§490:8-403  Demand that issuer not register
transfer.  (a)  A person who is an appropriate person to make an
indorsement or originate an instruction may demand that the issuer not register
transfer of a security by communicating to the issuer a notification that
identifies the registered owner and the issue of which the security is a part
and provides an address for communications directed to the person making the
demand.  The demand is effective only if it is received by the issuer at a time
and in a manner affording the issuer reasonable opportunity to act on it.



(b)  If a certificated security in registered
form is presented to an issuer with a request to register transfer or an
instruction is presented to an issuer with a request to register transfer of an
uncertificated security after a demand that the issuer not register transfer
has become effective, the issuer shall promptly communicate to (i) the person
who initiated the demand at the address provided in the demand, and (ii) the
person who presented the security for registration of transfer or initiated the
instruction requesting registration of transfer a notification stating that:



(1)  The certificated security has been presented for
registration of transfer or the instruction for registration of transfer of the
uncertificated security has been received;



(2)  A demand that the issuer not register transfer
had previously been received; and



(3)  The issuer will withhold registration of transfer
for a period of time stated in the notification in order to provide the person
who initiated the demand an opportunity to obtain legal process or an indemnity
bond.



(c)  The period described in subsection (b)(3)
may not exceed thirty days after the date of communication of the
notification.  A shorter period may be specified by the issuer if it is not
manifestly unreasonable.



(d)  An issuer is not liable to a person who
initiated a demand that the issuer not register transfer for any loss the
person suffers as a result of registration of a transfer pursuant to an
effective indorsement or instruction if the person who initiated the demand
does not, within the time stated in the issuer's communication, either:



(1)  Obtain an appropriate restraining order,
injunction, or other process from a court of competent jurisdiction enjoining
the issuer from registering the transfer; or



(2)  File with the issuer an indemnity bond,
sufficient in the issuer's judgment to protect the issuer and any transfer
agent, registrar, or other agent of the issuer involved from any loss it or
they may suffer by refusing to register the transfer.



(e)  This section does not relieve an issuer
from liability for registering transfer pursuant to an indorsement or
instruction that was not effective. [L 1997, c 33, pt of §2]