§ 8.9A-408. Restrictions on assignment of promissory notes,health-care-insurance receivables, and certain general intangiblesineffective.
(a) Term restricting assignment generally ineffective. Except as otherwiseprovided in subsection (b), a term in a promissory note or in an agreementbetween an account debtor and a debtor which relates to ahealth-care-insurance receivable or a general intangible, including acontract, permit, license, or franchise, and which term prohibits, restricts,or requires the consent of the person obligated on the promissory note or theaccount debtor to, the assignment or transfer of, or creation, attachment, orperfection of a security interest in, the promissory note,health-care-insurance receivable, or general intangible, is ineffective tothe extent that the term:
(1) would impair the creation, attachment, or perfection of a securityinterest; or
(2) provides that the assignment or transfer or the creation, attachment, orperfection of the security interest may give rise to a default, breach, rightof recoupment, claim, defense, termination, right of termination, or remedyunder the promissory note, health-care-insurance receivable, or generalintangible.
(b) Applicability of subsection (a) to sales of certain rights to payment.Subsection (a) applies to a security interest in a payment intangible orpromissory note only if the security interest arises out of a sale of thepayment intangible or promissory note.
(c) Legal restrictions on assignment generally ineffective. A rule of law,statute, or regulation that prohibits, restricts, or requires the consent ofa government, governmental body or official, person obligated on a promissorynote, or account debtor to the assignment or transfer of, or creation of asecurity interest in, a promissory note, health-care-insurance receivable, orgeneral intangible, including a contract, permit, license, or franchisebetween an account debtor and a debtor, is ineffective to the extent that therule of law, statute, or regulation:
(1) would impair the creation, attachment, or perfection of a securityinterest; or
(2) provides that the assignment or transfer or the creation, attachment, orperfection of the security interest may give rise to a default, breach, rightof recoupment, claim, defense, termination, right of termination, or remedyunder the promissory note, health-care-insurance receivable, or generalintangible.
(d) Limitation on ineffectiveness under subsections (a) and (c). To theextent that a term in a promissory note or in an agreement between an accountdebtor and a debtor which relates to a health-care-insurance receivable orgeneral intangible or a rule of law, statute, or regulation described insubsection (c) would be effective under law other than this title but isineffective under subsection (a) or (c), the creation, attachment, orperfection of a security interest in the promissory note,health-care-insurance receivable, or general intangible:
(1) is not enforceable against the person obligated on the promissory note orthe account debtor;
(2) does not impose a duty or obligation on the person obligated on thepromissory note or the account debtor;
(3) does not require the person obligated on the promissory note or theaccount debtor to recognize the security interest, pay or render performanceto the secured party, or accept payment or performance from the secured party;
(4) does not entitle the secured party to use or assign the debtor's rightsunder the promissory note, health-care-insurance receivable, or generalintangible, including any related information or materials furnished to thedebtor in the transaction giving rise to the promissory note,health-care-insurance receivable, or general intangible;
(5) does not entitle the secured party to use, assign, possess, or haveaccess to any trade secrets or confidential information of the personobligated on the promissory note or the account debtor; and
(6) does not entitle the secured party to enforce the security interest inthe promissory note, health-care-insurance receivable, or general intangible.
(e) Inapplicability of subsection (a) to certain payment intangibles.Subsection (a) does not apply to:
(1) the sale of a claim or right to receive compensation for injuries orsickness as described in 26 U.S.C. § 104 (a) (2), as amended from time totime, provided that no inference shall be drawn regarding the enforceabilityor nonenforceability under other law or any term in an agreement whichprohibits, restricts, or requires consent to the sale of such claim or rightdescribed in 26 U.S.C. § 104 (a) (2);
(2) a claim or right to receive compensation for injuries or sickness asdescribed in 26 U.S.C. § 104 (a) (1), as amended from time to time; or
(3) a claim or right to receive benefits under a special needs trust asdescribed in 42 U.S.C. § 1396p (d) (4), as amended from time to time.
(f) Inapplicability of subsection (c) to certain payment intangibles.Subsection (c) does not apply to:
(1) a claim or right to receive compensation for injuries or sickness asdescribed in 26 U.S.C. § 104 (a) (1) or (2), as amended from time to time; or
(2) a claim or right to receive benefits under a special needs trust asdescribed in 42 U.S.C. § 1396p (d) (4), as amended from time to time.
(g) Inapplicability to partnership and limited liability company interests.This section does not apply to an interest in a partnership or limitedliability company.
§ 8.9A-408. Restrictions on assignment of promissory notes,health-care-insurance receivables, and certain general intangiblesineffective.
(a) Term restricting assignment generally ineffective. Except as otherwiseprovided in subsection (b), a term in a promissory note or in an agreementbetween an account debtor and a debtor which relates to ahealth-care-insurance receivable or a general intangible, including acontract, permit, license, or franchise, and which term prohibits, restricts,or requires the consent of the person obligated on the promissory note or theaccount debtor to, the assignment or transfer of, or creation, attachment, orperfection of a security interest in, the promissory note,health-care-insurance receivable, or general intangible, is ineffective tothe extent that the term:
(1) would impair the creation, attachment, or perfection of a securityinterest; or
(2) provides that the assignment or transfer or the creation, attachment, orperfection of the security interest may give rise to a default, breach, rightof recoupment, claim, defense, termination, right of termination, or remedyunder the promissory note, health-care-insurance receivable, or generalintangible.
(b) Applicability of subsection (a) to sales of certain rights to payment.Subsection (a) applies to a security interest in a payment intangible orpromissory note only if the security interest arises out of a sale of thepayment intangible or promissory note.
(c) Legal restrictions on assignment generally ineffective. A rule of law,statute, or regulation that prohibits, restricts, or requires the consent ofa government, governmental body or official, person obligated on a promissorynote, or account debtor to the assignment or transfer of, or creation of asecurity interest in, a promissory note, health-care-insurance receivable, orgeneral intangible, including a contract, permit, license, or franchisebetween an account debtor and a debtor, is ineffective to the extent that therule of law, statute, or regulation:
(1) would impair the creation, attachment, or perfection of a securityinterest; or
(2) provides that the assignment or transfer or the creation, attachment, orperfection of the security interest may give rise to a default, breach, rightof recoupment, claim, defense, termination, right of termination, or remedyunder the promissory note, health-care-insurance receivable, or generalintangible.
(d) Limitation on ineffectiveness under subsections (a) and (c). To theextent that a term in a promissory note or in an agreement between an accountdebtor and a debtor which relates to a health-care-insurance receivable orgeneral intangible or a rule of law, statute, or regulation described insubsection (c) would be effective under law other than this title but isineffective under subsection (a) or (c), the creation, attachment, orperfection of a security interest in the promissory note,health-care-insurance receivable, or general intangible:
(1) is not enforceable against the person obligated on the promissory note orthe account debtor;
(2) does not impose a duty or obligation on the person obligated on thepromissory note or the account debtor;
(3) does not require the person obligated on the promissory note or theaccount debtor to recognize the security interest, pay or render performanceto the secured party, or accept payment or performance from the secured party;
(4) does not entitle the secured party to use or assign the debtor's rightsunder the promissory note, health-care-insurance receivable, or generalintangible, including any related information or materials furnished to thedebtor in the transaction giving rise to the promissory note,health-care-insurance receivable, or general intangible;
(5) does not entitle the secured party to use, assign, possess, or haveaccess to any trade secrets or confidential information of the personobligated on the promissory note or the account debtor; and
(6) does not entitle the secured party to enforce the security interest inthe promissory note, health-care-insurance receivable, or general intangible.
(e) Inapplicability of subsection (a) to certain payment intangibles.Subsection (a) does not apply to:
(1) the sale of a claim or right to receive compensation for injuries orsickness as described in 26 U.S.C. § 104 (a) (2), as amended from time totime, provided that no inference shall be drawn regarding the enforceabilityor nonenforceability under other law or any term in an agreement whichprohibits, restricts, or requires consent to the sale of such claim or rightdescribed in 26 U.S.C. § 104 (a) (2);
(2) a claim or right to receive compensation for injuries or sickness asdescribed in 26 U.S.C. § 104 (a) (1), as amended from time to time; or
(3) a claim or right to receive benefits under a special needs trust asdescribed in 42 U.S.C. § 1396p (d) (4), as amended from time to time.
(f) Inapplicability of subsection (c) to certain payment intangibles.Subsection (c) does not apply to:
(1) a claim or right to receive compensation for injuries or sickness asdescribed in 26 U.S.C. § 104 (a) (1) or (2), as amended from time to time; or
(2) a claim or right to receive benefits under a special needs trust asdescribed in 42 U.S.C. § 1396p (d) (4), as amended from time to time.
(g) Inapplicability to partnership and limited liability company interests.This section does not apply to an interest in a partnership or limitedliability company.
§ 8.9A-408. Restrictions on assignment of promissory notes,health-care-insurance receivables, and certain general intangiblesineffective.
(a) Term restricting assignment generally ineffective. Except as otherwiseprovided in subsection (b), a term in a promissory note or in an agreementbetween an account debtor and a debtor which relates to ahealth-care-insurance receivable or a general intangible, including acontract, permit, license, or franchise, and which term prohibits, restricts,or requires the consent of the person obligated on the promissory note or theaccount debtor to, the assignment or transfer of, or creation, attachment, orperfection of a security interest in, the promissory note,health-care-insurance receivable, or general intangible, is ineffective tothe extent that the term:
(1) would impair the creation, attachment, or perfection of a securityinterest; or
(2) provides that the assignment or transfer or the creation, attachment, orperfection of the security interest may give rise to a default, breach, rightof recoupment, claim, defense, termination, right of termination, or remedyunder the promissory note, health-care-insurance receivable, or generalintangible.
(b) Applicability of subsection (a) to sales of certain rights to payment.Subsection (a) applies to a security interest in a payment intangible orpromissory note only if the security interest arises out of a sale of thepayment intangible or promissory note.
(c) Legal restrictions on assignment generally ineffective. A rule of law,statute, or regulation that prohibits, restricts, or requires the consent ofa government, governmental body or official, person obligated on a promissorynote, or account debtor to the assignment or transfer of, or creation of asecurity interest in, a promissory note, health-care-insurance receivable, orgeneral intangible, including a contract, permit, license, or franchisebetween an account debtor and a debtor, is ineffective to the extent that therule of law, statute, or regulation:
(1) would impair the creation, attachment, or perfection of a securityinterest; or
(2) provides that the assignment or transfer or the creation, attachment, orperfection of the security interest may give rise to a default, breach, rightof recoupment, claim, defense, termination, right of termination, or remedyunder the promissory note, health-care-insurance receivable, or generalintangible.
(d) Limitation on ineffectiveness under subsections (a) and (c). To theextent that a term in a promissory note or in an agreement between an accountdebtor and a debtor which relates to a health-care-insurance receivable orgeneral intangible or a rule of law, statute, or regulation described insubsection (c) would be effective under law other than this title but isineffective under subsection (a) or (c), the creation, attachment, orperfection of a security interest in the promissory note,health-care-insurance receivable, or general intangible:
(1) is not enforceable against the person obligated on the promissory note orthe account debtor;
(2) does not impose a duty or obligation on the person obligated on thepromissory note or the account debtor;
(3) does not require the person obligated on the promissory note or theaccount debtor to recognize the security interest, pay or render performanceto the secured party, or accept payment or performance from the secured party;
(4) does not entitle the secured party to use or assign the debtor's rightsunder the promissory note, health-care-insurance receivable, or generalintangible, including any related information or materials furnished to thedebtor in the transaction giving rise to the promissory note,health-care-insurance receivable, or general intangible;
(5) does not entitle the secured party to use, assign, possess, or haveaccess to any trade secrets or confidential information of the personobligated on the promissory note or the account debtor; and
(6) does not entitle the secured party to enforce the security interest inthe promissory note, health-care-insurance receivable, or general intangible.
(e) Inapplicability of subsection (a) to certain payment intangibles.Subsection (a) does not apply to:
(1) the sale of a claim or right to receive compensation for injuries orsickness as described in 26 U.S.C. § 104 (a) (2), as amended from time totime, provided that no inference shall be drawn regarding the enforceabilityor nonenforceability under other law or any term in an agreement whichprohibits, restricts, or requires consent to the sale of such claim or rightdescribed in 26 U.S.C. § 104 (a) (2);
(2) a claim or right to receive compensation for injuries or sickness asdescribed in 26 U.S.C. § 104 (a) (1), as amended from time to time; or
(3) a claim or right to receive benefits under a special needs trust asdescribed in 42 U.S.C. § 1396p (d) (4), as amended from time to time.
(f) Inapplicability of subsection (c) to certain payment intangibles.Subsection (c) does not apply to:
(1) a claim or right to receive compensation for injuries or sickness asdescribed in 26 U.S.C. § 104 (a) (1) or (2), as amended from time to time; or
(2) a claim or right to receive benefits under a special needs trust asdescribed in 42 U.S.C. § 1396p (d) (4), as amended from time to time.
(g) Inapplicability to partnership and limited liability company interests.This section does not apply to an interest in a partnership or limitedliability company.
