                                 CODE OF VIRGINIA

SECURED PARTY&#8217;S RIGHTS ON DISPOSITION OF COLLATERAL AND IN PROCEEDS (§
8.9A-315)

a. Disposition of collateral; continuation of security interest or agricultural
lien; proceeds. Except as otherwise provided in this title and in § 8.2-403
(2):

   1. a security interest or agricultural lien continues in collateral
   notwithstanding sale, lease, license, exchange, or other disposition thereof
   unless the secured party authorized the disposition free of the security
   interest or agricultural lien; and

   2. a security interest attaches to any identifiable proceeds of collateral.

b. When commingled proceeds identifiable. Proceeds that are commingled with
other property are identifiable proceeds:

   1. if the proceeds are goods, to the extent provided by &#xA7; 8.9A-336; and

   2. if the proceeds are not goods, to the extent that the secured party
   identifies the proceeds by a method of tracing, including application of
   equitable principles, that is permitted under law other than this title with
   respect to commingled property of the type involved.

c. Perfection of security interest in proceeds. A security interest in proceeds
is a perfected security interest if the security interest in the original
collateral was perfected.

d. Continuation of perfection. A perfected security interest in proceeds becomes
unperfected on the twenty-first day after the security interest attaches to the
proceeds unless:

   1. the following conditions are satisfied:

A. a filed financing statement covers the original collateral;

B. the proceeds are collateral in which a security interest may be perfected by
filing in the office in which the financing statement has been filed; and

C. the proceeds are not acquired with cash proceeds;

   2. the proceeds are identifiable cash proceeds; or

   3. the security interest in the proceeds is perfected other than under
   subsection (c) when the security interest attaches to the proceeds or within
   twenty days thereafter.

e. When perfected security interest in proceeds becomes unperfected. If a filed
financing statement covers the original collateral, a security interest in
proceeds which remains perfected under subsection (d) (1) becomes unperfected at
the later of:

   1. when the effectiveness of the filed financing statement lapses under &#xA7;
   8.9A-515 or is terminated under &#xA7; 8.9A-513; or

   2. the twenty-first day after the security interest attaches to the proceeds.

HISTORY: 1964, c. 219, § 8.9-306; 1973, c. 509; 1983, c. 204; 1996, c. 216;
2000, c. 1007.