Borislow ExhibitA-LeagueLLCAgreement

8/3/2019 Borislow ExhibitA-LeagueLLCAgreement

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Exhibit A


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EXECUTION COpy

SECOND AMENDED AND RESTATEDLIMITED LIABILITY COMPANY AGREEMENT OF

~7WOMEN'S SOCCER, LLCamong

the Members set forth on Schedule A heretodated as of September 15, 2008

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Table of Contents

ARTICLE IDEFINED TERMS

Section 1.01 Certain Defined Terms 2ARTICLE IIFORMATION, TERM, PURPOSE AND POWERS

Section 2.01 Formation 15Section 2.02 Name 15Section 2.03 Term 15Section 2.04 Principal Place ofBusiness 16Section 2.05 Fiscal Year 16Section 2.06 Title to League Property 16Section 2.07 Registered Agent for Service of Process and Office 16Section 2.08 Purpose 16Section 2.09 Powers of the League 16Section 2.10 Maintenance of Separate Existence 16Section 2.11 No Personal Liability 17

ARTICLE IIIMEMBERSSection 3.01 Classes 17Section 3.02 Membership Units 17Section 3.03 Admission ofInitial Members 18Section 3.04 Admission of Additional Members 18Section 3.05 Members' Voting Rights 19Section 3.06 Resignation of a Member. 20Section 3.07 Team Business Plan 21Section 3.08 Waiver of Fiduciary Duties 21Section 3.09 Representations and Warranties of Each Member. 21Section 3.10 Representations and Warranties of Class A and Class C Members Regarding

Financial Condition, Investment in the League and Additional Agreements 22Section 3.11 Players Allocation and Draft 24Section 3.12 Anschutz Agreements 24Section 3.13 Class B Member 24Section 3.14 IP Cross-Licenses 24

ARTICLE IVCAPITAL CONTRIBUTIONS, CAPITAL ACCOUNTS AND MEMBERSHIP UNITS

Section 4.01 Initial Capital Contributions of.the.InitialClassA Membersr.i.; .: 25Section 4.0Z Capita] Contributions of the Class B and Class C Members 26

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Section 4.03 USSF Bond 27Section 4.04 Additional Capital Contributions 27Section 4.05 Funding Requirements 28Section 4.06 Delinquent Members 29Section 4.07 Status of Capital Contributions 30Section 4.08 Capital Accounts 31

ARTICLE VMANAGEMENT; BOARD OF GOVERNORS; COMMISSIONERAND LEAGUE OFFICE

Section 5.01 Management of the League 31Section 5.02 Board ofGovernors 32Section 5.03 Meetings of the Board of Governors 33Section 5.04 Length of Service of Governors; Vacancies 34Section 5.05 Majority Vote Required 35Section 5.06 Supermajority Vote Required 36Section 5.07 Action by Written Consent 36Section 5.08 Telephonic Meetings 37Section 5.09 League Minutes 37Section 5.10 Committees of the Board of Governors 37Section 5.11 Interested Governor Transactions 38Section 5.12 Officers; League Office 38Section 5.13 League Expansion 40

ARTICLE VIALLOCATIONS; TAX MATTERSSection 6.01 Allocations 41Section 6.02 Tax Allocations 41Section 6.03 Tax Decisions 41Section 6.04 Taxable Year 42Section 6.05 Certain Tax Accounting Matters 42Section 6.06 Section 754 Election 42

ARTICLE VIIDISTRIBUTION

Section 7.01 Distribution 42Section 7.02 Liquidation Distribution 43Section 7.03 Distribution Rules , 43Section 7.04 Limitations on Distribution 43

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ARTICLE VInBOOKS AND RECORDS; FINANCIAL STATEMENTS

.Section.S.Ol. -Bf,6ksand-Records;-PimmciaT Statements. ~..: -.~ ~ 43Section 8.02 Reporting Requirements 44


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ARTICLE IXRESTRICTIONS ON TRANSFER

Section 9.01 Restrictions on Sale of Membership Interest.. 45Section 9.02 Improper Sale or Encumbrance 47Section 9.03 Rights of First Refusal 48Section 9.04 Sale ofa Class A Member's Membership Interest to a Third Party Purchaser 50Section 9.05 Substitute Member 52Section 9.06 Anschutz's Membership Interest 52

ARTICLE XDISSOLUTION, LIQUIDATION AND TERMINATIONSection 10.01 No Dissolution 56Section 10.02 Events Causing Dissolution 56Section 10.03 Notice ofDissolution 56Section 10.04 Liquidation 56Section 10.05 Termination 57Section 10.06 Claims of the Members 57

ARTICLE XILIABILITY AND INDEMNIFICATIONSection 11.01 Liability of Members 57Section 11.02 Indemnification by Members 58Section 11.03 Indemnification by the League 58Section 11.04 Advancement ofExpenses 58

ARTICLE XIIARBITRATIONSection 12.01 Resolution of Disputes Between Members or Between the League and a

Member 60Section 12.02 Role of the Commissioner in Resolving Disputes Between Members orBetween the League and a Member 61

Section 12.03 Limitation 61Section 12.04 Confidentiality 61Section 12.05 No Appeal 61

ARTICLE XIIIMISCELLANEOUS

Section 13.01 Confidential Information 61Section 13.02 Notices 63Section 13.03 Public Announcements 64Section 13.04 Cumulative Remedies _ _..~.uu-;;;64

~SectionJ:3.Q5 ~Binding-Effecr ~ - -.: 64Section 13.06 Interpretation 64

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Section 13.07 Severability 65Section 13.08 Counterparts 65Section 13.09 Entire Agreement 65Section 13.10 Governing Law; Service of Process; Waiver of Jury Trial.. 66Section 13.11 Specific Performance 66Section 13.12 Expenses 66Section 13.13 Amendments and Waivers; Assignment.. 66Section 13.14 No Third Party Beneficiaries 67Section 13.15 Headings 67Section 13.16 Construction 67

Schedule A MembersSchedule B Board of Governors and ObserversSchedule C Controlling PersonsExhibit A Operating Agreement

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SECOND AMENDED AND RESTATEDLIMITED LIABILITY COMPANY AGREEMENT

OFWOMEN'S SOCCER, LLC

This SECOND AMENDED AND REST ATED LIMITED LIABILITYCOMPANY AGREEMENT of WOMEN'S SOCCER, LLC, a Delaware limited liabilitycompany (the "League"), is made and effective as of September 15,2008, by and among thosePersons whose signatures appear on the signature pages hereto and those Persons who hereafterbecome members of the League from time to time in accordance with the provisions hereof(collectively, the "Members").

WHEREAS, each of the Initial Class A Members (as defined below) and WSII (asdefined below) entered into a Letter ofIntent, dated February 21, 2007 (the "LOI"), pursuant towhich the parties thereto proposed to launch a premier women's professional soccer league inNorth America;

WHEREAS, the Members desire to own, develop and operate a women'sprofessional soccer league, and each Class A Member desires to become an owner and operatorof a women's professional soccer team that will participate in the League upon the terms andconditions set forth herein and in the Additional Agreements;

WHEREAS, Initial Class A Members and WSII have caused the League to beformed under the Delaware Limited Liability Company Act, as amended from time to time, (the"Delaware Act"), filed the Certificate of Formation of the League with the Secretary of the Stateof the State of Delaware on August 10,2007 pursuant to the Delaware Act and have entered intothat certain Limited Liability Company Agreement of the League, dated August 24,2007 (the"Original LLC Agreement");

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WHEREAS, in connection with the issuance of certain Class C Membership Units(defined below), the admission of the Class C Members (as defined below) as Members andother amendments agreed by the Initial Class A Members and WSII, the Members have amendedand restated the Original LLC Agreement in its entirety and entered into that certain Amendedand Restated Limited Liability Company Agreement of the League, dated February 15,2008 (the"First Amended LLC Agreement"); and

WHEREAS, in connection with the transfer by certain Class A Members ofequity interests in such Class A Members and other amendments agreed by the Members, theMembers desire that the First Amended and Restated LLC Agreement havenofurther force andeffect and beamended.andrestated in its entirety by and 'as set forih in thIS Agreement.


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NOW, THEREFORE, in consideration of the agreements and obligations set forthherein and for other good and valuable consideration, the receipt and sufficiency of which arehereby acknowledged, the Members hereby agree as follows:

ARTICLE IDEFINED TERMS

Section 1.01 Certain Defined Terms. (a) Each of the following terms shall havethe meaning provided in the Section or Schedule set forth opposite such term:"Action" means any claim, demand, action, suit, arbitration, inquiry, orproceeding."Additional Agreements" means, with respect to each Class A Member, theOperating Agreement and the IP License Agreements."Affiliate" means, with respect to a specified Person, any other Person thatdirectly, or indirectly through one or more intermediaries, Controls, is Controlled by, oris under common Control with, such specified Person."Agreement" means this Limited Liability Company Agreement of Women'sSoccer, LLC, as amended, modified, supplemented or restated from time to time."All-Star Game" means a required, League-sanctioned game amongst either thePlayers voted to be the "All-Stars" of the League, or alternatively, of the Players voted tobe the "All-Stars" of the League collectively against a non-League opponent."Asset Value" means, with respect to any asset, the asset's adjusted basis forfederal income tax purposes, except as follows:

(i) the initial Asset Value of any asset (other than money) contributedby a Member to the League shall be the gross fair market value of such asset(A) as set forth on Schedule A, as applicable, or (B) if such asset is not listed onSchedule A, as reasonably determined by the Commissioner and approved by theBoard of Governors by a Supermajority Vote;

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(ii) the Asset Values of all League assets shall be adjusted to equaltheir respective gross fair market values as determined by the Commissioner andapproved by the Board of Governors by a Supermajority Vote as of the followingtimes: (a) the acquisition of an additional interest in the League by any new orexisting Member in exchange for more than a de minimis Capital Contribution;(b) the distribution by the League to a Member of more than a de minimis amountof property as consideration for an interest in the League; or (c) the liquidation ofthe League within the meaning of Section 1.704-1 (b)(2)(ii)(g) of the Regulations,provided however, that adjustments pursuant to clauses (a) and ililabove shall bemade only if all of the Members agree that such-adjustments Me necessaryor"

- -apjJropiiateto-ieflect the relative economic interests of the Members in the


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League (which agreement shall not be unreasonably withheld by any Member);and

(iii) the Asset Value of any League asset distributed to any Membershall be the gross fair market value of such asset on the date of distribution, asdetermined by the agreement among all the Members (which agreement shall notbe unreasonably withheld by any Member).

If the Asset Value of an asset has been determined or adjusted pursuant tosubparagraph (i) or {ill, such Asset Value shall thereafter be adjusted by the Depreciationtaken into account with respect to such asset.

"Bankruptcy" of a Member shall be deemed to occur for purposes of thisAgreement if:(i) an involuntary petition under any bankruptcy or insolvency Law or

under the reorganization provisions of any such Law is filed with respect to suchMember or a receiver of or for the property of such Member is appointed withoutacquiescence of such Member, which petition or appointment remainsundischarged or unstayed for an aggregate period of 90 days (whether or notconsecutive); or

(ii) a voluntary petition under any bankruptcy or insolvency Law orunder the reorganization provisions of any such Law is filed by such Member, avoluntary assignment of such Member's property for the benefit of creditors ismade, or a receiver of or for the property of such Member is appointed by, oracquiesced in, by such Member."Beneficial Owner" or "Beneficially Own" has the meaning given such term inRule 13d-3 under the Exchange Act."Board of Governors" means the Board of Governors of the League."Business Day" means any day, except a Saturday, Sunday or other day on whichcommercial banking institutions in the State of New York are authorized or directed by

Law or executive order to close.

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"Capital Account" means, with respect to any Member, the account maintainedfor such Member in accordance with the provisions of Section 4.09.

"Capital Contribution" means, with respect to any Member, the aggregate amountof money contributed to the League and the Asset Value (net of any liability) of anyproperty (other than money) contributed to the League pursuant to Article IV. In the caseof a Member that acquires an interest in the League by virtue of an assignment or transferin accordance with the terms of this Agreement, "Capital Contribution" means theCapital Contribution of such Member's predecessor to the extent relating to the acquiredinterest.


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"Capitalized Lease Obligations" means any obligations to pay rent or otheramounts under a lease of (or other agreement conveying the right to use) any property(whether real, personal or mixed) that is or is required to be classified and accounted foras a capital lease obligation under GAAP, and, for the purposes of this Agreement, theamount of such obligation at any date shall be the capitalized amount thereof at such date,determined in accordance with GAAP.

"Championship Game" means the final game of the Season played by Teams thathave won all of their Playoff Games. The Championship Game shall determine theLeague's champion for a given Season.

"Change of Control" means with respect to a Member, the occurrence of any ofthe following at any time after the date hereof: (i) except with respect to any PermittedTransferee, any Person or group of Persons (within the meaning of Section 13(d)(3) ofthe Securities Exchange Act of 1934) other than the Controlling Persons shall havebecome the Beneficial Owner of more than forty-nine percent (49%) of the thenoutstanding voting securities of any such Member, (ii) a majority of the board of directors(or similar governing body) of such Member or any Affiliate Controlling such Membershall consist at such time of individuals other than (x) members of the board of directors(or similar governing body) of such Member or Affiliate Controlling such Member, as thecase may be, on the date hereof and (y) other members of such board of directors (orsimilar governing body) recommended, elected or approved to succeed or become adirector of such Member or Affiliate Controlling such Member, as the case may be, by amajority of such members referred to in clause (x) or by members so recommended,elected or approved; or (iii) the board of directors (or similar governing body), or ifapplicable, the shareholders, of the Member or any Affiliate Controlling such Member, asthe case may be, shall have approved the sale of all or substantially all the assets of suchMember or Affiliate Controlling such Member in one (1) transaction or series of relatedtransactions.

"Class A Member" means a Member that holds one (1) or more Class AMembership Units.

"Class A Membership Percentage" means, for any Member, a fraction, expressedas a percentage, (i) the numerator of which is the number of the Class A MembershipUnits held by such Member and (ii) the denominator of which is the number of allClass A Membership Units outstanding at the relevant time.

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"Class A Members Trademark Cross-License Agreement" shall mean theTrademark Cross-License Agreement among the Class A Members, substantially in theform attached to the Operating Agreement.

"Class B Member" means a Member that holds one (I) or more Class BMembership Units.

"Glass B - MembersliipPeicerifage" means, for any Member, a fraction, expressedas a percentage, (i) the numerator of which is the number of the Class B Membership


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Units held by such Member and (ii) the denominator of which is the number of allClass B Membership Units outstanding at the relevant time.

"Class C Members" means a Member that holds Class C Membership Units."Code" means the Internal Revenue Code of 1986, as amended from time to time,or any corresponding federal tax statute enacted after the date of this Agreement. The

reference to a specific section of the Code refers not only to such specific section but alsoto any corresponding provision of any federal tax statute enacted after the date of thisAgreement, as such specific section or corresponding provision is in effect on the date ofapplication of the provisions of this Agreement containing such reference.

"Commissioner" means the chief executive officer of the League, determined inaccordance with the provisions of Section 5.06."Competition Committee" means the committee formed by the Board ofGovernors to prepare and recommend the Competition Plan to the Board of Governors(for the avoidance of doubt, such Competition Committee shall not have authority toaddress issues of each Team's compliance with the Competition Plan)."Competition Plan" means the competition plan and rules of the game for theLeague, as amended from time to time by a Majority Vote."Control" (including the terms "Controlled by" and "under cornmon Controlwith") means the possession, directly or indirectly, of the power to direct or cause the

direction of the management and policies of a Person, whether through the ownership ofvoting securities, as trustee or executor, by contract or otherwise, including, withoutlimitation, the ownership, directly or indirectly, of securities having the power to elect amajority of the board of directors or similar body governing the affairs of such Person.

"Controlling Persons" means, for each Member, the Person or group of Persons,which Control such Member, as set forth on Schedule C."Covered Person" means a Member, any Affiliate of a Member, any officers,

directors, Governors, shareholders, employees or partners or members of a Member, orits respective Affiliates or any Governors or Officers of the League.

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"Depreciation" means, for each Taxable Year or other period, an amount equal tothe depreciation, amortization or other cost recovery deduction allowable for U.S. federalincome tax purposes with respect to assets of the League for such Taxable Year or otherperiod; provided, however, that if the Asset Value of an asset differs from its adjustedbasis for U.S. federal income tax purposes at the beginning of such Taxable Year or otherperiod, Depreciation shall be an amount that bears the same ratio to such beginning AssetValue as the U.S. federal income tax depreciation, amortization or other cost recoverydeduction with respect to such asset for such Taxable Year or other period bears to suchbeginning adjusted tax basis; and, provided, furtherthat,ifthUS. federal income la xdepreciationramortizatiorior other cost recovery deduction for such Taxable Year or


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other period is zero, Depreciation shall be determined with reference to such beginningAsset Value using any reasonable method selected by the Tax Matters Designee.

"Encumbrance" means any security interest, pledge, mortgage, lien, charge,adverse claim of ownership or use, or other encumbrance of any kind.

"Equity Percentage Interest" as of any date means, with respect to any Membermeans the percentage of the total equity in the League owned by such Member as of suchdate.

"Exchange Act" means the United States Securities Exchange Act of 1934, asamended, and the rules and regulations promulgated thereunder.

"Fair Market Value" of Membership Units or other property, as the case may be,shall mean the cash price that an unaffiliated third party would pay to acquire all of suchMembership Units (computed on a fully diluted basis after giving effect to the exercise ofany and all outstanding conversion rights, exchange rights, warrants and options) or otherproperty in an arm's-length transaction, assuming with respect to the Fair Market Valueof Membership Units, that the League was being sold in a manner reasonably designed tosolicit all possible participants and permit all interested Persons an opportunity toparticipate and to achieve the best value reasonably available to the Members at the time,taking into account all existing circumstances, including, without limitation, the termsand conditions of all agreements (including this Agreement) to which the League and theselling Member is then a party or by which it is otherwise benefited. Each Memberhereby covenants and agrees that where the provisions of this Agreement indicate that the"Fair Market Value" is to be determined, such Member will take all actions reasonablynecessary to determine the Fair Market Value in accordance with the following: by theNotice Date, each Member participating in the event requiring a determination of FairMarket Value shall designate an investment banking firm of recognized national standingto determine the Fair Market Value (or, ifthere are more than two (2) Membersparticipating in such events, one (1) investment banking firm ofrecognized nationalstanding selected by the Member which initiates the appraisal request (or takes the actionnecessitating that the Fair Market Value be determined) and one (1) investment bankingfirm of recognized national standing selected by the majority of the other Membersparticipating or if such vote is deadlocked, by the Commissioner who shall select one (1)of the firms proposed by such deadlocked Members). Within 30 days after appointment,each investment banking firm shall determine its initial view as to the Fair Market Valueand consult with one another with respect thereto. Within 45 days after the Notice Date,each investment banking firm shall have determined its final view as to the Fair MarketValue and shall have delivered such final view to each Member participating in theappraisal process. If the difference between the higher of the respective final views of thetwo (2) investment banking firms and the lower of the respective final views of thetwo (2) investment banking firms is less than ten percent (10%) of the higher Fair MarketValue, then the Fair Market Value determined shall be the average of those two (2)views. If the difference between the higher Fair Market Value and the [owerFair MarketValue is equal toorgreater than ten percent (10%)6ftlie higher-Pair Market Value, theparticipating Members shall instruct the investment banking firms to jointly designate the

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Mutually Designated Appraiser. The Mutually Designated Appraiser shall be designatedwithin 60 days from the Notice Date and shall, within 15 days of such designation,determine its final view as to the Fair Market Value by selecting either the higher FairMarket Value or the lower Fair Market Value. The League and the Prospective Sellershall provide reasonable access to each of the designated investment banking firms to thebooks and records of the League so as to allow such investment banking firms to conductdue diligence examinations in scope and duration as are customary in valuations of thiskind. Each of the Members and any Permitted Transferee (on its own behalf and onbehalf of its respective Affiliates) agree to cooperate with each of the investment bankingfirms and to provide such information as may reasonably be requested. Costs of theappraisals shall be borne equally by the participating Members. Notwithstanding theforegoing, in the event a Member does not appoint an investment banking firm within thetime periods specified above, such Member shall have waived its rights to appoint aninvestment banking firm and the determination of the Fair Market Value shall be madesolely by the investment banking firm of the Member that appointed an investmentbanking firm.

"GAAP" means United States generally accepted accounting principles as ineffect from time to time."Governor" means a member of the Board of Governors."Home Territory" means the Home Territory of any Team as set forth in theOperating Agreement."HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, asamended."Interest Rate" means the prime rate published in the New York edition of The

Wall Street Journal as the prime rate for Citibank, N .A."Initial Capital Contribution" means with respect to any Member, the initialCapital Contribution made by such Member upon its admission to the League in

exchange for its Membership Interest.

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"Initial Class A Members" means (i) AEG L.A. Women's Soccer, LLC, aDelaware limited liability company, (ii) Boston Women's Soccer, LLC, a Massachusettslimited liability company, (iii) Chicago Professional Women's Soccer, LLC, an Illinoislimited liability company, (iv) Hendricks Investment Holdings, LLC , a Delawarelimited liability company, (v) Sky Blue Women's Soccer Incorporated, a New Jerseycorporation and (vi) St. Louis Soccer United, LLC, an Illinois limited liability company.

"Initial Percentage" means, for each date that a distribution is made pursuant toSection 7.01(a)(i), a fraction with (A) the numerator equal to the aggregate amount of allPrimary Capital Contributionsof all Class A Members that have nor been previouslydistributed pursuant to Section 7.0lCa)(i) and (B) the denominator equal to the sum of(i) the aggregate amount of all Primary Capital Contributions of all Class A Members thathave not been previously distributed pursuant to Section 7.01(a)(i) and (ii) the aggregate


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amount of all Capital Contributions of all Class B Members that have not been previouslydistributed pursuant to the Section 7.01(a)(i).

"Investor" means, with respect to any Member, the Person, as amended from timeto time, upon the written consent of the Member and the Commissioner, identified as theInvestor opposite such Member's name on Schedule A.

"IP License Agreements" shall mean the League-Member Trademark Cross-License Agreement, the Class A Members Trademark Cross-License Agreement and theWebsite Principles.

"Law" means any statute, law, ordinance, regulation, rule, code, executive order,injunction, judgment, decree or other order issued or promulgated by any national,supranational, state, federal, provincial, local or municipal government or anyadministrative or regulatory body with authority therefrom with jurisdiction over theLeague or the Members, as the case may be.

"League-Member Trademark Cross-License Agreement" shall mean theTrademark Cross-License Agreement between the League and the Member, substantiallyin the form attached to the Operating Agreement.

"League Exhibition Games" shall mean exhibition soccer games in which aLeague team plays against a non-League team.

"Local Exhibition Game" shall mean any exhibition soccer game promoted andhosted by a Member between two (2) non-League teams.

"Loss" means the any and all liabilities, losses, diminution in value, damages,claims, costs and expenses, interest, awards, judgments and penalties (includingattorneys' and consultants' fees and expenses) actually suffered or incurred by a Person(including any Action brought or otherwise initiated by such Person).

"Majority Vote" means, with respect to any matter to be voted upon, theaffirmative vote of at least a majority of the Governors on the Board of Governorsentitled to vote on such matter.

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"Marketable Securities" means securities that are (a) (i) securities of or otherinterests in any Person that are traded on a United States national securities exchange orreported on by the National Association of Securities Dealers Automated QuotationSystem or (ii) debt securities on market terms of an issuer that has debt or equitysecurities that are so traded or so reported on and in which Marketable Securities anationally recognized securities firm has agreed to make a market, and (b) not subject torestrictions on transfer as a result of any applicable contractual provisions or theprovisions of the Securities Act or, if subject to such restrictions under the Securities Act,are also subject to registration rights reasonably acceptable to the Person receiving suchMarketable Securities as consideration in a transactionpursuant to Article IX.


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"Material Adverse Effect" means any event, condition, change or effect that(a) materially and adversely affect the assets, liabilities, business, financial condition orresults of operations of the League or League Business, taken as a whole, or (b) preventsor materially delays the consummation of the transactions contemplated by thisAgreement.

"Member" means any Person named as a member of the League on Schedule Aand any Person admitted as an additional Member pursuant to the provisions of thisAgreement, in each case, in such Person's capacity as a member of the League.

"Membership Interest" means the entire ownership interest of a Member in theLeague at any time, including such Member's Membership Units, Capital Account, suchMember's rights to receive distributions and other benefits to which such Member maybe entitled hereunder and under the Delaware Act, including its right to own and operatea Team, and the obligations of such Member to comply with the applicable terms andprovisions of this Agreement.

"Mutually Designated Appraiser" means the investment banking firm jointlydesignated by the investment banking firms initially appointed by the interested parties todetermine the Fair Market Value which is neither an Affiliate of any Member nor hasperformed any significant work for any Member or any Affiliate of any Member withinthe prior two (2) years.

"Net Profit" and ''Net Loss" mean, for each Taxable Year or part thereof forwhich allocations are made, an amount equal to the League's taxable income or loss forsuch Taxable Year or other period, determined in accordance with Section 703(a) of theCode (but including in taxable income or loss, for this purpose, all items of income, gain,loss or deduction required to be stated separately pursuant to Section 703(a)(1) of theCode), with the following adjustments:

(i) any income of the League exempt from U.S. federal income taxand not otherwise taken into account in computing Net Profit or Net Losspursuant to this definition shall be added to such taxable income or loss;

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(ii) any expenditures of the League described in Section 705(a)(2)(B)of the Code (or treated as expenditures described in Section 705(a)(2)(B) of theCode pursuant to Regulation Section 1.704-1(b)(2)(iv)(i)) and not otherwise takeninto account in computing Net Profit or Net Loss pursuant to this definition shallbe subtracted from such taxable income or loss;

(iii) in the event the Asset Value of any asset of the League is adjustedin accordance with paragraph (ii) of the definition of "Asset Value," the amountof such adjustment shall be taken into account as gain or loss from the dispositionof such asset for purposes of computing Net Profit or Net Loss;

(iv): -- gain or loss resulting f r o m any disposition of any asset of theLeague with respect to which gain or loss is recognized for U.S. federal incometax purposes shall be computed by reference to the Asset Value of the asset


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disposed of, notwithstanding that the adjusted tax basis of such asset differs fromits Asset Value;

(v) in lieu of the depreciation, amortization and other cost recoverydeductions taken into account in computing such taxable income or loss, thereshall be taken into account Depreciation for such Taxable Year or other period orother period, computed in accordance with the definition of "Depreciation"; and

(vi) any items which are specially allocated pursuant to Section 6.02shall not be taken into account in computing Net Profit or Net Loss."Notice Date" means the date that is within 10 days following an event requiring

a determination of Fair Market Value on which investment banking firms have beenappointed for all parties as required in the definition of Fair Market Value."Operating Agreement" means, the operating agreement, as amended from time totime, between each Class A Member, on the one hand, and the League, on the other hand,

the terms of which the parties agree to negotiate in good faith within the time frame setforth on Exhibit A hereto."Permitted Transferee" means, (i) with respect to a Class A Member, (A) anyAffiliate of such Class A Member, (B) any member of the immediate family of suchClass A Member and (C) any trust or other estate planning vehicle for the benefit of anysuch member ofthe immediate family, and (ii) with respect to a Class B Member, an

Affiliate of such Class B Member; provided, that a Permitted Transferee shall not be acompetitor to the League, as reasonably determined by the Commissioner; provideg,further, that such Permitted Transferee agrees (x) to be bound by and comply with all theterms ofthis Agreement as a Member and (y) to assume all the rights and obligations ofAdditional Agreements of the transferring Member pursuant to the AdditionalAgreements. For purposes of this definition, the word "immediate family" shall includeany spouse, lineal ancestor or descendant, brother or sister.

"Person" means any individual, corporation, partnership, limited partnership,limited liability company, joint venture, trust, unincorporated or governmentalorganization or any agency or political subdivision thereof.

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"Player" means any individual who is listed on the roster of a Team, participatesin the League games and is under contract with the Team.

"Players' Association" means the organization formed by all of the Players for thepurpose of negotiating with the League with regard to employment issues.

"Playoff Game" shall mean any game played after the close of all Regular SeasonGames and includes the Championship Game but not including League ExhibitionGames, Local Exhibition Games or All-Star Games.

-"Price-DetennlhationDate" means in connection with any Sale of MembershipInterests to the League pursuant to Section 9.03, the date on which the Prospective Seller


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receives a Notice of Election indicating the League's interest in purchasing suchMembership Interests."Regular Season Game" shall mean any game included in the League's schedule

of regular season games and does not include any pre-Season games, League ExhibitionGames, or Playoff Games.

"Regulations" means the income tax regulations, including temporary regulations,promulgated under the Code, as such regulations may be amended from time to time(including corresponding provisions of succeeding regulations).

"Sale" means, in respect of any Membership Unit, property or other asset, anysale, assignment, Transfer, distribution or other disposition thereof or of a participationtherein, or other conveyance of legal or beneficial interest therein, or any short position ina security or any other action or position otherwise reducing risk related to ownershipthrough hedging or other derivative instruments, whether voluntarily or by operation ofLaw or any agreement or commitment to do any of the foregoing.

"Season" means the period beginning with the first day in which a RegularSeason Game is played and ending on the day on which the Championship Game isplayed."Second Season" means the Season that begins during the calendar year followingthe calendar year in which the first Season occurs."Securities Act" means the Securities Act of 1933, as amended, and the rules andregulations promulgated thereunder."Sponsorship Guidelines" means the guidelines for national sponsors of the

League, as amended from time to time by a Majority Vote."Supermajority Vote" means, with respect to any matter to be voted upon, the

affirmative vote of at least (a) five (5) Governors if there are less than eight (8) Class AMembers whose Governors on the Board of Governors are entitled to vote on such matterand (b) seventy-five percent (75%) ifthere are eight (8) or more Class A Members whoseGovernors on the Board of Governors are entitled to vote on such matter.

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"Team" means any of the women's professional soccer teams owned and operatedby a Class A Member which comprise the League.

"Third Party" means with respect to any Person (other than a PermittedTransferee of such Member).

"Third Season" means the Season that begins during the calendar year followingthe calendar year in which the Second Season occurs.

"Transfer" means every absolute or conditional method of transferring a legal orequitable, record or beneficial, direct or indirect ownership of a Member's Membership


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Units or any interest in the League, or a part thereof, whether voluntarily, involuntarily,or by operation of Law (including a change in beneficiaries or trustees of a trust) andincluding, without limitation, directly or indirectly selling, assigning, transferring,conveying, giving away, pledging, mortgaging, or otherwise Encumbering such interest.

"Transferee" means any Person that is a transferee of a Member's interest in theLeague, or part thereof.

"Website Principles" means Exhibit 2.3(t) to the Operating Agreement regardingthe League and Member web sites and web pages, the terms of which the parties agree tonegotiate in good faith within the time frame set forth in Section 3.12(a) hereto.

"WSII" means Women's Soccer Initiative, Inc., a District of Columbia nonprofitcorporation.(b) The following terms have the meanings set forth in the Section set forthopposite such term:

SectionAAAAAA RulesAcceptance NoticeAdvisory GroupAlternate GovernorAnnual BudgetAnschutzAnschutz Acquisition DateAnschutz Acquisition DeadlineAnschutz AssignmentAnschutz CallAnschutz Call NoticeAnschutz InterestsAnschutz Notice PeriodAnschutz Purchase PriceAnschutz PurchaserAnschutz SaleAnschutz TermAnschutz Territory Sale PriceAssumed Tax LiabilityAuditorsAuthorized Expansion TeamsAuthorized New Class A Members

.Blue StarBlue Star CallBond

12.01(c)12.01(c)9.02(c)(i)5. 1 O (d )5.02(a)5.01(c)9.06(a)(i)9.06(b)(i)9.06(c)9.06(d)(i)9.06(a)(ii)9.06(a)(ii)9.06(b)(i)9.06(a)(ii)9.06(b)(i)9.06(b)(i)9.06(b)(i)9.06(d)(ii)9.06(d)(ii)7 .0 1 (b ) (i)8.01(a)5.l3(b)3.Q4(b)_.9.06(a)(i)9.06(a)(i)4.03(a)

NYDOCS02/849007.9 12


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SectionBond DrawdownBond Replenishment AmountCapital CallCapital Call NoticeCertificateChairpersonClass A Membership UnitsClass B Equity InterestClass B Membership UnitsClass C Equity InterestClass C Member PaymentClass C Membership UnitsCommittee RepresentativeConfidential InformationDefaulting Class A MemberDelaware ActDelinquency NoticeDelinquent Class A MemberDisputeDispute NoticeExcess CashExpansion TeamExtended Anschutz TermFailed SignatoryFirst Class A Member PaymentFiscal YearFunded TeamFunding ShortfallImproper SaleImproper SellerInitial Capital CommitmentInitial Class A MembersInitial Contribution DateInitial Contribution DefaultInvestor GroupLA TerritoryLeagueLeague Blue Star ConsentLeague BusinessLeague LicenseLeague OfferLeague Offer Period

- - League OfficeLeague Office Budget

NYDOCS02/849007.9

4.03(b)4.03(b)(i)4.04(a)4.05(d)2.01(c)5.03(c)3.013.02(e)3.013.02(d)3.04(c)3.015.10(e)l3.0I(a)4.01(b)Recitals4.06(a)4.06(a)I2.0I(a)12.0I(a)7.0I(a)5.13(a)9.06(d)(iv)3.l2(a)Exhibit A2.054.03(b)4.06(a)9.02(a)9.02(e)(i)4.01(a)3.034.0I(b)4.0I(b)3.l0(a)9.06(d)(ii)Preamble9.06(a)(ii)2.083.159.02(c)(i)

_9.02(e~(i)5.12(a)3 . 11 (a)

13


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NYDOCS02/849007.9

Term SectionLeague Operating Account 4.01(c)Liquidating Trustee 10.03LOI RecitalsMatch Period 9.02(c)(ii)Members PreambleMember Licenses 3.15(b)Membership Unit 3.01Minimum Sale Price 9.01(e)Minority Transfer 9.01(b)New Bond Payment 4.03(c)New Class A Member 3.04(a)New Class C Member 3.04(c)Non-Delinquent Class A Members 4.06(b)Notice of Election 9.03(c)(i)Observer 5.03(d)Offer 9.03(a)Offer Notice 9.03(a)Offer Period 9.03(c)(i)Offer Price 9.03(a)Offered Interest 9.03(a)Officers 5.12(a)Original LLC Agreement RecitalsPermitted Sale 9.01(b)Permitted Transferee Sale 9.01(b)Potential Purchaser 9.02(c)(ii)Pro Rata Bond Amount 4.03(a)Pro Rata Portion 4.05(d)Proposed Transaction 9.01(d)(i)Prospective Seller 9.03(a)Remaining Offered Interest 9.03(e)Representatives l3.01(a)Restricted Date 9.01(a)Restricted Party 13.01(a)Return of Bond Drawdown Amount 4.03(b)(ii)Revised Offer 9.02(c)(ii)Second Class A Member Payment Exhibit ASigning Date 3.12Statement of Financial Condition 3.l0(a)Substitute Class A Member 9.05Taxable Year 6.04Tax Distributions 7.01(b)Tax Matters Designee 6.03.Team Assets 3.06(a)Team Option 9.03(c)(ii)

14


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SectionThird Party OfferThird Party PurchaserUSSF

9.02(c)(ii)9.03(a)2.08

ARTICLE IIFORMATION, TERM, PURPOSE AND POWERS

Section 2.01 Formation. (a) The League was formed, and the Members herebyconfirm the formation of the League, as a limited liability company under and pursuant to theprovisions of the Delaware Act and all other pertinent Laws of the State of Delaware for thepurposes and upon the terms and conditions hereinafter set forth. The parties hereto agree thattheir rights, duties and liabilities and the rights duties and liabilities of any additional Memberadmitted to the League in accordance with the terms hereof, shall be as provided in the DelawareAct, except as otherwise provided herein. This Agreement shall be effective as of the date firstwritten above.

(b) The name and mailing address of each Member including the names of theInvestors of each Member and the amount contributed by such Member to the capital of theLeague (specifically setting forth each Member's Initial Capital Contribution amount and theaggregate amount of any additional Capital Contributions made by each Member) shall be listedon Schedule A. The Commissioner or an Officer of the League shall be required to updateSchedule A from time to time, as necessary to reflect accurately the information therein asknown by the Commissioner or the League Office, but no such update shall modify Schedule Ain any manner inconsistent with this Agreement or the Delaware Act. Any amendment orrevision to Schedule A made in accordance with this Agreement shall not be deemed anamendment to this Agreement for purposes of Section 13.13. Any reference in this Agreementto Schedule A shall be deemed to be a reference to Schedule A, as amended and in effect fromtime to time.

(c) The Commissioner, or a designee of the Commissioner, is herebydesignated as an authorized person, within the meaning of the Delaware Act, to execute, deliverand file, or to cause the execution, delivery and filing of, any amendments or restatements of theCertificate of Formation (the "Certificate") with the Secretary of State of the State of Delawareand any other certificates, notices, statements or other instruments (and any amendments orrestatements thereof) necessary or advisable for the formation of the League or the operation ofthe League in all jurisdictions where the League may elect to do business, but no suchamendment, restatement or other instrument may be executed, delivered or filed unless adoptedin a manner authorized by this Agreement.

NYDOCS02/849007.9 15

Section 2.02 Name. The name of the League formed hereby is Women'sSoccer, LLC and its business shall be conducted under such name as the Board of Governorsmay from time to time designate in accordance with applicable Laws .

. S0Gtion2.03 Term. The term of the League shall commence upon the date ofthe filing of the Certificate with the office of the Secretary of State of the State of Delaware and


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shall continue for an indefinite period, subject to the provisions set forth in Article X andapplicable Law. The existence of the League as a separate legal entity shall continue untilcancellation of the Certificate in the manner required by the Delaware Act.

Section 2.04 Principal Place of Business. The principal place of business of theLeague shall be in a location to be approved by the Board of Governors by a Majority Vote uponthe recommendation of the Commissioner. The League may maintain such other offices andoperations at such other places as approved from time to time by the Board of Governors by aMajority Vote upon the recommendation of the Commissioner.

Section 2.05 Fiscal Year. The fiscal year of the League (the "Fiscal Year") forGAAP purposes shall be the calendar year.

Section 2.06 Title to League Property. All property of the League, whether real,personal or mixed, tangible or intangible, shall be deemed to be owned by the League as anentity, and no Member, individually, shall have any direct ownership interest in such property.

Section 2.07 Registered Agent for Service of Process and Office. The Leagueshall maintain a registered office and a registered agent in the State of Delaware, each of whichshall be as set forth in the Certificate, as the same may be amended from time to time inaccordance with this Agreement.

Section 2.08 Purpose. The purpose of the League shall be to (a) own, developand operate a women's professional soccer league in compliance with the provisions of theUSSF Standards as set forth by the United States Soccer Federation ("US SF"), and (b) engage inall activities necessary, convenient, desirable or incidental thereto and for which a limitedliability company may be organized under the Delaware Act (collectively, the "LeagueBusiness").

Section 2.09 Powers of the League. Subject to any limitations set forth in thisAgreement, the League shall have all of the powers of a limited liability company providedunder the Delaware Act.

NYDOCS02/849007.9 16

Section 2.10 Maintenance of Separate Existence. The League shall do all thingsnecessary to maintain its limited liability company existence separate and apart from eachMember and any Affiliate of any Member, including maintaining its books and records on acurrent basis separate from that of any Affiliate of the League or any other Person, and shall notcommingle the League's assets with those of any Affiliate of the League or any other Person. Infurtherance, and not in limitation, of the foregoing, the League shall not:

(a) authorize or permit any Person other than the Board of Governors to acton its own behalf with respect to matters (other than matters customarily delegated toothers under powers of attorney or matters otherwise delegated herein) for which alimited liability company's members or managing member would customarily beresponsible;

(b) fail (i) to maintain or cause to be maintained by an agent under theLeague's control physical possession of all its books and records, (ii) to maintain


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capitalization adequate for the conduct of the League Business, (iii) to account for andmanage all of its liabilities separately from those of any other Person, including paymentby it of administrative expenses and taxes, other than income taxes, from its own assets,or (iv) to identify or cause to be identified separately all of its assets from those of anyother Person;

(c) except as contemplated by Section 4.03 or Section 4.05, commingle, orpermit the commingling of, its funds with the funds of any Member or any Affiliate ofany Member or use its funds for other than the League's uses; or

(d) maintain, or permit the maintenance of, joint bank accounts or otherdepository accounts to which any Member would have independent access.Section 2.11 No Personal Liability. Except as provided by the Delaware Act,no Member or Governor shall be personally liable for any obligations of the League solely by

reason of being a Member or Governor. Except as specifically provided in Article IV, noMember shall have any obligation or be required to make any Capital Contribution or loan orotherwise advance any funds to the League.

ARTICLE IIIMEMBERS

Section 3.01 Classes. The limited liability company interests in the Leagueshall be divided into three (3) classes of membership units (the "Membership Units"), class Amembership units ("Class A Membership Units"); class B membership units ("Class BMembership Units") and class C membership units ("Class C Membership Units"), each havingthe relative rights, powers and duties set forth in this Agreement. The Board of Governors maycreate new Classes and determine the relative rights and responsibilities of such Classes upon aSupermajority Vote.

Section 3.02 Membership Units. (a) All Membership Units of each class shallhave identical rights and obligations in all respects as all other Membership Units of such class.Each Member's Membership Units shall be as set forth on Schedule A, as amended from time totime in accordance with Section 2.01(b), indicating the number and class of Membership Unitsrepresented thereby, the issuance date thereof, the Equity Percentage Interest represented by suchMembership Units and the amount contributed by each Member to the capital of the League, andif deemed necessary or useful by the League, the Membership Units shall be represented bycertificates issued by the League in the name of such Member. Each Member hereby agrees thatits Membership Interest in the League and in its Membership Units shall for all purposes bepersonal property.

NYDOCS02/849007.9 17

(b) Each Class A Member shall be granted Class A Membership Units havingthe terms set forth herein. Notwithstanding anything to the contrary, at no time shall theaggregate Equity Percentage Interest of all of the Class A Members equal less than ninety-sevenand fifty-one hundredths percent (97.51 %).

(c) Each Class B Member shall be granted Class B Membership Units havingthe terms set forth herein. Notwithstanding anything to the contrary, at no time shall the


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aggregate Equity Percentage Interest of all of the Class B Members equal more or less than oneand ninety-nine hundredths percent (1.99%) (the "Class B Equity Interest"); provided, however,that the Class B Equity Interest may be reduced in connection with Third Party investments inthe League (other than the admission of New Class A Members) only to the extent that theMembership Interests of each Member are reduced on apro rata basis; and provided, further,that the Class B Equity Interest may only be reduced below one percent (1%) if a Third Partyacquires all of the Membership Interests in the League. Notwithstanding any other provision ofthis Agreement, no additional Class B Membership Units shall be issued without the priorwritten consent of the Class B Member.

(d) Each Class C Member shall be granted Class C Membership Units havingthe terms set forth herein. Notwithstanding anything to the contrary, at no time shall theaggregate Equity Percentage Interest of all of the Class C Members equal more than one-half ofone percent (0.5%) (the "Class C Equity Interest").

Section 3.03 Admission ofInitial Members. Upon the execution of the OriginalLLC Agreement, each Initial Class A Member was admitted to the League as a Class A Memberand WSII was admitted to the League as a Class B Member. Upon the execution of the FirstAmended LLC Agreement, each Person whose name appears on Schedule A hereto as a Class CMember was admitted to the League as a Class C Member. The League has issued that numberof Class A Membership Units to each Initial Class A Member; that number of Class BMembership Units to each Class B Member; and that number of Class C Membership Units toeach Class C Member set forth opposite each Member's name on Schedule A.

Section 3.04 Admission of Additional Members. (a) Membership Units may beissued from time to time insuch amount and upon such terms as the Board of Governors maydetermine by a Supermajority Vote, including Class A Membership Units which may be issuedfrom time to time in connection with the admission of a Class A Member to the League tooperate an Expansion Team upon a Supermajority Vote. The Board of Governors may admit anyPerson as a new Class A Member in accordance with this Section 3.04, Section 5.06,Section 5.13 and Article IX (in each case, a "New Class A Member"). New Class A Membersshall participate in the management, profits, losses and distributions of the League upon theterms and subject to the conditions of this Agreement with such amendments as are approved bya Supermajority Vote. Each such New Class A Member shall be admitted as a Class A Memberat the time such Person (i) has satisfied any conditions and requirements of the League andreceived the approval by a Supermajority Vote pursuant to this Agreement; (ii) executes anddelivers a written agreement to become a party to and be bound by this Agreement and theOperating Agreement and (iii) is named as a Class A Member on Schedule A. In the eventadditional Class A Membership Units shall be issued to any Person, such Person shall beadmitted as a Member in accordance with this Section 3.04, Section 5.06, Section 5.13 andArticle IX and the Commissioner shall amend Schedule A accordingly. Any Initial CapitalContribution to be made by such Person in exchange for Class A Membership Units, includingnew Class A Membership Units for Expansion Teams, shall be in the form and amountdetermined by a Supermajority Vote, subject to the terms and conditions of this Agreement andthe amount of such Initial Capital Contribution shall be credited to such Person's CapitalAccount.

NYDOCS02/849007.9 18


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(b) Notwithstanding anything to the contrary in this Agreement, the Leagueshall not admit more than five (5) New Class A Members (other than Permitted Transferees) tooperate five (5) Expansion Teams (the "Authorized New Class A Members") in the aggregate forthe Second Season and the Third Season; provided that the League may not admit more thanfour (4) of the Authorized New Class A Members for the Second Season.

(c) The Board of Governors may admit any Person as a new Class C Memberin accordance with this Section 3.04 and Article IX (in each case, a "New Class C Member").Each such New Class C Member shall be admitted as a Class C Member at the time such Person(i) has satisfied any conditions and requirements of the League and received the approval by aSupermajority Vote pursuant to this Agreement; (ii) executes and delivers awritten agreement tobecome a party to and be bound by this Agreement and (iii) is named as a Class C Member onSchedule A. In the event additional Class C Membership Units shall be issued to any Person,such Person shall be admitted as a Member in accordance with this Section 3.04 and Article IXand the Commissioner shall amend Schedule A accordingly. Any Capital Contributions to bemade by such Person in exchange for Class C Membership Units (the "Class C MemberPayment") shall be in the form and amount determined by a Supermajority Vote, subject to theterms and conditions of this Agreement and the amount of such Class C Member Payment shallbe credited to such Person's Capital Account.

(d) The League and each of the New Class A Members shall enter into theOperating Agreement and deliver to the other parties thereto the executed counterparts of suchOperating Agreement, substantially in form and substance of Exhibit A attached hereto and inaccordance with such terms as the Board of Governors may determine from time to time bySupermajority Vote. If a New Class A Member fails to execute a copy of such OperatingAgreement within five (5) Business Days following the date set by a Supermajority Vote (a"Failed Signatory"), then the Board of Governors shall have the right, in its sole discretion, by aSupermajority Vote (excluding the vote of the Governor designated by the Failed Signatory) to(i) extend the signing date for such Operating Agreement, (ii) suspend such Failed Signatory'sright to (A) vote, to designate a Governor to the Board of Governors and the right of suchGovernor to vote in respect of any matters requiring the vote of the Board of Governors or(B) any distributions declared in respect of its Class A Membership Units, in each case ofclauses (A) and (B) until such Operating Agreement shall have been executed, (iii) impose suchadditional penalties as the Board of Governors deems appropriate, or (iv) elect for such FailedSignatory's Membership Interest and Team Assets to be deemed assigned to the League withoutany additional action by such Class A Member, and for such Membership Interest to remainoutstanding or be cancelled at the League's sole discretion, and the Failed Signatory shallthereafter have no Membership Interest and shall no longer be a Member.

NYDOCS02f849007.9 19

Section 3.05 Members' Voting Rights. (a) Each Class A Member shall beentitled to vote based on the Class A Membership Percentage held by such Class A Memberupon all matters upon which Class A Members have the right to vote. Class A Members shallhave the right to vote separately as a class on any matter on which the Class A Members have theright to vote regardless of the voting rights of any other class or series of.Membership Units ..

(b) Class B and Class C Members shall not be entitled to any voting rights,except as otherwise provided by Law.


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Section 3.06 Resignation of a Member. (a) As contemplated by Section 18-603of the Delaware Act, no Class A Member may resign from the League prior to the dissolutionand winding up of the League, except as set forth in Section 9.06 or upon the earlier to occur of(i) the end ofthe Third Season; or (ii) such date approved by a Supermajority Vote. Noresignation shall be effective unless (i) the resigning Class A Member notifies the Board ofGovernors in writing 120 days' prior to the beginning of any Season in which the resigningClass A Member will not hold a Membership Interest in the League and will not operate a Teamin the League, and (ii) in no event, later than 30 days after such notice, the resigning Class AMember shall have (A) made full payment of all debts owed to the League and any otherMembers in connection with League related loans, if any, including payment in full of anyadditional Capital Contributions which were called in accordance with Section 4.05, (B) assignedto the League all rights as such resigning Member or its affiliated Team may have or claim tohave to the funds and property rights of the League, and (C) assigned to the League any and allof the assets, rights and agreements necessary or incidental to the operation of its Team(including the stadium lease, broadcasting contracts and concessionaire contracts) as suchClass A Member or its affiliated Team may have or claim to have that are not part of the Class AMember's Membership Interest but not any other individual property and/or assets (whether real,intangible or otherwise) of the Class A Member that are not related to the Team, the League orits operations (collectively, the "Team Assets"). The League shall assume all such Team Assets,and the Commissioner shall have the power to deal with and dispose of any contracts or rights ofsuch Class A Member or its affiliated Team. Upon the effective date of resignation, theresigning Class A Member and its affiliated Team shall (a) hold no further Membership Interest,(b) cease to be a Class A Member, (c) cease to have the right to operate a Team in the Leagueeither directly or indirectly through an Affiliate and (d) cease to have any rights with respect tothe Team Assets and the Membership Interest of such Class A Member shall be deemed to beautomatically assigned to the League, and shall remain outstanding or be cancelled at theLeague's sole discretion. Notwithstanding anything to the contrary in this Section 3.06, in theevent Anschutz resigns from the League in accordance with Section 9.06 then the disposition ofthe Team Assets with respect to the Anschutz Team and the rights of Anschutz in connectiontherewith shall be as set forth in Section 9.06.

(b) As contemplated by Section 18-603 of the Delaware Act, no Class B orClass C Member may resign from the League prior to the dissolution and winding up of theLeague.

(c) Notwithstanding anything to the contrary in Section 3.06(a), at any timeprior to the execution of a collective bargaining agreement with a players' union, a Member may,without penalty, withdraw from the League upon written notification to the League Office andBoard of Governors in the event that the League or such Member is subject to or is substantiallythreatened with a material labor-related litigation with projected damages and projected legalfees in excess of the sum of the (i) Initial Capital Contribution of such Member, and (ii) anyadditional Capital Contributions made by such Member; provided; however, a Memberwithdrawing in accordance with this Section 3.06(c), shall not be entitled to any distributions orpayment from the League for the value of such Member's Membership Interest in the League,including such Member' spro rata portion of the Bond or any Capital Contribution paid by suchMember.

NYDOCS02/849007,9 20


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Section 3.07 Team Business Plan. On or prior to 60 days' prior to the beginningof each Season, each Class A Member shall provide to the League in writing an annual businessand marketing plan and an annual budget for its Team prepared in accordance with therequirements set forth in the Operating Agreement. On or prior to 30 days following eachcalendar month, each Member shall provide a monthly financial report to the League regardingsuch Member's financial and operating results of the Team for the previous calendar monthprepared in accordance with the requirements set forth in the Operating Agreement. The Leaguemay at any time request from a Member such additional financial and/or operational informationas it believes is reasonably required to demonstrate such Member's adherence to its annualbusiness and marketing plan or annual budget.

Section 3.08 Waiver of Fiduciary Duties. This Agreement is not intended to,and does not, create or impose any fiduciary duty on any of the Members hereto or theirrespective Affiliates. Further, the Members hereby waive any and all fiduciary duties that,absent such waiver, may be implied by Law, and in doing so, recognize, acknowledge and agreethat their duties and obligations to one another and to the League are only as expressly set forthin this Agreement.

Section 3.09 Representations and Warranties of Each Member. Each Memberseverally, but not jointly, represents and warrants to the League and each other Member as of thedate hereof (or as of the date of such Person's admission as a Member) as follows:

(a) Organization and Authority. It is duly incorporated or organized, validlyexisting and in good standing under the Laws of the jurisdiction of its incorporation ororganization and has all necessary power and authority to enter into this Agreement andeach Additional Agreement to which it will be party, to carry out its obligationshereunder and thereunder and to perform the actions contemplated hereby and thereby.Such Member is duly licensed or qualified to do business and is in good standing in eachjurisdiction in which the properties owned or leased by it or the operation of its businessmakes such licensing or qualification necessary, except to the extent that the failure to beso licensed or qualified would not prevent or materially hinder the performance of theactions contemplated by this Agreement and each Additional Agreement to which it willbe party. The execution and delivery of this Agreement, and upon its execution eachAdditional Agreement to which it will be party, by such Member, the performance by itof its obligations hereunder and thereunder and the performance by it of the actionscontemplated hereby and thereby have been duly authorized by all requisite action on itspart. This Agreement has been, and upon its execution each Additional Agreement towhich it will be party shall be, duly executed and delivered by such Member, and(assuming due authorization, execution and delivery by the other Members signatoryhereto and thereto) this Agreement constitutes, and upon its execution each AdditionalAgreement to which it shall will be party shall constitute, a legal, valid and bindingobligation of such Member enforceable against it in accordance with its terms subject tothe effect of any applicable bankruptcy, insolvency, reorganization, moratorium orsimilar Laws affecting creditors' rights and remedies generally, and subject, as toenforceability, to the effect of general principles of equity, including principles ofcommercial reasonableness, good faith and fairdealingfregardless of whetherenforcement is sought in a proceeding at Law or in equity).

NYDOCS02/849007.9 21


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(b) No Conflict. The execution, delivery and performance of this Agreement,and each Additional Agreement to which it will be party, by such Member do not andwill not (a) violate, conflict with or result in the breach of any provision of its charter orby-laws (or similar organizational documents) governing such Member, (b) conflict withor violate any Law applicable to such party or any of its assets, properties or businessesor (c) conflict with, result in any breach of, constitute a default (or event which with thegiving of notice or lapse of time, or both, would become a default) under, require anyconsent under, or give to others any rights pursuant to, any contract, agreement orarrangement by which such party is bound, except to the extent that any conflict under (b)or (c) above would not prevent or materially hinder the performance of the actionscontemplated by this Agreement and each Additional Agreement to which it will beparty.

(c) Governmental Consents and Approvals. The execution, delivery andperformance of this Agreement, and each Additional Agreement to which it will be party,by such Member do not and will not require any consent, approval, authorization or otherorder of, action by, filing with or notification to, any governmental authority.Section 3.10 Representations and Warranties of Class A and Class C MembersRegarding Financial Condition, Investment in the League and Additional Agreements. EachClass A and Class C Member, severally, but not jointly, represents and warrants to the Leagueand each other Member as of the date hereof (or as of the date of such Person's admission as aMember) as follows:(a) Statement of Financial Condition and Other Information. Such Class AMember has provided to WSII (in the event of the Initial Class A Members) or the

League and or an independent third party accounting firm designated at the solediscretion of the League, pursuant to appropriate confidentiality agreements, anyfinancial, organizational and/or background documentation, and has agreed to cooperatein any investigation thereof, that is reasonably necessary to facilitate the League indetermining the suitability of such Class A Member to participate in the League as aMember, including without limitation acceptable documentation, in a form reasonablysatisfactory to the League, that demonstrates (i) such Class A Member's financial abilityto cover potential losses, liabilities and obligations over a three (3) year period from thedate hereof for the operation of a Team (each a "Statement of Financial Condition") and(ii) that such Class A Member's organization is structured in a manner adequate in thesole discretion of the League to appoint a Governor to the Board of Governors and tofacilitate unified decision-making by such Class A Member. Each Class A Memberrepresents that, as of the date of this Agreement, such Class A Member, its parent entityand the individuals who are, or who are committed to be, the ultimate beneficial ownersof the Class A Member or the parent entity (the "Investor Group") in the aggregate haveliquid assets and net worth in excess of$7,500,000. At any time after the date of thisAgreement, any Person who is to be admitted to the League as a Class A Member shallprovide the necessary Statement of Financial Condition as determined by the Board ofGovernors.

NYDOCS02/849007.9 22


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(b) Investment in the League. (i) Such Class A or Class C Member has suchknowledge and experience in financial and business matters as to be capable ofevaluating the merits and risks of its investment;

(ii) The League has made available to the Class A or Class C Memberthe opportunity to ask questions and to receive answers, and to obtain informationnecessary to evaluate the merits and risks of this investment, and the Class A or Class CMember believes it has received all the information it considers necessary or appropriatefor deciding whether to make an investment in the League;

(iii) Such Class A or Class C Member is aware that it may have to bearthe economic risk of such investment for an indefinite period of time or to suffer acomplete loss of its investment in the League;

(iv) Such Class A or Class C Member is an "accredited investor"within the meaning of Rule 501(a) of Regulation D under the Securities Act and theClass A or Class C Member understands, acknowledges and agrees that, in reliance onthat representation, its Membership Interest has not been registered under (and that theLeague has no present intention to register such Membership Interest under) theSecurities Act or applicable state securities Laws and that the offering and sale of suchMembership Interest is being made in reliance on the exemption from the registrationrequirements provided by Section 4(2) of the Securities Act and the regulations'promulgated thereby and analogous provisions or certain state securities Laws or inaccordance with Regulation S under the Securities Act, and that such MembershipInterest may not be sold or otherwise transferred by the Class A or Class C Memberunless the Membership Interest has been registered under the Securities Act andapplicable state securities Laws or are sold or transferred in a transaction exempttherefrom;

(v) Such Class A or Class C Member understands that no publicmarket now exists for any of the securities issued by the League and that it is unlikelythat a public market will ever exist for its Membership Interest; and(vi) Such Class A or Class C Member has received and reviewed thisAgreement and the Additional Agreements, and such Class A or Class C Member, its

attorney and its accountant have had access to, and an opportunity to review alldocuments and other materials requested of, the League and have been given anopportunity to ask any and all questions of, and receive answers from, the Leagueconcerning the terms and conditions of the offering and to obtain all information it orthey believe to be necessary or appropriate to verify the accuracy of this Agreement, theAdditional Agreements and any other documents and materials requested of the Leagueand to evaluate the suitability of its investment in the Membership Interest; and inevaluating the suitability of its investment in the Membership Interest, it and they havenot relied upon any representations or other information (whether oral or written) otherthan as set forth in the documents and answers referred to above. - - -

NYDOCS02/849 007.9 23


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Section 3.11 Players Allocation and Draft. The mechanics of the allocation anddrafting of Players shall have been approved by a Supermajority Vote by no later thanSeptember 15, 2008.

Section 3.12 Anschutz Agreements. (a) Each of the Class A Members herebyacknowledges and agrees that: (i) Anschutz intends to use the "Track and Field" venue at TheHome Depot Center as the home field for the Anschutz Team, (ii) such venue will not, in certainrespects, satisfy all minimum stadium requirements currently contemplated to be set forth in theOperating Agreement, (iii) Anschutz shall not be required to upgrade such venue to satisfy suchminimum requirements; provided, however, Anschutz (or its Affiliates) shall provide portabletoilet facilities reasonably satisfactory to the League and Anschutz, (iv) Anschutz shall use itscommercially reasonable efforts to cause any Playoff Game to be hosted by the Anschutz Teamto be played in The Home Depot Center soccer stadium; provided, however, if Anschutz isunable to host such game( s) in The Home Depot Center soccer stadium, then such game(s) maybe played at the "Track and Field" venue, (v) Anschutz shall use its commercially reasonableefforts to cause any Championship Game to be hosted by the Anschutz Team to be played in TheHome Depot Center soccer stadium; provided, however, if Anschutz is unable to host theChampionship Game in The Home Depot Center soccer stadium, then the Championship Gameshall be played at a venue designated by the League; provided, further, that Anschutz shall not berequired to incur any additional costs or expenses (other than ordinary team travel costs)resulting from the change of location to an alternative venue by the League, and (vi) theforegoing shall have been set forth in necessary detail in the Operating Agreement entered intoby and between the League and AEG L.A. Women's Soccer, LLC.

(b) Each of the Class A Members hereby further acknowledges and agreesthat: (i) Anschutz may, in its reasonable discretion, utilize existing personnel of Anschutz or itssoccer-related Affiliates in connection with the operation of the Anschutz Team (including,without limitation, the position of general manger), (ii) such utilization may not satisfy theminimum staffing requirements currently contemplated to be set forth in the OperatingAgreement with respect to fully dedicated personnel, (iii) Anschutz shall not be required tocomply with such minimum staffing requirements; provided, however, Anschutz shall use allcommercially reasonably efforts to ensure that the Anschutz Team is operated and managed in amanner that otherwise satisfies in all material respects the operational and functionalrequirements for each Team under the Operating Agreement, and (iv) the foregoing shall havebeen set forth in necessary detail in the Operating Agreement entered into by and between theLeague and AEG L.A. Women's Soccer, LLC.

Section 3.13 Class B Member. Except as otherwise specifically provided in thisAgreement, each Class A Member agrees that no rights of a Class B Member hereunder,including such Class B Member's rights to distributions under Article VII, shall be modified inany manner adverse to the Class B Member without the prior written consent of the Class BMember.

Section 3.14 IP Cross-Licenses. (a) The League hereby grants to each Membera royalty-free, non-exclusive, non-sub-licensable and non-transferable right and license to usenames and marks owned by the League for the purpose of promoting and advancing the interestsof the League and the Members, and obtaining additional investments in the League and Member

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designated by such Defaulting Class A Member to the Board of Governors shall no longer havethe power to vote in respect of any matters requiring the vote of the Board of Governors for theperiod during which such Initial Contribution Default continues. If a Class A Member does notcease to be a Defaulting Class A Member within 60 days following the Initial Contribution Date,unless the Board of Governors by a Supermajority Vote (excluding the vote of the Governordesignated by such Defaulting Class A Member) has determined to extend the payment date forsuch Initial Capital Contribution or waived the provisions of this Section 4.01(b), suchDefaulting Class A Member's Membership Interest and Team Assets shall be automaticallyassigned to the League without any additional action by such Class A Member, and suchMembership Interest shall remain outstanding or be cancelled at the League's sole discretion,and the Defaulting Class A Member shall thereafter have no Membership Interest and shall nolonger be a Member; provided, however, that during the period commencing 30 days after theInitial Contribution Date and expiring on the 60th day following the Initial Contribution Date, theBoard of Governors shall have the right, in its sole discretion, by a Supermajority Vote(excluding the vote of the Governor designated by such Defaulting Class A Member) to(i) extend the payment date for such Initial Capital Contribution, (ii) amend, modify or waive theforegoing penalties and/or (iii) impose such additional penalties as the Board of Governorsdeems appropriate, including accruing an interest on such Initial Capital Contribution or anybalance thereof.

(c) Each Class A Member's Capital Contribution shall be deposited in aninterest-bearing account, established by the League that is designated the "Women's Soccer,LLC Operating Account" (the "League Operating Account").

(d) The League Operating Account, once funded, shall be under the soledominion and control of the League, which shall have the sole right to withdraw funds forapplication in accordance with this Agreement and the then current Annual Budget.

(e) No Class A Member shall make additional Capital Contributions to theLeague unless such additional Capital Contributions have been approved by a SupermajorityVote in accordance with Section 5.06.

Section 4.02 Capital Contributions of the Class B and Class C Members. (a)Concurrently with the execution and delivery of this Agreement, WSII shall receive one (1)Class B Membership Unit. WSII shall not make any Capital Contribution to the League andshall have no duties or obligations to make any contribution of capital or payments or loans ofany kind, including any payments in respect of any Capital Call or the Bond, to the League, theMembers or any Third Party, in connection with the League or the League Business, except asotherwise expressly specified in this Agreement.

(b) Following the formation of the League, WSII may continue to operate topromote women's soccer in the United States and other related matters not in conflict withLeague Business. Any distributions received from the League by WSII will be used to furtherthis interest, and will not inure to the benefit of any Person (other than market-based salaries andbenefits ofWSII employeesand contractors).

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(c) In accordance with the First Amended LLC Agreement, the Class CMembers have received, in the aggregate, one-half (0.5) Class C Membership Unit and have theClass C Membership Percentages and Equity Percentage Interests set forth opposite such Class CMembers' name on Schedule A. The Class C Members shall have no duties or obligations tomake any additional Capital Contributions or payments or loans of any kind, including anypayments in respect of any Capital Call or the Bond, to the League, the Members or any ThirdParty, in connection with the League or the League Business, except as otherwise expresslyspecified in this Agreement.

Section 4.03 USSF Bond. (a) From such time as USSF requires that a bond beposted and during the term of the League, the League shall at all times have posted a $2,000,000bond, or such other amount as may be, required by the USSF (the "Bond"). Each Initial Class AMember shall promptly, upon request by the Commissioner, deposit in the League OperatingAccount its pro rata portion in respect of the Bond (the "Pro Rata Bond Amount") in the amountset forth opposite such Initial Class A Member's name on Schedule A.

(b) Subject to a Supermajority Vote, the League may draw against the Bond(a "Bond Drawdown") to fund, on terms and conditions to be determined in its sole discretion,including any terms of repayment, the operations of one (1) or more Teams (each, a "FundedTeam"). In the event of a Bond Drawdown, the League shall:

(i) notify the Governors of the amount the Bond Drawdown and eachClass A Member (other than any Class A Member that is operating a Funded Team) shalldeposit in the League Operating Account its pro rata portion of the amount of the BondDrawdown within 30 days of the date of such notice in order to replenish the Bond (the"Bond Replenishment Amount");

(ii) have the right to manage and operate each Funded Team inaccordance with the Operating Agreement for such Funded Team until such time as theClass A Member that is operating such Funded Team has paid to the League an amountequal to the total aggregate amount of each portion of any Bond Drawdown used to fundits Funded Team (each, a "Return of Bond Drawdown Amount"); and

(iii) upon any Return of Bond Drawdown Amount paid by a Class AMember that is operating a Funded Team to the League, return directly to each Class AMember (other than any Class A Member that is operating a Funded Team) its pro rataportion of such Return of Bond Drawdown Amount in an amount equal to such portion ofthe Bond Replenishment Amount paid by such Class A Member.

(c) In the event that any New Class A Member is admitted to the League,such New Class A Member shall deposit its pro rata portion of the Bond (a, "New BondPayment") in the amount determined by the Commissioner in the League Operating Account onor prior to its admission. Each Class A Member, other than the New Class A Member, shallhave apro rata portion of the New Bond Payment credited to its Capital Account.

. - Sectlol14.04Additional CapitalContTioll.tions.(a} The Class A Membersacknowledge and agree that it may be appropriate from time to time to make additional Capital

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Contributions to the League (each, a "Capital Call") in order to provide working capital for theoperating expenses of the League and for other reasons relating to the conduct of the LeagueBusiness. Such additional Capital Contributions shall be in addition to the Initial CapitalCommitment of each Class A Member. In its discretion, subject to Section 5.06, the Board ofGovernors may, by a Supermajority Vote, elect to make Capital Calls from the Class A Membersat any time, provided that such Capital Calls are used to fund increased League expenses orincreased Team expenses which are incurred pro rata in respect of all the Teams. In the event aCapital Call is made, each Class A Member shall contribute to the League its proportionate shareof the required Capital Call, which proportionate share shall be based on such Class A Member'sClass A Membership Percentage. If a Class A Member does not make such CapitalContribution, such Member shall be deemed to be in default under this Agreement and subject toremedies set forth in Section 4.06.

(b) If a Class A Member makes a Sale to a Permitted Transferee, suchtransferor Class A Member shall be responsible for any additional Capital Contributions whichsuch Permitted Transferee fails to pay.

(c) Notwithstanding anything to the contrary contained herein, Anschutz shallnot be obligated to make any additional Capital Contribution where such Capital Call is intendedto provide working capital for the operating expenses of the League (or for other reasons relatingto the conduct of the League Business) and such expenses are for any period after the AnschutzAcquisition Deadline. For the avoidance of doubt, if a Capital Call is made and a portion thereofis for expenses attributable to the period before the Anschutz Acquisition Deadline, thenAnschutz shall be obligated to pay such portion.Section 4.05 Funding Requirements. (a) The Members agree that that Leagueshall fund its ongoing operations from its cash from its operations and its own borrowings orcredit, Capital Contributions, Revenue Supplements (as defined in the Operating Agreement) and

the Bond. Each Member understands and agrees that WSII and the Class C Members shall nothave any obligation to make any Capital Contributions or pay any fees, payments or loans of anykind to the League.(b) The Members shall be liable only to fund ongoing operations of theLeague pursuant to this Article IV, and no Member shall have any personal liability for the

repayment of any Capital Contribution of any other Member or Transferee. A Member'sobligation to make a Capital Contribution to the League is (within the meaning ofSection 18-502 of the Delaware Act) payable only to the extent, and only in such amounts,required to be paid to the League pursuant to this Agreement.

(c) In the event that the Commissioner determines that additional capital isrequired to support the operations of the League, such capital may be obtained through anyone (1) or a combination of the following means, upon a Supermajority Vote:

(i) revolving credit or other loan facilities provided by unrelatedPersons (such as banks); or(ii) a cash Capital Call.

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(d) In the event that such funding is made in the form a Capital Call, theMembers satisfying such Capital Call shall receive additional Class A Membership Units at aprice per Class A Membership Unit equal to the fair market value of the Membership Units asdetermined by a Supermajority Vote. The League shall notify each Class A Member of theCapital Contribution to be made pursuant to this Section 4.05 by delivering written notice (each,a "Capital Call Notice") to each Class A Member in accordance with Section 13.02 specifying(i) the aggregate amount of the Capital Call required at such time and (ii) the amount of theCapital Contribution to be provided by such Class A Member, which amount shall be the productof (A) the aggregate amount of the Capital Call to be made and (B) a fraction, the numerator ofwhich shall be the aggregate number of Class A Membership Units held by such Member and thedenominator of which shall be the total number of outstanding Class A Membership Units lessany Class A Membership Units held by a Delinquent Class A Member (for each Class AMember, its "Pro Rata Portion"). Each Class A Member shall deposit its Pro Rata Portion of acash Capital Call in immediately available funds by wire transfer or other similar means to theLeague Operating Account or such other bank account designated by the League in the CapitalCall Notice prior to the close of business on the tenth Business Day following the date ofdelivery of such Capital Call Notice.

Section 4.06 Delinquent Members. (a) In the event any Class A Member failsto timely fulfill its obligations to fund a Capital Call, each of the Class A Members will receive anotice (a "Delinquency Notice") from the League that such Class A Member has failed to meetits funding obligations (a "Funding Shortfall"). If such shortfall continues for 30 days afterreceipt of the Delinquency Notice, such Class A Member shall be designated as a "DelinquentClass A Member" and such Delinquent Class A Member shall have no further right to vote, todesignate a Governor to the Board of Governors or to any distributions declared in respect of itsClass A Membership Units for the period during which such Funding Shortfall continues, andthe Governor designated by such Delinquent Class A Member to the Board of Governors shallno longer have the power to vote in respect of any matters requiring the vote of the Board ofGovernors for the period during which such Funding Shortfall continues. If a Member does notcease to be a Delin

Borislow ExhibitA-LeagueLLCAgreement

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Transcript of Borislow ExhibitA-LeagueLLCAgreement