§ 6A-9-203 - Attachment and enforceability of security interest; proceeds; supporting obligations; formal requisites.
SECTION 6A-9-203
§ 6A-9-203 Attachment and enforceabilityof security interest; proceeds; supporting obligations; formal requisites.– (a) Attachment. A security interest attaches to collateral when itbecomes enforceable against the debtor with respect to the collateral, unlessan agreement expressly postpones the time of attachment.
(b) Enforceability. Except as otherwise provided insubsections (c) through (i), a security interest is enforceable against thedebtor and third parties with respect to the collateral only if:
(1) Value has been given;
(2) The debtor has rights in the collateral or the power totransfer rights in the collateral to a secured party; and
(3) One of the following conditions is met:
(i) The debtor has authenticated a security agreement thatprovides a description of the collateral and, if the security interest coverstimber to be cut, a description of the land concerned;
(ii) The collateral is not a certificated security and is inthe possession of the secured party under § 6A-9-313 pursuant to thedebtor's security agreement;
(iii) The collateral is a certificated security in registeredform and the security certificate has been delivered to the secured party under§ 6A-8-301 pursuant to the debtor's security agreement; or
(iv) The collateral is deposit accounts, electronic chattelpaper, investment property, or letter-of-credit rights, or electronicdocuments, and the secured party has control under §§ 6A-7-106,6A-9-104, 6A-9-105, 6A-9-106, or 6A-9-107 pursuant to the debtor's securityagreement.
(c) Other UCC provisions. Subsection (b) is subject to§ 6A-4-210 on the security interest of a collecting bank, § 6A-5-118on the security interest of a letter-of-credit issuer or nominated person,§ 6A-9-110 on a security interest arising under chapter 2 or 2.1, and§ 6A-9-206 on security interests in investment property.
(d) When person becomes bound by another person's securityagreement. A person becomes bound as debtor by a security agreement enteredinto by another person if, by operation of law other than this chapter or bycontract:
(1) The security agreement becomes effective to create asecurity interest in the person's property; or
(2) The person becomes generally obligated for theobligations of the other person, including the obligation secured under thesecurity agreement, and acquires or succeeds to all or substantially all of theassets of the other person.
(e) Effect of new debtor becoming bound. If a newdebtor becomes bound as debtor by a security agreement entered into by anotherperson:
(1) The agreement satisfies subsection (b)(3) with respect toexisting or after-acquired property of the new debtor to the extent theproperty is described in the agreement; and
(2) Another agreement is not necessary to make a securityinterest in the property enforceable.
(f) Proceeds and supporting obligations. Theattachment of a security interest in collateral gives the secured party therights to proceeds provided by § 6A-9-315 and is also attachment of asecurity interest in a supporting obligation for the collateral.
(g) Lien securing right to payment. The attachment ofa security interest in a right to payment or performance secured by a securityinterest or other lien on personal or real property is also attachment of asecurity interest in the security interest, mortgage, or other lien.
(h) Security entitlement carried in securitiesaccount. The attachment of a security interest in a securities account isalso attachment of a security interest in the security entitlements carried inthe securities account.
(i) Commodity contracts carried in commodity account.The attachment of a security interest in a commodity account is also attachmentof a security interest in the commodity contracts carried in the commodityaccount.