PARRIS N. GLENDENING, Governor                               Ch. 91

3-203.

(A)    AN INSTRUMENT IS TRANSFERRED WHEN IT IS DELIVERED BY A PERSON
OTHER THAN ITS ISSUER FOR THE PURPOSE OF GIVING TO THE PERSON RECEIVING
DELIVERY THE RIGHT TO ENFORCE THE INSTRUMENT.

(B)     TRANSFER OF AN INSTRUMENT, WHETHER OR NOT THE TRANSFER IS A
NEGOTIATION, VESTS IN THE TRANSFEREE ANY RIGHT OF THE TRANSFEROR TO
ENFORCE THE INSTRUMENT, INCLUDING ANY RIGHT AS A HOLDER IN DUE COURSE,
BUT THE TRANSFEREE CANNOT ACQUIRE RIGHTS OF A HOLDER IN DUE COURSE BY
A TRANSFER, DIRECTLY OR INDIRECTLY, FROM A HOLDER IN DUE COURSE IF THE
TRANSFEREE ENGAGED IN FRAUD OR ILLEGALITY AFFECTING THE INSTRUMENT.

(C)     UNLESS OTHERWISE AGREED, IF AN INSTRUMENT IS TRANSFERRED FOR
VALUE AND THE TRANSFEREE DOES NOT BECOME A HOLDER BECAUSE OF LACK OF
INDORSEMENT BY THE TRANSFEROR, THE TRANSFEREE HAS A SPECIFICALLY
ENFORCEABLE RIGHT TO THE UNQUALIFIED INDORSEMENT OF THE TRANSFEROR,
BUT NEGOTIATION OF THE INSTRUMENT DOES NOT OCCUR UNTIL THE
INDORSEMENT IS MADE.

(D)    IF A TRANSFEROR PURPORTS TO TRANSFER LESS THAN THE ENTIRE
INSTRUMENT, NEGOTIATION OF THE INSTRUMENT DOES NOT OCCUR. THE
TRANSFEREE OBTAINS NO RIGHTS UNDER THIS TITLE AND HAS ONLY THE RIGHTS
OF A PARTIAL ASSIGNEE.

3-204.

(A)    "INDORSEMENT" MEANS A SIGNATURE, OTHER THAN THAT OF A SIGNER
AS MAKER, DRAWER, OR ACCEPTOR, THAT ALONE OR ACCOMPANIED BY OTHER
WORDS IS MADE ON AN INSTRUMENT FOR THE PURPOSE OF (I) NEGOTIATING THE
INSTRUMENT, (II) RESTRICTING PAYMENT OF THE INSTRUMENT, OR (III) INCURRING
INDORSER'S LIABILITY ON THE INSTRUMENT, BUT REGARDLESS OF THE INTENT OF
THE SIGNER, A SIGNATURE AND ITS ACCOMPANYING WORDS IS AN INDORSEMENT
UNLESS THE ACCOMPANYING WORDS, TERMS OF THE INSTRUMENT, PLACE OF THE
SIGNATURE, OR OTHER CIRCUMSTANCES UNAMBIGUOUSLY INDICATE THAT THE
SIGNATURE WAS MADE FOR A PURPOSE OTHER THAN INDORSEMENT. FOR THE
PURPOSE OF DETERMINING WHETHER A SIGNATURE IS MADE ON AN INSTRUMENT,
A PAPER AFFIXED TO THE INSTRUMENT IS A PART OF THE INSTRUMENT.

(B)     "INDORSER" MEANS A PERSON WHO MAKES AN INDORSEMENT.

(C)     FOR THE PURPOSE OF DETERMINING WHETHER THE TRANSFEREE OF AN
INSTRUMENT IS A HOLDER, AN INDORSEMENT THAT TRANSFERS A SECURITY
INTEREST IN THE INSTRUMENT IS EFFECTIVE AS AN UNQUALIFIED INDORSEMENT
OF THE INSTRUMENT.

(D)    IF AN INSTRUMENT IS PAYABLE TO A HOLDER UNDER A NAME THAT IS
NOT THE NAME OF THE HOLDER, INDORSEMENT MAY BE MADE BY THE HOLDER IN
THE NAME STATED IN THE INSTRUMENT OR IN THE HOLDER'S NAME OR BOTH, BUT
SIGNATURE IN BOTH NAMES MAY BE REQUIRED BY A PERSON PAYING OR TAKING
THE INSTRUMENT FOR VALUE OR COLLECTION.

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