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.
The Hawaii Lock Box Agreement is a cash management system with lenders that allows for secure and efficient handling of funds in Hawaii. This agreement is designed to streamline the payment process between borrowers and lenders, ensuring timely and accurate processing of cash flows. With the use of a lock box arrangement, lenders can gain better control over their cash positions, maximize collections, and improve overall cash management. In a Hawaii Lock Box Agreement, the borrower's payments, whether it is rent, loan repayments, or other receivables, are redirected to a designated lock box maintained by a third-party financial institution. The funds received in the lock box are promptly collected, processed, and deposited into the lender's account. This arrangement essentially eliminates the need for the lender to handle and process payments directly, reducing operational costs and increasing efficiency. There are different types of Hawaii Lock Box Agreement as Cash Management System with Lenders based on the specific needs and requirements of the lender. Some key variations include: 1. Traditional Lock Box: This is the standard lock box arrangement, where all incoming payments are sent to a central lock box for processing. The lender gains complete control over the collections, allowing for consolidated management of funds. 2. Remote Lock Box: With a remote lock box, the lender sets up lock boxes at various locations, which are closer to the borrower's source of payments. This regional distribution of lock boxes ensures faster processing and reduced transit times, especially for borrowers located in different parts of Hawaii. 3. Advanced Lock Box: An advanced lock box system incorporates technology-driven solutions to enhance cash management. It may include features like automated capture of payment data, electronic remittance advice, and real-time reporting, providing lenders with comprehensive visibility and control over their cash flows. 4. Escrow Lock Box: In certain cases, lenders may require an escrow lock box arrangement where funds received are held in escrow until specific conditions are met. This ensures compliance with legal or contractual obligations, such as appropriate tax payments or agreed-upon disbursements. 5. E-commerce Lock Box: As the landscape of payments evolves, some lenders may opt for an e-commerce lock box system. This system is designed to handle online payments, integrating with online platforms and payment gateways to process digital transactions efficiently. In summary, a Hawaii Lock Box Agreement is a cash management system that allows lenders to streamline their payment processing by redirecting borrower payments to a designated lock box. By leveraging this arrangement, lenders can improve cash management, maximize collections, and reduce operational costs. Different types of lock box agreements cater to specific needs, such as traditional lock boxes, remote lock boxes, advanced lock box systems, escrow lock boxes, and e-commerce lock boxes.The Hawaii Lock Box Agreement is a cash management system with lenders that allows for secure and efficient handling of funds in Hawaii. This agreement is designed to streamline the payment process between borrowers and lenders, ensuring timely and accurate processing of cash flows. With the use of a lock box arrangement, lenders can gain better control over their cash positions, maximize collections, and improve overall cash management. In a Hawaii Lock Box Agreement, the borrower's payments, whether it is rent, loan repayments, or other receivables, are redirected to a designated lock box maintained by a third-party financial institution. The funds received in the lock box are promptly collected, processed, and deposited into the lender's account. This arrangement essentially eliminates the need for the lender to handle and process payments directly, reducing operational costs and increasing efficiency. There are different types of Hawaii Lock Box Agreement as Cash Management System with Lenders based on the specific needs and requirements of the lender. Some key variations include: 1. Traditional Lock Box: This is the standard lock box arrangement, where all incoming payments are sent to a central lock box for processing. The lender gains complete control over the collections, allowing for consolidated management of funds. 2. Remote Lock Box: With a remote lock box, the lender sets up lock boxes at various locations, which are closer to the borrower's source of payments. This regional distribution of lock boxes ensures faster processing and reduced transit times, especially for borrowers located in different parts of Hawaii. 3. Advanced Lock Box: An advanced lock box system incorporates technology-driven solutions to enhance cash management. It may include features like automated capture of payment data, electronic remittance advice, and real-time reporting, providing lenders with comprehensive visibility and control over their cash flows. 4. Escrow Lock Box: In certain cases, lenders may require an escrow lock box arrangement where funds received are held in escrow until specific conditions are met. This ensures compliance with legal or contractual obligations, such as appropriate tax payments or agreed-upon disbursements. 5. E-commerce Lock Box: As the landscape of payments evolves, some lenders may opt for an e-commerce lock box system. This system is designed to handle online payments, integrating with online platforms and payment gateways to process digital transactions efficiently. In summary, a Hawaii Lock Box Agreement is a cash management system that allows lenders to streamline their payment processing by redirecting borrower payments to a designated lock box. By leveraging this arrangement, lenders can improve cash management, maximize collections, and reduce operational costs. Different types of lock box agreements cater to specific needs, such as traditional lock boxes, remote lock boxes, advanced lock box systems, escrow lock boxes, and e-commerce lock boxes.
