KRS 355.9-336: Commingled goods.

(1) In this section, "commingled goods" means goods that are physically united with

other goods in such a manner that their identity is lost in a product or mass.

(2) A security interest does not exist in commingled goods as such. However, a security

interest may attach to a product or mass that results when goods become

commingled goods.

(3) If collateral becomes commingled goods, a security interest attaches to the product

or mass.

(4) If a security interest in collateral is perfected before the collateral be comes

commingled goods, the security interest that attaches to the product or mass under

subsection (3) of this section is perfected.

(5) Except as otherwise provided in subsection (6) of this section, the other provisions

of this part of this article dete rmine the priority of a security interest that attaches to

the product or mass under subsection (3) of this section.

(6) If more than one (1) security interest attaches to the product or mass under

subsection (3) of this section, the following rules determine priority:

(a) A security interest that is perfected under subsection (4) of this section has

priority over a security interest that is unperfected at the time the collateral

becomes commingled goods.

(b) If more than one (1) security interest is perfec ted under subsection (4) of this

section, the security interests rank equally in proportion to the value of the

collateral at the time it became commingled goods.