SB 64 — AN ACT relating to the Uniform Commercial Code.

Page 40 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA Section 35.

(i) "Person entitled under the document" means the holder, in the case of a negotiable document of title, or the person to which delivery of the goods is to be made by the terms of, or pursuant to instructions in a record under, a Page 41 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA nonnegotiable document of title;

(a) A single authoritative copy of the document exists which is unique, identifiable, and, except as otherwise provided in paragraphs (d), (e), and (f) Page 42 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA of this subsection, unalterable;

Page 43 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA 1.

(8) A person that has control under this section is not required to acknowledge that it Page 44 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA has control on behalf of another person.

Page 45 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (f) "Communicate" means to:

As context requires, the term means either the interest itself or the means by which a person's claim to it is evidenced, including a certificated or uncertificated security, a security certificate, or a security Page 46 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA entitlement;

Which is one of a class or series or by its terms is divisible into a class Page 47 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA or series of shares, participations, interests, or obligations;

(4) The characterization of a person, business, or transaction for purposes of this article Page 48 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA does not determine the characterization of the person, business, or transaction for purposes of any other law, regulation, or rule.

(5) An option or similar obligation issued by a clearing corporation to its participants is Page 49 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA not a security, but is a financial asset.

or (c) Another person, other than the transferor to the purchaser of an interest in Page 50 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA the security entitlement:

Page 51 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (9) If a person acknowledges that it has or will obtain control on behalf of a purchaser, unless the person otherwise agrees or law other than this article or Article 9 of this chapter otherwise provides, the person does not own any duty to the purchaser and is not required to confirm the acknowledgment to any other person.

(3) The local law of the jurisdiction in which a security certificate is located at the time of delivery governs whether an adverse claim can be asserted against a person to Page 52 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA whom the security certificate is delivered.

(a) If an agreement between the securities intermediary and its entitlement holder governing the securities account expressly provides that a particular jurisdiction is the securities intermediary's jurisdiction for purposes of this part of this article, this article, or Article 9 of this chapter, that jurisdiction is the securities intermediary's jurisdiction;[.] (b) If paragraph (a) of this subsection does not apply and an agreement between the securities intermediary and its entitlement holder governing the securities account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the securities intermediary's jurisdiction;[.] (c) If neither paragraph (a) nor paragraph (b) of this subsection applies and an agreement between the securities intermediary and its entitlement holder governing the securities account expressly provides that the securities account is maintained at an office in a particular jurisdiction, that jurisdiction is the securities intermediary's jurisdiction;[.] (d) If none of the preceding paragraphs of this subsection applies, the securities intermediary's jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the entitlement holder's account is Page 53 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA located;

"Account," except as used in "account for," "account statement," Page 54 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA "account to," "commodity account" in paragraph (p) of this subsection, "customer's account," "deposit account" in paragraph (ag) of this subsection, "on account of," and "statement of account," means a right to payment of a monetary obligation, whether or not earned by performance:

Page 55 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA e.

and Page 56 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA 3.

Page 57 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA 2.

or Page 58 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA 2.

b.[2.]Accounts, chattel paper, payment intangibles, and promissory Page 59 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA notes that have been sold;

In the ordinary course of its business provides clearance or settlement Page 60 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA services for a board of trade that has been designated as a contract market pursuant to federal commodities law;

(y)[(w)] "Consumer goods" means goods that are used or bought for use Page 61 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA primarily for personal, family, or household purposes;

(ae) "Controllable payment intangible" means a payment intangible evidenced by a controllable electronic record that provides that the account debtor Page 62 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA undertakes to pay the person that has control under Section 96 of this Act of the controllable electronic record;

and Page 63 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA ii.[b.]Aquatic goods produced in aquacultural operations;

(at)[(ao)] "Fixtures" means goods that have become so related to particular real Page 64 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA property that an interest in them arises under real property law;

(av)[(aq)] [(]Reserved[)];[(]Reserved[) ];

or Page 65 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA b.

By becoming the owner of the goods, a person acquires a right to Page 65 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 use the program in connection with the goods.

b.[2.]Letters of credit;[ or] c.[3.]Writings that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with Page 66 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA the card;

or Page 66 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 d.

"Manufactured home" means a structure, transportable in one (1) or more sections, which, in the traveling mode, is eight (8) body feet or morePage in67 widthof or166 fortySB006410.100 (40)- body236 feet- orXXXX more2/28/2023 in4:08 length,PM or,GA whenUNOFFICIAL erectedCOPY Page23 67RS ofSB 16664/GA BR023600.100more -in 236width -or XXXXforty 2/28/2023(40) 4:07body PMfeet Jacketedor UNOFFICIALmore COPYin 23length, RSor, BRwhen 236erected on site, is three hundred twenty (320) or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems contained therein.

Page 68 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA b.[2.]Money's worth in property, services, or new credit;

or Page 68 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 c.[3.]Release by a transferee of an interest in property previously transferred to the transferee.

Any other relative, by blood or marriage, of the individual or the Page 69 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA individual's spouse who shares the same home with the individual;

Page 69 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (bq)[(bk)] "Person related to," with respect to an organization, means:

(bs)[(bm)] "Promissory note" means an instrument that evidences a promise to pay a monetary obligation, does not evidence an order to pay, and does not Page 70 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA a monetary obligation, does not evidence an order to pay, and does not contain an acknowledgment by a bank that the bank has received for deposit a sum of money or funds;

A record consisting of legislation enacted by the legislature of a state or the Congress of the United States which forms or organizes an Page 71 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA the Congress of the United States which forms or organizes an organization, any record amending the legislation, and any record filed with or issued by the state or United States which amends or restates the name of the organization;

A person in whose favor a security interest is created or provided for under a security agreement, whether or not any obligation to be secured Page 72 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA under a security agreement, whether or not any obligation to be secured is outstanding;

(ce)[(by)] "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular Page 73 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA possession subject to the jurisdiction of the United States;

Page 73 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (cf)[(bz)] "Supporting obligation" means a letter-of-credit right or secondary obligation that supports the payment or performance of an account, chattel paper, a document, a general intangible, an instrument, or investment property;

Page 74 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA (c) "Broker." KRS 355.8-102;

Page 74 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (d) "Certificated security." KRS 355.8-102;

Page 75 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA (ac) "Protected purchaser." Section 41 of this Act;

Page 75 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (ad)[(ab)] "Prove." KRS 355.3-103;

(2)Page A76 securedof party166 thatSB006410.100 has- satisfied236 subsection- (1)XXXX of2/28/2023 this4:08 sectionPM hasGA control,UNOFFICIAL evenCOPY if23 PageRS 76SB of64/GA 166(2) BR023600.100A -secured 236party -that XXXXhas 2/28/2023satisfied 4:07subsection PM(1) Jacketedof UNOFFICIALthis COPYsection 23has RScontrol, BReven 236if the debtor retains the right to direct the disposition of funds from the deposit account.

(3) A system satisfies subsection (1) of this section, and a purchaser has control of an authoritative electronic copy of a record evidencing chattel paper, if the electronic copy, a record attached to or logically associated with the electronic copy, or a Page 77 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA system in which the electronic copy is recorded:

Page 77 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (a) Enables the purchaser to readily identify each electronic copy as either an authoritative copy or a nonauthoritative copy;

Page 78 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA (6) If a purchaser has the powers specified in subsection (3)(c)1.

of this Page 78 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 section, the powers are presumed to be exclusive.

(2) Subject to subsection (3) of this section, a power is exclusive under subsection Page 79 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (2) Subject to subsection (3) of this section, a power is exclusive under subsection (1)(a)2.a.

(2) A secured party has control of a controllable account or controllable payment intangible if the secured party has control of the controllable electronic record Page 80 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA intangible if the secured party has control of the controllable electronic record that evidences the controllable account or controllable payment intangible.

The collateral is not a certificated security and is in the possession of the secured party under KRS 355.9-313 pursuant to the debtor's security Page 81 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA agreement;

Page 81 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 3.

(5) If a new debtor becomes bound as debtor by a security agreement entered into by Page 82 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA another person:

Page 82 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (a) The agreement satisfies subsection (2)(c) of this section with respect to existing or after-acquired property of the new debtor to the extent the property is described in the agreement;

Page 83 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA 1.

To consumer goods as proceeds under KRS 355.9-315(1) or Page 83 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 commingled goods under KRS 355.9-336(3);

Page 84 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA 2.

or Page 84 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 3.

(2) Within ten (10) days after receiving a signed[an authenticated] demand by the Page 85 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA debtor:

Page 85 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (a) A secured party having control of a deposit account under KRS 355.9- 104(1)(b) shall send to the bank with which the deposit account is maintained a signed record[an authenticated statement] that releases the bank from any further obligation to comply with instructions originated by the secured party;

(d) A secured party having control of investment property under KRS 355.8- 106(4)(b) or 355.9-106(2) shall send to the securities intermediary or Page 86 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA 106(4)(b) or 355.9-106(2) shall send to the securities intermediary or commodity intermediary with which the security entitlement or commodity contract is maintained a signed[an authenticated] record that releases the securities intermediary or commodity intermediary from any further obligation to comply with entitlement orders or directions originated by the secured party;

Take appropriate action to enable the debtor or its designated custodian to make copies of or revisions to the authoritative copy which add or change an identified assignee of the authoritative copy without the consent of the secured party] (g) A secured party having control under Section 45 of this Act of electronic money shall transfer control of the electronic copy to the debtor or a person Page 87 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA money shall transfer control of the electronic copy to the debtor or a person designated by the debtor;

(b) "Request for an accounting" means a record signed[authenticated] by a debtor requesting that the recipient provide an accounting of the unpaid obligations secured by collateral and reasonably identifying the transaction or relationship Page 88 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA secured by collateral and reasonably identifying the transaction or relationship that is the subject of the request.

(4) A person that receives a request regarding a list of collateral, claims no interest in the collateral when it receives the request, and claimed an interest in the collateral at an earlier time shall comply with the request within fourteen (14) days after Page 89 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA receipt by sending to the debtor a signed[an authenticated] record:

Page 89 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (a) Disclaiming any interest in the collateral;

(1) Except as otherwise provided in this section, while a debtor is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral;[.] (2) While collateral is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a possessory security interest in that collateral;[.] (3) Except as otherwise provided in subsection (4) of this section, while negotiable tangible[ negotiable] documents, goods, instruments, or tangible money[, or Page 90 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA tangible[ negotiable] documents, goods, instruments, or tangible money[, or tangible chattel paper] is located in a jurisdiction, the local law of that jurisdiction governs:

(a) If an agreement between the bank and its customer governing the deposit account expressly provides that a particular jurisdiction is the bank's jurisdiction for purposes of this part of this article, this article, or this chapter, that jurisdiction is the bank's jurisdiction;[.] (b) If paragraph (a) of this subsection does not apply and an agreement between the bank and its customer governing the deposit account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the bank's jurisdiction;[.] (c) If neither paragraph (a) nor (b) of this subsection applies and an agreement between the bank and its customer governing the deposit account expressly provides that the deposit account is maintained at an office in a particular Page 91 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA provides that the deposit account is maintained at an office in a particular jurisdiction, that jurisdiction is the bank's jurisdiction;[.] (d) If none of the preceding paragraphs applies, the bank's jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the customer's account is located;

(2) The following rules determine a commodity intermediary's jurisdiction for purposes Page 92 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA of this part of this article:

Page 92 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (a) If an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that a particular jurisdiction is the commodity intermediary's jurisdiction for purposes of this part of this article, this article, or this chapter, that jurisdiction is the commodity intermediary's jurisdiction;[.] (b) If paragraph (a) of this subsection does not apply and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction;[.] (c) If neither paragraph (a) nor paragraph (b) of this subsection applies and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the commodity account is maintained at an office in a particular jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction;[.] (d) If none of the preceding paragraphs applies, the commodity intermediary's jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the commodity customer's account is located;

and (c) Automatic perfection of a security interest in a commodity contract or Page 93 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (c) Automatic perfection of a security interest in a commodity contract or commodity account created by a commodity intermediary.

(d) If paragraphs (a), (b), and (c) of this subsection do not apply and the rules of the system in which the authoritative electronic copy is recorded are Page 94 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA of the system in which the authoritative electronic copy is recorded are readily available for review and expressly provide that the chattel paper or the system is governed by the law of a particular jurisdiction, that jurisdiction is the chattel paper's jurisdiction;

and (b) Automatic perfection of a security interest in a controllable payment Page 95 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (b) Automatic perfection of a security interest in a controllable payment intangible created by a sale of the controllable payment intangible.

(3) If a secured party assigns a perfected security interest or agricultural lien, a filing under this article is not required to continue the perfected status of the security Page 96 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA under this article is not required to continue the perfected status of the security interest against creditors of and transferees from the original debtor.

or Page 97 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA (c) Filing as to the goods.

Page 97 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (5) A security interest in certificated securities, negotiable documents, or instruments is perfected without filing or the taking of possession or control for a period of twenty (20) days from the time it attaches to the extent that it arises for new value given under a signed[an authenticated] security agreement.

(2) With respect to goods covered by a certificate of title issued by this Page 98 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (2) With respect to goods covered by a certificate of title issued by this Commonwealth, a secured party may perfect a security interest in the goods by taking possession of the goods only in the circumstances described in KRS 355.9- 316(4).

and (b) Unless the person otherwise agrees or law other than this article otherwise provides, the person does not owe any duty to the secured party and is not Page 99 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA required to confirm the acknowledgment to another person.

Page 99 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (8) A secured party having possession of collateral does not relinquish possession by delivering the collateral to a person other than the debtor or a lessee of the collateral from the debtor in the ordinary course of the debtor's business if the person was instructed before the delivery or is instructed contemporaneously with the delivery:

(3) A security interest in investment property is perfected by control under KRS 355.9- Page 100 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (3) A security interest in investment property is perfected by control under KRS 355.9- 106 not earlier than[from] the time the secured party obtains control and remains perfected by control until:

Page 101 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA (a) The time perfection would have ceased under the law of that jurisdiction;

Page 101 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (b) The expiration of four (4) months after a change of the debtor's location to another jurisdiction;

(5) A security interest described in subsection (4) of this section becomes unperfected as against a purchaser of the goods for value and is deemed never to have been perfected as against a purchaser of the goods for value if the applicable Page 102 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA perfected as against a purchaser of the goods for value if the applicable requirements for perfection under KRS 355.9-311(2) or 355.9-313 are not satisfied before the earlier of:

(a) A financing statement filed before the change pursuant to the law of the jurisdiction designated in KRS 355.9-301(1) or 355.9-305(3) is effective to Page 103 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA jurisdiction designated in KRS 355.9-301(1) or 355.9-305(3) is effective to perfect a security interest in the collateral if the financing statement would have been effective to perfect a security interest in the collateral if the debtor had not changed its location;

A security interest that is perfected by the financing statement but which does not become perfected under the law of the other jurisdiction before the earlier Page 104 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA become perfected under the law of the other jurisdiction before the earlier time or event becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.

(5) Except as otherwise provided in KRS 355.9-320 and 355.9-321, if a person files a financing statement with respect to a purchase-money security interest before or Page 105 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA financing statement with respect to a purchase-money security interest before or within twenty (20) days after the debtor receives delivery of the collateral, the security interest takes priority over the rights of a buyer, lessee, or lien creditor which arise between the time the security interest attaches and the time of filing.

(1) Except as otherwise provided in subsection (3) of this section, for purposes of determining the priority of a perfected security interest under KRS 355.9-322(1)(a), perfectionPage 106 of the166 securitySB006410.100 interest- dates236 from- theXXXX time2/28/2023 an4:08 advancePM isGA madeUNOFFICIAL toCOPY the23 PageRS 106SB of64/GA 166perfection BR023600.100of -the 236security -interest XXXXdates 2/28/2023from 4:07the PMtime Jacketedan UNOFFICIALadvance COPYis 23made RSto BRthe 236 extent that the security interest secures an advance that:

(6) Except as otherwise provided in subsection (7) of this section, a lessee of goods[, other than a lessee in ordinary course of business,] takes the leasehold interest free Page 107 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA of a security interest to the extent that it secures advances made after the earlier of:

Page 107 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (a) The time the secured party acquires knowledge of the lease;

(c) The holder of the conflicting security interest receives the notification within Page 108 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA five (5) years before the debtor receives possession of the inventory;

and Page 108 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (d) The notification states that the person sending the notification has or expects to acquire a purchase-money security interest in inventory of the debtor and describes the inventory.

(5)Page Subsection109 (4)(b)of to166 (d)SB006410.100 of- this236 section- applyXXXX only2/28/2023 if4:08 thePM holderGA ofUNOFFICIAL theCOPY conflicting23 PageRS 109SB of64/GA 166(5) BR023600.100Subsection -(4)(b) 236to -(d) XXXXof 2/28/2023this 4:07section PMapply Jacketedonly UNOFFICIALif COPYthe 23holder RSof BRthe 236conflicting security interest had filed a financing statement covering the same types of livestock:

A security interest in a controllable account, controllable electronic record, or controllable payment intangible held by a secured party having control of the account, electronic record, or payment intangible has priority over a conflicting security interest Page 110 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA electronic record, or payment intangible has priority over a conflicting security interest held by a secured party that does not have control.

or (b) The proceeds consist of the specific goods covered by the chattel paper or cash proceeds of the specific goods, even if the purchaser's security interest in Page 111 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA the proceeds is unperfected.

Page 111 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (4) Except as otherwise provided in KRS 355.9-331(1), a purchaser of an instrument has priority over a security interest in the instrument perfected by a method other than possession if the purchaser gives value and takes possession of the instrument in good faith and without knowledge that the purchase violates the rights of the secured party.

(3) Filing under this article does not constitute notice of a claim or defense to the holders, or purchasers, or persons described in subsections (1) and (2) of this Page 112 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA section.

Page 112 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 Section 71.

(b) The interest of the encumbrancer or owner arises before the goods become Page 113 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (b) The interest of the encumbrancer or owner arises before the goods become fixtures;

(a) The encumbrancer or owner has, in a signed[an authenticated] record, Page 114 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (a) The encumbrancer or owner has, in a signed[an authenticated] record, consented to the security interest or disclaimed an interest in the goods as fixtures;

or Page 115 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA (3) The bank's receipt of instructions from the secured party.

Page 115 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 Section 74.

(1)Page Subject116 toof subsections166 (2)SB006410.100 to- (9)236 and- (12)XXXX of2/28/2023 this4:08 section,PM anGA accountUNOFFICIAL debtorCOPY on23 anRS PageSB 11664/GA of(1) 166Subject BR023600.100to -subsections 236(2) -to XXXX(9) 2/28/2023and 4:07(12) PMof Jacketedthis UNOFFICIALsection, COPYan 23account RSdebtor BRon 236an account, chattel paper, or a payment intangible may discharge its obligation by paying the assignor until, but not after, the account debtor receives a notification, signed[authenticated] by the assignor or the assignee, that the amount due or to become due has been assigned and that payment is to be made to the assignee.

(4) (a) In this subsection, "promissory note" includes a negotiable instrument that Page 117 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA evidences chattel paper.

Page 117 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (b) Except as otherwise provided in subsection (5) and (11) of this section and KRS 355.2A-303 and 355.9-407, and subject to subsection (8) of this section, a term in an agreement between an account debtor and an assignor or in a promissory note is ineffective to the extent that it:

(a) Prohibits, restricts, or requires the consent of the government, governmental body or official, or account debtor to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in the Page 118 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA account or chattel paper;

or Page 118 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (b) Provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account or chattel paper.

or (b) Provides that the assignment or transfer or the creation, attachment, or Page 119 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (b) Provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the promissory note, health-care-insurance receivable, or general intangible.

KRS 304.2-260, KRS 304.24-420, Subtitle 33 of KRS Chapter Page 120 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA 304, and Subtitle 37 of KRS Chapter 304.

Page 120 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (4) To the extent that a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health-care-insurance receivable or general intangible or a rule of law, statute, or regulation described in subsection (3) of this section would be effective under law other than this article but is ineffective under subsection (1) or (3) of this section, the creation, attachment, or perfection of a security interest in the promissory note, health-care-insurance receivable, or general intangible:

KRS 56.230(3)[(2)], 138.320(5)[(3)], 138.665(5)[(4)], 138.720(5), 139.250, 154A.400(3), 190.047(1), Page 121 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA 138.320(5)[(3)], 138.665(5)[(4)], 138.720(5), 139.250, 154A.400(3), 190.047(1), 190.070(2)(c), 217B.535(2),[ 228.070(2),] 230.300(11), 234.330(6)[(10)], 243.630(2), 260.815, 286.4-460(2), 292.320(3)[(2)](b), 286.8-036(3), 304.3- 410(2)(f), 304.3-520(5), 333.080, 350.135(1), 365.430(1)[(27)], and 286.9- 070(6)[(2)].

(3) By acquiring collateral in which a security interest or agricultural lien continues Page 122 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (3) By acquiring collateral in which a security interest or agricultural lien continues under KRS 355.9-315(1)(a), a debtor authorizes the filing of an initial financing statement, and an amendment, covering the collateral and property that becomes collateral under KRS 355.9-315(1)(b).

(a) Within one (1) month after there is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, Page 123 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value;

Page 124 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA Section 79.

Page 124 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (1) After default, a secured party has the rights provided in this part of this article and, except as otherwise provided in KRS 355.9-602, those provided by agreement of the parties.

(7) Except as otherwise provided in KRS 355.9-607(3), this part of this article imposes Page 125 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (7) Except as otherwise provided in KRS 355.9-607(3), this part of this article imposes no duties upon a secured party that is a consignor or is a buyer of accounts, chattel paper, payment intangibles, or promissory notes.

(a) A secured party shall apply or pay over for application the cash proceeds of Page 126 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA collection or enforcement under KRS 355.9-607 in the following order to:

Page 126 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 1.

(a) A secured party sends to the debtor and any secondary obligor a signed[an Page 127 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (a) A secured party sends to the debtor and any secondary obligor a signed[an authenticated] notification of disposition;

(4) Subsection (2) of this section does not apply if the collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a Page 128 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA recognized market.

Page 128 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (5) A secured party complies with the requirement for notification prescribed by subsection (3)(c)2.

and 5.[(e)] States the time and place of a public disposition or the time after which any other disposition is to be made;[.] (b)[(2)] Whether the contents of a notification that lacks any of the information specified in paragraph (a)[subsection (1)] of this subsection[section] are nevertheless sufficient is a question of fact;[.] Page 129 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA nevertheless sufficient is a question of fact;[.] (c)[(3)] The contents of a notification providing substantially the information specified in paragraph (a)[subsection (1)] of this subsection[section] are sufficient, even if the notification includes:

[End of Form]" ["NOTIFICATION OF DISPOSITION OF COLLATERAL Page 130 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA ["NOTIFICATION OF DISPOSITION OF COLLATERAL To:

If item {2} is included, include the Page 131 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA words "to the highest qualified bidder" only if applicable;

Page 131 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (d) Include and complete items {4} and {6};

Page 132 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA {1} We will sell (describe collateral) at public sale.

A sale could include a Page 132 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 lease or license.

{10} We are sending this notice to the following other people who have an Page 133 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA interest in (describe collateral) or who owe money under your agreement:

Page 133 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (Names of all other debtors and obligors, if any) [End of Form]" ["<Name and address of secured party> <Date> NOTICE OF OUR PLAN TO SELL PROPERTY <Name and address of any obligor who is also a debtor> Subject:

IfPage you134 wantof us166 toSB006410.100 explain- to236 you- inXXXX writing2/28/2023 how4:08 wePM haveGA figuredUNOFFICIAL theCOPY amount23 thatRS PageSB 13464/GA ofIf 166you BR023600.100want -us 236to -explain XXXXto 2/28/2023you 4:07in PMwriting Jacketedhow UNOFFICIALwe COPYhave 23figured RSthe BRamount 236that you owe us, you may call us at .....<telephone number> <or write us at .....<secured party's address>> and request a written explanation.

(b) Include and complete either item {1}, if the notification relates to a public Page 135 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (b) Include and complete either item {1}, if the notification relates to a public disposition of the collateral, or item {2}, if the notification relates to a private disposition of the collateral;

(1) A secured party shall apply or pay over for application the cash proceeds of Page 136 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA disposition under KRS 355.9-610 in the following order to:

Page 136 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (a) The reasonable expenses of retaking, holding, preparing for disposition, processing, and disposing, and, to the extent provided for by agreement and not prohibited by law, reasonable attorney's fees and legal expenses incurred by the secured party;

(4) If the security interest under which a disposition is made secures payment or Page 137 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (4) If the security interest under which a disposition is made secures payment or performance of an obligation, after making the payments and applications required by subsection (1) of this section and permitted by subsection (3) of this section:

(b) Is not obligated to apply the proceeds of the disposition to the satisfaction of Page 138 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA obligations secured by the security interest or other lien;

and Page 138 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (c) Is not obligated to account to or pay the holder of the security interest or other lien for any surplus.

or (b)Page In139 theof case166 ofSB006410.100 a- consumer236 obligor- whoXXXX is2/28/2023 liable4:08 forPM aGA deficiency,UNOFFICIAL withinCOPY Page23 139RS ofSB 16664/GA BR023600.100(b) -In 236the -case XXXXof 2/28/2023a 4:07consumer PMobligor Jacketedwho UNOFFICIALis COPYliable 23for RSa BRdeficiency, 236within fourteen (14) days after receipt of a request, send to the consumer obligor a record waiving the secured party's right to a deficiency.

Page 140 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA (4) (a) A particular phrasing of the explanation is not required.

Page 140 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (b) An explanation complying substantially with the requirements of subsection (1) of this section is sufficient, even if it includes minor errors that are not seriously misleading.

Page 141 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA 2.[(b)] Promptly amend its records to reflect the transfer;

and Page 141 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 3.[(c)] If applicable, issue a new appropriate certificate of title in the name of the transferee.

(2) A purported or apparent acceptance of collateral under this section is ineffective Page 142 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA unless:

Page 142 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (a) The secured party consents to the acceptance in a signed[an authenticated] record or sends a proposal to the debtor;

(5)Page A143 securedof party166 thatSB006410.100 has- taken236 possession- ofXXXX collateral2/28/2023 shall4:08 disposePM ofGA theUNOFFICIAL collateralCOPY Page23 143RS ofSB 16664/GA BR023600.100(5) -A 236secured -party XXXXthat 2/28/2023has 4:07taken PMpossession Jacketedof UNOFFICIALcollateral COPYshall 23dispose RSof BRthe 236collateral pursuant to KRS 355.9-610 within the time specified in subsection (6) of this section if:

and Page 144 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA 3.

Was filed in the office or offices in which to file a financing statement Page 144 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 against the debtor covering the collateral as of that date;

(2)Page Subject145 toof subsection166 (6)SB006410.100 of- this236 section,- aXXXX secured2/28/2023 party4:08 isPM notGA liableUNOFFICIAL becauseCOPY of23 itsRS PageSB 14564/GA of(2) 166Subject BR023600.100to -subsection 236(6) -of XXXXthis 2/28/2023section, 4:07a PMsecured Jacketedparty UNOFFICIALis COPYnot 23liable RSbecause BRof 236its status as secured party:

(6) Subsections (1) and (2) of this section do not apply to limit the liability of a secured party to a person if, at the time the secured party obtains control of collateral that is a controllable account, controllable electronic record, or controllable payment intangible or at the time the security interest attaches to the Page 146 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA collateral, whichever is later:

Page 146 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (a) The person is a debtor or obligor;

(b) "Qualifying purchaser" means a purchaser of a controllable electronic record or an interest in a controllable electronic record that obtains control of the controllable electronic record for value, in good faith, and without Page 147 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA of the controllable electronic record for value, in good faith, and without notice of a claim of a property right in the controllable electronic record;

(1) This section applies to the acquisition and purchase of rights in a controllable Page 148 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (1) This section applies to the acquisition and purchase of rights in a controllable account or controllable payment intangible, including the rights and benefits under subsections (3), (4), (5), (7), and (8) of this section of a purchaser and qualifying purchaser, in the same manner this section applies to a controllable electronic record.

(7) An action may not be asserted against a qualifying purchaser based on both a purchase by the qualifying purchaser of a controllable electronic record and a claim of a property right in another controllable electronic record, whether the action is framed in conversion, replevin, constructive trust, equitable lien, or Page 149 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA action is framed in conversion, replevin, constructive trust, equitable lien, or other theory.

(a) The controllable electronic record, a record attached to or logically associated with the electronic record, or a system in which the electronic record is recorded limits the use of the electronic record or has a protocol programmed to cause a change, including a transfer or loss of control or a Page 150 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA programmed to cause a change, including a transfer or loss of control or a modification of benefits afforded by the electronic record;

(7) If a person acknowledges that it has or will obtain control on behalf of another person, unless the person otherwise agrees or law other than this article or Article 9 of this chapter otherwise provides, the person does not owe any duty to the other person and is not required to confirm acknowledgment to any other Page 151 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA the other person and is not required to confirm acknowledgment to any other person.

(3) After receipt of a notification that complies with subsection (2) of this section, the account debtor may discharge its obligation by paying in accordance with the notification and may not discharge the obligation by paying a person that Page 152 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA formerly had control.

Page 152 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (4) Subject to subsection (8) of this section, notification is ineffective under subsection (2) of this section:

(6) A person furnishes reasonable proof under subsection (5) of this section that Page 153 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (6) A person furnishes reasonable proof under subsection (5) of this section that control has been transferred if the person demonstrates, using the method in the agreement referred to in subsection (4)(a) of this section, that the transferee has the power to:

(a) If the controllable electronic record, or a record attached to or logically associated with the controllable electronic record and readily available for Page 154 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA associated with the controllable electronic record and readily available for review, expressly provides that a particular jurisdiction is the controllable electronic record's jurisdiction for purposes of this article or chapter, that jurisdiction is the controllable electronic record's jurisdiction;

(4) (a) If subsection (3)(e) of this section applies and Article 12 is not in effect in the District of Columbia without material modification, the governing law for a matter covered by this article is the law of the District of Columbia as though Article 12 were in effect in the District of Columbia without material Page 155 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA though Article 12 were in effect in the District of Columbia without material modification.

and Page 156 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA (e) "Financing statement." Section 42 of this Act.

Page 156 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (3) Article 1 of this chapter contains general definitions and principles of construction and interpretation applicable throughout this article.

and (b) The transaction, lien, or interest may be terminated, completed, consummated, and enforced as required or permitted by this Act or by the Page 157 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA law that would apply if this Act had not taken effect.

Page 157 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (3) This Act does not affect an action, case, or proceeding commenced before the effective date of this Act.

(2) Remains enforceable thereafter if the security interest becomes enforceable under SectionPage 48158 of this166 Act,SB006410.100 as- amended236 by- thisXXXX Act,2/28/2023 on4:08 thePM effectiveGA dateUNOFFICIAL ofCOPY this23 ActRS orSB Page64/GA 158Section 48 of 166this BR023600.100Act, -as 236amended -by XXXXthis 2/28/2023Act, 4:07on PMthe Jacketedeffective UNOFFICIALdate COPYof 23this RSAct BRor 236 before the adjustment date;

(2)Page Subject159 toof subsection166 (3)SB006410.100 of- this236 section,- ifXXXX the2/28/2023 priority4:08 ofPM claimsGA toUNOFFICIAL collateralCOPY were23 PageRS 159SB of64/GA 166(2) BR023600.100Subject -to 236subsection -(3) XXXXof 2/28/2023this 4:07section, PMif Jacketedthe UNOFFICIALpriority COPYof 23claims RSto BRcollateral 236were established before the effective date of this Act, Article 9 of this chapter, as in effect before the effective date of this Act, determines priority.

(a) "Clearing corporation" shall be defined as provided in KRS 355.8-102[(3)] except that, with respect to securities issued by institutions organized or existing under the laws of any foreign country or securities used to meet the deposit requirements pursuant to the laws of a foreign country as a condition of doing business therein, "clearing corporation" may include a corporation Page 160 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA of doing business therein, "clearing corporation" may include a corporation organized or existing under the laws of any foreign country which is legally qualified under such laws to effect transactions in securities by computerized book entry;

(g) "Certificated security" means a share, participation, or other interest in property or an enterprise of the issuer or an obligation of the issuer which is represented by an instrument issued in bearer or registered form, of a type commonly dealt in on securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment, and either one (1) of a class or series or by its terms divisible into Page 161 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA a class or series of shares, participations, interests, or obligations;

and Page 161 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (h) "Uncertificated security" means a share, participation, or other interest in property or an enterprise of the issuer or an obligation of the issuer which is not represented by an instrument and the transfer of which is registered upon books maintained for that purpose by or on behalf of the issuer, of a type commonly dealt in on securities exchanges or markets;

(3) Notwithstanding any other provision of law, an insurance company may deposit securitiesPage held162 inof or166 purchasedSB006410.100 for- its236 general- accountXXXX and2/28/2023 its4:08 separatePM accountsGA inUNOFFICIAL aCOPY Page23 162RS ofSB 16664/GA BR023600.100securities -held 236in -or XXXXpurchased 2/28/2023for 4:07its PMgeneral Jacketedaccount UNOFFICIALand COPYits 23separate RSaccounts BRin 236a custodial account with a custodian bank approved by, and under a custodial agreement approved by, the commissioner.

(1) "Advertisement" means a commercial message in any medium that aids, promotes, or assists directly or indirectly a rental-purchase agreement, excluding in-store merchandising aids;[.] (2) "Cash price" means the price at which the lessor would have sold the property to the consumer for cash on the date of the rental-purchase agreement;[.] (3) "Consumer" means a natural person who rents personal property under a rental- Page 163 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA UNOFFICIAL COPY 23 RS BRSB 23664/GA (3) "Consumer" means a natural person who rents personal property under a rental- purchase agreement;[.] (4) "Consummation" means the time a consumer becomes contractually obligated on a rental-purchase agreement;[.] (5) "Division" means the Division of Consumer Protection in the Office of the Attorney General;[.] (6) "Lessor" means a person who, in the ordinary course of business, regularly leases, offers to lease, or arranges for the leasing of property under a rental-purchase agreement;[.] (7) (a) "Rental-purchase agreement" means an agreement for the use of personal property by a natural person primarily for personal, family, or household purposes, for an initial period of four (4) months or less, whether or not there is any obligation beyond the initial period, that is automatically renewable with each payment and that permits the consumer to become the owner of the property.

or Page 164 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA 7.[(g)] A home solicitation sale as that term is defined in KRS 367.410.

Page 164 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 Section 110.

(e) Each copy of the authoritative copy and any copy of a copy is readily Page 165 of 166 SB006410.100 - 236 - XXXX 2/28/2023 4:08 PM GA UNOFFICIAL COPY 23 RS SB 64/GA identifiable as a copy that is not the authoritative copy;

and Page 165 of 166 BR023600.100 - 236 - XXXX 2/28/2023 4:07 PM Jacketed UNOFFICIAL COPY 23 RS BR 236 (f) Any revision of the authoritative copy is readily identifiable as authorized or unauthorized.

Page 166 of 166 BR023600.100SB006410.100 - 236 - XXXX 2/28/2023 4:074:08 PM JacketedGA