                                 CODE OF VIRGINIA

WHETHER ENDORSEMENT, INSTRUCTION OR ENTITLEMENT ORDER IS EFFECTIVE (§ 8.8A-107)

a. &#8220;Appropriate person&#8221; means:

   1. with respect to an endorsement, the person specified by a security
   certificate or by an effective special endorsement to be entitled to the
   security;

   2. with respect to an instruction, the registered owner of an uncertificated
   security;

   3. with respect to an entitlement order, the entitlement holder;

   4. if the person designated in paragraph (1), (2), or (3) is deceased, the
   designated person&#8217;s successor taking under other law or the designated
   person&#8217;s personal representative acting for the estate of the decedent;
   or

   5. if the person designated in paragraph (1), (2), or (3) lacks capacity, the
   designated person&#8217;s guardian, conservator, or other similar
   representative who has power under other law to transfer the security or
   financial asset.

b. An endorsement, instruction, or entitlement order is effective if:

   1. it is made by the appropriate person;

   2. it is made by a person who has power under the law of agency to transfer
   the security or financial asset on behalf of the appropriate person,
   including, in the case of an instruction or entitlement order, a person who
   has control under &#xA7; 8.8A-106 (c) (2) or (d) (2); or

   3. the appropriate person has ratified it or is otherwise precluded from
   asserting its ineffectiveness.

c. An endorsement, instruction, or entitlement order made by a representative is
effective even if:

   1. the representative has failed to comply with a controlling instrument or
   with the law of the state having jurisdiction of the representative
   relationship, including any law requiring the representative to obtain court
   approval of the transaction; or

   2. the representative&#8217;s action in making the endorsement, instruction,
   or entitlement order or using the proceeds of the transaction is otherwise a
   breach of duty.

d. If a security is registered in the name of or specially endorsed to a person
described as a representative, or if a securities account is maintained in the
name of a person described as a representative, an endorsement, instruction, or
entitlement order made by the person is effective even though the person is no
longer serving in the described capacity.

e. Effectiveness of an endorsement, instruction, or entitlement order is
determined as of the date the endorsement, instruction, or entitlement order is
made, and an endorsement, instruction, or entitlement order does not become
ineffective by reason of any later change of circumstances.

HISTORY: 1996, c. 216.