SETTLEMENT AGREEMENT

This Settlement Agreement (the “Agreement”) is entered into as of November 20,
2007 (the “Execution Date”) by and between: (i) Dana Corporation (“Dana”), on
behalf of itself and its direct and indirect wholly-owned subsidiaries
(collectively, the “Dana Entities”); and (ii) Affinia Group Inc. (“Affinia”), on
behalf of itself and its direct and indirect wholly-owned subsidiaries
(collectively, the “Affinia Entities”). Each of the Dana Entities and the
Affinia Entities may be referred to herein as a “Party” and collectively as
the “Parties.”

RECITALS:

A.

On March 3, 2006 (the “Petition Date”), Dana and 40 of its affiliates
(collectively with Dana, the “Debtors”) filed petitions for relief under
chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the
United States Bankruptcy Court for the Southern District of New York
(the “Bankruptcy Court”). The Debtors’ chapter 11 cases (collectively,
the “Bankruptcy Cases”) are being jointly administered under Case
Number 06-10354 (BRL). On October 23, 2007, the Debtors filed their Third
Amended Joint Plan of Reorganization (Docket No. 6671) (as it may be amended,
the “Plan”) and a related Disclosure Statement, which was approved by the
Bankruptcy Court on that date.

B.

As of July 8, 2004, Dana and Affinia entered into that certain Stock and Asset
Purchase Agreement (the “Purchase Agreement”), which provided for, among other
things, the sale of Dana’s aftermarket business to Affinia (the “Sale
Transaction”) for approximately $1.1 billion in cash, a Seller Subordinated Note
in the face amount of $74.5 million (the “Affinia Note”) from Affinia Group
Holdings Inc. (“Affinia Holdings”) and other consideration. The closing of the
Sale Transaction occurred on November 30, 2004 (the “Closing Date”).

C.

On November 30, 2004, in connection with the closing of the Sale Transaction
under the Purchase Agreement, Dana and Affinia also entered into that certain
Spicer Trademark License Agreement between Dana and Affinia (the “Spicer
Trademark License”), effective as of November 30, 2004. The Spicer Trademark
License, among other things, granted Affinia a non-exclusive license for the use
of the “Spicer” trademark and the “www.spicerchassis.com” domain name in
exchange for potential future royalties. The term of the Spicer Trademark
License currently runs through December 31, 2029.

D.

In addition to the Purchase Agreement, the Spicer Trademark License and the
Affinia Note, Dana and Affinia (or their respective affiliates) also entered
into various other ancillary agreements in connection with the Sale Transaction
(collectively, the “Other Ancillary Agreements”), including transition services
agreements, other trademark license agreements, distribution and other
commercial agreements and other typical closing agreements.

E.

As of the closing of the Sale Transaction, Quinton Hazell (“Quinton Hazell”),
now owned by Affinia, was a foreign subsidiary of Dana. At the time of the
closing, Quinton Hazell owed $533,743 as an intercompany obligation to Dana
Spicer Europe, Ltd. (the “Quinton Hazell Receivable”). Dana believes that,
pursuant to the terms of the Purchase Agreement,

 

 

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Affinia owes Dana on account of the Quinton Hazell Receivable. Affinia has
disputed this claim and asserted instead that the Dana Entities owe amounts in
excess of the Quinton Hazell Receivable to Quinton Hazell.

F.

As part of the Sale Transaction, Affinia acquired certain real property and
improvements located in McHenry, Illinois, where Affinia operates a Distribution
Center. A portion of the property comprising this facility, consisting of
approximately 12.39 acres identified as “Lot 63” (DOC 94R045165, PIN
14-10-202-002) in the McHenry Corporate Center and located in McHenry, Illinois
(the “McHenry Property”), was not transferred to Affinia and title to the
McHenry Property remains in the name of one of the Dana Entities. Affinia
asserts that Dana was required under the Purchase Agreement to transfer the
McHenry Property to Affinia.

G.

In late 2006, Dana Canada Corp. (“Dana Canada”) transferred a workers’
compensation refund received from the Ontario Workers Compensation Board,
totaling $351,760.00 (the “Workers’ Compensation Refund”), to Affinia Canada
Corp. (“Affinia Canada”). Dana believes the Workers’ Compensation Refund was
transferred to Affinia Canada in error and has requested its return.

H.

Affinia is in possession of certain trailers previously leased by Dana from
General Electric Capital Corp. (collectively, the “Trailers”). Title to the
Trailers remains in the name of Dana. Affinia asserts that Dana was required
under the Purchase Agreement to transfer title to these Trailers to Affinia. A
schedule identifying the Trailers is attached hereto as Exhibit A.

I.

Affinia asserts that the Dana Entities were required to consent to the transfer
of certain software licenses to the Affinia Entities. Affinia thus has requested
that the Dana Entities consent to the transfer of certain software license
agreements for PTC software from the Dana Entities to the Affinia Entities and
pay the related assignment fee (the “PTC Software License”). Dana has not agreed
to pay the transfer fees relating to the PTC Software Licenses and does not
agree that it is required to do so.

J.

Affinia asserts that the Dana Entities were obligated to, and has requested that
the Dana Entities, pay 50% of the costs of the shutdown of Affinia Canada’s
Burnaby, British Columbia warehouse, pursuant to Section 15.5 of the Warehousing
Services Agreement, dated November 30, 2004, between Dana Canada and Affinia
Canada. The Dana Entities have not agreed to pay the requested costs.

K.

Dana currently purchases certain products from Affinia on a purchase order
basis. This supply arrangement was the subject of an Essential Supplier
Agreement between Dana and Affinia dated August 31, 2006 (the “Essential
Supplier Agreement”), which includes commercial terms that will expire upon
Dana’s emergence from chapter 11. In connection with this supply relationship
and numerous other claims against Dana, Affinia filed Proof of Claim No. 11676
in the amount of $429,579.00 against Dana (the “Trade Claim”). Dana consented to
the allowance of the Trade Claim in a letter agreement dated August 30, 2006.

 

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L.

During the Debtors’ chapter 11 cases, in addition to the Trade Claim, the
Affinia Entities filed certain proofs of claims against Dana and the other
Debtors (collectively, the “Affinia Claims”).

M.

Pursuant to an Order of the Bankruptcy Court dated February 23, 2007 (Docket No.
4813) (the “Sale Order”), the Debtors sold the assets of their Engine Products
Group to MAHLE GmbH (“MAHLE”). Pursuant to the authority granted in the Sale
Order and the terms of the Agreement dated March 2, 2007 (the “Assignment
Agreement”) between certain of the Affinia Entities and the Debtors, certain of
the Other Ancillary Agreements were either (1) assumed and assigned to MAHLE
(collectively, the “Assigned Agreements”) or (2) bifurcated by agreement of the
parties and assumed (if the agreement was with a Debtor) and assigned in part to
MAHLE (collectively, the “Bifurcated Assigned Agreements”). The Assigned
Agreements are as follows:

 

•

Sales Agreement (Dana Global Sales) between the Clevite Engine Products Division
of Dana Corporation and AAG Acquisition Corporation n/k/a Affinia Products
Corp., dated November 30, 2004;

 

•

ADMS Services Agreement between the Clevite Engine Products Division of Dana
Corporation and AAG Acquisition Corporation n/k/a Affinia Products Corp., dated
November 30, 2004; and

 

•

Sales Agreement (CarQuest) between the Clevite Engine Products Division of Dana
Corporation and Wix Filtration Corporation, dated November 30, 2004.

The Bifurcated Assigned Agreements (in the forms attached to the Assignment
Agreement as Exhibit 4) are as follows:

 

•

Amended and Restated Brazilian Trademark License Agreement between Dana
Corporation, et al. and AAG Brasil In. e Com. De Autopecas Ltda. n/k/a Affinia
Automotiva Ltda., dated November 30, 2004, as modified and bifurcated as of
March 9, 2007;

 

•

Amended and Restated Argentina Trademark License between Dana Corporation and
Brake Parts Argentina S.A., dated November 30, 2004, as modified and bifurcated
as of April 30, 2007;

 

•

Amended and Restated Distribution Agreement between Dana Corporation, et al. and
AAG Brasil In. e Com. De Autopecas Ltda. n/k/a Affinia Automotiva Ltda., dated
March 14, 2005 and effective December 1, 2004, as modified and bifurcated as of
March 9, 2007; and

 

•

Amended and Restated Commission Agreement between Dana Argentina S.A., Dana San
Juan S.A., Dana San Luis S.A. and Brake Parts Argentina

 

 

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S.A., dated December 1, 2004, as modified and bifurcated as of April 30, 2007.

N.

Pursuant to the Assignment Agreement, the Dana Entities expressly retained their
rights to assume, assume and assign or reject the remaining portions of the
Bifurcated Assigned Agreements not assigned to MAHLE, as set forth on Exhibit 3
to the Assignment Agreement (collectively, the “Remaining Bifurcated
Agreements”).

O.

As contemplated by the Assignment Agreement, on March 14, 2007, the Heavy
Vehicle Technology Systems Service division of Dana and the Affinia Global Sales
division of Affinia Products Corp. entered into a three-year agreement
(effective as of May 14, 2007) for Affinia Global Sales to distribute commercial
vehicle aftermarket products outside of the United States, Canada, Mexico and
Mercosur region (as amended, the “Heavy Vehicle Aftermarket Agreement”). The
Parties have discussed certain potential changes to the Heavy Vehicle
Aftermarket Agreement.

P.

On September 26, 2007, Dana filed with the Bankruptcy Court that certain
Complaint against Affinia Group, Inc. and Affinia Canada, initiating Adversary
Case No. 07-02059 (the “Turnover Action”). By the Turnover Action, Dana alleged,
among other things, that: (1) Affinia, Affinia Canada or one of the other
Affinia Entities is in possession of tax refunds and/or credits received from
the Canada Revenue Agency (the “CRA”) and owed to Brake Parts Canada, Inc., on
account of the 1999-2004 tax years, in the approximate amount of $32,500,000.00
(in U.S. dollars) (as further defined in paragraph 3.a below, the “Tax Refund”);
(2) the Purchase Agreement provided that Dana would be entitled to the Tax
Refund and required Affinia to remit any such Tax Refunds to Dana; (3) under the
Purchase Agreement, the Tax Refund constitutes an excluded asset to which Dana
is expressly entitled, and therefore the Tax Refund is property of Dana’s
bankruptcy estate; and (4) Affinia, Affinia Canada or such other Affinia Entity
holding the Tax Refund therefore is required to turn over the Tax Refund to Dana
pursuant to section 542 of the Bankruptcy Code. The Affinia Entities dispute the
allegations made by Dana in the Turnover Action and have expressed their
intention to vigorously defend against the Turnover Action. Affinia further
alleges that any claims it may have against Dana under the Purchase Agreement
may be setoff against or recouped from the Tax Refund.

Q.

On October 3, 2007, Dana filed the Motion of Debtor Dana Corporation, Pursuant
to Section 365 of the Bankruptcy Code and Bankruptcy Rule 6006, for an Order
Authorizing the Rejection of Certain Agreements with AAG Opco Corp (n/k/a
Affinia Group, Inc.) (Docket No. 6356) (the “Rejection Motion”), seeking the
entry of an Order authorizing Dana to reject (1) the Purchase Agreement,
effective immediately upon obtaining approval of the Bankruptcy Court; and (2)
the Spicer Trademark License, effective as of December 31, 2007. By the
Rejection Motion, the Debtors do not seek to reject any of the Other Ancillary
Agreements, and reserved all of their rights to assume, assume and assign or
reject the Other Ancillary Agreements pursuant to section 365 of the Bankruptcy
Code to the extent such agreements are executory contracts or unexpired leases
and have not previously been assumed and assigned in the Bankruptcy Cases.
Affinia disputes the relief sought in the Rejection Motion. Among other things,
Affinia has claimed that the Other Ancillary Agreements are part of an
integrated agreement with the Purchase Agreement

 

 

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and the Spicer Trademark License, and all of these agreements must be assumed or
rejected together. Affinia has expressed its intention to vigorously defend
against the Rejection Motion.

R.

Dana and Affinia desire to resolve all currently outstanding issues between the
Parties and have agreed to do so on the terms and conditions of this Settlement
Agreement.

AGREEMENT:

NOW, THEREFORE, after good faith, arms’ length negotiations without collusion,
and for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree to the following terms:

1. Settlement Motion. Within five business days after the Execution Date,
the Debtors will file a motion with the Bankruptcy Court pursuant to sections
363, 365 and 502 of the Bankruptcy Code and Rule 9019 of the Federal Rules of
Bankruptcy Procedure (the “Settlement Motion”) seeking an Order of the
Bankruptcy Court in form and substance acceptable to both Dana and Affinia
(the “Approval Order”) to approve this Settlement Agreement and grant related
relief. The Parties will use reasonable commercial efforts to obtain entry of
the Approval Order prior to the Effective Date (as such term is defined in the
Plan). The date that the Approval Order is entered is referred to herein as the
“Approval Date.”

2. Treatment of Purchase Agreement. To the extent any provisions of the Purchase
Agreement are executory, such provisions will be terminated in their entirety,
and the Purchase Agreement will be of no further force and effect, as of the
Approval Date, except as otherwise provided herein.

3. Remittance of Canadian Tax Refunds.

a. As soon as reasonably possible, but in any event no later than ten days after
the Approval Date, Affinia will cause the entire amount of the tax refunds
received by any of the Affinia Entities from the CRA and the provincial tax
authorities in Ontario and Quebec (collectively, the “Provincial Authorities”)
for, intra alia, Part I Tax for years 1990 to 1996 and Part 13 Tax and interest
on account of the 1999-2004 tax years (collectively with any additional amounts
that may be owed to or received by any of the Affinia Entities in the future,
the “Tax Refund”) to be transferred to Dana, minus the amount of $8,723,161.75
(CDN) paid by Affinia Canada to the CRA in respect of the CRA assessment for the
2002-2004 period (the “Additional Tax Amount”). Other than a deduction for the
Additional Tax Amount, the transfer of the Tax Refund by Affinia to Dana will
not be subject to setoff, recoupment or reduction of any kind.

b. Affinia represents that the amount of the Tax Refund that has been received
by the Affinia Entities to date totals $39,965,445.06 (CDN).

c. Dana will indemnify the Affinia Entities and hold them harmless from the
amount of additional income tax owing to the CRA and the Provincial Authorities
as a result of the Affinia Entities’ receipt of the Tax Refund (calculated
without regard to any credits or net operating losses available to Affinia or an
Affinia Entity). Any payment

 

 

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made pursuant to this paragraph 3.c shall be paid to Affinia on the later of (i)
21 days after the Affinia Entities make a written demand upon Dana and (ii) if a
payment is owed by the Affinia Entities to the CRA or the Provincial
Authorities, five business days prior to the date on which the underlying amount
is required to be paid by the Affinia Entities, provided that Affinia provides
Dana with at least 21 days’ notice of such payment and the support for the
calculation of such payment .

d. Affinia will have an ongoing obligation to notify Dana promptly in writing if
any additional Tax Refund amounts are received by any of the Affinia Entities
and to promptly remit such additional amounts to Dana.

e. Affinia will grant Dana or its representative irrevocable authority to
communicate with, and receive information from, the CRA and the Provincial
Authorities with respect to the Tax Refund and the Additional Tax Amount.

f. Dana will provide wire transfer instructions to Affinia to accomplish the
payments contemplated by this paragraph 3.

4. Treatment of Future Tax Matters. The Dana Entities and the Affinia Entities
agree that, except as expressly provided herein, all pending and future tax
matters involving the Affinia Entities, the Dana Entities and the reorganized
Debtors from and after the Effective Date (collectively, the “Reorganized
Debtors”) shall be resolved in accordance with the provisions set forth on
Exhibit B attached hereto; provided that nothing in the attached Exhibit B shall
be deemed to modify in any way the terms of paragraph 3 above. Defined terms
identified on the attached Exhibit B and not otherwise defined in this Agreement
are incorporated herein by reference.

5. Return of Canadian Workers’ Compensation Refund. Within ten days after the
Approval Date, Affinia will cause the entire Workers’ Compensation Refund to be
returned to Dana Canada by wire transfer of immediately available funds. Dana
will provide wire transfer instructions to Affinia to accomplish the payments
contemplated by this paragraph 5.

6. Waiver of Quinton Hazell Receivable. The Parties agree that no further
amounts are owed to either Party with respect to or in connection with the
asserted Quinton Hazell Receivable.

7. McHenry Real Estate. The Debtors will transfer title to the McHenry Property
to Affinia on an “as-is, where-is” basis as soon as reasonably practicable after
the Approval Date. To accomplish the transfer, the appropriate Debtor will
execute a quitclaim deed in favor of Affinia. Affinia will pay any and all costs
owed to third parties related to such transfer.

8. Trailers. Dana will take such steps as are necessary to transfer title to the
Trailers to Affinia on an “as-is, where-is” basis as soon as reasonably
practicable after the Approval Date. Affinia will pay any and all costs owed to
third parties related to such transfer.

9. PTC Software. Dana will have no obligation to transfer the PTC Software
License to Affinia or pay any transfer fees related thereto.

 

 

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10. Burnaby Warehouse. Affinia’s request for payment of 50% of the shutdown
costs associated with the Burnaby Warehouse is deemed satisfied and resolved by
the consideration provided by the Dana Entities hereunder.

11. Supply Arrangement. With respect to the supply relationship governed by the
Essential Supplier Agreement, Affinia will maintain the current pricing, trade
terms and conditions relating to the supply of components to the Dana Entities
(as set forth in the Essential Supplier Agreement) through and including
March 31, 2008, unless alternative arrangements are agreed upon by the Parties
prior to that date. The Parties will work in good faith to resolve issues
relating to the pricing and trade terms for this supply relationship.

12. Heavy Vehicle Aftermarket Agreement. The Parties will modify the Heavy
Vehicle Aftermarket Agreement to: (a) extend the term of the agreement by two
years, providing for a five-year term; and (b) remove Section 3 thereof, which
provides for the right of termination of the agreement upon 180 days’ notice by
either party. To document these modifications, the parties will execute an
amended and restated Heavy Vehicle Aftermarket Agreement in a form acceptable to
both Dana and Affinia.

13. Spicer Trademark License. The Spicer Trademark License will be modified to
provide: (a) that the expiration date of the Spicer Trademark License is
shortened from December 31, 2029 to December 31, 2010; (b) that the Spicer
Trademark License is royalty free for the entire shortened term; and (c)
appropriate provisions relating to Affinia’s transition away from the licensed
trademarks, including the terms set forth on the attached Exhibit C. To document
these modifications, the parties will execute an amended and restated Spicer
Trademark License in substantially the form to be filed with the Bankruptcy
Court prior to the hearing on the Motion. Dana will assume the Spicer Trademark
License as modified, pursuant to section 365 of the Bankruptcy Code, effective
as of the Approval Date.

14. Treatment of Other Ancillary Agreements. The Other Ancillary Agreements will
be treated as follows:

a. Brazil Distribution Agreement. The Amended and Restated Distribution
Agreement between Dana, et al. and Affinia Automotiva Ltda., dated March 14,
2005 and effective December 1, 2004, as modified on March 9, 2007 and
constituting one of the Retained Bifurcated Agreements (the “Retained Brazil
Distribution Agreement”), will be further modified to remove gaskets (but not
elastomers) from the list of products to be distributed under this agreement. To
document this modification, the parties will execute the Second Amended and
Restated Distribution Agreement in substantially the form attached hereto as
Exhibit D. Dana will assume the Retained Brazil Distribution Agreement as
modified, pursuant to section 365 of the Bankruptcy Code, effective as of the
Approval Date. The parties will engage in good faith discussions regarding
possible amendments, modifications and extensions of the Retained Brazil
Distribution Agreement.

b. Brazil Trademark License. The Amended and Restated Brazilian Trademark
License Agreement between Dana, et al. and AAG Brasil In. e Com. De Autopecas
Ltda. n/k/a Affinia Automotiva Ltda., dated November 30, 2004, as modified on
March 9, 2007 and constituting one of the Retained Bifurcated Agreements

 

 

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(the “Retained Brazil Trademark License”), will be further modified to remove
the “Victor Reinz” trademark from the trademarks licensed under this agreement.
To document this modification, the parties will execute the Second Amended and
Restated Brazilian Trademark License Agreement in substantially the form
attached hereto as Exhibit E. Dana will assume the Retained Brazil Trademark
Agreement as modified, pursuant to section 365 of the Bankruptcy Code, effective
as of the Approval Date.

c. Argentina Commission Agreement. The Amended and Restated Commission Agreement
between Dana Argentina S.A., Dana San Juan S.A., Dana San Luis S.A. and Brake
Parts Argentina S.A., dated December 1, 2004, as previously agreed to be
modified in the Assignment Agreement and constituting one of the Retained
Bifurcated Agreements (the “Retained Argentina Commission Agreement”), will be
further modified to (i) remove gaskets from the list of products to be
distributed under this agreement and (ii) amend Section 3.1 so that no notice of
termination may be effective until at least 73 months from November 30, 2004. To
document these modifications, the parties will execute the Second Amended and
Restated Commission Agreement in substantially the form attached hereto as
Exhibit F, which will be effective as of the Approval Date. The Parties will
engage in good faith discussions regarding the possible extension of the term of
the Retained Argentina Commission Agreement and related commercial terms.

d. Argentina Trademark License. Dana will assume the Amended and Restated
Argentina Trademark License between Dana and Brake Parts Argentina S.A., dated
November 30, 2004, as previously agreed to be modified in the Assignment
Agreement and constituting one of the Retained Bifurcated Agreements
(the “Retained Argentina Trademark License”), pursuant to section 365 of the
Bankruptcy Code, effective as of the Approval Date. The Parties will engage in
good faith discussions regarding the possible extension of the term of the
Retained Argentina Trademark License and related commercial terms.

e. Transition Trademark License Agreement. The Transition Trademark License
Agreement between Dana and Affinia, dated November 30, 2004 will be permitted to
expire in accordance with its terms on November 30, 2007. Upon its expiration,
neither party will have any further rights, claims or obligations under this
agreement.

f. Nakata License Agreement. The Nakata Trademark License Agreement between Dana
and AAG Brasil In. e Com. De Autopecas Ltda. n/k/a Affinia Automotiva Ltda.,
dated November 30, 2004, will be permitted to expire in accordance with its
terms on November 30, 2007. Upon its expiration, neither party will have any
further rights, claims or obligations under this agreement.

g. Nakata Right of First Refusal Letter. The Nakata right of first refusal
letter from Dana to Affinia dated as of July 8, 2004 will be permitted to expire
in accordance with its terms on November 30, 2007. Upon its expiration, neither
party will have any further rights, claims or obligations under this agreement.

h. Joint Defense and Common Interest Agreement. The Joint Defense and Common
Interest Agreement between Dana, et al. and Affinia, et al., dated July 8, 2004,

 

 

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will be terminated as of the Approval Date by agreement of the Parties. Upon its
termination, none of the parties to this agreement will have any further rights,
claims or obligations thereunder.

15. Assignment of Agreements. The rights and obligations of any Debtor under any
of agreements assumed by the Debtors hereunder, pursuant to section 365 of the
Bankruptcy Code, and the Heavy Vehicle Aftermarket Agreement will be assigned as
of the Effective Date to Dana Limited, one of the Reorganized Debtors identified
on Exhibit V.B.1 to the Plan. Such assignment will not affect the rights and
obligations of any non-Debtor parties to these agreements.

16. Treatment of Claims. The claims asserted, or that could be asserted, by the
Affinia Entities in the Bankruptcy Cases or otherwise against the Dana Entities
will be treated as follows:

a. Consistent with prior agreements of the Parties, the Trade Claim will be
allowed in the amount of $429,579.00 as a general unsecured nonpriority claim
against Dana.

b. In full and final satisfaction of any claims that Affinia may have against
Dana under or with respect to the Purchase Agreement or the Spicer Trademark
License as of the date of the settlement (including any potential rejection or
termination damages claims) and as further consideration of the various
concessions made by Affinia as described herein, Proof of Claim No. 11680 filed
by Affinia will be liquidated and allowed in the amount of $21,700,000.00 as a
general unsecured nonpriority claim against Dana (the “Settlement Claim”).

c. The Trade Claim and the Settlement Claim (collectively, the “Allowed Claims”)
will be subject to treatment and satisfaction pursuant to the terms and
conditions of the Plan or such other plan of reorganization that is confirmed
and becomes effective in the Bankruptcy Cases.

d. Affinia agrees that no amounts are owed to cure any defaults under the Other
Ancillary Agreements as of the date of this Settlement Agreement (other than
amounts owed in the ordinary course of business), and that the cure amount under
section 365(b)(1)(A) of the Bankruptcy Code for any agreement to be assumed
hereunder will be $0.00.

e. Other than the Allowed Claims, all other proofs of claim that the Affinia
Entities have filed in the Debtors’ chapter 11 cases or that have been scheduled
on behalf of the Affinia Entities, including the Affinia Claims identified on
the attached Exhibit G, will be deemed waived, extinguished and expunged. The
Affinia Entities agree that they will not file any further proofs of claim in
these cases and that any such additional claims, if filed, will be deemed
waived, extinguished and expunged without further action by the Parties or the
Bankruptcy Court.

17. Automotive Aftermarket Industry Association. Dana will take reasonable steps
to assist in the transfer of the list of benefactors or trustees relating to the
Automotive Aftermarket Industry Association from the name “Dana Corporation” to
“Affinia Group.”

 

 

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18. Releases.

a. As of the Approval Date, in consideration for the mutual covenants, promises
and obligations contained herein, the Affinia Entities, on behalf of themselves
and their respective agents, shareholders, affiliates, subsidiaries, related or
parent entities, successors and assigns, hereby waive, release and discharge
each of the Dana Entities and their respective affiliates (including, but not
limited to, the Debtors), subsidiaries, predecessors, successors, employees,
agents, attorneys, directors, officers, administrators, personal representatives
and assigns from any and all claims, demands, causes of action, accounts, liens,
debts and liabilities of any kind arising under or related to the Sale
Transaction, the Purchase Agreement, the Spicer License Agreement and the Other
Ancillary Agreements that existed prior to the Approval Date, whether in law or
in equity, direct or indirect, known or unknown, previously asserted or not yet
asserted, except for such rights and claims that are expressly granted,
preserved, permitted or subsequently arise hereunder.

b. As of the Approval Date, in consideration for the mutual covenants, promises
and obligations contained herein, the Dana Entities, on behalf of themselves and
their respective agents, shareholders, affiliates, subsidiaries, related or
parent entities, successors and assigns, hereby waive, release and discharge
each of the Affinia Entities and their respective affiliates, subsidiaries,
predecessors, successors, employees, agents, attorneys, directors, officers,
administrators, personal representatives and assigns from any and all claims,
demands, causes of action, accounts, liens, debts and liabilities of any kind
arising under or related to the Sale Transaction, the Purchase Agreement, the
Spicer License Agreement and the Other Ancillary Agreements that existed prior
to the Approval Date, whether in law or in equity, direct or indirect, known or
unknown, previously asserted or not yet asserted, except for such rights and
claims that are expressly granted, preserved, permitted or subsequently arise
hereunder (including, without limitations, all rights under or with respect to
the Affinia Note).

19. Waiver of Rights to Insurance. Affinia forever waives and relinquishes any
and all rights it has or may have to pursue a claim against or seek the proceeds
of the insurance policies that were maintained by Echlin, Inc. and its
subsidiaries with American International Group and any of its affiliated
companies through and including September 1, 1998, and irrevocably assigns any
and all such rights to Dana or one of its designated subsidiaries. Within 30
days after the Approval Date, Affinia will execute an appropriate waiver and
assignment agreement in a form acceptable to Dana and Affinia to implement this
provision.

20. Litigation Support.

a. In the event that, and for so long as, Affinia actively is prosecuting,
contesting or defending any Legal Proceeding (as defined below), action,
investigation, charge, claim or demand by or against a third party in connection
with (i) any transaction contemplated under Purchase Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction involving the
Business or the Acquired Companies, Dana shall, and shall cause its Subsidiaries
and its controlled Affiliates to, cooperate with Affinia and its counsel in the

 

 

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prosecution, contest or defense, make available its personnel and provide such
testimony and access to its books and records and facilities as shall be
reasonably necessary in connection with the contest or defense, all at the sole
control, cost and expense of Affinia.

b. In the event that, and for so long as, Dana actively is prosecuting,
contesting or defending any Legal Proceeding, action, investigation, charge,
claim or demand by or against a third party in connection with (i) any
transaction contemplated under the Purchase Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction involving the
Business or the Acquired Companies, Affinia shall, and shall cause its
Subsidiaries and its controlled Affiliates to, cooperate with Dana and its
counsel in the prosecution, contest or defense, make available its personnel,
and provide such testimony and access to its books and records and facilities as
shall be reasonably necessary in connection with the contest or defense, all at
the sole control, cost and expense of Dana.

c. As used herein, “Legal Proceeding” means any judicial, administrative or
arbitral action, suit, proceeding (public or private) or proceeding before a
Government Body, other than a Tax Proceeding.

21. Workers’ Compensation. Notwithstanding anything herein to the contrary, Dana
and its Subsidiaries shall continue to be solely responsible for claims for
workers’ compensation that are incurred prior to the Closing Date with respect
to any United States-based “Business Employee” identified in Schedule 15.1(b) of
the Purchase Agreement or individuals employed by an Acquired Company before the
Closing Date, including any individual who was absent due to vacation, holiday,
sickness or other approved leave of absence. Affinia shall continue to be solely
responsible for claims for workers’ compensation that are incurred on or after
the Closing Date with respect to any “Transferred Employee” under the Purchase
Agreement .

22. Product Liability, Warranty and Recall Indemnification.

a. Affinia hereby agrees, from and after the Closing Date, to indemnity, defend
and hold the Dana Indemnified Parties (as defined below) harmless from and
against any and all Losses (as defined below) arising out of or resulting from
the following Liabilities assumed by Affinia under the Purchase Agreement
(without duplication):

i. all Liabilities with respect to any return, rebate, recall, warranty or
similar liabilities primarily relating to, primarily arising out of or primarily
resulting from the Business; and

ii. other than Liabilities arising from or relating to any actual or alleged
human exposure to asbestos or asbestos-containing materials manufactured,
serviced or sold by Dana or its Subsidiaries (other than an Acquired Company)
prior to the Closing Date, all Liabilities for death, personal injury,
advertising injury, other injury to persons or property damages occurring after
the Closing Date primarily relating to, primarily resulting from, primarily
caused by or primarily arising out of, directly or indirectly, use of or
exposure to any of the products (or any part or component) designed,
manufactured, serviced or sold, or services

 

 

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performed, by Dana or its Subsidiaries (other than an Acquired Company),
primarily relating to, primarily arising out of or primarily resulting from the
Business, including any such Liabilities for negligence, strict liability,
design or manufacturing defect, conspiracy, failure to warn or breach of express
or implied warranties or merchantability or fitness for any purpose or use.

b. As used herein, the “Dana Indemnified Parties” means Dana, its Subsidiaries,
their respective Affiliates, together with their successors and permitted
assigns (including the Reorganized Debtors after the Effective Date of the
Plan), and their officers, directors, employees and agents.

c. As used herein, “Losses” means any and all claims, judgments, fines, causes
of action, demands, complaints, arbitrations, assessments, liabilities,
obligations, damages, losses, deficiencies, costs, penalties, interest and
expenses (including the reasonable fees and expenses of counsel whether
involving a third-party claim or solely between the parties to this Agreement).

23. Affinia Note. Dana will retain the Affinia Note from Affinia Holdings in the
face amount of $74.5 million and all of the rights thereunder. The Affinia Note
will not be subject to setoff, recoupment or reduction as a result of, or on
account of, any obligations granted, addressed or released hereunder. The
Parties agree that the Affinia Note is transferable by Dana.

24. Echlin Trademark License Agreement. The Parties acknowledge that the License
Agreement, dated February 9, 2001 between Dana and Echlin Canada Inc. was
terminated in accordance with its terms as of November 30, 2004. As a result of
its termination, neither party will have any further rights, claims or
obligations under this agreement.

25. Successors and Assigns. This Settlement Agreement will be binding upon and
will inure to the benefit of each of the Parties and its respective successors
and permitted assigns, including, where appropriate, the applicable Reorganized
Debtor(s).

26. Notice: Any notice, request, demand or other communication given under this
Settlement Agreement will be in writing and will be deemed sufficiently given:

a. Upon the date received by the intended recipient if delivered by hand,
overnight courier, or via telefax or email, provided confirmation of receipt is
retained.

b. If the sender so elects, effective three days following the date deposited in
the United States mail, certified with return receipt requested, postage
prepaid, addressed to the recipient as follows:

 

 

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To the Affinia Entities:

 

Steven E. Keller, Esq
General Counsel and Secretary
Affinia Group, Inc.
1101 Technology Drive
Suite 100
Ann Arbor, Michigan 48108
Fax No. 734-827-5403
E-mail: Steve.Keller@affiniagroup.com

With a copy to:

 

Matthew J. Botica, Esq.
Winston & Strawn LLP
35 West Wacker Drive
Chicago, Illinois 60601
Fax No. 312-558-5700
E-mail: MBotica@winston.com

To the Dana Entities:

 

Marc S. Levin, Esq.
Acting General Counsel and Acting Secretary
Dana Corporation
4500 Dorr Street
Toledo, Ohio 43615
Fax No. 419-535-4790
E-mail: marc.levin@dana.com

With a copy to:

 

Jeffrey B. Ellman, Esq.
Jones Day
1420 Peachtree Street, NE
Suite 800
Atlanta, Georgia 30309
Fax No. 404-581-8330
E-mail: jbellman@jonesday.com

 

c. Either Party may advise the other of any change in address or designated
person to receive such notice as provided above.

27. Further Assurances. As and when requested by any Party, each Party
(including the applicable Reorganized Debtors) will execute and deliver, or
cause to be executed and delivered, all such documents and instruments and will
take, or cause to be taken, at the requesting Party’s expense, all such further
or other actions, as such other Party may reasonably deem necessary or desirable
to consummate the transactions contemplated by this Settlement Agreement. In
addition, the Parties (including the applicable Reorganized Debtors) will work
together in good faith to seek to resolve any other issues that may be
identified in the future relating to the documentation of the asset transfers
made under the Purchase Agreement.

28. Pending Legal Proceedings. On the Approval Date and pursuant to the terms of
the Approval Order, the Rejection Motion and the Turnover Action will be deemed
resolved and

 

 

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withdrawn with prejudice. The Parties will make any additional filings in the
Turnover Action necessary to accomplish the foregoing.

29. Prior Agreements. Nothing in this Settlement Agreement will affect, limit or
otherwise modify the parties’ respective obligations under the Assignment
Agreement, including with respect to the assignment of the Assigned Agreements
and the Bifurcated Assigned Agreements.

30. Entire Agreement. This Settlement Agreement (together with the attached
exhibits) sets forth the entire understanding of the Parties hereto, and
constitutes the entire agreement between the Parties with respect to the matters
contained herein, and supersedes all prior oral or written representations,
proposals, term sheets, correspondence, discussions, negotiations and agreements
relating to such matters. The Parties acknowledge that there are no
representations, understandings or agreements relative to the matters addressed
herein except as fully expressed herein. No change, modification, waiver,
agreement or understanding, oral or written, in any way purporting to waive or
modify the terms of this Settlement Agreement will be binding on either party
hereto unless contained in a written document expressly described as an
amendment to, waiver of, or extension of this Settlement Agreement and unless
such document is duly executed by both Parties. A waiver by either Party of any
breach or failure to enforce any term or condition of this Settlement Agreement
will not in any way affect, limit or waive such Party’s right at any time to
enforce strict compliance with that or any other term or condition of this
Settlement Agreement.

31. Counterparts. This Settlement Agreement may be executed in one or more
counterparts and by facsimile or electronically transmitted signature, each of
which will be deemed to be an original and all of which together will be deemed
to constitute one and the same instrument.

32. Severability. If any provision of this Settlement Agreement is deemed
invalid and unenforceable by any court of competent jurisdiction or under any
statute, regulation, ordinance, executive agreement, or other rule of law, such
provision will be deleted or modified, at the election of the Parties, but only
to the extent necessary to comply with such ruling, statute, regulation,
ordinance, agreement or rule, and the remaining provisions of this Settlement
Agreement will remain in full force and effect, provided that such deletion or
modification does not materially and adversely affect the rights or obligations
of any party hereto.

33. Representations and Warranties.

a. Subject to entry of the Approval Order, the Dana represents and warrants that
(i) it has the power and authority to execute this Settlement Agreement on
behalf of the Dana Entities, without obtaining the consent or approval of any
other person or entity; and (ii) this Settlement Agreement has been duly
authorized, executed and delivered by the Dana Entities and is enforceable
against the Dana Entities in accordance with its terms.

b. Affinia represents and warrants that (i) it has the power and authority to
execute this Settlement Agreement on behalf of the Affinia Entities and their
assigns, without obtaining the consent or approval of any other person or
entity; and (ii) this

 

 

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Settlement Agreement has been duly authorized, executed and delivered by the
Affinia Entities and is enforceable against the Affinia Entities in accordance
with its terms.

34. Jurisdiction and Governing Law. This Settlement Agreement will be construed
according to the laws of the State of Ohio and the applicable provisions of the
Bankruptcy Code without regard to its conflict of laws provisions or any other
provision of Ohio or federal law that would require or permit the application of
the substantive law of any other jurisdiction to govern this Settlement
Agreement. The Bankruptcy Court will have exclusive jurisdiction over any
matters arising hereunder.

 

DANA CORPORATION
For itself and each Dana Entity

 

 

AFFINIA GROUP INC.
For itself and each Affinia Entity

/s/ Marc S. Levin

 

 

/s/ Terry R. McCormack

Name: Marc S. Levin

 

 

Name: Terry R. McCormack

Title: Acting Secretary

 

 

Title: President

Date: November 20, 2007

 

 

 

 

 

 

/s/ Susan J. Stewart

 

 

 

Name: Susan J. Stewart

 

 

 

Title: Assistant Secretary

 

 

 

 

 

 

 

Date: November 20, 2007

 

 

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