(B) This chapter uses the numbering system of the national conference of commissioners on uniform state laws. The digits to the right of the decimal point are sequential and not supplemental to any preceding Revised Code section.

Effective Date: 07-01-2001

1309.102 Definitions and index of definitions - UCC 9-102.

(A) As used in this chapter, unless the context requires otherwise:

(1) “Accession” means goods that are physically united with other goods in such a manner that the identity of the original goods is not lost.

(2)(a) “Account,” except as used in “account for,” means a right to payment of a monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance operated or sponsored by a state, governmental unit of a state, or person licensed or authorized to operate the game by a state or governmental unit of a state.

(b) “Account” includes health-care insurance receivables.

(c) “Account” does not include (i) rights to payment evidenced by chattel paper or an instrument, (ii) commercial tort claims, (iii) deposit accounts, (iv) investment property, (v) letter-of-credit rights or letters of credit, or (vi) rights to payment for money or funds advanced or sold, other than rights arising out of the use of a credit or charge card or information contained on or for use with the card.

(3) “Account debtor” means a person who is obligated on an account, chattel paper, or general intangible. “Account debtor” does not include a person who is obligated to pay a negotiable instrument, even if the instrument constitutes part of chattel paper.

(4) “Accounting,” except as used in “accounting for,” means a record:

(a) Authenticated by a secured party;

(b) Indicating the aggregate unpaid secured obligations as of a date not more than thirty-five days earlier or thirty-five days later than the date of the record; and

(5) “Agricultural lien” means an interest, other than a security interest, in farm products:

(a) That secures payment or performance of an obligation for:

(i) Goods or services furnished in connection with a debtor’s farming operation; or

(ii) Rent on real property leased by a debtor in connection with its farming operation.

(b) That is created by statute in favor of a person who:

(i) In the ordinary course of business, furnished goods or services to a debtor in connection with the debtor’s farming operation; or

(ii) Leased real property to a debtor in connection with the debtor’s farming operation; and

(6) “As-extracted collateral” means:

(a) Oil, gas, or other minerals that are subject to a security interest that:

(i) Is created by a debtor having an interest in the minerals before extraction; and

(ii) Attaches to the minerals as extracted; or

(b) Accounts arising out of the sale at the wellhead or minehead of oil, gas, or other minerals in which the debtor had an interest before extraction.

(7) “Authenticate” means:

(a) To sign; or

(b) To execute or otherwise adopt a symbol, or encrypt or similarly process a record in whole or in part, with the present intent of the authenticating person to identify the person and adopt or accept a record.

(8) “Bank” means an organization that is engaged in the business of banking. “Bank” includes savings banks, savings and loan associations, credit unions, and trust companies.

(9) “Cash proceeds” means proceeds that are money, checks, deposit accounts, or the like.

(10) “Certificate of title” means a certificate of title with respect to which a statute provides for the security interest in question to be indicated on the certificate as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the collateral.

(11)(a) “Chattel paper” means a record that evidences both a monetary obligation and a security interest in specific goods, a security interest in specific goods and software used in the goods, a security interest in specific goods and license of software used in the goods, a lease of specific goods, or a lease of specific goods and license of software used in the goods.

As used in division (A)(11)(a) of this section, “monetary obligation” means a monetary obligation secured by the goods or owed under a lease of the goods and includes a monetary obligation with respect to software used in the goods.

(b) If a transaction is evidenced by records that include an instrument or series of instruments, the group of records taken together constitutes chattel paper.

(c) “Chattel paper” does not include (i) charters or other contracts involving the use or hire of a vessel or (ii) records that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card.

(12) “Collateral” means the property subject to a security interest or agricultural lien, including:

(a) Proceeds to which a security interest attaches;

(b) Accounts, chattel paper, payment intangibles, and promissory notes that have been sold; and

(13) “Commercial tort claim” means a claim arising in tort with respect to which:

(a) The claimant is an organization; or

(b) The claimant is an individual, and the claim:

(i) Arose in the course of the claimant’s business or profession; and

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

(14) “Commodity account” means an account maintained by a commodity intermediary in which a commodity contract is carried for a commodity customer.

(15) “Commodity contract” means a commodity futures contract, an option on a commodity futures contract, a commodity option, or another contract if the contract or option is:

(a) Traded on or subject to the rules of a board of trade that has been designated as a contract market for such a contract pursuant to the federal commodities laws; or

(b) Traded on a foreign commodity board of trade, exchange, or market and is carried on the books of a commodity intermediary for a commodity customer.

(16) “Commodity customer” means a person for whom a commodity intermediary carries a commodity contract on its books.

(17) “Commodity intermediary” means a person that:

(a) Is registered as a futures commission merchant under the federal commodities laws; or

(b) In the ordinary course of its business provides clearance or settlement services for a board of trade that has been designated as a contract market pursuant to the federal commodities laws.

(18) “Communicate” means:

(a) To send a written or other tangible record;

(b) To transmit a record by any means agreed upon by the persons sending and receiving the record; or

(c) In the case of transmission of a record to or by a filing office, to transmit a record by any means prescribed by filing-office rule.

(19) “Consignee” means a merchant to whom goods are delivered in a consignment.

(20) “Consignment” means a transaction, regardless of its form, in which a person delivers goods to a merchant for the purpose of sale and:

(a) The merchant:

(i) Deals in goods of that kind under a name other than the name of the person making delivery;

(ii) Is not an auctioneer; and

(iii) Is not generally known by its creditors to be substantially engaged in selling the goods of others;

(b) With respect to each delivery, the aggregate value of the goods is one thousand dollars or more at the time of delivery.

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

(21) “Consignor” means a person that delivers goods to a consignee in a consignment.

(22) “Consumer debtor” means a debtor in a consumer transaction.

(23) “Consumer goods” means goods that are used or bought for use primarily for personal, family, or household purposes.

(24) “Consumer-goods transaction” means a consumer transaction in which:

(a) An individual incurs an obligation primarily for personal, family, or household purposes; and

(b) A security interest in consumer goods secures the obligation.

(25) “Consumer obligor” means an obligor who is an individual and who incurred the obligation as part of a transaction entered into primarily for personal, family, or household purposes.

(26) “Consumer transaction” means a transaction in which: (a) an individual incurs an obligation primarily for personal, family, or household purposes, (b) a security interest secures the obligation, and (c) the collateral is held or acquired primarily for personal, family, or household purposes. “Consumer transaction” includes consumer-goods transactions.

(27) “Continuation statement” means an amendment of a financing statement that:

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

(b) Indicates that it is a continuation statement for, or that it is filed to continue the effectiveness of, the identified financing statement.

(28) “Debtor” means:

(a) A person having an interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor;

(b) A seller of accounts, chattel paper, payment intangibles, or promissory notes; or

(29) “Deposit account” means a demand, time, savings, passbook, or similar account maintained with a bank but does not include investment property or accounts evidenced by an instrument.

(30) “Document” means a document of title or a receipt of the type described in division (B) of section 1307.06 of the Revised Code.

(31) “Electronic chattel paper” means chattel paper evidenced by a record consisting of information stored in an electronic medium.

(32) “Encumbrance” means a right, other than an ownership interest, in real property. “Encumbrance” includes mortgages and other liens on real property.

(33) “Equipment” means goods other than inventory, farm products, or consumer goods.

(34) “Farm products” means goods, other than standing timber, with respect to which the debtor is engaged in a farming operation and that are:

(a) Crops grown, growing, or to be grown, including:

(i) Crops produced on trees, vines, and bushes; and

(ii) Aquatic goods produced in aquacultural operations;

(b) Livestock, born or unborn, including aquatic goods produced in aquacultural operations;

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

(35) “Farming operation” means raising, cultivating, propagating, fattening, grazing, or any other farming, livestock, or aquacultural operation.

(36) “File number” means the number assigned to an initial financing statement under division (A) of section 1309.519 of the Revised Code.

(37) “Filing office” means an office designated in section 1309.501 of the Revised Code as the place to file a financing statement.

(38) “Filing-office rule” means a rule adopted under section 1309.526 of the Revised Code.

(39) “Financing statement” means a record composed of an initial financing statement and any filed record or records relating to the initial financing statement. For the purposes of this chapter, financing statements filed for recording with the secretary of state shall not be required to include social security or employer identification numbers.

(40) “Fixture filing” means the filing of a financing statement covering goods that are or are to become fixtures and satisfying divisions (A) and (B) of section 1309.502 of the Revised Code. “Fixture filing” includes the filing of a financing statement covering goods of a transmitting utility that are or are to become fixtures.

(41) “Fixtures” means goods that have become so related to particular real property that an interest in them arises under real property law.

(42) “General intangible” means any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter-of-credit rights, letters of credit, money, and oil, gas, or other minerals before extraction. “General intangible” includes payment intangibles and software.

(43) “Good faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing.

(44)(a) “Goods” means all things that are movable when a security interest attaches. “Goods” includes (i) fixtures, (ii) standing timber that is to be cut and removed under a conveyance or contract for sale, (iii) the unborn young of animals, (iv) crops grown, growing, or to be grown, even if the crops are produced on trees, vines, or bushes, and (v) manufactured homes.

(b) “Goods” also includes a computer program embedded in goods and any supporting information provided in connection with a transaction relating to the program if (i) the program is associated with the goods in such a manner that it customarily is considered part of the goods, or (ii) by becoming the owner of the goods, a person acquires a right to use the program in connection with the goods.

(c) “Goods” does not include a computer program embedded in goods that consist solely of the medium in which the program is embedded. “Goods” does not include accounts, chattel paper, commercial tort claims, deposit accounts, documents, general intangibles, instruments, investment property, letter-of-credit rights, letters of credit, money, or oil, gas, or other minerals before extraction.

(45) “Governmental unit” means a subdivision, agency, department, county, parish, municipal corporation, or other unit of the government of the United States, a state, or a foreign country. “Governmental unit” includes an organization having a separate corporate existence if the organization is eligible to issue debt on which interest is exempt from income taxation under the laws of the United States.

(46) “Health-care-insurance receivable” means an interest in or claim under a policy of insurance that is a right to payment of a monetary obligation for health-care goods or services provided.

(47)(a) “Instrument” means a negotiable instrument or any other writing that evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease, and is of a type that in ordinary course of business is transferred by delivery with any necessary indorsement or assignment.

(b) “Instrument” does not include (i) investment property, (ii) letters of credit, or (iii) writings that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card.

(48) “Inventory” means goods, other than farm products, that:

(a) Are leased by a person as lessor;

(b) Are held by a person for sale or lease or to be furnished under a contract of service;

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

(49) “Investment property” means a security, whether certificated or uncertificated, a security entitlement, a securities account, a commodity contract, or a commodity account.

(50) “Jurisdiction of organization,” with respect to a registered organization, means the jurisdiction under whose law the organization is organized.

(51) “Letter-of-credit right” means a right to payment or performance under a letter of credit, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance. “Letter-of-credit right” does not include the right of a beneficiary to demand payment or performance under a letter of credit.

(52) “Lien creditor” means:

(a) A creditor who has acquired a lien on the property involved by attachment, levy or the like;

(b) An assignee for benefit of creditors from the time of assignment;

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

(53) “Manufactured home” means a structure, transportable in one or more sections, that, in the traveling mode, is eight body feet or more in width or forty body feet or more in length, or, when erected on site, is three hundred twenty or more square feet, and that is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air conditioning, and electrical systems contained in the structure. “Manufactured home” includes any structure that meets all of the requirements of this paragraph except the size requirements and with respect to which the manufacturer voluntarily files a certification required by the United States secretary of housing and urban development and complies with the standards established under Title 42 of the United States Code.

(54) “Manufactured-home transaction” means a secured transaction:

(a) That creates a purchase-money security interest in a manufactured home, other than a manufactured home held as inventory; or

(b) In which a manufactured home, other than a manufactured home held as inventory, is the primary collateral.

(55) “Mortgage” means a consensual interest in real property, including fixtures, that secures payment or performance of an obligation.

(56) “New debtor” means a person that becomes bound as debtor under division (D) of section 1309.203 of the Revised Code by a security agreement previously entered into by another person.

(57)(a) “New value” means (i) money, (ii) money’s worth in property, services, or new credit, or (iii) release by a transferee of an interest in property previously transferred to the transferee.

(b) “New value” does not include an obligation substituted for another obligation.

(58) “Noncash proceeds” means proceeds other than cash proceeds.

(59)(a) “Obligor” means a person who, with respect to an obligation secured by a security interest in or an agricultural lien on the collateral, (i) owes payment or other performance of the obligation, (ii) has provided property other than the collateral to secure payment or other performance of the obligation, or (iii) is otherwise accountable in whole or in part for payment or other performance of the obligation.

(b) “Obligor” does not include issuers or nominated persons under a letter of credit.

(60) “Original debtor,” except as used in division (C) of section 1309.310 of the Revised Code, means a person who, as debtor, entered into a security agreement to which a new debtor has become bound under division (D) of section 1309.203 of the Revised Code.

(61) “Payment intangible” means a general intangible under which the account debtor’s principal obligation is a monetary obligation.

(62) “Person related to,” with respect to an individual, means:

(a) The spouse of the individual;

(b) A brother, brother-in-law, sister, or sister-in-law of the individual;

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

(63) “Person related to,” with respect to an organization, means:

(a) A person directly or indirectly controlling, controlled by, or under common control with the organization;

(b) An officer or director of, or a person performing similar functions with respect to, the organization;

(c) An officer or director of, or a person performing similar functions with respect to, a person described in division (A)(63)(a) of this section;

(d) The spouse of an individual described in division (A)(63)(a), (b), or (c) of this section; or

(e) An individual who is related by blood or marriage to an individual described in division (A)(63)(a), (b), (c), or (d) of this section and shares the same home with the individual.

(64) “Proceeds,” except as used in division (B) of section 1309.609 of the Revised Code, means the following property:

(a) Whatever is acquired upon the sale, lease, license, exchange, or other disposition of collateral;

(b) Whatever is collected on, or distributed on account of, collateral;

(d) To the extent of the value of collateral, claims arising out of the loss, nonconformity, or interference with the use of, defects or infringement of rights in, or damage to the collateral; or

(e) To the extent of the value of collateral and to the extent payable to the debtor or the secured party, insurance payable by reason of the loss or nonconformity of, defects or infringement of rights in, or damage to the collateral.

(65) “Promissory note” means an instrument that evidences a promise to pay a monetary obligation, does not evidence an order to pay, and does not contain an acknowledgment by a bank that the bank has received for deposit a sum of money or funds.

(66) “Proposal” means a record authenticated by a secured party that includes the terms on which the secured party is willing to accept collateral in full or partial satisfaction of the obligation it secures pursuant to sections 1309.620, 1309.621, and 1309.622 of the Revised Code.

(67) “Public-finance transaction” means a secured transaction in connection with which:

(a) Debt securities are issued;

(b) All or a portion of the securities issued have an initial stated maturity of at least twenty years; and

(c) The debtor, obligor, secured party, account debtor or other person obligated on collateral, assignor or assignee of a secured obligation, or assignor or assignee of a security interest is a state or a governmental unit of a state.

(68) “Pursuant to commitment,” with respect to an advance made or other value given by a secured party, means pursuant to the secured party’s obligation, whether or not a subsequent event of default or other event not within the secured party’s control has relieved or may relieve the secured party from its obligation.

(69) “Record,” except as used in “for record,” “of record,” “record or legal title,” and “record owner,” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(70) “Registered organization” means an organization organized solely under the law of a single state or the United States and as to which the state or the United States must maintain a public record showing the organization to have been organized.

(71) “Secondary obligor” means an obligor to the extent that:

(a) The obligor’s obligation is secondary; or

(b) The obligor has a right of recourse with respect to an obligation secured by collateral against the debtor, another obligor, or property of either.

(72) “Secured party” means:

(a) A person in whose favor a security interest is created or provided for under a security agreement, whether or not any obligation to be secured is outstanding;

(b) A person that holds an agricultural lien;

(d) A person to whom accounts, chattel paper, payment intangibles, or promissory notes have been sold;

(e) A trustee, indenture trustee, agent, collateral agent, or other representative in whose favor a security interest or agricultural lien is created or provided for; or

(f) A person who holds a security interest arising under section 1302.42, 1302.49, 1302.85, 1304.20, 1305.18, or 1310.54 of the Revised Code.

(73) “Security agreement” means an agreement that creates or provides for a security interest.

(74) “Send,” in connection with a record or notification, means:

(a) To deposit in the mail, deliver for transmission, or transmit by any other usual means of communication, with postage or cost of transmission provided for, addressed to any address reasonable under the circumstances; or

(b) To cause the record or notification to be received within the time that it would have been received if properly sent under division (A)(74)(a) of this section.

(75) “Software” means a computer program and any supporting information provided in connection with a transaction relating to the program. “Software” does not include a computer program that is included in the definition of goods.

(76) “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(77) “Supporting obligation” means a letter-of-credit right or secondary obligation that supports the payment or performance of an account, chattel paper, a document, a general intangible, an instrument, or investment property.

(78) “Tangible chattel paper” means chattel paper evidenced by a record consisting of information that is inscribed on a tangible medium.

(79) “Termination statement” means an amendment of a financing statement that:

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

(b) Indicates either that it is a termination statement or that the identified financing statement is no longer effective.

(80) “Transmitting utility” means a person primarily engaged in the business of:

(a) Operating a railroad, subway, street railway, or trolley bus;

(b) Transmitting communications electrically, electromagnetically, or by light;

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

(B) Other definitions applying to this chapter are:

(1) “Applicant” has the same meaning as in section 1305.01 of the Revised Code.

(2) “Beneficiary” has the same meaning as in section 1305.01 of the Revised Code.

(3) “Broker” has the same meaning as in section 1308.01 of the Revised Code.

(4) “Certificated security” has the same meaning as in section 1308.01 of the Revised Code.

(5) “Check” has the same meaning as in section 1303.03 of the Revised Code.

(6) “Clearing corporation” has the same meaning as in section 1308.01 of the Revised Code.

(7) “Contract for sale” has the same meaning as in section 1302.01 of the Revised Code.

(8) “Customer” has the same meaning as in section 1304.01 of the Revised Code.

(9) “Entitlement holder” has the same meaning as in section 1308.01 of the Revised Code.

(10) “Financial asset” has the same meaning as in section 1308.01 of the Revised Code.

(11) “Holder in due course” has the same meaning as in section 1303.32 of the Revised Code.

(12) “Issuer,” with respect to a letter of credit or letter-of-credit right, has the same meaning as in section 1305.01 of the Revised Code.

(13) “Issuer,” with respect to a security, has the same meaning as in section 1308.08 of the Revised Code.

(14) “Lease,” “lease agreement,” “lease contract,” “leasehold interest,” “lessee,” “lessee in ordinary course of business,” “lessor,” and “lessor’s residual interest” have the same meanings as in section 1310.01 of the Revised Code.

(15) “Letter of credit” has the same meaning as in section 1305.01 of the Revised Code.

(16) “Merchant” has the same meaning as in section 1302.01 of the Revised Code.

(17) “Negotiable instrument” has the same meaning as in section 1303.03 of the Revised Code.

(18) “Nominated person” has the same meaning as in section 1305.01 of the Revised Code.

(19) “Note” has the same meaning as in section 1303.03 of the Revised Code.

(20) “Proceeds of a letter of credit” has the same meaning as in section 1305.13 of the Revised Code.

(21) “Prove” has the same meaning as in section 1303.01 of the Revised Code.

(22) “Sale” has the same meaning as in division (A)(11) of section 1302.01 of the Revised Code.

(23) “Securities account” has the same meaning as in section 1308.51 of the Revised Code.

(24) “Securities intermediary,” “security,” “security certificate,” “security entitlement,” and “uncertificated security” have the same meanings as in section 1308.01 of the Revised Code.

(C) The terms and principles of construction and interpretations set forth in sections 1301.01 to 1301.14 of the Revised Code are applicable to this chapter.

Effective Date: 07-01-2001; 03-30-2006

1309.103 Purchase-money security interest - application of payments - burden of establishing - UCC 9-103.

(A) As used in this section:

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

(2) “Purchase-money obligation” means an obligation of an obligor incurred as all or part of the price of the collateral or for value given to enable the debtor to acquire rights in or the use of the collateral if the value is in fact so used.

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

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

(2) If the security interest is in inventory that is or was purchase-money collateral, also to the extent that the security interest secures a purchase-money obligation incurred with respect to other inventory in which the secured party holds or held a purchase-money security interest; and

(3) To the extent that the security interest secures a purchase-money obligation incurred with respect to software in which the secured party holds or held a purchase-money security interest.

(C) A security interest in software is a purchase-money security interest to the extent that the security interest also secures a purchase-money obligation incurred with respect to goods in which the secured party holds or held a purchase-money security interest if:

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

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

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

(E) In a transaction other than a consumer-goods transaction, if the extent to which a security interest is a purchase-money security interest depends on the application of a payment to a particular obligation, the payment must be applied:

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

(2) In the absence of the parties’ agreement to a reasonable method, in accordance with any intention of the obligor manifested at or before the time of payment; or

(3) In the absence of an agreement to a reasonable method and a timely manifestation of the obligor’s intention, in the following order:

(a) To obligations that are not secured;

(b) If more than one obligation is secured, to obligations secured by purchase-money security interests in the order in which those obligations were incurred.

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

(1) The purchase-money collateral also secures an obligation that is not a purchase-money obligation.

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

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

(G) In a transaction other than a consumer-goods transaction, a secured party claiming a purchase-money security interest has the burden of establishing the extent to which the security interest is a purchase-money security interest.

(H) The limitation in divisions (E), (F), and (G) of this section to transactions other than consumer-goods transactions is intended to leave to a court the determination of the proper rules in consumer-goods transactions. The court shall not infer from that limitation the nature of the proper rule in consumer-goods transactions and may continue to apply established approaches.

Effective Date: 07-01-2001

1309.104 Control of deposit account - UCC 9-104.

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

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

(2) The debtor, secured party, and bank have agreed in an authenticated record that the bank will comply with instructions originated by the secured party directing disposition of the funds in the deposit account without further consent by the debtor; or

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

(B) A secured party that has satisfied division (A) of this section has control of a deposit account, even if the debtor retains the right to direct the disposition of funds from the deposit account.

Effective Date: 07-01-2001

1309.105 Control of electronic chattel paper - UCC 9-105.

A secured party has control of electronic chattel paper if the record or records comprising the chattel paper are created, stored, and assigned in such a manner that:

(A) A single authoritative copy of the record or records exists that is unique, identifiable, and, except as otherwise provided in divisions (D), (E), and (F) of this section, unalterable;

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

(D) Copies or revisions that add or change an identified assignee of the authoritative copy may be made only with the participation of the secured party;

(E) Each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy; and

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

Effective Date: 07-01-2001

1309.106 Control of investment property - UCC 9-106.

(A) A person has control of a certificated security, uncertificated security, or security entitlement as provided in section 1308.24 of the Revised Code.

(B) A secured party has control over a commodity contract if:

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

(2) The commodity customer, secured party, and commodity intermediary have agreed that the commodity intermediary will apply any value distributed on account of the commodity contract as directed by the secured party without further consent by the commodity customer.

(C) A secured party having control of all security entitlements or commodity contracts carried in a securities account or commodity account has control over the securities account or commodity account.

Effective Date: 07-01-2001

1309.107 Control of letter-of-credit right - UCC 9-107.

A secured party has control of a letter-of-credit right to the extent of any right to payment or performance by the issuer or any nominated person if the issuer or nominated person has consented to an assignment of proceeds of the letter of credit under division (C) of section 1305.13 of the Revised Code or otherwise applicable law or practice.

Effective Date: 07-01-2001

1309.108 Sufficiency of description - UCC 9-108.

(A) Except as provided in divisions (C), (D), and (E) of this section, any description of personal or real property is sufficient whether or not it is specific if it reasonably identifies what is described.

(B) Except as otherwise provided in division (D) of this section, a description of collateral reasonably identifies the collateral if it identifies the collateral by:

(1) Specific listing;

(2) Category;

(3) Except as otherwise provided in division (E) of this section, a type of collateral defined in Chapters 1301., 1302., 1303., 1304., 1305., 1307., 1308., 1309., and 1310. of the Revised Code;

(4) Quantity;

(5) Computational or allocational formula or procedure; or

(6) Except as otherwise provided in division (C) of this section, any other method, if the identity of the collateral is objectively determinable.

(C) A description of collateral as “all the debtor’s assets” or “all the debtor’s personal property” or using words of similar import does not reasonably identify the collateral.

(D) Except as otherwise provided in division (E) of this section, a description of a security entitlement, securities account, or commodity account is sufficient if it describes:

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

(2) The underlying financial asset or commodity contract.

(E) A description only by type of collateral defined in Chapters 1301., 1302., 1303., 1304., 1305., 1307., 1308., 1309., and 1310. of the Revised Code is an insufficient description of:

(1) A commercial tort claim; or

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

Effective Date: 07-01-2001

1309.109 Scope of chapter - UCC 9-109.

(A) Except as otherwise provided in divisions (C) and (D) of this section, this chapter applies to the following:

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

(2) An agricultural lien;

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

(4) A consignment;

(5) A security interest arising under section 1302.42 or 1302.49, division (C) of section 1302.85, or division (E) of section 1310.54 of the Revised Code, as provided in section 1309.110 of the Revised Code; and

(6) A security interest arising under section 1304.20 or 1305.18 of the Revised Code.

(B) The application of this chapter to a security interest in a secured obligation is not affected by the fact that the obligation is itself secured by a transaction or interest to which this chapter does not apply.

(1) A statute, regulation, or treaty of the United States preempts this chapter; or

(2) The rights of a transferee beneficiary or nominated person under a letter of credit are independent and superior under section 1305.13 of the Revised Code.

(D) This chapter does not apply to the following:

(1) A landlord’s lien, other than an agricultural lien;

(2)(a) A lien, not enumerated in division (D)(2) of this section and other than an agricultural lien, given by statute or other rule of law for services or materials, including any lien created under any provision of Chapter 926., sections 1311.55 to 1311.57, sections 1311.71 to 1311.80, section 1701.66, or Chapter 4585. of the Revised Code;

(b) Notwithstanding division (D)(2)(a) of this section, section 1309.333 of the Revised Code applies with respect to priority of the lien.

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

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

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

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

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

(8) A transfer of an interest in or an assignment of a claim under a policy of insurance, other than an assignment by or to a health-care provider of a health-care-insurance receivable and any subsequent assignment of the right to payment, but sections 1309.315 and 1309.322 of the Revised Code apply with respect to proceeds and priorities in proceeds;

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

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

(a) Section 1309.340 of the Revised Code applies with respect to the effectiveness of rights of recoupment or set-off against deposit accounts; and

(b) Section 1309.404 of the Revised Code applies with respect to defenses or claims of an account debtor.

(11) The creation or transfer of an interest in or lien on real property, including a lease or rents under a lease, except to the extent that provision is made for:

(a) Liens on real property in sections 1309.203 and 1309.308 of the Revised Code;

(b) Fixtures in section 1309.334 of the Revised Code;

(d) Security agreements covering personal and real property in section 1309.604 of the Revised Code.

(12) An assignment of a claim arising in tort, other than a commercial tort claim, but sections 1309.315 and 1309.322 of the Revised Code apply with respect to proceeds and priorities in proceeds;

(13) An assignment of a deposit account in a consumer transaction, but sections 1309.315 and 1309.322 of the Revised Code apply with respect to proceeds and priorities in proceeds; or

(14) A transfer by a government, state, or governmental unit.

(E) The granting of a security interest in all or any part of a lottery prize award for consideration is subject to the prohibition of division (C) of section 3770.07 of the Revised Code. The sale, assignment, or other redirection of a lottery prize award for consideration is subject to the provisions of division (D) of section 3770.07 and sections 3770.10 to 3770.14 of the Revised Code.

Effective Date: 09-26-2003

1309.110 Security interests arising under article 2 or 2A - UCC 9-110.

A security interest arising under sections 1302.42 and 1302.49, division (C) of section 1302.85, or division (E) of section 1310.54 of the Revised Code is subject to this chapter. However, until the debtor obtains possession of the goods:

(A) The security interest is enforceable even if division (B)(3) of section 1309.203 of the Revised Code has not been satisfied;

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

(C) The rights of the secured party after default by the debtor are governed by Chapter 1302. or 1310. of the Revised Code; and

(D) The security interest has priority over a conflicting security interest created by the debtor.

Effective Date: 07-01-2001

1309.201 General effectiveness of security agreement - UCC 9-201.

(A) Except as otherwise provided in Chapters 1301., 1302., 1303., 1304., 1305., 1307., 1308., 1309., and 1310. of the Revised Code, a security agreement is effective according to its terms between the parties, against purchasers of the collateral, and against creditors.

(B) A transaction, although subject to this chapter, is also subject to any applicable law that establishes a different rule for consumers and to Chapter 1317., sections 1321.01 to 1321.33 and divisions (A), (B), and (C) of section 1321.99 of the Revised Code.

(C) In the event of conflict between the provisions of this chapter and the provisions of sections 1317.01 to 1317.99, 1321.01 to 1321.33, and divisions (A), (B), and (C) of section 1321.99 of the Revised Code, the provisions of sections 1317.01 to 1317.99, 1321.01 to 1321.33, and divisions (A), (B), and (C) of section 1321.99 of the Revised Code shall prevail. Failure to comply with those provisions has only the effect provided in those provisions.

(D) This article does not:

(1) Validate any rate, charge, agreement, or practice that violates a rule of law, statute, or regulation described in division (B) of this section; or

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

Effective Date: 07-01-2001

1309.202 Title to collateral immaterial - UCC 9-202.

Except as otherwise provided with respect to consignments or sales of accounts, chattel paper, payment intangibles, or promissory notes, the provisions of this chapter with regard to rights and obligations apply whether title to collateral is in the secured party or in the debtor.

Effective Date: 07-01-2001

1309.203 Attachment and enforceability of security interest - proceeds - supporting obligation - formal requisites - UCC 9-203.

(A) A security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral, unless an agreement expressly postpones the time of attachment.

(B) Except as otherwise provided in divisions (C) to (I) of this section, a security interest is enforceable against the debtor and third parties with respect to the collateral only if:

(1) Value has been given;

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

(3) One of the following conditions is met:

(a) The debtor has authenticated a security agreement that provides a description of the collateral and, if the security interest covers timber to be cut, a description of the land concerned;

(b) The collateral is not a certificated security and is in the possession of the secured party under section 1309.313 of the Revised Code pursuant to the debtor’s security agreement;

(c) The collateral is a certificated security in registered form and the security certificate has been delivered to the secured party under section 1308.27 of the Revised Code pursuant to the debtor’s security agreement; or

(d) The collateral is deposit accounts, electronic chattel paper, investment property, or letter-of-credit rights, and the secured party has control under section 1309.104, 1309.105, 1309.106, or 1309.107 of the Revised Code pursuant to the debtor’s security agreement.

(C) Division (B) of this section is subject to section 1304.20 of the Revised Code on the security interest of a collecting bank, section 1305.18 of the Revised Code on the security interest of a letter-of-credit issuer or nominated person, section 1309.110 of the Revised Code on a security interest arising under Chapter 1302. or 1310. of the Revised Code, and section 1309.206 of the Revised Code on security interests in investment property.

(D) A person becomes bound as debtor by a security agreement entered into by another person if, by operation of law other than this article or by contract:

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

(2) The person becomes generally obligated for the obligations of the other person, including the obligation secured under the security agreement, and acquires or succeeds to all or substantially all of the assets of the other person.

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

(1) The agreement satisfies division (B)(3) of this section with respect to existing or after-acquired property of the new debtor to the extent the property is described in the agreement; and

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

(F) The attachment of a security interest in collateral gives the secured party the rights to proceeds provided by section 1309.315 of the Revised Code and is also attachment of a security interest in a supporting obligation for the collateral.

(G) The attachment of a security interest in a right to payment or performance secured by a security interest or other lien on personal or real property is also attachment of a security interest in the security interest, mortgage, or other lien.

(H) The attachment of a security interest in a securities account is also attachment of a security interest in the security entitlements carried in the securities account.

(I) The attachment of a security interest in a commodity account is also attachment of a security interest in the commodity contracts carried in the commodity account.

Effective Date: 07-01-2001

1309.204 After-acquired property - future advances - UCC 9-204.

(A) Except as provided in division (B) of this section, a security agreement may create or provide for a security interest in after-acquired collateral.

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

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

(2) A commercial tort claim.

(C) A security agreement may provide that collateral secures, or that accounts, chattel paper, payment intangibles, or promissory notes are sold in connection with, future advances or other value, whether or not the advances or value are given pursuant to commitment.

Effective Date: 07-01-2001

1309.205 Use or disposition of collateral permissible - UCC 9-205.

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

(1) The debtor has the right or ability to:

(a) Use, commingle, or dispose of all or part of the collateral, including returned or repossessed goods;

(b) Collect, compromise, enforce, or otherwise deal with collateral;

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

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

(B) This section does not relax the requirements of possession if attachment, perfection, or enforcement of a security interest depends upon possession of the collateral by the secured party.

Effective Date: 07-01-2001

1309.206 Security interest arising in purchase or delivery of financial asset - UCC 9-206.

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

(1) The person buys a financial asset through a securities intermediary in a transaction in which the person is obligated to pay the purchase price to the securities intermediary at the time of the purchase; and

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

(B) The security interest described in division (A) of this section secures the person’s obligation to pay for the financial asset.

(C) A security interest in favor of a person that delivers a certificated security or other financial asset represented by a writing attaches to the security or other financial asset if:

(1) The security or other financial asset:

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

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

(2) The agreement calls for delivery against payment.

(D) The security interest described in division (C) of this section secures the obligation to make payment for the delivery.

Effective Date: 07-01-2001

1309.207 Rights and duties of secured party having possession or control of collateral - UCC 9-207.

(A) Except as otherwise provided in division (D) of this section, a secured party shall use reasonable care in the custody and preservation of collateral in the secured party’s possession. In the case of an instrument or chattel paper, reasonable care includes taking necessary steps to preserve rights against prior parties unless otherwise agreed.

(B) Except as otherwise provided in division (D) of this section, if a secured party has possession of collateral:

(1) Reasonable expenses, including the cost of insurance and payment of taxes or other charges, incurred in the custody, preservation, use, or operation of the collateral are chargeable to the debtor and are secured by the collateral;

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

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

(4) The secured party may use or operate the collateral:

(a) For the purpose of preserving the collateral or its value;

(b) As permitted by an order of a court having competent jurisdiction; or

(C) Except as otherwise provided in division (D) of this section, a secured party having possession of collateral or control of collateral under section 1309.104, 1309.105, 1309.106, or 1309.107 of the Revised Code:

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

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

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

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

(1) Division (A) of this section does not apply unless the secured party is entitled under an agreement:

(a) To charge back uncollected collateral; or

(b) Otherwise to full or limited recourse against the debtor or a secondary obligor based on the nonpayment or other default of an account debtor or other obligor on the collateral; and

(2) Divisions (B) and (C) of this section do not apply.

Effective Date: 07-01-2001

1309.208 Additional duties of secured party having control of collateral - UCC 9-208.

(A) This section applies to cases in which there is no outstanding secured obligation and the secured party is not committed to make advances, incur obligations, or otherwise give value.

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

(1) A secured party having control of a deposit account under division (A)(2) of section 1309.104 of the Revised Code shall send to the bank with which the deposit account is maintained an authenticated statement that releases the bank from any further obligation to comply with instructions originated by the secured party.

(2) A secured party having control of a deposit account under division (A)(3) of section 1309.104 of the Revised Code shall:

(a) Pay the debtor the balance on deposit in the deposit account; or

(b) Transfer the balance on deposit into a deposit account in the debtor’s name.

(3) A secured party, other than a buyer, having control of electronic chattel paper under section 1309.105 of the Revised Code shall:

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

(b) If the debtor designates a custodian that is the designated custodian with which the authoritative copy of the electronic chattel paper is maintained for the secured party, communicate to the custodian an authenticated record releasing the designated custodian from any further obligation to comply with instructions originated by the secured party and instructing the custodian to comply with instructions originated by the debtor; and

(c) Take appropriate action to enable the debtor or its designated custodian to make copies of or revisions to the authoritative copy that add or change an identified assignee of the authoritative copy without the consent of the secured party.

(4) A secured party having control of investment property under division (D)(2) of section 1308.24 or division (B) of section 1309.106 of the Revised Code shall send to the securities intermediary or commodity intermediary with which the security entitlement or commodity contract is maintained an authenticated record that releases the securities intermediary or commodity intermediary from any further obligation to comply with entitlement orders or directions originated by the secured party; and

(5) A secured party having control of a letter-of-credit right under section 1309.107 of the Revised Code shall send to each person having an unfulfilled obligation to pay or deliver proceeds of the letter of credit to the secured party an authenticated release from any further obligation to pay or deliver proceeds of the letter of credit to the secured party.

Effective Date: 07-01-2001

1309.209 Duties of secured party if account debtor has been notified of assignment - UCC 9-209.

(A) Except as otherwise provided in division (C) of this section, this section applies if:

(1) There is no outstanding secured obligation; and

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

(B) Within ten days after receiving an authenticated demand by the debtor, a secured party shall send to an account debtor that has received notification of an assignment to the secured party as assignee under division (A) of section 1309.406 of the Revised Code an authenticated record that releases the account debtor from any further obligation to the secured party.

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

Effective Date: 07-01-2001

1309.210 Request for accounting - request regarding list of collateral or statement of account - UCC 9-210.

(A) As used in this section:

(1) “Request” means a record of a type described in division (A)(2), (3), or (4) of this section.

(2) “Request for an accounting” means a record authenticated by a debtor requesting that the recipient provide an accounting of the unpaid obligations secured by collateral and reasonably identifying the transaction or relationship that is the subject of the request.

(3) “Request regarding a list of collateral” means a record authenticated by a debtor requesting that the recipient approve or correct a list of what the debtor believes to be the collateral securing an obligation and reasonably identifying the transaction or relationship that is the subject of the request.

(4) “Request regarding a statement of account” means a record authenticated by a debtor requesting that the recipient approve or correct a statement indicating what the debtor believes to be the aggregate amount of unpaid obligations secured by collateral as of a specified date and reasonably identifying the transaction or relationship that is the subject of the request.

(B) Subject to divisions (C), (D), (E), and (F) of this section, a secured party, other than a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor, shall comply with a request within fourteen days after receipt:

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

(2) In the case of a request regarding a list of collateral or a request regarding a statement of account, by authenticating and sending to the debtor an approval or correction.

(C) A secured party that claims a security interest in all of a particular type of collateral owned by the debtor may comply with a request regarding a list of collateral by sending to the debtor an authenticated record including a statement to that effect within fourteen days after receipt.

(D) A person that receives a request regarding a list of collateral, claims no interest in the collateral when it receives the request, and claimed an interest in the collateral at an earlier time shall comply with the request within fourteen days after receipt by sending to the debtor an authenticated record:

(1) Disclaiming any interest in the collateral; and

(2) If known to the recipient, providing the name and mailing address of any assignee of or successor to the recipient’s interest in the collateral.

(E) A person that receives a request for an accounting or a request regarding a statement of account, claims no interest in the obligations when it receives the request, and claimed an interest in the obligations at an earlier time shall comply with the request within fourteen days after receipt by sending to the debtor an authenticated record:

(1) Disclaiming any interest in the obligations; and

(2) If known to the recipient, providing the name and mailing address of any assignee of or successor to the recipient’s interest in the obligations.

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

Effective Date: 07-01-2001

1309.301 Law governing perfection and priority of security interests - UCC 9-301.

Except as otherwise provided in sections 1309.303 to 1309.306 of the Revised Code, the following rules determine the law governing perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral:

(A) Except as otherwise provided in this section, while a debtor is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral.

(B) While collateral is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a possessory security interest in that collateral.

(C) Except as otherwise provided in division (D) of this section, while negotiable documents, goods, instruments, money, or tangible chattel paper is located in a jurisdiction, the local law of that jurisdiction governs:

(1) Perfection of a security interest in the goods by filing a fixture filing;

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

(3) The effect of perfection or nonperfection and the priority of a nonpossessory security interest in the collateral.

(D) The local law of the jurisdiction in which the wellhead or minehead is located governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in as-extracted collateral.

Effective Date: 07-01-2001

1309.302 Law governing perfection and priority of agricultural liens - UCC 9-302.

While farm products are located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of an agricultural lien on the farm products.

Effective Date: 07-01-2001

1309.303 Law governing perfection and priority of security interests in goods covered by a certificate of title - UCC 9-303.

(A) This section applies to goods covered by a certificate of title, even if there is no other relationship between the jurisdiction under whose certificate of title the goods are covered and the goods or the debtor.

(B) Goods become covered by a certificate of title when a valid application for the certificate of title and the applicable fee are delivered to the appropriate authority. Goods cease to be covered by a certificate of title at the earlier of the time the certificate of title ceases to be effective under the law of the issuing jurisdiction or the time the goods become covered subsequently by a certificate of title issued by another jurisdiction.

(C) The local law of the jurisdiction under whose certificate of title the goods are covered governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in goods covered by a certificate of title from the time the goods become covered by the certificate of title until the goods cease to be covered by the certificate of title.

Effective Date: 07-01-2001

1309.304 Law governing perfection and priority of security interests in deposit accounts - UCC 9-304.

(A) The local law of a bank’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a deposit account maintained with that bank.

(B) The following rules determine a bank’s jurisdiction for purposes of this section:

(1) If an agreement between the bank and the debtor governing the deposit account expressly provides that a particular jurisdiction is the bank’s jurisdiction for purposes of this chapter or Chapters 1301. to 1305. and 1307. to 1310. of the Revised Code, that jurisdiction is the bank’s jurisdiction.

(2) If division (B)(1) of this section does not apply and an agreement between the bank and its customer governing the deposit account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the bank’s jurisdiction.

(3) If neither division (B)(1) nor (2) of this section applies and an agreement between the bank and its customer governing the deposit account expressly provides that the deposit account is maintained at an office in a particular jurisdiction, that jurisdiction is the bank’s jurisdiction.

(4) If neither division (B)(1), (2), nor (3) of this section applies, the bank’s jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the customer’s account is located.

(5) If neither division (B)(1), (2), (3), nor (4) of this section applies, the bank’s jurisdiction is the jurisdiction in which the chief executive office of the bank is located.

Effective Date: 07-01-2001

1309.305 Law governing perfection and priority of security interests in investment property - UCC 9-305.

(A) Except as otherwise provided in division (C) of this section, the following rules apply:

(1) While a security certificate is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in the certificated security represented thereby.

(2) The local law of the issuer’s jurisdiction as specified in division (D) of section 1308.05 of the Revised Code governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in an uncertificated security.

(3) The local law of the securities intermediary’s jurisdiction as specified in division (E) of section 1308.05 of the Revised Code governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a security entitlement or securities account.

(4) The local law of the commodity intermediary’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a commodity contract or commodity account.

(B) The following rules determine a commodity intermediary’s jurisdiction for purposes of sections 1309.301 to 1309.342 of the Revised Code:

(1) If an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that a particular jurisdiction is the commodity intermediary’s jurisdiction for purposes of sections 1309.301 to 1309.342 of the Revised Code, this chapter, or Chapters 1301., 1302., 1303., 1304., 1305., 1307., 1308., 1309., and 1310. of the Revised Code, that jurisdiction is the commodity intermediary’s jurisdiction.

(2) If division (B)(1) of this section does not apply and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the commodity intermediary’s jurisdiction.

(3) If neither division (B)(1) nor (2) of this section applies and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the commodity account is maintained at an office in a particular jurisdiction, that jurisdiction is the commodity intermediary’s jurisdiction.

(4) If neither division (B)(1), (2), nor (3) of this section applies, the commodity intermediary’s jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the commodity customer’s account is located.

(5) If neither division (B)(1), (2), (3), nor (4) of this section applies, the commodity intermediary’s jurisdiction is the jurisdiction in which the chief executive office of the commodity intermediary is located.

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

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

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

Effective Date: 07-01-2001

1309.306 Law governing perfection and priority of security interests in letter-of-credit rights - UCC 9-306.

(A) Subject to division (C) of this section, the local law of the issuer’s jurisdiction or a nominated person’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a letter-of-credit right if the issuer’s jurisdiction or nominated person’s jurisdiction is a state.

(B) For purposes of sections 1309.301 to 1309.342 of the Revised Code, an issuer’s jurisdiction or nominated person’s jurisdiction is the jurisdiction whose law governs the liability of the issuer or nominated person with respect to the letter-of-credit right as provided in section 1305.15 of the Revised Code.

(C) This section does not apply to a security interest that is perfected only under division (D) of section 1309.308 of the Revised Code.

Effective Date: 07-01-2001

1309.307 Location of debtor - UCC 9-307.

(A) As used in this section, “place of business” means a place where a debtor conducts the debtor’s affairs.

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

(1) A debtor who is an individual is located at the individual’s principal residence.

(2) A debtor that is an organization and has only one place of business is located at its place of business.

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

(C) Division (B) of this section applies only if a debtor’s residence, place of business, or chief executive office, as applicable, is located in a jurisdiction whose law generally requires information concerning the existence of a nonpossessory security interest to be made generally available in a filing, recording, or registration system as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the collateral. If division (B) of this section does not apply, the debtor is located in the District of Columbia.

(D) A person that ceases to exist, have a residence, or have a place of business continues to be located in the jurisdiction specified by divisions (B) and (C) of this section.

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

(F) Except as otherwise provided in division (I) of this section, a registered organization that is organized under the law of the United States and a branch or agency of a bank that is not organized under the law of the United States or a state are located:

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

(2) In the state that the registered organization, branch, or agency designates, if the law of the United States authorizes the registered organization, branch, or agency to designate its state of location; or

(3) In the District of Columbia, if neither division (F)(1) nor (2) of this section applies.

(G) A registered organization continues to be located in the jurisdiction specified by division (E) or (F) of this section notwithstanding:

(1) The suspension, revocation, forfeiture, or lapse of the registered organization’s status in its jurisdiction of organization; or

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

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

(I) A branch or agency of a bank that is not organized under the law of the United States or a state is located in the state in which the branch or agency is licensed, if all branches and agencies of the bank are licensed in only one state.

(J) A foreign air carrier under the “Federal Aviation Act of 1958,” 49 U.S.C. 40102, as amended, is located at the designated office of the agent upon which service of process may be made on behalf of the carrier.

(K) This section applies only for the purposes of sections 1309.301 to 1309.342 of the Revised Code.

Effective Date: 07-01-2001

1309.308 When security interest or agricultural lien is perfected - continuity of perfection - UCC 9-308.

(A) Except as otherwise provided in this section and section 1309.309 of the Revised Code, a security interest is perfected if it has attached and all of the applicable requirements for perfection in sections 1309.310 to 1309.316 of the Revised Code have been satisfied. A security interest is perfected when it attaches if the applicable requirements are satisfied before the security interest attaches.

(B) An agricultural lien is perfected if it has become effective and all of the applicable requirements for perfection in section 1309.310 of the Revised Code have been satisfied. An agricultural lien is perfected when it becomes effective if the applicable requirements are satisfied before the agricultural lien becomes effective.

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

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

(E) Perfection of a security interest in a right to payment or performance also perfects a security interest in a security interest, mortgage, or other lien on personal or real property securing the right.

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

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

Effective Date: 07-01-2001

1309.309 Security interest perfected upon attachment - UCC 9-309.

The following security interests are perfected when they attach:

(A) A purchase money security interest in consumer goods, except as otherwise provided in division (B) of section 1309.311 of the Revised Code with respect to consumer goods that are subject to a statute or treaty described in division (A) of section 1309.311 of the Revised Code;

(B) An assignment of accounts or payment intangibles that does not by itself or in conjunction with other assignments to the same assignee transfer a significant part of the assignor’s outstanding accounts or payment intangibles;

(D) A sale of a promissory note;

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

(F) A security interest arising under section 1302.42, 1302.49, division (C) of section 1302.85, or division (E) of section 1310.54 of the Revised Code, until the debtor obtains possession of the collateral;

(G) A security interest of a collecting bank arising under section 1304.20 of the Revised Code;

(H) A security interest of an issuer or nominated person arising under section 1305.18 of the Revised Code;

(I) A security interest arising in the delivery of a financial asset under division (C) of section 1309.206 of the Revised Code;

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

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

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

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

Effective Date: 07-01-2001

1309.310 When filing required to perfect security interest or agricultural lien - security interests and agricultural liens to which filing provisions do not apply - UCC 9-310.

(A) Except as otherwise provided in division (B) of this section and division (B) of section 1309.312 of the Revised Code, a financing statement must be filed to perfect all security interests and agricultural liens.

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

(1) That is perfected under division (D), (E), (F), or (G) of section 1309.308 of the Revised Code;

(2) That is perfected under section 1309.309 of the Revised Code when it attaches;

(3) In property subject to a statute, regulation, or treaty described in division (A) of section 1309.311 of the Revised Code;

(4) In goods in possession of a bailee which is perfected under division (D)(1) or (2) of section 1309.312 of the Revised Code;

(5) In certificated securities, documents, goods, or instruments which is perfected without filing or possession under division (E), (F), or (G) of section 1309.312 of the Revised Code;

(6) In collateral in the secured party’s possession under section 1309.313 of the Revised Code;

(7) In a certificated security perfected by delivery of the security certificate to the secured party under section 1309.313 of the Revised Code;

(8) In deposit accounts, electronic chattel paper, investment property, or letter-of-credit rights perfected by control under section 1309.314 of the Revised Code;

(9) In proceeds which is perfected under section 1309.315 of the Revised Code; or

(10) That is perfected under section 1309.316 of the Revised Code.

(C) If a secured party assigns a perfected security interest or agricultural lien, a filing under this chapter is not required to continue the perfected status of the security interest against creditors of and transferees from the original debtor.

Effective Date: 07-01-2001

1309.311 Perfection of security interests in property subject to certain statutes, regulations, and treaties - UCC 9-311.

(A) Except as otherwise provided in division (D) of this section, the filing of a financing statement is not necessary or effective to perfect a security interest in property subject to:

(1) A statute, regulation, or treaty of the United States whose requirements for a security interest’s obtaining priority over the rights of a lien creditor with respect to the property preempt division (A) of section 1309.310 of the Revised Code;

(2) Chapters 1547., 1548., 4505., 4519., and 5309. of the Revised Code;

(3) A certificate of title statute of another jurisdiction that provides for a security interest to be indicated on the certificate as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the property.

(B) Compliance with the requirements of a statute, regulation, or treaty described in division (A) of this section for obtaining priority over the rights of a lien creditor is equivalent to the filing of a financing statement under this chapter. Except as otherwise provided in division (D) of this section, section 1309.313, and divisions (D) and (E) of section 1309.316 of the Revised Code for goods covered by a certificate of title, a security interest in property subject to a statute, regulation, or treaty described in division (A) of this section may be perfected only by compliance with those requirements, and a security interest so perfected remains perfected notwithstanding a change in the use or transfer of possession of the collateral.

(C) Except as otherwise provided in division (D) of this section and divisions (D) and (E) of section 1309.316 of the Revised Code, duration and renewal of perfection of a security interest perfected by compliance with the requirements prescribed by a statute, regulation, or treaty described in division (A) of this section are governed by the statute, regulation, or treaty. In other respects, the security interest is subject to this chapter.

(D) During any period in which collateral subject to a statute specified in division (A)(2) of this section is inventory held for sale or lease by a person or leased by that person as lessor and that person is in the business of selling goods of that kind, this section does not apply to a security interest in that collateral created by that person.

Effective Date: 07-01-2001

1309.312 Perfection of security interests - UCC 9-312.

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

(B) Except as otherwise provided in divisions (C) and (D) of section 1309.315 of the Revised Code for proceeds:

(1) A security interest in a deposit account may be perfected only by control under section 1309.314 of the Revised Code;

(2) And except as otherwise provided in division (D) of section 1309.308 of the Revised Code, a security interest in a letter-of-credit right may be perfected only by control under section 1309.314 of the Revised Code; and

(3) A security interest in money may be perfected only by the secured party’s taking possession under section 1309.313 of the Revised Code.

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

(2) A security interest perfected in the document has priority over any security interest that becomes perfected in the goods by another method during that time.

(D) While goods are in the possession of a bailee that has issued a non-negotiable document covering the goods, a security interest in the goods may be perfected by:

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

(2) The bailee’s receipt of notification of the secured party’s interest; or

(3) Filing as to the goods.

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

(F) A perfected security interest in a negotiable document or goods in possession of a bailee, other than one that has issued a negotiable document for the goods, remains perfected for a period of twenty days without filing if the secured party makes available to the debtor the goods or documents representing the goods for the purpose of:

(1) Ultimate sale or exchange; or

(2) Loading, unloading, storing, shipping, trans-shipping, manufacturing, processing, or otherwise dealing with them in a manner preliminary to their sale or exchange.

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

(1) Ultimate sale or exchange; or

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

(H) After the twenty-day period specified in divisions (E), (F), or (G) of this section expires, perfection depends upon compliance with this chapter.

Effective Date: 07-01-2001

1309.313 When possession by or delivery to secured party perfects security interest without filing - UCC 9-313.

(A) Except as otherwise provided in division (B) of this section, a secured party may perfect a security interest in negotiable documents, goods, instruments, money, or tangible chattel paper by taking possession of the collateral. A secured party may perfect a security interest in certificated securities by taking delivery of the certificated securities under section 1308.27 of the Revised Code.

(B) With respect to goods covered by a certificate of title issued by this state, a secured party may perfect a security interest in the goods by taking possession of the goods only in the circumstances described in division (D) of section 1309.316 of the Revised Code.

(C) With respect to collateral other than certificated securities and goods covered by a document, a secured party takes possession of collateral in the possession of a person other than the debtor, the secured party, or a lessee of the collateral from the debtor in the ordinary course of the debtor’s business, when:

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

(2) The person takes possession of the collateral after having authenticated a record acknowledging that the person will hold possession of collateral for the secured party’s benefit.

(D) If perfection of a security interest depends upon possession of the collateral by a secured party, perfection occurs no earlier than the time the secured party takes possession and continues only while the secured party retains possession.

(E) A security interest in a certificated security in registered form is perfected by delivery when delivery of the certificated security occurs under section 1308.27 of the Revised Code and remains perfected by delivery until the debtor obtains possession of the security certificate.

(F) A person in possession of collateral is not required to acknowledge that the person holds possession for a secured party’s benefit.

(G) If a person acknowledges that the person holds possession for the secured party’s benefit:

(1) The acknowledgment is effective under division (C) of this section or division (A) of section 1308.27 of the Revised Code, even if the acknowledgment violates the rights of a debtor; and

(2) Unless the person otherwise agrees or law other than this chapter otherwise provides, the person does not owe any duty to the secured party and is not required to confirm the acknowledgment to another person.

(H) A secured party having possession of collateral does not relinquish possession by delivering the collateral to a person other than the debtor or a lessee of the collateral from the debtor in the ordinary course of the debtor’s business if the person was instructed before the delivery or is instructed contemporaneously with the delivery:

(1) To hold possession of the collateral for the secured party’s benefit; or

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

(I) A secured party does not relinquish possession, even if a delivery under division (H) of this section violates the rights of a debtor. A person to whom collateral is delivered under division (H) of this section does not owe any duty to the secured party and is not required to confirm the delivery to another person unless the person otherwise agrees or law other than this chapter otherwise provides.

Effective Date: 07-01-2001

1309.314 Perfection by control - UCC 9-314.

(A) A security interest in investment property, deposit accounts, letter-of-credit rights, or electronic chattel paper may be perfected by control of the collateral under section 1309.104, 1309.105, 1309.106, or 1309.107 of the Revised Code.

(B) A security interest in deposit accounts, electronic chattel paper, or letter-of-credit rights is perfected by control under section 1309.104, 1309.105, or 1309.107 of the Revised Code when the secured party obtains control and remains perfected by control only while the secured party retains control.

(C) A security interest in investment property is perfected by control under Section 1309.106 of the Revised Code from the time the secured party obtains control and remains perfected by control until:

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

(2) One of the following occurs:

(a) If the collateral is a certificated security, the debtor has or acquires possession of the security certificate;

(b) If the collateral is an uncertificated security, the issuer has registered or registers the debtor as the registered owner; or

Effective Date: 07-01-2001

1309.315 Secured party's rights on disposition of collateral and in proceeds - UCC 9-315.

(A) Except as otherwise provided in this chapter and in division (B) of section 1302.44 of the Revised Code:

(1) A security interest or agricultural lien continues in collateral notwithstanding sale, lease, license, exchange, or other disposition thereof unless the secured party authorized the disposition free of the security interest or agricultural lien; and

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

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

(1) If the proceeds are goods, to the extent provided by section 1309.336 of the Revised Code; and

(2) If the proceeds are not goods, to the extent that the secured party identifies the proceeds by a method of tracing, including application of equitable principles, that is permitted under law other than this chapter with respect to commingled property of the type involved.

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

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

(1) The following conditions are satisfied:

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

(b) The proceeds are collateral in which a security interest may be perfected by filing in the office in which the financing statement has been filed; and

(2) The proceeds are identifiable cash proceeds; or

(3) The security interest in the proceeds is perfected other than under division (C) of this section when the security interest attaches or within twenty days thereafter.

(E) If a filed financing statement covers the original collateral, a security interest in proceeds that remains perfected under division (D)(1) of this section becomes unperfected at the later of:

(1) When the effectiveness of the filed financing statement lapses under section 1309.515 of the Revised Code or is terminated under section 1309.513 of the Revised Code; or

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

Effective Date: 07-01-2001

1309.316 Continued perfection of security interest following change in governing law - UCC 9-316.

(A) A security interest perfected pursuant to the law of the jurisdiction designated in division (A) of section 1309.301 or division (C) of section 1309.305 of the Revised Code remains perfected until the earliest of:

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

(2) The expiration of four months after a change of the debtor’s location to another jurisdiction; or

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

(B) If a security interest described in division (A) of this section becomes perfected under the law of the other jurisdiction before the earliest time or event described in that division, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before that earliest time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.

(C) A possessory security interest in collateral, other than goods covered by a certificate of title and as-extracted collateral consisting of goods, remains continuously perfected if:

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

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

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

(D) Except as otherwise provided in division (E) of this section, a security interest in goods covered by a certificate of title that is perfected by any method under the law of another jurisdiction when the goods become covered by a certificate of title from this state remains perfected until the security interest would have become unperfected under the law of the other jurisdiction had the goods not become so covered.

(E) A security interest described in division (D) of this section becomes unperfected as against a purchaser of the goods for value and is deemed never to have been perfected as against a purchaser of the goods for value if the applicable requirements for perfection under division (B) of section 1309.311 or section 1309.313 of the Revised Code are not satisfied before the earlier of:

(1) The time the security interest would have become unperfected under the law of the other jurisdiction had the goods not become covered by a certificate of title from this state; or

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

(F) A security interest in deposit accounts, letter-of-credit rights, or investment property that is perfected under the law of the bank’s jurisdiction, the issuer’s jurisdiction, a nominated person’s jurisdiction, the securities intermediary’s jurisdiction, or the commodity intermediary’s jurisdiction, as applicable, remains perfected until the earlier of:

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

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

(G) If a security interest described in division (F) of this section becomes perfected under the law of the other jurisdiction before the earlier of the time or the end of the period described in that division, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earlier of that time or the end of that period, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.

Effective Date: 07-01-2001

1309.317 Interests that take priority over or take free of unperfected security interest or agricultural lien - UCC 9-317.

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

(1) A person entitled to priority under section 1309.322 of the Revised Code; and

(2) Except as otherwise provided in division (E) of this section, a person who becomes a lien creditor before the earlier of the time:

(a) The security interest or agricultural lien is perfected; or

(b) One of the conditions specified in division (B)(3) of section 1309.203 of the Revised Code is met and a financing statement covering the collateral is filed.

(B) Except as otherwise provided in division (E) of this section, a buyer, other than a secured party, of tangible chattel paper, documents, goods, instruments, or a security certificate takes free of a security interest or agricultural lien if the buyer gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected.

(C) Except as otherwise provided in division (E) of this section, a lessee of goods takes free of a security interest or agricultural lien if the lessee gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected.

(D) A licensee of a general intangible or a buyer, other than a secured party, of accounts, electronic chattel paper, general intangibles, or investment property other than a certificated security takes free of a security interest if the licensee or buyer gives value without knowledge of the security interest and before it is perfected.

(E) Except as otherwise provided in sections 1309.320 and 1309.321 of the Revised Code, if a person files a financing statement with respect to a purchase money security interest before or within twenty days after the debtor receives delivery of the collateral, the security interest takes priority over the rights of a buyer, lessee, or lien creditor that arise between the time the security interest attaches and the time of filing.

Effective Date: 07-01-2001

1309.318 No interest retained in right to payment that is sold - rights and title of seller of account or chattel paper with respect to creditors and purchasers - UCC 9-318.

(A) A debtor that has sold an account, chattel paper, payment intangible, or promissory note does not retain a legal or equitable interest in the collateral sold.

(B) For purposes of determining the rights of creditors of, and purchasers for value of an account or chattel paper from, a debtor that has sold an account or chattel paper while the buyer’s security interest is unperfected, the debtor is deemed to have rights and title to the account or chattel paper identical to those the debtor sold.

Effective Date: 07-01-2001

1309.319 Rights and title of consignee with respect to creditors and purchasers - UCC 9-319.

(A) Except as otherwise provided in division (B) of this section, for purposes of determining the rights of creditors of, and purchasers for value of goods from, a consignee, while the goods are in the possession of the consignee, the consignee is deemed to have rights and title to the goods identical to those the consignor had or had power to transfer.

(B) For purposes of determining the rights of a creditor of a consignee, law other than this chapter determines the rights and title of a consignee while goods are in the consignee’s possession if, under sections 1309.301 to 1309.342 of the Revised Code, a perfected security interest held by the consignor would have priority over the rights of the creditor.

Effective Date: 07-01-2001

1309.320 Buyer of goods - UCC 9-320.

(A) Except as otherwise provided in division (E) of this section, a buyer in the ordinary course of business, other than a person buying farm products from a person engaged in farming operations, takes free of a security interest created by the buyer’s seller even if the security interest is perfected and the buyer knows of its existence.

(B) Except as otherwise provided in division (E) of this section, a buyer of goods from a person who used or bought the goods for use primarily for personal, family, or household purposes takes free of a security interest, even if perfected, if the buyer buys:

(1) Without knowledge of the security interest;

(2) For value;

(3) Primarily for the buyer’s personal, family, or household purposes; and

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

(C) To the extent that it affects the priority of a security interest over a buyer of goods under division (B) of this section, the period of effectiveness of a filing made in the jurisdiction in which the seller is located is governed by divisions (A) and (B) of section 1309.316 of the Revised Code.

(D) A buyer in the ordinary course of business buying oil, gas, or other minerals at the wellhead or minehead or after extraction takes free of an interest arising out of an encumbrance.

(E) Divisions (A) and (B) of this section do not affect a security interest in goods in the possession of the secured party under section 1309.313 of the Revised Code.

Effective Date: 07-01-2001

1309.321 Licensee of general intangible and lessee of goods in ordinary course of business - UCC 9-321.

(A) As used in this section, “licensee in the ordinary course of business” means a person that becomes a licensee of a general intangible in good faith, without knowledge that the license violates the rights of another person in the general intangible, and in the ordinary course of business from a person in the business of licensing general intangibles of that kind. A person becomes a licensee in the ordinary course of business if the license to the person comports with the usual or customary practices in the kind of business in which the licensor is engaged or with the licensor’s own usual or customary practices.

(B) A licensee in the ordinary course of business takes its rights under a nonexclusive license free of a security interest in the general intangible created by the licensor, even if the security interest is perfected and the licensee knows of its existence.

(C) A lessee in ordinary course of business takes its leasehold interest free of a security interest in the goods created by the lessor, even if the security interest is perfected and the lessee knows of its existence.

Effective Date: 07-01-2001

1309.322 Priorities among conflicting security interests in and agricultural liens on same collateral - UCC 9-322.

(A) Except as otherwise provided in this section, priority between conflicting security interests and agricultural liens in the same collateral shall be determined according to the following rules:

(1) Conflicting perfected security interests and agricultural liens rank according to priority in time of filing or perfection. Priority dates from the earlier of the time a filing covering the collateral is first made or the security interest or agricultural lien is first perfected, if there is no period thereafter when there is neither filing nor perfection.

(2) A perfected security interest or agricultural lien has priority over a conflicting unperfected security interest or agricultural lien.

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

(B) For the purpose of division (A)(1) of this section:

(1) The time of filing or perfection as to a security interest in collateral is also the time of filing or perfection as to a security interest in proceeds; and

(2) The time of filing or perfection as to a security interest in collateral supported by a supporting obligation is also the time of filing or perfection as to a security interest in the supporting obligation.

(C) Except as otherwise provided in division (F) of this section, a security interest in collateral which qualifies for priority over a conflicting security interest under section 1309.327, 1309.328, 1309.329, 1309.330, or 1309.331 of the Revised Code also has priority over a conflicting security interest in:

(1) Any supporting obligation for the collateral; and

(2) Proceeds of the collateral if:

(a) The security interest in proceeds is perfected.

(b) The proceeds are cash proceeds or of the same type as the collateral; and

(c) In the case of proceeds that are proceeds of proceeds, all intervening proceeds are cash proceeds, proceeds of the same type as the collateral, or an account relating to the collateral.

(D) Subject to division (E) of this section and except as otherwise provided in division (F) of this section, if a security interest in chattel paper, deposit accounts, negotiable documents, instruments, investment property, or letter-of-credit rights is perfected by a method other than filing, conflicting perfected security interests in proceeds of the collateral rank according to priority in time of filing.

(E) Division (D) of this section applies only if the proceeds of the collateral are not cash proceeds, chattel paper, negotiable documents, instruments, investment property, or letter-of-credit rights.

(F) Divisions (A) to (E) of this section are subject to:

(1) Division (G) of this section and the other provisions of sections 1309.301 to 1309.342 of the Revised Code;

(2) Section 1304.20 of the Revised Code with respect to a security interest of a collecting bank;

(3) Section 1305.18 of the Revised Code with respect to a security interest of an issuer or nominated person; and

(4) Section 1309.110 of the Revised Code with respect to a security interest arising under Chapter 1302. or 1310. of the Revised Code.

(G) A perfected agricultural lien on collateral has priority over a conflicting security interest in or agricultural lien on the same collateral if the statute creating the agricultural lien so provides.

Effective Date: 07-01-2001

1309.323 Future advances - UCC 9-323.

(A) Except as otherwise provided in division (C) of this section, for purposes of determining the priority of a perfected security interest under division (A)(1) of section 1309.322 of the Revised Code, perfection of the security interest dates from the time an advance is made to the extent that the security interest secures an advance that:

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

(a) Under section 1309.309 of the Revised Code when it attaches; or

(b) Temporarily under division (E), (F), or (G) of section 1309.312 of the Revised Code.

(2) Is not made pursuant to a commitment entered into before or while the security interest is perfected by a method other than under section 1309.309 or division (E), (F), or (G) of section 1309.312 of the Revised Code.

(B) Except as otherwise provided in division (C) of this section, a security interest is subordinate to the rights of a person that becomes a lien creditor to the extent that the security interest secures advances made more than forty-five days after the person becomes a lien creditor unless the advance is made:

(1) Without knowledge of the lien; or

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

(C) Divisions (A) and (B) of this section do not apply to a security interest held by a secured party that is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor.

(D) Except as otherwise provided in division (E) of this section, a buyer of goods other than a buyer in ordinary course of business takes free of a security interest to the extent that it secures advances made after the earlier of:

(1) The time the secured party acquires knowledge of the buyer’s purchase; or

(2) Forty-five days after the purchase.

(E) Division (D) of this section does not apply if the advance is made pursuant to a commitment entered into without knowledge of the buyer’s purchase and before the expiration of the forty-five-day period.

(F) Except as otherwise provided in division (G) of this se