Section 8--306. 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.