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Categorical description of collateral.Participant: Excuse me, Mr Kellogg, I have a question. Why not use a general description, such as 'all personal property of the debtor'? Wouldn't that be simpler? John Kellogg: That's a good question. What you are referring to is known as a 'blanket lien'. This is problematic, because a Blanket lien creates a roadblock to any further secured Borrowing for the company. Right. On to step 3: confirm that the debtor has rights in The collateral. Counsel should confirm that the debtor has, Or will acquire, rights in the property. If in doubt, ask the Debtor to provide documentation supporting its claim to Ownership, such as bills of sale, invoices and the like. The Debtor may also agree to subject its after-acquired property To the security interest. In such a case, counsel should include a phrase such as 'now owned or later acquired' to Describe the property. The next step is step 4: confirm that the secured party has Audio transcripts E Given value. In the typical lending relationship. where the Lender either agrees to make a loan or actually advances Funds, the requirement of value is easily met. OK. Now we have step 5: draft the security agreement. The UCC requires that it's in writing. It should identify the debtor and provide a signature block. Of course, there's quite a bit more to be said here. I'll be going into more detail on the Subject of drafting later. Step 6 is to 'authenticate' the security agreement. In most cases, this probably means that the debtor's authorised Representative will put pen to paper and sign the security Agreement. Note that the concept of authentication is designed to permit the debtor to 'sign' the agreement Electronically as well, using email, for example. The final step is step 7: perfect the security interest by Filing a financing statement. After the security agreement is Authenticated, it binds the debtor and the secured party. To Make it fully effective against subsequent creditors, the Secured party must perfect the security interest, typically by Giving constructive notice to third parties. Listening 2 Tina: So, guys, how was it? Was it worth it? Jack: Oh, definitely. Old Kellogg knows what he's talking about. What did you think, Peter? Peter: Yeah, and he's funny, too. Kept it from being too dry. He Had some good stories to tell about cases he worked on. Jack: On the whole, I'd have to say I learned a lot at the seminar. I'm glad I went. I thought that the IP stuff was the most interesting. That's where things are going, if you ask me. That's the future. Tina: Can you fill me in on what he said? Jack: Sure. What he did was to give us the big picture, telling Us about what the situation is in different countries. And Then he talked about how specific types of IP collateral are Perfected here in the US under the revised UCC. Peter: He started off by talking about the importance of Intellectual property as an asset. He said that for many Companies, their intellectual property is their greatest Asset. It makes sense, if you think about it, since IP Includes everything from patents to software copyrights to Date: 2015-12-11; view: 766
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