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EXECUTION COPY
Exhibit 4.3(e)
April 3, 2006
ALLIED HOLDINGS, INC.
160 Clairemont Avenue
Suite 200
Decatur, Georgia 30030
Attention: Chief Financial Officer
Fax No. 404-370-4206
Re: General Electric Capital Corporation; Allied Holdings, Inc.
Dear Ladies and Gentlemen:
Reference is made to that certain SENIOR SECURED SUPER-PRIORITY
DEBTOR-IN-POSSESSION CREDIT AGREEMENT (as amended, restated,
supplemented, or
otherwise modified, the "Credit Agreement"), dated as of August 1,
2005, by and
among (a) ALLIED HOLDINGS, INC., a Georgia corporation ("Allied
Holdings"), and
ALLIED SYSTEMS, LTD. (L.P.), a Georgia limited partnership ("Allied
Systems, and
together with Allied Holdings, "Borrowers" and individually, a
"Borrower"); (b)
the other Credit Parties signatory hereto; (c) GENERAL ELECTRIC
CAPITAL
CORPORATION ("GE Capital" or the "Administrative Agent"), as
Administrative
Agent, Collateral Agent, Revolver Agent and co-Syndication Agent;
(d) MORGAN
STANLEY SENIOR FUNDING, INC., as co-Term Loan B Agent,
co-Syndication Agent,
co-Bookrunner and co-Term Loan B Lead Arranger; (e) MARATHON
STRUCTURED FINANCE
FUND, L.P., as Term Loan A Agent, co-Term Loan B Agent, Term Loan A
Lead
Arranger, co-Term Loan B Lead Arranger and co-Revolver Lead
Arrangers; (f) the
other Lenders signatory hereto from time to time (the "Lenders")
and (g) GE
CAPITAL MARKETS, INC., as co-Revolver Lead Arranger and
co-Bookrunner.
Capitalized terms not otherwise defined herein shall have the
meanings ascribed
to them in the Credit Agreement.
1.
Extension of Forbearance, (a) Borrowers have previously notified
the
Administrative Agent that they anticipated that they would be in
default of the
Financial Covenants required by Section 6.10 and Annex G, clauses
(c) and (d) of
the Credit Agreement for the 12-month periods ending on January 31,
2006 and
December 31, 2005 (the "Ongoing Events of Default") and have
notified the
Administrative Agent that they now anticipate that in addition to
the Ongoing
Events of Default, they will be in default of the Financial
Covenants required
by Section 6.10 and Annex G, clauses (b), (c) and (d) of the Credit
Agreement as
follows:
(i) actual EBITDA for the 12-month period ended on January 31,
2006
will
be not less than $36,661,000;
(ii) actual EBITDA for the 12-month period ended on December 31,
2005
will
be not less than $34,746,000;
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(iii) the actual Leverage Ratio for the 12-month period ended
on
January 31, 2006 will be not greater than 5.29:1.0;
(iv) the actual Leverage Ratio for the 12-month period ended on
December 31, 2005 will be not greater than 5.26:1.0;
(v) actual EBITDA for the 12-month period ended on February 28,
2006
will
be not less than $36,332,000;
(vi) the actual Leverage Ratio for the 12-month period ended on
February 28, 2006 will be not greater than 5.35:1.0;
(vii) the actual Fixed Charge Coverage Ratio for the 12-month
period
ended on December 31, 2005 will be not less than 0.59:1.0; and
(viii) the Events of Default set forth on Schedule A hereto
(the
"Specified Events of Default") will occur or will be continuing
(b) In that certain forbearance letter, dated as of March 9, 2006
(the
"Forbearance Letter"), executed by the Agents and the Lenders and
acknowledged
by the Borrowers, the Administrative Agent and the Lenders agreed
that (i) the
Ongoing Events of Default would not constitute a Default or an
Event of Default
for purposes of Section 2.2 of the Credit Agreement and (ii) they
would forbear
from exercising their remedies under the Credit Agreement and the
other Loan
Documents (both (i) and (ii), the "Forbearance") until April 3,
2006.
(c) Borrowers acknowledge that as of the date hereof the
Specified
Events of Default have occurred and are continuing.
(d) Borrowers have requested that, and the Administrative Agent
and
the Lenders have agreed to, extend the Forbearance during the
Forbearance Period
(as defined below). The Administrative Agent and the Lenders will
not charge
interest on any Obligations at the default rate of interest under
Section 1.5(d)
of the Credit Agreement retroactively to the date of the occurrence
of any of
the Specified Events of Default or during the Forbearance Period.
The
Administrative Agent's and the Lenders' continued forbearance from
exercising
their remedies relative to the Specified Events of Default during
the
Forbearance Period is expressly conditioned on satisfactory
compliance by
Borrowers with each of the following (the "Forbearance
Conditions"):
(i) all fees, costs and expenses incurred in connection with
this
forbearance letter, the Credit Agreement and any other Loan
Documents
(including, without limitation, legal fees and expenses and fees
and
expenses for a consultant to advise the Agents and the Lenders)
shall have
been
paid;
(ii) EBITDA for the rolling 12-month periods ending on each of
February 28, 2006, January 31, 2006 and December 31, 2005, in each
case as
reflected in the financial information or Financial Statements
delivered to
the
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Agents and the Lenders, shall be equal to or better than the
applicable
amounts specified in Paragraph l(a) hereof;
(iii) the Leverage Ratio for the rolling 12-month periods ending
on
each
of February 28, 2006, January 31, 2006 and December 31, 2005, in
each
case
as reflected in the financial information or Financial
Statements
delivered to the Agents and the Lenders, shall be equal to or less
than the
applicable ratios specified in Paragraph l(a) hereof;
(iv) the Fixed Charge Coverage Ratio for the rolling 12-month
period
ending on December 31, 2005, as reflected in the financial
information or
Financial Statements delivered to the Agents and the Lenders, shall
be
equal to or greater than the applicable ratio specified in
Paragraph l(a)
hereof;
(v) As soon as possible, but in no event later than three
Business
Days
from the execution date of this forbearance letter, Borrowers
shall
file
an emergency motion with the Bankruptcy Court seeking approval
for
Borrowers to pay the Forbearance Fee (as defined below); and
(vi) As soon as possible, but in no event later than three
