(1) A security holder shall
take reasonable care of the collateral in the security holder’s custody and
protection .
(2) Except as otherwise agreed, if a collateral is in the security
holder’s possession, the following provisions shall apply:
20
(a) the liability of the security giver shall be to pay reasonable
expenses including the cost of insurance of the collateral and
taxes or fees associated with the collateral, and such expenses
shall be realized from the collateral;
(b) in the event of accidental loss of or damage to the collateral, the
security giver shall bear the risk up to the extent not covered by
insurance;
(c) the security holder shall hold as additional security any increase,
except money, received from the collateral and may apply such
money to reduce the secured obligation unless the money is
reimbursed to the security giver.