A lock box agreement is a service offered by banks to companies in which the company receives payments by mail to a post office box and the bank picks up the payments several times a day, deposits them into the company's account, and notifies the company of the deposit. This enables the company to put the money to work as soon as it's received, but the amounts must be large in order for the value obtained to exceed the cost of the service.
This lock box agreement is to be used by the collateral agent for a syndicate of banks to receive, control and apply to the Borrower's line of credit, payments made on the debtor's accounts receivable collateral. This agreement when executed, perfects the secured party's security interest in funds in the lock box account by control under Uniform Commercial Code § 9-104(a)(3) by making the agent bank the owner of and party in whose name the account is held. Because the account is controlled by ownership in the name of the secured party, the lock box bank cannot offset claims it has against the debtor against the account as provided in Uniform Commercial Code § 9-340(c). To avoid any doubt on this issue, the lock box bank expressly waives its rights of setoff. On the other hand, the agent bank agrees to indemnify the lock box bank for any unpaid fees or claims concerning the account, in the event the debtor fails to do so.
This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
Florida Lock Box Agreement is a cash management system that provides a secure mechanism for lenders and borrowers to manage funds in the state of Florida. It is a contractual agreement between a borrower and a lender that outlines the procedures for managing cash flow, collections, and disbursements. This system is commonly used in various types of lending arrangements such as mortgage loans, commercial loans, and consumer loans. The Florida Lock Box Agreement serves as a safeguard for lenders by ensuring timely and efficient collection of borrower payments and providing a centralized location for the receipt and processing of funds. The agreement typically requires borrowers to direct their customers or tenants to make payments directly to a designated lock box account, controlled by the lender. There are different types of Florida Lock Box Agreement as Cash Management System with Lenders, namely: 1. Mortgage Lock Box Agreement: This type of agreement specifically applies to mortgage lenders and borrowers. It establishes a process for collecting mortgage payments from borrowers and managing escrow funds for taxes and insurance. 2. Commercial Lock Box Agreement: This agreement is used in commercial lending situations where businesses receive payments from their customers or clients. It ensures that the lender has control over the cash flow generated by the borrower's business. 3. Consumer Lock Box Agreement: This type of agreement is used in consumer lending, where individuals make loan payments to lenders. It allows lenders to efficiently manage the collection and processing of payments for various types of loans, such as personal loans, auto loans, or student loans. 4. Rental Lock Box Agreement: This agreement is specifically designed for rental properties, allowing landlords or property management companies to collect rent payments from tenants and manage the cash flow associated with rental income. Overall, the Florida Lock Box Agreement as a cash management system with lenders provides a structured and secure process for managing funds, ensuring lenders receive timely payments and borrowers have a convenient and transparent method of fulfilling their financial obligations.Florida Lock Box Agreement is a cash management system that provides a secure mechanism for lenders and borrowers to manage funds in the state of Florida. It is a contractual agreement between a borrower and a lender that outlines the procedures for managing cash flow, collections, and disbursements. This system is commonly used in various types of lending arrangements such as mortgage loans, commercial loans, and consumer loans. The Florida Lock Box Agreement serves as a safeguard for lenders by ensuring timely and efficient collection of borrower payments and providing a centralized location for the receipt and processing of funds. The agreement typically requires borrowers to direct their customers or tenants to make payments directly to a designated lock box account, controlled by the lender. There are different types of Florida Lock Box Agreement as Cash Management System with Lenders, namely: 1. Mortgage Lock Box Agreement: This type of agreement specifically applies to mortgage lenders and borrowers. It establishes a process for collecting mortgage payments from borrowers and managing escrow funds for taxes and insurance. 2. Commercial Lock Box Agreement: This agreement is used in commercial lending situations where businesses receive payments from their customers or clients. It ensures that the lender has control over the cash flow generated by the borrower's business. 3. Consumer Lock Box Agreement: This type of agreement is used in consumer lending, where individuals make loan payments to lenders. It allows lenders to efficiently manage the collection and processing of payments for various types of loans, such as personal loans, auto loans, or student loans. 4. Rental Lock Box Agreement: This agreement is specifically designed for rental properties, allowing landlords or property management companies to collect rent payments from tenants and manage the cash flow associated with rental income. Overall, the Florida Lock Box Agreement as a cash management system with lenders provides a structured and secure process for managing funds, ensuring lenders receive timely payments and borrowers have a convenient and transparent method of fulfilling their financial obligations.
