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.
Harris Texas Lock Box Agreement is a specialized cash management system used by lenders to streamline and centralize the collection of funds from borrowers. This arrangement allows lenders to exert more control over the cash flow and ensure timely receipt of payments for loans extended to borrowers. The Harris Texas Lock Box Agreement acts as an intermediary between the borrowers and lenders, serving as a secure location where the borrowers' incoming payments are directed. This Cash Management System essentially functions as a clearinghouse for all financial transactions related to loan repayments. The agreement facilitates the efficient processing of payments by establishing specific guidelines and procedures. Once the borrower's payment is received, it is immediately directly deposited into the designated lockbox account maintained by the Harris Texas Lock Box Agreement. This mechanism allows lenders to have real-time access to the funds, enabling quicker posting of payments and faster availability of funds for reinvestment or debt servicing. Moreover, the Harris Texas Lock Box Agreement as a Cash Management System with Lenders offers heightened security and reduces the risks associated with manual handling of payments. By centralizing the payment collection process, the risk of misplacement, loss, or theft of funds is significantly minimized. Different types of Harris Texas Lock Box Agreements may exist based on the specific requirements of lenders. For instance, there may be variations in terms of the types of loans facilitated, such as commercial loans, mortgage loans, or small business loans. Additionally, the agreement terms may differ in the level of automation and integration with lenders' existing systems. Implementing a Harris Texas Lock Box Agreement as a Cash Management System with Lenders can provide various benefits. These include improved cash flow visibility, reduced administrative costs, enhanced accuracy in payment processing, and increased operational efficiency. Lenders can focus more on their core lending activities, knowing that their cash management process and funds are securely managed by the Harris Texas Lock Box Agreement.Harris Texas Lock Box Agreement is a specialized cash management system used by lenders to streamline and centralize the collection of funds from borrowers. This arrangement allows lenders to exert more control over the cash flow and ensure timely receipt of payments for loans extended to borrowers. The Harris Texas Lock Box Agreement acts as an intermediary between the borrowers and lenders, serving as a secure location where the borrowers' incoming payments are directed. This Cash Management System essentially functions as a clearinghouse for all financial transactions related to loan repayments. The agreement facilitates the efficient processing of payments by establishing specific guidelines and procedures. Once the borrower's payment is received, it is immediately directly deposited into the designated lockbox account maintained by the Harris Texas Lock Box Agreement. This mechanism allows lenders to have real-time access to the funds, enabling quicker posting of payments and faster availability of funds for reinvestment or debt servicing. Moreover, the Harris Texas Lock Box Agreement as a Cash Management System with Lenders offers heightened security and reduces the risks associated with manual handling of payments. By centralizing the payment collection process, the risk of misplacement, loss, or theft of funds is significantly minimized. Different types of Harris Texas Lock Box Agreements may exist based on the specific requirements of lenders. For instance, there may be variations in terms of the types of loans facilitated, such as commercial loans, mortgage loans, or small business loans. Additionally, the agreement terms may differ in the level of automation and integration with lenders' existing systems. Implementing a Harris Texas Lock Box Agreement as a Cash Management System with Lenders can provide various benefits. These include improved cash flow visibility, reduced administrative costs, enhanced accuracy in payment processing, and increased operational efficiency. Lenders can focus more on their core lending activities, knowing that their cash management process and funds are securely managed by the Harris Texas Lock Box Agreement.
