EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

1-1 Section 1. Chapter 104 of NRS is hereby amended by adding thereto

1-2 the provisions set forth as sections 2 to 135, inclusive, of this act.

1-3 Sec. 2. This article may be cited as Uniform Commercial Code–

1-4 Secured Transactions.

1-5 Sec. 3. 1. In this article:

1-6 (a) "Accession" means goods that are physically united with other

1-7 goods in such a manner that the identity of the original goods is not lost.

1-8 (b) "Account," except as used in "account for," means a right to

1-9 payment of a monetary obligation, whether or not earned by

1-10 performance; for property that has been or is to be sold, leased, licensed,

1-11 assigned, or otherwise disposed of; for services rendered or to be

1-12 rendered; for a policy of insurance issued or to be issued; for a

1-13 secondary obligation incurred or to be incurred; for energy provided or

1-14 to be provided; for the use or hire of a vessel under a charter or other

1-15 contract; arising out of the use of a credit or charge card or information

1-16 contained on or for use with the card; or as winnings in a lottery or other

1-17 game of chance operated or sponsored by a state, governmental unit of a

1-18 state, or person licensed or authorized to operate the game by a state or

2-1 governmental unit of a state. The term includes health-care-insurance

2-2 receivables. The term does not include rights to payment evidenced by

2-3 chattel paper or an instrument; commercial tort claims; deposit

2-4 accounts; investment property; letter-of-credit rights or letters of credit;

2-5 or rights to payment for money or funds advanced or sold, other than

2-6 rights arising out of the use of a credit or charge card or information

2-7 contained on or for use with the card.

2-8 (c) "Account debtor" means a person obligated on an account, chattel

2-9 paper, or general intangible. The term does not include persons obligated

2-10 to pay a negotiable instrument, even if the instrument constitutes part of

2-11 chattel paper.

2-12 (d) "Accounting," except as used in "accounting for," means a

2-13 record:

2-14 (1) Authenticated by a secured party;

2-15 (2) Indicating the aggregate unpaid secured obligations as of a date

2-16 not more than 35 days earlier or 35 days later than the date of the

2-17 record; and

2-18 (3) Identifying the components of the obligations in reasonable

2-19 detail.

2-20 (e) "Agricultural lien" means an interest, other than a security

2-21 interest, in farm products:

2-22 (1) Which secures payment or performance of an obligation for:

2-23 (I) Goods or services furnished in connection with a debtor’s

2-24 farming operation; or

2-25 (II) Rent on real property leased by a debtor in connection with

2-26 its farming operation;

2-27 (2) Which is created by statute in favor of a person that:

2-28 (I) In the ordinary course of its business furnished goods or

2-29 services to a debtor in connection with his farming operation; or

2-30 (II) Leased real property to a debtor in connection with his

2-31 farming operation; and

2-32 (3) Whose effectiveness does not depend on the person’s possession

2-33 of the personal property.

2-34 (f) "As-extracted collateral" means:

2-35 (1) Oil, gas, or other minerals that are subject to a security interest

2-36 that:

2-37 (I) Is created by a debtor having an interest in the minerals

2-38 before extraction; and

2-39 (II) Attaches to the minerals as extracted; or

2-40 (2) Accounts arising out of the sale at the wellhead or minehead of

2-41 oil, gas, or other minerals in which the debtor had an interest before

2-42 extraction.

2-43 (g) "Authenticate" means:

3-1 (1) To sign; or

3-2 (2) To execute or otherwise adopt a symbol, or encrypt or similarly

3-3 process a record in whole or in part, with the present intent of the

3-4 authenticating person to identify himself and adopt or accept a record.

3-5 (h) "Bank" means an organization that is engaged in the business of

3-6 banking. The term includes savings banks, savings and loan

3-7 associations, credit unions, and trust companies.

3-8 (i) "Cash proceeds" means proceeds that are money, checks, deposit

3-9 accounts, or the like.

3-10 (j) "Certificate of title" means a certificate of title with respect to

3-11 which a statute provides for the security interest in question to be

3-12 indicated on the certificate as a condition or result of the security

3-13 interest’s obtaining priority over the rights of a lien creditor with respect

3-14 to the collateral.

3-15 (k) "Chattel paper" means a record or records that evidence both a

3-16 monetary obligation and a security interest in or a lease of specific goods

3-17 or of specific goods and software used in the goods. The term does not

3-18 include charters or other contracts involving the use or hire of a vessel. If

3-19 a transaction is evidenced both by a security agreement or lease and by

3-20 an instrument or series of instruments, the group of records taken

3-21 together constitutes chattel paper.

3-22 (l) "Collateral" means the property subject to a security interest or

3-23 agricultural lien. The term includes:

3-24 (1) Proceeds to which a security interest attaches;

3-25 (2) Accounts, chattel paper, payment intangibles, and promissory

3-26 notes that have been sold; and

3-27 (3) Goods that are the subject of a consignment.

3-28 (m) "Commercial tort claim" means a claim arising in tort with

3-29 respect to which:

3-30 (1) The claimant is an organization; or

3-31 (2) The claimant is a natural person and the claim:

3-32 (I) Arose in the course of his business or profession; and

3-33 (II) Does not include damages arising out of personal injury to

3-34 or the death of a natural person.

3-35 (n) "Commodity account" means an account maintained by a

3-36 commodity intermediary in which a commodity contract is carried for a

3-37 commodity customer.

3-38 (o) "Commodity contract" means a commodity futures contract, an

3-39 option on a commodity futures contract, a commodity option, or another

3-40 contract if the contract or option is:

3-41 (1) Traded on or subject to the rules of a board of trade that has

3-42 been designated as a contract market for such a contract pursuant to

3-43 federal commodities laws; or

4-1 (2) Traded on a foreign commodity board of trade, exchange, or

4-2 market, and is carried on the books of a commodity intermediary for a

4-3 commodity customer.

4-4 (p) "Commodity customer" means a person for which a commodity

4-5 intermediary carries a commodity contract on its books.

4-6 (q) "Commodity intermediary" means a person that:

4-7 (1) Is registered as a futures commission merchant under federal

4-8 commodities law; or

4-9 (2) In the ordinary course of its business provides clearance or

4-10 settlement services for a board of trade that has been designated as a

4-11 contract market pursuant to federal commodities law.

4-12 (r) "Communicate" means:

4-13 (1) To send a written or other tangible record;

4-14 (2) To transmit a record by any means agreed upon by the persons

4-15 sending and receiving the record; or

4-16 (3) In the case of transmission of a record to or by a filing office, to

4-17 transmit a record by any means prescribed by filing-office rule.

4-18 (s) "Consignee" means a merchant to which goods are delivered in a

4-19 consignment.

4-20 (t) "Consignment" means a transaction, regardless of its form, in

4-21 which a person delivers goods to a merchant for the purpose of sale and:

4-22 (1) The merchant:

4-23 (I) Deals in goods of that kind under a name other than the name

4-24 of the person making delivery;

4-25 (II) Is not an auctioneer; and

4-26 (III) Is not generally known by its creditors to be substantially

4-27 engaged in selling the goods of others;

4-28 (2) With respect to each delivery, the aggregate value of the goods is

4-29 $1,000 or more at the time of delivery;

4-30 (3) The goods are not consumer goods immediately before delivery;

4-31 and

4-32 (4) The transaction does not create a security interest that secures

4-33 an obligation.

4-34 (u) "Consignor" means a person that delivers goods to a consignee in

4-35 a consignment.

4-36 (v) "Consumer debtor" means a debtor in a consumer transaction.

4-37 (w) "Consumer goods" means goods that are used or bought for use

4-38 primarily for personal, family, or household purposes.

4-39 (x) "Consumer-goods transaction" means a consumer transaction to

4-40 the extent that:

4-41 (1) A natural person incurs an obligation primarily for personal,

4-42 family, or household purposes; and

5-1 (2) A security interest in consumer goods or in consumer goods and

5-2 software that is held or acquired primarily for personal, family, or

5-3 household purposes secures the obligation.

5-4 (y) "Consumer obligor" means an obligor who is a natural person

5-5 and who incurred the obligation as part of a transaction entered into

5-6 primarily for personal, family, or household purposes.

5-7 (z) "Consumer transaction" means a transaction to the extent that a

5-8 natural person incurs an obligation primarily for personal, family, or

5-9 household purposes; a security interest secures the obligation; and the

5-10 collateral is held or acquired primarily for personal, family, or household

5-11 purposes. The term includes consumer-goods transactions.

5-12 (aa) "Continuation statement" means an amendment of a financing

5-13 statement which:

5-14 (1) Identifies, by its file number, the initial financing statement to

5-15 which it relates; and

5-16 (2) Indicates that it is a continuation statement for, or that it is filed

5-17 to continue the effectiveness of, the identified financing statement.

5-18 (bb) "Debtor" means:

5-19 (1) A person having an interest, other than a security interest or

5-20 other lien, in the collateral, whether or not he is an obligor;

5-21 (2) A seller of accounts, chattel paper, payment intangibles, or

5-22 promissory notes; or

5-23 (3) A consignee.

5-24 (cc) "Deposit account" means a demand, time, savings, passbook, or

5-25 similar account maintained with a bank. The term does not include

5-26 investment property or accounts evidenced by an instrument.

5-27 (dd) "Document" means a document of title or a receipt of the type

5-28 described in subsection 2 of NRS 104.7201.

5-29 (ee) "Electronic chattel paper" means chattel paper evidenced by a

5-30 record or records consisting of information stored in an electronic

5-31 medium.

5-32 (ff) "Encumbrance" means a right, other than an ownership interest,

5-33 in real property. The term includes mortgages and other liens on real

5-34 property.

5-35 (gg) "Equipment" means goods other than inventory, farm products,

5-36 or consumer goods.

5-37 (hh) "Farm products" means goods, other than standing timber, with

5-38 respect to which the debtor is engaged in a farming operation and which

5-39 are:

5-40 (1) Crops grown, growing, or to be grown, including:

5-41 (I) Crops produced on trees, vines, and bushes; and

5-42 (II) Aquatic goods produced in aquacultural operations;

6-1 (2) Livestock, born or unborn, including aquatic goods produced in

6-2 aquacultural operations;

6-3 (3) Supplies used or produced in a farming operation; or

6-4 (4) Products of crops or livestock in their unmanufactured states.

6-5 (ii) "Farming operation" means raising, cultivating, propagating,

6-6 fattening, grazing, or any other farming, livestock, or aquacultural

6-7 operation.

6-8 (jj) "File number" means the number assigned to an initial financing

6-9 statement pursuant to subsection 1 of section 91 of this act.

6-10 (kk) "Filing office" means an office designated in section 73 of this

6-11 act as the place to file a financing statement.

6-12 (ll) "Filing-office rule" means a rule adopted pursuant to section 98

6-13 of this act.

6-14 (mm) "Financing statement" means a record or records composed of

6-15 an initial financing statement and any filed record relating to the initial

6-16 financing statement.

6-17 (nn) "Fixture filing" means the filing of a financing statement

6-18 covering goods that are or are to become fixtures and satisfying

6-19 subsections 1 and 2 of section 74 of this act. The term includes the filing

6-20 of a financing statement covering goods of a transmitting utility which

6-21 are or are to become fixtures.

6-22 (oo) "Fixtures" means goods that have become so related to

6-23 particular real property that an interest in them arises under real

6-24 property law.

6-25 (pp) "General intangible" means any personal property, including

6-26 things in action, other than accounts, chattel paper, commercial tort

6-27 claims, deposit accounts, documents, goods, instruments, investment

6-28 property, letter-of-credit rights, letters of credit, money, and oil, gas, or

6-29 other minerals before extraction. The term includes payment intangibles

6-30 and software.

6-31 (qq) "Good faith" means honesty in fact and the observance of

6-32 reasonable commercial standards of fair dealing.

6-33 (rr) "Goods" means all things that are movable when a security

6-34 interest attaches. The term includes fixtures; standing timber that is to be

6-35 cut and removed under a conveyance or contract for sale; the unborn

6-36 young of animals; crops grown, growing, or to be grown, even if the

6-37 crops are produced on trees, vines, or bushes; and manufactured homes.

6-38 The term also includes a computer program embedded in goods and any

6-39 supporting information provided in connection with a transaction

6-40 relating to the program if the program is associated with the goods in

6-41 such a manner that it customarily is considered part of the goods, or by

6-42 becoming the owner of the goods, a person acquires a right to use the

6-43 program in connection with the goods. The term does not include a

7-1 computer program embedded in goods that consist solely of the medium

7-2 in which the program is embedded. The term also does not include

7-3 accounts, chattel paper, commercial tort claims, deposit accounts,

7-4 documents, general intangibles, instruments, investment property, letter-

7-5 of-credit rights, letters of credit, money, or oil, gas, or other minerals

7-6 before extraction.

7-7 (ss) "Governmental unit" means a subdivision, agency, department,

7-8 county, parish, municipality, or other unit of the government of the

7-9 United States, a state, or a foreign country. The term includes an

7-10 organization having a separate corporate existence if the organization is

7-11 eligible to issue debt on which interest is exempt from income taxation

7-12 under the laws of the United States.

7-13 (tt) "Health-care-insurance receivable" means an interest in or claim

7-14 under a policy of insurance which is a right to payment of a monetary

7-15 obligation for health-care goods or services provided.

7-16 (uu) "Instrument" means a negotiable instrument or any other

7-17 writing that evidences a right to the payment of a monetary obligation, is

7-18 not itself a security agreement or lease, and is of a type that in ordinary

7-19 course of business is transferred by delivery with any necessary

7-20 endorsement or assignment. The term does not include investment

7-21 property, letters of credit, or writings that evidence a right to payment

7-22 arising out of the use of a credit or charge card or information contained

7-23 on or for use with the card.

7-24 (vv) "Inventory" means goods, other than farm products, which:

7-25 (1) Are leased by a person as lessor;

7-26 (2) Are held by a person for sale or lease or to be furnished under a

7-27 contract of service;

7-28 (3) Are furnished by a person under a contract of service; or

7-29 (4) Consist of raw materials, work in process, or materials used or

7-30 consumed in a business.

7-31 (ww) "Investment property" means a security, whether certificated or

7-32 uncertificated, security entitlement, securities account, commodity

7-33 contract, or commodity account.

7-34 (xx) "Jurisdiction of organization," with respect to a registered

7-35 organization, means the jurisdiction under whose law the organization is

7-36 organized.

7-37 (yy) "Letter-of-credit right" means a right to payment or performance

7-38 under a letter of credit, whether or not the beneficiary has demanded or

7-39 is at the time entitled to demand payment or performance. The term does

7-40 not include the right of a beneficiary to demand payment or performance

7-41 under a letter of credit.

7-42 (zz) "Lien creditor" means:

8-1 (1) A creditor that has acquired a lien on the property involved by

8-2 attachment, levy, or the like;

8-3 (2) An assignee for benefit of creditors from the time of

8-4 assignment;

8-5 (3) A trustee in bankruptcy from the date of the filing of the

8-6 petition; or

8-7 (4) A receiver in equity from the time of appointment.

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

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

8-10 width or 40 feet or more in body length, or, when erected on site, is 320

8-11 or more square feet, and which is built on a permanent chassis and

8-12 designed to be used as a dwelling with or without a permanent

8-13 foundation when connected to the required utilities, and includes the

8-14 plumbing, heating, air-conditioning, and electrical systems contained

8-15 therein. The term includes any structure that meets all of the

8-16 requirements of this paragraph except the size requirements and with

8-17 respect to which the manufacturer voluntarily files a certification

8-18 required by the United States Secretary of Housing and Urban

8-19 Development and complies with the standards established under Title 42

8-20 of the United States Code.

8-21 (bbb) "Manufactured-home transaction" means a secured

8-22 transaction:

8-23 (1) That creates a purchase-money security interest in a

8-24 manufactured home, other than a manufactured home held as inventory;

8-25 (2) In which a manufactured home, other than a manufactured

8-26 home held as inventory, is the primary collateral.

8-27 (ccc) "Mortgage" means a consensual interest in real property,

8-28 including fixtures, which is created by a mortgage, deed of trust, or

8-29 similar transaction.

8-30 (ddd) "New debtor" means a person that becomes bound as debtor

8-31 under subsection 4 of section 14 of this act by a security agreement

8-32 previously entered into by another person.

8-33 (eee) "New value" means money; money’s worth in property, services,

8-34 or new credit; or release by a transferee of an interest in property

8-35 previously transferred to the transferee. The term does not include an

8-36 obligation substituted for another obligation.

8-37 (fff) "Noncash proceeds" means proceeds other than cash proceeds.

8-38 (ggg) "Obligor" means a person that, with respect to an obligation

8-39 secured by a security interest in or an agricultural lien on the collateral,

8-40 owes payment or other performance of the obligation, has provided

8-41 property other than the collateral to secure payment or other

8-42 performance of the obligation, or is otherwise accountable in whole or in

9-1 part for payment or other performance of the obligation. The term does

9-2 not include an issuer or a nominated person under a letter of credit.

9-3 (hhh) "Original debtor" means a person that, as debtor, entered into a

9-4 security agreement to which a new debtor has become bound under

9-5 subsection 4 of section 14 of this act.

9-6 (iii) "Payment intangible" means a general intangible under which

9-7 the account debtor’s principal obligation is a monetary obligation.

9-8 (jjj) "Person related to," with respect to a natural person, means:

9-9 (1) His spouse;

9-10 (2) His brother, brother-in-law, sister, or sister-in-law;

9-11 (3) His or his spouse’s ancestor or lineal descendant; or

9-12 (4) Any other relative, by blood or marriage, of the person or his

9-13 spouse who shares the same home with him.

9-14 (kkk) "Person related to," with respect to an organization, means:

9-15 (1) A person directly or indirectly controlling, controlled by, or

9-16 under common control with the organization;

9-17 (2) An officer or director of, or a person performing similar

9-18 functions with respect to, the organization;

9-19 (3) An officer or director of, or a person performing similar

9-20 functions with respect to, a person described in subparagraph (1);

9-21 (4) The spouse of a natural person described in subparagraph (1),

9-22 (2), or (3); or

9-23 (5) A person who is related by blood or marriage to a person

9-24 described in subparagraph (1), (2), (3), or (4) and shares the same home

9-25 with that person.

9-26 (lll) "Proceeds" means the following property:

9-27 (1) Whatever is acquired upon the sale, lease, license, exchange, or

9-28 other disposition of collateral;

9-29 (2) Whatever is collected on, or distributed on account of,

9-30 collateral;

9-31 (3) Rights arising out of collateral;

9-32 (4) To the extent of the value of collateral, claims arising out of the

9-33 loss, nonconformity, or interference with the use of, defects or

9-34 infringement of rights in, or damage to, the collateral; and

9-35 (5) To the extent of the value of collateral and to the extent payable

9-36 to the debtor or the secured party, insurance payable by reason of the loss

9-37 or nonconformity of, defects or infringement of rights in, or damage to,

9-38 the collateral.

9-39 (mmm) "Promissory note" means an instrument that evidences a

9-40 promise to pay a monetary obligation, does not evidence an order to pay,

9-41 and does not contain an acknowledgment by a bank that the bank has

9-42 received for deposit a sum of money or funds.

10-1 (nnn) "Proposal" means a record authenticated by a secured party

10-2 which includes the terms on which the secured party is willing to accept

10-3 collateral in full or partial satisfaction of the obligation it secures

10-4 pursuant to sections 119, 120 and 121 of this act.

10-5 (ooo) "Public-finance transaction" means a secured transaction in

10-6 connection with which:

10-7 (1) Debt securities are issued;

10-8 (2) All or a portion of the securities issued have an initial stated

10-9 maturity of at least 20 years; and

10-10 (3) The debtor, the obligor, the secured party, the account debtor or

10-11 other person obligated on collateral, the assignor or assignee of a

10-12 secured obligation, or the assignor or assignee of a security interest is a

10-13 state or a governmental unit of a state.

10-14 (ppp) "Pursuant to commitment," with respect to an advance made or

10-15 other value given by a secured party, means pursuant to the secured

10-16 party’s obligation, whether or not a subsequent event of default or other

10-17 event not within the secured party’s control has relieved or may relieve

10-18 the secured party from its obligation.

10-19 (qqq) "Record," except as used in "for record," "of record," "record

10-20 or legal title," and "record owner," means information that is inscribed

10-21 on a tangible medium or which is stored in an electronic or other

10-22 medium and is retrievable in perceivable form.

10-23 (rrr) "Registered organization" means an organization organized

10-24 solely under the law of a single state or the United States and as to which

10-25 the state or the United States must maintain a public record showing the

10-26 organization to have been organized.

10-27 (sss) "Secondary obligor" means an obligor to the extent that:

10-28 (1) The obligor’s obligation is secondary; or

10-29 (2) The obligor has a right of recourse with respect to an obligation

10-30 secured by collateral against the debtor, another obligor, or property of

10-31 either.

10-32 (ttt) "Secured party" means:

10-33 (1) A person in whose favor a security interest is created or

10-34 provided for under a security agreement, whether or not any obligation

10-35 to be secured is outstanding;

10-36 (2) A person that holds an agricultural lien;

10-37 (3) A consignor;

10-38 (4) A person to which accounts, chattel paper, payment intangibles,

10-39 or promissory notes have been sold;

10-40 (5) A trustee, indenture trustee, agent, collateral agent, or other

10-41 representative in whose favor a security interest or agricultural lien is

10-42 created or provided for; or

11-1 (6) A person that holds a security interest arising under NRS

11-2 104.2401, 104.2505, subsection 3 of NRS 104.2711, NRS 104.4210,

11-3 104.5118, or subsection 5 of NRS 104A.2508.

11-4 (uuu) "Security agreement" means an agreement that creates or

11-5 provides for a security interest.

11-6 (vvv) "Send," in connection with a record or notification, means:

11-7 (1) To deposit in the mail, deliver for transmission, or transmit by

11-8 any other usual means of communication, with postage or cost of

11-9 transmission provided for, addressed to any address reasonable under the

11-10 circumstances; or

11-11 (2) To cause the record or notification to be received within the time

11-12 that it would have been received if properly sent under subparagraph (1).

11-13 (www) "Software" means a computer program and any supporting

11-14 information provided in connection with a transaction relating to the

11-15 program. The term does not include a computer program that is

11-16 contained in goods unless the goods are a computer or computer

11-17 peripheral.

11-18 (xxx) "State" means a state of the United States, the District of

11-19 Columbia, Puerto Rico, the United States Virgin Islands, or any territory

11-20 or insular possession subject to the jurisdiction of the United States.

11-21 (yyy) "Supporting obligation" means a letter-of-credit right or

11-22 secondary obligation that supports the payment or performance of an

11-23 account, chattel paper, document, general intangible, instrument, or

11-24 investment property.

11-25 (zzz) "Tangible chattel paper" means chattel paper evidenced by a

11-26 record or records consisting of information that is inscribed on a tangible

11-27 medium.

11-28 (aaaa) "Termination statement" means an amendment of a financing

11-29 statement which:

11-30 (1) Identifies, by its file number, the initial financing statement to

11-31 which it relates; and

11-32 (2) Indicates either that it is a termination statement or that the

11-33 identified financing statement is no longer effective.

11-34 (bbbb) "Transmitting utility" means a person primarily engaged in

11-35 the business of:

11-36 (1) Operating a railroad, subway, street railway, or trolley bus;

11-37 (2) Transmitting communications electrically, electromagnetically,

11-38 or by light;

11-39 (3) Transmitting goods by pipeline;

11-40 (4) Providing sewerage; or

11-41 (5) Transmitting or producing and transmitting electricity, steam,

11-42 gas, or water.

12-1 2. The following definitions in other articles apply to this article:

12-2 "Applicant." NRS 104.5102.

12-3 "Beneficiary." NRS 104.5102.

12-4 "Broker." NRS 104.8102.

12-5 "Certificated security." NRS 104.8102.

12-6 "Check." NRS 104.3104.

12-7 "Clearing corporation." NRS 104.8102.

12-8 "Contract for sale." NRS 104.2106.

12-9 "Customer." NRS 104.4104.

12-10 "Entitlement holder." NRS 104.8102.

12-11 "Financial asset." NRS 104.8102.

12-12 "Holder in due course." NRS 104.3302.

12-13 "Issuer." NRS 104.5102.

12-14 "Lease." NRS 104A.2103.

12-15 "Lease agreement." NRS 104A.2103.

12-16 "Lease contract." NRS 104A.2103.

12-17 "Leasehold interest." NRS 104A.2103.

12-18 "Lessee." NRS 104A.2103.

12-19 "Lessee in ordinary course of business." NRS 104A.2103.

12-20 "Lessor." NRS 104A.2103.

12-21 "Lessor’s residual interest." NRS 104A.2103.

12-22 "Letter of credit." NRS 104.5102.

12-23 "Merchant." NRS 104.2104.

12-24 "Negotiable instrument." NRS 104.3104.

12-25 "Nominated person." NRS 104.5102.

12-26 "Note." NRS 104.3104.

12-27 "Proceeds of a letter of credit." NRS 104.5114.

12-28 "Prove." NRS 104.3103.

12-29 "Sale." NRS 104.2106.

12-30 "Securities account." NRS 104.8501.

12-31 "Securities intermediary." NRS 104.8102.

12-32 "Security." NRS 104.8102.

12-33 "Security certificate." NRS 104.8102.

12-34 "Security entitlement." NRS 104.8102.

12-35 "Uncertificated security." NRS 104.8102.

12-36 3. Article 1 contains general definitions and principles of

12-37 construction and interpretation applicable throughout this article.

12-38 Sec. 4. 1. In this section:

12-39 (a) "Purchase-money collateral" means goods or software that

12-40 secures a purchase-money obligation incurred with respect to that

12-41 collateral; and

12-42 (b) "Purchase-money obligation" means an obligation of an obligor

12-43 incurred as all or part of the price of the collateral or for value given to

13-1 enable the debtor to acquire rights in or the use of the collateral if the

13-2 value is in fact so used.

13-3 2. A security interest in goods is a purchase-money security interest:

13-4 (a) To the extent that the goods are purchase-money collateral with

13-5 respect to that security interest;

13-6 (b) If the security interest is in inventory that is or was purchase-

13-7 money collateral, also to the extent that the security interest secures a

13-8 purchase-money obligation incurred with respect to other inventory in

13-9 which the secured party holds or held a purchase-money security

13-10 interest; and

13-11 (c) Also to the extent that the security interest secures a purchase-

13-12 money obligation incurred with respect to software in which the secured

13-13 party holds or held a purchase-money security interest.

13-14 3. A security interest in software is a purchase-money security

13-15 interest to the extent that the security interest also secures a purchase-

13-16 money obligation incurred with respect to goods in which the secured

13-17 party holds or held a purchase-money security interest if:

13-18 (a) The debtor acquired its interest in the software in an integrated

13-19 transaction in which it acquired an interest in the goods; and

13-20 (b) The debtor acquired its interest in the software for the principal

13-21 purpose of using the software in the goods.

13-22 4. The security interest of a consignor in goods that are the subject of

13-23 a consignment is a purchase-money security interest in inventory.

13-24 5. In a transaction other than a consumer-goods transaction, if the

13-25 extent to which a security interest is a purchase-money security interest

13-26 depends on the application of a payment to a particular obligation, the

13-27 payment must be applied:

13-28 (a) In accordance with any reasonable method of application to which

13-29 the parties agree;

13-30 (b) In the absence of the parties’ agreement to a reasonable method,

13-31 in accordance with any intention of the obligor manifested at or before

13-32 the time of payment; or

13-33 (c) In the absence of an agreement to a reasonable method and a

13-34 timely manifestation of the obligor’s intention, in the following order:

13-35 (1) To obligations that are not secured; and

13-36 (2) If more than one obligation is secured, to obligations secured by

13-37 purchase-money security interests in the order in which those obligations

13-38 were incurred.

13-39 6. In a transaction other than a consumer-goods transaction, a

13-40 purchase-money security interest does not lose its status as such, even if:

13-41 (a) The purchase-money collateral also secures an obligation that is

13-42 not a purchase-money obligation;

14-1 (b) Collateral that is not purchase-money collateral also secures the

14-2 purchase-money obligation; or

14-3 (c) The purchase-money obligation has been renewed, refinanced,

14-4 consolidated, or restructured.

14-5 7. In a transaction other than a consumer-goods transaction, a

14-6 secured party claiming a purchase-money security interest has the

14-7 burden of establishing the extent to which the security interest is a

14-8 purchase-money security interest.

14-9 8. The limitation of the rules in subsections 5, 6 and 7 to transactions

14-10 other than consumer-goods transactions leaves to the court the

14-11 determination of the proper rules in consumer-goods transactions. The

14-12 court may not infer from that limitation the nature of the proper rule in

14-13 consumer-goods transactions and may continue to apply established

14-14 approaches.

14-15 Sec. 5. 1. A secured party has control of a deposit account if:

14-16 (a) The secured party is the bank with which the deposit account is

14-17 maintained;

14-18 (b) The debtor, secured party, and bank have agreed in an

14-19 authenticated record that the bank will comply with instructions

14-20 originated by the secured party directing disposition of the funds in the

14-21 account without further consent by the debtor; or

14-22 (c) The secured party becomes the bank’s customer with respect to the

14-23 deposit account.

14-24 2. A secured party that has satisfied subsection 1 has control, even if

14-25 the debtor retains the right to direct the disposition of funds from the

14-26 deposit account.

14-27 Sec. 6. A secured party has control of electronic chattel paper if the

14-28 record or records comprising the chattel paper are created, stored, and

14-29 assigned in such a manner that:

14-30 1. A single authoritative copy of the record or records exists which is

14-31 unique, identifiable and, except as otherwise provided in subsections 4, 5,

14-32 and 6, unalterable;

14-33 2. The authoritative copy identifies the secured party as the assignee

14-34 of the record or records;

14-35 3. The authoritative copy is communicated to and maintained by the

14-36 secured party or its designated custodian;

14-37 4. Copies or revisions that add or change an identified assignee of

14-38 the authoritative copy can be made only with the participation of the

14-39 secured party;

14-40 5. Each copy of the authoritative copy and any copy of a copy is

14-41 readily identifiable as a copy that is not the authoritative copy; and

14-42 6. Any revision of the authoritative copy is readily identifiable as an

14-43 authorized or unauthorized revision.

15-1 Sec. 7. 1. A person has control of a certificated security,

15-2 uncertificated security, or security entitlement as provided in NRS

15-3 104.8106.

15-4 2. A secured party has control of a commodity contract if:

15-5 (a) The secured party is the commodity intermediary with which the

15-6 commodity contract is carried; or

15-7 (b) The commodity customer, secured party, and commodity

15-8 intermediary have agreed that the commodity intermediary will apply any

15-9 value distributed on account of the commodity contract as directed by the

15-10 secured party without further consent by the commodity customer.

15-11 3. A secured party having control of all security entitlements or

15-12 commodity contracts carried in a securities account or commodity

15-13 account has control over the securities account or commodity account.

15-14 Sec. 8. A secured party has control of a letter-of-credit right to the

15-15 extent of any right to payment or performance by the issuer or any

15-16 nominated person if the issuer or nominated person has consented to an

15-17 assignment of proceeds of the letter of credit under subsection 3 of NRS

15-18 104.5114 or otherwise applicable law or practice.

15-19 Sec. 9. 1. Except as otherwise provided in subsections 3, 4 and 5, a

15-20 description of personal or real property is sufficient, whether or not it is

15-21 specific, if it reasonably identifies what is described.

15-22 2. Except as otherwise provided in subsection 4, a description of

15-23 collateral reasonably identifies the collateral if it identifies the collateral

15-24 (a) Specific listing;

15-25 (b) Category;

15-26 (c) Except as otherwise provided in subsection 5, a type of collateral

15-27 defined in the Uniform Commercial Code;

15-28 (d) Quantity;

15-29 (e) Computational or allocational formula or procedure; or

15-30 (f) Except as otherwise provided in subsection 3, any other method, if

15-31 the identity of the collateral is objectively determinable.

15-32 3. A description of collateral as "all the debtor’s assets" or "all the

15-33 debtor’s personal property" or using words of similar import does not

15-34 reasonably identify the collateral.

15-35 4. Except as otherwise provided in subsection 5, a description of a

15-36 security entitlement, securities account, or commodity account is

15-37 sufficient if it describes:

15-38 (a) The collateral by those terms or as investment property; or

15-39 (b) The underlying financial asset or commodity contract.

15-40 5. A description only by type of collateral defined in the Uniform

15-41 Commercial Code is an insufficient description of:

15-42 (a) A commercial tort claim; or

16-1 (b) In a consumer transaction, consumer goods, a security

16-2 entitlement, a securities account, or a commodity account.

16-3 Sec. 10. 1. Except as otherwise provided in subsections 3 and 4,

16-4 this article applies to:

16-5 (a) A transaction, regardless of its form, that creates a security interest

16-6 in personal property or fixtures by contract;

16-7 (b) An agricultural lien;

16-8 (c) A sale of accounts, chattel paper, payment intangibles, or

16-9 promissory notes;

16-10 (d) A consignment;

16-11 (e) A security interest arising under NRS 104.2401, 104.2505,

16-12 subsection 3 of NRS 104.2711, or subsection 5 of NRS 104A.2508, as

16-13 provided in section 11 of this act; and

16-14 (f) A security interest arising under NRS 104.4210 or 104.5118.

16-15 2. The application of this article to a security interest in a secured

16-16 obligation is not affected by the fact that the obligation is itself secured

16-17 by a transaction or interest to which this article does not apply.

16-18 3. This article does not apply to the extent that:

16-19 (a) A statute, regulation, or treaty of the United States preempts this

16-20 article;

16-21 (b) Another statute of this state expressly governs the creation,

16-22 perfection, priority, or enforcement of a security interest created by this

16-23 state or a governmental unit of this state;

16-24 (c) A statute of another state, a foreign country, or a governmental

16-25 unit of another state or a foreign country, other than a statute generally

16-26 applicable to security interests, expressly governs creation, perfection,

16-27 priority, or enforcement of a security interest created by the state,

16-28 country, or governmental unit; or

16-29 (d) The rights of a transferee beneficiary or nominated person under

16-30 a letter of credit are independent and superior under NRS 104.5114.

16-31 4. This article does not apply to:

16-32 (a) A landlord’s lien, other than an agricultural lien;

16-33 (b) A lien, other than an agricultural lien, given by statute or other

16-34 rule of law for services or materials, but section 54 of this act applies

16-35 with respect to priority of the lien;

16-36 (c) An assignment of a claim for wages, salary, or other compensation

16-37 of an employee;

16-38 (d) A sale of accounts, chattel paper, payment intangibles, or

16-39 promissory notes as part of a sale of the business out of which they arose;

16-40 (e) An assignment of accounts, chattel paper, payment intangibles, or

16-41 promissory notes which is for the purpose of collection only;

16-42 (f) An assignment of a right to payment under a contract to an

16-43 assignee that is also obligated to perform under the contract;

17-1 (g) An assignment of a single account, payment intangible, or

17-2 promissory note to an assignee in full or partial satisfaction of a

17-3 preexisting indebtedness;

17-4 (h) A transfer of an interest in or an assignment of a claim under a

17-5 policy of insurance, other than an assignment by or to a health-care

17-6 provider of a health-care-insurance receivable and any subsequent

17-7 assignment of the right to payment, but sections 36 and 43 of this act

17-8 apply with respect to proceeds and priorities in proceeds;

17-9 (i) An assignment of a right represented by a judgment, other than a

17-10 judgment taken on a right to payment that was collateral;

17-11 (j) A right of recoupment or set-off, but:

17-12 (1) Section 61 of this act applies with respect to the effectiveness of

17-13 rights of recoupment or set-off against deposit accounts; and

17-14 (2) Section 67 of this act applies with respect to defenses or claims

17-15 of an account debtor;

17-16 (k) The creation or transfer of an interest in or lien on real property,

17-17 including a lease or rents thereunder, except to the extent that provision

17-18 is made for:

17-19 (1) Liens on real property in sections 14 and 29 of this act;

17-20 (2) Fixtures in section 55 of this act;

17-21 (3) Fixture filings in sections 73, 74, 84, 88 and 91 of this act; and

17-22 (4) Security agreements covering personal and real property in

17-23 section 103 of this act;

17-24 (l) An assignment of a claim arising in tort, other than a commercial

17-25 tort claim, but sections 36 and 43 of this act apply with respect to

17-26 proceeds and priorities in proceeds; or

17-27 (m) An assignment of a deposit account in a consumer transaction,

17-28 but sections 36 and 43 of this act apply with respect to proceeds and

17-29 priorities in proceeds.

17-30 Sec. 11. A security interest arising under NRS 104.2401, 104.2505,

17-31 subsection 3 of 104.2711, or subsection 5 of NRS 104A.2508 is subject to

17-32 this article. However, until the debtor obtains possession of the goods:

17-33 1. The security interest is enforceable, even if paragraph (c) of

17-34 subsection 2 of section 14 of this act has not been satisfied;

17-35 2. Filing is not required to perfect the security interest;

17-36 3. The rights of the secured party after default by the debtor are

17-37 governed by Article 2 or 2A; and

17-38 4. The security interest has priority over a conflicting security

17-39 interest created by the debtor.

17-40 Sec. 12. 1. Except as otherwise provided in the Uniform

17-41 Commercial Code, a security agreement is effective according to its terms

17-42 between the parties, against purchasers of the collateral, and against

17-43 creditors.

18-1 2. A transaction subject to this article is subject to any applicable

18-2 rule of law which establishes a different rule for consumers and to

18-3 chapters 97 and 97A of NRS.

18-4 3. In case of conflict between this article and a rule of law, statute, or

18-5 regulation described in subsection 2, the rule of law, statute, or

18-6 regulation controls. Failure to comply with a statute or regulation

18-7 described in subsection 2 has only the effect the statute or regulation

18-8 specifies.

18-9 4. This article does not:

18-10 (a) Validate any rate, charge, agreement, or practice that violates a

18-11 rule of law, statute, or regulation described in subsection 2; or

18-12 (b) Extend the application of the rule of law, statute, or regulation to a

18-13 transaction not otherwise subject to it.

18-14 Sec. 13. Except as otherwise provided with respect to consignments

18-15 or sales of accounts, chattel paper, payment intangibles, or promissory

18-16 notes, the provisions of this article with regard to rights and obligations

18-17 apply whether or not title to collateral is in the secured party or the

18-18 debtor.

18-19 Sec. 14. 1. A security interest attaches to collateral when it

18-20 becomes enforceable against the debtor with respect to the collateral,

18-21 unless an agreement expressly postpones the time of attachment.

18-22 2. Except as otherwise provided in subsections 3 to 9, inclusive, a

18-23 security interest is enforceable against the debtor and third parties with

18-24 respect to the collateral only if:

18-25 (a) Value has been given;

18-26 (b) The debtor has rights in the collateral or the power to transfer

18-27 rights in the collateral to a secured party; and

18-28 (c) One of the following conditions is met:

18-29 (1) The debtor has authenticated a security agreement that provides

18-30 a description of the collateral and, if the security interest covers timber to

18-31 be cut, a description of the land concerned;

18-32 (2) The collateral is not a certificated security and is in the

18-33 possession of the secured party under section 34 of this act pursuant to

18-34 the debtor’s security agreement;

18-35 (3) The collateral is a certificated security in registered form and

18-36 the security certificate has been delivered to the secured party under NRS

18-37 104.8301 pursuant to the debtor’s security agreement; or

18-38 (4) The collateral is deposit accounts, electronic chattel paper,

18-39 investment property, or letter-of-credit rights, and the secured party has

18-40 control under section 5, 6, 7 or 8 of this act pursuant to the debtor’s

18-41 security agreement.

18-42 3. Subsection 2 is subject to NRS 104.4210 on the security interest of

18-43 a collecting bank, NRS 104.5118 on the security interest of a letter-of

19-1 credit issuer or nominated person, section 11 of this act on a security

19-2 interest arising under Article 2 or 2A, and section 17 of this act on

19-3 security interests in investment property.

19-4 4. A person becomes bound as debtor by a security agreement

19-5 entered into by another person if, by operation of law other than this

19-6 article or by contract:

19-7 (a) The security agreement becomes effective to create a security

19-8 interest in his property; or

19-9 (b) He becomes generally obligated for the obligations of the other

19-10 person, including the obligation secured under the security agreement,

19-11 and acquires or succeeds to all or substantially all of the assets of the

19-12 other person.

19-13 5. If a new debtor becomes bound as debtor by a security agreement

19-14 entered into by another person:

19-15 (a) The agreement satisfies paragraph (c) of subsection 2 with respect

19-16 to existing or after-acquired property of the new debtor to the extent the

19-17 property is described in the agreement; and

19-18 (b) Another agreement is not necessary to make a security interest in

19-19 the property enforceable.

19-20 6. The attachment of a security interest in collateral gives the

19-21 secured party the rights to proceeds provided by section 36 of this act and

19-22 is also attachment of a security interest in a supporting obligation for the

19-23 collateral.

19-24 7. The attachment of a security interest in a right to payment or

19-25 performance secured by a security interest or other lien on personal or

19-26 real property is also attachment of a security interest in the security

19-27 interest, mortgage, or other lien.

19-28 8. The attachment of a security interest in a securities account is also

19-29 attachment of a security interest in the security entitlements carried in

19-30 the securities account.

19-31 9. The attachment of a security interest in a commodity account is

19-32 also attachment of a security interest in the commodity contracts carried

19-33 in the commodity account.

19-34 Sec. 15. 1. Except as otherwise provided in subsection 2, a security

19-35 agreement may create or provide for a security interest in after-acquired

19-36 collateral.

19-37 2. A security interest does not attach under a term constituting an

19-38 after-acquired property clause to:

19-39 (a) Consumer goods, other than an accession when given as

19-40 additional security, unless the debtor acquires rights in them within 10

19-41 days after the secured party gives value; or

19-42 (b) A commercial tort claim.

20-1 3. A security agreement may provide that collateral secures, or that

20-2 accounts, chattel paper, payment intangibles, or promissory notes are

20-3 sold in connection with, future advances or other value, whether or not

20-4 the advances or value are given pursuant to commitment.

20-5 Sec. 16. 1. A security interest is not invalid or fraudulent against

20-6 creditors solely because:

20-7 (a) The debtor has the right or ability to:

20-8 (1) Use, commingle, or dispose of all or part of the collateral,

20-9 including returned or repossessed goods;

20-10 (2) Collect, compromise, enforce, or otherwise deal with collateral;

20-11 (3) Accept the return of collateral or make repossessions; or

20-12 (4) Use, commingle, or dispose of proceeds; or

20-13 (b) The secured party fails to require the debtor to account for

20-14 proceeds or replace collateral.

20-15 2. This section does not relax the requirements of possession if

20-16 attachment, perfection, or enforcement of a security interest depends

20-17 upon possession of the collateral by the secured party.

20-18 Sec. 17. 1. A security interest in favor of a securities intermediary

20-19 attaches to a person’s security entitlement if:

20-20 (a) He buys a financial asset through the securities intermediary in a

20-21 transaction in which he is obligated to pay the purchase price to the

20-22 securities intermediary at the time of the purchase; and

20-23 (b) The securities intermediary credits the financial asset to his

20-24 securities account before he pays the securities intermediary.

20-25 2. The security interest described in subsection 1 secures the buyer’s

20-26 obligation to pay for the financial asset.

20-27 3. A security interest in favor of a person that delivers a certificated

20-28 security or other financial asset represented by a writing attaches to the

20-29 security or other financial asset if:

20-30 (a) The security or other financial asset:

20-31 (1) In the ordinary course of business is transferred by delivery with

20-32 any necessary endorsement or assignment; and

20-33 (2) Is delivered under an agreement between persons in the

20-34 business of dealing with such securities or financial assets; and

20-35 (b) The agreement calls for delivery against payment.

20-36 4. The security interest described in subsection 3 secures the

20-37 obligation to make payment for the delivery.

20-38 Sec. 18. 1. Except as otherwise provided in subsection 4, a secured

20-39 party shall use reasonable care in the custody and preservation of

20-40 collateral in the secured party’s possession. In the case of chattel paper

20-41 or an instrument, reasonable care includes taking necessary steps to

20-42 preserve rights against prior parties unless otherwise agreed.

21-1 2. Except as otherwise provided in subsection 4, if a secured party

21-2 has possession of collateral:

21-3 (a) Reasonable expenses, including the cost of insurance and payment

21-4 of taxes or other charges, incurred in the custody, preservation, use, or

21-5 operation of the collateral are chargeable to the debtor and are secured

21-6 by the collateral;

21-7 (b) The risk of accidental loss or damage is on the debtor to the extent

21-8 of a deficiency in any effective insurance coverage;

21-9 (c) The secured party shall keep the collateral identifiable, but

21-10 fungible collateral may be commingled; and

21-11 (d) The secured party may use or operate the collateral:

21-12 (1) For the purpose of preserving the collateral or its value;

21-13 (2) As permitted by an order of a court having competent

21-14 jurisdiction; or

21-15 (3) Except in the case of consumer goods, in the manner and to the

21-16 extent agreed by the debtor.

21-17 3. Except as otherwise provided in subsection 4, a secured party

21-18 having possession of collateral or control of collateral under section 5, 6,

21-19 7 or 8 of this act:

21-20 (a) May hold as additional security any proceeds, except money or

21-21 funds, received from the collateral;

21-22 (b) Shall apply money or funds received from the collateral to reduce

21-23 the secured obligation, unless remitted to the debtor; and

21-24 (c) May create a security interest in the collateral.

21-25 4. If the secured party is a buyer of accounts, chattel paper, payment

21-26 intangibles, or promissory notes or a consignor:

21-27 (a) Subsection 1 does not apply unless the secured party is entitled

21-28 under an agreement:

21-29 (1) To charge back uncollected collateral; or

21-30 (2) Otherwise to full or limited recourse against the debtor or a

21-31 secondary obligor based on the nonpayment or other default of an

21-32 account debtor or other obligor on the collateral; and

21-33 (b) Subsections 2 and 3 do not apply.

21-34 Sec. 19. If there is no outstanding secured obligation and the

21-35 secured party is not committed to make advances, incur obligations, or

21-36 otherwise give value, within 10 days after receiving an authenticated

21-37 demand by the debtor:

21-38 1. A secured party having control of a deposit account under

21-39 paragraph (b) of subsection 1 of section 5 of this act shall send to the

21-40 bank with which the deposit account is maintained an authenticated

21-41 statement that releases the bank from any further obligation to comply

21-42 with instructions originated by the secured party;

22-1 2. A secured party having control of a deposit account under

22-2 paragraph (c) of subsection 1 of section 5 of this act shall:

22-3 (a) Pay the debtor the balance on deposit in the deposit account; or

22-4 (b) Transfer the balance on deposit into a deposit account in the

22-5 debtor’s name;

22-6 3. A secured party, other than a buyer, having control of electronic

22-7 chattel paper under section 6 of this act shall:

22-8 (a) Communicate the authoritative copy of the electronic chattel paper

22-9 to the debtor or its designated custodian;

22-10 (b) If the debtor designates a custodian that is the designated

22-11 custodian with which the authoritative copy of the electronic chattel

22-12 paper is maintained for the secured party, communicate to the custodian

22-13 an authenticated record releasing the designated custodian from any