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 Virgin Islands Lock Box Agreement is a cash management system that allows lenders to have control over receivables generated by borrowers located in the Virgin Islands. This agreement ensures that the lender has a secure method of collecting payments and managing cash flow from these borrowers. Under this agreement, borrowers are required to establish a designated lock box account at a financial institution approved by the lender. The purpose of this account is to receive payments from customers or clients of the borrower. The lender then has access to these funds and can use them to repay the loan or to cover other associated expenses. The Virgin Islands Lock Box Agreement provides a level of assurance to lenders that they will receive timely and accurate payments from borrowers, reducing the risk of default. This cash management system streamlines the collection process, avoids delays in transferring funds, and improves overall cash flow management for both borrowers and lenders. There are different types of Virgin Islands Lock Box Agreement as Cash Management Systems with Lenders depending on the specific requirements or preferences of the lender. Some variations include: 1. Standard Virgin Islands Lock Box Agreement: This is the basic agreement where borrowers are required to deposit all payments received from their customers into a designated lock box account. 2. Advanced Virgin Islands Lock Box Agreement: In addition to the standard requirements, this type of agreement may incorporate advanced features such as electronic payment processing, automated reconciliation, and reporting capabilities. 3. Escrow Virgin Islands Lock Box Agreement: This agreement is commonly used in real estate transactions. It involves the establishment of an escrow account where funds from the sale or rental of properties are held until certain conditions are met. Once these conditions are fulfilled, the lender can access the funds for repayment. 4. Multi-Lender Virgin Islands Lock Box Agreement: This type of agreement is designed for situations where multiple lenders are involved in a financing arrangement. It ensures that each lender receives its respective share of the funds collected, based on their agreed-upon terms. In summary, the Virgin Islands Lock Box Agreement as a cash management system with lenders provides a mechanism for secure and efficient payment collection for borrowers operating in the Virgin Islands. The flexibility of the agreement allows for variations based on the needs and preferences of both borrowers and lenders.The Virgin Islands Lock Box Agreement is a cash management system that allows lenders to have control over receivables generated by borrowers located in the Virgin Islands. This agreement ensures that the lender has a secure method of collecting payments and managing cash flow from these borrowers. Under this agreement, borrowers are required to establish a designated lock box account at a financial institution approved by the lender. The purpose of this account is to receive payments from customers or clients of the borrower. The lender then has access to these funds and can use them to repay the loan or to cover other associated expenses. The Virgin Islands Lock Box Agreement provides a level of assurance to lenders that they will receive timely and accurate payments from borrowers, reducing the risk of default. This cash management system streamlines the collection process, avoids delays in transferring funds, and improves overall cash flow management for both borrowers and lenders. There are different types of Virgin Islands Lock Box Agreement as Cash Management Systems with Lenders depending on the specific requirements or preferences of the lender. Some variations include: 1. Standard Virgin Islands Lock Box Agreement: This is the basic agreement where borrowers are required to deposit all payments received from their customers into a designated lock box account. 2. Advanced Virgin Islands Lock Box Agreement: In addition to the standard requirements, this type of agreement may incorporate advanced features such as electronic payment processing, automated reconciliation, and reporting capabilities. 3. Escrow Virgin Islands Lock Box Agreement: This agreement is commonly used in real estate transactions. It involves the establishment of an escrow account where funds from the sale or rental of properties are held until certain conditions are met. Once these conditions are fulfilled, the lender can access the funds for repayment. 4. Multi-Lender Virgin Islands Lock Box Agreement: This type of agreement is designed for situations where multiple lenders are involved in a financing arrangement. It ensures that each lender receives its respective share of the funds collected, based on their agreed-upon terms. In summary, the Virgin Islands Lock Box Agreement as a cash management system with lenders provides a mechanism for secure and efficient payment collection for borrowers operating in the Virgin Islands. The flexibility of the agreement allows for variations based on the needs and preferences of both borrowers and lenders.
