Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1 Registration Statement (General Form) 117 564K
10: EX-10.10 Amendment #1 Stock Option Plan 4 23K
11: EX-10.11 Amendment #2 Stock Option Plan 1 9K
12: EX-10.12 Amendment #3 Stock Option Plan 2 13K
13: EX-10.13 Loan Agreement 22 71K
14: EX-10.14 Amendment #1 Loan Agreement 2 13K
15: EX-10.15 Amendment #2 Loan Agreement 2 14K
16: EX-10.16 Credit Agreement 141 486K
17: EX-10.17 Amendment #1 Credit Agreement 21 35K
18: EX-10.18 Amendment #2 Credit Agreement 4 17K
2: EX-10.2 Stock Purchase Agreement 45 213K
19: EX-10.20 Saturn Membership Regulations 38 131K
20: EX-10.21 Amendment #1 Membership Regulations 1 10K
21: EX-10.22 Amendment #2 Membership Regulations 4 21K
22: EX-10.23 Amendment #3 Membership Regulations 1 10K
23: EX-10.24 Amendment #4 Membership Regulations 1 11K
24: EX-10.25 Sublease 8 35K
25: EX-10.26 Amendment to Sublease 1 12K
3: EX-10.3 Methuen Division 21 100K
4: EX-10.4 Stock Purchase Agreement 6 31K
5: EX-10.5 Agreement and Plan of Merger 44 222K
6: EX-10.6 Split Dollar Agreement 12 40K
7: EX-10.7 Independent Contractor 6 26K
8: EX-10.8 Amendment to Independent Contractor 1 11K
9: EX-10.9 Saturn Stock Option Plan 12 46K
26: EX-23.1 Consent Pricewaterhousecoopers LLP 1 9K
27: EX-23.2 Consent Ernst & Young 1 9K
28: EX-27.1 Financial Data Schedule 1 11K
EXHIBIT 10.20
SATURN ELECTRONICS TEXAS, L.L.C.
MEMBERSHIP REGULATIONS
THESE MEMBERSHIP REGULATIONS (these "Regulations") are entered into as
of this 25th day of February, 1998 by and among the signatories hereto.
RECITALS
The following is a recital of facts underlying these Regulations:
A. The parties have decided to organize and operate a limited
liability company.
B. The parties desire to set forth in these Regulations certain
terms and conditions relating to the affairs of the limited
liability company and the conduct of its business, including
the manner in which it will be managed and the way in which
profits and losses will be shared.
NOW, THEREFORE, for good and valuable consideration, the parties agree
as follows:
SECTION I -- DEFINED TERMS
For purposes of these Regulations, the following capitalized terms
shall have the meanings set forth in this Section I.
"Act"
means the Texas Limited Liability Company Act, as amended from time to time.
"Adjusted Capital Account Deficit"
means, with respect to any Member, the deficit balance, if any, in the Member's
Capital Account as of the end of the relevant taxable year, after giving effect
to the following adjustments:
(i) the deficit shall be decreased by the amounts that the Member is
obligated to restore pursuant to Section 4.4.2, or is deemed obligated
to restore pursuant to Regulation Section 1.704-1(b)(2)(ii)(c); and
(ii) the deficit shall be increased by the items described in Regulation
Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6).
"Adjusted Capital Balance"
means, as of any day, a Members total Capital Contributions less all amounts
actually distributed to the Member pursuant to Sections 4.2.3.4.1 and 4.4
hereof. If any Interest is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Adjusted Capital Balance of the
transferor to the extent the Adjusted Capital Balance relates to the Interest
transferred.
"Affiliate"
means, with respect to any Member, any Person: (i) which owns more than fifty
percent (50%) of the voting interests in the Member; or (ii) in which the Member
owns more than fifty percent (50%) of the voting interests; or (iii) in which
more than fifty percent (50%) of the voting interests are owned by a Person who
has a relationship with the Member described in clause (i) or (ii) above.
"Articles" or "Articles of Organization"
means the Articles of Organization of the Company filed with the Secretary of
State, as amended from time to time.
"Automotive Customers"
shall mean companies in the Territory that: A) are original equipment
manufacturers of passenger cars or light trucks, or B) purchase products for
incorporation into their own products and resale to the companies referenced in
(A) above.
"Battery Cables"
shall mean wire assemblies that provide direct power from the battery to the
engine or associated electro-mechanical devices.
"Build-to-Print"
shall mean the manufacture of products from blue prints and specifications
provided by the purchaser or the Automotive Customer without the Company
providing any design or engineering services itself.
"Business Plan"
shall mean a written summary setting forth the strategic direction of the L.L.C.
for the next fiscal year, including 1) financial statements, and 2) a summary of
the five (5) year sales and financial objectives of the L.L.C., that will be
presented annually to the Members for review and approval.
"Capital Account"
means the account to be maintained by the Company for each Member in accordance
with the following provisions:
(i) a Member's Capital Account shall be credited with the Member's
Capital Contributions, the amount of any Company liabilities
assumed by the
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Member (or which are secured by Company property distributed to
the Member), the Member's distributive share of Profit, and any
item in the nature of income or gain specially allocated to such
Member pursuant to the provisions of Section IV (other than
Section 4.3.3); and
(ii) a Member's Capital Account shall be debited with the amount of
money and the fair market value of any Company property
distributed to the Member, the amount of any liabilities of the
Member assumed by the Company (or which are secured by property
contributed by the Member to the Company), the Member's
distributive share of Loss, and any item in the nature of
expenses or losses specially allocated to the Member pursuant to
the provisions of Section IV (other than Section 4.3.3).
If any Interest is transferred pursuant to the terms of this Agreement, the
transferee shall succeed to the Capital Account of the transferor to the extent
the Capital Account is attributable to the transferred Interest. If the book
value of Company property is adjusted pursuant to Section 4.3.3, the Capital
Account of each Member shall be adjusted to reflect the aggregate adjustment in
the same manner as if the Company had recognized gain or loss equal to the
amount of such aggregate adjustment. It is intended that the Capital Accounts of
all Members shall be maintained in compliance with the provisions of Regulation
Section 1.704-1 (b), and all provisions of this Agreement relating to the
maintenance of Capital Accounts shall be interpreted and applied in a manner
consistent with that Regulation.
"Capital Contribution"
means the total amount of cash and the fair market value of any other net assets
contributed (or deemed contributed under Regulation Section 1.704-1
(b)(2)(iv)(d)) to the Company by a Member.
"Capital Proceeds"
means the gross receipts received by the Company from a Capital Transaction.
"Capital Transaction"
means any transaction not in the ordinary course of business that results in the
Company's receipt of cash or other consideration other than Capital
Contributions, including, without limitation, proceeds of sales or exchanges or
other dispositions of property not in the ordinary course of business,
financings, refinancings, condemnations, recoveries of damage awards, and
insurance proceeds.
"Code"
means the Internal Revenue Code of 1986, as amended from time to time, or any
corresponding provision of any succeeding law.
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"Company"
means the limited liability company formed under the Act in accordance with this
Agreement.
"Complete Electrical Distribution Systems"
shall mean the entire set of wire harnesses that provide for electrical
transmissions throughout the entire vehicle or other product.
"Ground Straps"
shall mean specific point to point braided wire sets that are used to provide a
grounding source for specific vehicle applications.
"Interest"
means a Member's share of the Profits and Losses of, and the right to receive
distributions from, the Company.
"Involuntary Withdrawal"
means, with respect to any Member, the occurrence of any of the following
events:
(i) the Member makes an assignment for the benefit of creditors;
(ii) the Member files a voluntary petition of bankruptcy;
(iii) the Member is adjudged bankrupt or insolvent or there is entered
against the Member an order for relief in any bankruptcy or
insolvency proceeding;
(iv) the Member files a petition seeking for the Member any
reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any statute,
law, or regulation;
(v) the Member seeks, consents to, or acquiesces in the appointment
of a trustee for, receiver for, or liquidation of the Member or
of all or any substantial part of the Member's properties;
(vi) the Member files an answer or other pleading admitting or failing
to contest the material allegations of a petition filed against
the Member in any proceeding described in Subsections (i) through
(v);
(vii) any proceeding against the Member (not filed by the Member)
seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any statute,
law, or regulation, continues for one hundred twenty (120) days
after the commencement
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thereof, or the appointment of a trustee, receiver, or liquidator
for the Member or all or any substantial part of the Member's
properties without the Member's agreement or acquiescence, which
appointment is not vacated or stayed within one hundred twenty
(120) days or, if the appointment is stayed, continues for one
hundred twenty (120) days after the expiration of the stay during
which period the appointment is not vacated;
(viii) if the Member is an individual, the Member's death or
adjudication by a court of competent jurisdiction as incompetent
to manage the Member's person or property;
(ix) if the Member is acting as a Member by virtue of being a trustee
of a trust, the termination of the trust;
(x) if the Member is a partnership or limited liability company, the
dissolution and commencement of winding up of the partnership or
limited liability company;
(xi) if the Member is a corporation, the dissolution of the
corporation or the revocation of its charter; or
(xii) if the Member is an estate, the distribution by the fiduciary of
the estate's entire interest in the limited liability company.
"IRS Regulations"
means the federal income tax regulations promulgated under the Code, including
any temporary regulations, as in effect from time to time.
"Manager"
is the Person designated as such in Section V.
"Member"
means each Person signing these Regulations and any Person who subsequently is
admitted as a member of the Company.
"Member Loan Nonrecourse Deductions"
means any Company deductions that would be Nonrecourse Deductions if they were
not attributable to a loan made or guaranteed by a Member within the meaning of
Regulation Section 1.704-2(i).
"Member Tax Distributions"
means the amount that is distributable to the Members to pay their proportional
shares
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of Federal and State income taxes. This amount will be initially calculated at
thirty-eight percent (38%) of the Company's annual Profit times each Members'
Interest Percentage. This percentage may be changed from time to time by the
Members as tax rates and / or jurisdictions of the Company or Members change. No
Member Tax Distributions will be made in a year with a Company Loss.
"Membership Rights"
means all of the rights of a Member in the Company, including a Member's: (i)
right to a share of the Profits and Losses of, and to receive distributions
from, the Company; (ii) right to inspect the Company's books and records; (iii)
right to participate in the management and affairs of, and to vote on matters
coming before, the Company to the extent set forth in these Regulations; and
(iv) unless this Agreement or the Articles of Organization provide to the
contrary, right to act as an agent of the Company.
"Minimum Gain"
has the meaning set forth in IRS Regulation Section 1.704-2(d). Minimum Gain
shall be computed separately for each Member in a manner consistent with the IRS
Regulations under Code Section 704(b).
"Negative Capital Account"
means a Capital Account with a balance of less than zero.
"Nonrecourse Deductions"
has the meaning set forth in Regulation Section 1.704-2(b)(1). The amount of
Nonrecourse Deductions for a taxable year of the Company equals the net
increase, if any, in the amount of Minimum Gain during that taxable year,
determined according to the provisions of Regulation Section 1.704-2(c).
"Nonrecourse Liability"
means any liability of the Company with respect to which no Member has personal
liability determined in accordance with Code Section 752 and the IRS Regulations
promulgated thereunder.
"Percentage"
means, as to a Member, the percentage set forth after the Member's name on
Exhibit A, as amended from time to time, and as to any holder of any Interest
who is not a Member, the Percentage of the Member whose Interest has been
acquired by such holder, to the extent the holder has succeeded to that Member's
Interest.
"Person"
means and includes an individual, partnership, limited liability company,
association, corporation, or any other legal entity.
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"Positive Capital Account"
means a Capital Account with a balance greater than zero.
"Profit" and "Loss"
means, for each taxable year of the Company (or other period for which Profit or
Loss must be computed), the Company's taxable income or loss determined in
accordance with Code Section 703(a), with the following adjustments:
(i) all items of income, gain, loss, deduction, or credit required to
be stated separately pursuant to Code Section 703(a)(1) shall be
included in computing taxable income or loss; and
(ii) any tax-exempt income of the Company, not otherwise taken into
account in computing Profit or Loss, shall be included in
computing taxable income or loss; and
(iii) any expenditures of the Company described in Code Section
705(a)(2)(B) (or treated as such pursuant to Regulation Section
1.704-1 (b)(2)(iv)(i)) and not otherwise taken into account in
computing Profit or Loss, shall be subtracted from taxable income
or loss; and
(iv) gain or loss resulting from any taxable disposition of Company
property shall be computed by reference to the adjusted book
value of the property disposed of, notwithstanding the fact that
the adjusted book value differs from the adjusted basis of the
property for federal income tax purposes; and
(v) in lieu of the depreciation, amortization or cost recovery
deductions allowable in computing taxable income or loss, there
shall be taken into account the depreciation computed based upon
the adjusted book value of the asset; and
(vi) notwithstanding any other provision of this definition, any items
which are specially allocated pursuant to Section 4.3 hereof
shall not be taken into account in computing Profit or Loss.
"Regulations"
means these Regulations, as amended from time to time.
"Secretary of State"
means the Secretary of State of the State of Texas, Corporation Division.
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"Territory"
shall mean the United States, Canada and Mexico.
"Trailer Tow Harnesses"
shall mean wire harness sets utilized as a connection from the vehicle rear
lighting system to a trailer's lighting system for the purpose of providing
braking and turn signal indication during a towing process.
"Transfer"
means, when used as a noun, any voluntary sale, hypothecation, pledge,
assignment, or other transfer, and, when used as a verb, means voluntarily to
sell, hypothecate, pledge, assign or otherwise transfer.
"UTA"
shall mean United Technologies Automotive, Inc.
"Voluntary Withdrawal"
means a Member's disassociation with the Company by means other than ceasing to
be a Member as a result of a permitted Transfer or an Involuntary Withdrawal,
including but not limited to retirement or resignation.
SECTION II -- FORMATION AND NAME; OFFICE; PURPOSE; TERM
2.1. Organization.
The parties have organized a limited liability company pursuant to the
Act and the provisions of these Regulations and, for that purpose, have
caused Articles of Organization in the form attached as Exhibit B to be
executed and filed for record with the Secretary of State.
2.2. Name of the Company.
The name of the Company shall be "SATURN ELECTRONICS TEXAS, L.L.C.." If
the Company does business under a name other than that set forth in its
Articles of Organization, then the Company shall file an assumed name
certificate as required by law.
2.3. Purpose.
The Company is organized solely to do the following business activities
in the Territory. Any other activity is subject to the approval of the
Members.
2.3.1. Build-to-Print manufacture and sale of Battery Cables and
Ground Straps for Automotive Customers. For UTA sourced
vehicle lines, UTA shall be the engineering design source. For
non-UTA sourced vehicle lines, UTA
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shall be the prefered source for engineering design. The
Company shall be the exclusive outside supplier of Battery
Cables and Ground Straps for UTA designed electrical
distribution systems according to the terms and conditions
agreed to by the parties in a separate written agreement.
2.3.2 Build-to-Print manufacture and sale of Trailer Tow Harnesses.
2.3.3 Design, engineering, manufacture, marketing and sale of
Complete Electrical Distribution Systems and related products
to customers that are not Automotive Customers.
and to do any and all things necessary, convenient, or
incidental to these purposes.
2.4. Term.
The term of the Company shall begin on the date that the Articles of
Organization were filed with the Department and became effective under
the Act, and shall continue in existence for a period of fifty
(50) years unless its existence is terminated earlier pursuant to
Section VII of this Agreement.
2.5. Registered Office.
The registered office of the Company shall be located at CT Corporation
System, 811 Dallas Avenue, Houston, TX, 77002.
2.6. Registered Agent.
The name and address of the Company's initial registered agent in the
State of Texas shall be CT Corporation System.
2.7. Members.
The name, present mailing address, taxpayer identification number, and
Percentage of each Member are set forth on Exhibit A.
SECTION III - MEMBERS; CAPITAL; CAPITAL ACCOUNTS
3.1 Initial Capital Contributions.
Upon the execution of these Regulations and as a condition of becoming
a Member, each Member shall contribute to the Company cash or property
in the amount set forth for such Member on Exhibit A.
3.2. No Interest on Capital Contributions.
Members shall not be paid interest on their Capital Contributions.
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3.3. Return of Capital Contributions.
Except as otherwise provided in this Agreement, no Member shall have
the right to receive the return of any Capital Contribution.
3.4. Form of Distribution.
If a Member is entitled to receive a distribution, including but not
limited to any return of a Capital Contribution, the Member shall not
have the right to receive anything but cash.
3.5. Capital Accounts.
A separate Capital Account shall be maintained for each Member in
accordance with IRS Regulations issued under Section 704(b) of the
Code.
3.6. Loans.
Any Member may, with the written consent of the other Members, make or
cause a loan to be made to the Company in any amount and on those terms
upon which the Company and the Member agree. If a Member makes any
loans to the Company or advances money on its behalf, the amount of
such loan or advance shall not be treated as a contribution to the
capital of the Company but shall be a debt due from the Company. Any
such loan or advance shall be repayable out of the Company's cash and
shall bear interest at a rate not less than the applicable federal rate
as defined in Section 1274(d) of the Code. No Member shall be obligated
pursuant to this Agreement to make any loan or advance to the Company.
SECTION IV -- Profit, Loss, and Distributions
4.1. Distributions and Allocations of Profit or Loss Other than Capital
Transactions.
4.1.1. Profit or Loss Other than from a Capital Transaction.
After giving effect to the special allocations set forth in
Section 4.3, 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 4.2.1 and 4.2.2)
shall be allocated to the Members in proportion to their
Percentages.
4.1.2. Distributions from Capital Accounts.
Distributions from Capital Accounts for each taxable year of
the Company shall be determined by the Members.
4.2. Distributions of Capital Proceeds and Allocation of Profit or Loss from
Capital Transactions.
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4.2.1. Profit.
After giving effect to the special allocations set forth in
Section 4.3, Profit from a Capital Transaction shall be
allocated as follows:
4.2.1.1. If one or more Members has a Negative Capital
Account, to those Members in proportion to their
Negative Capital Accounts, until all of those
Negative Capital Accounts have been reduced to zero.
4.2.1.2. Any Profit not allocated pursuant to Section
4.2.1.1. shall be allocated to the Members in
proportion to, and to the extent of, the amounts
distributable to them pursuant to Sections
4.2.3.4.1. and 4.2.3.4.2.
4.2.1.3. Any Profit in excess of the foregoing allocations
shall be allocated to the Members in proportion to
their Percentages.
4.2.2. Loss.
After giving effect to the special allocations set forth in
Section 4.3, Loss from a Capital Transaction shall be
allocated as follows:
4.2.2.1. If one or more Members has a Positive Capital
Account, to those Members, in proportion to their
Positive Capital Accounts, until all Positive
Capital Accounts have been reduced to zero.
4.2.2.2. Any Loss not allocated to reduce Positive Capital
Accounts to zero pursuant to Section 4.2.2.1 shall
be allocated to the Members in proportion to their
Percentages.
4.2.3. Capital Proceeds.
Capital Proceeds shall be distributed and applied by the
Company in the following order and priority:
4.2.3.1. to the payment of all expenses of the Company
incident to the Capital Transaction: then
4.2.3.2. to the payment of debts and liabilities of the
Company then due and outstanding (including all
debts due to any Member); then
4.2.3.3. to the establishment of any reserves that the
Manager deems necessary for liabilities or
obligations of the Company; then
4.2.3.4. the balance shall be distributed as follows:
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Company's other items of income and gain for the taxable year.
It is the intent of the parties hereto that any allocation
pursuant to this Section 4.3.2 shall constitute a "minimum
gain chargeback" under Regulation Section 1.704-2(f).
4.3.3. Contributed Property and Book-ups.
In accordance with Code Section 704(c) and the IRS Regulations
under 1.704 - 3(c), 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 IRS
Regulations thereunder.
4.3.4. Code Section 754 Adjustment.
To the extent an adjustment to the tax basis of any Company
asset pursuant to Code Section 734(b) or Code Section 743(b)
is required, pursuant to Regulation Section 1.704-1
(b)(2)(iv)(m), to be taken into account in determining Capital
Accounts, the amount of the adjustment to the Capital Accounts
shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment
decreases basis), and the gain or loss shall be specially
allocated to the Members in a manner consistent with the
manner in which their Capital Accounts are required to be
adjusted pursuant to that Section of the IRS Regulations.
4.3.5. Nonrecourse Deductions.
Nonrecourse Deductions for a taxable year or other period
shall be specially allocated among the Members in proportion
to their Percentages.
4.3.6. Member Loan Nonrecourse Deductions.
Any Member Loan Nonrecourse Deduction for any taxable year or
other period shall be specially allocated to the Member who
bears the risk of loss with respect to the loan to which the
Member Loan Nonrecourse Deduction is attributable in
accordance with Regulation Section 1.704-2(b).
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4.3.7. Guaranteed Payments.
To the extent any compensation paid to any Member by the
Company, including any fees payable to any Member pursuant to
Section 5.3 hereof, is determined by the Internal Revenue
Service not to be a guaranteed payment under Code Section
707(c) or is not paid to the Member other than in the Person's
capacity as a Member within the meaning of Code Section
707(a), the Member shall be specially allocated gross income
of the Company in an amount equal to the amount of that
compensation, and the Member's Capital Account shall be
adjusted to reflect the payment of that compensation.
4.3.8. Unrealized Receivables.
If a Member's Interest is reduced (provided the reduction does
not result in a complete termination of the Member's
Interest), the Member's share of the Company's "unrealized
receivables" and "substantially appreciated inventory" (within
the meaning of Code Section 751) shall not be reduced, so
that, notwithstanding any other provision of these Regulations
to the contrary, that portion of the Profit otherwise
allocable upon a liquidation or dissolution of the Company
pursuant to Section 4.4 hereof that is taxable as ordinary
income (recaptured) for federal income tax purposes shall, to
the extent possible without increasing the total gain to the
Company or to any Member, be specially allocated among the
Members in proportion to the deductions (or basis reductions
treated as deductions) giving rise to such recapture.
4.3.9. Withholding.
All amounts required to be withheld pursuant to Code Section
1446 or any other provision of federal, state, or local tax
law shall be treated as amounts actually distributed to the
affected Members for all purposes under these Regulations.
4.4. Liquidation and Dissolution.
4.4.1. If the Company is liquidated, the assets of the Company shall
be distributed to the Members in accordance with the balances
in their respective Capital Accounts, after taking into
account the allocations of Profit or Loss pursuant to Sections
4.1 or 4.2, if any, and distributions, if any, of cash or
property, if any, pursuant to Sections 4.1. and 4.2.3.
4.4.2. No Member shall be obligated to restore a Negative Capital
Account.
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4.5. General.
4.5.1. Except as otherwise provided in these Regulations, and except
for Member Tax Distributions which shall be made each year
that the Company does not have a Loss, the timing and amount
of all distributions shall be determined by the Members.
4.5.2. If any assets of the Company are distributed in kind to the
Members, 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. Unless the Members
otherwise agree, the fair market value of the assets shall be
determined by an independent appraiser who shall be selected
by the Manager. The Profit or Loss for each unsold asset shall
be determined as if the asset had been sold at its fair market
value, and the Profit or Loss shall be allocated as provided
in Section 4.2 and shall be properly credited or charged to
the Capital Accounts of the Members prior to the distribution
of the assets in liquidation pursuant to Section 4.4.
4.5.3. All Profit and Loss shall be allocated and all distributions
shall be made 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 the allocation or distribution is to be made.
Notwithstanding the foregoing, unless the Company's taxable
year is separated into segments, if there is a Transfer or an
Involuntary Withdrawal during the taxable year, the Profit and
Loss shall be allocated between the original Member and the
successor on the basis of the number of days each was a Member
during the taxable year; provided, however, the Company's
taxable year shall be segregated into two or more segments in
order to account for Profit, Loss or proceeds attributable to
a Capital Transaction or to any other extraordinary
non-recurring items of the Company.
4.5.4. The Manager is hereby authorized, upon the advice of the
Company's tax counsel, to amend this Section IV to comply with
the Code and the IRS Regulations promulgated under Code
Section 704(b); provided, however, that no amendment shall
materially affect distributions to a Member without the
Member's prior written consent.
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SECTION V - MANAGEMENT: RIGHTS, POWERS, AND DUTIES
5.1. Management.
5.1.1. Manager.
The Company shall be managed by a Manager, who may, but need
not, be a Member. Wallace K. Tsuha, Jr. is hereby designated
to serve as the initial Manager. The Manager shall be entitled
to fair compensation for his services. The compensation level
shall be approved by the Members. The Company may have one or
more officers who shall be appointed by the manager, and who
shall have the title, authority and duties as authorized or
directed by the Manager. An officer shall hold office for the
term for which appointed and until a successor is appointed
and qualified, or until resignation or removal. An officer
appointed by the Manager may be removed by the Manager at any
time and for any reason. An officer may resign by written
notice to the Manager, which resignation is effective upon its
receipt by the Manager or at a subsequent time specified in
the notice of resignation. Vacancies in any office may be
filled by the Manager.
5.1.2. General Powers.
The Manager shall have the discretion, power, and authority,
subject in all cases to the other provisions of these
Regulations and the requirements of applicable law, to manage,
control, administer, and operate the business and affairs of
the Company for the purposes herein stated, and to make all
decisions affecting such business and affairs, including,
without limitation, for Company purposes, the power to:
5.1.2.1. acquire by purchase, lease, or otherwise, any
personal property, tangible or intangible;
5.1.2.2. construct, operate, maintain, and improve, and to
sell, convey, assign, or lease any personal
property;
5.1.2.3. sell, dispose, trade, or exchange Company assets in
the ordinary course of the Company's business;
5.1.2.4. enter into agreements and contracts and to give
receipts, releases, and discharges;
5.1.2.5. purchase liability and other insurance to protect
the Company's properties and business;
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5.1.2.6. borrow money for and on behalf of the Company, and,
in connection therewith, execute and deliver
instruments authorizing the confession of judgment
against the Company;
5.1.2.7. execute or modify leases with respect to any part or
all of the assets of the Company;
5.1.2.8. prepay, in whole or in part, refinance, amend,
modify, or extend any mortgages or deeds of trust
that may affect any asset of the Company and in
connection therewith to execute for and on behalf of
the Company any extensions, renewals, or
modifications of such mortgages or deeds of trust;
5.1.2.9. execute any and all other instruments and documents
that may be necessary or in the opinion of the
Manager desirable to carry out the intent and
purpose of these Regulations, including but not
limited to, documents whose operation and effect
extend beyond the term of the Company;
5.1.2.10. make any and all expenditures that the Manager deems
necessary or appropriate in connection with the
management of the affairs of the Company and the
carrying out of its obligations and responsibilities
under these Regulations, including but not limited
to all legal, accounting, and other related expenses
incurred in connection with the financing and
operation of the Company;
5.1.2.11. enter into any kind of activity necessary to, in
connection with, or incidental to, the
accomplishment of the purposes of the Company; and
5.1.2.12. invest and reinvest Company reserves in short-term
instruments or money market funds.
5.1.3. Extraordinary Transactions.
Notwithstanding anything to the contrary in these Regulations,
the Manager shall not undertake any of the following without
the approval of the Members:
5.1.3.1. the sale, lease or exchange or other disposition of
more than Five Hundred Thousand Dollars
($500,000.00) of the assets of the Company pursuant
to any transaction or series of related
transactions;
17
5.1.3.2. the Company's spending more than Five Hundred
Thousand Dollars ($500,000.00) in any one
transaction or series of related transactions;
5.1.3.3. the Company borrowing more than Five Hundred
Thousand Dollars ($500,000.00), or borrowing from
any Member in accordance with Section 3.6.
5.1.3.4. the admission of additional Members to the Company
pursuant to Sections 6.1.4.6, 6.1.4.7, 6.1.4.8 or
6.1.5.;
5.1.3.5. the amendment of the Articles of Organization or
these Regulations;
5.1.3.6. the approval of any merger, consolidation, share or
Interest exchange, or other similar transaction.
5.1.3.7. the voluntary dissolution of the Company and
approval of a plan of dissolution pursuant to
Section 7.2;
5.1.3.8. the authorization of any transaction, agreement, or
action on behalf of the Company that is unrelated to
its purpose as set forth in these Regulations or
Articles of Organization or that otherwise
contravenes these Regulations; or
5.1.3.9. the authorization of any act that would make it
impossible to carry on the ordinary business of the
Company.
5.1.3.10. the Company's electing to exercise any Purchase
Option pursuant to Section 6.1.4.
5.1.3.11. the Company making distributions from Capital
Accounts pursuant to Section 4.1 2 or distributions
pursuant to Section 4.5.1;
5.1.3.12. the approval of the Business Plan and the annual
audit report referred to in Section 8.4.
5.1.3.13. the compromise of any disputes with the Internal
Revenue Service pursuant to Section 8.5.
5.1.3.14. The removal and replacement of the Manager, at any
time and for any reason, and the election of a new
manager.
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5.1.3.15 Compensation of the Manager pursuant to Section
5.1.1;
5.1.3.16 Payment of fees, costs and expenses of Tax Matters
Partner pursuant to Section 8.5;
5.1.4. Limitation on Authority of Members.
5.1.4.1. No Member is an agent of the Company solely by
virtue of being a Member, and no Member has
authority to act for the Company solely by virtue of
being a Member.
5.1.4.2. This Section 5.1 supersedes any authority granted to
the Members pursuant to the Act. Any Member who
takes any action or binds the Company in violation
of this Section 5.1 shall be solely responsible for
any loss and expense incurred by the Company as a
result of the unauthorized action and shall
indemnify and hold the Company harmless with respect
to the loss or expense.
5.2. Meetings of and Voting by Members.
5.2.1. A meeting of the Members may be called at any time by the
Manager or by those Members holding at least thirty percent
(30%) of the Percentages then held by Members. Meetings of
Members shall be held at the Company's registered office or at
any place in Southeastern Michigan designated by the Person
calling the meeting. Not less than three (3) nor more than
thirty (30) days before each meeting, the Person calling the
meeting shall give written notice of the meeting to each
Member entitled to vote at the meeting. The notice shall state
the time, place, and purpose of the meeting. Notwithstanding
the foregoing provisions, each Member who is entitled to
notice waives notice if before or after the meeting the Member
signs a waiver of the notice that is filed with the records of
Members' meetings, or is present at the meeting in person or
by proxy. Unless these Regulations provides otherwise, at a
meeting of Members, the presence in person or by proxy of
Members holding not less than seventy-five percent (75%) of
the Percentages then held by Members constitutes a quorum. A
Member may vote either in person or by written proxy signed by
the Member or by its duly authorized attorney in fact.
5.2.2. Wherever these Regulations requires the determination or
approval of the Members as set forth in Section 5.1.3, the
affirmative vote of Members holding seventy-five percent (75%)
or more of the Percentages then held by Members shall be
required to approve the matter.
19
5.2.3. In lieu of holding a meeting, the Members may vote by written
consent describing the action and signed by each Member
entitled to vote on that action. A vote by written consent
shall be effective when all Members entitled to vote have
signed the consent, unless the consent specifies a different
date. A written consent may be executed in counterparts, and
shall be filed with the Company's records.
5.2.4. In the event that the Company experiences losses in any
quarter after June 30, 1999, the Members shall receive a
detailed report from the Manager or his designee describing
the extent and cause of the losses and a proposed action plan.
5.2.5. A meeting of the Members shall occur during the months of
March and November, or on other such dates as mutually agreed
by the Members. During these meetings, the senior management
team of the Company shall make a presentation to the Members
summarizing the past and expected future performance of the
Company. Such presentations shall not address any business
opportunities of the Company to which UTA could be considered
a competitor of the Company. The March meeting shall also
include a presentation by senior management of the annual
report. The November meeting shall also include a presentation
by senior management of the Business Plan for the forthcoming
year.
5.3. Personal Services.
5.3.1. No Member shall be required to perform services for the
Company solely by virtue of being a Member. Unless such
services are the subject of a written agreement between the
Member and the Company, no Member shall perform services for
the Company or be entitled to compensation for services
performed for the Company.
5.4. Duties of Parties.
5.4.1. Except as otherwise expressly provided in Section 5.4.2 or
Section 7.1.4 or the Act, nothing in these Regulations shall
be deemed to restrict in any way the rights of any Member, or
of any Affiliate of any Member, to conduct any other business
or activity whatsoever, and the Member shall not be
accountable to the Company or to any Member with respect to
that business or activity, even if the business or activity
competes with the Company's business. The organization of the
Company shall be without prejudice to their respective rights
(or the rights of their respective
20
Affiliates) to maintain, expand, or diversify such other
interests and activities and to receive and enjoy profits or
compensation therefrom. Each Member waives any rights the
Member might otherwise have to share or participate in such
other interests or activities of any other Member or the
Member's Affiliates.
5.4.2. Each Member understands and acknowledges that the conduct of
the Company's business may involve business dealings and
undertakings with Members and their Affiliates. In any of
those cases, those dealings and undertakings shall be at arm's
length, on commercially reasonable terms, and similar services
shall result in comparable compensation.
5.5. Liability and Indemnification.
5.5.1. The Manager shall not be liable, responsible, or accountable,
in damages or otherwise, to any Member or to the Company for
any omission or any act performed by the Manager within the
scope of the authority conferred on the Manager by these
Regulations, except for fraud, gross negligence, an
intentional breach of these Regulations, or as otherwise
required by the Act.
5.5.2. The Company shall indemnify the Manager to the fullest extent
permitted by the Act for any liability arising from any actual
or alleged omission or any actual or alleged act performed by
the Manager within the scope of the authority conferred on the
Manager by these Regulations except for fraud, gross
negligence or an intentional breach of these Regulations.
5.6. Power of Attorney.
5.6.1. Grant of Power.
Each Member constitutes and appoints the Manager as the
Member's true and lawful attorney-in-fact
("Attorney-in-Fact"), and in the Member's name, place, and
stead, to make, execute, sign, acknowledge, and file:
5.6.1.1. all documents (including amendments to articles of
organization) that the Attorney-in-Fact deems
necessary or appropriate to reflect any amendment,
change, or modification of these Regulations;
5.6.1.2. any and all other certificates or other instruments
required to be filed by the Company with the
Secretary of State under the laws of the State of
Texas or of any other state or jurisdiction
necessary in order for the Company to continue to
qualify as a limited liability company under the
laws of the States of Texas and Michigan or
21
any other state where qualification is required;
5.6.1.3. one or more assumed name certificates; and
5.6.1.4. all documents that may be required to dissolve and
terminate the Company and to cancel its Articles of
Organization if the Company is dissolved in
accordance with Section 7.1.
5.6.2. Irrevocability.
The foregoing power of attorney is irrevocable and is coupled
with an interest, and shall not be affected by disability of
the principal. It also shall survive the Transfer of an
Interest, except that if the transferee is approved for
admission as a Member, this power of attorney on behalf of the
assigning Member shall survive the delivery of an assignment
that terminates the membership interest of the assigning
Member for the sole purpose of enabling the Attorney-in-Fact
to execute, acknowledge, and file any documents needed to
effectuate the substitution. Each Member shall be bound by any
representations made by the Attorney-in-Fact acting in good
faith pursuant to this power of attorney, and each Member
hereby waives any and all defenses that may be available to
contest, negate, or disaffirm the action of the
Attorney-in-Fact taken in good faith under this power of
attorney.
SECTION VI -- TRANSFER OF INTERESTS AND WITHDRAWALS OF MEMBERS
6.1. Transfers.
6.1.1. No Person may Transfer all or any portion of or any Interest
or rights in the Person's Interest or other Membership Rights
unless the following conditions ("Conditions of Transfer") are
satisfied:
6.1.1.1. the Transfer will not require registration of any
Interest or Membership Rights under any federal or
state securities laws;
6.1.1.2. the transferee delivers to the Company a written
instrument agreeing to be bound by the terms of
Section VI of these Regulations;
6.1.1.3. the Transfer will not result in the termination of
the Company pursuant to Code Section 708;
6.1.1.4. the Transfer will not result in the Company being
subject to the
22
Investment Company Act of 1940, as amended;
6.1.1.5 the Transfer, when aggregated with all previous
transfers, will not result in the transfer of 80% or
more of all Members' Membership Rights or interest
within any given calendar year.
6.1.1.6. the transferor and/or the transferee delivers the
following information to the Company: (i) the
transferee's taxpayer identification number; (ii)
the transferee's initial tax basis in the
Transferred Interest; and (iii) such instruments of
transfer, assignment, and assumption as may be
required by the Company in form and substance
satisfactory to the Company; and
6.1.1.7. the transferor complies with the provisions set
forth in Section 6.1.4.
6.1.2. If the Conditions of Transfer are satisfied, then a Person may
Transfer all or any portion of that Person's Interest. The
Transfer of an Interest pursuant to this Section 6.1 shall
only result, however, in the Transfer of the transferor's
right to receive economic distributions, if any, subject to
all of the restrictions and limitations that would be
applicable to that Interest if it were still held by a Member;
and unless admitted as a Member in accordance with Section
6.1.5 the transferee of the Interest shall have no right to:
(i) become a Member; (ii) exercise any other Membership
Rights, including but not limited to the right to participate
in any way in the management and affairs of the Company; or
(iii) act as an agent of the Company.
6.1.3. Each Member and each other holder of an Interest hereby
acknowledges the reasonableness of the prohibition contained
in this Section 6.1 in view of the purposes of the Company and
the relationship of the Members. The attempted Transfer of any
Interest or other Membership Rights in violation of the
prohibition contained in this Section 6.1 shall be invalid,
null and void, and of no force or effect. Any Person to whom
any Membership Rights or Interest is attempted to be
transferred in violation of this Section shall not be
entitled to vote on matters coming before the Members,
participate in the management of the Company, act as an agent
of the Company, receive distributions from the Company, or
have any other rights in or with respect to the Membership
Rights or Interest.
6.1.4. Transfer Procedure.
6.1.4.1. If a Member or the holder of an Interest (a
"Transferor") desires
23
to Transfer all or any portion of, or any interest
or rights in, the Transferor's Interest (the
"Transferor Interest"), the Transferor shall notify
the Company of that desire (the "Transfer Notice").
The Transfer Notice shall describe the Transferor
Interest including the information required pursuant
to Sections 6.1.1.2 and 6.1.1.6. The Company shall
have the option (the "Purchase Option") to purchase
all of the Transferor Interest for a price (the
"Purchase Price") equal to the Transferor's
Percentage of the Appraised Value (as defined in
Section 6.4.1) if the Transfer Notice is dated on or
after February 25, 2000. If the Transfer Notice is
dated prior to February 25, 2000, the price shall be
equal to the amount of the Transferor's Capital
Account.
6.1.4.2. The Purchase Option shall be and remain irrevocable
for a period (the "Transfer Period") ending at 11:59
P.M. local time at the Company's principal office on
the thirtieth (30th) day following the date of the
determination of the Appraised Value.
6.1.4.3. At any time during the Transfer Period, the Company
may elect to exercise the Purchase Option by giving
written notice of its election to the Transferor.
The Transferor shall not be deemed a Member for the
purpose of voting on whether the Company shall elect
to exercise the Purchase Option.
6.1.4.4. If the Company elects to exercise the Purchase
Option, the Company's notice of its election shall
fix a closing date (the "Transfer Closing Date") for
the purchase, which shall not be earlier than five
(5) days after the date of the notice of election or
more than thirty (30) days after the expiration of
the Transfer Period.
6.1.4.5. If the Company elects to exercise the Purchase
Option, the Purchase Price shall be paid in cash on
the Transfer Closing Date.
6.1.4.6. If the Company fails to exercise the Purchase
Option, all Members shall use their best efforts to
identify a purchaser of the Transferor Interest
which is acceptable to the nontransferring Members.
One of the criteria to be considered when
identifying qualified purchasers is that the
products produced by the Company continue to qualify
for minority-sourced credit. The target price of
such sale shall be the Transferor's Percentage of
the Appraised Value, but the actual price may be
equal to, greater than, or less than the Purchase
Price. Any Member who identifies a purchaser
24
may request that a meeting of Members be called (and
if so requested the Company shall hold a meeting of
Members) to vote both on whether to approve the
purchase by proposed purchaser and admission of the
proposed purchaser as a Member upon completion of
the proposed purchase. The notice of such meeting
shall identify the proposed purchaser and purchase
price ("Transferee Purchase Price"). Prior to such
meeting the Transferor shall provide to Members the
information described in Section 6.1.1.6. The
Company shall provide written notice of how each
Member voted on each issue and the results of the
vote to Transferor within five days after the
Members meeting.
6.1.4.7. If the Members approve both the sale and the
admission of the proposed purchaser as a Member
under Section 6.1.4.6., Transferor shall be free to
sell the Transferor Interest to the proposed
purchaser at the Transferee Purchase Price within
ninety (90) days after Transferor's receipt of the
notice of the results of the vote at the Members'
meeting and, upon completion of the sale, the
purchaser shall become a Member.
6.1.4.8. If the Members do not approve both the purchase and
the admission of the proposed purchaser as a Member
under Section 6.1.4.6., those Members who do not
vote for approval on either issue shall be obligated
to prepare a list of approved purchasers to purchase
the Transferor Interest. The Members shall use their
best efforts to conclude a sale of the Transferor
Interest to one of the approved purchasers using the
procedures set forth in Sections 6.1.4.6 and 6.1.4.7
above. If a sale by SATURN of the Transferor
Interest to an approved purchaser is not concluded
within one hundred eighty (180) days after the list
of approved purchasers is prepared, UTA shall
purchase SATURN's Interest. The Purchase Price shall
be equal to SATURN's Percentage of the Appraised
Value if the Transfer Notice is dated on or after
February 25, 2000. If the Transfer Notice is dated
prior to February 25, 2000 the price shall be equal
to the amount of SATURN's Capital Account.
Any attempted Transfer of the Transferor Interest made without
strict compliance with the terms, provisions, and conditions
of this Section VI (including but not limited to the
Conditions of Transfer) and other terms, provisions, and
conditions of these Regulations shall be invalid, null and
void, and of no force or effect.
25
6.1.5. Admission of Transferee as Member.
Except for transfers pursuant to Section 6.1.4.7 and 6.1.4.8,
notwithstanding anything contained herein to the contrary, the
transferee of all or any portion of or any rights or interest
in any Interest or other Membership Rights shall not be
entitled to become a Member, or exercise any rights of a
Member, unless and until it is admitted as a member; and the
transferee shall not be admitted as a Member unless approved
by the Members. In the event that a transferee is not approved
by the Members after exhaustion of the steps set forth in
Section 6.1.4., those Members not voting for approval shall be
obligated to purchase the Interest offered for sale at the
Appraised Value on a pro rata basis.
6.2. Voluntary Withdrawal.
No Member shall have the right to voluntarily withdraw from the
Company. A Voluntary Withdrawal is a violation of these Regulations,
and a Member will not be entitled to receive any distribution pursuant
to Section 5.06 of the Act upon a Voluntary Withdrawal.
6.3. Involuntary Withdrawal.
Immediately upon the occurrence of an Involuntary Withdrawal, the
successor of the Withdrawn Member (if any) shall become an assignee of
the Member that holds all of its Interest subject to all of the
restrictions and limitations that would be applicable to that Interest
if it were still held by the Withdrawn Member, but such successor shall
not become a Member.
6.4. Appraised Value.
6.4.1. The term "Appraised Value" means the appraised value of the
Company on a "going concern" basis as hereinafter provided.
Within fifteen (15) days after demand by either one to the
other, the Company and the Transferor shall each appoint an
appraiser from a list of mutually agreed upon appraisers to
determine the value of the Company. If the two appraisers
agree upon the value of the Company (or if the two values
differ by less than 5%, the difference shall be split), they
shall jointly render a single written report stating that
value. If the two values determined by the appraisers differs
by 5% or more then the two appraisers shall appoint a third
appraiser, who shall appraise the Company and determine the
value of the Company, and shall render a written report of its
opinion thereon. Each party shall pay the fees and other costs
of the appraiser appointed by that party, and the fees and
other costs of the third appraiser shall be shared equally by
both parties.
6.4.2. The value contained in the aforesaid joint written report or
written report
26
of the third appraiser, as the case may be, shall be the
Appraised Value; provided, however, that if the value contained
in the appraisal report of the third appraiser is more than the
higher of the first two appraisals, the higher of the first two
appraisals shall govern; and provided, further, that if the value
contained in the appraisal report of the third appraiser is less
than the lower of the first two appraisals, the lower of the
first two appraisals shall govern.
6.5 Management Incentives.
Section 6.1.4 shall not apply to the Transfer of an Interest to a
Person as a result of a management incentive program. The maximum
Percentage that may be transferred pursuant to any such management
incentive program shall not exceed four percent (4%) in total.
SECTION VII -- DISSOLUTION, LIQUIDATION,
AND TERMINATION OF THE COMPANY
7.1. Events of Dissolution.
The Company shall be dissolved and its affairs wound up upon the
happening of any of the following events:
7.1.1. When the period fixed for its duration in the Articles has
expired; or
7.1.2. upon the written agreement of the Members; or
7.1.3. upon the written request of any Member holding more than
thirty percent (30%) of the Percentages if the products
manufactured and / or sold by the Company do not qualify for
minority sourced credit by the original equipment
manufacturers ultimately purchasing the products. Before
such written request is made, the Members shall use their
best efforts to requalify such products for minority sourced
credit within one hundred eighty (180) days. In the event
the disqualification is the result of the existing ownership
structure of the Company on the date of signing these
Regulations, the Members shall proceed to change the
ownership structure of the Company pursuant to the
provisions of Section 6.1.4. For purposes of the operation
of Section 6.1.4, the date of the Saturn Transfer Notice
shall be the date the Company receives notice that its
products no longer qualify as minority sourced products.
7.1.4 upon the written request of any Member holding more than thirty
percent (30%) of the Percentages in the event any other
Member (the "Competing Member") makes an investment, either
directly or indirectly, of greater
27
than thirty percent (30%) in any business that supplies
Battery Cables, Ground Straps or Trailer Tow Harnesss to
Automotive Customers in the Territory.
In an attempt to avoid dissolution of the Company pursuant to
this Section 7.1.4, the Competing Member shall give written
notice to the other Members of its intention to make such an
investment on the date of signing of a memorandum of
understanding regarding such investment. The other Members
shall have the right to call a meeting of the Members to
discuss the subject of the competing investment. Following
such meeting, any non-Competing Member holding more than
thirty percent (30%) of the Percentages shall have the right
to proceed with dissolution of the Company or compel the sale
of the Competing Member's Interest pursuant to the procedures
set forth in Section 6.1.4. For purposes of the operation of
Section 6.1.4, the date of the Transfer Notice referenced in
Section 6.1.4 shall be the date that the Competing Member
signs a memorandum of understanding.
7.2. Procedure for Winding Up and Distribution.
If the Company is dissolved, the Manager shall prepare a plan of
dissolution for approval by the Members, and once the plan is approved,
shall wind up its affairs. On winding up of the Company, the assets of
the Company shall be distributed first, to creditors, including Members
who are creditors, in satisfaction of the liabilities of the Company,
and then to the Members in accordance with Section 4.4 of these
Regulations.
SECTION VIII - BOOKS, RECORDS, ACCOUNTING, AND TAX ELECTIONS
8.1. Bank Accounts.
All funds of the Company shall be deposited in a bank account or
accounts maintained in the Company's name. The Manager shall determine
the institution or institutions at which the accounts will be opened
and maintained, the types of accounts, and the Persons who will have
authority with respect to the accounts and the funds therein.
8.2. Books and Records.
8.2.1. The Manager shall keep or cause to be kept complete and
accurate books and records of the Company and supporting
documentation of transactions with respect to the conduct of
the Company's business. The records shall be kept at the
Company's principal office or any other place designated by
the Members and shall include, but not be limited to, (a) a
current list of the full name and last known address of each
Member and
28
manager, (b) a copy of the Articles or restated Articles of
Organization, together with any amendments to the Articles,
(c) copies of the Company's federal, state and local tax
returns, and reports, if any, for the three most recent years,
(d) copies of the financial statements of the Company for the
three most recent years, (e) copies of these Regulations and
any other regulations and operating agreements, (f) copies of
records that would enable a Member to determine the Members'
relative shares of Company's distributions and their relative
voting rights, and (g) complete and accurate information
regarding the state of the business and financial condition of
the Company.
8.2.2. The books and records shall be maintained in accordance with
sound accounting practices and shall be available at the
Company's principal office, or any other place designated by
the Members, for examination by any Member or the Member's
duly authorized representative at any and all reasonable
times during normal business hours.
8.2.3. Each Member shall reimburse the Company for all costs and
expenses incurred by the Company in connection with the
Member's inspection and copying of the Company's books and
records.
8.3. Annual Accounting Period.
The annual accounting period of the Company shall be its taxable year.
The Company's taxable year shall be the calendar year, subject to the
requirements and limitations of the Code.
8.4. Reports.
Within sixty (60) days after the end of each taxable year of the
Company, the Manager shall cause to be sent to each Person who was a
Member at any time during the accounting year then ended: (i) an
annual audit report, prepared by the Company's independent accountants
as appointed by the Members in accordance with standards issued by the
American Institute of Certified Public Accountants; and (ii) a report
summarizing the fees and other remuneration paid by the Company to any
Member, the Manager, or any Affiliate in respect of the taxable year.
In addition, within sixty (60) days after the end of each taxable year
of the Company, the Manager shall cause to be sent to each Person who
was an unadmitted assignee of a Member, or who otherwise held any
Interest at any time during the taxable year then ended, the tax
information concerning the Company that is necessary for preparing the
Person's income tax returns for that year. At the request of any
Member, and at the Member's expense, the Manager shall cause an audit
of the Company's books and records to be prepared by independent
accountants for the period requested by the Member.
In addition to the annual reports referenced herein, each Member shall
receive:
29
i) within three (3) days of the close of each business month of the
Company a report outlining the financial results of the Company for
the month just concluded, and (ii) at least seventy-five (75) days
before the end of the then current fiscal year, the Business Plan for
the following fiscal year.
8.5. Tax Matters Partner.
The Member holding the majority Interest in the Company shall be
designated the Company's tax matters partner ("Tax Matters Partner").
The Tax Matters Partner shall have all powers and responsibilities
provided in Code Section 6221, et seq. The Tax Matters Partner shall
keep all Members informed of all notices from government taxing
authorities that may come to the attention of the Tax Matters Partner.
The Company shall pay and be responsible for all reasonable costs, fees
and expenses incurred by the Tax Matters Partner and approved by the
Members in performing those duties. A Member shall be responsible for
any costs incurred by the Member with respect to any tax audit or
tax-related administrative or judicial proceeding against any Member,
even though it relates to the Company. The Tax Matters Partner may not
compromise any dispute with the Internal Revenue Service without the
approval of the Members.
8.6. Tax Elections.
The Tax Matters Partner shall have the authority to make all Company
elections permitted under the Code, including but not limited to
elections of methods of depreciation and elections under Code Section
754. The decision to make or not make an election shall be made after
consultation with the Members.
8.7. Indemnification of Tax Matters Partner.
The Company shall defend, indemnify and hold harmless and reimburse the
Tax Matters Partner for all expenses (including, but not limited to,
legal and accounting fees), claims, liabilities, losses and damages
incurred in connection with the performance of its duties as Tax
Matters Partner.
8.8. Title to Company Property.
8.8.1. All real and personal property acquired by the Company shall
be acquired and held by the Company in its name. The
Manager, or any individual designated in writing by the
Manager, is authorized to execute documents conveying title
to Company property on behalf of the Company.
30
SECTION IX -- GENERAL PROVISIONS
9.1. Assurances.
Each Member shall execute all such certificates and other documents and
shall do all such filing, recording, publishing and other acts as the
Manager deems appropriate to comply with the requirements of law for
the formation and operation of the Company and to comply with any laws,
rules, and regulations relating to the acquisition, operation or
holding of the property of the Company.
9.2. Notifications.
Any notice, demand, consent, election, offer, approval, request, or
other communication (collectively a "notice") required or permitted
under these Regulations must be in writing and either delivered
personally or by Federal Express or any other similar overnight
delivery service, or sent by certified or registered mail, postage
prepaid, return receipt requested. Any notice to be given hereunder by
the Company shall be given by the Manager or his designee. A notice
must be addressed to a Member at the Member's last known address on the
records of the Company. A notice to the Company must be addressed to
the Manager at the Company's principal office. A notice delivered
personally or by an overnight delivery service will be deemed given
only when acknowledged in writing by the Person or an agent of the
Person to whom it is delivered. A notice that is sent by mail will be
deemed given three (3) business days after it is mailed. Any party may
designate, by notice to all of the others in accordance with this
Section 9.2, substitute addresses or addressees for notices.
Thereafter, notices are to be directed to those substitute addresses or
addressees and the records of the Company, including Exhibit A to these
Regulations, shall be revised accordingly.
9.3. Specific Performance.
The parties recognize that irreparable injury will result from a breach
of any provision of these Regulations and that money damages will be
inadequate to fully remedy the injury. Accordingly, in the event of a
breach or threatened breach of one or more of the provisions of these
Regulations, any party who may be injured (in addition to any other
remedies which may be available to that party) shall be entitled to one
or more preliminary or permanent orders (i) restraining and enjoining
any act which would constitute a breach or (ii) compelling the
performance of any obligation which, if not performed, would constitute
a breach.
9.4. Complete Agreement.
These Regulations and the Articles constitute the complete and
exclusive statement of the agreement among the Members with respect to
the matters set forth herein. They supersede all prior written and oral
statements. Except as expressly provided otherwise herein, these
Regulations may not be amended
31
without the written consent of all of the Members.
9.5. Applicable Law.
All questions concerning the construction, validity, and interpretation
of these Regulations and the performance of the obligations imposed by
these Regulations shall be governed by the internal law, not the law of
conflicts, of the State of Texas.
9.6. Section Titles.
The headings herein are inserted as a matter of convenience only, and
do not define, limit, or describe the scope of these Regulations or the
intent of the provisions hereof.
9.7. Binding Provisions.
These Regulations are binding upon, and inure to the benefit of, the
parties hereto and their respective heirs, executors, administrators,
personal and legal representatives, successors, and permitted assigns.
9.8. Jurisdiction and Venue.
any suit involving any dispute or matter arising under these
Regulations may only be brought in any United States District Court in
the State of Michigan or any Michigan State Court having jurisdiction
over the subject matter of the dispute or matter. All Members hereby
consent to the exercise of personal jurisdiction by any such court with
respect to any such proceeding.
9.9. Construction of Terms.
Unless the context requires otherwise, common nouns and pronouns shall
be deemed to refer to the masculine, feminine, neuter, singular, and
plural, and the words "hereof," "herein," "hereunder," and similar
terms in these Regulations refer to these Regulations as a whole and
not to any particular provisions of these Regulations.
9.10. Separability of Provisions.
Each provision of these Regulations shall be considered separable; and
if, for any reason, any provision or provisions herein 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 these Regulations which are valid.
9.11. Estoppel Certificate.
Each Member shall, within ten (10) days after written request by any
Member or the Manager, deliver to the requesting Person a certificate
stating, to the Member's knowledge, that: (i) these Regulations are in
full force and effect; (ii) these Regulations have not been modified
except by any instrument or instruments identified in the certificate;
and (iii) there is no default hereunder by the requesting Person, or if
there is a default, the nature and extent thereof. If the certificate
is not received within that ten (10) day period, the Manager shall
execute and deliver the certificate without qualification on behalf of
the
32
requested Member, pursuant to the power of attorney granted in Section
5.6; except that if the Manager has actual personal knowledge of any
qualifications, such qualifications shall be included in the
certificate.
9.12. Counterparts.
These Regulations may be executed in two or more counterparts, each of
which shall be deemed an original and all of which, when taken
together, constitute one and the same document. The signature of any
party to any counterpart shall be deemed a signature to, and may be
appended to, any other counterpart.
9.13. Approvals.
The following individuals shall have authority to give any approvals
necessary pursuant to these Regulations:
For SATURN: President of Saturn Electronics & Engineering, Inc.
For UTA: President of UTA's Electrical Systems - Americas
business unit.
or such other individual as designated by the party in writing to the
Company.
IN WITNESS WHEREOF, the parties have caused these Regulations to be
executed, as of the date first set forth above.
MEMBERS:
SATURN ELECTRONICS & ENGINEERING, INC.
/s/ Wallace K. Tsuha, Jr.
----------------------------------------------
Wallace K. Tsuha, Jr.
Chairman, Chief Executive Officer and President
UNITED TECHNOLOGIES AUTOMOTIVE, INC.
/s/ Edwin L. Buker
----------------------------------------------
Edwin L. Buker
President, Electrical Systems - Americas
33
EXHIBIT A
LIST OF MEMBERS, CAPITAL, AND PERCENTAGES
[Download Table]
Name, Address, Initial
and Taxpayer Cash or Capital
I.D. Number Contribution Percentages
Saturn Electronics & Engineering, Inc. $ 4.5 Million 55%
255 Rex Boulevard
Auburn Hills, MI 48326
38-2622745
United Technologies Automotive, Inc. $ 3.9 Million 45%
5200 Auto Club Drive
Dearborn, MI 48126
38-3185535
EXHIBIT A TO SATURN ELECTRONICS TEXAS, L.L.C. MEMBERSHIP REGULATIONS
(as amended 2/28/99)
LIST OF MEMBERS, CAPITAL AND PERCENTAGES
[Enlarge/Download Table]
NAME, ADDRESS AND INITIAL CASH OR TOTAL CLASS PERCENTAGES
TAXPAYER ID NUMBER CAPITAL CONTRIBUTION PERCENTAGES -------------------------
------------------ -------------------- -----------
Saturn Electronics & $ 4.5 Million 53.9% 55% Voting, Interests
Engineering, Inc. 0% Non-Voting Interests
255 Rex Boulevard
Auburn Hills, MI 48326
38-2622745
United Technologies $ 3.9 Million 44.1% 45% Voting Interests
Automotive, Inc. 0% Non-Voting Interests
5200 Auto Club Drive
Dearborn, MI 48126
38-3185535
Roland E. Lartigue $ 163,600 2.0% 0% Voting Interests
Saturn Electronics Texas 100% Non-Voting Interests
255 Rex Boulevard
Auburn Hills, MI 48326
SS # 459-90-3335
SATURN ELECTRONICS & ENGINEERING, INC.
By /s/ W. Tsuha
-------------------------------------------
Wallace K. Tsuha, Jr.
Chairman, CEO and President
UNITED TECHNOLOGIES AUTOMOTIVE, INC.
By /s/ Edwin L. Buker
-------------------------------------------
Edwin L. Buker
President, Electrical Systems - Americas
/s/ Roland E. Lartigue
-------------------------------------------
Roland E. Lartigue
EXHIBIT B
ARTICLES OF ORGANIZATION
OF
SATURN ELECTRONICS TEXAS, L.L.C.
[SEAL]
THE STATE OF TEXAS
SECRETARY OF STATE
CERTIFICATE OF ORGANIZATION
OF
SATURN ELECTRONICS TEXAS, L.L.C.
FILING NUMBER 07031358
THE UNDERSIGNED, AS SECRETARY OF STATE OF THE STATE OF TEXAS, HEREBY
CERTIFIES THAT THE ATTACHED ARTICLES OF ORGANIZATION FOR THE ABOVE NAMED
COMPANY HAVE BEEN RECEIVED IN THIS OFFICE AND HAVE BEEN FOUND TO CONFORM TO LAW.
ACCORDINGLY, THE UNDERSIGNED, AS SECRETARY OF STATE, AND BY VIRTUE OF THE
AUTHORITY VESTED IN THE SECRETARY BY LAW, HEREBY ISSUES THIS CERTIFICATE OF
ORGANIZATION.
ISSUANCE OF THIS CERTIFICATE OF ORGANIZATION DOES NOT AUTHORIZE THE USE OF
A COMPANY NAME IN THIS STATE IN VIOLATION OF THE RIGHTS OF ANOTHER ENTITY UNDER
THE FEDERAL TRADEMARK ACT OF 1946, THE TEXAS TRADEMARK LAW, THE ASSUMED
BUSINESS OR PROFESSIONAL NAME ACT OR THE COMMON LAW.
DATED NOV. 21, 1997
EFFECTIVE NOV. 21, 1997
[SEAL] /s/ Antonio O. Garza, Jr.
-----------------------------------------
Antonio O. Garza, Jr., Secretary of State
ARTICLES OF ORGANIZATION FILED
in the Office of the
OF Secretary of State of Texas
SATURN ELECTRONICS TEXAS, L.L.C. NOV 21 1997
ARTICLE ONE Corporations Section
The name of the limited liability company is Saturn Electronics Texas,
L.L.C.
ARTICLE TWO
The period of its duration is fifty (50) years from date of filing of
these Articles of Organization with the Secretary of State of the State of
Texas.
ARTICLE THREE
The purpose for which the limited liability company is organized is the
transaction of any or all lawful business for which limited liability companies
may be organized under the Texas Limited Liability Company Act.
ARTICLE FOUR
The address of its principal place of business, the address of the
initial registered office, and the name of its initial registered agent is as
follows:
CT Corporation System
811 Dallas Avenue
Houston, Texas 77002
ARTICLE FIVE
The limited liability company shall be managed by a manager, until the
members decide otherwise. The manager of the limited liability company is as
follows:
Wallace K. Tsuha, Jr
255 Rex Boulevard
Auburn Hills, Michigan 48326
ARTICLES OF ORGANIZATION PAGE 1
ARTICLE SIX
The name and address of the organizer is:
Robert M. Barnett, Esq.
Cacheaux, Cavazos, Newton, Martin & Cukjati, L.L.P.
Convent Plaza
333 Convent Street
San Antonio, Texas 78205-1348
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of November, 1997.
ORGANIZER:
/s/ Robert M. Barnett
---------------------------------
ROBERT M. BARNETT
STATE OF TEXAS SECTION
COUNTY OF BEXAR SECTION
Before me, the undersigned authority, a Notary Public in and for the State
of Texas, on this day personally appeared ROBERT M. BARNETT, who being by me
duly sworn declared that he is the person who signed the foregoing document as
Organizer, and that the statements therein contained are true.
SUBSCRIBED AND SWORN to before me this 20th day of November, 1997, to which
witness my hand and seal.
/s/ Michelle Robles
------------------------------------
Notary Public, State of Texas
[SEAL] MICHELLE ROBLES
NOTARY PUBLIC
STATE OF TEXAS
? ? 3-18-99
ARTICLES OF ORGANIZATION Page 2
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-1’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 3/29/00 | | | | | | | None on these Dates |
| | 2/25/00 | | 23 | | 24 |
| | 6/30/99 | | 19 |
| | 11/21/97 | | 36 |
| List all Filings |
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