                                 CODE OF VIRGINIA

PRIORITY OF PURCHASER OF CHATTEL PAPER OR INSTRUMENT (§ 8.9A-330)

a. Purchaser&#8217;s priority; security interest claimed merely as proceeds. A
purchaser of chattel paper has priority over a security interest in the chattel
paper which is claimed merely as proceeds of inventory subject to a security
interest if:

   1. in good faith and in the ordinary course of the purchaser&#8217;s business,
   the purchaser gives new value, takes possession of each authoritative tangible
   copy of the record evidencing the chattel paper, and obtains control under
   &#xA7; 8.9A-105 of each authoritative electronic copy of the record evidencing
   the chattel paper; and

   2. the authoritative copies of the record evidencing the chattel paper do not
   indicate that the chattel paper has been assigned to an identified assignee
   other than the purchaser.

b. Purchaser&#8217;s priority; other security interests. A purchaser of chattel
paper has priority over a security interest in the chattel paper which is
claimed other than merely as proceeds of inventory subject to a security
interest if the purchaser gives new value, takes possession of each
authoritative tangible copy of the record evidencing the chattel paper, and
obtains control under &#xA7; 8.9A-105 of each authoritative electronic copy
evidencing the chattel paper in good faith, in the ordinary course of the
purchaser&#8217;s business, and without knowledge that the purchase violates the
rights of the secured party.

c. Chattel paper purchaser&#8217;s priority in proceeds. Except as otherwise
provided in § 8.9A-327, a purchaser having priority in chattel paper under
subsection (a) or (b) also has priority in proceeds of the chattel paper to the
extent that:

   1. Section 8.9A-322 provides for priority in the proceeds; or

   2. the proceeds consist of the specific goods covered by the chattel paper or
   cash proceeds of the specific goods, even if the purchaser&#8217;s security
   interest in the proceeds is unperfected.

d. Instrument purchaser&#8217;s priority. Except as otherwise provided in &#xA7;
8.9A-331 (a), a purchaser of an instrument has priority over a security interest
in the instrument perfected by a method other than possession if the purchaser
gives value and takes possession of the instrument in good faith and without
knowledge that the purchase violates the rights of the secured party.

e. Holder of purchase-money security interest gives new value. For purposes of
subsections (a) and (b), the holder of a purchase-money security interest in
inventory gives new value for chattel paper constituting proceeds of the
inventory.

f. Indication of assignment gives knowledge. For purposes of subsections (b) and
(d), if the authoritative copies of the record evidencing chattel paper or an
instrument indicate that the chattel paper or instrument has been assigned to an
identified secured party other than the purchaser, a purchaser of the chattel
paper or instrument has knowledge that the purchase violates the rights of the
secured party.

HISTORY: Code 1950, §§ 6-558, 6-559; 1964, c. 219, § 8.9-308; 1973, c. 509;
2000, c. 1007; 2024, c. 652.