2722

LAWS OF MARYLAND

Ch. 720

8-208.

(1)  A person placing his signature upon a CERTIFICATED
security OR AN INITIAL TRANSACTION STATEMENT as authenticating
trustee, registrar, transfer agent or the like warrants to a
purchaser for value OF THE CERTIFICATED SECURITY OR A PURCHASER
FOR VALUE OF AN UNCERTIFICATED SECURITY TO WHOM THE INITIAL
TRANSACTION STATEMENT HAS BEEN SENT, IF THE PURCHASER IS without
notice of the particular defect, that:

(a)  The CERTIFICATED security OR INITIAL TRANSACTION
STATEMENT is genuine; [and]

(b)  His own participation in the issue OR
REGISTRATION OF THE TRANSFER, PLEDGE OR RELEASE of the security
is within his capacity and within the scope of the
[authorization] AUTHORITY received by him from the issuer; and

(c)  He has reasonable grounds to believe that the
security is in the form and within the amount the issuer is
authorized to issue.

(2)  Unless otherwise agreed, a person by so placing his
signature does not assume responsibility for the validity of the
security in other respects.

Subtitle 3. [Purchase] TRANSFER

8-301.

(1)  Upon [delivery] TRANSFER of a security TO A PURCHASER
(§ 8-313), the purchaser acquires the rights in the security
which his transferor had or had actual authority to convey UNLESS
THE PURCHASER'S RIGHTS ARE LIMITED BY § 8-302(4). [except that a
purchaser who has himself been a party to any fraud or illegality
affecting the security or who as a prior holder had notice of an
adverse claim cannot improve his position by taking from a later
bona fide purchaser. "Adverse claim" includes a claim that a
transfer was or would be wrongful or that a particular adverse
person is the owner of or has an interest in the security.]

(2)   [A bona fide purchaser in addition to acquiring the
rights of a purchaser also acquires the security free of any
adverse claim.

(3)] A [purchaser] TRANSFEREE of a limited interest
acquires rights only to the extent of the interest [purchased]
TRANSFERRED. THE CREATION OR RELEASE OF A SECURITY INTEREST IN A
SECURITY IS THE TRANSFER OF A LIMITED INTEREST IN THAT SECURITY.

8-302.

(1) A "bona fide purchaser" is a purchaser for value in
good faith and without notice of any adverse claim: