157

AN ACT relating to commercial transactions; revising articles 5 and 8 of the Uniform Commercial Code; and providing other matters properly relating thereto.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Rights of creditors against sold goods. NRS 104.2402.
Applicability of the article on leases. NRS 104A.2105 and 104A.2106.
Applicability of the article on bank deposits and collections. NRS 104.4102.
Letters of credit. Section 6 of this act.
Applicability of the article on investment securities. NRS 104.8106.
Perfection provisions of the article on secured transactions. NRS 104.9103.
Governing law in the article on funds transfers. NRS 104A.4507.
Sec. 37. NRS 104.1110 is hereby amended to read as follows:
104.11101. Transactions validly entered into before March 1, 1967, and the rights, duties and interests flowing from them remain valid thereafter and may be terminated, completed, consummated or enforced as required or permitted by any statute or other law amended or repealed by this chapter as though such repeal or amendment had not occurred.
2. Transactions validly entered into after March 1, 1967, and before July 1, 1975, which were subject to the provisions of this chapter before July 1, 1975, and which would be subject to the provisions of this chapter as amended effective July 1, 1975, if they had been entered into after July 1, 1975, and the rights, duties and interests flowing from such transactions remain valid after July 1, 1975, and may be terminated, completed, consummated or enforced as required or permitted by this chapter as amended effective July 1, 1975. Security interests arising out of such transactions which are perfected on July 1, 1975, shall remain perfected until they lapse as provided by this chapter as amended effective July 1, 1975, and may be continued as permitted by this chapter as amended effective July 1, 1975, except as stated in NRS 104.902.
3. A transaction arising out of or associated with a letter of credit that was issued before October 1, 1997, and the rights, obligations and interests flowing from that transaction are governed by the former provisions of this chapter as if the amendment effective October 1, 1997, had not occurred, and may be terminated, completed, consummated or enforced under those former provisions.
4. Rights and obligations that arose after March 1, 1967, and before October 1, 1991, under NRS 104.6101 to 104.6111, inclusive, Uniform Commercial Code-Bulk Transfers, remain valid and may be enforced as though those sections had not been repealed.
5. If a security interest in a security governed by NRS 104.8101 to 104.8406, inclusive, and sections 8 to 33, inclusive, of this act is perfected before October 1, 1997, and the action by which the security interest was perfected would suffice to perfect a security interest under this chapter as amended effective on that date, no further action is required to continue perfection. If a security interest in a security is perfected before October 1, 1997, but the action by which the security interest was perfected would not suffice to perfect a security interest under this chapter as amended effective on that date, the security interest remains perfected for a period of 4 months after that date and remains perfected thereafter if appropriate action to perfect it under this chapter as so amended is taken within that period. If a security interest is perfected before October 1, 1997, and the security interest can be perfected by filing under this chapter as amended effective on that date, a financing statement signed by the secured party instead of the debtor may be filed within that period to continue perfection or thereafter to perfect.
Sec. 38. NRS 104.2512 is hereby amended to read as follows:
104.25121. Where the contract requires payment before inspection nonconformity of the goods does not excuse the buyer from so making payment unless:
(a) The nonconformity appears without inspection; or
(b) Despite tender of the required documents the circumstances would justify injunction against honor under the provisions of this chapter . [(NRS 104.5114).]
2. Payment pursuant to subsection 1 does not constitute an acceptance of goods or impair the buyer's right to inspect or any of his remedies.
Sec. 39. NRS 104.4104 is hereby amended to read as follows:
104.41041. In this article, unless the context otherwise requires:
(a) "Account" means any deposit or credit account with a bank including a demand, time, savings, passbook, share draft or like account, other than an account evidenced by a certificate of deposit.
(b) "Afternoon" means the period of a day between noon and midnight.
(c) "Banking day" means that part of any day on which a bank is open to the public for carrying on substantially all of its banking functions.
(d) "Clearing house" means any association of banks or other payors regularly clearing items.
(e) "Customer" means any person having an account with a bank or for whom a bank has agreed to collect items, including a bank that maintains an account at another bank.
(f) "Documentary draft" means a draft to be presented for acceptance or payment if specified documents, certificated securities [(NRS 104.8102)] or instructions for uncertificated securities , [(NRS 104.8308),] or other certificates, statements or the like are to be received by the drawee or other payor before acceptance or payment of the draft.
(g) "Draft" means a draft as defined in NRS 104.3104 or an item, other than an instrument, that is an order.
(h) "Drawee" means a person ordered in a draft to make payment.
(i) "Item" means an instrument or a promise or order to pay money handled by a bank for collection or payment. The term does not include a payment order governed by article 4A or a credit or debit card slip.
(j) "Midnight deadline" with respect to a bank is midnight on its next banking day following the banking day on which it receives the relevant item or notice or from which the time for taking action commences to run, whichever is later.
(k) "Settle" means to pay in cash, by clearinghouse settlement, in a charge or credit or by remittance, or otherwise as instructed. A settlement may be either provisional or final.
(l) "Suspends payments" with respect to a bank means that it has been closed by order of the supervisory authorities, that a public officer has been appointed to take it over or that it ceases or refuses to make payments in the ordinary course of business.
2. Other definitions applying to this article and the sections in which they appear are:

"Agreement for electronic presentment." NRS 104.4110.
"Bank." NRS 104.4105.
"Collecting bank." NRS 104.4105.
"Depositary bank." NRS 104.4105.
"Intermediary bank." NRS 104.4105.
"Payor bank." NRS 104.4105.
"Presenting bank." NRS 104.4105.
"Presentment notice." NRS 104.4110.

3. The following definitions in other articles apply to this article:

"Acceptance." NRS 104.3409.
"Alteration." NRS 104.3407.
"Cashier's check." NRS 104.3104.
"Certificate of deposit." NRS 104.3104.
"Certified check." NRS 104.3409.
"Check." NRS 104.3104.
"Good faith." NRS 104.3103.
"Holder in due course." NRS 104.3302.
"Instrument." NRS 104.3104.
"Notice of dishonor." NRS 104.3503.
"Order." NRS 104.3103.
"Ordinary care." NRS 104.3103.
"Person entitled to enforce." NRS 104.3301.
"Presentment." NRS 104.3501.
"Promise." NRS 104.3103.
"Prove." NRS 104.3103.
"Teller's check." NRS 104.3104.
"Unauthorized signature." NRS 104.3403.

4. In addition , article 1 contains general definitions and principles of construction and interpretation applicable throughout this article.
Sec. 40. NRS 104.5101 is hereby amended to read as follows:
104.5101This article [shall be known and] may be cited as Uniform Commercial Code-Letters of Credit.
Sec. 41. NRS 104.5102 is hereby amended to read as follows:
104.51021. This article applies [:
(a) To a credit issued by a bank if the credit requires a documentary draft or a documentary demand for payment; and
(b) To a credit issued by a person other than a bank if the credit requires that the draft or demand for payment be accompanied by a document of title; and
(c) To a credit issued by a bank or other person if the credit is not within paragraphs (a) or (b) but conspicuously states that it is a letter of credit or is conspicuously so entitled.
2. Unless the engagement meets the requirements of subsection 1, this article does not apply to engagements to make advances or to honor drafts or demands for payment, to authorities to pay or purchase, to guarantees or to general agreements.
3. This article deals with some but not all of the rules and concepts of letters of credit as such rules or concepts have developed prior to this act or may hereafter develop. The fact that this article states a rule] to letters of credit and to certain rights and obligations arising out of transactions involving letters of credit.
2. The statement of a rule in this article does not by itself require, imply or negate application of the same or a [converse] different rule to a situation not provided for , or to a person not specified [by] , in this article.
3. Except as otherwise provided in this subsection, subsections 1 and 4 of this section, paragraphs (i) and (j) of subsection 1 of NRS 104.5103, subsection 4 of NRS 104.5106 and subsection 4 of section 4 of this act, and except to the extent prohibited in subsection 3 of NRS 104.1102 and subsection 4 of section 7 of this act, the effect of this article may be varied by agreement or by a provision stated or incorporated by reference in an undertaking. A term in an agreement or undertaking generally excusing liability or generally limiting remedies for failure to perform obligations is not sufficient to vary obligations prescribed by this article.
4. Rights and obligations of an issuer to a beneficiary or a nominated person under a letter of credit are independent of the existence, performance or nonperformance of a contract or arrangement out of which the letter of credit arises or which underlies it, including contracts or arrangements between the issuer and the applicant and between the applicant and the beneficiary.
Sec. 42. NRS 104.5103 is hereby amended to read as follows:
104.51031. In this article [unless the context otherwise requires:
(a) "Credit" or "letter of credit" means an engagement by a bank or other person made at the request of a customer and of a kind within the scope of this article (NRS 104.5102) that the issuer will honor drafts or other demands for payment upon compliance with the conditions specified in the credit. A credit may be either revocable or irrevocable. The engagement may be either an agreement to honor or a statement that the bank or other person is authorized to honor.
(b) A "documentary draft" or a "documentary demand for payment" is one honor of which is conditioned upon the presentation of a document or documents. "Document" means any paper including document of title, security, invoice, certificate, notice of default and the like.
(c) An "issuer" is a bank or other person issuing a credit.
(d) A "beneficiary" of a credit is a person who is entitled under its terms to draw or demand payment.
(e) An "advising bank" is a bank which gives notification of the issuance of a credit by another bank.
(f) A "confirming bank" is a bank which engages either that it will itself honor a credit already issued by another bank or that such a credit will be honored by the issuer or a third bank.
(g) A "customer" is a buyer or other person who causes an issuer to issue a credit. The term also includes a bank which procures issuance or confirmation on behalf of that bank's customer.
2. Other definitions applying to this article and the sections in which they appear are:

"Notation of credit." NRS 104.5108.
"Presenter." Subsection 3 of NRS 104.5112.

3.] :
(a) "Adviser" means a person who, at the request of the issuer, a confirmer or another adviser, notifies or requests another adviser to notify the beneficiary that a letter of credit has been issued, confirmed or amended.
(b) "Applicant" means a person at whose request or for whose account a letter of credit is issued. The term includes a person who requests an issuer to issue a letter of credit on behalf of another person if the person making the request undertakes an obligation to reimburse the issuer.
(c) "Beneficiary" means a person who, under the terms of a letter of credit, is entitled to have its complying presentation honored. The term includes a person to whom drawing rights have been transferred under a transferable letter of credit.
(d) "Confirmer" means a nominated person who undertakes, at the request or with the consent of the issuer, to honor a presentation under a letter of credit issued by another person.
(e) "Dishonor" of a letter of credit means failure to honor or to take an interim action in a timely manner, such as acceptance of a draft, that may be required by the letter of credit.
(f) "Document" means a draft or other demand, document of title, investment security, certificate, invoice or other record, statement or representation of fact, law, right or opinion which is presented in a written or other medium permitted by a letter of credit or, unless prohibited by the letter of credit, by the standard practice referred to in subsection 5 of NRS 104.5109, and which is capable of being examined for compliance with the terms and conditions of the letter of credit. A document may not be oral.
(g) "Good faith" means honesty in fact in the conduct or transaction concerned.
(h) "Honor" of a letter of credit means performance of the issuer's undertaking in the letter of credit to pay or deliver an item of value. Unless the letter of credit otherwise provides, "honor" occurs:
(1) Upon payment;
(2) If the letter of credit provides for acceptance, upon acceptance of a draft and, at maturity, its payment; or
(3) If the letter of credit provides for incurring a deferred obligation, upon incurring the obligation and, at maturity, its performance.
(i) "Issuer" means a bank or other person that issues a letter of credit. The term does not include a natural person who makes an engagement for personal, family or household purposes.
(j) "Letter of credit" means a definite undertaking that satisfies the requirements of NRS 104.5104 by an issuer to a beneficiary at the request or for the account of an applicant or, in the case of a financial institution, to itself or for its own account, to honor a documentary presentation by payment or delivery of an item of value.
(k) "Nominated person" means a person whom the issuer designates or authorizes to pay, accept, negotiate or otherwise give value under a letter of credit and undertakes by agreement or custom and practice to reimburse.
(l) "Presentation" means delivery of a document to an issuer or nominated person for honor or giving of value under a letter of credit.
(m) "Presenter" means a person making a presentation as or on behalf of a beneficiary or nominated person.
(n) "Record" means information which is inscribed on a tangible medium, or which is stored in an electronic or other medium and is retrievable in perceivable form.
(o) "Successor of a beneficiary" means a person who succeeds to substantially all of the rights of a beneficiary by operation of law, including a corporation with or into which the beneficiary has been merged or consolidated, an administrator, executor, personal representative, trustee in bankruptcy, debtor in possession, liquidator and receiver.
2. Definitions in other articles applying to this article and the sections in which they appear are:

"Accept" or "acceptance." NRS 104.3409.
["Contract for sale." NRS 104.2106.
"Draft." NRS 104.3104.
"Holder in due course." NRS 104.3302.
"Midnight deadline." NRS 104.4104.
"Security." NRS 104.8102.

4. In addition, article] "Value." NRS 104.3303 and 104.4211.
3. Article 1 contains general definitions and principles of construction and interpretation applicable throughout this article.
Sec. 43. NRS 104.5104 is hereby amended to read as follows:
104.5104[1. Except as otherwise required in paragraph (c) of subsection 1 of NRS 104.5102 on scope, no particular form of phrasing is required for a credit. A credit must be in writing and signed by the issuer and a confirmation must be in writing and signed by the confirming bank. A modification of the terms of a credit or confirmation must be signed by the issuer or confirming bank.
2. A telegram may be a sufficient signed writing if it identifies its sender by an authorized authentication. The authentication may be in code and the authorized naming of the issuer in an advice of credit is a sufficient signing.] A letter of credit, confirmation, advice, transfer, amendment or cancellation may be issued in any form that is a record and is authenticated by a signature or in accordance with the agreement of the parties or the standard practice referred to in subsection 5 of NRS 104.5109.
Sec. 44. NRS 104.5105 is hereby amended to read as follows:
104.5105[No consideration is necessary to establish a credit or to enlarge or otherwise modify its terms.] Consideration is not required to issue, amend, transfer or cancel a letter of credit, advice or confirmation.
Sec. 45. NRS 104.5106 is hereby amended to read as follows:
104.51061. [Unless otherwise agreed a credit is established:
(a) As regards the customer as soon as a letter of credit is sent to him or the letter of credit or an authorized written advice of its issuance is sent to the beneficiary; and
(b) As regards the beneficiary when he receives a letter of credit or an authorized written advice of its issuance.
2. Unless otherwise agreed once an irrevocable credit is established as regards the customer it can be modified or revoked only with the consent of the customer and once it is established as regards the beneficiary it can be modified or revoked only with his consent.
3. Unless otherwise agreed after a revocable credit is established it may be modified or revoked by the issuer without notice to or consent from the customer or beneficiary.
4. Notwithstanding any modification or revocation of a revocable credit any person authorized to honor or negotiate under the terms of the original credit is entitled to reimbursement for or honor of any draft or demand for payment duly honored or negotiated before receipt of notice of the modification or revocation and the issuer in turn is entitled to reimbursement from its customer.] A letter of credit is issued and becomes enforceable according to its terms against the issuer when the issuer sends or otherwise transmits it to the person requested to advise or to the beneficiary. A letter of credit is revocable only if it so provides.
2. After a letter of credit is issued, rights and obligations of a beneficiary, applicant, confirmer and issuer are not affected by an amendment or cancellation to which he has not consented except to the extent the letter of credit provides that it is revocable or that the issuer may amend or cancel the letter of credit without that consent.
3. If there is no stated expiration date or other provision that determines its duration, a letter of credit expires 1 year after its stated date of issuance or, if none is stated, after the date on which it is issued.
4. A letter of credit which states that it is perpetual expires 5 years after its stated date of issuance, or if none is stated, after the date on which it is issued.
Sec. 46. NRS 104.5107 is hereby amended to read as follows:
104.51071. [Unless otherwise specified an advising bank by advising a credit issued by another bank does not assume any obligation to honor drafts drawn or demands for payment made under the credit but it does assume obligation for the accuracy of its own statement.
2. A confirming bank by confirming a credit becomes directly obligated on the credit to the extent of its confirmation as though it were its issuer and acquires the rights of an issuer.
3. Even though an advising bank incorrectly advises the terms of a credit it has been authorized to advise the credit is established as against the issuer to the extent of its original terms.
4. Unless otherwise specified the customer bears as against the issuer all risks of transmission and reasonable translation or interpretation of any message relating to a credit.] A confirmer is directly obligated on a letter of credit and has the rights and obligations of an issuer to the extent of its confirmation. The confirmer also has rights against and obligations to the issuer as if the issuer were an applicant and the confirmer had issued the letter of credit at the request and for the account of the issuer.
2. A nominated person who is not a confirmer is not obligated to honor or otherwise give value for a presentation.
3. A person requested to advise may decline to act as an adviser. An adviser that is not a confirmer is not obligated to honor or give value for a presentation. An adviser undertakes to the issuer and to the beneficiary accurately to advise the terms of the letter of credit, confirmation, amendment or advice received by the adviser and undertakes to the beneficiary to check the apparent authenticity of the request to advise. Even if the advice is inaccurate, the letter of credit, confirmation or amendment is enforceable as issued.
4. A person who notifies a transferee beneficiary of the terms of a letter of credit, confirmation, amendment or advice has the rights and obligations of an adviser under subsection 3. The terms in the notice to the transferee beneficiary may differ from the terms in any notice to the transferor beneficiary to the extent permitted by the letter of credit, confirmation, amendment or advice received by the person who so notifies.
Sec. 47. NRS 104.5109 is hereby amended to read as follows:
104.51091. [An issuer's obligation to its customer includes good faith and observance of any general banking usage but unless otherwise agreed does not include liability or responsibility:
(a) For performance of the underlying contract for sale or other transaction between the customer and the beneficiary; or
(b) For any act or omission of any person other than itself or its own branch or for loss or destruction of a draft, demand or document in transit or in the possession of others; or
(c) Based on knowledge or lack of knowledge of any usage of any particular trade.
2. An issuer must examine documents with care so as to ascertain that on their face they appear to comply with the terms of the credit but unless otherwise agreed assumes no liability or responsibility for the genuineness, falsification or effect of any document which appears on such examination to be regular on its face.
3. A nonbank issuer is not bound by any banking usage of which it has no knowledge.] Except as otherwise provided in section 2 of this act, an issuer shall honor a presentation that, as determined by the standard practice referred to in subsection 5, appears on its face strictly to comply with the terms and conditions of the letter of credit. Except as otherwise provided in section 3 of this act and unless otherwise agreed with the applicant, an issuer shall dishonor a presentation that does not appear so to comply.
2. An issuer has a reasonable time after presentation, but not beyond the end of the 7th business day of the issuer after the day of its receipt of documents:
(a) To honor a letter of credit;
(b) If the letter of credit provides for honor to be completed more than 7 business days after presentation, to accept a draft or incur a deferred obligation; or
(c) To give notice to the presenter of discrepancies in the presentation.
3. Except as otherwise provided in subsection 4, an issuer is precluded from asserting as a basis for dishonor any discrepancy if notice is not given in a timely manner or any discrepancy not stated in the notice if notice is given in a timely manner.
4. Failure to give the notice specified in subsection 2 or to mention fraud, forgery or expiration in the notice does not preclude the issuer from asserting as a basis for dishonor, fraud or forgery as described in subsection 1 of section 2 of this act or expiration of the letter of credit before presentation.
5. An issuer shall observe standard practice of financial institutions that regularly issue letters of credit. Any determination of the issuer's observance of the standard practice is a matter of interpretation for the court. The court shall offer the parties a reasonable opportunity to present evidence of the standard practice.
6. An issuer is not responsible for:
(a) The performance or nonperformance of the underlying contract, arrangement or transaction;
(b) An act or omission of others; or
(c) Observance or knowledge of the usage of a particular trade other than the standard practice referred to in subsection 5.
7. If an undertaking constituting a letter of credit under paragraph (j) of subsection 1 of NRS 104.5103 contains nondocumentary conditions, an issuer shall disregard the nondocumentary conditions and treat them as if they were not stated.
8. An issuer that has dishonored a presentation shall return the documents or hold them at the disposal of, and send advice to the effect to, the presenter.
9. An issuer that has honored a presentation as permitted or required by this article:
(a) Is entitled to be reimbursed by the applicant in immediately available funds not later than the date of its payment of funds;
(b) Takes the documents free of claims of the beneficiary or presenter;
(c) Is precluded from asserting a right of recourse on a draft under NRS 104.3414 and 104.3415;
(d) Except as otherwise provided in NRS 104.5111 and section 7 of this act, is precluded from restitution of money paid or other value given by mistake to the extent the mistake concerns discrepancies in the documents or tender which are apparent on the face of the presentation; and
(e) Is discharged to the extent of its performance under the letter of credit unless the issuer honored a presentation in which a required signature of a beneficiary was forged.
Sec. 48. NRS 104.5111 is hereby amended to read as follows:
104.51111. [Unless otherwise agreed the beneficiary by transferring or presenting a documentary draft or demand for payment warrants to all interested parties that the necessary conditions of the credit have been complied with. This is in addition to any warranties arising under articles 3, 4, 7 and 8.
2. Unless otherwise agreed a negotiating, advising, confirming, collecting or issuing bank presenting or transferring a draft or demand for payment under a credit warrants only the matters warranted by a collecting bank under article 4 and any such bank transferring a document warrants only the matters warranted by an intermediary under articles 7 and 8.] If its presentation is honored, the beneficiary warrants:
(a) To the issuer, any other person to whom presentation is made, and the applicant that there is no fraud or forgery of the kind described in subsection 1 of section 2 of this act; and
(b) To the applicant that the drawing does not violate any agreement between the applicant and beneficiary or any other agreement intended by them to be augmented by the letter of credit.
2. The warranties in subsection 1 are in addition to warranties arising under articles 3, 4, 7 and 8 because of the presentation or transfer of documents covered by any of those articles.
Sec. 49. NRS 104.5115 is hereby amended to read as follows:
104.51151. [When] If an issuer wrongfully dishonors [a draft or demand for payment presented under a credit the person entitled to honor has with respect to any documents the rights of a person in the position of a seller (NRS 104.2707) and may recover from the issuer the face amount of the draft or demand together with incidental damages under NRS 104.2710 on seller's incidental damages and interest but less any amount realized by resale or other use of disposition of the subject matter of the transaction. In the event no resale or other utilization is made the documents, goods or other subject matter involved in the transaction must be turned over to the issuer on payment of judgment.
2. When an issuer wrongfully cancels or otherwise repudiates a credit before presentment of a draft or demand for payment drawn under it the beneficiary has the rights of a seller after anticipatory repudiation by the buyer under NRS 104.2610 if he learns of the repudiation in time reasonably to avoid procurement of the required documents. Otherwise the beneficiary has an immediate right of action for wrongful dishonor.] or repudiates its obligation to pay money under a letter of credit before presentation, the beneficiary, successor or nominated person presenting on its own behalf may recover from the issuer the amount that is the subject of the dishonor or repudiation. If the issuer's obligation under the letter of credit is not for the payment of money, the claimant may obtain specific performance or, at his election, recover an amount equal to the value of performance from the issuer. In either case, the claimant may also recover incidental but not consequential damages. The claimant is not obligated to take action to avoid damages that might be due from the issuer under this subsection. If, although not obligated to do so, the claimant avoids damages, the claimant's recovery from the issuer must be reduced by the amount of damages avoided. The issuer has the burden of proving the amount of damages avoided. In the case of repudiation the claimant need not present any document.
2. If an issuer wrongfully dishonors a draft or demand presented under a letter of credit or honors a draft or demand in breach of its obligation to the applicant, the applicant may recover damages resulting from the breach, including incidental but not consequential damages, less any amount saved as a result of the breach.
3. If an adviser or nominated person other than a confirmer breaches an obligation under this article or an issuer breaches an obligation not covered in subsection 1 or 2, a person to whom the obligation is owed may recover damages resulting from the breach, including incidental but not consequential damages, less any amount saved as a result of the breach. To the extent of the confirmation, a confirmer has the liability of an issuer specified in this subsection and subsections 1 and 2.
4. An issuer, nominated person or adviser who is found liable under subsection 1, 2 or 3 shall pay interest on the amount owed thereunder from the date of wrongful dishonor or other appropriate date.
5. Reasonable attorney's fees and other expenses of litigation must be awarded to the prevailing party in an action in which a remedy is sought under this article.
6. Damages that would otherwise be payable by a party for breach of an obligation under this article may be liquidated by agreement or undertaking, but only in an amount or by a formula that is reasonable in light of the harm anticipated.
Sec. 50. NRS 104.5116 is hereby amended to read as follows:
104.51161. [The right to draw under a credit can be transferred or assigned only when the credit is expressly designated as transferable or assignable.
2. Even though the credit specifically states that it is nontransferable or nonassignable the beneficiary may before performance of the conditions of the credit assign his right to proceeds. Such an assignment is an assignment of an account under article 9 on secured transactions and is governed by that article except that:
(a) The assignment is ineffective until the letter of credit or advice of credit is delivered to the assignee which delivery constitutes perfection of the security interest under article 9; and
(b) The issuer may honor drafts or demands for payment drawn under the credit until it receives a notification of the assignment signed by the beneficiary which reasonably identifies the credit involved in the assignment and contains a request to pay the assignee; and
(c) After what reasonably appears to be such a notification has been received the issuer may without dishonor refuse to accept or pay even to a person otherwise entitled to honor until the letter of credit or advice of credit is exhibited to the issuer.
As used in paragraphs (b) and (c) of this subsection, the word "issuer" includes any confirming bank.
3. Except where the beneficiary has effectively assigned his right to draw or his right to proceeds, nothing in this section limits his right to transfer or negotiate drafts or demands drawn under the credit.] Except as otherwise provided in section 3 of this act, unless a letter of credit provides that it is transferable, the right of a beneficiary to draw or otherwise demand performance under the letter of credit may not be transferred.
2. Even if a letter of credit provides that it is transferable, the issuer may refuse to recognize or carry out a transfer if:
(a) The transfer would violate applicable law; or
(b) The transferor or transferee has failed to comply with any requirement stated in the letter of credit or any other requirement relating to transfer imposed by the issuer which is within the standard practice referred to in subsection 5 of NRS 104.5109 or is otherwise reasonable under the circumstances.
Sec. 51. NRS 104.8101 is hereby amended to read as follows:
104.8101This article [shall be known and] may be cited as Uniform Commercial Code-Investment Securities.
Sec. 52. NRS 104.8102 is hereby amended to read as follows:
104.81021. In this article [unless the context otherwise requires:
(a) A "certificated security" is a share, participation or other interest in property of or an enterprise of the issuer or an obligation of the issuer which is:
(1) Represented by an instrument issued in bearer or registered form;
(2) Of a type commonly dealt in on securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment; and
(3) Either one of a class or series or by its terms divisible into a class or series of shares, participations, interests or obligations.
(b) An "uncertificated security" is a share, participation or other interest in property or an enterprise of the issuer or an obligation of the issuer which is:
(1) Not represented by an instrument and the transfer of which is registered upon books maintained for that purpose by or on behalf of the issuer;
(2) Of a type commonly dealt in on securities exchanges or markets; and
(3) Either one of a class or series or by its terms divisible into a class or series of shares, participations, interests or obligations.
(c) A "security" is either a certificated or an uncertificated security. If a security is certificated, the terms "security" and "certificated security" may mean either the intangible interest, the instrument representing that interest, or both, as the context requires. A writing that is a certificated security is governed by this article and not by Uniform Commercial Code-Negotiable Instruments, even though it also meets the requirements of that article. This article does not apply to money. If a certificated security has been retained by or surrendered to the issuer or its transfer agent for reasons other than registration of transfer, other temporary purpose, payment, exchange, or acquisition by the issuer, that security must be treated as an uncertificated security for purposes of this article.
(d) A certificated security is in "registered form" if:
(1) It specifies a person entitled to the security or the rights it represents; and
(2) Its transfer may be registered upon books maintained for that purpose by or on behalf of the issuer, or the security so states.
(e) A certificated security is in "bearer form" if it runs to the bearer according to its terms and not by reason of any endorsement.
2. A "subsequent purchaser" is a person who takes other than by original issue.
3. A "clearing corporation" is a corporation registered as a "clearing agency" under the federal securities laws or a corporation:
(a) At least 90 percent of whose capital stock is held by or for one or more organizations, none of which, other than a national securities exchange or association, holds in excess of 20 percent of the capital stock of the corporation, and each of which is:
(1) Subject to supervision or regulation pursuant to the provisions of federal or state banking laws or state insurance laws;
(2) A broker or dealer or investment company registered under the federal securities laws; or
(3) A national securities exchange or association registered under the federal securities laws; and
(b) Any remaining capital stock of which is held by individuals who have purchased it at or before the time of their taking office as directors of the corporation and who have purchased only so much of the capital stock as is necessary to permit them to qualify as directors.
4. A "custodian bank" is a bank or trust company that is supervised and examined by state or federal authority having supervision over banks and is acting as custodian for a clearing corporation.
5. Other definitions applying to this article or to specified parts thereof and the sections in which they appear are:

"Adverse claim." NRS 104.8302.
"Bona fide purchaser." NRS 104.8302.
"Broker." NRS 104.8303.
"Debtor." NRS 104.9105.
"Financial intermediary." NRS 104.8313.
"Guarantee of the signature." NRS 104.8402.
"Initial transaction statement." NRS 104.8408.
"Instruction." NRS 104.8308.
"Intermediary bank." NRS 104.4105.
"Issuer." NRS 104.8201.
"Overissue." NRS 104.8104.
"Secured party." NRS 104.9105.
"Security agreement." NRS 104.9105.

6.] :
(a) "Adverse claim" means a claim that a claimant has a property interest in a financial asset and that it is a violation of the rights of the claimant for another person to hold, transfer or deal with the financial asset.
(b) "Bearer form," as applied to a certificated security, means a form in which the security is payable to the bearer of the security certificate according to its terms but not by reason of an endorsement.
(c) "Broker" means a person defined as a broker or dealer under the federal securities laws, but without excluding a bank acting in that capacity.
(d) "Certificated security" means a security that is represented by a certificate.
(e) "Clearing corporation" means:
(1) A person that is registered as a "clearing agency" under the federal securities laws;
(2) A federal reserve bank; or
(3) Any other person that provides clearance or settlement with respect to financial assets that would require it to register as a clearing agency under the federal securities laws but for an exclusion or exemption from the requirement of registration, if its activities as a clearing corporation, including promulgation of rules, are subject to regulation by a federal or state governmental authority.
(f) "Communicate" means to:
(1) Send a signed writing; or
(2) Transmit information by any mechanism agreed upon by the persons transmitting and receiving the information.
(g) "Endorsement" means a signature that alone or accompanied by other words is made on a security certificate in registered form or on a separate document for the purpose of assigning, transferring or redeeming the security or granting a power to assign, transfer or redeem it.
(h) "Entitlement holder" means a person identified in the records of a securities intermediary as the person having a security entitlement against the securities intermediary. If a person acquires a security entitlement by virtue of paragraph (a) or (b) of subsection 2 of section 23 of this act, he is the entitlement holder.
(i) "Entitlement order" means a notification communicated to a securities intermediary directing transfer or redemption of a financial asset to which the entitlement holder has a security entitlement.
(j) "Financial asset," except as otherwise provided in section 8 of this act, means:
(1) A security;
(2) An obligation of a person or a share, participation or other interest in a person or in property or an enterprise of a person, which is, or is of a type, dealt in or traded on financial markets, or which is recognized in any area in which it is issued or dealt in as a medium for investment; or
(3) Any property that is held by a securities intermediary for another person in a securities account if the securities intermediary has expressly agreed with the other person that the property is to be treated as a financial asset under this article.
As context requires, the term means the interest itself or the means by which a person's claim to it is evidenced, including a certificated or uncertificated security, a security certificate or a security entitlement.
(k) "Good faith," for purposes of the obligation of good faith in the performance or enforcement of contracts or duties within this article, means honesty in fact and the observance of reasonable commercial standards of fair dealing.
(l) "Instruction" means a notification communicated to the issuer of an uncertificated security which directs that the transfer of the security be registered or that the security be redeemed.
(m) "Registered form," as applied to a certificated security, means a form in which:
(1) The security certificate specifies a person entitled to the security; and
(2) A transfer of the security may be registered upon books maintained for that purpose by or on behalf of the issuer, or the security certificate so states.
(n) "Securities intermediary" means:
(1) A clearing corporation; or
(2) A person, including a bank or broker, that in the ordinary course of its business maintains securities accounts for others and is acting in that capacity.
(o) "Security," except as otherwise provided in section 8 of this act, means an obligation of an issuer or a share, participation or other interest in an issuer or in property or an enterprise of an issuer:
(1) Which is represented by a security certificate in bearer or registered form, or the transfer of which may be registered upon books maintained for that purpose by or on behalf of the issuer;
(2) Which is one of a class or series or by its terms is divisible into a class or series of shares, participations, interests or obligations; and
(3) Which:
(I) Is, or is of a type, dealt in or traded on securities exchanges or securities markets; or
(II) Is a medium for investment and by its terms expressly provides that it is a security governed by this article.
(p) "Security certificate" means a certificate representing a security.
(q) "Security entitlement" means the rights and property interest of an entitlement holder with respect to a financial asset specified in part 5 of this article.
(r) "Uncertificated security" means a security that is not represented by a certificate.
2. Other definitions applying to this article and the sections in which they appear are:

"Appropriate person." Section 11 of this act.
"Control." Section 10 of this act.
"Delivery." Section 16 of this act.
"Investment company security." Section 8 of this act.
"Issuer." NRS 104.8201.
"Overissue." NRS 104.8104.
"Protected purchaser." Section 18 of this act.
"Securities account." Section 23 of this act.

3. In addition , article 1 contains general definitions and principles of construction and interpretation applicable throughout this article.
4. The characterization of a person, business or transaction for purposes of this article does not determine the characterization of the person, business or transaction for purposes of any other law, regulation or rule.
Sec. 53. NRS 104.8103 is hereby amended to read as follows:
104.8103A lien [upon a security] in favor of an issuer [thereof] upon a certificated security is valid against a purchaser only if [:
1. The security is certificated and] the right of the issuer to the lien is noted conspicuously [thereon; or
2. The security is uncertificated and a notation of the right of the issuer to the lien is contained in the initial transaction statement sent to the purchaser or, if his interest is transferred to him other than by registration of transfer, pledge or release, the initial transaction statement sent to the registered owner or the registered pledgee.] on the security certificate.
Sec. 54. NRS 104.8104 is hereby amended to read as follows:
104.81041. [The provisions of this article which validate a security or compel its issue or reissue do not apply to the extent that validation, issue or reissue would result in overissue, but:
(a) If an identical security which does not constitute an overissue is reasonably available for purchase, the person entitled to issue or validation may compel the issuer to purchase the security for him and either to deliver a certificated security or to register the transfer of an uncertificated security to him against surrender of any certificated security he holds; or
(b) If a security is not so available for purchase, the person entitled to issue or validation may recover from the issuer the price he or the last purchaser for value paid for it with interest from the date of his demand.
2. "Overissue"] As used in this section, "overissue" means the issue of securities in excess of the amount the issuer has corporate power to issue [.] , but an overissue does not occur if appropriate action has cured the overissue.
2. Except as otherwise provided in subsections 3 and 4, the provisions of this article which validate a security or compel its issue or reissue do not apply to the extent that validation, issue or reissue would result in overissue.
3. If an identical security not constituting an overissue is reasonably available for purchase, a person entitled to issue or validation may compel the issuer to purchase the security and deliver it if certificated or register its transfer if uncertificated, against surrender of any security certificate he holds.
4. If a security is not reasonably available for purchase, a person entitled to issue or validation may recover from the issuer the price he or the last purchaser for value paid for it with interest from the date of his demand.
Sec. 55. NRS 104.8105 is hereby amended to read as follows:
104.8105[1. Certificated securities governed by this article are negotiable instruments.
2. Statements (NRS 104.8408), notices, or the like, sent by the issuer of uncertificated securities and instructions (NRS 104.8308) are neither negotiable instruments nor certificated securities.
3. In any action on a security:
(a)] The following rules apply in an action on a certificated security against an issuer:
1. Unless specifically denied in the pleadings, each signature on a [certificated] security [,] certificate or in a necessary endorsement [, on an initial transaction statement, or on an instruction,] is admitted . [;
(b)] 2. If the effectiveness of a signature is put in issue, the burden of establishing [it] effectiveness is on the party claiming under the signature, but the signature is presumed to be genuine or authorized . [;
(c)] 3. If signatures on a [certificated] security certificate are admitted or established, production of the [security] certificate entitles a holder to recover on it unless the defendant establishes a defense or a defect going to the validity of the security . [;
(d) If signatures on an initial transaction statement are admitted or established, the facts stated in the statement are presumed to be true as of the time of its issuance; and
(e) After]
4. If it is shown that a defense or defect exists, the plaintiff has the burden of establishing that he or some person under whom he claims is a person against whom the defense or defect [is ineffective (NRS 104.8202).] cannot be asserted.
Sec. 56. NRS 104.8106 is hereby amended to read as follows:
104.81061. The [law (including the conflict of laws rules) of the jurisdiction of organization of the issuer governs the validity of a security, the effectiveness of registration by the issuer, and the rights and duties of the issuer with respect to:
1. Registration of transfer of a certificated security;
2. Registration of transfer, pledge or release of an uncertificated security; and
3. Sending of statements of uncertificated securities.] local law of the issuer's jurisdiction, as specified in subsection 4, governs:
(a) The validity of a security;
(b) The rights and duties of the issuer with respect to registration of transfer;
(c) The effectiveness of registration of transfer by the issuer;
(d) Whether the issuer owes any duties to an adverse claimant to a security; and
(e) Whether an adverse claim can be asserted against a person to whom transfer of a certificated or uncertificated security is registered or a person who obtains control of an uncertificated security.
2. The local law of the securities intermediary's jurisdiction, as specified in subsection 5, governs:
(a) Acquisition of a security entitlement from the securities intermediary;
(b) The rights and duties of the securities intermediary and entitlement holder arising out of a security entitlement;
(c) Whether the securities intermediary owes any duties to an adverse claimant to a security entitlement; and
(d) Whether an adverse claim can be asserted against a person who acquires a security entitlement from the securities intermediary or a person who purchases a security entitlement or interest therein from an entitlement holder.
3. The local law of the jurisdiction in which a security certificate is located at the time of delivery governs whether an adverse claim can be asserted against a person to whom the security certificate is delivered.
4. "Issuer's jurisdiction" means the jurisdiction under which the issuer of the security is organized or, if permitted by the law of that jurisdiction, the law of another jurisdiction specified by the issuer. An issuer organized under the law of this state may specify the law of another jurisdiction as the law governing the matters specified in paragraphs (b) to (e), inclusive, of subsection 1.
5. The following rules determine a "securities intermediary's jurisdiction" for purposes of this section:
(a) If an agreement between the securities intermediary and its entitlement holder specifies that it is governed by the law of a particular jurisdiction, that jurisdiction is the securities intermediary's jurisdiction.
(b) If an agreement between the securities intermediary and its entitlement holder does not specify the governing law as provided in paragraph (a), but expressly specifies that the securities account is maintained at an office in a particular jurisdiction, that jurisdiction is the securities intermediary's jurisdiction.
(c) If an agreement between the securities intermediary and its entitlement holder does not specify a jurisdiction as provided in paragraph (a) or (b), the securities intermediary's jurisdiction is the jurisdiction in which is located the office identified in an account statement as the office serving the entitlement holder's account.
(d) If an agreement between the securities intermediary and its entitlement holder does not specify a jurisdiction as provided in paragraph (a) or (b) and an account statement does not identify an office serving the entitlement holder's account as provided in paragraph (c), the securities intermediary's jurisdiction is the jurisdiction in which its chief executive office is located.
6. A securities intermediary's jurisdiction is not determined by the physical location of certificates representing financial assets, or by the jurisdiction in which is organized the issuer of the financial asset with respect to which an entitlement holder has a security entitlement or by the location of facilities for data processing or other record keeping concerning the account.
Sec. 57. NRS 104.8201 is hereby amended to read as follows:
104.82011. With respect to [obligations] an obligation on or [defenses] a defense to a security, an "issuer" includes a person who:
(a) Places or authorizes the placing of his name on a [certificated security (otherwise] security certificate, other than as authenticating trustee, registrar, transfer agent or the like , [)] to evidence [that it represents] a share, participation or other interest in his property or in an enterprise , or to evidence his duty to perform an obligation represented by the [certificated security;] certificate;
(b) Creates [shares, participations or other interests] a share, participation or other interest in his property or in an enterprise , or undertakes [obligations, which shares, participations, interests or obligations are uncertificated securities;] an obligation, that is an uncertificated security;
(c) Directly or indirectly creates fractional [interests] interest in his rights or property, [which fractional interests are] if the fractional interest is represented by [certificated securities;] a security certificate; or
(d) Becomes responsible for , or in place of , any other person described as an issuer in this section.
2. With respect to [obligations] an obligation on or [defenses] defense to a security, a guarantor is an issuer to the extent of his guaranty, whether or not his obligation is noted on a [certificated security or on statements of uncertificated securities sent pursuant to NRS 104.8408.] security certificate.
3. With respect to registration of transfer, [pledge or release (part 4 of this article),] "issuer" means a person on whose behalf transfer books are maintained.
Sec. 58. NRS 104.8202 is hereby amended to read as follows:
104.82021. Even against a purchaser for value and without notice, the terms of a certificated security include [:
(a) If the security is certificated, those stated on the security;
(b) If the security is uncertificated, those contained in the initial transaction statement sent to such purchaser or, if his interest is transferred to him other than by registration of transfer, pledge or release, the initial transaction statement sent to the registered owner or registered pledgee; and
(c) Those] the terms stated on the certificate and the terms made part of the security by reference [,] on the [certificated security or in the initial transaction statement,] certificate to another instrument, indenture, or document or to a constitution, statute, ordinance, rule, regulation, order or the like, to the extent [that] the terms referred to do not conflict with [the] terms stated on the [certificated security or contained in the statement.] certificate. A reference under this [paragraph] subsection does not of itself charge a purchaser for value with notice of a defect going to the validity of the security, even [though the certificated security or statement] if the certificate expressly states that a person accepting it admits notice. The terms of an uncertificated security include those stated in any instrument, indenture or document, or in a constitution, statute, ordinance, rule, regulation, order or the like, pursuant to which the security was issued.
2. [A certificated security in the hands of a purchaser for value or an uncertificated security as to which an initial transaction statement has been sent to a purchaser for value, other than a security] The following rules apply if an issuer asserts that a security is not valid:
(a) A security other than one issued by a government or governmental [agency or unit,] subdivision, agency or instrumentality, even though issued with a defect going to its validity, is valid [with respect to the purchaser if he is] in the hands of a purchaser for value and without notice of the particular defect unless the defect involves a violation of [constitutional provisions, in which] a constitutional provision. In that case the security is valid [with respect to a subsequent] in the hands of a purchaser for value and without notice of the defect [. This subsection] other than one who takes by original issue.
(b) Paragraph (a) applies to an issuer that is a government or governmental [agency or unit] subdivision, agency or instrumentality only if [either] there has been substantial compliance with the legal requirements governing the issue or the issuer has received a substantial consideration for the issue as a whole or for the particular security and a stated purpose of the issue is one for which the issuer has power to borrow money or issue the security.
3. Except as otherwise provided in [the case of certain unauthorized signatures (] NRS 104.8205 , [),] lack of genuineness of a certificated security [or an initial transaction statement] is a complete defense even against a purchaser for value and without notice.
4. All other defenses of the issuer of a [certificated or uncertificated] security, including nondelivery and conditional delivery of a certificated security, are ineffective against a purchaser for value who has taken the certificated security without notice of the particular defense.
5. [Nothing in this section shall be construed to] This section does not affect the right of a party to [a] cancel a contract for a security "when, as and if issued" or [a] "when distributed" [contract to cancel the contract] in the event of a material change in the character of the security that is the subject of the contract or in the plan or arrangement pursuant to which the security is to be issued or distributed.
6. If a security is held by a securities intermediary against whom an entitlement holder has a security entitlement with respect to the security, the issuer may not assert any defense that it could not assert if the entitlement holder held the security directly.
Sec. 59. NRS 104.8203 is hereby amended to read as follows:
104.8203[1.] After an act or event , other than a call that has been revoked, creating a right to immediate performance of the principal obligation represented by a certificated security or [that sets] setting a date on or after which the security is to be presented or surrendered for redemption or exchange, a purchaser is charged with notice of any defect in its issue or defense of the issuer [:
(a) If] if the act or event [is one requiring] :
1. Requires the payment of money, the delivery of a certificated [securities,] security, the registration of transfer of an uncertificated [securities,] security, or any of [these] them on presentation or surrender of the [certificated security, the funds or securities are] security certificate, the money or security is available on the date set for payment or exchange , and he takes the security more than 1 year after that date; [and
(b) If the act or event is] or
2. Is not covered by [paragraph (a)] subsection 1 and he takes the security more than 2 years after the date set for surrender or presentation or the date on which performance became due.
[2. A call that has been revoked is not within subsection 1.]
Sec. 60. NRS 104.8204 is hereby amended to read as follows:
104.8204A restriction on transfer of a security imposed by the issuer, even if otherwise lawful, is ineffective against any person without actual knowledge of [it] the restriction unless:
1. The security is certificated and the restriction is noted conspicuously [thereon;] on the security certificate; or
2. The security is uncertificated and [a notation of the restriction is contained in the initial transaction statement sent to the person or, if his interest is transferred to him other than by registration of transfer, pledge or release, the initial transaction statement sent to the registered owner or the registered pledgee.] the registered owner has been notified of the restriction.
Sec. 61. NRS 104.8205 is hereby amended to read as follows:
104.8205An unauthorized signature placed on a [certificated security prior to] security certificate before or in the course of issue [or placed on an initial transaction statement] is ineffective, but the signature is effective in favor of a purchaser for value of the certificated security [or a purchaser for value of an uncertificated security to whom the initial transaction statement has been sent,] if the purchaser is without notice of the lack of authority and the signing has been done by:
1. An authenticating trustee, registrar, transfer agent or other person entrusted by the issuer with the signing of the security [, of similar securities, or of initial transaction statements] certificate or of similar security certificates, or the immediate preparation for signing of any of them; or
2. An employee of the issuer , or of any of the [foregoing] persons listed in subsection 1, entrusted with responsible handling of the security [or initial transaction statement.] certificate.
Sec. 62. NRS 104.8206 is hereby amended to read as follows:
104.82061. If a certificated security contains the signatures necessary to its issue or transfer but is incomplete in any other respect:
(a) Any person may complete it by filling in the blanks as authorized; and
(b) Even though the blanks are incorrectly filled in, the security as completed is enforceable by a purchaser who took it for value and without notice of the incorrectness.
2. A complete certificated security that has been improperly altered, even though fraudulently, remains enforceable, but only according to its original terms.
[3. If an initial transaction statement contains the signatures necessary to its validity but is incomplete in any other respect:
(a) Any person may complete it by filling in the blanks as authorized; and
(b) Even though the blanks are incorrectly filled in, the statement as completed is effective in favor of the person to whom it is sent if he purchased the security referred to therein for value and without notice of the incorrectness.
4. A complete initial transaction statement that has been improperly altered, even though fraudulently, is effective in favor of a purchaser to whom it has been sent but only according to its original terms.]
Sec. 63. NRS 104.8207 is hereby amended to read as follows:
104.82071. [Prior to due] Before the presentment for registration of transfer of a certificated security in registered form [,] or of an instruction requesting transfer of an uncertificated security, the issuer or indenture trustee may treat the registered owner as the person exclusively entitled to vote, [to] receive notifications and otherwise [to] exercise all the rights and powers of an owner.
2. [Subject to the provisions of subsections 3, 4 and 6, the issuer or indenture trustee may treat the registered owner of an uncertificated security as the person exclusively entitled to vote, to receive notifications and otherwise to exercise all the rights and powers of an owner.
3. The registered owner of an uncertificated security that is subject to a registered pledge is not entitled to registration of transfer prior to the due presentment to the issuer of a release instruction. The exercise of conversion rights with respect to a convertible uncertificated security is a transfer within the meaning of this section.
4. Upon due presentment of a transfer instruction from the registered pledgee of an uncertificated security, the issuer shall:
(a) Register the transfer of the security to the new owner free of pledge, if the instruction specifies a new owner (who may be the registered pledgee) and does not specify a pledgee;
(b) Register the transfer of the security to the new owner subject to the interest of the existing pledgee, if the instruction specifies a new owner and the existing pledgee; or
(c) Register the release of the security from the existing pledge and register the pledge of the security to the other pledgee, if the instruction specifies the existing owner and another pledgee.
5. Continuity of perfection of a security interest is not broken by registration of transfer under paragraph (b) of subsection 4 or by registration of release and pledge under paragraph (c) of subsection 4, if the security interest is assigned.
6. If an uncertificated security is subject to a registered pledge:
(a) Any uncertificated securities issued in exchange for or distributed with respect to the pledged security shall be registered subject to the pledge;
(b) Any certificated securities issued in exchange for or distributed with respect to the pledged security shall be delivered to the registered pledgee; and
(c) Any money paid in exchange for or in redemption of part or all of the security shall be paid to the registered pledgee.
7. Nothing in this article shall be construed to] This article does not affect the liability of the registered owner of a security for calls, assessments or the like.
Sec. 64. NRS 104.8208 is hereby amended to read as follows:
104.82081. A person [placing his signature upon a certificated security or an initial transaction statement] signing a security certificate as authenticating trustee, registrar, transfer agent or the like warrants to a purchaser for value of the certificated security , [or a purchaser for value of an uncertificated security to whom the initial transaction statement has been sent,] if the purchaser is without notice of [the] a particular defect, that:
(a) The [certificated security or initial transaction statement] certificate is genuine;
(b) His own participation in the issue or registration of the transfer, pledge or release of the security is within his capacity and within the scope of the authority received by him from the issuer; and
(c) He has reasonable grounds to believe that the certificated security is in the form and within the amount the issuer is authorized to issue.
2. Unless otherwise agreed, a person [by so placing his signature] signing under subsection 1 does not assume responsibility for the validity of the security in other respects.
Sec. 65. NRS 104.8304 is hereby amended to read as follows:
104.83041. A [purchaser (including a broker for the seller or buyer but excluding an intermediary bank) of a certificated security is charged with notice of adverse claims if:
(a) The security, whether in bearer or registered form, has been endorsed "for collection" or "for surrender" or for some other purpose not involving transfer; or
(b) The security is in bearer form and has on it an unambiguous statement that it is the property of a person other than the transferor. The mere writing of a name on a security is not such a statement.
2. A purchaser (including a broker for the seller or buyer but excluding an intermediary bank) to whom the transfer, pledge or release of an uncertificated security is registered is charged with notice of adverse claims as to which the issuer has a duty under subsection 4 of NRS 104.8403 at the time of registration and which are noted in the initial transaction statement sent to the purchaser or, if his interest is transferred to him other than by registration of transfer, pledge or release, the initial transaction statement sent to the registered owner or the registered pledgee.
3. The fact that the purchaser (including a broker for the seller or buyer) of a certificated or uncertificated security has notice that the security is held for a third person or is registered in the name of or endorsed by a fiduciary does not create a duty of inquiry into the rightfulness of the transfer or constitute constructive notice of adverse claims. However, if the purchaser (excluding an intermediary bank) has knowledge that the proceeds are being used or that the transaction is for the individual benefit of the fiduciary or otherwise in breach of duty, the purchaser is charged with notice of adverse claims.] person has notice of an adverse claim if he:
(a) Knows of the adverse claim;
(b) Is aware of facts sufficient to indicate that there is a significant probability that the adverse claim exists and deliberately avoids information that would establish the existence of the adverse claim; or
(c) Has a duty, imposed by statute or regulation, to investigate whether an adverse claim exists, and the investigation so required would establish the existence of the adverse claim.
2. Having knowledge that a financial asset or interest therein is or has been transferred by a representative imposes no duty of inquiry into the rightfulness of a transaction and is not notice of an adverse claim. However, a person who knows that a representative has transferred a financial asset or interest therein in a transaction that is, or whose proceeds are being used, for the individual benefit of the representative or otherwise in breach of duty has notice of an adverse claim.
3. An act or event that creates a right to immediate performance of the principal obligation represented by a security certificate or sets a date on or after which the certificate is to be presented or surrendered for redemption or exchange does not itself constitute notice of an adverse claim except in the case of a transfer more than:
(a) One year after a date set for presentment or surrender for redemption or exchange; or
(b) Six months after a date set for payment of money against presentation or surrender of the certificate, if money was available for payment on that date.
4. A purchaser of a certificated security has notice of an adverse claim if the security certificate:
(a) Whether in bearer or registered form, has been endorsed "for collection" or "for surrender" or for some other purpose not involving transfer; or
(b) Is in bearer form and has on it an unambiguous statement that it is the property of a person other than the transferor, but the mere writing of a name on the certificate is not such a statement.
5. Filing of a financing statement under article 9 is not notice of an adverse claim to a financial asset.
Sec. 66. NRS 104.8316 is hereby amended to read as follows:
104.8316Unless otherwise agreed, the transferor of a [certificated security or the transferor, pledgor or pledgee of an uncertificated] security on due demand [must supply his] shall supply the purchaser with [any] proof of [his] authority to transfer [, pledge or release] or with any other requisite necessary to obtain registration of the transfer [, pledge or release] of the security , [;] but if the transfer [, pledge or release] is not for value, a transferor [, pledgor or pledgee] need not [do so] comply unless the purchaser [furnishes] pays the necessary expenses. [Failure] If the transferor fails within a reasonable time to comply with [a demand made gives] the demand, the purchaser [the right to] may reject or rescind the transfer . [, pledge or release.]
Sec. 67. NRS 104.8317 is hereby amended to read as follows:
104.83171. [Subject to the exceptions in subsections 3 and 4, no attachment or levy upon a certificated security or any share or other interest represented thereby which is outstanding is valid until the security is actually seized by the officer making the attachment or levy, but a certificated security which has been surrendered to the issuer may be reached by a creditor by legal process at the issuer's chief executive office in the United States.
2. An uncertificated security registered in the name of the debtor may not be reached by a creditor except by legal process at the issuer's chief executive office in the United States.
3. The interest of a debtor in a certificated security that is in the possession of a secured party not a financial intermediary or in an uncertificated security registered in the name of a secured party not a financial intermediary (or in the name of a nominee of the secured party) may be reached by a creditor by legal process upon the secured party.
4. The interest of a debtor in a certificated security that is in the possession of or registered in the name of a financial intermediary or in an uncertificated security registered in the name of a financial intermediary may be reached by a creditor by legal process upon the financial intermediary on whose books the interests of the debtor appears.
5. Unless otherwise provided by law, a creditor's lien upon the interest of a debtor in a security obtained pursuant to subsection 3 or 4 is not a restraint on the transfer of the security, free of the lien, to a third party for new value; but in the event of a transfer, the lien applies to the proceeds of the transfer in the hands of the secured party or financial intermediary, subject to any claims having priority.
6. A creditor whose debtor is the owner of a security is entitled to aid from courts of appropriate jurisdiction, by injunction or otherwise, in reaching the security or in satisfying the claim by means allowed at law or in equity in regard to property that cannot readily be reached by ordinary legal process.
7. An officer executing an attachment or levy in this state upon an uncertificated security may provide notice of the attachment or levy to:
(a) The issuer; and
(b) The debtor or other person in whose name the security is registered,
in lieu of actually seizing evidence of ownership of the security. Notice must be given in person or by certified mail, return receipt requested, to the last known address of the person served.] Except as otherwise provided in subsection 4, the interest of a debtor in a certificated security may be reached by a creditor only by actual seizure of the security certificate by the officer making the attachment or levy. However, a certificated security for which the certificate has been surrendered to the issuer may be reached by a creditor by legal process upon the issuer.
2. Except as otherwise provided in subsection 4, the interest of a debtor in an uncertificated security may be reached by a creditor only by legal process upon the issuer at its chief executive office in the United States.
3. Except as otherwise provided in subsection 4, the interest of a debtor in a security entitlement may be reached by a creditor only by legal process upon the securities intermediary with whom the debtor's securities account is maintained.
4. The interest of a debtor in a certificated security for which the certificate is in the possession of a secured party, or in an uncertificated security registered in the name of a secured party, or a security entitlement maintained in the name of a secured party, may be reached by a creditor by legal process upon the secured party.
5. A creditor whose debtor is the owner of a certificated security, uncertificated security or security entitlement is entitled to aid from a court of competent jurisdiction, by injunction or otherwise, in reaching the certificated security, uncertificated security or security entitlement or in satisfying the claim by means allowed at law or in equity in regard to property that cannot readily be reached by other legal process.
Sec. 68. NRS 104.8318 is hereby amended to read as follows:
104.8318[An agent or bailee who in good faith (including observance of reasonable commercial standards if he is in the business of buying, selling or otherwise dealing with securities) has received certificated securities and sold, pledged or delivered them or has sold or caused the transfer or pledge of uncertificated securities over which he had control according to the instructions of his principal, is not liable for conversion or for participation in breach of fiduciary duty although the principal had no right so to deal with the securities.] A securities intermediary that has transferred a financial asset pursuant to an effective entitlement order, or a broker or other agent or bailee that has dealt with a financial asset at the direction of his customer or principal, is not liable to a person having an adverse claim to the financial asset, unless he:
1. Took the action after he had been served with an injunction, restraining order or other legal process enjoining him from doing so, issued by a court of competent jurisdiction, and had a reasonable opportunity to act on the injunction, restraining order or other legal process;
2. Acted in collusion with the wrongdoer in violating the rights of the adverse claimant; or
3. In the case of a security certificate that had been stolen, acted with notice of the adverse claim.
Sec. 69. NRS 104.8319 is hereby amended to read as follows:
104.8319A contract [for the sale of securities is not enforceable by way of action or defense unless:
1. There is some writing signed by the party against whom enforcement is sought or by his authorized agent or broker sufficient to indicate that a contract has been made for sale of a stated quantity of described securities at a defined or stated price;
2. Delivery of a certificated security or transfer instruction has been accepted, or transfer of an uncertificated security has been registered and the transferee has failed to send written objection to the issuer within 10 days after receipt of the initial transaction statement confirming the registration, or payment has been made, but the contract is enforceable under this provision only to the extent of the delivery, registration or payment;
3. Within a reasonable time a writing in confirmation of the sale or purchase and sufficient against the sender under subsection 1 has been received by the party against whom enforcement is sought and he has failed to send written objection to its contents within 10 days after its receipt; or
4. The party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract was made for the sale of a stated quantity of described securities at a defined or stated price.] or modification of a contract for the sale or purchase of a security is enforceable whether or not there is a writing signed or record authenticated by a party against whom enforcement is sought, even if the contract or modification is not capable of performance within 1 year after its making.
Sec. 70. NRS 104.8401 is hereby amended to read as follows:
104.84011. If a certificated security in registered form is presented to [the] an issuer with a request to register transfer or an instruction is presented to [the] an issuer with a request to register transfer [, pledge or release,] of an uncertificated security, the issuer shall register the transfer, pledge or release as requested if:
(a) [The security is endorsed or the instruction was originated by the appropriate person or persons (NRS 104.8308);
(b) Reasonable assurance is given that those endorsements or instructions are genuine and effective (NRS 104.8402);
(c) The issuer has no duty as to adverse claims or has discharged the duty (NRS 104.8403);] Under the terms of the security, the person seeking registration of transfer is eligible to have the security registered in his name;
(b) The endorsement or instruction is made by the appropriate person or by an agent who has actual authority to act on behalf of the appropriate person;
(c) Reasonable assurance is given that the endorsement or instruction is genuine and authorized;
(d) Any applicable law relating to the collection of taxes has been complied with; [and]
(e) The transfer does not violate any restriction on transfer imposed by the issuer in accordance with NRS 104.8204;
(f) A demand that the issuer not register transfer has not become effective under NRS 104.8403, or the issuer has complied with subsection 2 of that section but no legal process or indemnity bond is obtained as provided in subsection 4 of that section; and
(g) The transfer [, pledge or release] is in fact rightful or is to a [bona fide] protected purchaser.
2. If an issuer is under a duty to register a transfer [, pledge or release] of a security, [the issuer is also] he is liable to the person presenting a certificated security or an instruction for registration or his principal for loss resulting from [any] unreasonable delay in registration or [from] failure or refusal to register the transfer . [, pledge or release.]
Sec. 71. NRS 104.8402 is hereby amended to read as follows:
104.84021. [The] An issuer may require the following assurance that each necessary endorsement [of a certificated security] or each instruction [(NRS 104.8308)] is genuine and [effective:] authorized:
(a) In all cases, a [guarantee] guaranty of the signature [(subsection 1 or 2 of NRS 104.8312)] of the person [endorsing a certificated security] making an endorsement or originating an instruction including, in the case of an instruction, [a warranty of the taxpayer identification number or, in the absence thereof, other] reasonable assurance of identity;
(b) If the endorsement is made or the instruction is originated by an agent, appropriate assurance of actual authority to sign;
(c) If the endorsement is made or the instruction is originated by a fiduciary [,] pursuant to paragraph (d) or (e) of subsection 1 of section 11 of this act, appropriate evidence of appointment or incumbency;
(d) If there is more than one fiduciary, reasonable assurance that all who are required to sign have done so; and
(e) If the endorsement is made or the instruction is originated by a person not covered by [any of the foregoing,] another provision of this subsection, assurance appropriate to the case corresponding as nearly as may be to the [foregoing.
2. A "guarantee] provisions of this subsection.
2. An issuer may elect to require reasonable assurance beyond that specified in this section.
3. As used in this section:
(a) "Guaranty of the signature" [in subsection 1] means a [guarantee] guaranty signed by or on behalf of a person reasonably believed by the issuer to be responsible. [The] An issuer may adopt standards with respect to responsibility if they are not manifestly unreasonable.
[3.] (b) "Appropriate evidence of appointment or incumbency" [in subsection 1 means:
(a)] means:
(1) In the case of a fiduciary appointed or qualified by a court, a certificate issued by or under the direction or supervision of [that] the court or an officer thereof and dated within 60 days before the date of presentation for transfer [, pledge or release; or
(b)] ; or
(2) In any other case, a copy of a document showing the appointment or a certificate issued by or on behalf of a person reasonably believed by the issuer to be responsible or, in the absence of that document or certificate, other evidence reasonably deemed by the issuer to be appropriate. [The issuer may adopt standards with respect to the evidence if they are not manifestly unreasonable. The issuer is not charged with notice of the contents of any document obtained pursuant to this paragraph (b) except to the extent that the contents relate directly to the appointment or incumbency.
4. The issuer may elect to require reasonable assurance beyond that specified in this section, but if it does so and, for a purpose other than that specified in paragraph (b) of subsection 3, both requires and obtains a copy of a will, trust, indenture, articles of copartnership, bylaws or other controlling instrument, it is charged with notice of all matters contained therein affecting the transfer, pledge or release.]
Sec. 72. NRS 104.8403 is hereby amended to read as follows:
104.84031. [An issuer to whom a certificated security is presented for registration shall inquire into adverse claims if:
(a) A written notification of an adverse claim is received at a time and in a manner affording the issuer a reasonable opportunity to act on it prior to the issuance of a new, reissued or reregistered certificated security, and the notification identifies the claimant, the registered owner and the issue of which the security is a part and provides an address for communications directed to the claimant; or
(b) The issuer is charged with notice of an adverse claim from a controlling instrument it has elected to require under subsection 4 of NRS 104.8402.
2. The issuer may discharge any duty of inquiry by any reasonable means, including notifying an adverse claimant by registered or certified mail at the address furnished by him or, if there be no such address, at his residence or regular place of business that the certificated security has been presented for registration of transfer by a named person, and that the transfer will be registered unless within 30 days from the date of mailing the notification, either:
(a) An appropriate restraining order, injunction or other process issues from a court of competent jurisdiction; or
(b) There is filed with the issuer an indemnity bond, sufficient in the issuer's judgment to protect the issuer and any transfer agent, registrar or other agent of the issuer involved, from any loss it or they may suffer by complying with the adverse claim.
3. Unless an issuer is charged with notice of an adverse claim from a controlling instrument which it has elected to require under subsection 4 of NRS 104.8402 or receives notification of an adverse claim under subsection 1, if a certificated security presented for registration is endorsed by the appropriate person or persons the issuer is under no duty to inquire into adverse claims. In particular:
(a) An issuer registering a certificated security in the name of a person who is a fiduciary or who is described as a fiduciary is not bound to inquire into the existence, extent or correct description of the fiduciary relationship, and thereafter the issuer may assume without inquiry that the newly registered owner continues to be the fiduciary until the issuer receives written notice that the fiduciary is no longer acting as such with respect to the particular security;
(b) An issuer registering transfer on an endorsement by a fiduciary is not bound to inquire whether the transfer is made in compliance with a controlling instrument or with the law of the state having jurisdiction of the fiduciary relationship, including any law requiring the fiduciary to obtain court approval of the transfer; and
(c) The issuer is not charged with notice of the contents of any court record or file or other recorded or unrecorded document even though the document is in its possession and even though the transfer is made on the endorsement of a fiduciary to the fiduciary himself or to his nominee.
4. An issuer is under no duty as to adverse claims with respect to an uncertificated security except:
(a) Claims embodied in a restraining order, injunction or other legal process served upon the issuer if the process was served at a time and in a manner affording the issuer a reasonable opportunity to act on it in accordance with the requirements of subsection 5;
(b) Claims of which the issuer has received a written notification from the registered owner or the registered pledgee if the notification was received at a time and in a manner affording the issuer a reasonable opportunity to act on it in accordance with the requirements of subsection 5;
(c) Claims (including restrictions on transfer not imposed by the issuer) to which the registration of transfer to the present registered owner was subject and were so noted in the initial transaction statement sent to him; and
(d) Claims as to which an issuer is charged with notice from a controlling instrument it has elected to require under subsection 4 of NRS 104.8402.
5. If the issuer of an uncertificated security is under a duty as to an adverse claim, he discharges that duty by:
(a) Including a notation of the claim in any statements sent with respect to the security under subsections 3, 6 and 7 of NRS 104.8408; and
(b) Refusing to register the transfer or pledge of the security unless the nature of the claim does not preclude transfer or pledge subject thereto.
6. If the transfer or pledge of the security is registered subject to an adverse claim, a notation of the claim must be included in the initial transaction statement and all subsequent statements sent to the transferee and pledgee under NRS 104.8408.
7. Notwithstanding subsections 4 and 5, if an uncertificated security was subject to a registered pledge at the time the issuer first came under a duty as to a particular adverse claim, the issuer has no duty as to that claim if transfer of the security is requested by the registered pledgee or an appropriate person acting for the registered pledgee unless:
(a) The claim was embodied in legal process which expressly provides otherwise;
(b) The claim was asserted in a written notification from the registered pledgee;
(c) The claim was one as to which the issuer was charged with notice from a controlling instrument it required under subsection 4 of NRS 104.8402 in connection with the pledgee's request for transfer; or
(d) The transfer requested is to the registered owner.] A person who is an appropriate person to make an endorsement or originate an instruction may demand that the issuer not register transfer of a security by communicating to the issuer a notification that identifies the registered owner and the issue of which the security is a part and provides an address for communications directed to the person making the demand. The demand is effective only if it is received by the issuer at a time and in a manner affording the issuer reasonable opportunity to act on it.
2. If a certificated security in registered form is presented to an issuer with a request to register transfer or an instruction is presented to an issuer with a request to register transfer of an uncertificated security after a demand that the issuer not register transfer has become effective, the issuer shall promptly communicate to the person who initiated the demand at the address provided in the demand and the person who presented the security for registration of transfer or initiated the instruction requesting registration of transfer a notification stating that:
(a) The certificated security has been presented for registration of transfer or the instruction for registration of transfer of the uncertificated security has been received;
(b) A demand that the issuer not register transfer had previously been received; and
(c) The issuer will withhold registration of transfer for a period of time stated in the notification in order to provide the person who initiated the demand an opportunity to obtain legal process or an indemnity bond.
3. The period described in paragraph (c) of subsection 2 may not exceed 30 days after the date of communication of the notification. A shorter period may be specified by the issuer if it is not manifestly unreasonable.
4. An issuer is not liable to a person who initiated a demand that the issuer not register transfer for any loss he suffers as a result of registration of transfer pursuant to an effective endorsement or instruction if he does not, within the time stated in the issuer's communication:
(a) Obtain an appropriate restraining order, injunction or other process from a court of competent jurisdiction enjoining the issuer from registering transfer; or
(b) File with the issuer an indemnity bond, sufficient in the issuer's judgment to protect the issuer and any transfer agent, registrar or other agent of the issuer involved from any loss it or they may suffer by refusing to register transfer.
5. This section does not relieve an issuer from liability for registering transfer pursuant to an endorsement or instruction that was not effective.
Sec. 73. NRS 104.8404 is hereby amended to read as follows:
104.84041. Except as otherwise provided in NRS 104.8406, an issuer is liable for wrongful registration of transfer if the issuer has registered a transfer of a security to a person not entitled to it, and the transfer was registered:
(a) Pursuant to an ineffective endorsement or instruction;
(b) After a demand that the issuer not register transfer became effective under subsection 1 of NRS 104.8403 and the issuer did not comply with subsection 2 of NRS 104.8403;
(c) After the issuer had been served with an injunction, restraining order or other legal process enjoining it from registering the transfer, issued by a court of competent jurisdiction, and the issuer had a reasonable opportunity to act on the injunction, restraining order or other legal process; or
(d) By an issuer acting in collusion with the wrongdoer.
2. An issuer that is liable for wrongful registration of transfer under subsection 1 on demand shall provide the person entitled to the security with a like certificated or uncertificated security and any payments or distributions that the person did not receive as a result of the wrongful registration. If an overissue would result, the issuer's liability to provide the person with a like security is governed by NRS 104.8104.
3. Except as otherwise provided in [any] subsection 1 or in a law relating to the collection of taxes, [the] an issuer is not liable to [the owner, pledgee] an owner or any other person suffering loss as a result of the registration of [a transfer, pledge or release] transfer of a security if [:
(a) There were on or with a certificated security the necessary endorsements or the issuer had received an instruction originated by an appropriate person (NRS 104.8308); and
(b) The issuer had no duty as to adverse claims or has discharged the duty (NRS 104.8403).
2. If an issuer has registered a transfer of a certificated security to a person not entitled to it, the issuer on demand shall deliver a like security to the true owner unless:
(a) The registration was pursuant to subsection 1;
(b) The owner is precluded from asserting any claim for registering the transfer under subsection 1 of NRS 104.8405; or
(c) The delivery would result in overissue, in which case the issuer's liability is governed by NRS 104.8104.
3. If an issuer has improperly registered a transfer, pledge or release of an uncertificated security, the issuer on demand from the injured party shall restore the records as to the injured party to the condition that would have obtained if the improper registration had not been made unless:
(a) The registration was pursuant to subsection 1; or
(b) The registration would result in overissue, in which case the issuer's liability is governed by NRS 104.8104.] registration was made pursuant to an effective endorsement or instruction.
Sec. 74. NRS 104.8405 is hereby amended to read as follows:
104.84051. If [a certificated security has been lost, apparently destroyed or wrongfully taken and the owner fails to notify the issuer of that fact within a reasonable time after he has notice of it and the issuer registers a transfer of the security before receiving notification, the owner is precluded from asserting against the issuer any claim for registering the transfer under NRS 104.8404 or any claim to a new security under this section.
2. If the] an owner of a certificated security , whether in registered or bearer form, claims that the [security] certificate has been lost, destroyed or wrongfully taken, the issuer shall issue a new [certificated security or, at the option of the issuer, an equivalent uncertificated security in place of the original security] certificate if the owner:
(a) So requests before the issuer has notice that the security has been acquired by a [bona fide] protected purchaser;
(b) Files with the issuer a sufficient indemnity bond; and
(c) Satisfies [any] other reasonable requirements imposed by the issuer.
[3.] 2. If, after the issue of a new [certificated or uncertificated security, a bona fide] security certificate, a protected purchaser of the original [certificated security] certificate presents it for registration of transfer, the issuer shall register the transfer unless [registration would result in overissue, in which event] an overissue would result. In that case, the issuer's liability is governed by NRS 104.8104. In addition to any rights on the indemnity bond, the issuer may recover the new [certificated security] certificate from the person to whom it was issued or any person taking under him except a [bona fide purchaser or may cancel the uncertificated security unless a bona fide purchaser or any person taking under a bona fide purchaser is then the registered owner or registered pledgee thereof.] protected purchaser.
Sec. 75. NRS 104.8406 is hereby amended to read as follows:
104.8406[1. If a person acts] A person acting as authenticating trustee, transfer agent, registrar or other agent for an issuer in the registration of [transfers of its certificated securities or in the registration of transfers, pledges and releases of its uncertificated] a transfer of its securities, in the issue of new security certificates or uncertificated securities or in the cancellation of surrendered [securities:
(a) He is under a duty to the issuer to exercise good faith and due diligence in performing his functions; and
(b) With regard to the particular functions he performs, he] security certificates has the same obligation to the holder or owner of a certificated [security or to the owner or pledgee of an] or uncertificated security [and has the same rights and privileges] with regard to the particular functions performed as the issuer has in regard to those functions.
[2. Notice to an authenticating trustee, transfer agent, registrar or other agent is notice to the issuer with respect to the functions performed by the agent.]
Sec. 76. NRS 104.9103 is hereby amended to read as follows:
104.91031. Documents, instruments , letters of credit and ordinary goods.
(a) This subsection applies to documents , [and] instruments , rights to proceeds of letters of credit, and [to] goods other than those covered by a certificate of title described in subsection 2, mobile goods described in subsection 3 and minerals described in subsection 5.
(b) Except as otherwise provided in this subsection, perfection and the effect of perfection or nonperfection of a security interest in collateral are governed by the law of the jurisdiction where the collateral is when the last event occurs on which is based the assertion that the security interest is perfected or unperfected.
(c) If the parties to a transaction creating a purchase money security interest in goods in one jurisdiction understand at the time that the security interest attaches that the goods will be kept in another jurisdiction, then the law of the other jurisdiction governs the perfection and the effect of perfection or nonperfection of the security interest from the time it attaches until 30 days after the debtor receives possession of the goods and thereafter if the goods are taken to the other jurisdiction before the end of the 30-day period.
(d) When collateral is brought into and kept in this state while subject to a security interest perfected under the law of the jurisdiction from which the collateral was removed, the security interest remains perfected, but if action is required by part 3 of this article to perfect the security interest:
(1) If the action is not taken before the expiration of the period of perfection in the other jurisdiction or the end of 4 months after the collateral is brought into this state, whichever period first expires, the security interest becomes unperfected at the end of that period and is thereafter deemed to have been unperfected as against a person who became a purchaser after removal;
(2) If the action is taken before the expiration of the period specified in subparagraph (1), the security interest continues perfected thereafter;
(3) For the purpose of priority over a buyer of consumer goods (subsection 2 of NRS 104.9307), the period of the effectiveness of a filing in the jurisdiction from which the collateral is removed is governed by the rules with respect to perfection in subparagraphs (1) and (2).
2. Certificate of title.
(a) This subsection applies to goods covered by a certificate of title issued under a statute of this state or of another jurisdiction under the law of which indication of a security interest on the certificate is required as a condition of perfection.
(b) Except as otherwise provided in this subsection, perfection and the effect of perfection or nonperfection of the security interest are governed by the law (including the conflict of laws rules) of the jurisdiction issuing the certificate until 4 months after the goods are removed from that jurisdiction and thereafter until the goods are registered in another jurisdiction, but in any event not beyond surrender of the certificate. After the expiration of that period, the goods are not covered by the certificate of title within the meaning of this section.
(c) Except with respect to the rights of a buyer described in the next paragraph, a security interest, perfected in another jurisdiction otherwise than by notation on a certificate of title, in goods brought into this state and thereafter covered by a certificate of title issued by this state is subject to the rules stated in paragraph (d) of subsection 1.
(d) If goods are brought into this state while a security interest therein is perfected in any manner under the law of the jurisdiction from which the goods are removed and a certificate of title is issued by this state and the certificate does not show that the goods are subject to the security interest or that they may be subject to security interests not shown on the certificate, the security interest is subordinate to the rights of a buyer of the goods who is not in the business of selling goods of that kind to the extent that he gives value and receives delivery of the goods after issuance of the certificate and without knowledge of the security interest.
3. Accounts, general intangibles and mobile goods.
(a) This subsection applies to accounts (other than an account described in subsection 5 on minerals) and general intangibles and to goods which are mobile and which are of a type normally used in more than one jurisdiction, such as motor vehicles, trailers, rolling stock, airplanes, shipping containers, road-building and construction machinery and commercial harvesting machinery and the like, if the goods are equipment or are inventory leased or held for lease by the debtor to others, and are not covered by a certificate of title described in subsection 2.
(b) The law (including the conflict of laws rules) of the jurisdiction in which the debtor is located governs the perfection and the effect of perfection or nonperfection of the security interest.
(c) If, however, the debtor is located in a jurisdiction which is not a part of the United States, and which does not provide for perfection of the security interest by filing or recording in that jurisdiction, the law of the jurisdiction in the United States in which the debtor has its major executive office in the United States governs the perfection and the effect of perfection or nonperfection of the security interest through filing. In the alternative, if the debtor is located in a jurisdiction which is not a part of the United States or Canada and the collateral is accounts or general intangibles for money due or to become due, the security interest may be perfected by notification to the account debtor. As used in this paragraph, "United States" includes its territories and possessions and the Commonwealth of Puerto Rico.
(d) A debtor shall be deemed located at his place of business if he has one, at his chief executive office if he has more than one place of business, otherwise at his residence. If, however, the debtor is a foreign air carrier under the Federal Aviation Act of 1958, as amended, it shall be deemed located at the designated office of the agent upon whom service of process may be made on behalf of the foreign air carrier.
(e) A security interest perfected under the law of the jurisdiction of the location of the debtor is perfected until the expiration of 4 months after a change of the debtor's location to another jurisdiction or until perfection would have ceased by the law of the first jurisdiction, whichever period first expires. Unless perfected in the new jurisdiction before the end of that period, it becomes unperfected thereafter and is deemed to have been unperfected as against a person who became a purchaser after the change.
4. Chattel paper. The rules stated for goods in subsection 1 apply to a possessory security interest in chattel paper. The rules stated for accounts in subsection 3 apply to a nonpossessory security interest in chattel paper, but the security interest may not be perfected by notification to the account debtor.
5. Minerals. Perfection and the effect of perfection or nonperfection of a security interest which is created by a debtor who has an interest in minerals or the like (including oil and gas) before extraction and which attaches thereto as extracted or which attaches to an account resulting from the sale thereof at the wellhead or minehead are governed by the law (including the conflict of laws rules) of the jurisdiction wherein the wellhead or minehead is located.
6. Investment property.
(a) This subsection applies to investment property.
(b) Except as otherwise provided in paragraph (f), during the time that a security certificate is located in a jurisdiction, perfection of a security interest, the effect of perfection or nonperfection, and the priority of a security interest in the certificated security represented thereby are governed by the local law of that jurisdiction.
(c) Except as otherwise provided in paragraph (f), perfection of a security interest, the effect of perfection or nonperfection, and the priority of a security interest in an uncertificated security are governed by the local law of the issuer's jurisdiction as specified in subsection 4 of NRS 104.8106.
(d) Except as otherwise provided in paragraph (f), perfection of a security interest, the effect of perfection or nonperfection, and the priority of a security interest in a security entitlement or securities account are governed by the local law of the securities intermediary's jurisdiction as specified in subsection 5 of NRS 104.8106.
(e) Except as otherwise provided in paragraph (f), perfection of a security interest, the effect of perfection or nonperfection, and the priority of a security interest in a commodity contract or commodity account are governed by the local law of the commodity intermediary's jurisdiction. The following rules determine a commodity intermediary's jurisdiction for purposes of this paragraph:
(1) If an agreement between the commodity intermediary and commodity customer specifies that it is governed by the law of a particular jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction.
(2) If an agreement between the commodity intermediary and commodity customer does not specify the governing law as provided in subparagraph (1), but expressly specifies that the commodity account is maintained at an office in a particular jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction.
(3) If an agreement between the commodity intermediary and commodity customer does not specify a jurisdiction as provided in subparagraph (1) or (2), the commodity intermediary's jurisdiction is the jurisdiction in which is located the office identified in an account statement as the office serving the commodity customer's account.
(4) If an agreement between the commodity intermediary and commodity customer does not specify a jurisdiction as provided in subparagraph (1) or (2) and an account statement does not identify an office serving the commodity customer's account as provided in subparagraph (3), the commodity intermediary's jurisdiction is the jurisdiction in which is located the chief executive office of the commodity intermediary.
(f) Perfection of a security interest by filing, automatic perfection of a security interest in investment property granted by a broker or securities intermediary, and automatic perfection of a security interest in a commodity contract or commodity account granted by a commodity intermediary are governed by the local law of the jurisdiction in which the debtor is located.
Sec. 77. NRS 104.9104 is hereby amended to read as follows:
104.9104This article does not apply:
1. To a security interest subject to any statute of the United States such as the Ship Mortgage Act, 1920, to the extent that such statute governs the rights of parties to and third parties affected by transactions in particular types of property;
2. To a landlord's lien;
3. To a lien given by statute or other rule of law for services or materials except as otherwise provided in NRS 104.9310, on priority of such liens;
4. To a transfer of a claim for wages, salary or other compensation of an employee;
5. To a transfer by a government or governmental subdivision or agency;
6. To a sale of accounts or chattel paper as part of a sale of the business out of which they arose, or an assignment of accounts or chattel paper which is for the purpose of collection only, or a transfer of a right to payment under a contract to an assignee who is also to do the performance under the contract or a transfer of a single account to an assignee in whole or partial satisfaction of a preexisting indebtedness;
7. To a transfer of an interest or claim in or under any policy of insurance, except as otherwise provided with respect to proceeds (NRS 104.9306) and priorities in proceeds (NRS 104.9312);
8. To a right represented by a judgment (other than a judgment taken on a right to payment which was collateral);
9. To any right of setoff;
10. Except to the extent that provision is made for fixtures in NRS 104.9313, to the creation or transfer of an interest in or lien on real estate, including a lease or rents thereunder;
11. To a transfer in whole or in part of any claim arising out of tort;
12. To a transfer of an interest in any deposit account (subsection 1 of NRS 104.9105), except as otherwise provided with respect to proceeds (NRS 104.9306) and priorities in proceeds (NRS 104.9312); [or]
13. To perfection or notice of a security interest created by a security instrument as defined in NRS 105.010 [.] ; or
14. To a transfer of an interest in a letter of credit other than the right to proceeds of a written letter of credit.
Sec. 78. NRS 104.9105 is hereby amended to read as follows:
104.91051. [In] As used in this article , unless the context otherwise requires:
(a) "Account debtor" means the person who is obligated on an account, chattel paper or general intangible.
(b) "Chattel paper" means a writing or writings which evidence both a monetary obligation and a security interest in or a lease of specific goods , but a charter or other contract involving the use or hire of a vessel is not chattel paper. When a transaction is evidenced both by such a security agreement or a lease and by an instrument or a series of instruments, the group of writings taken together constitutes chattel paper.
(c) "Collateral" means the property subject to a security interest, and includes accounts and chattel paper which have been sold.
(d) "Debtor" means the person who owes payment or other performance of the obligation secured, whether or not he owns or has rights in the collateral, and includes the seller of accounts or chattel paper. Where the debtor and the owner of the collateral are not the same person, the term "debtor" means the owner of the collateral in any provision of the article dealing with the collateral, the obligor in any provision dealing with the obligation, and may include both where the context so requires.
(e) "Deposit account" means a demand, time, savings, passbook or like account maintained with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a certificate of deposit.
(f) "Document" means document of title as defined in the general definitions of article 1 (NRS 104.1201), and a receipt of the kind described in subsection 2 of NRS 104.7201.
(g) "Encumbrance" includes real estate mortgages and other liens on real estate and all other rights in real estate that are not ownership interests.
(h) "Goods" includes all things which are movable at the time the security interest attaches or which are fixtures (NRS 104.9313), but does not include money, documents, instruments, investment property, accounts, chattel paper, general intangibles or minerals or the like (including oil and gas) before extraction. "Goods" also include standing timber which is to be cut and removed under a conveyance or contract for sale, the unborn young of animals and growing crops.
(i) "Instrument" means a negotiable instrument (defined in NRS 104.3104) [, or a security (defined in NRS 104.8102)] or any other writing which evidences a right to the payment of money and is not itself a security agreement or lease and is of a type which is in ordinary course of business transferred by delivery with any necessary endorsement or assignment. The term does not include investment property.
(j) "Mortgage" means a consensual interest created by a real estate mortgage, a trust deed on real estate or the like.
(k) An advance is made "pursuant to commitment" if the secured party has bound himself to make it, whether or not a subsequent event of default or other event not within his control has relieved or may relieve him from his obligation.
(l) "Security agreement" means an agreement which creates or provides for a security interest.
(m) "Secured party" means a lender, seller or other person in whose favor there is a security interest, including a person to whom accounts or chattel paper have been sold. When the holders of obligations issued under an indenture of trust, equipment trust agreement or the like are represented by a trustee or other person, the representative is the secured party.
2. Other definitions applying to this article and the sections in which they appear are:

"Account." NRS 104.9106.
"Attach." NRS 104.9203.
"Commodity contract." Section 34 of this act.
"Commodity customer." Section 34 of this act.
"Commodity intermediary." Section 34 of this act.
"Construction mortgage." NRS 104.9313.
"Consumer goods." Subsection 1 of NRS 104.9109.
"Control." Section 34 of this act.
"Equipment." Subsection 2 of NRS 104.9109.
"Farm products." Subsection 3 of NRS 104.9109.
"Fixture." NRS 104.9313.
"Fixture filing." NRS 104.9313.
"General intangibles." NRS 104.9106.
"Inventory." Subsection 4 of NRS 104.9109.
"Investment property." Section 34 of this act.
"Lien creditor." Subsection 5 of NRS 104.9301.
"Proceeds." Subsection 1 of NRS 104.9306.
"Purchase money security interest." NRS 104.9107.
"United States." NRS 104.9103.

3. The following definitions in other articles apply to this article:

"Check." NRS 104.3104.
"Contract for sale." NRS 104.2106.
"Holder in due course." NRS 104.3302.
"Letter of credit." NRS 104.5103.
"Note." NRS 104.3104.
"Proceeds of a letter of credit." Section 4 of this act.
"Sale." NRS 104.2106.

4. In addition , article 1 contains general definitions and principles of construction and interpretation applicable throughout this article.
Sec. 79. NRS 104.9106 is hereby amended to read as follows:
104.91061. "Account" means any right to payment for goods sold or leased or for services rendered which is not evidenced by an instrument or chattel paper, whether or not it has been earned by performance.
2. "General intangibles" means any personal property (including things in action) other than goods, accounts, chattel paper, documents, instruments , investment property, rights to proceeds of letters of credit, and money.
3. All rights to payment earned or unearned under a charter or other contract involving the use or hire of a vessel and all rights incident to the charter or contract are accounts.
Sec. 80. NRS 104.9203 is hereby amended to read as follows:
104.92031. Subject to the provisions of NRS 104.4210 on the security interest of a collecting bank , sections 34 and 35 of this act on security interests in investment property, and NRS 104.9113 on a security interest arising under the article on sales, a security interest is not enforceable against the debtor or third parties with respect to the collateral and does not attach unless:
(a) The collateral is in the possession of the secured party pursuant to agreement, the collateral is investment property and the secured party has control pursuant to agreement, or the debtor has signed a security agreement which contains a description of the collateral and in addition, when the security interest covers crops growing or to be grown or timber to be cut, a description of the land concerned; [and]
(b) Value has been given; and
(c) The debtor has rights in the collateral.
2. A security interest attaches when it becomes enforceable against the debtor with respect to the collateral. Attachment occurs as soon as all of the events specified in subsection 1 have taken place unless explicit agreement postpones the time of attaching.
3. Unless otherwise agreed , a security agreement gives the secured party the rights to proceeds provided by NRS 104.9306.
4. A transaction, although subject to this article, is also subject to chapters 97, 646, 649, and 675 of NRS and to NRS 482.516, 482.5161 and 482.5163, and in the case of conflict between the provisions of this article and any such statute, the provisions of such statute control. Failure to comply with any applicable statute has only the effect which is specified therein.
Sec. 81. NRS 104.9301 is hereby amended to read as follows:
104.93011. Except as otherwise provided in subsection 2, an unperfected security interest is subordinate to the rights of:
(a) Persons entitled to priority under NRS 104.9312.
(b) A person who becomes a lien creditor before the security interest is perfected.
(c) In the case of goods, instruments, documents and chattel paper, a person who is not a secured party and who is a transferee in bulk or other buyer not in ordinary course of business, or is a buyer of farm products in ordinary course of business, to the extent that he gives value and receives delivery of the collateral without knowledge of the security interest and before it is perfected.
(d) In the case of accounts , [and] general intangibles [,] and investment property, a person who is not a secured party and who is a transferee to the extent that he gives value without knowledge of the security interest and before it is perfected.
2. If the secured party files with respect to a purchase money security interest before or within 20 days after the debtor receives possession of the collateral, he takes priority over the rights of a transferee in bulk or of a lien creditor which arise between the time the security interest attaches and the time of filing.
3. A "lien creditor" means a creditor who has acquired a lien on the property involved by attachment, levy or the like and includes an assignee for benefit of creditors from the time of assignment, and a trustee in bankruptcy from the date of filing of the petition or a receiver in equity from the time of appointment.
4. A person who becomes a lien creditor while a security interest is perfected takes subject to the security interest only to the extent that it secures advances made before he becomes a lien creditor or within 45 days thereafter or made without knowledge of the lien or pursuant to a commitment entered into without knowledge of the lien.
Sec. 82. NRS 104.9302 is hereby amended to read as follows:
104.93021. A financing statement must be filed to perfect all security interests except the following:
(a) A security interest in collateral in possession of the secured party under NRS 104.9305.
(b) A security interest temporarily perfected in instruments , certificated securities or documents without delivery under NRS 104.9304 or in proceeds for a 10-day period under NRS 104.9306.
(c) A security interest created by an assignment of a beneficial interest in a trust or a decedent's estate.
(d) A purchase money security interest in consumer goods; but filing is required for a motor vehicle required to be registered; and fixture filing is required for priority over conflicting interests in fixtures to the extent provided in NRS 104.9313.
(e) An assignment of accounts which does not alone or in conjunction with other assignments to the same assignee transfer a significant part of the outstanding accounts of the assignor.
(f) A security interest of a collecting bank (NRS 104.4210) or arising under the article on sales (see NRS 104.9113) or covered in subsection 3.
(g) An assignment for the benefit of all the creditors of the transferor, and subsequent transfers by the assignee thereunder.
(h) A security interest in investment property that is perfected without filing under section 34 or 35 of this act.
(i) An agreement for the financing of insurance premiums governed by NRS 686A.330 to 686A.520, inclusive.
2. If a secured party assigns a perfected security interest, no filing under this article is required in order to continue the perfected status of the security interest against creditors of and transferees from the original debtor.
3. The filing of a financing statement otherwise required by this article is not necessary or effective to perfect a security interest in property subject to:
(a) A statute or treaty of the United States which provides for a national or international registration or a national or international certificate of title or which specified a place of filing different from that specified in this article for filing of the security interest;
(b) The following statutes of this state: Chapter 105 of NRS, NRS 482.423 to 482.431, inclusive, 488.1793 to 488.1827, inclusive, and 489.501 to 489.581, inclusive; but during any period in which collateral is inventory held for sale by a person who is in the business of selling goods of that kind, the filing provisions of this article (part 4) apply to a security interest in that collateral created by him as debtor; or
(c) A certificate of title statute of another jurisdiction under the law of which indication of a security interest on the certificate is required as a condition of perfection (subsection 2 of NRS 104.9103).
4. Compliance with a statute or treaty described in subsection 3 is equivalent to the filing of a financing statement under this article, and a security interest in property subject to the statute or treaty can be perfected only by compliance therewith except as otherwise provided in NRS 104.9103 on multiple state transactions. Duration and renewal of perfection of a security interest perfected by compliance with the statute or treaty are governed by the provisions of the statute or treaty; in other respects the security interest is subject to this article.
Sec. 83. NRS 104.9303 is hereby amended to read as follows:
104.93031. A security interest is perfected when it has attached and when all of the applicable steps required for perfection have been taken. Such steps are specified in NRS 104.9302, 104.9304, 104.9305 and 104.9306 [.] and section 34 of this act. If such steps are taken before the security interest attaches, it is perfected at the time when it attaches.
2. If a security interest is originally perfected in any way permitted under this article and is subsequently perfected in some other way under this article, without an intermediate period when it was unperfected, the security interest shall be deemed to be perfected continuously for the purposes of this article.
Sec. 84. NRS 104.9304 is hereby amended to read as follows:
104.93041. A security interest in chattel paper or negotiable documents may be perfected by filing. A security interest in the right to proceeds of a letter of credit may be perfected only by the secured party's taking possession of the letter of credit. A security interest in money or instruments (other than instruments which constitute part of chattel paper) can be perfected only by the secured party's taking possession, except as otherwise provided in subsections 4 and 5 of this section and subsections 2 and 3 of NRS 104.9306 on proceeds.
2. During the period that goods are in the possession of the issuer of a negotiable document therefor, a security interest in the goods is perfected by perfecting a security interest in the document, and any security interest in the goods otherwise perfected during such period is subject thereto.
3. A security interest in goods in the possession of a bailee other than one who has issued a negotiable document therefor is perfected by issuance of a document in the name of the secured party or by the bailee's receipt of notification of the secured party's interest or by filing as to the goods.
4. A security interest in instruments , certificated securities or negotiable documents is perfected without filing or the taking of possession for a period of 21 days from the time it attaches to the extent that it arises for new value given under a written security agreement.
5. A security interest remains perfected for a period of 21 days without filing where a secured party having a perfected security interest in an instrument, a certificated security, a negotiable document or goods in possession of a bailee other than one who has issued a negotiable document therefor:
(a) Makes available to the debtor the goods or documents representing the goods for the purpose of ultimate sale or exchange or for the purpose of loading, unloading, storing, shipping, transhipping, manufacturing, processing or otherwise dealing with them in a manner preliminary to their sale or exchange, but priority between conflicting security interest in the goods is subject to subsection 3 of NRS 104.9312; or
(b) Delivers the instrument or certificated security to the debtor for the purpose of ultimate sale or exchange or of presentation, collection, renewal or registration of transfer.
6. After the 21-day period in subsections 4 and 5 perfection depends upon compliance with applicable provisions of this article.
Sec. 85. NRS 104.9305 is hereby amended to read as follows:
104.9305A security interest in [letters of credit and advices of credit (paragraph (a) of subsection 2 of NRS 104.5116),] goods, instruments, money, negotiable documents or chattel paper may be perfected by the secured party's taking possession of the collateral. A security interest in the right to proceeds of a letter of credit may be perfected by the secured party's taking possession of the letter of credit. If [such] collateral other than goods covered by a negotiable document is held by a bailee, the secured party is deemed to have possession from the time the bailee receives notification of the secured party's interest. A security interest is perfected by possession from the time possession is taken without relation back and continues only so long as possession is retained, unless otherwise specified in this article. The security interest may be otherwise perfected as provided in this article before or after the period of possession by the secured party.
Sec. 86. NRS 104.9306 is hereby amended to read as follows:
104.93061. "Proceeds" includes whatever is received upon the sale, exchange, collection or other disposition of collateral or proceeds. Insurance payable by reason of loss or damage to the collateral is proceeds, except to the extent that it is payable to a person other than a party to the security agreement. Any payments or distributions made with respect to investment property as collateral are proceeds. Money, checks, deposit accounts and the like are "cash proceeds." All other proceeds are "noncash proceeds."
2. Except where this article otherwise provides, a security interest continues in collateral notwithstanding sale, exchange or other disposition thereof unless the disposition was authorized by the secured party in the security agreement or otherwise, and also continues in any identifiable proceeds including collections received by the debtor.
3. The security interest in proceeds is a continuously perfected security interest if the interest in the original collateral was perfected but it ceases to be a perfected security interest and becomes unperfected 10 days after receipt of the proceeds by the debtor unless:
(a) A filed financing statement covers the original collateral and the proceeds are collateral in which a security interest may be perfected by filing in the office or offices where the financing statement has been filed and, if the proceeds are acquired with cash proceeds, the description of collateral in the financing statement indicates the types of property constituting the proceeds; [or]
(b) A filed financing statement covers the original collateral and the proceeds are identifiable cash proceeds; [or]
(c) The original collateral was investment property and the proceeds are identifiable cash proceeds; or
(d) The security interest in the proceeds is perfected before the expiration of the 10-day period.
Except as otherwise provided in this section, a security interest in proceeds can be perfected only by the methods or under the circumstances permitted in this article for original collateral of the same type.
4. In the event of insolvency proceedings instituted by or against a debtor, a secured party with a perfected security interest in proceeds has a perfected security interest only in the following proceeds:
(a) In identifiable noncash proceeds and in separate deposit accounts containing only proceeds;
(b) In identifiable cash proceeds in the form of money which is neither commingled with other money nor deposited in a deposit account prior to the insolvency proceedings;
(c) In identifiable cash proceeds in the form of checks and the like which are not deposited in a deposit account prior to the insolvency proceedings; and
(d) In all cash and deposit accounts of the debtor in which proceeds have been commingled with other funds, but the perfected security interest under this paragraph is:
(1) Subject to any right of setoff; and
(2) Limited to an amount not greater than the amount of any cash proceeds received by the debtor within 10 days before the institution of the insolvency proceedings less the sum of:
(I) The payments to the secured party on account of cash proceeds received by the debtor during such period; and
(II) The cash proceeds received by the debtor during such period to which the secured party is entitled under paragraphs (a) to (c), inclusive, of this subsection.
5. If a sale of goods results in an account or chattel paper which is transferred by the seller to a secured party, and if the goods are returned to or are repossessed by the seller or the secured party, the following rules determine priorities:
(a) If the goods were collateral at the time of sale for an indebtedness of the seller which is still unpaid, the original security interest attaches again to the goods and continues as a perfected security interest if it was perfected at the time when the goods were sold. If the security interest was originally perfected by a filing which is still effective, nothing further is required to continue the perfected status; in any other case, the secured party must take possession of the returned or repossessed goods or must file.
(b) An unpaid transferee of the chattel paper has a security interest in the goods against the transferor. Such security interest is prior to a security interest asserted under paragraph (a) to the extent that the transferee of the chattel paper was entitled to priority under NRS 104.9308.
(c) An unpaid transferee of the account has a security interest in the goods against the transferor. Such security interest is subordinate to a security interest asserted under paragraph (a).
(d) A security interest of an unpaid transferee asserted under paragraph (b) or (c) must be perfected for protection against creditors of the transferor and purchasers of the returned or repossessed goods.
Sec. 87. NRS 104.9309 is hereby amended to read as follows:
104.9309[Nothing in this article limits] This article does not limit the rights of a holder in due course of a negotiable instrument (NRS 104.3302) or a holder to whom a negotiable document of title has been duly negotiated (NRS 104.7501) or a [bona fide] protected purchaser of a security [(NRS 104.8301)] (section 18 of this act) and such holders or purchasers take priority over an earlier security interest even though perfected. Filing under this article does not constitute notice of the security interest to such holders or purchasers.
Sec. 88. NRS 104.9312 is hereby amended to read as follows:
104.93121. The rules of priority stated in other sections of this part and in the following sections [shall] govern when applicable: NRS 104.9208 with respect to the security interests of collecting banks in items being collected, accompanying documents and proceeds; NRS 104.9103 on security interests related to other jurisdictions; NRS 104.9114 on consignments [.] ; section 34 of this act on security interests in investment property.
2. [There is no subsection 2.]
3. A perfected purchase money security interest in inventory has priority over a conflicting security interest in the same inventory and also has priority in identifiable cash proceeds received on or before the delivery of the inventory to a buyer if:
(a) The purchase money security interest is perfected at the time the debtor receives possession of the inventory; [and]
(b) The purchase money secured party gives notification in writing to the holder of the conflicting security interest if the holder had filed a financing statement covering the same types of inventory:
(1) Before the date of the filing made by the purchase money secured party; or
(2) Before the beginning of the 21-day period where the purchase money security interest is temporarily perfected without filing or possession (subsection 5 of NRS 104.9304); [and]
(c) The holder of the conflicting security interest receives the notification within 5 years before the debtor receives possession of the inventory; and
(d) The notification states that the person giving the notice has or expects to acquire a purchase money security interest in inventory of the debtor, describing such inventory by item or type.
4. A purchase money security interest in collateral other than inventory has priority over a conflicting security interest in the same collateral or its proceeds if the purchase money security interest is perfected at the time the debtor receives possession of the collateral or within 20 days thereafter.
5. In all cases not governed by other rules stated in this section (including cases of purchase money security interests which do not qualify for the special priorities set forth in subsections 3 and 4 of this section), priority between conflicting security interests in the same collateral shall be determined according to the following rules:
(a) Conflicting security interests rank according to priority in time of filing or perfection. Priority dates from the time a filing is first made covering the collateral or the time the security interest is first perfected, whichever is earlier, provided that there is no period thereafter when there is neither filing nor perfection.
(b) So long as conflicting security interests are unperfected, the first to attach has priority.
6. For the purposes of subsection 5 a date of filing or perfection as to collateral is also a date of filing or perfection as to proceeds.
7. If future advances are made while a security interest is perfected by filing or the taking of possession, or under section 34 or 35 of this act on investment property, the security interest has the same priority for the purposes of subsection 5 of this section or subsection 5 of section 34 of this act with respect to the future advances as it does with respect to the first advance. If a commitment is made before or while the security interest is so perfected, the security interest has the same priority with respect to advances made pursuant thereto. In other cases a perfected security interest has priority from the date the advance is made.
Sec. 89. NRS 31.040 is hereby amended to read as follows:
31.040The writ must be directed to the sheriff of any county in which property of the defendant may be [, and except as otherwise provided in subsection 7 of NRS 104.8317,] and require him to attach and keep safely all the money or property of the defendant described in the order for attachment within his county not exempt from execution, or so much thereof as is sufficient to satisfy the amount demanded by the writ of attachment, whichever is less, unless the defendant gives him security by the undertaking of at least two sufficient sureties in an amount equal to the amount demanded by the writ or the value of the property levied upon, whichever is less, apart from costs, in lawful money of the United States, in which case the writ must require the sheriff to take such an undertaking.
Sec. 90. NRS 31.060 is hereby amended to read as follows:
31.060Subject to the requirements of NRS 31.045, the sheriff to whom the writ is directed and delivered shall execute it without delay, and if the undertaking mentioned in NRS 31.040 is not given, as follows:
1. Real property must be attached by leaving a copy of the writ with the occupant of the property or, if there is no occupant, by posting a copy in a conspicuous place on the property and filing a copy, together with a description of the property attached, with the recorder of the county.
2. [Except as otherwise provided in subsection 7 of NRS 104.8317, personal] Personal property must be attached:
(a) By taking it into immediate custody, and, if directed by the plaintiff, using the services of any company which operates a tow car, as defined in NRS 706.131, or common motor carrier, as defined in NRS 706.036, to transport it for storage in a warehouse or storage yard that is insured or bonded in an amount not less than the full value of the property; or
(b) By placing a keeper in charge of a going business where the property is located, with the plaintiff prepaying the expense of the keeper to the sheriff, during which period, the defendant, by order of the court or the consent of the plaintiff, may continue to operate in the ordinary course of business at his own expense if all sales are for cash and the full proceeds are paid to the keeper for the purpose of the attachment.
If the property is stored pursuant to paragraph (a), the property must be segregated from other property and marked by signs or other appropriate means indicating that it is in the custody of the sheriff.
3. Any mobile home, as defined in NRS 40.215, must be attached by:
(a) Posting a copy of the writ in a conspicuous place on the mobile home;
(b) Taking it into immediate custody, subject to the provisions of subsection 2; or
(c) Placing a keeper in charge of the mobile home for 2 days, with the plaintiff prepaying the expense of the keeper to the sheriff:
(1) During which period, the defendant may continue to occupy the mobile home; and
(2) After which period, the sheriff shall take the mobile home into his immediate custody, subject to the provisions of subsection 2, unless other disposition is made by the court or the parties to the action.
4. Debts and credits, due or to become due, and other personal property in the possession or under the control of persons other than the defendant must be attached by service of a writ of garnishment as provided in NRS 31.240 to 31.460, inclusive.
Sec. 91. NRS 162.230 is hereby amended to read as follows:
162.230[1. The rights and duties of a corporation and its transfer agents in registering a security in the name of a fiduciary or in making a transfer of a security pursuant to an assignment by a fiduciary are governed by the law of the jurisdiction under whose laws the corporation is organized.
2.] The provisions of NRS 162.150 to 162.250, inclusive, apply to the rights and duties of a person other than the issuing corporation and its transfer agents with regard to acts and omission in this state in connection with the acquisition, disposition, assignment or transfer of a security by or to a fiduciary and of a person who guarantees in this state the signature of a fiduciary in connection with such a transaction.
Sec. 92. NRS 104.5108, 104.5110, 104.5112, 104.5113, 104.5114, 104.5117, 104.81015, 104.8107, 104.8108, 104.8301, 104.8302, 104.8303, 104.8305, 104.8306, 104.8307, 104.8308, 104.8309, 104.8310, 104.8311, 104.8312, 104.8313, 104.8314, 104.8315, 104.8320, 104.8321, 104.8407, 104.8408, 162.190 and 162.200 are hereby repealed.
Sec. 93. The legislative counsel shall reserve for reuse the numbers of the sections repealed by section 92 of this act and, in preparing the 1997 reprint of NRS, shall number the sections of chapter 104 of NRS that are added, amended or left unchanged by this act, and the internal references thereto, to correspond to the numbers assigned within the respective articles of the Uniform Commercial Code by the National Conference of Commissioners on Uniform State Laws. The reserved numbers not so used are reserved for future use for similar purposes.
Sec. 94. 1. This section and section 93 of this act become effective upon passage and approval.
2. Sections 1 to 92, inclusive, of this act become effective on October 1, 1997.