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.
The San Diego California Lock Box Agreement is a cash management system employed by lenders to streamline the handling of borrower funds. In this agreement, borrowers agree to direct their incoming funds to a designated lock box, located in San Diego, California. This lock box acts as a centralized collection point for all borrower payments, such as loan repayments, fees, and other financial transactions. By utilizing this cash management system, lenders can effectively monitor and manage borrower funds, ensuring timely and accurate processing of payments. The San Diego California Lock Box Agreement offers various benefits to both lenders and borrowers, including enhanced cash flow visibility, improved efficiency in payment processing, and reduced risk of fraud or mishandling of funds. There are several types of Lock Box Agreements that lenders may offer under the San Diego California cash management system, catering to different borrower needs and preferences: 1. Traditional Lock Box: This is the most common type of Lock Box Agreement, where borrowers' payments are physically collected through a designated post office box in San Diego, California. The lender then retrieves the payments regularly and initiates the necessary processing and deposit. 2. Electronic Lock Box: In this digital-age variant, borrowers transmit payments electronically to a virtual lock box managed by the lender in San Diego, California. Secure electronic payment channels, such as Automated Clearing House (ACH) or wire transfers, facilitate quick and secure fund transfers. 3. Remote Lock Box: This type allows borrowers to deposit payments into a lock box located near their own business premises. The lender then arranges for these payments to be collected, transported, and processed at the designated lock box in San Diego, California. 4. Retail Lock Box: Designed for businesses with a significant volume of small payments, this option involves borrowers making payments at designated retail locations, such as bank branches or third-party collection centers. The collected funds are then forwarded to the San Diego California Lock Box for consolidation and processing. Regardless of the specific type of Lock Box Agreement chosen, the San Diego California cash management system provides lenders and borrowers with a reliable and efficient means to handle financial transactions and optimize cash management processes. It ensures transparent monitoring, expeditious processing, and secure handling of borrower funds, fostering trust and facilitating smooth financial operations between lenders and borrowers.The San Diego California Lock Box Agreement is a cash management system employed by lenders to streamline the handling of borrower funds. In this agreement, borrowers agree to direct their incoming funds to a designated lock box, located in San Diego, California. This lock box acts as a centralized collection point for all borrower payments, such as loan repayments, fees, and other financial transactions. By utilizing this cash management system, lenders can effectively monitor and manage borrower funds, ensuring timely and accurate processing of payments. The San Diego California Lock Box Agreement offers various benefits to both lenders and borrowers, including enhanced cash flow visibility, improved efficiency in payment processing, and reduced risk of fraud or mishandling of funds. There are several types of Lock Box Agreements that lenders may offer under the San Diego California cash management system, catering to different borrower needs and preferences: 1. Traditional Lock Box: This is the most common type of Lock Box Agreement, where borrowers' payments are physically collected through a designated post office box in San Diego, California. The lender then retrieves the payments regularly and initiates the necessary processing and deposit. 2. Electronic Lock Box: In this digital-age variant, borrowers transmit payments electronically to a virtual lock box managed by the lender in San Diego, California. Secure electronic payment channels, such as Automated Clearing House (ACH) or wire transfers, facilitate quick and secure fund transfers. 3. Remote Lock Box: This type allows borrowers to deposit payments into a lock box located near their own business premises. The lender then arranges for these payments to be collected, transported, and processed at the designated lock box in San Diego, California. 4. Retail Lock Box: Designed for businesses with a significant volume of small payments, this option involves borrowers making payments at designated retail locations, such as bank branches or third-party collection centers. The collected funds are then forwarded to the San Diego California Lock Box for consolidation and processing. Regardless of the specific type of Lock Box Agreement chosen, the San Diego California cash management system provides lenders and borrowers with a reliable and efficient means to handle financial transactions and optimize cash management processes. It ensures transparent monitoring, expeditious processing, and secure handling of borrower funds, fostering trust and facilitating smooth financial operations between lenders and borrowers.
