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(810 ILCS 5/9-330)
Sec. 9-330.
Priority of purchaser of chattel paper or instrument.
(a) Purchaser's priority: security interest claimed merely as
proceeds. A purchaser of chattel paper has priority over a security interest
in the
chattel paper which is claimed merely as proceeds of inventory subject to a
security
interest if:
(1) in good faith and in the ordinary course of the |
| purchaser's business, the purchaser gives new value and takes possession of the chattel paper or obtains control of the chattel paper under Section 9-105; and
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(2) the chattel paper does not indicate that it has
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| been assigned to an identified assignee other than the purchaser.
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(b) Purchaser's priority: other security interests. A purchaser
of chattel paper has priority over a security interest in the chattel paper which is
claimed other than merely as proceeds of inventory subject to a security interest if
the purchaser gives new value and takes possession of the chattel paper or obtains
control of the chattel paper under Section 9-105 in good faith, in the ordinary
course of the purchaser's business, and without knowledge that the purchase
violates the rights of the secured party.
(c) Chattel paper purchaser's priority in proceeds. Except as
otherwise provided in Section 9-327, a purchaser having priority in chattel paper
under subsection (a) or (b) also has priority in proceeds of the chattel paper to the
extent that:
(1) Section 9-322 provides for priority in the
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(2) the proceeds consist of the specific goods
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| covered by the chattel paper or cash proceeds of the specific goods, even if the purchaser's security interest in the proceeds is unperfected.
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(d) Instrument purchaser's priority. Except as otherwise
provided in Section 9-331(a), a purchaser of an instrument has priority over a
security interest in the instrument perfected by a method other than possession if
the purchaser gives value and takes possession of the instrument in good faith and
without knowledge that the purchase violates the rights of the secured party.
(e) Holder of purchase-money security interest gives new value.
For purposes of subsections (a) and (b), the holder of a purchase-money
security
interest in inventory gives new value for chattel paper constituting proceeds
of the
inventory.
(f) Indication of assignment gives knowledge. For purposes of
subsections (b) and (d), if chattel paper or an instrument indicates that it
has been
assigned to an identified secured party other than the purchaser, a purchaser
of the
chattel paper or instrument has knowledge that the purchase violates the rights
of
the secured party.
(Source: P.A. 91-893, eff. 7-1-01.)
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