§12A-8-108.

§12A-8-108.
   
   Warranties in Direct Holding.
   
   (a) A person who transfers a certificated security to a purchaser for
   value warrants to the purchaser, and an indorser, if the transfer is
   by indorsement, warrants to any subsequent purchaser, that:
   
   (1) the certificate is genuine and has not been materially altered;
   
   (2) the transferor or indorser does not know of any fact that might
   impair the validity of the security;
   
   (3) there is no adverse claim to the security;
   
   (4) the transfer does not violate any restriction on transfer;
   
   (5) if the transfer is by indorsement, the indorsement is made by an
   appropriate person, or if the indorsement is by an agent, the agent
   has actual authority to act on behalf of the appropriate person; and
   
   (6) the transfer is otherwise effective and rightful.
   
   (b) A person who originates an instruction for registration of
   transfer of an uncertificated security to a purchaser for value
   warrants to the purchaser that:
   
   (1) the instruction is made by an appropriate person, or if the
   instruction is by an agent, the agent has actual authority to act on
   behalf of the appropriate person;
   
   (2) the security is valid;
   
   (3) there is no adverse claim to the security; and
   
   (4) at the time the instruction is presented to the issuer:
   
   (i) the purchaser will be entitled to the registration of transfer;
   
   (ii) the transfer will be registered by the issuer free from all
   liens, security interests, restrictions, and claims other than those
   specified in the instruction;
   
   (iii) the transfer will not violate any restriction on transfer; and
   
   (iv) the requested transfer will otherwise be effective and rightful.
   
   (c) A person who transfers an uncertificated security to a purchaser
   for value and does not originate an instruction in connection with the
   transfer warrants that:
   
   (1) the uncertificated security is valid;
   
   (2) there is no adverse claim to the security;
   
   (3) the transfer does not violate any restriction on transfer; and
   
   (4) the transfer is otherwise effective and rightful.
   
   (d) A person who indorses a security certificate warrants to the
   issuer that:
   
   (1) there is no adverse claim to the security; and
   
   (2) the indorsement is effective.
   
   (e) A person who originates an instruction for registration of
   transfer of an uncertificated security warrants to the issuer that:
   
   (1) the instruction is effective; and
   
   (2) at the time the instruction is presented to the issuer, the
   purchaser will be entitled to the registration of transfer.
   
   (f) A person who presents a certificated security for registration of
   transfer or for payment or exchange warrants to the issuer that the
   person is entitled to the registration, payment, or exchange, but a
   purchaser for value and without notice of adverse claims to whom
   transfer is registered warrants only that the person has no knowledge
   of any unauthorized signature in a necessary indorsement.
   
   (g) If a person acts as agent of another in delivering a certificated
   security to a purchaser, the identity of the principal was known to
   the person to whom the certificate was delivered, and the certificate
   delivered by the agent was received by the agent from the principal or
   received by the agent from another person at the direction of the
   principal, the person delivering the security certificate warrants
   that the delivering person has authority to act for the principal and
   does not know of any adverse claim to the certificated security.
   
   (h) A secured party who redelivers a security certificate received, or
   after payment and on order of the debtor delivers the security
   certificate to another person, makes only the warranties of an agent
   under subsection (g) of this section.
   
   (i) Except as otherwise provided in subsection (g) of this section, a
   broker acting for a customer makes to the issuer and a purchaser the
   warranties provided in subsections (a) through (f) of this section. A
   broker that delivers a security certificate to its customer, or causes
   its customer to be registered as the owner of an uncertificated
   security, makes to the customer the warranties provided in subsection
   (a) or (b) of this section, and has the rights and privileges of a
   purchaser under this section. The warranties of and in favor of the
   broker acting as an agent are in addition to applicable warranties
   given by and in favor of the customer.