J. MILLARD TAWES, Governor                        929

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 Sub-title otherwise provides, a security
interest continues in collateral notwithstanding sale, exchange or
other disposition thereof by the debtor unless his action was author-
ized 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 unper-
fected 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) In the event of insolvency proceedings instituted by or against
a debtor, a secured party with a perfected security interest in pro-
ceeds has a perfected security interest

(a)  in identifiable non-cash proceeds;

(b)  in identifiable cash proceeds in the form of money which is
not commingled with other money or deposited in a bank account
prior to the insolvency proceedings;

(c)  in identifiable cash proceeds in the form of checks and the
like which are not deposited in a bank account prior to the insolvency
proceedings; and

(d)  in all cash and bank accounts of the debtor, if other cash
proceeds have been commingled or deposited in a bank account, but
the perfected security interest under this paragraph (d) is

(i) subject to any right of set-off; and

(ii) limited to an amount not greater than the amount of any
cash proceeds received by the debtor within ten days before the
institution of the insolvency proceedings and commingled or de-
posited in a bank account prior to the insolvency proceedings less
the amount of cash proceeds received by the debtor and paid over to
the secured party during the ten day period.

(5) If a sale of goods results in an account or chattel paper which
is transferred by the seller to a secured party, and if the goods are
returned to or are repossessed by the seller or the secured party,
the following rules determine priorities:

(a) If the goods were collateral at the time of sale for an indebt-
edness of the seller which is still unpaid, the original security interest
attaches again to the goods and continues as a perfected security
interest if it was perfected at the time when the goods were sold.
If the security interest was originally perfected by a filing which is
still effective, nothing further is required to continue the perfected
status; in any other case, the secured party must take possession
of the returned or repossessed goods or must file.