EXHIBIT 3.6
to S-11
DELPHI PROPERTIES HOLDINGS, LLC
OPERATING AGREEMENT
THIS OPERATING AGREEMENT (this "Agreement") is made and
entered into as of this 28th day of March, 2003, by and between DELPHI
PROPERTIES, INC., a Maryland corporation (the "REIT"), and DELPHI CORPORATION, a
Delaware corporation ("Delphi"). The REIT and Delphi and any persons or entities
becoming parties to this Agreement subsequent to the date hereof are hereinafter
sometimes referred to individually as a "Member" and collectively as the
"Members".
EXPLANATORY STATEMENT
The parties hereto, desiring to form a limited liability
company pursuant to the provisions of the Maryland Limited Liability Company Act
("Act") and to regulate the affairs of such limited liability company and the
relations of its members pursuant to Section 4A-402 of the Act, do hereby
constitute themselves a Maryland limited liability company known as Delphi
Properties Holdings, LLC for the purposes and on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual promises of the
parties, and of good and valuable consideration, the receipt and sufficiency of
which hereby is acknowledged, it is mutually agreed by and between the parties
as follows:
1. Formation and Name. The parties to this Agreement agree to form a
limited liability company under the name "Delphi Properties Holdings, LLC" (the
"Company"), pursuant to the provisions of the Act and this Agreement. John G.
Blahnik (the "Authorized Person") formed the Company on March 25, 2003 (the
"Formation Date") by executing and filing Articles of Organization in the form
attached hereto as Exhibit A with the State Department of Assessments and
Taxation of Maryland (the "SDAT") and such filing by the Authorized Person is
hereby authorized, approved, ratified and confirmed by the Members.
2. Principal Office and Resident Agent. The principal office of the
Company in the State of Maryland shall be located at The Corporation Trust
Incorporated, 300 East Lombard Street, Baltimore, Maryland 21202. The name and
address of the resident agent of the Company is The Corporation Trust
Incorporated, 300 East Lombard Street, Baltimore, Maryland 21202. The resident
agent is a Maryland corporation.
3. Purposes.
3.1 Purposes of Formation. The purposes for which the Company
is formed are (a) to purchase, develop, invest in, own, lease or otherwise
acquire, operate, manage, sell, transfer, mortgage or otherwise dispose of
property, including, without limitation, mortgage notes and mortgage liens
issued by Delphi and contributed to the Company by the REIT, and to perform any
and all activities necessary and proper in connection therewith and convenient
or incidental thereto and (b) to engage in and perform any activities or
functions which may lawfully be performed by a limited liability company formed
pursuant to the Act.
3.2 No Limitation on General Powers. The foregoing enumerated
purposes and objects shall in no way limit or restrict by reference to, or
inference from, the terms of any other clause of this Agreement, and each shall
be regarded as independent; and they are intended to be and shall be construed
as powers as well as purposes and objects of the Company and shall be in
addition to and not in limitation of the general powers of limited liability
companies formed under the laws of the State of Maryland.
4. Term. The Company was formed on the Formation Date and shall
continue in existence until its existence is terminated pursuant to Section 8.4
and Section 14 hereof.
5. Members and Percentage Interest. The names, addresses and
designations of the Members of the Company are as set forth in Exhibit B which
is attached hereto and made a part of this Agreement. The REIT shall initially
have and own a one hundred percent (100%) interest ("Interest" or "Percentage of
Interest") in the Company and Delphi shall initially have and own a zero percent
(0%) Interest in the Company. Following the consummation of the transfer of
Interest referred to in Section 6.1 hereof, each Member shall have and own a
Percentage of Interest in the Company as set forth opposite each Member's name
and under the heading "Percentage of Interest" on Exhibit B. New Members may be
admitted to the Company upon the consent of the Member(s) holding at least a
majority of the Interests in the Company and on such terms and conditions as
shall be consented to by the Member(s) holding a majority of the Interests in
the Company prior to the admission of any new Member.
6. Capital and Loans.
6.1 Initial Capital Contribution; Transfer of Interest to
Delphi. The REIT hereby agrees to make an initial capital contribution of
mortgage notes issued by Delphi to the Company as set forth opposite the REIT's
name and under the heading "Capital Contribution" on Exhibit B hereto. Such
initial capital contribution shall be made by the REIT as soon as practicable
after the closing of the initial public offering of Series A Preferred Stock of
the REIT (the "Public Offering"). Immediately following the initial capital
contribution by the REIT, for the consideration contemplated in that certain
Contribution and Loan Agreement, by and between Delphi and the REIT, the REIT
will transfer an Interest to Delphi such that the resulting Percentage of
Interest for each Member will equal the Percentage of Interest shown on Exhibit
B.
6.2 Additional Contributions and Loans. The Members have not
agreed to make any additional capital contributions to the Company. However, the
Members may make additional contributions and loans to the Company at such time
or times, and upon such terms and conditions, as the Member(s) holding at least
a majority of the Interests of the Company may determine.
7. Capital Accounts. An individual Capital Account shall be maintained
for each Member. Each Member's Capital Account shall be maintained as provided
in Section 8 of this Agreement. No Member shall be paid interest on any Capital
Contribution, and except as otherwise provided in this Agreement, no Member
shall have the right to withdraw or receive any return of its Capital
Contribution. Under circumstances requiring a return of any Capital
Contribution, no Member shall have the right to receive property other than
cash. Increases or decreases to a Member's Capital Account shall not affect a
Member's Percentage of Interest.
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8. Profits, Losses and Distributions.
8.1 Defined Terms. For purposes of this Agreement, the
following terms shall have the meaning specified unless the context otherwise
requires:
"Adjusted Capital Contributions" means, for each
Member, such Member's Capital Contributions to the Company, reduced by the
amount of cash and the fair market value of any other asset distributed to such
Member pursuant to Section 8.3.(c) and Section 8.4 hereof. Such reduction,
however, shall not result in the Adjusted Capital Contribution of any Member
being below zero.
"Available Cash" means, with respect to any taxable
year of the Company, at the time of determination, the Company's cash reduced by
such amounts as the Members shall deem reasonably necessary to meet reasonably
anticipated expenditures or liabilities of the Company, including, but not
limited to, debts to Members who are creditors of the Company. Available Cash
shall not include proceeds from Capital Transactions.
"Capital Account" means, as to any Member, the
Capital Contribution actually made by that Member, plus all Profit allocated to
that Member, and minus the sum of (i) all Losses allocated to that Member, (ii)
the amount of cash and the fair market value of any other asset distributed to
that Member (net of liabilities, assumed or taken subject to by such Member),
and (iii) such Member's distributive share of all other expenditures of the
Company not deductible in computing its taxable income and not properly
chargeable as additions to the basis of the Company property. Each Member's
Capital Account shall be determined and maintained in accordance with the
Treasury Regulations adopted under Section 704(b) of the Code. Any questions
concerning a Member's Capital Account shall be resolved by applying principles
consistent with this Agreement and the Treasury Regulations adopted under
Section 704 of the Code in order to ensure that all allocations to the Members
will have substantial economic effect or will otherwise be respected for federal
income tax purposes.
"Capital Contribution" means the total amount of cash
and the fair market value (net of liabilities assumed or taken subject to by the
Company) of any other assets contributed (or deemed contributed) to the Company
by a Member.
"Capital Proceeds" means the gross receipts received
by the Company from a Capital Transaction.
"Capital Transaction" means the sale, exchange,
financing, refinancing, condemnation, casualty or other disposition of all, or
substantially all of the assets of the Company.
"Code" means the Internal Revenue Code of 1986, as
amended or any corresponding Section of any succeeding law.
"Minimum Gain" has the meaning set forth in Treasury
Regulations Section 1.704-2(d). Minimum Gain shall be computed separately for
each Member, applying principles consistent with both the foregoing definition
and the Treasury Regulations promulgated under Section 704 of the Code.
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"Negative Capital Account" means a Capital Account
with a balance less than zero.
"Positive Capital Account" means a Capital Account
with a balance equal to or greater than zero.
"Profit and Loss" means for each fiscal year or other
period, the amount equal to the Company's taxable income or loss for such year
or period, determined in accordance with Code Section 703(a) (for this purpose,
all items of income, gain, loss, or deduction required to be stated separately
pursuant to Code Sections 703(a)(1) shall be included in taxable income or
loss).
"Restoration Amount" means with respect to each
Member (a) the Member's share of Minimum Gain, and (b) any amount which the
Member is unconditionally required under this Agreement or by law to contribute
to the Company to restore its Negative Capital Account balance.
8.2 Allocation of Profit or Loss from Operations and Distributions of
Available Cash.
(a) Available Cash. For any taxable year of the Company,
Available Cash shall be distributed to the Members in proportion to their
respective Percentages of Interest or in such other proportion pursuant to the
consent of the Member(s) holding a majority of the Interests, it being expressly
understood and agreed that Available Cash may be distributed disproportionate to
the Members' respective Percentages of Interests if so determined in accordance
with the provisions of this Section.
(b) Taxable Income or Taxable Loss. For any taxable year of
the Company, Profit or Loss (other than Profit or Loss resulting from a Capital
Transaction, which Profit or Loss shall be allocated in accordance with the
provisions of Sections 8.3(a) and 8.3(b)) shall be allocated to the Members in
proportion to their respective Percentages of Interest.
(c) Special Allocations. Notwithstanding any other provision
to the contrary in this Agreement the following provisions shall apply:
(1) Contributed Property and Book-Ups. In accordance
with Code Section 704(c) and the Regulations thereunder, as well as Regulation
Section 1.704-1(b)(2)(iv)(d)(3), income, gain, loss and deduction with respect
to any property contributed (or deemed contributed) to the Company shall, solely
for tax purposes, be allocated among the Members so as to take account of any
variation between the adjusted basis of the property to the Company for federal
income tax purposes and its fair market value at the date of contribution (or
deemed contribution). If the adjusted book value of any Company asset is
adjusted as provided herein, subsequent allocations of income, gain, loss and
deduction with respect to the asset shall take account of any variation between
the adjusted basis of the asset for federal income tax purposes and its adjusted
book value in the manner required under Code Section 704(c) and the Regulations
thereunder.
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(2) Qualified Income Offset. No Member shall be
allocated Losses or deductions if such allocation causes a Member's Negative
Capital Account to increase in excess of the Member's Restoration Amount. If a
Member receives (1) an allocation of Loss or deduction (or item thereof) or (2)
any Company distribution, which causes such Member to have a Negative Capital
Account in excess of its Restoration Amount or increase a Member's Negative
Capital Account at the end of any Company taxable year in excess of its
Restoration Amount, then all items of income and gain of the Company (consisting
of a pro rata portion of each item of Company income, including gross income and
gain) for such taxable year shall be allocated to such Member, before any other
allocation is made of Company items for such taxable year, in the amount and in
proportions required to eliminate such excess as quickly as possible. This
Section 8.2(c)(2) is intended to comply with, and shall be interpreted
consistently with, the "qualified income offset" provisions of the Treasury
Regulations promulgated under Section 704(b) of the Code.
(3) Minimum Gain Chargeback. If there is a net
decrease in the Minimum Gain during any taxable year and if any Member has a
Negative Capital Account as of the last day of such taxable year which exceeds
its Restoration Amount as of such last day, then all items of gross income and
gain of the Company for such taxable year (and, if necessary, for subsequent
taxable years) shall be allocated to such Member in the amount and in the
proportions required to eliminate such excess as quickly as possible. This
Section 8.2(c)(3) is intended to comply with, and shall be interpreted
consistently with, the "minimum gain chargeback" provisions of the Treasury
Regulations promulgated under Section 704(b) of the Code.
8.3 Allocation of Profit or Loss from a Capital Transaction and
Distribution of Capital Proceeds.
(a) Taxable Income. Profit from a Capital Transaction shall be
allocated as follows:
(1) If one or more Members has a Negative Capital
Account, Profit from a Capital Transaction shall be allocated first to those
Members, in proportion to their Negative Capital Accounts, until all Negative
Capital Accounts have been increased to zero; then
(2) Any remaining Profit not allocated pursuant to
Section 8.3(a)(1) shall be allocated to the extent necessary so that the Capital
Account balances of the Members are equal to the amounts distributable to them
pursuant to Section 8.3(c).
(b) Taxable Loss. Loss from a Capital Transaction shall be
allocated as follows:
(1) If one or more Members has a Positive Capital
Account, Loss from a Capital Transaction shall be allocated first to those
Members, in proportion to their Positive Capital Accounts, until all Positive
Capital Accounts have been reduced to zero; then
(2) Any remaining Loss not allocated to reduce
Positive Capital Accounts to zero pursuant to Section 8.3(b)(1) shall be
allocated to the Members in proportion to their respective Percentages of
Interest.
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(c) Capital Proceeds. Distributions of net Capital Proceeds
(after repayment of all debts and liabilities of the Company, including loans
from Members, and the establishment of any reserves that the Members deem
necessary) shall be made in the following order of priorities:
(1) First, to each Member, pro rata in proportion to
each Member's Adjusted Capital Contributions, an amount of cash equal to the
amount of that Member's respective Adjusted Capital Contributions; then
(2) If one or more Members has a Positive Capital
Account before any further allocation of profit pursuant to Section 8.3(a)(2),
to those Members, in proportion to and to the extent of their respective
Positive Capital Account balances; and then
(3) The balance to the Members in proportion to their
respective Percentages of Interest.
8.4 Liquidation or Dissolution. In the event the Company is liquidated
or dissolved, the assets of the Company shall be distributed, after taking into
account the allocations of Profit or Loss pursuant to Sections 8.2 or 8.3, if
any, and distributions of cash or property pursuant to Section 8.2 or 8.3, if
any, to the Members to the extent of and in proportion to the balances in their
respective Positive Capital Accounts.
8.5 General.
(a) The timing and amount of all distributions shall be as
determined by the Members.
(b) If any assets of the Company are distributed to the
Members in kind, those assets shall be valued on the basis of their fair market
value, and any Member entitled to any interest in those assets shall receive
that interest as a tenant-in-common with all other Members so entitled. The fair
market value of the assets distributed in kind shall be determined by an
independent appraiser selected by the Members. Based upon the fair market value,
the Profit or Loss for each unsold asset shall be determined as if that asset
had been sold at its fair market value, and the Profit or Loss shall be
allocated as provided in Section 8.3 and shall be properly credited or charged
to the Capital Accounts of the Members prior to the dissolution of the assets in
liquidation pursuant to Section 8.4.
(c) For each taxable year, all Profit and Loss of the Company
shall be allocated at and as of that taxable year. The allocations of Profit and
Loss shall be made within seventy-five (75) days after the end of such taxable
year.
(d) Except as otherwise provided in this Section 8.5(d), all
Profit and Loss shall be allocated, and all distributions of cash shall be
distributed, as the case may be, to the persons shown on the records of the
Company to have been Members as of the last day of the taxable year for which
that allocation or distribution is to be made. Unless the Members agree to
separate the Company's fiscal year into segments, if the Company admits a new
member to the Company or if a Member sells, exchanges or otherwise disposes of
all or any portion of its Interest to any person who, during that taxable year,
is admitted as an additional or substitute
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member, the Profit and Loss shall be allocated between the transferror and the
transferee on the basis of the number of days of the taxable year in which each
was a member; provided, however, that in the event of a Capital Transaction or
any other extraordinary non-recurring items of the Company, Profit, Loss and
distributions shall be allocated to the Persons shown on the records of the
Company as of the date of such event.
(e) The methods set forth above by which Profit, Loss, and
distributions are allocated, apportioned, and paid are hereby expressly
consented to by each Member as an express condition to becoming a Member. Upon
the advice of the outside accountants or of legal counsel to the Company, this
Section 8 may be amended to comply with the Code and the regulations promulgated
under Section 704 of the Code; provided, however, that no such amendment shall
become effective without the consent of those Members who would be materially or
adversely affected thereby.
9. Management.
9.1 Right to Manage. The Members, acting by consent or
approval of the Members holding at least a majority of the Interests in the
Company, shall have the exclusive right to manage the business of the Company
and to perform any and all activities in connection therewith. No Member shall
be an agent of the Company solely by virtue of being a member, and no member
shall have authority to act for or bind the Company solely by virtue of being a
Member. Subject to Section 10 hereof, the Members, by consent or approval of the
Members holding at least a majority of the Interests in the Company, may
generally or specifically authorize and direct one or more persons (who may be a
Member) to act for and bind the Company and to execute documents, instruments
and agreements on behalf of the Company. The Members have initially authorized
and directed the REIT to act for and bind the Company and to execute documents,
instruments and agreements on behalf of the Company, except as otherwise
provided in Section 9.2. Without limiting the generality of the foregoing
sentence, the REIT is hereby authorized and directed to act for and bind the
Company in connection with the Public Offering and, in the sole discretion of
the REIT, to (a) execute all documents, instruments and agreements on behalf of
the Company necessary or desirable in connection with the Public Offering and
(b) make any necessary or desirable filings with the United States Securities
and Exchange Commission or any other government instrumentality in connection
with the Public Offering.
9.2 Tax Matters Member. Delphi shall be the tax matters
partner of the Company within the meaning of the Code and shall exercise all
rights, obligations and duties of a tax matters partner under the Code, subject
to the Members' right to manage the business of the Company and to give further
direction to the tax matters partner under Section 9.1 hereof. The Members,
acting by consent or approval of the Members holding at least a majority of the
Interests in the Company, may designate any other Member as a substitute or
alternative tax matters partner and, in such event, shall deliver written notice
of such designation to all Members.
9.3 Books, Records and Reports. The REIT shall have physical
possession of the books and records of the Company, and the REIT shall give such
notices and reports to the Members as may, from time to time, be required or
deemed advisable.
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9.4 Meeting. Meetings of the Company shall be held on not less
than twenty-four (24) hours' notice or on such shorter notice as may be mutually
agreeable to the Members, on the call of any Member. Notice of the time and
place of each meeting shall be given in writing to each Member by the Member
calling the meeting. Attendance of Members holding at least a majority of the
Interests in the Company shall constitute a quorum for the transaction of
business.
10. Restrictions on Members.
10.1 Restrictions in General. No Member, without the prior
unanimous written consent of the Members, shall:
(a) Sell, assign, transfer, mortgage or pledge its,
her or its Interest in the Company, except for the transfer by the REIT to
Delphi described in Section 6.1 above;
(b) Assign, transfer, pledge, compromise, or release
any claim of the Company except for full payment, or arbitrate or consent to the
arbitration of any disputes or controversies involving the Company;
(c) Use the name, credit or property of the Company
for any purpose other than a proper Company purpose;
(d) Admit a new Member to the Company;
(e) Cause the merger of the Company with or into any
other business entity; or
(f) Do any act in conflict with the Company business
or which would make it impossible to carry on that business.
10.2 Restrictions on Business Activities of Members. Each
Member shall be free to engage in such business activities as such Member may
desire on such Member's own behalf or on behalf of any other person or entity,
including business activities which may be in competition with the business
activities of the Company; and neither the Company nor any other Member shall
have any right to participate in or receive a share of the profits of any such
business activities of such Member.
11. Substitute Members. No Member has the right to grant the right to
become a substitute Member to an assignee of any part of its Interest, except
with the prior unanimous written consent of the Members.
12. Withdrawal. No Member may voluntarily withdraw from the Company
except as provided in Section 13 of this Agreement.
13. Dissolution; Right to Continue.
13.1 Voluntary Withdrawal. No Member shall have the right to
withdraw from and thereby dissolve the Company, except upon the prior unanimous
written consent of the
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Members. Notice of a Member's intention to withdraw from the Company pursuant to
this Section 13.1 must be given in writing to the other Member(s) at least ten
(10) days prior to the proposed effective date of such withdraw.
13.2 Continuation. Upon the withdraw of a Member in accordance
with this Section 13, or the occurrence of any event which causes dissolution of
the Company under Section 4A-902 of the Act, the remaining Member(s) shall have
the right to continue the Company.
14. Liquidation and Termination. In the event the Company is dissolved,
the Members shall promptly file with the SDAT, pursuant to Section 4A-910 of the
Act, Articles of Cancellation, and shall commence the winding up of the affairs
of the Company by discharging all debts and liabilities of the Company and by
distributing all assets in accordance with Section 8.4.
15. Books and Records. Adequate accounting records of all Company
business shall be kept and these shall be open to inspection by any of the
Members at all reasonable times. The Company shall maintain its accounting
records and shall report for income tax purposes on the accrual method of
accounting. Within seventy-five (75) days after the end of each taxable year and
at the expense of the Company, the Members shall cause to be prepared a complete
accounting of the affairs of the Company, together with whatever appropriate
information is required by each Member for the purpose of preparing such
Member's income tax return for that year, which accounting and information shall
be furnished to each Member.
16. Bank Accounts. All funds of the Company shall be deposited in
Company checking or other bank accounts, subject to such authorized signatures
as the Members may determine.
17. Miscellaneous.
17.1 Liability of the Members. No Member shall be liable,
responsible or accountable in damages or otherwise to any other Member or to the
Company for any act or omission performed or omitted by him except for acts of
gross negligence or intentional wrongdoing.
17.2 Indemnification. The Members shall be indemnified by the
Company for any act or omission performed or omitted by them for which they are
not liable pursuant to Section 17.1 above.
17.3 Waiver of Partition. The Members hereby waive any right
of partition or any right to take any other action that otherwise might be
available to them for the purpose of severing their relationship with the
Company or their interest in the assets held by the Company from the interest of
the other Members.
17.4 Binding Provisions. The covenants and agreements
contained in this Agreement shall be binding upon the representatives,
successors and assigns of the respective parties to this Agreement.
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17.5 Severability of Provisions. Each provision of this
Agreement shall be considered separable and if for any reason any provision or
provisions hereof are determined to be invalid and contrary to any existing or
future law, such invalidity shall not impair the operation of or affect those
portions of this Agreement that are valid.
17.6 Entire Agreement; Amendment. This Agreement constitutes
the entire understanding and agreement among the parties with respect to the
subject matter of this Agreement, and supersedes all prior and contemporaneous
agreements and understandings, inducements, or conditions, express or implied,
oral or written, except as contained in this Agreement. This Agreement may not
be amended or modified except with the written consent of all Members.
17.7 Notices. All notices, demands, requests, consents, or
approvals required under this Agreement to be in writing shall be deemed to have
been properly given if and when mailed by first class certified mail, return
receipt requested, postage prepaid, to the respective address of the Member
shown on Exhibit B hereto, or at such other address as a Member shall have
furnished to the other Member(s) in writing.
17.8 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland.
17.9 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which when
taken together, constitute one and the same instrument, binding on the Members.
The signature of any party to any counterpart shall be deemed a signature to,
and may be appended to, any other counterpart.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Members have executed this Agreement
under seal as of the day and year first above written.
DELPHI PROPERTIES, INC.
_______________________________(SEAL)
NAME: John Blahnik
TITLE: Chief Executive Officer and
President
DELPHI CORPORATION
_______________________________(SEAL)
NAME: John Blahnik
TITLE: Treasurer
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EXHIBIT A
ARTICLES OF ORGANIZATION
OF
DELPHI PROPERTIES HOLDINGS, LLC
EXHIBIT B
MEMBERS
OF
DELPHI PROPERTIES HOLDINGS, LLC
(Capital Contribution and Percentage of Interest upon closing of Public
Offering and transfer of Interest referred to in the Operating Agreement)
Member Name Capital Percentage of
and Address Contribution Interest
- ------------------ ------------ ---------------
Delphi Properties, Inc. The Mortgage Notes listed 99.0%
5725 Delphi Drive on Schedule B-1 attached
Troy, Michigan 48098 hereto
Delphi Corporation 1.0%
5725 Delphi Drive
Troy, Michigan 48098