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.
A San Antonio Texas Lock Box Agreement as a cash management system with lenders refers to a financial arrangement between a borrower and a lender. It involves the use of lock boxes, which are secure locations where borrowers' payments are collected by a third-party agent (usually a bank) on behalf of the lender. The purpose of this agreement is to streamline the payment process and improve efficiency for both parties. It ensures that the lender receives timely and accurate payments, while the borrower benefits from a seamless payment process. Keywords: San Antonio Texas, Lock Box Agreement, cash management system, lenders, financial arrangement, secure location, third-party agent, streamline, efficiency, payments, borrower. Types of San Antonio Texas Lock Box Agreement as Cash Management System with Lenders: 1. Traditional Lock Box Agreement: This is the most common type of Lock Box Agreement, where payments are collected via physical checks sent by the borrower. The borrower directs their customers or clients to send payments to a designated lock box address, which is usually maintained by a bank. The bank then collects the checks and forwards them to the lender. 2. Electronic Lock Box Agreement: With advances in technology, electronic lock box agreements have become more popular. Instead of physical checks, borrowers and their customers use electronic payment methods such as Automated Clearing House (ACH) transfers or wire transfers. The lender provides the borrower with specific instructions for directing the payments to the lock box account electronically. The bank acts as an intermediary, collecting and processing electronic payments on behalf of the lender. 3. Online Lock Box Agreement: Online lock box agreements are a modern iteration of the traditional lock box system. Borrowers and their customers utilize an online payment portal or platform to submit payments to a designated lock box account. The online portal is usually provided by the financial institution or a third-party service provider. This type of agreement streamlines the payment process further by providing real-time payment tracking and reporting capabilities. Overall, a San Antonio Texas Lock Box Agreement as a cash management system with lenders offers a convenient and secure way for borrowers to make payments while ensuring that lenders can efficiently manage their cash flow. Whether through traditional, electronic, or online means, these agreements provide financial stability and convenience for both parties involved.A San Antonio Texas Lock Box Agreement as a cash management system with lenders refers to a financial arrangement between a borrower and a lender. It involves the use of lock boxes, which are secure locations where borrowers' payments are collected by a third-party agent (usually a bank) on behalf of the lender. The purpose of this agreement is to streamline the payment process and improve efficiency for both parties. It ensures that the lender receives timely and accurate payments, while the borrower benefits from a seamless payment process. Keywords: San Antonio Texas, Lock Box Agreement, cash management system, lenders, financial arrangement, secure location, third-party agent, streamline, efficiency, payments, borrower. Types of San Antonio Texas Lock Box Agreement as Cash Management System with Lenders: 1. Traditional Lock Box Agreement: This is the most common type of Lock Box Agreement, where payments are collected via physical checks sent by the borrower. The borrower directs their customers or clients to send payments to a designated lock box address, which is usually maintained by a bank. The bank then collects the checks and forwards them to the lender. 2. Electronic Lock Box Agreement: With advances in technology, electronic lock box agreements have become more popular. Instead of physical checks, borrowers and their customers use electronic payment methods such as Automated Clearing House (ACH) transfers or wire transfers. The lender provides the borrower with specific instructions for directing the payments to the lock box account electronically. The bank acts as an intermediary, collecting and processing electronic payments on behalf of the lender. 3. Online Lock Box Agreement: Online lock box agreements are a modern iteration of the traditional lock box system. Borrowers and their customers utilize an online payment portal or platform to submit payments to a designated lock box account. The online portal is usually provided by the financial institution or a third-party service provider. This type of agreement streamlines the payment process further by providing real-time payment tracking and reporting capabilities. Overall, a San Antonio Texas Lock Box Agreement as a cash management system with lenders offers a convenient and secure way for borrowers to make payments while ensuring that lenders can efficiently manage their cash flow. Whether through traditional, electronic, or online means, these agreements provide financial stability and convenience for both parties involved.
