================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
SCHEDULE 13D/A
(Amendment No. 2)
Under the Securities Exchange Act of 1934
----------
DANA CORPORATION
(Name of Issuer)
Common Stock, $1.00 Par Value Per Share
(Title of Class of Securities)
235811106
(CUSIP Number)
----------
with copies to:
Ken Maiman
Appaloosa Management L.P.
26 Main Street
Chatham, NJ 07928
(Name, Address and Telephone Number of Person
Authorized to Receive Notices of Communication)
July 18, 2007
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box. [ ]
================================================================================
Page 1 of 9
- ------------------- -------------------
CUSIP No. 235811106 13D
- ------------------- -------------------
- ----- --------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
Appaloosa Investment Limited Partnership I
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
- ----- --------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- ----- --------------------------------------------------------------------------
3 SEC USE ONLY
- ----- --------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
- ----- --------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
- ----- --------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------- ------- ---------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ------- ---------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH REPORTING 11,992,500
PERSON WITH ------- ---------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------- ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
11,992,500
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,992,500
- ----- --------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- ----- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.98%
- ----- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- ----- --------------------------------------------------------------------------
Page 2 of 9
- ------------------- -------------------
CUSIP No. 235811106 13D
- ------------------- -------------------
- ----- --------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
Palomino Fund Ltd.
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
- ----- --------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- ----- --------------------------------------------------------------------------
3 SEC USE ONLY
- ----- --------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
- ----- --------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
- ----- --------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
- -------------------- ------- ---------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ------- ---------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH REPORTING 10,507,500
PERSON WITH ------- ---------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------- ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
10,507,500
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,507,500
- ----- --------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- ----- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.00%
- ----- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- ----- --------------------------------------------------------------------------
Page 3 of 9
- ------------------- -------------------
CUSIP No. 235811106 13D
- ------------------- -------------------
- ----- --------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
Appaloosa Management L.P.
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
- ----- --------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- ----- --------------------------------------------------------------------------
3 SEC USE ONLY
- ----- --------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- ----- --------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
- ----- --------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------- ------- ---------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ------- ---------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH REPORTING 22,500,000
PERSON WITH ------- ---------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------- ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
22,500,000
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,500,000
- ----- --------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- ----- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.98%
- ----- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- ----- --------------------------------------------------------------------------
Page 4 of 9
- ------------------- -------------------
CUSIP No. 235811106 13D
- ------------------- -------------------
- ----- --------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
Appaloosa Partners Inc.
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
- ----- --------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- ----- --------------------------------------------------------------------------
3 SEC USE ONLY
- ----- --------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- ----- --------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
- ----- --------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------- ------- ---------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ------- ---------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH REPORTING 22,500,000
PERSON WITH ------- ---------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------- ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
22,500,000
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,500,000
- ----- --------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- ----- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.98%
- ----- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- ----- --------------------------------------------------------------------------
Page 5 of 9
- ------------------- -------------------
CUSIP No. 235811106 13D
- ------------------- -------------------
- ----- --------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
David A. Tepper
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
- ----- --------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- ----- --------------------------------------------------------------------------
3 SEC USE ONLY
- ----- --------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- ----- --------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
- ----- --------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- -------------------- ------- ---------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ------- ---------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH REPORTING 22,500,000
PERSON WITH ------- ---------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------- ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
22,500,000
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,500,000
- ----- --------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- ----- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.98%
- ----- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- ----- --------------------------------------------------------------------------
Page 6 of 9
This Amendment No. 2 (this "Amendment") to the Schedule 13D filed on June
22, 2007 by the Reporting Persons, as amended by Amendment No. 1 thereto filed
on June 29, 2007 (as so amended, the "Schedule 13D") relates to the Common Stock
of the Issuer and is being filed to amend the Schedule 13D as specifically set
forth below.
The information set forth in the Exhibits to this Amendment is hereby
expressly incorporated herein by reference, and the responses to each item of
this Amendment are qualified in their entirety by the provisions of such
Exhibits. Unless otherwise indicated, all capitalized terms shall have the
meanings ascribed to them in the Schedule 13D, and unless otherwise amended
hereby, all information previously filed remains in effect.
ITEM 4. IS AMENDED BY ADDING THE FOLLOWING:
Yesterday evening, AMLP sent a letter to the Board asking that the Board
reconsider the Issuer's current restructuring strategy and abandon its pursuit
of the proposed transaction with Centerbridge Capital Partners, L.P.
("Centerbridge"), which is described in the Issuer's current report on Form 8-K
filed on July 5, 2007 (the "Proposed Centerbridge Transaction"). As described in
the letter, AMLP has made a fully committed offer to replace Centerbridge on
terms superior to the terms of the Proposed Centerbridge Transaction. Notably,
AMLP's offer to replace Centerbridge is not subject to a due diligence
condition, despite the fact that the Issuer has not provided AMLP with the
opportunity to conduct any due diligence regarding the Issuer. AMLP has also
delivered with its letter to the Board a term sheet for an alternative
restructuring proposal, which AMLP believes will be materially more favorable to
stakeholders than the plan of reorganization proposed under the Proposed
Centerbridge Transaction. The foregoing summary of AMLP's July 18th letter to
the Board is qualified in its entirety by reference to the July 18th letter, a
copy of which is filed with this Amendment No. 2 as Exhibit 3 to the Schedule
13D.
While the Reporting Persons do not have any current plans or proposals,
except as otherwise described in this Statement, which relate to or would result
in any transaction, event or action enumerated in paragraphs (a) through (j) of
Item 4 of the form of Schedule 13D promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), each of the Reporting Persons reserves
the right, in light of its or his ongoing evaluation of the Issuer's financial
condition, business, operations and prospects, the market price of the Common
Stock, conditions in the securities markets generally, general economic and
industry conditions, its or his business objectives and other relevant factors,
to change its or his plans and intentions at any time, as it or he deems
appropriate. In particular, and without limiting the generality of the
foregoing, but subject to the terms of applicable court orders, restrictions and
agreements and to any limitations imposed by applicable law, including the
Exchange Act, each of the Reporting Persons (and their respective affiliates)
may (i) purchase additional shares of Common Stock or other securities of or
claims against the Issuer, (ii) sell or transfer shares of Common Stock or other
securities or claims beneficially owned by it or him from time to time in public
or private transactions and (iii) cause any of the Reporting Persons to
distribute in kind to their respective stockholders, partners or members, as the
case may be, shares of Common Stock or other securities or claims owned by such
Reporting Persons. The Reporting Persons may seek the views of, hold discussions
with, or respond to inquiries from members of the Issuer's management or Board
of Directors or other persons including other stockholders, or holders of
Page 7 of 9
claims in the Issuer's bankruptcy proceedings, regarding the Issuer's affairs,
restructuring or other strategic matters.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Item 7 of the Schedule 13D is supplemented as follows:
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------------
3 Letter sent by Appaloosa Management L.P. to the Members of the
Board of Directors of Dana Corporation, dated July 18, 2007,
together with attachment thereto.
Page 8 of 9
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: July 19, 2007
APPALOOSA INVESTMENT LIMITED
PARTNERSHIP I
By: APPALOOSA MANAGEMENT L.P.,
Its General Partner
By: APPALOOSA PARTNERS INC.,
Its General Partner
By: /s/ David A. Tepper
--------------------------
Name: David A. Tepper
Title: President
PALOMINO FUND LTD.
By: APPALOOSA MANAGEMENT L.P.,
Its Investment Adviser
By: APPALOOSA PARTNERS INC.,
Its General Partner
By: /s/ David A. Tepper
--------------------------
Name: David A. Tepper
Title: President
APPALOOSA MANAGEMENT L.P.
By: APPALOOSA PARTNERS INC.,
Its General Partner
By: /s/ David A. Tepper
--------------------------
Name: David A. Tepper
Title: President
APPALOOSA PARTNERS INC.
By: /s/ David A. Tepper
--------------------------
Name: David A. Tepper
Title: President
/s/ David A. Tepper
------------------------------
David A. Tepper
Page 9 of 9
Appaloosa Management L.P.
26 Main Street
Chatham, NJ 07928
July 18, 2007
TO: THE BOARD OF DIRECTORS OF DANA CORPORATION
4500 Dorr Street
Toledo, Ohio 43615
Ladies and Gentlemen:
The efforts of management and its advisors to pursue a plan sponsored by
Centerbridge Capital Partners, L.P. ("Centerbridge") have been fundamentally
flawed and, if continued, will yield far less than the maximum recoveries
available to stakeholders. It is the fiduciary responsibility of the Board to
ensure that management and its advisors pursue strategies designed to maximize
the value of the Debtors' estates for the benefit of all stakeholders. The Board
has failed in this regard.
As an initial matter, management and its advisors continue to resist our efforts
to obtain legitimately from the Company customary access to information needed
to support a plan-sponsorship proposal, which proposal we believe may pay
creditors in full and provide a return to current shareholders. To date,
management has conditioned our access to information upon us agreeing to give up
inherent rights of a stakeholder, including our right to make a proposal without
management's prior approval, and has ceded to Centerbridge material decision
making authority regarding the terms of access to information. The efforts of
management and its advisors in concert with Centerbridge to exclude interested
investors from the process will inevitably ensure that no alternative
competitive proposals ever materialize.
Furthermore, the Company's proposed transaction with Centerbridge and the Unions
(a) shifts significant estate decision-making authority to non-fiduciaries (the
unions and their financial advisor), (b) shifts material estate value to a third
party, without the benefit of a meaningful competitive bidding process, (c)
provides substantial value and benefits to management, and (d) is structured to
effectively preclude competing proposals.
To demonstrate the absurd and one-sided nature of the Centerbridge proposal, we
are prepared, and do hereby unconditionally commit, despite not being permitted
to conduct any due diligence, to fund and perform Centerbridge's obligations as
set forth in the "Terms of Centerbridge Investment," attached as Exhibit B to
Plan Support Agreement, filed as an exhibit to the Company's Form 8K, dated July
5, 2007, in exchange for the consideration to be provided to Centerbridge
thereunder, with the following improvements in favor of the Company: (1) we
agree to eliminate and waive any break-up fee; (2) we will enhance the
Conversion Price from .83 times Distributable Market Equity Value Per Share to
..90 times Distributable Market Equity Value per share (each term as defined in
the Terms of Centerbridge Investment); and (3) we will agree to the elimination
of barriers to the submission of competing proposals. We can make this
commitment with its enhancements over the Centerbridge proposal without the
benefit of any
due diligence, because the Centerbridge transaction is essentially risk-free to
Centerbridge. The Conversion Price, rather than being fixed on the basis of a
set enterprise value, which would permit stakeholders to assess the value of
their recovery, is instead set after-the-fact at a 17% discount to actual
trading value. In other words, given Centerbridge's guaranteed senior position
in the capital structure, they are assured of being "in the money" regardless of
(a) the Company's condition when it emerges from chapter 11 protection, or (b)
the total amount of allowed claims entitled to distributions under a plan of
reorganization. We believe this construct provides Centerbridge and its
co-investors with a risk free return of several hundred million dollars on their
investment at the expense of your stakeholders.
Notwithstanding our full commitment to pursue an alternative to the Centerbridge
transaction as outlined above, we believe that the structure of the Centerbridge
transaction, even as improved by us, remains fundamentally unfair to existing
stakeholders. As a consequence, based on our understanding of the Company and
its finances as set forth in publicly available information, and subject to our
and our financial advisors' (The Blackstone Group) satisfaction with
confirmatory due diligence (which we believe can be completed promptly with the
Company's support and cooperation), and the negotiation and preparation of
customary definitive documents, we are prepared to fund the Company's chapter 11
exit on the terms set forth on the attached plan term sheet. This proposal is
materially superior to the Centerbridge proposal because, among other things,
it:
(1) Aligns our interests as plan investors in the future success of the Company
with those of the other stakeholders;
(2) Appropriately values the Company allowing creditors to receive a full
recovery on their claims and provides a meaningful return to shareholders;
(3) Properly allocates the role of the Company's stakeholders in the selection
of a new board of directors and the Company's post-exit governance; and
(4) Ensures that management will be accountable to stakeholders on a
going-forward basis
Furthermore, while our proposal contemplates the full incorporation of the
economic terms of the Company's proposed settlement with its Unions, we are also
willing to pursue a transaction that does not require the incorporation of the
Union settlement, thereby permitting the Company to exercise fully its fiduciary
duty to pursue value maximizing transactions.
We implore you to review and reconsider the Company's current restructuring
strategy. The consequences of continued pursuit of this strategy will be
unfortunate. To protect their legitimate interests (that are being ignored by
the Company), stakeholders will be compelled to pursue remedies that are by
definition less efficient and more expensive than a proper resolution of this
chapter 11 case (but nonetheless more favorable than the outcome put forth by
the Company). At a minimum, the plan process will be hotly contested until its
conclusion (and perhaps beyond). In addition, parties may determine to pursue
other available stakeholder remedies.
2
We believe that the situation requires your immediate attention and
consideration. We are available to meet with the Board and its representatives
at your earliest convenience to discuss more fully the matters set forth herein
and to work toward an amicable, appropriate conclusion to Dana's chapter 11
case.
Sincerely,
APPALOOSA MANAGEMENT L.P.
- -------------------------
David Tepper
President
3
JULY 18, 2007
FOR DISCUSSION PURPOSES ONLY
TERM SHEET FOR
PLAN OF REORGANIZATION FOR DANA CORPORATION
Set forth below is a summary of indicative terms for a potential investment in
Dana Corporation by entities or funds controlled by Appaloosa Management L.P.
The investment is being made in connection with a Plan of Reorganization of Dana
Corporation under chapter 11 of the Bankruptcy Code. The terms set forth below
are intended solely to provide a framework for the parties as they proceed with
discussions of the proposed transaction and do not constitute any agreement with
respect to the definitive terms for any transaction or any agreement to agree or
any solicitation of acceptances or rejections of any plan of reorganization.
While the parties expect to negotiate in good faith with respect to the terms
for a transaction, any party shall be free to discontinue discussions and
negotiations at any time for any reason or no reason. No party shall be bound by
the terms hereof and only execution and delivery of definitive documentation
relating to the transaction shall result in any binding or enforceable
obligations of any party relating to the transaction.
New Equity Investment On the Effective Date, subject to participation
rights of existing stakeholders as more fully
set forth herein, Appaloosa Management LP
("AMLP") will fully commit up to $750 million of
equity financing, consisting of (i) $300 million
of Series A Preferred Stock, (ii) $100 million
of Series B Preferred Stock, (iii) up to $100
million of Series B Preferred Stock not
otherwise subscribed to in the Preferred Stock
Rights Offering, and (iv) up to $250 million of
New Common Stock not otherwise subscribed to in
the Common Stock Rights Offering (collectively,
the "Investment").
New Debt Financing On the Effective Date, the Company shall (i)
obtain a Senior Secured Facility in the amount
of $1.5 billion, and (ii) issue Unsecured Notes
in an amount to be determined (together, the
"Exit Facility"). The Exit Facility shall be
with parties and on market terms reasonably
acceptable to AMLP. Proceeds of the Exit
Facility shall be used to, among other things,
repay the DIP Facility, fund obligations under
the Plan, including partial cash distributions
to unsecured creditors, and fund business
operations.
Treatment of Secured and Secured and Priority Claims will be reinstated
Priority Claims or satisfied in full in cash on the Effective
Date.
4
Treatment of Unsecured Claims Unsecured Creditors shall receive, on account of
their Allowed Claims, (i) New Common Stock,
(ii) Excess Cash, and (iii) the right to
purchase their pro rata share of $100 million of
Series B Preferred Stock (the "Preferred Stock
Rights Offering"). Excess Cash shall mean the
(i) sum of the proceeds of the Exit Facility
plus cash on hand on the Effective Date, less
(ii) (a) amounts necessary to pay, or reserve
for payment of, all Allowed Administrative,
Secured and Priority Claims, and (b) amounts
necessary to fund business operations. It is
anticipated that distributions to Unsecured
Creditors will have a value equal to the full
amount of their Allowed Claims plus interest
accrued from the Petition Date at the applicable
non-default rate ("Payment in Full").
Treatment of Equity Holders Equity Holders shall receive the right to
purchase (the "Common Stock Rights Offering")
their pro rata share, based upon $250 million of
proceeds, of New Common Stock at an exercise
price equal to .85 times Plan Value (the
"Exercise Price"). Plan Value shall mean the
price per share that when combined with Excess
Cash results in Payment in Full of Unsecured
Creditors.
Preferred Stock Right AMLP shall commit to purchase at face value all
Offering Backstop Commitment Series Preferred B Stock offered in but not
issued pursuant to the Preferred Stock Rights
Offering.
Common Stock Rights Offering AMLP shall commit to purchase at the Exercise
Backstop Commitment Price all New Common Stock offered in but not
issued pursuant to the Common Stock Rights
Offering.
5
Preferred Stock Terms Each of the Series A Preferred Stock and the
Series B Preferred Stock (collectively, the
"Preferred Stock") shall have identical terms
except that Series A Preferred Stock shall have
certain voting and governance rights. Subject
to additional terms and conditions to be set
forth in the Definitive Agreements, (a) holders
of Preferred Stock shall be entitled to receive
a dividend at the annual rate of 4.0% of the
liquidation preference thereof, which if unpaid,
shall accrue, and (b) each share of Preferred
Stock shall be convertible, without any payment
by the holder thereof, into a number of shares
of New Common Stock equal to (i) the liquidation
preference divided by (ii) .85 times Plan Value.
AMLP shall be prohibited from receiving, in
exchange for the exercise or non-exercise of
voting rights, any compensation or renumeration.
Direct Investment AMLP shall have the option to purchase up to
$25 million of New Common Stock at the Exercise
Price in addition to any shares of New Common
Stock acquired pursuant to the Common Stock
Rights Offering or Common Stock Rights Offering
Backstop Commitment.
Governance Reorganized Dana Corporation shall have balanced
corporate governance pursuant to terms to be
agreed upon between AMLP and the Official
Committee of Unsecured Creditors.
Registration Rights Registration Rights shall be customary for a
transaction of this type.
Transaction Fees AMLP shall be entitled to payment of commitment,
backstop and other fees customarily payable in
connection with a transaction of this type and
magnitude.
Break-Up Fees AMLP shall be entitled to customary break-up
fees payable in connection with an at-risk
transaction.
6
Expense Reimbursement AMLP shall be entitled to reimbursement of all
reasonably incurred out of pocket costs and
expenses incurred in connection with pursuing
the Investment.
Definitive Agreements All obligations shall be subject to mutually
agreeable definitive agreements with customary
conditions, representations and warranties,
covenants and defaults.
Additional Investors It is anticipated, but not a condition, that
AMLP will arrange for additional investors to
participate in the Investment. Such additional
investors shall be subject to the consent of the
Company, such consent not to be unreasonably
withheld.
Governing Law New York
7