HARRY HUGHES, Governor

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(5)  IF THE ISSUER OF AN UNCERTIFICATED SECURITY IS UNDER A
DUTY AS TO AN ADVERSE CLAIM, HE DISCHARGES THAT DUTY BY:

(A)  INCLUDING A NOTATION OF THE CLAIM IN ANY
STATEMENTS SENT WITH RESPECT TO THE SECURITY UNDER § 8-408(3),
(6), AND (7); AND

(B)  REFUSING TO REGISTER THE TRANSFER OR PLEDGE OF
THE SECURITY UNLESS THE NATURE OF THE CLAIM DOES NOT PRECLUDE
TRANSFER OR PLEDGE SUBJECT THERETO.

(6)  IF THE TRANSFER OR PLEDGE OF THE SECURITY IS REGISTERED
SUBJECT TO AN ADVERSE CLAIM, A NOTATION OF THE CLAIM MUST BE
INCLUDED IN THE INITIAL TRANSACTION STATEMENT AND ALL SUBSEQUENT
STATEMENTS SENT TO THE TRANSFEREE AND PLEDGEE UNDER § 8-408.

(7)  NOTWITHSTANDING SUBSECTIONS (4) AND (5), IF AN
UNCERTIFICATED SECURITY WAS SUBJECT TO A REGISTERED PLEDGE AT THE
TIME THE ISSUER FIRST CAME UNDER A DUTY AS TO A PARTICULAR
ADVERSE CLAIM, THE ISSUER HAS NO DUTY AS TO THAT CLAIM IF
TRANSFER OF THE SECURITY IS REQUESTED BY THE REGISTERED PLEDGEE
OR AN APPROPRIATE PERSON ACTING FOR THE REGISTERED PLEDGEE
UNLESS:

(A)  THE CLAIM WAS EMBODIED IN LEGAL PROCESS WHICH
EXPRESSLY PROVIDES OTHERWISE;

(B)  THE CLAIM WAS ASSERTED IN A WRITTEN NOTIFICATION
FROM THE REGISTERED PLEDGEE;

(C)  THE CLAIM WAS ONE AS TO WHICH THE ISSUER WAS
CHARGED WITH NOTICE FROM A CONTROLLING INSTRUMENT IT REQUIRED
UNDER § 8-402(4) IN CONNECTION WITH THE PLEDGEE'S REQUEST FOR
TRANSFER; OR

(D)  THE TRANSFER REQUESTED IS TO THE REGISTERED
OWNER.

8-404.

(1)  Except as [otherwise] provided in any law relating to
the collection of taxes, the issuer is not liable to the owner,
PLEDGEE or any other person suffering loss as a result of the
registration of a transfer, PLEDGE OR RELEASE of a security if:

(a)  There were on or with [the] A CERTIFICATED
security the necessary indorsements OR THE ISSUER HAD RECEIVED AN
INSTRUCTION ORIGINATED BY AN APPROPRIATE PERSON (§ 8-308); and

(b)  The issuer had no duty [to inquire into] AS TO
adverse claims or has discharged [any such] THE duty (§ 8-403).

(2)   [Where] IF an issuer has registered a transfer of a
CERTIFICATED security to a person not entitled to it the issuer