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AMENDED AND RESTATED
OPERATING AGREEMENT
OF
LSJE,
A U.S. Virgin Islands Limited Liability Company
THIS AMENDED AND RESTATED OPERATING AGREEMENT (this "Agreement') is
made and entered into as of March 13, 2013 by Jeffrey E. Epstein (hereinafter referred to as "Sole
Member'), with an address at 6100 Red Hook Quarter, B3, St. Thomas, USVI 00802, who formed
LSJE, LLC, a United States Virgin Islands limited liability company (the "Company") pursuant to
the United States Virgin Islands Uniform Limited Liability Company Act (the "Act") and hereby
amends and restates the Company's Operating to provide for the operation of the Company and the
conduct of its affairs upon the following terms and conditions:
SECTION I
ORGANIZATION & FORMATION
A. Formation. The Company was organized as a U.S. Virgin Islands limited liability
company under and pursuant to the United States Virgin Islands Limited Liability Company Act
(the "Act') by the filing of Articles of Organization ("Articles") with the Office of the Lieutenant
Governor of the United States Virgin Islands on October 27, 2011, as required by the Act. A
Certificate of Amendment to the Articles (the "Amendment") was filed with the Office of the
Lieutenant Governor of the United States Virgin Islands on March 13, 2013 in order to change the
name of the Company from "LSJ Employees, LLC" to "LSJE, LLC"
B. Name. The name of the Company shall be "LSJE, LLC". The Company was formerly
named "LSJ EMPLOYEES, LLC", but the Company's name was changed to "LSJE, LW" by the
filing of the Amendment with the Office of the Lieutenant Governor of the United States Virgin
Islands. The Company upon proper notice and filing with the Office of the Lieutenant Governor of
the United States Virgin Islands may conduct its business under one or more assumed names.
C. Purposes. The purpose of the Company is to engage in any lawful activity, operate any
lawful enterprise or to have any other lawful purpose permitted by the law of the territory of the
United States 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. Duration. 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 Agent and Place of 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 Islands 00802 or
such other place or places as the Sole Member may hereafter determine.
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SECTION II
CAPITAL STRUCTURE: MEMBERSHIP UNITS AND
CONTRIBUTIONS/TRANSFER OF MEMBERSHIP UNITS
A. Capital Contribution by the Sole Member: Initial Issuance. The Sole Member's
ownership rights in the Company shall be reflected in "Membership Units," of which there are 100,
as recorded in the Company's records. Upon the formation of the Company, the Sole Member has
made a capital contribution to the capital of the Company in the amount of cash, or of the property-
in-kind, or both, set forth opposite the Sole Member's name on the Schedule of Capital
Contributions attached hereto. The Company thereupon issued to the Sole Member that number and
class of Units so subscribed and contributed for. The Sole Member may make additional capital
contributions at any time and in any amount that it may desire.
B. floater of Membership Units. The Sole Member may transfer any or all of its
Membership Units to any person or persons, at any time and from lime to time. Subject to the
provisions of this Section, the Sole Member may assign its Membership Units in the Company in
whole or in part. The assignment of a Membership Unit does not itself entitle the assignee to
participate in the management and affairs of the Company or to become a member. Such
assignee is only entitled to receive, to the extent assigned, the distributions the assigning Sole
Member would otherwise be entitled to, and such assignee shall only become an assignee of a
Membership Unit and not a substituted member. An assignee of a Membership Unit shall be
admitted as a substitute member and shall be entitled to all the rights and powers of the assignor
only if all the members consent. If admitted, the substitute member, has to the extent assigned,
all of the rights and powers, and is subject to all of the restrictions and liabilities of the members.
Notwithstanding the foregoing, the Sole Member may, by a duly executed agreement, assign all
of its Membership Interest, together with the management and voting rights in the Company,
whereupon the assignee shall, without any further action or consent by any member, manager or
other person, become a substitute member of the Company.
C. No Interest: 'o Return of Canitaj. Capital contributions to the Company shall not
earn interest, except as otherwise expressly provided for in this Agreement Except as otherwise
provided in this Agreement, the Sole Member shall not be entitled to withdraw, or to receive 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 provisions of this Article.
1. Increases in Capital Account. The Capital Account of the members shall be
increased by:
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(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(bX2)(iv)(d), (e),
(1) and (g) and Section 1.704-1(b)(4)(1) 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(b)(2)(iv).
(e) The amount of Company liabilities that are assumed by the Sole Member.
2. pecreases 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 members by the
Company (net of liabilities secured by such distributed property that such members
am 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 them pursuant to this Agreement, and the
members' share of Company expenditures which are neither deductible nor properly
chargeable to Capital Accounts under Code Section 7O5(aX2)(B) or are treated as
such expenditures under Treasury Regulation Section 1.704-1(bX2)(iv)(i).
"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 AM) DISTRIBUTIONS
A. Allocations. For purposes of maintaining the Sole Member's Capital Account, all of the
Company's net profits, net losses, expenses and 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
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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:
1. 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.
C. Distribution upon Liquidation of the cloi play.
I. 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
respective 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 accounts of the Sole Member and any dissociated members whose
interests have not been previously redeemed.
SECTION V
MANAGEMENT OF MINIM
A. In General. The Company shall be manager-managed. The initial Manager of the
Company shall be Jeanne Brennan. 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. Limitation of Manager's Authority. Notwithstanding the authority of the Manager,
the consent of the Sole Member shall be required %r the Manager to:
1. Sell, transfer, assign, convey, or otherwise dispose of any part of the Company's
assets;
2. Cause the Company to incur any debt in excess of $5,000, whether or not in the
ordinary course of business;
3. Cause the Company to incur any debt less than S5,000 other than in the ordinary
course of business;
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4. Cause the Company to encumber any assets in connection with any debt referred to
in clause 2 or 3 above;
5. Issue, sell, transfer, assign, convey or otherwise dispose of any Membership Interest
in the Company;
6. Adopt, amend or repeal the Operating Agreement of the Company;
7. Appoint or fill the vacancy of the Manager;
8. Approve a plan of merger of the Company with any other entity;
9. Amend, alter, repeal, or take any action inconsistent with any resolution of the Sole
Member; and
10. Incur any single expense or combination of related expenses in excess of $5,000.
C. 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; INDEMNIFICAIION
A. Exculnation of Liability. Unless otherwise provided by law or expressly assumed
pursuant to a written instrument signed by such Person, neither the Sole Member nor the Manager
shall be personally liable for the acts, debts or liabilities of the Company.
13. Jndemnifiestion.
1. Except as otherwise provided in this Section, the Company, its receiver or its trustee
shall indemnify, defend and hold harmless the Sole Member and the Manager and their
respective heirs, personal representatives, and successors, and may indemnify, defend and hold
harmless any employee or agent, who was or is a party or is threatened to be made a party to a
threatened, pending or completed action, suit or proceeding, from and against any expense, loss,
damage or liability incurred or connected with, or any claim, suit, demand, loss, judgment,
liability, cost or expense, including, without limitation, reasonable attorney's fees, arising from or
related to, the Company or any act or omission of the Sole Member, the Manager or such
employee or agent on behalf of the Company, and amounts paid in settlement of any of the
above, provided that such amounts were not the result of fraud, gross negligence, or reckless or
intentional misconduct on the part of the Sole Member, the Manager or such employee or agent
against whom a claim is asserted. The Company may advance to the Sole Member, the Manager
or any such employee or agent and their respective heirs, personal representatives, and
successors the costs of defending any claim, suit or action against such Person if such Person
undertakes to repay the funds advanced, with interest, if the Person is not entitled to
indemnification under this Section.
2. To the extent that the Sole Member, the Manager, or any such 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, without
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limitation, 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 the vote of the
majority of the Membership Units of the members who are not parties or threatened to be made
parties to the action, suit or proceeding, unless there is only one member, in which case it shall
be made by the sole member, whether or not such member is a party or threatened to be made a
party to the action. Notwithstanding the foregoing to the contrary, no indemnification shall be
provided to any Manager, employee or agent of the Company for or in connection with the
receipt of a financial benefit to which such person is not entitled, voting for or assenting to a
distribution to the members in violation of this Agreement or the Act, or a knowing violation of
law.
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. Section Headings. 'Ile Section headings 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. Severabiliiv. 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.
D. Dindina 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 respective
distributees, heirs, successors 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
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thereto, shall be subject to and governed by, and construed and enforced in accordance with the
laws of the 'territory of the United States Virgin Islands.
IN WITNESS WHEREOF, the Sole Member makes and executes this Amended and Restated
Operating Agreement on the day and year first written above.
Jeffy E. Epstein
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EXHIBIT A
MEMBER LISTING; CAPITAL CONTRIBUTIONS
Member Cppital Contributed Membership US Percentage Interest
JEFFREY E. EPSTEIN $1000.00 100 100%
0101-ciA. (3, ao( 3
JEFFREY E. EPSTEIN DATE
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