Page:United States Statutes at Large Volume 77.djvu/788

 756

PUBLIC LAW 88-243-DEC. 30, 1963

[77 STAT.

21 clays from the time it attaches to the extent that it arises for new value given under a written security agreement. (5) A security interest remains perfected for a period of 21 days without filing where a secured party having a perfected security interest in an instrument, a negotiable document oi" goods in possession of a bailee other than one who has issued a negotiable document therefor (a) makes available to the debtor the goods or documents representing the goods for the purpose of ultimate sale or exchange or for the purpose of loading, unloading, storing, shipping, transshipping, manufacturing, processing or otherwise dealing with them in a manner preliminary to their sale or exchange; or (b) delivers the instrument to the debtor for the purpose of ultimate sale or exchange or of presentation, collection, renewal or registration of transfer. (6) After the 21 day period in subsections (4) and (5) perfection depends upon compliance with applicable provisions of this article. § 28:9—305. When possession by secured party perfects security interest without filing A security interest in letters of credit and advices of credit (subsection (2)(a) of section 28:5—116), goods, instruments, negotiable documents or chattel paper may be perfected by the secured party's i taking possession of the collateral. If such collateral other than goods covered by a negotiable document is held by a bailee, the secured party is deemed to have possession from the time the bailee receives notification of the secured party's interest. A security interest is perfected by possession from the tiipie possession is taken without relation back and continues only so long as possession is retained, unless otherwise specified in this article. The security interest may be otherwise perfected as provided in this article before or after the period of possession by the secured party. §28:9—306. "Proceeds"; secured party's rights on disposition of collateral (1) "Proceeds'' includes whatever is received when collateral or proceeds is sold, exchanged, collected or otherwise disposed of. The term also includes the account arising when the right to payment is earned under a contract right. Money, checks and the like are "cash proceeds". All other proceeds are "non-cash proceeds". (2) Except where this article otherwise provides, a security interest <'ontiniies in collateral notwithstanding sale, exchange or other disposition thereof by the debtor unless his action was authorized by the secured party in the security agreement or otherwise, and also continues in any identifiable proceeds including collections received by the debtor. (3) The security interest in proceeds is a continuously perfected security interest if the interest in the original collateral was perfected but it ceases to be a perfected security interest and becomes unperfected ten days after receipt of the proceeds by the debtor unless (a) a filed financing statement covering the original collateral also covers proceeds; or (b) the security interest in the proceeds is perfected before the expiration of the ten day period. (4) I n the event of insolvency proceedings instituted by or against a debtor, a secured party with a perfected security interest in proceeds has a perfected security interest (a) in identifiable non-cash proceeds;

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