Section 3--206. Effect of Restrictive Indorsement.

(1) No restrictive indorsement prevents further transfer or
negotiation of the instrument.

(2) An intermediary bank, or a payor bank which is not the depositary
bank, is neither given notice nor otherwise affected by a restrictive
indorsement of any person except the bank's immediate transferor or the
person presenting for payment.

(3) Except for an intermediary bank, any transferee under an
indorsement which is conditional or includes the words "for collection",
"for deposit", "pay any bank", or like terms (subparagraphs (a) and (c)
of Section 3--205) must pay or apply any value given by him for or on
the security of the instrument consistently with the indorsement and to
the extent that he does so he becomes a holder for value. In addition
such transferee is a holder in due course if he otherwise complies with
the requirements of Section 3--302 on what constitutes a holder in due
course.

(4) The first taker under an indorsement for the benefit of the
indorser or another person (subparagraph (d) of Section 3--205) must pay
or apply any value given by him for or on the security of the instrument
consistently with the indorsement and to the extent that he does so he
becomes a holder for value. In addition such taker is a holder in due
course if he otherwise complies with the requirements of Section 3--302
on what constitutes a holder in due course. A later holder for value is
neither given notice nor otherwise affected by such restrictive
indorsement unless he has knowledge that a fiduciary or other person has
negotiated the instrument in any transaction for his own benefit or
otherwise in breach of duty (subsection (2) of Section 3--304).