EFTA01282465.pdf

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OPERATING AGREEMENT
OF
SOUTHERN FINANCIAL, LW
A U.S. Virgin Islands Limited Liability Company
THIS OPERATING AGREEMENT (this "Agreement) is made and entered into as of
February 26, 2013, by Southern Trust Company, Inc. (hereinafter referred to as "Sole Member"),
with a business address is 6100 Red Hook Quarter, B3, St Thomas, U.S. Virgin Islands 00802, and
which hereby forms Southern Financial, LLC, a U.S. Virgin Islands Limited Liability Company (the
"Company") pursuant to the U.S. Virgin Kw], Uniform Limited Liability Company Act (the
"Act") upon the following terms and conditions:
SECTION I
ORGANIZATION & FORMATION
A. Bongo. The Company has been organized as a U.S. Virgin Islands Limited Liability
Company under and pursuant to the U.S. Virgin Islands Limited Liability Company Act (the "Act')
by the filing of Articles of Organization ("Articles" with the Office of the Lieutenant Governor, on
February 25, 2013, as required by the Act.
B. Name. The name of the Company shall be "Southern Financial, LLC". The Company
upon proper notice and filing with the Office of the Lieutenant Governor of the U.S. Virgin Islands
may conduct its business under one or more assumed names.
C. purposes The purpose of the Company is to operate any lawful business or to effectuate
any purpose permitted by the law of the territory of the U.S. Virgin Islands. The Company shall
have all the powers necessary or convenient to affect any purpose for which it is formed, including
all powers granted by the Act
D. Thoim.. The Company shall continue in existence perpetually, beginning on the date
of filing of the Articles, unless terminated by law or dissolved and terminated.
E. Registered Office and Resident Anent and Place of Business. The Registered Office and
Resident Agent of the Company for service of process within the territory shall be: Business Basics
VI, LLC, 9100 Port of Sale Mall, Suite 15, St Thomas, U.S. Virgin Islands 00802. The Company's
principal place of business is 6100 Red Hook Quarter, B3, St Thomas, U.S. Virgin lcM&' 00802 or
such other place or places as the Sole Member may handier determine.
SECTION II
CAPITAL STRUCTURE: MEMBERSHIP UNITS AND
CONTRIBUTIONS/TRANSFER OF MEMBERSHIP UNITS
A. Capital Contribution blithe Sole Member Initial Issuance. The Sole Member's
ownership rights in the Company shall be reflected in "Membership Units", as recorded in the
Company's records. Upon the formation of the Company, the Sole Member shall make a capital
contribution to the capital of the Company in the amormt of cash, or of the property-in-kind, or both,
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s s h e u e t b r e s f t c o o r r . i t b h T e d o h p e a p n C o d o s c i m t o e p n a t t r h n i e y b u s S t h e o a d l l e l f o t M h r. e e r T m eu h b p e e o S r n ' o s i l s e n s a M u m e e e t m o o b t n h e r e t m h S e o a l y S e m c M h a e e k d m e u b a le e d r d o i t f t h i o a C t n a a n p l u i c m ta a l b p e i C t r a o l a n n c t o d ri n b c t l u r a i t b s io s u n t o i s o f n a U s tt n a a i t c t s a h n e s d o y
time and in any amount that it may desire.
B. Trait of Membership Units. The Sole Member may transfer any or all of its
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and powers, and is subject to all of the restrictions and liabilities of the members.
C. No Interest No Return of Capital. Capital contributions to the Company shall not earn
i p n r t o e v re id s e t, d e i x n c e th p i t s a A s g o re th e e m rw en i t s , e th e e x p S r o e l s e s ly M e p m ro b v e id r e s d h a f l o l r n o in t b th e is e n A tit g l r e e d e m to e n w t. i thd E r x aw ce , p o t r a t s o o r t e h c e e r i w ve is e a
return of, a capital contribution or any portion thereof.
SECTION III
CAPITAL ACCOUNT
A. Capital Account A capital account ("Capital Account") shall be maintained for the Sole
Member, and any additional member in accordance with the provision of this Article.
1. increases in Capital Account. The Capital Account of the members shall be
increased by:
(a) The fair market value of the members' initial capital contribution and any
additional capital contributions by the members to the Company. If any property,
other than cash, is contributed to or distributed by the Company, the adjustments to
Capital Accounts required by Treasury Regulation Section 1.704-1(bX2XivXd), (e),
(f) and (g) and Section 1.704-1(bX4XT) shall be made.
(b) The members' share of the increase in the tax basis of Company property, if
any, arising out of the recapture of any tax credit
(c) Allocations to the members of Profit.
(d) Company income or gain (including income and gain exempt from income
taxation) as provided under this Agreement, or otherwise by Regulation Section
1.704-1(bX2Xiv).
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(e) The amount of Company liabilities that are assumed by the members.
2. Decreases in Capital Account The Capital Account of the members shall be
decreased by:
(a) The amount of money distributed to the members by the Company pursuant
to any provision of this Agreement.
(b) The fair market value of property distributed to the mcwbers by the
Company (net of liabilities secured by such distributed property that such members
are considered to assume or take subject to under Code Section 752).
(c) Allocations to the members of Losses.
(d) Allocations to the members of deductions, expenses, Nonrecourse
Deductions and net losses allocated to it pursuant to this Agreement, and the
members' share of Company expenditures which are neither deductible nor properly
chargeable to Capital Accounts under Code Section 705(aX2XB) or are treated as
such expenditures under Treasury Regulation Section 1.704-1(bX2XivX0.
"Nonrecourse Deductions" shall have the meaning set forth in Treasury Regulation
Section 1.704-2.
(e) The amount of any liabilities of the members that are assumed by the
Company.
SECTION IV
ALLOCATIONS AND DISTRIBUTIONS.
A. Allocations. For purposes of maintaining the Sole Member's Capital Account, all of the
Company's net profits, net losses, expenses end other items of income, gain, loss, and credit shall be
allocated to the Sole Member. All items of Company taxable income, gain, loss, deduction, and
credit recognized or allowable for Federal income tax purposes shall be allocated and credited or
charged to the Sole Member.
B. Distributions. Net cash flow shall be distributed in the following priority,
I. First, to the Sole Member in repayment of any advance of funds to the Company
as a lender, to the extent of and in proportion to such advances, including interest thereon, if
any;
2. Additional distributions, if any will be made to the Sole Member, in such
amounts and at such times as determined by the Sole Member.
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C. Distribution =on Liquidation of the Company.
1. At the termination of the Company and after the Company has satisfied or
provided for the satisfaction of all the Company's debts and other obligations, the
Company's assets will be distributed in cash to the Sole Member and any dissociated
members whose interests have not been previously redeemed first, in discharge of their
Iinvective capital interests; and then, in proportion to the Membership Units.
2. If the Company lacks sufficient assets to make the distributions described in the
foregoing paragraph, the Company will make distributions in proportion to the amount of
the respective capital interest of the Sole Member and any dissociated members whose
interests have not been previously redeemed.
SECTION V
MANAGEMENT OF BUSINESS
A. In General. The Company shall be manager-managed. Jeffrey Epstein shall be the
initial manager of the Company. The manager shall manage the business and affairs of the
Company and shall have full and complete authority, power and discretion to do all things
necessary or convenient to manage, control and carry out the business, affairs and properties of
the Company, to make all decisions regarding those matters and to perform any and all other acts
or activities customary or incident to the management of the Company's business.
B. Voting of Membership Units. A Membership Unit is entitled to be voted only if it is
owned by a member and each such Membership Unit shall be entitled to one vote. Neither an
assignee nor a transferee may vote a Membership Unit unless such assignee or transferee is
admitted as a member.
SECTION VI
EXCULPATION OF LIABILITY: INDEMNIFICATION
A. Exculpation of Liability. Unless otherwise provided by law or expressly assumed, the
Sole Member shall not be personally liable for the acts, debts or liabilities of the Company.
B. Indemnification.
1. Except as otherwise provided in this Section, the Company shall indemnify the
manager of the Company and may indemnify any employee or agent of the Company who
was or is a party or is threatened to be made a party to a threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative, or investigative, and
whether formal or informal, other than an action by or in the right of the Company, by
reason of the fact that such person is or was a member, employee or agent of the Company
against expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with the action,
suit or proceeding, if the person acted in good faith, with the care an ordinarily prudent
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person in a like position would exercise under similar circumstances, and in a manna that
such person reasonably believed to be in the best interests of the Company and with respect
to a criminal action or proceeding, if such person had no reasonable cause to believe such
person's conduct was unlawful.
2. To the extent that any manager, member, employee or agent of the Company has
been successful on the merits or otherwise in defense of an action, suit or proceeding or
in defense of any claim, issue or other matter in the action, suit or proceeding, such
person shall be indemnified against actual and reasonable expenses, including attorneys'
fees, incurred by such person in connection with the action, suit or proceeding and any
action, suit or proceeding brought to enforce the mandatory indemnification provided
herein.
3. Any indemnification permitted under this Section, unless ordered by a court,
shall be made by the Company only as authorized in the specific case upon a
determination that the indemnification is proper under the circumstances because the
person to be indemnified has met the applicable standard of conduct and upon an
evaluation of the reasonableness of expenses and amounts paid in settlement. This
determination and evaluation shall be made by a majority vote of the members who are
not parties or threatened to be made parties to the action, suit or proceeding (except in the
event that there are no members other than the Sole Member, in which event the
determination and evaluation shall be made by the Sole Member, regardless of whether or
not Jeffrey Epstein is a party or threatened to be made a party to the action, suit or
proceeding).
SECTION VII
LIQUIDATION
The Company shall be dissolved, and shall terminate and wind up its affairs, upon the
determination of the Sole Member to do so.
SECTION VIII
MISCELLANEOUS PROVISIONS
A. Sectionlleadings. The Section /tailings and numbers contained in this Agreement have
been inserted only as a matter of convenience and for reference, and in no way shall be construed to
define, limit or describe the scope or intent of any provision of this Agreement.
B. Severability. The invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all
respects as if such invalid or unenforceable provisions were omitted.
C. Amendment This Agreement may be amended or revoked at any time, in writing, with
the consent of the Sole Member. No change or modification to this Agreement shall be valid unless
in writing and signed by the Sole Member.
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D. Binding Effect. Subject to the provisions of this Agreement relating to transferability,
this Agreement will be binding upon and shall inure to the benefit of the parties, and their respot-tive
distributees, heirs, suntssors and assigns.
E. Governing Law. Regardless of the place where this Agreement may be executed by the
Sole Member, the rights and obligations of the Sole Member, and any claims and disputes relating
thereto, shall be subject to and governed by, and construed and enforced in accordance with the
laws of the Territory of the U.S. Virgin Islands.
IN WITNESS WHEREOF, the Sole Member makes and executes this Ong
Agreement on the day and year fast written above.
WITNESSETH:
By: SOUTHERN TRUST COMP C. Sole Member
By:
effrey E. Epste
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