Common use of Collateral Collections Clause in Contracts

Collateral Collections. Bank and Borrower will establish a lockbox and related cash collection deposit account at Bank for the remittance and deposit of payments from Borrower’s customers. Borrower shall instruct its customers to remit all checks and other similar tangible payment items to the lockbox and to remit all electronic payments directly to the collection account. If despite such instructions, Borrower receives any checks or other tangible payment items from its customers, Borrower shall hold such items in trust and promptly deposit the same, in kind, with any appropriate endorsement, into the collection account. Borrower authorizes Bank, at Bank’s discretion, to apply all collections on deposit in the collection account to reduce the balance of the Advances.