Joinder to Restructuring Support Agreement

This template is a basic joinder to a restructuring support agreement that can be used by a party who agrees to be bound by the terms of a restructuring support agreement as an additional party. This template includes practical guidance and drafting notes. A restructuring support agreement is sometimes also referred to as a plan support agreement or lockup agreement. Such agreements can be used between a debtor and its key creditors and generally provide that the creditors will support and not vote against a proposed restructuring. In turn, the debtor agrees to formulate a plan on agreed-upon terms within an agreed-upon time frame, typically with certain interim milestones. Attached to the agreement, is an exhibit that is either a term sheet that sets forth the proposed, revised capital structure, or a substantially completed version of the proposed plan of reorganization. As with any contract, it must be tailored to the specific requirements of the debtors, its creditors, and the factual circumstances. The parties to the restructuring support agreement generally agree to specific obligations regarding the restructuring process. Certain obligations relate only to the company, which typically prosecutes the plan, while other such obligations relate only to the creditors as the stakeholders and voting parties in the restructuring. The plan support agreement usually provides a mechanism that permits the sale of claims so long as the purchaser of the claim agrees to take on the obligations of the plan support agreement. Without imposing a transfer restriction, the creditor could cleanse the claim of the plan support agreement obligations by selling it, thereby losing desirable support through claims trading. Typically, the plan support agreement includes a joinder, which the purchaser must execute for the transfer to be deemed to be valid. Absent execution of the joinder, the plan support agreement provides that the trade is deemed void ab initio. For more information on restructuring and plan support agreements, see Plan Support Agreements, Assessing a Workout, Restructuring Support Agreement (NY), and Restructuring, Lockup, Plan Support and Forbearance Agreement. For a full listing of key content on several out-of-court restructuring options, including workouts, and liquidation alternatives to filing for bankruptcy protection, see Out-of-Court Restructuring and Liquidation Alternatives Resource Kit.