KRS 355.9-317: Interests that take priority over or take free of security interest or

agricultural lien.

(1) A security interest or agricultural lien is subordinate to the rights of:

(a) A person entitled to priority under KRS 355.9-322; and

(b) Except as otherwise provided in subsection (5) of this section, a person that

becomes a lien creditor before the earlier of the time:

1. The security interest or agricultural lien is perfected; or

2. One (1) of the conditions specified in KRS 355.9 -203(2)(c) is met and a

financing statement covering the collateral is filed.

(2) Except as otherwise provided in subsection (5) of this section, a buyer, other than a

secured party, of goods, instruments, tangible documents, or a certificated security

takes free o f a security interest or agricultural lien if the buyer gives value and

receives delivery of the collateral without knowledge of the security interest or

agricultural lien and before it is perfected.

(3) Except as otherwise provided in subsection (5) of th is section, a lessee of goods

takes free of a security interest or agricultural lien if the lessee gives value and

receives delivery of the collateral without knowledge of the security interest or

agricultural lien and before it is perfected.

(4) Subject to subsections (6) to (9) of this section, a licensee of a general intangible or

a buyer, other than a secured party, of collateral other than electronic money, goods,

instruments, tangible documents, or a certificated security takes free of a security

interest if the licensee or buyer gives value without knowledge of the security

interest and before it is perfected.

(5) Except as otherwise provided in KRS 355.9 -320 and 355.9 -321, if a person files a

financing statement with respect to a purchase -money security interest before or

within twenty (20) days after the debtor receives delivery of the collateral, the

security int erest takes priority over the rights of a buyer, lessee, or lien creditor

which arise between the time the security interest attaches and the time of filing.

(6) A buyer, other than a secured party, of chattel paper takes free of a security interest

if, without knowledge of the security interest and before it is perfected, the buyer

gives value and:

(a) Receives delivery of each authoritative tangible copy of the record evidencing

the chattel paper; and

(b) If each authoritative electronic copy of the recor d evidencing chattel paper

can be subjected to control under KRS 355.9 -105, obtains control of each

authoritative electronic copy.

(7) A buyer of an electronic document takes free of a security interest if, without

knowledge of the security interest and be fore it is perfected, the buyer gives value

and, if each authoritative electronic copy of the document can be subjected to

control under KRS 355.7-106, obtains control of each authoritative electronic copy.

(8) A buyer of a controllable electronic record t akes free of a security interest if,

without knowledge of the security interest and before it is perfected, the buyer gives

value and obtains control of the controllable electronic record.

(9) A buyer, other than a secured party, of a controllable account or a controllable

payment intangible takes free of a security interest if, without knowledge of the

security interest and before it is perfected, the buyer gives value and obtains control

of the controllable account or controllable payment intangible.