<section article="gcl" article_name="Commercial Law" number="9-101" title_number="9" title_name="Secured Transactions" subtitle_number="1" subtitle_name="General Provisions"> <text>This title may be cited as the Maryland Uniform Commercial Code - Secured Transactions.</text> </section> <section article="gcl" article_name="Commercial Law" number="9-102" title_number="9" title_name="Secured Transactions" subtitle_number="1" subtitle_name="General Provisions"> <level label="a"> <text>In this title:</text> <level label="1"> <text>“Accession” means goods that are physically united with other goods in such a manner that the identity of the original goods is not lost.</text> </level> <level label="2"> <text>“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. The term includes health–care–insurance receivables. The term 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.</text> </level> <level label="3"> <text>“Account debtor” means a person obligated on an account, chattel paper, or general intangible. The term does not include persons obligated to pay a negotiable instrument, even if the instrument constitutes part of chattel paper.</text> </level> <level label="4"> <text>“Accounting”, except as used in “accounting for”, means a record:</text> <level label="A"> <text>Authenticated by a secured party;</text> </level> <level label="B"> <text>Indicating the aggregate unpaid secured obligations as of a date not more than 35 days earlier or 35 days later than the date of the record; and</text> </level> <level label="C"> <text>Identifying the components of the obligations in reasonable detail.</text> </level> </level> <level label="5"> <text>“Agricultural lien” means an interest in farm products:</text> <level label="A"> <text>Which secures payment or performance of an obligation for:</text> <level label="i"> <text>Goods or services furnished in connection with a debtor’s farming operation; or</text> </level> <level label="ii"> <text>Rent on real property leased by a debtor in connection with its farming operation;</text> </level> </level> <level label="B"> <text>Which is created by statute in favor of a person that:</text> <level label="i"> <text>In the ordinary course of its business furnished goods or services to a debtor in connection with a debtor’s farming operation; or</text> </level> <level label="ii"> <text>Leased real property to a debtor in connection with the debtor’s farming operation; and</text> </level> </level> <level label="C"> <text>Whose effectiveness does not depend on the person’s possession of the personal property.</text> </level> </level> <level label="6"> <text>“As–extracted collateral” means:</text> <level label="A"> <text>Oil, gas, or other minerals that are subject to a security interest that:</text> <level label="i"> <text>Is created by a debtor having an interest in the minerals before extraction; and</text> </level> <level label="ii"> <text>Attaches to the minerals as extracted; or</text> </level> </level> <level label="B"> <text>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.</text> </level> </level> <level label="7"> <text>“Authenticate” means:</text> <level label="A"> <text>To sign; or</text> </level> <level label="B"> <text>With present intent to adopt or accept a record, to attach to or logically associate with the record an electronic sound, symbol, or process.</text> </level> </level> <level label="8"> <text>“Bank” means an organization that is engaged in the business of banking. The term includes savings banks, savings and loan associations, credit unions, and trust companies.</text> </level> <level label="9"> <text>“Cash proceeds” means proceeds that are money, checks, deposit accounts, or the like.</text> </level> <level label="10"> <text>“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. The term includes another record maintained as an alternative to a certificate of title by the governmental unit that issues certificates of title if a statute permits the security interest in question to be indicated on the record as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the collateral.</text> </level> <level label="11"> <text>“Chattel paper” means a record or records that evidence both a monetary obligation and a security interest in specific goods, a security interest in specific goods and software used in the goods, a security interest in specific goods and license of software used in the goods, a lease of specific goods, or a lease of specific goods and license of software used in the goods. In this paragraph, “monetary obligation” means a monetary obligation secured by the goods or owed under a lease of the goods and includes a monetary obligation with respect to software used in the goods. The term does not include (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. If a transaction is evidenced by records that include an instrument or series of instruments, the group of records taken together constitutes chattel paper.</text> </level> <level label="12"> <text>“Collateral” means the property subject to a security interest or agricultural lien. The term includes:</text> <level label="A"> <text>Proceeds to which a security interest attaches;</text> </level> <level label="B"> <text>Accounts, chattel paper, payment intangibles, and promissory notes that have been sold; and</text> </level> <level label="C"> <text>Goods that are the subject of a consignment.</text> </level> </level> <level label="13"> <text>“Commercial tort claim” means a claim arising in tort with respect to which:</text> <level label="A"> <text>The claimant is an organization; or</text> </level> <level label="B"> <text>The claimant is an individual and the claim:</text> <level label="i"> <text>Arose in the course of the claimant’s business or profession; and</text> </level> <level label="ii"> <text>Does not include damages arising out of personal injury to or the death of an individual.</text> </level> </level> </level> <level label="14"> <text>“Commodity account” means an account maintained by a commodity intermediary in which a commodity contract is carried for a commodity customer.</text> </level> <level label="15"> <text>“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:</text> <level label="A"> <text>Traded on or subject to the rules of a board of trade that has been designated as a contract market for such a contract pursuant to federal commodities laws; or</text> </level> <level label="B"> <text>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.</text> </level> </level> <level label="16"> <text>“Commodity customer” means a person for which a commodity intermediary carries a commodity contract on its books.</text> </level> <level label="17"> <text>“Commodity intermediary” means a person that:</text> <level label="A"> <text>Is registered as a futures commission merchant under federal commodities law; or</text> </level> <level label="B"> <text>In the ordinary course of its business provides clearance or settlement services for a board of trade that has been designated as a contract market pursuant to federal commodities law.</text> </level> </level> <level label="18"> <text>“Communicate” means:</text> <level label="A"> <text>To send a written or other tangible record;</text> </level> <level label="B"> <text>To transmit a record by any means agreed upon by the persons sending and receiving the record; or</text> </level> <level label="C"> <text>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.</text> </level> </level> <level label="19"> <text>“Consignee” means a merchant to which goods are delivered in a consignment.</text> </level> <level label="20"> <text>“Consignment” means a transaction, regardless of its form, in which a person delivers goods to a merchant for the purpose of sale and:</text> <level label="A"> <text>The merchant:</text> <level label="i"> <text>Deals in goods of that kind under a name other than the name of the person making delivery;</text> </level> <level label="ii"> <text>Is not an auctioneer; and</text> </level> <level label="iii"> <text>Is not generally known by its creditors to be substantially engaged in selling the goods of others;</text> </level> </level> <level label="B"> <text>With respect to each delivery, the aggregate value of the goods is $1,000 or more at the time of delivery;</text> </level> <level label="C"> <text>The goods are not consumer goods immediately before delivery; and</text> </level> <level label="D"> <text>The transaction does not create a security interest that secures an obligation.</text> </level> </level> <level label="21"> <text>“Consignor” means a person that delivers goods to a consignee in a consignment.</text> </level> <level label="22"> <text>“Consumer debtor” means a debtor in a consumer transaction.</text> </level> <level label="23"> <text>“Consumer goods” means goods that are used or bought for use primarily for personal, family, or household purposes.</text> </level> <level label="24"> <text>“Consumer–goods transaction” means a consumer transaction in which:</text> <level label="A"> <text>An individual incurs an obligation primarily for personal, family, or household purposes; and</text> </level> <level label="B"> <text>A security interest in consumer goods secures the obligation.</text> </level> </level> <level label="25"> <text>“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.</text> </level> <level label="26"> <text>“Consumer transaction” means a transaction in which (i) an individual incurs an obligation primarily for personal, family, or household purposes, (ii) a security interest secures the obligation, and (iii) the collateral is held or acquired primarily for personal, family, or household purposes. The term includes consumer–goods transactions.</text> </level> <level label="27"> <text>“Continuation statement” means an amendment of a financing statement which:</text> <level label="A"> <text>Identifies, by its file number, the initial financing statement to which it relates; and</text> </level> <level label="B"> <text>Indicates that it is a continuation statement for, or that it is filed to continue the effectiveness of, the identified financing statement.</text> </level> </level> <level label="28"> <text>“Debtor” means:</text> <level label="A"> <text>A person having an interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor;</text> </level> <level label="B"> <text>A seller of accounts, chattel paper, payment intangibles, or promissory notes; or</text> </level> <level label="C"> <text>A consignee.</text> </level> </level> <level label="29"> <text>“Deposit account” means a demand, time, savings, passbook, or similar account maintained with a bank. The term does not include investment property or accounts evidenced by an instrument.</text> </level> <level label="30"> <text>“Document” means a document of title or a receipt of the type described in § 7–201(b) of this article.</text> </level> <level label="31"> <text>“Electronic chattel paper” means chattel paper evidenced by a record or records consisting of information stored in an electronic medium.</text> </level> <level label="32"> <text>“Encumbrance” means a right, other than an ownership interest, in real property. The term includes mortgages and other liens on real property.</text> </level> <level label="33"> <text>“Equipment” means goods other than inventory, farm products, or consumer goods.</text> </level> <level label="34"> <text>“Farm products” means goods, other than standing timber, with respect to which the debtor is engaged in a farming operation and which are:</text> <level label="A"> <text>Crops grown, growing, or to be grown, including:</text> <level label="i"> <text>Crops produced on trees, vines, and bushes; and</text> </level> <level label="ii"> <text>Aquatic goods produced in aquacultural operations;</text> </level> </level> <level label="B"> <text>Livestock, born or unborn, including aquatic goods produced in aquacultural operations;</text> </level> <level label="C"> <text>Supplies used or produced in a farming operation; or</text> </level> <level label="D"> <text>Products of crops or livestock in their unmanufactured states.</text> </level> </level> <level label="35"> <text>“Farming operation” means raising, cultivating, propagating, fattening, grazing, or any other farming, livestock, or aquacultural operation.</text> </level> <level label="36"> <text>“File number” means the number assigned to an initial financing statement pursuant to § 9–519(a).</text> </level> <level label="37"> <text>“Filing office” means an office designated in § 9–501 as the place to file a financing statement.</text> </level> <level label="38"> <text>“Filing–office rule” means a rule adopted pursuant to § 9–526.</text> </level> <level label="39"> <text>“Financing statement” means a record or records composed of an initial financing statement and any filed record relating to the initial financing statement.</text> </level> <level label="40"> <text>“Fixture filing” means the filing of a financing statement covering goods that are or are to become fixtures and satisfying § 9–502(a) and (b). The term includes the filing of a financing statement covering goods of a transmitting utility which are or are to become fixtures.</text> </level> <level label="41"> <text>“Fixtures” means goods that have become so related to particular real property that an interest in them arises under real property law.</text> </level> <level label="42"> <text>“General intangible” means any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter–of–credit rights, letters of credit, money, and oil, gas, or other minerals before extraction. The term includes payment intangibles and software.</text> </level> <level label="43"> <text>Reserved.</text> </level> <level label="44"> <text>“Goods” means all things that are movable when a security interest attaches. The term 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. The term also includes a computer program embedded in goods and any supporting information provided in connection with a transaction relating to the program if (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. The term does not include a computer program embedded in goods that consist solely of the medium in which the program is embedded. The term also does not include accounts, chattel paper, commercial tort claims, deposit accounts, documents, general intangibles, instruments, investment property, letter–of–credit rights, letters of credit, money, or oil, gas, or other minerals before extraction.</text> </level> <level label="45"> <text>“Governmental unit” means a subdivision, agency, department, county, parish, municipality, or other unit of the government of the United States, a state, or a foreign country. The term includes an organization having a separate corporate existence if the organization is eligible to issue debt on which interest is exempt from income taxation under the laws of the United States.</text> </level> <level label="46"> <text>“Health–care–insurance receivable” means an interest in or claim under a policy of insurance which is a right to payment of a monetary obligation for health–care goods or services provided or to be provided.</text> </level> <level label="47"> <text>“Instrument” means a negotiable instrument or any other writing that evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease, and is of a type that in ordinary course of business is transferred by delivery with any necessary indorsement or assignment. The term does not include (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.</text> </level> <level label="48"> <text>“Inventory” means goods, other than farm products, which:</text> <level label="A"> <text>Are leased by a person as lessor;</text> </level> <level label="B"> <text>Are held by a person for sale or lease or to be furnished under a contract of service;</text> </level> <level label="C"> <text>Are furnished by a person under a contract of service; or</text> </level> <level label="D"> <text>Consist of raw materials, work in process, or materials used or consumed in a business.</text> </level> </level> <level label="49"> <text>“Investment property” means a security, whether certificated or uncertificated, security entitlement, securities account, commodity contract, or commodity account.</text> </level> <level label="50"> <text>“Jurisdiction of organization”, with respect to a registered organization, means the jurisdiction under whose law the organization is formed or organized.</text> </level> <level label="51"> <text>“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. The term does not include the right of a beneficiary to demand payment or performance under a letter of credit.</text> </level> <level label="52"> <text>“Land records” means the office designated for the filing or recording of a record of a mortgage on real property.</text> </level> <level label="53"> <text>“Lien creditor” means:</text> <level label="A"> <text>A creditor that has acquired a lien on the property involved by attachment, levy, or the like;</text> </level> <level label="B"> <text>An assignee for benefit of creditors from the time of assignment;</text> </level> <level label="C"> <text>A trustee in bankruptcy from the date of the filing of the petition; or</text> </level> <level label="D"> <text>A receiver in equity from the time of appointment.</text> </level> </level> <level label="54"> <text>“Manufactured home” means a structure, transportable in one or more sections, which, in the traveling mode, is eight body feet or more in width or 40 body feet or more in length, or, when erected on site, is 320 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air–conditioning, and electrical systems contained therein. The term includes any structure that meets all of the requirements of this paragraph except the size requirements and with respect to which the manufacturer voluntarily files a certification required by the United States Secretary of Housing and Urban Development and complies with the standards established under Title 42 of the United States Code.</text> </level> <level label="55"> <text>“Manufactured–home transaction” means a secured transaction:</text> <level label="A"> <text>That creates a purchase–money security interest in a manufactured home, other than a manufactured home held as inventory; or</text> </level> <level label="B"> <text>In which a manufactured home, other than a manufactured home held as inventory, is the primary collateral.</text> </level> </level> <level label="56"> <text>“Mortgage” means a consensual interest in real property, including fixtures, which secures payment or performance of an obligation.</text> </level> <level label="57"> <text>“New debtor” means a person that becomes bound as debtor under § 9–203(d) by a security agreement previously entered into by another person.</text> </level> <level label="58"> <text>“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. The term does not include an obligation substituted for another obligation.</text> </level> <level label="59"> <text>“Noncash proceeds” means proceeds other than cash proceeds.</text> </level> <level label="60"> <text>“Obligor” means a person that, 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. The term does not include issuers or nominated persons under a letter of credit.</text> </level> <level label="61"> <text>“Original debtor”, except as used in § 9–310(c), means a person that, as debtor, entered into a security agreement to which a new debtor has become bound under § 9–203(d).</text> </level> <level label="62"> <text>“Payment intangible” means a general intangible under which the account debtor’s principal obligation is a monetary obligation.</text> </level> <level label="63"> <text>“Person related to”, with respect to an individual, means:</text> <level label="A"> <text>The spouse of the individual;</text> </level> <level label="B"> <text>A brother, brother–in–law, sister, or sister–in–law of the individual;</text> </level> <level label="C"> <text>An ancestor or lineal descendant of the individual or the individual’s spouse; or</text> </level> <level label="D"> <text>Any other relative, by blood or marriage, of the individual or the individual’s spouse who shares the same home with the individual.</text> </level> </level> <level label="64"> <text>“Person related to”, with respect to an organization, means:</text> <level label="A"> <text>A person directly or indirectly controlling, controlled by, or under common control with the organization;</text> </level> <level label="B"> <text>An officer or director of, or a person performing similar functions with respect to, the organization;</text> </level> <level label="C"> <text>An officer or director of, or a person performing similar functions with respect to, a person described in subparagraph (A);</text> </level> <level label="D"> <text>The spouse of an individual described in subparagraph (A), (B), or (C); or</text> </level> <level label="E"> <text>An individual who is related by blood or marriage to an individual described in subparagraph (A), (B), (C), or (D) and shares the same home with the individual.</text> </level> </level> <level label="65"> <text>“Proceeds”, except as used in § 9–609(b), means the following property:</text> <level label="A"> <text>Whatever is acquired upon the sale, lease, license, exchange, or other disposition of collateral;</text> </level> <level label="B"> <text>Whatever is collected on, or distributed on account of, collateral;</text> </level> <level label="C"> <text>Rights arising out of collateral;</text> </level> <level label="D"> <text>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</text> </level> <level label="E"> <text>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.</text> </level> </level> <level label="66"> <text>“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.</text> </level> <level label="67"> <text>“Proposal” means a record authenticated by a secured party which includes the terms on which the secured party is willing to accept collateral in full or partial satisfaction of the obligation it secures pursuant to §§ 9–620, 9–621, and 9–622 of this article.</text> </level> <level label="68"> <text>“Public–finance transaction” means a secured transaction in connection with which:</text> <level label="A"> <text>Debt securities are issued;</text> </level> <level label="B"> <text>All or a portion of the securities issued have an initial stated maturity of at least 20 years; and</text> </level> <level label="C"> <text>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.</text> </level> </level> <level label="69"> <text>“Public organic record” means a record that is available to the public for inspection and is:</text> <level label="A"> <text>A record consisting of the record initially filed with or issued by a state or the United States to form or organize an organization and any record filed with or issued by the state or the United States which amends or restates the initial record;</text> </level> <level label="B"> <text>An organic record of a business trust consisting of the record initially filed with a state and any record filed with the state which amends or restates the initial record, if a statute of the state governing business trusts requires that the record be filed with the state; or</text> </level> <level label="C"> <text>A record consisting of legislation enacted by the legislature of a state or the Congress of the United States which forms or organizes an organization, any record amending the legislation, and any record filed with or issued by the state or the United States which amends or restates the name of the organization.</text> </level> </level> <level label="70"> <text>“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.</text> </level> <level label="71"> <text>“Record”, except as used in “for record”, “of record”, “record or legal title”, and “record owner”, means information that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.</text> </level> <level label="72"> <text>“Registered organization” means an organization formed or organized solely under the law of a single state or the United States by the filing of a public organic record with, the issuance of a public organic record by, or the enactment of legislation by the state or the United States. The term includes a business trust that is formed or organized under the law of a single state if a statute of the state governing business trusts requires that the business trust’s organic record be filed with the state.</text> </level> <level label="73"> <text>“Secondary obligor” means an obligor to the extent that:</text> <level label="A"> <text>The obligor’s obligation is secondary; or</text> </level> <level label="B"> <text>The obligor has a right of recourse with respect to an obligation secured by collateral against the debtor, another obligor, or property of either.</text> </level> </level> <level label="74"> <text>“Secured party” means:</text> <level label="A"> <text>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;</text> </level> <level label="B"> <text>A person that holds an agricultural lien;</text> </level> <level label="C"> <text>A consignor;</text> </level> <level label="D"> <text>A person to which accounts, chattel paper, payment intangibles, or promissory notes have been sold;</text> </level> <level label="E"> <text>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</text> </level> <level label="F"> <text>A person that holds a security interest arising under § 2–401, § 2–505, § 2–711(3), § 2A–508(5), § 4–210, or § 5–118 of this article.</text> </level> </level> <level label="75"> <text>“Security agreement” means an agreement that creates or provides for a security interest.</text> </level> <level label="76"> <text>“Send”, in connection with a record or notification, means:</text> <level label="A"> <text>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</text> </level> <level label="B"> <text>To cause the record or notification to be received within the time that it would have been received if properly sent under subparagraph (A).</text> </level> </level> <level label="77"> <level label="A"> <text>“Software” means a computer program and any supporting information provided in connection with a transaction relating to the program.</text> </level> <level label="B"> <text>The term does not include a computer program that is included in the definition of goods.</text> </level> </level> <level label="78"> <text>“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.</text> </level> <level label="79"> <text>“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.</text> </level> <level label="80"> <text>“Tangible chattel paper” means chattel paper evidenced by a record or records consisting of information that is inscribed on a tangible medium.</text> </level> <level label="81"> <text>“Termination statement” means an amendment of a financing statement which:</text> <level label="A"> <text>Identifies, by its file number, the initial financing statement to which it relates; and</text> </level> <level label="B"> <text>Indicates either that it is a termination statement or that the identified financing statement is no longer effective.</text> </level> </level> <level label="82"> <text>“Transmitting utility” means a person primarily engaged in the business of:</text> <level label="A"> <text>Operating a railroad, subway, street railway, or trolley bus;</text> </level> <level label="B"> <text>Transmitting communications electrically, electromagnetically, or by light;</text> </level> <level label="C"> <text>Transmitting goods by pipeline or sewer; or</text> </level> <level label="D"> <text>Transmitting or producing and transmitting electricity, steam, gas, or water.</text> </level> </level> </level> <level label="b"> <text>“Control” as provided in § 7–106 and the following definitions in other titles apply to this title:</text> <text>“Applicant” § 5–102.</text> <text>“Beneficiary” § 5–102.</text> <text>“Broker” § 8–102.</text> <text>“Certificated security” § 8–102.</text> <text>“Check” § 3–104.</text> <text>“Clearing corporation” § 8–102.</text> <text>“Contract for sale” § 2–106.</text> <text>“Customer” § 4–104.</text> <text>“Entitlement holder” § 8–102.</text> <text>“Financial asset” § 8–102.</text> <text>“Holder in due course” § 3–302.</text> <text>“Issuer” (with respect to a letter of credit or</text> <text>letter–of–credit right) § 5–102.</text> <text>“Issuer” (with respect to a security) § 8–201.</text> <text>“Issuer” (with respect to documents of title) § 7–102.</text> <text>“Lease” § 2A–103.</text> <text>“Lease agreement” § 2A–103.</text> <text>“Lease contract” § 2A–103.</text> <text>“Leasehold interest” § 2A–103.</text> <text>“Lessee” § 2A–103.</text> <text>“Lessee in ordinary course of business” § 2A–103.</text> <text>“Lessor” § 2A–103.</text> <text>“Lessor’s residual interest” § 2A–103.</text> <text>“Letter of credit” § 5–102.</text> <text>“Merchant” § 2–104.</text> <text>“Negotiable instrument” § 3–104.</text> <text>“Nominated person” § 5–102.</text> <text>“Note” § 3–104.</text> <text>“Proceeds of a letter of credit” § 5–114.</text> <text>“Prove” § 3–103.</text> <text>“Sale” § 2–106.</text> <text>“Securities account” § 8–501.</text> <text>“Securities intermediary” § 8–102.</text> <text>“Security” § 8–102.</text> <text>“Security certificate” § 8–102.</text> <text>“Security entitlement” § 8–102.</text> <text>“Uncertificated security” § 8–102.</text> </level> <level label="c"> <text>Title 1 contains general definitions and principles of construction and interpretation applicable to Titles 1 through 10 of this article.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-103" title_number="9" title_name="Secured Transactions" subtitle_number="1" subtitle_name="General Provisions"> <level label="a"> <text>In this section:</text> <level label="1"> <text>“Purchase-money collateral” means goods or software that secures a purchase-money obligation incurred with respect to that collateral; and</text> </level> <level label="2"> <text>“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.</text> </level> </level> <level label="b"> <text>A security interest in goods is a purchase-money security interest:</text> <level label="1"> <text>To the extent that the goods are purchase-money collateral with respect to that security interest;</text> </level> <level label="2"> <text>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</text> </level> <level label="3"> <text>Also to the extent that the security interest secures a purchase-money obligation incurred with respect to software in which the secured party holds or held a purchase-money security interest.</text> </level> </level> <level label="c"> <text>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:</text> <level label="1"> <text>The debtor acquired its interest in the software in an integrated transaction in which it acquired an interest in the goods; and</text> </level> <level label="2"> <text>The debtor acquired its interest in the software for the principal purpose of using the software in the goods.</text> </level> </level> <level label="d"> <text>The security interest of a consignor in goods that are the subject of a consignment is a purchase-money security interest in inventory.</text> </level> <level label="e"> <text>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:</text> <level label="1"> <text>In accordance with any reasonable method of application to which the parties agree;</text> </level> <level label="2"> <text>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</text> </level> <level label="3"> <text>In the absence of an agreement to a reasonable method and a timely manifestation of the obligor’s intention, in the following order:</text> <level label="A"> <text>To obligations that are not secured; and</text> </level> <level label="B"> <text>If more than one obligation is secured, to obligations secured by purchase-money security interests in the order in which those obligations were incurred.</text> </level> </level> </level> <level label="f"> <text>A purchase-money security interest does not lose its status as such, even if:</text> <level label="1"> <text>The purchase-money collateral also secures an obligation that is not a purchase-money obligation;</text> </level> <level label="2"> <text>Collateral that is not purchase-money collateral also secures the purchase-money obligation; or</text> </level> <level label="3"> <text>The purchase-money obligation has been renewed, refinanced, consolidated, or restructured.</text> </level> </level> <level label="g"> <text>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.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-104" title_number="9" title_name="Secured Transactions" subtitle_number="1" subtitle_name="General Provisions"> <level label="a"> <text>A secured party has control of a deposit account if:</text> <level label="1"> <text>The secured party is the bank with which the deposit account is maintained;</text> </level> <level label="2"> <text>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</text> </level> <level label="3"> <text>The secured party becomes the bank’s customer with respect to the deposit account.</text> </level> </level> <level label="b"> <text>A secured party that has satisfied subsection (a) has control, even if the debtor retains the right to direct the disposition of funds from the deposit account.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-105" title_number="9" title_name="Secured Transactions" subtitle_number="1" subtitle_name="General Provisions"> <level label="a"> <text>A secured party has control of electronic chattel paper if a system employed for evidencing the transfer of interests in the chattel paper reliably establishes the secured party as the person to which the chattel paper was assigned.</text> </level> <level label="b"> <text>A system satisfies subsection (a) if the record or records comprising the chattel paper are created, stored, and assigned in such a manner that:</text> <level label="1"> <text>A single authoritative copy of the record or records exists which is unique, identifiable and, except as otherwise provided in paragraphs (4), (5), and (6) of this section, unalterable;</text> </level> <level label="2"> <text>The authoritative copy identifies the secured party as the assignee of the record or records;</text> </level> <level label="3"> <text>The authoritative copy is communicated to and maintained by the secured party or its designated custodian;</text> </level> <level label="4"> <text>Copies or amendments that add or change an identified assignee of the authoritative copy can be made only with the consent of the secured party;</text> </level> <level label="5"> <text>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</text> </level> <level label="6"> <text>Any amendment of the authoritative copy is readily identifiable as authorized or unauthorized.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-106" title_number="9" title_name="Secured Transactions" subtitle_number="1" subtitle_name="General Provisions"> <level label="a"> <text>A person has control of a certificated security, uncertificated security, or security entitlement as provided in § 8-106 of this article.</text> </level> <level label="b"> <text>A secured party has control of a commodity contract if:</text> <level label="1"> <text>The secured party is the commodity intermediary with which the commodity contract is carried; or</text> </level> <level label="2"> <text>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.</text> </level> </level> <level label="c"> <text>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.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-107" title_number="9" title_name="Secured Transactions" subtitle_number="1" subtitle_name="General Provisions"> <text>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 § 5-114(c) of this article or otherwise applicable law or practice.</text> </section> <section article="gcl" article_name="Commercial Law" number="9-108" title_number="9" title_name="Secured Transactions" subtitle_number="1" subtitle_name="General Provisions"> <level label="a"> <text>Except as otherwise provided in subsections (c), (d), and (e), a description of personal or real property is sufficient, whether or not it is specific, if it reasonably identifies what is described.</text> </level> <level label="b"> <text>Except as otherwise provided in subsection (d), a description of collateral reasonably identifies the collateral if it identifies the collateral by:</text> <level label="1"> <text>Specific listing;</text> </level> <level label="2"> <text>Category;</text> </level> <level label="3"> <text>Except as otherwise provided in subsection (e), a type of collateral defined in Titles 1 through 10 of this article;</text> </level> <level label="4"> <text>Quantity;</text> </level> <level label="5"> <text>Computational or allocational formula or procedure; or</text> </level> <level label="6"> <text>Except as otherwise provided in subsection (c), any other method, if the identity of the collateral is objectively determinable.</text> </level> </level> <level label="c"> <text>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.</text> </level> <level label="d"> <text>Except as otherwise provided in subsection (e), a description of a security entitlement, securities account, or commodity account is sufficient if it describes:</text> <level label="1"> <text>The collateral by those terms or as investment property; or</text> </level> <level label="2"> <text>The underlying financial asset or commodity contract.</text> </level> </level> <level label="e"> <text>A description only by type of collateral defined in Titles 1 through 10 of this article is an insufficient description of:</text> <level label="1"> <text>A commercial tort claim; or</text> </level> <level label="2"> <text>In a consumer transaction, consumer goods, a security entitlement, a securities account, or a commodity account.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-109" title_number="9" title_name="Secured Transactions" subtitle_number="1" subtitle_name="General Provisions"> <level label="a"> <text>Except as otherwise provided in subsections (c) and (d), this title applies to:</text> <level label="1"> <text>A transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract;</text> </level> <level label="2"> <text>An agricultural lien;</text> </level> <level label="3"> <text>A sale of accounts, chattel paper, payment intangibles, or promissory notes;</text> </level> <level label="4"> <text>A consignment;</text> </level> <level label="5"> <text>A security interest arising under § 2–401, § 2–505, § 2–711(3), or § 2A–508(5) of this article, as provided in § 9–110; and</text> </level> <level label="6"> <text>A security interest arising under § 4–210 or § 5–118 of this article.</text> </level> </level> <level label="b"> <text>The application of this title 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 title does not apply.</text> </level> <level label="c"> <text>This title does not apply to the extent that:</text> <level label="1"> <text>A statute, regulation, or treaty of the United States preempts this title;</text> </level> <level label="2"> <text>Another statute of this State expressly governs the creation, perfection, priority, or enforcement of a security interest created by this State or a governmental unit of this State;</text> </level> <level label="3"> <text>A statute of another state, a foreign country, or a governmental unit of another state or a foreign country, other than a statute generally applicable to security interests, expressly governs creation, perfection, priority, or enforcement of a security interest created by the state, country, or governmental unit; or</text> </level> <level label="4"> <text>The rights of a transferee beneficiary or nominated person under a letter of credit are independent and superior under § 5–114 of this article.</text> </level> </level> <level label="d"> <text>This title does not apply to:</text> <level label="1"> <text>A landlord’s lien, other than an agricultural lien;</text> </level> <level label="2"> <text>A lien, other than an agricultural lien, given by statute or other rule of law for services or materials, but § 9–333 applies with respect to priority of the lien;</text> </level> <level label="3"> <text>An assignment of a claim for wages, salary, or other compensation of an employee;</text> </level> <level label="4"> <text>A sale of accounts, chattel paper, payment intangibles, or promissory notes as part of a sale of the business out of which they arose;</text> </level> <level label="5"> <text>An assignment of accounts, chattel paper, payment intangibles, or promissory notes which is for the purpose of collection only;</text> </level> <level label="6"> <text>An assignment of a right to payment under a contract to an assignee that is also obligated to perform under the contract;</text> </level> <level label="7"> <text>An assignment of a single account, payment intangible, or promissory note to an assignee in full or partial satisfaction of a preexisting indebtedness;</text> </level> <level label="8"> <text>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 §§ 9–315 and 9–322 apply with respect to proceeds and priorities in proceeds;</text> </level> <level label="9"> <text>An assignment of a right represented by a judgment, other than a judgment taken on a right to payment that was collateral;</text> </level> <level label="10"> <text>A right of recoupment or set–off, but:</text> <level label="A"> <text>§ 9–340 applies with respect to the effectiveness of rights of recoupment or set–off against deposit accounts; and</text> </level> <level label="B"> <text>§ 9–404 applies with respect to defenses or claims of an account debtor;</text> </level> </level> <level label="11"> <text>The creation or transfer of an interest in or lien on real property, including a lease or rents thereunder, except to the extent that provision is made for:</text> <level label="A"> <text>Liens on real property in §§ 9–203 and 9–308;</text> </level> <level label="B"> <text>Fixtures in § 9–334;</text> </level> <level label="C"> <text>Fixture filings in §§ 9–501, 9–502, 9–512, 9–516, and 9–519; and</text> </level> <level label="D"> <text>Security agreements covering personal and real property in § 9–604;</text> </level> </level> <level label="12"> <text>An assignment of a claim arising in tort, other than a commercial tort claim, but §§ 9–315 and 9–322 apply with respect to proceeds and priorities in proceeds; or</text> </level> <level label="13"> <text>An assignment of a deposit account in a consumer transaction, but §§ 9–315 and 9–322 apply with respect to proceeds and priorities in proceeds.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-110" title_number="9" title_name="Secured Transactions" subtitle_number="1" subtitle_name="General Provisions"> <text>A security interest arising under § 2-401, § 2-505, § 2-711(3), or § 2A-508(5) of this article is subject to this title. However, until the debtor obtains possession of the goods:</text> <level label="1"> <text>The security interest is enforceable, even if § 9-203(b)(3) has not been satisfied;</text> </level> <level label="2"> <text>Filing is not required to perfect the security interest;</text> </level> <level label="3"> <text>The rights of the secured party after default by the debtor are governed by Title 2 or 2A of this article; and</text> </level> <level label="4"> <text>The security interest has priority over a conflicting security interest created by the debtor.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-201" title_number="9" title_name="Secured Transactions" subtitle_number="2" subtitle_name="Effectiveness of Security Agreement; Attachment of Security Agreement; Rights of Parties to Security Agreement"> <level label="a"> <text>Except as otherwise provided by Titles 1 through 10 of this article, a security agreement is effective according to its terms between the parties, against purchasers of the collateral, and against creditors.</text> </level> <level label="b"> <text>A transaction subject to this title may also be subject to other statutes or regulations which establish different rules for consumers, including other statutes or regulations that regulate the rates, charges, agreements, and practices for loans, credit sales, or other extensions of credit and consumer protection statutes or regulations.</text> </level> <level label="c"> <level label="1"> <text>In case of conflict between this title and a statute or regulation described in subsection (b), the statute or regulation controls.</text> </level> <level label="2"> <text>Failure to comply with a statute or regulation described in subsection (b) has only the effect the statute specifies and no recovery for such a failure is permitted under this title.</text> </level> <level label="3"> <text>Without limiting the generality of paragraph (1) or (2) of this subsection, Subtitle 6 of this title does not impose additional duties, obligations, or responsibilities on secured parties subject to § 12-115, §§ 12-624 through 12-627, § 12-921, or § 12-1021 of this article and no recovery under § 9-625 of this title is permitted for any failure to comply with those statutes.</text> </level> </level> <level label="d"> <text>This title does not:</text> <level label="1"> <text>Validate any rate, charge, agreement, or practice that violates a statute identified or described in subsection (b);</text> </level> <level label="2"> <text>Extend the application of any rule of law, statute, or regulation to a transaction not otherwise subject to it; or</text> </level> <level label="3"> <text>Authorize or permit the application of any provision of this title which is applicable to a consumer transaction, or to any other transaction with a consumer obligor, to any transaction other than a consumer transaction.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-202" title_number="9" title_name="Secured Transactions" subtitle_number="2" subtitle_name="Effectiveness of Security Agreement; Attachment of Security Agreement; Rights of Parties to Security Agreement"> <text>Except as otherwise provided with respect to consignments or sales of accounts, chattel paper, payment intangibles, or promissory notes, the provisions of this title with regard to rights and obligations apply whether title to collateral is in the secured party or the debtor.</text> </section> <section article="gcl" article_name="Commercial Law" number="9-203" title_number="9" title_name="Secured Transactions" subtitle_number="2" subtitle_name="Effectiveness of Security Agreement; Attachment of Security Agreement; Rights of Parties to Security Agreement"> <level label="a"> <text>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.</text> </level> <level label="b"> <text>Except as otherwise provided in subsections (c) through (i), a security interest is enforceable against the debtor and third parties with respect to the collateral only if:</text> <level label="1"> <text>Value has been given;</text> </level> <level label="2"> <text>The debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party; and</text> </level> <level label="3"> <text>One of the following conditions is met:</text> <level label="A"> <text>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;</text> </level> <level label="B"> <text>The collateral is not a certificated security and is in the possession of the secured party under § 9-313 pursuant to the debtor’s security agreement;</text> </level> <level label="C"> <text>The collateral is a certificated security in registered form and the security certificate has been delivered to the secured party under § 8-301 of this article pursuant to the debtor’s security agreement; or</text> </level> <level label="D"> <text>The collateral is deposit accounts, electronic chattel paper, investment property, letter-of-credit rights, or electronic documents, and the secured party has control under § 7-106, § 9-104, § 9-105, § 9-106, or § 9-107 pursuant to the debtor’s security agreement.</text> </level> </level> </level> <level label="c"> <text>Subsection (b) is subject to § 4-210 of this article on the security interest of a collecting bank, § 5-118 of this article on the security interest of a letter-of-credit issuer or nominated person, § 9-110 on a security interest arising under Title 2 or Title 2A of this article, and § 9-206 on security interests in investment property.</text> </level> <level label="d"> <text>A person becomes bound as debtor by a security agreement entered into by another person if, by operation of law other than this title or by contract:</text> <level label="1"> <text>The security agreement becomes effective to create a security interest in the person’s property; or</text> </level> <level label="2"> <text>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.</text> </level> </level> <level label="e"> <text>If a new debtor becomes bound as debtor by a security agreement entered into by another person:</text> <level label="1"> <text>The agreement satisfies subsection (b)(3) with respect to existing or after-acquired property of the new debtor to the extent the property is described in the agreement; and</text> </level> <level label="2"> <text>Another agreement is not necessary to make a security interest in the property enforceable.</text> </level> </level> <level label="f"> <text>The attachment of a security interest in collateral gives the secured party the rights to proceeds provided by § 9-315 and is also attachment of a security interest in a supporting obligation for the collateral.</text> </level> <level label="g"> <text>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.</text> </level> <level label="h"> <text>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.</text> </level> <level label="i"> <text>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.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-204" title_number="9" title_name="Secured Transactions" subtitle_number="2" subtitle_name="Effectiveness of Security Agreement; Attachment of Security Agreement; Rights of Parties to Security Agreement"> <level label="a"> <text>Except as otherwise provided in subsection (b), a security agreement may create or provide for a security interest in after-acquired collateral.</text> </level> <level label="b"> <text>A security interest does not attach under a term constituting an after-acquired property clause to:</text> <level label="1"> <text>Consumer goods, other than an accession when given as additional security, unless the debtor acquires rights in them within 10 days after the secured party gives value; or</text> </level> <level label="2"> <text>A commercial tort claim.</text> </level> </level> <level label="c"> <text>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.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-205" title_number="9" title_name="Secured Transactions" subtitle_number="2" subtitle_name="Effectiveness of Security Agreement; Attachment of Security Agreement; Rights of Parties to Security Agreement"> <level label="a"> <text>A security interest is not invalid or fraudulent against creditors solely because:</text> <level label="1"> <text>The debtor has the right or ability to:</text> <level label="A"> <text>Use, commingle, or dispose of all or part of the collateral, including returned or repossessed goods;</text> </level> <level label="B"> <text>Collect, compromise, enforce, or otherwise deal with collateral;</text> </level> <level label="C"> <text>Accept the return of collateral or make repossessions; or</text> </level> <level label="D"> <text>Use, commingle, or dispose of proceeds; or</text> </level> </level> <level label="2"> <text>The secured party fails to require the debtor to account for proceeds or replace collateral.</text> </level> </level> <level label="b"> <text>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.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-206" title_number="9" title_name="Secured Transactions" subtitle_number="2" subtitle_name="Effectiveness of Security Agreement; Attachment of Security Agreement; Rights of Parties to Security Agreement"> <level label="a"> <text>A security interest in favor of a securities intermediary attaches to a person’s security entitlement if:</text> <level label="1"> <text>The person buys a financial asset through the securities intermediary in a transaction in which the person is obligated to pay the purchase price to the securities intermediary at the time of the purchase; and</text> </level> <level label="2"> <text>The securities intermediary credits the financial asset to the buyer’s securities account before the buyer pays the securities intermediary.</text> </level> </level> <level label="b"> <text>The security interest described in subsection (a) secures the person’s obligation to pay for the financial asset.</text> </level> <level label="c"> <text>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:</text> <level label="1"> <text>The security or other financial asset:</text> <level label="A"> <text>In the ordinary course of business is transferred by delivery with any necessary indorsement or assignment; and</text> </level> <level label="B"> <text>Is delivered under an agreement between persons in the business of dealing with such securities or financial assets; and</text> </level> </level> <level label="2"> <text>The agreement calls for delivery against payment.</text> </level> </level> <level label="d"> <text>The security interest described in subsection (c) secures the obligation to make payment for the delivery.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-207" title_number="9" title_name="Secured Transactions" subtitle_number="2" subtitle_name="Effectiveness of Security Agreement; Attachment of Security Agreement; Rights of Parties to Security Agreement"> <level label="a"> <text>Except as otherwise provided in subsection (d), a secured party shall use reasonable care in the custody and preservation of collateral in the secured party’s possession. In the case of chattel paper or an instrument, reasonable care includes taking necessary steps to preserve rights against prior parties unless otherwise agreed.</text> </level> <level label="b"> <text>Except as otherwise provided in subsection (d), if a secured party has possession of collateral:</text> <level label="1"> <text>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;</text> </level> <level label="2"> <text>The risk of accidental loss or damage is on the debtor to the extent of a deficiency in any effective insurance coverage;</text> </level> <level label="3"> <text>The secured party shall keep the collateral identifiable, but fungible collateral may be commingled; and</text> </level> <level label="4"> <text>The secured party may use or operate the collateral:</text> <level label="A"> <text>For the purpose of preserving the collateral or its value;</text> </level> <level label="B"> <text>As permitted by an order of a court having competent jurisdiction; or</text> </level> <level label="C"> <text>Except in the case of consumer goods, in the manner and to the extent agreed by the debtor.</text> </level> </level> </level> <level label="c"> <text>Except as otherwise provided in subsection (d), a secured party having possession of collateral or control of collateral under § 7-106, § 9-104, § 9-105, § 9-106, or § 9-107:</text> <level label="1"> <text>May hold as additional security any proceeds, except money or funds, received from the collateral;</text> </level> <level label="2"> <text>Shall apply money or funds received from the collateral to reduce the secured obligation, unless remitted to the debtor; and</text> </level> <level label="3"> <text>May create a security interest in the collateral.</text> </level> </level> <level label="d"> <text>If the secured party is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor:</text> <level label="1"> <text>Subsection (a) does not apply unless the secured party is entitled under an agreement:</text> <level label="A"> <text>To charge back uncollected collateral; or</text> </level> <level label="B"> <text>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</text> </level> </level> <level label="2"> <text>Subsections (b) and (c) do not apply.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-208" title_number="9" title_name="Secured Transactions" subtitle_number="2" subtitle_name="Effectiveness of Security Agreement; Attachment of Security Agreement; Rights of Parties to Security Agreement"> <level label="a"> <text>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.</text> </level> <level label="b"> <text>Within 10 days after receiving an authenticated demand by the debtor:</text> <level label="1"> <text>A secured party having control of a deposit account under § 9-104(a)(2) 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;</text> </level> <level label="2"> <text>A secured party having control of a deposit account under § 9-104(a)(3) shall:</text> <level label="A"> <text>Pay the debtor the balance on deposit in the deposit account; or</text> </level> <level label="B"> <text>Transfer the balance on deposit into a deposit account in the debtor’s name;</text> </level> </level> <level label="3"> <text>A secured party, other than a buyer, having control of electronic chattel paper under § 9-105 shall:</text> <level label="A"> <text>Communicate the authoritative copy of the electronic chattel paper to the debtor or its designated custodian;</text> </level> <level label="B"> <text>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</text> </level> <level label="C"> <text>Take appropriate action to enable the debtor or its designated custodian to make copies of or revisions to the authoritative copy which add or change an identified assignee of the authoritative copy without the consent of the secured party;</text> </level> </level> <level label="4"> <text>A secured party having control of investment property under § 8-106(d)(2) of this article or § 9-106(b) shall send to the securities intermediary or commodity intermediary with which the security entitlement or commodity contract is maintained an authenticated record that releases the securities intermediary or commodity intermediary from any further obligation to comply with entitlement orders or directions originated by the secured party;</text> </level> <level label="5"> <text>A secured party having control of a letter-of-credit right under § 9-107 shall send to each person having an unfulfilled obligation to pay or deliver proceeds of the letter of credit to the secured party an authenticated release from any further obligation to pay or deliver proceeds of the letter of credit to the secured party; and</text> </level> <level label="6"> <text>A secured party having control of an electronic document shall:</text> <level label="A"> <text>Give control of the electronic document to the debtor or its designated custodian;</text> </level> <level label="B"> <text>If the debtor designates a custodian that is the designated custodian with which the authoritative copy of the electronic document 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</text> </level> <level label="C"> <text>Take appropriate action to enable the debtor or its designated custodian to make copies of or revisions to the authoritative copy which add or change an identified assignee of the authoritative copy without the consent of the secured party.</text> </level> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-209" title_number="9" title_name="Secured Transactions" subtitle_number="2" subtitle_name="Effectiveness of Security Agreement; Attachment of Security Agreement; Rights of Parties to Security Agreement"> <level label="a"> <text>Except as otherwise provided in subsection (c), this section applies if:</text> <level label="1"> <text>There is no outstanding secured obligation; and</text> </level> <level label="2"> <text>The secured party is not committed to make advances, incur obligations, or otherwise give value.</text> </level> </level> <level label="b"> <text>Within 10 days after receiving an authenticated demand by the debtor, a secured party shall send to an account debtor that has received notification of an assignment to the secured party as assignee under § 9-406(a) an authenticated record that releases the account debtor from any further obligation to the secured party.</text> </level> <level label="c"> <text>This section does not apply to an assignment constituting the sale of an account, chattel paper, or payment intangible.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-210" title_number="9" title_name="Secured Transactions" subtitle_number="2" subtitle_name="Effectiveness of Security Agreement; Attachment of Security Agreement; Rights of Parties to Security Agreement"> <level label="a"> <text>In this section:</text> <level label="1"> <text>“Request” means a record of a type described in paragraph (2), (3), or (4).</text> </level> <level label="2"> <text>“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.</text> </level> <level label="3"> <text>“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.</text> </level> <level label="4"> <text>“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.</text> </level> </level> <level label="b"> <text>Subject to subsections (c), (d), (e), and (f), a secured party, other than a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor, shall comply with a request within 14 days after receipt:</text> <level label="1"> <text>In the case of a request for an accounting, by authenticating and sending to the debtor an accounting; and</text> </level> <level label="2"> <text>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.</text> </level> </level> <level label="c"> <text>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 14 days after receipt.</text> </level> <level label="d"> <text>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 14 days after receipt by sending to the debtor an authenticated record:</text> <level label="1"> <text>Disclaiming any interest in the collateral; and</text> </level> <level label="2"> <text>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.</text> </level> </level> <level label="e"> <text>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 14 days after receipt by sending to the debtor an authenticated record:</text> <level label="1"> <text>Disclaiming any interest in the obligations; and</text> </level> <level label="2"> <text>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.</text> </level> </level> <level label="f"> <text>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 $25 for each additional response.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-301" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <text>Except as otherwise provided in §§ 9-303 through 9-306, the following rules determine the law governing perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral:</text> <level label="1"> <text>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.</text> </level> <level label="2"> <text>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.</text> </level> <level label="3"> <text>Except as otherwise provided in paragraph (4), while tangible negotiable documents, goods, instruments, money, or tangible chattel paper is located in a jurisdiction, the local law of that jurisdiction governs:</text> <level label="A"> <text>Perfection of a security interest in the goods by filing a fixture filing;</text> </level> <level label="B"> <text>Perfection of a security interest in timber to be cut; and</text> </level> <level label="C"> <text>The effect of perfection or nonperfection and the priority of a nonpossessory security interest in the collateral.</text> </level> </level> <level label="4"> <text>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.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-302" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <text>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.</text> </section> <section article="gcl" article_name="Commercial Law" number="9-303" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>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.</text> </level> <level label="b"> <text>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.</text> </level> <level label="c"> <text>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.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-304" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>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.</text> </level> <level label="b"> <text>The following rules determine a bank’s jurisdiction for purposes of this subtitle:</text> <level label="1"> <text>If an agreement between the bank and its customer governing the deposit account expressly provides that a particular jurisdiction is the bank’s jurisdiction for purposes of this subtitle, this title, or Titles 1 through 10 of this article, that jurisdiction is the bank’s jurisdiction.</text> </level> <level label="2"> <text>If paragraph (1) 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.</text> </level> <level label="3"> <text>If neither paragraph (1) nor paragraph (2) 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.</text> </level> <level label="4"> <text>If none of the preceding paragraphs applies, the bank’s jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the customer’s account is located.</text> </level> <level label="5"> <text>If none of the preceding paragraphs applies, the bank’s jurisdiction is the jurisdiction in which the chief executive office of the bank is located.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-305" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>Except as otherwise provided in subsection (c), the following rules apply:</text> <level label="1"> <text>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.</text> </level> <level label="2"> <text>The local law of the issuer’s jurisdiction as specified in § 8-110(d) of this article governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in an uncertificated security.</text> </level> <level label="3"> <text>The local law of the securities intermediary’s jurisdiction as specified in § 8-110(e) of this article governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a security entitlement or securities account.</text> </level> <level label="4"> <text>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.</text> </level> </level> <level label="b"> <text>The following rules determine a commodity intermediary’s jurisdiction for purposes of this subtitle:</text> <level label="1"> <text>If an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that a particular jurisdiction is the commodity intermediary’s jurisdiction for purposes of this subtitle, this title, or Titles 1 through 10 of this article, that jurisdiction is the commodity intermediary’s jurisdiction.</text> </level> <level label="2"> <text>If paragraph (1) 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.</text> </level> <level label="3"> <text>If neither paragraph (1) nor paragraph (2) 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.</text> </level> <level label="4"> <text>If none of the preceding paragraphs applies, the commodity intermediary’s jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the commodity customer’s account is located.</text> </level> <level label="5"> <text>If none of the preceding paragraphs applies, the commodity intermediary’s jurisdiction is the jurisdiction in which the chief executive office of the commodity intermediary is located.</text> </level> </level> <level label="c"> <text>The local law of the jurisdiction in which the debtor is located governs:</text> <level label="1"> <text>Perfection of a security interest in investment property by filing;</text> </level> <level label="2"> <text>Automatic perfection of a security interest in investment property created by a broker or securities intermediary; and</text> </level> <level label="3"> <text>Automatic perfection of a security interest in a commodity contract or commodity account created by a commodity intermediary.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-306" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>Subject to subsection (c), the local law of the issuer’s jurisdiction or a nominated person’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a letter-of-credit right if the issuer’s jurisdiction or nominated person’s jurisdiction is a state.</text> </level> <level label="b"> <text>For purposes of this part, an issuer’s jurisdiction or nominated person’s jurisdiction is the jurisdiction whose law governs the liability of the issuer or nominated person with respect to the letter-of-credit right as provided in § 5-116 of this article.</text> </level> <level label="c"> <text>This section does not apply to a security interest that is perfected only under § 9-308(d).</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-307" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>In this section, “place of business” means a place where a debtor conducts its affairs.</text> </level> <level label="b"> <text>Except as otherwise provided in this section, the following rules determine a debtor’s location:</text> <level label="1"> <text>A debtor who is an individual is located at the individual’s principal residence.</text> </level> <level label="2"> <text>A debtor that is an organization and has only one place of business is located at its place of business.</text> </level> <level label="3"> <text>A debtor that is an organization and has more than one place of business is located at its chief executive office.</text> </level> </level> <level label="c"> <text>Subsection (b) applies only if a debtor’s residence, place of business, or chief executive office, as applicable, is located in a jurisdiction whose law generally requires information concerning the existence of a nonpossessory security interest to be made generally available in a filing, recording, or registration system as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the collateral. If subsection (b) does not apply, the debtor is located in the District of Columbia.</text> </level> <level label="d"> <text>A person that ceases to exist, have a residence, or have a place of business continues to be located in the jurisdiction specified by subsections (b) and (c).</text> </level> <level label="e"> <text>A registered organization that is organized under the law of a state is located in that state.</text> </level> <level label="f"> <text>Except as otherwise provided in subsection (i), 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:</text> <level label="1"> <text>In the state that the law of the United States designates, if the law designates a state of location;</text> </level> <level label="2"> <text>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, including by designating its main office, home office, or other comparable office; or</text> </level> <level label="3"> <text>In the District of Columbia, if neither paragraph (1) nor paragraph (2) applies.</text> </level> </level> <level label="g"> <text>A registered organization continues to be located in the jurisdiction specified by subsection (e) or (f) notwithstanding:</text> <level label="1"> <text>The suspension, revocation, forfeiture, or lapse of the registered organization’s status as such in its jurisdiction of organization; or</text> </level> <level label="2"> <text>The dissolution, winding up, or cancellation of the existence of the registered organization.</text> </level> </level> <level label="h"> <text>The United States is located in the District of Columbia.</text> </level> <level label="i"> <text>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.</text> </level> <level label="j"> <text>A foreign air carrier under the Federal Aviation Act of 1958, as amended, is located at the designated office of the agent upon which service of process may be made on behalf of the carrier.</text> </level> <level label="k"> <text>This section applies only for purposes of this subtitle.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-308" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>Except as otherwise provided in this section and § 9-309, a security interest is perfected if it has attached and all of the applicable requirements for perfection in §§ 9-310 through 9-316 have been satisfied. A security interest is perfected when it attaches if the applicable requirements are satisfied before the security interest attaches.</text> </level> <level label="b"> <text>An agricultural lien is perfected if it has become effective and all of the applicable requirements for perfection in § 9-310 have been satisfied. An agricultural lien is perfected when it becomes effective if the applicable requirements are satisfied before the agricultural lien becomes effective.</text> </level> <level label="c"> <text>A security interest or agricultural lien is perfected continuously if it is originally perfected by one method under this article and is later perfected by another method under this article, without an intermediate period when it was unperfected.</text> </level> <level label="d"> <text>Perfection of a security interest in collateral also perfects a security interest in a supporting obligation for the collateral.</text> </level> <level label="e"> <text>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.</text> </level> <level label="f"> <text>Perfection of a security interest in a securities account also perfects a security interest in the security entitlements carried in the securities account.</text> </level> <level label="g"> <text>Perfection of a security interest in a commodity account also perfects a security interest in the commodity contracts carried in the commodity account.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-309" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <text>The following security interests are perfected when they attach:</text> <level label="1"> <text>A purchase-money security interest in consumer goods, except as otherwise provided in § 9-311(b) with respect to consumer goods that are subject to a statute or treaty described in § 9-311(a);</text> </level> <level label="2"> <text>An assignment of accounts or payment intangibles which does not by itself or in conjunction with other assignments to the same assignee transfer a significant part of the assignor’s outstanding accounts or payment intangibles;</text> </level> <level label="3"> <text>A sale of a payment intangible;</text> </level> <level label="4"> <text>A sale of a promissory note;</text> </level> <level label="5"> <text>A security interest created by the assignment of a health-care-insurance receivable to the provider of the health-care goods or services;</text> </level> <level label="6"> <text>A security interest arising under § 2-401, § 2-505, § 2-711(3), or § 2A-508(5) of this article, until the debtor obtains possession of the collateral;</text> </level> <level label="7"> <text>A security interest of a collecting bank arising under § 4-210 of this article;</text> </level> <level label="8"> <text>A security interest of an issuer or nominated person arising under § 5-118 of this article;</text> </level> <level label="9"> <text>A security interest arising in the delivery of a financial asset under § 9-206(c);</text> </level> <level label="10"> <text>A security interest in investment property created by a broker or securities intermediary;</text> </level> <level label="11"> <text>A security interest in a commodity contract or a commodity account created by a commodity intermediary;</text> </level> <level label="12"> <text>An assignment for the benefit of all creditors of the transferor and subsequent transfers by the assignee thereunder;</text> </level> <level label="13"> <text>A security interest created by an assignment of a beneficial interest in a decedent’s estate; and</text> </level> <level label="14"> <text>A sale by an individual of an account that is a right to payment of winnings in a lottery or other game of chance.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-310" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>Except as otherwise provided in subsection (b) and § 9-312(b), a financing statement must be filed to perfect all security interests and agricultural liens.</text> </level> <level label="b"> <text>The filing of a financing statement is not necessary to perfect a security interest:</text> <level label="1"> <text>That is perfected under § 9-308(d), (e), (f), or (g);</text> </level> <level label="2"> <text>That is perfected under § 9-309 when it attaches;</text> </level> <level label="3"> <text>In property subject to a statute, regulation, or treaty described in § 9-311(a);</text> </level> <level label="4"> <text>In goods in possession of a bailee which is perfected under § 9-312(d)(1) or (2);</text> </level> <level label="5"> <text>In certificated securities, documents, goods, or instruments which is perfected without filing, control, or possession under § 9-312(e), (f), or (g);</text> </level> <level label="6"> <text>In collateral in the secured party’s possession under § 9-313;</text> </level> <level label="7"> <text>In a certificated security which is perfected by delivery of the security certificate to the secured party under § 9-313;</text> </level> <level label="8"> <text>In deposit accounts, electronic chattel paper, electronic documents, investment property, or letter-of-credit rights which is perfected by control under § 9-314;</text> </level> <level label="9"> <text>In proceeds which is perfected under § 9-315; or</text> </level> <level label="10"> <text>That is perfected under § 9-316.</text> </level> </level> <level label="c"> <text>If a secured party assigns a perfected security interest or agricultural lien, a filing under this article is not required to continue the perfected status of the security interest against creditors of and transferees from the original debtor.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-311" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>Except as otherwise provided in subsection (d), the filing of a financing statement is not necessary or effective to perfect a security interest in property subject to:</text> <level label="1"> <text>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 § 9–310(a);</text> </level> <level label="2"> <text>Any statute of this State which provides for a security interest to be indicated on a certificate of title as a condition or result of perfection; or</text> </level> <level label="3"> <text>A statute of another jurisdiction which provides for a security interest to be indicated on a certificate of title as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the property.</text> </level> </level> <level label="b"> <text>Compliance with the requirements of a statute, regulation, or treaty described in subsection (a) for obtaining priority over the rights of a lien creditor is equivalent to the filing of a financing statement under this title, provided that the time for perfection will be governed by that statute, regulation, or treaty. Except as otherwise provided in subsection (d) and §§ 9–313 and 9–316(d) and (e) for goods covered by a certificate of title, a security interest in property subject to a statute, regulation, or treaty described in subsection (a) may be perfected only by compliance with those requirements, and a security interest so perfected remains perfected notwithstanding a change in the use or transfer of possession of the collateral.</text> </level> <level label="c"> <text>Except as otherwise provided in subsection (d) and § 9–316(d) and (e), duration and renewal of perfection of a security interest perfected by compliance with the requirements prescribed by a statute, regulation, or treaty described in subsection (a) are governed by the statute, regulation, or treaty. In other respects, the security interest is subject to this article.</text> </level> <level label="d"> <text>During any period in which collateral subject to a statute specified in subsection (a)(2) 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.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-312" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>A security interest in chattel paper, negotiable documents, instruments, or investment property may be perfected by filing.</text> </level> <level label="b"> <text>Except as otherwise provided in § 9-315(c) and (d) for proceeds:</text> <level label="1"> <text>A security interest in a deposit account may be perfected only by control under § 9-314;</text> </level> <level label="2"> <text>Except as otherwise provided in § 9-308(d), a security interest in a letter-of-credit right may be perfected only by control under § 9-314; and</text> </level> <level label="3"> <text>A security interest in money may be perfected only by the secured party’s taking possession under § 9-313.</text> </level> </level> <level label="c"> <text>While goods are in the possession of a bailee that has issued a negotiable document covering the goods:</text> <level label="1"> <text>A security interest in the goods may be perfected by perfecting a security interest in the document; and</text> </level> <level label="2"> <text>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.</text> </level> </level> <level label="d"> <text>While goods are in the possession of a bailee that has issued a nonnegotiable document covering the goods, a security interest in the goods may be perfected by:</text> <level label="1"> <text>Issuance of a document in the name of the secured party;</text> </level> <level label="2"> <text>The bailee’s receipt of notification of the secured party’s interest; or</text> </level> <level label="3"> <text>Filing as to the goods.</text> </level> </level> <level label="e"> <text>A security interest in certificated securities, negotiable documents, or instruments is perfected without filing or the taking of possession or control for a period of 20 days from the time it attaches to the extent that it arises for new value given under an authenticated security agreement.</text> </level> <level label="f"> <text>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 20 days without filing if the secured party makes available to the debtor the goods or documents representing the goods for the purpose of:</text> <level label="1"> <text>Ultimate sale or exchange; or</text> </level> <level label="2"> <text>Loading, unloading, storing, shipping, transshipping, manufacturing, processing, or otherwise dealing with them in a manner preliminary to their sale or exchange.</text> </level> </level> <level label="g"> <text>A perfected security interest in a certificated security or instrument remains perfected for 20 days without filing if the secured party delivers the security certificate or instrument to the debtor for the purpose of:</text> <level label="1"> <text>Ultimate sale or exchange; or</text> </level> <level label="2"> <text>Presentation, collection, enforcement, renewal, or registration of transfer.</text> </level> </level> <level label="h"> <text>After the 20-day period specified in subsection (e), subsection (f), or subsection (g) expires, perfection depends upon compliance with this title.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-313" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>Except as otherwise provided in subsection (b), a secured party may perfect a security interest in tangible 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 § 8-301 of this article.</text> </level> <level label="b"> <text>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 § 9-316(d).</text> </level> <level label="c"> <text>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:</text> <level label="1"> <text>The person in possession authenticates a record acknowledging that it holds possession of the collateral for the secured party’s benefit; or</text> </level> <level label="2"> <text>The person takes possession of the collateral after having authenticated a record acknowledging that it will hold possession of collateral for the secured party’s benefit.</text> </level> </level> <level label="d"> <text>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.</text> </level> <level label="e"> <text>A security interest in a certificated security in registered form is perfected by delivery when delivery of the certificated security occurs under § 8-301 of this article and remains perfected by delivery until the debtor obtains possession of the security certificate.</text> </level> <level label="f"> <text>A person in possession of collateral is not required to acknowledge that it holds possession for a secured party’s benefit.</text> </level> <level label="g"> <text>If a person acknowledges that it holds possession for the secured party’s benefit:</text> <level label="1"> <text>The acknowledgment is effective under subsection (c) or § 8-301(a) of this article, even if the acknowledgment violates the rights of a debtor; and</text> </level> <level label="2"> <text>Unless the person otherwise agrees or law other than this article otherwise provides, the person does not owe any duty to the secured party and is not required to confirm the acknowledgment to another person.</text> </level> </level> <level label="h"> <text>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:</text> <level label="1"> <text>To hold possession of the collateral for the secured party’s benefit; or</text> </level> <level label="2"> <text>To redeliver the collateral to the secured party.</text> </level> </level> <level label="i"> <text>A secured party does not relinquish possession, even if a delivery under subsection (h) violates the rights of a debtor. A person to which collateral is delivered under subsection (h) does not owe any duty to the secured party and is not required to confirm the delivery to another person unless the person otherwise agrees or law other than this article otherwise provides.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-314" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>A security interest in investment property, deposit accounts, letter-of-credit rights, electronic chattel paper, or electronic documents may be perfected by control of the collateral under § 7-106, § 9-104, § 9-105, § 9-106, or § 9-107.</text> </level> <level label="b"> <text>A security interest in deposit accounts, electronic chattel paper, letter-of-credit rights, or electronic documents is perfected by control under § 7-106, § 9-104, § 9-105, or § 9-107 when the secured party obtains control and remains perfected by control only while the secured party retains control.</text> </level> <level label="c"> <text>A security interest in investment property is perfected by control under § 9-106 from the time the secured party obtains control and remains perfected by control until:</text> <level label="1"> <text>The secured party does not have control; and</text> </level> <level label="2"> <text>One of the following occurs:</text> <level label="A"> <text>If the collateral is a certificated security, the debtor has or acquires possession of the security certificate;</text> </level> <level label="B"> <text>If the collateral is an uncertificated security, the issuer has registered or registers the debtor as the registered owner; or</text> </level> <level label="C"> <text>If the collateral is a security entitlement, the debtor is or becomes the entitlement holder.</text> </level> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-315" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>Except as otherwise provided in this title and in § 2-403(2) of this article:</text> <level label="1"> <text>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</text> </level> <level label="2"> <text>A security interest attaches to any identifiable proceeds of collateral.</text> </level> </level> <level label="b"> <text>Proceeds that are commingled with other property are identifiable proceeds:</text> <level label="1"> <text>If the proceeds are goods, to the extent provided by § 9-336; and</text> </level> <level label="2"> <text>If the proceeds are not goods, to the extent that the secured party identifies the proceeds by a method of tracing, including application of equitable principles, that is permitted under law other than this article with respect to commingled property of the type involved.</text> </level> </level> <level label="c"> <text>A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected.</text> </level> <level label="d"> <text>A perfected security interest in proceeds becomes unperfected on the 21st day after the security interest attaches to the proceeds unless:</text> <level label="1"> <text>The following conditions are satisfied:</text> <level label="A"> <text>A filed financing statement covers the original collateral;</text> </level> <level label="B"> <text>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</text> </level> <level label="C"> <text>The proceeds are not acquired with cash proceeds;</text> </level> </level> <level label="2"> <text>The proceeds are identifiable cash proceeds; or</text> </level> <level label="3"> <text>The security interest in the proceeds is perfected other than under subsection (c) when the security interest attaches to the proceeds or within 20 days thereafter.</text> </level> </level> <level label="e"> <text>If a filed financing statement covers the original collateral, a security interest in proceeds which remains perfected under subsection (d)(1) becomes unperfected at the later of:</text> <level label="1"> <text>When the effectiveness of the filed financing statement lapses under § 9-515 or is terminated under § 9-513; or</text> </level> <level label="2"> <text>The 21st day after the security interest attaches to the proceeds.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-316" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>A security interest perfected pursuant to the law of the jurisdiction designated in § 9–301(1) or § 9–305(c) remains perfected until the earliest of:</text> <level label="1"> <text>The time perfection would have ceased under the law of that jurisdiction;</text> </level> <level label="2"> <text>The expiration of four months after a change of the debtor’s location to another jurisdiction; or</text> </level> <level label="3"> <text>The expiration of one year after a transfer of collateral to a person that thereby becomes a debtor and is located in another jurisdiction.</text> </level> </level> <level label="b"> <text>If a security interest described in subsection (a) becomes perfected under the law of the other jurisdiction before the earliest time or event described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earliest time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.</text> </level> <level label="c"> <text>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:</text> <level label="1"> <text>The collateral is located in one jurisdiction and subject to a security interest perfected under the law of that jurisdiction;</text> </level> <level label="2"> <text>Thereafter the collateral is brought into another jurisdiction; and</text> </level> <level label="3"> <text>Upon entry into the other jurisdiction, the security interest is perfected under the law of the other jurisdiction.</text> </level> </level> <level label="d"> <text>Except as otherwise provided in subsection (e), a security interest in goods covered by a certificate of title which is perfected by any method under the law of another jurisdiction when the goods become covered by a certificate of title from this State remains perfected until the security interest would have become unperfected under the law of the other jurisdiction had the goods not become so covered.</text> </level> <level label="e"> <text>A security interest described in subsection (d) becomes unperfected as against a purchaser of the goods for value and is deemed never to have been perfected as against a purchaser of the goods for value if the applicable requirements for perfection under § 9–311(b) or § 9–313 are not satisfied before the earlier of:</text> <level label="1"> <text>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</text> </level> <level label="2"> <text>The expiration of four months after the goods had become so covered.</text> </level> </level> <level label="f"> <text>A security interest in deposit accounts, letter–of–credit rights, or investment property which is perfected under the law of the bank’s jurisdiction, the issuer’s jurisdiction, a nominated person’s jurisdiction, the securities intermediary’s jurisdiction, or the commodity intermediary’s jurisdiction, as applicable, remains perfected until the earlier of:</text> <level label="1"> <text>The time the security interest would have become unperfected under the law of that jurisdiction; or</text> </level> <level label="2"> <text>The expiration of four months after a change of the applicable jurisdiction to another jurisdiction.</text> </level> </level> <level label="g"> <text>If a security interest described in subsection (f) becomes perfected under the law of the other jurisdiction before the earlier of the time or the end of the period described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earlier of that time or the end of that period, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.</text> </level> <level label="h"> <text>The following rules apply to collateral to which a security interest attaches within four months after the debtor changes its location to another jurisdiction:</text> <level label="1"> <text>A financing statement filed before the change pursuant to the law of the jurisdiction designated in § 9–301(1) or § 9–305(c) is effective to perfect a security interest in the collateral if the financing statement would have been effective to perfect a security interest in the collateral had the debtor not changed its location;</text> </level> <level label="2"> <text>If a security interest perfected by a financing statement that is effective under paragraph (1) becomes perfected under the law of the other jurisdiction before the earlier of the time the financing statement would have become ineffective under the law of the jurisdiction designated in § 9–301(1) or § 9–305(c) or the expiration of the four–month period, it remains perfected thereafter; and</text> </level> <level label="3"> <text>If the security interest does not become perfected under the law of the other jurisdiction before the earlier time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.</text> </level> </level> <level label="i"> <text>If a financing statement naming an original debtor is filed pursuant to the law of the jurisdiction designated in § 9–301(1) or § 9–305(c) and the new debtor is located in another jurisdiction, the following rules apply:</text> <level label="1"> <text>The financing statement is effective to perfect a security interest in collateral acquired by the new debtor before, and within four months after, the new debtor becomes bound under § 9–203(d), if the financing statement would have been effective to perfect a security interest in the collateral had the collateral been acquired by the original debtor;</text> </level> <level label="2"> <text>A security interest perfected by the financing statement and which becomes perfected under the law of the other jurisdiction before the earlier of the time the financing statement would have become ineffective under the law of the jurisdiction designated in § 9–301(1) or § 9–305(c) or the expiration of the four–month period remains perfected thereafter; and</text> </level> <level label="3"> <text>A security interest that is perfected by the financing statement but which does not become perfected under the law of the other jurisdiction before the earlier time or event becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-317" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>A security interest or agricultural lien is subordinate to the rights of:</text> <level label="1"> <text>A person entitled to priority under § 9–322; and</text> </level> <level label="2"> <text>Except as provided in subsection (e), a person that becomes a lien creditor before the earlier of the time:</text> <level label="A"> <text>The security interest or agricultural lien is perfected; or</text> </level> <level label="B"> <text>One of the conditions specified in § 9–203(b)(3) is met and a financing statement covering the collateral is filed.</text> </level> </level> </level> <level label="b"> <text>Except as otherwise provided in subsection (e), a buyer, other than a secured party, of tangible chattel paper, tangible documents, goods, instruments, or a certificated security 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.</text> </level> <level label="c"> <text>Except as otherwise provided in subsection (e), a lessee of goods takes free of a security interest or agricultural lien if the lessee gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected.</text> </level> <level label="d"> <text>A licensee of a general intangible or a buyer, other than a secured party, of collateral other than tangible chattel paper, tangible documents, goods, instruments, or 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.</text> </level> <level label="e"> <text>Except as otherwise provided in §§ 9–320 and 9–321, if a person files a financing statement with respect to a purchase–money security interest before or within 20 days after the debtor receives delivery of the collateral, the security interest takes priority over the rights of a buyer, lessee, or lien creditor which arise between the time the security interest attaches and the time of filing.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-318" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>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.</text> </level> <level label="b"> <text>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.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-319" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>Except as otherwise provided in subsection (b), for purposes of determining the rights of creditors of, and purchasers for value of goods from, a consignee, while the goods are in the possession of the consignee, the consignee is deemed to have rights and title to the goods identical to those the consignor had or had power to transfer.</text> </level> <level label="b"> <text>For purposes of determining the rights of a creditor of a consignee, law other than this title determines the rights and title of a consignee while goods are in the consignee’s possession if, under this subtitle, a perfected security interest held by the consignor would have priority over the rights of the creditor.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-320" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>Except as otherwise provided in subsection (e), a buyer in ordinary course of business, other than a person buying farm products from a person engaged in farming operations, takes free of a security interest created by the buyer’s seller, even if the security interest is perfected and the buyer knows of its existence.</text> </level> <level label="b"> <text>Except as otherwise provided in subsection (e), a buyer of goods from a person who used or bought the goods for use primarily for personal, family, or household purposes takes free of a security interest, even if perfected, if the buyer buys:</text> <level label="1"> <text>Without knowledge of the security interest;</text> </level> <level label="2"> <text>For value;</text> </level> <level label="3"> <text>Primarily for the buyer’s personal, family, or household purposes; and</text> </level> <level label="4"> <text>Before the filing of a financing statement covering the goods.</text> </level> </level> <level label="c"> <text>To the extent that it affects the priority of a security interest over a buyer of goods under subsection (b), the period of effectiveness of a filing made in the jurisdiction in which the seller is located is governed by § 9-316(a) and (b).</text> </level> <level label="d"> <text>A buyer in ordinary course of business buying oil, gas, or other minerals at the wellhead or minehead or after extraction takes free of an interest arising out of an encumbrance.</text> </level> <level label="e"> <text>Subsections (a) and (b) do not affect a security interest in goods in the possession of the secured party under § 9-313.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-321" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>In this section, “licensee in ordinary course of business” means a person that becomes a licensee of a general intangible in good faith, without knowledge that the license violates the rights of another person in the general intangible, and in the ordinary course from a person in the business of licensing general intangibles of that kind. A person becomes a licensee in the ordinary course if the license to the person comports with the usual or customary practices in the kind of business in which the licensor is engaged or with the licensor’s own usual or customary practices.</text> </level> <level label="b"> <text>A licensee in ordinary course of business takes its rights under a nonexclusive license free of a security interest in the general intangible created by the licensor, even if the security interest is perfected and the licensee knows of its existence.</text> </level> <level label="c"> <text>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.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-322" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>Except as otherwise provided in this section, priority among conflicting security interests and agricultural liens in the same collateral is determined according to the following rules:</text> <level label="1"> <text>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.</text> </level> <level label="2"> <text>A perfected security interest or agricultural lien has priority over a conflicting unperfected security interest or agricultural lien.</text> </level> <level label="3"> <text>The first security interest or agricultural lien to attach or become effective has priority if conflicting security interests and agricultural liens are unperfected.</text> </level> </level> <level label="b"> <text>For the purposes of subsection (a)(1) of this section:</text> <level label="1"> <text>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</text> </level> <level label="2"> <text>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.</text> </level> </level> <level label="c"> <text>Except as otherwise provided in subsection (f), a security interest in collateral which qualifies for priority over a conflicting security interest under § 9-327, § 9-328, § 9-329, § 9-330, or § 9-331 also has priority over a conflicting security interest in:</text> <level label="1"> <text>Any supporting obligation for the collateral; and</text> </level> <level label="2"> <text>Proceeds of the collateral if:</text> <level label="A"> <text>The security interest in proceeds is perfected;</text> </level> <level label="B"> <text>The proceeds are cash proceeds or of the same type as the collateral; and</text> </level> <level label="C"> <text>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.</text> </level> </level> </level> <level label="d"> <text>Subject to subsection (e) and except as otherwise provided in subsection (f), if a security interest in chattel paper, deposit accounts, negotiable documents, instruments, investment property, or letter-of-credit rights is perfected by a method other than filing, conflicting perfected security interests in proceeds of the collateral rank according to priority in time of filing.</text> </level> <level label="e"> <text>Subsection (d) applies only if the proceeds of the collateral are not cash proceeds, chattel paper, negotiable documents, instruments, investment property, or letter-of-credit rights.</text> </level> <level label="f"> <text>Subsections (a) through (e) are subject to:</text> <level label="1"> <text>Subsection (g) and the other provisions of this subtitle;</text> </level> <level label="2"> <text>§ 4-210 of this article with respect to a security interest of a collecting bank;</text> </level> <level label="3"> <text>§ 5-118 of this article with respect to a security interest of an issuer or nominated person; and</text> </level> <level label="4"> <text>§ 9-110 with respect to a security interest arising under Title 2 or Title 2A of this article.</text> </level> </level> <level label="g"> <text>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.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-323" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>Except as otherwise provided in subsection (b), for purposes of determining the priority of a perfected security interest under § 9-322(a)(1), perfection of the security interest dates from the time an advance is made to the extent that the security interest secures an advance that:</text> <level label="1"> <text>Is made while the security interest is perfected only:</text> <level label="A"> <text>Under § 9-309 when it attaches; or</text> </level> <level label="B"> <text>Temporarily under § 9-312(e), (f), or (g); and</text> </level> </level> <level label="2"> <text>Is not made pursuant to a commitment entered into before or while the security interest is perfected by a method other than under § 9-309 or § 9-312(e), (f), or (g).</text> </level> </level> <level label="b"> <text>Subsection (a) does 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.</text> </level> <level label="c"> <text>Except as otherwise provided in subsection (d), 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:</text> <level label="1"> <text>The time the secured party acquires knowledge of the buyer’s purchase; or</text> </level> <level label="2"> <text>45 days after the purchase.</text> </level> </level> <level label="d"> <text>Subsection (c) 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 45-day period.</text> </level> <level label="e"> <text>Except as otherwise provided in subsection (f), a lessee of goods, other than a lessee in ordinary course of business, takes the leasehold interest free of a security interest to the extent that it secures advances made after the earlier of:</text> <level label="1"> <text>The time the secured party acquires knowledge of the lease; or</text> </level> <level label="2"> <text>45 days after the lease contract becomes enforceable.</text> </level> </level> <level label="f"> <text>Subsection (e) does not apply if the advance is made pursuant to a commitment entered into without knowledge of the lease and before the expiration of the 45-day period.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-324" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>Except as otherwise provided in subsection (g), a perfected purchase-money security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods, and, except as otherwise provided in § 9-327, a perfected security interest in its identifiable proceeds also has priority, if the purchase-money security interest is perfected when the debtor receives possession of the collateral or within 20 days thereafter.</text> </level> <level label="b"> <text>Subject to subsection (c) and except as otherwise provided in subsection (g), a perfected purchase-money security interest in inventory has priority over a conflicting security interest in the same inventory, has priority over a conflicting security interest in chattel paper or an instrument constituting proceeds of the inventory and in proceeds of the chattel paper, if so provided in § 9-330, and, except as otherwise provided in § 9-327, also has priority in identifiable cash proceeds of the inventory to the extent the identifiable cash proceeds are received on or before the delivery of the inventory to a buyer, if:</text> <level label="1"> <text>The purchase-money security interest is perfected when the debtor receives possession of the inventory;</text> </level> <level label="2"> <text>The purchase-money secured party sends an authenticated notification to the holder of the conflicting security interest;</text> </level> <level label="3"> <text>The holder of the conflicting security interest receives the notification within five years before the debtor receives possession of the inventory; and</text> </level> <level label="4"> <text>The notification states that the person sending the notification has or expects to acquire a purchase-money security interest in inventory of the debtor and describes the inventory.</text> </level> </level> <level label="c"> <text>Subsection (b)(2) through (4) applies only if the holder of the conflicting security interest had filed a financing statement covering the same types of inventory:</text> <level label="1"> <text>If the purchase-money security interest is perfected by filing, before the date of the filing; or</text> </level> <level label="2"> <text>If the purchase-money security interest is temporarily perfected without filing or possession under § 9-312(f), before the beginning of the 20-day period thereunder.</text> </level> </level> <level label="d"> <text>Subject to subsection (e) and except as otherwise provided in subsection (g), a perfected purchase-money security interest in livestock that are farm products has priority over a conflicting security interest in the same livestock, and, except as otherwise provided in § 9-327, a perfected security interest in their identifiable proceeds and identifiable products in their unmanufactured states also has priority, if:</text> <level label="1"> <text>The purchase-money security interest is perfected when the debtor receives possession of the livestock;</text> </level> <level label="2"> <text>The purchase-money secured party sends an authenticated notification to the holder of the conflicting security interest;</text> </level> <level label="3"> <text>The holder of the conflicting security interest receives the notification within six months before the debtor receives possession of the livestock; and</text> </level> <level label="4"> <text>The notification states that the person sending the notification has or expects to acquire a purchase-money security interest in livestock of the debtor and describes the livestock.</text> </level> </level> <level label="e"> <text>Subsection (d)(2) through (4) applies only if the holder of the conflicting security interest had filed a financing statement covering the same types of livestock:</text> <level label="1"> <text>If the purchase-money security interest is perfected by filing, before the date of the filing; or</text> </level> <level label="2"> <text>If the purchase-money security interest is temporarily perfected without filing or possession under § 9-312(f), before the beginning of the 20-day period thereunder.</text> </level> </level> <level label="f"> <text>Except as otherwise provided in subsection (g), a perfected purchase-money security interest in software has priority over a conflicting security interest in the same collateral, and, except as otherwise provided in § 9-327, a perfected security interest in its identifiable proceeds also has priority, to the extent that the purchase-money security interest in the goods in which the software was acquired for use has priority in the goods and proceeds of the goods under this section.</text> </level> <level label="g"> <text>If more than one security interest qualifies for priority in the same collateral under subsection (a), subsection (b), subsection (d), or subsection (f):</text> <level label="1"> <text>A security interest securing an obligation incurred as all or part of the price of the collateral has priority over a security interest securing an obligation incurred for value given to enable the debtor to acquire rights in or the use of collateral; and</text> </level> <level label="2"> <text>In all other cases, § 9-322(a) applies to the qualifying security interests.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-325" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>Except as otherwise provided in subsection (b), a security interest created by a debtor is subordinate to a security interest in the same collateral created by another person if:</text> <level label="1"> <text>The debtor acquired the collateral subject to the security interest created by the other person;</text> </level> <level label="2"> <text>The security interest created by the other person was perfected when the debtor acquired the collateral; and</text> </level> <level label="3"> <text>There is no period thereafter when the security interest is unperfected.</text> </level> </level> <level label="b"> <text>Subsection (a) subordinates a security interest only if the security interest:</text> <level label="1"> <text>Otherwise would have priority solely under § 9-322(a) or § 9-324; or</text> </level> <level label="2"> <text>Arose solely under § 2-711(3) or § 2A-508(5) of this article.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-326" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>Subject to subsection (b), a security interest that is created by a new debtor in collateral in which the new debtor has or acquires rights and is perfected solely by a filed financing statement that would be ineffective to perfect the security interest but for the application of § 9–316(i)(1) or § 9–508 is subordinate to a security interest in the same collateral which is perfected other than by such a filed financing statement.</text> </level> <level label="b"> <text>The other provisions of this subtitle determine the priority among conflicting security interests in the same collateral perfected by filed financing statements described in subsection (a). However, if the security agreements to which a new debtor became bound as debtor were not entered into by the same original debtor, the conflicting security interests rank according to priority in time of the new debtor’s having become bound.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-327" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <text>The following rules govern priority among conflicting security interests in the same deposit account:</text> <level label="1"> <text>A security interest held by a secured party having control of the deposit account under § 9-104 has priority over a conflicting security interest held by a secured party that does not have control.</text> </level> <level label="2"> <text>Except as otherwise provided in paragraphs (3) and (4), security interests perfected by control under § 9-314 rank according to priority in time of obtaining control.</text> </level> <level label="3"> <text>Except as otherwise provided in paragraph (4), a security interest held by the bank with which the deposit account is maintained has priority over a conflicting security interest held by another secured party.</text> </level> <level label="4"> <text>A security interest perfected by control under § 9-104(a)(3) has priority over a security interest held by the bank with which the deposit account is maintained.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-328" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <text>The following rules govern priority among conflicting security interests in the same investment property:</text> <level label="1"> <text>A security interest held by a secured party having control of investment property under § 9-106 has priority over a security interest held by a secured party that does not have control of the investment property.</text> </level> <level label="2"> <text>Except as otherwise provided in paragraphs (3) and (4), conflicting security interests held by secured parties each of which has control under § 9-106 rank according to priority in time of:</text> <level label="A"> <text>If the collateral is a security, obtaining control;</text> </level> <level label="B"> <text>If the collateral is a security entitlement carried in a securities account and:</text> <level label="i"> <text>If the secured party obtained control under § 8-106(d)(1) of this article, the secured party’s becoming the person for which the securities account is maintained;</text> </level> <level label="ii"> <text>If the secured party obtained control under § 8-106(d)(2) of this article, the securities intermediary’s agreement to comply with the secured party’s entitlement orders with respect to security entitlements carried or to be carried in the securities account; or</text> </level> <level label="iii"> <text>If the secured party obtained control through another person under § 8-106(d)(3) of this article, the time on which priority would be based under this paragraph if the other person were the secured party; or</text> </level> </level> <level label="C"> <text>If the collateral is a commodity contract carried with a commodity intermediary, the satisfaction of the requirement for control specified in § 9-106(b)(2) with respect to commodity contracts carried or to be carried with the commodity intermediary.</text> </level> </level> <level label="3"> <text>A security interest held by a securities intermediary in a security entitlement or a securities account maintained with the securities intermediary has priority over a conflicting security interest held by another secured party.</text> </level> <level label="4"> <text>A security interest held by a commodity intermediary in a commodity contract or a commodity account maintained with the commodity intermediary has priority over a conflicting security interest held by another secured party.</text> </level> <level label="5"> <text>A security interest in a certificated security in registered form which is perfected by taking delivery under § 9-313(a) and not by control under § 9-314 has priority over a conflicting security interest perfected by a method other than control.</text> </level> <level label="6"> <text>Conflicting security interests created by a broker, securities intermediary, or commodity intermediary which are perfected without control under § 9-106 rank equally.</text> </level> <level label="7"> <text>In all other cases, priority among conflicting security interests in investment property is governed by §§ 9-322 and 9-323.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-329" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <text>The following rules govern priority among conflicting security interests in the same letter-of-credit right:</text> <level label="1"> <text>A security interest held by a secured party having control of the letter-of-credit right under § 9-107 has priority to the extent of its control over a conflicting security interest held by a secured party that does not have control.</text> </level> <level label="2"> <text>Security interests perfected by control under § 9-314 rank according to priority in time of obtaining control.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-330" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed merely as proceeds of inventory subject to a security interest if:</text> <level label="1"> <text>In good faith and in the ordinary course of the purchaser’s business, the purchaser gives new value and takes possession of the chattel paper or obtains control of the chattel paper under § 9-105; and</text> </level> <level label="2"> <text>The chattel paper does not indicate that it has been assigned to an identified assignee other than the purchaser.</text> </level> </level> <level label="b"> <text>A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed other than merely as proceeds of inventory subject to a security interest if the purchaser gives new value and takes possession of the chattel paper or obtains control of the chattel paper under § 9-105 in good faith, in the ordinary course of the purchaser’s business, and without knowledge that the purchase violates the rights of the secured party.</text> </level> <level label="c"> <text>Except as otherwise provided in § 9-327, a purchaser having priority in chattel paper under subsection (a) or (b) also has priority in proceeds of the chattel paper to the extent that:</text> <level label="1"> <text>§ 9-322 provides for priority in the proceeds; or</text> </level> <level label="2"> <text>The proceeds consist of the specific goods covered by the chattel paper or cash proceeds of the specific goods, even if the purchaser’s security interest in the proceeds is unperfected.</text> </level> </level> <level label="d"> <text>Except as otherwise provided in § 9-331(a), a purchaser of an instrument has priority over a security interest in the instrument perfected by a method other than possession if the purchaser gives value and takes possession of the instrument in good faith and without knowledge that the purchase violates the rights of the secured party.</text> </level> <level label="e"> <text>For purposes of subsections (a) and (b), the holder of a purchase-money security interest in inventory gives new value for chattel paper constituting proceeds of the inventory.</text> </level> <level label="f"> <text>For purposes of subsections (b) and (d), if chattel paper or an instrument indicates that it has been assigned to an identified secured party other than the purchaser, a purchaser of the chattel paper or instrument has knowledge that the purchase violates the rights of the secured party.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-331" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>This title does not limit the rights of a holder in due course of a negotiable instrument, a holder to which a negotiable document of title has been duly negotiated, or a protected purchaser of a security. These holders or purchasers take priority over an earlier security interest, even if perfected, to the extent provided in Titles 3, 7, and 8 of this article.</text> </level> <level label="b"> <text>This title does not limit the rights of or impose liability on a person to the extent that the person is protected against the assertion of a claim under Title 8 of this article.</text> </level> <level label="c"> <text>Filing under this title does not constitute notice of a claim or defense to the holders, or purchasers, or persons described in subsections (a) and (b).</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-332" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>A transferee of money takes the money free of a security interest unless the transferee acts in collusion with the debtor in violating the rights of the secured party.</text> </level> <level label="b"> <text>A transferee of funds from a deposit account takes the funds free of a security interest in the deposit account unless the transferee acts in collusion with the debtor in violating the rights of the secured party.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-333" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>In this section, “possessory lien” means an interest, other than a security interest or an agricultural lien:</text> <level label="1"> <text>Which secures payment or performance of an obligation for services or materials furnished with respect to goods by a person in the ordinary course of the person’s business;</text> </level> <level label="2"> <text>Which is created by statute or rule of law in favor of the person; and</text> </level> <level label="3"> <text>Whose effectiveness depends on the person’s possession of the goods.</text> </level> </level> <level label="b"> <text>A possessory lien on goods has priority over a security interest in the goods unless the lien is created by a statute that expressly provides otherwise.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-334" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>A security interest under this article may be created in goods that are fixtures or may continue in goods that become fixtures. A security interest does not exist under this title in ordinary building materials incorporated into an improvement on land.</text> </level> <level label="b"> <text>This title does not prevent creation of an encumbrance upon fixtures under real property law.</text> </level> <level label="c"> <text>In cases not governed by subsections (d) through (h), a security interest in fixtures is subordinate to a conflicting interest of an encumbrancer or owner of the related real property other than the debtor.</text> </level> <level label="d"> <text>Except as otherwise provided in subsection (h), a perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest of record in or is in possession of the real property and:</text> <level label="1"> <text>The security interest is a purchase-money security interest;</text> </level> <level label="2"> <text>The interest of the encumbrancer or owner arises before the goods become fixtures; and</text> </level> <level label="3"> <text>The security interest is perfected by a fixture filing before the goods become fixtures or within 20 days thereafter.</text> </level> </level> <level label="e"> <text>A perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if:</text> <level label="1"> <text>The debtor has an interest of record in the real property or is in possession of the real property and the security interest:</text> <level label="A"> <text>Is perfected by a fixture filing before the interest of the encumbrancer or owner is of record; and</text> </level> <level label="B"> <text>Has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner;</text> </level> </level> <level label="2"> <text>Before the goods become fixtures, the security interest is perfected by any method permitted by this title and the fixtures are readily removable:</text> <level label="A"> <text>Factory or office machines;</text> </level> <level label="B"> <text>Equipment that is not primarily used or leased for use in the operation of the real property; or</text> </level> <level label="C"> <text>Replacements of domestic appliances that are consumer goods;</text> </level> </level> <level label="3"> <text>The conflicting interest is a lien on the real property obtained by legal or equitable proceedings after the security interest was perfected by any method permitted by this article; or</text> </level> <level label="4"> <text>The security interest is:</text> <level label="A"> <text>Created in a manufactured home in a manufactured-home transaction; and</text> </level> <level label="B"> <text>Perfected pursuant to a statute described in § 9-311(a)(2).</text> </level> </level> </level> <level label="f"> <text>A security interest in fixtures, whether or not perfected, has priority over a conflicting interest of an encumbrancer or owner of the real property if:</text> <level label="1"> <text>The encumbrancer or owner has, in an authenticated record, consented to the security interest or disclaimed an interest in the goods as fixtures; or</text> </level> <level label="2"> <text>The debtor has a right to remove the goods as against the encumbrancer or owner.</text> </level> </level> <level label="g"> <text>The priority of the security interest under subsection (f)(2) continues for a reasonable time if the debtor’s right to remove the goods as against the encumbrancer or owner terminates.</text> </level> <level label="h"> <text>A mortgage is a construction mortgage to the extent that it secures an obligation incurred for the construction of an improvement on land, including the acquisition cost of the land, if a recorded record of the mortgage so indicates. Except as otherwise provided in subsections (e) and (f), a security interest in fixtures is subordinate to a construction mortgage if a record of the mortgage is recorded before the goods become fixtures and the goods become fixtures before the completion of the construction. A mortgage has this priority to the same extent as a construction mortgage to the extent that it is given to refinance a construction mortgage.</text> </level> <level label="i"> <text>A perfected security interest in crops growing on real property has priority over a conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest of record in or is in possession of the real property.</text> </level> <level label="j"> <text>Subsection (i) prevails over any inconsistent statutes of this State.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-335" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>A security interest may be created in an accession and continues in collateral that becomes an accession.</text> </level> <level label="b"> <text>If a security interest is perfected when the collateral becomes an accession, the security interest remains perfected in the collateral.</text> </level> <level label="c"> <text>Except as otherwise provided in subsection (d), the other provisions of this part determine the priority of a security interest in an accession.</text> </level> <level label="d"> <text>A security interest in an accession is subordinate to a security interest in the whole which is perfected by compliance with the requirements of a certificate-of-title statute under § 9-311(b).</text> </level> <level label="e"> <text>After default, subject to Subtitle 6, a secured party may remove an accession from other goods if the security interest in the accession has priority over the claims of every person having an interest in the whole.</text> </level> <level label="f"> <text>A secured party that removes an accession from other goods under subsection (e) shall promptly reimburse any holder of a security interest or other lien on, or owner of the whole or of the other goods, other than the debtor, for the cost of repair of any physical injury to the whole or the other goods. The secured party need not reimburse the holder or owner for any diminution in value of the whole or the other goods caused by the absence of the accession removed or by any necessity for replacing it. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate assurance for the performance of the obligation to reimburse.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-336" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>In this section, “commingled goods” means goods that are physically united with other goods in such a manner that their identity is lost in a product or mass.</text> </level> <level label="b"> <text>A security interest does not exist in commingled goods as such. However, a security interest may attach to a product or mass that results when goods become commingled goods.</text> </level> <level label="c"> <text>If collateral becomes commingled goods, a security interest attaches to the product or mass.</text> </level> <level label="d"> <text>If a security interest in collateral is perfected before the collateral becomes commingled goods, the security interest that attaches to the product or mass under subsection (c) is perfected.</text> </level> <level label="e"> <text>Except as otherwise provided in subsection (f), the other provisions of this part determine the priority of a security interest that attaches to the product or mass under subsection (c).</text> </level> <level label="f"> <text>If more than one security interest attaches to the product or mass under subsection (c), the following rules determine priority:</text> <level label="1"> <text>A security interest that is perfected under subsection (d) has priority over a security interest that is unperfected at the time the collateral becomes commingled goods.</text> </level> <level label="2"> <text>If more than one security interest is perfected under subsection (d), the security interests rank equally in proportion to the value of the collateral at the time it became commingled goods.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-337" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <text>If, while a security interest in goods is perfected by any method under the law of another jurisdiction, this State issues a certificate of title that does not show that the goods are subject to the security interest or contain a statement that they may be subject to security interests not shown on the certificate:</text> <level label="1"> <text>A buyer of the goods, other than a person in the business of selling goods of that kind, takes free of the security interest if the buyer gives value and receives delivery of the goods after issuance of the certificate and without knowledge of the security interest; and</text> </level> <level label="2"> <text>The security interest is subordinate to a conflicting security interest in the goods that attaches, and is perfected under § 9-311(b), after issuance of the certificate and without the conflicting secured party’s knowledge of the security interest.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-338" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <text>If a security interest or agricultural lien is perfected by a filed financing statement providing information described in § 9-516(b)(5) which is incorrect at the time the financing statement is filed:</text> <level label="1"> <text>The security interest or agricultural lien is subordinate to a conflicting perfected security interest in the collateral to the extent that the holder of the conflicting security interest gives value in reasonable reliance upon the incorrect information; and</text> </level> <level label="2"> <text>A purchaser, other than a secured party, of the collateral takes free of the security interest or agricultural lien to the extent that, in reasonable reliance upon the incorrect information, the purchaser gives value and, in the case of tangible chattel paper, tangible documents, goods, instruments, or a security certificate, receives delivery of the collateral.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-339" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <text>This title does not preclude subordination by agreement by a person entitled to priority.</text> </section> <section article="gcl" article_name="Commercial Law" number="9-340" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <level label="a"> <text>Except as otherwise provided in subsection (c), a bank with which a deposit account is maintained may exercise any right of recoupment or set-off against a secured party that holds a security interest in the deposit account.</text> </level> <level label="b"> <text>Except as otherwise provided in subsection (c), the application of this article to a security interest in a deposit account does not affect a right of recoupment or set-off of the secured party as to a deposit account maintained with the secured party.</text> </level> <level label="c"> <text>The exercise by a bank of a set-off against a deposit account is ineffective against a secured party that holds a security interest in the deposit account which is perfected by control under § 9-104(a)(3), if the set-off is based on a claim against the debtor.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-341" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <text>Except as otherwise provided in § 9-340(c), and unless the bank otherwise agrees in an authenticated record, a bank’s rights and duties with respect to a deposit account maintained with the bank are not terminated, suspended, or modified by:</text> <level label="1"> <text>The creation, attachment, or perfection of a security interest in the deposit account;</text> </level> <level label="2"> <text>The bank’s knowledge of the security interest; or</text> </level> <level label="3"> <text>The bank’s receipt of instructions from the secured party.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-342" title_number="9" title_name="Secured Transactions" subtitle_number="3" subtitle_name="Perfection and Priority"> <text>This title does not require a bank to enter into an agreement of the kind described in § 9-104(a)(2), even if its customer so requests or directs. A bank that has entered into such an agreement is not required to confirm the existence of the agreement to another person unless requested to do so by its customer.</text> </section> <section article="gcl" article_name="Commercial Law" number="9-401" title_number="9" title_name="Secured Transactions" subtitle_number="4" subtitle_name="Rights of Third Parties"> <level label="a"> <text>Except as otherwise provided in subsection (b) and §§ 9-406, 9-407, 9-408, and 9-409, whether a debtor’s rights in collateral may be voluntarily or involuntarily transferred is governed by law other than this title.</text> </level> <level label="b"> <text>An agreement between the debtor and secured party which prohibits a transfer of the debtor’s rights in collateral or makes the transfer a default does not prevent the transfer from taking effect.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-402" title_number="9" title_name="Secured Transactions" subtitle_number="4" subtitle_name="Rights of Third Parties"> <text>The existence of a security interest, agricultural lien, or authority given to a debtor to dispose of or use collateral, without more, does not subject a secured party to liability in contract or tort for the debtor’s acts or omissions.</text> </section> <section article="gcl" article_name="Commercial Law" number="9-403" title_number="9" title_name="Secured Transactions" subtitle_number="4" subtitle_name="Rights of Third Parties"> <level label="a"> <text>In this section, “value” has the meaning provided in § 3-303(a) of this article.</text> </level> <level label="b"> <text>Except as otherwise provided in this section, an agreement between an account debtor and an assignor not to assert against an assignee any claim or defense that the account debtor may have against the assignor is enforceable by an assignee that takes an assignment:</text> <level label="1"> <text>For value;</text> </level> <level label="2"> <text>In good faith;</text> </level> <level label="3"> <text>Without notice of a claim of a property or possessory right to the property assigned; and</text> </level> <level label="4"> <text>Without notice of a defense or claim in recoupment of the type that may be asserted against a person entitled to enforce a negotiable instrument under § 3-305(a) of this article.</text> </level> </level> <level label="c"> <text>Subsection (b) does not apply to defenses of a type that may be asserted against a holder in due course of a negotiable instrument under § 3-305(b) of this article.</text> </level> <level label="d"> <text>In a consumer transaction, if a record evidences the account debtor’s obligation, law other than this title requires that the record include a statement to the effect that the rights of an assignee are subject to claims or defenses that the account debtor could assert against the original obligee, and the record does not include such a statement:</text> <level label="1"> <text>The record has the same effect as if the record included such a statement; and</text> </level> <level label="2"> <text>The account debtor may assert against an assignee those claims and defenses that would have been available if the record included such a statement.</text> </level> </level> <level label="e"> <text>This section is subject to law other than this title which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.</text> </level> <level label="f"> <text>Except as otherwise provided in subsection (d), this section does not displace law other than this title which gives effect to an agreement by an account debtor not to assert a claim or defense against an assignee.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-404" title_number="9" title_name="Secured Transactions" subtitle_number="4" subtitle_name="Rights of Third Parties"> <level label="a"> <text>Unless an account debtor has made an enforceable agreement not to assert defenses or claims, and subject to subsections (b) through (e), the rights of an assignee are subject to:</text> <level label="1"> <text>All terms of the agreement between the account debtor and assignor and any defense or claim in recoupment arising from the transaction that gave rise to the contract; and</text> </level> <level label="2"> <text>Any other defense or claim of the account debtor against the assignor which accrues before the account debtor receives a notification of the assignment authenticated by the assignor or the assignee.</text> </level> </level> <level label="b"> <text>Subject to subsection (c) and except as otherwise provided in subsection (d), the claim of an account debtor against an assignor may be asserted against an assignee under subsection (a) only to reduce the amount the account debtor owes.</text> </level> <level label="c"> <text>This section is subject to law other than this title which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.</text> </level> <level label="d"> <text>In a consumer transaction, if a record evidences the account debtor’s obligation, law other than this title requires that the record include a statement to the effect that the account debtor’s recovery against an assignee with respect to claims and defenses against the assignor may not exceed amounts paid by the account debtor under the record, and the record does not include such a statement, the extent to which a claim of an account debtor against the assignor may be asserted against an assignee is determined as if the record included such a statement.</text> </level> <level label="e"> <text>This section does not apply to an assignment of a health-care-insurance receivable.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-405" title_number="9" title_name="Secured Transactions" subtitle_number="4" subtitle_name="Rights of Third Parties"> <level label="a"> <text>A modification of or substitution for an assigned contract is effective against an assignee if made in good faith. The assignee acquires corresponding rights under the modified or substituted contract. The assignment may provide that the modification or substitution is a breach of contract by the assignor. This subsection is subject to subsections (b) through (d).</text> </level> <level label="b"> <text>Subsection (a) applies to the extent that:</text> <level label="1"> <text>The right to payment or a part thereof under an assigned contract has not been fully earned by performance; or</text> </level> <level label="2"> <text>The right to payment or a part thereof has been fully earned by performance and the account debtor has not received notification of the assignment under § 9-406(a).</text> </level> </level> <level label="c"> <text>This section is subject to law other than this title which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.</text> </level> <level label="d"> <text>This section does not apply to an assignment of a health-care-insurance receivable.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-406" title_number="9" title_name="Secured Transactions" subtitle_number="4" subtitle_name="Rights of Third Parties"> <level label="a"> <text>Subject to subsections (b) through (j), an account debtor on an account, chattel paper, or a payment intangible may discharge its obligation by paying the assignor until, but not after, the account debtor receives a notification, authenticated by the assignor or the assignee, that the amount due or to become due has been assigned and that payment is to be made to the assignee. After receipt of the notification, the account debtor may discharge its obligation by paying the assignee and may not discharge the obligation by paying the assignor.</text> </level> <level label="b"> <text>Subject to subsection (h), notification is ineffective under subsection (a):</text> <level label="1"> <text>If it does not reasonably identify the rights assigned;</text> </level> <level label="2"> <text>To the extent that an agreement between an account debtor and a seller of a payment intangible limits the account debtor’s duty to pay a person other than the seller and the limitation is effective under law other than this article; or</text> </level> <level label="3"> <text>At the option of an account debtor, if the notification notifies the account debtor to make less than the full amount of any installment or other periodic payment to the assignee, even if:</text> <level label="A"> <text>Only a portion of the account, chattel paper, or payment intangible has been assigned to that assignee;</text> </level> <level label="B"> <text>A portion has been assigned to another assignee; or</text> </level> <level label="C"> <text>The account debtor knows that the assignment to that assignee is limited.</text> </level> </level> </level> <level label="c"> <text>Subject to subsection (h), if requested by the account debtor, an assignee shall seasonably furnish reasonable proof that the assignment has been made. Unless the assignee complies, the account debtor may discharge its obligation by paying the assignor, even if the account debtor has received a notification under subsection (a).</text> </level> <level label="d"> <text>Except as otherwise provided in subsection (e) and §§ 2A–303 of this article and 9–407, and subject to subsection (h), a term in an agreement between an account debtor and an assignor or in a promissory note is ineffective to the extent that it:</text> <level label="1"> <text>Prohibits, restricts, or requires the consent of the account debtor or person obligated on the promissory note to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in, the account, chattel paper, payment intangible, or promissory note; or</text> </level> <level label="2"> <text>Provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account, chattel paper, payment intangible, or promissory note.</text> </level> </level> <level label="e"> <text>Subsection (d) does not apply to the sale of a payment intangible or promissory note, other than a sale pursuant to a disposition under § 9–610 or an acceptance of collateral under § 9–620.</text> </level> <level label="f"> <text>Except as otherwise provided in §§ 2A–303 of this article and 9–407, and subject to subsections (h) and (i) of this section, a rule of law, statute, or regulation that prohibits, restricts, or requires the consent of a government, governmental body or official, or account debtor to the assignment or transfer of, or creation of a security interest in, an account or chattel paper is ineffective to the extent that the rule of law, statute, or regulation:</text> <level label="1"> <text>Prohibits, restricts, or requires the consent of the government, governmental body or official, or account debtor to the assignment or transfer of, or the creation of a security interest in, the account or chattel paper; or</text> </level> <level label="2"> <text>Provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of a security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account or chattel paper.</text> </level> </level> <level label="g"> <text>Subject to subsection (h), an account debtor may not waive or vary its option under subsection (b)(3).</text> </level> <level label="h"> <text>This section is subject to law other than this title which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.</text> </level> <level label="i"> <text>This section does not apply to an assignment of a health–care–insurance receivable.</text> </level> <level label="j"> <level label="1"> <text>Except as provided in paragraph (2), this section prevails over any inconsistent statute of this State, unless the provision is contained in a statute of this State, refers expressly to this section, and states that the provision prevails over this section.</text> </level> <level label="2"> <text>Subsections (d) and (f) do not apply to:</text> <level label="A"> <text>A claim or right to receive amounts under a workers’ compensation act as compensation for an accidental injury or an occupational disease;</text> </level> <level label="B"> <text>A claim or right to receive amounts, whether by suit or agreement and whether as lump sums or as periodic payments, for damages arising from personal injuries; and</text> </level> <level label="C"> <text>A claim or right to receive benefits from a special needs trust described in 42 U.S.C. § 1396p(d)(4), as amended from time to time.</text> </level> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-407" title_number="9" title_name="Secured Transactions" subtitle_number="4" subtitle_name="Rights of Third Parties"> <level label="a"> <text>Except as otherwise provided in subsection (b), a term in a lease agreement is ineffective to the extent that it:</text> <level label="1"> <text>Prohibits, restricts, or requires the consent of a party to the lease to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in, an interest of a party under the lease contract or in the lessor’s residual interest in the goods; or</text> </level> <level label="2"> <text>Provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the lease.</text> </level> </level> <level label="b"> <text>Except as otherwise provided in § 2A-303(7) of this article, a term described in subsection (a)(2) is effective to the extent that there is:</text> <level label="1"> <text>A transfer by the lessee of the lessee’s right of possession or use of the goods in violation of the term; or</text> </level> <level label="2"> <text>A delegation of a material performance of either party to the lease contract in violation of the term.</text> </level> </level> <level label="c"> <text>The creation, attachment, perfection, or enforcement of a security interest in the lessor’s interest under the lease contract or the lessor’s residual interest in the goods is not a transfer that materially impairs the lessee’s prospect of obtaining return performance or materially changes the duty of or materially increases the burden or risk imposed on the lessee within the purview of § 2A-303(4) of this article unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the lessor.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-408" title_number="9" title_name="Secured Transactions" subtitle_number="4" subtitle_name="Rights of Third Parties"> <level label="a"> <text>Except as otherwise provided in subsection (b), a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health–care–insurance receivable or a general intangible, including a contract, permit, license, or franchise, and which term prohibits, restricts, or requires the consent of the person obligated on the promissory note or the account debtor to, the assignment or transfer of, or creation, attachment, or perfection of a security interest in, the promissory note, health–care–insurance receivable, or general intangible, is ineffective to the extent that the term:</text> <level label="1"> <text>Would impair the creation, attachment, or perfection of a security interest; or</text> </level> <level label="2"> <text>Provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the promissory note, health–care–insurance receivable, or general intangible.</text> </level> </level> <level label="b"> <text>Subsection (a) applies to a security interest in a payment intangible or promissory note only if the security interest arises out of a sale of the payment intangible or promissory note, other than a sale pursuant to a disposition under § 9–610 or an acceptance of collateral under § 9–620.</text> </level> <level label="c"> <text>A rule of law, statute, or regulation that prohibits, restricts, or requires the consent of a government, governmental body or official, person obligated on a promissory note, or account debtor to the assignment or transfer of, or creation of a security interest in, a promissory note, health–care–insurance receivable, or general intangible, including a contract, permit, license, or franchise between an account debtor and a debtor, is ineffective to the extent that the rule of law, statute, or regulation:</text> <level label="1"> <text>Would impair the creation, attachment, or perfection of a security interest; or</text> </level> <level label="2"> <text>Provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the promissory note, health–care–insurance receivable, or general intangible.</text> </level> </level> <level label="d"> <text>To the extent that a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health–care–insurance receivable or general intangible or a rule of law, statute, or regulation described in subsection (c) would be effective under law other than this title but is ineffective under subsection (a) or (c), the creation, attachment, or perfection of a security interest in the promissory note, health–care–insurance receivable, or general intangible:</text> <level label="1"> <text>Is not enforceable against the person obligated on the promissory note or the account debtor;</text> </level> <level label="2"> <text>Does not impose a duty or obligation on the person obligated on the promissory note or the account debtor;</text> </level> <level label="3"> <text>Does not require the person obligated on the promissory note or the account debtor to recognize the security interest, pay or render performance to the secured party, or accept payment or performance from the secured party;</text> </level> <level label="4"> <text>Does not entitle the secured party to use or assign the debtor’s rights under the promissory note, health–care–insurance receivable, or general intangible, including any related information or materials furnished to the debtor in the transaction giving rise to the promissory note, health–care–insurance receivable, or general intangible;</text> </level> <level label="5"> <text>Does not entitle the secured party to use, assign, possess, or have access to any trade secrets or confidential information of the person obligated on the promissory note or the account debtor; and</text> </level> <level label="6"> <text>Does not entitle the secured party to enforce the security interest in the promissory note, health–care–insurance receivable, or general intangible.</text> </level> </level> <level label="e"> <level label="1"> <text>This section prevails over any inconsistent statute of this State except as provided in paragraph (2).</text> </level> <level label="2"> <text>Subsections (a) and (c) do not apply to:</text> <level label="A"> <text>A claim or right to receive amounts under a workers’ compensation act as compensation for an accidental injury or an occupational disease;</text> </level> <level label="B"> <text>A claim or right to receive amounts, whether by suit or agreement and whether as lump sums or as periodic payments, for damages arising from personal injuries; and</text> </level> <level label="C"> <text>A claim or right to receive benefits from a special needs trust described in 42 U.S.C. § 1396p(d)(4), as amended from time to time.</text> </level> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-409" title_number="9" title_name="Secured Transactions" subtitle_number="4" subtitle_name="Rights of Third Parties"> <level label="a"> <text>A term in a letter of credit or a rule of law, statute, regulation, custom, or practice applicable to the letter of credit which prohibits, restricts, or requires the consent of an applicant, issuer, or nominated person to a beneficiary’s assignment of or creation of a security interest in a letter-of-credit right is ineffective to the extent that the term or rule of law, statute, regulation, custom, or practice:</text> <level label="1"> <text>Would impair the creation, attachment, or perfection of a security interest in the letter-of-credit right; or</text> </level> <level label="2"> <text>Provides that the assignment or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the letter-of-credit right.</text> </level> </level> <level label="b"> <text>To the extent that a term in a letter of credit is ineffective under subsection (a) but would be effective under law other than this title or a custom or practice applicable to the letter of credit, to the transfer of a right to draw or otherwise demand performance under the letter of credit, or to the assignment of a right to proceeds of the letter of credit, the creation, attachment, or perfection of a security interest in the letter-of-credit right:</text> <level label="1"> <text>Is not enforceable against the applicant, issuer, nominated person, or transferee beneficiary;</text> </level> <level label="2"> <text>Imposes no duties or obligations on the applicant, issuer, nominated person, or transferee beneficiary; and</text> </level> <level label="3"> <text>Does not require the applicant, issuer, nominated person, or transferee beneficiary to recognize the security interest, pay or render performance to the secured party, or accept payment or other performance from the secured party.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-501" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>Except as otherwise provided in subsection (b), if the local law of this State governs perfection of a security interest or agricultural lien, the office in which to file a financing statement to perfect the security interest or agricultural lien is:</text> <level label="1"> <text>The office designated for the filing or recording of a record of a mortgage on the related real property, if:</text> <level label="A"> <text>The collateral is as–extracted collateral or timber to be cut; or</text> </level> <level label="B"> <text>The financing statement is filed as a fixture filing and the collateral is goods that are or are to become fixtures; or</text> </level> </level> <level label="2"> <text>The Maryland State Department of Assessments and Taxation (“Department”), in all other cases, including a case in which the collateral is goods that are or are to become fixtures and the financing statement is not filed as a fixture filing.</text> </level> </level> <level label="b"> <text>The office in which to file a financing statement to perfect a security interest in collateral, including fixtures, of a transmitting utility is the Department. The financing statement also constitutes a fixture filing as to the collateral indicated in the financing statement which is or is to become fixtures.</text> </level> <level label="c"> <level label="1"> <text>This subsection does not apply to a financing statement that is a mortgage or deed of trust.</text> </level> <level label="2"> <text>If the Department or other office receives a financing statement under subsection (a) or (b) for filing and the secured party and the debtor identified on the financing statement are individuals, the Department or other office shall provide written notice of the filing of the financing statement to the debtor.</text> </level> <level label="3"> <text>Subject to paragraph (4), the Department or other office required to provide written notice under paragraph (2) shall determine the form of the notice.</text> </level> <level label="4"> <text>The written notice shall contain at least the following information:</text> <level label="A"> <text>The debtor’s name and address as shown on the financing statement;</text> </level> <level label="B"> <text>The secured party’s name and address as shown on the financing statement; and</text> </level> <level label="C"> <text>The remedies available to the debtor if the debtor believes that the financing statement is erroneously or fraudulently filed.</text> </level> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-501.1" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <level label="1"> <text>In this section, “filing office” means an office described in § 9–501(a).</text> </level> <level label="2"> <text>“Filing office” includes the State Department of Assessments and Taxation.</text> </level> </level> <level label="b"> <text>This section does not apply to a financing statement that is a mortgage or deed of trust.</text> </level> <level label="c"> <text>A person may not cause to be filed or recorded under this title a financing statement that the person knows is:</text> <level label="1"> <text>False;</text> </level> <level label="2"> <text>Not authorized to be filed or recorded under this title; or</text> </level> <level label="3"> <text>Not related to a valid existing or potential commercial or financial transaction.</text> </level> </level> <level label="d"> <level label="1"> <text>If a filing office receives for filing a financing statement that the filing office has reason to believe is being filed by a person in violation of subsection (c), the filing office shall:</text> <level label="A"> <text>Accept for filing the financing statement if it otherwise meets all filing requirements; and</text> </level> <level label="B"> <text>Send a notice to the persons specified in paragraph (2) that:</text> <level label="i"> <text>Identifies the persons named in the financing statement;</text> </level> <level label="ii"> <text>Indicates the date of filing and filing number of the financing statement;</text> </level> <level label="iii"> <text>States the prohibition under subsection (c);</text> </level> <level label="iv"> <text>States that the filing office has reason to believe that the financing statement has been filed in violation of subsection (c) and describes the factual basis for that belief; and</text> </level> <level label="v"> <text>Advises that the financing statement may be terminated by the filing office unless, within 45 days after the notice is sent by the filing office, a person who receives the notice sent by the filing office under paragraph (2) submits to the filing office an affidavit that states the person’s belief that the financing statement does not violate subsection (c) and provides the factual basis for that belief.</text> </level> </level> </level> <level label="2"> <text>The notice required under this subsection shall be sent by certified mail, return receipt requested, and by first–class mail, to:</text> <level label="A"> <text>The person identified as the secured party, at the address provided for the person in the financing statement;</text> </level> <level label="B"> <text>The person identified as the debtor, at the address provided for the person in the financing statement; and</text> </level> <level label="C"> <text>If different from the person identified as the secured party, the person who submitted the financing statement for filing, provided that the person’s identity and address are known to the filing office.</text> </level> </level> </level> <level label="e"> <level label="1"> <text>A person identified as a debtor in a financing statement filed with the filing office who believes that the financing statement was filed in violation of subsection (c) may submit to the filing office an affidavit stating the factual basis for the person’s belief.</text> </level> <level label="2"> <text>If the filing office receives an affidavit from a person under paragraph (1) and has reason to believe that the financing statement referenced in the affidavit was filed in violation of subsection (c), the filing office shall send the notice required under subsection (d).</text> </level> </level> <level label="f"> <level label="1"> <text>The State Department of Assessments and Taxation shall adopt by regulation and make available a form of affidavit that shall be used for the purposes described in subsections (d) and (e).</text> </level> <level label="2"> <text>The form shall require that the affidavit be sworn under the penalties of perjury.</text> </level> </level> <level label="g"> <level label="1"> <text>A filing office may terminate a financing statement after the expiration of the 45–day period specified in the notice required under subsection (d) if the filing office:</text> <level label="A"> <text>Does not receive from a person who received the notice sent by the filing office under subsection (d) an affidavit that states the person’s belief that the financing statement does not violate subsection (c) and provides the factual basis for that belief; and</text> </level> <level label="B"> <text>Reasonably believes that the financing statement was filed in violation of subsection (c).</text> </level> </level> <level label="2"> <text>A filing office that terminates a financing statement under this subsection shall promptly send notice of the termination in the same manner and to the same persons required for the notice sent under subsection (d)(2).</text> </level> </level> <level label="h"> <level label="1"> <text>If a filing office receives an affidavit in response to the notice sent by the filing office under subsection (d), the filing office shall review the affidavit to consider whether the financing statement was filed in violation of subsection (c).</text> </level> <level label="2"> <text>If, after reviewing the affidavit, a filing office reasonably believes that a financing statement was filed in violation of subsection (c), the filing office shall send to the persons specified in paragraph (3) a final notice that:</text> <level label="A"> <text>Includes a copy of the notice sent by the filing office under subsection (d);</text> </level> <level label="B"> <text>States that the filing office reasonably believes that the financing statement has been filed in violation of subsection (c); and</text> </level> <level label="C"> <text>States that the filing office may terminate the financing statement 45 days after the final notice is sent by the filing office unless a person identified in the financing statement files a petition for judicial determination of the validity of the financing statement under subsection (i).</text> </level> </level> <level label="3"> <text>The final notice shall be sent in the same manner required for the notice sent under subsection (d)(2) to:</text> <level label="A"> <text>The same persons required for the notice sent under subsection (d)(2); and</text> </level> <level label="B"> <text>Any other person who responded in writing to the notice sent under subsection (d).</text> </level> </level> </level> <level label="i"> <level label="1"> <text>A person who is identified in a financing statement and disagrees with a determination made by a filing office under subsection (h)(2) may file a petition in the circuit court for the county where the debtor is located or, if the debtor is not located in Maryland, where any affected property is located, seeking a determination of the validity of the financing statement.</text> </level> <level label="2"> <text>A petition filed under this subsection shall be filed within the 45–day period described in the final notice required under subsection (h).</text> </level> <level label="3"> <level label="A"> <text>The parties to a proceeding under this subsection shall include all persons named in the financing statement.</text> </level> <level label="B"> <text>A filing office may not be joined as a party to a proceeding under this subsection.</text> </level> </level> <level label="4"> <level label="A"> <text>Service of process of a proceeding under this subsection may be sent by certified mail, return receipt requested, to the last known addresses of the parties to be served.</text> </level> <level label="B"> <text>A copy of a petition filed under this subsection shall be mailed to the filing office after the petition has been filed and within the 45–day period described in the final notice required under subsection (h).</text> </level> </level> <level label="5"> <text>If the filing office does not receive a copy of the petition within the 45–day period described in the final notice required under subsection (h), the filing office may terminate the financing statement.</text> </level> <level label="6"> <level label="A"> <text>If the court determines that the financing statement was filed in violation of subsection (c):</text> <level label="i"> <text>The court shall order that the filed financing statement be terminated; and</text> </level> <level label="ii"> <text>The prevailing party shall provide a copy of the order to the filing office.</text> </level> </level> <level label="B"> <text>On receipt of a court order requiring termination of a filed financing statement, the filing office shall:</text> <level label="i"> <text>Terminate the financing statement; and</text> </level> <level label="ii"> <text>File a record indicating that the financing statement was terminated in accordance with a court order.</text> </level> </level> </level> <level label="7"> <text>The court may award to the prevailing party:</text> <level label="A"> <text>Damages sustained by the prevailing party; and</text> </level> <level label="B"> <text>Reasonable attorney’s fees and costs.</text> </level> </level> </level> <level label="j"> <text>A filing office may not:</text> <level label="1"> <text>Charge a fee to carry out its obligations under this section, including for the sending of any notices required under this section; or</text> </level> <level label="2"> <text>Refund any fee paid for filing a financing statement terminated under this section.</text> </level> </level> <level label="k"> <text>The State Department of Assessments and Taxation may adopt regulations to carry out this section.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-502" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>Subject to subsection (b), a financing statement is sufficient only if it:</text> <level label="1"> <text>Provides the name of the debtor;</text> </level> <level label="2"> <text>Provides the name of the secured party or a representative of the secured party; and</text> </level> <level label="3"> <text>Indicates the collateral covered by the financing statement.</text> </level> </level> <level label="b"> <text>Except as otherwise provided in § 9–501(b), to be sufficient, a financing statement that covers as–extracted collateral or timber to be cut, or which is filed as a fixture filing and covers goods that are or are to become fixtures, must satisfy subsection (a) and also:</text> <level label="1"> <text>Indicate that it covers this type of collateral;</text> </level> <level label="2"> <text>Indicate that it is to be recorded in the land records;</text> </level> <level label="3"> <text>Provide a description of the real property to which the collateral is related; and</text> </level> <level label="4"> <text>If the debtor does not have an interest of record in the real property, provide the name of a record owner.</text> </level> </level> <level label="c"> <text>A record of a mortgage is effective, from the date of recording, as a financing statement filed as a fixture filing or as a financing statement covering as–extracted collateral or timber to be cut only if:</text> <level label="1"> <text>The record indicates the goods or accounts that it covers;</text> </level> <level label="2"> <text>The goods are or are to become fixtures related to the real property described in the record or the collateral is related to the real property described in the record and is as–extracted collateral or timber to be cut;</text> </level> <level label="3"> <text>The record satisfies the requirements for a financing statement in this section, but:</text> <level label="i"> <text>The record need not indicate that it is to be recorded in the land records; and</text> </level> <level label="ii"> <text>The record sufficiently provides the name of a debtor who is an individual if it provides the individual name of the debtor or the surname and first personal name of the debtor, even if the debtor is an individual to whom § 9–503(a)(4) applies; and</text> </level> </level> <level label="4"> <text>The record is recorded.</text> </level> </level> <level label="d"> <text>A financing statement may be filed before a security agreement is made or a security interest otherwise attaches.</text> </level> <level label="e"> <text>A financing statement filed as a fixture filing, or addendum filed with a financing statement filed as a fixture filing, shall state whether the secured transaction to be perfected by the filing is or is not subject to recordation tax. If recordation tax is payable, the financing statement shall also disclose the principal amount of debt initially incurred.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-503" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>A financing statement sufficiently provides the name of the debtor:</text> <level label="1"> <text>Except as otherwise provided in paragraph (3), if the debtor is a registered organization or the collateral is held in a trust that is a registered organization, only if the financing statement provides the name that is stated to be the registered organization’s name on the public organic record most recently filed with or issued or enacted by the registered organization’s jurisdiction of organization which purports to state, amend, or restate the registered organization’s name;</text> </level> <level label="2"> <text>Subject to subsection (f), if the collateral is being administered by the personal representative of a decedent, only if the financing statement provides, as the name of the debtor, the name of the decedent and, in a separate part of the financing statement, indicates that the collateral is being administered by a personal representative;</text> </level> <level label="3"> <text>If the collateral is held in a trust that is not a registered organization, only if the financing statement:</text> <level label="A"> <text>Provides, as the name of the debtor:</text> <level label="i"> <text>If the organic record of the trust specifies a name for the trust, the name so specified; or</text> </level> <level label="ii"> <text>If the organic record of the trust does not specify a name for the trust, the name of the settlor or testator; and</text> </level> </level> <level label="B"> <text>In a separate part of the financing statement:</text> <level label="i"> <text>If the name is provided in accordance with subparagraph (A)(i), indicates that the collateral is held in a trust; or</text> </level> <level label="ii"> <text>If the name is provided in accordance with subparagraph (A)(ii), provides additional information sufficient to distinguish the trust from other trusts having one or more of the same settlors or the same testator and indicates that the collateral is held in a trust, unless the additional information so indicates;</text> </level> </level> </level> <level label="4"> <text>Subject to subsection (g), if the debtor is an individual to whom this State has issued a driver’s license or an identification card that has not expired, only if it provides the name of the individual which is indicated on the driver’s license or identification card;</text> </level> <level label="5"> <text>If the debtor is an individual to whom paragraph (4) does not apply, only if it provides the individual name of the debtor or the surname and first personal name of the debtor; and</text> </level> <level label="6"> <text>In other cases:</text> <level label="A"> <text>If the debtor has a name, only if it provides the organizational name of the debtor; and</text> </level> <level label="B"> <text>If the debtor does not have a name, only if it provides the names of the partners, members, associates, or other persons comprising the debtor, in a manner that each name provided would be sufficient if the person named were the debtor.</text> </level> </level> </level> <level label="b"> <text>A financing statement that provides the name of the debtor in accordance with subsection (a) of this section is not rendered ineffective by the absence of:</text> <level label="1"> <text>A trade name or other name of the debtor; or</text> </level> <level label="2"> <text>Unless required under subsection (a)(6)(B), names of partners, members, associates, or other persons comprising the debtor.</text> </level> </level> <level label="c"> <text>A financing statement that provides only the debtor’s trade name does not sufficiently provide the name of the debtor.</text> </level> <level label="d"> <text>Failure to indicate the representative capacity of a secured party or representative of a secured party does not affect the sufficiency of a financing statement.</text> </level> <level label="e"> <text>A financing statement may provide the name of more than one debtor and the name of more than one secured party.</text> </level> <level label="f"> <text>The name of the decedent indicated on the order appointing the personal representative of the decedent issued by the court having jurisdiction over the collateral is sufficient as the “name of the decedent” under subsection (a)(2).</text> </level> <level label="g"> <text>If this State has issued to an individual more than one driver’s license or identification card of a kind described in subsection (a)(4), the one that was issued most recently is the one to which subsection (a)(4) refers.</text> </level> <level label="h"> <text>In this section, the “name of the settlor or testator” means:</text> <level label="1"> <text>If the settlor is a registered organization, the name that is stated to be the settlor’s name on the public organic record most recently filed with or issued or enacted by the settlor’s jurisdiction of organization which purports to state, amend, or restate the settlor’s name; or</text> </level> <level label="2"> <text>In other cases, the name of the settlor or testator indicated in the trust’s organic record.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-504" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <text>A financing statement sufficiently indicates the collateral that it covers if the financing statement provides:</text> <level label="1"> <text>A description of the collateral pursuant to § 9-108; or</text> </level> <level label="2"> <text>An indication that the financing statement covers all assets or all personal property.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-505" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>A consignor, lessor, or other bailor of goods, a licensor, or a buyer of a payment intangible or promissory note may file a financing statement, or may comply with a statute or treaty described in § 9-311(a), using the terms “consignor”, “consignee”, “lessor”, “lessee”, “bailor”, “bailee”, “licensor”, “licensee”, “owner”, “registered owner”, “buyer”, “seller”, or words of similar import, instead of the terms “secured party” and “debtor”.</text> </level> <level label="b"> <text>This subtitle applies to the filing of a financing statement under subsection (a) and, as appropriate, to compliance that is equivalent to filing a financing statement under § 9-311(b), but the filing or compliance is not of itself a factor in determining whether the collateral secures an obligation. If it is determined for another reason that the collateral secures an obligation, a security interest held by the consignor, lessor, bailor, licensor, owner, or buyer which attaches to the collateral is perfected by the filing or compliance.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-506" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>A financing statement substantially satisfying the requirements of this subtitle is effective, even if it has minor errors or omissions, unless the errors or omissions make the financing statement seriously misleading.</text> </level> <level label="b"> <text>Except as otherwise provided in subsection (c), a financing statement that fails sufficiently to provide the name of the debtor in accordance with § 9-503(a) is seriously misleading.</text> </level> <level label="c"> <text>If a search of the records of the filing office under the debtor’s correct name, using the filing office’s standard search logic, if any, would disclose a financing statement that fails sufficiently to provide the name of the debtor in accordance with § 9-503(a), the name provided does not make the financing statement seriously misleading.</text> </level> <level label="d"> <text>For purposes of § 9-508(b), the “debtor’s correct name” in subsection (c) means the correct name of the new debtor.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-507" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>A filed financing statement remains effective with respect to collateral that is sold, exchanged, leased, licensed, or otherwise disposed of and in which a security interest or agricultural lien continues, even if the secured party knows of or consents to the disposition.</text> </level> <level label="b"> <text>Except as otherwise provided in subsection (c) and § 9–508, a financing statement is not rendered ineffective if, after the financing statement is filed, the information provided in the financing statement becomes seriously misleading under § 9–506.</text> </level> <level label="c"> <text>If the name that a filed financing statement provides for a debtor becomes insufficient as the name of the debtor under § 9–503(a) so that the financing statement becomes seriously misleading under § 9–506:</text> <level label="1"> <text>The financing statement is effective to perfect a security interest in collateral acquired by the debtor before, or within four months after, the filed financing statement becomes seriously misleading; and</text> </level> <level label="2"> <text>The financing statement is not effective to perfect a security interest in collateral acquired by the debtor more than four months after the filed financing statement becomes seriously misleading, unless an amendment to the financing statement which renders the financing statement not seriously misleading is filed within four months after the financing statement became seriously misleading.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-508" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>Except as otherwise provided in this section, a filed financing statement naming an original debtor is effective to perfect a security interest in collateral in which a new debtor has or acquires rights to the extent that the financing statement would have been effective had the original debtor acquired rights in the collateral.</text> </level> <level label="b"> <text>If the difference between the name of the original debtor and that of the new debtor causes a filed financing statement that is effective under subsection (a) to be seriously misleading under § 9-506:</text> <level label="1"> <text>The financing statement is effective to perfect a security interest in collateral acquired by the new debtor before, and within four months after, the new debtor becomes bound under § 9-203(d); and</text> </level> <level label="2"> <text>The financing statement is not effective to perfect a security interest in collateral acquired by the new debtor more than four months after the new debtor becomes bound under § 9-203(d) unless an initial financing statement providing the name of the new debtor is filed before the expiration of that time.</text> </level> </level> <level label="c"> <text>This section does not apply to collateral as to which a filed financing statement remains effective against the new debtor under § 9-507(a).</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-509" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>A person may file an initial financing statement, amendment that adds collateral covered by a financing statement, or amendment that adds a debtor to a financing statement only if:</text> <level label="1"> <text>The debtor authorizes the filing in an authenticated record or pursuant to subsection (b) or (c); or</text> </level> <level label="2"> <text>The person holds an agricultural lien that has become effective at the time of filing and the financing statement covers only collateral in which the person holds an agricultural lien.</text> </level> </level> <level label="b"> <text>By authenticating or becoming bound as a debtor by a security agreement, a debtor or new debtor authorizes the filing of an initial financing statement, and an amendment, covering:</text> <level label="1"> <text>The collateral described in the security agreement; and</text> </level> <level label="2"> <text>Property that becomes collateral under § 9–315(a)(2), whether or not the security agreement expressly covers proceeds.</text> </level> </level> <level label="c"> <text>By acquiring collateral in which a security interest or agricultural lien continues under § 9–315(a)(1), a debtor authorizes the filing of an initial financing statement, and an amendment, covering the collateral and property that becomes collateral under § 9–315(a)(2).</text> </level> <level label="d"> <text>A person may file an amendment other than an amendment that adds collateral covered by a financing statement or an amendment that adds a debtor to a financing statement only if:</text> <level label="1"> <text>The secured party of record authorizes the filing; or</text> </level> <level label="2"> <text>The amendment is a termination statement for a financing statement as to which the secured party of record has failed to file or send a termination statement as required by § 9–513, the debtor authorizes the filing, and the termination statement indicates that the debtor authorized it to be filed.</text> </level> </level> <level label="e"> <text>If there is more than one secured party of record for a financing statement, each secured party of record may authorize the filing of an amendment under subsection (d).</text> </level> <level label="f"> <text>A person who files a financing statement or an amendment to a financing statement that the person knows contains false information is subject to the penalty provided in § 9–508 of the Criminal Law Article.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-510" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>A filed record is effective only to the extent that it was filed by a person that may file it under § 9-509.</text> </level> <level label="b"> <text>A record authorized by one secured party of record does not affect the financing statement with respect to another secured party of record.</text> </level> <level label="c"> <text>A continuation statement that is not filed within the six-month period prescribed by § 9-515(d) is ineffective.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-511" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>A secured party of record with respect to a financing statement is a person whose name is provided as the name of the secured party or a representative of the secured party in an initial financing statement that has been filed. If an initial financing statement is filed under § 9-514(a), the assignee named in the initial financing statement is the secured party of record with respect to the financing statement.</text> </level> <level label="b"> <text>If an amendment of a financing statement which provides the name of a person as a secured party or a representative of a secured party is filed, the person named in the amendment is a secured party of record. If an amendment is filed under § 9-514(b), the assignee named in the amendment is a secured party of record.</text> </level> <level label="c"> <text>A person remains a secured party of record until the filing of an amendment of the financing statement which deletes the person.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-512" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>Subject to § 9-509, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or, subject to subsection (e), otherwise amend the information provided in, a financing statement by filing an amendment that:</text> <level label="1"> <text>Identifies, by its file number, the initial financing statement to which the amendment relates; and</text> </level> <level label="2"> <text>If the amendment relates to an initial financing statement filed or recorded in a filing office described in § 9-501(a)(1), provides the information specified in § 9-502(b).</text> </level> </level> <level label="b"> <text>Except as otherwise provided in § 9-515, the filing of an amendment does not extend the period of effectiveness of the financing statement.</text> </level> <level label="c"> <text>A financing statement that is amended by an amendment that adds collateral is effective as to the added collateral only from the date of the filing of the amendment.</text> </level> <level label="d"> <text>A financing statement that is amended by an amendment that adds a debtor is effective as to the added debtor only from the date of the filing of the amendment.</text> </level> <level label="e"> <text>An amendment is ineffective to the extent it:</text> <level label="1"> <text>Purports to delete all debtors and fails to provide the name of a debtor to be covered by the financing statement; or</text> </level> <level label="2"> <text>Purports to delete all secured parties of record and fails to provide the name of a new secured party of record.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-513" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>A secured party shall cause the secured party of record for a financing statement to file a termination statement for the financing statement if the financing statement covers consumer goods and:</text> <level label="1"> <text>There is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value; or</text> </level> <level label="2"> <text>The debtor did not authorize the filing of the initial financing statement.</text> </level> </level> <level label="b"> <text>To comply with subsection (a), a secured party shall cause the secured party of record to file the termination statement:</text> <level label="1"> <text>Within 1 month after there is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value; or</text> </level> <level label="2"> <text>If earlier, within 20 days after the secured party receives an authenticated demand from a debtor.</text> </level> </level> <level label="c"> <text>In cases not governed by subsection (a), within 20 days after a secured party receives an authenticated demand from a debtor, the secured party shall cause the secured party of record for a financing statement to send to the debtor a termination statement for the financing statement or file the termination statement in the filing office if:</text> <level label="1"> <text>Except in the case of a financing statement covering accounts or chattel paper that has been sold or goods that are the subject of a consignment, there is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value;</text> </level> <level label="2"> <text>The financing statement covers accounts or chattel paper that has been sold but as to which the account debtor or other person obligated has discharged its obligation;</text> </level> <level label="3"> <text>The financing statement covers goods that were the subject of a consignment to the debtor but are not in the debtor’s possession; or</text> </level> <level label="4"> <text>The debtor did not authorize the filing of the initial financing statement.</text> </level> </level> <level label="d"> <text>Except as otherwise provided in § 9-510, upon the filing of a termination statement with the filing office, the financing statement to which the termination statement relates ceases to be effective. Except as otherwise provided in § 9-510, for purposes of §§ 9-519(f), 9-522(a), and 9-523(b), the filing with the filing office of a termination statement relating to a financing statement that indicates that the debtor is a transmitting utility also causes the effectiveness of the financing statement to lapse.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-514" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>Except as otherwise provided in subsection (c), an initial financing statement may reflect an assignment of all of the secured party’s power to authorize an amendment to the financing statement by providing the name and mailing address of the assignee as the name and address of the secured party.</text> </level> <level label="b"> <text>Except as otherwise provided in subsection (c), a secured party of record may assign of record all or part of its power to authorize an amendment to a financing statement by filing in the filing office an amendment of the financing statement which:</text> <level label="1"> <text>Identifies, by its file number, the initial financing statement to which it relates;</text> </level> <level label="2"> <text>Provides the name of the assignor; and</text> </level> <level label="3"> <text>Provides the name and mailing address of the assignee.</text> </level> </level> <level label="c"> <text>An assignment of record of a security interest in a fixture covered by a record of a mortgage which is effective as a financing statement filed as a fixture filing under § 9-502(c) may be made only by an assignment of record of the mortgage in the manner provided by law of this State other than the Commercial Law Article.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-515" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>Except as otherwise provided in subsections (b), (e), (f), and (g), a filed financing statement is effective for a period of five years after the date of filing.</text> </level> <level label="b"> <text>Except as otherwise provided in subsections (e), (f), and (g), an initial financing statement filed in connection with a public–finance transaction or manufactured–home transaction is effective for a period of 30 years after the date of filing if it indicates that it is filed in connection with a public–finance transaction or manufactured–home transaction.</text> </level> <level label="c"> <text>The effectiveness of a filed financing statement lapses on the expiration of the period of its effectiveness unless before the lapse a continuation statement is filed pursuant to subsection (d). Upon lapse, a financing statement ceases to be effective and any security interest or agricultural lien that was perfected by the financing statement becomes unperfected, unless the security interest is perfected otherwise. If the security interest or agricultural lien becomes unperfected upon lapse, it is deemed never to have been perfected as against a purchaser of the collateral for value.</text> </level> <level label="d"> <text>A continuation statement may be filed only within six months before the expiration of the five–year period specified in subsection (a), the 30–year period specified in subsection (b), or the date the financing statement ceases to be effective under § 9–705(c) of this title, whichever is applicable.</text> </level> <level label="e"> <text>Except as otherwise provided in § 9–510, upon timely filing of a continuation statement, the effectiveness of the initial financing statement continues for a period of five years commencing on the day on which the financing statement would have become ineffective in the absence of the filing. Upon the expiration of the five–year period, the financing statement lapses in the same manner as provided in subsection (c), unless, before the lapse, another continuation statement is filed pursuant to subsection (d). Succeeding continuation statements may be filed in the same manner to continue the effectiveness of the initial financing statement.</text> </level> <level label="f"> <text>If a debtor is a transmitting utility and a filed initial financing statement so indicates, the financing statement is effective until a termination statement is filed.</text> </level> <level label="g"> <text>A record of a mortgage that is effective as a financing statement filed as a fixture filing under § 9–502(c) remains effective as a financing statement filed as a fixture filing until the mortgage is released or satisfied of record or its effectiveness otherwise terminates as to the real property.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-516" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>Except as otherwise provided in subsection (b), communication of a record to a filing office and tender of the filing fee or acceptance of the record by the filing office constitutes filing.</text> </level> <level label="b"> <text>Filing does not occur with respect to a record that a filing office refuses to accept because:</text> <level label="1"> <text>The record is not communicated by a method or medium of communication authorized by the filing office;</text> </level> <level label="2"> <text>An amount equal to or greater than the applicable filing fee is not tendered;</text> </level> <level label="3"> <text>The filing office is unable to index the record because:</text> <level label="A"> <text>In the case of an initial financing statement, the record does not provide a name for the debtor;</text> </level> <level label="B"> <text>In the case of an amendment or information statement, the record:</text> <level label="i"> <text>Does not identify the initial financing statement as required by § 9–512 or § 9–518, as applicable; or</text> </level> <level label="ii"> <text>Identifies an initial financing statement whose effectiveness has lapsed under § 9–515;</text> </level> </level> <level label="C"> <text>In the case of an initial financing statement that provides the name of a debtor identified as an individual or an amendment that provides a name of a debtor identified as an individual which was not previously provided in the financing statement to which the record relates, the record does not identify the debtor’s surname; or</text> </level> <level label="D"> <text>In the case of a record filed or recorded in the filing office described in § 9–501(a)(1), the record does not provide a sufficient description of the real property to which it relates;</text> </level> </level> <level label="4"> <text>In the case of an initial financing statement or an amendment that adds a secured party of record, the record does not provide a name and mailing address for the secured party of record;</text> </level> <level label="5"> <text>In the case of an initial financing statement or an amendment that provides a name of a debtor which was not previously provided in the financing statement to which the amendment relates, the record does not:</text> <level label="A"> <text>Provide a mailing address for the debtor; or</text> </level> <level label="B"> <text>Indicate whether the name provided as the name of the debtor is the name of an individual or an organization;</text> </level> </level> <level label="6"> <text>In the case of an assignment reflected in an initial financing statement under § 9–514(a) or an amendment filed under § 9–514(b), the record does not provide a name and mailing address for the assignee;</text> </level> <level label="7"> <text>In the case of a continuation statement, the record is not filed within the six–month period prescribed by § 9–515(d); or</text> </level> <level label="8"> <text>The information required by § 9–502(e) is not provided or recordation tax payable is not tendered with the financing statement.</text> </level> </level> <level label="c"> <text>For purposes of subsection (b):</text> <level label="1"> <text>A record does not provide information if the filing office is unable to read or decipher the information; and</text> </level> <level label="2"> <text>A record that does not indicate that it is an amendment or identify an initial financing statement to which it relates, as required by § 9–512, § 9–514, or § 9–518, is an initial financing statement.</text> </level> </level> <level label="d"> <text>A record that is communicated to the filing office with tender of the filing fee, but which the filing office refuses to accept for a reason other than one set forth in subsection (b), is effective as a filed record except as against a purchaser of the collateral which gives value in reasonable reliance upon the absence of the record from the files.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-517" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <text>The failure of the filing office to index a record correctly does not affect the effectiveness of the filed record.</text> </section> <section article="gcl" article_name="Commercial Law" number="9-518" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>A person may file in the filing office an information statement with respect to a record indexed there under the person’s name if the person believes that the record is inaccurate or was wrongfully filed.</text> </level> <level label="b"> <text>An information statement under subsection (a) must:</text> <level label="1"> <text>Identify the record to which it relates by:</text> <level label="A"> <text>The file number assigned to the initial financing statement to which the record relates; and</text> </level> <level label="B"> <text>If the information statement relates to a record recorded in a filing office described in § 9–501(a)(1), the date and time that the initial financing statement was recorded and the information specified in § 9–502(b);</text> </level> </level> <level label="2"> <text>Indicate that it is an information statement; and</text> </level> <level label="3"> <text>Provide the basis for the person’s belief that the record is inaccurate and indicate the manner in which the person believes the record should be amended to cure any inaccuracy or provide the basis for the person’s belief that the record was wrongfully filed.</text> </level> </level> <level label="c"> <text>A person may file in the filing office an information statement with respect to a record filed there if the person is a secured party of record with respect to the financing statement to which the record relates and believes that the person that filed the record was not entitled to do so under § 9–509(d).</text> </level> <level label="d"> <text>An information statement under subsection (c) shall:</text> <level label="1"> <text>Identify the record to which it relates by:</text> <level label="A"> <text>The file number assigned to the initial financing statement to which the record relates; and</text> </level> <level label="B"> <text>If the information statement relates to a record recorded in a filing office described in § 9–501(a)(1), the date and time that the initial financing statement was recorded and the information specified in § 9–502(b);</text> </level> </level> <level label="2"> <text>Indicate that it is an information statement; and</text> </level> <level label="3"> <text>Provide the basis for the person’s belief that the person that filed the record was not entitled to do so under § 9–509(d).</text> </level> </level> <level label="e"> <text>The filing of an information statement does not affect the effectiveness of an initial financing statement or other filed record.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-519" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>For each record filed in a filing office, the filing office shall:</text> <level label="1"> <text>Assign a unique number to the filed record;</text> </level> <level label="2"> <text>Create a record that bears the number assigned to the filed record and the date and time of filing;</text> </level> <level label="3"> <text>Maintain the filed record for public inspection; and</text> </level> <level label="4"> <text>Index the filed record in accordance with subsections (b), (c), and (d).</text> </level> </level> <level label="b"> <text>Except as otherwise provided in subsections (c) and (d), the filing office shall:</text> <level label="1"> <text>Index an initial financing statement according to the name of the debtor and index all filed records relating to the initial financing statement in a manner that associates with one another an initial financing statement and all filed records relating to the initial financing statement; and</text> </level> <level label="2"> <text>Index a record that provides a name of a debtor which was not previously provided in the financing statement to which the record relates also according to the name that was not previously provided.</text> </level> </level> <level label="c"> <text>If a financing statement is filed as a fixture filing or covers as-extracted collateral or timber to be cut, it must be recorded in the land records and the filing office shall index it:</text> <level label="1"> <text>Under the names of the debtor and of each owner of record shown on the financing statement as if they were the mortgagors under a mortgage of the real property described; and</text> </level> <level label="2"> <text>To the extent that the law of this State provides for indexing of records of mortgages under the name of the mortgagee, under the name of the secured party as if the secured party were the mortgagee thereunder, or, if indexing is by description, as if the financing statement were a record of a mortgage of the real property described.</text> </level> </level> <level label="d"> <text>If a financing statement is filed as a fixture filing or covers as-extracted collateral or timber to be cut, the filing office shall index an assignment filed under § 9-514(a) or an amendment filed under § 9-514(b):</text> <level label="1"> <text>Under the name of the assignor as grantor; and</text> </level> <level label="2"> <text>To the extent that the law of this State provides for indexing a record of the assignment of a mortgage under the name of the assignee, under the name of the assignee.</text> </level> </level> <level label="e"> <text>The filing office shall maintain a capability:</text> <level label="1"> <text>To retrieve a record by the name of the debtor and by the file number assigned to the initial financing statement to which the record relates; and</text> </level> <level label="2"> <text>To associate and retrieve with one another an initial financing statement and each filed record relating to the initial financing statement.</text> </level> </level> <level label="f"> <text>The filing office may not remove a debtor’s name from the index until one year after the effectiveness of a financing statement naming the debtor lapses under § 9-515 with respect to all secured parties of record.</text> </level> <level label="g"> <text>The filing office shall perform the acts required by subsections (a) through (d) at the time and in the manner prescribed by filing-office rule.</text> </level> <level label="h"> <text>Subsections (b) and (g) do not apply to a filing office described in § 9-501(a)(1).</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-520" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>A filing office shall refuse to accept a record for filing for a reason set forth in § 9-516(b) and may refuse to accept a record for filing only for a reason set forth in § 9-516(b).</text> </level> <level label="b"> <text>If a filing office refuses to accept a record for filing, it shall communicate to the person that presented the record the fact of and reason for the refusal and the date and time the record would have been filed had the filing office accepted it. The communication must be made at the time and in the manner prescribed by filing-office rule.</text> </level> <level label="c"> <text>A filed financing statement satisfying § 9-502(a) and (b) is effective, even if the filing office is required to refuse to accept it for filing under subsection (a). However, § 9-338 applies to a filed financing statement providing information described in § 9-516(b)(5) which is incorrect at the time the financing statement is filed.</text> </level> <level label="d"> <text>If a record communicated to a filing office provides information that relates to more than one debtor, this part applies as to each debtor separately.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-521" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <text>A filing office that accepts written records may not refuse to accept a written initial financing statement, addendum, or amendment in the form and format set forth in the official text of the 2010 amendments to Article 9 of the Uniform Commercial Code promulgated by the American Law Institute and the Uniform Law Commission, except for a reason set forth in § 9–516(b).</text> </section> <section article="gcl" article_name="Commercial Law" number="9-522" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>The filing office shall maintain a record of the information provided in a filed financing statement for at least one year after the effectiveness of the financing statement has lapsed under § 9-515 with respect to all secured parties of record. The record must be retrievable by using the name of the debtor and by using the file number assigned to the initial financing statement to which the record relates.</text> </level> <level label="b"> <text>Except to the extent that a statute governing disposition of public records provides otherwise, the filing office immediately may destroy any written record evidencing a financing statement. However, if the filing office destroys a written record, it shall maintain another record of the financing statement which complies with subsection (a).</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-523" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>If a person that files a written record requests an acknowledgment of the filing, the filing office shall send to the person an image of the record showing the number assigned to the record pursuant to § 9-519(a)(1) and the date and time of the filing of the record. However, if the person furnishes a copy of the record to the filing office, the filing office may instead:</text> <level label="1"> <text>Note upon the copy the number assigned to the record pursuant to § 9-519(a)(1) and the date and time of the filing of the record; and</text> </level> <level label="2"> <text>Send the copy to the person.</text> </level> </level> <level label="b"> <text>The filing office shall make available to the general public records indexed both in the names of debtors and by unique file numbers, based upon which copies of filed records may be obtained.</text> </level> <level label="c"> <text>In complying with its duty under subsection (b), the filing office may communicate information in any medium.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-525" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>Except as otherwise provided in subsection (c), the fee for filing and indexing a record under this part, other than an initial financing statement of the kind described in § 9-502(c), is:</text> <level label="1"> <text>$25 if the record is communicated in writing and consists of eight or fewer pages;</text> </level> <level label="2"> <text>$75 if the record is communicated in writing and consists of more than eight pages; and</text> </level> <level label="3"> <text>$25 if the record is communicated by another medium authorized by filing-office rule.</text> </level> </level> <level label="b"> <text>The number of names required to be indexed does not affect the amount of the fee in subsection (a).</text> </level> <level label="c"> <text>This section does not require a fee with respect to a record of a mortgage which is effective as a financing statement filed as a fixture filing or as a financing statement covering as-extracted collateral or timber to be cut under § 9-502(c). However, the recording and satisfaction fees that otherwise would be applicable to the record of the mortgage apply.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-526" title_number="9" title_name="Secured Transactions" subtitle_number="5" subtitle_name="Filing"> <level label="a"> <text>The Department shall adopt and publish rules to implement this subtitle. The filing-office rules must be:</text> <level label="1"> <text>Consistent with this subtitle; and</text> </level> <level label="2"> <text>Adopted and published in accordance with Title 10, Subtitle 1 of the State Government Article.</text> </level> </level> <level label="b"> <text>To keep the filing-office rules and practices of the filing office in harmony with the rules and practices of filing offices in other jurisdictions that enact substantially this subtitle, and to keep the technology used by the filing office compatible with the technology used by filing offices in other jurisdictions that enact substantially this subtitle, the Department, so far as is consistent with the purposes, policies, and provisions of this title, in adopting, amending, and repealing filing-office rules, shall:</text> <level label="1"> <text>Consult with filing offices in other jurisdictions that enact substantially this subtitle;</text> </level> <level label="2"> <text>Consult the most recent version of the Model Rules promulgated by the International Association of Corporate Administrators or any successor organization; and</text> </level> <level label="3"> <text>Take into consideration the rules and practices of, and the technology used by, filing offices in other jurisdictions that enact substantially this subtitle.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-601" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>After default, a secured party has the rights provided in this subtitle and, except as otherwise provided in § 9-602, those provided by agreement of the parties. A secured party:</text> <level label="1"> <text>May reduce a claim to judgment, foreclose, or otherwise enforce the claim, security interest, or agricultural lien by any available judicial procedure; and</text> </level> <level label="2"> <text>If the collateral is documents, may proceed either as to the documents or as to the goods they cover.</text> </level> </level> <level label="b"> <text>A secured party in possession of collateral or control of collateral under § 7-106, § 9-104, § 9-105, § 9-106, or § 9-107 has the rights and duties provided in § 9-207.</text> </level> <level label="c"> <text>The rights under subsections (a) and (b) are cumulative and may be exercised simultaneously.</text> </level> <level label="d"> <text>Except as otherwise provided in subsection (g) and § 9-605, after default, a debtor and an obligor have the rights provided in this subtitle and by agreement of the parties.</text> </level> <level label="e"> <text>If a secured party has reduced its claim to judgment, the lien of any levy that may be made upon the collateral by virtue of an execution based upon the judgment relates back to the earliest of:</text> <level label="1"> <text>The date of perfection of the security interest or agricultural lien in the collateral;</text> </level> <level label="2"> <text>The date of filing a financing statement covering the collateral; or</text> </level> <level label="3"> <text>Any date specified in a statute under which the agricultural lien was created.</text> </level> </level> <level label="f"> <text>A sale pursuant to an execution is a foreclosure of the security interest or agricultural lien by judicial procedure within the meaning of this section. A secured party may purchase at the sale and thereafter hold the collateral free of any other requirements of this title.</text> </level> <level label="g"> <text>Except as otherwise provided in § 9-607(c), this subtitle imposes no duties upon a secured party that is a consignor or is a buyer of accounts, chattel paper, payment intangibles, or promissory notes.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-602" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <text>Except as otherwise provided in § 9-624, to the extent that they give rights to a debtor or obligor and impose duties on a secured party, the debtor or obligor may not waive or vary the rules stated in the following listed sections:</text> <level label="1"> <text>§ 9-207(b)(4)(C), which deals with use and operation of the collateral by the secured party;</text> </level> <level label="2"> <text>§ 9-210, which deals with requests for an accounting and requests concerning a list of collateral and statement of account;</text> </level> <level label="3"> <text>§ 9-607(c), which deals with collection and enforcement of collateral;</text> </level> <level label="4"> <text>§§ 9-608(a) and 9-615(c) to the extent that they deal with application or payment of noncash proceeds of collection, enforcement, or disposition;</text> </level> <level label="5"> <text>§§ 9-608(a) and 9-615(d) to the extent that they require accounting for or payment of surplus proceeds of collateral;</text> </level> <level label="6"> <text>§ 9-609 to the extent that it imposes upon a secured party that takes possession of collateral without judicial process the duty to do so without breach of the peace;</text> </level> <level label="7"> <text>§§ 9-610(b), 9-611, 9-613, and 9-614, which deal with disposition of collateral;</text> </level> <level label="8"> <text>§ 9-615(f), which deals with calculation of a deficiency or surplus when a disposition is made to the secured party, a person related to the secured party, or a secondary obligor;</text> </level> <level label="9"> <text>§ 9-616, which deals with explanation of the calculation of a surplus or deficiency;</text> </level> <level label="10"> <text>§§ 9-620, 9-621, and 9-622, which deal with acceptance of collateral in satisfaction of obligation;</text> </level> <level label="11"> <text>§ 9-623, which deals with redemption of collateral;</text> </level> <level label="12"> <text>§ 9-624, which deals with permissible waivers; and</text> </level> <level label="13"> <text>§§ 9-625 and 9-626, which deal with the secured party’s liability for failure to comply with this article.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-603" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>The parties may determine by agreement the standards measuring the fulfillment of the rights of a debtor or obligor and the duties of a secured party under a rule stated in § 9-602 if the standards are not manifestly unreasonable.</text> </level> <level label="b"> <text>Subsection (a) does not apply to the duty under § 9-609 to refrain from breaching the peace.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-604" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>If a security agreement covers both personal and real property, a secured party may proceed:</text> <level label="1"> <text>Under this subtitle as to the personal property without prejudicing any rights with respect to the real property; or</text> </level> <level label="2"> <text>As to both the personal property and the real property in accordance with the rights with respect to the real property, in which case the other provisions of this subtitle do not apply.</text> </level> </level> <level label="b"> <text>Subject to subsection (c), if a security agreement covers goods that are or become fixtures, a secured party may proceed:</text> <level label="1"> <text>Under this subtitle; or</text> </level> <level label="2"> <text>In accordance with the rights with respect to real property, in which case the other provisions of this subtitle do not apply.</text> </level> </level> <level label="c"> <text>Subject to the other provisions of this subtitle, if a secured party holding a security interest in fixtures has priority over all owners and encumbrancers of the real property, the secured party, after default, may remove the collateral from the real property.</text> </level> <level label="d"> <text>A secured party that removes collateral shall promptly reimburse any encumbrancer or owner of the real property, other than the debtor, for the cost of repair of any physical injury caused by the removal. The secured party need not reimburse the encumbrancer or owner for any diminution in value of the real property caused by the absence of the goods removed or by any necessity of replacing them. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate assurance for the performance of the obligation to reimburse.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-605" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <text>A secured party does not owe a duty based on its status as secured party:</text> <level label="1"> <text>To a person that is a debtor or obligor, unless the secured party knows:</text> <level label="A"> <text>That the person is a debtor or obligor;</text> </level> <level label="B"> <text>The identity of the person; and</text> </level> <level label="C"> <text>How to communicate with the person; or</text> </level> </level> <level label="2"> <text>To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:</text> <level label="A"> <text>That the person is a debtor; and</text> </level> <level label="B"> <text>The identity of the person.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-606" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <text>For purposes of this subtitle, a default occurs in connection with an agricultural lien at the time the secured party becomes entitled to enforce the lien in accordance with the statute under which it was created.</text> </section> <section article="gcl" article_name="Commercial Law" number="9-607" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>If so agreed, and in any event after default, a secured party:</text> <level label="1"> <text>May notify an account debtor or other person obligated on collateral to make payment or otherwise render performance to or for the benefit of the secured party;</text> </level> <level label="2"> <text>May take any proceeds to which the secured party is entitled under § 9–315;</text> </level> <level label="3"> <text>May enforce the obligations of an account debtor or other person obligated on collateral and exercise the rights of the debtor with respect to the obligation of the account debtor or other person obligated on collateral to make payment or otherwise render performance to the debtor, and with respect to any property that secures the obligations of the account debtor or other person obligated on the collateral;</text> </level> <level label="4"> <text>If it holds a security interest in a deposit account perfected by control under § 9–104(a)(1), may apply the balance of the deposit account to the obligation secured by the deposit account; and</text> </level> <level label="5"> <text>If it holds a security interest in a deposit account perfected by control under § 9–104(a)(2) or (3), may instruct the bank to pay the balance of the deposit account to or for the benefit of the secured party.</text> </level> </level> <level label="b"> <text>If necessary to enable a secured party to exercise under subsection (a)(3) the right of a debtor to enforce a mortgage nonjudicially, the secured party may record in the office in which a record of the mortgage is recorded:</text> <level label="1"> <text>A copy of the security agreement that creates or provides for a security interest in the obligation secured by the mortgage; and</text> </level> <level label="2"> <text>The secured party’s sworn affidavit in recordable form stating that:</text> <level label="A"> <text>A default has occurred with respect to the obligation secured by the mortgage; and</text> </level> <level label="B"> <text>The secured party is entitled to enforce the mortgage nonjudicially.</text> </level> </level> </level> <level label="c"> <text>A secured party shall proceed in a commercially reasonable manner if the secured party:</text> <level label="1"> <text>Undertakes to collect from or enforce an obligation of an account debtor or other person obligated on collateral; and</text> </level> <level label="2"> <text>Is entitled to charge back uncollected collateral or otherwise to full or limited recourse against the debtor or a secondary obligor.</text> </level> </level> <level label="d"> <text>A secured party may deduct from the collections made pursuant to subsection (c) reasonable expenses of collection and enforcement, including reasonable attorney’s fees and legal expenses incurred by the secured party.</text> </level> <level label="e"> <text>This section does not determine whether an account debtor, bank, or other person obligated on collateral owes a duty to a secured party.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-608" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>If a security interest or agricultural lien secures payment or performance of an obligation, the following rules apply:</text> <level label="1"> <text>A secured party shall apply or pay over for application the cash proceeds of collection or enforcement under § 9-607 in the following order to:</text> <level label="A"> <text>The reasonable expenses of collection and enforcement and, to the extent provided for by agreement and not prohibited by law, reasonable attorney’s fees and legal expenses incurred by the secured party;</text> </level> <level label="B"> <text>The satisfaction of obligations secured by the security interest or agricultural lien under which the collection or enforcement is made; and</text> </level> <level label="C"> <text>The satisfaction of obligations secured by any subordinate security interest in or other lien on the collateral subject to the security interest or agricultural lien under which the collection or enforcement is made if the secured party receives an authenticated demand for proceeds before distribution of the proceeds is completed.</text> </level> </level> <level label="2"> <text>If requested by a secured party, a holder of a subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder complies, the secured party need not comply with the holder’s demand under paragraph (1)(C).</text> </level> <level label="3"> <text>A secured party need not apply or pay over for application noncash proceeds of collection and enforcement under § 9-607 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.</text> </level> <level label="4"> <text>A secured party shall account to and pay a debtor for any surplus, and the obligor is liable for any deficiency.</text> </level> </level> <level label="b"> <text>If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes, the debtor is not entitled to any surplus, and the obligor is not liable for any deficiency.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-609" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>After default, a secured party:</text> <level label="1"> <text>May take possession of the collateral; and</text> </level> <level label="2"> <text>Without removal, may render equipment unusable and dispose of collateral on a debtor’s premises under § 9-610.</text> </level> </level> <level label="b"> <text>A secured party may proceed under subsection (a):</text> <level label="1"> <text>Pursuant to judicial process; or</text> </level> <level label="2"> <text>Without judicial process, if it proceeds without breach of the peace.</text> </level> </level> <level label="c"> <text>If so agreed, and in any event after default, a secured party may require the debtor to assemble the collateral and make it available to the secured party at a place to be designated by the secured party which is reasonably convenient to both parties.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-610" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>After default, a secured party may sell, lease, license, or otherwise dispose of any or all of the collateral in its present condition or following any commercially reasonable preparation or processing.</text> </level> <level label="b"> <text>Every aspect of a disposition of collateral, including the method, manner, time, place, and other terms, must be commercially reasonable. If commercially reasonable, a secured party may dispose of collateral by public or private proceedings, by one or more contracts, as a unit or in parcels, and at any time and place and on any terms.</text> </level> <level label="c"> <text>A secured party may purchase collateral:</text> <level label="1"> <text>At a public disposition; or</text> </level> <level label="2"> <text>At a private disposition only if the collateral is of a kind that is customarily sold on a recognized market or the subject of widely distributed standard price quotations.</text> </level> </level> <level label="d"> <text>A contract for sale, lease, license, or other disposition includes the warranties relating to title, possession, quiet enjoyment, and the like which by operation of law accompany a voluntary disposition of property of the kind subject to the contract.</text> </level> <level label="e"> <text>A secured party may disclaim or modify warranties under subsection (d):</text> <level label="1"> <text>In a manner that would be effective to disclaim or modify the warranties in a voluntary disposition of property of the kind subject to the contract of disposition; or</text> </level> <level label="2"> <text>By communicating to the purchaser a record evidencing the contract for disposition and including an express disclaimer or modification of the warranties.</text> </level> </level> <level label="f"> <text>A record is sufficient to disclaim warranties under subsection (e) if it indicates “There is no warranty relating to title, possession, quiet enjoyment, or the like in this disposition” or uses words of similar import.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-611" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>In this section, “notification date” means the earlier of the date on which:</text> <level label="1"> <text>A secured party sends to the debtor and any secondary obligor an authenticated notification of disposition; or</text> </level> <level label="2"> <text>The debtor and any secondary obligor waive the right to notification.</text> </level> </level> <level label="b"> <text>Except as otherwise provided in subsection (d), a secured party that disposes of collateral under § 9-610 shall send to the persons specified in subsection (c) a reasonable authenticated notification of disposition.</text> </level> <level label="c"> <text>To comply with subsection (b), the secured party shall send an authenticated notification of disposition to:</text> <level label="1"> <text>The debtor;</text> </level> <level label="2"> <text>Any secondary obligor; and</text> </level> <level label="3"> <text>If the collateral is other than consumer goods:</text> <level label="A"> <text>Any other person from which the secured party has received, before the notification date, an authenticated notification of a claim of an interest in the collateral;</text> </level> <level label="B"> <text>Any other secured party or lienholder that, 10 days before the notification date, held a security interest in or other lien on the collateral perfected by the filing of a financing statement that:</text> <level label="i"> <text>Identified the collateral;</text> </level> <level label="ii"> <text>Was indexed under the debtor’s name as of that date; and</text> </level> <level label="iii"> <text>Was filed in the office in which to file a financing statement against the debtor covering the collateral as of that date; and</text> </level> </level> <level label="C"> <text>Any other secured party that, 10 days before the notification date, held a security interest in the collateral perfected by compliance with a statute, regulation, or treaty described in § 9-311(a).</text> </level> </level> </level> <level label="d"> <text>Subsection (b) does not apply if the collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market.</text> </level> <level label="e"> <text>A secured party complies with the requirement for notification prescribed by subsection (c)(3)(B) if:</text> <level label="1"> <text>Not later than 20 days or earlier than 30 days before the notification date, the secured party requests, in a commercially reasonable manner, information concerning financing statements indexed under the debtor’s name in the office indicated in subsection (c)(3)(B); and</text> </level> <level label="2"> <text>Before the notification date, the secured party:</text> <level label="A"> <text>Did not receive a response to the request for information; or</text> </level> <level label="B"> <text>Received a response to the request for information and sent an authenticated notification of disposition to each secured party named in that response whose financing statement covered the collateral.</text> </level> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-612" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>Except as otherwise provided in subsection (b), whether a notification is sent within a reasonable time is a question of fact.</text> </level> <level label="b"> <text>A notification of disposition sent after default and 10 days or more before the earliest time of disposition set forth in the notification is sent within a reasonable time before the disposition.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-613" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <text>Except in a consumer-goods transaction, the following rules apply:</text> <level label="1"> <text>The contents of a notification of disposition are sufficient if the notification:</text> <level label="A"> <text>Describes the debtor and the secured party;</text> </level> <level label="B"> <text>Describes the collateral that is the subject of the intended disposition;</text> </level> <level label="C"> <text>States the method of intended disposition;</text> </level> <level label="D"> <text>States that the debtor is entitled to an accounting of the unpaid indebtedness and states the charge, if any, for an accounting; and</text> </level> <level label="E"> <text>States the time and place of a public disposition or the time after which any other disposition is to be made.</text> </level> </level> <level label="2"> <text>Whether the contents of a notification that lacks any of the information specified in paragraph (1) are nevertheless sufficient is a question of fact.</text> </level> <level label="3"> <text>The contents of a notification providing substantially the information specified in paragraph (1) are sufficient, even if the notification includes:</text> <level label="A"> <text>Information not specified by that paragraph; or</text> </level> <level label="B"> <text>Minor errors that are not seriously misleading.</text> </level> </level> <level label="4"> <text>A particular phrasing of the notification is not required.</text> </level> <level label="5"> <text>The following form of notification and the form appearing in § 9-614(3), when completed, each provides sufficient information:</text> <text>NOTIFICATION OF DISPOSITION OF COLLATERAL</text> <text>To: (Name of debtor, obligor, or other person to which the notification is sent)</text> <text>From: (Name, address, and telephone number of secured party)</text> <text>Name of Debtor(s): (Include only if debtor(s) is not an addressee)</text> <text>(For a public disposition:)</text> <text>We will sell (or lease or license, as applicable) the (describe collateral) (to the highest qualified bidder) in public as follows:</text> <text>Day and Date:</text> <text>Time:</text> <text>Place:</text> <text>(For a private disposition:)</text> <text>We will sell (or lease or license, as applicable) the (describe collateral) privately some time after (day and date).</text> <text>You are entitled to an accounting of the unpaid indebtedness secured by the property that we intend to sell (or lease or license, as applicable) (for a charge of $ ). You may request an accounting by calling us at (telephone number).</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-614" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <text>In a consumer-goods transaction, the following rules apply:</text> <level label="1"> <text>A notification of disposition must provide the following information:</text> <level label="A"> <text>The information specified in § 9-613(1);</text> </level> <level label="B"> <text>A description of any liability for a deficiency of the person to which the notification is sent;</text> </level> <level label="C"> <text>A telephone number from which the amount that must be paid to the secured party to redeem the collateral under § 9-623 is available; and</text> </level> <level label="D"> <text>A telephone number or mailing address from which additional information concerning the disposition and the obligation secured is available.</text> </level> </level> <level label="2"> <text>A particular phrasing of the notification is not required.</text> </level> <level label="3"> <text>The following form of notification, when completed, provides sufficient information:</text> <text>(Name and address of secured party)</text> <text>(Date)</text> <text>NOTICE OF OUR PLAN TO SELL PROPERTY</text> <text>(Name and address of any obligor who is also a debtor)</text> <text>Subject: (Identification of Transaction)</text> <text>We have your (describe collateral), because you broke promises in our agreement.</text> <text>(For a public disposition:)</text> <text>We will sell (describe collateral) at public sale. A sale could include a lease or license. The sale will be held as follows:</text> <text>Date:</text> <text>Time:</text> <text>Place:</text> <text>You may attend the sale and bring bidders if you want.</text> <text>(For a private disposition:)</text> <text>We will sell (describe collateral) at private sale some time after (date). A sale could include a lease or license.</text> <text>The money that we get from the sale (after paying our costs) will reduce the amount you owe. If we get less money than you owe, you (will or will not, as applicable) still owe us the difference. If we get more money than you owe, you will get the extra money, unless we must pay it to someone else.</text> <text>You can get the property back at any time before we sell it by paying us the full amount you owe (not just the past due payments), including our expenses. To learn the exact amount you must pay, call us at (telephone number).</text> <text>If you want us to explain to you in writing how we have figured the amount that you owe us, you may call us at (telephone number) or write us at (secured party’s address) and request a written explanation. (We will charge you $ for the explanation if we sent you another written explanation of the amount you owe us within the last six months.)</text> <text>If you need more information about the sale call us at (telephone number) or write us at (secured party’s address).</text> <text>We are sending this notice to the following other people who have an interest in (describe collateral) or who owe money under your agreement:</text> <text>(Names of all other debtors and obligors, if any).</text> </level> <level label="4"> <text>A notification in the form of paragraph (3) is sufficient, even if additional information appears at the end of the form.</text> </level> <level label="5"> <text>A notification in the form of paragraph (3) is sufficient, even if it includes errors in information not required by paragraph (1), unless the error is misleading with respect to rights arising under this article.</text> </level> <level label="6"> <text>If a notification under this section is not in the form of paragraph (3), law other than this article determines the effect of including information not required by paragraph (1).</text> </level> <level label="7"> <text>Secured parties subject to §§ 12-115, 12-624 through 12-627, § 12-921, or § 12-1021 of this article are not subject to the provisions of this section.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-615" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>A secured party shall apply or pay over for application the cash proceeds of disposition under § 9-610 in the following order to:</text> <level label="1"> <text>The reasonable expenses of retaking, holding, preparing for disposition, processing, and disposing, and, to the extent provided for by agreement and not prohibited by law, reasonable attorney’s fees and legal expenses incurred by the secured party;</text> </level> <level label="2"> <text>The satisfaction of obligations secured by the security interest or agricultural lien under which the disposition is made;</text> </level> <level label="3"> <text>The satisfaction of obligations secured by any subordinate security interest in or other subordinate lien on the collateral if:</text> <level label="A"> <text>The secured party receives from the holder of the subordinate security interest or other lien an authenticated demand for proceeds before distribution of the proceeds is completed; and</text> </level> <level label="B"> <text>In a case in which a consignor has an interest in the collateral, the subordinate security interest or other lien is senior to the interest of the consignor; and</text> </level> </level> <level label="4"> <text>A secured party that is a consignor of the collateral if the secured party receives from the consignor an authenticated demand for proceeds before distribution of the proceeds is completed.</text> </level> </level> <level label="b"> <text>If requested by a secured party, a holder of a subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder does so, the secured party need not comply with the holder’s demand under subsection (a)(3).</text> </level> <level label="c"> <text>A secured party need not apply or pay over for application noncash proceeds of disposition under § 9-610 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.</text> </level> <level label="d"> <text>If the security interest under which a disposition is made secures payment or performance of an obligation, after making the payments and applications required by subsection (a) and permitted by subsection (c):</text> <level label="1"> <text>Unless subsection (a)(4) requires the secured party to apply or pay over cash proceeds to a consignor, the secured party shall account to and pay a debtor for any surplus; and</text> </level> <level label="2"> <text>The obligor is liable for any deficiency.</text> </level> </level> <level label="e"> <text>If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes:</text> <level label="1"> <text>The debtor is not entitled to any surplus; and</text> </level> <level label="2"> <text>The obligor is not liable for any deficiency.</text> </level> </level> <level label="f"> <text>The surplus or deficiency following a disposition is calculated based on the amount of proceeds that would have been realized in a disposition complying with this part to a transferee other than the secured party, a person related to the secured party, or a secondary obligor if:</text> <level label="1"> <text>The transferee in the disposition is the secured party, a person related to the secured party, or a secondary obligor; and</text> </level> <level label="2"> <text>The amount of proceeds of the disposition is significantly below the range of proceeds that a complying disposition to a person other than the secured party, a person related to the secured party, or a secondary obligor would have brought.</text> </level> </level> <level label="g"> <text>A secured party that receives cash proceeds of a disposition in good faith and without knowledge that the receipt violates the rights of the holder of a security interest or other lien that is not subordinate to the security interest or agricultural lien under which the disposition is made:</text> <level label="1"> <text>Takes the cash proceeds free of the security interest or other lien;</text> </level> <level label="2"> <text>Is not obligated to apply the proceeds of the disposition to the satisfaction of obligations secured by the security interest or other lien; and</text> </level> <level label="3"> <text>Is not obligated to account to or pay the holder of the security interest or other lien for any surplus.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-616" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>In this section:</text> <level label="1"> <text>“Explanation” means a writing that:</text> <level label="A"> <text>States the amount of the surplus or deficiency;</text> </level> <level label="B"> <text>Provides an explanation in accordance with subsection (c) of how the secured party calculated the surplus or deficiency;</text> </level> <level label="C"> <text>States, if applicable, that future debits, credits, charges, including additional credit service charges or interest, rebates, and expenses may affect the amount of the surplus or deficiency; and</text> </level> <level label="D"> <text>Provides a telephone number or mailing address from which additional information concerning the transaction is available.</text> </level> </level> <level label="2"> <text>“Request” means a record:</text> <level label="A"> <text>Authenticated by a debtor or consumer obligor;</text> </level> <level label="B"> <text>Requesting that the recipient provide an explanation; and</text> </level> <level label="C"> <text>Sent after disposition of the collateral under § 9-610.</text> </level> </level> </level> <level label="b"> <text>In a consumer-goods transaction in which the debtor is entitled to a surplus or a consumer obligor is liable for a deficiency under § 9-615, the secured party shall:</text> <level label="1"> <text>Send an explanation to the debtor or consumer obligor, as applicable, after the disposition and:</text> <level label="A"> <text>Before or when the secured party accounts to the debtor and pays any surplus or first makes written demand on the consumer obligor after the disposition for payment of the deficiency; and</text> </level> <level label="B"> <text>Within 14 days after receipt of a request; or</text> </level> </level> <level label="2"> <text>In the case of a consumer obligor who is liable for a deficiency, within 14 days after receipt of a request, send to the consumer obligor a record waiving the secured party’s right to a deficiency.</text> </level> </level> <level label="c"> <text>To comply with subsection (a)(1)(B), a writing must provide the following information in the following order:</text> <level label="1"> <text>The aggregate amount of obligations secured by the security interest under which the disposition was made, and, if the amount reflects a rebate of unearned interest or credit service charge, an indication of that fact, calculated as of a specified date:</text> <level label="A"> <text>If the secured party takes or receives possession of the collateral after default, not more than 35 days before the secured party takes or receives possession; or</text> </level> <level label="B"> <text>If the secured party takes or receives possession of the collateral before default or does not take possession of the collateral, not more than 35 days before the disposition;</text> </level> </level> <level label="2"> <text>The amount of proceeds of the disposition;</text> </level> <level label="3"> <text>The aggregate amount of the obligations after deducting the amount of proceeds;</text> </level> <level label="4"> <text>The amount, in the aggregate or by type, and types of expenses, including expenses of retaking, holding, preparing for disposition, processing, and disposing of the collateral, and attorney’s fees secured by the collateral which are known to the secured party and relate to the current disposition;</text> </level> <level label="5"> <text>The amount, in the aggregate or by type, and types of credits, including rebates of interest or credit service charges, to which the obligor is known to be entitled and which are not reflected in the amount in paragraph (1); and</text> </level> <level label="6"> <text>The amount of the surplus or deficiency.</text> </level> </level> <level label="d"> <text>A particular phrasing of the explanation is not required. An explanation complying substantially with the requirements of subsection (a) is sufficient, even if it includes minor errors that are not seriously misleading.</text> </level> <level label="e"> <text>A debtor or consumer obligor is entitled without charge to one response to a request under this section during any six-month period in which the secured party did not send to the debtor or consumer obligor an explanation pursuant to subsection (b)(1). The secured party may require payment of a charge not exceeding $25 for each additional response.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-617" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>A secured party’s disposition of collateral after default:</text> <level label="1"> <text>Transfers to a transferee for value all of the debtor’s rights in the collateral;</text> </level> <level label="2"> <text>Discharges the security interest under which the disposition is made; and</text> </level> <level label="3"> <text>Discharges any subordinate security interest or other subordinate lien.</text> </level> </level> <level label="b"> <text>A transferee that acts in good faith takes free of the rights and interests described in subsection (a), even if the secured party fails to comply with this title or the requirements of any judicial proceeding.</text> </level> <level label="c"> <text>If a transferee does not take free of the rights and interests described in subsection (a), the transferee takes the collateral subject to:</text> <level label="1"> <text>The debtor’s rights in the collateral;</text> </level> <level label="2"> <text>The security interest or agricultural lien under which the disposition is made; and</text> </level> <level label="3"> <text>Any other security interest or other lien.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-618" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>A secondary obligor acquires the rights and becomes obligated to perform the duties of the secured party after the secondary obligor:</text> <level label="1"> <text>Receives an assignment of a secured obligation from the secured party;</text> </level> <level label="2"> <text>Receives a transfer of collateral from the secured party and agrees to accept the rights and assume the duties of the secured party; or</text> </level> <level label="3"> <text>Is subrogated to the rights of a secured party with respect to collateral.</text> </level> </level> <level label="b"> <text>An assignment, transfer, or subrogation described in subsection (a):</text> <level label="1"> <text>Is not a disposition of collateral under § 9-610; and</text> </level> <level label="2"> <text>Relieves the secured party of further duties under this title.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-619" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>In this section, “transfer statement” means a record authenticated by a secured party stating:</text> <level label="1"> <text>That the debtor has defaulted in connection with an obligation secured by specified collateral;</text> </level> <level label="2"> <text>That the secured party has exercised its post-default remedies with respect to the collateral;</text> </level> <level label="3"> <text>That, by reason of the exercise, a transferee has acquired the rights of the debtor in the collateral; and</text> </level> <level label="4"> <text>The name and mailing address of the secured party, debtor, and transferee.</text> </level> </level> <level label="b"> <text>A transfer statement entitles the transferee to the transfer of record of all rights of the debtor in the collateral specified in the statement in any official filing, recording, registration, or certificate-of-title system covering the collateral. If a transfer statement is presented with the applicable fee and request form to the official or office responsible for maintaining the system, the official or office shall:</text> <level label="1"> <text>Accept the transfer statement;</text> </level> <level label="2"> <text>Promptly amend its records to reflect the transfer; and</text> </level> <level label="3"> <text>If applicable, issue a new appropriate certificate of title in the name of the transferee.</text> </level> </level> <level label="c"> <text>A transfer of the record or legal title to collateral to a secured party under subsection (b) or otherwise is not of itself a disposition of collateral under this title and does not of itself relieve the secured party of its duties under this title.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-620" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>Except as otherwise provided in subsection (g), a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if:</text> <level label="1"> <text>The debtor consents to the acceptance under subsection (c);</text> </level> <level label="2"> <text>The secured party does not receive, within the time set forth in subsection (d), a notification of objection to the proposal authenticated by:</text> <level label="A"> <text>A person to which the secured party was required to send a proposal under § 9-621; or</text> </level> <level label="B"> <text>Any other person, other than the debtor, holding an interest in the collateral subordinate to the security interest that is the subject of the proposal;</text> </level> </level> <level label="3"> <text>If the collateral is consumer goods, the collateral is not in the possession of the debtor when the debtor consents to the acceptance; and</text> </level> <level label="4"> <text>Subsection (e) does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to § 9-624.</text> </level> </level> <level label="b"> <text>A purported or apparent acceptance of collateral under this section is ineffective unless:</text> <level label="1"> <text>The secured party consents to the acceptance in an authenticated record or sends a proposal to the debtor; and</text> </level> <level label="2"> <text>The conditions of subsection (a) are met.</text> </level> </level> <level label="c"> <text>For purposes of this section:</text> <level label="1"> <text>A debtor consents to an acceptance of collateral in partial satisfaction of the obligation it secures only if the debtor agrees to the terms of the acceptance in a record authenticated after default; and</text> </level> <level label="2"> <text>A debtor consents to an acceptance of collateral in full satisfaction of the obligation it secures only if the debtor agrees to the terms of the acceptance in a record authenticated after default or the secured party:</text> <level label="A"> <text>Sends to the debtor after default a proposal that is unconditional or subject only to a condition that collateral not in the possession of the secured party be preserved or maintained;</text> </level> <level label="B"> <text>In the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and</text> </level> <level label="C"> <text>Does not receive a notification of objection authenticated by the debtor within 20 days after the proposal is sent.</text> </level> </level> </level> <level label="d"> <text>To be effective under subsection (a)(2), a notification of objection must be received by the secured party:</text> <level label="1"> <text>In the case of a person to which the proposal was sent pursuant to § 9-621, within 20 days after notification was sent to that person; and</text> </level> <level label="2"> <text>In other cases:</text> <level label="A"> <text>Within 20 days after the last notification was sent pursuant to § 9-621; or</text> </level> <level label="B"> <text>If a notification was not sent, before the debtor consents to the acceptance under subsection (c).</text> </level> </level> </level> <level label="e"> <text>A secured party that has taken possession of collateral shall dispose of the collateral pursuant to § 9-610 within the time specified in subsection (f) if:</text> <level label="1"> <text>60 percent of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or</text> </level> <level label="2"> <text>60 percent of the principal amount of the obligation secured has been paid in the case of a nonpurchase-money security interest in consumer goods.</text> </level> </level> <level label="f"> <text>To comply with subsection (e), the secured party shall dispose of the collateral:</text> <level label="1"> <text>Within 90 days after taking possession; or</text> </level> <level label="2"> <text>Within any longer period to which the debtor and all secondary obligors have agreed in an agreement to that effect entered into and authenticated after default.</text> </level> </level> <level label="g"> <text>In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-621" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>A secured party that desires to accept collateral in full or partial satisfaction of the obligation it secures shall send its proposal to:</text> <level label="1"> <text>Any person from which the secured party has received, before the debtor consented to the acceptance, an authenticated notification of a claim of an interest in the collateral;</text> </level> <level label="2"> <text>Any other secured party or lienholder that, 10 days before the debtor consented to the acceptance, held a security interest in or other lien on the collateral perfected by the filing of a financing statement that:</text> <level label="A"> <text>Identified the collateral;</text> </level> <level label="B"> <text>Was indexed under the debtor’s name as of that date; and</text> </level> <level label="C"> <text>Was filed in the office or offices in which to file a financing statement against the debtor covering the collateral as of that date; and</text> </level> </level> <level label="3"> <text>Any other secured party that, 10 days before the debtor consented to the acceptance, held a security interest in the collateral perfected by compliance with a statute, regulation, or treaty described in § 9-311(a).</text> </level> </level> <level label="b"> <text>A secured party that desires to accept collateral in partial satisfaction of the obligation it secures shall send its proposal to any secondary obligor in addition to the persons described in subsection (a).</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-622" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>A secured party’s acceptance of collateral in full or partial satisfaction of the obligation it secures:</text> <level label="1"> <text>Discharges the obligation to the extent consented to by the debtor;</text> </level> <level label="2"> <text>Transfers to the secured party all of a debtor’s rights in the collateral;</text> </level> <level label="3"> <text>Discharges the security interest or agricultural lien that is the subject of the debtor’s consent and any subordinate security interest or other subordinate lien; and</text> </level> <level label="4"> <text>Terminates any other subordinate interest.</text> </level> </level> <level label="b"> <text>A subordinate interest is discharged or terminated under subsection (a), even if the secured party fails to comply with this title.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-623" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>A debtor, any secondary obligor, or any other secured party or lienholder may redeem collateral.</text> </level> <level label="b"> <text>To redeem collateral, a person shall tender:</text> <level label="1"> <text>Fulfillment of all obligations secured by the collateral; and</text> </level> <level label="2"> <text>The reasonable expenses and attorney’s fees described in § 9-615(a)(1).</text> </level> </level> <level label="c"> <text>A redemption may occur at any time before a secured party:</text> <level label="1"> <text>Has collected collateral under § 9-607;</text> </level> <level label="2"> <text>Has disposed of collateral or entered into a contract for its disposition under § 9-610; or</text> </level> <level label="3"> <text>Has accepted collateral in full or partial satisfaction of the obligation it secures under § 9-622.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-624" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>A debtor or secondary obligor may waive the right to notification of disposition of collateral under § 9-611 only by an agreement to that effect entered into and authenticated after default.</text> </level> <level label="b"> <text>A debtor may waive the right to require disposition of collateral under § 9-620(e) only by an agreement to that effect entered into and authenticated after default.</text> </level> <level label="c"> <text>Except in a consumer-goods transaction, a debtor or secondary obligor may waive the right to redeem collateral under § 9-623 only by an agreement to that effect entered into and authenticated after default.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-625" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>If it is established that a secured party is not proceeding in accordance with this title, a court may order or restrain collection, enforcement, or disposition of collateral on appropriate terms and conditions.</text> </level> <level label="b"> <text>Subject to subsections (c) and (d), a person is liable for damages in the amount of any loss caused by a failure to comply with this title. Loss caused by a failure to comply may include loss resulting from the debtor’s inability to obtain, or increased costs of, alternative financing.</text> </level> <level label="c"> <text>Except as otherwise provided in § 9-628:</text> <level label="1"> <text>A person that, at the time of the failure, was a debtor, was an obligor, or held a security interest in or other lien on the collateral may recover damages under subsection (b) for its loss; and</text> </level> <level label="2"> <text>If the collateral is consumer goods, a person that was a debtor or a secondary obligor at the time a secured party failed to comply with this part may recover for that failure in any event an amount not less than the credit service charge plus 10 percent of the principal amount of the obligation or the time-price differential plus 10 percent of the cash price.</text> </level> </level> <level label="d"> <text>A debtor whose deficiency is eliminated under § 9-626 may recover damages for the loss of any surplus. However, a debtor or secondary obligor whose deficiency is eliminated or reduced under § 9-626 may not otherwise recover under subsection (b) for noncompliance with the provisions of this part relating to collection, enforcement, disposition, or acceptance.</text> </level> <level label="e"> <text>If a secured party fails to comply with a request regarding a list of collateral or a statement of account under § 9-210, the secured party may claim a security interest only as shown in the list or statement included in the request as against a person that is reasonably misled by the failure.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-626" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <text>In an action arising from a transaction in which the amount of a deficiency or surplus is in issue, the following rules apply:</text> <level label="1"> <text>A secured party need not prove compliance with the provisions of this subtitle relating to collection, enforcement, disposition, or acceptance unless the debtor or a secondary obligor places the secured party’s compliance in issue.</text> </level> <level label="2"> <text>If the secured party’s compliance is placed in issue, the secured party has the burden of establishing that the collection, enforcement, disposition, or acceptance was conducted in accordance with this subtitle.</text> </level> <level label="3"> <text>Except as otherwise provided in § 9-628, if a secured party fails to prove that the collection, enforcement, disposition, or acceptance was conducted in accordance with the provisions of this subtitle relating to collection, enforcement, disposition, or acceptance, the liability of a debtor or a secondary obligor for a deficiency is limited to an amount by which the sum of the secured obligation, expenses, and attorney’s fees exceeds the greater of:</text> <level label="A"> <text>The proceeds of the collection, enforcement, disposition, or acceptance; or</text> </level> <level label="B"> <text>The amount of proceeds that would have been realized had the noncomplying secured party proceeded in accordance with the provisions of this subtitle relating to collection, enforcement, disposition, or acceptance.</text> </level> </level> <level label="4"> <text>For purposes of paragraph (3)(B), the amount of proceeds that would have been realized is equal to the sum of the secured obligation, expenses, and attorney’s fees unless the secured party proves that the amount is less than that sum.</text> </level> <level label="5"> <text>If a deficiency or surplus is calculated under § 9-615(f), the debtor or obligor has the burden of establishing that the amount of proceeds of the disposition is significantly below the range of prices that a complying disposition to a person other than the secured party, a person related to the secured party, or a secondary obligor would have brought.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-627" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>The fact that a greater amount could have been obtained by a collection, enforcement, disposition, or acceptance at a different time or in a different method from that selected by the secured party is not of itself sufficient to preclude the secured party from establishing that the collection, enforcement, disposition, or acceptance was made in a commercially reasonable manner.</text> </level> <level label="b"> <text>A disposition of collateral is made in a commercially reasonable manner if the disposition is made:</text> <level label="1"> <text>In the usual manner on any recognized market;</text> </level> <level label="2"> <text>At the price current in any recognized market at the time of the disposition; or</text> </level> <level label="3"> <text>Otherwise in conformity with reasonable commercial practices among dealers in the type of property that was the subject of the disposition.</text> </level> </level> <level label="c"> <text>A collection, enforcement, disposition, or acceptance is commercially reasonable if it has been approved:</text> <level label="1"> <text>In a judicial proceeding;</text> </level> <level label="2"> <text>By a bona fide creditors’ committee;</text> </level> <level label="3"> <text>By a representative of creditors; or</text> </level> <level label="4"> <text>By an assignee for the benefit of creditors.</text> </level> </level> <level label="d"> <text>Approval under subsection (c) need not be obtained, and lack of approval does not mean that the collection, enforcement, disposition, or acceptance is not commercially reasonable.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-628" title_number="9" title_name="Secured Transactions" subtitle_number="6" subtitle_name="Default"> <level label="a"> <text>Unless a secured party knows that a person is a debtor or obligor, knows the identity of the person, and knows how to communicate with the person:</text> <level label="1"> <text>The secured party is not liable to the person, or to a secured party or lienholder that has filed a financing statement against the person, for failure to comply with this title; and</text> </level> <level label="2"> <text>The secured party’s failure to comply with this title does not affect the liability of the person for a deficiency.</text> </level> </level> <level label="b"> <text>A secured party is not liable because of its status as secured party:</text> <level label="1"> <text>To a person that is a debtor or obligor, unless the secured party knows:</text> <level label="A"> <text>That the person is a debtor or obligor;</text> </level> <level label="B"> <text>The identity of the person; and</text> </level> <level label="C"> <text>How to communicate with the person; or</text> </level> </level> <level label="2"> <text>To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:</text> <level label="A"> <text>That the person is a debtor; and</text> </level> <level label="B"> <text>The identity of the person.</text> </level> </level> </level> <level label="c"> <text>A secured party is not liable to any person, and a person’s liability for a deficiency is not affected, because of any act or omission arising out of the secured party’s reasonable belief that a transaction is not a consumer-goods transaction or a consumer transaction or that goods are not consumer goods, if the secured party’s belief is based on its reasonable reliance on:</text> <level label="1"> <text>A debtor’s representation concerning the purpose for which collateral was to be used, acquired, or held; or</text> </level> <level label="2"> <text>An obligor’s representation concerning the purpose for which a secured obligation was incurred.</text> </level> </level> <level label="d"> <text>A secured party is not liable to any person under § 9-625(c)(2) for its failure to comply with § 9-616.</text> </level> <level label="e"> <text>A secured party is not liable under § 9-625(c)(2) more than once with respect to any one secured obligation.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-701" title_number="9" title_name="Secured Transactions" subtitle_number="7" subtitle_name="Transition"> <level label="a"> <text>This title takes effect at 12:01 a.m. on July 1, 2001.</text> </level> <level label="b"> <text>In this subtitle the following words have the meanings indicated.</text> <level label="1"> <text>“Original Code” means Chapter 538 of the Acts of 1963, as the provisions of that chapter were amended prior to 12:01 a.m. on January 1, 1981.</text> </level> <level label="2"> <text>“Prior Code” means Chapter 824 of the Acts of 1980, as the provisions of that chapter were amended prior to the effective date of this title.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-702" title_number="9" title_name="Secured Transactions" subtitle_number="7" subtitle_name="Transition"> <level label="a"> <text>Except as otherwise provided in this subtitle, this title applies to a transaction or lien within its scope, even if the transaction or lien was entered into or created before this title takes effect.</text> </level> <level label="b"> <text>Except as otherwise provided in subsection (c) and §§ 9-703 through 9-709:</text> <level label="1"> <text>Transactions and liens that were not governed by the original Code or the prior Code, were validly entered into or created before this title takes effect, and would be subject to this title if they had been entered into or created after this title takes effect, and the rights, duties, and interests flowing from those transactions and liens remain valid after this title takes effect; and</text> </level> <level label="2"> <text>The transactions and liens may be terminated, completed, consummated, and enforced as required or permitted by this title or by the law that otherwise would apply if this title had not taken effect.</text> </level> </level> <level label="c"> <text>This title does not affect an action, case, or proceeding commenced before this title takes effect.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-703" title_number="9" title_name="Secured Transactions" subtitle_number="7" subtitle_name="Transition"> <level label="a"> <text>A security interest that is enforceable immediately before this title takes effect and would have priority over the rights of a person that becomes a lien creditor at that time is a perfected security interest under this title if, when this title takes effect, the applicable requirements for enforceability and perfection under this title are satisfied without further action.</text> </level> <level label="b"> <text>Except as otherwise provided in § 9-705, if, immediately before this title takes effect, a security interest is enforceable and would have priority over the rights of a person that becomes a lien creditor at that time, but the applicable requirements for enforceability or perfection under this title are not satisfied when this title takes effect, the security interest:</text> <level label="1"> <text>Is a perfected security interest for one year after this title takes effect;</text> </level> <level label="2"> <text>Remains enforceable thereafter only if the security interest becomes enforceable under § 9-203 before the year expires; and</text> </level> <level label="3"> <text>Remains perfected thereafter only if the applicable requirements for perfection under this title are satisfied before the year expires.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-704" title_number="9" title_name="Secured Transactions" subtitle_number="7" subtitle_name="Transition"> <text>A security interest that is enforceable immediately before this title takes effect but which would be subordinate to the rights of a person that becomes a lien creditor at that time:</text> <level label="1"> <text>Remains an enforceable security interest for one year after this title takes effect;</text> </level> <level label="2"> <text>Remains enforceable thereafter if the security interest becomes enforceable under § 9-203 when this title takes effect or within one year thereafter; and</text> </level> <level label="3"> <text>Becomes perfected:</text> <level label="A"> <text>Without further action, when this title takes effect if the applicable requirements for perfection under this title are satisfied before or at that time; or</text> </level> <level label="B"> <text>When the applicable requirements for perfection are satisfied if the requirements are satisfied after that time.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-705" title_number="9" title_name="Secured Transactions" subtitle_number="7" subtitle_name="Transition"> <level label="a"> <text>If action, other than the filing of a financing statement, is taken before this title takes effect and the action would have resulted in priority of a security interest over the rights of a person that becomes a lien creditor had the security interest become enforceable before this title takes effect, the action is effective to perfect a security interest that attaches under this title within one year after this title takes effect. An attached security interest becomes unperfected one year after this title takes effect unless the security interest becomes a perfected security interest under this title before the expiration of that period.</text> </level> <level label="b"> <text>The filing of a financing statement before this title takes effect is effective to perfect a security interest to the extent the filing would satisfy the applicable requirements for perfection under this title.</text> </level> <level label="c"> <text>This title does not render ineffective an effective financing statement that, before this title takes effect, is filed and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in the prior Code. However, except as otherwise provided in subsections (e) and (f) and § 9-706, the financing statement ceases to be effective at the earlier of:</text> <level label="1"> <text>The time the financing statement would have ceased to be effective under the law of the jurisdiction in which it is filed; or</text> </level> <level label="2"> <text>June 30, 2006.</text> </level> </level> <level label="d"> <text>Subsection (c) applies to all financing statements filed in this State before this title takes effect, including those filed with respect to security interests in collateral governed as to perfection by the local law of this State under the prior Code and this title.</text> </level> <level label="e"> <text>The filing of a continuation statement after this title takes effect does not continue the effectiveness of the financing statement filed before this title takes effect. However, upon the timely filing of a continuation statement after this title takes effect and in accordance with the law of the jurisdiction governing perfection as provided in Subtitle 3 of this title, the effectiveness of a financing statement filed in the same office in that jurisdiction before this title takes effect continues for the period provided by the law of that jurisdiction.</text> </level> <level label="f"> <text>Subsection (c)(2) applies to a financing statement that, before this title takes effect, is filed against a transmitting utility and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in prior Code § 9-103, only to the extent that Subtitle 3 of this title provides that the law of a jurisdiction other than the jurisdiction in which the financing statement is filed governs perfection of a security interest in collateral covered by the financing statement.</text> </level> <level label="g"> <text>A financing statement that includes a financing statement filed before this title takes effect and a continuation statement filed after this title takes effect is effective only to the extent that it satisfies the requirements of Subtitle 5 of this title for an initial financing statement.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-706" title_number="9" title_name="Secured Transactions" subtitle_number="7" subtitle_name="Transition"> <level label="a"> <text>The filing of an initial financing statement in the office specified in § 9-501 continues the effectiveness of a financing statement filed before this title takes effect if:</text> <level label="1"> <text>The filing of an initial financing statement in that office would be effective to perfect a security interest under this title;</text> </level> <level label="2"> <text>The pre-effective-date financing statement was filed in an office in another state or another office in this State; and</text> </level> <level label="3"> <text>The initial financing statement satisfies subsection (c).</text> </level> </level> <level label="b"> <text>The filing of an initial financing statement under subsection (a) continues the effectiveness of the pre-effective-date financing statement for the period in § 9-515 with respect to an initial financing statement.</text> </level> <level label="c"> <text>To be effective for purposes of subsection (a), an initial financing statement must:</text> <level label="1"> <text>Satisfy the requirements of Subtitle 5 of this title for an initial financing statement;</text> </level> <level label="2"> <text>Identify the pre-effective-date financing statement by indicating the office in which the financing statement was filed and providing the dates of filing and file numbers, if any, of the financing statement and of the most recent continuation statement filed with respect to the financing statement; and</text> </level> <level label="3"> <text>Indicate that the pre-effective-date financing statement remains effective.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-707" title_number="9" title_name="Secured Transactions" subtitle_number="7" subtitle_name="Transition"> <level label="a"> <text>In this section, “pre-effective-date financing statement” means a financing statement filed before this title takes effect.</text> </level> <level label="b"> <text>After this title takes effect, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or otherwise amend the information provided in, a pre-effective-date financing statement only in accordance with the law of the jurisdiction governing perfection as provided in Subtitle 3 of this title. However, the effectiveness of a pre-effective-date financing statement also may be terminated in accordance with the law of the jurisdiction in which the financing statement is filed.</text> </level> <level label="c"> <text>Except as otherwise provided in subsection (d), if the law of this State governs perfection of a security interest, the information in a pre-effective-date financing statement may be amended after this title takes effect only if:</text> <level label="1"> <text>The pre-effective-date financing statement and an amendment are filed in the office specified in § 9-501;</text> </level> <level label="2"> <text>An amendment is filed in the office specified in § 9-501 concurrently with, or after the filing in that office of, an initial financing statement that satisfies § 9-706(c); or</text> </level> <level label="3"> <text>An initial financing statement that provides the information as amended and satisfies § 9-706(c) is filed in the office specified in § 9-501.</text> </level> </level> <level label="d"> <text>If the law of this State governs perfection of a security interest, the effectiveness of a pre-effective-date financing statement may be continued only under § 9-705(e) and (g) or § 9-706.</text> </level> <level label="e"> <text>Whether or not the law of this State governs the perfection of a security interest, the effectiveness of a pre-effective-date financing statement filed in this State may be terminated after this title takes effect by filing a termination statement in the office in which the pre-effective-date financing statement is filed, unless an initial financing statement that satisfies § 9-706(c) has been filed in the office specified by the law of the jurisdiction governing perfection as provided in Subtitle 3 of this title as the office in which to file a financing statement.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-708" title_number="9" title_name="Secured Transactions" subtitle_number="7" subtitle_name="Transition"> <text>A person may file an initial financing statement or a continuation statement under this part if:</text> <level label="1"> <text>The secured party of record authorizes the filing; and</text> </level> <level label="2"> <text>The filing is necessary under this subtitle:</text> <level label="A"> <text>To continue the effectiveness of a financing statement filed before this title takes effect; or</text> </level> <level label="B"> <text>To perfect or continue the perfection of a security interest.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-709" title_number="9" title_name="Secured Transactions" subtitle_number="7" subtitle_name="Transition"> <level label="a"> <text>This title determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before this title takes effect, the prior Code determines priority.</text> </level> <level label="b"> <text>For purposes of § 9-322(a), the priority of a security interest that becomes enforceable under § 9-203 of this title dates from the time this title takes effect if the security interest is perfected under this title by the filing of a financing statement before this title takes effect which would not have been effective to perfect the security interest under the prior Code. This subsection does not apply to conflicting security interests each of which is perfected by the filing of such a financing statement.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-801" title_number="9" title_name="Secured Transactions" subtitle_number="8" subtitle_name="Transition Provisions for 2012 Amendments"> <level label="a"> <text>In this subtitle the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Act” means Chapter 674 of the Acts of the General Assembly of 2012.</text> </level> <level label="c"> <text>“Pre–effective–date financing statement” means a financing statement filed before the effective date of the Act.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-802" title_number="9" title_name="Secured Transactions" subtitle_number="8" subtitle_name="Transition Provisions for 2012 Amendments"> <text>The Act takes effect on July 1, 2013.</text> </section> <section article="gcl" article_name="Commercial Law" number="9-803" title_number="9" title_name="Secured Transactions" subtitle_number="8" subtitle_name="Transition Provisions for 2012 Amendments"> <level label="a"> <text>Except as otherwise provided in this subtitle, the Act applies to a transaction or lien within its scope, even if the transaction or lien was entered into or created before the Act takes effect.</text> </level> <level label="b"> <text>The Act does not affect an action, case, or proceeding commenced before the Act takes effect.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-804" title_number="9" title_name="Secured Transactions" subtitle_number="8" subtitle_name="Transition Provisions for 2012 Amendments"> <level label="a"> <text>A security interest that is a perfected security interest immediately before the Act takes effect is a perfected security interest under this title, as amended by the Act, if, when the Act takes effect, the applicable requirements for attachment and perfection under this title, as amended by the Act, are satisfied without further action.</text> </level> <level label="b"> <text>Except as otherwise provided in § 9–806, if, immediately before the Act takes effect, a security interest is a perfected security interest, but the applicable requirements for perfection under this title, as amended by the Act, are not satisfied when the Act takes effect, the security interest remains perfected thereafter only if the applicable requirements for perfection under this title, as amended by the Act, are satisfied within one year after the Act takes effect.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-805" title_number="9" title_name="Secured Transactions" subtitle_number="8" subtitle_name="Transition Provisions for 2012 Amendments"> <text>A security interest that is an unperfected security interest immediately before the Act takes effect becomes a perfected security interest:</text> <level label="1"> <text>Without further action, when the Act takes effect if the applicable requirements for perfection under this title, as amended by the Act, are satisfied before or at that time; or</text> </level> <level label="2"> <text>When the applicable requirements for perfection are satisfied if the requirements are satisfied after that time.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-806" title_number="9" title_name="Secured Transactions" subtitle_number="8" subtitle_name="Transition Provisions for 2012 Amendments"> <level label="a"> <text>The filing of a financing statement before the Act takes effect is effective to perfect a security interest to the extent the filing would satisfy the applicable requirements for perfection under this title, as amended by the Act.</text> </level> <level label="b"> <text>The Act does not render ineffective an effective financing statement that, before the Act takes effect, is filed and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in this title as it existed before the effective date of the Act. However, except as otherwise provided in subsections (c) and (d) and § 9–807, the financing statement ceases to be effective:</text> <level label="1"> <text>If the financing statement is filed in this State, at the time the financing statement would have ceased to be effective had the Act not taken effect; or</text> </level> <level label="2"> <text>If the financing statement is filed in another jurisdiction, at the earlier of:</text> <level label="A"> <text>The time the financing statement would have ceased to be effective under the law of that jurisdiction; or</text> </level> <level label="B"> <text>June 30, 2018.</text> </level> </level> </level> <level label="c"> <text>The filing of a continuation statement after the Act takes effect does not continue the effectiveness of a financing statement filed before the Act takes effect. However, on the timely filing of a continuation statement after the Act takes effect and in accordance with the law of the jurisdiction governing perfection as provided in this title, as amended by the Act, the effectiveness of a financing statement filed in the same office in that jurisdiction before the Act takes effect continues for the period provided by the law of that jurisdiction.</text> </level> <level label="d"> <text>Subsection (b)(2)(B) applies to a financing statement that, before the Act takes effect, is filed against a transmitting utility and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in this title as it existed before the effective date of the Act, only to the extent that this title, as amended by the Act, provides that the law of a jurisdiction other than the jurisdiction in which the financing statement is filed governs perfection of a security interest in collateral covered by the financing statement.</text> </level> <level label="e"> <text>A financing statement that includes a financing statement filed before the Act takes effect and a continuation statement filed after the Act takes effect is effective only to the extent that it satisfies the requirements of Subtitle 5, as amended by the Act, for an initial financing statement. A financing statement that indicates that the debtor is a decedent’s estate indicates that the collateral is being administered by a personal representative within the meaning of § 9–503(a)(2), as amended by the Act. A financing statement that indicates that the debtor is a trust or is a trustee acting with respect to property held in trust indicates that the collateral is held in a trust within the meaning of § 9–503(a)(3), as amended by the Act.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-807" title_number="9" title_name="Secured Transactions" subtitle_number="8" subtitle_name="Transition Provisions for 2012 Amendments"> <level label="a"> <text>The filing of an initial financing statement in the office specified in § 9–501 continues the effectiveness of a pre–effective–date financing statement if:</text> <level label="1"> <text>The filing of an initial financing statement in that office would be effective to perfect a security interest under this title, as amended by the Act;</text> </level> <level label="2"> <text>The pre–effective–date financing statement was filed in an office in another state; and</text> </level> <level label="3"> <text>The initial financing statement satisfies subsection (c).</text> </level> </level> <level label="b"> <text>The filing of an initial financing statement under subsection (a) continues the effectiveness of the pre–effective–date financing statement:</text> <level label="1"> <text>If the initial financing statement is filed before the Act takes effect, for the period provided in § 9–515, as it existed before the Act takes effect, with respect to an initial financing statement; and</text> </level> <level label="2"> <text>If the initial financing statement is filed after the Act takes effect, for the period provided in § 9–515, as amended by the Act, with respect to an initial financing statement.</text> </level> </level> <level label="c"> <text>To be effective for purposes of subsection (a), an initial financing statement must:</text> <level label="1"> <text>Satisfy the requirements of Subtitle 5, as amended by the Act, for an initial financing statement;</text> </level> <level label="2"> <text>Identify the pre–effective–date financing statement by indicating the office in which the financing statement was filed and providing the dates of filing and file numbers, if any, of the financing statement and of the most recent continuation statement filed with respect to the financing statement; and</text> </level> <level label="3"> <text>Indicate that the pre–effective–date financing statement remains effective.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-808" title_number="9" title_name="Secured Transactions" subtitle_number="8" subtitle_name="Transition Provisions for 2012 Amendments"> <level label="a"> <text>After the Act takes effect, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or otherwise amend the information provided in, a pre–effective–date financing statement only in accordance with the law of the jurisdiction governing perfection as provided in this title, as amended by the Act. However, the effectiveness of a pre–effective–date financing statement also may be terminated in accordance with the law of the jurisdiction in which the financing statement is filed.</text> </level> <level label="b"> <text>Except as otherwise provided in subsection (c), if the law of this State governs perfection of a security interest, the information in a pre–effective–date financing statement may be amended after the Act takes effect only if:</text> <level label="1"> <text>The pre–effective–date financing statement and an amendment are filed in the office specified in § 9–501;</text> </level> <level label="2"> <text>An amendment is filed in the office specified in § 9–501 concurrently with, or after the filing in that office of, an initial financing statement that satisfies § 9–807(c); or</text> </level> <level label="3"> <text>An initial financing statement that provides the information as amended and satisfies § 9–807(c) is filed in the office specified in § 9–501.</text> </level> </level> <level label="c"> <text>If the law of this State governs perfection of a security interest, the effectiveness of a pre–effective–date financing statement may be continued only under § 9–806(c) and (e) or § 9–807.</text> </level> <level label="d"> <text>Whether or not the law of this State governs perfection of a security interest, the effectiveness of a pre–effective–date financing statement filed in this State may be terminated after the Act takes effect by filing a termination statement in the office in which the pre–effective–date financing statement is filed, unless an initial financing statement that satisfies § 9–807(c) has been filed in the office specified by the law of the jurisdiction governing perfection as provided in this title, as amended by the Act, as the office in which to file a financing statement.</text> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-809" title_number="9" title_name="Secured Transactions" subtitle_number="8" subtitle_name="Transition Provisions for 2012 Amendments"> <text>A person may file an initial financing statement or a continuation statement under this subtitle if:</text> <level label="1"> <text>The secured party of record authorizes the filing; and</text> </level> <level label="2"> <text>The filing is necessary under this subtitle:</text> <level label="A"> <text>To continue the effectiveness of a financing statement filed before the Act takes effect; or</text> </level> <level label="B"> <text>To perfect or continue the perfection of a security interest.</text> </level> </level> </section> <section article="gcl" article_name="Commercial Law" number="9-810" title_number="9" title_name="Secured Transactions" subtitle_number="8" subtitle_name="Transition Provisions for 2012 Amendments"> <text>The Act determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before the Act takes effect, this title, as it existed before the Act takes effect, determines priority.</text> </section>