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.
Contra Costa California Lock Box Agreement is a cash management system specifically designed for lenders operating in Contra Costa County, California. It is a legally binding contract between the lender and the borrower, establishing a framework for efficient management of loan proceeds and collections. This agreement serves as a mechanism for facilitating disbursements and monitoring loan repayments, ensuring streamlined cash flow management for lenders. By establishing a lock box account, the lender gains control over the borrower's incoming payments, which are directly deposited into the designated account for immediate processing. Under the Contra Costa California Lock Box Agreement, lenders can expect various benefits, such as increased efficiency in fund flow, reduced administrative costs, improved cash flow forecasting, and a strengthened overall loan management process. It offers a seamless method for lenders to receive and process borrower payments, eliminating the need for manual handling and significantly reducing the risk of errors or delays. Different types of Contra Costa California Lock Box Agreements may exist, depending on the specific needs and requirements of the lender and borrower. Some common variations include: 1. Basic Lock Box Agreement: This type of agreement outlines the fundamental provisions for the exchange of loan proceeds and collections between the lender and the borrower. 2. Multi-Party Lock Box Agreement: In cases where multiple lenders are involved in financing a borrower, this agreement allows for the consolidation of all incoming payments into a single lock box account, ensuring efficient distribution among multiple beneficiaries. 3. Electronic Lock Box Agreement: With advancements in technology, lenders and borrowers may opt for an electronic lock box system, enabling electronic fund transfers and digital management of payments, further enhancing the speed and accuracy of cash flow management. 4. Escrow Lock Box Agreement: This variation of the lock box agreement is suitable for specific situations where a third-party escrow agent is involved in handling loan funds, providing an additional layer of security and impartiality. In summary, the Contra Costa California Lock Box Agreement as a cash management system with lenders offers a comprehensive and secure framework for lenders operating in Contra Costa County to efficiently manage loan proceeds and collections. With various types of agreements catering to different circumstances, lenders can optimize their cash flow management, reduce risks, and streamline loan operations.Contra Costa California Lock Box Agreement is a cash management system specifically designed for lenders operating in Contra Costa County, California. It is a legally binding contract between the lender and the borrower, establishing a framework for efficient management of loan proceeds and collections. This agreement serves as a mechanism for facilitating disbursements and monitoring loan repayments, ensuring streamlined cash flow management for lenders. By establishing a lock box account, the lender gains control over the borrower's incoming payments, which are directly deposited into the designated account for immediate processing. Under the Contra Costa California Lock Box Agreement, lenders can expect various benefits, such as increased efficiency in fund flow, reduced administrative costs, improved cash flow forecasting, and a strengthened overall loan management process. It offers a seamless method for lenders to receive and process borrower payments, eliminating the need for manual handling and significantly reducing the risk of errors or delays. Different types of Contra Costa California Lock Box Agreements may exist, depending on the specific needs and requirements of the lender and borrower. Some common variations include: 1. Basic Lock Box Agreement: This type of agreement outlines the fundamental provisions for the exchange of loan proceeds and collections between the lender and the borrower. 2. Multi-Party Lock Box Agreement: In cases where multiple lenders are involved in financing a borrower, this agreement allows for the consolidation of all incoming payments into a single lock box account, ensuring efficient distribution among multiple beneficiaries. 3. Electronic Lock Box Agreement: With advancements in technology, lenders and borrowers may opt for an electronic lock box system, enabling electronic fund transfers and digital management of payments, further enhancing the speed and accuracy of cash flow management. 4. Escrow Lock Box Agreement: This variation of the lock box agreement is suitable for specific situations where a third-party escrow agent is involved in handling loan funds, providing an additional layer of security and impartiality. In summary, the Contra Costa California Lock Box Agreement as a cash management system with lenders offers a comprehensive and secure framework for lenders operating in Contra Costa County to efficiently manage loan proceeds and collections. With various types of agreements catering to different circumstances, lenders can optimize their cash flow management, reduce risks, and streamline loan operations.
