EX-99.1 SETTLEMENT AGREEMENT AND RELEASE

Exhibit 99.1

SETTLEMENT AGREEMENT AND RELEASE

     This Settlement Agreement and Release (the “Agreement”) is made and entered into as of December 18, 2006 by and between Dana Corporation (“Dana”) and its affiliated debtors and debtors in possession (collectively, the “Debtors” and individually a “Debtor”), and Dana Credit Corporation (“DCC”) and its direct and indirect subsidiaries (collectively with DCC, “Dana Credit”). The Debtors and DCC are sometimes collectively referred to herein as the “Parties.”

Recitals

     This Agreement is made with respect to the following facts:

     WHEREAS, on March 3, 2006 (the “Petition Date”), the Debtors commenced reorganization cases by filing voluntary 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”), jointly administered under case number 06-10354 (BRL);

     WHEREAS, DCC is a subsidiary of Dana but is not a Debtor;

     WHEREAS, Dana and its non-debtor and debtor subsidiaries file a consolidated federal tax return and file consolidated or combined state tax returns where allowable;

     WHEREAS, tax benefits and liabilities as between Dana and Dana Credit are computed under an intercompany tax sharing agreement between Dana and DCC (the “Tax Sharing Agreement”);

     WHEREAS, the Debtors and Dana Credit are also parties to various leases, agreements and arrangements that give rise to intercompany claims by and between them;

     WHEREAS, DCC is indebted under notes issued from time to time under a number of note agreements (the “DCC Notes”) in the aggregate principal amount of approximately $399 million;

     WHEREAS, excluding certain contingent claims asserted by the Pension Benefit Guaranty Corporation and other contingent and/or unliquidated claims that are not expected by DCC to become fixed and liquidated claims, DCC represents that it has no debt other than the approximately $420 owed under the DCC Notes and, at any given time, amounts that may be due for professional fees and ordinary course operating expenses;

     WHEREAS, following Dana’s bankruptcy filing in March 2006, the holders of a majority of the outstanding principal amount of DCC Notes formed an Ad Hoc Committee of DCC Noteholders (the “Ad Hoc Committee”) which has asserted that the DCC Notes became immediately due and payable without notice, presentment, demand, protest or other action of any kind as a result of the commencement of Dana’s bankruptcy;

     WHEREAS, the Debtors and Dana Credit assert various claims against each other, including but not limited to claims related to transfers;

     WHEREAS, the holders of the DCC Notes (the “DCC Noteholders”) also assert various claims against the Debtors and DCC;

     WHEREAS, on August 25, 2006, the Debtors, Dana Credit and certain DCC Noteholders entered into a tolling agreement (the “Tolling Agreement”) which extended any applicable statute of limitation for claims Dana Credit or the DCC Noteholders might assert against the Debtors;

     WHEREAS, on July 7, 2006, the Debtors filed a Motion for Order Pursuant to Bankruptcy Rule 3003(3) Setting a Final Date to File Proofs of Claim (the “Bar Date Motion”). The Bar Date Motion sought an order setting September 21, 2006 (the “Bar Date”) as the last day for creditors to file proofs of claim against the Debtors. The relief requested in the Bar Date Motion was granted by an order entered on July 19, 2006 (the “Bar Date Order”);

     WHEREAS, on September 20, 2006, Dana Credit, the DCC Noteholders and the Debtors filed a Stipulation and Proposed Order requesting an extension of the Bar Date with this Court;

     WHEREAS, on October 16, 2006, this Court “So Ordered” the Stipulation extending the Bar Date, solely for Dana Credit and the DCC Noteholders, through and including October 23, 2006;

     WHEREAS, on October 19, 2006, Dana Credit, the DCC Noteholders and the Debtors filed a Stipulation and Proposed Order extending the Bar Date, solely for Dana Credit and the DCC Noteholders to December 7, 2006 (the “Second Stipulation”);

     WHEREAS, on October 31, 2006, the Court “So Ordered” the Second Stipulation extending the Bar Date, solely for Dana Credit and the DCC Noteholders, through and including December 7, 2006; and

     WHEREAS, DCC, the Ad Hoc Committee and the Debtors have been engaged in settlement discussions for several months and have reached an agreement regarding the terms of a proposed forbearance agreement between DCC and the DCC Noteholders (the “Forbearance Agreement”). The Forbearance Agreement will be substantially in the form of the agreement attached hereto as Exhibit “A.” Pursuant to the terms of the proposed Forbearance Agreement, signatory DCC Noteholders (the “Forbearing Noteholders”) agree to release any and all claims they may have against Dana and for the period (the “Forbearance Period”) commencing on the effective date of the Forbearance Agreement and ending twenty-four months after the Implementation Date (as such term is defined therein), unless terminated sooner on account of a breach of the Forbearance Agreement, and the Forbearing Noteholders will not exercise rights or remedies under any of the DCC Note documents or applicable law. A condition of the Forbearance Agreement is the settlement of the claims asserted by Dana Credit against the Debtors and the settlement of certain claims the Debtors assert against Dana Credit.

     NOW, THEREFORE, for mutual consideration, which is hereby acknowledged, (including the covenants, promises, releases warranties, representations and payments contained herein) the Parties, each intending to be legally bound, hereby agree as follows:

1. Settlement.

     1.1 Settlement Effective Date.

           (a) The effective date of this Agreement (“Settlement Effective Date”) shall be the date on which each of the conditions to the effectiveness of the Settlement has been satisfied or waived, in writing, by each of the parties hereto.

           (b) This Agreement is conditioned upon:

               (i) The execution and delivery of this Agreement by the Parties;

               (ii) The satisfaction or waiver of all conditions precedent to the effectiveness of the Forbearance Agreement; and

               (iii) The entry by the Bankruptcy Court of an order approving the terms of this Agreement and such order becoming final and non-appealable (the “Approval Order”).

     1.2 Settlement Terms

           (a) Allowance of Prepetition Intercompany Claim. All of Dana Credit’s prepetition claims against the Debtors, including any claims arising from or related to the Tax Sharing Agreement, shall be allowed as a general unsecured claim in favor of DCC against Dana in the aggregate amount of $325,000,000 (the “Intercompany Claim”) and shall not be subject to reduction for any reason, including, without limitation, on account of any right of setoff or recoupment. Dana hereby waives any and all rights to reduce the allowed amount of the Intercompany Claim. It is acknowledged by Dana that the Intercompany Claim accrued and continues to accrue interest at the Federal Judgment Rate from the Petition Date through and including the date on which the Intercompany Claim is paid in full or is otherwise discharged; provided, however that Dana does not waive its right to object to the allowance of any claim for interest accruing on the Intercompany Claim pursuant to Bankruptcy Code section 502(b) and DCC does not waive any of its rights to oppose any such objection on any basis. The Intercompany Claim may not be amended at any time and, except for the Intercompany Claim, Dana Credit shall not assert any other prepetition claims against any of the Debtors.

           (b) Sale or Transfer of Intercompany Claim. If DCC intends to sell, assign or participate out all or any portion of the Intercompany Claim or any interest therein (a “Proposed Sale”) prior to the effective date of a plan of reorganization in the Debtor’s bankruptcy cases, it will provide Dana’s official creditor, equity and retiree committees (the “Committees”) and the Ad Hoc Committee no less than 10 days written notice (the “Notice”) of such intention. If, prior to the expiration of the 10-day notice period, any of the Committees or the Ad Hoc Committee serves on Dana, DCC, the other Committees and the Ad Hoc Committee (if it is not the serving party), and files with the Bankruptcy Court, under seal, a written objection to a Proposed Sale, then no sale shall take place pending the determination of the Bankruptcy Court at a hearing to be scheduled by Dana on the first available date that is at least 21 days after delivery of the Notice. All pleadings filed with the Bankruptcy Court with regard to a Proposed Sale will be sealed and Dana, DCC, the Committees and the Forbearing Noteholders shall have standing to appear and be heard on all issues with regard to a Proposed Sale, including any

           (c) objection to the Proposed Sale by either Committee that could have been raised absent the settlement. All parties will cooperate and respond to informal and expedited information and discovery requests in a manner that takes into account the accelerated hearing schedule. Dana, DCC, and the Committees will use their best efforts to ensure any distributions of securities made on account of the Intercompany Claim pursuant to a plan receive the benefit of the exemption from securities laws set forth in section 1145 of the Bankruptcy Code.

           (d) Termination of Tax Sharing Agreement. The Tax Sharing Agreement shall be deemed terminated as of the Settlement Effective Date.

           (e) Waiver of Administrative Claims. Dana Credit hereby waives and releases any claims against the Debtors for amounts due Dana Credit after the Petition Date and through the Settlement Effective Date.

           (f) Administrative Claims Following Settlement Effective Date. After the Settlement Effective Date, the Debtors and Dana shall, on a monthly basis, settle their intercompany obligations. Thus, the applicable Debtor shall timely make cash payments to the applicable Dana Credit entity of all rental or other amounts that become due after the Settlement Effective Date under any lease of real or personal property between such Debtor and a Dana Credit entity or pursuant to any other arrangement where a Debtor uses property of a Dana Credit entity and vice versa; provided, however, that such payments shall be net of any amounts owed to any Debtor by any Dana Credit entity after the Settlement Effective Date for ordinary course operating expenses. With respect to tax liabilities and attributes after the Settlement Effective Date, if a state or federal tax or attribute is incurred in a jurisdiction where Dana ordinarily files a consolidated or combined return, Dana will include any Dana Credit liability in its consolidated or combined return and there will be no obligation on the part of Dana Credit to reimburse Dana for any tax liabilities included in such return or for Dana to reimburse Dana Credit for any tax attributes. Dana Credit will continue to file tax returns and pay any tax liabilities in jurisdictions where tax returns are not filed on a consolidated or combined basis with Dana.

           (g) Release of Real Property Escrow Funds to Dana. Dana Credit shall consent to the release to Dana of the currently escrowed proceeds from the sale of the Richards Road and Owensboro properties and hereby waives any right to receive any portion of the proceeds from such escrow accounts.

           (h) Extension of Time to Assume or Reject Leases. The time for the Debtors to assume or reject unexpired leases of non-residential real property between the Debtors, as lessee, and Dana Credit, as lessor, shall be extended until the date of entry of an order confirming a plan of reorganization in the Debtors’ cases.

2. Releases .

     2.1 Debtors’ Release . Except for the rights expressly arising out of, provided for, or reserved in this Agreement, upon the Settlement Effective Date, Dana Credit hereby releases, waives, withdraws, dismisses and forever discharges the Debtors and their respective parents, subsidiaries, affiliates, divisions, principals, directors, officers, shareholders, employees, agents, attorneys, successors, assigns, insurers, heirs and executors (excluding any Dana Credit entity), from any and all liabilities, torts, causes of action, or any debts, obligations, sums of money,

accounts, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, variances, trespasses, judgments, executions, costs, claims and demands whatsoever in law or in equity and any other obligation of any kind or nature whether known, unknown, suspected or unsuspected, fixed or contingent, concealed or hidden, latent or patent, (including but not limited to any claims existing or that otherwise might arise under the Tax Sharing Agreement), which any Dana Credit entity has against any Debtor as of the date of this Agreement.

     2.2 Dana Credit Release. Except for the rights expressly arising out of, provided for, or reserved in this Agreement, or with respect to any representations expressly made in the Settlement Agreement, upon the Settlement Effective Date, the Debtors hereby release, waive, withdraw, dismiss and forever discharge Dana Credit and their respective parents, subsidiaries, affiliates, divisions, principals, directors, officers, shareholders, employees, agents, attorneys, successors, assigns, insurers, heirs and executors from any and all liabilities, torts, causes of action, or any debts, obligations, sums of money, accounts, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, variances, trespasses, judgments, executions, costs, claims and demands whatsoever in law or in equity and any other obligation of any kind or nature whether known, unknown, suspected or unsuspected, fixed or contingent, concealed or hidden, latent or patent (including but not limited to any claims existing or that otherwise might arise under the Tax Sharing Agreement ), which any Debtor has against Dana Credit as of the date of this Agreement.

     2.3 With respect to the releases set forth in sections 2.1 and 2.2 above, each of the Parties, upon such releases becoming effective, shall be deemed to have expressly, knowingly and intentionally waived for themselves and for their respective legal successors and assigns, the benefits and rights of any statute, rule, doctrine or common law principal of any jurisdiction whatsoever that provides, in substance, that a general release does not extend to claims which the releasing party does not know or suspect to exist in his favor at the time of executing the release, which if known would have materially affected the decision to execute the release. The Parties each acknowledge that they have received independent legal advice from their attorneys with respect to this waiver and acknowledge that this waiver is a material inducement to and consideration for each Party’s execution of the Agreement.

     2.4 Each Party acknowledges that its counsel has reviewed this Agreement and it, he, or she, has been advised by such counsel concerning the import and effect and the advisability of entering into the releases and waivers contained in sections 2.1, 2.2, and 2.3 of the Agreement. Each Party understands that the releases set forth herein are intended to be full and complete releases of any and all claims or causes held by the releasing Parties against the releasees, including those claims or causes of action which may not yet exist because they are inchoate, and any and all claims or causes of action that might now exist but are not presently known to the Parties. Each Party understands and acknowledges that the significance and consequence of its waiver set forth in section 2.3 is that even if such Party eventually suffers or discovers additional claims or damages, no claim could be made for those claims or damages that are covered by the release given hereunder. Each Party also acknowledges that it intends these consequences even as to claims or damages that may exist as of the date hereof, but which for whatever reason such Party does not know exists, and which, if known, would materially affect such Party’s decision to execute this Agreement. The Parties intend this Agreement to be binding upon them regardless of any claims of mistake of law or fact, duress, or any other circumstance whatsoever in connection with any matter hereby dealt with or the negotiation and documentation of this

Agreement. In entering into this Agreement and releases provided for herein, each Party recognizes that no facts or representations are ever absolutely certain. Accordingly, except for representations explicitly set forth in this agreement, each Party assumes the risk that its understanding of the facts or the law was incorrect and the Parties shall not be entitled to set aside this Agreement or the releases provided for herein by reason thereof. The finality of the releases under this Agreement is a material factor inducing the Parties to enter into this Agreement. The Parties acknowledge that this Agreement has been negotiated at arm’s length by each of the Parties hereto and that each Party has participated in the drafting of this Agreement.

     2.5 The Parties represent and warrant that they currently own the claims and causes of action being released herein and have the legal right and authority to release and relinquish the claims now being released, as set forth hereinabove.

3. No Admissions . This Agreement is a settlement and compromise of disputed claims and any payment made hereunder is not (and is not to be construed as) an admission of liability by any Party. All parties should be presumed to have entered into this Agreement solely to avoid the costs and inconvenience of litigating their respective claims.

4. Advice of Counsel . Each of the Parties to this Agreement has read this Agreement and acknowledges that he, she or it has had the advice of counsel, and that no promise or representation of any kind, other than those set forth in this Agreement, has been made by any other Party or their representatives concerning the subject matter thereof.

5. Construction and Interpretation . Unless the context requires otherwise, singular nouns and pronouns used in this Agreement shall be deemed to include the plural, and pronouns of one gender shall be deemed to include the equivalent pronoun of the other gender. In the event of an ambiguity in, or controversy or claim arising out of, or relating to, the interpretation, application, or enforcement of, this Agreement, the Parties agree that no one will resolve any ambiguity in, or controversy or claim arising out of, or relating to, interpretation, application, or enforcement of, this Agreement by any rule providing for interpretation against the Party who causes the ambiguity to exist or against the draftsman.

6. Notices . Any notice given or demand made pursuant to this Agreement shall be made by hand-delivery, overnight mail or by certified mail, return receipt requested, to the following addresses:

If to the Debtors :

Debra Grassgreen
Pachulski Stang Ziehl Young Jones & Weintraub LLP
150 California Street, 15 ^th Floor
San Francisco, CA 94111

If to Dana Credit Corporation:

Robert S. Hertzberg
Pepper Hamilton LLP
420 Lexington Avenue
Suite 2320
New York, NY 10170-2399

If to Forbearing Noteholders or Ad Hoc Committee :

Matthew Cantor
Kirkland & Ellis LLP
Citigroup Center, 153 East 53rd Street
New York, NY 10022-4675

7. Continuing Jurisdiction of the Bankruptcy Court . This Agreement is subject to and contingent upon the approval by the Bankruptcy Court. The Bankruptcy Court shall have exclusive jurisdiction to determine as a core proceeding any dispute or controversy with respect to the interpretation or enforcement of this Agreement . The Bankruptcy Court will retain jurisdiction over a Proposed Sale of the Intercompany Claim pursuant to the procedures described in paragraph 1.2 (b) above.

8. Execution of the Agreement . This Agreement may be signed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

9. Effective Recitals . The Recitals to this Agreement shall have the same binding force and effect as the numbered paragraphs of this Agreement.

10. Integration . This Agreement together with the Forbearance Agreement and the Security Agreement that will be contemporaneously executed embodies the entire agreement and understanding by and between the Parties hereto relating to the subject matter hereof and supersedes all prior proposals, negotiations, agreements and understandings relating to such subject matter. No modification, amendment or waiver hereof shall be valid unless made in writing and signed by each party hereto.

11. Biding on Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the respective successors, predecessors, heirs, assigns, officers, directors, shareholders, employees, agents, and attorneys of the Parties to the extent provided by law

12. Titles and Captions . The Parties have inserted the paragraph titles in this Agreement only as a matter of convenience and for reference, and the paragraph titles in no way define, limit, extend, or describe the scope of this Agreement or the intent of the Parties in including any particular provision in this Agreement.

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     IN WITNESS WHEREOF, the parties, intending to be legally bound, have caused their duly authorized representatives to sign this Agreement:

Exhibit A

FORBEARANCE AGREEMENT

     This FORBEARANCE AGREEMENT, dated as of December 18, 2006 (this “ Agreement ”), is entered into by and among DANA CREDIT CORPORATION, a Delaware corporation (the “ Company ”), and each of the noteholders a party hereto (collectively, the “ Forbearing Noteholders ” and individually each a “ Forbearing Noteholder