New Jersey § 12a:8-403

§ 12a:8-403.

a. 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. b. 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: (1) the certificated security has been presented for registration of transfer or the

instruction for registration of transfer of the uncertificated security has been received; (2) a demand that the issuer not register transfer had previously been received;

and (3) 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. c. The period described in paragraph (3) of subsection b. of this section may not

exceed 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. d. 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 initiated

the demand does not, within the time stated in the issuer's communication, either: (1) obtain an appropriate restraining order, injunction, or other process from a court

of competent jurisdiction enjoining the issuer from registering the transfer; or (2) 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. e. This section does not relieve an issuer from liability for registering transfer

pursuant to an indorsement or instruction that was not effective.