47-8306

47-8306. Effect of guaranteeing signature,
indorsement or instruction

A. A person who guarantees a signature of an indorser of a security certificate
warrants that at the time of signing:

1. The signature was genuine;

2. The signer was an appropriate person to indorse, or if the signature is by an
agent, the agent had actual authority to act on behalf of the appropriate person; and

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:

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; and

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 subsection B and also
warrants that at the time the instruction is presented to the issuer:

1. The person specified in the instruction as the registered owner of the
uncertificated security will be the registered owner; and

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 subsections A and B or a special guarantor under subsection C
does not otherwise warrant the rightfulness of the transfer.

E. A person who guarantees an indorsement of a security certificate makes the
warranties of a signature guarantor under subsection 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
subsection 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
indorsement, 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 indorser or originator of an instruction whose
signature, indorsement 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.