OCTAGON. We are aware of the opinion of the court in Octagon Gas Systems, Inc. x. Xxxxxx, 995 F.2d 948 (10th Cir.), cert. denied, 114 S.Ct. 554 (1993). In Octagon, the court concluded that because Article 9 of the UCC requires any purchase of accounts to be perfected, a sale of accounts is therefore treated under the UCC as a security interest in the accounts and any such accounts thus remain the property of the debtor’s bankruptcy estate. We note that the Originators have their chief executive offices in California, a state in the Ninth Circuit. We do not believe that a bankruptcy court properly applying the principles of Article 9 of the UCC in a proceeding in which an Originator was the debtor should follow Octagon. The Court’s decision in Octagon is inconsistent with the stated language and intent of the UCC, which clearly contemplates sales of accounts. Section 9-502(2) of the UCC, for example, states that “if the underlying transactions was a sale of accounts or chattel paper, the debtor is entitled to any surplus . . . only if the security agreement so provides.” Comment 4 to Section 9-502(2) further states that “the determination whether a particular assignment constitutes a sale or a transfer for security is left to the courts.” Various commentators have taken the view that, notwithstanding the decision of the court in Octagon, accounts may be sold. In fact, Permanent Editorial Board Commentary No. 14 on the UCC rejects Octagon and amends Comment 2 to Section 9-502 to make clear that the UCC does not prevent, or even govern whether there is, a sale of accounts. We believe that Octagon was wrongly decided and that, in a properly presented case in which the facts and assumptions relied herein are established, a court not bound by Octagon would decline to adopt its reasoning. You should recognize, however, that if Octagon were followed, it could result in a conclusion that the Receivables remained “property of the estate” of an Originator under Section 541 of the Bankruptcy Code. We note that courts in the Ninth Circuit, which has jurisdiction in California, the principal place of business of the Originators, are not bound by Octagon, a decision of the Tenth Circuit.
OCTAGON agrees to provide its insurance with a full copy of these insurance provisions and provide COUNTY on or before the effective date of this Agreement with Certificates of Insurance for all required coverages. All Certificates of Insurance shall be delivered or sent to: Risk Manager County of Santa Xxxx 000 Xxxxx Xxxxxx, Room 310 Santa Cruz, CA 95060 INDEPENDENT CONTRACTOR OCTAGON and COUNTY have reviewed and considered the principal test and secondary factors below and agree that OCTAGON is an independent contractor and not an employee of COUNTY. OCTAGON is responsible for all insurance (Workers’ Compensation, Unemployment, etc.) and all payroll-related taxes. OCTAGON is not entitled to any employee benefits. COUNTY agrees that OCTAGON shall have the right to control the manner and means of accomplishing the result contracted for herein.
