FILED: NEW YORK COUNTY CLERK 08/09/2012 INDEX NO /2012 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 08/09/2012 EXHIBIT 1

Transcription

1 FILED: NEW YORK COUNTY CLERK 08/09/2012 INDEX NO /2012 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 08/09/2012 EXHIBIT 1

2 Interasian Digital Technology Holdings Ltd (Company No. LL05751) (Incorporated in Labuan F.T., Malaysia under the Offshore Companies Act, 1990) Lot U0208,Jalan Bahasa P.O.Box Labuan F.T.Malaysia. Tel: Fax: Date : 31 December 2007 Ref : 002-LL05751-Jenny (amended) Maybank International (L) Ltd Level 16 (B), Main Office Tower, Financial Park Labuan, Jalan Merdeka, Federal Territory oflabuan, Attention: Muslim Bin Mustapa Fax No.:087-4l4806 We authorize you to remit USD5,500, (United State Dollars Five Million Five Hundred Thousand Only) and transfer it as follows:- Chase 11 West Street, New York, NY Swift Code: CHASUS33, ABA: Thank you in advance for your assistance and we look forward to receiving your confirmation course. advice in due

3 PARTIES: INTERASIAN DIGITAL TECHNOLOGY HOLDINGS LTD (Company No. LL05751), with its registered address at Lot U0208, Jalan Bahasa, P.O. Box 80148, Labuan F.T., Malaysia ("IDT Holdings"); JAMES PARK, with an address at 550 Lowell Street, Lexington, Massachusetts ("Park"); and PRAXTON, LLC, with an address at 550 Lowell Street, Lexington, Massachusetts (the "Company"). WHEREAS, the Company is a limited liability company formed pursuant to the Delaware Limited Liability Company Act (the "Delaware Act"); and WHEREAS, the Members desire to establish their respective rights and obligations pursuant to the Delaware Act in connection with the operation of the Company. NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth the parties agree as follows: ARTICLE I Definitions 1.1 Definitions. In this Agreement, the following terms shall have the meanings set forth below: (a) "Bankruptcy" of a Member shall mean (a) the entry of an order for relief with respect to that Member in a proceeding under the United States Bankruptcy Code, as amended from time to time, (b) the Member's initiation, whether by filing a petition, beginning a proceeding or in answer to a proceeding commenced by another Person, of any action for liquidation, dissolution, receivership or other similar relief, (c) the Member's application for, or consent to the appointment of, a trustee, receiver or custodian for his or its assets, (d) the Member's making of a general assignment for the benefit of creditors or (e) the Member's failure generally to pay its debts as such debts come due or admission in writing of its inability to pay its debts as they come due. For purposes of this definition, a Member's consent shall be deemed to have been given if an order appointing a trustee, receiver or custodian is entered by a court of competent jurisdiction and is not dismissed within ninety (90) days after its entry.

4 (b) "Capital Account" of a Member as of any date shall mean the Capital Contribution to the Company by the Member, adjusted to reflect all allocations of income and Distributions pursuant to this Agreement. (c) "Capital Contribution" shall mean the capital contribution by a Member set forth on Exhibit A attached hereto, and any additional contribution by a Member to the capital of the Company in cash or property, as valued on the date of contribution on the Company's books and records. (d) "Certificate of Formation" shall mean the Certificate of Formation of the Company, filed with the Delaware Secretary of State. (h) "Distribution" means any cash or other property paid to a Member by the Company as a result of his or its Membership Interest. (i) "Electronic Transmission" shall mean any form of communication not directly involving the physical transmission of paper that creates a record that may be retained, retrieved and reviewed by a recipient thereof and that may be directly reproduced in paper form by such a recipient through an automated process. (j) "Fiscal Year" shall mean the fiscal year of the Company, which shall be the year ending December 31. (k) "Managers" shall mean the individuals or entities set forth on Exhibit B attached hereto and any other individual or entity that succeeds as Manager pursuant to the terms of this Agreement. If only one individual or entity is set forth on Exhibit B, "Managers" shall be deemed to mean such individual or entity. (1) "Member" shall mean each individual or entity who or which executes this Agreement as a Member and whose name is set forth on Exhibit C attached hereto, or each individual or entity who or which may hereafter become a party to this Agreement pursuant to the terms hereof. (m) "Membership Interests" shall mean with respect to the Company, the value of all Capital Contributions, and with respect to Members, the percentages set forth opposite their respective names on Exhibit D attached hereto.

5 (n) "Net Income or Loss" shall mean the net income or loss of the Company for each Fiscal Year determined in accordance with generally accepted accounting principles under the method of accounting regularly used by the Company. (0) "Person" shall mean any individual, corporation, governmental authority, limited liability company, partnership, trust, unincorporated association or other entity. (P) "Transfer" shall mean any sale, assignment, transfer, gift, exchange, bequest or other disposition of a Membership Interest, in any manner, voluntary or involuntary, by operation of law or otherwise. (q) "Transferor" shall mean any Member which Transfers, or proposes to Transfer, a Membership Interest. (r) "Treasury Regulations" shall mean all proposed, temporary and final regulations promulgated under the Code as from time to time in effect. (s) "Withdrawal Event" with respect to any Member, shall mean his or its (i) death, revocation of its charter or organization, dissolution, expulsion as a Member or adjudication of incompetency, as applicable; (ii) Bankruptcy; (iii) making a general assignment for the benefit of creditors; (iv) failure to pay his or its debts as they become due, or admission of inability to pay his or its debts as they become due; (v) Membership Interest becoming subject to the enforcement of rights of any of his or its creditors, unless such rights are released within ninety (90) days after he or it receives notice of the creditor's action; (vi) voluntary retirement or withdrawal from the Company; (vii) except as otherwise provided herein, breach of any of his or its material obligations under this Agreement, or (viii) any other event that terminates a Member's membership in the Company or otherwise causes the dissolution of the Company under the Delaware Act. ARTICLE II Organization 2.1 Formation. The Members formed a limited liability company by causing the organizer to prepare, execute and file with the Delaware Secretary of State a Certificate of Formation pursuant to the Delaware Act. 2.3 Principal Address. The principal address of the Company shall be 550 Lowell Street, Lexington, Massachusetts The Company may establish any other places of business as the Managers may from time to time deem advisable upon written notice by the Manager to the Members of each other place of business.

6 2.4 Term. The Company shall be of unlimited duration unless earlier dissolved upon the vote or written consent of fifty-one (51%) percent of all Membership Interests. 2.5 Purpose. The Company is formed for general business purposes, including financing business ventures, for the commercial benefit of all the Members. ARTICLE III Members 3.1 Names and Addresses. The names and addresses of the Members are set forth on Exhibit E attached hereto. 3.2 Additional Members. A Person may be admitted as a Member of the Company after the date of this Agreement upon the vote or written consent of fifty-one (51%) percent of all Membership Interests. (a) At the expense of the Company, the Managers shall maintain at the Company's principal place of business, records and accounts of all operations and expenditures of the Company, including, without limitation, the following records: (i) a current list in alphabetical order of the name and mailing address of each Member and Manager, their facsimile numbers and, with respect to the Members, their respective shares of Net Profits and Net Losses, or information from which such shares can be derived; (ii) a copy of the Articles of Organization and all amendments thereto, together with executed copies of any powers of attorney pursuant to which any such amendment was executed; (iii) copies of the Company's federal, state and local income tax returns and reports, if any, for the three most recent Fiscal Years; (v) any writings or other information with respect to each Member's obligation to contribute cash, property or services to the Company, including, without limitation, the amount of cash so contributed and a description and statement of the agreed~upon fair market value of property or services so contributed or to be contributed;

7 (vi) any financial statements of the Company for the three most recent Fiscal Years; (vii) minutes of every annual, regular, special and court-ordered meeting of the Members and Managers; and (viii) any written consents obtained from the Members or Managers for actions taken by Members or Managers without a meeting; (ix) Company. the current, unaudited management accounts of the (b) Upon reasonable advance notice, during normal business hours, any Member or its representatives may, at its expense, inspect and copy the records described in Section 3.3(a) for any purpose reasonably related to such Member's Membership Interest. 3.4 Annual Statements. The Managers shall prepare promptly after the end of each calendar year a financial statement (including a balance sheet and statement of income and loss) which shall be prepared by a firm of certified public accountants selected by the Managers. Each Member shall receive after the end of each calendar year as promptly as practical a copy of the financial statement and the appropriate Schedule K-l (or other appropriate tax form) and shall receive such other periodic and annual fmancial statements as may be prepared by the Company's regular accountants. 3.5 Limitation of Liability. Each Member's liability shall be limited as set forth in this Agreement, the Delaware Act and other applicable law. A Member shall not be personally liable for any indebtedness, liability or obligation of the Company, except as otherwise specifically set forth in this Agreement, the Delaware Act and any other applicable law. 3.6 Sale of Assets. No real property or any part thereof held by the Company may be sold, transferred, conveyed, or mortgaged, except upon the vote or written consent of fifty-one (51%) percent of all Membership Interests. 3.7 Priority and Return of Capital. Except as otherwise provided in Article VII, no Member shall have priority over any other Member, whether for the return of a Capital Contribution or Distributions; provided, however, that this Section 3.7 shall not apply to loans or other indebtedness (as distinguished from a Capital Contribution) made by a Member to the Company. 3.8 Liability of a Member to the Company. A Member who or which rightfully receives the return of any portion of a Capital Contribution is liable to the Company only to the extent now or hereafter provided by the Delaware Act. A Member who or which receives a Distribution made by the Company in violation of this Agreement or made when the Company's

8 liabilities exceed its assets (after giving effect to such Distribution) shall be liable to the Company for the amount of such Distribution. 3.9 Financial Adjustments. No Members admitted after the date of this Agreement shall be entitled to any retroactive allocation of losses, income or expense deductions incurred by the Company. The Managers may, in their sole discretion, at the time a new Member is admitted, close the books and records of the Company (as though the Fiscal Year had ended) or make pro rata allocations of loss, income and expense deductions to such Member for that portion of the Fiscal Year in which such member was admitted, in accordance with applicable provisions of the Code. ARTICLE IV Management 4.1 Management. Management of the Company shall be vested in the Managers. The Managers shall have and be subject to all of the duties and liabilities of managers as set forth in the Delaware Act. A vote of a majority in interest of the Managers shall constitute the act of the Company. 4.2 Number, Tenure and Qualifications of Managers. Each of the individuals whose names are set forth on Exhibit B attached hereto shall serve as a Manager. The number of Managers of the Company may be amended from time to time by the vote or written consent of fifty-one (51%) percent of all Membership Interests. Each Manager shall hold office until the next annual meeting of Members or until a successor shall have been elected and qualified. Managers shall be elected by the vote or written consent of the holders of at least a majority of Membership Interests and need not be residents of the State of Delaware. 4.3 Powers and Obligations of Managers. Subject to the limitations elsewhere herein set forth, the Managers shall have power and authority on behalf of the Company to: (a) open bank accounts and otherwise invest the funds of the Company; (b) purchase insurance on the business and assets of the Company; (c) commence, defend or compromise lawsuits and other proceedings, including, without limitation, any proceeding under any bankruptcy law; (d) enter into any lease agreement, instrument or other writing; (e) retain accountants, attorneys or other agents; (f) make and deliver promissory notes, undertakings, mortgages and other forms of encumbrances of assets, real and personal, of the Company in order to secure obligations of the Company; (g) hire, fire and fix the employment terms of all employees and staff; and (h) take any other lawful action in the normal course of the Company's business that the Managers consider necessary, convenient or advisable in connection with any business of the Company. The Managers must act at all times in the best interests of the Company and its Members. For avoidance of doubt, if the Managers determines to invest any of the assets of the Company in another company, entity, or enterprise from which investment there is a reasonable possibility that they may directly or indirectly benefit from such investment other than by virtue of the fact of any Membership Interest in the Company, notwithstanding this Section 4.3 the Managers shall

9 disclose the nature of such direct or indirect benefit and only shall have the power to make such an investment subject to the prior approval of all Members. 4.4 Binding Authority. Unless authorized to do so by this Agreement or the Managers, no Member or other Person, other than the Managers, shall have any power or authority to bind the Company. 4.5 Liability for Certain Acts. The Managers shall perform their duties in good faith, in a manner they reasonably believe to be in the best interests of the Company and with such care as an ordinarily prudent professional in a similar position would use under similar circumstances. A Manager who so performs such duties shall not have any liability for acts or failure to act, solely by reason of being or having been a Manager. The Managers shall not be liable to the Company or any Member for any loss or damage sustained by the Company or any Member, unless the loss or damage shall have been the result of the gross negligence or willful misconduct of such Manager. Without limiting the generality of the preceding sentence, a Manager does not in any way guaranty the return of any Capital Contribution to a Member or a profit for the Members from the operations of the Company. 4.6 No Exclusive Duty to Company. The Manager shall not be required to manage the Company as his sole and exclusive function and he may have other business interests and may engage in other activities in addition to those relating to the Company. In addition, no Member shall be entitled to participate in, nor shall any Member be obligated to offer to other Members, an opportunity to participate in any other venture or project involving real, personal or intangible property by virtue of membership in the Company. 4.7 Indemnification. Subject to Article XI, the Company shall indemnify and hold harmless the Managers from and against all claims and demands to the maximum extent permitted by the Delaware Act. 4.8 Resignation. A Manager may resign at any time by giving written notice to the Company. The resignation of any Manager shall take effect upon receipt of such notice or at any later time specified in such notice. Unless otherwise specified in such notice, the acceptance of the resignation shall not be necessary to make it effective. The resignation of a Manager who is also a Member shall not affect the Manager's rights as a Member and shall not constitute a withdrawal as a Member. 4.9 Removal. A Manager may be removed with or without cause by the vote or written consent of fifty-one (51%) percent of all Membership Interests. The removal of a Manager who is also a Member shall not affect the Manager's rights as a Member and shall not constitute a withdrawal of such Member. No Manager shall be removed for cause unless such Manager has received a written notice stating the nature of the cause for removal, with specificity, and permitting such Manager a reasonable period of time in which to cure such act(s) or omission( s) complained of in such notice.

10 4.10 Vacancies. Any vacancy occurring for any reason in the number of Managers may be filled by the vote or written consent of at least a majority of the remaining Managers then in office; provided, however, that if there are no remaining Managers, each vacancy shall be filled by the vote or written consent of Members holding a majority of Membership Interests. A Manager elected to fill a vacancy shall be elected for the unexpired term of the Manager's predecessor in office and shall hold office until the expiration of such term and until the Manager's successor has been elected and qualified. A Manager chosen to fill a position resulting from an increase in the number of Managers shall hold office until the next annual meeting of Members and until a successor has been elected and qualified Officers. The Managers may, in their sole discretion, designate one or more individuals as officers of the Company, who shall have such titles and exercise and perform such powers and duties as shall be assigned to them from time to time by the Managers. Any officer may be removed by the Managers at any time, with or without cause. Each officer shall hold office until his or her successor is elected and qualified. Any number of offices may be held by the same individual. The salaries and other compensation of the officers shall be at a reasonable market rate and shall be fixed by the Managers. (a) The Managers shall meet for the purposes of organization and the transaction of other business as soon as practicable after each annual meeting of the Members, on the same day and at the same place where such annual meeting is held. (b) Special meetings of the Managers may be called at any time by any Manager and shall be held at such times and places within or without the State of Delaware as the Managers may from time to time determine. (c) Notice of the time and place of each special meeting of the Managers shall be delivered to each Manager, either personally (including by courier) or by telephone, telegraph or facsimile or electronic transmission, at least twenty-four (24) hours before the time at which such meeting is to be held, or shall be mailed to each Manager by first-class mail, postage prepaid, addressed to it at its mailing address set forth in the records of the Company, at least three days before the day on which such meeting is to be held. Notice of the annual meeting or other regular meetings of the Managers need not be given unless such meeting is held at a time or place other than that set forth in Section 4.12(a) or in the initial notice of such regular meeting, in which case notice thereof shall be given as set forth herein. Notice of a meeting need not be given to any Manager who, either before or after the meeting, executes a waiver of notice, or who attends such meeting without objecting, at its beginning, to the transaction of any business because the meeting is not lawfully called or convened. (d) Except as otherwise provided in this Agreement, a majority in number of Managers entitled to vote on, or take action with respect to, any matter, present in person at any meeting of Managers, shall constitute a quorum for the transaction of business at such meeting. In the absence of a quorum, a majority in number of the Managers present may adjourn any

11 meeting to another time and place, or such meeting, unless it is the annual meeting of the Managers, need not be held. At any adjourned meeting at which a quorum is present, any business that might have been transacted at the meeting as originally called may be transacted. (e) Except as otherwise expressly required by the Delaware Act, if a quorum is present, the affirmative vote of a majority in number of Managers present at any meeting and entitled to vote on, or take action with respect to, any matter shall be the act of the Managers Action without Meeting. Any action required or permitted to be taken at any meeting of Managers may be taken without a meeting, without prior notice and without a vote, if the number of Managers sufficient to authorize such action at a meeting at which all Managers entitled to vote thereon were present and voted consent thereto in a signed writing, and such consents are filed with the minutes of proceedings of the Managers. In addition, a consent transmitted by electronic transmission by a Manager shall be deemed to be written and signed for all purposes hereof Participation in Meetings by Telephone and Other Equipment. Anyone or more Managers may participate in a meeting by conference telephone or similar communications equipment, by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting Banking. All monies received by the Company shall be deposited in the name of the Company in such bank account(s) as may be selected by the Managers. Checks drawn on any Company checking account and withdrawals from any other Company account may be signed by any Manager Funding of Activities. The Managers shall apply the Company's funds in the pursuit of its business activities in such manner as they shall in their discretion determine, provided that such application ofthe Company's funds be in accordance with Sections 2.5 and 4.3. Additionally, the Managers are specifically authorized to make a personal interest-free loan in an amount not to exceed US$2,OOO,OOOto Park, which loan shall be for a fixed term of 3 (three) years and with any additional terms or modification of the above terms of such loan subject to the approval of a majority of the Members. ARTICLE V Meetings of Members 5.1 Annual Meeting. The annual meeting of the Members shall be held on such date as shall be determined by the Managers for the purpose of the transaction of any business as may come before such meeting. 5.2 Special Meetings. Special meetings of the Members for any purpose may be called by any Manager or by a Member(s) holding not less than fifty-one (51%) percent of Membership Interests.

12 5.3 Place of Meetings. Meetings of the Members may be held at any place, within or outside the State of Delaware, designated in any notice of such meeting. If no such designation is made, the place of any such meeting shall be the principal place of business of the Company. 5.4 Notice of Meeting. Written notice stating the place, day and hour of the meeting and indicating that it is being issued by or at the direction of the person or persons calling the meeting, stating the purpose or purposes for which the meeting is called, shall be delivered to each Member no fewer than ten (10) nor more than sixty (60) days before the date of the meeting. 5.5 Record Date. For the purpose of determining the Members entitled to notice of or to vote at any meeting of Members or at any adjournment thereof, or Members entitled to receive payment of any Distribution, or to make a determination of Members for any other purpose, the date on which notice of the meeting is mailed or the date on which the resolution declaring the Distribution is adopted, as the case may be, shall be the record date for making such a determination. When a determination of Members entitled to vote at any meeting of Members has been made pursuant to this Section 5.5, the determination shall apply to any adjournment of the meeting. 5.6 Quorum. Members holding not less than fifty-one (51%) percent of Membership Interests, represented in person or by proxy, shall constitute a quorum at any meeting of Members. In the absence of a quorum at any meeting of Members, a majority of the Membership Interests so represented may adjourn the meeting from time to time for a period not to exceed sixty (60) days without further notice. However, if the adjournment is for more than sixty (60) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each Member of record entitled to vote at such meeting. At an adjourned meeting at which a quorum shall be present or represented, any business may be transacted that might have been transacted at the meeting as originally scheduled. The Members present at a meeting may continue to transact business until adjournment, notwithstanding the withdrawal during the meeting of the holders of Membership Interests whose absence results in less than a quorum being present thereafter. 5.7 Manner of Acting. If a quorum is present at any meeting, the vote or written consent of Members holding not less than fifty-one (51%) percent of Membership Interests shall be the act of the Members, unless the vote of a greater or lesser proportion or number is otherwise required by the Delaware Act or this Agreement. (a) A Member may vote in person or by proxy executed in writing by means of electronic transmission or as otherwise permitted by applicable law by the Member or by the Member's duly authorized attorney-in-fact (who also may vote in similar manner). (b) Every proxy must be signed by the Member or his attorney-in-fact. No proxy shall be made after the expiration of eleven (11) months from the date of its execution

13 unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Member executing it, except as otherwise provided in this Section. (c) A proxy may be revoked, notwithstanding a provision making it irrevocable, by a bona fide purchaser of a Membership Interest without knowledge of the existence of such proxy. (a) Whenever the Members of the Company are required or permitted to take any action by vote, such action may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken shall be signed by the Members who hold not less than the percentage of Membership Interests that would be necessary to authorize or take such action at a meeting at which all of the Members entitled to vote thereat were present and voted, and shall be delivered to the Company. Delivery shall be by hand or by certified or registered mail, return receipt requested. In addition, a consent transmitted by electronic transmission by a member or by a person or persons authorized to act for a member shall be deemed to be written and signed for purposes hereof. (b) Every written consent shall bear the date of signature of each Member who signs the consent, and no written consent shall be effective to take the action referred to therein unless, within sixty (60) days of the earliest dated consent delivered in the manner required by this Section to the Company, written consents signed by a sufficient number of Members to take the action are delivered to the office ofthe Company, its principal place of business or a Manager, employee or agent of the Company having custody of the records of the Company. Delivery made to such office, principal place of business or Manager, employee or agent shall be by hand or by certified or registered mail, return receipt requested or by electronic transmission. (c) Prompt notice of the taking of the action without a meeting by less than unanimous written consent shall be given to each Member who has not consented in writing but who would have been entitled to vote thereon had such action been taken at a meeting Waiver of Notice. Notice ofameeting need not be given to any Member who submits a signed waiver of notice, in person or by proxy, whether before or after the meeting. The attendance of any Member at a meeting, in person or by proxy, without protesting prior to the conclusion of the meeting the lack of notice of such meeting, shall constitute a waiver of notice by him, her or it Participation in Meetings by Telephone and Other Equipment. Anyone or more Members may participate in a meeting by conference telephone or similar communications equipment, by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting Voting Agreements. An agreement between two or more Members, if in writing and signed by the parties thereto, may provide that in exercising any voting rights, the

14 Membership Interest held by them shall be voted as therein provided, or as they may agree, or as determined in accordance with a procedure agreed upon by them No Right to Manage. No Member, except a duly elected Manager, shall have the right to manage the affairs of the Company. ARTICLE VI Capital Contributions 6.1 Capital Contributions. The Members have contributed to the capital of the Company the amounts set forth opposite their respective names on Exhibit A attached hereto. 6.2 Additional Contributions. No Member shall be required to make any additional Capital Contribution except upon unanimous agreement by the Members. 6.3 Capital Accounts. A Capital Account shall be maintained for each Member. Each Member's Capital Account shall be increased by the value of all Capital Contributions made by the Member, allocations to such Member of Net Income and any other allocations to such Member of income or gain pursuant to the Code. Each Member's Capital Account will be decreased by the value of each Distribution made to the Member by the Company, allocations to such Member of Net Loss and other allocations to such Member of deductions or losses pursuant to the Code. 6.4 Transfers. Upon a permitted sale or other transfer of a Membership Interest (or portion thereof) in the Company, the Capital Account of the Member transferring a Membership Interest (or portion thereof) shall become the Capital Account of the Person to which or whom such Membership Interest is transferred in accordance with Section (b)(2)(iv) of the Treasury Regulations. 6.5 Modifications. The manner in which Capital Accounts are to be maintained pursuant to this Section is intended to comply with the requirements of Section 704(b) of the Code and the Treasury Regulations promulgated thereunder. If, in the opinion of the Managers, the manner in which Capital Accounts are to be maintained pursuant to this Agreement should be modified to comply with Section 704(b) of the Code, then the manner in which Capital Accounts are maintained shall be so modified; provided, however, that any change in the manner of maintaining Capital Accounts shall not materially alter the economic agreement between or among the Members. The Company may adjust the Capital Accounts to reflect a revaluation of the Company upon the occurrence of a Capital Contribution by a new or existing Member, distribution of cash or other property by the Company to a retiring or continuing Member as consideration for the repurchase or redemption of a Membership Interest, or the events described in Treasury Regulations Section (b)(2)(iv)(f).

15 6.6 Deficit Capital Account. Except as otherwise required by the Delaware Act, the Code, or this Agreement, no Member shall have any liability to restore all or any portion of a deficit balance in a Capital Account. 6.7 Withdrawal or Reduction of Capital Contributions. Within the first two (2) years of the formation of the Company, no Member may withdraw any amount from such Member's Capital Account without the prior written consent of the Managers. A Member shall not receive from the Company any portion of a Capital Contribution until all indebtedness, obligations and liabilities of the Company (except any indebtedness, liabilities and obligations to Members on account of their Capital Contributions) have been paid or there remains property of the Company, in the sole discretion of the Managers, sufficient to pay such indebtedness, liabilities and obligations. A Member, irrespective of the nature of the Capital Contribution of such Member, has only the right to demand and receive cash in return for such Capital Contribution. 6.8 Interest on and Return of Capital Contributions. No Member shall be entitled to interest on the Member's Capital Contribution or to a return of the Member's Capital Contribution, except as specifically set forth in this Agreement. ARTICLE VII Allocation and Distributions 7.1 Allocation of Profit and Losses. Net Income or Loss for each Fiscal Year shall be allocated to the Members in proportion to their Membership Interests as of the date of such allocation. (a) Distributions shall be made to the Members in proportion to their Membership Interests as of the date of such Distributions. (b) All Distributions shall be made by the Managers at such times and in such amounts as the Managers shall determine in their sole discretion. 7.3 Offset. The Company may offset all amounts owed to it by a Member against any Distributions to be made to such Member.

16 ARTICLE Taxes VIII 8.1 Tax Returns. The Managers shall cause to be prepared and filed all necessary Federal and state income tax returns for the Company. Each Member shall furnish to the Managers all pertinent information in the Member's possession relating to Company operations necessary to enable the Company's income tax returns to be prepared and filed. 8.2 Tax Elections. The Company shall make any election that the Managers may deem appropriate and in the best interests of the Members. Neither the Company nor any Member may make an election for the Company to be excluded from the application of Subchapter K of Chapter 1 of Subtitle A of the Code or any similar provision of applicable state law, and no provision of this Agreement shall be interpreted to authorize any such election. 8.3 Tax Matters Partner. Park is designated to be the initial "Tax Matters Partner" of the Company pursuant to Section 6231(a)(7) of the Code. Any Manager who is designated Tax Matters Partner shall take any action as may be necessary to cause each other Member to become a "Notice Partner" within the meaning of Section 6223 of the Code. ARTICLE Transfers IX 9.1 General Restrictions. Each ofthe Members hereby agrees not to Transfer all or any portion of his, her or its Membership Interest now owned or hereafter acquired, except as herein specifically provided in Section 9.2, and only with the vote or consent of not less than fifty-one (51%) percent in interest of all other Members. Any permitted Transfer of any interest in the Company pursuant to this Article IX shall not be deemed to be effective unless and until such transferee shall agree in writing to be bound by the terms of this Operating Agreement. (a) If Park, or his successor or assignee, desires to Transfer all or any portion of his Membership Interest for consideration to a Person who is not a Member (a "Purchaser"), he shall obtain from the Purchaser a bona fide written offer (the "Offer") to purchase such Membership Interest, stating the Purchaser's name and the terms and conditions upon which the purchase is to be made. He shall notify the Company and the remaining Members of his intention to so Transfer the Membership Interest, including a copy of the Offer. (b) The Company by an affirmative vote of the majority of its non-transferring Members, or, if the Company fails to so elect, the remaining Members or any of them, pro rata based on their relative percentage Membership Interests (or as they may otherwise agree), shall have a right of first refusal to purchase all (but not less than all) of the Membership Interest proposed to be sold by Park, or his successor or assignee, upon the same terms and conditions, and for the consideration, stated in the Offer. The Company or such Members, as the case may

17 be, shall give notice to Park (and the remaining Members, if the Company gives notice, or the Company, if such Members give notice) of its or their intention to exercise such right, in the case of the Company, within ten (10) days after its receipt of Park's notice and the Offer and, in the case of the remaining exercising Members, within ten (10) days following expiration of the ten-day period set forth for the Company if the Company fails to give notice of its election hereunder during such period. If the Company and the remaining Members fail to exercise their rights as set forth herein, subject to Section 9.2(e), Park shall be entitled to sell the Membership Interest to the Purchaser in accordance with the Offer, within sixty (60) days following the expiration of the second ten-day period referred to above. If not so sold, such Membership Interest shall once again be subject to the requirements of this Section 9.2, and Park may not again seek to Transfer all or any portion of his Membership Interest for a period of six months. The transferring Member shall not be entitled to vote on whether the Company should exercise its rights hereunder. (c) If the Company or any remaining Members elect to exercise their right of first refusal as set forth in Section 9.2(b), it or they shall designate the time, date and place at which the closing of the purchase shall take place, provided that the date shall be within ten (10) days after the Transferor receives notice of the election to exercise such right. (d) If all of the remaining Members do not exercise their right of first refusal hereunder, the Members that do so elect, shall elect to purchase the portion of the Membership Interest offered by the Transferor that the non-exercising Member was entitled to purchase hereunder, pro rata based on their relative Membership Interest (or as they may otherwise agree). (e) If the Company and the remaining Members fail to exercise their right of first refusal contained in Section 9.2(b), the remaining Members shall have the right to sell to the Purchaser and the Purchaser shall be required to buy a similar proportion of their Membership Interests as the Transferor sells under the same terms and conditions contained in the Offer. The remaining Members shall give notice of their intent to exercise the rights contained in this Section 9.2(e) before the expiration of the second ten-day period contained in Section 9.2(b) and any such sale of the remaining Members' Membership Interests shall occur contemporaneously to the sale of the Transferor's Membership Interest. (a) Except as provided in Section 9.1 hereof, no Person acquiring a Membership Interest pursuant to this Article other than a Member shall become a Member unless such Person is approved by the vote or written consent of Members owning fifty-one (51%) percent of all remaining Membership Interests (i.e., exclusive of the Selling Member's Membership Interest). A transferee not admitted as a Member hereunder will be an assignee for all purposes, and shall be entitled to receive any share of Net Income or Loss, and other allocable items and distributions to which the Transferor would have been entitled, to the extent of the Membership Interest transferred to such assignee.

18 (b) Any Person who acquires in any manner whatsoever any Membership Interest in the Company, irrespective of whether such Person has accepted and adopted in writing the terms and provisions of this Agreement, and irrespective of whether such Person is admitted as a Member of the Company pursuant to Section 9.1 hereof, shall be deemed by the acceptance of the benefit of the acquisition thereof to have agreed to be subject to and to be bound by all the obligations of this Agreement to or by which any predecessor in interest of such Person was subject or bound. 9.4 Transfers Between Members or Within Their Family. Notwithstanding anything contained elsewhere herein to the contrary, any Member during his lifetime may Transfer any portion or all of his or its Membership Interest in the Company to any other Member or to any immediate family member (consisting of parents, children and/or grandchildren) of such Member or to any trust created for the benefit of the Member or his immediate family members. Furthermore, a Member may transfer all or any portion of his Membership Interest by his Last Will and Testament to any other Member or to any immediate family member or to any trust created by the Member for the benefit of his immediate family members. 9.5 No Partition. Each of the Members hereby waives the benefit of all provisions of law now in effect or as hereinafter enacted relating to actions for partition and/or administration or for sale in lieu of partition of real and/or personal property, and each of the Members agrees that he will not resort to any action at law or in equity to partition or sell the Company, or to seek administration in respect thereof. 9.6 Certain Tax Allocations. Upon the Transfer of all or any part of a Membership Interest of a Member as hereinabove provided, the Net Profits and Net Losses attributable to the Membership Interest so transferred shall be allocated between the Transferor and transferee as of the date set forth on the written assignment. Distributions shall be made to the holder of record of the Membership Interest on the date of Distribution. 9.7 Death or Incompetency of a Member. Upon the death or legal certification of incompetency of a Member, the legally authorized personal representative of such Member shall have all of the rights of a Member for the purpose of settling or managing the estate and shall have such power as the decedent or incompetent possessed to Transfer such Member's Membership Interest in accordance with this Article IX. 9.8 No Voluntary Withdrawal. A Member shall have no right or power to surrender his, or its Membership Interest voluntarily (a "Voluntary Withdrawal") or otherwise take, permit or permit to be taken, any action that would constitute a Voluntary Withdrawal. (a) Park shall have the right for a period of two (2) years from the formation of the Company to redeem the Membership Interest ofidt Holdings (a "Redemption"), either by his purchase or purchase by the Company by notice to IDT Holdings, which notice shall be deemed given to IDT Holdings upon actual receipt of such notice, to purchase IDT Holdings'

19 Membership Interest at a price (the "Purchase Price") determined and payable as set forth below. The closing of such purchase shall take place within thirty (30) days after the parties have agreed on the Purchase Price or it has otherwise been determined in accordance herewith. (b) If the Company, acting by its Members, and the withdrawn Member or its successor-in-interest, as the case may be, cannot agree upon the Purchase Price within thirty (30) days after IDT Holdings receives notice of the proposed Redemption, the Purchase Price shall be the higher of either (i) the product of 1.5 times IDT Holdings Capital Contributions or (ii) the book value ofidt Holdings' Membership Interest determined as of the date the notice is received by IDT Holdings (the "Book Value"). The Book Value shall be determined by an independent major accounting firm whose determination shall be conclusive and binding on the parties. Notwithstanding anything contained herein to the contrary, Book Value shall not (y) include any proceeds collected or collectible by the Company in respect of any life or disability insurance policies with respect to any Member; and (z) take into account reserves established for contingent liabilities of the Company. (c) Unless otherwise agreed by IDT Holdings, the Purchase Price shall be payable 100% in cash by wire transfer on the closing date of the Redemption Transfer by IDT Holdings. Notwithstanding Section 9.1, IDT Holdings shall have the right to transfer all or any portion of its Membership Interest at any time, subject to an initial holding period of two (2) years from the formation of the Company during which no transfer may be made without the approval of a majority of the Members and subject to the transferee agreeing in writing to be bound by the terms of the Operating Agreement. ARTICLE X Dissolution and Termination 10.1 Events Causing Dissolution and Winding-up. The Company shall be dissolved and wound up upon the first to occur of the following events: (b) a Withdrawal Event with respect to any Member if the remaining Members elect to dissolve the Company pursuant to Section Notice of any event specified in this Section 10.1(b) shall be given to each of the other Members by the withdrawn Member or his or its successor-in-interest, if any, within sixty (60) days after the date thereof; (c) the sale or other disposition of all or substantially all of the business or assets of the Company; or

20 (a) A Withdrawal Event with respect to any Member will not result in the dissolution, winding up and termination of the Company unless, within 180 days after the occurrence of such event, a then majority in interest of the remaining Members elect to dissolve the Company. (b) If the Members do not elect to dissolve the Company under Section 10.2(a), the Company shall continue as a limited liability company pursuant to the Delaware Act under this Agreement until the occurrence of a subsequent event causing dissolution hereunder or under the Delaware Act. (a) If the Company is to be dissolved in accordance with Section 10.1 or 10.2, then the Managers or other Persons selected by the Members (the "Liquidator") shall wind up the affairs of the Company, including by selling or otherwise liquidating the Company assets in a bona fide sale or sales to third Persons at such prices and upon such terms as they may determine. If the Liquidator determines that an immediate sale would be financially inadvisable, it may defer sale of the Company assets for a reasonable time, or distribute the assets in kind. During the winding up period, the Liquidator may exercise all powers granted to the Managers under this Agreement, and may adopt such plan, method or procedure as may be reasonable to effect an orderly winding up. (b) The proceeds of any liquidation of the Company shall be distributed in the following order of priority (to the extent consistent with the laws of the State of Delaware): (i) first, to the payment of the debts and liabilities of the Company and the expenses of dissolution and liquidation; (ii) then, to the establishment of any reserves which the Liquidator shall deem reasonably necessary for payment of such other debts and liabilities of the Company (contingent or otherwise), as are specified by the Liquidator, such reserves to be held in escrow by a bank or trust company selected by the Liquidator and to be disbursed as directed by the Liquidator in payment of any of the specified debts and liabilities or, at the expiration of such period as the Liquidator may deem advisable, to be distributed in the manner hereinafter provided; and

21 (c) If any assets are distributed in kind, they shall be distributed on the basis of the fair market value thereof, and shall be deemed to have been sold at fair market value for purposes of the allocations under Article VII. (d) The Company shall terminate when all assets of the Company have been sold and/or distributed and all affairs of the Company have been wound up. loa Articles of Dissolution. Within ninety (90) days following the dissolution and the commencement of winding up of the Company, Articles of Dissolution shall be prepared, executed and filed in accordance with the Delaware Act. ARTICLE XI Indemnification 11.1 Indemnification. To the fullest extent permitted by applicable law from time to time in effect: (a) the Company shall indemnify and hold harmless the Managers, Members, officers, agents and employees of the Company and their respective directors, trustees, shareholders, partners, officers, employees, agents and other affiliates, against all costs, liabilities, claims, expenses, including reasonable attorneys' fees and disbursements, and damages (collectively, "Losses") paid or incurred by any such Person in connection with the proper conduct of the Company's business; and (b) The Company shall indemnify, defend and hold each Manager harmless from and against, and may, upon the approval ofthe Members, indemnify, defend and hold the Company's and the Manager's respective affiliates, agents, employees, consultants and other independent contractors (collectively, "Indemnitees"), harmless from and against, all Losses arising from any demands, claims or lawsuits against any of the Indemnitees in connection with or resulting from his proper acts or omissions in his capacity as Manager, or as such an Affiliate, agent, employee, consultant or other independent contractor of the Company or the Manager, or in connection with, arising from or relating to, business or activities undertaken on behalf ofthe Company, including, without limitation, any demands, claims or lawsuits initiated by a Member, unless a judgment or other final adjudication, ruling, finding or holding adverse to such Indemnitee finds that (i) such acts or omissions were committed in bad faith, or were the result of gross negligence or active and deliberate dishonesty, (ii) such Indemnitee personally gained a financial profit or other advantage to which he was not legally entitled, or (iii) such acts or omissions violated such lesser standard of conduct as under applicable law affirmatively prevents indemnification hereunder. The termination of any action, suit or proceeding by judgment, order, settlement, plea of nolo contendere or its equivalent or conviction shall not, of itself, create a presumption that an Indemnitee shall not be entitled to indemnification hereunder Advancement of Reasonable Expenses. An Indemnitee shall be entitled to receive, upon application therefore, advances from the Company to cover the reasonable costs of

22 defending any pending, threatened or completed claim, action, suit or proceeding against him or it for Losses in connection with which he or it would be entitled to indemnification under this Article XI, provided, that such advances shall be repaid to the Company (with interest thereon at an annual rate equal to the Prime Rate) if the Indemnitee receiving such advance is found by a court of competent jurisdiction or an arbitration panel as described in Section to have violated any of the standards set forth in Section 11.1 which preclude indemnification hereunder Rights Not Exclusive; Survival. The rights of an Indemnitee set forth in this Article XI shall not be exclusive of any other rights to which he may be entitled, whether by separate agreement or otherwise, nor shall such rights limit or affect any other such rights. All rights of an Indemnitee under this Article XI shall survive the dissolution of the Company and any Withdrawal Event with respect to such Indemnitee, and shall inure to the benefit of his heirs, personal representatives, successors and assigns Source of Payment. Notwithstanding anything contained herein to the contrary, any amount to which an Indemnitee may be entitled under this Article XI shall be paid only out of the assets of the Company and any insurance proceeds available to the Company for such purposes. No Member shall be personally liable for any amount payable pursuant to this Article XI, or to make any Capital Contribution, return any distribution made to him by the Company, or restore any Negative Capital Account balance to enable the Company to make any such payment. ARTICLE XII General Provisions 12.1 Notices. Any notice, demand or other communication required or permitted to be given pursuant to this Agreement shall have been sufficiently given for all purposes if (a) delivered personally to the party or to an executive officer of the party to whom such notice, demand or other communication is directed, or (b) sent by registered or certified mail, postage prepaid, addressed to the Member or the Company at his or its address set forth in this Agreement. Except as otherwise provided in this Agreement, any such notice shall be deemed to be given upon the earlier of actual receipt or, if mailed, three (3) business days after the date on which it was deposited in a regularly maintained receptacle for the deposit of United States mail, addressed and sent as set forth in this Section Amendments. This Agreement contains the entire agreement among the Members and the Company with respect to the subject matter of this Agreement, and supersedes each course of conduct previously pursued or acquiesced in, and each oral agreement and representation previously made, by the Members with respect thereto, whether or not relied or acted upon. No course of performance or other conduct subsequently pursued or acquiesced in, and no oral agreement or representation subsequently made, by the Members, whether or not relied or acted upon, and no usage of trade, whether or not relied or acted upon, shall amend this Agreement or impair or otherwise affect any Member's obligations pursuant to this Agreement or any rights and remedies of a Member pursuant to this Agreement. No amendment to this