This Post-Petition Financing Agreement allows a lender to securely provide financing to
a debtor after the debtor has filed for bankruptcy protection. This agreement will
prevent the complete shutdown of business activities, and allows the debtor and
collectors to avoid unnecessary losses. It contains numerous standard provisions that
are commonly included in these types of agreements and may be customized to
address the specific needs of the parties. This document should be used by debtors
who have filed bankruptcy under chapter 11 and a lender of a pre-filing loan.
Post-Petition Financing Agreement
This Agreement is entered into as of the ___ day of ____________, 20___ [Instruction: insert
date], by the debtor in possession under chapter 11 of the United States Bankruptcy Code
_________________ (“Debtor”) [Instruction: insert name of debtor], and
_________________ (“Lender”) [Instruction: insert name of lender]:
Whereas, Debtor has filed a voluntary petition under chapter 11 of the United States Bankruptcy
Code in the Bankruptcy Court for the _________________ [Instruction: insert the name of the
district where the bankruptcy is filed] ("the Bankruptcy Court"); and
Whereas, prior to the filing of the chapter 11 case the Lender had made loans to and issued
letters of credit for the account of Debtor (the "Pre-filing Loans") pursuant to an Agreement,
dated _________________ [Instruction: insert date of agreement] ("Pre-filing Agreement");
and
Whereas, loans made by way of the Pre-filing Agreement and other obligations of Debtor are
secured by ________________ [Instruction: insert encumbrances and the property that is
encumbered] heretofore executed and delivered by Debtor in favor of the Lender (the
"Collateral"); and
Whereas, the Bankruptcy Court has entered a secured financing order on an interim basis
("Order");
and Whereas the Bank has agreed to finance on an interim basis the immediate and necessary to
Debtor by making loans, pursuant to the terms of this Agreement.
NOW, THEREFORE, THE PARTIES HAVE AGREED AS FOLLOWS:
1. Loan. Bank agrees to lend to Debtor, subject to the completion of the Financing Agreement of
the Debtor in Possession, the amounts set forth under this Agreement.
2. Procedures. Debtor may borrow money under this agreement by contacting and informing the
Bank to credit the account with number ________________ [Instruction: insert account
number] established at Lender. Each such instruction shall be by ________________
[Instruction: insert method of contact], shall be confirmed in writing, and shall in each case
contain the following information:
A. the amount that is to be borrowed;
B. the purpose of the loan; and
C. a declaration that the request complies with this Agreement; and
D. ________________ [Instruction: insert any additional requirements]
3. Lock-Box.
A. On or before ________________ [Instruction: date], Debtor shall notify each
________________ [Instruction: insert the names of all the relevant parties] as
to which there are amounts due or to become due in the future on account of
________________ ("Receivable Accounts") [Instruction: insert description of
receivable accounts] that all payments shall be sent to a post office box established
by and under the control of Lender ("Lock-Box"). New account debtors shall be
notified of the Lock-Box. All Receivable Accounts shall be paid into the Lock-Box.
B. Debtor shall deposit all proceeds of Receivable Accounts in the Lock-Box. Except
as specified in this section 3. The funds collected in the Lock-Box shall go toward
the repayment of the principal of the Pre-filing Loans.
C. As of the date of this chapter 11 petition, Debtor has ____________ [Instruction:
insert the cash balance] ("Starting Funds"). Debtor acknowledges that on the date
of filing the Starting Funds in such accounts constitutes cash collateral in favor of
the Lender. Lender shall apply ____________ [Instruction: insert amount that is
selected for repayment of any interest in the Pre-filing Agreement] out of such
accounts to repayment of interest owing on its Pre-filing Agreement. The Starting
Funds shall remain as cash collateral of the Lender in such accounts, subject to
withdrawal by Debtor upon the Lender's approval thereof. To the extent the Lender
receives in the Loan Reduction Account amounts relating to payments (other than
those arising out of joint interest billing Receivable Accounts and notes receivable)
in excess of ____________ [Instruction: insert the limit on borrowing], the
Lender shall permit payments received after such amount has been received (other
than those arising out of joint interest billing Receivable Accounts and notes