(b)__Shall apply money or funds received from the collateral to reduce the secured obligation, unless remitted to the debtor; and

(c)__May create a security interest in the collateral.

(4)__If the secured party is a buyer of accounts, chattel paper, payment intangibles or promissory notes or a consignor:

(a) Subsection (1) does not apply unless the secured party is entitled under an agreement:

(i)__To charge back uncollected collateral; or

(ii)__Otherwise to full or limited recourse against the debtor or a secondary obligor based on the nonpayment or other default of an account debtor or other obligor on the collateral; and

(5)__Subsections (2) and (3) do not apply.

Official Comment

1. Source. Former Section 9-207.

2. Duty of Care for Collateral in Secured Party's Possession. Like former section 9-207, subsection (a) [Maine cite subsection (1)] imposes a duty of care, similar to that imposed on a pledgee at common law, on a secured party in possession of collateral. See Restatement, Security §§ 17, 18. In many cases a secured party in possession of collateral may satisfy this duty by notifying the debtor of action that should be taken and allowing the debtor to take the action itself. If the secured party itself takes action, its reasonable expenses may be added to the secured obligation. The revised definitions of "collateral," "debtor," and "secured party" in Section 9-102 [Maine cite 9- 1102] make this section applicable to collateral subject to an agricultural lien if the collateral is in the lienholder's possession. Under Section 1-102 the duty to exercise reasonable care may not be disclaimed by agreement, although under that section the parties remain free to determine by agreement standards that are not manifestly unreasonable as to what constitutes reasonable care. Unless otherwise agreed, for a secured party in possession of chattel paper or an instrument, reasonable care includes the preservation of rights against prior