Dubious Used Cars received a promissory note from First Auto, Inc., as security for payment of $14000 automobile. When DUC accepted the note, it was aware that the maker of the note, Hawley, Inc., was claiming that the note was unenforceable because Able Co. (the original payee) had breached the contract for which Hawley had given the note. First Auto had acquired the note from Smith in exchange for repairing several cars owned by Smith. At the time First Auto received the note, First Auto was unaware of the dispute between Hawley and Able. Also, Smith, who paid Able $3500 for the note, was unaware of Hawley's allegations that Able had breached the agreement. First Auto is now insolvent and unable to satisfy its obligation to Dubious. Therefore, Dubious has demanded that Hawley pay the $14000, but Hawley has refused, asserting:

a.The note is nonnegotiable because it references the contract and is not payable at a definite time or on demand. b. Dubious is not a holder in due course because it received the note as security for amounts owed by First Auto. c. Dubious is not an HDC because it was aware of the dispute between Hawley and Able. d. Hawley can raise the alleged breach by Able as a defense to payment. e. Dubious has no right to the note because it was not endorsed by Able.

State whether each assertion is correct and give reasons for your conclusion