These Standard Clauses provide essential updates to security agreements in light of the 2022 amendments to the Uniform Commercial Code (UCC). With the integration of digital assets such as virtual currencies and digital tokens into collateral, these UCC amendments introduce new rules for the transfer of property rights in certain digital assets and modify Article 9 to address security interests in these assets. These Standard Clauses highlight the importance of understanding the collateral involved and discuss creation and perfection of security interests in electronic money, chattel paper, controllable accounts, controllable payment intangibles, and controllable electronic records. They also offer practical guidance for negotiating control agreements and ensuring priority in security interests. Defined terms and section references are aligned with the Standard Document, Security Agreement and this supplement emphasizes the need for customization based on the specific security agreement involved and the jurisdictional adoption of the amendments. These Standard Clauses have integrated notes with important explanations and drafting and negotiating tips.
LINKS
Read “Security Agreement: Supplement (2022 UCC Amendments),” co-authored by Arleen A. Nand, Hilary R. Sledge-Sarnor, Whitney A. Mark, Mary A. Scott, and Daniel Albarrán Garcia, published by Thomson Reuters. (subscription)