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Exhibit 10.37    
    


 
 

ASSET PURCHASE AGREEMENT    
    


        This
Asset Purchase Agreement is entered into effective as of August 1, 2003, by and among LECG, LLC, a California limited liability company
("Purchaser"), LECG Holding Company, LLC, a California limited liability company ("Parent"), BLDS, LLC,
a Delaware limited liability corporation ("Seller"), Dr. Bernard R. Siskin, Dr. Leonard A. Cupingood, Dr. David W. Griffin and
Dr. Samuel J. Kursh (each a "Selling Member" and collectively the "Selling Members"). 


 
 

RECITALS    
    


        A.    Seller is a newly organized limited liability company formed by the Selling Members in connection with the distribution of
assets to the Selling Members by the Center for Forensic Economic Studies, a Pennsylvania corporation ("CFES"), in redemption of their ownership
interest in CFES. 


        B.    Through CFES, the Selling Members provided economic consulting services to law firms, government agencies and
institutional clients in the United States and throughout the world. 



        C.    Seller desires to sell to Purchaser, on the terms and conditions set forth herein, certain of the operating assets of
Seller. 


        D.    Purchaser desires to purchase those operating assets of Seller and is prepared to assume certain specified liabilities and
obligations of Seller on the terms and conditions set forth herein. 


        E.    The Selling Members own all of the outstanding ownership interests in Seller and desire that the transactions described in
this Agreement be consummated. 


        F.     In connection with the purchase and sale of certain of the operating assets, Purchaser will also retain the services of
the Selling Members as employees of Purchaser pursuant to the terms of that certain Director Service Agreement and that certain Director Practice Purchase Agreement, both by and among the Purchaser
and the Selling Members dated as of the date hereof (collectively, the "Service Agreement"). 


 
 

AGREEMENT    
    


        In consideration of the mutual covenants, agreements, representations and warranties contained in this Agreement and the Service Agreement, and for other good and
valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: 


1.    Certain Definitions.  


        As used herein, the following terms shall have the meanings indicated. 


        "Allocation Schedule"    has the meaning given in Section 3.1. 



        "Assumed Liabilities"    has the meaning specified in Section 2.2. 


        "Closing"    has the meaning specified in Section 6.1. 


        "Closing Date"    has the meaning specified in Section 6.1. 


        "Code"    means the Internal Revenue Code of 1986, as amended. 



        "Contracts"    has the meaning set forth in Section 7.8. 


        "Documents"    has the meaning set forth in Section 2.1.7. 


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        "Effective Date"    has the meaning set forth in Section 2.2. 



        "Enforceability Limitations"    means (i) bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect affecting or limiting the enforcement of creditors' rights generally and (ii) the discretion of the appropriate court with respect to specific performance, injunctive relief
or other equitable remedies. 


        "Employee Benefit Plan"    means all plans, contracts, schemes, programs, funds, commitments or arrangements providing money,
services, property, or other benefits, whether written or oral, formal or informal, qualified or non-qualified, funded or unfunded and including any that have been frozen or terminated,
which pertain to any employee, former employee, partner, consultant or independent contractor of CFES and identified on Schedule 7.12.


        "ERISA"    means the Employee Retirement Income Security Act of 1974, as amended. 


        "Excluded Assets"    shall mean (i) cash, cash equivalents, accounts receivable and unbilled time and expenses held by
CFES or the Seller that is attributable to the business conducted by the Selling Members and outstanding on the Effective Date, (ii) fixed assets other than those listed on  Schedule 2.1.2,
(iii) tax and accounting records of Seller, (iv) any personal goodwill of the Selling Members, and (v) the
Software. 


        "Excluded Liabilities"    has the meaning given in Section 2.3. 


        "Financial Statements"    has the meaning specified in Section 7.4. 


        "Fixed Assets"    has the meaning specified in Section 2.1.2. 


        "Governmental Body"    means any foreign, federal, state, local or other governmental authority or regulatory body. 



        "Hired Employees"    has the meaning given in Section 5. 


        "Intellectual Property"    means (a) all copyrightable works, all copyrights, and all applications, registrations and
renewals in connection therewith, (b) all trade secrets and confidential business information (including, without limitation, all research, techniques, models, databases, specifications,
customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (c) all computer software (including related documentation), (d) all other
proprietary rights of Seller, (e) all copies and tangible embodiments of Intellectual Property (in whatever form or medium), and (f) any remedies against infringements thereof and rights
to protection of interest therein under the laws of all jurisdictions (including foreign jurisdictions) of Seller; provided, however, that in no event shall Intellectual Property include goodwill
associated with the business of Seller or that conducted by any of the Selling Members which constitutes, or is part of, Personal Goodwill. 


        "Interim Financial Statement"    has the meaning specified in Section 7.4. 



        "Interim Financial Statement Date"    has the meaning specified in Section 7.4. 


        "Leases"    has the meaning specified in Section 6.2.7 


        "Liability"    shall mean any debt, liability, commitment and guaranty, warranty or obligation of any kind, character or nature
whatsoever, whether known or unknown, secured or unsecured, accrued, fixed, absolute, potential, contingent or otherwise, and whether due or to become due. 



        "Liens"    has the meaning specified in Section 7.6. 


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        "Material"    and "Materially" or any variation thereof, means, (i) with
respect to an obligation, contract, commitment or Lien, any obligation, contract, commitment or Lien that requires an expenditure of more than $25,000 (ii) and, with respect to any other event
or circumstance, an event or circumstance that would have an adverse effect on the operations, employee or client relations, properties, assets (including intangible assets), liabilities (contingent
or otherwise), financial condition or results of operations of Seller. 


        "Person"    means any individual, corporation, partnership, joint venture, limited liability company, association, joint-stock
company, trust, unincorporated organization or governmental body. 


        "Personal Goodwill"    means the goodwill associated with the personal and business relationships developed by each of the
Selling Members as a result of the skill, ability, integrity, reputation and personal characteristics of each of the Selling Members.


        "Purchaser Funds"    has the meaning given in Section 9.4.2. 


        "Purchase Price"    has the meaning set forth in Section 3.1. 


        "Purchaser Party"    has the meaning given in Section 13.1. 



        "Retained Business Records"    has the meaning set forth in Section 9.5. 


        "Seller Funds"    has the meaning given in Section 9.4.3. 


        "Seller Party"    has the meaning given in Section 13.2. 


        "Service Agreement"    has the meaning specified in recital E to this Agreement. 



        "Software"    means the software licensed to the Purchaser pursuant to the Software License Agreement substantially in the form
of Exhibit G.


        "Tax"    (and "Taxes") means (i) any federal, state, local or foreign net
income, alternative or add-on minimum, gross income, gross receipts, property, sales, use, transfer, gains, license, excise, employment, payroll, withholding or minimum tax; or
(ii) any other tax custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or any penalty thereon, addition to tax or additional
amount imposed by any Governmental Body. 


        "Territory"    has the meaning given in the first recital to this Agreement. 


        "Transfer"    has the meaning set forth in Section 2.1. 


        "Transferred Business Records"    has the meaning set forth in Section 9.5. 



        "WARN Act"    has the meaning given in Section Error! Reference source not
found.. 


        "Year-End Financial Statements"    has the meaning specified in Section 7.4. 


2.    Sale And Purchase Of Assets.  


        2.1    Purchased Assets.    Subject to the terms and conditions of
this Agreement and to the continued accuracy of the representations and warranties contained herein, on the Closing Date, Seller shall sell, convey, assign, transfer and deliver
("Transfer") to Purchaser and Purchaser shall purchase, receive and accept delivery from Seller, free and clear of all Liens, all of Seller's then
existing properties and assets (other than the Excluded Assets) of every kind and nature, real, personal or 


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mixed,
tangible or intangible, wherever located (collectively, the "Purchased Assets"), including, without limitation, all right, title and interest of
Seller in, to and under: 



        2.1.1 All
of the assets reflected on the Interim Financial Statement, other than the Excluded Assets and those assets disposed of after the Interim Financial Statement Date
in the ordinary course of business consistent with past practice (including with respect to quantity and frequency); 


        2.1.2 All
equipment, furniture, trade fixtures and other tangible personal property owned by Seller, including, without limitation, those items listed on  Schedule 2.1.2 attached hereto and incorporated
herein by this reference (the "Fixed Assets");
 


        2.1.3 All
of the Contracts; 


        2.1.4 All
rights to payment as a consequence of (a) deposits and prepayments including, without limitation, the deposit under the Lease, listed on  Schedule 2.1.5 attached hereto and incorporated herein
by this reference and (b) any refunds, rights of set off, rights of recovery, and
claims or causes of action relating to the Purchased Assets that arise after the Closing (except for refunds of Taxes to the extent provided in Section 9.3); 


        2.1.5 Cash
in an amount equal to all client retainer balances which remain outstanding as of the Closing Date; 



        2.1.6 All
creative materials, advertising and promotional materials necessary or used in connection with the business of Seller or any of the Selling Members, wherever
stored or located; 


        2.1.7 All
files, documents, correspondence, studies, reports, books and records of Seller (including all data and other information stored on discs, tapes or other media),
client lists, client records and credit data, computer programs, software, and hardware owned or used in connection with the business of Seller or any of the Selling Members (collectively, the
"Documents"); 


        2.1.8 All
general intangibles used by the Seller that is not an Excluded Asset; and 


        2.1.9 All
other assets of Seller, whether or not reflected on the books or records of the Seller. 




        2.2    Assumed Liabilities.    On the Closing Date, Purchaser will
deliver to Seller the Instrument of Assumption pursuant to which Purchaser will assume and agree to perform, discharge and satisfy, in accordance with their respective terms and subject to the
respective conditions thereof, only the following Liabilities of Seller (the "Assumed Liabilities") (i) all Liabilities of Seller incurred or
arising on or after August 1, 2003 (the "Effective Date") under the Contracts and the Lease; (ii) any Liabilities in respect of Taxes for
which Purchaser is liable under Section 9.3 hereof; and (iii) all other Liabilities of Seller and the Transfer that relate to any period of time on or after the Effective Date. 


        2.3    Excluded Liabilities.    Notwithstanding anything to the
contrary contained in this Agreement, Purchaser will not assume or be liable for and Seller will retain and remain responsible for, all of Seller's Liabilities, other than the Assumed Liabilities,
(the "Excluded Liabilities"). Without limiting the scope of Excluded Liabilities under this Section 2.3, Excluded Liabilities will specifically
include (i) any Liabilities in respect of Taxes for which Seller is liable pursuant to Section 9.3 hereof; (ii) any costs and expenses incurred by Seller or the Selling Members
incident to the negotiation and preparation of this Agreement and its performance and compliance with the agreements and conditions contained herein; (iii) any and all Liabilities of CFES,
Seller and Selling Members, as applicable, arising out of (a) any actions or omissions of employees, consultants, independent contractors and experts in connection with the performance of
services for clients of CFES prior to the Effective Date, (b) any workers' compensation claims of Hired Employees based on injuries initially occurring prior to the Effective Date regardless of
the date on which the claim was filed or whether subsequent injuries occur, (c) the Worker Adjustment and Retraining Notification Act, 29 U.S.C.  § 2102 et seq (the "Warn Act"), and 


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(d) any
Employee Benefit Plan, except to the extent necessary to ensure the continuation of benefits to Hired Employees up to and including the Effective Date. 


3.    Consideration.  


        3.1    Purchase Price; Agreed Allocation.    The purchase price for
the Purchased Assets (the "Purchase Price") is Three Hundred Thousand Dollars ($300,000). On or before the Closing, Purchaser and Seller will agree upon
and execute a final allocation schedule (the "Allocation Schedule"), which will be reasonable and prepared in accordance with Section 1060 of the
Code and the regulations thereunder.
Promptly following the Closing, Purchaser and Seller each agree to file Internal Revenue Service Form 8594, and all federal state, local and foreign Tax Returns, in accordance with the
Allocation Schedule. Purchaser and Seller each agree to provide the other promptly with any other information required to complete Form 8594. 



4.    [RESERVED]  


5.    Transfer of Employees.  


        5.1    Hired Employees.    In addition to the employment of the
Selling Members as provided in the Service Agreement, as a condition of closing to this Agreement, Purchaser shall offer employment to all of the employees of CFES listed on  Schedule 5.1 hereto,
such employment to be effective as of the Effective Date; provided that, except as may be provided in agreements with the
Selling Members, this Agreement shall not be deemed to impose upon Purchaser any continuing obligation after the Effective Date to offer such employment to or to employ or continue the employment of,
any employee of CFES, or to maintain the compensation of any employee at any particular level. Seller and the Selling Members shall use commercially reasonable efforts to encourage all the employees
listed on Schedule 5.1 to accept employment with Purchaser. Those employees hired by Purchaser will be referred to herein as the
"Hired Employees." On the Effective Date, Seller will ensure full and final payment to such Hired Employees of all salary, commissions, accrued bonuses,
any severance payments and benefits (including accrued vacation and personal time off) that are vested and payable as of the close of business on the day preceding the Effective Date. Seller and
Purchaser will cooperate to transition the Hired Employees to Purchaser's benefit programs so as to minimize (to the extent reasonably possible) the loss of benefits of the Hired Employees. Each Hired
Employee will be credited with his/her full period of service with CFES for all purposes under Purchaser's employee benefit plan, seniority arrangements, compensation programs and any other
employment-based arrangement that takes duration of employee service into account. 


6.    The Closing.  


        6.1    The Closing.    The
"Closing" means the time at which Seller will effect the sale and transfer of the Purchased Assets in exchange for the Purchase Price to be delivered by
Purchaser pursuant to Section 3 hereof. The Closing will take place at the offices of Purchaser in Washington D.C. on the date and at the time
mutually agreed by the parties. The "Closing Date" shall be the date on which the Closing
occurs. Notwithstanding the foregoing, the Closing of the transactions contemplated by this Agreement shall be retroactively effective for all purposes under this Agreement as of 12:01 a.m. EST
on the Effective Date. 


        6.2    Seller Deliveries at Closing.    Subject to fulfillment or
waiver of the conditions set forth in Section 10 at the Closing, Seller will execute and/or deliver to Purchaser all of the following: 



        6.2.1 An
Officer's Certificate of Seller dated the Closing Date, in form and substance reasonably satisfactory to Purchaser (i) attaching true and correct copies of
resolutions of the Board of Managers of Seller and of the Selling Members authorizing the execution and 



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performance
of this Agreement and the transactions contemplated hereby; and (ii) containing incumbency certificates for the individuals authorized to execute this Agreement and all related
agreements on behalf of Seller; 


        6.2.2 A
Bill of Sale substantially in the form of Exhibit A hereto duly executed by Seller; 



        6.2.3 An
Instrument of Assignment and Assumption substantially in the form of Exhibit B hereto duly executed by
Seller; 


        6.2.4 An
opinion of counsel to Seller substantially in the form of Exhibit C; 


        6.2.5 Certificates
of title or origin (or like documents) with respect to any property included in the Purchased Assets for which a certificate of title or origin is
required in order to transfer title; 


        6.2.6 The
closing certificate contemplated by Section 10 hereof; 


        6.2.7 Appropriate
documentation reflecting an assignment to Purchaser of all rights and obligations (including all leasehold improvments, fixtures and fittings and all
easements, rights of way and other appurtenants) under (i) that certain Office Lease dated June 16, 1993 by and between CFES and Walnut Street Holdings LP, as amended by that certain
Amendment dated March 29, 2002 for premises at Suite 1200, 1608 Walnut Street, Philadelphia, PA 19103, and (ii) that certain Sublease by and between Seller and Thomas Conaty for space in
Wilmington, Delaware (together, the "Leases"); and 



        6.2.8 Evidence
of executed endorsements, assignments, and other instruments of transfer and conveyance consistent with the terms of this Agreement as may be requested by
Purchaser, in form and substance reasonably satisfactory to counsel for Purchaser, to effectively vest in Purchaser all of the right, title and interest of Seller in the Purchased Assets, free and
clear of all Liens. 




        6.3    Purchaser Deliveries at Closing.    Subject to fulfillment or
waiver of the conditions set forth in Section 11, at the Closing, Purchaser shall execute and/or deliver to Seller all of the following: 



        6.3.1 The
Purchase Price as provided in Section 3.1 by wire transfer of immediately available funds to an account designated by Seller in advance of the Closing Date; 


        6.3.2 An
Officer's Certificate of the Purchaser, dated the Closing Date, in form and substance reasonably satisfactory to Seller (i) attaching a true and correct copy
of an action of Parent, acting in its capacity as the sole member and manager of Purchaser, authorizing the execution and performance of this Agreement and the transactions contemplated hereby; and
(ii) containing incumbency certificates for the individuals authorized to execute this Agreement and all related agreements on behalf of Purchaser; 


        6.3.3 An
Instrument of Assignment and Assumption substantially in the form of Exhibit B duly executed by Purchaser; 


        6.3.4 Appropriate
documentation regarding the assignment of the Leases; and 


        6.3.5 The
Service Agreement, substantially in the form of Exhibit E, duly executed by Purchaser. 



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7.    Representations of Seller and Selling Members.  


        As an inducement to Purchaser to enter into this Agreement and to consummate the transactions contemplated in this Agreement, Seller and each of the Selling
Members jointly and severally represent to Purchaser and agree as of the Closing Date as follows: 



        7.1    Organization and Valid Existence.    Seller is a limited
liability company duly organized and validly existing under the laws of Delaware. Seller has the full power and authority to its business as it is now being conducted and to enter into and perform
this Agreement. 


        7.2    Due Authority.    The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly authorized by the Seller and the Selling Members and no other member consents or approvals are required. This Agreement and
all other agreements and written obligations entered into or undertaken in connection with the transactions contemplated hereby constitute the valid and legally binding obligations of Seller and the
Selling Members enforceable against each of the Seller and the Selling Members in accordance with their respective terms, except as may be limited by the Enforceability Limitations. 


        7.3    No Violations.    Neither the execution or delivery of this
Agreement, the consummation of any of the transactions contemplated hereby, nor the fulfillment of any of the terms hereof, except to the extent disclosed herein or in any Schedule hereto,
(i) will violate or conflict with the Certificate of Formation or Operating Agreement of Seller or any agreement among the Selling Members, (ii) will result in any breach of or any
default (including events of acceleration, termination or cancellation or loss of rights) under any provision of any Contract or any other contract or agreement to which Seller is a party or by which
Seller is bound or to which the Purchased Assets are subject, or (iii) will result in a violation of any statutes, laws, ordinances, rules, regulations or requirements of Governmental Bodies
having jurisdiction over Seller except with respect to subsections (ii) and (iii) for any such breach, default or violation that would not be Material. 



        7.4    Financial Statements.    Seller has delivered to Purchaser
CFES's unaudited balance sheets and the statements of income for the fiscal years ended on March 31, 2000, March 31, 2001, the nine-month period ended December 31,
2001, and December 31, 2002 (collectively, the "Year-End Financial Statements"). The Year-End Financial Statements
present fairly the financial condition of CFES at December 31, 2001, and 2002 and the results of CFES's operations for the calendar years 2001 and 2002. Seller has also delivered to Purchaser
compiled balance sheets and the statements of income of CFES for the six-month period ended June 30, 2003 (the "Interim Financial Statement
Date") (such statement to be referred to as the "Interim Financial Statement"). The Interim Financial Statement presents fairly
the financial condition of CFES as of the Interim Financial Statement Date, and the results of its operations for the period ended the Interim Financial Statement Date on a basis consistent with that
of preceding periods; provided, however, that the Interim Financial Statement (i) is subject to normal year-end adjustments and (ii) lacks notes and other financial statement
presentation items. The Year-End Financial Statements and the Interim Financial Statement are sometimes collectively referred to herein as the "Financial
Statements." The Financial Statements are prepared in accordance with a cash basis method of accounting and are collectively attached as  Exhibit F hereto. 


        7.5    Absence of Certain Changes.    Except (i) as disclosed
in the Financial Statements or in any Schedule delivered pursuant hereto, and (ii) for the execution and delivery of this Agreement, with respect to the Purchased Assets or the Assumed
Liabilities there has not been since the Interim Financial Statement Date any: 



        7.5.1 Material
change, other than changes in the ordinary course of business consistent with past practice; 


        7.5.2 Material
damage, destruction or loss of physical property (whether or not covered by insurance); 



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        7.5.3 sale,
transfer or other disposition of, or agreement to sell, transfer or otherwise dispose of, any assets having a fair market value at the time of sale, transfer or
disposition of $2,000 or more in the aggregate, other than in the ordinary course of business and consistent with past practice; 


        7.5.4 Increase,
or agreement to increase, the compensation or bonuses or special compensation of any kind of any Hired Employee over the rate being paid to them on the
Interim Financial Statement Date, other than merit, incentive, and/or cost-of-living increases made in the ordinary course of business following past practice of CFES, and no
such increases are required by written agreement or oral understanding; or adopted or increased any benefit under any insurance, pension or other employee benefit plan, program or arrangement made to,
for, or with any such Hired Employee or Selling Member; or 


        7.5.5 Any
Material transaction that would create an Assumed Liability not in the ordinary course of CFES's business prior to the Effective Date and consistent with past
practice. 




        7.6    Title to and Condition of Purchased Assets.    Seller has good
and transferable title to, or a valid leasehold interest in, the Purchased Assets free and clear of any mortgage, pledge, conditional sales contract, lien, security interest, right of possession in
favor of any third party, claim or encumbrance (collectively "Liens"), except for Liens described on  Schedule 7.6 (all of which will be removed on or
before the Closing) and except for Taxes for the current tax year which are not yet due and
payable. Seller has all necessary corporate power and authority to transfer ownership of the Purchased Assets to Purchaser free and clear of all Liens. 


        7.7    Real Estate.    The conduct of Seller's business in any
premises occupied by Seller is not in Material violation of any law, statute, ordinance, rule or regulation of any government, governmental body, agency or authority (federal, state, municipal,
foreign or local) applicable to Seller (including, without limitation, those concerned with environmental or occupational safety standards). 


        7.8    Contracts.    Schedule 7.8
contains a complete list of (i) all equipment leases, and contracts pursuant to which services are supplied to CFES that involve the performance or services or the payment in amounts or value
in excess of $10,000 and (ii) all the Selling Members' currently active client engagements, together with a list of billings as the Effective Date (the
"Contracts"). The Contracts to which Seller is a party and the agreements pursuant to which the Selling Members are performing services are valid,
binding and enforceable by each such party in accordance with their respective terms and are in full force and effect. Each of Seller and the Selling Members has complied in all material respects with
all such Contracts and is not in default under any of such Contracts. Neither Seller nor, to the actual knowledge of Seller or the Selling Members, any other party is in default in the observance or
the performance of any Material term or obligation to be performed by it under any such Contract listed in said Schedule 7.8. 



        7.9    Litigation.    There is no litigation, proceeding (arbitral or
otherwise), claim or investigation of any nature pending or, to Seller's or the Selling Members' actual knowledge, threatened against the Purchased Assets, except for any litigation, proceeding, claim
or investigation that would not be Material. There are no writs, injunctions, decrees, arbitration decisions, unsatisfied judgments or similar orders outstanding relating to the Purchased Assets. 


        7.10    Intellectual Property.    Except for the Wage and Disparate
Impact Auditor Software that will be the subject of a separate license agreement in accordance with Section 9.7, neither Seller nor the Selling Members owns or has any rights to any other
Intellectual Property. 


        7.11    Compliance with Laws.    Except as disclosed on any Schedule
hereto, the use of the Purchased Assets and the performance by the Selling Members of their business has complied with and is in compliance with all federal, state, local and foreign statutes, laws,
ordinances, regulations, rules, 


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permits,
judgments, orders or decrees applicable to the Purchased Assets, except where the failure to comply would not be Material. 


        7.12    Employee Benefit
Plans.    Schedule 7.12 contains a true and complete list of all Employee Benefit Plans maintained by CFES as
of the Effective Date. Except as disclosed on any Schedule hereto, the Employee Benefit Plans maintained by CFES have at all times complied in all Material respects with all applicable laws relating
to labor and employee benefits including, without limitation, all applicable provisions of ERISA and the Code, any laws relating to wages, termination pay, vacation pay, fringe benefits, collective
bargaining and the payment and/or accrual of the same and all taxes, insurance and other costs and expenses applicable thereto. 


        7.13    Taxes.    There are no Tax liens on any of the Purchased
Assets. As of the Effective Date, all reports and Tax returns required to be filed by CFES or by Seller have been filed and all Taxes and other charges due or claimed to be due by any Governmental
Body have been paid, except where the failure
to file or pay Taxes would not be Material. CFES has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee or creditor. No
transaction contemplated by this Agreement is subject to withholding under Section 1445 of the Code and no transfer Taxes, real estate transfer Taxes or similar Taxes will be imposed upon the
transfer and sale of the Purchased Assets pursuant to this Agreement. The Seller has not at any time during the Seller's existence owned any subsidiaries. 


        7.14    Insurance.    Schedule 7.14
contains an accurate and complete description of all material policies of fire, liability, workmen's compensation, directors and officers, errors and omissions and other forms of insurance owned or
held by CFES. All such policies are in full force and effect. Seller shall cause CFES, for a period of not less than one (1) year from the Closing Date, to continue CFES' current errors and
omissions insurance policy or policies (or a substantially comparable policy or policies), or, if such insurance coverage is not available, the best available coverage. 


        7.15    No Finder.    Except as set forth on  Schedule 7.15,
neither Seller, nor any Person acting on its behalf has paid or become obligated to pay, any fee or commission to any broker,
finder or intermediary for or on account of the transactions contemplated by this Agreement. 


        7.16    Business Relations.    Seller has not received any notice of
any client, supplier or vendor engaged in doing business with Seller will cease to do business (other than due to completion of engagements or assignments commenced prior to the Closing Date) with
Purchaser after the consummation of the transactions contemplated hereby in the same manner and at the same levels as previously conducted with Seller except for any reductions which, individually or
in the aggregate, would not be Material. 


        7.17    Warranty; Nonbillable Work.    All services rendered by the
Selling Members have been in Material conformity with all applicable contractual commitments and all warranties, and there is no Liability or for damages in connection therewith, subject to the
reserve for client claims as set forth on the Financial Statements. No Selling Member is obligated to perform nonbillable client service work (under the terms of any client agreement or necessary in
order to maintain any client relationship), in order to correct work previously performed that was incorrect or deficient, to complete work in excess of the fixed rate limit with respect to a
particular project or otherwise, other than reasonable and customary efforts to maintain client satisfaction consistent with the size and scope of a particular project and consistent with maintaining
the profitability of such project. Except as set forth on Schedule 7.9, neither Seller nor any Selling Member is a party to any fixed fee or
capped price contracts or engagement arrangements involving work which if billed at a Selling Member's normal hourly rates would exceed $10,000 in annual revenues, nor does Seller or any Selling
Member have any outstanding offers, bids or proposals to perform any services on a fixed fee or capped basis exceeding such amount. 


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        7.18    Consents.    With the exception of the consent of the landlord
under the Leases and the consents to be delivered by Seller under Section 6.2.8 or as disclosed on Schedule 7.18, the execution, delivery
and performance of this Agreement, the Service Agreement and all ancillary agreements, documents, instruments and schedules executed in connection herewith by Seller and the Selling Members do not
require the consent, approval authorization or act of, or the making by the Seller or the Selling Members of any declaration, filing or registration with, any Governmental Body or any other Person
which has not been obtained or made as of the Closing Date. 


        7.19    Schedules.    Any information set forth in or attached to any
Schedule delivered or required to be delivered pursuant to this Agreement shall be deemed to constitute disclosure for any other Schedule delivered or to be delivered pursuant to this Agreement. 



        7.20    Accuracy of Disclosure.    No representation or warranty made
by either the Seller or the Selling Members in this Agreement or the exhibits and schedules hereto, and no exhibit or schedule delivered to Purchaser at Closing contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements contained herein and therein, in light of the circumstances in which they were made, not misleading. 


        7.21    No Other Warranties or Representations; CFES
Information.    SUBJECT TO THE EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE 7, NEITHER
SELLER NOR THE SELLING MEMBERS MAKES ANY WARRANTY THAT ANY OF THE PURCHASED ASSETS ARE MERCHANTABLE OR FIT FOR ANY PARTICULAR PURPOSE NOR IS THERE ANY OTHER WARRANTY WITH RESPECT THERETO, EXPRESS OR
IMPLIED, EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT WITH RESPECT TO SUCH PURCHASED ASSETS. 


        LECG
HEREBY ACKNOWLEDGES THAT THE SELLING MEMBERS HAVE SEPARATED FROM CFES AND THAT BLDS IS NOT AFFILIATED WITH CFES. INFORMATION CONTAINED HEREIN WITH RESPECT TO CFES WAS PROVIDED BY
BLDS AND THE SELLING MEMBERS AT THE REQUEST OF LECG. 



8.    Representations of Purchaser and Parent.  


        Purchaser and Parent jointly and severally represent and warrant to Seller and the Selling Members as of the Closing Date as follows: 


        8.1    Organization and Authority.    Each of Purchaser and Parent is
a limited liability company duly organized, validly existing and in good standing under the laws of the State of California and each has all requisite power and authority to own its properties, to
carry on its respective businesses as now
being conducted, to execute and deliver this Agreement and to consummate the transactions contemplated hereby. This Agreement and all other agreements and written obligations entered into or
undertaken in connection with the transaction contemplated hereby constitute the valid and legally binding obligations of Purchaser enforceable against Purchaser in accordance with their respective
terms, except as such enforcement may be limited by the Enforceability Limitations. 


        8.2    Authorization of Agreement.    The execution and delivery of
this Agreement by Purchaser and Parent and the consummation by Purchaser and Parent of all obligations contemplated hereby have been duly authorized by all requisite limited liability company action. 


        8.3    Litigation; Compliance with Law.    There is no litigation,
proceeding (arbitral or otherwise), claim or investigation of any nature, pending, or to Purchaser's or Parent's actual knowledge, threatened, against Purchaser or Parent, except for any litigation,
claim or investigation that would not be Material. 


10





 



9.    Additional Covenants.  


        9.1    Access to Properties and Records.    For a period of three
(3) years from and after the Closing Date, Seller and the Selling Members shall afford to the officers, employees, attorneys, accountants and other authorized representatives of Purchaser
("Purchaser Representatives"), provided, that, no access shall be provided to any Purchaser
Representative unless such Purchaser Representative agrees in writing to comply with the confidentiality provisions set forth in Section 9.2,
free and full access upon reasonable notice and during normal business hours to all offices, properties, employees, books and records of Seller ("Seller's Properties and
Records") so that Purchaser may have reasonable opportunity to make such investigation as it shall desire to make of the Purchased Assets and the affairs of Seller and for the
purpose of preparing financial statements, tax returns and other proper corporate activities. Purchaser shall be permitted to make abstracts from, or copies of, such books and records; Seller shall
furnish to Purchaser such financial and operating data and other information relating to the Purchased Assets as Purchaser shall reasonably request. Purchaser's and the Purchaser's Representatives
access to the Seller's Properties and Records is subject to the confidentiality obligations of Purchaser and Purchaser's Representatives under  Section 9.2 hereof. 


        9.2    Confidentiality.    Both before and after the Closing, each of
the parties hereto agrees that it will treat in confidence this Agreement and all documents, materials and other information which it may have obtained regarding the other party during the course of
the negotiations leading to the preparation of this Agreement and other related documents. If a party (the "Recipient") is requested or required (by
deposition questions, interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process) to disclose the confidential information of another party (the "Protected Party"), the Recipient must provide
the Protected Party with prompt notice of such request(s) so the Protected Party may seek an appropriate protective order or other appropriate remedy and/or waive compliance with the confidentiality
provisions of this Agreement. (The preceding sentence will not apply to public disclosures by a Recipient which the Recipient believes upon the advice of counsel to be required by federal securities
laws or any listing or trading agreement concerning the Recipient's publicly-traded securities.) In the event that such protective order or other remedy is not obtained, or the Protected Party grants
a waiver hereunder, the Recipient may furnish that portion (and only that portion) of the confidential information which it is legally compelled to disclose and must exercise its reasonable efforts to
obtain reliable assurance that confidential treatment will be accorded any confidential information so furnished. The obligation of each party to treat such documents, materials and other information
in confidence shall not apply to any information which (i) is or becomes available to such party from a source other than such party, (ii) is or becomes available to the public other
than as a result of improper disclosure by such party or its agents, or (iii) such party reasonably deems disclosure to be necessary to obtain any of the consents or approvals contemplated
hereby. The covenants set forth in this Section 9.2 will survive the Closing. 


        9.3    Taxes.    



        9.3.1 Seller
will be solely liable for and shall pay all Taxes (whether assessed or unassessed) applicable to the Purchased Assets, in each case attributable to period (or
portions thereof) ending on or prior to the Effective Date, including all income or franchise Taxes of Seller arising in connection with the consummation of the transactions contemplated by this
Agreement. Purchaser will be liable for and will pay all Taxes (whether assessed or unassessed) applicable to the Purchased Assets, in each case attributable to periods (or portions thereof) beginning
after the Effective Date. For purposes of this Section 9.3.1, any period beginning before and ending after the Effective Date will be treated as two partial periods, one ending on the Effective
Date and the other beginning after the Effective Date except that Taxes (such as property Taxes) imposed on a periodic basis will be allocated on a daily basis. 



        9.3.2 Notwithstanding
Section 9.3.1, any sales Tax, use Tax or similar Tax attributable to the sale or transfer of the Purchased Assets will be paid by Seller.
Purchaser agrees to timely sign and 



11





 




deliver
such certificates or forms as may be necessary or appropriate to establish an exemption from (or otherwise reduce) or make a report with respect to such Taxes. 


        9.3.3 Seller
or Purchaser, as the case may be, will provide reimbursement for any Tax paid by one party all or a portion of which is the responsibility of another party in
accordance with the terms of this Section 9.3.3. Within a reasonable time prior to the payment of any said Tax, the party paying such Tax will give notice to the other parties of the Tax
payable and the portion which is the Liability of each party, although failure to do so will not relieve the other party from its Liability hereunder. 




        9.4    Further Assurances.    



        9.4.1 From
and after the Closing Date, Seller and each Selling Member shall take all such steps as may be necessary to put Purchaser in actual possession and operating
control of the Purchased Assets, and Seller and the Selling Members agree that at any time or from time to time (without further cost or expense to Purchaser) after the Closing Date, upon the request
of Purchaser, Seller and the Selling Members will execute, acknowledge and deliver such other instruments of conveyance and transfer and take such other action as may be reasonably required to vest in
Purchaser good and marketable title to any of the Purchased Assets. 


        9.4.2 To
the extent Seller or any Selling Member receives any funds or other assets that are part of the Purchased Assets (the "Purchaser
Funds") after the Closing Date, Seller will, as soon as practicable, either deliver such Purchaser Funds to Purchaser or remit an amount of money to Purchaser equal to the
amount of such Purchaser Funds, and will take all steps necessary to vest title to such funds and assets in Purchaser. Seller hereby designates Purchaser as its true and lawful
attorney-in-fact, with full power of substitution, to execute or endorse for the benefit of Purchaser any checks, notes or other documents received by Seller in connection with
the Purchaser Funds. Seller hereby acknowledges and agrees that the power of attorney set forth in the preceding sentence is coupled with an interest, and further agrees to execute and deliver to
Purchaser from time to time any documents or instruments reasonably requested by Purchaser to evidence such power of attorney. 


        9.4.3 To
the extent Purchaser receives any funds or other assets that are Excluded Assets (the "Seller Funds") after the
Closing Date, Purchaser will, as soon as practicable, deliver such Seller Funds to Seller and will take all steps necessary to vest title to such funds and assets in Seller. Purchaser hereby
designates Seller as its true and lawful attorney-in-fact, with full power of substitution, to execute or endorse for the benefit of Seller any checks, notes or other documents
received by Purchaser in connection with the Seller Funds. Purchaser hereby acknowledges and agrees that the power of attorney set forth in the preceding sentence is coupled with an interest, and
further agrees to execute and deliver to Seller from time to time any documents or instruments reasonably requested by Seller to evidence such power of attorney. 


        9.4.4 At
any time or from time to time after the Closing, each party hereunder shall, at the request of the other, execute and deliver any further instruments or documents
and take all such further action as any party may reasonably request in order to carry out the transactions contemplated hereby. 


        9.4.5 Seller
shall promptly deliver to Purchaser any mail or communications relating to the Purchased Assets and Assumed Liabilities. 


        9.4.6 Purchaser
shall promptly deliver to Seller any mail or communications relating to Excluded Assets and Excluded Liabilities. 



        9.4.7 From
and after the Closing, Seller and the Selling Members agree to use reasonable, good faith efforts to ensure that all clients of Seller or the Selling Members who
agree to become 



12





 




clients
of Purchaser execute an engagement agreement with Purchaser in a form satisfactory to Purchaser. 




        9.5    Retained Information.    After the Closing, to the extent not
prohibited by law or restricted by applicable ethical rules, Purchaser shall make available to Seller any records related to the Purchased Assets prior to the Closing which are transferred to
Purchaser at the Closing (the "Transferred Business Records") for inspection and copying to the extent Seller requires access to such records in
response to tax audits or other reasonable business necessity as reasonably determined by Seller. Seller's access to the Transferred Business Records is subject to the confidentiality obligations of
Seller under Section 9.2 hereof. After the Closing, Seller, to the extent not prohibited by law or restricted by applicable ethical rules, shall
make available to Purchaser any business records related to the Purchased Assets prior to the Closing which are not transferred to Purchaser at the Closing (the "Retained
Business Records") for inspection and copying to the extent Purchaser requires access to such records for reasonable business necessity. Purchaser's access to Retained Business
Records is subject to the confidentiality obligations of Purchaser under Section 9.2 hereof. 


        9.6    Separation from CFES.    Purchaser acknowledges that
Dr. Jerome M. Staller, a CFES shareholder not party to this Agreement or the Service Agreement, will, from and after the Closing Date, continue his consulting practice with CFES separate and
distinct from each of the Selling Members (as each Selling Member becomes an employee of Purchaser) and Purchaser. On or before the Closing Date, Seller and the Selling Members must enter into an
agreement with CFES and Dr. Staller on terms mutually agreeable to the parties, and Purchaser will cooperate with Seller and the Selling Members in reaching such agreement with CFES and
Dr. Staller. The separation agreement with Dr. Staller may include terms requiring Purchaser to furnish Dr. Staller with (i) some portion of Purchaser's office space and
shared business services, such as copying and faxing, without reimbursement to Purchaser, for a limited period not to exceed ninety (90) days following the Closing Date (subject to the last
sentence hereof); and (ii) fifty percent (50%) of Dr. Staller's relocation expenses including, without limitation, computer and telephone wiring. Notwithstanding the foregoing,
Purchaser's total economic assistance under the separation agreement cannot exceed $25,000 and Purchaser will be entitled to a credit against such economic assistance obligation equal to $8,000 for
each thirty (30) day period during which Dr. Staller continues to use Purchaser's office space beyond the 90th day from the Closing Date. 


        9.7    Software License Agreement.    Within fourteen (14) days
after the Closing Date, Purchaser, Seller and the Selling Members will enter into a Software License Agreement relating to the Wage and Disparate Impact Auditor Software on terms mutually agreeable to
the Purchaser, Seller and the Selling Members. 


10.    Conditions Precedent To Obligations Of Purchaser.  


        The obligations of Purchaser under this Agreement are subject to the fulfillment in all respects of the following conditions precedent on or before the Closing
Date, each of which may be waived in writing at the sole discretion of Purchaser. Seller must deliver a certificate executed by the Selling Members certifying the satisfaction in all respects of the
conditions precedent set forth in this Section 10. If any of the conditions precedent to the obligations of Purchaser are not satisfied or waived
on the Closing Date, Purchaser will have the right to elect not to proceed with the Closing and the parties will have no further rights or obligations under this Agreement, the Service Agreement or
otherwise. 


        10.1    Continued Truth of Representations and Warranties; No
Breach.    Each of the representations and warranties of Seller and the Selling Members in this Agreement shall be true and correct in all Material respects on and as
of the Closing Date, and Seller shall have performed and complied with all of the terms, conditions, obligations, agreements and restrictions required by this Agreement to be 


13





 



performed
or complied with by it prior to or on the Closing Date, including making the deliveries required under Section 6.2 hereof. 


        10.2    Due Authorization.    The Board of Directors of Parent, acting
on its own behalf and as the sole member and manager of Purchaser, will have approved the transactions contemplated by this Agreement. 



        10.3    Absence of Litigation.    No action or proceeding shall have
been instituted or threatened by any public authority prior to the Closing Date before a court or governmental body or agency of any kind for the stated purpose or with the probable effect of
enjoining or preventing the consummation of this Agreement and the transactions contemplated herein or to recover damages by reason thereof. No action or proceeding shall have been instituted by any
private person prior to the Closing Date before a court or governmental body or agency of any kind with the probable effect of enjoining or preventing the consummation of this Agreement and the
transactions contemplated hereby. 


        10.4    Resolution of Conflict Issues.    Purchaser, on the one hand,
and Seller, on the other hand, will have (i) resolved, to the satisfaction of each of them, any current conflicts of interest arising from or related to the transactions contemplated by this
Agreement, and (ii) reached an agreement, satisfactory to each of them, on the method of resolving conflicts of interest that may arise in the future as a result of the transactions
contemplated by this Agreement. 


        10.5    Purchase of Selling Members' Personal Goodwill.    Purchaser
will have entered into the Service Agreement on terms mutually agreeable to the respective parties regarding the purchase by Purchaser
of the CFES' Shareholders' Personal Goodwill, and the employment of the Selling Members by Purchaser. 


        10.6    Transfer of Employees.    Substantially all of the employees
identified on Schedule 5 will have accepted employment with Purchaser and entered into such employment agreements, offer letters or other
contractual conditions of employment as may be reasonably requested by Purchaser in order to become Hired Employees. 


        10.7    Necessary Governmental Approvals.    The parties will have
received all approvals and actions of or by all Governmental Bodies which are necessary to consummate the transactions contemplated hereby and which are required to be obtained prior to the Closing by
applicable law. 


        10.8    Landlord Consents.    The landlords under the Leases will have
consented to the assignment of those Leases to Purchaser. 


        10.9    No Material Adverse Change.    There will have been no
Material adverse change in the Purchased Assets, the operations of Seller or the conduct of the business of the Selling Members from the Interim Financial Statement Date through and including the
Closing Date. 


        10.10    Lender Approvals.    Purchaser and Parent will have received
the prior written consent of U. S. Bank National Association on behalf of itself and Purchaser's other lenders, to the transactions contemplated by this Agreement. 


        10.11    Separation Agreement with CFES.    CFES will have entered
into an agreement with the Selling Members to distribute certain assets of CFES to the Selling Members and Dr. Staller and the Selling Members will also have entered into an agreement
consistent with the provisions of Section 9.6 hereof. 


11.    Conditions To Obligations Of Seller.  


        The obligations of Seller and the Selling Members under this Agreement are subject to the fulfillment in all material respects of the following conditions
precedent as of the Closing Date, each of which may be waived in writing at the discretion of the Seller. If any of the conditions precedent to the 


14





 



obligations
of Purchaser are not satisfied or waived on the Closing Date, Seller will have the right to elect not to proceed with the Closing and the parties will have no further rights or obligations
under this Agreement, the Service Agreement or otherwise. 


        11.1    Continued Truth of Representations and Warranties.    The
representations and warranties made by Purchaser in this Agreement shall be true in all respects on and as of the Closing Date as though such representations and warranties were made on and as of such
date, except for any changes permitted by the terms hereof or consented to in writing by the Seller and except for representations and warranties that are qualified as to materiality, which shall be
true and correct in all aspects, and Purchaser shall have performed and complied with all terms, conditions, obligations, agreements and restrictions required by this Agreement to be performed or
complied with by it prior to or on the Closing Date, including making the deliveries required under Section 7.3 hereof. 


        11.2    Absence of Litigation.    No action or proceeding shall have
been instituted or threatened by any public authority prior to the Closing Date before a court or governmental body or agency of any kind for the stated purpose or with the probable effect of
enjoining or preventing the consummation of this Agreement and the transactions contemplated herein or to recover damages by reason thereof. No action or proceeding shall have been instituted by any
private person prior to the Closing Date before a court or governmental body or agency of any kind with the probable effect of enjoining or preventing the consummation of this Agreement and the
transactions contemplated hereby. 


        11.3    Resolution of Conflict Issues.    Purchaser, on the one hand,
and Seller, on the other hand, will have (i) resolved, to the satisfaction of each of them, any current conflicts of interest arising from or related to the transactions contemplated by this
Agreement, and (ii) reached an agreement, satisfactory to each of them, on the method of resolving conflicts of interest that may arise in the future as a result of the transactions
contemplated by this Agreement. 


        11.4    Purchase of Selling Members' Personal Goodwill.    Purchaser
will have entered into the Service Agreement on terms mutually agreeable to the respective parties regarding the purchase by Purchaser of the CFES' Shareholders' Personal Goodwill, and the employment
of the Selling Members by Purchaser. 


        11.5    Necessary Governmental Approvals.    The parties will have
received all approvals and actions of or by all Governmental Bodies which are necessary to consummate the transactions contemplated hereby and which are required to be obtained prior to the Closing by
applicable law. 


12.    Representations And Warranties: Statute of Limitations on Claims.  


        All claims and causes of action related to the representations and warranties of the parties contained herein shall survive the consummation of the transactions
contemplated hereby until the second anniversary of the Closing Date. Notwithstanding the foregoing, the limitation period for the survival of claims with respect to representations and warranties set
forth in this Section 12 will not apply to any claims regarding a fraudulent representation or warranty. 


13.    Indemnification.  


        13.1    Indemnification by Seller.    Subject to the limitations set
forth in Section 13.3, from and after the Closing, Seller and the Selling Members, jointly and severally, agree to indemnify, defend and hold
harmless each of the Purchaser, Parent and any of their respective members, officers, directors, employees, agents, affiliates, successors or assigns (each, a "Purchaser
Party") from any loss, damage or expense (including reasonable attorneys' fees) which a Purchaser Party may incur, suffer or become liable for as a result of or in connection
with (a) the breach of any representation or warranty of Seller or the Selling Members contained in this Agreement; (b) the breach of any agreement of Seller or the Selling Members
contained in this Agreement; or (c) any assertion against a Purchaser Party of any 


15





 

claim
or Liability relating to an Excluded Liability including, without limitation, the assertion against a Purchaser Party by any Person or Governmental Body of any obligation or Liability relating
to the operation of the Purchased Assets or the conduct of the business of the Selling Members prior to the Effective Date including, without limitation, tax claims or liabilities. Purchaser, acting
on behalf of a Purchaser Party, shall give Seller and the Selling Members prompt written notice of any claim, suit or demand which Purchaser believes will give rise to indemnification by Seller or the
Selling Members under this section; provided, however, that, the failure to give such notice shall not affect the obligations of Seller or the Selling
Members hereunder, unless such failure adversely affects any rights, remedies or privileges that would have been available to Seller or a Selling Member. Except as hereinafter provided and except
where a conflict of interest between Seller and/or the Selling Members and the Purchaser Party suggests separate counsel is appropriate, Seller and/or the Selling Members shall have the right to
defend and to direct the defense against any such claim, suit or demand, in its name or in the name of the Purchaser Party at Seller's and/or the Selling Members' expense and with outside counsel of
Seller's and/or the Selling Members' own choosing. Each Purchaser Party shall, at Seller's and/or the Selling Members' expense, cooperate reasonably in the defense of any such claim, suit or demand.
If Seller and/or the Selling Members, within reasonable time after notice of a claim, fails to defend a Purchaser Party, the Purchaser Party shall be entitled to undertake the defense, compromise or
settlement of such claim at the expense of and for the account and risk of Seller and/or the Selling Members subject to the right of Seller and/or the Selling Members to assume the defense of such
claim at any time prior to the settlement, compromise or final determination thereof if the only issues remaining therein involve Liability for, or the amount of, money damages to be assessed against
the Purchaser Party, provided neither Seller nor the Selling Members will, without the Purchaser Party's written consent, settle or compromise any claim or consent to any entry of judgment which does
not include as an unconditional term thereof the giving by the claimant or the plaintiff to the Purchaser Party a release from all Liability in respect of such claim. 



        13.2    Indemnification by Purchaser.    Subject to the limitations
set forth in Section 13.3, from and after the Closing, Parent and Purchaser, jointly and severally, agree to indemnify, defend and hold harmless
Seller, the Selling Members, and each of their respective members, shareholders, officers, directors, employees, agents, affiliates, successors or assigns (each, a "Seller
Party") from any loss, damage or expense (including reasonable attorneys' fees) which a Seller Party may incur, suffer or become liable for as a result of or in connection with
(a) the inaccuracy or breach of any representation or warranty of Purchaser or Parent contained in this Agreement; (b) the breach of any agreement of Purchaser contained in this
Agreement; or (c) any assertion against a Seller Party of any claim or Liability relating to the Assumed Liabilities or the operation of the Purchased Assets on or after the Effective Date, in
both cases, including, without limitation, the assertion against a Seller Party by any Person or Governmental Body of any obligation or Liability relating to the Assumed Liabilities, or operation of
the Purchased Assets on or after the Effective Date, including, without limitation, tax claims or Liabilities. Notwithstanding the foregoing, other than as set forth in  Section 9.3, Purchaser will
have no indemnification, defense or hold harmless obligation to any Selling Party with respect to the Liability of
any Selling Party for Taxes as a result of the transactions contemplated by this Agreement or the Service Agreement. Seller, on behalf of each Seller Party, shall give Purchaser prompt written notice
of any claim, suit or demand which it believes will give rise to indemnification by Purchaser under this paragraph; provided, however, that the failure
to give such notice shall not affect the obligations of Purchaser hereunder unless such failure adversely affects any rights, remedies or privileges that would have been available to Purchaser. Except
as hereinafter provided and except where a conflict of interest between a Seller Party and Purchaser, Purchaser shall have the right to defend and to direct the defense against any such claim, suit or
demand, in its name or in the name of the Seller Party at Purchaser's expense and with counsel of Purchaser's own choosing. Each Seller Party shall, at Purchaser's expense, cooperate reasonably in the
defense of any such claim, suit or demand. If Purchaser, within reasonable time after notice of a claim, fails to defend a Seller Party, the Seller Party 


16





 



shall
be entitled to undertake the defense, compromise or settlement of such claim at the expense of and for the account and risk of Purchaser subject to the right of Purchaser to assume the defense
of such claim at any time prior to the settlement, compromise or final determination thereof if the only issues remaining therein involve Liability for, or the amount of, money damages to be assessed
against the Seller Party, provided Purchaser will not, without the Seller Party's written consent, settle or compromise any claim or consent to any entry of judgment which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to a Seller Party a release from all Liability in respect of such claim. 


        13.3    No party seeking indemnification under this Agreement (the "Indemnified
Party") shall make any claim for indemnification against the other party (an "Indemnifying Party") unless and until the
aggregate amount of all such claims against such Indemnifying Party exceeds $25,000 (the "Threshold Amount") whereupon the Indemnified Party may claim
indemnification for the full amount of such claims, or any portion thereof; provided, however, that neither party may recover in the aggregate an amount
greater than the Purchase Price from the other party pursuant to this Section 13.3. 


        14.    Expenses.    Except as may otherwise be expressly provided herein, each party to this Agreement shall pay their
own expenses in connection with this Agreement and the transactions contemplated hereby, including taxes, recording fees and attorneys' or accountants' fees. 


        15.    Notices.    Any notices or other communications required or permitted hereunder shall be sufficiently given if
delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or transmitted by telecopy with confirmation copy sent by first class mail, postage prepaid,
addressed as follows or to such other address of which the parties may have given notice in accordance with this Section 15: 






In
the case of Purchaser, to: 


LECG,
LLC

2000 Powell Street, Suite 600

Emeryville, California 94608

Attention: Chief Financial Officer

Fax: (510) 653-9898 



In
the case of Parent, to: 


LECG
Holding Company, LLC

2000 Powell Street, Suite 600

Emeryville, California 94608

Attention: Chief Financial Officer

Fax: (510) 653-9898 


with
copies of notices to Purchaser or Parent to: 


Marvin
A. Tenenbaum, Esq.

General Counsel

LECG, LLC

33 West Monroe Street, Suite 1850

Chicago, IL 60603

Fax: (312) 267-8220 






17






 




In
the case of Seller or the Selling Members, to: 


Dr. Samuel
J. Kursh

BLDS, LLC

1608 Walnut Street, Suite 1200

Philadelphia, PA 19103 


with
a copy to: 


Joseph
E. Ronan, Jr.

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103

Fax: (215) 963-5001 







        16.    Successors.    This Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that no party may assign its rights or obligations hereunder (directly or indirectly or as a matter of law) without the prior written consent of all of the
other parties. 


        17.    Article and Section Headings.    The Article and section headings used in this Agreement are for the
convenience of the parties and in no way alter, modify, amend, limit, or restrict the contractual obligations of the parties. 


        18.    Governing Law; Consent To Service.    This Agreement shall be governed by and construed in accordance with the
laws of the State of California applicable to agreements made and to be performed therein (without giving effect to the conflict of law provisions of such jurisdiction). The parties agree that service
of process of notice in any such action, suit or proceeding shall be effective if in writing and sent by certified or registered mail, return receipt requested, postage prepaid, as provided in
Section 15 hereof. 


        19.    Entire Agreement.    This Agreement, including all Schedules and Exhibits hereto, and all agreements to be
delivered by the parties pursuant hereto represent the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and supersede all prior negotiations
between the parties including, without limitation, that certain letter of intent dated July 15, 2003, and cannot be amended, supplemented or changed orally, but only be so modified by an
agreement in writing which makes specific reference to this Agreement or the appreciable agreement delivered pursuant hereto, as the case may be, and which is signed by the party against whom
enforcement of any such amendment, supplement or modification is sought. 


        20.    Counterparts.    This Agreement may be signed in two or more counterparts, each signed by one or more of the
parties hereto so long as each party shall sign at least one counterpart of this Agreement, all of which taken together shall constitute one and the same instrument. 


[signatures appear on next page]


18





 

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the date
first above written. 



	LECG, LLC

A California limited liability company	 	LECG HOLDING COMPANY, LLC

A California limited liability company
	

By:	
 	

LECG Holding Company, LLC	
 	

By:	
 	

/s/  ILLEGIBLE      

	Its:	 	Sole Member and Manager	 	Its:	 	President
	

 	
 	

By:	
 	

/s/  ILLEGIBLE      
	
 	

 	
 	

 
	 	 	Its:	 	    
	 	 	 	 
	

 	
 	

 	
 	

 	
 	

BLDS, LLC A Delaware limited liability company
	

 	
 	

 	
 	

 	
 	

By:	
 	

/s/  SAMUEL J. KURSH      

	 	 	 	 	 	 	Its:	 	President
	

 	
 	

 	
 	

 	
 	

/s/  BERNARD R. SISKIN      
 Dr. Bernard R. Siskin
	

 	
 	

 	
 	

 	
 	

/s/  LEONARD A. CUPINGOOD      
 Dr. Leonard A. Cupingood
	

 	
 	

 	
 	

 	
 	

/s/  DAVID W. GRIFFIN      
 Dr. David W. Griffin
	

 	
 	

 	
 	

 	
 	

/s/  SAMUEL J. KURSH      
 Dr. Samuel J. Kursh




19





 
 
 

LIST OF EXHIBITS    
    



1.  Exhibit A    Bill
of Sale 


2.  Exhibit B    Instrument
of Assignment and Assumption 


3.  Exhibit C    RESERVED 


4.  Exhibit D    RESERVED



5.  Exhibit E    Director
Service Agreement and Director Practice Purchase Agreement 


6.  Exhibit F    Financial
Statements 


20









QuickLinks



Exhibit 10.37


ASSET PURCHASE AGREEMENT

RECITALS

AGREEMENT

LIST OF EXHIBITS