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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
SCHEDULE 13D/A
(Amendment No. 6)
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)
SEPTEMBER 21, 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. [ ]
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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
- ------------------------ ------ ------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF SHARES ------ ------------------------------------------------
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY 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
- ------------------------ ------ ------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF SHARES ------ ------------------------------------------------
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY 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
- ------------------------ ------ ------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF SHARES ------ ------------------------------------------------
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY 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
- ------------------------ ------ ------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF SHARES ------ ------------------------------------------------
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY 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
- ------------------------ ------ ------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF SHARES ------ ------------------------------------------------
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY 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. 6 (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, by Amendment No. 2 thereto filed on July 19, 2007, by
Amendment No. 3 thereto filed on July 23, 2007, by Amendment No. 4 thereto filed
on July 26, 2007, and by Amendment No. 5 thereto filed on August 22, 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:
On September 21, 2007, pursuant to the Order Pursuant to 11 U.S.C.
Sections 1113 and 1114(e) and Federal Rule of Bankruptcy Procedure 9019,
Approving Settlement Agreements with The United Steelworkers and United
Autoworkers, and Pursuant to 11 U.S.C. Sections 105(a), 363(b), 364(c), 503 and
507, Authorizing the Debtors to Enter into the Plan Support Agreement,
Investment Agreement and Related Agreements, dated August 1, 2007,
AMLP delivered to counsel to the Issuer and to counsel to
the official committee of unsecured creditors of the Issuer a final proposal
letter (the "Final Proposal Letter"), together with drafts of (i) an Amended
Joint Plan of Reorganization of Debtors and Debtors in Possession, (ii) a Plan
Support Agreement, (iii) an Investment Agreement, (iv) a Shareholders Agreement,
(v) Articles of Designation with Respect to Preferred Stock, (vi) a Series A
Registration Rights Agreement, (vii) a Series B Registration Rights Agreement,
and (viii) a Market Maker Agreement (such draft documents, collectively with the
Final Proposal Letter, the "Final Proposal Documents"). In the Final Proposal
Letter, AMLP reaffirmed the offer set forth in its prior Indication of Interest
dated August 17, 2007, subject to certain modifications summarized in the Final
Proposal Letter.
Copies of the Final Proposal Documents are filed with this Amendment No. 6
as Exhibits 7 through 15 to the Schedule 13D.
While the Reporting Persons do not have any current plans or proposals,
except as otherwise described in the Schedule 13D, 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
Page 7 of 9
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 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
- ----------- ------------------------------------------------------------------
7 Letter from Appaloosa Management L.P. to Counsel to the Debtors
and Counsel to the Official Committee of Unsecured Creditors,
dated September 21, 2007
8 Draft Amended Joint Plan of Reorganization of Debtors and Debtors
in Possession
9 Draft Plan Support Agreement, by and among Dana Corporation,
United Steelworkers International Union, UAW, and Appaloosa
10 Draft Investment Agreement
11 Draft Shareholders Agreement
12 Draft Articles of Designation with Respect to the Preferred Stock
13 Draft Series A Registration Rights Agreement
14 Draft Series B Registration Rights Agreement
15 Draft Market Maker Agreement
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: September 25, 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
September 21, 2007
COUNSEL TO THE DEBTORS
Jones Day
222 East 41st Street
New York, New York 10017
Phone: (212) 326-3939
Facsimile: (212) 755-7306
Attn: Corinne Ball, Esq.
(cball@jonesday.com)
Miller Buckfire & Co., LLC
250 Park Avenue, 19th Floor
New York, NY 10177
Phone: (212) 895-1818
Facsimile: (212) 895-1853
Attn: Richard Morgner
(richard.morgner@millerbuckfire.com)
COUNSEL TO THE OFFICIAL COMMITTEE
OF UNSECURED CREDITORS
Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, NY 10036
Attn: Thomas Moers Mayer, Esq.
(tmayer@kramerlevin.com)
Attn: Matthew Williams, Esq.
(mjwilliams@kramerlevin.com)
Ladies and Gentlemen:
This Final Proposal is being submitted in accordance with the terms of the
Order Pursuant to 11 U.S.C. Sections 1113 and 1114(e) and Federal Rule of
Bankruptcy Procedure 9019, Approving Settlement Agreements with The United
Steelworkers and United Autoworkers, and Pursuant to 11 U.S.C. Sections 105(a),
363(b), 364(c), 503 and 507, Authorizing the Debtors to Enter into Plan Support
Agreement, Investment Agreement and Related Agreements, dated August 1, 2007
(the "Settlement Order").
Structure and Amounts of Investment or Transaction; Modified Investment
Agreement and other Forms of Agreement: Appaloosa Management L.P. ("Appaloosa")
is pleased to reaffirm its outstanding offer to replace Centerbridge Capital
Partners, L.P. ("Centerbridge") as proposed investor as set forth in Appaloosa's
Indication of Interest dated August 17, 2007 (the "Indication of Interest"), and
in its letter to the Board of Directors of Dana Corporation (the
"Company") dated July 25, 2007, subject to the improvements and other
modifications described herein. In summary, our proposal is substantially
identical to the proposal made by Centerbridge (the "Centerbridge Proposal") as
described in the Settlement Order and in the definitive agreements with respect
thereto filed with the Company's current report on Form 8-K filed with the U.S.
Securities and Exchange Commission on July 26, 2007 (the "Centerbridge Proposal
Documents"), with the exception of certain material improvements and other
modifications to the Centerbridge Proposal, which are summarized on Schedule I
hereto.
As noted above, we believe that this Final Proposal is materially similar
to, and an improvement upon, the Centerbridge Proposal. Accordingly, we are
submitting with this Final Proposal drafts of (i) a Plan of Reorganization, (ii)
an Investment Agreement, including the schedules thereto (the Company Disclosure
Letter is included in the Centerbridge Proposal Documents), (iii) a Shareholders
Agreement, (iv) Articles of Designation of 4.0% Series A Convertible Preferred
Stock and 4.0% Series B Convertible Preferred Stock, (v) a Series A Registration
Rights Agreement, (vi) a Series B Registration Rights Agreement and (vii) a
Market Maker Agreement, which are marked to show changes from the corresponding
Centerbridge Proposal Documents. Appaloosa is prepared to execute promptly such
agreements on such modified terms, and with no due diligence or conditions other
than those expressly set forth in the agreements, and is prepared to support a
plan of reorganization on such modified terms. In this regard, we are also
submitting with this Final Proposal a draft Plan Support Agreement, marked to
show changes from the Plan Support Agreement with respect to the Centerbridge
Proposal. Our Final Proposal assumes that the Plan Support Agreement and the
Settlement Agreements with the United Steelworkers and United Autoworkers unions
would be in place with respect to the transactions contemplated by this Final
Proposal.
Changes From Indication of Interest. Except as set forth in Schedule I
hereto, our Final Proposal remains substantially identical to our prior
Indication of Interest.
Financing Requirements: There are no financing requirements or
contingencies relating to our obligations as purchaser or standby purchaser, as
the case may be, of the Series A Preferred Shares or Series B Preferred Shares.
The Company's obligations to obtain exit financing shall be as set forth in
Section 5.3 of the Investment Agreement under the Centerbridge Proposal.
Due Diligence: Our Final Proposal is not subject to any further due
diligence investigation.
Necessary Internal Approvals: None.
Necessary External Approvals: As set forth in the Centerbridge Proposal.
Other Material Conditions: As set forth in the Centerbridge Proposal.
Additional Information: Appaloosa's current plan is for the Company to run
the Company's business in accordance with management's business plan, and to
thereafter evaluate the Company's performance.
2
Disclosure of Connections with Parties In Interest: None.
We are available to meet with you and your 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.
This Final Proposal shall automatically terminate if the
Debtors have not submitted the proposals contained herein to the Unions prior to
September 25, 2007 and/or the Unions have not approved these proposals prior to
October 9, 2007.
Sincerely,
APPALOOSA MANAGEMENT L.P.
- ----------------------------
James Bolin
Partner
3
SCHEDULE I
Material Differences between
Appaloosa Final Proposal
And Centerbridge Proposal
---------------------------------------
1. Appaloosa proposes to eliminate and waive the break-up fee described in the
Centerbridge Proposal.
2. Appaloosa will enhance the conversion price from .83 times Distributable
Market Equity Value Per Share to .90 times Distributable Market Equity
Value Per Share (as defined in the Centerbridge Proposal Documents).
3. In lieu of the limited Rule 144A offering contemplated by the Centerbridge
Proposal, the right to purchase the Series B Preferred at par will be
offered to all holders of allowed unsecured claims on a pro rata basis (the
"Series B Rights Offering"). Any shares of Series B Preferred not purchased
in the Series B Rights Offering will be purchased at par by Appaloosa and
certain other entities (the "Standby Purchasers"), who shall receive a
guaranteed minimum of 40% of the Series B Preferred (unless waived by
Appaloosa) and a commitment fee of $10 million as consideration for their
agreement to perform the foregoing Standby Purchaser obligations.
4. Appaloosa proposes to eliminate the ceiling/floor "collar" mechanism
contained in the Centerbridge Proposal.
5. Most of Appaloosa's approval rights shall be subject to being over-ridden
by a 2/3 vote of common shareholders (not counting any shares held by
Appaloosa), with the exception of certain specified protective approval
rights which are not subject to over-ride. The approval rights not subject
to over-ride relate to (i) issuance of securities that are senior to or on
parity with the Series A Preferred (or Series B Preferred, if any are
outstanding and owned by Appaloosa), (ii) amendments to the Company's
by-laws that materially change the rights of members of the Investor Group
or Qualified Purchaser Transferees or the Company's shareholders generally,
or to the Charter or Articles if the amendment would adversely impact
Appaloosa's rights or investment and (iii) other than the annual 4.0%
dividends on the Series B Preferred, declaration and payment of dividends
on stock that ranks junior to or on parity with the Series A Preferred.
6. The initial Board of Directors shall be selected as follows:
o Appaloosa shall select 3 directors;
o the UCC shall select 3 directors;
o one director shall be the CEO;
o one director shall be the new Executive Chairman (selected as
described below); and
o one director shall be selected by the Standby Purchasers other
than Appaloosa.
4
At least two-thirds (2/3 of the Board of Directors must be
comprised of independent directors.
7. The initial Executive Chairman of the Board shall be selected by a
selection committee comprised of one Appaloosa representative and one
representative of the Standby Purchasers (other than Appaloosa). The
Executive Chairman shall be approved by a majority vote of the Selection
Committee (such majority vote to include the Appaloosa representative). Any
successor Executive Chairman shall be selected by the Nominating and
Governance Committee of the Board, subject to the approval of Appaloosa.
8. The Executive Chairman shall be a full-time employee of the Company with
his or her principal office in the Company's world headquarters in Toledo,
Ohio and shall devote substantially all of his or her business activity to
the business affairs of the Company.
The Executive Chairman shall cause the Company to and the Company shall be
obligated to meaningfully consult with the representatives of Appaloosa
with respect to the annual budget and material modifications thereto prior
to the time it is submitted to the Board for approval.
The employment agreements entered into by the Company with the Executive
Chairman, the Chief Executive Officer and the Chief Financial Officer shall
provide that (i) upon any termination of employment, the Executive
Chairman, the Chief Executive Officer and/or the Chief Financial Officer
shall resign as a director, to the extent applicable (and the employment
agreements shall require delivery at the time such agreements are entered
into of an executed irrevocable resignation that becomes effective on such
termination) and (ii) the right to receive any payments or other benefits
upon termination of employment shall be conditioned upon such resignation.
If for any reason the Executive Chairman, the Chief Executive Officer or
the Chief Financial Officer does not resign or the irrevocable resignation
is determined to be ineffective, then the Series A Preferred Stock holders
may remove the Executive Chairman, the Chief Executive Officer and/or the
Chief Financial Officer as a director, subject to applicable law.
9. All of Appaloosa's approval rights shall continue until the earlier of (i)
the date on which Appaloosa ceases to own Series A Preferred Shares having
an aggregate liquidation preference of at least $125 million and (ii) the
third anniversary of Appaloosa's investment (as opposed to having a
potentially earlier expiration date with respect to approval rights
relating to (x) issuances of senior or pari passu securities and (y)
declaration and payment of dividends).
10. Appaloosa proposes to include an additional closing condition to the effect
that there shall not have occurred any material strike or labor stoppage or
slowdown at the Company, General Motors, Chrysler, Ford Motor Company or
any of their respective subsidiaries.
5
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- --------------------------------------------x
:
In re : Chapter 11
:
Dana Corporation, et al., : Case No. 06-10354 (BRL)
:
Debtors. : (Jointly Administered)
:
:
- --------------------------------------------x AMENDED-JOINT PLAN OF
REORGANIZATION
OF DEBTORS AND DEBTORS IN
POSSESSION
--------------------------------
JONES DAY
222 East 41st Street
New York, New York 10017
Telephone: (212) 326-3939
Facsimile: (212) 755-7306
Corinne Ball (CB 8203)
Richard H. Engman (RE 7861)
-AND-
JONES DAY
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Telephone: (216) 586-3939
Facsimile: (216) 579-0212
Heather Lennox (HL 3046)
Carl E. Black (CB 4803)
Ryan T. Routh (RR 1994)
-AND-
JONES DAY
1420 Peachtree Street, N.E.
Suite 800
Atlanta, Georgia 30309-3053
Telephone: (404) 521-3939
Facsimile: (404) 581-8330
Jeffrey B. Ellman (JE 5638)
Attorneys for Debtors and
Debtors in Possession
_____ __, 2007
TABLE OF CONTENTS
Page
ARTICLE I. DEFINED TERMS, RULES OF INTERPRETATION AND COMPUTATION
OF TIME..........................................................1
A. Defined Terms.....................................................1
B. Rules of Interpretation and Computation of Time..................18
1. Rules of Interpretation.....................................18
2. Computation of Time.........................................18
ARTICLE II. CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS; CRAMDOWN;
EXECUTORY CONTRACTS & UNEXPIRED LEASES..........................18
A. Unclassified Claims..............................................18
1. Payment of Administrative Claims............................18
2. Payment of Priority Tax Claims..............................21
B. Classified Claims and Interests..................................21
1. Priority Claims Against the Consolidated Debtors
(Class 1A Claims)..........................................21
2. Priority Claims Against EFMG (Class 1B Claims)..............21
3. Secured Claims Against the Consolidated Debtors Other Than
the Port Authority Secured Claim (Class 2A Claims).........21
4. Secured Claims Against EFMG (Class 2B Claims)...............22
5. Port Authority Secured Claim (Class 2C Claim)...............22
6. Asbestos Personal Injury Claims (Class 3 Claims)............22
7. Convenience Claims Against the Consolidated Debtors
(Class 4 Claims)...........................................23
8. General Unsecured Claims Against EFMG (Class 5A Claims).....23
9. 5.85% Bond Claims (Class 5B Claims).........................23
10. 6.5% and 7% Bond Claims (Class 5C Claims)...................23
11. 9% Bond Claims (Class 5D Claims)............................23
12. 10.125% Bond Claims (Class 5E Claims).......................23
13. Other General Unsecured Claims Against the Consolidated
Debtors (Class 5F Claims)..................................23
14. Union Claim (Class 5G Claim)................................23
15. Prepetition Intercompany Claims (Class 6A Claims)...........23
16. Claims of Wholly-Owned and Majority-Owned Non-Debtor
Affiliates Other than DCC (Class 6B Claims)................23
17. DCC Claim (Class 6C Claim)..................................24
18. Old Common Stock of Dana (Class 7A Interests)...............24
19. Section 510(b) Old Common Stock Claims Against the
Consolidated Debtors (Class 7B Claims).....................24
20. Subsidiary Debtor Equity Interests (Class 8 Interests)......24
-i-
TABLE OF CONTENTS
(continued)
Page
C. Special Provisions Regarding the Treatment of Allowed Secondary
Liability Claims; Maximum Recovery..............................24
D. Confirmation Without Acceptance by All Impaired Classes..........24
E. Treatment of Executory Contracts and Unexpired Leases............25
1. Executory Contracts and Unexpired Leases to Be Assumed......25
2. Approval of Assumptions and Assignments; Assignments
Related to Restructuring Transactions......................26
3. Payments Related to the Assumption of Executory Contracts
or Unexpired Leases........................................26
4. Contracts and Leases Entered Into After the Petition Date...26
5. Rejection of Executory Contracts and Unexpired Leases.......26
6. Bar Date for Rejection Damages..............................27
7. Special Executory Contract and Unexpired Lease Issues.......27
8. No Change in Control........................................28
ARTICLE III. THE GLOBAL SETTLEMENT............................................28
A. Assumption and Assignment of Collective Bargaining Agreements....28
B. Cessation of Union Retiree and Long Term Disability Benefits.....28
C. Contributions to UAW Union Retiree VEBA and USW Union
Retiree VEBA....................................................28
D. Assumption and Assignment of Pension Benefits....................28
E. Emergence Bonus for Union Employees..............................29
F. The New Equity Investment........................................29
G. New Employment Agreements........................................29
H. Limitations on Sales of Core Businesses Prior to Effective Date..29
ARTICLE IV. CONFIRMATION OF THE PLAN.........................................29
A. Conditions Precedent to Confirmation.............................29
B. Conditions Precedent to the Effective Date.......................30
C. Waiver of Conditions to the Confirmation or Effective Date.......30
D. Effect of Nonoccurrence of Conditions to the Effective Date......30
E. Effect of Confirmation of the Plan...............................31
1. Dissolution of Official Committees..........................31
2. Preservation of Rights of Action by the Debtors and the
Reorganized Debtors; Recovery Actions......................31
3. Comprehensive Settlement of Claims and Controversies........31
4. Discharge of Claims and Termination of Interests............31
5. Injunction..................................................32
6. Releases....................................................33
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TABLE OF CONTENTS
(continued)
Page
7. Exculpation.................................................33
8. Termination of Certain Subordination Rights and Settlement
of Related Claims and Controversies........................34
ARTICLE V. MEANS FOR IMPLEMENTATION OF THE PLAN.............................34
A. Continued Corporate Existence and Vesting of Assets..............34
B. Restructuring Transactions.......................................35
1. Restructuring Transactions Generally........................35
2. Obligations of Any Successor Corporation in a Restructuring
Transaction................................................35
C. Corporate Governance and Directors and Officers..................35
1. Certificates of Incorporation and Bylaws of New Dana Holdco
and the Other Reorganized Debtors..........................35
2. Directors and Officers of New Dana Holdco and the Other
Reorganized Debtors........................................36
3. Compliance with Exchange Act by New Dana Holdco.............36
D. New Dana Holdco Common Stock.....................................36
1. Issuance and Distribution of New Dana Holdco Common Stock...36
2. Listing.....................................................36
3. Section 1145 Exemption......................................36
E. Employment, Retirement and Other Related Agreements; Cessation
of Retiree Benefits; Workers' Compensation Programs.............37
1. Employment-Related Agreements...............................37
2. Cessation of Retiree Benefits...............................37
3. Continuation of Workers' Compensation Programs..............37
4. Emergence Bonus for Non-Union Employees.....................37
F. Corporate Action.................................................37
G. Creditor Oversight Committee.....................................38
1. Composition.................................................38
2. Rights and Responsibilities.................................38
3. Fees and Expenses of the Creditor Oversight Committee.......38
H. Special Provisions Regarding Insured Claims......................38
1. Limitations on Amounts to Be Distributed to Holders of
Allowed Insured Claims.....................................38
2. Reinstatement and Continuation of Insurance Policies........38
I. Cancellation and Surrender of Instruments, Securities and
Other Documentation.............................................38
1. Bonds.......................................................38
2. Old Common Stock............................................39
J. Release of Liens.................................................39
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TABLE OF CONTENTS
(continued)
Page
K. Effectuating Documents; Further Transactions; Exemption from
Certain Transfer Taxes..........................................39
ARTICLE VI. PROVISIONS GOVERNING DISTRIBUTIONS...............................39
A. Distributions for Claims and Interests Allowed as of the
Effective Date..................................................39
B. Method of Distributions to Holders of Claims and Interests.......40
C. Compensation and Reimbursement for Services Related to
Distributions...................................................40
D. Provisions Governing Disputed Unsecured Claims Reserve...........40
1. Funding of the Disputed Unsecured Claims Reserve............40
2. Dividends and Distributions.................................40
3. Recourse....................................................40
4. Voting of Undelivered New Dana Holdco Common Stock..........41
5. Tax Treatment...............................................41
E. Delivery of Distributions and Undeliverable or Unclaimed
Distributions...................................................41
1. Delivery of Distributions...................................41
2. Undeliverable Distributions Held by Disbursing Agents.......42
F. Timing and Calculation of Amounts to Be Distributed..............42
1. Distributions to Holders of Allowed Claims in Classes
Other than 5B, 5C, 5D, 5E, 5F and 7B.......................42
2. Postpetition Interest on Claims.............................43
3. Post-Effective Date Interest on Claims......................43
4. Distributions to Holders of Allowed Claims in Classes 5B,
5C, 5D, 5E and 5F..........................................43
5. Distributions to Holders of Allowed Interests in Class 7A
and Allowed Claims in Class 7B.............................43
6. Distributions of New Dana Holdco Common Stock - No
Fractional Shares; Rounding................................44
7. De Minimis Distributions....................................44
8. Administration and Distribution of Union Emergence Shares...44
G. Distribution Record Date.........................................44
H. Means of Cash Payments...........................................45
I. Foreign Currency Exchange Rate...................................45
J. Establishment of Reserves........................................45
K. Surrender of Canceled Instruments or Securities..................45
1. Tender of Bonds.............................................45
2. Lost, Stolen, Mutilated or Destroyed Bonds..................45
3. Failure to Surrender Bonds..................................45
4. Tender of Old Common Stock of Dana..........................46
5. Lost, Stolen, Mutilated or Destroyed Old Common
Stock of Dana..............................................46
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TABLE OF CONTENTS
(continued)
Page
6. Failure to Surrender Old Common Stock of Dana...............46
L. Withholding and Reporting Requirements...........................46
M. Setoffs..........................................................47
N. Application of Distributions.....................................47
ARTICLE VII. PROCEDURES FOR RESOLVING DISPUTED CLAIMS.........................47
A. Treatment of Disputed Claims.....................................47
1. ADR Procedures..............................................47
2. Tort Claims.................................................47
3. Disputed Insured Claims.....................................48
4. No Distributions Pending Allowance..........................48
B. Prosecution of Objections to Claims..............................48
1. Objections to Claims........................................48
2. Authority to Prosecute Objections...........................48
3. Authority to Amend Schedules................................49
C. Distributions on Account of Disputed Claims Once Allowed.........49
ARTICLE VIII.CONSOLIDATION OF THE DEBTORS.....................................49
A. Consolidation....................................................49
B. Order Granting Consolidation.....................................49
ARTICLE IX. RETENTION OF JURISDICTION........................................50
ARTICLE X. MISCELLANEOUS PROVISIONS.........................................51
A. Modification of the Plan.........................................51
B. Revocation of the Plan...........................................51
C. Severability of Plan Provisions..................................51
D. Successors and Assigns...........................................51
E. The New Investment Agreement and Union Settlement Agreements.....51
F. Service of Documents.............................................52
1. The Debtors and Reorganized Debtors........................52
2. The Creditors' Committee....................................52
3. The Retiree Committee.......................................53
4. The Ad Hoc Bondholders' Committee...........................53
5. Centerbridge and CBP........................................53
6. The Unions..................................................53
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TABLE OF EXHIBITS
Exhibit I.A.57 Creditor Oversight Committee Agreement
Exhibit I.A.65 Debtors in the Chapter 11 Cases
Exhibit I.A.91 Principal Terms of the Exit Facility
Exhibit I.A.131 Pension Plans to Be Assumed and Assigned
Exhibit II.E.1.a Executory Contracts and Unexpired Leases to be Assumed
Exhibit II.E.1.c Joint Venture Agreements to be Assumed and Assigned
Exhibit II.E.5 Executory Contracts and Unexpired Leases to be Rejected
Exhibit III.A Collective Bargaining and Related Agreements to be Assumed
and Assigned
Exhibit V.B.1 Restructuring Transactions
Exhibit V.C.1.a Certificate of Incorporation (or Comparable Constituent
Documents) of New Dana Holdco, including New Dana Holdco's
Certificate of Designations and Form Certificates of
Incorporation (or Comparable Constituent Documents) for the
Other Reorganized Debtors
Exhibit V.C.1.b Bylaws (or Comparable Constituent Documents) of New Dana
Holdco and Form Bylaws (or Comparable Constituent
Documents) for the Other Reorganized Debtors
Exhibit V.C.2 Initial Directors and Officers of New Dana Holdco and Each
Other Reorganized Debtor
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INTRODUCTION
Dana Corporation, a Virginia corporation, and the other
above-captioned debtors and debtors in possession (collectively, as further
defined below, the "Debtors") propose the following joint plan of reorganization
for the resolution of the outstanding claims against and equity interests in the
Debtors. The Debtors are the proponents of the Plan (as such term is defined
below) within the meaning of section 1129 of the Bankruptcy Code (as such term
is defined below). Reference is made to the Debtors' Disclosure Statement (as
such term is defined below), distributed contemporaneously with the Plan, for a
discussion of the Debtors' history, business, results of operations, historical
financial information, projections and properties and for a summary and analysis
of the Plan. Other agreements and documents supplement the Plan and have been or
will be filed with the Bankruptcy Court (as such term is defined below). These
supplemental agreements and documents are referenced in the Plan and the
Disclosure Statement and will be available for review.
ARTICLE I.
DEFINED TERMS, RULES OF INTERPRETATION
AND COMPUTATION OF TIME
A. DEFINED TERMS
As used in the Plan, capitalized terms have the meanings set forth
below. Any term that is not otherwise defined herein, but that is used in the
Bankruptcy Code or the Bankruptcy Rules (as each such term is defined below),
will have the meaning given to that term in the Bankruptcy Code or the
Bankruptcy Rules, as applicable.
1. "5.85% Bonds" means the unsecured notes issued under the 5.85% Bonds
Indenture.
2. "5.85% Bonds Indenture" means the Indenture for Senior Securities
between Dana, as Issuer, and Citibank, N.A., as Trustee, dated December 10,
2004, relating to the $450 million 5.85% Notes due January 15, 2015, as the same
may have been subsequently modified, amended or supplemented, together with all
instruments and agreements related thereto.
3. "5.85% Bond Claim" means a Claim against a Debtor under or evidenced
by a 5.85% Bond.
4. "6.5% and 7% Bonds" means the unsecured notes issued under the 6.5%
and 7% Bonds Indenture.
5. "6.5% and 7% Bonds Indenture" means the Indenture for Senior
Securities between Dana, as Issuer, and Citibank, N.A., as Trustee, dated
December 15, 1997, relating to the (a) $350 million 6.5% Notes due March 1,
2009, (b) $400 million 7% Notes due March 1, 2029, (c) $150 million 6.5% Notes
due March 15, 2008 and (d) $200 million 7% Notes due March 15, 2028, as the same
may have been subsequently modified, amended or supplemented, together with all
instruments and agreements related thereto.
6. "6.5% and 7% Bond Claim" means a Claim against a Debtor under or
evidenced by a 6.5% and 7% Bond.
7. "9% Bonds" means the unsecured notes issued under the 9% Bonds
Indenture.
8. "9% Bonds Indenture" means the Indenture between Dana, as Issuer, and
Citibank, N.A., as Trustee, Registrar and Paying Agent for the Dollar
Securities, and Citibank, N.A., London Branch, as Registrar and Paying Agent for
the Euro Securities, dated August 8, 2001, relating to the (a) $575 million 9%
Notes due August 15, 2011 and (b)(euro)200 9% Notes due August 15, 2011, as the
same may have been subsequently modified, amended or supplemented, together with
all instruments and agreements related thereto.
9. "9% Bond Claim" means a Claim against a Debtor under or evidenced by a
9% Bond.
10. "10.125% Bonds" means the unsecured notes issued under the 10.125%
Bonds Indenture.
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11. "10.125% Bonds Indenture" means the Indenture between Dana, as Issuer,
and Citibank, N.A., as Trustee, Registrar and Paying Agent, dated March 11,
2002, relating to the $250 million 10.125% Notes due March 15, 2010, as the same
may have been subsequently modified, amended or supplemented, together with all
instruments and agreements related thereto.
12. "10.125% Bond Claim" means a Claim against a Debtor under or evidenced
by a 10.125% Bond.
13. "Ad Hoc Bondholders' Committee" means the ad hoc committee of holders
of Bonds represented by Stroock & Stroock & Lavan LLP.
14. "Ad Hoc Steering Committee" means DK Partners; Dune Capital
Management, LP; Franklin Mutual Advisers; and Silver Point Capital LP or, if any
of the aforementioned parties are no longer Bondholders, the four largest
Bondholders that have executed appropriate confidentiality agreements with the
Debtors and who are members of the Ad Hoc Bondholders' Committee.
15. "Administrative Claim" means a Claim against a Debtor or its Estate
arising on or after the Petition Date and prior to the Effective Date for a cost
or expense of administration in the Chapter 11 Cases that is entitled to
priority or superpriority under sections 364(c)(1), 503(b), 503(c), 507(b) or
1114(e)(2) of the Bankruptcy Code, including: (a) the actual and necessary costs
and expenses incurred after the Petition Date of preserving the Estates and
operating the businesses of the Debtors (such as wages, salaries, commissions
for services and payments for inventories, leased equipment and premises); (b)
Claims under the DIP Credit Agreement; (c) compensation for legal, financial
advisory, accounting and other services and reimbursement of expenses awarded or
allowed under sections 330(a) or 331 of the Bankruptcy Code, including Fee
Claims; (d) any Allowed Claims for reclamation under section 546(c)(1) of the
Bankruptcy Code; (e) Claims, pursuant to section 503(b)(9) of the Bankruptcy
Code, for the value of goods received by the Debtors in the 20 days immediately
prior to the Petition Date and sold to the Debtors in the ordinary course of the
Debtors' businesses; (f) all fees and charges assessed against the Estates under
chapter 123 of title 28, United States Code, 28 U.S.C. Sections 1911-1930; (g)
any Claims entitled to administrative priority under the Union Settlement
Agreements as approved by the Global Settlement Order; (h) any Claims of
Centerbridge entitled to superpriority under the Old Investment Agreement as
approved by the Global Settlement Order; (i) any Claims of Appaloosa and the
Standby Purchasers arising under the Appaloosa Investment Agreement as approved
by the Appaloosa Approval Order; and (j) all Postpetition Intercompany Claims
other than Postpetition Intercompany Claims entered into a Debtor's
"intercompany equity" account for internal accounting purposes after the close
of 2006.
16. "ADR Order" means the Order, Pursuant to Sections 105 and 502 of the
Bankruptcy Code and Bankruptcy Rules 3007 and 9019, Approving Alternative
Dispute Resolution Procedures to Promote the Resolution of Certain Prepetition
Claims (Docket No. 5372), entered by the Bankruptcy Court on May 23, 2007, as it
may be amended or supplemented from time to time.
17. "ADR Procedures" means the alternative dispute resolution procedures
approved by the ADR Order.
18. "Affiliate" means any Person that, directly or indirectly, through one
or more intermediaries, Controls, is Controlled by or is under Common Control
with, another Person; provided that, Appaloosa is not to be considered an
Affiliate of Dana.
19. "Allowed...Claim" or "Allowed...Interest" means an Allowed Claim or
Allowed Interest, as the case may be, in the particular Class or category
specified.
20. "Allowed Claim" when used:
a. with respect to any Claim other than an Administrative Claim,
means a Claim that is not a Disallowed Claim and:
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(i)(A) is listed on a Debtor's Schedules and not designated in
the Schedules as either disputed, contingent or unliquidated and (B) is not
otherwise a Disputed Claim;
(ii)(A) as to which no objection to allowance has been
interposed on or before the Claims Objection Bar Date or such other applicable
period of limitation fixed by the Plan, the Confirmation Order, the Bankruptcy
Rules or a Final Order for objecting to such Claims and (B) is not otherwise a
Disputed Claim; or
(iii) that is allowed: (A) in any Stipulation of Amount and
Nature of Claim executed by the applicable Claim holder on or after the
Effective Date, (B) in any contract, instrument or other agreement entered into
in connection with the Plan and, if prior to the Effective Date, approved by the
Bankruptcy Court, (C) pursuant to a Final Order or (D) pursuant to the terms of
the Plan; and
b. with respect to an Administrative Claim, means an Administrative
Claim that is not a Disallowed Claim and:
(i)(A) as to which no objection to allowance has been interposed
on or before the Claims Objection Bar Date or such other applicable period of
limitation fixed by the Plan, the Confirmation Order, the Bankruptcy Rules or a
Final Order for objecting to such Claims and (B) is not otherwise a Disputed
Claim; or
(ii) that is allowed: (A) in any Stipulation of Amount and Nature
of Claim executed by the applicable Claim holder on or after the Effective Date,
(B) in any contract, instrument or other agreement entered into in connection
with the Plan and, if prior to the Effective Date, approved by the Bankruptcy
Court, (C) pursuant to a Final Order or (D) pursuant to Section II.A.1.
21. "Allowed Interest" means an Interest registered in the stock register,
membership interest register or any similar register or schedule maintained by
or on behalf of a Debtor as of the Distribution Record Date and not timely
objected to or that is allowed by a Final Order.
22. "Appaloosa" means Appaloosa Management L.P., it affiliates and
successors and assigns under the Appaloosa Investment Agreement.
23. "Appaloosa Approval Order" means the Order Authorizing the Debtors to
Enter Into the Appaloosa Plan Support Agreement, the Appaloosa Investment
Agreement and Related Agreements, entered _____ __ 1, 2007 (Docket No. [____]),
and the exhibits thereto.
24. "Appaloosa Investment Agreement" means, collectively, the Investment
Agreement by and between Dana and Appaloosa, dated ____ __, 2007, and the
exhibits thereto, approved by the Appaloosa Approval Order,
25. "Appaloosa Plan Support Agreement" means, collectively, the Plan
Support Agreement among Dana, Appaloosa, the Unions and certain holders of
General Unsecured Claims, dated as of ___ __, 2007, and the exhibits thereto,
approved by the Appaloosa Approval Order, as it may be further amended, modified
or supplemented.
26. "Asbestos Personal Injury Claim" means any Claim, remedy, liability or
demand, held by or asserted on behalf of an individual, now existing or
hereafter arising against any Debtor, whether or not such Claim, remedy,
liability or demand is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured, whether or not the facts of or legal bases therefor are known or
unknown, under any theory of law, equity, admiralty or otherwise (including
piercing the corporate veil, alter ego and similar theories), for death, bodily
injury, sickness, disease, medical monitoring or other personal injuries
(whether physical, emotional or otherwise) to the extent allegedly arising out
of or based on, directly or indirectly, in whole or in part, the presence of or
exposure to asbestos or asbestos-containing products or things that were
installed, engineered, designed, manufactured, fabricated, constructed, sold,
supplied, produced, specified, selected, distributed, released, marketed,
serviced, maintained, repaired, purchased, owned, occupied, used, removed,
replaced or disposed of by any Debtor or an entity for whose products or
operations any Debtor allegedly
-3-
has liability or for which any Debtor is otherwise allegedly liable, including
any Claim, remedy, liability or demand for compensatory damages (such as loss of
consortium, lost wages or other opportunities, wrongful death, medical
monitoring, survivorship, proximate, consequential, general and special damages)
or punitive damages related thereto, and any Claim under any settlement entered
into by or on behalf of any Debtor prior to or after the Petition Date of an
Asbestos Personal Injury Claim. Asbestos Personal Injury Claim does not include
(a) a workers' compensation claim brought directly by a past or present employee
of any Debtor under an applicable workers' compensation statute or (b) a Claim
for indemnity, contribution or reimbursement asserted on account of an Asbestos
Personal Injury Claim (as such term is defined in the preceding sentence) by
entities other than the allegedly injured individual.
27. "Assets" means all of a Debtor's property, rights and interest that
are property of a Debtor's Estate pursuant to section 541 of the Bankruptcy
Code.
28. "Ballot" means the form or forms distributed to each holder of an
impaired Claim or Interest entitled to vote on the Plan on which the holder
indicates either acceptance or rejection of the Plan and (when applicable) any
election for treatment of such Claim or Interest under the Plan.
29. "Bankruptcy Code" means title 11 of the United States Code, as now in
effect or hereafter amended, as applicable to these Chapter 11 Cases.
30. "Bankruptcy Court" means the United States District Court having
jurisdiction over the Chapter 11 Cases and, to the extent of any reference made
pursuant to 28 U.S.C. Section 157, the bankruptcy unit of such District Court.
31. "Bankruptcy Rules" means, collectively, the Federal Rules of
Bankruptcy Procedure and the local rules of the Bankruptcy Court, as now in
effect or hereafter amended.
32. "Bar Date" means the applicable bar date by which a proof of Claim
must be, or must have been, Filed, as established by an order of the Bankruptcy
Court, including a Bar Date Order and the Confirmation Order.
33. "Bar Date Order" means any order of the Bankruptcy Court establishing
Bar Dates for Filing proofs of Claim in the Chapter 11 Cases, including the
Order Establishing Bar Dates for Filing Proofs of Claim and Approving Form and
Manner of Notice Thereof, entered on July 19, 2006 (Docket No. 2073), as the
same may be amended, modified or supplemented.
34. "Bondholder" means a holder of a Bondholder Claim.
35. "Bondholder Claim" means any Claim against a Debtor under or evidenced
by a Bond.
36. "Bonds" means, collectively: (a) the 5.85% Bonds; (b) the 6.5% and 7%
Bonds; (c) the 9% Bonds; and (d) the 10.125% Bonds.
37. "Business Day" means any day, other than a Saturday, Sunday or "legal
holiday" (as defined in Bankruptcy Rule 9006(a)).
38. "Case Management Order" means the Amended Administrative Order,
Pursuant to Rule 1015(c) of the Federal Rules of Bankruptcy Procedure,
Establishing Case Management and Scheduling Procedures (Docket No. 574), entered
on March 23, 2006, as it may be amended from time to time.
39. "Cash" means legal tender of the United States of America and
equivalents thereof.
40. "Cash Investment Yield" means the net yield earned by the applicable
Disbursing Agent from the investment of Cash held pending distribution pursuant
to the Plan (including any Cash received by the Disbursing Agent on account of
dividends and other distributions on the Reserved Shares), which investment will
be in a manner consistent with Dana's investment and deposit guidelines.
-4-
41. "Catch-Up Distribution" means: (a) with respect to each holder of an
Allowed Claim in Classes 5B, 5C, 5D, 5E and 5F that was previously a Disputed
Claim, the amount of Reserved Shares and Reserved Excess Minimum Cash equal to
the aggregate amount of any (i) Distributable Shares of New Dana Holdco Common
Stock, (ii) Distributable Excess Minimum Cash, (iii) Reserved Shares and (iv)
Reserved Excess Minimum Cash (if any) that such holder would have received if
its Claim had been an Allowed Claim on the Effective Date and each Periodic
Distribution Date preceding the date the Claim became Allowed; and (b) with
respect to each holder of an Allowed Claim in Class 7B that was previously a
Disputed Claim, the amount of Reserved Shares and Reserved Excess Minimum Cash
equal to the aggregate amount of any Reserved Shares and Reserved Excess Minimum
Cash (if any) that such holder would have received if its Claim had been an
Allowed Claim on the Periodic Distribution Date upon which (i) all Disputed
Claims in Classes other than Class 7B entitled to distributions were resolved
and (ii) all distributions to which the holders of such Claims were entitled
pursuant to the terms of the Plan were made from the Disputed Unsecured Claims
Reserve.
42. "CBP" means CBP Parts Acquisition Co. LLC, one of the New Equity
Investors.
43. "Centerbridge" means Centerbridge Capital Partners, L.P.
44. "Chapter 11 Cases" means, collectively, the cases commenced under
chapter 11 of the Bankruptcy Code by the Debtors in the Bankruptcy Court.
45. "Claim" means a claim (as defined in section 101(5) of the Bankruptcy
Code) against a Debtor.
46. "Claims Objection Bar Date" means, for all Claims, including Claims
asserting priority under section 503(b)(9) of the Bankruptcy Code, other than
Allowed Claims, the latest of: (a) 150 days after the Effective Date, subject to
extension by order of the Bankruptcy Court; (b) 90 days after the Filing of a
proof of Claim for such Claim; and (c) such other period of limitation as may be
specifically fixed by the Plan, the Confirmation Order, the Bankruptcy Rules or
a Final Order for objecting to such a Claim.
47. "Class" means a class of Claims or Interests, as described in
Article II.
48. "Confirmation" means the entry of the Confirmation Order on the docket
of the Bankruptcy Court.
49. "Confirmation Date" means the date on which the Bankruptcy Court
enters the Confirmation Order on its docket, within the meaning of Bankruptcy
Rules 5003 and 9021.
50. "Confirmation Exhibits" means, collectively, the documents listed on
the "Table of Exhibits" included herein, which documents will be Filed no later
than five days before the Confirmation Hearing, to the extent not filed earlier.
All Confirmation Exhibits will be made available on the Document Websites once
they are Filed. The Debtors reserve the right, in accordance with the terms
hereof, to modify, amend, supplement, restate or withdraw any of the
Confirmation Exhibits after they are Filed and shall promptly make such changes
available on the Document Websites.
51. "Confirmation Hearing" means the hearing held by the Bankruptcy Court
on Confirmation of the Plan, as such hearing may be continued from time to time.
52. "Confirmation Order" means the order of the Bankruptcy Court
confirming the Plan pursuant to section 1129 of the Bankruptcy Code.
53. "Consolidated Debtors" means, collectively, all of the Debtors other
than EFMG.
54. "Control," "Controlled by" and "under Common Control with" means
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
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55. "Convenience Claims" means General Unsecured Claims against any of the
Consolidated Debtors that otherwise would be classified in Class 5F, but, with
respect to each such Claim, either (a) the amount of such Claim is equal to or
less than $5,000 or (b) is reduced to $5,000 pursuant to an election by the
Claim holder made on the Ballot provided for voting on the Plan by the Voting
Deadline.
56. "Creditor Oversight Committee" means the committee established
pursuant to Section V.G to oversee the unsecured claims reconciliation process
and direct the Disbursing Agent or Third Party Disbursing Agent, as applicable,
with respect to distributions under the Plan to Classes 5B, 5C, 5D, 5E and 5F,
the membership of which shall be chosen by the Creditors' Committee in
consultation with the Debtors.
57. "Creditor Oversight Committee Agreement" means the agreement, which
shall be in form and substance reasonably acceptable to the Creditors'
Committee, the Debtors, the Reorganized Debtors and Appaloosa, establishing the
terms governing the Creditor Oversight Committee, substantially in the form of
Exhibit I.A.56.
58. "Creditors' Committee" means the statutory official committee of
unsecured creditors appointed by the United States Trustee in the Chapter 11
Cases pursuant to section 1102 of the Bankruptcy Code, as such appointment has
been subsequently modified.
59. "Creditors' Committee Website" means the internet site address
http://www.danacreditorcommittee.com at which all of the exhibits and schedules
to the Plan and the Disclosure Statement will be available to creditors of the
Debtors.
60. "Cure Amount Claim" means a Claim based upon a Debtor's defaults under
an Executory Contract or Unexpired Lease at the time such contract or lease is
assumed by such Debtor under section 365 of the Bankruptcy Code to the extent
required by section 365 of the Bankruptcy Code.
61. "Dana" means Debtor Dana Corporation.
62. "DCC" means Dana Credit Corporation, a Delaware corporation and a
non-debtor affiliate of the Debtors.
63. "DCC Bonds" means the: (a) $8.0 million 7.18% notes due April 8, 2006;
(b) $12.0 million 6.93% notes due April 8, 2006; (c) $30.0 million 7.91% notes
due August 16, 2006; (d) $30.0 million 6.88% notes due August 28, 2006; (e)
$275.0 million 8.375% notes due August 15, 2007; and (f) $37.0 million 6.59%
notes due December 1, 2007.
64. "DCC Claim" means the $325 million General Unsecured Claim against
Dana, Allowed pursuant to the Order Approving Settlement Agreement among the
Debtors and Dana Credit Corporation (Docket No. 4199), entered on November 30,
2006.
65. "Debtors" means, collectively, the above-captioned debtors and debtors
in possession identified on Exhibit I.A.65.
66. "Derivative Claim" means a claim (as defined in section 101(5) of the
Bankruptcy Code) or cause of action that is the property of any of the Debtors'
Estates pursuant to section 541 of the Bankruptcy Code, including, without
limitation, those claims and causes of action asserted in Staehr v. Burns et
al., Civil Action No. 3:06-cv-07069-JGC, N.D. Ohio (2006) and Casden v. Burns et
al., Civil Action No. 3:06-cv-07068-JGC, N.D. Ohio (2006).
67. "DIP Credit Agreement" means, collectively: (a) the Senior Secured
Superpriority Debtor-In-Possession Credit Agreement among Dana (as borrower),
the other Debtors (as guarantors), Citicorp North America, Inc., as
administrative agent, Bank of America, N.A. and JPMorgan Chase Bank, N.A., as
co-syndication agents, and Citigroup Capital Markets Inc., J.P. Morgan
Securities Inc. and Banc of America Securities LLC, as Joint Lead Arrangers and
Joint Bookrunners, and the other lenders party thereto; (b) all
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amendments thereto and extensions thereof; and (c) all security agreements and
instruments related to the documents identified in (a) and (b).
68. "DIP Lender Claim" means any Claim against a Debtor under or evidenced
by (a) the DIP Credit Agreement and (b) the Final DIP Order.
69. "DIP Lenders" means, collectively: (a) those entities identified as
"Lenders" in the DIP Credit Agreement and their respective permitted successors
and assigns (solely in their capacity as "Lenders" under the DIP Credit
Agreement); and (b) any agent bank named therein (solely in its capacity as
agent bank under the DIP Credit Agreement).
70. "Disallowed," when used with respect to a Claim, means a Claim that
has been disallowed by a Final Order.
71. "Disbursing Agent" means any Reorganized Debtor in its capacity as
disbursing agent pursuant to Section VI.B, the Indenture Trustee or any Third
Party Disbursing Agent.
72. "Disclosure Statement" means the disclosure statement (including all
exhibits and schedules thereto or referenced therein) that relates to the Plan
and has been prepared and distributed by the Debtors, as plan proponents, as
approved by the Bankruptcy Court pursuant to section 1125 of the Bankruptcy
Code, as the same may be amended, modified or supplemented.
73. "Disputed Claim" means:
a. a Claim that is listed on a Debtor's Schedules as either
disputed, contingent or unliquidated;
b. a Claim that is listed on a Debtor's Schedules as other than
disputed, contingent or unliquidated, but the nature or amount of the Claim as
asserted by the holder varies from the nature or amount of such Claim as it is
listed on the Schedules;
c. a Claim that is not listed on a Debtor's Schedules;
d. a Claim as to which the applicable Debtor or Reorganized Debtor,
or, prior to the Confirmation Date, any other party in interest, has Filed an
objection by the Claims Objection Bar Date and such objection has not been
withdrawn or denied by a Final Order;
e. a Claim for which a proof of Claim or request for payment of
Administrative Claim is required to be Filed under the Plan and no such proof of
Claim or request for payment of Administrative Claim is timely filed; or
f. a Tort Claim.
74. "Disputed Insured Claim" and "Disputed Uninsured Claim" mean,
respectively, an Insured Claim or an Uninsured Claim that is also a Disputed
Claim.
75. "Disputed Unsecured Claims Reserve" means the reserve of Disputed
Unsecured Claims Reserve Assets, which reserve (a) will maintain the Disputed
Unsecured Claims Reserve Assets in trust for Pro Rata distribution to holders of
Disputed Claims that become Allowed Claims in Classes 5B, 5C, 5D, 5E and 5F
pursuant to the terms of the Plan and (b) will not constitute property of the
Reorganized Debtors.
76. "Disputed Unsecured Claims Reserve Assets" means (a) the Reserved
Shares, (b) any Reserved Excess Minimum Cash, (c) any Cash dividends or other
distributions received by the Disbursing Agent on account of the Reserved Shares
and (d) any related Cash Investment Yield.
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77. "Distributable Excess Minimum Cash" means the Excess Minimum Cash,
less the Reserved Excess Minimum Cash, to be distributed Pro Rata on the
Effective Date to holders of Allowed Claims in Classes 5B, 5C, 5D, 5E and 5F
that are not Disputed Claims as of the Effective Date pursuant to the terms of
the Plan.
78. "Distributable Shares of New Dana Holdco Common Stock" means the
shares of New Dana Holdco Common Stock issued on the Effective Date, less (a)
the Reserved Shares and (b) the Emergence Shares, to be distributed Pro Rata on
the Effective Date to holders of Allowed Claims in Classes 5B, 5C, 5D, 5E and 5F
that are not Disputed Claims as of the Effective Date pursuant to the terms of
the Plan.
79. "Distribution Record Date" means the close of business on the
Confirmation Date.
80. "Document Websites" means (a) the internet site address
http://www.dana.bmcgroup.com at which all of the Exhibits and schedules to the
Plan and the Disclosure Statement will be available to any party in interest and
the public; and (b) the Creditors' Committee Website.
81. "Effective Date" means a day, as determined by the Debtors, that is
the Business Day as soon as reasonably practicable after all conditions to the
Effective Date in Section IV.B have been met or waived in accordance with
Section IV.C.
82. "EFMG" means EFMG LLC, a Virginia limited liability company and one of
the Debtors.
83. "Eligible General Unsecured Claim" means a General Unsecured Claim
that is an Allowed Claim as of the Rights Offering Record Date or estimated
pursuant to section 502(c) of the Bankruptcy Code and Rule 3018 of the
Bankruptcy Rules for the purpose of participating in the Rights Offering as of
the Rights Offering Record Date.
84. "Eligible Holder" means the holder of an Eligible Unsecured Claim.
85. "Emergence Shares" means, collectively, the Union Emergence Shares and
the Non-Union Emergence Shares.
86. "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, 29 U.S.C. Sections 1301-1461.
87. "Estate" means, as to each Debtor, the estate created for such Debtor
in its Chapter 11 Case pursuant to section 541 of the Bankruptcy Code.
88. "Excess Minimum Cash" means Cash in excess of (a) the minimum Cash
required by the Reorganized Debtors to operate their businesses on the Effective
Date and thereafter plus (b) the amount of Cash needed, pursuant to the terms of
the Plan, to satisfy all (i) Allowed Secured Claims, Allowed DIP Lender Claims,
Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Priority
Claims and Allowed Claims in Classes 4, 5A, 6B and 6C and (ii) Secured Claims,
DIP Lender Claims, Administrative Claims, Priority Tax Claims, Priority Claims
or Claims in Classes 4, 5A 6B and 6C that (A) are Disputed Claims and (B) may
become Allowed Claims after the Effective Date plus (c) the amount of Cash
needed to satisfy the Remaining Non-Union Retiree VEBA Contribution, the USW
Union Retiree VEBA Contribution and the UAW Union Retiree VEBA Contribution.
89. "Exchange Act" means the Securities Exchange Act of 1934, as amended.
90. "Executory Contract or Unexpired Lease" means a contract or lease to
which a Debtor is a party that is subject to assumption, assumption and
assignment or rejection under section 365 of the Bankruptcy Code and includes
any modifications, amendments, addenda or supplements thereto or restatements
thereof.
91. "Exit Facility" means a senior secured credit facility that: (a)
includes (i) funded commitments not to exceed $1.5 billion and (ii) unfunded
commitments; and (b) will be entered into by the Reorganized Debtors, the
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Exit Facility Agent and the other financial institutions party thereto on the
Effective Date on substantially the terms set forth on Exhibit I.A.91.
92. "Exit Facility Agent" means the agent under the Exit Facility.
93. "Face Amount" means:
a. when used with reference to a Disputed Insured Claim, either (i)
the full stated amount claimed by the holder of such Claim in any proof of Claim
Filed by the Bar Date, or otherwise deemed timely Filed under applicable law, if
the proof of Claim specifies only a liquidated amount; (ii) if no proof of Claim
is Filed by the Bar Date or otherwise deemed timely filed under applicable law,
the full amount of the Claim listed on the Debtors' Schedules, provided that
such amount is not listed as disputed, contingent or unliquidated; or (iii) the
applicable deductible under the relevant insurance policy, minus any
reimbursement obligations of the applicable Debtor to the insurance carrier for
sums expended by the insurance carrier on account of such Claim (including
defense costs), if such amount is less than the amount specified in (i) or (ii)
above or the proof of Claim specifies an unliquidated amount; and
b. when used with reference to a Disputed Uninsured Claim, either
(i) the full stated amount claimed by the holder of such Claim in any proof of
Claim Filed by the Bar Date or otherwise deemed timely Filed under applicable
law, if the proof of Claim specifies only a liquidated amount or (ii) the amount
of the Claim (A) acknowledged by the applicable Debtor, Reorganized Debtor or,
prior to the Effective Date, the Creditors' Committee in conjunction with the
Debtors in any objection Filed to such Claim, (B) estimated by the Bankruptcy
Court for such purpose pursuant to section 502(c) of the Bankruptcy Code or (C)
proposed by the Debtors or Reorganized Debtors if no proof of Claim has been
Filed by the Bar Date or has otherwise been deemed timely Filed under applicable
law or if the proof of Claim specifies an unliquidated amount (in whole or in
part).
94. "Federal Judgment Rate" means the federal post-judgment interest rate,
as established by 28 U.S.C. Section 1961(a), of 4.74% on the Petition Date.
95. "Fee Claim" means a Claim under sections 328, 330(a), 331, 503 or 1103
of the Bankruptcy Code for compensation of a Professional or other entity for
services rendered or expenses incurred in the Chapter 11 Cases.
96. "Fee Order" means the Order, Pursuant to Sections 105(a) and 331 of
the Bankruptcy Code, Bankruptcy Rule 2016(a) and Local Bankruptcy Rule 2016-1,
Establishing Procedures for Interim Monthly Compensation for Professionals
(Docket No. 732), entered by the Bankruptcy Court on March 29, 2006.
97. "File," "Filed" or "Filing" means file, filed or filing with the
Bankruptcy Court or its authorized designee in the Chapter 11 Cases.
98. "Final DIP Order" means the Final Order (I) Authorizing Debtors to (A)
Obtain Postpetition Secured Financing Pursuant to 11 U.S.C. Sections 105(a),
361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), 364(d)(1), 364(e) and 507 and
Fed. R. Bankr. P. 2002, 4001 and 9014 and (B) Utilize Cash Collateral Pursuant
to 11 U.S.C. Section 363, and (II) Granting Adequate Protection to Prepetition
Secured Parties Pursuant to 11 U.S.C. Sections 361, 362, 363 and 364 (Docket No.
721), entered by the Bankruptcy Court on March 29, 2006.
99. "Final Distribution Date" means the date that is 90 days after all
Disputed Claims have been resolved (or as soon as reasonably practicable
thereafter), which shall be the date a final distribution is made under this
Plan.
100. "Final Order" means an order or judgment of the Bankruptcy Court, or
other court of competent jurisdiction, as entered on the docket in the Chapter
11 Cases or the docket of any other court of competent jurisdiction, that has
not been reversed, stayed, modified or amended, and as to which the time to
appeal or petition for certiorari or move for a new trial, reargument or
rehearing has expired, and as to which no appeal or petition for certiorari or
other proceeding for a new trial, reargument or rehearing that has been timely
taken is pending, or as to
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which any appeal that has been taken or any petition for certiorari that has
been timely filed has been withdrawn or resolved by the highest court to which
the order or judgment was appealed or from which certiorari was sought or the
new trial, reargument or rehearing shall have been denied or resulted in no
modification of such order.
101. "General Unsecured Claim" means any Claim that is not an
Administrative Claim, Secured Claim, Cure Amount Claim, Priority Claim, Priority
Tax Claim, Section 510(b) Old Common Stock Claim, Asbestos Personal Injury
Claim, DCC Claim, Prepetition Intercompany Claim and the Union Claim. For the
avoidance of doubt, General Unsecured Claims include but are not limited to (a)
all Liabilities related to real property not owned or leased by the Debtors as
of the Petition Date, (b) Bondholder Claims and (c) the Unions' potential $908
million Claim against the Debtors under Appendix R to the Union Settlement
Agreements.
102. "Global Settlement" means the settlement among the Debtors, the
Unions, certain Bondholders, and initially involving Centerbridge and CBP and
thereafter Appaloosa, documented in the Union Settlement Agreements, the Old
Plan Support Agreement, the Old Investment Agreement, the Appaloosa Plan Support
Agreement, the Appaloosa Investment Agreement and their respective exhibits and
appendices.
103. "Global Settlement Order" means the Order Pursuant to 11 U.S.C.
Sections 1113 and 1114(E) and Federal Rule of Bankruptcy Procedure 9019,
Approving Settlement Agreements with the United Steelworkers and United
Autoworkers, and Pursuant to 11 U.S.C. Sections 105(A), 363(B), 364(C), 503 and
507, Authorizing the Debtors to Enter Into Plan Support Agreement, Investment
Agreement and Related Agreements, entered August 1, 2007 (Docket No. 5879), and
the exhibits thereto.
104. "Indenture Trustee" means Wilmington Trust Company, as indenture
trustee under the Indentures.
105. "Indentures" means, collectively: (a) the 6.5% and 7% Bonds Indenture;
(b) the 9% Bonds Indenture; (c) the 10.125% Bonds Indenture; and (d) the 5.85%
Bonds Indenture.
106. "Independent Director" means a director of New Dana Holdco who
qualifies as an "independent director" of New Dana Holdco under (a) NYSE Rule
303(A)(2) or (b) if New Dana Holdco is listed or quoted on another securities
exchange or quotation system that has an independence requirement, the
comparable rule or regulation of such securities exchange or quotation system on
which the New Dana Holdco Common Stock is listed or quoted (whether by final
rule or otherwise). In addition, in order for a director designated by Appaloosa
to be deemed to be an "Independent Director," such director would also have to
be considered an "independent director" of Appaloosa under NYSE Rule 303(A)(2),
assuming for this purpose that (a) such director were a director of Appaloosa
(whether or not such director actually is or has been a director of Appaloosa)
and (b) Appaloosa is deemed to be a NYSE listed company.
107. "Insured Claim" means any Claim arising from an incident or occurrence
alleged to have occurred prior to the Effective Date that is covered under an
insurance policy applicable to the Debtors or their businesses.
108. "Intercompany Claim" means any Claim by any Debtor against another
Debtor.
109. "Interest" means the rights and interests of the holders of the Old
Common Stock of any Debtor, any other instruments evidencing an ownership
interest in a Debtor and the rights of any entity to purchase or demand the
issuance of any of the foregoing, including: (a) redemption, conversion,
exchange, voting, participation and dividend rights (including any rights in
respect of accrued and unpaid dividends); (b) liquidation preferences; and (c)
stock options and warrants.
110. "Liabilities" means any and all claims, obligations, suits, judgments,
damages, demands, debts, rights, Recovery Actions, Derivative Claims, causes of
action and liabilities, whether liquidated or unliquidated, fixed or contingent,
matured or unmatured, known or unknown, foreseen or unforeseen, arising in law,
equity or otherwise, that are based in whole or in part on any act, event,
injury, omission, transaction, agreement, employment, exposure or other
occurrence taking place on or prior to the Effective Date.
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111. "Minimum Emergence Liquidity" means, as of the Effective Date, the
sum, after giving effect to all Cash distributions to be made on the Effective
Date pursuant to the Plan, of (a) Cash and Cash equivalents of the Debtors and
their subsidiaries and (b) unused commitments under the Exit Facility.
112. "New Dana Holdco" means [_____________], a Delaware corporation.
113. "New Dana Holdco Common Stock" means the shares of common stock, $0.01
par value per share, of New Dana Holdco, authorized pursuant to the certificate
of incorporation of New Dana Holdco, of which up to 100,000,000 shares shall be
initially issued pursuant to the Plan as of the Effective Date.
114. "New Equity Investment" means the $750,000,000 investment to be made
by the New Equity Investors on the Effective Date in connection with the
purchase of New Preferred Stock, pursuant to and in accordance with the
Appaloosa Investment Agreement.
115. "New Equity Investors" means, individually and collectively,
Appaloosa, the Standby Purchasers and the Eligible Holders who exercise a Right,
each of whom have agreed to purchase the New Preferred Stock pursuant to and in
accordance with the Appaloosa Investment Agreement.
116. "New Preferred Stock" means, collectively, the New Series A Preferred
Stock and the New Series B Preferred Stock.
117. "New Series A Preferred Stock" means, collectively, the 2,500,0000
shares of 4.0% series A convertible preferred stock, $0.01 par value per share,
of New Dana Holdco, authorized pursuant to the certificate of incorporation (or
comparable constituent documents) and certificate of designations of New Dana
Holdco.
118. "New Series B Preferred Stock" means, collectively, the 5,000,000
shares of 4.0% Series B convertible preferred stock, $0.01 par value per share,
of New Dana Holdco, authorized pursuant to the certificate of incorporation (or
comparable constituent documents) and certificate of designations of New Dana
Holdco.
119. "Non-Union Emergence Shares" means [_______________________________].
120. "Non-Union Retiree Settlement Order" means the Stipulation and Agreed
Order Between Dana Corporation and the Official Committee of Non-Union Retirees
(Docket No. 5356), entered by the Bankruptcy Court on May 22, 2007.
121. "Non-Union Retiree VEBA" means the voluntary employees' beneficiary
association established pursuant to the Non-Union Retiree Settlement Order.
122. "Notice Parties" means (a) prior to the Effective Date, the Debtors,
the Creditors' Committee, Appaloosa and the Unions; and (b) on or after the
Effective Date, the Reorganized Debtors, the Creditor Oversight Committee,
Appaloosa and the Unions.
123. "NYSE" means the New York Stock Exchange.
124. "NYSE Rule 303(A)(2)" means New York Stock Exchange Rule 303A(2), as
such rule may be amended, supplemented or replaced from time to time.
125. "Official Committees" means, collectively, the Creditors' Committee
and the Retiree Committee.
126. "Old Common Stock" means, when used with reference to a particular
Debtor, the common stock, membership interests, partnership interests or other
capital stock issued by such Debtor and outstanding immediately prior to the
Petition Date, and any options, warrants or other rights with respect thereto.
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127. "Old Investment Agreement" means, collectively, the Investment
Agreement by and between Dana and Centerbridge and CBP, dated July 26, 2007, and
the exhibits thereto, approved by the Global Settlement Order, which agreement
has be superseded by the Appaloosa Investment Agreement.
128. "Old Plan Support Agreement" means, collectively, the Amended Plan
Support Agreement among Dana, Centerbridge, the Unions and certain holders of
General Unsecured Claims, dated as of July 26, 2007, and the exhibits thereto,
approved by the Global Settlement Order, as it may be further amended, modified
or supplemented.
129. "Ordinary Course Professionals Order" means the Order, Pursuant to
Sections 105(a), 327, 328 and 330 of the Bankruptcy Code and Bankruptcy Rule
2014(a), Authorizing Debtors and Debtors in Possession to Retain, Employ and Pay
Certain Professionals in the Ordinary Course of Their Businesses (Docket No.
76), entered by the Bankruptcy Court on March 6, 2006.
130. "PBGC" means the Pension Benefit Guaranty Corporation, a wholly-owned
United States government corporation and an agency of the United States that
administers the defined benefit pension plan termination insurance program under
Title IV of ERISA.
131. "Pension Plans" means, individually and collectively, the pension
plans listed on Exhibit I.A.131 (a) that are tax-qualified defined benefit
pension plans covered by ERISA and (b) for which the Debtors are contributing
sponsors. See 29 U.S.C. Sections 1301(a)(13) and (14).
132. "Per Share Value" means the value per share of New Dana Holdco Common
Stock as set forth in the Disclosure Statement, subject to modification by the
Confirmation Order.
133. "Periodic Distribution Date" means the twentieth day of the month
following the end of each calendar quarter after the Effective Date (or as soon
as reasonably practicable thereafter); provided, however, that if the Effective
Date is within 45 days of the end of a calendar quarter, the first Periodic
Distribution Date will be the twentieth day of the month following the end of
the first calendar quarter after the calendar quarter in which the Effective
Date falls.
134. "Person" means any individual, firm, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
135. "Petition Date" means March 3, 2006, the date on which the Debtors
Filed their petitions for relief commencing the Chapter 11 Cases.
136. "Plan" means this joint plan of reorganization for the Debtors, and
all exhibits attached hereto or referenced herein, as the same may be amended,
modified or supplemented.
137. "Port Authority" means the Toledo Lucas County Port Authority.
138. "Port Authority Lease" means the Lease Agreement between the Port
Authority and Spicer Driveshaft, Inc. (n/k/a Debtor Torque-Traction
Technologies, LLC), dated October 1, 2002, as amended in accordance with the
Port Authority Settlement Agreement.
139. "Port Authority Secured Claim" means the Port Authority's $18.875
million Secured Claim against Debtor Torque-Traction Technologies, LLC, allowed
pursuant to the Port Authority Settlement Order.
140. "Port Authority Settlement Agreement" means the Settlement Agreement
by and among Dana, Debtor Torque-Traction Technologies, LLC, the Port Authority,
the Director of Development of the State of Ohio, The Huntington National Bank
and The Bank of New York Trust Company, N.A., dated August 1, 2007, approved by
the Bankruptcy Court on August 22, 2007, as it may be amended, supplemented or
modified.
141. "Port Authority Settlement Order" means the Order, Pursuant to
Bankruptcy Rule 9019, for an Order (I) Approving a Settlement Agreement by and
among Certain Debtors, The Toledo-Lucas County Port
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Authority and Certain Other Parties, and (II) Allowing Claims of Toledo-Lucas
County Port Authority Against Dana Corporation and Torque-Traction Technologies,
LLC (Docket No. 6002), entered by the Bankruptcy Court on August 22, 2007.
142. "Postpetition Intercompany Claim" means any Intercompany Claim that is
not a Prepetition Intercompany Claim.
143. "Postpetition Interest" means: (a) the Federal Judgment Rate; (b) for
a Bondholder Claim, the contractual rate of interest set forth in the applicable
Indenture; (c) the rate of interest set forth in the contract or other
applicable document between the holder of a Claim and the applicable Debtor
giving rise to such holder's Claim; or (d) such interest, if any, as otherwise
agreed to by the holder of a Claim and the applicable Debtor.
144. "Prepetition Intercompany Claim" means an Intercompany Claim that
arose prior to the Petition Date.
145. "Priority Claim" means a Claim that is entitled to priority in payment
pursuant to section 507(a) of the Bankruptcy Code that is not an Administrative
Claim or a Priority Tax Claim.
146. "Priority Tax Claim" means a Claim that is entitled to priority in
payment pursuant to section 507(a)(8) of the Bankruptcy Code.
147. "Pro Rata" means, when used with reference to a distribution of
property to holders of Allowed Claims or Allowed Interests in a particular Class
or other specified group of Claims or Interests pursuant to Article II,
proportionately so that with respect to a particular Allowed Claim or Allowed
Interest in such Class or in such group, the ratio of (a)(i) the amount of
property to be distributed on account of such Claim or Interest to (ii) the
amount of such Claim or Interest, is the same as the ratio of (b)(i) the amount
of property to be distributed on account of all Allowed Claims or Interests in
such Class or group of Claims or Interests to (ii) the amount of all Allowed
Claims or Allowed Interests, as the case may be, in such Class or group of
Claims or Interests.
148. "Professional" means any professional employed in the Chapter 11 Cases
pursuant to sections 327, 328, 363 or 1103 of the Bankruptcy Code or any
professional or other entity seeking compensation or reimbursement of expenses
in connection with the Chapter 11 Cases pursuant to section 503(b)(4) of the
Bankruptcy Code. For the avoidance of doubt, "Professional" shall include any
professional or other entity rendering services to the Unions in connection with
the Chapter 11 Cases to the extent that the compensation or reimbursement of
expenses sought by such professional or other entity is governed by the Union
Fee Order.
149. "Real Property Executory Contract or Unexpired Lease" means,
collectively, an Executory Contract or Unexpired Lease relating to a Debtor's
interest in real property and any Executory Contract or Unexpired Lease granting
rights or interests related to or appurtenant to the applicable real property,
including all easements; licenses; permits; rights; privileges; immunities;
options; rights of first refusal; powers; uses; usufructs; reciprocal easement
or operating agreements; vault, tunnel or bridge agreements or franchises;
development rights; and any other interests in real estate or rights in rem
related to the applicable real property.
150. "Recovery Actions" means, collectively and individually, preference
actions, fraudulent conveyance actions and other claims or causes of action
under sections 510, 544, 547, 548, 549 and 550 of the Bankruptcy Code and other
similar state law claims and causes of action.
151. "Reinstated" or "Reinstatement" means rendering a Claim or Interest
unimpaired within the meaning of section 1124 of the Bankruptcy Code. Unless the
Plan specifies a particular method of Reinstatement, when the Plan provides that
a Claim or Interest will be Reinstated, such Claim or Interest will be
Reinstated, at Dana's sole discretion, in accordance with one of the following:
a. The legal, equitable and contractual rights to which such Claim
or Interest entitles the holder will be unaltered; or
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b. Notwithstanding any contractual provisions or applicable law that
entitles the holder of such Claim or Interest to demand or
receive accelerated payment of such Claim or Interest after the
occurrence of a default:
i. any such default that occurred before or after the
commencement of the applicable Chapter 11 Case, other than a
default of a kind specified in section 365(b)(2) of the
Bankruptcy Code, will be cured;
ii. the maturity of such Claim or Interest as such maturity
existed before such default will be reinstated;
iii. the holder of such Claim or Interest will be compensated for
any damages incurred as a result of any reasonable reliance
by such holder on such contractual provision or such
applicable law;
iv. if such Claim arises from any failure to perform a
nonmonetary obligation, other than a default arising from
failure to operate a nonresidential real property lease
subject to section 365(b)(1)(A) of the Bankruptcy Code, the
holder of such Claim will be compensated for any actual
pecuniary loss incurred by such holder as a result of such
failure; and
v. the legal, equitable or contractual rights to which such
Claim or Interest entitles the holder of such Claim will not
otherwise be altered.
152. "Released Parties" means, collectively and individually, the Debtors,
the Reorganized Debtors, the Official Committees and their members (solely in
their capacity as such), the Unions and any consultants of the Unions, the DIP
Lenders, Centerbridge, CBP and permitted successors and assigns under the Old
Investment Agreement, the Ad Hoc Steering Committee and its predecessor members
from and after July 5, 2007 (solely in their capacity as such and to the extent
holders of at least $650 million in the aggregate of Bondholder Claims have
executed the Appaloosa Plan Support Agreement), Centerbridge Capital Partners
Strategic, L.P., Centerbridge Capital Partners SBS, L.P., Appaloosa and the
Standby Purchasers and permitted successors and assigns under the Appaloosa
Investment Agreement and the Representatives of each of the foregoing.
153. "Remaining Non-Union Retiree VEBA Contribution" means $53.8 million in
Cash.
154. "Reorganized . . . " means, when used in reference to a particular
Debtor, such Debtor on or after the Effective Date.
155. "Reorganized Debtors" means the Debtors on and after the Effective
Date and any entities created as part of the Restructuring Transactions,
including but not limited to New Dana Holdco.
156. "Representatives" means, with respect to any entity, successor,
predecessor, officer, director, partner, employee, agent, attorney, advisor,
investment banker, financial advisor, accountant or other Professional of such
entity, and committee of which such entity is a member, in each case in such
capacity, serving on or after February 28, 2006.
157. "Reserved Excess Minimum Cash" means the Excess Minimum Cash to be
contributed to the Disputed Unsecured Claims Reserve.
158. "Reserved Shares" means the shares of New Dana Holdco Common Stock to
be contributed to the Disputed Unsecured Claims Reserve.
159. "Restructuring Transactions" means, collectively, those mergers,
consolidations, restructurings, dispositions, liquidations or dissolutions that
the Debtors determine to be necessary or appropriate to effect a
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corporate restructuring of their respective businesses or otherwise to simplify
the overall corporate structure of the Reorganized Debtors, as described in
greater detail in Section V.B.1.
160. "Retiree Committee" means the official committee of non-union retired
employees appointed by the United States Trustee in the Chapter 11 Cases
pursuant to section 1102 of the Bankruptcy Code, as such committee may be
reconstituted from time to time.
161. "Right" means a right issued pursuant to the Rights Offering.
162. "Rights Offering" means the offer and sale by Dana of New Series B
Preferred Stock pursuant to a rights offering whereby Eligible Holders shall be
offered the right to purchase in the aggregate 3,000,000 shares of New Series B
Preferred Stock at a purchase price of $100.00 per share.
163. "Rights Offering Record Date" means the date established by the
Bankruptcy Court for determining holders of record of all Eligible General
Unsecured Claims.
164. "Schedules" means the schedules of assets and liabilities and the
statement of financial affairs Filed by a Debtor on June 30, 2006, as required
by section 521 of the Bankruptcy Code, as the same may have been or may be
amended, modified or supplemented.
165. "SEC" means the United States Securities and Exchange Commission.
166. "Secondary Liability Claim" means a Claim that arises from a Debtor
being liable as a guarantor of, or otherwise being jointly, severally or
secondarily liable for, any contractual, tort, guaranty or other obligation of
another Debtor, including any Claim based on: (a) vicarious liability; (b)
liabilities arising out of piercing the corporate veil, alter ego liability or
similar legal theories; (c) guaranties of collection, payments or performance;
(d) indemnity bonds, obligations to indemnify or obligations to hold harmless;
(e) performance bonds; (f) contingent liabilities arising out of contractual
obligations or out of undertakings (including any assignment or transfer) with
respect to leases, operating agreements or other similar obligations made or
given by a Debtor or relating to the obligations or performance of another
Debtor; (g) several liability of a member of a consolidated (or equivalent)
group of corporations for Taxes of other members of the group or of the entire
group; or (h) any other joint or several liability, including Claims for
indemnification or contribution, that any Debtor may have in respect of any
obligation that is the basis of a Claim.
167. "Section 510(b) Old Common Stock Claim" means any Claim against any of
the Debtors: (a) arising from rescission of a purchase or sale of Old Common
Stock; (b) for damages arising from the purchase or sale of Old Common Stock; or
(c) for reimbursement or contribution allowed under section 502 of the
Bankruptcy Code on account of such a Claim.
168. "Secured Claim" means a Claim that is secured by a lien on property in
which an Estate has an interest or that is subject to setoff under section 553
of the Bankruptcy Code, to the extent of the value of the Claim holder's
interest in such Estate's interest in such property or to the extent of the
amount subject to setoff, as applicable, as determined pursuant to sections
506(a) and, if applicable, 1129(b) of the Bankruptcy Code.
169. "Secured Tax Claim" means a Secured Claim arising out of a Debtor's
liability for any Tax.
170. "Securities Act" means the Securities Act of 1933, as amended.
171. "Stipulation of Amount and Nature of Claim" means a stipulation or
other agreement between a Debtor or Reorganized Debtor and a holder of a Claim
or Interest, that, prior to the Effective Date, is approved by the Bankruptcy
Court, or an agreed order of the Bankruptcy Court, establishing the amount and
nature of a Claim or Interest, including any agreements made pursuant to that
authority granted in the Order Establishing Claims Objection and Settlement
Procedures (Docket No. 4044), entered on November 9, 2006 or other orders of the
Bankruptcy Court. Any such stipulation or other agreement between a Reorganized
Debtor, in consultation with the Creditor Oversight Committee, and a holder of a
Claim or Interest executed after the Effective Date is not subject to
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approval of the Bankruptcy Court; provided, however, that if the Creditor
Oversight Committee Files an objection to such stipulation or other agreement
within ten Business Days of receiving written notice of such stipulation or
other agreement, Bankruptcy Court approval will be required.
172. "Subsidiary Debtor" means any Debtor other than Dana.
173. "Subsidiary Debtor Equity Interests" means, as to a particular
Subsidiary Debtor, any Interests in such Debtor.
174. "Supporting Creditor" means any holder of a General Unsecured Claim
that has (a) submitted an executed signature page to the Plan Support Agreement
to the Debtors or (b) executed a transferee acknowledgment in accordance with
the Plan Support Agreement.
175. "Tax" means: (a) any net income, alternative or add-on minimum, gross
income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, license, property, environmental or other tax, assessment or
charge of any kind whatsoever (together in each instance with any interest,
penalty, addition to tax or additional amount) imposed by any federal, state,
local or foreign taxing authority; or (b) any liability for payment of any
amounts of the foregoing types as a result of being a member of an affiliated,
consolidated, combined or unitary group, or being a party to any agreement or
arrangement whereby liability for payment of any such amounts is determined by
reference to the liability of any other entity.
176. "Third Party Disbursing Agent" means an entity designated by a Debtor
or Reorganized Debtor, in consultation with the Creditors' Committee or Creditor
Oversight Committee (as applicable), to act as a Disbursing Agent pursuant to
Article VI.B.
177. "Tort Claim" means any Claim, other than an Asbestos Personal Injury
Claim, that has not been settled, compromised or otherwise resolved that: (a)
arises out of allegations of personal injury, wrongful death, property damage,
products liability or similar legal theories of recovery; or (b) arises under
any federal, state or local statute, rule, regulation or ordinance governing,
regulating or relating to health, safety, hazardous substances or the
environment.
178. "UAW" means the International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America and its applicable affiliated
entities, including local unions.
179. "UAW Settlement Agreement" means, collectively, the Settlement
Agreement between Dana Corporation and the International Union, UAW, dated July
5, 2007, and the exhibits thereto, approved by the Global Settlement Order, as
it may be amended, supplemented or modified.
180. "UAW Union Retiree VEBA" means the VEBA established pursuant to the
UAW Settlement Agreement.
181. "UAW Union Retiree VEBA Contribution" means the $465.3 million Cash
contribution to be made by the Reorganized Debtors to the UAW Union Retiree VEBA
pursuant to the UAW Settlement Agreement.
182. "Uninsured Claim" means any Claim that is not an Insured Claim.
183. "Union Claim" means the Claim of the Unions arising out of the Union
Settlement Agreements, asserted by the Unions in the aggregate amount of $1.1
billion.
184. "Union Emergence Shares" means the shares of New Dana Holdco Common
Stock reserved by New Dana Holdco for issuance as emergence bonuses to employees
of the Unions in accordance with Appendix J to the Union Settlement Agreements
pursuant to Section III.E.
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185. "Union Fee Order" means the Order, Pursuant to Sections 105(a), 363
and 503(c)(3) of the Bankruptcy Code, Approving Amended Agreement for the
Payment of Certain Reasonable Fees and Expenses of Advisors to the Debtors'
Unions (Docket No. 5819), entered by the Bankruptcy Court on July 26, 2007.
186. "Union Retiree Benefit Termination Date" means the later of January 1,
2008 or the Effective Date.
187. "Union Settlement Agreements" means, collectively, the UAW Settlement
Agreement and the USW Settlement Agreement.
188. "Unions" means, collectively, the UAW and USW.
189. "United States Trustee" means the Office of the United States Trustee
for the Southern District of New York.
190. "USW" means the United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service Workers International Union
and its applicable affiliated entities, including local unions.
191. "USW Settlement Agreement" means the Settlement Agreement between Dana
Corporation and the United Steelworkers, dated July 5, 2007, and the exhibits
thereto, approved by the Global Settlement Order, as it may be amended,
supplemented or modified.
192. "USW Union Retiree VEBA" means the VEBA established pursuant to the
USW Settlement Agreement.
193. "USW Union Retiree VEBA Contribution" means the $298.7 million Cash
contribution to be made by the Reorganized Debtors to the USW Union Retiree VEBA
pursuant to the USW Settlement Agreement.
194. "VEBA" means a voluntary employees' beneficiary association.
195. "Voting Deadline" means the deadline for submitting Ballots to either
accept or reject the Plan in accordance with section 1126 of the Bankruptcy Code
that is specified in the Disclosure Statement, the Ballots or related
solicitation documents approved by the Bankruptcy Court.
196. "Wholly-Owned and Majority-Owned Non-Debtor Affiliates Other than DCC"
means all wholly-owned and majority-owned non-debtor direct or indirect
subsidiaries of Dana other than DCC.
B. RULES OF INTERPRETATION AND COMPUTATION OF TIME
1. RULES OF INTERPRETATION
For purposes of the Plan, unless otherwise provided herein: (a)
whenever from the context it is appropriate, each term, whether stated in the
singular or the plural, will include both the singular and the plural; (b)
unless otherwise provided in the Plan, any reference in the Plan to a contract,
instrument, release or other agreement or document being in a particular form or
on particular terms and conditions means that such document will be
substantially in such form or substantially on such terms and conditions; (c)
any reference in the Plan to an existing document or Exhibit Filed or to be
Filed means such document or Exhibit, as it may have been or may be amended,
modified or supplemented pursuant to the Plan, Confirmation Order or otherwise;
(d) any reference to an entity as a holder of a Claim or Interest includes that
entity's successors, assigns and affiliates; (e) all references in the Plan to
Sections, Articles and Exhibits are references to Sections, Articles and
Exhibits of or to the Plan; (f) the words "herein," "hereunder" and "hereto"
refer to the Plan in its entirety rather than to a particular portion of the
Plan; (g) captions and headings to Articles and Sections are inserted for
convenience of reference only and are not intended to be a part of or to affect
the interpretation of the Plan; (h) subject to the provisions of any contract,
articles or certificates of incorporation, bylaws, codes of regulation, similar
constituent documents, instrument, release or other agreement or document
entered into or delivered in connection with the Plan, the rights and
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obligations arising under the Plan will be governed by, and construed and
enforced in accordance with, federal law, including the Bankruptcy Code and the
Bankruptcy Rules; and (i) the rules of construction set forth in section 102 of
the Bankruptcy Code will apply to the extent not inconsistent with any other
provision of this Section I.B.1.
2. COMPUTATION OF TIME
In computing any period of time prescribed or allowed by the Plan,
the provisions of Bankruptcy Rule 9006(a) will apply.
ARTICLE II.
CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS;
CRAMDOWN; EXECUTORY CONTRACTS & UNEXPIRED LEASES
All Claims and Interests, except Administrative Claims and Priority
Tax Claims, are placed in the following Classes. In accordance with section
1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax
Claims, as described in Section II.A, have not been classified and thus are
excluded from the following Classes. A Claim or Interest is classified in a
particular Class only to the extent that the Claim or Interest qualifies within
the description of that Class and is classified in other Classes to the extent
that any remainder of the Claim or Interest qualifies within the description of
such other Classes.
A. UNCLASSIFIED CLAIMS
1. PAYMENT OF ADMINISTRATIVE CLAIMS
a. ADMINISTRATIVE CLAIMS IN GENERAL
Except as specified in this Section II.A.1, and subject to the bar
date provisions herein, unless otherwise agreed by the holder of an
Administrative Claim and the applicable Debtor or Reorganized Debtor, or unless
an order of the Bankruptcy Court provides otherwise, each holder of an Allowed
Administrative Claim will receive, in full satisfaction of its Administrative
Claim, Cash equal to the amount of such Allowed Administrative Claim either (i)
on the Effective Date or (ii) if the Administrative Claim is not allowed as of
the Effective Date, 30 days after the date on which an order allowing such
Administrative Claim becomes a Final Order or a Stipulation of Amount and Nature
of Claim is executed by the applicable Reorganized Debtor and the holder of the
Administrative Claim.
b. STATUTORY FEES
On or before the Effective Date, Administrative Claims for fees
payable pursuant to 28 U.S.C. Section 1930 will be paid in Cash equal to the
amount of such Administrative Claims. All fees payable pursuant to 28 U.S.C.
Section 1930 after the Effective Date will be paid by the applicable Reorganized
Debtor in accordance therewith until the closing of the Chapter 11 Cases
pursuant to section 350(a) of the Bankruptcy Code.
c. ORDINARY COURSE LIABILITIES
Allowed Administrative Claims based on liabilities incurred by a
Debtor in the ordinary course of its business, including Administrative Claims
arising from or with respect to the sale of goods or provision of services on or
after the Petition Date in the ordinary course of the applicable Debtor's
business, Administrative Claims of governmental units for Taxes (including Tax
audit Claims related to Tax years or portions thereof ending after the Petition
Date), Administrative Claims arising from those contracts and leases of the kind
described in Section II.E.4 and Intercompany Claims that are Administrative
Claims, will be paid by the applicable Reorganized Debtor, pursuant to the terms
and conditions of the particular transaction giving rise to those Administrative
Claims, without further action by the holders of such Administrative Claims or
further approval by the Bankruptcy Court.
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d. CLAIMS UNDER THE DIP CREDIT AGREEMENT
Unless otherwise agreed by the DIP Lenders pursuant to the DIP Credit
Agreement, on or before the Effective Date, DIP Lender Claims that are Allowed
Administrative Claims will be paid in Cash equal to the amount of those Allowed
Administrative Claims.
e. ADMINISTRATIVE CLAIMS OF APPALOOSA AND THE STANDBY PURCHASERS
Unless otherwise agreed by the Debtors or Reorganized Debtors,
Appaloosa and the Standby Purchasers, any Administrative Claims of Appaloosa or
a Standby Purchaser arising under the Appaloosa Investment Agreement (as
approved by the Appaloosa Approval Order) will be paid by the Reorganized
Debtors in the ordinary course of their businesses without further action by
Appaloosa or the Standby Purchasers or further approval by the Bankruptcy Court.
f. CONTRIBUTION TO NON-UNION RETIREE VEBA
On the Effective Date, the Reorganized Debtors will make the
Remaining Non-Union Retiree VEBA Contribution.
g. SPECIAL PROVISIONS REGARDING THE CLAIMS OF THE INDENTURE TRUSTEE
In full satisfaction of the Indenture Trustee's Claims for
reasonable fees and expenses payable pursuant to the terms of the Indentures,
subject to the terms and conditions of this Section II.A.1.g, the Indenture
Trustee will receive from the Reorganized Debtors Cash equal to the amount of
such Claims; provided that such Cash Payment shall not exceed $[ ]. Any
charging lien held by the Indenture Trustee against distributions to Bondholders
on account of Bondholder Claims will be deemed released upon payment of such
Claims. To receive payment pursuant to this Section II.A.1.g, the Indenture
Trustee shall provide reasonable detail in support of its Claims to the parties
identified in Section X.F no later than ten days after the Effective Date. Such
parties shall have the right to File objections to such Claims based on a
"reasonableness" standard within 20 days after receipt of supporting
documentation. The Reorganized Debtors shall pay any such Claims by the later of
(i) 30 days after the receipt of supporting documentation from the Indenture
Trustee, or (ii) ten Business Days after the resolution of any objections to the
Claims of the Indenture Trustee. Distributions received by Bondholders on
account of Allowed Bondholder Claims pursuant to the Plan will not be reduced on
account of the payment of the Indenture Trustee's Claims.
h. BAR DATES FOR ADMINISTRATIVE CLAIMS
i. GENERAL BAR DATE PROVISIONS
Except as otherwise provided in Section II.A.1.h.ii or in a Bar Date
Order or other order of the Bankruptcy Court, unless previously Filed, requests
for payment of Administrative Claims must be Filed and served on the Notice
Parties pursuant to the procedures specified in the Confirmation Order and the
notice of entry of the Confirmation Order, no later than 30 days after the
Effective Date. Holders of Administrative Claims that are required to File and
serve a request for payment of such Administrative Claims and that do not File
and serve such a request by the applicable Bar Date will be forever barred from
asserting such Administrative Claims against the Debtors, the Reorganized
Debtors or their respective property, and such Administrative Claims will be
deemed discharged as of the Effective Date. Objections to such requests must be
Filed and served on the Notice Parties and the requesting party by the later of
(A) 150 days after the Effective Date, (B) 60 days after the Filing of the
applicable request for payment of Administrative Claims or (C) such other period
of limitation as may be specifically fixed by a Final Order for objecting to
such Administrative Claims.
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ii. BAR DATES FOR CERTAIN ADMINISTRATIVE CLAIMS
A. PROFESSIONAL COMPENSATION
Professionals or other entities asserting a Fee Claim for services
rendered before the Effective Date must File and serve on the Notice Parties and
such other entities who are designated by the Bankruptcy Rules, the Fee Order,
the Confirmation Order or other order of the Bankruptcy Court an application for
final allowance of such Fee Claim no later than 60 days after the Effective
Date; provided, however, that any professional who may receive compensation or
reimbursement of expenses pursuant to the Ordinary Course Professionals Order
may continue to receive such compensation and reimbursement of expenses for
services rendered before the Effective Date pursuant to the Ordinary Course
Professionals Order without further Bankruptcy Court review or approval (except
as provided in the Ordinary Course Professionals Order). Objections to any Fee
Claim must be Filed and served on the Notice Parties and the requesting party by
the later of (1) 90 days after the Effective Date, (2) 30 days after the Filing
of the applicable request for payment of the Fee Claim or (3) such other period
of limitation as may be specifically fixed by a Final Order for objecting to
such Fee Claims. To the extent necessary, the Confirmation Order will amend and
supersede any previously entered order of the Bankruptcy Court regarding the
payment of Fee Claims; provided, however, that Fee Claims Filed by Union
Professionals will continue to be governed by, and paid in accordance with, the
Union Fee Order.
B. ORDINARY COURSE LIABILITIES
Holders of Administrative Claims arising from liabilities incurred by
a Debtor in the ordinary course of its business on or after the Petition Date,
including Administrative Claims arising from or with respect to the sale of
goods or provision of services on or after the Petition Date in the ordinary
course of the applicable Debtor's business, Administrative Claims of
governmental units for Taxes (including Tax audit Claims related to Tax years or
portions thereof ending after the Petition Date), Administrative Claims arising
from those contracts and leases of the kind described in Section II.E.4 and
Intercompany Claims that are Administrative Claims, will not be required to File
or serve any request for payment of such Administrative Claims. Such
Administrative Claims will be satisfied pursuant to Section II.A.1.c. Any
Administrative Claims that are filed contrary to this Section II.A.1.h.ii.B
shall be deemed disallowed and expunged, subject to resolution and satisfaction
in the ordinary course outside these Chapter 11 Cases.
C. CLAIMS UNDER THE DIP CREDIT AGREEMENT AND RELATED
ORDERS
Holders of Administrative Claims on account of DIP Lender Claims will
not be required to File or serve any request for payment or application for
allowance of such Claims. Such Administrative Claims will be satisfied pursuant
to Section II.A.1.d.
D. ADMINISTRATIVE CLAIMS OF APPALOOSA AND THE STANDBY
PURCHASERS
Appaloosa and the Standby Purchasers will not be required to File or
serve any request for payment or application for allowance of its Administrative
Claims, if any, arising under the Appaloosa Investment Agreement (as approved by
the Appaloosa Approval Order). Such Administrative Claims will be satisfied
pursuant to Section II.A.1.e.
iii. NO MODIFICATION OF BAR DATE ORDER
The Plan does not modify any Bar Date Order already in place,
including Bar Dates for Claims entitled to administrative priority under section
503(b)(9) of the Bankruptcy Code.
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2. PAYMENT OF PRIORITY TAX CLAIMS
a. PRIORITY TAX CLAIMS
Pursuant to section 1129(a)(9)(C) of the Bankruptcy Code, unless
otherwise agreed by the holder of a Priority Tax Claim and the applicable Debtor
or Reorganized Debtor, each holder of an Allowed Priority Tax Claim will
receive, in full satisfaction of its Priority Tax Claim, Cash equal to the
amount of such Allowed Priority Tax Claim either (i) on the Effective Date or
(ii) if the Priority Tax Claim is not allowed as of the Effective Date, 30 days
after the date on which an order allowing such Priority Tax Claim becomes a
Final Order or a Stipulation of Amount and Nature of Claim is executed by the
applicable Reorganized Debtor and the holder of the Priority Tax Claim.
b. OTHER PROVISIONS CONCERNING TREATMENT OF PRIORITY TAX CLAIMS
Notwithstanding the provisions of Section II.A.2.a or Section I.A.175,
the holder of an Allowed Priority Tax Claim will not be entitled to receive any
payment on account of any penalty arising with respect to or in connection with
the Allowed Priority Tax Claim. Any such Claim or demand for any such penalty
will be subject to treatment in Classes 5A or 5F, as applicable, if not
subordinated to Class 5A or 5F Claims pursuant to an order of the Bankruptcy
Court. The holder of an Allowed Priority Tax Claim will not assess or attempt to
collect such penalty from the Debtors, Reorganized Debtors or their respective
property (other than as a holder of a Class 5A or 5F Claim).
B. CLASSIFIED CLAIMS AND INTERESTS
1. Priority Claims Against the Consolidated Debtors (Class 1A Claims) are
unimpaired. On the Effective Date, each holder of an Allowed Claim in Class 1A
will receive Cash equal to the amount of such Allowed Claim, unless the holder
of such Priority Claim and the applicable Debtor or Reorganized Debtor agree to
a different treatment.
2. Priority Claims Against EFMG (Class 1B Claims) are unimpaired. On the
Effective Date, each holder of an Allowed Claim in Class 1B will receive Cash
equal to the amount of such Allowed Claim, unless the holder of such Priority
Claim and EFMG or Reorganized EFMG agree to a different treatment.
3. Secured Claims Against the Consolidated Debtors Other Than the Port
Authority Secured Claim (Class 2A Claims) are unimpaired. On the Effective Date,
unless otherwise agreed by a Claim holder and the applicable Debtor or
Reorganized Debtor, each holder of an Allowed Claim in Class 2A will receive
treatment on account of such Allowed Secured Claim in the manner set forth in
Option A, B or C below, at the election of the applicable Debtor. The applicable
Debtor will be deemed to have elected Option B except with respect to (a) any
Allowed Secured Claim as to which the applicable Debtor elects either Option A
or Option C in one or more certifications Filed prior to the conclusion of the
Confirmation Hearing and (b) any Allowed Secured Tax Claim, with respect to
which the applicable Debtor will be deemed to have elected Option A.
Option A: On the Effective Date, Allowed Claims in Class 2A with respect to
which the applicable Debtor elects Option A will receive Cash equal to the
amount of such Allowed Claim.
Option B: On the Effective Date, Allowed Claims in Class 2A with respect to
which the applicable Debtor elects or is deemed to have elected Option B
will be Reinstated.
Option C: On the Effective Date, a holder of an Allowed Claim in Class 2A
with respect to which the applicable Debtor elects Option C will be
entitled to receive (and the applicable Debtor or Reorganized Debtor shall
release and transfer to such holder) the collateral securing such Allowed
Claim.
Notwithstanding either the foregoing or Section I.A.175, the holder of an
Allowed Secured Tax Claim in Class 2A will not be entitled to receive any
payment on account of any penalty arising with respect to or in connection with
such Allowed Secured Tax Claim. Any such Claim or demand for any such penalty
will be subject
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to treatment in Class 5F, if not subordinated to Class 5F Claims pursuant to an
order of the Bankruptcy Court. The holder of an Allowed Secured Tax Claim will
not assess or attempt to collect such penalty from the Debtors, Reorganized
Debtors or their respective property (other than as a holder of a Class 5F
Claim).
4. Secured Claims Against EFMG (Class 2B Claims) are unimpaired. On the
Effective Date, unless otherwise agreed by a Claim holder and EFMG or
Reorganized EFMG, each holder of an Allowed Claim in Class 2B will receive
treatment on account of such Allowed Secured Claim in the manner set forth in
Option A, B or C below, at the election of EFMG. EFMG will be deemed to have
elected Option B except with respect to (a) any Allowed Secured Claim as to
which EFMG elects either Option A or Option C in one or more certifications
Filed prior to the conclusion of the Confirmation Hearing and (b) any Allowed
Secured Tax Claim, with respect to which EFMG will be deemed to have elected
Option A.
Option A: On the Effective Date, Allowed Claims in Class 2B with respect to
which EFMG elects Option A will receive Cash equal to the amount of such
Allowed Claim.
Option B: On the Effective Date, Allowed Claims in Class 2B with respect to
which EFMG elects or is deemed to have elected Option B will be Reinstated.
Option C: On the Effective Date, a holder of an Allowed Claim in Class 2B
with respect to which EFMG elects Option C will be entitled to receive (and
EFMG or Reorganized EFMG shall release and transfer to such holder) the
collateral securing such Allowed Claim.
Notwithstanding either the foregoing or Section I.A.175, the holder of an
Allowed Secured Tax Claim in Class 2B will not be entitled to receive any
payment on account of any penalty arising with respect to or in connection with
such Allowed Secured Tax Claim. Any such Claim or demand for any such penalty
will be subject to treatment in Class 5A, if not subordinated to Class 5A Claims
pursuant to an order of the Bankruptcy Court. The holder of an Allowed Secured
Tax Claim will not assess or attempt to collect such penalty from the Debtors,
Reorganized Debtors or their respective property (other than as a holder of a
Class 5A Claim).
5. Port Authority Secured Claim (Class 2C Claim) is impaired. In
accordance with and subject to the terms of the Port Authority Settlement
Agreement, on or as soon as practicable after the Effective Date, the Port
Authority Secured Claim will be satisfied by: (a) Reorganized Torque-Traction
Technologies, LLC entering into and assuming as amended the Port Authority Lease
in the form attached to the Port Authority Settlement Agreement as Exhibit 1;
(b) New Dana Holdco executing and delivering an amended guaranty in the form
attached to the Port Authority Settlement Agreement as Exhibit 2; and (c)
Reorganized Torque-Traction Technologies, LLC and New Dana Holdco executing and
delivering any other agreements necessary to implement the Port Authority
Settlement Agreement.
6. Asbestos Personal Injury Claims (Class 3 Claims) are unimpaired. On
the Effective Date, the Asbestos Personal Injury Claims will be Reinstated.
7. Convenience Claims Against the Consolidated Debtors (Class 4 Claims)
are unimpaired. On the Effective Date, each holder of an Allowed Convenience
Claim will receive Cash equal to the amount of such Allowed Claims (as reduced,
if applicable, pursuant to an election by the holder thereof in accordance with
Section I.A.55).
8. General Unsecured Claims Against EFMG (Class 5A Claims) are
unimpaired. On the Effective Date, each holder of an Allowed General Unsecured
Claim against EFMG will receive Cash equal to the amount of such Allowed Claim.
9. 5.85% Bond Claims (Class 5B Claims) are impaired. In full satisfaction
of its Allowed Claim, each holder of an Allowed Claim in Class 5B will receive
(a)(i) on the Effective Date, its Pro Rata share, based upon the principal
amount of each holder's Allowed Claim, of the Distributable Shares of New Dana
Holdco Common Stock and the Distributable Excess Minimum Cash; and/or (ii) after
the Effective Date, such periodic distributions of Reserved Shares and Reserved
Excess Minimum Cash as are set forth in Section VI.F.4.b; and (b) on the Rights
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Offering Record Date, to the extent such Claim is an Eligible General Unsecured
Claim, its Pro Rata share, based upon the principal amount of each holder's
Eligible General Unsecured Claim, of Rights.
10. 6.5% and 7% Bond Claims (Class 5C Claims) are impaired. In full
satisfaction of its Allowed Claim, each holder of an Allowed Claim in Class 5C
will receive (a)(i) on the Effective Date, its Pro Rata share, based upon the
principal amount of each holder's Allowed Claim, of the Distributable Shares of
New Dana Holdco Common Stock and the Distributable Excess Minimum Cash; and/or
(ii) after the Effective Date, such periodic distributions of Reserved Shares
and Reserved Excess Minimum Cash as are set forth in Section VI.F.4.b; and (b)
on the Rights Offering Record Date, to the extent such Claim is an Eligible
General Unsecured Claim, its Pro Rata share, based upon the principal amount of
each holder's Eligible General Unsecured Claim, of Rights.
11. 9% Bond Claims (Class 5D Claims) are impaired. In full satisfaction of
its Allowed Claim, each holder of an Allowed Claim in Class 5D will receive
(a)(i) on the Effective Date, its Pro Rata share, based upon the principal
amount of each holder's Allowed Claim, of the Distributable Shares of New Dana
Holdco Common Stock and the Distributable Excess Minimum Cash; and/or (ii) after
the Effective Date, such periodic distributions of Reserved Shares and Reserved
Excess Minimum Cash as are set forth in Section VI.F.4.b; and (b) on the Rights
Offering Record Date, to the extent such Claim is an Eligible General Unsecured
Claim, its Pro Rata share, based upon the principal amount of each holder's
Eligible General Unsecured Claim, of Rights.
12. 10.125% Bond Claims (Class 5E Claims) are impaired. In full
satisfaction of its Allowed Claim, each holder of an Allowed Claim in Class 5E
will receive (a)(i) on the Effective Date, its Pro Rata share, based upon the
principal amount of each holder's Allowed Claim, of the Distributable Shares of
New Dana Holdco Common Stock and the Distributable Excess Minimum Cash; and/or
(ii) after the Effective Date, such periodic distributions of Reserved Shares
and Reserved Excess Minimum Cash as are set forth in Section VI.F.4.b; and (b)
on the Rights Offering Record Date, to the extent such Claim is an Eligible
General Unsecured Claim, its Pro Rata share, based upon the principal amount of
each holder's Eligible General Unsecured Claim, of Rights.
13. Other General Unsecured Claims Against the Consolidated Debtors (Class
5F Claims) are impaired. In full satisfaction of its Allowed Claim, each holder
of an Allowed Claim in Class 5F will receive (a)(i) on the Effective Date, its
Pro Rata share, based upon the principal amount of each holder's Allowed Claim,
of the Distributable Shares of New Dana Holdco Common Stock and the
Distributable Excess Minimum Cash; and/or (ii) after the Effective Date, such
periodic distributions of Reserved Shares and Reserved Excess Minimum Cash as
are set forth in Section VI.F.4.b; and (b) on the Rights Offering Record Date,
to the extent such Claim is an Eligible General Unsecured Claim, its Pro Rata
share, based upon the principal amount of each holder's Eligible General
Unsecured Claim, of Rights.
14. Union Claim (Class 5G Claim) is impaired. On the Effective Date, in
full satisfaction of the Union Claim, the Debtors will make the UAW Retiree VEBA
Contribution and the USW Retiree VEBA Contribution.
15. Prepetition Intercompany Claims (Class 6A Claims) are impaired. On the
Effective Date, Prepetition Intercompany Claims in Class 6A that are not
eliminated by operation of law in the Restructuring Transactions will be deemed
settled and compromised in exchange for the consideration and other benefits
provided to the holders of Prepetition Intercompany Claims and not entitled to
any distribution of Plan consideration under the Plan. Each holder of a Class 6A
Claim will be deemed to have accepted the Plan.
16. Claims of Wholly-Owned and Majority-Owned Non-Debtor Affiliates Other
than DCC (Class 6B Claims) are unimpaired. On the Effective Date, Claims of
Wholly-Owned and Majority-Owned Non-Debtor Affiliates Other than DCC against the
Debtors will be Reinstated.
17. DCC Claim (Class 6C Claim) is impaired. On the Effective Date, in full
satisfaction of the DCC Claim, the Reorganized Debtors will satisfy in Cash
DCC's outstanding liability under the DCC Bonds.
18. Old Common Stock of Dana (Class 7A Interests) are impaired. On the
Effective Date, the Old Common Stock of Dana and all Interests related thereto
will be canceled, and each holder of an Allowed Interest in
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Class 7A will receive, in full satisfaction of such Allowed Interest, a
contingent, residual interest in the Disputed Unsecured Claims Reserve Assets
that will entitle each holder of an Allowed Interest in Class 7A to receive, to
the extent holders of Allowed Claims in Classes 5B, 5C, 5D, 5E and 5F have been
paid in full plus Postpetition Interest, its Pro Rata share, based upon the
number of shares of Old Common Stock of Dana (a) owned by the holder on the
Distribution Record Date and (b) to which the holder would have been entitled
upon the conversion of any related Interests owned on the Distribution Record
Date and taking into account Allowed Claims in Class 7B, of any remaining
Disputed Unsecured Claims Reserve Assets.
19. Section 510(b) Old Common Stock Claims Against the Consolidated
Debtors (Class 7B Claims) are impaired. Holders of Section 510(b) Old Common
Stock Claims in Class 7B will receive, in full satisfaction of such Allowed
Claim, a contingent, residual interest in the Disputed Unsecured Claims Reserve
Assets that will entitle each holder of an Allowed Claim in Class 7B to receive,
to the extent holders of Allowed Claims in Classes 5B, 5C, 5D, 5E and 5F have
been paid in full plus Postpetition Interest, its Pro Rata share (taking into
account Allowed Interests in Class 7A) of any remaining Disputed Unsecured
Claims Reserve Assets.
20. Subsidiary Debtor Equity Interests (Class 8 Interests) are unimpaired.
On the Effective Date, the Subsidiary Debtor Equity Interests will be
Reinstated, subject to the Restructuring Transactions.
C. SPECIAL PROVISIONS REGARDING THE TREATMENT OF ALLOWED SECONDARY LIABILITY
CLAIMS; MAXIMUM RECOVERY
The classification and treatment of Allowed Claims under the Plan
take into consideration all Allowed Secondary Liability Claims. On the Effective
Date, Allowed Secondary Liability Claims will be treated as follows:
1. The Allowed Secondary Liability Claims arising from or related to any
Debtor's joint or several liability for the obligations under any Executory
Contract or Unexpired Lease that is being assumed or deemed assumed by another
Debtor or under any Executory Contract or Unexpired Lease that is being assumed
by and assigned to another Debtor will be Reinstated.
2. Except as provided in Section II.C.1, holders of Allowed Secondary
Liability Claims against any Consolidated Debtor will be entitled to only one
Distribution in respect of such Allowed Secondary Liability Claim and will be
deemed satisfied in full by the Distributions on account of the related
underlying Allowed Claim. No multiple recovery on account of any Allowed Claim
against any Consolidated Debtor will be provided or permitted.
3. Notwithstanding any provision hereof to the contrary, holders of
Allowed Secondary Liability Claims against a Consolidated Debtor and EFMG may
not receive in the aggregate from all Debtors more than 100% of the value of the
underlying Claim giving rise to such multiple Claims.
D. CONFIRMATION WITHOUT ACCEPTANCE BY ALL IMPAIRED CLASSES
The Debtors request Confirmation under section 1129(b) of the
Bankruptcy Code with respect to any impaired Class that has not accepted or is
deemed not to have accepted the Plan pursuant to section 1126 of the Bankruptcy
Code.
E. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
1. EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED
a. ASSUMPTION AND ASSIGNMENT GENERALLY
Except as otherwise provided in the Plan, in any contract, instrument,
release or other agreement or document entered into in connection with the Plan
or in a Final Order of the Bankruptcy Court, or as requested in any motion Filed
on or prior to the Effective Date, on the Effective Date, pursuant to section
365 of the Bankruptcy Code, the applicable Debtor or Debtors will assume or
assume and assign, as indicated, each Executory Contract or
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Unexpired Lease listed on Exhibit II.E.1.a; provided, however, that the Debtors
and Reorganized Debtors reserve the right, at any time on or prior to the
Effective Date, to amend Exhibit II.E.1.a to: (i) delete any Executory Contract
or Unexpired Lease listed therein, thus providing for its rejection pursuant to
Section II.E.5; or (ii) add any Executory Contract or Unexpired Lease thereto,
thus providing for its assumption or assumption and assignment pursuant to this
Section II.E.1.a. The Debtors or Reorganized Debtors, as applicable, will
provide notice of any amendments to Exhibit II.E.1.a to the parties to the
Executory Contracts or Unexpired Leases affected thereby and to the parties on
the then-applicable service list in the Chapter 11 Cases. Each contract and
lease listed on Exhibit II.E.1.a will be assumed only to the extent that any
such contract or lease constitutes an Executory Contract or Unexpired Lease.
Listing a contract or lease on Exhibit II.E.1.a will not constitute an admission
by a Debtor or Reorganized Debtor that such contract or lease (including any
related agreements as described in Section II.E.1.b) is an Executory Contract or
Unexpired Lease or that a Debtor or Reorganized Debtor has any liability
thereunder.
b. ASSUMPTIONS AND ASSIGNMENTS OF ANCILLARY AGREEMENTS
Each Executory Contract or Unexpired Lease listed on Exhibit II.E.1.a
will include any modifications, amendments, supplements, restatements or other
agreements made directly or indirectly by any agreement, instrument or other
document that in any manner affects such contract or lease, irrespective of
whether such agreement, instrument or other document is listed on Exhibit
II.E.1.a, unless any such modification, amendment, supplement, restatement or
other agreement is rejected pursuant to Section II.E.5 or designated for
rejection in accordance with Section II.E.2.
c. JOINT VENTURE AGREEMENTS
The joint venture agreements listed on Exhibit II.E.1.c shall be
deemed assumed and assigned to New Dana Holdco in accordance with the provisions
and requirements of sections 365 and 1123 of the Bankruptcy Code as of the
Effective Date.
d. CUSTOMER AGREEMENTS
To the extent (i) the Debtors are party to any contract, purchase
order or similar agreement providing for the sale of the Debtors' products or
services, (ii) any such agreement constitutes an Executory Contract or Unexpired
Lease and (iii) such agreement (A) has not been rejected pursuant to a Final
Order of the Bankruptcy Court, (B) is not subject to a pending motion for
reconsideration or appeal of an order authorizing the rejection of such
Executory Contract or Unexpired Lease, (C) is not subject to a motion to reject
such Executory Contract or Unexpired Lease Filed on or prior to the Effective
Date, (D) is not listed on Exhibit II.E.5 or (E) has not been designated for
rejection in accordance with Section II.E.5, such agreement (including any
related agreements as described in Section II.E.1.b), purchase order or similar
agreement will be deemed assumed and assigned to New Dana Holdco in accordance
with the provisions and requirements of sections 365 and 1123 of the Bankruptcy
Code as of the Effective Date. Listing a contract, purchase order or similar
agreement providing for the sale of the Debtors' products or services on Exhibit
II.E.5 will not constitute an admission by a Debtor or Reorganized Debtor that
such agreement (including related agreements as described in Section II.E.1.b)
is an Executory Contract or Unexpired Lease or that a Debtor or Reorganized
Debtor has any liability thereunder.
2. APPROVAL OF ASSUMPTIONS AND ASSIGNMENTS; ASSIGNMENTS RELATED TO
RESTRUCTURING TRANSACTIONS
The Confirmation Order will constitute an order of the Bankruptcy
Court approving the assumption (including any related assignment resulting from
the Restructuring Transactions or otherwise) of Executory Contracts or Unexpired
Leases pursuant to Section II.E as of the Effective Date, except for Executory
Contracts or Unexpired Leases that (a) have been rejected pursuant to a Final
Order of the Bankruptcy Court, (b) are subject to a pending motion for
reconsideration or appeal of an order authorizing the rejection of such
Executory Contract or Unexpired Lease, (c) are subject to a motion to reject
such Executory Contract or Unexpired Lease Filed on or prior to the Effective
Date, (d) are rejected pursuant to Section II.E.5 or (e) are designated for
rejection in accordance with the last sentence of this paragraph. An order of
the Bankruptcy Court entered on or prior to the Confirmation Date will specify
the procedures for providing notice to each party whose Executory Contract or
Unexpired Lease is being assumed pursuant to the Plan of: (a) the contract or
lease being assumed; (b) the Cure
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Amount Claim, if any, that the applicable Debtor believes it would be obligated
to pay in connection with such assumption; (c) any assignment of an Executory
Contract or Unexpired Lease (pursuant to the Restructuring Transactions or
otherwise); and (d) the procedures for such party to object to the assumption of
the applicable Executory Contract or Unexpired Lease, the amount of the proposed
Cure Amount Claim or any assignment of an Executory Contract or Unexpired Lease.
As of the effective time of an applicable Restructuring Transaction, any
Executory Contract or Unexpired Lease to be held by any Debtor or Reorganized
Debtor and assumed hereunder or otherwise in the Chapter 11 Cases will be deemed
assigned to the surviving, resulting or acquiring corporation in the applicable
Restructuring Transaction, pursuant to section 365 of the Bankruptcy Code. If an
objection to a proposed assumption, assumption and assignment or Cure Amount
Claim is not resolved in favor of the Debtors or the Reorganized Debtors, the
applicable Executory Contract or Unexpired Lease may be designated by the
Debtors or the Reorganized Debtors for rejection, which shall be deemed
effective as of the Effective Date.
3. PAYMENTS RELATED TO THE ASSUMPTION OF EXECUTORY CONTRACTS OR UNEXPIRED
LEASES
To the extent that such Claims constitute monetary defaults, the
Cure Amount Claims associated with each Executory Contract or Unexpired Lease to
be assumed pursuant to the Plan will be satisfied, pursuant to section 365(b)(1)
of the Bankruptcy Code, at the option of the applicable Debtor or Reorganized
Debtor: (a) by payment of the Cure Amount Claim in Cash on the Effective Date or
(b) on such other terms as are agreed to by the parties to such Executory
Contract or Unexpired Lease. If there is a dispute regarding: (a) the amount of
any Cure Amount Claim, (b) the ability of the applicable Reorganized Debtor or
any assignee to provide "adequate assurance of future performance" (within the
meaning of section 365 of the Bankruptcy Code) under the contract or lease to be
assumed or (c) any other matter pertaining to the assumption of such contract or
lease, the payment of any Cure Amount Claim required by section 365(b)(1) of the
Bankruptcy Code will be made within 30 days following the entry of a Final Order
or the execution of a Stipulation of Amount and Nature of Claim resolving the
dispute and approving the assumption.
4. CONTRACTS AND LEASES ENTERED INTO AFTER THE PETITION DATE
Contracts, leases and other agreements entered into after the Petition
Date by a Debtor, including, without limitation, the Union Settlement Agreements
and any Executory Contracts or Unexpired Leases assumed by a Debtor, will be
performed by such Debtor or Reorganized Debtor in the ordinary course of its
business, as applicable. Accordingly, such contracts and leases (including any
assumed Executory Contracts or Unexpired Leases) will survive and remain
unaffected by entry of the Confirmation Order.
5. REJECTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
On the Effective Date, except for an Executory Contract or Unexpired
Lease that was previously assumed, assumed and assigned or rejected by an order
of the Bankruptcy Court or that is assumed pursuant to Section II.E (including
any related agreements assumed pursuant to Section II.E.1.b), each Executory
Contract or Unexpired Lease entered into by a Debtor prior to the Petition Date
that has not previously expired or terminated pursuant to its own terms will be
rejected pursuant to section 365 of the Bankruptcy Code. The Executory Contracts
or Unexpired Leases to be rejected will include the Executory Contracts or
Unexpired Leases listed on Exhibit II.E.5. Each contract and lease listed on
Exhibit II.E.5 will be rejected only to the extent that any such contract or
lease constitutes an Executory Contract or Unexpired Lease. Listing a contract
or lease on Exhibit II.E.5 will not constitute an admission by a Debtor or
Reorganized Debtor that such contract or lease (including related agreements as
described in Section II.E.1.b) is an Executory Contract or Unexpired Lease or
that a Debtor or Reorganized Debtor has any liability thereunder. Any Executory
Contract or Unexpired Lease not listed on Exhibit II.E.1.a and not previously
assumed, assumed and assigned or rejected by an order of the Bankruptcy Court
will be deemed rejected irrespective of whether such contract is listed on
Exhibit II.E.5. The Confirmation Order will constitute an order of the
Bankruptcy Court approving such rejections, pursuant to section 365 of the
Bankruptcy Code, as of the later of: (a) the Effective Date; or (b) the
resolution of any objection to the proposed rejection of an Executory Contract
or Unexpired Lease. Any Claims arising from the rejection of any Executory
Contract or Unexpired Lease will be treated as a Class 5A Claim or Class 5F
Claim, as applicable (General Unsecured Claims), subject to the provisions of
section 502 of the Bankruptcy Code.
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6. BAR DATE FOR REJECTION DAMAGES
Except as otherwise provided in a Final Order of the Bankruptcy Court
approving the rejection of an Executory Contract or Unexpired Lease, Claims
arising out of the rejection of an Executory Contract or Unexpired Lease must be
Filed with the Bankruptcy Court on or before the later of: (a) 30 days after the
Effective Date or (b) 20 days after such Executory Contract or Unexpired Lease
is rejected pursuant to a Final Order or designated for rejection in accordance
with Section II.E.2. Any Claims not Filed within such applicable time periods
will be forever barred from receiving a distribution from the Debtors, the
Reorganized Debtors or the Estates.
7. SPECIAL EXECUTORY CONTRACT AND UNEXPIRED LEASE ISSUES
a. OBLIGATIONS TO INDEMNIFY DIRECTORS, OFFICERS AND EMPLOYEES
i. Prior to the Effective Date, Dana shall make arrangements to
continue liability and fiduciary (including ERISA) insurance for the benefit of
its directors, officers and employees for the period from and after the
Effective Date, and, prior to the Effective Date, shall fully pay the annual
premium for such insurance. With respect to its pre-Effective Date officers and
directors' liability insurance, Dana shall obtain and pay for a run-off policy
continuing existing policy limits on substantially the same terms and conditions
as existing officers and directors' liability policies, for a term of six years,
and providing coverage to all parties covered by policies in effect during the
pendency of the cases.
ii. The obligations of each Debtor or Reorganized Debtor to
indemnify any person who was serving as one of its directors, officers or
employees on or after February 28, 2006 by reason of such person's prior or
future service in such a capacity or as a director, officer or employee of
another corporation, partnership or other legal entity, to the extent provided
in the applicable certificates of incorporation, bylaws or similar constituent
documents, by statutory law or by written agreement, policies or procedures of
or with such Debtor or Reorganized Debtor, will be deemed and treated as
executory contracts that are assumed by the applicable Debtor or Reorganized
Debtor pursuant to the Plan and section 365 of the Bankruptcy Code as of the
Effective Date. Accordingly, such indemnification obligations will survive and
be unaffected by entry of the Confirmation Order, irrespective of whether such
indemnification is owed for an act or event occurring before or after the
Petition Date.
iii. The obligations of each Debtor or Reorganized Debtor to
indemnify any person who was serving as one of its directors, officers or
employees prior to February 28, 2006 by reason of such person's prior service in
such a capacity or as a director, officer or employee of another corporation,
partnership or other legal entity, to the extent provided in the applicable
certificates of incorporation, bylaws or similar constituent documents, by
statutory law or by written agreement, policies or procedures of or with such
Debtor, will terminate and be discharged pursuant to section 502(e) of the
Bankruptcy Code or otherwise as of the Effective Date; provided, however, that
to the extent that such indemnification obligations no longer give rise to
contingent Claims that can be disallowed pursuant to section 502(e) of the
Bankruptcy Code, such indemnification obligations will be deemed and treated as
Executory Contracts that are rejected by the applicable Debtor or Reorganized
Debtor pursuant to the Plan and section 365 of the Bankruptcy Code as of the
Effective Date, and any Claims arising from such indemnification obligations
(including any rejection damage claims) will be subject to the Bar Date
provisions of Section II.F.6.
8. NO CHANGE IN CONTROL
The consummation of the Plan, the implementation of the Restructuring
Transactions or the assumption or assumption and assignment of any Executory
Contract or Unexpired Lease to another Reorganized Debtor is not intended to,
and shall not, constitute a change in ownership or change in control under any
financial instrument, loan or financing agreement, Executory Contract or
Unexpired Lease or contract, lease or agreement in existence on the Effective
Date to which a Debtor is a party.
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ARTICLE III.
THE GLOBAL SETTLEMENT
The provisions of the Plan are intended to continue the
implementation of the Global Settlement and the transactions contemplated
thereby, as approved by the Global Settlement Order (other than the transactions
contemplated by the Old Investment Agreement and the Old Plan Support Agreement)
and the Appaloosa Approval Order. Transactions to be implemented pursuant to the
Global Settlement include, but are not limited to, the following:
A. ASSUMPTION AND ASSIGNMENT OF COLLECTIVE BARGAINING AGREEMENTS
On the Effective Date, Reorganized Dana will assume and assign to
the applicable Reorganized Debtor, in consultation with the applicable Unions,
(1) the collective bargaining agreements listed on Exhibit III.A, which include
the Union Settlement Agreements and the new collective bargaining agreements to
be entered into by the Debtors and the UAW or USW at the following bargaining
units: (a) Fort Wayne, IN - Local Union 903; (b) Henderson, KY - Local Union
9443-02; (c) Marion, IN - Local Union 113; (d) Auburn Hills, MI - UAW Local 771;
(e) Rochester Hills, MI - UAW Local 771; (f) Longview, TX - UAW Local [ ]; (g)
Lima, OH - UAW Local 1765; (h) Elizabethtown, KY - UAW Local 3047; and (i)
Pottstown, PA - UAW Local 644, (2) any new collective bargaining agreements
entered into between Dana and the UAW or USW, (3) the respective Neutrality
Agreements (as defined in the Union Settlement Agreements) and (4) any and all
other related agreements necessary to effect the Union Settlement Agreements.
Upon assumption, all proofs of claim filed by the Unions or any individual
relating to such collective bargaining agreements will be deemed withdrawn.
Ordinary course obligations arising under the assumed agreements shall be
unaltered by the Plan and shall be satisfied in the ordinary course of business.
B. CESSATION OF UNION RETIREE AND LONG TERM DISABILITY BENEFITS
On the Union Retiree Benefit Termination Date, the Reorganized
Debtors, in accordance with the Union Settlement Agreements, will cease
providing and paying (1) all retiree benefits (as defined in section 1114(a) of
the Bankruptcy Code) to all UAW and USW-represented retirees and (2) all long
term disability income and medical benefits to individuals who are Union
Disableds (as defined in the Union Settlement Agreements).
C. CONTRIBUTIONS TO UAW UNION RETIREE VEBA AND USW UNION RETIREE VEBA
On or after the Effective Date, in accordance with the terms of the
Union Settlement Agreements, the Reorganized Debtors will make (1) the UAW Union
Retiree VEBA Contribution and (2) the USW Union Retiree VEBA Contribution;
provided, however, that, to the extent the Debtors pursue a transaction other
than the New Equity Investment with Appaloosa, including a majority investment
transaction, a sale of substantially all of the Debtors' assets and any similar
transaction, the Unions may elect to receive, in accordance with the terms of
the Union Settlement Agreements and in lieu of the UAW Union Retiree VEBA
Contribution and the USW Union Retiree VEBA Contribution, either an Allowed
Administrative Claim in the amount of $764 million or an Allowed General
Unsecured Claim in Class 5F in the amount of $908 million.
D. ASSUMPTION AND ASSIGNMENT OF PENSION BENEFITS
On the Effective Date, Reorganized Dana shall assume and assign the
Pension Plans to New Dana Holdco, which will become the sponsor and continue to
administer the Pension Plans, satisfy the minimum funding standards pursuant to
26 U.S.C. Section 412 and 29 U.S.C. Section 1082 and administer the Pension
Plans in accordance with their terms and the provisions of ERISA and the
Internal Revenue Code. Furthermore, nothing in the Plan shall be construed as
discharging, releasing or relieving the Debtors or the Debtors' successors from
any liability imposed under any law or regulatory provision with respect to the
Pension Plans. Neither the PBGC, the Pension Plans nor any participant or
beneficiary of the Pension Plans shall be enjoined or precluded from enforcing
such liability with respect to the Pension Plans.
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E. EMERGENCE BONUS FOR UNION EMPLOYEES
In accordance with the terms of the Union Settlement Agreements, New
Dana Holdco will reserve New Dana Holdco Common Stock having a maximum aggregate
Per Share Value of $22.53 million to be distributed to certain current and
former union employees as a post-emergence bonus in accordance with Appendix J
to the Union Settlement Agreements.
F. THE NEW EQUITY INVESTMENT
On the Rights Offering Record Date (or as soon thereafter as is
reasonably practicable), Dana shall issue the Rights in accordance with the
terms of the Appaloosa Investment Agreement. On the Effective Date, New Dana
Holdco, will (1) issue the New Preferred Stock and (2) receive the New Equity
Investment in accordance with the terms and conditions of the Appaloosa
Investment Agreement. New Dana Holdco is authorized to execute and deliver those
documents necessary or appropriate to facilitate the offer and issuance of the
Rights and the New Preferred Stock and to take any necessary or appropriate
actions in connection therewith.
G. NEW EMPLOYMENT AGREEMENTS
Prior to the Effective Date, the individuals who will serve as
directors of New Dana Holdco, shall appoint a three-person committee of such
directors to negotiate, in consultation with Appaloosa, post-Effective Date
employment agreements with New Dana Holdco's anticipated senior management team.
Such employment agreements shall (1) be at market terms, (2) be reasonably
acceptable in form and substance to Appaloosa, in consultation with the Ad Hoc
Steering Committee (provided that the holders of at least $650 million in the
aggregate of Bondholder Claims have executed the Appaloosa Plan Support
Agreement), and (3) be approved by New Dana Holdco's board of directors on the
Effective Date.
H. LIMITATIONS ON SALES OF CORE BUSINESSES PRIOR TO EFFECTIVE DATE
Except for the sale of certain businesses specified by the Debtors and
disclosed in confidence to the Unions and the Creditors' Committee on or before
July 1, 2007 and Appaloosa on or before ____ __, 2007, and in addition to any
requirements or consents required by the DIP Lenders under the DIP Facility, the
Debtors will not sell any business line within their Automotive Systems Group or
Commercial Vehicles Group prior to the Effective Date without (1) the agreement
of the International President of the affected Union(s) (or any designee(s) of
such officer(s)) and (2) the consent of Appaloosa.
ARTICLE IV.
CONFIRMATION OF THE PLAN
A. CONDITIONS PRECEDENT TO CONFIRMATION
The following conditions are conditions to the entry of the
Confirmation Order unless such conditions, or any of them, have been satisfied
or duly waived pursuant to Section IV.C:
1. The Confirmation Order will be reasonably acceptable in form and
substance to (a) the Debtors, (b) the Creditors' Committee, (c) Appaloosa and
(d) to the extent that holders of at least $650 million in aggregate amount of
Bondholder Claims have signed the Appaloosa Plan Support Agreement, either (i)
the Ad Hoc Steering Committee or (ii) creditors holding at least $650 million in
aggregate amount of Allowed General Unsecured Claims.
2. The Plan shall not have been materially amended, altered or modified
from the Plan as Filed on [____________], unless such material amendment,
alteration or modification has been made in accordance with Section X.A of the
Plan.
3. All Exhibits to the Plan are in form and substance reasonably
satisfactory to (a) the Debtors, (b) the Unions, (c) Appaloosa and (d) to the
extent that holders of at least $650 million in aggregate amount of
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Bondholder Claims have signed the Appaloosa Plan Support Agreement, either (i)
the Ad Hoc Steering Committee or (ii) creditors holding at least $650 million in
aggregate amount of Allowed General Unsecured Claims.
B. CONDITIONS PRECEDENT TO THE EFFECTIVE DATE
The Effective Date will not occur, and the Plan will not be
consummated, unless and until the following conditions have been satisfied or
duly waived pursuant to Section IV.C:
1. The Bankruptcy Court shall have entered the Confirmation Order on or
before February 28, 2008.
2. The Bankruptcy Court shall have entered an order (contemplated to be
part of the Confirmation Order) approving and authorizing the Debtors and the
Reorganized Debtors to take all actions necessary or appropriate to implement
the Plan, including completion of the Restructuring Transactions and the other
transactions contemplated by the Plan and the implementation and consummation of
the contracts, instruments, releases and other agreements or documents entered
into or delivered in connection with the Plan.
3. No stay of the Confirmation Order shall then be in effect.
4. The documents effectuating the Exit Facility shall be in form and
substance reasonably satisfactory to the Debtors and Appaloosa and shall have
been executed and delivered by the Reorganized Debtors, the Exit Facility Agent
and each of the lenders under the Exit Facility.
5. The total amount of Allowed General Unsecured Claims (excluding any
General Unsecured Claims held by the Unions (including the Union Claim), any
General Unsecured Claims held by the Retiree Committee, Convenience Claims,
General Unsecured Claims against EFMG, Prepetition Intercompany Claims and the
DCC Claim) shall not exceed $3.25 billion.
6. The total amount of funded debt of the Reorganized Debtors, on a
consolidated basis, shall not exceed $1.5 billion.
7. The Reorganized Debtors' Minimum Emergence Liquidity shall be
reasonably acceptable to the Unions and Appaloosa.
8. The Effective Date shall occur on or before May 1, 2008.
9. The Plan and all Exhibits to the Plan shall not have been materially
amended, altered or modified from the Plan as confirmed by the Confirmation
Order, unless such material amendment, alteration or modification has been made
in accordance with Section X.A of the Plan.
C. WAIVER OF CONDITIONS TO THE CONFIRMATION OR EFFECTIVE DATE
The conditions to Confirmation and the conditions to the Effective
Date may be waived in whole or in part at any time by the agreement of (1) the
Debtors, (2) Appaloosa, (3) Creditors' Committee, (4) the Unions and (5) to the
extent that holders of at least $650 million in aggregate amount of Bondholder
Claims have signed the Appaloosa Plan Support Agreement, either (a) the Ad Hoc
Steering Committee or (b) creditors holding at least $650 million in aggregate
amount of Allowed General Unsecured Claims without an order of the Bankruptcy
Court, provided, however, that the condition precedent to the Effective Date in
Section IV.B.5 may be waived only by the Creditors' Committee acting reasonably
and consistently with its fiduciary duties to all unsecured creditors and after
taking into account the efforts that the Debtors, the Creditors' Committee and
other parties, if applicable, have made to resolve unsecured Claims.
D. EFFECT OF NONOCCURRENCE OF CONDITIONS TO THE EFFECTIVE DATE
If each of the conditions to the Effective Date is not satisfied or
duly waived in accordance with Section IV.C, then upon motion by the Debtors
made before the time that each of such conditions has been satisfied
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and upon notice to such parties in interest as the Bankruptcy Court may direct,
the Confirmation Order will be vacated by the Bankruptcy Court; provided,
however, that, notwithstanding the Filing of such motion, the Confirmation Order
may not be vacated if each of the conditions to the Effective Date is satisfied
before the Bankruptcy Court enters an order granting such motion. If the
Confirmation Order is vacated pursuant to this Section IV.D: (1) the Plan will
be null and void in all respects, including with respect to (a) the discharge of
Claims and termination of Interests pursuant to section 1141 of the Bankruptcy
Code, (b) the assumptions, assignments or rejections of Executory Contracts and
Unexpired Leases pursuant to Section II.E and (c) the releases described in
Section IV.E; (2) the Debtors shall return to the applicable Eligible Holders
any funds received in connection with the exercise of a Right; and (3) nothing
contained in the Plan will (a) constitute a waiver or release of any Claims by
or against, or any Interest in, any Debtor or (b) prejudice in any manner the
rights of the Debtors or any other party in interest.
E. EFFECT OF CONFIRMATION OF THE PLAN
1. DISSOLUTION OF OFFICIAL COMMITTEES
On the Effective Date, the Official Committees, to the extent not
previously dissolved, will dissolve, and the members of the Official Committees
and their respective Professionals will cease to have any role arising from or
related to the Chapter 11 Cases. The Professionals retained by the Official
Committees and the respective members thereof will not be entitled to assert any
Fee Claim for any services rendered or expenses incurred after the Effective
Date, except for reasonable fees for services rendered, and actual and necessary
expenses incurred, in connection with any applications for allowance of
compensation and reimbursement of expenses pending on the Effective Date or
Filed and served after the Effective Date pursuant to Section II.A.1.h.ii.A.
2. PRESERVATION OF RIGHTS OF ACTION BY THE DEBTORS AND THE REORGANIZED
DEBTORS; RECOVERY ACTIONS
Except as otherwise provided in the Plan or in any contract,
instrument, release or other agreement entered into or delivered in connection
with the Plan, in accordance with section 1123(b) of the Bankruptcy Code, the
Reorganized Debtors will retain and may enforce any claims, demands, rights,
defenses and causes of action that the Debtors or the Estates may hold against
any entity, including any Recovery Actions, to the extent not expressly released
under the Plan or by any Final Order of the Bankruptcy Court.
3. COMPREHENSIVE SETTLEMENT OF CLAIMS AND CONTROVERSIES
Pursuant to Bankruptcy Rule 9019 and in consideration for the
distributions and other benefits provided under the Plan, the provisions of the
Plan will constitute a good faith compromise and settlement of all claims or
controversies relating to the rights that a holder of a Claim (including
Prepetition Intercompany Claims) or Interest may have with respect to any
Allowed Claim or Allowed Interest or any distribution to be made pursuant to the
Plan on account of any Allowed Claim or Allowed Interest. The entry of the
Confirmation Order will constitute the Bankruptcy Court's approval, as of the
Effective Date, of the compromise or settlement of all such claims or
controversies and the Bankruptcy Court's finding that all such compromises or
settlements are in the best interests of the Debtors, Reorganized Debtors,
Estates and their respective property and Claim and Interest holders and are
fair, equitable and reasonable.
4. DISCHARGE OF CLAIMS AND TERMINATION OF INTERESTS
a. COMPLETE SATISFACTION, DISCHARGE AND RELEASE
Except as provided in the Plan or in the Confirmation Order, the
rights afforded under the Plan and the treatment of Claims and Interests under
the Plan will be in exchange for and in complete satisfaction, discharge and
release of all Claims and termination of all Interests arising on or before the
Effective Date, including any interest accrued on Claims from and after the
Petition Date. Except as provided in the Plan or in the Confirmation Order,
Confirmation will, as of the Effective Date and immediately after cancellation
of the Old Common Stock of Dana: (i) discharge the Debtors from all Claims or
other debts that arose on or before the
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Effective Date, and all debts of the kind specified in section 502(g), 502(h) or
502(i) of the Bankruptcy Code, whether or not (A) a proof of Claim based on such
debt is Filed or deemed Filed pursuant to section 501 of the Bankruptcy Code,
(B) a Claim based on such debt is allowed pursuant to section 502 of the
Bankruptcy Code or (C) the holder of a Claim based on such debt has accepted the
Plan; and (ii) terminate all Interests and other rights of holders of Interests
in the Debtors.
b. DISCHARGE AND TERMINATION
In accordance with the foregoing, except as provided in the Plan,
the Confirmation Order will be a judicial determination, as of the Effective
Date and immediately after the cancellation of the Old Common Stock of Dana, but
prior to the issuance of the New Dana Holdco Common Stock, of a discharge of all
Claims and other debts and Liabilities against the Debtors and a termination of
all Interests and other rights of the holders of Interests in the Debtors,
pursuant to sections 524 and 1141 of the Bankruptcy Code, and such discharge
will void any judgment obtained against the Debtors at any time, to the extent
that such judgment relates to a discharged Claim or terminated Interest.
5. INJUNCTION
On the Effective Date, except as otherwise provided herein or in the
Confirmation Order,
a. all Persons who have been, are or may be holders of Claims
against or Interests in a Debtor shall be enjoined from taking any of the
following actions against or affecting a Debtor, its Estate or its Assets with
respect to such Claims or Interests (other than actions brought to enforce any
rights or obligations under the Plan and appeals, if any, from the Confirmation
Order):
1. commencing, conducting or continuing in any manner, directly
or indirectly, any suit, action or other proceeding of any kind against a
Debtor, its Estate, its Assets or any direct or indirect successor in interest
to a Debtor, or any assets or property of such successor (including, without
limitation, all suits, actions and proceedings that are pending as of the
Effective Date, which must be withdrawn or dismissed with prejudice);
2. enforcing, levying, attaching, collecting or otherwise
recovering by any manner or means, directly or indirectly, any judgment, award,
decree or order against a Debtor, its Estate or its Assets or any direct or
indirect successor in interest to a Debtor, or any assets or property of such
successor;
3. creating, perfecting or otherwise enforcing in any manner,
directly or indirectly, any lien against a Debtor, its Estate or its Assets, or
any direct or indirect successor in interest to a Debtor, or any assets or
property of such successor other than as contemplated by the Plan;
4. except as provided herein, asserting any setoff, right of
subrogation or recoupment of any kind, directly or indirectly, against any
obligation due a Debtor, its Estate or its Assets, or any direct or indirect
successor in interest to a Debtor, or any assets or property of such successor;
and
5. proceeding in any manner in any place whatsoever that does
not conform to or comply with the provisions of the Plan or the settlements set
forth herein to the extent such settlements have been approved by the Bankruptcy
Court in connection with Confirmation of the Plan.
b. All Persons that have held, currently hold or may hold any
Liabilities released pursuant to Sections IV.E.6 and IV.E.7 will be permanently
enjoined from taking any of the following actions against any Released Party or
its property on account of such released Liabilities: (i) commencing, conducting
or continuing in any manner, directly or indirectly, any suit, action or other
proceeding of any kind; (ii) enforcing, levying, attaching, collecting or
otherwise recovering by any manner or means, directly or indirectly, any
judgment, award, decree or order; (iii) creating, perfecting or otherwise
enforcing in any manner, directly or indirectly, any lien; (iv) except as
provided herein, asserting any setoff, right of subrogation or recoupment of any
kind, directly or indirectly, against any obligation due a Released Party; and
(v) commencing or continuing any action, in any manner, in any place that does
not comply with or is inconsistent with the provisions of the Plan.
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6. RELEASES
a. GENERAL RELEASES BY DEBTORS AND REORGANIZED DEBTORS
Without limiting any other applicable provisions of, or releases
contained in, the Plan, as of the Effective Date, the Debtors and the
Reorganized Debtors, on behalf of themselves and their affiliates, the Estates
and their respective successors, assigns and any and all entities who may
purport to claim by, through, for or because of them, will forever release,
waive and discharge all Liabilities that they have, had or may have against any
Released Party; provided, however, that the foregoing provisions shall not
affect the liability of any Released Party that otherwise would result from any
act or omission to the extent that act or omission subsequently is determined in
a Final Order to have constituted gross negligence or willful misconduct.
b. GENERAL RELEASES BY HOLDERS OF CLAIMS OR INTERESTS
Without limiting any other applicable provisions of, or releases
contained in, the Plan, as of the Effective Date, in consideration for the
obligations of the Debtors and the Reorganized Debtors under the Plan and the
consideration and other contracts, instruments, releases, agreements or
documents to be entered into or delivered in connection with the Plan, each
holder of a Claim or Interest (i) that votes in favor of the Plan and/or (ii) to
the fullest extent permissible under law, will be deemed to forever release,
waive and discharge all Liabilities in any way relating to a Debtor, the Chapter
11 Cases, the Estates, the Plan, the Confirmation Exhibits or the Disclosure
Statement that such entity has, had or may have against any Released Party
(which release will be in addition to the discharge of Claims and termination of
Interests provided herein and under the Confirmation Order and the Bankruptcy
Code).
c. RELEASE OF RELEASED PARTIES BY OTHER RELEASED PARTIES
From and after the Effective Date, except with respect to obligations
under the Plan, the Global Settlement and the Appaloosa Investment Agreement and
related documents, to the fullest extent permitted by applicable law, the
Released Parties shall release each other from any and all Liabilities that any
Released Party is entitled to assert against any other Released Party in any way
relating to any Debtor, the Chapter 11 Cases, the Estates, the formulation,
preparation, negotiation, dissemination, implementation, administration,
confirmation or consummation of any of the Plan, or the property to be
distributed under the Plan, the Confirmation Exhibits, the Disclosure Statement,
any contract, employee pension or other benefit plan, instrument, release or
other agreement or document related to any Debtor, the Chapter 11 Cases or the
Estates created, modified, amended, terminated or entered into in connection
with either the Plan or any agreement between the Debtors and any Released Party
or any other act taken or omitted to be taken in connection with the Debtors'
bankruptcy; provided, however, that the foregoing provisions shall not affect
the liability of any Released Party that otherwise would result from any act or
omission to the extent that act or omission is determined in a Final Order to
have constituted gross negligence or willful misconduct.
7. EXCULPATION
From and after the Effective Date, except with respect to obligations
arising under the Plan, the Global Settlement and the Appaloosa Investment
Agreement and related documents, the Released Parties shall neither have nor
incur any liability to any Person for any act taken or omitted to be taken in
connection with the Debtors' restructuring, including the formulation,
preparation, dissemination, implementation, confirmation or approval of the
Global Settlement, the Plan, the Confirmation Exhibits, the Disclosure Statement
or any contract, instrument, release or other agreement or document provided for
or contemplated in connection with the consummation of the transactions set
forth in the Plan; provided, however, that the foregoing provisions shall not
affect the liability of any Person that otherwise would result from any such act
or omission to the extent that act or omission is determined in a Final Order to
have constituted gross negligence or willful misconduct. Any of the foregoing
parties in all respects shall be entitled to rely upon the advice of counsel
with respect to their duties and responsibilities under the Plan.
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8. TERMINATION OF CERTAIN SUBORDINATION RIGHTS AND SETTLEMENT OF RELATED
CLAIMS AND CONTROVERSIES
a. TERMINATION
The classification and manner of satisfying all Claims and Interests
under the Plan take into consideration all subordination rights, whether arising
under general principles of equitable subordination, contract, section 510(c) of
the Bankruptcy Code or otherwise, that a holder of a Claim or Interest may have
against other Claim or Interest holders with respect to any distribution made
pursuant to the Plan. Except as provided in Section IV.E.8.c, all subordination
rights that a holder of a Claim may have with respect to any distribution to be
made pursuant to the Plan will be discharged and terminated, and all actions
related to the enforcement of such subordination rights will be permanently
enjoined. Accordingly, distributions pursuant to the Plan to holders of Allowed
Claims will not be subject to payment to a beneficiary of such terminated
subordination rights or to levy, garnishment, attachment or other legal process
by a beneficiary of such terminated subordination rights.
b. SETTLEMENT
Pursuant to Bankruptcy Rule 9019 and in consideration for the
distributions and other benefits provided under the Plan, the provisions of the
Plan will constitute a good faith compromise and settlement of all claims or
controversies relating to the subordination rights that a holder of a Claim may
have with respect to any Allowed Claim or any distribution to be made pursuant
to the Plan on account of any Allowed Claim, except as provided in Section
IV.E.8.c. The entry of the Confirmation Order will constitute the Bankruptcy
Court's approval, as of the Effective Date, of the compromise or settlement of
all such claims or controversies and the Bankruptcy Court's finding that such
compromise or settlement is in the best interests of the Debtors, the
Reorganized Debtors and their respective property and Claim and Interest holders
and is fair, equitable and reasonable.
c. Preservation of Subordination under Section 510(b)
Notwithstanding anything to the contrary contained in Section IV.E.8,
the provisions of section 510(b) of the Bankruptcy Code, to the extent
applicable, are expressly preserved and shall be enforced pursuant to the Plan.
ARTICLE V.
MEANS FOR IMPLEMENTATION OF THE PLAN
A. CONTINUED CORPORATE EXISTENCE AND VESTING OF ASSETS
Except as otherwise provided herein (including with respect to the
Restructuring Transactions described in Section V.B), on the Effective Date: (1)
New Dana Holdco will be incorporated and shall exist as a separate corporate
entity, with all corporate powers in accordance with the laws of the state of
Delaware and the certificates of incorporation, bylaws and certificate of
designations attached hereto as Exhibits V.C.1.a and V.C.1.b; (2) each Debtor
will, as a Reorganized Debtor, continue to exist after the Effective Date as a
separate legal entity, with all of the powers of such a legal entity under
applicable law and without prejudice to any right to alter or terminate such
existence (whether by merger, dissolution or otherwise) under applicable state
law; (3) all property of the Estate of a Debtor, and any property acquired by a
Debtor or Reorganized Debtor under the Plan, will vest, subject to the
Restructuring Transactions, in such Reorganized Debtor free and clear of all
Claims, liens, charges, other encumbrances, Interests and other interests. On
and after the Effective Date, each Reorganized Debtor may operate its business
and may use, acquire and dispose of property and compromise or settle any claims
without supervision or approval by the Bankruptcy Court and free of any
restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those
restrictions expressly imposed by the Plan or the Confirmation Order. Without
limiting the foregoing, each Reorganized Debtor may pay the charges that it
incurs on or after the Effective Date for Professionals' fees, disbursements,
expenses or related support services (including fees relating to the preparation
of Professional fee applications) without application to, or the approval of,
the Bankruptcy Court.
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B. RESTRUCTURING TRANSACTIONS
1. RESTRUCTURING TRANSACTIONS GENERALLY
On or after the Confirmation Date, the applicable Debtors or
Reorganized Debtors may enter into such Restructuring Transactions and may take
such actions as the Debtors or Reorganized Debtors may determine to be necessary
or appropriate to effect a corporate restructuring of their respective
businesses or simplify the overall corporate structure of the Reorganized
Debtors, including but not limited to the restructuring transactions identified
on Exhibit V.B.1, all to the extent not inconsistent with any other terms of the
Plan. Unless otherwise provided by the terms of a Restructuring Transaction, all
such Restructuring Transactions will be deemed to occur on the Effective Date
and may include one or more mergers, consolidations, restructurings,
dispositions, liquidations or dissolutions, as may be determined by the Debtors
or the Reorganized Debtors to be necessary or appropriate. The actions to effect
these transactions may include: (a) the execution and delivery of appropriate
agreements or other documents of merger, consolidation, restructuring,
disposition, liquidation or dissolution containing terms that are consistent
with the terms of the Plan and that satisfy the requirements of applicable state
law and such other terms to which the applicable entities may agree; (b) the
execution and delivery of appropriate instruments of transfer, assignment,
assumption or delegation of any asset, property, right, liability, duty or
obligation on terms consistent with the terms of the Plan and having such other
terms to which the applicable entities may agree; (c) the filing of appropriate
certificates or articles of merger, consolidation, dissolution or change in
corporate form pursuant to applicable state law; and (d) the taking of all other
actions that the applicable entities determine to be necessary or appropriate,
including making filings or recordings that may be required by applicable state
law in connection with such transactions. Any such transactions may be effected
on or subsequent to the Effective Date without any further action by the
stockholders or directors of any of the Debtors or the Reorganized Debtors.
2. OBLIGATIONS OF ANY SUCCESSOR CORPORATION IN A RESTRUCTURING
TRANSACTION
The Restructuring Transactions may result in substantially all of the
respective assets, properties, rights, liabilities, duties and obligations of
certain of the Reorganized Debtors vesting in one or more surviving, resulting
or acquiring corporations. In each case in which the surviving, resulting or
acquiring corporation in any such transaction is a successor to a Reorganized
Debtor, such surviving, resulting or acquiring corporation will perform the
obligations of the applicable Reorganized Debtor pursuant to the Plan to pay or
otherwise satisfy the Allowed Claims against such Reorganized Debtor, except as
provided in the Plan or in any contract, instrument or other agreement or
document effecting a disposition to such surviving, resulting or acquiring
corporation, which may provide that another Reorganized Debtor will perform such
obligations.
C. CORPORATE GOVERNANCE AND DIRECTORS AND OFFICERS
1. CERTIFICATES OF INCORPORATION AND BYLAWS OF NEW DANA HOLDCO AND THE
OTHER REORGANIZED DEBTORS
As of the Effective Date, the certificates of incorporation and the
bylaws (or comparable constituent documents) of New Dana Holdco and the other
Reorganized Debtors, including the certificate of designations with respect to
New Dana Holdco, will be substantially in the forms set forth in Exhibits
V.C.1.a and V.C.1.b, respectively. The certificates of incorporation and bylaws
(or comparable constituent documents) of New Dana Holdco and each other
Reorganized Debtor, among other things, will: (a) prohibit the issuance of
nonvoting equity securities to the extent required by section 1123(a)(6) of the
Bankruptcy Code; (b) with respect to New Dana Holdco, authorize (i) the issuance
of New Dana Holdco Common Stock in amounts not less than the amounts necessary
to permit the distributions required or contemplated by the Plan and (ii) the
issuance of the New Preferred Stock. After the Effective Date, New Dana Holdco
and each other Reorganized Debtor may amend and restate their articles of
incorporation or bylaws (or comparable constituent documents) as permitted by
applicable state law, subject to the terms and conditions of such constituent
documents. On the Effective Date, or as soon thereafter as is practicable, New
Dana Holdco and each other Reorganized Debtor shall file such certificates of
incorporation (or comparable constituent documents) with the secretaries of
state of the states in which New Dana Holdco and such other Reorganized Debtors
are incorporated or organized, to the extent required by and in accordance with
the applicable corporate law of such states.
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2. DIRECTORS AND OFFICERS OF NEW DANA HOLDCO AND THE OTHER REORGANIZED
DEBTORS
Subject to any requirement of Bankruptcy Court approval pursuant to
section 1129(a)(5) of the Bankruptcy Code, from and after the Effective Date:
(a) the initial officers of New Dana Holdco and the other Reorganized Debtors
will consist of the individuals identified on Exhibit V.C.2; (b) the initial
board of directors of New Dana Holdco will be selected in accordance with the
terms of the Appaloosa Investment Agreement; and (c) the initial board of
directors of each of the other Reorganized Debtors will consist of the
individuals identified, or will be designated pursuant to the procedures
specified, on Exhibit V.C.2. Each such director and officer will serve from and
after the Effective Date until his or her successor is duly elected or appointed
and qualified or until his or her earlier death, resignation or removal in
accordance with the terms of the certificate of incorporation and bylaws (or
comparable constituent documents) of New Dana Holdco or the applicable other
Reorganized Debtor and state law.
3. COMPLIANCE WITH EXCHANGE ACT BY NEW DANA HOLDCO
From and after the Effective Date, New Dana Holdco shall timely file
with the SEC the annual reports, quarterly reports and other periodic reports
required to be filed with the SEC pursuant to sections 13(a) or 15(d) of the
Exchange Act.
D. NEW DANA HOLDCO COMMON STOCK
1. ISSUANCE AND DISTRIBUTION OF NEW DANA HOLDCO COMMON STOCK
The New Dana Holdco Common Stock, when issued or distributed as
provided in the Plan, will be duly authorized, validly issued and, if
applicable, fully paid and nonassessable. Each distribution and issuance under
the Plan shall be governed by the terms and conditions set forth in the Plan
applicable to such distribution or issuance and by the terms and conditions of
the instruments evidencing or relating to such distribution or issuance, which
terms and conditions shall bind each person or entity receiving such
distribution or issuance.
2. LISTING
New Dana Holdco will apply to list the New Dana Holdco Common Stock
on a national exchange as soon as practicable after the Effective Date when New
Dana Holdco meets the applicable listing requirements. If New Dana Holdco is not
able to list the New Dana Holdco Common Stock on a national exchange, it will
cooperate with any registered broker-dealer who may seek to initiate price
quotations for the New Dana Holdco Common Stock on the OTC Bulletin Board.
3. SECTION 1145 EXEMPTION
To the maximum extent provided by section 1145 of the Bankruptcy
Code and applicable nonbankruptcy law, the issuance of the New Dana Holdco
Common Stock and Rights under the Plan and New Series B Preferred Stock pursuant
to the valid exercise of a Right under the Plan will be exempt from registration
under the Securities Act and all rules and regulations promulgated thereunder.
E. EMPLOYMENT, RETIREMENT AND OTHER RELATED AGREEMENTS; CESSATION OF RETIREE
BENEFITS; WORKERS' COMPENSATION PROGRAMS
1. EMPLOYMENT-RELATED AGREEMENTS
As of the Effective Date, the Reorganized Debtors will have
authority to: (a) maintain, amend or revise existing employment, retirement,
welfare, incentive, severance, indemnification and other agreements with its
active directors, officers and employees, subject to the terms and conditions of
any such agreement; and (b) enter into new employment, retirement, welfare,
incentive, severance, indemnification and other agreements for active employees.
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2. CESSATION OF RETIREE BENEFITS
Prior to the Effective Date, the Debtors ceased providing and paying
all retiree benefits (as defined in section 1114(a) of the Bankruptcy Code) to:
(a) non-union retirees and their dependents in accordance with the Stipulation
and Agreed Order Between Dana Corporation and the Official Committee of
Non-Union Retirees (Docket No. 5356), dated May 21, 2007; and (b) retirees who
had been members of the International Association of Machinists and Aerospace
Workers and their dependents in accordance with the Agreed Order Approving
Settlement Agreement Between Dana Corporation and the International Association
of Machinists and Aerospace Workers (Docket No. 5180), dated April 27, 2007.
Retiree benefits (as defined in section 1114(a) of the Bankruptcy Code) to all
UAW and USW-represented retirees will be terminated in accordance with the
Global Settlement Order and Section III.B above.
3. CONTINUATION OF WORKERS' COMPENSATION PROGRAMS
From and after the Effective Date, the Reorganized Debtors will
continue to administer and pay the Claims arising before the Petition Date under
the Debtors' workers' compensation programs in all applicable jurisdictions in
accordance with the Debtors' prepetition practices and procedures, applicable
plan documents and governing state law; provided, however, that the Claims
arising from the Debtors' prepetition contractual assumption of, or indemnity
for, the liabilities of third parties under workers' compensation programs will
be treated as General Unsecured Claims in Classes 5A and 5F, as applicable.
4. EMERGENCE BONUS FOR NON-UNION EMPLOYEES
[________________________]
F. CORPORATE ACTION
The Restructuring Transactions; the adoption of new or amended and
restated certificates of incorporation and bylaws (or comparable constituent
documents) for New Dana Holdco and the other Reorganized Debtors and the
certificate of designations for New Dana Holdco; the initial selection of
directors and officers for each Reorganized Debtor; the entry into the Exit
Facility and receipt of the proceeds thereof; the establishment of the Creditor
Oversight Committee; the issuance of the New Preferred Stock and New Dana Holdco
Common Stock; the distribution of the New Dana Holdco Common Stock and Cash
pursuant to the Plan; the adoption, execution, delivery and implementation of
all contracts, leases, instruments, releases and other agreements or documents
related to any of the foregoing; the adoption, execution and implementation of
employment, retirement and indemnification agreements, incentive compensation
programs, retirement income plans, welfare benefit plans and other employee
plans and related agreements; and the other matters provided for under the Plan
involving the corporate structure of the Debtors and Reorganized Debtors or
corporate action to be taken by or required of a Debtor or Reorganized Debtor
will be deemed to occur and be effective as of the Effective Date, if no such
other date is specified in such other documents, and will be authorized and
approved in all respects and for all purposes without any requirement of further
action by the stockholders or directors of the Debtors or the Reorganized
Debtors.
G. CREDITOR OVERSIGHT COMMITTEE
1. COMPOSITION
On or prior to the Effective Date, the Creditor Oversight Committee shall
be established pursuant to the Creditor Oversight Committee Agreement.
2. RIGHTS AND RESPONSIBILITIES
The powers, rights and responsibilities of the Creditor Oversight
Committee shall be specified in the Creditor Oversight Committee Agreement,
which shall be Filed no later than five Business Days prior to the Confirmation
Hearing and shall include the authority and responsibility to review proposed
resolutions of General
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Unsecured Claims. In connection with this responsibility, the Creditor Oversight
Committee may employ, without further order of the Bankruptcy Court,
professionals to assist in carrying out its duties under the Plan.
Notwithstanding anything to the contrary in the Creditor Oversight Committee
Agreement or the Plan, the consultation and objection rights of the Creditor
Oversight Committee with respect to Claims shall be limited to General Unsecured
Claims that would result in the creation of an Allowed General Unsecured Claim
in excess of $[500,000].
3. FEES AND EXPENSES OF THE CREDITOR OVERSIGHT COMMITTEE
Except as otherwise ordered by the Bankruptcy Court, the reasonable and
necessary fees and expenses of the Creditor Oversight Committee (including the
reasonable and necessary fees and expenses of any professionals assisting the
Creditor Oversight Committee in carrying out its duties under the Plan) will be
paid by the Reorganized Debtors in accordance with the Creditor Oversight
Committee Agreement without further order from the Bankruptcy Court.
H. SPECIAL PROVISIONS REGARDING INSURED CLAIMS
1. LIMITATIONS ON AMOUNTS TO BE DISTRIBUTED TO HOLDERS OF ALLOWED INSURED
CLAIMS
Distributions under the Plan to each holder of an Allowed Insured
Claim will be in accordance with the treatment provided under the Plan for the
Class in which such Allowed Insured Claim is classified, but solely to the
extent that such Allowed Insured Claim is not satisfied from proceeds payable to
the holder thereof under any pertinent insurance policies and applicable law.
Nothing in this Section V.H will constitute a waiver of any claims, obligations,
suits, judgments, damages, demands, debts, rights, causes of action or
liabilities that any entity may hold against any other entity, including the
Debtors' insurance carriers.
2. REINSTATEMENT AND CONTINUATION OF INSURANCE POLICIES
From and after the Effective Date, each of the Debtors' insurance
policies in existence as of or prior to the Effective Date shall be reinstated
and continued in accordance with its terms and, to the extent applicable, shall
be deemed assumed or assumed and assigned by the applicable Debtor or
Reorganized Debtor pursuant to section 365 of the Bankruptcy Code and Section
II.E of the Plan. Each insurance carrier under such insurance policies shall
continue to honor and administer the policies with respect to the Reorganized
Debtors in the same manner and according to the same terms and practices
applicable to the Debtors prior to the Effective Date.
I. CANCELLATION AND SURRENDER OF INSTRUMENTS, SECURITIES AND OTHER
DOCUMENTATION
1. BONDS
Except as provided in any contract, instrument or other agreement or
document entered into or delivered in connection with the Plan, on the Effective
Date and concurrently with the applicable distributions made pursuant to Article
VI, the Indentures and the Bonds will be deemed canceled and of no further force
and effect against the Debtors, without any further action on the part of any
Debtor. The holders of the Bonds will have no rights against the Debtors arising
from or relating to such instruments and other documentation or the cancellation
thereof, except the rights provided pursuant to the Plan; provided, however,
that no distribution under the Plan will be made to or on behalf of any holder
of an Allowed Bondholder Claim until such Bonds are surrendered to and received
by the applicable Third Party Disbursing Agent to the extent required in Section
VI.K. Upon the cancellation of the Indentures on the Effective Date, the
Indenture Trustee shall have no further duties or obligations under such
Indenture from and after the Effective Date, including, without limitation, any
duties or obligations with respect to distributions to or for the benefit of the
holders of the Bonds under the Plan (other than those duties or obligations
undertaken by the Indenture Trustee in its capacity as a Disbursing Agent, if
any).
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2. OLD COMMON STOCK
The Old Common Stock of Dana shall be deemed canceled and of no
further force and effect on the Effective Date. The holders of or parties to
such canceled securities and other documentation will have no rights arising
from or relating to such securities and other documentation or the cancellation
thereof, except the rights provided pursuant to the Plan.
J. RELEASE OF LIENS
Except as otherwise provided in the Plan or in any contract,
instrument, release or other agreement or document entered into or delivered in
connection with the Plan, on the Effective Date and except as specified in the
treatment provided for Claims and Interests in Article II, all mortgages, deeds
of trust, liens or other security interests against the property of any Estate
will be fully released and discharged, and all of the right, title and interest
of any holder of such mortgages, deeds of trust, liens or other security
interests, including any rights to any collateral thereunder, will revert to the
applicable Reorganized Debtor and its successors and assigns. As of the
Effective Date, the Reorganized Debtors shall be authorized to execute and file
on behalf of creditors Form UCC-3 Termination Statements or such other forms as
may be necessary or appropriate to implement the provisions of this Section V.J.
K. EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS; EXEMPTION FROM CERTAIN
TRANSFER TAXES
The President, Chief Executive Officer, Chief Financial Officer or
any Vice President of each Debtor or Reorganized Debtor, as applicable, will be
authorized to execute, deliver, file or record such contracts, instruments,
releases and other agreements or documents and take such actions as may be
necessary or appropriate to effectuate and implement the provisions of the Plan.
The Secretary or any Assistant Secretary of each Debtor or Reorganized Debtor
will be authorized to certify or attest to any of the foregoing actions.
Pursuant to section 1146(a) of the Bankruptcy Code, the following will not be
subject to any stamp Tax, real estate transfer Tax, mortgage recording Tax,
sales or use Tax or similar Tax: (1) the issuance, transfer or exchange of New
Dana Holdco Common Stock and New Preferred Stock; (2) the creation of any
mortgage, deed of trust, lien or other security interest; (3) the making or
assignment of any lease or sublease; (4) the execution and delivery of the Exit
Facility; (5) any Restructuring Transaction; or (6) the making or delivery of
any deed or other instrument of transfer under, in furtherance of or in
connection with the Plan, including any merger agreements, agreements of
consolidation, restructuring, disposition, liquidation or dissolution, deeds,
bills of sale or assignments executed in connection with any of the foregoing or
pursuant to the Plan.
ARTICLE VI.
PROVISIONS GOVERNING DISTRIBUTIONS
A. DISTRIBUTIONS FOR CLAIMS AND INTERESTS ALLOWED AS OF THE EFFECTIVE DATE
Except as otherwise provided in this Article VI, distributions of Cash
(including Distributable Excess Minimum Cash) and Distributable Shares of New
Dana Holdco Common Stock to be made on the Effective Date to holders of Claims
or Interests as provided by Article II that are allowed as of the Effective Date
shall be deemed made on the Effective Date if made on the Effective Date or as
promptly thereafter as practicable, but in any event no later than: (1) 60 days
after the Effective Date; or (2) with respect to any particular Claim, such
later date when the applicable conditions of Section II.E.3 (regarding cure
payments for Executory Contracts and Unexpired Leases being assumed), Section
VI.E.2 (regarding undeliverable distributions) or Section VI.K (regarding
surrender of canceled instruments and securities), as applicable, are satisfied.
Distributions on account of Claims and Interests that become Allowed Claims or
Allowed Interests, respectively, after the Effective Date will be made pursuant
to Section VII.C. For the purposes of all distributions of New Dana Holdco
Common Stock to be made pursuant to the Plan, each share of New Dana Holdco
Common Stock shall be valued at the Per Share Value.
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B. METHOD OF DISTRIBUTIONS TO HOLDERS OF CLAIMS AND INTERESTS
The Reorganized Debtors, or such Third Party Disbursing Agents as the
Reorganized Debtors, in consultation with the Creditor Oversight Committee, may
employ in their sole discretion, will make all distributions of Cash, New Dana
Holdco Common Stock and other instruments or documents required under the Plan.
Each Disbursing Agent will serve without bond, and any Disbursing Agent may
employ or contract with other entities to assist in or make the distributions
required by the Plan. The duties of any Third Party Disbursing Agent shall be
set forth in the applicable agreement retaining such Third Party Disbursing
Agent.
C. COMPENSATION AND REIMBURSEMENT FOR SERVICES RELATED TO DISTRIBUTIONS
Each Third Party Disbursing Agent providing services related to
distributions pursuant to the Plan will receive from the Reorganized Debtors,
without further Bankruptcy Court approval, reasonable compensation for such
services and reimbursement of reasonable out-of-pocket expenses incurred in
connection with such services. These payments will be made by the Reorganized
Debtors and will not be deducted from distributions to be made pursuant to the
Plan to holders of Allowed Claims receiving distributions from a Third Party
Disbursing Agent.
D. PROVISIONS GOVERNING DISPUTED UNSECURED CLAIMS RESERVE
1. FUNDING OF THE DISPUTED UNSECURED CLAIMS RESERVE
On the Effective Date, the Disputed Unsecured Claims Reserve will be
established by the Disbursing Agent and the Reserved Shares and/or Reserved
Excess Minimum Cash will be placed in the Disputed Unsecured Claims Reserve by
the Disbursing Agent for the benefit of holders of Disputed Claims and Allowed
Interests, as the case may be, in Classes 5B, 5C, 5D, 5E, 5F, 7A and 7B. For the
purpose of calculating the amount of New Dana Holdco Common Stock and/or Excess
Minimum Cash to be contributed to the Disputed Unsecured Claims Reserve, all
Disputed Claims will be treated (solely for purposes of establishing the
Disputed Unsecured Claims Reserve) either as Allowed Claims in the Face Amount
of such Claims or as estimated by the Bankruptcy Court, as applicable.
2. DIVIDENDS AND DISTRIBUTIONS
Cash dividends and other distributions received by the Disbursing
Agent on account of the Reserved Shares, along with any Cash Investment Yield on
Cash held in the Disputed Unsecured Claims Reserve, will (a) be deposited in a
segregated bank account in the name of the Disbursing Agent for the benefit of
holders of Allowed Claims or Allowed Interests, as the case may be, in Classes
5B, 5C, 5D, 5E, 5F, 7A and 7B (b) will be accounted for separately and (c) will
not constitute property of the Reorganized Debtors. The Disbursing Agent will
invest any Cash held in the Disputed Unsecured Claims Reserve in a manner
consistent with Dana's investment and deposit guidelines.
3. RECOURSE
Each holder of a Disputed Claim that ultimately becomes an Allowed
Claim in Classes 5B, 5C, 5D, 5E and 5F will have recourse only to the Disputed
Unsecured Claims Reserve Assets and not to any other assets held by the
Reorganized Debtors, their property or any assets previously distributed on
account of any Allowed Claim or Allowed Interest. Each holder of an Allowed
Claim or Allowed Interest in Classes 7A or 7B will have recourse, to the extent
each holder of an Allowed Claim in Classes 5B, 5C, 5D, 5E and 5F has been paid
in full, plus Postpetition Interest, only to the Disputed Unsecured Claims
Reserve Assets, if any, and not to any other assets held by any Disbursing
Agent, the Reorganized Debtors, their property or any assets previously
distributed on account of any Allowed Claim or Allowed Interest.
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4. VOTING OF UNDELIVERED NEW DANA HOLDCO COMMON STOCK
The Disbursing Agent shall vote, and shall be deemed to vote, the
Reserved Shares held by it in its capacity as Disbursing Agent in the same
proportion as all outstanding shares of New Dana Holdco Common Stock properly
cast in a shareholder vote.
5. TAX TREATMENT
The Disputed Unsecured Claims Reserve is intended to be treated, for
U.S. federal income Tax purposes, as a disputed ownership fund within the
meaning of Treasury Regulations section 1.468B-9(b)(1).
E. DELIVERY OF DISTRIBUTIONS AND UNDELIVERABLE OR UNCLAIMED DISTRIBUTIONS
1. DELIVERY OF DISTRIBUTIONS
a. GENERALLY
Except as provided in Section VI.E.1.b, distributions to holders of
Allowed Claims and, to the extent applicable, Allowed Interests, will be made by
a Disbursing Agent: (i) at (A) the addresses set forth on the respective proofs
of Claim Filed by holders of such Claims and (B) the address of such record
holder listed with the registrar or transfer agent for such Interest; (ii) at
the address for a Claim transferee set forth in a valid notice of transfer of
Claim; (iii) at the addresses set forth in any written certification of address
change delivered to the Disbursing Agent (including pursuant to a letter of
transmittal delivered to a Disbursing Agent) after the date of Filing of any
related proof of Claim; (iv) at the addresses reflected in the applicable
Debtor's Schedules if no proof of Claim has been Filed and the Disbursing Agent
has not received a written notice of a change of address; or (v) if clauses (i)
through (iv) are not applicable, at the last address directed by such holder in
a Filing made after such Claim or Interest becomes an Allowed Claim or Allowed
Interest.
b. SPECIAL PROVISIONS FOR DISTRIBUTIONS TO HOLDERS OF BONDHOLDER
CLAIMS AND INTERESTS ON ACCOUNT OF OLD COMMON STOCK OF DANA
i. Subject to the requirements of Section VI.K and Section
VI.E.1.b.ii below, distributions to holders of Allowed Bondholder Claims will be
made by a Disbursing Agent to the record holders of the Bonds as of the
Distribution Record Date, as identified on a record holder register to be
provided to the Disbursing Agent by the Indenture Trustee within five Business
Days after the Distribution Record Date. This record holder register (A) will
provide the name, address and holdings of each respective registered holder as
of the Distribution Record Date and (B) must be consistent with the applicable
holder's Claim, if Filed, or as otherwise determined by the Court.
ii. With respect to the Allowed Bondholder Claims, on the
Effective Date (or as soon as practicable thereafter in accordance with Section
VI.A), a Disbursing Agent will distribute the Distributable Shares of New Dana
Holdco Common Stock and Distributable Excess Minimum Cash on account of the
Allowed Bondholder Claims to the Indenture Trustee. The Indenture Trustee then
will distribute the New Dana Holdco Common Stock and Distributable Excess
Minimum Cash in accordance with the Plan to the holders of the Allowed
Bondholder Claims who surrender the Bonds to the Indenture Trustee in accordance
with Sections V.I.1 and VI.K. For purposes of distributions under this Section,
the Indenture Trustee shall be considered a Disbursing Agent.
iii. Subject to the requirements of Section VI.K, any
distributions to holders of Allowed Interests on account of Old Common Stock of
Dana will be made by a Disbursing Agent at the address of such record holder
listed with the registrar or transfer agent for such Interest, to be provided by
such registrar or transfer agent to the Disbursing Agent within five Business
Days after the Distribution Record Date.
iv. The Debtors, the Reorganized Debtors and any Disbursing
Agent shall only be required to act and make distributions in accordance with
the terms of the Plan. Such parties shall have no (A) liability to any party for
actions taken in accordance with the Plan or in reliance upon information
provided to it
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in accordance with the Plan or (B) obligation or liability for distributions
under the Plan to any party who does not hold a Claim against or Interest in the
Debtors as of the Distribution Record Date or who does not otherwise comply with
the terms of the Plan, including Sections V.I and VI.K.
2. UNDELIVERABLE DISTRIBUTIONS HELD BY DISBURSING AGENTS
a. HOLDING OF UNDELIVERABLE DISTRIBUTIONS; UNDELIVERED NEW DANA
HOLDCO COMMON STOCK
i. Subject to Section VI.E.2.c, distributions returned to a
Disbursing Agent or otherwise undeliverable will remain in the possession of the
applicable Disbursing Agent pursuant to this Section VI.E.2.a.i until such time
as a distribution becomes deliverable. Subject to Section VI.E.2.c,
undeliverable Cash or New Dana Holdco Common Stock will be held by the
applicable Disbursing Agent for the benefit of the potential claimants of such
Cash or New Dana Holdco Common Stock.
ii. Pending the distribution of any New Dana Holdco Common
Stock, the Disbursing Agent shall vote, and shall be deemed to vote, all New
Dana Holdco Common Stock held by such Disbursing Agent, whether relating to
undeliverable distributions or undelivered distributions, in the same proportion
as all outstanding shares of New Dana Holdco Common Stock properly cast in a
shareholder vote.
b. AFTER DISTRIBUTIONS BECOME DELIVERABLE
On each Periodic Distribution Date, the applicable Disbursing Agent
will make all distributions that become deliverable to holders of Allowed Claims
and, as applicable, Allowed Interests during the preceding calendar quarter;
provided, however, that the applicable Disbursing Agent may, in its sole
discretion, establish a record date prior to each Periodic Distribution Date,
such that only Claims Allowed as of the record date will participate in such
periodic distribution. Notwithstanding the foregoing, the applicable Disbursing
Agent reserves the right, to the extent it determines a distribution on any
Periodic Distribution Date is uneconomical or unfeasible, or is otherwise
unadvisable, to postpone a Periodic Distribution Date.
c. FAILURE TO CLAIM UNDELIVERABLE DISTRIBUTIONS
Any holder of an Allowed Claim or Allowed Interest that does not
assert a claim pursuant to the Plan for an undeliverable distribution to be made
by a Disbursing Agent within one year after the later of (i) the Effective Date
and (ii) the last date on which a distribution was deliverable to such holder
will have its claim for such undeliverable distribution discharged and will be
forever barred from asserting any such claim against the Reorganized Debtors. In
such cases, unclaimed distributions will become property of New Dana Holdco,
free of any restrictions thereon, and any such unclaimed distribution held by a
Third Party Disbursing Agent will be returned to New Dana Holdco. Nothing
contained in the Plan will require any Debtor, Reorganized Debtor or Disbursing
Agent to attempt to locate any holder of an Allowed Claim or an Allowed
Interest.
F. TIMING AND CALCULATION OF AMOUNTS TO BE DISTRIBUTED
1. DISTRIBUTIONS TO HOLDERS OF ALLOWED CLAIMS IN CLASSES OTHER THAN 5B,
5C, 5D, 5E, 5F AND 7B
Subject to Section VI.A, on the Effective Date, each holder of an
Allowed Claim in a Class other than 5B, 5C, 5D, 5E, 5F and 7B will receive the
full amount of the distributions that the Plan provides for Allowed Claims in
the applicable Class. No later than each Periodic Distribution Date,
distributions also will be made to holders of Disputed Claims in any such Class
that were allowed during the preceding calendar quarter. Such periodic
distributions also will be in the full amount that the Plan provides for Allowed
Claims in the applicable Class.
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2. POSTPETITION INTEREST ON CLAIMS
Except as expressly provided in the Plan, the Confirmation Order or
any contract, instrument, release, settlement or other agreement entered into in
connection with the Plan, or as required by applicable bankruptcy law,
Postpetition Interest shall not accrue on account of any Claim.
3. POST-EFFECTIVE DATE INTEREST ON CLAIMS
Post-Effective Date interest shall not accrue on account of any Claim.
4. DISTRIBUTIONS TO HOLDERS OF ALLOWED CLAIMS IN CLASSES 5B, 5C, 5D, 5E
AND 5F
a. INITIAL DISTRIBUTIONS TO HOLDERS OF ALLOWED CLAIMS IN CLASSES 5B,
5C, 5D, 5E AND 5F
Subject to Section VI.A, on the Effective Date, the Disbursing Agent
will distribute to each holder of an Allowed Claim in Classes 5B, 5C, 5D, 5E and
5F its Pro Rata share of the Distributable Shares of New Dana Holdco Common
Stock and Distributable Excess Minimum Cash.
If, prior to a Periodic Distribution Date, a Disputed Claim in
Classes 5B, 5C, 5D, 5E or 5F is Allowed in an amount that is less that the
amount utilized by the Disbursing Agent in calculating the initial distribution,
the applicable amount of Reserved Shares and Reserved Excess Minimum Cash will
be distributed, subject to Section VI.F.4.b, to the applicable holders of
Allowed Claims in Classes 5B, 5C, 5D, 5E and 5F on the next Periodic
Distribution Date.
b. PERIODIC DISTRIBUTIONS TO HOLDERS OF ALLOWED CLAIMS IN CLASSES
5B, 5C, 5D, 5E AND 5F
On the applicable Periodic Distribution Date, the Disbursing Agent
will distribute to each holder of an Allowed Claim in Classes 5B, 5C, 5D, 5E and
5F its Pro Rata share of the Reserved Shares and Reserved Excess Minimum Cash,
until such time as all Disputed Claims entitled to such distributions have been
resolved. On an applicable Periodic Distribution Date, a holder of an Allowed
Claim in Classes 5B, 5C, 5D, 5E and 5F that ceased being a Disputed Claim
subsequent to the Effective Date will receive a Catch-Up Distribution. The
Disbursing Agent may, in its sole discretion, establish a record date prior to
each Periodic Distribution Date, such that only Claims Allowed as of the record
date will participate in such periodic distribution. Notwithstanding the
foregoing, the Disbursing Agent reserves the right, to the extent it determines
a distribution on any Periodic Distribution Date is uneconomical or unfeasible,
or is otherwise unadvisable, to postpone a Periodic Distribution Date.
5. DISTRIBUTIONS TO HOLDERS OF ALLOWED INTERESTS IN CLASS 7A AND ALLOWED
CLAIMS IN CLASS 7B
a. INITIAL DISTRIBUTIONS TO HOLDERS OF ALLOWED INTERESTS IN CLASS 7A
AND ALLOWED CLAIMS IN CLASS 7B
On the Periodic Distribution Date upon which (a) all Disputed Claims
in Classes other than Class 7B entitled to distributions have been resolved and
(b) all distributions to which the holders of such Claims are entitled pursuant
to the terms of the Plan will be made from the Disputed Unsecured Claims
Reserve, the Disbursing Agent will distribute to each holder of an Allowed
Interest in Class 7A and an Allowed Claim in Class 7B its Pro Rata share of the
Reserved Shares and Reserved Excess Minimum Cash remaining in the Disputed
Unsecured Claims Reserve, if any. For the purpose of calculating the amount of
Reserved Shares and Reserved Excess Minimum Cash to be initially distributed to
holders of Allowed Interests in Class 7A and Allowed Claims in Class 7B, all
Disputed Claims in Class 7B will be treated as though such Claims will be
Allowed Claims in the principal amount of such Claims, or as estimated by the
Bankruptcy Court, as applicable.
If, prior to a Periodic Distribution Date, a Disputed Claim in Class
7B is Allowed in an amount that is less that the amount utilized by the
Disbursing Agent in calculating the initial distribution, the applicable
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Reserved Shares and Reserved Excess Minimum Cash will be distributed, subject to
Section VI.F.5.b, to the applicable holders of Allowed Interests in Class 7A and
Allowed Claims in Class 7B on the next Periodic Distribution Date.
b. PERIODIC DISTRIBUTIONS TO HOLDERS OF ALLOWED INTERESTS IN CLASS
7A AND ALLOWED CLAIMS IN CLASS 7B
On the applicable Periodic Distribution Date, the Disbursing Agent
will distribute to each holder of an Allowed Interest in Class 7A and an Allowed
Claim in Class 7B its Pro Rata share of the Reserved Shares and Reserved Excess
Minimum Cash, until such time as all Disputed Claims in Class 7B entitled to
such distributions have been resolved. On an applicable Periodic Distribution
Date, a holder of an Allowed Claim in Class 7B that ceased being a Disputed
Claim subsequent to the Effective Date will receive a Catch-Up Distribution. The
Disbursing Agent may, in its sole discretion, establish a record date prior to
each Periodic Distribution Date, such that only Claims Allowed as of the record
date will participate in such periodic distribution. Notwithstanding the
foregoing, the Disbursing Agent reserves the right, to the extent it determines
a distribution on any Periodic Distribution Date is uneconomical or unfeasible,
or is otherwise unadvisable, to postpone a Periodic Distribution Date.
6. DISTRIBUTIONS OF NEW DANA HOLDCO COMMON STOCK - NO FRACTIONAL SHARES;
ROUNDING
Notwithstanding any other provision of the Plan, only whole numbers of
shares of New Dana Holdco Common Stock will be distributed. For purposes of all
distributions other than the distribution on the Final Distribution Date,
fractional shares of New Dana Holdco Common Stock will be carried forward to the
next Periodic Distribution Date. On the Final Distribution Date, fractional
shares of New Dana Holdco Common Stock will be rounded up or down to the nearest
whole number or zero, as applicable. No New Dana Holdco Common Stock will be
distributed on account of fractional shares that are rounded down.
7. DE MINIMIS DISTRIBUTIONS
A Disbursing Agent will not distribute Cash (including Excess
Minimum Cash) or New Dana Holdco Common Stock to the holder of an Allowed Claim
or Allowed Interest, as applicable, if the amount of Cash (including Excess
Minimum Cash) or New Dana Holdco Common Stock to be distributed on the
particular Periodic Distribution Date does not constitute a final distribution
to such holder and is, or has an economic value of, less than $500.
8. ADMINISTRATION AND DISTRIBUTION OF UNION EMERGENCE SHARES
Notwithstanding anything in the Plan to the contrary, the Union
Emergence Shares shall be administered and distributed in accordance with
Appendix J to the Union Settlement Agreements.
G. DISTRIBUTION RECORD DATE
1. A Disbursing Agent will have no obligation to recognize the transfer
of, or the sale of any participation in, any Allowed Claim that occurs after the
Distribution Record Date and will be entitled for all purposes herein to
recognize and make distributions only to those holders of Allowed Claims that
are holders of such Claims, or participants therein, as of the Distribution
Record Date.
2. As of the close of business on the Distribution Record Date, each
transfer register for (a) the Bonds, as maintained by the Indenture Trustee, and
(b) the Old Common Stock of Dana, as maintained by the transfer agent, will be
closed. The applicable Disbursing Agent will have no obligation and is not
permitted to recognize the transfer or sale of any Bondholder Claim or Interest
on account of Old Common Stock of Dana that occurs after the close of business
on the Distribution Record Date and will be entitled for all purposes herein to
recognize and make distributions only to those holders who are holders of such
Claims or Interests as of the close of business on the Distribution Record Date.
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3. Except as otherwise provided in a Final Order, the transferees of
Claims that are transferred pursuant to Bankruptcy Rule 3001 prior to the
Distribution Record Date will be treated as the holders of such Claims for all
purposes, notwithstanding that any period provided by Bankruptcy Rule 3001 for
objecting to such transfer has not expired by the Distribution Record Date.
H. MEANS OF CASH PAYMENTS
Except as otherwise specified herein, Cash payments made pursuant to
the Plan will be by checks drawn on a domestic bank selected by the applicable
Disbursing Agent or, at the option of the applicable Disbursing Agent, by wire
transfer from a domestic bank.
I. FOREIGN CURRENCY EXCHANGE RATE
Except as otherwise provided in the Plan or a Bankruptcy Court order,
as of the Effective Date, any General Unsecured Claim asserted in a currency
other than U.S. dollars shall automatically be deemed converted to the
equivalent U.S. dollar value using the exchange rate as of March 2, 2006, as set
forth in the Federal Reserve Statistical Release for such date.
J. ESTABLISHMENT OF RESERVES
The Debtors or Reorganized Debtors may establish any reserves that
they deem necessary or advisable to make distributions to holders of Allowed
Claims or otherwise to satisfy their obligations under the Plan.
K. SURRENDER OF CANCELED INSTRUMENTS OR SECURITIES
1. TENDER OF BONDS
Except as provided in Section VI.K.2 for lost, stolen, mutilated or
destroyed Bonds, each holder of any Bond not held through book entry must tender
such Bond to the applicable Third Party Disbursing Agent in accordance with a
letter of transmittal to be provided to such holders by the Third Party
Disbursing Agent as promptly as practicable following the Effective Date. The
letter of transmittal will include, among other provisions, customary provisions
with respect to the authority of the holder of such Bond to act and the
authenticity of any signatures required thereon. All surrendered Bonds will be
marked as canceled and delivered to the Reorganized Debtors.
2. LOST, STOLEN, MUTILATED OR DESTROYED BONDS
Any holder of an Allowed Bondholder Claim with respect to which the
underlying Bond has been lost, stolen, mutilated or destroyed must, in lieu of
surrendering such Bond, deliver to the Third Party Disbursing Agent: (a)
evidence satisfactory to the Third Party Disbursing Agent of the loss, theft,
mutilation or destruction; and (b) such security or indemnity as may be required
by the Third Party Disbursing Agent to hold the Third Party Disbursing Agent,
the Debtors and Reorganized Debtors harmless from any damages, liabilities or
costs incurred in treating such individual as a holder of such Bond. Upon
compliance with this Section VI.K.2 by a holder of an Allowed Bondholder Claim,
such holder will, for all purposes under the Plan, be deemed to have surrendered
the applicable Bond.
3. FAILURE TO SURRENDER BONDS
Any holder of a Bond not held through book entry that fails to
surrender or is deemed not to have surrendered the applicable Bond within one
year after the Effective Date will have its right to distributions pursuant to
the Plan on account thereof discharged and will be forever barred from asserting
any such Claim against the Reorganized Debtors or their respective property. In
such case, any New Dana Holdco Common Stock held for distribution on account
thereof will be treated pursuant to the provisions set forth in Section
VI.E.2.c.
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4. TENDER OF OLD COMMON STOCK OF DANA
Except as provided in Section VI.K.5 for lost, stolen, mutilated or
destroyed certificates of Old Common Stock of Dana, each holder of Old Common
Stock of Dana not held through book entry must tender the Old Common Stock of
Dana certificates to the Third Party Disbursing Agent in accordance with a
letter of transmittal to be provided to such holders by the Third Party
Disbursing Agent on or before the Effective Date. The letter of transmittal will
include, among other provisions, customary provisions with respect to the
authority of the holder of such certificates to act and the authenticity of any
signatures required thereon. All surrendered certificates of Old Common Stock of
Dana will be marked as canceled and delivered to the Reorganized Debtors.
5. LOST, STOLEN, MUTILATED OR DESTROYED OLD COMMON STOCK OF DANA
Any holder of an Allowed Interest on account of Old Common Stock of
Dana with respect to which the underlying Old Common Stock of Dana certificate
has been lost, stolen, mutilated or destroyed must, in lieu of surrendering such
certificate, deliver to the Third Party Disbursing Agent: (a) evidence
satisfactory to the Third Party Disbursing Agent of the loss, theft, mutilation
or destruction; and (b) such security or indemnity as may be required by the
Third Party Disbursing Agent to hold the Third Party Disbursing Agent, the
Debtors and the Reorganized Debtors harmless from any damages, liabilities or
costs incurred in treating such individual as a holder of such Old Common Stock
of Dana. Upon compliance with this Section VI.K.5 by a holder of an Allowed
Interest on account of Old Common Stock of Dana, such holder will, for all
purposes under the Plan, be deemed to have surrendered the applicable stock
certificate.
6. FAILURE TO SURRENDER OLD COMMON STOCK OF DANA
Any holder of an Allowed Interest on account of Old Common Stock of
Dana not held through book entry that fails to surrender or is deemed not to
have surrendered the applicable stock certificate will have its right to receive
distributions pursuant to the Plan on account of its Allowed Interest discharged
and will be forever barred from asserting any such Interest or related Claims
against the Debtors, Reorganized Debtors or their respective property.
L. WITHHOLDING AND REPORTING REQUIREMENTS
1. In connection with the Plan, to the extent applicable, each Disbursing
Agent will comply with all applicable Tax withholding and reporting requirements
imposed on it by any governmental unit, and all distributions pursuant to the
Plan will be subject to applicable withholding and reporting requirements.
Notwithstanding any provision in the Plan to the contrary, each Disbursing Agent
will be authorized to take any actions that may be necessary or appropriate to
comply with such withholding and reporting requirements, including, without
limitation, liquidating a portion of the distribution to be made under the Plan
to generate sufficient funds to pay applicable withholding Taxes or establishing
any other mechanisms the Disbursing Agent believes are reasonable and
appropriate, including requiring Claim holders to submit appropriate Tax and
withholding certifications. To the extent any Claim holder fails to submit
appropriate Tax and withholding certifications as required by the Disbursing
Agent, such Claim holder's distribution will be deemed undeliverable and subject
to Section VI.E.2.
2. Notwithstanding any other provision of the Plan, each entity receiving
a distribution of Cash or New Dana Holdco Common Stock pursuant to the Plan will
have sole and exclusive responsibility for the satisfaction and payment of any
Tax obligations imposed on it by any governmental unit on account of the
distribution, including income, withholding and other Tax obligations.
3. The Debtors reserve the right to allocate and distribute all
distributions made under the Plan in compliance with all applicable wage
garnishments, alimony, child support and other spousal awards, liens and similar
encumbrances.
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M. SETOFFS
Except with respect to claims of a Debtor or Reorganized Debtor
released pursuant to the Plan or any contract, instrument, release or other
agreement or document entered into or delivered in connection with the Plan,
each Reorganized Debtor or, as instructed by a Reorganized Debtor, a Third Party
Disbursing Agent may, pursuant to section 553 of the Bankruptcy Code or
applicable nonbankruptcy law, set off against any Allowed Claim and the
distributions to be made pursuant to the Plan on account of the Claim (before
any distribution is made on account of the Claim) the claims, rights and causes
of action of any nature that the applicable Debtor or Reorganized Debtor may
hold against the holder of the Allowed Claim; provided, however, that neither
the failure to effect a setoff nor the allowance of any Claim hereunder will
constitute a waiver or release by the applicable Debtor or Reorganized Debtor of
any claims, rights and causes of action that the Debtor or Reorganized Debtor
may possess against the Claim holder.
N. APPLICATION OF DISTRIBUTIONS
To the extent applicable, all distributions to a holder of an
Allowed Claim will apply first to the principal amount of such Claim until such
principal amount is paid in full and then to any interest accrued on such Claim
prior to the Petition Date, and the remaining portion of such distributions, if
any, will apply to any interest accrued on such Claim after the Petition Date.
ARTICLE VII.
PROCEDURES FOR RESOLVING DISPUTED CLAIMS
A. TREATMENT OF DISPUTED CLAIMS
1. ADR PROCEDURES
At the Debtors' or, after the Effective Date, the Reorganized
Debtors' option, any Disputed Claim may be submitted to the ADR Procedures in
accordance with the terms of the ADR Procedures. Disputed Claims not resolved
through the ADR Procedures will be resolved pursuant to the Plan.
2. TORT CLAIMS
At the Debtors' or, after the Effective Date, the Reorganized
Debtors' option, any unliquidated Tort Claim (as to which a proof of Claim was
timely Filed in the Chapter 11 Cases) not resolved through the ADR Procedures
will be determined and liquidated in the administrative or judicial tribunal(s)
in which it is pending on the Effective Date or, if no action was pending on the
Effective Date, in any administrative or judicial tribunal of appropriate
jurisdiction. The Debtors or the Reorganized Debtors may exercise the above
option by service upon the holder of the applicable Tort Claim of a notice
informing the holder of such Tort Claim that the Debtors or the Reorganized
Debtors have exercised such option. Upon a Debtor's or Reorganized Debtor's
service of such notice, the automatic stay provided under section 362 of the
Bankruptcy Code, or after the Effective Date, the discharge injunction, will be
deemed modified, without the necessity for further Bankruptcy Court approval,
solely to the extent necessary to allow the parties to determine or liquidate
the Tort Claim in the applicable administrative or judicial tribunal(s).
Notwithstanding the foregoing, at all times prior to or after the Effective
Date, the Bankruptcy Court will retain jurisdiction relating to Tort Claims,
including the Debtors' right to have such Claims determined and/or liquidated in
the Bankruptcy Court (or the United States District Court having jurisdiction
over the Chapter 11 Cases) pursuant to Section 157(b)(2)(B) of title 28 of the
United States Code, as may be applicable. Any Tort Claim determined and
liquidated pursuant to a judgment obtained in accordance with this Section
VII.A.2 and applicable non-bankruptcy law that is no longer appealable or
subject to review will be deemed an Allowed Claim, as applicable, in Classes 5A,
5B, 5C, 5D, 5E and 5F against the applicable Debtor in such liquidated amount,
provided that only the amount of such Allowed Claim that is less than or equal
to the Debtor's self-insured retention or deductible in connection with any
applicable insurance policy and is not satisfied from proceeds of insurance
payable to the holder of such Allowed Claim under the Debtors' insurance
policies will be treated as an Allowed Claim for the purposes of distributions
under the Plan. In no event will a distribution be made under the Plan to the
holder of a Tort Claim on account of any portion of an Allowed Claim in excess
of the applicable Debtor's
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deductible or self-insured retention under any applicable insurance policy. In
the event a Tort Claim is determined and liquidated pursuant to a judgment or
order that is obtained in accordance with this Section VII.A.2 and is no longer
appealable or subject to review, and applicable non-bankruptcy law provides for
no recovery against the applicable Debtor, such Tort Claim will be deemed
expunged without the necessity for further Bankruptcy Court approval upon the
applicable Debtor's service of a copy of such judgment or order upon the holder
of such Tort Claim. Nothing contained in this Section will constitute or be
deemed a waiver of any claim, right or cause of action that a Debtor may have
against any person or entity in connection with or arising out of any Tort
Claim, including but not limited to any rights under section 157(b)(5) of title
28 of the United States Code. All claims, demands, rights, defenses and causes
of action that the Debtors or the Reorganized Debtors may have against any
person or entity in connection with or arising out of any Tort Claim are
expressly retained and preserved.
3. DISPUTED INSURED CLAIMS
The resolution of Disputed Insured Claims, including Tort Claims,
pursuant to this Section VII.A shall be subject to the provisions of Section V.H
of the Plan.
4. NO DISTRIBUTIONS PENDING ALLOWANCE
Notwithstanding any other provision of the Plan, no payments or
distributions will be made on account of a Disputed Claim until such Claim
becomes an Allowed Claim, if ever. In lieu of distributions under the Plan to
holders of Disputed Claims in Classes 5B, 5C, 5D, 5E and 5F, the Disputed
Unsecured Claims Reserve will be established on the Effective Date to hold the
Disputed Unsecured Claims Reserve Assets for the benefit of those Claim holders.
B. PROSECUTION OF OBJECTIONS TO CLAIMS
1. OBJECTIONS TO CLAIMS
All objections to Claims must be Filed and served on the holders of
such Claims, and any amendment to the Schedules to reduce the scheduled Claim of
such holder must be made by the Debtors or the Reorganized Debtors by the Claims
Objection Bar Date. If an objection has not been Filed to a Claim or an
amendment has not been made to the Schedules with respect to a scheduled Claim
by the Claims Objection Bar Date, the particular Claim will be treated as an
Allowed Claim if such Claim has not been allowed earlier.
2. AUTHORITY TO PROSECUTE OBJECTIONS
a. OBJECTIONS FILED PRIOR TO THE EFFECTIVE DATE
After the Confirmation Date, but prior to the Effective Date, the
Debtors and the Creditors' Committee will have the authority to File, settle,
compromise, withdraw or litigate to judgment objections to Claims, including
pursuant to any alternative dispute resolution or similar procedures approved by
the Bankruptcy Court.
b. OBJECTIONS FILED ON OR AFTER THE EFFECTIVE DATE
Except as provided herein, on or after the Effective Date, the
Reorganized Debtors, in consultation with the Creditor Oversight Committee, will
have the sole authority to File, settle, compromise, withdraw or litigate to
judgment objections to Claims, including pursuant to any alternative dispute
resolution or similar procedures approved by the Bankruptcy Court. In the event
that the Reorganized Debtors have not Filed an objection to a General Unsecured
Claim within 20 days of their receipt of a written request from the Creditor
Oversight Committee that the Reorganized Debtors File such an objection, which
written request shall in no event be served upon the Reorganized Debtors prior
to the later of (i) 100 days after the Effective Date or (ii) 45 days after the
Filing of a proof of Claim for such General Unsecured Claim, the Creditor
Oversight Committee shall have the right to File an objection to such General
Unsecured Claim.
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C. SETTLEMENT OR COMPROMISE OF DISPUTED CLAIMS ON OR AFTER THE
EFFECTIVE DATE
On or after the Effective Date, only the Reorganized Debtors, in
consultation with the Creditor Oversight Committee, may settle or compromise any
Disputed Claim or any objection or controversy relating to any Claim, without
approval of the Bankruptcy Court; provided, however, that if the Creditor
Oversight Committee Files an objection to such settlement or compromise within
ten Business Days of receiving written notice of such settlement or compromise,
unless agreed to otherwise by the Parties, Bankruptcy Court approval will be
required.
3. AUTHORITY TO AMEND SCHEDULES
The Debtors or Reorganized Debtors, as applicable, will have the
authority to amend the Schedules with respect to any Claim and to make
distributions based on such amended Schedules without approval of the Bankruptcy
Court. If any such amendment to the Schedules reduces the amount of a Claim or
changes the nature or priority of a Claim, the Debtor or Reorganized Debtor will
provide (a) the holder of such Claim and (b) the Creditors' Committee or
Creditor Oversight Committee (as applicable) with notice of such amendment and
such parties will have 20 days to File an objection to such amendment with the
Bankruptcy Court. If no such objection is Filed, the applicable Disbursing Agent
may proceed with distributions based on such amended Schedules without approval
of the Bankruptcy Court.
C. DISTRIBUTIONS ON ACCOUNT OF DISPUTED CLAIMS ONCE ALLOWED
Distributions on account of Disputed Claims that become Allowed Claims
after the Effective Date shall be made in accordance with Article VI of the
Plan.
ARTICLE VIII.
CONSOLIDATION OF THE DEBTORS
A. CONSOLIDATION
Pursuant to the Confirmation Order, the Bankruptcy Court shall approve
the consolidation of the Consolidated Debtors solely for the purpose of
implementing the Plan, including for purposes of voting, Confirmation and
distributions to be made under the Plan. Pursuant to such order: (1) all assets
and Liabilities of the Consolidated Debtors will be deemed merged; (2) all
guarantees by one Consolidated Debtor of the obligations of any other
Consolidated Debtor will be deemed eliminated so that any Claim against any
Consolidated Debtor and any guarantee thereof executed by any other Consolidated
Debtor and any joint or several liability of any of the Consolidated Debtors
will be deemed to be one obligation of the Consolidated Debtors; and (3) each
and every Claim Filed or to be Filed in the Chapter 11 Case of any of the
Consolidated Debtors will be deemed Filed against the Consolidated Debtors and
will be deemed one Claim against and a single obligation of the Consolidated
Debtors.
Such consolidation (other than for the purpose of implementing the
Plan) shall not affect: (1) the legal and corporate structures of the
Consolidated Debtors, subject to the right of the Consolidated Debtors to effect
restructurings as provided in Section V.B; (2) pre- and post-Effective Date
guarantees, liens and security interests that are required to be maintained (a)
in connection with contracts or leases that were entered into during the Chapter
11 Cases or Executory Contracts and Unexpired Leases that have been or will be
assumed or (b) pursuant to the Plan; (3) Interests between and among the
Consolidated Debtors; (4) distributions from any insurance policies or proceeds
of such policies; and (5) the revesting of assets in the separate Reorganized
Debtors pursuant to Section V.A.
B. ORDER GRANTING CONSOLIDATION
This Plan shall serve as a motion seeking entry of an order
consolidating the Consolidated Debtors, as described and to the limited extent
set forth in Section VIII.A above. Unless an objection to such consolidation is
made in writing by any creditor affected by the Plan, Filed with the Bankruptcy
Court and served on the parties listed in Section X.F on or before five days
before either the Voting Deadline or such other date as may be fixed by the
Bankruptcy Court, the consolidation order (which may be the Confirmation Order)
may be entered
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by the Bankruptcy Court. In the event any such objections are timely Filed, a
hearing with respect thereto shall occur at or before the Confirmation Hearing.
Notwithstanding this provision, nothing herein shall affect the obligation of
each and every Debtor to pay quarterly fees to the Office of the United States
Trustee in accordance with 28 U.S.C. Section 1930.
ARTICLE IX.
RETENTION OF JURISDICTION
Notwithstanding the entry of the Confirmation Order and the occurrence
of the Effective Date, the Bankruptcy Court will retain such jurisdiction over
the Chapter 11 Cases after the Effective Date as is legally permissible,
including jurisdiction to:
A. Allow, disallow, determine, liquidate, reduce, classify, re-classify,
estimate or establish the priority or secured or unsecured status of any Claim
or Interest (other than the liquidation of any Tort Claim in litigation that is
Reinstated pursuant to the Plan and Asbestos Personal Injury Claims), including
the resolution of any request for payment of any Administrative Claim and the
resolution of any objections to the amount, allowance, priority or
classification of Claims or Interests;
B. Either grant or deny any applications for allowance of compensation or
reimbursement of expenses authorized pursuant to the Bankruptcy Code or the Plan
for periods ending on or before the Effective Date;
C. Resolve any matters related to the assumption, assumption and
assignment or rejection of any Executory Contract or Unexpired Lease to which
any Debtor is a party or with respect to which any Debtor or Reorganized Debtor
may be liable and to hear, determine and, if necessary, liquidate any Claims
arising therefrom, including any Cure Amount Claims;
D. Ensure that distributions to holders of Allowed Claims and Allowed
Interests are accomplished pursuant to the provisions of the Plan;
E. Decide or resolve any motions, adversary proceedings, contested or
litigated matters and any other matters and either grant or deny any
applications involving any Debtor or any Reorganized Debtor that may be pending
on the Effective Date or brought thereafter;
F. Enter such orders as may be necessary or appropriate to implement or
consummate the provisions of the Plan and all contracts, instruments, releases
and other agreements or documents entered into or delivered in connection with
the Plan, the Creditor Oversight Committee Agreement, the Disclosure Statement
or the Confirmation Order;
G. Resolve any cases, controversies, suits or disputes that may arise in
connection with the consummation, interpretation or enforcement of the Plan, the
Creditor Oversight Committee Agreement or any contract, instrument, release or
other agreement or document that is entered into or delivered pursuant to the
Plan, the Creditor Oversight Committee Agreement or any entity's rights arising
from or obligations incurred in connection with the Plan, the Creditor Oversight
Committee Agreement or such documents;
H. Modify the Plan before or after the Effective Date pursuant to section
1127 of the Bankruptcy Code; modify the Disclosure Statement, the Confirmation
Order or any contract, instrument, release or other agreement or document
entered into or delivered in connection with the Plan, the Disclosure Statement
or the Confirmation Order; or remedy any defect or omission or reconcile any
inconsistency in any Bankruptcy Court order, the Plan, the Disclosure Statement,
the Confirmation Order or any contract, instrument, release or other agreement
or document entered into, delivered or created in connection with the Plan, the
Disclosure Statement or the Confirmation Order, in such manner as may be
necessary or appropriate to consummate the Plan;
I. Issue injunctions, enforce the injunctions contained in the Plan and
the Confirmation Order, enter and implement other orders or take such other
actions as may be necessary or appropriate to restrain interference by any
entity with consummation, implementation or enforcement of the Plan or the
Confirmation Order;
-50-
J. Enter and implement such orders as are necessary or appropriate if the
Confirmation Order is for any reason or in any respect modified, stayed,
reversed, revoked or vacated or distributions pursuant to the Plan are enjoined
or stayed;
K. Determine any other matters that may arise in connection with or
relate to the Plan, the Disclosure Statement, the Confirmation Order or any
contract, instrument, release or other agreement or document entered into or
delivered in connection with the Plan, the Disclosure Statement or the
Confirmation Order;
L. Enforce or clarify any orders previously entered by the Bankruptcy
Court in the Chapter 11 Cases;
M. Enter a final decree or decrees closing the Chapter 11 Cases;
N. Determine matters concerning state, local and federal Taxes in
accordance with sections 346, 505 and 1146 of the Bankruptcy Code, including any
Disputed Claims for Taxes;
O. Recover all assets of the Debtors and their Estates, wherever located;
and
P. Hear any other matter not inconsistent with the Bankruptcy Code.
ARTICLE X.
MISCELLANEOUS PROVISIONS
A. MODIFICATION OF THE PLAN
Subject to the restrictions on alteration, amendment and modification
set forth in section 1127 of the Bankruptcy Code, the Appaloosa Investment
Agreement, the Appaloosa Plan Support Agreement and Appendix R to the Union
Settlement Agreements, the Debtors reserve the right to alter, amend or modify
the Plan before the Effective Date.
B. REVOCATION OF THE PLAN
The Debtors reserve the right to revoke or withdraw the Plan prior to
the Confirmation Date. If the Debtors revoke or withdraw the Plan, or if
Confirmation does not occur, then the Plan will be null and void in all
respects, and nothing contained in the Plan will: (1) constitute a waiver or
release of any claims by or against, or any Interests in, any Debtor; (2)
prejudice in any manner the rights of any Debtor or any other party in interest;
or (3) constitute an admission of any sort by any Debtor or any other party in
interest.
C. SEVERABILITY OF PLAN PROVISIONS
If, prior to Confirmation, any term or provision of the Plan is held
by the Bankruptcy Court to be invalid, void or unenforceable, the remainder of
the terms and provisions of the Plan will remain in full force and effect and
will in no way be affected, impaired or invalidated by such holding, alteration
or interpretation. The Confirmation Order will constitute a judicial
determination and will provide that each term and provision of the Plan, as it
may have been altered or interpreted in accordance with the foregoing, is valid
and enforceable pursuant to its terms.
D. SUCCESSORS AND ASSIGNS
The rights, benefits and obligations of any entity named or referred
to in the Plan will be binding on, and will inure to the benefit of, any heir,
executor, administrator, successor or assign of such entity.
E. THE APPALOOSA INVESTMENT AGREEMENT AND UNION SETTLEMENT AGREEMENTS
Nothing in this Plan or the Disclosure Statement shall be deemed to be
an amendment of the Appaloosa Investment Agreement or the Union Settlement
Agreements. To the extent there is a conflict between
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the terms of the Plan and the Appaloosa Investment Agreement and/or the Union
Settlement Agreements, the terms of the Appaloosa Investment Agreement and/or
the Union Settlement Agreements shall control.
F. SERVICE OF DOCUMENTS
Any pleading, notice or other document required by the Plan or the
Confirmation Order to be served on or delivered to (1) the Debtors and the
Reorganized Debtors; (2) the Creditors' Committee; (3) the Retiree Committee;
(4) the Ad Hoc Bondholders' Committee; (5) Appaloosa; or (6) the Unions must be
sent by overnight delivery service, facsimile transmission, courier service or
messenger to:
1. THE DEBTORS AND REORGANIZED DEBTORS
Corinne Ball, Esq.
Richard H. Engman, Esq.
JONES DAY
222 East 41st Street
New York, New York 10017
Telephone: (212) 326-3939
Facsimile: (212) 755-7306
- and -
Heather Lennox, Esq.
Carl E. Black, Esq.
Ryan T. Routh, Esq.
JONES DAY
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Telephone: (216) 586-3939
Facsimile: (216) 579-0212
- and -
Jeffrey B. Ellman, Esq.
JONES DAY
1420 Peachtree Street, N.E.
Suite 800
Atlanta, Georgia 30309-3053
Telephone: (404) 521-3939
Facsimile: (404) 581-8330
(Counsel to the Debtors and Reorganized Debtors)
2. THE CREDITORS' COMMITTEE
Thomas Moers Mayer, Esq.
Matthew J. Williams, Esq.
Stephen D. Zide, Esq.
KRAMER LEVIN NAFTALIS & FRANKEL LLP
1177 Avenue of the Americas
New York, New York 10036
(212) 715-9100 (Telephone)
(212) 715-8000 (Facsimile)
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(Counsel to the Creditors' Committee)
3. THE RETIREE COMMITTEE
Trent P. Cornell, Esq.
Jon Cohen, Esq.
STAHL COWEN CROWLEY LLC
55 West Monroe Street
Suite 1200
Chicago, Illinois 60603
(312) 641-0060 (Telephone)
(312) 641-6959 (Facsimile)
(Counsel to the Retiree Committee)
4. THE AD HOC BONDHOLDERS' COMMITTEE
Kristopher M. Hansen, Esq.
Sayan Bhattacharyya, Esq.
STROOCK & STROOCK & LAVAN LLP
180 Maiden Lane
New York, New York 10038
(212) 806-6056 (Telephone)
(212) 806-9056 (Facsimile)
(Counsel to the Ad Hoc Bondholders' Committee)
5. APPALOOSA
Gerard Uzzi, Esq.
WHITE & CASE LLP
1155 Avenue of the Americas
New York, New York 10036
(212) 819-8200 (Telephone)
(212) 354-8113 (Facsimile)
(Counsel to Appaloosa)
6. THE UNIONS
Niraj R. Ganatra, Esq.
Associate General Counsel
International Union, United Automobile, Aerospace
and Agricultural Implement Workers of America
8000 East Jefferson Avenue
Detroit, Michigan 48214
(313) 926-5216 (Telephone)
(313) 926-5240 (Facsimile)
- and -
-53-
Lowell Peterson, Esq.
Meyer Suozzi English & Klein PC
1350 Broadway
Suite 501
New York, New York 10018
(212) 239-4999 (Telephone)
(212) 239-1311 (Facsimile)
(Counsel to the UAW)
- and -
David R. Jury, Esq.
Associate General Counsel
United Steel, Paper and Forestry, Rubber, Manufacturing,
Energy, Allied Industrial and Service Workers International Union
Five Gateway Center
Suite 807
Pittsburgh, Pennsylvania 15222
(412) 562-2400 (Telephone)
(412) 562-2574 (Facsimile)
- and -
Babette Ceccotti, Esq.
Cohen Weiss and Simon LLP
330 West 42nd Street
New York, New York 10036
(212) 356-0227 (Telephone)
(646) 473-8227 (Facsimile)
(Counsel to the Unions)
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Dated: _____ __, 2007 Respectfully submitted,
Dana Corporation, on its own behalf and
on behalf of each affiliate Debtor
By:
-----------------------------------
Name: Marc S. Levin
Title: Acting Secretary
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COUNSEL:
Corinne Ball (CB 8203)
Richard H. Engman (RE 7861)
JONES DAY
222 East 41st Street
New York, New York 10017
Telephone: (212) 326-3939
Facsimile: (212) 755-7306
Heather Lennox (HL 3046)
Carl E. Black (CB 4803)
Ryan T. Routh (RR 1994)
JONES DAY
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Telephone: (216) 586-3939
Facsimile: (216) 579-0212
Jeffrey B. Ellman (JE 5638)
JONES DAY
1420 Peachtree Street, N.E.
Suite 800
Atlanta, Georgia 30309-3053
Telephone: (404) 521-3939
Facsimile: (404) 581-8330
ATTORNEYS FOR DEBTORS
AND DEBTORS IN POSSESSION
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THIS AGREEMENT IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES OR
A SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN. SUCH OFFER OR
SOLICITATION ONLY WILL BE MADE IN COMPLIANCE WITH ALL
APPLICABLE SECURITIES LAWS AND/OR PROVISIONS OF THE
BANKRUPTCY CODE.
================================================================================
PLAN SUPPORT AGREEMENT
by and among
DANA CORPORATION,
UNITED STEELWORKERS,
INTERNATIONAL UNION, UAW, AND
APPALOOSA MANAGEMENT L.P.
================================================================================
Dated as of _____ __, 2007
TABLE OF CONTENTS
Page
RECITALS .................................................................2
ARTICLE I OVERVIEW OF CERTAIN DEFINED TERMS................................3
ARTICLE II OBLIGATIONS OF THE DEBTORS.......................................5
ARTICLE III SUPPORT OBLIGATIONS OF THE USW, THE UAW AND APPALOOSA............6
ARTICLE V PLAN FRAMEWORK...................................................9
ARTICLE VI ADDITIONAL AGREEMENTS............................................9
ARTICLE VII TERMINATION EVENTS...............................................9
ARTICLE VIII GOVERNING LAW; JURISDICTION; VENUE..............................10
ARTICLE IX IMPLEMENTATION..................................................10
ARTICLE X GENERAL PROVISIONS..............................................11
EXHIBITS
Exhibit A: Form of Plan
Exhibit B: Investment Agreement
-i-
PLAN SUPPORT AGREEMENT
This Plan Support Agreement (this "Agreement"), is entered into as of
______ __, 2007, by and among Dana Corporation ("Dana"), on behalf of itself and
its subsidiaries operating as debtors and debtors-in-possession (together with
Dana, the "Debtors") in the Chapter 11 Cases (as defined below); the United
Steelworkers (the "USW"); the International Union, UAW (the "UAW"); and
Appaloosa Management L.P. on behalf of itself and its affiliates ("Appaloosa").
Each of the Debtors, the USW, the UAW, Appaloosa and the Supporting Creditors is
referred to herein individually as a "Party," and collectively, as the
"Parties". As used herein, the words "this Agreement", "hereto", "hereunder" and
words of like import shall mean this Agreement.
RECITALS
A. On March 3, 2006, the Debtors commenced jointly administered
chapter 11 cases (together, the "Chapter 11 Cases") in the Bankruptcy Court
(as defined below).
B. On March 3, 2006, Stroock & Stroock & Lavan LLP ("Stroock") was
retained as counsel to an ad hoc group of holders of the Debtors' unsecured
bonds (the "Ad Hoc Group").
C. On February 1, 2007, the Debtors filed the Motion and Memorandum of
Law of Debtors and Debtors in Possession to Reject their Collective Bargaining
Agreements and to Modify their Retiree Benefits Pursuant to Sections 1113 and
1114 of the Bankruptcy Code (the "1113/1114 Litigation").
D. In March and April 2007, the trial with respect to the 1113/1114
Litigation took place before the Bankruptcy Court.
E. Commencing April 2007, the Debtors, the USW, the UAW and their
advisors engaged in discussions regarding a possible consensual resolution of
(i) the 1113/1114 Litigation and (ii) all other issues between the Debtors and
each of the USW and the UAW related to the Debtors' restructuring (the "Global
Settlement"). The Global Settlement includes, among other things, the settlement
of 1113/1114 Litigation reached by and among the Debtors and each of the Unions
as of July 5, 2007, as amended (the "Union Settlement Agreements").
F. On August 1, 2007, the Bankruptcy Court entered an order approving the
Global Settlement.
G. On ____ __, 2007, the Debtors accepted a proposal from Appaloosa
pursuant to which Appaloosa will become the lead plan investor under the Global
Settlement in accordance with the terms of the Investment Agreement (as defined
below).
H. On ____ __, 2007, the USW and UAW consented to the transactions
contemplated by the Investment Agreement in accordance with the terms of
Appendix R of the Union Settlement Agreements.
2
I. This Agreement sets forth the Parties' agreement with respect to their
support of a plan of reorganization for the Debtors in order to implement the
Plan (as defined below) and the Investment Agreement.
J. Appaloosa will make the New Investment (as defined below) on the terms
and on the conditions set forth in the Investment Agreement, which sets forth
the obligations of Appaloosa to make the New Investment in exchange for certain
Convertible Preferred Shares (as defined below) to be issued by Reorganized Dana
under a confirmed Plan.
K. Subject to the terms of this Agreement, the Parties have agreed to
work together to attempt to complete the negotiation of the terms of the Plan,
as well as to resolve other outstanding issues, and to formulate and facilitate
confirmation and consummation of the Plan and the transactions contemplated
hereby; provided, however, that Dana will be the sole proponent of the Plan.
L. In so agreeing, the Parties do not desire and do not intend in any way
to avoid, violate or diminish (i) the disclosure, solicitation and other
requirements of applicable securities and bankruptcy laws or (ii) the fiduciary
duties of the Debtors or any such other Party having such duties.
AGREEMENT
ARTICLE I
OVERVIEW OF CERTAIN DEFINED TERMS
1113/1114 Litigation Has the meaning set forth in Recital C hereof
Ad Hoc Group Has the meaning set forth in Recital B hereof
Agreement Has the meaning set forth in the Preamble hereof
Appaloosa Has the meaning set forth in the Preamble hereof
Bankruptcy Code Means the Bankruptcy Reform Act of 1978, as amended,
and codified at title 11 of the United States Code and
as applicable to the Chapter 11 Cases
Bankruptcy Court Means the United States Bankruptcy Court for the
Southern District of New York
Bankruptcy Rules Mean the Federal Rules of Bankruptcy Procedure
Chapter 11 Cases Has the meaning set forth in Recital A hereof
Claim Has the meaning ascribed to it in section 101 of the
Bankruptcy Code
Commitment Fee Has the meaning set forth in the Investment Agreement
attached hereto as Exhibit B
Confirmation Order Means the order of the Bankruptcy Court approving the
Debtors' Plan in form and substance reasonably
acceptable to the USW, the UAW and Appaloosa
Convertible Preferred Means, collectively, the Series A Preferred and the
Shares Series B Preferred (both as defined in the Investment
Agreement)
Creditors Committee Has the meaning set forth in Section 8.4(a) hereof
Dana Has the meaning set forth in the Preamble hereof
Debtors Has the meaning set forth in the Preamble hereof
Disclosure Statement Means a disclosure statement with respect to the Plan
filed by the Debtors with the Bankruptcy Court
Disclosure Statement Means the order of the Bankruptcy Court approving the
Order Debtors' Disclosure Statement, which shall be in form
and substance reasonably acceptable to the USW, the
UAW and Appaloosa
Effective Date Means a day, as determined by the Debtors and
reasonably acceptable to Appaloosa, that is the
business day as soon as reasonably practicable after
all conditions to the effective date set forth in the
Plan have been met or waived
Exit Facility Has the meaning set forth in the form of Plan attached
hereto as Exhibit A
Global Settlement Has the meaning set forth in Recital E hereof
Investment Agreement Means the Investment Agreement among Dana Corporation
and Appaloosa, attached hereto as Exhibit B and
incorporated herein by reference
Motion Has the meaning set forth in section 2.1 hereof
New Investment Means the proposed investment in the Reorganized
Company by Appaloosa and other potential investors
Party or Parties Has the meaning set forth in the Preamble hereof
Plan Means the chapter 11 plan of reorganization of the
Debtors,
which shall be reasonably acceptable to the USW, the
UAW and Appaloosa and substantially in the
form of the plan annexed hereto as Exhibit A
Reorganized Company Means the Reorganized Debtors and their nondebtor
subsidiaries
Reorganized Dana Means a corporation that shall be the successor of
Dana under a confirmed Plan
Reorganized Debtors Means the Debtors, or any successor thereto, on or
after the Effective Date of the Plan
Standby Purchasers Has the meaning set forth in the Investment Agreement
Termination Event Has the meaning set forth in section 6.1 hereof
UAW Has the meaning set forth in the Preamble hereof
Unions Means the authorized representatives of the USW and UAW
Union Settlement Has the meaning set forth in Recital E
Agreements
USW Has the meaning set forth in the Preamble hereof
Unsecured Claims Means unsecured nonpriority Claims other than: (i)
subject to Appaloosa's reasonable approval as to the
size of the Claims contained in such class, convenience
class claims, and (ii) subject to Appaloosa's
reasonable approval, (a) asbestos personal injury
claims, (b) intercompany claims, (c) Dana Credit
Corporation claims and (d) any Claims of the non-union
retirees represented by the Official Committee of
Non-Union Retirees
ARTICLE II
OBLIGATIONS OF THE DEBTORS
The Debtors presently believe that, subject to the exercise of their
fiduciary duties as debtors and debtors-in-possession (after consultation with
outside legal and financial advisors), prompt consummation of the Plan will
facilitate the Debtors' reorganization and is in the best interests of their
creditors, shareholders and other parties-in-interest. Accordingly, the Debtors
hereby agree, subject to the exercise of their fiduciary duties as debtors and
debtors-in-possession (after consultation with outside legal and financial
advisors), to use reasonable best efforts to propose the Plan and prosecute
confirmation and consummation thereof. Subject to the foregoing, for as long as
this Agreement remains in effect, the Debtors agree to:
2.1 Prepare and file with the Bankruptcy Court a motion (the "Motion")
seeking an order, which shall be in form and substance reasonably acceptable to
the USW, UAW and Appaloosa, from the Bankruptcy Court (i) approving and
authorizing the Debtors to enter into the Investment Agreement and this
Agreement; and (ii) determining that the Parties' entry into, and performance
of, their obligations under the Investment Agreement and this Agreement do not
violate any law, including the Bankruptcy Code, and do not give rise to any
claim or remedy against the Parties; and
2.2 Not object to any application under section 503(b) or inclusion as
part of the Plan under section 1129(a)(4) by Stroock for its representation of
the Ad Hoc Group for payment of its reasonable legal fees and expenses from the
filing of the Debtors' chapter 11 cases to the Effective Date up to a cap of $5
million; and
2.3 Not propose any Plan premised upon the use of section 382(l)(5) of the
Internal Revenue Code and will propose only a Plan premised upon the use of
section 382(l)(6) of the Internal Revenue Code; and
2.4 Engage in good faith negotiations with the other Parties and other
parties in interest regarding the Plan, Disclosure Statement and other
definitive documents that are consistent with this Agreement and that resolve
all unresolved items reflected herein and/or are necessary to the implementation
of the transactions contemplated by this Agreement; including, without
limitation:
a. Using reasonable best efforts to negotiate with parties in
interest and thereafter file an amended plan, substantially in the form of the
Plan, and related Disclosure Statement by _______ __, 2007; and
b. Use reasonable best efforts to obtain entry by the Bankruptcy
Court of the Confirmation Order on or before February 28, 2008.
ARTICLE III
SUPPORT OBLIGATIONS OF THE USW, THE UAW
AND APPALOOSA
Unless and until this Agreement has been terminated in accordance with its
terms, each of the USW, the UAW and Appaloosa agrees (and shall cause its
respective affiliates to agree) that:
3.1 It will support prosecution, confirmation and consummation of the Plan
including without limitation, (i) the entry of the Disclosure Statement Order
and (ii) the entry of the Confirmation Order, despite objection or the rejection
of the Plan (whether by vote or operation of section 1126(g) of the Bankruptcy
Code) by any impaired class; provided, however, that, for the avoidance of
doubt, nothing in this subsection is an agreement by any of the USW or the UAW
to vote to accept or reject the Plan.
3.2 It will not, nor will it encourage any other person or entity to, (i)
object to, delay, impede, appeal, or take any other action, directly or
indirectly, to interfere with, the entry of the
Disclosure Statement Order; (ii) commence any proceeding or prosecute, join in,
or otherwise support any action to oppose or object to the Plan or Disclosure
Statement; and (iii) delay, object to, impede, appeal, or take any other action,
directly or indirectly, to interfere with the acceptance or confirmation of the
Plan, the entry of the Confirmation Order or the occurrence of the Effective
Date.
3.3 It will engage in good faith negotiations with the other Parties and
other parties in interest regarding the Plan, Disclosure Statement and other
definitive documents that are consistent with this Agreement and/or are
necessary to the implementation of the transactions contemplated by this
Agreement.
3.4 Appaloosa hereby acknowledges and agrees that it has completed such
due diligence review as is required in order to commit to the New Investment and
that its obligations hereunder are not subject to any due diligence condition.
Without limiting the foregoing, the Debtors will continue to provide Appaloosa
with such information and access as it reasonably requests.
3.5 With respect to the UAW and USW only, not object to any application
under section 503(b) or as part of the Plan under section 1129(a)(4) by Stroock
for its representation of the Ad Hoc Group for payment of its reasonable legal
fees and expenses from the filing of the Debtors' Chapter 11 Cases to the
Effective Date up to a cap of $5 million.
3.6 With respect to Appaloosa only, support through publicly filed
pleadings any application under section 503(b) or as part of the Plan under
section 1129(a)(4) by Stroock for its representation of the Ad Hoc Group for
payment of its reasonable legal fees and expenses from the filing of the
Debtors' chapter 11 cases to the Effective Date up to a cap of $5 million.
3.7 It will not support any Plan premised upon the use of
section 382(l)(5) of the Internal Revenue Code and will support only a Plan
premised upon the use of section 382(l)(6) of the Internal Revenue Code.
ARTICLE IV
PLAN FRAMEWORK
4.1 The Plan will contain the terms set forth in the form of Plan and the
Investment Agreement, both of which are attached as Exhibits hereto and are
incorporated herein by reference.
ARTICLE V
ADDITIONAL AGREEMENTS
The Parties acknowledge and agree that as a critical and integral part of
the Global Settlement, the following agreements have been executed and
delivered:
5.1 The Debtors have executed and delivered the Union Settlement
Agreements, including the amendment dated as of the date hereof.
5.2 The USW and the UAW have executed and delivered their respective Union
Settlement Agreement in accordance with their respective constitutions,
including the amendment dated as of the date hereof; and
5.3 The Debtors and Appaloosa will execute and deliver the Investment
Agreement.
ARTICLE VI
TERMINATION EVENTS
6.1 The occurrence of any of the following shall be a "Termination Event":
a. The termination of the Investment Agreement once executed;
b. The termination of any one of the Union Settlement Agreements;
c. The Plan fails to become effective on or before May 1, 2008;
d. Any court shall declare, in a final, non-appealable order, this
Agreement to be unenforceable;
e. The Debtors obtain approval of a disclosure statement other than
the Disclosure Statement; or
f. The Motion is denied by the Bankruptcy Court.
6.2 All obligations hereunder of all Parties shall terminate and shall be
of no further force and effect:
a. Automatically, and without written notice, upon the occurrence of
the Termination Events described in Subsections 6.1(a), (b), (d), (e) and (f)
above;
b. Unless waived in writing by all Parties, upon written notice by
one Party upon the occurrence of the Termination Events described in Subsection
6.1(c) above; and
c. Automatically, and without written notice, immediately prior to
the issuance of the common stock and Convertible Preferred Shares contemplated
by the Plan and the Investment Agreement.
ARTICLE VII
GOVERNING LAW; JURISDICTION; VENUE
This Agreement shall be governed and construed in accordance with the
internal laws of the State of New York without regard to any conflict of law
provision that could require the application of the law of any other
jurisdiction. By its execution and delivery of this Agreement, each Party hereby
irrevocably and unconditionally agrees that the Bankruptcy Court will retain
exclusive jurisdiction over all matters related to the construction,
interpretation or enforcement
of this Agreement. Each Party further agrees to waive any objection based on
forum non conveniens. Each Party waives any right it may have to a trial by jury
and consents to the Bankruptcy Court hearing and determining any matters related
to the construction, interpretation or enforcement of this Agreement and the
Investment Agreement without regard to whether such matter is a core matter
within the meaning of 28 U.S.C. Section 157(b).
ARTICLE VIII
IMPLEMENTATION
8.1 After execution of this Agreement by all Parties, the Debtors will
file the Motion with the Bankruptcy Court. The USW and the UAW will timely file
statements in support of the Motion with the Bankruptcy Court.
8.2 The Parties agree to negotiate in good faith all of the documents and
transactions described in, or in connection with, this Agreement. Without
limiting the foregoing, the Exit Facility will be with parties and on market
terms reasonably acceptable to Appaloosa; provided that the Debtors shall have
the obligation to consult with Appaloosa regarding such terms and parties.
8.3 All holders of allowed Unsecured Claims will be entitled to purchase
shares of Series B Preferred at par value on a pro rata basis in accordance with
the terms of the Investment Agreement. Any shares of Series B Preferred not
purchased under the Series B Rights Offering will be purchased at par value by
Appaloosa and the Standby Purchasers; provided, however, that Appaloosa and the
Standby Purchasers shall receive a guaranteed minimum of 40% of the total
aggregate of shares of Series B Preferred and the Commitment Fee as
consideration for their agreement to purchase the excess shares of Series B
Preferred.
8.4 (a) Any signatory who is a member of the Official Committee of
Unsecured Creditors appointed in the Chapter 11 Cases (the "Creditors
Committee") executes this Agreement only in its individual capacity and not as a
member of the Creditors Committee, and nothing contained herein shall apply to
limit the free and unrestricted performance of such signatory's duties as a
member of the Creditors Committee, including, without limitation, the
consideration and action, solely as a Creditors Committee member and not in its
individual capacity, with respect to any competing plan of reorganization.
(b) Nothing contained herein shall restrict the right of a signatory to contact
the Creditors Committee to provide comments on any relevant matter under Section
1102(b)(2)(B) of the Bankruptcy Code, including without limitation the
signatory's views in favor of or against any competing plan of reorganization.
ARTICLE IX
GENERAL PROVISIONS
9.1 It is an express condition to the effectiveness of this Agreement that
the Bankruptcy Court shall have entered an order approving the Motion.
9.2 Except as expressly provided in this Agreement, nothing contained
herein (a) is intended to, or does, in any manner waive, limit, impair or
restrict the ability of each of the Parties to protect and preserve its rights,
remedies, and interests; (b) may be deemed an admission of any kind; or (c)
effects a modification of any existing agreement until such time as the
Bankruptcy Court may have approved such modification. If the transactions
contemplated herein are not consummated, or if this Agreement is terminated for
any reason, the Parties fully reserve any and all of their rights. Pursuant to
Federal Rule of Evidence 408 and any applicable state rules of evidence, this
Agreement and all negotiations relating thereto are not admissible into evidence
in any proceeding other than a proceeding to enforce the terms of this
Agreement.
9.3 Appaloosa shall promptly deliver to the Debtors, the USW and the UAW
written notice upon the termination of the Investment Agreement. The Debtors
shall promptly deliver to Appaloosa, the USW and the UAW written notice upon the
termination of the Investment Agreement.
9.4 The USW and/or the UAW shall deliver to the Debtors, the USW or the
UAW (as applicable) and Appaloosa written notice upon the termination of any one
of the Union Settlement Agreements as and when provided therein.
9.5 Each Party hereby acknowledges that this Agreement is not, and shall
not be deemed to be, a solicitation to accept or reject a plan or the Plan in
contravention of section 1125(b) of the Bankruptcy Code. Each Party further
acknowledges that no securities of any Debtor are being offered or sold hereby
and that this Agreement does not constitute an offer to sell or a solicitation
of an offer to buy any securities of any Debtor.
9.6 Each Party, severally and not jointly, represents, covenants, warrants
and agrees to each other Party, only as to itself and not as to each of the
others, that the following statements, as applicable, are true, correct and
complete as of the date hereof:
a. It has all requisite power and authority to enter into this
Agreement and to perform its obligations hereunder;
b. It is duly organized, validly existing, and in good standing
under the laws of its state of organization and it has the requisite power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder;
c. The execution and delivery of this Agreement and the performance
of its obligations hereunder have been duly authorized by all necessary action
on its part; provided, however, that the Debtors' authority to enter into this
Agreement is subject to Bankruptcy Court approval;
d. This Agreement has been duly executed and delivered by it and
constitutes its legal, valid, and binding obligation, enforceable in accordance
with the terms hereof, subject to entry of the order approving the Motion;
e. The execution, delivery, and performance by it (when such
performance is due) of this Agreement do not and shall not (i) violate any
provision of law, rule, or regulation applicable to it or any of its affiliates
or its certificate of incorporation or bylaws or other organizational documents
or those of any of its affiliates or (ii) conflict with, result in a breach of,
or constitute (with due notice or lapse of time or both) a default under any
material contractual obligation to which it or any of its affiliates is a party;
and
f. There are no undisclosed agreements or commitments between or
among the Parties or, to the knowledge of the Parties, any other parties
regarding matters subject to the terms of this Agreement.
9.7 Except as otherwise specifically provided herein, this Agreement may
not be modified, waived, amended or supplemented unless such modification,
waiver, amendment or supplement is in writing and has been signed by each Party.
No waiver of any of the provisions of this Agreement shall be deemed or
constitute a waiver of any other provision of this Agreement, whether or not
similar, nor shall any waiver be deemed a continuing waiver.
9.8 This Agreement is intended to bind and inure to the benefit of the
Parties and their respective successors, assigns, heirs, executors,
administrators, and representatives; provided, however, that nothing contained
in this subsection shall be deemed to permit sales, assignments, delegations or
transfers of this Agreement or any Party's rights or obligations hereunder.
9.9 Nothing contained in this Agreement is intended to confer any rights
or remedies under or by reason of this Agreement on any person or entity other
than the Parties hereto, nor is anything in this Agreement intended to relieve
or discharge the obligation or liability of any third party to any Party to this
Agreement, nor shall any provision give any third party any right of subrogation
or action over or against any Party to this Agreement.
9.10 All notices and other communications in connection with this Agreement
shall be in writing and shall be deemed given (and shall be deemed to have been
duly given upon receipt) if delivered personally, sent via electronic facsimile
(with confirmation), mailed by registered or certified mail (return receipt
requested) or delivered by an express courier (with confirmation) to the Parties
at the following addresses:
a. If to the Debtors, to:
Dana Corporation
4500 Dorr Street
Toledo, OH 43615
Facsimile: (419) 535-4790
Attention: Marc S. Levin, Esq.
with a copy to:
Jones Day
222 East 41st Street
New York, NY 10017
Facsimile: (212) 755-7306
Attention: Corinne Ball, Esq.
Marilyn W. Sonnie, Esq.
b. If to the USW, to:
United Steelworkers
Five Gateway Center
Pittsburgh, PA 15222
Facsimile: (412) 562-2429
Attention: David R. Jury, Esq.
c. If to the UAW, to:
International Union, UAW
Solidarity House
8000 East Jefferson Avenue
Detroit, MI 48214
Facsimile: (313) 926-5240
Attention: Niraj R. Ganatra, Esq.
d. If to Appaloosa, to:
Appaloosa Management L.P.
26 Main Street
Chatham, NJ 07928
Facsimile: (973) 701-7055
Attention: James Bolin
with a copy to:
White & Case LLP
1155 Avenue of the Americas
New York, NY 10036
Facsimile: (212) 354-8113
Attention: Gerard Uzzi, Esq.
Steven Teichman, Esq.
9.11 This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which shall constitute one and the
same Agreement. Delivery of an executed signature page of this Agreement by
facsimile or electronic transmission shall be effective as delivery of a
manually executed signature page of this Agreement.
9.12 This Agreement constitutes the entire agreement among the Parties with
respect to the subject matter hereof and supersedes all prior agreements,
whether oral or written, with respect to such subject matter. This Agreement is
the product of negotiations among the Parties and represents the Parties'
intentions. In any action to enforce or interpret this Agreement, this Agreement
shall be construed in a neutral manner, and no term or provision of this
Agreement, or this Agreement as a whole, shall be construed more or less
favorably to any Party.
9.13 The agreements, representations and obligations of the Parties under
this Agreement are, in all respects, several and not joint. Any breach of this
Agreement by any Party shall not result in liability for any other non-breaching
Party.
[Remainder of page intentionally blank; remaining pages are signature pages.]
IN WITNESS WHEREOF, the undersigned have each caused this Agreement to be
duly executed and delivered by their respective, duly authorized representatives
as of the date first above written.
DANA CORPORATION
By:
---------------------
Name:
Title:
UNITED STEELWORKERS
By:
---------------------
Name:
Title:
INTERNATIONAL UNION, UAW
By:
---------------------
Name:
Title:
APPALOOSA MANAGEMENT L.P.
By:
---------------------
Name:
Title:
EXHIBIT A
[Form of Plan]
EXHIBIT B
[Investment Agreement with Exhibits]
[White & Case Draft of 9/21/07]
INVESTMENT AGREEMENT
INVESTMENT AGREEMENT (this "Agreement"), dated as of September [o], 2007,
between Appaloosa Management L.P., a Delaware limited partnership ("Appaloosa"),
________, a newly formed _______ (the "Purchaser"), and Dana Corporation, a
Virginia corporation (the "Company") and debtor-in-possession under chapter 11
of title 11 of the United States Code (the "Bankruptcy Code") in case No.
06-10354 (BRL) (the "Chapter 11 Case"), pending in the Bankruptcy Court.
WHEREAS, the Company, together with its debtor Subsidiaries that commenced
jointly administered cases under chapter 11 of the Bankruptcy Code (such
Subsidiaries and Affiliates and the Company collectively, the "Debtor"), intends
to file with the Bankruptcy Court a chapter 11 plan of reorganization in
substantially the form attached to the Support Agreement (the "Form of Plan"),
the effectiveness of which will be conditioned on the Closing having occurred
(the "Chapter 11 Plan"); and
WHEREAS, the Company, the Unions and Appaloosa have entered into a Plan
Support Agreement (the "Support Agreement"), pursuant to which the parties to
the Support Agreement have agreed to various transactions in furtherance of the
Chapter 11 Plan; and
WHEREAS, the Chapter 11 Plan contemplates (i) a new investment (the "Series
A Investment") in the corporation that will be the successor to the Company
under the Chapter 11 Plan for purposes of Section 1145 of the Bankruptcy Code
("New Dana") by Purchaser, a newly formed investment company that is a
Subsidiary of Appaloosa, in 4.0% Series A Convertible Preferred Stock, par value
$0.01 per share, of New Dana (the "Series A Preferred") having the terms set
forth in the Certificate of Designation attached hereto as Exhibit A and
(ii) new investments (such investments, together with the Series A Investment,
the "Investments") by Purchaser and certain institutional investors in 4.0%
Series B Convertible Preferred Stock, par value $0.01 per share, of New Dana
(the "Series B Preferred") and, pursuant to the Rights Offering (as defined
below) by certain investors in the Series B Preferred, in each case having the
terms set forth in the Certificate of Designation attached hereto as Exhibit A
and to be made in connection with the transactions contemplated by the Chapter
11 Plan, including without limitation, the transactions contemplated by the
Support Agreement; and
WHEREAS, subject to the entry of a Confirmation Order on the effective date
of the Chapter 11 Plan (the "Effective Date"), New Dana will be authorized to
issue (i) new shares of Series A Preferred to Purchaser and (ii) Series B
Preferred to Purchaser, each Standby Purchaser (as defined below) and each
Eligible Holder (as defined below) that elects to purchase Series B Preferred in
connection with the Rights Offering (the Persons described in this clause (ii),
collectively, the "Series B Investors").
ACCORDINGLY, the parties agree as follows:
I. SHARE PURCHASE; RIGHTS OFFERING
1.1 Series A Preferred Share Purchase. On the terms and subject to
the conditions herein, at the Closing, New Dana will issue and sell to
Purchaser, and Purchaser will purchase from New Dana, for an aggregate price of
$250,000,000 in cash (the "Series A Purchase Price"), 2,500,000 newly issued
shares of Series A Preferred representing 100% of the Series A Preferred issued
and outstanding as of immediately after the Effective Date.
1.2 Rights Offering.
(a) The Company proposes to offer and sell newly issued shares of
Series B Preferred pursuant to a rights offering (the "Rights Offering") whereby
New Dana will distribute at no charge to each holder of an approved Unsecured
Claim (each, an "Eligible Holder"), including, to the extent applicable, the
Standby Purchasers, that number of rights (each, a "Right") in respect of Claims
outstanding and held of record as of the close of business on a record date to
be determined by the Board of New Dana (the "Record Date") that will enable each
Eligible Holder to purchase up to its pro rata portion of (i) 3,000,000 shares
in the aggregate of Series B Preferred at a purchase price of $100.00 per share
(the "Series B Per Share Price") or $300,000,000 in the aggregate (the "Series B
Purchase Price"). "Standby Purchaser" means the Purchaser and one or more
Persons designated by Appaloosa from time to time and set forth on Schedule 1.2
hereto, as such schedule may be modified from time to time.
(b) The Rights Offering will be conducted as follows:
(i) On the terms and subject to the conditions of this Agreement and
subject to applicable law, the Company shall offer shares of
Series B Preferred for subscription by holders of Rights as set
forth in this Agreement.
(ii) As soon as practicable following the entry of an order by the
Bankruptcy Court approving the Disclosure Statement, the Company
shall issue to each Eligible Holder, Rights to purchase up to its
pro rata portion of up to 3,000,000 shares of Series B Preferred
in the aggregate and distribute simultaneously the ballot form(s)
in connection with the solicitation of acceptances of the Chapter
11 Plan (the date of such distribution, the "Rights Distribution
Date"). The Company will be responsible for effecting the
distribution of certificates representing the Rights and any
related materials to each Eligible Holder.
(iii) The Rights may be exercised during a period (the "Rights
Exercise Period") commencing on the Rights Distribution Date and
ending at the Expiration Time. The Rights shall not be
transferable. "Expiration Time" means the date and time by which
holders of claims or interests are entitled to vote on the
Chapter 11 Plan (or if
2
such day is not a Business Day, the next Business Day), or such
later date and time as the Company, subject to the prior written
approval of Appaloosa, may specify in a notice provided to the
Eligible Holders before 9:00 a.m., New York City time, on the
Business Day before the then-effective Expiration Time. The
Company shall use its reasonable best efforts to cause the
effective date of the Chapter 11 Plan (the "Effective Date") to
occur as promptly as reasonably practicable after the Expiration
Time and the Confirmation Hearing. For the purpose of this
Agreement, "Business Day" means each Monday, Tuesday, Wednesday,
Thursday and Friday that is not a day on which banking
institutions in New York City are generally authorized or
obligated by law or executive order to close. Each Eligible
Holder who wishes to exercise all or a portion of its Rights
shall (i) during the Rights Exercise Period return a duly
executed document to a subscription agent reasonably acceptable
to the Company and Appaloosa (the "Subscription Agent") electing
to exercise all or a portion of the Rights held by such Eligible
Holder and (ii) pay an amount equal to the Series B Per Share
Price multiplied by the number of Series B Shares that the
Eligible Holder elects to purchase by wire transfer of
immediately available funds by a specified date reasonably in
advance of the date on which the hearing to confirm the Plan is
scheduled to commence (the "Confirmation Hearing") to an escrow
account established for the Rights Offering.
(iv) Unless otherwise required by Appaloosa, there will be no
over-subscription rights provided in connection with the Rights
Offering.
(v) As soon as reasonably practicable following the Effective Date,
the Company will issue to each Eligible Holder who validly
exercised its Rights the number of shares of Series B Preferred
to which such Eligible Holder is entitled based on such exercise.
(vi) The Company hereby agrees and undertakes to give each Standby
Purchaser by electronic facsimile transmission the certification
by an executive officer of the Company of either (i) the number
of shares of Series B Preferred elected to be purchased by
Eligible Holders pursuant to validly exercised Rights, the
aggregate purchase price therefor, the number of Unsubscribed
Shares and the aggregate Purchase Price therefor (a "Purchase
Notice") or (ii) in the absence of any Unsubscribed Shares, the
fact that there are no Unsubscribed Shares and that the
commitment set forth in Section 1.3(a)(ii) is terminated (a
"Satisfaction Notice") as soon as practicable after the
Expiration Time and, in any event, reasonably in advance of the
Closing Date (the date of transmission of confirmation of a
Purchase Notice or a Satisfaction Notice, the "Determination
Date").
3
(vii)The Rights Offering will provide each Eligible Holder who
validly exercised its Rights with the right to withdraw a
previous exercise of Rights after the withdrawal deadline if
there are changes to the Chapter 11 Plan after the withdrawal
deadline that the Bankruptcy Court determines are materially
adverse to the holders of the Rights and the Bankruptcy Court
requires resolicitation of votes under Section 1126 of the
Bankruptcy Court or an opportunity to change previously cast
acceptances or rejections of the Plan.
1.3 Commitment of Standby Purchasers.
(a) On the terms and subject to the conditions set forth in this
Agreement:
(i) Purchaser agrees and, if any Standby Purchasers have been
designated by Purchaser prior to the Closing Date, each Standby Purchaser
agrees, severally and not jointly, to subscribe for and purchase, and the
Company agrees to sell and issue, on the Closing Date for the Series B Per
Share Price, for an aggregate purchase price of $200,000,000 (the "Direct
Shares Purchase Price") each Standby Purchaser's proportionate share of
2,000,000 shares of Series B Preferred, in each case as is set forth
opposite such Standby Purchaser's name on Schedule 1.3 hereto (the "Direct
Subscription Shares");
(ii) each Standby Purchaser agrees, severally and not jointly, to
purchase, on the Closing Date, and the Company agrees to sell for the
Series B Per Share Price that number of shares of Series B Preferred
issuable pursuant to the aggregate number of Rights that were not properly
exercised by the Eligible Holders thereof during the Rights Exercise
Period, in proportion to the Standby Purchaser's share of the Direct
Subscription Shares (such Shares in the aggregate, the "Unsubscribed
Shares"), rounded among the Standby Purchasers as they may determine, in
their sole discretion, to avoid fractional shares.
(iii) As soon as practicable after the Expiration Time, and in any
event reasonably in advance of the Closing Date, the Company will provide a
Purchase Notice or a Satisfaction Notice to each Standby Purchaser as
provided above, setting forth a true and accurate determination of the
aggregate number of Unsubscribed Shares, if any; provided, that on the
Closing Date, on the terms and subject to the conditions in this Agreement,
the Standby Purchasers will purchase, and the Company will sell, only such
number of Unsubscribed Shares as are listed in the Purchase Notice, without
prejudice to the rights of the Standby Purchasers to seek later an upward
or downward adjustment if the number of Unsubscribed Shares in such
Purchase Notice is inaccurate.
1.4 Purchase Price. The Series A Purchase Price, the Series B
Purchase Price and the Direct Shares Purchase Price will be payable on the
Closing Date in cash by bank wire transfer of immediately available funds to an
account of New
4
Dana designated by the Company by written notice to Appaloosa delivered at least
two business days prior to the Closing Date.
1.5 Closing Timing. The closing of the purchase and sale of the
Series A Preferred and the Series B Preferred (the "Closing") will take place at
the offices of Jones Day, 222 E. 41(st) Street, New York, New York at 10:00 a.m.
local time on the date on which all of the conditions (other than the conditions
to be satisfied concurrently with the Closing) set forth in Article V have been
satisfied or waived (or such other date, time and place to which the parties may
agree in writing). The date on which the Closing occurs is the "Closing Date."
1.6 Closing Deliveries. (a) At or prior to the Closing, Appaloosa,
Purchaser and/or the Standby Purchasers, as applicable, will deliver to New
Dana:
(i) the Series A Purchase Price, the Series B Purchase Price or the Direct
Shares Purchase Price, as applicable, payable in accordance with Section 1.4;
(ii) a counterpart to the Shareholders Agreement in the form attached
hereto as Exhibit B (the "Shareholders Agreement"), duly executed by Appaloosa
and Purchaser;(1)
(iii) a counterpart to the Registration Rights Agreement in the form
attached hereto as Exhibit C (the "Series A Registration Rights Agreement"),
duly executed by Purchaser;(2) and
(iv) a counterpart to the Registration Rights Agreement in the form
attached hereto as Exhibit D (the "Series B Registration Rights Agreement" and,
together with the Series A Registration Rights Agreement, the "Registration
Rights Agreements").
(b) At or prior to the Closing, New Dana will deliver to Purchaser
and each Standby Purchaser, as applicable:
(i) Subject to clause (c) below, validly issued stock certificates
evidencing the shares of Series A Preferred and/or Series B Preferred, as
applicable; all such shares will be delivered with any and all issue,
stamp, transfer, sales and use, or similar Taxes or duties payable in
connection with such delivery duly paid by the Company;
(ii) a counterpart to the Shareholders Agreement duly executed by New
Dana;
- ----------
(1) Note: Document to be modified appropriately if additional purchasers are
added.
(2) Note: Document to be modified appropriately if additional purchasers are
added.
5
(iii) a counterpart to the Registration Rights Agreements duly
executed by New Dana; and
(iv) a copy of the New Dana charter containing the Certificate of
Designations, certified by the Secretary of State of the state in which it
is incorporated.
(c) Certificates for shares of Series B Preferred purchased by
Eligible Holders will be delivered as promptly as practicable after the Closing.
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser and each Standby
Purchaser, except as disclosed (i) in, and reasonably apparent from, any report,
schedule, form or other document filed with, or furnished to, the U.S.
Securities and Exchange Commission (the "SEC") by the Company and publicly
available prior to the date of this Agreement and only as and to the extent
disclosed therein (other than any forward-looking disclosures set forth in any
risk factor section, any disclosures in any section relating to forward-looking
statements and any other similar disclosures included therein to the extent they
are primarily cautionary in nature), or (ii) in the letter, dated the date
hereof, from the Company to Purchaser specifically referencing this Agreement
and delivered prior to the execution of this Agreement and initialed by the
parties hereto (the "Company Disclosure Letter"), as follows:
2.1 Existence; Authorization, Validity and Effect of Agreement. Each
of the Company and its Significant Subsidiaries (i) is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization (to the extent the legal concept of good standing exists in such
jurisdiction), (ii) has all requisite corporate or equivalent power and
authority to own, operate or lease the properties that it purports to own,
operate or lease and to conduct its business as currently conducted and (iii) is
duly qualified or licensed as a foreign entity to do business, and is in good
standing (to the extent the legal concept of good standing exists in such
jurisdiction), in each jurisdiction where the character of its properties owned,
operated or leased or the nature of its activities makes such qualification or
licensing necessary, except in the case of clauses (i) through (iii) to the
extent that the failure to be so qualified or in good standing or to possess
requisite power and authority would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. As of the
Effective Date, New Dana will be a corporation duly incorporated, validly
existing and in good standing under the laws of the state in which it is
incorporated. Subject to the entry of the Approval Order, Confirmation Order and
the occurrence of the Effective Date, (a) the Company has and New Dana will have
the requisite corporate power and authority to execute and deliver this
Agreement and all agreements and documents contemplated hereby to be executed
and delivered by it, and, subject to entry of the Confirmation Order and the
expiration, or waiver by the Bankruptcy Court, of the 10-day period set forth in
Rules 6004(h) and 3020(e) of the
6
Federal Rules of Bankruptcy Procedure, respectively, to perform its obligations
hereunder and thereunder, including the issuance of the Rights and Series B
Preferred, (b) this Agreement and the consummation by the Company and New Dana
of the transactions contemplated hereby have been (or, in the case of New Dana,
will be on or prior to the Effective Date) duly authorized by all requisite
corporate action and, (c) this Agreement has been duly and validly executed and
delivered by the Company and constitutes, and the Shareholders Agreement and the
Registration Rights Agreements (together with this Agreement, referred to
collectively as the "Transaction Documents") contemplated hereby to be executed
and delivered by New Dana (when executed and delivered pursuant hereto) will
constitute, the valid and binding obligations of the Company or New Dana, as
applicable, enforceable against the Company or New Dana, as applicable, in
accordance with their respective terms.
2.2 Capitalization. Immediately following the Effective Date and upon
issuance of the Shares, the Series A Preferred, Series B Preferred and New
Common Stock will be the only issued and outstanding equity securities of New
Dana, including management incentive equity issued in accordance with the
Chapter 11 Plan. Except as provided in the Registration Rights Agreements, the
Company is not, and New Dana will not be, under any third party contractual
obligation to register any of its equity securities under the Securities Act of
1933, as amended (the "Securities Act").
2.3 Validity of Shares, Etc. Each of the Shares when issued to
Purchaser in accordance with the Chapter 11 Plan and this Agreement will be duly
authorized, validly issued, fully paid, non-assessable and free of preemptive
rights of third parties, except for the preemptive rights included in Exhibit A.
At the Closing, Purchaser will acquire good and valid title to the Shares, free
and clear of any and all liens, Claims, security interests, encumbrances,
restrictions on voting or alienation or otherwise, or adverse interests, except
as may be created by Purchaser, the Transaction Documents, Exhibit A or by
applicable Securities Laws. All issued and outstanding shares of capital stock,
if any, of each Significant Subsidiary of the Company have been duly authorized
and validly issued, and are fully paid, non-assessable and free of preemptive
rights of third parties.
2.4 No Conflict; Required Filings and Consents. (a) The execution,
delivery and performance of this Agreement and the other Transaction Documents
by the Company or New Dana, as applicable, do not, and the consummation by the
Company and New Dana of the transactions contemplated hereby and thereby,
including the distribution of the Rights, the sale, issuance and delivery of the
Series B Preferred upon exercise of the Rights, and the consummation of the
Rights Offering by the Company will not, (i) conflict with or violate the
articles of incorporation or bylaws or equivalent organizational documents of
the Company or any of its Subsidiaries or New Dana, as applicable (as they may
be amended or adopted pursuant to the Chapter 11 Plan, as applicable), (ii)
subject to the entry of the Confirmation Order and the occurrence of the
Effective Date, conflict with or violate any domestic or foreign statute, rule,
regulation or other legal requirement ("Law") or order, judgment, injunction or
decree ("Order") applicable to the Company or any of its Subsidiaries or New
Dana or by which any property or asset of the Company or any of its Subsidiaries
is (or New
7
Dana will be) bound or affected or (iii) subject to the entry of the
Confirmation Order and the occurrence of the Effective Date and the
implementation of the transactions contemplated by the Chapter 11 Plan and the
application of bankruptcy Law, conflict with or violate or result in a breach or
default under any contract, agreement or instrument binding upon the Company or
any of its Subsidiaries or New Dana, or result, except to the extent specified
in the Chapter 11 Plan, in the acceleration of, or the creation of any lien
under, any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its Subsidiaries is (or New Dana
will be) a party or by which the Company or any of its Subsidiaries is (or New
Dana will be) bound or to which any of the property or assets of the Company or
any of its Subsidiaries is (or New Dana will be) subject, except, in the case of
clauses (i) (as to Subsidiaries only), (ii) and (iii), for any such conflicts,
violations, breaches or defaults that, individually or in the aggregate, would
not have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement and the other
Transaction Documents by the Company or New Dana, as applicable, does not, and
the performance of this Agreement and the other Transaction Documents and the
consummation by the Company and New Dana of the transactions contemplated hereby
and thereby, including the distribution of the Rights, the sale, issuance and
delivery of Series B Preferred upon exercise of the Rights, the consummation of
the Rights Offering by the Company will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign, including without limitation any
quasi-governmental, supranational, statutory, environmental entity and any stock
exchange, court or arbitral body (each a "Governmental Entity"), except (i) for
(A) the applicable notification requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, if any, and the rules and regulations
thereunder (the "HSR Act"), and any other comparable laws or regulations in any
foreign jurisdiction relating to the sale or issuance of the Shares, (B) filings
contemplated by the Registration Rights Agreements, (C) the entry of the
Approval Order and the Confirmation Order and any other Bankruptcy Court Orders
that may be required in connection with the Chapter 11 Plan and (ii) where the
failure to obtain any such consent, approval, authorization or permit, or to
make any such filing or notification, would not, individually or in the
aggregate, have a Company Material Adverse Effect.
2.5 No Undisclosed Liabilities. As of the date hereof, neither the
Company nor any of its Subsidiaries has any liabilities or obligations (absolute
or accrued, contingent or otherwise, and whether due or to become due and
whether the amount thereof is readily ascertainable or not) that are material to
the business or operations of the Company and its Subsidiaries, taken as a
whole, other than: (a) liabilities or obligations disclosed in the financial
statements of the Company included in the Company Reports filed with the SEC
prior to the date hereof; (b) liabilities or obligations under contracts to
which the Company or any of its Subsidiaries is a party; (c) liabilities of a
nature not required by GAAP to be set forth on a consolidated balance sheet of
the Company and its Subsidiaries or in the notes thereto; (d) liabilities or
obligations incurred in the ordinary course of business consistent with past
practices
8
since December 31, 2006, or (e) liabilities or obligations expressly included
within the scope of another representation or warranty in this Article II or as
expressly excluded from any representation or warranty in this Article II as a
result of the scope of any materiality or similar qualification applicable to
such representation or warranty.
2.6 No Violation or Default; Compliance with Laws. Neither the
Company nor any of its Significant Subsidiaries is in violation of its charter
or by-laws or similar organizational documents. Neither the Company nor any of
its Subsidiaries is, except as a result of the Chapter 11 Case, in default, and
no event has occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound or to which any of the property or assets of the Company or any of its
Subsidiaries is subject, except for any such default that has not had and would
not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. Neither the Company nor any of its Subsidiaries is, or
has been, in violation of any Law, except for any such violation that has not
had and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
2.7 Litigation. There are no legal, governmental or regulatory
actions, suits, proceedings or, to the Knowledge of the Company, investigations
pending to which the Company or any of its Subsidiaries is or may be a party or
to which any property of the Company or any of its Subsidiaries is or may be the
subject that, individually or in the aggregate, if determined adversely to the
Company or any of its Subsidiaries, would reasonably be expected to have a
Company Material Adverse Effect, and no such actions, suits or proceedings or
investigations are pending or, to the Knowledge of the Company, threatened or
contemplated, by any governmental or regulatory authority or by others.
2.8 Labor Relations. (a) The Company is not a party to, and has no
obligations under, any collective bargaining agreement or other agreement,
unexpired, or expired in circumstances where the Company has a continuing
statutory obligation to maintain the existing terms and conditions of employment
as specified in the expired contract, with any labor organization governing
wages, hours or other terms and conditions of employment of any current
employees of the Company at any facility currently operated by the Company in
the United States and Canada, that is, individually or in the aggregate,
material to the Company and its Subsidiaries, taken as a whole; (b) there are no
current organizational activities, demands for recognition or petitions for
representation by a labor organization seeking to represent employees of the
Company or any Subsidiary that would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect; (c) no
grievance, arbitration, litigation, complaint or charge, or, to the Knowledge of
the Company, investigations relating to labor or employment matters is pending
or, to the Knowledge of the Company, threatened against the Company or any of
its Subsidiaries which, except as would not reasonably be
9
expected to have, individually or in the aggregate, a Company Material Adverse
Effect; (d) the Company and each of its Subsidiaries has complied and is in
compliance in all respects with all applicable laws (domestic and foreign),
agreements, contracts, and policies relating to employment, employment
practices, wages, hours, and terms and conditions of employment and is not
engaged in any unfair labor practice as defined by the National Labor Relations
Board (or any foreign equivalent), in each case except where the failure to
comply would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect; and (e) the Company has complied
and is in compliance in all material respects with its obligations pursuant to
the Worker Adjustment and Retraining Notification Act of 1988 ("WARN Act") (and
any similar state or local law) to the extent applicable, and all material other
employee notification and bargaining obligations arising under any collective
bargaining agreement or statute, in each case except to the extent the failure
to comply would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
2.9 Title to Intellectual Property. The Company and its Subsidiaries
own all right, title and interest in and to, or possess valid and enforceable
rights to use, all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark registrations,
copyrights, licenses, software and know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures) and other intellectual property rights (collectively,
"Intellectual Property") used in the conduct of their respective businesses, the
failure to own or possess which would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. All
registrations with and applications to governmental or regulatory authorities in
respect of such Intellectual Property are (i) to the Knowledge of the Company,
valid and (ii) in full force and effect, (iii) have not lapsed, expired or been
abandoned, and (iv) are not the subject of any opposition filed with the United
States Patent and Trademark Office or any other applicable Intellectual Property
registry other than in the ordinary course of business and, in each case in
clauses (i) through (iv), except as would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. The
consummation of the transaction contemplated hereby and by the Chapter 11 Plan
will not result in the loss or impairment of any rights to use such Intellectual
Property or obligate Purchaser to pay any royalties or other amounts to any
third party in excess of the amounts that would have been payable by the Company
and its Subsidiaries absent the consummation of the Investments, except as would
not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. The Company and its Subsidiaries have taken reasonable
security measures to protect the confidentiality and value of its and their
material trade secrets (or other Intellectual Property for which the value is
dependent upon its confidentiality), and no such material trade secrets have
been misappropriated, except to the extent that such misappropriation would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. The Company and its Subsidiaries are not in default
(and no event has occurred so that, with the giving of notice or lapse of time
or both, they will be in default) under any contract relating to such
Intellectual Property except as would not reasonably be expected to have,
individually or in the
10
aggregate, a Company Material Adverse Effect. To the Knowledge of the Company,
no Intellectual Property rights of the Company or its Subsidiaries are being
infringed by any other Person, except as would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect. To
the Knowledge of the Company, the conduct of the businesses of the Company and
its Subsidiaries does not and will not conflict in any respect with any
intellectual property rights of others, and the Company and its Subsidiaries
have not received any notice of any claim of infringement or conflict with any
such rights of others, in each case, which would be reasonably expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
2.10 Title to Real and Personal Property. The Company and its
Subsidiaries have good and marketable fee simple, leasehold or subleasehold
title to all real property owned, leased or subleased by the Company and its
Subsidiaries, and for all real property currently used, and good title to all
other tangible and intangible properties (other than Intellectual Property
covered by Section 2.9) owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind ("Liens"), except for such Liens or failure to have
title as, individually and in the aggregate, would not reasonably be expected to
have a Company Material Adverse Effect. All of the leases and subleases for real
property to which the Company or its Subsidiaries are a party are in full force
and effect and enforceable by the Company or such Subsidiary in accordance with
their terms, and, to the Knowledge of the Company, neither the Company nor any
Subsidiary has received any notice of any claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any Subsidiary under
any of the leases or subleases mentioned above or under any documents affecting
any fee owned property, or affecting or questioning the rights of the Company or
such Subsidiary to the continued possession of any owned, leased or subleased
property by under any such lease or sublease or under any documents affecting
any fee owned property, or for the continued operations of the Company's
business as currently operated in any material respect on any owned, leased or
subleased property, except for any such matter as would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
2.11 No Undisclosed Relationships. As of the date hereof, no
relationship, direct or indirect, exists between or among the Company or any of
its Subsidiaries, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or any of its Subsidiaries, on the other,
that is required by the Exchange Act to be described in the Company Reports and
that are not so described, except for the transactions pursuant to this
Agreement and pursuant to Company Plans.
2.12 Licenses and Permits. The Company and its Subsidiaries have and
are in compliance with all licenses, certificates, permits, approvals,
franchises or other authorizations required to be obtained from a Governmental
Authority necessary for the ownership or lease of their respective properties or
for the conduct of their respective businesses as now conducted, which if
violated or not obtained would reasonably be expected to have, individually or
in the aggregate, a Company Material
11
Adverse Effect. Neither the Company nor any Subsidiary has finally been denied
any application for any such license, permit, franchise or other governmental
authorization.
2.13 Compliance with Environmental Laws. (a) Except as would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, the Company and its Subsidiaries have complied and are
in compliance with any and all applicable federal, state, local and foreign
laws, rules, regulations, decisions and orders, including all civil and common
law, relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, "Environmental Laws"); (b) during the three years prior to the
date of this Agreement, to the Knowledge of the Company, the Company and its
Subsidiaries have not received notice from any governmental authority or other
Person of any actual or potential liability for the investigation or remediation
of any disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, or for any violation of Environmental Laws that
would in any such case reasonably be expected to result in, individually or in
the aggregate, a material liability of the Company and its Subsidiaries, taken
as a whole; (c) except as would not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect, to the Knowledge of the
Company, there are no facts, circumstances or conditions relating to the past or
present business or operations of the Company, its Subsidiaries or any of their
predecessors (including the disposal of any hazardous or toxic substances or
wastes, pollutants or contaminants), or to any real property currently or
formerly owned or operated by the Company, its Subsidiaries or any of their
predecessors, that would reasonably be expected to give rise to any claim,
proceeding or action, or to any liability, under any Environmental Law; (d) to
the Knowledge of the Company, neither the Company nor any of its Subsidiaries is
required or reasonably expected to incur material capital expenditures during
the current and the subsequent five fiscal years to reach or maintain compliance
with existing or reasonably anticipated Environmental Laws except as would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect; and (e) the disclosure in the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 2007, as reproduced in
Section 2.13 of the Company Disclosure Letter, was, to the Knowledge of the
Company, true and correct in all material respects based on the assumptions set
forth therein and as of May 10, 2007. To the Knowledge of the Company, no
changes in the facts underlying these asbestos-related disclosures (as opposed
to the assumptions made) have occurred since May 10, 2007, that would,
individually or in the aggregate, reasonably be expected to result in a
liability that is material to the Company and its Subsidiaries, taken as a
whole.
2.14 Tax Matters. Except as would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect: (a) the
Company has timely filed or caused to be timely filed (taking into account any
applicable extension of time within which to file) with the appropriate taxing
authorities all material tax returns, statements, forms and reports (including
elections, declarations, disclosures, schedules, estimates and information Tax
Returns) for Taxes ("Tax Returns") that are required to be filed by, or with
respect to, the Company and its Subsidiaries; (b) the Tax Returns
12
accurately reflect all liability for Taxes of the Company and its Subsidiaries
for the periods covered thereby; (c) all material Taxes and Tax liabilities due
by or with respect to the income, assets or operations of the Company and its
Subsidiaries have been timely paid in full or accrued and fully provided for in
accordance with GAAP on the financial statements of the Company included in the
Company Reports; (d) neither the Company nor any of its Subsidiaries has
received any written notices from any Taxing authority relating to any issue
that has not been adequately provided for in accordance with GAAP in the
financial statements of the Company included in the Company Reports; (e) all
material Taxes which the Company and each or any of its Subsidiaries is (or was)
required by law to withhold or collect in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder or other third
party have been duly withheld or collected, and have been timely paid to the
proper authorities to the extent due and payable; (f) neither the Company nor
any of its Subsidiaries has been included in any "consolidated," "unitary" or
"combined" Tax Return provided for under the law of the United States, any
foreign jurisdiction or any state or locality with respect to Taxes for any
taxable period for which the statute of limitations has not expired (other than
a group of which the Company and/or its Subsidiaries are the only members); and
(g) the Company is not a party to any agreement other than certain Change In
Control Agreements described in the Company Reports filed prior to the date
hereof that would require the Company or any affiliate thereof to make any
material payment that would constitute an "excess parachute payment" for
purposes of Sections 280G and 4999 of the Code.
2.15 Compliance With ERISA.
(a) Correct and complete copies of the following documents, with
respect to all U.S. domestic benefit and compensation plans, programs,
contracts, commitments, practices, policies and arrangements, whether written or
oral, that are maintained or contributed to (or with respect to which an
obligation to contribute has been undertaken) or with respect to which any
potential liability is borne by the Company or any of its Subsidiaries,
including, but not limited to, "employee benefit plans" within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and deferred compensation, stock option, stock purchase, restricted
stock, stock appreciation rights, stock based, incentive and bonus plans, but
excluding any employee benefit plans within the meaning of Section 3(3) of ERISA
which Mahle GmbH or its subsidiaries or affiliates have agreed to assume (the
"Company Plans"), have been delivered or made available to Appaloosa and
Purchaser by the Company, to the extent applicable: (i) all material Company
Plan documents, together with all amendments and attachments thereto (including,
in the case of any Company Plan not set forth in writing, a written description
thereof); (ii) all material trust documents, declarations of trust and other
documents establishing other funding arrangements, and all amendments thereto
and the latest financial statements thereof; (iii) the most recent annual report
on Internal Revenue Service ("IRS") Form 5500 for the past year and all
schedules thereto; (iv) the most recent IRS determination letter; (v) summary
plan descriptions and summaries of material modifications; and (vi) the most
recently prepared actuarial valuation report.
13
(b) Except as has not had and would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect (i)
each Company Plan, other than any "multiemployer plans" within the meaning of
Section 3(37) of ERISA ("Multiemployer Plans"), is in compliance with ERISA, the
Internal Revenue Code of 1986, as amended (the "Code") and other applicable
laws; (ii) each Company Plan that is intended to be a qualified plan under
Section 401(a) of the Code is so qualified and has received a favorable
determination letter from the IRS covering all Tax law changes prior to the
Economic Growth and Tax Relief Reconciliation Act of 2001 or has applied to the
IRS for such favorable determination within the applicable remedial amendment
period under Section 401(b) of the Code, and the Company is not aware of any
circumstances likely to result in the loss of the qualification of such Company
Plan under Section 401(a) of the Code; (iii) no liability under Subtitle C or D
of Title IV of ERISA has been incurred during the previous three years by the
Company or any of its Subsidiaries with respect to any ongoing, frozen or
terminated "single-employer plan," within the meaning of Section 4001(a)(15) of
ERISA ("Single-Employer Plan") currently or previously maintained or contributed
to (or with respect to which an obligation to contribute has been undertaken) by
the Company or any of its Subsidiaries, or the Single-Employer Plan of any
entity which is considered one employer with the Company under Section 4001 of
ERISA or Section 414 of the Code (a "Company ERISA Affiliate"); (iv) the Company
and its Subsidiaries have not incurred any withdrawal liability (including any
contingent or secondary withdrawal liability) with respect to a Multiemployer
Plan under Subtitle E of Title IV of ERISA (regardless of whether based on
contributions of a Company ERISA Affiliate) that has not been satisfied in full
and no condition or circumstance has existed that presents a risk of the
occurrence of any withdrawal from or the partition, termination, reorganization
or insolvency of any such Multiemployer Plan; (v) no notice of a "reportable
event," within the meaning of Section 4043 of ERISA has occurred after January
1, 2005 for any Company Plan or by any Single Employer Plan of a Company ERISA
Affiliate; (vi) all contributions required to be made under the terms of any tax
qualified Company Plan have been timely made or have been reflected in the
financial statements of the Company included in the Company Reports filed prior
to the date hereof; and (vii) there has been no amendment to, announcement by
the Company or any of its Subsidiaries relating to, or change in employee
participation or coverage under, any Company Plan which would increase the
expense of maintaining such plan above the level of the expense incurred
therefor for the most recent fiscal year.
(c) (i) Neither any Company Plan nor any Single-Employer Plan of a
Company ERISA Affiliate has an "accumulated funding deficiency" (whether or not
waived) within the meaning of Section 412 of the Code or Section 302 of ERISA
and neither the Company nor any of its Subsidiaries nor any Company ERISA
Affiliate has applied for or obtained a funding waiver; and (ii) neither the
Company nor any of its Subsidiaries has provided, or is required to provide,
security to any Company Plan or to any Single-Employer Plan of a Company ERISA
Affiliate pursuant to Section 401(a)(29) of the Code.
(d) Except as has not and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, (i) no
claim,
14
lawsuit, arbitration or other action has been instituted against the Company
Plans (other than routine claims for benefits, and appeals of such claims), the
Company, any Subsidiary, any director, officer, or employee thereof, any of the
assets of any trust of the Company Plans, or, to the Company's knowledge, any
fiduciary of a Company Plan with respect to a Company Plan, and (ii) no
"prohibited transaction," within the meaning of Section 4975 of the Code or
Section 406 of ERISA, for which no exemption is available, has occurred with
respect to any Company Plan or its related trust.
(e) Except as would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, (i)(A) all material
company benefit plans maintained primarily for the benefit of employees
principally employed in jurisdictions listed in Schedule 2.15(e) (the "Non-U.S.
Benefit Plans") have been maintained in all material respects in accordance with
their terms and all applicable legal requirements, (B) if any Non-U.S. Benefit
Plan is intended to qualify for special tax treatment, such Non-U.S. Benefit
Plan meets all requirements to the extent necessary to obtain such treatment,
and (C) the fair market value of the assets of each Non-U.S. Benefit Plan
required to be funded, the liability of each insurer for any Non-U.S. Benefit
Plan required to be funded, and the book reserve established for any Non-U.S.
Benefit Plan, together with any accrued contributions, is sufficient to provide
for the accrued benefit obligations under each Non-U.S. Benefit Plan and
(ii) neither the Company nor any Company subsidiary is or has (x) a debt that is
or has become due under Section 75 of the Pensions Act 1995; (y) been a party to
an act or deliberate failure to act (or knowingly assisted) to prevent the
recovery of any amount of debt due under Section 75 of the Pensions Act of 1995;
or (z) is or has been an associate of or connected with (as set out in Sections
38 and 51 of the Pensions Act 2004) any person who is an employer in relation to
any occupational pension scheme other than the company's pension schemes
disclosed on Schedule 2.15(e).
2.16 SEC Filings; Financial Statements. The Company has timely filed,
all Company Reports required to be filed by it with the SEC since January 1,
2006. All Company Reports, as of their respective dates (a) complied in all
material respects with the applicable requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder and (b) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading. The representation in the preceding sentence does not
apply to (a) any statement or omission in (i) any Company Report filed prior to
the date of this Agreement that was superseded by a subsequent Company Report
filed prior to the date of this Agreement or (ii) any Company Report filed after
the date of this Agreement that is superseded by a subsequent Company Report
filed prior to the Closing Date or (b) any projections, forecasts, estimates and
forward-looking information included in the Company Reports. The consolidated
financial statements of the Company included in any Company Reports were
prepared in accordance with accounting principles generally accepted in the
United States ("GAAP") applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly presented the
consolidated financial position of the Company and its Subsidiaries, as of the
dates thereof (subject, in the case of any
15
unaudited statements, to the absence of footnotes and to normal year-end audit
adjustments). No Subsidiary of the Company is currently required to file any
periodic reports with the SEC under the Exchange Act.
Each Company Report containing financial statements that has been
filed with the SEC by the Company was accompanied by the certifications required
to be filed or furnished by the Company's principal executive officer and
principal financial officer pursuant to the Sarbanes-Oxley Act and, at the time
of filing or submission of each such certification, such certification was true
and accurate in all material respects.
2.17 Insurance. The Company and its Subsidiaries have insurance
covering their respective properties, operations, personnel and businesses,
including business interruption insurance, which insurance is in amounts and
insures against such losses and risks as are customary for companies whose
businesses are similar to the Company and its Subsidiaries, except where such
failure would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has received notice of any termination or threatened termination of
any of such policies and such policies are in full force and effect.
2.18 No Brokers. The Company has not entered into any contract,
arrangement or understanding with any Person or firm that may result in the
obligation of the Company or Purchaser to pay any investment banker's or
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement, the consummation of
the Investments, or otherwise in connection with the Rights Offering, except
that the Company has retained Miller, Buckfire & Co., LLC as its financial
advisor. The Company, New Dana or one of their Subsidiaries will pay all amounts
owed pursuant to the foregoing arrangements.
2.19 State Takeover Statutes. The Company Board has approved this
Agreement and the transactions described herein and such approval is sufficient
to render inapplicable to this Agreement and such transactions the restrictions
of Article 14 of the Virginia Stock Corporation Act (the "VSCL"), and,
accordingly such Article 14 does not apply to any such transactions. The Company
has opted out of Article 14.1 of the VSCL in Section 10.1 of its bylaws. There
is no other provision of the VSCL or the Company's bylaws or charter under which
special voting or waiting period requirements would become applicable to this
Agreement and the transactions described herein, or under which Appaloosa,
Purchaser or any Standby Purchaser or any Eligible Holder would not have rights
possessed by other stockholders of the Company.
2.20 Rights Plan Amendment. The Company has taken all action, if any,
necessary or appropriate so that the execution of this Agreement and the
consummation of the purchase of shares of Series A Preferred and Series B
Preferred pursuant to this Agreement, and the acquisition of New Common Stock
upon conversion of such shares, do not and will not result in the ability of any
Person to exercise any Rights (as defined in the Rights Agreement) under the
Rights Agreement
16
or enable or require any Rights to separate from the Shares to which they are
attached or to be triggered or to become exercisable.
2.21 No Additional Representations. Except as and to the extent
expressly set forth in this Agreement (together with the schedules hereto and
the agreements and certificates contemplated hereby), the Company makes no
representations or warranties whatsoever, and disclaims all liability and
responsibility for any representation, warranty, statement made or information
communicated (orally or in writing) to Appaloosa or Purchaser (including, but
not limited to, the information memorandum furnished to Appaloosa or Purchaser
in connection with their consideration of an investment in the Company and any
opinion, information or advice which may have been provided to Appaloosa or
Purchaser or any of their respective Affiliates, by any officer, stockholder,
director, employee, engineering or accounting firm, legal counsel or any other
agent, consultant or representative of such party, as applicable).
III. REPRESENTATIONS AND WARRANTIES OF APPALOOSA AND PURCHASER
Appaloosa and Purchaser represent and warrant to the Company, except as
disclosed in the letter dated the date hereof from Appaloosa to the Company
specifically referencing this Agreement and initialed by the parties hereto, as
follows:
3.1 Existence; Authorization, Validity and Effect of Agreement.
Appaloosa is a limited partnership and Purchaser is a ________ duly [formed],
validly existing and in good standing under the laws of the State of Delaware.
Purchaser is a Subsidiary of Appaloosa. Appaloosa and Purchaser have all
requisite power and authority to execute and deliver this Agreement and all
agreements and documents contemplated hereby and thereby to be executed by it.
This Agreement and the consummation by Appaloosa and Purchaser of the
transactions contemplated hereby have been duly and validly authorized by all
requisite action. This Agreement constitutes, and all Transaction Documents
contemplated hereby to be executed and delivered by Appaloosa or Purchaser (when
executed and delivered pursuant hereto) will constitute, the valid and binding
obligations of Appaloosa or Purchaser, as the case may be, enforceable against
each of them in accordance with their respective terms.
3.2 No Conflict; Required Filings and Consents. (a) The execution,
delivery and performance of this Agreement and the other Transaction Documents
by Appaloosa and Purchaser do not, and the consummation by Appaloosa and
Purchaser of the transactions contemplated hereby and thereby will not, (i)
conflict with or violate the organizational documents of Appaloosa or Purchaser,
(ii) conflict with or violate any Law or Order applicable to Appaloosa or
Purchaser or by which any property or asset of Appaloosa or Purchaser is bound
or affected or (iii) conflict with or violate or result in a breach or default
under any contract, agreement or instrument binding upon Appaloosa or Purchaser,
except, in the case of clauses (ii) and (iii), for any such conflicts,
violations, breaches or defaults that, individually or in the aggregate, would
not reasonably be expected to have a Purchaser Material Adverse Effect.
17
(b) The execution and delivery of this Agreement and the other
Transaction Documents by Appaloosa and Purchaser does not, and the performance
of this Agreement and the consummation of the transactions contemplated hereby
and thereby by them will not, require any consent, approval, authorization or
permit of, or filing with or notification to, any Governmental Entity, except
(i) for (A) applicable requirements, if any, of the Exchange Act, and (B) the
applicable notification requirements of the HSR Act, and (ii) where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not, individually or in the aggregate,
reasonably be expected to have a Purchaser Material Adverse Effect.
3.3 No Undisclosed Agreements. Appaloosa and Purchaser have disclosed
to the Company the terms of all agreements, arrangements and understandings,
whether oral or written, between Appaloosa and any of its Affiliates or their
respective officers, directors or employees, on the one hand, and any other
Person that involve or relate to the Company, any of its Subsidiaries, the
Unions, or the Company's creditors or their respective officers, directors,
employees or representatives, on the other hand. Appaloosa and Purchaser have
provided to the Company true and correct copies of all such agreements,
arrangements and understandings that are in written form.
3.4 No Brokers. Appaloosa and Purchaser have not entered into any
contract, arrangement or understanding with any Person or firm that may result
in the obligation of the Company, New Dana or any of their Subsidiaries to pay
any investment banker's or finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby, any such
amounts to be the sole liability of Appaloosa or Purchaser.
3.5 Sufficient Funds. Appaloosa and Purchaser will have sufficient
funds available to pay the Series A Purchase Price and the Series B Purchase
Price in cash at the Closing.
3.6 Investment Intent. Other than the Series B Preferred that will be
purchased by Standby Purchasers pursuant to Article I, Appaloosa and Purchaser
are purchasing the shares of Series A Preferred and Series B Preferred to be
purchased by them for their own account and for investment purposes, and neither
of them intends to redistribute the Shares (except in a transaction or
transactions exempt from registration under the federal and state securities
laws or pursuant to an effective registration statement under such laws).
Appaloosa and Purchaser acknowledge that the Shares have not been and will not,
when issued, be registered under the Securities Act, or any state blue sky or
Securities Laws and that the transfer of the Shares may be subject to compliance
with such Laws unless an exemption is available pursuant to section 1145 of the
Bankruptcy Code (in addition to the restrictions set forth in the Shareholders
Agreement).
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3.7 Investor Sophistication. Appaloosa and Purchaser are
sophisticated investors and each has such knowledge and experience in financial,
business and investment matters as to be capable of evaluating the merits and
risks of an investment in the Shares. Appaloosa was not organized for the
specific purpose of acquiring the Shares. Appaloosa and Purchaser are not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
3.8 Ownership of Company Securities/ Related Businesses. As of the
date of this Agreement, none of Appaloosa, Purchaser or any of their
Subsidiaries, Affiliates or affiliated funds (a) beneficially own any Claims,
indebtedness or equity securities of the Company or any direct or indirect
options, warrants or other rights to acquire, or any security convertible into
or exchangeable for, any indebtedness or equity securities of the Company, or
(b) have an equity interest greater than 10% in any Person that owns, Controls
or operates a business engaged in any of the following: (i) the supply of
components for automobiles or trucks, including but not limited to drivetrain
products (including front and rear axles, transfer cases and gearboxes,
differential and torque couplings, driveshafts, propshafts and drivetrain
systems), chassis products (including front and rear suspension systems and
modules, chassis systems, steering components and suspension components),
structural products (including cradles, frames, sub-frames and side-rails), or
engine components (including sealing systems and thermal management products);
(ii) the supply of components for off-highway vehicles (including
single-reduction drive and non-drive axles, steering and rigid planetary axles,
transaxles, driveshafts, transfer cases and gearboxes, powershaft transmissions,
torque converters, brakes, and electronic controls); or (iii) replacement
components for sale in the independent aftermarket or for original equipment
service (including replacement parts of any of the components listed above,
transmissions, universal joints, brakes and gaskets).
3.9 No Additional Representations. Appaloosa and Purchaser acknowledge
that they and their representatives have received or been afforded the
opportunity to review prior to the date hereof all written materials that the
Company was requested to deliver or make available, as the case may be, to
Appaloosa pursuant to this Agreement on or prior to the date hereof. Appaloosa
and Purchaser acknowledge that they and their representatives have been
permitted access to the books and records, Tax Returns, contracts, insurance
policies (or summaries thereof) and other properties and assets of the Company
and its Subsidiaries that they and their representatives have desired or
requested to see or review. Neither Appaloosa nor Purchaser has Knowledge of any
facts or circumstances that could reasonably be expected to constitute a breach
of the representations and warranties of the Company in Article II of this
Agreement.
IV. COVENANTS
4.1 Approval Motion; Approval Order. The Company shall use its
reasonable best efforts to cause the Bankruptcy Court to enter a final order of
the Bankruptcy Court (the "Approval Order") approving and authorizing the
Company to enter into this Agreement and authorizing the various fees contained
herein and
19
approving and authorizing the Support Agreement and that, subject to
Section 4.9, to issue such Approval Order and to cause such Approval Order to
contain a process specified therein that is reasonably acceptable to the
Creditors' Committee, the Company and Appaloosa, whereby Persons who have
submitted a bona fide proposal for an Alternative Investment, Alternative
Majority Investment, Alternative Transaction or Alternative Stand-Alone Plan
(each, an "Alternative Proposal") would be granted access to Company information
after signing a confidentiality agreement having terms no less favorable to the
Company or more favorable to the recipient thereunder than the respective terms
of the Confidentiality Agreement (an "Acceptable Confidentiality Agreement"),
would be required to submit a definitive Alternative Proposal to the Company on
or before the deadlines specified in the Approval Order. Nothing in this Section
4.1 or the Approval Order will be deemed to limit Section 4.10 or the Company's
right to terminate this Agreement pursuant to any of Sections 6.2(f), (g), (h)
or (i) or the exercise of its fiduciary duties with respect to the Plan Support
Agreement.
4.2 Plan and Disclosure Statement. Subject to Section 4.9, the Company
shall authorize, execute, file with the Bankruptcy Court and seek confirmation
of, a Chapter 11 Plan (and a related disclosure statement (the "Disclosure
Statement")) the terms of which are consistent with this Agreement, the Support
Agreement, the Form of Plan and with such other terms that, to the extent they
have a material impact on Purchaser's proposed investment in the Company, are
reasonably satisfactory to Appaloosa and Purchaser. The Company shall (a)
provide to Appaloosa and Purchaser and their counsel a copy of the Chapter 11
Plan and Disclosure Statement, and any amendments thereto, and a reasonable
opportunity to review and comment on such documents prior to such documents
being filed with the Bankruptcy Court, and (b) duly consider in good faith any
comments consistent with this Agreement, the Support Agreement and the Form of
Plan, and any other reasonable comments of Appaloosa and Purchaser and their
counsel. In addition, the Company shall (y) provide to Appaloosa and Purchaser
and their counsel a copy of the Confirmation Order and a reasonable opportunity
to review and comment on such order prior to such order being filed with the
Bankruptcy Court and (z) duly consider in good faith any comments consistent
with this Agreement, the Support Agreement and the Form of Plan, and any other
reasonable comments of Appaloosa and Purchaser and their counsel.
4.3 Rights Agreement. Subject to compliance by Purchaser and Appaloosa
with Section 2.1 and 2.2 of the Shareholders Agreement, the Company shall take
all action to ensure that the offering of Rights pursuant to the Rights
Offering, the purchase of shares of Series A Preferred and Series B Preferred
pursuant to this Agreement, and the acquisition of New Common Stock upon
conversion of such shares, will not result in the ability of any Person to
exercise any Rights (as defined in the Rights Agreement) under the Rights
Agreement or enable or require any Rights to separate from the Shares to which
they are attached or to be triggered or to become exercisable.
4.4 Employment Agreements. The Company and Appaloosa will use
reasonable best efforts to ensure that the individuals negotiating the
employment agreements for the persons listed on Schedule 4.4, as contemplated by
the Chapter 11 Plan, will consult with Appaloosa during that negotiation and
that such employment
20
agreements shall be in form and substance reasonably acceptable to Appaloosa,
all subject to approval by the Board of Directors of New Dana on the Effective
Date. Without limiting the foregoing, the employment agreements entered into by
the Company with the Executive Chairman, the Chief Executive Officer and the
Chief Financial Officer shall provide that (i) upon any termination of
employment, the Executive Chairman, the Chief Executive Officer and/or the Chief
Financial Officer shall resign as a director to the extent applicable (and such
employment agreements shall require delivery at the time such agreements are
entered into of an executed irrevocable resignation that becomes effective upon
such termination) and (ii) the right to receive any payments or other benefits
upon termination of employment shall be conditioned upon such resignation. Such
agreements shall further provide that if, for any reason, the Executive
Chairman, the Chief Executive Officer or the Chief Financial Officer does not
resign or the irrevocable resignation is determined to be ineffective, then the
holders of the Series A Preferred may remove the Executive Chairman, the Chief
Executive Officer or the Chief Financial Officer as a director, subject to
applicable law.
4.5 Conduct of Business by Company Pending the Closing. The Company
covenants and agrees that, during the period from the date of this Agreement to
the Closing Date, (i) except as expressly required or permitted by this
Agreement, the Support Agreement or the Chapter 11 Plan, as required by Law or
order of the Bankruptcy Court or as set forth in Section 4.5 of the Company
Disclosure Letter or otherwise with the prior written consent of Purchaser
(which will not be unreasonably withheld or delayed), the business of the
Company and its Subsidiaries shall be conducted in the usual and ordinary course
of business consistent in all material respects with past practices, and the
Company shall use its commercially reasonable efforts to (a) preserve
substantially intact its current business organization and (b) preserve in all
material respects its present relationships with suppliers, lessors, employees,
customers, and other Persons with which it has significant business relations,
and (ii) it will promptly give written notice to Appaloosa with particularity
upon having Knowledge of any matter that may constitute a breach of any of the
Company's representations, warranties, agreements or covenants contained in this
Agreement that would reasonably be expected to result in a failure of a
condition in Section 5.3(b) or 5.3(c). Without limiting the generality of the
foregoing, the Company shall not, and it shall cause its Subsidiaries not to,
between the date of this Agreement and the Closing Date, except as expressly
required or permitted by this Agreement, the Support Agreement or the Chapter 11
Plan, as required by Law or order of the Bankruptcy Court or as set forth in
Section 4.5 of the Company Disclosure Letter, directly or indirectly, do, or
irrevocably commit to do, any of the following without the prior written consent
of Appaloosa or Purchaser, which will not be unreasonably withheld or delayed:
(a) amend or otherwise change the Company's charter or bylaws or,
unless the Company Board determines in good faith, after consultation with its
outside counsel, that its fiduciary duties require it, amend or grant any waiver
under the Rights Agreement;
21
(b) except for intercompany transactions, issue, deliver, grant, sell
or dispose of any of the Company's or its Subsidiaries capital stock or any
securities convertible into, or any rights, warrants or options to acquire, any
such capital stock at less than fair market value;
(c) declare, set aside, make or pay any dividend or other
distribution, whether payable in cash, stock, property or otherwise, with
respect to any of its capital stock (other than dividends or distributions by
any wholly owned Subsidiary to its parent);
(d) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any shares of capital stock of the
Company or any Subsidiary or any securities convertible into or exercisable for
any such shares of its capital stock or securities;
(e) acquire any shares or equity interests in any corporation,
partnership, Person or other business organization or division thereof, or a
substantial portion of the assets thereof, except (i) immaterial acquisitions in
the ordinary course of business consistent with past practice and (ii) other
acquisitions involving not in excess of $50 million in any transaction;
(f) (i) incur, create or assume any indebtedness for borrowed money
(including by issuance of debt securities) other than borrowings in the ordinary
course of business consistent with past practices under the Company's or any
Subsidiary's existing or any amended or replacement credit facilities or
(ii) other than in the ordinary course of business consistent with past
practices or for guarantees of Subsidiary obligations to the extent permitted
under the Company's applicable credit agreements, issue any debt securities or
warrants or other rights to acquire any debt securities of the Company or any
Subsidiary, or assume, guarantee or endorse, or otherwise as an accommodation
become responsible for, the obligations or indebtedness for borrowed money of
any Person, or make any loans or advances or, except in connection with an
acquisition permitted under clause (e) above, make any capital contributions to,
or investments in, any other Person;
(g) except as may be required as a result of a change in law or in
GAAP or audit practices, make any material change to any of the financial
accounting methods, practices or principles used by it;
(h) adopt or authorize a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Significant Subsidiaries (other than
as provided for under the Chapter 11 Plan or as otherwise expressly permitted
under this Agreement);
(i) sell, lease, license, mortgage, pledge, grant a lien, mortgage,
pledge, security interest, charge, claim or other encumbrance of any kind or
nature on or otherwise encumber or dispose of any of its properties or assets,
except (i) in the
22
ordinary course of business consistent with past practice and (ii) other
transactions involving not in excess of $50 million in any 12-month period;
(j) settle or dismiss any Litigation threatened against, relating to
or involving the Company and any Subsidiary in connection with any business,
asset or property of the Company and any Subsidiary, other than in the ordinary
course of business consistent with past practices but not, in any individual
case, in excess of $50 million or in a manner that would prohibit or materially
restrict the Company from operating as it has historically (including as of the
date of this Agreement);
(k) (A) make any material Tax election, (B) enter into any settlement
or compromise of any material Tax liability, (C) file any amended Tax Return
with respect to any material Tax, (D) change any annual Tax accounting period,
(E) enter into any closing agreement relating to any material Tax, or (F)
surrender any right to claim a material Tax refund other than in the ordinary
course of business consistent with past practices; or
(l) enter into any new, or amend or supplement any existing,
collective bargaining agreement, which is inconsistent with the Chapter 11 Plan,
this Agreement or the Support Agreement.
4.6 Access. From the date hereof to the Closing Date, the Company
will (i) allow all designated officers, attorneys, accountants and other
representatives of Appaloosa and Purchaser reasonable access at reasonable times
during normal business hours to the officers, key employees, accountants and
other representatives of the Company and its Subsidiaries and the books and
records of the Company and its Subsidiaries and (ii) furnish to Appaloosa and
Purchaser and their counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information as such
Persons may reasonably request. All information provided pursuant to this
Section 4.6 will be subject to the Confidentiality Agreement.
4.7 Publicity. The initial press release relating to this Agreement
will be in the form of a joint press release previously agreed between Appaloosa
and Purchaser and the Company. Thereafter, the Company (or New Dana, as
applicable), Appaloosa and Purchaser will, subject to their respective legal
obligations (including requirements of stock exchanges and other similar
regulatory bodies), consult with each other, and use reasonable efforts to agree
upon the text of any press release, before issuing any such press release or
otherwise making public statements with respect to the transactions contemplated
hereby and in making any filings with any Governmental Entity or with any
national securities exchange with respect thereto.
4.8 HSR Act; Other Regulatory Filings. The Company and Appaloosa will
or will cause the Person within which the Company and Purchaser are included,
pursuant to the HSR Act and rules and regulations promulgated thereunder, to (i)
promptly, but in no event later than twenty business days after the date of the
Approval Order, file any and all Notification and Report Forms required under
the HSR Act with the Federal Trade Commission (the "FTC") and the Antitrust
Division of the
23
Department of Justice (the "Antitrust Division") and use their respective
reasonable efforts to respond as promptly as practicable to all reasonable
inquiries received from the FTC or the Antitrust Division for additional
information or documentation, (ii) use reasonable best efforts to cause the
expiration or termination of any applicable waiting periods under the HSR Act,
(iii) use reasonable best efforts to cooperate with each other in (x)
determining whether any filings are required to be made with, or consents,
permits, authorizations, waivers, clearances, approvals, and expirations or
terminations of waiting periods are required to be obtained from any
Governmental Entities in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and
(y) timely making all such filings and timely obtaining all such consents,
permits, authorizations or approvals, (iii) supply to any Governmental Entity as
promptly as reasonably practicable any additional information or documentary
material that may reasonably be requested pursuant to any Antitrust Law or by
such Governmental Entity, and (iv) use reasonable best efforts to take, or cause
to be taken, all other actions and do, or cause to be done, all other things
necessary, proper or advisable to consummate and make effective the Investments,
including using reasonable best efforts to (A) take such further action as may
be necessary to resolve such objections, if any, as the FTC, Antitrust Division,
state antitrust enforcement authorities or competition authorities of any other
nation or other jurisdiction or any other Person may assert under any Antitrust
Law with respect to the Investments, and (B) avoid or eliminate each and every
impediment under any Law that may be asserted by any Governmental Entity with
respect to the Investments so as to enable the Closing to occur no later than
May 1, 2008; provided that, neither the Company nor any of its Subsidiaries
will, nor will Appaloosa or any of its Subsidiaries or Affiliates, be obligated
to, become subject to, or consent or agree to or otherwise take any action with
respect to, any requirement, condition, understanding, agreement or order of a
Governmental Entity to sell, to hold separate or otherwise dispose of, or to
conduct, restrict, operate, invest or otherwise change the assets or business of
the Company or any of its Subsidiaries or Appaloosa or any of its Subsidiaries
or Affiliates (any of the foregoing, a "Restrictive Action"), as the case may
be, unless such requirement, condition, understanding, agreement or order is
binding on the Company or Appaloosa, its Subsidiaries or Affiliates,
respectively, only in the event that the Closing occurs; provided, further, that
in no event will Appaloosa be required to take any Restrictive Action with
respect to any portfolio companies (whether Controlled by Appaloosa or
otherwise) of Appaloosa or any of its affiliated funds (other than the Company).
4.9 Reasonable Efforts to Close. The parties agree to use their
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the transactions contemplated by this
Agreement, including without limitation using reasonable efforts to cause the
conditions to Closing to be satisfied as promptly as practicable. Each of
Purchaser and the Company agrees that it will consult with the other with
respect to the obtaining of all approvals of any and all third parties and
Governmental Entities necessary or advisable to consummate the transactions
contemplated by this Agreement, and each party will keep the other reasonably
apprised of the status of any material matters relating to completion of the
transactions
24
contemplated herein. Appaloosa will cause Purchaser to perform its
obligations in this Agreement.
4.10 Notification of Alternative Investment. Nothing in this Agreement
will be deemed to preclude the Company from furnishing information with respect
to the Company and its Subsidiaries to any Person making an Alternative Proposal
or participating in discussions or negotiations with the Person making an
Alternative Proposal; provided, that the Company will not disclose any material
non-public information to such Person without entering into an Acceptable
Confidentiality Agreement. If the Company Board determines in good faith (after
consultation with its outside legal counsel and its independent financial
advisor or advisors) that the terms of an Alternative Investment proposal are
superior to the terms of this Agreement and the Investments, taking into account
all legal, financial, regulatory and other aspects of such Alternative
Investment, the likely time to consummation of the Alternative Investment and
the termination rights of the Unions set forth in the Union Settlement
Agreement, then the Company must promptly, but in no event more than one
business day, after such Company Board determination provide written notice to
Appaloosa (the "Notice of Alternative Investment") advising it that it has
received a proposal for an Alternative Investment, specifying the material terms
and conditions of such proposal and indicating that the Company Board intends to
consider whether to terminate this Agreement pursuant to Section 6.2(f).
Appaloosa will have five business days from its receipt of the Notice of
Alternative Investment (the "Match Period") to make an offer to amend the terms
of this Agreement and the Investments in response thereto.
4.11 Takeover Statutes and Charter. The Company and the Company Board
have taken, or with respect to New Dana, will prior to Closing take, all action
necessary (a) to ensure that no state takeover statute or similar statute or
regulation is or becomes applicable to this Agreement or any transaction
contemplated hereby or by the Chapter 11 Plan, the Support Agreement or the Form
of Plan, (b) if any state takeover statute is or may become applicable to the
transactions contemplated by this Agreement, the Chapter 11 Plan, the Support
Agreement or the Form of Plan, to grant such approvals and take such actions as
are necessary so that such transactions may be consummated as promptly as
practicable on the terms contemplated by this Agreement, the Chapter 11 Plan,
the Support Agreement or the Form of Plan and otherwise to act to eliminate or
minimize the effects of such statute or regulation on such transactions and
(iii) to ensure that this Agreement or any transaction contemplated hereby or by
the Chapter 11 Plan, the Support Agreement or the Form of Plan are approved for
purposes of Article 14 of the VSCA.
V. CONDITIONS TO CLOSING
5.1 Conditions to Each Party's Obligations. The respective
obligations of Appaloosa and Purchaser, on the one hand, and Dana and New Dana,
on the other hand, to consummate the transactions contemplated by this Agreement
are subject to
25
the fulfillment (or waiver by all parties to the extent permitted by Law) at or
prior to the Closing Date of the following conditions:
(a) All conditions precedent to the effectiveness of the Chapter 11
Plan shall have been satisfied or waived pursuant to the provisions therein.
(b) The waiting period (and any extension thereof) if any, applicable
to the issuance and sale of the Shares under all applicable Antitrust Laws shall
have been terminated or expired.
(c) No Order or Law enacted, entered, promulgated, enforced or issued
by any court of competent jurisdiction or other Governmental Entity or other
legal restraint or prohibition preventing the consummation of the transactions
contemplated by this Agreement shall be in effect.
(d) The Bankruptcy Court shall have issued the Approval Order.
(e) The Union Settlement Agreement shall not have been terminated and
shall have been approved by the Bankruptcy Court.
5.2 Conditions to Obligations of the Company. The obligations of the
Company to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or waiver, at or prior to the Closing of the
following conditions:
(a) That all closing deliveries set forth in Section 1.5(a) hereof
shall have been delivered to New Dana.
(b) All representations and warranties of Appaloosa and Purchaser in
Article III must be true and correct in all respects on the Closing Date, except
as would not have or reasonably be expected to have a Purchaser Material Adverse
Effect.
(c) All covenants in Article IV required to be performed by Appaloosa
or Purchaser herein must have been complied with in all material respects.
(d) A confirmation order (the "Confirmation Order") approving the
Chapter 11 Plan in a form reasonably acceptable to the Company consistent with
the Form of Plan in all respects shall have been entered by the Bankruptcy
Court.
(e) The Chapter 11 Plan, including the plan documents attached
thereto, shall be in a form reasonably acceptable to the Company consistent with
the Form of Plan and shall have been implemented in all material respects in a
manner acceptable to the Company.
(f) The Company or New Dana, as the case may be, must have received
from Appaloosa a certificate of an executive officer of Appaloosa (without
personal liability) certifying to the satisfaction of the conditions set forth
in Sections 5.2(b) and 5.2(c) above.
26
5.3 Conditions to Obligations of Purchaser. The obligations of
Purchaser to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or waiver, at or prior to the Closing of the
following conditions:
(a) All closing deliveries set forth in Section 1.6(b) hereof must
have been delivered to Purchaser.
(b) All representations and warranties of the Company and New Dana in
Article II must be true and correct in all respects on the Closing Date, except
as would not have or reasonably be expected to have a Company Material Adverse
Effect.
(c) All covenants in Article IV required to be performed by the
Company or New Dana, as the case may be, must have been complied with in all
material respects.
(d) No Company Material Adverse Effect shall have occurred between
the date hereof and the Closing.
(e) The Confirmation Order approving the Chapter 11 Plan in a form
reasonably acceptable to Appaloosa consistent with the Form of Plan in all
respects shall have been entered by the Bankruptcy Court on or before February
28, 2008.
(f) The Company shall have obtained exit financing with parties and
on market terms that are reasonably acceptable to Appaloosa and shall have
consulted with Appaloosa regarding such parties and terms.
(g) The Chapter 11 Plan and the related disclosure statement shall
have been filed with the Bankruptcy Court no later than ________, 2007.
(h) The Chapter 11 Plan, including the plan documents attached
thereto, shall be in a form acceptable to Appaloosa and shall have been
implemented in all material respects in a manner acceptable to Appaloosa
consistent with this Agreement and the Form of Plan.
(i) Appaloosa must have received from the Company or New Dana, as the
case may be, a certificate of an executive officer of the Company or New Dana,
as the case may be, (without personal liability) certifying to such executive's
Knowledge the satisfaction of the conditions set forth in Sections 5.3(b), (c)
and (d) above.
(j) New Dana's charter or amendments to the Company's charter, as
applicable, shall have been filed with the Secretary of State of the state in
which it is incorporated, which charter or amendments, and the bylaws of New
Dana in effect as of the Closing Date, shall be in form and substance reasonably
acceptable to Purchaser and Appaloosa and consistent with this Agreement and the
Exhibits hereto, necessary to implement the transactions contemplated by this
Agreement, the Chapter 11 Plan, the Support Agreement and the Form of Plan;
provided, however, that the terms of the Series A Preferred and Series B
Preferred included in the New Dana charter shall in any event be in the form of
Exhibit A, and Appaloosa shall have received from the
27
Company or New Dana, as the case may be, a certificate of the Secretary of the
Company or New Dana, as the case may be, certifying as to such charter and
bylaws.
(k) Effective upon the Closing, the New Dana Board shall consist of
nine directors, (i) three of whom shall be designated by Appaloosa, (ii) three
of whom shall be designated by representatives of the unsecured creditor's
committee (the "Creditors' Committee") appointed in the Chapter 11 Case, each of
whom shall be an Independent Director, (iii) one of whom shall be the Chief
Executive Officer of the Company, (iv) one of whom shall be the Executive
Chairman (as defined in the Shareholders Agreement) and (v) one of whom shall be
selected by the Standby Purchasers other than Appaloosa, and reasonably
acceptable to Appaloosa. At least two-thirds of the members of the New Dana
Board shall be Independent Directors.
(l) The Rights Offering shall have been conducted in all material
respects in accordance with this Agreement and the Disclosure Statement and the
Expiration Time shall have occurred.
(m) Each of the Standby Purchasers shall have received a Purchase
Notice from the Company, dated as of the Determination Date, certifying as to
the number of Unsubscribed Shares to be purchased or a Satisfaction Notice.
(n) There shall not have occurred any material strike or labor
stoppage or slowdown at the Company or General Motors, Chrysler, Ford Motor
Company or any of their respective Subsidiaries.
5.4 Frustration of Closing Conditions. No party hereto may rely,
either as a basis for not consummating the Investments or terminating this
Agreement and abandoning the Investments, on the failure of any condition set
forth in Section 5.1, 5.2 or 5.3, as the case may be, to be satisfied if such
failure was caused by such party's breach in any material respect of any
provision of this Agreement or failure to use all reasonable best efforts to
consummate the Investments and the other transactions contemplated hereby.
VI. TERMINATION AND WAIVER
6.1 Termination by Mutual Consent. This Agreement may be terminated
at any time prior to the Closing Date by the mutual consent of Appaloosa and the
Company.
6.2 Other Termination Rights. This Agreement may also be terminated:
(a) by either Appaloosa or the Company, if the Effective Date has not
occurred on or before May 1, 2008; provided, however, that no party may
terminate this Agreement pursuant to this Section 6.2(a) if such party has
failed in any material respect to fulfill any of its obligations under this
Agreement;
28
(b) by either Appaloosa or the Company, if any Governmental Entity
has issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the consummation of the purchase
of Shares by Purchaser or any of the other transactions contemplated by this
Agreement and such order, decree or ruling or other action has become final and
nonappealable;
(c) by either Appaloosa or the Company, if the Chapter 11 Case is
dismissed or converted to a case under Chapter 7 of the Bankruptcy Code or a
Chapter 11 trustee is appointed;
(d) by Appaloosa, if there has been a default or breach by the
Company of its representations and warranties, covenants or agreements set forth
in this Agreement, or in connection with the transactions contemplated hereby,
which default or breach is incapable of being cured or, if capable of being
cured has not been cured within 60 days following receipt by the Company from
Appaloosa of written notice of such default or breach (specifying in reasonable
detail the claimed default or breach and demand of its cure or satisfaction) and
which default or breach would result in a failure of the condition set forth in
Section 5.3(f) or (g), as applicable or if, pursuant to an order of the
Bankruptcy Court, the Debtor no longer has the exclusive right to file a plan of
reorganization; provided, however, that Appaloosa will not have the right to
terminate this Agreement pursuant to this Section 6.2(d) if it or Purchaser is
in material breach of any representations, warranties, covenants or agreements
hereunder;
(e) by the Company, if there has been a default or breach by
Appaloosa or Purchaser of its representations and warranties, covenants or
agreements set forth in this Agreement, or in connection with the transactions
contemplated hereby, which default or breach is incapable of being cured or, if
capable of being cured has not been cured within 60 days following receipt by
Appaloosa from the Company of written notice of such default or breach
(specifying in reasonable detail the claimed default or breach and demand of its
cure or satisfaction) and which default or breach would result in a failure of
the condition set forth in Section 5.2(d) or (e), as applicable; provided,
however, that the Company will not have the right to terminate this Agreement
pursuant to this Section 6.2(e) if it is in material breach of any
representations, warranties, covenants or agreements hereunder;
(f) by the Company, in the event that the Company Board approves an
Alternative Investment (whether pursuant to a binding letter of intent or
definitive agreements) after determining in good faith (after consultation with
its outside legal counsel and its independent financial advisor or advisors)
that the terms of such Alternative Investment are superior to the terms of this
Agreement and the Investments, taking into account all legal, financial,
regulatory and other aspects of such Alternative Investment, the likely time to
consummation of the Alternative Investment, the termination rights of the Unions
set forth in the Union Settlement Agreement and any amendments to this Agreement
and the Investments proposed by Appaloosa during the Match Period; provided,
however, that in order for the termination of this Agreement pursuant to this
Section 6.2(f) to be effected, the Company shall first have complied in all
material respects with the provisions of Section 4.10;
29
(g) by the Company, in the event that the Company Board approves an
Alternative Majority Investment (whether pursuant to a binding letter of intent
or definitive agreements) after determining in good faith (after consultation
with its outside legal counsel and its independent financial advisor or
advisors) that the terms of such Alternative Majority Investment are more
favorable to the bankruptcy estate of the Debtor than the Chapter 11 Plan and
the Investments, taking into account all legal, financial, regulatory and other
aspects of such Alternative Majority Investment, the likely time to consummation
of the Alternative Majority Investment and the termination rights of the Unions
set forth in the Union Settlement Agreement;
(h) by the Company, in the event that the Company Board approves an
Alternative Transaction (whether pursuant to a binding letter of intent or
definitive agreements) after determining in good faith (after consultation with
its outside legal counsel and its independent financial advisor or advisors)
that the terms of such Alternative Transaction are more favorable to the
bankruptcy estate of the Debtor than the Chapter 11 Plan and the Investments,
taking into account all legal, financial, regulatory and other aspects of such
Alternative Transaction, the likely time to consummation of the Alternative
Transaction and the termination rights of the Unions set forth in the Union
Settlement Agreement; and
(i) by the Company, in the event that the Company Board approves an
Alternative Stand-Alone Plan after determining in good faith (after consultation
with its outside legal counsel and its independent financial advisor or
advisors) that the terms of an Alternative Stand-Alone Plan are more favorable
to the bankruptcy estate of the Debtor than the Chapter 11 Plan and the
Investments, taking into account all legal, financial, regulatory and other
aspects of such Alternative Stand-Alone Plan, the likely time to consummation of
the Alternative Stand-Alone Plan and the termination rights of the Unions set
forth in the Union Settlement Agreement.
6.3 Effect of Termination. (a) Any termination of this Agreement by
Appaloosa pursuant to this Article VI will be deemed to be a termination on
behalf of itself and Purchaser.
(b) A termination under Section 6.1 will be effective upon the date
of the mutual agreement to terminate this Agreement pursuant thereto.
(c) In order to terminate this Agreement pursuant to Section 6.2
hereof by Appaloosa or the Company, written notice thereof must promptly be
given to the other party specifying the provision hereof pursuant to which such
termination is made, and the effective date of such termination will be as
follows (with respect to each applicable paragraph of Section 6.2, the
"Termination Effective Date" thereof):
(i) with respect to a termination under Section 6.2(a), (b), (c), (d)
or (e), such termination will become effective upon notice of the exercise
of such termination right, in accordance with Section 8.1;
30
(ii) with respect to a termination under Section 6.2(f), (g) or (h),
notwithstanding the prior delivery of a notice of the Company's exercise of
such termination right, such termination will become effective only upon
the earlier to occur of (A) the approval by the Bankruptcy Court of the
Alternative Investment, the Alternative Majority Investment or the
Alternative Transaction, respectively, (B) the 30th day after the
applicable Company Board approval giving rise to such termination right, as
described in Section 6.2(f), (g) or (h), and (C) the Company's written
notice to Appaloosa that it wishes the termination to be effective at a
specified earlier date, respectively; provided, however, that in the event
the Bankruptcy Court enters an order denying the Company's motion to
approve such Alternative Investment, Alternative Majority Investment or
Alternative Transaction, as applicable, prior to such 30th day (or, if
earlier, the date of such Company notice), the Company's termination notice
relating thereto will automatically and without further action be deemed to
have been withdrawn and such termination will not become effective for any
purposes under this Agreement; and
(iii)with respect to a termination under Section 6.2(i),
notwithstanding the prior delivery of a notice of the Company's exercise of
such termination right, such termination will become effective only upon
the entry of an order by the Bankruptcy Court approving the disclosure
statement relating to such Alternative Stand-Alone Plan or such earlier
date on which the Company give written notice to Appaloosa that it wishes
the termination to be effective at a specified earlier date.
(d) Upon the effectiveness of the termination of this Agreement
pursuant to Section 6.3(c), this Agreement will become void and have no effect,
and there will be no liability hereunder on the part of Appaloosa, Purchaser or
the Company or New Dana; provided, however, that Section 4.7 and Article VIII
and all obligations to pay any fees pursuant to Article VII, if any, will
survive any such effectiveness or termination as set forth therein; provided
further, however, that nothing in this Section 6.3 will relieve Appaloosa or
Purchaser of liability for any breach of this Agreement. The Confidentiality
Agreement will, except as provided herein, remain in effect during the term of
this Agreement and following its termination pursuant to its terms; provided,
however, that such agreement will automatically terminate as of the Closing.
Notwithstanding that a termination of this Agreement pursuant to Section 6.2(f),
(g), (h) or (i) is not yet effective, upon delivery by the Company of notice of
termination pursuant to one of those Sections, the Company's obligations to
pursue the Chapter 11 Plan and to otherwise use reasonable efforts to
consummate, and take actions in furtherance of, the transaction contemplated by
this Agreement and the Chapter 11 Plan will be suspended until such termination
either becomes effective or is withdrawn pursuant to the applicable provision of
Section 6.2; provided, however, that during such suspension period, the Company
will not voluntarily take any action, directly or indirectly, that would
preclude continued compliance with its obligations hereunder should the
termination be so withdrawn.
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VII. FEES AND EXPENSES
7.1 Termination Fee / Expenses. Subject to Section 7.3, in the event
that this Agreement is terminated pursuant to (i) Section 6.2(a) then the
Company will be obligated to pay Purchaser, as liquidated damages, a payment of
$2.5 million or (ii) Section 6.2(c) or (d), then the Company will be obligated
to pay Purchaser, as liquidated damages, a payment of $3.5 million (any payment
to be made under clause (i) or (ii) above, a "Termination Fee") plus an
additional amount equal to the reasonable out-of-pocket costs and expenses
incurred by Appaloosa and Purchaser in connection with this Agreement and the
transactions contemplated hereby, in an amount not to exceed $4.0 million (the
"Purchaser Expenses"). Any such payments pursuant to this Section 7.1 will be
earned and payable by the Company to Purchaser immediately upon the Termination
Effective Date of the applicable termination.
7.2 Commitment Fee. Subject to Section 7.3, in consideration of the
Standby Purchasers' commitment to purchase any Unsubscribed Shares pursuant to
the terms of this Agreement, on the Effective Date, the Company will pay to
Purchaser a commitment fee in an aggregate amount equal to $10.0 million (the
"Commitment Fee"), plus an additional amount equal to the Purchaser Expenses.
7.3 No Duplication of Payments. Notwithstanding any other provision
hereof, Purchaser shall be entitled to only one payment of each of the following
fees and expenses: (a) Purchaser Expenses, (b) a Termination Fee and (c) a
Commitment Fee , as applicable, pursuant to Section 7.1 or 7.2.
7.4 Superpriority Administration Expense Claims. The liquidated
damages payments payable pursuant to Section 7.1 and 7.2 will be superpriority
allowed administrative expense claims having priority over all other
administrative claims other than any such claims of the Debtors' post-petition
lenders in their capacity as such.
7.5 Liquidated Damages. Appaloosa and Purchaser agree that it would
be impractical and extremely difficult to determine the extent of any damages to
Appaloosa and Purchaser that might result from a breach by the Company of any
representation, warranty, covenant or agreement of this Agreement or the Support
Agreement. Therefore, the parties acknowledge and agree that any payment to
Purchaser made pursuant this Article VII will be paid as liquidated damages and
the parties' good faith estimate of the actual potential damages to Purchaser
and Appaloosa for any such breach. Purchaser and Appaloosa agree to accept such
amounts as satisfaction in full of any claim or demand that Purchaser or
Appaloosa may have against the Company, its Affiliates, employees, officers,
directors, agents, successors and assigns because of such breach.
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VIII. GENERAL PROVISIONS
8.1 Notices. Any notice or other communication required to be given
hereunder will be in writing, and sent by reputable courier service (with proof
of service), by hand delivery, or by email or facsimile (followed on the same
day by delivery by courier service (with proof of delivery) or by hand
delivery), addressed as follows:
If to Appaloosa or Purchaser:
Appaloosa Management L.P.
26 Main Street
Chatham, NJ 07928
Attention: James Bolin
Email: j.bolin@amlp.com
Fax: (973) 701-7055
With a copy to:
White & Case LLP
Wachovia Financial Center
200 South Biscayne Boulevard
Suite 4900
Miami, Florida 33131-2352
Attention: Thomas E. Lauria (tlauria@whitecase.com)
Gerard Uzzi (guzzi@whitecase.com)
Fax: (305) 358-5744/5766
And
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Attention: John Reiss (jreiss@whitecase.com)
Steven Teichman (steichman@whitecase.com)
Fax: 212-354-8113
If to the Company or New Dana:
Dana Corporation (or the name of New Dana)
4500 Dorr Street
Toledo, OH 43615
Attention: General Counsel and Secretary
Email:
Fax: (419) 535-4544
33
With copies to:
Jones Day
222 East 41st Street
New York, New York 10017
Attention: Corinne Ball
Email: cball@jonesday.com
Fax: (212) 755-7306
and
Attention: Marilyn W. Sonnie
Email: mwsonnie@jonesday.com
Fax: (212) 755-7306
or to such other address as any party will specify by written notice so given,
and such notice will be deemed to have been delivered as of the date so
telecommunicated or personally delivered.
8.2 Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder will be assigned by any party hereto
(whether by operation of Law or otherwise) without the prior written consent of
the other party, except that (a) Appaloosa will have the right to assign any of
the rights and obligations of Appaloosa hereunder to any Standby Purchaser who
executes and delivers to the Company an Assumption Agreement, provided, that any
such assignment will not relieve Appaloosa from any of its obligations hereunder
and (b) the Company will, effective as of the Effective Date, assign all of its
rights and obligations under this Agreement to New Dana. Any assignment not
granted in accordance with the foregoing will be null and void. Subject to the
first and last sentence of this Section 8.2, this Agreement will be binding upon
and will inure to the benefit of the parties hereto and their respective
successors and assigns. Notwithstanding anything contained in this Agreement to
the contrary, (A) the Company's and New Dana's obligations hereunder are subject
to approval by the Bankruptcy Court of the transactions contemplated hereby and
under the other Transaction Documents and (B) nothing in this Agreement,
expressed or implied, is intended to confer on any Person other than the parties
hereto or their respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
8.3 Entire Agreement. This Agreement, the Company Disclosure Letter,
and any documents delivered by the parties in connection herewith or therewith,
including the Transaction Documents, the Support Agreement and the
Confidentiality Agreement constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings among the parties with respect thereto. The Confidentiality
Agreement and Support Agreement remain in full force and effect.
34
8.4 Amendment. Subject to applicable law, including but not limited
to the requirements of the Bankruptcy Code and the orders of the Bankruptcy
Court, this Agreement may only be amended by an instrument in writing signed on
behalf of each of the parties hereto.
8.5 Governing Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York, without regard to its
conflict of laws principles.
8.6 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
will be an original, but all such counterparts will together constitute one and
the same instrument. Each counterpart may consist of a number of copies hereof
each signed by less than all, but together signed by all of the parties hereto.
A facsimile copy of a signature page will be deemed to be an original signature
page.
8.7 Headings. Headings of the Articles and Sections of this Agreement
are for the convenience of the parties only, and will be given no substantive or
interpretive effect whatsoever.
8.8 Certain Definitions/Interpretations. (a) For purposes of this
Agreement:
(i) "Assumption Agreement" means an agreement in writing in
substantially the form of Exhibit A to the Shareholders Agreement pursuant
to which the party thereto agrees to be bound by the terms and provisions
of this Agreement;
(ii) An "Affiliate" of any Person means another Person that, directly
or indirectly, through one or more intermediaries, Controls, is Controlled
by, or is under Common Control with, such first Person; provided that as
such term is used in this Agreement, Appaloosa and Purchaser will not be
considered to be Affiliates of the Company;
(iii)"Alternative Investment" means an investment proposed by any
Person or group of Persons (other than a party to this Agreement or its
Affiliates) (a "Third Party Investor") that would result in any direct or
indirect acquisition or purchase by such Third Party Investor of beneficial
ownership of less than 50% of the equity securities of New Dana entitled to
vote generally in the election of directors calculated on a fully-diluted
basis, taking into account any securities convertible into, exchangeable
for or exercisable for any such securities (whether immediately or
otherwise) on an as-converted, exchanged or exercised basis, that would be
an alternative to the Investments;
(iv) "Alternative Majority Investment" means an investment proposed by
any Third Party Investor, other than an Alternative Investment, that would
result in any direct or indirect acquisition or purchase by such Third
Party Investor of beneficial ownership of at least 50% of the equity
securities of New Dana entitled
35
to vote generally in the election of directors calculated on a
fully-diluted basis, taking into account any securities convertible into,
exchangeable for or exercisable for any such securities (whether
immediately or otherwise) on an as-converted, exchanged or exercised basis,
that would be an alternative to the Investments; ;
(v) "Alternative Transaction" means a proposed transaction, other
than an Alternative Investment or Alternative Majority Investment, between
the Company and a Third Party Investor, involving the sale of all or
substantially all of the assets of Debtor as a going concern and not as a
liquidation;
(vi) "Alternative Stand-Alone Plan" means any plan of reorganization
for the Company, not involving any Alternative Investment, Alternative
Majority Investment or Alternative Transaction, proposed by the Debtor
without any party providing equity financing;
(vii)"Antitrust Laws" means the Sherman Antitrust Act, as amended, the
Clayton Act of 1914, as amended, the HSR Act, the Federal Trade Commission
Act of 1914, as amended, Council Regulation (EC) No. 139/2004 of 20 January
2004 on the control of concentrations between undertakings, as amended, and
all other Laws and Orders that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of monopolization
or restraint of trade, whether foreign or domestic;
(viii) "Bankruptcy Court" means the United States Bankruptcy Court for
the Southern District of New York;
(ix) "Certificate of Designation" means the Articles of Serial
Designation of 4.0% Series A Convertible Preferred Stock and 4.0% Series B
Convertible Preferred Stock in the form of Exhibit A;
(x) "Claims" means claims (as such term is defined under section 101
of the Bankruptcy Code) against the Company or any rights to acquire such
claims;
(xi) "Company Board" means the board of directors of the Company;
(xii)"Company Material Adverse Effect" means any change, effect, event
or condition that has had or could reasonably be expected to have a
material adverse effect (a) on the business, results of operations or
financial condition of the Company, New Dana and their Subsidiaries, taken
as a whole, or (b) that would prevent the Company from timely consummating
the transactions contemplated hereby in all material respects; provided,
however, that the definition of Company Material Adverse Effect will not
include facts, circumstances, events, changes, effects or occurrences
(i) generally affecting the industry in which the Company and its
Subsidiaries or their customers operate, or the economy or the financial,
credit or securities markets, in the United States or other countries in
which the Company or its Subsidiaries operate, including
36
effects on such industries, economy or markets resulting from any
regulatory and political conditions or developments in general, or any
outbreak or escalation of hostilities, declared or undeclared acts of war
or terrorism (other than any of the foregoing that causes any damage or
destruction to or renders physically unusable or inaccessible any facility
or property of the Company or any of its Subsidiaries); (ii) reflecting or
resulting from changes in law or GAAP (or authoritative interpretations
thereof); (iii) resulting from actions of the Company or any of its
Subsidiaries that Appaloosa has expressly requested in writing or to which
Appaloosa has expressly consented to in writing; (iv) to the extent
resulting from the announcement of the Investments and the transactions
contemplated thereby, including any lawsuit related thereto or any loss or
threatened loss of or adverse change or threatened adverse change, in each
case resulting therefrom, in the relationship of the Company or its
Subsidiaries with its customers, suppliers, employees or others; (v)
resulting from changes in the market price or trading volume of the
Company's securities, provided that the exceptions in this clause (v) are
strictly limited to any such change or failure in and of itself and will
not prevent or otherwise affect a determination that any fact,
circumstance, event, change, effect or occurrence underlying such change or
such failure has resulted in, or contributed to a Company Material Adverse
Change; (vi) resulting from the suspension of trading in securities
generally on any U.S. national securities exchange; or (vii) resulting from
changes in the pool of claims (as such term is defined in Section 1.01(5)
of the Bankruptcy Code); except to the extent that, with respect to clauses
(i) and (ii), the impact of such fact, circumstance, event, change, effect
or occurrence is disproportionately adverse to the Company and its
Subsidiaries, taken as a whole, as compared to other Persons engaged in the
industries in which the Company and its Subsidiaries compete;
(xiii) "Company Reports" means all forms and reports filed by the
Company with the SEC after January 1, 2006, and any such forms or reports
filed by the Company with the SEC after the date of this Agreement and
until the Closing Date, in each case under Sections 12(b) or 12(g) of the
Exchange Act and the rules and regulations promulgated thereunder;
(xiv) "Confidentiality Agreement" means that agreement by and between
Appaloosa and the Company, dated as of July 21, 2007;
(xv) "Control" (including the terms "Controlling", "Controlled by" and
under "Common Control with") means possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract, or
otherwise;
(xvi) "Independent Director" has the meaning given such term in
Exhibit B;
(xvii) "Knowledge" means the actual knowledge after reasonable inquiry
of any of the Company's executive officers in the case of the Company and,
in
37
the case of Purchaser, means the actual knowledge of Appaloosa's executive
officers after reasonable inquiry;
(xviii) "Litigation" means any complaint, action, suit, proceeding,
arbitration or other alternate dispute resolution procedure, demand,
investigation or inquiry, whether civil, criminal or administrative;
(xix) "New Common Stock" means the common stock of New Dana issued
pursuant to the Plan;
(xx) "New Dana Board" means the board of directors of New Dana; (xxi)
"Person" means any individual, firm, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity;
(xxii) "Purchaser Material Adverse Effect" means any change, effect,
event or condition that has prevented or materially delayed or could
reasonably be expected to prevent or materially delay Appaloosa's or
Purchaser's ability to consummate the transactions contemplated hereby;
(xxiii) "Rights Agreement" means the Rights Agreement, dated as of
April 25, 1996, as amended, between the Company and The Bank of New York,
successor to Mellon Investor Services LLC (formerly Chemical Mellon
Shareholder Services, L.L.C.), as Rights Agent;
(xxiv) "Securities Laws" means, collectively, the Securities Act, the
Exchange Act, and any state securities and "blue sky" laws;
(xxv) "Significant Subsidiary" has the meaning set forth in Rule
1-02(w) of Regulation S-X promulgated by the SEC;
(xxvi) "Subsidiary" when used with respect to any Person, means any
corporation or other organization, whether incorporated or unincorporated,
of which such Person directly or indirectly owns or Controls more than 50%
of the securities or other interests having by their terms ordinary voting
power to elect a majority of the board of directors or others performing
similar functions;
(xxvii) "Taxes or Tax" means all federal, state, local and foreign
taxes arising after the date on which the Debtor filed the Chapter 11 Case,
in the case of the Debtor, and arising at anytime in the case of Persons
other than the Debtor, (including income or profits taxes, alternative or
add-on minimum taxes, profits or excess profits taxes, premium taxes,
occupation taxes, excise taxes, sales taxes, use taxes, gross receipts
taxes, franchise taxes, ad valorem taxes, severance taxes, capital levy
taxes, prohibited transaction taxes, transfer taxes, value added taxes,
employment and payroll-related taxes (including employee withholding or
employer payroll tax, FICA or FUTA), real or personal property taxes,
business license taxes, occupation taxes, stamp taxes or duties,
38
withholding or back up withholding taxes, import duties and other
governmental charges and assessments), of any kind whatsoever, including
charges, interest, additions to tax and penalties with respect thereto, it
being agreed that the foregoing shall include any transferee or secondary
liability for a Tax and any liability assumed by agreement or arising as a
result of being or ceasing to be a member of any affiliated group or being
included or required to be included in any Tax Return;
(xxviii) "Unions" means, the United Steelworkers of America and the
International Union, UAW; and
(xxix) "Union Settlement Agreement" means the Settlement Agreements by
and between the Company and the Unions.
(xxx) "Unsecured Claims" means unsecured nonpriority Claims other
than: (i) subject to Appaloosa's reasonable approval as to the size of the
claims contained in such class, convenience class claims, and (ii) subject
to Appaloosa's reasonable approval, (a) asbestos personal injury claims,
(b) intercompany claims, (c) Dana Credit Corporation claims and (d) any
claims of the non-union retirees represented by the Official Committee of
Non-Union Retirees.
(b) When a reference is made in this Agreement to an Article,
Section, Exhibit or Annex, such reference will be to an Article or Section of,
or an Annex or Exhibit to, this Agreement unless otherwise indicated. Whenever
the words "include," "includes" or "including" are used in this Agreement, they
will be deemed to be followed by the words "without limitation." The words
"hereof," "herein" and "hereunder" and words of similar import when used in this
Agreement will refer to this Agreement as a whole and not to any particular
provision of this Agreement. All terms used herein with initial capital letters
have the meanings ascribed to them herein and all terms defined in this
Agreement will have such defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is referred
to herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a Person are also to its
permitted successors and assigns. As the context requires, all references to the
"Company" contained herein shall be references to "New Dana" after the Closing.
8.9 No Survival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Closing.
39
8.10 Waivers. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including without limitation any investigation by or
on behalf of any party, will be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties, covenants
or agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision hereunder will not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
At any time prior to the Closing Date, any party hereto may (a) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto, and (c) waive
compliance with any of the agreements or conditions contained herein. Any such
extension or waiver will be valid only if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
8.11 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction will, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision will be interpreted
to be only so broad as is enforceable.
8.12 Jurisdiction; Consent to Service of Process. (a) Each party
hereby irrevocably and unconditionally submits, for itself and its property, to
the exclusive jurisdiction of the Bankruptcy Court, and any appellate court from
any such court, in any suit, action or proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby, or for recognition or
enforcement of any judgment resulting from any such suit, action or proceeding,
and each party hereby irrevocably and unconditionally agrees that all claims in
respect of any such suit, action or proceeding may be heard and determined in
the Bankruptcy Court.
(b) It will be a condition precedent to each party's right to bring
any such suit, action or proceeding that such suit, action or proceeding, in the
first instance, be brought in the Bankruptcy Court, and if each such court
refuses to accept jurisdiction with respect thereto, such suit, action or
proceeding may be brought in any other court with jurisdiction.
(c) No party may move to (i) transfer any such suit, action or
proceeding from the Bankruptcy Court to another jurisdiction, (ii) consolidate
any such suit, action or proceeding brought in the Bankruptcy Court with a suit,
action or proceeding in another jurisdiction, or (iii) dismiss any such suit,
action or proceeding brought in the Bankruptcy Court for the purpose of bringing
the same in another jurisdiction.
(d) Each party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, (i) any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or
40
relating to this Agreement in the Bankruptcy Court, (ii) the defense of an
inconvenient forum to the maintenance of such suit, action or proceeding in any
such court, and (iii) the right to object, with respect to such suit, action or
proceeding, that such court does not have jurisdiction over such party. Each
party irrevocably consents to service of process in any manner permitted by law.
8.13 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF
OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
8.14 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement will be
construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof will arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
[Remainder of page intentionally blank]
41
IN WITNESS WHEREOF, the parties have executed this Agreement and caused the
same to be duly delivered on their behalf on the day and year first written
above.
DANA CORPORATION
By:
---------------------------
Name:
Title:
APPALOOSA MANAGEMENT, L.P.
By:
---------------------------
Name:
Title: Authorized Person
[PURCHASER]
By:
---------------------------
Name:
Title: Authorized Person
List of Exhibits
Exhibit A - Form of Certificate of Designation
Exhibit B - Form of Shareholders Agreement
Exhibit C - Form of Series A Registration Rights Agreement
Exhibit D - Form of Series B Registration Rights Agreement
Exhibit E - Form of Market Maker Agreement Referenced in Exhibit A
2
[White & Case Draft of 9/21/07]
EXHIBIT B
SHAREHOLDERS AGREEMENT
SHAREHOLDERS AGREEMENT (this "Agreement"), dated as of _______ __, 200_,
among [New Dana Corporation], a [_______] corporation (the "Company"),(1)
Appaloosa Management, L.P., a Delaware limited partnership ("Appaloosa"), and
______ , a __________ (together with any Qualified Purchaser Transferee thereof,
"Purchaser").(2)
A. Dana Corporation, a Virginia corporation and the predecessor to the
Company for certain Bankruptcy Code purposes ("Dana"), entered into an
Investment Agreement, dated as of September [ ], 2007 (the "Investment
Agreement"), with Appaloosa, Purchaser and the other parties thereto, pursuant
to which, among other things, on the terms and subject to the conditions
thereof, Purchaser has agreed to acquire up to 2,500,000 shares of the Company's
4.0% Series A Convertible Preferred Stock, par value $0.01 per share (the
"Series A Preferred"), and up to 5,000,000 shares of the Company's 4.0% Series B
Convertible Preferred Stock, par value $0.01 per share (the "Series B
Preferred"). The Series A Preferred and Series B Preferred are convertible into
shares of the Company's common stock, par value $0.01 per share (the "Common
Stock"), on the terms set forth in the Articles (defined below).
B. The Series A Preferred owned by Purchaser constitutes 100% of the
shares of Series A Preferred outstanding on the date hereof, and the Series B
Preferred owned by Purchaser constitutes ___% of the shares of Series B
Preferred outstanding on the date hereof. Together, the shares of Series A
Preferred and Series B Preferred owned by Purchaser constitute ___% of the
shares of the Common Stock outstanding on the date hereof, on an as-converted
basis.
C. The Company, Purchaser and Appaloosa desire to make certain provisions
in respect of their relationship.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto agree
as follows:
I. DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere herein,
the following terms have the following meanings when used herein:
"Affiliate" has the meaning given to such term in the Articles;
provided,
- ----------
(1) Corporate name/jurisdiction of reorganized company to be determined.
(2) Note: Standby Purchasers (if any) to be added as parties and throughout
document in appropriate places.
however, that as such term is used in this Agreement, the members of the
Investor Group will not be included as Affiliates of the Company.
"Articles" means the Company's Articles of Serial Designation of 4.0%
Series A Convertible Preferred Stock and 4.0% Series B Convertible Preferred
Stock, in the form attached hereto as Exhibit A.
"Assumption Agreement" means an agreement in writing in substantially
the form of Exhibit B hereto pursuant to which the party thereto agrees to be
bound by the terms and provisions of this Agreement.
"Bankruptcy Code" means chapter 11 of title 11 of the United States
Code.
"Bankruptcy Court" means the United States Bankruptcy Court for the
Southern District of New York.
A Person will be deemed the "beneficial owner" of, and will be deemed
to "beneficially own," and will be deemed to have "beneficial ownership" of:
(i) any securities that such Person or any of such Person's
Affiliates is deemed to "beneficially own" within the meaning of Rule 13d-3
under the Exchange Act, as in effect on the date of this Agreement and any
securities deposited into a trust established by the Person the sole
beneficiaries of which are the shareholders of the Person; and
(ii) any securities (the "underlying securities") that such Person
or any of such Person's Affiliates has the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (written or oral),
or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise (it being understood that such Person
will also be deemed to be the beneficial owner of the securities
convertible into or exchangeable for the underlying securities); and
(iii) any securities beneficially owned by persons that are part of a
"group" (within the meaning of Rule 13d-5(b) under the Exchange Act) with
such Person.
"Board" means the Board of Directors of the Company.
"Chapter 11 Plan" means the joint plan of reorganization filed by Dana
and its debtor subsidiaries with the Bankruptcy Court.
"Charter" means the Company's Restated Articles of Incorporation, as
in effect from time to time, together with the Articles.
"Company Sale" has the meaning given to such term in the Articles.
"Current Market Price" has the meaning given to such term in the
Articles.
"Director Designation Termination Date" means the date on which shares
of Series A Preferred having an aggregate Series A Liquidation Preference of at
least $125 million are no longer owned by Purchaser.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" has the meaning given to such term in the
Articles.
"Indebtedness" means all indebtedness of a Person, including without
limitation obligations for borrowed money, lease financing and indebtedness of
another Person guaranteed by such Person or secured by the assets of such
Person.
"Independent Director" has the meaning given to such term in the
Articles.
"Investor Group" means Purchaser and its Affiliates, including
Appaloosa.(3)
"Person" has the meaning given to such term in the Articles.
"Purchaser Designees" means the directors of the Company who were
designated for nomination pursuant to Article III of this Agreement.
"Qualified Purchaser Transferee" means an Affiliate of Purchaser that
executes an Assumption Agreement, but only to the extent that such Qualified
Purchaser Transferee is a corporation or other organization, whether
incorporated or unincorporated, of which either Purchaser or Appaloosa directly
or indirectly owns or controls 100% of the securities or other interests having
by their terms ordinary voting power to elect the board of directors (or others
performing similar functions) of such corporation or other organization.(4)
"Representatives" means, with respect to a Person, such Person's
directors, officers, employees, agents, counsel, consultants, accountants,
experts, auditors, examiners, financial advisors or other representatives,
agents or professionals.
"Series A Liquidation Preference" means $100.00 per share, as adjusted
from time to time in accordance with the Articles.
"Subsidiary" means, when used with respect to any Person, any
corporation or other organization, whether incorporated or unincorporated, of
which such Person directly or indirectly owns or controls more than 50% of the
securities or other interests having by their terms ordinary voting power to
elect a majority of the board of directors or others performing similar
functions.
"Voting Securities" means the Common Stock, all other equity
securities
- ----------
(3) Note: see footnote 2.
(4) Note: see footnote 2.
entitled to vote in the election of directors of the Company and all other
securities convertible into, exchangeable for or exercisable for any such
securities (whether immediately or otherwise), including the Series A Preferred
and the Series B Preferred.
II. STANDSTILL
2.1 Limitation During Standstill Period. Subject to Section 2.2,
during the period commencing on the date of this Agreement and ending on the
tenth anniversary thereof, none of Purchaser, Appaloosa or any of their
respective Affiliates will, and none of their respective Representatives will on
their behalf, publicly propose or publicly announce or otherwise disclose
publicly an intent to propose, or enter into an agreement with any Person for,
singly or with any other Person or directly or indirectly, (a) any form of
business combination, acquisition or other transaction relating to the Company
or any of its Subsidiaries, (b) any form of restructuring, recapitalization or
similar transaction with respect to the Company or any of its Subsidiaries, or
(c) any demand, request or proposal to amend, waive or terminate any provision
of this Article II, nor except as aforesaid during such period will Purchaser,
Appaloosa or any of their respective Affiliates or any of their Representatives
on their behalf (i) acquire, or offer, propose or agree to acquire, by purchase
or otherwise, subject to applicable securities laws, any Voting Securities, (ii)
make, or in any way participate in, any solicitation of proxies or votes with
respect to any such Voting Securities (including by the execution of action by
written consent), become a participant in any election contest with respect to
the Company or any of its Subsidiaries, seek to influence any person with
respect to any such Voting Securities, make a shareholder proposal with respect
to the Company or its Subsidiaries or demand a copy of any the Company's or its
Subsidiaries' lists of shareholders or other books and records, (iii)
participate in or encourage the formation of any partnership, syndicate or other
group which owns or seeks or offers to acquire beneficial ownership of any such
Voting Securities or which seeks to affect control of the Company or any of its
Subsidiaries or has the purpose of circumventing any provision of this
Agreement, (iv) otherwise act, alone or in concert with others (including by
providing financing for another person), to seek or to offer to control or
influence, in any manner, the Company's and its Subsidiaries' management, board
of directors or policies, or (v) make any proposal or other communication
designed to, or which could be reasonably expected to, compel the Company to
make a public announcement thereof in respect of any matter referred to in this
Section 2.1.
2.2 Exceptions. Notwithstanding anything to the contrary set forth
in Section 2.1, nothing in Section 2.1 will limit or affect or be deemed to
apply to a Purchaser Designee's actions taken in connection with such Purchaser
Designee's service as a director of the Company, and nothing herein will
prohibit Purchaser, Appaloosa or any of their respective Affiliates from:
(a) acquiring the shares of Series A Preferred and Series B Preferred
pursuant to the Investment Agreement and the Chapter 11 Plan, and any
Common Stock received upon conversion thereof (or any dividends or
distributions received thereon);
(b) acquiring beneficial ownership of any Voting Securities, unless
following such acquisition Purchaser, Appaloosa and their respective
Affiliates would beneficially own more than 30% of the Voting Securities
issued and outstanding at such time;
(c) taking any action with the approval of a majority of the members
of the Board; or
(d) in the event a majority of the members of the Board who are not
Purchaser Designees approves a transaction described in Section 2.1(a) or
(b) above, (i) voting to approve such transaction, subject to the
restrictions contained in Section 4.3, and (ii) selling any securities of
the Company owned by the Investor Group in connection with, and pursuant to
the terms of, such transaction.
III. BOARD REPRESENTATION
3.1 Series A Preferred Directors. (a) The holders of the Series A
Preferred have the director election rights set forth in Section 6(b) and (c) of
the Articles for the time periods and to the extent set forth therein.
(b) Beginning with the Company's first annual meeting of shareholders
to elect directors following the date hereof (the "Director Designation
Commencement Date"), the Company will ensure that Purchaser may designate
nominees for each of the three directors to be elected by the Series A Preferred
pursuant to Section 6(b)(i) of the Articles, including following the removal of
any such director. In case of any vacancy (other than by removal) in the office
of a Purchaser Designee, the vacancy will be filled with a designee of Purchaser
by the remaining Purchaser Designees.
(c) From and after the Director Designation Termination Date,
Purchaser will cause any Purchaser Designees to resign promptly after the
Company so requests.
(d) Upon the election of the initial Board, the Board shall cause to
be established a Nominating and Corporate Governance Committee of the Board (the
"Nominating and Corporate Governance Committee"). Following the initial election
of the Executive Chairman and the Chief Executive Officer (each of whom shall be
reasonably acceptable to Appaloosa), the Executive Chairman and Chief Executive
Officer shall be nominated for election to the Board by the Nominating and
Corporate Governance Committee. Such nominee shall be elected to the Board by
the holders of the Common Stock and the Preferred Stock, voting as a class. The
Executive Chairman of the Board shall be selected as described in Section 3.1(f)
below.
(e) After the initial selection of the Series A Directors, until the
Director Designation Termination Date, (a) holders of the Series A Preferred
shall continue to directly elect (including removal and replacement) the Series
A Directors and (b) the number of directors on the Board may not be increased.
The rights of holders of Series A Preferred described in this Section 3.1(e) are
referred to as "Series A Board Rights".
Upon the Director Designation Termination Date, the Series A Directors shall
serve out their remaining term and thereafter be treated as ordinary Directors.
(f) The initial Executive Chairman shall be selected by a selection
committee (the "Selection Committee") comprised of one representative of
Appaloosa, one representative of the Creditors Committee and one representative
of the Standby Purchasers (other than Appaloosa). The Executive Chairman shall
be approved by a majority vote of the Selection Committee (such majority to
include the Appaloosa representative). Any successor Executive Chairman shall be
selected by the Nominating and Governance Committee, subject (but only until the
Director Designation Termination Date) to the approval of Appaloosa. Upon
approval, such candidate shall be recommended by the Nominating and Corporate
Governance Committee to the Board for appointment as the Executive Chairman and
nomination to the Board. Holders of the Series A Preferred will vote on the
candidate's election to the Board on an as-converted basis together with holders
of Common Stock. The Executive Chairman shall be a full-time employee of the
Company with his or her principal office in the Company's world headquarters in
Toledo, Ohio and shall devote substantially all of his or her business activity
to the business affairs of the Company. The Executive Chairman shall cause the
Company to and the Company shall be obligated to meaningfully consult with the
representatives of holders of the Series A Preferred Shares with respect to the
annual budget and material modifications thereto prior to the time it is
submitted to the Board for approval.
(g) Purchaser shall have the non-exclusive right to propose, pursuant
to written notice to the Board, the termination of (i) the Executive Chairman,
(ii) the Chief Executive Officer and/or (iii) the Chief Financial Officer, in
each case, subject to a vote of the Board. If Purchaser proposes such
termination of the Executive Chairman, the Chief Executive Officer or the Chief
Financial Officer, the Board shall convene and vote on such proposal within ten
(10) days of the Board's receipt of written notice regarding such proposed
termination; provided, that the then current Executive Chairman and the then
current Chief Executive Officer of the Corporation shall not be entitled to vote
on any proposal made pursuant to this provision for the termination of the
Executive Chairman, the Chief Executive Officer or the Chief Financial Officer
of the Corporation.
3.2 Effectiveness. This Article III (other than Section 3.1(f))
will terminate without further action on the Director Designation Termination
Date.
IV. CERTAIN VOTING RIGHTS
4.1 Purchaser Approval Rights. The Company may not, and may not
permit its Subsidiaries to, take any of the following actions without
Purchaser's prior written consent; provided, however, that if such written
consent is withheld by Purchaser, the Company may, solely with respect to an
action described below in Sections 4.1(a), 4.1(c), 4.1(d)(ii) (if such action
would not adversely impact Purchaser's rights or its investment in the Company),
4.1(e), 4.1(f) or 4.1(g), notwithstanding the withholding of such written
consent, take any such actions that are first approved by the affirmative vote
or consent of holders of not less than two-thirds of the Voting Securities
that are not held by Appaloosa, Purchaser or any of their respective Affiliates:
(a) enter into any transaction with any director or officer of the
Company, or any holder of 10% or more of the Voting Securities outstanding
at such time, except for (i) compensation or incentive arrangements with
officers or directors that have been approved by the Board or Compensation
Committee thereof and (ii) transactions that are not material to the
Company;
(b) issue any security that ranks senior to or on parity with the
Series A Preferred (or the Series B Preferred, if any shares of Series B
Preferred are outstanding and owned by Purchaser) as to dividend rights and
rights on liquidation, winding up and dissolution of the Company (including
without limitation additional shares of Series A Preferred or Series B
Preferred), or issue any options, rights, warrants or securities
convertible into or exercisable or exchangeable for such shares; provided,
however, that the written consent of Purchaser will not be necessary for
the Company to authorize or issue any Indebtedness incurred to refinance,
extend, renew, refund, repay, prepay, redeem, defease, exchange or replace
(collectively, "Refinancings") any Indebtedness of the Company existing at
the applicable time, as long as such Refinancings are (i) on prevailing
market terms with respect to the economics thereof in all material respects
and (ii) are on substantially the same terms (including without limitation
with respect to obligors, tenor, security and ranking) as the Indebtedness
to which such Refinancings relate with respect to other terms;
(c) issue or authorize the issuance of any capital stock of the
Company (or rights to acquire any capital stock of the Company) for a price
per share that is less than (A) if such issuance is for Common Stock or
options, rights, warrants or securities of the Company which are
convertible into or exercisable or exchangeable for Common Stock of the
Company ("Common Stock Derivatives"), the Current Market Price for the
Common Stock at the time of such issuance, or (B) if such issuance is for
capital stock of the Company or rights to acquire capital stock of the
Company other than Common Stock or Common Stock Derivatives, the Fair
Market Value of such capital stock or rights to acquire such capital;
(d) (i) amend, alter or repeal any amendment to the Company's By-Laws
that materially changes the rights of any member of the Investor Group or
any Qualified Purchaser Transferee (in such Person's capacity as a holder
of Series A Preferred) or the Company's shareholders generally or (ii)
authorize, adopt or approve an amendment to, or repeal any provision of,
the Charter or the Articles;
(e) take any action that results in the purchase or redemption by the
Company or any subsidiary of the Company of any equity securities of the
Company involving aggregate cash payments by the Company in excess of $10
million during any 12-month period after the date hereof; provided,
however, that the written consent of Purchaser will not be required for
(i) the repurchase of any
equity securities from any individual whose employment with the Company is
terminated as long as such repurchase is approved by the Board (by majority
vote of all members) or (ii) cashless exercise of, or surrender of shares
for payment of withholding tax in connection with, any option, right,
warrant or other security that is convertible into or exchangeable for
Common Stock in accordance with the terms of its issuance;
(f) effect a Company Sale;
(g) voluntarily or involuntarily liquidate, wind up or dissolve; or
(h) except pursuant to Section 3(a) of the Articles, pay or declare
any dividend in cash on any shares of capital stock that ranks junior to or
on parity with the Series A Preferred, including Series B Preferred.
4.2 Termination of Purchaser Approval Rights. The provisions of
Sections 4.1(a) - (h) will terminate upon the earlier to occur of the (a) third
anniversary of the date hereof and (b) the date on which Purchaser no longer
owns shares of Series A Preferred having an aggregate Series A Liquidation
Preference of at least $125 million.
4.3 Certain Limitations. Without limiting any other provision hereof,
Purchaser(5) will, and will cause each other member of the Investor Group to, at
any meeting of holders of Voting Securities, however such meeting is called and
regardless of whether such meeting is a special or annual meeting of
shareholders of the Company, or at any adjournment thereof, or in connection
with any written consent of shareholders of the Company, vote, or cause to be
voted, the Investor Group's Voting Securities in excess of 40% of the issued and
outstanding Voting Securities (the "Voting Threshold") in the same proportion
that the Company's other shareholders vote their Voting Securities with respect
to any proposal submitted to the Company's shareholders for a vote, so that, as
a result, the percentage of the Investor Group's Voting Securities in excess of
the Voting Threshold that are voted in favor of such proposal will equal the
percentage of the outstanding Voting Securities held by all other Company
shareholders voted in favor of such proposal, and the percentage of the Investor
Group's Voting Securities in excess of the Voting Threshold that are voted
against such proposal will equal the percentage of the outstanding Voting
Securities held by all other Company shareholders voted against such proposal.
4.4 Certain Transactions. Except as expressly contemplated by this
Agreement, the Investment Agreement or the documents referred to herein or
therein, without the approval of a majority of the members of the Board who are
not Purchaser Designees, none of Appaloosa, Purchaser or any of their respective
Affiliates may enter into any transaction or agreement with the Company or any
Subsidiary of the Company or any amendment or waiver of this Agreement.
- ----------
(5) Note: see footnote 2.
V. MISCELLANEOUS
5.1 Notice of Certain Matters. Without limiting Section 8 of the
Articles, if Purchaser at any time sells, assigns, transfers, pledges,
hypothecates or otherwise encumbers or disposes of in any way all or any part of
an interest in any shares of Series A Preferred (a "Transfer"), then Purchaser
will, as promptly as practicable but in any event within five business days of
such Transfer, provide notice to the Company in accordance with Section 5.3
stating (a) the date on which such Transfer occurred and (b) the name and
contact information of such Transferee.
5.2 Specific Performance. The parties agree that any breach by any of
them of any provision of this Agreement would irreparably injure the Company or
Purchaser and Appaloosa, as the case may be, and that money damages would be an
inadequate remedy therefor. Accordingly, the parties agree that the other
parties will be entitled to one or more injunctions enjoining any such breach
and requiring specific performance of this Agreement and consent to the entry
thereof, in addition to any other remedy to which such other parties are
entitled at law or in equity.
5.3 Notices. Any notice or other communication required to be given
hereunder will be in writing and sent by reputable courier service (with proof
of service), by hand delivery, or by email or facsimile (followed on the same
day by delivery by courier service (with proof of delivery) or by hand
delivery), addressed as follows:
If to the Company, to:
[New Dana Corporation]
4500 Dorr Street
Toledo, Ohio 43615
Attention: General Counsel and Secretary
Fax: (419)535-4544
with a copy to:
Jones Day
222 East 41st Street
New York, New York 10017
Attention: Corinne Ball
Email: cball@jonesday.com
Fax: (212)755-7306
and
Attention: Marilyn W. Sonnie
Email: mwsonnie@jonesday.com
Fax: (212)755-7306
If to Purchaser or Appaloosa, to:
Appaloosa Management L.P.
26 Main Street
Chatham, NJ 07928
Attention: James Bolin
Email: j.bolin@amlp.com
Fax: (973)701-7055
with a copy to:
White & Case LLP
Wachovia Financial Center
200 South Biscayne Boulevard
Suite 4900
Miami, Florida 33131-2352
Attention: Thomas E. Lauria (tlauria@whitecase.com)
Gerard Uzzi (guzzi@whitecase.com)
Fax: (305) 358-5744/5766
And
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Attention: John Reiss (jreiss@whitecase.com)
Steven Teichman (steichman@whitecase.com)
Fax: 212-354-8113
or to such other address as any party may specify by written notice so given,
and such notice will be deemed to have been delivered as of the date so emailed,
telecommunicated or personally delivered.
5.4 Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder will be assigned by any party hereto
(whether by operation of law or otherwise) without the prior written consent of
the other parties, except that Purchaser(6) may transfer any of its rights under
Article III or IV to any Qualified Purchaser Transferee to which it transfers
shares of Series A Preferred without violating the restrictions on transfer of
the Series A Preferred set forth in Section 8 of the Articles; provided,
however, that neither Purchaser nor Appaloosa will dispose of a majority of the
voting power of such Qualified Purchaser Transferee in any transaction or series
of transactions unless such shares of Series A Preferred have been transferred
and the rights under this Agreement have been assigned back, in each
- ----------
(6) Note: see footnote 2.
case to the original transferor thereof. Subject to this Section 5.4, this
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective successors and assign. Notwithstanding anything contained
in this Agreement to the contrary, nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the parties hereto or,
if applicable, any Qualified Purchaser Transferee or their respective heirs,
successors, executors, administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
5.5 Entire Agreement. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties with respect thereto
(including the Confidentiality Agreement, dated July 21, 2007, between Appaloosa
and the Company).
5.6 Amendment. Subject to applicable law, this Agreement may only be
amended by an instrument in writing signed by the Company and Appaloosa (who
will have the authority to bind Purchaser and all other members of the Investor
Group).
5.7 Governing Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York, without regard to its
conflict of laws principles.
5.8 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
will be an original, but all such counterparts will together constitute one and
the same instrument. Each counterpart may consist of a number of copies hereof
each signed by less than all, but together signed by all of the parties hereto.
A facsimile copy of a signature page will be deemed to be an original signature
page.
5.9 Headings. Headings of the Articles and Sections of this Agreement
are for convenience of the parties only, and will be given no substantive or
interpretive effect whatsoever.
5.10 Waivers. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including without limitation any investigation by or
on behalf of any party, will be deemed to constitute a waiver by the party
taking such action of compliance with any of the covenants or agreements
contained in this Agreement. The waiver by any party hereto of a breach of any
provision hereunder will not operate or be construed as a waiver of any prior or
subsequent breach of the same or any other provision hereunder. Any party hereto
may (a) extend the time for the performance of any of the obligations or other
acts of the other parties hereto and (b) waive compliance with any of the
agreements or conditions contained herein. Any such extension or waiver will be
valid only if set forth in an instrument in writing signed by the party or
parties to be bound thereby.
5.11 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction will, as to that jurisdiction, be
ineffective to
the extent of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision will be interpreted to be only so
broad as is enforceable.
5.12 Calculation of Beneficial Ownership. Any provision in this
Agreement that refers to a percentage of Common Stock or Voting Securities will
be calculated based on the aggregate number of issued and outstanding securities
at the time of such calculation (on an as-converted basis, in the case of Voting
Securities), but will not include any such securities issuable upon any options
or warrants that are exercisable for such securities.
5.13 Jurisdiction; Consent to Service of Process. (a) Each party
hereby irrevocably and unconditionally submits, for itself and its property, to
the exclusive jurisdiction of the Supreme Court of the State of New York located
in New York, New York or the United States District for the Southern District of
New York (as applicable, a "New York Court"), and any appellate court from any
such court, in any action, suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby, or for recognition or
enforcement of any judgment resulting from any such suit, action or proceeding,
and each party hereby irrevocably and unconditionally agrees that all claims in
respect of any such suit, action or proceeding may be heard and determined in
the New York Court.
(b) It will be a condition precedent to each party's right to bring
any such suit, action or proceeding that such suit, action or proceeding, in the
first instance, be brought in a New York Court, and if each such court refuses
to accept jurisdiction with respect thereto, such suit, action or proceeding may
be brought in any other court with jurisdiction.
(c) No party may move to (i) transfer any such suit, action or
proceeding from a New York Court to another jurisdiction, (ii) consolidate any
such suit, action or proceeding brought in a New York Court with a suit, action
or proceeding in another jurisdiction, or (iii) dismiss any such suit, action or
proceeding brought in a New York Court for the purpose of bringing the same in
another jurisdiction.
(d) Each party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, (i) any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in a New York Court,
(ii) the defense of an inconvenient forum to the maintenance of such suit,
action or proceeding in any such court, and (iii) the right to object, with
respect to such suit, action or proceeding, that such court does not have
jurisdiction over such party. Each party irrevocably consents to service of
process in any manner permitted by law.
5.14 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN
EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT.
5.15 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement will be
construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof will arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
5.16 Confidentiality. (a) The Investor Group will maintain, and
Purchaser will cause each member of the Investor Group and each of its and their
respective Representatives to maintain, the confidentiality of all material
non-public information obtained by any member of the Investor Group from the
Company or any of its Subsidiaries or its or their respective Representatives (a
"Company Person"), and not to use such information for any purpose other than
(i) the evaluation and protection of the investment by Purchaser in the Company,
(ii) the exercise by Purchaser of any of its rights under this Agreement, and
(iii) the exercise by the Purchaser Designees of their fiduciary duties as
members of the Board.
(b) Notwithstanding the foregoing, the confidentiality obligations of
Section 5.16(a) will not apply to information obtained other than in violation
of this Agreement:
(i) which any member of the Investor Group or any of its
Representatives is required to disclose by judicial or administrative
process, or by other requirements of applicable law or regulation or
any governmental authority; provided, however, that, where and to the
extent practicable, such disclosing party (A) gives the Company
reasonable notice of any such requirement and, to the extent
protective measures consistent with such requirement are available,
the opportunity to seek appropriate protective measures and (B)
reasonably cooperates with the Company (at the Company's expense) in
attempting to obtain such protective measures;
(ii) which becomes available to the public other than as a result
of a breach of Section 5.16(a); or
(iii) which has been provided to a member of the Investor Group
or any of its Representatives by a source other than a Company Person,
unless either Purchaser or such member of the Investor Group knows
that the source of such information was bound by a confidentiality
agreement with, or other contractual, legal or fiduciary objections of
confidentiality to, the Company or any other Person with respect to
such information.
5.17 Acknowledgment of Securities Laws. Purchaser hereby acknowledges
that it is aware, and that it will advise the other members of the Investor
Group and its and their respective Representatives who are informed as to the
material non-public information that is the subject of Section 5.16, that the
United States securities laws prohibit any Person who has received from an
issuer material, non-public information from purchasing or selling securities of
such issuer or from communication of such information to any other Person under
circumstances in which it is reasonably foreseeable that such Person is likely
to purchase or sell such securities.
5.18 Premiums Upon a Change of Control. None of Appaloosa,
Purchaser(7) or any of their respective Affiliates may receive, or be entitled
to receive, any premium, payment or fee from any Person (a "Payor") in
connection with voting in favor of, or transferring any Voting Securities in
connection with, a transaction that results in (either alone or in connection
with a series of related transactions) a Company Sale (as defined in the
Articles), unless such amount is shared with, or payable by such Payor to, all
holders of the same class and/or series of capital stock of the Company in
respect of which such amount is paid to Appaloosa, Purchaser and their
respective Affiliates, on a pro rata basis; provided, that this restriction
shall not prohibit the reimbursement of expenses incurred by any holder of
Series A Preferred or Series B Preferred and shall not prohibit the payment of
fees by the Company to any holder of Series A Preferred or Series B Preferred if
the Company has engaged such holder or its Affiliates as an advisor or
consultant in connection with any transaction.
[Signature page follows]
- ----------
(7) Note: see footnote 2.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
[NEW DANA CORPORATION]
By:
------------------------
Name
Title:
APPALOOSA MANAGEMENT L.P.
By:
------------------------
Name
Title: Authorized Person
[PURCHASER]
By:
------------------------
Name
Title: Authorized Person
EXHIBIT A
ARTICLES
[To be attached]
EXHIBIT B
FORM OF ASSUMPTION AGREEMENT
The undersigned hereby agrees, effective as of the date hereof, to become a
party to, and be bound by the provisions of, the Shareholders Agreement (the
"Agreement") dated as of _________ ___, 200_ by and among [New Dana
Corporation], Appaloosa Management L.P. and [Purchaser], and for all purposes of
the Agreement, the undersigned will be a "Qualified Purchaser Transferee" (as
defined in the Agreement). Without limiting the foregoing, the undersigned
acknowledges that the shares of Series A Preferred (as defined in the Agreement)
transferred to the undersigned in connection herewith are subject to the
transfer restrictions set forth in the Articles (as defined in the Agreement).
The address and facsimile number to which notices may be sent to the undersigned
is as follows:
- ---------------------------------
- ---------------------------------
- ---------------------------------
Facsimile No.
-------------------
[Name]
By:
------------------------
Name
Title:
[White & Case Draft of 9/21/07]
EXHIBIT A
[NEW DANA CORPORATION]
ARTICLES OF SERIAL DESIGNATION OF
4.0% SERIES A CONVERTIBLE PREFERRED STOCK AND
4.0% SERIES B CONVERTIBLE PREFERRED STOCK(1)
The terms of the authorized 4.0% Series A Convertible Preferred Stock, par
value $0.01 per share (the "Series A Preferred"), and 4.0% Series B Convertible
Preferred Stock, par value $0.01 per share (the "Series B Preferred"), of [New
Dana Corporation], a corporation organized and existing under the State of
[_________] (the "Corporation"), are as set forth below:
1. Designation. There is hereby created out of the authorized and unissued
shares of Preferred Stock of the Corporation two new series of Preferred Stock
designated as the Series A Preferred and the Series B Preferred. The number of
shares constituting the Series A Preferred will be 2,500,000, and the number of
shares constituting the Series B Preferred will be 5,000,000.
2. Ranking. The Series A Preferred and Series B Preferred will, with
respect to payment of dividends and to distributions in the event of the
Corporation's voluntary or involuntary liquidation, winding up or dissolution (a
"Liquidation"), rank (i) senior to the Corporation's Series A Junior
Participating Preferred Stock and all classes of Common Stock and to each other
class of Capital Stock of the Corporation or series of Preferred Stock of the
Corporation established hereafter by the Board, the terms of which do not
expressly provide that such class or series ranks senior to, or on a parity
with, the Series A Preferred and Series B Preferred as to dividend rights and
rights on a Liquidation (collectively referred to as "Junior Stock"), (ii) on a
parity with each class of Capital Stock of the Corporation or series of
Preferred Stock of the Corporation established hereafter by the Board, the terms
of which expressly provide that such class or series will rank on a parity with
the Series A Preferred and Series B Preferred as to dividend rights and rights
on a Liquidation (collectively referred to as "Parity Stock"), and (iii) junior
to each class of Capital Stock of the Corporation or series of Preferred Stock
of the Corporation established hereafter by the Board, the terms of which
expressly provide that such class or series will rank senior to the Series A
Preferred or Series B Preferred as to dividend rights and rights on a
Liquidation. For the avoidance of doubt, the Series A Preferred and Series B
Preferred will rank on a parity with each other as to dividend rights and rights
on a Liquidation.
- ----------
(1) To be conformed, as necessary, to reflect the name and jurisdiction of the
reorganized company. The Charter and By-Laws will also be amended to
reflect changes in par value, to authorize additional preferred stock to
permit the issuance of the Series A Preferred and Series B Preferred, to
permit preemptive rights, to increase the number of directors and to allow
a special meeting of shareholders to be held at the request of shareholders
owning not less than 20% of the issued and outstanding voting shares,
including taking into account the preferred shares on an as converted
basis.
3. Dividends. (a) So long as any shares of Series A Preferred or Series B
Preferred are outstanding, the holders of such shares will be entitled to
receive out of the Corporation's assets legally available therefor, when, as and
if declared by the Board, preferential dividends at a rate per annum equal to
4.0% (the "Dividend Rate") on the then-effective Liquidation Preference per
share for such share hereunder, payable in cash. Subject to Section 5(f), such
dividends with respect to each share of Series A Preferred and Series B
Preferred, as applicable, will be fully cumulative and will begin to accrue from
the Issue Date of such share, whether or not such dividends are authorized or
declared by the Board and whether or not in any Dividend Period or Dividend
Periods there are assets of the Corporation legally available for the payment of
such dividends.
(b) Dividends on the shares of Series A Preferred and Series B Preferred
will be payable quarterly in equal amounts (subject to Section 3(d) hereunder
with respect to shorter periods, including the first such period with respect to
newly issued shares of Series A Preferred or Series B Preferred) in arrears on
each Dividend Payment Date, in preference to and in priority over dividends on
any Junior Stock, commencing on the first Dividend Payment Date after the Issue
Date of such share of Series A Preferred or Series B Preferred, as applicable.
Subject to Section 3(f), such dividends will be paid to the holders of record of
the shares of Series A Preferred and Series B Preferred, as applicable, as they
appear at the close of business on the applicable Dividend Record Date. The
amount payable as dividends on such Dividend Payment Date will be payable in
cash, unless such payment is prohibited under statutory law.
(c) All dividends paid with respect to shares of Series A Preferred and
Series B Preferred pursuant to Section 3(a) will be paid pro rata to the holders
thereof and will first be credited against the dividends accrued with respect to
the earliest Dividend Period for which dividends have not been paid. Dividend
payments will be aggregated per holder and will be made to the nearest cent
(with $0.005 being rounded upward).
(d) The amount of dividends payable per share of Series A Preferred and
Series B Preferred for each full Dividend Period will be computed by dividing
the annual dividend amount for such share by four. The amount of dividends
payable for the initial Dividend Period, or any other period shorter or longer
than a full Dividend Period, on a share of Series A Preferred or Series B
Preferred, as applicable, will be computed on the basis of twelve 30-day months
and a 360-day year. No interest will accrue or be payable in respect of unpaid
dividends.
(e) Any reference to "distribution" in this Section 3 will not be deemed to
include any distribution made in connection with any Liquidation.
(f) Notwithstanding any other provision hereof, in no event will a dividend
payable under Section 3(a) be paid in respect of any share of Series A Preferred
or Series B Preferred that has been converted prior to the applicable Dividend
Payment Date pursuant to Section 5(b) or (c) if such dividend was included in
the calculation of clause (i) of Section 5(b) or 5(c), as applicable.
2
4. Liquidation Rights. (a) In the event of any Liquidation, the holders of
shares of Series A Preferred and Series B Preferred then outstanding will be
entitled to be paid out of the assets of the Corporation available for
distribution to its shareholders, whether such assets are capital, surplus,
earnings or otherwise, before any payment or declaration and setting apart for
payment of any amount will be made in respect of any shares of Junior Stock, an
amount with respect to each share of Series A Preferred and Series B Preferred
outstanding equal to the then-effective Liquidation Preference per share for
such shares, plus all declared or accrued and unpaid dividends in respect
thereof to the date of final distribution. If upon any Liquidation, the assets
to be distributed among the holders of Series A Preferred and Series B Preferred
are insufficient to permit the payment to such shareholders of the full
preferential amounts thereof, then the entire assets of the Corporation to be
distributed will be distributed ratably among the holders of Series A Preferred,
Series B Preferred and Parity Stock, based on the full preferential amounts for
the number of shares of Series A Preferred, Series B Preferred and Parity Stock
held by each holder.
(b) After payment to the holders of Series A Preferred and Series B
Preferred of the amounts set forth in Section 4(a) hereof, such holders will not
be entitled to any further participation in any distribution of the
Corporation's assets and the entire remaining assets and funds of the
Corporation legally available for distribution, if any, will be distributed
among the holders of any Capital Stock entitled to a preference over the Common
Stock in accordance with the terms thereof and, thereafter, to the holders of
Common Stock.
(c) No funds are required to be set aside to protect the Liquidation
Preference of the shares of Series A Preferred and Series B Preferred, although
the applicable Liquidation Preference will be substantially in excess of the par
value of the shares of Series A Preferred and Series B Preferred.
(d) For purposes of this Section 4, neither a merger, consolidation,
business combination, reorganization or recapitalization of the Corporation with
or into any corporation, nor a sale, lease or other disposition of all or
substantially all of the assets of the Corporation and its subsidiaries (on a
consolidated basis) will be deemed a Liquidation.
5. Conversion. The Series A Preferred and Series B Preferred are
convertible into shares of Common Stock as follows:
(a) Conversion Price. The initial Conversion Price of each share of Series
A Preferred and Series B Preferred will be determined as set forth in the
definition of "Conversion Price" in Section 13 and the defined terms used
therein. In addition to Common Stock, holders will receive, upon conversion,
rights under the Corporation's Rights Agreement, dated as of April 25, 1996,
unless, prior to conversion, the rights have expired, terminated or been
redeemed or unless the rights have separated from the Common Stock. The
Conversion Price will be subject to adjustment as provided in Section 5(h).
3
(b) Optional Conversion Right. At any time after the six-month anniversary
of the Original Issue Date, but subject to Section 8, at the option of the
holder thereof, any share of Series A Preferred or Series B Preferred may be
converted into such number of fully paid and non-assessable shares of Common
Stock that is obtained by dividing (i) the then-effective Liquidation Preference
plus all accrued but unpaid dividends under Section 3(a) for such share by
(ii) the Conversion Price (as in effect on the Conversion Date).
(c) Mandatory Conversion. If the Closing Sale Price of the Common Stock has
exceeded an amount equal to 1.4 multiplied by the Distributable Market Equity
Value Per Share (such product, rounded up to the nearest cent, and subject to
equitable adjustment in the event of any stock dividends, splits, reverse
splits, combinations, reclassifications and similar actions, the "Mandatory
Conversion Trigger Price"), for at least 20 consecutive Trading Days commencing
from or after the fifth anniversary of the Original Issue Date, then the
Corporation may, at its option at any time after any such 20 consecutive Trading
Day period, cause all but not less than all of the outstanding shares of Series
A Preferred and Series B Preferred to convert into such number of fully paid and
non-assessable shares of Common Stock that is obtained by dividing (i) the
then-effective Liquidation Preference of such shares plus any accrued but unpaid
dividends under Section 3(a) for such shares by (ii) the Conversion Price (as in
effect on the Conversion Date).
(d) Mechanics for Exercise of Conversion Rights. In order to exercise the
optional conversion right provided for in Section 5(b), the holder of each share
of Series A Preferred or Series B Preferred to be converted will (i) surrender
the certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, to the office of the Transfer Agent or (ii) deliver
written notice to the Corporation or the Transfer Agent that such certificate
has been lost, stolen or destroyed and execute an agreement satisfactory to the
Corporation to indemnify the Corporation from any loss incurred by it in
connection with such certificates (the actions taken pursuant to clause (i) or
(ii), a "Surrender"), accompanied, in either case, by written notice to the
Corporation that the holder thereof elects to convert all or a specified whole
number of shares of Series A Preferred or Series B Preferred, as applicable.
Unless the shares of Common Stock issuable on conversion are to be issued in the
same name as the name in which such shares of Series A Preferred or Series B
Preferred, as applicable, are registered, each share Surrendered for conversion
must be accompanied by instruments of transfer, in form reasonably satisfactory
to the Corporation, duly executed by the holder or such holder's duly authorized
attorney and an amount sufficient to pay any transfer or similar tax (or
evidence reasonably satisfactory to the Corporation demonstrating that such
taxes have been paid). In the event the Corporation elects to exercise the
mandatory conversion right provided for in Section 5(c), the Corporation will
provide written notice of such exercise to the Transfer Agent and each holder of
Series A Preferred and Series B Preferred specifying the date on which such
conversion will be effective (the "Mandatory Conversion Notice"), which date
must be no less than 90 days from the date on which such written notice is sent,
and thereafter each holder of shares of Series A Preferred and Series B
Preferred will Surrender its shares to the Corporation.
4
(e) Delivery of Certificates and Conversion Date. As promptly as
practicable, but in any event within five Business Days following the Conversion
Date (in the case of a conversion pursuant to Section 5(b)) or within five
Business Days following the date on which a holder of shares to be converted
Surrenders such shares to the Corporation (in the case of a conversion pursuant
to Section 5(c)), the Corporation will issue and deliver to, or upon the written
order of, the holder a certificate or certificates for the number of full shares
of Common Stock issuable upon the conversion of such holder's applicable shares
of Series A Preferred or Series B Preferred in accordance with the provisions of
this Section 5, and any fractional interest in respect of a share of Common
Stock arising upon such conversion will be settled as provided in Section 5(g)
hereof. In the event of a conversion pursuant to Section 5(b), upon conversion
of only a portion of the number of shares covered by a certificate representing
shares of Series A Preferred or Series B Preferred Surrendered for conversion,
the Corporation will also issue and deliver to, or upon the written order of,
the holder of the certificate so Surrendered for conversion, at the expense of
the Corporation, a new certificate covering the number of shares of Series A
Preferred or Series B Preferred, as applicable, representing the unconverted
portion of the certificate so Surrendered, which new certificate will entitle
the holder thereof to the rights of the shares of Series A Preferred or Series B
Preferred represented thereby to the same extent as if the certificate
theretofore covering such unconverted shares had not been Surrendered for
conversion. Each conversion will be deemed to have been effected as of the close
of business on the date on which (i) in the case of an optional conversion
pursuant to Section 5(b), the certificates for Series A Preferred or Series B
Preferred are Surrendered and such notice and payment of all required transfer
taxes and dividends received by the Corporation as aforesaid, or (ii) in the
case of a mandatory conversion pursuant to Section 5(c), the date specified in
the Mandatory Conversion Notice (the "Conversion Date"). On the Conversion Date,
all rights with respect to the shares of Series A Preferred or Series B
Preferred so converted, including the rights, if any, to receive notices, will
terminate except only the rights of holders thereof to receive the physical
certificates contemplated by this Section 5(e) and cash in lieu of any
fractional share as provided in Section 5(g), and the Person entitled to receive
the shares of Common Stock will be treated for all purposes as having become the
record holder of such shares (even if certificates for such shares of Common
Stock have not yet been issued).
(f) If conversion rights are exercised with respect to shares of Series A
Preferred or Series B Preferred under Section 5(b) or (c), such shares will
cease to accrue dividends pursuant to Section 3(a) as of the end of day
immediately preceding the Conversion Date.
(g) No Fractional Shares. No fractional shares or scrip representing
fractions of shares of Common Stock will be issued upon conversion of shares of
Series A Preferred or Series B Preferred. Instead of any fractional interest in
a share of Common Stock that would otherwise be deliverable upon the conversion
of such shares, the Corporation will pay to the holder of such shares an amount
in cash based upon the Current Market Price of Common Stock on the Trading Day
immediately preceding the Conversion Date. If more than one share is Surrendered
for conversion pursuant to this Section 5 at one time by the same holder, the
number of full shares of Common Stock
5
issuable upon conversion thereof will be computed on the basis of the aggregate
number of shares so Surrendered.
(h) Conversion Price Adjustments. The Conversion Price is subject to
adjustment from time to time as follows:
(i) Stock Splits and Combinations. If, after the Original Issue Date,
the Corporation (A) subdivides or splits its outstanding shares of Common Stock
into a greater number of shares, (B) combines or reclassifies its outstanding
shares of Common Stock into a smaller number of shares, or (C) issues any
Capital Stock of the Corporation by reclassification of its Common Stock, then
the Conversion Price in effect immediately prior to such event will be adjusted
so that the holder of any share of Series A Preferred or Series B Preferred
thereafter Surrendered for conversion will be entitled to receive the number of
such securities that such holder would have owned or have been entitled to
receive after the occurrence of any of the events described above as if such
share had been converted immediately prior to the effective date of such
subdivision, combination or reclassification or the record date therefor,
whichever is earlier. An adjustment made pursuant to this Section 5(h)(i) will
become effective at the close of business on the effective date of such
corporate action. Such adjustment will be made successively wherever any event
listed above occurs.
(ii) Dividends/Distributions of Common Stock. If, after the Original
Issue Date, the Corporation fixes a record date for or pays a dividend or makes
a distribution in shares of Common Stock on any class of Capital Stock of the
Corporation, other than dividends or distributions of shares of Common Stock or
other securities with respect to which adjustments are provided in Section
5(h)(i), then the Conversion Price in effect at the close of business on the
record date therefor will be adjusted to equal the price determined by
multiplying (A) such Conversion Price by (B) a fraction, the numerator of which
will be the number of shares of Common Stock Outstanding at the close of
business on the record date and the denominator of which will be the sum of
(1) the number of shares of Common Stock Outstanding at the close of business on
the record date and (2) the number of shares of Common Stock constituting such
dividend or distribution. An adjustment made pursuant to this Section 5(h)(ii)
will become effective immediately after the close of business on such record
date (except as provided in Section 5(h)(iv)(F) hereof). Such adjustment will be
made successively wherever any event listed above occurs.
(iii) Certain Issuances of Common Stock and Common Stock Derivatives.
If, after the Original Issue Date, the Corporation issues or sells shares of
Common Stock or any Common Stock Derivative without consideration or at a
consideration per share of Common Stock (or having a conversion, exercise or
exchange price per share of Common Stock, in the case of a Common Stock
Derivative), calculated by including the aggregate proceeds to the Corporation
upon issuance and any additional consideration payable to the Corporation upon
and in respect of any such conversion, exchange or exercise, that is less than
the Conversion Price in effect at the close of business on the day immediately
preceding such issuance, then the maximum number of shares of Common Stock
issuable upon conversion,
6
exchange or exercise of such Common Stock Derivatives, as applicable,
will be deemed to have been issued as of such issuance and such Conversion Price
will be decreased, effective as of the time of such issuance, to equal the price
determined by multiplying (A) such Conversion Price by (B) a fraction, the
numerator of which will be the sum of (1) the number of shares of Common Stock
Outstanding immediately prior to such issuance and (2) the number of shares
which the aggregate proceeds to the Corporation from such issuance (including
any additional consideration per share of Common Stock payable to the
Corporation upon any such conversion, exchange or exercise) would purchase at
such Conversion Price, and the denominator of which will be the sum of (1) the
number of shares of Common Stock Outstanding immediately prior to such issuance
and (2) the number of additional shares of Common Stock issued or subject to
issuance upon the conversion, exchange or exercise of such Common Stock
Derivatives issued. In the event that any portion of such consideration is in a
form other than cash, the Fair Market Value of such noncash consideration will
be used. Notwithstanding any provision hereof to the contrary, this Section
5(h)(iii) will not apply to any issuance of Common Stock in any manner described
in Section 5(h)(i) and (ii). Such adjustment will be made successively wherever
any event listed above occurs.
(iv) Additional Conversion Matters.
(A) Minor Adjustments and Calculations. No adjustment in the
Conversion Price pursuant to any provision of this Section 5(h) will be required
unless such adjustment would require a cumulative increase or decrease of at
least 1% in such price; provided, however, that any adjustments that by reason
of this Section 5(h)(iv)(A) are not required to be made will be carried forward
and taken into account in any subsequent adjustments until made. All
calculations under this Section 5(h) will be made to the nearest cent (with
$0.005 being rounded upward) or to the nearest whole share (with 0.5 of a share
being rounded upward), as the case may be.
(B) Exceptions to Adjustment Provisions. The provisions of this
Section 5(h) will not be applicable to (1) any issuance for which an adjustment
to the Conversion Price is provided under any other subclause of this Section
5(h), (2) any issuance of shares of Common Stock upon actual exercise, exchange
or conversion of any Common Stock Derivative if the Conversion Price was fully
and properly adjusted at the time such securities were issued or if no such
adjustment was required hereunder at the time such securities were issued,
(3) the issuance of additional shares of Series A Preferred or Series B
Preferred at a per share price equal to or greater than the applicable
Liquidation Preference or the issuance of shares of Common Stock upon conversion
of outstanding shares of Series A Preferred or Series B Preferred, (4) the
issuance of Common Stock Derivatives or shares of Common Stock to employees,
directors or consultants of the Corporation or its subsidiaries pursuant to
management or director incentive plans or stock compensation plans as in effect
on or prior to the Original Issue Date or approved by the affirmative vote of a
majority of the Board after the Original Issue Date, including any employment,
severance or consulting agreements, or the issuance of shares of Common Stock
upon the exercise of such Common Stock Derivative, (5) the issuance of shares of
Common Stock as consideration for an arm's-length acquisition of a business or
assets from Third Parties
7
that is approved by a majority of the Corporation's shareholders in accordance
with the requirements under the Charter and the Corporation's By-Laws and
applicable law, or (6) the issuance of shares of Common Stock pursuant to any
plan providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional amounts
in Common Stock under such plan.
(C) Board Adjustment to Conversion Price. Anything in this
Section 5(h) to the contrary notwithstanding, the Corporation may, to the extent
permitted by law, make such reductions in the Conversion Price, in addition to
those required by this Section 5(h), as the Board in its good faith discretion
determines to be necessary in order that any subdivision of shares,
reclassification or combination of shares, distribution of Common Stock
Derivatives, or a distribution of other assets (other than cash dividends)
hereafter made by the Corporation to its shareholders will not be taxable.
Whenever the Conversion Price is so decreased, the Corporation will mail to
holders of record of shares of Series A Preferred and Series B Preferred a
notice of the decrease at least 5 days before the date the decreased Conversion
Price takes effect, and such notice will state the decreased Conversion Price
and the period it will be in effect.
(D) Other Capital Stock. In the event that, at any time as a
result of the provisions of this Section 5(h), a holder of shares of Series A
Preferred or Series B Preferred becomes entitled to receive any shares of
Capital Stock of the Corporation other than Common Stock upon subsequent
conversion, the number of such other shares so receivable upon conversion will
thereafter be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions contained herein.
(E) Effect of Adjustment. In the event that, at any time after the
Original Issue Date, any adjustment is made to the Conversion Price pursuant to
this Section 5, such adjustment to the Conversion Price will be applicable with
respect to all then outstanding shares of Series A Preferred and Series B
Preferred and all shares of Series A Preferred or Series B Preferred issued
after the date of the event causing such adjustment to the Conversion Price.
(F) Adjustment Deferral. In any case in which Section 5(h)
provides that an adjustment becomes effective from and after a record date for
an event, the Corporation may defer until the occurrence of such event (1)
issuing to the holder of any shares of Series A Preferred or Series B Preferred
converted after such record date and before the occurrence of such event the
additional shares of Common Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the shares of Common Stock
issuable upon such conversion before giving effect to such adjustment and (2)
paying to such holder any amount of cash in lieu of any fraction pursuant to
Section 5(g).
(G) Other Limits on Adjustment. There will be no adjustment of the
Conversion Price in the event of the issuance of any shares of the Corporation
in a
8
reorganization, acquisition or other similar transaction, except as
specifically set forth in this Section 5.
(H) Abandoned Events and Expired Common Stock Derivatives. If the
Corporation takes a record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend or other distribution, and thereafter and
before the distribution to shareholders legally abandons its plan to pay or
deliver such dividend or distribution, then thereafter any adjustment in the
Conversion Price granted by this Section 5(h) will, as and if necessary, be
readjusted at the time of such abandonment to the Conversion Price that would
have been in effect if no adjustment had been made (taking proper account of all
other conversion adjustments under this Section 5(h)); provided, however, that
such readjustment will not affect the Conversion Price of any shares of Series A
Preferred or Series B Preferred that have been converted prior to such
abandonment. If any Common Stock Derivatives referred to in this Section 5(h) in
respect of which an adjustment has been made expire unexercised in whole or in
part after the same have been distributed or issued by the Corporation, the
Conversion Price will be readjusted at the time of such expiration to the
Conversion Price that would have been in effect if no adjustment had been made
on account of the distribution or issuance of such expired Common Stock
Derivatives (taking proper account of all other conversion adjustments under
this Section 5(h)); provided, however, that such readjustment will not affect
the Conversion Price of any shares of Series A Preferred or Series B Preferred
that have been converted prior to such expiration.
(I) Participation in Dividends. Notwithstanding anything herein to
the contrary, no adjustment to the Conversion Price will be made under Section
5(h)(ii) to the extent that the holders of Series A Preferred or Series B
Preferred, as applicable, participate in any such distribution on an
as-converted basis based on the number of shares of Common Stock into which such
shares are then convertible.
(J) Pre-Conversion Price Determination Time Events. No adjustment
will be made to the Conversion Price for events occurring prior to the
determination of the Conversion Price in accordance with Section 5(a) (the
"Conversion Price Determination Time"), whether or not they would otherwise
result in an adjustment to the Conversion Price pursuant to this Section 5(h);
provided, however, that the Corporation will not take any actions that, but for
this Section 5(h)(iv)(J), would have resulted in an adjustment of the Conversion
Price prior to the Conversion Price Determination Time pursuant to this Section
5(h) without the written consent of the Required Holders.
(i) Fundamental Changes. In the event that any transaction or event
(including, without limitation, any merger, consolidation, sale of assets,
tender or exchange offer, reclassification, compulsory share exchange or
liquidation) occurs in which all or substantially all of the outstanding Common
Stock is converted into or exchanged for stock, other securities, cash or assets
(each, a "Fundamental Change"), the holder of each share of Series A Preferred
and each share of Series B Preferred outstanding immediately prior to the
occurrence of such Fundamental Change will have the right upon any subsequent
conversion to receive (but only out of legally available
9
funds, to the extent required by applicable law) the kind and amount of stock,
other securities, cash and assets that such holder would have received if such
share had been converted immediately prior thereto (assuming such holder failed
to exercise his rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such Fundamental Change).
Such adjustment will be made successively whenever any event listed above
occurs. No adjustment will be made pursuant to Section 5(i) in respect of any
Fundamental Event as to which an adjustment to the Conversion Price was made
pursuant to Section 5(h).
(j) Notice of Certain Events. If, subject to the limitations set forth in
Section 3 hereof:
(i) the Corporation declares (A) any dividend (or any other
distribution) on Common Stock, other than a dividend payable in shares of Common
Stock, or (B) any extraordinary dividend or distribution on any Junior Stock
(excluding any regularly scheduled dividends paid in accordance with the terms
thereof);
(ii) there is any recapitalization or reclassification of the Common
Stock (other than an event to which Section 5(h) hereof applies) or any
consolidation or merger to which the Corporation is a party and for which
approval of any shareholders of the Corporation is required, or a share exchange
or self-tender offer by the Corporation for all or substantially all of its
outstanding Common Stock or the sale or transfer of all or substantially all of
the assets of the Corporation as an entirety or any compulsory share exchange
affecting the Common Stock; or
(iii) there occurs a Liquidation;
then the Corporation will cause to be filed with the Transfer Agent and will
cause to be mailed to the holders of the outstanding shares of Series A
Preferred and Series B Preferred at the addresses of such holders as shown on
the stock books of the Corporation, as promptly as possible, but at least ten
Business Days prior to the applicable date hereinafter specified and no later
than when notice is first mailed or sent to the holders of Common Stock, a
notice stating (A) the date on which a record is to be taken for the purpose of
such dividend, distribution or grant, or, if a record is not to be taken, the
date as of which the holders of Common Stock of record to be entitled to such
dividend, distribution or grant are to be determined or (B) the date on which
such reclassification, consolidation, merger, share exchange, self-tender offer,
sale, transfer or Liquidation is expected to become effective, and the date as
of which it is expected that holders of Common Stock of record will be entitled
to exchange their shares of Common Stock for securities or other property, if
any, deliverable upon such reclassification, consolidation, merger, share
exchange, self-tender offer, sale, transfer or Liquidation. Failure to give or
receive such notice or any defect therein will not affect the legality of
validity of the proceedings described in this Section 5.
(k) Sufficient Shares of Common Stock. The Corporation covenants that it
will at all times reserve and keep available, free from preemptive rights, out
of the aggregate of its authorized but unissued shares of Common Stock, solely
for the
10
purpose of effecting conversion of the Series A Preferred and Series B
Preferred, the full number of shares of Common Stock deliverable upon the
conversion of all outstanding shares of Series A Preferred and Series B
Preferred not theretofore converted. For purposes of this Section 5(k), the
number of shares of Common Stock that are deliverable upon the conversion of all
such outstanding shares will be computed as if at the time of computation all
such outstanding shares were held by a single holder.
(l) Compliance with Laws. Prior to the delivery of any securities that the
Corporation is obligated to deliver upon conversion of shares of Series A
Preferred or Series B Preferred, the Corporation will use its best efforts to
comply with all federal and state laws and regulations thereunder requiring the
registration of such securities with, or any approval of or consent to the
delivery thereof by, any governmental authority.
(m) Officer's Certificate. As promptly as practicable following the
Conversion Price Determination Time, the Corporation will promptly file with the
Transfer Agent, and cause to be delivered to each holder of Series A Preferred
and each holder of Series B Preferred, a certificate signed by the principal
financial or accounting officer of the Corporation, setting forth the
determination of the initial Conversion Price, the Distributable Market Equity
Value Per Share and the Mandatory Conversion Trigger Price. Thereafter whenever
the applicable Conversion Price is adjusted pursuant to this Section 5, the
Corporation will promptly file with the Transfer Agent, and cause to be
delivered to each holder of Series A Preferred and each holder of Series B
Preferred, a certificate signed by the principal financial or accounting officer
of the Corporation, setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated (including a
description of the basis of the determination of the Current Market Price and/or
Fair Market Value, as applicable) and specifying the new applicable Conversion
Price. In the event of a Fundamental Event pursuant to Section 5(i), such a
certificate will be issued describing the amount and kind of stock, securities,
property or assets or cash receivable upon conversion of the Series A Preferred
and Series B Preferred after giving effect to the provisions of such
Section 5(i).
(n) Errors. The Board will have the power to resolve any ambiguity or
correct any error in Section 5, and its action in doing so will be final and
binding and conclusive.
(o) No Increase. Notwithstanding anything herein to the contrary, the
Conversion Price will in no event be increased pursuant to Section 5(h)(iii).
6. Voting Rights. (a) General. Subject to the terms of the Shareholders
Agreement, holders of shares of Series A Preferred and Series B Preferred will
have one vote for each share of Common Stock into which such share of Series A
Preferred or Series B Preferred, as applicable, could be converted at the
Conversion Price at the record date for determination of the shareholders
entitled to vote, or, if no such record date is established, at the date such
vote is taken or any written consent of shareholders is solicited by the
Corporation. Except as required by law, by the terms of any agreement to which
the Corporation and holders of Series A Preferred or Series B
11
Preferred, as applicable, are a party or as otherwise set forth in this
Section 6, such holders will have full voting rights and powers equal to the
voting rights and powers of the holders of Common Stock, and will be entitled to
vote, together with holders of Common Stock and not by classes, with respect to
any and all matters upon which holders of Common Stock have the right to vote.
Fractional votes by the holders of Series A Preferred and Series B Preferred
will not be permitted, and any fractional voting rights (after aggregating all
shares into which shares of Series A Preferred or Series B Preferred, as
applicable, held by each holder could be converted) will be disregarded.
(b) Without limiting Article III of the Shareholders Agreement, beginning
with the Corporation's first annual meeting of shareholders following the
Original Issue Date, for as long as shares of Series A Preferred having an
aggregate Series A Liquidation Preference of at least $125 million are owned by
the Initial Series A Purchaser, the Board will consist of nine members, elected
as follows:
(i) The holders of shares of the Series A Preferred will be entitled,
voting as a separate class, to elect three directors at each meeting of
shareholders held for the purpose of electing directors, at least one of whom
will be an Independent Director.
(A) In case of any removal, either with or without cause, of a
director elected by the holders of the shares of Series A Preferred, the holders
of the shares of Series A Preferred will be entitled, voting as a separate class
either by written consent or at a special meeting or next regular meeting, to
elect a successor to hold office for the unexpired term of the director who has
been removed.
(B) (1) In case of such removal, an officer of the Corporation may
call, and, upon written request of the Initial Series A Purchaser, addressed to
the Secretary of the Corporation, will call a special meeting of the holders of
shares of Series A Preferred. Such meeting will be held at the earliest
practicable date upon the notice required for annual meetings of shareholders at
the place for holding annual meetings of shareholders of the Corporation, or, if
none, at a place designated by the Board. Notwithstanding the provisions of this
Section 6(b)(i)(B)(1), no such special meeting will be called during a period
within the 120 days immediately preceding the date fixed for the next annual
meeting of shareholders in which such case, the election of directors pursuant
to Section 6(b)(i) will be held at such annual meeting of shareholders.
(2) At any meeting held for the purpose of electing
directors at which the holders of shares of Series A Preferred voting separately
as one class have the right to elect directors as provided herein, the presence
in person or by proxy of the holders of more than 50% of the then-outstanding
shares of the Series A Preferred will be required and will be sufficient to
constitute a quorum of such class for the election of directors by such class.
12
(ii) The remaining directors will be elected by holders of shares of
Common Stock and any other class of Capital Stock entitled to vote in the
election of directors (including the Series A Preferred and Series B Preferred)
(together the "Voting Stock"), voting together as a single class at each meeting
of shareholders held for the purpose of electing directors.
(A) In case of any removal, either with or without cause, of a
director elected by the holders of the Voting Stock, the holders of the shares
of Voting Stock will be entitled, voting together as a class either by written
consent or at a special meeting or next regular meeting, to elect a successor to
hold office for the unexpired term of the director who has been removed.
(B) (1) In case of such removal, an officer of the Corporation may
call, and, upon written request of the holders of at least 25% of the
outstanding shares of Voting Stock, addressed to the Secretary of the
Corporation, will call a special meeting of the holders of Voting Stock. Such
meeting will be held at the earliest practicable date upon the notice required
for annual meetings of shareholders at the place for holding annual meetings of
shareholders of the Corporation, or, if none, at a place designated by the
Board. Notwithstanding the provisions of this Section 6(b)(ii)(B)(1), no such
special meeting will be called during a period within the 120 days immediately
preceding the date fixed for the next annual meeting of shareholders in which
such case, the election of directors pursuant to Section 6(b)(ii) will be held
at such annual meeting of shareholders.
(2) At any meeting held for the purpose of electing
directors at which the holders of Voting Stock voting together as one class have
the right to elect directors as provided herein, the presence in person or by
proxy of the holders of more than 50% of the then-outstanding shares of Voting
Stock will be required and will be sufficient to constitute a quorum of such
class for the election of directors by such class.
(C) In case of any vacancy (other than by removal) in the office
of a director elected by the holders of the shares of Common Stock, the vacancy
will be filled by the remaining directors of the Board.
(c) Election of Directors Upon Dividend Default. If at any time the
equivalent of six quarterly dividends payable on the shares of Series A
Preferred or Series B Preferred or any other class or series of Parity Stock are
accrued and unpaid (whether or not consecutive and whether or not declared),
then, immediately prior to the next annual meeting of shareholders or special
meeting of shareholders, the total number of directors constituting the entire
Board will automatically be increased by two and, in each case, the holders of
all outstanding shares of Series A Preferred, Series B Preferred and any Parity
Stock having similar voting rights then exercisable, voting separately as a
single class without regard to series, will be entitled to elect at such meeting
of the shareholders of the Corporation two directors to serve until all
dividends accumulated and unpaid on any such voting shares have been paid. The
term of office of all such directors will terminate immediately upon payment in
full of all accrued but unpaid dividends and upon such termination the total
number of directors constituting
13
the entire Board will be reduced by two. In exercising any such vote, each
outstanding share of Series A Preferred and Series B Preferred will be entitled
to one vote, excluding shares held by the Corporation or any entity controlled
by the Corporation, which shares will have no vote. Notwithstanding the
foregoing, the number of directors to be elected pursuant to this Section 6(c)
will be reduced to zero in the event that the holders of Series A Preferred are
entitled to elect directors pursuant to Section 6(b)(i) at such time; provided,
however, that such number will be increased back to two pursuant to this Section
6(c) effective immediately upon the termination of the right of the holders of
Series A Preferred to elect directors pursuant to Section 6(b)(i) unless at such
time all accumulated and unpaid dividends have been paid.
(d) No holder of Series A Preferred or Series B Preferred may receive any
compensation or remuneration of any kind (from the Corporation or from any other
Person) in connection with the exercise or non-exercise of any voting or other
rights under any provision of these Articles; provided, that this restriction
shall not prohibit the reimbursement of expenses incurred by any holder of
Series A Preferred or Series B Preferred and shall not prohibit the payment of
fees by the Corporation to any holder of Series A Preferred or Series B
Preferred if the Corporation has engaged such holder or its Affiliates as an
advisor or consultant in connection with any transaction.
7. Preemptive Rights. (a) If, prior to the Preemptive Rights Disqualifying
Date, the Corporation proposes to offer any shares of Capital Stock to any
Person or Persons, other than any shares of Capital Stock issued as described in
Section 5(h)(iv)(B)(4) or (5), (the "New Securities"), the Corporation will,
prior to issuing such New Securities, deliver to the holders of Series A
Preferred (the "Qualified Participants") a written offer (the "Preemptive Rights
Offer") to issue to such Qualified Participants New Securities to maintain their
Pro Rata Amounts. The Preemptive Rights Offer will state (i) the amount of New
Securities to be issued, (ii) the terms of the New Securities, (iii) the
purchase price of the New Securities, and (iv) any other material terms of the
proposed issuance. The Preemptive Rights Offer will remain open and irrevocable
for a period of 30 days from the date of its delivery (the "Preemptive Rights
Period").
(b) Each Qualified Participant may accept the Preemptive Rights Offer by
delivering to the Corporation a written notice (the "Preemptive Rights Notice")
within the Preemptive Rights Period. The Preemptive Rights Notice will state the
number (the "Preemptive Rights Number") of New Securities such Qualifying
Participant desires to purchase. If the sum of all Preemptive Rights Numbers
exceeds the number of New Securities that the Corporation proposes to issue,
then the New Securities will be allocated among the Qualifying Participants that
delivered a Preemptive Rights Notice in accordance with their Pro Rata Amounts.
(c) The issuance of New Securities to the Qualified Participants will be
made on a Business Day, as designated by the Corporation, not less than ten nor
more than 30 days after expiration of the Preemptive Rights Period on terms and
conditions of the Preemptive Rights Offer consistent with this Section 7. At the
closing of the issuance of the New Securities to such Qualified Participants,
the Corporation will deliver certificates or other instruments evidencing such
New Securities against payment of the purchase
14
price therefor, and such New Securities will be issued free and clear of all
liens, claims and other encumbrances (other than those attributable to actions
by the purchasers thereof). At such closing, all of the parties to the
transaction will execute such additional documents as are deemed by the Board to
be necessary or appropriate in its sole discretion.
(d) If the number of New Securities included in the Preemptive Rights Offer
exceeds the sum of all Preemptive Rights Numbers, the Corporation may issue such
excess or any portion thereof on the terms and conditions of the Preemptive
Rights Offer to any Person within 45 days after expiration of the Preemptive
Rights Period (or upon the expiration of any regulatory period, if applicable).
If such issuance is not made within such period, the restrictions provided for
in this Section 7 will again become effective.
Except as otherwise expressly provided in this Section 7, no holder of any
shares of Series A Preferred or Series B Preferred will have any preemptive
right to acquire any shares of unissued Capital Stock of the Corporation, now or
hereafter authorized, or any treasury shares or securities convertible into such
shares or carrying a right to subscribe to or acquire such shares of capital
stock.
8. Transferability. (a) Subject to Section 8(c), during the six-month
period following the Original Issue Date (the "Transfer Prohibition Period"), no
holder of shares of Series A Preferred or Series B Preferred may (i) sell,
assign, transfer, pledge, hypothecate or otherwise encumber or dispose of in any
way all or any part of an interest in ("Transfer") such holder's Series A
Preferred or Series B Preferred, as applicable, or (ii) convert any such shares
into Common Stock pursuant to Section 5; provided, however, that nothing in this
Section 8(a) will prohibit a holder from Transferring Series A Preferred or
Series B Preferred to a Permitted Transferee of such holder.
(b) Subject to Section 8(c), during the 30-month period commencing
immediately upon the end of the Transfer Prohibition Period, the Initial
Series A Purchaser may not (i) Transfer shares of Series A Preferred having an
aggregate Series A Liquidation Preference of more than $125 million to any
Person or (ii) convert shares of Series A Preferred having an aggregate Series A
Liquidation Preference of more than $125 million into shares of Common Stock
pursuant to Section 5; provided, however, that nothing in this Section 8(b) will
prohibit the Initial Series A Purchaser from Transferring Series A Preferred to
a Permitted Transferee of such holder (and such a Transfer will not be counted
for purposes of clause (i) above).
(c) The restrictions on transferability set forth in Sections 8(a) and (b)
will automatically terminate upon any (i) Bankruptcy Event relating to the
Corporation, (ii) Company Sale to a Third Party, or (iii) underwritten public
offering of any Common Stock for cash (other than in connection with an
acquisition of assets, a company or a business by the Corporation or one of its
subsidiaries in a transaction approved by the Board) pursuant to an effective
registration statement (other than a registration statement on Form S-4 or S-8
or any similar form) filed under the Securities Act, unless
15
the holders of Series A Preferred or Series B Preferred, as applicable, are
given the opportunity to sell securities in such public offering on the basis of
their Pro Rata Amounts.
(d) Each certificate representing Series A Preferred or Series B Preferred
issued to any holder will bear a legend on the face thereof substantially to the
following effect (with such additions thereto or changes therein as the
Corporation may be advised by counsel are required by law (the "Legend")):
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
TRANSFER RESTRICTIONS CONTAINED IN THE ARTICLES OF SERIAL DESIGNATION
RELATING TO SUCH SHARES, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH ARTICLES OF SERIAL
DESIGNATION."
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT OR
ANY OTHER APPLICABLE LAW OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE."
The Legend will be removed by the Corporation by the delivery of substitute
certificates without such Legend in the event of the termination of the
restrictions contained in this Section 8 pursuant to the terms of hereof;
provided, however, that the second paragraph of such Legend will only be removed
if at such time a legal opinion from counsel to the transferee is obtained to
the effect that such legend is no longer required for purposes of applicable
securities laws.
(e) In the event of any purported Transfer not made in compliance with this
Section 8, such purported Transfer will be void and of no effect and the
Corporation will not give effect to such Transfer. The Corporation will be
entitled to treat the prior owner as the holder of any such securities not
Transferred in accordance with this Section 8.
(f) In no event will any holder of Series A Preferred or Series B Preferred
engage in any short sales of Common Stock, any transactions involving options
(including exchange-traded options), puts, calls or other derivatives involving
securities of the Corporation or any other transactions of any type that would
have the effect of providing such holder with any other economic gain in the
event of a decrease in the Current Market Price, unless such holder has entered
into a market maker agreement with the Corporation (or its predecessor) and
Appaloosa, in the form annexed to the Investment Agreement, dated as of
September [o], 2007, by and among Appaloosa, [Purchaser] and the Corporation as
Exhibit E.
16
9. Deregistration. For as long as any shares of Series A Preferred or
Series B Preferred are outstanding, the Corporation will not voluntarily take
any action to deregister or suspend the registration of its Common Stock under
Section 12 or 15 of the Exchange Act.
10. No Reissuance. Shares of Series A Preferred or Series B Preferred that
have been issued and reacquired in any manner, including shares purchased,
redeemed, converted or exchanged, may not be reissued as shares of Series A
Preferred or Series B Preferred and will (upon compliance with applicable law)
have the status of authorized and unissued shares of Preferred Stock
undesignated as to series and may be redesignated and reissued as part of any
series of Preferred Stock; provided, however, that so long as any shares of
Series A Preferred or Series B Preferred are outstanding, any issuance of such
shares must be in compliance with the terms hereof in respect of the applicable
series of such shares. Upon any such reacquisitions, the number of shares of
Series A Preferred or Series B Preferred, as applicable, authorized pursuant to
the Charter and these Articles will be reduced by the number of shares so
acquired.
11. Transfer Agent. The duly appointed Transfer Agent for the Series A
Preferred and Series B Preferred will be [_____]. The Corporation may, in its
sole discretion, remove the Transfer Agent in accordance with the agreement
between the Corporation and the Transfer Agent as long as the Corporation will
appoint a successor transfer agent who will accept such appointment prior to the
effectiveness of such removal.
12. Currency. All shares of Series A Preferred and Series B Preferred will
be denominated in U.S. currency, and all payments and distributions thereon or
with respect thereto will be made in U.S. currency. All references herein to "$"
refer to the U.S. currency.
13. Definitions. In additions to terms defined elsewhere in these Articles,
the following terms have the following meanings:
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, another Person. For purposes of
this definition, the terms "control," "controlling," "controlled by" and "under
common control with," as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Appaloosa" means Appaloosa Management L.P., a Delaware limited
partnership.
"Articles" means these Articles of Serial Designation of 4.0% Series A
Convertible Preferred Stock and 4.0% Series B Convertible Preferred Stock.
17
"Bankruptcy Event" means the voluntary or involuntary commencement of a
case or other proceeding against a Person seeking the liquidation,
reorganization, debt arrangement, dissolution, winding up or composition or
readjustment of debts of such Person, the appointment of a trustee, receiver,
custodian, liquidator, assignee or the like for such Person of all or
substantially all of its assets, or any similar action with respect to such
Person, whether judicial or non-judicial or under any law relating to
bankruptcy, insolvency, reorganization, winding up or composition or adjustment
of debts; provided, however, that in no event will a Bankruptcy Event be deemed
to have occurred as a result of any internal corporate or other restructuring or
reorganization of such Person.
"Board" means the Board of Directors of the Corporation; where any consent,
approval or action is required by the Board hereunder and the authority of the
Board with respect to such consent, approval or action has been delegated to a
committee of the Board, in accordance with applicable law, the consent, approval
or action by such committee will satisfy such requirement for purposes hereof.
"Business Day" means any day other than a Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated
by law or executive order to close.
"Capital Stock" means (a) with respect to any Person that is a corporation
or company, any and all shares, interests, participations or other equivalents
(however designated) of capital or capital stock of such Person and (b) with
respect to any Person that is not a corporation or company, any and all
partnership or other equity interests of such Person.
"Charter" means the Corporation's Restated Articles of Incorporation, as it
may be amended from time to time.
"Closing Sale Price" when used with reference to shares of the Common Stock
or other securities on any date, means the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the NYSE or, if the shares of Common Stock or other
applicable security are not listed or admitted to trading on the NYSE, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
shares of Common Stock or other security are listed or admitted to trading or,
if the shares of Common Stock or other security are not listed or admitted to
trading on any national securities exchange, the average of the last quoted high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System or
such other system then in use, or, if on any such date the shares of Common
Stock or other security are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Common Stock or other security, as selected by the Board
(any such applicable exchange or market referred to above, the "Corporation's
Principal Exchange").
18
"Common Stock" means the common stock, par value $0.01 per share, of the
Corporation and any shares or Capital Stock for or into which such common stock
hereafter is exchanged, converted, reclassified or recapitalized by the
Corporation or pursuant to an agreement to which the Corporation is a party.
"Common Stock Derivative" means any option, right, warrant or security of
the Corporation which is convertible into or exercisable or exchangeable for
Common Stock of the Corporation.
"Common Stock Outstanding" means all shares of Common Stock issued and
outstanding as of the applicable time plus the number of shares issuable upon
conversion or exercise of all outstanding Common Stock Derivatives (including
the Series A Preferred and the Series B Preferred) as of the applicable time.
"Company Sale" means any merger, consolidation, business combination,
reorganization or recapitalization of the Corporation that results in the
transfer of 50% or more of the outstanding voting power of the Corporation, any
sale, lease or other disposition of all or substantially all of the assets of
the Corporation and its subsidiaries (on a consolidated basis), or any other
form of corporate reorganization in which 50% or more of the outstanding shares
of any class or series of Capital Stock of the Corporation are exchanged for or
converted into cash, securities or property of another business organization.
"Conversion Price" means an amount equal to 0.90 (the "Discount Factor")
multiplied by the Distributable Market Equity Value Per Share (rounded up to the
nearest cent).
"Current Market Price" when used with reference to shares of Common Stock
or other securities on any date, means the average of the Closing Sale Price for
the 30 consecutive Trading Days immediately prior to such date; provided,
however, (a) if on any such date no market maker is making a market in the
Common Stock or such other security so that there is no Closing Sale Price, then
the Current Market Price of such Common Stock or other security will be valued
using clause (a) of the definition of "Fair Market Value" below, as if it were
an "asset" thereunder, and (b) that in the event that the Current Market Price
is determined during a period following the announcement by the Corporation or
other issuer of the applicable securities of (i) a dividend or distribution on
such Common Stock or such other securities payable in shares of such Common
Stock or securities convertible into shares of such Common Stock or securities,
or (ii) any subdivision, combination or reclassification of such Common Stock or
other securities, and prior to the expiration of the requisite 30 Trading Day
period set forth above, then, and in each such case, the Current Market Price
will be properly adjusted to take into account ex-dividend trading.
"Distributable Market Equity Value Per Share" means a per share value equal
to the 20-Trading Day volume weighted average sale price (rounded to the nearest
1/10,000) of the Common Stock on the Corporation's Principal Exchange, as
reported by Bloomberg Financial Markets (or such other source as the Corporation
may
19
reasonably determine) and determined using the 22 Trading Days beginning on and
including the first Business Day after the Original Issue Date (disregarding the
Trading Days during such period having the highest and lowest volume weighted
average sale price (as so determined)).
"Dividend Payment Date" means the first day of March, June, September and
December; provided, however, that if any Dividend Payment Date falls on any day
other than a Business Day, the dividend payment due on such Dividend Payment
Date will be paid on the Business Day immediately following such Dividend
Payment Date.
"Dividend Periods" means the quarterly dividend periods commencing on and
including the first day of March, June, September and December of each year and
ending on and including the date before the next Dividend Payment Date of such
year, respectively (other than the initial Dividend Period, which will commence
on the Original Issue Date and end on and include the date before the first
Dividend Payment Date after the Original Issue Date).
"Dividend Record Date" means, with respect to a Dividend Payment Date, the
close of business on the 15(th) calendar day prior thereto, or such other record
date, not more than 60 days and not less than 10 days preceding the applicable
Dividend Payment Date, as may be fixed by the Board.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, with respect to any (a) asset, the amount that a
willing buyer would pay an unaffiliated willing seller in an arm's-length
transaction to acquire ownership of such asset, with neither being under any
compulsion to buy or sell, and both having reasonable knowledge of all relevant
facts and taking into account all relevant circumstances and information,
including market treatment of similar businesses, historical operating results
and projections for future periods, as determined in good faith by the Board, or
(b) security, the Current Market Price thereof.
"Fully Diluted Shares" means a number of shares of Common Stock equal to
the sum of (a) the number of shares of Common Stock issued and outstanding on
the date of the Conversion Price Determination Time plus (b) a number equal to
the quotient of (i) the sum of (A) the aggregate Series A Liquidation Preference
plus (B) the aggregate Series B Liquidation Preference divided by (ii) the
Conversion Price.
"Independent Director" means a director of the Corporation who qualifies as
an "independent director" of the Corporation under (a) New York Stock Exchange
("NYSE") Rule 303A(2), as such rule may be amended, supplemented or replaced
from time to time ("303A(2)"), or (b) if the Corporation is listed or quoted on
another securities exchange or quotation system that has an independence
requirement, the comparable rule or regulation of such securities exchange or
quotation system on which the Common Stock is listed or quoted (whether by final
rule or otherwise). In addition, in order for a director designated by Appaloosa
to be deemed to be an "Independent Director," such director would also have to
be considered an "independent director" of
20
Appaloosa and the Initial Series A Purchaser under 303A(2), assuming for this
purpose that (i) such director were a director of Appaloosa and the Initial
Series A Purchaser (whether or not such director actually is or has been a
director of Appaloosa or the Initial Series A Purchaser) and (ii) Appaloosa and
the Initial Series A Purchaser are each deemed to be a NYSE listed company.
"Initial Series A Purchaser" means ___________, a ____________, and any
Permitted Transferee thereof, but only to the extent that such Permitted
Transferee is a corporation or other organization, whether incorporated or
unincorporated, of which either the Initial Series A Purchaser or Appaloosa
directly or indirectly owns or controls 100% of the securities or other
interests having by their terms ordinary voting power to elect the board of
directors (or others performing similar functions) of such corporation or other
organization.
"Issue Date" means, with respect to a share of Series A Preferred or Series
B Preferred, the date on which such share is issued and sold by the Corporation.
"Liquidation Preference" means, as applicable, the Series A Liquidation
Preference or the Series B Liquidation Preference.
"Original Issue Date" means effective date of the Plan, which is the date
of the original issuance of shares of Series A Preferred and Series B Preferred.
"Permitted Transferee" means, with respect to any holder of Series A
Preferred or Series B Preferred, an Affiliate of such holder that acknowledges
the transfer restrictions set forth in Section 8 and agrees to be bound by any
agreements to which such holder is a party with respect to its ownership of
Series A Preferred or Series B Preferred, as applicable, to the same extent it
would be bound if it were an original party thereto as evidenced by
documentation satisfactory to the Corporation in its sole discretion.
"Person" means any individual, firm, corporation, partnership, limited
partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity, and will include a "group" (within
the meaning of Sections 13(d) and 14(d) of the Exchange Act), as well as any
successor (by merger or otherwise) of any such Person.
"Plan" means the joint plan of reorganization filed by Dana Corporation and
its debtor subsidiaries with the United States Bankruptcy Court for the Southern
District of New York on ______ __, 2007, as such joint plan may be amended.
"Preemptive Rights Disqualifying Date" means the date on which the Initial
Series A Purchaser no longer beneficially owns shares of Series A Preferred
having a Liquidation Preference of at least 50% of the Series A Preferred
Liquidation Preference of shares of Series A Preferred that are outstanding at
such time.
21
"Preferred Stock" means the Corporation's authorized Preferred Stock, par
value $0.01 per share.
"Pro Rata Amounts" means, on the date of determination, with respect to any
holder of Preferred Stock, the quotient obtained by dividing (a) the aggregate
number of shares of Common Stock issuable upon conversion of the shares of
Series A Preferred or Series B Preferred, as applicable, held by such holder on
such date by (b) the aggregate number of shares of Common Stock Outstanding.
"Required Holders" means holders of shares of Series A Preferred having a
Liquidation Preference of at least 50% of the Series A Liquidation Preference of
shares of Series A Preferred that are outstanding at such time.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Liquidation Preference" means $100.00 per share, as adjusted from
time to time for Series A Preferred stock splits, stock dividends,
recapitalizations and the like.
"Series B Liquidation Preference" means $100.00 per share, as adjusted from
time to time for Series B Preferred stock splits, stock dividends,
recapitalizations and the like.
"Series A Nominating Committee" means a committee of the Board that
consists of three directors, two of whom will be chosen by the Initial Series A
Purchaser and one of whom will be chosen by the Board.
"Shareholders Agreement" means the Shareholders Agreement among the
Corporation, Appaloosa and the Initial Series A Purchaser, as in effect from
time to time.
"set apart for payment" will be deemed to include, without any action by
the Corporation other than the following, the recording by the Corporation in
its accounting ledgers of any accounting or bookkeeping entry which indicates,
pursuant to an authorization of dividends or other distribution by the Board,
the allocation of funds or Capital Stock of the Corporation to be so paid on any
series or class of Capital Stock of the Corporation.
"Third Party" means a Person that is not (a) the Corporation or any of its
subsidiaries or (b) an Affiliate of the Corporation or any of its subsidiaries.
"Trading Day" means a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares of the Common Stock
are not listed or admitted to trading on any national securities exchange, a
Business Day.
22
"Transfer Agent" means the transfer agent or agents of the Corporation as
may be designated by the Board or its designee as the transfer agent for the
Series A Preferred and Series B Preferred.
14. Amendment. No provision of these Articles may be repealed or amended in
any respect unless such repeal or amendment is approved by the affirmative vote
of not less than a majority of the total voting power of all Common Stock
Outstanding (on an as-converted basis).
23
[White & Case Draft of 9/21/07]
EXHIBIT C
[NEW DANA CORPORATION]
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of _______, 2007 (the
"Agreement"), between Appaloosa Management L.P., a Delaware limited partnership
("Appaloosa"), ____________, a Delaware limited liability company (the
"Investor") and [New Dana Corporation], a __________ corporation (the
"Company").
R E C I T A L S
WHEREAS, the Investor has, pursuant to the terms of the Investment
Agreement, dated as of August [o], 2007, by and among the Company, Appaloosa and
the Investor (the "Investment Agreement"), agreed to purchase shares of (i) 4.0%
Series A Convertible Preferred Stock, par value $0.01 per share, of the Company
(the "Series A Preferred Stock") and (ii) 4.0% Series B Convertible Preferred
Stock, par value $0.01 per share, of the Company (the "Series B Preferred
Stock"); and
WHEREAS, the shares of Series A Preferred Stock are convertible into
shares of common stock, par value $0.01 per share, of the Company (the "Common
Stock"); and
WHEREAS, the shares of Series B Preferred Stock are convertible into
shares of Common Stock; and
WHEREAS, the Company has agreed, as a condition precedent to the
Investor's obligations under the Investment Agreement, to grant the Investor
certain registration rights; and
WHEREAS, the Company and the Investor desire to define the
registration rights of the Investor on the terms and subject to the conditions
herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following terms have the respective
meanings set forth below:
Allocation Priority: shall have the meaning set forth in
Section 2(b)(ii);
Agreement: shall mean this Agreement among Appaloosa, the Investor and
the Company;
Commission: shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act;
Exchange Act: shall mean the Securities Exchange Act of 1934, as
amended (or any successor act), and the rules and regulations
promulgated thereunder;
Holder: shall mean any holder of Registrable Securities;
Initiating Holder: shall mean any Holder or Holders who in the
aggregate are Holders of more than 50% of the then outstanding
Registrable Securities;
Maximum Number of Shares: shall have the meaning set forth in
Section 2(b)(ii);
Person: shall mean an individual, partnership, joint-stock company,
corporation, trust or unincorporated organization, and a government or
agency or political subdivision thereof;
Pro Rata: shall have the meaning set forth in Section 2(b)(ii);
Register, Registered and Registration: shall mean a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
Registrable Securities: shall mean any (A) Series A Preferred Stock
held by the Investor, (B) shares of Common Stock issuable upon conversion of the
shares of Series A Preferred Stock held by the Investor, (C) Series B Preferred
Stock held by the Investor, (D) shares of Common Stock issuable upon conversion
of the shares of Series B Preferred Stock held by the Investor, (E) other shares
of Common Stock acquired by the Investor after the date hereof unless acquired
in breach of any agreement between the Holder and the Company and (F) any
additional securities of the Company issued as a dividend or other distribution
with respect to, or in exchange for or in replacement of, any securities of the
Company held by the Investor, including but not limited to, those listed in
clauses (A), (B), (C), (D) and (E);
Registration Expenses: shall mean all reasonable expenses incurred by
the Company in compliance with Section 2(a), (b) and (c) hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, reasonable fees and expenses of
one counsel for all the Holders, blue sky fees and expenses and the reasonable
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company, which shall
be paid in any event by the Company);
2
security, securities: shall have the meaning set forth in Section 2(1)
of the Securities Act;
Securities Act: shall mean the Securities Act of 1933, as amended (or
any successor act), and the rules and regulations promulgated
thereunder; and
Selling Expenses: shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders other than reasonable fees and
expenses of one counsel for all the Holders.
SECTION 2. REGISTRATION RIGHTS
(a) Demand Registration.
(i) Request for Registration. If the Company shall receive from an
Initiating Holder, at any time, a written request that the Company effect
any registration with respect to all or a part of the Registrable
Securities, the Company will:
(1) promptly give written notice of the proposed registration,
qualification or compliance to all other Holders; and
(2) as soon as practicable, use its reasonable best efforts to effect
such registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws
and appropriate compliance with applicable regulations issued under
the Securities Act) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request
received by the Company within ten (10) business days after written
notice from the Company is given under Section 2(a)(i)(1) above;
provided, that the Company shall not be obligated to effect, or take
any action to effect, any such registration pursuant to this
Section 2(a):
(A) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless
the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act or applicable
rules or regulations thereunder;
(B) After the Company has effected one (1) such registration
pursuant to this Section 2(a) and such registration has been
declared or ordered effective and the sales of such Registrable
Securities shall have closed; provided, however, that a
registration shall not be deemed to constitute a registration
pursuant to this Section 2(a) in the event that less than ninety
percent (90%) of the Registrable Securities held by Holders
participating in the registration are permitted to participate in
such registration;
3
(C) If the Registrable Securities requested by all Holders to be
registered pursuant to such request do not have an anticipated
aggregate public offering price (before any underwriting
discounts and commissions) of not less than $[insert dollar
amount to 10% of the sum of (1) the total aggregate Series A
Purchase Price (as defined in the Investment Agreement) and
(2) the total aggregate Series B Purchase Price that is paid by
Appaloosa and the Investor under the Investment Agreement for
Shares (as defined in the Investment Agreement)];
(D) During the period starting with the date thirty (30) days
prior to the Company's good faith estimate of the date of filing
of, and ending on the date three (3) months immediately following
the effective date of, any registration statement pertaining to
securities of the Company (other than a registration of
securities in a Rule 145 transaction under the Securities Act,
with respect to an employee benefit plan or with respect to the
Company's first registered public offering of its stock);
provided, that the Company is actively employing in good faith
all reasonable efforts to cause such registration statement to
become effective; provided, however, that the Company may only
delay an offering pursuant to this Section 2(a)(i)(2)(D) for a
period of not more than thirty (30) days, if a filing of any
other registration statement is not made within that period and
the Company may only exercise this right once in any twelve
(12)-month period; or
(E) If the Company shall furnish to the Initiating Holders a
certificate signed by the President of the Company stating that
in the good faith judgment of the Board of Directors of the
Company it would be seriously detrimental to the Company or its
stockholders for a registration statement to be filed in the near
future, in which case the Company's obligation to use its best
efforts to comply with this Section 2(a) shall be deferred for a
period not to exceed ninety (90) days from the date of receipt of
written request from the Initiating Holders; provided, however,
that the Company shall not exercise such right more than once in
any twelve (12)-month period.
The registration statement filed pursuant to the request of the Initiating
Holders may, subject to the provisions of Section 2(a)(ii) below, include other
securities of the Company that are held by Persons who, by virtue of agreements
with the Company, are entitled to include their securities in any such
registration ("Other Stockholders"). In the event any Holder requests a
registration pursuant to this Section 2(a) in connection with a distribution of
Registrable Securities to its partners or members, the registration shall
provide for the resale by such partners or members, if requested by such Holder.
4
(ii) Underwriting. If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request
made pursuant to Section 2(a)(i).
If Other Stockholders request inclusion of their securities in the underwriting,
the Holders shall offer to include the securities of such Other Stockholders in
the underwriting and may condition such offer on their acceptance of the further
applicable provisions of this Section 2. The Holders whose shares are to be
included in such registration and the Company shall (together with all Other
Stockholders proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form with the representative
of the underwriter or underwriters selected for such underwriting by the
Initiating Holders and reasonably acceptable to the Company. Notwithstanding any
other provision of this Section 2(a), if the representative advises the Holders
in writing that marketing factors require a limitation on the number of shares
to be underwritten, the representative may limit the number of Registrable
Securities to be included in the registration and underwriting in accordance
with the Allocation Priority set forth in Section 2(b)(ii); provided that such
allocation shall be made in the following manner: (i) first, Pro Rata (as
defined below) to Registrable Securities and securities entitled to registration
under the Series B Registration Rights Agreement (as defined below), regardless
of the number of shares that can be sold without exceeding the Maximum Number of
Shares; (ii) second, to securities that the Company desires to sell, and
(iii) third, securities for the account of Other Stockholders that the Company
is obligated to register pursuant to written contractual arrangements with such
persons that can be sold, Pro Rata, in the case of (ii) and (iii) without
exceeding the Maximum Number of Shares. If any Holder or Other Stockholder who
has requested inclusion in such registration as provided herein disapproves of
the terms of the underwriting, such Person may elect to withdraw therefrom by
providing written notice to the Company, the underwriter and the Initiating
Holders. The securities so withdrawn shall also be withdrawn from registration.
(b) Company Registration.
(i) If the Company shall determine to register any of its equity
securities either for its own account or for the account of Other
Stockholders, other than a registration relating solely to employee benefit
plans, or a registration relating solely to a Rule 145 transaction under
the Securities Act, or a registration on any registration form which does
not permit secondary sales or does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:
(1) promptly give to each of the Holders a written notice thereof
(which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable blue sky
or other state securities laws); and
(2) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made by the Holders within ten (10) days after receipt of the
written notice from the Company described in clause (1) above,
5
except to the extent limited as set forth in Section 2(b)(ii) below. Such
written request may specify all or a part of the Holders' Registrable
Securities. In the event any Holder requests inclusion in a registration
pursuant to this Section 2(b) in connection with a distribution of
Registrable Securities to its partners or members, the registration shall
provide for the resale by such partners or members, if requested by such
Holder.
(ii) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 2(b)(i)(1) above. In such event, the right of
each of the Holders to registration pursuant to this Section 2(b) shall be
conditioned upon such Holders' participation in such underwriting and the
inclusion of such Holders' Registrable Securities in the underwriting to
the extent provided herein. The Holders whose shares are to be included in
such registration shall (together with the Company and the Other
Stockholders distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the representative of
the underwriter or underwriters selected for underwriting by the Company.
Notwithstanding any other provision of this Section 2(b), if the
representative determines that marketing factors require a limitation on
the number of shares to be underwritten, the representative may limit the
number of Registrable Securities to be included in the registration and
underwriting in accordance with the allocation priority set forth below.
The Company shall promptly advise all holders of securities requesting
registration of such limitation, and the number of shares of securities
that are entitled to be included in the registration and underwriting (the
"Maximum Number of Shares") shall be allocated in the following manner:
(i) first, the securities that the Company desires to sell, regardless of
the number of shares that can be sold without exceeding the Maximum Number
of Shares; (ii) second, both (A) the Registrable Securities held by the
Holders and (B) the securities held by holders of Series B Preferred Stock
entitled to registration under the Registration Rights Agreement, dated
_______, 200_, among the holders of Series B Preferred Stock and the
Company (the "Series B Registration Rights Agreement"), all pro rata in
accordance with the number of shares that each such Holder of Registrable
Securities or holder of securities entitled to registration under the
Series B Registration Rights Agreement, respectively, has requested be
included in such registration (such proportion is referred to herein as
"Pro Rata"), to the extent that the Maximum Number of Shares has not been
exceeded; and (iii) third, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clauses, the securities for the
account of Other Stockholders that the Company is obligated to register
pursuant to written contractual arrangements with such persons that can be
sold, Pro Rata, without exceeding the Maximum Number of Shares (the
foregoing allocation is referred to herein as the "Allocation Priority").
If any of the Holders or any officer, director or Other Stockholder
disapproves of the terms of any such underwriting, he she or it may elect
to withdraw therefrom by providing written notice to the Company and the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
(c) Form S-3. The Company shall use its reasonable best efforts to
qualify for registration on Form S-3 for secondary sales. After the Company has
qualified for the use of Form S-3, the Holders shall have the right to request
up to four (4) registrations on Form S-3
6
(such requests shall be in writing and shall state the number of shares of
Registrable Securities to be disposed of and the intended method of disposition
of shares by such holders), provided, that the Company shall not be obligated to
effect, or take any action to effect, any such registration pursuant to this
Section 2(c):
(i) Unless the Holder or Holders requesting registration propose to
dispose of shares of Registrable Securities having an aggregate price to
the public (before deduction of Selling Expenses) of more than $[insert
dollar amount to 5% of the sum of (1) the total aggregate Series A Purchase
Price (as defined in the Investment Agreement) and (2) the total aggregate
Series B Purchase Price that is paid by Appaloosa and the Investor under
the Investment Agreement for Shares (as defined in the Investment
Agreement)];
(ii) Within one hundred eighty (180) days of the effective date of the
most recent registration pursuant to this Section 2(c) in which securities
held by the requesting Holder could have been included for sale or
distribution;
(iii) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting
such registration, qualification or compliance, unless the Company is
already subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or regulations
thereunder;
(iv) During the period starting with the date thirty (30) days prior
to the Company's good faith estimate of the date of filing of, and ending
on the date three (3) months immediately following the effective date of,
any registration statement pertaining to securities of the Company (other
than a registration of securities in a Rule 145 transaction under the
Securities Act or with respect to an employee benefit plan); provided, that
the Company is actively employing in good faith all reasonable efforts to
cause such registration statement to become effective; provided, however,
that the Company may only delay an offering pursuant to this Section
2(c)(iv) for a period of not more than thirty (30) days, if a filing of any
other registration statement is not made within that period and the Company
may only exercise this right once in any twelve (12)-month period; or
(v) If the Company shall furnish to the Holders a certificate signed
by the President of the Company stating that in the good faith judgment of
the Board of Directors of the Company it would be seriously detrimental to
the Company or its stockholders for a registration statement to be filed in
the near future, in which case the Company's obligation to use its best
efforts to comply with this Section 2(c) shall be deferred for a period not
to exceed ninety (90) days from the date of receipt of written request from
the Holders; provided, however, that the Company shall not exercise such
right more than once in any twelve (12)-month period.
The Company shall give written notice to all Holders of the receipt of a request
for registration pursuant to this Section 2(c)and shall provide a reasonable
opportunity for other Holders to
7
participate in the registration; provided, that if the registration is for an
underwritten offering, the terms of Section 2(a)(ii) above shall apply to all
participants in such offering. Subject to the foregoing, the Company will use
its reasonable best efforts to effect promptly the registration of all shares of
Registrable Securities on Form S-3 to the extent requested by the Holder or
Holders thereof for purposes of disposition. In the event any Holder requests a
registration pursuant to this Section 2(c) in connection with a distribution of
Registrable Securities to its partners or members, the registration shall
provide for the resale by such partners or members, if requested by such Holder.
(d) Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Section 2 shall be borne by the Company, and all Selling Expenses shall be borne
by the Holders of the securities so registered pro rata on the basis of the
number of their shares so registered.
(e) Registration Procedures. In the case of each registration
effected by the Company pursuant to this Section 2, the Company will keep the
Holders, as applicable, advised in writing as to the initiation of each
registration and as to the completion thereof. At its reasonable expense, the
Company will:
(i) keep such registration effective for a period of ninety (90)
days;
(ii) furnish such number of prospectuses and other documents incident
thereto as each of the Holders, as applicable, from time to time may
reasonably request;
(iii) notify each Holder of Registrable Securities covered by such
registration at any time when a prospectus relating thereto is required to
be delivered under the Securities Act of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and
(iv) furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold
through underwriters or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to
such securities becomes effective, (1) an opinion, dated as of such date,
of the counsel representing the Company for the purposes of such
registration, in form and substance as is reasonably and customarily given
to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders participating in such registration
and (2) a letter, dated as of such date, from the independent certified
public accountants of the Company, in form and substance as is reasonably
and customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the
underwriters, if any, and if permitted by applicable accounting standards,
to the Holders participating in such registration.
8
(f) Indemnification.
(i) The Company will indemnify each Holder, each of its officers,
directors and partners and members, and each Person controlling each
Holder, with respect to each registration which has been effected pursuant
to this Section 2, and each underwriter, if any, and each person who
controls any underwriter, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained
in any such registration statement, prospectus, issuer free-writing
prospectus, offering circular or other document, or based on any omission
(or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and will reimburse each such Holder, each of its officers, directors and
partners and members, and each Person controlling each such Holder, each
such underwriter and each Person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or
action; provided, that the Company will not be liable in any such case to
the extent that any such claim, loss, damage, liability or expense arises
out of or is based on any untrue statement or omission based upon written
information furnished to the Company by such Holder or underwriter and
stated to be specifically for use therein; provided, however, that the
obligations of the Company to each Holder hereunder shall be limited to an
amount equal to the net proceeds to such Holder of securities sold in such
registration as contemplated herein.
(ii) Each Holder will, if Registrable Securities held by it are
included in the securities as to which such registration, qualification or
compliance is being effected, severally and not jointly, indemnify the
Company, each of its directors and officers and each underwriter, if any,
of the Company's securities covered by such a registration statement, each
Person who controls the Company or such underwriter, each Other Stockholder
and each of their respective officers, directors, partners and members, and
each Person controlling such Other Stockholder against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, issuer
free-writing prospectus, offering circular or other document made by such
Holder in writing, or based on any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make
the statements by such Holder therein not misleading, and will reimburse
the Company, the underwriters, and such Other Stockholders, and their
respective directors, officers, partners, members, Persons or control
persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in conformity with
written information furnished to the Company by such Holder and stated to
be specifically for use therein; provided, however, that the obligations of
each Holder hereunder shall be limited to an amount equal to the net
proceeds to such Holder of securities sold in such registration as
contemplated herein.
9
(iii) Each party entitled to indemnification under this Section 2(f)
(the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom; provided,
that counsel for the Indemnifying Party, who shall conduct the defense of
such claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld) and
the Indemnified Party may participate in such defense at such party's
expense (unless the Indemnified Party shall have reasonably concluded that
there may be a conflict of interest between the Indemnifying Party and the
Indemnified Party in such action, in which case the fees and expenses of
counsel shall be at the expense of the Indemnifying Party), and provided
further, that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 2(f) unless the Indemnifying Party is materially
prejudiced thereby. No Indemnifying Party, in the defense of any such claim
or litigation shall, except with the prior written consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation. Each Indemnified
Party shall furnish such information regarding itself or the claim in
question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with the defense of such claim
and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 2(f) is held
by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense
referred to herein, then the Indemnifying Party, in lieu of indemnifying
such Indemnified Party hereunder, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such loss, liability,
claim, damage or expense in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party on the one hand and of the
Indemnified Party on the other in connection with the statements or
omissions (or alleged statements or omissions) which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and
of the Indemnified Party shall be determined by reference to, among other
things, whether the untrue (or alleged untrue) statement of a material fact
or the omission (or alleged omission) to state a material fact relates to
information supplied by the Indemnifying Party or by the Indemnified Party
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with any underwritten public offering
contemplated by this Agreement are in conflict with the foregoing
provisions, the provisions in such underwriting agreement shall be
controlling.
10
(g) Information by the Holders.
(i) Each Holder including securities in any registration pursuant to
the terms of this Agreement shall furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder as the
Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Section 2.
(ii) In the event that, either immediately prior to or subsequent to
the effectiveness of any registration statement, any Holder shall
distribute Registrable Securities to its partners or members, such Holder
shall so advise the Company and provide such information as shall be
necessary to permit an amendment to such registration statement to provide
information with respect to such partners or members, as selling security
holders. Promptly following receipt of such information, the Company shall
file an appropriate amendment to such registration statement reflecting the
information so provided. Any incremental expense to the Company resulting
from such amendment shall be borne by such Holder.
(h) Rule 144 Reporting.
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, the Company agrees to:
(i) at all times make and keep public information available as those
terms are understood and defined in Rule 144 under the Securities Act
("Rule 144");
(ii) use its reasonable best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act at any time after it has become
subject to such reporting requirements; and
(iii) so long as a Holder owns any Registrable Securities, furnish to
such Holder, upon request, a written statement by the Company as to its
compliance with the reporting requirements of Rule 144, and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so
filed as such Holder may reasonably request in availing itself of any rule
or regulation of the Commission allowing the Holder to sell any such
securities without registration.
(i) Termination. The registration rights set forth in this Section 2
shall not be available to any Holder if, (i) in the written opinion of counsel
to the Company, all of the Registrable Securities then owned by such Holder
could be sold in any ninety (90)-day period pursuant to Rule 144(k) or are
otherwise freely saleable or (ii) all of the Registrable Securities
11
held by such Holder have been sold in a registration pursuant to the Securities
Act or pursuant to Rule 144.
(j) The registration rights set forth in this Section 2 may be
assigned, in whole or in part, to any transferee of Registrable Securities (who
shall be bound by all obligations of this Agreement).
SECTION 3. INTERPRETATION OF THIS AGREEMENT
(a) Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
SECTION 4. MISCELLANEOUS
(a) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed entirely within such State without regard to conflicts
of law principles.
(b) Section Headings. The headings of the sections and subsections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
(c) Notices.
(i) All communications under this Agreement shall be in writing and
shall be delivered by hand or facsimile or mailed by overnight courier or
by registered or certified mail, postage prepaid:
(1) if to the Company, to Dana Corporation (or the name of the
Company), 4500 Dorr Street, Toledo, OH 43615, Attention: General Counsel
and Secretary (facsimile: (419) 535-4544), or at such other address or
facsimile number as it may have furnished in writing to the Holders, with a
copy to Jones Day, 222 East 41st Street, New York, New York 10017
(facsimile: (212) 755-7306), Attention: Marilyn W. Sonnie, Esq.
(2) if to the Holders, to Appaloosa Management L.P., 26 Main Street,
Chatham, NJ 07928, Attention: James Bolin (j.bolin@amlp.com), Fax: (973)
701-7055, with a copy to White & Case LLP, Wachovia Financial Center, 200
South Biscayne Boulevard, Suite 4900, Miami, Florida 33131-2352, Attention:
Thomas E. Lauria (tlauria@whitecase.com) and Gerard Uzzi
(guzzi@whitecase.com), Fax: (305) 358-5744/5766, and to White & Case LLP,
1155 Avenue of the Americas, New York, New York 10036, Attention: John
Reiss (jreiss@whitecase.com) and Steven Teichman (steichman@whitecase.com),
Fax: 212-354-8113.
(ii) Any notice so addressed shall be deemed to be given: if delivered
by hand or facsimile, on the date of such delivery; if mailed by overnight
courier, on the first
12
business day following the date of such mailing; and if mailed by
registered or certified mail, on the third business day after the date of
such mailing.
(d) Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the Holders
by any photographic, photostatic, microfilm, microcard, miniature photographic
or other similar process and the Holders may destroy any original document so
reproduced. The parties hereto agree and stipulate that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Holders in the regular course
of business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
(e) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties.
(f) Entire Agreement; Amendment and Waiver. This Agreement
constitutes the entire understanding of the parties hereto relating to the
subject matter hereof and supersedes all prior understandings among such
parties. This Agreement may be amended, and the observance of any term of this
Agreement may be waived, with (and only with) the written consent of the Company
and the Holders holding a majority of the then outstanding Registrable
Securities. Any amendment or waiver effected in accordance with this
Section 4(f) shall be binding upon each Holder of Registrable Securities then
outstanding (whether or not such Holder consented to any such amendment or
waiver).
(g) Severability. In the event that any part or parts of this
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not affect the
remaining provisions of this Agreement which shall remain in full force and
effect.
(h) Counterparts. This Agreement may be executed in two or more
counterparts (including by facsimile), each of which shall be deemed an original
and all of which together shall be considered one and the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
13
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.
[NEW DANA CORPORATION]
By:
----------------------
Name:
Title:
APPALOOSA MANAGEMENT, L.P.
By: ______________, its General Partner
By:
-------------------------------------
Name:
Title:
[PURCHASER]
By:
-------------------------
Name:
Title: Authorized Person
[White & Case Draft of 9/21/07]
EXHIBIT D
[NEW DANA CORPORATION]
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of _______, 2007 (the
"Agreement") by [New Dana Corporation], a ___________ corporation (the
"Company") in favor of each purchaser of 4.0% Series B Convertible Preferred
Stock listed on Schedule A (the "Investors").(1)
R E C I T A L S
WHEREAS, the Investors have agreed to purchase shares of 4.0% Series B
Convertible Preferred Stock, par value $0.01 per share, of the Company (the
"Series B Preferred Stock"); and
WHEREAS, the shares of Series B Preferred Stock are convertible into
shares of common stock, par value $0.01 per share, of the Company (the "Common
Stock"); and
WHEREAS, the Company has agreed, as a condition precedent to the
Investors' obligations under the Subscription Agreement, to grant the Investors
certain registration rights; and
WHEREAS, the Company and the Investors desire to define the
registration rights of the Investor on the terms and subject to the conditions
herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following terms have the respective
meanings set forth below:
Allocation Priority: shall have the meaning set forth in Section
2(b)(ii);
Agreement: shall mean this Agreement among the Investors and the
Company;
Commission: shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act;
- ----------
(1) Assuming that the 1145 exemption is available, purchasers of Series B
Preferred in the Rights offering will be able to trade freely unless they are a
deemed "underwriter". Accordingly, this agreement would only be necessary for
persons that are deemed underwriters.
Exchange Act: shall mean the Securities Exchange Act of 1934, as
amended (or any successor act), and the rules and regulations promulgated
thereunder;
Holder: shall mean any holder of Registrable Securities;
Initiating Holder: shall mean any Holder or Holders who in the
aggregate are Holders of more than 50% of the then outstanding Registrable
Securities;
Maximum Number of Shares: shall have the meaning set forth in Section
2(b)(ii);
Person: shall mean an individual, partnership, joint-stock company,
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof;
Pro Rata: shall have the meaning set forth in Section 2(b)(ii);
Register, Registered and Registration: shall mean a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
Registrable Securities: shall mean any (A) Series B Preferred Stock
held by the Investors, (B) shares of Common Stock issuable upon conversion of
the shares of Series B Preferred Stock held by the Investors, (C) other shares
of Common Stock acquired by the Investors after the date hereof unless acquired
in breach of any agreement between the Holder and the Company and (D) additional
securities of the Company issued as a dividend or other distribution with
respect to, or in exchange for or in replacement of any securities of the
Company held by the Investors, including but not limited to, those listed in
clauses (A), (B) and (C);
Registration Expenses: shall mean all reasonable expenses incurred by
the Company in compliance with Section 2(a), (b) and (c) hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, reasonable fees and expenses of
one counsel for all the Holders, blue sky fees and expenses and the reasonable
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company, which shall
be paid in any event by the Company);
security, securities: shall have the meaning set forth in Section 2(1)
of the Securities Act;
Securities Act: shall mean the Securities Act of 1933, as amended (or
any successor act), and the rules and regulations promulgated thereunder; and
Selling Expenses: shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders other than reasonable fees and
expenses of one counsel for all the Holders.
SECTION 2. REGISTRATION RIGHTS
(a) Demand Registration.
(i) Request for Registration. If the Company shall receive from an
Initiating Holder, at any time, a written request that the Company effect
any registration with respect to all or a part of the Registrable
Securities, the Company will:
(1) promptly give written notice of the proposed registration,
qualification or compliance to all other Holders; and
(2) as soon as practicable, use its reasonable best efforts to effect
such registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act) as
may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the
Registrable Securities of any Holder or Holders joining in such request as
are specified in a written request received by the Company within ten (10)
business days after written notice from the Company is given under Section
2(a)(i)(1) above; provided, that the Company shall not be obligated to
effect, or take any action to effect, any such registration pursuant to
this Section 2(a):
(A) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless
the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act or applicable
rules or regulations thereunder;
(B) After the Company has effected one (1) such registration
pursuant to this Section 2(a) and such registration has been
declared or ordered effective and the sales of such Registrable
Securities shall have closed; provided, however, that a
registration shall not be deemed to constitute a registration
pursuant to this Section 2(a) in the event that less than ninety
percent (90%) of the Registrable Securities held by Holders
participating in the registration are permitted to participate in
such registration;
(C) If the Registrable Securities requested by all Holders to be
registered pursuant to such request do not have an anticipated
aggregate public offering price (before any underwriting
discounts and commissions) of not less than $[insert dollar
amount equal to 10% of the total aggregate Series B Purchase
Price (as defined in the Investment
Agreement) that is paid by all of the Investors under the
Investment Agreement for shares of Series B Preferred (as defined
in the Investment Agreement)];
(D) During the period starting with the date thirty (30) days
prior to the Company's good faith estimate of the date of filing
of, and ending on the date three (3) months immediately following
the effective date of, any registration statement pertaining to
securities of the Company (other than a registration of
securities in a Rule 145 transaction under the Securities Act,
with respect to an employee benefit plan or with respect to the
Company's first registered public offering of its stock);
provided, that the Company is actively employing in good faith
all reasonable efforts to cause such registration statement to
become effective; provided, however, that the Company may only
delay an offering pursuant to this Section 2(a)(i)(2)(D) for a
period of not more than thirty (30) days, if a filing of any
other registration statement is not made within that period and
the Company may only exercise this right once in any twelve
(12)-month period; or
(E) If the Company shall furnish to the Initiating Holders a
certificate signed by the President of the Company stating that
in the good faith judgment of the Board of Directors of the
Company it would be seriously detrimental to the Company or its
stockholders for a registration statement to be filed in the near
future, in which case the Company's obligation to use its best
efforts to comply with this Section 2(a) shall be deferred for a
period not to exceed ninety (90) days from the date of receipt of
written request from the Initiating Holders; provided, however,
that the Company shall not exercise such right more than once in
any twelve (12)-month period.
The registration statement filed pursuant to the request of the Initiating
Holders may, subject to the provisions of Section 2(a)(ii) below, include other
securities of the Company that are held by Persons who, by virtue of agreements
with the Company, are entitled to include their securities in any such
registration ("Other Stockholders"). In the event any Holder requests a
registration pursuant to this Section 2(a) in connection with a distribution of
Registrable Securities to its partners or members, the registration shall
provide for the resale by such partners or members, if requested by such Holder.
(ii) Underwriting. If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request
made pursuant to Section 2(a)(i).
If Other Stockholders request inclusion of their securities in the underwriting,
the Holders shall offer to include the securities of such Other Stockholders in
the underwriting and may condition such offer on their acceptance of the further
applicable provisions of this Section 2. The Holders whose shares are to be
included in such registration and the Company shall (together with all
Other Stockholders proposing to distribute their securities through such
underwriting) enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected for such underwriting
by the Initiating Holders and reasonably acceptable to the Company.
Notwithstanding any other provision of this Section 2(a), if the representative
advises the Holders in writing that marketing factors require a limitation on
the number of shares to be underwritten, the representative may limit the number
of Registrable Securities to be included in the registration and underwriting in
accordance with the Allocation Priority set forth in Section 2(b)(ii); provided
that such allocation shall be made in the following manner: (i) first, Pro Rata
(as defined below) to Registrable Securities and securities entitled to
registration under the Series A Registration Rights Agreement (as defined
below), regardless of the number of shares that can be sold without exceeding
the Maximum Number of Shares; (ii) second, to securities that the Company
desires to sell, and (iii) third, securities for the account of Other
Stockholders that the Company is obligated to register pursuant to written
contractual arrangements with such persons that can be sold, Pro Rata, in the
case of (ii) and (iii) without exceeding the Maximum Number of Shares. If any
Holder or Other Stockholder who has requested inclusion in such registration as
provided herein disapproves of the terms of the underwriting, such Person may
elect to withdraw therefrom by providing written notice to the Company, the
underwriter and the Initiating Holders. The securities so withdrawn shall also
be withdrawn from registration.
(b) Company Registration.
(i) If the Company shall determine to register any of its equity
securities either for its own account or for the account of Other
Stockholders, other than a registration relating solely to employee benefit
plans, or a registration relating solely to a Rule 145 transaction under
the Securities Act, or a registration on any registration form which does
not permit secondary sales or does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:
(1) promptly give to each of the Holders a written notice thereof
(which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable blue sky
or other state securities laws); and
(2) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made by the Holders within ten (10) days after receipt of the
written notice from the Company described in clause (1) above, except to
the extent limited as set forth in Section 2(b)(ii) below. Such written
request may specify all or a part of the Holders' Registrable Securities.
In the event any Holder requests inclusion in a registration pursuant to
this Section 2(b) in connection with a distribution of Registrable
Securities to its partners or members, the registration shall provide for
the resale by such partners or members, if requested by such Holder.
(ii) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise each
of the Holders as a part of the written notice given pursuant to Section
2(b)(i)(1) above. In such event, the right of each of the Holders to
registration pursuant to this Section 2(b) shall be conditioned upon such
Holders' participation in such underwriting and the inclusion of such
Holders' Registrable Securities in the underwriting to the extent provided
herein. The Holders whose shares are to be included in such registration
shall (together with the Company and the Other Stockholders distributing
their securities through such underwriting) enter into an underwriting
agreement in customary form with the representative of the underwriter or
underwriters selected for underwriting by the Company. Notwithstanding any
other provision of this Section 2(b), if the representative determines that
marketing factors require a limitation on the number of shares to be
underwritten, the representative may limit the number of Registrable
Securities to be included in the registration and underwriting in
accordance with the allocation priority set forth below. The Company shall
promptly advise all holders of securities requesting registration of such
limitation, and the number of shares of securities that are entitled to be
included in the registration and underwriting (the "Maximum Number of
Shares") shall be allocated in the following manner: (i) first, the
securities that the Company desires to sell, regardless of the number of
shares that can be sold without exceeding the Maximum Number of Shares;
(ii) second, both (A) the securities entitled to registration under the
Registration Rights Agreement, dated _______, 200_, between Appaloosa,
[Purchaser] and the Company (the "Series A Registration Rights Agreement")
and (B) the Registrable Securities that can be sold, all pro rata in
accordance with the number of securities entitled to registration under the
Series A Registration Rights Agreement and Registrable Securities,
respectively, that each such holder of securities entitled to registration
under the Series A Registration Rights Agreement or Holder has requested be
included in such registration (such proportion is referred to herein as
"Pro Rata"), without exceeding the Maximum Number of Shares; (iii) third,
the Registrable Securities that can be sold, Pro Rata, without exceeding
the Maximum Number of Shares; and (iv) fourth, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clauses,
the securities for the account of Other Stockholders that the Company is
obligated to register pursuant to written contractual arrangements with
such persons that can be sold, Pro Rata, without exceeding the Maximum
Number of Shares (the foregoing allocation is referred to herein as the
"Allocation Priority"). If any of the Holders or any officer, director or
Other Stockholder disapproves of the terms of any such underwriting, he she
or it may elect to withdraw therefrom by providing written notice to the
Company and the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
(c) Form S-3. The Company shall use its reasonable best efforts to
qualify for registration on Form S-3 for secondary sales. After the Company has
qualified for the use of Form S-3, the Holders shall have the right to request
up to four (4) registrations on Form S-3 (such requests shall be in writing and
shall state the number of shares of Registrable Securities to be disposed of and
the intended method of disposition of shares by such holders), provided, that
the Company shall not be obligated to effect, or take any action to effect, any
such registration pursuant to this Section 2(c):
(i) Unless the Holder or Holders requesting registration propose to
dispose of shares of Registrable Securities having an aggregate price to
the public (before deduction
of Selling Expenses) of more than $[insert dollar amount equal to 5% of the
the total aggregate Series B Purchase Price (as defined in the Investment
Agreement) that is paid by all of the Investors under the Investment
Agreement for shares of Series B Preferred (as defined in the Investment
Agreement)];
(ii) Within one hundred eighty (180) days of the effective date of the
most recent registration pursuant to this Section 2(c) in which securities
held by the requesting Holder could have been included for sale or
distribution;
(iii) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting
such registration, qualification or compliance, unless the Company is
already subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or regulations
thereunder;
(iv) During the period starting with the date thirty (30) days prior
to the Company's good faith estimate of the date of filing of, and ending
on the date three(3) months immediately following the effective date of,
any registration statement pertaining to securities of the Company (other
than a registration of securities in a Rule 145 transaction under the
Securities Act or with respect to an employee benefit plan); provided, that
the Company is actively employing in good faith all reasonable efforts to
cause such registration statement to become effective; provided, however,
that the Company may only delay an offering pursuant to this Section
2(c)(iv) for a period of not more than thirty (30) days, if a filing of any
other registration statement is not made within that period and the Company
may only exercise this right once in any twelve (12)-month period; or
(v) If the Company shall furnish to the Holders a certificate signed
by the President of the Company stating that in the good faith judgment of
the Board of Directors of the Company it would be seriously detrimental to
the Company or its stockholders for a registration statement to be filed in
the near future, in which case the Company's obligation to use its best
efforts to comply with this Section 2(c) shall be deferred for a period not
to exceed ninety (90) days from the date of receipt of written request from
the Holders; provided, however, that the Company shall not exercise such
right more than once in any twelve (12)-month period.
The Company shall give written notice to all Holders of the receipt of a request
for registration pursuant to this Section 2(c)and shall provide a reasonable
opportunity for other Holders to participate in the registration; provided, that
if the registration is for an underwritten offering, the terms of Section
2(a)(ii) above shall apply to all participants in such offering. Subject to the
foregoing, the Company will use its reasonable best efforts to effect promptly
the registration of all shares of Registrable Securities on Form S-3 to the
extent requested by the Holder or Holders thereof for purposes of disposition.
In the event any Holder requests a registration pursuant to this Section 2(c) in
connection with a distribution of Registrable Securities to its partners or
members, the registration shall provide for the resale by such partners or
members, if requested by such Holder.
(d) Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Section 2 shall be borne by the Company, and all Selling Expenses shall be borne
by the Holders of the securities so registered pro rata on the basis of the
number of their shares so registered.
(e) Registration Procedures. In the case of each registration
effected by the Company pursuant to this Section 2, the Company will keep the
Holders, as applicable, advised in writing as to the initiation of each
registration and as to the completion thereof. At its reasonable expense, the
Company will:
(i) keep such registration effective for a period of ninety (90)
days;
(ii) furnish such number of prospectuses and other documents incident
thereto as each of the Holders, as applicable, from time to time may
reasonably request;
(iii) notify each Holder of Registrable Securities covered by such
registration at any time when a prospectus relating thereto is required to
be delivered under the Securities Act of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and
(iv) furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold
through underwriters or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to
such securities becomes effective, (1) an opinion, dated as of such date,
of the counsel representing the Company for the purposes of such
registration, in form and substance as is reasonably and customarily given
to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders participating in such registration
and (2) a letter, dated as of such date, from the independent certified
public accountants of the Company, in form and substance as is reasonably
and customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the
underwriters, if any, and if permitted by applicable accounting standards,
to the Holders participating in such registration.
(f) Indemnification.
(i) The Company will indemnify each of the Holders, as applicable,
each of its officers, directors and partners and members, and each Person
controlling each of the Holders, with respect to each registration which
has been effected pursuant to this Section 2, and each underwriter, if any,
and each person who controls any underwriter, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) of a material
fact contained
in any such registration statement, prospectus, issuer free-writing
prospectus, offering circular or other document, or based on any omission
(or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and will reimburse each of such Holders, each of its officers, directors
and partners and members, and each Person controlling each of such Holders,
each such underwriter and each Person who controls any such underwriter,
for any legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or
action; provided, that the Company will not be liable in any such case to
the extent that any such claim, loss, damage, liability or expense arises
out of or is based on any untrue statement or omission based upon written
information furnished to the Company by the Holders or underwriter and
stated to be specifically for use therein; provided, however, that the
obligations of the Company to each ofthe Holders hereunder shall be limited
to an amount equal to the net proceeds to such Holder of securities sold in
such registration as contemplated herein.
(ii) Each of the Holders will, if Registrable Securities held by it
are included in the securities as to which such registration, qualification
or compliance is being effected, severally and not jointly, indemnify the
Company, each of its directors and officers and each underwriter, if any,
of the Company's securities covered by such a registration statement, each
Person who controls the Company or such underwriter, each Other Stockholder
and each of their respective officers, directors, partners and members, and
each Person controlling such Other Stockholder against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, issuer
free-writing prospectus, offering circular or other document made by such
Holder in writing, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statements by such Holder therein not misleading, and will reimburse the
Company, the underwriters, and such Other Stockholders, and their
respective directors, officers, partners, members, Persons or control
persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in conformity with
written information furnished to the Company by such Holder and stated to
be specifically for use therein; provided, however, that the obligations of
each of the Holders hereunder shall be limited to an amount equal to the
net proceeds to such Holder of securities sold in such registration as
contemplated herein.
(iii) Each party entitled to indemnification under this Section 2(f)
(the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom; provided,
that counsel for the Indemnifying Party, who shall conduct the defense of
such claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party
(whose approval shall not unreasonably be withheld) and the Indemnified
Party may participate in such defense at such party's expense (unless the
Indemnified Party shall have reasonably concluded that there may be a
conflict of interest between the Indemnifying Party and the Indemnified
Party in such action, in which case the fees and expenses of counsel shall
be at the expense of the Indemnifying Party), and provided further, that
the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this
Section 2(f) unless the Indemnifying Party is materially prejudiced
thereby. No Indemnifying Party, in the defense of any such claim or
litigation shall, except with the prior written consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each Indemnified Party
shall furnish such information regarding itself or the claim in question as
an Indemnifying Party may reasonably request in writing and as shall be
reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 2(f) is held
by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense
referred to herein, then the Indemnifying Party, in lieu of indemnifying
such Indemnified Party hereunder, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such loss, liability,
claim, damage or expense in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party on the one hand and of the
Indemnified Party on the other in connection with the statements or
omissions (or alleged statements or omissions) which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and
of the Indemnified Party shall be determined by reference to, among other
things, whether the untrue (or alleged untrue) statement of a material fact
or the omission (or alleged omission) to state a material fact relates to
information supplied by the Indemnifying Party or by the Indemnified Party
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with any underwritten public offering
contemplated by this Agreement are in conflict with the foregoing
provisions, the provisions in such underwriting agreement shall be
controlling.
(g) Information by the Holders.
(i) Each of the Holders including securities in any registration
shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request
in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Section 2.
(ii) In the event that, either immediately prior to or subsequent to
the effectiveness of any registration statement, any Holder shall
distribute Registrable Securities to its partners or members, such Holder
shall so advise the Company and provide such information as shall be
necessary to permit an amendment to such registration statement to provide
information with respect to such partners or members, as selling security
holders. Promptly following receipt of such information, the Company shall
file an appropriate amendment to such registration statement reflecting the
information so provided. Any incremental expense to the Company resulting
from such amendment shall be borne by such Holder.
(h) Rule 144 Reporting.
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, the Company agrees to:
(i) at all times make and keep public information available as those
terms are understood and defined in Rule 144 under the Securities Act
("Rule 144");
(ii) use its reasonable best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act at any time after it has become
subject to such reporting requirements; and
(iii) so long as a Holder owns any Registrable Securities, furnish to
such Holder, upon request, a written statement by the Company as to its
compliance with the reporting requirements of Rule 144, and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so
filed as such Holder may reasonably request in availing itself of any rule
or regulation of the Commission allowing the Holder to sell any such
securities without registration.
(i) Termination. The registration rights set forth in this Section 2
shall not be available to any Holder if, (i) in the written opinion of counsel
to the Company, all of the Registrable Securities then owned by such Holder
could be sold in any ninety (90)-day period pursuant to Rule 144(k) or are
otherwise freely saleable or (ii) all of the Registrable Securities held by such
Holder have been sold in a registration pursuant to the Securities Act or
pursuant to Rule 144.
(j) The registration rights set forth in this Section 2 may be
assigned, in whole or in part, to any transferee of Registrable Securities (who
shall be bound by all obligations of this Agreement).
SECTION 3. INTERPRETATION OF THIS AGREEMENT
(a) Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
SECTION 4. MISCELLANEOUS
(a) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed entirely within such State without regard to conflicts
of law principles.
(b) Section Headings. The headings of the sections and subsections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
(c) Notices.
(i) All communications under this Agreement shall be in writing and
shall be delivered by hand or facsimile or mailed by overnight courier or
by registered or certified mail, postage prepaid:
(1) if to the Company, to Dana Corporation (or the name of the
Company), 4500 Dorr Street, Toledo, OH 43615, Attention: General Counsel
and Secretary (facsimile: (419) 535-4544), or at such other address or
facsimile numbers as it may have furnished in writing to the Holders, with
a copy to Jones Day, 222 East 41st Street, New York, New York 10017
(facsimile: (212) 755-7306), Attention: Marilyn W. Sonnie, Esq.
(2) if to the Holders, to the address or facsimile provided on
Schedule A, or at such other address or facsimile number as may have been
furnished the Company in writing, with a copy to: Appaloosa Management
L.P., 26 Main Street, Chatham, NJ 07928, Attention: James Bolin
(j.bolin@amlp.com), Fax: (973) 701-7055, and with a copy to White & Case
LLP, Wachovia Financial Center, 200 South Biscayne Boulevard, Suite 4900,
Miami, Florida 33131-2352, Attention: Thomas E. Lauria
(tlauria@whitecase.com) and Gerard Uzzi (guzzi@whitecase.com), Fax: (305)
358-5744/5766, and to White & Case LLP, 1155 Avenue of the Americas, New
York, New York 10036, Attention: John Reiss (jreiss@whitecase.com) and
Steven Teichman (steichman@whitecase.com), Fax: 212-354-8113.
(ii) Any notice so addressed shall be deemed to be given: if delivered
by hand or facsimile, on the date of such delivery; if mailed by overnight
courier, on the first business day following the date of such mailing; and
if mailed by registered or certified mail, on the third business day after
the date of such mailing.
(d) Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the Holders
by any photographic, photostatic, microfilm, microcard, miniature photographic
or other similar process and the Holders may
destroy any original document so reproduced. The parties hereto agree and
stipulate that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by the
Holders in the regular course of business) and that any enlargement, facsimile
or further reproduction of such reproduction shall likewise be admissible in
evidence.
(e) Successors and Assigns; Third Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon and be enforceable by the
successors and assigns of each of the parties. Each Holder is an express third
party beneficiary of this Agreement, shall be deemed a party hereto for all
purposes hereof, and shall be entitled to enforce the provisions of this
Agreement as if a signatory hereto.
(f) Entire Agreement; Amendment and Waiver. This Agreement
constitutes the entire understanding of the parties hereto relating to the
subject matter hereof and supersedes all prior understandings among such
parties. This Agreement may be amended, and the observance of any term of this
Agreement may be waived, with (and only with) the written consent of the Company
and the Holders holding a majority of the then outstanding Registrable
Securities. Any amendment or waiver effected in accordance with this Section
4(f) shall be binding upon each Holder of Registrable Securities then
outstanding (whether or not such Holder consented to any such amendment or
waiver).
(g) Severability. In the event that any part or parts of this
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not affect the
remaining provisions of this Agreement which shall remain in full force and
effect.
(h) Counterparts. This Agreement may be executed in two or more
counterparts (including by facsimile), each of which shall be deemed an original
and all of which together shall be considered one and the same agreement.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of
the date first set forth above.
[NEW DANA CORPORATION]
By:
--------------------------
Name:
Title:
SCHEDULE A
INVESTORS
[White & Case Draft of 9/21/07]
Exhibit E
[Name of legal entity and trading unit]
[Address]
Re: In re Dana Corporation, et al., Debtors,
(Case No. 06-10354 (BRL)), Jointly Administered
Dear Sir or Madam:
On [o], 2007, the above-referenced Debtors filed the Motion of Debtors And
Debtors In Possession For Entry Of An Order (A) Approving Settlement Agreements
With The United Steel Workers And United Autoworkers, Pursuant To 11 U.S.C.
Sections 1113 And 1114(E) And Federal Rule Of Bankruptcy Procedure 9019, And (B)
Authorizing The Debtors To Enter Into Plan Support Agreement, Investment
Agreement And Related Agreements, Pursuant To 11 U.S.C. Sections 105(A), 363(B),
364(C)(1), 503 And 507, dated [o], 2007 (the "Motion"), which Motion attached
thereto, among other things, the Plan Support Agreement and Investment Agreement
Term Sheet.(1)
Reference is made to Section 8(f) of the Articles of Serial Designation of 4.0%
Series A Convertible Preferred Stock and 4.0% Series B Convertible Preferred
Stock setting forth certain restrictions relating to the Qualified Securities,
as may be amended from time to time (collectively, the "Shorting Restrictions").
The Debtor hereby agrees to waive and does waive (and Appaloosa shall not and
does not object to such waiver) any and all rights to enforce the provisions of
the Shorting Restrictions against any Qualified Marketmaker (as defined below)
in respect of transactions by such Qualified Marketmaker in respect of Qualified
Securities (as defined below) (i) conducted solely in the ordinary course of its
broker/dealer or market maker business, (ii) accommodating customer orders, and
(iii) not entered into with a view towards establishing directionally biased
positions (including without limitation engaging in arbitrage positions with
respect to the Preferred Stock (as defined in the Investment Agreement)) for the
proprietary account of such Qualified Marketmaker, whether in a proprietary
trading unit or otherwise, provided however that so long as the business unit to
which this letter is addressed maintains the confidentiality of all non-public
information relating to the Debtor that is now in, or in the future comes into,
its possession, using the same standard of confidentiality [name of legal
entity] uses to maintain the confidentiality of its own confidential
information, other proprietary business units of [name of legal entity] shall
not be subject to the provisions of Section 8(f) unless such unit otherwise
acquires shares of the 4.0% Series A Convertible Preferred Stock and 4.0% Series
B Convertible Preferred Stock.
For these purposes, a Qualified Marketmaker means an entity that (i) holds
itself out to the public as standing ready in the ordinary course of its
business to purchase from customers and sell to customers Qualified Securities
(or to enter with customers into long and short positions in derivative
contracts that reference Qualified Securities), in its capacity as a dealer or
market
- ----------
(1) Unless otherwise defined herein, all capitalized terms shall have the
meaning set forth in the Motion.
maker in such Qualified Securities, (ii) in fact regularly makes a two-way
market in such Qualified Securities, and (iii) consistently has filed its U.S.
federal income tax returns on the basis that such business constituted a
securities dealer business within the scope of section 475(a) of the Internal
Revenue Code of 1986, as amended. An entity that is under common control with or
controlled by a Qualified Marketmaker shall be considered a Qualified
Marketmaker for purposes of this waiver (and the limitations to this waiver
expressly provided herein) to the extent it satisfies conditions (i) and (ii) of
the preceding sentence.
For these purposes, the term "Qualified Securities" means (i) New Common Stock
(as defined in the Investment Agreement Term Sheet) and (ii) options, forward
contracts, swaps or other derivative contracts that require the delivery of such
securities, or that require the payment of money determined by reference to the
value or yield of such securities.
The signatories hereby represent that they are duly authorized by their
respective institutions to execute this agreement.
Please acknowledge your acceptance of the above referenced waiver by executing
and signing below. By doing so, you hereby represent to the undersigned, to the
best of your knowledge, that such business unit is, as of the date hereof, the
only entity, division or unit of [name of legal entity] that holds claims
against the Debtor in a proprietary capacity.
Appaloosa Management L.P.
By:
-----------------------------------
Name:
Title:
Dana Corporation
By:
-----------------------------------
Name:
Title:
Acknowledged and Accepted:
[Trading unit and name of legal entity]
By:
-----------------------------------
Name:
Title: