HOUSE BILL No. 5083

October 18, 2011, Introduced by Reps. Lipton, Huuki and Cotter and referred to the Committee on Banking and Financial Services.

      A bill to amend 1962 PA 174, entitled

"Uniform commercial code,"

by amending sections 2A103, 9102, 9105, 9307, 9311, 9316, 9317,

9326, 9406, 9408, 9502, 9503, 9507, 9515, 9516, 9518, 9521, and

9607 (MCL 440.2803, 440.9102, 440.9105, 440.9307, 440.9311,

440.9316, 440.9317, 440.9326, 440.9406, 440.9408, 440.9502,

440.9503, 440.9507, 440.9515, 440.9516, 440.9518, 440.9521, and

440.9607), sections 2A103, 9102, 9105, 9307, 9316, 9317, 9406,

9408, 9502, 9503, and 9507 as amended and sections 9326, 9518,

and 9607 as added by 2000 PA 348, section 9311 as amended by 2005

PA 25, and sections 9515, 9516, and 9521 as amended by 2008 PA

383, and by adding part 8 to article 9; and to repeal acts and

parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1        Sec. 2A103. (1) In this article unless the context otherwise

 2  requires:

 3        (a) "Buyer in ordinary course of business" means a person

 4  who in good faith and without knowledge that the sale to him or

 5  her is in violation of the ownership rights or security interest

 6  or leasehold interest of a third party in the goods buys in

 7  ordinary course from a person in the business of selling goods of

 8  that kind but does not include a pawnbroker. "Buying" may be for

 9  cash or by exchange of other property or on secured or unsecured

10  credit and includes receiving goods or documents of title under a

11  pre-existing contract for sale but does not include a transfer in

12  bulk or as security for or in total or partial satisfaction of a

13  money debt.

14        (b) "Cancellation" occurs when either party puts an end to

15  the lease contract for default by the other party.

16        (c) "Commercial unit" means such a unit of goods as by

17  commercial usage is a single whole for purposes of lease and

18  division of which materially impairs its character or value on

19  the market or in use. A commercial unit may be a single article,

20  as a machine, or a set of articles, as a suite of furniture or a

21  line of machinery, or a quantity, as a gross or carload, or any

22  other unit treated in use or in the relevant market as a single

23  whole.

24        (d) "Conforming" means goods or performance under a lease

25  contract that are in accordance with the obligations under the

26  lease contract.

 1        (e) "Consumer lease" means a lease that a lessor regularly

 2  engaged in the business of leasing or selling makes to a lessee

 3  who is an individual and who takes under the lease primarily for

 4  a personal, family, or household purpose, if the total payments

 5  to be made under the lease contract, excluding payments for

 6  options to renew or buy, do not exceed $25,000.00.

 7        (f) "Fault" means wrongful act, omission, breach, or

 8  default.

 9        (g) "Finance lease" means a lease with respect to which all

10  of the following apply:

11        (i) The lessor does not select, manufacture, or supply the

12  goods.

13        (ii) The lessor acquires the goods or the right to possession

14  and use of the goods in connection with the lease.

15        (iii) One of the following occurs:

16        (A) The lessee receives a copy of the contract by which the

17  lessor acquired the goods or the right to possession and use of

18  the goods before signing the lease contract.

19        (B) The lessee's approval of the contract by which the

20  lessor acquired the goods or the right to possession and use of

21  the goods is a condition to effectiveness of the lease contract.

22        (C) The lessee, before signing the lease contract, receives

23  an accurate and complete statement designating the promises and

24  warranties, and any disclaimers of warranties, limitations or

25  modifications of remedies, or liquidated damages, including those

26  of a third party, such as the manufacturer of the goods, provided

27  to the lessor by the person supplying the goods in connection

 1  with or as part of the contract by which the lessor acquired the

 2  goods or the right to possession and use of the goods.

 3        (D) If the lease is not a consumer lease, the lessor, before

 4  the lessee signs the lease contract, informs the lessee in

 5  writing of the following:

 6        (I) The identity of the person supplying the goods to the

 7  lessor, unless the lessee has selected that person and directed

 8  the lessor to acquire the goods or the right to possession and

 9  use of the goods from that person.

10        (II) The lessee is entitled under this article to the

11  promises and warranties, including those of any third party,

12  provided to the lessor by the person supplying the goods in

13  connection with or as part of the contract by which the lessor

14  acquired the goods or the right to possession and use of the

15  goods.

16        (III) The lessee may communicate with the person supplying

17  the goods to the lessor and receive an accurate and complete

18  statement of those promises and warranties, including any

19  disclaimers and limitations of them or of remedies.

20        (h) "Goods" means all things that are movable at the time of

21  identification to the lease contract, or are fixtures (section

22  2A309), but the term does not include money, documents,

23  instruments, accounts, chattel paper, general intangibles, or

24  minerals or the like, including oil and gas, before extraction.

25  The term also includes the unborn young of animals.

26        (i) "Installment lease contract" means a lease contract that

27  authorizes or requires the delivery of goods in separate lots to

 1  be separately accepted, even though the lease contract contains a

 2  clause "each delivery is a separate lease" or its equivalent.

 3        (j) "Lease" means a transfer of the right to possession and

 4  use of goods for a term in return for consideration, but a sale,

 5  including a sale on approval or a sale or return, or retention or

 6  creation of a security interest is not a lease. Unless the

 7  context clearly indicates otherwise, the term includes a

 8  sublease.

 9        (k) "Lease agreement" means the bargain, with respect to the

10  lease, of the lessor and the lessee in fact as found in their

11  language or by implication from other circumstances including

12  course of dealing or usage of trade or course of performance as

13  provided in this article. Unless the context clearly indicates

14  otherwise, the term includes a sublease agreement.

15        (l) "Lease contract" means the total legal obligation that

16  results from the lease agreement as affected by this article and

17  any other applicable rules of law. Unless the context clearly

18  indicates otherwise, the term includes a sublease contract.

19        (m) "Leasehold interest" means the interest of the lessor or

20  the lessee under a lease contract.

21        (n) "Lessee" means a person who acquires the right to

22  possession and use of goods under a lease. Unless the context

23  clearly indicates otherwise, the term includes a sublessee.

24        (o) "Lessee in ordinary course of business" means a person

25  who in good faith and without knowledge that the lease to him or

26  her is in violation of the ownership rights or security interest

27  or leasehold interest of a third party in the goods leases in

 1  ordinary course from a person in the business of selling or

 2  leasing goods of that kind but does not include a pawnbroker.

 3  "Leasing" may be for cash or by exchange of other property or on

 4  secured or unsecured credit and includes receiving goods or

 5  documents of title under a pre-existing lease contract but does

 6  not include a transfer in bulk or as security for or in total or

 7  partial satisfaction of a money debt.

 8        (p) "Lessor" means a person who transfers the right to

 9  possession and use of goods under a lease. Unless the context

10  clearly indicates otherwise, the term includes a sublessor.

11        (q) "Lessor's residual interest" means the lessor's interest

12  in the goods after expiration, termination, or cancellation of

13  the lease contract.

14        (r) "Lien" means a charge against or interest in goods to

15  secure payment of a debt or performance of an obligation, but the

16  term does not include a security interest.

17        (s) "Lot" means a parcel or a single article that is the

18  subject matter of a separate lease or delivery, whether or not it

19  is sufficient to perform the lease contract.

20        (t) "Merchant lessee" means a lessee that is a merchant with

21  respect to goods of the kind subject to the lease.

22        (u) "Present value" means the amount as of a date certain of

23  1 or more sums payable in the future, discounted to the date

24  certain. The discount is determined by the interest rate

25  specified by the parties if the rate was not manifestly

26  unreasonable at the time the transaction was entered into;

27  otherwise, the discount is determined by a commercially

 1  reasonable rate that takes into account the facts and

 2  circumstances of each case at the time the transaction was

 3  entered into.

 4        (v) "Purchase" includes taking by sale, lease, mortgage,

 5  security interest, pledge, gift, or any other voluntary

 6  transaction creating an interest in goods.

 7        (w) "Sublease" means a lease of goods the right to

 8  possession and use of which was acquired by the lessor as a

 9  lessee under an existing lease.

10        (x) "Supplier" means a person from whom a lessor buys or

11  leases goods to be leased under a finance lease.

12        (y) "Supply contract" means a contract under which a lessor

13  buys or leases goods to be leased.

14        (z) "Termination" occurs when either party pursuant to a

15  power created by agreement or law puts an end to the lease

16  contract otherwise than for default.

17        (2) Other definitions applying to this article and the

18  sections in which they appear are:

19      "Accessions".                     Section 2A310(1).

20      "Construction mortgage".          Section 2A309(1)(d).

21      "Encumbrance".                    Section 2A309(1)(e).

22      "Fixtures".                       Section 2A309(1)(a).

23      "Fixture filing".                 Section 2A309(1)(b).

24      "Purchase money lease".           Section 2A309(1)(c).

25        (3) The following definitions in other articles apply to

26  this article:

1       "Account".                        Section 9102(1)(b).

2       "Between merchants".              Section 2104(3).

3       "Buyer".                          Section 2103(1)(a).

4       "Chattel paper".                  Section 9102(1)(k).

5       "Consumer goods".                 Section 9102(1)(w).

6       "Document".                       Section 9102(1)(dd).

7       "Entrusting".                     Section 2403(3).

8       "General intangible".             Section 9102(1)(pp).

9       "Good faith".                     Section 2103(1)(b).

10      "Instrument".                     Section 9102(1)(uu).

11      "Merchant".                       Section 2104(1).

12      "Mortgage".                       Section 9102(1)(ccc).

13      "Pursuant to commitment".         Section 9102(1)(sss)9102(1)(ppp).

14      "Receipt".                        Section 2103(1)(c).

15      "Sale".                           Section 2106(1).

16      "Sale on approval".               Section 2326.

17      "Sale or return".                 Section 2326.

18      "Seller".                         Section 2103(1)(d).

19        (4) In addition article 1 contains general definitions and

20  principles of construction and interpretation applicable

21  throughout this article.

22        Sec. 9102. (1) As used in this article:

23        (a) "Accession" means goods that are physically united with

24  other goods in such a manner that the identity of the original

25  goods is not lost.

26        (b) "Account", except as used in "account for", means a

27  right to payment of a monetary obligation, whether or not earned

28  by performance, for property that has been or is to be sold,

 1  leased, licensed, assigned, or otherwise disposed of, for

 2  services rendered or to be rendered, for a policy of insurance

 3  issued or to be issued, for a secondary obligation incurred or to

 4  be incurred, for energy provided or to be provided, for the use

 5  or hire of a vessel under a charter or other contract, arising

 6  out of the use of a credit or charge card or information

 7  contained on or for use with the card, or as winnings in a

 8  lottery or other game of chance operated or sponsored by a state,

 9  governmental unit of a state, or person licensed or authorized to

10  operate the game by a state or governmental unit of a state. The

11  term includes health-care-insurance receivables. The term does

12  not include rights to payment evidenced by chattel paper or an

13  instrument, commercial tort claims, deposit accounts, investment

14  property, letter-of-credit rights or letters of credit, or rights

15  to payment for money or funds advanced or sold, other than rights

16  arising out of the use of a credit or charge card or information

17  contained on or for use with the card.

18        (c) "Account debtor" means a person obligated on an account,

19  chattel paper, or general intangible. The term does not include

20  persons obligated to pay a negotiable instrument, even if the

21  instrument constitutes part of chattel paper.

22        (d) "Accounting", except as used in "accounting for", means

23  a record that meets all of the following requirements:

24        (i) Authenticated by a secured party.

25        (ii) Indicating the aggregate unpaid secured obligations as

26  of a date not more than 35 days earlier or 35 days later than the

27  date of the record.

 1        (iii) Identifying the components of the obligations in

 2  reasonable detail.

 3        (e) "Agricultural lien" means an interest, other than a

 4  security interest, in farm products that meets all of the

 5  following requirements:

 6        (i) The interest secures payment or performance of an

 7  obligation for 1 or more of the following:

 8        (A) Goods or services furnished in connection with a

 9  debtor's farming operation.

10        (B) Rent on real property leased by a debtor in connection

11  with its farming operation.

12        (ii) The interest is created by statute in favor of a person

13  that did 1 or more of the following:

14        (A) In the ordinary course of its business furnished goods

15  or services to a debtor in connection with a debtor's farming

16  operation.

17        (B) Leased real property to a debtor in connection with the

18  debtor's farming operation.

19        (iii) The effectiveness of the interest does not depend on the

20  person's possession of the personal property.

21        (f) "As-extracted collateral" means 1 or more of the

22  following:

23        (i) Oil, gas, or other minerals that are subject to a

24  security interest that is created by a debtor having an interest

25  in the minerals before extraction and attaches to the minerals as

26  extracted.

27        (ii) Accounts arising out of the sale at the wellhead or

 1  minehead of oil, gas, or other minerals in which the debtor had

 2  an interest before extraction.

 3        (g) "Authenticate" means 1 either of the following:

 4        (i) To sign.

 5        (ii) To execute or otherwise adopt a symbol, or encrypt or

 6  similarly process a record in whole or in part, with the present

 7  intent of the authenticating person to identify the person and

 8  adopt or accept a record.With present intent to adopt or accept a

 9  record, to attach to or logically associate with the record an

10  electronic sound, symbol, or process.

11        (h) "Bank" means an organization that is engaged in the

12  business of banking. The term includes savings banks, savings and

13  loan associations, credit unions, and trust companies.

14        (i) "Cash proceeds" means proceeds that are money, checks,

15  deposit accounts, or the like.

16        (j) "Certificate of title" means a certificate of title with

17  respect to which a statute provides for the security interest in

18  question to be indicated on the certificate as a condition or

19  result of the security interest's obtaining priority over the

20  rights of a lien creditor with respect to the collateral. The

21  term includes another record maintained as an alternative to a

22  certificate of title by the governmental unit that issues

23  certificates of title if a statute permits the security interest

24  in question to be indicated on the record as a condition or

25  result of the security interest's obtaining priority over the

26  rights of a lien creditor with respect to the collateral.

27        (k) "Chattel paper" means a record or records that evidence

 1  both a monetary obligation and a security interest in specific

 2  goods, a security interest in specific goods and software used in

 3  the goods, a security interest in specific goods and license of

 4  software used in the goods, a lease of specific goods, or a lease

 5  of specific goods and license of software used in the goods. As

 6  used in this subdivision, "monetary obligation" means a monetary

 7  obligation secured by the goods or owed under a lease of the

 8  goods and includes a monetary obligation with respect to software

 9  used in the goods. The term does not include charters or other

10  contracts involving the use or hire of a vessel, or records that

11  evidence a right to payment arising out of the use of a credit or

12  charge card or information contained on or for use with the card.

13  If a transaction is evidenced by records that include an

14  instrument or series of instruments, the group of records taken

15  together constitutes chattel paper.

16        (l) "Collateral" means the property subject to a security

17  interest or agricultural lien. The term includes 1 or more of the

18  following:

19        (i) Proceeds to which a security interest attaches.

20        (ii) Accounts, chattel paper, payment intangibles, and

21  promissory notes that have been sold.

22        (iii) Goods that are the subject of a consignment.

23        (m) "Commercial tort claim" means a claim arising in tort

24  with respect to which 1 of the following applies:

25        (i) The claimant is an organization.

26        (ii) The claimant is an individual and the claim arose in the

27  course of the claimant's business or profession and does not

 1  include damages arising out of personal injury to or the death of

 2  an individual.

 3        (n) "Commodity account" means an account maintained by a

 4  commodity intermediary in which a commodity contract is carried

 5  for a commodity customer.

 6        (o) "Commodity contract" means a commodity futures contract,

 7  an option on a commodity futures contract, a commodity option, or

 8  another contract if the contract or option is 1 of the following:

 9        (i) Traded on or subject to the rules of a board of trade

10  that has been designated as a contract market for such a contract

11  pursuant to federal commodities laws.

12        (ii) Traded on a foreign commodity board of trade, exchange,

13  or market, and is carried on the books of a commodity

14  intermediary for a commodity customer.

15        (p) "Commodity customer" means a person for which a

16  commodity intermediary carries a commodity contract on its books.

17        (q) "Commodity intermediary" means 1 of the following:

18        (i) A person that is registered as a futures commission

19  merchant under federal commodities law.

20        (ii) A person that in the ordinary course of its business

21  provides clearance or settlement services for a board of trade

22  that has been designated as a contract market pursuant to federal

23  commodities law.

24        (r) "Communicate" means 1 or more of the following:

25        (i) To send a written or other tangible record.

26        (ii) To transmit a record by any means agreed upon by the

27  persons sending and receiving the record.

 1        (iii) In the case of transmission of a record to or by a

 2  filing office, to transmit a record by any means prescribed by

 3  filing-office rule.

 4        (s) "Consignee" means a merchant to which goods are

 5  delivered in a consignment.

 6        (t) "Consignment" means a transaction, regardless of its

 7  form, in which a person delivers goods to a merchant for the

 8  purpose of sale and that meets all of the following:

 9        (i) The merchant deals in goods of that kind under a name

10  other than the name of the person making delivery, is not an

11  auctioneer, and is not generally known by its creditors to be

12  substantially engaged in selling the goods of others.

13        (ii) With respect to each delivery, the aggregate value of

14  the goods is $1,000.00 or more at the time of delivery.

15        (iii) The goods are not consumer goods immediately before

16  delivery.

17        (iv) The transaction does not create a security interest that

18  secures an obligation.

19        (u) "Consignor" means a person that delivers goods to a

20  consignee in a consignment.

21        (v) "Consumer debtor" means a debtor in a consumer

22  transaction.

23        (w) "Consumer goods" means goods that are used or bought for

24  use primarily for personal, family, or household purposes.

25        (x) "Consumer-goods transaction" means a consumer

26  transaction in which an individual incurs an obligation primarily

27  for personal, family, or household purposes and a security

 1  interest in consumer goods secures the obligation.

 2        (y) "Consumer obligor" means an obligor who is an individual

 3  and who incurred the obligation as part of a transaction entered

 4  into primarily for personal, family, or household purposes.

 5        (z) "Consumer transaction" means a transaction in which an

 6  individual incurs an obligation primarily for personal, family,

 7  or household purposes, a security interest secures the

 8  obligation, and the collateral is held or acquired primarily for

 9  personal, family, or household purposes. The term includes

10  consumer-goods transactions.

11        (aa) "Continuation statement" means an amendment of a

12  financing statement which identifies, by its file number, the

13  initial financing statement to which it relates and indicates

14  that it is a continuation statement for, or that it is filed to

15  continue the effectiveness of, the identified financing

16  statement.

17        (bb) "Debtor" means 1 of the following:

18        (i) A person having an interest, other than a security

19  interest or other lien, in the collateral, whether or not the

20  person is an obligor.

21        (ii) A seller of accounts, chattel paper, payment

22  intangibles, or promissory notes.

23        (iii) A consignee.

24        (cc) "Deposit account" means a demand, time, savings,

25  passbook, or similar account maintained with a bank. The term

26  does not include investment property or accounts evidenced by an

27  instrument.

 1        (dd) "Document" means a document of title or a receipt of

 2  the type described in section 7201(2).

 3        (ee) "Electronic chattel paper" means chattel paper

 4  evidenced by a record or records consisting of information stored

 5  in an electronic medium.

 6        (ff) "Encumbrance" means a right, other than an ownership

 7  interest, in real property. The term includes mortgages and other

 8  liens on real property.

 9        (gg) "Equipment" means goods other than inventory, farm

10  products, or consumer goods.

11        (hh) "Farm products" means goods, other than standing

12  timber, with respect to which the debtor is engaged in a farming

13  operation and which are 1 of the following:

14        (i) Crops grown, growing, or to be grown, including crops

15  produced on trees, vines, and bushes, and aquatic goods produced

16  in aquacultural operations.

17        (ii) Livestock, born or unborn, including aquatic goods

18  produced in aquacultural operations.

19        (iii) Supplies used or produced in a farming operation.

20        (iv) Products of crops or livestock in their unmanufactured

21  states.

22        (ii) "Farming operation" means raising, cultivating,

23  propagating, fattening, grazing, or any other farming, livestock,

24  or aquacultural operation.

25        (jj) "File number" means the number assigned to an initial

26  financing statement pursuant to section 9519(1).

27        (kk) "Filing office" means an office designated in section

 1  9501 as the place to file a financing statement.

 2        (ll) "Filing-office rule" means a rule adopted pursuant to

 3  section 9526.

 4        (mm) "Financing statement" means a record or records

 5  composed of an initial financing statement and any filed record

 6  relating to the initial financing statement.

 7        (nn) "Fixture filing" means the filing of a financing

 8  statement covering goods that are or are to become fixtures and

 9  satisfying section 9502(1) and (2). The term includes the filing

10  of a financing statement covering goods of a transmitting utility

11  which are or are to become fixtures.

12        (oo) "Fixtures" means goods that have become so related to

13  particular real property that an interest in them arises under

14  real property law.

15        (pp) "General intangible" means any personal property,

16  including things in action, other than accounts, chattel paper,

17  commercial tort claims, deposit accounts, documents, goods,

18  instruments, investment property, letter-of-credit rights,

19  letters of credit, money, and oil, gas, or other minerals before

20  extraction. The term includes payment intangibles and software.

21        (qq) "Good faith" means honesty in fact and the observance

22  of reasonable commercial standards of fair dealing.

23        (rr) "Goods" means all things that are movable when a

24  security interest attaches. The term includes fixtures, standing

25  timber that is to be cut and removed under a conveyance or

26  contract for sale, the unborn young of animals, crops grown,

27  growing, or to be grown, even if the crops are produced on trees,

 1  vines, or bushes, and manufactured homes. The term also includes

 2  a computer program embedded in goods and any supporting

 3  information provided in connection with a transaction relating to

 4  the program if the program is associated with the goods in such a

 5  manner that it customarily is considered part of the goods, or by

 6  becoming the owner of the goods, a person acquires a right to use

 7  the program in connection with the goods. The term does not

 8  include a computer program embedded in goods that consist solely

 9  of the medium in which the program is embedded. The term also

10  does not include accounts, chattel paper, commercial tort claims,

11  deposit accounts, documents, general intangibles, instruments,

12  investment property, letter-of-credit rights, letters of credit,

13  money, or oil, gas, or other minerals before extraction.

14        (ss) "Governmental unit" means a subdivision, agency,

15  department, county, parish, municipality, or other unit of the

16  government of the United States, a state, or a foreign country.

17  The term includes an organization having a separate corporate

18  existence if the organization is eligible to issue debt on which

19  interest is exempt from income taxation under the laws of the

20  United States.

21        (tt) "Health-care-insurance receivable" means an interest in

22  or claim under a policy of insurance which is a right to payment

23  of a monetary obligation for health-care goods or services

24  provided.

25        (uu) "Instrument" means a negotiable instrument or any other

26  writing that evidences a right to the payment of a monetary

27  obligation, is not itself a security agreement or lease, and is

 1  of a type that in ordinary course of business is transferred by

 2  delivery with any necessary indorsement or assignment. The term

 3  does not include investment property, letters of credit, or

 4  writings that evidence a right to payment arising out of the use

 5  of a credit or charge card or information contained on or for use

 6  with the card.

 7        (vv) "Inventory" means goods, other than farm products, that

 8  meet 1 of the following:

 9        (i) Are leased by a person as lessor.

10        (ii) Are held by a person for sale or lease or to be

11  furnished under a contract of service.

12        (iii) Are furnished by a person under a contract of service.

13        (iv) Consist of raw materials, work in process, or materials

14  used or consumed in a business.

15        (ww) "Investment property" means a security, whether

16  certificated or uncertificated, security entitlement, securities

17  account, commodity contract, or commodity account.

18        (xx) "Jurisdiction of organization", with respect to a

19  registered organization, means the jurisdiction under whose law

20  the organization is formed or organized.

21        (yy) "Letter-of-credit right" means a right to payment or

22  performance under a letter of credit, whether or not the

23  beneficiary has demanded or is at the time entitled to demand

24  payment or performance. The term does not include the right of a

25  beneficiary to demand payment or performance under a letter of

26  credit.

27        (zz) "Lien creditor" means 1 or more of the following:

 1        (i) A creditor that has acquired a lien on the property

 2  involved by attachment, levy, or the like.

 3        (ii) An assignee for benefit of creditors from the time of

 4  assignment.

 5        (iii) A trustee in bankruptcy from the date of the filing of

 6  the petition.

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

 8        (aaa) "Manufactured home" means a structure, transportable

 9  in 1 or more sections, which, in the traveling mode, is 8 body

10  feet or more in width or 40 body feet or more in length, or when

11  erected on site, is 320 or more square feet, and which is built

12  on a permanent chassis and designed to be used as a dwelling with

13  or without a permanent foundation when connected to the required

14  utilities, and includes the plumbing, heating, air-conditioning,

15  and electrical systems contained therein. The term includes any

16  structure that meets all of the requirements of this paragraph

17  except the size requirements and with respect to which the

18  manufacturer voluntarily files a certification required by the

19  secretary of the department of housing and urban development and

20  complies with the standards established under title 42 of the

21  United States Code.

22        (bbb) "Manufactured-home transaction" means a secured

23  transaction that creates a purchase-money security interest in a

24  manufactured home, other than a manufactured home held as

25  inventory, or in which a manufactured home, other than a

26  manufactured home held as inventory, is the primary collateral.

27        (ccc) "Mortgage" means a consensual interest in real

 1  property, including fixtures, which secures payment or

 2  performance of an obligation.

 3        (ddd) "New debtor" means a person that becomes bound as

 4  debtor under section 9203(4) by a security agreement previously

 5  entered into by another person.

 6        (eee) "New value" means money, money's worth in property,

 7  services, or new credit, or release by a transferee of an

 8  interest in property previously transferred to the transferee.

 9  The term does not include an obligation substituted for another

10  obligation.

11        (fff) "Noncash proceeds" means proceeds other than cash

12  proceeds.

13        (ggg) "Obligor" means a person that, with respect to an

14  obligation secured by a security interest in or an agricultural

15  lien on the collateral, owes payment or other performance of the

16  obligation, has provided property other than the collateral to

17  secure payment or other performance of the obligation, or is

18  otherwise accountable in whole or in part for payment or other

19  performance of the obligation. The term does not include issuers

20  or nominated persons under a letter of credit.

21        (hhh) "Original debtor" means, except as used in section

22  9310(3), a person that, as debtor, entered into a security

23  agreement to which a new debtor has become bound under section

24  9203(4).

25        (iii) "Payment intangible" means a general intangible under

26  which the account debtor's principal obligation is a monetary

27  obligation.

 1        (jjj) "Person related to", with respect to an individual,

 2  means 1 or more of the following:

 3        (i) The spouse of the individual.

 4        (ii) A brother, brother-in-law, sister, or sister-in-law of

 5  the individual.

 6        (iii) An ancestor or lineal descendant of the individual or

 7  the individual's spouse.

 8        (iv) Any other relative, by blood or marriage, of the

 9  individual or the individual's spouse who shares the same home

10  with the individual.

11        (kkk) "Person related to", with respect to an organization,

12  means 1 or more of the following:

13        (i) A person directly or indirectly controlling, controlled

14  by, or under common control with the organization.

15        (ii) An officer or director of, or a person performing

16  similar functions with respect to, the organization.

17        (iii) An officer or director of, or a person performing

18  similar functions with respect to, a person described in

19  subparagraph (i).

20        (iv) The spouse of an individual described in subparagraph

21  (i), (ii), or (iii).

22        (v) An individual who is related by blood or marriage to an

23  individual described in subparagraph (i), (ii), (iii), or (iv) and

24  shares the same home with the individual.

25        (lll) "Proceeds" means, except as used in section 9609(2), 1

26  or more of the following property:

27        (i) Whatever is acquired upon the sale, lease, license,

 1  exchange, or other disposition of collateral.

 2        (ii) Whatever is collected on, or distributed on account of,

 3  collateral.

 4        (iii) Rights arising out of collateral.

 5        (iv) To the extent of the value of collateral, claims arising

 6  out of the loss, nonconformity, or interference with the use of,

 7  defects or infringement of rights in, or damage to, the

 8  collateral.

 9        (v) To the extent of the value of collateral and to the

10  extent payable to the debtor or the secured party, insurance

11  payable by reason of the loss or nonconformity of, defects or

12  infringement of rights in, or damage to, the collateral.

13        (mmm) "Promissory note" means an instrument that evidences a

14  promise to pay a monetary obligation, does not evidence an order

15  to pay, and does not contain an acknowledgment by a bank that the

16  bank has received for deposit a sum of money or funds.

17        (nnn) "Proposal" means a record authenticated by a secured

18  party which includes the terms on which the secured party is

19  willing to accept collateral in full or partial satisfaction of

20  the obligation it secures pursuant to sections 9620, 9621, and

21  9622.

22        (ooo) "Public organic record" means a record that is

23  available to the public for inspection and is any of the

24  following:

25        (i) A record consisting of the record initially filed with or

26  issued by a state or the United States to form or organize an

27  organization and any record filed with or issued by the state or

 1  the United States which amends or restates the initial record.

 2        (ii) An organic record of a business trust consisting of the

 3  record initially filed with a state and any record filed with the

 4  state which amends or restates the initial record, if a statute

 5  of the state governing business trusts requires that the record

 6  be filed with the state.

 7        (iii) A record consisting of legislation enacted by the

 8  legislature of a state or the congress of the United States which

 9  forms or organizes an organization, any record amending the

10  legislation, and any record filed with or issued by the state or

11  the United States which amends or restates the name of the

12  organization.

13  (ppp) (ooo) "Pursuant to commitment", with respect to an

14  advance made or other value given by a secured party, means

15  pursuant to the secured party's obligation, whether or not a

16  subsequent event of default or other event not within the secured

17  party's control has relieved or may relieve the secured party

18  from its obligation.

19  (qqq) (ppp) "Record", except as used in "for record", "of

20  record", "record or legal title", and "record owner", means

21  information that is inscribed on a tangible medium or which is

22  stored in an electronic or other medium and is retrievable in

23  perceivable form.

24  (rrr) (qqq) "Registered organization" means an organization

25  formed or organized solely under the law of a single state or the

26  United States and as to which the state or the United States must

27  maintain a public record showing the organization to have been

 1  organized.by the filing of a public organic record with, the

 2  issuance of a public organic record by, or the enactment of

 3  legislation by the state or the United States. The term includes

 4  a business trust that is formed or organized under the law of a

 5  single state if a statute of the state governing business trusts

 6  requires that the business trust's organic record be filed with

 7  the state.

 8  (sss) (rrr) "Secondary obligor" means an obligor to the

 9  extent that the obligor's obligation is secondary or the obligor

10  has a right of recourse with respect to an obligation secured by

11  collateral against the debtor, another obligor, or property of

12  either.

13  (ttt) (sss) "Secured party" means 1 or more of the

14  following:

15        (i) A person in whose favor a security interest is created or

16  provided for under a security agreement, whether or not any

17  obligation to be secured is outstanding.

18        (ii) A person that holds an agricultural lien.

19        (iii) A consignor.

20        (iv) A person to which accounts, chattel paper, payment

21  intangibles, or promissory notes have been sold.

22        (v) A trustee, indenture trustee, agent, collateral agent,

23  or other representative in whose favor a security interest or

24  agricultural lien is created or provided for.

25        (vi) A person that holds a security interest arising under

26  section 2401, 2505, 2711(3), 2A508(5), 4210, or 5118.

27  (uuu) (ttt) "Security agreement" means an agreement that

 1  creates or provides for a security interest.

 2  (vvv) (uuu) "Send", in connection with a record or

 3  notification, means 1 of the following:

 4        (i) To deposit in the mail, deliver for transmission, or

 5  transmit by any other usual means of communication, with postage

 6  or cost of transmission provided for, addressed to any address

 7  reasonable under the circumstances.

 8        (ii) To cause the record or notification to be received

 9  within the time that it would have been received if properly sent

10  under subparagraph (i).

11  (www) (vvv) "Software" means a computer program and any

12  supporting information provided in connection with a transaction

13  relating to the program. The term does not include a computer

14  program that is included in the definition of goods.

15  (xxx) (www) "State" means a state of the United States, the

16  District of Columbia, Puerto Rico, the United States Virgin

17  Islands, or any territory or insular possession subject to the

18  jurisdiction of the United States.

19  (yyy) (xxx) "Supporting obligation" means a letter-of-credit

20  right or secondary obligation that supports the payment or

21  performance of an account, chattel paper, a document, a general

22  intangible, an instrument, or investment property.

23  (zzz) (yyy) "Tangible chattel paper" means chattel paper

24  evidenced by a record or records consisting of information that

25  is inscribed on a tangible medium.

26  (aaaa) (zzz) "Termination statement" means an amendment of a

27  financing statement that identifies, by its file number, the

 1  initial financing statement to which it relates and indicates

 2  either that it is a termination statement or that the identified

 3  financing statement is no longer effective.

 4  (bbbb) (aaaa) "Transmitting utility" means a person

 5  primarily engaged in the business of 1 of the following:

 6        (i) Operating a railroad, subway, street railway, or trolley

 7  bus.

 8        (ii) Transmitting communications electrically,

 9  electromagnetically, or by light.

10        (iii) Transmitting goods by pipeline or sewer.

11        (iv) Transmitting or producing and transmitting electricity,

12  steam, gas, or water.

13        (2) The following definitions in other articles apply to

14  this article:

15      "Applicant"                                     Section 5102

16      "Beneficiary"                                   Section 5102

17      "Broker"                                        Section 8102

18      "Certificated security"                         Section 8102

19      "Check"                                         Section 3104

20      "Clearing corporation"                          Section 8102

21      "Contract for sale"                             Section 2106

22      "Customer"                                      Section 4104

23      "Entitlement holder"                            Section 8102

24      "Financial asset"                               Section 8102

25      "Holder in due course"                          Section 3302

26      "Issuer" (with respect to a letter             

27        of credit or letter-of-credit right)          Section 5102

28      "Issuer" (with respect to a security)           Section 8201

1       "Lease"                                         Section 2A103

2       "Lease agreement"                               Section 2A103

3       "Lease contract"                                Section 2A103

4       "Leasehold interest"                            Section 2A103

5       "Lessee"                                        Section 2A103

6       "Lessee in ordinary course of business"         Section 2A103

7       "Lessor"                                        Section 2A103

8       "Lessor's residual interest"                    Section 2A103

9       "Letter of credit"                              Section 5102

10      "Merchant"                                      Section 2104

11      "Negotiable instrument"                         Section 3104

12      "Nominated person"                              Section 5102

13      "Note"                                          Section 3104

14      "Proceeds of a letter of credit"                Section 5114

15      "Prove"                                         Section 3103

16      "Sale"                                          Section 2106

17      "Securities account"                            Section 8501

18     "Securities intermediary"                       Section 8102

19      "Security"                                      Section 8102

20      "Security certificate"                          Section 8102

21      "Security entitlement"                          Section 8102

22      "Uncertificated security"                       Section 8102.

23        (3) Article 1 contains general definitions and principles of

24  construction and interpretation applicable throughout this

25  article.

26        Sec. 9105. (1) A secured party has control of electronic

27  chattel paper if a system employed for evidencing the transfer of

28  interests in the chattel paper reliably establishes the secured

29  party as the person to which the chattel paper was assigned.

 1        (2) A system satisfies subsection (1) if the record or

 2  records comprising the chattel paper are created, stored, and

 3  assigned in such a manner that all of the following apply:

 4        (a) A single authoritative copy of the record or records

 5  exists which is unique, identifiable, and, except as otherwise

 6  provided in subdivisions (d), (e), and (f), unalterable.

 7        (b) The authoritative copy identifies the secured party as

 8  the assignee of the record or records.

 9        (c) The authoritative copy is communicated to and maintained

10  by the secured party or its designated custodian.

11        (d) Copies or revisions amendments that add or change an

12  identified assignee of the authoritative copy can be made only

13  with the participation consent of the secured party.

14        (e) Each copy of the authoritative copy and any copy of a

15  copy is readily identifiable as a copy that is not the

16  authoritative copy.

17        (f) Any revision amendment of the authoritative copy is

18  readily identifiable as an authorized or unauthorized. revision.

19        Sec. 9307. (1) As used in this section, "place of business"

20  means a place where a debtor conducts its affairs.

21        (2) Except as otherwise provided in this section, the

22  following rules determine a debtor's location:

23        (a) A debtor who is an individual is located at the

24  individual's principal residence.

25        (b) A debtor that is an organization and has only 1 place of

26  business is located at its place of business.

27        (c) A debtor that is an organization and has more than 1

 1  place of business is located at its chief executive office.

 2        (3) Subsection (2) applies only if a debtor's residence,

 3  place of business, or chief executive office, as applicable, is

 4  located in a jurisdiction whose law generally requires

 5  information concerning the existence of a nonpossessory security

 6  interest to be made generally available in a filing, recording,

 7  or registration system as a condition or result of the security

 8  interest's obtaining priority over the rights of a lien creditor

 9  with respect to the collateral. If subsection (2) does not apply,

10  the debtor is located in the District of Columbia.

11        (4) A person that ceases to exist, have a residence, or have

12  a place of business continues to be located in the jurisdiction

13  specified by subsections (2) and (3).

14        (5) A registered organization that is organized under the

15  law of a state is located in that state.

16        (6) Except as otherwise provided in subsection (9), a

17  registered organization that is organized under the law of the

18  United States and a branch or agency of a bank that is not

19  organized under the law of the United States or a state are

20  located in 1 of the following:

21        (a) In the state that the law of the United States

22  designates, if the law designates a state of location.

23        (b) In the state that the registered organization, branch,

24  or agency designates, if the law of the United States authorizes

25  the registered organization, branch, or agency to designate its

26  state of location, including by designating its main office, home

27  office, or other comparable office.

 1        (c) In the District of Columbia, if neither subdivision (a)

 2  nor (b) applies.

 3        (7) A registered organization continues to be located in the

 4  jurisdiction specified by subsection (5) or (6) notwithstanding

 5  the occurrence of 1 of the following:

 6        (a) The suspension, revocation, forfeiture, or lapse of the

 7  registered organization's status as such in its jurisdiction of

 8  organization.

 9        (b) The dissolution, winding up, or cancellation of the

10  existence of the registered organization.

11        (8) The United States is located in the District of

12  Columbia.

13        (9) A branch or agency of a bank that is not organized under

14  the law of the United States or a state is located in the state

15  in which the branch or agency is licensed, if all branches and

16  agencies of the bank are licensed in only 1 state.

17        (10) A foreign air carrier is located at the designated

18  office of the agent upon which service of process may be made on

19  behalf of the carrier under section 46103 of title 49 of the

20  United States Code, 49 U.S.C.USC 46103.

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

22        Sec. 9311. (1) Except as otherwise provided in subsection

23  (4), the filing of a financing statement is not necessary or

24  effective to perfect a security interest in property subject to 1

25  or more of the following:

26        (a) A statute, regulation, or treaty of the United States

27  whose requirements for a security interest's obtaining priority

 1  over the rights of a lien creditor with respect to the property

 2  preempt section 9310(1).

 3        (b) The following statutes of this state:

 4        (i) Chapter II of the Michigan vehicle code, 1949 PA 300, MCL

 5  257.201 to 257.259.

 6        (ii) Part 803 of the natural resources and environmental

 7  protection act, 1994 PA 451, MCL 324.80301 to 324.80322.

 8        (iii) Part 811 of the natural resources and environmental

 9  protection act, 1994 PA 451, MCL 324.81101 to 324.81150.

10        (iv) Sections 30 through 30i of the mobile home commission

11  act, 1987 PA 96, MCL 125.2330 to 125.2330i.

12        (c) A certificate-of-title statute of another jurisdiction

13  that provides for a security interest to be indicated on the a

14  certificate of title as a condition or result of the security

15  interest's obtaining priority over the rights of a lien creditor

16  with respect to the property.

17        (2) Compliance with the requirements of a statute,

18  regulation, or treaty described in subsection (1) for obtaining

19  priority over the rights of a lien creditor is equivalent to the

20  filing of a financing statement under this article. Except as

21  otherwise provided in subsection (4) and sections 9313 and

22  9316(4) and (5) for goods covered by a certificate of title, a

23  security interest in property subject to a statute, regulation,

24  or treaty described in subsection (1) may be perfected only by

25  compliance with those requirements, and a security interest so

26  perfected remains perfected notwithstanding a change in the use

27  or transfer of possession of the collateral.

 1        (3) Except as otherwise provided in subsection (4) and

 2  section 9316(4) and (5), duration and renewal of perfection of a

 3  security interest perfected by compliance with the requirements

 4  prescribed by a statute, regulation, or treaty described in

 5  subsection (1) are governed by the statute, regulation, or

 6  treaty. In other respects, the security interest is subject to

 7  this article.

 8        (4) During any period in which collateral subject to a

 9  statute specified in subsection (1)(b) is inventory held for sale

10  or lease by a person or leased by that person as lessor and that

11  person is in the business of selling goods of that kind, this

12  section does not apply to a security interest in that collateral

13  created by that person.

14        Sec. 9316. (1) A security interest perfected pursuant to the

15  law of the jurisdiction designated in section 9301(a) or 9305(3)

16  remains perfected until the earliest of the following:

17        (a) The time perfection would have ceased under the law of

18  that jurisdiction.

19        (b) The expiration of 4 months after a change of the

20  debtor's location to another jurisdiction.

21        (c) The expiration of 1 year after a transfer of collateral

22  to a person that thereby becomes a debtor and is located in

23  another jurisdiction.

24        (2) If a security interest described in subsection (1)

25  becomes perfected under the law of the other jurisdiction before

26  the earliest time or event described in that subsection, it

27  remains perfected thereafter. If the security interest does not

 1  become perfected under the law of the other jurisdiction before

 2  the earliest time or event, it becomes unperfected and is deemed

 3  never to have been perfected as against a purchaser of the

 4  collateral for value.

 5        (3) A possessory security interest in collateral, other than

 6  goods covered by a certificate of title and as-extracted

 7  collateral consisting of goods, remains continuously perfected if

 8  all of the following are met:

 9        (a) The collateral is located in 1 jurisdiction and subject

10  to a security interest perfected under the law of that

11  jurisdiction.

12        (b) Thereafter, the collateral is brought into another

13  jurisdiction.

14        (c) Upon entry of the collateral into the other

15  jurisdiction, the security interest is perfected under the law of

16  the other jurisdiction.

17        (4) Except as otherwise provided in subsection (5), a

18  security interest in goods covered by a certificate of title that

19  is perfected by any method under the law of another jurisdiction

20  when the goods become covered by a certificate of title from this

21  state remains perfected until the security interest would have

22  become unperfected under the law of the other jurisdiction had

23  the goods not become so covered.

24        (5) A security interest described in subsection (4) becomes

25  unperfected as against a purchaser of the goods for value and is

26  deemed never to have been perfected as against a purchaser of the

27  goods for value if the applicable requirements for perfection

 1  under section 9311(2) or 9313 are not satisfied before the

 2  earlier of the following:

 3        (a) The time the security interest would have become

 4  unperfected under the law of the other jurisdiction had the goods

 5  not become covered by a certificate of title from this state.

 6        (b) The expiration of 4 months after the goods had become so

 7  covered.

 8        (6) A security interest in deposit accounts, letter-of-

 9  credit rights, or investment property that is perfected under the

10  law of the bank's jurisdiction, the issuer's jurisdiction, a

11  nominated person's jurisdiction, the securities intermediary's

12  jurisdiction, or the commodity intermediary's jurisdiction, as

13  applicable, remains perfected until the earlier of the following:

14        (a) The time the security interest would have become

15  unperfected under the law of that jurisdiction.

16        (b) The expiration of 4 months after a change of the

17  applicable jurisdiction to another jurisdiction.

18        (7) If a security interest described in subsection (6)

19  becomes perfected under the law of the other jurisdiction before

20  the earlier of the time or the end of the period described in

21  that subsection, it remains perfected thereafter. If the security

22  interest does not become perfected under the law of the other

23  jurisdiction before the earlier of that time or the end of that

24  period, it becomes unperfected and is deemed never to have been

25  perfected as against a purchaser of the collateral for value.

26        (8) The following rules apply to collateral to which a

27  security interest attaches within 4 months after the debtor

 1  changes its location to another jurisdiction:

 2        (a) A financing statement filed before the change pursuant

 3  to the law of the jurisdiction designated in section 9301(a) or

 4  9305(3) is effective to perfect a security interest in the

 5  collateral if the financing statement would have been effective

 6  to perfect a security interest in the collateral had the debtor

 7  not changed its location.

 8        (b) If a security interest perfected by a financing

 9  statement that is effective under subdivision (a) becomes

10  perfected under the law of the other jurisdiction before the

11  earlier of the time the financing statement would have become

12  ineffective under the law of the jurisdiction designated in

13  section 9301(a) or 9305(3) or the expiration of the 4‑month

14  period, it remains perfected thereafter. If the security interest

15  does not become perfected under the law of the other jurisdiction

16  before the earlier time or event, it becomes unperfected and is

17  deemed never to have been perfected as against a purchaser of the

18  collateral for value.

19        (9) If a financing statement naming an original debtor is

20  filed pursuant to the law of the jurisdiction designated in

21  section 9301(a) or 9305(3) and the new debtor is located in

22  another jurisdiction, the following rules apply:

23        (a) The financing statement is effective to perfect a

24  security interest in collateral acquired by the new debtor

25  before, and within 4 months after, the new debtor becomes bound

26  under section 9203(4), if the financing statement would have been

27  effective to perfect a security interest in the collateral had

 1  the collateral been acquired by the original debtor.

 2        (b) A security interest perfected by the financing statement

 3  and which becomes perfected under the law of the other

 4  jurisdiction before the earlier of the time the financing

 5  statement would have become ineffective under the law of the

 6  jurisdiction designated in section 9301(a) or 9305(3) or the

 7  expiration of the 4‑month period remains perfected thereafter. A

 8  security interest that is perfected by the financing statement

 9  but which does not become perfected under the law of the other

10  jurisdiction before the earlier time or event becomes unperfected

11  and is deemed never to have been perfected as against a purchaser

12  of the collateral for value.

13        Sec. 9317. (1) A security interest or agricultural lien is

14  subordinate to the rights of 1 or more of the following:

15        (a) A person entitled to priority under section 9322.

16        (b) Except as otherwise provided in subsection (5), a person

17  that becomes a lien creditor before the earlier of the following:

18        (i) The time the security interest or agricultural lien is

19  perfected.

20        (ii) The time 1 of the conditions specified in section

21  9203(2)(c) is met and a financing statement covering the

22  collateral is filed.

23        (2) Except as otherwise provided in subsection (5), a buyer,

24  other than a secured party, of tangible chattel paper, documents,

25  goods, instruments, or a certificated security certificate takes

26  free of a security interest or agricultural lien if the buyer

27  gives value and receives delivery of the collateral without

 1  knowledge of the security interest or agricultural lien and

 2  before it is perfected.

 3        (3) Except as otherwise provided in subsection (5), a lessee

 4  of goods takes free of a security interest or agricultural lien

 5  if the lessee gives value and receives delivery of the collateral

 6  without knowledge of the security interest or agricultural lien

 7  and before it is perfected.

 8        (4) A licensee of a general intangible or a buyer, other

 9  than a secured party, of accounts, electronic chattel paper,

10  general intangibles, or investment property other than collateral

11  other than tangible chattel paper, tangible documents, goods,

12  instruments, or a certificated security takes free of a security

13  interest if the licensee or buyer gives value without knowledge

14  of the security interest and before it is perfected.

15        (5) Except as otherwise provided in sections 9320 and 9321,

16  if a person files a financing statement with respect to a

17  purchase-money security interest before or within 20 days after

18  the debtor receives delivery of the collateral, the security

19  interest takes priority over the rights of a buyer, lessee, or

20  lien creditor that arise between the time the security interest

21  attaches and the time of filing.

22        Sec. 9326. (1) Subject to subsection (2), a security

23  interest that is created by a new debtor that is in collateral in

24  which the new debtor has or acquires rights and is perfected

25  solely by a filed financing statement that is effective solely

26  under section 9508 in collateral in that a new debtor has or

27  acquires rights would be ineffective to perfect the security

 1  interest but for the application of section 9316(9)(a) or 9508 is

 2  subordinate to a security interest in the same collateral that is

 3  perfected other than by such a filed financing statement. that is

 4  effective solely under section 9508.

 5        (2) The other provisions of this part determine the priority

 6  among conflicting security interests in the same collateral

 7  perfected by filed financing statements that are effective solely

 8  under section 9508. described in subsection (1). However, if the

 9  security agreements to which a new debtor became bound as debtor

10  were not entered into by the same original debtor, the

11  conflicting security interests rank according to priority in time

12  of the new debtor's having become bound.

13        Sec. 9406. (1) Subject to subsections (2) through (9), an

14  account debtor on an account, chattel paper, or a payment

15  intangible may discharge its obligation by paying the assignor

16  until, but not after, the account debtor receives a notification,

17  authenticated by the assignor or the assignee, that the amount

18  due or to become due has been assigned and that payment is to be

19  made to the assignee. After receipt of the notification, the

20  account debtor may discharge its obligation by paying the

21  assignee and may not discharge the obligation by paying the

22  assignor.

23        (2) Subject to subsection (8), notification is ineffective

24  under subsection (1) if 1 or more of the following apply:

25        (a) If notification does not reasonably identify the rights

26  assigned.

27        (b) To the extent that an agreement between an account

 1  debtor and a seller of a payment intangible limits the account

 2  debtor's duty to pay a person other than the seller and the

 3  limitation is effective under law other than this article.

 4        (c) At the option of an account debtor, if the notification

 5  notifies the account debtor to make less than the full amount of

 6  any installment or other periodic payment to the assignee, even

 7  if 1 or more of the following occur:

 8        (i) Only a portion of the account, chattel paper, or payment

 9  intangible has been assigned to that assignee.

10        (ii) A portion has been assigned to another assignee.

11        (iii) The account debtor knows that the assignment to that

12  assignee is limited.

13        (3) Subject to subsection (8), if requested by the account

14  debtor, an assignee shall seasonably furnish reasonable proof

15  that the assignment has been made. Unless the assignee complies,

16  the account debtor may discharge its obligation by paying the

17  assignor, even if the account debtor has received a notification

18  under subsection (1).

19        (4) Except as otherwise provided in subsection (5) and

20  sections 2A303 and 9407, and subject to subsection (8), a term in

21  an agreement between an account debtor and an assignor or in a

22  promissory note is ineffective to the extent that it does 1 or

23  more of the following:

24        (a) Prohibits, restricts, or requires the consent of the

25  account debtor or person obligated on the promissory note to the

26  assignment or transfer of, or the creation, attachment,

27  perfection, or enforcement of a security interest in, the

 1  account, chattel paper, payment intangible, or promissory note.

 2        (b) Provides that the assignment or transfer or the

 3  creation, attachment, perfection, or enforcement of the security

 4  interest may give rise to a default, breach, right of recoupment,

 5  claim, defense, termination, right of termination, or remedy

 6  under the account, chattel paper, payment intangible, or

 7  promissory note.

 8        (5) Subsection (4) does not apply to the following:

 9        (a) A claim or right to receive an amount that would be

10  excluded from gross income under section 104(a)(1) or (2) of the

11  internal revenue code, of 1986, 26 U.S.C. USC 104.

12        (b) A claim or right to receive benefits from a special

13  needs trust. For purposes of this subdivision, a "special needs

14  trust" is a trust described in section 1917(d)(4)(A), (B), or (C)

15  of title XIX of the social security act, 42 U.S.C. USC 1396p.

16        (c) The sale of a payment intangible or promissory note,

17  other than a sale pursuant to a disposition under section 9610 or

18  an acceptance of collateral under section 9620.

19        (6) Except as otherwise provided in sections 2A303 and 9407

20  and subject to subsections (8) and (9), a rule of law, statute,

21  or regulation, that prohibits, restricts, or requires the consent

22  of a government, governmental body or official, or account debtor

23  to the assignment or transfer of, or creation of a security

24  interest in, an account or chattel paper is ineffective to the

25  extent that the rule of law, statute, or regulation does 1 or

26  more of the following:

27        (a) Prohibits, restricts, or requires the consent of the

 1  government, governmental body or official, or account debtor to

 2  the assignment or transfer of, or the creation, attachment,

 3  perfection, or enforcement of a security interest in, the account

 4  or chattel paper.

 5        (b) Provides that the assignment or transfer or the

 6  creation, attachment, perfection, or enforcement of the security

 7  interest may give rise to a default, breach, right of recoupment,

 8  claim, defense, termination, right of termination, or remedy

 9  under the account or chattel paper.

10        (7) Subject to subsection (8), an account debtor may not

11  waive or vary its option under subsection (2)(c).

12        (8) This section is subject to law other than this article

13  that establishes a different rule for an account debtor who is an

14  individual and who incurred the obligation primarily for

15  personal, family, or household purposes.

16        (9) This section does not apply to an assignment of a

17  health-care-insurance receivable.

18        Sec. 9408. (1) Except as otherwise provided in subsection

19  (2) or (4), a term in a promissory note or in an agreement

20  between an account debtor and a debtor that relates to a health-

21  care-insurance receivable or a general intangible, including a

22  contract, permit, license, or franchise, and which term

23  prohibits, restricts, or requires the consent of the person

24  obligated on the promissory note or the account debtor to, the

25  assignment or transfer of, or creation, attachment, or perfection

26  of a security interest in, the promissory note, health-care-

27  insurance receivable, or general intangible, is ineffective to

 1  the extent that the term does 1 or more of the following:

 2        (a) Would impair the creation, attachment, or perfection of

 3  a security interest.

 4        (b) Provides that the assignment or transfer or the

 5  creation, attachment, or perfection of the security interest may

 6  give rise to a default, breach, right of recoupment, claim,

 7  defense, termination, right of termination, or remedy under the

 8  promissory note, health-care-insurance receivable, or general

 9  intangible.

10        (2) Subsection (1) applies to a security interest in a

11  payment intangible or promissory note only if the security

12  interest arises out of a sale of the payment intangible or

13  promissory note, other than a sale pursuant to a disposition

14  under section 9610 or an acceptance of collateral under section

15  9620.

16        (3) Except as otherwise provided in subsection (4), a rule

17  of law, statute, or regulation that prohibits, restricts, or

18  requires the consent of a government, governmental body or

19  official, person obligated on a promissory note, or account

20  debtor to the assignment or transfer of, or creation of a

21  security interest in, a promissory note, health-care-insurance

22  receivable, or general intangible, including a contract, permit,

23  license, or franchise between an account debtor and a debtor, is

24  ineffective to the extent that the rule of law, statute, or

25  regulation does 1 or more of the following:

26        (a) Would impair the creation, attachment, or perfection of

27  a security interest.

 1        (b) Provides that the assignment or transfer or the

 2  creation, attachment, or perfection of the security interest may

 3  give rise to a default, breach, right of recoupment, claim,

 4  defense, termination, right of termination, or remedy under the

 5  promissory note, health-care-insurance receivable, or general

 6  intangible.

 7        (4) To the extent that a term in a promissory note or in an

 8  agreement between an account debtor and a debtor that relates to

 9  a health-care-insurance receivable or general intangible or a

10  rule of law, statute, or regulation described in subsection (3)

11  would be effective under law other than this article but is

12  ineffective under subsection (1) or (3), the creation,

13  attachment, or perfection of a security interest in the

14  promissory note, health-care-insurance receivable, or general

15  intangible is not or does not do all of the following:

16        (a) Is not enforceable against the person obligated on the

17  promissory note or the account debtor.

18        (b) Does not impose a duty or obligation on the person

19  obligated on the promissory note or the account debtor.

20        (c) Does not require the person obligated on the promissory

21  note or the account debtor to recognize the security interest,

22  pay or render performance to the secured party, or accept payment

23  or performance from the secured party.

24        (d) Does not entitle the secured party to use or assign the

25  debtor's rights under the promissory note, health-care-insurance

26  receivable, or general intangible, including any related

27  information or materials furnished to the debtor in the

 1  transaction giving rise to the promissory note, health-care-

 2  insurance receivable, or general intangible.

 3        (e) Does not entitle the secured party to use, assign,

 4  possess, or have access to any trade secrets or confidential

 5  information of the person obligated on the promissory note or the

 6  account debtor.

 7        (f) Does not entitle the secured party to enforce the

 8  security interest in the promissory note, health-care-insurance

 9  receivable, or general intangible.

10        (5) Subsections (1) and (3) do not apply to either of the

11  following:

12        (a) A claim or right to receive an amount that would be

13  excluded from gross income under section 104(a)(1) or (2) of the

14  internal revenue code, of 1986, 26 U.S.C. USC 104.

15        (b) A claim or right to receive benefits from a special

16  needs trust. For purposes of this subdivision, a "special needs

17  trust" is a trust described in section 1917(d)(4)(A), (B), or (C)

18  of title XIX of the social security act, 42 U.S.C. USC 1396p.

19        Sec. 9502. (1) Subject to subsection (2), a financing

20  statement is sufficient only if it does all of the following:

21        (a) Provides the name of the debtor.

22        (b) Provides the name of the secured party or a

23  representative of the secured party.

24        (c) Indicates the collateral covered by the financing

25  statement.

26        (2) Except as otherwise provided in section 9501(2), to be

27  sufficient, a financing statement that covers as-extracted

 1  collateral or timber to be cut, or that is filed as a fixture

 2  filing and covers goods that are or are to become fixtures, must

 3  satisfy subsection (1) and also do all of the following:

 4        (a) Indicate that it covers this type of collateral.

 5        (b) Indicate that it is to be recorded in the real property

 6  records.

 7        (c) Provide a description of the real property to which the

 8  collateral is related sufficient to give constructive notice of a

 9  mortgage under the law of this state if the description were

10  contained in a record of the mortgage of the real property.

11        (d) If the debtor does not have an interest of record in the

12  real property, provide the name of a record owner.

13        (3) A record of a mortgage is effective, from the date of

14  recording, as a financing statement filed as a fixture filing or

15  as a financing statement covering as-extracted collateral or

16  timber to be cut only if all of the following apply:

17        (a) The record indicates the goods or accounts that it

18  covers.

19        (b) The goods are or are to become fixtures related to the

20  real property described in the record or the collateral is

21  related to the real property described in the record and is as-

22  extracted collateral or timber to be cut.

23        (c) The record satisfies the requirements for a financing

24  statement in this section, other than an indication subject to

25  the following:

26        (i) The record need not indicate that it is to be filed in

27  the real property records.

 1        (ii) The record sufficiently provides the name of a debtor

 2  who is an individual if it provides the individual name of the

 3  debtor or the surname and first personal name of the debtor, even

 4  if the debtor is an individual to whom section 9503(1)(d)

 5  applies.

 6        (d) The record is duly recorded.

 7        (4) A financing statement may be filed before a security

 8  agreement is made or a security interest otherwise attaches.

 9        Sec. 9503. (1) A financing statement sufficiently provides

10  the name of the debtor if it meets all of the following that

11  apply to the debtor:

12        (a) If Except as otherwise provided in subdivision (c), if

13  the debtor is a registered organization or the collateral is held

14  in a trust that is a registered organization, only if the

15  financing statement provides the name of the debtor indicated on

16  the public record of the debtor's jurisdiction of organization

17  which shows the debtor to have been organized.that is stated to

18  be the registered organization's name on the public organic

19  record most recently filed with or issued or enacted by the

20  registered organization's jurisdiction of organization which

21  purports to state, amend, or restate the registered

22  organization's name.

23        (b) If the debtor is a decedent's estate, only if the

24  financing statement provides the name of the decedent and

25  indicates that the debtor is an estate.Subject to subsection (6),

26  if the collateral is being administered by the personal

27  representative of a decedent, only if the financing statement

 1  provides, as the name of the debtor, the name of the decedent

 2  and, in a separate part of the financing statement, indicates

 3  that the collateral is being administered by a personal

 4  representative.

 5        (c) If the debtor is a trust or a trustee acting with

 6  respect to property held in trust, collateral is held in a trust

 7  that is not a registered organization, only if the financing

 8  statement does both of the following:

 9        (i) Provides the name specified for the trust in its organic

10  documents or, if no name is specified, provides the name of the

11  settlor and additional information sufficient to distinguish the

12  debtor from other trusts having 1 or more of the same settlors.1

13  of the following as the name of the debtor:

14        (A) If the organic record of the trust specifies a name for

15  the trust, the name specified.

16        (B) If the organic record of the trust does not specify a

17  name for the trust, the name of the settlor or testator.

18        (ii) Indicates, in the debtor's name or otherwise, that the

19  debtor is a trust or is a trustee acting with respect to property

20  held in trust. Meets 1 of the following in a separate part of the

21  financing statement:

22        (A) If the name is provided in accordance with subparagraph

23  (i)(A), indicates that the collateral is held in a trust.

24        (B) If the name is provided in accordance with subparagraph

25  (i)(B), provides additional information sufficient to distinguish

26  the trust from other trusts having 1 or more of the same settlors

27  or the same testator and indicates that the collateral is held in

 1  a trust, unless the additional information so indicates.

 2        (d) Subject to subsection (7), if the debtor is an

 3  individual to whom this state has issued a driver license or

 4  state personal identification card that has not expired, only if

 5  the financing statement provides the name of the individual which

 6  is indicated on the driver license or state personal

 7  identification card.

 8        (e) If the debtor is an individual to whom subdivision (d)

 9  does not apply, only if the financing statement provides the

10  individual name of the debtor or the surname and first personal

11  name of the debtor.

12  (f) (d) In other cases, satisfies 1 of the following:

13        (i) If the debtor has a name, only if it the financing

14  statement provides the individual or organizational name of the

15  debtor.

16        (ii) If the debtor does not have a name, only if it provides

17  the names of the partners, members, associates, or other persons

18  comprising the debtor, in a manner that each name provided would

19  be sufficient if the person named were the debtor.

20        (2) A financing statement that provides the name of the

21  debtor in accordance with subsection (1) is not rendered

22  ineffective by the absence of 1 or more of the following:

23        (a) A trade name or other name of the debtor.

24        (b) Unless required under subsection (1)(d)(ii), (1)(f)(ii),

25  names of partners, members, associates, or other persons

26  comprising the debtor.

27        (3) A financing statement that provides only the debtor's

 1  trade name does not sufficiently provide the name of the debtor.

 2        (4) Failure to indicate the representative capacity of a

 3  secured party or representative of a secured party does not

 4  affect the sufficiency of a financing statement.

 5        (5) A financing statement may provide the name of more than

 6  1 debtor and the name of more than 1 secured party.

 7        (6) The name of the decedent indicated on the order

 8  appointing the personal representative of a decedent issued by

 9  the court that has jurisdiction over the collateral is sufficient

10  as the "name of the decedent" under subsection (1)(b).

11        (7) If this state has issued to an individual more than 1

12  driver license or state personal identification card of a kind

13  described in subsection (1)(d), the one that was issued most

14  recently is the one to which subsection (1)(d) refers.

15        (8) As used in this section, the "name of the settlor or

16  testator" means any of the following:

17        (a) If the settlor is a registered organization, the name

18  that is stated to be the settlor's name on the public organic

19  record most recently filed with or issued or enacted by the

20  settlor's jurisdiction of organization which purports to state,

21  amend, or restate the settlor's name.

22        (b) In other cases, the name of the settlor or testator

23  indicated in the trust's organic record.

24        Sec. 9507. (1) A filed financing statement remains effective

25  with respect to collateral that is sold, exchanged, leased,

26  licensed, or otherwise disposed of and in which a security

27  interest or agricultural lien continues, even if the secured

 1  party knows of or consents to the disposition.

 2        (2) Except as otherwise provided in subsection (3) and

 3  section 9508, a financing statement is not rendered ineffective

 4  if, after the financing statement is filed, the information

 5  provided in the financing statement becomes seriously misleading

 6  under section 9506.

 7        (3) If a debtor so changes its the name that a filed

 8  financing statement provides for a debtor becomes insufficient as

 9  the name of the debtor under section 9503(1) so that the

10  financing statement becomes seriously misleading under section

11  9506, both of the following apply:

12        (a) The financing statement is effective to perfect a

13  security interest in collateral acquired by the debtor before, or

14  within 4 months after, the change.filed financing statement

15  becomes seriously misleading.

16        (b) The financing statement is not effective to perfect a

17  security interest in collateral acquired by the debtor more than

18  4 months after the change filed financing statement becomes

19  seriously misleading, unless an amendment to the financing

20  statement that renders the financing statement not seriously

21  misleading is filed within 4 months after the change.the

22  financing statement became seriously misleading.

23        Sec. 9515. (1) Except as otherwise provided in subsections

24  (2), (5), (6), and (7), a filed financing statement is effective

25  for a period of 5 years after the date of filing.

26        (2) Except as otherwise provided in subsections (5), (6),

27  and (7), an initial financing statement filed in connection with

 1  a manufactured-home transaction is effective for a period of 30

 2  years after the date of filing if it indicates that it is filed

 3  in connection with a manufactured-home transaction.

 4        (3) The effectiveness of a filed financing statement lapses

 5  on the expiration of the period of its effectiveness unless

 6  before the lapse a continuation statement is filed pursuant to

 7  subsection (4). Upon lapse, a financing statement ceases to be

 8  effective and any security interest or agricultural lien that was

 9  perfected by the financing statement becomes unperfected, unless

10  the security interest is perfected otherwise. If the security

11  interest or agricultural lien becomes unperfected upon lapse, it

12  is deemed never to have been perfected as against a purchaser of

13  the collateral for value.

14        (4) A continuation statement may be filed only within 6

15  months before the expiration of the 5-year period specified in

16  subsection (1) or the 30-year period specified in subsection (2),

17  whichever is applicable.

18        (5) Except as otherwise provided in section 9510, upon

19  timely filing of a continuation statement, the effectiveness of

20  the initial financing statement continues for a period of 5 years

21  commencing on the day on which the financing statement would have

22  become ineffective in the absence of the filing. Upon the

23  expiration of the 5-year period, the financing statement lapses

24  in the same manner as provided in subsection (3), unless, before

25  the lapse, another continuation statement is filed pursuant to

26  subsection (4). Succeeding continuation statements may be filed

27  in the same manner to continue the effectiveness of the initial

 1  financing statement.

 2        (6) If a debtor is an organization identified as a

 3  transmitting utility and a filed initial financing statement so

 4  indicates, the financing statement is effective until a

 5  termination statement is filed. A financing statement that is

 6  filed before the effective date of the amendatory act that added

 7  this sentence March 29, 2009 is effective for a period of 5 years

 8  after the date of filing and shall not be continued under this

 9  section if the financing statement indicates either of the

10  following:

11        (a) That the debtor is an individual purporting to be a

12  transmitting utility.

13        (b) That the debtor is an individual showing his or her name

14  as an organization and purporting to be a transmitting utility.

15        (7) A record of a mortgage that is effective as a financing

16  statement filed as a fixture filing under section 9502(3) remains

17  effective as a financing statement filed as a fixture filing

18  until the mortgage is released or satisfied of record or its

19  effectiveness otherwise terminates as to the real property.

20        Sec. 9516. (1) Except as otherwise provided in subsection

21  (2), communication of a record to a filing office and tender of

22  the filing fee or acceptance of the record by the filing office

23  constitutes filing.

24        (2) Filing does not occur with respect to a record that a

25  filing office refuses to accept because of 1 or more of the

26  following:

27        (a) The record is not communicated by a method or medium of

 1  communication authorized by the filing office.

 2        (b) An amount equal to or greater than the applicable filing

 3  fee is not tendered.

 4        (c) The filing office is unable to index the record because

 5  of 1 or more of the following:

 6        (i) In the case of an initial financing statement, the record

 7  does not provide a name for the debtor.

 8        (ii) In the case of an amendment or correction information

 9  statement, the record does not identify the initial financing

10  statement as required by section 9512 or 9518, as applicable, or

11  identifies an initial financing statement whose effectiveness has

12  lapsed under section 9515.

13        (iii) In the case of an initial financing statement that

14  provides the name of a debtor identified as an individual or an

15  amendment that provides a name of a debtor identified as an

16  individual that was not previously provided in the financing

17  statement to which the record relates, the record does not

18  identify the debtor's last name.surname.

19        (iv) In the case of a record filed or recorded in the filing

20  office described in section 9501(1)(a), the record does not

21  provide a sufficient description of the real property to which it

22  relates.

23        (d) In the case of an initial financing statement or an

24  amendment that adds a secured party of record, the record does

25  not provide a name and mailing address for the secured party of

26  record.

27        (e) In the case of an initial financing statement or an

 1  amendment that provides a name of a debtor which was not

 2  previously provided in the financing statement to which the

 3  amendment relates, the record does not provide or indicate 1 or

 4  more of the following:

 5        (i) Provide a mailing address for the debtor.

 6        (ii) Indicate whether the debtor is name provided as the name

 7  of the debtor is the name of an individual or an organization.

 8        (iii) If the financing statement indicates that the debtor is

 9  an organization, provide 1 or more of the following:

10        (A) A type of organization for the debtor.

11        (B) A jurisdiction of organization for the debtor.

12        (C) An organizational identification number for the debtor

13  or indicate that the debtor has none.

14        (f) In the case of an assignment reflected in an initial

15  financing statement under section 9514(1) or an amendment filed

16  under section 9514(2), the record does not provide a name and

17  mailing address for the assignee.

18        (g) In the case of a continuation statement, the record is

19  not filed within the 6-month period prescribed by section

20  9515(4).

21        (3) For purposes of subsection (2), both of the following

22  apply:

23        (a) A record does not provide information if the filing

24  office is unable to read or decipher the information.

25        (b) A record that does not indicate that it is an amendment

26  or identify an initial financing statement to which it relates,

27  as required by section 9512, 9514, or 9518, is an initial

 1  financing statement.

 2        (4) A record that is communicated to the filing office with

 3  tender of the filing fee, but which the filing office refuses to

 4  accept for a reason other than one set forth in subsection (2) or

 5  section 9520(5), is effective as a filed record except as against

 6  a purchaser of the collateral which gives value in reasonable

 7  reliance upon the absence of the record from the files.

 8        Sec. 9518. (1) A person may file in the filing office a

 9  correction an information statement with respect to a record

10  indexed there under the person's name if the person believes that

11  the record is inaccurate or was wrongfully filed.

12        (2) A correction An information statement under subsection

13  (1) must do all of the following:

14        (a) Identify the record to which it relates by both of the

15  following:

16        (i) The file number assigned to the initial financing

17  statement to which the record relates.

18        (ii) If the correction information statement relates to a

19  record filed or recorded in a filing office described in section

20  9501(1)(a), the date that the initial financing statement was

21  filed or recorded and the information specified in section

22  9502(2).

23        (b) Indicate that it is a correction an information

24  statement.

25        (c) Provide the basis for the person's belief that the

26  record is inaccurate and indicate the manner in which the person

27  believes the record should be amended to cure any inaccuracy or

 1  provide the basis for the person's belief that the record was

 2  wrongfully filed.

 3        (3) A person may file in the filing office an information

 4  statement with respect to a record filed there if the person is a

 5  secured party of record with respect to the financing statement

 6  to which the record relates and believes that the person that

 7  filed the record was not entitled to do so under section 9509(4).

 8        (4) An information statement under subsection (3) must do

 9  all of the following:

10        (a) Identify the record to which it relates by both of the

11  following:

12        (i) The file number assigned to the initial financing

13  statement to which the record relates.

14        (ii) If the information statement relates to a record filed

15  or recorded in a filing office described in section 9501(1)(a),

16  the date and time that the initial financing statement was filed

17  or recorded and the information specified in section 9502(2).

18        (b) Indicate that it is an information statement.

19        (c) Provide the basis for the person's belief that the

20  person that filed the record was not entitled to do so under

21  section 9509(4).

22  (5) (3) The filing of a correction an information statement

23  does not affect the effectiveness of an initial financing

24  statement or other filed record.

25        Sec. 9521. (1) A filing office that accepts written records

26  for filing shall not refuse to accept a written initial financing

27  statement that conforms to the current format prescribed by the

 1  national conference of commissioners on uniform state laws, in

 2  the following form and format except for a reason set forth in

 3  section 9516(2) or 9520(5): .

4  UCC FINANCING STATEMENT

5  FOLLOW INSTRUCTIONS

6  A. NAME & PHONE OF CONTACT AT FILER (optional)

7      _______________________________________________________________

8  B. E-MAIL CONTACT AT FILER (optional)

9      _______________________________________________________________

10 C. SEND ACKNOWLEDGMENT TO: (Name and Address)

11     _______________________________________________________________

12                                           THE ABOVE SPACE IS FOR

13                                           FILING OFFICE USE ONLY

14 1. DEBTOR'S NAME – provide only one Debtor name (1a or 1b)

15     (use exact, full name; do not omit, modify, or abbreviate any

16     word in the Debtor's name)

17     1a. ORGANIZATION'S NAME

18     _______________________________________________________________

19 OR

20     1b. INDIVIDUAL'S SURNAME         FIRST PERSONAL NAME

21     ______________________________   ______________________________

22     ADDITIONAL NAME(S)/INITIAL(S) THAT ARE PART OF THE NAME

23     OF THIS DEBTOR                                       SUFFIX

24     __________________________________________________   __________

25     1c. MAILING ADDRESS

26     _______________________________________________________________

27     CITY                       STATE     POSTAL CODE     COUNTRY

28     ________________________   _______   _____________   __________

29 2. DEBTOR'S NAME – provide only one Debtor name (2a or 2b)

30     (use exact, full name; do not omit, modify, or abbreviate any

31     word in the Debtor's name)

32     2a. ORGANIZATION'S NAME

1      _______________________________________________________________

2  OR

3      2b. INDIVIDUAL'S SURNAME         FIRST PERSONAL NAME

4      ______________________________   ______________________________

5      ADDITIONAL NAME(S)/INITIAL(S) THAT ARE PART OF THE NAME

6      OF THIS DEBTOR                                       SUFFIX

7      __________________________________________________   __________

8      2c. MAILING ADDRESS

9      _______________________________________________________________

10     CITY                       STATE     POSTAL CODE     COUNTRY

11     ________________________   _______   _____________   __________

12 3. SECURED PARTY'S NAME (or NAME of ASSIGNEE of ASSIGNOR SECURED

13     PARTY) – provide only one Secured Party name (3a or 3b)

14     3a. ORGANIZATION'S NAME

15     _______________________________________________________________

16 OR

17     3b. INDIVIDUAL'S SURNAME         FIRST PERSONAL NAME

18     ______________________________   ______________________________

19     ADDITIONAL NAME(S)/INITIAL(S)                        SUFFIX

20     __________________________________________________   __________

21     3c. MAILING ADDRESS

22     _______________________________________________________________

23     CITY                       STATE     POSTAL CODE     COUNTRY

24     ________________________   _______   _____________   __________

25 4. COLLATERAL: This financing statement covers the following

26     collateral:

27     _______________________________________________________________

28 5. Check only if applicable and check only one box:

29     Collateral is  [ ] held in a Trust (see Instructions)

30                    [ ] being administered by a Decedent's Personal

31                        Representative.

32 6a. Check only if applicable and check only one box:

33     [ ] Public-Finance Transaction  [ ] Manufactured-Home Transaction

34     [ ] A Debtor is a Transmitting Utility

1  6b. Check only if applicable and check only one box:

2      [ ] Agricultural Lien  [ ] Non-UCC Filing

3  7. ALTERNATIVE DESIGNATION (if applicable):

4      [ ] Lessee/Lessor  [ ] Consignee/Consignor  [ ] Seller/Buyer

5      [ ] Bailee/Bailor  [ ] Licensee/Licensor

6  8. OPTIONAL FILER REFERENCE DATA

7      _______________________________________________________________

8                  [UCC FINANCING STATEMENT (Form UCC1)]

9  UCC FINANCING STATEMENT ADDENDUM

10 FOLLOW INSTRUCTIONS

11 9. NAME OF FIRST DEBTOR (same as item 1a or 1b on Financing

12     Statement)

13     9a. ORGANIZATION'S NAME

14     _______________________________________________________________

15 OR

16     9b. INDIVIDUAL'S SURNAME

17     _______________________________________________________________

18     FIRST PERSONAL NAME

19     _______________________________________________________________

20     ADDITIONAL NAME(S)/INITIAL(S)                        SUFFIX

21     __________________________________________________   __________

22                                           THE ABOVE SPACE IS FOR

23                                           FILING OFFICE USE ONLY

24 10. ADDITIONAL DEBTOR'S NAME – provide only one Debtor name

25     (10a or 10b) (use exact, full name; do not omit, modify, or

26     abbreviate any word in the Debtor's name)

27     10a. ORGANIZATION'S NAME

28     _______________________________________________________________

29 OR

30     10b. INDIVIDUAL'S SURNAME        FIRST PERSONAL NAME

31     ______________________________   ______________________________

32     ADDITIONAL NAME(S)/INITIAL(S) THAT ARE PART OF THE NAME

33     OF THIS DEBTOR                                       SUFFIX

34     __________________________________________________   __________

1      10c. MAILING ADDRESS

2      _______________________________________________________________

3      CITY                       STATE     POSTAL CODE     COUNTRY

4      ________________________   _______   _____________   __________

5  11. [ ] ADDITIONAL SECURED PARTY'S NAME or [ ] ASSIGNOR SECURED

6      PARTY'S NAME – provide only one name (11a or 11b)

7      11a. ORGANIZATION'S NAME

8      _______________________________________________________________

9  OR

10     11b. INDIVIDUAL'S SURNAME        FIRST PERSONAL NAME

11     ______________________________   ______________________________

12     ADDITIONAL NAME(S)/INITIAL(S)                        SUFFIX

13     __________________________________________________   __________

14     11c. MAILING ADDRESS

15     _______________________________________________________________

16     CITY                       STATE     POSTAL CODE     COUNTRY

17     ________________________   _______   _____________   __________

18 12. ADDITIONAL SPACE FOR ITEM 4 (Collateral)

19     _______________________________________________________________

20 13. [ ] This FINANCING STATEMENT is to be filed [for record]

21     (or recorded) in the REAL ESTATE RECORDS (if applicable)

22 14. This FINANCING STATEMENT:

23     [ ] covers timber to be cut  [ ]covers as-extracted collateral

24     [ ] is filed as a fixture filing

25 15. Name and address of a RECORD OWNER of real estate described in

26     item 16 (if Debtor does not have a record interest):

27     _______________________________________________________________

28 16. Description of real estate:

29     _______________________________________________________________

30 17. MISCELLANEOUS:

31     _______________________________________________________________

32           [UCC FINANCING STATEMENT ADDENDUM (Form UCC1Ad)]

 1        (2) A filing office that accepts written records for filing

 2  shall not refuse to accept a written financing statement

 3  amendment on a form that conforms to the current format

 4  prescribed by the national conference of commissioners on uniform

 5  state laws, record in the following form and format except for a

 6  reason set forth in section 9516(2) or 9520(5): .

7  UCC FINANCING STATEMENT AMENDMENT

8  FOLLOW INSTRUCTIONS

9  A. NAME & PHONE OF CONTACT AT FILER (optional)

10     _______________________________________________________________

11 B. E-MAIL CONTACT AT FILER (optional)

12     _______________________________________________________________

13 C. SEND ACKNOWLEDGMENT TO: (Name and Address)

14     _______________________________________________________________

15                                           THE ABOVE SPACE IS FOR

16                                           FILING OFFICE USE ONLY

17     1a. INITIAL FINANCING STATEMENT FILE NUMBER

18     _______________________________________________________________

19     1b. [ ] This FINANCING STATEMENT AMENDMENT is to be filed

20         [for record] (or recorded) in the REAL ESTATE RECORDS.

21         Filer: attach  Amendment Addendum (Form UCC3Ad) and

22         provide Debtor's name in item 13.

23 2. [ ] TERMINATION: Effectiveness of the Financing Statement

24     identified above is terminated with respect to security

25     interest(s) of Secured Party authorizing this Termination

26     Statement

27 3. [ ] ASSIGNMENT (full or partial): Provide name of Assignee in

28     item 7a or 7b, and address of Assignee in item 7c and name of

29     Assignor in item 9. For partial assignment, complete items

30     7 and 9 and also indicate affected collateral in item 8

31 4. [ ] CONTINUATION: Effectiveness of the Financing Statement

32     identified above with respect to the security interest(s) of

33     Secured Party authorizing this Continuation Statement is

34     continued for the additional period provided by applicable law

35 5. [ ] PARTY INFORMATION CHANGE:

1      Check one of these two boxes:

2      This Change affects [ ] Debtor  or  [ ]Secured Party of record.

3      AND

4      Check one of these three boxes to:

5      [ ] CHANGE name and/or address: Complete item 6a or 6b,

6      and item 7a or 7b and item 7c.

7      [ ] ADD name: Complete item 7a or 7b, and item 7c.

8      [ ] DELETE name: Give record name to be deleted in item 6a or 6b.

9  6. CURRENT RECORD INFORMATION: Complete for Party Information

10     Change – provide only one name (6a or 6b) (use exact, full name;

11     do not omit, modify, or abbreviate any word in the Debtor's name)

12     6a. ORGANIZATION'S NAME

13     _______________________________________________________________

14 OR

15     6b. INDIVIDUAL'S SURNAME         FIRST PERSONAL NAME

16     ______________________________   ______________________________

17     ADDITIONAL NAME(S)/INITIAL(S)                        SUFFIX

18     __________________________________________________   __________

19 7. CHANGED OR ADDED INFORMATION: Complete for Assignment or Party

20     Information Change – provide only one name (7a or 7b) (use exact

21     full name; do not omit, modify, or abbreviate any word in the

22     Debtor's name)

23     7a. ORGANIZATION'S NAME

24     _______________________________________________________________

25 OR

26     7b. INDIVIDUAL'S SURNAME         FIRST PERSONAL NAME

27     ______________________________   ______________________________

28     ADDITIONAL NAME(S)/INITIAL(S) THAT ARE PART OF THE NAME

29     OF THIS DEBTOR                                       SUFFIX

30     __________________________________________________   __________

31     7c. MAILING ADDRESS

32     _______________________________________________________________

33     CITY                       STATE     POSTAL CODE     COUNTRY

34     ________________________   _______   _____________   __________

35 8. [ ] COLLATERAL CHANGE:

36     Also check one of these four boxes:

37     [ ] ADD collateral  [ ] DELETE collateral

38     [ ]RESTATE covered collateral  [ ] ASSIGN collateral

39     Indicate collateral:

1  9. NAME OF SECURED PARTY OF RECORD AUTHORIZING THIS AMENDMENT -

2      Provide only one name (9a or 9b) (name of Assignor, if this

3      is an Assignment)

4      If this is an Amendment authorized by a DEBTOR, check here

5      [ ] and provide name of authorizing Debtor

6      9a. ORGANIZATION'S NAME

7      _______________________________________________________________

8  OR

9      9b. INDIVIDUAL'S SURNAME         FIRST PERSONAL NAME

10     ______________________________   ______________________________

11     ADDITIONAL NAME(S)/INITIAL(S)                        SUFFIX

12     __________________________________________________   __________

13 10. OPTIONAL FILE REFERENCE DATA

14     _______________________________________________________________

15            [UCC FINANCING STATEMENT AMENDMENT (Form UCC3)]

16 UCC FINANCING STATEMENT AMENDMENT ADDENDUM

17 FOLLOW INSTRUCTIONS

18 11. INITIAL FINANCING STATEMENT FILE NUMBER (same as item 1a on

19     Amendment form)

20     _______________________________________________________________

21 12. NAME OF PARTY AUTHORIZING THIS AMENDMENT (same as item 9 on

22     Amendment form)

23     12a. ORGANIZATION'S NAME

24     _______________________________________________________________

25 OR

26     12b. INDIVIDUAL'S SURNAME        FIRST PERSONAL NAME

27     ______________________________   ______________________________

28     ADDITIONAL NAME(S)/INITIAL(S)                        SUFFIX

29     __________________________________________________   __________

30                                           THE ABOVE SPACE IS FOR

31                                           FILING OFFICE USE ONLY

32 13. Name of DEBTOR on related financing statement (Name of a current

33     Debtor of record required for indexing purposes only in some

34     filing offices – see Instruction for item 13 – insert only one

35     Debtor name (13a or 13b) (use exact, full name; do not omit,

1      modify, or abbreviate any word in the Debtor's name)

2      13a. ORGANIZATION'S NAME

3      _______________________________________________________________

4  OR

5      13b. INDIVIDUAL'S SURNAME        FIRST PERSONAL NAME

6      ______________________________   ______________________________

7      ADDITIONAL NAME(S)/INITIAL(S)                        SUFFIX

8      __________________________________________________   __________

9  14. ADDITIONAL SPACE FOR ITEM 8 (Collateral)

10     _______________________________________________________________

11 15. This FINANCING STATEMENT AMENDMENT: [ ] covers timber to be cut

12     [ ] covers as-extracted collateral

13     [ ] is filed as a fixture filing

14 16. Name and address of a RECORD OWNER of real estate described in

15     item 17 (if Debtor does not have a record interest):

16     _______________________________________________________________

17 17. Description of real estate

18     _______________________________________________________________

19 18. MISCELLANEOUS:

20     _______________________________________________________________

21       [UCC FINANCING STATEMENT AMENDMENT ADDENDUM (Form UCC3Ad)]

22        Sec. 9607. (1) If so agreed, and in any event after default,

23  a secured party may do 1 or more of the following:

24        (a) Notify an account debtor or other person obligated on

25  collateral to make payment or otherwise render performance to or

26  for the benefit of the secured party.

27        (b) Take any proceeds to which the secured party is entitled

28  under section 9315.

29        (c) Enforce the obligations of an account debtor or other

30  person obligated on collateral and exercise the rights of the

31  debtor with respect to the obligation of the account debtor or

 1  other person obligated on collateral to make payment or otherwise

 2  render performance to the debtor, and with respect to any

 3  property that secures the obligations of the account debtor or

 4  other person obligated on the collateral.

 5        (d) If it holds a security interest in a deposit account

 6  perfected by control under section 9104(1)(a), apply the balance

 7  of the deposit account to the obligation secured by the deposit

 8  account.

 9        (e) If it holds a security interest in a deposit account

10  perfected by control under section 9104(1)(b) or (c), instruct

11  the bank to pay the balance of the deposit account to or for the

12  benefit of the secured party.

13        (2) If necessary to enable a secured party to exercise under

14  subsection (1)(c) the right of a debtor to enforce a mortgage

15  nonjudicially, the secured party may record both of the following

16  in the office in which a record of the mortgage is recorded:

17        (a) A copy of the security agreement that creates or

18  provides for a security interest in the obligation secured by the

19  mortgage.

20        (b) The secured party's sworn affidavit in recordable form

21  stating that both of the following:

22        (i) That a default has occurred and the with respect to the

23  obligation secured by the mortgage.

24        (ii) That the secured party is entitled to enforce the

25  mortgage nonjudicially.

26        (3) A secured party shall proceed in a commercially

27  reasonable manner if the secured party meets both of the

 1  following:

 2        (a) Undertakes to collect from or enforce an obligation of

 3  an account debtor or other person obligated on collateral.

 4        (b) Is entitled to charge back uncollected collateral or

 5  otherwise to full or limited recourse against the debtor or a

 6  secondary obligor.

 7        (4) A secured party may deduct from the collections made

 8  pursuant to subsection (3) reasonable expenses of collection and

 9  enforcement, including reasonable attorney fees and legal

10  expenses incurred by the secured party.

11        (5) This section does not determine whether an account

12  debtor, bank, or other person obligated on collateral owes a duty

13  to a secured party.

14                              PART 8

15            TRANSITION PROVISIONS FOR 2010 AMENDMENTS

16        Sec. 9801. As used in this part:

17        (a) "Pre‑effective‑date financing statement" means a

18  financing statement filed before the effective date of this

19  amendatory act.

20        (b) "This amendatory act" means the amendatory act that

21  added this part.

22        (c) "This amended article" means this article as amended by

23  this amendatory act.

24        Sec. 9802. (1) Except as otherwise provided in this part,

25  this amendatory act applies to a transaction or lien within its

26  scope, even if the transaction or lien was entered into or

27  created before the effective date of this amendatory act.

 1        (2) This amendatory act does not affect an action, case, or

 2  proceeding commenced before the effective date of this amendatory

 3  act.

 4        Sec. 9803. (1) A security interest that is a perfected

 5  security interest immediately before the effective date of this

 6  amendatory act is a perfected security interest under this

 7  amended article if, on the effective date of this amendatory act,

 8  the applicable requirements for attachment and perfection under

 9  this amended article are satisfied without further action.

10        (2) Except as otherwise provided in section 9805, if,

11  immediately before the effective date of this amendatory act, a

12  security interest is a perfected security interest, but the

13  applicable requirements for perfection under this amended article

14  are not satisfied on the effective date of this amendatory act,

15  the security interest remains perfected thereafter only if the

16  applicable requirements for perfection under this amended article

17  are satisfied within 1 year after the effective date of this

18  amendatory act.

19        Sec. 9804. A security interest that is an unperfected

20  security interest immediately before the effective date of this

21  amendatory act becomes a perfected security interest when either

22  of the following occurs:

23        (a) Without further action, on the effective date of this

24  amendatory act if the applicable requirements for perfection

25  under this amended article are satisfied before or at that time.

26        (b) When the applicable requirements for perfection are

27  satisfied if the requirements are satisfied after the effective

 1  date of this amendatory act.

 2        Sec. 9805. (1) The filing of a financing statement before

 3  the effective date of this amendatory act is effective to perfect

 4  a security interest to the extent that the filing would satisfy

 5  the applicable requirements for perfection under this amended

 6  article.

 7        (2) This amendatory act does not render ineffective an

 8  effective financing statement that is filed before the effective

 9  date of this amendatory act and satisfies the applicable

10  requirements for perfection under the law of the jurisdiction

11  governing perfection as provided in this article as it existed

12  before the effective date of this amendatory act. However, except

13  as otherwise provided in subsections (3) and (4) and section

14  9806, the financing statement ceases to be effective at 1 of the

15  following times, as applicable:

16        (a) If the financing statement is filed in this state, at

17  the time the financing statement would have ceased to be

18  effective had this amendatory act not taken effect.

19        (b) If the financing statement is filed in another

20  jurisdiction, at the earlier of the following:

21        (i) The time the financing statement would have ceased to be

22  effective under the law of that jurisdiction.

23        (ii) June 30, 2018.

24        (3) The filing of a continuation statement after the

25  effective date of this amendatory act does not continue the

26  effectiveness of a financing statement filed before the effective

27  date of this amendatory act. However, upon the timely filing of a

 1  continuation statement after the effective date of this

 2  amendatory act and in accordance with the law of the jurisdiction

 3  governing perfection as provided in this amended article, the

 4  effectiveness of a financing statement filed in the same office

 5  in that jurisdiction before the effective date of this amendatory

 6  act continues for the period provided by the law of that

 7  jurisdiction.

 8        (4) Subsection (2)(b)(ii) applies to a financing statement

 9  that is filed before the effective date of this amendatory act

10  against a transmitting utility and satisfies the applicable

11  requirements for perfection under the law of the jurisdiction

12  governing perfection as provided in this article before the

13  effective date of this amendatory act, only to the extent that

14  this amended article provides that the law of a jurisdiction

15  other than the jurisdiction in which the financing statement is

16  filed governs perfection of a security interest in collateral

17  covered by the financing statement.

18        (5) A financing statement that includes a financing

19  statement filed before the effective date of this amendatory act

20  and a continuation statement filed after the effective date of

21  this amendatory act is effective only to the extent that it

22  satisfies the requirements of part 5 as amended by this

23  amendatory act for an initial financing statement. A financing

24  statement that indicates that the debtor is a decedent's estate

25  indicates that the collateral is being administered by a personal

26  representative within the meaning of section 9503(1)(b) as

27  amended by this amendatory act. A financing statement that

 1  indicates that the debtor is a trust or is a trustee acting with

 2  respect to property held in trust indicates that the collateral

 3  is held in a trust within the meaning of section 9503(1)(c) as

 4  amended by this amendatory act.

 5        Sec. 9806. (1) The filing of an initial financing statement

 6  in the office specified in section 9501 continues the

 7  effectiveness of a pre‑effective‑date financing statement if all

 8  of the following are met:

 9        (a) The filing of an initial financing statement in that

10  office would be effective to perfect a security interest under

11  this amended article.

12        (b) The pre‑effective‑date financing statement was filed in

13  an office in another state.

14        (c) The initial financing statement satisfies subsection

15  (3).

16        (2) The filing of an initial financing statement under

17  subsection (1) continues the effectiveness of the

18  pre‑effective‑date financing statement for 1 of the following

19  periods:

20        (a) If the initial financing statement is filed before the

21  effective date of this amendatory act, for the period provided in

22  section 9515 as it existed before the effective date of this

23  amendatory act with respect to an initial financing statement.

24        (b) If the initial financing statement is filed after the

25  effective date of this amendatory act, for the period provided in

26  section 9515 as amended by this amendatory act with respect to an

27  initial financing statement.

 1        (3) To be effective for purposes of subsection (1), an

 2  initial financing statement must do all of the following:

 3        (a) Satisfy the requirements of part 5 as amended by this

 4  amendatory act for an initial financing statement.

 5        (b) Identify the pre‑effective‑date financing statement by

 6  indicating the office in which the financing statement was filed

 7  and providing the dates of filing and file numbers, if any, of

 8  the financing statement and of the most recent continuation

 9  statement filed with respect to the financing statement.

10        (c) Indicate that the pre‑effective‑date financing statement

11  remains effective.

12        Sec. 9807. (1) After the effective date of this amendatory

13  act, a person may add or delete collateral covered by, continue

14  or terminate the effectiveness of, or otherwise amend the

15  information provided in, a pre‑effective‑date financing statement

16  only in accordance with the law of the jurisdiction governing

17  perfection as provided in this amended article. However, the

18  effectiveness of a pre‑effective‑date financing statement also

19  may be terminated in accordance with the law of the jurisdiction

20  in which the financing statement is filed.

21        (2) Except as otherwise provided in subsection (3), if the

22  law of this state governs perfection of a security interest, the

23  information in a pre‑effective‑date financing statement may be

24  amended after the effective date of this amendatory act only if 1

25  of the following is met:

26        (a) The pre‑effective‑date financing statement and an

27  amendment are filed in the office specified in section 9501.

 1        (b) An amendment is filed in the office specified in section

 2  9501 concurrently with, or after the filing in that office of, an

 3  initial financing statement that satisfies section 9806(3).

 4        (c) An initial financing statement that provides the

 5  information as amended and satisfies section 9806(3) is filed in

 6  the office specified in section 9501.

 7        (3) If the law of this state governs perfection of a

 8  security interest, the effectiveness of a pre‑effective‑date

 9  financing statement may be continued only under section 9805(3)

10  and (5) or 9806.

11        (4) Whether or not the law of this state governs perfection

12  of a security interest, the effectiveness of a pre‑effective‑date

13  financing statement filed in this state may be terminated after

14  the effective date of this amendatory act by filing a termination

15  statement in the office in which the pre‑effective‑date financing

16  statement is filed, unless an initial financing statement that

17  satisfies section 9806(3) has been filed in the office specified

18  by the law of the jurisdiction governing perfection as provided

19  in this amended article as the office in which to file a

20  financing statement.

21        Sec. 9808. A person may file an initial financing statement

22  or a continuation statement under this part if all of the

23  following are met:

24        (a) The secured party of record authorizes the filing.

25        (b) The filing is necessary under this part to do any of the

26  following:

27        (i) To continue the effectiveness of a financing statement

 1  filed before the effective date of this amendatory act.

 2        (ii) To perfect or continue the perfection of a security

 3  interest.

 4        Sec. 9809. This amendatory act determines the priority of

 5  conflicting claims to collateral. However, if the relative

 6  priorities of the claims were established before the effective

 7  date of this amendatory act, this article as it existed before

 8  the effective date of this amendatory act determines priority.

 9        Enacting section 1. Article 11 of the uniform commercial

10  code, 1962 PA 174, MCL 440.11101 to 440.11102, is repealed.

11        Enacting section 2. This amendatory act takes effect July 1,

12  2013.