                                 CODE OF VIRGINIA

EFFECT OF GUARANTEEING SIGNATURE, ENDORSEMENT, OR INSTRUCTION (§ 8.8A-306)

a. A person who guarantees a signature of an endorser of a security certificate
warrants that at the time of signing:

   1. the signature was genuine;

   2. the signer was an appropriate person to endorse, or if the signature is by
   an agent, the agent had actual authority to act on behalf of the appropriate
   person; and

   3. the signer had legal capacity to sign.

b. A person who guarantees a signature of the originator of an instruction
warrants that at the time of signing:

   1. the signature was genuine;

   2. the signer was an appropriate person to originate the instruction, or if
   the signature is by an agent, the agent had actual authority to act on behalf
   of the appropriate person, if the person specified in the instruction as the
   registered owner was, in fact, the registered owner, as to which fact the
   signature guarantor does not make a warranty; and

   3. the signer had legal capacity to sign.

c. A person who specially guarantees the signature of an originator of an
instruction makes the warranties of a signature guarantor under subsection (b)
and also warrants that at the time the instruction is presented to the issuer:

   1. the person specified in the instruction as the registered owner of the
   uncertificated security will be the registered owner; and

   2. the transfer of the uncertificated security requested in the instruction
   will be registered by the issuer free from all liens, security interests,
   restrictions, and claims other than those specified in the instruction.

d. A guarantor under subsections (a) and (b) or a special guarantor under
subsection (c) does not otherwise warrant the rightfulness of the transfer.

e. A person who guarantees an endorsement of a security certificate makes the
warranties of a signature guarantor under subsection (a) and also warrants the
rightfulness of the transfer in all respects.

f. A person who guarantees an instruction requesting the transfer of an
uncertificated security makes the warranties of a special signature guarantor
under subsection (c) and also warrants the rightfulness of the transfer in all
respects.

g. An issuer may not require a special guaranty of signature, a guaranty of
endorsement, or a guaranty of instruction as a condition to registration of
transfer.

h. The warranties under this section are made to a person taking or dealing with
the security in reliance on the guaranty, and the guarantor is liable to the
person for loss resulting from their breach. An endorser or originator of an
instruction whose signature, endorsement, or instruction has been guaranteed is
liable to a guarantor for any loss suffered by the guarantor as a result of
breach of the warranties of the guarantor.

HISTORY: 1996, c. 216.