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     (1) Pre-July 2001 U.C.C. financing statements remain effective for various time periods depending on different circumstances. N.D.C.C. § 41-09-127 and § 41-09-128. If you are providing new financing, remember that in addition to searching the new filing location, you will need to search in all places you would have searched before Revised Article 9;

     (2) The borrower does not need to sign the financing statement except if it is to gain notice under the CNS (but if the CNS notice is filed electronically, no signature is required). By obtaining a security agreement, the secured party has authority to file a financing statement with the exact same collateral description given in the security agreement. If the secured party wants to file a financing statement before obtaining a signed security agreement or wants to file a financing statement containing something different from the collateral description in the security agreement, then the secured party needs a written authorization from the debtor to do so.

     (3) Revised Article 9 requires filing in the state of a debtor's organization, so get certified copies of the debtor's organizational documents from the Secretary of State so you can confirm the state and the exact name. You might also consider an agreement from the debtor that it will give you notice before the debtor changes its jurisdiction of organization.

     (4) Some states have fuzzy search logic that will find only those debtors with a name exactly as given to the searcher, so many pre-July 2001 filings that are still effective with a somewhat different name will not be included in a search covering only the debtor's legal name. For example, a pre-July 2001 filing with a debtor name and a "doing business as" trade name may not necessarily be included in a search of the debtor's name. The best practice is to search various combinations of names and a separate d/b/a name.

     Keep in mind that the filing of a continuation statement continuing the financing statement filed under former Article 9 is ineffective unless it so happens that the original financing statement was filed in the office which is the correct filing office under Revised Article 9. In other words, when it's time to file the continuation statement, check whether an "in lieu" filing should be made rather than the classic continuation statement.

     To continue the effectiveness of the financing statement filed under former Article 9 under Revised Article 9, a new "initial" financing statement must be filed in the appropriate filing office under Revised Article 9. N.D.C.C. §1 41-09-128. This new "initial"financing statement is filed in lieu of the continuation statement which would have been filed under former Article 9. Such "in lieu" initial financing statement must reference the financing statement filed and effective under former Article 9 - the filing date, number, filing office, continuation statement, if any - and state that the former Article 9 financing statement is effective (e.g. has not been terminated). The "in lieu" financing statement must be filed prior to the expiration of the normal five-year term of the initial financing statement filed under former Article 9. This "in lieu" filing may be done at any time prior to the expiration of the financing statement to be continued, or July 1, 2006, whichever is earlier.

Did You Know . . .

     A security interest in a deposit account as original collateral may be perfected under Revised Article 9 only by the secured party obtaining control over the deposit account. A secured party obtains control over a deposit account if the secured party is the depositary bank; the depositary bank's right of set-off is senior to a security interest perfected by control, unless the competing secured party is the depositary bank's customer - that is, unless the account is held in the name of the secured party rather than in the name of the debtor. N.D.C.C. § 41-09-04. A secured party also has control if the depositary bank enters into an agreement with the secured party that the depositary bank will comply with instructions from the secured party without further consent from the debtor. N.D.C.C. § 41-09-04(1).