                                 CODE OF VIRGINIA

UNCONDITIONAL PROMISE OR ORDER (§ 8.3A-106)

a. Except as provided in this section, for the purposes of &#xA7; 8.3A-104 (a),
a promise or order is unconditional unless it states (i) an express condition to
payment, (ii) that the promise or order is subject to or governed by another
writing, or (iii) that rights or obligations with respect to the promise or
order are stated in another writing. A reference to another writing does not of
itself make the promise or order conditional.

b. A promise or order is not made conditional (i) by a reference to another
writing for a statement of rights with respect to collateral, prepayment, or
acceleration, or (ii) because payment is limited to resort to a particular fund
or source.

c. If a promise or order requires, as a condition to payment, a countersignature
by a person whose specimen signature appears on the promise or order, the
condition does not make the promise or order conditional for the purposes of
&#xA7; 8.3A-104 (a). If the person whose specimen signature appears on an
instrument fails to countersign the instrument, the failure to countersign is a
defense to the obligation of the issuer, but the failure does not prevent a
transferee of the instrument from becoming a holder of the instrument.

d. If a promise or order at the time it is issued or first comes into possession
of a holder contains a statement, required by applicable statutory or
administrative law, to the effect that the rights of a holder or transferee are
subject to claims or defenses that the issuer could assert against the original
payee, the promise or order is not thereby made conditional for the purposes of
&#xA7; 8.3 A-104 (a); but if the promise or order is an instrument, there cannot
be a holder in due course of the instrument.

HISTORY: Code 1950, § 6-355; 1964, c. 219, §§ 8.3-105, 8.3-119; 1992, c. 693.