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.
Bexar Texas Lock Box Agreement as Cash Management System with Lenders is a financial arrangement that facilitates efficient handling of payments between borrowers and lenders. This system involves the use of a lockbox, a secure location where borrowers' payments are directly deposited. The lockbox is typically maintained by a financial institution or a third-party service provider. The purpose of this agreement is to streamline the payment collection process, ensuring that lenders receive their dues promptly and borrowers have a convenient method to fulfill their financial obligations. It also helps prevent any allocation or mishandling of funds, as all payments are routed through a centralized and secure channel. There are various types of Bexar Texas Lock Box Agreements used as Cash Management Systems with Lenders, each catering to specific needs and preferences. Some notable types include: 1. Basic Lock Box Agreement: This is the most common type, where borrowers' payments are deposited into a single lockbox account. The lender can then easily access the funds and apply them to the appropriate loan or debt. 2. Local Lock Box Agreement: In this arrangement, multiple lockbox locations are used to collect payments from borrowers in different regions or localities. This allows faster processing and better accessibility for borrowers, as they can send their payments to a nearby lockbox. 3. Electronic Lock Box Agreement: With advancements in technology, electronic lock boxes have emerged as a popular choice. Under this agreement, borrowers can make electronic payments directly to the lockbox account, eliminating the need for physical checks or cash. 4. Customized Lock Box Agreement: Some lenders may opt for tailored lock box agreements that cater to their unique requirements. This could involve additional features such as payment remittance advice, online payment portals, or integration with existing accounting or loan management systems. Overall, the Bexar Texas Lock Box Agreement as Cash Management System with Lenders provides a secure and efficient way for borrowers to fulfill their financial obligations and for lenders to receive timely payments. It simplifies the payment collection process, reduces the chances of errors or allocations, and ensures a transparent financial transaction between the parties involved.Bexar Texas Lock Box Agreement as Cash Management System with Lenders is a financial arrangement that facilitates efficient handling of payments between borrowers and lenders. This system involves the use of a lockbox, a secure location where borrowers' payments are directly deposited. The lockbox is typically maintained by a financial institution or a third-party service provider. The purpose of this agreement is to streamline the payment collection process, ensuring that lenders receive their dues promptly and borrowers have a convenient method to fulfill their financial obligations. It also helps prevent any allocation or mishandling of funds, as all payments are routed through a centralized and secure channel. There are various types of Bexar Texas Lock Box Agreements used as Cash Management Systems with Lenders, each catering to specific needs and preferences. Some notable types include: 1. Basic Lock Box Agreement: This is the most common type, where borrowers' payments are deposited into a single lockbox account. The lender can then easily access the funds and apply them to the appropriate loan or debt. 2. Local Lock Box Agreement: In this arrangement, multiple lockbox locations are used to collect payments from borrowers in different regions or localities. This allows faster processing and better accessibility for borrowers, as they can send their payments to a nearby lockbox. 3. Electronic Lock Box Agreement: With advancements in technology, electronic lock boxes have emerged as a popular choice. Under this agreement, borrowers can make electronic payments directly to the lockbox account, eliminating the need for physical checks or cash. 4. Customized Lock Box Agreement: Some lenders may opt for tailored lock box agreements that cater to their unique requirements. This could involve additional features such as payment remittance advice, online payment portals, or integration with existing accounting or loan management systems. Overall, the Bexar Texas Lock Box Agreement as Cash Management System with Lenders provides a secure and efficient way for borrowers to fulfill their financial obligations and for lenders to receive timely payments. It simplifies the payment collection process, reduces the chances of errors or allocations, and ensures a transparent financial transaction between the parties involved.
