KRS 355.8-403: Demand that issuer not register transfer.

(1) A person who is an appropriate person to make an indorsement or originate an

instruction may demand that the issuer not register transfer of a security by

communicating to the issuer a notification that identifies the registered owner and

the issue of which the security is a part and provides an address for communications

directed to the person making the demand. The demand is effective only if it is

received by the issuer at a time and in a manner affording the issuer reasonable

opportunity to act on it.

(2) If a certificated security in registered form is presented to an issuer with a request to

register transfer or an instruction is presented to an issuer with a request to register

transfer of an uncertificated security after a demand that the issuer not register

transfer has become effective, the issuer shall promptly communicate to the person

who initiated the demand at the address provided in the demand and the person who

presented the security for registration of transfer or initiated the instruction

requesting registration of transfer a notification stating that:

(a) The certificated security has been presented for registration of transfer or the

instruction for registration of transfer of the uncertificated security has been

received;

(b) A demand tha t the issuer not register transfer had previously been received;

and

(c) The issuer will withhold registration of transfer for a period of time stated in

the notification in order to provide the person who initiated the demand an

opportunity to obtain legal process or an indemnity bond.

(3) The period described in subsection (2)(c) of this section may not exceed thirty (30)

days after the date of communication of the notification. A shorter period may be

specified by the issuer if it is not manifestly unreasonable.

(4) An issuer is not liable to a person who initiated a demand that the issuer not register

transfer for any loss the person suffers as a result of registration of a transfer

pursuant to an effective indorsement or instruction if the person who in itiated the

demand does not, within the time stated in the issuer's communication, either:

(a) Obtain an appropriate restraining order, injunction, or other process from a

court of competent jurisdiction enjoining the issuer from registering the

transfer; or

(b) File with the issuer an indemnity bond, sufficient in the issuer's judgment to

protect the issuer and any transfer agent, registrar, or other agent of the issuer

involved from any loss it or they may suffer by refusing to register the

transfer.

(5) This section does not relieve an issuer from liability for registering transfer pursuant

to an indorsement or instruction that was not effective.