Exhibit 10.24
EXHIBIT A
SETTLEMENT AGREEMENT
This Settlement Agreement (the
“Settlement Agreement”) is entered into by and among
(a) Allied Holdings, Inc. and its affiliates that are debtors
and debtors in possession (collectively, the
“Debtors”), (b) Yucaipa American Alliance Fund I,
LP and Yucaipa American Alliance (Parallel) Fund I, LP
(collectively, “Yucaipa”), (c) the Official
Committee of Unsecured Creditors in the Bankruptcy Cases (the
“Creditors’ Committee”), (d) Sopris Capital
Advisors, LLC, Aspen Advisors LLC and Armory Advisors LLC
(collectively, the “Equity Holders”), (e) Andrews
& Kurth LLP, (f) Sonnenschein Nath & Rosenthal LLP,
(g) Kilpatrick Stockton LLP and (h) Jefferies &
Company, Inc. The entities listed in (a) through (d) of
this introductory paragraph are collectively referred to herein as
the “Parties” and individually as a
“Party.”
RECITALS
A. WHEREAS, the Debtors filed
petitions for relief on July 31,2005, commencing jointly
administered cases 05-12515 through 05-12526 and 05-12528 though
05-12537 in the United States Bankruptcy Court for the Northern
District of Georgia (collectively, the “Bankruptcy
Cases”); and
B. WHEREAS, in or about January,
2006, the Equity Holders, together with Virtus Capital LP and Hawk
Opportunity Fund, L.P., formed an ad hoc committee of equity
holders (the “Ad Hoc Equity Committee’’);
and
C. WHEREAS, the Debtors, Yucaipa
and The Teamsters National Automobile Transportation Industry
Negotiating Committee filed their First Amended Joint Plan of
Reorganization for the Debtors (dated as of April 5,2007) (as
may be amended, the “Plan”); and
D. WHEREAS, the bankruptcy court
supervising the Bankruptcy Cases (the “Bankruptcy
Court”) has scheduled a hearing on confirmation of the Plan
commencing May 9, 2007; and
E. WHEREAS, the Equity Holders
and the Ad Hoc Equity Committee have filed in the Bankruptcy Cases
complaints, motions and objections to, among other things, pending
motions for approval of financing, have moved to stay certain
orders pending appeal (before die Bankruptcy Court and the District
Court for the Northern District of Georgia), have filed notices of
appeal and have served deposition subpoenas and document requests
in connection with their opposition to confirmation of the Plan;
and
F. WHEREAS, the Parties
anticipate more than 10 depositions and the review of tens of
thousands of documents prior to confirmation, including without
limitation depositions of experts regarding the Debtors’
reorganization value (the “Valuation”); and
G. WHEREAS, the Equity Holders
and the Ad Hoc Equity Committee have vigorously contested various
matters in the Bankruptcy Cases and their objection to the
Valuation and confirmation of the Plan will lead to substantial
additional administrative claims in the Bankruptcy Cases; and
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H. WHEREAS, the Equity Holders
disputed the Valuation set forth in the Disclosure Statement
relating to the Plan; and
I. WHEREAS, in light of the
expenses and uncertainty in litigation, the Parties have agreed
that a settlement on the terms set forth below is in the best
interest of the Debtors’ estates.
NOW THEREFORE, IN LIGHT OF THE
FOREGOING AND FOR VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES HEREBY
AGREE:
1. The recitals set forth above
are incorporated by reference and are explicitly made part of the
Settlement Agreement.
2. Promptly after the Bankruptcy
Court enters an order approving the Settlement Agreement (the
“Approval Order”), the Plan shall be modified to
provide for the terms and conditions set forth in this Settlement
Agreement, and the effectiveness of the Plan shall be expressly
conditioned on implementation of the Settlement Agreement. This
condition to effectiveness of the Plan may only be waived by the
Equity Holders.
3. On the Effective Date of the
Plan, Reorganized Allied Holdings (as defined in the Plan) will pay
up to $325,000.00 (the “Fee Payment”) in the aggregate
of actual and documented fees of Andrews Kurth LLP, Sonnenschein
Nam & Rosenthal LLP, Jefferies & Company, Inc. and
Kilpatrick Stockton LLP (collectively, the “Equity Holder
Professionals”) for work done on behalf of any one or more of
the Equity Holders in connection with the Bankruptcy Cases. The
Debtors, the Creditors Committee and Yucaipa agree that invoices
from any one or more of the Equity Holder Professionals,
accompanied by a written representation from a representative of
each such professional that reasonable time entries (if
appropriate) or other detailed support exists to substantiate such
invoices, shall constitute adequate documentation for the purposes
of this paragraph. The allocation of the Fee Payment to and among
the Equity Holder Professionals shall be made in the sole
discretion of the Equity Holders.
4. Within two business days
following execution of the Settlement Agreement, the Equity Holders
(for themselves and their respective partners, affiliates and
subsidiaries) will dismiss and withdraw any complaints, requests
for shareholder meetings, motions (other than motions for admission
pro hac vice ), appeals, discovery, oppositions or
objections that have been filed or served by or on behalf of the
Equity Holders in or related to the Bankruptcy Cases (with the
exception of the appeal related to the Stay Motion, as defined in
paragraph 11, as to which appellants will take no further action,
except as set forth in paragraph 11, pending the Bankruptcy
Court’s ruling on approval of this Settlement Agreement) (the
“Dismissals”). The Settlement Agreement shall in no way
impact discovery to the extent that it has been served by or on
behalf of entities that are not parties to this Settlement
Agreement (or partners, affiliates or subsidiaries of such
parties).
5. Within one business day
following the filing of the Dismissals, Andrews Kurth LLP will file
with the Bankruptcy Court a notice, in the form of an amended
notice under
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Bankruptcy Rule 2019 (the “Rule 2019
Statement”) that states (i) that the Equity Holders have
resigned from the Ad Hoc Equity Committee, (ii) that the Ad
Hoc Equity Committee has been dissolved and (iii) that Andrews
Kurth LLP and Jefferies & Company, Inc. no longer represent the
Ad Hoc Equity Committee or any of its members in connection with
the Debtors or the Bankruptcy Cases. The Equity Holders and the
Equity Holder Professionals shall not form another ad hoc equity
committee or comparable committee in the Bankruptcy Cases and shall
not give any assistance or encouragement to any entity or person
who attempts to or does reform or form an ad hoc equity committee
or comparable committee in the Bankruptcy Cases. It is a condition
to the Settlement Agreement that the Approval Order
(i) authorize and direct the Parties and the Equity Holder
Professionals to take the actions (or refrain from action, as
applicable) as described in this Settlement Agreement, and
(ii) contain such other findings and/or directions as any
Party may reasonably request in furtherance of the effective
implementation of the terms of the Settlement Agreement.
6. Within two business days
following execution of the Settlement Agreement, the Debtors, the
Creditors Committee and Yucaipa will dismiss and withdraw any
discovery served on any of the Equity Holders.
7. Following execution of the
Settlement Agreement, and except as provided herein: (i) the
Equity Holders (and any of their respective partners, affiliates or
subsidiaries) and the Equity Holder Professionals shall not appear
in or take any action in the Bankruptcy Cases, other than in
connection with the approval of the Settlement Agreement or in
response to a motion or action specifically directed to or against
them (but not equity holders generally), and each of them covenant
to take no action to impede or preclude the entry of the order
confirming the Plan (as modified consistent with the Settlement
Agreement), the administration of the Bankruptcy Cases (including
any motions or actions supported by Yucaipa and the Debtors that do
not contravene the terms of the Settlement Agreement) or oppose in
any way the implementation and administration of the Plan (or give
any assistance or encouragement to any entity or person taking any
of the actions prohibited by subsection (i) of this paragraph
7); (ii) none of the Debtors, Yucaipa or the Creditors
Committee shall make, propose or allow any changes to the Plan
which would be inconsistent with the agreement embodied in this
Settlement Agreement. To the extent the Plan is modified or
amended, the Equity Holders (and any of their respective partners,
affiliates and subsidiaries) and the Equity Holder Professionals
will continue to abide by the terms and conditions of the
Settlement Agreement so long as such modifications or amendments
are not inconsistent with the agreement embodied in this Settlement
Agreement, and so long as the effectiveness of the Plan, as so
modified or amended, remains conditioned upon approval by the
Bankruptcy Court of the terms and conditions of this Settlement
Agreement; and (iii) the Equity Holders will (a) retain
ownership of their equity interests in the Debtors (the
“Equity Securities”) through the effective date of the
Plan, and (b) vote their Equity Securities in favor of the
slate of directors proposed by the Debtors’ current
management in the event t
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