i' the 1ro'-(/l +ossessio' o( a' /'5'o1' +erso' or a +erso' that !a''ot %e (o/'& or is 'ot a#e'a%le to ser)i!e o( +ro!ess. (%) A +erso' see5i'- e'(or!e#e't o( a' i'str/#e't /'&er s/%se!tio' (a) #/st +ro)e the ter#s o( the i'str/#e't a'& the +erso'Bs ri-ht to e'(or!e the i'str/#e't. I( that +roo( is #a&e2 Se!tio' .-.0< a++lies to the !ase as i( the +erso' see5i'- e'(or!e#e't ha& +ro&/!e& the i'str/#e't. The !o/rt #a$ 'ot e'ter 6/&-#e't i' (a)or o( the +erso' see5i'- e'(or!e#e't /'less it (i'&s that the +erso' re7/ire& to +a$ the i'str/#e't is a&e7/atel$ +rote!te& a-ai'st loss that #i-ht o!!/r %$ reaso' o( a !lai# %$ a'other +erso' to e'(or!e the i'str/#e't. A&e7/ate +rote!tio' #a$ %e +ro)i&e& %$ a'$ reaso'a%le #ea's. .-.10. E>>ECT O> INSTRUEENT ON O@LIGATION >OR CDICD TAFEN. (a) U'less other1ise a-ree&2 i( a !erti(ie& !he!52 !ashierBs !he!52 or tellerBs !he!5 is ta5e' (or a' o%li-atio'2 the o%li-atio' is &is!har-e& to the sa#e e,te't &is!har-e 1o/l& res/lt i( a' a#o/'t o( #o'e$ e7/al to the a#o/'t o( the i'str/#e't 1ere ta5e' i' +a$#e't o( the o%li-atio'. =is!har-e o( the o%li-atio' &oes 'ot a((e!t a'$ lia%ilit$ that the o%li-or #a$ ha)e as a' i'&orser o( the i'str/#e't. (%) U'less other1ise a-ree& a'& e,!e+t as +ro)i&e& i' s/%se!tio' (a)2 i( a 'ote or a' /'!erti(ie& !he!5 is ta5e' (or a' o%li-atio'2 the o%li-atio' is s/s+e'&e& to the sa#e e,te't the o%li-atio' 1o/l& %e &is!har-e& i( a' a#o/'t o( #o'e$ e7/al to the a#o/'t o( the i'str/#e't 1ere ta5e'2 a'& the (ollo1i'- r/les a++l$0 (1) I' the !ase o( a' /'!erti(ie& !he!52 s/s+e'sio' o( the o%li-atio' !o'ti'/es /'til &isho'or o( the !he!5 or /'til it is +ai& or !erti(ie&. Pa$#e't or !erti(i!atio' o( the !he!5 res/lts i' &is!har-e o( the o%li-atio' to the e,te't o( the a#o/'t o( the !he!5.

(*) I' the !ase o( a 'ote2 s/s+e'sio' o( the o%li-atio' !o'ti'/es /'til &isho'or o( the 'ote or /'til it is +ai&. Pa$#e't o( the 'ote res/lts i' &is!har-e o( the o%li-atio' to the e,te't o( the +a$#e't. (.) E,!e+t as +ro)i&e& i' +ara-ra+h (8)2 i( the !he!5 or 'ote is &isho'ore& a'& the o%li-ee o( the o%li-atio' (or 1hi!h the i'str/#e't 1as ta5e' is the +erso' e'title& to e'(or!e the i'str/#e't2 the o%li-ee #a$ e'(or!e either the i'str/#e't or the o%li-atio'. I' the !ase o( a' i'str/#e't o( a thir& +erso' 1hi!h is 'e-otiate& to the o%li-ee %$ the o%li-or2 &is!har-e o( the o%li-or o' the i'str/#e't also &is!har-es the o%li-atio'. (8) I( the +erso' e'title& to e'(or!e the i'str/#e't ta5e' (or a' o%li-atio' is a +erso' other tha' the o%li-ee2 the o%li-ee #a$ 'ot e'(or!e the o%li-atio' to the e,te't the o%li-atio' is s/s+e'&e&. I( the o%li-ee is the +erso' e'title& to e'(or!e the i'str/#e't %/t 'o lo'-er has +ossessio' o( it %e!a/se it 1as lost2 stole'2 or &estro$e&2 the o%li-atio' #a$ 'ot %e e'(or!e& to the e,te't o( the a#o/'t +a$a%le o' the i'str/#e't2 a'& to that e,te't the o%li-eeBs ri-hts a-ai'st the o%li-or are li#ite& to e'(or!e#e't o( the i'str/#e't. (!) I( a' i'str/#e't other tha' o'e &es!ri%e& i' s/%se!tio' (a) or (%) is ta5e' (or a' o%li-atio'2 the e((e!t is (i) that state& i' s/%se!tio' (a) i( the i'str/#e't is o'e o' 1hi!h a %a'5 is lia%le as #a5er or a!!e+tor2 or (ii) that state& i' s/%se!tio' (%) i' a'$ other !ase. .-.11. ACCOR= AN= SATIS>ACTION @G USE O> INSTRUEENT. (a) I( a +erso' a-ai'st 1ho# a !lai# is asserte& +ro)es that (i) that +erso' i' -oo& (aith te'&ere& a' i'str/#e't to the !lai#a't as (/ll satis(a!tio' o( the !lai#2 (ii) the a#o/'t o( the !lai# 1as /'li7/i&ate& or s/%6e!t to a %o'a (i&e &is+/te2 a'& (iii) the !lai#a't o%tai'e& +a$#e't o( the i'str/#e't2 the (ollo1i'- s/%se!tio's a++l$. (%) U'less s/%se!tio' (!) a++lies2 the !lai# is &is!har-e& i( the +erso' a-ai'st 1ho# the !lai# is asserte& +ro)es that the i'str/#e't or a' a!!o#+a'$i'- 1ritte' !o##/'i!atio' !o'tai'e& a !o's+i!/o/s state#e't to the e((e!t that the i'str/#e't 1as te'&ere& as (/ll satis(a!tio' o( the !lai#. (!) S/%6e!t to s/%se!tio' (&)2 a !lai# is 'ot &is!har-e& /'&er s/%se!tio' (%) i( either o( the (ollo1i'- a++lies0 (1) The !lai#a't2 i( a' or-a'i3atio'2 +ro)es that (i) 1ithi' a reaso'a%le ti#e %e(ore the te'&er2 the !lai#a't se't a !o's+i!/o/s state#e't to the +erso' a-ai'st 1ho# the !lai# is asserte& that !o##/'i!atio's !o'!er'i'- &is+/te& &e%ts2 i'!l/&i'- a' i'str/#e't te'&ere& as (/ll satis(a!tio' o( a &e%t2 are to %e se't to a &esi-'ate& +erso'2 o((i!e2 or +la!e2 a'& (ii) the i'str/#e't or a!!o#+a'$i'- !o##/'i!atio' 1as 'ot re!ei)e& %$ that &esi-'ate& +erso'2 o((i!e2 or +la!e.

(*) The !lai#a't2 1hether or 'ot a' or-a'i3atio'2 +ro)es that 1ithi' A0 &a$s a(ter +a$#e't o( the i'str/#e't2 the !lai#a't te'&ere& re+a$#e't o( the a#o/'t o( the i'str/#e't to the +erso' a-ai'st 1ho# the !lai# is asserte&. This +ara-ra+h &oes 'ot a++l$ i( the !lai#a't is a' or-a'i3atio' that that se't a state#e't !o#+l$i'- 1ith +ara-ra+h (1)(i). (&) A !lai# is &is!har-e& i( the +erso' a-ai'st 1ho# the !lai# is asserte& +ro)es that 1ithi' a reaso'a%le ti#e %e(ore !olle!tio' o( the i'str/#e't 1as i'itiate&2 the !lai#a't2 or a' a-e't o( the !lai#a't ha)i'- &ire!t res+o'si%ilit$ 1ith res+e!t to the &is+/te& o%li-atio'2 5'e1 that the i'str/#e't 1as te'&ere& i' (/ll satis(a!tio' o( the !lai#. .-.1*. LOST2 =ESTROGE=2 OR STOLEN CASDIERBS CDECF2 TELLERBS CDECF2 OR CERTI>IE= CDECF. (a) I' this se!tio'0 (1) ?Che!5? #ea's a !ashierBs !he!52 tellerBs !he!52 or !erti(ie& !he!5. (*) ?Clai#a't? #ea's a +erso' 1ho !lai#s the ri-ht to re!ei)e the a#o/'t o( a !ashierBs !he!52 tellerBs !he!52 or !erti(ie& !he!5 that 1as lost2 &estro$e&2 or stole'. (.) ?=e!laratio' o( loss? #ea's a state#e't2 #a&e i' a re!or& /'&er +e'alt$ o( +er6/r$2 to the e((e!t that (i) the &e!larer lost +ossessio' o( a !he!52 (ii) the &e!larer is the &ra1er or +a$ee o( the !he!52 i' the !ase o( a !erti(ie& !he!52 or the re#itter or +a$ee o( the !he!52 i' the !ase o( a !ashierBs !he!5 or tellerBs !he!52 (iii) the loss o( +ossessio' 1as 'ot the res/lt o( a tra's(er %$ the &e!larer or a la1(/l sei3/re2 a'& (i)) the &e!larer !a''ot reaso'a%l$ o%tai' +ossessio' o( the !he!5 %e!a/se the !he!5 1as &estro$e&2 its 1herea%o/ts !a''ot %e &eter#i'e&2 or it is i' the 1ro'-(/l +ossessio' o( a' /'5'o1' +erso' or a +erso' that !a''ot %e (o/'& or is 'ot a#e'a%le to ser)i!e o( +ro!ess. (8) ?O%li-ate& %a'5? #ea's the iss/er o( a !ashierBs !he!5 or tellerBs !he!5 or the a!!e+tor o( a !erti(ie& !he!5. (%) A !lai#a't #a$ assert a !lai# to the a#o/'t o( a !he!5 %$ a !o##/'i!atio' to the o%li-ate& %a'5 &es!ri%i'- the !he!5 1ith reaso'a%le !ertai't$ a'& re7/esti'- +a$#e't o( the a#o/'t o( the !he!52 i( (i) the !lai#a't is the &ra1er or +a$ee o( a !erti(ie& !he!5 or the re#itter or +a$ee o( a !ashierBs !he!5 or tellerBs !he!52 (ii) the !o##/'i!atio' !o'tai's or is a!!o#+a'ie& %$ a &e!laratio' o( loss o( the !lai#a't 1ith res+e!t to the !he!52 (iii) the !o##/'i!atio' is re!ei)e& at a ti#e a'& i' a #a''er a((or&i'- the %a'5 a reaso'a%le ti#e to a!t o' it %e(ore the !he!5 is +ai&2 a'& (i)) the !lai#a't +ro)i&es reaso'a%le i&e'ti(i!atio' i( re7/este& %$ the o%li-ate& %a'5. =eli)er$ o( a &e!laratio' o( loss is a 1arra't$ o( the tr/th o( the state#e'ts #a&e i' the &e!laratio'. I( a !lai# is asserte& i' !o#+lia'!e 1ith this s/%se!tio'2 the (ollo1i'- r/les a++l$0

(1) The !lai# %e!o#es e'(or!ea%le at the later o( (i) the ti#e the !lai# is asserte&2 or (ii) the A0th &a$ (ollo1i'- the &ate o( the !he!52 i' the !ase o( a !ashierBs !he!5 or tellerBs !he!52 or the A0th &a$ (ollo1i'- the &ate o( the a!!e+ta'!e2 i' the !ase o( a !erti(ie& !he!5. (*) U'til the !lai# %e!o#es e'(or!ea%le2 it has 'o le-al e((e!t a'& the o%li-ate& %a'5 #a$ +a$ the !he!5 or2 i' the !ase o( a tellerBs !he!52 #a$ +er#it the &ra1ee to +a$ the !he!5. Pa$#e't to a +erso' e'title& to e'(or!e the !he!5 &is!har-es all lia%ilit$ o( the o%li-ate& %a'5 1ith res+e!t to the !he!5. (.) I( the !lai# %e!o#es e'(or!ea%le %e(ore the !he!5 is +rese'te& (or +a$#e't2 the o%li-ate& %a'5 is 'ot o%li-e& to +a$ the !he!5. (8) Che' the !lai# %e!o#es e'(or!ea%le2 the o%li-ate& %a'5 %e!o#es o%li-e& to +a$ the a#o/'t o( the !he!5 to the !lai#a't i( +a$#e't o( the !he!5 has 'ot %ee' #a&e to a +erso' e'title& to e'(or!e the !he!5. S/%6e!t to Se!tio' 8-.0*(a)(1)2 +a$#e't to the !lai#a't &is!har-es all lia%ilit$ o( the o%li-ate& %a'5 1ith res+e!t to the !he!5. (!) I( the o%li-ate& %a'5 +a$s the a#o/'t o( a !he!5 to a !lai#a't /'&er s/%se!tio' (%) (8) a'& the !he!5 is +rese'te& (or +a$#e't %$ a +erso' ha)i'- ri-hts o( a hol&er i' &/e !o/rse2 the !lai#a't is o%li-e& to (i) re(/'& the +a$#e't to the o%li-ate& %a'5 i( the !he!5 is +ai&2 or (ii) +a$ the a#o/'t o( the !he!5 to the +erso' ha)i'- ri-hts o( a hol&er i' &/e !o/rse i( the !he!5 is &isho'ore&. (&) I( a !lai#a't has the ri-ht to assert a !lai# /'&er s/%se!tio' (%) a'& is also a +erso' e'title& to e'(or!e a !ashierBs !he!52 tellerBs !he!52 or !erti(ie& !he!5 1hi!h is lost2 &estro$e&2 or stole'2 the !lai#a't #a$ assert ri-hts 1ith res+e!t to the !he!5 either /'&er this se!tio' or Se!tio' .-.0A. PART 8. LIA@ILITG O> PARTIES .-801. SIGNATURE. (a) A +erso' is 'ot lia%le o' a' i'str/#e't /'less (i) the +erso' si-'e& the i'str/#e't2 or (ii) the +erso' is re+rese'te& %$ a' a-e't or re+rese'tati)e 1ho si-'e& the i'str/#e't a'& the si-'at/re is %i'&i'- o' the re+rese'te& +erso' /'&er Se!tio' .-80*.

(%) A si-'at/re #a$ %e #a&e (i) #a'/all$ or %$ #ea's o( a &e)i!e or #a!hi'e2 a'& (ii) %$ the /se o( a'$ 'a#e2 i'!l/&i'- a tra&e or ass/#e& 'a#e2 or %$ a 1or&2 #ar52 or s$#%ol e,e!/te& or a&o+te& %$ a +erso' 1ith +rese't i'te'tio' to a/the'ti!ate a 1riti'-.

 .-80*. SIGNATURE @G REPRESENTATIVE. (a) I( a +erso' a!ti'-2 or +/r+orti'- to a!t2 as a re+rese'tati)e si-'s a' i'str/#e't %$ si-'i'- either the 'a#e o( the re+rese'te& +erso' or the 'a#e o( the si-'er2 the re+rese'te& +erso' is %o/'& %$ the si-'at/re to the sa#e e,te't the re+rese'te& +erso' 1o/l& %e %o/'& i( the si-'at/re 1ere o' a si#+le !o'tra!t. I( the re+rese'te& +erso' is %o/'&2 the si-'at/re o( the re+rese'tati)e is the ?a/thori3e& si-'at/re o( the re+rese'te& +erso'? a'& the re+rese'te& +erso' is lia%le o' the i'str/#e't2 1hether or 'ot i&e'ti(ie& i' the i'str/#e't. (%) I( a re+rese'tati)e si-'s the 'a#e o( the re+rese'tati)e to a' i'str/#e't a'& the si-'at/re is a' a/thori3e& si-'at/re o( the re+rese'te& +erso'2 the (ollo1i'- r/les a++l$0 (1) I( the (or# o( the si-'at/re sho1s /'a#%i-/o/sl$ that the si-'at/re is #a&e o' %ehal( o( the re+rese'te& +erso' 1ho is i&e'ti(ie& i' the i'str/#e't2 the re+rese'tati)e is 'ot lia%le o' the i'str/#e't. (*) S/%6e!t to s/%se!tio' (!)2 i( (i) the (or# o( the si-'at/re &oes 'ot sho1 /'a#%i-/o/sl$ that the si-'at/re is #a&e i' a re+rese'tati)e !a+a!it$ or (ii) the re+rese'te& +erso' is 'ot i&e'ti(ie& i' the i'str/#e't2 the re+rese'tati)e is lia%le o' the i'str/#e't to a hol&er i' &/e !o/rse that too5 the i'str/#e't 1itho/t 'oti!e that the re+rese'tati)e 1as 'ot i'te'&e& to %e lia%le o' the i'str/#e't. Cith res+e!t to a'$ other +erso'2 the re+rese'tati)e is lia%le o' the i'str/#e't /'less the re+rese'tati)e +ro)es that the ori-i'al +arties &i& 'ot i'te'& the re+rese'tati)e to %e lia%le o' the i'str/#e't. (!) I( a re+rese'tati)e si-'s the 'a#e o( the re+rese'tati)e as &ra1er o( a !he!5 1itho/t i'&i!atio' o( the re+rese'tati)e stat/s a'& the !he!5 is +a$a%le (ro# a' a!!o/'t o( the re+rese'te& +erso' 1ho is i&e'ti(ie& o' the !he!52 the si-'er is 'ot lia%le o' the !he!5 i( the si-'at/re is a' a/thori3e& si-'at/re o( the re+rese'te& +erso'. .-80.. UNAUTDORILE= SIGNATURE. (a) U'less other1ise +ro)i&e& i' this Arti!le or Arti!le 82 a' /'a/thori3e& si-'at/re is i'e((e!ti)e e,!e+t as the si-'at/re o( the /'a/thori3e& si-'er i' (a)or o( a +erso' 1ho i' -oo& (aith +a$s the i'str/#e't or ta5es it (or )al/e. A' /'a/thori3e& si-'at/re #a$ %e rati(ie& (or all +/r+oses o( this Arti!le. (%) I( the si-'at/re o( #ore tha' o'e +erso' is re7/ire& to !o'stit/te the a/thori3e& si-'at/re o( a' or-a'i3atio'2 the si-'at/re o( the or-a'i3atio' is /'a/thori3e& i( o'e o( the re7/ire& si-'at/res is la!5i'-.

(!) The !i)il or !ri#i'al lia%ilit$ o( a +erso' 1ho #a5es a' /'a/thori3e& si-'at/re is 'ot a((e!te& %$ a'$ +ro)isio' o( this Arti!le 1hi!h #a5es the /'a/thori3e& si-'at/re e((e!ti)e (or the +/r+oses o( this Arti!le. .-808. IEPOSTORS4 >ICTITIOUS PAGEES. (a) I( a' i#+ostor2 %$ /se o( the #ails or other1ise2 i'&/!es the iss/er o( a' i'str/#e't to iss/e the i'str/#e't to the i#+ostor2 or to a +erso' a!ti'- i' !o'!ert 1ith the i#+ostor2 %$ i#+erso'ati'- the +a$ee o( the i'str/#e't or a +erso' a/thori3e& to a!t (or the +a$ee2 a' i'&orse#e't o( the i'str/#e't %$ a'$ +erso' i' the 'a#e o( the +a$ee is e((e!ti)e as the i'&orse#e't o( the +a$ee i' (a)or o( a +erso' 1ho2 i' -oo& (aith2 +a$s the i'str/#e't or ta5es it (or )al/e or (or !olle!tio'. (%) I( (i) a +erso' 1hose i'te't &eter#i'es to 1ho# a' i'str/#e't is +a$a%le (Se!tio' .-110(a) or (%)) &oes 'ot i'te'& the +erso' i&e'ti(ie& as +a$ee to ha)e a'$ i'terest i' the i'str/#e't2 or (ii) the +erso' i&e'ti(ie& as +a$ee o( a' i'str/#e't is a (i!titio/s +erso'2 the (ollo1i'- r/les a++l$ /'til the i'str/#e't is 'e-otiate& %$ s+e!ial i'&orse#e't0 (1) A'$ +erso' i' +ossessio' o( the i'str/#e't is its hol&er. (*) A' i'&orse#e't %$ a'$ +erso' i' the 'a#e o( the +a$ee state& i' the i'str/#e't is e((e!ti)e as the i'&orse#e't o( the +a$ee i' (a)or o( a +erso' 1ho2 i' -oo& (aith2 +a$s the i'str/#e't or ta5es it (or )al/e or (or !olle!tio'. (!) U'&er s/%se!tio' (a) or (%)2 a' i'&orse#e't is #a&e i' the 'a#e o( a +a$ee i( (i) it is #a&e i' a 'a#e s/%sta'tiall$ si#ilar to that o( the +a$ee or (ii) the i'str/#e't2 1hether or 'ot i'&orse&2 is &e+osite& i' a &e+ositar$ %a'5 to a' a!!o/'t i' a 'a#e s/%sta'tiall$ si#ilar to that o( the +a$ee. (&) Cith res+e!t to a' i'str/#e't to 1hi!h s/%se!tio' (a) or (%) a++lies2 i( a +erso' +a$i'- the i'str/#e't or ta5i'- it (or )al/e or (or !olle!tio' (ails to e,er!ise or&i'ar$ !are i' +a$i'- or ta5i'- the i'str/#e't a'& that (ail/re s/%sta'tiall$ !o'tri%/tes to loss res/lti'- (ro# +a$#e't o( the i'str/#e't2 the +erso' %eari'- the loss #a$ re!o)er (ro# the +erso' (aili'- to e,er!ise or&i'ar$ !are to the e,te't the (ail/re to e,er!ise or&i'ar$ !are !o'tri%/te& to the loss. .-809. EEPLOGERBS RESPONSI@ILITG >OR >RAU=ULENT IN=ORSEEENT @G EEPLOGEE. (a) I' this se!tio'0 (1) ?E#+lo$ee? i'!l/&es a' i'&e+e'&e't !o'tra!tor a'& e#+lo$ee o( a' i'&e+e'&e't !o'tra!tor retai'e& %$ the e#+lo$er.

(*) ?>ra/&/le't i'&orse#e't? #ea's (i) i' the !ase o( a' i'str/#e't +a$a%le to the e#+lo$er2 a (or-e& i'&orse#e't +/r+orti'- to %e that o( the e#+lo$er2 or (ii) i' the !ase o( a' i'str/#e't 1ith res+e!t to 1hi!h the e#+lo$er is the iss/er2 a (or-e& i'&orse#e't +/r+orti'- to %e that o( the +erso' i&e'ti(ie& as +a$ee. (.) ?Res+o'si%ilit$? 1ith res+e!t to i'str/#e'ts #ea's a/thorit$ (i) to si-' or i'&orse i'str/#e'ts o' %ehal( o( the e#+lo$er2 (ii) to +ro!ess i'str/#e'ts re!ei)e& %$ the e#+lo$er (or %oo55ee+i'- +/r+oses2 (or &e+osit to a' a!!o/'t2 or (or other &is+ositio'2 (iii) to +re+are or +ro!ess i'str/#e'ts (or iss/e i' the 'a#e o( the e#+lo$er2 (i)) to s/++l$ i'(or#atio' &eter#i'i'- the 'a#es or a&&resses o( +a$ees o( i'str/#e'ts to %e iss/e& i' the 'a#e o( the e#+lo$er2 ()) to !o'trol the &is+ositio' o( i'str/#e'ts to %e iss/e& i' the 'a#e o( the e#+lo$er2 or ()i) to a!t other1ise 1ith res+e!t to i'str/#e'ts i' a res+o'si%le !a+a!it$. ?Res+o'si%ilit$? &oes 'ot i'!l/&e a/thorit$ that #erel$ allo1s a' e#+lo$ee to ha)e a!!ess to i'str/#e'ts or %la'5 or i'!o#+lete i'str/#e't (or#s that are %ei'- store& or tra's+orte& or are +art o( i'!o#i'- or o/t-oi'- #ail2 or si#ilar a!!ess. (%) >or the +/r+ose o( &eter#i'i'- the ri-hts a'& lia%ilities o( a +erso' 1ho2 i' -oo& (aith2 +a$s a' i'str/#e't or ta5es it (or )al/e or (or !olle!tio'2 i( a' e#+lo$er e'tr/ste& a' e#+lo$ee 1ith res+o'si%ilit$ 1ith res+e!t to the i'str/#e't a'& the e#+lo$ee or a +erso' a!ti'- i' !o'!ert 1ith the e#+lo$ee #a5es a (ra/&/le't i'&orse#e't o( the i'str/#e't2 the i'&orse#e't is e((e!ti)e as the i'&orse#e't o( the +erso' to 1ho# the i'str/#e't is +a$a%le i( it is #a&e i' the 'a#e o( that +erso'. I( the +erso' +a$i'- the i'str/#e't or ta5i'- it (or )al/e or (or !olle!tio' (ails to e,er!ise or&i'ar$ !are i' +a$i'or ta5i'- the i'str/#e't a'& that (ail/re s/%sta'tiall$ !o'tri%/tes to loss res/lti'- (ro# the (ra/&2 the +erso' %eari'- the loss #a$ re!o)er (ro# the +erso' (aili'- to e,er!ise or&i'ar$ !are to the e,te't the (ail/re to e,er!ise or&i'ar$ !are !o'tri%/te& to the loss. (!) U'&er s/%se!tio' (%)2 a' i'&orse#e't is #a&e i' the 'a#e o( the +erso' to 1ho# a' i'str/#e't is +a$a%le i( (i) it is #a&e i' a 'a#e s/%sta'tiall$ si#ilar to the 'a#e o( that +erso' or (ii) the i'str/#e't2 1hether or 'ot i'&orse&2 is &e+osite& i' a &e+ositar$ %a'5 to a' a!!o/'t i' a 'a#e s/%sta'tiall$ si#ilar to the 'a#e o( that +erso'. .-80:. NEGLIGENCE CONTRI@UTING TO >ORGE= SIGNATURE OR ALTERATION O> INSTRUEENT. (a) A +erso' 1hose (ail/re to e,er!ise or&i'ar$ !are s/%sta'tiall$ !o'tri%/tes to a' alteratio' o( a' i'str/#e't or to the #a5i'- o( a (or-e& si-'at/re o' a' i'str/#e't is +re!l/&e& (ro# asserti'- the alteratio' or the (or-er$ a-ai'st a +erso' 1ho2 i' -oo& (aith2 +a$s the i'str/#e't or ta5es it (or )al/e or (or !olle!tio'. (%) U'&er s/%se!tio' (a)2 i( the +erso' asserti'- the +re!l/sio' (ails to e,er!ise or&i'ar$ !are i' +a$i'- or ta5i'- the i'str/#e't a'& that (ail/re s/%sta'tiall$

!o'tri%/tes to loss2 the loss is allo!ate& %et1ee' the +erso' +re!l/&e& a'& the +erso' asserti'- the +re!l/sio' a!!or&i'- to the e,te't to 1hi!h the (ail/re o( ea!h to e,er!ise or&i'ar$ !are !o'tri%/te& to the loss. (!) U'&er s/%se!tio' (a)2 the %/r&e' o( +ro)i'- (ail/re to e,er!ise or&i'ar$ !are is o' the +erso' asserti'- the +re!l/sio'. U'&er s/%se!tio' (%)2 the %/r&e' o( +ro)i'- (ail/re to e,er!ise or&i'ar$ !are is o' the +erso' +re!l/&e&. .-80;. ALTERATION. (a) ?Alteratio'? #ea's (i) a' /'a/thori3e& !ha'-e i' a' i'str/#e't that +/r+orts to #o&i($ i' a'$ res+e!t the o%li-atio' o( a +art$2 or (ii) a' /'a/thori3e& a&&itio' o( 1or&s or '/#%ers or other !ha'-e to a' i'!o#+lete i'str/#e't relati'- to the o%li-atio' o( a +art$. (%) E,!e+t as +ro)i&e& i' s/%se!tio' (!)2 a' alteratio' (ra/&/le'tl$ #a&e &is!har-es a +art$ 1hose o%li-atio' is a((e!te& %$ the alteratio' /'less that +art$ asse'ts or is +re!l/&e& (ro# asserti'- the alteratio'. No other alteratio' &is!har-es a +art$2 a'& the i'str/#e't #a$ %e e'(or!e& a!!or&i'- to its ori-i'al ter#s. (!) A +a$or %a'5 or &ra1ee +a$i'- a (ra/&/le'tl$ altere& i'str/#e't or a +erso' ta5i'it (or )al/e2 i' -oo& (aith a'& 1itho/t 'oti!e o( the alteratio'2 #a$ e'(or!e ri-hts 1ith res+e!t to the i'str/#e't (i) a!!or&i'- to its ori-i'al ter#s2 or (ii) i' the !ase o( a' i'!o#+lete i'str/#e't altere& %$ /'a/thori3e& !o#+letio'2 a!!or&i'- to its ter#s as !o#+lete&. .-80<. =RACEE NOT LIA@LE ON UNACCEPTE= =RA>T. A !he!5 or other &ra(t &oes 'ot o( itsel( o+erate as a' assi-'#e't o( (/'&s i' the ha'&s o( the &ra1ee a)aila%le (or its +a$#e't2 a'& the &ra1ee is 'ot lia%le o' the i'str/#e't /'til the &ra1ee a!!e+ts it. .-80A. ACCEPTANCE O> =RA>T4 CERTI>IE= CDECF. (a) ?A!!e+ta'!e? #ea's the &ra1eeBs si-'e& a-ree#e't to +a$ a &ra(t as +rese'te&. It #/st %e 1ritte' o' the &ra(t a'& #a$ !o'sist o( the &ra1eeBs si-'at/re alo'e. A!!e+ta'!e #a$ %e #a&e at a'$ ti#e a'& %e!o#es e((e!ti)e 1he' 'oti(i!atio' +/rs/a't to i'str/!tio's is -i)e' or the a!!e+te& &ra(t is &eli)ere& (or the +/r+ose o( -i)i'- ri-hts o' the a!!e+ta'!e to a'$ +erso'. (%) A &ra(t #a$ %e a!!e+te& altho/-h it has 'ot %ee' si-'e& %$ the &ra1er2 is other1ise i'!o#+lete2 is o)er&/e2 or has %ee' &isho'ore&.

(!) I( a &ra(t is +a$a%le at a (i,e& +erio& a(ter si-ht a'& the a!!e+tor (ails to &ate the a!!e+ta'!e2 the hol&er #a$ !o#+lete the a!!e+ta'!e %$ s/++l$i'- a &ate i' -oo& (aith. (&) ?Certi(ie& !he!5? #ea's a !he!5 a!!e+te& %$ the %a'5 o' 1hi!h it is &ra1'. A!!e+ta'!e #a$ %e #a&e as state& i' s/%se!tio' (a) or %$ a 1riti'- o' the !he!5 1hi!h i'&i!ates that the !he!5 is !erti(ie&. The &ra1ee o( a !he!5 has 'o o%li-atio' to !erti($ the !he!52 a'& re(/sal to !erti($ is 'ot &isho'or o( the !he!5. .-810. ACCEPTANCE VARGING =RA>T. (a) I( the ter#s o( a &ra1eeBs a!!e+ta'!e )ar$ (ro# the ter#s o( the &ra(t as +rese'te&2 the hol&er #a$ re(/se the a!!e+ta'!e a'& treat the &ra(t as &isho'ore&. I' that !ase2 the &ra1ee #a$ !a'!el the a!!e+ta'!e. (%) The ter#s o( a &ra(t are 'ot )arie& %$ a' a!!e+ta'!e to +a$ at a +arti!/lar %a'5 or +la!e i' the U'ite& States2 /'less the a!!e+ta'!e states that the &ra(t is to %e +ai& o'l$ at that %a'5 or +la!e. (!) I( the hol&er asse'ts to a' a!!e+ta'!e )ar$i'- the ter#s o( a &ra(t2 the o%li-atio' o( ea!h &ra1er a'& i'&orser that &oes 'ot e,+ressl$ asse't to the a!!e+ta'!e is &is!har-e&. .-811. RE>USAL TO PAG CASDIERBS CDECFS2 TELLERBS CDECFS2 AN= CERTI>IE= CDECFS. (a) I' this se!tio'2 ?o%li-ate& %a'5? #ea's the a!!e+tor o( a !erti(ie& !he!5 or the iss/er o( a !ashierBs !he!5 or tellerBs !he!5 %o/-ht (ro# the iss/er. (%) I( the o%li-ate& %a'5 1ro'-(/ll$ (i) re(/ses to +a$ a !ashierBs !he!5 or !erti(ie& !he!52 (ii) sto+s +a$#e't o( a tellerBs !he!52 or (iii) re(/ses to +a$ a &isho'ore& tellerBs !he!52 the +erso' asserti'- the ri-ht to e'(or!e the !he!5 is e'title& to !o#+e'satio' (or e,+e'ses a'& loss o( i'terest res/lti'- (ro# the 'o'+a$#e't a'& #a$ re!o)er !o'se7/e'tial &a#a-es i( the o%li-ate& %a'5 re(/ses to +a$ a(ter re!ei)i'- 'oti!e o( +arti!/lar !ir!/#sta'!es -i)i'- rise to the &a#a-es. (!) E,+e'ses or !o'se7/e'tial &a#a-es /'&er s/%se!tio' (%) are 'ot re!o)era%le i( the re(/sal o( the o%li-ate& %a'5 to +a$ o!!/rs %e!a/se (i) the %a'5 s/s+e'&s +a$#e'ts2 (ii) the o%li-ate& %a'5 asserts a !lai# or &e(e'se o( the %a'5 that it has reaso'a%le -ro/'&s to %elie)e is a)aila%le a-ai'st the +erso' e'title& to e'(or!e the i'str/#e't2 (iii) the o%li-ate& %a'5 has a reaso'a%le &o/%t 1hether the +erso' &e#a'&i'- +a$#e't is the +erso' e'title& to e'(or!e the i'str/#e't2 or (i)) +a$#e't is +rohi%ite& %$ la1. .-81*. O@LIGATION O> ISSUER O> NOTE OR CASDIERBS CDECF.

The iss/er o( a 'ote or !ashierBs !he!5 or other &ra(t &ra1' o' the &ra1er is o%li-e& to +a$ the i'str/#e't (i) a!!or&i'- to its ter#s at the ti#e it 1as iss/e& or2 i( 'ot iss/e&2 at the ti#e it (irst !a#e i'to +ossessio' o( a hol&er2 or (ii) i( the iss/er si-'e& a' i'!o#+lete i'str/#e't2 a!!or&i'- to its ter#s 1he' !o#+lete&2 to the e,te't state& i' Se!tio's .-119 a'& .-80;. The o%li-atio' is o1e& to a +erso' e'title& to e'(or!e the i'str/#e't or to a' i'&orser 1ho +ai& the i'str/#e't /'&er Se!tio' .-819. .-81.. O@LIGATION O> ACCEPTOR. (a) The a!!e+tor o( a &ra(t is o%li-e& to +a$ the &ra(t (i) a!!or&i'- to its ter#s at the ti#e it 1as a!!e+te&2 e)e' tho/-h the a!!e+ta'!e states that the &ra(t is +a$a%le ?as ori-i'all$ &ra1'? or e7/i)ale't ter#s2 (ii) i( the a!!e+ta'!e )aries the ter#s o( the &ra(t2 a!!or&i'- to the ter#s o( the &ra(t as )arie&2 or (iii) i( the a!!e+ta'!e is o( a &ra(t that is a' i'!o#+lete i'str/#e't2 a!!or&i'- to its ter#s 1he' !o#+lete&2 to the e,te't state& i' Se!tio's .-119 a'& .-80;. The o%li-atio' is o1e& to a +erso' e'title& to e'(or!e the &ra(t or to the &ra1er or a' i'&orser 1ho +ai& the &ra(t /'&er Se!tio' .-818 or .-819. (%) I( the !erti(i!atio' o( a !he!5 or other a!!e+ta'!e o( a &ra(t states the a#o/'t !erti(ie& or a!!e+te&2 the o%li-atio' o( the a!!e+tor is that a#o/'t. I( (i) the !erti(i!atio' or a!!e+ta'!e &oes 'ot state a' a#o/'t2 (ii) the a#o/'t o( the i'str/#e't is s/%se7/e'tl$ raise&2 a'& (iii) the i'str/#e't is the' 'e-otiate& to a hol&er i' &/e !o/rse2 the o%li-atio' o( the a!!e+tor is the a#o/'t o( the i'str/#e't at the ti#e it 1as ta5e' %$ the hol&er i' &/e !o/rse. .-818. O@LIGATION O> =RACER. (a) This se!tio' &oes 'ot a++l$ to !ashierBs !he!5s or other &ra(ts &ra1' o' the &ra1er. (%) I( a' /'a!!e+te& &ra(t is &isho'ore&2 the &ra1er is o%li-e& to +a$ the &ra(t (i) a!!or&i'- to its ter#s at the ti#e it 1as iss/e& or2 i( 'ot iss/e&2 at the ti#e it (irst !a#e i'to +ossessio' o( a hol&er2 or (ii) i( the &ra1er si-'e& a' i'!o#+lete i'str/#e't2 a!!or&i'- to its ter#s 1he' !o#+lete&2 to the e,te't state& i' Se!tio's .-119 a'& .80;. The o%li-atio' is o1e& to a +erso' e'title& to e'(or!e the &ra(t or to a' i'&orser 1ho +ai& the &ra(t /'&er Se!tio' .-819. (!) I( a &ra(t is a!!e+te& %$ a %a'52 the &ra1er is &is!har-e&2 re-ar&less o( 1he' or %$ 1ho# a!!e+ta'!e 1as o%tai'e&. (&) I( a &ra(t is a!!e+te& a'& the a!!e+tor is 'ot a %a'52 the o%li-atio' o( the &ra1er to +a$ the &ra(t i( the &ra(t is &isho'ore& %$ the a!!e+tor is the sa#e as the o%li-atio' o( a' i'&orser /'&er Se!tio' .-819(a) a'& (!). (e) I( a &ra(t states that it is &ra1' ?1itho/t re!o/rse? or other1ise &is!lai#s lia%ilit$ o( the &ra1er to +a$ the &ra(t2 the &ra1er is 'ot lia%le /'&er s/%se!tio' (%) to +a$ the

&ra(t i( the &ra(t is 'ot a !he!5. A &is!lai#er o( the lia%ilit$ state& i' s/%se!tio' (%) is 'ot e((e!ti)e i( the &ra(t is a !he!5. (() I( (i) a !he!5 is 'ot +rese'te& (or +a$#e't or -i)e' to a &e+ositar$ %a'5 (or !olle!tio' 1ithi' .0 &a$s a(ter its &ate2 (ii) the &ra1ee s/s+e'&s +a$#e'ts a(ter e,+iratio' o( the .0-&a$ +erio& 1itho/t +a$i'- the !he!52 a'& (iii) %e!a/se o( the s/s+e'sio' o( +a$#e'ts2 the &ra1er is &e+ri)e& o( (/'&s #ai'tai'e& 1ith the &ra1ee to !o)er +a$#e't o( the !he!52 the &ra1er to the e,te't &e+ri)e& o( (/'&s #a$ &is!har-e its o%li-atio' to +a$ the !he!5 %$ assi-'i'- to the +erso' e'title& to e'(or!e the !he!5 the ri-hts o( the &ra1er a-ai'st the &ra1ee 1ith res+e!t to the (/'&s. .-819. O@LIGATION O> IN=ORSER. (a) S/%6e!t to s/%se!tio's (%)2 (!)2 a'& (&) a'& to Se!tio' .-81A(&)2 i( a' i'str/#e't is &isho'ore&2 a' i'&orser is o%li-e& to +a$ the a#o/'t &/e o' the i'str/#e't (i) a!!or&i'- to the ter#s o( the i'str/#e't at the ti#e it 1as i'&orse&2 or (ii) i( the i'&orser i'&orse& a' i'!o#+lete i'str/#e't2 a!!or&i'- to its ter#s 1he' !o#+lete&2 to the e,te't state& i' Se!tio's .-119 a'& .-80;. The o%li-atio' o( the i'&orser is o1e& to a +erso' e'title& to e'(or!e the i'str/#e't or to a s/%se7/e't i'&orser 1ho +ai& the i'str/#e't /'&er this se!tio'. (%) I( a' i'&orse#e't states that it is #a&e ?1itho/t re!o/rse? or other1ise &is!lai#s lia%ilit$ o( the i'&orser2 the i'&orser is 'ot lia%le /'&er s/%se!tio' (a) to +a$ the i'str/#e't. (!) I( 'oti!e o( &isho'or o( a' i'str/#e't is re7/ire& %$ Se!tio' .-90. a'& 'oti!e o( &isho'or !o#+l$i'- 1ith that se!tio' is 'ot -i)e' to a' i'&orser2 the lia%ilit$ o( the i'&orser /'&er s/%se!tio' (a) is &is!har-e&. (&) I( a &ra(t is a!!e+te& %$ a %a'5 a(ter a' i'&orse#e't is #a&e2 the lia%ilit$ o( the i'&orser /'&er s/%se!tio' (a) is &is!har-e&. (e) I( a' i'&orser o( a !he!5 is lia%le /'&er s/%se!tio' (a) a'& the !he!5 is 'ot +rese'te& (or +a$#e't2 or -i)e' to a &e+ositar$ %a'5 (or !olle!tio'2 1ithi' .0 &a$s a(ter the &a$ the i'&orse#e't 1as #a&e2 the lia%ilit$ o( the i'&orser /'&er s/%se!tio' (a) is &is!har-e&. .-81:. TRANS>ER CARRANTIES. (a) A +erso' 1ho tra's(ers a' i'str/#e't (or !o'si&eratio' 1arra'ts to the tra's(eree a'&2 i( the tra's(er is %$ i'&orse#e't2 to a'$ s/%se7/e't tra's(eree that0 (1) the 1arra'tor is a +erso' e'title& to e'(or!e the i'str/#e't4

(*) all si-'at/res o' the i'str/#e't are a/the'ti! a'& a/thori3e&4 (.) the i'str/#e't has 'ot %ee' altere&4 (8) the i'str/#e't is 'ot s/%6e!t to a &e(e'se or !lai# i' re!o/+#e't o( a'$ +art$ 1hi!h !a' %e asserte& a-ai'st the 1arra'tor4 a'& (9) the 1arra'tor has 'o 5'o1le&-e o( a'$ i'sol)e'!$ +ro!ee&i'- !o##e'!e& 1ith res+e!t to the #a5er or a!!e+tor or2 i' the !ase o( a' /'a!!e+te& &ra(t2 the &ra1er4 a'& (:) 1ith res+e!t to a re#otel$-!reate& !o's/#er ite#2 that the +erso' o' 1hose a!!o/'t the ite# is &ra1' a/thori3e& the iss/a'!e o( the ite# i' the a#o/'t (or 1hi!h the ite# is &ra1'. (%) A +erso' to 1ho# the 1arra'ties /'&er s/%se!tio' (a) are #a&e a'& 1ho too5 the i'str/#e't i' -oo& (aith #a$ re!o)er (ro# the 1arra'tor as &a#a-es (or %rea!h o( 1arra't$ a' a#o/'t e7/al to the loss s/((ere& as a res/lt o( the %rea!h2 %/t 'ot #ore tha' the a#o/'t o( the i'str/#e't +l/s e,+e'ses a'& loss o( i'terest i'!/rre& as a res/lt o( the %rea!h. (!) The 1arra'ties state& i' s/%se!tio' (a) !a''ot %e &is!lai#e& 1ith res+e!t to !he!5s. U'less 'oti!e o( a !lai# (or %rea!h o( 1arra't$ is -i)e' to the 1arra'tor 1ithi' .0 &a$s a(ter the !lai#a't has reaso' to 5'o1 o( the %rea!h a'& the i&e'tit$ o( the 1arra'tor2 the lia%ilit$ o( the 1arra'tor /'&er s/%se!tio' (%) is &is!har-e& to the e,te't o( a'$ loss !a/se& %$ the &ela$ i' -i)i'- 'oti!e o( the !lai#. (&) A !a/se o( a!tio'" (or %rea!h o( 1arra't$ /'&er this se!tio' a!!r/es 1he' the !lai#a't has reaso' to 5'o1 o( the %rea!h. .-81;. PRESENTEENT CARRANTIES. (a) I( a' /'a!!e+te& &ra(t is +rese'te& to the &ra1ee (or +a$#e't or a!!e+ta'!e a'& the &ra1ee +a$s or a!!e+ts the &ra(t2 (i) the +erso' o%tai'i'- +a$#e't or a!!e+ta'!e2 at the ti#e o( +rese't#e't2 a'& (ii) a +re)io/s tra's(eror o( the &ra(t2 at the ti#e o( tra's(er2 1arra't to the &ra1ee #a5i'- +a$#e't or a!!e+ti'- the &ra(t i' -oo& (aith that0 (1) the 1arra'tor is2 or 1as2 at the ti#e the 1arra'tor tra's(erre& the &ra(t2 a +erso' e'title& to e'(or!e the &ra(t or a/thori3e& to o%tai' +a$#e't or a!!e+ta'!e o( the &ra(t o' %ehal( o( a +erso' e'title& to e'(or!e the &ra(t4 (*) the &ra(t has 'ot %ee' altere&4

(.) the 1arra'tor has 'o 5'o1le&-e that the si-'at/re o( the &ra1er o( the &ra(t is /'a/thori3e&4 (8) 1ith res+e!t to a'$ re#otel$-!reate& !o's/#er ite#2 that the +erso' o' 1hose a!!o/'t the ite# is &ra1' a/thori3e& the iss/a'!e o( the ite# i' the a#o/'t (or 1hi!h the ite# is &ra1'. (%) A &ra1ee #a5i'- +a$#e't #a$ re!o)er (ro# a'$ 1arra'tor &a#a-es (or %rea!h o( 1arra't$ e7/al to the a#o/'t +ai& %$ the &ra1ee less the a#o/'t the &ra1ee re!ei)e& or is e'title& to re!ei)e (ro# the &ra1er %e!a/se o( the +a$#e't. I' a&&itio'2 the &ra1ee is e'title& to !o#+e'satio' (or e,+e'ses a'& loss o( i'terest res/lti'- (ro# the %rea!h. The ri-ht o( the &ra1ee to re!o)er &a#a-es /'&er this s/%se!tio' is 'ot a((e!te& %$ a'$ (ail/re o( the &ra1ee to e,er!ise or&i'ar$ !are i' #a5i'- +a$#e't. I( the &ra1ee a!!e+ts the &ra(t2 %rea!h o( 1arra't$ is a &e(e'se to the o%li-atio' o( the a!!e+tor. I( the a!!e+tor #a5es +a$#e't 1ith res+e!t to the &ra(t2 the a!!e+tor is e'title& to re!o)er (ro# a'$ 1arra'tor (or %rea!h o( 1arra't$ the a#o/'ts state& i' this s/%se!tio'. (!) I( a &ra1ee asserts a !lai# (or %rea!h o( 1arra't$ /'&er s/%se!tio' (a) %ase& o' a' /'a/thori3e& i'&orse#e't o( the &ra(t or a' alteratio' o( the &ra(t2 the 1arra'tor #a$ &e(e'& %$ +ro)i'- that the i'&orse#e't is e((e!ti)e /'&er Se!tio' .-808 or .-809 or the &ra1er is +re!l/&e& /'&er Se!tio' .-80: or 8-80: (ro# asserti'- a-ai'st the &ra1ee the /'a/thori3e& i'&orse#e't or alteratio'. (&) I( (i) a &isho'ore& &ra(t is +rese'te& (or +a$#e't to the &ra1er or a' i'&orser or (ii) a'$ other i'str/#e't is +rese'te& (or +a$#e't to a +art$ o%li-e& to +a$ the i'str/#e't2 a'& (iii) +a$#e't is re!ei)e&2 the (ollo1i'- r/les a++l$0 (1) The +erso' o%tai'i'- +a$#e't a'& a +rior tra's(eror o( the i'str/#e't 1arra't to the +erso' #a5i'- +a$#e't i' -oo& (aith that the 1arra'tor is2 or 1as2 at the ti#e the 1arra'tor tra's(erre& the i'str/#e't2 a +erso' e'title& to e'(or!e the i'str/#e't or a/thori3e& to o%tai' +a$#e't o' %ehal( o( a +erso' e'title& to e'(or!e the i'str/#e't. (*) The +erso' #a5i'- +a$#e't #a$ re!o)er (ro# a'$ 1arra'tor (or %rea!h o( 1arra't$ a' a#o/'t e7/al to the a#o/'t +ai& +l/s e,+e'ses a'& loss o( i'terest res/lti'- (ro# the %rea!h. (e) The 1arra'ties state& i' s/%se!tio's (a) a'& (&) !a''ot %e &is!lai#e& 1ith res+e!t to !he!5s. U'less 'oti!e o( a !lai# (or %rea!h o( 1arra't$ is -i)e' to the 1arra'tor 1ithi' .0 &a$s a(ter the !lai#a't has reaso' to 5'o1 o( the %rea!h a'& the i&e'tit$ o( the 1arra'tor2 the lia%ilit$ o( the 1arra'tor /'&er s/%se!tio' (%) or (&) is &is!har-e& to the e,te't o( a'$ loss !a/se& %$ the &ela$ i' -i)i'- 'oti!e o( the !lai#.

(() A !a/se o( a!tio'" (or %rea!h o( 1arra't$ /'&er this se!tio' a!!r/es 1he' the !lai#a't has reaso' to 5'o1 o( the %rea!h. .-81<. PAGEENT OR ACCEPTANCE @G EISTAFE. (a) E,!e+t as +ro)i&e& i' s/%se!tio' (!)2 i( the &ra1ee o( a &ra(t +a$s or a!!e+ts the &ra(t a'& the &ra1ee a!te& o' the #ista5e' %elie( that (i) +a$#e't o( the &ra(t ha& 'ot %ee' sto++e& +/rs/a't to Se!tio' 8-80. or (ii) the si-'at/re o( the &ra1er o( the &ra(t 1as a/thori3e&2 the &ra1ee #a$ re!o)er the a#o/'t o( the &ra(t (ro# the +erso' to 1ho# or (or 1hose %e'e(it +a$#e't 1as #a&e or2 i' the !ase o( a!!e+ta'!e2 #a$ re)o5e the a!!e+ta'!e. Ri-hts o( the &ra1ee /'&er this s/%se!tio' are 'ot a((e!te& %$ (ail/re o( the &ra1ee to e,er!ise or&i'ar$ !are i' +a$i'- or a!!e+ti'- the &ra(t. (%) E,!e+t as +ro)i&e& i' s/%se!tio' (!)2 i( a' i'str/#e't has %ee' +ai& or a!!e+te& %$ #ista5e a'& the !ase is 'ot !o)ere& %$ s/%se!tio' (a)2 the +erso' +a$i'- or a!!e+ti'#a$2 to the e,te't +er#itte& %$ the la1 -o)er'i'- #ista5e a'& restit/tio'2 (i) re!o)er the +a$#e't (ro# the +erso' to 1ho# or (or 1hose %e'e(it +a$#e't 1as #a&e or (ii) i' the !ase o( a!!e+ta'!e2 #a$ re)o5e the a!!e+ta'!e. (!) The re#e&ies +ro)i&e& %$ s/%se!tio' (a) or (%) #a$ 'ot %e asserte& a-ai'st a +erso' 1ho too5 the i'str/#e't i' -oo& (aith a'& (or )al/e or 1ho i' -oo& (aith !ha'-e& +ositio' i' relia'!e o' the +a$#e't or a!!e+ta'!e. This s/%se!tio' &oes 'ot li#it re#e&ies +ro)i&e& %$ Se!tio' .-81; or 8-80;. (&) Not1ithsta'&i'- Se!tio' 8-*192 i( a' i'str/#e't is +ai& or a!!e+te& %$ #ista5e a'& the +a$or or a!!e+tor re!o)ers +a$#e't or re)o5es a!!e+ta'!e /'&er s/%se!tio' (a) or (%)2 the i'str/#e't is &ee#e& 'ot to ha)e %ee' +ai& or a!!e+te& a'& is treate& as &isho'ore&2 a'& the +erso' (ro# 1ho# +a$#e't is re!o)ere& has ri-hts as a +erso' e'title& to e'(or!e the &isho'ore& i'str/#e't. .-81A. INSTRUEENTS SIGNE= >OR ACCOEEO=ATION. (a) I( a' i'str/#e't is iss/e& (or )al/e -i)e' (or the %e'e(it o( a +art$ to the i'str/#e't (?a!!o##o&ate& +art$?) a'& a'other +art$ to the i'str/#e't (?a!!o##o&atio' +art$?) si-'s the i'str/#e't (or the +/r+ose o( i'!/rri'- lia%ilit$ o' the i'str/#e't 1itho/t %ei'- a &ire!t %e'e(i!iar$ o( the )al/e -i)e' (or the i'str/#e't2 the i'str/#e't is si-'e& %$ the a!!o##o&atio' +art$ ?(or a!!o##o&atio'.? (%) A' a!!o##o&atio' +art$ #a$ si-' the i'str/#e't as #a5er2 &ra1er2 a!!e+tor2 or i'&orser a'&2 s/%6e!t to s/%se!tio' (&)2 is o%li-e& to +a$ the i'str/#e't i' the !a+a!it$ i' 1hi!h the a!!o##o&atio' +art$ si-'s. The o%li-atio' o( a' a!!o##o&atio' +art$ #a$ %e e'(or!e& 'ot1ithsta'&i'- a'$ stat/te o( (ra/&s a'& 1hether or 'ot the a!!o##o&atio' +art$ re!ei)es !o'si&eratio' (or the a!!o##o&atio'.

(!) A +erso' si-'i'- a' i'str/#e't is +res/#e& to %e a' a!!o##o&atio' +art$ a'& there is 'oti!e that the i'str/#e't is si-'e& (or a!!o##o&atio' i( the si-'at/re is a' a'o#alo/s i'&orse#e't or is a!!o#+a'ie& %$ 1or&s i'&i!ati'- that the si-'er is a!ti'as s/ret$ or -/ara'tor 1ith res+e!t to the o%li-atio' o( a'other +art$ to the i'str/#e't. E,!e+t as +ro)i&e& i' Se!tio' .-:092 the o%li-atio' o( a' a!!o##o&atio' +art$ to +a$ the i'str/#e't is 'ot a((e!te& %$ the (a!t that the +erso' e'(or!i'- the o%li-atio' ha& 'oti!e 1he' the i'str/#e't 1as ta5e' %$ that +erso' that the a!!o##o&atio' +art$ si-'e& the i'str/#e't (or a!!o##o&atio'. (&) I( the si-'at/re o( a +art$ to a' i'str/#e't is a!!o#+a'ie& %$ 1or&s i'&i!ati'/'a#%i-/o/sl$ that the +art$ is -/ara'teei'- !olle!tio' rather tha' +a$#e't o( the o%li-atio' o( a'other +art$ to the i'str/#e't2 the si-'er is o%li-e& to +a$ the a#o/'t &/e o' the i'str/#e't to a +erso' e'title& to e'(or!e the i'str/#e't o'l$ i( (i) e,e!/tio' o( 6/&-#e't a-ai'st the other +art$ has %ee' ret/r'e& /'satis(ie&2 (ii) the other +art$ is i'sol)e't or i' a' i'sol)e'!$ +ro!ee&i'-2 (iii) the other +art$ !a''ot %e ser)e& 1ith +ro!ess2 or (i)) it is other1ise a++are't that +a$#e't !a''ot %e o%tai'e& (ro# the other +art$. (e) I( the si-'at/re o( a +art$ to a' i'str/#e't is a!!o#+a'ie& %$ 1or&s i'&i!ati'- that the +art$ -/ara'tees +a$#e't or the si-'er si-'s the i'str/#e't as a' a!!o##o&atio' +art$ i' so#e other #a''er that &oes 'ot /'a#%i-/o/sl$ i'&i!ate a' i'te'tio' to -/ara'tee !olle!tio' rather tha' +a$#e't2 the si-'er is o%li-e& to +a$ the a#o/'t &/e o' the i'str/#e't to a +erso' e'title& to e'(or!e the i'str/#e't i' the sa#e !ir!/#sta'!es as the a!!o##o&ate& +art$ 1o/l& %e o%li-e&2 1itho/t +rior resort to the a!!o##o&ate& +art$ %$ the +erso' e'title& to e'(or!e the i'str/#e't. (() A' a!!o##o&atio' +art$ 1ho +a$s the i'str/#e't is e'title& to rei#%/rse#e't (ro# the a!!o##o&ate& +art$ a'& is e'title& to e'(or!e the i'str/#e't a-ai'st the a!!o##o&ate& +art$. I' +ro+er !ir!/#sta'!es2 a' a!!o##o&atio' +art$ #a$ o%tai' relie( that re7/ires the a!!o##o&ate& +art$ to +er(or# its o%li-atio's o' the i'str/#e't. A' a!!o##o&ate& +art$ that +a$s the i'str/#e't has 'o ri-ht o( re!o/rse a-ai'st2 a'& is 'ot e'title& to !o'tri%/tio' (ro#2 a' a!!o##o&atio' +art$. .-8*0. CONVERSION O> INSTRUEENT. (a) The la1 a++li!a%le to !o')ersio' o( +erso'al +ro+ert$ a++lies to i'str/#e'ts. A' i'str/#e't is also !o')erte& i( it is ta5e' %$ tra's(er2 other tha' a 'e-otiatio'2 (ro# a +erso' 'ot e'title& to e'(or!e the i'str/#e't or a %a'5 #a5es or o%tai's +a$#e't 1ith res+e!t to the i'str/#e't (or a +erso' 'ot e'title& to e'(or!e the i'str/#e't or re!ei)e +a$#e't. A' a!tio' (or !o')ersio' o( a' i'str/#e't #a$ 'ot %e %ro/-ht %$ (i) the iss/er or a!!e+tor o( the i'str/#e't or (ii) a +a$ee or i'&orsee 1ho &i& 'ot re!ei)e &eli)er$ o( the i'str/#e't either &ire!tl$ or thro/-h &eli)er$ to a' a-e't or a !o-+a$ee.

(%) I' a' a!tio' /'&er s/%se!tio' (a)2 the #eas/re o( lia%ilit$ is +res/#e& to %e the a#o/'t +a$a%le o' the i'str/#e't2 %/t re!o)er$ #a$ 'ot e,!ee& the a#o/'t o( the +lai'ti((Bs i'terest i' the i'str/#e't. (!) A re+rese'tati)e2 other tha' a &e+ositar$ %a'52 1ho has i' -oo& (aith &ealt 1ith a' i'str/#e't or its +ro!ee&s o' %ehal( o( o'e 1ho 1as 'ot the +erso' e'title& to e'(or!e the i'str/#e't is 'ot lia%le i' !o')ersio' to that +erso' %e$o'& the a#o/'t o( a'$ +ro!ee&s that it has 'ot +ai& o/t. PART 9. =ISDONOR .-901. PRESENTEENT. (a) ?Prese't#e't? #ea's a &e#a'& #a&e %$ or o' %ehal( o( a +erso' e'title& to e'(or!e a' i'str/#e't (i) to +a$ the i'str/#e't #a&e to the &ra1ee or a +art$ o%li-e& to +a$ the i'str/#e't or2 i' the !ase o( a 'ote or a!!e+te& &ra(t +a$a%le at a %a'52 to the %a'52 or (ii) to a!!e+t a &ra(t #a&e to the &ra1ee. (%) The (ollo1i'- r/les are s/%6e!t to Arti!le 82 a-ree#e't o( the +arties2 a'& !leari'-ho/se r/les a'& the li5e0 (1) Prese't#e't #a$ %e #a&e at the +la!e o( +a$#e't o( the i'str/#e't a'& #/st %e #a&e at the +la!e o( +a$#e't i( the i'str/#e't is +a$a%le at a %a'5 i' the U'ite& States4 #a$ %e #a&e %$ a'$ !o##er!iall$ reaso'a%le #ea's2 i'!l/&i'- a' oral2 1ritte'2 or ele!tro'i! !o##/'i!atio'4 is e((e!ti)e 1he' the &e#a'& (or +a$#e't or a!!e+ta'!e is re!ei)e& %$ the +erso' to 1ho# +rese't#e't is #a&e4 a'& is e((e!ti)e i( #a&e to a'$ o'e o( t1o or #ore #a5ers2 a!!e+tors2 &ra1ees2 or other +a$ors. (*) U+o' &e#a'& o( the +erso' to 1ho# +rese't#e't is #a&e2 the +erso' #a5i'+rese't#e't #/st (i) e,hi%it the i'str/#e't2 (ii) -i)e reaso'a%le i&e'ti(i!atio' a'&2 i( +rese't#e't is #a&e o' %ehal( o( a'other +erso'2 reaso'a%le e)i&e'!e o( a/thorit$ to &o so2 a'& (iii) si-' a re!ei+t o' the i'str/#e't (or a'$ +a$#e't #a&e or s/rre'&er the i'str/#e't i( (/ll +a$#e't is #a&e. (.) Citho/t &isho'ori'- the i'str/#e't2 the +art$ to 1ho# +rese't#e't is #a&e #a$ (i) ret/r' the i'str/#e't (or la!5 o( a 'e!essar$ i'&orse#e't2 or (ii) re(/se +a$#e't or a!!e+ta'!e (or (ail/re o( the +rese't#e't to !o#+l$ 1ith the ter#s o( the i'str/#e't2 a' a-ree#e't o( the +arties2 or other a++li!a%le la1 or r/le. (8) The +art$ to 1ho# +rese't#e't is #a&e #a$ treat +rese't#e't as o!!/rri'- o' the 'e,t %/si'ess &a$ a(ter the &a$ o( +rese't#e't i( the +art$ to 1ho# +rese't#e't is #a&e has esta%lishe& a !/t-o(( ho/r 'ot earlier tha' * +.#. (or the re!ei+t a'& +ro!essi'- o( i'str/#e'ts +rese'te& (or +a$#e't or a!!e+ta'!e a'& +rese't#e't is #a&e a(ter the !/t-o(( ho/r.

 .-90*. =ISDONOR. (a) =isho'or o( a 'ote is -o)er'e& %$ the (ollo1i'- r/les0 (1) I( the 'ote is +a$a%le o' &e#a'&2 the 'ote is &isho'ore& i( +rese't#e't is &/l$ #a&e to the #a5er a'& the 'ote is 'ot +ai& o' the &a$ o( +rese't#e't. (*) I( the 'ote is 'ot +a$a%le o' &e#a'& a'& is +a$a%le at or thro/-h a %a'5 or the ter#s o( the 'ote re7/ire +rese't#e't2 the 'ote is &isho'ore& i( +rese't#e't is &/l$ #a&e a'& the 'ote is 'ot +ai& o' the &a$ it %e!o#es +a$a%le or the &a$ o( +rese't#e't2 1hi!he)er is later. (.) I( the 'ote is 'ot +a$a%le o' &e#a'& a'& +ara-ra+h (*) &oes 'ot a++l$2 the 'ote is &isho'ore& i( it is 'ot +ai& o' the &a$ it %e!o#es +a$a%le. (%) =isho'or o( a' /'a!!e+te& &ra(t other tha' a &o!/#e'tar$ &ra(t is -o)er'e& %$ the (ollo1i'- r/les0 (1) I( a !he!5 is &/l$ +rese'te& (or +a$#e't to the +a$or %a'5 other1ise tha' (or i##e&iate +a$#e't o)er the !o/'ter2 the !he!5 is &isho'ore& i( the +a$or %a'5 #a5es ti#el$ ret/r' o( the !he!5 or se'&s ti#el$ 'oti!e o( &isho'or or 'o'+a$#e't /'&er Se!tio' 8-.01 or 8-.0*2 or %e!o#es a!!o/'ta%le (or the a#o/'t o( the !he!5 /'&er Se!tio' 8-.0*. (*) I( a &ra(t is +a$a%le o' &e#a'& a'& +ara-ra+h (1) &oes 'ot a++l$2 the &ra(t is &isho'ore& i( +rese't#e't (or +a$#e't is &/l$ #a&e to the &ra1ee a'& the &ra(t is 'ot +ai& o' the &a$ o( +rese't#e't. (.) I( a &ra(t is +a$a%le o' a &ate state& i' the &ra(t2 the &ra(t is &isho'ore& i( (i) +rese't#e't (or +a$#e't is &/l$ #a&e to the &ra1ee a'& +a$#e't is 'ot #a&e o' the &a$ the &ra(t %e!o#es +a$a%le or the &a$ o( +rese't#e't2 1hi!he)er is later2 or (ii) +rese't#e't (or a!!e+ta'!e is &/l$ #a&e %e(ore the &a$ the &ra(t %e!o#es +a$a%le a'& the &ra(t is 'ot a!!e+te& o' the &a$ o( +rese't#e't. (8) I( a &ra(t is +a$a%le o' ela+se o( a +erio& o( ti#e a(ter si-ht or a!!e+ta'!e2 the &ra(t is &isho'ore& i( +rese't#e't (or a!!e+ta'!e is &/l$ #a&e a'& the &ra(t is 'ot a!!e+te& o' the &a$ o( +rese't#e't. (!) =isho'or o( a' /'a!!e+te& &o!/#e'tar$ &ra(t o!!/rs a!!or&i'- to the r/les state& i' s/%se!tio' (%)(*)2 (.)2 a'& (8)2 e,!e+t that +a$#e't or a!!e+ta'!e #a$ %e &ela$e& 1itho/t &isho'or /'til 'o later tha' the !lose o( the thir& %/si'ess &a$ o( the &ra1ee (ollo1i'- the &a$ o' 1hi!h +a$#e't or a!!e+ta'!e is re7/ire& %$ those +ara-ra+hs.

(&) =isho'or o( a' a!!e+te& &ra(t is -o)er'e& %$ the (ollo1i'- r/les0 (1) I( the &ra(t is +a$a%le o' &e#a'&2 the &ra(t is &isho'ore& i( +rese't#e't (or +a$#e't is &/l$ #a&e to the a!!e+tor a'& the &ra(t is 'ot +ai& o' the &a$ o( +rese't#e't. (*) I( the &ra(t is 'ot +a$a%le o' &e#a'&2 the &ra(t is &isho'ore& i( +rese't#e't (or +a$#e't is &/l$ #a&e to the a!!e+tor a'& +a$#e't is 'ot #a&e o' the &a$ it %e!o#es +a$a%le or the &a$ o( +rese't#e't2 1hi!he)er is later. (e) I' a'$ !ase i' 1hi!h +rese't#e't is other1ise re7/ire& (or &isho'or /'&er this se!tio' a'& +rese't#e't is e,!/se& /'&er Se!tio' .-9082 &isho'or o!!/rs 1itho/t +rese't#e't i( the i'str/#e't is 'ot &/l$ a!!e+te& or +ai&. (() I( a &ra(t is &isho'ore& %e!a/se ti#el$ a!!e+ta'!e o( the &ra(t 1as 'ot #a&e a'& the +erso' e'title& to &e#a'& a!!e+ta'!e !o'se'ts to a late a!!e+ta'!e2 (ro# the ti#e o( a!!e+ta'!e the &ra(t is treate& as 'e)er ha)i'- %ee' &isho'ore&. .-90.. NOTICE O> =ISDONOR. (a) The o%li-atio' o( a' i'&orser state& i' Se!tio' .-819(a) a'& the o%li-atio' o( a &ra1er state& i' Se!tio' .-818(&) #a$ 'ot %e e'(or!e& /'less (i) the i'&orser or &ra1er is -i)e' 'oti!e o( &isho'or o( the i'str/#e't !o#+l$i'- 1ith this se!tio' or (ii) 'oti!e o( &isho'or is e,!/se& /'&er Se!tio' .-908(%). (%) Noti!e o( &isho'or #a$ %e -i)e' %$ a'$ +erso'4 #a$ %e -i)e' %$ a'$ !o##er!iall$ reaso'a%le #ea's2 i'!l/&i'- a' oral2 1ritte'2 or ele!tro'i! !o##/'i!atio'4 a'& is s/((i!ie't i( it reaso'a%l$ i&e'ti(ies the i'str/#e't a'& i'&i!ates that the i'str/#e't has %ee' &isho'ore& or has 'ot %ee' +ai& or a!!e+te&. Ret/r' o( a' i'str/#e't -i)e' to a %a'5 (or !olle!tio' is s/((i!ie't 'oti!e o( &isho'or. (!) S/%6e!t to Se!tio' .-908(!)2 1ith res+e!t to a' i'str/#e't ta5e' (or !olle!tio' %$ a !olle!ti'- %a'52 'oti!e o( &isho'or #/st %e -i)e' (i) %$ the %a'5 %e(ore #i&'i-ht o( the 'e,t %a'5i'- &a$ (ollo1i'- the %a'5i'- &a$ o' 1hi!h the %a'5 re!ei)es 'oti!e o( &isho'or o( the i'str/#e't2 or (ii) %$ a'$ other +erso' 1ithi' .0 &a$s (ollo1i'- the &a$ o' 1hi!h the +erso' re!ei)es 'oti!e o( &isho'or. Cith res+e!t to a'$ other i'str/#e't2 'oti!e o( &isho'or #/st %e -i)e' 1ithi' .0 &a$s (ollo1i'- the &a$ o' 1hi!h &isho'or o!!/rs. .-908. EMCUSE= PRESENTEENT AN= NOTICE O> =ISDONOR. (a) Prese't#e't (or +a$#e't or a!!e+ta'!e o( a' i'str/#e't is e,!/se& i( (i) the +erso' e'title& to +rese't the i'str/#e't !a''ot 1ith reaso'a%le &ili-e'!e #a5e +rese't#e't2 (ii) the #a5er or a!!e+tor has re+/&iate& a' o%li-atio' to +a$ the

i'str/#e't or is &ea& or i' i'sol)e'!$ +ro!ee&i'-s2 (iii) %$ the ter#s o( the i'str/#e't +rese't#e't is 'ot 'e!essar$ to e'(or!e the o%li-atio' o( i'&orsers or the &ra1er2 (i)) the &ra1er or i'&orser 1hose o%li-atio' is %ei'- e'(or!e& has 1ai)e& +rese't#e't or other1ise has 'o reaso' to e,+e!t or ri-ht to re7/ire that the i'str/#e't %e +ai& or a!!e+te&2 or ()) the &ra1er i'str/!te& the &ra1ee 'ot to +a$ or a!!e+t the &ra(t or the &ra1ee 1as 'ot o%li-ate& to the &ra1er to +a$ the &ra(t. (%) Noti!e o( &isho'or is e,!/se& i( (i) %$ the ter#s o( the i'str/#e't 'oti!e o( &isho'or is 'ot 'e!essar$ to e'(or!e the o%li-atio' o( a +art$ to +a$ the i'str/#e't2 or (ii) the +art$ 1hose o%li-atio' is %ei'- e'(or!e& 1ai)e& 'oti!e o( &isho'or. A 1ai)er o( +rese't#e't is also a 1ai)er o( 'oti!e o( &isho'or. (!) =ela$ i' -i)i'- 'oti!e o( &isho'or is e,!/se& i( the &ela$ 1as !a/se& %$ !ir!/#sta'!es %e$o'& the !o'trol o( the +erso' -i)i'- the 'oti!e a'& the +erso' -i)i'the 'oti!e e,er!ise& reaso'a%le &ili-e'!e a(ter the !a/se o( the &ela$ !ease& to o+erate. .-909. EVI=ENCE O> =ISDONOR. (a) The (ollo1i'- are a&#issi%le as e)i&e'!e a'& !reate a +res/#+tio' o( &isho'or a'& o( a'$ 'oti!e o( &isho'or state&0 (1) a &o!/#e't re-/lar i' (or# as +ro)i&e& i' s/%se!tio' (%) 1hi!h +/r+orts to %e a +rotest4 (*) a +/r+orte& sta#+ or 1riti'- o( the &ra1ee2 +a$or %a'52 or +rese'ti'- %a'5 o' or a!!o#+a'$i'- the i'str/#e't stati'- that a!!e+ta'!e or +a$#e't has %ee' re(/se& /'less reaso's (or the re(/sal are state& a'& the reaso's are 'ot !o'siste't 1ith &isho'or4 (.) a %oo5 or re!or& o( the &ra1ee2 +a$or %a'52 or !olle!ti'- %a'52 5e+t i' the /s/al !o/rse o( %/si'ess 1hi!h sho1s &isho'or2 e)e' i( there is 'o e)i&e'!e o( 1ho #a&e the e'tr$. (%) A +rotest is a !erti(i!ate o( &isho'or #a&e %$ a U'ite& States !o's/l or )i!e !o's/l2 or a 'otar$ +/%li! or other +erso' a/thori3e& to a&#i'ister oaths %$ the la1 o( the +la!e 1here &isho'or o!!/rs. It #a$ %e #a&e /+o' i'(or#atio' satis(a!tor$ to that +erso'. The +rotest #/st i&e'ti($ the i'str/#e't a'& !erti($ either that +rese't#e't has %ee' #a&e or2 i( 'ot #a&e2 the reaso' 1h$ it 1as 'ot #a&e2 a'& that the i'str/#e't has %ee' &isho'ore& %$ 'o'a!!e+ta'!e or 'o'+a$#e't. The +rotest #a$ also !erti($ that 'oti!e o( &isho'or has %ee' -i)e' to so#e or all +arties. PART :. =ISCDARGE AN= PAGEENT .-:01. =ISCDARGE AN= E>>ECT O> =ISCDARGE.

(a) The o%li-atio' o( a +art$ to +a$ the i'str/#e't is &is!har-e& as state& i' this Arti!le or %$ a' a!t or a-ree#e't 1ith the +art$ 1hi!h 1o/l& &is!har-e a' o%li-atio' to +a$ #o'e$ /'&er a si#+le !o'tra!t. (%) =is!har-e o( the o%li-atio' o( a +art$ is 'ot e((e!ti)e a-ai'st a +erso' a!7/iri'ri-hts o( a hol&er i' &/e !o/rse o( the i'str/#e't 1itho/t 'oti!e o( the &is!har-e. .-:0*. PAGEENT. (a) S/%6e!t to s/%se!tio' (%)2 a' i'str/#e't is +ai& to the e,te't +a$#e't is #a&e (i) %$ or o' %ehal( o( a +art$ o%li-e& to +a$ the i'str/#e't2 a'& (ii) to a +erso' e'title& to e'(or!e the i'str/#e't. To the e,te't o( the +a$#e't2 the o%li-atio' o( the +art$ o%li-e& to +a$ the i'str/#e't is &is!har-e& e)e' tho/-h +a$#e't is #a&e 1ith 5'o1le&-e o( a !lai# to the i'str/#e't /'&er Se!tio' .-.0: %$ a'other +erso'. (%) S/%6e!t to s/%se!tio' (e) a 'ote is +ai& to the e,te't +a$#e't is #a&e %$ or o' %ehal( o( a +art$ o%li-e& to +a$ the 'ote to a +erso' that (or#erl$ 1as e'title& to e'(or!e the 'ote o'l$ i( at the ti#e o( the +a$#e't the +art$ o%li-e& to +a$ has 'ot re!ei)e& a&e7/ate 'oti(i!atio' that the 'ote has %ee' tra's(erre& a'& that +a$#e't is to %e #a&e to the tra's(eree. A 'oti(i!atio' is a&e7/ate o'l$ i( it is si-'e& %$ the tra's(eror or the tra's(eree4 reaso'a%l$ i&e'ti(ies the tra's(erre& 'ote4 a'& +ro)i&es a' a&&ress at 1hi!h +a$#e'ts s/%se7/e'tl$ !a' %e #a&e. U+o' re7/est2 a tra's(eree shall seaso'a%l$ (/r'ish reaso'a%le +roo( that the 'ote has %ee' tra's(erre&. U'less the tra's(eree !o#+lies 1ith the re7/est2 a +a$#e't to the +erso' that (or#erl$ 1as e'title& to e'(or!e the 'ote is e((e!ti)e (or +/r+oses o( s/%se!tio' (!) e)e' i( the +art$ o%li-e& to +a$ the 'ote has re!ei)e& a 'oti(i!atio' /'&er this +ara-ra+h. (!) S/%6e!t to s/%se!tio' (e)2 to the e,te't o( a +a$#e't /'&er s/%se!tio's (a) a'& (%)2 the o%li-atio' o( the +art$ o%li-e& to +a$ the i'str/#e't is &is!har-e& e)e' tho/-h +a$#e't is #a&e 1ith 5'o1le&-e o( a !lai# to the i'str/#e't /'&er Se!tio' .-.0: %$ a'other +erso'. (&) S/%6e!t to s/%se!tio' (e)2 a tra's(eree2 or a'$ +art$ that has a!7/ire& ri-hts i' the i'str/#e't &ire!tl$ or i'&ire!tl$ (ro# a tra's(eree2 i'!l/&i'- a'$ s/!h +art$ that has ri-hts as a hol&er i' &/e !o/rse2 is &ee#e& to ha)e 'oti!e o( a'$ +a$#e't that is #a&e /'&er s/%se!tio' (%) a(ter the &ate that the 'ote is tra's(erre& to the tra's(eree %/t %e(ore the +art$ o%li-e& to +a$ the 'ote re!ei)es a&e7/ate 'oti(i!atio' o( the tra's(er. (e) The o%li-atio' o( a +art$ to +a$ the i'str/#e't is 'ot &is!har-e& /'&er s/%se!tio's (a) thro/-h (&) i(0 (1) a !lai# to the i'str/#e't /'&er Se!tio' .-.0: is e'(or!ea%le a-ai'st the +art$ re!ei)i'- +a$#e't a'& (i) +a$#e't is #a&e 1ith 5'o1le&-e %$ the +a$or that +a$#e't

is +rohi%ite& %$ i'6/'!tio' or si#ilar +ro!ess o( a !o/rt o( !o#+ete't 6/ris&i!tio'2 or (ii) i' the !ase o( a' i'str/#e't other tha' a !ashierBs !he!52 tellerBs !he!52 or !erti(ie& !he!52 the +art$ #a5i'- +a$#e't a!!e+te&2 (ro# the +erso' ha)i'- a !lai# to the i'str/#e't2 i'&e#'it$ a-ai'st loss res/lti'- (ro# re(/sal to +a$ the +erso' e'title& to e'(or!e the i'str/#e't4 or (*) the +erso' #a5i'- +a$#e't 5'o1s that the i'str/#e't is a stole' i'str/#e't a'& +a$s a +erso' it 5'o1s is i' 1ro'-(/l +ossessio' o( the i'str/#e't. (() As /se& i' this se!tio'2 ?si-'e&2? 1ith res+e!t to a re!or& that is 'ot a 1riti'-2 i'!l/&es the atta!h#e't to or lo-i!al asso!iatio' 1ith the re!or& o( a' ele!tro'i! s$#%ol2 so/'&2 or +ro!ess to or 1ith the re!or& 1ith the +rese't i'te't to a&o+t or a!!e+t the re!or&. .-:0.. TEN=ER O> PAGEENT. (a) I( te'&er o( +a$#e't o( a' o%li-atio' to +a$ a' i'str/#e't is #a&e to a +erso' e'title& to e'(or!e the i'str/#e't2 the e((e!t o( te'&er is -o)er'e& %$ +ri'!i+les o( la1 a++li!a%le to te'&er o( +a$#e't /'&er a si#+le !o'tra!t. (%) I( te'&er o( +a$#e't o( a' o%li-atio' to +a$ a' i'str/#e't is #a&e to a +erso' e'title& to e'(or!e the i'str/#e't a'& the te'&er is re(/se&2 there is &is!har-e2 to the e,te't o( the a#o/'t o( the te'&er2 o( the o%li-atio' o( a' i'&orser or a!!o##o&atio' +art$ ha)i'- a ri-ht o( re!o/rse 1ith res+e!t to the o%li-atio' to 1hi!h the te'&er relates. (!) I( te'&er o( +a$#e't o( a' a#o/'t &/e o' a' i'str/#e't is #a&e to a +erso' e'title& to e'(or!e the i'str/#e't2 the o%li-atio' o( the o%li-or to +a$ i'terest a(ter the &/e &ate o' the a#o/'t te'&ere& is &is!har-e&. I( +rese't#e't is re7/ire& 1ith res+e!t to a' i'str/#e't a'& the o%li-or is a%le a'& rea&$ to +a$ o' the &/e &ate at e)er$ +la!e o( +a$#e't state& i' the i'str/#e't2 the o%li-or is &ee#e& to ha)e #a&e te'&er o( +a$#e't o' the &/e &ate to the +erso' e'title& to e'(or!e the i'str/#e't. .-:08. =ISCDARGE @G CANCELLATION OR RENUNCIATION. (a) A +erso' e'title& to e'(or!e a' i'str/#e't2 1ith or 1itho/t !o'si&eratio'2 #a$ &is!har-e the o%li-atio' o( a +art$ to +a$ the i'str/#e't (i) %$ a' i'te'tio'al )ol/'tar$ a!t2 s/!h as s/rre'&er o( the i'str/#e't to the +art$2 &estr/!tio'2 #/tilatio'2 or !a'!ellatio' o( the i'str/#e't2 !a'!ellatio' or stri5i'- o/t o( the +art$Bs si-'at/re2 or the a&&itio' o( 1or&s to the i'str/#e't i'&i!ati'- &is!har-e2 or (ii) %$ a-reei'- 'ot to s/e or other1ise re'o/'!i'- ri-hts a-ai'st the +art$ %$ a si-'e& re!or&. (%) Ca'!ellatio' or stri5i'- o/t o( a' i'&orse#e't +/rs/a't to s/%se!tio' (a) &oes 'ot a((e!t the stat/s a'& ri-hts o( a +art$ &eri)e& (ro# the i'&orse#e't.

(!) As /se& i' this se!tio'2 ?si-'e&2? 1ith res+e!t to a re!or& that is 'ot a 1riti'-2 i'!l/&es the atta!h#e't to or lo-i!al asso!iatio' 1ith the re!or& o( a' ele!tro'i! s$#%ol2 so/'&2 or +ro!ess to or 1ith the re!or& 1ith the +rese't i'te't to a&o+t or a!!e+t the re!or&. .-:09. =ISCDARGE O> SECON=ARG O@LIGORS. (a) I( a +erso' e'title& to e'(or!e a' i'str/#e't releases the o%li-atio' o( a +ri'!i+al o%li-or i' 1hole or i' +art2 a'& a'other +art$ to the i'str/#e't is a se!o'&ar$ o%li-or 1ith res+e!t to the o%li-atio' o( that +ri'!i+al o%li-or2 the (ollo1i'- r/les a++l$0 (1) A'$ o%li-atio's o( the +ri'!i+al o%li-or to the se!o'&ar$ o%li-or 1ith res+e!t to a'$ +re)io/s +a$#e't %$ the se!o'&ar$ o%li-or are 'ot a((e!te&. U'less the ter#s o( the release +reser)e the se!o'&ar$ o%li-orBs re!o/rse2 the +ri'!i+al o%li-or is &is!har-e&2 to the e,te't o( the release2 (ro# a'$ other &/ties to the se!o'&ar$ o%li-or /'&er this arti!le. (*) U'less the ter#s o( the release +ro)i&e that the +erso' e'title& to e'(or!e the i'str/#e't retai's the ri-ht to e'(or!e the i'str/#e't a-ai'st the se!o'&ar$ o%li-or2 the se!o'&ar$ o%li-or is &is!har-e& to the sa#e e,te't as the +ri'!i+al o%li-or (ro# a'$ /'+er(or#e& +ortio' o( its o%li-atio' o' the i'str/#e't. I( the i'str/#e't is a !he!5 a'& the o%li-atio' o( the se!o'&ar$ o%li-or is %ase& o' a' i'&orse#e't o( the !he!52 the se!o'&ar$ o%li-or is &is!har-e& 1itho/t re-ar& to the la'-/a-e or !ir!/#sta'!es o( the &is!har-e or other release. (.) I( the se!o'&ar$ o%li-or is 'ot &is!har-e& /'&er +ara-ra+h (*)2 the se!o'&ar$ o%li-or is &is!har-e& to the e,te't o( the )al/e o( the !o'si&eratio' (or the release2 a'& to the e,te't that the release 1o/l& other1ise !a/se the se!o'&ar$ o%li-or a loss. (%) I( a +erso' e'title& to e'(or!e a' i'str/#e't -ra'ts a +ri'!i+al o%li-or a' e,te'sio' o( the ti#e at 1hi!h o'e or #ore +a$#e'ts are &/e o' the i'str/#e't a'& a'other +art$ to the i'str/#e't is a se!o'&ar$ o%li-or 1ith res+e!t to the o%li-atio' o( that +ri'!i+al o%li-or2 the (ollo1i'- r/les a++l$0 (1) A'$ o%li-atio's o( the +ri'!i+al o%li-or to the se!o'&ar$ o%li-or 1ith res+e!t to a'$ +re)io/s +a$#e't %$ the se!o'&ar$ o%li-or are 'ot a((e!te&. U'less the ter#s o( the e,te'sio' +reser)e the se!o'&ar$ o%li-orBs re!o/rse2 the e,te'sio' !orres+o'&i'-l$ e,te'&s the ti#e (or +er(or#a'!e o( a'$ other &/ties o1e& to the se!o'&ar$ o%li-or %$ the +ri'!i+al o%li-or /'&er this arti!le. (*) The se!o'&ar$ o%li-or is &is!har-e& to the e,te't that the e,te'sio' 1o/l& other1ise !a/se the se!o'&ar$ o%li-or a loss.

(.) To the e,te't that the se!o'&ar$ o%li-or is 'ot &is!har-e& /'&er +ara-ra+h (*)2 the se!o'&ar$ o%li-or #a$ +er(or# its o%li-atio's to a +erso' e'title& to e'(or!e the i'str/#e't as i( the ti#e (or +a$#e't ha& 'ot %ee' e,te'&e& or2 /'less the ter#s o( the e,te'sio' +ro)i&e that the +erso' e'title& to e'(or!e the i'str/#e't retai's the ri-ht to e'(or!e the i'str/#e't a-ai'st the se!o'&ar$ o%li-or as i( the ti#e (or +a$#e't ha& 'ot %ee' e,te'&e&2 treat the ti#e (or +er(or#a'!e o( its o%li-atio's as ha)i'- %ee' e,te'&e& !orres+o'&i'-l$. (!) I( a +erso' e'title& to e'(or!e a' i'str/#e't a-rees2 1ith or 1itho/t !o'si&eratio'2 to a #o&i(i!atio' o( the o%li-atio' o( a +ri'!i+al o%li-or other tha' a !o#+lete or +artial release or a' e,te'sio' o( the &/e &ate a'& a'other +art$ to the i'str/#e't is a se!o'&ar$ o%li-or 1ith res+e!t to the o%li-atio' o( that +ri'!i+al o%li-or2 the (ollo1i'r/les a++l$0 (1) A'$ o%li-atio's o( the +ri'!i+al o%li-or to the se!o'&ar$ o%li-or 1ith res+e!t to a'$ +re)io/s +a$#e't %$ the se!o'&ar$ o%li-or are 'ot a((e!te&. The #o&i(i!atio' !orres+o'&i'-l$ #o&i(ies a'$ other &/ties o1e& to the se!o'&ar$ o%li-or %$ the +ri'!i+al o%li-or /'&er this arti!le. (*) The se!o'&ar$ o%li-or is &is!har-e& (ro# a'$ /'+er(or#e& +ortio' o( its o%li-atio' to the e,te't that the #o&i(i!atio' 1o/l& other1ise !a/se the se!o'&ar$ o%li-or a loss. (.) To the e,te't that the se!o'&ar$ o%li-or is 'ot &is!har-e& /'&er +ara-ra+h (*)2 the se!o'&ar$ o%li-or #a$ satis($ its o%li-atio' o' the i'str/#e't as i( the #o&i(i!atio' ha& 'ot o!!/rre&2 or treat its o%li-atio' o' the i'str/#e't as ha)i'- %ee' #o&i(ie& !orres+o'&i'-l$. (&) I( the o%li-atio' o( a +ri'!i+al o%li-or is se!/re& %$ a' i'terest i' !ollateral2 a'other +art$ to the i'str/#e't is a se!o'&ar$ o%li-or 1ith res+e!t to that o%li-atio'2 a'& a +erso' e'title& to e'(or!e the i'str/#e't i#+airs the )al/e o( the i'terest i' !ollateral2 the o%li-atio' o( the se!o'&ar$ o%li-or is &is!har-e& to the e,te't o( the i#+air#e't. The )al/e o( a' i'terest i' !ollateral is i#+aire& to the e,te't the )al/e o( the i'terest is re&/!e& to a' a#o/'t less tha' the a#o/'t o( the re!o/rse o( the se!o'&ar$ o%li-or2 or the re&/!tio' i' )al/e o( the i'terest !a/ses a' i'!rease i' the a#o/'t %$ 1hi!h the a#o/'t o( the re!o/rse e,!ee&s the )al/e o( the i'terest. >or +/r+oses o( this s/%se!tio'2 i#+airi'- the )al/e o( a' i'terest i' !ollateral i'!l/&es (ail/re to o%tai' or #ai'tai' +er(e!tio' or re!or&atio' o( the i'terest i' !ollateral2 release o( !ollateral 1itho/t s/%stit/tio' o( !ollateral o( e7/al )al/e or e7/i)ale't re&/!tio' o( the /'&erl$i'o%li-atio'2 (ail/re to +er(or# a &/t$ to +reser)e the )al/e o( !ollateral o1e&2 /'&er Arti!le A or other la12 to a &e%tor or other +erso' se!o'&aril$ lia%le2 a'& (ail/re to !o#+l$ 1ith a++li!a%le la1 i' &is+osi'- o( or other1ise e'(or!i'- the i'terest i' !ollateral.

(e) A se!o'&ar$ o%li-or is 'ot &is!har-e& /'&er s/%se!tio' (a)(.)2 (%)2 (!)2 or (&) /'less the +erso' e'title& to e'(or!e the i'str/#e't 5'o1s that the +erso' is a se!o'&ar$ o%li-or or has 'oti!e /'&er Se!tio' .-81A(!) that the i'str/#e't 1as si-'e& (or a!!o##o&atio'. (() A se!o'&ar$ o%li-or is 'ot &is!har-e& /'&er this se!tio' i( the se!o'&ar$ o%li-or !o'se'ts to the e)e't or !o'&/!t that is the %asis o( the &is!har-e2 or the i'str/#e't or a se+arate a-ree#e't o( the +art$ +ro)i&es (or 1ai)er o( &is!har-e /'&er this se!tio' s+e!i(i!all$ or %$ -e'eral la'-/a-e i'&i!ati'- that +arties 1ai)e &e(e'ses %ase& o' s/ret$shi+ or i#+air#e't o( !ollateral. U'less the !ir!/#sta'!es i'&i!ate other1ise2 !o'se't %$ the +ri'!i+al o%li-or to a' a!t that 1o/l& lea& to a &is!har-e /'&er this se!tio' !o'stit/tes !o'se't to that a!t %$ the se!o'&ar$ o%li-or i( the se!o'&ar$ o%li-or !o'trols the +ri'!i+al o%li-or or &eals 1ith the +erso' e'title& to e'(or!e the i'str/#e't o' %ehal( o( the +ri'!i+al o%li-or. (-) A release or e,te'sio' +reser)es a se!o'&ar$ o%li-orBs re!o/rse i( the ter#s o( the release or e,te'sio' +ro)i&e that the +erso' e'title& to e'(or!e the i'str/#e't retai's the ri-ht to e'(or!e the i'str/#e't a-ai'st the se!o'&ar$ o%li-or4 a'& the re!o/rse o( the se!o'&ar$ o%li-or !o'ti'/es as tho/-h the release or e,te'sio' ha& 'ot %ee' -ra'te&. (h) E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (i)2 a se!o'&ar$ o%li-or asserti'&is!har-e /'&er this se!tio' has the %/r&e' o( +ers/asio' %oth 1ith res+e!t to the o!!/rre'!e o( the a!ts alle-e& to har# the se!o'&ar$ o%li-or a'& loss or +re6/&i!e !a/se& %$ those a!ts. (i) I( the se!o'&ar$ o%li-or &e#o'strates +re6/&i!e !a/se& %$ a' i#+air#e't o( its re!o/rse2 a'& the !ir!/#sta'!es o( the !ase i'&i!ate that the a#o/'t o( loss is 'ot reaso'a%l$ s/s!e+ti%le o( !al!/latio' or re7/ires +roo( o( (a!ts that are 'ot as!ertai'a%le2 it is +res/#e& that the a!t i#+airi'- re!o/rse !a/se& a loss or i#+air#e't e7/al to the lia%ilit$ o( the se!o'&ar$ o%li-or o' the i'str/#e't. I' that e)e't2 the %/r&e' o( +ers/asio' as to a'$ lesser a#o/'t o( the loss is o' the +erso' e'title& to e'(or!e the i'str/#e't. U.C.C. - ARTICLE 8 - @ANF =EPOSITS AN= COLLECTIONS PART 1. GENERAL PROVISIONS AN= =E>INITIONS 8-101. SDORT TITLE. This Arti!le #a$ %e !ite& as U'i(or# Co##er!ial Co&e -- @a'5 =e+osits a'& Colle!tio's. 8-10*. APPLICA@ILITG.

(a) To the e,te't that ite#s 1ithi' this Arti!le are also 1ithi' Arti!les . a'& <2 the$ are s/%6e!t to those Arti!les. < -o)er's this Arti!le. (%) The lia%ilit$ o( a %a'5 (or a!tio' or 'o'-a!tio' 1ith res+e!t to a' ite# ha'&le& %$ it (or +/r+oses o( +rese't#e't2 +a$#e't2 or !olle!tio' is -o)er'e& %$ the la1 o( the +la!e 1here the %a'5 is lo!ate&. I' the !ase o( a!tio' or 'o'-a!tio' %$ or at a %ra'!h or se+arate o((i!e o( a %a'52 its lia%ilit$ is -o)er'e& %$ the la1 o( the +la!e 1here the %ra'!h or se+arate o((i!e is lo!ate&. 8-10.. VARIATION @G AGREEEENT4 EEASURE O> =AEAGES4 ACTION CONSTITUTING OR=INARG CARE. (a) The e((e!t o( the +ro)isio's o( this Arti!le #a$ %e )arie& %$ a-ree#e't 2 %/t the +arties to the a-ree#e't !a''ot &is!lai# a %a'5Bs res+o'si%ilit$ (or its la!5 o( -oo& (aith or (ail/re to e,er!ise or&i'ar$ !are or li#it the #eas/re o( &a#a-es (or the la!5 or (ail/re. Do1e)er2 the +arties #a$ &eter#i'e %$ a-ree#e't the sta'&ar&s %$ 1hi!h the %a'5Bs res+o'si%ilit$ is to %e #eas/re& i( those sta'&ar&s are 'ot #a'i(estl$ /'reaso'a%le. (%) >e&eral Reser)e re-/latio's a'& o+erati'- !ir!/lars2 !leari'--ho/se r/les2 a'& the li5e ha)e the e((e!t o( a-ree#e'ts /'&er s/%se!tio' (a)2 1hether or 'ot s+e!i(i!all$ asse'te& to %$ all +arties i'tereste& i' ite#s ha'&le&. (!) A!tio' or 'o'-a!tio' a++ro)e& %$ this Arti!le or +/rs/a't to >e&eral Reser)e re-/latio's or o+erati'- !ir!/lars is the e,er!ise o( or&i'ar$ !are a'&2 i' the a%se'!e o( s+e!ial i'str/!tio's2 a!tio' or 'o'-a!tio' !o'siste't 1ith !leari'--ho/se r/les a'& the li5e or 1ith a -e'eral %a'5i'- /sa-e 'ot &isa++ro)e& %$ this Arti!le2 is +ri#a (a!ie the e,er!ise o( or&i'ar$ !are. (&) The s+e!i(i!atio' or a++ro)al o( !ertai' +ro!e&/res %$ this Arti!le is 'ot &isa++ro)al o( other +ro!e&/res that #a$ %e reaso'a%le /'&er the !ir!/#sta'!es. (e) The #eas/re o( &a#a-es (or (ail/re to e,er!ise or&i'ar$ !are i' ha'&li'- a' ite# is the a#o/'t o( the ite# re&/!e& %$ a' a#o/'t that !o/l& 'ot ha)e %ee' reali3e& %$ the e,er!ise o( or&i'ar$ !are. I( there is also %a& (aith it i'!l/&es a'$ other &a#a-es the +art$ s/((ere& as a +ro,i#ate !o'se7/e'!e. 8-108. =E>INITIONS AN= IN=EM O> =E>INITIONS. (a) I' this Arti!le2 /'less the !o'te,t other1ise re7/ires0 I( there is !o'(li!t2 this Arti!le -o)er's Arti!le .2 %/t Arti!le

(1) ?A!!o/'t? #ea's a'$ &e+osit or !re&it a!!o/'t 1ith a %a'5 2 i'!l/&i'- a &e#a'&2 ti#e2 sa)i'-s2 +ass%oo52 share &ra(t2 or li5e a!!o/'t2 other tha' a' a!!o/'t e)i&e'!e& %$ a !erti(i!ate o( &e+osit4 (*) ?A(ter'oo'? #ea's the +erio& o( a &a$ %et1ee' 'oo' a'& #i&'i-ht4 (.) ?@a'5i'- &a$? #ea's the +art o( a &a$ o' 1hi!h a %a'5 is o+e' to the +/%li! (or !arr$i'- o' s/%sta'tiall$ all o( its %a'5i'- (/'!tio's4 (8) ?Cleari'- ho/se? #ea's a' asso!iatio' o( %a'5s or other +a$ors re-/larl$ !leari'ite#s4 (9) ?C/sto#er? #ea's a +erso' ha)i'- a' a!!o/'t 1ith a %a'5 or (or 1ho# a %a'5 has a-ree& to !olle!t ite#s2 i'!l/&i'- a %a'5 that #ai'tai's a' a!!o/'t at a'other %a'54 (:) ?=o!/#e'tar$ &ra(t? #ea's a &ra(t to %e +rese'te& (or a!!e+ta'!e or +a$#e't i( s+e!i(ie& &o!/#e'ts2 !erti(i!ate& se!/rities (Se!tio' <-10*) or i'str/!tio's (or /'!erti(i!ate& se!/rities (Se!tio' <-10*)2 or other !erti(i!ates2 state#e'ts2 or the li5e are to %e re!ei)e& %$ the &ra1ee or other +a$or %e(ore a!!e+ta'!e or +a$#e't o( the &ra(t4 (;) ?=ra(t? #ea's a &ra(t as &e(i'e& i' Se!tio' .-108 or a' ite#2 other tha' a' i'str/#e't2 that is a' or&er. (<) ?=ra1ee? #ea's a +erso' or&ere& i' a &ra(t to #a5e +a$#e't. (A) ?Ite#? #ea's a' i'str/#e't or a +ro#ise or or&er to +a$ #o'e$ ha'&le& %$ a %a'5 (or !olle!tio' or +a$#e't. The ter# &oes 'ot i'!l/&e a +a$#e't or&er -o)er'e& %$ Arti!le 8A or a !re&it or &e%it !ar& sli+4 (10) ?Ei&'i-ht &ea&li'e? 1ith res+e!t to a %a'5 is #i&'i-ht o' its 'e,t %a'5i'- &a$ (ollo1i'- the %a'5i'- &a$ o' 1hi!h it re!ei)es the rele)a't ite# or 'oti!e or (ro# 1hi!h the ti#e (or ta5i'- a!tio' !o##e'!es to r/'2 1hi!he)er is later4 (11) ?Settle? #ea's to +a$ i' !ash2 %$ !leari'--ho/se settle#e't2 i' a !har-e or !re&it or %$ re#itta'!e2 or other1ise as a-ree&. A settle#e't #a$ %e either +ro)isio'al or (i'al. (1*) ?S/s+e'&s +a$#e'ts? 1ith res+e!t to a %a'5 #ea's that it has %ee' !lose& %$ or&er o( the s/+er)isor$ a/thorities2 that a +/%li! o((i!er has %ee' a++oi'te& to ta5e it o)er2 or that it !eases or re(/ses to #a5e +a$#e'ts i' the or&i'ar$ !o/rse o( %/si'ess. (%) Other &e(i'itio's a++l$i'- to this Arti!le a'& the se!tio's i' 1hi!h the$ a++ear are0

?A-ree#e't (or ele!tro'i! +rese't#e't? ?Colle!ti'- %a'5? ?=e+ositar$ %a'5? ?I'ter#e&iar$ %a'5? ?Pa$or %a'5? ?Prese'ti'- %a'5? ?Prese't#e't 'oti!e? Se!tio' 8-109 Se!tio' 8-109 Se!tio' 8-109

Se!tio' 8-110

Se!tio' 8-109 Se!tio' 8-109 Se!tio' 8-110

(!) ?Co'trol? as +ro)i&e& i' Se!tio' ;-10: a'& the (ollo1i'- &e(i'itio's i' other Arti!les a++l$ to this Arti!le0 ?A!!e+ta'!e? ?Alteratio'? ?CashierBs !he!5? ?Certi(i!ate o( &e+osit? ?Certi(ie& !he!5? ?Che!5? Se!tio' .-80A Se!tio' .-80; Se!tio' .-108 Se!tio' .-108 Se!tio' .-80A

Se!tio' .-108 Se!tio' .-.0*

?Dol&er i' &/e !o/rse? ?I'str/#e't?

Se!tio' .-108 Se!tio' .-90.

?Noti!e o( &isho'or? ?Or&er?

Se!tio' .-10. Se!tio' .-10. Se!tio' .-.01

?Or&i'ar$ !are?

?Perso' e'title& to e'(or!e? ?Prese't#e't? ?Pro#ise?

Se!tio' .-901 Se!tio' .-10.

?Pro)e? ?Re!or&?

Se!tio' .-10. Se!tio' .-10.. Se!tio' .-10..

?Re#otel$-Create& !o's/#er ite#? ?TellerBs !he!5? Se!tio' .-108

?U'a/thori3e& si-'at/re?

Se!tio' .-80.

(&) I' a&&itio'2 Arti!le 1 !o'tai's -e'eral &e(i'itio's a'& +ri'!i+les o( !o'str/!tio' a'& i'ter+retatio' a++li!a%le thro/-ho/t this Arti!le. 8-109. ?@ANF?4 ?=EPOSITARG @ANF?4 ?PAGOR @ANF?4 ?INTEREE=IARG @ANF?4 ?COLLECTING @ANF?4 ?PRESENTING @ANF?. I' this Arti!le 0 (1) ?@a'5? #ea's a +erso' e'-a-e& i' the %/si'ess o( %a'5i'-2 i'!l/&i'- a sa)i'-s %a'52 sa)i'-s a'& loa' asso!iatio'2 !re&it /'io'2 or tr/st !o#+a'$. (*) ?=e+ositar$ %a'5? #ea's the (irst %a'5 to ta5e a' ite# e)e' tho/-h it is also the +a$or %a'52 /'less the ite# is +rese'te& (or i##e&iate +a$#e't o)er the !o/'ter4 (.) ?Pa$or %a'5? #ea's a %a'5 that is the &ra1ee o( a &ra(t4 (8) ?I'ter#e&iar$ %a'5? #ea's a %a'5 to 1hi!h a' ite# is tra's(erre& i' !o/rse o( !olle!tio' e,!e+t the &e+ositar$ or +a$or %a'54 (9) ?Colle!ti'- %a'5? #ea's a %a'5 ha'&li'- a' ite# (or !olle!tio' e,!e+t the +a$or %a'54 (:) ?Prese'ti'- %a'5? #ea's a %a'5 +rese'ti'- a' ite# e,!e+t a +a$or %a'5. 8-10:. PAGA@LE TDROUGD OR PAGA@LE AT @ANF4 COLLECTING @ANF. (a) I( a' ite# states that it is ?+a$a%le thro/-h? a %a'5 i&e'ti(ie& i' the ite#2 (i) the ite# &esi-'ates the %a'5 as a !olle!ti'- %a'5 a'& &oes 'ot %$ itsel( a/thori3e the %a'5 to +a$ the ite#2 a'& (ii) the ite# #a$ %e +rese'te& (or +a$#e't o'l$ %$ or thro/-h the %a'5. Alter'ati)e A

(%) I( a' ite# states that it is ?+a$a%le at? a %a'5 i&e'ti(ie& i' the ite#2 the ite# is e7/i)ale't to a &ra(t &ra1' o' the %a'5. Alter'ati)e @ (%) I( a' ite# states that it is ?+a$a%le at? a %a'5 i&e'ti(ie& i' the ite#2 (i) the ite# &esi-'ates the %a'5 as a !olle!ti'- %a'5 a'& &oes 'ot %$ itsel( a/thori3e the %a'5 to +a$ the ite#2 a'& (ii) the ite# #a$ %e +rese'te& (or +a$#e't o'l$ %$ or thro/-h the %a'5. (!) I( a &ra(t 'a#es a 'o'%a'5 &ra1ee a'& it is /'!lear 1hether a %a'5 'a#e& i' the &ra(t is a !o-&ra1ee or a !olle!ti'- %a'52 the %a'5 is a !olle!ti'- %a'5. 8-10;. SEPARATE O>>ICE O> @ANF. A %ra'!h or se+arate o((i!e o( a %a'5 is a se+arate %a'5 (or the +/r+ose o( !o#+/ti'the ti#e 1ithi' 1hi!h a'& &eter#i'i'- the +la!e at or to 1hi!h a!tio' #a$ %e ta5e' or 'oti!e or or&ers #/st %e -i)e' /'&er this Arti!le a'& /'&er Arti!le .. 8-10<. TIEE O> RECEIPT O> ITEES. (a) >or the +/r+ose o( allo1i'- ti#e to +ro!ess ite#s2 +ro)e %ala'!es2 a'& #a5e the 'e!essar$ e'tries o' its %oo5s to &eter#i'e its +ositio' (or the &a$2 a %a'5 #a$ (i, a' a(ter'oo' ho/r o( * P.E. or later as a !/to(( ho/r (or the ha'&li'- o( #o'e$ a'& ite#s a'& the #a5i'- o( e'tries o' its %oo5s. (%) A' ite# or &e+osit o( #o'e$ re!ei)e& o' a'$ &a$ a(ter a !/to(( ho/r so (i,e& or

a(ter the !lose o( the %a'5i'- &a$ #a$ %e treate& as %ei'- re!ei)e& at the o+e'i'- o( the 'e,t %a'5i'- &a$. 8-10A. =ELAGS. (a) U'less other1ise i'str/!te&2 a !olle!ti'- %a'5 i' a -oo& (aith e((ort to se!/re +a$#e't o( a s+e!i(i! ite# &ra1' o' a +a$or other tha' a %a'52 a'& 1ith or 1itho/t the a++ro)al o( a'$ +erso' i')ol)e&2 #a$ 1ai)e2 #o&i($2 or e,te'& ti#e li#its i#+ose& or +er#itte& %$ this A!t" (or a +erio& 'ot e,!ee&i'- t1o a&&itio'al %a'5i'- &a$s 1itho/t &is!har-e o( &ra1ers or i'&orsers or lia%ilit$ to its tra's(eror or a +rior +art$. (%) =ela$ %$ a !olle!ti'- %a'5 or +a$or %a'5 %e$o'& ti#e li#its +res!ri%e& or +er#itte& %$ this A!t" or %$ i'str/!tio's is e,!/se& i( (i) the &ela$ is !a/se& %$ i'terr/+tio' o( !o##/'i!atio' or !o#+/ter (a!ilities2 s/s+e'sio' o( +a$#e'ts %$ a'other %a'52 1ar2 e#er-e'!$ !o'&itio's2 (ail/re o( e7/i+#e't2 or other !ir!/#sta'!es %e$o'& the !o'trol o( the %a'5 2 a'& (ii) the %a'5 e,er!ises s/!h &ili-e'!e as the !ir!/#sta'!es re7/ire.

 8-110. ELECTRONIC PRESENTEENT. (a) ?A-ree#e't (or ele!tro'i! +rese't#e't? #ea's a' a-ree#e't2 !leari'--ho/se r/le2 or >e&eral Reser)e re-/latio' or o+erati'- !ir!/lar2 +ro)i&i'- that +rese't#e't o( a' ite# #a$ %e #a&e %$ tra's#issio' o( a' i#a-e o( a' ite# or i'(or#atio' &es!ri%i'- the ite# (?+rese't#e't 'oti!e?) rather tha' &eli)er$ o( the ite# itsel(. The a-ree#e't #a$ +ro)i&e (or +ro!e&/res -o)er'i'- rete'tio'2 +rese't#e't2 +a$#e't2 &isho'or2 a'& other #atters !o'!er'i'- ite#s s/%6e!t to the a-ree#e't. (%) Prese't#e't o( a' ite# +/rs/a't to a' a-ree#e't (or +rese't#e't is #a&e 1he' the +rese't#e't 'oti!e is re!ei)e&. (!) I( +rese't#e't is #a&e %$ +rese't#e't 'oti!e2 a re(ere'!e to ?ite#? or ?!he!5? i' this Arti!le #ea's the +rese't#e't 'oti!e /'less the !o'te,t other1ise i'&i!ates. 8-111. STATUTE O> LIEITATIONS. A' a!tio' to e'(or!e a' o%li-atio'2 &/t$2 or ri-ht arisi'- /'&er this Arti!le #/st %e !o##e'!e& 1ithi' three $ears a(ter the !a/se o( a!tio'" a!!r/es. PART *. COLLECTION O> ITEES0 =EPOSITARG AN= COLLECTING @ANFS 8-*01. STATUS O> COLLECTING @ANF AS AGENT AN= PROVISIONAL STATUS O>

CRE=ITS4 APPLICA@ILITG O> ARTICLE4 ITEE IN=ORSE= ?PAG ANG @ANF?. (a) U'less a !o'trar$ i'te't !learl$ a++ears a'& %e(ore the ti#e that a settle#e't -i)e' %$ a !olle!ti'- %a'5 (or a' ite# is or %e!o#es (i'al2 the %a'52 1ith res+e!t to the ite#2 is a' a-e't or s/%-a-e't o( the o1'er o( the ite# a'& a'$ settle#e't -i)e' (or the ite# is +ro)isio'al. This +ro)isio' a++lies re-ar&less o( the (or# o( i'&orse#e't or la!5 o( i'&orse#e't a'& e)e' tho/-h !re&it -i)e' (or the ite# is s/%6e!t to i##e&iate 1ith&ra1al as o( ri-ht or is i' (a!t 1ith&ra1'4 %/t the !o'ti'/a'!e o( o1'ershi+ o( a' ite# %$ its o1'er a'& a'$ ri-hts o( the o1'er to +ro!ee&s o( the ite# are s/%6e!t to ri-hts o( a !olle!ti'- %a'52 s/!h as those res/lti'- (ro# o/tsta'&i'- a&)a'!es o' the ite# a'& ri-hts o( re!o/+#e't or seto((. I( a' ite# is ha'&le& %$ %a'5s (or +/r+oses o( +rese't#e't2 +a$#e't 2 !olle!tio'2 or ret/r'2 the rele)a't +ro)isio's o( this Arti!le a++l$ e)e' tho/-h a!tio' o( the +arties !learl$ esta%lishes that a +arti!/lar %a'5 has +/r!hase& the ite# a'& is the o1'er o( it. (%) A(ter a' ite# has %ee' i'&orse& 1ith the 1or&s ?+a$ a'$ %a'5? or the li5e2 o'l$ a %a'5 #a$ a!7/ire the ri-hts o( a hol&er /'til the ite# has %ee'0 (1) ret/r'e& to the !/sto#er i'itiati'- !olle!tio'4 or (*) s+e!iall$ i'&orse& %$ a %a'5 to a +erso' 1ho is 'ot a %a'5.

 8-*0*. RESPONSI@ILITG >OR COLLECTION OR RETURN4 CDEN ACTION TIEELG. (a) A !olle!ti'- %a'5 #/st e,er!ise or&i'ar$ !are i'0 (1) +rese'ti'- a' ite# or se'&i'- it (or +rese't#e't4 (*) se'&i'- 'oti!e o( &isho'or or 'o'+a$#e't or ret/r'i'- a' ite# other tha' a &o!/#e'tar$ &ra(t to the %a'5Bs tra's(eror a(ter lear'i'- that the ite# has 'ot %ee' +ai& or a!!e+te&2 as the !ase #a$ %e4 (.) settli'- (or a' ite# 1he' the %a'5 re!ei)es (i'al settle#e't4 a'& (8) 'oti($i'- its tra's(eror o( a'$ loss or &ela$ i' tra'sit 1ithi' a reaso'a%le ti#e a(ter &is!o)er$ thereo(. (%) A !olle!ti'- %a'5 e,er!ises or&i'ar$ !are /'&er s/%se!tio' (a) %$ ta5i'- +ro+er a!tio' %e(ore its #i&'i-ht &ea&li'e (ollo1i'- re!ei+t o( a' ite#2 'oti!e2 or settle#e't. Ta5i'- +ro+er a!tio' 1ithi' a reaso'a%l$ lo'-er ti#e #a$ !o'stit/te the e,er!ise o( or&i'ar$ !are2 %/t the %a'5 has the %/r&e' o( esta%lishi'- ti#eli'ess. (!) S/%6e!t to s/%se!tio' (a)(1)2 a %a'5 is 'ot lia%le (or the i'sol)e'!$2 'e-le!t2 #is!o'&/!t2 #ista5e2 or &e(a/lt o( a'other %a'5 or +erso' or (or loss or &estr/!tio' o( a' ite# i' the +ossessio' o( others or i' tra'sit . 8-*0.. E>>ECT O> INSTRUCTIONS. S/%6e!t to Arti!le . !o'!er'i'- !o')ersio' o( i'str/#e'ts (Se!tio' .-8*0) a'& restri!ti)e i'&orse#e'ts (Se!tio' .-*0:)2 o'l$ a !olle!ti'- %a'5Bs tra's(eror !a' -i)e i'str/!tio's that a((e!t the %a'5 or !o'stit/te 'oti!e to it2 a'& a !olle!ti'- %a'5 is 'ot lia%le to +rior +arties (or a'$ a!tio' ta5e' +/rs/a't to the i'str/!tio's or i' a!!or&a'!e 1ith a'$ a-ree#e't 1ith its tra's(eror. 8-*08. EETDO=S O> SEN=ING AN= PRESENTING4 SEN=ING =IRECTLG TO PAGOR @ANF. (a) A !olle!ti'- %a'5 shall se'& ite#s %$ a reaso'a%l$ +ro#+t #etho&2 ta5i'- i'to !o'si&eratio' rele)a't i'str/!tio's2 the 'at/re o( the ite#2 the '/#%er o( those ite#s o' ha'&2 the !ost o( !olle!tio' i')ol)e&2 a'& the #etho& -e'erall$ /se& %$ it or others to +rese't those ite#s. (%) A !olle!ti'- %a'5 #a$ se'&0 (1) a' ite# &ire!tl$ to the +a$or %a'54

(*) a' ite# to a 'o'%a'5 +a$or i( a/thori3e& %$ its tra's(eror4 a'& (.) a' ite# other tha' &o!/#e'tar$ &ra(ts to a 'o'%a'5 +a$or2 i( a/thori3e& %$ >e&eral Reser)e re-/latio' or o+erati'- !ir!/lar2 !leari'--ho/se r/le2 or the li5e. (!) Prese't#e't #a$ %e #a&e %$ a +rese'ti'- %a'5 at a +la!e 1here the +a$or %a'5 or other +a$or has re7/este& that +rese't#e't %e #a&e. 8-*09. =EPOSITARG @ANF DOL=ER O> UNIN=ORSE= ITEE.

I( a !/sto#er &eli)ers a' ite# to a &e+ositar$ %a'5 (or !olle!tio'0 (1) the &e+ositar$ %a'5 %e!o#es a hol&er o( the ite# at the ti#e it re!ei)es the ite# (or !olle!tio' i( the !/sto#er at the ti#e o( &eli)er$ 1as a hol&er o( the ite#2 1hether or 'ot the !/sto#er i'&orses the ite#2 a'&2 i( the %a'5 satis(ies the other re7/ire#e'ts o( Se!tio' .-.0*2 it is a hol&er i' &/e !o/rse4 a'& (*) the &e+ositar$ %a'5 1arra'ts to !olle!ti'- %a'5s2 the +a$or %a'5 or other +a$or2 a'& the &ra1er that the a#o/'t o( the ite# 1as +ai& to the !/sto#er or &e+osite& to the !/sto#erBs a!!o/'t. 8-*0:. TRANS>ER @ETCEEN @ANFS. A'$ a-ree& #etho& that i&e'ti(ies the tra's(eror %a'5 is s/((i!ie't (or the ite#Bs (/rther tra's(er to a'other %a'5. 8-*0;. TRANS>ER CARRANTIES. (a) A !/sto#er or !olle!ti'- %a'5 that tra's(ers a' ite# a'& re!ei)es a settle#e't or other !o'si&eratio' 1arra'ts to the tra's(eree a'& to a'$ s/%se7/e't !olle!ti'- %a'5 that0 (1) the 1arra'tor is a +erso' e'title& to e'(or!e the ite#4 (*) all si-'at/res o' the ite# are a/the'ti! a'& a/thori3e&4 (.) the ite# has 'ot %ee' altere&4 (8) the ite# is 'ot s/%6e!t to a &e(e'se or !lai# i' re!o/+#e't (Se!tio' .-.09(a)) o( a'$ +art$ that !a' %e asserte& a-ai'st the 1arra'tor4 a'& (9) the 1arra'tor has 'o 5'o1le&-e o( a'$ i'sol)e'!$ +ro!ee&i'- !o##e'!e& 1ith res+e!t to the #a5er or a!!e+tor or2 i' the !ase o( a' /'a!!e+te& &ra(t2 the &ra1er4 a'&

(:) 1ith res+e!t to a'$ re#otel$-!reate& !o's/#er ite#2 that the +erso' o' 1hose a!!o/'t the ite# is &ra1' a/thori3e& the iss/a'!e o( the ite# i' the a#o/'t (or 1hi!h the ite# is &ra1'. (%) I( a' ite# is &isho'ore&2 a !/sto#er or !olle!ti'- %a'5 tra's(erri'- the ite# a'& re!ei)i'- settle#e't or other !o'si&eratio' is o%li-e& to +a$ the a#o/'t &/e o' the ite# (i) a!!or&i'- to the ter#s o( the ite# at the ti#e it 1as tra's(erre&2 or (ii) i( the tra's(er 1as o( a' i'!o#+lete ite#2 a!!or&i'- to its ter#s 1he' !o#+lete& as state& i' Se!tio's .-119 a'& .-80;. The o%li-atio' o( a tra's(eror is o1e& to the tra's(eree a'& to a'$ s/%se7/e't !olle!ti'- %a'5 that ta5es the ite# i' -oo& (aith. A tra's(eror !a''ot &is!lai# its o%li-atio' /'&er this s/%se!tio' %$ a' i'&orse#e't stati'- that it is #a&e ?1itho/t re!o/rse? or other1ise &is!lai#i'- lia%ilit$. (!) A +erso' to 1ho# the 1arra'ties /'&er s/%se!tio' (a) are #a&e a'& 1ho too5 the ite# i' -oo& (aith #a$ re!o)er (ro# the 1arra'tor as &a#a-es (or %rea!h o( 1arra't$ a' a#o/'t e7/al to the loss s/((ere& as a res/lt o( the %rea!h2 %/t 'ot #ore tha' the a#o/'t o( the ite# +l/s e,+e'ses a'& loss o( i'terest i'!/rre& as a res/lt o( the %rea!h. (&) The 1arra'ties state& i' s/%se!tio' (a) !a''ot %e &is!lai#e& 1ith res+e!t to !he!5s. U'less 'oti!e o( a !lai# (or %rea!h o( 1arra't$ is -i)e' to the 1arra'tor 1ithi' .0 &a$s a(ter the !lai#a't has reaso' to 5'o1 o( the %rea!h a'& the i&e'tit$ o( the 1arra'tor2 the 1arra'tor is &is!har-e& to the e,te't o( a'$ loss !a/se& %$ the &ela$ i' -i)i'- 'oti!e o( the !lai#. (e) A !a/se o( a!tio' (or %rea!h o( 1arra't$ /'&er this se!tio' a!!r/es 1he' the !lai#a't has reaso' to 5'o1 o( the %rea!h. 8-*0<. PRESENTEENT CARRANTIES. (a) I( a' /'a!!e+te& &ra(t is +rese'te& to the &ra1ee (or +a$#e't or a!!e+ta'!e a'& the &ra1ee +a$s or a!!e+ts the &ra(t2 (i) the +erso' o%tai'i'- +a$#e't or a!!e+ta'!e2 at the ti#e o( +rese't#e't2 a'& (ii) a +re)io/s tra's(eror o( the &ra(t2 at the ti#e o( tra's(er2 1arra't to the &ra1ee that +a$s or a!!e+ts the &ra(t i' -oo& (aith that0 (1) the 1arra'tor is2 or 1as2 at the ti#e the 1arra'tor tra's(erre& the &ra(t2 a +erso' e'title& to e'(or!e the &ra(t or a/thori3e& to o%tai' +a$#e't or a!!e+ta'!e o( the &ra(t o' %ehal( o( a +erso' e'title& to e'(or!e the &ra(t4 (*) the &ra(t has 'ot %ee' altere&4 a'& (.) the 1arra'tor has 'o 5'o1le&-e that the si-'at/re o( the +/r+orte& &ra1er o( the &ra(t is /'a/thori3e&4 a'&

(8) 1ith res+e!t to a'$ re#otel$-!reate& !o's/#er ite#2 that the +erso' o' 1hose a!!o/'t the ite# is &ra1' a/thori3e& the iss/a'!e o( the ite# i' the a#o/'t (or 1hi!h the ite# is &ra1'. (%) A &ra1ee #a5i'- +a$#e't #a$ re!o)er (ro# a 1arra'tor &a#a-es (or %rea!h o( 1arra't$ e7/al to the a#o/'t +ai& %$ the &ra1ee less the a#o/'t the &ra1ee re!ei)e& or is e'title& to re!ei)e (ro# the &ra1er %e!a/se o( the +a$#e't. I' a&&itio'2 the &ra1ee is e'title& to !o#+e'satio' (or e,+e'ses a'& loss o( i'terest res/lti'- (ro# the %rea!h. The ri-ht o( the &ra1ee to re!o)er &a#a-es /'&er this s/%se!tio' is 'ot a((e!te& %$ a'$ (ail/re o( the &ra1ee to e,er!ise or&i'ar$ !are i' #a5i'- +a$#e't. I( the &ra1ee a!!e+ts the &ra(t (i) %rea!h o( 1arra't$ is a &e(e'se to the o%li-atio' o( the a!!e+tor2 a'& (ii) i( the a!!e+tor #a5es +a$#e't 1ith res+e!t to the &ra(t2 the a!!e+tor is e'title& to re!o)er (ro# a 1arra'tor (or %rea!h o( 1arra't$ the a#o/'ts state& i' this s/%se!tio'. (!) I( a &ra1ee asserts a !lai# (or %rea!h o( 1arra't$ /'&er s/%se!tio' (a) %ase& o' a' /'a/thori3e& i'&orse#e't o( the &ra(t or a' alteratio' o( the &ra(t2 the 1arra'tor #a$ &e(e'& %$ +ro)i'- that the i'&orse#e't is e((e!ti)e /'&er Se!tio' .-808 or .-809 or the &ra1er is +re!l/&e& /'&er Se!tio' .-80: or 8-80: (ro# asserti'- a-ai'st the &ra1ee the /'a/thori3e& i'&orse#e't or alteratio'. (&) I( (i) a &isho'ore& &ra(t is +rese'te& (or +a$#e't to the &ra1er or a' i'&orser or (ii) a'$ other ite# is +rese'te& (or +a$#e't to a +art$ o%li-e& to +a$ the ite#2 a'& the ite# is +ai&2 the +erso' o%tai'i'- +a$#e't a'& a +rior tra's(eror o( the ite# 1arra't to the +erso' #a5i'- +a$#e't i' -oo& (aith that the 1arra'tor is2 or 1as2 at the ti#e the 1arra'tor tra's(erre& the ite#2 a +erso' e'title& to e'(or!e the ite# or a/thori3e& to o%tai' +a$#e't o' %ehal( o( a +erso' e'title& to e'(or!e the ite#. The +erso' #a5i'+a$#e't #a$ re!o)er (ro# a'$ 1arra'tor (or %rea!h o( 1arra't$ a' a#o/'t e7/al to the a#o/'t +ai& +l/s e,+e'ses a'& loss o( i'terest res/lti'- (ro# the %rea!h. (e) The 1arra'ties state& i' s/%se!tio's (a) a'& (&) !a''ot %e &is!lai#e& 1ith res+e!t to !he!5s. U'less 'oti!e o( a !lai# (or %rea!h o( 1arra't$ is -i)e' to the 1arra'tor 1ithi' .0 &a$s a(ter the !lai#a't has reaso' to 5'o1 o( the %rea!h a'& the i&e'tit$ o( the 1arra'tor2 the 1arra'tor is &is!har-e& to the e,te't o( a'$ loss !a/se& %$ the &ela$ i' -i)i'- 'oti!e o( the !lai#. (() A !a/se o( a!tio' (or %rea!h o( 1arra't$ /'&er this se!tio' a!!r/es 1he' the !lai#a't has reaso' to 5'o1 o( the %rea!h. 8-*0A. ENCO=ING AN= RETENTION CARRANTIES. (a) A +erso' 1ho e'!o&es i'(or#atio' o' or 1ith res+e!t to a' ite# a(ter iss/e 1arra'ts to a'$ s/%se7/e't !olle!ti'- %a'5 a'& to the +a$or %a'5 or other +a$or that

the i'(or#atio' is !orre!tl$ e'!o&e&. I( the !/sto#er o( a &e+ositar$ %a'5 e'!o&es2 that %a'5 also #a5es the 1arra't$. (%) A +erso' 1ho /'&erta5es to retai' a' ite# +/rs/a't to a' a-ree#e't (or ele!tro'i! +rese't#e't 1arra'ts to a'$ s/%se7/e't !olle!ti'- %a'5 a'& to the +a$or %a'5 or other +a$or that rete'tio' a'& +rese't#e't o( the ite# !o#+l$ 1ith the a-ree#e't. I( a !/sto#er o( a &e+ositar$ %a'5 /'&erta5es to retai' a' ite#2 that %a'5 also #a5es this 1arra't$. (!) A +erso' to 1ho# 1arra'ties are #a&e /'&er this se!tio' a'& 1ho too5 the ite# i' -oo& (aith #a$ re!o)er (ro# the 1arra'tor as &a#a-es (or %rea!h o( 1arra't$ a' a#o/'t e7/al to the loss s/((ere& as a res/lt o( the %rea!h2 +l/s e,+e'ses a'& loss o( i'terest i'!/rre& as a res/lt o( the %rea!h. 8-*10. SECURITG INTEREST O> COLLECTING @ANF IN ITEES2 ACCOEPANGING =OCUEENTS AN= PROCEE=S. (a) A !olle!ti'- %a'5 has a se!/rit$ i'terest i' a' ite# a'& a'$ a!!o#+a'$i'&o!/#e'ts or the +ro!ee&s o( either0 (1) i' !ase o( a' ite# &e+osite& i' a' a!!o/'t2 to the e,te't to 1hi!h !re&it -i)e' (or the ite# has %ee' 1ith&ra1' or a++lie&4 (*) i' !ase o( a' ite# (or 1hi!h it has -i)e' !re&it a)aila%le (or 1ith&ra1al as o( ri-ht2 to the e,te't o( the !re&it -i)e'2 1hether or 'ot the !re&it is &ra1' /+o' or there is a ri-ht o( !har-e-%a!54 or (.) i( it #a5es a' a&)a'!e o' or a-ai'st the ite#. (%) I( !re&it -i)e' (or se)eral ite#s re!ei)e& at o'e ti#e or +/rs/a't to a si'-le

a-ree#e't is 1ith&ra1' or a++lie& i' +art2 the se!/rit$ i'terest re#ai's /+o' all the ite#s2 a'$ a!!o#+a'$i'- &o!/#e'ts or the +ro!ee&s o( either. >or the +/r+ose o( this se!tio'2 !re&its (irst -i)e' are (irst 1ith&ra1'. (!) Re!ei+t %$ a !olle!ti'- %a'5 o( a (i'al settle#e't (or a' ite# is a reali3atio' o' its se!/rit$ i'terest i' the ite#2 a!!o#+a'$i'- &o!/#e'ts2 a'& +ro!ee&s. So lo'- as the %a'5 &oes 'ot re!ei)e (i'al settle#e't (or the ite# or -i)e /+ +ossessio' o( the ite# or +ossessio' or !o'trol o( the a!!o#+a'$i'- &o!/#e'ts (or +/r+oses other tha' !olle!tio'2 the se!/rit$ i'terest !o'ti'/es to that e,te't a'& is s/%6e!t to Arti!le A2 %/t0 (1) 'o se!/rit$ a-ree#e't is 'e!essar$ to #a5e the se!/rit$ i'terest e'(or!ea%le ( Se!tio' A-*0.(%)(.)(A))4 (*) 'o (ili'- is re7/ire& to +er(e!t the se!/rit$ i'terest4 a'&

(.) the se!/rit$ i'terest has +riorit$ o)er !o'(li!ti'- +er(e!te& se!/rit$ i'terests i' the ite#2 a!!o#+a'$i'- &o!/#e'ts2 or +ro!ee&s. 8-*11. CDEN @ANF GIVES VALUE >OR PURPOSES O> DOL=ER IN =UE COURSE. >or +/r+oses o( &eter#i'i'- its stat/s as a hol&er i' &/e !o/rse2 a %a'5 has -i)e' )al/e to the e,te't it has a se!/rit$ i'terest i' a' ite#2 i( the %a'5 other1ise !o#+lies 1ith the re7/ire#e'ts o( Se!tio' .-.0* o' 1hat !o'stit/tes a hol&er i' &/e !o/rse. 8-*1*. PRESENTEENT @G NOTICE O> ITEE NOT PAGA@LE @G2 TDROUGD2 OR AT @ANF4 LIA@ILITG O> =RACER OR IN=ORSER. (a) U'less other1ise i'str/!te&2 a !olle!ti'- %a'5 #a$ +rese't a' ite# 'ot +a$a%le %$2 thro/-h2 or at a %a'5 %$ se'&i'- to the +art$ to a!!e+t or +a$ a re!or& +ro)i&i'- 'oti!e that the %a'5 hol&s the ite# (or a!!e+ta'!e or +a$#e't. The 'oti!e #/st %e se't i' ti#e to %e re!ei)e& o' or %e(ore the &a$ 1he' +rese't#e't is &/e a'& the %a'5 #/st #eet a'$ re7/ire#e't o( the +art$ to a!!e+t or +a$ /'&er Se!tio' .-901 %$ the !lose o( the %a'5Bs 'e,t %a'5i'- &a$ a(ter it 5'o1s o( the re7/ire#e't. (%) I( +rese't#e't is #a&e %$ 'oti!e a'& +a$#e't2 a!!e+ta'!e2 or re7/est (or

!o#+lia'!e 1ith a re7/ire#e't /'&er Se!tio' .-901 is 'ot re!ei)e& %$ the !lose o( %/si'ess o' the &a$ a(ter #at/rit$ or2 i' the !ase o( &e#a'& ite#s2 %$ the !lose o( %/si'ess o' the thir& %a'5i'- &a$ a(ter 'oti!e 1as se't2 the +rese'ti'- %a'5 #a$ treat the ite# as &isho'ore& a'& !har-e a'$ &ra1er or i'&orser %$ se'&i'- it 'oti!e o( the (a!ts. 8-*1.. EE=IUE AN= TIEE O> SETTLEEENT @G @ANF.

(a) Cith res+e!t to settle#e't %$ a %a'52 the #e&i/# a'& ti#e o( settle#e't #a$ %e +res!ri%e& %$ >e&eral Reser)e re-/latio's or !ir!/lars2 !leari'--ho/se r/les2 a'& the li5e2 or a-ree#e't. I' the a%se'!e o( s/!h +res!ri+tio'0 (1) the #e&i/# o( settle#e't is !ash or !re&it to a' a!!o/'t i' a >e&eral Reser)e %a'5 o( or s+e!i(ie& %$ the +erso' to re!ei)e settle#e't4 a'& (*) the ti#e o( settle#e't2 is0 (i) 1ith res+e!t to te'&er o( settle#e't %$ !ash2 a !ashierBs !he!52 or tellerBs !he!52 1he' the !ash or !he!5 is se't or &eli)ere&4 (ii) 1ith res+e!t to te'&er o( settle#e't %$ !re&it i' a' a!!o/'t i' a >e&eral Reser)e @a'52 1he' the !re&it is #a&e4

(iii) 1ith res+e!t to te'&er o( settle#e't %$ a !re&it or &e%it to a' a!!o/'t i' a %a'52 1he' the !re&it or &e%it is #a&e or2 i' the !ase o( te'&er o( settle#e't %$ a/thorit$ to !har-e a' a!!o/'t2 1he' the a/thorit$ is se't or &eli)ere&4 or (i)) 1ith res+e!t to te'&er o( settle#e't %$ a (/'&s tra's(er2 1he' +a$#e't is #a&e +/rs/a't to Se!tio' 8A-80:(a) to the +erso' re!ei)i'- settle#e't. (%) I( the te'&er o( settle#e't is 'ot %$ a #e&i/# a/thori3e& %$ s/%se!tio' (a) or the ti#e o( settle#e't is 'ot (i,e& %$ s/%se!tio' (a)2 'o settle#e't o!!/rs /'til the te'&er o( settle#e't is a!!e+te& %$ the +erso' re!ei)i'- settle#e't. (!) I( settle#e't (or a' ite# is #a&e %$ !ashierBs !he!5 or tellerBs !he!5 a'& the +erso' re!ei)i'- settle#e't2 %e(ore its #i&'i-ht &ea&li'e0 (1) +rese'ts or (or1ar&s the !he!5 (or !olle!tio'2 settle#e't is (i'al 1he' the !he!5 is (i'all$ +ai&4 or (*) (ails to +rese't or (or1ar& the !he!5 (or !olle!tio'2 settle#e't is (i'al at the #i&'i-ht &ea&li'e o( the +erso' re!ei)i'- settle#e't. (&) I( settle#e't (or a' ite# is #a&e %$ -i)i'- a/thorit$ to !har-e the a!!o/'t o( the %a'5 -i)i'- settle#e't i' the %a'5 re!ei)i'- settle#e't2 settle#e't is (i'al 1he' the !har-e is #a&e %$ the %a'5 re!ei)i'- settle#e't i( there are (/'&s a)aila%le i' the a!!o/'t (or the a#o/'t o( the ite#. 8-*18. RIGDT O> CDARGE-@ACF OR RE>UN=4 LIA@ILITG O> COLLECTING @ANF4 RETURN O> ITEE. (a) I( a !olle!ti'- %a'5 has #a&e +ro)isio'al settle#e't 1ith its !/sto#er (or a' ite# a'& (ails %$ reaso' o( &isho'or2 s/s+e'sio' o( +a$#e'ts %$ a %a'52 or other1ise to re!ei)e settle#e't (or the ite# 1hi!h is or %e!o#es (i'al2 the %a'5 #a$ re)o5e the settle#e't -i)e' %$ it2 !har-e %a!5 the a#o/'t o( a'$ !re&it -i)e' (or the ite# to its !/sto#erBs a!!o/'t2 or o%tai' re(/'& (ro# its !/sto#er2 1hether or 'ot it is a%le to ret/r' the ite#2 i( %$ its #i&'i-ht &ea&li'e or 1ithi' a lo'-er reaso'a%le ti#e a(ter it lear's the (a!ts it ret/r's the ite# or se'&s 'oti(i!atio' o( the (a!ts. I( the ret/r' or 'oti!e is &ela$e& %e$o'& the %a'5Bs #i&'i-ht &ea&li'e or a lo'-er reaso'a%le ti#e a(ter it lear's the (a!ts2 the %a'5 #a$ re)o5e the settle#e't2 !har-e %a!5 the !re&it2 or o%tai' re(/'& (ro# its !/sto#er2 %/t it is lia%le (or a'$ loss res/lti'- (ro# the &ela$. These ri-hts to re)o5e2 !har-e %a!52 a'& o%tai' re(/'& ter#i'ate i( a'& 1he' a settle#e't (or the ite# re!ei)e& %$ the %a'5 is or %e!o#es (i'al . (%) A !olle!ti'- %a'5 ret/r's a' ite# 1he' it is se't or &eli)ere& to the %a'5Bs !/sto#er or tra's(eror or +/rs/a't to its i'str/!tio's.

(!) A &e+ositar$ %a'5 that is also the +a$or #a$ !har-e %a!5 the a#o/'t o( a' ite# to its !/sto#erBs a!!o/'t or o%tai' re(/'& i' a!!or&a'!e 1ith the se!tio' -o)er'i'- ret/r' o( a' ite# re!ei)e& %$ a +a$or %a'5 (or !re&it o' its %oo5s (Se!tio' 8-.01). (&) The ri-ht to !har-e %a!5 is 'ot a((e!te& %$0 (1) +re)io/s /se o( a !re&it -i)e' (or the ite#4 or (*) (ail/re %$ a'$ %a'5 to e,er!ise or&i'ar$ !are 1ith res+e!t to the ite#2 %/t a %a'5 so (aili'- re#ai's lia%le. (e) A (ail/re to !har-e %a!5 or !lai# re(/'& &oes 'ot a((e!t other ri-hts o( the %a'5 a-ai'st the !/sto#er or a'$ other +art$. (() I( !re&it is -i)e' i' &ollars as the e7/i)ale't o( the )al/e o( a' ite# +a$a%le i' (orei-' #o'e$2 the &ollar a#o/'t o( a'$ !har-e-%a!5 or re(/'& #/st %e !al!/late& o' the %asis o( the %a'5-o((ere& s+ot rate (or the (orei-' #o'e$ +re)aili'- o' the &a$ 1he' the +erso' e'title& to the !har-e-%a!5 or re(/'& lear's that it 1ill 'ot re!ei)e +a$#e't i' or&i'ar$ !o/rse. 8-*19. >INAL PAGEENT O> ITEE @G PAGOR @ANF4 CDEN PROVISIONAL =E@ITS AN= CRE=ITS @ECOEE >INAL4 CDEN CERTAIN CRE=ITS @ECOEE AVAILA@LE >OR CITD=RACAL. (a) A' ite# is (i'all$ +ai& %$ a +a$or %a'5 1he' the %a'5 has (irst &o'e a'$ o( the (ollo1i'-0 (1) +ai& the ite# i' !ash4 (*) settle& (or the ite# 1itho/t ha)i'- a ri-ht to re)o5e the settle#e't /'&er stat/te2 !leari'--ho/se r/le2 or a-ree#e't4 or (.) #a&e a +ro)isio'al settle#e't (or the ite# a'& (aile& to re)o5e the settle#e't i' the ti#e a'& #a''er +er#itte& %$ stat/te2 !leari'--ho/se r/le2 or a-ree#e't. (%) I( +ro)isio'al settle#e't (or a' ite# &oes 'ot %e!o#e (i'al2 the ite# is 'ot (i'all$ +ai&. (!) I( +ro)isio'al settle#e't (or a' ite# %et1ee' the +rese'ti'- a'& +a$or %a'5s is #a&e thro/-h a !leari'- ho/se or %$ &e%its or !re&its i' a' a!!o/'t %et1ee' the#2 the' to the e,te't that +ro)isio'al &e%its or !re&its (or the ite# are e'tere& i' a!!o/'ts %et1ee' the +rese'ti'- a'& +a$or %a'5s or %et1ee' the +rese'ti'- a'& s/!!essi)e +rior !olle!ti'- %a'5s seriati#2 the$ %e!o#e (i'al /+o' (i'al +a$#e't o( the ite#s %$ the +a$or %a'5.

(&) I( a !olle!ti'- %a'5 re!ei)es a settle#e't (or a' ite# 1hi!h is or %e!o#es (i'al2 the %a'5 is a!!o/'ta%le to its !/sto#er (or the a#o/'t o( the ite# a'& a'$ +ro)isio'al !re&it -i)e' (or the ite# i' a' a!!o/'t 1ith its !/sto#er %e!o#es (i'al. (e) S/%6e!t to (i) a++li!a%le la1 stati'- a ti#e (or a)aila%ilit$ o( (/'&s a'& (ii) a'$ ri-ht o( the %a'5 to a++l$ the !re&it to a' o%li-atio' o( the !/sto#er2 !re&it -i)e' %$ a %a'5 (or a' ite# i' a !/sto#erBs a!!o/'t %e!o#es a)aila%le (or 1ith&ra1al as o( ri-ht0 (1) i( the %a'5 has re!ei)e& a +ro)isio'al settle#e't (or the ite#2 1he' the settle#e't %e!o#es (i'al a'& the %a'5 has ha& a reaso'a%le ti#e to re!ei)e ret/r' o( the ite# a'& the ite# has 'ot %ee' re!ei)e& 1ithi' that ti#e4 (*) i( the %a'5 is %oth the &e+ositar$ %a'5 a'& the +a$or %a'52 a'& the ite# is (i'all$ +ai&2 at the o+e'i'- o( the %a'5Bs se!o'& %a'5i'- &a$ (ollo1i'- re!ei+t o( the ite#. (() S/%6e!t to a++li!a%le la1 stati'- a ti#e (or a)aila%ilit$ o( (/'&s a'& a'$ ri-ht o( a

%a'5 to a++l$ a &e+osit to a' o%li-atio' o( the &e+ositor2 a &e+osit o( #o'e$ %e!o#es a)aila%le (or 1ith&ra1al as o( ri-ht at the o+e'i'- o( the %a'5Bs 'e,t %a'5i'- &a$ a(ter re!ei+t o( the &e+osit. 8-*1:. INSOLVENCG AN= PRE>ERENCE. (a) I( a' ite# is i' or !o#es i'to the +ossessio' o( a +a$or or !olle!ti'- %a'5 that

s/s+e'&s +a$#e't a'& the ite# has 'ot %ee' (i'all$ +ai&2 the ite# #/st %e ret/r'e& %$ the re!ei)er2 tr/stee2 or a-e't i' !har-e o( the !lose& %a'5 to the +rese'ti'- %a'5 or the !lose& %a'5Bs !/sto#er. (%) I( a +a$or %a'5 (i'all$ +a$s a' ite# a'& s/s+e'&s +a$#e'ts 1itho/t #a5i'- a settle#e't (or the ite# 1ith its !/sto#er or the +rese'ti'- %a'5 1hi!h settle#e't is or %e!o#es (i'al2 the o1'er o( the ite# has a +re(erre& !lai# a-ai'st the +a$or %a'5. (!) I( a +a$or %a'5 -i)es or a !olle!ti'- %a'5 -i)es or re!ei)es a +ro)isio'al settle#e't (or a' ite# a'& therea(ter s/s+e'&s +a$#e'ts2 the s/s+e'sio' &oes 'ot +re)e't or i'ter(ere 1ith the settle#e'tBs %e!o#i'- (i'al i( the (i'alit$ o!!/rs a/to#ati!all$ /+o' the la+se o( !ertai' ti#e or the ha++e'i'- o( !ertai' e)e'ts . (&) I( a !olle!ti'- %a'5 re!ei)es (ro# s/%se7/e't +arties settle#e't (or a' ite#2 1hi!h settle#e't is or %e!o#es (i'al a'& the %a'5 s/s+e'&s +a$#e'ts 1itho/t #a5i'- a settle#e't (or the ite# 1ith its !/sto#er 1hi!h settle#e't is or %e!o#es (i'al2 the o1'er o( the ite# has a +re(erre& !lai# a-ai'st the !olle!ti'- %a'5. PART .. COLLECTION O> ITEES0 PAGOR @ANFS.

 8-.01. =E>ERRE= POSTING4 RECOVERG O> PAGEENT @G RETURN O> ITEES4 TIEE O> =ISDONOR4 RETURN O> ITEES @G PAGOR @ANF. (a) I( a +a$or %a'5 settles (or a &e#a'& ite# other tha' a &o!/#e'tar$ &ra(t

+rese'te& other1ise tha' (or i##e&iate +a$#e't o)er the !o/'ter %e(ore #i&'i-ht o( the %a'5i'- &a$ o( re!ei+t2 the +a$or %a'5 #a$ re)o5e the settle#e't a'& re!o)er the settle#e't i(2 %e(ore it has #a&e (i'al +a$#e't a'& %e(ore its #i&'i-ht &ea&li'e2 it (1) ret/r's the ite#4 (*) ret/r's a' i#a-e o( the ite#2 i( the +art$ to 1hi!h the ret/r' is #a&e has e'tere& i'to a' a-ree#e't to a!!e+t a' i#a-e as a ret/r' o( the ite#4 a'& the i#a-e is ret/r'e& i' a!!or&a'!e 1ith that a-ree#e't4 (.) se'&s a re!or& +ro)i&i'- 'oti!e o( &isho'or or 'o'+a$#e't i( the ite# is /'a)aila%le (or ret/r'. (%) I( a &e#a'& ite# is re!ei)e& %$ a +a$or %a'5 (or !re&it o' its %oo5s2 it #a$ ret/r' the ite# or se'& 'oti!e o( &isho'or a'& #a$ re)o5e a'$ !re&it -i)e' or re!o)er the a#o/'t thereo( 1ith&ra1' %$ its !/sto#er2 i( it a!ts 1ithi' the ti#e li#it a'& i' the #a''er s+e!i(ie& i' s/%se!tio' (a). (!) U'less +re)io/s 'oti!e o( &isho'or has %ee' se't2 a' ite# is &isho'ore& at the ti#e 1he' (or +/r+oses o( &isho'or it is ret/r'e& or 'oti!e se't i' a!!or&a'!e 1ith this se!tio'. (&) A' ite# is ret/r'e&0 (1) as to a' ite# +rese'te& thro/-h a !leari'- ho/se2 1he' it is &eli)ere& to the +rese'ti'- or last !olle!ti'- %a'5 or to the !leari'- ho/se or is se't or &eli)ere& i' a!!or&a'!e 1ith !leari'--ho/se r/les4 or (*) i' all other !ases2 1he' it is se't or &eli)ere& to the %a'5Bs !/sto#er or tra's(eror or +/rs/a't to i'str/!tio's. 8-.0*. PAGOR @ANFBS RESPONSI@ILITG >OR LATE RETURN O> ITEE. (a) I( a' ite# is +rese'te& to a'& re!ei)e& %$ a +a$or %a'52 the %a'5 is a!!o/'ta%le (or the a#o/'t o(0 (1) a &e#a'& ite#2 other tha' a &o!/#e'tar$ &ra(t2 1hether +ro+erl$ +a$a%le or 'ot2 i( the %a'52 i' a'$ !ase i' 1hi!h it is 'ot also the &e+ositar$ %a'52 retai's the ite# %e$o'& #i&'i-ht o( the %a'5i'- &a$ o( re!ei+t 1itho/t settli'- (or it or2 1hether or 'ot

it is also the &e+ositar$ %a'52 &oes 'ot +a$ or ret/r' the ite# or se'& 'oti!e o( &isho'or /'til a(ter its #i&'i-ht &ea&li'e4 or (*) a'$ other +ro+erl$ +a$a%le ite# /'less2 1ithi' the ti#e allo1e& (or a!!e+ta'!e or +a$#e't o( that ite#2 the %a'5 either a!!e+ts or +a$s the ite# or ret/r's it a'& a!!o#+a'$i'- &o!/#e'ts. (%) The lia%ilit$ o( a +a$or %a'5 to +a$ a' ite# +/rs/a't to s/%se!tio' (a) is s/%6e!t to &e(e'ses %ase& o' %rea!h o( a +rese't#e't 1arra't$ (Se!tio' 8-*0<) or +roo( that the +erso' see5i'- e'(or!e#e't o( the lia%ilit$ +rese'te& or tra's(erre& the ite# (or the +/r+ose o( &e(ra/&i'- the +a$or %a'5. 8-.0.. CDEN ITEES SU@HECT TO NOTICE2 STOP-PAGEENT OR=ER2 LEGAL PROCESS2 OR SETO>>4 OR=ER IN CDICD ITEES EAG @E CDARGE= OR CERTI>IE=. (a) A'$ 5'o1le&-e2 'oti!e2 or sto+-+a$#e't or&er re!ei)e& %$2 le-al +ro!ess ser)e& /+o'2 or seto(( e,er!ise& %$ a +a$or %a'5 !o#es too late to ter#i'ate2 s/s+e'&2 or #o&i($ the %a'5Bs ri-ht or &/t$ to +a$ a' ite# or to !har-e its !/sto#erBs a!!o/'t (or the ite# i( the 5'o1le&-e2 'oti!e2 sto+-+a$#e't or&er2 or le-al +ro!ess is re!ei)e& or ser)e& a'& a reaso'a%le ti#e (or the %a'5 to a!t thereo' e,+ires or the seto(( is e,er!ise& a(ter the earliest o( the (ollo1i'-0 (1) the %a'5 a!!e+ts or !erti(ies the ite#4 (*) the %a'5 +a$s the ite# i' !ash4 (.) the %a'5 settles (or the ite# 1itho/t ha)i'- a ri-ht to re)o5e the settle#e't /'&er stat/te2 !leari'--ho/se r/le2 or a-ree#e't4 (8) the %a'5 %e!o#es a!!o/'ta%le (or the a#o/'t o( the ite# /'&er Se!tio' 8-.0* &eali'- 1ith the +a$or %a'5Bs res+o'si%ilit$ (or late ret/r' o( ite#s4 or (9) 1ith res+e!t to !he!5s2 a !/to(( ho/r 'o earlier tha' o'e ho/r a(ter the o+e'i'- o( the 'e,t %a'5i'- &a$ a(ter the %a'5i'- &a$ o' 1hi!h the %a'5 re!ei)e& the !he!5 a'& 'o later tha' the !lose o( that 'e,t %a'5i'- &a$ or2 i( 'o !/to(( ho/r is (i,e&2 the !lose o( the 'e,t %a'5i'- &a$ a(ter the %a'5i'- &a$ o' 1hi!h the %a'5 re!ei)e& the !he!5. (%) S/%6e!t to s/%se!tio' (a)2 ite#s #a$ %e a!!e+te&2 +ai&2 !erti(ie&2 or !har-e& to the i'&i!ate& a!!o/'t o( its !/sto#er i' a'$ or&er. PART 8. RELATIONSDIP @ETCEEN PAGOR @ANF AN= ITS CUSTOEER 8-801. CDEN @ANF EAG CDARGE CUSTOEERBS ACCOUNT.

(a)

A %a'5 #a$ !har-e a-ai'st the a!!o/'t o( a !/sto#er a' ite# that is +ro+erl$

+a$a%le (ro# that a!!o/'t e)e' tho/-h the !har-e !reates a' o)er&ra(t. A' ite# is +ro+erl$ +a$a%le i( it is a/thori3e& %$ the !/sto#er a'& is i' a!!or&a'!e 1ith a'$ a-ree#e't %et1ee' the !/sto#er a'& %a'5. (%) A !/sto#er is 'ot lia%le (or the a#o/'t o( a' o)er&ra(t i( the !/sto#er 'either si-'e& the ite# 'or %e'e(ite& (ro# the +ro!ee&s o( the ite#. (!) A %a'5 #a$ !har-e a-ai'st the a!!o/'t o( a !/sto#er a !he!5 that is other1ise +ro+erl$ +a$a%le (ro# the a!!o/'t2 e)e' tho/-h +a$#e't 1as #a&e %e(ore the &ate o( the !he!52 /'less the !/sto#er has -i)e' 'oti!e to the %a'5 o( the +ost&ati'- &es!ri%i'the !he!5 1ith reaso'a%le !ertai't$. The 'oti!e is e((e!ti)e (or the +erio& state& i' Se!tio' 8-80.(%) (or sto+-+a$#e't or&ers2 a'& #/st %e re!ei)e& at s/!h ti#e a'& i' s/!h #a''er as to a((or& the %a'5 a reaso'a%le o++ort/'it$ to a!t o' it %e(ore the %a'5 ta5es a'$ a!tio' 1ith res+e!t to the !he!5 &es!ri%e& i' Se!tio' 8-.0.. I( a %a'5 !har-es a-ai'st the a!!o/'t o( a !/sto#er a !he!5 %e(ore the &ate state& i' the 'oti!e o( +ost&ati'-2 the %a'5 is lia%le (or &a#a-es (or the loss res/lti'- (ro# its a!t. The loss #a$ i'!l/&e &a#a-es (or &isho'or o( s/%se7/e't ite#s /'&er Se!tio' 8-80*. (&) A %a'5 that i' -oo& (aith #a5es +a$#e't to a hol&er #a$ !har-e the i'&i!ate& a!!o/'t o( its !/sto#er a!!or&i'- to0 (1) the ori-i'al ter#s o( the altere& ite#4 or (*) the ter#s o( the !o#+lete& ite#2 e)e' tho/-h the %a'5 5'o1s the ite# has %ee' !o#+lete& /'less the %a'5 has 'oti!e that the !o#+letio' 1as i#+ro+er. 8-80*. @ANFBS LIA@ILITG TO CUSTOEER >OR CRONG>UL =ISDONOR4 TIEE O> =ETEREINING INSU>>ICIENCG O> ACCOUNT. (a) E,!e+t as other1ise +ro)i&e& i' this Arti!le2 a +a$or %a'5 1ro'-(/ll$ &isho'ors a' ite# i( it &isho'ors a' ite# that is +ro+erl$ +a$a%le2 %/t a %a'5 #a$ &isho'or a' ite# that 1o/l& !reate a' o)er&ra(t /'less it has a-ree& to +a$ the o)er&ra(t. (%) A +a$or %a'5 is lia%le to its !/sto#er (or &a#a-es +ro,i#atel$ !a/se& %$ the 1ro'-(/l &isho'or o( a' ite#. Lia%ilit$ is li#ite& to a!t/al &a#a-es +ro)e& a'& #a$ i'!l/&e &a#a-es (or a' arrest or +rose!/tio' o( the !/sto#er or other !o'se7/e'tial &a#a-es. Chether a'$ !o'se7/e'tial &a#a-es are +ro,i#atel$ !a/se& %$ the 1ro'-(/l &isho'or is a 7/estio' o( (a!t to %e &eter#i'e& i' ea!h !ase. (!) A +a$or %a'5Bs &eter#i'atio' o( the !/sto#erBs a!!o/'t %ala'!e o' 1hi!h a &e!isio' to &isho'or (or i's/((i!ie'!$ o( a)aila%le (/'&s is %ase& #a$ %e #a&e at a'$ ti#e %et1ee' the ti#e the ite# is re!ei)e& %$ the +a$or %a'5 a'& the ti#e that the +a$or %a'5 ret/r's the ite# or -i)es 'oti!e i' lie/ o( ret/r'2 a'& 'o #ore tha' o'e

&eter#i'atio' 'ee& %e #a&e. I(2 at the ele!tio' o( the +a$or %a'52 a s/%se7/e't %ala'!e &eter#i'atio' is #a&e (or the +/r+ose o( ree)al/ati'- the %a'5Bs &e!isio' to &isho'or the ite#2 the a!!o/'t %ala'!e at that ti#e is &eter#i'ati)e o( 1hether a &isho'or (or i's/((i!ie'!$ o( a)aila%le (/'&s is 1ro'-(/l. 8-80.. CUSTOEERBS RIGDT TO STOP PAGEENT4 @UR=EN O> PROO> O> LOSS. (a) A !/sto#er or a'$ +erso' a/thori3e& to &ra1 o' the a!!o/'t i( there is #ore tha' o'e +erso' #a$ sto+ +a$#e't o( a'$ ite# &ra1' o' the !/sto#erBs a!!o/'t or !lose the a!!o/'t %$ a' or&er to the %a'5 &es!ri%i'- the ite# or a!!o/'t 1ith reaso'a%le !ertai't$ re!ei)e& at a ti#e a'& i' a #a''er that a((or&s the %a'5 a reaso'a%le o++ort/'it$ to a!t o' it %e(ore a'$ a!tio' %$ the %a'5 1ith res+e!t to the ite# &es!ri%e& i' Se!tio' 8-.0.. I( the si-'at/re o( #ore tha' o'e +erso' is re7/ire& to &ra1 o' a' a!!o/'t2 a'$ o( these +erso's #a$ sto+ +a$#e't or !lose the a!!o/'t. (%) A sto+-+a$#e't or&er is e((e!ti)e (or si, #o'ths2 %/t it la+ses a(ter 18 !ale'&ar &a$s i( the ori-i'al or&er 1as oral a'& 1as 'ot !o'(ir#e& i' a re!or& 1ithi' that +erio&. A sto+-+a$#e't or&er #a$ %e re'e1e& (or a&&itio'al si,-#o'th +erio&s %$ a re!or& -i)e' to the %a'5 1ithi' a +erio& &/ri'- 1hi!h the sto+-+a$#e't or&er is e((e!ti)e. (!) The %/r&e' o( esta%lishi'- the (a!t a'& a#o/'t o( loss res/lti'- (ro# the +a$#e't o( a' ite# !o'trar$ to a sto+-+a$#e't or&er or or&er to !lose a' a!!o/'t is o' the !/sto#er. The loss (ro# +a$#e't o( a' ite# !o'trar$ to a sto+-+a$#e't or&er #a$ i'!l/&e &a#a-es (or &isho'or o( s/%se7/e't ite#s /'&er Se!tio' 8-80*. 8-808. @ANF NOT O@LIGE= TO PAG CDECF EORE TDAN SIM EONTDS OL=. A %a'5 is /'&er 'o o%li-atio' to a !/sto#er ha)i'- a !he!5i'- a!!o/'t to +a$ a !he!52 other tha' a !erti(ie& !he!52 1hi!h is +rese'te& #ore tha' si, #o'ths a(ter its &ate2 %/t it #a$ !har-e its !/sto#erBs a!!o/'t (or a +a$#e't #a&e therea(ter i' -oo& (aith. 8-809. =EATD OR INCOEPETENCE O> CUSTOEER. (a) A +a$or or !olle!ti'- %a'5Bs a/thorit$ to a!!e+t2 +a$2 or !olle!t a' ite# or to a!!o/'t (or +ro!ee&s o( its !olle!tio'2 i( other1ise e((e!ti)e2 is 'ot re'&ere& i'e((e!ti)e %$ i'!o#+ete'!e o( a !/sto#er o( either %a'5 e,isti'- at the ti#e the ite# is iss/e& or its !olle!tio' is /'&erta5e' i( the %a'5 &oes 'ot 5'o1 o( a' a&6/&i!atio' o( i'!o#+ete'!e. Neither &eath 'or i'!o#+ete'!e o( a !/sto#er re)o5es the a/thorit$ to a!!e+t2 +a$2 !olle!t2 or a!!o/'t /'til the %a'5 5'o1s o( the (a!t o( &eath or o( a' a&6/&i!atio' o( i'!o#+ete'!e a'& has reaso'a%le o++ort/'it$ to a!t o' it. (%) E)e' 1ith 5'o1le&-e2 a %a'5 #a$ (or 10 &a$s a(ter the &ate o( &eath +a$ or !erti($ !he!5s &ra1' o' or %e(ore that &ate /'less or&ere& to sto+ +a$#e't %$ a +erso' !lai#i'- a' i'terest i' the a!!o/'t.

 8-80:. CUSTOEERBS =UTG TO =ISCOVER AN= REPORT UNAUTDORILE= SIGNATURE OR ALTERATION. (a) A %a'5 that se'&s or #a5es a)aila%le to a !/sto#er a state#e't o( a!!o/'t sho1i'+a$#e't o( ite#s (or the a!!o/'t shall either ret/r' or #a5e a)aila%le to the !/sto#er the ite#s +ai& or +ro)i&e i'(or#atio' i' the state#e't o( a!!o/'t s/((i!ie't to allo1 the !/sto#er reaso'a%l$ to i&e'ti($ the ite#s +ai&. The state#e't o( a!!o/'t +ro)i&es s/((i!ie't i'(or#atio' i( the ite# is &es!ri%e& %$ ite# '/#%er2 a#o/'t2 a'& &ate o( +a$#e't. (%) I( the ite#s are 'ot ret/r'e& to the !/sto#er2 the +erso' retai'i'- the ite#s shall either retai' the ite#s or2 i( the ite#s are &estro$e&2 #ai'tai' the !a+a!it$ to (/r'ish le-i%le !o+ies o( the ite#s /'til the e,+iratio' o( se)e' $ears a(ter re!ei+t o( the ite#s. A !/sto#er #a$ re7/est a' ite# (ro# the %a'5 that +ai& the ite#2 a'& that %a'5 #/st +ro)i&e i' a reaso'a%le ti#e either the ite# or2 i( the ite# has %ee' &estro$e& or is 'ot other1ise o%tai'a%le2 a le-i%le !o+$ o( the ite#. (!) I( a %a'5 se'&s or #a5es a)aila%le a state#e't o( a!!o/'t or ite#s +/rs/a't to s/%se!tio' (a)2 the !/sto#er #/st e,er!ise reaso'a%le +ro#+t'ess i' e,a#i'i'- the state#e't or the ite#s to &eter#i'e 1hether a'$ +a$#e't 1as 'ot a/thori3e& %e!a/se o( a' alteratio' o( a' ite# or %e!a/se a +/r+orte& si-'at/re %$ or o' %ehal( o( the !/sto#er 1as 'ot a/thori3e&. I(2 %ase& o' the state#e't or ite#s +ro)i&e&2 the !/sto#er sho/l& reaso'a%l$ ha)e &is!o)ere& the /'a/thori3e& +a$#e't2 the !/sto#er #/st +ro#+tl$ 'oti($ the %a'5 o( the rele)a't (a!ts. (&) I( the %a'5 +ro)es that the !/sto#er (aile&2 1ith res+e!t to a' ite#2 to !o#+l$ 1ith the &/ties i#+ose& o' the !/sto#er %$ s/%se!tio' (!)2 the !/sto#er is +re!l/&e& (ro# asserti'- a-ai'st the %a'50 (1) the !/sto#erBs /'a/thori3e& si-'at/re or a'$ alteratio' o' the ite#2 i( the %a'5 also +ro)es that it s/((ere& a loss %$ reaso' o( the (ail/re4 a'& (*) the !/sto#erBs /'a/thori3e& si-'at/re or alteratio' %$ the sa#e 1ro'-&oer o' a'$ other ite# +ai& i' -oo& (aith %$ the %a'5 i( the +a$#e't 1as #a&e %e(ore the %a'5 re!ei)e& 'oti!e (ro# the !/sto#er o( the /'a/thori3e& si-'at/re or alteratio' a'& a(ter the !/sto#er ha& %ee' a((or&e& a reaso'a%le +erio& o( ti#e2 'ot e,!ee&i'- .0 &a$s2 i' 1hi!h to e,a#i'e the ite# or state#e't o( a!!o/'t a'& 'oti($ the %a'5. (e) I( s/%se!tio' (&) a++lies a'& the !/sto#er +ro)es that the %a'5 (aile& to e,er!ise or&i'ar$ !are i' +a$i'- the ite# a'& that the (ail/re s/%sta'tiall$ !o'tri%/te& to loss2 the loss is allo!ate& %et1ee' the !/sto#er +re!l/&e& a'& the %a'5 asserti'- the +re!l/sio' a!!or&i'- to the e,te't to 1hi!h the (ail/re o( the !/sto#er to !o#+l$ 1ith s/%se!tio' (!) a'& the (ail/re o( the %a'5 to e,er!ise or&i'ar$ !are !o'tri%/te& to the

loss. I( the !/sto#er +ro)es that the %a'5 &i& 'ot +a$ the ite# i' -oo& (aith2 the +re!l/sio' /'&er s/%se!tio' (&) &oes 'ot a++l$. (() Citho/t re-ar& to !are or la!5 o( !are o( either the !/sto#er or the %a'52 a !/sto#er 1ho &oes 'ot 1ithi' o'e $ear a(ter the state#e't or ite#s are #a&e a)aila%le to the !/sto#er (s/%se!tio' (a)) &is!o)er a'& re+ort the !/sto#erBs /'a/thori3e& si-'at/re o' or a'$ alteratio' o' the ite# is +re!l/&e& (ro# asserti'a-ai'st the %a'5 the /'a/thori3e& si-'at/re or alteratio'. I( there is a +re!l/sio' /'&er this s/%se!tio'2 the +a$or %a'5 #a$ 'ot re!o)er (or %rea!h o( 1arra't$ /'&er Se!tio' 8-*0< 1ith res+e!t to the /'a/thori3e& si-'at/re or alteratio' to 1hi!h the +re!l/sio' a++lies. 8-80;. PAGOR @ANFBS RIGDT TO SU@ROGATION ON IEPROPER PAGEENT. I( a +a$or %a'5 has +ai& a' ite# o)er the or&er o( the &ra1er or #a5er to sto+ +a$#e't2 or a(ter a' a!!o/'t has %ee' !lose&2 or other1ise /'&er !ir!/#sta'!es -i)i'a %asis (or o%6e!tio' %$ the &ra1er or #a5er2 to +re)e't /'6/st e'ri!h#e't a'& o'l$ to the e,te't 'e!essar$ to +re)e't loss to the %a'5 %$ reaso' o( its +a$#e't o( the ite#2 the +a$or %a'5 is s/%ro-ate& to the ri-hts (1) o( a'$ hol&er i' &/e !o/rse o' the ite# a-ai'st the &ra1er or #a5er4 (*) o( the +a$ee or a'$ other hol&er o( the ite# a-ai'st the &ra1er or #a5er either o' the ite# or /'&er the tra'sa!tio' o/t o( 1hi!h the ite# arose4 a'& (.) o( the &ra1er or #a5er a-ai'st the +a$ee or a'$ other hol&er o( the ite# 1ith res+e!t to the tra'sa!tio' o/t o( 1hi!h the ite# arose. PART 9. COLLECTION O> =OCUEENTATARG =RA>TS 8-901. DAN=LING O> =OCUEENTARG =RA>TS4 =UTG TO SEN= >OR PRESENTEENT AN= TO NOTI>G CUSTOEER O> =ISDONOR. A %a'5 that ta5es a &o!/#e'tar$ &ra(t (or !olle!tio' shall +rese't or se'& the &ra(t a'& a!!o#+a'$i'- &o!/#e'ts (or +rese't#e't a'&2 /+o' lear'i'- that the &ra(t has 'ot %ee' +ai& or a!!e+te& i' &/e !o/rse2 shall seaso'a%l$ 'oti($ its !/sto#er o( the (a!t e)e' tho/-h it #a$ ha)e &is!o/'te& or %o/-ht the &ra(t or e,te'&e& !re&it a)aila%le (or 1ith&ra1al as o( ri-ht. 8-90*. PRESENTEENT O> ?ON ARRIVAL? =RA>TS. I( a &ra(t or the rele)a't i'str/!tio's re7/ire +rese't#e't ?o' arri)al?2 ?1he' -oo&s arri)e? or the li5e2 the !olle!ti'- %a'5 'ee& 'ot +rese't /'til i' its 6/&-#e't a reaso'a%le ti#e (or arri)al o( the -oo&s has e,+ire&. Re(/sal to +a$ or a!!e+t %e!a/se

the -oo&s ha)e 'ot arri)e& is 'ot &isho'or4 the %a'5 #/st 'oti($ its tra's(eror o( the re(/sal %/t 'ee& 'ot +rese't the &ra(t a-ai' /'til it is i'str/!te& to &o so or lear's o( the arri)al o( the -oo&s. 8-90.. RESPONSI@ILITG O> PRESENTING @ANF >OR =OCUEENTS AN= GOO=S4 REPORT O> REASONS >OR =ISDONOR4 RE>EREE IN CASE O> NEE=. U'less other1ise i'str/!te& a'& e,!e+t as +ro)i&e& i' Arti!le 92 a %a'5 +rese'ti'- a &o!/#e'tar$ &ra(t0 (1) #/st &eli)er the &o!/#e'ts to the &ra1ee o' a!!e+ta'!e o( the &ra(t i( it is +a$a%le #ore tha' three &a$s a(ter +rese't#e't4 other1ise2 o'l$ o' +a$#e't4 a'& (*) /+o' &isho'or2 either i' the !ase o( +rese't#e't (or a!!e+ta'!e or +rese't#e't (or +a$#e't2 #a$ see5 a'& (ollo1 i'str/!tio's (ro# a'$ re(eree i' !ase o( 'ee& &esi-'ate& i' the &ra(t or2 i( the +rese'ti'- %a'5 &oes 'ot !hoose to /tili3e the re(ereeBs ser)i!es2 it #/st /se &ili-e'!e a'& -oo& (aith to as!ertai' the reaso' (or &isho'or2 #/st 'oti($ its tra's(eror o( the &isho'or a'& o( the res/lts o( its e((ort to as!ertai' the reaso's there(or2 a'& #/st re7/est i'str/!tio's. Do1e)er the +rese'ti'- %a'5 is /'&er 'o o%li-atio' 1ith res+e!t to -oo&s re+rese'te& %$ the &o!/#e'ts e,!e+t to (ollo1 a'$ reaso'a%le i'str/!tio's seaso'a%l$ re!ei)e&4 it has a ri-ht to rei#%/rse#e't (or a'$ e,+e'se i'!/rre& i' (ollo1i'- i'str/!tio's a'& to +re+a$#e't o( or i'&e#'it$ (or those e,+e'ses. 8-908. PRIVILEGE O> PRESENTING @ANF TO =EAL CITD GOO=S4 SECURITG INTEREST >OR EMPENSES. (a) A +rese'ti'- %a'5 that2 (ollo1i'- the &isho'or o( a &o!/#e'tar$ &ra(t2 has seaso'a%l$ re7/este& i'str/!tio's %/t &oes 'ot re!ei)e the# 1ithi' a reaso'a%le ti#e #a$ store2 sell2 or other1ise &eal 1ith the -oo&s i' a'$ reaso'a%le #a''er. (%) >or its reaso'a%le e,+e'ses i'!/rre& %$ a!tio' /'&er s/%se!tio' (a)2 the +rese'ti'%a'5 has a lie' /+o' the -oo&s or their +ro!ee&s2 1hi!h #a$ %e (ore!lose& i' the sa#e #a''er as a' /'+ai& sellerBs lie'. U.C.C. - ARTICLE 8A - >UN=S TRANS>ER PART 1. SU@HECT EATTER AN= =E>INITIONS 8A-101. SDORT TITLE. This Arti!le #a$ %e !ite& as U'i(or# Co##er!ial Co&e-->/'&s Tra's(ers. 8A-10*. SU@HECT EATTER.

E,!e+t as other1ise +ro)i&e& i' Se!tio' 8A-10<2 this Arti!le a++lies to (/'&s tra's(ers &e(i'e& i' Se!tio' 8A-108. 8A-10.. PAGEENT OR=ER - =E>INITIONS. (a) I' this Arti!le0 (1) ?Pa$#e't or&er? #ea's a' i'str/!tio' o( a se'&er to a re!ei)i'- %a'52 tra's#itte& orall$2 ele!tro'i!all$2 or i' 1riti'-2 to +a$2 or to !a/se a'other %a'5 to +a$2 a (i,e& or &eter#i'a%le a#o/'t o( #o'e$ to a %e'e(i!iar$ i(0 (i) the i'str/!tio' &oes 'ot state a !o'&itio' to +a$#e't to the %e'e(i!iar$ other tha' ti#e o( +a$#e't2 (ii) the re!ei)i'- %a'5 is to %e rei#%/rse& %$ &e%iti'- a' a!!o/'t o(2 or other1ise re!ei)i'- +a$#e't (ro#2 the se'&er2 a'& (iii) the i'str/!tio' is tra's#itte& %$ the se'&er &ire!tl$ to the re!ei)i'- %a'5 or to a' a-e't2 (/'&s-tra's(er s$ste#2 or !o##/'i!atio' s$ste# (or tra's#ittal to the re!ei)i'%a'5. (*) ?@e'e(i!iar$? #ea's the +erso' to %e +ai& %$ the %e'e(i!iar$Bs %a'5. (.) ?@e'e(i!iar$Bs %a'5? #ea's the %a'5 i&e'ti(ie& i' a +a$#e't or&er i' 1hi!h a' a!!o/'t o( the %e'e(i!iar$ is to %e !re&ite& +/rs/a't to the or&er or 1hi!h other1ise is to #a5e +a$#e't to the %e'e(i!iar$ i( the or&er &oes 'ot +ro)i&e (or +a$#e't to a' a!!o/'t. (8) ?Re!ei)i'- %a'5? #ea's the %a'5 to 1hi!h the se'&erBs i'str/!tio' is a&&resse&. (9) ?Se'&er? #ea's the +erso' -i)i'- the i'str/!tio' to the re!ei)i'- %a'5. (%) I( a' i'str/!tio' !o#+l$i'- 1ith s/%se!tio' (a)(1) is to #a5e #ore tha' o'e +a$#e't to a %e'e(i!iar$2 the i'str/!tio' is a se+arate +a$#e't or&er 1ith res+e!t to ea!h +a$#e't. (!) A +a$#e't or&er is iss/e& 1he' it is se't to the re!ei)i'- %a'5. 8A-108. >UN=S TRANS>ER - =E>INITIONS. I' this Arti!le0

(a) ?>/'&s tra's(er? #ea's the series o( tra'sa!tio's2 %e-i''i'- 1ith the ori-i'atorBs +a$#e't or&er2 #a&e (or the +/r+ose o( #a5i'- +a$#e't to the %e'e(i!iar$ o( the or&er. The ter# i'!l/&es a'$ +a$#e't or&er iss/e& %$ the ori-i'atorBs %a'5 or a' i'ter#e&iar$ %a'5 i'te'&e& to !arr$ o/t the ori-i'atorBs +a$#e't or&er. A (/'&s tra's(er is !o#+lete& %$ a!!e+ta'!e %$ the %e'e(i!iar$Bs %a'5 o( a +a$#e't or&er (or the %e'e(it o( the %e'e(i!iar$ o( the ori-i'atorBs +a$#e't or&er. (%) ?I'ter#e&iar$ %a'5? #ea's a re!ei)i'- %a'5 other tha' the ori-i'atorBs %a'5 or the %e'e(i!iar$Bs %a'5. (!) ?Ori-i'ator? #ea's the se'&er o( the (irst +a$#e't or&er i' a (/'&s tra's(er. (&) ?Ori-i'atorBs %a'5? #ea's (i) the re!ei)i'- %a'5 to 1hi!h the +a$#e't or&er o( the ori-i'ator is iss/e& i( the ori-i'ator is 'ot a %a'52 or (ii) the ori-i'ator i( the ori-i'ator is a %a'5. 8A-109. OTDER =E>INITIONS. (a) I' this Arti!le0 (1) ?A/thori3e& a!!o/'t? #ea's a &e+osit a!!o/'t o( a !/sto#er i' a %a'5 &esi-'ate& %$ the !/sto#er as a so/r!e o( +a$#e't o( +a$#e't or&ers iss/e& %$ the !/sto#er to the %a'5. I( a !/sto#er &oes 'ot so &esi-'ate a' a!!o/'t2 a'$ a!!o/'t o( the !/sto#er is a' a/thori3e& a!!o/'t i( +a$#e't o( a +a$#e't or&er (ro# that a!!o/'t is 'ot i'!o'siste't 1ith a restri!tio' o' the /se o( that a!!o/'t. (*) ?@a'5? #ea's a +erso' e'-a-e& i' the %/si'ess o( %a'5i'- a'& i'!l/&es a sa)i'-s %a'52 sa)i'-s a'& loa' asso!iatio'2 !re&it /'io'2 a'& tr/st !o#+a'$. A %ra'!h or se+arate o((i!e o( a %a'5 is a se+arate %a'5 (or +/r+oses o( this Arti!le. (.) ?C/sto#er? #ea's a +erso'2 i'!l/&i'- a %a'52 ha)i'- a' a!!o/'t 1ith a %a'5 or (ro# 1ho# a %a'5 has a-ree& to re!ei)e +a$#e't or&ers. (8) ?>/'&s-tra's(er %/si'ess &a$? o( a re!ei)i'- %a'5 #ea's the +art o( a &a$ &/ri'1hi!h the re!ei)i'- %a'5 is o+e' (or the re!ei+t2 +ro!essi'-2 a'& tra's#ittal o( +a$#e't or&ers a'& !a'!ellatio's a'& a#e'&#e'ts o( +a$#e't or&ers. (9) ?>/'&s-tra's(er s$ste#? #ea's a 1ire tra's(er 'et1or52 a/to#ate& !leari'- ho/se2 or other !o##/'i!atio' s$ste# o( a !leari'- ho/se or other asso!iatio' o( %a'5s thro/-h 1hi!h a +a$#e't or&er %$ a %a'5 #a$ %e tra's#itte& to the %a'5 to 1hi!h the or&er is a&&resse&. (:) reser)e&"

(;) ?Pro)e? 1ith res+e!t to a (a!t #ea's to #eet the %/r&e' o( esta%lishi'- the (a!t (Se!tio' 1-*01(%)(<)). (%) Other &e(i'itio's a++l$i'- to this Arti!le a'& the se!tio's i' 1hi!h the$ a++ear are0 ?A!!e+ta'!e? ?@e'e(i!iar$? ?@e'e(i!iar$Bs %a'5? ?E,e!/te&? ?E,e!/tio' &ate? ?>/'&s tra's(er? ?>/'&s-tra's(er s$ste# r/le? ?I'ter#e&iar$ %a'5? ?Ori-i'ator? ?Ori-i'atorBs %a'5? Se!tio' 8A-*0A Se!tio' 8A-10. Se!tio' 8A-10. Se!tio' 8A-.01 Se!tio' 8A-.01 Se!tio' 8A-108 Se!tio' 8A-901 Se!tio' 8A-108 Se!tio' 8A-108 Se!tio' 8A-108 Se!tio' 8A-809 Se!tio' 8A-80: Se!tio' 8A-80.

?Pa$#e't %$ %e'e(i!iar$Bs %a'5 to %e'e(i!iar$? ?Pa$#e't %$ ori-i'ator to%e'e(i!iar$? ?Pa$#e't %$ se'&er to re!ei)i'- %a'5? ?Pa$#e't &ate? ?Pa$#e't or&er? ?Re!ei)i'- %a'5? ?Se!/rit$ +ro!e&/re? ?Se'&er? Se!tio' 8A-801 Se!tio' 8A-10. Se!tio' 8A-10. Se!tio' 8A-*01 Se!tio' 8A-10.

(!) The (ollo1i'- &e(i'itio's i' Arti!le 8 a++l$ to this Arti!le0 ?Cleari'- ho/se? Se!tio' 8-108

?Ite#? ?S/s+e'&s +a$#e'ts?

Se!tio' 8-108 Se!tio' 8-108

(&) I' a&&itio' Arti!le 1 !o'tai's -e'eral &e(i'itio's a'& +ri'!i+les o( !o'str/!tio' a'& i'ter+retatio' a++li!a%le thro/-ho/t this Arti!le. 8A-10:. TIEE PAGEENT OR=ER IS RECEIVE=. (a) The ti#e o( re!ei+t o( a +a$#e't or&er or !o##/'i!atio' !a'!elli'- or a#e'&i'- a +a$#e't or&er is &eter#i'e& %$ the r/les a++li!a%le to re!ei+t o( a 'oti!e state& i' Se!tio' 1-*0*. A re!ei)i'- %a'5 #a$ (i, a !/t-o(( ti#e or ti#es o' a (/'&s-tra's(er %/si'ess &a$ (or the re!ei+t a'& +ro!essi'- o( +a$#e't or&ers a'& !o##/'i!atio's !a'!elli'- or a#e'&i'- +a$#e't or&ers. =i((ere't !/t-o(( ti#es #a$ a++l$ to +a$#e't or&ers2 !a'!ellatio's2 or a#e'&#e'ts2 or to &i((ere't !ate-ories o( +a$#e't or&ers2 !a'!ellatio's2 or a#e'&#e'ts. A !/t-o(( ti#e #a$ a++l$ to se'&ers -e'erall$ or &i((ere't !/t-o(( ti#es #a$ a++l$ to &i((ere't se'&ers or !ate-ories o( +a$#e't or&ers. I( a +a$#e't or&er or !o##/'i!atio' !a'!elli'- or a#e'&i'- a +a$#e't or&er is re!ei)e& a(ter the !lose o( a (/'&s-tra's(er %/si'ess &a$ or a(ter the a++ro+riate !/t-o(( ti#e o' a (/'&s-tra's(er %/si'ess &a$2 the re!ei)i'- %a'5 #a$ treat the +a$#e't or&er or !o##/'i!atio' as re!ei)e& at the o+e'i'- o( the 'e,t (/'&s-tra's(er %/si'ess &a$. (%) I( this Arti!le re(ers to a' e,e!/tio' &ate or +a$#e't &ate or states a &a$ o' 1hi!h a re!ei)i'- %a'5 is re7/ire& to ta5e a!tio'2 a'& the &ate or &a$ &oes 'ot (all o' a (/'&stra's(er %/si'ess &a$2 the 'e,t &a$ that is a (/'&s-tra's(er %/si'ess &a$ is treate& as the &ate or &a$ state&2 /'less the !o'trar$ is state& i' this Arti!le. 8A-10;. >E=ERAL RESERVE REGULATIONS AN= OPERATING CIRCULARS. Re-/latio's o( the @oar& o( Go)er'ors o( the >e&eral Reser)e S$ste# a'& o+erati'!ir!/lars o( the >e&eral Reser)e @a'5s s/+erse&e a'$ i'!o'siste't +ro)isio' o( this Arti!le to the e,te't o( the i'!o'siste'!$. 8A-10<. EMCLUSION O> CONSUEER TRANSACTIONS GOVERNE= @G >E=ERAL LAC. This Arti!le &oes 'ot a++l$ to a (/'&s tra's(er a'$ +art o( 1hi!h is -o)er'e& %$ the Ele!tro'i! >/'& Tra's(er A!t o( 1A;< (Title MM2 P/%li! La1 A9-:.02 A* Stat. .;*<2 19 U.S.C. 1:A. et se7.) as a#e'&e& (ro# ti#e to ti#e. PART *. ISSUE AN= ACCEPTANCE O> PAGEENT OR=ER 8A-*01. SECURITG PROCE=URE.

?Se!/rit$ +ro!e&/re? #ea's a +ro!e&/re esta%lishe& %$ a-ree#e't o( a !/sto#er a'& a re!ei)i'- %a'5 (or the +/r+ose o( (i) )eri($i'- that a +a$#e't or&er or !o##/'i!atio' a#e'&i'- or !a'!elli'- a +a$#e't or&er is that o( the !/sto#er2 or (ii) &ete!ti'- error i' the tra's#issio' or the !o'te't o( the +a$#e't or&er or !o##/'i!atio'. A se!/rit$ +ro!e&/re #a$ re7/ire the /se o( al-orith#s or other !o&es2 i&e'ti($i'- 1or&s or '/#%ers2 e'!r$+tio'2 !all%a!5 +ro!e&/res2 or si#ilar se!/rit$ &e)i!es. Co#+ariso' o( a si-'at/re o' a +a$#e't or&er or !o##/'i!atio' 1ith a' a/thori3e& s+e!i#e' si-'at/re o( the !/sto#er is 'ot %$ itsel( a se!/rit$ +ro!e&/re. 8A-*0*. AUTDORILE= AN= VERI>IE= PAGEENT OR=ERS. (a) A +a$#e't or&er re!ei)e& %$ the re!ei)i'- %a'5 is the a/thori3e& or&er o( the +erso' i&e'ti(ie& as se'&er i( that +erso' a/thori3e& the or&er or is other1ise %o/'& %$ it /'&er the la1 o( a-e'!$. (%) I( a %a'5 a'& its !/sto#er ha)e a-ree& that the a/the'ti!it$ o( +a$#e't or&ers iss/e& to the %a'5 i' the 'a#e o( the !/sto#er as se'&er 1ill %e )eri(ie& +/rs/a't to a se!/rit$ +ro!e&/re2 a +a$#e't or&er re!ei)e& %$ the re!ei)i'- %a'5 is e((e!ti)e as the or&er o( the !/sto#er2 1hether or 'ot a/thori3e&2 i( (i) the se!/rit$ +ro!e&/re is a !o##er!iall$ reaso'a%le #etho& o( +ro)i&i'- se!/rit$ a-ai'st /'a/thori3e& +a$#e't or&ers2 a'& (ii) the %a'5 +ro)es that it a!!e+te& the +a$#e't or&er i' -oo& (aith a'& i' !o#+lia'!e 1ith the se!/rit$ +ro!e&/re a'& a'$ 1ritte' a-ree#e't or i'str/!tio' o( the !/sto#er restri!ti'- a!!e+ta'!e o( +a$#e't or&ers iss/e& i' the 'a#e o( the !/sto#er. The %a'5 is 'ot re7/ire& to (ollo1 a' i'str/!tio' that )iolates a 1ritte' a-ree#e't 1ith the !/sto#er or 'oti!e o( 1hi!h is 'ot re!ei)e& at a ti#e a'& i' a #a''er a((or&i'- the %a'5 a reaso'a%le o++ort/'it$ to a!t o' it %e(ore the +a$#e't or&er is a!!e+te&. (!) Co##er!ial reaso'a%le'ess o( a se!/rit$ +ro!e&/re is a 7/estio' o( la1 to %e &eter#i'e& %$ !o'si&eri'- the 1ishes o( the !/sto#er e,+resse& to the %a'52 the !ir!/#sta'!es o( the !/sto#er 5'o1' to the %a'52 i'!l/&i'- the si3e2 t$+e2 a'& (re7/e'!$ o( +a$#e't or&ers 'or#all$ iss/e& %$ the !/sto#er to the %a'52 alter'ati)e se!/rit$ +ro!e&/res o((ere& to the !/sto#er2 a'& se!/rit$ +ro!e&/res i' -e'eral /se %$ !/sto#ers a'& re!ei)i'- %a'5s si#ilarl$ sit/ate&. A se!/rit$ +ro!e&/re is &ee#e& to %e !o##er!iall$ reaso'a%le i( (i) the se!/rit$ +ro!e&/re 1as !hose' %$ the !/sto#er a(ter the %a'5 o((ere&2 a'& the !/sto#er re(/se&2 a se!/rit$ +ro!e&/re that 1as !o##er!iall$ reaso'a%le (or that !/sto#er2 a'& (ii) the !/sto#er e,+ressl$ a-ree& i' 1riti'- to %e %o/'& %$ a'$ +a$#e't or&er2 1hether or 'ot a/thori3e&2 iss/e& i' its 'a#e a'& a!!e+te& %$ the %a'5 i' !o#+lia'!e 1ith the se!/rit$ +ro!e&/re !hose' %$ the !/sto#er. (&) The ter# ?se'&er? i' this Arti!le i'!l/&es the !/sto#er i' 1hose 'a#e a +a$#e't or&er is iss/e& i( the or&er is the a/thori3e& or&er o( the !/sto#er /'&er s/%se!tio' (a)2 or it is e((e!ti)e as the or&er o( the !/sto#er /'&er s/%se!tio' (%).

(e) This se!tio' a++lies to a#e'&#e'ts a'& !a'!ellatio's o( +a$#e't or&ers to the sa#e e,te't it a++lies to +a$#e't or&ers. (() E,!e+t as +ro)i&e& i' this se!tio' a'& i' Se!tio' 8A-*0.(a)(1)2 ri-hts a'& o%li-atio's arisi'- /'&er this se!tio' or Se!tio' 8A-*0. #a$ 'ot %e )arie& %$ a-ree#e't. 8A-*0.. UNEN>ORCEA@ILITG O> CERTAIN VERI>IE= PAGEENT OR=ERS. (a) I( a' a!!e+te& +a$#e't or&er is 'ot2 /'&er Se!tio' 8A-*0*(a)2 a' a/thori3e& or&er o( a !/sto#er i&e'ti(ie& as se'&er2 %/t is e((e!ti)e as a' or&er o( the !/sto#er +/rs/a't to Se!tio' 8A-*0*(%)2 the (ollo1i'- r/les a++l$0 (1) @$ e,+ress 1ritte' a-ree#e't2 the re!ei)i'- %a'5 #a$ li#it the e,te't to 1hi!h it is e'title& to e'(or!e or retai' +a$#e't o( the +a$#e't or&er. (*) The re!ei)i'- %a'5 is 'ot e'title& to e'(or!e or retai' +a$#e't o( the +a$#e't or&er i( the !/sto#er +ro)es that the or&er 1as 'ot !a/se&2 &ire!tl$ or i'&ire!tl$2 %$ a +erso' (i) e'tr/ste& at a'$ ti#e 1ith &/ties to a!t (or the !/sto#er 1ith res+e!t to +a$#e't or&ers or the se!/rit$ +ro!e&/re2 or (ii) 1ho o%tai'e& a!!ess to tra's#itti'(a!ilities o( the !/sto#er or 1ho o%tai'e&2 (ro# a so/r!e !o'trolle& %$ the !/sto#er a'& 1itho/t a/thorit$ o( the re!ei)i'- %a'52 i'(or#atio' (a!ilitati'- %rea!h o( the se!/rit$ +ro!e&/re2 re-ar&less o( ho1 the i'(or#atio' 1as o%tai'e& or 1hether the !/sto#er 1as at (a/lt. I'(or#atio' i'!l/&es a'$ a!!ess &e)i!e2 !o#+/ter so(t1are2 or the li5e. (%) This se!tio' a++lies to a#e'&#e'ts o( +a$#e't or&ers to the sa#e e,te't it a++lies to +a$#e't or&ers. 8A-*08. RE>UN= O> PAGEENT AN= =UTG O> CUSTOEER TO REPORT CITD RESPECT TO UNAUTDORILE= PAGEENT OR=ER. (a) I( a re!ei)i'- %a'5 a!!e+ts a +a$#e't or&er iss/e& i' the 'a#e o( its !/sto#er as se'&er 1hi!h is (i) 'ot a/thori3e& a'& 'ot e((e!ti)e as the or&er o( the !/sto#er /'&er Se!tio' 8A-*0*2 or (ii) 'ot e'(or!ea%le2 i' 1hole or i' +art2 a-ai'st the !/sto#er /'&er Se!tio' 8A-*0.2 the %a'5 shall re(/'& a'$ +a$#e't o( the +a$#e't or&er re!ei)e& (ro# the !/sto#er to the e,te't the %a'5 is 'ot e'title& to e'(or!e +a$#e't a'& shall +a$ i'terest o' the re(/'&a%le a#o/'t !al!/late& (ro# the &ate the %a'5 re!ei)e& +a$#e't to the &ate o( the re(/'&. Do1e)er2 the !/sto#er is 'ot e'title& to i'terest (ro# the %a'5 o' the a#o/'t to %e re(/'&e& i( the !/sto#er (ails to e,er!ise or&i'ar$ !are to &eter#i'e that the or&er 1as 'ot a/thori3e& %$ the !/sto#er a'& to 'oti($ the %a'5 o( the rele)a't (a!ts 1ithi' a reaso'a%le ti#e 'ot e,!ee&i'- A0 &a$s a(ter the &ate the !/sto#er re!ei)e& 'oti(i!atio' (ro# the %a'5 that the or&er 1as a!!e+te& or that the !/sto#erBs a!!o/'t 1as &e%ite& 1ith res+e!t to the or&er. The %a'5 is 'ot e'title& to

a'$ re!o)er$ (ro# the !/sto#er o' a!!o/'t o( a (ail/re %$ the !/sto#er to -i)e 'oti(i!atio' as state& i' this se!tio'. (%) Reaso'a%le ti#e /'&er s/%se!tio' (a) #a$ %e (i,e& %$ a-ree#e't as state& i' Se!tio' 1-*08(1)2 %/t the o%li-atio' o( a re!ei)i'- %a'5 to re(/'& +a$#e't as state& i' s/%se!tio' (a) #a$ 'ot other1ise %e )arie& %$ a-ree#e't. 8A-*09. ERRONEOUS PAGEENT OR=ERS. (a) I( a' a!!e+te& +a$#e't or&er 1as tra's#itte& +/rs/a't to a se!/rit$ +ro!e&/re (or the &ete!tio' o( error a'& the +a$#e't or&er (i) erro'eo/sl$ i'str/!te& +a$#e't to a %e'e(i!iar$ 'ot i'te'&e& %$ the se'&er2 (ii) erro'eo/sl$ i'str/!te& +a$#e't i' a' a#o/'t -reater tha' the a#o/'t i'te'&e& %$ the se'&er2 or (iii) 1as a' erro'eo/sl$ tra's#itte& &/+li!ate o( a +a$#e't or&er +re)io/sl$ se't %$ the se'&er2 the (ollo1i'r/les a++l$0 (1) I( the se'&er +ro)es that the se'&er or a +erso' a!ti'- o' %ehal( o( the se'&er +/rs/a't to Se!tio' 8A-*0: !o#+lie& 1ith the se!/rit$ +ro!e&/re a'& that the error 1o/l& ha)e %ee' &ete!te& i( the re!ei)i'- %a'5 ha& also !o#+lie&2 the se'&er is 'ot o%li-e& to +a$ the or&er to the e,te't state& i' +ara-ra+hs (*) a'& (.). (*) I( the (/'&s tra's(er is !o#+lete& o' the %asis o( a' erro'eo/s +a$#e't or&er &es!ri%e& i' !la/se (i) or (iii) o( s/%se!tio' (a)2 the se'&er is 'ot o%li-e& to +a$ the or&er a'& the re!ei)i'- %a'5 is e'title& to re!o)er (ro# the %e'e(i!iar$ a'$ a#o/'t +ai& to the %e'e(i!iar$ to the e,te't allo1e& %$ the la1 -o)er'i'- #ista5e a'& restit/tio'. (.) I( the (/'&s tra's(er is !o#+lete& o' the %asis o( a +a$#e't or&er &es!ri%e& i' !la/se (ii) o( s/%se!tio' (a)2 the se'&er is 'ot o%li-e& to +a$ the or&er to the e,te't the a#o/'t re!ei)e& %$ the %e'e(i!iar$ is -reater tha' the a#o/'t i'te'&e& %$ the se'&er. I' that !ase2 the re!ei)i'- %a'5 is e'title& to re!o)er (ro# the %e'e(i!iar$ the e,!ess a#o/'t re!ei)e& to the e,te't allo1e& %$ the la1 -o)er'i'- #ista5e a'& restit/tio'. (%) I( (i) the se'&er o( a' erro'eo/s +a$#e't or&er &es!ri%e& i' s/%se!tio' (a) is 'ot o%li-e& to +a$ all or +art o( the or&er2 a'& (ii) the se'&er re!ei)es 'oti(i!atio' (ro# the re!ei)i'- %a'5 that the or&er 1as a!!e+te& %$ the %a'5 or that the se'&erBs a!!o/'t 1as &e%ite& 1ith res+e!t to the or&er2 the se'&er has a &/t$ to e,er!ise or&i'ar$ !are2 o' the %asis o( i'(or#atio' a)aila%le to the se'&er2 to &is!o)er the error 1ith res+e!t to the or&er a'& to a&)ise the %a'5 o( the rele)a't (a!ts 1ithi' a reaso'a%le ti#e2 'ot e,!ee&i'- A0 &a$s2 a(ter the %a'5Bs 'oti(i!atio' 1as re!ei)e& %$ the se'&er. I( the %a'5 +ro)es that the se'&er (aile& to +er(or# that &/t$2 the se'&er is lia%le to the %a'5 (or the loss the %a'5 +ro)es it i'!/rre& as a res/lt o( the (ail/re2 %/t the lia%ilit$ o( the se'&er #a$ 'ot e,!ee& the a#o/'t o( the se'&erBs or&er.

(!) This se!tio' a++lies to a#e'&#e'ts to +a$#e't or&ers to the sa#e e,te't it a++lies to +a$#e't or&ers. 8A-*0:. TRANSEISSION O> PAGEENT OR=ER TDROUGD >UN=S-TRANS>ER OR OTDER COEEUNICATION SGSTEE. (a) I( a +a$#e't or&er a&&resse& to a re!ei)i'- %a'5 is tra's#itte& to a (/'&s-tra's(er s$ste# or other thir&-+art$ !o##/'i!atio' s$ste# (or tra's#ittal to the %a'52 the s$ste# is &ee#e& to %e a' a-e't o( the se'&er (or the +/r+ose o( tra's#itti'- the +a$#e't or&er to the %a'5. I( there is a &is!re+a'!$ %et1ee' the ter#s o( the +a$#e't or&er tra's#itte& to the s$ste# a'& the ter#s o( the +a$#e't or&er tra's#itte& %$ the s$ste# to the %a'52 the ter#s o( the +a$#e't or&er o( the se'&er are those tra's#itte& %$ the s$ste#. This se!tio' &oes 'ot a++l$ to a (/'&s-tra's(er s$ste# o( the >e&eral Reser)e @a'5s. (%) This se!tio' a++lies to !a'!ellatio's a'& a#e'&#e'ts o( +a$#e't or&ers to the sa#e e,te't it a++lies to +a$#e't or&ers. 8A-*0;. EIS=ESCRIPTION O> @ENE>ICIARG. (a) S/%6e!t to s/%se!tio' (%)2 i(2 i' a +a$#e't or&er re!ei)e& %$ the %e'e(i!iar$Bs %a'52 the 'a#e2 %a'5 a!!o/'t '/#%er2 or other i&e'ti(i!atio' o( the %e'e(i!iar$ re(ers to a 'o'e,iste't or /'i&e'ti(ia%le +erso' or a!!o/'t2 'o +erso' has ri-hts as a %e'e(i!iar$ o( the or&er a'& a!!e+ta'!e o( the or&er !a''ot o!!/r. (%) I( a +a$#e't or&er re!ei)e& %$ the %e'e(i!iar$Bs %a'5 i&e'ti(ies the %e'e(i!iar$ %oth %$ 'a#e a'& %$ a' i&e'ti($i'- or %a'5 a!!o/'t '/#%er a'& the 'a#e a'& '/#%er i&e'ti($ &i((ere't +erso's2 the (ollo1i'- r/les a++l$0 (1) E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (!)2 i( the %e'e(i!iar$Bs %a'5 &oes 'ot 5'o1 that the 'a#e a'& '/#%er re(er to &i((ere't +erso's2 it #a$ rel$ o' the '/#%er as the +ro+er i&e'ti(i!atio' o( the %e'e(i!iar$ o( the or&er. The %e'e(i!iar$Bs %a'5 'ee& 'ot &eter#i'e 1hether the 'a#e a'& '/#%er re(er to the sa#e +erso'. (*) I( the %e'e(i!iar$Bs %a'5 +a$s the +erso' i&e'ti(ie& %$ 'a#e or 5'o1s that the 'a#e a'& '/#%er i&e'ti($ &i((ere't +erso's2 'o +erso' has ri-hts as %e'e(i!iar$ e,!e+t the +erso' +ai& %$ the %e'e(i!iar$Bs %a'5 i( that +erso' 1as e'title& to re!ei)e +a$#e't (ro# the ori-i'ator o( the (/'&s tra's(er. I( 'o +erso' has ri-hts as %e'e(i!iar$2 a!!e+ta'!e o( the or&er !a''ot o!!/r. (!) I( (i) a +a$#e't or&er &es!ri%e& i' s/%se!tio' (%) is a!!e+te&2 (ii) the ori-i'atorBs +a$#e't or&er &es!ri%e& the %e'e(i!iar$ i'!o'siste'tl$ %$ 'a#e a'& '/#%er2 a'& (iii) the %e'e(i!iar$Bs %a'5 +a$s the +erso' i&e'ti(ie& %$ '/#%er as +er#itte& %$ s/%se!tio' (%)(1)2 the (ollo1i'- r/les a++l$0

(1) I( the ori-i'ator is a %a'52 the ori-i'ator is o%li-e& to +a$ its or&er. (*) I( the ori-i'ator is 'ot a %a'5 a'& +ro)es that the +erso' i&e'ti(ie& %$ '/#%er 1as 'ot e'title& to re!ei)e +a$#e't (ro# the ori-i'ator2 the ori-i'ator is 'ot o%li-e& to +a$ its or&er /'less the ori-i'atorBs %a'5 +ro)es that the ori-i'ator2 %e(ore a!!e+ta'!e o( the ori-i'atorBs or&er2 ha& 'oti!e that +a$#e't o( a +a$#e't or&er iss/e& %$ the ori-i'ator #i-ht %e #a&e %$ the %e'e(i!iar$Bs %a'5 o' the %asis o( a' i&e'ti($i'- or %a'5 a!!o/'t '/#%er e)e' i( it i&e'ti(ies a +erso' &i((ere't (ro# the 'a#e& %e'e(i!iar$. Proo( o( 'oti!e #a$ %e #a&e %$ a'$ a&#issi%le e)i&e'!e. The ori-i'atorBs %a'5 satis(ies the %/r&e' o( +roo( i( it +ro)es that the ori-i'ator2 %e(ore the +a$#e't or&er 1as a!!e+te&2 si-'e& a 1riti'- stati'- the i'(or#atio' to 1hi!h the 'oti!e relates. (&) I' a !ase -o)er'e& %$ s/%se!tio' (%)(1)2 i( the %e'e(i!iar$Bs %a'5 ri-ht(/ll$ +a$s the +erso' i&e'ti(ie& %$ '/#%er a'& that +erso' 1as 'ot e'title& to re!ei)e +a$#e't (ro# the ori-i'ator2 the a#o/'t +ai& #a$ %e re!o)ere& (ro# that +erso' to the e,te't allo1e& %$ the la1 -o)er'i'- #ista5e a'& restit/tio' as (ollo1s0 (1) I( the ori-i'ator is o%li-e& to +a$ its +a$#e't or&er as state& i' s/%se!tio' (!)2 the ori-i'ator has the ri-ht to re!o)er. (*) I( the ori-i'ator is 'ot a %a'5 a'& is 'ot o%li-e& to +a$ its +a$#e't or&er2 the ori-i'atorBs %a'5 has the ri-ht to re!o)er. 8A-*0<. EIS=ESCRIPTION O> INTEREE=IARG @ANF OR @ENE>ICIARGBS @ANF. (a) This s/%se!tio' a++lies to a +a$#e't or&er i&e'ti($i'- a' i'ter#e&iar$ %a'5 or the %e'e(i!iar$Bs %a'5 o'l$ %$ a' i&e'ti($i'- '/#%er. (1) The re!ei)i'- %a'5 #a$ rel$ o' the '/#%er as the +ro+er i&e'ti(i!atio' o( the i'ter#e&iar$ or %e'e(i!iar$Bs %a'5 a'& 'ee& 'ot &eter#i'e 1hether the '/#%er i&e'ti(ies a %a'5. (*) The se'&er is o%li-e& to !o#+e'sate the re!ei)i'- %a'5 (or a'$ loss a'& e,+e'ses i'!/rre& %$ the re!ei)i'- %a'5 as a res/lt o( its relia'!e o' the '/#%er i' e,e!/ti'- or atte#+ti'- to e,e!/te the or&er. (%) This s/%se!tio' a++lies to a +a$#e't or&er i&e'ti($i'- a' i'ter#e&iar$ %a'5 or the %e'e(i!iar$Bs %a'5 %oth %$ 'a#e a'& a' i&e'ti($i'- '/#%er i( the 'a#e a'& '/#%er i&e'ti($ &i((ere't +erso's. (1) I( the se'&er is a %a'52 the re!ei)i'- %a'5 #a$ rel$ o' the '/#%er as the +ro+er i&e'ti(i!atio' o( the i'ter#e&iar$ or %e'e(i!iar$Bs %a'5 i( the re!ei)i'- %a'52 1he' it e,e!/tes the se'&erBs or&er2 &oes 'ot 5'o1 that the 'a#e a'& '/#%er i&e'ti($ &i((ere't

+erso's. The re!ei)i'- %a'5 'ee& 'ot &eter#i'e 1hether the 'a#e a'& '/#%er re(er to the sa#e +erso' or 1hether the '/#%er re(ers to a %a'5. The se'&er is o%li-e& to !o#+e'sate the re!ei)i'- %a'5 (or a'$ loss a'& e,+e'ses i'!/rre& %$ the re!ei)i'- %a'5 as a res/lt o( its relia'!e o' the '/#%er i' e,e!/ti'- or atte#+ti'- to e,e!/te the or&er. (*) I( the se'&er is 'ot a %a'5 a'& the re!ei)i'- %a'5 +ro)es that the se'&er2 %e(ore the +a$#e't or&er 1as a!!e+te&2 ha& 'oti!e that the re!ei)i'- %a'5 #i-ht rel$ o' the '/#%er as the +ro+er i&e'ti(i!atio' o( the i'ter#e&iar$ or %e'e(i!iar$Bs %a'5 e)e' i( it i&e'ti(ies a +erso' &i((ere't (ro# the %a'5 i&e'ti(ie& %$ 'a#e2 the ri-hts a'& o%li-atio's o( the se'&er a'& the re!ei)i'- %a'5 are -o)er'e& %$ s/%se!tio' (%)(1)2 as tho/-h the se'&er 1ere a %a'5. Proo( o( 'oti!e #a$ %e #a&e %$ a'$ a&#issi%le e)i&e'!e. The re!ei)i'- %a'5 satis(ies the %/r&e' o( +roo( i( it +ro)es that the se'&er2 %e(ore the +a$#e't or&er 1as a!!e+te&2 si-'e& a 1riti'- stati'- the i'(or#atio' to 1hi!h the 'oti!e relates. (.) Re-ar&less o( 1hether the se'&er is a %a'52 the re!ei)i'- %a'5 #a$ rel$ o' the 'a#e as the +ro+er i&e'ti(i!atio' o( the i'ter#e&iar$ or %e'e(i!iar$Bs %a'5 i( the re!ei)i'- %a'52 at the ti#e it e,e!/tes the se'&erBs or&er2 &oes 'ot 5'o1 that the 'a#e a'& '/#%er i&e'ti($ &i((ere't +erso's. The re!ei)i'- %a'5 'ee& 'ot &eter#i'e 1hether the 'a#e a'& '/#%er re(er to the sa#e +erso'. (8) I( the re!ei)i'- %a'5 5'o1s that the 'a#e a'& '/#%er i&e'ti($ &i((ere't +erso's2 relia'!e o' either the 'a#e or the '/#%er i' e,e!/ti'- the se'&erBs +a$#e't or&er is a %rea!h o( the o%li-atio' state& i' Se!tio' 8A-.0*(a)(1). 8A-*0A. ACCEPTANCE O> PAGEENT OR=ER. (a) S/%6e!t to s/%se!tio' (&)2 a re!ei)i'- %a'5 other tha' the %e'e(i!iar$Bs %a'5 a!!e+ts a +a$#e't or&er 1he' it e,e!/tes the or&er. (%) S/%6e!t to s/%se!tio's (!) a'& (&)2 a %e'e(i!iar$Bs %a'5 a!!e+ts a +a$#e't or&er at the earliest o( the (ollo1i'- ti#es0 (1) 1he' the %a'5 (i) +a$s the %e'e(i!iar$ as state& i' Se!tio' 8A-809(a) or 8A-809(%)2 or (ii) 'oti(ies the %e'e(i!iar$ o( re!ei+t o( the or&er or that the a!!o/'t o( the %e'e(i!iar$ has %ee' !re&ite& 1ith res+e!t to the or&er /'less the 'oti!e i'&i!ates that the %a'5 is re6e!ti'- the or&er or that (/'&s 1ith res+e!t to the or&er #a$ 'ot %e 1ith&ra1' or /se& /'til re!ei+t o( +a$#e't (ro# the se'&er o( the or&er4 (*) 1he' the %a'5 re!ei)es +a$#e't o( the e'tire a#o/'t o( the se'&erBs or&er +/rs/a't to Se!tio' 8A-80.(a)(1) or 8A-80.(a)(*)4 or (.) the o+e'i'- o( the 'e,t (/'&s-tra's(er %/si'ess &a$ o( the %a'5 (ollo1i'- the +a$#e't &ate o( the or&er i(2 at that ti#e2 the a#o/'t o( the se'&erBs or&er is (/ll$

!o)ere& %$ a 1ith&ra1a%le !re&it %ala'!e i' a' a/thori3e& a!!o/'t o( the se'&er or the %a'5 has other1ise re!ei)e& (/ll +a$#e't (ro# the se'&er2 /'less the or&er 1as re6e!te& %e(ore that ti#e or is re6e!te& 1ithi' (i) o'e ho/r a(ter that ti#e2 or (ii) o'e ho/r a(ter the o+e'i'- o( the 'e,t %/si'ess &a$ o( the se'&er (ollo1i'- the +a$#e't &ate i( that ti#e is later. I( 'oti!e o( re6e!tio' is re!ei)e& %$ the se'&er a(ter the +a$#e't &ate a'& the a/thori3e& a!!o/'t o( the se'&er &oes 'ot %ear i'terest2 the %a'5 is o%li-e& to +a$ i'terest to the se'&er o' the a#o/'t o( the or&er (or the '/#%er o( &a$s ela+si'- a(ter the +a$#e't &ate to the &a$ the se'&er re!ei)es 'oti!e or lear's that the or&er 1as 'ot a!!e+te&2 !o/'ti'- that &a$ as a' ela+se& &a$. I( the 1ith&ra1a%le !re&it %ala'!e &/ri'- that +erio& (alls %elo1 the a#o/'t o( the or&er2 the a#o/'t o( i'terest +a$a%le is re&/!e& a!!or&i'-l$. (!) A!!e+ta'!e o( a +a$#e't or&er !a''ot o!!/r %e(ore the or&er is re!ei)e& %$ the re!ei)i'- %a'5. A!!e+ta'!e &oes 'ot o!!/r /'&er s/%se!tio' (%)(*) or (%)(.) i( the %e'e(i!iar$ o( the +a$#e't or&er &oes 'ot ha)e a' a!!o/'t 1ith the re!ei)i'- %a'52 the a!!o/'t has %ee' !lose&2 or the re!ei)i'- %a'5 is 'ot +er#itte& %$ la1 to re!ei)e !re&its (or the %e'e(i!iar$Bs a!!o/'t. (&) A +a$#e't or&er iss/e& to the ori-i'atorBs %a'5 !a''ot %e a!!e+te& /'til the +a$#e't &ate i( the %a'5 is the %e'e(i!iar$Bs %a'52 or the e,e!/tio' &ate i( the %a'5 is 'ot the %e'e(i!iar$Bs %a'5. I( the ori-i'atorBs %a'5 e,e!/tes the ori-i'atorBs +a$#e't or&er %e(ore the e,e!/tio' &ate or +a$s the %e'e(i!iar$ o( the ori-i'atorBs +a$#e't or&er %e(ore the +a$#e't &ate a'& the +a$#e't or&er is s/%se7/e'tl$ !a'!ele& +/rs/a't to Se!tio' 8A-*11(%)2 the %a'5 #a$ re!o)er (ro# the %e'e(i!iar$ a'$ +a$#e't re!ei)e& to the e,te't allo1e& %$ the la1 -o)er'i'- #ista5e a'& restit/tio'. 8A-*10. REHECTION O> PAGEENT OR=ER. (a) A +a$#e't or&er is re6e!te& %$ the re!ei)i'- %a'5 %$ a 'oti!e o( re6e!tio' tra's#itte& to the se'&er orall$2 ele!tro'i!all$2 or i' 1riti'-. A 'oti!e o( re6e!tio' 'ee& 'ot /se a'$ +arti!/lar 1or&s a'& is s/((i!ie't i( it i'&i!ates that the re!ei)i'- %a'5 is re6e!ti'- the or&er or 1ill 'ot e,e!/te or +a$ the or&er. Re6e!tio' is e((e!ti)e 1he' the 'oti!e is -i)e' i( tra's#issio' is %$ a #ea's that is reaso'a%le i' the !ir!/#sta'!es. I( 'oti!e o( re6e!tio' is -i)e' %$ a #ea's that is 'ot reaso'a%le2 re6e!tio' is e((e!ti)e 1he' the 'oti!e is re!ei)e&. I( a' a-ree#e't o( the se'&er a'& re!ei)i'- %a'5 esta%lishes the #ea's to %e /se& to re6e!t a +a$#e't or&er2 (i) a'$ #ea's !o#+l$i'- 1ith the a-ree#e't is reaso'a%le a'& (ii) a'$ #ea's 'ot !o#+l$i'- is 'ot reaso'a%le /'less 'o si-'i(i!a't &ela$ i' re!ei+t o( the 'oti!e res/lte& (ro# the /se o( the 'o'!o#+l$i'#ea's. (%) This s/%se!tio' a++lies i( a re!ei)i'- %a'5 other tha' the %e'e(i!iar$Bs %a'5 (ails to e,e!/te a +a$#e't or&er &es+ite the e,iste'!e o' the e,e!/tio' &ate o( a 1ith&ra1a%le !re&it %ala'!e i' a' a/thori3e& a!!o/'t o( the se'&er s/((i!ie't to !o)er the or&er. I( the se'&er &oes 'ot re!ei)e 'oti!e o( re6e!tio' o( the or&er o' the e,e!/tio' &ate a'& the

a/thori3e& a!!o/'t o( the se'&er &oes 'ot %ear i'terest2 the %a'5 is o%li-e& to +a$ i'terest to the se'&er o' the a#o/'t o( the or&er (or the '/#%er o( &a$s ela+si'- a(ter the e,e!/tio' &ate to the earlier o( the &a$ the or&er is !a'!ele& +/rs/a't to Se!tio' 8A*11(&) or the &a$ the se'&er re!ei)es 'oti!e or lear's that the or&er 1as 'ot e,e!/te&2 !o/'ti'- the (i'al &a$ o( the +erio& as a' ela+se& &a$. I( the 1ith&ra1a%le !re&it %ala'!e &/ri'- that +erio& (alls %elo1 the a#o/'t o( the or&er2 the a#o/'t o( i'terest is re&/!e& a!!or&i'-l$. (!) I( a re!ei)i'- %a'5 s/s+e'&s +a$#e'ts2 all /'a!!e+te& +a$#e't or&ers iss/e& to it are &ee#e& re6e!te& at the ti#e the %a'5 s/s+e'&s +a$#e'ts. (&) A!!e+ta'!e o( a +a$#e't or&er +re!l/&es a later re6e!tio' o( the or&er. Re6e!tio' o( a +a$#e't or&er +re!l/&es a later a!!e+ta'!e o( the or&er. 8A-*11. CANCELLATION AN= AEEN=EENT O> PAGEENT OR=ER. (a) A !o##/'i!atio' o( the se'&er o( a +a$#e't or&er !a'!elli'- or a#e'&i'- the or&er #a$ %e tra's#itte& to the re!ei)i'- %a'5 orall$2 ele!tro'i!all$2 or i' 1riti'-. I( a se!/rit$ +ro!e&/re is i' e((e!t %et1ee' the se'&er a'& the re!ei)i'- %a'52 the !o##/'i!atio' is 'ot e((e!ti)e to !a'!el or a#e'& the or&er /'less the !o##/'i!atio' is )eri(ie& +/rs/a't to the se!/rit$ +ro!e&/re or the %a'5 a-rees to the !a'!ellatio' or a#e'&#e't. (%) S/%6e!t to s/%se!tio' (a)2 a !o##/'i!atio' %$ the se'&er !a'!elli'- or a#e'&i'- a +a$#e't or&er is e((e!ti)e to !a'!el or a#e'& the or&er i( 'oti!e o( the !o##/'i!atio' is re!ei)e& at a ti#e a'& i' a #a''er a((or&i'- the re!ei)i'- %a'5 a reaso'a%le o++ort/'it$ to a!t o' the !o##/'i!atio' %e(ore the %a'5 a!!e+ts the +a$#e't or&er. (!) A(ter a +a$#e't or&er has %ee' a!!e+te&2 !a'!ellatio' or a#e'&#e't o( the or&er is 'ot e((e!ti)e /'less the re!ei)i'- %a'5 a-rees or a (/'&s-tra's(er s$ste# r/le allo1s !a'!ellatio' or a#e'&#e't 1itho/t a-ree#e't o( the %a'5. (1) Cith res+e!t to a +a$#e't or&er a!!e+te& %$ a re!ei)i'- %a'5 other tha' the %e'e(i!iar$Bs %a'52 !a'!ellatio' or a#e'&#e't is 'ot e((e!ti)e /'less a !o'(or#i'!a'!ellatio' or a#e'&#e't o( the +a$#e't or&er iss/e& %$ the re!ei)i'- %a'5 is also #a&e. (*) Cith res+e!t to a +a$#e't or&er a!!e+te& %$ the %e'e(i!iar$Bs %a'52 !a'!ellatio' or a#e'&#e't is 'ot e((e!ti)e /'less the or&er 1as iss/e& i' e,e!/tio' o( a' /'a/thori3e& +a$#e't or&er2 or %e!a/se o( a #ista5e %$ a se'&er i' the (/'&s tra's(er 1hi!h res/lte& i' the iss/a'!e o( a +a$#e't or&er (i) that is a &/+li!ate o( a +a$#e't or&er +re)io/sl$ iss/e& %$ the se'&er2 (ii) that or&ers +a$#e't to a %e'e(i!iar$ 'ot e'title& to re!ei)e +a$#e't (ro# the ori-i'ator2 or (iii) that or&ers +a$#e't i' a' a#o/'t -reater tha' the a#o/'t the %e'e(i!iar$ 1as e'title& to re!ei)e (ro# the ori-i'ator. I( the +a$#e't or&er

is !a'!ele& or a#e'&e&2 the %e'e(i!iar$Bs %a'5 is e'title& to re!o)er (ro# the %e'e(i!iar$ a'$ a#o/'t +ai& to the %e'e(i!iar$ to the e,te't allo1e& %$ the la1 -o)er'i'- #ista5e a'& restit/tio'. (&) A' /'a!!e+te& +a$#e't or&er is !a'!ele& %$ o+eratio' o( la1 at the !lose o( the (i(th (/'&s-tra's(er %/si'ess &a$ o( the re!ei)i'- %a'5 a(ter the e,e!/tio' &ate or +a$#e't &ate o( the or&er. (e) A !a'!ele& +a$#e't or&er !a''ot %e a!!e+te&. I( a' a!!e+te& +a$#e't or&er is !a'!ele&2 the a!!e+ta'!e is '/lli(ie& a'& 'o +erso' has a'$ ri-ht or o%li-atio' %ase& o' the a!!e+ta'!e. A#e'&#e't o( a +a$#e't or&er is &ee#e& to %e !a'!ellatio' o( the ori-i'al or&er at the ti#e o( a#e'&#e't a'& iss/e o( a 'e1 +a$#e't or&er i' the a#e'&e& (or# at the sa#e ti#e. (() U'less other1ise +ro)i&e& i' a' a-ree#e't o( the +arties or i' a (/'&s-tra's(er s$ste# r/le2 i( the re!ei)i'- %a'52 a(ter a!!e+ti'- a +a$#e't or&er2 a-rees to !a'!ellatio' or a#e'&#e't o( the or&er %$ the se'&er or is %o/'& %$ a (/'&s-tra's(er s$ste# r/le allo1i'- !a'!ellatio' or a#e'&#e't 1itho/t the %a'5Bs a-ree#e't2 the se'&er2 1hether or 'ot !a'!ellatio' or a#e'&#e't is e((e!ti)e2 is lia%le to the %a'5 (or a'$ loss a'& e,+e'ses2 i'!l/&i'- reaso'a%le attor'e$Bs (ees2 i'!/rre& %$ the %a'5 as a res/lt o( the !a'!ellatio' or a#e'&#e't or atte#+te& !a'!ellatio' or a#e'&#e't. (-) A +a$#e't or&er is 'ot re)o5e& %$ the &eath or le-al i'!a+a!it$ o( the se'&er /'less the re!ei)i'- %a'5 5'o1s o( the &eath or o( a' a&6/&i!atio' o( i'!a+a!it$ %$ a !o/rt o( !o#+ete't 6/ris&i!tio' a'& has reaso'a%le o++ort/'it$ to a!t %e(ore a!!e+ta'!e o( the or&er. (h) A (/'&s-tra's(er s$ste# r/le is 'ot e((e!ti)e to the e,te't it !o'(li!ts 1ith s/%se!tio' (!)(*). 8A-*1*. LIA@ILITG AN= =UTG O> RECEIVING @ANF REGAR=ING UNACCEPTE= PAGEENT OR=ER. I( a re!ei)i'- %a'5 (ails to a!!e+t a +a$#e't or&er that it is o%li-e& %$ e,+ress a-ree#e't to a!!e+t2 the %a'5 is lia%le (or %rea!h o( the a-ree#e't to the e,te't +ro)i&e& i' the a-ree#e't or i' this Arti!le2 %/t &oes 'ot other1ise ha)e a'$ &/t$ to a!!e+t a +a$#e't or&er or2 %e(ore a!!e+ta'!e2 to ta5e a'$ a!tio'2 or re(rai' (ro# ta5i'a!tio'2 1ith res+e!t to the or&er e,!e+t as +ro)i&e& i' this Arti!le or %$ e,+ress a-ree#e't. Lia%ilit$ %ase& o' a!!e+ta'!e arises o'l$ 1he' a!!e+ta'!e o!!/rs as state& i' Se!tio' 8A-*0A2 a'& lia%ilit$ is li#ite& to that +ro)i&e& i' this Arti!le. A re!ei)i'%a'5 is 'ot the a-e't o( the se'&er or %e'e(i!iar$ o( the +a$#e't or&er it a!!e+ts2 or o( a'$ other +art$ to the (/'&s tra's(er2 a'& the %a'5 o1es 'o &/t$ to a'$ +art$ to the (/'&s tra's(er e,!e+t as +ro)i&e& i' this Arti!le or %$ e,+ress a-ree#e't.

PART .. EMECUTION O> SEN=ERBS PAGEENT OR=ER @G RECEIVING @ANF 8A-.01. EMECUTION AN= EMECUTION =ATE. (a) A +a$#e't or&er is ?e,e!/te&? %$ the re!ei)i'- %a'5 1he' it iss/es a +a$#e't or&er i'te'&e& to !arr$ o/t the +a$#e't or&er re!ei)e& %$ the %a'5. A +a$#e't or&er re!ei)e& %$ the %e'e(i!iar$Bs %a'5 !a' %e a!!e+te& %/t !a''ot %e e,e!/te&. (%) ?E,e!/tio' &ate? o( a +a$#e't or&er #ea's the &a$ o' 1hi!h the re!ei)i'- %a'5 #a$ +ro+erl$ iss/e a +a$#e't or&er i' e,e!/tio' o( the se'&erBs or&er. The e,e!/tio' &ate #a$ %e &eter#i'e& %$ i'str/!tio' o( the se'&er %/t !a''ot %e earlier tha' the &a$ the or&er is re!ei)e& a'&2 /'less other1ise &eter#i'e&2 is the &a$ the or&er is re!ei)e&. I( the se'&erBs i'str/!tio' states a +a$#e't &ate2 the e,e!/tio' &ate is the +a$#e't &ate or a' earlier &ate o' 1hi!h e,e!/tio' is reaso'a%l$ 'e!essar$ to allo1 +a$#e't to the %e'e(i!iar$ o' the +a$#e't &ate. 8A-.0*. O@LIGATIONS O> RECEIVING @ANF IN EMECUTION O> PAGEENT OR=ER. (a) E,!e+t as +ro)i&e& i' s/%se!tio's (%) thro/-h (&)2 i( the re!ei)i'- %a'5 a!!e+ts a +a$#e't or&er +/rs/a't to Se!tio' 8A-*0A(a)2 the %a'5 has the (ollo1i'- o%li-atio's i' e,e!/ti'- the or&er0 (1) The re!ei)i'- %a'5 is o%li-e& to iss/e2 o' the e,e!/tio' &ate2 a +a$#e't or&er !o#+l$i'- 1ith the se'&erBs or&er a'& to (ollo1 the se'&erBs i'str/!tio's !o'!er'i'- (i) a'$ i'ter#e&iar$ %a'5 or (/'&s-tra's(er s$ste# to %e /se& i' !arr$i'- o/t the (/'&s tra's(er2 or (ii) the #ea's %$ 1hi!h +a$#e't or&ers are to %e tra's#itte& i' the (/'&s tra's(er. I( the ori-i'atorBs %a'5 iss/es a +a$#e't or&er to a' i'ter#e&iar$ %a'52 the ori-i'atorBs %a'5 is o%li-e& to i'str/!t the i'ter#e&iar$ %a'5 a!!or&i'- to the i'str/!tio' o( the ori-i'ator. A' i'ter#e&iar$ %a'5 i' the (/'&s tra's(er is si#ilarl$ %o/'& %$ a' i'str/!tio' -i)e' to it %$ the se'&er o( the +a$#e't or&er it a!!e+ts. (*) I( the se'&erBs i'str/!tio' states that the (/'&s tra's(er is to %e !arrie& o/t tele+ho'i!all$ or %$ 1ire tra's(er or other1ise i'&i!ates that the (/'&s tra's(er is to %e !arrie& o/t %$ the #ost e,+e&itio/s #ea's2 the re!ei)i'- %a'5 is o%li-e& to tra's#it its +a$#e't or&er %$ the #ost e,+e&itio/s a)aila%le #ea's2 a'& to i'str/!t a'$ i'ter#e&iar$ %a'5 a!!or&i'-l$. I( a se'&erBs i'str/!tio' states a +a$#e't &ate2 the re!ei)i'- %a'5 is o%li-e& to tra's#it its +a$#e't or&er at a ti#e a'& %$ #ea's reaso'a%l$ 'e!essar$ to allo1 +a$#e't to the %e'e(i!iar$ o' the +a$#e't &ate or as soo' therea(ter as is (easi%le. (%) U'less other1ise i'str/!te&2 a re!ei)i'- %a'5 e,e!/ti'- a +a$#e't or&er #a$ (i) /se a'$ (/'&s-tra's(er s$ste# i( /se o( that s$ste# is reaso'a%le i' the !ir!/#sta'!es2 a'& (ii) iss/e a +a$#e't or&er to the %e'e(i!iar$Bs %a'5 or to a' i'ter#e&iar$ %a'5 thro/-h 1hi!h a +a$#e't or&er !o'(or#i'- to the se'&erBs or&er !a' e,+e&itio/sl$ %e

iss/e& to the %e'e(i!iar$Bs %a'5 i( the re!ei)i'- %a'5 e,er!ises or&i'ar$ !are i' the sele!tio' o( the i'ter#e&iar$ %a'5. A re!ei)i'- %a'5 is 'ot re7/ire& to (ollo1 a' i'str/!tio' o( the se'&er &esi-'ati'- a (/'&s-tra's(er s$ste# to %e /se& i' !arr$i'- o/t the (/'&s tra's(er i( the re!ei)i'- %a'52 i' -oo& (aith2 &eter#i'es that it is 'ot (easi%le to (ollo1 the i'str/!tio' or that (ollo1i'- the i'str/!tio' 1o/l& /'&/l$ &ela$ !o#+letio' o( the (/'&s tra's(er. (!) U'less s/%se!tio' (a)(*) a++lies or the re!ei)i'- %a'5 is other1ise i'str/!te&2 the %a'5 #a$ e,e!/te a +a$#e't or&er %$ tra's#itti'- its +a$#e't or&er %$ (irst !lass #ail or %$ a'$ #ea's reaso'a%le i' the !ir!/#sta'!es. I( the re!ei)i'- %a'5 is i'str/!te& to e,e!/te the se'&erBs or&er %$ tra's#itti'- its +a$#e't or&er %$ a +arti!/lar #ea's2 the re!ei)i'- %a'5 #a$ iss/e its +a$#e't or&er %$ the #ea's state& or %$ a'$ #ea's as e,+e&itio/s as the #ea's state&. (&) U'less i'str/!te& %$ the se'&er2 (i) the re!ei)i'- %a'5 #a$ 'ot o%tai' +a$#e't o( its !har-es (or ser)i!es a'& e,+e'ses i' !o''e!tio' 1ith the e,e!/tio' o( the se'&erBs or&er %$ iss/i'- a +a$#e't or&er i' a' a#o/'t e7/al to the a#o/'t o( the se'&erBs or&er less the a#o/'t o( the !har-es2 a'& (ii) #a$ 'ot i'str/!t a s/%se7/e't re!ei)i'%a'5 to o%tai' +a$#e't o( its !har-es i' the sa#e #a''er. 8A-.0.. ERRONEOUS EMECUTION O> PAGEENT OR=ER. (a) A re!ei)i'- %a'5 that (i) e,e!/tes the +a$#e't or&er o( the se'&er %$ iss/i'- a +a$#e't or&er i' a' a#o/'t -reater tha' the a#o/'t o( the se'&erBs or&er2 or (ii) iss/es a +a$#e't or&er i' e,e!/tio' o( the se'&erBs or&er a'& the' iss/es a &/+li!ate or&er2 is e'title& to +a$#e't o( the a#o/'t o( the se'&erBs or&er /'&er Se!tio' 8A80*(!) i( that s/%se!tio' is other1ise satis(ie&. The %a'5 is e'title& to re!o)er (ro# the %e'e(i!iar$ o( the erro'eo/s or&er the e,!ess +a$#e't re!ei)e& to the e,te't allo1e& %$ the la1 -o)er'i'- #ista5e a'& restit/tio'. (%) A re!ei)i'- %a'5 that e,e!/tes the +a$#e't or&er o( the se'&er %$ iss/i'- a +a$#e't or&er i' a' a#o/'t less tha' the a#o/'t o( the se'&erBs or&er is e'title& to +a$#e't o( the a#o/'t o( the se'&erBs or&er /'&er Se!tio' 8A-80*(!) i( (i) that s/%se!tio' is other1ise satis(ie& a'& (ii) the %a'5 !orre!ts its #ista5e %$ iss/i'- a' a&&itio'al +a$#e't or&er (or the %e'e(it o( the %e'e(i!iar$ o( the se'&erBs or&er. I( the error is 'ot !orre!te&2 the iss/er o( the erro'eo/s or&er is e'title& to re!ei)e or retai' +a$#e't (ro# the se'&er o( the or&er it a!!e+te& o'l$ to the e,te't o( the a#o/'t o( the erro'eo/s or&er. This s/%se!tio' &oes 'ot a++l$ i( the re!ei)i'- %a'5 e,e!/tes the se'&erBs +a$#e't or&er %$ iss/i'- a +a$#e't or&er i' a' a#o/'t less tha' the a#o/'t o( the se'&erBs or&er (or the +/r+ose o( o%tai'i'- +a$#e't o( its !har-es (or ser)i!es a'& e,+e'ses +/rs/a't to i'str/!tio' o( the se'&er. (!) I( a re!ei)i'- %a'5 e,e!/tes the +a$#e't or&er o( the se'&er %$ iss/i'- a +a$#e't or&er to a %e'e(i!iar$ &i((ere't (ro# the %e'e(i!iar$ o( the se'&erBs or&er a'& the (/'&s

tra's(er is !o#+lete& o' the %asis o( that error2 the se'&er o( the +a$#e't or&er that 1as erro'eo/sl$ e,e!/te& a'& all +re)io/s se'&ers i' the (/'&s tra's(er are 'ot o%li-e& to +a$ the +a$#e't or&ers the$ iss/e&. The iss/er o( the erro'eo/s or&er is e'title& to re!o)er (ro# the %e'e(i!iar$ o( the or&er the +a$#e't re!ei)e& to the e,te't allo1e& %$ the la1 -o)er'i'- #ista5e a'& restit/tio'. 8A-.08. =UTG O> SEN=ER TO REPORT ERRONEOUSLG EMECUTE= PAGEENT OR=ER. I( the se'&er o( a +a$#e't or&er that is erro'eo/sl$ e,e!/te& as state& i' Se!tio' 8A.0. re!ei)es 'oti(i!atio' (ro# the re!ei)i'- %a'5 that the or&er 1as e,e!/te& or that the se'&erBs a!!o/'t 1as &e%ite& 1ith res+e!t to the or&er2 the se'&er has a &/t$ to e,er!ise or&i'ar$ !are to &eter#i'e2 o' the %asis o( i'(or#atio' a)aila%le to the se'&er2 that the or&er 1as erro'eo/sl$ e,e!/te& a'& to 'oti($ the %a'5 o( the rele)a't (a!ts 1ithi' a reaso'a%le ti#e 'ot e,!ee&i'- A0 &a$s a(ter the 'oti(i!atio' (ro# the %a'5 1as re!ei)e& %$ the se'&er. I( the se'&er (ails to +er(or# that &/t$2 the %a'5 is 'ot o%li-e& to +a$ i'terest o' a'$ a#o/'t re(/'&a%le to the se'&er /'&er Se!tio' 8A-80*(&) (or the +erio& %e(ore the %a'5 lear's o( the e,e!/tio' error. The %a'5 is 'ot e'title& to a'$ re!o)er$ (ro# the se'&er o' a!!o/'t o( a (ail/re %$ the se'&er to +er(or# the &/t$ state& i' this se!tio'. 8A-.09. LIA@ILITG >OR LATE OR IEPROPER EMECUTION OR >AILURE TO EMECUTE PAGEENT OR=ER. (a) I( a (/'&s tra's(er is !o#+lete& %/t e,e!/tio' o( a +a$#e't or&er %$ the re!ei)i'%a'5 i' %rea!h o( Se!tio' 8A-.0* res/lts i' &ela$ i' +a$#e't to the %e'e(i!iar$2 the %a'5 is o%li-e& to +a$ i'terest to either the ori-i'ator or the %e'e(i!iar$ o( the (/'&s tra's(er (or the +erio& o( &ela$ !a/se& %$ the i#+ro+er e,e!/tio'. E,!e+t as +ro)i&e& i' s/%se!tio' (!)2 a&&itio'al &a#a-es are 'ot re!o)era%le. (%) I( e,e!/tio' o( a +a$#e't or&er %$ a re!ei)i'- %a'5 i' %rea!h o( Se!tio' 8A-.0* res/lts i' (i) 'o'!o#+letio' o( the (/'&s tra's(er2 (ii) (ail/re to /se a' i'ter#e&iar$ %a'5 &esi-'ate& %$ the ori-i'ator2 or (iii) iss/a'!e o( a +a$#e't or&er that &oes 'ot !o#+l$ 1ith the ter#s o( the +a$#e't or&er o( the ori-i'ator2 the %a'5 is lia%le to the ori-i'ator (or its e,+e'ses i' the (/'&s tra's(er a'& (or i'!i&e'tal e,+e'ses a'& i'terest losses2 to the e,te't 'ot !o)ere& %$ s/%se!tio' (a)2 res/lti'- (ro# the i#+ro+er e,e!/tio'. E,!e+t as +ro)i&e& i' s/%se!tio' (!)2 a&&itio'al &a#a-es are 'ot re!o)era%le. (!) I' a&&itio' to the a#o/'ts +a$a%le /'&er s/%se!tio's (a) a'& (%)2 &a#a-es2 i'!l/&i'- !o'se7/e'tial &a#a-es2 are re!o)era%le to the e,te't +ro)i&e& i' a' e,+ress 1ritte' a-ree#e't o( the re!ei)i'- %a'5. (&) I( a re!ei)i'- %a'5 (ails to e,e!/te a +a$#e't or&er it 1as o%li-e& %$ e,+ress a-ree#e't to e,e!/te2 the re!ei)i'- %a'5 is lia%le to the se'&er (or its e,+e'ses i' the

tra'sa!tio' a'& (or i'!i&e'tal e,+e'ses a'& i'terest losses res/lti'- (ro# the (ail/re to e,e!/te. A&&itio'al &a#a-es2 i'!l/&i'- !o'se7/e'tial &a#a-es2 are re!o)era%le to the e,te't +ro)i&e& i' a' e,+ress 1ritte' a-ree#e't o( the re!ei)i'- %a'52 %/t are 'ot other1ise re!o)era%le. (e) Reaso'a%le attor'e$Bs (ees are re!o)era%le i( &e#a'& (or !o#+e'satio' /'&er s/%se!tio' (a) or (%) is #a&e a'& re(/se& %e(ore a' a!tio' is %ro/-ht o' the !lai#. I( a !lai# is #a&e (or %rea!h o( a' a-ree#e't /'&er s/%se!tio' (&) a'& the a-ree#e't &oes 'ot +ro)i&e (or &a#a-es2 reaso'a%le attor'e$Bs (ees are re!o)era%le i( &e#a'& (or !o#+e'satio' /'&er s/%se!tio' (&) is #a&e a'& re(/se& %e(ore a' a!tio' is %ro/-ht o' the !lai#. (() E,!e+t as state& i' this se!tio'2 the lia%ilit$ o( a re!ei)i'- %a'5 /'&er s/%se!tio's (a) a'& (%) #a$ 'ot %e )arie& %$ a-ree#e't. PART 8. PAGEENT 8A-801. PAGEENT =ATE. ?Pa$#e't &ate? o( a +a$#e't or&er #ea's the &a$ o' 1hi!h the a#o/'t o( the or&er is +a$a%le to the %e'e(i!iar$ %$ the %e'e(i!iar$Bs %a'5. The +a$#e't &ate #a$ %e &eter#i'e& %$ i'str/!tio' o( the se'&er %/t !a''ot %e earlier tha' the &a$ the or&er is re!ei)e& %$ the %e'e(i!iar$Bs %a'5 a'&2 /'less other1ise &eter#i'e&2 is the &a$ the or&er is re!ei)e& %$ the %e'e(i!iar$Bs %a'5. 8A-80*. O@LIGATION O> SEN=ER TO PAG RECEIVING @ANF. (a) This se!tio' is s/%6e!t to Se!tio's 8A-*09 a'& 8A-*0;. (%) Cith res+e!t to a +a$#e't or&er iss/e& to the %e'e(i!iar$Bs %a'52 a!!e+ta'!e o( the or&er %$ the %a'5 o%li-es the se'&er to +a$ the %a'5 the a#o/'t o( the or&er2 %/t +a$#e't is 'ot &/e /'til the +a$#e't &ate o( the or&er. (!) This s/%se!tio' is s/%6e!t to s/%se!tio' (e) a'& to Se!tio' 8A-.0.. Cith res+e!t to a +a$#e't or&er iss/e& to a re!ei)i'- %a'5 other tha' the %e'e(i!iar$Bs %a'52 a!!e+ta'!e o( the or&er %$ the re!ei)i'- %a'5 o%li-es the se'&er to +a$ the %a'5 the a#o/'t o( the se'&erBs or&er. Pa$#e't %$ the se'&er is 'ot &/e /'til the e,e!/tio' &ate o( the se'&erBs or&er. The o%li-atio' o( that se'&er to +a$ its +a$#e't or&er is e,!/se& i( the (/'&s tra's(er is 'ot !o#+lete& %$ a!!e+ta'!e %$ the %e'e(i!iar$Bs %a'5 o( a +a$#e't or&er i'str/!ti'- +a$#e't to the %e'e(i!iar$ o( that se'&erBs +a$#e't or&er. (&) I( the se'&er o( a +a$#e't or&er +a$s the or&er a'& 1as 'ot o%li-e& to +a$ all or +art o( the a#o/'t +ai&2 the %a'5 re!ei)i'- +a$#e't is o%li-e& to re(/'& +a$#e't to

the e,te't the se'&er 1as 'ot o%li-e& to +a$. E,!e+t as +ro)i&e& i' Se!tio's 8A-*08 a'& 8A-.082 i'terest is +a$a%le o' the re(/'&a%le a#o/'t (ro# the &ate o( +a$#e't. (e) I( a (/'&s tra's(er is 'ot !o#+lete& as state& i' s/%se!tio' (!) a'& a' i'ter#e&iar$ %a'5 is o%li-e& to re(/'& +a$#e't as state& i' s/%se!tio' (&) %/t is /'a%le to &o so %e!a/se 'ot +er#itte& %$ a++li!a%le la1 or %e!a/se the %a'5 s/s+e'&s +a$#e'ts2 a se'&er i' the (/'&s tra's(er that e,e!/te& a +a$#e't or&er i' !o#+lia'!e 1ith a' i'str/!tio'2 as state& i' Se!tio' 8A-.0*(a)(1)2 to ro/te the (/'&s tra's(er thro/-h that i'ter#e&iar$ %a'5 is e'title& to re!ei)e or retai' +a$#e't (ro# the se'&er o( the +a$#e't or&er that it a!!e+te&. The (irst se'&er i' the (/'&s tra's(er that iss/e& a' i'str/!tio' re7/iri'- ro/ti'- thro/-h that i'ter#e&iar$ %a'5 is s/%ro-ate& to the ri-ht o( the %a'5 that +ai& the i'ter#e&iar$ %a'5 to re(/'& as state& i' s/%se!tio' (&). (() The ri-ht o( the se'&er o( a +a$#e't or&er to %e e,!/se& (ro# the o%li-atio' to +a$ the or&er as state& i' s/%se!tio' (!) or to re!ei)e re(/'& /'&er s/%se!tio' (&) #a$ 'ot %e )arie& %$ a-ree#e't. 8A-80.. PAGEENT @G SEN=ER TO RECEIVING @ANF. (a) Pa$#e't o( the se'&erBs o%li-atio' /'&er Se!tio' 8A-80* to +a$ the re!ei)i'- %a'5 o!!/rs as (ollo1s0 (1) I( the se'&er is a %a'52 +a$#e't o!!/rs 1he' the re!ei)i'- %a'5 re!ei)es (i'al settle#e't o( the o%li-atio' thro/-h a >e&eral Reser)e @a'5 or thro/-h a (/'&s-tra's(er s$ste#. (*) I( the se'&er is a %a'5 a'& the se'&er (i) !re&ite& a' a!!o/'t o( the re!ei)i'- %a'5 1ith the se'&er2 or (ii) !a/se& a' a!!o/'t o( the re!ei)i'- %a'5 i' a'other %a'5 to %e !re&ite&2 +a$#e't o!!/rs 1he' the !re&it is 1ith&ra1' or2 i( 'ot 1ith&ra1'2 at #i&'i-ht o( the &a$ o' 1hi!h the !re&it is 1ith&ra1a%le a'& the re!ei)i'- %a'5 lear's o( that (a!t. (.) I( the re!ei)i'- %a'5 &e%its a' a!!o/'t o( the se'&er 1ith the re!ei)i'- %a'52 +a$#e't o!!/rs 1he' the &e%it is #a&e to the e,te't the &e%it is !o)ere& %$ a 1ith&ra1a%le !re&it %ala'!e i' the a!!o/'t. (%) I( the se'&er a'& re!ei)i'- %a'5 are #e#%ers o( a (/'&s-tra's(er s$ste# that 'ets o%li-atio's #/ltilaterall$ a#o'- +arti!i+a'ts2 the re!ei)i'- %a'5 re!ei)es (i'al settle#e't 1he' settle#e't is !o#+lete i' a!!or&a'!e 1ith the r/les o( the s$ste#. The o%li-atio' o( the se'&er to +a$ the a#o/'t o( a +a$#e't or&er tra's#itte& thro/-h the (/'&s-tra's(er s$ste# #a$ %e satis(ie&2 to the e,te't +er#itte& %$ the r/les o( the s$ste#2 %$ setti'- o(( a'& a++l$i'- a-ai'st the se'&erBs o%li-atio' the ri-ht o( the se'&er to re!ei)e +a$#e't (ro# the re!ei)i'- %a'5 o( the a#o/'t o( a'$ other +a$#e't or&er tra's#itte& to the se'&er %$ the re!ei)i'- %a'5 thro/-h the (/'&s-tra's(er s$ste#. The a--re-ate %ala'!e o( o%li-atio's o1e& %$ ea!h se'&er to ea!h re!ei)i'-

%a'5 i' the (/'&s-tra's(er s$ste# #a$ %e satis(ie&2 to the e,te't +er#itte& %$ the r/les o( the s$ste#2 %$ setti'- o(( a'& a++l$i'- a-ai'st that %ala'!e the a--re-ate %ala'!e o( o%li-atio's o1e& to the se'&er %$ other #e#%ers o( the s$ste#. The a--re-ate %ala'!e is &eter#i'e& a(ter the ri-ht o( seto(( state& i' the se!o'& se'te'!e o( this s/%se!tio' has %ee' e,er!ise&. (!) I( t1o %a'5s tra's#it +a$#e't or&ers to ea!h other /'&er a' a-ree#e't that settle#e't o( the o%li-atio's o( ea!h %a'5 to the other /'&er Se!tio' 8A-80* 1ill %e #a&e at the e'& o( the &a$ or other +erio&2 the total a#o/'t o1e& 1ith res+e!t to all or&ers tra's#itte& %$ o'e %a'5 shall %e set o(( a-ai'st the total a#o/'t o1e& 1ith res+e!t to all or&ers tra's#itte& %$ the other %a'5. To the e,te't o( the seto((2 ea!h %a'5 has #a&e +a$#e't to the other. (&) I' a !ase 'ot !o)ere& %$ s/%se!tio' (a)2 the ti#e 1he' +a$#e't o( the se'&erBs o%li-atio' /'&er Se!tio' 8A-80*(%) or 8A-80*(!) o!!/rs is -o)er'e& %$ a++li!a%le +ri'!i+les o( la1 that &eter#i'e 1he' a' o%li-atio' is satis(ie&. 8A-808. O@LIGATION O> @ENE>ICIARGBS @ANF TO PAG AN= GIVE NOTICE TO @ENE>ICIARG. (a) S/%6e!t to Se!tio's 8A-*11(e)2 8A-809(&)2 a'& 8A-809(e)2 i( a %e'e(i!iar$Bs %a'5 a!!e+ts a +a$#e't or&er2 the %a'5 is o%li-e& to +a$ the a#o/'t o( the or&er to the %e'e(i!iar$ o( the or&er. Pa$#e't is &/e o' the +a$#e't &ate o( the or&er2 %/t i( a!!e+ta'!e o!!/rs o' the +a$#e't &ate a(ter the !lose o( the (/'&s-tra's(er %/si'ess &a$ o( the %a'52 +a$#e't is &/e o' the 'e,t (/'&s-tra's(er %/si'ess &a$. I( the %a'5 re(/ses to +a$ a(ter &e#a'& %$ the %e'e(i!iar$ a'& re!ei+t o( 'oti!e o( +arti!/lar !ir!/#sta'!es that 1ill -i)e rise to !o'se7/e'tial &a#a-es as a res/lt o( 'o'+a$#e't2 the %e'e(i!iar$ #a$ re!o)er &a#a-es res/lti'- (ro# the re(/sal to +a$ to the e,te't the %a'5 ha& 'oti!e o( the &a#a-es2 /'less the %a'5 +ro)es that it &i& 'ot +a$ %e!a/se o( a reaso'a%le &o/%t !o'!er'i'- the ri-ht o( the %e'e(i!iar$ to +a$#e't. (%) I( a +a$#e't or&er a!!e+te& %$ the %e'e(i!iar$Bs %a'5 i'str/!ts +a$#e't to a' a!!o/'t o( the %e'e(i!iar$2 the %a'5 is o%li-e& to 'oti($ the %e'e(i!iar$ o( re!ei+t o( the or&er %e(ore #i&'i-ht o( the 'e,t (/'&s-tra's(er %/si'ess &a$ (ollo1i'- the +a$#e't &ate. I( the +a$#e't or&er &oes 'ot i'str/!t +a$#e't to a' a!!o/'t o( the %e'e(i!iar$2 the %a'5 is re7/ire& to 'oti($ the %e'e(i!iar$ o'l$ i( 'oti!e is re7/ire& %$ the or&er. Noti!e #a$ %e -i)e' %$ (irst !lass #ail or a'$ other #ea's reaso'a%le i' the !ir!/#sta'!es. I( the %a'5 (ails to -i)e the re7/ire& 'oti!e2 the %a'5 is o%li-e& to +a$ i'terest to the %e'e(i!iar$ o' the a#o/'t o( the +a$#e't or&er (ro# the &a$ 'oti!e sho/l& ha)e %ee' -i)e' /'til the &a$ the %e'e(i!iar$ lear'e& o( re!ei+t o( the +a$#e't or&er %$ the %a'5. No other &a#a-es are re!o)era%le. Reaso'a%le attor'e$Bs (ees are also re!o)era%le i( &e#a'& (or i'terest is #a&e a'& re(/se& %e(ore a' a!tio' is %ro/-ht o' the !lai#.

(!) The ri-ht o( a %e'e(i!iar$ to re!ei)e +a$#e't a'& &a#a-es as state& i' s/%se!tio' (a) #a$ 'ot %e )arie& %$ a-ree#e't or a (/'&s-tra's(er s$ste# r/le. The ri-ht o( a %e'e(i!iar$ to %e 'oti(ie& as state& i' s/%se!tio' (%) #a$ %e )arie& %$ a-ree#e't o( the %e'e(i!iar$ or %$ a (/'&s-tra's(er s$ste# r/le i( the %e'e(i!iar$ is 'oti(ie& o( the r/le %e(ore i'itiatio' o( the (/'&s tra's(er. 8A-809. PAGEENT @G @ENE>ICIARGBS @ANF TO @ENE>ICIARG. (a) I( the %e'e(i!iar$Bs %a'5 !re&its a' a!!o/'t o( the %e'e(i!iar$ o( a +a$#e't or&er2 +a$#e't o( the %a'5Bs o%li-atio' /'&er Se!tio' 8A-808(a) o!!/rs 1he' a'& to the e,te't (i) the %e'e(i!iar$ is 'oti(ie& o( the ri-ht to 1ith&ra1 the !re&it2 (ii) the %a'5 la1(/ll$ a++lies the !re&it to a &e%t o( the %e'e(i!iar$2 or (iii) (/'&s 1ith res+e!t to the or&er are other1ise #a&e a)aila%le to the %e'e(i!iar$ %$ the %a'5. (%) I( the %e'e(i!iar$Bs %a'5 &oes 'ot !re&it a' a!!o/'t o( the %e'e(i!iar$ o( a +a$#e't or&er2 the ti#e 1he' +a$#e't o( the %a'5Bs o%li-atio' /'&er Se!tio' 8A-808(a) o!!/rs is -o)er'e& %$ +ri'!i+les o( la1 that &eter#i'e 1he' a' o%li-atio' is satis(ie&.

(!) E,!e+t as state& i' s/%se!tio's (&) a'& (e)2 i( the %e'e(i!iar$Bs %a'5 +a$s the %e'e(i!iar$ o( a +a$#e't or&er /'&er a !o'&itio' to +a$#e't or a-ree#e't o( the %e'e(i!iar$ -i)i'- the %a'5 the ri-ht to re!o)er +a$#e't (ro# the %e'e(i!iar$ i( the %a'5 &oes 'ot re!ei)e +a$#e't o( the or&er2 the !o'&itio' to +a$#e't or a-ree#e't is 'ot e'(or!ea%le. (&) A (/'&s-tra's(er s$ste# r/le #a$ +ro)i&e that +a$#e'ts #a&e to %e'e(i!iaries o( (/'&s tra's(ers #a&e thro/-h the s$ste# are +ro)isio'al /'til re!ei+t o( +a$#e't %$ the %e'e(i!iar$Bs %a'5 o( the +a$#e't or&er it a!!e+te&. A %e'e(i!iar$Bs %a'5 that #a5es a +a$#e't that is +ro)isio'al /'&er the r/le is e'title& to re(/'& (ro# the %e'e(i!iar$ i( (i) the r/le re7/ires that %oth the %e'e(i!iar$ a'& the ori-i'ator %e -i)e' 'oti!e o( the +ro)isio'al 'at/re o( the +a$#e't %e(ore the (/'&s tra's(er is i'itiate&2 (ii) the %e'e(i!iar$2 the %e'e(i!iar$Bs %a'5 a'& the ori-i'atorBs %a'5 a-ree& to %e %o/'& %$ the r/le2 a'& (iii) the %e'e(i!iar$Bs %a'5 &i& 'ot re!ei)e +a$#e't o( the +a$#e't or&er that it a!!e+te&. I( the %e'e(i!iar$ is o%li-e& to re(/'& +a$#e't to the %e'e(i!iar$Bs %a'52 a!!e+ta'!e o( the +a$#e't or&er %$ the %e'e(i!iar$Bs %a'5 is '/lli(ie& a'& 'o +a$#e't %$ the ori-i'ator o( the (/'&s tra's(er to the %e'e(i!iar$ o!!/rs /'&er Se!tio' 8A-80:. (e) This s/%se!tio' a++lies to a (/'&s tra's(er that i'!l/&es a +a$#e't or&er tra's#itte& o)er a (/'&s-tra's(er s$ste# that (i) 'ets o%li-atio's #/ltilaterall$ a#o'+arti!i+a'ts2 a'& (ii) has i' e((e!t a loss-shari'- a-ree#e't a#o'- +arti!i+a'ts (or the +/r+ose o( +ro)i&i'- (/'&s 'e!essar$ to !o#+lete settle#e't o( the o%li-atio's o( o'e or #ore +arti!i+a'ts that &o 'ot #eet their settle#e't o%li-atio's. I( the %e'e(i!iar$Bs %a'5 i' the (/'&s tra's(er a!!e+ts a +a$#e't or&er a'& the s$ste# (ails to !o#+lete settle#e't +/rs/a't to its r/les 1ith res+e!t to a'$ +a$#e't or&er i' the (/'&s tra's(er2

(i) the a!!e+ta'!e %$ the %e'e(i!iar$Bs %a'5 is '/lli(ie& a'& 'o +erso' has a'$ ri-ht or o%li-atio' %ase& o' the a!!e+ta'!e2 (ii) the %e'e(i!iar$Bs %a'5 is e'title& to re!o)er +a$#e't (ro# the %e'e(i!iar$2 (iii) 'o +a$#e't %$ the ori-i'ator to the %e'e(i!iar$ o!!/rs /'&er Se!tio' 8A-80:2 a'& (i)) s/%6e!t to Se!tio' 8A-80*(e)2 ea!h se'&er i' the (/'&s tra's(er is e,!/se& (ro# its o%li-atio' to +a$ its +a$#e't or&er /'&er Se!tio' 8A80*(!) %e!a/se the (/'&s tra's(er has 'ot %ee' !o#+lete&. 8A-80:. PAGEENT @G ORIGINATOR TO @ENE>ICIARG4 =ISCDARGE O> UN=ERLGING O@LIGATION. (a) S/%6e!t to Se!tio's 8A-*11(e)2 8A-809(&)2 a'& 8A-809(e)2 the ori-i'ator o( a (/'&s tra's(er +a$s the %e'e(i!iar$ o( the ori-i'atorBs +a$#e't or&er (i) at the ti#e a +a$#e't or&er (or the %e'e(it o( the %e'e(i!iar$ is a!!e+te& %$ the %e'e(i!iar$Bs %a'5 i' the (/'&s tra's(er a'& (ii) i' a' a#o/'t e7/al to the a#o/'t o( the or&er a!!e+te& %$ the %e'e(i!iar$Bs %a'52 %/t 'ot #ore tha' the a#o/'t o( the ori-i'atorBs or&er. (%) I( +a$#e't /'&er s/%se!tio' (a) is #a&e to satis($ a' o%li-atio'2 the o%li-atio' is &is!har-e& to the sa#e e,te't &is!har-e 1o/l& res/lt (ro# +a$#e't to the %e'e(i!iar$ o( the sa#e a#o/'t i' #o'e$2 /'less (i) the +a$#e't /'&er s/%se!tio' (a) 1as #a&e %$ a #ea's +rohi%ite& %$ the !o'tra!t o( the %e'e(i!iar$ 1ith res+e!t to the o%li-atio'2 (ii) the %e'e(i!iar$2 1ithi' a reaso'a%le ti#e a(ter re!ei)i'- 'oti!e o( re!ei+t o( the or&er %$ the %e'e(i!iar$Bs %a'52 'oti(ie& the ori-i'ator o( the %e'e(i!iar$Bs re(/sal o( the +a$#e't2 (iii) (/'&s 1ith res+e!t to the or&er 1ere 'ot 1ith&ra1' %$ the %e'e(i!iar$ or a++lie& to a &e%t o( the %e'e(i!iar$2 a'& (i)) the %e'e(i!iar$ 1o/l& s/((er a loss that !o/l& reaso'a%l$ ha)e %ee' a)oi&e& i( +a$#e't ha& %ee' #a&e %$ a #ea's !o#+l$i'1ith the !o'tra!t. I( +a$#e't %$ the ori-i'ator &oes 'ot res/lt i' &is!har-e /'&er this se!tio'2 the ori-i'ator is s/%ro-ate& to the ri-hts o( the %e'e(i!iar$ to re!ei)e +a$#e't (ro# the %e'e(i!iar$Bs %a'5 /'&er Se!tio' 8A-808(a). (!) >or the +/r+ose o( &eter#i'i'- 1hether &is!har-e o( a' o%li-atio' o!!/rs /'&er s/%se!tio' (%)2 i( the %e'e(i!iar$Bs %a'5 a!!e+ts a +a$#e't or&er i' a' a#o/'t e7/al to the a#o/'t o( the ori-i'atorBs +a$#e't or&er less !har-es o( o'e or #ore re!ei)i'%a'5s i' the (/'&s tra's(er2 +a$#e't to the %e'e(i!iar$ is &ee#e& to %e i' the a#o/'t o( the ori-i'atorBs or&er /'less /+o' &e#a'& %$ the %e'e(i!iar$ the ori-i'ator &oes 'ot +a$ the %e'e(i!iar$ the a#o/'t o( the &e&/!te& !har-es. (&) Ri-hts o( the ori-i'ator or o( the %e'e(i!iar$ o( a (/'&s tra's(er /'&er this se!tio' #a$ %e )arie& o'l$ %$ a-ree#e't o( the ori-i'ator a'& the %e'e(i!iar$. PART 9. EISCELLANEOUS PROVISIONS 8A-901. VARIATION @G AGREEEENT AN= E>>ECT O> >UN=S-TRANS>ER SGSTEE RULE.

(a) E,!e+t as other1ise +ro)i&e& i' this Arti!le2 the ri-hts a'& o%li-atio's o( a +art$ to a (/'&s tra's(er #a$ %e )arie& %$ a-ree#e't o( the a((e!te& +art$. (%) ?>/'&s-tra's(er s$ste# r/le? #ea's a r/le o( a' asso!iatio' o( %a'5s (i) -o)er'i'tra's#issio' o( +a$#e't or&ers %$ #ea's o( a (/'&s-tra's(er s$ste# o( the asso!iatio' or ri-hts a'& o%li-atio's 1ith res+e!t to those or&ers2 or (ii) to the e,te't the r/le -o)er's ri-hts a'& o%li-atio's %et1ee' %a'5s that are +arties to a (/'&s tra's(er i' 1hi!h a >e&eral Reser)e @a'52 a!ti'- as a' i'ter#e&iar$ %a'52 se'&s a +a$#e't or&er to the %e'e(i!iar$Bs %a'5. E,!e+t as other1ise +ro)i&e& i' this Arti!le2 a (/'&s-tra's(er s$ste# r/le -o)er'i'- ri-hts a'& o%li-atio's %et1ee' +arti!i+ati'- %a'5s /si'- the s$ste# #a$ %e e((e!ti)e e)e' i( the r/le !o'(li!ts 1ith this Arti!le a'& i'&ire!tl$ a((e!ts a'other +art$ to the (/'&s tra's(er 1ho &oes 'ot !o'se't to the r/le. A (/'&s-tra's(er s$ste# r/le #a$ also -o)er' ri-hts a'& o%li-atio's o( +arties other tha' +arti!i+ati'%a'5s /si'- the s$ste# to the e,te't state& i' Se!tio's 8A-808(!)2 8A-809(&)2 a'& 8A90;(!). 8A-90*. CRE=ITOR PROCESS SERVE= ON RECEIVING @ANF4 SETO>> @G @ENE>ICIARGBS @ANF. (a) As /se& i' this se!tio'2 ?!re&itor +ro!ess? #ea's le)$2 atta!h#e't2 -ar'ish#e't2 'oti!e o( lie'2 se7/estratio'2 or si#ilar +ro!ess iss/e& %$ or o' %ehal( o( a !re&itor or other !lai#a't 1ith res+e!t to a' a!!o/'t. (%) This s/%se!tio' a++lies to !re&itor +ro!ess 1ith res+e!t to a' a/thori3e& a!!o/'t o( the se'&er o( a +a$#e't or&er i( the !re&itor +ro!ess is ser)e& o' the re!ei)i'- %a'5. >or the +/r+ose o( &eter#i'i'- ri-hts 1ith res+e!t to the !re&itor +ro!ess2 i( the re!ei)i'- %a'5 a!!e+ts the +a$#e't or&er the %ala'!e i' the a/thori3e& a!!o/'t is &ee#e& to %e re&/!e& %$ the a#o/'t o( the +a$#e't or&er to the e,te't the %a'5 &i& 'ot other1ise re!ei)e +a$#e't o( the or&er2 /'less the !re&itor +ro!ess is ser)e& at a ti#e a'& i' a #a''er a((or&i'- the %a'5 a reaso'a%le o++ort/'it$ to a!t o' it %e(ore the %a'5 a!!e+ts the +a$#e't or&er. (!) I( a %e'e(i!iar$Bs %a'5 has re!ei)e& a +a$#e't or&er (or +a$#e't to the %e'e(i!iar$Bs a!!o/'t i' the %a'52 the (ollo1i'- r/les a++l$0 (1) The %a'5 #a$ !re&it the %e'e(i!iar$Bs a!!o/'t. The a#o/'t !re&ite& #a$ %e set o(( a-ai'st a' o%li-atio' o1e& %$ the %e'e(i!iar$ to the %a'5 or #a$ %e a++lie& to satis($ !re&itor +ro!ess ser)e& o' the %a'5 1ith res+e!t to the a!!o/'t. (*) The %a'5 #a$ !re&it the %e'e(i!iar$Bs a!!o/'t a'& allo1 1ith&ra1al o( the a#o/'t !re&ite& /'less !re&itor +ro!ess 1ith res+e!t to the a!!o/'t is ser)e& at a ti#e a'& i' a #a''er a((or&i'- the %a'5 a reaso'a%le o++ort/'it$ to a!t to +re)e't 1ith&ra1al.

(.) I( !re&itor +ro!ess 1ith res+e!t to the %e'e(i!iar$Bs a!!o/'t has %ee' ser)e& a'& the %a'5 has ha& a reaso'a%le o++ort/'it$ to a!t o' it2 the %a'5 #a$ 'ot re6e!t the +a$#e't or&er e,!e+t (or a reaso' /'relate& to the ser)i!e o( +ro!ess. (&) Cre&itor +ro!ess 1ith res+e!t to a +a$#e't %$ the ori-i'ator to the %e'e(i!iar$ +/rs/a't to a (/'&s tra's(er #a$ %e ser)e& o'l$ o' the %e'e(i!iar$Bs %a'5 1ith res+e!t to the &e%t o1e& %$ that %a'5 to the %e'e(i!iar$. A'$ other %a'5 ser)e& 1ith the !re&itor +ro!ess is 'ot o%li-e& to a!t 1ith res+e!t to the +ro!ess. 8A-90.. INHUNCTION OR RESTRAINING OR=ER CITD RESPECT TO >UN=S TRANS>ER. >or +ro+er !a/se a'& i' !o#+lia'!e 1ith a++li!a%le la12 a !o/rt #a$ restrai' (i) a +erso' (ro# iss/i'- a +a$#e't or&er to i'itiate a (/'&s tra's(er2 (ii) a' ori-i'atorBs %a'5 (ro# e,e!/ti'- the +a$#e't or&er o( the ori-i'ator2 or (iii) the %e'e(i!iar$Bs %a'5 (ro# releasi'- (/'&s to the %e'e(i!iar$ or the %e'e(i!iar$ (ro# 1ith&ra1i'- the (/'&s. A !o/rt #a$ 'ot other1ise restrai' a +erso' (ro# iss/i'- a +a$#e't or&er2 +a$i'- or re!ei)i'- +a$#e't o( a +a$#e't or&er2 or other1ise a!ti'- 1ith res+e!t to a (/'&s tra's(er. 8A-908. OR=ER IN CDICD ITEES AN= PAGEENT OR=ERS EAG @E CDARGE= TO ACCOUNT4 OR=ER O> CITD=RACALS >ROE ACCOUNT. (a) I( a re!ei)i'- %a'5 has re!ei)e& #ore tha' o'e +a$#e't or&er o( the se'&er or o'e or #ore +a$#e't or&ers a'& other ite#s that are +a$a%le (ro# the se'&erBs a!!o/'t2 the %a'5 #a$ !har-e the se'&erBs a!!o/'t 1ith res+e!t to the )ario/s or&ers a'& ite#s i' a'$ se7/e'!e. (%) I' &eter#i'i'- 1hether a !re&it to a' a!!o/'t has %ee' 1ith&ra1' %$ the hol&er o( the a!!o/'t or a++lie& to a &e%t o( the hol&er o( the a!!o/'t2 !re&its (irst #a&e to the a!!o/'t are (irst 1ith&ra1' or a++lie&. 8A-909. PRECLUSION O> O@HECTION TO =E@IT O> CUSTOEERBS ACCOUNT. I( a re!ei)i'- %a'5 has re!ei)e& +a$#e't (ro# its !/sto#er 1ith res+e!t to a +a$#e't or&er iss/e& i' the 'a#e o( the !/sto#er as se'&er a'& a!!e+te& %$ the %a'52 a'& the !/sto#er re!ei)e& 'oti(i!atio' reaso'a%l$ i&e'ti($i'- the or&er2 the !/sto#er is +re!l/&e& (ro# asserti'- that the %a'5 is 'ot e'title& to retai' the +a$#e't /'less the !/sto#er 'oti(ies the %a'5 o( the !/sto#erBs o%6e!tio' to the +a$#e't 1ithi' o'e $ear a(ter the 'oti(i!atio' 1as re!ei)e& %$ the !/sto#er. 8A-90:. RATE O> INTEREST.

(a) I(2 /'&er this Arti!le2 a re!ei)i'- %a'5 is o%li-e& to +a$ i'terest 1ith res+e!t to a +a$#e't or&er iss/e& to the %a'52 the a#o/'t +a$a%le #a$ %e &eter#i'e& (i) %$ a-ree#e't o( the se'&er a'& re!ei)i'- %a'52 or (ii) %$ a (/'&s-tra's(er s$ste# r/le i( the +a$#e't or&er is tra's#itte& thro/-h a (/'&s-tra's(er s$ste#. (%) I( the a#o/'t o( i'terest is 'ot &eter#i'e& %$ a' a-ree#e't or r/le as state& i' s/%se!tio' (a)2 the a#o/'t is !al!/late& %$ #/lti+l$i'- the a++li!a%le >e&eral >/'&s rate %$ the a#o/'t o' 1hi!h i'terest is +a$a%le2 a'& the' #/lti+l$i'- the +ro&/!t %$ the '/#%er o( &a$s (or 1hi!h i'terest is +a$a%le. The a++li!a%le >e&eral >/'&s rate is the a)era-e o( the >e&eral >/'&s rates +/%lishe& %$ the >e&eral Reser)e @a'5 o( Ne1 Gor5 (or ea!h o( the &a$s (or 1hi!h i'terest is +a$a%le &i)i&e& %$ .:0. The >e&eral >/'&s rate (or a'$ &a$ o' 1hi!h a +/%lishe& rate is 'ot a)aila%le is the sa#e as the +/%lishe& rate (or the 'e,t +re!e&i'- &a$ (or 1hi!h there is a +/%lishe& rate. I( a re!ei)i'- %a'5 that a!!e+te& a +a$#e't or&er is re7/ire& to re(/'& +a$#e't to the se'&er o( the or&er %e!a/se the (/'&s tra's(er 1as 'ot !o#+lete&2 %/t the (ail/re to !o#+lete 1as 'ot &/e to a'$ (a/lt %$ the %a'52 the i'terest +a$a%le is re&/!e& %$ a +er!e'ta-e e7/al to the reser)e re7/ire#e't o' &e+osits o( the re!ei)i'- %a'5. 8A-90;. CDOICE O> LAC. (a) The (ollo1i'- r/les a++l$ /'less the a((e!te& +arties other1ise a-ree or s/%se!tio' (!) a++lies0 (1) The ri-hts a'& o%li-atio's %et1ee' the se'&er o( a +a$#e't or&er a'& the re!ei)i'%a'5 are -o)er'e& %$ the la1 o( the 6/ris&i!tio' i' 1hi!h the re!ei)i'- %a'5 is lo!ate&. (*) The ri-hts a'& o%li-atio's %et1ee' the %e'e(i!iar$Bs %a'5 a'& the %e'e(i!iar$ are -o)er'e& %$ the la1 o( the 6/ris&i!tio' i' 1hi!h the %e'e(i!iar$Bs %a'5 is lo!ate&. (.) The iss/e o( 1he' +a$#e't is #a&e +/rs/a't to a (/'&s tra's(er %$ the ori-i'ator to the %e'e(i!iar$ is -o)er'e& %$ the la1 o( the 6/ris&i!tio' i' 1hi!h the %e'e(i!iar$Bs %a'5 is lo!ate&. (%) I( the +arties &es!ri%e& i' ea!h +ara-ra+h o( s/%se!tio' (a) ha)e #a&e a' a-ree#e't sele!ti'- the la1 o( a +arti!/lar 6/ris&i!tio' to -o)er' ri-hts a'& o%li-atio's %et1ee' ea!h other2 the la1 o( that 6/ris&i!tio' -o)er's those ri-hts a'& o%li-atio's2 1hether or 'ot the +a$#e't or&er or the (/'&s tra's(er %ears a reaso'a%le relatio' to that 6/ris&i!tio'. (!) A (/'&s-tra's(er s$ste# r/le #a$ sele!t the la1 o( a +arti!/lar 6/ris&i!tio' to -o)er' (i) ri-hts a'& o%li-atio's %et1ee' +arti!i+ati'- %a'5s 1ith res+e!t to +a$#e't or&ers tra's#itte& or +ro!esse& thro/-h the s$ste#2 or (ii) the ri-hts a'& o%li-atio's o( so#e or all +arties to a (/'&s tra's(er a'$ +art o( 1hi!h is !arrie& o/t %$ #ea's o( the s$ste#. A !hoi!e o( la1 #a&e +/rs/a't to !la/se (i) is %i'&i'- o' +arti!i+ati'- %a'5s.

A !hoi!e o( la1 #a&e +/rs/a't to !la/se (ii) is %i'&i'- o' the ori-i'ator2 other se'&er2 or a re!ei)i'- %a'5 ha)i'- 'oti!e that the (/'&s-tra's(er s$ste# #i-ht %e /se& i' the (/'&s tra's(er a'& o( the !hoi!e o( la1 %$ the s$ste# 1he' the ori-i'ator2 other se'&er2 or re!ei)i'- %a'5 iss/e& or a!!e+te& a +a$#e't or&er. The %e'e(i!iar$ o( a (/'&s tra's(er is %o/'& %$ the !hoi!e o( la1 i(2 1he' the (/'&s tra's(er is i'itiate&2 the %e'e(i!iar$ has 'oti!e that the (/'&s-tra's(er s$ste# #i-ht %e /se& i' the (/'&s tra's(er a'& o( the !hoi!e o( la1 %$ the s$ste#. The la1 o( a 6/ris&i!tio' sele!te& +/rs/a't to this s/%se!tio' #a$ -o)er'2 1hether or 'ot that la1 %ears a reaso'a%le relatio' to the #atter i' iss/e. (&) I' the e)e't o( i'!o'siste'!$ %et1ee' a' a-ree#e't /'&er s/%se!tio' (%) a'& a !hoi!e-o(-la1 r/le /'&er s/%se!tio' (!)2 the a-ree#e't /'&er s/%se!tio' (%) +re)ails. (e) I( a (/'&s tra's(er is #a&e %$ /se o( #ore tha' o'e (/'&s-tra's(er s$ste# a'& there is i'!o'siste'!$ %et1ee' !hoi!e-o(-la1 r/les o( the s$ste#s2 the #atter i' iss/e is -o)er'e& %$ the la1 o( the sele!te& 6/ris&i!tio' that has the #ost si-'i(i!a't relatio'shi+ to the #atter i' iss/e. U.C.C. - ARTICLE 9 - LETTERS O> CRE=IT 9-101. Short Title. This Arti!le shall %e 5'o1' a'& #a$ %e !ite& as U'i(or# Co##er!ial Co&e-Letters o( Cre&it. 9-10*. =e(i'itio's. (a) I' this arti!le0 (1) ?A&)iser? #ea's a +erso' 1ho2 at the re7/est o( the iss/er2 a !o'(ir#er2 or a'other a&)iser2 'oti(ies or re7/ests a'other a&)iser to 'oti($ the %e'e(i!iar$ that a letter o( !re&it has %ee' iss/e&2 !o'(ir#e&2 or a#e'&e&. (*) ?A++li!a't? #ea's a +erso' at 1hose re7/est or (or 1hose a!!o/'t a letter o( !re&it is iss/e&. The ter# i'!l/&es a +erso' 1ho re7/ests a' iss/er to iss/e a letter o( !re&it o' %ehal( o( a'other i( the +erso' #a5i'- the re7/est /'&erta5es a' o%li-atio' to rei#%/rse the iss/er. (.) ?@e'e(i!iar$? #ea's a +erso' 1ho /'&er the ter#s o( a letter o( !re&it is e'title& to ha)e its !o#+l$i'- +rese'tatio' ho'ore&. The ter# i'!l/&es a +erso' to 1ho# &ra1i'ri-hts ha)e %ee' tra's(erre& /'&er a tra's(era%le letter o( !re&it. (8) ?Co'(ir#er? #ea's a 'o#i'ate& +erso' 1ho /'&erta5es2 at the re7/est or 1ith the !o'se't o( the iss/er2 to ho'or a +rese'tatio' /'&er a letter o( !re&it iss/e& %$ a'other.

(9) ?=isho'or? o( a letter o( !re&it #ea's (ail/re ti#el$ to ho'or or to ta5e a' i'teri# a!tio'2 s/!h as a!!e+ta'!e o( a &ra(t2 that #a$ %e re7/ire& %$ the letter o( !re&it. (:) ?=o!/#e't? #ea's a &ra(t or other &e#a'&2 &o!/#e't o( title2 i')est#e't se!/rit$2 !erti(i!ate2 i')oi!e2 or other re!or&2 state#e't2 or re+rese'tatio' o( (a!t2 la12 ri-ht2 or o+i'io' (i) 1hi!h is +rese'te& i' a 1ritte' or other #e&i/# +er#itte& %$ the letter o( !re&it or2 /'less +rohi%ite& %$ the letter o( !re&it2 %$ the sta'&ar& +ra!ti!e re(erre& to i' Se!tio' 9-10<(e) a'& (ii) 1hi!h is !a+a%le o( %ei'- e,a#i'e& (or !o#+lia'!e 1ith the ter#s a'& !o'&itio's o( the letter o( !re&it. A &o!/#e't #a$ 'ot %e oral. (;) ?Goo& (aith? #ea's ho'est$ i' (a!t i' the !o'&/!t or tra'sa!tio' !o'!er'e&. (<) ?Do'or? o( a letter o( !re&it #ea's +er(or#a'!e o( the iss/erBs /'&erta5i'- i' the letter o( !re&it to +a$ or &eli)er a' ite# o( )al/e. U'less the letter o( !re&it other1ise +ro)i&es2 ?ho'or? o!!/rs (i) /+o' +a$#e't2(ii) i( the letter o( !re&it +ro)i&es (or a!!e+ta'!e2 /+o' a!!e+ta'!e o( a &ra(t a'&2 at #at/rit$2 its +a$#e't2 or(iii) i( the letter o( !re&it +ro)i&es (or i'!/rri'- a &e(erre& o%li-atio'2 /+o' i'!/rri'- the o%li-atio' a'&2 at #at/rit$2 its +er(or#a'!e. (A) ?Iss/er? #ea's a %a'5 or other +erso' that iss/es a letter o( !re&it2 %/t &oes 'ot i'!l/&e a' i'&i)i&/al 1ho #a5es a' e'-a-e#e't (or +erso'al2 (a#il$2 or ho/sehol& +/r+oses. (10) ?Letter o( !re&it? #ea's a &e(i'ite /'&erta5i'- that satis(ies the re7/ire#e'ts o( Se!tio' 9-108 %$ a' iss/er to a %e'e(i!iar$ at the re7/est or (or the a!!o/'t o( a' a++li!a't or2 i' the !ase o( a (i'a'!ial i'stit/tio'2 to itsel( or (or its o1' a!!o/'t2 to ho'or a &o!/#e'tar$ +rese'tatio' %$ +a$#e't or &eli)er$ o( a' ite# o( )al/e. (11) ?No#i'ate& +erso'? #ea's a +erso' 1ho# the iss/er (i) &esi-'ates or a/thori3es to +a$2 a!!e+t2 'e-otiate2 or other1ise -i)e )al/e /'&er a letter o( !re&it a'& (ii) /'&erta5es %$ a-ree#e't or !/sto# a'& +ra!ti!e to rei#%/rse. (1*) ?Prese'tatio'? #ea's &eli)er$ o( a &o!/#e't to a' iss/er or 'o#i'ate& +erso' (or ho'or or -i)i'- o( )al/e /'&er a letter o( !re&it. (1.) ?Prese'ter? #ea's a +erso' #a5i'- a +rese'tatio' as or o' %ehal( o( a %e'e(i!iar$ or 'o#i'ate& +erso'. (18) ?Re!or&? #ea's i'(or#atio' that is i's!ri%e& o' a ta'-i%le #e&i/#2 or that is store& i' a' ele!tro'i! or other #e&i/# a'& is retrie)a%le i' +er!ei)a%le (or#. (19) ?S/!!essor o( a %e'e(i!iar$? #ea's a +erso' 1ho s/!!ee&s to s/%sta'tiall$ all o( the ri-hts o( a %e'e(i!iar$ %$ o+eratio' o( la12 i'!l/&i'- a !or+oratio' 1ith or i'to 1hi!h

the %e'e(i!iar$ has %ee' #er-e& or !o'soli&ate&2 a' a&#i'istrator2 e,e!/tor2 +erso'al re+rese'tati)e2 tr/stee i' %a'5r/+t!$2 &e%tor i' +ossessio'2 li7/i&ator2 a'& re!ei)er. (%) =e(i'itio's i' other Arti!les a++l$i'- to this arti!le a'& the se!tio's i' 1hi!h the$ a++ear are0 ?A!!e+t? or ?A!!e+ta'!e? ?Val/e? Se!tio' .-80A

Se!tio's .-.0.2 8-*11

(!) Arti!le 1 !o'tai's !ertai' a&&itio'al -e'eral &e(i'itio's a'& +ri'!i+les o( !o'str/!tio' a'& i'ter+retatio' a++li!a%le thro/-ho/t this arti!le. 9-10.. S!o+e. (a) This arti!le a++lies to letters o( !re&it a'& to !ertai' ri-hts a'& o%li-atio's arisi'o/t o( tra'sa!tio's i')ol)i'- letters o( !re&it. (%) The state#e't o( a r/le i' this arti!le &oes 'ot %$ itsel( re7/ire2 i#+l$2 or 'e-ate a++li!atio' o( the sa#e or a &i((ere't r/le to a sit/atio' 'ot +ro)i&e& (or2 or to a +erso' 'ot s+e!i(ie&2 i' this arti!le. (!) Cith the e,!e+tio' o( this s/%se!tio'2 s/%se!tio's (a) a'& (&)2 Se!tio's 9-10*(a)(A) a'& (10)2 9-10:(&)2 a'& 9-118(&)2 a'& e,!e+t to the e,te't +rohi%ite& i' Se!tio's 1-.0* a'& 9-11;(&)2 the e((e!t o( this arti!le #a$ %e )arie& %$ a-ree#e't or %$ a +ro)isio' state& or i'!or+orate& %$ re(ere'!e i' a' /'&erta5i'-. A ter# i' a' a-ree#e't or /'&erta5i'- -e'erall$ e,!/si'- lia%ilit$ or -e'erall$ li#iti'- re#e&ies (or (ail/re to +er(or# o%li-atio's is 'ot s/((i!ie't to )ar$ o%li-atio's +res!ri%e& %$ this arti!le. (&) Ri-hts a'& o%li-atio's o( a' iss/er to a %e'e(i!iar$ or a 'o#i'ate& +erso' /'&er a letter o( !re&it are i'&e+e'&e't o( the e,iste'!e2 +er(or#a'!e2 or 'o'+er(or#a'!e o( a !o'tra!t or arra'-e#e't o/t o( 1hi!h the letter o( !re&it arises or 1hi!h /'&erlies it2 i'!l/&i'- !o'tra!ts or arra'-e#e'ts %et1ee' the iss/er a'& the a++li!a't a'& %et1ee' the a++li!a't a'& the %e'e(i!iar$. 9-108. >or#al Re7/ire#e'ts. A letter o( !re&it2 !o'(ir#atio'2 a&)i!e2 tra's(er2 a#e'&#e't2 or !a'!ellatio' #a$ %e iss/e& i' a'$ (or# that is a re!or& a'& is a/the'ti!ate& (i) %$ a si-'at/re or (ii) i' a!!or&a'!e 1ith the a-ree#e't o( the +arties or the sta'&ar& +ra!ti!e re(erre& to i' Se!tio' 9-10<(e). 9-109. Co'si&eratio'.

Co'si&eratio' is 'ot re7/ire& to iss/e2 a#e'&2 tra's(er2 or !a'!el a letter o( !re&it2 a&)i!e2 or !o'(ir#atio'. 9-10:. Iss/a'!e2 A#e'&#e't2 Ca'!ellatio'2 a'& =/ratio'. (a) A letter o( !re&it is iss/e& a'& %e!o#es e'(or!ea%le a!!or&i'- to its ter#s a-ai'st the iss/er 1he' the iss/er se'&s or other1ise tra's#its it to the +erso' re7/este& to a&)ise or to the %e'e(i!iar$. A letter o( !re&it is re)o!a%le o'l$ i( it so +ro)i&es. (%) A(ter a letter o( !re&it is iss/e&2 ri-hts a'& o%li-atio's o( a %e'e(i!iar$2 a++li!a't2 !o'(ir#er2 a'& iss/er are 'ot a((e!te& %$ a' a#e'&#e't or !a'!ellatio' to 1hi!h that +erso' has 'ot !o'se'te& e,!e+t to the e,te't the letter o( !re&it +ro)i&es that it is re)o!a%le or that the iss/er #a$ a#e'& or !a'!el the letter o( !re&it 1itho/t that !o'se't. (!) I( there is 'o state& e,+iratio' &ate or other +ro)isio' that &eter#i'es its &/ratio'2 a letter o( !re&it e,+ires o'e $ear a(ter its state& &ate o( iss/a'!e or2 i( 'o'e is state&2 a(ter the &ate o' 1hi!h it is iss/e&. (&) A letter o( !re&it that states that it is +er+et/al e,+ires (i)e $ears a(ter its state& &ate o( iss/a'!e2 or i( 'o'e is state&2 a(ter the &ate o' 1hi!h it is iss/e&. 9-10;. Co'(ir#er2 No#i'ate& Perso'2 a'& A&)iser. (a) A !o'(ir#er is &ire!tl$ o%li-ate& o' a letter o( !re&it a'& has the ri-hts a'& o%li-atio's o( a' iss/er to the e,te't o( its !o'(ir#atio'. The !o'(ir#er also has ri-hts a-ai'st a'& o%li-atio's to the iss/er as i( the iss/er 1ere a' a++li!a't a'& the !o'(ir#er ha& iss/e& the letter o( !re&it at the re7/est a'& (or the a!!o/'t o( the iss/er. (%) A 'o#i'ate& +erso' 1ho is 'ot a !o'(ir#er is 'ot o%li-ate& to ho'or or other1ise -i)e )al/e (or a +rese'tatio'. (!) A +erso' re7/este& to a&)ise #a$ &e!li'e to a!t as a' a&)iser. A' a&)iser that is 'ot a !o'(ir#er is 'ot o%li-ate& to ho'or or -i)e )al/e (or a +rese'tatio'. A' a&)iser /'&erta5es to the iss/er a'& to the %e'e(i!iar$ a!!/ratel$ to a&)ise the ter#s o( the letter o( !re&it2 !o'(ir#atio'2 a#e'&#e't2 or a&)i!e re!ei)e& %$ that +erso' a'& /'&erta5es to the %e'e(i!iar$ to !he!5 the a++are't a/the'ti!it$ o( the re7/est to a&)ise. E)e' i( the a&)i!e is i'a!!/rate2 the letter o( !re&it2 !o'(ir#atio'2 or a#e'&#e't is e'(or!ea%le as iss/e&. (&) A +erso' 1ho 'oti(ies a tra's(eree %e'e(i!iar$ o( the ter#s o( a letter o( !re&it2 !o'(ir#atio'2 a#e'&#e't2 or a&)i!e has the ri-hts a'& o%li-atio's o( a' a&)iser /'&er s/%se!tio' (!). The ter#s i' the 'oti!e to the tra's(eree %e'e(i!iar$ #a$ &i((er (ro# the

ter#s i' a'$ 'oti!e to the tra's(eror %e'e(i!iar$ to the e,te't +er#itte& %$ the letter o( !re&it2 !o'(ir#atio'2 a#e'&#e't2 or a&)i!e re!ei)e& %$ the +erso' 1ho so 'oti(ies. 9-10<. Iss/erBs Ri-hts a'& O%li-atio's (a) E,!e+t as other1ise +ro)i&e& i' Se!tio' 9-10A2 a' iss/er shall ho'or a +rese'tatio' that2 as &eter#i'e& %$ the sta'&ar& +ra!ti!e re(erre& to i' s/%se!tio' (e)2 a++ears o' its (a!e stri!tl$ to !o#+l$ 1ith the ter#s a'& !o'&itio's o( the letter o( !re&it. E,!e+t as other1ise +ro)i&e& i' Se!tio' 9-11. a'& /'less other1ise a-ree& 1ith the a++li!a't2 a' iss/er shall &isho'or a +rese'tatio' that &oes 'ot a++ear so to !o#+l$. (%) A' iss/er has a reaso'a%le ti#e a(ter +rese'tatio'2 %/t 'ot %e$o'& the e'& o( the se)e'th %/si'ess &a$ o( the iss/er a(ter the &a$ o( its re!ei+t o( &o!/#e'ts0 (1) to ho'or2 (*) i( the letter o( !re&it +ro)i&es (or ho'or to %e !o#+lete& #ore tha' se)e' %/si'ess &a$s a(ter +rese'tatio'2 to a!!e+t a &ra(t or i'!/r a &e(erre& o%li-atio'2 or (.) to -i)e 'oti!e to the +rese'ter o( &is!re+a'!ies i' the +rese'tatio'. (!) E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&)2 a' iss/er is +re!l/&e& (ro# asserti'- as a %asis (or &isho'or a'$ &is!re+a'!$ i( ti#el$ 'oti!e is 'ot -i)e'2 or a'$ &is!re+a'!$ 'ot state& i' the 'oti!e i( ti#el$ 'oti!e is -i)e'. (&) >ail/re to -i)e the 'oti!e s+e!i(ie& i' s/%se!tio' (%) or to #e'tio' (ra/&2 (or-er$2 or e,+iratio' i' the 'oti!e &oes 'ot +re!l/&e the iss/er (ro# asserti'- as a %asis (or &isho'or (ra/& or (or-er$ as &es!ri%e& i' Se!tio' 9-10A(a) or e,+iratio' o( the letter o( !re&it %e(ore +rese'tatio'. (e) A' iss/er shall o%ser)e sta'&ar& +ra!ti!e o( (i'a'!ial i'stit/tio's that re-/larl$ iss/e letters o( !re&it. =eter#i'atio' o( the iss/erBs o%ser)a'!e o( the sta'&ar& +ra!ti!e is a #atter o( i'ter+retatio' (or the !o/rt. The !o/rt shall o((er the +arties a reaso'a%le o++ort/'it$ to +rese't e)i&e'!e o( the sta'&ar& +ra!ti!e. (() A' iss/er is 'ot res+o'si%le (or0 (1) the +er(or#a'!e or 'o'+er(or#a'!e o( the /'&erl$i'- !o'tra!t2 arra'-e#e't2 or tra'sa!tio'2 (*) a' a!t or o#issio' o( others2 or (.) o%ser)a'!e or 5'o1le&-e o( the /sa-e o( a +arti!/lar tra&e other tha' the sta'&ar& +ra!ti!e re(erre& to i' s/%se!tio' (e).

(-) I( a' /'&erta5i'- !o'stit/ti'- a letter o( !re&it /'&er Se!tio' 9-10*(a)(10) !o'tai's 'o'&o!/#e'tar$ !o'&itio's2 a' iss/er shall &isre-ar& the 'o'&o!/#e'tar$ !o'&itio's a'& treat the# as i( the$ 1ere 'ot state&. (h) A' iss/er that has &isho'ore& a +rese'tatio' shall ret/r' the &o!/#e'ts or hol& the# at the &is+osal o(2 a'& se'& a&)i!e to that e((e!t to2 the +rese'ter. (i) A' iss/er that has ho'ore& a +rese'tatio' as +er#itte& or re7/ire& %$ this arti!le0 (1) is e'title& to %e rei#%/rse& %$ the a++li!a't i' i##e&iatel$ a)aila%le (/'&s 'ot later tha' the &ate o( its +a$#e't o( (/'&s4 (*) ta5es the &o!/#e'ts (ree o( !lai#s o( the %e'e(i!iar$ or +rese'ter4 (.) is +re!l/&e& (ro# asserti'- a ri-ht o( re!o/rse o' a &ra(t /'&er Se!tio's .-818 a'& .-8194 (8) e,!e+t as other1ise +ro)i&e& i' Se!tio's 9-110 a'& 9-11;2 is +re!l/&e& (ro# restit/tio' o( #o'e$ +ai& or other )al/e -i)e' %$ #ista5e to the e,te't the #ista5e !o'!er's &is!re+a'!ies i' the &o!/#e'ts or te'&er 1hi!h are a++are't o' the (a!e o( the +rese'tatio'4 a'& (9) is &is!har-e& to the e,te't o( its +er(or#a'!e /'&er the letter o( !re&it /'less the iss/er ho'ore& a +rese'tatio' i' 1hi!h a re7/ire& si-'at/re o( a %e'e(i!iar$ 1as (or-e&. 9-10A. >ra/& a'& >or-er$. (a) I( a +rese'tatio' is #a&e that a++ears o' its (a!e stri!tl$ to !o#+l$ 1ith the ter#s a'& !o'&itio's o( the letter o( !re&it2 %/t a re7/ire& &o!/#e't is (or-e& or #ateriall$ (ra/&/le't2 or ho'or o( the +rese'tatio' 1o/l& (a!ilitate a #aterial (ra/& %$ the %e'e(i!iar$ o' the iss/er or a++li!a't0 (1) the iss/er shall ho'or the +rese'tatio'2 i( ho'or is &e#a'&e& %$ (i) a 'o#i'ate& +erso' 1ho has -i)e' )al/e i' -oo& (aith a'& 1itho/t 'oti!e o( (or-er$ or #aterial (ra/&2 (ii) a !o'(ir#er 1ho has ho'ore& its !o'(ir#atio' i' -oo& (aith2 (iii) a hol&er i' &/e !o/rse o( a &ra(t &ra1' /'&er the letter o( !re&it 1hi!h 1as ta5e' a(ter a!!e+ta'!e %$ the iss/er or 'o#i'ate& +erso'2 or (i)) a' assi-'ee o( the iss/erBs or 'o#i'ate& +erso'Bs &e(erre& o%li-atio' that 1as ta5e' (or )al/e a'& 1itho/t 'oti!e o( (or-er$ or #aterial (ra/& a(ter the o%li-atio' 1as i'!/rre& %$ the iss/er or 'o#i'ate& +erso'4 a'& (*) the iss/er2 a!ti'- i' -oo& (aith2 #a$ ho'or or &isho'or the +rese'tatio' i' a'$ other !ase.

(%) I( a' a++li!a't !lai#s that a re7/ire& &o!/#e't is (or-e& or #ateriall$ (ra/&/le't or that ho'or o( the +rese'tatio' 1o/l& (a!ilitate a #aterial (ra/& %$ the %e'e(i!iar$ o' the iss/er or a++li!a't2 a !o/rt o( !o#+ete't 6/ris&i!tio' #a$ te#+oraril$ or +er#a'e'tl$ e'6oi' the iss/er (ro# ho'ori'- a +rese'tatio' or -ra't si#ilar relie( a-ai'st the iss/er or other +erso's o'l$ i( the !o/rt (i'&s that0 (1) the relie( is 'ot +rohi%ite& /'&er the la1 a++li!a%le to a' a!!e+te& &ra(t or &e(erre& o%li-atio' i'!/rre& %$ the iss/er4 (*) a %e'e(i!iar$2 iss/er2 or 'o#i'ate& +erso' 1ho #a$ %e a&)ersel$ a((e!te& is a&e7/atel$ +rote!te& a-ai'st loss that it #a$ s/((er %e!a/se the relie( is -ra'te&4 (.) all o( the !o'&itio's to e'title a +erso' to the relie( /'&er the la1 o( this State ha)e %ee' #et4 a'& (8) o' the %asis o( the i'(or#atio' s/%#itte& to the !o/rt2 the a++li!a't is #ore li5el$ tha' 'ot to s/!!ee& /'&er its !lai# o( (or-er$ or #aterial (ra/& a'& the +erso' &e#a'&i'- ho'or &oes 'ot 7/ali($ (or +rote!tio' /'&er s/%se!tio' (a)(1). 9-110. Carra'ties. (a) I( its +rese'tatio' is ho'ore&2 the %e'e(i!iar$ 1arra'ts0 (1) to the iss/er2 a'$ other +erso' to 1ho# +rese'tatio' is #a&e2 a'& the a++li!a't that there is 'o (ra/& or (or-er$ o( the 5i'& &es!ri%e& i' Se!tio' 9-10A(a)4 a'& (*) to the a++li!a't that the &ra1i'- &oes 'ot )iolate a'$ a-ree#e't %et1ee' the a++li!a't a'& %e'e(i!iar$ or a'$ other a-ree#e't i'te'&e& %$ the# to %e a/-#e'te& %$ the letter o( !re&it. (%) The 1arra'ties i' s/%se!tio' (a) are i' a&&itio' to 1arra'ties arisi'- /'&er Arti!le .2 82 ;2 a'& < %e!a/se o( the +rese'tatio' or tra's(er o( &o!/#e'ts !o)ere& %$ a'$ o( those arti!les. 9-111. Re#e&ies. (a) I( a' iss/er 1ro'-(/ll$ &isho'ors or re+/&iates its o%li-atio' to +a$ #o'e$ /'&er a letter o( !re&it %e(ore +rese'tatio'2 the %e'e(i!iar$2 s/!!essor2 or 'o#i'ate& +erso' +rese'ti'- o' its o1' %ehal( #a$ re!o)er (ro# the iss/er the a#o/'t that is the s/%6e!t o( the &isho'or or re+/&iatio'. I( the iss/erBs o%li-atio' /'&er the letter o( !re&it is 'ot (or the +a$#e't o( #o'e$2 the !lai#a't #a$ o%tai' s+e!i(i! +er(or#a'!e or2 at the !lai#a'tBs ele!tio'2 re!o)er a' a#o/'t e7/al to the )al/e o( +er(or#a'!e (ro# the iss/er. I' either !ase2 the !lai#a't #a$ also re!o)er i'!i&e'tal %/t 'ot !o'se7/e'tial &a#a-es. The !lai#a't is 'ot o%li-ate& to ta5e a!tio' to a)oi& &a#a-es that #i-ht %e

&/e (ro# the iss/er /'&er this s/%se!tio'. I(2 altho/-h 'ot o%li-ate& to &o so2 the !lai#a't a)oi&s &a#a-es2 the !lai#a'tBs re!o)er$ (ro# the iss/er #/st %e re&/!e& %$ the a#o/'t o( &a#a-es a)oi&e&. The iss/er has the %/r&e' o( +ro)i'- the a#o/'t o( &a#a-es a)oi&e&. I' the !ase o( re+/&iatio' the !lai#a't 'ee& 'ot +rese't a'$ &o!/#e't. (%) I( a' iss/er 1ro'-(/ll$ &isho'ors a &ra(t or &e#a'& +rese'te& /'&er a letter o( !re&it or ho'ors a &ra(t or &e#a'& i' %rea!h o( its o%li-atio' to the a++li!a't2 the a++li!a't #a$ re!o)er &a#a-es res/lti'- (ro# the %rea!h2 i'!l/&i'- i'!i&e'tal %/t 'ot !o'se7/e'tial &a#a-es2 less a'$ a#o/'t sa)e& as a res/lt o( the %rea!h. (!) I( a' a&)iser or 'o#i'ate& +erso' other tha' a !o'(ir#er %rea!hes a' o%li-atio' /'&er this arti!le or a' iss/er %rea!hes a' o%li-atio' 'ot !o)ere& i' s/%se!tio' (a) or (%)2 a +erso' to 1ho# the o%li-atio' is o1e& #a$ re!o)er &a#a-es res/lti'- (ro# the %rea!h2 i'!l/&i'- i'!i&e'tal %/t 'ot !o'se7/e'tial &a#a-es2 less a'$ a#o/'t sa)e& as a res/lt o( the %rea!h. To the e,te't o( the !o'(ir#atio'2 a !o'(ir#er has the lia%ilit$ o( a' iss/er s+e!i(ie& i' this s/%se!tio' a'& s/%se!tio's (a) a'& (%). (&) A' iss/er2 'o#i'ate& +erso'2 or a&)iser 1ho is (o/'& lia%le /'&er s/%se!tio' (a)2 (%)2 or (!) shall +a$ i'terest o' the a#o/'t o1e& there/'&er (ro# the &ate o( 1ro'-(/l &isho'or or other a++ro+riate &ate. (e) Reaso'a%le attor'e$Bs (ees a'& other e,+e'ses o( liti-atio' #/st %e a1ar&e& to the +re)aili'- +art$ i' a' a!tio' i' 1hi!h a re#e&$ is so/-ht /'&er this arti!le. (() =a#a-es that 1o/l& other1ise %e +a$a%le %$ a +art$ (or %rea!h o( a' o%li-atio' /'&er this arti!le #a$ %e li7/i&ate& %$ a-ree#e't or /'&erta5i'-2 %/t o'l$ i' a' a#o/'t or %$ a (or#/la that is reaso'a%le i' li-ht o( the har# a'ti!i+ate&. 9-11*. Tra's(er o( Letter o( Cre&it. (a) E,!e+t as other1ise +ro)i&e& i' Se!tio' 9-11.2 /'less a letter o( !re&it +ro)i&es that it is tra's(era%le2 the ri-ht o( a %e'e(i!iar$ to &ra1 or other1ise &e#a'& +er(or#a'!e /'&er a letter o( !re&it #a$ 'ot %e tra's(erre&. (%) E)e' i( a letter o( !re&it +ro)i&es that it is tra's(era%le2 the iss/er #a$ re(/se to re!o-'i3e or !arr$ o/t a tra's(er i(0 (1) the tra's(er 1o/l& )iolate a++li!a%le la14 or (*) the tra's(eror or tra's(eree has (aile& to !o#+l$ 1ith a'$ re7/ire#e't state& i' the letter o( !re&it or a'$ other re7/ire#e't relati'- to tra's(er i#+ose& %$ the iss/er 1hi!h is 1ithi' the sta'&ar& +ra!ti!e re(erre& to i' Se!tio' 9-10<(e) or is other1ise reaso'a%le /'&er the !ir!/#sta'!es.

 9-11.. Tra's(er %$ O+eratio' o( La1. (a) A s/!!essor o( a %e'e(i!iar$ #a$ !o'se't to a#e'&#e'ts2 si-' a'& +rese't &o!/#e'ts2 a'& re!ei)e +a$#e't or other ite#s o( )al/e i' the 'a#e o( the %e'e(i!iar$ 1itho/t &is!losi'- its stat/s as a s/!!essor. (%) A s/!!essor o( a %e'e(i!iar$ #a$ !o'se't to a#e'&#e'ts2 si-' a'& +rese't &o!/#e'ts2 a'& re!ei)e +a$#e't or other ite#s o( )al/e i' its o1' 'a#e as the &is!lose& s/!!essor o( the %e'e(i!iar$. E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (e)2 a' iss/er shall re!o-'i3e a &is!lose& s/!!essor o( a %e'e(i!iar$ as %e'e(i!iar$ i' (/ll s/%stit/tio' (or its +re&e!essor /+o' !o#+lia'!e 1ith the re7/ire#e'ts (or re!o-'itio' %$ the iss/er o( a tra's(er o( &ra1i'- ri-hts %$ o+eratio' o( la1 /'&er the sta'&ar& +ra!ti!e re(erre& to i' Se!tio' 9-10<(e) or2 i' the a%se'!e o( s/!h a +ra!ti!e2 !o#+lia'!e 1ith other reaso'a%le +ro!e&/res s/((i!ie't to +rote!t the iss/er. (!) A' iss/er is 'ot o%li-e& to &eter#i'e 1hether a +/r+orte& s/!!essor is a s/!!essor o( a %e'e(i!iar$ or 1hether the si-'at/re o( a +/r+orte& s/!!essor is -e'/i'e or a/thori3e&. (&) Do'or o( a +/r+orte& s/!!essorBs a++are'tl$ !o#+l$i'- +rese'tatio' /'&er s/%se!tio' (a) or (%) has the !o'se7/e'!es s+e!i(ie& i' Se!tio' 9-10<(i) e)e' i( the +/r+orte& s/!!essor is 'ot the s/!!essor o( a %e'e(i!iar$. =o!/#e'ts si-'e& i' the 'a#e o( the %e'e(i!iar$ or o( a &is!lose& s/!!essor %$ a +erso' 1ho is 'either the %e'e(i!iar$ 'or the s/!!essor o( the %e'e(i!iar$ are (or-e& &o!/#e'ts (or the +/r+oses o( Se!tio' 9-10A. (e) A' iss/er 1hose ri-hts o( rei#%/rse#e't are 'ot !o)ere& %$ s/%se!tio' (&) or s/%sta'tiall$ si#ilar la1 a'& a'$ !o'(ir#er or 'o#i'ate& +erso' #a$ &e!li'e to re!o-'i3e a +rese'tatio' /'&er s/%se!tio' (%). (() A %e'e(i!iar$ 1hose 'a#e is !ha'-e& a(ter the iss/a'!e o( a letter o( !re&it has the sa#e ri-hts a'& o%li-atio's as a s/!!essor o( a %e'e(i!iar$ /'&er this se!tio'. 9-118. Assi-'#e't o( Pro!ee&s. (a) I' this se!tio'2 ?+ro!ee&s o( a letter o( !re&it? #ea's the !ash2 !he!52 a!!e+te& &ra(t2 or other ite# o( )al/e +ai& or &eli)ere& /+o' ho'or or -i)i'- o( )al/e %$ the iss/er or a'$ 'o#i'ate& +erso' /'&er the letter o( !re&it. The ter# &oes 'ot i'!l/&e a %e'e(i!iar$Bs &ra1i'- ri-hts or &o!/#e'ts +rese'te& %$ the %e'e(i!iar$. (%) A %e'e(i!iar$ #a$ assi-' its ri-ht to +art or all o( the +ro!ee&s o( a letter o( !re&it. The %e'e(i!iar$ #a$ &o so %e(ore +rese'tatio' as a +rese't assi-'#e't o( its ri-ht to

re!ei)e +ro!ee&s !o'ti'-e't /+o' its !o#+lia'!e 1ith the ter#s a'& !o'&itio's o( the letter o( !re&it. (!) A' iss/er or 'o#i'ate& +erso' 'ee& 'ot re!o-'i3e a' assi-'#e't o( +ro!ee&s o( a letter o( !re&it /'til it !o'se'ts to the assi-'#e't. (&) A' iss/er or 'o#i'ate& +erso' has 'o o%li-atio' to -i)e or 1ithhol& its !o'se't to a' assi-'#e't o( +ro!ee&s o( a letter o( !re&it2 %/t !o'se't #a$ 'ot %e /'reaso'a%l$ 1ithhel& i( the assi-'ee +ossesses a'& e,hi%its the letter o( !re&it a'& +rese'tatio' o( the letter o( !re&it is a !o'&itio' to ho'or. (e) Ri-hts o( a tra's(eree %e'e(i!iar$ or 'o#i'ate& +erso' are i'&e+e'&e't o( the %e'e(i!iar$Bs assi-'#e't o( the +ro!ee&s o( a letter o( !re&it a'& are s/+erior to the assi-'eeBs ri-ht to the +ro!ee&s. (() Neither the ri-hts re!o-'i3e& %$ this se!tio' %et1ee' a' assi-'ee a'& a' iss/er2 tra's(eree %e'e(i!iar$2 or 'o#i'ate& +erso' 'or the iss/erBs or 'o#i'ate& +erso'Bs +a$#e't o( +ro!ee&s to a' assi-'ee or a thir& +erso' a((e!t the ri-hts %et1ee' the assi-'ee a'& a'$ +erso' other tha' the iss/er2 tra's(eree %e'e(i!iar$2 or 'o#i'ate& +erso'. The #o&e o( !reati'- a'& +er(e!ti'- a se!/rit$ i'terest i' or -ra'ti'- a' assi-'#e't o( a %e'e(i!iar$Bs ri-hts to +ro!ee&s is -o)er'e& %$ Arti!le A or other la1. A-ai'st +erso's other tha' the iss/er2 tra's(eree %e'e(i!iar$2 or 'o#i'ate& +erso'2 the ri-hts a'& o%li-atio's arisi'- /+o' the !reatio' o( a se!/rit$ i'terest or other assi-'#e't o( a %e'e(i!iar$Bs ri-ht to +ro!ee&s a'& its +er(e!tio' are -o)er'e& %$ Arti!le A or other la1. 9-119. Stat/te o( Li#itatio's. A' a!tio' to e'(or!e a ri-ht or o%li-atio' arisi'- /'&er this arti!le #/st %e !o##e'!e& 1ithi' o'e $ear a(ter the e,+iratio' &ate o( the rele)a't letter o( !re&it or o'e $ear a(ter the !lai# (or relie(" !a/se o( a!tio'" a!!r/es2 1hi!he)er o!!/rs later. A !lai# (or relie(" !a/se o( a!tio'" a!!r/es 1he' the %rea!h o!!/rs2 re-ar&less o( the a--rie)e& +art$Bs la!5 o( 5'o1le&-e o( the %rea!h. 9-11:. Choi!e o( La1 a'& >or/#. (a) The lia%ilit$ o( a' iss/er2 'o#i'ate& +erso'2 or a&)iser (or a!tio' or o#issio' is -o)er'e& %$ the la1 o( the 6/ris&i!tio' !hose' %$ a' a-ree#e't i' the (or# o( a re!or& si-'e& or other1ise a/the'ti!ate& %$ the a((e!te& +arties i' the #a''er +ro)i&e& i' Se!tio' 9-108 or %$ a +ro)isio' i' the +erso'Bs letter o( !re&it2 !o'(ir#atio'2 or other /'&erta5i'-. The 6/ris&i!tio' 1hose la1 is !hose' 'ee& 'ot %ear a'$ relatio' to the tra'sa!tio'.

(%) U'less s/%se!tio' (a) a++lies2 the lia%ilit$ o( a' iss/er2 'o#i'ate& +erso'2 or a&)iser (or a!tio' or o#issio' is -o)er'e& %$ the la1 o( the 6/ris&i!tio' i' 1hi!h the +erso' is lo!ate&. The +erso' is !o'si&ere& to %e lo!ate& at the a&&ress i'&i!ate& i' the +erso'Bs /'&erta5i'-. I( #ore tha' o'e a&&ress is i'&i!ate&2 the +erso' is !o'si&ere& to %e lo!ate& at the a&&ress (ro# 1hi!h the +erso'Bs /'&erta5i'- 1as iss/e&. >or the +/r+ose o( 6/ris&i!tio'2 !hoi!e o( la12 a'& re!o-'itio' o( i'ter%ra'!h letters o( !re&it2 %/t 'ot e'(or!e#e't o( a 6/&-#e't2 all %ra'!hes o( a %a'5 are !o'si&ere& se+arate 6/ri&i!al e'tities a'& a %a'5 is !o'si&ere& to %e lo!ate& at the +la!e 1here its rele)a't %ra'!h is !o'si&ere& to %e lo!ate& /'&er this s/%se!tio'. (!) E,!e+t as other1ise +ro)i&e& i' this s/%se!tio'2 the lia%ilit$ o( a' iss/er2 'o#i'ate& +erso'2 or a&)iser is -o)er'e& %$ a'$ r/les o( !/sto# or +ra!ti!e2 s/!h as the U'i(or# C/sto#s a'& Pra!ti!e (or =o!/#e'tar$ Cre&its2 to 1hi!h the letter o( !re&it2 !o'(ir#atio'2 or other /'&erta5i'- is e,+ressl$ #a&e s/%6e!t. I( (i) this arti!le 1o/l& -o)er' the lia%ilit$ o( a' iss/er2 'o#i'ate& +erso'2 or a&)iser /'&er s/%se!tio' (a) or (%)2 (ii) the rele)a't /'&erta5i'- i'!or+orates r/les o( !/sto# or +ra!ti!e2 a'& (iii) there is !o'(li!t %et1ee' this arti!le a'& those r/les as a++lie& to that /'&erta5i'-2 those r/les -o)er' e,!e+t to the e,te't o( a'$ !o'(li!t 1ith the 'o')aria%le +ro)isio's s+e!i(ie& i' Se!tio' 9-10.(!). (&) I( there is !o'(li!t %et1ee' this arti!le a'& Arti!le .2 82 8A2 or A2 this arti!le -o)er's. (e) The (or/# (or settli'- &is+/tes arisi'- o/t o( a' /'&erta5i'- 1ithi' this arti!le #a$ %e !hose' i' the #a''er a'& 1ith the %i'&i'- e((e!t that -o)er'i'- la1 #a$ %e !hose' i' a!!or&a'!e 1ith s/%se!tio' (a). 9-11;. S/%ro-atio' o( Iss/er2 A++li!a't2 a'& No#i'ate& Perso'. (a) A' iss/er that ho'ors a %e'e(i!iar$Bs +rese'tatio' is s/%ro-ate& to the ri-hts o( the %e'e(i!iar$ to the sa#e e,te't as i( the iss/er 1ere a se!o'&ar$ o%li-or o( the /'&erl$i'- o%li-atio' o1e& to the %e'e(i!iar$ a'& o( the a++li!a't to the sa#e e,te't as i( the iss/er 1ere the se!o'&ar$ o%li-or o( the /'&erl$i'- o%li-atio' o1e& to the a++li!a't. (%) A' a++li!a't that rei#%/rses a' iss/er is s/%ro-ate& to the ri-hts o( the iss/er a-ai'st a'$ %e'e(i!iar$2 +rese'ter2 or 'o#i'ate& +erso' to the sa#e e,te't as i( the a++li!a't 1ere the se!o'&ar$ o%li-or o( the o%li-atio's o1e& to the iss/er a'& has the ri-hts o( s/%ro-atio' o( the iss/er to the ri-hts o( the %e'e(i!iar$ state& i' s/%se!tio' (a). (!) A 'o#i'ate& +erso' 1ho +a$s or -i)es )al/e a-ai'st a &ra(t or &e#a'& +rese'te& /'&er a letter o( !re&it is s/%ro-ate& to the ri-hts o(0

(1) the iss/er a-ai'st the a++li!a't to the sa#e e,te't as i( the 'o#i'ate& +erso' 1ere a se!o'&ar$ o%li-or o( the o%li-atio' o1e& to the iss/er %$ the a++li!a't4 (*) the %e'e(i!iar$ to the sa#e e,te't as i( the 'o#i'ate& +erso' 1ere a se!o'&ar$ o%li-or o( the /'&erl$i'- o%li-atio' o1e& to the %e'e(i!iar$4 a'& (.) the a++li!a't to sa#e e,te't as i( the 'o#i'ate& +erso' 1ere a se!o'&ar$ o%li-or o( the /'&erl$i'- o%li-atio' o1e& to the a++li!a't. (&) Not1ithsta'&i'- a'$ a-ree#e't or ter# to the !o'trar$2 the ri-hts o( s/%ro-atio' state& i' s/%se!tio's (a) a'& (%) &o 'ot arise /'til the iss/er ho'ors the letter o( !re&it or other1ise +a$s a'& the ri-hts i' s/%se!tio' (!) &o 'ot arise /'til the 'o#i'ate& +erso' +a$s or other1ise -i)es )al/e. U'til the'2 the iss/er2 'o#i'ate& +erso'2 a'& the a++li!a't &o 'ot &eri)e /'&er this se!tio' +rese't or +ros+e!ti)e ri-hts (or#i'- the %asis o( a !lai#2 &e(e'se2 or e,!/se. 9-11<. Se!/rit$ I'terest o( Iss/er or No#i'ate& Perso'. (a) A' iss/er or 'o#i'ate& +erso' has a se!/rit$ i'terest i' a &o!/#e't +rese'te& /'&er a letter o( !re&it a'& a'$ i&e'ti(ia%le +ro!ee&s o( the !ollateral to the e,te't that the iss/er or 'o#i'ate& +erso' ho'ors or -i)es )al/e (or the +rese'tatio'. (%) S/%6e!t to s/%se!tio' (!)2 as lo'- as a'& to the e,te't that a' iss/er or 'o#i'ate& +erso' has 'ot %ee' rei#%/rse& or has 'ot other1ise re!o)ere& the )al/e -i)e' 1ith res+e!t to a se!/rit$ i'terest i' a &o!/#e't /'&er s/%se!tio' (a)2 the se!/rit$ i'terest !o'ti'/es a'& is s/%6e!t to Arti!le A2 %/t0 (1) a se!/rit$ a-ree#e't is 'ot 'e!essar$ to #a5e the se!/rit$ i'terest e'(or!ea%le /'&er Se!tio' A-*0.(%)(.)4 (*) i( the &o!/#e't is +rese'te& i' a #e&i/# other tha' a 1ritte' or other ta'-i%le #e&i/#2 the se!/rit$ i'terest is +er(e!te&4 a'& (.) i( the &o!/#e't is +rese'te& i' a 1ritte' or other ta'-i%le #e&i/# a'& is 'ot a !erti(i!ate& se!/rit$2 !hattel +a+er2 a &o!/#e't o( title2 a' i'str/#e't2 or a letter o( !re&it2 so lo'- as the &e%tor &oes 'ot ha)e +ossessio' o( the &o!/#e't2 the se!/rit$ i'terest is +er(e!te& a'& has +riorit$ o)er a !o'(li!ti'- se!/rit$ i'terest i' the &o!/#e't. TRANSITION PROVISIONS SECTION ". E>>ECTIVE =ATE.

This A!t" shall %e!o#e e((e!ti)e o' JJJJJJJJJJJJJJJ2 1AAJJJ.

SECTION

". REPEAL.

This A!t" re+eals" a#e'&s" i'sert !itatio' to e,isti'- Arti!le 9". SECTION ". APPLICA@ILITG.

This A!t" a++lies to a letter o( !re&it that is iss/e& o' or a(ter the e((e!ti)e &ate o( this A!t". This A!t" &oes 'ot a++l$ to a tra'sa!tio'2 e)e't2 o%li-atio'2 or &/t$ arisi'- o/t o( or asso!iate& 1ith a letter o( !re&it that 1as iss/e& %e(ore the e((e!ti)e &ate o( this A!t". SECTION ". SAVINGS CLAUSE.

A tra'sa!tio' arisi'- o/t o( or asso!iate& 1ith a letter o( !re&it that 1as iss/e& %e(ore the e((e!ti)e &ate o( this A!t" a'& the ri-hts2 o%li-atio's2 a'& i'terests (lo1i'- (ro# that tra'sa!tio' are -o)er'e& %$ a'$ stat/te or other la1 a#e'&e& or re+eale& %$ this A!t" as i( re+eal or a#e'&#e't ha& 'ot o!!/rre& a'& #a$ %e ter#i'ate&2 !o#+lete&2 !o's/##ate&2 or e'(or!e& /'&er that stat/te or other la1. REPEALER O> U.C.C. - ARTICLE : - @ULF TRANS>ERS a'& REVISE=" U.C.C. - ARTICLE : - @ULF SALES (States to Sele!t O'e Alter'ati)e -- A or @) ALTERNATIVE A 1. Re+eal. Arti!le : a'& Se!tio' A-111 o( the U'i(or# Co##er!ial Co&e are here%$ re+eale&2 e((e!ti)e JJJJJJJJJJJJJJJ. *. A#e'&#e't. Se!tio' 1-109(*) o( the U'i(or# Co##er!ial Co&e is here%$ a#e'&e& to rea& as (ollo1s0 (*) Chere o'e o( the (ollo1i'- +ro)isio's o( this A!t s+e!i(ies the a++li!a%le la12 that +ro)isio' -o)er's a'& a !o'trar$ a-ree#e't is e((e!ti)e o'l$ to the e,te't +er#itte& %$ the la1 (i'!l/&i'- the !o'(li!t o( la1s r/les) so s+e!i(ie&0 Ri-hts o( !re&itors a-ai'st sol& -oo&s. Se!tio' *-80*. A++li!a%ilit$ o( the Arti!le o' Leases. Se!tio's *A-109 a'& *A-10:.

A++li!a%ilit$ o( the Arti!le o' @a'5 =e+osits a'& Colle!tio's. Se!tio' 8-10*. A++li!a%ilit$ o( the Arti!le o' I')est#e't Se!/rities. Se!tio' <-10:. Per(e!tio' +ro)isio's o( the Arti!le o' Se!/re& Tra'sa!tio's. Se!tio' A-10.. .. A#e'&#e't. Se!tio' *-80.(8) o( the U'i(or# Co##er!ial Co&e is here%$ a#e'&e& to rea& as (ollo1s0 (8) The ri-hts o( other +/r!hasers o( -oo&s a'& o( lie' !re&itors are -o)er'e& %$ the Arti!les o' Se!/re& Tra'sa!tio's (Arti!le A) a'& =o!/#e'ts o( Title (Arti!le ;). 8. Sa)i'-s Cla/se. Ri-hts a'& o%li-atio's that arose /'&er Arti!le : a'& Se!tio' A-111 o( the U'i(or# Co##er!ial Co&e %e(ore their re+eal re#ai' )ali& a'& #a$ %e e'(or!e& as tho/-h those stat/tes ha& 'ot %ee' re+eale&." Le-islati)e Note0 To ta5e a!!o/'t o( &i((ere'!es %et1ee' (or#er Arti!le A a'& re)ise& Arti!le A2 a State that re+eals Arti!le : a(ter re)ise& Arti!le A ta5es e((e!t #/st #a5e the (ollo1i'- !ha'-es to Alter'ati)e A. >irst2 i'as#/!h as re)ise& Arti!le A !o'tai's 'o !o/'ter+art o( (or#er Se!tio' A-1112 the re(ere'!e to that se!tio' i' Se!tio' 1 o( the re+ealer sho/l& %e &elete&2 a'& Se!tio' 8 o( the re+eal %ill sho/l& all/&e to (or#er Se!tio' A-111. Se!o'&2 the last e'tr$ i' Se!tio' 1-109(*) sho/l& %e a#e'&e& as sho1' a%o)e i' this A++e'&i,. EN= O> ALTERNATIVE A" ALTERNATIVE @ PART 1. SU@HECT EATTER AN= =E>INITIONS :-101. Short Title. This Arti!le shall %e 5'o1' a'& #a$ %e !ite& as U'i(or# Co##er!ial Co&e - @/l5 Sales. :-10*. =e(i'itio's a'& I'&e, o( =e(i'itio's. (1) I' this Arti!le2 /'less the !o'te,t other1ise re7/ires0 (a) ?Assets? #ea's the i')e'tor$ that is the s/%6e!t o( a %/l5 sale a'& a'$ ta'-i%le a'& i'ta'-i%le +erso'al +ro+ert$ /se& or hel& (or /se +ri#aril$ i'2 or arisi'- (ro#2 the

sellerBs %/si'ess a'& sol& i' !o''e!tio' 1ith that i')e'tor$2 %/t the ter# &oes 'ot i'!l/&e0 (i) (i,t/res (Se!tio' A-10*(a)(81)) other tha' rea&il$ re#o)a%le (a!tor$ a'& o((i!e #a!hi'es4 (ii) the lesseeBs i'terest i' a lease o( real +ro+ert$4 or (iii) +ro+ert$ to the e,te't it is -e'erall$ e,e#+t (ro# !re&itor +ro!ess /'&er 'o'%a'5r/+t!$ la1. (%) ?A/!tio'eer? #ea's a +erso' 1ho# the seller e'-a-es to &ire!t2 !o'&/!t2 !o'trol2 or %e res+o'si%le (or a sale %$ a/!tio'. (!) ?@/l5 sale? #ea's0 (i) i' the !ase o( a sale %$ a/!tio' or a sale or series o( sales !o'&/!te& %$ a li7/i&ator o' the sellerBs %ehal(2 a sale or series o( sales 'ot i' the or&i'ar$ !o/rse o( the sellerBs %/si'ess o( #ore tha' hal( o( the sellerBs i')e'tor$2 as #eas/re& %$ )al/e o' the &ate o( the %/l5-sale a-ree#e't2 i( o' that &ate the a/!tio'eer or li7/i&ator has 'oti!e2 or a(ter reaso'a%le i'7/ir$ 1o/l& ha)e ha& 'oti!e2 that the seller 1ill 'ot !o'ti'/e to o+erate the sa#e or a si#ilar 5i'& o( %/si'ess a(ter the sale or series o( sales4 a'& (ii) i' all other !ases2 a sale 'ot i' the or&i'ar$ !o/rse o( the sellerBs %/si'ess o( #ore tha' hal( the sellerBs i')e'tor$2 as #eas/re& %$ )al/e o' the &ate o( the %/l5-sale a-ree#e't2 i( o' that &ate the %/$er has 'oti!e2 or a(ter reaso'a%le i'7/ir$ 1o/l& ha)e ha& 'oti!e2 that the seller 1ill 'ot !o'ti'/e to o+erate the sa#e or a si#ilar 5i'& o( %/si'ess a(ter the sale. (&) ?Clai#? #ea's a ri-ht to +a$#e't (ro# the seller2 1hether or 'ot the ri-ht is re&/!e& to 6/&-#e't2 li7/i&ate&2 (i,e&2 #at/re&2 &is+/te&2 se!/re&2 le-al2 or e7/ita%le. The ter# i'!l/&es !osts o( !olle!tio' a'& attor'e$Bs (ees o'l$ to the e,te't that the la1s o( this state +er#it the hol&er o( the !lai# to re!o)er the# i' a' a!tio' a-ai'st the o%li-or. (e) ?Clai#a't? #ea's a +erso' hol&i'- a !lai# i'!/rre& i' the sellerBs %/si'ess other tha'0 (i) a' /'se!/re& a'& /'#at/re& !lai# (or e#+lo$#e't !o#+e'satio' a'& %e'e(its2 i'!l/&i'- !o##issio's a'& )a!atio'2 se)era'!e2 a'& si!5-lea)e +a$4 (ii) a !lai# (or i'6/r$ to a' i'&i)i&/al or to +ro+ert$2 or (or %rea!h o( 1arra't$2 /'less0 (A) a ri-ht o( a!tio' (or the !lai# has a!!r/e&4

(@) the !lai# has %ee' asserte& a-ai'st the seller4 a'& (C) the seller 5'o1s the i&e'tit$ o( the +erso' asserti'- the !lai# a'& the %asis /+o' 1hi!h the +erso' has asserte& it4 a'& (States To Sele!t O'e Alter'ati)e) ALTERNATIVE A (iii) a !lai# (or ta,es o1i'- to a -o)er'#e'tal /'it." ALTERNATIVE @ (iii) a !lai# (or ta,es o1i'- to a -o)er'#e'tal /'it2 i(0 (A) a stat/te -o)er'i'- the e'(or!e#e't o( the !lai# +er#its or re7/ires 'oti!e o( the %/l5 sale to %e -i)e' to the -o)er'#e'tal /'it i' a #a''er other tha' %$ !o#+lia'!e 1ith the re7/ire#e'ts o( this Arti!le4 a'& (@) 'oti!e is -i)e' i' a!!or&a'!e 1ith the stat/te." (() ?Cre&itor? #ea's a !lai#a't or other +erso' hol&i'- a !lai#. (-) (i) ?=ate o( the %/l5 sale? #ea's0 (A) i( the sale is %$ a/!tio' or is !o'&/!te& %$ a li7/i&ator o' the sellerBs %ehal(2 the &ate o' 1hi!h #ore tha' te' +er!e't o( the 'et +ro!ee&s is +ai& to or (or the %e'e(it o( the seller4 a'& (@) i' all other !ases2 the later o( the &ate o' 1hi!h0 (I) #ore tha' te' +er!e't o( the 'et !o'tra!t +ri!e is +ai& to or (or the %e'e(it o( the seller4 or (II) #ore tha' te' +er!e't o( the assets2 as #eas/re& %$ )al/e2 are tra's(erre& to the %/$er. (ii) >or +/r+oses o( this s/%se!tio'0 (A) =eli)er$ o( a 'e-otia%le i'str/#e't (Se!tio' .-108(1) si!") to or (or the %e'e(it o( the seller i' e,!ha'-e (or assets !o'stit/tes +a$#e't o( the !o'tra!t +ri!e +ro ta'to4

(@) To the e,te't that the !o'tra!t +ri!e is &e+osite& i' a' es!ro12 the !o'tra!t +ri!e is +ai& to or (or the %e'e(it o( the seller 1he' the seller a!7/ires the /'!o'&itio'al ri-ht to re!ei)e the &e+osit or 1he' the &e+osit is &eli)ere& to the seller or (or the %e'e(it o( the seller2 1hi!he)er is earlier4 a'& (C) A' asset is tra's(erre& 1he' a +erso' hol&i'- a' /'se!/re& !lai# !a' 'o lo'-er o%tai' thro/-h 6/&i!ial +ro!ee&i'-s ri-hts to the asset that are s/+erior to those o( the %/$er arisi'- as a res/lt o( the %/l5 sale. A +erso' hol&i'- a' /'se!/re& !lai# !a' o%tai' those s/+erior ri-hts to a ta'-i%le asset at least /'til the %/$er has a' /'!o'&itio'al ri-ht2 /'&er the %/l5-sale a-ree#e't2 to +ossess the asset2 a'& a +erso' hol&i'- a' /'se!/re& !lai# !a' o%tai' those s/+erior ri-hts to a' i'ta'-i%le asset at least /'til the %/$er has a' /'!o'&itio'al ri-ht2 /'&er the %/l5-sale a-ree#e't2 to /se the asset. (h) ?=ate o( the %/l5-sale a-ree#e't? #ea's0 (i) i' the !ase o( a sale %$ a/!tio' or !o'&/!te& %$ a li7/i&ator (s/%se!tio' (!)(i))2 the &ate o' 1hi!h the seller e'-a-es the a/!tio'eer or li7/i&ator4 a'& (ii) i' all other !ases2 the &ate o' 1hi!h a %/l5-sale a-ree#e't %e!o#es e'(or!ea%le %et1ee' the %/$er a'& the seller. (i) ?=e%t? #ea's lia%ilit$ o' a !lai#. (6) ?Li7/i&ator? #ea's a +erso' 1ho is re-/larl$ e'-a-e& i' the %/si'ess o( &is+osi'- o( assets (or %/si'esses !o'te#+lati'- li7/i&atio' or &issol/tio'. (5) ?Net !o'tra!t +ri!e? #ea's the 'e1 !o'si&eratio' the %/$er is o%li-ate& to +a$ (or the assets less0 (i) the a#o/'t o( a'$ +ro!ee&s o( the sale o( a' asset2 to the e,te't the +ro!ee&s are a++lie& i' +artial or total satis(a!tio' o( a &e%t se!/re& %$ the asset4 a'& (ii) the a#o/'t o( a'$ &e%t to the e,te't it is se!/re& %$ a se!/rit$ i'terest or lie' that is e'(or!ea%le a-ai'st the asset %e(ore a'& a(ter it has %ee' sol& to a %/$er. I( a &e%t is se!/re& %$ a' asset a'& other +ro+ert$ o( the seller2 the a#o/'t o( the &e%t se!/re& %$ a se!/rit$ i'terest or lie' that is e'(or!ea%le a-ai'st the asset is &eter#i'e& %$ #/lti+l$i'- the &e%t %$ a (ra!tio'2 the '/#erator o( 1hi!h is the )al/e o( the 'e1 !o'si&eratio' (or the asset o' the &ate o( the %/l5 sale a'& the &e'o#i'ator o( 1hi!h is the )al/e o( all +ro+ert$ se!/ri'- the &e%t o' the &ate o( the %/l5 sale. (l) ?Net +ro!ee&s? #ea's the 'e1 !o'si&eratio' re!ei)e& (or assets sol& at a sale %$ a/!tio' or a sale !o'&/!te& %$ a li7/i&ator o' the sellerBs %ehal( less0

(i) !o##issio's a'& reaso'a%le e,+e'ses o( the sale4 (ii) the a#o/'t o( a'$ +ro!ee&s o( the sale o( a' asset2 to the e,te't the +ro!ee&s are a++lie& i' +artial or total satis(a!tio' o( a &e%t se!/re& %$ the asset4 a'& (iii) the a#o/'t o( a'$ &e%t to the e,te't it is se!/re& %$ a se!/rit$ i'terest or lie' that is e'(or!ea%le a-ai'st the asset %e(ore a'& a(ter it has %ee' sol& to a %/$er. I( a &e%t is se!/re& %$ a' asset a'& other +ro+ert$ o( the seller2 the a#o/'t o( the &e%t se!/re& %$ a se!/rit$ i'terest or lie' that is e'(or!ea%le a-ai'st the asset is &eter#i'e& %$ #/lti+l$i'- the &e%t %$ a (ra!tio'2 the '/#erator o( 1hi!h is the )al/e o( the 'e1 !o'si&eratio' (or the asset o' the &ate o( the %/l5 sale a'& the &e'o#i'ator o( 1hi!h is the )al/e o( all +ro+ert$ se!/ri'- the &e%t o' the &ate o( the %/l5 sale. (#) A sale is ?i' the or&i'ar$ !o/rse o( the sellerBs %/si'ess? i( the sale !o#+orts 1ith /s/al or !/sto#ar$ +ra!ti!es i' the 5i'& o( %/si'ess i' 1hi!h the seller is e'-a-e& or 1ith the sellerBs o1' /s/al or !/sto#ar$ +ra!ti!es. (') ?U'ite& States? i'!l/&es its territories a'& +ossessio's a'& the Co##o'1ealth o( P/erto Ri!o. (o) ?Val/e? #ea's (air #ar5et )al/e. (+) ?Veri(ie&? #ea's si-'e& a'& s1or' to or a((ir#e&. (*) The (ollo1i'- &e(i'itio's i' other Arti!les a++l$ to this Arti!le0 (a) ?@/$er.? Se!tio' *-10.(1)(a). Se!tio' A-10*(a)(..). Se!tio' A-10*(a)(8<).

(%) ?E7/i+#e't.? (!) ?I')e'tor$.? (&) ?Sale.? (e) ?Seller.?

Se!tio' *-10:(1). Se!tio' *-10.(1)(&).

(.) I' a&&itio'2 Arti!le 1 !o'tai's -e'eral &e(i'itio's a'& +ri'!i+les o( !o'str/!tio' a'& i'ter+retatio' a++li!a%le thro/-ho/t this Arti!le. :-10.. APPLICA@ILITG O> ARTICLE. (1) E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (.)2 this Arti!le a++lies to a %/l5 sale i(0 (a) the sellerBs +ri'!i+al %/si'ess is the sale o( i')e'tor$ (ro# sto!54 a'&

(%) o' the &ate o( the %/l5-sale a-ree#e't the seller is lo!ate& i' this state or2 i( the seller is lo!ate& i' a 6/ris&i!tio' that is 'ot a +art o( the U'ite& States2 the sellerBs #a6or e,e!/ti)e o((i!e i' the U'ite& States is i' this state. (*) A seller is &ee#e& to %e lo!ate& at his or her" +la!e o( %/si'ess. I( a seller has #ore tha' o'e +la!e o( %/si'ess2 the seller is &ee#e& lo!ate& at his or her" !hie( e,e!/ti)e o((i!e. (.) This Arti!le &oes 'ot a++l$ to0 (a) a tra's(er #a&e to se!/re +a$#e't or +er(or#a'!e o( a' o%li-atio'4 (%) a tra's(er o( !ollateral to a se!/re& +art$ +/rs/a't to Se!tio' A-:0A4 (!) a sale o( !ollateral +/rs/a't to Se!tio' A-:104 (&) rete'tio' o( !ollateral +/rs/a't to Se!tio' A-:*04 (e) a sale o( a' asset e'!/#%ere& %$ a se!/rit$ i'terest or lie' i( (i) all the +ro!ee&s o( the sale are a++lie& i' +artial or total satis(a!tio' o( the &e%t se!/re& %$ the se!/rit$ i'terest or lie' or (ii) the se!/rit$ i'terest or lie' is e'(or!ea%le a-ai'st the asset a(ter it has %ee' sol& to the %/$er a'& the 'et !o'tra!t +ri!e is 3ero4 (() a -e'eral assi-'#e't (or the %e'e(it o( !re&itors or to a s/%se7/e't tra's(er %$ the assi-'ee4 (-) a sale %$ a' e,e!/tor2 a&#i'istrator2 re!ei)er2 tr/stee i' %a'5r/+t!$2 or a'$ +/%li! o((i!er /'&er 6/&i!ial +ro!ess4 (h) a sale #a&e i' the !o/rse o( 6/&i!ial or a&#i'istrati)e +ro!ee&i'-s (or the &issol/tio' or reor-a'i3atio' o( a' or-a'i3atio'4 (i) a sale to a %/$er 1hose +ri'!i+al +la!e o( %/si'ess is i' the U'ite& States a'& 1ho0 (i) 'ot earlier tha' *1 &a$s %e(ore the &ate o( the %/l5 sale2 (A) o%tai's (ro# the seller a )eri(ie& a'& &ate& list o( !lai#a'ts o( 1ho# the seller has 'oti!e three &a$s %e(ore the seller se'&s or &eli)ers the list to the %/$er or (@) !o'&/!ts a reaso'a%le i'7/ir$ to &is!o)er the !lai#a'ts4 (ii) ass/#es i' (/ll the &e%ts o1e& to !lai#a'ts o( 1ho# the %/$er has 5'o1le&-e o' the &ate the %/$er re!ei)es the list o( !lai#a'ts (ro# the seller or o' the &ate the %/$er !o#+letes the reaso'a%le i'7/ir$2 as the !ase #a$ %e4

(iii) is 'ot i'sol)e't a(ter the ass/#+tio'4 a'& (i)) -i)es 1ritte' 'oti!e o( the ass/#+tio' 'ot later tha' .0 &a$s a(ter the &ate o( the %/l5 sale %$ se'&i'- or &eli)eri'- a 'oti!e to the !lai#a'ts i&e'ti(ie& i' s/%+ara-ra+h (ii) or %$ (ili'- a 'oti!e i' the o((i!e o( the Se!retar$ o( State"4 (6) a sale to a %/$er 1hose +ri'!i+al +la!e o( %/si'ess is i' the U'ite& States a'& 1ho0 (i) ass/#es i' (/ll the &e%ts that 1ere i'!/rre& i' the sellerBs %/si'ess %e(ore the &ate o( the %/l5 sale4 (ii) is 'ot i'sol)e't a(ter the ass/#+tio'4 a'& (iii) -i)es 1ritte' 'oti!e o( the ass/#+tio' 'ot later tha' .0 &a$s a(ter the &ate o( the %/l5 sale %$ se'&i'- or &eli)eri'- a 'oti!e to ea!h !re&itor 1hose &e%t is ass/#e& or %$ (ili'- a 'oti!e i' the o((i!e o( the Se!retar$ o( State"4 (5) a sale to a 'e1 or-a'i3atio' that is or-a'i3e& to ta5e o)er a'& !o'ti'/e the %/si'ess o( the seller a'& that has its +ri'!i+al +la!e o( %/si'ess i' the U'ite& States i(0 (i) the %/$er ass/#es i' (/ll the &e%ts that 1ere i'!/rre& i' the sellerBs %/si'ess %e(ore the &ate o( the %/l5 sale4 (ii) the seller re!ei)es 'othi'- (ro# the sale e,!e+t a' i'terest i' the 'e1 or-a'i3atio' that is s/%or&i'ate to the !lai#s a-ai'st the or-a'i3atio' arisi'- (ro# the ass/#+tio'4 a'& (iii) the %/$er -i)es 1ritte' 'oti!e o( the ass/#+tio' 'ot later tha' .0 &a$s a(ter the &ate o( the %/l5 sale %$ se'&i'- or &eli)eri'- a 'oti!e to ea!h !re&itor 1hose &e%t is ass/#e& or %$ (ili'- a 'oti!e i' the o((i!e o( the Se!retar$ o( State"4 (l) a sale o( assets ha)i'-0 (i) a )al/e2 'et o( lie's a'& se!/rit$ i'terests2 o( less tha' I102000. I( a &e%t is se!/re& %$ assets a'& other +ro+ert$ o( the seller2 the 'et )al/e o( the assets is &eter#i'e& %$ s/%tra!ti'- (ro# their )al/e a' a#o/'t e7/al to the +ro&/!t o( the &e%t #/lti+lie& %$ a (ra!tio'2 the '/#erator o( 1hi!h is the )al/e o( the assets o' the &ate o( the %/l5 sale a'& the &e'o#i'ator o( 1hi!h is the )al/e o( all +ro+ert$ se!/ri'- the &e%t o' the &ate o( the %/l5 sale4 or (ii) a )al/e o( #ore tha' I*920002000 o' the &ate o( the %/l5-sale a-ree#e't4 or (#) a sale re7/ire& %$2 a'& #a&e +/rs/a't to2 stat/te.

(8) The 'oti!e /'&er s/%se!tio' (.)(i)(i)) #/st state0 (i) that a sale that #a$ !o'stit/te a %/l5 sale has %ee' or 1ill %e #a&e4 (ii) the &ate or +ros+e!ti)e &ate o( the %/l5 sale4 (iii) the i'&i)i&/al2 +art'ershi+2 or !or+orate 'a#es a'& the a&&resses o( the seller a'& %/$er4 (i)) the a&&ress to 1hi!h i'7/iries a%o/t the sale #a$ %e #a&e2 i( &i((ere't (ro# the sellerBs a&&ress4 a'& ()) that the %/$er has ass/#e& or 1ill ass/#e i' (/ll the &e%ts o1e& to !lai#a'ts o( 1ho# the %/$er has 5'o1le&-e o' the &ate the %/$er re!ei)es the list o( !lai#a'ts (ro# the seller or !o#+letes a reaso'a%le i'7/ir$ to &is!o)er the !lai#a'ts. (9) The 'oti!e /'&er s/%se!tio's (.)(6)(iii) a'& (.)(5)(iii) #/st state0 (i) that a sale that #a$ !o'stit/te a %/l5 sale has %ee' or 1ill %e #a&e4 (ii) the &ate or +ros+e!ti)e &ate o( the %/l5 sale4 (iii) the i'&i)i&/al2 +art'ershi+2 or !or+orate 'a#es a'& the a&&resses o( the seller a'& %/$er4 (i)) the a&&ress to 1hi!h i'7/iries a%o/t the sale #a$ %e #a&e2 i( &i((ere't (ro# the sellerBs a&&ress4 a'& ()) that the %/$er has ass/#e& or 1ill ass/#e the &e%ts that 1ere i'!/rre& i' the sellerBs %/si'ess %e(ore the &ate o( the %/l5 sale. (:) >or +/r+oses o( s/%se!tio' (.)(l)2 the )al/e o( assets is +res/#e& to %e e7/al to the +ri!e the %/$er a-rees to +a$ (or the assets. Do1e)er2 i' a sale %$ a/!tio' or a sale !o'&/!te& %$ a li7/i&ator o' the sellerBs %ehal(2 the )al/e o( assets is +res/#e& to %e the a#o/'t the a/!tio'eer or li7/i&ator reaso'a%l$ esti#ates the assets 1ill %ri'- at a/!tio' or /+o' li7/i&atio'. :-108. O%li-atio's o( @/$er. (1) I' a %/l5 sale as &e(i'e& i' Se!tio' :-10*(1)(!)(ii) the %/$er shall0 (a) o%tai' (ro# the seller a list o( all %/si'ess 'a#es a'& a&&resses /se& %$ the seller 1ithi' three $ears %e(ore the &ate the list is se't or &eli)ere& to the %/$er4 (%) /'less e,!/se& /'&er s/%se!tio' (*)2 o%tai' (ro# the seller a )eri(ie& a'& &ate& list o( !lai#a'ts o( 1ho# the seller has 'oti!e three &a$s %e(ore the seller se'&s or &eli)ers the list to the %/$er a'& i'!l/&i'-2 to the e,te't 5'o1' %$ the seller2 the a&&ress o( a'& the a#o/'t !lai#e& %$ ea!h !lai#a't4 (!) o%tai' (ro# the seller or +re+are a s!he&/le o( &istri%/tio' (Se!tio' :-10:(1))4 (&) -i)e 'oti!e o( the %/l5 sale i' a!!or&a'!e 1ith Se!tio' :-1094 (e) /'less e,!/se& /'&er Se!tio' :-10:(8)2 &istri%/te the 'et !o'tra!t +ri!e i' a!!or&a'!e 1ith the /'&erta5i'-s o( the %/$er i' the s!he&/le o( &istri%/tio'4 a'& (() /'less e,!/se& /'&er s/%se!tio' (*)2 #a5e a)aila%le the list o( !lai#a'ts (s/%se!tio' (1)(%)) %$0

(i) +ro#+tl$ se'&i'- or &eli)eri'- a !o+$ o( the list 1itho/t !har-e to a'$ !lai#a't 1hose 1ritte' re7/est is re!ei)e& %$ the %/$er 'o later tha' si, #o'ths a(ter the &ate o( the %/l5 sale4 (ii) +er#itti'- a'$ !lai#a't to i's+e!t a'& !o+$ the list at a'$ reaso'a%le ho/r /+o' re7/est re!ei)e& %$ the %/$er 'o later tha' si, #o'ths a(ter the &ate o( the %/l5 sale4 or (iii) (ili'- a !o+$ o( the list i' the o((i!e o( the Se!retar$ o( State" 'o later tha' the ti#e (or -i)i'- a 'oti!e o( the %/l5 sale (Se!tio' :-109(9)). A list (ile& i' a!!or&a'!e 1ith this s/%+ara-ra+h #/st state the i'&i)i&/al2 +art'ershi+2 or !or+orate 'a#e a'& a #aili'- a&&ress o( the seller. (*) A %/$er 1ho -i)es 'oti!e i' a!!or&a'!e 1ith Se!tio' :-109(*) is e,!/se& (ro# !o#+l$i'- 1ith the re7/ire#e'ts o( s/%se!tio's (1)(%) a'& (1)((). :-109. NOTICE TO CLAIEANTS. (1) E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (*)2 to !o#+l$ 1ith Se!tio' :-108(1)(&) the %/$er shall se'& or &eli)er a 1ritte' 'oti!e o( the %/l5 sale to ea!h !lai#a't o' the list o( !lai#a'ts (Se!tio' :-108(1)(%)) a'& to a'$ other !lai#a't o( 1ho# the %/$er has 5'o1le&-e at the ti#e the 'oti!e o( the %/l5 sale is se't or &eli)ere&. (*) A %/$er #a$ !o#+l$ 1ith Se!tio' :-108(1)(&) %$ (ili'- a 1ritte' 'oti!e o( the %/l5 sale i' the o((i!e o( the Se!retar$ o( State" i(0 (a) o' the &ate o( the %/l5-sale a-ree#e't the seller has *00 or #ore !lai#a'ts2 e,!l/si)e o( !lai#a'ts hol&i'- se!/re& or #at/re& !lai#s (or e#+lo$#e't !o#+e'satio' a'& %e'e(its2 i'!l/&i'- !o##issio's a'& )a!atio'2 se)era'!e2 a'& si!5-lea)e +a$4 or (%) the %/$er has re!ei)e& a )eri(ie& state#e't (ro# the seller stati'- that2 as o( the &ate o( the %/l5-sale a-ree#e't2 the '/#%er o( !lai#a'ts2 e,!l/si)e o( !lai#a'ts hol&i'- se!/re& or #at/re& !lai#s (or e#+lo$#e't !o#+e'satio' a'& %e'e(its2 i'!l/&i'!o##issio's a'& )a!atio'2 se)era'!e2 a'& si!5-lea)e +a$2 is *00 or #ore. (.) The 1ritte' 'oti!e o( the %/l5 sale #/st %e a!!o#+a'ie& %$ a !o+$ o( the s!he&/le o( &istri%/tio' (Se!tio' :-10:(1)) a'& state at least0 (a) that the seller a'& %/$er ha)e e'tere& i'to a' a-ree#e't (or a sale that #a$ !o'stit/te a %/l5 sale /'&er the la1s o( the State o( JJJJJJJJJJJJJJJ4 (%) the &ate o( the a-ree#e't4

(!) the &ate o' or a(ter 1hi!h #ore tha' te' +er!e't o( the assets 1ere or 1ill %e tra's(erre&4 (&) the &ate o' or a(ter 1hi!h #ore tha' te' +er!e't o( the 'et !o'tra!t +ri!e 1as or 1ill %e +ai&2 i( the &ate is 'ot state& i' the s!he&/le o( &istri%/tio'4 (e) the 'a#e a'& a #aili'- a&&ress o( the seller4 (() a'$ other %/si'ess 'a#e a'& a&&ress liste& %$ the seller +/rs/a't to Se!tio' :108(1)(a)4 (-) the 'a#e o( the %/$er a'& a' a&&ress o( the %/$er (ro# 1hi!h i'(or#atio' !o'!er'i'- the sale !a' %e o%tai'e&4 (h) a state#e't i'&i!ati'- the t$+e o( assets or &es!ri%i'- the assets ite# %$ ite#4 (i) the #a''er i' 1hi!h the %/$er 1ill #a5e a)aila%le the list o( !lai#a'ts (Se!tio' :108(1)(())2 i( a++li!a%le4 a'& (6) i( the sale is i' total or +artial satis(a!tio' o( a' a'te!e&e't &e%t o1e& %$ the seller2 the a#o/'t o( the &e%t to %e satis(ie& a'& the 'a#e o( the +erso' to 1ho# it is o1e&. (8) >or +/r+oses o( s/%se!tio's (.)(e) a'& (.)(-)2 the 'a#e o( a +erso' is the +erso'Bs i'&i)i&/al2 +art'ershi+2 or !or+orate 'a#e. (9) The %/$er shall -i)e 'oti!e o( the %/l5 sale 'ot less tha' 89 &a$s %e(ore the &ate o( the %/l5 sale a'&2 i( the %/$er -i)es 'oti!e i' a!!or&a'!e 1ith s/%se!tio' (1)2 'ot #ore tha' .0 &a$s a(ter o%tai'i'- the list o( !lai#a'ts. (:) A 1ritte' 'oti!e s/%sta'tiall$ !o#+l$i'- 1ith the re7/ire#e'ts o( s/%se!tio' (.) is e((e!ti)e e)e' tho/-h it !o'tai's #i'or errors that are 'ot serio/sl$ #islea&i'-. (;) A (or# s/%sta'tiall$ as (ollo1s is s/((i!ie't to !o#+l$ 1ith s/%se!tio' (.)0 Noti!e o( Sale (1) JJJJJJJJJJJJJJJJJJJJJJJJJJ2 1hose a&&ress is JJJJJJJJJJJJJJJJJJJJJJJJJJ2 is &es!ri%e& i' this 'oti!e as the ?seller.? (*) JJJJJJJJJJJJJJJJJJJJJJJJJ2 1hose a&&ress is JJJJJJJJJJJJJJJJJJJJJJJJJ2 is &es!ri%e& i' this 'oti!e as the ?%/$er.?

(.) The seller has &is!lose& to the %/$er that 1ithi' the +ast three $ears the seller has /se& other %/si'ess 'a#es2 o+erate& at other a&&resses2 or %oth2 as (ollo1s0 JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ. (8) The seller a'& the %/$er ha)e e'tere& i'to a' a-ree#e't &ate& JJJJJJJJJJJJJJJJ2 (or a sale that #a$ !o'stit/te a %/l5 sale /'&er the la1s o( the state o( JJJJJJJJJJJJJJJJJJJJJJJJJJ. (9) The &ate o' or a(ter 1hi!h #ore tha' te' +er!e't o( the assets that are the s/%6e!t o( the sale 1ere or 1ill %e tra's(erre& is JJJJJJJJJJJJJJJ2 a'& i( 'ot state& i' the s!he&/le o( &istri%/tio'" the &ate o' or a(ter 1hi!h #ore tha' te' +er!e't o( the 'et !o'tra!t +ri!e 1as or 1ill %e +ai& is JJJJJJJJJJJJJJJ. (:) The (ollo1i'- assets are the s/%6e!t o( the sale0 JJJJJJJJJJJJJJJJJJJJJJJJJJ. (;) I( a++li!a%le" The %/$er 1ill #a5e a)aila%le to !lai#a'ts o( the seller a list o( the

sellerBs !lai#a'ts i' the (ollo1i'- #a''er0 JJJJJJJJJJJJJJJJ. (<) I( a++li!a%le" The sale is to satis($ I JJJJJJJ o( a' a'te!e&e't &e%t o1e& %$ the

seller to JJJJJJJJJJJJJJJJJJJJJJJJJ. (A) A !o+$ o( the s!he&/le o( &istri%/tio' o( the 'et !o'tra!t +ri!e a!!o#+a'ies this 'oti!e. E'& o( Noti!e" :-10:. S!he&/le o( =istri%/tio'. (1) The seller a'& %/$er shall a-ree o' ho1 the 'et !o'tra!t +ri!e is to %e &istri%/te& a'& set (orth their a-ree#e't i' a 1ritte' s!he&/le o( &istri%/tio'. (*) The s!he&/le o( &istri%/tio' #a$ +ro)i&e (or &istri%/tio' to a'$ +erso' at a'$ ti#e2 i'!l/&i'- &istri%/tio' o( the e'tire 'et !o'tra!t +ri!e to the seller. (.) The %/$erBs /'&erta5i'-s i' the s!he&/le o( &istri%/tio' r/' o'l$ to the seller. Do1e)er2 a %/$er 1ho (ails to &istri%/te the 'et !o'tra!t +ri!e i' a!!or&a'!e 1ith the %/$erBs /'&erta5i'-s i' the s!he&/le o( &istri%/tio' is lia%le to a !re&itor o'l$ as +ro)i&e& i' Se!tio' :-10;(1). (8) I( the %/$er /'&erta5es i' the s!he&/le o( &istri%/tio' to &istri%/te a'$ +art o( the 'et !o'tra!t +ri!e to a +erso' other tha' the seller2 a'&2 a(ter the %/$er has -i)e' 'oti!e i' a!!or&a'!e 1ith Se!tio' :-1092 so#e or all o( the a'ti!i+ate& 'et !o'tra!t +ri!e is or %e!o#es /'a)aila%le (or &istri%/tio' as a !o'se7/e'!e o( the %/$erBs or sellerBs ha)i'!o#+lie& 1ith a' or&er o( !o/rt2 le-al +ro!ess2 stat/te2 or r/le o( la12 the %/$er is

e,!/se& (ro# a'$ o%li-atio' arisi'- /'&er this Arti!le or /'&er a'$ !o'tra!t 1ith the seller to &istri%/te the 'et !o'tra!t +ri!e i' a!!or&a'!e 1ith the %/$erBs /'&erta5i'-s i' the s!he&/le i( the %/$er0 (a) &istri%/tes the 'et !o'tra!t +ri!e re#ai'i'- a)aila%le i' a!!or&a'!e 1ith a'$ +riorities (or +a$#e't state& i' the s!he&/le o( &istri%/tio' a'&2 to the e,te't that the +ri!e is i's/((i!ie't to +a$ all the &e%ts ha)i'- a -i)e' +riorit$2 &istri%/tes the +ri!e +ro rata a#o'- those &e%ts sho1' i' the s!he&/le as ha)i'- the sa#e +riorit$4 (%) &istri%/tes the 'et !o'tra!t +ri!e re#ai'i'- a)aila%le i' a!!or&a'!e 1ith a' or&er o( !o/rt4 (!) !o##e'!es a +ro!ee&i'- (or i'ter+lea&er i' a !o/rt o( !o#+ete't 6/ris&i!tio' a'& is &is!har-e& (ro# the +ro!ee&i'-4 or (&) rea!hes a 'e1 a-ree#e't 1ith the seller (or the &istri%/tio' o( the 'et !o'tra!t +ri!e re#ai'i'- a)aila%le2 sets (orth the 'e1 a-ree#e't i' a' a#e'&e& s!he&/le o( &istri%/tio'2 -i)es 'oti!e o( the a#e'&e& s!he&/le2 a'& &istri%/tes the 'et !o'tra!t +ri!e re#ai'i'- a)aila%le i' a!!or&a'!e 1ith the %/$erBs /'&erta5i'-s i' the a#e'&e& s!he&/le. (9) The 'oti!e /'&er s/%se!tio' (8)(&) #/st i&e'ti($ the %/$er a'& the seller2 state the (ili'- '/#%er2 i( a'$2 o( the ori-i'al 'oti!e2 set (orth the a#e'&e& s!he&/le2 a'& %e -i)e' i' a!!or&a'!e 1ith s/%se!tio' (1) or (*) o( Se!tio' :-1092 1hi!he)er is a++li!a%le2 at least 18 &a$s %e(ore the %/$er &istri%/tes a'$ +art o( the 'et !o'tra!t +ri!e re#ai'i'a)aila%le. (:) I( the seller /'&erta5es i' the s!he&/le o( &istri%/tio' to &istri%/te a'$ +art o( the 'et !o'tra!t +ri!e2 a'&2 a(ter the %/$er has -i)e' 'oti!e i' a!!or&a'!e 1ith Se!tio' :1092 so#e or all o( the a'ti!i+ate& 'et !o'tra!t +ri!e is or %e!o#es /'a)aila%le (or &istri%/tio' as a !o'se7/e'!e o( the %/$erBs or sellerBs ha)i'- !o#+lie& 1ith a' or&er o( !o/rt2 le-al +ro!ess2 stat/te2 or r/le o( la12 the seller a'& a'$ +erso' i' !o'trol o( the seller are e,!/se& (ro# a'$ o%li-atio' arisi'- /'&er this Arti!le or /'&er a'$ a-ree#e't 1ith the %/$er to &istri%/te the 'et !o'tra!t +ri!e i' a!!or&a'!e 1ith the sellerBs /'&erta5i'-s i' the s!he&/le i( the seller0 (a) &istri%/tes the 'et !o'tra!t +ri!e re#ai'i'- a)aila%le i' a!!or&a'!e 1ith a'$ +riorities (or +a$#e't state& i' the s!he&/le o( &istri%/tio' a'&2 to the e,te't that the +ri!e is i's/((i!ie't to +a$ all the &e%ts ha)i'- a -i)e' +riorit$2 &istri%/tes the +ri!e +ro rata a#o'- those &e%ts sho1' i' the s!he&/le as ha)i'- the sa#e +riorit$4 (%) &istri%/tes the 'et !o'tra!t +ri!e re#ai'i'- a)aila%le i' a!!or&a'!e 1ith a' or&er o( !o/rt4

(!) !o##e'!es a +ro!ee&i'- (or i'ter+lea&er i' a !o/rt o( !o#+ete't 6/ris&i!tio' a'& is &is!har-e& (ro# the +ro!ee&i'-4 or (&) +re+ares a 1ritte' a#e'&e& s!he&/le o( &istri%/tio' o( the 'et !o'tra!t +ri!e re#ai'i'- a)aila%le (or &istri%/tio'2 -i)es 'oti!e o( the a#e'&e& s!he&/le2 a'& &istri%/tes the 'et !o'tra!t +ri!e re#ai'i'- a)aila%le i' a!!or&a'!e 1ith the a#e'&e& s!he&/le. (;) The 'oti!e /'&er s/%se!tio' (:)(&) #/st i&e'ti($ the %/$er a'& the seller2 state the (ili'- '/#%er2 i( a'$2 o( the ori-i'al 'oti!e2 set (orth the a#e'&e& s!he&/le2 a'& %e -i)e' i' a!!or&a'!e 1ith s/%se!tio' (1) or (*) o( Se!tio' :-1092 1hi!he)er is a++li!a%le2 at least 18 &a$s %e(ore the seller &istri%/tes a'$ +art o( the 'et !o'tra!t +ri!e re#ai'i'a)aila%le. :-10;. Lia%ilit$ (or No'!o#+lia'!e. (1) E,!e+t as +ro)i&e& i' s/%se!tio' (.)2 a'& s/%6e!t to the li#itatio' i' s/%se!tio' (8)0 (a) a %/$er 1ho (ails to !o#+l$ 1ith the re7/ire#e'ts o( Se!tio' :-108(1)(e) 1ith res+e!t to a !re&itor is lia%le to the !re&itor (or &a#a-es i' the a#o/'t o( the !lai#2 re&/!e& %$ a'$ a#o/'t that the !re&itor 1o/l& 'ot ha)e reali3e& i( the %/$er ha& !o#+lie&4 a'& (%) a %/$er 1ho (ails to !o#+l$ 1ith the re7/ire#e'ts o( a'$ other s/%se!tio' o( Se!tio' :-108 1ith res+e!t to a !lai#a't is lia%le to the !lai#a't (or &a#a-es i' the a#o/'t o( the !lai#2 re&/!e& %$ a'$ a#o/'t that the !lai#a't 1o/l& 'ot ha)e reali3e& i( the %/$er ha& !o#+lie&. (*) I' a' a!tio' /'&er s/%se!tio' (1)2 the !re&itor has the %/r&e' o( esta%lishi'- the )ali&it$ a'& a#o/'t o( the !lai#2 a'& the %/$er has the %/r&e' o( esta%lishi'- the a#o/'t that the !re&itor 1o/l& 'ot ha)e reali3e& i( the %/$er ha& !o#+lie&. (.) A %/$er 1ho0 (a) #a&e a -oo& (aith a'& !o##er!iall$ reaso'a%le e((ort to !o#+l$ 1ith the re7/ire#e'ts o( Se!tio' :-108(1) or to e,!l/&e the sale (ro# the a++li!atio' o( this Arti!le /'&er Se!tio' :-10.(.)4 or (%) o' or a(ter the &ate o( the %/l5-sale a-ree#e't2 %/t %e(ore the &ate o( the %/l5 sale2 hel& a -oo& (aith a'& !o##er!iall$ reaso'a%le %elie( that this Arti!le &oes 'ot a++l$ to the +arti!/lar sale is 'ot lia%le to !re&itors (or (ail/re to !o#+l$ 1ith the re7/ire#e'ts o( Se!tio' :-108. The %/$er has the %/r&e' o( esta%lishi'- the -oo& (aith a'& !o##er!ial reaso'a%le'ess o( the e((ort or %elie(.

(8) I' a si'-le %/l5 sale the !/#/lati)e lia%ilit$ o( the %/$er (or (ail/re to !o#+l$ 1ith the re7/ire#e'ts o( Se!tio' :-108(1) #a$ 'ot e,!ee& a' a#o/'t e7/al to0 (a) i( the assets !o'sist o'l$ o( i')e'tor$ a'& e7/i+#e't2 t1i!e the 'et !o'tra!t +ri!e2 less the a#o/'t o( a'$ +art o( the 'et !o'tra!t +ri!e +ai& to or a++lie& (or the %e'e(it o( the seller or a !re&itor4 or (%) i( the assets i'!l/&e +ro+ert$ other tha' i')e'tor$ a'& e7/i+#e't2 t1i!e the 'et )al/e o( the i')e'tor$ a'& e7/i+#e't less the a#o/'t o( the +ortio' o( a'$ +art o( the 'et !o'tra!t +ri!e +ai& to or a++lie& (or the %e'e(it o( the seller or a !re&itor 1hi!h is allo!a%le to the i')e'tor$ a'& e7/i+#e't. (9) >or the +/r+oses o( s/%se!tio' (8)(%)2 the ?'et )al/e? o( a' asset is the )al/e o( the asset less (i) the a#o/'t o( a'$ +ro!ee&s o( the sale o( a' asset2 to the e,te't the +ro!ee&s are a++lie& i' +artial or total satis(a!tio' o( a &e%t se!/re& %$ the asset a'& (ii) the a#o/'t o( a'$ &e%t to the e,te't it is se!/re& %$ a se!/rit$ i'terest or lie' that is e'(or!ea%le a-ai'st the asset %e(ore a'& a(ter it has %ee' sol& to a %/$er. I( a &e%t is se!/re& %$ a' asset a'& other +ro+ert$ o( the seller2 the a#o/'t o( the &e%t se!/re& %$ a se!/rit$ i'terest or lie' that is e'(or!ea%le a-ai'st the asset is &eter#i'e& %$ #/lti+l$i'- the &e%t %$ a (ra!tio'2 the '/#erator o( 1hi!h is the )al/e o( the asset o' the &ate o( the %/l5 sale a'& the &e'o#i'ator o( 1hi!h is the )al/e o( all +ro+ert$ se!/ri'- the &e%t o' the &ate o( the %/l5 sale. The +ortio' o( a +art o( the 'et !o'tra!t +ri!e +ai& to or a++lie& (or the %e'e(it o( the seller or a !re&itor that is ?allo!a%le to the i')e'tor$ a'& e7/i+#e't? is the +ortio' that %ears the sa#e ratio to that +art o( the 'et !o'tra!t +ri!e as the 'et )al/e o( the i')e'tor$ a'& e7/i+#e't %ears to the 'et )al/e o( all o( the assets. (:) A +a$#e't #a&e %$ the %/$er to a +erso' to 1ho# the %/$er is2 or %elie)es he or she" is2 lia%le /'&er s/%se!tio' (1) re&/!es +ro ta'to the %/$erBs !/#/lati)e lia%ilit$ /'&er s/%se!tio' (8). (;) No a!tio' #a$ %e %ro/-ht /'&er s/%se!tio' (1)(%) %$ or o' %ehal( o( a !lai#a't 1hose !lai# is /'li7/i&ate& or !o'ti'-e't. (<) A %/$erBs (ail/re to !o#+l$ 1ith the re7/ire#e'ts o( Se!tio' :-108(1) &oes 'ot (i) i#+air the %/$erBs ri-hts i' or title to the assets2 (ii) re'&er the sale i'e((e!ti)e2 )oi&2 or )oi&a%le2 (iii) e'title a !re&itor to #ore tha' a si'-le satis(a!tio' o( his or her" !lai#2 or (i)) !reate lia%ilit$ other tha' as +ro)i&e& i' this Arti!le. (A) Pa$#e't o( the %/$erBs lia%ilit$ /'&er s/%se!tio' (1) &is!har-es +ro ta'to the sellerBs &e%t to the !re&itor.

(10) U'less other1ise a-ree&2 a %/$er has a' i##e&iate ri-ht o( rei#%/rse#e't (ro# the seller (or a'$ a#o/'t +ai& to a !re&itor i' +artial or total satis(a!tio' o( the %/$erBs lia%ilit$ /'&er s/%se!tio' (1). (11) I( the seller is a' or-a'i3atio'2 a +erso' 1ho is i' &ire!t or i'&ire!t !o'trol o( the seller2 a'& 1ho 5'o1i'-l$2 i'te'tio'all$2 a'& 1itho/t le-al 6/sti(i!atio' (ails2 or !a/ses the seller to (ail2 to &istri%/te the 'et !o'tra!t +ri!e i' a!!or&a'!e 1ith the s!he&/le o( &istri%/tio' is lia%le to a'$ !re&itor to 1ho# the seller /'&ertoo5 to #a5e +a$#e't /'&er the s!he&/le (or &a#a-es !a/se& %$ the (ail/re. :-10<. @/l5 Sales %$ A/!tio'4 @/l5 Sales Co'&/!te& %$ Li7/i&ator. (1) Se!tio's :-1082 :-1092 :-10:2 a'& :-10; a++l$ to a %/l5 sale %$ a/!tio' a'& a %/l5 sale !o'&/!te& %$ a li7/i&ator o' the sellerBs %ehal( 1ith the (ollo1i'- #o&i(i!atio's0 (a) ?%/$er? re(ers to a/!tio'eer or li7/i&ator2 as the !ase #a$ %e4 (%) ?'et !o'tra!t +ri!e? re(ers to 'et +ro!ee&s o( the a/!tio' or 'et +ro!ee&s o( the sale2 as the !ase #a$ %e4 (!) the 1ritte' 'oti!e re7/ire& /'&er Se!tio' :-109(.) #/st %e a!!o#+a'ie& %$ a !o+$ o( the s!he&/le o( &istri%/tio' (Se!tio' :-10:(1)) a'& state at least0 (i) that the seller a'& the a/!tio'eer or li7/i&ator ha)e e'tere& i'to a' a-ree#e't (or a/!tio' or li7/i&atio' ser)i!es that #a$ !o'stit/te a' a-ree#e't to #a5e a %/l5 sale /'&er the la1s o( the State o( JJJJJJJJJJJJJJJ4 (ii) the &ate o( the a-ree#e't4 (iii) the &ate o' or a(ter 1hi!h the a/!tio' %e-a' or 1ill %e-i' or the &ate o' or a(ter 1hi!h the li7/i&ator %e-a' or 1ill %e-i' to sell assets o' the sellerBs %ehal(4 (i)) the &ate o' or a(ter 1hi!h #ore tha' te' +er!e't o( the 'et +ro!ee&s o( the sale 1ere or 1ill %e +ai&2 i( the &ate is 'ot state& i' the s!he&/le o( &istri%/tio'4 ()) the 'a#e a'& a #aili'- a&&ress o( the seller4 ()i) a'$ other %/si'ess 'a#e a'& a&&ress liste& %$ the seller +/rs/a't to Se!tio' :108(1)(a)4 ()ii) the 'a#e o( the a/!tio'eer or li7/i&ator a'& a' a&&ress o( the a/!tio'eer or li7/i&ator (ro# 1hi!h i'(or#atio' !o'!er'i'- the sale !a' %e o%tai'e&4 ()iii) a state#e't i'&i!ati'- the t$+e o( assets or &es!ri%i'- the assets ite# %$ ite#4

(i,) the #a''er i' 1hi!h the a/!tio'eer or li7/i&ator 1ill #a5e a)aila%le the list o( !lai#a'ts (Se!tio' :-108(1)(())2 i( a++li!a%le4 a'& (,) i( the sale is i' total or +artial satis(a!tio' o( a' a'te!e&e't &e%t o1e& %$ the seller2 the a#o/'t o( the &e%t to %e satis(ie& a'& the 'a#e o( the +erso' to 1ho# it is o1e&4 a'& (&) i' a si'-le %/l5 sale the !/#/lati)e lia%ilit$ o( the a/!tio'eer or li7/i&ator (or (ail/re to !o#+l$ 1ith the re7/ire#e'ts o( this se!tio' #a$ 'ot e,!ee& the a#o/'t o( the 'et +ro!ee&s o( the sale allo!a%le to i')e'tor$ a'& e7/i+#e't sol& less the a#o/'t o( the +ortio' o( a'$ +art o( the 'et +ro!ee&s +ai& to or a++lie& (or the %e'e(it o( a !re&itor 1hi!h is allo!a%le to the i')e'tor$ a'& e7/i+#e't. (*) A +a$#e't #a&e %$ the a/!tio'eer or li7/i&ator to a +erso' to 1ho# the a/!tio'eer or li7/i&ator is2 or %elie)es he or she" is2 lia%le /'&er this se!tio' re&/!es +ro ta'to the a/!tio'eerBs or li7/i&atorBs !/#/lati)e lia%ilit$ /'&er s/%se!tio' (1)(&).

(.) A (or# s/%sta'tiall$ as (ollo1s is s/((i!ie't to !o#+l$ 1ith s/%se!tio' (1)(!)0 Noti!e o( Sale (1) JJJJJJJJJJJJJJJJJJJJJJJJJ2 1hose a&&ress is JJJJJJJJJJJJJJJJJJJJJJJJJJ2 is &es!ri%e& i' this 'oti!e as the ?seller.? (*) JJJJJJJJJJJJJJJJJJJJJJJJJ2 1hose a&&ress is JJJJJJJJJJJJJJJJJJJJJJJJJJ2 is &es!ri%e& i' this 'oti!e as the ?a/!tio'eer? or ?li7/i&ator.? (.) The seller has &is!lose& to the a/!tio'eer or li7/i&ator that 1ithi' the +ast three $ears the seller has /se& other %/si'ess 'a#es2 o+erate& at other a&&resses2 or %oth2 as (ollo1s0 JJJJJJJJJJJJJJJJJJJJJJJ. (8) The seller a'& the a/!tio'eer or li7/i&ator ha)e e'tere& i'to a' a-ree#e't &ate& JJJJJJJJJJJJJJJJ (or a/!tio' or li7/i&atio' ser)i!es that #a$ !o'stit/te a' a-ree#e't to #a5e a %/l5 sale /'&er the la1s o( the State o( JJJJJJJJJJJJJJJJJJJ. (9) The &ate o' or a(ter 1hi!h the a/!tio' %e-a' or 1ill %e-i' or the &ate o' or a(ter 1hi!h the li7/i&ator %e-a' or 1ill %e-i' to sell assets o' the sellerBs %ehal( is JJJJJJJJJJJJJJJ2 a'& i( 'ot state& i' the s!he&/le o( &istri%/tio'" the &ate o' or a(ter 1hi!h #ore tha' te' +er!e't o( the 'et +ro!ee&s o( the sale 1ere or 1ill %e +ai& is JJJJJJJJJJJJJJJ.

(:) The (ollo1i'- assets are the s/%6e!t o( the sale0 JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ. (;) I( a++li!a%le" The a/!tio'eer or li7/i&ator 1ill #a5e a)aila%le to !lai#a'ts o( the

seller a list o( the sellerBs !lai#a'ts i' the (ollo1i'- #a''er0 JJJJJJJJJJJJJJJJJJJJJJJJ. (<) I( a++li!a%le" The sale is to satis($ I JJJJJJJ o( a' a'te!e&e't &e%t o1e& %$ the

seller to JJJJJJJJJJJJJJJJJJJJJJJJJ. (A) A !o+$ o( the s!he&/le o( &istri%/tio' o( the 'et +ro!ee&s a!!o#+a'ies this 'oti!e. E'& o( Noti!e" (8) A +erso' 1ho %/$s at a %/l5 sale %$ a/!tio' or !o'&/!te& %$ a li7/i&ator 'ee& 'ot !o#+l$ 1ith the re7/ire#e'ts o( Se!tio' :-108(1) a'& is 'ot lia%le (or the (ail/re o( a' a/!tio'eer or li7/i&ator to !o#+l$ 1ith the re7/ire#e'ts o( this se!tio'. :-10A. Chat Co'stit/tes >ili'-4 =/ties o( >ili'- O((i!er4 I'(or#atio' >ro# >ili'O((i!er. (1) Prese'tatio' o( a 'oti!e or list o( !lai#a'ts (or (ili'- a'& te'&er o( the (ili'- (ee or a!!e+ta'!e o( the 'oti!e or list %$ the (ili'- o((i!er !o'stit/tes (ili'- /'&er this Arti!le. (*) The (ili'- o((i!er shall0 (a) #ar5 ea!h 'oti!e or list 1ith a (ile '/#%er a'& 1ith the &ate a'& ho/r o( (ili'-4 (%) hol& the 'oti!e or list or a !o+$ (or +/%li! i's+e!tio'4 (!) i'&e, the 'oti!e or list a!!or&i'- to ea!h 'a#e -i)e' (or the seller a'& (or the %/$er4 a'& (&) 'ote i' the i'&e, the (ile '/#%er a'& the a&&resses o( the seller a'& %/$er -i)e' i' the 'oti!e or list. (.) I( the +erso' (ili'- a 'oti!e or list (/r'ishes the (ili'- o((i!er 1ith a !o+$2 the (ili'o((i!er /+o' re7/est shall 'ote /+o' the !o+$ the (ile '/#%er a'& &ate a'& ho/r o( the (ili'- o( the ori-i'al a'& se'& or &eli)er the !o+$ to the +erso'. (8) The (ee (or (ili'- a'& i'&e,i'- a'& (or sta#+i'- a !o+$ (/r'ishe& %$ the +erso' (ili'- to sho1 the &ate a'& +la!e o( (ili'- is I JJJJJJJJ (or the (irst +a-e a'& I JJJJJJJJJ (or ea!h a&&itio'al +a-e. The (ee (or i'&e,i'- ea!h 'a#e #ore tha' t1o is I JJJJJJJJ.

(9) U+o' re7/est o( a'$ +erso'2 the (ili'- o((i!er shall iss/e a !erti(i!ate sho1i'1hether a'$ 'oti!e or list 1ith res+e!t to a +arti!/lar seller or %/$er is o' (ile o' the &ate a'& ho/r state& i' the !erti(i!ate. I( a 'oti!e or list is o' (ile2 the !erti(i!ate #/st -i)e the &ate a'& ho/r o( (ili'- o( ea!h 'oti!e or list a'& the 'a#e a'& a&&ress o( ea!h seller2 %/$er2 a/!tio'eer2 or li7/i&ator. The (ee (or the !erti(i!ate is I JJJJJJJJ i( the re7/est (or the !erti(i!ate is i' the sta'&ar& (or# +res!ri%e& %$ the Se!retar$ o( State" a'& other1ise is I JJJJJJJJJ. U+o' re7/est o( a'$ +erso'2 the (ili'- o((i!er shall (/r'ish a !o+$ o( a'$ (ile& 'oti!e or list (or a (ee o( I JJJJJJJJ. (:) The (ili'- o((i!er shall 5ee+ ea!h 'oti!e or list (or t1o $ears a(ter it is (ile&. :-110. Li#itatio' o( A!tio's. (1) E,!e+t as +ro)i&e& i' s/%se!tio' (*)2 a' a!tio' /'&er this Arti!le a-ai'st a %/$er2 a/!tio'eer2 or li7/i&ator #/st %e !o##e'!e& 1ithi' o'e $ear a(ter the &ate o( the %/l5 sale. (*) I( the %/$er2 a/!tio'eer2 or li7/i&ator !o'!eals the (a!t that the sale has o!!/rre&2 the li#itatio' is tolle& a'& a' a!tio' /'&er this Arti!le #a$ %e !o##e'!e& 1ithi' the earlier o( (i) o'e $ear a(ter the +erso' %ri'-i'- the a!tio' &is!o)ers that the sale has o!!/rre& or (ii) o'e $ear a(ter the +erso' %ri'-i'- the a!tio' sho/l& ha)e &is!o)ere& that the sale has o!!/rre&2 %/t 'o later tha' t1o $ears a(ter the &ate o( the %/l5 sale. Co#+lete 'o'!o#+lia'!e 1ith the re7/ire#e'ts o( this Arti!le &oes 'ot o( itsel( !o'stit/te !o'!eal#e't. (.) A' a!tio' /'&er Se!tio' :-10;(11) #/st %e !o##e'!e& 1ithi' o'e $ear a(ter the alle-e& )iolatio' o!!/rs. U.C.C. - ARTICLE ; - =OCUEENTS O> TITLE PART 1. GENERAL ;-101. Short Title. This arti!le #a$ %e !ite& as U'i(or# Co##er!ial Co&e-=o!/#e'ts o( Title. ;-10*. =e(i'itio's a'& I'&e, o( =e(i'itio's. (a) I' this Arti!le2 /'less the !o'te,t other1ise re7/ires0 (1) ?@ailee? #ea's a +erso' that %$ a 1areho/se re!ei+t2 %ill o( la&i'-2 or other &o!/#e't o( title a!5'o1le&-es +ossessio' o( -oo&s a'& !o'tra!ts to &eli)er the#. (*) ?Carrier? #ea's a +erso' that iss/es a %ill o( la&i'-.

(.) ?Co'si-'ee? #ea's a +erso' 'a#e& i' a %ill o( la&i'- to 1hi!h or to 1hose or&er the %ill +ro#ises &eli)er$. (8) ?Co'si-'or? #ea's a +erso' 'a#e& i' a %ill o( la&i'- as the +erso' (ro# 1hi!h the -oo&s ha)e %ee' re!ei)e& (or shi+#e't. (9) ?=eli)er$ or&er? #ea's a re!or& that !o'tai's a' or&er to &eli)er -oo&s &ire!te& to a 1areho/se2 !arrier2 or other +erso' that i' the or&i'ar$ !o/rse o( %/si'ess iss/es 1areho/se re!ei+ts or %ills o( la&i'-. (:) ?Goo& (aith? #ea's ho'est$ i' (a!t a'& the o%ser)a'!e o( reaso'a%le !o##er!ial sta'&ar&s o( (air &eali'-. (;) ?Goo&s? #ea's all thi'-s that are treate& as #o)a%le (or the +/r+oses o( a !o'tra!t (or stora-e or tra's+ortatio'. (<) ?Iss/er? #ea's a %ailee that iss/es a &o!/#e't o( title or2 i' the !ase o( a' /'a!!e+te& &eli)er$ or&er2 the +erso' that or&ers the +ossessor o( -oo&s to &eli)er. The ter# i'!l/&es a +erso' (or 1hi!h a' a-e't or e#+lo$ee +/r+orts to a!t i' iss/i'- a &o!/#e't i( the a-e't or e#+lo$ee has real or a++are't a/thorit$ to iss/e &o!/#e'ts2 e)e' i( the iss/er &i& 'ot re!ei)e a'$ -oo&s2 the -oo&s 1ere #is&es!ri%e&2 or i' a'$ other res+e!t the a-e't or e#+lo$ee )iolate& the iss/erBs i'str/!tio's. (A) ?Perso' e'title& /'&er the &o!/#e't? #ea's the hol&er2 i' the !ase o( a 'e-otia%le &o!/#e't o( title2 or the +erso' to 1hi!h &eli)er$ o( the -oo&s is to %e #a&e %$ the ter#s o(2 or +/rs/a't to i'str/!tio's i' a re!or& /'&er2 a 'o''e-otia%le &o!/#e't o( title. (10) ?Re!or&? #ea's i'(or#atio' that is i's!ri%e& o' a ta'-i%le #e&i/# or that is store& i' a' ele!tro'i! or other #e&i/# a'& is retrie)a%le i' +er!ei)a%le (or#. (11) ?Si-'? #ea's2 1ith +rese't i'te't to a/the'ti!ate or a&o+t a re!or&0 (A) to e,e!/te or a&o+t a ta'-i%le s$#%ol4 or (@) to atta!h to or lo-i!all$ asso!iate 1ith the re!or& a' ele!tro'i! so/'&2 s$#%ol2 or +ro!ess. (1*) ?Shi++er? #ea's a +erso' that e'ters i'to a !o'tra!t o( tra's+ortatio' 1ith a !arrier. (1.) ?Careho/se? #ea's a +erso' e'-a-e& i' the %/si'ess o( stori'- -oo&s (or hire.

(%) =e(i'itio's i' other arti!les a++l$i'- to this arti!le a'& the se!tio's i' 1hi!h the$ a++ear are0 (1) ?Co'tra!t (or sale?2 Se!tio' *-10:. (*) ?Lessee i' or&i'ar$ !o/rse o( %/si'ess?2 Se!tio' *A-10.. (.) ?Re!ei+t? o( -oo&s2 Se!tio' *-10.. (!) I' a&&itio'2 Arti!le 1 !o'tai's -e'eral &e(i'itio's a'& +ri'!i+les o( !o'str/!tio' a'& i'ter+retatio' a++li!a%le thro/-ho/t this arti!le. ;-10.. Relatio' o( Arti!le to Treat$ or Stat/te. (a) This arti!le is s/%6e!t to a'$ treat$ or stat/te o( the U'ite& States or a re-/lator$ stat/te o( this State to the e,te't the treat$2 stat/te2 or re-/lator$ stat/te is a++li!a%le. (%) This arti!le &oes 'ot re+eal or #o&i($ a'$ la1 +res!ri%i'- the (or# or !o'te'ts o( a &o!/#e't o( title or the ser)i!es or (a!ilities to %e a((or&e& %$ a %ailee2 or other1ise re-/lati'- a %aileeBs %/si'esses i' res+e!ts 'ot s+e!i(i!all$ treate& i' this arti!le. Do1e)er2 )iolatio' o( these la1s &oes 'ot a((e!t the stat/s o( a &o!/#e't o( title that other1ise !o#+lies 1ith the &e(i'itio' o( a &o!/#e't o( title. (!) This A!t" #o&i(ies2 li#its2 a'& s/+erse&es the (e&eral Ele!tro'i! Si-'at/res i' Glo%al a'& Natio'al Co##er!e A!t (19 U.S.C. Se!tio' ;0012 et. se7.) %/t &oes 'ot #o&i($2 li#it2 or s/+erse&e Se!tio' 101(!) o( that a!t (19 U.S.C. Se!tio' ;001(!)) or a/thori3e ele!tro'i! &eli)er$ o( a'$ o( the 'oti!es &es!ri%e& i' Se!tio' 10.(%) o( that a!t (19 U.S.C. Se!tio' ;00.(%)). (&) To the e,te't there is a !o'(li!t %et1ee' the U'i(or# Ele!tro'i! Tra'sa!tio's A!t a'& this arti!le2 this arti!le -o)er's. ;-108. Ne-otia%le a'& No''e-otia%le =o!/#e't o( Title. (a) A &o!/#e't o( title is 'e-otia%le i( %$ its ter#s the -oo&s are to %e &eli)ere& to %earer or to the or&er o( a 'a#e& +erso'. (%) A &o!/#e't o( title other tha' o'e &es!ri%e& i' s/%se!tio' (a) is 'o''e-otia%le. A %ill o( la&i'- that states that the -oo&s are !o'si-'e& to a 'a#e& +erso' is 'ot #a&e 'e-otia%le %$ a +ro)isio' that the -oo&s are to %e &eli)ere& o'l$ a-ai'st a' or&er i' a re!or& si-'e& %$ the sa#e or a'other 'a#e& +erso'. (!) A &o!/#e't o( title is 'o''e-otia%le i(2 at the ti#e it is iss/e&2 the &o!/#e't has a !o's+i!/o/s le-e'&2 ho1e)er e,+resse&2 that it is 'o''e-otia%le.

 ;-109. Reiss/a'!e i' Alter'ati)e Ee&i/#. (a) U+o' re7/est o( a +erso' e'title& /'&er a' ele!tro'i! &o!/#e't o( title2 the iss/er o( the ele!tro'i! &o!/#e't #a$ iss/e a ta'-i%le &o!/#e't o( title as a s/%stit/te (or the ele!tro'i! &o!/#e't i(0 (1) the +erso' e'title& /'&er the ele!tro'i! &o!/#e't s/rre'&ers !o'trol o( the &o!/#e't to the iss/er4 a'& (*) the ta'-i%le &o!/#e't 1he' iss/e& !o'tai's a state#e't that it is iss/e& i' s/%stit/tio' (or the ele!tro'i! &o!/#e't. (%) U+o' iss/a'!e o( a ta'-i%le &o!/#e't o( title i' s/%stit/tio' (or a' ele!tro'i! &o!/#e't o( title i' a!!or&a'!e 1ith s/%se!tio' (a)0 (1) the ele!tro'i! &o!/#e't !eases to ha)e a'$ e((e!t or )ali&it$4 a'& (*) the +erso' that +ro!/re& iss/a'!e o( the ta'-i%le &o!/#e't 1arra'ts to all s/%se7/e't +erso's e'title& /'&er the ta'-i%le &o!/#e't that the 1arra'tor 1as a +erso' e'title& /'&er the ele!tro'i! &o!/#e't 1he' the 1arra'tor s/rre'&ere& !o'trol o( the ele!tro'i! &o!/#e't to the iss/er. (!) U+o' re7/est o( a +erso' e'title& /'&er a ta'-i%le &o!/#e't o( title2 the iss/er o( the ta'-i%le &o!/#e't #a$ iss/e a' ele!tro'i! &o!/#e't o( title as a s/%stit/te (or the ta'-i%le &o!/#e't i(0 (1) the +erso' e'title& /'&er the ta'-i%le &o!/#e't s/rre'&ers +ossessio' o( the &o!/#e't to the iss/er4 a'& (*) the ele!tro'i! &o!/#e't 1he' iss/e& !o'tai's a state#e't that it is iss/e& i' s/%stit/tio' (or the ta'-i%le &o!/#e't. (&) U+o' iss/a'!e o( the ele!tro'i! &o!/#e't o( title i' s/%stit/tio' (or a ta'-i%le &o!/#e't o( title i' a!!or&a'!e 1ith s/%se!tio' (!)0 (1) the ta'-i%le &o!/#e't !eases to ha)e a'$ e((e!t or )ali&it$4 a'& (*) the +erso' that +ro!/re& iss/a'!e o( the ele!tro'i! &o!/#e't 1arra'ts to all s/%se7/e't +erso's e'title& /'&er the ele!tro'i! &o!/#e't that the 1arra'tor 1as a +erso' e'title& /'&er the ta'-i%le &o!/#e't 1he' the 1arra'tor s/rre'&ere& +ossessio' o( the ta'-i%le &o!/#e't to the iss/er. ;-10:. Co'trol o( Ele!tro'i! =o!/#e't o( Title.

(a) A +erso' has !o'trol o( a' ele!tro'i! &o!/#e't o( title i( a s$ste# e#+lo$e& (or e)i&e'!i'- the tra's(er o( i'terests i' the ele!tro'i! &o!/#e't relia%l$ esta%lishes that +erso' as the +erso' to 1hi!h the ele!tro'i! &o!/#e't 1as iss/e& or tra's(erre&.

(%) A s$ste# satis(ies s/%se!tio' (a)2 a'& a +erso' is &ee#e& to ha)e !o'trol o( a' ele!tro'i! &o!/#e't o( title2 i( the &o!/#e't is !reate&2 store&2 a'& assi-'e& i' s/!h a #a''er that0 (1) a si'-le a/thoritati)e !o+$ o( the &o!/#e't e,ists 1hi!h is /'i7/e2 i&e'ti(ia%le2 a'&2 e,!e+t as other1ise +ro)i&e& i' +ara-ra+hs (8)2 (9)2 a'& (:)2 /'altera%le4 (*) the a/thoritati)e !o+$ i&e'ti(ies the +erso' asserti'- !o'trol as0 (A) the +erso' to 1hi!h the &o!/#e't 1as iss/e&4 or (@) i( the a/thoritati)e !o+$ i'&i!ates that the &o!/#e't has %ee' tra's(erre&2 the +erso' to 1hi!h the &o!/#e't 1as #ost re!e'tl$ tra's(erre&4 (.) the a/thoritati)e !o+$ is !o##/'i!ate& to a'& #ai'tai'e& %$ the +erso' asserti'!o'trol or its &esi-'ate& !/sto&ia'4 (8) !o+ies or a#e'&#e'ts that a&& or !ha'-e a' i&e'ti(ie& assi-'ee o( the a/thoritati)e !o+$ !a' %e #a&e o'l$ 1ith the !o'se't o( the +erso' asserti'- !o'trol4 (9) ea!h !o+$ o( the a/thoritati)e !o+$ a'& a'$ !o+$ o( a !o+$ is rea&il$ i&e'ti(ia%le as a !o+$ that is 'ot the a/thoritati)e !o+$4 a'& (:) a'$ a#e'&#e't o( the a/thoritati)e !o+$ is rea&il$ i&e'ti(ia%le as a/thori3e& or /'a/thori3e&. PART *. CAREDOUSE RECEIPTS0 SPECIAL PROVISIONS ;-*01. Perso' That Ea$ Iss/e a Careho/se Re!ei+t4 Stora-e U'&er @o'&. (a) A 1areho/se re!ei+t #a$ %e iss/e& %$ a'$ 1areho/se. (%) I( -oo&s2 i'!l/&i'- &istille& s+irits a'& a-ri!/lt/ral !o##o&ities2 are store& /'&er a stat/te re7/iri'- a %o'& a-ai'st 1ith&ra1al or a li!e'se (or the iss/a'!e o( re!ei+ts i' the 'at/re o( 1areho/se re!ei+ts2 a re!ei+t iss/e& (or the -oo&s is &ee#e& to %e a 1areho/se re!ei+t e)e' i( iss/e& %$ a +erso' that is the o1'er o( the -oo&s a'& is 'ot a 1areho/se.

 ;-*0*. >or# o( Careho/se Re!ei+t. (a) A 1areho/se re!ei+t 'ee& 'ot %e i' a'$ +arti!/lar (or#. (%) U'less a 1areho/se re!ei+t +ro)i&es (or ea!h o( the (ollo1i'-2 the 1areho/se is lia%le (or &a#a-es !a/se& to a +erso' i'6/re& %$ its o#issio'0 (1) the lo!atio' o( the 1areho/se (a!ilit$ 1here the -oo&s are store&4 (*) the &ate o( iss/e o( the re!ei+t4 (.) the /'i7/e i&e'ti(i!atio' !o&e o( the re!ei+t4 (8) a state#e't 1hether the -oo&s re!ei)e& 1ill %e &eli)ere& to the %earer2 to a 'a#e& +erso'2 or to a 'a#e& +erso' or its or&er4 (9) the rate o( stora-e a'& ha'&li'- !har-es2 %/t i( -oo&s are store& /'&er a (iel& 1areho/si'- arra'-e#e't2 a state#e't o( that (a!t is s/((i!ie't o' a 'o''e-otia%le re!ei+t4 (:) a &es!ri+tio' o( the -oo&s or the +a!5a-es !o'tai'i'- the#4 (;) the si-'at/re o( the 1areho/se or its a-e't4 (<) i( the re!ei+t is iss/e& (or -oo&s that the 1areho/se o1's2 either solel$2 6oi'tl$2 or i' !o##o' 1ith others2 the (a!t o( that o1'ershi+4 a'& (A) a state#e't o( the a#o/'t o( a&)a'!es #a&e a'& o( lia%ilities i'!/rre& (or 1hi!h the 1areho/se !lai#s a lie' or se!/rit$ i'terest2 %/t i( the +re!ise a#o/'t o( a&)a'!es #a&e or o( lia%ilities i'!/rre& is2 at the ti#e o( the iss/e o( the re!ei+t2 /'5'o1' to the 1areho/se or to its a-e't that iss/e& the re!ei+t2 a state#e't o( the (a!t that a&)a'!es ha)e %ee' #a&e or lia%ilities i'!/rre& a'& the +/r+ose o( the a&)a'!es or lia%ilities is s/((i!ie't. (!) A 1areho/se #a$ i'sert i' its re!ei+t a'$ ter#s that are 'ot !o'trar$ to the U'i(or# Co##er!ial Co&e" a'& &o 'ot i#+air its o%li-atio' o( &eli)er$ /'&er Se!tio' ;80. or its &/t$ o( !are /'&er Se!tio' ;-*08. A'$ !o'trar$ +ro)isio's are i'e((e!ti)e. ;-*0.. Lia%ilit$ (or No're!ei+t or Eis&es!ri+tio'. A +art$ to or +/r!haser (or )al/e i' -oo& (aith o( a &o!/#e't o( title2 other tha' a %ill o( la&i'-2 that relies /+o' the &es!ri+tio' o( the -oo&s i' the &o!/#e't #a$ re!o)er (ro# the iss/er &a#a-es !a/se& %$ the 'o're!ei+t or #is&es!ri+tio' o( the -oo&s2 e,!e+t to the e,te't that0

(1) the &o!/#e't !o's+i!/o/sl$ i'&i!ates that the iss/er &oes 'ot 5'o1 1hether all or +art o( the -oo&s i' (a!t 1ere re!ei)e& or !o'(or# to the &es!ri+tio'2 s/!h as a !ase i' 1hi!h the &es!ri+tio' is i' ter#s o( #ar5s or la%els or 5i'&2 7/a'tit$2 or !o'&itio'2 or the re!ei+t or &es!ri+tio' is 7/ali(ie& %$ ?!o'te'ts2 !o'&itio'2 a'& 7/alit$ /'5'o1'?2 ?sai& to !o'tai'?2 or 1or&s o( si#ilar i#+ort2 i( the i'&i!atio' is tr/e4 or (*) the +art$ or +/r!haser other1ise has 'oti!e o( the 'o're!ei+t or #is&es!ri+tio'. ;-*08. =/t$ o( Care4 Co'tra!t/al Li#itatio' o( Careho/seBs Lia%ilit$. (a) A 1areho/se is lia%le (or &a#a-es (or loss o( or i'6/r$ to the -oo&s !a/se& %$ its (ail/re to e,er!ise !are 1ith re-ar& to the -oo&s that a reaso'a%l$ !are(/l +erso' 1o/l& e,er!ise /'&er si#ilar !ir!/#sta'!es. Do1e)er2 /'less other1ise a-ree&2 the 1areho/se is 'ot lia%le (or &a#a-es that !o/l& 'ot ha)e %ee' a)oi&e& %$ the e,er!ise o( that !are. (%) =a#a-es #a$ %e li#ite& %$ a ter# i' the 1areho/se re!ei+t or stora-e a-ree#e't li#iti'- the a#o/'t o( lia%ilit$ i' !ase o( loss or &a#a-e %e$o'& 1hi!h the 1areho/se is 'ot lia%le. S/!h a li#itatio' is 'ot e((e!ti)e 1ith res+e!t to the 1areho/seBs lia%ilit$ (or !o')ersio' to its o1' /se. The 1areho/seBs lia%ilit$2 o' re7/est o( the %ailor i' a re!or& at the ti#e o( si-'i'- s/!h stora-e a-ree#e't or 1ithi' a reaso'a%le ti#e a(ter re!ei+t o( the 1areho/se re!ei+t2 #a$ %e i'!rease& o' +art or all o( the -oo&s !o)ere& %$ the stora-e a-ree#e't or the 1areho/se re!ei+t. I' this e)e't2 i'!rease& rates #a$ %e !har-e& %ase& o' a' i'!rease& )al/atio' o( the -oo&s. (!) Reaso'a%le +ro)isio's as to the ti#e a'& #a''er o( +rese'ti'- !lai#s a'& !o##e'!i'- a!tio's %ase& o' the %ail#e't #a$ %e i'!l/&e& i' the 1areho/se re!ei+t or stora-e a-ree#e't. (&) This se!tio' &oes 'ot i#+air or re+eal I'sert re(ere'!e to a'$ stat/te that i#+oses a hi-her res+o'si%ilit$ /+o' the 1areho/se or i')ali&ates !o'tra!t/al li#itatio's that 1o/l& %e +er#issi%le /'&er this Arti!le." ;-*09. Title U'&er Careho/se Re!ei+t =e(eate& i' Certai' Cases. A %/$er i' or&i'ar$ !o/rse o( %/si'ess o( (/'-i%le -oo&s -oo&s a'& &eli)ere& %$ a 1areho/se that is also i' the %/si'ess o( %/$i'- a'& selli'- s/!h -oo&s ta5es the -oo&s (ree o( a'$ !lai# /'&er a 1areho/se re!ei+t e)e' i( the re!ei+t is 'e-otia%le a'& has %ee' &/l$ 'e-otiate&. ;-*0:. Ter#i'atio' o( Stora-e at Careho/seBs O+tio'. (a) A 1areho/se2 %$ -i)i'- 'oti!e to the +erso' o' 1hose a!!o/'t the -oo&s are hel& a'& a'$ other +erso' 5'o1' to !lai# a' i'terest i' the -oo&s2 #a$ re7/ire +a$#e't o(

a'$ !har-es a'& re#o)al o( the -oo&s (ro# the 1areho/se at the ter#i'atio' o( the +erio& o( stora-e (i,e& %$ the &o!/#e't o( title or2 i( a +erio& is 'ot (i,e&2 1ithi' a state& +erio& 'ot less tha' .0 &a$s a(ter the 1areho/se -i)es 'oti!e. I( the -oo&s are 'ot re#o)e& %e(ore the &ate s+e!i(ie& i' the 'oti!e2 the 1areho/se #a$ sell the# +/rs/a't to Se!tio' ;-*10. (%) I( a 1areho/se i' -oo& (aith %elie)es that -oo&s are a%o/t to &eteriorate or &e!li'e i' )al/e to less tha' the a#o/'t o( its lie' 1ithi' the ti#e +ro)i&e& i' s/%se!tio' (a) a'& Se!tio' ;-*102 the 1areho/se #a$ s+e!i($ i' the 'oti!e -i)e' /'&er s/%se!tio' (a) a'$ reaso'a%le shorter ti#e (or re#o)al o( the -oo&s a'&2 i( the -oo&s are 'ot re#o)e&2 #a$ sell the# at +/%li! sale hel& 'ot less tha' o'e 1ee5 a(ter a si'-le a&)ertise#e't or +osti'-. (!) I(2 as a res/lt o( a 7/alit$ or !o'&itio' o( the -oo&s o( 1hi!h the 1areho/se &i& 'ot ha)e 'oti!e at the ti#e o( &e+osit2 the -oo&s are a ha3ar& to other +ro+ert$2 the 1areho/se (a!ilities2 or other +erso's2 the 1areho/se #a$ sell the -oo&s at +/%li! or +ri)ate sale 1itho/t a&)ertise#e't or +osti'- o' reaso'a%le 'oti(i!atio' to all +erso's 5'o1' to !lai# a' i'terest i' the -oo&s. I( the 1areho/se2 a(ter a reaso'a%le e((ort2 is /'a%le to sell the -oo&s2 it #a$ &is+ose o( the# i' a'$ la1(/l #a''er a'& &oes 'ot i'!/r lia%ilit$ %$ reaso' o( that &is+ositio'. (&) A 1areho/se shall &eli)er the -oo&s to a'$ +erso' e'title& to the# /'&er this arti!le /+o' &/e &e#a'& #a&e at a'$ ti#e %e(ore sale or other &is+ositio' /'&er this se!tio'. (e) A 1areho/se #a$ satis($ its lie' (ro# the +ro!ee&s o( a'$ sale or &is+ositio' /'&er this se!tio' %/t shall hol& the %ala'!e (or &eli)er$ o' the &e#a'& o( a'$ +erso' to 1hi!h the 1areho/se 1o/l& ha)e %ee' %o/'& to &eli)er the -oo&s. ;-*0;. Goo&s E/st @e Fe+t Se+arate4 >/'-i%le Goo&s. (a) U'less the 1areho/se re!ei+t +ro)i&es other1ise2 a 1areho/se shall 5ee+ se+arate the -oo&s !o)ere& %$ ea!h re!ei+t so as to +er#it at all ti#es i&e'ti(i!atio' a'& &eli)er$ o( those -oo&s. Do1e)er2 &i((ere't lots o( (/'-i%le -oo&s #a$ %e !o##i'-le&. (%) I( &i((ere't lots o( (/'-i%le -oo&s are !o##i'-le&2 the -oo& are o1'e& i' !o##o' %$ the +erso's e'title& thereto a'& the 1areho/se is se)erall$ lia%le to ea!h o1'er (or that o1'erBs share. I(2 %e!a/se o( o)eriss/e2 a #ass o( (/'-i%le -oo&s is i's/((i!ie't to #eet all the re!ei+ts the 1areho/se has iss/e& a-ai'st it2 the +erso's e'title& i'!l/&e all hol&ers to 1hi!h o)eriss/e& re!ei+ts ha)e %ee' &/l$ 'e-otiate&. ;-*0<. Altere& Careho/se Re!ei+ts. I( a %la'5 i' a 'e-otia%le ta'-i%le 1areho/se re!ei+t has %ee' (ille& i' 1itho/t a/thorit$2 a -oo& (aith +/r!haser (or )al/e a'& 1itho/t 'oti!e o( the la!5 o( a/thorit$ #a$ treat the

i'sertio' as a/thori3e&. A'$ other /'a/thori3e& alteratio' lea)es a'$ ta'-i%le or ele!tro'i! 1areho/se re!ei+t e'(or!ea%le a-ai'st the iss/er a!!or&i'- to its ori-i'al te'or. ;-*0A. Lie' o( Careho/se. (a) A 1areho/se has a lie' a-ai'st the %ailor o' the -oo&s !o)ere& %$ a 1areho/se re!ei+t or stora-e a-ree#e't or o' the +ro!ee&s thereo( i' its +ossessio' (or !har-es (or stora-e or tra's+ortatio'2 i'!l/&i'- &e#/rra-e a'& ter#i'al !har-es2 i's/ra'!e2 la%or2 or other !har-es2 +rese't or (/t/re2 i' relatio' to the -oo&s2 a'& (or e,+e'ses 'e!essar$ (or +reser)atio' o( the -oo&s or reaso'a%l$ i'!/rre& i' their sale +/rs/a't to la1. I( the +erso' o' 1hose a!!o/'t the -oo&s are hel& is lia%le (or si#ilar !har-es or e,+e'ses i' relatio' to other -oo&s 1he'e)er &e+osite& a'& it is state& i' the 1areho/se re!ei+t or stora-e a-ree#e't that a lie' is !lai#e& (or !har-es a'& e,+e'ses i' relatio' to other -oo&s2 the 1areho/se also has a lie' a-ai'st the -oo&s !o)ere& %$ the 1areho/se re!ei+t or stora-e a-ree#e't or o' the +ro!ee&s thereo( i' its +ossessio' (or those !har-es a'& e,+e'ses2 1hether or 'ot the other -oo&s ha)e %ee' &eli)ere& %$ the 1areho/se. Do1e)er2 as a-ai'st a +erso' to 1hi!h a 'e-otia%le 1areho/se re!ei+t is &/l$ 'e-otiate&2 a 1areho/seBs lie' is li#ite& to !har-es i' a' a#o/'t or at a rate s+e!i(ie& i' the 1areho/se re!ei+t or2 i( 'o !har-es are so s+e!i(ie&2 to a reaso'a%le !har-e (or stora-e o( the s+e!i(i! -oo&s !o)ere& %$ the re!ei+t s/%se7/e't to the &ate o( the re!ei+t. (%) The 1areho/se #a$ also reser)e a se!/rit$ i'terest /'&er Arti!le A a-ai'st the %ailor (or the #a,i#/# a#o/'t s+e!i(ie& o' the re!ei+t (or !har-es other tha' those s+e!i(ie& i' s/%se!tio' (a)2 s/!h as (or #o'e$ a&)a'!e& a'& i'terest. A se!/rit$ i'terest is -o)er'e& %$ Arti!le A. (!) A 1areho/seBs lie' (or !har-es a'& e,+e'ses /'&er s/%se!tio' (a) or a se!/rit$ i'terest /'&er s/%se!tio' (%) is also e((e!ti)e a-ai'st a'$ +erso' that so e'tr/ste& the %ailor 1ith +ossessio' o( the -oo&s that a +le&-e o( the# %$ the %ailor to a -oo& (aith +/r!haser (or )al/e 1o/l& ha)e %ee' )ali&. Do1e)er2 the lie' or se!/rit$ i'terest is 'ot e((e!ti)e a-ai'st a +erso' that %e(ore iss/a'!e o( a &o!/#e't o( title ha& a le-al i'terest or a +er(e!te& se!/rit$ i'terest i' the -oo&s a'& that &i& 'ot0 (1) &eli)er or e'tr/st the -oo&s or a'$ &o!/#e't !o)eri'- the -oo&s to the %ailor or the %ailorBs 'o#i'ee 1ith a!t/al or a++are't a/thorit$ to shi+2 store2 or sell4 or 1ith +o1er to o%tai' &eli)er$ /'&er Se!tio' ;-80.4 or 1ith +o1er o( &is+ositio' /'&er Se!tio's *80.2 *A-.08(*)2 *A-.09(*) or A-.*0 or other stat/te or r/le o( la14 or (*) a!7/ies!e i' the +ro!/re#e't %$ the %ailor or its 'o#i'ee o( a'$ &o!/#e't. (&) A 1areho/seBs lie' o' ho/sehol& -oo&s (or !har-es a'& e,+e'ses i' relatio' to the -oo&s /'&er s/%se!tio' (a) is also e((e!ti)e a-ai'st all +erso's i( the &e+ositor 1as the

le-al +ossessor o( the -oo&s at the ti#e o( &e+osit. I' this s/%se!tio'2 ?ho/sehol& -oo&s? #ea's (/r'it/re2 (/r'ishi'-s2 or +erso'al e((e!ts /se& %$ the &e+ositor i' a &1elli'-. (e) A 1areho/se loses its lie' o' a'$ -oo&s that it )ol/'taril$ &eli)ers or /'6/sti(ia%l$ re(/ses to &eli)er. ;-*10. E'(or!e#e't o( Careho/seBs Lie'. (a) E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (%)2 a 1areho/seBs lie' #a$ %e e'(or!e& %$ +/%li! or +ri)ate sale o( the -oo&s2 i' %/l5 or i' +a!5a-es2 at a'$ ti#e or +la!e a'& o' a'$ ter#s that are !o##er!iall$ reaso'a%le2 a(ter 'oti($i'- all +erso's 5'o1' to !lai# a' i'terest i' the -oo&s. The 'oti(i!atio' #/st i'!l/&e a state#e't o( the a#o/'t &/e2 the 'at/re o( the +ro+ose& sale2 a'& the ti#e a'& +la!e o( a'$ +/%li! sale. The (a!t that a %etter +ri!e !o/l& ha)e %ee' o%tai'e& %$ a sale at a &i((ere't ti#e or i' a &i((ere't #etho& (ro# that sele!te& %$ the 1areho/se is 'ot o( itsel( s/((i!ie't to esta%lish that the sale 1as 'ot #a&e i' a !o##er!iall$ reaso'a%le #a''er. The 1areho/se has sol& i' a !o##er!iall$ reaso'a%le #a''er i( the 1areho/se sells the -oo&s i' the /s/al #a''er i' a'$ re!o-'i3e& #ar5et there(or2 sells at the +ri!e !/rre't i' that #ar5et at the ti#e o( the sale2 or has other1ise sol& i' !o'(or#it$ 1ith !o##er!iall$ reaso'a%le +ra!ti!es a#o'- &ealers i' the t$+e o( -oo&s sol&. A sale o( #ore -oo&s tha' a++are'tl$ 'e!essar$ to %e o((ere& to e's/re satis(a!tio' o( the o%li-atio' is 'ot !o##er!iall$ reaso'a%le2 e,!e+t i' !ases !o)ere& %$ the +re!e&i'se'te'!e. (%) A 1areho/seBs lie' o' -oo&s2 other tha' -oo&s store& %$ a #er!ha't i' the !o/rse o( its %/si'ess2 #a$ %e e'(or!e& o'l$ i( the (ollo1i'- re7/ire#e'ts are satis(ie&0 (1) All +erso's 5'o1' to !lai# a' i'terest i' the -oo&s #/st %e 'oti(ie&. (*) The 'oti(i!atio' #/st i'!l/&e a' ite#i3e& state#e't o( the !lai#2 a &es!ri+tio' o( the -oo&s s/%6e!t to the lie'2 a &e#a'& (or +a$#e't 1ithi' a s+e!i(ie& ti#e 'ot less tha' 10 &a$s a(ter re!ei+t o( the 'oti(i!atio'2 a'& a !o's+i!/o/s state#e't that /'less the !lai# is +ai& 1ithi' that ti#e the -oo&s 1ill %e a&)ertise& (or sale a'& sol& %$ a/!tio' at a s+e!i(ie& ti#e a'& +la!e. (.) The sale #/st !o'(or# to the ter#s o( the 'oti(i!atio'. (8) The sale #/st %e hel& at the 'earest s/ita%le +la!e to 1here the -oo&s are hel& or store&. (9) A(ter the e,+iratio' o( the ti#e -i)e' i' the 'oti(i!atio'2 a' a&)ertise#e't o( the sale #/st %e +/%lishe& o'!e a 1ee5 (or t1o 1ee5s !o'se!/ti)el$ i' a 'e1s+a+er o( -e'eral !ir!/latio' 1here the sale is to %e hel&. The a&)ertise#e't #/st i'!l/&e a &es!ri+tio' o(

the -oo&s2 the 'a#e o( the +erso' o' 1hose a!!o/'t the -oo&s are %ei'- hel&2 a'& the ti#e a'& +la!e o( the sale. The sale #/st ta5e +la!e at least 19 &a$s a(ter the (irst +/%li!atio'. I( there is 'o 'e1s+a+er o( -e'eral !ir!/latio' 1here the sale is to %e hel&2 the a&)ertise#e't #/st %e +oste& at least 10 &a$s %e(ore the sale i' 'ot less tha' si, !o's+i!/o/s +la!es i' the 'ei-h%orhoo& o( the +ro+ose& sale. (!) @e(ore a'$ sale +/rs/a't to this se!tio'2 a'$ +erso' !lai#i'- a ri-ht i' the -oo&s #a$ +a$ the a#o/'t 'e!essar$ to satis($ the lie' a'& the reaso'a%le e,+e'ses i'!/rre& i' !o#+l$i'- 1ith this se!tio'. I' that e)e't2 the -oo&s #a$ 'ot %e sol& %/t #/st %e retai'e& %$ the 1areho/se s/%6e!t to the ter#s o( the re!ei+t a'& this arti!le. (&) A 1areho/se #a$ %/$ at a'$ +/%li! sale hel& +/rs/a't to this se!tio'. (e) A +/r!haser i' -oo& (aith o( -oo&s sol& to e'(or!e a 1areho/seBs lie' ta5es the -oo&s (ree o( a'$ ri-hts o( +erso's a-ai'st 1hi!h the lie' 1as )ali&2 &es+ite the 1areho/seBs 'o'!o#+lia'!e 1ith this se!tio'. (() A 1areho/se #a$ satis($ its lie' (ro# the +ro!ee&s o( a'$ sale +/rs/a't to this se!tio' %/t shall hol& the %ala'!e2 i( a'$2 (or &eli)er$ o' &e#a'& to a'$ +erso' to 1hi!h the 1areho/se 1o/l& ha)e %ee' %o/'& to &eli)er the -oo&s. (-) The ri-hts +ro)i&e& %$ this se!tio' are i' a&&itio' to all other ri-hts allo1e& %$ la1 to a !re&itor a-ai'st a &e%tor. (h) I( a lie' is o' -oo&s store& %$ a #er!ha't i' the !o/rse o( its %/si'ess2 the lie' #a$ %e e'(or!e& i' a!!or&a'!e 1ith s/%se!tio' (a) or (%). (i) A 1areho/se is lia%le (or &a#a-es !a/se& %$ (ail/re to !o#+l$ 1ith the re7/ire#e'ts (or sale /'&er this se!tio' a'&2 i' !ase o( 1ill(/l )iolatio'2 is lia%le (or !o')ersio'. PART .. @ILLS O> LA=ING0 SPECIAL PROVISIONS ;-.01. Lia%ilit$ (or No'-re!ei+t or Eis&es!ri+tio'4 ?Sai& to Co'tai'?4 ?Shi++erBs Loa& a'& Co/'t?4 I#+ro+er Da'&li'-. (a) A !o'si-'ee o( a 'o''e-otia%le %ill o( la&i'- 1hi!h has -i)e' )al/e i' -oo& (aith2 or a hol&er to 1hi!h a 'e-otia%le %ill has %ee' &/l$ 'e-otiate&2 rel$i'- /+o' the &es!ri+tio' o( the -oo&s i' the %ill or /+o' the &ate sho1' i' the %ill2 #a$ re!o)er (ro# the iss/er &a#a-es !a/se& %$ the #is&ati'- o( the %ill or the 'o're!ei+t or #is&es!ri+tio' o( the -oo&s2 e,!e+t to the e,te't that the &o!/#e't o( title i'&i!ates that the iss/er &oes 'ot 5'o1 1hether a'$ +art or all o( the -oo&s i' (a!t 1ere re!ei)e& or !o'(or# to the &es!ri+tio'2 s/!h as i' a !ase i' 1hi!h the &es!ri+tio' is i' ter#s o( #ar5s or la%els or 5i'&2 7/a'tit$2 or !o'&itio' or the re!ei+t or &es!ri+tio' is 7/ali(ie& %$ ?!o'te'ts or

!o'&itio' o( !o'te'ts o( +a!5a-es /'5'o1'?2 ?sai& to !o'tai'?2 ?shi++erBs 1ei-ht2 loa& a'& !o/'t2? or 1or&s o( si#ilar i#+ort2 i( that i'&i!atio' is tr/e. (%) I( -oo&s are loa&e& %$ the iss/er o( the %ill o( la&i'-2 the iss/er shall !o/'t the +a!5a-es o( -oo&s i( shi++e& i' +a!5a-es a'& as!ertai' the 5i'& a'& 7/a'tit$ i( shi++e& i' %/l5 a'& 1or&s s/!h as ?shi++erBs 1ei-ht2 loa& a'& !o/'t2? or 1or&s o( si#ilar i#+ort i'&i!ati'- that the &es!ri+tio' 1as #a&e %$ the shi++er are i'e((e!ti)e e,!e+t as to -oo&s !o'!eale& %$ +a!5a-es. (!) I( %/l5 -oo&s are loa&e& %$ a shi++er that #a5es a)aila%le to the iss/er o( the %ill o( la&i'- a&e7/ate (a!ilities (or 1ei-hi'- those -oo&s2 the iss/er shall as!ertai' the 5i'& a'& 7/a'tit$ 1ithi' a reaso'a%le ti#e a(ter re!ei)i'- the shi++erBs re7/est i' a re!or& to &o so. I' that !ase2 ?shi++erBs 1ei-ht? or 1or&s o( si#ilar i#+ort are i'e((e!ti)e. (&) The iss/er2 %$ i'!l/&i'- i' the %ill o( la&i'- the 1or&s ?shi++erBs 1ei-ht2 loa& a'& !o/'t2? or 1or&s o( si#ilar i#+ort2 #a$ i'&i!ate that the -oo&s 1ere loa&e& %$ the shi++er2 a'&2 i( that state#e't is tr/e2 the iss/er is 'ot lia%le (or &a#a-es !a/se& %$ the i#+ro+er loa&i'-. Do1e)er2 o#issio' o( s/!h 1or&s &oes 'ot i#+l$ lia%ilit$ (or &a#a-es !a/se& %$ i#+ro+er loa&i'-. (e) A shi++er -/ara'tees to the iss/er the a!!/ra!$ at the ti#e o( shi+#e't o( the &es!ri+tio'2 #ar5s2 la%els2 '/#%er2 5i'&2 7/a'tit$2 !o'&itio'2 a'& 1ei-ht2 as (/r'ishe& %$ the shi++er2 a'& the shi++er shall i'&e#'i($ the iss/er a-ai'st &a#a-e !a/se& %$ i'a!!/ra!ies i' those +arti!/lars. This ri-ht o( the iss/er to that i'&e#'it$ &oes 'ot li#it its res+o'si%ilit$ or lia%ilit$ /'&er the !o'tra!t o( !arria-e to a'$ +erso' other tha' the shi++er. ;-.0*. Thro/-h @ills o( La&i'- a'& Si#ilar =o!/#e'ts o( Title. (a) The iss/er o( a thro/-h %ill o( la&i'- or other &o!/#e't o( title e#%o&$i'- a' /'&erta5i'- to %e +er(or#e& i' +art %$ a +erso' a!ti'- as its a-e't or %$ a +er(or#i'!arrier is lia%le to a'$ +erso' e'title& to re!o)er o' the &o!/#e't (or a'$ %rea!h %$ the other +erso' or the +er(or#i'- !arrier o( its o%li-atio' /'&er the &o!/#e't. Do1e)er2 to the e,te't that the %ill !o)ers a' /'&erta5i'- to %e +er(or#e& o)erseas or i' territor$ 'ot !o'ti-/o/s to the !o'ti'e'tal U'ite& States or a' /'&erta5i'- i'!l/&i'- #atters other tha' tra's+ortatio'2 this lia%ilit$ (or %rea!h %$ the other +erso' or the +er(or#i'!arrier #a$ %e )arie& %$ a-ree#e't o( the +arties. (%) I( -oo&s !o)ere& %$ a thro/-h %ill o( la&i'- or other &o!/#e't o( title e#%o&$i'- a' /'&erta5i'- to %e +er(or#e& i' +art %$ a +erso' other tha' the iss/er are re!ei)e& %$ that +erso'2 the +erso' is s/%6e!t2 1ith res+e!t to its o1' +er(or#a'!e 1hile the -oo&s are i' its +ossessio'2 to the o%li-atio' o( the iss/er. The +erso'Bs o%li-atio' is &is!har-e& %$ &eli)er$ o( the -oo&s to a'other +erso' +/rs/a't to the &o!/#e't a'& &oes 'ot i'!l/&e lia%ilit$ (or %rea!h %$ a'$ other +erso' or %$ the iss/er.

(!) The iss/er o( a thro/-h %ill o( la&i'- or other &o!/#e't o( title &es!ri%e& i' s/%se!tio' (a) is e'title& to re!o)er (ro# the +er(or#i'- !arrier2 or other +erso' i' +ossessio' o( the -oo&s 1he' the %rea!h o( the o%li-atio' /'&er the &o!/#e't o!!/rre&0

(1) the a#o/'t it #a$ %e re7/ire& to +a$ to a'$ +erso' e'title& to re!o)er o' the &o!/#e't (or the %rea!h2 as #a$ %e e)i&e'!e& %$ a'$ re!ei+t2 6/&-#e't2 or tra's!ri+t o( 6/&-#e't2 a'&4 (*) the a#o/'t o( a'$ e,+e'se reaso'a%l$ i'!/rre& %$ the iss/er i' &e(e'&i'- a'$ a!tio' !o##e'!e& %$ a'$ +erso' e'title& to re!o)er o' the &o!/#e't (or the %rea!h. ;-.0.. =i)ersio'4 Re!o'si-'#e't4 Cha'-e o( I'str/!tio's. (a) U'less the %ill o( la&i'- other1ise +ro)i&es2 a !arrier #a$ &eli)er the -oo&s to a +erso' or &esti'atio' other tha' that state& i' the %ill or #a$ other1ise &is+ose o( the -oo&s2 1itho/t lia%ilit$ (or #is&eli)er$2 o' i'str/!tio's (ro#0 (1) the hol&er o( a 'e-otia%le %ill4 (*) the !o'si-'or o' a 'o''e-otia%le %ill e)e' i( the !o'si-'ee has -i)e' !o'trar$ i'str/!tio's4 (.) the !o'si-'ee o' a 'o''e-otia%le %ill i' the a%se'!e o( !o'trar$ i'str/!tio's (ro# the !o'si-'or2 i( the -oo&s ha)e arri)e& at the %ille& &esti'atio' or i( the !o'si-'ee is i' +ossessio' o( the ta'-i%le %ill or i' !o'trol o( the ele!tro'i! %ill4 or (8) the !o'si-'ee o' a 'o''e-otia%le %ill2 i( the !o'si-'ee is e'title& as a-ai'st the !o'si-'or to &is+ose o( the -oo&s. (%) U'less i'str/!tio's &es!ri%e& i' s/%se!tio' (a) are i'!l/&e& i' a 'e-otia%le %ill o( la&i'-2 a +erso' to 1hi!h the %ill is &/l$ 'e-otiate& #a$ hol& the %ailee a!!or&i'- to the ori-i'al ter#s. ;-.08. Ta'-i%le @ills o( La&i'- i' a Set. (a) E,!e+t as !/sto#ar$ i' i'ter'atio'al tra's+ortatio'2 a ta'-i%le %ill o( la&i'- #a$ 'ot %e iss/e& i' a set o( +arts. The iss/er is lia%le (or &a#a-es !a/se& %$ )iolatio' o( this s/%se!tio'.

(%) I( a ta'-i%le %ill o( la&i'- is la1(/ll$ iss/e& i' a set o( +arts2 ea!h o( 1hi!h !o'tai's a' i&e'ti(i!atio' !o&e a'& is e,+resse& to %e )ali& o'l$ i( the -oo&s ha)e 'ot %ee' &eli)ere& a-ai'st a'$ other +art2 the 1hole o( the +arts !o'stit/tes o'e %ill. (!) I( a ta'-i%le 'e-otia%le %ill o( la&i'- is la1(/ll$ iss/e& i' a set o( +arts a'& &i((ere't +arts are 'e-otiate& to &i((ere't +erso's2 the title o( the hol&er to 1hi!h the (irst &/e 'e-otiatio' is #a&e +re)ails as to %oth the &o!/#e't o( title a'& the -oo&s e)e' i( a'$ later hol&er #a$ ha)e re!ei)e& the -oo&s (ro# the !arrier i' -oo& (aith a'& &is!har-e& the !arrierBs o%li-atio' %$ s/rre'&eri'- its +art. (&) A +erso' that 'e-otiates or tra's(ers a si'-le +art o( a ta'-i%le %ill o( la&i'- iss/e& i' a set is lia%le to hol&ers o( that +art as i( it 1ere the 1hole set. (e) The %ailee is o%li-e& to &eli)er i' a!!or&a'!e 1ith Part 8 a-ai'st the (irst +rese'te& +art o( a ta'-i%le %ill o( la&i'- la1(/ll$ iss/e& i' a set. =eli)er$ i' this #a''er &is!har-es the %aileeBs o%li-atio' o' the 1hole %ill. ;-.09. =esti'atio' @ills. (a) I'stea& o( iss/i'- a %ill o( la&i'- to the !o'si-'or at the +la!e o( shi+#e't2 a !arrier2 at the re7/est o( the !o'si-'or2 #a$ +ro!/re the %ill to %e iss/e& at &esti'atio' or at a'$ other +la!e &esi-'ate& i' the re7/est. (%) U+o' re7/est o( a'$ +erso' e'title& as a-ai'st a !arrier to !o'trol the -oo&s 1hile i' tra'sit a'& o' s/rre'&er o( +ossessio' or !o'trol o( a'$ o/tsta'&i'- %ill o( la&i'- or other re!ei+t !o)eri'- the -oo&s2 the iss/er2 s/%6e!t to Se!tio' ;-1092 #a$ +ro!/re a s/%stit/te %ill to %e iss/e& at a'$ +la!e &esi-'ate& i' the re7/est. ;-.0:. Altere& @ills o( La&i'-. A' /'a/thori3e& alteratio' or (illi'- i' o( a %la'5 i' a %ill o( la&i'- lea)es the %ill e'(or!ea%le a!!or&i'- to its ori-i'al te'or. ;-.0;. Lie' o( Carrier. (a) A !arrier has a lie' o' the -oo&s !o)ere& %$ a %ill o( la&i'- or o' the +ro!ee&s thereo( i' its +ossessio' (or !har-es a(ter the &ate o( the !arrierBs re!ei+t o( the -oo&s (or stora-e or tra's+ortatio'2 i'!l/&i'- &e#/rra-e a'& ter#i'al !har-es2 a'& (or e,+e'ses 'e!essar$ (or +reser)atio' o( the -oo&s i'!i&e't to their tra's+ortatio' or reaso'a%l$ i'!/rre& i' their sale +/rs/a't to la1. Do1e)er2 a-ai'st a +/r!haser (or )al/e o( a 'e-otia%le %ill o( la&i'-2 a !arrierBs lie' is li#ite& to !har-es state& i' the %ill or the a++li!a%le tari((s or2 i( 'o !har-es are state&2 a reaso'a%le !har-e.

(%) A lie' (or !har-es a'& e,+e'ses /'&er s/%se!tio' (a) o' -oo&s that the !arrier 1as re7/ire& %$ la1 to re!ei)e (or tra's+ortatio' is e((e!ti)e a-ai'st the !o'si-'or or a'$ +erso' e'title& to the -oo&s /'less the !arrier ha& 'oti!e that the !o'si-'or la!5e& a/thorit$ to s/%6e!t the -oo&s to those !har-es a'& e,+e'ses. A'$ other lie' /'&er s/%se!tio' (a) is e((e!ti)e a-ai'st the !o'si-'or a'& a'$ +erso' that +er#itte& the %ailor to ha)e !o'trol or +ossessio' o( the -oo&s /'less the !arrier ha& 'oti!e that the %ailor la!5e& a/thorit$. (!) A !arrier loses its lie' o' a'$ -oo&s that it )ol/'taril$ &eli)ers or /'6/sti(ia%l$ re(/ses to &eli)er. ;-.0<. E'(or!e#e't o( CarrierBs Lie'. (a) A !arrierBs lie' o' -oo&s #a$ %e e'(or!e& %$ +/%li! or +ri)ate sale o( the -oo&s2 i' %/l5 or i' +a!5a-es2 at a'$ ti#e or +la!e a'& o' a'$ ter#s that are !o##er!iall$ reaso'a%le2 a(ter 'oti($i'- all +erso's 5'o1' to !lai# a' i'terest i' the -oo&s. The 'oti(i!atio' #/st i'!l/&e a state#e't o( the a#o/'t &/e2 the 'at/re o( the +ro+ose& sale2 a'& the ti#e a'& +la!e o( a'$ +/%li! sale. The (a!t that a %etter +ri!e !o/l& ha)e %ee' o%tai'e& %$ a sale at a &i((ere't ti#e or i' a &i((ere't #etho& (ro# that sele!te& %$ the !arrier is 'ot o( itsel( s/((i!ie't to esta%lish that the sale 1as 'ot #a&e i' a !o##er!iall$ reaso'a%le #a''er. The !arrier has sol& -oo&s i' a !o##er!iall$ reaso'a%le #a''er i( the !arrier sells the -oo&s i' the /s/al #a''er i' a'$ re!o-'i3e& #ar5et there(or2 sells at the +ri!e !/rre't i' that #ar5et at the ti#e o( the sale2 or has other1ise sol& i' !o'(or#it$ 1ith !o##er!iall$ reaso'a%le +ra!ti!es a#o'- &ealers i' the t$+e o( -oo&s sol&. A sale o( #ore -oo&s tha' a++are'tl$ 'e!essar$ to %e o((ere& to e's/re satis(a!tio' o( the o%li-atio' is 'ot !o##er!iall$ reaso'a%le2 e,!e+t i' !ases !o)ere& %$ the +re!e&i'- se'te'!e. (%) @e(ore a'$ sale +/rs/a't to this se!tio'2 a'$ +erso' !lai#i'- a ri-ht i' the -oo&s #a$ +a$ the a#o/'t 'e!essar$ to satis($ the lie' a'& the reaso'a%le e,+e'ses i'!/rre& i' !o#+l$i'- 1ith this se!tio'. I' that e)e't2 the -oo&s #a$ 'ot %e sol& %/t #/st %e retai'e& %$ the !arrier2 s/%6e!t to the ter#s o( the %ill o( la&i'- a'& this arti!le. (!) A !arrier #a$ %/$ at a'$ +/%li! sale +/rs/a't to this se!tio'. (&) A +/r!haser i' -oo& (aith o( -oo&s sol& to e'(or!e a !arrierBs lie' ta5es the -oo&s (ree o( a'$ ri-hts o( +erso's a-ai'st 1hi!h the lie' 1as )ali&2 &es+ite the !arrierBs 'o'!o#+lia'!e 1ith this se!tio'. (e) A !arrier #a$ satis($ its lie' (ro# the +ro!ee&s o( a'$ sale +/rs/a't to this se!tio' %/t shall hol& the %ala'!e2 i( a'$2 (or &eli)er$ o' &e#a'& to a'$ +erso' to 1hi!h the !arrier 1o/l& ha)e %ee' %o/'& to &eli)er the -oo&s.

(() The ri-hts +ro)i&e& %$ this se!tio' are i' a&&itio' to all other ri-hts allo1e& %$ la1 to a !re&itor a-ai'st a &e%tor. (-) A !arrierBs lie' #a$ %e e'(or!e& +/rs/a't to either s/%se!tio' (a) or the +ro!e&/re set (orth i' Se!tio' ;-*10(%). (h) A !arrier is lia%le (or &a#a-es !a/se& %$ (ail/re to !o#+l$ 1ith the re7/ire#e'ts (or sale /'&er this se!tio' a'&2 i' !ase o( 1ill(/l )iolatio'2 is lia%le (or !o')ersio'. ;-.0A. =/t$ o( Care4 Co'tra!t/al Li#itatio' o( CarrierBs Lia%ilit$. (a) A !arrier that iss/es a %ill o( la&i'-2 1hether 'e-otia%le or 'o''e-otia%le2 shall e,er!ise the &e-ree o( !are i' relatio' to the -oo&s 1hi!h a reaso'a%l$ !are(/l +erso' 1o/l& e,er!ise /'&er si#ilar !ir!/#sta'!es. This s/%se!tio' &oes 'ot a((e!t a'$ stat/te2 re-/latio'2 or r/le o( la1 that i#+oses lia%ilit$ /+o' a !o##o' !arrier (or &a#a-es 'ot !a/se& %$ its 'e-li-e'!e. (%) =a#a-es #a$ %e li#ite& %$ a ter# i' the %ill o( la&i'- or i' a tra's+ortatio' a-ree#e't that the !arrierBs lia%ilit$ #a$ 'ot e,!ee& a )al/e state& i' the %ill or tra's+ortatio' a-ree#e't i( the !arrierBs rates are &e+e'&e't /+o' )al/e a'& the !o'si-'or is a((or&e& a' o++ort/'it$ to &e!lare a hi-her )al/e a'& the !o'si-'or is a&)ise& o( the o++ort/'it$. Do1e)er2 s/!h a li#itatio' is 'ot e((e!ti)e 1ith res+e!t to the !arrierBs lia%ilit$ (or !o')ersio' to its o1' /se. (!) Reaso'a%le +ro)isio's as to the ti#e a'& #a''er o( +rese'ti'- !lai#s a'& !o##e'!i'- a!tio's %ase& o' the shi+#e't #a$ %e i'!l/&e& i' a %ill o( la&i'- or a tra's+ortatio' a-ree#e't. PART 8. CAREDOUSE RECEIPTS AN= @ILLS O> LA=ING0 GENERAL O@LIGATIONS ;-801. Irre-/larities i' Iss/e o( Re!ei+t or @ill or Co'&/!t o( Iss/er. The o%li-atio's i#+ose& %$ this arti!le o' a' iss/er a++l$ to a &o!/#e't o( title e)e' i(0 (1) the &o!/#e't &oes 'ot !o#+l$ 1ith the re7/ire#e'ts o( this arti!le or o( a'$ other stat/te2 r/le2 or re-/latio' re-ar&i'- its iss/e2 (or#2 or !o'te't4 (*) the iss/er )iolate& la1s re-/lati'- the !o'&/!t o( its %/si'ess4 (.) the -oo&s !o)ere& %$ the &o!/#e't 1ere o1'e& %$ the %ailee 1he' the &o!/#e't 1as iss/e&4 or (8) the +erso' iss/i'- the &o!/#e't is 'ot a 1areho/se %/t the &o!/#e't +/r+orts to %e a 1areho/se re!ei+t.

 ;-80*. =/+li!ate =o!/#e't o( Title4 O)eriss/e. A &/+li!ate or a'$ other &o!/#e't o( title +/r+orti'- to !o)er -oo&s alrea&$ re+rese'te& %$ a' o/tsta'&i'- &o!/#e't o( the sa#e iss/er &oes 'ot !o'(er a'$ ri-ht i' the -oo&s2 e,!e+t as +ro)i&e& i' the !ase o( ta'-i%le %ills o( la&i'- i' a set o( +arts2 o)eriss/e o( &o!/#e'ts (or (/'-i%le -oo&s2 s/%stit/tes (or lost2 stole'2 or &estro$e& &o!/#e'ts2 or s/%stit/te &o!/#e'ts iss/e& +/rs/a't to Se!tio' ;-109. The iss/er is lia%le (or &a#a-es !a/se& %$ its o)eriss/e or (ail/re to i&e'ti($ a &/+li!ate &o!/#e't %$ a !o's+i!/o/s 'otatio'. ;-80.. O%li-atio' o( Careho/se or Carrier to =eli)er4 E,!/se. (a) A %ailee shall &eli)er the -oo&s to a +erso' e'title& /'&er a &o!/#e't o( title i( the +erso' !o#+lies 1ith s/%se!tio's (%) a'& (!)2 /'less a'& to the e,te't that the %ailee esta%lishes a'$ o( the (ollo1i'-0 (1) &eli)er$ o( the -oo&s to a +erso' 1hose re!ei+t 1as ri-ht(/l as a-ai'st the !lai#a't4 (*) &a#a-e to or &ela$2 loss2 or &estr/!tio' o( the -oo&s (or 1hi!h the %ailee is 'ot lia%le4 (.) +re)io/s sale or other &is+ositio' o( the -oo&s i' la1(/l e'(or!e#e't o( a lie' or o' a 1areho/seBs la1(/l ter#i'atio' o( stora-e4 (8) the e,er!ise %$ a seller o( its ri-ht to sto+ &eli)er$ +/rs/a't to Se!tio' *-;09 or %$ a lessor o( its ri-ht to sto+ &eli)er$ +/rs/a't to Se!tio' *A-9*:4 (9) a &i)ersio'2 re!o'si-'#e't2 or other &is+ositio' +/rs/a't to Se!tio' ;-.0.4 (:) release2 satis(a!tio'2 or a'$ other (a!t a((or&i'- a +erso'al &e(e'se a-ai'st the !lai#a't4 or (;) a'$ other la1(/l e,!/se. (%) A +erso' !lai#i'- -oo&s !o)ere& %$ a &o!/#e't o( title shall satis($ the %aileeBs lie' i( the %ailee so re7/ests or the %ailee is +rohi%ite& %$ la1 (ro# &eli)eri'- the -oo&s /'til the !har-es are +ai&. (!) U'less a +erso' !lai#i'- the -oo&s is o'e a-ai'st 1hi!h the &o!/#e't o( title &oes 'ot !o'(er a ri-ht /'&er Se!tio' ;-90.(a)0

(1) the +erso' !lai#i'- /'&er a &o!/#e't shall s/rre'&er +ossessio' or !o'trol o( a'$ o/tsta'&i'- 'e-otia%le &o!/#e't !o)eri'- the -oo&s (or !a'!ellatio' or i'&i!atio' o( +artial &eli)eries4 a'& (*) the %ailee shall !a'!el the &o!/#e't or !o's+i!/o/sl$ i'&i!ate i' the &o!/#e't the +artial &eli)er$ or %e lia%le to a'$ +erso' to 1hi!h the &o!/#e't is &/l$ 'e-otiate&. ;-808. No Lia%ilit$ (or Goo& >aith =eli)er$ P/rs/a't to =o!/#e't o( Title. A %ailee that i' -oo& (aith has re!ei)e& -oo&s a'& &eli)ere& or other1ise &is+ose& o( the -oo&s a!!or&i'- to the ter#s o( a &o!/#e't o( title or +/rs/a't to this arti!le is 'ot lia%le (or the -oo&s e)e' i(0 (1) the +erso' (ro# 1hi!h the %ailee re!ei)e& the -oo&s &i& 'ot ha)e a/thorit$ to +ro!/re the &o!/#e't or to &is+ose o( the -oo&s4 or (*) the +erso' to 1hi!h the %ailee &eli)ere& the -oo&s &i& 'ot ha)e a/thorit$ to re!ei)e the -oo&s. PART 9. CAREDOUSE RECEIPTS AN= @ILLS O> LA=ING0 NEGOTIATION AN= TRANS>ER ;-901. >or# o( Ne-otiatio' a'& Re7/ire#e'ts o( =/e Ne-otiatio'. (a) The (ollo1i'- r/les a++l$ to a 'e-otia%le ta'-i%le &o!/#e't o( title0 (1) I( the &o!/#e'tBs ori-i'al ter#s r/' to the or&er o( a 'a#e& +erso'2 the &o!/#e't is 'e-otiate& %$ the 'a#e& +erso'Bs i'&orse#e't a'& &eli)er$. A(ter the 'a#e& +erso'Bs i'&orse#e't i' %la'5 or to %earer2 a'$ +erso' #a$ 'e-otiate the &o!/#e't %$ &eli)er$ alo'e. (*) I( the &o!/#e'tBs ori-i'al ter#s r/' to %earer2 it is 'e-otiate& %$ &eli)er$ alo'e. (.) I( the &o!/#e'tBs ori-i'al ter#s r/' to the or&er o( a 'a#e& +erso' a'& it is &eli)ere& to the 'a#e& +erso'2 the e((e!t is the sa#e as i( the &o!/#e't ha& %ee' 'e-otiate&. (8) Ne-otiatio' o( the &o!/#e't a(ter it has %ee' i'&orse& to a 'a#e& +erso' re7/ires i'&orse#e't %$ the 'a#e& +erso' as 1ell as &eli)er$. (9) A &o!/#e't is &/l$ 'e-otiate& i( it is 'e-otiate& i' the #a''er state& i' this s/%se!tio' to a hol&er that +/r!hases it i' -oo& (aith2 1itho/t 'oti!e o( a'$ &e(e'se a-ai'st or !lai# to it o' the +art o( a'$ +erso'2 a'& (or )al/e2 /'less it is esta%lishe& that the 'e-otiatio' is 'ot i' the re-/lar !o/rse o( %/si'ess or (i'a'!i'- or i')ol)es re!ei)i'- the &o!/#e't i' settle#e't or +a$#e't o( a #o'etar$ o%li-atio'.

(%) The (ollo1i'- r/les a++l$ to a 'e-otia%le ele!tro'i! &o!/#e't o( title0 (1) I( the &o!/#e'tBs ori-i'al ter#s r/' to the or&er o( a 'a#e& +erso' or to %earer2 the &o!/#e't is 'e-otiate& %$ &eli)er$ o( the &o!/#e't to a'other +erso'. I'&orse#e't %$ the 'a#e& +erso' is 'ot re7/ire& to 'e-otiate the &o!/#e't. (*) I( the &o!/#e'tBs ori-i'al ter#s r/' to the or&er o( a 'a#e& +erso' a'& the 'a#e& +erso' has !o'trol o( the &o!/#e't2 the e((e!t is the sa#e as i( the &o!/#e't ha& %ee' 'e-otiate&. (.) A &o!/#e't is &/l$ 'e-otiate& i( it is 'e-otiate& i' the #a''er state& i' this s/%se!tio' to a hol&er that +/r!hases it i' -oo& (aith2 1itho/t 'oti!e o( a'$ &e(e'se a-ai'st or !lai# to it o' the +art o( a'$ +erso'2 a'& (or )al/e2 /'less it is esta%lishe& that the 'e-otiatio' is 'ot i' the re-/lar !o/rse o( %/si'ess or (i'a'!i'- or i')ol)es ta5i'- &eli)er$ o( the &o!/#e't i' settle#e't or +a$#e't o( a #o'etar$ o%li-atio'. (!) I'&orse#e't o( a 'o''e-otia%le &o!/#e't o( title 'either #a5es it 'e-otia%le 'or a&&s to the tra's(ereeBs ri-hts. (&) The 'a#i'- i' a 'e-otia%le %ill o( la&i'- o( a +erso' to %e 'oti(ie& o( the arri)al o( the -oo&s &oes 'ot li#it the 'e-otia%ilit$ o( the %ill or !o'stit/te 'oti!e to a +/r!haser o( the %ill o( a'$ i'terest o( that +erso' i' the -oo&s. ;-90*. Ri-hts A!7/ire& %$ =/e Ne-otiatio'. (a) S/%6e!t to Se!tio's ;-*09 a'& ;-90.2 a hol&er to 1hi!h a 'e-otia%le &o!/#e't o( title has %ee' &/l$ 'e-otiate& a!7/ires there%$0 (1) title to the &o!/#e't4 (*) title to the -oo&s4 (.) all ri-hts a!!r/i'- /'&er the la1 o( a-e'!$ or esto++el2 i'!l/&i'- ri-hts to -oo&s &eli)ere& to the %ailee a(ter the &o!/#e't 1as iss/e&4 a'& (8) the &ire!t o%li-atio' o( the iss/er to hol& or &eli)er the -oo&s a!!or&i'- to the ter#s o( the &o!/#e't (ree o( a'$ &e(e'se or !lai# %$ the iss/er e,!e+t those arisi'- /'&er the ter#s o( the &o!/#e't or /'&er this arti!le. I' the !ase o( a &eli)er$ or&er2 the %aileeBs o%li-atio' a!!r/es o'l$ /+o' the %aileeBs a!!e+ta'!e o( the &eli)er$ or&er a'& the o%li-atio' a!7/ire& %$ the hol&er is that the iss/er a'& a'$ i'&orser 1ill +ro!/re the a!!e+ta'!e o( the %ailee.

(%) S/%6e!t to Se!tio' ;-90.2 title a'& ri-hts a!7/ire& %$ &/e 'e-otiatio' are 'ot &e(eate& %$ a'$ sto++a-e o( the -oo&s re+rese'te& %$ the &o!/#e't o( title or %$ s/rre'&er o( the -oo&s %$ the %ailee a'& are 'ot i#+aire& e)e' i(0 (1) the &/e 'e-otiatio' or a'$ +rior &/e 'e-otiatio' !o'stit/te& a %rea!h o( &/t$4 (*) a'$ +erso' has %ee' &e+ri)e& o( +ossessio' o( a 'e-otia%le ta'-i%le &o!/#e't or !o'trol o( a 'e-otia%le ele!tro'i! &o!/#e't %$ #isre+rese'tatio'2 (ra/&2 a!!i&e't2 #ista5e2 &/ress2 loss2 the(t2 or !o')ersio'4 or (.) a +re)io/s sale or other tra's(er o( the -oo&s or &o!/#e't has %ee' #a&e to a thir& +erso'. ;-90.. =o!/#e't o( Title to Goo&s =e(eate& i' Certai' Cases. (a) A &o!/#e't o( title !o'(ers 'o ri-ht i' -oo&s a-ai'st a +erso' that %e(ore iss/a'!e o( the &o!/#e't ha& a le-al i'terest or a +er(e!te& se!/rit$ i'terest i' the -oo&s a'& that &i& 'ot0 (1) &eli)er or e'tr/st the -oo&s or a'$ &o!/#e't !o)eri'- the -oo&s to the %ailor or the %ailorBs 'o#i'ee 1ith a!t/al or a++are't a/thorit$ to shi+2 store2 or sell4 1ith +o1er to o%tai' &eli)er$ /'&er Se!tio' ;-80.4 or 1ith +o1er o( &is+ositio' /'&er Se!tio' *-80.2 *A-.08(*)2 *A-.09(*)2 or A-.*0 or other stat/te or r/le o( la14 or (*) a!7/ies!e i' the +ro!/re#e't %$ the %ailor or its 'o#i'ee o( a'$ &o!/#e't. (%) Title to -oo&s %ase& /+o' a' /'a!!e+te& &eli)er$ or&er is s/%6e!t to the ri-hts o( a'$ +erso' to 1hi!h a 'e-otia%le 1areho/se re!ei+t or %ill o( la&i'- !o)eri'- the -oo&s has %ee' &/l$ 'e-otiate&. That title #a$ %e &e(eate& /'&er Se!tio' ;-908 to the sa#e e,te't as the ri-hts o( the iss/er or a tra's(eree (ro# the iss/er. (!) Title to -oo&s %ase& /+o' a %ill o( la&i'- iss/e& to a (rei-ht (or1ar&er is s/%6e!t to the ri-hts o( a'$ +erso' to 1hi!h a %ill iss/e& %$ the (rei-ht (or1ar&er is &/l$ 'e-otiate&. Do1e)er2 &eli)er$ %$ the !arrier i' a!!or&a'!e 1ith Part 8 +/rs/a't to its o1' %ill o( la&i'- &is!har-es the !arrierBs o%li-atio' to &eli)er. ;-908. Ri-hts A!7/ire& i' the A%se'!e o( =/e Ne-otiatio'4 E((e!t o( =i)ersio'4 Sto++a-e o( =eli)er$. (a) A tra's(eree o( a &o!/#e't o( title2 1hether 'e-otia%le or 'o''e-otia%le2 to 1hi!h the &o!/#e't has %ee' &eli)ere& %/t 'ot &/l$ 'e-otiate&2 a!7/ires the title a'& ri-hts that its tra's(eror ha& or ha& a!t/al a/thorit$ to !o')e$.

(%) I' the !ase o( a 'o''e-otia%le &o!/#e't o( title2 /'til %/t 'ot a(ter the %ailee re!ei)es 'oti!e o( the tra's(er2 the ri-hts o( the tra's(eree #a$ %e &e(eate&0 (1) %$ those !re&itors o( the tra's(eror that !o/l& treat the tra's(er as )oi& /'&er Se!tio' *-80* or *A-.0<4 (*) %$ a %/$er (ro# the tra's(eror i' or&i'ar$ !o/rse o( %/si'ess i( the %ailee has &eli)ere& the -oo&s to the %/$er or re!ei)e& 'oti(i!atio' o( the %/$erBs ri-hts4 (.) %$ a lessee (ro# the tra's(eror i' or&i'ar$ !o/rse o( %/si'ess i( the %ailee has &eli)ere& the -oo&s to the lessee or re!ei)e& 'oti(i!atio' o( the lesseeBs ri-hts4 or (8) as a-ai'st the %ailee2 %$ -oo& (aith &eali'-s o( the %ailee 1ith the tra's(eror. (!) A &i)ersio' or other !ha'-e o( shi++i'- i'str/!tio's %$ the !o'si-'or i' a 'o''e-otia%le %ill o( la&i'- 1hi!h !a/ses the %ailee 'ot to &eli)er the -oo&s to the !o'si-'ee &e(eats the !o'si-'eeBs title to the -oo&s i( the -oo&s ha)e %ee' &eli)ere& to a %/$er i' or&i'ar$ !o/rse o( %/si'ess or a lessee i' or&i'ar$ !o/rse o( %/si'ess a'& i' a'$ e)e't &e(eats the !o'si-'eeBs ri-hts a-ai'st the %ailee. (&) =eli)er$ o( the -oo&s +/rs/a't to a 'o''e-otia%le &o!/#e't o( title #a$ %e sto++e& %$ a seller /'&er Se!tio' *-;09 or a lessor /'&er Se!tio' *A-9*:2 s/%6e!t to the re7/ire#e'ts o( &/e 'oti(i!atio' i' those se!tio's. A %ailee ho'ori'- the sellerBs or lessorBs i'str/!tio's is e'title& to %e i'&e#'i(ie& %$ the seller or lessor a-ai'st a'$ res/lti'- loss or e,+e'se. ;-909. I'&orser Not a G/ara'tor (or Other Parties. The i'&orse#e't o( a ta'-i%le &o!/#e't o( title iss/e& %$ a %ailee &oes 'ot #a5e the i'&orser lia%le (or a'$ &e(a/lt %$ the %ailee or +re)io/s i'&orsers. ;-90:. =eli)er$ Citho/t I'&orse#e't0 Ri-ht to Co#+el I'&orse#e't. The tra's(eree o( a 'e-otia%le ta'-i%le &o!/#e't o( title has a s+e!i(i!all$ e'(or!ea%le ri-ht to ha)e its tra's(eror s/++l$ a'$ 'e!essar$ i'&orse#e't2 %/t the tra's(er %e!o#es a 'e-otiatio' o'l$ as o( the ti#e the i'&orse#e't is s/++lie&. ;-90;. Carra'ties o' Ne-otiatio' or Tra's(er o( =o!/#e't o( Title. I( a +erso' 'e-otiates or &eli)ers a &o!/#e't o( title (or )al/e2 other1ise tha' as a #ere i'ter#e&iar$ /'&er Se!tio' ;-90<2 /'less other1ise a-ree&2 the tra's(eror 1arra'ts to its i##e&iate +/r!haser o'l$ i' a&&itio' to a'$ 1arra't$ #a&e i' selli'- or leasi'- the -oo&s that0

(1) the &o!/#e't is -e'/i'e4 (*) the tra's(eror &oes 'ot ha)e 5'o1le&-e o( a'$ (a!t that 1o/l& i#+air the &o!/#e'tBs )ali&it$ or 1orth4 a'& (.) the 'e-otiatio' or &eli)er$ is ri-ht(/l a'& (/ll$ e((e!ti)e 1ith res+e!t to the title to the &o!/#e't a'& the -oo&s it re+rese'ts. ;-90<. Carra'ties o( Colle!ti'- @a'5 as to =o!/#e'ts o( Title. A !olle!ti'- %a'5 or other i'ter#e&iar$ 5'o1' to %e e'tr/ste& 1ith &o!/#e'ts o( title o' %ehal( o( a'other or 1ith !olle!tio' o( a &ra(t or other !lai# a-ai'st &eli)er$ o( &o!/#e'ts 1arra'ts %$ the &eli)er$ o( the &o!/#e'ts o'l$ its o1' -oo& (aith a'& a/thorit$ e)e' i( the !olle!ti'- %a'5 or other i'ter#e&iar$ has +/r!hase& or #a&e a&)a'!es a-ai'st the !lai# or &ra(t to %e !olle!te&. ;-90A. A&e7/ate Co#+lia'!e Cith Co##er!ial Co'tra!t. Chether a &o!/#e't o( title is a&e7/ate to (/l(ill the o%li-atio's o( a !o'tra!t (or sale2 a !o'tra!t (or lease2 or the !o'&itio's o( a letter o( !re&it is &eter#i'e& %$ Arti!le *2 *A2 or 9. PART :. CAREDOUSE RECEIPTS AN= @ILLS O> LA=ING0 EISCELLANEOUS PROVISIONS ;-:01. Lost2 Stole'2 or =estro$e& =o!/#e'ts o( Title. (a) I( a &o!/#e't o( title is lost2 stole'2 or &estro$e&2 a !o/rt #a$ or&er &eli)er$ o( the -oo&s or iss/a'!e o( a s/%stit/te &o!/#e't a'& the %ailee #a$ 1itho/t lia%ilit$ to a'$ +erso' !o#+l$ 1ith the or&er. I( the &o!/#e't 1as 'e-otia%le2 a !o/rt #a$ 'ot or&er &eli)er$ o( the -oo&s or iss/a'!e o( a s/%stit/te &o!/#e't 1itho/t the !lai#a'tBs +osti'- se!/rit$ /'less it (i'&s that a'$ +erso' that #a$ s/((er loss as a res/lt o( 'o's/rre'&er o( +ossessio' or !o'trol o( the &o!/#e't is a&e7/atel$ +rote!te& a-ai'st the loss. I( the &o!/#e't 1as 'o''e-otia%le2 the !o/rt #a$ re7/ire se!/rit$. The !o/rt #a$ also or&er +a$#e't o( the %aileeBs reaso'a%le !osts a'& attor'e$Bs (ees i' a'$ a!tio' /'&er this s/%se!tio'. (%) A %ailee that 1itho/t !o/rt or&er &eli)ers -oo&s to a +erso' !lai#i'- /'&er a #issi''e-otia%le &o!/#e't o( title is lia%le to a'$ +erso' i'6/re& there%$. I( the &eli)er$ is 'ot i' -oo& (aith2 the %ailee is lia%le (or !o')ersio'. =eli)er$ i' -oo& (aith is 'ot !o')ersio' i( the !lai#a't +osts se!/rit$ 1ith the %ailee i' a' a#o/'t at least &o/%le the )al/e o( the -oo&s at the ti#e o( +osti'- to i'&e#'i($ a'$ +erso' i'6/re& %$ the &eli)er$ 1hi!h (iles a 'oti!e o( !lai# 1ithi' o'e $ear a(ter the &eli)er$.

 ;-:0*. Atta!h#e't o( Goo&s Co)ere& %$ a Ne-otia%le =o!/#e't. U'less a &o!/#e't o( title 1as ori-i'all$ iss/e& /+o' &eli)er$ o( the -oo&s %$ a +erso' that &i& 'ot ha)e +o1er to &is+ose o( the#2 a lie' &oes 'ot atta!h %$ )irt/e o( a'$ 6/&i!ial +ro!ess to -oo&s i' the +ossessio' o( a %ailee (or 1hi!h a 'e-otia%le &o!/#e't o( title is o/tsta'&i'- /'less +ossessio' or !o'trol o( the &o!/#e't is (irst s/rre'&ere& to the %ailee or the &o!/#e'tBs 'e-otiatio' is e'6oi'e&. The %ailee #a$ 'ot %e !o#+elle& to &eli)er the -oo&s +/rs/a't to +ro!ess /'til +ossessio' or !o'trol o( the &o!/#e't is s/rre'&ere& to the %ailee or to the !o/rt. A +/r!haser o( the &o!/#e't (or )al/e 1itho/t 'oti!e o( the +ro!ess or i'6/'!tio' ta5es (ree o( the lie' i#+ose& %$ 6/&i!ial +ro!ess. ;-:0.. Co'(li!ti'- Clai#s4 I'ter+lea&er. I( #ore tha' o'e +erso' !lai#s title to or +ossessio' o( the -oo&s2 the %ailee is e,!/se& (ro# &eli)er$ /'til the %ailee has a reaso'a%le ti#e to as!ertai' the )ali&it$ o( the a&)erse !lai#s or to !o##e'!e a' a!tio' (or i'ter+lea&er. The %ailee #a$ assert a' i'ter+lea&er either i' &e(e'&i'- a' a!tio' (or 'o'&eli)er$ o( the -oo&s or %$ ori-i'al a!tio'. PART ;. EISCELLANEOUS PROVISIONS ;-;01. E((e!ti)e =ate. This A!t" ta5es e((e!t o' JJJJJJ2 *0JJJ. ;-;0*. Re+eals. E,isti'- Arti!le ;" a'& Se!tio' 10-108 o( the U'i(or# Co##er!ial Co&e" are re+eale&. ;-;0.. A++li!a%ilit$. This A!t" a++lies to a &o!/#e't o( title that is iss/e& or a %ail#e't that arises o' or a(ter the e((e!ti)e &ate o( this A!t". This A!t" &oes 'ot a++l$ to a &o!/#e't o( title that is iss/e& or a %ail#e't that arises %e(ore the e((e!ti)e &ate o( this A!t" e)e' i( the &o!/#e't o( title or %ail#e't 1o/l& %e s/%6e!t to this A!t" i( the &o!/#e't o( title ha& %ee' iss/e& or %ail#e't ha& arise' a(ter the e((e!ti)e &ate o( this A!t". This A!t" &oes 'ot a++l$ to a ri-ht o( a!tio' that has a!!r/e& %e(ore the e((e!ti)e &ate o( this A!t". ;-;08. Sa)i'-s Cla/se. A &o!/#e't o( title iss/e& or a %ail#e't that arises %e(ore the e((e!ti)e &ate o( this A!t" a'& the ri-hts2 o%li-atio's2 a'& i'terests (lo1i'- (ro# that &o!/#e't or %ail#e't are -o)er'e& %$ a'$ stat/te or other r/le a#e'&e& or re+eale& %$ this A!t" as i(

a#e'&#e't or re+eal ha& 'ot o!!/rre& a'& #a$ %e ter#i'ate&2 !o#+lete&2 !o's/##ate&2 or e'(or!e& /'&er that stat/te or other r/le. U.C.C. - ARTICLE < - INVESTEENT SECURITIES PART 1. SDORT TITLE AN= GENERAL EATTERS <-101. SDORT TITLE. This Arti!le #a$ %e !ite& as U'i(or# Co##er!ial Co&e--I')est#e't Se!/rities. <-10*. =E>INITIONS. (a) I' this Arti!le0 (1) ?A&)erse !lai#? #ea's a !lai# that a !lai#a't has a +ro+ert$ i'terest i' a (i'a'!ial asset a'& that it is a )iolatio' o( the ri-hts o( the !lai#a't (or a'other +erso' to hol&2 tra's(er2 or &eal 1ith the (i'a'!ial asset. (*) ?@earer (or#2? as a++lie& to a !erti(i!ate& se!/rit$2 #ea's a (or# i' 1hi!h the se!/rit$ is +a$a%le to the %earer o( the se!/rit$ !erti(i!ate a!!or&i'- to its ter#s %/t 'ot %$ reaso' o( a' i'&orse#e't. (.) ?@ro5er? #ea's a +erso' &e(i'e& as a %ro5er or &ealer /'&er the (e&eral se!/rities la1s2 %/t 1itho/t e,!l/&i'- a %a'5 a!ti'- i' that !a+a!it$. (8) ?Certi(i!ate& se!/rit$? #ea's a se!/rit$ that is re+rese'te& %$ a !erti(i!ate. (9) ?Cleari'- !or+oratio'? #ea's0 (i) a +erso' that is re-istere& as a ?!leari'- a-e'!$? /'&er the (e&eral se!/rities la1s4 (ii) a (e&eral reser)e %a'54 or (iii) a'$ other +erso' that +ro)i&es !leara'!e or settle#e't ser)i!es 1ith res+e!t to (i'a'!ial assets that 1o/l& re7/ire it to re-ister as a !leari'- a-e'!$ /'&er the (e&eral se!/rities la1s %/t (or a' e,!l/sio' or e,e#+tio' (ro# the re-istratio' re7/ire#e't2 i( its a!ti)ities as a !leari'- !or+oratio'2 i'!l/&i'- +ro#/l-atio' o( r/les2 are s/%6e!t to re-/latio' %$ a (e&eral or state -o)er'#e'tal a/thorit$. (:) ?Co##/'i!ate? #ea's to0 (i) se'& a si-'e& 1riti'-4 or

(ii) tra's#it i'(or#atio' %$ a'$ #e!ha'is# a-ree& /+o' %$ the +erso's tra's#itti'a'& re!ei)i'- the i'(or#atio'. (;) ?E'title#e't hol&er? #ea's a +erso' i&e'ti(ie& i' the re!or&s o( a se!/rities i'ter#e&iar$ as the +erso' ha)i'- a se!/rit$ e'title#e't a-ai'st the se!/rities i'ter#e&iar$. I( a +erso' a!7/ires a se!/rit$ e'title#e't %$ )irt/e o( Se!tio' <-901(%) (*) or (.)2 that +erso' is the e'title#e't hol&er. (<) ?E'title#e't or&er? #ea's a 'oti(i!atio' !o##/'i!ate& to a se!/rities i'ter#e&iar$ &ire!ti'- tra's(er or re&e#+tio' o( a (i'a'!ial asset to 1hi!h the e'title#e't hol&er has a se!/rit$ e'title#e't. (A) ?>i'a'!ial asset2? e,!e+t as other1ise +ro)i&e& i' Se!tio' <-10.2 #ea's0 (i) a se!/rit$4 (ii) a' o%li-atio' o( a +erso' or a share2 +arti!i+atio'2 or other i'terest i' a +erso' or i' +ro+ert$ or a' e'ter+rise o( a +erso'2 1hi!h is2 or is o( a t$+e2 &ealt i' or tra&e& o' (i'a'!ial #ar5ets2 or 1hi!h is re!o-'i3e& i' a'$ area i' 1hi!h it is iss/e& or &ealt i' as a #e&i/# (or i')est#e't4 or (iii) a'$ +ro+ert$ that is hel& %$ a se!/rities i'ter#e&iar$ (or a'other +erso' i' a se!/rities a!!o/'t i( the se!/rities i'ter#e&iar$ has e,+ressl$ a-ree& 1ith the other +erso' that the +ro+ert$ is to %e treate& as a (i'a'!ial asset /'&er this Arti!le. As !o'te,t re7/ires2 the ter# #ea's either the i'terest itsel( or the #ea's %$ 1hi!h a +erso'Bs !lai# to it is e)i&e'!e&2 i'!l/&i'- a !erti(i!ate& or /'!erti(i!ate& se!/rit$2 a se!/rit$ !erti(i!ate2 or a se!/rit$ e'title#e't. (10) reser)e&"

(11) ?I'&orse#e't? #ea's a si-'at/re that alo'e or a!!o#+a'ie& %$ other 1or&s is #a&e o' a se!/rit$ !erti(i!ate i' re-istere& (or# or o' a se+arate &o!/#e't (or the +/r+ose o( assi-'i'-2 tra's(erri'-2 or re&ee#i'- the se!/rit$ or -ra'ti'- a +o1er to assi-'2 tra's(er2 or re&ee# it. (1*) ?I'str/!tio'? #ea's a 'oti(i!atio' !o##/'i!ate& to the iss/er o( a' /'!erti(i!ate& se!/rit$ 1hi!h &ire!ts that the tra's(er o( the se!/rit$ %e re-istere& or that the se!/rit$ %e re&ee#e&. (1.) ?Re-istere& (or#2? as a++lie& to a !erti(i!ate& se!/rit$2 #ea's a (or# i' 1hi!h0 (i) the se!/rit$ !erti(i!ate s+e!i(ies a +erso' e'title& to the se!/rit$4 a'&

(ii) a tra's(er o( the se!/rit$ #a$ %e re-istere& /+o' %oo5s #ai'tai'e& (or that +/r+ose %$ or o' %ehal( o( the iss/er2 or the se!/rit$ !erti(i!ate so states. (18) ?Se!/rities i'ter#e&iar$? #ea's0 (i) a !leari'- !or+oratio'4 or (ii) a +erso'2 i'!l/&i'- a %a'5 or %ro5er2 that i' the or&i'ar$ !o/rse o( its %/si'ess #ai'tai's se!/rities a!!o/'ts (or others a'& is a!ti'- i' that !a+a!it$. (19) ?Se!/rit$2? e,!e+t as other1ise +ro)i&e& i' Se!tio' <-10.2 #ea's a' o%li-atio' o( a' iss/er or a share2 +arti!i+atio'2 or other i'terest i' a' iss/er or i' +ro+ert$ or a' e'ter+rise o( a' iss/er0 (i) 1hi!h is re+rese'te& %$ a se!/rit$ !erti(i!ate i' %earer or re-istere& (or#2 or the tra's(er o( 1hi!h #a$ %e re-istere& /+o' %oo5s #ai'tai'e& (or that +/r+ose %$ or o' %ehal( o( the iss/er4 (ii) 1hi!h is o'e o( a !lass or series or %$ its ter#s is &i)isi%le i'to a !lass or series o( shares2 +arti!i+atio's2 i'terests2 or o%li-atio's4 a'& (iii) 1hi!h0 (A) is2 or is o( a t$+e2 &ealt i' or tra&e& o' se!/rities e,!ha'-es or se!/rities #ar5ets4 or (@) is a #e&i/# (or i')est#e't a'& %$ its ter#s e,+ressl$ +ro)i&es that it is a se!/rit$ -o)er'e& %$ this Arti!le. (1:) ?Se!/rit$ !erti(i!ate? #ea's a !erti(i!ate re+rese'ti'- a se!/rit$. (1;) ?Se!/rit$ e'title#e't? #ea's the ri-hts a'& +ro+ert$ i'terest o( a' e'title#e't hol&er 1ith res+e!t to a (i'a'!ial asset s+e!i(ie& i' Part 9. (1<) ?U'!erti(i!ate& se!/rit$? #ea's a se!/rit$ that is 'ot re+rese'te& %$ a !erti(i!ate. (%) Other &e(i'itio's a++l$i'- to this Arti!le a'& the se!tio's i' 1hi!h the$ a++ear are0 A++ro+riate +erso' Co'trol =eli)er$ Se!tio' <-10;

Se!tio' <-10: Se!tio' <-.01

I')est#e't !o#+a'$ se!/rit$ Iss/er O)eriss/e Se!tio' <-*01 Se!tio' <-*10

Se!tio' <-10.

Prote!te& +/r!haser Se!/rities a!!o/'t

Se!tio' <-.0. Se!tio' <-901

(!) I' a&&itio'2 Arti!le 1 !o'tai's -e'eral &e(i'itio's a'& +ri'!i+les o( !o'str/!tio' a'& i'ter+retatio' a++li!a%le thro/-ho/t this Arti!le. (&) The !hara!teri3atio' o( a +erso'2 %/si'ess2 or tra'sa!tio' (or +/r+oses o( this Arti!le &oes 'ot &eter#i'e the !hara!teri3atio' o( the +erso'2 %/si'ess2 or tra'sa!tio' (or +/r+oses o( a'$ other la12 re-/latio'2 or r/le. <-10.. RULES >OR =ETEREINING CDETDER CERTAIN O@LIGATIONS AN= INTERESTS ARE SECURITIES OR >INANCIAL ASSETS. (a) A share or si#ilar e7/it$ i'terest iss/e& %$ a !or+oratio'2 %/si'ess tr/st2 6oi't sto!5 !o#+a'$2 or si#ilar e'tit$ is a se!/rit$. (%) A' ?i')est#e't !o#+a'$ se!/rit$? is a se!/rit$. ?I')est#e't !o#+a'$ se!/rit$? #ea's a share or si#ilar e7/it$ i'terest iss/e& %$ a' e'tit$ that is re-istere& as a' i')est#e't !o#+a'$ /'&er the (e&eral i')est#e't !o#+a'$ la1s2 a' i'terest i' a /'it i')est#e't tr/st that is so re-istere&2 or a (a!e-a#o/'t !erti(i!ate iss/e& %$ a (a!ea#o/'t !erti(i!ate !o#+a'$ that is so re-istere&. I')est#e't !o#+a'$ se!/rit$ &oes 'ot i'!l/&e a' i's/ra'!e +oli!$ or e'&o1#e't +oli!$ or a''/it$ !o'tra!t iss/e& %$ a' i's/ra'!e !o#+a'$. (!) A' i'terest i' a +art'ershi+ or li#ite& lia%ilit$ !o#+a'$ is 'ot a se!/rit$ /'less it is &ealt i' or tra&e& o' se!/rities e,!ha'-es or i' se!/rities #ar5ets2 its ter#s e,+ressl$ +ro)i&e that it is a se!/rit$ -o)er'e& %$ this Arti!le2 or it is a' i')est#e't !o#+a'$ se!/rit$. Do1e)er2 a' i'terest i' a +art'ershi+ or li#ite& lia%ilit$ !o#+a'$ is a (i'a'!ial asset i( it is hel& i' a se!/rities a!!o/'t. (&) A 1riti'- that is a se!/rit$ !erti(i!ate is -o)er'e& %$ this Arti!le a'& 'ot %$ Arti!le .2 e)e' tho/-h it also #eets the re7/ire#e'ts o( that Arti!le. Do1e)er2 a 'e-otia%le i'str/#e't -o)er'e& %$ Arti!le . is a (i'a'!ial asset i( it is hel& i' a se!/rities a!!o/'t. (e) A' o+tio' or si#ilar o%li-atio' iss/e& %$ a !leari'- !or+oratio' to its +arti!i+a'ts is 'ot a se!/rit$2 %/t is a (i'a'!ial asset.

(() A !o##o&it$ !o'tra!t2 as &e(i'e& i' Se!tio' A-10*(a)(19)2 is 'ot a se!/rit$ or a (i'a'!ial asset. (-) A &o!/#e't o( title is 'ot a (i'a'!ial asset /'less Se!tio' <-10*(a)(A)(iii) a++lies. <-108. ACKUISITION O> SECURITG OR >INANCIAL ASSET OR INTEREST TDEREIN. (a) A +erso' a!7/ires a se!/rit$ or a' i'terest therei'2 /'&er this Arti!le2 i(0 (1) the +erso' is a +/r!haser to 1ho# a se!/rit$ is &eli)ere& +/rs/a't to Se!tio' <-.014 or (*) the +erso' a!7/ires a se!/rit$ e'title#e't to the se!/rit$ +/rs/a't to Se!tio' <-901. (%) A +erso' a!7/ires a (i'a'!ial asset2 other tha' a se!/rit$2 or a' i'terest therei'2 /'&er this Arti!le2 i( the +erso' a!7/ires a se!/rit$ e'title#e't to the (i'a'!ial asset. (!) A +erso' 1ho a!7/ires a se!/rit$ e'title#e't to a se!/rit$ or other (i'a'!ial asset has the ri-hts s+e!i(ie& i' Part 92 %/t is a +/r!haser o( a'$ se!/rit$2 se!/rit$ e'title#e't2 or other (i'a'!ial asset hel& %$ the se!/rities i'ter#e&iar$ o'l$ to the e,te't +ro)i&e& i' Se!tio' <-90.. (&) U'less the !o'te,t sho1s that a &i((ere't #ea'i'- is i'te'&e&2 a +erso' 1ho is re7/ire& %$ other la12 re-/latio'2 r/le2 or a-ree#e't to tra's(er2 &eli)er2 +rese't2 s/rre'&er2 e,!ha'-e2 or other1ise +/t i' the +ossessio' o( a'other +erso' a se!/rit$ or (i'a'!ial asset satis(ies that re7/ire#e't %$ !a/si'- the other +erso' to a!7/ire a' i'terest i' the se!/rit$ or (i'a'!ial asset +/rs/a't to s/%se!tio' (a) or (%). <-109. NOTICE O> A=VERSE CLAIE. (a) A +erso' has 'oti!e o( a' a&)erse !lai# i(0 (1) the +erso' 5'o1s o( the a&)erse !lai#4 (*) the +erso' is a1are o( (a!ts s/((i!ie't to i'&i!ate that there is a si-'i(i!a't +ro%a%ilit$ that the a&)erse !lai# e,ists a'& &eli%eratel$ a)oi&s i'(or#atio' that 1o/l& esta%lish the e,iste'!e o( the a&)erse !lai#4 or (.) the +erso' has a &/t$2 i#+ose& %$ stat/te or re-/latio'2 to i')esti-ate 1hether a' a&)erse !lai# e,ists2 a'& the i')esti-atio' so re7/ire& 1o/l& esta%lish the e,iste'!e o( the a&)erse !lai#. (%) Da)i'- 5'o1le&-e that a (i'a'!ial asset or i'terest therei' is or has %ee' tra's(erre& %$ a re+rese'tati)e i#+oses 'o &/t$ o( i'7/ir$ i'to the ri-ht(/l'ess o( a

tra'sa!tio' a'& is 'ot 'oti!e o( a' a&)erse !lai#. Do1e)er2 a +erso' 1ho 5'o1s that a re+rese'tati)e has tra's(erre& a (i'a'!ial asset or i'terest therei' i' a tra'sa!tio' that is2 or 1hose +ro!ee&s are %ei'- /se&2 (or the i'&i)i&/al %e'e(it o( the re+rese'tati)e or other1ise i' %rea!h o( &/t$ has 'oti!e o( a' a&)erse !lai#. (!) A' a!t or e)e't that !reates a ri-ht to i##e&iate +er(or#a'!e o( the +ri'!i+al o%li-atio' re+rese'te& %$ a se!/rit$ !erti(i!ate or sets a &ate o' or a(ter 1hi!h the !erti(i!ate is to %e +rese'te& or s/rre'&ere& (or re&e#+tio' or e,!ha'-e &oes 'ot itsel( !o'stit/te 'oti!e o( a' a&)erse !lai# e,!e+t i' the !ase o( a tra's(er #ore tha'0 (1) o'e $ear a(ter a &ate set (or +rese't#e't or s/rre'&er (or re&e#+tio' or e,!ha'-e4 or (*) si, #o'ths a(ter a &ate set (or +a$#e't o( #o'e$ a-ai'st +rese'tatio' or s/rre'&er o( the !erti(i!ate2 i( #o'e$ 1as a)aila%le (or +a$#e't o' that &ate. (&) A +/r!haser o( a !erti(i!ate& se!/rit$ has 'oti!e o( a' a&)erse !lai# i( the se!/rit$ !erti(i!ate0 (1) 1hether i' %earer or re-istere& (or#2 has %ee' i'&orse& ?(or !olle!tio'? or ?(or s/rre'&er? or (or so#e other +/r+ose 'ot i')ol)i'- tra's(er4 or (*) is i' %earer (or# a'& has o' it a' /'a#%i-/o/s state#e't that it is the +ro+ert$ o( a +erso' other tha' the tra's(eror2 %/t the #ere 1riti'- o( a 'a#e o' the !erti(i!ate is 'ot s/!h a state#e't. (e) >ili'- o( a (i'a'!i'- state#e't /'&er Arti!le A is 'ot 'oti!e o( a' a&)erse !lai# to a (i'a'!ial asset. <-10:. CONTROL. (a) A +/r!haser has ?!o'trol? o( a !erti(i!ate& se!/rit$ i' %earer (or# i( the !erti(i!ate& se!/rit$ is &eli)ere& to the +/r!haser. (%) A +/r!haser has ?!o'trol? o( a !erti(i!ate& se!/rit$ i' re-istere& (or# i( the !erti(i!ate& se!/rit$ is &eli)ere& to the +/r!haser2 a'&0 (1) the !erti(i!ate is i'&orse& to the +/r!haser or i' %la'5 %$ a' e((e!ti)e i'&orse#e't4 or (*) the !erti(i!ate is re-istere& i' the 'a#e o( the +/r!haser2 /+o' ori-i'al iss/e or re-istratio' o( tra's(er %$ the iss/er. (!) A +/r!haser has ?!o'trol? o( a' /'!erti(i!ate& se!/rit$ i(0

(1) the /'!erti(i!ate& se!/rit$ is &eli)ere& to the +/r!haser4 or (*) the iss/er has a-ree& that it 1ill !o#+l$ 1ith i'str/!tio's ori-i'ate& %$ the +/r!haser 1itho/t (/rther !o'se't %$ the re-istere& o1'er. (&) A +/r!haser has ?!o'trol? o( a se!/rit$ e'title#e't i(0 (1) the +/r!haser %e!o#es the e'title#e't hol&er4 or (*) the se!/rities i'ter#e&iar$ has a-ree& that it 1ill !o#+l$ 1ith e'title#e't or&ers ori-i'ate& %$ the +/r!haser 1itho/t (/rther !o'se't %$ the e'title#e't hol&er2 or (.) a'other +erso' has !o'trol o( the se!/rit$ e'title#e't o' %ehal( o( the +/r!haser or2 ha)i'- +re)io/sl$ a!7/ire& !o'trol o( the se!/rit$ e'title#e't2 a!5'o1le&-es that it has !o'trol o' %ehal( o( the +/r!haser. (e) I( a' i'terest i' a se!/rit$ e'title#e't is -ra'te& %$ the e'title#e't hol&er to the e'title#e't hol&erBs o1' se!/rities i'ter#e&iar$2 the se!/rities i'ter#e&iar$ has !o'trol. (() A +/r!haser 1ho has satis(ie& the re7/ire#e'ts o( s/%se!tio' (!) or (&) has !o'trol e)e' i( the re-istere& o1'er i' the !ase o( s/%se!tio' (!) or the e'title#e't hol&er i' the !ase o( s/%se!tio' (&) retai's the ri-ht to #a5e s/%stit/tio's (or the /'!erti(i!ate& se!/rit$ or se!/rit$ e'title#e't2 to ori-i'ate i'str/!tio's or e'title#e't or&ers to the iss/er or se!/rities i'ter#e&iar$2 or other1ise to &eal 1ith the /'!erti(i!ate& se!/rit$ or se!/rit$ e'title#e't. (-) A' iss/er or a se!/rities i'ter#e&iar$ #a$ 'ot e'ter i'to a' a-ree#e't o( the 5i'& &es!ri%e& i' s/%se!tio' (!)(*) or (&)(*) 1itho/t the !o'se't o( the re-istere& o1'er or e'title#e't hol&er2 %/t a' iss/er or a se!/rities i'ter#e&iar$ is 'ot re7/ire& to e'ter i'to s/!h a' a-ree#e't e)e' tho/-h the re-istere& o1'er or e'title#e't hol&er so &ire!ts. A' iss/er or se!/rities i'ter#e&iar$ that has e'tere& i'to s/!h a' a-ree#e't is 'ot re7/ire& to !o'(ir# the e,iste'!e o( the a-ree#e't to a'other +art$ /'less re7/este& to &o so %$ the re-istere& o1'er or e'title#e't hol&er. <-10;. CDETDER IN=ORSEEENT2 INSTRUCTION2 OR ENTITLEEENT OR=ER IS E>>ECTIVE. (a) ?A++ro+riate +erso'? #ea's0 (1) 1ith res+e!t to a' i'&orse#e't2 the +erso' s+e!i(ie& %$ a se!/rit$ !erti(i!ate or %$ a' e((e!ti)e s+e!ial i'&orse#e't to %e e'title& to the se!/rit$4 (*) 1ith res+e!t to a' i'str/!tio'2 the re-istere& o1'er o( a' /'!erti(i!ate& se!/rit$4

(.) 1ith res+e!t to a' e'title#e't or&er2 the e'title#e't hol&er4 (8) i( the +erso' &esi-'ate& i' +ara-ra+h (1)2 (*)2 or (.) is &e!ease&2 the &esi-'ate& +erso'Bs s/!!essor ta5i'- /'&er other la1 or the &esi-'ate& +erso'Bs +erso'al re+rese'tati)e a!ti'- (or the estate o( the &e!e&e't4 or (9) i( the +erso' &esi-'ate& i' +ara-ra+h (1)2 (*)2 or (.) la!5s !a+a!it$2 the &esi-'ate& +erso'Bs -/ar&ia'2 !o'ser)ator2 or other si#ilar re+rese'tati)e 1ho has +o1er /'&er other la1 to tra's(er the se!/rit$ or (i'a'!ial asset. (%) A' i'&orse#e't2 i'str/!tio'2 or e'title#e't or&er is e((e!ti)e i(0 (1) it is #a&e %$ the a++ro+riate +erso'4 (*) it is #a&e %$ a +erso' 1ho has +o1er /'&er the la1 o( a-e'!$ to tra's(er the se!/rit$ or (i'a'!ial asset o' %ehal( o( the a++ro+riate +erso'2 i'!l/&i'-2 i' the !ase o( a' i'str/!tio' or e'title#e't or&er2 a +erso' 1ho has !o'trol /'&er Se!tio' <-10:(!)(*) or (&)(*)4 or (.) the a++ro+riate +erso' has rati(ie& it or is other1ise +re!l/&e& (ro# asserti'- its i'e((e!ti)e'ess. (!) A' i'&orse#e't2 i'str/!tio'2 or e'title#e't or&er #a&e %$ a re+rese'tati)e is e((e!ti)e e)e' i(0 (1) the re+rese'tati)e has (aile& to !o#+l$ 1ith a !o'trolli'- i'str/#e't or 1ith the la1 o( the State ha)i'- 6/ris&i!tio' o( the re+rese'tati)e relatio'shi+2 i'!l/&i'- a'$ la1 re7/iri'- the re+rese'tati)e to o%tai' !o/rt a++ro)al o( the tra'sa!tio'4 or (*) the re+rese'tati)eBs a!tio' i' #a5i'- the i'&orse#e't2 i'str/!tio'2 or e'title#e't or&er or /si'- the +ro!ee&s o( the tra'sa!tio' is other1ise a %rea!h o( &/t$. (&) I( a se!/rit$ is re-istere& i' the 'a#e o( or s+e!iall$ i'&orse& to a +erso' &es!ri%e& as a re+rese'tati)e2 or i( a se!/rities a!!o/'t is #ai'tai'e& i' the 'a#e o( a +erso' &es!ri%e& as a re+rese'tati)e2 a' i'&orse#e't2 i'str/!tio'2 or e'title#e't or&er #a&e %$ the +erso' is e((e!ti)e e)e' tho/-h the +erso' is 'o lo'-er ser)i'- i' the &es!ri%e& !a+a!it$. (e) E((e!ti)e'ess o( a' i'&orse#e't2 i'str/!tio'2 or e'title#e't or&er is &eter#i'e& as o( the &ate the i'&orse#e't2 i'str/!tio'2 or e'title#e't or&er is #a&e2 a'& a' i'&orse#e't2 i'str/!tio'2 or e'title#e't or&er &oes 'ot %e!o#e i'e((e!ti)e %$ reaso' o( a'$ later !ha'-e o( !ir!/#sta'!es.

 <-10<. CARRANTIES IN =IRECT DOL=ING. (a) A +erso' 1ho tra's(ers a !erti(i!ate& se!/rit$ to a +/r!haser (or )al/e 1arra'ts to the +/r!haser2 a'& a' i'&orser2 i( the tra's(er is %$ i'&orse#e't2 1arra'ts to a'$ s/%se7/e't +/r!haser2 that0 (1) the !erti(i!ate is -e'/i'e a'& has 'ot %ee' #ateriall$ altere&4 (*) the tra's(eror or i'&orser &oes 'ot 5'o1 o( a'$ (a!t that #i-ht i#+air the )ali&it$ o( the se!/rit$4 (.) there is 'o a&)erse !lai# to the se!/rit$4 (8) the tra's(er &oes 'ot )iolate a'$ restri!tio' o' tra's(er4 (9) i( the tra's(er is %$ i'&orse#e't2 the i'&orse#e't is #a&e %$ a' a++ro+riate +erso'2 or i( the i'&orse#e't is %$ a' a-e't2 the a-e't has a!t/al a/thorit$ to a!t o' %ehal( o( the a++ro+riate +erso'4 a'& (:) the tra's(er is other1ise e((e!ti)e a'& ri-ht(/l. (%) A +erso' 1ho ori-i'ates a' i'str/!tio' (or re-istratio' o( tra's(er o( a' /'!erti(i!ate& se!/rit$ to a +/r!haser (or )al/e 1arra'ts to the +/r!haser that0 (1) the i'str/!tio' is #a&e %$ a' a++ro+riate +erso'2 or i( the i'str/!tio' is %$ a' a-e't2 the a-e't has a!t/al a/thorit$ to a!t o' %ehal( o( the a++ro+riate +erso'4 (*) the se!/rit$ is )ali&4 (.) there is 'o a&)erse !lai# to the se!/rit$4 a'& (8) at the ti#e the i'str/!tio' is +rese'te& to the iss/er0 (i) the +/r!haser 1ill %e e'title& to the re-istratio' o( tra's(er4 (ii) the tra's(er 1ill %e re-istere& %$ the iss/er (ree (ro# all lie's2 se!/rit$ i'terests2 restri!tio's2 a'& !lai#s other tha' those s+e!i(ie& i' the i'str/!tio'4 (iii) the tra's(er 1ill 'ot )iolate a'$ restri!tio' o' tra's(er4 a'& (i)) the re7/este& tra's(er 1ill other1ise %e e((e!ti)e a'& ri-ht(/l. (!) A +erso' 1ho tra's(ers a' /'!erti(i!ate& se!/rit$ to a +/r!haser (or )al/e a'& &oes 'ot ori-i'ate a' i'str/!tio' i' !o''e!tio' 1ith the tra's(er 1arra'ts that0

(1) the /'!erti(i!ate& se!/rit$ is )ali&4 (*) there is 'o a&)erse !lai# to the se!/rit$4 (.) the tra's(er &oes 'ot )iolate a'$ restri!tio' o' tra's(er4 a'& (8) the tra's(er is other1ise e((e!ti)e a'& ri-ht(/l. (&) A +erso' 1ho i'&orses a se!/rit$ !erti(i!ate 1arra'ts to the iss/er that0 (1) there is 'o a&)erse !lai# to the se!/rit$4 a'& (*) the i'&orse#e't is e((e!ti)e. (e) A +erso' 1ho ori-i'ates a' i'str/!tio' (or re-istratio' o( tra's(er o( a' /'!erti(i!ate& se!/rit$ 1arra'ts to the iss/er that0 (1) the i'str/!tio' is e((e!ti)e4 a'& (*) at the ti#e the i'str/!tio' is +rese'te& to the iss/er the +/r!haser 1ill %e e'title& to the re-istratio' o( tra's(er. (() A +erso' 1ho +rese'ts a !erti(i!ate& se!/rit$ (or re-istratio' o( tra's(er or (or +a$#e't or e,!ha'-e 1arra'ts to the iss/er that the +erso' is e'title& to the re-istratio'2 +a$#e't2 or e,!ha'-e2 %/t a +/r!haser (or )al/e a'& 1itho/t 'oti!e o( a&)erse !lai#s to 1ho# tra's(er is re-istere& 1arra'ts o'l$ that the +erso' has 'o 5'o1le&-e o( a'$ /'a/thori3e& si-'at/re i' a 'e!essar$ i'&orse#e't. (-) I( a +erso' a!ts as a-e't o( a'other i' &eli)eri'- a !erti(i!ate& se!/rit$ to a +/r!haser2 the i&e'tit$ o( the +ri'!i+al 1as 5'o1' to the +erso' to 1ho# the !erti(i!ate 1as &eli)ere&2 a'& the !erti(i!ate &eli)ere& %$ the a-e't 1as re!ei)e& %$ the a-e't (ro# the +ri'!i+al or re!ei)e& %$ the a-e't (ro# a'other +erso' at the &ire!tio' o( the +ri'!i+al2 the +erso' &eli)eri'- the se!/rit$ !erti(i!ate 1arra'ts o'l$ that the &eli)eri'+erso' has a/thorit$ to a!t (or the +ri'!i+al a'& &oes 'ot 5'o1 o( a'$ a&)erse !lai# to the !erti(i!ate& se!/rit$. (h) A se!/re& +art$ 1ho re&eli)ers a se!/rit$ !erti(i!ate re!ei)e&2 or a(ter +a$#e't a'& o' or&er o( the &e%tor &eli)ers the se!/rit$ !erti(i!ate to a'other +erso'2 #a5es o'l$ the 1arra'ties o( a' a-e't /'&er s/%se!tio' (-). (i) E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (-)2 a %ro5er a!ti'- (or a !/sto#er #a5es to the iss/er a'& a +/r!haser the 1arra'ties +ro)i&e& i' s/%se!tio's (a) thro/-h ((). A %ro5er that &eli)ers a se!/rit$ !erti(i!ate to its !/sto#er2 or !a/ses its !/sto#er

to %e re-istere& as the o1'er o( a' /'!erti(i!ate& se!/rit$2 #a5es to the !/sto#er the 1arra'ties +ro)i&e& i' s/%se!tio' (a) or (%)2 a'& has the ri-hts a'& +ri)ile-es o( a +/r!haser /'&er this se!tio'. The 1arra'ties o( a'& i' (a)or o( the %ro5er a!ti'- as a' a-e't are i' a&&itio' to a++li!a%le 1arra'ties -i)e' %$ a'& i' (a)or o( the !/sto#er. <-10A. CARRANTIES IN IN=IRECT DOL=ING. (a) A +erso' 1ho ori-i'ates a' e'title#e't or&er to a se!/rities i'ter#e&iar$ 1arra'ts to the se!/rities i'ter#e&iar$ that0 (1) the e'title#e't or&er is #a&e %$ a' a++ro+riate +erso'2 or i( the e'title#e't or&er is %$ a' a-e't2 the a-e't has a!t/al a/thorit$ to a!t o' %ehal( o( the a++ro+riate +erso'4 a'& (*) there is 'o a&)erse !lai# to the se!/rit$ e'title#e't. (%) A +erso' 1ho &eli)ers a se!/rit$ !erti(i!ate to a se!/rities i'ter#e&iar$ (or !re&it to a se!/rities a!!o/'t or ori-i'ates a' i'str/!tio' 1ith res+e!t to a' /'!erti(i!ate& se!/rit$ &ire!ti'- that the /'!erti(i!ate& se!/rit$ %e !re&ite& to a se!/rities a!!o/'t #a5es to the se!/rities i'ter#e&iar$ the 1arra'ties s+e!i(ie& i' Se!tio' <-10<(a) or (%). (!) I( a se!/rities i'ter#e&iar$ &eli)ers a se!/rit$ !erti(i!ate to its e'title#e't hol&er or !a/ses its e'title#e't hol&er to %e re-istere& as the o1'er o( a' /'!erti(i!ate& se!/rit$2 the se!/rities i'ter#e&iar$ #a5es to the e'title#e't hol&er the 1arra'ties s+e!i(ie& i' Se!tio' <-10<(a) or (%). <-110. APPLICA@ILITG4 CDOICE O> LAC. (a) The lo!al la1 o( the iss/erBs 6/ris&i!tio'2 as s+e!i(ie& i' s/%se!tio' (&)2 -o)er's0 (1) the )ali&it$ o( a se!/rit$4 (*) the ri-hts a'& &/ties o( the iss/er 1ith res+e!t to re-istratio' o( tra's(er4 (.) the e((e!ti)e'ess o( re-istratio' o( tra's(er %$ the iss/er4 (8) 1hether the iss/er o1es a'$ &/ties to a' a&)erse !lai#a't to a se!/rit$4 a'& (9) 1hether a' a&)erse !lai# !a' %e asserte& a-ai'st a +erso' to 1ho# tra's(er o( a !erti(i!ate& or /'!erti(i!ate& se!/rit$ is re-istere& or a +erso' 1ho o%tai's !o'trol o( a' /'!erti(i!ate& se!/rit$. (%) The lo!al la1 o( the se!/rities i'ter#e&iar$Bs 6/ris&i!tio'2 as s+e!i(ie& i' s/%se!tio' (e)2 -o)er's0

(1) a!7/isitio' o( a se!/rit$ e'title#e't (ro# the se!/rities i'ter#e&iar$4 (*) the ri-hts a'& &/ties o( the se!/rities i'ter#e&iar$ a'& e'title#e't hol&er arisi'o/t o( a se!/rit$ e'title#e't4 (.) 1hether the se!/rities i'ter#e&iar$ o1es a'$ &/ties to a' a&)erse !lai#a't to a se!/rit$ e'title#e't4 a'& (8) 1hether a' a&)erse !lai# !a' %e asserte& a-ai'st a +erso' 1ho a!7/ires a se!/rit$ e'title#e't (ro# the se!/rities i'ter#e&iar$ or a +erso' 1ho +/r!hases a se!/rit$ e'title#e't or i'terest therei' (ro# a' e'title#e't hol&er. (!) The lo!al la1 o( the 6/ris&i!tio' i' 1hi!h a se!/rit$ !erti(i!ate is lo!ate& at the ti#e o( &eli)er$ -o)er's 1hether a' a&)erse !lai# !a' %e asserte& a-ai'st a +erso' to 1ho# the se!/rit$ !erti(i!ate is &eli)ere&. (&) ?Iss/erBs 6/ris&i!tio'? #ea's the 6/ris&i!tio' /'&er 1hi!h the iss/er o( the se!/rit$ is or-a'i3e& or2 i( +er#itte& %$ the la1 o( that 6/ris&i!tio'2 the la1 o( a'other 6/ris&i!tio' s+e!i(ie& %$ the iss/er. A' iss/er or-a'i3e& /'&er the la1 o( this State #a$ s+e!i($ the la1 o( a'other 6/ris&i!tio' as the la1 -o)er'i'- the #atters s+e!i(ie& i' s/%se!tio' (a) (*) thro/-h (9). (e) The (ollo1i'- r/les &eter#i'e a ?se!/rities i'ter#e&iar$Bs 6/ris&i!tio'? (or +/r+oses o( this se!tio'0 (1) I( a' a-ree#e't %et1ee' the se!/rities i'ter#e&iar$ a'& its e'title#e't hol&er -o)er'i'- the se!/rities a!!o/'t e,+ressl$ +ro)i&es that a +arti!/lar 6/ris&i!tio' is the se!/rities i'ter#e&iar$Bs 6/ris&i!tio' (or +/r+oses o( this +art2 this arti!le2 or this a!t2 that 6/ris&i!tio' is the se!/rities i'ter#e&iar$Bs 6/ris&i!tio'. (*) I( +ara-ra+h (1) &oes 'ot a++l$ a'& a' a-ree#e't %et1ee' the se!/rities i'ter#e&iar$ a'& its e'title#e't hol&er e,+ressl$ +ro)i&es that the a-ree#e't is -o)er'e& %$ the la1 o( a +arti!/lar 6/ris&i!tio'2 that 6/ris&i!tio' is the se!/rities i'ter#e&iar$Bs 6/ris&i!tio'. (.) I( 'either +ara-ra+h (i) 'or +ara-ra+h (ii) a++lies a'& a' a-ree#e't %et1ee' the se!/rities i'ter#e&iar$ a'& its e'title#e't hol&er -o)er'i'- the se!/rities a!!o/'t e,+ressl$ +ro)i&es that the se!/rities a!!o/'t is #ai'tai'e& at a' o((i!e i' a +arti!/lar 6/ris&i!tio'2 that 6/ris&i!tio' is the se!/rities i'ter#e&iar$Bs 6/ris&i!tio'. (8) I( 'o'e o( the +re!e&i'- +ara-ra+hs a++lies2 the se!/rities i'ter#e&iar$Bs 6/ris&i!tio' is the 6/ris&i!tio' i' 1hi!h the o((i!e i&e'ti(ie& i' a' a!!o/'t state#e't as the o((i!e ser)i'- the e'title#e't hol&erBs a!!o/'t is lo!ate&.

(9) I( 'o'e o( the +re!e&i'- +ara-ra+hs a++lies2 the se!/rities i'ter#e&iar$Bs 6/ris&i!tio' is the 6/ris&i!tio' i' 1hi!h the !hie( e,e!/ti)e o((i!e o( the se!/rities i'ter#e&iar$ is lo!ate&. (() A se!/rities i'ter#e&iar$Bs 6/ris&i!tio' is 'ot &eter#i'e& %$ the +h$si!al lo!atio' o( !erti(i!ates re+rese'ti'- (i'a'!ial assets2 or %$ the 6/ris&i!tio' i' 1hi!h is or-a'i3e& the iss/er o( the (i'a'!ial asset 1ith res+e!t to 1hi!h a' e'title#e't hol&er has a se!/rit$ e'title#e't2 or %$ the lo!atio' o( (a!ilities (or &ata +ro!essi'- or other re!or& 5ee+i'!o'!er'i'- the a!!o/'t. <-111. CLEARING CORPORATION RULES. A r/le a&o+te& %$ a !leari'- !or+oratio' -o)er'i'- ri-hts a'& o%li-atio's a#o'- the !leari'- !or+oratio' a'& its +arti!i+a'ts i' the !leari'- !or+oratio' is e((e!ti)e e)e' i( the r/le !o'(li!ts 1ith this A!t" a'& a((e!ts a'other +art$ 1ho &oes 'ot !o'se't to the r/le. <-11*. CRE=ITORBS LEGAL PROCESS. (a) The i'terest o( a &e%tor i' a !erti(i!ate& se!/rit$ #a$ %e rea!he& %$ a !re&itor o'l$ %$ a!t/al sei3/re o( the se!/rit$ !erti(i!ate %$ the o((i!er #a5i'- the atta!h#e't or le)$2 e,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&). Do1e)er2 a !erti(i!ate& se!/rit$ (or 1hi!h the !erti(i!ate has %ee' s/rre'&ere& to the iss/er #a$ %e rea!he& %$ a !re&itor %$ le-al +ro!ess /+o' the iss/er. (%) The i'terest o( a &e%tor i' a' /'!erti(i!ate& se!/rit$ #a$ %e rea!he& %$ a !re&itor o'l$ %$ le-al +ro!ess /+o' the iss/er at its !hie( e,e!/ti)e o((i!e i' the U'ite& States2 e,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&). (!) The i'terest o( a &e%tor i' a se!/rit$ e'title#e't #a$ %e rea!he& %$ a !re&itor o'l$ %$ le-al +ro!ess /+o' the se!/rities i'ter#e&iar$ 1ith 1ho# the &e%torBs se!/rities a!!o/'t is #ai'tai'e&2 e,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&). (&) The i'terest o( a &e%tor i' a !erti(i!ate& se!/rit$ (or 1hi!h the !erti(i!ate is i' the +ossessio' o( a se!/re& +art$2 or i' a' /'!erti(i!ate& se!/rit$ re-istere& i' the 'a#e o( a se!/re& +art$2 or a se!/rit$ e'title#e't #ai'tai'e& i' the 'a#e o( a se!/re& +art$2 #a$ %e rea!he& %$ a !re&itor %$ le-al +ro!ess /+o' the se!/re& +art$. (e) A !re&itor 1hose &e%tor is the o1'er o( a !erti(i!ate& se!/rit$2 /'!erti(i!ate& se!/rit$2 or se!/rit$ e'title#e't is e'title& to ai& (ro# a !o/rt o( !o#+ete't 6/ris&i!tio'2 %$ i'6/'!tio' or other1ise2 i' rea!hi'- the !erti(i!ate& se!/rit$2 /'!erti(i!ate& se!/rit$2 or se!/rit$ e'title#e't or i' satis($i'- the !lai# %$ #ea's allo1e& at la1 or i' e7/it$ i' re-ar& to +ro+ert$ that !a''ot rea&il$ %e rea!he& %$ other le-al +ro!ess.

 <-11.. STATUTE O> >RAU=S INAPPLICA@LE. A !o'tra!t or #o&i(i!atio' o( a !o'tra!t (or the sale or +/r!hase o( a se!/rit$ is e'(or!ea%le 1hether or 'ot there is a 1riti'- si-'e& or re!or& a/the'ti!ate& %$ a +art$ a-ai'st 1ho# e'(or!e#e't is so/-ht2 e)e' i( the !o'tra!t or #o&i(i!atio' is 'ot !a+a%le o( +er(or#a'!e 1ithi' o'e $ear o( its #a5i'-. <-118. EVI=ENTIARG RULES CONCERNING CERTI>ICATE= SECURITIES. The (ollo1i'- r/les a++l$ i' a' a!tio' o' a !erti(i!ate& se!/rit$ a-ai'st the iss/er0 (1) U'less s+e!i(i!all$ &e'ie& i' the +lea&i'-s2 ea!h si-'at/re o' a se!/rit$ !erti(i!ate or i' a 'e!essar$ i'&orse#e't is a&#itte&. (*) I( the e((e!ti)e'ess o( a si-'at/re is +/t i' iss/e2 the %/r&e' o( esta%lishi'e((e!ti)e'ess is o' the +art$ !lai#i'- /'&er the si-'at/re2 %/t the si-'at/re is +res/#e& to %e -e'/i'e or a/thori3e&. (.) I( si-'at/res o' a se!/rit$ !erti(i!ate are a&#itte& or esta%lishe&2 +ro&/!tio' o( the !erti(i!ate e'titles a hol&er to re!o)er o' it /'less the &e(e'&a't esta%lishes a &e(e'se or a &e(e!t -oi'- to the )ali&it$ o( the se!/rit$. (8) I( it is sho1' that a &e(e'se or &e(e!t e,ists2 the +lai'ti(( has the %/r&e' o( esta%lishi'- that the +lai'ti(( or so#e +erso' /'&er 1ho# the +lai'ti(( !lai#s is a +erso' a-ai'st 1ho# the &e(e'se or &e(e!t !a''ot %e asserte&. <-119. SECURITIES INTEREE=IARG AN= OTDERS NOT LIA@LE TO A=VERSE CLAIEANT. A se!/rities i'ter#e&iar$ that has tra's(erre& a (i'a'!ial asset +/rs/a't to a' e((e!ti)e e'title#e't or&er2 or a %ro5er or other a-e't or %ailee that has &ealt 1ith a (i'a'!ial asset at the &ire!tio' o( its !/sto#er or +ri'!i+al2 is 'ot lia%le to a +erso' ha)i'- a' a&)erse !lai# to the (i'a'!ial asset2 /'less the se!/rities i'ter#e&iar$2 or %ro5er or other a-e't or %ailee0 (1) too5 the a!tio' a(ter it ha& %ee' ser)e& 1ith a' i'6/'!tio'2 restrai'i'- or&er2 or other le-al +ro!ess e'6oi'i'- it (ro# &oi'- so2 iss/e& %$ a !o/rt o( !o#+ete't 6/ris&i!tio'2 a'& ha& a reaso'a%le o++ort/'it$ to a!t o' the i'6/'!tio'2 restrai'i'- or&er2 or other le-al +ro!ess4 or (*) a!te& i' !oll/sio' 1ith the 1ro'-&oer i' )iolati'- the ri-hts o( the a&)erse !lai#a't4 or

(.) i' the !ase o( a se!/rit$ !erti(i!ate that has %ee' stole'2 a!te& 1ith 'oti!e o( the a&)erse !lai#. <-11:. SECURITIES INTEREE=IARG AS PURCDASER >OR VALUE. A se!/rities i'ter#e&iar$ that re!ei)es a (i'a'!ial asset a'& esta%lishes a se!/rit$ e'title#e't to the (i'a'!ial asset i' (a)or o( a' e'title#e't hol&er is a +/r!haser (or )al/e o( the (i'a'!ial asset. A se!/rities i'ter#e&iar$ that a!7/ires a se!/rit$ e'title#e't to a (i'a'!ial asset (ro# a'other se!/rities i'ter#e&iar$ a!7/ires the se!/rit$ e'title#e't (or )al/e i( the se!/rities i'ter#e&iar$ a!7/iri'- the se!/rit$ e'title#e't esta%lishes a se!/rit$ e'title#e't to the (i'a'!ial asset i' (a)or o( a' e'title#e't hol&er. PART *. ISSUE AN= ISSUER <-*01. ISSUER. (a) Cith res+e!t to a' o%li-atio' o' or a &e(e'se to a se!/rit$2 a' ?iss/er? i'!l/&es a +erso' that0 (1) +la!es or a/thori3es the +la!i'- o( its 'a#e o' a se!/rit$ !erti(i!ate2 other tha' as a/the'ti!ati'- tr/stee2 re-istrar2 tra's(er a-e't2 or the li5e2 to e)i&e'!e a share2 +arti!i+atio'2 or other i'terest i' its +ro+ert$ or i' a' e'ter+rise2 or to e)i&e'!e its &/t$ to +er(or# a' o%li-atio' re+rese'te& %$ the !erti(i!ate4 (*) !reates a share2 +arti!i+atio'2 or other i'terest i' its +ro+ert$ or i' a' e'ter+rise2 or /'&erta5es a' o%li-atio'2 that is a' /'!erti(i!ate& se!/rit$4 (.) &ire!tl$ or i'&ire!tl$ !reates a (ra!tio'al i'terest i' its ri-hts or +ro+ert$2 i( the (ra!tio'al i'terest is re+rese'te& %$ a se!/rit$ !erti(i!ate4 or (8) %e!o#es res+o'si%le (or2 or i' +la!e o(2 a'other +erso' &es!ri%e& as a' iss/er i' this se!tio'. (%) Cith res+e!t to a' o%li-atio' o' or &e(e'se to a se!/rit$2 a -/ara'tor is a' iss/er to the e,te't o( its -/ara't$2 1hether or 'ot its o%li-atio' is 'ote& o' a se!/rit$ !erti(i!ate. (!) Cith res+e!t to a re-istratio' o( a tra's(er2 iss/er #ea's a +erso' o' 1hose %ehal( tra's(er %oo5s are #ai'tai'e&. <-*0*. ISSUERBS RESPONSI@ILITG AN= =E>ENSES4 NOTICE O> =E>ECT OR =E>ENSE. (a) E)e' a-ai'st a +/r!haser (or )al/e a'& 1itho/t 'oti!e2 the ter#s o( a !erti(i!ate& se!/rit$ i'!l/&e ter#s state& o' the !erti(i!ate a'& ter#s #a&e +art o( the se!/rit$ %$

re(ere'!e o' the !erti(i!ate to a'other i'str/#e't2 i'&e't/re2 or &o!/#e't or to a !o'stit/tio'2 stat/te2 or&i'a'!e2 r/le2 re-/latio'2 or&er2 or the li5e2 to the e,te't the ter#s re(erre& to &o 'ot !o'(li!t 1ith ter#s state& o' the !erti(i!ate. A re(ere'!e /'&er this s/%se!tio' &oes 'ot o( itsel( !har-e a +/r!haser (or )al/e 1ith 'oti!e o( a &e(e!t -oi'- to the )ali&it$ o( the se!/rit$2 e)e' i( the !erti(i!ate e,+ressl$ states that a +erso' a!!e+ti'- it a&#its 'oti!e. The ter#s o( a' /'!erti(i!ate& se!/rit$ i'!l/&e those state& i' a'$ i'str/#e't2 i'&e't/re2 or &o!/#e't or i' a !o'stit/tio'2 stat/te2 or&i'a'!e2 r/le2 re-/latio'2 or&er2 or the li5e2 +/rs/a't to 1hi!h the se!/rit$ is iss/e&. (%) The (ollo1i'- r/les a++l$ i( a' iss/er asserts that a se!/rit$ is 'ot )ali&0 (1) A se!/rit$ other tha' o'e iss/e& %$ a -o)er'#e't or -o)er'#e'tal s/%&i)isio'2 a-e'!$2 or i'str/#e'talit$2 e)e' tho/-h iss/e& 1ith a &e(e!t -oi'- to its )ali&it$2 is )ali& i' the ha'&s o( a +/r!haser (or )al/e a'& 1itho/t 'oti!e o( the +arti!/lar &e(e!t /'less the &e(e!t i')ol)es a )iolatio' o( a !o'stit/tio'al +ro)isio'. I' that !ase2 the se!/rit$ is )ali& i' the ha'&s o( a +/r!haser (or )al/e a'& 1itho/t 'oti!e o( the &e(e!t2 other tha' o'e 1ho ta5es %$ ori-i'al iss/e. (*) Para-ra+h (1) a++lies to a' iss/er that is a -o)er'#e't or -o)er'#e'tal s/%&i)isio'2 a-e'!$2 or i'str/#e'talit$ o'l$ i( there has %ee' s/%sta'tial !o#+lia'!e 1ith the le-al re7/ire#e'ts -o)er'i'- the iss/e or the iss/er has re!ei)e& a s/%sta'tial !o'si&eratio' (or the iss/e as a 1hole or (or the +arti!/lar se!/rit$ a'& a state& +/r+ose o( the iss/e is o'e (or 1hi!h the iss/er has +o1er to %orro1 #o'e$ or iss/e the se!/rit$. (!) E,!e+t as other1ise +ro)i&e& i' Se!tio' <-*092 la!5 o( -e'/i'e'ess o( a !erti(i!ate& se!/rit$ is a !o#+lete &e(e'se2 e)e' a-ai'st a +/r!haser (or )al/e a'& 1itho/t 'oti!e. (&) All other &e(e'ses o( the iss/er o( a se!/rit$2 i'!l/&i'- 'o'&eli)er$ a'& !o'&itio'al &eli)er$ o( a !erti(i!ate& se!/rit$2 are i'e((e!ti)e a-ai'st a +/r!haser (or )al/e 1ho has ta5e' the !erti(i!ate& se!/rit$ 1itho/t 'oti!e o( the +arti!/lar &e(e'se.

(e) This se!tio' &oes 'ot a((e!t the ri-ht o( a +art$ to !a'!el a !o'tra!t (or a se!/rit$ ?1he'2 as a'& i( iss/e&? or ?1he' &istri%/te&? i' the e)e't o( a #aterial !ha'-e i' the !hara!ter o( the se!/rit$ that is the s/%6e!t o( the !o'tra!t or i' the +la' or arra'-e#e't +/rs/a't to 1hi!h the se!/rit$ is to %e iss/e& or &istri%/te&. (() I( a se!/rit$ is hel& %$ a se!/rities i'ter#e&iar$ a-ai'st 1ho# a' e'title#e't hol&er has a se!/rit$ e'title#e't 1ith res+e!t to the se!/rit$2 the iss/er #a$ 'ot assert a'$ &e(e'se that the iss/er !o/l& 'ot assert i( the e'title#e't hol&er hel& the se!/rit$ &ire!tl$. <-*0.. STALENESS AS NOTICE O> =E>ECT OR =E>ENSE.

A(ter a' a!t or e)e't2 other tha' a !all that has %ee' re)o5e&2 !reati'- a ri-ht to i##e&iate +er(or#a'!e o( the +ri'!i+al o%li-atio' re+rese'te& %$ a !erti(i!ate& se!/rit$ or setti'- a &ate o' or a(ter 1hi!h the se!/rit$ is to %e +rese'te& or s/rre'&ere& (or re&e#+tio' or e,!ha'-e2 a +/r!haser is !har-e& 1ith 'oti!e o( a'$ &e(e!t i' its iss/e or &e(e'se o( the iss/er2 i( the a!t or e)e't0 (1) re7/ires the +a$#e't o( #o'e$2 the &eli)er$ o( a !erti(i!ate& se!/rit$2 the re-istratio' o( tra's(er o( a' /'!erti(i!ate& se!/rit$2 or a'$ o( the# o' +rese'tatio' or s/rre'&er o( the se!/rit$ !erti(i!ate2 the #o'e$ or se!/rit$ is a)aila%le o' the &ate set (or +a$#e't or e,!ha'-e2 a'& the +/r!haser ta5es the se!/rit$ #ore tha' o'e $ear a(ter that &ate4 or (*) is 'ot !o)ere& %$ +ara-ra+h (1) a'& the +/r!haser ta5es the se!/rit$ #ore tha' t1o $ears a(ter the &ate set (or s/rre'&er or +rese'tatio' or the &ate o' 1hi!h +er(or#a'!e %e!a#e &/e. <-*08. E>>ECT O> ISSUERBS RESTRICTION ON TRANS>ER. A restri!tio' o' tra's(er o( a se!/rit$ i#+ose& %$ the iss/er2 e)e' i( other1ise la1(/l2 is i'e((e!ti)e a-ai'st a +erso' 1itho/t 5'o1le&-e o( the restri!tio' /'less0 (1) the se!/rit$ is !erti(i!ate& a'& the restri!tio' is 'ote& !o's+i!/o/sl$ o' the se!/rit$ !erti(i!ate4 or (*) the se!/rit$ is /'!erti(i!ate& a'& the re-istere& o1'er has %ee' 'oti(ie& o( the restri!tio'. <-*09. E>>ECT O> UNAUTDORILE= SIGNATURE ON SECURITG CERTI>ICATE. A' /'a/thori3e& si-'at/re +la!e& o' a se!/rit$ !erti(i!ate %e(ore or i' the !o/rse o( iss/e is i'e((e!ti)e2 %/t the si-'at/re is e((e!ti)e i' (a)or o( a +/r!haser (or )al/e o( the !erti(i!ate& se!/rit$ i( the +/r!haser is 1itho/t 'oti!e o( the la!5 o( a/thorit$ a'& the si-'i'- has %ee' &o'e %$0 (1) a' a/the'ti!ati'- tr/stee2 re-istrar2 tra's(er a-e't2 or other +erso' e'tr/ste& %$ the iss/er 1ith the si-'i'- o( the se!/rit$ !erti(i!ate or o( si#ilar se!/rit$ !erti(i!ates2 or the i##e&iate +re+aratio' (or si-'i'- o( a'$ o( the#4 or (*) a' e#+lo$ee o( the iss/er2 or o( a'$ o( the +erso's liste& i' +ara-ra+h (1)2 e'tr/ste& 1ith res+o'si%le ha'&li'- o( the se!/rit$ !erti(i!ate. <-*0:. COEPLETION OR ALTERATION O> SECURITG CERTI>ICATE.

(a) I( a se!/rit$ !erti(i!ate !o'tai's the si-'at/res 'e!essar$ to its iss/e or tra's(er %/t is i'!o#+lete i' a'$ other res+e!t0 (1) a'$ +erso' #a$ !o#+lete it %$ (illi'- i' the %la'5s as a/thori3e&4 a'& (*) e)e' i( the %la'5s are i'!orre!tl$ (ille& i'2 the se!/rit$ !erti(i!ate as !o#+lete& is e'(or!ea%le %$ a +/r!haser 1ho too5 it (or )al/e a'& 1itho/t 'oti!e o( the i'!orre!t'ess. (%) A !o#+lete se!/rit$ !erti(i!ate that has %ee' i#+ro+erl$ altere&2 e)e' i( (ra/&/le'tl$2 re#ai's e'(or!ea%le2 %/t o'l$ a!!or&i'- to its ori-i'al ter#s. <-*0;. RIGDTS AN= =UTIES O> ISSUER CITD RESPECT TO REGISTERE= OCNERS. (a) @e(ore &/e +rese't#e't (or re-istratio' o( tra's(er o( a !erti(i!ate& se!/rit$ i' re-istere& (or# or o( a' i'str/!tio' re7/esti'- re-istratio' o( tra's(er o( a' /'!erti(i!ate& se!/rit$2 the iss/er or i'&e't/re tr/stee #a$ treat the re-istere& o1'er as the +erso' e,!l/si)el$ e'title& to )ote2 re!ei)e 'oti(i!atio's2 a'& other1ise e,er!ise all the ri-hts a'& +o1ers o( a' o1'er. (%) This Arti!le &oes 'ot a((e!t the lia%ilit$ o( the re-istere& o1'er o( a se!/rit$ (or a !all2 assess#e't2 or the li5e. <-*0<. E>>ECT O> SIGNATURE O> AUTDENTICATING TRUSTEE2 REGISTRAR2 OR TRANS>ER AGENT. (a) A +erso' si-'i'- a se!/rit$ !erti(i!ate as a/the'ti!ati'- tr/stee2 re-istrar2 tra's(er a-e't2 or the li5e2 1arra'ts to a +/r!haser (or )al/e o( the !erti(i!ate& se!/rit$2 i( the +/r!haser is 1itho/t 'oti!e o( a +arti!/lar &e(e!t2 that0 (1) the !erti(i!ate is -e'/i'e4 (*) the +erso'Bs o1' +arti!i+atio' i' the iss/e o( the se!/rit$ is 1ithi' the +erso'Bs !a+a!it$ a'& 1ithi' the s!o+e o( the a/thorit$ re!ei)e& %$ the +erso' (ro# the iss/er4 a'& (.) the +erso' has reaso'a%le -ro/'&s to %elie)e that the !erti(i!ate& se!/rit$ is i' the (or# a'& 1ithi' the a#o/'t the iss/er is a/thori3e& to iss/e. (%) U'less other1ise a-ree&2 a +erso' si-'i'- /'&er s/%se!tio' (a) &oes 'ot ass/#e res+o'si%ilit$ (or the )ali&it$ o( the se!/rit$ i' other res+e!ts. <-*0A. ISSUERBS LIEN.

A lie' i' (a)or o( a' iss/er /+o' a !erti(i!ate& se!/rit$ is )ali& a-ai'st a +/r!haser o'l$ i( the ri-ht o( the iss/er to the lie' is 'ote& !o's+i!/o/sl$ o' the se!/rit$ !erti(i!ate. <-*10. OVERISSUE. (a) I' this se!tio'2 ?o)eriss/e? #ea's the iss/e o( se!/rities i' e,!ess o( the a#o/'t the iss/er has !or+orate +o1er to iss/e2 %/t a' o)eriss/e &oes 'ot o!!/r i( a++ro+riate a!tio' has !/re& the o)eriss/e. (%) E,!e+t as other1ise +ro)i&e& i' s/%se!tio's (!) a'& (&)2 the +ro)isio's o( this Arti!le 1hi!h )ali&ate a se!/rit$ or !o#+el its iss/e or reiss/e &o 'ot a++l$ to the e,te't that )ali&atio'2 iss/e2 or reiss/e 1o/l& res/lt i' o)eriss/e. (!) I( a' i&e'ti!al se!/rit$ 'ot !o'stit/ti'- a' o)eriss/e is reaso'a%l$ a)aila%le (or +/r!hase2 a +erso' e'title& to iss/e or )ali&atio' #a$ !o#+el the iss/er to +/r!hase the se!/rit$ a'& &eli)er it i( !erti(i!ate& or re-ister its tra's(er i( /'!erti(i!ate&2 a-ai'st s/rre'&er o( a'$ se!/rit$ !erti(i!ate the +erso' hol&s. (&) I( a se!/rit$ is 'ot reaso'a%l$ a)aila%le (or +/r!hase2 a +erso' e'title& to iss/e or )ali&atio' #a$ re!o)er (ro# the iss/er the +ri!e the +erso' or the last +/r!haser (or )al/e +ai& (or it 1ith i'terest (ro# the &ate o( the +erso'Bs &e#a'&. PART .. TRANS>ER O> CERTI>ICATE= AN= UNCERTI>ICATE= SECURITIES <-.01. =ELIVERG. (a) =eli)er$ o( a !erti(i!ate& se!/rit$ to a +/r!haser o!!/rs 1he'0 (1) the +/r!haser a!7/ires +ossessio' o( the se!/rit$ !erti(i!ate4 (*) a'other +erso'2 other tha' a se!/rities i'ter#e&iar$2 either a!7/ires +ossessio' o( the se!/rit$ !erti(i!ate o' %ehal( o( the +/r!haser or2 ha)i'- +re)io/sl$ a!7/ire& +ossessio' o( the !erti(i!ate2 a!5'o1le&-es that it hol&s (or the +/r!haser4 or (.) a se!/rities i'ter#e&iar$ a!ti'- o' %ehal( o( the +/r!haser a!7/ires +ossessio' o( the se!/rit$ !erti(i!ate2 o'l$ i( the !erti(i!ate is i' re-istere& (or# a'& is (i) re-istere& i' the 'a#e o( the +/r!haser2 (ii) +a$a%le to the or&er o( the +/r!haser2 or (iii) s+e!iall$ i'&orse& to the +/r!haser %$ a' e((e!ti)e i'&orse#e't a'& has 'ot %ee' i'&orse& to the se!/rities i'ter#e&iar$ or i' %la'5. (%) =eli)er$ o( a' /'!erti(i!ate& se!/rit$ to a +/r!haser o!!/rs 1he'0 (1) the iss/er re-isters the +/r!haser as the re-istere& o1'er2 /+o' ori-i'al iss/e or re-istratio' o( tra's(er4 or

(*) a'other +erso'2 other tha' a se!/rities i'ter#e&iar$2 either %e!o#es the re-istere& o1'er o( the /'!erti(i!ate& se!/rit$ o' %ehal( o( the +/r!haser or2 ha)i'- +re)io/sl$ %e!o#e the re-istere& o1'er2 a!5'o1le&-es that it hol&s (or the +/r!haser. <-.0*. RIGDTS O> PURCDASER. (a) E,!e+t as other1ise +ro)i&e& i' s/%se!tio's (%) a'& (!)2 a +/r!haser o( a !erti(i!ate& or /'!erti(i!ate& se!/rit$ a!7/ires all ri-hts i' the se!/rit$ that the tra's(eror ha& or ha& +o1er to tra's(er. (%) A +/r!haser o( a li#ite& i'terest a!7/ires ri-hts o'l$ to the e,te't o( the i'terest +/r!hase&. (!) A +/r!haser o( a !erti(i!ate& se!/rit$ 1ho as a +re)io/s hol&er ha& 'oti!e o( a' a&)erse !lai# &oes 'ot i#+ro)e its +ositio' %$ ta5i'- (ro# a +rote!te& +/r!haser. <-.0.. PROTECTE= PURCDASER. (a) ?Prote!te& +/r!haser? #ea's a +/r!haser o( a !erti(i!ate& or /'!erti(i!ate& se!/rit$2 or o( a' i'terest therei'2 1ho0 (1) -i)es )al/e4 (*) &oes 'ot ha)e 'oti!e o( a'$ a&)erse !lai# to the se!/rit$4 a'& (.) o%tai's !o'trol o( the !erti(i!ate& or /'!erti(i!ate& se!/rit$. (%) I' a&&itio' to a!7/iri'- the ri-hts o( a +/r!haser2 a +rote!te& +/r!haser also a!7/ires its i'terest i' the se!/rit$ (ree o( a'$ a&)erse !lai#. <-.08. IN=ORSEEENT. (a) A' i'&orse#e't #a$ %e i' %la'5 or s+e!ial. A' i'&orse#e't i' %la'5 i'!l/&es a' i'&orse#e't to %earer. A s+e!ial i'&orse#e't s+e!i(ies to 1ho# a se!/rit$ is to %e tra's(erre& or 1ho has +o1er to tra's(er it. A hol&er #a$ !o')ert a %la'5 i'&orse#e't to a s+e!ial i'&orse#e't. (%) A' i'&orse#e't +/r+orti'- to %e o'l$ o( +art o( a se!/rit$ !erti(i!ate re+rese'ti'/'its i'te'&e& %$ the iss/er to %e se+aratel$ tra's(era%le is e((e!ti)e to the e,te't o( the i'&orse#e't.

(!) A' i'&orse#e't2 1hether s+e!ial or i' %la'52 &oes 'ot !o'stit/te a tra's(er /'til &eli)er$ o( the !erti(i!ate o' 1hi!h it a++ears or2 i( the i'&orse#e't is o' a se+arate &o!/#e't2 /'til &eli)er$ o( %oth the &o!/#e't a'& the !erti(i!ate. (&) I( a se!/rit$ !erti(i!ate i' re-istere& (or# has %ee' &eli)ere& to a +/r!haser 1itho/t a 'e!essar$ i'&orse#e't2 the +/r!haser #a$ %e!o#e a +rote!te& +/r!haser o'l$ 1he' the i'&orse#e't is s/++lie&. Do1e)er2 a-ai'st a tra's(eror2 a tra's(er is !o#+lete /+o' &eli)er$ a'& the +/r!haser has a s+e!i(i!all$ e'(or!ea%le ri-ht to ha)e a'$ 'e!essar$ i'&orse#e't s/++lie&. (e) A' i'&orse#e't o( a se!/rit$ !erti(i!ate i' %earer (or# #a$ -i)e 'oti!e o( a' a&)erse !lai# to the !erti(i!ate2 %/t it &oes 'ot other1ise a((e!t a ri-ht to re-istratio' that the hol&er +ossesses. (() U'less other1ise a-ree&2 a +erso' #a5i'- a' i'&orse#e't ass/#es o'l$ the o%li-atio's +ro)i&e& i' Se!tio' <-10< a'& 'ot a' o%li-atio' that the se!/rit$ 1ill %e ho'ore& %$ the iss/er. <-.09. INSTRUCTION. (a) I( a' i'str/!tio' has %ee' ori-i'ate& %$ a' a++ro+riate +erso' %/t is i'!o#+lete i' a'$ other res+e!t2 a'$ +erso' #a$ !o#+lete it as a/thori3e& a'& the iss/er #a$ rel$ o' it as !o#+lete&2 e)e' tho/-h it has %ee' !o#+lete& i'!orre!tl$. (%) U'less other1ise a-ree&2 a +erso' i'itiati'- a' i'str/!tio' ass/#es o'l$ the o%li-atio's i#+ose& %$ Se!tio' <-10< a'& 'ot a' o%li-atio' that the se!/rit$ 1ill %e ho'ore& %$ the iss/er. <-.0:. E>>ECT O> GUARANTEEING SIGNATURE2 IN=ORSEEENT2 OR INSTRUCTION. (a) A +erso' 1ho -/ara'tees a si-'at/re o( a' i'&orser o( a se!/rit$ !erti(i!ate 1arra'ts that at the ti#e o( si-'i'-0 (1) the si-'at/re 1as -e'/i'e4 (*) the si-'er 1as a' a++ro+riate +erso' to i'&orse2 or i( the si-'at/re is %$ a' a-e't2 the a-e't ha& a!t/al a/thorit$ to a!t o' %ehal( o( the a++ro+riate +erso'4 a'& (.) the si-'er ha& le-al !a+a!it$ to si-'. (%) A +erso' 1ho -/ara'tees a si-'at/re o( the ori-i'ator o( a' i'str/!tio' 1arra'ts that at the ti#e o( si-'i'-0 (1) the si-'at/re 1as -e'/i'e4

(*) the si-'er 1as a' a++ro+riate +erso' to ori-i'ate the i'str/!tio'2 or i( the si-'at/re is %$ a' a-e't2 the a-e't ha& a!t/al a/thorit$ to a!t o' %ehal( o( the a++ro+riate +erso'2 i( the +erso' s+e!i(ie& i' the i'str/!tio' as the re-istere& o1'er 1as2 i' (a!t2 the re-istere& o1'er2 as to 1hi!h (a!t the si-'at/re -/ara'tor &oes 'ot #a5e a 1arra't$4 a'& (.) the si-'er ha& le-al !a+a!it$ to si-'. (!) A +erso' 1ho s+e!iall$ -/ara'tees the si-'at/re o( a' ori-i'ator o( a' i'str/!tio' #a5es the 1arra'ties o( a si-'at/re -/ara'tor /'&er s/%se!tio' (%) a'& also 1arra'ts that at the ti#e the i'str/!tio' is +rese'te& to the iss/er0 (1) the +erso' s+e!i(ie& i' the i'str/!tio' as the re-istere& o1'er o( the /'!erti(i!ate& se!/rit$ 1ill %e the re-istere& o1'er4 a'& (*) the tra's(er o( the /'!erti(i!ate& se!/rit$ re7/este& i' the i'str/!tio' 1ill %e re-istere& %$ the iss/er (ree (ro# all lie's2 se!/rit$ i'terests2 restri!tio's2 a'& !lai#s other tha' those s+e!i(ie& i' the i'str/!tio'. (&) A -/ara'tor /'&er s/%se!tio's (a) a'& (%) or a s+e!ial -/ara'tor /'&er s/%se!tio' (!) &oes 'ot other1ise 1arra't the ri-ht(/l'ess o( the tra's(er. (e) A +erso' 1ho -/ara'tees a' i'&orse#e't o( a se!/rit$ !erti(i!ate #a5es the 1arra'ties o( a si-'at/re -/ara'tor /'&er s/%se!tio' (a) a'& also 1arra'ts the ri-ht(/l'ess o( the tra's(er i' all res+e!ts. (() A +erso' 1ho -/ara'tees a' i'str/!tio' re7/esti'- the tra's(er o( a' /'!erti(i!ate& se!/rit$ #a5es the 1arra'ties o( a s+e!ial si-'at/re -/ara'tor /'&er s/%se!tio' (!) a'& also 1arra'ts the ri-ht(/l'ess o( the tra's(er i' all res+e!ts. (-) A' iss/er #a$ 'ot re7/ire a s+e!ial -/ara't$ o( si-'at/re2 a -/ara't$ o( i'&orse#e't2 or a -/ara't$ o( i'str/!tio' as a !o'&itio' to re-istratio' o( tra's(er. (h) The 1arra'ties /'&er this se!tio' are #a&e to a +erso' ta5i'- or &eali'- 1ith the se!/rit$ i' relia'!e o' the -/ara't$2 a'& the -/ara'tor is lia%le to the +erso' (or loss res/lti'- (ro# their %rea!h. A' i'&orser or ori-i'ator o( a' i'str/!tio' 1hose si-'at/re2 i'&orse#e't2 or i'str/!tio' has %ee' -/ara'tee& is lia%le to a -/ara'tor (or a'$ loss s/((ere& %$ the -/ara'tor as a res/lt o( %rea!h o( the 1arra'ties o( the -/ara'tor. <-.0;. PURCDASERBS RIGDT TO REKUISITES >OR REGISTRATION O> TRANS>ER. U'less other1ise a-ree&2 the tra's(eror o( a se!/rit$ o' &/e &e#a'& shall s/++l$ the +/r!haser 1ith +roo( o( a/thorit$ to tra's(er or 1ith a'$ other re7/isite 'e!essar$ to

o%tai' re-istratio' o( the tra's(er o( the se!/rit$2 %/t i( the tra's(er is 'ot (or )al/e2 a tra's(eror 'ee& 'ot !o#+l$ /'less the +/r!haser +a$s the 'e!essar$ e,+e'ses. I( the tra's(eror (ails 1ithi' a reaso'a%le ti#e to !o#+l$ 1ith the &e#a'&2 the +/r!haser #a$ re6e!t or res!i'& the tra's(er. PART 8. REGISTRATION <-801. =UTG O> ISSUER TO REGISTER TRANS>ER. (a) I( a !erti(i!ate& se!/rit$ i' re-istere& (or# is +rese'te& to a' iss/er 1ith a re7/est to re-ister tra's(er or a' i'str/!tio' is +rese'te& to a' iss/er 1ith a re7/est to re-ister tra's(er o( a' /'!erti(i!ate& se!/rit$2 the iss/er shall re-ister the tra's(er as re7/este& i(0 (1) /'&er the ter#s o( the se!/rit$ the +erso' see5i'- re-istratio' o( tra's(er is eli-i%le to ha)e the se!/rit$ re-istere& i' its 'a#e4 (*) the i'&orse#e't or i'str/!tio' is #a&e %$ the a++ro+riate +erso' or %$ a' a-e't 1ho has a!t/al a/thorit$ to a!t o' %ehal( o( the a++ro+riate +erso'4 (.) reaso'a%le ass/ra'!e is -i)e' that the i'&orse#e't or i'str/!tio' is -e'/i'e a'& a/thori3e& (Se!tio' <-80*)4 (8) a'$ a++li!a%le la1 relati'- to the !olle!tio' o( ta,es has %ee' !o#+lie& 1ith4 (9) the tra's(er &oes 'ot )iolate a'$ restri!tio' o' tra's(er i#+ose& %$ the iss/er i' a!!or&a'!e 1ith Se!tio' <-*084 (:) a &e#a'& that the iss/er 'ot re-ister tra's(er has 'ot %e!o#e e((e!ti)e /'&er Se!tio' <-80.2 or the iss/er has !o#+lie& 1ith Se!tio' <-80.(%) %/t 'o le-al +ro!ess or i'&e#'it$ %o'& is o%tai'e& as +ro)i&e& i' Se!tio' <-80.(&)4 a'& (;) the tra's(er is i' (a!t ri-ht(/l or is to a +rote!te& +/r!haser. (%) I( a' iss/er is /'&er a &/t$ to re-ister a tra's(er o( a se!/rit$2 the iss/er is lia%le to a +erso' +rese'ti'- a !erti(i!ate& se!/rit$ or a' i'str/!tio' (or re-istratio' or to the +erso'Bs +ri'!i+al (or loss res/lti'- (ro# /'reaso'a%le &ela$ i' re-istratio' or (ail/re or re(/sal to re-ister the tra's(er. <-80*. ASSURANCE TDAT IN=ORSEEENT OR INSTRUCTION IS E>>ECTIVE. (a) A' iss/er #a$ re7/ire the (ollo1i'- ass/ra'!e that ea!h 'e!essar$ i'&orse#e't or ea!h i'str/!tio' is -e'/i'e a'& a/thori3e&0

(1) i' all !ases2 a -/ara't$ o( the si-'at/re o( the +erso' #a5i'- a' i'&orse#e't or ori-i'ati'- a' i'str/!tio' i'!l/&i'-2 i' the !ase o( a' i'str/!tio'2 reaso'a%le ass/ra'!e o( i&e'tit$4 (*) i( the i'&orse#e't is #a&e or the i'str/!tio' is ori-i'ate& %$ a' a-e't2 a++ro+riate ass/ra'!e o( a!t/al a/thorit$ to si-'4 (.) i( the i'&orse#e't is #a&e or the i'str/!tio' is ori-i'ate& %$ a (i&/!iar$ +/rs/a't to Se!tio' <-10;(a)(8) or (a)(9)2 a++ro+riate e)i&e'!e o( a++oi't#e't or i'!/#%e'!$4 (8) i( there is #ore tha' o'e (i&/!iar$2 reaso'a%le ass/ra'!e that all 1ho are re7/ire& to si-' ha)e &o'e so4 a'& (9) i( the i'&orse#e't is #a&e or the i'str/!tio' is ori-i'ate& %$ a +erso' 'ot !o)ere& %$ a'other +ro)isio' o( this s/%se!tio'2 ass/ra'!e a++ro+riate to the !ase !orres+o'&i'as 'earl$ as #a$ %e to the +ro)isio's o( this s/%se!tio'. (%) A' iss/er #a$ ele!t to re7/ire reaso'a%le ass/ra'!e %e$o'& that s+e!i(ie& i' this se!tio'. (!) I' this se!tio'0 (1) ?G/ara't$ o( the si-'at/re? #ea's a -/ara't$ si-'e& %$ or o' %ehal( o( a +erso' reaso'a%l$ %elie)e& %$ the iss/er to %e res+o'si%le. A' iss/er #a$ a&o+t sta'&ar&s 1ith res+e!t to res+o'si%ilit$ i( the$ are 'ot #a'i(estl$ /'reaso'a%le. (*) ?A++ro+riate e)i&e'!e o( a++oi't#e't or i'!/#%e'!$? #ea's0 (i) i' the !ase o( a (i&/!iar$ a++oi'te& or 7/ali(ie& %$ a !o/rt2 a !erti(i!ate iss/e& %$ or /'&er the &ire!tio' or s/+er)isio' o( the !o/rt or a' o((i!er thereo( a'& &ate& 1ithi' :0 &a$s %e(ore the &ate o( +rese'tatio' (or tra's(er4 or (ii) i' a'$ other !ase2 a !o+$ o( a &o!/#e't sho1i'- the a++oi't#e't or a !erti(i!ate iss/e& %$ or o' %ehal( o( a +erso' reaso'a%l$ %elie)e& %$ a' iss/er to %e res+o'si%le or2 i' the a%se'!e o( that &o!/#e't or !erti(i!ate2 other e)i&e'!e the iss/er reaso'a%l$ !o'si&ers a++ro+riate. <-80.. =EEAN= TDAT ISSUER NOT REGISTER TRANS>ER. (a) A +erso' 1ho is a' a++ro+riate +erso' to #a5e a' i'&orse#e't or ori-i'ate a' i'str/!tio' #a$ &e#a'& that the iss/er 'ot re-ister tra's(er o( a se!/rit$ %$ !o##/'i!ati'- to the iss/er a 'oti(i!atio' that i&e'ti(ies the re-istere& o1'er a'& the iss/e o( 1hi!h the se!/rit$ is a +art a'& +ro)i&es a' a&&ress (or !o##/'i!atio's &ire!te& to the +erso' #a5i'- the &e#a'&. The &e#a'& is e((e!ti)e o'l$ i( it is re!ei)e&

%$ the iss/er at a ti#e a'& i' a #a''er a((or&i'- the iss/er reaso'a%le o++ort/'it$ to a!t o' it. (%) I( a !erti(i!ate& se!/rit$ i' re-istere& (or# is +rese'te& to a' iss/er 1ith a re7/est to re-ister tra's(er or a' i'str/!tio' is +rese'te& to a' iss/er 1ith a re7/est to re-ister tra's(er o( a' /'!erti(i!ate& se!/rit$ a(ter a &e#a'& that the iss/er 'ot re-ister tra's(er has %e!o#e e((e!ti)e2 the iss/er shall +ro#+tl$ !o##/'i!ate to (i) the +erso' 1ho i'itiate& the &e#a'& at the a&&ress +ro)i&e& i' the &e#a'& a'& (ii) the +erso' 1ho +rese'te& the se!/rit$ (or re-istratio' o( tra's(er or i'itiate& the i'str/!tio' re7/esti're-istratio' o( tra's(er a 'oti(i!atio' stati'- that0 (1) the !erti(i!ate& se!/rit$ has %ee' +rese'te& (or re-istratio' o( tra's(er or the i'str/!tio' (or re-istratio' o( tra's(er o( the /'!erti(i!ate& se!/rit$ has %ee' re!ei)e&4 (*) a &e#a'& that the iss/er 'ot re-ister tra's(er ha& +re)io/sl$ %ee' re!ei)e&4 a'& (.) the iss/er 1ill 1ithhol& re-istratio' o( tra's(er (or a +erio& o( ti#e state& i' the 'oti(i!atio' i' or&er to +ro)i&e the +erso' 1ho i'itiate& the &e#a'& a' o++ort/'it$ to o%tai' le-al +ro!ess or a' i'&e#'it$ %o'&. (!) The +erio& &es!ri%e& i' s/%se!tio' (%)(.) #a$ 'ot e,!ee& .0 &a$s a(ter the &ate o( !o##/'i!atio' o( the 'oti(i!atio'. A shorter +erio& #a$ %e s+e!i(ie& %$ the iss/er i( it is 'ot #a'i(estl$ /'reaso'a%le. (&) A' iss/er is 'ot lia%le to a +erso' 1ho i'itiate& a &e#a'& that the iss/er 'ot re-ister tra's(er (or a'$ loss the +erso' s/((ers as a res/lt o( re-istratio' o( a tra's(er +/rs/a't to a' e((e!ti)e i'&orse#e't or i'str/!tio' i( the +erso' 1ho i'itiate& the &e#a'& &oes 'ot2 1ithi' the ti#e state& i' the iss/erBs !o##/'i!atio'2 either0 (1) o%tai' a' a++ro+riate restrai'i'- or&er2 i'6/'!tio'2 or other +ro!ess (ro# a !o/rt o( !o#+ete't 6/ris&i!tio' e'6oi'i'- the iss/er (ro# re-isteri'- the tra's(er4 or (*) (ile 1ith the iss/er a' i'&e#'it$ %o'&2 s/((i!ie't i' the iss/erBs 6/&-#e't to +rote!t the iss/er a'& a'$ tra's(er a-e't2 re-istrar2 or other a-e't o( the iss/er i')ol)e& (ro# a'$ loss it or the$ #a$ s/((er %$ re(/si'- to re-ister the tra's(er. (e) This se!tio' &oes 'ot relie)e a' iss/er (ro# lia%ilit$ (or re-isteri'- tra's(er +/rs/a't to a' i'&orse#e't or i'str/!tio' that 1as 'ot e((e!ti)e. <-808. CRONG>UL REGISTRATION. (a) E,!e+t as other1ise +ro)i&e& i' Se!tio' <-80:2 a' iss/er is lia%le (or 1ro'-(/l re-istratio' o( tra's(er i( the iss/er has re-istere& a tra's(er o( a se!/rit$ to a +erso' 'ot e'title& to it2 a'& the tra's(er 1as re-istere&0

(1) +/rs/a't to a' i'e((e!ti)e i'&orse#e't or i'str/!tio'4 (*) a(ter a &e#a'& that the iss/er 'ot re-ister tra's(er %e!a#e e((e!ti)e /'&er Se!tio' <-80.(a) a'& the iss/er &i& 'ot !o#+l$ 1ith Se!tio' <-80.(%)4 (.) a(ter the iss/er ha& %ee' ser)e& 1ith a' i'6/'!tio'2 restrai'i'- or&er2 or other le-al +ro!ess e'6oi'i'- it (ro# re-isteri'- the tra's(er2 iss/e& %$ a !o/rt o( !o#+ete't 6/ris&i!tio'2 a'& the iss/er ha& a reaso'a%le o++ort/'it$ to a!t o' the i'6/'!tio'2 restrai'i'- or&er2 or other le-al +ro!ess4 or (8) %$ a' iss/er a!ti'- i' !oll/sio' 1ith the 1ro'-&oer. (%) A' iss/er that is lia%le (or 1ro'-(/l re-istratio' o( tra's(er /'&er s/%se!tio' (a) o' &e#a'& shall +ro)i&e the +erso' e'title& to the se!/rit$ 1ith a li5e !erti(i!ate& or /'!erti(i!ate& se!/rit$2 a'& a'$ +a$#e'ts or &istri%/tio's that the +erso' &i& 'ot re!ei)e as a res/lt o( the 1ro'-(/l re-istratio'. I( a' o)eriss/e 1o/l& res/lt2 the iss/erBs lia%ilit$ to +ro)i&e the +erso' 1ith a li5e se!/rit$ is -o)er'e& %$ Se!tio' <-*10. (!) E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (a) or i' a la1 relati'- to the !olle!tio' o( ta,es2 a' iss/er is 'ot lia%le to a' o1'er or other +erso' s/((eri'- loss as a res/lt o( the re-istratio' o( a tra's(er o( a se!/rit$ i( re-istratio' 1as #a&e +/rs/a't to a' e((e!ti)e i'&orse#e't or i'str/!tio'. <-809. REPLACEEENT O> LOST2 =ESTROGE=2 OR CRONG>ULLG TAFEN SECURITG CERTI>ICATE. (a) I( a' o1'er o( a !erti(i!ate& se!/rit$2 1hether i' re-istere& or %earer (or#2 !lai#s that the !erti(i!ate has %ee' lost2 &estro$e&2 or 1ro'-(/ll$ ta5e'2 the iss/er shall iss/e a 'e1 !erti(i!ate i( the o1'er0 (1) so re7/ests %e(ore the iss/er has 'oti!e that the !erti(i!ate has %ee' a!7/ire& %$ a +rote!te& +/r!haser4 (*) (iles 1ith the iss/er a s/((i!ie't i'&e#'it$ %o'&4 a'& (.) satis(ies other reaso'a%le re7/ire#e'ts i#+ose& %$ the iss/er. (%) I(2 a(ter the iss/e o( a 'e1 se!/rit$ !erti(i!ate2 a +rote!te& +/r!haser o( the ori-i'al !erti(i!ate +rese'ts it (or re-istratio' o( tra's(er2 the iss/er shall re-ister the tra's(er /'less a' o)eriss/e 1o/l& res/lt. I' that !ase2 the iss/erBs lia%ilit$ is -o)er'e& %$ Se!tio' <-*10. I' a&&itio' to a'$ ri-hts o' the i'&e#'it$ %o'&2 a' iss/er #a$ re!o)er the 'e1 !erti(i!ate (ro# a +erso' to 1ho# it 1as iss/e& or a'$ +erso' ta5i'- /'&er that +erso'2 e,!e+t a +rote!te& +/r!haser.

 <-80:. O@LIGATION TO NOTI>G ISSUER O> LOST2 =ESTROGE=2 OR CRONG>ULLG TAFEN SECURITG CERTI>ICATE. I( a se!/rit$ !erti(i!ate has %ee' lost2 a++are'tl$ &estro$e&2 or 1ro'-(/ll$ ta5e'2 a'& the o1'er (ails to 'oti($ the iss/er o( that (a!t 1ithi' a reaso'a%le ti#e a(ter the o1'er has 'oti!e o( it a'& the iss/er re-isters a tra's(er o( the se!/rit$ %e(ore re!ei)i''oti(i!atio'2 the o1'er #a$ 'ot assert a-ai'st the iss/er a !lai# (or re-isteri'- the tra's(er /'&er Se!tio' <-808 or a !lai# to a 'e1 se!/rit$ !erti(i!ate /'&er Se!tio' <809. <-80;. AUTDENTICATING TRUSTEE2 TRANS>ER AGENT2 AN= REGISTRAR. A +erso' a!ti'- as a/the'ti!ati'- tr/stee2 tra's(er a-e't2 re-istrar2 or other a-e't (or a' iss/er i' the re-istratio' o( a tra's(er o( its se!/rities2 i' the iss/e o( 'e1 se!/rit$ !erti(i!ates or /'!erti(i!ate& se!/rities2 or i' the !a'!ellatio' o( s/rre'&ere& se!/rit$ !erti(i!ates has the sa#e o%li-atio' to the hol&er or o1'er o( a !erti(i!ate& or /'!erti(i!ate& se!/rit$ 1ith re-ar& to the +arti!/lar (/'!tio's +er(or#e& as the iss/er has i' re-ar& to those (/'!tio's. PART 9. SECURITG ENTITLEEENTS <-901. SECURITIES ACCOUNT4 ACKUISITION O> SECURITG ENTITLEEENT >ROE SECURITIES INTEREE=IARG. (a) ?Se!/rities a!!o/'t? #ea's a' a!!o/'t to 1hi!h a (i'a'!ial asset is or #a$ %e !re&ite& i' a!!or&a'!e 1ith a' a-ree#e't /'&er 1hi!h the +erso' #ai'tai'i'- the a!!o/'t /'&erta5es to treat the +erso' (or 1ho# the a!!o/'t is #ai'tai'e& as e'title& to e,er!ise the ri-hts that !o#+rise the (i'a'!ial asset. (%) E,!e+t as other1ise +ro)i&e& i' s/%se!tio's (&) a'& (e)2 a +erso' a!7/ires a se!/rit$ e'title#e't i( a se!/rities i'ter#e&iar$0 (1) i'&i!ates %$ %oo5 e'tr$ that a (i'a'!ial asset has %ee' !re&ite& to the +erso'Bs se!/rities a!!o/'t4 (*) re!ei)es a (i'a'!ial asset (ro# the +erso' or a!7/ires a (i'a'!ial asset (or the +erso' a'&2 i' either !ase2 a!!e+ts it (or !re&it to the +erso'Bs se!/rities a!!o/'t4 or (.) %e!o#es o%li-ate& /'&er other la12 re-/latio'2 or r/le to !re&it a (i'a'!ial asset to the +erso'Bs se!/rities a!!o/'t. (!) I( a !o'&itio' o( s/%se!tio' (%) has %ee' #et2 a +erso' has a se!/rit$ e'title#e't e)e' tho/-h the se!/rities i'ter#e&iar$ &oes 'ot itsel( hol& the (i'a'!ial asset.

(&) I( a se!/rities i'ter#e&iar$ hol&s a (i'a'!ial asset (or a'other +erso'2 a'& the (i'a'!ial asset is re-istere& i' the 'a#e o(2 +a$a%le to the or&er o(2 or s+e!iall$ i'&orse& to the other +erso'2 a'& has 'ot %ee' i'&orse& to the se!/rities i'ter#e&iar$ or i' %la'52 the other +erso' is treate& as hol&i'- the (i'a'!ial asset &ire!tl$ rather tha' as ha)i'- a se!/rit$ e'title#e't 1ith res+e!t to the (i'a'!ial asset. (e) Iss/a'!e o( a se!/rit$ is 'ot esta%lish#e't o( a se!/rit$ e'title#e't. <-90*. ASSERTION O> A=VERSE CLAIE AGAINST ENTITLEEENT DOL=ER. A' a!tio' %ase& o' a' a&)erse !lai# to a (i'a'!ial asset2 1hether (ra#e& i' !o')ersio'2 re+le)i'2 !o'str/!ti)e tr/st2 e7/ita%le lie'2 or other theor$2 #a$ 'ot %e asserte& a-ai'st a +erso' 1ho a!7/ires a se!/rit$ e'title#e't /'&er Se!tio' <-901 (or )al/e a'& 1itho/t 'oti!e o( the a&)erse !lai#. <-90.. PROPERTG INTEREST O> ENTITLEEENT DOL=ER IN >INANCIAL ASSET DEL= @G SECURITIES INTEREE=IARG. (a) To the e,te't 'e!essar$ (or a se!/rities i'ter#e&iar$ to satis($ all se!/rit$ e'title#e'ts 1ith res+e!t to a +arti!/lar (i'a'!ial asset2 all i'terests i' that (i'a'!ial asset hel& %$ the se!/rities i'ter#e&iar$ are hel& %$ the se!/rities i'ter#e&iar$ (or the e'title#e't hol&ers2 are 'ot +ro+ert$ o( the se!/rities i'ter#e&iar$2 a'& are 'ot s/%6e!t to !lai#s o( !re&itors o( the se!/rities i'ter#e&iar$2 e,!e+t as other1ise +ro)i&e& i' Se!tio' <-911. (%) A' e'title#e't hol&erBs +ro+ert$ i'terest 1ith res+e!t to a +arti!/lar (i'a'!ial asset /'&er s/%se!tio' (a) is a +ro rata +ro+ert$ i'terest i' all i'terests i' that (i'a'!ial asset hel& %$ the se!/rities i'ter#e&iar$2 1itho/t re-ar& to the ti#e the e'title#e't hol&er a!7/ire& the se!/rit$ e'title#e't or the ti#e the se!/rities i'ter#e&iar$ a!7/ire& the i'terest i' that (i'a'!ial asset. (!) A' e'title#e't hol&erBs +ro+ert$ i'terest 1ith res+e!t to a +arti!/lar (i'a'!ial asset /'&er s/%se!tio' (a) #a$ %e e'(or!e& a-ai'st the se!/rities i'ter#e&iar$ o'l$ %$ e,er!ise o( the e'title#e't hol&erBs ri-hts /'&er Se!tio's <-909 thro/-h <-90<. (&) A' e'title#e't hol&erBs +ro+ert$ i'terest 1ith res+e!t to a +arti!/lar (i'a'!ial asset /'&er s/%se!tio' (a) #a$ %e e'(or!e& a-ai'st a +/r!haser o( the (i'a'!ial asset or i'terest therei' o'l$ i(0 (1) i'sol)e'!$ +ro!ee&i'-s ha)e %ee' i'itiate& %$ or a-ai'st the se!/rities i'ter#e&iar$4 (*) the se!/rities i'ter#e&iar$ &oes 'ot ha)e s/((i!ie't i'terests i' the (i'a'!ial asset to satis($ the se!/rit$ e'title#e'ts o( all o( its e'title#e't hol&ers to that (i'a'!ial asset4

(.) the se!/rities i'ter#e&iar$ )iolate& its o%li-atio's /'&er Se!tio' <-908 %$ tra's(erri'- the (i'a'!ial asset or i'terest therei' to the +/r!haser4 a'& (8) the +/r!haser is 'ot +rote!te& /'&er s/%se!tio' (e). The tr/stee or other li7/i&ator2 a!ti'- o' %ehal( o( all e'title#e't hol&ers ha)i'- se!/rit$ e'title#e'ts 1ith res+e!t to a +arti!/lar (i'a'!ial asset2 #a$ re!o)er the (i'a'!ial asset2 or i'terest therei'2 (ro# the +/r!haser. I( the tr/stee or other li7/i&ator ele!ts 'ot to +/rs/e that ri-ht2 a' e'title#e't hol&er 1hose se!/rit$ e'title#e't re#ai's /'satis(ie& has the ri-ht to re!o)er its i'terest i' the (i'a'!ial asset (ro# the +/r!haser. (e) A' a!tio' %ase& o' the e'title#e't hol&erBs +ro+ert$ i'terest 1ith res+e!t to a +arti!/lar (i'a'!ial asset /'&er s/%se!tio' (a)2 1hether (ra#e& i' !o')ersio'2 re+le)i'2 !o'str/!ti)e tr/st2 e7/ita%le lie'2 or other theor$2 #a$ 'ot %e asserte& a-ai'st a'$ +/r!haser o( a (i'a'!ial asset or i'terest therei' 1ho -i)es )al/e2 o%tai's !o'trol2 a'& &oes 'ot a!t i' !oll/sio' 1ith the se!/rities i'ter#e&iar$ i' )iolati'- the se!/rities i'ter#e&iar$Bs o%li-atio's /'&er Se!tio' <-908. <-908. =UTG O> SECURITIES INTEREE=IARG TO EAINTAIN >INANCIAL ASSET. (a) A se!/rities i'ter#e&iar$ shall +ro#+tl$ o%tai' a'& therea(ter #ai'tai' a (i'a'!ial asset i' a 7/a'tit$ !orres+o'&i'- to the a--re-ate o( all se!/rit$ e'title#e'ts it has esta%lishe& i' (a)or o( its e'title#e't hol&ers 1ith res+e!t to that (i'a'!ial asset. The se!/rities i'ter#e&iar$ #a$ #ai'tai' those (i'a'!ial assets &ire!tl$ or thro/-h o'e or #ore other se!/rities i'ter#e&iaries. (%) E,!e+t to the e,te't other1ise a-ree& %$ its e'title#e't hol&er2 a se!/rities i'ter#e&iar$ #a$ 'ot -ra't a'$ se!/rit$ i'terests i' a (i'a'!ial asset it is o%li-ate& to #ai'tai' +/rs/a't to s/%se!tio' (a). (!) A se!/rities i'ter#e&iar$ satis(ies the &/t$ i' s/%se!tio' (a) i(0 (1) the se!/rities i'ter#e&iar$ a!ts 1ith res+e!t to the &/t$ as a-ree& /+o' %$ the e'title#e't hol&er a'& the se!/rities i'ter#e&iar$4 or (*) i' the a%se'!e o( a-ree#e't2 the se!/rities i'ter#e&iar$ e,er!ises &/e !are i' a!!or&a'!e 1ith reaso'a%le !o##er!ial sta'&ar&s to o%tai' a'& #ai'tai' the (i'a'!ial asset. (&) This se!tio' &oes 'ot a++l$ to a !leari'- !or+oratio' that is itsel( the o%li-or o( a' o+tio' or si#ilar o%li-atio' to 1hi!h its e'title#e't hol&ers ha)e se!/rit$ e'title#e'ts.

 <-909. =UTG O> SECURITIES INTEREE=IARG CITD RESPECT TO PAGEENTS AN= =ISTRI@UTIONS. (a) A se!/rities i'ter#e&iar$ shall ta5e a!tio' to o%tai' a +a$#e't or &istri%/tio' #a&e %$ the iss/er o( a (i'a'!ial asset. A se!/rities i'ter#e&iar$ satis(ies the &/t$ i(0 (1) the se!/rities i'ter#e&iar$ a!ts 1ith res+e!t to the &/t$ as a-ree& /+o' %$ the e'title#e't hol&er a'& the se!/rities i'ter#e&iar$4 or (*) i' the a%se'!e o( a-ree#e't2 the se!/rities i'ter#e&iar$ e,er!ises &/e !are i' a!!or&a'!e 1ith reaso'a%le !o##er!ial sta'&ar&s to atte#+t to o%tai' the +a$#e't or &istri%/tio'. (%) A se!/rities i'ter#e&iar$ is o%li-ate& to its e'title#e't hol&er (or a +a$#e't or &istri%/tio' #a&e %$ the iss/er o( a (i'a'!ial asset i( the +a$#e't or &istri%/tio' is re!ei)e& %$ the se!/rities i'ter#e&iar$. <-90:. =UTG O> SECURITIES INTEREE=IARG TO EMERCISE RIGDTS AS =IRECTE= @G ENTITLEEENT DOL=ER. A se!/rities i'ter#e&iar$ shall e,er!ise ri-hts 1ith res+e!t to a (i'a'!ial asset i( &ire!te& to &o so %$ a' e'title#e't hol&er. A se!/rities i'ter#e&iar$ satis(ies the &/t$ i(0 (1) the se!/rities i'ter#e&iar$ a!ts 1ith res+e!t to the &/t$ as a-ree& /+o' %$ the e'title#e't hol&er a'& the se!/rities i'ter#e&iar$4 or (*) i' the a%se'!e o( a-ree#e't2 the se!/rities i'ter#e&iar$ either +la!es the e'title#e't hol&er i' a +ositio' to e,er!ise the ri-hts &ire!tl$ or e,er!ises &/e !are i' a!!or&a'!e 1ith reaso'a%le !o##er!ial sta'&ar&s to (ollo1 the &ire!tio' o( the e'title#e't hol&er. <-90;. =UTG O> SECURITIES INTEREE=IARG TO COEPLG CITD ENTITLEEENT OR=ER. (a) A se!/rities i'ter#e&iar$ shall !o#+l$ 1ith a' e'title#e't or&er i( the e'title#e't or&er is ori-i'ate& %$ the a++ro+riate +erso'2 the se!/rities i'ter#e&iar$ has ha& reaso'a%le o++ort/'it$ to ass/re itsel( that the e'title#e't or&er is -e'/i'e a'& a/thori3e&2 a'& the se!/rities i'ter#e&iar$ has ha& reaso'a%le o++ort/'it$ to !o#+l$ 1ith the e'title#e't or&er. A se!/rities i'ter#e&iar$ satis(ies the &/t$ i(0 (1) the se!/rities i'ter#e&iar$ a!ts 1ith res+e!t to the &/t$ as a-ree& /+o' %$ the e'title#e't hol&er a'& the se!/rities i'ter#e&iar$4 or (*) i' the a%se'!e o( a-ree#e't2 the se!/rities i'ter#e&iar$ e,er!ises &/e !are i' a!!or&a'!e 1ith reaso'a%le !o##er!ial sta'&ar&s to !o#+l$ 1ith the e'title#e't or&er.

(%) I( a se!/rities i'ter#e&iar$ tra's(ers a (i'a'!ial asset +/rs/a't to a' i'e((e!ti)e e'title#e't or&er2 the se!/rities i'ter#e&iar$ shall reesta%lish a se!/rit$ e'title#e't i' (a)or o( the +erso' e'title& to it2 a'& +a$ or !re&it a'$ +a$#e'ts or &istri%/tio's that the +erso' &i& 'ot re!ei)e as a res/lt o( the 1ro'-(/l tra's(er. I( the se!/rities i'ter#e&iar$ &oes 'ot reesta%lish a se!/rit$ e'title#e't2 the se!/rities i'ter#e&iar$ is lia%le to the e'title#e't hol&er (or &a#a-es. <-90<. =UTG O> SECURITIES INTEREE=IARG TO CDANGE ENTITLEEENT DOL=ERBS POSITION TO OTDER >ORE O> SECURITG DOL=ING. A se!/rities i'ter#e&iar$ shall a!t at the &ire!tio' o( a' e'title#e't hol&er to !ha'-e a se!/rit$ e'title#e't i'to a'other a)aila%le (or# o( hol&i'- (or 1hi!h the e'title#e't hol&er is eli-i%le2 or to !a/se the (i'a'!ial asset to %e tra's(erre& to a se!/rities a!!o/'t o( the e'title#e't hol&er 1ith a'other se!/rities i'ter#e&iar$. A se!/rities i'ter#e&iar$ satis(ies the &/t$ i(0 (1) the se!/rities i'ter#e&iar$ a!ts as a-ree& /+o' %$ the e'title#e't hol&er a'& the se!/rities i'ter#e&iar$4 or (*) i' the a%se'!e o( a-ree#e't2 the se!/rities i'ter#e&iar$ e,er!ises &/e !are i' a!!or&a'!e 1ith reaso'a%le !o##er!ial sta'&ar&s to (ollo1 the &ire!tio' o( the e'title#e't hol&er. <-90A. SPECI>ICATION O> =UTIES O> SECURITIES INTEREE=IARG @G OTDER STATUTE OR REGULATION4 EANNER O> PER>OREANCE O> =UTIES O> SECURITIES INTEREE=IARG AN= EMERCISE O> RIGDTS O> ENTITLEEENT DOL=ER. (a) I( the s/%sta'!e o( a &/t$ i#+ose& /+o' a se!/rities i'ter#e&iar$ %$ Se!tio's <908 thro/-h <-90< is the s/%6e!t o( other stat/te2 re-/latio'2 or r/le2 !o#+lia'!e 1ith that stat/te2 re-/latio'2 or r/le satis(ies the &/t$. (%) To the e,te't that s+e!i(i! sta'&ar&s (or the +er(or#a'!e o( the &/ties o( a se!/rities i'ter#e&iar$ or the e,er!ise o( the ri-hts o( a' e'title#e't hol&er are 'ot s+e!i(ie& %$ other stat/te2 re-/latio'2 or r/le or %$ a-ree#e't %et1ee' the se!/rities i'ter#e&iar$ a'& e'title#e't hol&er2 the se!/rities i'ter#e&iar$ shall +er(or# its &/ties a'& the e'title#e't hol&er shall e,er!ise its ri-hts i' a !o##er!iall$ reaso'a%le #a''er. (!) The o%li-atio' o( a se!/rities i'ter#e&iar$ to +er(or# the &/ties i#+ose& %$ Se!tio's <-908 thro/-h <-90< is s/%6e!t to0 (1) ri-hts o( the se!/rities i'ter#e&iar$ arisi'- o/t o( a se!/rit$ i'terest /'&er a se!/rit$ a-ree#e't 1ith the e'title#e't hol&er or other1ise4 a'&

(*) ri-hts o( the se!/rities i'ter#e&iar$ /'&er other la12 re-/latio'2 r/le2 or a-ree#e't to 1ithhol& +er(or#a'!e o( its &/ties as a res/lt o( /'(/l(ille& o%li-atio's o( the e'title#e't hol&er to the se!/rities i'ter#e&iar$. (&) Se!tio's <-908 thro/-h <-90< &o 'ot re7/ire a se!/rities i'ter#e&iar$ to ta5e a'$ a!tio' that is +rohi%ite& %$ other stat/te2 re-/latio'2 or r/le. <-910. RIGDTS O> PURCDASER O> SECURITG ENTITLEEENT >ROE ENTITLEEENT DOL=ER. (a) I' a !ase 'ot !o)ere& %$ the +riorit$ r/les i' Arti!le A or the r/les state& i' s/%se!tio' (!)2 a' a!tio' %ase& o' a' a&)erse !lai# to a (i'a'!ial asset or se!/rit$ e'title#e't2 1hether (ra#e& i' !o')ersio'2 re+le)i'2 !o'str/!ti)e tr/st2 e7/ita%le lie'2 or other theor$2 #a$ 'ot %e asserte& a-ai'st a +erso' 1ho +/r!hases a se!/rit$ e'title#e't2 or a' i'terest therei'2 (ro# a' e'title#e't hol&er i( the +/r!haser -i)es )al/e2 &oes 'ot ha)e 'oti!e o( the a&)erse !lai#2 a'& o%tai's !o'trol. (%) I( a' a&)erse !lai# !o/l& 'ot ha)e %ee' asserte& a-ai'st a' e'title#e't hol&er /'&er Se!tio' <-90*2 the a&)erse !lai# !a''ot %e asserte& a-ai'st a +erso' 1ho +/r!hases a se!/rit$ e'title#e't2 or a' i'terest therei'2 (ro# the e'title#e't hol&er. (!) I' a !ase 'ot !o)ere& %$ the +riorit$ r/les i' Arti!le A2 a +/r!haser (or )al/e o( a se!/rit$ e'title#e't2 or a' i'terest therei'2 1ho o%tai's !o'trol has +riorit$ o)er a +/r!haser o( a se!/rit$ e'title#e't2 or a' i'terest therei'2 1ho &oes 'ot o%tai' !o'trol. E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&)2 +/r!hasers 1ho ha)e !o'trol ra'5 a!!or&i'- to +riorit$ i' ti#e o(0 (1) the +/r!haserBs %e!o#i'- the +erso' (or 1ho# the se!/rities a!!o/'t2 i' 1hi!h the se!/rit$ e'title#e't is !arrie&2 is #ai'tai'e&2 i( the +/r!haser o%tai'e& !o'trol /'&er Se!tio' <-10:(&)(1)4 (*) the se!/rities i'ter#e&iar$Bs a-ree#e't to !o#+l$ 1ith the +/r!haserBs e'title#e't or&ers 1ith res+e!t to se!/rit$ e'title#e'ts !arrie& or to %e !arrie& i' the se!/rities a!!o/'t i' 1hi!h the se!/rit$ e'title#e't is !arrie&2 i( the +/r!haser o%tai'e& !o'trol /'&er Se!tio' <-10:(&)(*)4 or (.) i( the +/r!haser o%tai'e& !o'trol thro/-h a'other +erso' /'&er Se!tio' <-10:(&)(.)2 the ti#e o' 1hi!h +riorit$ 1o/l& %e %ase& /'&er this s/%se!tio' i( the other +erso' 1ere the se!/re& +art$. (&) A se!/rities i'ter#e&iar$ as +/r!haser has +riorit$ o)er a !o'(li!ti'- +/r!haser 1ho has !o'trol /'less other1ise a-ree& %$ the se!/rities i'ter#e&iar$. <-911. PRIORITG AEONG SECURITG INTERESTS AN= ENTITLEEENT DOL=ERS.

(a) E,!e+t as other1ise +ro)i&e& i' s/%se!tio's (%) a'& (!)2 i( a se!/rities i'ter#e&iar$ &oes 'ot ha)e s/((i!ie't i'terests i' a +arti!/lar (i'a'!ial asset to satis($ %oth its o%li-atio's to e'title#e't hol&ers 1ho ha)e se!/rit$ e'title#e'ts to that (i'a'!ial asset a'& its o%li-atio' to a !re&itor o( the se!/rities i'ter#e&iar$ 1ho has a se!/rit$ i'terest i' that (i'a'!ial asset2 the !lai#s o( e'title#e't hol&ers2 other tha' the !re&itor2 ha)e +riorit$ o)er the !lai# o( the !re&itor. (%) A !lai# o( a !re&itor o( a se!/rities i'ter#e&iar$ 1ho has a se!/rit$ i'terest i' a (i'a'!ial asset hel& %$ a se!/rities i'ter#e&iar$ has +riorit$ o)er !lai#s o( the se!/rities i'ter#e&iar$Bs e'title#e't hol&ers 1ho ha)e se!/rit$ e'title#e'ts 1ith res+e!t to that (i'a'!ial asset i( the !re&itor has !o'trol o)er the (i'a'!ial asset. (!) I( a !leari'- !or+oratio' &oes 'ot ha)e s/((i!ie't (i'a'!ial assets to satis($ %oth its o%li-atio's to e'title#e't hol&ers 1ho ha)e se!/rit$ e'title#e'ts 1ith res+e!t to a (i'a'!ial asset a'& its o%li-atio' to a !re&itor o( the !leari'- !or+oratio' 1ho has a se!/rit$ i'terest i' that (i'a'!ial asset2 the !lai# o( the !re&itor has +riorit$ o)er the !lai#s o( e'title#e't hol&ers. PART :. TRANSITION PROVISIONS >OR REVISE= ARTICLE < AN= CON>OREING AEEN=EENTS TO ARTICLES 12 82 92 A2 AN= 10 <-:01. E>>ECTIVE =ATE. This A!t" ta5es e((e!t ... . <-:0*. REPEALS. This A!t" re+eals ... . <-:0.. SAVINGS CLAUSE. (a) This A!t" &oes 'ot a((e!t a' a!tio' or +ro!ee&i'- !o##e'!e& %e(ore this A!t" ta5es e((e!t. (%) I( a se!/rit$ i'terest i' a se!/rit$ is +er(e!te& at the &ate this A!t" ta5es e((e!t2 a'& the a!tio' %$ 1hi!h the se!/rit$ i'terest 1as +er(e!te& 1o/l& s/((i!e to +er(e!t a se!/rit$ i'terest /'&er this A!t"2 'o (/rther a!tio' is re7/ire& to !o'ti'/e +er(e!tio'. I( a se!/rit$ i'terest i' a se!/rit$ is +er(e!te& at the &ate this A!t" ta5es e((e!t %/t the a!tio' %$ 1hi!h the se!/rit$ i'terest 1as +er(e!te& 1o/l& 'ot s/((i!e to +er(e!t a se!/rit$ i'terest /'&er this A!t"2 the se!/rit$ i'terest re#ai's +er(e!te& (or a +erio& o( (o/r #o'ths a(ter the e((e!ti)e &ate a'& !o'ti'/es +er(e!te& therea(ter i( a++ro+riate a!tio' to +er(e!t /'&er this A!t" is ta5e' 1ithi' that +erio&. I( a se!/rit$ i'terest is +er(e!te& at the &ate this A!t" ta5es e((e!t a'& the se!/rit$ i'terest !a' %e +er(e!te& %$

(ili'- /'&er this A!t"2 a (i'a'!i'- state#e't si-'e& %$ the se!/re& +art$ i'stea& o( the &e%tor #a$ %e (ile& 1ithi' that +erio& to !o'ti'/e +er(e!tio' or therea(ter to +er(e!t. U.C.C. - ARTICLE A - SECURE= TRANSACTIONS Part 1. Ge'eral Pro)isio's [Subpart 1. Short Title, Definitions, and General Concepts] 9-101. S !"T T#T$%. This arti!le #a$ %e !ite& as U'i(or# Co##er!ial Co&e-Se!/re& Tra'sa!tio's. 9-10&. D%'#(#T#!(S )(D #(D%* !' D%'#(#T#!(S. IaJ #.rticle $ definitions.' I' this arti!le0 (1) ?.ccession? #ea's -oo&s that are +h$si!all$ /'ite& 1ith other -oo&s i' s/!h a #a''er that the i&e'tit$ o( the ori-i'al -oo&s is 'ot lost. (*) ?.ccount?2 e,!e+t as /se& i' ?a!!o/'t (or?2 #ea's a ri-ht to +a$#e't o( a #o'etar$ o%li-atio'2 1hether or 'ot ear'e& %$ +er(or#a'!e2 (i) (or +ro+ert$ that has %ee' or is to %e sol&2 lease&2 li!e'se&2 assi-'e&2 or other1ise &is+ose& o(2 (ii) (or ser)i!es re'&ere& or to %e re'&ere&2 (iii) (or a +oli!$ o( i's/ra'!e iss/e& or to %e iss/e&2 (i)) (or a se!o'&ar$ o%li-atio' i'!/rre& or to %e i'!/rre&2 ()) (or e'er-$ +ro)i&e& or to %e +ro)i&e&2 ()i) (or the /se or hire o( a )essel /'&er a !harter or other !o'tra!t2 ()ii) arisi'- o/t o( the /se o( a !re&it or !har-e !ar& or i'(or#atio' !o'tai'e& o' or (or /se 1ith the !ar&2 or ()iii) as 1i''i'-s i' a lotter$ or other -a#e o( !ha'!e o+erate& or s+o'sore& %$ a State2 -o)er'#e'tal /'it o( a State2 or +erso' li!e'se& or a/thori3e& to o+erate the -a#e %$ a State or -o)er'#e'tal /'it o( a State. The ter# i'!l/&es health!are-i's/ra'!e re!ei)a%les. The ter# &oes 'ot i'!l/&e (i) ri-hts to +a$#e't e)i&e'!e& %$ !hattel +a+er or a' i'str/#e't2 (ii) !o##er!ial tort !lai#s2 (iii) &e+osit a!!o/'ts2 (i)) i')est#e't +ro+ert$2 ()) letter-o(-!re&it ri-hts or letters o( !re&it2 or ()i) ri-hts to +a$#e't (or #o'e$ or (/'&s a&)a'!e& or sol&2 other tha' ri-hts arisi'- o/t o( the /se o( a !re&it or !har-e !ar& or i'(or#atio' !o'tai'e& o' or (or /se 1ith the !ar&. (.) ?.ccount de0tor? #ea's a +erso' o%li-ate& o' a' a!!o/'t2 !hattel +a+er2 or -e'eral i'ta'-i%le. The ter# &oes 'ot i'!l/&e +erso's o%li-ate& to +a$ a 'e-otia%le i'str/#e't2 e)e' i( the i'str/#e't !o'stit/tes +art o( !hattel +a+er. (8) ?.ccountin/?2 e,!e+t as /se& i' ?a!!o/'ti'- (or?2 #ea's a re!or&0 (A) a/the'ti!ate& %$ a se!/re& +art$4 (@) i'&i!ati'- the a--re-ate /'+ai& se!/re& o%li-atio's as o( a &ate 'ot #ore tha' .9 &a$s earlier or .9 &a$s later tha' the &ate o( the re!or&4 a'& (C) i&e'ti($i'- the !o#+o'e'ts o( the o%li-atio's i' reaso'a%le &etail. (9) ?./ricultural lien? #ea's a' i'terest2 other tha' a se!/rit$ i'terest2 i' (ar# +ro&/!ts0 (A) 1hi!h se!/res +a$#e't or +er(or#a'!e o( a' o%li-atio' (or0 (i) -oo&s or ser)i!es (/r'ishe& i' !o''e!tio' 1ith a &e%torBs (ar#i'- o+eratio'4 or (ii) re't o' real +ro+ert$ lease& %$ a &e%tor i' !o''e!tio' 1ith its (ar#i'- o+eratio'4 (@) 1hi!h is !reate& %$ stat/te i' (a)or o( a +erso' that0 (i) i' the or&i'ar$ !o/rse o( its %/si'ess (/r'ishe& -oo&s or ser)i!es to a &e%tor i' !o''e!tio' 1ith a &e%torBs (ar#i'- o+eratio'4 or

(ii) lease& real +ro+ert$ to a &e%tor i' !o''e!tio' 1ith the &e%torBs (ar#i'- o+eratio'4 a'& (C) 1hose e((e!ti)e'ess &oes 'ot &e+e'& o' the +erso'Bs +ossessio' o( the +erso'al +ro+ert$. (:) ?.s-extracted collateral? #ea's0 (A) oil2 -as2 or other #i'erals that are s/%6e!t to a se!/rit$ i'terest that0 (i) is !reate& %$ a &e%tor ha)i'- a' i'terest i' the #i'erals %e(ore e,tra!tio'4 a'& (ii) atta!hes to the #i'erals as e,tra!te&4 or (@) a!!o/'ts arisi'- o/t o( the sale at the 1ellhea& or #i'ehea& o( oil2 -as2 or other #i'erals i' 1hi!h the &e%tor ha& a' i'terest %e(ore e,tra!tio'. (;) ?.uthenticate? #ea's0 (A) to si-'4 or (@) to e,e!/te or other1ise a&o+t a s$#%ol2 or e'!r$+t or si#ilarl$ +ro!ess a re!or& i' 1hole or i' +art2 1ith the +rese't i'te't o( the a/the'ti!ati'- +erso' to i&e'ti($ the +erso' a'& a&o+t or a!!e+t a re!or&. (<) ?"an>? #ea's a' or-a'i3atio' that is e'-a-e& i' the %/si'ess o( %a'5i'-. The ter# i'!l/&es sa)i'-s %a'5s2 sa)i'-s a'& loa' asso!iatio's2 !re&it /'io's2 a'& tr/st !o#+a'ies. (A) ?Cash proceeds? #ea's +ro!ee&s that are #o'e$2 !he!5s2 &e+osit a!!o/'ts2 or the li5e. (10) ?Certificate of title? #ea's a !erti(i!ate o( title 1ith res+e!t to 1hi!h a stat/te +ro)i&es (or the se!/rit$ i'terest i' 7/estio' to %e i'&i!ate& o' the !erti(i!ate as a !o'&itio' or res/lt o( the se!/rit$ i'terestBs o%tai'i'- +riorit$ o)er the ri-hts o( a lie' !re&itor 1ith res+e!t to the !ollateral. (11) ?Chattel paper? #ea's a re!or& or re!or&s that e)i&e'!e %oth a #o'etar$ o%li-atio' a'& a se!/rit$ i'terest i' s+e!i(i! -oo&s2 a se!/rit$ i'terest i' s+e!i(i! -oo&s a'& so(t1are /se& i' the -oo&s2 a se!/rit$ i'terest i' s+e!i(i! -oo&s a'& li!e'se o( so(t1are /se& i' the -oo&s2 a lease o( s+e!i(i! -oo&s2 or a lease o( s+e!i(i! -oo&s a'& li!e'se o( so(t1are /se& i' the -oo&s. I' this +ara-ra+h2 ?#o'etar$ o%li-atio'? #ea's a #o'etar$ o%li-atio' se!/re& %$ the -oo&s or o1e& /'&er a lease o( the -oo&s a'& i'!l/&es a #o'etar$ o%li-atio' 1ith res+e!t to so(t1are /se& i' the -oo&s. The ter# &oes 'ot i'!l/&e (i) !harters or other !o'tra!ts i')ol)i'- the /se or hire o( a )essel or (ii) re!or&s that e)i&e'!e a ri-ht to +a$#e't arisi'- o/t o( the /se o( a !re&it or !har-e !ar& or i'(or#atio' !o'tai'e& o' or (or /se 1ith the !ar&. I( a tra'sa!tio' is e)i&e'!e& %$ re!or&s that i'!l/&e a' i'str/#e't or series o( i'str/#e'ts2 the -ro/+ o( re!or&s ta5e' to-ether !o'stit/tes !hattel +a+er. (1*) ?Collateral? #ea's the +ro+ert$ s/%6e!t to a se!/rit$ i'terest or a-ri!/lt/ral lie'. The ter# i'!l/&es0 (A) +ro!ee&s to 1hi!h a se!/rit$ i'terest atta!hes4 (@) a!!o/'ts2 !hattel +a+er2 +a$#e't i'ta'-i%les2 a'& +ro#issor$ 'otes that ha)e %ee' sol&4 a'& (C) -oo&s that are the s/%6e!t o( a !o'si-'#e't. (1.) ?Commercial tort claim? #ea's a !lai# arisi'- i' tort 1ith res+e!t to 1hi!h0 (A) the !lai#a't is a' or-a'i3atio'4 or

(@) the !lai#a't is a' i'&i)i&/al a'& the !lai#0 (i) arose i' the !o/rse o( the !lai#a'tBs %/si'ess or +ro(essio'4 a'& (ii) &oes 'ot i'!l/&e &a#a-es arisi'- o/t o( +erso'al i'6/r$ to or the &eath o( a' i'&i)i&/al. (18) ?Commodit! account? #ea's a' a!!o/'t #ai'tai'e& %$ a !o##o&it$ i'ter#e&iar$ i' 1hi!h a !o##o&it$ !o'tra!t is !arrie& (or a !o##o&it$ !/sto#er. (19) ?Commodit! contract? #ea's a !o##o&it$ (/t/res !o'tra!t2 a' o+tio' o' a !o##o&it$ (/t/res !o'tra!t2 a !o##o&it$ o+tio'2 or a'other !o'tra!t i( the !o'tra!t or o+tio' is0 (A) tra&e& o' or s/%6e!t to the r/les o( a %oar& o( tra&e that has %ee' &esi-'ate& as a !o'tra!t #ar5et (or s/!h a !o'tra!t +/rs/a't to (e&eral !o##o&ities la1s4 or (@) tra&e& o' a (orei-' !o##o&it$ %oar& o( tra&e2 e,!ha'-e2 or #ar5et2 a'& is !arrie& o' the %oo5s o( a !o##o&it$ i'ter#e&iar$ (or a !o##o&it$ !/sto#er. (1:) ?Commodit! customer? #ea's a +erso' (or 1hi!h a !o##o&it$ i'ter#e&iar$ !arries a !o##o&it$ !o'tra!t o' its %oo5s. (1;) ?Commodit! intermediar!? #ea's a +erso' that0 (A) is re-istere& as a (/t/res !o##issio' #er!ha't /'&er (e&eral !o##o&ities la14 or (@) i' the or&i'ar$ !o/rse o( its %/si'ess +ro)i&es !leara'!e or settle#e't ser)i!es (or a %oar& o( tra&e that has %ee' &esi-'ate& as a !o'tra!t #ar5et +/rs/a't to (e&eral !o##o&ities la1. (1<) ?Communicate? #ea's0 (A) to se'& a 1ritte' or other ta'-i%le re!or&4 (@) to tra's#it a re!or& %$ a'$ #ea's a-ree& /+o' %$ the +erso's se'&i'- a'& re!ei)i'- the re!or&4 or (C) i' the !ase o( tra's#issio' o( a re!or& to or %$ a (ili'- o((i!e2 to tra's#it a re!or& %$ a'$ #ea's +res!ri%e& %$ (ili'--o((i!e r/le. (1A) ?Consi/nee? #ea's a #er!ha't to 1hi!h -oo&s are &eli)ere& i' a !o'si-'#e't. (*0) ?Consi/nment? #ea's a tra'sa!tio'2 re-ar&less o( its (or#2 i' 1hi!h a +erso' &eli)ers -oo&s to a #er!ha't (or the +/r+ose o( sale a'&0 (A) the #er!ha't0 (i) &eals i' -oo&s o( that 5i'& /'&er a 'a#e other tha' the 'a#e o( the +erso' #a5i'&eli)er$4 (ii) is 'ot a' a/!tio'eer4 a'& (iii) is 'ot -e'erall$ 5'o1' %$ its !re&itors to %e s/%sta'tiall$ e'-a-e& i' selli'- the -oo&s o( others4 (@) 1ith res+e!t to ea!h &eli)er$2 the a--re-ate )al/e o( the -oo&s is I12000 or #ore at the ti#e o( &eli)er$4 (C) the -oo&s are 'ot !o's/#er -oo&s i##e&iatel$ %e(ore &eli)er$4 a'& (=) the tra'sa!tio' &oes 'ot !reate a se!/rit$ i'terest that se!/res a' o%li-atio'. (*1) ?Consi/nor? #ea's a +erso' that &eli)ers -oo&s to a !o'si-'ee i' a !o'si-'#e't. (**) ?Consumer de0tor? #ea's a &e%tor i' a !o's/#er tra'sa!tio'. (*.) ?Consumer /oods? #ea's -oo&s that are /se& or %o/-ht (or /se +ri#aril$ (or +erso'al2 (a#il$2 or ho/sehol& +/r+oses. (*8) ?Consumer-/oods transaction? #ea's a !o's/#er tra'sa!tio' i' 1hi!h0

(A) a' i'&i)i&/al i'!/rs a' o%li-atio' +ri#aril$ (or +erso'al2 (a#il$2 or ho/sehol& +/r+oses4 a'& (@) a se!/rit$ i'terest i' !o's/#er -oo&s se!/res the o%li-atio'. (*9) ?Consumer o0li/or? #ea's a' o%li-or 1ho is a' i'&i)i&/al a'& 1ho i'!/rre& the o%li-atio' as +art o( a tra'sa!tio' e'tere& i'to +ri#aril$ (or +erso'al2 (a#il$2 or ho/sehol& +/r+oses. (*:) ?Consumer transaction? #ea's a tra'sa!tio' i' 1hi!h (i) a' i'&i)i&/al i'!/rs a' o%li-atio' +ri#aril$ (or +erso'al2 (a#il$2 or ho/sehol& +/r+oses2 (ii) a se!/rit$ i'terest se!/res the o%li-atio'2 a'& (iii) the !ollateral is hel& or a!7/ire& +ri#aril$ (or +erso'al2 (a#il$2 or ho/sehol& +/r+oses. The ter# i'!l/&es !o's/#er--oo&s tra'sa!tio's. (*;) ?Continuation statement? #ea's a' a#e'&#e't o( a (i'a'!i'- state#e't 1hi!h0 (A) i&e'ti(ies2 %$ its (ile '/#%er2 the i'itial (i'a'!i'- state#e't to 1hi!h it relates4 a'& (@) i'&i!ates that it is a !o'ti'/atio' state#e't (or2 or that it is (ile& to !o'ti'/e the e((e!ti)e'ess o(2 the i&e'ti(ie& (i'a'!i'- state#e't. (*<) ?3e0tor? #ea's0 (A) a +erso' ha)i'- a' i'terest2 other tha' a se!/rit$ i'terest or other lie'2 i' the !ollateral2 1hether or 'ot the +erso' is a' o%li-or4 (@) a seller o( a!!o/'ts2 !hattel +a+er2 +a$#e't i'ta'-i%les2 or +ro#issor$ 'otes4 or (C) a !o'si-'ee. (*A) ?3eposit account? #ea's a &e#a'&2 ti#e2 sa)i'-s2 +ass%oo52 or si#ilar a!!o/'t #ai'tai'e& 1ith a %a'5. The ter# &oes 'ot i'!l/&e i')est#e't +ro+ert$ or a!!o/'ts e)i&e'!e& %$ a' i'str/#e't. (.0) ?3ocument? #ea's a &o!/#e't o( title or a re!ei+t o( the t$+e &es!ri%e& i' Se!tio' ;-*01(*). (.1) ?Electronic chattel paper? #ea's !hattel +a+er e)i&e'!e& %$ a re!or& or re!or&s !o'sisti'- o( i'(or#atio' store& i' a' ele!tro'i! #e&i/#. (.*) ?Encum0rance? #ea's a ri-ht2 other tha' a' o1'ershi+ i'terest2 i' real +ro+ert$. The ter# i'!l/&es #ort-a-es a'& other lie's o' real +ro+ert$. (..) ?EBuipment? #ea's -oo&s other tha' i')e'tor$2 (ar# +ro&/!ts2 or !o's/#er -oo&s. (.8) ?7arm products? #ea's -oo&s2 other tha' sta'&i'- ti#%er2 1ith res+e!t to 1hi!h the &e%tor is e'-a-e& i' a (ar#i'- o+eratio' a'& 1hi!h are0 (A) !ro+s -ro1'2 -ro1i'-2 or to %e -ro1'2 i'!l/&i'-0 (i) !ro+s +ro&/!e& o' trees2 )i'es2 a'& %/shes4 a'& (ii) a7/ati! -oo&s +ro&/!e& i' a7/a!/lt/ral o+eratio's4 (@) li)esto!52 %or' or /'%or'2 i'!l/&i'- a7/ati! -oo&s +ro&/!e& i' a7/a!/lt/ral o+eratio's4 (C) s/++lies /se& or +ro&/!e& i' a (ar#i'- o+eratio'4 or (=) +ro&/!ts o( !ro+s or li)esto!5 i' their /'#a'/(a!t/re& states. (.9) ?7armin/ operation? #ea's raisi'-2 !/lti)ati'-2 +ro+a-ati'-2 (atte'i'-2 -ra3i'-2 or a'$ other (ar#i'-2 li)esto!52 or a7/a!/lt/ral o+eratio'. (.:) ?7ile num0er? #ea's the '/#%er assi-'e& to a' i'itial (i'a'!i'- state#e't +/rs/a't to Se!tio' A-91A(a).

(.;) ?7ilin/ office? #ea's a' o((i!e &esi-'ate& i' Se!tio' A-901 as the +la!e to (ile a (i'a'!i'- state#e't. (.<) ?7ilin/-office rule? #ea's a r/le a&o+te& +/rs/a't to Se!tio' A-9*:. (.A) ?7inancin/ statement? #ea's a re!or& or re!or&s !o#+ose& o( a' i'itial (i'a'!i'state#e't a'& a'$ (ile& re!or& relati'- to the i'itial (i'a'!i'- state#e't. (80) ?7ixture filin/? #ea's the (ili'- o( a (i'a'!i'- state#e't !o)eri'- -oo&s that are or are to %e!o#e (i,t/res a'& satis($i'- Se!tio' A-90*(a) a'& (%). The ter# i'!l/&es the (ili'- o( a (i'a'!i'- state#e't !o)eri'- -oo&s o( a tra's#itti'- /tilit$ 1hi!h are or are to %e!o#e (i,t/res. (81) ?7ixtures? #ea's -oo&s that ha)e %e!o#e so relate& to +arti!/lar real +ro+ert$ that a' i'terest i' the# arises /'&er real +ro+ert$ la1. (8*) ?6eneral intan/i0le? #ea's a'$ +erso'al +ro+ert$2 i'!l/&i'- thi'-s i' a!tio'2 other tha' a!!o/'ts2 !hattel +a+er2 !o##er!ial tort !lai#s2 &e+osit a!!o/'ts2 &o!/#e'ts2 -oo&s2 i'str/#e'ts2 i')est#e't +ro+ert$2 letter-o(-!re&it ri-hts2 letters o( !re&it2 #o'e$2 a'& oil2 -as2 or other #i'erals %e(ore e,tra!tio'. The ter# i'!l/&es +a$#e't i'ta'-i%les a'& so(t1are. (8.) ?Goo& (aith? #ea's ho'est$ i' (a!t a'& the o%ser)a'!e o( reaso'a%le !o##er!ial sta'&ar&s o( (air &eali'-. (88) ?6oods? #ea's all thi'-s that are #o)a%le 1he' a se!/rit$ i'terest atta!hes. The ter# i'!l/&es (i) (i,t/res2 (ii) sta'&i'- ti#%er that is to %e !/t a'& re#o)e& /'&er a !o')e$a'!e or !o'tra!t (or sale2 (iii) the /'%or' $o/'- o( a'i#als2 (i)) !ro+s -ro1'2 -ro1i'-2 or to %e -ro1'2 e)e' i( the !ro+s are +ro&/!e& o' trees2 )i'es2 or %/shes2 a'& ()) #a'/(a!t/re& ho#es. The ter# also i'!l/&es a !o#+/ter +ro-ra# e#%e&&e& i' -oo&s a'& a'$ s/++orti'- i'(or#atio' +ro)i&e& i' !o''e!tio' 1ith a tra'sa!tio' relati'to the +ro-ra# i( (i) the +ro-ra# is asso!iate& 1ith the -oo&s i' s/!h a #a''er that it !/sto#aril$ is !o'si&ere& +art o( the -oo&s2 or (ii) %$ %e!o#i'- the o1'er o( the -oo&s2 a +erso' a!7/ires a ri-ht to /se the +ro-ra# i' !o''e!tio' 1ith the -oo&s. The ter# &oes 'ot i'!l/&e a !o#+/ter +ro-ra# e#%e&&e& i' -oo&s that !o'sist solel$ o( the #e&i/# i' 1hi!h the +ro-ra# is e#%e&&e&. The ter# also &oes 'ot i'!l/&e a!!o/'ts2 !hattel +a+er2 !o##er!ial tort !lai#s2 &e+osit a!!o/'ts2 &o!/#e'ts2 -e'eral i'ta'-i%les2 i'str/#e'ts2 i')est#e't +ro+ert$2 letter-o(-!re&it ri-hts2 letters o( !re&it2 #o'e$2 or oil2 -as2 or other #i'erals %e(ore e,tra!tio'. (89) ?6o&ernmental unit? #ea's a s/%&i)isio'2 a-e'!$2 &e+art#e't2 !o/'t$2 +arish2 #/'i!i+alit$2 or other /'it o( the -o)er'#e't o( the U'ite& States2 a State2 or a (orei-' !o/'tr$. The ter# i'!l/&es a' or-a'i3atio' ha)i'- a se+arate !or+orate e,iste'!e i( the or-a'i3atio' is eli-i%le to iss/e &e%t o' 1hi!h i'terest is e,e#+t (ro# i'!o#e ta,atio' /'&er the la1s o( the U'ite& States. (8:) ?8ealth-care-insurance recei&a0le? #ea's a' i'terest i' or !lai# /'&er a +oli!$ o( i's/ra'!e 1hi!h is a ri-ht to +a$#e't o( a #o'etar$ o%li-atio' (or health-!are -oo&s or ser)i!es +ro)i&e&. (8;) ?Instrument? #ea's a 'e-otia%le i'str/#e't or a'$ other 1riti'- that e)i&e'!es a ri-ht to the +a$#e't o( a #o'etar$ o%li-atio'2 is 'ot itsel( a se!/rit$ a-ree#e't or lease2 a'& is o( a t$+e that i' or&i'ar$ !o/rse o( %/si'ess is tra's(erre& %$ &eli)er$ 1ith a'$ 'e!essar$ i'&orse#e't or assi-'#e't. The ter# &oes 'ot i'!l/&e (i) i')est#e't

+ro+ert$2 (ii) letters o( !re&it2 or (iii) 1riti'-s that e)i&e'!e a ri-ht to +a$#e't arisi'o/t o( the /se o( a !re&it or !har-e !ar& or i'(or#atio' !o'tai'e& o' or (or /se 1ith the !ar&. (8<) ?In&entor!? #ea's -oo&s2 other tha' (ar# +ro&/!ts2 1hi!h0 (A) are lease& %$ a +erso' as lessor4 (@) are hel& %$ a +erso' (or sale or lease or to %e (/r'ishe& /'&er a !o'tra!t o( ser)i!e4 (C) are (/r'ishe& %$ a +erso' /'&er a !o'tra!t o( ser)i!e4 or (=) !o'sist o( ra1 #aterials2 1or5 i' +ro!ess2 or #aterials /se& or !o's/#e& i' a %/si'ess. (8A) ?In&estment propert!? #ea's a se!/rit$2 1hether !erti(i!ate& or /'!erti(i!ate&2 se!/rit$ e'title#e't2 se!/rities a!!o/'t2 !o##o&it$ !o'tra!t2 or !o##o&it$ a!!o/'t. (90) ?Furisdiction of or/aniAation?2 1ith res+e!t to a re-istere& or-a'i3atio'2 #ea's the 6/ris&i!tio' /'&er 1hose la1 the or-a'i3atio' is or-a'i3e&. (91) ?*etter-of-credit ri/ht? #ea's a ri-ht to +a$#e't or +er(or#a'!e /'&er a letter o( !re&it2 1hether or 'ot the %e'e(i!iar$ has &e#a'&e& or is at the ti#e e'title& to &e#a'& +a$#e't or +er(or#a'!e. The ter# &oes 'ot i'!l/&e the ri-ht o( a %e'e(i!iar$ to &e#a'& +a$#e't or +er(or#a'!e /'&er a letter o( !re&it. (9*) ?*ien creditor? #ea's0 (A) a !re&itor that has a!7/ire& a lie' o' the +ro+ert$ i')ol)e& %$ atta!h#e't2 le)$2 or the li5e4 (@) a' assi-'ee (or %e'e(it o( !re&itors (ro# the ti#e o( assi-'#e't4 (C) a tr/stee i' %a'5r/+t!$ (ro# the &ate o( the (ili'- o( the +etitio'4 or (=) a re!ei)er i' e7/it$ (ro# the ti#e o( a++oi't#e't. (9.) ?=anufactured home? #ea's a str/!t/re2 tra's+orta%le i' o'e or #ore se!tio's2 1hi!h2 i' the tra)eli'- #o&e2 is ei-ht %o&$ (eet or #ore i' 1i&th or 80 %o&$ (eet or #ore i' le'-th2 or2 1he' ere!te& o' site2 is .*0 or #ore s7/are (eet2 a'& 1hi!h is %/ilt o' a +er#a'e't !hassis a'& &esi-'e& to %e /se& as a &1elli'- 1ith or 1itho/t a +er#a'e't (o/'&atio' 1he' !o''e!te& to the re7/ire& /tilities2 a'& i'!l/&es the +l/#%i'-2 heati'-2 air-!o'&itio'i'-2 a'& ele!tri!al s$ste#s !o'tai'e& therei'. The ter# i'!l/&es a'$ str/!t/re that #eets all o( the re7/ire#e'ts o( this +ara-ra+h e,!e+t the si3e re7/ire#e'ts a'& 1ith res+e!t to 1hi!h the #a'/(a!t/rer )ol/'taril$ (iles a !erti(i!atio' re7/ire& %$ the U'ite& States Se!retar$ o( Do/si'- a'& Ur%a' =e)elo+#e't a'& !o#+lies 1ith the sta'&ar&s esta%lishe& /'&er Title 8* o( the U'ite& States Co&e. (98) ?=anufactured-home transaction? #ea's a se!/re& tra'sa!tio'0 (A) that !reates a +/r!hase-#o'e$ se!/rit$ i'terest i' a #a'/(a!t/re& ho#e2 other tha' a #a'/(a!t/re& ho#e hel& as i')e'tor$4 or (@) i' 1hi!h a #a'/(a!t/re& ho#e2 other tha' a #a'/(a!t/re& ho#e hel& as i')e'tor$2 is the +ri#ar$ !ollateral. (99) ?=ort/a/e? #ea's a !o'se's/al i'terest i' real +ro+ert$2 i'!l/&i'- (i,t/res2 1hi!h se!/res +a$#e't or +er(or#a'!e o( a' o%li-atio'. (9:) ?5e< de0tor? #ea's a +erso' that %e!o#es %o/'& as &e%tor /'&er Se!tio' A*0.(&) %$ a se!/rit$ a-ree#e't +re)io/sl$ e'tere& i'to %$ a'other +erso'. (9;) ?5e< &alue? #ea's (i) #o'e$2 (ii) #o'e$Bs 1orth i' +ro+ert$2 ser)i!es2 or 'e1 !re&it2 or (iii) release %$ a tra's(eree o( a' i'terest i' +ro+ert$ +re)io/sl$ tra's(erre& to

the tra's(eree. The ter# &oes 'ot i'!l/&e a' o%li-atio' s/%stit/te& (or a'other o%li-atio'. (9<) ?5oncash proceeds? #ea's +ro!ee&s other tha' !ash +ro!ee&s. (9A) ?40li/or? #ea's a +erso' that2 1ith res+e!t to a' o%li-atio' se!/re& %$ a se!/rit$ i'terest i' or a' a-ri!/lt/ral lie' o' the !ollateral2 (i) o1es +a$#e't or other +er(or#a'!e o( the o%li-atio'2 (ii) has +ro)i&e& +ro+ert$ other tha' the !ollateral to se!/re +a$#e't or other +er(or#a'!e o( the o%li-atio'2 or (iii) is other1ise a!!o/'ta%le i' 1hole or i' +art (or +a$#e't or other +er(or#a'!e o( the o%li-atio'. The ter# &oes 'ot i'!l/&e iss/ers or 'o#i'ate& +erso's /'&er a letter o( !re&it. (:0) ?4ri/inal de0tor?2 e,!e+t as /se& i' Se!tio' A-.10(!)2 #ea's a +erso' that2 as &e%tor2 e'tere& i'to a se!/rit$ a-ree#e't to 1hi!h a 'e1 &e%tor has %e!o#e %o/'& /'&er Se!tio' A-*0.(&). (:1) ? a!ment intan/i0le? #ea's a -e'eral i'ta'-i%le /'&er 1hi!h the a!!o/'t &e%torBs +ri'!i+al o%li-atio' is a #o'etar$ o%li-atio'. (:*) ? erson related to?2 1ith res+e!t to a' i'&i)i&/al2 #ea's0 (A) the s+o/se o( the i'&i)i&/al4 (@) a %rother2 %rother-i'-la12 sister2 or sister-i'-la1 o( the i'&i)i&/al4 (C) a' a'!estor or li'eal &es!e'&a't o( the i'&i)i&/al or the i'&i)i&/alBs s+o/se4 or (=) a'$ other relati)e2 %$ %loo& or #arria-e2 o( the i'&i)i&/al or the i'&i)i&/alBs s+o/se 1ho shares the sa#e ho#e 1ith the i'&i)i&/al. (:.) ? erson related to?2 1ith res+e!t to a' or-a'i3atio'2 #ea's0 (A) a +erso' &ire!tl$ or i'&ire!tl$ !o'trolli'-2 !o'trolle& %$2 or /'&er !o##o' !o'trol 1ith the or-a'i3atio'4 (@) a' o((i!er or &ire!tor o(2 or a +erso' +er(or#i'- si#ilar (/'!tio's 1ith res+e!t to2 the or-a'i3atio'4 (C) a' o((i!er or &ire!tor o(2 or a +erso' +er(or#i'- si#ilar (/'!tio's 1ith res+e!t to2 a +erso' &es!ri%e& i' s/%+ara-ra+h (A)4 (=) the s+o/se o( a' i'&i)i&/al &es!ri%e& i' s/%+ara-ra+h (A)2 (@)2 or (C)4 or (E) a' i'&i)i&/al 1ho is relate& %$ %loo& or #arria-e to a' i'&i)i&/al &es!ri%e& i' s/%+ara-ra+h (A)2 (@)2 (C)2 or (=) a'& shares the sa#e ho#e 1ith the i'&i)i&/al. (:8) ? roceeds?2 e,!e+t as /se& i' Se!tio' A-:0A(%)2 #ea's the (ollo1i'- +ro+ert$0 (A) 1hate)er is a!7/ire& /+o' the sale2 lease2 li!e'se2 e,!ha'-e2 or other &is+ositio' o( !ollateral4 (@) 1hate)er is !olle!te& o'2 or &istri%/te& o' a!!o/'t o(2 !ollateral4 (C) ri-hts arisi'- o/t o( !ollateral4 (=) to the e,te't o( the )al/e o( !ollateral2 !lai#s arisi'- o/t o( the loss2 'o'!o'(or#it$2 or i'ter(ere'!e 1ith the /se o(2 &e(e!ts or i'(ri'-e#e't o( ri-hts i'2 or &a#a-e to2 the !ollateral4 or (E) to the e,te't o( the )al/e o( !ollateral a'& to the e,te't +a$a%le to the &e%tor or the se!/re& +art$2 i's/ra'!e +a$a%le %$ reaso' o( the loss or 'o'!o'(or#it$ o(2 &e(e!ts or i'(ri'-e#e't o( ri-hts i'2 or &a#a-e to2 the !ollateral. (:9) ? romissor! note? #ea's a' i'str/#e't that e)i&e'!es a +ro#ise to +a$ a #o'etar$ o%li-atio'2 &oes 'ot e)i&e'!e a' or&er to +a$2 a'& &oes 'ot !o'tai' a'

a!5'o1le&-#e't %$ a %a'5 that the %a'5 has re!ei)e& (or &e+osit a s/# o( #o'e$ or (/'&s. (::) ? roposal? #ea's a re!or& a/the'ti!ate& %$ a se!/re& +art$ 1hi!h i'!l/&es the ter#s o' 1hi!h the se!/re& +art$ is 1illi'- to a!!e+t !ollateral i' (/ll or +artial satis(a!tio' o( the o%li-atio' it se!/res +/rs/a't to Se!tio's A-:*02 A-:*12 a'& A-:**. (:;) ? u0lic-finance transaction? #ea's a se!/re& tra'sa!tio' i' !o''e!tio' 1ith 1hi!h0 (A) &e%t se!/rities are iss/e&4 (@) all or a +ortio' o( the se!/rities iss/e& ha)e a' i'itial state& #at/rit$ o( at least *0 $ears4 a'& (C) the &e%tor2 o%li-or2 se!/re& +art$2 a!!o/'t &e%tor or other +erso' o%li-ate& o' !ollateral2 assi-'or or assi-'ee o( a se!/re& o%li-atio'2 or assi-'or or assi-'ee o( a se!/rit$ i'terest is a State or a -o)er'#e'tal /'it o( a State. (:<) ? ursuant to commitment?2 1ith res+e!t to a' a&)a'!e #a&e or other )al/e -i)e' %$ a se!/re& +art$2 #ea's +/rs/a't to the se!/re& +art$Bs o%li-atio'2 1hether or 'ot a s/%se7/e't e)e't o( &e(a/lt or other e)e't 'ot 1ithi' the se!/re& +art$Bs !o'trol has relie)e& or #a$ relie)e the se!/re& +art$ (ro# its o%li-atio'. (:A) ?%ecord?2 e,!e+t as /se& i' ?(or re!or&?2 ?o( re!or&?2 ?re!or& or le-al title?2 a'& ?re!or& o1'er?2 #ea's i'(or#atio' that is i's!ri%e& o' a ta'-i%le #e&i/# or 1hi!h is store& i' a' ele!tro'i! or other #e&i/# a'& is retrie)a%le i' +er!ei)a%le (or#. (;0) ?%e/istered or/aniAation? #ea's a' or-a'i3atio' or-a'i3e& solel$ /'&er the la1 o( a si'-le State or the U'ite& States a'& as to 1hi!h the State or the U'ite& States #/st #ai'tai' a +/%li! re!or& sho1i'- the or-a'i3atio' to ha)e %ee' or-a'i3e&. (;1) ?-econdar! o0li/or? #ea's a' o%li-or to the e,te't that0 (A) the o%li-orBs o%li-atio' is se!o'&ar$4 or (@) the o%li-or has a ri-ht o( re!o/rse 1ith res+e!t to a' o%li-atio' se!/re& %$ !ollateral a-ai'st the &e%tor2 a'other o%li-or2 or +ro+ert$ o( either. (;*) ?-ecured part!? #ea's0 (A) a +erso' i' 1hose (a)or a se!/rit$ i'terest is !reate& or +ro)i&e& (or /'&er a se!/rit$ a-ree#e't2 1hether or 'ot a'$ o%li-atio' to %e se!/re& is o/tsta'&i'-4 (@) a +erso' that hol&s a' a-ri!/lt/ral lie'4 (C) a !o'si-'or4 (=) a +erso' to 1hi!h a!!o/'ts2 !hattel +a+er2 +a$#e't i'ta'-i%les2 or +ro#issor$ 'otes ha)e %ee' sol&4 (E) a tr/stee2 i'&e't/re tr/stee2 a-e't2 !ollateral a-e't2 or other re+rese'tati)e i' 1hose (a)or a se!/rit$ i'terest or a-ri!/lt/ral lie' is !reate& or +ro)i&e& (or4 or (>) a +erso' that hol&s a se!/rit$ i'terest arisi'- /'&er Se!tio' *-8012 *-9092 *-;11(.)2 *A-90<(9)2 8-*102 or 9-11<. (;.) ?-ecurit! a/reement? #ea's a' a-ree#e't that !reates or +ro)i&es (or a se!/rit$ i'terest. (;8) ?-end?2 i' !o''e!tio' 1ith a re!or& or 'oti(i!atio'2 #ea's0 (A) to &e+osit i' the #ail2 &eli)er (or tra's#issio'2 or tra's#it %$ a'$ other /s/al #ea's o( !o##/'i!atio'2 1ith +osta-e or !ost o( tra's#issio' +ro)i&e& (or2 a&&resse& to a'$ a&&ress reaso'a%le /'&er the !ir!/#sta'!es4 or

(@) to !a/se the re!or& or 'oti(i!atio' to %e re!ei)e& 1ithi' the ti#e that it 1o/l& ha)e %ee' re!ei)e& i( +ro+erl$ se't /'&er s/%+ara-ra+h (A). (;9) ?-oft<are? #ea's a !o#+/ter +ro-ra# a'& a'$ s/++orti'- i'(or#atio' +ro)i&e& i' !o''e!tio' 1ith a tra'sa!tio' relati'- to the +ro-ra#. The ter# &oes 'ot i'!l/&e a !o#+/ter +ro-ra# that is i'!l/&e& i' the &e(i'itio' o( -oo&s. (;:) ?-tate? #ea's a State o( the U'ite& States2 the =istri!t o( Col/#%ia2 P/erto Ri!o2 the U'ite& States Vir-i' Isla'&s2 or a'$ territor$ or i's/lar +ossessio' s/%6e!t to the 6/ris&i!tio' o( the U'ite& States. (;;) ?-upportin/ o0li/ation? #ea's a letter-o(-!re&it ri-ht or se!o'&ar$ o%li-atio' that s/++orts the +a$#e't or +er(or#a'!e o( a' a!!o/'t2 !hattel +a+er2 a &o!/#e't2 a -e'eral i'ta'-i%le2 a' i'str/#e't2 or i')est#e't +ro+ert$. (;<) ?Tan/i0le chattel paper? #ea's !hattel +a+er e)i&e'!e& %$ a re!or& or re!or&s !o'sisti'- o( i'(or#atio' that is i's!ri%e& o' a ta'-i%le #e&i/#. (;A) ?Termination statement? #ea's a' a#e'&#e't o( a (i'a'!i'- state#e't 1hi!h0 (A) i&e'ti(ies2 %$ its (ile '/#%er2 the i'itial (i'a'!i'- state#e't to 1hi!h it relates4 a'& (@) i'&i!ates either that it is a ter#i'atio' state#e't or that the i&e'ti(ie& (i'a'!i'state#e't is 'o lo'-er e((e!ti)e. (<0) ?Transmittin/ utilit!? #ea's a +erso' +ri#aril$ e'-a-e& i' the %/si'ess o(0 (A) o+erati'- a railroa&2 s/%1a$2 street rail1a$2 or trolle$ %/s4 (@) tra's#itti'- !o##/'i!atio's ele!tri!all$2 ele!tro#a-'eti!all$2 or %$ li-ht4 (C) tra's#itti'- -oo&s %$ +i+eli'e or se1er4 or (=) tra's#itti'- or +ro&/!i'- a'& tra's#itti'- ele!tri!it$2 stea#2 -as2 or 1ater. I0J #3efinitions in other articles.' The (ollo1i'- &e(i'itio's i' other arti!les a++l$ to this arti!le0 ?A++li!a't? Se!tio' 9-10*. ?@e'e(i!iar$? Se!tio' 9-10*. ?@ro5er? Se!tio' <-10*. ?Certi(i!ate& se!/rit$? Se!tio' <-10*. ?Che!5? Se!tio' .-108. ?Cleari'- !or+oratio'? Se!tio' <-10*. ?Co'tra!t (or sale? Se!tio' *-10:. ?C/sto#er? Se!tio' 8-108. ?E'title#e't hol&er? Se!tio' <-10*. ?>i'a'!ial asset? Se!tio' <-10*. ?Dol&er i' &/e !o/rse? Se!tio' .-.0*. ?Iss/er? (1ith res+e!t to a letter o( !re&it or letter-o(-!re&it ri-ht) Se!tio' 9-10*. ?Iss/er? (1ith res+e!t to a se!/rit$) Se!tio' <-*01. ?Iss/er? (1ith res+e!t to &o!/#e'ts o( title) ?Lease? Se!tio' *A-10.. ?Lease a-ree#e't? Se!tio' *A-10.. ?Lease !o'tra!t? Se!tio' *A-10.. ?Leasehol& i'terest? Se!tio' *A-10.. ?Lessee? Se!tio' *A-10.. ?Lessee i' or&i'ar$ !o/rse o( %/si'ess? Se!tio' *A-10.. Se!tio' ;-10*.

?Lessor? Se!tio' *A-10.. ?LessorBs resi&/al i'terest? Se!tio' *A-10.. ?Letter o( !re&it? Se!tio' 9-10*. ?Eer!ha't? Se!tio' *-108. ?Ne-otia%le i'str/#e't? Se!tio' .-108. ?No#i'ate& +erso'? Se!tio' 9-10*. ?Note? Se!tio' .-108. ?Pro!ee&s o( a letter o( !re&it? Se!tio' 9-118. ?Pro)e? Se!tio' .-10.. ?Sale? Se!tio' *-10:. ?Se!/rities a!!o/'t? Se!tio' <-901. ?Se!/rities i'ter#e&iar$? Se!tio' <-10*. ?Se!/rit$? Se!tio' <-10*. ?Se!/rit$ !erti(i!ate? Se!tio' <-10*. ?Se!/rit$ e'title#e't? Se!tio' <-10*. ?U'!erti(i!ate& se!/rit$? Se!tio' <-10*. IcJ #.rticle 1 definitions and principles.' Arti!le 1 !o'tai's -e'eral &e(i'itio's a'& +ri'!i+les o( !o'str/!tio' a'& i'ter+retatio' a++li!a%le thro/-ho/t this arti!le. 9-10+. ,-"C )S%-.!(%/ S%C-"#T/ #(T%"%ST0 ),,$#C)T#!( !' ,)/.%(TS0 1-"D%( !' %ST)1$#S #(G. IaJ #3efinitions.' I' this se!tio'0 (1) ?+/r!hase-#o'e$ !ollateral? #ea's -oo&s or so(t1are that se!/res a +/r!hase#o'e$ o%li-atio' i'!/rre& 1ith res+e!t to that !ollateral4 a'& (*) ?+/r!hase-#o'e$ o%li-atio'? #ea's a' o%li-atio' o( a' o%li-or i'!/rre& as all or +art o( the +ri!e o( the !ollateral or (or )al/e -i)e' to e'a%le the &e%tor to a!7/ire ri-hts i' or the /se o( the !ollateral i( the )al/e is i' (a!t so /se&. I0J # urchase-mone! securit! interest in /oods.' A se!/rit$ i'terest i' -oo&s is a +/r!hase-#o'e$ se!/rit$ i'terest0 (1) to the e,te't that the -oo&s are +/r!hase-#o'e$ !ollateral 1ith res+e!t to that se!/rit$ i'terest4 (*) i( the se!/rit$ i'terest is i' i')e'tor$ that is or 1as +/r!hase-#o'e$ !ollateral2 also to the e,te't that the se!/rit$ i'terest se!/res a +/r!hase- #o'e$ o%li-atio' i'!/rre& 1ith res+e!t to other i')e'tor$ i' 1hi!h the se!/re& +art$ hol&s or hel& a +/r!hase#o'e$ se!/rit$ i'terest4 a'& (.) also to the e,te't that the se!/rit$ i'terest se!/res a +/r!hase-#o'e$ o%li-atio' i'!/rre& 1ith res+e!t to so(t1are i' 1hi!h the se!/re& +art$ hol&s or hel& a +/r!hase#o'e$ se!/rit$ i'terest. IcJ # urchase-mone! securit! interest in soft<are.' A se!/rit$ i'terest i' so(t1are is a +/r!hase-#o'e$ se!/rit$ i'terest to the e,te't that the se!/rit$ i'terest also se!/res a +/r!hase-#o'e$ o%li-atio' i'!/rre& 1ith res+e!t to -oo&s i' 1hi!h the se!/re& +art$ hol&s or hel& a +/r!hase-#o'e$ se!/rit$ i'terest i(0

(1) the &e%tor a!7/ire& its i'terest i' the so(t1are i' a' i'te-rate& tra'sa!tio' i' 1hi!h it a!7/ire& a' i'terest i' the -oo&s4 a'& (*) the &e%tor a!7/ire& its i'terest i' the so(t1are (or the +ri'!i+al +/r+ose o( /si'- the so(t1are i' the -oo&s. IdJ #Consi/nor;s in&entor! purchase-mone! securit! interest.' The se!/rit$ i'terest o( a !o'si-'or i' -oo&s that are the s/%6e!t o( a !o'si-'#e't is a +/r!hase-#o'e$ se!/rit$ i'terest i' i')e'tor$. IeJ #.pplication of pa!ment in non-consumer-/oods transaction.' I' a tra'sa!tio' other tha' a !o's/#er--oo&s tra'sa!tio'2 i( the e,te't to 1hi!h a se!/rit$ i'terest is a +/r!hase-#o'e$ se!/rit$ i'terest &e+e'&s o' the a++li!atio' o( a +a$#e't to a +arti!/lar o%li-atio'2 the +a$#e't #/st %e a++lie&0 (1) i' a!!or&a'!e 1ith a'$ reaso'a%le #etho& o( a++li!atio' to 1hi!h the +arties a-ree4 (*) i' the a%se'!e o( the +artiesB a-ree#e't to a reaso'a%le #etho&2 i' a!!or&a'!e 1ith a'$ i'te'tio' o( the o%li-or #a'i(este& at or %e(ore the ti#e o( +a$#e't4 or (.) i' the a%se'!e o( a' a-ree#e't to a reaso'a%le #etho& a'& a ti#el$ #a'i(estatio' o( the o%li-orBs i'te'tio'2 i' the (ollo1i'- or&er0 (A) to o%li-atio's that are 'ot se!/re&4 a'& (@) i( #ore tha' o'e o%li-atio' is se!/re&2 to o%li-atio's se!/re& %$ +/r!hase-#o'e$ se!/rit$ i'terests i' the or&er i' 1hi!h those o%li-atio's 1ere i'!/rre&. IfJ #5o loss of status of purchase-mone! securit! interest in non-consumer/oods transaction.' I' a tra'sa!tio' other tha' a !o's/#er--oo&s tra'sa!tio'2 a +/r!hase-#o'e$ se!/rit$ i'terest &oes 'ot lose its stat/s as s/!h2 e)e' i(0 (1) the +/r!hase-#o'e$ !ollateral also se!/res a' o%li-atio' that is 'ot a +/r!hase#o'e$ o%li-atio'4 (*) !ollateral that is 'ot +/r!hase-#o'e$ !ollateral also se!/res the +/r!hase-#o'e$ o%li-atio'4 or (.) the +/r!hase-#o'e$ o%li-atio' has %ee' re'e1e&2 re(i'a'!e&2 !o'soli&ate&2 or restr/!t/re&. I/J #"urden of proof in non-consumer-/oods transaction.' I' a tra'sa!tio' other tha' a !o's/#er--oo&s tra'sa!tio'2 a se!/re& +art$ !lai#i'- a +/r!hase- #o'e$ se!/rit$ i'terest has the %/r&e' o( esta%lishi'- the e,te't to 1hi!h the se!/rit$ i'terest is a +/r!hase-#o'e$ se!/rit$ i'terest. IhJ #5on-consumer-/oods transactions+ no inference.' The li#itatio' o( the r/les i' s/%se!tio's (e)2 (()2 a'& (-) to tra'sa!tio's other tha' !o's/#er--oo&s tra'sa!tio's is i'te'&e& to lea)e to the !o/rt the &eter#i'atio' o( the +ro+er r/les i' !o's/#er--oo&s tra'sa!tio's. The !o/rt #a$ 'ot i'(er (ro# that li#itatio' the 'at/re o( the +ro+er r/le i' !o's/#er--oo&s tra'sa!tio's a'& #a$ !o'ti'/e to a++l$ esta%lishe& a++roa!hes. 9-102. C!(T"!$ !' D%,!S#T )CC!-(T. IaJ #%eBuirements for control.' A se!/re& +art$ has !o'trol o( a &e+osit a!!o/'t i(0 (1) the se!/re& +art$ is the %a'5 1ith 1hi!h the &e+osit a!!o/'t is #ai'tai'e&4

(*) the &e%tor2 se!/re& +art$2 a'& %a'5 ha)e a-ree& i' a' a/the'ti!ate& re!or& that the %a'5 1ill !o#+l$ 1ith i'str/!tio's ori-i'ate& %$ the se!/re& +art$ &ire!ti'- &is+ositio' o( the (/'&s i' the &e+osit a!!o/'t 1itho/t (/rther !o'se't %$ the &e%tor4 or (.) the se!/re& +art$ %e!o#es the %a'5Bs !/sto#er 1ith res+e!t to the &e+osit a!!o/'t. I0J #3e0tor;s ri/ht to direct disposition.' A se!/re& +art$ that has satis(ie& s/%se!tio' (a) has !o'trol2 e)e' i( the &e%tor retai's the ri-ht to &ire!t the &is+ositio' o( (/'&s (ro# the &e+osit a!!o/'t. 9-103. C!(T"!$ !' %$%CT"!(#C C )TT%$ ,),%". A se!/re& +art$ has !o'trol o( ele!tro'i! !hattel +a+er i( the re!or& or re!or&s !o#+risi'- the !hattel +a+er are !reate&2 store&2 a'& assi-'e& i' s/!h a #a''er that0 (1) a si'-le a/thoritati)e !o+$ o( the re!or& or re!or&s e,ists 1hi!h is /'i7/e2 i&e'ti(ia%le a'&2 e,!e+t as other1ise +ro)i&e& i' +ara-ra+hs (8)2 /'altera%le4 (*) the a/thoritati)e !o+$ i&e'ti(ies the se!/re& +art$ as the assi-'ee o( the re!or& or re!or&s4 (.) the a/thoritati)e !o+$ is !o##/'i!ate& to a'& #ai'tai'e& %$ the se!/re& +art$ or its &esi-'ate& !/sto&ia'4 (8) !o+ies or re)isio's that a&& or !ha'-e a' i&e'ti(ie& assi-'ee o( the a/thoritati)e !o+$ !a' %e #a&e o'l$ 1ith the +arti!i+atio' o( the se!/re& +art$4 (9) ea!h !o+$ o( the a/thoritati)e !o+$ a'& a'$ !o+$ o( a !o+$ is rea&il$ i&e'ti(ia%le as a !o+$ that is 'ot the a/thoritati)e !o+$4 a'& (:) a'$ re)isio' o( the a/thoritati)e !o+$ is rea&il$ i&e'ti(ia%le as a' a/thori3e& or /'a/thori3e& re)isio'. 9-104. C!(T"!$ !' #(5%ST.%(T ,"!,%"T/. IaJ #Control under -ection 8-1:,.' A +erso' has !o'trol o( a !erti(i!ate& se!/rit$2 /'!erti(i!ate& se!/rit$2 or se!/rit$ e'title#e't as +ro)i&e& i' Se!tio' <-10:. I0J #Control of commodit! contract.' A se!/re& +art$ has !o'trol o( a !o##o&it$ !o'tra!t i(0 (1) the se!/re& +art$ is the !o##o&it$ i'ter#e&iar$ 1ith 1hi!h the !o##o&it$ !o'tra!t is !arrie&4 or (*) the !o##o&it$ !/sto#er2 se!/re& +art$2 a'& !o##o&it$ i'ter#e&iar$ ha)e a-ree& that the !o##o&it$ i'ter#e&iar$ 1ill a++l$ a'$ )al/e &istri%/te& o' a!!o/'t o( the !o##o&it$ !o'tra!t as &ire!te& %$ the se!/re& +art$ 1itho/t (/rther !o'se't %$ the !o##o&it$ !/sto#er. IcJ #Effect of control of securities account or commodit! account.' A se!/re& +art$ ha)i'- !o'trol o( all se!/rit$ e'title#e'ts or !o##o&it$ !o'tra!ts !arrie& i' a se!/rities a!!o/'t or !o##o&it$ a!!o/'t has !o'trol o)er the se!/rities a!!o/'t or !o##o&it$ a!!o/'t. 9-106. C!(T"!$ !' $%TT%"-!'-C"%D#T "#G T. A se!/re& +art$ has !o'trol o( a letter-o(-!re&it ri-ht to the e,te't o( a'$ ri-ht to +a$#e't or +er(or#a'!e %$ the iss/er or a'$ 'o#i'ate& +erso' i( the iss/er or 'o#i'ate& +erso' has !o'se'te& to a' assi-'#e't o( +ro!ee&s o( the letter o( !re&it /'&er Se!tio' 9-118(!) or other1ise a++li!a%le la1 or +ra!ti!e. (9)2 a'& (:)2

 9-107. S-''#C#%(C/ !' D%SC"#,T#!(. IaJ #-ufficienc! of description.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio's (!)2 (&)2 a'& (e)2 a &es!ri+tio' o( +erso'al or real +ro+ert$ is s/((i!ie't2 1hether or 'ot it is s+e!i(i!2 i( it reaso'a%l$ i&e'ti(ies 1hat is &es!ri%e&. I0J #Examples of reasona0le identification.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&)2 a &es!ri+tio' o( !ollateral reaso'a%l$ i&e'ti(ies the !ollateral i( it i&e'ti(ies the !ollateral %$0 (1) s+e!i(i! listi'-4 (*) !ate-or$4 (.) e,!e+t as other1ise +ro)i&e& i' s/%se!tio' (e)2 a t$+e o( !ollateral &e(i'e& i' the U'i(or# Co##er!ial Co&e"4 (8) 7/a'tit$4 (9) !o#+/tatio'al or allo!atio'al (or#/la or +ro!e&/re4 or (:) e,!e+t as other1ise +ro)i&e& i' s/%se!tio' (!)2 a'$ other #etho&2 i( the i&e'tit$ o( the !ollateral is o%6e!ti)el$ &eter#i'a%le. IcJ #-uper/eneric description not sufficient.' A &es!ri+tio' o( !ollateral as ?all the &e%torBs assets? or ?all the &e%torBs +erso'al +ro+ert$? or /si'- 1or&s o( si#ilar i#+ort &oes 'ot reaso'a%l$ i&e'ti($ the !ollateral. IdJ #In&estment propert!.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (e)2 a &es!ri+tio' o( a se!/rit$ e'title#e't2 se!/rities a!!o/'t2 or !o##o&it$ a!!o/'t is s/((i!ie't i( it &es!ri%es0 (1) the !ollateral %$ those ter#s or as i')est#e't +ro+ert$4 or (*) the /'&erl$i'- (i'a'!ial asset or !o##o&it$ !o'tra!t. IeJ #When description 0! t!pe insufficient.' A &es!ri+tio' o'l$ %$ t$+e o( !ollateral &e(i'e& i' the U'i(or# Co##er!ial Co&e" is a' i's/((i!ie't &es!ri+tio' o(0 (1) a !o##er!ial tort !lai#4 or (*) i' a !o's/#er tra'sa!tio'2 !o's/#er -oo&s2 a se!/rit$ e'title#e't2 a se!/rities a!!o/'t2 or a !o##o&it$ a!!o/'t. [Subpart &. )pplicabilit8 of )rticle] 9-109. SC!,%. IaJ #6eneral scope of article.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio's (!) a'& (&)2 this arti!le a++lies to0 (1) a tra'sa!tio'2 re-ar&less o( its (or#2 that !reates a se!/rit$ i'terest i' +erso'al +ro+ert$ or (i,t/res %$ !o'tra!t4 (*) a' a-ri!/lt/ral lie'4 (.) a sale o( a!!o/'ts2 !hattel +a+er2 +a$#e't i'ta'-i%les2 or +ro#issor$ 'otes4 (8) a !o'si-'#e't4 (9) a se!/rit$ i'terest arisi'- /'&er Se!tio' *-8012 *-9092 *-;11(.)2 or *A-90<(9)2 as +ro)i&e& i' Se!tio' A-1104 a'& (:) a se!/rit$ i'terest arisi'- /'&er Se!tio' 8-*10 or 9-11<. I0J #-ecurit! interest in secured o0li/ation.'

The a++li!atio' o( this arti!le to a se!/rit$ i'terest i' a se!/re& o%li-atio' is 'ot a((e!te& %$ the (a!t that the o%li-atio' is itsel( se!/re& %$ a tra'sa!tio' or i'terest to 1hi!h this arti!le &oes 'ot a++l$. IcJ #Extent to <hich article does not appl!.' This arti!le &oes 'ot a++l$ to the e,te't that0 (1) a stat/te2 re-/latio'2 or treat$ o( the U'ite& States +ree#+ts this arti!le4 (*) a'other stat/te o( this State e,+ressl$ -o)er's the !reatio'2 +er(e!tio'2 +riorit$2 or e'(or!e#e't o( a se!/rit$ i'terest !reate& %$ this State or a -o)er'#e'tal /'it o( this State4 (.) a stat/te o( a'other State2 a (orei-' !o/'tr$2 or a -o)er'#e'tal /'it o( a'other State or a (orei-' !o/'tr$2 other tha' a stat/te -e'erall$ a++li!a%le to se!/rit$ i'terests2 e,+ressl$ -o)er's !reatio'2 +er(e!tio'2 +riorit$2 or e'(or!e#e't o( a se!/rit$ i'terest !reate& %$ the State2 !o/'tr$2 or -o)er'#e'tal /'it4 or (8) the ri-hts o( a tra's(eree %e'e(i!iar$ or 'o#i'ate& +erso' /'&er a letter o( !re&it are i'&e+e'&e't a'& s/+erior /'&er Se!tio' 9-118. IdJ #Inapplica0ilit! of article.' This arti!le &oes 'ot a++l$ to0 (1) a la'&lor&Bs lie'2 other tha' a' a-ri!/lt/ral lie'4 (*) a lie'2 other tha' a' a-ri!/lt/ral lie'2 -i)e' %$ stat/te or other r/le o( la1 (or ser)i!es or #aterials2 %/t Se!tio' A-... a++lies 1ith res+e!t to +riorit$ o( the lie'4 (.) a' assi-'#e't o( a !lai# (or 1a-es2 salar$2 or other !o#+e'satio' o( a' e#+lo$ee4 (8) a sale o( a!!o/'ts2 !hattel +a+er2 +a$#e't i'ta'-i%les2 or +ro#issor$ 'otes as +art o( a sale o( the %/si'ess o/t o( 1hi!h the$ arose4 (9) a' assi-'#e't o( a!!o/'ts2 !hattel +a+er2 +a$#e't i'ta'-i%les2 or +ro#issor$ 'otes 1hi!h is (or the +/r+ose o( !olle!tio' o'l$4 (:) a' assi-'#e't o( a ri-ht to +a$#e't /'&er a !o'tra!t to a' assi-'ee that is also o%li-ate& to +er(or# /'&er the !o'tra!t4 (;) a' assi-'#e't o( a si'-le a!!o/'t2 +a$#e't i'ta'-i%le2 or +ro#issor$ 'ote to a' assi-'ee i' (/ll or +artial satis(a!tio' o( a +ree,isti'- i'&e%te&'ess4 (<) a tra's(er o( a' i'terest i' or a' assi-'#e't o( a !lai# /'&er a +oli!$ o( i's/ra'!e2 other tha' a' assi-'#e't %$ or to a health-!are +ro)i&er o( a health-!are-i's/ra'!e re!ei)a%le a'& a'$ s/%se7/e't assi-'#e't o( the ri-ht to +a$#e't2 %/t Se!tio's A-.19 a'& A-.** a++l$ 1ith res+e!t to +ro!ee&s a'& +riorities i' +ro!ee&s4 (A) a' assi-'#e't o( a ri-ht re+rese'te& %$ a 6/&-#e't2 other tha' a 6/&-#e't ta5e' o' a ri-ht to +a$#e't that 1as !ollateral4 (10) a ri-ht o( re!o/+#e't or set-o((2 %/t0 (A) Se!tio' A-.80 a++lies 1ith res+e!t to the e((e!ti)e'ess o( ri-hts o( re!o/+#e't or set-o(( a-ai'st &e+osit a!!o/'ts4 a'& (@) Se!tio' A-808 a++lies 1ith res+e!t to &e(e'ses or !lai#s o( a' a!!o/'t &e%tor4 (11) the !reatio' or tra's(er o( a' i'terest i' or lie' o' real +ro+ert$2 i'!l/&i'- a lease or re'ts there/'&er2 e,!e+t to the e,te't that +ro)isio' is #a&e (or0 (A) lie's o' real +ro+ert$ i' Se!tio's A-*0. a'& A-.0<4 (@) (i,t/res i' Se!tio' A-..84 (C) (i,t/re (ili'-s i' Se!tio's A-9012 A-90*2 A-91*2 A-91:2 a'& A-91A4 a'&

(=) se!/rit$ a-ree#e'ts !o)eri'- +erso'al a'& real +ro+ert$ i' Se!tio' A-:084 (1*) a' assi-'#e't o( a !lai# arisi'- i' tort2 other tha' a !o##er!ial tort !lai#2 %/t Se!tio's A-.19 a'& A-.** a++l$ 1ith res+e!t to +ro!ee&s a'& +riorities i' +ro!ee&s4 or (1.) a' assi-'#e't o( a &e+osit a!!o/'t i' a !o's/#er tra'sa!tio'2 %/t Se!tio's A-.19 a'& A-.** a++l$ 1ith res+e!t to +ro!ee&s a'& +riorities i' +ro!ee&s. 9-110. S%C-"#T/ #(T%"%STS )"#S#(G -(D%" )"T#C$% & !" &). A se!/rit$ i'terest arisi'- /'&er Se!tio' *-8012 *-9092 *-;11(.)2 or *A-90<(9) is s/%6e!t to this arti!le. Do1e)er2 /'til the &e%tor o%tai's +ossessio' o( the -oo&s0 (1) the se!/rit$ i'terest is e'(or!ea%le2 e)e' i( Se!tio' A-*0.(%)(.) has 'ot %ee' satis(ie&4 (*) (ili'- is 'ot re7/ire& to +er(e!t the se!/rit$ i'terest4 (.) the ri-hts o( the se!/re& +art$ a(ter &e(a/lt %$ the &e%tor are -o)er'e& %$ Arti!le * or *A4 a'& (8) the se!/rit$ i'terest has +riorit$ o)er a !o'(li!ti'- se!/rit$ i'terest !reate& %$ the &e%tor. Part *. E((e!ti)e'ess o( Se!/rit$ A-ree#e't4 Atta!h#e't o( Se!/rit$ I'terest4 Ri-hts o( Parties to Se!/rit$ A-ree#e't [Subpart 1. %ffecti9eness and )ttach:ent] 9-&01. G%(%")$ %''%CT#5%(%SS !' S%C-"#T/ )G"%%.%(T. IaJ #6eneral effecti&eness.' E,!e+t as other1ise +ro)i&e& i' the U'i(or# Co##er!ial Co&e"2 a se!/rit$ a-ree#e't is e((e!ti)e a!!or&i'- to its ter#s %et1ee' the +arties2 a-ai'st +/r!hasers o( the !ollateral2 a'& a-ai'st !re&itors. I0J #.pplica0le consumer la<s and other la<.' A tra'sa!tio' s/%6e!t to this arti!le is s/%6e!t to a'$ a++li!a%le r/le o( la1 1hi!h esta%lishes a &i((ere't r/le (or !o's/#ers a'& i'sert re(ere'!e to (i) a'$ other stat/te or re-/latio' that re-/lates the rates2 !har-es2 a-ree#e'ts2 a'& +ra!ti!es (or loa's2 !re&it sales2 or other e,te'sio's o( !re&it a'& (ii) a'$ !o's/#er-+rote!tio' stat/te or re-/latio'". IcJ #4ther applica0le la< controls.' I' !ase o( !o'(li!t %et1ee' this arti!le a'& a r/le o( la12 stat/te2 or re-/latio' &es!ri%e& i' s/%se!tio' (%)2 the r/le o( la12 stat/te2 or re-/latio' !o'trols. >ail/re to !o#+l$ 1ith a stat/te or re-/latio' &es!ri%e& i' s/%se!tio' (%) has o'l$ the e((e!t the stat/te or re-/latio' s+e!i(ies. IdJ #7urther deference to other applica0le la<.' This arti!le &oes 'ot0 (1) )ali&ate a'$ rate2 !har-e2 a-ree#e't2 or +ra!ti!e that )iolates a r/le o( la12 stat/te2 or re-/latio' &es!ri%e& i' s/%se!tio' (%)4 or (*) e,te'& the a++li!atio' o( the r/le o( la12 stat/te2 or re-/latio' to a tra'sa!tio' 'ot other1ise s/%6e!t to it. 9-&0&. T#T$% T! C!$$)T%")$ #..)T%"#)$. E,!e+t as other1ise +ro)i&e& 1ith res+e!t to !o'si-'#e'ts or sales o( a!!o/'ts2 !hattel +a+er2 +a$#e't i'ta'-i%les2 or +ro#issor$ 'otes2 the +ro)isio's o( this arti!le 1ith

re-ar& to ri-hts a'& o%li-atio's a++l$ 1hether title to !ollateral is i' the se!/re& +art$ or the &e%tor. 9-&0+. )TT)C .%(T )(D %('!"C%)1#$#T/ !' S%C-"#T/ #(T%"%ST0 ,"!C%%DS0 S-,,!"T#(G !1$#G)T#!(S0 '!".)$ "%;-#S#T%S. IaJ #.ttachment.' A se!/rit$ i'terest atta!hes to !ollateral 1he' it %e!o#es e'(or!ea%le a-ai'st the &e%tor 1ith res+e!t to the !ollateral2 /'less a' a-ree#e't e,+ressl$ +ost+o'es the ti#e o( atta!h#e't. I0J #Enforcea0ilit!.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio's (!) thro/-h (i)2 a se!/rit$ i'terest is e'(or!ea%le a-ai'st the &e%tor a'& thir& +arties 1ith res+e!t to the !ollateral o'l$ i( 0 (1) )al/e has %ee' -i)e'4 (*) the &e%tor has ri-hts i' the !ollateral or the +o1er to tra's(er ri-hts i' the !ollateral to a se!/re& +art$4 a'& (.) o'e o( the (ollo1i'- !o'&itio's is #et0 (A) the &e%tor has a/the'ti!ate& a se!/rit$ a-ree#e't that +ro)i&es a &es!ri+tio' o( the !ollateral a'&2 i( the se!/rit$ i'terest !o)ers ti#%er to %e !/t2 a &es!ri+tio' o( the la'& !o'!er'e&4 (@) the !ollateral is 'ot a !erti(i!ate& se!/rit$ a'& is i' the +ossessio' o( the se!/re& +art$ /'&er Se!tio' A-.1. +/rs/a't to the &e%torBs se!/rit$ a-ree#e't4 (C) the !ollateral is a !erti(i!ate& se!/rit$ i' re-istere& (or# a'& the se!/rit$ !erti(i!ate has %ee' &eli)ere& to the se!/re& +art$ /'&er Se!tio' <-.01 +/rs/a't to the &e%torBs se!/rit$ a-ree#e't4 or (=) the !ollateral is &e+osit a!!o/'ts2 ele!tro'i! !hattel +a+er2 i')est#e't +ro+ert$2 or letter-o(-!re&it ri-hts2 a'& the se!/re& +art$ has !o'trol /'&er Se!tio' A-1082 A-1092 A10:2 or A-10; +/rs/a't to the &e%torBs se!/rit$ a-ree#e't. IcJ #4ther 9CC pro&isions.' S/%se!tio' (%) is s/%6e!t to Se!tio' 8-*10 o' the se!/rit$ i'terest o( a !olle!ti'- %a'52 Se!tio' 9-11< o' the se!/rit$ i'terest o( a letter-o(-!re&it iss/er or 'o#i'ate& +erso'2 Se!tio' A-110 o' a se!/rit$ i'terest arisi'- /'&er Arti!le * or *A2 a'& Se!tio' A-*0: o' se!/rit$ i'terests i' i')est#e't +ro+ert$. IdJ #When person 0ecomes 0ound 0! another person;s securit! a/reement.' A +erso' %e!o#es %o/'& as &e%tor %$ a se!/rit$ a-ree#e't e'tere& i'to %$ a'other +erso' i(2 %$ o+eratio' o( la1 other tha' this arti!le or %$ !o'tra!t0 (1) the se!/rit$ a-ree#e't %e!o#es e((e!ti)e to !reate a se!/rit$ i'terest i' the +erso'Bs +ro+ert$4 or (*) the +erso' %e!o#es -e'erall$ o%li-ate& (or the o%li-atio's o( the other +erso'2 i'!l/&i'- the o%li-atio' se!/re& /'&er the se!/rit$ a-ree#e't2 a'& a!7/ires or s/!!ee&s to all or s/%sta'tiall$ all o( the assets o( the other +erso'. IeJ #Effect of ne< de0tor 0ecomin/ 0ound.' I( a 'e1 &e%tor %e!o#es %o/'& as &e%tor %$ a se!/rit$ a-ree#e't e'tere& i'to %$ a'other +erso'0

(1) the a-ree#e't satis(ies s/%se!tio' (%)(.) 1ith res+e!t to e,isti'- or a(ter-a!7/ire& +ro+ert$ o( the 'e1 &e%tor to the e,te't the +ro+ert$ is &es!ri%e& i' the a-ree#e't4 a'& (*) a'other a-ree#e't is 'ot 'e!essar$ to #a5e a se!/rit$ i'terest i' the +ro+ert$ e'(or!ea%le. IfJ # roceeds and supportin/ o0li/ations.' The atta!h#e't o( a se!/rit$ i'terest i' !ollateral -i)es the se!/re& +art$ the ri-hts to +ro!ee&s +ro)i&e& %$ Se!tio' A-.19 a'& is also atta!h#e't o( a se!/rit$ i'terest i' a s/++orti'- o%li-atio' (or the !ollateral. I/J #*ien securin/ ri/ht to pa!ment.' The atta!h#e't o( a se!/rit$ i'terest i' a ri-ht to +a$#e't or +er(or#a'!e se!/re& %$ a se!/rit$ i'terest or other lie' o' +erso'al or real +ro+ert$ is also atta!h#e't o( a se!/rit$ i'terest i' the se!/rit$ i'terest2 #ort-a-e2 or other lie'. IhJ #-ecurit! entitlement carried in securities account.' The atta!h#e't o( a se!/rit$ i'terest i' a se!/rities a!!o/'t is also atta!h#e't o( a se!/rit$ i'terest i' the se!/rit$ e'title#e'ts !arrie& i' the se!/rities a!!o/'t. IiJ #Commodit! contracts carried in commodit! account.' The atta!h#e't o( a se!/rit$ i'terest i' a !o##o&it$ a!!o/'t is also atta!h#e't o( a se!/rit$ i'terest i' the !o##o&it$ !o'tra!ts !arrie& i' the !o##o&it$ a!!o/'t. 9-&02. )'T%"-)C;-#"%D ,"!,%"T/0 '-T-"% )D5)(C%S. IaJ #.fter-acBuired collateral.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (%)2 a se!/rit$ a-ree#e't #a$ !reate or +ro)i&e (or a se!/rit$ i'terest i' a(ter-a!7/ire& !ollateral. I0J #When after-acBuired propert! clause not effecti&e.' A se!/rit$ i'terest &oes 'ot atta!h /'&er a ter# !o'stit/ti'- a' a(ter-a!7/ire& +ro+ert$ !la/se to0 (1) !o's/#er -oo&s2 other tha' a' a!!essio' 1he' -i)e' as a&&itio'al se!/rit$2 /'less the &e%tor a!7/ires ri-hts i' the# 1ithi' 10 &a$s a(ter the se!/re& +art$ -i)es )al/e4 or (*) a !o##er!ial tort !lai#. IcJ #7uture ad&ances and other &alue.' A se!/rit$ a-ree#e't #a$ +ro)i&e that !ollateral se!/res2 or that a!!o/'ts2 !hattel +a+er2 +a$#e't i'ta'-i%les2 or +ro#issor$ 'otes are sol& i' !o''e!tio' 1ith2 (/t/re a&)a'!es or other )al/e2 1hether or 'ot the a&)a'!es or )al/e are -i)e' +/rs/a't to !o##it#e't. 9-&03. -S% !" D#S,!S#T#!( !' C!$$)T%")$ ,%".#SS#1$%. IaJ #When securit! interest not in&alid or fraudulent.' A se!/rit$ i'terest is 'ot i')ali& or (ra/&/le't a-ai'st !re&itors solel$ %e!a/se0 (1) the &e%tor has the ri-ht or a%ilit$ to0 (A) /se2 !o##i'-le2 or &is+ose o( all or +art o( the !ollateral2 i'!l/&i'- ret/r'e& or re+ossesse& -oo&s4 (@) !olle!t2 !o#+ro#ise2 e'(or!e2 or other1ise &eal 1ith !ollateral4 (C) a!!e+t the ret/r' o( !ollateral or #a5e re+ossessio's4 or (=) /se2 !o##i'-le2 or &is+ose o( +ro!ee&s4 or

(*) the se!/re& +art$ (ails to re7/ire the &e%tor to a!!o/'t (or +ro!ee&s or re+la!e !ollateral. I0J #%eBuirements of possession not relaxed.' This se!tio' &oes 'ot rela, the re7/ire#e'ts o( +ossessio' i( atta!h#e't2 +er(e!tio'2 or e'(or!e#e't o( a se!/rit$ i'terest &e+e'&s /+o' +ossessio' o( the !ollateral %$ the se!/re& +art$. 9-&04. S%C-"#T/ #(T%"%ST )"#S#(G #( ,-"C )S% !" D%$#5%"/ !' '#()(C#)$ )SS%T. IaJ #-ecurit! interest <hen person 0u!s throu/h securities intermediar!.' A se!/rit$ i'terest i' (a)or o( a se!/rities i'ter#e&iar$ atta!hes to a +erso'Bs se!/rit$ e'title#e't i(0 (1) the +erso' %/$s a (i'a'!ial asset thro/-h the se!/rities i'ter#e&iar$ i' a tra'sa!tio' i' 1hi!h the +erso' is o%li-ate& to +a$ the +/r!hase +ri!e to the se!/rities i'ter#e&iar$ at the ti#e o( the +/r!hase4 a'& (*) the se!/rities i'ter#e&iar$ !re&its the (i'a'!ial asset to the %/$erBs se!/rities a!!o/'t %e(ore the %/$er +a$s the se!/rities i'ter#e&iar$. I0J #-ecurit! interest secures o0li/ation to pa! for financial asset.' The se!/rit$ i'terest &es!ri%e& i' s/%se!tio' (a) se!/res the +erso'Bs o%li-atio' to +a$ (or the (i'a'!ial asset. IcJ #-ecurit! interest in pa!ment a/ainst deli&er! transaction.' A se!/rit$ i'terest i' (a)or o( a +erso' that &eli)ers a !erti(i!ate& se!/rit$ or other (i'a'!ial asset re+rese'te& %$ a 1riti'- atta!hes to the se!/rit$ or other (i'a'!ial asset i(0 (1) the se!/rit$ or other (i'a'!ial asset0 (A) i' the or&i'ar$ !o/rse o( %/si'ess is tra's(erre& %$ &eli)er$ 1ith a'$ 'e!essar$ i'&orse#e't or assi-'#e't4 a'& (@) is &eli)ere& /'&er a' a-ree#e't %et1ee' +erso's i' the %/si'ess o( &eali'- 1ith s/!h se!/rities or (i'a'!ial assets4 a'& (*) the a-ree#e't !alls (or &eli)er$ a-ai'st +a$#e't. IdJ #-ecurit! interest secures o0li/ation to pa! for deli&er!.' The se!/rit$ i'terest &es!ri%e& i' s/%se!tio' (!) se!/res the o%li-atio' to #a5e +a$#e't (or the &eli)er$. [Subpart &. "i<hts and Duties] 9-&06. "#G TS )(D D-T#%S !' S%C-"%D ,)"T/ )5#(G ,!SS%SS#!( !" C!(T"!$ !' C!$$)T%")$. IaJ #3ut! of care <hen secured part! in possession.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&)2 a se!/re& +art$ shall /se reaso'a%le !are i' the !/sto&$ a'& +reser)atio' o( !ollateral i' the se!/re& +art$Bs +ossessio'. I' the !ase o( !hattel +a+er or a' i'str/#e't2 reaso'a%le !are i'!l/&es ta5i'- 'e!essar$ ste+s to +reser)e ri-hts a-ai'st +rior +arties /'less other1ise a-ree&. I0J #Expenses2 ris>s2 duties2 and ri/hts <hen secured part! in possession.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&)2 i( a se!/re& +art$ has +ossessio' o( !ollateral0

(1) reaso'a%le e,+e'ses2 i'!l/&i'- the !ost o( i's/ra'!e a'& +a$#e't o( ta,es or other !har-es2 i'!/rre& i' the !/sto&$2 +reser)atio'2 /se2 or o+eratio' o( the !ollateral are !har-ea%le to the &e%tor a'& are se!/re& %$ the !ollateral4 (*) the ris5 o( a!!i&e'tal loss or &a#a-e is o' the &e%tor to the e,te't o( a &e(i!ie'!$ i' a'$ e((e!ti)e i's/ra'!e !o)era-e4 (.) the se!/re& +art$ shall 5ee+ the !ollateral i&e'ti(ia%le2 %/t (/'-i%le !ollateral #a$ %e !o##i'-le&4 a'& (8) the se!/re& +art$ #a$ /se or o+erate the !ollateral0 (A) (or the +/r+ose o( +reser)i'- the !ollateral or its )al/e4 (@) as +er#itte& %$ a' or&er o( a !o/rt ha)i'- !o#+ete't 6/ris&i!tio'4 or (C) e,!e+t i' the !ase o( !o's/#er -oo&s2 i' the #a''er a'& to the e,te't a-ree& %$ the &e%tor. IcJ #3uties and ri/hts <hen secured part! in possession or control.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&)2 a se!/re& +art$ ha)i'- +ossessio' o( !ollateral or !o'trol o( !ollateral /'&er Se!tio' A-1082 A-1092 A-10:2 or A-10;0 (1) #a$ hol& as a&&itio'al se!/rit$ a'$ +ro!ee&s2 e,!e+t #o'e$ or (/'&s2 re!ei)e& (ro# the !ollateral4 (*) shall a++l$ #o'e$ or (/'&s re!ei)e& (ro# the !ollateral to re&/!e the se!/re& o%li-atio'2 /'less re#itte& to the &e%tor4 a'& (.) #a$ !reate a se!/rit$ i'terest i' the !ollateral. IdJ #"u!er of certain ri/hts to pa!ment.' I( the se!/re& +art$ is a %/$er o( a!!o/'ts2 !hattel +a+er2 +a$#e't i'ta'-i%les2 or +ro#issor$ 'otes or a !o'si-'or0 (1) s/%se!tio' (a) &oes 'ot a++l$ /'less the se!/re& +art$ is e'title& /'&er a' a-ree#e't0 (A) to !har-e %a!5 /'!olle!te& !ollateral4 or (@) other1ise to (/ll or li#ite& re!o/rse a-ai'st the &e%tor or a se!o'&ar$ o%li-or %ase& o' the 'o'+a$#e't or other &e(a/lt o( a' a!!o/'t &e%tor or other o%li-or o' the !ollateral4 a'& (*) s/%se!tio's (%) a'& (!) &o 'ot a++l$. 9-&07. )DD#T#!()$ D-T#%S !' S%C-"%D ,)"T/ IaJ #.pplica0ilit! of section.' This se!tio' a++lies to !ases i' 1hi!h there is 'o o/tsta'&i'- se!/re& o%li-atio' a'& the se!/re& +art$ is 'ot !o##itte& to #a5e a&)a'!es2 i'!/r o%li-atio's2 or other1ise -i)e )al/e. I0J #3uties of secured part! after recei&in/ demand from de0tor.' Cithi' 10 &a$s a(ter re!ei)i'- a' a/the'ti!ate& &e#a'& %$ the &e%tor0 (1) a se!/re& +art$ ha)i'- !o'trol o( a &e+osit a!!o/'t /'&er Se!tio' A-108(a)(*) shall se'& to the %a'5 1ith 1hi!h the &e+osit a!!o/'t is #ai'tai'e& a' a/the'ti!ate& state#e't that releases the %a'5 (ro# a'$ (/rther o%li-atio' to !o#+l$ 1ith i'str/!tio's ori-i'ate& %$ the se!/re& +art$4 (*) a se!/re& +art$ ha)i'- !o'trol o( a &e+osit a!!o/'t /'&er Se!tio' A-108(a)(.) shall0 (A) +a$ the &e%tor the %ala'!e o' &e+osit i' the &e+osit a!!o/'t4 or (@) tra's(er the %ala'!e o' &e+osit i'to a &e+osit a!!o/'t i' the &e%torBs 'a#e4 )5#(G C!(T"!$ !' C!$$)T%")$.

(.) a se!/re& +art$2 other tha' a %/$er2 ha)i'- !o'trol o( ele!tro'i! !hattel +a+er /'&er Se!tio' A-109 shall0 (A) !o##/'i!ate the a/thoritati)e !o+$ o( the ele!tro'i! !hattel +a+er to the &e%tor or its &esi-'ate& !/sto&ia'4 (@) i( the &e%tor &esi-'ates a !/sto&ia' that is the &esi-'ate& !/sto&ia' 1ith 1hi!h the a/thoritati)e !o+$ o( the ele!tro'i! !hattel +a+er is #ai'tai'e& (or the se!/re& +art$2 !o##/'i!ate to the !/sto&ia' a' a/the'ti!ate& re!or& releasi'- the &esi-'ate& !/sto&ia' (ro# a'$ (/rther o%li-atio' to !o#+l$ 1ith i'str/!tio's ori-i'ate& %$ the se!/re& +art$ a'& i'str/!ti'- the !/sto&ia' to !o#+l$ 1ith i'str/!tio's ori-i'ate& %$ the &e%tor4 a'& (C) ta5e a++ro+riate a!tio' to e'a%le the &e%tor or its &esi-'ate& !/sto&ia' to #a5e !o+ies o( or re)isio's to the a/thoritati)e !o+$ 1hi!h a&& or !ha'-e a' i&e'ti(ie& assi-'ee o( the a/thoritati)e !o+$ 1itho/t the !o'se't o( the se!/re& +art$4 (8) a se!/re& +art$ ha)i'- !o'trol o( i')est#e't +ro+ert$ /'&er Se!tio' <-10:(&)(*) or A-10:(%) shall se'& to the se!/rities i'ter#e&iar$ or !o##o&it$ i'ter#e&iar$ 1ith 1hi!h the se!/rit$ e'title#e't or !o##o&it$ !o'tra!t is #ai'tai'e& a' a/the'ti!ate& re!or& that releases the se!/rities i'ter#e&iar$ or !o##o&it$ i'ter#e&iar$ (ro# a'$ (/rther o%li-atio' to !o#+l$ 1ith e'title#e't or&ers or &ire!tio's ori-i'ate& %$ the se!/re& +art$4 (9) a se!/re& +art$ ha)i'- !o'trol o( a letter-o(-!re&it ri-ht /'&er Se!tio' A-10; shall se'& to ea!h +erso' ha)i'- a' /'(/l(ille& o%li-atio' to +a$ or &eli)er +ro!ee&s o( the letter o( !re&it to the se!/re& +art$ a' a/the'ti!ate& release (ro# a'$ (/rther o%li-atio' to +a$ or &eli)er +ro!ee&s o( the letter o( !re&it to the se!/re& +art$. 9-&09. D-T#%S !' S%C-"%D ,)"T/ #' )CC!-(T D%1T!" )SS#G(.%(T. IaJ #.pplica0ilit! of section.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (!)2 this se!tio' a++lies i(0 (1) there is 'o o/tsta'&i'- se!/re& o%li-atio'4 a'& (*) the se!/re& +art$ is 'ot !o##itte& to #a5e a&)a'!es2 i'!/r o%li-atio's2 or other1ise -i)e )al/e. I0J #3uties of secured part! after recei&in/ demand from de0tor.' Cithi' 10 &a$s a(ter re!ei)i'- a' a/the'ti!ate& &e#a'& %$ the &e%tor2 a se!/re& +art$ shall se'& to a' a!!o/'t &e%tor that has re!ei)e& 'oti(i!atio' o( a' assi-'#e't to the se!/re& +art$ as assi-'ee /'&er Se!tio' A-80:(a) a' a/the'ti!ate& re!or& that releases the a!!o/'t &e%tor (ro# a'$ (/rther o%li-atio' to the se!/re& +art$. IcJ #Inapplica0ilit! to sales.' This se!tio' &oes 'ot a++l$ to a' assi-'#e't !o'stit/ti'- the sale o( a' a!!o/'t2 !hattel +a+er2 or +a$#e't i'ta'-i%le. 9-&10. "%;-%ST '!" )CC!-(T#(G0 "%;-%ST "%G)"D#(G $#ST !' C!$$)T%")$ !" ST)T%.%(T !' )CC!-(T. IaJ #3efinitions.' I' this se!tio'0 (1) ?Re7/est? #ea's a re!or& o( a t$+e &es!ri%e& i' +ara-ra+h (*)2 (.)2 or (8). )S 1%%( (!T#'#%D !'

(*) ?Re7/est (or a' a!!o/'ti'-? #ea's a re!or& a/the'ti!ate& %$ a &e%tor re7/esti'that the re!i+ie't +ro)i&e a' a!!o/'ti'- o( the /'+ai& o%li-atio's se!/re& %$ !ollateral a'& reaso'a%l$ i&e'ti($i'- the tra'sa!tio' or relatio'shi+ that is the s/%6e!t o( the re7/est. (.) ?Re7/est re-ar&i'- a list o( !ollateral? #ea's a re!or& a/the'ti!ate& %$ a &e%tor re7/esti'- that the re!i+ie't a++ro)e or !orre!t a list o( 1hat the &e%tor %elie)es to %e the !ollateral se!/ri'- a' o%li-atio' a'& reaso'a%l$ i&e'ti($i'- the tra'sa!tio' or relatio'shi+ that is the s/%6e!t o( the re7/est. (8) ?Re7/est re-ar&i'- a state#e't o( a!!o/'t? #ea's a re!or& a/the'ti!ate& %$ a &e%tor re7/esti'- that the re!i+ie't a++ro)e or !orre!t a state#e't i'&i!ati'- 1hat the &e%tor %elie)es to %e the a--re-ate a#o/'t o( /'+ai& o%li-atio's se!/re& %$ !ollateral as o( a s+e!i(ie& &ate a'& reaso'a%l$ i&e'ti($i'- the tra'sa!tio' or relatio'shi+ that is the s/%6e!t o( the re7/est. I0J #3ut! to respond to reBuests.' S/%6e!t to s/%se!tio's (!)2 (&)2 (e)2 a'& (()2 a se!/re& +art$2 other tha' a %/$er o( a!!o/'ts2 !hattel +a+er2 +a$#e't i'ta'-i%les2 or +ro#issor$ 'otes or a !o'si-'or2 shall !o#+l$ 1ith a re7/est 1ithi' 18 &a$s a(ter re!ei+t0 (1) i' the !ase o( a re7/est (or a' a!!o/'ti'-2 %$ a/the'ti!ati'- a'& se'&i'- to the &e%tor a' a!!o/'ti'-4 a'& (*) i' the !ase o( a re7/est re-ar&i'- a list o( !ollateral or a re7/est re-ar&i'- a state#e't o( a!!o/'t2 %$ a/the'ti!ati'- a'& se'&i'- to the &e%tor a' a++ro)al or !orre!tio'. IcJ #%eBuest re/ardin/ list of collateral+ statement concernin/ t!pe of collateral.' A se!/re& +art$ that !lai#s a se!/rit$ i'terest i' all o( a +arti!/lar t$+e o( !ollateral o1'e& %$ the &e%tor #a$ !o#+l$ 1ith a re7/est re-ar&i'- a list o( !ollateral %$ se'&i'to the &e%tor a' a/the'ti!ate& re!or& i'!l/&i'- a state#e't to that e((e!t 1ithi' 18 &a$s a(ter re!ei+t. IdJ #%eBuest re/ardin/ list of collateral+ no interest claimed.' A +erso' that re!ei)es a re7/est re-ar&i'- a list o( !ollateral2 !lai#s 'o i'terest i' the !ollateral 1he' it re!ei)es the re7/est2 a'& !lai#e& a' i'terest i' the !ollateral at a' earlier ti#e shall !o#+l$ 1ith the re7/est 1ithi' 18 &a$s a(ter re!ei+t %$ se'&i'- to the &e%tor a' a/the'ti!ate& re!or&0 (1) &is!lai#i'- a'$ i'terest i' the !ollateral4 a'& (*) i( 5'o1' to the re!i+ie't2 +ro)i&i'- the 'a#e a'& #aili'- a&&ress o( a'$ assi-'ee o( or s/!!essor to the re!i+ie'tBs i'terest i' the !ollateral. IeJ #%eBuest for accountin/ or re/ardin/ statement of account+ no interest in o0li/ation claimed.' A +erso' that re!ei)es a re7/est (or a' a!!o/'ti'- or a re7/est re-ar&i'- a state#e't o( a!!o/'t2 !lai#s 'o i'terest i' the o%li-atio's 1he' it re!ei)es the re7/est2 a'& !lai#e& a' i'terest i' the o%li-atio's at a' earlier ti#e shall !o#+l$ 1ith the re7/est 1ithi' 18 &a$s a(ter re!ei+t %$ se'&i'- to the &e%tor a' a/the'ti!ate& re!or&0 (1) &is!lai#i'- a'$ i'terest i' the o%li-atio's4 a'&

(*) i( 5'o1' to the re!i+ie't2 +ro)i&i'- the 'a#e a'& #aili'- a&&ress o( a'$ assi-'ee o( or s/!!essor to the re!i+ie'tBs i'terest i' the o%li-atio's. IfJ #Char/es for responses.' A &e%tor is e'title& 1itho/t !har-e to o'e res+o'se to a re7/est /'&er this se!tio' &/ri'- a'$ si,-#o'th +erio&. The se!/re& +art$ #a$ re7/ire +a$#e't o( a !har-e 'ot e,!ee&i'- I*9 (or ea!h a&&itio'al res+o'se. Part .. Per(e!tio' a'& Priorit$ [Subpart 1. $a= Go9ernin< ,erfection and ,riorit8] 9-+01. $)> G!5%"(#(G ,%"'%CT#!( )(D ,"#!"#T/ !' S%C-"#T/ #(T%"%STS. E,!e+t as other1ise +ro)i&e& i' Se!tio's A-.0. thro/-h A-.0:2 the (ollo1i'- r/les &eter#i'e the la1 -o)er'i'- +er(e!tio'2 the e((e!t o( +er(e!tio' or 'o'+er(e!tio'2 a'& the +riorit$ o( a se!/rit$ i'terest i' !ollateral0 (1) E,!e+t as other1ise +ro)i&e& i' this se!tio'2 1hile a &e%tor is lo!ate& i' a 6/ris&i!tio'2 the lo!al la1 o( that 6/ris&i!tio' -o)er's +er(e!tio'2 the e((e!t o( +er(e!tio' or 'o'+er(e!tio'2 a'& the +riorit$ o( a se!/rit$ i'terest i' !ollateral. (*) Chile !ollateral is lo!ate& i' a 6/ris&i!tio'2 the lo!al la1 o( that 6/ris&i!tio' -o)er's +er(e!tio'2 the e((e!t o( +er(e!tio' or 'o'+er(e!tio'2 a'& the +riorit$ o( a +ossessor$ se!/rit$ i'terest i' that !ollateral. (.) E,!e+t as other1ise +ro)i&e& i' +ara-ra+h (8)2 1hile 'e-otia%le &o!/#e'ts2 -oo&s2 i'str/#e'ts2 #o'e$2 or ta'-i%le !hattel +a+er is lo!ate& i' a 6/ris&i!tio'2 the lo!al la1 o( that 6/ris&i!tio' -o)er's0 (A) +er(e!tio' o( a se!/rit$ i'terest i' the -oo&s %$ (ili'- a (i,t/re (ili'-4 (@) +er(e!tio' o( a se!/rit$ i'terest i' ti#%er to %e !/t4 a'& (C) the e((e!t o( +er(e!tio' or 'o'+er(e!tio' a'& the +riorit$ o( a 'o'+ossessor$ se!/rit$ i'terest i' the !ollateral. (8) The lo!al la1 o( the 6/ris&i!tio' i' 1hi!h the 1ellhea& or #i'ehea& is lo!ate& -o)er's +er(e!tio'2 the e((e!t o( +er(e!tio' or 'o'+er(e!tio'2 a'& the +riorit$ o( a se!/rit$ i'terest i' as-e,tra!te& !ollateral. 9-+0&. $)> G!5%"(#(G ,%"'%CT#!( )(D ,"#!"#T/ !' )G"#C-$T-")$ $#%(S. Chile (ar# +ro&/!ts are lo!ate& i' a 6/ris&i!tio'2 the lo!al la1 o( that 6/ris&i!tio' -o)er's +er(e!tio'2 the e((e!t o( +er(e!tio' or 'o'+er(e!tio'2 a'& the +riorit$ o( a' a-ri!/lt/ral lie' o' the (ar# +ro&/!ts. 9-+0+. $)> G!5%"(#(G ,%"'%CT#!( )(D ,"#!"#T/ !' S%C-"#T/ #(T%"%STS #( G!!DS C!5%"%D 1/ ) C%"T#'#C)T% !' T#T$%. IaJ #.pplica0ilit! of section.' This se!tio' a++lies to -oo&s !o)ere& %$ a !erti(i!ate o( title2 e)e' i( there is 'o other relatio'shi+ %et1ee' the 6/ris&i!tio' /'&er 1hose !erti(i!ate o( title the -oo&s are !o)ere& a'& the -oo&s or the &e%tor. I0J #When /oods co&ered 0! certificate of title.' Goo&s %e!o#e !o)ere& %$ a !erti(i!ate o( title 1he' a )ali& a++li!atio' (or the !erti(i!ate o( title a'& the a++li!a%le (ee are &eli)ere& to the a++ro+riate a/thorit$. Goo&s !ease to %e !o)ere& %$ a !erti(i!ate o( title at the earlier o( the ti#e the !erti(i!ate o( title !eases to %e e((e!ti)e /'&er the la1 o( the iss/i'- 6/ris&i!tio' or the ti#e the -oo&s %e!o#e !o)ere& s/%se7/e'tl$ %$ a !erti(i!ate o( title iss/e& %$ a'other 6/ris&i!tio'.

IcJ #.pplica0le la<.' The lo!al la1 o( the 6/ris&i!tio' /'&er 1hose !erti(i!ate o( title the -oo&s are !o)ere& -o)er's +er(e!tio'2 the e((e!t o( +er(e!tio' or 'o'+er(e!tio'2 a'& the +riorit$ o( a se!/rit$ i'terest i' -oo&s !o)ere& %$ a !erti(i!ate o( title (ro# the ti#e the -oo&s %e!o#e !o)ere& %$ the !erti(i!ate o( title /'til the -oo&s !ease to %e !o)ere& %$ the !erti(i!ate o( title. 9-+02. $)> G!5%"(#(G ,%"'%CT#!( )(D ,"#!"#T/ !' S%C-"#T/ #(T%"%STS #( D%,!S#T )CC!-(TS. IaJ #*a< of 0an>;s @urisdiction /o&erns.' The lo!al la1 o( a %a'5Bs 6/ris&i!tio' -o)er's +er(e!tio'2 the e((e!t o( +er(e!tio' or 'o'+er(e!tio'2 a'& the +riorit$ o( a se!/rit$ i'terest i' a &e+osit a!!o/'t #ai'tai'e& 1ith that %a'5. I0J #"an>;s @urisdiction.' The (ollo1i'- r/les &eter#i'e a %a'5Bs 6/ris&i!tio' (or +/r+oses o( this +art0 (1) I( a' a-ree#e't %et1ee' the %a'5 a'& the &e%tor -o)er'i'- the &e+osit a!!o/'t e,+ressl$ +ro)i&es that a +arti!/lar 6/ris&i!tio' is the %a'5Bs 6/ris&i!tio' (or +/r+oses o( this +art2 this arti!le2 or the U'i(or# Co##er!ial Co&e"2 that 6/ris&i!tio' is the %a'5Bs 6/ris&i!tio'. (*) I( +ara-ra+h (1) &oes 'ot a++l$ a'& a' a-ree#e't %et1ee' the %a'5 a'& its !/sto#er -o)er'i'- the &e+osit a!!o/'t e,+ressl$ +ro)i&es that the a-ree#e't is -o)er'e& %$ the la1 o( a +arti!/lar 6/ris&i!tio'2 that 6/ris&i!tio' is the %a'5Bs 6/ris&i!tio'. (.) I( 'either +ara-ra+h (1) 'or +ara-ra+h (*) a++lies a'& a' a-ree#e't %et1ee' the %a'5 a'& its !/sto#er -o)er'i'- the &e+osit a!!o/'t e,+ressl$ +ro)i&es that the &e+osit a!!o/'t is #ai'tai'e& at a' o((i!e i' a +arti!/lar 6/ris&i!tio'2 that 6/ris&i!tio' is the %a'5Bs 6/ris&i!tio'. (8) I( 'o'e o( the +re!e&i'- +ara-ra+hs a++lies2 the %a'5Bs 6/ris&i!tio' is the 6/ris&i!tio' i' 1hi!h the o((i!e i&e'ti(ie& i' a' a!!o/'t state#e't as the o((i!e ser)i'- the !/sto#erBs a!!o/'t is lo!ate&. (9) I( 'o'e o( the +re!e&i'- +ara-ra+hs a++lies2 the %a'5Bs 6/ris&i!tio' is the 6/ris&i!tio' i' 1hi!h the !hie( e,e!/ti)e o((i!e o( the %a'5 is lo!ate&. 9-+03. $)> G!5%"(#(G ,%"'%CT#!( )(D ,"#!"#T/ !' S%C-"#T/ #(T%"%STS #( #(5%ST.%(T ,"!,%"T/. IaJ #6o&ernin/ la<C /eneral rules.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (!)2 the (ollo1i'- r/les a++l$0 (1) Chile a se!/rit$ !erti(i!ate is lo!ate& i' a 6/ris&i!tio'2 the lo!al la1 o( that 6/ris&i!tio' -o)er's +er(e!tio'2 the e((e!t o( +er(e!tio' or 'o'+er(e!tio'2 a'& the +riorit$ o( a se!/rit$ i'terest i' the !erti(i!ate& se!/rit$ re+rese'te& there%$. (*) The lo!al la1 o( the iss/erBs 6/ris&i!tio' as s+e!i(ie& i' Se!tio' <-110(&) -o)er's +er(e!tio'2 the e((e!t o( +er(e!tio' or 'o'+er(e!tio'2 a'& the +riorit$ o( a se!/rit$ i'terest i' a' /'!erti(i!ate& se!/rit$. (.) The lo!al la1 o( the se!/rities i'ter#e&iar$Bs 6/ris&i!tio' as s+e!i(ie& i' Se!tio' <110(e) -o)er's +er(e!tio'2 the e((e!t o( +er(e!tio' or 'o'+er(e!tio'2 a'& the +riorit$ o( a se!/rit$ i'terest i' a se!/rit$ e'title#e't or se!/rities a!!o/'t.

(8) The lo!al la1 o( the !o##o&it$ i'ter#e&iar$Bs 6/ris&i!tio' -o)er's +er(e!tio'2 the e((e!t o( +er(e!tio' or 'o'+er(e!tio'2 a'& the +riorit$ o( a se!/rit$ i'terest i' a !o##o&it$ !o'tra!t or !o##o&it$ a!!o/'t. I0J #Commodit! intermediar!;s @urisdiction.' The (ollo1i'- r/les &eter#i'e a !o##o&it$ i'ter#e&iar$Bs 6/ris&i!tio' (or +/r+oses o( this +art0 (1) I( a' a-ree#e't %et1ee' the !o##o&it$ i'ter#e&iar$ a'& !o##o&it$ !/sto#er -o)er'i'- the !o##o&it$ a!!o/'t e,+ressl$ +ro)i&es that a +arti!/lar 6/ris&i!tio' is the !o##o&it$ i'ter#e&iar$Bs 6/ris&i!tio' (or +/r+oses o( this +art2 this arti!le2 or the U'i(or# Co##er!ial Co&e"2 that 6/ris&i!tio' is the !o##o&it$ i'ter#e&iar$Bs 6/ris&i!tio'. (*) I( +ara-ra+h (1) &oes 'ot a++l$ a'& a' a-ree#e't %et1ee' the !o##o&it$ i'ter#e&iar$ a'& !o##o&it$ !/sto#er -o)er'i'- the !o##o&it$ a!!o/'t e,+ressl$ +ro)i&es that the a-ree#e't is -o)er'e& %$ the la1 o( a +arti!/lar 6/ris&i!tio'2 that 6/ris&i!tio' is the !o##o&it$ i'ter#e&iar$Bs 6/ris&i!tio'. (.) I( 'either +ara-ra+h (1) 'or +ara-ra+h (*) a++lies a'& a' a-ree#e't %et1ee' the !o##o&it$ i'ter#e&iar$ a'& !o##o&it$ !/sto#er -o)er'i'- the !o##o&it$ a!!o/'t e,+ressl$ +ro)i&es that the !o##o&it$ a!!o/'t is #ai'tai'e& at a' o((i!e i' a +arti!/lar 6/ris&i!tio'2 that 6/ris&i!tio' is the !o##o&it$ i'ter#e&iar$Bs 6/ris&i!tio'. (8) I( 'o'e o( the +re!e&i'- +ara-ra+hs a++lies2 the !o##o&it$ i'ter#e&iar$Bs 6/ris&i!tio' is the 6/ris&i!tio' i' 1hi!h the o((i!e i&e'ti(ie& i' a' a!!o/'t state#e't as the o((i!e ser)i'- the !o##o&it$ !/sto#erBs a!!o/'t is lo!ate&. (9) I( 'o'e o( the +re!e&i'- +ara-ra+hs a++lies2 the !o##o&it$ i'ter#e&iar$Bs 6/ris&i!tio' is the 6/ris&i!tio' i' 1hi!h the !hie( e,e!/ti)e o((i!e o( the !o##o&it$ i'ter#e&iar$ is lo!ate&. IcJ #When perfection /o&erned 0! la< of @urisdiction <here de0tor located.' The lo!al la1 o( the 6/ris&i!tio' i' 1hi!h the &e%tor is lo!ate& -o)er's0 (1) +er(e!tio' o( a se!/rit$ i'terest i' i')est#e't +ro+ert$ %$ (ili'-4 (*) a/to#ati! +er(e!tio' o( a se!/rit$ i'terest i' i')est#e't +ro+ert$ !reate& %$ a %ro5er or se!/rities i'ter#e&iar$4 a'& (.) a/to#ati! +er(e!tio' o( a se!/rit$ i'terest i' a !o##o&it$ !o'tra!t or !o##o&it$ a!!o/'t !reate& %$a !o##o&it$ i'ter#e&iar$. 9-+04. $)> G!5%"(#(G ,%"'%CT#!( )(D ,"#!"#T/ !' S%C-"#T/ #(T%"%STS #( $%TT%"-!'-C"%D#T "#G TS. IaJ #6o&ernin/ la<C issuer;s or nominated person;s @urisdiction.' S/%6e!t to s/%se!tio' (!)2 the lo!al la1 o( the iss/erBs 6/ris&i!tio' or a 'o#i'ate& +erso'Bs 6/ris&i!tio' -o)er's +er(e!tio'2 the e((e!t o( +er(e!tio' or 'o'+er(e!tio'2 a'& the +riorit$ o( a se!/rit$ i'terest i' a letter-o(-!re&it ri-ht i( the iss/erBs 6/ris&i!tio' or 'o#i'ate& +erso'Bs 6/ris&i!tio' is a State. I0J #Issuer;s or nominated person;s @urisdiction.' >or +/r+oses o( this +art2 a' iss/erBs 6/ris&i!tio' or 'o#i'ate& +erso'Bs 6/ris&i!tio' is the 6/ris&i!tio' 1hose la1 -o)er's the lia%ilit$ o( the iss/er or 'o#i'ate& +erso' 1ith res+e!t to the letter-o(-!re&it ri-ht as +ro)i&e& i' Se!tio' 9-11:. IcJ #When section not applica0le.'

This se!tio' &oes 'ot a++l$ to a se!/rit$ i'terest that is +er(e!te& o'l$ /'&er Se!tio' A.0<(&). 9-+06. $!C)T#!( !' D%1T!". IaJ #) lace of 0usiness.)' I' this se!tio'2 ?+la!e o( %/si'ess? #ea's a +la!e 1here a &e%tor !o'&/!ts its a((airs. I0J #3e0tor;s locationC /eneral rules.' E,!e+t as other1ise +ro)i&e& i' this se!tio'2 the (ollo1i'- r/les &eter#i'e a &e%torBs lo!atio'0 (1) A &e%tor 1ho is a' i'&i)i&/al is lo!ate& at the i'&i)i&/alBs +ri'!i+al resi&e'!e. (*) A &e%tor that is a' or-a'i3atio' a'& has o'l$ o'e +la!e o( %/si'ess is lo!ate& at its +la!e o( %/si'ess. (.) A &e%tor that is a' or-a'i3atio' a'& has #ore tha' o'e +la!e o( %/si'ess is lo!ate& at its !hie( e,e!/ti)e o((i!e. IcJ #*imitation of applica0ilit! of su0section I0J.' S/%se!tio' (%) a++lies o'l$ i( a &e%torBs resi&e'!e2 +la!e o( %/si'ess2 or !hie( e,e!/ti)e o((i!e2 as a++li!a%le2 is lo!ate& i' a 6/ris&i!tio' 1hose la1 -e'erall$ re7/ires i'(or#atio' !o'!er'i'- the e,iste'!e o( a 'o'+ossessor$ se!/rit$ i'terest to %e #a&e -e'erall$ a)aila%le i' a (ili'-2 re!or&i'-2 or re-istratio' s$ste# as a !o'&itio' or res/lt o( the se!/rit$ i'terestBs o%tai'i'- +riorit$ o)er the ri-hts o( a lie' !re&itor 1ith res+e!t to the !ollateral. I( s/%se!tio' (%) &oes 'ot a++l$2 the &e%tor is lo!ate& i' the =istri!t o( Col/#%ia. IdJ #Continuation of locationC cessation of existence2 etc.' A +erso' that !eases to e,ist2 ha)e a resi&e'!e2 or ha)e a +la!e o( %/si'ess !o'ti'/es to %e lo!ate& i' the 6/ris&i!tio' s+e!i(ie& %$ s/%se!tio's (%) a'& (!). IeJ #*ocation of re/istered or/aniAation or/aniAed under -tate la<.' A re-istere& or-a'i3atio' that is or-a'i3e& /'&er the la1 o( a State is lo!ate& i' that State. IfJ #*ocation of re/istered or/aniAation or/aniAed under federal la<+ 0an> 0ranches and a/encies.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (i)2 a re-istere& or-a'i3atio' that is or-a'i3e& /'&er the la1 o( the U'ite& States a'& a %ra'!h or a-e'!$ o( a %a'5 that is 'ot or-a'i3e& /'&er the la1 o( the U'ite& States or a State are lo!ate&0 (1) i' the State that the la1 o( the U'ite& States &esi-'ates2 i( the la1 &esi-'ates a State o( lo!atio'4 (*) i' the State that the re-istere& or-a'i3atio'2 %ra'!h2 or a-e'!$ &esi-'ates2 i( the la1 o( the U'ite& States a/thori3es the re-istere& or-a'i3atio'2 %ra'!h2 or a-e'!$ to &esi-'ate its State o( lo!atio'4 or (.) i' the =istri!t o( Col/#%ia2 i( 'either +ara-ra+h (1) 'or +ara-ra+h (*) a++lies. I/J #Continuation of locationC chan/e in status of re/istered or/aniAation.' A re-istere& or-a'i3atio' !o'ti'/es to %e lo!ate& i' the 6/ris&i!tio' s+e!i(ie& %$ s/%se!tio' (e) or (() 'ot1ithsta'&i'-0 (1) the s/s+e'sio'2 re)o!atio'2 (or(eit/re2 or la+se o( the re-istere& or-a'i3atio'Bs stat/s as s/!h i' its 6/ris&i!tio' o( or-a'i3atio'4 or

(*) the &issol/tio'2 1i'&i'- /+2 or !a'!ellatio' o( the e,iste'!e o( the re-istere& or-a'i3atio'. IhJ #*ocation of 9nited -tates.' The U'ite& States is lo!ate& i' the =istri!t o( Col/#%ia. IiJ #*ocation of forei/n 0an> 0ranch or a/enc! if licensed in onl! one state.' A %ra'!h or a-e'!$ o( a %a'5 that is 'ot or-a'i3e& /'&er the la1 o( the U'ite& States or a State is lo!ate& i' the State i' 1hi!h the %ra'!h or a-e'!$ is li!e'se&2 i( all %ra'!hes a'& a-e'!ies o( the %a'5 are li!e'se& i' o'l$ o'e State. I@J #*ocation of forei/n air carrier.' A (orei-' air !arrier /'&er the >e&eral A)iatio' A!t o( 1A9<2 as a#e'&e&2 is lo!ate& at the &esi-'ate& o((i!e o( the a-e't /+o' 1hi!h ser)i!e o( +ro!ess #a$ %e #a&e o' %ehal( o( the !arrier. I>J #-ection applies onl! to this part.' This se!tio' a++lies o'l$ (or +/r+oses o( this +art. 9-+07. > %( S%C-"#T/ #(T%"%ST !" )G"#C-$T-")$ $#%( #S ,%"'%CT%D0 C!(T#(-#T/ !' ,%"'%CT#!(. IaJ # erfection of securit! interest.' E,!e+t as other1ise +ro)i&e& i' this se!tio' a'& Se!tio' A-.0A2 a se!/rit$ i'terest is +er(e!te& i( it has atta!he& a'& all o( the a++li!a%le re7/ire#e'ts (or +er(e!tio' i' Se!tio's A-.10 thro/-h A-.1: ha)e %ee' satis(ie&. A se!/rit$ i'terest is +er(e!te& 1he' it atta!hes i( the a++li!a%le re7/ire#e'ts are satis(ie& %e(ore the se!/rit$ i'terest atta!hes. I0J # erfection of a/ricultural lien.' A' a-ri!/lt/ral lie' is +er(e!te& i( it has %e!o#e e((e!ti)e a'& all o( the a++li!a%le re7/ire#e'ts (or +er(e!tio' i' Se!tio' A-.10 ha)e %ee' satis(ie&. A' a-ri!/lt/ral lie' is +er(e!te& 1he' it %e!o#es e((e!ti)e i( the a++li!a%le re7/ire#e'ts are satis(ie& %e(ore the a-ri!/lt/ral lie' %e!o#es e((e!ti)e. IcJ #Continuous perfection+ perfection 0! different methods.' A se!/rit$ i'terest or a-ri!/lt/ral lie' is +er(e!te& !o'ti'/o/sl$ i( it is ori-i'all$ +er(e!te& %$ o'e #etho& /'&er this arti!le a'& is later +er(e!te& %$ a'other #etho& /'&er this arti!le2 1itho/t a' i'ter#e&iate +erio& 1he' it 1as /'+er(e!te&. IdJ #-upportin/ o0li/ation.' Per(e!tio' o( a se!/rit$ i'terest i' !ollateral also +er(e!ts a se!/rit$ i'terest i' a s/++orti'- o%li-atio' (or the !ollateral. IeJ #*ien securin/ ri/ht to pa!ment.' Per(e!tio' o( a se!/rit$ i'terest i' a ri-ht to +a$#e't or +er(or#a'!e also +er(e!ts a se!/rit$ i'terest i' a se!/rit$ i'terest2 #ort-a-e2 or other lie' o' +erso'al or real +ro+ert$ se!/ri'- the ri-ht. IfJ #-ecurit! entitlement carried in securities account.' Per(e!tio' o( a se!/rit$ i'terest i' a se!/rities a!!o/'t also +er(e!ts a se!/rit$ i'terest i' the se!/rit$ e'title#e'ts !arrie& i' the se!/rities a!!o/'t. I/J #Commodit! contract carried in commodit! account.' Per(e!tio' o( a se!/rit$ i'terest i' a !o##o&it$ a!!o/'t also +er(e!ts a se!/rit$ i'terest i' the !o##o&it$ !o'tra!ts !arrie& i' the !o##o&it$ a!!o/'t.

 9-+09. S%C-"#T/ #(T%"%ST ,%"'%CT%D -,!( )TT)C .%(T. The (ollo1i'- se!/rit$ i'terests are +er(e!te& 1he' the$ atta!h0 (1) a +/r!hase-#o'e$ se!/rit$ i'terest i' !o's/#er -oo&s2 e,!e+t as other1ise +ro)i&e& i' Se!tio' A-.11(%) 1ith res+e!t to !o's/#er -oo&s that are s/%6e!t to a stat/te or treat$ &es!ri%e& i' Se!tio' A-.11(a)4 (*) a' assi-'#e't o( a!!o/'ts or +a$#e't i'ta'-i%les 1hi!h &oes 'ot %$ itsel( or i' !o'6/'!tio' 1ith other assi-'#e'ts to the sa#e assi-'ee tra's(er a si-'i(i!a't +art o( the assi-'orBs o/tsta'&i'- a!!o/'ts or +a$#e't i'ta'-i%les4 (.) a sale o( a +a$#e't i'ta'-i%le4 (8) a sale o( a +ro#issor$ 'ote4 (9) a se!/rit$ i'terest !reate& %$ the assi-'#e't o( a health-!are-i's/ra'!e re!ei)a%le to the +ro)i&er o( the health-!are -oo&s or ser)i!es4 (:) a se!/rit$ i'terest arisi'- /'&er Se!tio' *-8012 *-9092 *-;11(.)2 or *A-90<(9)2 /'til the &e%tor o%tai's +ossessio' o( the !ollateral4 (;) a se!/rit$ i'terest o( a !olle!ti'- %a'5 arisi'- /'&er Se!tio' 8-*104 (<) a se!/rit$ i'terest o( a' iss/er or 'o#i'ate& +erso' arisi'- /'&er Se!tio' 9-11<4 (A) a se!/rit$ i'terest arisi'- i' the &eli)er$ o( a (i'a'!ial asset /'&er Se!tio' A-*0:(!)4 (10) a se!/rit$ i'terest i' i')est#e't +ro+ert$ !reate& %$ a %ro5er or se!/rities i'ter#e&iar$4 (11) a se!/rit$ i'terest i' a !o##o&it$ !o'tra!t or a !o##o&it$ a!!o/'t !reate& %$ a !o##o&it$ i'ter#e&iar$4 (1*) a' assi-'#e't (or the %e'e(it o( all !re&itors o( the tra's(eror a'& s/%se7/e't tra's(ers %$ the assi-'ee there/'&er4 a'& (1.) a se!/rit$ i'terest !reate& %$ a' assi-'#e't o( a %e'e(i!ial i'terest i' a &e!e&e'tBs estate. 9-+10. > %( '#$#(G "%;-#"%D T! ,%"'%CT S%C-"#T/ #(T%"%ST !" )G"#C-$T-")$ $#%(0 S%C-"#T/ #(T%"%STS )(D )G"#C-$T-")$ $#%(S T! > #C '#$#(G ,"!5#S#!(S D! (!T ),,$/. IaJ #6eneral ruleC perfection 0! filin/.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (%) a'& Se!tio' A-.1*(%)2 a (i'a'!i'state#e't #/st %e (ile& to +er(e!t all se!/rit$ i'terests a'& a-ri!/lt/ral lie's. I0J #ExceptionsC filin/ not necessar!.' The (ili'- o( a (i'a'!i'- state#e't is 'ot 'e!essar$ to +er(e!t a se!/rit$ i'terest0 (1) that is +er(e!te& /'&er Se!tio' A-.0<(&)2 (e)2 (()2 or (-)4 (*) that is +er(e!te& /'&er Se!tio' A-.0A 1he' it atta!hes4 (.) i' +ro+ert$ s/%6e!t to a stat/te2 re-/latio'2 or treat$ &es!ri%e& i' Se!tio' A-.11(a)4 (8) i' -oo&s i' +ossessio' o( a %ailee 1hi!h is +er(e!te& /'&er Se!tio' A-.1*(&)(1) or (*)4 (9) i' !erti(i!ate& se!/rities2 &o!/#e'ts2 -oo&s2 or i'str/#e'ts 1hi!h is +er(e!te& 1itho/t (ili'- or +ossessio' /'&er Se!tio' A-.1*(e)2 (()2 or (-)4 (:) i' !ollateral i' the se!/re& +art$Bs +ossessio' /'&er Se!tio' A-.1.4 (;) i' a !erti(i!ate& se!/rit$ 1hi!h is +er(e!te& %$ &eli)er$ o( the se!/rit$ !erti(i!ate to the se!/re& +art$ /'&er Se!tio' A-.1.4

(<) i' &e+osit a!!o/'ts2 ele!tro'i! !hattel +a+er2 i')est#e't +ro+ert$2 or letter-o(-!re&it ri-hts 1hi!h is +er(e!te& %$ !o'trol /'&er Se!tio' A-.184 (A) i' +ro!ee&s 1hi!h is +er(e!te& /'&er Se!tio' A-.194 or (10) that is +er(e!te& /'&er Se!tio' A-.1:. IcJ #.ssi/nment of perfected securit! interest.' I( a se!/re& +art$ assi-'s a +er(e!te& se!/rit$ i'terest or a-ri!/lt/ral lie'2 a (ili'- /'&er this arti!le is 'ot re7/ire& to !o'ti'/e the +er(e!te& stat/s o( the se!/rit$ i'terest a-ai'st !re&itors o( a'& tra's(erees (ro# the ori-i'al &e%tor. 9-+11. ,%"'%CT#!( !' S%C-"#T/ #(T%"%STS #( ,"!,%"T/ S-1?%CT T! C%"T)#( ST)T-T%S, "%G-$)T#!(S, )(D T"%)T#%S. IaJ #-ecurit! interest su0@ect to other la<.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&)2 the (ili'- o( a (i'a'!i'- state#e't is 'ot 'e!essar$ or e((e!ti)e to +er(e!t a se!/rit$ i'terest i' +ro+ert$ s/%6e!t to0 (1) a stat/te2 re-/latio'2 or treat$ o( the U'ite& States 1hose re7/ire#e'ts (or a se!/rit$ i'terestBs o%tai'i'- +riorit$ o)er the ri-hts o( a lie' !re&itor 1ith res+e!t to the +ro+ert$ +ree#+t Se!tio' A-.10(a)4 (*) list a'$ !erti(i!ate-o(-title stat/te !o)eri'- a/to#o%iles2 trailers2 #o%ile ho#es2 %oats2 (ar# tra!tors2 or the li5e2 1hi!h +ro)i&es (or a se!/rit$ i'terest to %e i'&i!ate& o' the !erti(i!ate as a !o'&itio' or res/lt o( +er(e!tio'2 a'& a'$ 'o'-U'i(or# Co##er!ial Co&e !e'tral (ili'- stat/te"4 or (.) a !erti(i!ate-o(-title stat/te o( a'other 6/ris&i!tio' 1hi!h +ro)i&es (or a se!/rit$ i'terest to %e i'&i!ate& o' the !erti(i!ate as a !o'&itio' or res/lt o( the se!/rit$ i'terestBs o%tai'i'- +riorit$ o)er the ri-hts o( a lie' !re&itor 1ith res+e!t to the +ro+ert$. I0J #Compliance <ith other la<.' Co#+lia'!e 1ith the re7/ire#e'ts o( a stat/te2 re-/latio'2 or treat$ &es!ri%e& i' s/%se!tio' (a) (or o%tai'i'- +riorit$ o)er the ri-hts o( a lie' !re&itor is e7/i)ale't to the (ili'- o( a (i'a'!i'- state#e't /'&er this arti!le. E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&) a'& Se!tio's A-.1. a'& A-.1:(&) a'& (e) (or -oo&s !o)ere& %$ a !erti(i!ate o( title2 a se!/rit$ i'terest i' +ro+ert$ s/%6e!t to a stat/te2 re-/latio'2 or treat$ &es!ri%e& i' s/%se!tio' (a) #a$ %e +er(e!te& o'l$ %$ !o#+lia'!e 1ith those re7/ire#e'ts2 a'& a se!/rit$ i'terest so +er(e!te& re#ai's +er(e!te& 'ot1ithsta'&i'- a !ha'-e i' the /se or tra's(er o( +ossessio' o( the !ollateral. IcJ #3uration and rene<al of perfection.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&) a'& Se!tio' A-.1:(&) a'& (e)2 &/ratio' a'& re'e1al o( +er(e!tio' o( a se!/rit$ i'terest +er(e!te& %$ !o#+lia'!e 1ith the re7/ire#e'ts +res!ri%e& %$ a stat/te2 re-/latio'2 or treat$ &es!ri%e& i' s/%se!tio' (a) are -o)er'e& %$ the stat/te2 re-/latio'2 or treat$. I' other res+e!ts2 the se!/rit$ i'terest is s/%6e!t to this arti!le. IdJ #Inapplica0ilit! to certain in&entor!.' =/ri'- a'$ +erio& i' 1hi!h !ollateral s/%6e!t to a stat/te s+e!i(ie& i' s/%se!tio' (a)(*) is i')e'tor$ hel& (or sale or lease %$ a +erso' or lease& %$ that +erso' as lessor a'& that +erso' is i' the %/si'ess o( selli'- -oo&s o( that 5i'&2 this se!tio' &oes 'ot a++l$ to a se!/rit$ i'terest i' that !ollateral !reate& %$ that +erso'.

 9-+1&. ,%"'%CT#!( !' S%C-"#T/ #(T%"%STS #( C )TT%$ ,),%", D%,!S#T )CC!-(TS, D!C-.%(TS, G!!DS C!5%"%D 1/ D!C-.%(TS, #(ST"-.%(TS, #(5%ST.%(T ,"!,%"T/, $%TT%"-!'-C"%D#T "#G TS, )(D .!(%/0 ,%"'%CT#!( 1/ ,%".#SS#5% '#$#(G0 T%.,!")"/ ,%"'%CT#!( >#T !-T '#$#(G !" T")(S'%" !' ,!SS%SS#!(. IaJ # erfection 0! filin/ permitted.' A se!/rit$ i'terest i' !hattel +a+er2 'e-otia%le &o!/#e'ts2 i'str/#e'ts2 or i')est#e't +ro+ert$ #a$ %e +er(e!te& %$ (ili'-. I0J #Control or possession of certain collateral.' E,!e+t as other1ise +ro)i&e& i' Se!tio' A-.19(!) a'& (&) (or +ro!ee&s0 (1) a se!/rit$ i'terest i' a &e+osit a!!o/'t #a$ %e +er(e!te& o'l$ %$ !o'trol /'&er Se!tio' A-.184 (*) a'& e,!e+t as other1ise +ro)i&e& i' Se!tio' A-.0<(&)2 a se!/rit$ i'terest i' a lettero(-!re&it ri-ht #a$ %e +er(e!te& o'l$ %$ !o'trol /'&er Se!tio' A-.184 a'& (.) a se!/rit$ i'terest i' #o'e$ #a$ %e +er(e!te& o'l$ %$ the se!/re& +art$Bs ta5i'+ossessio' /'&er Se!tio' A-.1.. IcJ #6oods co&ered 0! ne/otia0le document.' Chile -oo&s are i' the +ossessio' o( a %ailee that has iss/e& a 'e-otia%le &o!/#e't !o)eri'- the -oo&s0 (1) a se!/rit$ i'terest i' the -oo&s #a$ %e +er(e!te& %$ +er(e!ti'- a se!/rit$ i'terest i' the &o!/#e't4 a'& (*) a se!/rit$ i'terest +er(e!te& i' the &o!/#e't has +riorit$ o)er a'$ se!/rit$ i'terest that %e!o#es +er(e!te& i' the -oo&s %$ a'other #etho& &/ri'- that ti#e. IdJ #6oods co&ered 0! nonne/otia0le document.' Chile -oo&s are i' the +ossessio' o( a %ailee that has iss/e& a 'o''e-otia%le &o!/#e't !o)eri'- the -oo&s2 a se!/rit$ i'terest i' the -oo&s #a$ %e +er(e!te& %$0 (1) iss/a'!e o( a &o!/#e't i' the 'a#e o( the se!/re& +art$4 (*) the %aileeBs re!ei+t o( 'oti(i!atio' o( the se!/re& +art$Bs i'terest4 or (.) (ili'- as to the -oo&s. IeJ #Temporar! perfectionC ne< &alue.' A se!/rit$ i'terest i' !erti(i!ate& se!/rities2 'e-otia%le &o!/#e'ts2 or i'str/#e'ts is +er(e!te& 1itho/t (ili'- or the ta5i'- o( +ossessio' or !o'trol (or a +erio& o( *0 &a$s (ro# the ti#e it atta!hes to the e,te't that it arises (or 'e1 )al/e -i)e' /'&er a' a/the'ti!ate& se!/rit$ a-ree#e't. IfJ #Temporar! perfectionC /oods or documents made a&aila0le to de0tor.' A +er(e!te& se!/rit$ i'terest i' a 'e-otia%le &o!/#e't or -oo&s i' +ossessio' o( a %ailee2 other tha' o'e that has iss/e& a 'e-otia%le &o!/#e't (or the -oo&s2 re#ai's +er(e!te& (or *0 &a$s 1itho/t (ili'- i( the se!/re& +art$ #a5es a)aila%le to the &e%tor the -oo&s or &o!/#e'ts re+rese'ti'- the -oo&s (or the +/r+ose o(0 (1) /lti#ate sale or e,!ha'-e4 or (*) loa&i'-2 /'loa&i'-2 stori'-2 shi++i'-2 tra'sshi++i'-2 #a'/(a!t/ri'-2 +ro!essi'-2 or other1ise &eali'- 1ith the# i' a #a''er +reli#i'ar$ to their sale or e,!ha'-e. I/J #Temporar! perfectionC deli&er! of securit! certificate or instrument to de0tor.'

A +er(e!te& se!/rit$ i'terest i' a !erti(i!ate& se!/rit$ or i'str/#e't re#ai's +er(e!te& (or *0 &a$s 1itho/t (ili'- i( the se!/re& +art$ &eli)ers the se!/rit$ !erti(i!ate or i'str/#e't to the &e%tor (or the +/r+ose o(0 (1) /lti#ate sale or e,!ha'-e4 or (*) +rese'tatio'2 !olle!tio'2 e'(or!e#e't2 re'e1al2 or re-istratio' o( tra's(er. IhJ #Expiration of temporar! perfection.' A(ter the *0-&a$ +erio& s+e!i(ie& i' s/%se!tio' (e)2 (()2 or (-) e,+ires2 +er(e!tio' &e+e'&s /+o' !o#+lia'!e 1ith this arti!le. 9-+1+. > %( ,!SS%SS#!( 1/ !" D%$#5%"/ T! S%C-"%D ,)"T/ ,%"'%CTS S%C-"#T/ #(T%"%ST >#T !-T '#$#(G. IaJ # erfection 0! possession or deli&er!.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (%)2 a se!/re& +art$ #a$ +er(e!t a se!/rit$ i'terest i' 'e-otia%le &o!/#e'ts2 -oo&s2 i'str/#e'ts2 #o'e$2 or ta'-i%le !hattel +a+er %$ ta5i'- +ossessio' o( the !ollateral. A se!/re& +art$ #a$ +er(e!t a se!/rit$ i'terest i' !erti(i!ate& se!/rities %$ ta5i'- &eli)er$ o( the !erti(i!ate& se!/rities /'&er Se!tio' <.01. I0J #6oods co&ered 0! certificate of title.' Cith res+e!t to -oo&s !o)ere& %$ a !erti(i!ate o( title iss/e& %$ this State2 a se!/re& +art$ #a$ +er(e!t a se!/rit$ i'terest i' the -oo&s %$ ta5i'- +ossessio' o( the -oo&s o'l$ i' the !ir!/#sta'!es &es!ri%e& i' Se!tio' A-.1:(&). IcJ #Collateral in possession of person other than de0tor.' Cith res+e!t to !ollateral other tha' !erti(i!ate& se!/rities a'& -oo&s !o)ere& %$ a &o!/#e't2 a se!/re& +art$ ta5es +ossessio' o( !ollateral i' the +ossessio' o( a +erso' other tha' the &e%tor2 the se!/re& +art$2 or a lessee o( the !ollateral (ro# the &e%tor i' the or&i'ar$ !o/rse o( the &e%torBs %/si'ess2 1he'0 (1) the +erso' i' +ossessio' a/the'ti!ates a re!or& a!5'o1le&-i'- that it hol&s +ossessio' o( the !ollateral (or the se!/re& +art$Bs %e'e(it4 or (*) the +erso' ta5es +ossessio' o( the !ollateral a(ter ha)i'- a/the'ti!ate& a re!or& a!5'o1le&-i'- that it 1ill hol& +ossessio' o( !ollateral (or the se!/re& +art$Bs %e'e(it. IdJ #Time of perfection 0! possession+ continuation of perfection.' I( +er(e!tio' o( a se!/rit$ i'terest &e+e'&s /+o' +ossessio' o( the !ollateral %$ a se!/re& +art$2 +er(e!tio' o!!/rs 'o earlier tha' the ti#e the se!/re& +art$ ta5es +ossessio' a'& !o'ti'/es o'l$ 1hile the se!/re& +art$ retai's +ossessio'. IeJ #Time of perfection 0! deli&er!+ continuation of perfection.' A se!/rit$ i'terest i' a !erti(i!ate& se!/rit$ i' re-istere& (or# is +er(e!te& %$ &eli)er$ 1he' &eli)er$ o( the !erti(i!ate& se!/rit$ o!!/rs /'&er Se!tio' <-.01 a'& re#ai's +er(e!te& %$ &eli)er$ /'til the &e%tor o%tai's +ossessio' o( the se!/rit$ !erti(i!ate. IfJ #.c>no<led/ment not reBuired.' A +erso' i' +ossessio' o( !ollateral is 'ot re7/ire& to a!5'o1le&-e that it hol&s +ossessio' (or a se!/re& +art$Bs %e'e(it. I/J #Effecti&eness of ac>no<led/ment+ no duties or confirmation.' I( a +erso' a!5'o1le&-es that it hol&s +ossessio' (or the se!/re& +art$Bs %e'e(it0 (1) the a!5'o1le&-#e't is e((e!ti)e /'&er s/%se!tio' (!) or Se!tio' <-.01(a)2 e)e' i( the a!5'o1le&-#e't )iolates the ri-hts o( a &e%tor4 a'&

(*) /'less the +erso' other1ise a-rees or la1 other tha' this arti!le other1ise +ro)i&es2 the +erso' &oes 'ot o1e a'$ &/t$ to the se!/re& +art$ a'& is 'ot re7/ire& to !o'(ir# the a!5'o1le&-#e't to a'other +erso'. IhJ #-ecured part!;s deli&er! to person other than de0tor.' A se!/re& +art$ ha)i'- +ossessio' o( !ollateral &oes 'ot reli'7/ish +ossessio' %$ &eli)eri'- the !ollateral to a +erso' other tha' the &e%tor or a lessee o( the !ollateral (ro# the &e%tor i' the or&i'ar$ !o/rse o( the &e%torBs %/si'ess i( the +erso' 1as i'str/!te& %e(ore the &eli)er$ or is i'str/!te& !o'te#+ora'eo/sl$ 1ith the &eli)er$0 (1) to hol& +ossessio' o( the !ollateral (or the se!/re& +art$Bs %e'e(it4 or (*) to re&eli)er the !ollateral to the se!/re& +art$. IiJ #Effect of deli&er! under su0section IhJ+ no duties or confirmation.' A se!/re& +art$ &oes 'ot reli'7/ish +ossessio'2 e)e' i( a &eli)er$ /'&er s/%se!tio' (h) )iolates the ri-hts o( a &e%tor. A +erso' to 1hi!h !ollateral is &eli)ere& /'&er s/%se!tio' (h) &oes 'ot o1e a'$ &/t$ to the se!/re& +art$ a'& is 'ot re7/ire& to !o'(ir# the &eli)er$ to a'other +erso' /'less the +erso' other1ise a-rees or la1 other tha' this arti!le other1ise +ro)i&es. 9-+12. ,%"'%CT#!( 1/ C!(T"!$. IaJ # erfection 0! control.' A se!/rit$ i'terest i' i')est#e't +ro+ert$2 &e+osit a!!o/'ts2 letter-o(-!re&it ri-hts2 or ele!tro'i! !hattel +a+er #a$ %e +er(e!te& %$ !o'trol o( the !ollateral /'&er Se!tio' A1082 A-1092 A-10:2 or A-10;. I0J #-pecified collateralC time of perfection 0! control+ continuation of perfection.' A se!/rit$ i'terest i' &e+osit a!!o/'ts2 ele!tro'i! !hattel +a+er2 or letter-o(-!re&it ri-hts is +er(e!te& %$ !o'trol /'&er Se!tio' A-1082 A-1092 or A-10; 1he' the se!/re& +art$ o%tai's !o'trol a'& re#ai's +er(e!te& %$ !o'trol o'l$ 1hile the se!/re& +art$ retai's !o'trol. IcJ #In&estment propert!C time of perfection 0! control+ continuation of perfection.' A se!/rit$ i'terest i' i')est#e't +ro+ert$ is +er(e!te& %$ !o'trol /'&er Se!tio' A-10: (ro# the ti#e the se!/re& +art$ o%tai's !o'trol a'& re#ai's +er(e!te& %$ !o'trol /'til0 (1) the se!/re& +art$ &oes 'ot ha)e !o'trol4 a'& (*) o'e o( the (ollo1i'- o!!/rs0 (A) i( the !ollateral is a !erti(i!ate& se!/rit$2 the &e%tor has or a!7/ires +ossessio' o( the se!/rit$ !erti(i!ate4 (@) i( the !ollateral is a' /'!erti(i!ate& se!/rit$2 the iss/er has re-istere& or re-isters the &e%tor as the re-istere& o1'er4 or (C) i( the !ollateral is a se!/rit$ e'title#e't2 the &e%tor is or %e!o#es the e'title#e't hol&er. 9-+13. S%C-"%D ,)"T/@S "#G TS !( D#S,!S#T#!( !' C!$$)T%")$ )(D #( ,"!C%%DS. IaJ #3isposition of collateralC continuation of securit! interest or a/ricultural lien+ proceeds.' E,!e+t as other1ise +ro)i&e& i' this arti!le a'& i' Se!tio' *-80.(*)0

(1) a se!/rit$ i'terest or a-ri!/lt/ral lie' !o'ti'/es i' !ollateral 'ot1ithsta'&i'- sale2 lease2 li!e'se2 e,!ha'-e2 or other &is+ositio' thereo( /'less the se!/re& +art$ a/thori3e& the &is+ositio' (ree o( the se!/rit$ i'terest or a-ri!/lt/ral lie'4 a'& (*) a se!/rit$ i'terest atta!hes to a'$ i&e'ti(ia%le +ro!ee&s o( !ollateral. I0J #When commin/led proceeds identifia0le.' Pro!ee&s that are !o##i'-le& 1ith other +ro+ert$ are i&e'ti(ia%le +ro!ee&s0 (1) i( the +ro!ee&s are -oo&s2 to the e,te't +ro)i&e& %$ Se!tio' A-..:4 a'& (*) i( the +ro!ee&s are 'ot -oo&s2 to the e,te't that the se!/re& +art$ i&e'ti(ies the +ro!ee&s %$ a #etho& o( tra!i'-2 i'!l/&i'- a++li!atio' o( e7/ita%le +ri'!i+les2 that is +er#itte& /'&er la1 other tha' this arti!le 1ith res+e!t to !o##i'-le& +ro+ert$ o( the t$+e i')ol)e&. IcJ # erfection of securit! interest in proceeds.' A se!/rit$ i'terest i' +ro!ee&s is a +er(e!te& se!/rit$ i'terest i( the se!/rit$ i'terest i' the ori-i'al !ollateral 1as +er(e!te&. IdJ #Continuation of perfection.' A +er(e!te& se!/rit$ i'terest i' +ro!ee&s %e!o#es /'+er(e!te& o' the *1st &a$ a(ter the se!/rit$ i'terest atta!hes to the +ro!ee&s /'less0 (1) the (ollo1i'- !o'&itio's are satis(ie&0 (A) a (ile& (i'a'!i'- state#e't !o)ers the ori-i'al !ollateral4 (@) the +ro!ee&s are !ollateral i' 1hi!h a se!/rit$ i'terest #a$ %e +er(e!te& %$ (ili'- i' the o((i!e i' 1hi!h the (i'a'!i'- state#e't has %ee' (ile&4 a'& (C) the +ro!ee&s are 'ot a!7/ire& 1ith !ash +ro!ee&s4 (*) the +ro!ee&s are i&e'ti(ia%le !ash +ro!ee&s4 or (.) the se!/rit$ i'terest i' the +ro!ee&s is +er(e!te& other tha' /'&er s/%se!tio' (!) 1he' the se!/rit$ i'terest atta!hes to the +ro!ee&s or 1ithi' *0 &a$s therea(ter. IeJ #When perfected securit! interest in proceeds 0ecomes unperfected.' I( a (ile& (i'a'!i'- state#e't !o)ers the ori-i'al !ollateral2 a se!/rit$ i'terest i' +ro!ee&s 1hi!h re#ai's +er(e!te& /'&er s/%se!tio' (&)(1) %e!o#es /'+er(e!te& at the later o(0 (1) 1he' the e((e!ti)e'ess o( the (ile& (i'a'!i'- state#e't la+ses /'&er Se!tio' A-919 or is ter#i'ate& /'&er Se!tio' A-91.4 or (*) the *1st &a$ a(ter the se!/rit$ i'terest atta!hes to the +ro!ee&s. 9-+14. C!(T#(-%D ,%"'%CT#!( !' S%C-"#T/ #(T%"%ST '!$$!>#(G C )(G% #( G!5%"(#(G $)>. IaJ #6eneral ruleC effect on perfection of chan/e in /o&ernin/ la<.' A se!/rit$ i'terest +er(e!te& +/rs/a't to the la1 o( the 6/ris&i!tio' &esi-'ate& i' Se!tio' A-.01(1) or A-.09(!) re#ai's +er(e!te& /'til the earliest o(0 (1) the ti#e +er(e!tio' 1o/l& ha)e !ease& /'&er the la1 o( that 6/ris&i!tio'4 (*) the e,+iratio' o( (o/r #o'ths a(ter a !ha'-e o( the &e%torBs lo!atio' to a'other 6/ris&i!tio'4 or (.) the e,+iratio' o( o'e $ear a(ter a tra's(er o( !ollateral to a +erso' that there%$ %e!o#es a &e%tor a'& is lo!ate& i' a'other 6/ris&i!tio'. I0J #-ecurit! interest perfected or unperfected under la< of ne< @urisdiction.'

I( a se!/rit$ i'terest &es!ri%e& i' s/%se!tio' (a) %e!o#es +er(e!te& /'&er the la1 o( the other 6/ris&i!tio' %e(ore the earliest ti#e or e)e't &es!ri%e& i' that s/%se!tio'2 it re#ai's +er(e!te& therea(ter. I( the se!/rit$ i'terest &oes 'ot %e!o#e +er(e!te& /'&er the la1 o( the other 6/ris&i!tio' %e(ore the earliest ti#e or e)e't2 it %e!o#es /'+er(e!te& a'& is &ee#e& 'e)er to ha)e %ee' +er(e!te& as a-ai'st a +/r!haser o( the !ollateral (or )al/e. IcJ # ossessor! securit! interest in collateral mo&ed to ne< @urisdiction.' A +ossessor$ se!/rit$ i'terest i' !ollateral2 other tha' -oo&s !o)ere& %$ a !erti(i!ate o( title a'& as-e,tra!te& !ollateral !o'sisti'- o( -oo&s2 re#ai's !o'ti'/o/sl$ +er(e!te& i(0 (1) the !ollateral is lo!ate& i' o'e 6/ris&i!tio' a'& s/%6e!t to a se!/rit$ i'terest +er(e!te& /'&er the la1 o( that 6/ris&i!tio'4 (*) therea(ter the !ollateral is %ro/-ht i'to a'other 6/ris&i!tio'4 a'& (.) /+o' e'tr$ i'to the other 6/ris&i!tio'2 the se!/rit$ i'terest is +er(e!te& /'&er the la1 o( the other 6/ris&i!tio'. IdJ #6oods co&ered 0! certificate of title from this state.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (e)2 a se!/rit$ i'terest i' -oo&s !o)ere& %$ a !erti(i!ate o( title 1hi!h is +er(e!te& %$ a'$ #etho& /'&er the la1 o( a'other 6/ris&i!tio' 1he' the -oo&s %e!o#e !o)ere& %$ a !erti(i!ate o( title (ro# this State re#ai's +er(e!te& /'til the se!/rit$ i'terest 1o/l& ha)e %e!o#e /'+er(e!te& /'&er the la1 o( the other 6/ris&i!tio' ha& the -oo&s 'ot %e!o#e so !o)ere&. IeJ #When su0section IdJ securit! interest 0ecomes unperfected a/ainst purchasers.' A se!/rit$ i'terest &es!ri%e& i' s/%se!tio' (&) %e!o#es /'+er(e!te& as a-ai'st a +/r!haser o( the -oo&s (or )al/e a'& is &ee#e& 'e)er to ha)e %ee' +er(e!te& as a-ai'st a +/r!haser o( the -oo&s (or )al/e i( the a++li!a%le re7/ire#e'ts (or +er(e!tio' /'&er Se!tio' A-.11(%) or A-.1. are 'ot satis(ie& %e(ore the earlier o(0 (1) the ti#e the se!/rit$ i'terest 1o/l& ha)e %e!o#e /'+er(e!te& /'&er the la1 o( the other 6/ris&i!tio' ha& the -oo&s 'ot %e!o#e !o)ere& %$ a !erti(i!ate o( title (ro# this State4 or (*) the e,+iratio' o( (o/r #o'ths a(ter the -oo&s ha& %e!o#e so !o)ere&. IfJ #Chan/e in @urisdiction of 0an>2 issuer2 nominated person2 securities intermediar!2 or commodit! intermediar!.' A se!/rit$ i'terest i' &e+osit a!!o/'ts2 letter-o(-!re&it ri-hts2 or i')est#e't +ro+ert$ 1hi!h is +er(e!te& /'&er the la1 o( the %a'5Bs 6/ris&i!tio'2 the iss/erBs 6/ris&i!tio'2 a 'o#i'ate& +erso'Bs 6/ris&i!tio'2 the se!/rities i'ter#e&iar$Bs 6/ris&i!tio'2 or the !o##o&it$ i'ter#e&iar$Bs 6/ris&i!tio'2 as a++li!a%le2 re#ai's +er(e!te& /'til the earlier o(0 (1) the ti#e the se!/rit$ i'terest 1o/l& ha)e %e!o#e /'+er(e!te& /'&er the la1 o( that 6/ris&i!tio'4 or (*) the e,+iratio' o( (o/r #o'ths a(ter a !ha'-e o( the a++li!a%le 6/ris&i!tio' to a'other 6/ris&i!tio'. I/J #-u0section IfJ securit! interest perfected or unperfected under la< of ne< @urisdiction.'

I( a se!/rit$ i'terest &es!ri%e& i' s/%se!tio' (() %e!o#es +er(e!te& /'&er the la1 o( the other 6/ris&i!tio' %e(ore the earlier o( the ti#e or the e'& o( the +erio& &es!ri%e& i' that s/%se!tio'2 it re#ai's +er(e!te& therea(ter. I( the se!/rit$ i'terest &oes 'ot %e!o#e +er(e!te& /'&er the la1 o( the other 6/ris&i!tio' %e(ore the earlier o( that ti#e or the e'& o( that +erio&2 it %e!o#es /'+er(e!te& a'& is &ee#e& 'e)er to ha)e %ee' +er(e!te& as a-ai'st a +/r!haser o( the !ollateral (or )al/e. [Subpart +. ,riorit8] 9-+16. #(T%"%STS T )T T)A% ,"#!"#T/ !5%" !" T)A% '"%% !' S%C-"#T/ #(T%"%ST !" )G"#C-$T-")$ $#%(. IaJ #Conflictin/ securit! interests and ri/hts of lien creditors.' A se!/rit$ i'terest or a-ri!/lt/ral lie' is s/%or&i'ate to the ri-hts o(0 (1) a +erso' e'title& to +riorit$ /'&er Se!tio' A-.**4 a'& (*) e,!e+t as other1ise +ro)i&e& i' s/%se!tio' (e)2 a +erso' that %e!o#es a lie' !re&itor %e(ore the earlier o( the ti#e0 (A) the se!/rit$ i'terest or a-ri!/lt/ral lie' is +er(e!te&4 or (@) o'e o( the !o'&itio's s+e!i(ie& i' Se!tio' A-*0.(%)(.) is #et a'& a (i'a'!i'state#e't !o)eri'- the !ollateral is (ile&. I0J #"u!ers that recei&e deli&er!.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (e)2 a %/$er2 other tha' a se!/re& +art$2 o( ta'-i%le !hattel +a+er2 &o!/#e'ts2 -oo&s2 i'str/#e'ts2 or a se!/rit$ !erti(i!ate ta5es (ree o( a se!/rit$ i'terest or a-ri!/lt/ral lie' i( the %/$er -i)es )al/e a'& re!ei)es &eli)er$ o( the !ollateral 1itho/t 5'o1le&-e o( the se!/rit$ i'terest or a-ri!/lt/ral lie' a'& %e(ore it is +er(e!te&. IcJ #*essees that recei&e deli&er!.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (e)2 a lessee o( -oo&s ta5es (ree o( a se!/rit$ i'terest or a-ri!/lt/ral lie' i( the lessee -i)es )al/e a'& re!ei)es &eli)er$ o( the !ollateral 1itho/t 5'o1le&-e o( the se!/rit$ i'terest or a-ri!/lt/ral lie' a'& %e(ore it is +er(e!te&. IdJ #*icensees and 0u!ers of certain collateral.' A li!e'see o( a -e'eral i'ta'-i%le or a %/$er2 other tha' a se!/re& +art$2 o( a!!o/'ts2 ele!tro'i! !hattel +a+er2 -e'eral i'ta'-i%les2 or i')est#e't +ro+ert$ other tha' a !erti(i!ate& se!/rit$ ta5es (ree o( a se!/rit$ i'terest i( the li!e'see or %/$er -i)es )al/e 1itho/t 5'o1le&-e o( the se!/rit$ i'terest a'& %e(ore it is +er(e!te&. IeJ # urchase-mone! securit! interest.' E,!e+t as other1ise +ro)i&e& i' Se!tio's A-.*0 a'& A-.*12 i( a +erso' (iles a (i'a'!i'state#e't 1ith res+e!t to a +/r!hase-#o'e$ se!/rit$ i'terest %e(ore or 1ithi' *0 &a$s a(ter the &e%tor re!ei)es &eli)er$ o( the !ollateral2 the se!/rit$ i'terest ta5es +riorit$ o)er the ri-hts o( a %/$er2 lessee2 or lie' !re&itor 1hi!h arise %et1ee' the ti#e the se!/rit$ i'terest atta!hes a'& the ti#e o( (ili'-. 9-+17. (! #(T%"%ST "%T)#(%D #( "#G T T! ,)/.%(T T )T #S S!$D0 "#G TS )(D T#T$% !' S%$$%" !' )CC!-(T !" C )TT%$ ,),%" >#T "%S,%CT T! C"%D#T!"S )(D ,-"C )S%"S. IaJ #-eller retains no interest.'

A &e%tor that has sol& a' a!!o/'t2 !hattel +a+er2 +a$#e't i'ta'-i%le2 or +ro#issor$ 'ote &oes 'ot retai' a le-al or e7/ita%le i'terest i' the !ollateral sol&. I0J #3eemed ri/hts of de0tor if 0u!er;s securit! interest unperfected.' >or +/r+oses o( &eter#i'i'- the ri-hts o( !re&itors o(2 a'& +/r!hasers (or )al/e o( a' a!!o/'t or !hattel +a+er (ro#2 a &e%tor that has sol& a' a!!o/'t or !hattel +a+er2 1hile the %/$erBs se!/rit$ i'terest is /'+er(e!te&2 the &e%tor is &ee#e& to ha)e ri-hts a'& title to the a!!o/'t or !hattel +a+er i&e'ti!al to those the &e%tor sol&. 9-+19. "#G TS )(D T#T$% !' C!(S#G(%% >#T "%S,%CT T! C"%D#T!"S )(D ,-"C )S%"S. IaJ #Consi/nee has consi/nor;s ri/hts.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (%)2 (or +/r+oses o( &eter#i'i'- the ri-hts o( !re&itors o(2 a'& +/r!hasers (or )al/e o( -oo&s (ro#2 a !o'si-'ee2 1hile the -oo&s are i' the +ossessio' o( the !o'si-'ee2 the !o'si-'ee is &ee#e& to ha)e ri-hts a'& title to the -oo&s i&e'ti!al to those the !o'si-'or ha& or ha& +o1er to tra's(er. I0J #.pplica0ilit! of other la<.' >or +/r+oses o( &eter#i'i'- the ri-hts o( a !re&itor o( a !o'si-'ee2 la1 other tha' this arti!le &eter#i'es the ri-hts a'& title o( a !o'si-'ee 1hile -oo&s are i' the !o'si-'eeBs +ossessio' i(2 /'&er this +art2 a +er(e!te& se!/rit$ i'terest hel& %$ the !o'si-'or 1o/l& ha)e +riorit$ o)er the ri-hts o( the !re&itor. 9-+&0. 1-/%" !' G!!DS. IaJ #"u!er in ordinar! course of 0usiness.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (e)2 a %/$er i' or&i'ar$ !o/rse o( %/si'ess2 other tha' a +erso' %/$i'- (ar# +ro&/!ts (ro# a +erso' e'-a-e& i' (ar#i'- o+eratio's2 ta5es (ree o( a se!/rit$ i'terest !reate& %$ the %/$erBs seller2 e)e' i( the se!/rit$ i'terest is +er(e!te& a'& the %/$er 5'o1s o( its e,iste'!e. I0J #"u!er of consumer /oods.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (e)2 a %/$er o( -oo&s (ro# a +erso' 1ho /se& or %o/-ht the -oo&s (or /se +ri#aril$ (or +erso'al2 (a#il$2 or ho/sehol& +/r+oses ta5es (ree o( a se!/rit$ i'terest2 e)e' i( +er(e!te&2 i( the %/$er %/$s0 (1) 1itho/t 5'o1le&-e o( the se!/rit$ i'terest4 (*) (or )al/e4 (.) +ri#aril$ (or the %/$erBs +erso'al2 (a#il$2 or ho/sehol& +/r+oses4 a'& (8) %e(ore the (ili'- o( a (i'a'!i'- state#e't !o)eri'- the -oo&s. IcJ #Effecti&eness of filin/ for su0section I0J.' To the e,te't that it a((e!ts the +riorit$ o( a se!/rit$ i'terest o)er a %/$er o( -oo&s /'&er s/%se!tio' (%)2 the +erio& o( e((e!ti)e'ess o( a (ili'- #a&e i' the 6/ris&i!tio' i' 1hi!h the seller is lo!ate& is -o)er'e& %$ Se!tio' A-.1:(a) a'& (%). IdJ #"u!er in ordinar! course of 0usiness at <ellhead or minehead.' A %/$er i' or&i'ar$ !o/rse o( %/si'ess %/$i'- oil2 -as2 or other #i'erals at the 1ellhea& or #i'ehea& or a(ter e,tra!tio' ta5es (ree o( a' i'terest arisi'- o/t o( a' e'!/#%ra'!e. IeJ # ossessor! securit! interest not affected.' S/%se!tio's (a) a'& (%) &o 'ot a((e!t a se!/rit$ i'terest i' -oo&s i' the +ossessio' o( the se!/re& +art$ /'&er Se!tio' A-.1..

 9-+&1. $#C%(S%% !' G%(%")$ #(T)(G#1$% )(D $%SS%% !' G!!DS #( !"D#()"/ C!-"S% !' 1-S#(%SS. IaJ #)*icensee in ordinar! course of 0usiness.)' I' this se!tio'2 ?li!e'see i' or&i'ar$ !o/rse o( %/si'ess? #ea's a +erso' that %e!o#es a li!e'see o( a -e'eral i'ta'-i%le i' -oo& (aith2 1itho/t 5'o1le&-e that the li!e'se )iolates the ri-hts o( a'other +erso' i' the -e'eral i'ta'-i%le2 a'& i' the or&i'ar$ !o/rse (ro# a +erso' i' the %/si'ess o( li!e'si'- -e'eral i'ta'-i%les o( that 5i'&. A +erso' %e!o#es a li!e'see i' the or&i'ar$ !o/rse i( the li!e'se to the +erso' !o#+orts 1ith the /s/al or !/sto#ar$ +ra!ti!es i' the 5i'& o( %/si'ess i' 1hi!h the li!e'sor is e'-a-e& or 1ith the li!e'sorBs o1' /s/al or !/sto#ar$ +ra!ti!es. I0J #%i/hts of licensee in ordinar! course of 0usiness.' A li!e'see i' or&i'ar$ !o/rse o( %/si'ess ta5es its ri-hts /'&er a 'o'e,!l/si)e li!e'se (ree o( a se!/rit$ i'terest i' the -e'eral i'ta'-i%le !reate& %$ the li!e'sor2 e)e' i( the se!/rit$ i'terest is +er(e!te& a'& the li!e'see 5'o1s o( its e,iste'!e. IcJ #%i/hts of lessee in ordinar! course of 0usiness.' A lessee i' or&i'ar$ !o/rse o( %/si'ess ta5es its leasehol& i'terest (ree o( a se!/rit$ i'terest i' the -oo&s !reate& %$ the lessor2 e)e' i( the se!/rit$ i'terest is +er(e!te& a'& the lessee 5'o1s o( its e,iste'!e. 9-+&&. ,"#!"#T#%S ).!(G C!('$#CT#(G S%C-"#T/ #(T%"%STS #( )(D )G"#C-$T-")$ $#%(S !( S).% C!$$)T%")$. IaJ #6eneral priorit! rules.' E,!e+t as other1ise +ro)i&e& i' this se!tio'2 +riorit$ a#o'- !o'(li!ti'- se!/rit$ i'terests a'& a-ri!/lt/ral lie's i' the sa#e !ollateral is &eter#i'e& a!!or&i'- to the (ollo1i'r/les0 (1) Co'(li!ti'- +er(e!te& se!/rit$ i'terests a'& a-ri!/lt/ral lie's ra'5 a!!or&i'- to +riorit$ i' ti#e o( (ili'- or +er(e!tio'. Priorit$ &ates (ro# the earlier o( the ti#e a (ili'!o)eri'- the !ollateral is (irst #a&e or the se!/rit$ i'terest or a-ri!/lt/ral lie' is (irst +er(e!te&2 i( there is 'o +erio& therea(ter 1he' there is 'either (ili'- 'or +er(e!tio'. (*) A +er(e!te& se!/rit$ i'terest or a-ri!/lt/ral lie' has +riorit$ o)er a !o'(li!ti'/'+er(e!te& se!/rit$ i'terest or a-ri!/lt/ral lie'. (.) The (irst se!/rit$ i'terest or a-ri!/lt/ral lie' to atta!h or %e!o#e e((e!ti)e has +riorit$ i( !o'(li!ti'- se!/rit$ i'terests a'& a-ri!/lt/ral lie's are /'+er(e!te&. I0J #Time of perfectionC proceeds and supportin/ o0li/ations.' >or the +/r+oses o( s/%se!tio' (a)(1)0 (1) the ti#e o( (ili'- or +er(e!tio' as to a se!/rit$ i'terest i' !ollateral is also the ti#e o( (ili'- or +er(e!tio' as to a se!/rit$ i'terest i' +ro!ee&s4 a'& (*) the ti#e o( (ili'- or +er(e!tio' as to a se!/rit$ i'terest i' !ollateral s/++orte& %$ a s/++orti'- o%li-atio' is also the ti#e o( (ili'- or +er(e!tio' as to a se!/rit$ i'terest i' the s/++orti'- o%li-atio'. IcJ #-pecial priorit! rulesC proceeds and supportin/ o0li/ations.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (()2 a se!/rit$ i'terest i' !ollateral 1hi!h 7/ali(ies (or +riorit$ o)er a !o'(li!ti'- se!/rit$ i'terest /'&er Se!tio' A-.*;2 A-.*<2 A.*A2 A-..02 or A-..1 also has +riorit$ o)er a !o'(li!ti'- se!/rit$ i'terest i'0 (1) a'$ s/++orti'- o%li-atio' (or the !ollateral4 a'&

(*) +ro!ee&s o( the !ollateral i(0 (A) the se!/rit$ i'terest i' +ro!ee&s is +er(e!te&4 (@) the +ro!ee&s are !ash +ro!ee&s or o( the sa#e t$+e as the !ollateral4 a'& (C) i' the !ase o( +ro!ee&s that are +ro!ee&s o( +ro!ee&s2 all i'ter)e'i'- +ro!ee&s are !ash +ro!ee&s2 +ro!ee&s o( the sa#e t$+e as the !ollateral2 or a' a!!o/'t relati'- to the !ollateral. IdJ #7irst-to-file priorit! rule for certain collateral.' S/%6e!t to s/%se!tio' (e) a'& e,!e+t as other1ise +ro)i&e& i' s/%se!tio' (()2 i( a se!/rit$ i'terest i' !hattel +a+er2 &e+osit a!!o/'ts2 'e-otia%le &o!/#e'ts2 i'str/#e'ts2 i')est#e't +ro+ert$2 or letter-o(-!re&it ri-hts is +er(e!te& %$ a #etho& other tha' (ili'-2 !o'(li!ti'- +er(e!te& se!/rit$ i'terests i' +ro!ee&s o( the !ollateral ra'5 a!!or&i'- to +riorit$ i' ti#e o( (ili'-. IeJ #.pplica0ilit! of su0section IdJ.' S/%se!tio' (&) a++lies o'l$ i( the +ro!ee&s o( the !ollateral are 'ot !ash +ro!ee&s2 !hattel +a+er2 'e-otia%le &o!/#e'ts2 i'str/#e'ts2 i')est#e't +ro+ert$2 or letter-o(!re&it ri-hts. IfJ #*imitations on su0sections IaJ throu/h IeJ.' S/%se!tio's (a) thro/-h (e) are s/%6e!t to0 (1) s/%se!tio' (-) a'& the other +ro)isio's o( this +art4 (*) Se!tio' 8-*10 1ith res+e!t to a se!/rit$ i'terest o( a !olle!ti'- %a'54 (.) Se!tio' 9-11< 1ith res+e!t to a se!/rit$ i'terest o( a' iss/er or 'o#i'ate& +erso'4 a'& (8) Se!tio' A-110 1ith res+e!t to a se!/rit$ i'terest arisi'- /'&er Arti!le * or *A. I/J # riorit! under a/ricultural lien statute.' A +er(e!te& a-ri!/lt/ral lie' o' !ollateral has +riorit$ o)er a !o'(li!ti'- se!/rit$ i'terest i' or a-ri!/lt/ral lie' o' the sa#e !ollateral i( the stat/te !reati'- the a-ri!/lt/ral lie' so +ro)i&es. 9-+&+. '-T-"% )D5)(C%S. IaJ #When priorit! 0ased on time of ad&ance.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (!)2 (or +/r+oses o( &eter#i'i'- the +riorit$ o( a +er(e!te& se!/rit$ i'terest /'&er Se!tio' A-.**(a)(1)2 +er(e!tio' o( the se!/rit$ i'terest &ates (ro# the ti#e a' a&)a'!e is #a&e to the e,te't that the se!/rit$ i'terest se!/res a' a&)a'!e that0 (1) is #a&e 1hile the se!/rit$ i'terest is +er(e!te& o'l$0 (A) /'&er Se!tio' A-.0A 1he' it atta!hes4 or (@) te#+oraril$ /'&er Se!tio' A-.1*(e)2 (()2 or (-)4 a'& (*) is 'ot #a&e +/rs/a't to a !o##it#e't e'tere& i'to %e(ore or 1hile the se!/rit$ i'terest is +er(e!te& %$ a #etho& other tha' /'&er Se!tio' A-.0A or A-.1*(e)2 (()2 or (-). I0J #*ien creditor.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (!)2 a se!/rit$ i'terest is s/%or&i'ate to the ri-hts o( a +erso' that %e!o#es a lie' !re&itor to the e,te't that the se!/rit$ i'terest se!/res a' a&)a'!e #a&e #ore tha' 89 &a$s a(ter the +erso' %e!o#es a lie' !re&itor /'less the a&)a'!e is #a&e0

(1) 1itho/t 5'o1le&-e o( the lie'4 or (*) +/rs/a't to a !o##it#e't e'tere& i'to 1itho/t 5'o1le&-e o( the lie'. IcJ #"u!er of recei&a0les.' S/%se!tio's (a) a'& (%) &o 'ot a++l$ to a se!/rit$ i'terest hel& %$ a se!/re& +art$ that is a %/$er o( a!!o/'ts2 !hattel +a+er2 +a$#e't i'ta'-i%les2 or +ro#issor$ 'otes or a !o'si-'or. IdJ #"u!er of /oods.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (e)2 a %/$er o( -oo&s other tha' a %/$er i' or&i'ar$ !o/rse o( %/si'ess ta5es (ree o( a se!/rit$ i'terest to the e,te't that it se!/res a&)a'!es #a&e a(ter the earlier o(0 (1) the ti#e the se!/re& +art$ a!7/ires 5'o1le&-e o( the %/$erBs +/r!hase4 or (*) 89 &a$s a(ter the +/r!hase. IeJ #.d&ances made pursuant to commitmentC priorit! of 0u!er of /oods.' S/%se!tio' (&) &oes 'ot a++l$ i( the a&)a'!e is #a&e +/rs/a't to a !o##it#e't e'tere& i'to 1itho/t 5'o1le&-e o( the %/$erBs +/r!hase a'& %e(ore the e,+iratio' o( the 89-&a$ +erio&. IfJ #*essee of /oods.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (-)2 a lessee o( -oo&s2 other tha' a lessee i' or&i'ar$ !o/rse o( %/si'ess2 ta5es the leasehol& i'terest (ree o( a se!/rit$ i'terest to the e,te't that it se!/res a&)a'!es #a&e a(ter the earlier o(0 (1) the ti#e the se!/re& +art$ a!7/ires 5'o1le&-e o( the lease4 or (*) 89 &a$s a(ter the lease !o'tra!t %e!o#es e'(or!ea%le. I/J #.d&ances made pursuant to commitmentC priorit! of lessee of /oods.' S/%se!tio' (() &oes 'ot a++l$ i( the a&)a'!e is #a&e +/rs/a't to a !o##it#e't e'tere& i'to 1itho/t 5'o1le&-e o( the lease a'& %e(ore the e,+iratio' o( the 89-&a$ +erio&. 9-+&2. ,"#!"#T/ !' ,-"C )S%-.!(%/ S%C-"#T/ #(T%"%STS. IaJ #6eneral ruleC purchase-mone! priorit!.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (-)2 a +er(e!te& +/r!hase-#o'e$ se!/rit$ i'terest i' -oo&s other tha' i')e'tor$ or li)esto!5 has +riorit$ o)er a !o'(li!ti'- se!/rit$ i'terest i' the sa#e -oo&s2 a'&2 e,!e+t as other1ise +ro)i&e& i' Se!tio' A-.*;2 a +er(e!te& se!/rit$ i'terest i' its i&e'ti(ia%le +ro!ee&s also has +riorit$2 i( the +/r!hase#o'e$ se!/rit$ i'terest is +er(e!te& 1he' the &e%tor re!ei)es +ossessio' o( the !ollateral or 1ithi' *0 &a$s therea(ter. I0J #In&entor! purchase-mone! priorit!.' S/%6e!t to s/%se!tio' (!) a'& e,!e+t as other1ise +ro)i&e& i' s/%se!tio' (-)2 a +er(e!te& +/r!hase-#o'e$ se!/rit$ i'terest i' i')e'tor$ has +riorit$ o)er a !o'(li!ti'se!/rit$ i'terest i' the sa#e i')e'tor$2 has +riorit$ o)er a !o'(li!ti'- se!/rit$ i'terest i' !hattel +a+er or a' i'str/#e't !o'stit/ti'- +ro!ee&s o( the i')e'tor$ a'& i' +ro!ee&s o( the !hattel +a+er2 i( so +ro)i&e& i' Se!tio' A-..02 a'&2 e,!e+t as other1ise +ro)i&e& i' Se!tio' A-.*;2 also has +riorit$ i' i&e'ti(ia%le !ash +ro!ee&s o( the i')e'tor$ to the e,te't the i&e'ti(ia%le !ash +ro!ee&s are re!ei)e& o' or %e(ore the &eli)er$ o( the i')e'tor$ to a %/$er2 i(0 (1) the +/r!hase-#o'e$ se!/rit$ i'terest is +er(e!te& 1he' the &e%tor re!ei)es +ossessio' o( the i')e'tor$4

(*) the +/r!hase-#o'e$ se!/re& +art$ se'&s a' a/the'ti!ate& 'oti(i!atio' to the hol&er o( the !o'(li!ti'- se!/rit$ i'terest4 (.) the hol&er o( the !o'(li!ti'- se!/rit$ i'terest re!ei)es the 'oti(i!atio' 1ithi' (i)e $ears %e(ore the &e%tor re!ei)es +ossessio' o( the i')e'tor$4 a'& (8) the 'oti(i!atio' states that the +erso' se'&i'- the 'oti(i!atio' has or e,+e!ts to a!7/ire a +/r!hase-#o'e$ se!/rit$ i'terest i' i')e'tor$ o( the &e%tor a'& &es!ri%es the i')e'tor$. IcJ #8olders of conflictin/ in&entor! securit! interests to 0e notified.' S/%se!tio's (%)(*) thro/-h (8) a++l$ o'l$ i( the hol&er o( the !o'(li!ti'- se!/rit$ i'terest ha& (ile& a (i'a'!i'- state#e't !o)eri'- the sa#e t$+es o( i')e'tor$0 (1) i( the +/r!hase-#o'e$ se!/rit$ i'terest is +er(e!te& %$ (ili'-2 %e(ore the &ate o( the (ili'-4 or (*) i( the +/r!hase-#o'e$ se!/rit$ i'terest is te#+oraril$ +er(e!te& 1itho/t (ili'- or +ossessio' /'&er Se!tio' A-.1*(()2 %e(ore the %e-i''i'- o( the *0-&a$ +erio& there/'&er. IdJ #*i&estoc> purchase-mone! priorit!.' S/%6e!t to s/%se!tio' (e) a'& e,!e+t as other1ise +ro)i&e& i' s/%se!tio' (-)2 a +er(e!te& +/r!hase-#o'e$ se!/rit$ i'terest i' li)esto!5 that are (ar# +ro&/!ts has +riorit$ o)er a !o'(li!ti'- se!/rit$ i'terest i' the sa#e li)esto!52 a'&2 e,!e+t as other1ise +ro)i&e& i' Se!tio' A-.*;2 a +er(e!te& se!/rit$ i'terest i' their i&e'ti(ia%le +ro!ee&s a'& i&e'ti(ia%le +ro&/!ts i' their /'#a'/(a!t/re& states also has +riorit$2 i(0 (1) the +/r!hase-#o'e$ se!/rit$ i'terest is +er(e!te& 1he' the &e%tor re!ei)es +ossessio' o( the li)esto!54 (*) the +/r!hase-#o'e$ se!/re& +art$ se'&s a' a/the'ti!ate& 'oti(i!atio' to the hol&er o( the !o'(li!ti'- se!/rit$ i'terest4 (.) the hol&er o( the !o'(li!ti'- se!/rit$ i'terest re!ei)es the 'oti(i!atio' 1ithi' si, #o'ths %e(ore the &e%tor re!ei)es +ossessio' o( the li)esto!54 a'& (8) the 'oti(i!atio' states that the +erso' se'&i'- the 'oti(i!atio' has or e,+e!ts to a!7/ire a +/r!hase-#o'e$ se!/rit$ i'terest i' li)esto!5 o( the &e%tor a'& &es!ri%es the li)esto!5. IeJ #8olders of conflictin/ li&estoc> securit! interests to 0e notified.' S/%se!tio's (&)(*) thro/-h (8) a++l$ o'l$ i( the hol&er o( the !o'(li!ti'- se!/rit$ i'terest ha& (ile& a (i'a'!i'- state#e't !o)eri'- the sa#e t$+es o( li)esto!50 (1) i( the +/r!hase-#o'e$ se!/rit$ i'terest is +er(e!te& %$ (ili'-2 %e(ore the &ate o( the (ili'-4 or (*) i( the +/r!hase-#o'e$ se!/rit$ i'terest is te#+oraril$ +er(e!te& 1itho/t (ili'- or +ossessio' /'&er Se!tio' A-.1*(()2 %e(ore the %e-i''i'- o( the *0-&a$ +erio& there/'&er. IfJ #-oft<are purchase-mone! priorit!.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (-)2 a +er(e!te& +/r!hase-#o'e$ se!/rit$ i'terest i' so(t1are has +riorit$ o)er a !o'(li!ti'- se!/rit$ i'terest i' the sa#e !ollateral2 a'&2 e,!e+t as other1ise +ro)i&e& i' Se!tio' A-.*;2 a +er(e!te& se!/rit$ i'terest i' its i&e'ti(ia%le +ro!ee&s also has +riorit$2 to the e,te't that the +/r!hase-#o'e$ se!/rit$

i'terest i' the -oo&s i' 1hi!h the so(t1are 1as a!7/ire& (or /se has +riorit$ i' the -oo&s a'& +ro!ee&s o( the -oo&s /'&er this se!tio'. I/J #Conflictin/ purchase-mone! securit! interests.' I( #ore tha' o'e se!/rit$ i'terest 7/ali(ies (or +riorit$ i' the sa#e !ollateral /'&er s/%se!tio' (a)2 (%)2 (&)2 or (()0 (1) a se!/rit$ i'terest se!/ri'- a' o%li-atio' i'!/rre& as all or +art o( the +ri!e o( the !ollateral has +riorit$ o)er a se!/rit$ i'terest se!/ri'- a' o%li-atio' i'!/rre& (or )al/e -i)e' to e'a%le the &e%tor to a!7/ire ri-hts i' or the /se o( !ollateral4 a'& (*) i' all other !ases2 Se!tio' A-.**(a) a++lies to the 7/ali($i'- se!/rit$ i'terests. 9-+&3. ,"#!"#T/ !' S%C-"#T/ #(T%"%STS #( T")(S'%""%D C!$$)T%")$. IaJ #-u0ordination of securit! interest in transferred collateral.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (%)2 a se!/rit$ i'terest !reate& %$ a &e%tor is s/%or&i'ate to a se!/rit$ i'terest i' the sa#e !ollateral !reate& %$ a'other +erso' i(0 (1) the &e%tor a!7/ire& the !ollateral s/%6e!t to the se!/rit$ i'terest !reate& %$ the other +erso'4 (*) the se!/rit$ i'terest !reate& %$ the other +erso' 1as +er(e!te& 1he' the &e%tor a!7/ire& the !ollateral4 a'& (.) there is 'o +erio& therea(ter 1he' the se!/rit$ i'terest is /'+er(e!te&. I0J #*imitation of su0section IaJ su0ordination.' S/%se!tio' (a) s/%or&i'ates a se!/rit$ i'terest o'l$ i( the se!/rit$ i'terest0 (1) other1ise 1o/l& ha)e +riorit$ solel$ /'&er Se!tio' A-.**(a) or A-.*84 or (*) arose solel$ /'&er Se!tio' *-;11(.) or *A-90<(9). 9-+&4. ,"#!"#T/ !' S%C-"#T/ #(T%"%STS C"%)T%D 1/ (%> D%1T!". IaJ #-u0ordination of securit! interest created 0! ne< de0tor.' S/%6e!t to s/%se!tio' (%)2 a se!/rit$ i'terest !reate& %$ a 'e1 &e%tor 1hi!h is +er(e!te& %$ a (ile& (i'a'!i'- state#e't that is e((e!ti)e solel$ /'&er Se!tio' A-90< i' !ollateral i' 1hi!h a 'e1 &e%tor has or a!7/ires ri-hts is s/%or&i'ate to a se!/rit$ i'terest i' the sa#e !ollateral 1hi!h is +er(e!te& other tha' %$ a (ile& (i'a'!i'- state#e't that is e((e!ti)e solel$ /'&er Se!tio' A-90<. I0J # riorit! under other pro&isions+ multiple ori/inal de0tors.' The other +ro)isio's o( this +art &eter#i'e the +riorit$ a#o'- !o'(li!ti'- se!/rit$ i'terests i' the sa#e !ollateral +er(e!te& %$ (ile& (i'a'!i'- state#e'ts that are e((e!ti)e solel$ /'&er Se!tio' A-90<. Do1e)er2 i( the se!/rit$ a-ree#e'ts to 1hi!h a 'e1 &e%tor %e!a#e %o/'& as &e%tor 1ere 'ot e'tere& i'to %$ the sa#e ori-i'al &e%tor2 the !o'(li!ti'- se!/rit$ i'terests ra'5 a!!or&i'- to +riorit$ i' ti#e o( the 'e1 &e%torBs ha)i'%e!o#e %o/'&. 9-+&6. ,"#!"#T/ !' S%C-"#T/ #(T%"%STS #( D%,!S#T )CC!-(T. The (ollo1i'- r/les -o)er' +riorit$ a#o'- !o'(li!ti'- se!/rit$ i'terests i' the sa#e &e+osit a!!o/'t0 (1) A se!/rit$ i'terest hel& %$ a se!/re& +art$ ha)i'- !o'trol o( the &e+osit a!!o/'t /'&er Se!tio' A-108 has +riorit$ o)er a !o'(li!ti'- se!/rit$ i'terest hel& %$ a se!/re& +art$ that &oes 'ot ha)e !o'trol. (*) E,!e+t as other1ise +ro)i&e& i' +ara-ra+hs (.) a'& (8)2 se!/rit$ i'terests +er(e!te& %$ !o'trol /'&er Se!tio' A-.18 ra'5 a!!or&i'- to +riorit$ i' ti#e o( o%tai'i'- !o'trol.

(.) E,!e+t as other1ise +ro)i&e& i' +ara-ra+h (8)2 a se!/rit$ i'terest hel& %$ the %a'5 1ith 1hi!h the &e+osit a!!o/'t is #ai'tai'e& has +riorit$ o)er a !o'(li!ti'- se!/rit$ i'terest hel& %$ a'other se!/re& +art$. (8) A se!/rit$ i'terest +er(e!te& %$ !o'trol /'&er Se!tio' A-108(a)(.) has +riorit$ o)er a se!/rit$ i'terest hel& %$ the %a'5 1ith 1hi!h the &e+osit a!!o/'t is #ai'tai'e&. 9-+&7. ,"#!"#T/ !' S%C-"#T/ #(T%"%STS #( #(5%ST.%(T ,"!,%"T/. The (ollo1i'- r/les -o)er' +riorit$ a#o'- !o'(li!ti'- se!/rit$ i'terests i' the sa#e i')est#e't +ro+ert$0 (1) A se!/rit$ i'terest hel& %$ a se!/re& +art$ ha)i'- !o'trol o( i')est#e't +ro+ert$ /'&er Se!tio' A-10: has +riorit$ o)er a se!/rit$ i'terest hel& %$ a se!/re& +art$ that &oes 'ot ha)e !o'trol o( the i')est#e't +ro+ert$. (*) E,!e+t as other1ise +ro)i&e& i' +ara-ra+hs (.) a'& (8)2 !o'(li!ti'- se!/rit$ i'terests hel& %$ se!/re& +arties ea!h o( 1hi!h has !o'trol /'&er Se!tio' A-10: ra'5 a!!or&i'- to +riorit$ i' ti#e o(0 (A) i( the !ollateral is a se!/rit$2 o%tai'i'- !o'trol4 (@) i( the !ollateral is a se!/rit$ e'title#e't !arrie& i' a se!/rities a!!o/'t a'&0 (i) i( the se!/re& +art$ o%tai'e& !o'trol /'&er Se!tio' <-10:(&)(1)2 the se!/re& +art$Bs %e!o#i'- the +erso' (or 1hi!h the se!/rities a!!o/'t is #ai'tai'e&4 (ii) i( the se!/re& +art$ o%tai'e& !o'trol /'&er Se!tio' <-10:(&)(*)2 the se!/rities i'ter#e&iar$Bs a-ree#e't to !o#+l$ 1ith the se!/re& +art$Bs e'title#e't or&ers 1ith res+e!t to se!/rit$ e'title#e'ts !arrie& or to %e !arrie& i' the se!/rities a!!o/'t4 or (iii) i( the se!/re& +art$ o%tai'e& !o'trol thro/-h a'other +erso' /'&er Se!tio' <10:(&)(.)2 the ti#e o' 1hi!h +riorit$ 1o/l& %e %ase& /'&er this +ara-ra+h i( the other +erso' 1ere the se!/re& +art$4 or (C) i( the !ollateral is a !o##o&it$ !o'tra!t !arrie& 1ith a !o##o&it$ i'ter#e&iar$2 the satis(a!tio' o( the re7/ire#e't (or !o'trol s+e!i(ie& i' Se!tio' A-10:(%)(*) 1ith res+e!t to !o##o&it$ !o'tra!ts !arrie& or to %e !arrie& 1ith the !o##o&it$ i'ter#e&iar$. (.) A se!/rit$ i'terest hel& %$ a se!/rities i'ter#e&iar$ i' a se!/rit$ e'title#e't or a se!/rities a!!o/'t #ai'tai'e& 1ith the se!/rities i'ter#e&iar$ has +riorit$ o)er a !o'(li!ti'- se!/rit$ i'terest hel& %$ a'other se!/re& +art$. (8) A se!/rit$ i'terest hel& %$ a !o##o&it$ i'ter#e&iar$ i' a !o##o&it$ !o'tra!t or a !o##o&it$ a!!o/'t #ai'tai'e& 1ith the !o##o&it$ i'ter#e&iar$ has +riorit$ o)er a !o'(li!ti'- se!/rit$ i'terest hel& %$ a'other se!/re& +art$. (9) A se!/rit$ i'terest i' a !erti(i!ate& se!/rit$ i' re-istere& (or# 1hi!h is +er(e!te& %$ ta5i'- &eli)er$ /'&er Se!tio' A-.1.(a) a'& 'ot %$ !o'trol /'&er Se!tio' A-.18 has +riorit$ o)er a !o'(li!ti'- se!/rit$ i'terest +er(e!te& %$ a #etho& other tha' !o'trol. (:) Co'(li!ti'- se!/rit$ i'terests !reate& %$ a %ro5er2 se!/rities i'ter#e&iar$2 or !o##o&it$ i'ter#e&iar$ 1hi!h are +er(e!te& 1itho/t !o'trol /'&er Se!tio' A-10: ra'5 e7/all$. (;) I' all other !ases2 +riorit$ a#o'- !o'(li!ti'- se!/rit$ i'terests i' i')est#e't +ro+ert$ is -o)er'e& %$ Se!tio's A-.** a'& A-.*.. 9-+&9. ,"#!"#T/ !' S%C-"#T/ #(T%"%STS #( $%TT%"-!'-C"%D#T "#G T. The (ollo1i'- r/les -o)er' +riorit$ a#o'- !o'(li!ti'- se!/rit$ i'terests i' the sa#e letter-o(-!re&it ri-ht0

(1) A se!/rit$ i'terest hel& %$ a se!/re& +art$ ha)i'- !o'trol o( the letter-o(-!re&it ri-ht /'&er Se!tio' A-10; has +riorit$ to the e,te't o( its !o'trol o)er a !o'(li!ti'- se!/rit$ i'terest hel& %$ a se!/re& +art$ that &oes 'ot ha)e !o'trol. (*) Se!/rit$ i'terests +er(e!te& %$ !o'trol /'&er Se!tio' A-.18 ra'5 a!!or&i'- to +riorit$ i' ti#e o( o%tai'i'- !o'trol. 9-++0. ,"#!"#T/ !' ,-"C )S%" !' C )TT%$ ,),%" !" #(ST"-.%(T. IaJ # urchaser;s priorit!C securit! interest claimed merel! as proceeds.' A +/r!haser o( !hattel +a+er has +riorit$ o)er a se!/rit$ i'terest i' the !hattel +a+er 1hi!h is !lai#e& #erel$ as +ro!ee&s o( i')e'tor$ s/%6e!t to a se!/rit$ i'terest i(0 (1) i' -oo& (aith a'& i' the or&i'ar$ !o/rse o( the +/r!haserBs %/si'ess2 the +/r!haser -i)es 'e1 )al/e a'& ta5es +ossessio' o( the !hattel +a+er or o%tai's !o'trol o( the !hattel +a+er /'&er Se!tio' A-1094 a'& (*) the !hattel +a+er &oes 'ot i'&i!ate that it has %ee' assi-'e& to a' i&e'ti(ie& assi-'ee other tha' the +/r!haser. I0J # urchaser;s priorit!C other securit! interests.' A +/r!haser o( !hattel +a+er has +riorit$ o)er a se!/rit$ i'terest i' the !hattel +a+er 1hi!h is !lai#e& other tha' #erel$ as +ro!ee&s o( i')e'tor$ s/%6e!t to a se!/rit$ i'terest i( the +/r!haser -i)es 'e1 )al/e a'& ta5es +ossessio' o( the !hattel +a+er or o%tai's !o'trol o( the !hattel +a+er /'&er Se!tio' A-109 i' -oo& (aith2 i' the or&i'ar$ !o/rse o( the +/r!haserBs %/si'ess2 a'& 1itho/t 5'o1le&-e that the +/r!hase )iolates the ri-hts o( the se!/re& +art$. IcJ #Chattel paper purchaser;s priorit! in proceeds.' E,!e+t as other1ise +ro)i&e& i' Se!tio' A-.*;2 a +/r!haser ha)i'- +riorit$ i' !hattel +a+er /'&er s/%se!tio' (a) or (%) also has +riorit$ i' +ro!ee&s o( the !hattel +a+er to the e,te't that0 (1) Se!tio' A-.** +ro)i&es (or +riorit$ i' the +ro!ee&s4 or (*) the +ro!ee&s !o'sist o( the s+e!i(i! -oo&s !o)ere& %$ the !hattel +a+er or !ash +ro!ee&s o( the s+e!i(i! -oo&s2 e)e' i( the +/r!haserBs se!/rit$ i'terest i' the +ro!ee&s is /'+er(e!te&. IdJ #Instrument purchaser;s priorit!.' E,!e+t as other1ise +ro)i&e& i' Se!tio' A-..1(a)2 a +/r!haser o( a' i'str/#e't has +riorit$ o)er a se!/rit$ i'terest i' the i'str/#e't +er(e!te& %$ a #etho& other tha' +ossessio' i( the +/r!haser -i)es )al/e a'& ta5es +ossessio' o( the i'str/#e't i' -oo& (aith a'& 1itho/t 5'o1le&-e that the +/r!hase )iolates the ri-hts o( the se!/re& +art$. IeJ #8older of purchase-mone! securit! interest /i&es ne< &alue.' >or +/r+oses o( s/%se!tio's (a) a'& (%)2 the hol&er o( a +/r!hase-#o'e$ se!/rit$ i'terest i' i')e'tor$ -i)es 'e1 )al/e (or !hattel +a+er !o'stit/ti'- +ro!ee&s o( the i')e'tor$. IfJ #Indication of assi/nment /i&es >no<led/e.' >or +/r+oses o( s/%se!tio's (%) a'& (&)2 i( !hattel +a+er or a' i'str/#e't i'&i!ates that it has %ee' assi-'e& to a' i&e'ti(ie& se!/re& +art$ other tha' the +/r!haser2 a +/r!haser o( the !hattel +a+er or i'str/#e't has 5'o1le&-e that the +/r!hase )iolates the ri-hts o( the se!/re& +art$.

 9-++1. ,"#!"#T/ !' "#G TS !' ,-"C )S%"S !' #(ST"-.%(TS, D!C-.%(TS, )(D S%C-"#T#%S -(D%" !T %" )"T#C$%S0 ,"#!"#T/ !' #(T%"%STS #( '#()(C#)$ )SS%TS )(D S%C-"#T/ %(T#T$%.%(TS -(D%" )"T#C$% 7. IaJ #%i/hts under .rticles 32 72 and 8 not limited.' This arti!le &oes 'ot li#it the ri-hts o( a hol&er i' &/e !o/rse o( a 'e-otia%le i'str/#e't2 a hol&er to 1hi!h a 'e-otia%le &o!/#e't o( title has %ee' &/l$ 'e-otiate&2 or a +rote!te& +/r!haser o( a se!/rit$. These hol&ers or +/r!hasers ta5e +riorit$ o)er a' earlier se!/rit$ i'terest2 e)e' i( +er(e!te&2 to the e,te't +ro)i&e& i' Arti!les .2 ;2 a'& <. I0J # rotection under .rticle 8.' This arti!le &oes 'ot li#it the ri-hts o( or i#+ose lia%ilit$ o' a +erso' to the e,te't that the +erso' is +rote!te& a-ai'st the assertio' o( a !lai# /'&er Arti!le <. IcJ #7ilin/ not notice.' >ili'- /'&er this arti!le &oes 'ot !o'stit/te 'oti!e o( a !lai# or &e(e'se to the hol&ers2 or +/r!hasers2 or +erso's &es!ri%e& i' s/%se!tio's (a) a'& (%). 9-++&. T")(S'%" !' .!(%/0 T")(S'%" !' '-(DS '"!. D%,!S#T )CC!-(T. IaJ #Transferee of mone!.' A tra's(eree o( #o'e$ ta5es the #o'e$ (ree o( a se!/rit$ i'terest /'less the tra's(eree a!ts i' !oll/sio' 1ith the &e%tor i' )iolati'- the ri-hts o( the se!/re& +art$. I0J #Transferee of funds from deposit account.' A tra's(eree o( (/'&s (ro# a &e+osit a!!o/'t ta5es the (/'&s (ree o( a se!/rit$ i'terest i' the &e+osit a!!o/'t /'less the tra's(eree a!ts i' !oll/sio' 1ith the &e%tor i' )iolati'the ri-hts o( the se!/re& +art$. 9-+++. ,"#!"#T/ !' C%"T)#( $#%(S )"#S#(G 1/ !,%")T#!( !' $)>. IaJ #) ossessor! lien.)' I' this se!tio'2 ?+ossessor$ lie'? #ea's a' i'terest2 other tha' a se!/rit$ i'terest or a' a-ri!/lt/ral lie'0 (1) 1hi!h se!/res +a$#e't or +er(or#a'!e o( a' o%li-atio' (or ser)i!es or #aterials (/r'ishe& 1ith res+e!t to -oo&s %$ a +erso' i' the or&i'ar$ !o/rse o( the +erso'Bs %/si'ess4 (*) 1hi!h is !reate& %$ stat/te or r/le o( la1 i' (a)or o( the +erso'4 a'& (.) 1hose e((e!ti)e'ess &e+e'&s o' the +erso'Bs +ossessio' o( the -oo&s. I0J # riorit! of possessor! lien.' A +ossessor$ lie' o' -oo&s has +riorit$ o)er a se!/rit$ i'terest i' the -oo&s /'less the lie' is !reate& %$ a stat/te that e,+ressl$ +ro)i&es other1ise. 9-++2. ,"#!"#T/ !' S%C-"#T/ #(T%"%STS #( '#*T-"%S )(D C"!,S. IaJ #-ecurit! interest in fixtures under this article.' A se!/rit$ i'terest /'&er this arti!le #a$ %e !reate& i' -oo&s that are (i,t/res or #a$ !o'ti'/e i' -oo&s that %e!o#e (i,t/res. A se!/rit$ i'terest &oes 'ot e,ist /'&er this arti!le i' or&i'ar$ %/il&i'- #aterials i'!or+orate& i'to a' i#+ro)e#e't o' la'&. I0J #-ecurit! interest in fixtures under real-propert! la<.' This arti!le &oes 'ot +re)e't !reatio' o( a' e'!/#%ra'!e /+o' (i,t/res /'&er real +ro+ert$ la1. IcJ #6eneral ruleC su0ordination of securit! interest in fixtures.'

I' !ases 'ot -o)er'e& %$ s/%se!tio's (&) thro/-h (h)2 a se!/rit$ i'terest i' (i,t/res is s/%or&i'ate to a !o'(li!ti'- i'terest o( a' e'!/#%ra'!er or o1'er o( the relate& real +ro+ert$ other tha' the &e%tor. IdJ #7ixtures purchase-mone! priorit!.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (h)2 a +er(e!te& se!/rit$ i'terest i' (i,t/res has +riorit$ o)er a !o'(li!ti'- i'terest o( a' e'!/#%ra'!er or o1'er o( the real +ro+ert$ i( the &e%tor has a' i'terest o( re!or& i' or is i' +ossessio' o( the real +ro+ert$ a'&0 (1) the se!/rit$ i'terest is a +/r!hase-#o'e$ se!/rit$ i'terest4 (*) the i'terest o( the e'!/#%ra'!er or o1'er arises %e(ore the -oo&s %e!o#e (i,t/res4 a'& (.) the se!/rit$ i'terest is +er(e!te& %$ a (i,t/re (ili'- %e(ore the -oo&s %e!o#e (i,t/res or 1ithi' *0 &a$s therea(ter. IeJ # riorit! of securit! interest in fixtures o&er interests in real propert!.' A +er(e!te& se!/rit$ i'terest i' (i,t/res has +riorit$ o)er a !o'(li!ti'- i'terest o( a' e'!/#%ra'!er or o1'er o( the real +ro+ert$ i(0 (1) the &e%tor has a' i'terest o( re!or& i' the real +ro+ert$ or is i' +ossessio' o( the real +ro+ert$ a'& the se!/rit$ i'terest0 (A) is +er(e!te& %$ a (i,t/re (ili'- %e(ore the i'terest o( the e'!/#%ra'!er or o1'er is o( re!or&4 a'& (@) has +riorit$ o)er a'$ !o'(li!ti'- i'terest o( a +re&e!essor i' title o( the e'!/#%ra'!er or o1'er4 (*) %e(ore the -oo&s %e!o#e (i,t/res2 the se!/rit$ i'terest is +er(e!te& %$ a'$ #etho& +er#itte& %$ this arti!le a'& the (i,t/res are rea&il$ re#o)a%le0 (A) (a!tor$ or o((i!e #a!hi'es4 (@) e7/i+#e't that is 'ot +ri#aril$ /se& or lease& (or /se i' the o+eratio' o( the real +ro+ert$4 or (C) re+la!e#e'ts o( &o#esti! a++lia'!es that are !o's/#er -oo&s4 (.) the !o'(li!ti'- i'terest is a lie' o' the real +ro+ert$ o%tai'e& %$ le-al or e7/ita%le +ro!ee&i'-s a(ter the se!/rit$ i'terest 1as +er(e!te& %$ a'$ #etho& +er#itte& %$ this arti!le4 or (8) the se!/rit$ i'terest is0 (A) !reate& i' a #a'/(a!t/re& ho#e i' a #a'/(a!t/re&-ho#e tra'sa!tio'4 a'& (@) +er(e!te& +/rs/a't to a stat/te &es!ri%e& i' Se!tio' A-.11(a)(*). IfJ # riorit! 0ased on consent2 disclaimer2 or ri/ht to remo&e.' A se!/rit$ i'terest i' (i,t/res2 1hether or 'ot +er(e!te&2 has +riorit$ o)er a !o'(li!ti'i'terest o( a' e'!/#%ra'!er or o1'er o( the real +ro+ert$ i(0 (1) the e'!/#%ra'!er or o1'er has2 i' a' a/the'ti!ate& re!or&2 !o'se'te& to the se!/rit$ i'terest or &is!lai#e& a' i'terest i' the -oo&s as (i,t/res4 or (*) the &e%tor has a ri-ht to re#o)e the -oo&s as a-ai'st the e'!/#%ra'!er or o1'er. I/J #Continuation of para/raph IfJI2J priorit!.' The +riorit$ o( the se!/rit$ i'terest /'&er +ara-ra+h (()(*) !o'ti'/es (or a reaso'a%le ti#e i( the &e%torBs ri-ht to re#o)e the -oo&s as a-ai'st the e'!/#%ra'!er or o1'er ter#i'ates. IhJ # riorit! of construction mort/a/e.'

A #ort-a-e is a !o'str/!tio' #ort-a-e to the e,te't that it se!/res a' o%li-atio' i'!/rre& (or the !o'str/!tio' o( a' i#+ro)e#e't o' la'&2 i'!l/&i'- the a!7/isitio' !ost o( the la'&2 i( a re!or&e& re!or& o( the #ort-a-e so i'&i!ates. E,!e+t as other1ise +ro)i&e& i' s/%se!tio's (e) a'& (()2 a se!/rit$ i'terest i' (i,t/res is s/%or&i'ate to a !o'str/!tio' #ort-a-e i( a re!or& o( the #ort-a-e is re!or&e& %e(ore the -oo&s %e!o#e (i,t/res a'& the -oo&s %e!o#e (i,t/res %e(ore the !o#+letio' o( the !o'str/!tio'. A #ort-a-e has this +riorit$ to the sa#e e,te't as a !o'str/!tio' #ort-a-e to the e,te't that it is -i)e' to re(i'a'!e a !o'str/!tio' #ort-a-e. IiJ # riorit! of securit! interest in crops.' A +er(e!te& se!/rit$ i'terest i' !ro+s -ro1i'- o' real +ro+ert$ has +riorit$ o)er a !o'(li!ti'- i'terest o( a' e'!/#%ra'!er or o1'er o( the real +ro+ert$ i( the &e%tor has a' i'terest o( re!or& i' or is i' +ossessio' o( the real +ro+ert$. I@J #-u0section IiJ pre&ails.' S/%se!tio' (i) +re)ails o)er a'$ i'!o'siste't +ro)isio's o( the (ollo1i'- stat/tes0 List here a'$ stat/tes !o'tai'i'- +ro)isio's i'!o'siste't 1ith s/%se!tio' (i)." 9-++3. )CC%SS#!(S. IaJ #Creation of securit! interest in accession.' A se!/rit$ i'terest #a$ %e !reate& i' a' a!!essio' a'& !o'ti'/es i' !ollateral that %e!o#es a' a!!essio'. I0J # erfection of securit! interest.' I( a se!/rit$ i'terest is +er(e!te& 1he' the !ollateral %e!o#es a' a!!essio'2 the se!/rit$ i'terest re#ai's +er(e!te& i' the !ollateral. IcJ # riorit! of securit! interest.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&)2 the other +ro)isio's o( this +art &eter#i'e the +riorit$ o( a se!/rit$ i'terest i' a' a!!essio'. IdJ #Compliance <ith certificate-of-title statute.' A se!/rit$ i'terest i' a' a!!essio' is s/%or&i'ate to a se!/rit$ i'terest i' the 1hole 1hi!h is +er(e!te& %$ !o#+lia'!e 1ith the re7/ire#e'ts o( a !erti(i!ate-o(-title stat/te /'&er Se!tio' A-.11(%). IeJ #%emo&al of accession after default.' A(ter &e(a/lt2 s/%6e!t to Part :2 a se!/re& +art$ #a$ re#o)e a' a!!essio' (ro# other -oo&s i( the se!/rit$ i'terest i' the a!!essio' has +riorit$ o)er the !lai#s o( e)er$ +erso' ha)i'- a' i'terest i' the 1hole. IfJ #%eim0ursement follo<in/ remo&al.' A se!/re& +art$ that re#o)es a' a!!essio' (ro# other -oo&s /'&er s/%se!tio' (e) shall +ro#+tl$ rei#%/rse a'$ hol&er o( a se!/rit$ i'terest or other lie' o'2 or o1'er o(2 the 1hole or o( the other -oo&s2 other tha' the &e%tor2 (or the !ost o( re+air o( a'$ +h$si!al i'6/r$ to the 1hole or the other -oo&s. The se!/re& +art$ 'ee& 'ot rei#%/rse the hol&er or o1'er (or a'$ &i#i'/tio' i' )al/e o( the 1hole or the other -oo&s !a/se& %$ the a%se'!e o( the a!!essio' re#o)e& or %$ a'$ 'e!essit$ (or re+la!i'- it. A +erso' e'title& to rei#%/rse#e't #a$ re(/se +er#issio' to re#o)e /'til the se!/re& +art$ -i)es a&e7/ate ass/ra'!e (or the +er(or#a'!e o( the o%li-atio' to rei#%/rse. 9-++4. C!..#(G$%D G!!DS. IaJ #)Commin/led /oods.)'

I' this se!tio'2 ?!o##i'-le& -oo&s? #ea's -oo&s that are +h$si!all$ /'ite& 1ith other -oo&s i' s/!h a #a''er that their i&e'tit$ is lost i' a +ro&/!t or #ass. I0J #5o securit! interest in commin/led /oods as such.' A se!/rit$ i'terest &oes 'ot e,ist i' !o##i'-le& -oo&s as s/!h. Do1e)er2 a se!/rit$ i'terest #a$ atta!h to a +ro&/!t or #ass that res/lts 1he' -oo&s %e!o#e !o##i'-le& -oo&s. IcJ #.ttachment of securit! interest to product or mass.' I( !ollateral %e!o#es !o##i'-le& -oo&s2 a se!/rit$ i'terest atta!hes to the +ro&/!t or #ass. IdJ # erfection of securit! interest.' I( a se!/rit$ i'terest i' !ollateral is +er(e!te& %e(ore the !ollateral %e!o#es !o##i'-le& -oo&s2 the se!/rit$ i'terest that atta!hes to the +ro&/!t or #ass /'&er s/%se!tio' (!) is +er(e!te&. IeJ # riorit! of securit! interest.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (()2 the other +ro)isio's o( this +art &eter#i'e the +riorit$ o( a se!/rit$ i'terest that atta!hes to the +ro&/!t or #ass /'&er s/%se!tio' (!). IfJ #Conflictin/ securit! interests in product or mass' I( #ore tha' o'e se!/rit$ i'terest atta!hes to the +ro&/!t or #ass /'&er s/%se!tio' (!)2 the (ollo1i'- r/les &eter#i'e +riorit$0 (1) A se!/rit$ i'terest that is +er(e!te& /'&er s/%se!tio' (&) has +riorit$ o)er a se!/rit$ i'terest that is /'+er(e!te& at the ti#e the !ollateral %e!o#es !o##i'-le& -oo&s. (*) I( #ore tha' o'e se!/rit$ i'terest is +er(e!te& /'&er s/%se!tio' (&)2 the se!/rit$ i'terests ra'5 e7/all$ i' +ro+ortio' to the )al/e o( the !ollateral at the ti#e it %e!a#e !o##i'-le& -oo&s. 9-++6. ,"#!"#T/ !' S%C-"#T/ #(T%"%STS #( G!!DS C!5%"%D 1/ C%"T#'#C)T% !' T#T$%. I(2 1hile a se!/rit$ i'terest i' -oo&s is +er(e!te& %$ a'$ #etho& /'&er the la1 o( a'other 6/ris&i!tio'2 this State iss/es a !erti(i!ate o( title that &oes 'ot sho1 that the -oo&s are s/%6e!t to the se!/rit$ i'terest or !o'tai' a state#e't that the$ #a$ %e s/%6e!t to se!/rit$ i'terests 'ot sho1' o' the !erti(i!ate0 (1) a %/$er o( the -oo&s2 other tha' a +erso' i' the %/si'ess o( selli'- -oo&s o( that 5i'&2 ta5es (ree o( the se!/rit$ i'terest i( the %/$er -i)es )al/e a'& re!ei)es &eli)er$ o( the -oo&s a(ter iss/a'!e o( the !erti(i!ate a'& 1itho/t 5'o1le&-e o( the se!/rit$ i'terest4 a'& (*) the se!/rit$ i'terest is s/%or&i'ate to a !o'(li!ti'- se!/rit$ i'terest i' the -oo&s that atta!hes2 a'& is +er(e!te& /'&er Se!tio' A-.11(%)2 a(ter iss/a'!e o( the !erti(i!ate a'& 1itho/t the !o'(li!ti'- se!/re& +art$Bs 5'o1le&-e o( the se!/rit$ i'terest. 9-++7. ,"#!"#T/ !' S%C-"#T/ #(T%"%ST !" )G"#C-$T-")$ $#%( ,%"'%CT%D 1/ '#$%D '#()(C#(G ST)T%.%(T ,"!5#D#(G C%"T)#( #(C!""%CT #('!".)T#!(. I( a se!/rit$ i'terest or a-ri!/lt/ral lie' is +er(e!te& %$ a (ile& (i'a'!i'- state#e't +ro)i&i'- i'(or#atio' &es!ri%e& i' Se!tio' A-91:(%)(9) 1hi!h is i'!orre!t at the ti#e the (i'a'!i'- state#e't is (ile&0

(1) the se!/rit$ i'terest or a-ri!/lt/ral lie' is s/%or&i'ate to a !o'(li!ti'- +er(e!te& se!/rit$ i'terest i' the !ollateral to the e,te't that the hol&er o( the !o'(li!ti'- se!/rit$ i'terest -i)es )al/e i' reaso'a%le relia'!e /+o' the i'!orre!t i'(or#atio'4 a'& (*) a +/r!haser2 other tha' a se!/re& +art$2 o( the !ollateral ta5es (ree o( the se!/rit$ i'terest or a-ri!/lt/ral lie' to the e,te't that2 i' reaso'a%le relia'!e /+o' the i'!orre!t i'(or#atio'2 the +/r!haser -i)es )al/e a'&2 i' the !ase o( !hattel +a+er2 &o!/#e'ts2 -oo&s2 i'str/#e'ts2 or a se!/rit$ !erti(i!ate2 re!ei)es &eli)er$ o( the !ollateral. 9-++9. ,"#!"#T/ S-1?%CT T! S-1!"D#()T#!(. This arti!le &oes 'ot +re!l/&e s/%or&i'atio' %$ a-ree#e't %$ a +erso' e'title& to +riorit$. [Subpart 2. "i<hts of 1anB] 9-+20. %''%CT#5%(%SS !' "#G T !' "%C!-,.%(T !" S%T-!'' )G)#(ST D%,!S#T )CC!-(T. IaJ #Exercise of recoupment or set-off.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (!)2 a %a'5 1ith 1hi!h a &e+osit a!!o/'t is #ai'tai'e& #a$ e,er!ise a'$ ri-ht o( re!o/+#e't or set-o(( a-ai'st a se!/re& +art$ that hol&s a se!/rit$ i'terest i' the &e+osit a!!o/'t. I0J #%ecoupment or setoff not affected 0! securit! interest.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (!)2 the a++li!atio' o( this arti!le to a se!/rit$ i'terest i' a &e+osit a!!o/'t &oes 'ot a((e!t a ri-ht o( re!o/+#e't or set-o(( o( the se!/re& +art$ as to a &e+osit a!!o/'t #ai'tai'e& 1ith the se!/re& +art$. IcJ #When set-off ineffecti&e.' The e,er!ise %$ a %a'5 o( a set-o(( a-ai'st a &e+osit a!!o/'t is i'e((e!ti)e a-ai'st a se!/re& +art$ that hol&s a se!/rit$ i'terest i' the &e+osit a!!o/'t 1hi!h is +er(e!te& %$ !o'trol /'&er Se!tio' A-108(a)(.)2 i( the set-o(( is %ase& o' a !lai# a-ai'st the &e%tor. 9-+21. 1)(A@S "#G TS )(D D-T#%S >#T "%S,%CT T! D%,!S#T )CC!-(T. E,!e+t as other1ise +ro)i&e& i' Se!tio' A-.80(!)2 a'& /'less the %a'5 other1ise a-rees i' a' a/the'ti!ate& re!or&2 a %a'5Bs ri-hts a'& &/ties 1ith res+e!t to a &e+osit a!!o/'t #ai'tai'e& 1ith the %a'5 are 'ot ter#i'ate&2 s/s+e'&e&2 or #o&i(ie& %$0 (1) the !reatio'2 atta!h#e't2 or +er(e!tio' o( a se!/rit$ i'terest i' the &e+osit a!!o/'t4 (*) the %a'5Bs 5'o1le&-e o( the se!/rit$ i'terest4 or (.) the %a'5Bs re!ei+t o( i'str/!tio's (ro# the se!/re& +art$. 9-+2&. 1)(A@S "#G T T! "%'-S% T! %(T%" #(T! !" D#SC$!S% %*#ST%(C% !' C!(T"!$ )G"%%.%(T. This arti!le &oes 'ot re7/ire a %a'5 to e'ter i'to a' a-ree#e't o( the 5i'& &es!ri%e& i' Se!tio' A-108(a)(*)2 e)e' i( its !/sto#er so re7/ests or &ire!ts. A %a'5 that has e'tere& i'to s/!h a' a-ree#e't is 'ot re7/ire& to !o'(ir# the e,iste'!e o( the a-ree#e't to a'other +erso' /'less re7/este& to &o so %$ its !/sto#er. Part 8. Ri-hts o( Thir& Parties 9-201. )$#%()1#$#T/ !' D%1T!"@S "#G TS. IaJ #4ther la< /o&erns aliena0ilit!+ exceptions.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (%) a'& Se!tio's A-80:2 A-80;2 A-80<2 a'& A-80A2 1hether a &e%torBs ri-hts i' !ollateral #a$ %e )ol/'taril$ or i')ol/'taril$ tra's(erre& is -o)er'e& %$ la1 other tha' this arti!le.

I0J #./reement does not pre&ent transfer.' A' a-ree#e't %et1ee' the &e%tor a'& se!/re& +art$ 1hi!h +rohi%its a tra's(er o( the &e%torBs ri-hts i' !ollateral or #a5es the tra's(er a &e(a/lt &oes 'ot +re)e't the tra's(er (ro# ta5i'- e((e!t. 9-20&. S%C-"%D ,)"T/ (!T !1$#G)T%D !( C!(T")CT !' D%1T!" !" #( T!"T. The e,iste'!e o( a se!/rit$ i'terest2 a-ri!/lt/ral lie'2 or a/thorit$ -i)e' to a &e%tor to &is+ose o( or /se !ollateral2 1itho/t #ore2 &oes 'ot s/%6e!t a se!/re& +art$ to lia%ilit$ i' !o'tra!t or tort (or the &e%torBs a!ts or o#issio's. 9-20+. )G"%%.%(T (!T T! )SS%"T D%'%(S%S )G)#(ST )SS#G(%%. IaJ #)Ealue.)' I' this se!tio'2 ?)al/e? has the #ea'i'- +ro)i&e& i' Se!tio' .-.0.(a). I0J #./reement not to assert claim or defense.' E,!e+t as other1ise +ro)i&e& i' this se!tio'2 a' a-ree#e't %et1ee' a' a!!o/'t &e%tor a'& a' assi-'or 'ot to assert a-ai'st a' assi-'ee a'$ !lai# or &e(e'se that the a!!o/'t &e%tor #a$ ha)e a-ai'st the assi-'or is e'(or!ea%le %$ a' assi-'ee that ta5es a' assi-'#e't0 (1) (or )al/e4 (*) i' -oo& (aith4 (.) 1itho/t 'oti!e o( a !lai# o( a +ro+ert$ or +ossessor$ ri-ht to the +ro+ert$ assi-'e&4 a'& (8) 1itho/t 'oti!e o( a &e(e'se or !lai# i' re!o/+#e't o( the t$+e that #a$ %e asserte& a-ai'st a +erso' e'title& to e'(or!e a 'e-otia%le i'str/#e't /'&er Se!tio' .-.09(a). IcJ #When su0section I0J not applica0le.' S/%se!tio' (%) &oes 'ot a++l$ to &e(e'ses o( a t$+e that #a$ %e asserte& a-ai'st a hol&er i' &/e !o/rse o( a 'e-otia%le i'str/#e't /'&er Se!tio' .-.09(%). IdJ #4mission of reBuired statement in consumer transaction.' I' a !o's/#er tra'sa!tio'2 i( a re!or& e)i&e'!es the a!!o/'t &e%torBs o%li-atio'2 la1 other tha' this arti!le re7/ires that the re!or& i'!l/&e a state#e't to the e((e!t that the ri-hts o( a' assi-'ee are s/%6e!t to !lai#s or &e(e'ses that the a!!o/'t &e%tor !o/l& assert a-ai'st the ori-i'al o%li-ee2 a'& the re!or& &oes 'ot i'!l/&e s/!h a state#e't0 (1) the re!or& has the sa#e e((e!t as i( the re!or& i'!l/&e& s/!h a state#e't4 a'& (*) the a!!o/'t &e%tor #a$ assert a-ai'st a' assi-'ee those !lai#s a'& &e(e'ses that 1o/l& ha)e %ee' a)aila%le i( the re!or& i'!l/&e& s/!h a state#e't. IeJ #%ule for indi&idual under other la<.' This se!tio' is s/%6e!t to la1 other tha' this arti!le 1hi!h esta%lishes a &i((ere't r/le (or a' a!!o/'t &e%tor 1ho is a' i'&i)i&/al a'& 1ho i'!/rre& the o%li-atio' +ri#aril$ (or +erso'al2 (a#il$2 or ho/sehol& +/r+oses. IfJ #4ther la< not displaced.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&)2 this se!tio' &oes 'ot &is+la!e la1 other tha' this arti!le 1hi!h -i)es e((e!t to a' a-ree#e't %$ a' a!!o/'t &e%tor 'ot to assert a !lai# or &e(e'se a-ai'st a' assi-'ee. 9-202. "#G TS )C;-#"%D 1/ )SS#G(%%0 C$)#.S )(D D%'%(S%S )G)#(ST )SS#G(%%. IaJ #.ssi/nee;s ri/hts su0@ect to terms2 claims2 and defenses+ exceptions.'

U'less a' a!!o/'t &e%tor has #a&e a' e'(or!ea%le a-ree#e't 'ot to assert &e(e'ses or !lai#s2 a'& s/%6e!t to s/%se!tio's (%) thro/-h (e)2 the ri-hts o( a' assi-'ee are s/%6e!t to0 (1) all ter#s o( the a-ree#e't %et1ee' the a!!o/'t &e%tor a'& assi-'or a'& a'$ &e(e'se or !lai# i' re!o/+#e't arisi'- (ro# the tra'sa!tio' that -a)e rise to the !o'tra!t4 a'& (*) a'$ other &e(e'se or !lai# o( the a!!o/'t &e%tor a-ai'st the assi-'or 1hi!h a!!r/es %e(ore the a!!o/'t &e%tor re!ei)es a 'oti(i!atio' o( the assi-'#e't a/the'ti!ate& %$ the assi-'or or the assi-'ee. I0J #.ccount de0tor;s claim reduces amount o<ed to assi/nee.' S/%6e!t to s/%se!tio' (!) a'& e,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&)2 the !lai# o( a' a!!o/'t &e%tor a-ai'st a' assi-'or #a$ %e asserte& a-ai'st a' assi-'ee /'&er s/%se!tio' (a) o'l$ to re&/!e the a#o/'t the a!!o/'t &e%tor o1es. IcJ #%ule for indi&idual under other la<.' This se!tio' is s/%6e!t to la1 other tha' this arti!le 1hi!h esta%lishes a &i((ere't r/le (or a' a!!o/'t &e%tor 1ho is a' i'&i)i&/al a'& 1ho i'!/rre& the o%li-atio' +ri#aril$ (or +erso'al2 (a#il$2 or ho/sehol& +/r+oses. IdJ #4mission of reBuired statement in consumer transaction.' I' a !o's/#er tra'sa!tio'2 i( a re!or& e)i&e'!es the a!!o/'t &e%torBs o%li-atio'2 la1 other tha' this arti!le re7/ires that the re!or& i'!l/&e a state#e't to the e((e!t that the a!!o/'t &e%torBs re!o)er$ a-ai'st a' assi-'ee 1ith res+e!t to !lai#s a'& &e(e'ses a-ai'st the assi-'or #a$ 'ot e,!ee& a#o/'ts +ai& %$ the a!!o/'t &e%tor /'&er the re!or&2 a'& the re!or& &oes 'ot i'!l/&e s/!h a state#e't2 the e,te't to 1hi!h a !lai# o( a' a!!o/'t &e%tor a-ai'st the assi-'or #a$ %e asserte& a-ai'st a' assi-'ee is &eter#i'e& as i( the re!or& i'!l/&e& s/!h a state#e't. IeJ #Inapplica0ilit! to health-care-insurance recei&a0le.' This se!tio' &oes 'ot a++l$ to a' assi-'#e't o( a health-!are-i's/ra'!e re!ei)a%le. 9-203. .!D#'#C)T#!( !' )SS#G(%D C!(T")CT. IaJ #Effect of modification on assi/nee.' A #o&i(i!atio' o( or s/%stit/tio' (or a' assi-'e& !o'tra!t is e((e!ti)e a-ai'st a' assi-'ee i( #a&e i' -oo& (aith. The assi-'ee a!7/ires !orres+o'&i'- ri-hts /'&er the #o&i(ie& or s/%stit/te& !o'tra!t. The assi-'#e't #a$ +ro)i&e that the #o&i(i!atio' or s/%stit/tio' is a %rea!h o( !o'tra!t %$ the assi-'or. This s/%se!tio' is s/%6e!t to s/%se!tio's (%) thro/-h (&). I0J #.pplica0ilit! of su0section IaJ.' S/%se!tio' (a) a++lies to the e,te't that0 (1) the ri-ht to +a$#e't or a +art thereo( /'&er a' assi-'e& !o'tra!t has 'ot %ee' (/ll$ ear'e& %$ +er(or#a'!e4 or (*) the ri-ht to +a$#e't or a +art thereo( has %ee' (/ll$ ear'e& %$ +er(or#a'!e a'& the a!!o/'t &e%tor has 'ot re!ei)e& 'oti(i!atio' o( the assi-'#e't /'&er Se!tio' A-80:(a). IcJ #%ule for indi&idual under other la<.' This se!tio' is s/%6e!t to la1 other tha' this arti!le 1hi!h esta%lishes a &i((ere't r/le (or a' a!!o/'t &e%tor 1ho is a' i'&i)i&/al a'& 1ho i'!/rre& the o%li-atio' +ri#aril$ (or +erso'al2 (a#il$2 or ho/sehol& +/r+oses.

IdJ #Inapplica0ilit! to health-care-insurance recei&a0le.' This se!tio' &oes 'ot a++l$ to a' assi-'#e't o( a health-!are-i's/ra'!e re!ei)a%le. 9-204. D#SC )"G% !' )CC!-(T D%1T!"0 (!T#'#C)T#!( !' )SS#G(.%(T0 #D%(T#'#C)T#!( )(D ,"!!' !' )SS#G(.%(T0 "%ST"#CT#!(S !( )SS#G(.%(T !' )CC!-(TS, C )TT%$ ,),%", ,)/.%(T #(T)(G#1$%S, )(D ,"!.#SS!"/ (!T%S #(%''%CT#5%. IaJ #3ischar/e of account de0tor+ effect of notification.' S/%6e!t to s/%se!tio's (%) thro/-h (i)2 a' a!!o/'t &e%tor o' a' a!!o/'t2 !hattel +a+er2 or a +a$#e't i'ta'-i%le #a$ &is!har-e its o%li-atio' %$ +a$i'- the assi-'or /'til2 %/t 'ot a(ter2 the a!!o/'t &e%tor re!ei)es a 'oti(i!atio'2 a/the'ti!ate& %$ the assi-'or or the assi-'ee2 that the a#o/'t &/e or to %e!o#e &/e has %ee' assi-'e& a'& that +a$#e't is to %e #a&e to the assi-'ee. A(ter re!ei+t o( the 'oti(i!atio'2 the a!!o/'t &e%tor #a$ &is!har-e its o%li-atio' %$ +a$i'- the assi-'ee a'& #a$ 'ot &is!har-e the o%li-atio' %$ +a$i'- the assi-'or. I0J #When notification ineffecti&e.' S/%6e!t to s/%se!tio' (h)2 'oti(i!atio' is i'e((e!ti)e /'&er s/%se!tio' (a)0 (1) i( it &oes 'ot reaso'a%l$ i&e'ti($ the ri-hts assi-'e&4 (*) to the e,te't that a' a-ree#e't %et1ee' a' a!!o/'t &e%tor a'& a seller o( a +a$#e't i'ta'-i%le li#its the a!!o/'t &e%torBs &/t$ to +a$ a +erso' other tha' the seller a'& the li#itatio' is e((e!ti)e /'&er la1 other tha' this arti!le4 or (.) at the o+tio' o( a' a!!o/'t &e%tor2 i( the 'oti(i!atio' 'oti(ies the a!!o/'t &e%tor to #a5e less tha' the (/ll a#o/'t o( a'$ i'stall#e't or other +erio&i! +a$#e't to the assi-'ee2 e)e' i(0 (A) o'l$ a +ortio' o( the a!!o/'t2 !hattel +a+er2 or +a$#e't i'ta'-i%le has %ee' assi-'e& to that assi-'ee4 (@) a +ortio' has %ee' assi-'e& to a'other assi-'ee4 or (C) the a!!o/'t &e%tor 5'o1s that the assi-'#e't to that assi-'ee is li#ite&. IcJ # roof of assi/nment.' S/%6e!t to s/%se!tio' (h)2 i( re7/este& %$ the a!!o/'t &e%tor2 a' assi-'ee shall seaso'a%l$ (/r'ish reaso'a%le +roo( that the assi-'#e't has %ee' #a&e. U'less the assi-'ee !o#+lies2 the a!!o/'t &e%tor #a$ &is!har-e its o%li-atio' %$ +a$i'- the assi-'or2 e)e' i( the a!!o/'t &e%tor has re!ei)e& a 'oti(i!atio' /'&er s/%se!tio' (a). IdJ #Term restrictin/ assi/nment /enerall! ineffecti&e.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (e) a'& Se!tio's *A-.0. a'& A-80;2 a'& s/%6e!t to s/%se!tio' (h)2 a ter# i' a' a-ree#e't %et1ee' a' a!!o/'t &e%tor a'& a' assi-'or or i' a +ro#issor$ 'ote is i'e((e!ti)e to the e,te't that it0 (1) +rohi%its2 restri!ts2 or re7/ires the !o'se't o( the a!!o/'t &e%tor or +erso' o%li-ate& o' the +ro#issor$ 'ote to the assi-'#e't or tra's(er o(2 or the !reatio'2 atta!h#e't2 +er(e!tio'2 or e'(or!e#e't o( a se!/rit$ i'terest i'2 the a!!o/'t2 !hattel +a+er2 +a$#e't i'ta'-i%le2 or +ro#issor$ 'ote4 or (*) +ro)i&es that the assi-'#e't or tra's(er or the !reatio'2 atta!h#e't2 +er(e!tio'2 or e'(or!e#e't o( the se!/rit$ i'terest #a$ -i)e rise to a &e(a/lt2 %rea!h2 ri-ht o( re!o/+#e't2 !lai#2 &e(e'se2 ter#i'atio'2 ri-ht o( ter#i'atio'2 or re#e&$ /'&er the a!!o/'t2 !hattel +a+er2 +a$#e't i'ta'-i%le2 or +ro#issor$ 'ote.

IeJ #Inapplica0ilit! of su0section IdJ to certain sales.' S/%se!tio' (&) &oes 'ot a++l$ to the sale o( a +a$#e't i'ta'-i%le or +ro#issor$ 'ote. IfJ #*e/al restrictions on assi/nment /enerall! ineffecti&e.' E,!e+t as other1ise +ro)i&e& i' Se!tio's *A-.0. a'& A-80; a'& s/%6e!t to s/%se!tio's (h)a'& (i)2 a r/le o( la12 stat/te2 or re-/latio' that +rohi%its2 restri!ts2 or re7/ires the !o'se't o( a -o)er'#e't2 -o)er'#e'tal %o&$ or o((i!ial2 or a!!o/'t &e%tor to the assi-'#e't or tra's(er o(2 or !reatio' o( a se!/rit$ i'terest i'2 a' a!!o/'t or !hattel +a+er is i'e((e!ti)e to the e,te't that the r/le o( la12 stat/te2 or re-/latio'0 (1) +rohi%its2 restri!ts2 or re7/ires the !o'se't o( the -o)er'#e't2 -o)er'#e'tal %o&$ or o((i!ial2 or a!!o/'t &e%tor to the assi-'#e't or tra's(er o(2 or the !reatio'2 atta!h#e't2 +er(e!tio'2 or e'(or!e#e't o( a se!/rit$ i'terest i' the a!!o/'t or !hattel +a+er4 or (*) +ro)i&es that the !reatio'2 atta!h#e't2 +er(e!tio'2 or e'(or!e#e't o( the se!/rit$ i'terest #a$ -i)e rise to a &e(a/lt2 %rea!h2 ri-ht o( re!o/+#e't2 !lai#2 &e(e'se2 ter#i'atio'2 ri-ht o( ter#i'atio'2 or re#e&$ /'&er the a!!o/'t or !hattel +a+er. I/J #-u0section I0JI3J not <ai&a0le.' S/%6e!t to s/%se!tio' (h)2 a' a!!o/'t &e%tor #a$ 'ot 1ai)e or )ar$ its o+tio' /'&er s/%se!tio' (%)(.). IhJ #%ule for indi&idual under other la<.' This se!tio' is s/%6e!t to la1 other tha' this arti!le 1hi!h esta%lishes a &i((ere't r/le (or a' a!!o/'t &e%tor 1ho is a' i'&i)i&/al a'& 1ho i'!/rre& the o%li-atio' +ri#aril$ (or +erso'al2 (a#il$2 or ho/sehol& +/r+oses. IiJ #Inapplica0ilit! to health-care-insurance recei&a0le.' This se!tio' &oes 'ot a++l$ to a' assi-'#e't o( a health-!are-i's/ra'!e re!ei)a%le. I@J #-ection pre&ails o&er specified inconsistent la<.' This se!tio' +re)ails o)er a'$ i'!o'siste't +ro)isio's o( the (ollo1i'- stat/tes2 r/les2 a'& re-/latio's0 List here a'$ stat/tes2 r/les2 a'& re-/latio's !o'tai'i'- +ro)isio's i'!o'siste't 1ith this se!tio'." 9-206. "%ST"#CT#!(S !( C"%)T#!( !" %('!"C%.%(T !' S%C-"#T/ #(T%"%ST #( $%)S% !$D #(T%"%ST !" #( $%SS!"@S "%S#D-)$ #(T%"%ST. IaJ #Term restrictin/ assi/nment /enerall! ineffecti&e.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (%)2 a ter# i' a lease a-ree#e't is i'e((e!ti)e to the e,te't that it0 (1) +rohi%its2 restri!ts2 or re7/ires the !o'se't o( a +art$ to the lease to the the assi-'#e't or tra's(er o(2 or the !reatio'2 atta!h#e't2 +er(e!tio'2 or e'(or!e#e't o( a se!/rit$ i'terest i' a' i'terest o( a +art$ /'&er the lease !o'tra!t or i' the lessorBs resi&/al i'terest i' the -oo&s4 or (*) +ro)i&es that the assi-'#e't or tra's(er or the !reatio'2 atta!h#e't2 +er(e!tio'2 or e'(or!e#e't o( the se!/rit$ i'terest #a$ -i)e rise to a &e(a/lt2 %rea!h2 ri-ht o( re!o/+#e't2 !lai#2 &e(e'se2 ter#i'atio'2 ri-ht o( ter#i'atio'2 or re#e&$ /'&er the lease. I0J #Effecti&eness of certain terms.'

E,!e+t as other1ise +ro)i&e& i' Se!tio' *A-.0.(;)2 a ter# &es!ri%e& i' s/%se!tio' (a) (*) is e((e!ti)e to the e,te't that there is0 (1) a tra's(er %$ the lessee o( the lesseeBs ri-ht o( +ossessio' or /se o( the -oo&s i' )iolatio' o( the ter#4 or (*) a &ele-atio' o( a #aterial +er(or#a'!e o( either +art$ to the lease !o'tra!t i' )iolatio' o( the ter#. IcJ #-ecurit! interest not material impairment.' The !reatio'2 atta!h#e't2 +er(e!tio'2 or e'(or!e#e't o( a se!/rit$ i'terest i' the lessorBs i'terest /'&er the lease !o'tra!t or the lessorBs resi&/al i'terest i' the -oo&s is 'ot a tra's(er that #ateriall$ i#+airs the lesseeBs +ros+e!t o( o%tai'i'- ret/r' +er(or#a'!e or #ateriall$ !ha'-es the &/t$ o( or #ateriall$ i'!reases the %/r&e' or ris5 i#+ose& o' the lessee 1ithi' the +/r)ie1 o( Se!tio' *A-.0.(8) /'less2 a'& the' o'l$ to the e,te't that2 e'(or!e#e't a!t/all$ res/lts i' a &ele-atio' o( #aterial +er(or#a'!e o( the lessor. 9-207. "%ST"#CT#!(S !( )SS#G(.%(T !' ,"!.#SS!"/ (!T%S, IaJ #Term restrictin/ assi/nment /enerall! ineffecti&e.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (%)2 a ter# i' a +ro#issor$ 'ote or i' a' a-ree#e't %et1ee' a' a!!o/'t &e%tor a'& a &e%tor 1hi!h relates to a health-!arei's/ra'!e re!ei)a%le or a -e'eral i'ta'-i%le2 i'!l/&i'- a !o'tra!t2 +er#it2 li!e'se2 or (ra'!hise2 a'& 1hi!h ter# +rohi%its2 restri!ts2 or re7/ires the !o'se't o( the +erso' o%li-ate& o' the +ro#issor$ 'ote or the a!!o/'t &e%tor to2 the assi-'#e't or tra's(er o(2 or !reatio'2 atta!h#e't2 or +er(e!tio' o( a se!/rit$ i'terest i'2 the +ro#issor$ 'ote2 health-!are-i's/ra'!e re!ei)a%le2 or -e'eral i'ta'-i%le2 is i'e((e!ti)e to the e,te't that the ter#0 (1) 1o/l& i#+air the !reatio'2 atta!h#e't2 or +er(e!tio' o( a se!/rit$ i'terest4 or (*) +ro)i&es that the assi-'#e't or tra's(er or the !reatio'2 atta!h#e't2 or +er(e!tio' o( the se!/rit$ i'terest #a$ -i)e rise to a &e(a/lt2 %rea!h2 ri-ht o( re!o/+#e't2 !lai#2 &e(e'se2 ter#i'atio'2 ri-ht o( ter#i'atio'2 or re#e&$ /'&er the +ro#issor$ 'ote2 health-!are-i's/ra'!e re!ei)a%le2 or -e'eral i'ta'-i%le. I0J #.pplica0ilit! of su0section IaJ to sales of certain ri/hts to pa!ment.' S/%se!tio' (a) a++lies to a se!/rit$ i'terest i' a +a$#e't i'ta'-i%le or +ro#issor$ 'ote o'l$ i( the se!/rit$ i'terest arises o/t o( a sale o( the +a$#e't i'ta'-i%le or +ro#issor$ 'ote. IcJ #*e/al restrictions on assi/nment /enerall! ineffecti&e.' A r/le o( la12 stat/te2 or re-/latio' that +rohi%its2 restri!ts2 or re7/ires the !o'se't o( a -o)er'#e't2 -o)er'#e'tal %o&$ or o((i!ial2 +erso' o%li-ate& o' a +ro#issor$ 'ote2 or a!!o/'t &e%tor to the assi-'#e't or tra's(er o(2 or !reatio' o( a se!/rit$ i'terest i'2 a +ro#issor$ 'ote2 health-!are-i's/ra'!e re!ei)a%le2 or -e'eral i'ta'-i%le2 i'!l/&i'- a !o'tra!t2 +er#it2 li!e'se2 or (ra'!hise %et1ee' a' a!!o/'t &e%tor a'& a &e%tor2 is i'e((e!ti)e to the e,te't that the r/le o( la12 stat/te2 or re-/latio'0 (1) 1o/l& i#+air the !reatio'2 atta!h#e't2 or +er(e!tio' o( a se!/rit$ i'terest4 or (*) +ro)i&es that the the assi-'#e't or tra's(er or !reatio'2 atta!h#e't2 or +er(e!tio' o( the se!/rit$ i'terest #a$ -i)e rise to a &e(a/lt2 %rea!h2 ri-ht o( re!o/+#e't2 !lai#2 %)$T -C)"%#(S-")(C% "%C%#5)1$%S, )(D C%"T)#( G%(%")$ #(T)(G#1$%S #(%''%CT#5%.

&e(e'se2 ter#i'atio'2 ri-ht o( ter#i'atio'2 or re#e&$ /'&er the +ro#issor$ 'ote2 health-!are-i's/ra'!e re!ei)a%le2 or -e'eral i'ta'-i%le. IdJ #*imitation on ineffecti&eness under su0sections IaJ and IcJ.' To the e,te't that a ter# i' a +ro#issor$ 'ote or i' a' a-ree#e't %et1ee' a' a!!o/'t &e%tor a'& a &e%tor 1hi!h relates to a health-!are-i's/ra'!e re!ei)a%le or -e'eral i'ta'-i%le or a r/le o( la12 stat/te2 or re-/latio' &es!ri%e& i' s/%se!tio' (!) 1o/l& %e e((e!ti)e /'&er la1 other tha' this arti!le %/t is i'e((e!ti)e /'&er s/%se!tio' (a) or (!)2 the !reatio'2 atta!h#e't2 or +er(e!tio' o( a se!/rit$ i'terest i' the +ro#issor$ 'ote2 health-!are-i's/ra'!e re!ei)a%le2 or -e'eral i'ta'-i%le0 (1) is 'ot e'(or!ea%le a-ai'st the +erso' o%li-ate& o' the +ro#issor$ 'ote or the a!!o/'t &e%tor4 (*) &oes 'ot i#+ose a &/t$ or o%li-atio' o' the +erso' o%li-ate& o' the +ro#issor$ 'ote or the a!!o/'t &e%tor4 (.) &oes 'ot re7/ire the +erso' o%li-ate& o' the +ro#issor$ 'ote or the a!!o/'t &e%tor to re!o-'i3e the se!/rit$ i'terest2 +a$ or re'&er +er(or#a'!e to the se!/re& +art$2 or a!!e+t +a$#e't or +er(or#a'!e (ro# the se!/re& +art$4 (8) &oes 'ot e'title the se!/re& +art$ to /se or assi-' the &e%torBs ri-hts /'&er the +ro#issor$ 'ote2 health-!are-i's/ra'!e re!ei)a%le2 or -e'eral i'ta'-i%le2 i'!l/&i'- a'$ relate& i'(or#atio' or #aterials (/r'ishe& to the &e%tor i' the tra'sa!tio' -i)i'- rise to the +ro#issor$ 'ote2 health-!are-i's/ra'!e re!ei)a%le2 or -e'eral i'ta'-i%le4 (9) &oes 'ot e'title the se!/re& +art$ to /se2 assi-'2 +ossess2 or ha)e a!!ess to a'$ tra&e se!rets or !o'(i&e'tial i'(or#atio' o( the +erso' o%li-ate& o' the +ro#issor$ 'ote or the a!!o/'t &e%tor4 a'& (:) &oes 'ot e'title the se!/re& +art$ to e'(or!e the se!/rit$ i'terest i' the +ro#issor$ 'ote2 health-!are-i's/ra'!e re!ei)a%le2 or -e'eral i'ta'-i%le. IeJ #-ection pre&ails o&er specified inconsistent la<.' This se!tio' +re)ails o)er a'$ i'!o'siste't +ro)isio's o( the (ollo1i'- stat/tes2 r/les2 a'& re-/latio's0 List here a'$ stat/tes2 r/les2 a'& re-/latio's !o'tai'i'- +ro)isio's i'!o'siste't 1ith this se!tio'." 9-209. "%ST"#CT#!(S !( )SS#G(.%(T !' $%TT%"-!'-C"%D#T "#G TS #(%''%CT#5%. IaJ #Term or la< restrictin/ assi/nment /enerall! ineffecti&e.' A ter# i' a letter o( !re&it or a r/le o( la12 stat/te2 re-/latio'2 !/sto#2 or +ra!ti!e a++li!a%le to the letter o( !re&it 1hi!h +rohi%its2 restri!ts2 or re7/ires the !o'se't o( a' a++li!a't2 iss/er2 or 'o#i'ate& +erso' to a %e'e(i!iar$Bs assi-'#e't o( or !reatio' o( a se!/rit$ i'terest i' a letter-o(-!re&it ri-ht is i'e((e!ti)e to the e,te't that the ter# or r/le o( la12 stat/te2 re-/latio'2 !/sto#2 or +ra!ti!e0 (1) 1o/l& i#+air the !reatio'2 atta!h#e't2 or +er(e!tio' o( a se!/rit$ i'terest i' the letter-o(-!re&it ri-ht4 or (*) +ro)i&es that the !reatio'2 atta!h#e't2 or +er(e!tio' o( the se!/rit$ i'terest #a$ -i)e rise to a &e(a/lt2 %rea!h2 ri-ht o( re!o/+#e't2 !lai#2 &e(e'se2 ter#i'atio'2 ri-ht o( ter#i'atio'2 or re#e&$ /'&er the letter-o(-!re&it ri-ht. I0J #*imitation on ineffecti&eness under su0section IaJ.'

To the e,te't that a ter# i' a letter o( !re&it is i'e((e!ti)e /'&er s/%se!tio' (a) %/t 1o/l& %e e((e!ti)e /'&er la1 other tha' this arti!le or a !/sto# or +ra!ti!e a++li!a%le to the letter o( !re&it2 to the tra's(er o( a ri-ht to &ra1 or other1ise &e#a'& +er(or#a'!e /'&er the letter o( !re&it2 or to the assi-'#e't o( a ri-ht to +ro!ee&s o( the letter o( !re&it2 the !reatio'2 atta!h#e't2 or +er(e!tio' o( a se!/rit$ i'terest i' the letter-o(-!re&it ri-ht0 (1) is 'ot e'(or!ea%le a-ai'st the a++li!a't2 iss/er2 'o#i'ate& +erso'2 or tra's(eree %e'e(i!iar$4 (*) i#+oses 'o &/ties or o%li-atio's o' the a++li!a't2 iss/er2 'o#i'ate& +erso'2 or tra's(eree %e'e(i!iar$4 a'& (.) &oes 'ot re7/ire the a++li!a't2 iss/er2 'o#i'ate& +erso'2 or tra's(eree %e'e(i!iar$ to re!o-'i3e the se!/rit$ i'terest2 +a$ or re'&er +er(or#a'!e to the se!/re& +art$2 or a!!e+t +a$#e't or other +er(or#a'!e (ro# the se!/re& +art$. Part 9. >ili'[Subpart 1. 'ilin< !ffice0 Contents and %ffecti9eness of 'inancin< State:ent] 9-301. '#$#(G !''#C%. IaJ #7ilin/ offices.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (%)2 i( the lo!al la1 o( this State -o)er's +er(e!tio' o( a se!/rit$ i'terest or a-ri!/lt/ral lie'2 the o((i!e i' 1hi!h to (ile a (i'a'!i'state#e't to +er(e!t the se!/rit$ i'terest or a-ri!/lt/ral lie' is0 (1) the o((i!e &esi-'ate& (or the (ili'- or re!or&i'- o( a re!or& o( a #ort-a-e o' the relate& real +ro+ert$2 i(0 (A) the !ollateral is as-e,tra!te& !ollateral or ti#%er to %e !/t4 or (@) the (i'a'!i'- state#e't is (ile& as a (i,t/re (ili'- a'& the !ollateral is -oo&s that are or are to %e!o#e (i,t/res4 or (*) the o((i!e o( or a'$ o((i!e &/l$ a/thori3e& %$ state#e't is 'ot (ile& as a (i,t/re (ili'-. I0J #7ilin/ office for transmittin/ utilities.' The o((i!e i' 1hi!h to (ile a (i'a'!i'- state#e't to +er(e!t a se!/rit$ i'terest i' !ollateral2 i'!l/&i'- (i,t/res2 o( a tra's#itti'- /tilit$ is the o((i!e o( state#e't 1hi!h is or is to %e!o#e (i,t/res. 9-30&. C!(T%(TS !' '#()(C#(G ST)T%.%(T0 "%C!"D !' .!"TG)G% )S '#()(C#(G ST)T%.%(T0 T#.% !' '#$#(G '#()(C#(G ST)T%.%(T. IaJ #-ufficienc! of financin/ statement.' S/%6e!t to s/%se!tio' (%)2 a (i'a'!i'- state#e't is s/((i!ie't o'l$ i( it0 (1) +ro)i&es the 'a#e o( the &e%tor4 (*) +ro)i&es the 'a#e o( the se!/re& +art$ or a re+rese'tati)e o( the se!/re& +art$4 a'& (.) i'&i!ates the !ollateral !o)ere& %$ the (i'a'!i'- state#e't. I0J #%eal-propert!-related financin/ statements.' E,!e+t as other1ise +ro)i&e& i' Se!tio' A-901(%)2 to %e s/((i!ie't2 a (i'a'!i'- state#e't that !o)ers as-e,tra!te& !ollateral or ti#%er to %e !/t2 or 1hi!h is (ile& as a (i,t/re (ili'". The (i'a'!i'state#e't also !o'stit/tes a (i,t/re (ili'- as to the !ollateral i'&i!ate& i' the (i'a'!i'""2 i' all other !ases2 i'!l/&i'- a !ase i' 1hi!h the !ollateral is -oo&s that are or are to %e!o#e (i,t/res a'& the (i'a'!i'-

a'& !o)ers -oo&s that are or are to %e!o#e (i,t/res2 #/st satis($ s/%se!tio' (a) a'& also0 (1) i'&i!ate that it !o)ers this t$+e o( !ollateral4 (*) i'&i!ate that it is to %e (ile& (or re!or&" i' the real +ro+ert$ re!or&s4 (.) +ro)i&e a &es!ri+tio' o( the real +ro+ert$ to 1hi!h the !ollateral is relate& s/((i!ie't to -i)e !o'str/!ti)e 'oti!e o( a #ort-a-e /'&er the la1 o( this State i( the &es!ri+tio' 1ere !o'tai'e& i' a re!or& o( the #ort-a-e o( the real +ro+ert$"4 a'& (8) i( the &e%tor &oes 'ot ha)e a' i'terest o( re!or& i' the real +ro+ert$2 +ro)i&e the 'a#e o( a re!or& o1'er. IcJ #%ecord of mort/a/e as financin/ statement.' A re!or& o( a #ort-a-e is e((e!ti)e2 (ro# the &ate o( re!or&i'-2 as a (i'a'!i'- state#e't (ile& as a (i,t/re (ili'- or as a (i'a'!i'- state#e't !o)eri'- as-e,tra!te& !ollateral or ti#%er to %e !/t o'l$ i(0 (1) the re!or& i'&i!ates the -oo&s or a!!o/'ts that it !o)ers4 (*) the -oo&s are or are to %e!o#e (i,t/res relate& to the real +ro+ert$ &es!ri%e& i' the re!or& or the !ollateral is relate& to the real +ro+ert$ &es!ri%e& i' the re!or& a'& is ase,tra!te& !ollateral or ti#%er to %e !/t4 (.) the re!or& satis(ies the re7/ire#e'ts (or a (i'a'!i'- state#e't i' this se!tio' other tha' a' i'&i!atio' that it is to %e (ile& i' the real +ro+ert$ re!or&s4 a'& (8) the re!or& is &/l$" re!or&e&. IdJ #7ilin/ 0efore securit! a/reement or attachment.' A (i'a'!i'- state#e't #a$ %e (ile& %e(ore a se!/rit$ a-ree#e't is #a&e or a se!/rit$ i'terest other1ise atta!hes. 9-30+. ().% !' D%1T!" )(D S%C-"%D ,)"T/. IaJ #-ufficienc! of de0tor;s name.' A (i'a'!i'- state#e't s/((i!ie'tl$ +ro)i&es the 'a#e o( the &e%tor0 (1) i( the &e%tor is a re-istere& or-a'i3atio'2 o'l$ i( the (i'a'!i'- state#e't +ro)i&es the 'a#e o( the &e%tor i'&i!ate& o' the +/%li! re!or& o( the &e%torBs 6/ris&i!tio' o( or-a'i3atio' 1hi!h sho1s the &e%tor to ha)e %ee' or-a'i3e&4 (*) i( the &e%tor is a &e!e&e'tBs estate2 o'l$ i( the (i'a'!i'- state#e't +ro)i&es the 'a#e o( the &e!e&e't a'& i'&i!ates that the &e%tor is a' estate4 (.) i( the &e%tor is a tr/st or a tr/stee a!ti'- 1ith res+e!t to +ro+ert$ hel& i' tr/st2 o'l$ i( the (i'a'!i'- state#e't0 (A) +ro)i&es the 'a#e s+e!i(ie& (or the tr/st i' its or-a'i! &o!/#e'ts or2 i( 'o 'a#e is s+e!i(ie&2 +ro)i&es the 'a#e o( the settlor a'& a&&itio'al i'(or#atio' s/((i!ie't to &isti'-/ish the &e%tor (ro# other tr/sts ha)i'- o'e or #ore o( the sa#e settlors4 a'& (@) i'&i!ates2 i' the &e%torBs 'a#e or other1ise2 that the &e%tor is a tr/st or is a tr/stee a!ti'- 1ith res+e!t to +ro+ert$ hel& i' tr/st4 a'& (8) i' other !ases0 (A) i( the &e%tor has a 'a#e2 o'l$ i( it +ro)i&es the i'&i)i&/al or or-a'i3atio'al 'a#e o( the &e%tor4 a'& (@) i( the &e%tor &oes 'ot ha)e a 'a#e2 o'l$ i( it +ro)i&es the 'a#es o( the +art'ers2 #e#%ers2 asso!iates2 or other +erso's !o#+risi'- the &e%tor. I0J #.dditional de0tor-related information.'

A (i'a'!i'- state#e't that +ro)i&es the 'a#e o( the &e%tor i' a!!or&a'!e 1ith s/%se!tio' (a) is 'ot re'&ere& i'e((e!ti)e %$ the a%se'!e o(0 (1) a tra&e 'a#e or other 'a#e o( the &e%tor4 or (*) /'less re7/ire& /'&er s/%se!tio' (a)(8)(@)2 'a#es o( +art'ers2 #e#%ers2 asso!iates2 or other +erso's !o#+risi'- the &e%tor. IcJ #3e0tor;s trade name insufficient.' A (i'a'!i'- state#e't that +ro)i&es o'l$ the &e%torBs tra&e 'a#e &oes 'ot s/((i!ie'tl$ +ro)i&e the 'a#e o( the &e%tor. IdJ #%epresentati&e capacit!.' >ail/re to i'&i!ate the re+rese'tati)e !a+a!it$ o( a se!/re& +art$ or re+rese'tati)e o( a se!/re& +art$ &oes 'ot a((e!t the s/((i!ie'!$ o( a (i'a'!i'- state#e't. IeJ #=ultiple de0tors and secured parties.' A (i'a'!i'- state#e't #a$ +ro)i&e the 'a#e o( #ore tha' o'e &e%tor a'& the 'a#e o( #ore tha' o'e se!/re& +art$. 9-302. #(D#C)T#!( !' C!$$)T%")$. A (i'a'!i'- state#e't s/((i!ie'tl$ i'&i!ates the !ollateral that it !o)ers i( the (i'a'!i'state#e't +ro)i&es0 (1) a &es!ri+tio' o( the !ollateral +/rs/a't to Se!tio' A-10<4 or (*) a' i'&i!atio' that the (i'a'!i'- state#e't !o)ers all assets or all +erso'al +ro+ert$. 9-303. '#$#(G )(D C!.,$#)(C% >#T !T %" ST)T-T%S )(D T"%)T#%S '!" C!(S#G(.%(TS, $%)S%S, !T %" 1)#$.%(TS, )(D !T %" T")(S)CT#!(S. IaJ #9se of terms other than )de0tor) and )secured part!.)' A !o'si-'or2 lessor2 or other %ailor o( -oo&s2 a li!e'sor2 or a %/$er o( a +a$#e't i'ta'-i%le or +ro#issor$ 'ote #a$ (ile a (i'a'!i'- state#e't2 or #a$ !o#+l$ 1ith a stat/te or treat$ &es!ri%e& i' Se!tio' A-.11(a)2 /si'- the ter#s ?!o'si-'or?2 ?!o'si-'ee?2 ?lessor?2 ?lessee?2 ?%ailor?2 ?%ailee?2 ?li!e'sor?2 ?li!e'see?2 ?o1'er?2 ?re-istere& o1'er?2 ?%/$er?2 ?seller?2 or 1or&s o( si#ilar i#+ort2 i'stea& o( the ter#s ?se!/re& +art$? a'& ?&e%tor?. I0J #Effect of financin/ statement under su0section IaJ.' This +art a++lies to the (ili'- o( a (i'a'!i'- state#e't /'&er s/%se!tio' (a) a'&2 as a++ro+riate2 to !o#+lia'!e that is e7/i)ale't to (ili'- a (i'a'!i'- state#e't /'&er Se!tio' A-.11(%)2 %/t the (ili'- or !o#+lia'!e is 'ot o( itsel( a (a!tor i' &eter#i'i'1hether the !ollateral se!/res a' o%li-atio'. I( it is &eter#i'e& (or a'other reaso' that the !ollateral se!/res a' o%li-atio'2 a se!/rit$ i'terest hel& %$ the !o'si-'or2 lessor2 %ailor2 li!e'sor2 o1'er2 or %/$er 1hi!h atta!hes to the !ollateral is +er(e!te& %$ the (ili'or !o#+lia'!e. 9-304. %''%CT !' %""!"S !" !.#SS#!(S. IaJ #=inor errors and omissions.' A (i'a'!i'- state#e't s/%sta'tiall$ satis($i'- the re7/ire#e'ts o( this +art is e((e!ti)e2 e)e' i( it has #i'or errors or o#issio's2 /'less the errors or o#issio's #a5e the (i'a'!i'- state#e't serio/sl$ #islea&i'-. I0J #7inancin/ statement seriousl! misleadin/.'

E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (!)2 a (i'a'!i'- state#e't that (ails s/((i!ie'tl$ to +ro)i&e the 'a#e o( the &e%tor i' a!!or&a'!e 1ith Se!tio' A-90.(a) is serio/sl$ #islea&i'-. IcJ #7inancin/ statement not seriousl! misleadin/.' I( a sear!h o( the re!or&s o( the (ili'- o((i!e /'&er the &e%torBs !orre!t 'a#e2 /si'- the (ili'- o((i!eBs sta'&ar& sear!h lo-i!2 i( a'$2 1o/l& &is!lose a (i'a'!i'- state#e't that (ails s/((i!ie'tl$ to +ro)i&e the 'a#e o( the &e%tor i' a!!or&a'!e 1ith Se!tio' A-90.(a)2 the 'a#e +ro)i&e& &oes 'ot #a5e the (i'a'!i'- state#e't serio/sl$ #islea&i'-. IdJ #)3e0tor;s correct name.)' >or +/r+oses o( Se!tio' A-90<(%)2 the ?&e%torBs !orre!t 'a#e? i' s/%se!tio' (!) #ea's the !orre!t 'a#e o( the 'e1 &e%tor. 9-306. %''%CT !' C%"T)#( %5%(TS !( %''%CT#5%(%SS !' '#()(C#(G ST)T%.%(T. IaJ #3isposition.' A (ile& (i'a'!i'- state#e't re#ai's e((e!ti)e 1ith res+e!t to !ollateral that is sol&2 e,!ha'-e&2 lease&2 li!e'se&2 or other1ise &is+ose& o( a'& i' 1hi!h a se!/rit$ i'terest or a-ri!/lt/ral lie' !o'ti'/es2 e)e' i( the se!/re& +art$ 5'o1s o( or !o'se'ts to the &is+ositio'. I0J #Information 0ecomin/ seriousl! misleadin/.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (!) a'& Se!tio' A-90<2 a (i'a'!i'- state#e't is 'ot re'&ere& i'e((e!ti)e i(2 a(ter the (i'a'!i'- state#e't is (ile&2 the i'(or#atio' +ro)i&e& i' the (i'a'!i'- state#e't %e!o#es serio/sl$ #islea&i'- /'&er Se!tio' A-90:. IcJ #Chan/e in de0tor;s name.' I( a &e%tor so !ha'-es its 'a#e that a (ile& (i'a'!i'- state#e't %e!o#es serio/sl$ #islea&i'- /'&er Se!tio' A-90:0 (1) the (i'a'!i'- state#e't is e((e!ti)e to +er(e!t a se!/rit$ i'terest i' !ollateral a!7/ire& %$ the &e%tor %e(ore2 or 1ithi' (o/r #o'ths a(ter2 the !ha'-e4 a'& (*) the (i'a'!i'- state#e't is 'ot e((e!ti)e to +er(e!t a se!/rit$ i'terest i' !ollateral a!7/ire& %$ the &e%tor #ore tha' (o/r #o'ths a(ter the !ha'-e2 /'less a' a#e'&#e't to the (i'a'!i'- state#e't 1hi!h re'&ers the (i'a'!i'- state#e't 'ot serio/sl$ #islea&i'- is (ile& 1ithi' (o/r #o'ths a(ter the !ha'-e. 9-307. %''%CT#5%(%SS !' '#()(C#(G ST)T%.%(T #' (%> D%1T!" 1%C!.%S 1!-(D 1/ S%C-"#T/ )G"%%.%(T. IaJ #7inancin/ statement namin/ ori/inal de0tor.' E,!e+t as other1ise +ro)i&e& i' this se!tio'2 a (ile& (i'a'!i'- state#e't 'a#i'- a' ori-i'al &e%tor is e((e!ti)e to +er(e!t a se!/rit$ i'terest i' !ollateral i' 1hi!h a 'e1 &e%tor has or a!7/ires ri-hts to the e,te't that the (i'a'!i'- state#e't 1o/l& ha)e %ee' e((e!ti)e ha& the ori-i'al &e%tor a!7/ire& ri-hts i' the !ollateral. I0J #7inancin/ statement 0ecomin/ seriousl! misleadin/.' I( the &i((ere'!e %et1ee' the 'a#e o( the ori-i'al &e%tor a'& that o( the 'e1 &e%tor !a/ses a (ile& (i'a'!i'- state#e't that is e((e!ti)e /'&er s/%se!tio' (a) to %e serio/sl$ #islea&i'- /'&er Se!tio' A-90:0 (1) the (i'a'!i'- state#e't is e((e!ti)e to +er(e!t a se!/rit$ i'terest i' !ollateral a!7/ire& %$ the 'e1 &e%tor %e(ore2 a'& 1ithi' (o/r #o'ths a(ter2 the 'e1 &e%tor %e!o#es %o/'& /'&er Se!tio' A-*0.(&)4 a'&

(*) the (i'a'!i'- state#e't is 'ot e((e!ti)e to +er(e!t a se!/rit$ i'terest i' !ollateral a!7/ire& %$ the 'e1 &e%tor #ore tha' (o/r #o'ths a(ter the 'e1 &e%tor %e!o#es %o/'& /'&er Se!tio' A-*0.(&) /'less a' i'itial (i'a'!i'- state#e't +ro)i&i'- the 'a#e o( the 'e1 &e%tor is (ile& %e(ore the e,+iratio' o( that ti#e. IcJ #When section not applica0le.' This se!tio' &oes 'ot a++l$ to !ollateral as to 1hi!h a (ile& (i'a'!i'- state#e't re#ai's e((e!ti)e a-ai'st the 'e1 &e%tor /'&er Se!tio' A-90;(a). 9-309. ,%"S!(S %(T#T$%D T! '#$% ) "%C!"D. IaJ # erson entitled to file record.' A +erso' #a$ (ile a' i'itial (i'a'!i'- state#e't2 a#e'&#e't that a&&s !ollateral !o)ere& %$ a (i'a'!i'- state#e't2 or a#e'&#e't that a&&s a &e%tor to a (i'a'!i'- state#e't o'l$ i(0 (1) the &e%tor a/thori3es the (ili'- i' a' a/the'ti!ate& re!or& or +/rs/a't to s/%se!tio' (%) or (!)4 or (*) the +erso' hol&s a' a-ri!/lt/ral lie' that has %e!o#e e((e!ti)e at the ti#e o( (ili'a'& the (i'a'!i'- state#e't !o)ers o'l$ !ollateral i' 1hi!h the +erso' hol&s a' a-ri!/lt/ral lie'. I0J #-ecurit! a/reement as authoriAation.' @$ a/the'ti!ati'- or %e!o#i'- %o/'& as &e%tor %$ a se!/rit$ a-ree#e't2 a &e%tor or 'e1 &e%tor a/thori3es the (ili'- o( a' i'itial (i'a'!i'- state#e't2 a'& a' a#e'&#e't2 !o)eri'-0 (1) the !ollateral &es!ri%e& i' the se!/rit$ a-ree#e't4 a'& (*) +ro+ert$ that %e!o#es !ollateral /'&er Se!tio' A-.19(a)(*)2 1hether or 'ot the se!/rit$ a-ree#e't e,+ressl$ !o)ers +ro!ee&s. IcJ #.cBuisition of collateral as authoriAation.' @$ a!7/iri'- !ollateral i' 1hi!h a se!/rit$ i'terest or a-ri!/lt/ral lie' !o'ti'/es /'&er Se!tio' A-.19(a)(1)2 a &e%tor a/thori3es the (ili'- o( a' i'itial (i'a'!i'- state#e't2 a'& a' a#e'&#e't2 !o)eri'- the !ollateral a'& +ro+ert$ that %e!o#es !ollateral /'&er Se!tio' A-.19(a)(*). IdJ # erson entitled to file certain amendments.' A +erso' #a$ (ile a' a#e'&#e't other tha' a' a#e'&#e't that a&&s !ollateral !o)ere& %$ a (i'a'!i'- state#e't or a' a#e'&#e't that a&&s a &e%tor to a (i'a'!i'- state#e't o'l$ i(0 (1) the se!/re& +art$ o( re!or& a/thori3es the (ili'-4 or (*) the a#e'&#e't is a ter#i'atio' state#e't (or a (i'a'!i'- state#e't as to 1hi!h the se!/re& +art$ o( re!or& has (aile& to (ile or se'& a ter#i'atio' state#e't as re7/ire& %$ Se!tio' A-91.(a) or (!)2 the &e%tor a/thori3es the (ili'-2 a'& the ter#i'atio' state#e't i'&i!ates that the &e%tor a/thori3e& it to %e (ile&. IeJ #=ultiple secured parties of record.' I( there is #ore tha' o'e se!/re& +art$ o( re!or& (or a (i'a'!i'- state#e't2 ea!h se!/re& +art$ o( re!or& #a$ a/thori3e the (ili'- o( a' a#e'&#e't /'&er s/%se!tio' (&). 9-310. %''%CT#5%(%SS !' '#$%D "%C!"D. IaJ #7iled record effecti&e if authoriAed.'

A (ile& re!or& is e((e!ti)e o'l$ to the e,te't that it 1as (ile& %$ a +erso' that #a$ (ile it /'&er Se!tio' A-90A. I0J #.uthoriAation 0! one secured part! of record.' A re!or& a/thori3e& %$ o'e se!/re& +art$ o( re!or& &oes 'ot a((e!t the (i'a'!i'state#e't 1ith res+e!t to a'other se!/re& +art$ o( re!or&. IcJ #Continuation statement not timel! filed.' A !o'ti'/atio' state#e't that is 'ot (ile& 1ithi' the si,-#o'th +erio& +res!ri%e& %$ Se!tio' A-919(&) is i'e((e!ti)e. 9-311. S%C-"%D ,)"T/ !' "%C!"D. IaJ #-ecured part! of record.' A se!/re& +art$ o( re!or& 1ith res+e!t to a (i'a'!i'- state#e't is a +erso' 1hose 'a#e is +ro)i&e& as the 'a#e o( the se!/re& +art$ or a re+rese'tati)e o( the se!/re& +art$ i' a' i'itial (i'a'!i'- state#e't that has %ee' (ile&. I( a' i'itial (i'a'!i'- state#e't is (ile& /'&er Se!tio' A-918(a)2 the assi-'ee 'a#e& i' the i'itial (i'a'!i'- state#e't is the se!/re& +art$ o( re!or& 1ith res+e!t to the (i'a'!i'- state#e't. I0J #.mendment namin/ secured part! of record.' I( a' a#e'&#e't o( a (i'a'!i'- state#e't 1hi!h +ro)i&es the 'a#e o( a +erso' as a se!/re& +art$ or a re+rese'tati)e o( a se!/re& +art$ is (ile&2 the +erso' 'a#e& i' the a#e'&#e't is a se!/re& +art$ o( re!or&. I( a' a#e'&#e't is (ile& /'&er Se!tio' A918(%)2 the assi-'ee 'a#e& i' the a#e'&#e't is a se!/re& +art$ o( re!or&. IcJ #.mendment deletin/ secured part! of record.' A +erso' re#ai's a se!/re& +art$ o( re!or& /'til the (ili'- o( a' a#e'&#e't o( the (i'a'!i'- state#e't 1hi!h &eletes the +erso'. 9-31&. ).%(D.%(T !' '#()(C#(G ST)T%.%(T. #.lternati&e .' IaJ #.mendment of information in financin/ statement.' S/%6e!t to Se!tio' A-90A2 a +erso' #a$ a&& or &elete !ollateral !o)ere& %$2 !o'ti'/e or ter#i'ate the e((e!ti)e'ess o(2 or2 s/%6e!t to s/%se!tio' (e)2 other1ise a#e'& the i'(or#atio' +ro)i&e& i'2 a (i'a'!i'- state#e't %$ (ili'- a' a#e'&#e't that0 (1) i&e'ti(ies2 %$ its (ile '/#%er2 the i'itial (i'a'!i'- state#e't to 1hi!h the a#e'&#e't relates4 a'& (*) i( the a#e'&#e't relates to a' i'itial (i'a'!i'- state#e't (ile& or re!or&e&" i' a (ili'- o((i!e &es!ri%e& i' Se!tio' A-901(a)(1)2 +ro)i&es the i'(or#atio' s+e!i(ie& i' Se!tio' A-90*(%). #.lternati&e "' IaJ #.mendment of information in financin/ statement.' S/%6e!t to Se!tio' A-90A2 a +erso' #a$ a&& or &elete !ollateral !o)ere& %$2 !o'ti'/e or ter#i'ate the e((e!ti)e'ess o(2 or2 s/%6e!t to s/%se!tio' (e)2 other1ise a#e'& the i'(or#atio' +ro)i&e& i'2 a (i'a'!i'- state#e't %$ (ili'- a' a#e'&#e't that0 (1) i&e'ti(ies2 %$ its (ile '/#%er2 the i'itial (i'a'!i'- state#e't to 1hi!h the a#e'&#e't relates4 a'& (*) i( the a#e'&#e't relates to a' i'itial (i'a'!i'- state#e't (ile& or re!or&e&" i' a (ili'- o((i!e &es!ri%e& i' Se!tio' A-901(a)(1)2 +ro)i&es the &ate a'& ti#e" that the

i'itial (i'a'!i'- state#e't 1as (ile& or re!or&e&" a'& the i'(or#atio' s+e!i(ie& i' Se!tio' A-90*(%). #End of .lternati&es' I0J # eriod of effecti&eness not affected.' E,!e+t as other1ise +ro)i&e& i' Se!tio' A-9192 the (ili'- o( a' a#e'&#e't &oes 'ot e,te'& the +erio& o( e((e!ti)e'ess o( the (i'a'!i'- state#e't. IcJ #Effecti&eness of amendment addin/ collateral.' A (i'a'!i'- state#e't that is a#e'&e& %$ a' a#e'&#e't that a&&s !ollateral is e((e!ti)e as to the a&&e& !ollateral o'l$ (ro# the &ate o( the (ili'- o( the a#e'&#e't. IdJ #Effecti&eness of amendment addin/ de0tor.' A (i'a'!i'- state#e't that is a#e'&e& %$ a' a#e'&#e't that a&&s a &e%tor is e((e!ti)e as to the a&&e& &e%tor o'l$ (ro# the &ate o( the (ili'- o( the a#e'&#e't. IeJ #Certain amendments ineffecti&e.' A' a#e'&#e't is i'e((e!ti)e to the e,te't it0 (1) +/r+orts to &elete all &e%tors a'& (ails to +ro)i&e the 'a#e o( a &e%tor to %e !o)ere& %$ the (i'a'!i'- state#e't4 or (*) +/r+orts to &elete all se!/re& +arties o( re!or& a'& (ails to +ro)i&e the 'a#e o( a 'e1 se!/re& +art$ o( re!or&. 9-31+. T%".#()T#!( ST)T%.%(T. IaJ #Consumer /oods.' A se!/re& +art$ shall !a/se the se!/re& +art$ o( re!or& (or a (i'a'!i'- state#e't to (ile a ter#i'atio' state#e't (or the (i'a'!i'- state#e't i( the (i'a'!i'- state#e't !o)ers !o's/#er -oo&s a'&0 (1) there is 'o o%li-atio' se!/re& %$ the !ollateral !o)ere& %$ the (i'a'!i'- state#e't a'& 'o !o##it#e't to #a5e a' a&)a'!e2 i'!/r a' o%li-atio'2 or other1ise -i)e )al/e4 or (*) the &e%tor &i& 'ot a/thori3e the (ili'- o( the i'itial (i'a'!i'- state#e't. I0J #Time for compliance <ith su0section IaJ.' To !o#+l$ 1ith s/%se!tio' (a)2 a se!/re& +art$ shall !a/se the se!/re& +art$ o( re!or& to (ile the ter#i'atio' state#e't0 (1) 1ithi' o'e #o'th a(ter there is 'o o%li-atio' se!/re& %$ the !ollateral !o)ere& %$ the (i'a'!i'- state#e't a'& 'o !o##it#e't to #a5e a' a&)a'!e2 i'!/r a' o%li-atio'2 or other1ise -i)e )al/e4 or (*) i( earlier2 1ithi' *0 &a$s a(ter the se!/re& +art$ re!ei)es a' a/the'ti!ate& &e#a'& (ro# a &e%tor. IcJ #4ther collateral.' I' !ases 'ot -o)er'e& %$ s/%se!tio' (a)2 1ithi' *0 &a$s a(ter a se!/re& +art$ re!ei)es a' a/the'ti!ate& &e#a'& (ro# a &e%tor2 the se!/re& +art$ shall !a/se the se!/re& +art$ o( re!or& (or a (i'a'!i'- state#e't to se'& to the &e%tor a ter#i'atio' state#e't (or the (i'a'!i'- state#e't or (ile the ter#i'atio' state#e't i' the (ili'- o((i!e i(0 (1) e,!e+t i' the !ase o( a (i'a'!i'- state#e't !o)eri'- a!!o/'ts or !hattel +a+er that has %ee' sol& or -oo&s that are the s/%6e!t o( a !o'si-'#e't2 there is 'o o%li-atio' se!/re& %$ the !ollateral !o)ere& %$ the (i'a'!i'- state#e't a'& 'o !o##it#e't to #a5e a' a&)a'!e2 i'!/r a' o%li-atio'2 or other1ise -i)e )al/e4

(*) the (i'a'!i'- state#e't !o)ers a!!o/'ts or !hattel +a+er that has %ee' sol& %/t as to 1hi!h the a!!o/'t &e%tor or other +erso' o%li-ate& has &is!har-e& its o%li-atio'4 (.) the (i'a'!i'- state#e't !o)ers -oo&s that 1ere the s/%6e!t o( a !o'si-'#e't to the &e%tor %/t are 'ot i' the &e%torBs +ossessio'4 or (8) the &e%tor &i& 'ot a/thori3e the (ili'- o( the i'itial (i'a'!i'- state#e't. IdJ #Effect of filin/ termination statement.' E,!e+t as other1ise +ro)i&e& i' Se!tio' A-9102 /+o' the (ili'- o( a ter#i'atio' state#e't 1ith the (ili'- o((i!e2 the (i'a'!i'- state#e't to 1hi!h the ter#i'atio' state#e't relates !eases to %e e((e!ti)e. E,!e+t as other1ise +ro)i&e& i' Se!tio' A-9102 (or +/r+oses o( Se!tio's A-91A(-)2 A-9**(a)2 a'& A-9*.(!)2 the (ili'- 1ith the (ili'o((i!e o( a ter#i'atio' state#e't relati'- to a (i'a'!i'- state#e't that i'&i!ates that the &e%tor is a tra's#itti'- /tilit$ also !a/ses the e((e!ti)e'ess o( the (i'a'!i'state#e't to la+se. 9-312. )SS#G(.%(T !' ,!>%"S !' S%C-"%D ,)"T/ !' "%C!"D. IaJ #.ssi/nment reflected on initial financin/ statement.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (!)2 a' i'itial (i'a'!i'- state#e't #a$ re(le!t a' assi-'#e't o( all o( the se!/re& +art$Bs +o1er to a/thori3e a' a#e'&#e't to the (i'a'!i'- state#e't %$ +ro)i&i'- the 'a#e a'& #aili'- a&&ress o( the assi-'ee as the 'a#e a'& a&&ress o( the se!/re& +art$. I0J #.ssi/nment of filed financin/ statement.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (!)2 a se!/re& +art$ o( re!or& #a$ assi-' o( re!or& all or +art o( its +o1er to a/thori3e a' a#e'&#e't to a (i'a'!i'- state#e't %$ (ili'- i' the (ili'- o((i!e a' a#e'&#e't o( the (i'a'!i'- state#e't 1hi!h0 (1) i&e'ti(ies2 %$ its (ile '/#%er2 the i'itial (i'a'!i'- state#e't to 1hi!h it relates4 (*) +ro)i&es the 'a#e o( the assi-'or4 a'& (.) +ro)i&es the 'a#e a'& #aili'- a&&ress o( the assi-'ee. IcJ #.ssi/nment of record of mort/a/e.' A' assi-'#e't o( re!or& o( a se!/rit$ i'terest i' a (i,t/re !o)ere& %$ a re!or& o( a #ort-a-e 1hi!h is e((e!ti)e as a (i'a'!i'- state#e't (ile& as a (i,t/re (ili'- /'&er Se!tio' A-90*(!) #a$ %e #a&e o'l$ %$ a' assi-'#e't o( re!or& o( the #ort-a-e i' the #a''er +ro)i&e& %$ la1 o( this State other tha' the U'i(or# Co##er!ial Co&e". 9-313. D-")T#!( )(D %''%CT#5%(%SS !' '#()(C#(G ST)T%.%(T0 %''%CT !' $),S%D '#()(C#(G ST)T%.%(T. IaJ #7i&e-!ear effecti&eness.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio's (%)2 (e)2 (()2 a'& (-)2 a (ile& (i'a'!i'state#e't is e((e!ti)e (or a +erio& o( (i)e $ears a(ter the &ate o( (ili'-. I0J # u0lic-finance or manufactured-home transaction.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio's (e)2 (()2 a'& (-)2 a' i'itial (i'a'!i'state#e't (ile& i' !o''e!tio' 1ith a +/%li!-(i'a'!e tra'sa!tio' or #a'/(a!t/re&-ho#e tra'sa!tio' is e((e!ti)e (or a +erio& o( .0 $ears a(ter the &ate o( (ili'- i( it i'&i!ates that it is (ile& i' !o''e!tio' 1ith a +/%li!-(i'a'!e tra'sa!tio' or #a'/(a!t/re&-ho#e tra'sa!tio'. IcJ #*apse and continuation of financin/ statement.'

The e((e!ti)e'ess o( a (ile& (i'a'!i'- state#e't la+ses o' the e,+iratio' o( the +erio& o( its e((e!ti)e'ess /'less %e(ore the la+se a !o'ti'/atio' state#e't is (ile& +/rs/a't to s/%se!tio' (&). U+o' la+se2 a (i'a'!i'- state#e't !eases to %e e((e!ti)e a'& a'$ se!/rit$ i'terest or a-ri!/lt/ral lie' that 1as +er(e!te& %$ the (i'a'!i'- state#e't %e!o#es /'+er(e!te&2 /'less the se!/rit$ i'terest is +er(e!te& other1ise. I( the se!/rit$ i'terest or a-ri!/lt/ral lie' %e!o#es /'+er(e!te& /+o' la+se2 it is &ee#e& 'e)er to ha)e %ee' +er(e!te& as a-ai'st a +/r!haser o( the !ollateral (or )al/e. IdJ #When continuation statement ma! 0e filed.' A !o'ti'/atio' state#e't #a$ %e (ile& o'l$ 1ithi' si, #o'ths %e(ore the e,+iratio' o( the (i)e-$ear +erio& s+e!i(ie& i' s/%se!tio' (a) or the .0-$ear +erio& s+e!i(ie& i' s/%se!tio' (%)2 1hi!he)er is a++li!a%le. IeJ #Effect of filin/ continuation statement.' E,!e+t as other1ise +ro)i&e& i' Se!tio' A-9102 /+o' ti#el$ (ili'- o( a !o'ti'/atio' state#e't2 the e((e!ti)e'ess o( the i'itial (i'a'!i'- state#e't !o'ti'/es (or a +erio& o( (i)e $ears !o##e'!i'- o' the &a$ o' 1hi!h the (i'a'!i'- state#e't 1o/l& ha)e %e!o#e i'e((e!ti)e i' the a%se'!e o( the (ili'-. U+o' the e,+iratio' o( the (i)e-$ear +erio&2 the (i'a'!i'- state#e't la+ses i' the sa#e #a''er as +ro)i&e& i' s/%se!tio' (!)2 /'less2 %e(ore the la+se2 a'other !o'ti'/atio' state#e't is (ile& +/rs/a't to s/%se!tio' (&). S/!!ee&i'- !o'ti'/atio' state#e'ts #a$ %e (ile& i' the sa#e #a''er to !o'ti'/e the e((e!ti)e'ess o( the i'itial (i'a'!i'- state#e't. IfJ #Transmittin/ utilit! financin/ statement.' I( a &e%tor is a tra's#itti'- /tilit$ a'& a (ile& (i'a'!i'- state#e't so i'&i!ates2 the (i'a'!i'- state#e't is e((e!ti)e /'til a ter#i'atio' state#e't is (ile&. I/J #%ecord of mort/a/e as financin/ statement.' A re!or& o( a #ort-a-e that is e((e!ti)e as a (i'a'!i'- state#e't (ile& as a (i,t/re (ili'/'&er Se!tio' A-90*(!) re#ai's e((e!ti)e as a (i'a'!i'- state#e't (ile& as a (i,t/re (ili'/'til the #ort-a-e is release& or satis(ie& o( re!or& or its e((e!ti)e'ess other1ise ter#i'ates as to the real +ro+ert$. 9-314. > )T C!(ST#T-T%S '#$#(G0 %''%CT#5%(%SS !' '#$#(G. IaJ #What constitutes filin/.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (%)2 !o##/'i!atio' o( a re!or& to a (ili'o((i!e a'& te'&er o( the (ili'- (ee or a!!e+ta'!e o( the re!or& %$ the (ili'- o((i!e !o'stit/tes (ili'-. I0J #%efusal to accept record+ filin/ does not occur.' >ili'- &oes 'ot o!!/r 1ith res+e!t to a re!or& that a (ili'- o((i!e re(/ses to a!!e+t %e!a/se0 (1) the re!or& is 'ot !o##/'i!ate& %$ a #etho& or #e&i/# o( !o##/'i!atio' a/thori3e& %$ the (ili'- o((i!e4 (*) a' a#o/'t e7/al to or -reater tha' the a++li!a%le (ili'- (ee is 'ot te'&ere&4 (.) the (ili'- o((i!e is /'a%le to i'&e, the re!or& %e!a/se0 (A) i' the !ase o( a' i'itial (i'a'!i'- state#e't2 the re!or& &oes 'ot +ro)i&e a 'a#e (or the &e%tor4 (@) i' the !ase o( a' a#e'&#e't or !orre!tio' state#e't2 the re!or&0

(i) &oes 'ot i&e'ti($ the i'itial (i'a'!i'- state#e't as re7/ire& %$ Se!tio' A-91* or A91<2 as a++li!a%le4 or (ii) i&e'ti(ies a' i'itial (i'a'!i'- state#e't 1hose e((e!ti)e'ess has la+se& /'&er Se!tio' A-9194 (C) i' the !ase o( a' i'itial (i'a'!i'- state#e't that +ro)i&es the 'a#e o( a &e%tor i&e'ti(ie& as a' i'&i)i&/al or a' a#e'&#e't that +ro)i&es a 'a#e o( a &e%tor i&e'ti(ie& as a' i'&i)i&/al 1hi!h 1as 'ot +re)io/sl$ +ro)i&e& i' the (i'a'!i'- state#e't to 1hi!h the re!or& relates2 the re!or& &oes 'ot i&e'ti($ the &e%torBs last 'a#e4 or (=) i' the !ase o( a re!or& (ile& or re!or&e&" i' the (ili'- o((i!e &es!ri%e& i' Se!tio' A901(a)(1)2 the re!or& &oes 'ot +ro)i&e a s/((i!ie't &es!ri+tio' o( the real +ro+ert$ to 1hi!h it relates4 (8) i' the !ase o( a' i'itial (i'a'!i'- state#e't or a' a#e'&#e't that a&&s a se!/re& +art$ o( re!or&2 the re!or& &oes 'ot +ro)i&e a 'a#e a'& #aili'- a&&ress (or the se!/re& +art$ o( re!or&4 (9) i' the !ase o( a' i'itial (i'a'!i'- state#e't or a' a#e'&#e't that +ro)i&es a 'a#e o( a &e%tor 1hi!h 1as 'ot +re)io/sl$ +ro)i&e& i' the (i'a'!i'- state#e't to 1hi!h the a#e'&#e't relates2 the re!or& &oes 'ot0 (A) +ro)i&e a #aili'- a&&ress (or the &e%tor4 (@) i'&i!ate 1hether the &e%tor is a' i'&i)i&/al or a' or-a'i3atio'4 or (C) i( the (i'a'!i'- state#e't i'&i!ates that the &e%tor is a' or-a'i3atio'2 +ro)i&e0 (i) a t$+e o( or-a'i3atio' (or the &e%tor4 (ii) a 6/ris&i!tio' o( or-a'i3atio' (or the &e%tor4 or (iii) a' or-a'i3atio'al i&e'ti(i!atio' '/#%er (or the &e%tor or i'&i!ate that the &e%tor has 'o'e4 (:) i' the !ase o( a' assi-'#e't re(le!te& i' a' i'itial (i'a'!i'- state#e't /'&er Se!tio' A-918(a) or a' a#e'&#e't (ile& /'&er Se!tio' A-918(%)2 the re!or& &oes 'ot +ro)i&e a 'a#e a'& #aili'- a&&ress (or the assi-'ee4 or (;) i' the !ase o( a !o'ti'/atio' state#e't2 the re!or& is 'ot (ile& 1ithi' the si,-#o'th +erio& +res!ri%e& %$ Se!tio' A-919(&). IcJ #%ules applica0le to su0section I0J.' >or +/r+oses o( s/%se!tio' (%)0 (1) a re!or& &oes 'ot +ro)i&e i'(or#atio' i( the (ili'- o((i!e is /'a%le to rea& or &e!i+her the i'(or#atio'4 a'& (*) a re!or& that &oes 'ot i'&i!ate that it is a' a#e'&#e't or i&e'ti($ a' i'itial (i'a'!i'state#e't to 1hi!h it relates2 as re7/ire& %$ Se!tio' A-91*2 A-9182 or A-91<2 is a' i'itial (i'a'!i'- state#e't. IdJ #%efusal to accept record+ record effecti&e as filed record.' A re!or& that is !o##/'i!ate& to the (ili'- o((i!e 1ith te'&er o( the (ili'- (ee2 %/t 1hi!h the (ili'- o((i!e re(/ses to a!!e+t (or a reaso' other tha' o'e set (orth i' s/%se!tio' (%)2 is e((e!ti)e as a (ile& re!or& e,!e+t as a-ai'st a +/r!haser o( the !ollateral 1hi!h -i)es )al/e i' reaso'a%le relia'!e /+o' the a%se'!e o( the re!or& (ro# the (iles. 9-316. %''%CT !' #(D%*#(G %""!"S. The (ail/re o( the (ili'- o((i!e to i'&e, a re!or& !orre!tl$ &oes 'ot a((e!t the e((e!ti)e'ess o( the (ile& re!or&.

 9-317. C$)#. C!(C%"(#(G #()CC-")T% !" >"!(G'-$$/ '#$%D "%C!"D. IaJ #Correction statement.' A +erso' #a$ (ile i' the (ili'- o((i!e a !orre!tio' state#e't 1ith res+e!t to a re!or& i'&e,e& there /'&er the +erso'Bs 'a#e i( the +erso' %elie)es that the re!or& is i'a!!/rate or 1as 1ro'-(/ll$ (ile&. #.lternati&e .' I0J #-ufficienc! of correction statement.' A !orre!tio' state#e't #/st0 (1) i&e'ti($ the re!or& to 1hi!h it relates %$ the (ile '/#%er assi-'e& to the i'itial (i'a'!i'- state#e't to 1hi!h the re!or& relates4 (*) i'&i!ate that it is a !orre!tio' state#e't4 a'& (.) +ro)i&e the %asis (or the +erso'Bs %elie( that the re!or& is i'a!!/rate a'& i'&i!ate the #a''er i' 1hi!h the +erso' %elie)es the re!or& sho/l& %e a#e'&e& to !/re a'$ i'a!!/ra!$ or +ro)i&e the %asis (or the +erso'Bs %elie( that the re!or& 1as 1ro'-(/ll$ (ile&. #.lternati&e "' I0J #-ufficienc! of correction statement.' A !orre!tio' state#e't #/st0 (1) i&e'ti($ the re!or& to 1hi!h it relates %$0 (A) the (ile '/#%er assi-'e& to the i'itial (i'a'!i'- state#e't to 1hi!h the re!or& relates4 a'& (@) i( the !orre!tio' state#e't relates to a re!or& (ile& or re!or&e&" i' a (ili'- o((i!e &es!ri%e& i' Se!tio' A-901(a)(1)2 the &ate a'& ti#e" that the i'itial (i'a'!i'state#e't 1as (ile& or re!or&e&" a'& the i'(or#atio' s+e!i(ie& i' Se!tio' A-90*(%)4 (*) i'&i!ate that it is a !orre!tio' state#e't4 a'& (.) +ro)i&e the %asis (or the +erso'Bs %elie( that the re!or& is i'a!!/rate a'& i'&i!ate the #a''er i' 1hi!h the +erso' %elie)es the re!or& sho/l& %e a#e'&e& to !/re a'$ i'a!!/ra!$ or +ro)i&e the %asis (or the +erso'Bs %elie( that the re!or& 1as 1ro'-(/ll$ (ile&. #End of .lternati&es' IcJ #%ecord not affected 0! correction statement.' The (ili'- o( a !orre!tio' state#e't &oes 'ot a((e!t the e((e!ti)e'ess o( a' i'itial (i'a'!i'- state#e't or other (ile& re!or&. [Subpart &. Duties and !peration of 'ilin< !ffice] 9-319. (-.1%"#(G, .)#(T)#(#(G, )(D #(D%*#(G "%C!"DS0 C!..-(#C)T#(G #('!".)T#!( ,"!5#D%D #( "%C!"DS. IaJ #7ilin/ office duties.' >or ea!h re!or& (ile& i' a (ili'- o((i!e2 the (ili'- o((i!e shall0 (1) assi-' a /'i7/e '/#%er to the (ile& re!or&4 (*) !reate a re!or& that %ears the '/#%er assi-'e& to the (ile& re!or& a'& the &ate a'& ti#e o( (ili'-4 (.) #ai'tai' the (ile& re!or& (or +/%li! i's+e!tio'4 a'& (8) i'&e, the (ile& re!or& i' a!!or&a'!e 1ith s/%se!tio's (!)2 (&)2 a'& (e). I0J #7ile num0er.'

A (ile '/#%er assi-'e& a(ter Ha'/ar$ 12 *00*2" #/st i'!l/&e a &i-it that0 (1) is #athe#ati!all$ &eri)e& (ro# or relate& to the other &i-its o( the (ile '/#%er4 a'& (*) ai&s the (ili'- o((i!e i' &eter#i'i'- 1hether a '/#%er !o##/'i!ate& as the (ile '/#%er i'!l/&es a si'-le-&i-it or tra's+ositio'al error. IcJ #Indexin/C /eneral.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio's (&) a'& (e)2 the (ili'- o((i!e shall0 (1) i'&e, a' i'itial (i'a'!i'- state#e't a!!or&i'- to the 'a#e o( the &e%tor a'& i'&e, all (ile& re!or&s relati'- to the i'itial (i'a'!i'- state#e't i' a #a''er that asso!iates 1ith o'e a'other a' i'itial (i'a'!i'- state#e't a'& all (ile& re!or&s relati'- to the i'itial (i'a'!i'- state#e't4 a'& (*) i'&e, a re!or& that +ro)i&es a 'a#e o( a &e%tor 1hi!h 1as 'ot +re)io/sl$ +ro)i&e& i' the (i'a'!i'- state#e't to 1hi!h the re!or& relates also a!!or&i'- to the 'a#e that 1as 'ot +re)io/sl$ +ro)i&e&. IdJ #Indexin/C real-propert!-related financin/ statement.' I( a (i'a'!i'- state#e't is (ile& as a (i,t/re (ili'- or !o)ers as-e,tra!te& !ollateral or ti#%er to %e !/t2 it #/st %e (ile& (or re!or& a'&" the (ili'- o((i!e shall i'&e, it0 (1) /'&er the 'a#es o( the &e%tor a'& o( ea!h o1'er o( re!or& sho1' o' the (i'a'!i'state#e't as i( the$ 1ere the #ort-a-ors /'&er a #ort-a-e o( the real +ro+ert$ &es!ri%e&4 a'& (*) to the e,te't that the la1 o( this State +ro)i&es (or i'&e,i'- o( re!or&s o( #ort-a-es /'&er the 'a#e o( the #ort-a-ee2 /'&er the 'a#e o( the se!/re& +art$ as i( the se!/re& +art$ 1ere the #ort-a-ee there/'&er2 or2 i( i'&e,i'- is %$ &es!ri+tio'2 as i( the (i'a'!i'- state#e't 1ere a re!or& o( a #ort-a-e o( the real +ro+ert$ &es!ri%e&. IeJ #Indexin/C real-propert!-related assi/nment.' I( a (i'a'!i'- state#e't is (ile& as a (i,t/re (ili'- or !o)ers as-e,tra!te& !ollateral or ti#%er to %e !/t2 the (ili'- o((i!e shall i'&e, a' assi-'#e't (ile& /'&er Se!tio' A-918(a) or a' a#e'&#e't (ile& /'&er Se!tio' A-918(%)0 (1) /'&er the 'a#e o( the assi-'or as -ra'tor4 a'& (*) to the e,te't that the la1 o( this State +ro)i&es (or i'&e,i'- a re!or& o( the assi-'#e't o( a #ort-a-e /'&er the 'a#e o( the assi-'ee2 /'&er the 'a#e o( the assi-'ee. #.lternati&e .' IfJ #%etrie&al and association capa0ilit!.' The (ili'- o((i!e shall #ai'tai' a !a+a%ilit$0 (1) to retrie)e a re!or& %$ the 'a#e o( the &e%tor a'& %$ the (ile '/#%er assi-'e& to the i'itial (i'a'!i'- state#e't to 1hi!h the re!or& relates4 a'& (*) to asso!iate a'& retrie)e 1ith o'e a'other a' i'itial (i'a'!i'- state#e't a'& ea!h (ile& re!or& relati'- to the i'itial (i'a'!i'- state#e't. #.lternati&e "' IfJ #%etrie&al and association capa0ilit!.' The (ili'- o((i!e shall #ai'tai' a !a+a%ilit$0 (1) to retrie)e a re!or& %$ the 'a#e o( the &e%tor a'&0

(A) i( the (ili'- o((i!e is &es!ri%e& i' Se!tio' A-901(a)(1)2 %$ the (ile '/#%er assi-'e& to the i'itial (i'a'!i'- state#e't to 1hi!h the re!or& relates a'& the &ate a'& ti#e" that the re!or& 1as (ile& or re!or&e&"4 or (@) i( the (ili'- o((i!e is &es!ri%e& i' Se!tio' A-901(a)(*)2 %$ the (ile '/#%er assi-'e& to the i'itial (i'a'!i'- state#e't to 1hi!h the re!or& relates4 a'& (*) to asso!iate a'& retrie)e 1ith o'e a'other a' i'itial (i'a'!i'- state#e't a'& ea!h (ile& re!or& relati'- to the i'itial (i'a'!i'- state#e't. #End of .lternati&es' I/J #%emo&al of de0tor;s name.' The (ili'- o((i!e #a$ 'ot re#o)e a &e%torBs 'a#e (ro# the i'&e, /'til o'e $ear a(ter the e((e!ti)e'ess o( a (i'a'!i'- state#e't 'a#i'- the &e%tor la+ses /'&er Se!tio' A-919 1ith res+e!t to all se!/re& +arties o( re!or&. IhJ #Timeliness of filin/ office performance.' The (ili'- o((i!e shall +er(or# the a!ts re7/ire& %$ s/%se!tio's (a) thro/-h (e) at the ti#e a'& i' the #a''er +res!ri%e& %$ (ili'--o((i!e r/le2 %/t 'ot later tha' t1o %/si'ess &a$s a(ter the (ili'- o((i!e re!ei)es the re!or& i' 7/estio'. #IiJ #Inapplica0ilit! to real-propert!-related filin/ office.' S/%se!tio's" (%)" a'&" (h)" &o es" 'ot a++l$ to a (ili'- o((i!e &es!ri%e& i' Se!tio' A901(a)(1)." 9-3&0. )CC%,T)(C% )(D "%'-S)$ T! )CC%,T "%C!"D. IaJ #=andator! refusal to accept record.' A (ili'- o((i!e shall re(/se to a!!e+t a re!or& (or (ili'- (or a reaso' set (orth i' Se!tio' A91:(%) a'& #a$ re(/se to a!!e+t a re!or& (or (ili'- o'l$ (or a reaso' set (orth i' Se!tio' A-91:(%). I0J #Communication concernin/ refusal.' I( a (ili'- o((i!e re(/ses to a!!e+t a re!or& (or (ili'-2 it shall !o##/'i!ate to the +erso' that +rese'te& the re!or& the (a!t o( a'& reaso' (or the re(/sal a'& the &ate a'& ti#e the re!or& 1o/l& ha)e %ee' (ile& ha& the (ili'- o((i!e a!!e+te& it. The !o##/'i!atio' #/st %e #a&e at the ti#e a'& i' the #a''er +res!ri%e& %$ (ili'--o((i!e r/le %/t 2 i' the !ase o( a (ili'- o((i!e &es!ri%e& i' Se!tio' A-901(a)(*)2" i' 'o e)e't #ore tha' t1o %/si'ess &a$s a(ter the (ili'- o((i!e re!ei)es the re!or&. IcJ #When filed financin/ statement effecti&e.' A (ile& (i'a'!i'- state#e't satis($i'- Se!tio' A-90*(a) a'& (%) is e((e!ti)e2 e)e' i( the (ili'- o((i!e is re7/ire& to re(/se to a!!e+t it (or (ili'- /'&er s/%se!tio' (a). Do1e)er2 Se!tio' A-..< a++lies to a (ile& (i'a'!i'- state#e't +ro)i&i'- i'(or#atio' &es!ri%e& i' Se!tio' A-91:(%)(9) 1hi!h is i'!orre!t at the ti#e the (i'a'!i'- state#e't is (ile&. IdJ #-eparate application to multiple de0tors.' I( a re!or& !o##/'i!ate& to a (ili'- o((i!e +ro)i&es i'(or#atio' that relates to #ore tha' o'e &e%tor2 this +art a++lies as to ea!h &e%tor se+aratel$. 9-3&1. -(#'!". '!". !' >"#TT%( '#()(C#(G ST)T%.%(T )(D ).%(D.%(T. IaJ #Initial financin/ statement form.' A (ili'- o((i!e that a!!e+ts 1ritte' re!or&s #a$ 'ot re(/se to a!!e+t a 1ritte' i'itial (i'a'!i'- state#e't i' the (ollo1i'- (or# a'& (or#at e,!e+t (or a reaso' set (orth i' Se!tio' A-91:(%)0

I0J #.mendment form.' A (ili'- o((i!e that a!!e+ts 1ritte' re!or&s #a$ 'ot re(/se to a!!e+t a 1ritte' re!or& i' the (ollo1i'- (or# a'& (or#at e,!e+t (or a reaso' set (orth i' Se!tio' A-91:(%)0

 9-3&&. .)#(T%()(C% )(D D%ST"-CT#!( !' "%C!"DS. #.lternati&e .' IaJ # ost-lapse maintenance and retrie&al of information.' The (ili'- o((i!e shall #ai'tai' a re!or& o( the i'(or#atio' +ro)i&e& i' a (ile& (i'a'!i'state#e't (or at least o'e $ear a(ter the e((e!ti)e'ess o( the (i'a'!i'- state#e't has la+se& /'&er Se!tio' A-919 1ith res+e!t to all se!/re& +arties o( re!or&. The re!or& #/st %e retrie)a%le %$ /si'- the 'a#e o( the &e%tor a'& %$ /si'- the (ile '/#%er assi-'e& to the i'itial (i'a'!i'- state#e't to 1hi!h the re!or& relates. #.lternati&e "' IaJ # ost-lapse maintenance and retrie&al of information.' The (ili'- o((i!e shall #ai'tai' a re!or& o( the i'(or#atio' +ro)i&e& i' a (ile& (i'a'!i'state#e't (or at least o'e $ear a(ter the e((e!ti)e'ess o( the (i'a'!i'- state#e't has la+se& /'&er Se!tio' A-919 1ith res+e!t to all se!/re& +arties o( re!or&. The re!or& #/st %e retrie)a%le %$ /si'- the 'a#e o( the &e%tor a'&0 (1) i( the re!or& 1as (ile& or re!or&e&" i' the (ili'- o((i!e &es!ri%e& i' Se!tio' A-901(a) (1)2 %$ /si'- the (ile '/#%er assi-'e& to the i'itial (i'a'!i'- state#e't to 1hi!h the re!or& relates a'& the &ate a'& ti#e" that the re!or& 1as (ile& or re!or&e&"4 or (*) i( the re!or& 1as (ile& i' the (ili'- o((i!e &es!ri%e& i' Se!tio' A-901(a)(*)2 %$ /si'the (ile '/#%er assi-'e& to the i'itial (i'a'!i'- state#e't to 1hi!h the re!or& relates. #End of .lternati&es' I0J #3estruction of <ritten records.' E,!e+t to the e,te't that a stat/te -o)er'i'- &is+ositio' o( +/%li! re!or&s +ro)i&es other1ise2 the (ili'- o((i!e i##e&iatel$ #a$ &estro$ a'$ 1ritte' re!or& e)i&e'!i'- a (i'a'!i'- state#e't. Do1e)er2 i( the (ili'- o((i!e &estro$s a 1ritte' re!or&2 it shall #ai'tai' a'other re!or& o( the (i'a'!i'- state#e't 1hi!h !o#+lies 1ith s/%se!tio' (a). 9-3&+. #('!".)T#!( '"!. '#$#(G !''#C%0 S)$% !" $#C%(S% !' "%C!"DS. IaJ #.c>no<led/ment of filin/ <ritten record.' I( a +erso' that (iles a 1ritte' re!or& re7/ests a' a!5'o1le&-#e't o( the (ili'-2 the (ili'o((i!e shall se'& to the +erso' a' i#a-e o( the re!or& sho1i'- the '/#%er assi-'e& to the re!or& +/rs/a't to Se!tio' A-91A(a)(1) a'& the &ate a'& ti#e o( the (ili'- o( the re!or&. Do1e)er2 i( the +erso' (/r'ishes a !o+$ o( the re!or& to the (ili'- o((i!e2 the (ili'- o((i!e #a$ i'stea&0 (1) 'ote /+o' the !o+$ the '/#%er assi-'e& to the re!or& +/rs/a't to Se!tio' A-91A(a) (1) a'& the &ate a'& ti#e o( the (ili'- o( the re!or&4 a'& (*) se'& the !o+$ to the +erso'. I0J #.c>no<led/ment of filin/ other record.' I( a +erso' (iles a re!or& other tha' a 1ritte' re!or&2 the (ili'- o((i!e shall !o##/'i!ate to the +erso' a' a!5'o1le&-#e't that +ro)i&es0 (1) the i'(or#atio' i' the re!or&4 (*) the '/#%er assi-'e& to the re!or& +/rs/a't to Se!tio' A-91A(a)(1)4 a'& (.) the &ate a'& ti#e o( the (ili'- o( the re!or&. IcJ #Communication of reBuested information.'

The (ili'- o((i!e shall !o##/'i!ate or other1ise #a5e a)aila%le i' a re!or& the (ollo1i'i'(or#atio' to a'$ +erso' that re7/ests it0 (1) 1hether there is o' (ile o' a &ate a'& ti#e s+e!i(ie& %$ the (ili'- o((i!e2 %/t 'ot a &ate earlier tha' three %/si'ess &a$s %e(ore the (ili'- o((i!e re!ei)es the re7/est2 a'$ (i'a'!i'- state#e't that0 (A) &esi-'ates a +arti!/lar &e%tor or2 i( the re7/est so states2 &esi-'ates a +arti!/lar &e%tor at the a&&ress s+e!i(ie& i' the re7/est"4 (@) has 'ot la+se& /'&er Se!tio' A-919 1ith res+e!t to all se!/re& +arties o( re!or&4 a'& (C) i( the re7/est so states2 has la+se& /'&er Se!tio' A-919 a'& a re!or& o( 1hi!h is #ai'tai'e& %$ the (ili'- o((i!e /'&er Se!tio' A-9**(a)4 (*) the &ate a'& ti#e o( (ili'- o( ea!h (i'a'!i'- state#e't4 a'& (.) the i'(or#atio' +ro)i&e& i' ea!h (i'a'!i'- state#e't. IdJ #=edium for communicatin/ information.' I' !o#+l$i'- 1ith its &/t$ /'&er s/%se!tio' (!)2 the (ili'- o((i!e #a$ !o##/'i!ate i'(or#atio' i' a'$ #e&i/#. Do1e)er2 i( re7/este&2 the (ili'- o((i!e shall !o##/'i!ate i'(or#atio' %$ iss/i'- its 1ritte' !erti(i!ate" a re!or& that !a' %e a&#itte& i'to e)i&e'!e i' the !o/rts o( this State 1itho/t e,tri'si! e)i&e'!e o( its a/the'ti!it$". IeJ #Timeliness of filin/ office performance.' The (ili'- o((i!e shall +er(or# the a!ts re7/ire& %$ s/%se!tio's (a) thro/-h (&) at the ti#e a'& i' the #a''er +res!ri%e& %$ (ili'--o((i!e r/le2 %/t 'ot later tha' t1o %/si'ess &a$s a(ter the (ili'- o((i!e re!ei)es the re7/est. IfJ # u0lic a&aila0ilit! of records.' At least 1ee5l$2 the i'sert a++ro+riate o((i!ial or -o)er'#e'tal a-e'!$" (ili'- o((i!e" shall o((er to sell or li!e'se to the +/%li! o' a 'o'e,!l/si)e %asis2 i' %/l52 !o+ies o( all re!or&s (ile& i' it /'&er this +art2 i' e)er$ #e&i/# (ro# ti#e to ti#e a)aila%le to the (ili'- o((i!e. 9-3&2. D%$)/ 1/ '#$#(G !''#C%. =ela$ %$ the (ili'- o((i!e %e$o'& a ti#e li#it +res!ri%e& %$ this +art is e,!/se& i(0 (1) the &ela$ is !a/se& %$ i'terr/+tio' o( !o##/'i!atio' or !o#+/ter (a!ilities2 1ar2 e#er-e'!$ !o'&itio's2 (ail/re o( e7/i+#e't2 or other !ir!/#sta'!es %e$o'& !o'trol o( the (ili'- o((i!e4 a'& (*) the (ili'- o((i!e e,er!ises reaso'a%le &ili-e'!e /'&er the !ir!/#sta'!es. 9-3&3. '%%S. IaJ #Initial financin/ statement or other recordC /eneral rule.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (e)2 the (ee (or (ili'- a'& i'&e,i'- a re!or& /'&er this +art2 other tha' a' i'itial (i'a'!i'- state#e't o( the 5i'& &es!ri%e& i' s/%se!tio' (%)2 is the a#o/'t s+e!i(ie& i' s/%se!tio' (!)2 i( a++li!a%le2 +l/s"0 (1) I JJ M"JJJJJJ i( the re!or& is !o##/'i!ate& i' 1riti'- a'& !o'sists o( o'e or t1o +a-es4 (*) I JJ *M"JJJJJJ i( the re!or& is !o##/'i!ate& i' 1riti'- a'& !o'sists o( #ore tha' t1o +a-es4 a'& (.) I JJ 1N*M"JJJ i( the re!or& is !o##/'i!ate& %$ a'other #e&i/# a/thori3e& %$ (ili'--o((i!e r/le.

I0J #Initial financin/ statementC pu0lic-finance and manufactured-housin/ transactions.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (e)2 the (ee (or (ili'- a'& i'&e,i'- a' i'itial (i'a'!i'- state#e't o( the (ollo1i'- 5i'& is the a#o/'t s+e!i(ie& i' s/%se!tio' (!)2 i( a++li!a%le2 +l/s"0 (1) I JJJJJ i( the (i'a'!i'- state#e't i'&i!ates that it is (ile& i' !o''e!tio' 1ith a +/%li!-(i'a'!e tra'sa!tio'4 (*) I JJJJJ i( the (i'a'!i'- state#e't i'&i!ates that it is (ile& i' !o''e!tio' 1ith a #a'/(a!t/re&-ho#e tra'sa!tio'. #.lternati&e .' IcJ #5um0er of names.' The '/#%er o( 'a#es re7/ire& to %e i'&e,e& &oes 'ot a((e!t the a#o/'t o( the (ee i' s/%se!tio's (a) a'& (%). #.lternati&e "' IcJ #5um0er of names.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (e)2 i( a re!or& is !o##/'i!ate& i' 1riti'-2 the (ee (or ea!h 'a#e #ore tha' t1o re7/ire& to %e i'&e,e& is I JJJJJJ. #End of .lternati&es' IdJ #%esponse to information reBuest.' The (ee (or res+o'&i'- to a re7/est (or i'(or#atio' (ro# the (ili'- o((i!e2 i'!l/&i'- (or iss/i'- a !erti(i!ate sho1i'-" !o##/'i!ati'-" 1hether there is o' (ile a'$ (i'a'!i'state#e't 'a#i'- a +arti!/lar &e%tor2 is0 (1) I JJJJ i( the re7/est is !o##/'i!ate& i' 1riti'-4 a'& (*) I JJJJ i( the re7/est is !o##/'i!ate& %$ a'other #e&i/# a/thori3e& %$ (ili'--o((i!e r/le. IeJ #%ecord of mort/a/e.' This se!tio' &oes 'ot re7/ire a (ee 1ith res+e!t to a re!or& o( a #ort-a-e 1hi!h is e((e!ti)e as a (i'a'!i'- state#e't (ile& as a (i,t/re (ili'- or as a (i'a'!i'- state#e't !o)eri'- as-e,tra!te& !ollateral or ti#%er to %e !/t /'&er Se!tio' A-90*(!). Do1e)er2 the re!or&i'- a'& satis(a!tio' (ees that other1ise 1o/l& %e a++li!a%le to the re!or& o( the #ort-a-e a++l$. 9-3&4. '#$#(G-!''#C% "-$%S. IaJ #.doption of filin/-office rules.' The i'sert a++ro+riate -o)er'#e'tal o((i!ial or a-e'!$" shall a&o+t a'& +/%lish r/les to i#+le#e't this arti!le. The (ili'--o((i!e r/les #/st %e 0 (1)" !o'siste't 1ith this arti!le 4 a'& (*) a&o+te& a'& +/%lishe& i' a!!or&a'!e 1ith the i'sert a'$ a++li!a%le state a&#i'istrati)e +ro!e&/re a!t"". I0J #8armoniAation of rules.' To 5ee+ the (ili'--o((i!e r/les a'& +ra!ti!es o( the (ili'- o((i!e i' har#o'$ 1ith the r/les a'& +ra!ti!es o( (ili'- o((i!es i' other 6/ris&i!tio's that e'a!t s/%sta'tiall$ this +art2 a'& to 5ee+ the te!h'olo-$ /se& %$ the (ili'- o((i!e !o#+ati%le 1ith the te!h'olo-$ /se& %$ (ili'- o((i!es i' other 6/ris&i!tio's that e'a!t s/%sta'tiall$ this +art2 the i'sert a++ro+riate -o)er'#e'tal o((i!ial or a-e'!$"2 so (ar as is !o'siste't 1ith the +/r+oses2

+oli!ies2 a'& +ro)isio's o( this arti!le2 i' a&o+ti'-2 a#e'&i'-2 a'& re+eali'- (ili'--o((i!e r/les2 shall0 (1) !o's/lt 1ith (ili'- o((i!es i' other 6/ris&i!tio's that e'a!t s/%sta'tiall$ this +art4 a'& (*) !o's/lt the #ost re!e't )ersio' o( the Eo&el R/les +ro#/l-ate& %$ the I'ter'atio'al Asso!iatio' o( Cor+orate A&#i'istrators or a'$ s/!!essor or-a'i3atio'4 a'& (.) ta5e i'to !o'si&eratio' the r/les a'& +ra!ti!es o(2 a'& the te!h'olo-$ /se& %$2 (ili'o((i!es i' other 6/ris&i!tio's that e'a!t s/%sta'tiall$ this +art. 9-3&6. D-T/ T! "%,!"T. The i'sert a++ro+riate -o)er'#e'tal o((i!ial or a-e'!$" shall re+ort a''/all$ o' or %e(ore JJJJJJJJ" to the Go)er'or a'& Le-islat/re" o' the o+eratio' o( the (ili'- o((i!e. The re+ort #/st !o'tai' a state#e't o( the e,te't to 1hi!h0 (1) the (ili'--o((i!e r/les are 'ot i' har#o'$ 1ith the r/les o( (ili'- o((i!es i' other 6/ris&i!tio's that e'a!t s/%sta'tiall$ this +art a'& the reaso's (or these )ariatio's4 a'& (*) the (ili'--o((i!e r/les are 'ot i' har#o'$ 1ith the #ost re!e't )ersio' o( the Eo&el R/les +ro#/l-ate& %$ the I'ter'atio'al Asso!iatio' o( Cor+orate A&#i'istrators2 or a'$ s/!!essor or-a'i3atio'2 a'& the reaso's (or these )ariatio's. Part :. =e(a/lt [Subpart 1. Default and %nforce:ent of Securit8 #nterest] 9-401. "#G TS )'T%" D%')-$T0 ?-D#C#)$ %('!"C%.%(T0 C!(S#G(!" !" 1-/%" !' )CC!-(TS, C )TT%$ ,),%", ,)/.%(T #(T)(G#1$%S, !" ,"!.#SS!"/ (!T%S. IaJ #%i/hts of secured part! after default.' A(ter &e(a/lt2 a se!/re& +art$ has the ri-hts +ro)i&e& i' this +art a'&2 e,!e+t as other1ise +ro)i&e& i' Se!tio' A-:0*2 those +ro)i&e& %$ a-ree#e't o( the +arties. A se!/re& +art$0 (1) #a$ re&/!e a !lai# to 6/&-#e't2 (ore!lose2 or other1ise e'(or!e the !lai#2 se!/rit$ i'terest2 or a-ri!/lt/ral lie' %$ a'$ a)aila%le 6/&i!ial +ro!e&/re4 a'& (*) i( the !ollateral is &o!/#e'ts2 #a$ +ro!ee& either as to the &o!/#e'ts or as to the -oo&s the$ !o)er. I0J #%i/hts and duties of secured part! in possession or control.' A se!/re& +art$ i' +ossessio' o( !ollateral or !o'trol o( !ollateral /'&er Se!tio' A-1082 A-1092 A-10:2 or A-10; has the ri-hts a'& &/ties +ro)i&e& i' Se!tio' A-*0;. IcJ #%i/hts cumulati&e+ simultaneous exercise.' The ri-hts /'&er s/%se!tio's (a) a'& (%) are !/#/lati)e a'& #a$ %e e,er!ise& si#/lta'eo/sl$. IdJ #%i/hts of de0tor and o0li/or.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (-) a'& Se!tio' A-:092 a(ter &e(a/lt2 a &e%tor a'& a' o%li-or ha)e the ri-hts +ro)i&e& i' this +art a'& %$ a-ree#e't o( the +arties. IeJ #*ien of le&! after @ud/ment.' I( a se!/re& +art$ has re&/!e& its !lai# to 6/&-#e't2 the lie' o( a'$ le)$ that #a$ %e #a&e /+o' the !ollateral %$ )irt/e o( a' e,e!/tio' %ase& /+o' the 6/&-#e't relates %a!5 to the earliest o(0 (1) the &ate o( +er(e!tio' o( the se!/rit$ i'terest or a-ri!/lt/ral lie' i' the !ollateral4 (*) the &ate o( (ili'- a (i'a'!i'- state#e't !o)eri'- the !ollateral4 or

(.) a'$ &ate s+e!i(ie& i' a stat/te /'&er 1hi!h the a-ri!/lt/ral lie' 1as !reate&. IfJ #Execution sale.' A sale +/rs/a't to a' e,e!/tio' is a (ore!los/re o( the se!/rit$ i'terest or a-ri!/lt/ral lie' %$ 6/&i!ial +ro!e&/re 1ithi' the #ea'i'- o( this se!tio'. A se!/re& +art$ #a$ +/r!hase at the sale a'& therea(ter hol& the !ollateral (ree o( a'$ other re7/ire#e'ts o( this arti!le. I/J #Consi/nor or 0u!er of certain ri/hts to pa!ment.' E,!e+t as other1ise +ro)i&e& i' Se!tio' A-:0;(!)2 this +art i#+oses 'o &/ties /+o' a se!/re& +art$ that is a !o'si-'or or is a %/$er o( a!!o/'ts2 !hattel +a+er2 +a$#e't i'ta'-i%les2 or +ro#issor$ 'otes. 9-40&. >)#5%" )(D 5)"#)(C% !' "#G TS )(D D-T#%S. E,!e+t as other1ise +ro)i&e& i' Se!tio' A-:*82 to the e,te't that the$ -i)e ri-hts to a &e%tor or o%li-or a'& i#+ose &/ties o' a se!/re& +art$2 the &e%tor or o%li-or #a$ 'ot 1ai)e or )ar$ the r/les state& i' the (ollo1i'- liste& se!tio's0 (1) Se!tio' A-*0;(%)(8)(C)2 1hi!h &eals 1ith /se a'& o+eratio' o( the !ollateral %$ the se!/re& +art$4 (*) Se!tio' A-*102 1hi!h &eals 1ith re7/ests (or a' a!!o/'ti'- a'& re7/ests !o'!er'i'a list o( !ollateral a'& state#e't o( a!!o/'t4 (.) Se!tio' A-:0;(!)2 1hi!h &eals 1ith !olle!tio' a'& e'(or!e#e't o( !ollateral4 (8) Se!tio's A-:0<(a) a'& A-:19(!) to the e,te't that the$ &eal 1ith a++li!atio' or +a$#e't o( 'o'!ash +ro!ee&s o( !olle!tio'2 e'(or!e#e't2 or &is+ositio'4 (9) Se!tio's A-:0<(a) a'& A-:19(&) to the e,te't that the$ re7/ire a!!o/'ti'- (or or +a$#e't o( s/r+l/s +ro!ee&s o( !ollateral4 (:) Se!tio' A-:0A to the e,te't that it i#+oses /+o' a se!/re& +art$ that ta5es +ossessio' o( !ollateral 1itho/t 6/&i!ial +ro!ess the &/t$ to &o so 1itho/t %rea!h o( the +ea!e4 (;) Se!tio's A-:10(%)2 A-:112 A-:1.2 a'& A-:182 1hi!h &eal 1ith &is+ositio' o( !ollateral4 (<) Se!tio' A-:19(()2 1hi!h &eals 1ith !al!/latio' o( a &e(i!ie'!$ or s/r+l/s 1he' a &is+ositio' is #a&e to the se!/re& +art$2 a +erso' relate& to the se!/re& +art$2 or a se!o'&ar$ o%li-or4 (A) Se!tio' A-:1:2 1hi!h &eals 1ith e,+la'atio' o( the !al!/latio' o( a s/r+l/s or &e(i!ie'!$4 (10) Se!tio's A-:*02 A-:*12 a'& A-:**2 1hi!h &eal 1ith a!!e+ta'!e o( !ollateral i' satis(a!tio' o( o%li-atio'4 (11) Se!tio' A-:*.2 1hi!h &eals 1ith re&e#+tio' o( !ollateral4 (1*) Se!tio' A-:*82 1hi!h &eals 1ith +er#issi%le 1ai)ers4 a'& (1.) Se!tio's A-:*9 a'& A-:*:2 1hi!h &eal 1ith the se!/re& +art$Bs lia%ilit$ (or (ail/re to !o#+l$ 1ith this arti!le. 9-40+. )G"%%.%(T !( ST)(D)"DS C!(C%"(#(G "#G TS )(D D-T#%S. IaJ #./reed standards.' The +arties #a$ &eter#i'e %$ a-ree#e't the sta'&ar&s #eas/ri'- the (/l(ill#e't o( the ri-hts o( a &e%tor or o%li-or a'& the &/ties o( a se!/re& +art$ /'&er a r/le state& i' Se!tio' A-:0* i( the sta'&ar&s are 'ot #a'i(estl$ /'reaso'a%le.

I0J #./reed standards inapplica0le to 0reach of peace.' S/%se!tio' (a) &oes 'ot a++l$ to the &/t$ /'&er Se!tio' A-:0A to re(rai' (ro# %rea!hi'the +ea!e. 9-402. ,"!C%D-"% #' S%C-"#T/ )G"%%.%(T C!5%"S "%)$ ,"!,%"T/ !" '#*T-"%S. IaJ #EnforcementC personal and real propert!.' I( a se!/rit$ a-ree#e't !o)ers %oth +erso'al a'& real +ro+ert$2 a se!/re& +art$ #a$ +ro!ee&0 (1) /'&er this +art as to the +erso'al +ro+ert$ 1itho/t +re6/&i!i'- a'$ ri-hts 1ith res+e!t to the real +ro+ert$4 or (*) as to %oth the +erso'al +ro+ert$ a'& the real +ro+ert$ i' a!!or&a'!e 1ith the ri-hts 1ith res+e!t to the real +ro+ert$2 i' 1hi!h !ase the other +ro)isio's o( this +art &o 'ot a++l$. I0J #EnforcementC fixtures.' S/%6e!t to s/%se!tio' (!)2 i( a se!/rit$ a-ree#e't !o)ers -oo&s that are or %e!o#e (i,t/res2 a se!/re& +art$ #a$ +ro!ee&0 (1) /'&er this +art4 or (*) i' a!!or&a'!e 1ith the ri-hts 1ith res+e!t to real +ro+ert$2 i' 1hi!h !ase the other +ro)isio's o( this +art &o 'ot a++l$. IcJ #%emo&al of fixtures.' S/%6e!t to the other +ro)isio's o( this +art2 i( a se!/re& +art$ hol&i'- a se!/rit$ i'terest i' (i,t/res has +riorit$ o)er all o1'ers a'& e'!/#%ra'!ers o( the real +ro+ert$2 the se!/re& +art$2 a(ter &e(a/lt2 #a$ re#o)e the !ollateral (ro# the real +ro+ert$. IdJ #In@ur! caused 0! remo&al.' A se!/re& +art$ that re#o)es !ollateral shall +ro#+tl$ rei#%/rse a'$ e'!/#%ra'!er or o1'er o( the real +ro+ert$2 other tha' the &e%tor2 (or the !ost o( re+air o( a'$ +h$si!al i'6/r$ !a/se& %$ the re#o)al. The se!/re& +art$ 'ee& 'ot rei#%/rse the e'!/#%ra'!er or o1'er (or a'$ &i#i'/tio' i' )al/e o( the real +ro+ert$ !a/se& %$ the a%se'!e o( the -oo&s re#o)e& or %$ a'$ 'e!essit$ o( re+la!i'- the#. A +erso' e'title& to rei#%/rse#e't #a$ re(/se +er#issio' to re#o)e /'til the se!/re& +art$ -i)es a&e7/ate ass/ra'!e (or the +er(or#a'!e o( the o%li-atio' to rei#%/rse. 9-403. -(A(!>( D%1T!" !" S%C!(D)"/ !1$#G!". A se!/re& +art$ &oes 'ot o1e a &/t$ %ase& o' its stat/s as se!/re& +art$0 (1) to a +erso' that is a &e%tor or o%li-or2 /'less the se!/re& +art$ 5'o1s0 (A) that the +erso' is a &e%tor or o%li-or4 (@) the i&e'tit$ o( the +erso'4 a'& (C) ho1 to !o##/'i!ate 1ith the +erso'4 or (*) to a se!/re& +art$ or lie'hol&er that has (ile& a (i'a'!i'- state#e't a-ai'st a +erso'2 /'less the se!/re& +art$ 5'o1s0 (A) that the +erso' is a &e%tor4 a'& (@) the i&e'tit$ o( the +erso'. 9-404. T#.% !' D%')-$T '!" )G"#C-$T-")$ $#%(. >or +/r+oses o( this +art2 a &e(a/lt o!!/rs i' !o''e!tio' 1ith a' a-ri!/lt/ral lie' at the ti#e the se!/re& +art$ %e!o#es e'title& to e'(or!e the lie' i' a!!or&a'!e 1ith the stat/te /'&er 1hi!h it 1as !reate&.

 9-406. C!$$%CT#!( )(D %('!"C%.%(T 1/ S%C-"%D ,)"T/. IaJ #Collection and enforcement /enerall!.' I( so a-ree&2 a'& i' a'$ e)e't a(ter &e(a/lt2 a se!/re& +art$0 (1) #a$ 'oti($ a' a!!o/'t &e%tor or other +erso' o%li-ate& o' !ollateral to #a5e +a$#e't or other1ise re'&er +er(or#a'!e to or (or the %e'e(it o( the se!/re& +art$4 (*) #a$ ta5e a'$ +ro!ee&s to 1hi!h the se!/re& +art$ is e'title& /'&er Se!tio' A-.194 (.) #a$ e'(or!e the o%li-atio's o( a' a!!o/'t &e%tor or other +erso' o%li-ate& o' !ollateral a'& e,er!ise the ri-hts o( the &e%tor 1ith res+e!t to the o%li-atio' o( the a!!o/'t &e%tor or other +erso' o%li-ate& o' !ollateral to #a5e +a$#e't or other1ise re'&er +er(or#a'!e to the &e%tor2 a'& 1ith res+e!t to a'$ +ro+ert$ that se!/res the o%li-atio's o( the a!!o/'t &e%tor or other +erso' o%li-ate& o' the !ollateral4 (8) i( it hol&s a se!/rit$ i'terest i' a &e+osit a!!o/'t +er(e!te& %$ !o'trol /'&er Se!tio' A-108(a)(1)2 #a$ a++l$ the %ala'!e o( the &e+osit a!!o/'t to the o%li-atio' se!/re& %$ the &e+osit a!!o/'t4 a'& (9) i( it hol&s a se!/rit$ i'terest i' a &e+osit a!!o/'t +er(e!te& %$ !o'trol /'&er Se!tio' A-108(a)(*) or (.)2 #a$ i'str/!t the %a'5 to +a$ the %ala'!e o( the &e+osit a!!o/'t to or (or the %e'e(it o( the se!/re& +art$. I0J #5on@udicial enforcement of mort/a/e.' I( 'e!essar$ to e'a%le a se!/re& +art$ to e,er!ise /'&er s/%se!tio' (a)(.) the ri-ht o( a &e%tor to e'(or!e a #ort-a-e 'o'6/&i!iall$2 the se!/re& +art$ #a$ re!or& i' the o((i!e i' 1hi!h a re!or& o( the #ort-a-e is re!or&e&0 (1) a !o+$ o( the se!/rit$ a-ree#e't that !reates or +ro)i&es (or a se!/rit$ i'terest i' the o%li-atio' se!/re& %$ the #ort-a-e4 a'& (*) the se!/re& +art$Bs s1or' a((i&a)it i' re!or&a%le (or# stati'- that0 (A) a &e(a/lt has o!!/rre&4 a'& (@) the se!/re& +art$ is e'title& to e'(or!e the #ort-a-e 'o'6/&i!iall$. IcJ #Commerciall! reasona0le collection and enforcement.' A se!/re& +art$ shall +ro!ee& i' a !o##er!iall$ reaso'a%le #a''er i( the se!/re& +art$0 (1) /'&erta5es to !olle!t (ro# or e'(or!e a' o%li-atio' o( a' a!!o/'t &e%tor or other +erso' o%li-ate& o' !ollateral4 a'& (*) is e'title& to !har-e %a!5 /'!olle!te& !ollateral or other1ise to (/ll or li#ite& re!o/rse a-ai'st the &e%tor or a se!o'&ar$ o%li-or. IdJ #Expenses of collection and enforcement.' A se!/re& +art$ #a$ &e&/!t (ro# the !olle!tio's #a&e +/rs/a't to s/%se!tio' (!) reaso'a%le e,+e'ses o( !olle!tio' a'& e'(or!e#e't2 i'!l/&i'- reaso'a%le attor'e$Bs (ees a'& le-al e,+e'ses i'!/rre& %$ the se!/re& +art$. IeJ #3uties to secured part! not affected.' This se!tio' &oes 'ot &eter#i'e 1hether a' a!!o/'t &e%tor2 %a'52 or other +erso' o%li-ate& o' !ollateral o1es a &/t$ to a se!/re& +art$. 9-407. ),,$#C)T#!( !' ,"!C%%DS !' C!$$%CT#!( !" %('!"C%.%(T0 $#)1#$#T/ '!" D%'#C#%(C/ )(D "#G T T! S-",$-S. IaJ #.pplication of proceeds2 surplus2 and deficienc! if o0li/ation secured.' I( a se!/rit$ i'terest or a-ri!/lt/ral lie' se!/res +a$#e't or +er(or#a'!e o( a' o%li-atio'2 the (ollo1i'- r/les a++l$0

(1) A se!/re& +art$ shall a++l$ or +a$ o)er (or a++li!atio' the !ash +ro!ee&s o( !olle!tio' or e'(or!e#e't /'&er Se!tio' A-:0; i' the (ollo1i'- or&er to0 (A) the reaso'a%le e,+e'ses o( !olle!tio' a'& e'(or!e#e't a'&2 to the e,te't +ro)i&e& (or %$ a-ree#e't a'& 'ot +rohi%ite& %$ la12 reaso'a%le attor'e$Bs (ees a'& le-al e,+e'ses i'!/rre& %$ the se!/re& +art$4 (@) the satis(a!tio' o( o%li-atio's se!/re& %$ the se!/rit$ i'terest or a-ri!/lt/ral lie' /'&er 1hi!h the !olle!tio' or e'(or!e#e't is #a&e4 a'& (C) the satis(a!tio' o( o%li-atio's se!/re& %$ a'$ s/%or&i'ate se!/rit$ i'terest i' or other lie' o' the !ollateral s/%6e!t to the se!/rit$ i'terest or a-ri!/lt/ral lie' /'&er 1hi!h the !olle!tio' or e'(or!e#e't is #a&e i( the se!/re& +art$ re!ei)es a' a/the'ti!ate& &e#a'& (or +ro!ee&s %e(ore &istri%/tio' o( the +ro!ee&s is !o#+lete&. (*) I( re7/este& %$ a se!/re& +art$2 a hol&er o( a s/%or&i'ate se!/rit$ i'terest or other lie' shall (/r'ish reaso'a%le +roo( o( the i'terest or lie' 1ithi' a reaso'a%le ti#e. U'less the hol&er !o#+lies2 the se!/re& +art$ 'ee& 'ot !o#+l$ 1ith the hol&erBs &e#a'& /'&er +ara-ra+h (1)(C). (.) A se!/re& +art$ 'ee& 'ot a++l$ or +a$ o)er (or a++li!atio' 'o'!ash +ro!ee&s o( !olle!tio' a'& e'(or!e#e't /'&er Se!tio' A-:0; /'less the (ail/re to &o so 1o/l& %e !o##er!iall$ /'reaso'a%le. A se!/re& +art$ that a++lies or +a$s o)er (or a++li!atio' 'o'!ash +ro!ee&s shall &o so i' a !o##er!iall$ reaso'a%le #a''er. (8) A se!/re& +art$ shall a!!o/'t to a'& +a$ a &e%tor (or a'$ s/r+l/s2 a'& the o%li-or is lia%le (or a'$ &e(i!ie'!$. I0J #5o surplus or deficienc! in sales of certain ri/hts to pa!ment.' I( the /'&erl$i'- tra'sa!tio' is a sale o( a!!o/'ts2 !hattel +a+er2 +a$#e't i'ta'-i%les2 or +ro#issor$ 'otes2 the &e%tor is 'ot e'title& to a'$ s/r+l/s2 a'& the o%li-or is 'ot lia%le (or a'$ &e(i!ie'!$. 9-409. S%C-"%D ,)"T/@S "#G T T! T)A% ,!SS%SS#!( )'T%" D%')-$T. IaJ # ossession+ renderin/ eBuipment unusa0le+ disposition on de0tor;s premises.' A(ter &e(a/lt2 a se!/re& +art$0 (1) #a$ ta5e +ossessio' o( the !ollateral4 a'& (*) 1itho/t re#o)al2 #a$ re'&er e7/i+#e't /'/sa%le a'& &is+ose o( !ollateral o' a &e%torBs +re#ises /'&er Se!tio' A-:10. I0J #Fudicial and non@udicial process.' A se!/re& +art$ #a$ +ro!ee& /'&er s/%se!tio' (a)0 (1) +/rs/a't to 6/&i!ial +ro!ess4 or (*) 1itho/t 6/&i!ial +ro!ess2 i( it +ro!ee&s 1itho/t %rea!h o( the +ea!e. IcJ #.ssem0l! of collateral.' I( so a-ree&2 a'& i' a'$ e)e't a(ter &e(a/lt2 a se!/re& +art$ #a$ re7/ire the &e%tor to asse#%le the !ollateral a'& #a5e it a)aila%le to the se!/re& +art$ at a +la!e to %e &esi-'ate& %$ the se!/re& +art$ 1hi!h is reaso'a%l$ !o')e'ie't to %oth +arties. 9-410. D#S,!S#T#!( !' C!$$)T%")$ )'T%" D%')-$T. IaJ #3isposition after default.'

A(ter &e(a/lt2 a se!/re& +art$ #a$ sell2 lease2 li!e'se2 or other1ise &is+ose o( a'$ or all o( the !ollateral i' its +rese't !o'&itio' or (ollo1i'- a'$ !o##er!iall$ reaso'a%le +re+aratio' or +ro!essi'-. I0J #Commerciall! reasona0le disposition.' E)er$ as+e!t o( a &is+ositio' o( !ollateral2 i'!l/&i'- the #etho&2 #a''er2 ti#e2 +la!e2 a'& other ter#s2 #/st %e !o##er!iall$ reaso'a%le. I( !o##er!iall$ reaso'a%le2 a se!/re& +art$ #a$ &is+ose o( !ollateral %$ +/%li! or +ri)ate +ro!ee&i'-s2 %$ o'e or #ore !o'tra!ts2 as a /'it or i' +ar!els2 a'& at a'$ ti#e a'& +la!e a'& o' a'$ ter#s. IcJ # urchase 0! secured part!.' A se!/re& +art$ #a$ +/r!hase !ollateral0 (1) at a +/%li! &is+ositio'4 or (*) at a +ri)ate &is+ositio' o'l$ i( the !ollateral is o( a 5i'& that is !/sto#aril$ sol& o' a re!o-'i3e& #ar5et or the s/%6e!t o( 1i&el$ &istri%/te& sta'&ar& +ri!e 7/otatio's. IdJ #Warranties on disposition.' A !o'tra!t (or sale2 lease2 li!e'se2 or other &is+ositio' i'!l/&es the 1arra'ties relati'- to title2 +ossessio'2 7/iet e'6o$#e't2 a'& the li5e 1hi!h %$ o+eratio' o( la1 a!!o#+a'$ a )ol/'tar$ &is+ositio' o( +ro+ert$ o( the 5i'& s/%6e!t to the !o'tra!t. IeJ #3isclaimer of <arranties.' A se!/re& +art$ #a$ &is!lai# or #o&i($ 1arra'ties /'&er s/%se!tio' (&)0 (1) i' a #a''er that 1o/l& %e e((e!ti)e to &is!lai# or #o&i($ the 1arra'ties i' a )ol/'tar$ &is+ositio' o( +ro+ert$ o( the 5i'& s/%6e!t to the !o'tra!t o( &is+ositio'4 or (*) %$ !o##/'i!ati'- to the +/r!haser a re!or& e)i&e'!i'- the !o'tra!t (or &is+ositio' a'& i'!l/&i'- a' e,+ress &is!lai#er or #o&i(i!atio' o( the 1arra'ties. IfJ #%ecord sufficient to disclaim <arranties.' A re!or& is s/((i!ie't to &is!lai# 1arra'ties /'&er s/%se!tio' (e) i( it i'&i!ates ?There is 'o 1arra't$ relati'- to title2 +ossessio'2 7/iet e'6o$#e't2 or the li5e i' this &is+ositio'? or /ses 1or&s o( si#ilar i#+ort. 9-411. (!T#'#C)T#!( 1%'!"% D#S,!S#T#!( !' C!$$)T%")$. IaJ #)5otification date.)' I' this se!tio'2 ?'oti(i!atio' &ate? #ea's the earlier o( the &ate o' 1hi!h0 (1) a se!/re& +art$ se'&s to the &e%tor a'& a'$ se!o'&ar$ o%li-or a' a/the'ti!ate& 'oti(i!atio' o( &is+ositio'4 or (*) the &e%tor a'& a'$ se!o'&ar$ o%li-or 1ai)e the ri-ht to 'oti(i!atio'. I0J #5otification of disposition reBuired.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&)2 a se!/re& +art$ that &is+oses o( !ollateral /'&er Se!tio' A-:10 shall se'& to the +erso's s+e!i(ie& i' s/%se!tio' (!) a reaso'a%le a/the'ti!ate& 'oti(i!atio' o( &is+ositio'. IcJ # ersons to 0e notified.' To !o#+l$ 1ith s/%se!tio' (%)2 the se!/re& +art$ shall se'& a' a/the'ti!ate& 'oti(i!atio' o( &is+ositio' to0 (1) the &e%tor4 (*) a'$ se!o'&ar$ o%li-or4 a'& (.) i( the !ollateral is other tha' !o's/#er -oo&s0

(A) a'$ other +erso' (ro# 1hi!h the se!/re& +art$ has re!ei)e&2 %e(ore the 'oti(i!atio' &ate2 a' a/the'ti!ate& 'oti(i!atio' o( a !lai# o( a' i'terest i' the !ollateral4 (@) a'$ other se!/re& +art$ or lie'hol&er that2 10 &a$s %e(ore the 'oti(i!atio' &ate2 hel& a se!/rit$ i'terest i' or other lie' o' the !ollateral +er(e!te& %$ the (ili'- o( a (i'a'!i'state#e't that0 (i) i&e'ti(ie& the !ollateral4 (ii) 1as i'&e,e& /'&er the &e%torBs 'a#e as o( that &ate4 a'& (iii) 1as (ile& i' the o((i!e i' 1hi!h to (ile a (i'a'!i'- state#e't a-ai'st the &e%tor !o)eri'- the !ollateral as o( that &ate4 a'& (C) a'$ other se!/re& +art$ that2 10 &a$s %e(ore the 'oti(i!atio' &ate2 hel& a se!/rit$ i'terest i' the !ollateral +er(e!te& %$ !o#+lia'!e 1ith a stat/te2 re-/latio'2 or treat$ &es!ri%e& i' Se!tio' A-.11(a). IdJ #-u0section I0J inapplica0leC perisha0le collateral+ reco/niAed mar>et.' S/%se!tio' (%) &oes 'ot a++l$ i( the !ollateral is +erisha%le or threate's to &e!li'e s+ee&il$ i' )al/e or is o( a t$+e !/sto#aril$ sol& o' a re!o-'i3e& #ar5et. IeJ #Compliance <ith su0section IcJI3JI"J.' A se!/re& +art$ !o#+lies 1ith the re7/ire#e't (or 'oti(i!atio' +res!ri%e& %$ s/%se!tio' (!)(.)(@) i(0 (1) 'ot later tha' *0 &a$s or earlier tha' .0 &a$s %e(ore the 'oti(i!atio' &ate2 the se!/re& +art$ re7/ests2 i' a !o##er!iall$ reaso'a%le #a''er2 i'(or#atio' !o'!er'i'(i'a'!i'- state#e'ts i'&e,e& /'&er the &e%torBs 'a#e i' the o((i!e i'&i!ate& i' s/%se!tio' (!)(.)(@)4 a'& (*) %e(ore the 'oti(i!atio' &ate2 the se!/re& +art$0 (A) &i& 'ot re!ei)e a res+o'se to the re7/est (or i'(or#atio'4 or (@) re!ei)e& a res+o'se to the re7/est (or i'(or#atio' a'& se't a' a/the'ti!ate& 'oti(i!atio' o( &is+ositio' to ea!h se!/re& +art$ or other lie'hol&er 'a#e& i' that res+o'se 1hose (i'a'!i'- state#e't !o)ere& the !ollateral. 9-41&. T#.%$#(%SS !' (!T#'#C)T#!( 1%'!"% D#S,!S#T#!( !' C!$$)T%")$. IaJ #%easona0le time is Buestion of fact.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (%)2 1hether a 'oti(i!atio' is se't 1ithi' a reaso'a%le ti#e is a 7/estio' o( (a!t. I0J #1:-da! period sufficient in non-consumer transaction.' I' a tra'sa!tio' other tha' a !o's/#er tra'sa!tio'2 a 'oti(i!atio' o( &is+ositio' se't a(ter &e(a/lt a'& 10 &a$s or #ore %e(ore the earliest ti#e o( &is+ositio' set (orth i' the 'oti(i!atio' is se't 1ithi' a reaso'a%le ti#e %e(ore the &is+ositio'. 9-41+. C!(T%(TS )(D '!". !' (!T#'#C)T#!( 1%'!"% D#S,!S#T#!( !' C!$$)T%")$C G%(%")$. E,!e+t i' a !o's/#er--oo&s tra'sa!tio'2 the (ollo1i'- r/les a++l$0 (1) The !o'te'ts o( a 'oti(i!atio' o( &is+ositio' are s/((i!ie't i( the 'oti(i!atio'0 (A) &es!ri%es the &e%tor a'& the se!/re& +art$4 (@) &es!ri%es the !ollateral that is the s/%6e!t o( the i'te'&e& &is+ositio'4 (C) states the #etho& o( i'te'&e& &is+ositio'4 (=) states that the &e%tor is e'title& to a' a!!o/'ti'- o( the /'+ai& i'&e%te&'ess a'& states the !har-e2 i( a'$2 (or a' a!!o/'ti'-4 a'&

(E) states the ti#e a'& +la!e o( a +/%li! &is+ositio' or the ti#e a(ter 1hi!h a'$ other &is+ositio' is to %e #a&e. (*) Chether the !o'te'ts o( a 'oti(i!atio' that la!5s a'$ o( the i'(or#atio' s+e!i(ie& i' +ara-ra+h (1) are 'e)ertheless s/((i!ie't is a 7/estio' o( (a!t. (.) The !o'te'ts o( a 'oti(i!atio' +ro)i&i'- s/%sta'tiall$ the i'(or#atio' s+e!i(ie& i' +ara-ra+h (1) are s/((i!ie't2 e)e' i( the 'oti(i!atio' i'!l/&es0 (A) i'(or#atio' 'ot s+e!i(ie& %$ that +ara-ra+h4 or (@) #i'or errors that are 'ot serio/sl$ #islea&i'-. (8) A +arti!/lar +hrasi'- o( the 'oti(i!atio' is 'ot re7/ire&. (9) The (ollo1i'- (or# o( 'oti(i!atio' a'& the (or# a++eari'- i' Se!tio' A-:18(.)2 1he' !o#+lete&2 ea!h +ro)i&es s/((i!ie't i'(or#atio'0 NOTI>ICATION O> =ISPOSITION O> COLLATERAL To0 Na#e o( &e%tor2 o%li-or2 or other +erso' to 1hi!h the 'oti(i!atio' is se't" >ro#0 Na#e2 a&&ress2 a'& tele+ho'e '/#%er o( se!/re& +art$" Na#e o( =e%tor(s)0 I'!l/&e o'l$ i( &e%tor(s) are 'ot a' a&&ressee" >or a +/%li! &is+ositio'0" Ce 1ill sell or lease or li!e'se2 as a++li!a%le" the &es!ri%e !ollateral" to the hi-hest 7/ali(ie& %i&&er" i' +/%li! as (ollo1s0 =a$ a'& =ate0 JJJJJJJJ Ti#e0 JJJJJJJJ Pla!e0 JJJJJJJJ >or a +ri)ate &is+ositio'0" Ce 1ill sell or lease or li!e'se2 as a++li!a%le" the &es!ri%e !ollateral" +ri)atel$ so#eti#e a(ter &a$ a'& &ate". Go/ are e'title& to a' a!!o/'ti'- o( the /'+ai& i'&e%te&'ess se!/re& %$ the +ro+ert$ that 1e i'te'& to sell or lease or li!e'se2 as a++li!a%le" (or a !har-e o( I JJJJJJJJ". Go/ #a$ re7/est a' a!!o/'ti'- %$ !alli'- /s at tele+ho'e '/#%er" E'& o( >or#" 9-412. C!(T%(TS )(D '!". !' (!T#'#C)T#!( 1%'!"% D#S,!S#T#!( !' C!$$)T%")$C C!(S-.%"-G!!DS T")(S)CT#!(. I' a !o's/#er--oo&s tra'sa!tio'2 the (ollo1i'- r/les a++l$0 (1) A 'oti(i!atio' o( &is+ositio' #/st +ro)i&e the (ollo1i'- i'(or#atio'0 (A) the i'(or#atio' s+e!i(ie& i' Se!tio' A-:1.(1)4 (@) a &es!ri+tio' o( a'$ lia%ilit$ (or a &e(i!ie'!$ o( the +erso' to 1hi!h the 'oti(i!atio' is se't4 (C) a tele+ho'e '/#%er (ro# 1hi!h the a#o/'t that #/st %e +ai& to the se!/re& +art$ to re&ee# the !ollateral /'&er Se!tio' A-:*. is a)aila%le4 a'& (=) a tele+ho'e '/#%er or #aili'- a&&ress (ro# 1hi!h a&&itio'al i'(or#atio' !o'!er'i'- the &is+ositio' a'& the o%li-atio' se!/re& is a)aila%le. (*) A +arti!/lar +hrasi'- o( the 'oti(i!atio' is 'ot re7/ire&. (.) The (ollo1i'- (or# o( 'oti(i!atio'2 1he' !o#+lete&2 +ro)i&es s/((i!ie't i'(or#atio'0 Na#e a'& a&&ress o( se!/re& +art$ " =ate " NOTICE O> OUR PLAN TO SELL PROPERTG Na#e a'& a&&ress o( a'$ o%li-or 1ho is also a &e%tor "

S/%6e!t0 I&e'ti(i!atio' o( Tra'sa!tio' " Ce ha)e $o/r &es!ri%e !ollateral "2 %e!a/se $o/ %ro5e +ro#ises i' o/r a-ree#e't. >or a +/%li! &is+ositio'0 " Ce 1ill sell &es!ri%e !ollateral" at +/%li! sale. A sale !o/l& i'!l/&e a lease or li!e'se. The sale 1ill %e hel& as (ollo1s0 =ate0 JJJJJ Ti#e0 JJJJJ Pla!e0 JJJJJ Go/ #a$ atte'& the sale a'& %ri'- %i&&ers i( $o/ 1a't. >or a +ri)ate &is+ositio'0 " Ce 1ill sell &es!ri%e !ollateral" at +ri)ate sale so#eti#e a(ter &ate". A sale !o/l& i'!l/&e a lease or li!e'se. The #o'e$ that 1e -et (ro# the sale (a(ter +a$i'- o/r !osts) 1ill re&/!e the a#o/'t $o/ o1e. I( 1e -et less #o'e$ tha' $o/ o1e2 $o/ 1ill or 1ill 'ot2 as a++li!a%le" " still o1e /s the &i((ere'!e. I( 1e -et #ore #o'e$ tha' $o/ o1e2 $o/ 1ill -et the e,tra #o'e$2 /'less 1e #/st +a$ it to so#eo'e else. Go/ !a' -et the +ro+ert$ %a!5 at a'$ ti#e %e(ore 1e sell it %$ +a$i'- /s the (/ll a#o/'t $o/ o1e ('ot 6/st the +ast &/e +a$#e'ts)2 i'!l/&i'- o/r e,+e'ses. To lear' the e,a!t a#o/'t $o/ #/st +a$2 !all /s at tele+ho'e '/#%er " ". I( $o/ 1a't /s to e,+lai' to $o/ i' 1riti'- ho1 1e ha)e (i-/re& the a#o/'t that $o/ o1e /s2 $o/ #a$ !all /s at ? tele+ho'e '/#%er " " or 1rite /s at se!/re& +art$Bs a&&ress" " a'& re7/est a 1ritte' e,+la'atio'. Ce 1ill !har-e $o/ I JJJJJ (or the e,+la'atio' i( 1e se't $o/ a'other 1ritte' e,+la'atio' o( the a#o/'t $o/ o1e /s 1ithi' the last si, #o'ths." I( $o/ 'ee& #ore i'(or#atio' a%o/t the sale !all /s at tele+ho'e '/#%er" " or 1rite /s at se!/re& +art$Bs a&&ress" ". Ce are se'&i'- this 'oti!e to the (ollo1i'- other +eo+le 1ho ha)e a' i'terest i' &es!ri%e !ollateral" or 1ho o1e #o'e$ /'&er $o/r a-ree#e't0 Na#es o( all other &e%tors a'& o%li-ors2 i( a'$" E'& o( >or#" (8) A 'oti(i!atio' i' the (or# o( +ara-ra+h (.) is s/((i!ie't2 e)e' i( a&&itio'al i'(or#atio' a++ears at the e'& o( the (or#. (9) A 'oti(i!atio' i' the (or# o( +ara-ra+h (.) is s/((i!ie't2 e)e' i( it i'!l/&es errors i' i'(or#atio' 'ot re7/ire& %$ +ara-ra+h (1)2 /'less the error is #islea&i'- 1ith res+e!t to ri-hts arisi'- /'&er this arti!le. (:) I( a 'oti(i!atio' /'&er this se!tio' is 'ot i' the (or# o( +ara-ra+h (.)2 la1 other tha' this arti!le &eter#i'es the e((e!t o( i'!l/&i'- i'(or#atio' 'ot re7/ire& %$ +ara-ra+h (1). 9-413. ),,$#C)T#!( !' ,"!C%%DS !' D#S,!S#T#!(0 $#)1#$#T/ '!" D%'#C#%(C/ )(D "#G T T! S-",$-S. IaJ #.pplication of proceeds.' A se!/re& +art$ shall a++l$ or +a$ o)er (or a++li!atio' the !ash +ro!ee&s o( &is+ositio' /'&er Se!tio' A-:10 i' the (ollo1i'- or&er to0

(1) the reaso'a%le e,+e'ses o( reta5i'-2 hol&i'-2 +re+ari'- (or &is+ositio'2 +ro!essi'-2 a'& &is+osi'-2 a'&2 to the e,te't +ro)i&e& (or %$ a-ree#e't a'& 'ot +rohi%ite& %$ la12 reaso'a%le attor'e$Bs (ees a'& le-al e,+e'ses i'!/rre& %$ the se!/re& +art$4 (*) the satis(a!tio' o( o%li-atio's se!/re& %$ the se!/rit$ i'terest or a-ri!/lt/ral lie' /'&er 1hi!h the &is+ositio' is #a&e4 (.) the satis(a!tio' o( o%li-atio's se!/re& %$ a'$ s/%or&i'ate se!/rit$ i'terest i' or other s/%or&i'ate lie' o' the !ollateral i(0 (A) the se!/re& +art$ re!ei)es (ro# the hol&er o( the s/%or&i'ate se!/rit$ i'terest or other lie' a' a/the'ti!ate& &e#a'& (or +ro!ee&s %e(ore &istri%/tio' o( the +ro!ee&s is !o#+lete&4 a'& (@) i' a !ase i' 1hi!h a !o'si-'or has a' i'terest i' the !ollateral2 the s/%or&i'ate se!/rit$ i'terest or other lie' is se'ior to the i'terest o( the !o'si-'or4 a'& (8) a se!/re& +art$ that is a !o'si-'or o( the !ollateral i( the se!/re& +art$ re!ei)es (ro# the !o'si-'or a' a/the'ti!ate& &e#a'& (or +ro!ee&s %e(ore &istri%/tio' o( the +ro!ee&s is !o#+lete&. I0J # roof of su0ordinate interest.' I( re7/este& %$ a se!/re& +art$2 a hol&er o( a s/%or&i'ate se!/rit$ i'terest or other lie' shall (/r'ish reaso'a%le +roo( o( the i'terest or lie' 1ithi' a reaso'a%le ti#e. U'less the hol&er &oes so2 the se!/re& +art$ 'ee& 'ot !o#+l$ 1ith the hol&erBs &e#a'& /'&er s/%se!tio' (a)(.). IcJ #.pplication of noncash proceeds.' A se!/re& +art$ 'ee& 'ot a++l$ or +a$ o)er (or a++li!atio' 'o'!ash +ro!ee&s o( &is+ositio' /'&er Se!tio' A-:10 /'less the (ail/re to &o so 1o/l& %e !o##er!iall$ /'reaso'a%le. A se!/re& +art$ that a++lies or +a$s o)er (or a++li!atio' 'o'!ash +ro!ee&s shall &o so i' a !o##er!iall$ reaso'a%le #a''er. IdJ #-urplus or deficienc! if o0li/ation secured.' I( the se!/rit$ i'terest /'&er 1hi!h a &is+ositio' is #a&e se!/res +a$#e't or +er(or#a'!e o( a' o%li-atio'2 a(ter #a5i'- the +a$#e'ts a'& a++li!atio's re7/ire& %$ s/%se!tio' (a) a'& +er#itte& %$ s/%se!tio' (!)0 (1) /'less s/%se!tio' (a)(8) re7/ires the se!/re& +art$ to a++l$ or +a$ o)er !ash +ro!ee&s to a !o'si-'or2 the se!/re& +art$ shall a!!o/'t to a'& +a$ a &e%tor (or a'$ s/r+l/s4 a'& (*) the o%li-or is lia%le (or a'$ &e(i!ie'!$. IeJ #5o surplus or deficienc! in sales of certain ri/hts to pa!ment.' I( the /'&erl$i'- tra'sa!tio' is a sale o( a!!o/'ts2 !hattel +a+er2 +a$#e't i'ta'-i%les2 or +ro#issor$ 'otes0 (1) the &e%tor is 'ot e'title& to a'$ s/r+l/s4 a'& (*) the o%li-or is 'ot lia%le (or a'$ &e(i!ie'!$. IfJ #Calculation of surplus or deficienc! in disposition to person related to secured part!.' The s/r+l/s or &e(i!ie'!$ (ollo1i'- a &is+ositio' is !al!/late& %ase& o' the a#o/'t o( +ro!ee&s that 1o/l& ha)e %ee' reali3e& i' a &is+ositio' !o#+l$i'- 1ith this +art to a tra's(eree other tha' the se!/re& +art$2 a +erso' relate& to the se!/re& +art$2 or a se!o'&ar$ o%li-or i(0

(1) the tra's(eree i' the &is+ositio' is the se!/re& +art$2 a +erso' relate& to the se!/re& +art$2 or a se!o'&ar$ o%li-or4 a'& (*) the a#o/'t o( +ro!ee&s o( the &is+ositio' is si-'i(i!a'tl$ %elo1 the ra'-e o( +ro!ee&s that a !o#+l$i'- &is+ositio' to a +erso' other tha' the se!/re& +art$2 a +erso' relate& to the se!/re& +art$2 or a se!o'&ar$ o%li-or 1o/l& ha)e %ro/-ht. I/J #Cash proceeds recei&ed 0! @unior secured part!.' A se!/re& +art$ that re!ei)es !ash +ro!ee&s o( a &is+ositio' i' -oo& (aith a'& 1itho/t 5'o1le&-e that the re!ei+t )iolates the ri-hts o( the hol&er o( a se!/rit$ i'terest or other lie' that is 'ot s/%or&i'ate to the se!/rit$ i'terest or a-ri!/lt/ral lie' /'&er 1hi!h the &is+ositio' is #a&e0 (1) ta5es the !ash +ro!ee&s (ree o( the se!/rit$ i'terest or other lie'4 (*) is 'ot o%li-ate& to a++l$ the +ro!ee&s o( the &is+ositio' to the satis(a!tio' o( o%li-atio's se!/re& %$ the se!/rit$ i'terest or other lie'4 a'& (.) is 'ot o%li-ate& to a!!o/'t to or +a$ the hol&er o( the se!/rit$ i'terest or other lie' (or a'$ s/r+l/s. 9-414. %*,$)()T#!( !' C)$C-$)T#!( !' S-",$-S !" D%'#C#%(C/. IaJ #3efinitions.' I' this se!tio'0 (1) ?E,+la'atio'? #ea's a 1riti'- that0 (A) states the a#o/'t o( the s/r+l/s or &e(i!ie'!$4 (@) +ro)i&es a' e,+la'atio' i' a!!or&a'!e 1ith s/%se!tio' (!) o( ho1 the se!/re& +art$ !al!/late& the s/r+l/s or &e(i!ie'!$4 (C) states2 i( a++li!a%le2 that (/t/re &e%its2 !re&its2 !har-es2 i'!l/&i'- a&&itio'al !re&it ser)i!e !har-es or i'terest2 re%ates2 a'& e,+e'ses #a$ a((e!t the a#o/'t o( the s/r+l/s or &e(i!ie'!$4 a'& (=) +ro)i&es a tele+ho'e '/#%er or #aili'- a&&ress (ro# 1hi!h a&&itio'al i'(or#atio' !o'!er'i'- the tra'sa!tio' is a)aila%le. (*) ?Re7/est? #ea's a re!or&0 (A) a/the'ti!ate& %$ a &e%tor or !o's/#er o%li-or4 (@) re7/esti'- that the re!i+ie't +ro)i&e a' e,+la'atio'4 a'& (C) se't a(ter &is+ositio' o( the !ollateral /'&er Se!tio' A-:10. I0J #Explanation of calculation.' I' a !o's/#er--oo&s tra'sa!tio' i' 1hi!h the &e%tor is e'title& to a s/r+l/s or a !o's/#er o%li-or is lia%le (or a &e(i!ie'!$ /'&er Se!tio' A-:192 the se!/re& +art$ shall0 (1) se'& a' e,+la'atio' to the &e%tor or !o's/#er o%li-or2 as a++li!a%le2 a(ter the &is+ositio' a'&0 (A) %e(ore or 1he' the se!/re& +art$ a!!o/'ts to the &e%tor a'& +a$s a'$ s/r+l/s or (irst #a5es 1ritte' &e#a'& o' the !o's/#er o%li-or a(ter the &is+ositio' (or +a$#e't o( the &e(i!ie'!$4 a'& (@) 1ithi' 18 &a$s a(ter re!ei+t o( a re7/est4 or (*) i' the !ase o( a !o's/#er o%li-or 1ho is lia%le (or a &e(i!ie'!$2 1ithi' 18 &a$s a(ter re!ei+t o( a re7/est2 se'& to the !o's/#er o%li-or a re!or& 1ai)i'- the se!/re& +art$Bs ri-ht to a &e(i!ie'!$. IcJ #%eBuired information.'

To !o#+l$ 1ith s/%se!tio' (a)(1)(@)2 a 1riti'- #/st +ro)i&e the (ollo1i'- i'(or#atio' i' the (ollo1i'- or&er0 (1) the a--re-ate a#o/'t o( o%li-atio's se!/re& %$ the se!/rit$ i'terest /'&er 1hi!h the &is+ositio' 1as #a&e2 a'&2 i( the a#o/'t re(le!ts a re%ate o( /'ear'e& i'terest or !re&it ser)i!e !har-e2 a' i'&i!atio' o( that (a!t2 !al!/late& as o( a s+e!i(ie& &ate0 (A) i( the se!/re& +art$ ta5es or re!ei)es +ossessio' o( the !ollateral a(ter &e(a/lt2 'ot #ore tha' .9 &a$s %e(ore the se!/re& +art$ ta5es or re!ei)es +ossessio'4 or (@) i( the se!/re& +art$ ta5es or re!ei)es +ossessio' o( the !ollateral %e(ore &e(a/lt or &oes 'ot ta5e +ossessio' o( the !ollateral2 'ot #ore tha' .9 &a$s %e(ore the &is+ositio'4 (*) the a#o/'t o( +ro!ee&s o( the &is+ositio'4 (.) the a--re-ate a#o/'t o( the o%li-atio's a(ter &e&/!ti'- the a#o/'t o( +ro!ee&s4 (8) the a#o/'t2 i' the a--re-ate or %$ t$+e2 a'& t$+es o( e,+e'ses2 i'!l/&i'- e,+e'ses o( reta5i'-2 hol&i'-2 +re+ari'- (or &is+ositio'2 +ro!essi'-2 a'& &is+osi'- o( the !ollateral2 a'& attor'e$Bs (ees se!/re& %$ the !ollateral 1hi!h are 5'o1' to the se!/re& +art$ a'& relate to the !/rre't &is+ositio'4 (9) the a#o/'t2 i' the a--re-ate or %$ t$+e2 a'& t$+es o( !re&its2 i'!l/&i'- re%ates o( i'terest or !re&it ser)i!e !har-es2 to 1hi!h the o%li-or is 5'o1' to %e e'title& a'& 1hi!h are 'ot re(le!te& i' the a#o/'t i' +ara-ra+h (1)4 a'& (:) the a#o/'t o( the s/r+l/s or &e(i!ie'!$. IdJ #-u0stantial compliance.' A +arti!/lar +hrasi'- o( the e,+la'atio' is 'ot re7/ire&. A' e,+la'atio' !o#+l$i's/%sta'tiall$ 1ith the re7/ire#e'ts o( s/%se!tio' (a) is s/((i!ie't2 e)e' i( it i'!l/&es #i'or errors that are 'ot serio/sl$ #islea&i'-. IeJ #Char/es for responses.' A &e%tor or !o's/#er o%li-or is e'title& 1itho/t !har-e to o'e res+o'se to a re7/est /'&er this se!tio' &/ri'- a'$ si,-#o'th +erio& i' 1hi!h the se!/re& +art$ &i& 'ot se'& to the &e%tor or !o's/#er o%li-or a' e,+la'atio' +/rs/a't to s/%se!tio' (%)(1). The se!/re& +art$ #a$ re7/ire +a$#e't o( a !har-e 'ot e,!ee&i'- I*9 (or ea!h a&&itio'al res+o'se. 9-416. "#G TS !' T")(S'%"%% !' C!$$)T%")$. IaJ #Effects of disposition.' A se!/re& +art$Bs &is+ositio' o( !ollateral a(ter &e(a/lt0 (1) tra's(ers to a tra's(eree (or )al/e all o( the &e%torBs ri-hts i' the !ollateral4 (*) &is!har-es the se!/rit$ i'terest /'&er 1hi!h the &is+ositio' is #a&e4 a'& (.) &is!har-es a'$ s/%or&i'ate se!/rit$ i'terest or other s/%or&i'ate lie' other tha' lie's !reate& /'&er !ite a!ts or stat/tes +ro)i&i'- (or lie's2 i( a'$2 that are 'ot to %e &is!har-e&"". I0J #%i/hts of /ood-faith transferee.' A tra's(eree that a!ts i' -oo& (aith ta5es (ree o( the ri-hts a'& i'terests &es!ri%e& i' s/%se!tio' (a)2 e)e' i( the se!/re& +art$ (ails to !o#+l$ 1ith this arti!le or the re7/ire#e'ts o( a'$ 6/&i!ial +ro!ee&i'-. IcJ #%i/hts of other transferee.' I( a tra's(eree &oes 'ot ta5e (ree o( the ri-hts a'& i'terests &es!ri%e& i' s/%se!tio' (a)2 the tra's(eree ta5es the !ollateral s/%6e!t to0

(1) the &e%torBs ri-hts i' the !ollateral4 (*) the se!/rit$ i'terest or a-ri!/lt/ral lie' /'&er 1hi!h the &is+ositio' is #a&e4 a'& (.) a'$ other se!/rit$ i'terest or other lie'. 9-417. "#G TS )(D D-T#%S !' C%"T)#( S%C!(D)"/ !1$#G!"S. IaJ #%i/hts and duties of secondar! o0li/or.' A se!o'&ar$ o%li-or a!7/ires the ri-hts a'& %e!o#es o%li-ate& to +er(or# the &/ties o( the se!/re& +art$ a(ter the se!o'&ar$ o%li-or0 (1) re!ei)es a' assi-'#e't o( a se!/re& o%li-atio' (ro# the se!/re& +art$4 (*) re!ei)es a tra's(er o( !ollateral (ro# the se!/re& +art$ a'& a-rees to a!!e+t the ri-hts a'& ass/#e the &/ties o( the se!/re& +art$4 or (.) is s/%ro-ate& to the ri-hts o( a se!/re& +art$ 1ith res+e!t to !ollateral. I0J #Effect of assi/nment2 transfer2 or su0ro/ation.' A' assi-'#e't2 tra's(er2 or s/%ro-atio' &es!ri%e& i' s/%se!tio' (a)0 (1) is 'ot a &is+ositio' o( !ollateral /'&er Se!tio' A-:104 a'& (*) relie)es the se!/re& +art$ o( (/rther &/ties /'&er this arti!le. 9-419. T")(S'%" !' "%C!"D !" $%G)$ T#T$%. IaJ #)Transfer statement.)' I' this se!tio'2 ?tra's(er state#e't? #ea's a re!or& a/the'ti!ate& %$ a se!/re& +art$ stati'-0 (1) that the &e%tor has &e(a/lte& i' !o''e!tio' 1ith a' o%li-atio' se!/re& %$ s+e!i(ie& !ollateral4 (*) that the se!/re& +art$ has e,er!ise& its +ost-&e(a/lt re#e&ies 1ith res+e!t to the !ollateral4 (.) that2 %$ reaso' o( the e,er!ise2 a tra's(eree has a!7/ire& the ri-hts o( the &e%tor i' the !ollateral4 a'& (8) the 'a#e a'& #aili'- a&&ress o( the se!/re& +art$2 &e%tor2 a'& tra's(eree. I0J #Effect of transfer statement.' A tra's(er state#e't e'titles the tra's(eree to the tra's(er o( re!or& o( all ri-hts o( the &e%tor i' the !ollateral s+e!i(ie& i' the state#e't i' a'$ o((i!ial (ili'-2 re!or&i'-2 re-istratio'2 or !erti(i!ate-o(-title s$ste# !o)eri'- the !ollateral. I( a tra's(er state#e't is +rese'te& 1ith the a++li!a%le (ee a'& re7/est (or# to the o((i!ial or o((i!e res+o'si%le (or #ai'tai'i'- the s$ste#2 the o((i!ial or o((i!e shall0 (1) a!!e+t the tra's(er state#e't4 (*) +ro#+tl$ a#e'& its re!or&s to re(le!t the tra's(er4 a'& (.) i( a++li!a%le2 iss/e a 'e1 a++ro+riate !erti(i!ate o( title i' the 'a#e o( the tra's(eree. IcJ #Transfer not a disposition+ no relief of secured part!;s duties.' A tra's(er o( the re!or& or le-al title to !ollateral to a se!/re& +art$ /'&er s/%se!tio' (%) or other1ise is 'ot o( itsel( a &is+ositio' o( !ollateral /'&er this arti!le a'& &oes 'ot o( itsel( relie)e the se!/re& +art$ o( its &/ties /'&er this arti!le. 9-4&0. )CC%,T)(C% !' C!$$)T%")$ #( '-$$ !" ,)"T#)$ S)T#S')CT#!( !' !1$#G)T#!(0 C!.,-$S!"/ D#S,!S#T#!( !' C!$$)T%")$. IaJ #Conditions to acceptance in satisfaction.'

E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (-)2 a se!/re& +art$ #a$ a!!e+t !ollateral i' (/ll or +artial satis(a!tio' o( the o%li-atio' it se!/res o'l$ i(0 (1) the &e%tor !o'se'ts to the a!!e+ta'!e /'&er s/%se!tio' (!)4 (*) the se!/re& +art$ &oes 'ot re!ei)e2 1ithi' the ti#e set (orth i' s/%se!tio' (&)2 a 'oti(i!atio' o( o%6e!tio' to the +ro+osal a/the'ti!ate& %$0 (A) a +erso' to 1hi!h the se!/re& +art$ 1as re7/ire& to se'& a +ro+osal /'&er Se!tio' A-:*14 or (@) a'$ other +erso'2 other tha' the &e%tor2 hol&i'- a' i'terest i' the !ollateral s/%or&i'ate to the se!/rit$ i'terest that is the s/%6e!t o( the +ro+osal4 (.) i( the !ollateral is !o's/#er -oo&s2 the !ollateral is 'ot i' the +ossessio' o( the &e%tor 1he' the &e%tor !o'se'ts to the a!!e+ta'!e4 a'& (8) s/%se!tio' (e) &oes 'ot re7/ire the se!/re& +art$ to &is+ose o( the !ollateral or the &e%tor 1ai)es the re7/ire#e't +/rs/a't to Se!tio' A-:*8. I0J # urported acceptance ineffecti&e.' A +/r+orte& or a++are't a!!e+ta'!e o( !ollateral /'&er this se!tio' is i'e((e!ti)e /'less0 (1) the se!/re& +art$ !o'se'ts to the a!!e+ta'!e i' a' a/the'ti!ate& re!or& or se'&s a +ro+osal to the &e%tor4 a'& (*) the !o'&itio's o( s/%se!tio' (a) are #et. IcJ #3e0tor;s consent.' >or +/r+oses o( this se!tio'0 (1) a &e%tor !o'se'ts to a' a!!e+ta'!e o( !ollateral i' +artial satis(a!tio' o( the o%li-atio' it se!/res o'l$ i( the &e%tor a-rees to the ter#s o( the a!!e+ta'!e i' a re!or& a/the'ti!ate& a(ter &e(a/lt4 a'& (*) a &e%tor !o'se'ts to a' a!!e+ta'!e o( !ollateral i' (/ll satis(a!tio' o( the o%li-atio' it se!/res o'l$ i( the &e%tor a-rees to the ter#s o( the a!!e+ta'!e i' a re!or& a/the'ti!ate& a(ter &e(a/lt or the se!/re& +art$0 (A) se'&s to the &e%tor a(ter &e(a/lt a +ro+osal that is /'!o'&itio'al or s/%6e!t o'l$ to a !o'&itio' that !ollateral 'ot i' the +ossessio' o( the se!/re& +art$ %e +reser)e& or #ai'tai'e&4 (@) i' the +ro+osal2 +ro+oses to a!!e+t !ollateral i' (/ll satis(a!tio' o( the o%li-atio' it se!/res4 a'& (C) &oes 'ot re!ei)e a 'oti(i!atio' o( o%6e!tio' a/the'ti!ate& %$ the &e%tor 1ithi' *0 &a$s a(ter the +ro+osal is se't. IdJ #Effecti&eness of notification.' To %e e((e!ti)e /'&er s/%se!tio' (a)(*)2 a 'oti(i!atio' o( o%6e!tio' #/st %e re!ei)e& %$ the se!/re& +art$0 (1) i' the !ase o( a +erso' to 1hi!h the +ro+osal 1as se't +/rs/a't to Se!tio' A-:*12 1ithi' *0 &a$s a(ter 'oti(i!atio' 1as se't to that +erso'4 a'& (*) i' other !ases0 (A) 1ithi' *0 &a$s a(ter the last 'oti(i!atio' 1as se't +/rs/a't to Se!tio' A-:*14 or (@) i( a 'oti(i!atio' 1as 'ot se't2 %e(ore the &e%tor !o'se'ts to the a!!e+ta'!e /'&er s/%se!tio' (!). IeJ #=andator! disposition of consumer /oods.'

A se!/re& +art$ that has ta5e' +ossessio' o( !ollateral shall &is+ose o( the !ollateral +/rs/a't to Se!tio' A-:10 1ithi' the ti#e s+e!i(ie& i' s/%se!tio' (() i(0 (1) :0 +er!e't o( the !ash +ri!e has %ee' +ai& i' the !ase o( a +/r!hase-#o'e$ se!/rit$ i'terest i' !o's/#er -oo&s4 or (*) :0 +er!e't o( the +ri'!i+al a#o/'t o( the o%li-atio' se!/re& has %ee' +ai& i' the !ase o( a 'o'-+/r!hase-#o'e$ se!/rit$ i'terest i' !o's/#er -oo&s. IfJ #Compliance <ith mandator! disposition reBuirement.' To !o#+l$ 1ith s/%se!tio' (e)2 the se!/re& +art$ shall &is+ose o( the !ollateral0 (1) 1ithi' A0 &a$s a(ter ta5i'- +ossessio'4 or (*) 1ithi' a'$ lo'-er +erio& to 1hi!h the &e%tor a'& all se!o'&ar$ o%li-ors ha)e a-ree& i' a' a-ree#e't to that e((e!t e'tere& i'to a'& a/the'ti!ate& a(ter &e(a/lt. I/J #5o partial satisfaction in consumer transaction.' I' a !o's/#er tra'sa!tio'2 a se!/re& +art$ #a$ 'ot a!!e+t !ollateral i' +artial satis(a!tio' o( the o%li-atio' it se!/res. 9-4&1. (!T#'#C)T#!( !' ,"!,!S)$ T! )CC%,T C!$$)T%")$. IaJ # ersons to <hich proposal to 0e sent.' A se!/re& +art$ that &esires to a!!e+t !ollateral i' (/ll or +artial satis(a!tio' o( the o%li-atio' it se!/res shall se'& its +ro+osal to0 (1) a'$ +erso' (ro# 1hi!h the se!/re& +art$ has re!ei)e&2 %e(ore the &e%tor !o'se'te& to the a!!e+ta'!e2 a' a/the'ti!ate& 'oti(i!atio' o( a !lai# o( a' i'terest i' the !ollateral4 (*) a'$ other se!/re& +art$ or lie'hol&er that2 10 &a$s %e(ore the &e%tor !o'se'te& to the a!!e+ta'!e2 hel& a se!/rit$ i'terest i' or other lie' o' the !ollateral +er(e!te& %$ the (ili'- o( a (i'a'!i'- state#e't that0 (A) i&e'ti(ie& the !ollateral4 (@) 1as i'&e,e& /'&er the &e%torBs 'a#e as o( that &ate4 a'& (C) 1as (ile& i' the o((i!e or o((i!es i' 1hi!h to (ile a (i'a'!i'- state#e't a-ai'st the &e%tor !o)eri'- the !ollateral as o( that &ate4 a'& (.) a'$ other se!/re& +art$ that2 10 &a$s %e(ore the &e%tor !o'se'te& to the a!!e+ta'!e2 hel& a se!/rit$ i'terest i' the !ollateral +er(e!te& %$ !o#+lia'!e 1ith a stat/te2 re-/latio'2 or treat$ &es!ri%e& i' Se!tio' A-.11(a). I0J # roposal to 0e sent to secondar! o0li/or in partial satisfaction.' A se!/re& +art$ that &esires to a!!e+t !ollateral i' +artial satis(a!tio' o( the o%li-atio' it se!/res shall se'& its +ro+osal to a'$ se!o'&ar$ o%li-or i' a&&itio' to the +erso's &es!ri%e& i' s/%se!tio' (a). 9-4&&. %''%CT !' )CC%,T)(C% !' C!$$)T%")$. IaJ #Effect of acceptance.' A se!/re& +art$Bs a!!e+ta'!e o( !ollateral i' (/ll or +artial satis(a!tio' o( the o%li-atio' it se!/res0 (1) &is!har-es the o%li-atio' to the e,te't !o'se'te& to %$ the &e%tor4 (*) tra's(ers to the se!/re& +art$ all o( a &e%torBs ri-hts i' the !ollateral4 (.) &is!har-es the se!/rit$ i'terest or a-ri!/lt/ral lie' that is the s/%6e!t o( the &e%torBs !o'se't a'& a'$ s/%or&i'ate se!/rit$ i'terest or other s/%or&i'ate lie'4 a'& (8) ter#i'ates a'$ other s/%or&i'ate i'terest.

I0J #3ischar/e of su0ordinate interest not<ithstandin/ noncompliance.' A s/%or&i'ate i'terest is &is!har-e& or ter#i'ate& /'&er s/%se!tio' (a)2 e)e' i( the se!/re& +art$ (ails to !o#+l$ 1ith this arti!le. 9-4&+. "#G T T! "%D%%. C!$$)T%")$. IaJ # ersons that ma! redeem.' A &e%tor2 a'$ se!o'&ar$ o%li-or2 or a'$ other se!/re& +art$ or lie'hol&er #a$ re&ee# !ollateral. I0J #%eBuirements for redemption.' To re&ee# !ollateral2 a +erso' shall te'&er0 (1) (/l(ill#e't o( all o%li-atio's se!/re& %$ the !ollateral4 a'& (*) the reaso'a%le e,+e'ses a'& attor'e$Bs (ees &es!ri%e& i' Se!tio' A-:19(a)(1). IcJ #When redemption ma! occur.' A re&e#+tio' #a$ o!!/r at a'$ ti#e %e(ore a se!/re& +art$0 (1) has !olle!te& !ollateral /'&er Se!tio' A-:0;4 (*) has &is+ose& o( !ollateral or e'tere& i'to a !o'tra!t (or its &is+ositio' /'&er Se!tio' A-:104 or (.) has a!!e+te& !ollateral i' (/ll or +artial satis(a!tio' o( the o%li-atio' it se!/res /'&er Se!tio' A-:**. 9-4&2. >)#5%". IaJ #Wai&er of disposition notification.' A &e%tor or se!o'&ar$ o%li-or #a$ 1ai)e the ri-ht to 'oti(i!atio' o( &is+ositio' o( !ollateral /'&er Se!tio' A-:11 o'l$ %$ a' a-ree#e't to that e((e!t e'tere& i'to a'& a/the'ti!ate& a(ter &e(a/lt. I0J #Wai&er of mandator! disposition.' A &e%tor #a$ 1ai)e the ri-ht to re7/ire &is+ositio' o( !ollateral /'&er Se!tio' A-:*0(e) o'l$ %$ a' a-ree#e't to that e((e!t e'tere& i'to a'& a/the'ti!ate& a(ter &e(a/lt. IcJ #Wai&er of redemption ri/ht.' E,!e+t i' a !o's/#er--oo&s tra'sa!tio'2 a &e%tor or se!o'&ar$ o%li-or #a$ 1ai)e the ri-ht to re&ee# !ollateral /'&er Se!tio' A-:*. o'l$ %$ a' a-ree#e't to that e((e!t e'tere& i'to a'& a/the'ti!ate& a(ter &e(a/lt. [Subpart &. (onco:pliance =ith )rticle] 9-4&3. "%.%D#%S '!" S%C-"%D ,)"T/@S ')#$-"% T! C!.,$/ >#T )"T#C$%. IaJ #Fudicial orders concernin/ noncompliance.' I( it is esta%lishe& that a se!/re& +art$ is 'ot +ro!ee&i'- i' a!!or&a'!e 1ith this arti!le2 a !o/rt #a$ or&er or restrai' !olle!tio'2 e'(or!e#e't2 or &is+ositio' o( !ollateral o' a++ro+riate ter#s a'& !o'&itio's. I0J #3ama/es for noncompliance.' S/%6e!t to s/%se!tio's (!)2 (&)2 a'& (()2 a +erso' is lia%le (or &a#a-es i' the a#o/'t o( a'$ loss !a/se& %$ a (ail/re to !o#+l$ 1ith this arti!le. Loss !a/se& %$ a (ail/re to !o#+l$ #a$ i'!l/&e loss res/lti'- (ro# the &e%torBs i'a%ilit$ to o%tai'2 or i'!rease& !osts o(2 alter'ati)e (i'a'!i'-. IcJ # ersons entitled to reco&er dama/es+ statutor! dama/es in consumer/oods transaction.' E,!e+t as other1ise +ro)i&e& i' Se!tio' A-:*<0

(1) a +erso' that2 at the ti#e o( the (ail/re2 1as a &e%tor2 1as a' o%li-or2 or hel& a se!/rit$ i'terest i' or other lie' o' the !ollateral #a$ re!o)er &a#a-es /'&er s/%se!tio' (%) (or its loss4 a'& (*) i( the !ollateral is !o's/#er -oo&s2 a +erso' that 1as a &e%tor or a se!o'&ar$ o%li-or at the ti#e a se!/re& +art$ (aile& to !o#+l$ 1ith this +art #a$ re!o)er (or that (ail/re i' a'$ e)e't a' a#o/'t 'ot less tha' the !re&it ser)i!e !har-e +l/s 10 +er!e't o( the +ri'!i+al a#o/'t o( the o%li-atio' or the ti#e-+ri!e &i((ere'tial +l/s 10 +er!e't o( the !ash +ri!e. IdJ #%eco&er! <hen deficienc! eliminated or reduced.' A &e%tor 1hose &e(i!ie'!$ is eli#i'ate& /'&er Se!tio' A-:*: #a$ re!o)er &a#a-es (or the loss o( a'$ s/r+l/s. Do1e)er2 a &e%tor or se!o'&ar$ o%li-or 1hose &e(i!ie'!$ is eli#i'ate& or re&/!e& /'&er Se!tio' A-:*: #a$ 'ot other1ise re!o)er /'&er s/%se!tio' (%) (or 'o'!o#+lia'!e 1ith the +ro)isio's o( this +art relati'- to !olle!tio'2 e'(or!e#e't2 &is+ositio'2 or a!!e+ta'!e. IeJ #-tatutor! dama/esC noncompliance <ith specified pro&isions.' I' a&&itio' to a'$ &a#a-es re!o)era%le /'&er s/%se!tio' (%)2 the &e%tor2 !o's/#er o%li-or2 or +erso' 'a#e& as a &e%tor i' a (ile& re!or&2 as a++li!a%le2 #a$ re!o)er I900 i' ea!h !ase (ro# a +erso' that0 (1) (ails to !o#+l$ 1ith Se!tio' A-*0<4 (*) (ails to !o#+l$ 1ith Se!tio' A-*0A4 (.) (iles a re!or& that the +erso' is 'ot e'title& to (ile /'&er Se!tio' A-90A(a)4 (8) (ails to !a/se the se!/re& +art$ o( re!or& to (ile or se'& a ter#i'atio' state#e't as re7/ire& %$ Se!tio' A-91.(a) or (!)4 (9) (ails to !o#+l$ 1ith Se!tio' A-:1:(%)(1) a'& 1hose (ail/re is +art o( a +atter'2 or !o'siste't 1ith a +ra!ti!e2 o( 'o'!o#+lia'!e4 or (:) (ails to !o#+l$ 1ith Se!tio' A-:1:(%)(*). IfJ #-tatutor! dama/esC noncompliance <ith -ection $-21:.' A &e%tor or !o's/#er o%li-or #a$ re!o)er &a#a-es /'&er s/%se!tio' (%) a'&2 i' a&&itio'2 I900 i' ea!h !ase (ro# a +erso' that2 1itho/t reaso'a%le !a/se2 (ails to !o#+l$ 1ith a re7/est /'&er Se!tio' A-*10. A re!i+ie't o( a re7/est /'&er Se!tio' A*10 1hi!h 'e)er !lai#e& a' i'terest i' the !ollateral or o%li-atio's that are the s/%6e!t o( a re7/est /'&er that se!tio' has a reaso'a%le e,!/se (or (ail/re to !o#+l$ 1ith the re7/est 1ithi' the #ea'i'- o( this s/%se!tio'. I/J #*imitation of securit! interestC noncompliance <ith -ection $-21:.' I( a se!/re& +art$ (ails to !o#+l$ 1ith a re7/est re-ar&i'- a list o( !ollateral or a state#e't o( a!!o/'t /'&er Se!tio' A-*102 the se!/re& +art$ #a$ !lai# a se!/rit$ i'terest o'l$ as sho1' i' the list or state#e't i'!l/&e& i' the re7/est as a-ai'st a +erso' that is reaso'a%l$ #isle& %$ the (ail/re. 9-4&4. )CT#!( #( > #C D%'#C#%(C/ !" S-",$-S #S #( #SS-%. IaJ #.pplica0le rules if amount of deficienc! or surplus in issue.' I' a' a!tio' arisi'- (ro# a tra'sa!tio'2 other tha' a !o's/#er tra'sa!tio'2 i' 1hi!h the a#o/'t o( a &e(i!ie'!$ or s/r+l/s is i' iss/e2 the (ollo1i'- r/les a++l$0

(1) A se!/re& +art$ 'ee& 'ot +ro)e !o#+lia'!e 1ith the +ro)isio's o( this +art relati'to !olle!tio'2 e'(or!e#e't2 &is+ositio'2 or a!!e+ta'!e /'less the &e%tor or a se!o'&ar$ o%li-or +la!es the se!/re& +art$Bs !o#+lia'!e i' iss/e. (*) I( the se!/re& +art$Bs !o#+lia'!e is +la!e& i' iss/e2 the se!/re& +art$ has the %/r&e' o( esta%lishi'- that the !olle!tio'2 e'(or!e#e't2 &is+ositio'2 or a!!e+ta'!e 1as !o'&/!te& i' a!!or&a'!e 1ith this +art. (.) E,!e+t as other1ise +ro)i&e& i' Se!tio' A-:*<2 i( a se!/re& +art$ (ails to +ro)e that the !olle!tio'2 e'(or!e#e't2 &is+ositio'2 or a!!e+ta'!e 1as !o'&/!te& i' a!!or&a'!e 1ith the +ro)isio's o( this +art relati'- to !olle!tio'2 e'(or!e#e't2 &is+ositio'2 or a!!e+ta'!e2 the lia%ilit$ o( a &e%tor or a se!o'&ar$ o%li-or (or a &e(i!ie'!$ is li#ite& to a' a#o/'t %$ 1hi!h the s/# o( the se!/re& o%li-atio'2 e,+e'ses2 a'& attor'e$Bs (ees e,!ee&s the -reater o(0 (A) the +ro!ee&s o( the !olle!tio'2 e'(or!e#e't2 &is+ositio'2 or a!!e+ta'!e4 or (@) the a#o/'t o( +ro!ee&s that 1o/l& ha)e %ee' reali3e& ha& the 'o'!o#+l$i'se!/re& +art$ +ro!ee&e& i' a!!or&a'!e 1ith the +ro)isio's o( this +art relati'- to !olle!tio'2 e'(or!e#e't2 &is+ositio'2 or a!!e+ta'!e. (8) >or +/r+oses o( +ara-ra+h (.)(@)2 the a#o/'t o( +ro!ee&s that 1o/l& ha)e %ee' reali3e& is e7/al to the s/# o( the se!/re& o%li-atio'2 e,+e'ses2 a'& attor'e$Bs (ees /'less the se!/re& +art$ +ro)es that the a#o/'t is less tha' that s/#. (9) I( a &e(i!ie'!$ or s/r+l/s is !al!/late& /'&er Se!tio' A-:19(()2 the &e%tor or o%li-or has the %/r&e' o( esta%lishi'- that the a#o/'t o( +ro!ee&s o( the &is+ositio' is si-'i(i!a'tl$ %elo1 the ra'-e o( +ri!es that a !o#+l$i'- &is+ositio' to a +erso' other tha' the se!/re& +art$2 a +erso' relate& to the se!/re& +art$2 or a se!o'&ar$ o%li-or 1o/l& ha)e %ro/-ht. I0J #5on-consumer transactions+ no inference.' The li#itatio' o( the r/les i' s/%se!tio' (a) to tra'sa!tio's other tha' !o's/#er tra'sa!tio's is i'te'&e& to lea)e to the !o/rt the &eter#i'atio' o( the +ro+er r/les i' !o's/#er tra'sa!tio's. The !o/rt #a$ 'ot i'(er (ro# that li#itatio' the 'at/re o( the +ro+er r/le i' !o's/#er tra'sa!tio's a'& #a$ !o'ti'/e to a++l$ esta%lishe& a++roa!hes. 9-4&6. D%T%".#()T#!( !' > %T %" C!(D-CT >)S C!..%"C#)$$/ "%)S!()1$%. IaJ #6reater amount o0taina0le under other circumstances+ no preclusion of commercial reasona0leness.' The (a!t that a -reater a#o/'t !o/l& ha)e %ee' o%tai'e& %$ a !olle!tio'2 e'(or!e#e't2 &is+ositio'2 or a!!e+ta'!e at a &i((ere't ti#e or i' a &i((ere't #etho& (ro# that sele!te& %$ the se!/re& +art$ is 'ot o( itsel( s/((i!ie't to +re!l/&e the se!/re& +art$ (ro# esta%lishi'- that the !olle!tio'2 e'(or!e#e't2 &is+ositio'2 or a!!e+ta'!e 1as #a&e i' a !o##er!iall$ reaso'a%le #a''er. I0J #3ispositions that are commerciall! reasona0le.' A &is+ositio' o( !ollateral is #a&e i' a !o##er!iall$ reaso'a%le #a''er i( the &is+ositio' is #a&e0 (1) i' the /s/al #a''er o' a'$ re!o-'i3e& #ar5et4 (*) at the +ri!e !/rre't i' a'$ re!o-'i3e& #ar5et at the ti#e o( the &is+ositio'4 or (.) other1ise i' !o'(or#it$ 1ith reaso'a%le !o##er!ial +ra!ti!es a#o'- &ealers i' the t$+e o( +ro+ert$ that 1as the s/%6e!t o( the &is+ositio'.

IcJ #.ppro&al 0! court or on 0ehalf of creditors.' A !olle!tio'2 e'(or!e#e't2 &is+ositio'2 or a!!e+ta'!e is !o##er!iall$ reaso'a%le i( it has %ee' a++ro)e&0 (1) i' a 6/&i!ial +ro!ee&i'-4 (*) %$ a %o'a (i&e !re&itorsB !o##ittee4 (.) %$ a re+rese'tati)e o( !re&itors4 or (8) %$ a' assi-'ee (or the %e'e(it o( !re&itors. IdJ #.ppro&al under su0section IcJ not necessar!+ a0sence of appro&al has no effect.' A++ro)al /'&er s/%se!tio' (!) 'ee& 'ot %e o%tai'e&2 a'& la!5 o( a++ro)al &oes 'ot #ea' that the !olle!tio'2 e'(or!e#e't2 &is+ositio'2 or a!!e+ta'!e is 'ot !o##er!iall$ reaso'a%le. 9-4&7. (!($#)1#$#T/ )(D $#.#T)T#!( !( $#)1#$#T/ !' S%C-"%D ,)"T/0 $#)1#$#T/ !' S%C!(D)"/ !1$#G!". IaJ #*imitation of lia0ilit! of secured part! for noncompliance <ith article.' U'less a se!/re& +art$ 5'o1s that a +erso' is a &e%tor or o%li-or2 5'o1s the i&e'tit$ o( the +erso'2 a'& 5'o1s ho1 to !o##/'i!ate 1ith the +erso'0 (1) the se!/re& +art$ is 'ot lia%le to the +erso'2 or to a se!/re& +art$ or lie'hol&er that has (ile& a (i'a'!i'- state#e't a-ai'st the +erso'2 (or (ail/re to !o#+l$ 1ith this arti!le4 a'& (*) the se!/re& +art$Bs (ail/re to !o#+l$ 1ith this arti!le &oes 'ot a((e!t the lia%ilit$ o( the +erso' (or a &e(i!ie'!$. I0J #*imitation of lia0ilit! 0ased on status as secured part!.' A se!/re& +art$ is 'ot lia%le %e!a/se o( its stat/s as se!/re& +art$0 (1) to a +erso' that is a &e%tor or o%li-or2 /'less the se!/re& +art$ 5'o1s0 (A) that the +erso' is a &e%tor or o%li-or4 (@) the i&e'tit$ o( the +erso'4 a'& (C) ho1 to !o##/'i!ate 1ith the +erso'4 or (*) to a se!/re& +art$ or lie'hol&er that has (ile& a (i'a'!i'- state#e't a-ai'st a +erso'2 /'less the se!/re& +art$ 5'o1s0 (A) that the +erso' is a &e%tor4 a'& (@) the i&e'tit$ o( the +erso'. IcJ #*imitation of lia0ilit! if reasona0le 0elief that transaction not a consumer/oods transaction or consumer transaction.' A se!/re& +art$ is 'ot lia%le to a'$ +erso'2 a'& a +erso'Bs lia%ilit$ (or a &e(i!ie'!$ is 'ot a((e!te&2 %e!a/se o( a'$ a!t or o#issio' arisi'- o/t o( the se!/re& +art$Bs reaso'a%le %elie( that a tra'sa!tio' is 'ot a !o's/#er--oo&s tra'sa!tio' or a !o's/#er tra'sa!tio' or that -oo&s are 'ot !o's/#er -oo&s2 i( the se!/re& +art$Bs %elie( is %ase& o' its reaso'a%le relia'!e o'0 (1) a &e%torBs re+rese'tatio' !o'!er'i'- the +/r+ose (or 1hi!h !ollateral 1as to %e /se&2 a!7/ire&2 or hel&4 or (*) a' o%li-orBs re+rese'tatio' !o'!er'i'- the +/r+ose (or 1hi!h a se!/re& o%li-atio' 1as i'!/rre&. IdJ #*imitation of lia0ilit! for statutor! dama/es.'

A se!/re& +art$ is 'ot lia%le to a'$ +erso' /'&er Se!tio' A-:*9(!)(*) (or its (ail/re to !o#+l$ 1ith Se!tio' A-:1:. IeJ #*imitation of multiple lia0ilit! for statutor! dama/es.' A se!/re& +art$ is 'ot lia%le /'&er Se!tio' A-:*9(!)(*) #ore tha' o'!e 1ith res+e!t to a'$ o'e se!/re& o%li-atio'. Part ;. Tra'sitio' 9-601. %''%CT#5% D)T%. This A!t" ta5es e((e!t o' H/l$ 12 *001. 9-60&. S)5#(GS C$)-S%. IaJ # re-effecti&e-date transactions or liens.' E,!e+t as other1ise +ro)i&e& i' this +art2 this A!t" a++lies to a tra'sa!tio' or lie' 1ithi' its s!o+e2 e)e' i( the tra'sa!tio' or lie' 1as e'tere& i'to or !reate& %e(ore this A!t" ta5es e((e!t.. I0J #Continuin/ &alidit!.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (!) a'& Se!tio's A-;0. thro/-h A-;0A0 (1) tra'sa!tio's a'& lie's that 1ere 'ot -o)er'e& %$ (or#er Arti!le A"2 1ere )ali&l$ e'tere& i'to or !reate& %e(ore this A!t" ta5es e((e!t2 a'& 1o/l& %e s/%6e!t to this A!t" i( the$ ha& %ee' e'tere& i'to or !reate& a(ter this A!t" ta5es e((e!t2 a'& the ri-hts2 &/ties2 a'& i'terests (lo1i'- (ro# those tra'sa!tio's a'& lie's re#ai' )ali& a(ter this A!t" ta5es e((e!t4 a'& (*) the tra'sa!tio's a'& lie's #a$ %e ter#i'ate&2 !o#+lete&2 !o's/##ate&2 a'& e'(or!e& as re7/ire& or +er#itte& %$ this A!t" or %$ the la1 that other1ise 1o/l& a++l$ i( this A!t" ha& 'ot ta5e' e((e!t. IcJ # re-effecti&e-date proceedin/s.' This A!t" &oes 'ot a((e!t a' a!tio'2 !ase2 or +ro!ee&i'- !o##e'!e& %e(ore this A!t" ta5es e((e!t. 9-60+. S%C-"#T/ #(T%"%ST ,%"'%CT%D 1%'!"% %''%CT#5% D)T%. IaJ #Continuin/ priorit! o&er lien creditorC perfection reBuirements satisfied.' A se!/rit$ i'terest that is e'(or!ea%le i##e&iatel$ %e(ore this A!t" ta5es e((e!t a'& 1o/l& ha)e +riorit$ o)er the ri-hts o( a +erso' that %e!o#es a lie' !re&itor at that ti#e is a +er(e!te& se!/rit$ i'terest /'&er this A!t" i(2 1he' this A!t" ta5es e((e!t2 the a++li!a%le re7/ire#e'ts (or e'(or!ea%ilit$ a'& +er(e!tio' /'&er this A!t" are satis(ie& 1itho/t (/rther a!tio'. I0J #Continuin/ priorit! o&er lien creditorC perfection reBuirements not satisfied.' E,!e+t as other1ise +ro)i&e& i' Se!tio' A-;092 i(2 i##e&iatel$ %e(ore this A!t" ta5es e((e!t2 a se!/rit$ i'terest is e'(or!ea%le a'& 1o/l& ha)e +riorit$ o)er the ri-hts o( a +erso' that %e!o#es a lie' !re&itor at that ti#e2 %/t the a++li!a%le re7/ire#e'ts (or e'(or!ea%ilit$ or +er(e!tio' /'&er this A!t" are 'ot satis(ie& 1he' this A!t" ta5es e((e!t2 the se!/rit$ i'terest0 (1) is a +er(e!te& se!/rit$ i'terest (or o'e $ear a(ter this A!t" ta5es e((e!t4 (*) re#ai's e'(or!ea%le therea(ter o'l$ i( the se!/rit$ i'terest %e!o#es e'(or!ea%le /'&er Se!tio' A-*0. %e(ore the $ear e,+ires4 a'&

(.) re#ai's +er(e!te& therea(ter o'l$ i( the a++li!a%le re7/ire#e'ts (or +er(e!tio' /'&er this A!t" are satis(ie& %e(ore the $ear e,+ires. 9-602. S%C-"#T/ #(T%"%ST -(,%"'%CT%D 1%'!"% %''%CT#5% D)T%. A se!/rit$ i'terest that is e'(or!ea%le i##e&iatel$ %e(ore this A!t" ta5es e((e!t %/t 1hi!h 1o/l& %e s/%or&i'ate to the ri-hts o( a +erso' that %e!o#es a lie' !re&itor at that ti#e0 (1) re#ai's a' e'(or!ea%le se!/rit$ i'terest (or o'e $ear a(ter this A!t" ta5es e((e!t4 (*) re#ai's e'(or!ea%le therea(ter i( the se!/rit$ i'terest %e!o#es e'(or!ea%le /'&er Se!tio' A-*0. 1he' this A!t" ta5es e((e!t or 1ithi' o'e $ear therea(ter4 a'& (.) %e!o#es +er(e!te&0 (A) 1itho/t (/rther a!tio'2 1he' this A!t" ta5es e((e!t i( the a++li!a%le re7/ire#e'ts (or +er(e!tio' /'&er this A!t" are satis(ie& %e(ore or at that ti#e4 or (@) 1he' the a++li!a%le re7/ire#e'ts (or +er(e!tio' are satis(ie& i( the re7/ire#e'ts are satis(ie& a(ter that ti#e. 9-603. %''%CT#5%(%SS !' )CT#!( T)A%( 1%'!"% %''%CT#5% D)T%. IaJ # re-effecti&e-date action+ one-!ear perfection period unless reperfected.' I( a!tio'2 other tha' the (ili'- o( a (i'a'!i'- state#e't2 is ta5e' %e(ore this A!t" ta5es e((e!t a'& the a!tio' 1o/l& ha)e res/lte& i' +riorit$ o( a se!/rit$ i'terest o)er the ri-hts o( a +erso' that %e!o#es a lie' !re&itor ha& the se!/rit$ i'terest %e!o#e e'(or!ea%le %e(ore this A!t" ta5es e((e!t2 the a!tio' is e((e!ti)e to +er(e!t a se!/rit$ i'terest that atta!hes /'&er this A!t" 1ithi' o'e $ear a(ter this A!t" ta5es e((e!t. A' atta!he& se!/rit$ i'terest %e!o#es /'+er(e!te& o'e $ear a(ter this A!t" ta5es e((e!t /'less the se!/rit$ i'terest %e!o#es a +er(e!te& se!/rit$ i'terest /'&er this A!t" %e(ore the e,+iratio' o( that +erio&. I0J # re-effecti&e-date filin/.' The (ili'- o( a (i'a'!i'- state#e't %e(ore this A!t" ta5es e((e!t is e((e!ti)e to +er(e!t a se!/rit$ i'terest to the e,te't the (ili'- 1o/l& satis($ the a++li!a%le re7/ire#e'ts (or +er(e!tio' /'&er this A!t". IcJ # re-effecti&e-date filin/ in @urisdiction formerl! /o&ernin/ perfection.' This A!t" &oes 'ot re'&er i'e((e!ti)e a' e((e!ti)e (i'a'!i'- state#e't that2 %e(ore this A!t" ta5es e((e!t2 is (ile& a'& satis(ies the a++li!a%le re7/ire#e'ts (or +er(e!tio' /'&er the la1 o( the 6/ris&i!tio' -o)er'i'- +er(e!tio' as +ro)i&e& i' (or#er Se!tio' A-10.". Do1e)er2 e,!e+t as other1ise +ro)i&e& i' s/%se!tio's (&) a'& (e) a'& Se!tio' A-;0:2 the (i'a'!i'- state#e't !eases to %e e((e!ti)e at the earlier o(0 (1) the ti#e the (i'a'!i'- state#e't 1o/l& ha)e !ease& to %e e((e!ti)e /'&er the la1 o( the 6/ris&i!tio' i' 1hi!h it is (ile&4 or (*) H/'e .02 *00:. IdJ #Continuation statement.' The (ili'- o( a !o'ti'/atio' state#e't a(ter this A!t" ta5es e((e!t &oes 'ot !o'ti'/e the e((e!ti)e'ess o( the (i'a'!i'- state#e't (ile& %e(ore this A!t" ta5es e((e!t. Do1e)er2 /+o' the ti#el$ (ili'- o( a !o'ti'/atio' state#e't a(ter this A!t" ta5es e((e!t a'& i' a!!or&a'!e 1ith the la1 o( the 6/ris&i!tio' -o)er'i'- +er(e!tio' as +ro)i&e& i' Part .2 the e((e!ti)e'ess o( a (i'a'!i'- state#e't (ile& i' the sa#e o((i!e i' that 6/ris&i!tio'

%e(ore this A!t" ta5es e((e!t !o'ti'/es (or the +erio& +ro)i&e& %$ the la1 o( that 6/ris&i!tio'. IeJ #.pplication of su0section IcJI2J to transmittin/ utilit! financin/ statement.' S/%se!tio' (!)(*) a++lies to a (i'a'!i'- state#e't that2 %e(ore this A!t" ta5es e((e!t2 is (ile& a-ai'st a tra's#itti'- /tilit$ a'& satis(ies the a++li!a%le re7/ire#e'ts (or +er(e!tio' /'&er the la1 o( the 6/ris&i!tio' -o)er'i'- +er(e!tio' as +ro)i&e& i' (or#er Se!tio' A10." o'l$ to the e,te't that Part . +ro)i&es that the la1 o( a 6/ris&i!tio' other tha' the 6/ris&i!tio' i' 1hi!h the (i'a'!i'- state#e't is (ile& -o)er's +er(e!tio' o( a se!/rit$ i'terest i' !ollateral !o)ere& %$ the (i'a'!i'- state#e't. IfJ #.pplication of art (.' A (i'a'!i'- state#e't that i'!l/&es a (i'a'!i'- state#e't (ile& %e(ore this A!t" ta5es e((e!t a'& a !o'ti'/atio' state#e't (ile& a(ter this A!t" ta5es e((e!t is e((e!ti)e o'l$ to the e,te't that it satis(ies the re7/ire#e'ts o( Part 9 (or a' i'itial (i'a'!i'- state#e't. 9-604. > %( #(#T#)$ '#()(C#(G ST)T%.%(T S-''#C%S T! C!(T#(-% %''%CT#5%(%SS !' '#()(C#(G ST)T%.%(T. IaJ #Initial financin/ statement in lieu of continuation statement.' The (ili'- o( a' i'itial (i'a'!i'- state#e't i' the o((i!e s+e!i(ie& i' Se!tio' A-901 !o'ti'/es the e((e!ti)e'ess o( a (i'a'!i'- state#e't (ile& %e(ore this A!t" ta5es e((e!t i(0 (1) the (ili'- o( a' i'itial (i'a'!i'- state#e't i' that o((i!e 1o/l& %e e((e!ti)e to +er(e!t a se!/rit$ i'terest /'&er this A!t"4 (*) the +re-e((e!ti)e-&ate (i'a'!i'- state#e't 1as (ile& i' a' o((i!e i' a'other State or a'other o((i!e i' this State4 a'& (.) the i'itial (i'a'!i'- state#e't satis(ies s/%se!tio' (!). I0J # eriod of continued effecti&eness.' The (ili'- o( a' i'itial (i'a'!i'- state#e't /'&er s/%se!tio' (a) !o'ti'/es the e((e!ti)e'ess o( the +re-e((e!ti)e-&ate (i'a'!i'- state#e't0 (1) i( the i'itial (i'a'!i'- state#e't is (ile& %e(ore this A!t" ta5es e((e!t2 (or the +erio& +ro)i&e& i' (or#er Se!tio' A-80." 1ith res+e!t to a (i'a'!i'- state#e't4 a'& (*) i( the i'itial (i'a'!i'- state#e't is (ile& a(ter this A!t" ta5es e((e!t2 (or the +erio& +ro)i&e& i' Se!tio' A-919 1ith res+e!t to a' i'itial (i'a'!i'- state#e't. IcJ #%eBuirements for initial financin/ statement under su0section IaJ.' To %e e((e!ti)e (or +/r+oses o( s/%se!tio' (a)2 a' i'itial (i'a'!i'- state#e't #/st0 (1) satis($ the re7/ire#e'ts o( Part 9 (or a' i'itial (i'a'!i'- state#e't4 (*) i&e'ti($ the +re-e((e!ti)e-&ate (i'a'!i'- state#e't %$ i'&i!ati'- the o((i!e i' 1hi!h the (i'a'!i'- state#e't 1as (ile& a'& +ro)i&i'- the &ates o( (ili'- a'& (ile '/#%ers2 i( a'$2 o( the (i'a'!i'- state#e't a'& o( the #ost re!e't !o'ti'/atio' state#e't (ile& 1ith res+e!t to the (i'a'!i'- state#e't4 a'& (.) i'&i!ate that the +re-e((e!ti)e-&ate (i'a'!i'- state#e't re#ai's e((e!ti)e. 9-606. ).%(D.%(T !' ,"%-%''%CT#5%-D)T% '#()(C#(G ST)T%.%(T. IaJ #) re-effecti&e-date financin/ statement).' I' this se!tio'2 ?+re- e((e!ti)e-&ate (i'a'!i'- state#e't? #ea's a (i'a'!i'- state#e't (ile& %e(ore this A!t" ta5es e((e!t.

I0J #.pplica0le la<.' A(ter this A!t" ta5es e((e!t2 a +erso' #a$ a&& or &elete !ollateral !o)ere& %$2 !o'ti'/e or ter#i'ate the e((e!ti)e'ess o(2 or other1ise a#e'& the i'(or#atio' +ro)i&e& i'2 a +re-e((e!ti)e-&ate (i'a'!i'- state#e't o'l$ i' a!!or&a'!e 1ith the la1 o( the 6/ris&i!tio' -o)er'i'- +er(e!tio' as +ro)i&e& i' Part .. Do1e)er2 the e((e!ti)e'ess o( a +ree((e!ti)e-&ate (i'a'!i'- state#e't also #a$ %e ter#i'ate& i' a!!or&a'!e 1ith the la1 o( the 6/ris&i!tio' i' 1hi!h the (i'a'!i'- state#e't is (ile&. IcJ #=ethod of amendin/C /eneral rule.' E,!e+t as other1ise +ro)i&e& i' s/%se!tio' (&)2 i( the la1 o( this State -o)er's +er(e!tio' o( a se!/rit$ i'terest2 the i'(or#atio' i' a +re-e((e!ti)e-&ate (i'a'!i'state#e't #a$ %e a#e'&e& a(ter this A!t" ta5es e((e!t o'l$ i(0 (1) the +re-e((e!ti)e-&ate (i'a'!i'- state#e't a'& a' a#e'&#e't are (ile& i' the o((i!e s+e!i(ie& i' Se!tio' A-9014 (*) a' a#e'&#e't is (ile& i' the o((i!e s+e!i(ie& i' Se!tio' A-901 !o'!/rre'tl$ 1ith2 or a(ter the (ili'- i' that o((i!e o(2 a' i'itial (i'a'!i'- state#e't that satis(ies Se!tio' A;0:(!)4 or (.) a' i'itial (i'a'!i'- state#e't that +ro)i&es the i'(or#atio' as a#e'&e& a'& satis(ies Se!tio' A-;0:(!) is (ile& i' the o((i!e s+e!i(ie& i' Se!tio' A-901. IdJ #=ethod of amendin/C continuation.' I( the la1 o( this State -o)er's +er(e!tio' o( a se!/rit$ i'terest2 the e((e!ti)e'ess o( a +re-e((e!ti)e-&ate (i'a'!i'- state#e't #a$ %e !o'ti'/e& o'l$ /'&er Se!tio' A-;09(&) a'& (() or A-;0:. IeJ #=ethod of amendin/C additional termination rule.' Chether or 'ot the la1 o( this State -o)er's +er(e!tio' o( a se!/rit$ i'terest2 the e((e!ti)e'ess o( a +re-e((e!ti)e-&ate (i'a'!i'- state#e't (ile& i' this State #a$ %e ter#i'ate& a(ter this A!t" ta5es e((e!t %$ (ili'- a ter#i'atio' state#e't i' the o((i!e i' 1hi!h the +re-e((e!ti)e-&ate (i'a'!i'- state#e't is (ile&2 /'less a' i'itial (i'a'!i'state#e't that satis(ies Se!tio' A-;0:(!) has %ee' (ile& i' the o((i!e s+e!i(ie& %$ the la1 o( the 6/ris&i!tio' -o)er'i'- +er(e!tio' as +ro)i&e& i' Part . as the o((i!e i' 1hi!h to (ile a (i'a'!i'- state#e't. 9-607. ,%"S!(S %(T#T$%D T! '#$% #(#T#)$ '#()(C#(G ST)T%.%(T !" C!(T#(-)T#!( ST)T%.%(T. A +erso' #a$ (ile a' i'itial (i'a'!i'- state#e't or a !o'ti'/atio' state#e't /'&er this +art i(0 (1) the se!/re& +art$ o( re!or& a/thori3es the (ili'-4 a'& (*) the (ili'- is 'e!essar$ /'&er this +art0 (A) to !o'ti'/e the e((e!ti)e'ess o( a (i'a'!i'- state#e't (ile& %e(ore this A!t" ta5es e((e!t4 or (@) to +er(e!t or !o'ti'/e the +er(e!tio' o( a se!/rit$ i'terest. 9-609. ,"#!"#T/. IaJ #*a< /o&ernin/ priorit!.' This A!t" &eter#i'es the +riorit$ o( !o'(li!ti'- !lai#s to !ollateral. Do1e)er2 i( the relati)e +riorities o( the !lai#s 1ere esta%lishe& %e(ore this A!t" ta5es e((e!t2 (or#er Arti!le A" &eter#i'es +riorit$.

I0J # riorit! if securit! interest 0ecomes enforcea0le under -ection $-2:3.' >or +/r+oses o( Se!tio' A-.**(a)2 the +riorit$ o( a se!/rit$ i'terest that %e!o#es e'(or!ea%le /'&er Se!tio' A-*0. o( this A!t" &ates (ro# the ti#e this A!t" ta5es e((e!t i( the se!/rit$ i'terest is +er(e!te& /'&er this A!t" %$ the (ili'- o( a (i'a'!i'- state#e't %e(ore this A!t" ta5es e((e!t 1hi!h 1o/l& 'ot ha)e %ee' e((e!ti)e to +er(e!t the se!/rit$ i'terest /'&er (or#er Arti!le A". This s/%se!tio' &oes 'ot a++l$ to !o'(li!ti'- se!/rit$ i'terests ea!h o( 1hi!h is +er(e!te& %$ the (ili'- o( s/!h a (i'a'!i'- state#e't.