Lockbox Arrangement Sample Clauses
A Lockbox Arrangement clause establishes a mechanism where payments, typically from customers or clients, are directed into a designated bank account controlled by a third party or lender. In practice, this means that all incoming funds are deposited into the lockbox account, and the bank or lender may then apply these funds to outstanding debts or obligations before releasing any remaining amounts to the borrower or company. This arrangement ensures that the lender has priority access to cash flows, thereby reducing the risk of non-payment and providing greater security for the lender in financing transactions.
POPULAR SAMPLE Copied 6 times
Lockbox Arrangement. Each Borrower shall direct all of its Account Debtors to make all payments on the Accounts directly to a post office box (the “Lockbox”) designated by, and under the exclusive control of, the Bank. Pursuant to the Lockbox Agreement, the Borrowing Agent shall establish the Lockbox and an account (the “Lockbox Account”) in the Borrowing Agent’s name with the Bank into which all payments received in the Lockbox shall be deposited, and into which each Borrower will immediately deposit all payments made for Inventory sold by such Borrower or the performance of services by such Borrower, and received by such Borrower in the identical form in which such payments were made, whether by cash or check. If any Borrower, any of its Subsidiaries or any director, officer, employee, or agent of any such Borrower or any such Subsidiary, or any other Person acting for or in concert with such Borrower shall receive any monies, checks, notes, drafts or other payments relating to or as proceeds of Accounts or other Collateral, such Borrower, such Subsidiary and each such Person shall receive all such items in trust for, and as the sole and exclusive property of, the Bank and, immediately upon receipt thereof, shall remit the same (or cause the same to be remitted) in kind to the Lockbox Account. The parties agree that all payments made to such Lockbox and Lockbox Account or otherwise received by the Bank, whether in respect of the Accounts or as proceeds of other Collateral or otherwise, (a) at all times following the occurrence and during the continuance of an Event of Default, will be applied on account of the Revolving Loans in accordance with Section 12.8 of this Agreement, and (b) at all other times, subject to final collection and the Bank’s availability schedule, will be released to the Borrowing Agent’s operating account maintained with the Bank. Each Borrower agrees it shall be jointly and severally liable for all fees, costs and expenses which the Bank incurs in connection with opening and maintaining the Lockbox and the Lockbox Account and depositing for collection by the Bank any check or other item of payment received by the Bank on account of the Obligations. All of such fees, costs and expenses shall constitute Obligations hereunder, shall be payable to the Bank by the Borrowers upon demand, and, until paid, shall bear interest at the Default Rate. All checks, drafts, instruments and other items of payment or proceeds of Collateral shall be endorsed by the appli...
Lockbox Arrangement. Borrower shall not enter into any type of lockbox agreement or similar cash management arrangement that has not been approved by Lender in writing, and no direct or indirect owner of Borrower shall enter into any type of lockbox agreement or similar cash management arrangement with respect to Rents or other income from the Mortgaged Property that has not been approved by Lender in writing. Lender’s approval of any such cash management arrangement may be conditioned upon requiring Borrower to enter into a lockbox agreement or similar cash management arrangement with Lender in form and substance acceptable to Lender with regard to Rents and other income from the Mortgaged Property. - THE MORTGAGE LOAN
Lockbox Arrangement. On or prior to the Effective Date, a lockbox shall have been established with the Agent on terms and conditions satisfactory to the Agent in its sole discretion.
Lockbox Arrangement. Borrower shall assist Bank in the establishment of a lockbox arrangement in favor of Bank for the payments that the Borrower receives with respect to the Usage Agreements. Such arrangement and the provisions relating thereto, including, without limitation, the application of the proceeds collected by the Bank under such arrangement, shall be established within _____ days hereof and shall be satisfactory to the Bank in its reasonable discretion. *** Portions of this page have been omitted pursuant to request for Confidential Treatment and filed separately with the Commission.
Lockbox Arrangement. Buyer shall continue to maintain the Lockbox Arrangement for so long as Seller is obligated to deliver collections on the accounts receivable of MTG under the Receivables Purchase Agreement described on Schedule 3.3, but in no event shall Buyer be required to continue such Lockbox Arrangement for more than 90 days following the Transfer Date.
Lockbox Arrangement. Upon the request of the Agent (i) ------------------- enter into a lockbox agreement, in form and substance satisfactory to the Agent, pursuant to which a lockbox account is set up and all proceeds of the Borrower and the Guarantors from accounts receivable shall be deposited into such account and the Borrower and the Guarantors shall not be permitted to withdraw any funds held therein, (ii) arrange for each of the Borrower's and the Guarantors' account debtors to be notified that all payments made in respect of such account debtor's account shall be directed to the lockbox account and (iii) enter into such amendments to this Agreement as the Agent may reasonably request with respect to such lockbox agreements and incorporating a cash sweep.
Lockbox Arrangement. In the event Exhibit A indicates that there is a lockbox for receipt and deposit of payments to Customer (each a “Lockbox”) in place in connection with any of the Accounts, Customer and Bank acknowledge that they have entered into an agreement (the “Lockbox Agreement”) that governs Bank’s obligations in connection with each Lockbox. Upon the execution and delivery of this Agreement, cash, checks, and other items delivered to Bank will continue to be deposited in the applicable Account pursuant to the Lockbox Agreement.
Lockbox Arrangement. The lockbox practice shall be governed by the Lockbox Agreement entered into between the Borrower and the Bank which forms an integral part of the documents for this Loan.
Lockbox Arrangement. Execute, maintain in full force and effect, and comply in all respects with the provisions of such documentation as may be reasonably required by the Lender to establish the Lockbox and the Lockbox Account (including, without limitation, the Lockbox Agreement with attached schedule of Lockbox Standard Processing Procedures and an associated Lockbox Setup Checklist); direct all purchasers of production from the Mortgaged Properties to make remittance to the Lockbox; and deposit directly into the Lockbox Account all funds received by the Borrower, if any, from purchasers of production from the Mortgaged Properties. Funds received in the Lockbox shall be transferred daily by the Lender to the Lockbox Account. Prior to the occurrence of an Event of Default, the Borrower shall have full access to the Lockbox Account and all funds of Borrower therein by way of draft, check, wire transfer of funds, or otherwise. Upon the occurrence of an Event of Default, access by the Borrower to the Lockbox Account and the funds therein shall terminate, and the Lender may, at its option, apply any or all of such funds to the Obligations, whether matured or unmatured. Nothing contained herein, however, shall be construed to grant to Lender a security interest in, or otherwise encumber, any funds of royalty owners, other working interest owners, partnerships for which Borrower acts as general partner, or other third parties for which Borrower receives and disburses proceeds in the ordinary course of business.
Lockbox Arrangement. Neither Borrower nor the direct or indirect owners of Borrower shall enter into any type of lockbox agreement or other similar cash management arrangement with any direct or indirect owner of Borrower with respect to the Mortgaged Property without the prior written consent of Lender. In the event that Lender issues such consent, Borrower shall, at Lender’s option, be required to enter into a lockbox agreement or other similar cash management agreement with Lender in form and substance acceptable to Lender.