§490:9-103  Purchase-money security
interest; application of payments; burden of establishing.  (a)  In this
section:



(1)  "Purchase-money collateral" means goods
or software that secures a purchase-money obligation incurred with respect to
that collateral; and



(2)  "Purchase-money obligation" means an
obligation of an obligor incurred as all or part of the price of the collateral
or for value given to enable the debtor to acquire rights in or the use of the
collateral if the value is in fact so used.



(b)  A security interest in goods is a
purchase-money security interest:



(1)  To the extent that the goods are purchase-money
collateral with respect to that security interest;



(2)  If the security interest is in inventory that is
or was purchase-money collateral, also to the extent that the security interest
secures a purchase-money obligation incurred with respect to other inventory in
which the secured party holds or held a purchase-money security interest; and



(3)  Also to the extent that the security interest
secures a purchase-money obligation incurred with respect to software in which
the secured party holds or held a purchase-money security interest.



(c)  A security interest in software is a
purchase-money security interest to the extent that the security interest also
secures a purchase-money obligation incurred with respect to goods in which the
secured party holds or held a purchase-money security interest if:



(1)  The debtor acquired its interest in the software
in an integrated transaction in which it acquired an interest in the goods; and



(2)  The debtor acquired its interest in the software
for the principal purpose of using the software in the goods.



(d)  The security interest of a consignor in
goods that are the subject of a consignment is a purchase-money security
interest in inventory.



(e)  In a transaction other than a
consumer-goods transaction, if the extent to which a security interest is a
purchase-money security interest depends on the application of a payment to a
particular obligation, the payment must be applied:



(1)  In accordance with any reasonable method of
application to which the parties agree;



(2)  In the absence of the parties' agreement to a
reasonable method, in accordance with any intention of the obligor manifested
at or before the time of payment; or



(3)  In the absence of an agreement to a reasonable
method and a timely manifestation of the obligor's intention, in the following
order:



(A)  To obligations that are not secured; and



(B)  If more than one obligation is secured, to
obligations secured by purchase-money security interests in the order in which
those obligations were incurred.



(f)  In a transaction other than a
consumer-goods transaction, a purchase-money security interest does not lose
its status as such, even if:



(1)  The purchase-money collateral also secures an
obligation that is not a purchase-money obligation;



(2)  Collateral that is not purchase-money collateral
also secures the purchase-money obligation; or



(3)  The purchase-money obligation has been renewed,
refinanced, consolidated, or restructured.



(g)  In a transaction other than a
consumer-goods transaction, a secured party claiming a purchase-money security
interest has the burden of establishing the extent to which the security
interest is a purchase-money security interest.



(h)  The limitation of the rules in subsections
(e), (f), and (g) to transactions other than consumer-goods transactions is
intended to leave to the court the determination of the proper rules in
consumer-goods transactions.  The court may not infer from that limitation the
nature of the proper rule in consumer-goods transactions and may continue to
apply established approaches. [L 2000, c 241, pt of §1]