Section 8--108. Warranties in Direct Holding.\n (a) A person who transfers a certificated security to a purchaser for\nvalue warrants to the purchaser, and an indorser, if the transfer is by\nindorsement, warrants to any subsequent purchaser, that:\n (1) the certificate is genuine and has not been materially\n altered;\n (2) the transferor or indorser does not know of any fact that\n might impair the validity of the security;\n (3) there is no adverse claim to the security;\n (4) the transfer does not violate any restriction on transfer;\n (5) if the transfer is by indorsement, the indorsement is made by\n an appropriate person, or if the indorsement is by an agent,\n the agent has actual authority to act on behalf of the\n appropriate person; and\n (6) the transfer is otherwise effective and rightful.\n (b) A person who originates an instruction for registration of\ntransfer of an uncertificated security to a purchaser for value warrants\nto the purchaser that:\n (1) the instruction is made by an appropriate person, or if the\n instruction is by an agent, the agent has actual authority to\n act on behalf of the appropriate person;\n (2) the security is valid;\n (3) there is no adverse claim to the security; and\n (4) at the time the instruction is presented to the issuer:\n (i) the purchaser will be entitled to the registration of\n transfer;\n (ii) the transfer will be registered by the issuer free from\n all liens, security interests, restrictions, and claims\n other than those specified in the instruction;\n (iii) the transfer will not violate any restriction on\n transfer; and\n (iv) the requested transfer will otherwise be effective and\n rightful.\n (c) A person who transfers an uncertificated security to a purchaser\nfor value and does not originate an instruction in connection with the\ntransfer warrants that:\n (1) the uncertificated security is valid;\n (2) there is no adverse claim to the security;\n (3) the transfer does not violate any restriction on transfer;\n and\n (4) the transfer is otherwise effective and rightful.\n (d) A person who indorses a security certificate warrants to the\nissuer that:\n (1) there is no adverse claim to the security; and\n (2) the indorsement is effective.\n (e) A person who originates an instruction for registration of\ntransfer of an uncertificated security warrants to the issuer that:\n (1) the instruction is effective; and\n (2) at the time the instruction is presented to the issuer the\n purchaser will be entitled to the registration of transfer.\n (f) A person who presents a certificated security for registration of\ntransfer or for payment or exchange warrants to the issuer that the\nperson is entitled to the registration, payment, or exchange, but a\npurchaser for value and without notice of adverse claims to whom\ntransfer is registered warrants only that the person has no knowledge of\nany unauthorized signature in a necessary indorsement.\n (g) If a person acts as agent of another in delivering a certificated\nsecurity to a purchaser, the identity of the principal was known to the\nperson to whom the certificate was delivered, and the certificate\ndelivered by the agent was received by the agent from the principal or\nreceived by the agent from another person at the direction of the\nprincipal, the person delivering the security certificate warrants only\nthat the delivering person has authority to act for the principal and\ndoes not know of any adverse claim to the certificated security.\n (h) A secured party who redelivers a security certificate received, or\nafter payment and on order of the debtor delivers the security\ncertificate to another person, makes only
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