Rights and duties of secured party having possession or control ofcollateral.
400.9-207. (a) Except as otherwise provided in subsection (d), asecured party shall use reasonable care in the custody and preservation ofcollateral in the secured party's possession. In the case of chattel paperor an instrument, reasonable care includes taking necessary steps topreserve rights against prior parties unless otherwise agreed.
(b) Except as otherwise provided in subsection (d), if a securedparty has possession of collateral:
(1) Reasonable expenses, including the cost of insurance and paymentof taxes or other charges, incurred in the custody, preservation, use, oroperation of the collateral are chargeable to the debtor and are secured bythe collateral;
(2) The risk of accidental loss or damage is on the party havingpossession of the collateral;
(3) The secured party shall keep the collateral identifiable, butfungible collateral may be commingled; and
(4) The secured party may use or operate the collateral:
(A) For the purpose of preserving the collateral or its value;
(B) As permitted by an order of a court having competentjurisdiction; or
(C) Except in the case of consumer goods, in the manner and to theextent agreed by the debtor.
(c) Except as otherwise provided in subsection (d), a secured partyhaving possession of collateral or control of collateral under section400.9-104, 400.9-105, 400.9-106 or 400.9-107:
(1) May hold as additional security any proceeds, except money orfunds, received from the collateral;
(2) Shall apply money or funds received from the collateral to reducethe secured obligation, unless remitted to the debtor; and
(3) May create a security interest in the collateral.
(d) If the secured party is a buyer of accounts, chattel paper,payment intangibles, or promissory notes or a consignor:
(1) Subsection (a) does not apply unless the secured party isentitled under an agreement:
(A) To charge back uncollected collateral; or
(B) Otherwise to full or limited recourse against the debtor or asecondary obligor based on the nonpayment or other default of an accountdebtor or other obligor on the collateral; and
Rights and duties of secured party having possession or control ofcollateral.
400.9-207. (a) Except as otherwise provided in subsection (d), asecured party shall use reasonable care in the custody and preservation ofcollateral in the secured party's possession. In the case of chattel paperor an instrument, reasonable care includes taking necessary steps topreserve rights against prior parties unless otherwise agreed.
(b) Except as otherwise provided in subsection (d), if a securedparty has possession of collateral:
(1) Reasonable expenses, including the cost of insurance and paymentof taxes or other charges, incurred in the custody, preservation, use, oroperation of the collateral are chargeable to the debtor and are secured bythe collateral;
(2) The risk of accidental loss or damage is on the party havingpossession of the collateral;
(3) The secured party shall keep the collateral identifiable, butfungible collateral may be commingled; and
(4) The secured party may use or operate the collateral:
(A) For the purpose of preserving the collateral or its value;
(B) As permitted by an order of a court having competentjurisdiction; or
(C) Except in the case of consumer goods, in the manner and to theextent agreed by the debtor.
(c) Except as otherwise provided in subsection (d), a secured partyhaving possession of collateral or control of collateral under section400.9-104, 400.9-105, 400.9-106 or 400.9-107:
(1) May hold as additional security any proceeds, except money orfunds, received from the collateral;
(2) Shall apply money or funds received from the collateral to reducethe secured obligation, unless remitted to the debtor; and
(3) May create a security interest in the collateral.
(d) If the secured party is a buyer of accounts, chattel paper,payment intangibles, or promissory notes or a consignor:
(1) Subsection (a) does not apply unless the secured party isentitled under an agreement:
(A) To charge back uncollected collateral; or
(B) Otherwise to full or limited recourse against the debtor or asecondary obligor based on the nonpayment or other default of an accountdebtor or other obligor on the collateral; and
Rights and duties of secured party having possession or control ofcollateral.
400.9-207. (a) Except as otherwise provided in subsection (d), asecured party shall use reasonable care in the custody and preservation ofcollateral in the secured party's possession. In the case of chattel paperor an instrument, reasonable care includes taking necessary steps topreserve rights against prior parties unless otherwise agreed.
(b) Except as otherwise provided in subsection (d), if a securedparty has possession of collateral:
(1) Reasonable expenses, including the cost of insurance and paymentof taxes or other charges, incurred in the custody, preservation, use, oroperation of the collateral are chargeable to the debtor and are secured bythe collateral;
(2) The risk of accidental loss or damage is on the party havingpossession of the collateral;
(3) The secured party shall keep the collateral identifiable, butfungible collateral may be commingled; and
(4) The secured party may use or operate the collateral:
(A) For the purpose of preserving the collateral or its value;
(B) As permitted by an order of a court having competentjurisdiction; or
(C) Except in the case of consumer goods, in the manner and to theextent agreed by the debtor.
(c) Except as otherwise provided in subsection (d), a secured partyhaving possession of collateral or control of collateral under section400.9-104, 400.9-105, 400.9-106 or 400.9-107:
(1) May hold as additional security any proceeds, except money orfunds, received from the collateral;
(2) Shall apply money or funds received from the collateral to reducethe secured obligation, unless remitted to the debtor; and
(3) May create a security interest in the collateral.
(d) If the secured party is a buyer of accounts, chattel paper,payment intangibles, or promissory notes or a consignor:
(1) Subsection (a) does not apply unless the secured party isentitled under an agreement:
(A) To charge back uncollected collateral; or
(B) Otherwise to full or limited recourse against the debtor or asecondary obligor based on the nonpayment or other default of an accountdebtor or other obligor on the collateral; and
