KRS 355.9-315: Secured party's rights on disposition of collateral and in proceeds.

(1) Except as otherwise provided in this article and in KRS 355.2-403(2):

(a) 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

(b) A security interest attaches to any identifiable proceeds of collateral.

(2) Proceeds that are commingled with other property are identifiable proceeds:

(a) If the proceeds are goods, to the extent provided by KRS 355.9-336; and

(b) 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 article with respect to commingled

property of the type involved.

(3) A security interest in proceeds is a perfected security interest if the security interest

in the original collateral was perfected.

(4) A perfected security interest in proceeds becomes unperfected on the twenty -first

day after the security interest attaches to the proceeds unless:

(a) The following conditions are satisfied:

1. A filed financing statement covers the original collateral;

2. The proceeds are collateral in which a security i nterest may be perfected

by filing in the office in which the financing statement has been filed;

and

3. The proceeds are not acquired with cash proceeds;

(b) The proceeds are identifiable cash proceeds; or

(c) The security interest in the proceeds is perfected other than under subsection

(3) of this section when the security interest attaches to the proceeds or within

twenty (20) days thereafter.

(5) If a filed financing statement covers the original collateral, a security interest in

proceeds which remains perfected under subsection (4)(a) of this section becomes

unperfected at the later of:

(a) When the effectiveness of the filed financing statement lapses under KRS

355.9-515 or is terminated under KRS 355.9-513; or

(b) The twenty-first day after the security interest attaches to the proceeds.