As Introduced 1
122nd General Assembly 4
Regular Session H. B. No. 170 5
1997-1998 6
REPRESENTATIVES WOMER BENJAMIN-BATCHELDER-TIBERI-HARRIS-MYERS- 8
MASON-SCHULER-LEWIS-BRITTON-SALERNO-TAYLOR-REID- 9
CATES-HAINES-MOTTLEY-JONES-TERWILLEGER 10
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A B I L L
To amend sections 1301.05, 1301.12, 1303.02, 14
1304.01, 1304.02, 1305.10, 1305.13, 1308.03, 15
1308.04, 1308.08, 1308.09, 1308.10, 1308.11, 16
1308.12, 1308.13, 1308.14, 1308.15, 1308.16, 17
1308.17, 1308.22, 1308.31, 1308.37, 1308.38, 18
1308.41, 1308.42, 1309.01, 1309.03, 1309.14, 19
1309.20, 1309.21, 1309.22, 1309.23, 1309.24, 20
1309.25, 1309.28, 1309.31, 1701.24, 1701.25, 22
1701.27, 1701.49, 1701.591, and 3901.51; to 23
enact new sections 1308.01, 1308.02, 1308.05, 24
1308.06, 1308.07, 1308.18, 1308.19, 1308.20, 25
1308.21, 1308.23, 1308.24, 1308.25, 1308.26, 27
1308.27, 1308.32, 1308.33, 1308.39, and 1308.40 28
and sections 1308.51, 1308.52, 1308.53, 1308.54, 29
1308.55, 1308.56, 1308.57, 1308.58, 1308.59, 30
1308.60, 1308.61, 1309.112, and 1309.113; and to 31
repeal sections 1308.01, 1308.02, 1308.05, 32
1308.06, 1308.07, 1308.18, 1308.19, 1308.20, 33
1308.21, 1308.23, 1308.24, 1308.25, 1308.26, 34
1308.27, 1308.28, 1308.32, 1308.33, 1308.34, 35
1308.35, 1308.36, 1308.39, 1308.40, 1308.43, and 36
1308.44 of the Revised Code, to adopt the Revised 37
Article 8 of the Uniform Commercial 38
Code--Investment Securities. 39
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 41
Section 1. That sections 1301.05, 1301.12, 1303.02, 43
1304.01, 1304.02, 1305.10, 1305.13, 1308.03, 1308.04, 1308.08, 44
1308.09, 1308.10, 1308.11, 1308.12, 1308.13, 1308.14, 1308.15, 45
1308.16, 1308.17, 1308.22, 1308.31, 1308.37, 1308.38, 1308.41, 46
1308.42, 1309.01, 1309.03, 1309.14, 1309.20, 1309.21, 1309.22, 47
1309.23, 1309.24, 1309.25, 1309.28, 1309.31, 1701.24, 1701.25, 48
1701.27, 1701.49, 1701.591, and 3901.51 be amended; and new
sections 1308.01, 1308.02, 1308.05, 1308.06, 1308.07, 1308.18, 49
1308.19, 1308.20, 1308.21, 1308.23, 1308.24, 1308.25, 1308.26, 50
1308.27, 1308.32, 1308.33, 1308.39, and 1308.40 and sections 51
1308.51, 1308.52, 1308.53, 1308.54, 1308.55, 1308.56, 1308.57, 52
1308.58, 1308.59, 1308.60, 1308.61, 1309.112, and 1309.113 of the 53
Revised Code be enacted to read as follows:
Sec. 1301.05. (A) Except as otherwise provided in this 62
section, when a transaction bears a reasonable relation to this 63
state and also to another state or nation, the parties may agree 64
that the law either of this state or of the other state or nation 65
shall govern their rights and duties. Failing such an agreement 66
Chapters 1301., 1302., 1303., 1304., 1305., 1307., 1308., 1309., 68
and 1310. of the Revised Code apply to transactions bearing an 69
appropriate relation to this state.
(B) Where one of the following provisions of Chapters 71
1301., 1302., 1303., 1304., 1305., 1307., 1308., 1309., and 1310. 73
of the Revised Code specifies the applicable law, that provision 74
governs and a contrary agreement is effective only to the extent 75
permitted by the law, including the conflict of laws rules, so 76
specified:
(1) Rights of creditors against sold goods, as provided in 78
section 1302.43 of the Revised Code; 79
(2) Applicability of sections 1304.01 to 1304.40 of the 81
Revised Code, as provided in section 1304.02 of the Revised Code; 82
(3) Fund transfers under sections 1304.51 to 1304.85 of 84
the Revised Code, as provided in section 1304.85 of the Revised 85
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Code; 86
(4) Applicability of sections 1308.01 to 1308.36 CHAPTER 89
1308. of the Revised Code, as provided in section 1308.05 of the 90
Revised Code;
(5) Perfection provisions of section 1309.03 of the 92
Revised Code; 93
(6) Applicability of sections 1310.01 to 1310.78 of the 95
Revised Code, as provided in sections 1310.03 and 1310.04 of the 96
Revised Code. 97
Sec. 1301.12. (A) Except in the cases described in 106
division (B) of this section a contract for the sale of personal 107
property is not enforceable by way of action or defense beyond 108
five thousand dollars in amount or value of remedy unless there 109
is some writing which indicates that a contract for sale has been 110
made between the parties at a defined or stated price, reasonably
identifies the subject matter, and is signed by the party against 111
whom enforcement is sought or by his THAT PARTY'S authorized 112
agent.
(B) Division (A) of this section does not apply to 114
contracts for the sale of goods, section 1302.04 of the Revised 115
Code, nor of securities, section 1308.30 1308.07 of the Revised 116
Code, nor to security agreements, section 1309.14 of the Revised 117
Code.
Sec. 1303.02. (A) This chapter applies to negotiable 126
instruments. It does not apply to money, to payment orders 127
governed by sections 1304.51 to 1304.85 of the Revised Code, or 128
to securities governed by sections 1308.01 to 1308.44 CHAPTER 130
1308. of the Revised Code.
(B) If there is a conflict between this chapter and either 132
sections 1304.01 to 1304.40 or sections 1309.01 to 1309.50 of the 133
Revised Code, the provisions of sections 1304.01 to 1304.40 or 134
sections 1309.01 to 1309.50 of the Revised Code govern. 135
(C) If any provision of this chapter is inconsistent with 137
any regulation of the board of governors of the federal reserve 138
4
system or any operating circular of the federal reserve banks, 139
the regulation or the operating circular supersedes the provision 140
of this chapter to the extent of the inconsistency. 141
Sec. 1304.01. (A) As used in sections 1304.01 to 1304.40 150
of the Revised Code, unless the context requires otherwise: 151
(1) "Account" means any deposit or credit account with a 153
bank, including a demand, time, savings, passbook, share draft, 154
or similar account, other than an account evidenced by a 155
certificate of deposit.
(2) "Afternoon" means the period of day between noon and 157
midnight. 158
(3) "Banking day" means the part of a day on which a bank 161
is open to the public for carrying on substantially all of its 162
banking functions.
(4) "Clearing house" means an association of banks or 164
other payors regularly clearing items. 165
(5) "Customer" means a person having an account with a 167
bank or for whom a bank has agreed to collect items, including a 168
bank that maintains an account at another bank. 169
(6) "Documentary draft" means a draft to be presented for 171
acceptance or payment if specified documents, certified 172
securities or instructions for uncertificated securities AS 173
DEFINED IN SECTION 1308.01 OF THE REVISED CODE, or other 174
certificates, statements, or similar documents are to be received
by the drawee or other payor before acceptance or payment of the 175
draft.
(7) "Draft" means a draft as defined in section 1303.03 of 177
the Revised Code or an item, other than an instrument, that is an 178
order.
(8) "Drawee" means a person ordered in a draft to make 180
payment.
(9) "Item" means an instrument or a promise or order to 182
pay money handled by a bank for collection or payment. "Item" 183
does not include a payment order governed by sections 1304.51 to 184
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1304.85 of the Revised Code, a credit slip, or a debit card slip. 185
(10) "Midnight deadline," with respect to a bank, is 187
midnight on its next banking day following the banking day on 188
which it recevies RECEIVES the relevant item or notice or from 189
which the time for taking action commences to run, whichever is 192
later.
(11) "Settle" means to pay in cash, by clearing house 194
settlement, in a charge or credit or by remittance, or otherwise 195
as agreed. A settlement may be either provisional or final. 196
(12) "Suspends payments" with respect to a bank means that 198
it has been closed by order of the supervisory authorities, that 199
a public officer has been appointed to take it over, or that it 200
ceases or refuses to make payments in the ordinary course of 201
business. 202
(B) As used in sections 1304.01 to 1304.40 of the Revised 204
Code:
(1) "Bank" means a person engaged in the business of 206
banking, including a savings bank, a savings and loan 207
association, a credit union, or a trust company. 208
(2) "Depositary bank" means the first bank to take an item 211
even though it is also the payor bank, unless the item is
presented for immediate payment over the counter. 212
(3) "Payor bank" means a bank that is a drawee of a draft. 214
(4) "Intermediary bank" means a bank to which an item is 217
transferred in course of collection except the depositary or
payor bank. 218
(5) "Collecting bank" means a bank handling an item for 221
collection except the payor bank.
(6) "Presenting bank" means a bank presenting an item 223
except a payor bank. 224
(C) As used in sections 1304.01 to 1304.40 of the Revised 227
Code:
(1) "Acceptance" and "certified check" have the same 229
meanings as in section 1303.46 of the Revised Code. 230
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(2) "Alteration" has the same meaning as in section 232
1303.50 of the Revised Code. 233
(3) "Cashier's check," "certificate of deposit," "check," 235
"instrument," and "teller's check" have the same meanings as in 236
section 1303.03 of the Revised Code. 237
(4) "Good faith," "order," "ordinary care," "promise," and 239
"prove" have the same meanings as in section 1303.01 of the 240
Revised Code.
(5) "Holder in due course" has the same meaning as in 242
section 1303.32 of the Revised Code. 243
(6) "Notice of dishonor" has the same meaning as in 245
section 1303.63 of the Revised Code. 246
(7) "Person entitled to enforce" has the same meaning as 248
in section 1303.31 of the Revised Code. 249
(8) "Presentment" has the same meaning as in section 251
1303.61 of the Revised Code. 252
(9) "Unauthorized signature" has the same meaning as in 254
section 1303.43 of the Revised Code. 255
(D) The terms and principles of construction and 257
interpretation in sections 1301.01 to 1301.14 of the Revised Code 258
are applicable to sections 1304.01 to 1303.40 1304.40 of the 259
Revised Code.
Sec. 1304.02. (A) To the extent that items within 268
sections 1304.01 to 1304.40 of the Revised Code are also within 269
the scope of Chapter 1303. and sections 1308.01 to 1308.36 270
CHAPTER 1308. of the Revised Code, they are subject to that 271
chapter and those sections CHAPTERS. In the event of conflict, 273
the provisions of sections 1304.01 to 1304.40 of the Revised Code 274
govern those of Chapter 1303., but the provisions of sections 275
1308.01 to 1308.36 CHAPTER 1308. of the Revised Code govern those 276
of sections 1304.01 to 1304.40 of the Revised Code. 277
(B) The liability of a bank for action or non-action with 279
respect to any item handled by it for purposes of presentment, 280
payment, or collection is governed by the law of the place where 281
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the bank is located. In the case of action or non-action by or 282
at a branch or separate office of a bank, its liability is
governed by the law of the place where the branch or separate 283
office is located. 284
Sec. 1305.10. (A) Unless otherwise agreed, the 293
beneficiary by transferring or presenting a documentary draft or 294
demand for payment warrants to all interested parties that the 295
necessary conditions of the credit have been complied with. This 296
is in addition to any warranties arising under Chapters 1303., 297
1304., and 1308. of the Revised Code.
(B) Unless otherwise agreed, a negotiating, advising, 299
confirming, collecting, or issuing bank presenting or 300
transferring a draft or demand for payment under a credit 301
warrants only the matters warranted by a collecting bank under
sections 1304.01 to 1304.40 of the Revised Code, and any such 302
bank transferring a document warrants only the matters warranted 303
by an A SECURITIES intermediary under sections 1307.01 to 1307.40 304
and 1308.01 to 1308.36 CHAPTER 1308. of the Revised Code. 305
Sec. 1305.13. (A) An issuer must honor a draft or demand 314
for payment that complies with the terms of the relevant credit 315
regardless of whether the goods or documents conform to the 316
underlying contract for sale or other contract between the 317
customer and the beneficiary. The issuer is not excused from 318
honor of such a draft or demand by reason of an additional 319
general term that all documents must be satisfactory to the 320
issuer, but an issuer may require that specified documents must 321
be satisfactory to it. 322
(B) Unless otherwise agreed when documents appear on their 324
face to comply with the terms of a credit but a required document 325
does not in fact conform to the warranties made on negotiation or 326
transfer of a document of title, pursuant to section 1307.35 of 327
the Revised Code, or of a certificated security pursuant to 328
section 1308.21 1308.20 of the Revised Code, or is forged or 329
fraudulent or there is fraud in the transaction: 331
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(1) The issuer must honor the draft or demand for payment 333
if honor is demanded by a negotiating bank or other holder of the 334
draft or demand which has taken the draft or demand under the 335
credit and under circumstances which would make it a holder in 336
due course as provided in section 1303.32 of the Revised Code and 337
in an appropriate case would make it a person to whom a document 338
of title has been duly negotiated, as provided in section 1307.30 339
of the Revised Code, or a bona fide PROTECTED purchaser of a 340
certificated security, as provided in section 1308.17 of the 342
Revised Code; and
(2) In all other cases as against its customer, an issuer 344
acting in good faith may honor the draft or demand for payment 345
despite notification from the customer of fraud, forgery, or 346
other defect not apparent on the face of the documents but a 347
court of appropriate jurisdiction may enjoin such honor. 348
(C) Unless otherwise agreed, an issuer which has duly 350
honored a draft or demand for payment is entitled to immediate 351
reimbursement of any payment made under the credit and to be put 352
in effectively available funds not later than the day before 353
maturity of any acceptance made under the credit. 354
(D) When a credit provides for payment by the issuer on 356
receipt of notice that the required documents are in the 357
possession of a correspondent or other agent of the issuer: 358
(1) Any payment made on receipt of such notice is 360
conditional; and 361
(2) The issuer may reject documents which do not comply 363
with the credit if it does so within three banking days following 364
its receipt of the documents; and 365
(3) In the event of such rejection, the issuer is entitled 367
by chargeback or otherwise to return of the payment made. 368
(E) In the case covered by division (D) of this section, 370
failure to reject documents within the time specified in division 371
(D)(2) of this section constitutes acceptance of the documents 372
and makes the payment final in favor of the beneficiary. 373
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Sec. 1308.01. (A) IN THIS CHAPTER: 375
(1) "ADVERSE CLAIM" MEANS A CLAIM THAT A CLAIMANT HAS A 377
PROPERTY INTEREST IN A FINANCIAL ASSET AND THAT IT IS A VIOLATION 378
OF THE RIGHTS OF THE CLAIMANT FOR ANOTHER PERSON TO HOLD, 379
TRANSFER, OR DEAL WITH THE FINANCIAL ASSET.
(2) "BEARER FORM," AS APPLIED TO A CERTIFICATED SECURITY, 381
MEANS A FORM IN WHICH THE SECURITY IS PAYABLE TO THE BEARER OF 382
THE SECURITY CERTIFICATE ACCORDING TO ITS TERMS BUT NOT BY REASON 383
OF AN INDORSEMENT.
(3) "BROKER" MEANS A PERSON DEFINED AS A BROKER OR DEALER 385
UNDER THE FEDERAL SECURITIES LAWS, BUT WITHOUT EXCLUDING A BANK 386
ACTING IN THAT CAPACITY.
(4) "CERTIFICATED SECURITY" MEANS A SECURITY THAT IS 388
REPRESENTED BY A CERTIFICATE. 389
(5) "CLEARING CORPORATION" MEANS: 391
(a) A PERSON THAT IS REGISTERED AS A "CLEARING AGENCY" 393
UNDER THE FEDERAL SECURITIES LAWS; 394
(b) A FEDERAL RESERVE BANK; OR 396
(c) ANY OTHER PERSON THAT PROVIDES CLEARANCE OR SETTLEMENT 398
SERVICES WITH RESPECT TO FINANCIAL ASSETS THAT WOULD REQUIRE IT 399
TO REGISTER AS A CLEARING AGENCY UNDER THE FEDERAL SECURITIES 400
LAWS BUT FOR AN EXCLUSION OR EXEMPTION FROM THE REGISTRATION 401
REQUIREMENT, IF ITS ACTIVITIES AS A CLEARING CORPORATION, 402
INCLUDING PROMULGATION OF RULES, ARE SUBJECT TO REGULATION BY A
FEDERAL OR STATE GOVERNMENTAL AUTHORITY. 403
(6) "COMMUNICATE" MEANS TO: 405
(a) SEND A SIGNED WRITING; OR 407
(b) TRANSMIT INFORMATION BY ANY MECHANISM AGREED UPON BY 409
THE PERSONS TRANSMITTING AND RECEIVING THE INFORMATION. 410
(7) "ENTITLEMENT HOLDER" MEANS A PERSON IDENTIFIED IN THE 412
RECORDS OF A SECURITIES INTERMEDIARY AS THE PERSON HAVING A 413
SECURITY ENTITLEMENT AGAINST THE SECURITIES INTERMEDIARY. IF A 414
PERSON ACQUIRES A SECURITY ENTITLEMENT BY VIRTUE OF DIVISION 415
(B)(2) OR (3) OF SECTION 1308.51 OF THE REVISED CODE, THAT PERSON
10
IS THE ENTITLEMENT HOLDER. 416
(8) "ENTITLEMENT ORDER" MEANS A NOTIFICATION COMMUNICATED 418
TO A SECURITIES INTERMEDIARY DIRECTING TRANSFER OR REDEMPTION OF 419
A FINANCIAL ASSET TO WHICH THE ENTITLEMENT HOLDER HAS A SECURITY 420
ENTITLEMENT.
(9) "FINANCIAL ASSET," EXCEPT AS OTHERWISE PROVIDED IN 422
SECTION 1308.02 OF THE REVISED CODE, MEANS: 423
(a) A SECURITY; 425
(b) AN OBLIGATION OF A PERSON OR A SHARE, PARTICIPATION, 427
OR OTHER INTEREST IN A PERSON OR IN PROPERTY OR AN ENTERPRISE OF 428
A PERSON, WHICH IS, OR IS OF A TYPE, DEALT IN OR TRADED ON 429
FINANCIAL MARKETS, OR WHICH IS RECOGNIZED IN ANY AREA IN WHICH IT 430
IS ISSUED OR DEALT IN AS A MEDIUM FOR INVESTMENT; OR
(c) ANY PROPERTY THAT IS HELD BY A SECURITIES INTERMEDIARY 432
FOR ANOTHER PERSON IN A SECURITIES ACCOUNT IF THE SECURITIES 433
INTERMEDIARY HAS EXPRESSLY AGREED WITH THE OTHER PERSON THAT THE 434
PROPERTY IS TO BE TREATED AS A FINANCIAL ASSET UNDER THIS 435
CHAPTER.
AS CONTEXT REQUIRES, THE TERM MEANS EITHER THE INTEREST 437
ITSELF OR THE MEANS BY WHICH A PERSON'S CLAIM TO IT IS EVIDENCED, 438
INCLUDING A CERTIFICATED OR UNCERTIFICATED SECURITY, A SECURITY 439
CERTIFICATE, OR A SECURITY ENTITLEMENT.
(10) "GOOD FAITH," FOR PURPOSES OF THE OBLIGATION OF GOOD 441
FAITH IN THE PERFORMANCE OR ENFORCEMENT OF CONTRACTS OR DUTIES 442
WITHIN THIS CHAPTER, MEANS HONESTY IN FACT AND THE OBSERVANCE OF 443
REASONABLE COMMERCIAL STANDARDS OF FAIR DEALING. 444
(11) "INDORSEMENT" MEANS A SIGNATURE THAT ALONE OR 446
ACCOMPANIED BY OTHER WORDS IS MADE ON A SECURITY CERTIFICATE IN 447
REGISTERED FORM OR ON A SEPARATE DOCUMENT FOR THE PURPOSE OF 448
ASSIGNING, TRANSFERRING, OR REDEEMING THE SECURITY OR GRANTING A 449
POWER TO ASSIGN, TRANSFER, OR REDEEM IT.
(12) "INSTRUCTION" MEANS A NOTIFICATION COMMUNICATED TO 451
THE ISSUER OF AN UNCERTIFICATED SECURITY WHICH DIRECTS THAT THE 452
TRANSFER OF THE SECURITY BE REGISTERED OR THAT THE SECURITY BE 453
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REDEEMED.
(13) "REGISTERED FORM," AS APPLIED TO A CERTIFICATED 455
SECURITY, MEANS A FORM IN WHICH: 456
(a) THE SECURITY CERTIFICATE SPECIFIES A PERSON ENTITLED 458
TO THE SECURITY; AND 459
(b) A TRANSFER OF THE SECURITY MAY BE REGISTERED UPON 461
BOOKS MAINTAINED FOR THAT PURPOSE BY OR ON BEHALF OF THE ISSUER, 462
OR THE SECURITY CERTIFICATE SO STATES. 463
(14) "SECURITIES INTERMEDIARY" MEANS: 465
(a) A CLEARING CORPORATION; OR 467
(b) A PERSON, INCLUDING A BANK OR BROKER, THAT IN THE 469
ORDINARY COURSE OF ITS BUSINESS MAINTAINS SECURITIES ACCOUNTS FOR 470
OTHERS AND IS ACTING IN THAT CAPACITY. 471
(15) "SECURITY," EXCEPT AS OTHERWISE PROVIDED IN SECTION 473
1308.02 OF THE REVISED CODE, MEANS AN OBLIGATION OF AN ISSUER OR 474
A SHARE, PARTICIPATION, OR OTHER INTEREST IN AN ISSUER OR IN 475
PROPERTY OR AN ENTERPRISE OF AN ISSUER:
(a) WHICH IS REPRESENTED BY A SECURITY CERTIFICATE IN 477
BEARER OR REGISTERED FORM, OR THE TRANSFER OF WHICH MAY BE 478
REGISTERED UPON BOOKS MAINTAINED FOR THAT PURPOSE BY OR ON BEHALF 479
OF THE ISSUER;
(b) WHICH IS ONE OF A CLASS OR SERIES OR BY ITS TERMS IS 481
DIVISIBLE INTO A CLASS OR SERIES OF SHARES, PARTICIPATIONS, 482
INTERESTS, OR OBLIGATIONS; AND 483
(c) WHICH: 485
(i) IS, OR IS OF A TYPE, DEALT IN OR TRADED ON SECURITIES 487
EXCHANGES OR SECURITIES MARKETS; OR 488
(ii) IS A MEDIUM FOR INVESTMENT AND BY ITS TERMS EXPRESSLY 490
PROVIDES THAT IT IS A SECURITY GOVERNED BY THIS CHAPTER. 491
(16) "SECURITY CERTIFICATE" MEANS A CERTIFICATE 493
REPRESENTING A SECURITY.
(17) "SECURITY ENTITLEMENT" MEANS THE RIGHTS AND PROPERTY 495
INTEREST OF AN ENTITLEMENT HOLDER WITH RESPECT TO A FINANCIAL 496
ASSET SPECIFIED IN SECTIONS 1308.51 TO 1308.61 OF THE REVISED 497
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CODE.
(18) "UNCERTIFICATED SECURITY" MEANS A SECURITY THAT IS 499
NOT REPRESENTED BY A CERTIFICATE. 500
(B) OTHER DEFINITIONS APPLYING TO THIS CHAPTER AND THE 502
SECTIONS IN WHICH THEY APPEAR ARE: 503
(1) "APPROPRIATE PERSON," AS DEFINED IN SECTION 1308.23 OF 505
THE REVISED CODE.
(2) "CONTROL," AS DEFINED IN SECTION 1308.24 OF THE 507
REVISED CODE.
(3) "DELIVERY," AS DEFINED IN SECTION 1308.27 OF THE 509
REVISED CODE.
(4) "INVESTMENT COMPANY SECURITY," AS DEFINED IN SECTION 511
1308.02 OF THE REVISED CODE.
(5) "ISSUER," AS DEFINED IN SECTION 1308.08 OF THE REVISED 513
CODE.
(6) "OVERISSUE," AS DEFINED IN SECTION 1308.03 OF THE 515
REVISED CODE.
(7) "PROTECTED PURCHASER," AS DEFINED IN SECTION 1308.17 517
OF THE REVISED CODE.
(8) "SECURITIES ACCOUNT," AS DEFINED IN SECTION 1308.51 OF 519
THE REVISED CODE.
(C) IN ADDITION, CHAPTER 1301. OF THE REVISED CODE 521
CONTAINS GENERAL DEFINITIONS AND PRINCIPLES OF CONSTRUCTION AND 522
INTERPRETATION APPLICABLE THROUGHOUT THIS CHAPTER. 523
(D) THE CHARACTERIZATION OF A PERSON, BUSINESS, OR 525
TRANSACTION FOR PURPOSES OF THIS CHAPTER DOES NOT DETERMINE THE 526
CHARACTERIZATION OF THE PERSON, BUSINESS, OR TRANSACTION FOR 527
PURPOSES OF ANY OTHER LAW, REGULATION, OR RULE. 528
Sec. 1308.02. (A) A SHARE OR SIMILAR EQUITY INTEREST 530
ISSUED BY A CORPORATION, BUSINESS TRUST, JOINT STOCK COMPANY, OR 531
SIMILAR ENTITY IS A SECURITY. 532
(B) AN "INVESTMENT COMPANY SECURITY" IS A SECURITY. 534
"INVESTMENT COMPANY SECURITY" MEANS A SHARE OR SIMILAR EQUITY 535
INTEREST ISSUED BY AN ENTITY THAT IS REGISTERED AS AN INVESTMENT 536
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COMPANY UNDER THE FEDERAL INVESTMENT COMPANY LAWS, AN INTEREST IN 537
A UNIT INVESTMENT TRUST THAT IS SO REGISTERED, OR A FACE-AMOUNT 538
CERTIFICATE ISSUED BY A FACE-AMOUNT CERTIFICATE COMPANY THAT IS
SO REGISTERED. INVESTMENT COMPANY SECURITY DOES NOT INCLUDE AN 539
INSURANCE POLICY OR ENDOWMENT POLICY OR ANNUITY CONTRACT ISSUED 540
BY AN INSURANCE COMPANY.
(C) AN INTEREST IN A PARTNERSHIP OR LIMITED LIABILITY 542
COMPANY IS NOT A SECURITY UNLESS IT IS DEALT IN OR TRADED ON 543
SECURITIES EXCHANGES OR IN SECURITIES MARKETS, ITS TERMS 544
EXPRESSLY PROVIDE THAT IT IS A SECURITY GOVERNED BY THIS CHAPTER, 545
OR IT IS AN INVESTMENT COMPANY SECURITY. HOWEVER, AN INTEREST IN 546
A PARTNERSHIP OR LIMITED LIABILITY COMPANY IS A FINANCIAL ASSET
IF IT IS HELD IN A SECURITIES ACCOUNT. 547
(D) A WRITING THAT IS A SECURITY CERTIFICATE IS GOVERNED 549
BY THIS CHAPTER AND NOT BY CHAPTER 1303. OF THE REVISED CODE, 550
EVEN THOUGH IT ALSO MEETS THE REQUIREMENTS OF THAT CHAPTER. 551
HOWEVER, A NEGOTIABLE INSTRUMENT GOVERNED BY CHAPTER 1303. OF THE 552
REVISED CODE IS A FINANCIAL ASSET IF IT IS HELD IN A SECURITIES
ACCOUNT. 553
(E) AN OPTION OR SIMILAR OBLIGATION ISSUED BY A CLEARING 555
CORPORATION TO ITS PARTICIPANTS IS NOT A SECURITY, BUT IS A 556
FINANCIAL ASSET.
(F) A COMMODITY CONTRACT, AS DEFINED IN SECTION 1309.112 558
OF THE REVISED CODE, IS NOT A SECURITY OR A FINANCIAL ASSET. 559
Sec. 1308.03. (A) The EXCEPT AS OTHERWISE PROVIDED IN 568
DIVISIONS (A)(1) AND (2) OF THIS SECTION, THE provisions of 569
sections 1308.01 to 1308.44 of the Revised Code THIS CHAPTER 570
which validate a security or compel its issue or reissue do not 572
apply to the extent that validation, issue, or reissue would 573
result in overissue; but if.
(1) An IF AN identical security which does not constitute 575
an overissue is reasonably available for purchase, the person 576
entitled to issue or validation may compel the issuer to purchase 577
the security for him and either to deliver a IT IF certificated 579
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security or to register the ITS transfer of an IF uncertificated 580
security to him, against surrender of any certificated security 581
he CERTIFICATE THE PERSON holds; or. 582
(2) A IF A security is not so available for purchase, the 585
A person entitled to issue or validation may recover from the 586
issuer the price he THE PERSON or the last purchaser for value 587
paid for it with interest from the date of his THE PERSON'S 588
demand. 589
(B) "Overissue" means the issue of securities in excess of 591
the amount the issuer has corporate power to issue, BUT AN 592
OVERISSUE DOES NOT OCCUR IF APPROPRIATE ACTION HAS CURED THE 593
OVERISSUE.
Sec. 1308.04. (A) Certificated securities governed by 602
sections 1308.01 to 1308.44 of the Revised Code, are negotiable 603
instruments. 604
(B) Statements as provided in section 1308.44 of the 606
Revised Code, notices, or the like, sent by the issuer of 607
uncertificated securities and instructions as provided in section 608
1308.23 of the Revised Code are neither negotiable instruments 609
nor certificated securities. 610
(C) In any THE FOLLOWING RULES APPLY IN AN action on a 612
CERTIFICATED security AGAINST THE ISSUER: 613
(1)(A) Unless specifically denied in the pleadings, each 615
signature on a certificated security, CERTIFICATE OR in a 616
necessary indorsement, or an initial transaction statement, or on 617
an instruction, is admitted; 618
(2)(B) If the effectiveness of a signature is put in 620
issue, the burden of establishing it EFFECTIVENESS is on the 621
party claiming under the signature, but the signature is presumed 622
to be genuine or authorized; 623
(3)(C) If signatures on a certificated security 625
CERTIFICATE are admitted or established, production of the 626
security CERTIFICATE entitles a holder to recover on it unless 628
the defendant establishes a defense or a defect going to the 629
15
validity of the security;
(4)(D) If signatures on an initial transaction statement 631
are admitted or established, the facts stated in the statement 633
are presumed to be true as of the time of its issuance; and 634
(5) After it is shown that a defense or defect exists, the 636
plaintiff has the burden of establishing that he THE PLAINTIFF or 638
some person under whom he THE PLAINTIFF claims is a person
against whom the defense or defect is ineffective, as provided in 639
section 1308.44 of the Revised Code CANNOT BE ASSERTED. 640
Sec. 1308.05. (A) THE LOCAL LAW OF THE ISSUER'S 642
JURISDICTION, AS SPECIFIED IN DIVISION (D) OF THIS SECTION, 643
GOVERNS:
(1) THE VALIDITY OF A SECURITY; 645
(2) THE RIGHTS AND DUTIES OF THE ISSUER WITH RESPECT TO 647
REGISTRATION OF TRANSFER; 648
(3) THE EFFECTIVENESS OF REGISTRATION OF TRANSFER BY THE 650
ISSUER;
(4) WHETHER THE ISSUER OWES ANY DUTIES TO AN ADVERSE 652
CLAIMANT TO A SECURITY; AND 653
(5) WHETHER AN ADVERSE CLAIM CAN BE ASSERTED AGAINST A 655
PERSON TO WHOM TRANSFER OF A CERTIFICATED OR UNCERTIFICATED 656
SECURITY IS REGISTERED OR A PERSON WHO OBTAINS CONTROL OF AN 657
UNCERTIFICATED SECURITY.
(B) THE LOCAL LAW OF THE SECURITIES INTERMEDIARY'S 659
JURISDICTION, AS SPECIFIED IN DIVISION (E) OF THIS SECTION, 660
GOVERNS:
(1) ACQUISITION OF A SECURITY ENTITLEMENT FROM THE 662
SECURITIES INTERMEDIARY; 663
(2) THE RIGHTS AND DUTIES OF THE SECURITIES INTERMEDIARY 665
AND ENTITLEMENT HOLDER ARISING OUT OF A SECURITY ENTITLEMENT; 666
(3) WHETHER THE SECURITIES INTERMEDIARY OWES ANY DUTIES TO 668
AN ADVERSE CLAIMANT TO A SECURITY ENTITLEMENT; AND 669
(4) WHETHER AN ADVERSE CLAIM CAN BE ASSERTED AGAINST A 671
PERSON WHO ACQUIRES A SECURITY ENTITLEMENT FROM THE SECURITIES 672
16
INTERMEDIARY OR A PERSON WHO PURCHASES A SECURITY ENTITLEMENT OR 673
INTEREST THEREIN FROM AN ENTITLEMENT HOLDER. 674
(C) THE LOCAL LAW OF THE JURISDICTION IN WHICH A SECURITY 676
CERTIFICATE IS LOCATED AT THE TIME OF DELIVERY GOVERNS WHETHER AN 677
ADVERSE CLAIM CAN BE ASSERTED AGAINST A PERSON TO WHOM THE 678
SECURITY CERTIFICATE IS DELIVERED. 679
(D) "ISSUER'S JURISDICTION" MEANS THE JURISDICTION UNDER 681
WHICH THE ISSUER OF THE SECURITY IS ORGANIZED OR, IF PERMITTED BY 682
THE LAW OF THAT JURISDICTION, THE LAW OF ANOTHER JURISDICTION 683
SPECIFIED BY THE ISSUER. AN ISSUER ORGANIZED UNDER THE LAW OF 684
THIS STATE MAY SPECIFY THE LAW OF ANOTHER JURISDICTION AS THE LAW 685
GOVERNING THE MATTERS SPECIFIED IN DIVISIONS (A)(2) TO (5) OF 686
THIS SECTION.
(E) THE FOLLOWING RULES DETERMINE A "SECURITIES 688
INTERMEDIARY'S JURISDICTION" FOR PURPOSES OF THIS SECTION: 689
(1) IF AN AGREEMENT BETWEEN THE SECURITIES INTERMEDIARY 691
AND ITS ENTITLEMENT HOLDER SPECIFIES THAT IT IS GOVERNED BY THE 692
LAW OF A PARTICULAR JURISDICTION, THAT JURISDICTION IS THE 693
SECURITIES INTERMEDIARY'S JURISDICTION.
(2) IF AN AGREEMENT BETWEEN THE SECURITIES INTERMEDIARY 695
AND ITS ENTITLEMENT HOLDER DOES NOT SPECIFY THE GOVERNING LAW AS 696
PROVIDED IN DIVISION (E)(1) OF THIS SECTION, BUT EXPRESSLY 697
SPECIFIES THAT THE SECURITIES ACCOUNT IS MAINTAINED AT AN OFFICE 698
IN A PARTICULAR JURISDICTION, THAT JURISDICTION IS THE SECURITIES 699
INTERMEDIARY'S JURISDICTION.
(3) IF AN AGREEMENT BETWEEN THE SECURITIES INTERMEDIARY 701
AND ITS ENTITLEMENT HOLDER DOES NOT SPECIFY A JURISDICTION AS 702
PROVIDED IN DIVISION (E)(1) OR (2) OF THIS SECTION, THE 703
SECURITIES INTERMEDIARY'S JURISDICTION IS THE JURISDICTION IN 704
WHICH IS LOCATED THE OFFICE IDENTIFIED IN AN ACCOUNT STATEMENT AS 705
THE OFFICE SERVING THE ENTITLEMENT HOLDER'S ACCOUNT.
(4) IF AN AGREEMENT BETWEEN THE SECURITIES INTERMEDIARY 707
AND ITS ENTITLEMENT HOLDER DOES NOT SPECIFY A JURISDICTION AS 708
PROVIDED IN DIVISION (E)(1) OR (2) OF THIS SECTION AND AN ACCOUNT 709
17
STATEMENT DOES NOT IDENTIFY AN OFFICE SERVING THE ENTITLEMENT 710
HOLDER'S ACCOUNT AS PROVIDED IN DIVISION (E)(3) OF THIS SECTION, 711
THE SECURITIES INTERMEDIARY'S JURISDICTION IS THE JURISDICTION IN 712
WHICH IS LOCATED THE CHIEF EXECUTIVE OFFICE OF THE SECURITIES 713
INTERMEDIARY.
(F) A SECURITIES INTERMEDIARY'S JURISDICTION IS NOT 715
DETERMINED BY THE PHYSICAL LOCATION OF CERTIFICATES REPRESENTING 716
FINANCIAL ASSETS, OR BY THE JURISDICTION IN WHICH IS ORGANIZED 717
THE ISSUER OF THE FINANCIAL ASSET WITH RESPECT TO WHICH AN 718
ENTITLEMENT HOLDER HAS A SECURITY ENTITLEMENT, OR BY THE LOCATION 719
OF FACILITIES FOR DATA PROCESSING OR OTHER RECORD KEEPING
CONCERNING THE ACCOUNT. 720
Sec. 1308.06. A RULE ADOPTED BY A CLEARING CORPORATION 722
GOVERNING RIGHTS AND OBLIGATIONS AMONG THE CLEARING CORPORATION 723
AND ITS PARTICIPANTS IN THE CLEARING CORPORATION IS EFFECTIVE 724
EVEN IF THE RULE CONFLICTS WITH THIS CHAPTER AND AFFECTS ANOTHER 725
PARTY WHO DOES NOT CONSENT TO THE RULE.
Sec. 1308.07. A CONTRACT OR MODIFICATION OF A CONTRACT FOR 727
THE SALE OR PURCHASE OF A SECURITY IS ENFORCEABLE WHETHER OR NOT 728
THERE IS A WRITING SIGNED OR RECORD AUTHENTICATED BY A PARTY 729
AGAINST WHOM ENFORCEMENT IS SOUGHT, EVEN IF THE CONTRACT OR 730
MODIFICATION IS NOT CAPABLE OF PERFORMANCE WITHIN ONE YEAR OF ITS 731
MAKING.
Sec. 1308.08. (A) With respect to obligations on or 740
defenses to a security, "issuer" includes a person who: 741
(1) Places or authorizes the placing of his ITS name on a 743
certificated security CERTIFICATE, otherwise than as 744
authenticating trustee, registrar, transfer agent, or the like, 746
to evidence that it represents a share, participation, or other 747
interest in his ITS property or in an enterprise, or to evidence 749
his ITS duty to perform an obligation represented by the 750
certificated security CERTIFICATE; 751
(2) Creates shares, participations, or other interests in 753
his ITS property or in an enterprise, or undertakes obligations, 755
18
which shares, participations, interests, or obligations THAT are 756
uncertificated securities;
(3) Directly or indirectly creates fractional interests in 758
his ITS rights or property, which IF THE fractional interests are 760
represented by certificated securities SECURITY CERTIFICATES; or 761
(4) Becomes responsible for, or in place of, any other 763
person described as an issuer in this section. 764
(B) With respect to obligations on or defenses to a 766
security, a guarantor is an issuer to the extent of his ITS 767
guaranty, whether or not his ITS obligation is noted on a 768
certificated security or on statements of uncertificated 769
securities sent pursuant to section 1308.44 of the Revised Code 771
CERTIFICATE.
(C) With respect to registration of transfer, pledge, or 773
release as provided in sections 1308.37 to 1308.44 of the Revised 774
Code, "issuer" means a person on whose behalf transfer books are 775
maintained. 776
Sec. 1308.09. (A) Even against a purchaser for value and 785
without notice, the terms of a CERTIFICATED security include: 786
(1) If the security is certificated, those TERMS stated on 788
the security; 789
(2) If the security is uncertificated, those contained in 791
the initial transaction statement sent to such purchaser or, if 792
his interest is transferred to him other than by registration of 793
transfer, pledge, or release, the initial transaction statement 795
sent to the registered owner or registered pledgee; and 796
(3) Those CERTIFICATE AND TERMS made part of the security 798
by reference, on the certificated security or in the initial 799
transaction statement, CERTIFICATE to another instrument, 800
indenture, or document or to a constitution, statute, ordinance, 802
rule, regulation, order, or the like, to the extent that the 803
terms referred to do not conflict with the terms stated on the 804
certificated security or contained in the statement CERTIFICATE. 805
A reference under division (A)(3) of this section does not of 807
19
itself charge a purchaser for value with notice of a defect going 808
to the validity of the security, even though IF the certificated 809
security or statement CERTIFICATE expressly states that a person 810
accepting it admits notice.
THE TERMS OF AN UNCERTIFICATED SECURITY INCLUDE THOSE 812
STATED IN ANY INSTRUMENT, INDENTURE, OR DOCUMENT, OR IN A 813
CONSTITUTION, STATUTE, ORDINANCE, RULE, REGULATION, ORDER, OR THE 814
LIKE, PURSUANT TO WHICH THE SECURITY IS ISSUED.
(B)(1) THE FOLLOWING RULES APPLY IF AN ISSUER ASSERTS THAT 816
A SECURITY IS NOT VALID: 817
(1) A certificated security in the hands of a purchaser 819
for value or an uncertificated security as to which an initial 820
transaction statement has been sent to a purchaser for value, 821
other than a security ONE issued by a government or governmental 822
SUBDIVISION, agency, or unit INSTRUMENTALITY, even though issued 824
with a defect going to its validity, is valid with respect to the 825
IN THE HANDS OF A purchaser if he is FOR VALUE AND without notice 826
of the particular defect unless the defect involves a violation 827
of A constitutional provisions, in which PROVISION. IN THAT 829
case, the security is valid with respect to IN THE HANDS OF a 830
subsequent purchaser for value and without notice of the defect, 831
OTHER THAN ONE WHO TAKES BY ORIGINAL ISSUE. 832
(2) The provisions of division (B)(1) of this section 834
apply to an issuer that is a government or governmental 835
SUBDIVISION, agency, or unit INSTRUMENTALITY only if either there 837
has been substantial compliance with the legal requirements 839
governing the issue or the issuer has received a substantial 840
consideration for the issue as a whole or for the particular 841
security and a stated purpose of the issue is one for which the 842
issuer has power to borrow money or issue the security. 843
(C) Except as OTHERWISE provided in the case of certain 845
unauthorized signatures on issue under section 1308.12 of the 847
Revised Code, lack of genuineness of a certificated security or 848
an initial transaction statement is a complete defense, even 849
20
against a purchaser for value and without notice. 850
(D) All other defenses of the issuer of a certificated or 852
uncertificated security, including nondelivery and conditional 853
delivery of a certificated security, are ineffective against a 854
purchaser for value who has taken THE CERTIFICATED SECURITY 855
without notice of the particular defense. 856
(E) Nothing in this THIS section shall be construed to 858
DOES NOT affect the right of a party to CANCEL a CONTRACT FOR A 860
SECURITY "when, as and if issued" or a "when distributed" 861
contract to cancel the contract in the event of a material change 862
in the character of the security that is the subject of the
contract or in the plan or arrangement pursuant to which the 864
security is to be issued or distributed.
(F) IF A SECURITY IS HELD BY A SECURITIES INTERMEDIARY 866
AGAINST WHOM AN ENTITLEMENT HOLDER HAS A SECURITY ENTITLEMENT 867
WITH RESPECT TO THE SECURITY, THE ISSUER MAY NOT ASSERT ANY 868
DEFENSE THAT THE ISSUER COULD NOT ASSERT IF THE ENTITLEMENT 869
HOLDER HELD THE SECURITY DIRECTLY.
Sec. 1308.10. (A) After an act or event, OTHER THAN A 878
CALL THAT HAS BEEN REVOKED, creating a right to immediate 880
performance of the principal obligation represented by a 881
certificated security or that sets a date on or after which the 882
security is to be presented or surrendered for redemption or
exchange, a purchaser is charged with notice of any defect in its 883
issue or defense of the issuer if THE ACT OR EVENT: 884
(1) The act or event is one requiring (A) REQUIRES the 887
payment of money, the delivery of A certificated securities
SECURITY, the registration of transfer of AN uncertificated 889
securities SECURITY, or any of these THEM on presentation or 890
surrender of the certificated security CERTIFICATE, the funds 891
MONEY or securities are SECURITY IS available on the date set for 892
payment or exchange, and he THE PURCHASER takes the security more 894
than one year after that date; and OR 895
(2) The act or event is (B) IS not covered by division 898
21
(A)(1) of this section and he THE PURCHASER takes the security 899
more than two years after the date set for surrender or 900
presentation or the date on which performance became due. 901
(B) A call that has been revoked is not within division 903
(A) of this section. 904
Sec. 1308.11. (A) A restriction on transfer of a security 913
imposed by the issuer, even though IF otherwise lawful, is 914
ineffective against any A person without actual knowledge of it 915
unless: 916
(A)(1) The security is certificated and the restriction is 918
noted conspicuously thereon ON THE SECURITY CERTIFICATE; or 919
(B)(2) The security is uncertificated and a notation of 922
the restriction is contained in the initial transaction statement
sent to the person or, if his interest is transferred to him 924
other than by registration of transfer, pledge, or release, the 925
initial transaction statement sent to the registered owner or the 927
registered pledgee HAS BEEN NOTIFIED OF THE RESTRICTION. 928
(B) A LIEN IN FAVOR OF AN ISSUER UPON A CERTIFICATED 930
SECURITY IS VALID AGAINST A PURCHASER ONLY IF THE RIGHT OF THE 931
ISSUER TO THE LIEN IS NOTED CONSPICUOUSLY ON THE SECURITY 932
CERTIFICATE.
Sec. 1308.12. An unauthorized signature placed on a 941
certificated security prior to CERTIFICATE BEFORE or in the 943
course of issue or placed on an initial transaction statement is
ineffective, but the signature is effective in favor of a 945
purchaser for value of the certificated security or a purchaser 946
for value of an uncertified security to whom the initial 947
transaction statement has been sent, if the purchaser is without 948
notice of the lack of authority and if the signing has been done 949
by: 950
(A) An authenticating trustee, registrar, transfer agent, 952
or other person entrusted by the issuer with the signing of the 953
security, CERTIFICATE OR of similar securities SECURITY 955
CERTIFICATES, or of initial transaction statements or the 956
22
immediate preparation for signing of any of them; or 957
(B) An employee of the issuer, or of any of the foregoing 959
PERSONS LISTED IN DIVISION (A) OF THIS SECTION, entrusted with 960
responsible handling of the security or initial transaction 961
statement CERTIFICATE. 962
Sec. 1308.13. (A) If a certificated security CERTIFICATE 971
contains the signatures necessary to its issue or transfer but is 973
incomplete in any other respect: 974
(1) Any person may complete it by filling in the blanks as 976
authorized; and 977
(2) Even though IF the blanks are incorrectly filled in, 979
the security as completed is enforceable by a purchaser who took 980
it for value and without notice of the incorrectness. 981
(B) A complete certificated security CERTIFICATE that has 983
been improperly altered, even though IF fraudulently, remains 984
enforceable, but only according to its original terms. 985
(C) If an initial transaction statement contains the 987
signatures necessary to its validity, but is incomplete in any 988
other respect: 989
(1) Any person may complete it by filling in the blanks as 991
authorized; and 992
(2) Even though the blanks are incorrectly filled in, the 994
statement as completed is effective in favor of the person to 995
whom it is sent if he purchased the security referred to therein 997
for value and without notice of the incorrectness.
(D) A complete initial transaction statement that has been 999
improperly altered, even though fraudulently, is effective in 1,000
favor of a purchaser to whom it has been sent, but only according 1,001
to its original terms. 1,002
Sec. 1308.14. (A) Prior to BEFORE due presentment for 1,011
registration of transfer of a certificated security in registered 1,012
form OR OF AN INSTRUCTION REQUESTING REGISTRATION OF TRANSFER OF 1,013
AN UNCERTIFICATED SECURITY, the issuer or indenture trustee may 1,014
treat the registered owner as the person exclusively entitled to 1,015
23
vote, to receive notifications, and otherwise to exercise all the 1,016
rights and powers of an owner. 1,017
(B) Subject to the provisions of divisions (C), (D), and 1,019
(F) of this section, the issuer or indenture trustee may treat 1,020
the registered owner of an uncertificated security as the person 1,021
exclusively entitled to vote, to receive notifications, and 1,022
otherwise to exercise all the rights and powers of an owner. 1,023
(C) The registered owner of an uncertificated security 1,025
that is subject to a registered pledge is not entitled to 1,026
registration of transfer prior to the due presentment to the 1,027
issuer of a release instruction. The exercise of conversion 1,028
rights with respect to a convertible uncertificated security is a 1,029
transfer within the meaning of this section. 1,030
(D) Upon due presentment of a transfer instruction from 1,032
the registered pledgee of an uncertificated security, the issuer 1,033
shall: 1,034
(1) Register the transfer of the security to the new owner 1,036
free of pledge, if the instruction specifies a new owner, who may 1,037
be the registered pledgee, and does not specify a pledgee; 1,038
(2) Register the transfer of the security to the new owner 1,040
subject to the interest of the existing pledgee, if the 1,041
instruction specifies a new owner and the existing pledgee; or 1,042
(3) Register the release of the security from the existing 1,044
pledge and register the pledge of the security to the other 1,045
pledgee, if the instruction specifies the existing owner and 1,046
another pledgee. 1,047
(E) Continuity of perfection of a security interest is not 1,049
broken by registration of transfer under division (D)(2) of this 1,050
section or by registration of release and pledge under division 1,051
(D)(3) of this section, if the security interest is assigned. 1,052
(F) If an uncertificated security is subject to a 1,054
registered pledge: 1,055
(1) Any uncertificated securities issued in exchange for 1,057
or distributed with respect to the pledged security shall be 1,058
24
registered subject to the pledge; 1,059
(2) Any certificated securities issued in exchange for or 1,061
distributed with respect to the pledged security shall be 1,062
delivered to the registered pledgee; and 1,063
(3) Any money paid in exchange for or in redemption of 1,065
part or all of the security shall be paid to the registered 1,066
pledgee. 1,067
(G) Nothing in sections 1308.01 to 1308.44 of the Revised 1,069
Code shall be construed to THIS CHAPTER DOES NOT affect the 1,070
liability of the registered owner of a security for calls, 1,071
assessments, or the like. 1,072
Sec. 1308.15. (A) A person placing his signature upon 1,081
SIGNING a certificated security or an initial transaction 1,082
statement CERTIFICATE as authenticating trustee, registrar, 1,083
transfer agent, or the like, warrants to a purchaser for value of 1,084
the certificated security or a purchaser for value of an 1,086
uncertificated security to whom the initial transaction statement 1,087
has been sent, if the purchaser is without notice of the 1,088
particular defect, that:
(1) The certificated security or initial transaction 1,090
CERTIFICATE is genuine; 1,091
(2) His THE PERSON'S own participation in the issue or 1,093
registration of the transfer, pledge, or release of the security 1,094
is within his THE PERSON'S capacity and within the scope of the 1,095
authority received by him THE PERSON from the issuer; and 1,096
(3) He THE PERSON has reasonable grounds to believe the 1,098
CERTIFICATED security is in the form and within the amount the 1,099
issuer is authorized to issue. 1,101
(B) Unless otherwise agreed, a person by so placing his 1,103
signature SIGNING UNDER DIVISION (A) OF THIS SECTION does not 1,105
assume responsibility for the validity of the security in other
respects.
Sec. 1308.16. (A) Upon transfer EXCEPT AS OTHERWISE 1,114
PROVIDED IN DIVISIONS (B) AND (C) OF THIS SECTION, UPON DELIVERY 1,115
25
of a CERTIFICATED OR UNCERTIFICATED security to a purchaser as 1,116
provided in section 1308.28 of the Revised Code, the purchaser 1,118
acquires the ALL rights in the security which his THAT THE 1,119
transferor had or had actual authority POWER to convey unless the 1,121
purchaser's rights are limited by division (D) of section 1308.17
of the Revised Code TRANSFER. 1,122
(B) A transferee PURCHASER of a limited interest acquires 1,124
rights only to the extent of the interest transferred PURCHASED. 1,126
The creation or release of a security interest in a security is 1,127
the transfer of a limited interest in that security. 1,128
(C) A PURCHASER OF A CERTIFICATED SECURITY WHO AS A 1,130
PREVIOUS HOLDER HAD NOTICE OF AN ADVERSE CLAIM DOES NOT IMPROVE 1,131
ITS POSITION BY TAKING FROM A PROTECTED PURCHASER. 1,132
Sec. 1308.17. (A) A "bona fide PROTECTED purchaser" is 1,141
MEANS a purchaser for value in good faith and without OF A 1,142
CERTIFICATED OR UNCERTIFICATED SECURITY, OR OF AN INTEREST 1,143
THEREIN, WHO:
(1) GIVES VALUE; 1,145
(2) DOES NOT HAVE notice of any adverse claim: 1,147
(1) Who takes delivery TO THE SECURITY; AND 1,149
(3) OBTAINS CONTROL of a THE certificated OR 1,151
UNCERTIFICATED security in bearer form or in registered form, 1,152
issued or indorsed to him or in blank; 1,153
(2) To whom the transfer, pledge, or release of an 1,155
uncertificated security is registered on the books of the issuer; 1,156
or 1,157
(3) To whom a security is transferred under the provisions 1,159
of division (A)(3), (4)(a), or (7) of section 1308.28 of the 1,160
Revised Code. 1,161
(B) "Adverse claim" includes a claim that a transfer was 1,163
or would be wrongful or that a particular adverse person is the 1,164
owner of or has an interest in the security. 1,165
(C) A bona fide purchaser in IN addition to acquiring the 1,167
rights of a purchaser, as provided in section 1308.16 of the 1,168
26
Revised Code, A PROTECTED PURCHASER also acquires his ITS 1,170
interest in the security free of any adverse claim. 1,171
(D) Notwithstanding division (A) of section 1308.16 of the 1,173
Revised Code, the transferee of a particular certificated 1,174
security who has been a party to any fraud or illegality 1,175
affecting the security, or who as a prior holder of that 1,176
certificated security had notice of an adverse claim, cannot 1,177
improve his position by taking from a bona fide purchaser. 1,178
Sec. 1308.18. (A) A PERSON ACQUIRES A SECURITY OR AN 1,180
INTEREST THEREIN, UNDER THIS CHAPTER, IF: 1,181
(1) THE PERSON IS A PURCHASER TO WHOM A SECURITY IS 1,183
DELIVERED PURSUANT TO SECTION 1308.27 OF THE REVISED CODE; OR 1,184
(2) THE PERSON ACQUIRES A SECURITY ENTITLEMENT TO THE 1,186
SECURITY PURSUANT TO SECTION 1308.51 OF THE REVISED CODE. 1,187
(B) A PERSON ACQUIRES A FINANCIAL ASSET, OTHER THAN A 1,189
SECURITY, OR AN INTEREST THEREIN, UNDER THIS CHAPTER, IF THE 1,190
PERSON ACQUIRES A SECURITY ENTITLEMENT TO THE FINANCIAL ASSET. 1,191
(C) A PERSON WHO ACQUIRES A SECURITY ENTITLEMENT TO A 1,193
SECURITY OR OTHER FINANCIAL ASSET HAS THE RIGHTS SPECIFIED IN 1,194
SECTIONS 1308.51 TO 1308.61 OF THE REVISED CODE, BUT IS A 1,195
PURCHASER OF ANY SECURITY, SECURITY ENTITLEMENT, OR OTHER
FINANCIAL ASSET HELD BY THE SECURITIES INTERMEDIARY ONLY TO THE 1,196
EXTENT PROVIDED IN SECTION 1308.53 OF THE REVISED CODE. 1,197
(D) UNLESS THE CONTEXT SHOWS THAT A DIFFERENT MEANING IS 1,199
INTENDED, A PERSON WHO IS REQUIRED BY OTHER LAW, REGULATION, 1,200
RULE, OR AGREEMENT TO TRANSFER, DELIVER, PRESENT, SURRENDER, 1,201
EXCHANGE, OR OTHERWISE PUT IN THE POSSESSION OF ANOTHER PERSON A 1,202
SECURITY OR FINANCIAL ASSET SATISFIES THAT REQUIREMENT BY CAUSING 1,203
THE OTHER PERSON TO ACQUIRE AN INTEREST IN THE SECURITY OR 1,204
FINANCIAL ASSET PURSUANT TO DIVISION (A) OR (B) OF THIS SECTION. 1,205
Sec. 1308.19. (A) A PERSON HAS NOTICE OF AN ADVERSE CLAIM 1,207
IF:
(1) THE PERSON KNOWS OF THE ADVERSE CLAIM; 1,209
(2) THE PERSON IS AWARE OF FACTS SUFFICIENT TO INDICATE 1,211
27
THAT THERE IS A SIGNIFICANT PROBABILITY THAT THE ADVERSE CLAIM 1,212
EXISTS AND DELIBERATELY AVOIDS INFORMATION THAT WOULD ESTABLISH 1,213
THE EXISTENCE OF THE ADVERSE CLAIM; OR
(3) THE PERSON HAS A DUTY, IMPOSED BY STATUTE OR RULE, TO 1,215
INVESTIGATE WHETHER AN ADVERSE CLAIM EXISTS, AND THE 1,216
INVESTIGATION SO REQUIRED WOULD ESTABLISH THE EXISTENCE OF THE 1,217
ADVERSE CLAIM.
(B) HAVING KNOWLEDGE THAT A FINANCIAL ASSET OR INTEREST 1,219
THEREIN IS OR HAS BEEN TRANSFERRED BY A REPRESENTATIVE IMPOSES NO 1,220
DUTY OF INQUIRY INTO THE RIGHTFULNESS OF A TRANSACTION AND IS NOT 1,221
NOTICE OF AN ADVERSE CLAIM. HOWEVER, A PERSON WHO KNOWS THAT A 1,222
REPRESENTATIVE HAS TRANSFERRED A FINANCIAL ASSET OR INTEREST 1,223
THEREIN IN A TRANSACTION THAT IS, OR WHOSE PROCEEDS ARE BEING 1,224
USED, FOR THE INDIVIDUAL BENEFIT OF THE REPRESENTATIVE OR
OTHERWISE IN BREACH OF DUTY HAS NOTICE OF AN ADVERSE CLAIM. 1,225
(C) AN ACT OR EVENT THAT CREATES A RIGHT TO IMMEDIATE 1,227
PERFORMANCE OF THE PRINCIPAL OBLIGATION REPRESENTED BY A SECURITY 1,228
CERTIFICATE OR SETS A DATE ON OR AFTER WHICH THE CERTIFICATE IS 1,229
TO BE PRESENTED OR SURRENDERED FOR REDEMPTION OR EXCHANGE DOES 1,230
NOT ITSELF CONSTITUTE NOTICE OF AN ADVERSE CLAIM EXCEPT IN THE 1,231
CASE OF A TRANSFER MORE THAN:
(1) ONE YEAR AFTER A DATE SET FOR PRESENTMENT OR SURRENDER 1,233
FOR REDEMPTION OR EXCHANGE; OR 1,234
(2) SIX MONTHS AFTER A DATE SET FOR PAYMENT OF MONEY 1,236
AGAINST PRESENTATION OR SURRENDER OF THE CERTIFICATE, IF MONEY 1,237
WAS AVAILABLE FOR PAYMENT ON THAT DATE. 1,238
(D) A PURCHASER OF A CERTIFICATED SECURITY HAS NOTICE OF 1,240
AN ADVERSE CLAIM IF THE SECURITY CERTIFICATE: 1,241
(1) WHETHER IN BEARER OR REGISTERED FORM, HAS BEEN 1,243
INDORSED "FOR COLLECTION" OR "FOR SURRENDER" OR FOR SOME OTHER 1,244
PURPOSE NOT INVOLVING TRANSFER; OR 1,245
(2) IS IN BEARER FORM AND HAS ON IT AN UNAMBIGUOUS 1,247
STATEMENT THAT IT IS THE PROPERTY OF A PERSON OTHER THAN THE 1,248
TRANSFEROR, BUT THE MERE WRITING OF A NAME ON THE CERTIFICATE IS 1,249
28
NOT SUCH A STATEMENT.
(E) FILING OF A FINANCING STATEMENT UNDER CHAPTER 1309. OF 1,252
THE REVISED CODE IS NOT NOTICE OF AN ADVERSE CLAIM TO A FINANCIAL
ASSET.
Sec. 1308.20. (A) A PERSON WHO TRANSFERS A CERTIFICATED 1,254
SECURITY TO A PURCHASER FOR VALUE WARRANTS TO THE PURCHASER, AND 1,255
AN INDORSER, IF THE TRANSFER IS BY INDORSEMENT, WARRANTS TO ANY 1,256
SUBSEQUENT PURCHASER, THAT:
(1) THE CERTIFICATE IS GENUINE AND HAS NOT BEEN MATERIALLY 1,258
ALTERED;
(2) THE TRANSFEROR OR INDORSER DOES NOT KNOW OF ANY FACT 1,260
THAT MIGHT IMPAIR THE VALIDITY OF THE SECURITY; 1,261
(3) THERE IS NO ADVERSE CLAIM TO THE SECURITY; 1,263
(4) THE TRANSFER DOES NOT VIOLATE ANY RESTRICTION ON 1,265
TRANSFER;
(5) IF THE TRANSFER IS BY INDORSEMENT, THE INDORSEMENT IS 1,267
MADE BY AN APPROPRIATE PERSON, OR IF THE INDORSEMENT IS BY AN 1,268
AGENT, THE AGENT HAS ACTUAL AUTHORITY TO ACT ON BEHALF OF THE 1,269
APPROPRIATE PERSON; AND
(6) THE TRANSFER IS OTHERWISE EFFECTIVE AND RIGHTFUL. 1,271
(B) A PERSON WHO ORIGINATES AN INSTRUCTION FOR 1,273
REGISTRATION OF TRANSFER OF AN UNCERTIFICATED SECURITY TO A 1,274
PURCHASER FOR VALUE WARRANTS TO THE PURCHASER THAT: 1,275
(1) THE INSTRUCTION IS MADE BY AN APPROPRIATE PERSON, OR 1,277
IF THE INSTRUCTION IS BY AN AGENT, THE AGENT HAS ACTUAL AUTHORITY 1,278
TO ACT ON BEHALF OF THE APPROPRIATE PERSON; 1,279
(2) THE SECURITY IS VALID; 1,281
(3) THERE IS NO ADVERSE CLAIM TO THE SECURITY; AND 1,283
(4) AT THE TIME THE INSTRUCTION IS PRESENTED TO THE 1,285
ISSUER:
(a) THE PURCHASER WILL BE ENTITLED TO THE REGISTRATION OF 1,287
TRANSFER; 1,288
(b) THE TRANSFER WILL BE REGISTERED BY THE ISSUER FREE 1,290
FROM ALL LIENS, SECURITY INTERESTS, RESTRICTIONS, AND CLAIMS 1,291
29
OTHER THAN THOSE SPECIFIED IN THE INSTRUCTION; 1,292
(c) THE TRANSFER WILL NOT VIOLATE ANY RESTRICTION ON 1,294
TRANSFER; AND 1,295
(d) THE REQUESTED TRANSFER WILL OTHERWISE BE EFFECTIVE AND 1,297
RIGHTFUL. 1,298
(C) A PERSON WHO TRANSFERS AN UNCERTIFICATED SECURITY TO A 1,300
PURCHASER FOR VALUE AND DOES NOT ORIGINATE AN INSTRUCTION IN 1,301
CONNECTION WITH THE TRANSFER WARRANTS THAT: 1,302
(1) THE UNCERTIFICATED SECURITY IS VALID; 1,304
(2) THERE IS NO ADVERSE CLAIM TO THE SECURITY; 1,306
(3) THE TRANSFER DOES NOT VIOLATE ANY RESTRICTION ON 1,308
TRANSFER; AND
(4) THE TRANSFER IS OTHERWISE EFFECTIVE AND RIGHTFUL. 1,310
(D) A PERSON WHO INDORSES A SECURITY CERTIFICATE WARRANTS 1,312
TO THE ISSUER THAT: 1,313
(1) THERE IS NO ADVERSE CLAIM TO THE SECURITY; AND 1,315
(2) THE INDORSEMENT IS EFFECTIVE. 1,317
(E) A PERSON WHO ORIGINATES AN INSTRUCTION FOR 1,319
REGISTRATION OF TRANSFER OF AN UNCERTIFICATED SECURITY WARRANTS 1,320
TO THE ISSUER THAT:
(1) THE INSTRUCTION IS EFFECTIVE; AND 1,322
(2) AT THE TIME THE INSTRUCTION IS PRESENTED TO THE ISSUER 1,324
THE PURCHASER WILL BE ENTITLED TO THE REGISTRATION OF TRANSFER. 1,325
(F) A PERSON WHO PRESENTS A CERTIFICATED SECURITY FOR 1,327
REGISTRATION OF TRANSFER OR FOR PAYMENT OR EXCHANGE WARRANTS TO 1,328
THE ISSUER THAT THE PERSON IS ENTITLED TO THE REGISTRATION, 1,329
PAYMENT, OR EXCHANGE, BUT A PURCHASER FOR VALUE AND WITHOUT 1,330
NOTICE OF ADVERSE CLAIMS TO WHOM TRANSFER IS REGISTERED WARRANTS 1,331
ONLY THAT THE PERSON HAS NO KNOWLEDGE OF ANY UNAUTHORIZED
SIGNATURE IN A NECESSARY INDORSEMENT. 1,332
(G) IF A PERSON ACTS AS AGENT OF ANOTHER IN DELIVERING A 1,334
CERTIFICATED SECURITY TO A PURCHASER, THE IDENTITY OF THE 1,335
PRINCIPAL WAS KNOWN TO THE PERSON TO WHOM THE CERTIFICATE WAS 1,336
DELIVERED, AND THE CERTIFICATE DELIVERED BY THE AGENT WAS 1,337
30
RECEIVED BY THE AGENT FROM THE PRINCIPAL OR RECEIVED BY THE AGENT 1,338
FROM ANOTHER PERSON AT THE DIRECTION OF THE PRINCIPAL, THE PERSON 1,339
DELIVERING THE SECURITY CERTIFICATE WARRANTS ONLY THAT THE
DELIVERING PERSON HAS AUTHORITY TO ACT FOR THE PRINCIPAL AND DOES 1,340
NOT KNOW OF ANY ADVERSE CLAIM TO THE CERTIFICATED SECURITY. 1,341
(H) A SECURED PARTY WHO REDELIVERS A SECURITY CERTIFICATE 1,343
RECEIVED, OR AFTER PAYMENT AND ON ORDER OF THE DEBTOR DELIVERS 1,344
THE SECURITY CERTIFICATE TO ANOTHER PERSON, MAKES ONLY THE 1,345
WARRANTIES OF AN AGENT UNDER DIVISION (G) OF THIS SECTION. 1,346
(I) EXCEPT AS OTHERWISE PROVIDED IN DIVISION (G) OF THIS 1,348
SECTION, A BROKER ACTING FOR A CUSTOMER MAKES TO THE ISSUER AND A 1,349
PURCHASER THE WARRANTIES PROVIDED IN DIVISIONS (A) TO (F) OF THIS 1,350
SECTION. A BROKER THAT DELIVERS A SECURITY CERTIFICATE TO ITS 1,351
CUSTOMER, OR CAUSES ITS CUSTOMER TO BE REGISTERED AS THE OWNER OF 1,352
AN UNCERTIFICATED SECURITY, MAKES TO THE CUSTOMER THE WARRANTIES 1,353
PROVIDED IN DIVISION (A) OR (B) OF THIS SECTION, AND HAS THE 1,354
RIGHTS AND PRIVILEGES OF A PURCHASER UNDER THIS SECTION. THE 1,355
WARRANTIES OF AND IN FAVOR OF THE BROKER ACTING AS AN AGENT ARE 1,356
IN ADDITION TO APPLICABLE WARRANTIES GIVEN BY AND IN FAVOR OF THE 1,357
CUSTOMER.
Sec. 1308.21. (A) A PERSON WHO ORIGINATES AN ENTITLEMENT 1,359
ORDER TO A SECURITIES INTERMEDIARY WARRANTS TO THE SECURITIES 1,360
INTERMEDIARY THAT:
(1) THE ENTITLEMENT ORDER IS MADE BY AN APPROPRIATE 1,362
PERSON, OR IF THE ENTITLEMENT ORDER IS BY AN AGENT, THE AGENT HAS 1,363
ACTUAL AUTHORITY TO ACT ON BEHALF OF THE APPROPRIATE PERSON; AND 1,364
(2) THERE IS NO ADVERSE CLAIM TO THE SECURITY ENTITLEMENT. 1,366
(B) A PERSON WHO DELIVERS A SECURITY CERTIFICATE TO A 1,368
SECURITIES INTERMEDIARY FOR CREDIT TO A SECURITIES ACCOUNT OR 1,369
ORIGINATES AN INSTRUCTION WITH RESPECT TO AN UNCERTIFICATED 1,370
SECURITY DIRECTING THAT THE UNCERTIFICATED SECURITY BE CREDITED 1,371
TO A SECURITIES ACCOUNT MAKES TO THE SECURITIES INTERMEDIARY THE 1,372
WARRANTIES SPECIFIED IN DIVISION (A) OR (B) OF SECTION 1308.20 OF 1,373
THE REVISED CODE.
31
(C) IF A SECURITIES INTERMEDIARY DELIVERS A SECURITY 1,375
CERTIFICATE TO ITS ENTITLEMENT HOLDER OR CAUSES ITS ENTITLEMENT 1,376
HOLDER TO BE REGISTERED AS THE OWNER OF AN UNCERTIFICATED 1,377
SECURITY, THE SECURITIES INTERMEDIARY MAKES TO THE ENTITLEMENT 1,378
HOLDER THE WARRANTIES SPECIFIED IN DIVISION (A) OR (B) OF SECTION 1,379
1308.20 OF THE REVISED CODE.
Sec. 1308.22. (A) AN INDORSEMENT MAY BE IN BLANK OR 1,388
SPECIAL. AN INDORSEMENT IN BLANK INCLUDES AN INDORSEMENT TO 1,390
BEARER. A SPECIAL INDORSEMENT SPECIFIES TO WHOM A SECURITY IS TO 1,391
BE TRANSFERRED OR WHO HAS POWER TO TRANSFER IT. A HOLDER MAY 1,393
CONVERT A BLANK INDORSEMENT TO A SPECIAL INDORSEMENT.
(B) AN INDORSEMENT PURPORTING TO BE ONLY OF PART OF A 1,395
SECURITY CERTIFICATE REPRESENTING UNITS INTENDED BY THE ISSUER TO 1,396
BE SEPARATELY TRANSFERABLE IS EFFECTIVE TO THE EXTENT OF THE 1,397
INDORSEMENT.
(C) AN INDORSEMENT, WHETHER SPECIAL OR IN BLANK, DOES NOT 1,399
CONSTITUTE A TRANSFER UNTIL DELIVERY OF THE CERTIFICATE ON WHICH 1,400
IT APPEARS OR, IF THE INDORSEMENT IS ON A SEPARATE DOCUMENT, 1,402
UNTIL DELIVERY OF BOTH THE DOCUMENT AND THE CERTIFICATE. 1,403
(D) If a certificated security CERTIFICATE in registered 1,406
form has been delivered to a purchaser without a necessary 1,407
indorsement he, THE PURCHASER may become a bona fide PROTECTED 1,408
purchaser only as of the time WHEN the indorsement is supplied; 1,409
but. HOWEVER, against the A transferor, the A transfer is 1,411
complete upon delivery and the purchaser has a specifically 1,412
enforceable right to have any necessary indorsement supplied. 1,413
(E) AN INDORSEMENT OF A SECURITY CERTIFICATE IN BEARER 1,415
FORM MAY GIVE NOTICE OF AN ADVERSE CLAIM TO THE CERTIFICATE, BUT 1,416
IT DOES NOT OTHERWISE AFFECT A RIGHT TO REGISTRATION THAT THE 1,417
HOLDER POSSESSES.
(F) UNLESS OTHERWISE AGREED, A PERSON MAKING AN 1,419
INDORSEMENT ASSUMES ONLY THE OBLIGATIONS PROVIDED IN SECTION 1,420
1308.20 OF THE REVISED CODE AND NOT AN OBLIGATION THAT THE 1,421
SECURITY WILL BE HONORED BY THE ISSUER.
32
Sec. 1308.23. (A) "APPROPRIATE PERSON" MEANS: 1,423
(1) WITH RESPECT TO AN INDORSEMENT, THE PERSON SPECIFIED 1,425
BY A SECURITY CERTIFICATE OR BY AN EFFECTIVE SPECIAL INDORSEMENT 1,426
TO BE ENTITLED TO THE SECURITY; 1,427
(2) WITH RESPECT TO AN INSTRUCTION, THE REGISTERED OWNER 1,429
OF AN UNCERTIFICATED SECURITY; 1,430
(3) WITH RESPECT TO AN ENTITLEMENT ORDER, THE ENTITLEMENT 1,432
HOLDER;
(4) IF THE PERSON DESIGNATED IN DIVISION (A)(1), (2), OR 1,434
(3) OF THIS SECTION IS DECEASED, THE DESIGNATED PERSON'S 1,435
SUCCESSOR TAKING UNDER OTHER LAW OR THE DESIGNATED PERSON'S 1,436
PERSONAL REPRESENTATIVE ACTING FOR THE ESTATE OF THE DECEDENT; OR 1,437
(5) IF THE PERSON DESIGNATED IN DIVISION (A)(1), (2), OR 1,439
(3) OF THIS SECTION LACKS CAPACITY, THE DESIGNATED PERSON'S 1,440
GUARDIAN, CONSERVATOR, OR OTHER SIMILAR REPRESENTATIVE WHO HAS 1,441
POWER UNDER OTHER LAW TO TRANSFER THE SECURITY OR FINANCIAL 1,442
ASSET.
(B) AN INDORSEMENT, INSTRUCTION, OR ENTITLEMENT ORDER IS 1,444
EFFECTIVE IF: 1,445
(1) IT IS MADE BY THE APPROPRIATE PERSON; 1,447
(2) IT IS MADE BY A PERSON WHO HAS POWER UNDER THE LAW OF 1,449
AGENCY TO TRANSFER THE SECURITY OR FINANCIAL ASSET ON BEHALF OF 1,450
THE APPROPRIATE PERSON, INCLUDING, IN THE CASE OF AN INSTRUCTION 1,451
OR ENTITLEMENT ORDER, A PERSON WHO HAS CONTROL UNDER DIVISION 1,452
(C)(2) OR (D)(2) OF SECTION 1308.24 OF THE REVISED CODE; OR 1,453
(3) THE APPROPRIATE PERSON HAS RATIFIED IT OR IS OTHERWISE 1,455
PRECLUDED FROM ASSERTING ITS INEFFECTIVENESS. 1,456
(C) AN INDORSEMENT, INSTRUCTION, OR ENTITLEMENT ORDER MADE 1,458
BY A REPRESENTATIVE IS EFFECTIVE EVEN IF: 1,459
(1) THE REPRESENTATIVE HAS FAILED TO COMPLY WITH A 1,461
CONTROLLING INSTRUMENT OR WITH THE LAW OF THE STATE HAVING 1,462
JURISDICTION OF THE REPRESENTATIVE RELATIONSHIP, INCLUDING ANY 1,463
LAW REQUIRING THE REPRESENTATIVE TO OBTAIN COURT APPROVAL OF THE 1,464
TRANSACTION; OR
33
(2) THE REPRESENTATIVE'S ACTION IN MAKING THE INDORSEMENT, 1,466
INSTRUCTION, OR ENTITLEMENT ORDER OR USING THE PROCEEDS OF THE 1,467
TRANSACTION IS OTHERWISE A BREACH OF DUTY. 1,468
(D) IF A SECURITY IS REGISTERED IN THE NAME OF OR 1,470
SPECIALLY INDORSED TO A PERSON DESCRIBED AS A REPRESENTATIVE, OR 1,471
IF A SECURITIES ACCOUNT IS MAINTAINED IN THE NAME OF A PERSON 1,472
DESCRIBED AS A REPRESENTATIVE, AN INDORSEMENT, INSTRUCTION, OR 1,473
ENTITLEMENT ORDER MADE BY THE PERSON IS EFFECTIVE EVEN THOUGH THE 1,474
PERSON IS NO LONGER SERVING IN THE DESCRIBED CAPACITY.
(E) EFFECTIVENESS OF AN INDORSEMENT, INSTRUCTION, OR 1,476
ENTITLEMENT ORDER IS DETERMINED AS OF THE DATE THE INDORSEMENT, 1,477
INSTRUCTION, OR ENTITLEMENT ORDER IS MADE, AND AN INDORSEMENT, 1,478
INSTRUCTION, OR ENTITLEMENT ORDER DOES NOT BECOME INEFFECTIVE BY 1,479
REASON OF ANY LATER CHANGE OF CIRCUMSTANCES. 1,480
Sec. 1308.24. (A) A PURCHASER HAS "CONTROL" OF A 1,482
CERTIFICATED SECURITY IN BEARER FORM IF THE CERTIFICATED SECURITY 1,483
IS DELIVERED TO THE PURCHASER. 1,484
(B) A PURCHASER HAS "CONTROL" OF A CERTIFICATED SECURITY 1,486
IN REGISTERED FORM IF THE CERTIFICATED SECURITY IS DELIVERED TO 1,487
THE PURCHASER, AND: 1,488
(1) THE CERTIFICATE IS INDORSED TO THE PURCHASER OR IN 1,490
BLANK BY AN EFFECTIVE INDORSEMENT; OR 1,491
(2) THE CERTIFICATE IS REGISTERED IN THE NAME OF THE 1,493
PURCHASER, UPON ORIGINAL ISSUE OR REGISTRATION OF TRANSFER BY THE 1,494
ISSUER.
(C) A PURCHASER HAS "CONTROL" OF AN UNCERTIFICATED 1,496
SECURITY IF:
(1) THE UNCERTIFICATED SECURITY IS DELIVERED TO THE 1,498
PURCHASER; OR
(2) THE ISSUER HAS AGREED THAT IT WILL COMPLY WITH 1,500
INSTRUCTIONS ORIGINATED BY THE PURCHASER WITHOUT FURTHER CONSENT 1,501
BY THE REGISTERED OWNER.
(D) A PURCHASER HAS "CONTROL" OF A SECURITY ENTITLEMENT 1,503
IF:
34
(1) THE PURCHASER BECOMES THE ENTITLEMENT HOLDER; OR 1,505
(2) THE SECURITIES INTERMEDIARY HAS AGREED THAT IT WILL 1,507
COMPLY WITH ENTITLEMENT ORDERS ORIGINATED BY THE PURCHASER 1,508
WITHOUT FURTHER CONSENT BY THE ENTITLEMENT HOLDER. 1,509
(E) IF AN INTEREST IN A SECURITY ENTITLEMENT IS GRANTED BY 1,511
THE ENTITLEMENT HOLDER TO THE ENTITLEMENT HOLDER'S OWN SECURITIES 1,512
INTERMEDIARY, THE SECURITIES INTERMEDIARY HAS CONTROL. 1,513
(F) A PURCHASER WHO HAS SATISFIED THE REQUIREMENTS OF 1,515
DIVISION (C)(2) OR (D)(2) OF THIS SECTION HAS CONTROL EVEN IF THE 1,516
REGISTERED OWNER IN THE CASE OF DIVISION (C)(2) OF THIS SECTION 1,517
OR THE ENTITLEMENT HOLDER IN THE CASE OF DIVISION (D)(2) OF THIS 1,518
SECTION RETAINS THE RIGHT TO MAKE SUBSTITUTIONS FOR THE 1,519
UNCERTIFICATED SECURITY OR SECURITY ENTITLEMENT, TO ORIGINATE 1,520
INSTRUCTIONS OR ENTITLEMENT ORDERS TO THE ISSUER OR SECURITIES 1,521
INTERMEDIARY, OR OTHERWISE TO DEAL WITH THE UNCERTIFICATED 1,522
SECURITY OR SECURITY ENTITLEMENT. 1,523
(G) AN ISSUER OR A SECURITIES INTERMEDIARY MAY NOT ENTER 1,525
INTO AN AGREEMENT OF THE KIND DESCRIBED IN DIVISION (C)(2) OR 1,526
(D)(2) OF THIS SECTION WITHOUT THE CONSENT OF THE REGISTERED 1,527
OWNER OR ENTITLEMENT HOLDER, BUT AN ISSUER OR A SECURITIES 1,528
INTERMEDIARY IS NOT REQUIRED TO ENTER INTO SUCH AN AGREEMENT EVEN 1,529
THOUGH THE REGISTERED OWNER OR ENTITLEMENT HOLDER SO DIRECTS. AN 1,530
ISSUER OR SECURITIES INTERMEDIARY THAT HAS ENTERED INTO SUCH AN 1,531
AGREEMENT IS NOT REQUIRED TO CONFIRM THE EXISTENCE OF THE
AGREEMENT TO ANOTHER PARTY UNLESS REQUESTED TO DO SO BY THE 1,532
REGISTERED OWNER OR ENTITLEMENT HOLDER. 1,533
Sec. 1308.25. (A) IF AN INSTRUCTION HAS BEEN ORIGINATED 1,535
BY AN APPROPRIATE PERSON BUT IS INCOMPLETE IN ANY OTHER RESPECT, 1,536
ANY PERSON MAY COMPLETE IT AS AUTHORIZED AND THE ISSUER MAY RELY 1,537
ON IT AS COMPLETED, EVEN THOUGH IT HAS BEEN COMPLETED 1,538
INCORRECTLY.
(B) UNLESS OTHERWISE AGREED, A PERSON INITIATING AN 1,540
INSTRUCTION ASSUMES ONLY THE OBLIGATIONS IMPOSED BY SECTION 1,541
1308.20 OF THE REVISED CODE AND NOT AN OBLIGATION THAT THE 1,542
35
SECURITY WILL BE HONORED BY THE ISSUER.
Sec. 1308.26. (A) A PERSON WHO GUARANTEES A SIGNATURE OF 1,544
AN INDORSER OF A SECURITY CERTIFICATE WARRANTS THAT AT THE TIME 1,545
OF SIGNING:
(1) THE SIGNATURE WAS GENUINE; 1,547
(2) THE SIGNER WAS AN APPROPRIATE PERSON TO INDORSE, OR IF 1,549
THE SIGNATURE IS BY AN AGENT, THE AGENT HAD ACTUAL AUTHORITY TO 1,550
ACT ON BEHALF OF THE APPROPRIATE PERSON; AND 1,551
(3) THE SIGNER HAD LEGAL CAPACITY TO SIGN. 1,553
(B) A PERSON WHO GUARANTEES A SIGNATURE OF THE ORIGINATOR 1,555
OF AN INSTRUCTION WARRANTS THAT AT THE TIME OF SIGNING: 1,556
(1) THE SIGNATURE WAS GENUINE; 1,558
(2) THE SIGNER WAS AN APPROPRIATE PERSON TO ORIGINATE THE 1,560
INSTRUCTION, OR IF THE SIGNATURE IS BY AN AGENT, THE AGENT HAD 1,561
ACTUAL AUTHORITY TO ACT ON BEHALF OF THE APPROPRIATE PERSON, IF 1,562
THE PERSON SPECIFIED IN THE INSTRUCTION AS THE REGISTERED OWNER 1,563
WAS, IN FACT, THE REGISTERED OWNER, AS TO WHICH FACT THE 1,564
SIGNATURE GUARANTOR DOES NOT MAKE A WARRANTY; AND
(3) THE SIGNER HAD LEGAL CAPACITY TO SIGN. 1,567
(C) A PERSON WHO SPECIALLY GUARANTEES THE SIGNATURE OF AN 1,569
ORIGINATOR OF AN INSTRUCTION MAKES THE WARRANTIES OF A SIGNATURE 1,570
GUARANTOR UNDER DIVISION (B) OF THIS SECTION AND ALSO WARRANTS 1,571
THAT AT THE TIME THE INSTRUCTION IS PRESENTED TO THE ISSUER: 1,572
(1) THE PERSON SPECIFIED IN THE INSTRUCTION AS THE 1,574
REGISTERED OWNER OF THE UNCERTIFICATED SECURITY WILL BE THE 1,575
REGISTERED OWNER; AND
(2) THE TRANSFER OF THE UNCERTIFICATED SECURITY REQUESTED 1,577
IN THE INSTRUCTION WILL BE REGISTERED BY THE ISSUER FREE FROM ALL 1,578
LIENS, SECURITY INTERESTS, RESTRICTIONS, AND CLAIMS OTHER THAN 1,579
THOSE SPECIFIED IN THE INSTRUCTION. 1,580
(D) A GUARANTOR UNDER DIVISIONS (A) AND (B) OF THIS 1,583
SECTION OR A SPECIAL GUARANTOR UNDER DIVISION (C) OF THIS SECTION 1,584
DOES NOT OTHERWISE WARRANT THE RIGHTFULNESS OF THE TRANSFER.
(E) A PERSON WHO GUARANTEES AN INDORSEMENT OF A SECURITY 1,586
36
CERTIFICATE MAKES THE WARRANTIES OF A SIGNATURE GUARANTOR UNDER 1,587
DIVISION (A) OF THIS SECTION AND ALSO WARRANTS THE RIGHTFULNESS 1,588
OF THE TRANSFER IN ALL RESPECTS. 1,589
(F) A PERSON WHO GUARANTEES AN INSTRUCTION REQUESTING THE 1,591
TRANSFER OF AN UNCERTIFICATED SECURITY MAKES THE WARRANTIES OF A 1,592
SPECIAL SIGNATURE GUARANTOR UNDER DIVISION (C) OF THIS SECTION 1,593
AND ALSO WARRANTS THE RIGHTFULNESS OF THE TRANSFER IN ALL 1,594
RESPECTS.
(G) AN ISSUER MAY NOT REQUIRE A SPECIAL GUARANTY OF 1,596
SIGNATURE, A GUARANTY OF INDORSEMENT, OR A GUARANTY OF 1,597
INSTRUCTION AS A CONDITION TO REGISTRATION OF TRANSFER. 1,598
(H) THE WARRANTIES UNDER THIS SECTION ARE MADE TO A PERSON 1,600
TAKING OR DEALING WITH THE SECURITY IN RELIANCE ON THE GUARANTY, 1,601
AND THE GUARANTOR IS LIABLE TO THE PERSON FOR LOSS RESULTING FROM 1,602
THEIR BREACH. AN INDORSER OR ORIGINATOR OF AN INSTRUCTION WHOSE 1,603
SIGNATURE, INDORSEMENT, OR INSTRUCTION HAS BEEN GUARANTEED IS 1,604
LIABLE TO A GUARANTOR FOR ANY LOSS SUFFERED BY THE GUARANTOR AS A 1,605
RESULT OF BREACH OF THE WARRANTIES OF THE GUARANTOR.
Sec. 1308.27. (A) DELIVERY OF A CERTIFICATED SECURITY TO 1,607
A PURCHASER OCCURS WHEN: 1,608
(1) THE PURCHASER ACQUIRES POSSESSION OF THE SECURITY 1,610
CERTIFICATE;
(2) ANOTHER PERSON, OTHER THAN A SECURITIES INTERMEDIARY, 1,612
EITHER ACQUIRES POSSESSION OF THE SECURITY CERTIFICATE ON BEHALF 1,613
OF THE PURCHASER OR, HAVING PREVIOUSLY ACQUIRED POSSESSION OF THE 1,614
CERTIFICATE, ACKNOWLEDGES THAT IT HOLDS FOR THE PURCHASER; OR 1,615
(3) A SECURITIES INTERMEDIARY ACTING ON BEHALF OF THE 1,617
PURCHASER ACQUIRES POSSESSION OF THE SECURITY CERTIFICATE, ONLY 1,618
IF THE CERTIFICATE IS IN REGISTERED FORM AND HAS BEEN SPECIALLY 1,619
INDORSED TO THE PURCHASER BY AN EFFECTIVE INDORSEMENT. 1,620
(B) DELIVERY OF AN UNCERTIFICATED SECURITY TO A PURCHASER 1,622
OCCURS WHEN: 1,623
(1) THE ISSUER REGISTERS THE PURCHASER AS THE REGISTERED 1,625
OWNER, UPON ORIGINAL ISSUE OR REGISTRATION OF TRANSFER; OR 1,626
37
(2) ANOTHER PERSON, OTHER THAN A SECURITIES INTERMEDIARY, 1,628
EITHER BECOMES THE REGISTERED OWNER OF THE UNCERTIFICATED 1,629
SECURITY ON BEHALF OF THE PURCHASER OR, HAVING PREVIOUSLY BECOME 1,630
THE REGISTERED OWNER, ACKNOWLEDGES THAT IT HOLDS FOR THE 1,631
PURCHASER.
Sec. 1308.31. Unless otherwise agreed, the transferor of a 1,640
certificated security or the transferor, pledgor, or pledgee of 1,642
an uncertificated security on due demand must SHALL supply his 1,643
THE purchaser with any proof of his authority to transfer, 1,645
pledge, or release or with any other requisite necessary to 1,646
obtain registration of the transfer, pledge, or release of the 1,648
security, but if the transfer, pledge, or release is not for 1,649
value, a transferor, pledgor, or pledgee need not do so COMPLY 1,650
unless the purchaser furnishes PAYS the necessary expenses. 1,651
Failure IF THE TRANSFEROR FAILS within a reasonable time to 1,652
comply with a THE demand made gives, the purchaser the right to 1,654
MAY reject or rescind the transfer, pledge, or release. 1,655
Sec. 1308.32. (A) THE INTEREST OF A DEBTOR IN A 1,657
CERTIFICATED SECURITY MAY BE REACHED BY A CREDITOR ONLY BY ACTUAL 1,658
SEIZURE OF THE SECURITY CERTIFICATE BY THE OFFICER MAKING THE 1,659
ATTACHMENT OR LEVY, EXCEPT AS OTHERWISE PROVIDED IN DIVISION (D) 1,660
OF THIS SECTION. HOWEVER, A CERTIFICATED SECURITY FOR WHICH THE 1,661
CERTIFICATE HAS BEEN SURRENDERED TO THE ISSUER MAY BE REACHED BY 1,662
A CREDITOR BY LEGAL PROCESS UPON THE ISSUER.
(B) THE INTEREST OF A DEBTOR IN AN UNCERTIFICATED SECURITY 1,664
MAY BE REACHED BY A CREDITOR ONLY BY LEGAL PROCESS UPON THE 1,665
ISSUER AT ITS CHIEF EXECUTIVE OFFICE IN THE UNITED STATES, EXCEPT 1,666
AS OTHERWISE PROVIDED IN DIVISION (D) OF THIS SECTION. 1,667
(C) THE INTEREST OF A DEBTOR IN A SECURITY ENTITLEMENT MAY 1,669
BE REACHED BY A CREDITOR ONLY BY LEGAL PROCESS UPON THE 1,670
SECURITIES INTERMEDIARY WITH WHOM THE DEBTOR'S SECURITIES ACCOUNT 1,671
IS MAINTAINED, EXCEPT AS OTHERWISE PROVIDED IN DIVISION (D) OF 1,672
THIS SECTION.
(D) THE INTEREST OF A DEBTOR IN A CERTIFICATED SECURITY 1,674
38
FOR WHICH THE CERTIFICATE IS IN THE POSSESSION OF A SECURED 1,675
PARTY, OR IN AN UNCERTIFICATED SECURITY REGISTERED IN THE NAME OF 1,676
A SECURED PARTY, OR A SECURITY ENTITLEMENT MAINTAINED IN THE NAME 1,677
OF A SECURED PARTY, MAY BE REACHED BY A CREDITOR BY LEGAL PROCESS 1,678
UPON THE SECURED PARTY.
(E) A CREDITOR WHOSE DEBTOR IS THE OWNER OF A CERTIFICATED 1,680
SECURITY, UNCERTIFICATED SECURITY, OR SECURITY ENTITLEMENT IS 1,681
ENTITLED TO AID FROM A COURT OF COMPETENT JURISDICTION, BY 1,682
INJUNCTION OR OTHERWISE, IN REACHING THE CERTIFICATED SECURITY, 1,683
UNCERTIFICATED SECURITY, OR SECURITY ENTITLEMENT OR IN SATISFYING 1,684
THE CLAIM BY MEANS ALLOWED AT LAW OR IN EQUITY IN REGARD TO 1,685
PROPERTY THAT CANNOT READILY BE REACHED BY OTHER LEGAL PROCESS.
Sec. 1308.33. (A) A SECURITIES INTERMEDIARY THAT HAS 1,687
TRANSFERRED A FINANCIAL ASSET PURSUANT TO AN EFFECTIVE 1,688
ENTITLEMENT ORDER, OR A BROKER OR OTHER AGENT OR BAILEE THAT HAS 1,689
DEALT WITH A FINANCIAL ASSET AT THE DIRECTION OF ITS CUSTOMER OR 1,690
PRINCIPAL, IS NOT LIABLE TO A PERSON HAVING AN ADVERSE CLAIM TO 1,691
THE FINANCIAL ASSET, UNLESS THE SECURITIES INTERMEDIARY, OR
BROKER OR OTHER AGENT OR BAILEE: 1,692
(1) TOOK THE ACTION AFTER IT HAD BEEN SERVED WITH AN 1,694
INJUNCTION, RESTRAINING ORDER, OR OTHER LEGAL PROCESS ENJOINING 1,695
IT FROM DOING SO, ISSUED BY A COURT OF COMPETENT JURISDICTION, 1,696
AND HAD A REASONABLE OPPORTUNITY TO ACT ON THE INJUNCTION, 1,697
RESTRAINING ORDER, OR OTHER LEGAL PROCESS; OR
(2) ACTED IN COLLUSION WITH THE WRONGDOER IN VIOLATING THE 1,699
RIGHTS OF THE ADVERSE CLAIMANT; OR 1,700
(3) IN THE CASE OF A SECURITY CERTIFICATE THAT HAS BEEN 1,702
STOLEN, ACTED WITH NOTICE OF THE ADVERSE CLAIM. 1,703
(B) A SECURITIES INTERMEDIARY THAT RECEIVES A FINANCIAL 1,705
ASSET AND ESTABLISHES A SECURITY ENTITLEMENT TO THE FINANCIAL 1,706
ASSET IN FAVOR OF AN ENTITLEMENT HOLDER IS A PURCHASER FOR VALUE 1,707
OF THE FINANCIAL ASSET. A SECURITIES INTERMEDIARY THAT ACQUIRES 1,708
A SECURITY ENTITLEMENT TO A FINANCIAL ASSET FROM ANOTHER 1,709
SECURITIES INTERMEDIARY ACQUIRES THE SECURITY ENTITLEMENT FOR 1,710
39
VALUE IF THE SECURITIES INTERMEDIARY ACQUIRING THE SECURITY
ENTITLEMENT ESTABLISHES A SECURITY ENTITLEMENT TO THE FINANCIAL 1,711
ASSET IN FAVOR OF AN ENTITLEMENT HOLDER. 1,712
Sec. 1308.37. (A) If a certificated security in 1,721
registered form is presented to the issuer with a request to 1,722
register transfer or an instruction is presented to the issuer 1,723
with a request to register transfer, pledge, or release OF AN 1,724
UNCERTIFICATED SECURITY, the issuer shall register the transfer, 1,725
pledge, or release as requested if: 1,726
(1) UNDER THE TERMS OF THE SECURITY THE PERSON SEEKING 1,728
REGISTRATION OF TRANSFER IS ELIGIBLE TO HAVE THE SECURITY 1,729
REGISTERED IN ITS NAME;
(2) The security is indorsed INDORSEMENT or the 1,731
instruction was originated IS MADE by the appropriate person or 1,732
persons, as provided in section 1308.23 of the Revised Code BY AN 1,734
AGENT WHO HAS ACTUAL AUTHORITY TO ACT ON BEHALF OF THE 1,735
APPROPRIATE PERSON;
(2)(3) Reasonable assurance is given that those 1,737
indorsements THE INDORSEMENT or instructions are INSTRUCTION IS 1,739
genuine and effective AUTHORIZED, as provided in section 1308.38 1,741
of the Revised Code;
(3) The issuer has no duty as to adverse claims or has 1,743
discharged the duty as provided in section 1308.39 of the Revised 1,744
Code; 1,745
(4) Any applicable law relating to the collection of taxes 1,747
has been complied with; 1,748
(5) THE TRANSFER DOES NOT VIOLATE ANY RESTRICTION ON 1,750
TRANSFER IMPOSED BY THE ISSUER IN ACCORDANCE WITH SECTION 1308.11 1,751
OF THE REVISED CODE;
(6) A DEMAND THAT THE ISSUER NOT REGISTER TRANSFER HAS NOT 1,753
BECOME EFFECTIVE UNDER SECTION 1308.39 OF THE REVISED CODE, OR 1,755
THE ISSUER HAS COMPLIED WITH DIVISION (B) OF THAT SECTION BUT NO 1,756
LEGAL PROCESS OR INDEMNITY BOND IS OBTAINED AS PROVIDED IN 1,758
DIVISION (D) OF THAT SECTION; and
40
(5)(7) The transfer, pledge, or release is in fact 1,760
rightful or is to a bona fide PROTECTED purchaser;. 1,762
(B) If an issuer is under a duty to register a transfer, 1,764
pledge, or release of a security, the issuer is also liable to 1,765
the person presenting a certificated security or an instruction 1,766
for registration or his THE PERSON'S principal for loss resulting 1,768
from any unreasonable delay in registration or from failure or 1,769
refusal to register the transfer, pledge, or release.
Sec. 1308.38. (A) The AN issuer may require the following 1,778
assurance that each necessary indorsement of a certificated 1,779
security or each instruction, as provided in section 1308.23 of 1,780
the Revised Code, is genuine and effective AUTHORIZED: 1,781
(1) In all cases, a guarantee GUARANTY of the signature, 1,783
as provided in division (A) or (B) of section 1308.27 of the 1,784
Revised Code, of the person indorsing a certificated security 1,785
MAKING AN INDORSEMENT or originating an instruction including, in 1,786
the case of an instruction, a warranty of the taxpayer 1,787
identification number or, in the absence thereof, other 1,788
reasonable assurance of identity; and
(2) If the indorsement is made or the instruction is 1,790
originated by an agent, appropriate assurance of ACTUAL authority 1,791
to sign; 1,792
(3) If the indorsement is made or the instruction is 1,794
originated by a fiduciary PURSUANT TO DIVISION (A)(4) OR (5) OF 1,795
SECTION 1308.23 OF THE REVISED CODE, appropriate evidence of 1,796
appointment, or incumbency; 1,797
(4) If there is more than one fiduciary, reasonable 1,799
assurance that all who are required to sign have done so; and 1,800
(5) If the indorsement is made or the instruction is 1,802
originated by a person not covered by any of the foregoing 1,803
ANOTHER PROVISION OF DIVISION (A) OF THIS SECTION, assurance 1,804
appropriate to the case corresponding as nearly as may be to the 1,806
foregoing SUCH PROVISIONS.
(B) A AN ISSUER MAY ELECT TO REQUIRE REASONABLE ASSURANCE 1,808
41
BEYOND THAT SPECIFIED IN THIS SECTION. 1,809
(C) IN THIS SECTION: 1,811
(1) "guarantee GUARANTY of the signature" in division (A) 1,814
of this section means a guarantee GUARANTY signed by or on behalf 1,815
of a person reasonably believed by the issuer to be responsible. 1,816
The issuer may adopt standards with respect to responsibility if 1,817
they are not manifestly unreasonable. 1,818
(C)(2) "Appropriate evidence of appointment or incumbency" 1,820
in division (A) of this section means: 1,821
(1)(a) In the case of a fiduciary appointed or qualified 1,823
by a court, a certificate issued by or under the direction or 1,824
supervision of that court or an officer thereof and dated within 1,825
sixty days before the date of presentation for transfer, pledge, 1,826
or release; or 1,827
(2)(b) In any other case, a copy of a document showing the 1,829
appointment or a certificate issued by or on behalf of a person 1,830
reasonably believed by the issuer to be responsible or, in the 1,831
absence of that document or certificate, other evidence 1,832
reasonably deemed by the issuer to be REASONABLY CONSIDERED 1,834
appropriate. The issuer may adopt standards with respect to the 1,835
evidence if they are not manifestly unreasonable. The issuer is 1,836
not charged with notice of the contents of any document obtained 1,837
pursuant to division (C)(2) of this section except to the extent 1,838
that the contents relate directly to the appointment or 1,839
incumbency.
(D) The issuer may elect to require reasonable assurance 1,841
beyond that specified in this section, but if it does so and, for 1,842
a purpose other than that specified in division (C)(2) of this 1,843
section, both requires and obtains a copy of a will, trust, 1,844
indenture, articles of co-partnership, by-laws, or other 1,845
controlling instrument, it is charged with notice of all matters 1,846
contained therein affecting the transfer, pledge, or release. 1,847
Sec. 1308.39. (A) A PERSON WHO IS AN APPROPRIATE PERSON 1,849
TO MAKE AN INDORSEMENT OR ORIGINATE AN INSTRUCTION MAY DEMAND 1,850
42
THAT THE ISSUER NOT REGISTER TRANSFER OF A SECURITY BY 1,851
COMMUNICATING TO THE ISSUER A NOTIFICATION THAT IDENTIFIES THE 1,852
REGISTERED OWNER AND THE ISSUE OF WHICH THE SECURITY IS A PART 1,853
AND PROVIDES AN ADDRESS FOR COMMUNICATIONS DIRECTED TO THE PERSON
MAKING THE DEMAND. THE DEMAND IS EFFECTIVE ONLY IF IT IS 1,854
RECEIVED BY THE ISSUER AT A TIME AND IN A MANNER AFFORDING THE 1,855
ISSUER REASONABLE OPPORTUNITY TO ACT ON IT.
(B) IF A CERTIFICATED SECURITY IN REGISTERED FORM IS 1,857
PRESENTED TO AN ISSUER WITH A REQUEST TO REGISTER TRANSFER OR AN 1,858
INSTRUCTION IS PRESENTED TO AN ISSUER WITH A REQUEST TO REGISTER 1,859
TRANSFER OF AN UNCERTIFICATED SECURITY AFTER A DEMAND THAT THE 1,860
ISSUER NOT REGISTER TRANSFER HAS BECOME EFFECTIVE, THE ISSUER 1,861
SHALL PROMPTLY COMMUNICATE TO THE PERSON WHO INITIATED THE DEMAND
AT THE ADDRESS PROVIDED IN THE DEMAND AND THE PERSON WHO 1,862
PRESENTED THE SECURITY FOR REGISTRATION OF TRANSFER OR INITIATED 1,863
THE INSTRUCTION REQUESTING REGISTRATION OF TRANSFER A 1,864
NOTIFICATION STATING THAT:
(1) THE CERTIFICATED SECURITY HAS BEEN PRESENTED FOR 1,866
REGISTRATION OF TRANSFER OR THE INSTRUCTION FOR REGISTRATION OF 1,867
TRANSFER OF THE UNCERTIFICATED SECURITY HAS BEEN RECEIVED; 1,868
(2) A DEMAND THAT THE ISSUER NOT REGISTER TRANSFER HAD 1,870
PREVIOUSLY BEEN RECEIVED; AND 1,871
(3) THE ISSUER WILL WITHHOLD REGISTRATION OF TRANSFER FOR 1,873
A PERIOD OF TIME STATED IN THE NOTIFICATION IN ORDER TO PROVIDE 1,874
THE PERSON WHO INITIATED THE DEMAND AN OPPORTUNITY TO OBTAIN 1,875
LEGAL PROCESS OR AN INDEMNITY BOND.
(C) THE PERIOD DESCRIBED IN DIVISION (B)(3) OF THIS 1,877
SECTION MAY NOT EXCEED THIRTY DAYS AFTER THE DATE OF 1,878
COMMUNICATION OF THE NOTIFICATION. A SHORTER PERIOD MAY BE 1,879
SPECIFIED BY THE ISSUER IF IT IS NOT MANIFESTLY UNREASONABLE. 1,880
(D) AN ISSUER IS NOT LIABLE TO A PERSON WHO INITIATED A 1,882
DEMAND THAT THE ISSUER NOT REGISTER TRANSFER FOR ANY LOSS THE 1,883
PERSON SUFFERS AS A RESULT OF REGISTRATION OF A TRANSFER PURSUANT 1,884
TO AN EFFECTIVE INDORSEMENT OR INSTRUCTION IF THE PERSON WHO 1,885
43
INITIATED THE DEMAND DOES NOT, WITHIN THE TIME STATED IN THE 1,886
ISSUER'S COMMUNICATION, EITHER:
(1) OBTAIN AN APPROPRIATE RESTRAINING ORDER, INJUNCTION, 1,888
OR OTHER PROCESS FROM A COURT OF COMPETENT JURISDICTION ENJOINING 1,889
THE ISSUER FROM REGISTERING THE TRANSFER; OR 1,890
(2) FILE WITH THE ISSUER AN INDEMNITY BOND, SUFFICIENT IN 1,892
THE ISSUER'S JUDGMENT TO PROTECT THE ISSUER AND ANY TRANSFER 1,893
AGENT, REGISTRAR, OR OTHER AGENT OF THE ISSUER INVOLVED FROM ANY 1,894
LOSS IT OR THEY MAY SUFFER BY REFUSING TO REGISTER THE TRANSFER. 1,895
(E) THIS SECTION DOES NOT RELIEVE AN ISSUER FROM LIABILITY 1,897
FOR REGISTERING TRANSFER PURSUANT TO AN INDORSEMENT OR 1,898
INSTRUCTION THAT WAS NOT EFFECTIVE. 1,899
Sec. 1308.40. (A) EXCEPT AS OTHERWISE PROVIDED IN SECTION 1,901
1308.41 OF THE REVISED CODE, AN ISSUER IS LIABLE FOR WRONGFUL 1,902
REGISTRATION OF TRANSFER IF THE ISSUER HAS REGISTERED A TRANSFER 1,903
OF A SECURITY TO A PERSON NOT ENTITLED TO IT, AND THE TRANSFER 1,904
WAS REGISTERED:
(1) PURSUANT TO AN INEFFECTIVE INDORSEMENT OR INSTRUCTION; 1,906
(2) AFTER A DEMAND THAT THE ISSUER NOT REGISTER TRANSFER 1,908
BECAME EFFECTIVE UNDER DIVISION (A) OF SECTION 1308.39 OF THE 1,909
REVISED CODE AND THE ISSUER DID NOT COMPLY WITH DIVISION (B) OF 1,910
THAT SECTION;
(3) AFTER THE ISSUER HAD BEEN SERVED WITH AN INJUNCTION, 1,912
RESTRAINING ORDER, OR OTHER LEGAL PROCESS ENJOINING IT FROM 1,913
REGISTERING THE TRANSFER, ISSUED BY A COURT OF COMPETENT 1,914
JURISDICTION, AND THE ISSUER HAD A REASONABLE OPPORTUNITY TO ACT 1,915
ON THE INJUNCTION, RESTRAINING ORDER, OR OTHER LEGAL PROCESS; OR 1,916
(4) BY AN ISSUER ACTING IN COLLUSION WITH THE WRONGDOER. 1,918
(B) AN ISSUER THAT IS LIABLE FOR WRONGFUL REGISTRATION OF 1,920
TRANSFER UNDER DIVISION (A) OF THIS SECTION ON DEMAND SHALL 1,921
PROVIDE THE PERSON ENTITLED TO THE SECURITY WITH A LIKE 1,922
CERTIFICATED OR UNCERTIFICATED SECURITY, AND ANY PAYMENTS OR 1,923
DISTRIBUTIONS THAT THE PERSON DID NOT RECEIVE AS A RESULT OF THE 1,924
WRONGFUL REGISTRATION. IF AN OVERISSUE WOULD RESULT, THE
44
ISSUER'S LIABILITY TO PROVIDE THE PERSON WITH A LIKE SECURITY IS 1,925
GOVERNED BY SECTION 1308.03 OF THE REVISED CODE. 1,926
(C) EXCEPT AS OTHERWISE PROVIDED IN DIVISION (A) OF THIS 1,928
SECTION OR IN A LAW RELATING TO THE COLLECTION OF TAXES, AN 1,929
ISSUER IS NOT LIABLE TO AN OWNER OR OTHER PERSON SUFFERING LOSS 1,930
AS A RESULT OF THE REGISTRATION OF A TRANSFER OF A SECURITY IF 1,931
REGISTRATION WAS MADE PURSUANT TO AN EFFECTIVE INDORSEMENT OR 1,932
INSTRUCTION.
Sec. 1308.41. (A) If a certificated security CERTIFICATE 1,940
has been lost, apparently destroyed, or wrongfully taken and the 1,942
owner fails to notify the issuer of that fact within a reasonable 1,943
time after he THE OWNER has notice of it and the issuer registers 1,944
a transfer of the security before receiving notification, the 1,945
owner is precluded from asserting MAY NOT ASSERT against the 1,946
issuer any A claim for registering the transfer under section 1,948
1308.40 of the Revised Code or any claim to a new security under 1,949
this section.
(B) If the owner of a certificated security, WHETHER IN 1,951
REGISTERED OR BEARER FORM, claims that the security has been 1,953
lost, destroyed, or wrongfully taken, the issuer shall issue a 1,954
new certificated security or, at the option of the issuer, an 1,955
equivalent uncertificated security in place of the original 1,956
security CERTIFICATE if the owner:
(1) So requests before the issuer has notice that the 1,958
security has been acquired by a bona fide PROTECTED purchaser; 1,959
(2) Files with the issuer any A SUFFICIENT indemnity bond, 1,961
the issuer reasonably requires; and 1,963
(3) Satisfies any other reasonable requirements imposed by 1,965
the issuer. 1,966
(C) If, after the issue of a new certificated or 1,968
uncertificated security CERTIFICATE, a bona fide PROTECTED 1,970
purchaser of the original security presents it for registration 1,971
of transfer, the issuer shall register the transfer unless 1,972
registration AN OVERISSUE would result in overissue, in which 1,974
45
event. IN THAT CASE, the issuer's liability is governed by 1,975
section 1308.03 of the Revised Code. In addition to any rights 1,976
on the indemnity bond, the issuer may recover the new 1,977
certificated security CERTIFICATE from the person to whom it was 1,978
issued or any person taking under him THAT PERSON, except a bona 1,980
fide PROTECTED purchaser or may cancel the uncertificated 1,981
security unless a bona fide purchaser or any person taking under 1,983
a bona fide purchaser is then the registered owner or registered 1,984
pledgee thereof.
Sec. 1308.42. (A) If a A person acts ACTING as 1,993
authenticating trustee, transfer agent, registrar, or other agent 1,995
for an issuer in the registration of transfers A TRANSFER of its 1,996
certificated securities or in the registration of transfers, 1,998
pledges, and releases of its uncertificated securities, in the 1,999
issue of new SECURITY CERTIFICATES OR UNCERTIFICATED securities, 2,000
or in the cancellation of surrendered securities: 2,001
(1) He is under a duty to the issuer to exercise good 2,004
faith and due diligence in performing his functions; and 2,005
(2) With regard to the particular functions he performs, 2,007
he SECURITY CERTIFICATES, has the same obligation to the holder 2,009
or owner of a certificated OR UNCERTIFICATED security or to the 2,010
owner or pledgee of an uncertificated security and has the same 2,011
rights and privileges WITH REGARD TO THE PARTICULAR FUNCTIONS 2,012
PERFORMED as the issuer has in regard to those functions. 2,013
(B) Notice to an authenticating trustee, transfer agent, 2,015
registrar or other agent is notice to the issuer with respect to 2,016
the functions performed by the agent. 2,017
Sec. 1308.51. (A) "SECURITIES ACCOUNT" MEANS AN ACCOUNT 2,019
TO WHICH A FINANCIAL ASSET IS OR MAY BE CREDITED IN ACCORDANCE 2,020
WITH AN AGREEMENT UNDER WHICH THE PERSON MAINTAINING THE ACCOUNT 2,021
UNDERTAKES TO TREAT THE PERSON FOR WHOM THE ACCOUNT IS MAINTAINED 2,022
AS ENTITLED TO EXERCISE THE RIGHTS THAT COMPRISE THE FINANCIAL 2,023
ASSET.
(B) EXCEPT AS OTHERWISE PROVIDED IN DIVISIONS (D) AND (E) 2,026
46
OF THIS SECTION, A PERSON ACQUIRES A SECURITY ENTITLEMENT IF A
SECURITIES INTERMEDIARY: 2,027
(1) INDICATES BY BOOK ENTRY THAT A FINANCIAL ASSET HAS 2,029
BEEN CREDITED TO THE PERSON'S SECURITIES ACCOUNT; 2,030
(2) RECEIVES A FINANCIAL ASSET FROM THE PERSON OR ACQUIRES 2,032
A FINANCIAL ASSET FOR THE PERSON AND, IN EITHER CASE, ACCEPTS IT 2,033
FOR CREDIT TO THE PERSON'S SECURITIES ACCOUNT; OR 2,034
(3) BECOMES OBLIGATED UNDER OTHER LAW, REGULATION, OR RULE 2,036
TO CREDIT A FINANCIAL ASSET TO THE PERSON'S SECURITIES ACCOUNT. 2,037
(C) IF A CONDITION OF DIVISION (B) OF THIS SECTION HAS 2,039
BEEN MET, A PERSON HAS A SECURITY ENTITLEMENT EVEN THOUGH THE 2,040
SECURITIES INTERMEDIARY DOES NOT ITSELF HOLD THE FINANCIAL ASSET. 2,041
(D) IF A SECURITIES INTERMEDIARY HOLDS A FINANCIAL ASSET 2,043
FOR ANOTHER PERSON, AND THE FINANCIAL ASSET IS REGISTERED IN THE 2,044
NAME OF, PAYABLE TO THE ORDER OF, OR SPECIALLY INDORSED TO THE 2,045
OTHER PERSON, AND HAS NOT BEEN INDORSED TO THE SECURITIES 2,046
INTERMEDIARY OR IN BLANK, THE OTHER PERSON IS TREATED AS HOLDING 2,047
THE FINANCIAL ASSET DIRECTLY RATHER THAN AS HAVING A SECURITY 2,048
ENTITLEMENT WITH RESPECT TO THE FINANCIAL ASSET.
(E) ISSUANCE OF A SECURITY IS NOT ESTABLISHMENT OF A 2,050
SECURITY ENTITLEMENT. 2,051
Sec. 1308.52. AN ACTION BASED ON AN ADVERSE CLAIM TO A 2,053
FINANCIAL ASSET, WHETHER FRAMED IN CONVERSION, REPLEVIN, 2,054
CONSTRUCTIVE TRUST, EQUITABLE LIEN, OR OTHER THEORY, MAY NOT BE 2,055
ASSERTED AGAINST A PERSON WHO ACQUIRES A SECURITY ENTITLEMENT 2,056
UNDER SECTION 1308.51 OF THE REVISED CODE FOR VALUE AND WITHOUT
NOTICE OF THE ADVERSE CLAIM. 2,057
Sec. 1308.53. (A) TO THE EXTENT NECESSARY FOR A 2,059
SECURITIES INTERMEDIARY TO SATISFY ALL SECURITY ENTITLEMENTS WITH 2,060
RESPECT TO A PARTICULAR FINANCIAL ASSET, ALL INTERESTS IN THAT 2,061
FINANCIAL ASSET HELD BY THE SECURITIES INTERMEDIARY ARE HELD BY 2,062
THE SECURITIES INTERMEDIARY FOR THE ENTITLEMENT HOLDERS, ARE NOT 2,063
PROPERTY OF THE SECURITIES INTERMEDIARY, AND ARE NOT SUBJECT TO 2,064
CLAIMS OF CREDITORS OF THE SECURITIES INTERMEDIARY, EXCEPT AS 2,065
47
OTHERWISE PROVIDED IN SECTION 1308.61 OF THE REVISED CODE.
(B) AN ENTITLEMENT HOLDER'S PROPERTY INTEREST WITH RESPECT 2,067
TO A PARTICULAR FINANCIAL ASSET UNDER DIVISION (A) OF THIS 2,068
SECTION IS A PRO RATA PROPERTY INTEREST IN ALL INTERESTS IN THAT 2,069
FINANCIAL ASSET HELD BY THE SECURITIES INTERMEDIARY, WITHOUT 2,070
REGARD TO THE TIME THE ENTITLEMENT HOLDER ACQUIRED THE SECURITY 2,071
ENTITLEMENT OR THE TIME THE SECURITIES INTERMEDIARY ACQUIRED THE 2,072
INTEREST IN THAT FINANCIAL ASSET.
(C) AN ENTITLEMENT HOLDER'S PROPERTY INTEREST WITH RESPECT 2,074
TO A PARTICULAR FINANCIAL ASSET UNDER DIVISION (A) OF THIS 2,075
SECTION MAY BE ENFORCED AGAINST THE SECURITIES INTERMEDIARY ONLY 2,076
BY EXERCISE OF THE ENTITLEMENT HOLDER'S RIGHTS UNDER SECTIONS 2,077
1308.55 TO 1308.58 OF THE REVISED CODE.
(D) AN ENTITLEMENT HOLDER'S PROPERTY INTEREST WITH RESPECT 2,079
TO A PARTICULAR FINANCIAL ASSET UNDER DIVISION (A) OF THIS 2,080
SECTION MAY BE ENFORCED AGAINST A PURCHASER OF THE FINANCIAL 2,081
ASSET OR INTEREST THEREIN ONLY IF: 2,082
(1) INSOLVENCY PROCEEDINGS HAVE BEEN INITIATED BY OR 2,084
AGAINST THE SECURITIES INTERMEDIARY; 2,085
(2) THE SECURITIES INTERMEDIARY DOES NOT HAVE SUFFICIENT 2,087
INTERESTS IN THE FINANCIAL ASSET TO SATISFY THE SECURITY 2,088
ENTITLEMENTS OF ALL OF ITS ENTITLEMENT HOLDERS TO THAT FINANCIAL 2,089
ASSET;
(3) THE SECURITIES INTERMEDIARY VIOLATED ITS OBLIGATIONS 2,091
UNDER SECTION 1308.54 OF THE REVISED CODE BY TRANSFERRING THE 2,092
FINANCIAL ASSET OR INTEREST THEREIN TO THE PURCHASER; AND 2,093
(4) THE PURCHASER IS NOT PROTECTED UNDER DIVISION (E) OF 2,095
THIS SECTION. THE TRUSTEE OR OTHER LIQUIDATOR, ACTING ON BEHALF 2,096
OF ALL ENTITLEMENT HOLDERS HAVING SECURITY ENTITLEMENTS WITH 2,097
RESPECT TO A PARTICULAR FINANCIAL ASSET, MAY RECOVER THE 2,098
FINANCIAL ASSET, OR INTEREST THEREIN, FROM THE PURCHASER. IF THE 2,099
TRUSTEE OR OTHER LIQUIDATOR ELECTS NOT TO PURSUE THAT RIGHT, AN 2,100
ENTITLEMENT HOLDER WHOSE SECURITY ENTITLEMENT REMAINS UNSATISFIED
HAS THE RIGHT TO RECOVER ITS INTEREST IN THE FINANCIAL ASSET FROM 2,101
48
THE PURCHASER. 2,102
(E) AN ACTION BASED ON THE ENTITLEMENT HOLDER'S PROPERTY 2,104
INTEREST WITH RESPECT TO A PARTICULAR FINANCIAL ASSET UNDER 2,105
DIVISION (A) OF THIS SECTION, WHETHER FRAMED IN CONVERSION, 2,106
REPLEVIN, CONSTRUCTIVE TRUST, EQUITABLE LIEN, OR OTHER THEORY, 2,107
MAY NOT BE ASSERTED AGAINST ANY PURCHASER OF A FINANCIAL ASSET OR 2,108
INTEREST THEREIN WHO GIVES VALUE, OBTAINS CONTROL, AND DOES NOT 2,109
ACT IN COLLUSION WITH THE SECURITIES INTERMEDIARY IN VIOLATING
THE SECURITIES INTERMEDIARY'S OBLIGATIONS UNDER SECTION 1308.54 2,111
OF THE REVISED CODE.
Sec. 1308.54. (A) A SECURITIES INTERMEDIARY SHALL 2,113
PROMPTLY OBTAIN AND THEREAFTER MAINTAIN A FINANCIAL ASSET IN A 2,114
QUANTITY CORRESPONDING TO THE AGGREGATE OF ALL SECURITY 2,115
ENTITLEMENTS IT HAS ESTABLISHED IN FAVOR OF ITS ENTITLEMENT 2,116
HOLDERS WITH RESPECT TO THAT FINANCIAL ASSET. THE SECURITIES
INTERMEDIARY MAY MAINTAIN THOSE FINANCIAL ASSETS DIRECTLY OR 2,117
THROUGH ONE OR MORE OTHER SECURITIES INTERMEDIARIES. 2,118
(B) EXCEPT TO THE EXTENT OTHERWISE AGREED BY ITS 2,120
ENTITLEMENT HOLDER, A SECURITIES INTERMEDIARY MAY NOT GRANT ANY 2,121
SECURITY INTERESTS IN A FINANCIAL ASSET IT IS OBLIGATED TO 2,122
MAINTAIN PURSUANT TO DIVISION (A) OF THIS SECTION. 2,123
(C) A SECURITIES INTERMEDIARY SATISFIES THE DUTY IN 2,125
DIVISION (A) OF THIS SECTION IF: 2,126
(1) THE SECURITIES INTERMEDIARY ACTS WITH RESPECT TO THE 2,128
DUTY AS AGREED UPON BY THE ENTITLEMENT HOLDER AND THE SECURITIES 2,129
INTERMEDIARY; OR
(2) IN THE ABSENCE OF AGREEMENT, THE SECURITIES 2,131
INTERMEDIARY EXERCISES DUE CARE IN ACCORDANCE WITH REASONABLE 2,132
COMMERCIAL STANDARDS TO OBTAIN AND MAINTAIN THE FINANCIAL ASSET. 2,133
(D) THIS SECTION DOES NOT APPLY TO A CLEARING CORPORATION 2,135
THAT IS ITSELF THE OBLIGOR OF AN OPTION OR SIMILAR OBLIGATION TO 2,136
WHICH ITS ENTITLEMENT HOLDERS HAVE SECURITY ENTITLEMENTS. 2,137
Sec. 1308.55. (A) A SECURITIES INTERMEDIARY SHALL TAKE 2,139
ACTION TO OBTAIN A PAYMENT OR DISTRIBUTION MADE BY THE ISSUER OF 2,140
49
A FINANCIAL ASSET. A SECURITIES INTERMEDIARY SATISFIES THE DUTY 2,141
IF:
(1) THE SECURITIES INTERMEDIARY ACTS WITH RESPECT TO THE 2,143
DUTY AS AGREED UPON BY THE ENTITLEMENT HOLDER AND THE SECURITIES 2,144
INTERMEDIARY; OR
(2) IN THE ABSENCE OF AGREEMENT, THE SECURITIES 2,146
INTERMEDIARY EXERCISES DUE CARE IN ACCORDANCE WITH REASONABLE 2,147
COMMERCIAL STANDARDS TO ATTEMPT TO OBTAIN THE PAYMENT OR 2,148
DISTRIBUTION.
(B) A SECURITIES INTERMEDIARY IS OBLIGATED TO ITS 2,150
ENTITLEMENT HOLDER FOR A PAYMENT OR DISTRIBUTION MADE BY THE 2,151
ISSUER OF A FINANCIAL ASSET IF THE PAYMENT OR DISTRIBUTION IS 2,152
RECEIVED BY THE SECURITIES INTERMEDIARY.
Sec. 1308.56. A SECURITIES INTERMEDIARY SHALL EXERCISE 2,154
RIGHTS WITH RESPECT TO A FINANCIAL ASSET IF DIRECTED TO DO SO BY 2,155
AN ENTITLEMENT HOLDER. A SECURITIES INTERMEDIARY SATISFIES THE 2,156
DUTY IF:
(A) THE SECURITIES INTERMEDIARY ACTS WITH RESPECT TO THE 2,158
DUTY AS AGREED UPON BY THE ENTITLEMENT HOLDER AND THE SECURITIES 2,159
INTERMEDIARY; OR
(B) IN THE ABSENCE OF AGREEMENT, THE SECURITIES 2,161
INTERMEDIARY EITHER PLACES THE ENTITLEMENT HOLDER IN A POSITION 2,162
TO EXERCISE THE RIGHTS DIRECTLY OR EXERCISES DUE CARE IN 2,163
ACCORDANCE WITH REASONABLE COMMERCIAL STANDARDS TO FOLLOW THE 2,164
DIRECTION OF THE ENTITLEMENT HOLDER.
Sec. 1308.57. (A) A SECURITIES INTERMEDIARY SHALL COMPLY 2,166
WITH AN ENTITLEMENT ORDER IF THE ENTITLEMENT ORDER IS ORIGINATED 2,167
BY THE APPROPRIATE PERSON, THE SECURITIES INTERMEDIARY HAS HAD 2,168
REASONABLE OPPORTUNITY TO ASSURE ITSELF THAT THE ENTITLEMENT 2,169
ORDER IS GENUINE AND AUTHORIZED, AND THE SECURITIES INTERMEDIARY 2,170
HAS HAD REASONABLE OPPORTUNITY TO COMPLY WITH THE ENTITLEMENT 2,171
ORDER. A SECURITIES INTERMEDIARY SATISFIES THE DUTY IF:
(1) THE SECURITIES INTERMEDIARY ACTS WITH RESPECT TO THE 2,173
DUTY AS AGREED UPON BY THE ENTITLEMENT HOLDER AND THE SECURITIES 2,174
50
INTERMEDIARY; OR
(2) IN THE ABSENCE OF AGREEMENT, THE SECURITIES 2,176
INTERMEDIARY EXERCISES DUE CARE IN ACCORDANCE WITH REASONABLE 2,177
COMMERCIAL STANDARDS TO COMPLY WITH THE ENTITLEMENT ORDER. 2,178
(B) IF A SECURITIES INTERMEDIARY TRANSFERS A FINANCIAL 2,180
ASSET PURSUANT TO AN INEFFECTIVE ENTITLEMENT ORDER, THE 2,181
SECURITIES INTERMEDIARY SHALL REESTABLISH A SECURITY ENTITLEMENT 2,182
IN FAVOR OF THE PERSON ENTITLED TO IT, AND PAY OR CREDIT ANY 2,183
PAYMENTS OR DISTRIBUTIONS THAT THE PERSON DID NOT RECEIVE AS A 2,184
RESULT OF THE WRONGFUL TRANSFER. IF THE SECURITIES INTERMEDIARY
DOES NOT REESTABLISH A SECURITY ENTITLEMENT, THE SECURITIES 2,185
INTERMEDIARY IS LIABLE TO THE ENTITLEMENT HOLDER FOR DAMAGES. 2,186
Sec. 1308.58. A SECURITIES INTERMEDIARY SHALL ACT AT THE 2,188
DIRECTION OF AN ENTITLEMENT HOLDER TO CHANGE A SECURITY 2,189
ENTITLEMENT INTO ANOTHER AVAILABLE FORM OF HOLDING FOR WHICH THE 2,190
ENTITLEMENT HOLDER IS ELIGIBLE, OR TO CAUSE THE FINANCIAL ASSET 2,191
TO BE TRANSFERRED TO A SECURITIES ACCOUNT OF THE ENTITLEMENT
HOLDER WITH ANOTHER SECURITIES INTERMEDIARY. A SECURITIES 2,192
INTERMEDIARY SATISFIES THE DUTY IF: 2,193
(A) THE SECURITIES INTERMEDIARY ACTS AS AGREED UPON BY THE 2,195
ENTITLEMENT HOLDER AND THE SECURITIES INTERMEDIARY; OR 2,196
(B) IN THE ABSENCE OF AGREEMENT, THE SECURITIES 2,198
INTERMEDIARY EXERCISES DUE CARE IN ACCORDANCE WITH REASONABLE 2,199
COMMERCIAL STANDARDS TO FOLLOW THE DIRECTION OF THE ENTITLEMENT 2,200
HOLDER.
Sec. 1308.59. (A) IF THE SUBSTANCE OF A DUTY IMPOSED UPON 2,202
A SECURITIES INTERMEDIARY BY SECTIONS 1308.54 TO 1308.58 OF THE 2,203
REVISED CODE IS THE SUBJECT OF OTHER STATUTE, REGULATION, OR 2,204
RULE, COMPLIANCE WITH THAT STATUTE, REGULATION, OR RULE SATISFIES 2,205
THE DUTY.
(B) TO THE EXTENT THAT SPECIFIC STANDARDS FOR THE 2,207
PERFORMANCE OF THE DUTIES OF A SECURITIES INTERMEDIARY OR THE 2,208
EXERCISE OF THE RIGHTS OF AN ENTITLEMENT HOLDER ARE NOT SPECIFIED 2,209
BY OTHER STATUTE, REGULATION, OR RULE OR BY AGREEMENT BETWEEN THE 2,210
51
SECURITIES INTERMEDIARY AND ENTITLEMENT HOLDER, THE SECURITIES 2,211
INTERMEDIARY SHALL PERFORM ITS DUTIES AND THE ENTITLEMENT HOLDER
SHALL EXERCISE ITS RIGHTS IN A COMMERCIALLY REASONABLE MANNER. 2,212
(C) THE OBLIGATION OF A SECURITIES INTERMEDIARY TO PERFORM 2,214
THE DUTIES IMPOSED BY SECTIONS 1308.54 TO 1308.58 OF THE REVISED 2,215
CODE IS SUBJECT TO:
(1) RIGHTS OF THE SECURITIES INTERMEDIARY ARISING OUT OF A 2,217
SECURITY INTEREST UNDER A SECURITY AGREEMENT WITH THE ENTITLEMENT 2,218
HOLDER OR OTHERWISE; AND 2,219
(2) RIGHTS OF THE SECURITIES INTERMEDIARY UNDER OTHER LAW, 2,221
REGULATION, RULE, OR AGREEMENT TO WITHHOLD PERFORMANCE OF ITS 2,222
DUTIES AS A RESULT OF UNFULFILLED OBLIGATIONS OF THE ENTITLEMENT 2,223
HOLDER TO THE SECURITIES INTERMEDIARY. 2,224
(D) SECTIONS 1308.54 TO 1308.58 OF THE REVISED CODE DO NOT 2,226
REQUIRE A SECURITIES INTERMEDIARY TO TAKE ANY ACTION THAT IS 2,227
PROHIBITED BY OTHER STATUTE, REGULATION, OR RULE. 2,228
Sec. 1308.60. (A) AN ACTION BASED ON AN ADVERSE CLAIM TO 2,230
A FINANCIAL ASSET OR SECURITY ENTITLEMENT, WHETHER FRAMED IN 2,231
CONVERSION, REPLEVIN, CONSTRUCTIVE TRUST, EQUITABLE LIEN, OR 2,232
OTHER THEORY, MAY NOT BE ASSERTED AGAINST A PERSON WHO PURCHASES 2,233
A SECURITY ENTITLEMENT, OR AN INTEREST THEREIN, FROM AN 2,234
ENTITLEMENT HOLDER IF THE PURCHASER GIVES VALUE, DOES NOT HAVE 2,235
NOTICE OF THE ADVERSE CLAIM, AND OBTAINS CONTROL.
(B) IF AN ADVERSE CLAIM COULD NOT HAVE BEEN ASSERTED 2,237
AGAINST AN ENTITLEMENT HOLDER UNDER SECTION 1308.52 OF THE 2,238
REVISED CODE, THE ADVERSE CLAIM CANNOT BE ASSERTED AGAINST A 2,239
PERSON WHO PURCHASES A SECURITY ENTITLEMENT, OR AN INTEREST
THEREIN, FROM THE ENTITLEMENT HOLDER. 2,240
(C) IN A CASE NOT COVERED BY THE PRIORITY RULES IN CHAPTER 2,243
1309. OF THE REVISED CODE, A PURCHASER FOR VALUE OF A SECURITY
ENTITLEMENT, OR AN INTEREST THEREIN, WHO OBTAINS CONTROL HAS 2,244
PRIORITY OVER A PURCHASER OF A SECURITY ENTITLEMENT, OR AN 2,245
INTEREST THEREIN, WHO DOES NOT OBTAIN CONTROL. PURCHASERS WHO 2,246
HAVE CONTROL RANK EQUALLY, EXCEPT THAT A SECURITIES INTERMEDIARY 2,247
52
AS PURCHASER HAS PRIORITY OVER A CONFLICTING PURCHASER WHO HAS
CONTROL UNLESS OTHERWISE AGREED BY THE SECURITIES INTERMEDIARY. 2,248
Sec. 1308.61. (A) EXCEPT AS OTHERWISE PROVIDED IN 2,250
DIVISIONS (B) AND (C) OF THIS SECTION, IF A SECURITIES 2,251
INTERMEDIARY DOES NOT HAVE SUFFICIENT INTERESTS IN A PARTICULAR 2,252
FINANCIAL ASSET TO SATISFY BOTH ITS OBLIGATIONS TO ENTITLEMENT 2,253
HOLDERS WHO HAVE SECURITY ENTITLEMENTS TO THAT FINANCIAL ASSET 2,254
AND ITS OBLIGATION TO A CREDITOR OF THE SECURITIES INTERMEDIARY 2,255
WHO HAS A SECURITY INTEREST IN THAT FINANCIAL ASSET, THE CLAIMS
OF ENTITLEMENT HOLDERS, OTHER THAN THE CREDITOR, HAVE PRIORITY 2,256
OVER THE CLAIM OF THE CREDITOR. 2,257
(B) A CLAIM OF A CREDITOR OF A SECURITIES INTERMEDIARY WHO 2,259
HAS A SECURITY INTEREST IN A FINANCIAL ASSET HELD BY A SECURITIES 2,260
INTERMEDIARY HAS PRIORITY OVER CLAIMS OF THE SECURITIES 2,261
INTERMEDIARY'S ENTITLEMENT HOLDERS WHO HAVE SECURITY ENTITLEMENTS 2,262
WITH RESPECT TO THAT FINANCIAL ASSET IF THE CREDITOR HAS CONTROL 2,263
OVER THE FINANCIAL ASSET.
(C) IF A CLEARING CORPORATION DOES NOT HAVE SUFFICIENT 2,265
FINANCIAL ASSETS TO SATISFY BOTH ITS OBLIGATIONS TO ENTITLEMENT 2,266
HOLDERS WHO HAVE SECURITY ENTITLEMENTS WITH RESPECT TO A 2,267
FINANCIAL ASSET AND ITS OBLIGATION TO A CREDITOR OF THE CLEARING 2,268
CORPORATION WHO HAS A SECURITY INTEREST IN THAT FINANCIAL ASSET, 2,269
THE CLAIM OF THE CREDITOR HAS PRIORITY OVER THE CLAIMS OF
ENTITLEMENT HOLDERS. 2,270
Sec. 1309.01. (A) As used in sections 1309.01 to 1309.50 2,279
of the Revised Code, unless the context otherwise requires: 2,280
(1) "Account debtor" means the person who is obligated on 2,282
an account, chattel paper, or general intangible. 2,283
(2) "Chattel paper" means a writing or writings which 2,285
evidence both a monetary obligation and a security interest in or 2,286
a lease of specific goods, but a charter or other contract 2,287
involving the use or hire of a vessel is not chattel paper. When 2,288
a transaction is evidenced both by such a security agreement or a 2,289
lease and by an instrument or a series of instruments, the group 2,290
53
of writings taken together constitutes chattel paper. 2,291
(3) "Collateral" means the property subject to a security 2,293
interest, and includes accounts and chattel paper which have been 2,294
sold. 2,295
(4) "Debtor" means the person who owes payment or other 2,297
performance of the obligations secured, whether or not he THE 2,298
PERSON owns or has rights in the collateral, and includes the 2,299
seller of accounts or chattel paper. Where the debtor and the 2,300
owner of the collateral are not the same person, the term 2,301
"debtor" means the owner of the collateral in any provision of 2,302
sections 1309.01 to 1309.50 of the Revised Code dealing with the 2,303
collateral, the obligor in any provision dealing with the 2,304
obligation and may include both where the context so requires. 2,305
(5) "Deposit account" means a demand, time, savings, 2,307
passbook or like account maintained with a bank, savings and loan 2,308
association, credit union, or like organization, other than an 2,309
account evidenced by a certificate of deposit. 2,310
(6) "Document" means document of title as defined in 2,312
division (O) of section 1301.01 of the Revised Code, and a 2,313
receipt of the kind described in division (B) of section 1307.06 2,314
of the Revised Code. 2,315
(7) "Encumbrance" includes real estate mortgages and other 2,317
liens on real estate and all other rights in real estate that are 2,318
not ownership interests. 2,319
(8) "Goods" includes all things which are movable at the 2,321
time the security interest attaches or which are fixtures under 2,322
section 1309.32 of the Revised Code, but does not include money, 2,323
documents, instruments, INVESTMENT PROPERTY, COMMODITY CONTRACTS, 2,325
accounts, chattel paper, general intangibles, or minerals or the 2,326
like, including oil and gas, before extraction. "Goods" also 2,327
include standing timber which is to be cut and removed under a 2,328
conveyance or contract for sale, the unborn young of animals, and 2,329
growing crops.
(9) "Instrument" means a negotiable instrument as defined 2,331
54
in section 1303.03 of the Revised Code, or a certificated 2,332
security as defined in section 1308.01 of the Revised Code, or 2,333
any other writing which evidences a right to the payment of money 2,334
and is not itself a security agreement or lease and is of a type 2,335
which is in ordinary course of business transferred by delivery 2,336
with any necessary indorsement or assignment. "INSTRUMENT" DOES 2,337
NOT INCLUDE INVESTMENT PROPERTY. 2,339
(10) "Mortgage" means a consensual interest created by a 2,341
real estate mortgage, a trust deed on real estate, or the like. 2,342
(11) An advance is made "pursuant to commitment" if the 2,344
secured party has bound himself ITSELF to make it, whether or not 2,346
a subsequent event of default or other event not within his THE
SECURED PARTY'S control has relieved or may relieve him THE 2,347
SECURED PARTY from his THE SECURED PARTY'S obligation. 2,348
(12) "Security agreement" means an agreement which creates 2,350
or provides for a security interest. 2,351
(13) "Secured party" means a lender, seller, or other 2,353
person in whose favor there is a security interest, including a 2,354
person to whom accounts or chattel paper have been sold. When 2,355
the holders of obligations issued under an indenture of trust, 2,356
equipment trust agreement, or the like are represented by a 2,357
trustee or other person, the representative is the secured party. 2,358
(14) "Transmitting utility" means any person primarily 2,360
engaged in the railroad, street railway, or trolley bus business, 2,361
the electric or electronic communications business, the 2,362
transmission of goods by pipeline, or the transmission or the 2,363
production and transmission of electricity, steam, gas, or water, 2,364
or the provision of sewer service. 2,365
(15) "Account" means any right to payment for goods sold 2,367
or leased or for services rendered which is not evidenced by an 2,368
instrument or chattel paper, whether or not it has been earned by 2,369
performance. 2,370
(16) "General intangible INTANGIBLES" means any personal 2,372
property, including things in action, other than goods, accounts, 2,374
55
chattel paper, documents, instruments, INVESTMENT PROPERTY, and 2,375
money. All rights to payment earned or unearned under a charter 2,377
or other contract involving the use or hire of a vessel and all 2,378
rights incident to the charter or contract are accounts. 2,379
(B) Other definitions applying to sections 1309.01 to 2,381
1309.50 of the Revised Code are: 2,382
(1) "Attach," as defined in section 1309.14 of the Revised 2,384
Code; 2,385
(2) "Construction mortgage," as defined in section 1309.32 2,387
of the Revised Code; 2,388
(3) "Consumer goods," as defined in section 1309.07 of the 2,390
Revised Code; 2,391
(4) "Equipment," as defined in section 1309.07 of the 2,393
Revised Code; 2,394
(5) "Farm products," as defined in section 1309.07 of the 2,396
Revised Code; 2,397
(6) "Fixture," as defined in section 1309.32 of the 2,399
Revised Code; 2,400
(7) "Fixture filing," as defined in section 1309.32 of the 2,402
Revised Code; 2,403
(8) "Inventory," as defined in section 1309.07 of the 2,405
Revised Code; 2,406
(9) "Lien creditor," as defined in section 1309.20 of the 2,408
Revised Code; 2,409
(10) "Proceeds," as defined in section 1309.25 of the 2,411
Revised Code; 2,412
(11) "Purchase money security interest," as defined in 2,414
section 1309.05 of the Revised Code; 2,415
(12) "COMMODITY CONTRACT," "COMMODITY CUSTOMER," 2,417
"COMMODITY INTERMEDIARY," "CONTROL," AND "INVESTMENT PROPERTY," 2,418
AS DEFINED IN SECTION 1309.112 OF THE REVISED CODE; 2,419
(13) "United States," as defined in section 1309.03 of the 2,421
Revised Code. 2,422
(C) As used in sections 1309.01 to 1309.50 of the Revised 2,424
56
Code, "check" and "note" have the meaning set forth in section 2,425
1303.03 of the Revised Code; "contract for sale" and "sale" have 2,426
the meaning set forth in section 1302.01 of the Revised Code; and 2,427
"holder in due course" has the meaning set forth in section 2,428
1303.31 of the Revised Code. 2,429
(D) The terms and principles of construction and 2,431
interpretation set forth in sections 1301.01 to 1301.14 of the 2,432
Revised Code are applicable to sections 1309.01 to 1309.50 of the 2,433
Revised Code. 2,434
Sec. 1309.03. (A) Documents, instruments, and ordinary 2,443
goods: 2,444
(1) This division applies to documents and instruments and 2,446
to goods other than those covered by a certificate of title 2,447
described in division (B) of this section, mobile goods described 2,448
in division (C) of this section, and minerals described in 2,449
division (E) of this section. 2,450
(2) Except as otherwise provided in this division, 2,452
perfection and the effect of perfection or nonperfection of a 2,453
security interest in collateral are governed by the law of the 2,454
jurisdiction where the collateral is when the last event occurs 2,455
on which is based the assertion that the security interest is 2,456
perfected or unperfected. 2,457
(3) If the parties to a transaction creating a purchase 2,459
money security interest in goods in one jurisdiction understand 2,460
at the time that the security interest attaches that the goods 2,461
will be kept in another jurisdiction, then the law of the other 2,462
jurisdiction governs the perfection and the effect of perfection 2,463
or nonperfection of the security interest from the time it 2,464
attaches until thirty days after the debtor receives possession 2,465
of the goods and thereafter if the goods are taken to the other 2,466
jurisdiction before the end of the thirty-day period. 2,467
(4) When collateral is brought into and kept in this state 2,469
while subject to a security interest perfected under the law of 2,470
the jurisdiction from which the collateral was removed, the 2,471
57
security interest remains perfected, but if action is required by 2,472
sections 1309.20 to 1309.37 of the Revised Code to perfect the 2,473
security interest: 2,474
(a) If the action is not taken before the expiration of 2,476
the period of perfection in the other jurisdiction or the end of 2,477
four months after the collateral is brought into this state, 2,478
whichever period first expires, the security interest becomes 2,479
unperfected at the end of that period and is thereafter deemed to 2,480
have been unperfected as against a person who became a purchaser 2,481
after removal; 2,482
(b) If the action is taken before the expiration of the 2,484
period specified in division (A)(4)(a) of this section, the 2,485
security interest continues perfected thereafter; 2,486
(c) For the purpose of priority over a buyer of consumer 2,488
goods, division (B) of section 1309.26 of the Revised Code, the 2,489
period of the effectiveness of a filing in the jurisdiction from 2,490
which the collateral is removed is governed by the rules with 2,491
respect to perfection in divisions (A)(4)(a) and (b) of this 2,492
section. 2,493
(B) Certificate of title. 2,495
(1) This division applies to goods covered by a 2,497
certificate of title issued under a statute of this state or of 2,498
another jurisdiction under the law of which indication of a 2,499
security interest on the certificate is required as a condition 2,500
of perfection. 2,501
(2) Except as otherwise provided in this division, 2,503
perfection and the effect of perfection or nonperfection of the 2,504
security interest are governed by the law, including the conflict 2,505
of laws rules, of the jurisdiction issuing the certificate until 2,506
four months after the goods are removed from that jurisdiction 2,507
and thereafter until the goods are registered in another 2,508
jurisdiction, but in any event not beyond surrender of the 2,509
certificate. After the expiration of that period, the goods are 2,510
not covered by the certificate of title within the meaning of 2,511
58
this section. 2,512
(3) Except with respect to the rights of a buyer described 2,514
in division (B)(4) of this section a security interest, perfected 2,515
in another jurisdiction otherwise than by notation on a 2,516
certificate of title, in goods brought into this state and 2,517
thereafter covered by a certificate of title issued by this state 2,518
is subject to the rules stated in division (A)(4) of this 2,519
section. 2,520
(4) If goods are brought into this state while a security 2,522
interest therein is perfected in any manner under the law of the 2,523
jurisdiction from which the goods are removed and a certificate 2,524
of title is issued by this state and the certificate does not 2,525
show that the goods are subject to the security interest or that 2,526
they may be subject to security interests not shown on the 2,527
certificate, the security interest is subordinate to the rights 2,528
of a buyer of the goods who is not in the business of selling 2,529
goods of that kind to the extent that he THE BUYER gives value 2,530
and receives delivery of the goods after issuance of the 2,531
certificate and without knowledge of the security interest. 2,532
(C) Accounts, general intangibles, and mobile goods. 2,534
(1) This division applies to accounts, other than an 2,536
account described in division (E) of this section on minerals, 2,537
and general intangibles, other than uncertificated securities, 2,538
and to goods which are mobile and which are of a type normally 2,539
used in more than one jurisdiction, such as motor vehicles, 2,540
trailers, rolling stock, airplanes, shipping containers, road 2,541
building and construction machinery, and commercial harvesting 2,542
machinery and the like, if the goods are equipment or are 2,543
inventory leased or held for lease by the debtor to others, and 2,544
are not covered by a certificate of title described in division 2,545
(B) of this section. 2,546
(2) The law, including the conflict of laws rules, of the 2,548
jurisdiction in which the debtor is located governs the 2,549
perfection and the effect of perfection or nonperfection of the 2,550
59
security interest. 2,551
(3) If, however, the debtor is located in a jurisdiction 2,553
which is not a part of the United States, and which does not 2,554
provide for perfection of the security interest by filing or 2,555
recording in that jurisdiction, the law of the jurisdiction in 2,556
the United States in which the debtor has its major executive 2,557
office in the United States governs the perfection and the effect 2,558
of perfection or nonperfection of the security interest through 2,559
filing. In the alternative, if the debtor is located in a 2,560
jurisdiction which is not a part of the United States or Canada 2,561
and the collateral is accounts or general intangibles for money 2,562
due or to become due, the security interest may be perfected by 2,563
notification to the account debtor. As used in this division, 2,564
"United States" includes its territories and possessions and the 2,565
Commonwealth of Puerto Rico. 2,566
(4) A debtor shall be deemed located at his THE DEBTOR'S 2,568
place of business if he THE DEBTOR has one, at his THE DEBTOR'S 2,570
chief executive office if he DEBTOR has more than one place of 2,571
business; otherwise at his THE DEBTOR'S residence. If, however, 2,572
the debtor is a foreign air carrier under the "Federal Aviation
Act of 1958," as amended, it shall be deemed located at the 2,574
designated office of the agent upon whom service of process may 2,575
be made on behalf of the foreign air carrier.
(5) A security interest perfected under the law of the 2,577
jurisdiction of the location of the debtor is perfected until the 2,578
expiration of four months after a change of the debtor's location 2,579
to another jurisdiction, or until perfection would have ceased by 2,580
the law of the first jurisdiction, whichever period first 2,581
expires. Unless perfected in the new jurisdiction before the end 2,582
of that period, it becomes unperfected thereafter and is deemed 2,583
to have been unperfected as against a person who became a 2,584
purchaser after the change. 2,585
(D) Chattel Paper. 2,587
The rules stated for goods in division (A) of this section 2,589
60
apply to a possessory security interest in chattel paper. The 2,590
rule stated for accounts in division (C) of this section applies 2,591
to a nonpossessory security in chattel paper, but the security 2,592
interest may not be perfected by notification to the account 2,593
debtor. 2,594
(E) Minerals. 2,596
Perfection and the effect of perfection or nonperfection of 2,598
a security interest which is created by a debtor who has an 2,599
interest in minerals or the like, including oil and gas, before 2,600
extraction and which attaches thereto as extracted, or which 2,601
attaches to an account resulting from the sale thereof at the 2,602
wellhead or minehead are governed by the law, including the 2,603
conflict of laws rules, of the jurisdiction wherein the wellhead 2,604
or minehead is located. 2,605
(F) Uncertificated securities INVESTMENT PROPERTY. 2,607
The law, including the conflict of laws rules, of the 2,609
jurisdiction of organization of the issuer governs the perfection 2,610
and the effect of perfection or non-perfection of a security 2,612
interest in uncertificated securities.
(1) THIS DIVISION APPLIES TO INVESTMENT PROPERTY. 2,614
(2) EXCEPT AS OTHERWISE PROVIDED IN DIVISION (F)(6) OF 2,616
THIS SECTION, DURING THE TIME THAT A SECURITY CERTIFICATE IS 2,617
LOCATED IN A JURISDICTION, PERFECTION OF A SECURITY INTEREST, THE 2,618
EFFECT OF PERFECTION OR NONPERFECTION, AND THE PRIORITY OF A 2,619
SECURITY INTEREST IN THE CERTIFICATED SECURITY REPRESENTED 2,620
THEREBY ARE GOVERNED BY THE LOCAL LAW OF THAT JURISDICTION. 2,621
(3) EXCEPT AS OTHERWISE PROVIDED IN DIVISION (F)(6) OF 2,623
THIS SECTION, PERFECTION OF A SECURITY INTEREST, THE EFFECT OF 2,624
PERFECTION OR NONPERFECTION, AND THE PRIORITY OF A SECURITY 2,625
INTEREST IN AN UNCERTIFICATED SECURITY ARE GOVERNED BY THE LOCAL 2,626
LAW OF THE ISSUER'S JURISDICTION AS SPECIFIED IN DIVISION (D) OF 2,627
SECTION 1308.05 OF THE REVISED CODE.
(4) EXCEPT AS OTHERWISE PROVIDED IN DIVISION (F)(6) OF 2,629
THIS SECTION, PERFECTION OF A SECURITY INTEREST, THE EFFECT OF 2,630
61
PERFECTION OR NONPERFECTION, AND THE PRIORITY OF A SECURITY 2,631
INTEREST IN A SECURITY ENTITLEMENT OR SECURITIES ACCOUNT ARE 2,632
GOVERNED BY THE LOCAL LAW OF THE SECURITIES INTERMEDIARY'S 2,633
JURISDICTION AS SPECIFIED IN DIVISION (E) OF SECTION 1308.05 OF 2,634
THE REVISED CODE.
(5) EXCEPT AS OTHERWISE PROVIDED IN DIVISION (F)(6) OF 2,636
THIS SECTION, PERFECTION OF A SECURITY INTEREST, THE EFFECT OF 2,637
PERFECTION OR NONPERFECTION, AND THE PRIORITY OF A SECURITY 2,638
INTEREST IN A COMMODITY CONTRACT OR COMMODITY ACCOUNT ARE 2,639
GOVERNED BY THE LOCAL LAW OF THE COMMODITY INTERMEDIARY'S 2,640
JURISDICTION. THE FOLLOWING RULES DETERMINE A "COMMODITY
INTERMEDIARY'S JURISDICTION" FOR PURPOSES OF THIS DIVISION: 2,641
(a) IF AN AGREEMENT BETWEEN THE COMMODITY INTERMEDIARY AND 2,643
COMMODITY CUSTOMER SPECIFIES THAT IT IS GOVERNED BY THE LAW OF A 2,644
PARTICULAR JURISDICTION, THAT JURISDICTION IS THE COMMODITY 2,645
INTERMEDIARY'S JURISDICTION.
(b) IF AN AGREEMENT BETWEEN THE COMMODITY INTERMEDIARY AND 2,647
COMMODITY CUSTOMER DOES NOT SPECIFY THE GOVERNING LAW AS PROVIDED 2,648
IN DIVISION (F)(5)(a) OF THIS SECTION, BUT EXPRESSLY SPECIFIES 2,649
THAT THE COMMODITY ACCOUNT IS MAINTAINED AT AN OFFICE IN A 2,650
PARTICULAR JURISDICTION, THAT JURISDICTION IS THE COMMODITY 2,651
INTERMEDIARY'S JURISDICTION.
(c) IF AN AGREEMENT BETWEEN THE COMMODITY INTERMEDIARY AND 2,653
COMMODITY CUSTOMER DOES NOT SPECIFY A JURISDICTION AS PROVIDED IN 2,654
DIVISION (F)(5)(a) OR (b) OF THIS SECTION, THE COMMODITY 2,656
INTERMEDIARY'S JURISDICTION IS THE JURISDICTION IN WHICH IS
LOCATED THE OFFICE IDENTIFIED IN AN ACCOUNT STATEMENT AS THE 2,657
OFFICE SERVING THE COMMODITY CUSTOMER'S ACCOUNT. 2,658
(d) IF AN AGREEMENT BETWEEN THE COMMODITY INTERMEDIARY AND 2,660
COMMODITY CUSTOMER DOES NOT SPECIFY A JURISDICTION AS PROVIDED IN 2,661
DIVISION (F)(5)(a) OR (b) OF THIS SECTION AND AN ACCOUNT 2,663
STATEMENT DOES NOT IDENTIFY AN OFFICE SERVING THE COMMODITY
CUSTOMER'S ACCOUNT AS PROVIDED IN DIVISION (F)(5)(c) OF THIS 2,664
SECTION, THE COMMODITY INTERMEDIARY'S JURISDICTION IS THE 2,665
62
JURISDICTION IN WHICH IS LOCATED THE CHIEF EXECUTIVE OFFICE OF 2,666
THE COMMODITY INTERMEDIARY.
(6) PERFECTION OF A SECURITY INTEREST BY FILING, AUTOMATIC 2,668
PERFECTION OF A SECURITY INTEREST IN INVESTMENT PROPERTY GRANTED 2,669
BY A BROKER OR SECURITIES INTERMEDIARY, AND AUTOMATIC PERFECTION 2,670
OF A SECURITY INTEREST IN A COMMODITY CONTRACT OR COMMODITY 2,671
ACCOUNT GRANTED BY A COMMODITY INTERMEDIARY ARE GOVERNED BY THE 2,672
LOCAL LAW OF THE JURISDICTION IN WHICH THE DEBTOR IS LOCATED.
Sec. 1309.112. (A) IN THIS CHAPTER: 2,674
(1) "COMMODITY ACCOUNT" MEANS AN ACCOUNT MAINTAINED BY A 2,676
COMMODITY INTERMEDIARY IN WHICH A COMMODITY CONTRACT IS CARRIED 2,677
FOR A COMMODITY CUSTOMER. 2,678
(2) "COMMODITY CONTRACT" MEANS A COMMODITY FUTURES 2,680
CONTRACT, AN OPTION ON A COMMODITY FUTURES CONTRACT, A COMMODITY 2,681
OPTION, OR OTHER CONTRACT THAT, IN EACH CASE, IS: 2,682
(a) TRADED ON OR SUBJECT TO THE RULES OF A BOARD OF TRADE 2,684
THAT HAS BEEN DESIGNATED AS A CONTRACT MARKET FOR SUCH A CONTRACT 2,685
PURSUANT TO THE FEDERAL COMMODITIES LAWS; OR 2,686
(b) TRADED ON A FOREIGN COMMODITY BOARD OF TRADE, 2,688
EXCHANGE, OR MARKET, AND IS CARRIED ON THE BOOKS OF A COMMODITY 2,689
INTERMEDIARY FOR A COMMODITY CUSTOMER. 2,690
(3) "COMMODITY CUSTOMER" MEANS A PERSON FOR WHOM A 2,692
COMMODITY INTERMEDIARY CARRIES A COMMODITY CONTRACT ON ITS BOOKS. 2,693
(4) "COMMODITY INTERMEDIARY" MEANS: 2,695
(a) A PERSON WHO IS REGISTERED AS A FUTURES COMMISSION 2,697
MERCHANT UNDER THE FEDERAL COMMODITIES LAWS; OR 2,698
(b) A PERSON WHO IN THE ORDINARY COURSE OF ITS BUSINESS 2,700
PROVIDES CLEARANCE OR SETTLEMENT SERVICES FOR A BOARD OF TRADE 2,701
THAT HAS BEEN DESIGNATED AS A CONTRACT MARKET PURSUANT TO THE 2,702
FEDERAL COMMODITIES LAWS.
(5) "CONTROL" WITH RESPECT TO A CERTIFICATED SECURITY, 2,704
UNCERTIFICATED SECURITY, OR SECURITY ENTITLEMENT HAS THE MEANING 2,705
SPECIFIED IN SECTION 1308.24 OF THE REVISED CODE. A SECURED 2,706
PARTY HAS CONTROL OVER A COMMODITY CONTRACT IF BY AGREEMENT AMONG 2,707
63
THE COMMODITY CUSTOMER, THE COMMODITY INTERMEDIARY, AND THE
SECURED PARTY, THE COMMODITY INTERMEDIARY HAS AGREED THAT IT WILL 2,708
APPLY ANY VALUE DISTRIBUTED ON ACCOUNT OF THE COMMODITY CONTRACT 2,709
AS DIRECTED BY THE SECURED PARTY WITHOUT FURTHER CONSENT BY THE 2,710
COMMODITY CUSTOMER. IF A COMMODITY CUSTOMER GRANTS A SECURITY 2,711
INTEREST IN A COMMODITY CONTRACT TO ITS OWN COMMODITY 2,712
INTERMEDIARY, THE COMMODITY INTERMEDIARY AS SECURED PARTY HAS
CONTROL. A SECURED PARTY HAS CONTROL OVER A SECURITIES ACCOUNT 2,713
OR COMMODITY ACCOUNT IF THE SECURED PARTY HAS CONTROL OVER ALL 2,714
SECURITY ENTITLEMENTS OR COMMODITY CONTRACTS CARRIED IN THE 2,715
SECURITIES ACCOUNT OR COMMODITY ACCOUNT.
(6) "INVESTMENT PROPERTY" MEANS: 2,717
(a) A SECURITY, WHETHER CERTIFICATED OR UNCERTIFICATED; 2,719
(b) A SECURITY ENTITLEMENT; 2,721
(c) A SECURITIES ACCOUNT; 2,723
(d) A COMMODITY CONTRACT; OR 2,725
(e) A COMMODITY ACCOUNT. 2,727
(B) ATTACHMENT OR PERFECTION OF A SECURITY INTEREST IN A 2,729
SECURITIES ACCOUNT IS ALSO ATTACHMENT OR PERFECTION OF A SECURITY 2,730
INTEREST IN ALL SECURITY ENTITLEMENTS CARRIED IN THE SECURITIES 2,731
ACCOUNT. ATTACHMENT OR PERFECTION OF A SECURITY INTEREST IN A 2,732
COMMODITY ACCOUNT IS ALSO ATTACHMENT OR PERFECTION OF A SECURITY 2,733
INTEREST IN ALL COMMODITY CONTRACTS CARRIED IN THE COMMODITY 2,734
ACCOUNT.
(C) A DESCRIPTION OF COLLATERAL IN A SECURITY AGREEMENT OR 2,736
FINANCING STATEMENT IS SUFFICIENT TO CREATE OR PERFECT A SECURITY 2,737
INTEREST IN A CERTIFICATED SECURITY, UNCERTIFICATED SECURITY, 2,738
SECURITY ENTITLEMENT, SECURITIES ACCOUNT, COMMODITY CONTRACT, OR 2,739
COMMODITY ACCOUNT WHETHER IT DESCRIBES THE COLLATERAL BY THOSE 2,740
TERMS, OR AS INVESTMENT PROPERTY, OR BY DESCRIPTION OF THE 2,741
UNDERLYING SECURITY, FINANCIAL ASSET, OR COMMODITY CONTRACT. A 2,742
DESCRIPTION OF INVESTMENT PROPERTY COLLATERAL IN A SECURITY
AGREEMENT OR FINANCING STATEMENT IS SUFFICIENT IF IT IDENTIFIES 2,743
THE COLLATERAL BY SPECIFIC LISTING, BY CATEGORY, BY QUANTITY, BY 2,744
64
A COMPUTATIONAL OR ALLOCATIONAL FORMULA OR PROCEDURE, OR BY ANY 2,745
OTHER METHOD, IF THE IDENTITY OF THE COLLATERAL IS OBJECTIVELY 2,746
DETERMINABLE.
(D) PERFECTION OF A SECURITY INTEREST IN INVESTMENT 2,748
PROPERTY IS GOVERNED BY THE FOLLOWING RULES: 2,749
(1) A SECURITY INTEREST IN INVESTMENT PROPERTY MAY BE 2,751
PERFECTED BY CONTROL. 2,752
(2) EXCEPT AS OTHERWISE PROVIDED IN DIVISIONS (D)(3) AND 2,754
(4) OF THIS SECTION, A SECURITY INTEREST IN INVESTMENT PROPERTY 2,755
MAY BE PERFECTED BY FILING. 2,756
(3) IF THE DEBTOR IS A BROKER OR SECURITIES INTERMEDIARY, 2,758
A SECURITY INTEREST IN INVESTMENT PROPERTY IS PERFECTED WHEN IT 2,759
ATTACHES. THE FILING OF A FINANCING STATEMENT WITH RESPECT TO A 2,760
SECURITY INTEREST IN INVESTMENT PROPERTY GRANTED BY A BROKER OR 2,761
SECURITIES INTERMEDIARY HAS NO EFFECT FOR PURPOSES OF PERFECTION 2,762
OR PRIORITY WITH RESPECT TO THAT SECURITY INTEREST.
(4) IF A DEBTOR IS A COMMODITY INTERMEDIARY, A SECURITY 2,764
INTEREST IN A COMMODITY CONTRACT OR A COMMODITY ACCOUNT IS 2,765
PERFECTED WHEN IT ATTACHES. THE FILING OF A FINANCING STATEMENT 2,766
WITH RESPECT TO A SECURITY INTEREST IN A COMMODITY CONTRACT OR A 2,767
COMMODITY ACCOUNT GRANTED BY A COMMODITY INTERMEDIARY HAS NO 2,768
EFFECT FOR PURPOSES OF PERFECTION OR PRIORITY WITH RESPECT TO
THAT SECURITY INTEREST. 2,769
(E) PRIORITY BETWEEN CONFLICTING SECURITY INTERESTS IN THE 2,771
SAME INVESTMENT PROPERTY IS GOVERNED BY THE FOLLOWING RULES: 2,772
(1) A SECURITY INTEREST OF A SECURED PARTY WHO HAS CONTROL 2,774
OVER INVESTMENT PROPERTY HAS PRIORITY OVER A SECURITY INTEREST OF 2,775
A SECURED PARTY WHO DOES NOT HAVE CONTROL OVER THE INVESTMENT 2,776
PROPERTY.
(2) EXCEPT AS OTHERWISE PROVIDED IN DIVISIONS (E)(3) AND 2,778
(4) OF THIS SECTION, CONFLICTING SECURITY INTERESTS OF SECURED 2,779
PARTIES EACH OF WHOM HAS CONTROL RANK EQUALLY. 2,780
(3) EXCEPT AS OTHERWISE AGREED BY THE SECURITIES 2,782
INTERMEDIARY, A SECURITY INTEREST IN A SECURITY ENTITLEMENT OR A 2,783
65
SECURITIES ACCOUNT GRANTED TO THE DEBTOR'S OWN SECURITIES 2,784
INTERMEDIARY HAS PRIORITY OVER ANY SECURITY INTEREST GRANTED BY 2,785
THE DEBTOR TO ANOTHER SECURED PARTY.
(4) EXCEPT AS OTHERWISE AGREED BY THE COMMODITY 2,787
INTERMEDIARY, A SECURITY INTEREST IN A COMMODITY CONTRACT OR A 2,788
COMMODITY ACCOUNT GRANTED TO THE DEBTOR'S OWN COMMODITY 2,789
INTERMEDIARY HAS PRIORITY OVER ANY SECURITY INTEREST GRANTED BY 2,790
THE DEBTOR TO ANOTHER SECURED PARTY.
(5) CONFLICTING SECURITY INTERESTS GRANTED BY A BROKER, A 2,792
SECURITIES INTERMEDIARY, OR A COMMODITY INTERMEDIARY WHICH ARE 2,793
PERFECTED WITHOUT CONTROL RANK EQUALLY. 2,794
(6) IN ALL OTHER CASES, PRIORITY BETWEEN CONFLICTING 2,796
SECURITY INTERESTS IN INVESTMENT PROPERTY IS GOVERNED BY 2,797
DIVISIONS (E), (F), AND (G) OF SECTION 1309.31 OF THE REVISED 2,798
CODE. DIVISION (D) OF SECTION 1309.31 OF THE REVISED CODE DOES 2,799
NOT APPLY TO INVESTMENT PROPERTY.
(F) IF A SECURITY CERTIFICATE IN REGISTERED FORM IS 2,801
DELIVERED TO A SECURED PARTY PURSUANT TO AGREEMENT, A WRITTEN 2,802
SECURITY AGREEMENT IS NOT REQUIRED FOR ATTACHMENT OR 2,803
ENFORCEABILITY OF THE SECURITY INTEREST, DELIVERY SUFFICES FOR 2,804
PERFECTION OF THE SECURITY INTEREST, AND THE SECURITY INTEREST
HAS PRIORITY OVER A CONFLICTING SECURITY INTEREST PERFECTED BY 2,805
MEANS OTHER THAN CONTROL, EVEN IF A NECESSARY INDORSEMENT IS 2,806
LACKING.
Sec. 1309.113. (A) IF A PERSON BUYS A FINANCIAL ASSET 2,808
THROUGH A SECURITIES INTERMEDIARY IN A TRANSACTION IN WHICH THE 2,809
BUYER IS OBLIGATED TO PAY THE PURCHASE PRICE TO THE SECURITIES 2,810
INTERMEDIARY AT THE TIME OF THE PURCHASE, AND THE SECURITIES 2,811
INTERMEDIARY CREDITS THE FINANCIAL ASSET TO THE BUYER'S 2,812
SECURITIES ACCOUNT BEFORE THE BUYER PAYS THE SECURITIES
INTERMEDIARY, THE SECURITIES INTERMEDIARY HAS A SECURITY INTEREST 2,813
IN THE BUYER'S SECURITY ENTITLEMENT SECURING THE BUYER'S 2,814
OBLIGATION TO PAY. A SECURITY AGREEMENT IS NOT REQUIRED FOR 2,815
ATTACHMENT OR ENFORCEABILITY OF THE SECURITY INTEREST, AND THE 2,816
66
SECURITY INTEREST IS AUTOMATICALLY PERFECTED.
(B) IF A CERTIFICATED SECURITY, OR OTHER FINANCIAL ASSET 2,818
REPRESENTED BY A WRITING WHICH IN THE ORDINARY COURSE OF BUSINESS 2,819
IS TRANSFERRED BY DELIVERY WITH ANY NECESSARY INDORSEMENT OR 2,820
ASSIGNMENT IS DELIVERED PURSUANT TO AN AGREEMENT BETWEEN PERSONS 2,821
IN THE BUSINESS OF DEALING WITH SUCH SECURITIES OR FINANCIAL 2,822
ASSETS AND THE AGREEMENT CALLS FOR DELIVERY VERSUS PAYMENT, THE 2,823
PERSON DELIVERING THE CERTIFICATE OR OTHER FINANCIAL ASSET HAS A 2,824
SECURITY INTEREST IN THE CERTIFICATED SECURITY OR OTHER FINANCIAL
ASSET SECURING THE SELLER'S RIGHT TO RECEIVE PAYMENT. A SECURITY 2,825
AGREEMENT IS NOT REQUIRED FOR ATTACHMENT OR ENFORCEABILITY OF THE 2,826
SECURITY INTEREST, AND THE SECURITY INTEREST IS AUTOMATICALLY 2,827
PERFECTED.
Sec. 1309.14. (A) Subject to the provisions of section 2,836
1304.20 of the Revised Code on the security interest of a 2,837
collecting bank, section 1308.36 SECTIONS 1309.112 AND 1309.113 2,839
of the Revised Code on security interests in securities 2,840
INVESTMENT PROPERTY, and section 1309.11 of the Revised Code on a 2,842
security interest arising under sections 1302.01 to 1302.98 of 2,843
the Revised Code, a security interest is not enforceable against 2,844
the debtor or third parties with respect to the collateral and 2,845
does not attach unless:
(1) The collateral is in the possession of the secured 2,847
party pursuant to agreement, THE COLLATERAL IS INVESTMENT 2,848
PROPERTY AND THE SECURED PARTY HAS CONTROL PURSUANT TO AGREEMENT, 2,849
or the debtor has signed a security agreement which contains a 2,851
description of the collateral and in addition, when the security 2,852
interest covers crops growing or to be grown or timber to be cut, 2,853
a description of the land concerned; and 2,854
(2) Value has been given; and 2,856
(3) The debtor has rights in the collateral. 2,858
(B) A security interest attaches when it becomes 2,860
enforceable against the debtor with respect to the collateral. 2,861
Attachment occurs as soon as all of the events specified in 2,862
67
division (A) of this section have taken place unless explicit 2,863
agreement postpones the time of attaching. 2,864
(C) Unless otherwise agreed, a security agreement gives 2,866
the secured party the rights to proceeds provided by section 2,867
1309.25 of the Revised Code. 2,868
(D) A transaction although subject to sections 1309.01 to 2,870
1309.50 of the Revised Code, is also subject to sections 1317.01 2,871
to 1317.99 and 1321.01 to 1321.33 of the Revised Code, and 2,872
divisions (A), (B), and (C) of section 1321.99 of the Revised 2,873
Code and in the event of conflict between the provisions of 2,874
sections 1309.01 to 1309.50, and 1317.01 to 1317.99, 1321.01 to 2,875
1321.33 of the Revised Code, and divisions (A), (B), and (C) of 2,876
section 1321.99 of the Revised Code, the provisions of sections 2,877
1317.01 to 1317.99, 1321.01 to 1321.33 of the Revised Code, and 2,878
divisions (A), (B), and (C) of section 1321.99 of the Revised 2,879
Code shall prevail. Failure to comply with such provisions has 2,880
only the effect provided therein. 2,881
Sec. 1309.20. (A) Except as otherwise provided in 2,890
division (B) of this section, an unperfected security interest is 2,891
subordinate to the rights of: 2,892
(1) Persons entitled to priority under section 1309.31 of 2,894
the Revised Code; 2,895
(2) A person who becomes a lien creditor before the 2,897
security interest is perfected; 2,898
(3) In the case of goods, instruments, documents, and 2,900
chattel paper, a person who is not a secured party and who is a 2,901
transferee in bulk or other buyer not in ordinary course of 2,902
business, or is a buyer of farm products in ordinary course of 2,903
business, to the extent that he THE PERSON gives value and 2,904
receives delivery of the collateral without knowledge of the 2,905
security interest and before it is perfected; 2,907
(4) In the case of accounts and, general intangibles, AND 2,909
INVESTMENT PROPERTY, a person who is not a secured party and who 2,911
is a transferee to the extent that he THE PERSON gives value 2,912
68
without knowledge of the security interest and before it is 2,913
perfected.
(B) If the secured party files with respect to a purchase 2,915
money security interest before or within twenty days after the 2,916
debtor receives possession of the collateral he THE SECURED PARTY 2,918
takes priority over the rights of a transferee in bulk or of a
lien creditor which arise between the time the security interest 2,919
attaches and the time of filing. 2,920
(C) A "lien creditor" means a creditor who has acquired a 2,922
lien on the property involved by attachment, levy or the like and 2,923
includes an assignee for benefit of creditors from the time of 2,924
assignment, and a trustee in bankruptcy from the date of the 2,925
filing of the petition or a receiver in equity from the time of 2,926
appointment. 2,927
(D) A person who becomes a lien creditor while a security 2,929
interest is perfected takes subject to the security interest only 2,930
to the extent that it secures advances made before he THE PERSON 2,931
becomes a lien creditor or within forty-five days thereafter or 2,932
made without knowledge of the lien or pursuant to a commitment 2,933
entered into without knowledge of the lien. 2,934
Sec. 1309.21. (A) A financing statement must be filed to 2,943
perfect all security interests except the following: 2,944
(1) A security interest in collateral in possession of the 2,946
secured party under section 1309.24 of the Revised Code; 2,947
(2) A security interest temporarily perfected in 2,949
instruments, CERTIFICATED SECURITIES, or documents without 2,951
delivery under section 1309.23 of the Revised Code or in proceeds 2,952
for a ten-day period under section 1309.25 of the Revised Code; 2,953
(3) A security interest created by an assignment of a 2,955
beneficial interest in a trust or a decedent's estate; 2,956
(4) A purchase money security interest in consumer goods; 2,958
but fixture filing is required for a priority over conflicting 2,959
interests in fixtures to the extent provided in section 1309.32 2,960
of the Revised Code; 2,961
69
(5) An assignment of accounts which does not alone or in 2,963
conjunction with other assignments to the same assignee transfer 2,964
a significant part of the outstanding accounts of the assignor; 2,965
(6) A security interest of a collecting bank as provided 2,967
in section 1304.20 of the Revised Code, or in securities as 2,968
provided in section 1308.36 of the Revised Code, or arising under 2,969
sections 1302.01 to 1302.98 of the Revised Code, or covered in 2,970
division (C) of this section; 2,971
(7) An assignment for the benefit of all the creditors of 2,973
the transferor, and subsequent transfers by the assignee 2,974
thereunder; 2,975
(8) A SECURITY INTEREST IN INVESTMENT PROPERTY WHICH IS 2,977
PERFECTED WITHOUT FILING UNDER SECTION 1309.112 OR 1309.113 OF 2,978
THE REVISED CODE.
(B) If a secured party assigns a perfected security 2,980
interest, no filing under sections 1309.01 to 1309.50 of the 2,981
Revised Code is required in order to continue the perfected 2,982
status of the security interest against creditors of and 2,983
transferees from the original debtor. 2,984
(C) The filing of a financing statement otherwise required 2,986
by sections 1309.01 to 1309.50 of the Revised Code is not 2,987
necessary or effective to perfect a security interest in property 2,988
subject to: 2,989
(1) A statute or treaty of the United States which 2,991
provides for a national or international registration or a 2,992
national or international certificate of title or which specifies 2,993
a place of filing different from that specified in sections 2,994
1309.01 to 1309.50 of the Revised Code for filing of the security 2,995
interest; or 2,996
(2) The following statutes of this state: sections 2,998
1548.20, 1701.66, 4505.13 except to the extent provided in 2,999
division (A) of such section, and 4969.05 of the Revised Code; or 3,000
(3) A certificate of title statute of another jurisdiction 3,002
under the law of which indication of a security interest on the 3,003
70
certificate is required as a condition of perfection, division 3,004
(B) of section 1309.03 of the Revised Code. 3,005
(D) Compliance with a statute or treaty described in 3,007
division (C) of this section is equivalent to the filing of a 3,008
financing statement under sections 1309.01 to 1309.50 of the 3,009
Revised Code, and a security interest in property subject to the 3,010
statute or treaty can be perfected only by compliance therewith 3,011
except as provided in section 1309.03 of the Revised Code on 3,012
multiple state transactions. Duration and renewal of perfection 3,013
of a security interest perfected by compliance with the statute 3,014
or treaty are governed by the provisions of the statute or 3,015
treaty; in other respects the security interest is subject to 3,016
sections 1309.01 to 1309.50 of the Revised Code. 3,017
Sec. 1309.22. (A) A security interest is perfected when 3,026
it has attached and when all of the applicable steps required for 3,027
perfection have been taken, as provided in sections 1309.112, 3,028
1309.21, 1309.23, 1309.24, and 1309.25 of the Revised Code. If 3,030
such steps are taken before the security interest attaches, it is
perfected at the time when it attaches. 3,031
(B) If a security interest is originally perfected in any 3,033
way permitted under sections 1309.01 to 1309.50, inclusive, of 3,034
the Revised Code, and is subsequently perfected in some other way 3,035
under sections 1309.01 to 1309.50, inclusive, of the Revised 3,036
Code, without an intermediate period when it was unperfected, the 3,037
security interest shall be deemed to be perfected continuously 3,038
for the purposes of such sections.
(C) A security interest by whatever name designated by any 3,040
law in effect prior to July 1, 1962, which was perfected prior to 3,041
such date and in connection with which any statement, instrument, 3,042
document, or notice was filed, refiled, or recorded pursuant to 3,043
such law, shall, if such law required a further filing, refiling, 3,044
or recording to continue the perfection of such security 3,045
interest, continue to be perfected without any further filing,
refiling, or recording of any statement, instrument, document, or 3,046
71
notice until the date provided by such law or July 1, 1964, 3,047
whichever date is later and will thereupon lapse, unless a 3,048
continuation statement has been filed after July 1, 1962, and 3,049
prior to the lapse of such statement, instrument, document, or 3,050
notice pursuant to this section. Section 1309.38 of the Revised
Code determines the proper place to file such continuation 3,051
statement and succeeding continuation statements and, except as 3,052
otherwise provided in this section, division (C) of section 3,053
1309.40 of the Revised Code applies to and governs the period of 3,054
effectiveness and the requirements respecting such continuation
statements. 3,055
Sec. 1309.23. (A) A security interest in chattel paper or 3,064
negotiable documents may be perfected by filing. A security 3,065
interest in money or instruments, other than certificated 3,066
securities or instruments which constitute part of chattel paper, 3,067
can be perfected only by the secured party's taking possession, 3,068
except as provided in divisions (D) and (E) of this section and 3,069
divisions (B) and (C) of section 1309.25 of the Revised Code on 3,070
proceeds. 3,071
(B) During the period that goods are in the possession of 3,073
the issuer of a negotiable document therefor, a security interest 3,074
in the goods is perfected by perfecting a security interest in 3,075
the document, and any security interest in the goods otherwise 3,076
perfected during such period is subject thereto. 3,077
(C) A security interest in goods in the possession of a 3,079
bailee other than one who has issued a negotiable document 3,080
therefor is perfected by issuance of a document in the name of 3,081
the secured party or by the bailee's receipt of notification of 3,082
the secured party's interest or by filing as to the goods. 3,083
(D) A security interest in instruments, other than 3,085
certificated securities, or negotiable documents is perfected 3,086
without filing or the taking of possession for a period of 3,087
twenty-one days from the time it attaches to the extent that it 3,088
arises for new value given under a written security agreement. 3,089
72
(E) A security interest remains perfected for a period of 3,091
twenty-one days without filing where a secured party having a 3,092
perfected security interest in an instrument, other than a 3,093
certificated security, a negotiable document, or goods in 3,094
possession of a bailee other than one who has issued a negotiable 3,095
document therefor: 3,096
(1) Makes available to the debtor the goods or documents 3,098
representing the goods for the purpose of ultimate sale or 3,099
exchange or for the purpose of loading, unloading, storing, 3,100
shipping, trans-shipping, manufacturing, processing, or otherwise 3,101
dealing with them in a manner preliminary to their sale or 3,102
exchange, but priority between conflicting security interests in 3,103
the goods is subject to division (C) of section 1309.31 of the 3,104
Revised Code; or 3,105
(2) Delivers the instrument OR CERTIFICATED SECURITY to 3,107
the debtor for the purpose of ultimate sale or exchange or of 3,109
presentation, collection, renewal, or registration of transfer. 3,110
(F) After the twenty-one day period set forth in divisions 3,112
(D) and (E) of this section, perfection depends upon compliance 3,113
with applicable provisions of sections 1309.01 to 1309.50 of the 3,114
Revised Code. 3,115
Sec. 1309.24. A security interest in letters of credit and 3,124
advices of credit, as provided in division (B)(1) of section 3,125
1305.15 of the Revised Code, goods, instruments, other than 3,126
certificated securities, negotiable documents, money, or chattel 3,127
paper may be perfected by the secured party's taking possession 3,128
of the collateral. If such collateral other than goods covered 3,129
by a negotiable document is held by a bailee, the secured party 3,130
is deemed to have possession from the time the bailee receives 3,131
notification of the secured party's interest. A security 3,132
interest is perfected by possession from the time possession is 3,133
taken without relation back and continues only so long as 3,134
possession is retained, unless otherwise specified in sections 3,135
1309.01 to 1309.50 of the Revised Code. The security interest 3,136
73
may be otherwise perfected as provided in sections 1309.01 to 3,137
1309.50 of the Revised Code, before or after the period of 3,138
possession by the secured party. 3,139
Sec. 1309.25. (A) "Proceeds" includes whatever is 3,148
received upon the sale, exchange, collection, or other 3,149
disposition of collateral or proceeds. Insurance payable by 3,150
reason of loss or damage to the collateral is proceeds, except to 3,151
the extent that it is payable to a person other than a party to 3,152
the security agreement. Moneys ANY PAYMENTS OR DISTRIBUTIONS 3,153
MADE WITH RESPECT TO INVESTMENT PROPERTY COLLATERAL ARE PROCEEDS. 3,154
MONEY, checks, deposit accounts, and the like are "cash 3,156
proceeds." All other proceeds are "non-cash proceeds." 3,157
(B) Except where sections 1309.01 to 1309.50 of the 3,159
Revised Code otherwise provide, a security interest continues in 3,160
collateral notwithstanding sale, exchange, or other disposition 3,161
thereof unless the disposition was authorized by the secured 3,162
party in the security agreement or otherwise, and also continues 3,163
in any identifiable proceeds including collections received by 3,164
the debtor. 3,165
(C) The security interest in proceeds is a continuously 3,167
perfected security interest if the interest in the original 3,168
collateral was perfected but it ceases to be a perfected security 3,169
interest and becomes unperfected ten days after receipt of the 3,170
proceeds by the debtor unless: 3,171
(1) a A filed financing statement covers the original 3,173
collateral and the proceeds are collateral in which a security 3,174
interest may be perfected by filing in the office or offices 3,175
where the financing statement has been filed and, if the proceeds 3,176
are acquired with cash proceeds, the description of the 3,177
collateral in the financing statement indicates the types of 3,178
property constituting the proceeds; or 3,179
(2) a A filed financing statement covers the original 3,181
collateral and the proceeds are identifiable cash proceeds; or 3,182
(3) the THE ORIGINAL COLLATERAL WAS INVESTMENT PROPERTY 3,184
74
AND THE PROCEEDS ARE IDENTIFIABLE CASH PROCEEDS; OR 3,185
(4) THE security interest in the proceeds is perfected 3,187
before the expiration of the ten day period. Except as provided 3,188
in this section, a security interest in proceeds can be perfected 3,189
only by the methods or under the circumstances permitted in 3,190
sections 1309.01 to 1309.50 of the Revised Code for original 3,191
collateral of the same type. 3,192
(D) In the event of insolvency proceedings instituted by 3,194
or against a debtor, a secured party with a perfected security 3,195
interest in proceeds has a perfected security interest only in 3,196
the following proceeds: 3,197
(1) in IN identifiable non-cash proceeds and in separate 3,199
deposit accounts containing only proceeds; 3,200
(2) in IN identifiable cash proceeds in the form of money 3,202
which is neither commingled with other money nor deposited in a 3,203
deposit account prior to the insolvency proceedings; 3,204
(3) in IN identifiable cash proceeds in the form of checks 3,206
and the like which are not deposited in a deposit account prior 3,207
to the insolvency proceedings; and 3,208
(4) in IN all cash and deposit accounts of the debtor in 3,210
which proceeds have been commingled with other funds, but the 3,211
perfected security interest under this division is: 3,212
(a) subject SUBJECT to any right of set-off; and 3,214
(b) limited LIMITED to an amount not greater than the 3,216
amount of any cash proceeds received by the debtor within ten 3,217
days before the institution of the insolvency proceedings, less 3,218
the sum of (i) the payments to the secured party on account of 3,219
cash proceeds received by the debtor; and (ii) the cash proceeds 3,220
received by the debtor during such period to which the secured 3,221
party is entitled under divisions (D)(1) to (3) of this section. 3,222
(E) If a sale of goods results in an account or chattel 3,224
paper which is transferred by the seller to a secured party, and 3,225
if the goods are returned to or are repossessed by the seller or 3,226
the secured party, the following rules determine priorities: 3,227
75
(1) If the goods were collateral at the time of sale for 3,229
an indebtedness of the seller which is still unpaid, the original 3,230
security interest attaches again to the goods and continues as a 3,231
perfected security interest if it was perfected at the time when 3,232
the goods were sold. If the security interest was originally 3,233
perfected by a filing which is still effective, nothing further 3,234
is required to continue the perfected status; in any other case, 3,235
the secured party must take possession of the returned or 3,236
repossessed goods or must file. 3,237
(2) An unpaid transferee of the chattel paper has a 3,239
security interest in the goods against the transferor. Such 3,240
security interest is prior to a security interest asserted under 3,241
division (E)(1) of this section to the extent that the transferee 3,242
of the chattel paper was entitled to priority under section 3,243
1309.27 of the Revised Code. 3,244
(3) An unpaid transferee of the account has a security 3,246
interest in the goods against the transferor. Such security 3,247
interest is subordinate to a security interest asserted under 3,248
division (E)(1) of this section. 3,249
(4) A security interest of an unpaid transferee asserted 3,251
under division (E)(2) or (3) of this section must be perfected 3,252
for protection against creditors of the transferor and purchasers 3,253
of the returned or repossessed goods. 3,254
Sec. 1309.28. Nothing in sections 1309.01 to 1309.50 of 3,263
the Revised Code, limit LIMITS the rights of a holder in due 3,264
course of a negotiable instrument, as defined in section 1303.32 3,266
of the Revised Code, or a holder to whom a negotiable document of 3,267
title has been duly negotiated under section 1307.29 of the 3,268
Revised Code, or a bona fide PROTECTED purchaser of a security 3,269
under section 1308.17 of the Revised Code, and such holders or 3,271
purchasers take priority over an earlier security interest even 3,272
though perfected. Filing under sections 1309.01 to 1309.50 of the 3,273
Revised Code, does not constitute notice of the security interest 3,274
to such holders or purchasers. 3,275
76
Sec. 1309.31. (A) The rules of priority stated in 3,284
sections 1309.20 to 1309.27 of the Revised Code and in the 3,285
following sections shall govern where applicable: section 3,286
1304.20 of the Revised Code with respect to the security 3,287
interests of collecting banks in items being collected, 3,288
accompanying documents, and proceeds; section 1309.03 of the 3,289
Revised Code on security interests related to other 3,290
jurisdictions; section 1309.111 of the Revised Code on 3,291
consignments; SECTION 1309.112 OF THE REVISED CODE ON SECURITY 3,292
INTERESTS IN INVESTMENT PROPERTY. 3,293
(B) A perfected security interest in crops for new value 3,295
given to enable the debtor to produce the crops during the 3,296
production season and given not more than three months before the 3,297
crops become growing crops by planting or otherwise takes 3,298
priority over an earlier perfected security interest to the 3,299
extent that such earlier interest secures obligations due more 3,300
than six months before the crops become growing crops by planting 3,301
or otherwise, even though the person giving new value had 3,302
knowledge of the earlier security interest. 3,303
(C) A perfected purchase money security interest in 3,305
inventory has priority over a conflicting security interest in 3,306
the same inventory and also has priority in identifiable cash 3,307
proceeds received on or before the delivery of the inventory to a 3,308
buyer if: 3,309
(1) The purchase money security interest is perfected at 3,311
the time the debtor receives possession of the inventory; and 3,312
(2) The purchase money secured party gives notification in 3,314
writing to the holder of the conflicting security interest if the 3,315
holder had filed a financing statement covering the same types of 3,316
inventory: 3,317
(a) Before the date of the filing made by the purchase 3,319
money secured party; or 3,320
(b) Before the beginning of the twenty-one-day period 3,322
where the purchase money security interest is temporarily 3,323
77
perfected without filing or possession pursuant to division (E) 3,324
of section 1309.23 of the Revised Code; and 3,325
(3) The holder of the conflicting security interest 3,327
receives the notification within five years before the debtor 3,328
receives possession of the inventory; and 3,329
(4) The notification states that the person giving the 3,331
notice has or expects to acquire a purchase money security 3,332
interest in inventory of the debtor, describing such inventory by 3,333
item or type. 3,334
(D) A purchase money security interest in collateral other 3,336
than inventory has priority over a conflicting security interest 3,337
in the same collateral or its proceeds if the purchase money 3,338
security interest is perfected at the time the debtor receives 3,339
possession of the collateral or within twenty days thereafter. 3,340
(E) In all cases not governed by other rules stated in 3,342
this section, including cases of purchase money security 3,343
interests which do not qualify for the special priorities set 3,344
forth in divisions (C) and (D) of this section, priority between 3,345
conflicting security interests in the same collateral shall be 3,346
determined according to the following rules: 3,347
(1) Conflicting security interests rank according to 3,349
priority in time of filing or perfection. Priority dates from 3,350
the time a filing is first made covering the collateral or the 3,351
time the security interest is first perfected, whichever is 3,352
earlier, provided that there is no period thereafter when there 3,353
is neither filing nor perfection. 3,354
(2) So long as conflicting security interests are 3,356
unperfected, the first to attach has priority. 3,357
(F) For the purpose of division (E) of this section, a 3,359
date of filing or perfection as to collateral is also a date of 3,360
filing or perfection as to proceeds. 3,361
(G) If future advances are made while a security interest 3,363
is perfected by filing, the taking of possession, or under 3,364
section 1308.36 1309.112 OR 1309.113 of the Revised Code on 3,366
78
securities INVESTMENT PROPERTY, the security interest has the 3,367
same priority for the purposes of division (E) of this section OR 3,368
DIVISION (E) OF SECTION 1309.112 OF THE REVISED CODE with respect 3,369
to the future advances as it does with respect to the first 3,370
advance. If a commitment is made before or while the security 3,371
interest is so perfected, the security interest has the same 3,372
priority with respect to advances made pursuant thereto. In 3,373
other cases a perfected security interest has priority from the 3,374
date the advance is made.
Sec. 1701.24. (A) The shares of a corporation are 3,383
personal property. 3,384
(B) Each holder of shares is entitled to one or more 3,386
certificates, signed by the chairman CHAIRPERSON of the board or 3,387
the president or a vice-president and by the secretary, an 3,388
assistant secretary, the treasurer, or an assistant treasurer of 3,389
the corporation, which shall certify the number and class of 3,390
shares held by him THE HOLDER in such corporation, but no 3,391
certificate for shares shall be executed or delivered until such 3,392
shares are fully paid. When such a certificate is countersigned 3,393
by an incorporated transfer agent or registrar, the signature of 3,394
any of said SUCH officers of the corporation may be facsimile, 3,395
engraved, stamped, or printed. Although any officer of the 3,396
corporation whose manual or facsimile signature is affixed to 3,397
such a certificate ceases to be such officer before the 3,398
certificate is delivered, such certificate nevertheless shall be 3,399
effective in all respects when delivered. 3,400
(C) A corporation is not obligated to but may issue 3,402
fractional shares. In the case of uncertificated securities, the 3,403
corporation may treat the issuance of fractional shares in 3,404
accordance with the procedures set forth in section 1308.44 of 3,405
the Revised Code, or may proceed as provided in divisions (C)(1) 3,406
and (2) of this section. In the case of certificated securities 3,407
the corporation may execute and deliver a certificate for or 3,408
including a fraction of a share; or, in lieu thereof, may: 3,409
79
(1) Pay to the person otherwise entitled to become a 3,411
holder of a fraction of a share an amount in cash specified as 3,412
the value thereof in the articles, a resolution of the directors, 3,413
or other agreement or instrument pursuant to which such fraction 3,414
of a share would otherwise be issued, or, if not so specified, 3,415
then the amount determined for such purpose by the directors of 3,416
the issuing corporation, or the amount realized upon sale of such 3,417
fraction of a share; 3,418
(2) Provide reasonable means to afford to such person the 3,420
opportunity, on specified terms and conditions, to purchase or 3,421
sell fractional interests in shares, to the exclusion of all 3,422
rights he might otherwise have; 3,423
(3) Execute and deliver registered or bearer scrip over 3,425
the manual or facsimile signature of an officer of the 3,426
corporation or of its agent for that purpose, exchangeable as 3,427
therein provided for full shares, but such scrip shall not 3,428
entitle the holder to any rights as a shareholder except as 3,429
therein provided. The scrip may provide that it shall become 3,430
void unless the rights of the holders are exercised within a 3,431
specified period and may contain any other provisions that the 3,432
corporation deems advisable. Whenever any such scrip ceases to 3,433
be exchangeable for full shares, the shares that would otherwise 3,434
have been issuable as therein provided shall be deemed to be 3,435
treasury shares unless the scrip contains other provision for 3,436
their disposition. 3,437
(D) A joint estate with the incidents of a joint estate as 3,439
at common law, including the right of survivorship, may be 3,440
created in shares by registering the same in the case of 3,441
uncertificated securities, or by executing and delivering a 3,442
certificate therefor in the case of certificated securities to 3,443
two or more persons with the words "as joint tenants" or "as 3,444
joint tenants with right of survivorship and not as tenants in 3,445
common" following their names. Upon receipt by the corporation 3,446
of proof satisfactory to it of the death of one or more of such 3,447
80
joint tenants, it may register the transfer to, or execute and 3,448
deliver a new certificate to the survivor or survivors. 3,449
(E) Whenever a corporation has determined that any 3,451
outstanding certificates for shares should be canceled and 3,452
exchanged for other certificates, the corporation may order and 3,453
require the holders of the outstanding certificates to surrender 3,454
them for such purpose within a reasonable time to be fixed by the 3,455
corporation. Such order may provide that, until compliance 3,456
therewith, any or all rights as a shareholder of the holder of 3,457
any certificate so required to be surrendered shall be suspended 3,458
with respect to the shares represented thereby. Not less than 3,459
ten days before any such order is to become effective, the 3,460
corporation shall give notice thereof by mail to each shareholder 3,461
affected thereby at his address as it appears on the records of 3,462
the corporation. 3,463
(F) Unless otherwise provided by the articles or 3,465
regulations, the directors may provide by resolution that some or 3,466
all of any or all classes and series of shares of a corporation 3,467
shall be uncertificated shares, provided that such resolution 3,468
shall not apply to shares represented by a certificate until such 3,469
certificate is surrendered to the corporation as provided in 3,470
division (B) of section 1308.43 of the Revised Code, and that 3,471
such resolution shall not apply to a certificated security issued 3,472
in exchange for an uncertificated security as provided in 3,473
division (C) of section 1308.43 of the Revised Code. Within a 3,474
reasonable time after the issuance or transfer of uncertificated 3,475
shares, the corporation shall send to the registered owner 3,476
thereof a written notice containing the information required to 3,477
be set forth or stated on certificates pursuant to division (A) 3,478
of section 1701.25 of the Revised Code. Such notice may be 3,479
contained in the statement required by section 1308.44 of the 3,480
Revised Code. Except as otherwise expressly provided by law, the 3,481
rights and obligations of the holders of uncertificated shares 3,482
and the rights and obligations of the holders of certificates 3,483
81
representing shares of the same class and series shall be 3,484
identical. 3,485
Sec. 1701.25. (A) Each certificate for shares of a 3,494
corporation shall state: 3,495
(1) That the corporation is organized under the laws of 3,497
this state; 3,498
(2) The name of the person to whom the shares represented 3,500
by the certificate are issued; 3,501
(3) The number of shares represented by the certificate; 3,503
(4) If the shares of the corporation are classified, the 3,505
designation of the class, and the series, if any, of the shares 3,506
represented by the certificate; 3,507
(5) On the face or the back of the certificate: 3,509
(a) The express terms, if any, of the shares represented 3,511
by the certificate and of the other class or classes and series 3,512
of shares, if any, which the corporation is authorized to issue; 3,513
or 3,514
(b) A summary of such express terms; or 3,516
(c) That the corporation will mail to the shareholder a 3,518
copy of such express terms without charge within five days after 3,519
receipt of written request therefor; or 3,520
(d) That a copy of such express terms is attached to and 3,522
by reference made a part of such certificate and that the 3,523
corporation will mail to the shareholder a copy of such express 3,524
terms without charge within five days after receipt of written 3,525
request therefor if the copy has become detached from the 3,526
certificate. 3,527
(B) No restriction on the right to transfer shares and no 3,529
reservation of lien on shares shall be effective against a 3,530
transferee of such shares unless, as to uncertificated 3,531
securities, there is set forth in the initial transaction 3,532
statement required for liens by section 1308.02 of the Revised 3,533
Code, and for restrictions on transfer by THERE HAS BEEN 3,534
COMPLIANCE WITH section 1308.11 of the Revised Code, and unless, 3,536
82
as to certificated securities, there is set forth on the face or 3,537
the back of the certificate therefor:
(1) A statement of the terms of such restriction or 3,539
reservation; or 3,540
(2) A summary of the terms of such restriction or 3,542
reservation and a statement that the corporation will mail to the 3,543
shareholder a copy of such restriction or reservation without 3,544
charge within five days after receipt of written request 3,545
therefor; or 3,546
(3) If such restriction or reservation is contained in the 3,548
articles or regulations of the corporation, or in an instrument 3,549
in writing to which the corporation is a party, a statement to 3,550
that effect and a statement that the corporation will mail to the 3,551
shareholder a copy of such restriction or reservation without 3,552
charge within five days after receipt of written request 3,553
therefor; or 3,554
(4) If such restriction or reservation is contained in an 3,556
instrument in writing (other than the articles or regulations of 3,557
the corporation or an instrument in writing to which the 3,558
corporation is a party), a statement to that effect identifying 3,559
the instrument by title, date, and parties. 3,560
(C) A corporation shall mail to a shareholder without 3,562
charge within five days after receipt of written request therefor 3,563
the copy or copies referred to in paragraphs (5)(c) and (5)(d) of 3,564
division (A) and paragraphs (2) and (3) of division (B) of this 3,565
section. 3,566
Sec. 1701.27. (A) In case a certificate for shares is 3,575
lost, stolen, or destroyed, the court of common pleas or the 3,576
probate court of the county in which the principal office of the 3,577
corporation is located shall have jurisdiction to hear and 3,578
determine all questions respecting such loss, theft, or 3,579
destruction, the person interested therein, the bond required to
be given to protect the corporation or any person injured by the 3,580
execution and delivery of a new certificate, the terms on which a 3,581
83
new certificate shall be executed and delivered, and the costs 3,582
and counsel fees, if any, to be allowed to the corporation. 3,583
(B) A corporation which voluntarily and in good faith 3,585
executes and delivers a new certificate in lieu of one believed 3,586
to have been lost, stolen, or destroyed, or which executes and 3,587
delivers a new certificate in compliance with an order of a court 3,588
of competent jurisdiction, may recognize the person named in the 3,589
new certificate, or any certificate thereafter executed and
delivered in exchange or substitution for such new certificate, 3,590
as the owner of the shares described therein for all purposes, 3,591
until the owner of the original certificate, or a transferee 3,592
thereof without notice and for value, enjoins the corporation and 3,593
the holder of any new certificate, or any certificate executed
and delivered in exchange or substitution for such new 3,594
certificate, from so acting. 3,595
(C) Special provisions in sections 1308.01 to 1308.36, 3,597
inclusive, of the Revised Code, (particularly section 1308.35 3,598
1308.41 of the Revised Code) relating to the replacement of lost, 3,600
apparently destroyed, or wrongfully taken securities shall govern 3,601
to the exclusion of the provisions of this section on this
subject, except where it clearly appears that a special provision 3,602
is cumulative, in which case it and the provisions of this 3,603
section on the same subject shall apply. 3,604
Sec. 1701.49. (A) By written agreement certificates for 3,613
shares of a corporation may be deposited within or without this 3,614
state by any holder or holders thereof with one or more persons 3,615
as trustees, or with any depositary designated by or pursuant to 3,616
such agreement to act for such trustees, for the purpose and with 3,617
the effect of granting to such trustees or a majority of them, or 3,618
to such persons as may be designated by or pursuant to such 3,619
agreement, all the voting, consenting, or other rights in respect 3,620
of the shares represented by such certificates, or such of these 3,621
rights as may be specified in the agreement, or for such other 3,622
lawful purposes as may be specified in the agreement, for such 3,623
84
period and upon such terms as may be stated therein. 3,624
In the case of uncertificated securities, the deposit of 3,626
the shares may be accomplished by registration in the name of the 3,627
trustee or trustees as provided in division (F) of this section. 3,628
(B) No such agreement which grants the voting or 3,630
consenting rights in respect of shares shall be irrevocable for a 3,631
period of more than ten years, unless the voting or consenting 3,632
rights granted thereby are coupled with an interest in the shares 3,633
to which such rights relate, except that, if the agreement so 3,634
provides, such irrevocable grant may be extended for additional 3,635
periods of not more than ten years each, upon the affirmative 3,636
vote or assent of the beneficial owners of not less than a 3,637
majority of the shares deposited under the agreement. Such 3,638
rights shall be deemed coupled with an interest in the shares if 3,639
granted in connection with: an option, authority, or contract to 3,640
buy or sell the shares or a part thereof; a pledge of the shares 3,641
to secure the performance or nonperformance of any act; the 3,642
performance or nonperformance of any act, or agreement for an 3,643
act, by the corporation issuing the shares; or any other act or 3,644
thing constituting an interest sufficient in law to support a 3,645
power coupled therewith. 3,646
(C) The trustees under the agreement may issue, or cause 3,648
to be issued by their depositary or agent, voting trust 3,649
certificates registered in the name of the owners thereof. So 3,650
far as consistent with the agreement and the voting trust 3,651
certificates issued thereunder, the provisions of sections 3,652
1308.01 to 1308.44 CHAPTER 1308., and of sections 1701.01 to 3,654
1701.99 of the Revised Code, with respect to the transfer of 3,655
certificates for shares shall apply to transfers of such voting 3,656
trust certificates. 3,657
Voting trust certificates must be in certificated form, and 3,659
interests in a voting trust shall not be eligible for treatment 3,660
as uncertificated securities. 3,661
(D) The agreement may include any terms not repugnant to 3,663
85
law, including provisions defining, limiting, or regulating the 3,664
exercise of the authority, and the liability of, the trustees, or 3,665
of such persons as are designated by or pursuant to any such 3,666
agreement to exercise the voting, consenting, or other rights in 3,667
respect of the deposited shares or to act as depositary 3,668
thereunder. 3,669
(E) An executed counterpart of the agreement may be filed 3,671
with the secretary of the corporation, and upon such filing shall 3,672
be open to inspection by any shareholder at the office of the 3,673
corporation at all reasonable times. 3,674
(F) The certificates for shares so deposited may be 3,676
surrendered to and canceled by the issuing corporation, and if 3,677
this is done new certificates therefor shall be issued by the 3,678
corporation in the names of the trustees or of such persons as 3,679
are designated by or pursuant to the agreement, as specified in a 3,680
writing signed by the trustees and delivered to the issuing 3,681
corporation. The new certificates shall be delivered to the 3,682
trustees, or to any depositary, as the trustees may direct. The 3,683
new certificates shall be issued in such manner that it shall 3,684
appear that they are issued pursuant to the agreement, and in the 3,685
entry of ownership in the proper books of the corporation that 3,686
fact shall also be noted. 3,687
If the corporation has elected to issue uncertificated 3,689
securities, shares in uncertificated form may be deposited, with 3,690
the effect provided by division (A) of this section, by 3,691
registration in the name of the trustee or trustees or of such 3,692
persons as are designated by or pursuant to the agreement, in 3,693
accordance with sections 1308.01 to 1308.44 CHAPTER 1308. of the 3,695
Revised Code.
(G) Shares issued by a foreign corporation may be made the 3,697
subject of an agreement under this section. 3,698
(H) The rights conferred by this section are in addition 3,700
to rights at common law, and no limitation established by this 3,701
section shall limit rights at common law. 3,702
86
(I) Any such agreement shall be conclusively deemed to 3,704
have been made under the common law, and not under this section, 3,705
if the agreement so states. 3,706
Sec. 1701.591. (A) In order to qualify as a close 3,715
corporation agreement under this section, the agreement shall 3,716
meet the following requirements: 3,717
(1) Every person who is a shareholder of the corporation 3,719
at the time of the agreement's adoption, whether or not entitled 3,720
to vote, shall have assented to the agreement in writing; 3,721
(2) The agreement shall be set forth in the articles, the 3,723
regulations, or another written instrument; 3,724
(3) The agreement shall include a statement that it is to 3,726
be governed by this section. 3,727
(B) A close corporation agreement that is not set forth in 3,729
the articles or the regulations shall be entered in the record of 3,730
minutes of the proceedings of the shareholders of the corporation 3,731
and shall be subject to the provisions of division (C) of section 3,732
1701.92 of the Revised Code. 3,733
(C) Irrespective of any other provisions of this chapter, 3,735
but subject to division (D)(2) of this section, a close 3,736
corporation agreement may contain provisions, which shall be 3,737
binding on the corporation and all of its shareholders, 3,738
regulating any aspect of the internal affairs of the corporation 3,739
or the relations of the shareholders among themselves, including 3,740
the following: 3,741
(1) Regulation of the management of the business and 3,743
affairs of the corporation; 3,744
(2) The right of one or more shareholders to dissolve the 3,746
corporation at will or on the occurrence of a specified event or 3,747
contingency; 3,748
(3) The obligation to vote the shares of a person as 3,750
specified, or voting requirements, including the requirement of 3,751
the affirmative vote or approval of all shareholders or of all 3,752
directors, which voting requirements need not appear in the 3,753
87
articles unless the close corporation agreement is set forth in 3,754
the articles; 3,755
(4) The designation of the persons who shall be the 3,757
officers or directors of the corporation; 3,758
(5) The authority of any individual who holds more than 3,760
one office of the corporation to execute, acknowledge, or certify 3,761
in more than one capacity any instrument required to be executed, 3,762
acknowledged, or certified by the holders of two or more offices; 3,763
(6) The terms and conditions of employment of an officer 3,765
or employee of the corporation without regard to the period of 3,766
his employment; 3,767
(7) The declaration and payment of dividends or 3,769
distributions or the division of profits; 3,770
(8) Elimination of the board of directors, restrictions 3,772
upon the exercise by directors of their authority, or delegation 3,773
to one or more shareholders or other persons of all or part of 3,774
the authority of the directors; 3,775
(9) Conferring on any shareholder or his agent OF A 3,777
SHAREHOLDER the absolute right, without the necessity of stating 3,778
any purpose, to examine and copy during usual business hours any 3,779
of the corporation's records or documents to which reference is 3,780
made in section 1701.37 of the Revised Code; 3,781
(10) Prohibition of or limitation upon the issuance or 3,783
sale by the corporation of any of its shares, including treasury 3,784
shares, without the affirmative vote or approval of the holders 3,785
of all or a proportion of the outstanding shares or unless other 3,786
specified terms and conditions are met; 3,787
(11) Arbitration of issues on which the shareholders are 3,789
deadlocked in voting power or on which the directors or other 3,790
parties managing the corporation are deadlocked; 3,791
(12) Dispensing with the annual meeting of shareholders 3,793
unless a shareholder, by written notice to the president or 3,794
secretary either by personal delivery or by mail within thirty 3,795
days after the end of the most recent fiscal year of the 3,796
88
corporation, requests that the meeting be held. 3,797
(D) Except as may be necessary to give effect to divisions 3,799
(C)(3), (5), (8), (9), and (12) and division (I) of this section, 3,800
any provision of a close corporation agreement that does either 3,801
of the following shall be invalid: 3,802
(1) Eliminates the filing with the secretary of state of 3,804
any document required under this chapter or changes the required 3,805
form or content of the document; 3,806
(2) Waives or alters the effect of any of the provisions 3,808
of section 1701.03, 1701.18, 1701.24, 1701.25, 1701.30, 1701.31, 3,809
1701.32, 1701.33, 1701.35, 1701.37, 1701.38, 1701.39, 1701.591, 3,810
1701.91, 1701.93, 1701.94, 1701.95, or the first sentence of 3,811
section 1701.64 of the Revised Code. 3,812
Unless otherwise provided in the close corporation 3,814
agreement, the invalidity of a provision pursuant to this 3,815
division does not affect the validity of the remainder of the 3,816
agreement. 3,817
Any certificate that is required to be filed with the 3,819
secretary of state with respect to the authorization or taking of 3,820
any action pursuant to a close corporation agreement that would 3,821
not be permitted under this chapter in the absence of division 3,822
(C) of this section shall recite the existence of a close 3,823
corporation agreement that authorizes the action. 3,824
(E)(1) Except as provided in division (E)(2) of this 3,826
section, a close corporation agreement may be amended or 3,827
terminated by the affirmative vote or written consent of the 3,828
holders, then parties to the close corporation agreement, of all 3,829
of the outstanding shares of each class or, as may be provided by 3,830
the close corporation agreement, of the holders, then parties to 3,831
the close corporation agreement, of a proportion of not less than 3,832
four-fifths of the outstanding shares of each class. If a close 3,833
corporation agreement is amended or terminated by the written 3,834
consent of the holders of fewer than all of the shares, the 3,835
secretary of the corporation shall mail a copy of the amendment 3,836
89
or a notice of the termination to each shareholder who did not so 3,837
consent. If a close corporation agreement set forth in the 3,838
articles is amended, the amendment shall not be effective unless 3,839
it is filed as an amendment to the articles pursuant to section 3,840
1701.73 of the Revised Code. No corporation with respect to 3,841
which a close corporation agreement is in effect shall cause to 3,842
occur any of the actions described in division (I)(1)(a), (b), or 3,843
(c) of this section unless the action has been authorized by the 3,844
affirmative vote or written consent of the holders, then parties 3,845
to the close corporation agreement, of that proportion of shares 3,846
of each class that is required to terminate the close corporation 3,847
agreement. 3,848
(2) A close corporation agreement that was in existence on 3,850
December 31, 1993, and that did not specify on that date and that 3,851
has not specified since that date the proportion of shares 3,852
required to amend or terminate the close corporation agreement 3,853
may be amended or terminated by the affirmative vote or written 3,854
consent of the holders, then parties to the close corporation 3,855
agreement, of four-fifths of the outstanding shares of each 3,856
class. 3,857
(F) No close corporation agreement is invalid among the 3,859
parties or in respect of the corporation on any of the following 3,860
grounds: 3,861
(1) The agreement is an attempt to treat the corporation 3,863
as if it were a partnership or to arrange the relationship of the 3,864
parties in a manner that would be appropriate only among 3,865
partners; 3,866
(2) The agreement provides for the conduct of the affairs 3,868
of a corporation or relations among shareholders in any manner 3,869
that would be inappropriate or unlawful under provisions of this 3,870
chapter other than those set forth in division (D)(2) of this 3,871
section or under other applicable law; 3,872
(3) The agreement interferes with the authority or 3,874
discretion of the directors; 3,875
90
(4) The agreement has not been filed with the minutes as 3,877
required by division (B) of this section. 3,878
(G) If a close corporation agreement provides that there 3,880
shall be no board of directors, both of the following apply: 3,881
(1) The shareholders, for the purposes of any statute or 3,883
rule of law relating to corporations, are deemed to be the 3,884
directors and to have all of the liabilities, immunities, 3,885
defenses, and indemnifications of directors with respect to any 3,886
action or inaction of the corporation, except that any 3,887
shareholder who is not permitted by the articles, the 3,888
regulations, or the close corporation agreement to vote on or 3,889
assent to an action or assent to an inaction shall not be liable 3,890
as a director with respect to the action or inaction. 3,891
(2) Except to the extent that the voting rights of the 3,893
shares of a class are increased, limited, or denied by the 3,894
articles, the regulations, or the close corporation agreement, 3,895
each outstanding share regardless of class shall entitle its 3,896
holder to one vote on each matter, including any matter normally 3,897
voted on by directors, that is properly submitted to the 3,898
shareholders for their vote, consent, waiver, release, or other 3,899
action. 3,900
(H) The existence of a close corporation agreement shall 3,902
be noted conspicuously on the face or the back of every 3,903
certificate for shares of the corporation and a purchaser or 3,904
transferee of shares represented by a certificate on which such a 3,905
notation so appears shall be conclusively considered to have 3,906
taken delivery with notice of the close corporation agreement. 3,907
Any transferee of shares by gift, bequest, or inheritance and any 3,908
purchaser or transferee of shares with knowledge or notice of a 3,909
close corporation agreement is bound by the agreement and shall 3,910
be considered to be a party to the agreement. 3,911
(I)(1) A close corporation agreement becomes invalid under 3,913
any of the following circumstances: 3,914
(a) Shares of the corporation are listed on a national 3,916
91
securities exchange. 3,917
(b) Shares of the corporation are registered under section 3,919
12(g) of the "Securities Exchange Act of 1934," 48 Stat. 892, 15 3,920
U.S.C. 781, as amended. 3,921
(c) Shares of the corporation have been included in a 3,923
registration statement that has become effective pursuant to the 3,924
"Securities Act of 1933," 84 Stat. 74, 15 U.S.C. 77a-77aa, and 3,925
the corporation is required to file periodic reports and 3,926
information pursuant to section 15(d) of the "Securities Exchange 3,927
Act of 1934," 48 Stat. 892, 15 U.S.C. 77m, as amended. 3,928
(d) Shares of the corporation are transferred or issued to 3,930
a person who takes delivery of the certificate for the shares 3,931
other than by gift, bequest, or inheritance and without knowledge 3,932
or notice of the close corporation agreement; that person 3,933
delivers to the corporation a written rejection of the close 3,934
corporation agreement within ninety days after the date on which 3,935
that person first received notice of the existence of the close 3,936
corporation agreement or within three years of the date of 3,937
transfer or issuance, whichever is earlier; and the corporation 3,938
does not offer in writing, within thirty days after the date on 3,939
which the corporation received the written rejection, to purchase 3,940
the shares from that person for the full amount paid for the 3,941
shares, or, having made an offer to purchase the shares for that 3,942
amount, the corporation, upon that person's acceptance of the 3,943
offer, does not purchase the shares in accordance with division 3,944
(I)(3) of this section. 3,945
(2) A close corporation agreement does not become invalid 3,947
and the person to whom the shares are transferred or issued is 3,948
not entitled to any payment from the corporation pursuant to 3,949
division (I)(3) of this section if both of the following apply: 3,950
(a) Shares of the corporation are transferred or issued to 3,952
a person who takes delivery of the certificate for the shares 3,953
other than by gift, bequest, or inheritance and without knowledge 3,954
or notice of the close corporation agreement; 3,955
92
(b) That person does either of the following: 3,957
(i) Fails to deliver a written rejection of the close 3,959
corporation agreement to the corporation within ninety days after 3,960
the date on which that person first received notice of the 3,961
existence of the close corporation agreement or within three 3,962
years of the date of transfer or issuance, whichever is earlier; 3,963
(ii) Fails, within thirty days after the date on which 3,965
that person receives a written offer by the corporation to 3,966
purchase the shares from that person for the full amount paid for 3,967
the shares, to accept the offer. 3,968
(3) If shares of a corporation are transferred or issued 3,970
to a person who takes delivery of the certificate for the shares 3,971
other than by gift, bequest, or inheritance and without knowledge 3,972
or notice of the close corporation agreement and that person 3,973
accepts an offer by the corporation to purchase the shares, the 3,974
corporation shall pay to that person the full amount paid for the 3,975
shares within seven days after that person delivers to the 3,976
corporation the certificate for the shares and proof of payment 3,977
of the amount paid for the shares. If the amount paid for the 3,978
shares included property other than cash, the corporation, at its 3,979
option, may return the property to that person or may pay to that 3,980
person cash in an amount equal to the fair market value of the 3,981
property on the date of transfer or issuance of the shares, as 3,982
determined in good faith by the corporation. A shareholder who 3,983
transfers shares to a person who takes delivery of the 3,984
certificate for the shares other than by gift, bequest, or 3,985
inheritance and without knowledge or notice of the close 3,986
corporation agreement is liable to the corporation, upon the 3,987
corporation's written demand made upon the shareholder within 3,988
ninety days after the date on which the corporation made payment 3,989
for the shares, for the full amount that the corporation paid for 3,990
the shares. Upon receiving payment in that amount from the 3,991
shareholder, the corporation shall transfer the shares to the 3,992
shareholder. 3,993
93
(4) In the event of the invalidity of a close corporation 3,995
agreement and unless otherwise provided in the close corporation 3,996
agreement, any provision contained in the close corporation 3,997
agreement that would not be invalid under any other section of 3,998
this chapter or under other applicable law remains valid and 3,999
binding on the parties to the close corporation agreement. 4,000
Any officer of the corporation who learns of the occurrence 4,002
of any event causing the invalidity of the close corporation 4,003
agreement shall immediately give written notice of the invalidity 4,004
to all of the shareholders. 4,005
If a close corporation agreement set forth in the articles 4,007
of the corporation is terminated or becomes invalid, the officers 4,008
of the corporation shall promptly sign and file the certificate 4,009
of amendment prescribed by section 1701.73 of the Revised Code, 4,010
setting forth the reason for the termination or invalidity and 4,011
deleting the close corporation agreement from the articles. If 4,012
the officers fail to execute and file the certificate within 4,013
thirty days after the occurrence of the event giving rise to the 4,014
termination or invalidity, the certificate may be signed and 4,015
filed by any shareholder and shall set forth a statement that the 4,016
person signing the certificate is a shareholder and is filing the 4,017
certificate because of the failure of the officers to do so. 4,018
(J) A close corporation agreement, in the sound discretion 4,020
of a court exercising its equity powers, is enforceable by 4,021
injunction, specific performance, or other relief that the court 4,022
may determine to be fair and appropriate. 4,023
(K) This section shall not be construed as prohibiting any 4,025
other lawful agreement among two or more shareholders. 4,026
(L) No corporation with respect to which a close 4,028
corporation agreement is in effect, shall issue shares in 4,029
uncertificated form, and any resolution of the directors of such 4,030
a corporation, providing for the issuance of shares in 4,031
uncertificated form, shall be ineffective during any period in 4,032
which a close corporation agreement is in effect. The adoption 4,033
94
of a close corporation agreement shall act as a transfer 4,034
instruction to the corporation to replace uncertificated 4,035
securities with appropriate certificated securities in accordance 4,036
with division (C) of section 1308.43 of the Revised Code. 4,037
(M) If the annual meeting of the shareholders is dispensed 4,039
with in accordance with a provision in the close corporation 4,040
agreement authorized by division (C)(12) of this section, the 4,041
annual financial statements required by section 1701.38 of the 4,042
Revised Code shall be delivered to each shareholder on or before 4,043
the last date upon which the annual meeting otherwise could have 4,044
been held. 4,045
(N) The amendments to this section that are effective 4,047
April 4, 1985, are remedial in nature and apply to all close 4,048
corporation agreements created on or after November 17, 1981. The 4,050
amendments to this section that are effective December 31, 1993, 4,051
are remedial in nature and, except as those amendments otherwise 4,052
provide, apply to all close corporation agreements created on or 4,053
after November 17, 1981.
Sec. 3901.51. As used in sections 3901.51 to 3901.55 of 4,062
the Revised Code: 4,063
(A) "Clearing corporation" has the same meaning as in 4,065
division (C) of section 1308.01 of the Revised Code, except that 4,066
with respect to securities issued by institutions organized or 4,067
existing under the laws of any foreign country or securities used 4,068
to meet the deposit requirements pursuant to the laws of a 4,069
foreign country as a condition of doing business in that country, 4,070
"clearing corporation" includes a corporation that is organized 4,071
or existing under the laws of any foreign country and is legally 4,072
qualified under those laws to effect transactions in securities 4,073
by computerized book-entry. 4,074
(B) "Direct participant" means a bank, trust company, or 4,076
other entity that maintains an account in its name in a clearing 4,077
corporation and through which an insurance company participates 4,078
in a clearing corporation. 4,079
95
(C) "Federal reserve book-entry system" means the 4,081
computerized systems sponsored by the United States department of 4,082
the treasury and agencies and instrumentalities of the United 4,083
States for holding and transferring securities of the United 4,084
States government and agencies and instrumentalities in federal 4,085
reserve banks through banks that are members of the federal 4,086
reserve system or that otherwise have access to these 4,087
computerized systems. 4,088
(D) "Member bank" means a national or state bank or a 4,090
trust company that is a member of the federal reserve system and 4,091
through which an insurance company participates in the federal 4,092
reserve book-entry system. 4,093
(E) "Provisions of the insurance laws of this state" means 4,095
provisions of Title XXXIX of the Revised Code related to the 4,096
deposit of securities for the benefit and security of 4,097
policyholders, and includes, but is not limited to, sections 4,098
3901.18, 3903.73, 3905.24, 3905.25, 3905.41, 3907.07, 3909.03, 4,099
3909.09, 3909.17, 3913.01, 3913.04, 3919.13, 3919.36, 3919.37, 4,100
3919.41, 3925.07, 3927.02, 3927.06, 3929.01, 3929.07, 3929.08, 4,101
3929.09, 3929.10, 3929.11, 3941.30, 3941.31, 3941.32, 3941.33, 4,102
3941.34, 3941.42, 3953.06, 3953.11, and 3957.03 of the Revised 4,103
Code.
(F) "Securities" has the same meaning as in division 4,105
(A)(3) of section 1308.01 of the Revised Code. 4,106
Section 2. That existing sections 1301.05, 1301.12, 4,108
1303.02, 1304.01, 1304.02, 1305.10, 1305.13, 1308.03, 1308.04, 4,109
1308.08, 1308.09, 1308.10, 1308.11, 1308.12, 1308.13, 1308.14, 4,110
1308.15, 1308.16, 1308.17, 1308.22, 1308.31, 1308.37, 1308.38, 4,111
1308.41, 1308.42, 1309.01, 1309.03, 1309.14, 1309.20, 1309.21, 4,112
1309.22, 1309.23, 1309.24, 1309.25, 1309.28, 1309.31, 1701.24, 4,113
1701.25, 1701.27, 1701.49, 1701.591, and 3901.51 and sections 4,114
1308.01, 1308.02, 1308.05, 1308.06, 1308.07, 1308.18, 1308.19, 4,115
1308.20, 1308.21, 1308.23, 1308.24, 1308.25, 1308.26, 1308.27, 4,116
1308.28, 1308.32, 1308.33, 1308.34, 1308.35, 1308.36, 1308.39, 4,117
96
1308.40, 1308.43, and 1308.44 of the Revised Code are hereby 4,118
repealed.
Section 3. Sections 1 and 2 of this act shall take effect 4,120
on January 1, 1998.
Section 4. (A) Sections 1 and 2 of this act do not affect 4,122
an action or proceeding commenced before this act takes effect. 4,123
(B) If a security interest in a security is perfected at 4,125
the date this act takes effect, and the action by which the 4,126
security interest was perfected would suffice to perfect a 4,128
security interest under this act, no further action is required 4,129
to continue perfection. If a security interest in a security is
perfected at the date this act takes effect but the action by 4,130
which the security interest was perfected would not suffice to 4,131
perfect a security interest under this act, the security interest 4,132
remains perfected for a period of four months after the effective 4,133
date and continues perfected thereafter if appropriate action to 4,134
perfect under this act is taken within that period. If a 4,135
security interest is perfected at the date this act takes effect
and the security interest can be perfected by filing under this 4,136
act, a financing statement signed by the secured party instead of 4,137
the debtor may be filed within that period to continue perfection 4,138
or thereafter to perfect.