North Carolina Lock Box Agreement as Cash Management System with Lenders

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Multi-State
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US-03367BG
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Description

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 North Carolina Lock Box Agreement is a cash management system used by lenders to streamline the collection and distribution of funds. This agreement serves as a contractual arrangement between lenders and borrowers, ensuring efficient and secure handling of cash flow. In this system, the lender establishes a designated lock box account in North Carolina, typically maintained by a financial institution. Borrowers are instructed to direct their payments to this account rather than making payments directly to the lender. The lock box serves as a centralized location for the receipt of payments, which are then processed and disbursed according to the terms of the agreement. This cash management system offers numerous benefits for lenders. By centralizing the receipt of funds, it increases efficiency and allows for expedited processing of payments. It also reduces the risk of errors or delays in payment handling, ensuring timely access to available funds. Additionally, the lock box agreement helps in consolidating financial data and simplifies reconciliation processes, as all funds flow through a single controlled account. Different types of North Carolina Lock Box Agreement as Cash Management System with Lenders may include: 1. Standard Lock Box Agreement: This is the most common type, where borrowers are instructed to send their payments to a designated lock box account. Payments are processed and disbursed according to the agreed-upon terms. 2. Electronic Lock Box Agreement: In this variation, borrowers have the option to make electronic payments directly into the lock box account. This reduces paper-based transactions and allows for faster processing and access to funds. 3. Controlled Disbursement Lock Box Agreement: This type of agreement provides lenders with early information regarding the available funds in the lock box account. The lender can then make informed decisions regarding the disbursement or investment of these funds. 4. Concentration Banking Lock Box Agreement: This agreement is particularly useful for lenders with many borrowers spread across different regions. It involves establishing multiple lock box accounts in various locations, consolidating the funds into a central concentration account before disbursing them. In conclusion, the North Carolina Lock Box Agreement as a cash management system with lenders provides a secure and efficient method for processing funds. It ensures timely receipt and disbursement of payments while simplifying financial management and reducing risks. Choosing the appropriate type of lock box agreement depends on the needs and preferences of the lender.

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  • Preview Lock Box Agreement as Cash Management System with Lenders
  • Preview Lock Box Agreement as Cash Management System with Lenders
  • Preview Lock Box Agreement as Cash Management System with Lenders
  • Preview Lock Box Agreement as Cash Management System with Lenders
  • Preview Lock Box Agreement as Cash Management System with Lenders
  • Preview Lock Box Agreement as Cash Management System with Lenders

How to fill out Lock Box Agreement As Cash Management System With Lenders?

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FAQ

Examples of Cash management This involves establishing a system for tracking cash inflows and outflows, such as maintaining a daily cash log or using accounting software. 2) Creating cash flow forecasts - Creating cash flow forecasts is another essential practice of cash management.

A cash management agreement is a contract between a bank and its customer used to manage the customer's funds. This agreement can include providing liquidity, asset-liability matching, or other services. A cash management agreement often includes maintaining certain balances with the bank and meeting financial ratios.

Cash management is the process of managing cash inflows and outflows. This process is important for individuals and businesses because cash is the primary asset used to invest and pay any liabilities.

A bank lockbox is a service for streamlining accounts receivable management. Customers mail payments to a secure P.O. box controlled by the bank, instead of the business's office. The bank collects, opens, and processes the payments daily, then deposits the funds into the business's account.

Definition for : Lockbox system Under a lockbox system, the creditor asks its debtors to send their payments directly to a post office box that is emptied regularly by the creditor's bank. The funds are immediately paid into the banking system, without first being processed by the creditor's accounting department.

Cash Management Agreement means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements.

A business management agreement is a contract between the owner of a company and one or more people responsible for managing the company. It outlines the specific roles, responsibilities, and duties of each party involved.

Security interests in cash deposits can be perfected through the use of a ?lock box.? Under this arrangement, a borrower and a third party agree that payments on contracts entered into by a borrower are paid to a bank account which is in the possession and control of the lender.

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How to fill out Lock Box Agreement As Cash Management System With Lenders? Use the most extensive legal library of forms. US Legal Forms is the best place ... Apr 10, 2013 — As soon as the words "cash management" are uttered in a negotiation, start the process of opening the lockbox by contacting the bank that will ...How it works: Soft lockboxes primarily work one of two ways: (A) All rents from the property are deposited into a Lender-controlled account (aka lockbox account) ... FORMALITIES OF. NORTH CAROLINA. DEEDS OF TRUST: purchase; and sufficient reference to identify the complete agreement between the parties. N.C.G.S. § 47-118 ... Jun 1, 2016 — North Carolina law, Chapter 147-86.10 of the General Statutes, requires that "all agencies, institutions,. Feb 18, 2020 — Pursuant to the terms of the loan agreement, the borrower is required to deposit all income generated by the property (i.e., rents or other ... An applicant who holds a current real estate license in another U.S. jurisdiction that is equiva- lent to NC's broker license and that has been on active sta-. This template is a Lockbox Account Agreement used to create a security interest in cash supporting the obligations under a secured financing transaction. Lockbox Service – Cash management service provided by a depository bank to its ... The fees for any lock box services utilized by State agencies are paid for by ... Oct 10, 2023 — A safe deposit box is a secure container, usually made of metal, that's used to store valuables at a bank or credit union.

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North Carolina Lock Box Agreement as Cash Management System with Lenders