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.
Middlesex Massachusetts Lock Box Agreement as Cash Management System with Lenders refers to a specific agreement entered into by financial institutions and lenders in Middlesex County, Massachusetts. This agreement outlines the terms and conditions for managing cash flow and deposit processing through a lock box system. A lock box system is a cash management tool that enables lenders to enhance efficiency in handling incoming payments from borrowers. Under the Middlesex Massachusetts Lock Box Agreement, financial institutions establish lock box accounts where borrowers deposit their payments. These payments are securely collected and processed by the bank on behalf of the lender. By signing this agreement, lenders benefit from a streamlined and automated process for receiving and depositing funds. This system reduces handling time, minimizes the risk of fraud or theft, and improves overall cash flow management. It also offers lenders access to accurate and timely information regarding their cash position, helping them make informed financial decisions. When it comes to different types of Middlesex Massachusetts Lock Box Agreements as Cash Management Systems with Lenders, there can be variations based on the specific requirements and preferences of lenders and financial institutions. Some common variations or features within this agreement may include: 1. Concentration Lock Box: This type of lock box agreement aggregates payments from multiple sources into one central account, allowing lenders to consolidate funds received from different borrowers or sources. 2. Retail Lock Box: This agreement type caters to lenders receiving payments from retail customers. It involves processing a high volume of small-value payments, such as utility bills or credit card payments, providing convenience to customers while ensuring timely funds availability for lenders. 3. Wholesale Lock Box: This variant suits lenders receiving payments from other businesses or commercial clients. It typically involves processing larger-scale payments, such as invoices, contracts, or lease payments, which require more detailed reporting and handling. 4. Remote Deposit Capture (RDC): In some cases, a Middlesex Massachusetts Lock Box Agreement may include RDC capability, allowing lenders to scan and digitally deposit checks or other payment instruments remotely, reducing physical paperwork and enabling faster processing. Overall, the Middlesex Massachusetts Lock Box Agreement as Cash Management System with Lenders is a comprehensive arrangement that aims to provide lenders with an efficient and secure method for collecting and managing borrower payments. It offers flexibility to adapt to the specific needs and nature of the lender's business.Middlesex Massachusetts Lock Box Agreement as Cash Management System with Lenders refers to a specific agreement entered into by financial institutions and lenders in Middlesex County, Massachusetts. This agreement outlines the terms and conditions for managing cash flow and deposit processing through a lock box system. A lock box system is a cash management tool that enables lenders to enhance efficiency in handling incoming payments from borrowers. Under the Middlesex Massachusetts Lock Box Agreement, financial institutions establish lock box accounts where borrowers deposit their payments. These payments are securely collected and processed by the bank on behalf of the lender. By signing this agreement, lenders benefit from a streamlined and automated process for receiving and depositing funds. This system reduces handling time, minimizes the risk of fraud or theft, and improves overall cash flow management. It also offers lenders access to accurate and timely information regarding their cash position, helping them make informed financial decisions. When it comes to different types of Middlesex Massachusetts Lock Box Agreements as Cash Management Systems with Lenders, there can be variations based on the specific requirements and preferences of lenders and financial institutions. Some common variations or features within this agreement may include: 1. Concentration Lock Box: This type of lock box agreement aggregates payments from multiple sources into one central account, allowing lenders to consolidate funds received from different borrowers or sources. 2. Retail Lock Box: This agreement type caters to lenders receiving payments from retail customers. It involves processing a high volume of small-value payments, such as utility bills or credit card payments, providing convenience to customers while ensuring timely funds availability for lenders. 3. Wholesale Lock Box: This variant suits lenders receiving payments from other businesses or commercial clients. It typically involves processing larger-scale payments, such as invoices, contracts, or lease payments, which require more detailed reporting and handling. 4. Remote Deposit Capture (RDC): In some cases, a Middlesex Massachusetts Lock Box Agreement may include RDC capability, allowing lenders to scan and digitally deposit checks or other payment instruments remotely, reducing physical paperwork and enabling faster processing. Overall, the Middlesex Massachusetts Lock Box Agreement as Cash Management System with Lenders is a comprehensive arrangement that aims to provide lenders with an efficient and secure method for collecting and managing borrower payments. It offers flexibility to adapt to the specific needs and nature of the lender's business.
