/* The text of Article 6, Bulk Transfers of the UCC, follows. The Commissioners have suggested that the act be repealed. However, most states have retained the law. */

REPEALER OF ARTICLE 6, BULK TRANSFERS

AND

[REVISED] ARTICLE 6, BULK SALES

(STATES TO SELECT ONE ALTERNATIVE)

ALTERNATIVE A

Section

1. Repeal.

2. Amendment.

3. Amendment.

4. Savings Clause.

ALTERNATIVE B

6-101. Short Title.

6-102. Definitions and Index of Definitions.

6-103. Applicability of Article.

6-104. Obligations of Buyer.

6-105. Notice to Claimants.

6-106. Schedule of Distribution.

6-107. Liability for Noncompliance.

6-108. Bulk Sales by Auction; Bulk Sales Conducted by Liquidator.

6-109. What Constitutes Filing; Duties of Filing Officer;

Information From Filing Officer.

6-110. Limitation of Actions.

REPEALER OF ARTICLE 6

BULK TRANSFERS

AND

[REVISED] ARTICLE 6

BULK SALES

(STATES TO SELECT ONE ALTERNATIVE)

ALTERNATIVE A

1. Repeal.

Article 6 and Section 9-111 of the Uniform Commercial Code

are hereby repealed, effective ________.

2. Amendment.

Section 1-105(2) of the Uniform Commercial Code is hereby

amended to read as follows:

(2) Where one of the following provisions of this Act

specifies the applicable law, that provision governs and a

contrary agreement is effective only to the extent permitted by

the law (including the conflict of laws rules) so specified:

Rights of creditors against sold goods. Section 2-402.

Applicability of the Article on Leases. Sections 2A-105 and 2A-

106.

Applicability of the Article on Bank Deposits and Collections. Section 4-102.

Governing law in the Article on Funds Transfers. Section 4A-507.

Applicability of the Article on Investment Securities. Section 8-

106.

Perfection provisions of the Article on Secured Transactions.

Section 9-103.

3. Amendment

Section 2-403(4) of the Uniform Commercial Code is hereby

amended to read as follows:

(4) The rights of other purchasers of goods and of lien

creditors are governed by the Articles on Secured Transactions

(Article 9), and Documents of Title (Article 7).

4. Savings Clause

Rights and obligations that arose under Article 6 and

Section 9-11 of the Uniform Commercial Code before their repeal

remain valid and may be enforced as though those statutes bad not

been repealed.

ALTERNATIVE B

6-101. Short Title.

This Article shall be known and may be cited as Uniform

Commercial Code-Bulk Sales.

6-102. Definitions and Index of Definitions.

(1) In this Article, unless the context otherwise requires:

(a) "Assets" means the inventory that is the subject of a

bulk sale and any tangible and intangible personal property used

or held for use primarily in, or arising from, the seller's

business and sold in connection with that inventory, but the term

does not include:

(i) fixtures (Section 9-313(1)(a)) other than readily

removable factory and office machines;

(ii) the lessee's interest in a lease of real property; or

(iii) property to the extent it is generally exempt from creditor process under nonbankruptcy law.

(b) "Auctioneer" means a person whom the seller engages to

direct, conduct, control, or be responsible for a sale by

auction.

(c) "Bulk sale" means:

in the case of a sale by auction or a sale or series of

sales conducted by a liquidator on the seller's behalf, a sale or

series of sales not in the ordinary course of the seller's

business of more than half of the seller's inventory, as measured

by value on the date of the bulk-sale agreement, if on that date

the auctioneer or liquidator has notice, or after reasonable

inquiry would have had notice, that the seller will not continue

to operate the same or a similar kind of business after the sale

or series of sales; and

(ii) in all other cases, a sale not in the ordinary course

of the seller's business of more than half the seller's

inventory, as measured by value on the date of the bulk-sale

agreement, if on that date the buyer has notice, or after

reasonable inquiry would have had notice, that the seller will

not continue to operate the same or a similar kind of business

after the sale.

(d) "Claim" means a right to payment from the seller,

whether or not the right is reduced to judgment, liquidated,

fixed, matured, disputed, secured, legal, or equitable. The term

includes costs of collection and attorney's fees only to the

extent that the laws of this state permit the holder of the claim

to recover them in an action against the obligor.

(e) "Claimant" means a person holding a claim incurred in

the seller's business other than:

an unsecured and unmatured claim for employment compensation

and benefits, including commissions and vacation, severance, and

sick-leave pay;

(ii) a claim for injury to an individual or to property, or

for breach of warranty, unless:

(A) a right of action for the claim has accrued;

(B) the claim has been asserted against the seller; and

(C) the seller knows the identity of the person asserting

the claim and the basis upon which the person has asserted it;

and

(States To Select One Alternative)

Alternative A

[(iii) a claim for taxes owing to a governmental unit.]

Alternative B

[(iii) a claim for taxes owing to a governmental unit, if:

(A) a statute governing the enforcement of the claim

permits or requires notice of the bulk sale to be given to the

governmental unit in a manner other than by compliance with the

requirements of this Article; and

(B) notice is given in accordance with the statute.]

(f) "Creditor" means a claimant or other person holding a

claim.

(g) (i) "Date of the bulk sale" means:

(A) if the sale is by auction or is conducted by a

liquidator on the seller's behalf, the date on which more than

ten percent of the net proceeds is paid to or for the benefit of

the seller; and

(B) in all other cases, the later of the date on which:

(I) more than ten percent of the net contract price is paid

to or for the benefit of the seller; or

(II) more than ten percent of the assets, as measured by

value, are transferred to the buyer.

(ii) For purposes of this subsection:

(A) Delivery of a negotiable instrument (Section 3-104(1))

to or for the benefit of the seller in exchange for assets

constitutes payment of the contract price pro tanto;

(B) To the extent that the contract price is deposited in

an escrow, the contract price is paid to or for the benefit of

the seller when the seller acquires the unconditional right to

receive the deposit or when the deposit is delivered to the

seller or for the benefit of the seller, whichever is earlier;

and

(C) An asset is transferred when a person holding an

unsecured claim can no longer obtain through judicial proceedings

rights to the asset that are superior to those of the buyer

arising as a result of the bulk sale. A person holding an

unsecured claim can obtain those superior rights to a tangible

asset at least until the buyer has an unconditional right, under

the bulk-sale agreement, to possess the asset, and a person

holding an unsecured claim can obtain those superior rights to an

intangible asset at least until the buyer has an unconditional

right, under the bulk-sale agreement to use the asset.

(h) "Date of the bulk-sale agreement" means:

(i) in the case of a sale by auction or conducted by a

liquidator (subsection (c)(i)), the date on which the seller

engages the auctioneer or liquidator; and

(ii) in all other cases, the date on which a bulk-sale

agreement becomes enforceable between the buyer and the seller.

(i) "Debt" means liability on a claim.

(j) "Liquidator" means a person who is regularly engaged in

the business of disposing of assets for businesses contemplating

liquidation or dissolution.

(k) "Net contract price" means the new consideration the

buyer is obligated to pay for the assets less:

(i) the amount of any proceeds of the sale of an asset, to

the extent the proceeds are applied in partial or total

satisfaction of a debt secured by the asset; and

(ii) the amount of any debt to the extent it is secured by a

security interest or lien that is enforceable against the asset

before and after it has been sold to a buyer. If a debt is

secured by an asset and other property of the seller, the amount

of the debt secured by a security interest or lien that is

enforceable against the asset is determined by multiplying the

debt by a fraction, the numerator of which is the value of the

new consideration for the asset on the date of the bulk sale and

the denominator of which is the value of all property securing

the debt on the date of the bulk sale.

(l) "Net proceeds" means the new consideration received for

assets sold at a sale by auction or a sale conducted by a

liquidator on the seller's behalf less:

(i) commissions and reasonable expenses of the sale;

(ii) the amount of any proceeds of the sale of an asset, to

the extent the proceeds are applied in partial or total

satisfaction of a debt secured by the asset; and

(iii) the amount of any debt to the extent it is secured by

a security interest or lien that is enforceable against the asset

before and after it has been sold to a buyer. If a debt is

secured by an asset and other property of the seller, the amount

of the debt secured by a security interest or lien that is

enforceable against the asset is determined by multiplying the

debt by a fraction, the numerator of which is the value of the

new consideration for the asset on the date of the bulk sale and

the denominator of which is the value of all property securing

the debt on the date of the bulk sale.

(m) A sale is "in the ordinary course of the seller's

business" if the sale comports with usual or customary practices

in the kind of business in which the Seller is engaged or with

the seller's own usual or customary practices.

(n) "United States" includes its territories and

Possessions and the Common wealth of Puerto Rico.

(o) "Value" means fair market value.

(p) "Verified" means signed and sworn to or affirmed.

(2) The following definitions in other Articles apply to

this Article:

(a) "Buyer." Section 2-103(l)(a).

(b) "Equipment" Section 9-109(2).

(c) "Inventory." Section 9-109(4).

(d) "Sale." Section 2-106(1).

(e) "Seller." Section 2-103(1)(d).

(3) In addition, Article 1 contains general definitions and

principles of construction and interpretation applicable

throughout this Article.

6-103. Applicability of Article.

(1) Except as otherwise provided in subsection (3), this

Article applies to a bulk sale if:

(a) the seller's principal business is the sale of inventory from stock; and

(b) on the date of the bulk-sale agreement the seller is located in this state or, if the seller is located in a jurisdiction that is not a part of the United States, the seller's major executive office in the United States is in this state.

(2) A seller is deemed to be located at his [or her] place

of business. If a seller has more than one place of business, the

seller is deemed located at his [or her] chief executive office.

(3) This Article does not apply to:

(a) a transfer made to secure payment or performance of an

obligation;

(b) a transfer of collateral to a secured party pursuant

to Section 9-503;

(c) a sale of collateral pursuant to Section 9-504;

(d) retention of collateral pursuant to Section 9-505;

(e) a sale of an asset encumbered by a security interest or lien if (i) all the proceeds of the sale are applied in partial or total satisfaction of the debt secured by the security interest or lien or (ii) the security interest or lien is enforceable against the asset after it has been sold to the buyer and the net contract price is zero;

(f) a general assignment for the benefit of creditors or to a subsequent transfer by the assignee;

(g) a sale by an executor, administrator, receiver, trustee in bankruptcy, or any public officer under judicial process.

(h) a sale made in the course of judicial or administrative

proceedings for the dissolution or reorganization of an

organization;

(i) a sale to a buyer whose principal place of business is in the United States and who:

(i) not earlier than 21 days before the date of the bulk sale,

(A) obtains from the seller a verified and dated list of

claimants of whom the seller has notice three days before the

seller sends or delivers the list to the buyer or

(B) conducts a reasonable inquiry to discover the claimants;

(ii) assumes in full the debts owed to claimants of whom the

buyer has knowledge on the date the buyer receives the list of

claimants from the seller or on the date the buyer completes the

reasonable inquiry, as the case may be;

(iii) is not insolvent after the assumption; and

(iv) gives written notice of the assumption not later than

30 days after the date of the bulk sale by sending or delivering

a notice to the claimants identified in subparagraph (ii) or by

filing a notice in the office of the [Secretary of State];

(j) a sale to a buyer whose principal place of business is in the United States and who:

(i) assumes in full the debts that were incurred in the seller's business before the date of the bulk sale;

(ii) is not insolvent after the assumption; and

(iii) gives written notice of the assumption not later than

30 days after the date of the bulk sale by sending or delivering

a notice to each creditor whose debt is assumed or by filing a

notice in the office of the [Secretary of State];

(k) a sale to a new organization that is organized to take over and continue the business of the seller and that has its

principal place of business in the United States if:

(i) the buyer assumes in full the debts that were incurred

in the seller's business before the date of the bulk sale;

(ii) the seller receives nothing from the sale except an

interest in the new organization that is subordinate to the

claims against the organization arising from the assumption; and

(iii) the buyer gives written notice of the assumption not

later than 30 days after the date of the bulk sale by sending or

delivering a notice to each creditor whose debt is assumed or by

filing a notice in the office of the [Secretary of State];

(l) a sale of assets having:

(i) a value, net of liens and security interests, of less than $10,000. If a debt is secured by assets and other property of the seller, the net value of the assets is determined by subtracting from their value an amount equal to the product of the debt multiplied by a fraction, the numerator of which is the value of the assets on the date of the bulk sale and the denominator of which is the value of all property securing the debt on the date of the bulk sale; or

(ii) a value of more than $25,000,000 on the date of the

bulk-sale agreement; or

(m) a sale required by, and made pursuant to, statute.

(4) The notice under subsection (3)(i)(iv) must state: (i)

that a sale that may constitute a bulk sale has been or will be

made; (ii) the date or prospective date of the bulk sale; (iii)

the individual, partnership, or corporate names and the addresses

of the seller and buyer; (iv) the address to which inquiries

about the sale may be made, if different from the seller's

address; and (v) that the buyer has assumed or will assume in

full the debts owed to claimants of whom the buyer has knowledge

on the date the buyer receives the list of claimants from the

seller or completes a reasonable inquiry to discover the

claimants.

(5) The notice under subsections (3)(j)(iii) and

(3)(k)(iii) must state: (i) that a sale that may constitute a

bulk sale has been or will be made; (ii) the date or prospective

date of the bulk sale; (iii) the individual, partnership, or

corporate names and the addresses of the seller and buyer; (iv)

the address to which inquiries about the sale may be made, if

different from the seller's address; and (v) that the buyer has

assumed or will assume the debts that were incurred in the

seller's business before the date of the bulk sale.

(6) For purposes of subsection (3)(l), the value of assets

is presumed to be equal to the price the buyer agrees to pay for

the assets. However, in a sale by auction or a sale conducted by

a liquidator on the seller's behalf, the value of assets is

presumed to be the amount the auctioneer or liquidator reasonably

estimates the assets will bring at auction or upon liquidation.

6-l04. Obligations of Buyer.

(1) In a bulk sale as defined in Section 6-102(l)(c)(ii)

the buyer shall:

(a) obtain from the seller a list of all business names and

addresses used by the seller within three years before the date

the list is sent or delivered to the buyer;

(b) unless excused under subsection (2), obtain from the

seller a verified and dated list of claimants of whom the seller

has notice three days before the seller sends or delivers the

list to the buyer and including, to the extent known by the

seller, the address of and the amount claimed by each claimant;

(c) obtain from the seller or prepare a schedule of

distribution (Section 6106(1));

(d) give notice of the bulk sale in accordance with Section

6-105;

(e) unless excused under Section 6-106(4), distribute the

net contract price in accordance with the undertakings of the

buyer in the schedule of distribution; and

(f) unless excused under subsection (2), make available the

list of claimants (subsection (1)(b)) by:

(i) promptly sending or delivering a copy of the list

without charge to any claimant whose written request is received

by the buyer no later than six months after the date of the bulk

sale;

(ii) permitting any claimant to inspect and copy the list at

any reasonable hour upon request received by the buyer no later

than six months after the date of the bulk sale; or

(iii) filing a copy of the list in the office of the

[Secretary of State] no later than the time for giving a notice

of the bulk sale (Section 6-105(5)). A list filed in accordance

with this subparagraph must state the individual, partnership, or

corporate name and a mailing address of the seller.

(2) A buyer who gives notice in accordance with Section 6-

105(2) is excused from complying with the requirements of

subsections (1)(b) and (1)(f).

6-105. Notice to Claimants.

(1) Except as otherwise provided in subsection (2), to

comply with Section 6- 104(1)(d), the buyer shall send or deliver

a written notice of the bulk sale to each claimant on the list of

claimants (Section 6-104(1)(b)) and to any other claimant of whom

the buyer has knowledge at the time the notice of the bulk sale

is sent or delivered.

(2) A buyer may comply with Section 6-104(1 )(d) by filing

a written notice of the bulk sale In the office of the [Secretary

of State] if:

(a) on the date of the bulk-sale agreement the seller has

200 or more claimants, exclusive of claimants holding secured or

matured claims for employment compensation and benefits,

including commissions and vacation, severance, and sick leave

pay; or

(b) the buyer has received a verified statement from the

seller stating that, as of the date of the bulk-sale agreement,

the number of claimants, exclusive of claimants holding secured

or matured claims for employment compensation and benefits,

including commissions and vacation, severance, and sick-leave

pay, is 200 or more.

(3) The written notice of the bulk sale must be accompanied

by a copy of the schedule of distribution (Section 6-106(1)) and

state at least:

(a) that the seller and buyer have entered into an

agreement for a sale that may constitute a bulk sale under the

laws of the State of

(b) the date of the agreement;

(c) the date on or after which more than ten percent of the

assets were or will be transferred;

(d) the date on or after which more than ten percent of the

net contract price was or will be paid, if the date is not stated

in the schedule of distribution;

(e) the name and a mailing address of the seller;

any other business name and address listed by the seller

pursuant to Section 6-104(1)(a);

(g) the name of the buyer and an address of the buyer from

which information concerning the sale can be obtained;

(h) a statement indicating the type of assets or describing the assets item by item

(i) the manner in which the buyer will make available the

list of claimants (Section 6-104(1)(f)), if applicable; and

(j) if the sale is in total or partial satisfaction of an

antecedent debt owed by the seller, the amount of the debt to be

satisfied and the name of the person to whom it is owed.

(4) For purposes of subsections (3)(e) and (3)(g), the name

of a person is the person's individual, partnership, or corporate

name.

(5) The buyer shall give notice of the bulk sale not less

than 45 days before the date of the bulk sale and, if the buyer

gives notice in accordance with subsection (1), not more than 30

days after obtaining the list of claimants.

(6) A written notice substantially complying with the

requirements of subsection (3) is effective even though it contains minor errors that are not seriously misleading.

(7) A form substantially as follows is sufficient to comply with subsection (3):

Notice of Sale

(1) _______, whose address is _______, is described in this

notice as the "seller."

(2) ________, whose address is ________, is described in

this notice as the "buyer."

(3) The seller has disclosed to the buyer that within the

past three years the seller has used other business names, operated at other addresses, or both, as follows:____________.

(4) The seller and the buyer have entered into an agreement

dated ________, for a sale that may constitute a bulk sale under the laws of the state of ________.

(5) The date on or after which more than ten percent of the

assets that are the subject of the sale were or will be

transferred is ________, and [if not stated in the schedule of

distribution] the date on or after which more than ten percent of

the net contract price was or will be paid is ________.

(6) The following assets are the subject of the sale:

________.

(7) [If applicable] The buyer will make available to

claimants of the seller a list of the seller's claimants in the

following manner: ________.

(8) [If applicable] The sale is to satisfy $_______ of an

antecedent debt owed by the seller to ________.

(9) A copy of the schedule of distribution of the net

contract price accompanies this notice.

[End of Notice]

6-106. Schedule of Distribution.

(1) The seller and buyer shall agree on how the net

contract price is to be distributed and set forth their agreement

in a written schedule of distribution.

(2) The schedule of distribution may provide for

distribution to any person at any time, including distribution of the entire net contract price to the seller.

(3) The buyer's undertakings in the schedule of

distribution run only to the seller. However, a buyer who fails

to distribute the net contract price in accordance with the

buyer's undertakings in the schedule of distribution is liable to

a creditor only as provided in Section 6-107(1).

(4) If the buyer undertakes in the schedule of distribution

to distribute any part of the net, contract price to a person

other than the seller, and, after the buyer has given notice, in accordance with Section 6-105, some or all of the anticipated net contract price is or becomes unavailable for distribution as a consequence of the buyer's or seller's having complied with an order of court, legal process, statute, or rule of law, the buyer is excused from any obligation arising under this Article or under any contract with the seller to distribute the net contract price in accordance with the buyer's undertakings in the schedule if the buyer:

(a) distributes the net contract price remaining available

in accordance with any priorities for payment stated in the

schedule of distribution and, to the extent that the price is

insufficient to pay all the debts having a given priority,

distributes the price pro rata among those debts shown in the

schedule as having the same priority;

(b) distributes the net contract price remaining available

in accordance with an order of court;

(c) commences a proceeding for interpleader in a court of

competent jurisdiction and is discharged from the proceeding; or

(d) reaches a new agreement with the seller for the

distribution of the net contract price remaining available, sets

forth the new agreement in an amended schedule of distribution,

gives notice of the amended schedule, and distributes the net

contract price remaining available in accordance with the buyer's

undertakings in the amended schedule.

(5) The notice under subsection (4)(d) must identify the

buyer and the seller, state the filing number, if any, of the

original notice, set forth the amended schedule, and be given In

accordance with subsection (1) or (2) of Section 6-105, whichever

is applicable, at least 14 days before the buyer distributes any

part of the net contract price remaining available.

(6) If the seller undertakes in the schedule of

distribution to distribute any part of the net contract price,

and, after the buyer has given notice in accordance with Section

6-105, some or all of the anticipated net contract price is or

becomes unavailable for distribution as a consequence of the

buyer's or seller's having complied with an order of court, legal

process, statute, or rule of law, the seller and any person in

control of the seller are excused from any obligation arising

under this Article or under any agreement with the buyer to

distribute the net contract price in accordance with the seller's

undertakings in the schedule if the seller:

(a) distributes the net contract price remaining available

in accordance with any priorities for payment stated in the

schedule of distribution and, to the extent that the price is

insufficient to pay all the debts having a given priority,

distributes the price pro rata among those debts shown in the

schedule as having the same priority;

(b) distributes the net contract price remaining available

in accordance with an order of court;

(c) commences a proceeding for interpleader in a court of

competent jurisdiction and is discharged from the proceeding; or

(d) prepares a written amended schedule of distribution of

the net contract price remaining available for distribution,

gives notice of the amended schedule, and distributes the net

contract price remaining available in accordance with the amended

schedule.

(7) The notice under subsection (6)(d) must identify the

buyer and the seller, state the filing number, if any, of the

original notice, set forth the amended schedule, and be given in

accordance with subsection (1) or (2) of Section 6-105, whichever

is applicable, at least 14 days before the seller distributes any

part of the net contract price remaining available.

6-107. Liability for Noncompliance.

(1) Except as provided in subsection (3), and subject to

the limitation in subsection (4):

(a) a buyer who fails to comply with the requirements of

Section 6-104(1)(e) with respect to a creditor is liable to the

creditor for damages in the amount of the claim, reduced by any

amount that the creditor would not have realized if the buyer had

complied; and

(b) a buyer who fails to comply with the requirements of any other subsection of Section 6-104 with respect to a claimant is liable to the claimant for damages in the amount of the claim,

reduced by any amount that the claimant would not have realized

if the buyer had complied.

(2) In an action under subsection (1), the creditor has the

burden of establishing the validity and amount of the claim, and

the buyer has the burden of establishing the amount that the

creditor would not have realized if the buyer had complied.

(3) A buyer who:

(a) made a good faith and commercially reasonable effort to

comply with the requirements of Section 6-104(1) or to exclude

the sale from the application of this Article under Section 6-

103(3); or

(b) on or after the date of the bulk-sale agreement, but before the date of the bulk sale, held a good faith and commercially reasonable belief that this Article does not apply to the particular sale is not liable to creditors for failure to comply with the requirements of Section 6-104. The buyer has the burden of establishing the good faith and commercial reasonableness of the effort or belief.

(4) In a single bulk sale the cumulative liability of the

buyer for failure to comply with the requirements of Section 6-

104(1) may not exceed an amount equal to:

(a) if the assets consist only of inventory and equipment,

twice the net contract price, less the amount of any part of the

net contract price paid to or applied for the benefit of the

seller or a creditor; or

(b) if the assets include property other than inventory and

equipment, twice the net value of the inventory and equipment

less the amount of the portion of any part of the net contract

price paid to or applied for the benefit of the seller or a

creditor which is allocable to the inventory and equipment.

(5) For the purposes of subsection (4)(b), the "net value"

of an asset is the value of the asset less (i) the amount of any

proceeds of the sale of an asset, to the extent the proceeds are

applied in partial or total satisfaction of a debt secured by the

asset and (ii) the amount of any debt to the extent it is secured

by a security interest or lien that is enforceable against the

asset before and after it has been sold to a buyer. If a debt is

secured by an asset and other property of the seller, the amount

of the debt secured by a security interest or lien that is

enforceable against the asset is determined by multiplying the

debt by a fraction, the numerator of which is the value of the

asset on the date of the bulk sale and the denominator of which

is the value of all property securing the debt on the date of the

bulk sale. The portion of a part of the net contract price paid

to or applied for the benefit of the seller or a creditor

that is "allocable to the Inventory and equipment" is the portion that bears the same ratio to that part of the net contract price as the net value of the inventory and equipment bears to the net

value of all of the assets.

(6) A payment made by the buyer to a person to whom the

buyer is, or believes he [or she] is, liable under subsection (1)

reduces pro tanto the buyer's cumulative liability under

subsection (4).

(7) No action may be brought under subsection (1)(b) by or

on behalf of a claimant whose claim is unliquidated or

contingent.

(8) A buyer's failure to comply with the requirements of

Section 6-104(1) does not (i) impair the buyer's rights In or

title to the assets, (ii) render the sale ineffective, void, or

voidable, (iii) entitle a creditor to more than a single

satisfaction of his [or her] claim, or (iv) create liability

other than as provided in this Article.

(9) Payment of the buyer's liability under subsection (1)

discharges pro tanto the seller's debt to the creditor.

(10) Unless otherwise agreed, a buyer has an immediate right

of reimbursement from the seller for any amount paid to a

creditor in partial or total satisfaction of the buyer's

liability under subsection (11) If the seller is an organization, a person who is in direct or indirect control of the seller, and who knowingly, intentionally, and without legal justification fails, or causes the seller to fail, to distribute the net contract price in accordance with the schedule of distribution is liable to any creditor to whom the seller undertook to make payment under the schedule for damages caused by the failure.

6-108. Bulk Sales by Auction; Bulk Sales Conducted by

Liquidator

(1) Sections 6-104, 6-105, 6-106, and 6-107 apply to a bulk

sale by auction and a bulk sale conducted by a liquidator on the

seller's behalf with the following modifications:

(a) "buyer" refers to auctioneer or liquidator, as the case may be;

(b) " net contract price" refers to net proceeds of the auction or net proceeds of the sale, as the case may be;

(c) the written notice required under Section 6-105(3) must

be accompanied by a copy of the schedule of distribution (Section

6-106(1)) and state at least:

(i) that the seller and the auctioneer or liquidator have

entered into an agreement for auction or liquidation services

that may constitute an agreement to make a bulk sale under the

laws of the State of _______.

(ii) the date of the agreement.

(iii) the date on or after which the auction began or will

begin or the date on or after which the liquidator began or will

begin to sell assets on the seller's behalf;

(iv) the date on or after which more than ten percent of the

net proceeds of the sale were or will be paid, if the date is not stated in the schedule of distribution;

(v) the name and a mailing address of the seller;

(vi) any other business name and address listed by the

seller pursuant to Section 6-1O4(1)(a);

(vii) the name of the auctioneer or liquidator and an

address of the auctioneer or liquidator from which information

concerning the sale can be obtained;

(viii) a statement indicating the type of assets or

describing the assets item by item;

(ix) the manner in which the auctioneer or liquidator will

make available the list of claimants (Section 6-104(1)(f)), if

applicable; and

(x) if the sale is in total or partial satisfaction of an

antecedent debt owed by the seller, the amount of the debt to be

satisfied and the name of the person to whom it is owed; and

(d) in a single bulk sale the cumulative liability of the

auctioneer or liquidator for failure to comply with the

requirements of this section may not exceed the amount of the net

proceeds of the sale allocable to inventory and equipment sold

less the amount of the portion of any part of the net proceeds

paid to or applied for the benefit of a creditor which is

allocable to the inventory and equipment.

(2) A payment made by the auctioneer or liquidator to a

person to whom the auctioneer or liquidator is, or believes he

[or she] is, liable under this section reduces pro tanto the

auctioneer's or liquidator's cumulative liability under

subsection (1)(d).

(3) A form substantially as follows is sufficient to comply with

subsection (1)(c):

Notice of Sale

(1) ________, whose address is ________, is described in

this notice as the "seller."

(2) _______, whose address is _______, is described in this

notice as the "auctioneer" or "Liquidator."

(3) The seller has disclosed to the auctioneer or

liquidator that within the past three years the seller has used

other business names, operated at other addresses, or both, as

follows: ________.

(4) The seller and the auctioneer or liquidator have

entered into an agreement dated ________ for auction or

liquidation services that may constitute an agreement to make a

bulk sale under the laws of the State of ________.

(5) The date on or after which the auction began or will

begin or the date on or after which the liquidator began or will

begin to sell assets on the seller's behalf is _______ and [if

not stated in the schedule of distribution] the date on or after

which more than ten percent of the net proceeds of the sale were

or will be paid is ________.

(6) The following assets are the subject of the sale:

________.

(7) [If applicable] The auctioneer or liquidator will make

available to claimants of the seller a list of the seller's

claimants in the following manner: ________.

(8) [If applicable] The sale is to satisfy $________ of an

antecedent debt owed by the seller to ________.

(9) A copy of the schedule of distribution of the net

proceeds accompanies this notice.

(End of Notice]

(4) A person who buys at a bulk sale by auction or

conducted by a liquidator need not comply with the requirements

of Section 6-104(1) and is not liable for the failure of an

auctioneer or liquidator to comply with the requirements of this

section.

6-l09. What Constitutes Filing; Duties of Filing Officer;

Information from Filing Officer.

(1) Presentation of a notice or list of claimants for

filing and tender of the filing fee or acceptance of the notice

or list by the filing officer constitutes filing under this

Article.

(2) The filing officer shall:

(a) mark each notice or list with a file number and with

the date and hour of filing;

(b) hold the notice or list or a copy for public

inspection;

(c) index the notice or list according to each name given

for the seller and for the buyer; and

(d) note in the index the file number and the addresses of

the seller and buyer given in the notice or list.

(3) the person filing a notice or list furnishes the filing

officer with a copy, the filing officer upon request shall note

upon the copy the file number and date and hour of the filing of

the original and send or deliver the copy to the person.

(4) The fee for filing and indexing and for stamping a copy

furnished by the person filing to show the date and place of

filing is $_______ for the first page and $_________ for each

additional page. The fee for indexing each name more than two is

$ ____________.

(5) Upon request of any person, the filing officer shall

issue a certificate showing whether any notice or list with

respect to a particular seller or buyer is on file on the date

and hour stated in the certificate. If a notice or list is on

file, the certificate must give the date and hour of filing of

each notice or list and the name and address of each seller,

buyer, auctioneer, or liquidator. The fee for the certificate is

$________ if the request for the certificate is in the standard

form prescribed by the [Secretary of State] and otherwise is

$_______. Upon request of any person, the filing officer shall

furnish a copy of any filed notice or list for a fee of $________

(6) The filing officer shall keep each notice or list for

two years after it is filed.

6-110. Limitation of Actions.

(1) Except as provided in subsection (2), an action under this Article against a buyer, auctioneer, or liquidator must be commenced within one year after the date of the bulk sale.

(2) If the buyer, auctioneer, or liquidator conceals the

fact that the sale has occurred, the limitation is tolled and an

action under this Article may be commenced within the earlier of

(i) one year after the person bringing the action discovers that

the sale has occurred or (ii) one year after the person bringing

the action should have discovered that the sale has occurred, but

no later than two years after the date of the bulk sale. Complete

noncompliance with the requirements of this Article does not of

itself constitute concealment.

(3) An action under Section 6-107(11) must be commenced

within one year after the alleged violation occurs.

CONFORMING AMENDMENT TO SECTION 1-105

States adopting Alternative II; should amend Section 1-

105(2) of the Uniform Commercial Code to read as follows:

(2) Where one of the following provisions of this Act

specifies the applicable law, that provision governs and a

contrary agreement is effective only to the extent permitted by

the law (including the conflict of laws rules) so specified:

Rights of creditors against sold goods. Section 2-402.

Applicability of the Article on Leases. Sections 2A-105 and 2A-

106.

Applicability of the Article on Bank Deposits and Collections. Section 4-102.

Bulk sales subject to the Article on Bulk Sales. Section 6-103.

Applicability of the Article on Investment Securities. Section 8-

106.

Perfection provisions of the Article on Secured Transactions. Section 9-103.

CONFORMING AMENDMENT TO SECTION 2-403

States adopting Alternative B should amend Section 2-403(4)

of the Uniform Commercial Code to read as follows:

(4) The rights of other purchasers of goods and of lien

creditors are governed by the Articles on Secured Transactions

(Article 9), Bulk Sales (Article 6) and Documents of Title (Article 7).