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.
Cook Illinois Lock Box Agreement is a cash management system that allows lenders to have control over funds received by Cook Illinois, a transportation company based in Illinois. This agreement is designed to ensure that lenders have a secure and reliable way to monitor and manage cash flows from the company's business activities. The Cook Illinois Lock Box Agreement provides lenders with a designated lock box account where all incoming funds, such as customer payments and receivables, are deposited. This ensures that the lenders have immediate access to the funds and can closely monitor the cash flow from Cook Illinois. The agreement also includes specific instructions on how the funds should be allocated and used by the company. The Cook Illinois Lock Box Agreement includes various types that cater to different needs and preferences of lenders. These types include: 1. Standard Cook Illinois Lock Box Agreement: This is the basic agreement that outlines the general terms and conditions of the cash management system. It includes provisions for fund allocations, reporting requirements, and the rights and responsibilities of both Cook Illinois and the lenders. 2. Escrow Cook Illinois Lock Box Agreement: In this type of agreement, a portion of the funds received by Cook Illinois is held in an escrow account. The funds in the escrow account can be used to cover any potential risks or liabilities associated with the company's operations. This provides an added layer of protection for the lenders. 3. Collateralized Cook Illinois Lock Box Agreement: This agreement involves the use of collateral, such as assets or securities, to secure the lenders' funds. In case of default or non-payment by Cook Illinois, the lenders have the right to seize the collateral and recover their funds. This type of agreement provides lenders with a higher level of security and minimizes the risk of loss. 4. Restricted Cook Illinois Lock Box Agreement: This agreement restricts the use of funds deposited in the lock box account for specific purposes only. It may specify that the funds can only be used for debt repayment, capital investments, or any other predetermined purpose. This type of agreement allows lenders to have more control over how the funds are utilized by Cook Illinois. Overall, the Cook Illinois Lock Box Agreement serves as an important cash management system that ensures lenders have visibility and control over the company's cash flow. With various types available, lenders can choose the agreement that best fits their requirements and risk tolerance.Cook Illinois Lock Box Agreement is a cash management system that allows lenders to have control over funds received by Cook Illinois, a transportation company based in Illinois. This agreement is designed to ensure that lenders have a secure and reliable way to monitor and manage cash flows from the company's business activities. The Cook Illinois Lock Box Agreement provides lenders with a designated lock box account where all incoming funds, such as customer payments and receivables, are deposited. This ensures that the lenders have immediate access to the funds and can closely monitor the cash flow from Cook Illinois. The agreement also includes specific instructions on how the funds should be allocated and used by the company. The Cook Illinois Lock Box Agreement includes various types that cater to different needs and preferences of lenders. These types include: 1. Standard Cook Illinois Lock Box Agreement: This is the basic agreement that outlines the general terms and conditions of the cash management system. It includes provisions for fund allocations, reporting requirements, and the rights and responsibilities of both Cook Illinois and the lenders. 2. Escrow Cook Illinois Lock Box Agreement: In this type of agreement, a portion of the funds received by Cook Illinois is held in an escrow account. The funds in the escrow account can be used to cover any potential risks or liabilities associated with the company's operations. This provides an added layer of protection for the lenders. 3. Collateralized Cook Illinois Lock Box Agreement: This agreement involves the use of collateral, such as assets or securities, to secure the lenders' funds. In case of default or non-payment by Cook Illinois, the lenders have the right to seize the collateral and recover their funds. This type of agreement provides lenders with a higher level of security and minimizes the risk of loss. 4. Restricted Cook Illinois Lock Box Agreement: This agreement restricts the use of funds deposited in the lock box account for specific purposes only. It may specify that the funds can only be used for debt repayment, capital investments, or any other predetermined purpose. This type of agreement allows lenders to have more control over how the funds are utilized by Cook Illinois. Overall, the Cook Illinois Lock Box Agreement serves as an important cash management system that ensures lenders have visibility and control over the company's cash flow. With various types available, lenders can choose the agreement that best fits their requirements and risk tolerance.
