44-7016

44-7016. Transferable records;
definition

A. A person has control of a transferable record if a system employed for
evidencing the transfer of interests in the transferable record reliably establishes that
person as the person to which the transferable record was issued or transferred.

B. A system complies with subsection A and a person has control of a transferable
record if the transferable record is created, stored and assigned in such a manner that
all of the following are true:

1. A single authoritative copy of the transferable record exists that is unique,
identifiable and, except as otherwise provided in paragraphs 4, 5 and 6 of this
subsection, unalterable.

2. The authoritative copy identifies the person asserting control as either:

(a) The person to which the transferable record was issued.

(b) If the authoritative copy indicates that the transferable record has been
transferred, the person to which the transferable record was most recently transferred.

3. The authoritative copy is communicated to and maintained by the person asserting
control or the person's designated custodian.

4. Copies or revisions that add or change an identified assignee of the
authoritative copy can be made only with the consent of the person asserting control.

5. Each copy of the authoritative copy and any copy of a copy is readily
identifiable as a copy that is not the authoritative copy.

6. Any revision of the authoritative copy is readily identifiable as authorized or
unauthorized.

C. Except as otherwise agreed, a person that has control of a transferable record
is the holder as defined in section 47-1201 of the transferable record and has the same
rights and defenses as a holder of an equivalent record or writing pursuant to title 47
including, if the applicable requirements under section 47-3302, subsection A or section
47-7501 or 47-9308 are satisfied, the rights and defenses of a holder in due course, a
holder to which a negotiable document of title has been duly negotiated or a purchaser,
respectively. Delivery, possession and indorsement are not required to obtain or exercise
any of the rights under this subsection.

D. Except as otherwise agreed, an obligor under a transferable record has the same
rights and defenses as an equivalent obligor under equivalent records or writings under
title 47.

E. If requested by a person against which enforcement is sought, the person seeking
to enforce the transferable record shall provide reasonable proof that the person is in
control of the transferable record. Proof may include access to the authoritative copy of
the transferable record and related business records that are sufficient to review the
terms of the transferable record and to establish the identity of the person that has
control of the transferable record.

F. For the purposes of this section, "transferable record" means an electronic
record that both:

1. Would be a note pursuant to title 47, chapter 3 or a document pursuant to title
47, chapter 7 if the electronic record were in writing.

2. The issuer has expressly agreed the electronic record is a transferable record.