8301-8307

COMMERCIAL CODE
SECTION 8301-8307




8301.  (a) Delivery of a certificated security to a purchaser occurs
when any of the following occur:
   (1) The purchaser acquires possession of the security certificate.
   (2) Another person, other than a securities intermediary, either
acquires possession of the security certificate on behalf of the
purchaser or, having previously acquired possession of the
certificate, acknowledges that it holds for the purchaser.
   (3) A securities intermediary acting on behalf of the purchaser
acquires possession of the security certificate, only if the
certificate is in registered form and is (A) registered in the name
of the purchaser, (B) payable to the order of the purchaser, or (C)
specially endorsed to the purchaser by an effective endorsement and
has not been endorsed to the securities intermediary or in blank.
   (b) Delivery of an uncertificated security to a purchaser occurs
when any of the following occur:
   (1) The issuer registers the purchaser as the registered owner,
upon original issue or registration of transfer.
   (2) Another person, other than a securities intermediary, either
becomes the registered owner of the uncertificated security on behalf
of the purchaser or, having previously become the registered owner,
acknowledges that it holds for the purchaser.



8302.  (a) Except as otherwise provided in subdivisions (b) and (c),
a purchaser of a certificated or uncertificated security acquires
all rights in the security that the transferor had or had power to
transfer.
   (b) A purchaser of a limited interest acquires rights only to the
extent of the interest purchased.
   (c) A purchaser of a certificated security who as a previous
holder had notice of an adverse claim does not improve its position
by taking from a protected purchaser.



8303.  (a) "Protected purchaser" means a purchaser of a certificated
or uncertificated security, or of an interest therein, who does all
of the following:
   (1) Gives value.
   (2) Does not have notice of any adverse claim to the security.
   (3) Obtains control of the certificated or uncertificated
security.
   (b) In addition to acquiring the rights of a purchaser, a
protected purchaser also acquires its interest in the security free
of any adverse claim.


8304.  (a) An endorsement may be in blank or special. An endorsement
in blank includes an endorsement to bearer. A special endorsement
specifies to whom a security is to be transferred or who has power to
transfer it. A holder may convert a blank endorsement to a special
endorsement.
   (b) An endorsement purporting to be only of part of a security
certificate representing units intended by the issuer to be
separately transferable is effective to the extent of the
endorsement.
   (c) An endorsement, whether special or in blank, does not
constitute a transfer until delivery of the certificate on which it
appears or, if the endorsement is on a separate document, until
delivery of both the document and the certificate.
   (d) If a security certificate in registered form has been
delivered to a purchaser without a necessary endorsement, the
purchaser may become a protected purchaser only when the endorsement
is supplied. However, against a transferor, a transfer is complete
upon delivery and the purchaser has a specifically enforceable right
to have any necessary endorsement supplied.
   (e) An endorsement of a security certificate in bearer form may
give notice of an adverse claim to the certificate, but it does not
otherwise affect a right to registration that the holder possesses.
   (f) Unless otherwise agreed, a person making an endorsement
assumes only the obligations provided in Section 8108 and not an
obligation that the security will be honored by the issuer.



8305.  (a) If an instruction has been originated by an appropriate
person but is incomplete in any other respect, any person may
complete it as authorized and the issuer may rely on it as completed,
even though it has been completed incorrectly.
   (b) Unless otherwise agreed, a person initiating an instruction
assumes only the obligations imposed by Section 8108 and not an
obligation that the security will be honored by the issuer.



8306.  (a) A person who guarantees a signature of an endorser of a
security certificate warrants that at the time of signing all of the
following were true:
   (1) The signature was genuine.
   (2) The signer was an appropriate person to endorse, or if the
signature is by an agent, the agent had actual authority to act on
behalf of the appropriate person.
   (3) The signer had legal capacity to sign.
   (b) A person who guarantees a signature of the originator of an
instruction warrants that at the time of signing all of the following
were true:
   (1) The signature was genuine.
   (2) The signer was an appropriate person to originate the
instruction, or if the signature is by an agent, the agent had actual
authority to act on behalf of the appropriate person, if the person
specified in the instruction as the registered owner was, in fact,
the registered owner, as to which fact the signature guarantor does
not make a warranty.
   (3) The signer had legal capacity to sign.
   (c) A person who specially guarantees the signature of an
originator of an instruction makes the warranties of a signature
guarantor under subdivision (b) and also warrants that at the time
the instruction is presented to the issuer all of the following are
true:
   (1) The person specified in the instruction as the registered
owner of the uncertificated security will be the registered owner.
   (2) The transfer of the uncertificated security requested in the
instruction will be registered by the issuer free from all liens,
security interests, restrictions, and claims other than those
specified in the instruction.
   (d) A guarantor under subdivisions (a) and (b) or a special
guarantor under subdivision (c) does not otherwise warrant the
rightfulness of the transfer.
   (e) A person who guarantees an endorsement of a security
certificate makes the warranties of a signature guarantor under
subdivision (a) and also warrants the rightfulness of the transfer in
all respects.
   (f) A person who guarantees an instruction requesting the transfer
of an uncertificated security makes the warranties of a special
signature guarantor under subdivision (c) and also warrants the
rightfulness of the transfer in all respects.
   (g) An issuer may not require a special guaranty of signature, a
guaranty of endorsement, or a guaranty of instruction as a condition
to registration of transfer.
   (h) The warranties under this section are made to a person taking
or dealing with the security in reliance on the guaranty, and the
guarantor is liable to the person for loss resulting from their
breach. An endorser or originator of an instruction whose signature,
endorsement, or instruction has been guaranteed is liable to a
guarantor for any loss suffered by the guarantor as a result of
breach of the warranties of the guarantor.



8307.  Unless otherwise agreed, the transferor of a security on due
demand shall supply the purchaser with proof of authority to transfer
or with any other requisite necessary to obtain registration of the
transfer of the security, but if the transfer is not for value, a
transferor need not comply unless the purchaser pays the necessary
expenses. If the transferor fails within a reasonable time to comply
with the demand, the purchaser may reject or rescind the transfer.