8201-8210

COMMERCIAL CODE
SECTION 8201-8210




8201.  (a) With respect to an obligation on or a defense to a
security, an "issuer" includes a person that does any of the
following:
   (1) Places or authorizes the placing of its name on a security
certificate, other than as authenticating trustee, registrar,
transfer agent, or the like, to evidence a share, participation, or
other interest in its property or in an enterprise, or to evidence
its duty to perform an obligation represented by the certificate.
   (2) Creates a share, participation, or other interest in its
property or in an enterprise, or undertakes an obligation, that is an
uncertificated security.
   (3) Directly or indirectly creates a fractional interest in its
rights or property, if the fractional interest is represented by a
security certificate.
   (4) Becomes responsible for, or in place of, another person
described as an issuer in this section.
   (b) With respect to an obligation on or defense to a security, a
guarantor is an issuer to the extent of its guaranty, whether or not
its obligation is noted on a security certificate.
   (c) With respect to a registration of a transfer, issuer means a
person on whose behalf transfer books are maintained.



8202.  (a) Even against a purchaser for value and without notice,
the terms of a certificated security include terms stated on the
certificate and terms made part of the security by reference on the
certificate to another instrument, indenture, or document or to a
constitution, statute, ordinance, rule, regulation, order, or the
like, to the extent the terms referred to do not conflict with terms
stated on the certificate. A reference under this subdivision does
not of itself charge a purchaser for value with notice of a defect
going to the validity of the security, even if the certificate
expressly states that a person accepting it admits notice. The terms
of an uncertificated security include those stated in any instrument,
indenture, or document or in a constitution, statute, ordinance,
rule, regulation, order, or the like, pursuant to which the security
is issued.
   (b) The following rules apply if an issuer asserts that a security
is not valid:
   (1) A security other than one issued by a government or
governmental subdivision, agency, or instrumentality, even though
issued with a defect going to its validity, is valid in the hands of
a purchaser for value and without notice of the particular defect
unless the defect involves a violation of a constitutional provision.
In that case, the security is valid in the hands of a purchaser for
value and without notice of the defect, other than one who takes by
original issue.
   (2) Paragraph (1) applies to an issuer that is a government or
governmental subdivision, agency, or instrumentality only if there
has been substantial compliance with the legal requirements governing
the issue or the issuer has received a substantial consideration for
the issue as a whole or for the particular security and a stated
purpose of the issue is one for which the issuer has power to borrow
money or issue the security.
   (c) Except as otherwise provided in Section 8205, lack of
genuineness of a certificated security is a complete defense, even
against a purchaser for value and without notice.
   (d) All other defenses of the issuer of a security, including
nondelivery and conditional delivery of a certificated security, are
ineffective against a purchaser for value who has taken the
certificated security without notice of the particular defense.
   (e) This section does not affect the right of a party to cancel a
contract for a security "when, as and if issued" or "when distributed"
in the event of a material change in the character of the security
that is the subject of the contract or in the plan or arrangement
pursuant to which the security is to be issued or distributed.
   (f) If a security is held by a securities intermediary against
whom an entitlement holder has a security entitlement with respect to
the security, the issuer may not assert any defense that the issuer
could not assert if the entitlement holder held the security
directly.


8203.  After an act or event, other than a call that has been
revoked, creating a right to immediate performance of the principal
obligation represented by a certificated security or setting a date
on or after which the security is to be presented or surrendered for
redemption or exchange, a purchaser is charged with notice of any
defect in its issue or defense of the issuer, if the act or event
either:
   (1) Requires the payment of money, the delivery of a certificated
security, the registration of transfer of an uncertificated security,
or any of them on presentation or surrender of the security
certificate, the money or security is available on the date set for
payment or exchange, and the purchaser takes the security more than
one year after that date.
   (2) Is not covered by paragraph (1) and the purchaser takes the
security more than two years after the date set for surrender or
presentation or the date on which performance became due.



8204.  A restriction on transfer of a security imposed by the
issuer, even if otherwise lawful, is ineffective against a person
without knowledge of the restriction unless either of the following
applies:
   (1) The security is certificated and the restriction is noted
conspicuously on the security certificate.
   (2) The security is uncertificated and the registered owner has
been notified of the restriction.



8205.  An unauthorized signature placed on a security certificate
before or in the course of issue is ineffective, but the signature is
effective in favor of a purchaser for value of the certificated
security if the purchaser is without notice of the lack of authority
and the signing has been done by one of the following:
   (1) An authenticating trustee, registrar, transfer agent, or other
person entrusted by the issuer with the signing of the security
certificate or of similar security certificates, or the immediate
preparation for signing of any of them.
   (2) An employee of the issuer, or of any of the persons listed in
paragraph (1), entrusted with responsible handling of the security
certificate.


8206.  (a) If a security certificate contains the signatures
necessary to its issue or transfer but is incomplete in any other
respect, the following apply:
   (1) Any person may complete it by filling in the blanks as
authorized.
   (2) Even if the blanks are incorrectly filled in, the security
certificate as completed is enforceable by a purchaser who took it
for value and without notice of the incorrectness.
   (b) A complete security certificate that has been improperly
altered, even if fraudulently, remains enforceable, but only
according to its original terms.



8207.  (a) Before due presentment for registration of transfer of a
certificated security in registered form or of an instruction
requesting registration of transfer of an uncertificated security,
the issuer or indenture trustee may treat the registered owner as the
person exclusively entitled to vote, receive notifications, and
otherwise exercise all the rights and powers of an owner.
   (b) This division does not affect the liability of the registered
owner of a security for a call, assessment, or the like.



8208.  (a) A person signing a security certificate as authenticating
trustee, registrar, transfer agent, or the like, warrants all of the
following to a purchaser for value of the certificated security, if
the purchaser is without notice of a particular defect:
   (1) The certificate is genuine.
   (2) The person's own participation in the issue of the security is
within the person's capacity and within the scope of the authority
received by the person from the issuer.
   (3) The person has reasonable grounds to believe that the
certificated security is in the form and within the amount the issuer
is authorized to issue.
   (b) Unless otherwise agreed, a person signing under subdivision
(a) does not assume responsibility for the validity of the security
in other respects.


8209.  A lien in favor of an issuer upon a certificated security is
valid against a purchaser only if the right of the issuer to the lien
is noted conspicuously on the security certificate.



8210.  (a) In this section, "overissue" means the issue of
securities in excess of the amount the issuer has corporate power to
issue, but an overissue does not occur if appropriate action has
cured the overissue.
   (b) Except as otherwise provided in subdivisions (c) and (d), the
provisions of this division that validate a security or compel its
issue or reissue do not apply to the extent that validation, issue,
or reissue would result in overissue.
   (c) If an identical security not constituting an overissue is
reasonably available for purchase, a person entitled to issue or
validation may compel the issuer to purchase the security and deliver
it if certificated or register its transfer if uncertificated,
against surrender of any security certificate the person holds.
   (d) If a security is not reasonably available for purchase, a
person entitled to issue or validation may recover from the issuer
the price the person or the last purchaser for value paid for it with
interest from the date of the person's demand.