Commodity Account Control Agreement

(60) “original debtor”, except as used in paragraph (c) of article 9310, means a person who, as a debtor, has entered into a precautionary arrangement to which a new debtor is bound in accordance with article 9203, subsection (d). (4) `accounting`, with the exception of what is used in the heading `Accounting`, means a record containing all of the following information: (1) The secured party is the bank with which the deposit account is held. A secured party has control of a credit right to the extent of a right to payment or enforcement by the issuer or a designated person if the issuer or designated person has consented to an assignment of the proceeds of the letter of credit in accordance with paragraph (c) of Section 5114 or otherwise applicable law or practice. (9) `cash product` means a product that is money, cheques, deposit accounts or similar products. The borrower must enter into a commodity account control agreement for all commodity accounts held by the borrower and remit them to the lender. In short, a commodity accounting control agreement is more than just “words on paper.” It furthers the lender`s security in the account and ownership of the account, and equally importantly establishes the lender`s rights and obligations with respect to the account and ownership of the account to the broker. Given the importance of the control agreement, you should not rely on the assurance that it is a “standard form” that will not be negotiated. Instead, take the time to amend the two provisions discussed in this article. These small revisions could make all the difference in protecting you as a lender. (2) In the case of a consumer transaction, consumer goods, security, securities account or commodity account. B) Is traded on a foreign exchange, exchange or commodity market and is held in the books of a commodity intermediary for a commodity client. (B) Article 9404 shall apply to any objection or claim by an account debtor. Under Article 9 of the UCC, a commodity account and the assets held in that account are investment properties.

To complete its security right, a lender would have to take “control” of the account of the assets and assets of the account. Control of a commodity account and ownership of an account exists where the commodity broker has agreed in writing to follow the lender`s instructions regarding the transfer or removal of ownership of the account without the account holder`s consent. Therefore, in order to complete a security right in the commodity account and account ownership, the control contract must (1) be performed by the commodity broker, account holder and lender, (2) accurately describe the ownership of the account and account, and (3) contain a provision similar to the following: (61) `insignificant payment` means general intangible asset whereby the principal obligation of the account debtor is a monetary obligation. (A) § 9340 applies with regard to the validity of recovery or set-off rights with current accounts. (29) `deposit account` means an account receivable, term account, savings account, savings account or similar account held with a bank. The term does not include investment properties or accounts that are proven by an instrument. (c) [effect of control of the securities or commodities account.] (2) The debtor, the secured party and the bank have agreed in a certified protocol that the bank will comply with the instructions of the secured party ordering the disposition of the funds in the deposit account without further consent of the debtor. A person has control of a certified title, an uncertified title or a right to a security right under article 8(106).

(42) “Generally intangible” means all personal items, including those at issue, other than accounts, household effects, misnomers, deposit accounts, documents, property, instruments, investment property, letters of credit, money and oil, gas or other minerals prior to extraction. The term includes intangible payment goods and software. The prices of agricultural products fluctuate. A producer tries to mitigate this price risk by hedging. A lender seeks to mitigate the risks associated with lending money to the producer by assuming security on the hedge accounts of the producer`s products. The commodity broker provides the lender with a control agreement and says it is the “standard form” signed by all lenders. No changes are required. (C) where the guarantee is a transferred raw material contract with a raw material intermediary, compliance with the control requirement set out in point (b)(2) of Article 9-106 in respect of raw material contracts transferred or at the expense of the raw material intermediary. (59) `debtor` means a person who, in respect of an obligation secured by a security right in the security right or an agricultural lien in the guarantee, (i) owes payment or other performance of the obligation, (ii) has provided assets other than the security to secure payment or other performance of the obligation, or (iii) provides otherwise, in whole or in part, the payment or any other performance of the Commitment is responsible.

The term does not include issuers or designated persons in the context of a letter of credit. (C) The debtor, debtor, secured party, account debtor or other person, assignor or assignor of a secured obligation or assignor of a security right is a State or a State entity of a State. (69) `by virtue of the obligation` in respect of an advance made by a secured party or any other value given by that party means, in accordance with the obligation of the secured party, whether a subsequent event of default or any other event not under the control of the secured party has released or may release the secured party from its obligation. The term includes health insurance claims. The term does not include (i) payment entitlements proven by paper or movable instrument, (ii) tortious trade receivables, (iii) deposit accounts, (iv) investment property, (v) letters of credit or letters of credit, or (vi) claims for payment against money or funds advanced or sold, with the exception of rights arising from the use of a card or credit or lot information, which are included on or to be used with the card. (3) In the absence of agreement on an appropriate method and a timely expression of the debtor`s intention in the following order: (A) A person for whom a security right is established or provided for in a security agreement, whether or not an obligation to be secured is in progress […].