Section 9--615. Application of Proceeds of Disposition; Liability for

Deficiency and Right to Surplus.

(a) Application of proceeds. A secured party shall apply or pay over
for application the cash proceeds of disposition under Section 9--610 in
the following order to:

(1) the reasonable expenses of retaking, holding, preparing for

disposition, processing, and disposing, and, to the extent

provided for by agreement and not prohibited by law,

reasonable attorney's fees and legal expenses incurred by the

secured party;

(1-a) in the case of a cooperative organization security

interest, the holder thereof in the amount secured thereby;

(2) the satisfaction of obligations secured by the security

interest or agricultural lien under which the disposition is

made;

(3) the satisfaction of obligations secured by any subordinate

security interest in or other subordinate lien on the

collateral if:

(A) the secured party receives from the holder of the

subordinate security interest or other lien an

authenticated demand for proceeds before distribution of

the proceeds is completed; and

(B) in a case in which a consignor has an interest in the

collateral, the subordinate security interest or other

lien is senior to the interest of the consignor; and

(4) a secured party that is a consignor of the collateral if the

secured party receives from the consignor an authenticated

demand for proceeds before distribution of the proceeds is

completed.

(b) Proof of subordinate interest. If requested by a secured party, a
holder of a subordinate security interest or other lien shall furnish
reasonable proof of the interest or lien within a reasonable time.
Unless the holder does so, the secured party need not comply with the
holder's demand under subsection (a) (3).

(c) Application of noncash proceeds. A secured party need not apply or
pay over for application noncash proceeds of disposition under Section
9--610 unless the failure to do so would be commercially unreasonable. A
secured party that applies or pays over for application noncash proceeds
shall do so in a commercially reasonable manner.

(d) Surplus or deficiency if obligation secured. If the security
interest under which a disposition is made secures payment or
performance of an obligation, after making the payments and applications
required by subsection (a) and permitted by subsection (c):

(1) unless subsection (a)(4) requires the secured party to apply

or pay over cash proceeds to a consignor, the secured party

shall account to and pay a debtor for any surplus; and

(2) the obligor is liable for any deficiency.

(e) No surplus or deficiency in sales of certain rights to payment. If
the underlying transaction is a sale of accounts, chattel paper, payment
intangibles, or promissory notes:

(1) the debtor is not entitled to any surplus; and

(2) the obligor is not liable for any deficiency.

(f) Calculation of surplus or deficiency in disposition to person
related to secured party. The surplus or deficiency following a
disposition is calculated based on the amount of proceeds that would
have been realized in a disposition complying with this part to a
transferee other than the secured party, a person related to the secured
party, or a secondary obligor if:

(1) the transferee in the disposition is the secured party, a

person related to the secured party, or a secondary obligor;

and

(2) the amount of proceeds of the disposition is significantly

below the range of proceeds that a complying disposition to a

person other than the secured party, a person related to the

secured party, or a secondary obligor would have brought.

(g) Cash proceeds received by junior secured party. A secured party
that receives cash proceeds of a disposition in good faith and without
knowledge that the receipt violates the rights of the holder of a
security interest or other lien that is not subordinate to the security
interest or agricultural lien under which the disposition is made:

(1) takes the cash proceeds free of the security interest or

other lien;

(2) is not obligated to apply the proceeds of the disposition to

the satisfaction of obligations secured by the security

interest or other lien; and

(3) is not obligated to account to or pay the holder of the

security interest or other lien for any surplus.