In what context can proceeds attached to a security interest?

Proceeds can attach to a security interest when they are identifiable and linked to the original collateral. In secured transactions, the concept of "proceeds" refers to the money or items derived from the sale, lease, or other disposition of the collateral. This means that if the collateral is sold or otherwise converted into a different form, the rights to those new items (the proceeds) can also be covered under the security interest, as long as they can be traced back to the original collateral.

This is significant because it allows creditors to maintain a security interest even when the nature of the collateral changes, providing additional security and assurance that they will be able to recover value even if the original asset is no longer in existence in its original form.

In contrast, the other options are limited in scope. The first choice, which requires mention in a written agreement, is too restrictive since proceeds can attach through operation of law under the UCC even if not explicitly detailed in the agreement, as long as the linkage to the collateral is clear. The third choice inaccurately suggests that only cash qualifies as proceeds, whereas proceeds can be in various forms, not just cash. Finally, the last option stating that proceeds do not attach is incorrect, as it contradicts