KRS 355.9-105: Control of electronic copy of record evidencing chattel paper.

(1) A purchaser has control of an authoritative electronic copy of a record evidencing

chattel paper if a system employed for evidencing the assignment of interests in the

chattel paper reliably establishes the purchaser as the person to which the

authoritative electronic copy was assigned.

(2) A system satisfies subsection (1) of this section if the record or records evidencing

the chattel paper are created, stored, and assigned in a manner that:

(a) A single authoritative copy of the record or records exists which is unique,

identifiable, and, except as otherwise provided in paragraphs (d), (e), and (f)

of this subsection, unalterable;

(b) The authoritative copy identifies the purchaser as the assignee of the record or

records;

(c) The authoritative copy is communicated to and maintained by the purchaser

or its designated custodian;

(d) Copies or amendments that add or change an identified assignee of the

authoritative copy can be made only with the consent of the purchaser;

(e) Each copy of the authoritative copy and any copy of a copy is readily

identifiable as a copy that is not the authoritative copy; and

(f) Any amendment of the authoritative copy is readily identifiabl e as authorized

or unauthorized.

(3) A system satisfies subsection (1) of this section, and a purchaser has control of an

authoritative electronic copy of a record evidencing chattel paper, if the electronic

copy, a record attached to or logically associat ed with the electronic copy, or a

system in which the electronic copy is recorded:

(a) Enables the purchaser to readily identify each electronic copy as either an

authoritative copy or a nonauthoritative copy;

(b) Enables the purchaser to readily identify itself in any way, including by name,

identifying number, cryptographic key, office, or account number, as the

assignee of the authoritative electronic copy; and

(c) Gives the purchaser exclusive power, subject to subsection (4) of this section,

to:

1. Prevent others from adding or changing an identified assignee of the

authoritative electronic copy; and

2. Transfer control of the authoritative electronic copy.

(4) Subject to subsection (5) of this section, a power is exclusive under subsection

(3)(c)1. and 2. of this section even if:

(a) The authoritative electronic copy, a record attached to or logically associated

with the authoritative electronic copy, or a system in which the authoritative

electronic copy is rec orded limits the use of the authoritative electronic copy

or has a protocol programmed to cause a change, including a transfer or loss

of control; or

(b) The power is shared with another person.

(5) A power of a purchaser is not shared with another person under subsection (4)(b) of

this section and the purchaser's power is not exclusive if:

(a) The purchaser can exercise the power only if the power also is exercised by

the other person; and

(b) The other person:

1. Can exercise the power without exercise of the power by the purchaser;

or

2. Is the transferor to the purchaser of an interest in the chattel paper.

(6) If a purchaser has the powers specified in subsection (3)(c)1. and 2. of this section,

the powers are presumed to be exclusive.

(7) A purchaser h as control of an authoritative electronic copy of a record evidencing

chattel paper if another person, other than the transferor to the purchaser of an

interest in the chattel paper:

(a) Has control of the authoritative electronic copy and acknowledges tha t it has

control on behalf of the purchaser; or

(b) Obtains control of the authoritative electronic copy after having

acknowledged that it will obtain control of the electronic copy on behalf of

the purchaser.