The Lock Boxes and Lock Box Accounts Clause Samples
The "Lock-Boxes and Lock-Box Accounts" clause establishes the requirement for certain funds, typically receivables or payments, to be deposited into designated bank accounts known as lock-boxes. In practice, this means that all payments from customers or other sources are directed to these specific accounts, which are often controlled or monitored by a lender or secured party. This arrangement ensures that the funds are collected efficiently and securely, reducing the risk of misappropriation and providing the secured party with greater control over cash flows, thereby protecting their interests in the collateral.
The Lock Boxes and Lock Box Accounts. (i) The Seller, the Servicer and/or the Receivables Administrators have established on or prior to the Closing Date with each Lock-Box Bank one or more Lock-Box Accounts. The Seller, the Servicer and the Receivables Administrators agree that the Agent shall have control of each Lock-Box Account and all monies, instruments and other property from time to time on deposit therein pursuant to a Shifting Control Deposit Account Agreement.
(ii) On or prior to the Closing Date, the Seller, the Servicer and/or the Receivables Administrators shall have instructed all existing Obligors of Pool Receivables, and after the Closing Date shall instruct all future Obligors of such Pool Receivables, to make payments in respect thereof only (A) by check or money order mailed to one or more lock boxes (which may be at an address of the Seller, the Servicer and/or any Receivables Administrator) or post office boxes in the name of the Seller, the Servicer or any Receivables Administrator (each, a “Lock Box” and collectively the “Lock Boxes”) or (B) by wire transfer or moneygram directly to a Lock-Box Account. Schedule I lists all Lock Boxes and all Lock-Box Banks at which the Seller, the Servicer or any Receivables Administrator maintains a Lock Box Account (subject to any updates to such Schedule made after the Closing Date by the Seller or the Servicer that are delivered to the Agent and the Purchasers (each, a “Permitted Account Update”), and such schedule correctly identifies (1) with respect to each such Lock Box Bank, the name, address and telephone number thereof, (2) with respect to each Lock-Box Account, the name in which such account is held and the complete account number therefor and (3) with respect to each Lock Box, the lock box number and address thereof. The Seller, the Servicer or a Receivables Administrator shall (i) endorse, to the extent necessary, all checks or other instruments received in any Lock Box with respect to Collections of Pool Receivables and deposit, in the form so received (with all necessary endorsements), such checks or other instruments into the Concentration Account no later than the second Business Day of the week immediately following the week of receipt thereof (or more frequently if desired by the Servicer or requested by the Seller), and until so deposited all such items or other proceeds shall be held in trust for the benefit of the Agent (and may be deposited in any Lock-Box Account pending transfer to the Concentration Account), a...
The Lock Boxes and Lock Box Accounts