Ch. 91

1996 LAWS OF MARYLAND

MODIFICATION IS EQUAL TO THE AMOUNT OF THE RIGHT OF RECOURSE UNLESS
THE PERSON ENFORCING THE INSTRUMENT PROVES THAT NO LOSS WAS CAUSED BY
THE MODIFICATION OR THAT THE LOSS CAUSED BY THE MODIFICATION WAS AN
AMOUNT LESS THAN THE AMOUNT OF THE RIGHT OF RECOURSE

(E)     IF THE OBLIGATION OF A PARTY TO PAY AN INSTRUMENT IS SECURED BY
AN INTEREST IN COLLATERAL AND A PERSON ENTITLED TO ENFORCE THE
INSTRUMENT IMPAIRS THE VALUE OF THE INTEREST IN COLLATERAL, THE
OBLIGATION OF AN INDORSER OR ACCOMMODATION PARTY HAVING A RIGHT OF
RECOURSE AGAINST THE OBLIGOR IS DISCHARGED TO THE EXTENT OF THE
IMPAIRMENT. THE VALUE OF AN INTEREST IN COLLATERAL IS IMPAIRED TO THE
EXTENT (I) THE VALUE OF THE INTEREST IS REDUCED TO AN AMOUNT LESS THAN
THE AMOUNT OF THE RIGHT OF RECOURSE OF THE PARTY ASSERTING DISCHARGE,
OR (II) THE REDUCTION IN VALUE OF THE INTEREST CAUSES AN INCREASE IN THE
AMOUNT BY WHICH THE AMOUNT OF THE RIGHT OF RECOURSE EXCEEDS THE
VALUE OF THE INTEREST. THE BURDEN OF PROVING IMPAIRMENT IS ON THE PARTY
ASSERTING DISCHARGE

(F)     IF THE OBLIGATION OF A PARTY IS SECURED BY AN INTEREST IN
COLLATERAL NOT PROVIDED BY AN ACCOMMODATION PARTY AND A PERSON
ENTITLED TO ENFORCE THE INSTRUMENT IMPAIRS THE VALUE OF THE INTEREST IN
COLLATERAL, THE OBLIGATION OF ANY PARTY WHO IS JOINTLY AND SEVERALLY
LIABLE WITH RESPECT TO THE SECURED OBLIGATION IS DISCHARGED TO THE
EXTENT THE IMPAIRMENT CAUSES THE PARTY ASSERTING DISCHARGE TO PAY
MORE THAN THAT PARTY WOULD HAVE BEEN OBLIGED TO PAY, TAKING INTO
ACCOUNT RIGHTS OF CONTRIBUTION, IF IMPAIRMENT HAD NOT OCCURRED. IF THE
PARTY ASSERTING DISCHARGE IS AN ACCOMMODATION PARTY NOT ENTITLED TO
DISCHARGE UNDER SUBSECTION (E), THE PARTY IS DEEMED TO HAVE A RIGHT TO
CONTRIBUTION BASED ON JOINT AND SEVERAL LIABILITY RATHER THAN A RIGHT
TO REIMBURSEMENT. THE BURDEN OF PROVING IMPAIRMENT IS ON THE PARTY
ASSERTING DISCHARGE

(G)    UNDER SUBSECTION (E) OR (F), IMPAIRING VALUE OF AN INTEREST IN
COLLATERAL INCLUDES (I) FAILURE TO OBTAIN OR MAINTAIN PERFECTION OR
RECORDATION OF THE INTEREST IN COLLATERAL, (II) RELEASE OF COLLATERAL
WITHOUT SUBSTITUTION OF COLLATERAL OF EQUAL VALUE, (III) FAILURE TO
PERFORM A DUTY TO PRESERVE THE VALUE OF COLLATERAL OWED, UNDER
ARTICLE 9 OR OTHER LAW, TO A DEBTOR OR SURETY OR OTHER PERSON
SECONDARILY LIABLE, OR (IV) FAILURE TO COMPLY WITH APPLICABLE LAW IN
DISPOSING OF COLLATERAL.

(H) AN ACCOMMODATION PARTY IS NOT DISCHARGED UNDER SUBSECTION
(C), (D), OR (E) UNLESS THE PERSON ENTITLED TO ENFORCE THE INSTRUMENT
KNOWS OF THE ACCOMMODATION OR HAS NOTICE UNDER § 3-419(C) THAT THE
INSTRUMENT WAS SIGNED FOR ACCOMMODATION.

(I) A PARTY IS NOT DISCHARGED UNDER THIS SECTION IF (I) THE PARTY
ASSERTING DISCHARGE CONSENTS TO THE EVENT OR CONDUCT THAT IS THE BASIS
OF THE DISCHARGE, OR (II) THE INSTRUMENT OR A SEPARATE AGREEMENT OF THE
PARTY PROVIDES FOR WAIVER OF DISCHARGE UNDER THIS SECTION EITHER

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