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.
Dallas Texas Lock Box Agreement is a financial tool that serves as a cash management system between borrowers and lenders. It allows lenders to directly receive and process payments from borrowers, ensuring a smooth and efficient transaction process. The Lock Box Agreement works by setting up a designated lockbox bank account in Dallas, Texas. Borrowers are instructed to send their payments to this account, and the bank acts as a neutral third party, receiving and processing the funds on behalf of the lenders. This arrangement provides a secure and reliable method for lenders to receive payments promptly. There are different types of Dallas Texas Lock Box Agreement as Cash Management System with Lenders, including: 1. Standard Lock Box Agreement: This is the most common type, where borrowers are required to send their payments to a designated lockbox bank account in Dallas, Texas. Upon receipt, the bank processes the payments and provides timely reports to the lenders, allowing them to manage their cash flow efficiently. 2. Controlled Disbursement Lock Box Agreement: In this type of agreement, the lockbox bank also provides controlled disbursement services. Lenders can receive early notifications of incoming payments, allowing them to optimize their cash management strategies. 3. Consolidated Lock Box Agreement: This agreement is suitable for lenders with multiple accounts or branches. Instead of setting up individual lockbox accounts, a consolidated lockbox account is established in Dallas, Texas. All payments from different sources are collected in a single account, simplifying the reconciliation process for the lenders. 4. Public Funds Lock Box Agreement: This type of agreement caters specifically to governmental entities and agencies. The lockbox bank in Dallas, Texas receives payments from taxpayers or other sources, ensuring transparency, accountability, and efficient fund management for the public sector. Overall, the Dallas Texas Lock Box Agreement as a Cash Management System with Lenders provides a reliable and streamlined method for borrowers to make payments and for lenders to receive and process these payments effectively. It minimizes delays and enhances financial control for all parties involved, contributing to efficient cash management practices.Dallas Texas Lock Box Agreement is a financial tool that serves as a cash management system between borrowers and lenders. It allows lenders to directly receive and process payments from borrowers, ensuring a smooth and efficient transaction process. The Lock Box Agreement works by setting up a designated lockbox bank account in Dallas, Texas. Borrowers are instructed to send their payments to this account, and the bank acts as a neutral third party, receiving and processing the funds on behalf of the lenders. This arrangement provides a secure and reliable method for lenders to receive payments promptly. There are different types of Dallas Texas Lock Box Agreement as Cash Management System with Lenders, including: 1. Standard Lock Box Agreement: This is the most common type, where borrowers are required to send their payments to a designated lockbox bank account in Dallas, Texas. Upon receipt, the bank processes the payments and provides timely reports to the lenders, allowing them to manage their cash flow efficiently. 2. Controlled Disbursement Lock Box Agreement: In this type of agreement, the lockbox bank also provides controlled disbursement services. Lenders can receive early notifications of incoming payments, allowing them to optimize their cash management strategies. 3. Consolidated Lock Box Agreement: This agreement is suitable for lenders with multiple accounts or branches. Instead of setting up individual lockbox accounts, a consolidated lockbox account is established in Dallas, Texas. All payments from different sources are collected in a single account, simplifying the reconciliation process for the lenders. 4. Public Funds Lock Box Agreement: This type of agreement caters specifically to governmental entities and agencies. The lockbox bank in Dallas, Texas receives payments from taxpayers or other sources, ensuring transparency, accountability, and efficient fund management for the public sector. Overall, the Dallas Texas Lock Box Agreement as a Cash Management System with Lenders provides a reliable and streamlined method for borrowers to make payments and for lenders to receive and process these payments effectively. It minimizes delays and enhances financial control for all parties involved, contributing to efficient cash management practices.
