Wisconsin Bankers Association

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1 Wisconsin Bankers Association 4721 South Biltmore Lane P.O. Box 8880 Madison, WI Phone: 608/ An Update on UCC Article 9 Filing and Perfection Amendments Phone Seminar April 4, :00 11:00 a.m. CT Copyright 2013 Wisconsin Bankers Association. No protection is claimed in works of the United States Government, articles reprinted with another publisher s permission or work copyrighted by other authors.

2 Speakers: JOHN KNIGHT, Boardman & Clark LLP John Knight is a partner in Boardman & Clark LLP, Madison, Wisconsin, and Chair of the Firm s Banking Group. John concentrates his practice in the area of banking and the business practices of banks and bank holding companies. In his 35+ years of service to banks, he has worked extensively in the areas of mergers and acquisitions, lending, bank operations and compliance, litigation, loan workouts and creditor s rights. In particular, he focuses on community bank mergers and acquisitions, regulatory matters affecting banks, including enforcement actions and compliance issues, bank holding company formations, subchapter S conversions, shareholder transactions, and shareholder and director issues. John regularly advises directors about their fiduciary duties to the corporation and its shareholders, and works with the Board and management in connection with shareholder disputes. In conjunction with Boardman s litigation team, John has helped banking organizations defend against stockholder derivative lawsuits and actions claiming breach of fiduciary duty. John serves as general counsel to the Wisconsin Bankers Association and, in that capacity, has been involved in drafting and reviewing legislation of interest to the banking industry. He has been a frequent speaker at banker and director educational programs for many years, including programs sponsored by the Graduate School of Banking conducted at the University of Wisconsin and the Wisconsin Bankers Association. He is also author of many articles for WBA publications on legal topics of interest to Wisconsin Community Banks. John received his B.S. from Western Michigan University and his J.D. (cum laude) from the University of Wisconsin Law School. He is a member of the American Bar Association (Business Law Section and the Banking and Uniform Commercial Code Committees), the Wisconsin State Bar and the Dane County Bar Association. John is listed in "Best Lawyers in America" in banking law. NOLAN ZADRA, U.S. Bancorp Nolan Zadra is Assistant General Counsel and Senior Vice President of U.S. Bancorp, as well as the senior attorney of the commercial law section of the Legal Department. U.S. Bancorp is the 5th largest bank holding company in the United States, with banks in 25 states. Nolan has extensive experience in loan workouts, commercial loan operations, managing litigation and negotiation and documenting commercial loan transactions. He earned a BBA in Finance, cum laude, from the University of Wisconsin School of Business and a JD with honors from the University of Wisconsin Law School. Nolan is a past instructor of Business Law at the Milwaukee School of Engineering and a current member of the faculty of the Graduate School of Banking. He also presents all commercial legal training for U.S. Bank. Nolan has been a frequent speaker regarding commercial transactions, including the St. Louis and Chicago sessions of the Banking Law Institute s Loan Documentation for the Commercial Lender, the Foley & Lardner seminar The Troubled Borrowers: Do You Baby Him or Buy Him?, the Corporate Copyright 2013 Wisconsin Bankers Association

3 Practice Institute topic Leveraged Buyout from the Lender s Perspective, Lorman Education Service, Executive Enterprises, Robert Morris Associates, and the Wisconsin Bankers Association Advanced Loan Documentation and other seminars. Nolan is a past member of the House Counsel Committee of the Commercial Finance Association, and currently a member of the Commercial Finance Services Section of the American Bar Association as well as the State Bar of Wisconsin and the Milwaukee Bar Association. He was also elected to the American College of Commercial Finance Lawyers and served on the State Bar of the Wisconsin Review Committee for the adoption of Revised Article 9. He currently serves on the ABA Working Group for Amendments to Uniform Commercial Code Article 9. Copyright 2013 Wisconsin Bankers Association

4 An Update on UCC Article 9 Filing and Perfection Amendments Phone Seminar April 4, :00 11:00a.m. CDT

5 John Knight Boardman & Clark LLP Madison, Wisconsin Nolan Zadra Assistant General Counsel Senior Vice President U.S. Bank Milwaukee, Wisconsin April 4,2013 WBA PHONE SEMINAR UCC ARTICLE 9 FILING AN]) PERFECTION AMENDMENTS A. Background On Current UCC Article 9. UCC Article 9 requires that UCC financing statement identify debtor s name. Section (1)(a). 2. If debtor is an individual: a. Must provide name of individual. Section (1). b. Filing office must reject UCC financing statement if it does not identify individual s last name. Section (2)(c)(3). 3. If debtor is an organization: a. Must include organization name of debtor. Section (1). b. If debtor is a registered organization (for example, corporation, limited liability company or limited partnership), must provide name of organization indicated on public record of its state of organization. Section (1)(a). 4. If debtor is an estate: a. Must include name of decedent. b. Must indicate that debtor is an estate. Section (1)(b). 5. If debtor is a trust or trustee: a. Must provide name of trust in its official documents.

6 b. If there is no name specified in its official documents, must provide name of settlor and additional information sufficient to distinguish debtor from a trust having same settlors. c. Must indicate that debtor is a trust or trustee. Section (l)(c). 6. If any mistake is made in debtor s name, financing statement is seriously misleading unless filing office computer search run by debtor s correct name turns up financing statement filed under the incorrect name. Section (2)(3). a. If search does not turn up fmancing statement with incorrect name, financing statement is not effective. Section (3). b. Therefore, effectiveness of fmancing statement where debtor s name is incorrect will depend on computer search logic used by state s filing office. c. Best practice not to make mistake in debtor s name. 7. One of the big problems under current UCC Article 9: a. Several decisions have determined that individual names used on UCC financing statements were not effective. b. Court decisions have caused considerable uncertainty for secured lenders. c. This comes about in part because individuals may have several names, including their names which appear on birth certificates, driver s licenses, passports and so forth, and individuals may change their names from time to time. B. Background On UCC Article 9 Amendments. Importantly, UCC Article 9 amendments attempt to address this issue by changing the rules regarding appropriate individual names to use on UCC financing statements. 2. The UCC Article 9 amendments also address a variety of other issues: a. Defmition of registered organization. b. Names of registered organizations. c. Debtor name when collateral is held in trust. d. Debtor name when collateral is administered by personal representative. 2

7 e. Change in debtor s location. f. Circumstances under which new debtor becomes bound by original debtor s security agreement. 3. There are several other filing related changes as a result of UCC Article 9 Amendments. 4. Wisconsin adopted UCC Article 9 amendments by enactment of 2011 Wisconsin Act 206. Amendments are effective July 1, As of March 15, 2013, 32 states have enacted UCC Article 9 amendments so far, and of those states 26 adopted only if Alternative A option and 6 adopted safe harbor Alternative B option. Illinois, Indiana, Iowa, Michigan, Minnesota and Wisconsin adopted only if Alternative A option. Likely to be more Alternative A states by uniform effective date of July 1, Be sure to check law in state where filing UCC financing statement to determine particular format followed in that state. C. New Rules Under Alternative A Regarding Individual s Name On UCC Financing Statement. In Wisconsin, under Alternative A, if debtor holds an unexpired driver s license issued by Wisconsin, then UCC financing statement is sufficient only if name of debtor on UCC financing statement is name of debtor as it appears on debtor s unexpired Wisconsin driver s license (assuming Wisconsin is debtor s state of principal residence). Section (1 )(dm). a. This is called only if rule. b. Under only if rule, individual debtor s name on UCC financing statement is sufficient only if name provided is exactly same as name on debtor s unexpired Wisconsin driver s license. i. Even if name on driver s license contains a typographical error. ii. Do not attempt to correct driver s license name on UCC financing statement. c. For first time, secured creditor will be able to rely on a specific document (driver s license) as a sufficient source for individual debtor name for purposes of filing UCC financing statements. d. Secured party will identify debtor s first name and last name (called surname ) on debtor s driver s license and set forth first name and surname of debtor in the appropriate blanks on UCC financing statement. 3

8 i. If debtor has an additional name, such as middle name or initial, place that name in Additional Names box on UCC financing statement. ii. Also, if a suffix is part of debtor s name on debtor s driver s license, e.g., Sr., Jr., or III, such suffix must be placed in Suffix box on UCC financing statement. e. If any part of individual name on driver s license is too long to fit in UCC financing statement name fields, provide entire name on UCC-lAd form. i. New UCC financing statement UCC-1 name sections include check box to indicate that name is too long and is provided on attached UCC-lAd form. Note instruction to debtor s name sections on new UCC-l financing statement. ii. So there may be times when no debtor name appears on UCC-1 fmancing statement but instead appears on attached UCC-lAd form. f. If debtor holds two driver s licenses issued by Wisconsin, most recently issued driver s license is one to which reference should be made to determine debtor s name to be included on UCC financing statement. Section (7). g. A special rule for mortgages filed as fixture filings (but not UCC-1 and 1 Ad forms filed as fixture filings) in real estate records provides that driver s license name is not required and instead follow debtor name rule described in paragraph 3 below. Section (3)(c)2. 2. Alternatively, if Wisconsin is state of debtor s principal residence and has not issued an unexpired driver s license to debtor, then use name on debtor s identification card issued by Wisconsin Department of Motor Vehicles, if any, and debtor s name on UCC financing statement will be effective only if name provided is same as name on debtor s unexpired identification card. a. Looks like driver s license but includes the words IDENTIFICATION CARD ONLY. Section (1)(dm). b. This additional option in Wisconsin regarding the identification card issued by the State is not available in some other Alternative A states. See attached chart of individual debtor names sources under UCC Article 9 prepared by Paul Hodnefield of Corporate Service Company. 4

9 Safe Safe Safe Only Only Only Only Only Only Only Only Only C0RPORATI0l ERVi0E COMPANY ndividuai Debtor Name Sources under U.C.C (a)(4) AL* AK* AZ* AR CA* CO CT DC DE* FL GA* HI ID IL IN IA KS KY LA ME MD MA* MI MN MS* MO* Mr NE NV NH NJ* NM* NY NC ND OH OK* OR PA* RI sc* SD TN TX ur VT VA WA WV WI WY S Primary Source. Driver s License Nondriver Identification Card AIti Safe Harbor Driver s License Identification Card A - Only If Driver s License None Alternative A - Only If Drivers License None Alternative A - Only If Driver s License Identification Card Alternative B - Harbor Driver s License None Alternative B - Harbor Motor vehicle operator s license Identity Card Alternative A - Only If Driver s License Special Identification Card Non-Uniform NA NA Alternative A - If Driver s License Personal Identification Card Alternative A - Only If Driver s License None Alternative A - Only If Driver s License Non-Driver Identification Card Alternative A - Only If Driver s License Idaho Identification Card Alternative A - If Driver s License None Alternative A - If Driver s License Identification Card for Non-Drivers Alternative A - Only If Driver s License None Alternative A - Only If Driver s License Identification Card Alternative A - Only If Operator s License None Alternative A - If Driver s License None Pending Introduction Pending Pending Alternative A - Only If Driver s License Identification Card Alternative A - Only If Driver s License Massachusetts Identification Card Alternative A - If Driver s License State Personal Identification Card Alternative A - If Driver s License State Identification Card Alternative A - Only If Driver s License Nondriver s Identification Card Alternative A - Only If Driver s License None Alternative A - Only If Driver s License State or Tribal Identification Card Alternative A - If Driver s License State Identification Card Alternative A - Only If Driver s License Personal Identification Card Alternative B - Safe Harbor Driver s License Non-Driver s Picture Identification Card Alternative A - Only If Driver s License None Alternative A - Only If Driver s License None Pending Introduction Pending Pending Alternative A - Only If Driver s License Special Identification Card Alternative A - Only If Driver s License Identity Card Alternative A - Only If Driver s License Identification Card Alternative A - Only If Driver s License None Alternative B - Safe Harbor Driver s License Identification Card Alternative A - Only If Driver s License Identification Card Alternative A - Only If Driver s License Personal Identification Card Alternative A - Only If Driver s License Identification Card Alternative A - Only If Driver s License None Alternative A - Only If Driver s License Photo Identification License Alternative A - Only If Driver s License Personal Identification Card Alternative A - Only If Driver s License Identification Card Pending Introduction Pending Pending Alternative A - If Driver s License Identification Card Alternative B - Safe Harbor Driver s License Identification Card Alternative A - Only If Driver s License None Alternative A - If Operator s License Personal Identification Card Alternative B - Harbor Driver s License Identification Card *Legislation currently Pending. Subject to change in final enacted version of bill. **For use if debtor lacks the primary document in Alternative A states or as a safe harbor option for Alternative B states. For Additional Information Contact: Paul Hodnefield Associate General Counsel Corporation Service Company Phone: (800) , ext hodnefi(cscinfo.corn 2013 by Corporation Service Company v ph 4-a

10 3. If debtor does not hold an unexpired Wisconsin driver s license or identification card and under UCC Article 9 UCC financing statement is to be filed in Wisconsin, then financing statement will be sufficient only if name provided on UCC financing statement is either of following names: a. Debtor s surname and first personal name. b. Individual name of debtor as under current UCC Article 9. Section (l)(e) c. Most lenders likely to use debtor s surname and first personal name. 4. What happens if debtor s driver s license expires? What happens if debtor exchanges current driver s license for driver s license with different name? a. Ordinarily expiration of driver s license will cause a name change event for purposes of section (3). b. If search under new name using filing office s standard search logic does not disclose financing statement filed under expired or original driver s license name, fmancing statement would be seriously misleading. Section (2), (3). c. If current financing statement is now seriously misleading, fmancing statement remains effective for collateral in existence on date of name change and for collateral acquired during 4-month period after name change. Section (3)(a). d. For UCC fmancing statement to be effective for collateral acquired after end of 4-month period, secured party must amend UCC financing statement within 4-month period to provide new name. Section (3)(b). e. So secured creditor has 4-month grace period to refile UCC financing statement with name change. Note there is no deadline for refiling because of name change with respect to collateral consisting of presentlyowned collateral (for example, existing equipment). 5. Alternative B in few other states safe harbor option. a. Under Alternative B safe harbor approach, any of following names for debtor would be sufficient on UCC financing statement: i. Debtor s name shown on debtor s unexpired driver s license issued by state where UCC fmancing statement is to be filed; 5

11 ii. iii. Individual name of debtor, as under current UCC Article 9; or Debtor s surname and first personal name. b. If there is no unexpired driver s license, filing will be sufficient only if it indicates individual name of debtor (the current test) or individual s surname and first personal name. 6. Individual debtor is located in state of his or her principal residence. Section (2)(a). Law of that state will determine which option is followed in that state. D. New Rules Regarding Registered Organizations. A registered organization is located in state where it is organized. Section (5). 2. Definition of registered organization is changed under UCC Article 9 amendments to require that registered organization be one that is formed or organized under law of state by filing of a public record. Section (1)(rg). 3. If debtor is registered organization (for example, corporation, limited liability company or limited partnership) UCC financing statement must provide name of organization indicated on public record of its state of organization. Section (1)(a). 4. UCC Article 9 amendments clarify that name of registered organization is name reflected on public organic record of registered organization. Section (1)(a). a. In most cases, a registered organization s public organic record is publicly available record filed with state to form or organize organization (for example, it s articles of incorporation). Section (1)(qp)1. b. It is not name of organization on state s publicly searchable database or on a certificate of good standing issued by state. c. It sometimes occurs that name entered into state s searchable database differs from name of organization as it appears on organization s public organic record. i. Name of corporation reflected in its charter document in a public file with state and name reflected on state s publicly available database may differ. ii. Debtor s name to be used on UCC financing statement is debtor s name as reflected on charter document filed with state. 6

12 d. If there is more than one public organic record stating debtor s name, debtor s name is one provided on most recently filed public organic record. Section (1)(a). E. New Rules Regarding Collateral Held In Trust. If debtor is trust or trustee, UCC financing statement must provide name of trust in its official documents, or if there is no name specified, name of settlor and additional information sufficient to distinguish debtor from trusts having same settlors, and indicate in separate part of fmancing statement that collateral is held in a trust. Section (1)(c). 2. Requirement that name to be provided on fmancing statement is name of trust itself or, if trust has no name, name of settlor, is same as current UCC Article 9. Section (1)(c). 3. If collateral is held in testamentary trust without a name, name of testator should be provided. Section (1 )(c)lm.b. 4. In addition, UCC financing statement must provide in a separate part of statement that collateral is held in trust. Section (1)(c)2m. a. New revised UCC-1 financing statement form contains a box for this provision near debtor-name field that can be checked. b. This replaces reference under current UCC Article 9 to debtor being a trust or trustee. That language will be removed effective July 1, c. The reference to debtor being a trust or trustee was confusing in practice especially because for common law trusts in most states debtor would be trustee. d. If collateral is held in common law trust, in many states debtor will not be the trust but will instead be the trustee acting in that capacity. Therefore, location of debtor for purposes of filing a UCC financing statement is location of trustee. 5. Notwithstanding change described in paragraph 4 above requiring a statement in the UCC financing statement that collateral is held in a trust, a previously filed effective UCC fmancing statement that met prior requirement identifying debtor as trust or trustee acting with respect to property held in trust satisfies this new requirement under UCC Article 9 and therefore no further action needs to be taken to correct prior UCC financing statement even if secured creditor files a continuation statement. Section (5). 7

13 F. New Rules Regarding Collateral Administered By Personal Representative. 1. Where collateral is administered by personal representative of deceased debtor, name of deceased debtor on UCC fmancing statement is sufficient as safe harbor if name provided is name of debtor on court order appointing personal representative. Section (6). 2. If appointment order contains more than one name for debtor, first full name of debtor on appointment order is sufficient. 3. And indicate in separate part of financing statement that collateral is being administered by a decedent s personal representative. Section (1)(b). 4. Prior requirement that UCC financing statement identify debtor as an estate has been removed. 5. Notwithstanding change described in paragraph 3 above requiring statement in UCC financing statement that collateral is being administered by a decedent s personal representative, a previously filed effective UCC financing statement that met prior requirement identifying debtor as an estate satisfies this new requirement under UCC Article 9 and therefore no further action needs to be taken to correct prior UCC fmancing statement even if secured creditor files a continuation statement. Section (5). G. New Rules Regarding Change in Debtor s Location. 1. Under current UCC Article 9, if debtor changes its location to another state secured party must file iiitial financing statement in new state within 4 months to maintain perfection. Section (1)(b). a. If financing statement does not become perfected within 4 month period, it becomes unperfected and is deemed to have never been perfected as against purchasers for value, including other secured parties, retroactively. A security interest in property acquired by debtor after change in location would not be perfected under 4-month rule. Section (2). b. If secured party properly re-perfects within 4-month period under current UCC Article 9, security interest remains continuously perfected. Section (2). 2. UCC Article 9 amendments add grace period for after-acquired property. a. UCC financing statement filed in new state is effective with respect to collateral acquired within 4 months after debtor s location change. Section (8)(a). 8

14 b. Secured party can continue perfection after 4-month period by timely filing financing statement in new state. Section (8)(b). 3. UCC Article 9 amendments provide similar protection for security interest in after-acquired property if new debtor becomes bound by original debtor s security agreement and new debtor is located in different state. Section (9)(a). H. New Rules Regarding Other Filing Related Matters. 1. Filing office will no longer be permitted to reject a financing statement that fails to provide type of organization, jurisdiction of organization or organizational identification number. New UCC financing statement forms will not request this information. 2. Term correction statement used in current UCC Article 9 has been changed to information statement beginning July 1, Section (2). a. Under current UCC Article 9, correction statement may only be filed by debtor. Section (1). b. Under UCC Article 9 amendments, information statement may also be filed by secured party of record who believes that amendment or other record relating to fmancing statement of secured party was filed by person not entitled to do so. Section (3m). 3. Only an initial financing statement may indicate that debtor is a transmitting utility, in which case financing statement would not lapse under UCC Article 9. Current UCC Article 9 indicates that initial financing statement may be amended for this purpose. That will not work beginning July 1, Section (6). Uniform Form Of Financing Statement And Amendment Have Been Updated To Reflect UCC Article 9 Amendments. 1. Copies of new forms plus instructions follow this page. 2. Do not use new UCC fmancing statement forms until July 1, They do not comply with current filing requirements and DFI will not accept new UCC financing statements until July 1, Secured creditors should not use old UCC financing statements on or after July 1, However, as an accommodation, DFI plans to accept old UCC financing statement form for a period of_ months following July 1, Note, however, that use of an old UCC financing statement form on or after July 1, 2013, may result in ineffective filing and therefore should not be engaged in by secured creditors. Use new forms. 9

15 UCC FINANCING STATEMENT FOLLOW INSTRUCTIONS A. NAME & PHONE OF CONTACT AT FILER (optional) B. CONTACT AT FILER (optional) C. SEND ACKNOWLEDGMENT TO: (Name and Address) F L I THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY 1. DEBTORS NAME: Provide only one Debtor name (lx or ib) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtors name); if any part of the Individual Debtof a name will not fit in line lb. leave all of item I blank, check here and provide the Individual Debtor information In item 10 of the Financing Statement Addendum (Form UCC1Ad) la. ORGANIZATION S NAME OR lb. INDIVIDUAL S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX 1C. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 2. [IEBTOR S NAME: Provide only one Debtor name (2a or 2b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtors name); if any part of the Individual Debtors name will not fit in line 2b, leave all of Item 2 blank, check here and provide the Individual Debtor information in item 10 of the Financing Statement Addendum (Form UCC1Ad) 2a, ORGANIZATION S NAME OR 2b. INDIVIDUAL S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX 2 MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 3. SECURED PARTY S NAME (or NAME of ASSIGNEE of ASSIGNOR SECURED PARTYI: Provide only one Secured Party name t3a or 3bt 3a. ORGANIZATION S NAME OR 3b. INDIVIDUAL S SURNAME FIRST PERSONAL NAME ilrwl UMOO)flINI I II\L(S) SUFFIX 3c MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 4. COLLATERAL: This financing statement covers the following collateral: 5. Check gnly if applicable and check only one box: Collateral is [] held in a Treat (see UCCIAd, item 17 and Instructions) Lj being administered by a Decedent s Personal Representative 6a. Check only if applicable and check only one box: 6b. Check only if applicable and check only one box: [I Public-Finance Transaction [ Manufactured-Home Transaction LI A Debtor is a Transmitting Utility [j Agricultural Lien [I Non-UCC Filing 7. ALTERNATIVE DESIGNATION (if applicable): LI Lessee/Lessor LI Consignee/Consignor j Seller/Buyer LI Bailee/Bailor LI Licenaee/Licensor 8. OPTIONAL FILER REFERENCE DATA: UCC FINANCING STATEMENT (Form UCC1) (Rev. 04/20/11) 9-a

16 Instructions for UCC Financing Statement (Form UCCI) Please type or laser-print this form. Be sure it is completely legible. Read and follow all lnstwctions, especially Instruction 1; use of the correct name for the Debtor is crucial. Fill in form very carefully: mistakes may have important legal consequences. If you have questions, consult your attorney. The filing office cannot give legal advice. Send completed form and any attachments to the filing office, with the required fee. ITEM INSTRUCTIONS A and B. To assist filing offices that might wish to communicate with filer, filer may provide information in item A and item B. These items are optional. C. Complete item C if filer desires an acknowledgment sent to them. If filing in a filing office that returns an acknowledgment copy furnished by filer, present simultaneously with this form the Acknowledgment Copy or a carbon or other copy of this form for use as an acknowledgment copy. 1. Debtor s name. Carefully review applicable statutory guidance about providing the debtor s name. Enter only one Debtor name in item I either an organization s name (1 a) or an individual s name (I b). If any part of the Individual Debtor s name will not fit in line 1 b, check the box in item 1, leave all of item 1 blank, check the box in item 9 of the Financing Statement Addendum (Form UCC1Ad) and enter the Individual Debtor name in item 10 of the Financing Statement Addendum (Form UCC1Ad). Enter Debtor s correct name. Do not abbreviate words that are not already abbreviated in the Debtor s name. If a portion of the Debtor s name consists of only an initial or an abbreviation rather than a full word, enter only the abbreviation or the initial. If the collateral is held in a trust and the Debtor name is the name of the trust, enter trust name in the Organization s Name box in item la. la. Organization Debtor Name. Organization Name means the name of an entity that is not a natural person. A sole proprietorship is not an organization, even if the individual proprietor does business under a trade name. If Debtor is a registered organization (e.g., corporation, limited partnership, limited liability company), it is advisable to examine Debtor s current filed public organic records to determine Debtor s correct name. Trade name is insufficient. If a corporate ending (e.g., corporation, limited partnership, limited liability company) is part of the Debtor s name, it must be included. Do not use words that are not part of the Debtor s name. lb. Individual Debtor Name. Individual Name means the name of a natural person: this includes the name of an individual doing business as a sole proprietorship, whether or not operating under a trade name. The term includes the name of a decedent where collateral is being administered by a personal representative of the decedent. The term does not include the name of an entity, even if it contains, as part of the entity s name, the name of an individual. Prefixes (e.g., Mr., Mrs., Ms.) and titles (e.g., M.D.) are generally not part of an individual name. Indications of lineage (e.g., Jr., Sr., III) generally are not part of the individual s name, but may be entered in the Suffix box. Enter individual Debtor s surname (family name) in Individual s Surname box, first personal name in First Personal Name box, and all additional names in Additional Name(s)/Initial(s) box. If a Debtor s name consists of only a single word, enter that word in Individual s Surname box and leave other boxes blank. For both organization and individual Debtors. Do not use Debtor s trade name, DBA, AKA, FKA, division name, etc. in place of or combined with Debtor s correct name: filer may add such other names as additional Debtors if desired (but this is neither required nor recommended). lc. Enter a mailing address for the Debtor named in item Ia or lb. 2. Additional Debtor s name. Ifan additional Debtor is included, complete item 2, determined and formatted per Instwction 1. For additional Debtors, attach either Addendum (Form UCCIAd) or Additional Party (Form UCC1AP) and follow Instruction 1 for determining and formatting additional names. 3. Secured Party s name. Enter name and mailing address for Secured Party or Assignee who will be the Secured Party of record. For additional Secured Parties, attach either Addendum (Form UCC1Ad) or Additional Party (Form UCC1AP). If there has been a full assignment of the initial Secured Party s right to be Secured Party of record before filing this form, either (1) enter Assignor Secured Party s name and mailing address in item 3 of this form and file an Amendment (Form UCC3) [see item 5 of that form]: or (2) enter Assignee s name and mailing address in item 3 of this form and, if desired, also attach Addendum (Form UCC1Ad) giving Assignor Secured Party s name and mailing address in item Collateral. Use item 4 to indicate the collateral covered by this financing statement. If space in item 4 is insufficient, continue the collateral description in item 12 of the Addendum (Form UCC1Ad) or attach additional page(s) and incorporate by reference in item 12 (e.g., See Exhibit A). Do not include social security numbers or other personally identifiable information. Note: If this financing statement covers timber to be cut, covers as-extracted collateral, and/or is filed as a fixture filing, attach Addendum (Form UCC1Ad) and complete the required information in items 13, 14, 15, and If collateral is held in a trust or being administered by a decedent s personal representative, check the appropriate box in item 5. If more than one Debtor has an interest in the described collateral and the check box does not apply to the interest of all Debtors, the filer should consider filing a separate Financing Statement (Form UCC1) for each Debtor. 6a. If this financing statement relates to a Public-Finance Transaction, Manufactured-Home Transaction, or a Debtor is a Transmitting Utility, check the appropriate box in item 6a. If a Debtor is a Transmitting Utility the initial financing statement is filed in connection with a Public-Finance Transaction or Manufactured-Home Transaction, check rniy that a Debtor is a Transmitting Utility. 6b. If this is an Agricultural Lien (as defined in applicable state s enactment of the Uniform Commercial Code) or if this is nota UCC security interest filing (e.g., a tax lien, judgment lien, etc.), check the appropriate box in item 6b and attach any other items required under other law. 7. Alternative Designation. If filer desires (at filer s option) to use the designations lessee and lessor, consignee and consignor, seller and buyer (such as in the case of the sale of a payment intangible, promissory note, account or chattel paper), bailee and bailor, or licensee and licensor instead of Debtor and Secured Party, check the appropriate box in item Optional Filer Reference Data. This item is optional and is for filer s use only. For filer s convenience of reference, filer may enter in item 8 any identifying information that filer may find useful. Do not include social security numbers or other personally identifiable information. 9-b

17 UCC FINANCING STATEMENT ADDENDUM FOLLOW INSTRUCTIONS 9. NAME OF FIRST DEBTOR: Same as line Ia or lb on Financing Statement; If line lb was left blank because Individual Debtor name did not fit, check here LI 9a. ORGANIZATION S NAME 9b. INDIVIDUAL S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY 10. DEBTORS NAME: Provide (ba or lob) only gnadditional Debtor name or Debtor name that did not fit inline lb or 2b of the Financing Statement (Form UCC1) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtors name) and enter the mailing address in line boo ba. ORGANIZATION S NAME OR lob. INDIVIDUAL S SURNAME INDIVIDUAL S FIRST PERSONAL NAME INDIVIDUAL S ADDITIONAL NAME(S)/INITIAL(S) SUFFIX boo. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 11. ADDITIONAL SECURED PARTY S NAME ASSIGNOR SECURED PARTY S NAME: Provide onlygomname (lie or bib) lie. ORGANIZATION S NAME OR llb. INDIVIDUAL S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(s)IINITIAL(s) SUFFIX 11 c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 12. ADDITIONAL SPACE FOR ITEM 4 (Collateral): 13. This FINANCING STATEMENT is to be filed [for record] (or recorded) In the 14. This FINANCING STATEMENT: REAL ESTATE RECORDS (if applicable) [] covers timber to be cut LI 15. Name and address of a RECORD OVSNER of real estate described in item Description of real estate: (if Debtor does not have a record interest): covers as-extracted collateral is filed as a fixture filing 17. MISCELLANEOUS: UCC FINANCING STATEMENT ADDENDUM (Form UCCIAd) (Rev. 04/20/11) 9-c

18 Instructions for UCC Financing Statement ADDENDUM (Form UCCIAd) Please type or laser-print this form. Be sure it is completely legible. Read and follow all Instructions; use of the correct name for the Debtor is crucial. Fill in form very carefully; mistakes may have important legal consequences. If you have questions, consult your attorney. The filing office cannot give legal advice. ITEM INSTRUCTIONS 9. Name of first Debtor. Enter name of first Debtor exactly as shown in item 1 of Financing Statement (Form UCC1) to which this Addendum relates. The name will not be indexed as a separate debtor. The Debtor name in this section is intended to cross-reference this Addendum with the related Financing Statement (Form UCC1). If the box in item 1 of the Financing Statement (Form UCC1) was checked because Individual Debtor name did not fit, the box in item 9 of this Addendum should be checked. 10. Additional Debtor s name. If this Addendum adds an additional Debtor, complete item 10 in accordance with Instruction 1 of Financing Statement (Form UCC1). For additional Debtors, attach either an additional Addendum oradditional Party (Form UCC1AP) and follow Instruction 1 of Financing Statement (Form UCC1) for determining and formatting additional names. 11. Additional Secured Party s name or Assignor Secured Party s name. If this Addendum adds an additional Secured Party, complete item 11 in accordance with Instruction 3 of Financing Statement (Form UCCI). For additional Secured Parties, attach either an additional Addendum or Additional Party (Form UCCIAP) and complete applicable items in accordance with Instruction 3 of Financing Statement (Form UCC1). In the case of a full assignment of the Secured Party s interest before the filing of this financing statement, if filer has provided the name and mailing address of the Assignee in item 3 of Financing Statement (Form UCC1), filer may enter Assignor Secured Party s name and mailing address in item Additional Collateral Description. If space in item 4 of Financing Statement (Form UCCI) is insufficient or additional information must be provided, enter additional information in item 12 or attach additional page(s) and incorporate by reference in item 12 (e.g., See Exhibit A). Do not include social security numbers or other personally identifiable information Real Estate Record Information. If this Financing Statement is to be filed in the real estate records and covers timber to be cut, covers asextracted collateral, and/or is filed as a fixture filing, complete items 1-4 of the Financing Statement (Form UCC1), check the box in item 13, check the appropriate box in item 14, and complete the required information in items 15 and 16, If the Debtor does not have an interest of record, enter the name and address of the record owner in item 15. Provide a sufficient description of real estate in accordance with the applicable law of the jurisdiction where the real estate is located in item 16. If space in items 15 or 16 is insufficient, attach additional page(s) and incorporate by reference in items 15 or 16 (e.g., See Exhibit A), and continue the real estate record information. Do not include social security numbers or other personally identifiable information. 17. Miscellaneous. Under certain circumstances, additional information not provided on the Financing Statement (Form UCC1) may be required. Also, some states have non-uniform requirements. Use this space or attach additional page(s) and incorporate by reference in item 17 (e.g., See Exhibit A) to provide such additional information or to comply with such requirements; otherwise, leave blank. Do not include social security numbers or other personally identifiable information. 9-d

19 UCC FINANCING STATEMENT AMENDMENT FOLLOW INSTRUCTIONS A. NAME & PHONE OF CONTACT AT FILER (optional) B. CONTACT AT FILER (optional) C. SEND ACKNOWLEDGMENT TO: (Name and Address) F L la. INITIAL FINANCING STATEMENT FILE NUMBER I in. THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY This FINANCING STATEMENT AMENDMENT Is to be filed [for record] (or recorded) in the REAL ESTATE RECORDS RIer attad, Ammdment Addendum (Form UCC3Ad1 and omdde Debtor s name in item Lj TERMINATION: Effectiveness of the Financing Statement identified above is terminated with respect to the security interest(s) of Secured Party authorizing this Termination Statement 3. ASSIGNMENT (full or partial): Provide name of Assignee in Item 7a or 7b. and address of Assignee in item 7c name of Assignor in item 9 For partial assignment, complete items 7 and 9 and also indicate affected collateral in item 8 4.j CONTINUATION: Effectiveness of the Financing Statement Identified above with respect to the security interest(s) of Secured Party authorizing this Continuation Statement is continued for the additional period provided by applicable law 5. PARTY INFORMATION CHANGE: Check one of these two boxes AND Check one of these three boxes to: CHANGE name andlor address: Complete ADD name: Complete item DELETE name: Give record name Secured Party of record item 6a or 6b; and item 7a or 7b and item 7c []7a or 7b, and item 7c to be deleted in item 6a or 6b This Change affects []Debtor o [] 6. CURRENT RECORD INFORMATION: Complete for Party Information Change - provide onty one name (Es or Gb) 6a. ORGANIZATIONS NAME [ OR 6b. INDIVIDUAL S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX 7. CHAN GED OR ADD ED INFORMATION: Complete for Assignment or Party Information Change - prxvide only ste name (7a or 7b) (use enact, full name: do not omit, modity, or abbreviate any part of the Debtna name) 7a. ORGANIZATION S NAME OR lb. INDIVIDUAL S SURNAME INDIVIDUAL S FIRST PERSONAL NAME INDIVIDUAL S ADDITIONAL NAME(S)/INITIAL(S) SUFFIX 7c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 8. [i COLLATERAL CHANGE: alan check one of these four boxes: Li ADD collateral Li DELETE collateral Li RESTATE covered collateral LI ASSIGN collateral Indicate collateral: 9. NAME OF SECURED PARTY OF RECORD AUTHORIZING THIS AMENDMENT: Provide only one name (9a or 9b) (name of Assignor, if this is an Assignment) If this is an Amendment authorized by a DEBTOR, check here [] and provide name of authorizing Debtor 9a. ORGANIZATION S NAME 9b. INDIVIDUAL S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX 10. OPTIONAL FILER REFERENCE DATA: UCC FINANCING STATEMENT AMENDMENT (Form UCC3) (Rev. 04/20/11) 9-e

20 Instructions for UCC Financing Statement Amendment (Form UCC3) Please type or laser-print this form. Be sure it is completely legible. Read and follow all Instructions, especially Instruction la; correct file number of initial financing statement is crucial. Fill in form very carefully; mistakes may have important legal consequences. If you have questions, consult your attorney. The filing office cannot give legal advice. Send completed form and any attachments to the filing office, with the required fee. ITEM INSTRUCTIONS A and B. To assist filing offices that might wish to communicate with filer, filer may provide information in item A and item B. These items are optional. C. Complete item C if you want an acknowledgment sent to you. If filing in a filing office that returns an acknowledgment copy furnished by filer, present simultaneously with this form the Acknowledgment Copy or a carbon or other copy of this form for use as an acknowledgment copy. Always comolete items la and 9. 1 a. File Number. Enter file number of initial financing statement to which this Amendment relates. Enter only one file number. In some states, the file number is not unique; in those states, also enter in item la, after the file number, the date that the initial financing statement was filed. lb. Ifthis Amendment is to be filed in the real estate records or in any other filing office where the name of current Debtor is required for indexing purposes, check the box in item lb enter Debtor name in item 13 of Amendment Addendum (Form UCC3Ad). Complete item 13 in accordance with instructions on Amendment Addendum (Form UCC3Ad). If Debtor does not have an interest of record, enter the name and address of the record owner in item 16 of Amendment Addendum (Form UCC3Ad). Note: Show purpose of this Amendment by checking box 2, 3, 4, 5, or 8 (in items 5 and 8 you must check additional boxes); also complete items 6, 7, and/or 8 as appropriate. Some, but not all filing offices accept multiple actions on an Amendment. Filing offices that accept multiple actions may charge an additional fee. Some filing offices that accept multiple actions may only index one of the actions requested. Consult the administrative rules of the designated filing office to determine the extent to which multiple actions will be accepted, indexed, and the applicable filing fees for multiple actions. 2. Termination. To terminate the effectiveness of the identified financing statement with respect to the security interest(s) of authorizing Secured Party, check box in item 2. See Instruction 9 below. 3. Assignment. To jgn (1) some or all of Assignor s right to amend the identified financing statement, or (2) the Assignor s right to amend the identified financing statement with respect to some (but not all) of the collateral covered by the identified financing statement: Check box in item 3 an enter name of Assignee in item 7a or 7b; always enter the Assignee s mailing address in item 7c. Also enter name of Assignor in item 9. If assignment affects the right to amend the financing statement which respect to some (but not all) of the collateral covered by the identified financing statement, check the ASSIGN collateral box and indicate the particular collateral covered in item Continuation. To continue the effectiveness of the identified financing statement with respect to the security interest(s) of authorizing Secured Party, check box in item 4. See Instruction 9 below Party Information Change. To indicate a oartv information change, check this box; also check additional boxes (as applicable) and complete items 5, 6, and/or 7 as appropriate. To change the name and/or address of a party (items 5, 6, and 7): Check box in item 5 to indicate whether this Amendment relates to a Debtor or Secured Party of record; and check the CHANGE name and/or mailing address box in item 5 and enter name of affected party (current record name) in item 6a or 6b; and repeat or enter the new name in item 7a or 7b; always enter the party s mailing address in item 7c. To a party (items 5 and 7): Check box in item 5 to indicate whether this Amendment relates to a Debtor or Secured Party of record; check the ADD name box in item 5 and enter the added party s name in item 7a or 7b; always enter the party s mailing address in item 7c. For additional Debtors or Secured Parties, attach Amendment Additional Party (Form UCC3AP), using correct name format. a party (items 5 and 6): Check box in item 5 to indicate whether this Amendment relates to a Debtor or Secured Party of record; the DELETE name box in item 5 and enter the deleted party s name in item 6a or 6b. check 8. Collateral Change. To indicate a collateral change, check this box; also check additional box (as applicable) and describe the change in item 8. If space in item 8 is insufficient, continue collateral description in item 14 of Amendment Addendum (Form UCC3Ad). Do not include social security numbers or other personally identifiable information. To add collateral: Check the ADD collateral box in item 8 and indicate the additional collateral. To çji collateral: Check the DELETE collateral box in item 8 and indicate the deleted collateral. A partial release is a DELETE collateral change. To restate covered collateral description: Check the RESTATE covered collateral box in item 8 and indicate the restated collateral. To jgji the right to amend the financing statement with respect to part (but not all) of the collateral covered by the identified financing statement: Comply with Instruction 3 above and check the ASSIGN collateral box in item 8. If, due to a full release of collateral, filer no longer claims a security interest underthe identified financing statement, check box in item 2 (Termination) and not a box in item 8 (Collateral Change). 9. Name of Authorizing Party. Enter name of party of record authorizing this Amendment. In most cases, the authorizing party is the Secured Party of record. If this is an Amendment (Assignment), enter Assignor s name in item 9a or 9b. If this is an Amendment (Termination) authorized by a Debtor, check the box in item 9 and enter the name of the Debtor authorizing this Amendment in item 9a or 9b. If this Amendment (Termination) is to be filed or recorded in the real estate records, also enter, in item 12 of Amendment Addendum (Form UCC3Ad), the name of Secured Party of record. If there is more than one authorizing Secured Party or Debtor, enter additional name(s) in item 14 of Amendment Addendum (Form UCC3Ad). 10. Optional Filer Reference Data. This item is optional and is for filer s use only. For filer s convenience of reference, filer may enter in item 10 any identifying information that filer may find useful. Do not include social security numbers or other personally identifiable information. 9-f

21 UCC FINANCING STATEMENT AMENDMENT ADDENDUM FOLLOW INSTRUCTIONS 11 INITIAL FINANCING STATEMENT FILE NUMBER: Same as item Ia on Amendment form 12. NAME OF PARTY AUTHORIZING THIS AMENDMENT: Same as item 9 on Amendment form 12a. ORGANIZATIONS NAME OR 12b. INDI VIDUAL S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY 13. Name of DEBTOR on related financing statement (Name of a current Debtor of record required for indexing purposes only in some filing offices - see Instruction item 13): Provide only Debtor name (13a or 13b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtor s name): see Instructions If name does not fit 13a. ORGANIZATION S NAME OR 13b. INDIVIDUAL S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX 14. ADDITIONAL SPACE FOR ITEM 8 (Collateral): 15. This FINANCING STATEMENT AMENDMENT: 17. DescriptIon of real estate: [] covers timber to be cut [] covers as-extracted collateral is filed as a fixture filing 16. Name and address of a RECORD OWNER of real estate described in Item 17 (if Debtor does not have a record Interest): 18. MISCELLANEOUS: UCC FINANCING STATEMENT AMENDMENT ADDENDUM (Form UCC3Ad) (Rev. 04/20/11) 9-g

22 Instructions for UCC Financing Statement AMENDMENT ADDENDUM (Form UCC3Ad) Please type or laser-print this form. Be sure it is completely legible. Read and follow all Instructions; use of the correct name for the Debtor is crucial. Fill in form very carefully; mistakes may have important legal consequences. If you have questions, consult your attorney. The filing office cannot give legal advice. ITEM INSTRUCTIONS 11. File Number. Enter file number of initial financing statement as shown in item 1 a of Amendment (Form UCC3) to which this Amendment Addendum relates. 12. Name of Authorizing Party. Enter information exactly as shown in item 9 on Amendment (Form UCC3). 13. Name of Debtor on related Financing Statement. If this Amendment (Form UCC3) is to be filed in the real estate records or in any other filing office where the name of a current Debtor of record is required for indexing purposes, enter Debtor name in item 1 3a or 1 3b. Item 13 is intended to cross-reference the Amendment (Form UCC3) and Amendment Addendum with the related Financing Statement (Form UCC1). If more than one current Debtor, enter additional name(s) in item 14 or on additional Amendment Addendum (Form UCC3Ad). Do not use item 13 to change, add, or delete a Debtor name. 14. Additional Space for Item 8 (Collateral). If space in item 8 of Amendment (Form UCC3) is insufficient or additional information must be provided, enter additional information in item 14 or attach additional page(s) and incorporate by reference in item 14 (e.g., See Exhibit A). Do not include social security numbers or other personally identifiable information Real Estate Record Information. If this Amendment (Form UCC3) is to be filed in the real estate records, complete the required information (items 15, 16, and 17). If this Amendment (Form UCC3) covers timberto be cut, covers as-extracted collateral, and/oris filed as a fixture filing, check appropriate box in item 15. If the Debtor does not have an interest of record, enter the name and address of the record owner in item 16. Provide a sufficient description of real estate in accordance with the applicable law of the jurisdiction where the real estate is located in item 17. If space in items 16 or 17 is insufficient, attach additional page(s) and incorporate by reference in items 16 or 17 (e.g., See Exhibit A), and continue the real estate information. Do not include social security numbers or other personally identifiable information. 18. Miscellaneous. Under certain circumstances, additional information not provided on the Financing Statement Amendment (Form UCC3) may be required. Also, some states have non-uniform requirements. Use this space or attach additional page(s) and incorporate by reference in item 18 (e.g., See Exhibit A) to provide such additional information or to comply with such requirements; otherwise, leave blank. Do not include social security numbers or other personally identifiable information. 9-h

23 J. Transition Rules For Changes Regarding Identifying Debtor s Individual Name On UCC Financing Statements. UCC Article 9 amendments are effective July 1, Wisconsin Act 206 Section In general, these amendments apply to a transaction or lien under UCC Article 9 even if transaction or lien was entered into or created before July 1, 2013, except as otherwise provided in amendments. Section (1). 3. Amendments do not affect an action, case or proceeding commenced before July 1, Section (2). 4. A security interest that was perfected before July 1, 2013, under current UCC Article 9 and meets the requirements for perfection under UCC Article 9 amendments on July 1, 2013, remains perfected after July 1, 2013, without any further action by secured party for perfection. Section (1). 5. Except for perfection by filing, if perfection requirements under current UCC Article 9 were satisfied before July 1, 2013, but perfection requirements under UCC Article 9 amendments are not met as of July 1, 2013, security interest remains perfected for period of one year following July 1, Section (2) and Section (2). a. Perfection of security interest will lapse if requirements for perfection under UCC Article 9 amendments are not satisfied within that one-year period. b. Important this one-year rule does not apply to security interests perfected by filing. Perfection by filing is subject to special rule discussed below. 6. If security interest is perfected by filing prior to July 1, 2013, but does not meet requirements for perfection by filing under UCC Article 9 amendments as of July 1, 2013, one-year grace period described above for maintaining perfection does not apply. Section (2) and Section (2). a. If pre-july 1, 2013, UCC financing statement in Wisconsin was effective to perfect security interest under current UCC Article 9 but would, if filed on July 1, 2013, be ineffective to perfect security interest, UCC financing statement is nevertheless effective until its normal lapse. Section (2). b. A filed UCC financing statement effective under current UCC Article 9 is not rendered ineffective by UCC Article 9 amendments. However, unless properly and timely continued such UCC financing statement will cease to be effective: 10

24 i. If filed in Wisconsin ceases to be effective at time financing statement would cease to be effective without regard to UCC Article 9 amendments. Section (2)(a). ii. If filed in another state, ceases to be effective at earlier of time financing statement would cease to be effective under law of that state or June 30, Section (2)(b)1., 2. c. To avoid lapse of UCC financing statement filed with Wisconsin DFI before July 1, 2013, and to continue that filed UCC financing statement with Wisconsin DFI after July 1, 2013, a continuation statement is effective to continue effectiveness of that previously filed UCC financing statement. Section (3). i. However, the pre-july 1, 2013, UCC financing statement and continuation statement taken together must satisfy requirements of UCC Article 9, including UCC Article 9 amendments, for an initial financing statement. Section (5). ii. iii. iv. As noted in 7.d. below, this would require secured party to first amend debtor s name on UCC financing statement to provide name that is sufficient under UCC Article 9 amendments at time continuation statement is filed. Continuation statements must be filed within 6-month period prior to lapse of financing statement to be effective. Under current DFI practice, secured creditor must take these actions in a 2-step process. That is, first file amendment on UCC-3 to amend debtor s name, and second file continuation statement on UCC-3 within 6-month period. v. In other words, in Wisconsin, only one function can be accomplished by filing a UCC-3, and separate filings are necessary to amend debtor s name and to continue UCC financing statement. 7. According to Official Comment to these sections of UCC Article 9 amendments: a. Most significant transition problem raised by UCC Article 9 amendments arises from changes concerning name of debtor that must be provided for UCC financing statement to be sufficient. b. For example, assume name of individual debtor on UCC financing statement filed before July 1, 2013, is correct. However, beginning July 1, 2013, debtor s unexpired driver s license indicates a different legal name. Assume a search under different legal name on driver s license using filing 11

25 office s standard search logic would not disclose filed financing statement using prior name. Filing therefore would be insufficient. Section (2), (3). c. However, UCC Article 9 amendments provide that amendments do not render financing statement ineffective. Section (2). Instead, financing statement remains effective until it would have ceased to be effective had UCC Article 9 amendments not taken effect. Section (2)(a). d. In this example, secured party can continue effectiveness of UCC financing statement by filing continuation statement in Wisconsin. However, to do so, secured party must first amend debtor s name on UCC financing statement to provide that name which is sufficient under UCC Article 9 amendments at time continuation statement is filed. Section (3), (5). K. Some Suggested Search Procedures. Obtain copy of debtor s driver s license issued by state of debtor s principal residence. Use name on driver s license as primary name to search if debtor s primary residence state adopted Alternative A. Even in Alternative B states, best to search against debtor s name on driver s license because it is a safe harbor name for filing purposes in those states. 2. But best to also search under other names: a. Name by which individual otherwise is generally known; and b. Surname, first name. c. It is prudent for secured creditors to conduct UCC searches not only on driver s license name but also on name variations. 3. Caution: UCC filing pre-dating July 1, 2013, could have priority over later UCC filing even though prior UCC filing was not filed on current driver s license name. 4. Ask individual if he or she changed name on driver s license during past 5 years. If so, also search on that other name. WBA forms. 5. DFI s search logic appears to be exact name computer search logic which means that UCC financing statement will be discovered in search only if it used correct debtor legal name for filings made prior to July 1, 2013, and correct debtor name on driver s license for filings made on or after July 1,

26 6. Search for IRS liens. They do not have to follow new rule requiring use of debtor s name on driver s license. 7. Others. L. Suggested Due Diligence and Steps For UCC Filing-type Collateral Pledged By Individuals To Help Insure Sufficient UCC Filings And Priority. 1. Request individual pledgor of UCC filing type collateral to provide his or her current driver s license (or state identification card, if applicable) in each instance below. a. Preparing new loan documents. b. Preparing amendments to existing documents, including loan renewal. c. Continuation of existing UCC filing. d. After notification that license has been renewed. e. After knowledge of name change event (e.g., marriage, divorce, religious name change, citizenship name change). 2. Examine driver s license to determine if it has expired or is about to expire. 3. Obtain copy of driver s license (or state identification card, if applicable) and provide that copy to person preparing UCC fmancing statements. a. If banker who reviews driver s license is one involved in filing UCC financing statements, best to record name on driver s license as carefully as possible, but if others in bank are actually doing preparation of UCC fmancing statements, best to provide those persons with copy of driver s license. b. Do not under any circumstance retain copy of driver s license/identification card in applicant s credit or loan file. Is a fair lending concern. c. WBA forms. 4. File on exact name indicated on driver s license (or state identification card, if applicable). 5. Name on driver s license IS required name for filing, even if driver s license name has typographical mistake. Best practice: File on driver s license name but when name individual is other known by is different, consider also filing on that name in second name box when filing original UCC financing statement. 13

27 6. Make sure to correctly transfer debtor s name components from driver s license to correct name fields on UCC financing statement. Any error may result in ineffective UCC filing. a. Driver s license does not identify a name s components. For example, driver s license name is Wayne Thomas. Which is last name and which is first name? b. May be difficult to determine appropriate order when more than one name component is required in debtor name field on UCC financing statement. For example, driver s license indicates name is Mary Ann Knight. Is first name Mary or Mary Ann? c. Hyphenated names can also be difficult. For example, should last name field on UCC financing statement include just last component of name or last two components if they are hyphenated? d. If there are multiple combinations of name components that might be correct for name on driver s license best to provide those variations as separate debtors on UCC financing statement. e. Secured creditor may need to file UCC financing statements on several name variations if there is any uncertainty regarding how to correctly extract debtor s name from driver s license. 7. If no driver s license (or state identification card) exists, file on last name (surname) and first name of individual for all variations of person s name. Make sure to examine other sources of name of individual such as birth certificate, passport, military ID and/or social security card and file on all name variations including name which person is otherwise known by. 8. For UCC filings before July 1, 2013, on correct name of individual pledgors, NO NEED TO DO ANYTHING UNDER THE NEW LAW unless following occurs (after July 1, 2013): a. Affirmative name change. If individual debtor affirmatively changes their name (e.g., marriage, divorce, religious name change, citizenship name change) lender MUST discover change and possibly take action WITHIN 4 MONTHS OF NAME CHANGE (timing is crucial!). Steps to take: i. Obtain copy of debtor s current unexpired driver s license from state of principal residence. ii. Compare name on current unexpired driver s license to name on existing pre-july 1, 2013, UCC filing. 14

28 (1) Example: 2012 filing on Jane A. Smith Jane gets married and legally assumes name Jane Ley. She also changes her name on her driver s license to Jane Ley. Filing will have to be amended within 4 months to add the new name on her driver s license. iii. If name is exactly same, NO NEED TO AMEND UCC FILING, EVEN IF DEBTOR STATES THEIR LEGAL NAME HAS BEEN CHANGED on marriage license, social security card or passport. (1) Example: 2012 filing on Jane A. Smith Jane gets married and legally assumes name Jane Ley. That is an affirmative name change, but if her driver s license currently reads Jane A. Smith, 2012 filing on Jane A. Smith should NOT be amended to Jane Ley. However, filing will have to be amended if Jane later changes her driver s license to Jane Ley. (2) Best practice: If name on current driver s license does not match with what individual claims their name to be or what it will become, may be best to also file second UCC filing in that alternative name. iv. However, if name on license is not same as pre-july 1, 2013, UCC filing, lender MUST amend filing WITHIN 4 MONTHS OF NAME CHANGE. This is a very unique occurrence that might affect UCC filings existing before July 1, (1) Example: 2012 filing on Jane A. Smith Jane gets married and legally assumes name Jane Ley. That is an affirmative name change, BUT even though she did not amend her driver s license to her new married name, if Jane s driver s license read Jane Ann Smith, 2012 filing in name of Jane A. Smith should be amended to Jane Ann Smith WITHIN 4 MONTHS OF THE NAME CHANGE. v. If debtor affirmatively changes their name (e.g., marriage, divorce, religious name change), individual debtor does NOT have an unexpired driver s license or state identification card, and existing filing was on individual name, then file amendment using new name WITHIN 4 MONTHS OF NAME CHANGE. (1) Example: 2012 filing on Jane A. Smith. 2014, Jane gets married, assumes name Jane Ley, but does not have an unexpired license or state identification card. WITHIN 4 15

29 MONTHS OF MARRIAGE, lender must amend 2012 UCC filing to new name of Jane Ley. vi. vii. viii. RISK: LOSS OF PERFECTION IN AFTER-ACQUIRED FILING-TYPE COLLATERAL. Official Comments 2(d) to 9-503: If there is any doubt about an individual debtor s name, a secured party may choose to file one or more financing statements that provide a number of possible names for the debtor, and a searcher may similarly choose to search a number of possible names. State identification card name change (if no driver s license and the state provides a state identification card). Same rules as driver s license change above. b. Individual moves to another state. i. Lender MUST discover move and file new UCC financing statement WITHIN 4 MONTHS OF MOVE (timing is crucial!) IN NEW STATE! RISK: LOSS OF PERFECTION IN ALL FILING-TYPE COLLATERAL ii. UCC filing will be on name as shown on newly issued driver s license of new state (of if no license, new state identification card). If license or state identification card is not yet issued, file on correct individual name or surname/first name but lender MUST follow up to timely check name on driver s license (or state identification card) if or when issued. c. Individual changes sole proprietorship to legal entity. i. Lender MUST discover name, enter into new loan documents with new entity and file new UCC financing statement on new entity within: (1) 4 MONTHS OF CHANGE (timing is crucial!) if new entity is located in the same filing jurisdiction. RISK: LOSS OF PERFECTION IN NEW FILING-TYPE COLLATERAL ACQUIRED AFTER 4 MONTHS; OR (2) 1 YEAR OF CHANGE (timing is crucial) if new entity is located in different filing jurisdiction. RISK: LOSS OF PERFECTION IN ALL FILING-TYPE COLLATERAL. d. 5 Year Continuation Date. If UCC filing is continued on or after July 1, 2013, name MUST be amended to driver s license name (or if no license, 16

30 state identification card) AND THEN continued. RISK: LOSS OF PERFECTION IN ALL FILING-TYPE COLLATERAL. i. Lender MUST obtain copy of debtor s unexpired driver s license (or if no license, state identification card). ii. iii. Compare driver s license name (or state identification card name) against existing filing and determine if name must be amended. If no unexpired driver s license or state identification card, make sure existing UCC filing has correct individual name or surname/first name. 9. For new UCC filings after July 1, 2013, compare name on driver s license (and any subsequent renewal of driver s license) with name on UCC filing(s) and make sure an exact match. Amend UCC filing upon: a. Affirmative name change of individual BUT ONLY when name on driver s license also changes. b. Renewal of driver s license to different name however slight the difference (e.g., name on driver s license of John A. Smith is renewed as John Adam Smith). c. Expiration of driver s license (with no renewal within 4 months) and correct name of individual is different than that on former driver s license. 10. Individual debtor produces multiple driver s licenses from same state file on name of most current unexpired driver s license. CAUTION: if debtor moves to another state, lender should check with debtor regarding current unexpired driver s license from debtor s new state of principal residence if collateral subject to UCC financing statement includes after-acquired property. This may cause a name change and filing in new state. 11. What if change in name is only a change in middle initial or middle name or change from middle initial to full middle name? Answer will depend on state s official search logic. Determine filing state s official search logic or if not determined then amend the filing. 12. After closing, request copy of driver s license at least annually. If name on driver s license, upon renewal or amendment to driver s license, has changed in any way, file UCC amendment on new name within 4 months of change. WBA forms. 13. If driver s license is not renewed, request copy of any subsequently issued state identification card. If name is different from that which was on prior driver s license, file UCC amendment within 4 months of change. If no state 17

31 identification card has been issued after expiration of driver s license, file on last name (surname) and first name of individual for all variations of person s name. Make sure to examine other sources of name of individual such as birth certificate, passport, military ID andlor social security card and file on all name variations including name which person is otherwise known by. 14. Set up internal tickler system to monitor expiration dates on driver s license for individual pledgors of UCC filing type collateral and obtain copy of any renewed license. 15. When determining name of trust, be sure to look at title page for trust look to internal provisions of trust document which may state formal name for trust. 16. Others. F:\OOCS\WD\2O511OA DOCX 18

32 education WBA Focused on Wisconsin bankers UCC Article 9 Filing and Perfection Amendments Phone Seminar April 4, 2013 Attorney Information: 9:00 11:00 a.m. CT Name: Address: City: State: Zip Code: Daytime Phone: TO BE COMPLETED BY ATTORNEY: By signing below, I certify that I participated in the WBA An Update on UCC Article 9 Filing and Perfection Amendments and am entitled to claim the CLE credit hours that are approved. Attorney Signature Date Attorney Name (Printed) PLEASE FAX TO: 608/ ATTENTION: Jodi Zieske OR MAIL TO: WISCONSIN BANKERS ASSOCIATION 4721 South Biltmore Lane Madison, WI Attn: Jodi Zieske

33 WBA AN UPDATE ON UCC ARTICLE 9 PHONE SEMINAR April 4, 2013 Thank you for attending WBA s An Update on UCC Article 9 Filing and Perfection Amendments Phone Seminar. 1. Overall rating of the program? A - Excellent B - Very Good C - Good D - Fair E - Poor Comments 2. How well did the speakers present the material in understandable form? A - Excellent B - Very Good C - Good D - Fair E - Poor Comments 3. How well were your questions answered? A - Excellent B - Very Good C - Good D - Fair E - Poor Comments 4. Will the handout serve as a useful reference tool? Yes No 5. How many people participated at your site? 6. What additional questions would you like to have answered in upcoming programs? Additional Comments: Wisconsin Bankers Association 1

34 Please Send Me More Information on the Following: WBA Agricultural Bankers Conference April 16-17, Madison FDIC Bankers College April 17, Madison; April 23, Stevens Point WBA Bank Operations School May 23-25, Wisconsin Dells WBA Insurance Continuing Education May 2, Madison WBA Women in Banking Conference May 7, Wisconsin Dells WBA IT Risk Management Seminar, May 8, Wisconsin Dells WBA Capital Day May 14, Madison WBA Branch Management School May 15-17, Wisconsin Dells WBA BSA/AML Conference May 20-22, Wisconsin Dells WBA Compliance Officer School May 20-22, Wisconsin Dells WBA Security and Financial Crimes Conference June 4, Wisconsin Dells WBA Business Continuity Planning Seminar June 5, Wisconsin Dells WBA Compliance Forum June 11, Wausau; June 12, Wisconsin Dells; June 13, Milwaukee WBA Operational and Interest Rate Risk Management Seminar, June 25, Wisconsin Dells WBA Credit Administration and Rate Risk Management Seminar, June 26, Wisconsin Dells WBA Human Resource Conference June 27, Stevens Point NAME: BANK: ADDRESS: CITY, STATE, ZIP CODE: TELEPHONE: FAX: I would like to receive new program information and a monthly WBA training calendar via . Thank you for your feedback PLEASE FAX YOUR EVALUATION TO WBA AT Wisconsin Bankers Association 2