9-207. RIGHTS AND DUTIES OF SECURED PARTY HAVING POSSESSION OR CONTROL
OF COLLATERAL.

(A) EXCEPT AS OTHERWISE PROVIDED IN SUBSECTION (D), A SECURED PARTY
SHALL USE REASONABLE CARE IN THE CUSTODY AND PRESERVATION OF
COLLATERAL IN THE SECURED PARTY'S POSSESSION. IN THE CASE OF CHATTEL
PAPER OR AN INSTRUMENT, REASONABLE CARE INCLUDES TAKING NECESSARY
STEPS TO PRESERVE RIGHTS AGAINST PRIOR PARTIES UNLESS OTHERWISE AGREED.

(B) EXCEPT AS OTHERWISE PROVIDED IN SUBSECTION (D), IF A SECURED
PARTY HAS POSSESSION OF COLLATERAL:

(1) REASONABLE EXPENSES, INCLUDING THE COST OF INSURANCE AND
PAYMENT OF TAXES OR OTHER CHARGES, INCURRED IN THE CUSTODY,
PRESERVATION, USE, OR OPERATION OF THE COLLATERAL ARE CHARGEABLE TO
THE DEBTOR AND ARE SECURED BY THE COLLATERAL;

(2) THE RISK OF ACCIDENTAL LOSS OR DAMAGE IS ON THE DEBTOR TO
THE EXTENT OF A DEFICIENCY IN ANY EFFECTIVE INSURANCE COVERAGE;

(3) THE SECURED PARTY SHALL KEEP THE COLLATERAL IDENTIFIABLE,
BUT FUNGIBLE 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 COMPETENT
JURISDICTION; OR

(C) EXCEPT IN THE CASE OF CONSUMER GOODS, IN THE MANNER
AND TO THE EXTENT AGREED BY THE DEBTOR

(C) EXCEPT AS OTHERWISE PROVIDED IN SUBSECTION (D), A SECURED PARTY
HAVING POSSESSION OF COLLATERAL OR CONTROL OF COLLATERAL UNDER § 9-104,
§ 9-105, § 9-106, OR § 9-107:

(1) MAY HOLD AS ADDITIONAL SECURITY ANY PROCEEDS, EXCEPT
MONEY OR FUNDS, RECEIVED FROM THE COLLATERAL;

(2) SHALL APPLY MONEY OR FUNDS RECEIVED FROM THE COLLATERAL
TO REDUCE THE 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 IS
ENTITLED UNDER AN AGREEMENT:

(A) TO CHARGE BACK UNCOLLECTED COLLATERAL; OR