Document:

Exhibit
10.77

A MARK OF *** IN THE TEXT OF THIS
EXHIBIT INDICATES THAT CONFIDENTIAL MATERIAL HAS BEEN OMITTED.  THIS EXHIBIT, INCLUDING THE OMITTED PORTIONS,
HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT UNDER
RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934.

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (the “Agreement”) is entered into as of
March 9, 2007 by and among The Secura Group, L.L.C., a Delaware limited
liability company (“Seller”), LECG, LLC, a
California limited liability company (“Purchaser”),
LECG Corporation, a Delaware corporation (“Parent”),
Jeffrey M. Curry (“Curry”), William M. Isaac (“Isaac”), Daniel T. Krabill (“Krabill”), Wendi Lonnquist (“Lonnquist”), Margaret L. Maguire (“Maguire”), John H. Maher (“Maher”), Michael A. Mancusi (“Mancusi”), Walter J. Mix, III (“Mix”), Mary T. Somerville (“Somerville”), and Leeto J. Tlou (“Tlou”).  Curry, Isaac, Krabill, Lonnquist, Maguire,
Maher, Mancusi, Mix, Somerville, and Tlou are individually referred to herein
each as a “Member” and collectively as
the “Members.”  Seller and the Members are collectively
referred to in this Agreement as the “Seller Parties.”

RECITALS

A.                                    Seller
provides expert, consulting and regulatory compliance services in the financial
services industry (the “Business”).

B.                                    Seller desires to
sell to Purchaser, on the terms and conditions set forth in this Agreement,
substantially all of the assets of Seller used in the Business.

C.                                    Purchaser desires
to purchase substantially all of the assets of Seller used in the Business and
is prepared to assume certain specified liabilities and obligations of Seller
on the terms and conditions set forth in this Agreement.

D.                                    The Members own all of the equity
interests in Seller to the extent provided herein, and desire that the
transactions described in this Agreement be consummated.

E.                                      In
connection with the purchase and sale of substantially all of the assets of
Seller, Purchaser will also retain the services of each Member except for
Maguire (each Member other than Maguire, a “Secura
Director”) pursuant to the terms of a Director Agreement to be
entered into by and between each Secura Director and Purchaser as of the
Closing Date in substantially the form of Exhibits A-1 through A-9
attached to this Agreement (each, a “Director Agreement”),
and Isaac and Mancusi will become “Managing Directors” of Purchaser (as that
term is used by Purchaser).

AGREEMENT

In consideration of the mutual covenants, agreements,
representations and warranties contained in this 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 in this
Agreement, the following terms will have the meanings indicated.

“1933 Act” means the federal
Securities Act of 1933, as amended, and the respective rules and regulations
promulgated thereunder.

“1934
Act” means the federal Securities Exchange Act of 1934, as
amended, and the respective rules and regulations thereunder.

“Accounts Receivable” has the meaning
given in Section 2.2.6.

“Additional Payment” has the meaning
given in Section 3.3.1.

“Additional Payment Accounting” has
the meaning given in Section 3.3.4.

“Additional
Payment Computation” has the meaning given in Section 3.3.6.

“Additional Payment Period” has the
meaning given in Section 3.3.1.

“Agreement” has the meaning given in
the Preamble to this Agreement.

“Allocation Schedule” has the meaning
given in Section 3.2.

“Assignment and Assumption Agreement”
has the meaning given in Section 2.3.

“Assumed Liabilities” has the meaning
given in Section 2.3.

“Business” has the meaning given in
Recital A to this Agreement.

“Cause” means any of the following
grounds for termination by Purchaser of the employment of any Secura Director:
(i) the commission of a felony, as determined by a court of competent
jurisdiction; (ii) the commission of any willful act involving dishonesty or
fraud with respect to Purchaser or Parent or involving illegal harassment of or
discrimination against any employee of Purchaser or Parent; (iii) willful
misappropriation of funds or assets of Purchaser or Parent for personal use;
(iv) failure to comply with material written policies of LECG (such as human
resources or conflict check policies) that is not cured within 30 days after
written notice from Purchaser describing the failure to perform and demanding
immediate performance; provided, however, that if a cure is not
practical within 30 days, and the Secura Director commences to effect a cure
within the foregoing 30-day period, he or she will be permitted reasonable
additional time to cure so long as  he or
she diligently continues to seek to effect a cure; (v) gross negligence or
willful misconduct in the performance of material duties under that Secura
Director’s Director Agreement that is capable of cure and is not cured within
10 days after written notice from Purchaser describing such

 2
 

A mark of
*** on this page indicates that confidential material has been omitted.  This Exhibit, including the omitted portions,
has been filed separately with the Secretary of the Securities and Exchange
Commission pursuant to an application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.

negligence
or misconduct; provided, however, that if a cure is not practical
within 10 days, and the Secura Director commences to effect a cure within the
foregoing 10-day period, he or she will be permitted reasonable additional time
to cure so long as he or she diligently continues to seek to effect a cure;
(vi) a material breach of this Agreement that involves fraud; (vii) a material
breach of Section 4 of this Agreement that is not cured within 30 days after written
notice from Purchaser describing that breach; or (viii) a material willful
breach of Purchaser’s Corporate Code of Conduct, as may be amended by Purchaser
and provided in writing to the Secura Director from time to time.  A copy of Purchaser’s Corporate Code of
Conduct in effect as of the Closing Date is attached to this Agreement as Exhibit
B.

“Client Prepaid Balance”
has the meaning given in Section 3.6.

“Closing” has the meaning given in
Section 6.1.

“Closing Date” has the meaning given
in Section 6.1.

“Closing Payment” has the meaning
given in Section 3.1.

“Code” means the Internal Revenue
Code of 1986, as amended.

“Colton” has the meaning given in
Section 10.6.

“Contracts” has the meaning given in
Section 7.9.

“Cost of Services” for a particular
period of time means ***.

“Curry” has the meaning given in the
Preamble to this Agreement.

“Delivery Instructions” has the
meaning given in Section 3.3.5.

“Director Agreement” has the meaning
given in Recital E to this Agreement.

“Disagreement
Notice” has the meaning given in Section 3.3.6.

“Dispute” has the meaning given in
Section 21.

“Documents” has the meaning given in
Section 2.1.10.

“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.

 3
 

A mark of
*** on this page indicates that confidential material has been omitted.  This Exhibit, including the omitted portions,
has been filed separately with the Secretary of the Securities and Exchange
Commission pursuant to an application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.

“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
Seller and identified on Schedule 7.13.

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

“Errors and Omissions Tail Policy”
has the meaning given in Section 11.5.

“Escrow Account” has the meaning
given in Section 6.3.1.

“Escrow Agent” has the meaning given
in Section 6.3.1.

“Escrow Agreement” has the meaning
given in Section 6.3.1.

“Excluded Assets” has the meaning
given in Section 2.2.

“Excluded Liabilities” has the
meaning given in Section 2.4.

“Financial Statements” has the
meaning given in Section 7.5.

“Fixed Assets” has the meaning given
in Section 2.1.1.

“Fraud” means actual fraud, as
defined in Section 1572 (or any successor provision thereto) of the California
Civil Code.

“GAAP” means generally accepted
accounting principles as applied in the United States.

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

“Gross Margin” means ***.  Gross Margin will be expressed as a
percentage.  A sample calculation of
Gross Profit, Revenue, Cost of Services and Gross Margin is attached hereto as Exhibit
C.

“Gross Profit” means ***.

“Hired Employees” has the meaning
given in Section 5.2.

“Independent
Firm” has the meaning given in Section 3.3.6.

 4
 

“Intellectual Property Rights” means
(a) all trademarks, service marks, trade dress, logos, trade names, domain
names and corporate names, together with all translations, adaptations,
derivations and combinations thereof, and all applications, registrations and
renewals in connection therewith, (b) all copyrightable works, all copyrights, software,
and all applications, registrations and renewals in connection therewith, (c)
all trade secrets and confidential business information (including, without
limitation, all research, techniques, models, databases, specifications,
customer and supplier lists, pricing and cost information, means and methods of
doing business, and business and marketing plans and proposals), (d) all
proprietary rights, databases and computer models, (e) all copies and tangible
embodiments of the foregoing (in whatever form or medium), and (f) any remedies
against infringements of the foregoing and rights to protection of interest in
the foregoing under the laws of all jurisdictions (including foreign
jurisdictions), if any.

“Interim Financial Statement”
has the meaning given in Section 7.5.

“Interim Financial Statement Date”
has the meaning given in Section 7.5.

“Isaac” has the meaning given in the
Preamble to this Agreement.

“Knowledge”  of
Seller or the Members means facts or matters actually known by one or more
Members; Knowledge of Purchaser means facts or matters actually known by one or
more executive officers or directors of Purchaser or Parent.

“Krabill” has the meaning given in
the Preamble to this Agreement.

“Liens” means, collectively, any mortgage, pledge, conditional sales contract,
lien, security interest, right of possession in favor of any third party, claim
or encumbrance.

“Leases” has the meaning given in
Section 2.1.11.

“Lease Assignment” has the meaning given in Section 6.2.7.

“Lonnquist” has the meaning given in
the Preamble to this Agreement.

“Losses” has the meaning given in
Section 14.1.

“Maguire” has the meaning given in
the Preamble to this Agreement.

“Maher” has the meaning given in the
Preamble to this Agreement.

“Mancusi” has the meaning given in the
Preamble to this Agreement.

 5
 

A mark of
*** on this page indicates that confidential material has been omitted.  This Exhibit, including the omitted portions,
has been filed separately with the Secretary of the Securities and Exchange
Commission pursuant to an application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.

“Material,” or any variation thereof,
means, with respect to an obligation, contract, commitment or Lien, any
obligation, contract, commitment or Lien that requires a future expenditure of
more than *** or that resulted in an expenditure of more than *** in the most
recent calendar year based on records reasonably available as of the date of
this Agreement.

“Material Adverse Change” or “Material Adverse Effect” means
a material adverse change in, or effect on, the business, assets (including
intangible assets), financial condition or results of operations, taken as a
whole, of Seller, Purchaser, or Parent, as applicable; provided, that none of
the following (individually or in combination) will be deemed to constitute, or
will be taken into account in determining whether there has been or would be, a
Material Adverse Change or Material Adverse Effect:  any event, violation, inaccuracy, circumstance
or other matter resulting primarily from or relating primarily to (directly or
indirectly) (i) general economic changes in conditions affecting the industry
in which the Seller or Purchaser, as applicable, participates or in the United
States economy as a whole, except to the extent disproportionately affecting
that party relative to other participants in that party’s industry, or (ii) the
announcement or pendency of the transactions contemplated by this Agreement.

“Mediation Notice” has the meaning given
in Section 21.

“Mediator” has the meaning given in
Section 21.

“Member” and “Members”
have the meaning given in the Preamble to this Agreement.

“Member
Percentage Interest” means the ownership percentages set forth
by the name of each Member in Schedule 3.1, which percentages are in
accordance with the provisions of the Operating Agreement; provided, for the
avoidance of doubt, that such percentages take no account of any claims or
allegations advanced by Donald J. Orndorff.

“Mix” has the meaning given in the
Preamble to this Agreement.

“Net Loss” has the meaning given in
Section 14.4.1.

“New Hire” has the meaning given in
Section 3.4.

“Non-solicitation Period”
means ***.

“Operating Agreement” has the
meaning given in Section 6.2.11.

“Owned IP Assets” has the
meaning given in Section 2.1.3.

“Parent” has the meaning given in the
Preamble to this Agreement.

 6
 

A mark of
*** on this page indicates that confidential material has been omitted.  This Exhibit, including the omitted portions,
has been filed separately with the Secretary of the Securities and Exchange
Commission pursuant to an application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.

“Parent SEC Report” has the meaning
given in Section 8.5.

“Patriot Act” means the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended.

“Permitted Liens” means those Liens that Purchaser and Seller have mutually agreed
will remain in place against the Purchased Assets as of the Closing Date, and
which Liens are listed on Schedule 7.7 attached to this Agreement.

“Person” means any individual,
corporation, partnership, joint venture, limited liability company,
association, joint-stock company, trust, unincorporated organization or
Governmental Body.

“Proposing Party” has the meaning
given in Section 21.

“Protected Party” has the meaning given in Section 10.1.

“Purchase Price” has the meaning
given in Section 3.1.

“Purchased Assets” has the meaning
given in Section 2.1.

“Purchaser” has the meaning given in
the Preamble to this Agreement.

“Purchaser Funds” has the meaning
given in Section 10.4.2.

“Purchaser Indemnitee” has the
meaning given in Section 14.1.1.

“Recipient” has the meaning given in
Section 10.1.

“Restricted Activities” means the
Business as operated by the Secura Directors on or prior to the Closing Date; provided,
however, that providing services as an employee of a college, university
or other educational institution or as an employee of a governmental agency
will not constitute Restricted Activities.

“Restrictive Period” means ***.

“Retained Business Records” has the
meaning given in Section 10.5.

“Revenue” for a particular period of
time means ***.

“Revised Client Prepaid Balance”
has the meaning given in Section 3.6.

“Secura Director” has the meaning
given in Recital E to this Agreement.

 7
 

“Secura Practice” means the client
matters of any type attributable to any Secura Director, Seller Affiliate or a
New Hire in accordance with Purchaser’s standard practice.

“Seller” has the meaning given in the
Preamble to this Agreement.  References
to “Seller” will be deemed to include its successors in interest, if any.

“Seller Affiliate” means a
party affiliated with Seller as an employee or independent contractor at or
prior to the Closing.   For example,
an employee of the company at the Closing and an independent contractor who had
provided services through Seller to Seller clients prior to the Closing, would
both be deemed a Seller Affiliate; whereas an employee who is hired after the
Closing and who had no prior affiliation with Seller would not be deemed a
Seller Affiliate.

“Seller Funds” has the meaning given
in Section 10.4.3.

“Seller Indemnitee” has the meaning
given in Section 14.2.1.

“Seller Parties” has the meaning
given in the Preamble to this Agreement.

“Seller Representative” means,
collectively, the two Persons authorized by the Seller Parties to jointly give
instructions, take actions, perform duties, respond to inquiries from Purchaser
or Parent, and otherwise represent the interests of the Seller Parties for
purposes of this Agreement.  The Seller
Representative will be Isaac and Mancusi, until changed by advance written notice
to Purchaser.  The Seller Parties will
have the right to give written notice to Purchaser at any time, and from time
to time, that the Seller Representative means only one Person.  All jointly made acts of the Seller
Representative will be binding on the Seller Parties for all purposes, and
Purchaser and Parent may rely on the authority of the Seller Representative, as
so jointly expressed, for all purposes. 
So long as the Seller Representative consists of two Persons, any
instruction, notice or communication purportedly received from the Seller
Representative that does not bear the two signatures of the Persons authorized
to jointly serve as Seller Representative may be disregarded by Purchaser upon
notice to both Seller Representatives (which notice may be sent electronically
notwithstanding the provisions of Section 17 hereof), in which case it will
have no force or effect until joint instructions signed by both authorized
Persons are received.

“Somerville” has the meaning given in
the Preamble to this Agreement.

“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 taxing authority.

 8
 

“Territory” means the locations
within the United States and locations within other countries throughout the
world, if any, where Seller conducts the Business as of the Closing Date.

“Third Person Licenses” means Seller’s
licenses to third Person software and other technology used by Seller in
connection with the Business as currently conducted, except for clickwrap or
open source software and personal computers and servers.

“Tlou” has the meaning given in the
Preamble to this Agreement.

“Transaction Documents” has the
meaning given in Section 3.1.

“Transferred Business Records” has
the meaning given in Section 10.5.

“WARN Act” means the Worker Adjustment and Retraining Notification
Act, 29 U.S.C. § 2102 et  seq.

“Year-End Financial Statements” has the meaning given in Section
7.5.

2.                                      Sale
And Purchase Of Assets.

2.1                               Purchased Assets.  Subject
to the terms and conditions of this Agreement, on the Closing Date, Seller will
sell, convey, assign, transfer and deliver to Purchaser and Purchaser will
purchase, receive and accept delivery from Seller, free and clear of all Liens
(other than Permitted Liens), all of Seller’s then existing properties and
assets (other than the Excluded Assets) of every kind and nature, real,
personal or mixed, tangible or intangible, wherever located, used in connection
with the Business (collectively, the “Purchased Assets”),
including, without limitation, all right, title and interest of Seller in, to
and under:

2.1.1                        All
equipment and physical plant, including,
without limitation, furniture, furnishings, trade fixtures, leasehold improvements,
computers, servers, telephone equipment and all other owned and leased tangible
personal property used in the Business as listed on Schedule 2.1.1
attached to this Agreement and incorporated in this Agreement by this reference
(the “Fixed Assets”);

2.1.2                        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;

2.1.3                        All Intellectual Property Rights owned, used by, and
(in the case of copies and tangible embodiments of Intellectual Property
Rights) in the possession of Seller in connection with the Business as
currently conducted that are capable of assignment (the “Owned
IP Assets”) and the goodwill associated therewith, including,
without limitation, the trade names “Secura” and “Secura Group.”

 9
 

2.1.4                        All of the Contracts, including, without limitation,
the Third Person Licenses;

2.1.5                        All rights to payment as a consequence of (i)
deposits and prepayments listed on Schedule 2.1.5 attached to this
Agreement and incorporated in this Agreement by this reference, and (ii)
refunds, rights of set off, rights of recovery, rights to payment or proceeds
under contracts of insurance to the extent applicable to an Assumed Liability
and claims or causes of action relating to the Purchased Assets that arise on
or after the Closing (except for refunds of Taxes to the extent provided in
Section 10.3); provided, however, that nothing in the foregoing
will be construed to prevent Seller from asserting any such rights, claims or
causes of action as a defense in any legal proceeding;

2.1.6                        Cash in an amount equal to the sum of (a) all client
retainer balances that have been paid as of January 31, 2007 but not applied to
work performed on or prior to January 31, 2007, as set forth in Schedule
2.1.6 and (b) payments received from clients for services that have not
been rendered as of January 31, 2007, as set forth in Schedule 2.1.6,
subject to adjustment through the Closing Date as provided in Section 3.6;

2.1.7                        All general intangibles used by the Business,
including, without limitation, all corporate goodwill of Seller;

2.1.8                        All other assets of Seller used by the Business,
whether or not reflected on the books or records of Seller or the Business;

2.1.9                        All creative materials, advertising and promotional
materials used in connection with the Business, wherever stored or located;

2.1.10                  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 and used by Seller in
connection with the Business (collectively, the “Documents”);
and

2.1.11                  All rights and
obligations of Seller under (i) that certain Office Lease dated March 22, 2006
by and between Seller, as tenant, and Tysons International Plaza I & II,
L.P., as landlord, for the premises located at 1921 Gallows Road, 9th Floor,
Vienna, Virginia , and (ii) that certain Office Lease Agreement (as amended)
dated August 1, 2001 by and between Seller, as tenant, and EOP-550 South Hope
Street, L.L.C., as landlord, for the premises located at 550 South Hope Street,
Los Angeles, California (the leases described in clauses (i) and (ii)
collectively, the “Leases”).

 10
 

2.2                               Excluded
Assets.  Notwithstanding the
provisions of Section 2.1, the Purchased Assets will not include the following
(collectively, the “Excluded Assets”):

2.2.1                        All membership interests (or other equity interests),
certificates, books, and records relating to the formation, maintenance and
existence of Seller as a limited liability company;

2.2.2                        All taxpayer and other identification numbers;

2.2.3                        All Tax returns filed by any Seller Party and
associated Tax records;

2.2.4                        Any contracts, agreements or understandings between
or among Seller and the Members;

2.2.5                        All Seller
insurance policies and all prepaid expenses and deposits related thereto,
subject, however, to Purchaser’s rights under Section 2.1.5 under claims-made
insurance policies or the Errors and Omissions Tail Policy;

2.2.6                        All work
in process and accounts receivable, including billable expenses, whether billed
or unbilled, with respect to client work of Seller that has been performed as
of the Closing Date (“Accounts Receivable”);

2.2.7                        Any rights
in any matters that have been closed prior to the Closing Date, provided,
however, that Purchaser will have the right to perform follow-on and
related work with respect to such matters;

2.2.8                        All cash
of Seller as of the Closing Date in excess of the cash amount specified in
Section 2.1.6;

2.2.9                        All rights
of Seller under this Agreement;

2.2.10                  All Retained
Business Records;

2.2.11                  All rights to payment as a consequence of refunds,
rights of set off, rights of recovery, and claims or causes of action relating
to the Business (including Tax refunds) that are attributable to periods (or
portions thereof) before the Closing; and

2.2.12                  All interests of
Seller in or to E-cruit LLC or Secura Burnett Company.

2.3                               Assumed Liabilities.  On the
Closing Date, Purchaser and Seller will enter into an assignment and assumption
agreement in substantially the form attached to this Agreement as Exhibit D
(the “Assignment and Assumption Agreement”)
pursuant to which Seller will assign, and Purchaser will assume and agree to
perform, discharge and

 11
 

A mark of *** on this page indicates that confidential material has
been omitted.  This Exhibit, including
the omitted portions, has been filed separately with the Secretary of the
Securities and Exchange Commission pursuant to an application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

satisfy, in accordance with their
respective terms and subject to the respective conditions thereof, only the
following obligations and liabilities of Seller (the “Assumed
Liabilities”): (a) all liabilities and obligations of
Seller incurred, attributable to or otherwise arising under the Contracts or
the Leases on or after the Closing Date; (b) obligations and liabilities
relating to client retainer balances that are transferred to Purchaser under
Section 2.1.6; and (c) all other liabilities and obligations incurred on
or after the Closing Date in connection with or arising from the conduct of the
Business by Purchaser.

2.4                               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 debts, liabilities and obligations, of any
nature whatsoever, other than the Assumed Liabilities, whether accrued,
absolute or contingent, whether known or unknown, whether due or to become due,
whether related to the Purchased Assets, the Business, the Excluded Assets or
otherwise, and regardless of when asserted (the “Excluded
Liabilities”).  Without
limiting the scope of Excluded Liabilities under this Section 2.4, Excluded
Liabilities specifically include (a) any liabilities with respect to Taxes for
which Seller is liable pursuant to Section 10.3 of this Agreement, including
without limitation any Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor or other Person, and any Taxes required to have been withheld under
Section 1445 of the Code; (b) all liabilities and obligations of Seller arising
out of or relating to any actions or omissions of employees, consultants,
independent contractors and experts of any kind occurring before the Closing
Date, including, without limitation, relating to acts or omissions in
connection with the performance of services for clients of Seller and unlawful
discrimination or harassment, (c) all liabilities and obligations of Seller
arising out of or in connection with E-cruit LLC, Secura Burnett Company
or any other subsidiary of Seller; (d) any
costs and expenses incurred by the Seller Parties incident to the negotiation
and preparation of this Agreement and their performance and compliance with the
agreements and conditions contained in this Agreement; and (e) any liabilities
in connection with any claims for conduct or agreements occurring prior to the
Closing that are asserted by Donald J. Orndorff or Jack Pierce.

3.                                      Consideration.

3.1                               Purchase
Price and Payment.  The purchase
price for the Purchased Assets (the “Purchase Price”)
is Nine Million Five Hundred Thousand Dollars ($9,500,000) (the “Closing Payment”), plus an amount
equal to the Additional Payment, if any, made to Seller.  As partial consideration for the sale,
assignment, transfer and delivery of the Purchased Assets, the assumption of
the Assumed Liabilities, and the execution and delivery of this Agreement and
any related documents referenced in this Agreement (collectively, the “Transaction Documents”) by Seller to
Purchaser.  Purchaser will make the
Closing Payment to Seller in cash at the Closing by (i) wire transfer of *** in
immediately available funds pursuant to wire instructions that Seller

 12
 

A mark of
*** on this page indicates that confidential material has been omitted.  This Exhibit, including the omitted portions,
has been filed separately with the Secretary of the Securities and Exchange
Commission pursuant to an application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.

will supply to Purchaser at least three (3) business
days before the Closing Date and (ii) wire transfer of *** in immediately
available funds to the Escrow Account pursuant to wire instructions that
Purchaser shall obtain from the Escrow Agent at least three (3) business days
before the Closing Date.  Distributions
of the Closing Payment by Seller to the Members must be made in accordance with
the Member Percentage Interests.

3.2                               Allocation
of Purchase Price.  The Purchase
Price for the Assets will be allocated as agreed by the parties.  Purchaser and Seller agree to prepare the
allocation in a manner that is reasonable and in accordance with the
requirements of Section 1060 of the Code, and the regulations promulgated
thereunder (the “Allocation Schedule”), and
that any Additional Payment will be allocated to goodwill unless otherwise
required by GAAP.  After the Closing and
following the receipt of any Additional Payment, and on any other occasion on
which the purchase price is adjusted, Purchaser and Seller will each 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.  With respect to any Tax returns
filed by Seller, any Member, Purchaser or Parent, (i) no party will take a
position on any Tax return (including IRS Form 8594), before any Tax Authority
or in any judicial proceeding, that is in any way inconsistent with the
Allocation Schedule without the written consent of both Seller and Purchaser or
unless specifically required pursuant to a determination by an applicable Tax Authority;
(ii) the parties will cooperate with each other in connection with the
preparation, execution and filing of all Tax returns related to the Allocation
Schedule; and (iii) the parties will promptly advise each other regarding the
existence of any Tax audit, controversy or litigation related to such
allocation.

3.3                               Additional
Payment of Purchase Price.

3.3.1                        In
addition to the Closing Payment set forth in Section 3.1, and subject to the
conditions set forth in this Section 3.3, Purchaser will make a payment (the “Additional Payment”) to Seller in an
amount of up to Two Million Five Hundred Thousand Dollars ($2,500,000) as soon
as practical after the expiration of the period from the Closing Date through
December 31, 2010 (the “Additional Payment Period”).

3.3.2                        Calculation
of Additional Payment.  For purposes
of calculating the compound annual growth rate of Revenue for this
Section 3.3.2, Revenue for 2007 will be annualized (on the basis of a
365-day year) from the Closing Date through December 31, 2007.

(a)                                  If
***, the Additional Payment will not be earned or payable.

(b)                                 If
***, the Additional Payment will equal One Million Two Hundred Fifty Thousand
Dollars ($1,250,000).

 13
 

A mark of
*** on this page indicates that confidential material has been omitted.  This Exhibit, including the omitted portions,
has been filed separately with the Secretary of the Securities and Exchange
Commission pursuant to an application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.

(c)                                  If
***, the Additional Payment will equal Two Million Five Hundred Thousand
Dollars ($2,500,000).

3.3.3                        Distribution
of the Additional Payment (if earned and payable) by Seller to the Members must
be made in proportion to the respective Member Percentage Interest of each
Member.

3.3.4                        Within
thirty (30) days after the end of each calendar month during the Additional
Payment Period, Purchaser will issue a report to the Seller Representative that
details for each of those periods (and cumulatively to date for the
then-current calendar year) the calculation of Revenue, Cost of Services, Gross
Profit, and Gross Margin (collectively, the “Additional
Payment Accounting”). 
Purchaser will pay all reasonable expenses in connection with the
preparation of the Additional Payment Accounting and determination of the
Additional Payment under this Section 3.3.4.

3.3.5                        As soon as
practical after the expiration of the Additional Payment Period, Purchaser will
provide to Seller the Additional Payment Accounting for the entire Additional
Payment Period together with the Additional Payment (if earned pursuant to the
terms of this Section 3.3), which will be paid in cash by Purchaser to Seller
in accordance with written payment instructions (the “Delivery
Instructions”) that Seller will provide to Purchaser within ten
(10) days of Purchaser’s requesting the same. 
The Delivery Instructions will specify the address (or addresses) to
which a check (or checks) for such amount will be sent (or appropriate account
and other information for purposes of delivery of such amount by wire transfer
of immediately available funds).

3.3.6                        Seller or
its designated agent may audit and/or inspect Purchaser’s records, books,
accounts and other data relating to the calculation of the Additional
Payment.  Seller must give Purchaser not
less than ten (10) days’ written notice of its intention to conduct any such
audit and may conduct no more than two such audits per calendar year.  Seller may also conduct an audit within
thirty (30) days after receipt of the final Additional Payment Accounting and
the Additional Payment (if any).  Any
audit must occur during Purchaser’s regular business hours and must be
conducted in a manner that is reasonably designed to minimize disruptions to
Purchaser’s business operations.  All
such audits will be conducted at Seller’s own cost and expense.  If within fifteen (15) days after completion
of any audit pursuant to this Section 3.3.6, the Seller Representative delivers
written notice to Purchaser that the Seller Parties disagree with the
Additional Payment Accounting or the calculation of the Additional Payment (the
“Disagreement Notice”), then Seller
and Purchaser will attempt in good faith to determine mutually the correct
Additional Payment Accounting or the amount of the Additional Payment, as
applicable.  If Seller and Purchaser
cannot in good faith mutually resolve their differences regarding the
Additional Payment Accounting or the Additional Payment within fifteen (15)
days after delivery of the Disagreement Notice (or such longer period as
mutually agreed by Seller and Purchaser), then a reputable regional accounting
firm, excluding the firm or firms that represent Purchaser and Seller, jointly

 14
 

A mark of
*** on this page indicates that confidential material has been omitted.  This Exhibit, including the omitted portions,
has been filed separately with the Secretary of the Securities and Exchange
Commission pursuant to an application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.

selected by Seller and Purchaser (the “Independent Firm”), will determine
the appropriate Additional Payment Accounting and/or compute the amount of the
Additional Payment, as applicable (in either case, the “Additional
Payment Computation”). 
The Additional Payment Computation will be final, conclusive and binding
on the parties to this Agreement.  If (i)
the amount of the Additional Payment Accounting calculated under the Additional
Payment Computation exceeds by more than 5% the amount of the Additional
Payment Accounting as calculated and provided to Seller by Purchaser, (ii) the
Additional Payment Computation indicates that the Additional Payment was due
and payable when Purchaser had notified Seller that it was not, or (iii) the
Additional Payment Computation indicates that a higher Additional Payment was
due and Payable than Purchaser calculated and delivered to Seller, then
Purchaser will reimburse Seller for the cost of the audit that led to the
Disagreement Notice (notwithstanding anything in this Section 3.3.6 to the
contrary) and will be responsible for the costs of performing the Additional
Payment Computation.  Otherwise, Seller
will be responsible for the costs of the Additional Payment Computation.  If the Additional Payment Computation
indicates that the Additional Payment Accounting is less than that calculated
by Purchaser, Purchaser may adjust its Additional Payment Accounting downward
to match the Additional Payment Computation. 
In the case of clause (ii) or (iii) above, Purchaser also will pay the
difference to Seller between any Additional Payment made and the Additional
Payment calculated under the Additional Payment Computation, plus accrued
interest on such difference at six percent (6%) from the date the Additional
Payment was originally due, in accordance with the Delivery Instructions no
later than five (5) days following receipt of the Additional Payment
Computation.  If the amount of the
Additional Payment calculated under the Additional Payment Computation is less
than the amount calculated under the Additional Payment Accounting, then Seller
will reimburse Purchaser for the difference no later than five (5) days
following receipt of the Additional Payment Computation.

3.4                               Operational
Impact on Additional Payments. 
***

3.5                               Accounts
Receivable.  Schedule 3.5
sets forth an accurate breakdown and aging of all Accounts Receivable,
including a complete itemization of all related invoices, that have been billed
as of January 31, 2007.  In order to also
capture all Accounts Receivable as of the Closing Date, Seller will provide
Purchaser, at Seller’s expense, with an updated Schedule 3.5, not later
than the thirtieth (30th) day following the Closing Date.  Any amount of the Accounts Receivable
collected by Purchaser will be remitted to Seller reasonably promptly following
collection.

3.6                               Client
Prepaid Balances.  Schedule
2.1.6 sets forth accurate
balances for (a) all client retainer balances
that have been paid as of January 31, 2007 but have not been applied to work
performed on or prior to January 31, 2007 and (b) payments received from
clients for services that have not been rendered as of January 31, 2007 ((a)
and (b) collectively, the “Client
Prepaid Balances”).  In
order to also capture all work performed or services rendered as of the end of
the business day immediately preceding

 15
 

the Closing Date to which client retainer balances or
other prepayments from clients as of that date should be applied, Seller will
provide Purchaser, at Seller’s expense, with a revised Schedule 2.1.6, not later than the
thirtieth (30th) day following the Closing Date, setting forth accurate
balances for (a) all client retainer balances
that have been paid as of the end of the business day immediately
preceding the Closing Date but are not
applicable to work performed prior to the Closing Date and (b) payments
received from clients for services that have not been rendered as of the
Closing Date ((a) and (b) collectively, the “Revised Client Prepaid Balances”).  Reasonably promptly after Seller
delivers the revised Schedule 2.1.6
to Purchaser, if the sum of the Client Prepaid
Balances is greater than the sum of the Revised Client Prepaid Balances, Purchaser
will pay Seller an amount equal to the difference between the sums or, if the
Revised Client Prepaid Balances is greater than
the sum of the Client Prepaid Balances, Seller will pay Purchaser an
amount equal to the difference between the sums.

4.                                      Covenants Not To Compete; Non-Solicitation.

4.1                               Covenant of Secura Directors Not to Compete.

4.1.1                        In consideration for the Purchase Price to be paid by
Purchaser under Section 3 of this Agreement, each Secura Director agrees that
during the Restrictive Period:

(a)                                  he or she will not, directly or indirectly, within
the Territory, engage in, or have any interest in any Person (whether as a
securityholder, creditor or otherwise) that engages in, any Restricted
Activities; and

(b)                                 he or she will not (i) other than on behalf of
Purchaser,  solicit from any Person any
business involving Restricted Activities, (ii) cause, induce, or attempt to
cause or induce any client or other business relation of Purchaser that is
attributable to the Secura Practice to cease doing business with Purchaser or
to deal with any competitor of Purchaser or take any action with respect to any
such client or other business relation that could reasonably be expected to
interfere with its relationship with Purchaser, in each case in connection with
the Restricted Activities, or (iii) cause, induce or attempt to cause or induce
any client or other business relation of a Seller Party on the Closing Date or
within the year preceding the Closing Date to cease doing business with
Purchaser or to deal with any competitor of Purchaser or take any action with
respect to any such client or other business relation that could reasonably be
expected to interfere with its relationship with Purchaser, in each case in
connection with the Restricted Activities.

4.1.2                        Each Secura Director acknowledges that the provisions
of this Section 4.1 are reasonable and necessary to protect and preserve
Purchaser’s legitimate business interests and the value of the Purchased Assets
and to prevent any unfair advantage being conferred on any Secura
Director.  Notwithstanding
anything to the

 16
 

contrary contained in this Agreement, each Secura
Director may own up to one percent (1%) of the capital stock or outstanding
debt securities of any entity engaged in any Restricted Activities that is
publicly traded, provided that he or she does not control, directly or
indirectly, through one or more entities or groups (whether formal or
informal), the voting or disposition of greater than one percent (1%) of the
aggregate beneficial ownership interest of any such entity.

4.2                               Covenant of Seller Not to Compete.

4.2.1                        In consideration for the Purchase Price to be paid by
Purchaser under Section 3 of this Agreement, Seller agrees that during the
Restrictive Period:

(a)                                  it will not, directly or indirectly, within the
Territory, engage in or have any interest in any Person (whether as a
securityholder, creditor or otherwise) that engages in any Restricted
Activities; and

(b)                                 it will not (i) solicit from any Person any business
involving Restricted Activities, (ii) cause, induce, or attempt to cause or
induce any client or other business relation of Purchaser that is attributable
to the Secura Practice to cease doing business with Purchaser or to deal with
any competitor of Purchaser or take any action with respect to any such client
or other business relation that could reasonably be expected to interfere with
its relationship with Purchaser, in each case in connection with the Restricted
Activities, or (iii) cause, induce or attempt to cause or induce any client or
other business relation of a Seller Party on the Closing Date or within the
year preceding the Closing Date to cease doing business with Purchaser or to
deal with any competitor of Purchaser or take any action with respect to any
such client or other business relation that could reasonably be expected to
interfere with its relationship with Purchaser, in each case in connection with
the Restricted Activities.

4.2.2                        Seller acknowledges that the provisions of this
Section 4.2 are reasonable and necessary to protect and preserve Purchaser’s
legitimate business interests and the value of the Purchased Assets and to
prevent any unfair advantage being conferred on Seller.  Notwithstanding anything to the
contrary contained in this Agreement, Seller may own up to one percent (1%) of
the capital stock or outstanding debt securities of any entity engaged in any
Restricted Activities that is publicly traded, provided that Seller does not
control, directly or indirectly, through one or more entities or groups
(whether formal or informal), the voting or disposition of greater than one
percent (1%) of the aggregate beneficial ownership interest of any such entity.

4.3                               Non-Solicitation.

4.3.1                        Each Secura Director agrees that he or she will not,
directly or indirectly, during the Non-solicitation Period, solicit, hire,
retain or attempt to hire or retain any employee of, or any independent
contractor who has an exclusivity contract

 17
 

with, Purchaser or Parent, who is
associated with the Secura Practice during the Additional Payment Period.  Each Secura Director acknowledges that this
Section 4.3.1 is reasonable and necessary to protect and preserve Purchaser’s
legitimate business interests and the value of the Purchased Assets and to
prevent any unfair advantage being conferred on any Secura Director.

4.3.2                        Seller will not, directly or indirectly, during the
Non-solicitation Period, solicit, hire, retain or attempt to hire or retain any
employee of, or any independent contractor who has an exclusivity contract
with, Purchaser or Parent, who is associated with the Secura Practice during the
Additional Payment Period.   Seller
acknowledges that this Section 4.3.2 is reasonable and necessary to protect and
preserve Purchaser’s legitimate business interests and the value of the
Purchased Assets and to prevent any unfair advantage being conferred on Seller.

4.4                               Separate Covenants.  The
covenants contained in Sections 4.1, 4.2 and 4.3 are a series of separate
covenants by each of the individual Secura Directors and by the Seller,
respectively, for each state and each country in the Territory.  Except for geographic coverage, each separate
covenant will be considered identical in terms to the covenant contained in
Section 4.1, Section 4.2 and Section 4.3 respectively.  If, in any judicial proceeding, a court refuses
to enforce any of the separate covenants, the unenforceable covenant or
covenants will be eliminated from this Section 4 for the purpose of those
proceedings to the extent necessary to permit the remaining separate covenants
to be enforced.

5.                                      Transfer Of Employees And Employee Benefits.

5.1                               Workers’ Compensation.  Without
limiting the scope of Excluded Liabilities under Section 2.4 of this Agreement,
Seller will be responsible for any workers’ compensation claims based on
injuries initially occurring prior to the Closing Date regardless of the date
on which the claim was filed and for subsequent re-injuries if a claim for the
initial injury was made prior to the Closing Date.  Seller will indemnify and hold Purchaser
harmless against any and all losses, damages, costs and expenses (including,
without limitation, reasonable attorneys’ fees and related expenses) arising
out of or relating to all such claims in accordance with Section 14.1 of this
Agreement.  All workers’ compensation
claims currently filed against Seller are listed on Schedule 5.1.

5.2                               Transfer of Employees.  In addition
to the employment of each Secura Director pursuant to the Director Agreements,
as a condition of the Closing, Purchaser will offer employment to all
other employees and independent contractors of Seller (excluding, for the
avoidance of doubt, any purported employment or independent contractor
relationship with Seller held by Donald J. Orndorff) with titles,
responsibilities, compensation and benefits comparable to those currently
provided by Seller to each such employee or independent contractor, subject to
any adjustments that

 18
 

may be necessary to conform to Purchaser’s customary
and usual employment policies and practices. 
Notwithstanding the foregoing, Purchaser will not be obligated to
provide continued employment to some administrative employees if their duties
are redundant with those of Purchaser’s existing employees; Purchaser will
identify such employees, if any, in consultation with Seller no later than
thirty (30) days after the Closing Date. 
In addition, Purchaser will have no continuing obligation after the
Closing Date to continue the employment of any employee or to maintain the
compensation of any employee at any particular level.  Those employees hired by Purchaser
will be referred to in this Agreement as the “Hired
Employees.”  Purchaser
will provide Seller with a list of the
Hired Employees no later than ten (10) days before the Closing.  On the Closing Date, Seller will terminate all of the Hired Employees and 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) payable as of the close of business on
the day preceding the Closing 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.  Seller is solely
responsible for any liability that may arise under the WARN Act as a result of
any acts or omissions of Seller on or before the Closing Date, or the
transactions contemplated by this Agreement (except as provided in the
following sentence), and will indemnify, defend and hold Purchaser harmless
from and against any and all such liabilities in accordance with Section 14.1
of this Agreement.  Purchaser is solely
responsible for any liability that may arise under the WARN Act as a result of
any acts or omissions of Purchaser after the Closing Date and any liability that
may arise under the WARN Act as a result of the transactions contemplated by
this Agreement to the extent that such liability would not have arisen had
Purchaser complied fully with its obligations to extend offers of employment to
Seller employees pursuant to this paragraph, and Purchaser will indemnify,
defend and hold Seller harmless from and against any and all such liabilities
in accordance with Section 14.2 of this Agreement.

5.3                               Employee Benefit Plans.  The parties
to this Agreement agree that Purchaser will not have any liability or
obligation to continue or to make any contribution or payment with respect to
any Employee Benefit Plan identified in Schedule 7.13.  Seller will indemnify and hold Purchaser
harmless against any and all losses, damages, costs and expenses (including,
without limitation, reasonable attorneys’ fees and related expenses) arising
out of or relating to any Employee Benefit Plan of Seller in accordance with
Section 14.1 of this Agreement.

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 of
this Agreement.  The Closing will
occur on March 16, 2007 at the offices of Folger Levin & Kahn, LLP, 1900
Avenue of the Stars, Suite 2800, Los Angeles, California 90067, or at such
other time on or prior to

 19
 

March 31, 2007 or other place as the parties may
mutually agree.  The “Closing Date” will be the
date on which the Closing occurs.  The
Closing will be effective for all purposes under this Agreement as of 12:01
a.m. local time on the Closing Date.

6.2                               Seller Party Deliveries at
Closing.  Subject to fulfillment or waiver of the
conditions set forth in Section 12, at the Closing the Seller Parties, as
applicable, will execute and/or deliver to Purchaser all of the following:

6.2.1                        A Certificate of Seller dated the Closing Date, in
form and substance reasonably satisfactory to Purchaser attaching a true and
correct copy of an action of Seller authorizing the execution (by identified
individuals) and performance of this Agreement and the other Transaction
Documents to which Seller is a party, and the transactions contemplated hereby
and thereby;

6.2.2                        A Bill of Sale in substantially the form attached to
this Agreement as Exhibit E, duly executed by Seller;

6.2.3                        The Assignment and Assumption Agreement, duly
executed by Seller;

6.2.4                        An opinion of counsel to the Seller in substantially
the form attached to this Agreement as Exhibit F-1;

6.2.5                        An opinion
of counsel with respect to the Seller Parties in substantially the form
attached this Agreement as Exhibit F-2;

6.2.6                        The closing certificate contemplated by Section 11 of
this Agreement;

6.2.7                        An Assignment of Lease in substantially the form
attached to this Agreement as Exhibit H (the “Lease
Assignment”), duly executed by Seller, for each of the Leases;

6.2.8                        The Director Agreements, duly executed by the
applicable Secura Director;

6.2.9                        Evidence reasonably satisfactory to Purchaser that
Seller has obtained the Errors and Omissions Tail Policy;

6.2.10                  The Escrow Agreement, duly executed by Seller and the
Escrow Agent;

6.2.11                  A written
agreement in a form subject to Purchaser’s reasonable approval, by and among
the Members, Seller and the Isaac Trust (as defined in Seller’s Amended and
Restated Limited Liability Company Operating Agreement (the

 20
 

A mark of
*** on this page indicates that confidential material has been omitted.  This Exhibit, including the omitted portions,
has been filed separately with the Secretary of the Securities and Exchange
Commission pursuant to an application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.

“Operating Agreement”))
pursuant to which the parties agree that neither the Isaac Trust’s right
pursuant to Section 7.2(a) of the Operating Agreement to acquire the membership
interest of a Member upon that Member’s termination of employment with the
Seller, nor the Members’ rights pursuant to Section 7.2(a) of the Operating
Agreement to acquire the membership interest of a Member upon that Member’s
termination of employment with Seller, nor Seller’s obligation pursuant to
Section 7.2(a) of the Operating Agreement to acquire the membership interest of
a Member upon that Member’s termination of employment with Seller shall apply
to the Secura Directors’ or Maguire’s termination of employment with Secura in
connection with the transactions contemplated by this Agreement;

6.2.12                  A written
agreement in a form subject to Purchaser’s reasonable approval, by and among
the Members and Seller, pursuant to which Seller waives any rights it may have
under Article 10 of the Operating Agreement to restrict any Member’s activities
in connection with that Member’s employment relationship with Purchaser after
the Closing; and

6.2.13                  All other such executed endorsements, assignments and
other instruments of transfer and conveyance consistent with the terms of this
Agreement and as may reasonably 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 (other than Permitted Liens) including,
without limitation, releases of the Purchased Assets from any lending
arrangements and any related bank consents.

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

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

6.3.2                        ***
of the cash portion of the Purchase Price as provided in Section 3.1 by wire
transfer of immediately available funds to an interest-bearing escrow account
(the “Escrow Account”) to be
established with a bank or trust company mutually agreed by Purchaser and
Seller (the “Escrow Agent”) pursuant to an
escrow agreement to be entered into among Purchaser, Seller and the Escrow
Agent in substantially the form attached hereto as Exhibit M (the “Escrow Agreement”).  The Escrow Agreement will provide for the
release of *** of the Escrowed Amount to Seller on the *** anniversary of the
Closing Date, provided that an amount equal to any claims made by Purchaser
under Section 14 before the *** anniversary of the Closing Date will be
retained in the Escrow Account pending resolution of those claims pursuant to
the terms of the Escrow Agreement.  The
Escrow Agreement will further provide for the release of the remaining

 21
 

A mark of
*** on this page indicates that confidential material has been omitted.  This Exhibit, including the omitted portions,
has been filed separately with the Secretary of the Securities and Exchange
Commission pursuant to an application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.

Escrowed Amount to Seller on the *** anniversary of
the Closing Date, provided that an amount equal to any claims made by Purchaser
under Section 14 before the *** anniversary of the Closing Date will be
retained in the Escrow Account pending resolution of those claims pursuant to
the terms of the Escrow Agreement.

6.3.3                        An Officer’s Certificate of Parent, 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 other Transaction Documents by Purchaser, and the
transactions contemplated hereby and thereby; and (ii) containing incumbency
certificates for the individuals authorized to execute this Agreement and all
related agreements on behalf of Purchaser;

6.3.4                        The Escrow
Agreement, duly executed by Purchaser and the Escrow Agent;

6.3.5                        The Assignment and Assumption Agreement, duly executed
by Purchaser;

6.3.6                        An opinion
of counsel to the Purchaser in substantially the form attached to this
Agreement as Exhibit G;

6.3.7                        The closing certificates contemplated by Section 12
of this Agreement;

6.3.8                        Each Lease Assignment, duly executed by Purchaser;
and

6.3.9                        The Director Agreements, duly executed by Purchaser.

7.                                      Representation And Warranties Of Seller.

As an
inducement to Purchaser and Parent to enter into this Agreement and to
consummate the transactions contemplated in this Agreement, the Seller
represents and warrants to Purchaser and Parent and agrees as follows:

7.1                               Organization and Valid
Existence.  Seller is a limited liability company
duly formed and existing in good standing under the laws of the State of
Delaware.  Seller has all requisite
limited liability company power and authority to own and operate its properties
and assets, to enter into and perform this Agreement and the other Transaction
Documents, and to carry on the Business as currently conducted.  Seller is
duly qualified to do business as a foreign limited liability company and is in
good standing in all jurisdictions wherein the character of the property
owned or leased or the nature of the activities conducted by it makes such
qualification necessary, except where the failure to so qualify could not
reasonably be expected to have a Material Adverse Effect.  Schedule 7.1 provides a complete
listing of all such jurisdictions.

 22
 

7.2                      Authority of Seller.  The
execution and delivery of this Agreement and the other Transaction Documents by
Seller and the consummation by Seller of the transactions contemplated hereby
and thereby have been duly authorized by Seller and the Members and no other
consent or approval is required.  This
Agreement has been duly and validly executed and delivered by each of the
Seller Parties.  This Agreement and the
other Transaction Documents, as applicable, constitute the valid and legally
binding obligations of each Seller Party signatory thereto, enforceable against
each Seller Party signatory thereto in accordance with their respective terms,
except as may be limited by the Enforceability Limitations.

7.3                      Ownership of Seller Equity.  The Members
own, beneficially or of record, all of the equity interests of Seller,
excluding any assertion by Donald J. Orndorff that he owns an equity interest
in Seller.

7.4                      No Violations.  Neither the
execution and delivery of this Agreement or the other Transaction Documents,
the consummation of any of the transactions contemplated hereby or thereby, nor
the fulfillment of any of the terms of this Agreement, except to the extent
disclosed in this Agreement or in any schedule to this Agreement, (i) will
violate or conflict with the Certificate of Formation or the Operating Agreement of Seller or any other agreement between
Seller and the Members, (ii) will result in any material breach of or any
material default (including events of acceleration, termination or cancellation
or loss of rights) under any provision of any Contract, or (iii) will
result in a material violation of any statutes, laws, ordinances, rules,
regulations or requirements of Governmental Bodies having jurisdiction over the
Business or Seller.

7.5                      Financial Statements.  Seller
has delivered to Purchaser Seller’s audited financial statements for the 2004
and 2005 fiscal years, and Seller’s unaudited financial statements for the 2006
fiscal year (collectively, the “Year-End Financial
Statements”).  The
Year-End Financial Statements present fairly the financial condition of Seller
and the results of Seller’s operations for the periods indicated (subject, in
the case of the unaudited financial statements for 2006, to normal year-end
adjustments).  Seller has also delivered
to Purchaser balance sheets and the statements of income of Seller for the
one-month period ended January 31, 2007 (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 Seller 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 in this Agreement as the “Financial
Statements.”  The
Financial Statements are collectively attached to this Agreement as Exhibit
I;

 23

7.6                               Absence of Certain Changes.  Except (i)
as disclosed in the Financial Statements or in any Schedule delivered pursuant
to this Agreement; (ii) for the execution and delivery of this Agreement and
any applicable Transaction Document; and (iii) as set forth in Schedule 7.6,
Seller has not since the Interim Financial Statement Date:

7.6.1                        Had any Material Adverse Change;

7.6.2                        Suffered any damage, destruction or loss of physical
property (whether or not covered by insurance) that could reasonably be expected
to have a Material Adverse Effect;

7.6.3                        Sold, transferred or otherwise disposed of, or agreed
to sell, transfer or otherwise dispose of, any assets (other than cash) having
a fair market value at the time of sale, transfer or disposition of $10,000 or more
in the aggregate, other than in the ordinary course of business and consistent
with past practice;

7.6.4                        Increased, or agreed 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 consistent with past practices of Seller and any discussions of
possible future compensation arrangements with Purchaser, and no such increases
are required by written agreement or, to the Knowledge of Seller, 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;

7.6.5                        Had any strike or work stoppage;

7.6.6                        Made any change in its accounting methods or
practices with respect to its Business or the Purchased Assets; or

7.6.7                        Entered into any Material transaction not in the
ordinary course of its Business consistent with past practice.

7.7                               Title to and Condition of
Purchased Assets.  Seller has good and valid title to, or a
valid leasehold interest in, all of the Purchased Assets, free and clear of any
Liens, except for the Permitted Liens.

7.8                               Real Estate.  The conduct of the Business on the
premises to which the Leases pertain is not in violation of any law, statute,
ordinance, rule or regulation of any Governmental Body in any Material respect
(including, without limitation, those concerned with environmental or
occupational safety standards).

7.9                               Contracts.  “Contracts”
means all contracts, equipment leases, work orders, client engagement letters,
retainer letters, fee agreements and other agreements or

 24
 

arrangements entered into by Seller
with respect to the Business or to which the Purchased Assets may be
subject.  Schedule 7.9 contains a
complete list (and, in the case of oral agreements, contracts or leases, a
summary of the material terms) of all Material Contracts and all client
engagement letters, retainer letters, and fee agreements, Material or not,
pursuant to which Secura has billed fees within the twelve months prior to
Closing or, to the Knowledge of Seller, pursuant to which Secura has future
obligations to perform billable work. 
The Contracts are valid, binding and enforceable by Seller in accordance
with their respective terms and are in full force and effect, except as may be
limited by the Enforceability Limitations. 
Seller has delivered to Purchaser true and complete copies of the
Contracts listed in Schedule 7.9 and all client engagement letters,
retainer letters and fee agreements, regardless of whether they are Material,
and all amendments thereto, other than those oral agreements summarized on Schedule
7.9.  Seller has complied in all
Material respects with all of the Contracts and is not in Material default
under any of the Contracts.  To the
Knowledge of Seller, no other party is in default in the observance or the
performance of any Material term or obligation to be performed by it under any
Contract listed in Schedule 7.9.

7.10                        Litigation.  Except as
described on Schedule 7.10, there is no litigation, proceeding (arbitral
or otherwise), claim or investigation of any nature pending or, to the
Knowledge of Seller, threatened against Seller relating to either the Business
or the Purchased Assets.  Except as
described on Schedule 7.10, there are no writs, injunctions, decrees,
arbitration decisions, unsatisfied judgments or similar orders outstanding
against Seller relating to either the Business or the Purchased Assets.

7.11                        Intellectual Property.

7.11.1                  Schedule 7.11 contains an accurate and complete list of the Owned IP Assets that are
registered or subject to an application for registration in Seller’s name (including
domain names), all software licensed by Seller to third parties, all material
logos currently used by Seller in the conduct of the Business, and all trade
names under which the Business is operated. 
Seller has delivered to Purchaser copies of all documents (if any)
establishing Seller’s ownership of or rights to use the Owned IP Assets.

7.11.2                  Seller owns, or has a valid right to, use all
Intellectual Property Rights that are Material to the Business as presently
conducted.  Schedule 7.11.2 contains
an accurate and complete list of Material Third Person Licenses, which are
capable of assignment from Seller to Purchaser.

7.11.3                  There are no
third Person claims pending or, to the Knowledge of Seller, threatened in
writing, before any Governmental Body or court, against any Seller Party
alleging that any of the Owned IP Assets infringe Intellectual Property Rights
of any other Person.

 25
 

7.11.4                  Seller’s rights
in and to the Owned IP Assets are freely assignable, including the right to
create derivative works, and to the Knowledge of Seller, Seller is not under
any obligation to pay any royalty or other compensation to any third Person or
to obtain approval or consent for use of licensing any of the Owned IP
Assets.  Except as disclosed in Schedule
7.11, all of the interests of Seller in the Owned IP Assets are free and
clear of all Liens, other than Permitted Liens, and to the Knowledge of Seller,
are not currently being infringed in any way or challenged in any pending legal
or administrative proceeding before any Governmental Body or court.  Except for
licenses to clients in the ordinary course of business or as otherwise
disclosed in Schedule 7.11, no Material current licenses or other
rights for the use of the Owned IP Assets have been granted by Seller to any
third Persons and Seller has no obligation to grant any such licenses or
rights.

7.11.5                  To the Knowledge
of Seller, no person (whether a current or former employee or independent
contractor of Seller) is entitled to claim or has claimed prior to the date
hereof under any statute, contract or otherwise for compensation or any other
payment from the Seller in relation to any Owned IP Assets.

7.11.6                  Seller does not make any representation and warranty
regarding the performance or functionality of any third Person software or
technology licensed to Seller pursuant to the Third Person Licenses or
regarding the performance or functionality of those items of Intellectual
Property Rights that are standard, “off-the-shelf” items that Seller uses for
word processing, accounting, database management, programming languages,
development tools, office management, or similar functions.

7.12                        Compliance with Laws.  Except to
the extent otherwise specifically referred to in this Agreement, Seller has at
all times complied with, and is in compliance with, all federal, state, local
and foreign statutes, laws, ordinances, regulations, rules, permits, judgments,
orders or decrees applicable to Seller, the Business and the Purchased Assets,
except where the failure to comply will not have a Material Adverse Effect.

7.13                        Employee Benefit Plans.  Schedule
7.13 contains a true and complete list of all Employee Benefit Plans
maintained by Seller.  There has been no
failure by such Employee Benefit Plans to comply with any applicable laws
relating to labor and employee benefits, including, without limitation, any
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, for which such failure Purchaser would be liable
in any Material amount.

7.14                        Taxes.  Except as
otherwise indicated in Schedule 7.14, there are no Tax liens on any of
the Purchased Assets.  The Seller Parties
have paid all Material Taxes that

 26
 

are due from them with respect to
the Purchased Assets and have duly filed all Tax returns and reports required
to be filed by them with respect to the Purchased Assets.

7.15                        Insurance.  Schedule
7.15 contains a complete listing 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 Seller.  Except for the Errors and Omissions
Tail Policy, which policy will survive Closing for the period of time specified
in Section 11.5, all such policies will remain
in full force and effect at least up to and inclusive of the Closing Date.  Seller has provided Purchaser with a
true and complete copy of the Errors and Omissions Tail Policy.

7.16                        Employment Matters. 
Except as disclosed in Schedule 7.16, Seller has no unsatisfied liability to any previously terminated employee
or independent contractor. All persons employed by Seller are employees at will
(subject to the rights of Isaac under the Operating Agreement).

7.17                        Brokers.  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.

7.18                        Business Relations.  Except as
otherwise indicated in Schedule 7.18, Seller has not received any
written notice or, to the Knowledge of Seller, any oral notice that any client,
supplier or vendor engaged in or doing business with Seller will cease to do
business (other than as a result of completion of engagements or assignments
commenced prior to the Closing Date) with Purchaser as a result of the
consummation of the transactions contemplated hereby, except for any cessation
that, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.  Except
as otherwise indicated in Schedule 7.18, Seller has not, within the last
twelve (12) months, received any written notice or, to the Knowledge of Seller,
any oral notice that any client, supplier or vendor engaged in or doing
business with Seller will cease to do business (other than as a result of
completion of engagements or assignments commenced prior to the Closing Date)
with Purchaser for any other reason, except for any cessation that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect. Within the last twelve (12) months, no Seller Party
has received a written or oral notice of a Material dispute or problem, or
Material dissatisfaction with Seller from any client of Seller.  To the Knowledge of Seller, the consummation
of the transactions contemplated by this Agreement will not have a Material
Adverse Effect on any relationships with any clients of Seller.

7.19                        Warranty; Nonbillable Work.  All
services rendered by Seller have been in Material conformity with all
applicable contractual commitments and all warranties, and Seller has no
Material liability for damages in connection therewith.  Seller is not obligated to perform
nonbillable client service work under the terms of any Contract in order to
correct work previously performed that was incorrect or deficient, to

 27
 

complete work in excess of the fixed
fee 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 in Schedule 7.19, Seller is not a party to any fixed fee or
capped price contracts or engagement arrangements involving work not completed
prior to the Closing Date that if billed at Seller’s normal hourly rates would
exceed $10,000 in annual revenues, nor does Seller have any outstanding offers,
bids or proposals to perform any services on a fixed fee or capped basis
exceeding such amount; provided, however, that Purchaser
acknowledges that from time to time Seller provides estimated budgets to
clients in connection with engagements and that the incurrence of fees and
expenses beyond such estimated budgets are subject to client approval.

7.20                        Employees.  Except as otherwise indicated in Schedule 7.20,
no key employee or group of employees has informed Seller that he, she, or they
are unwilling to accept any offer of employment from Purchaser.

7.21                        Consents.  The
execution, delivery and performance of this Agreement and the other Transaction
Documents by each of Seller and (where applicable) each of the Members do not
require the consent, approval authorization or act of, or the making by Seller
or the Members of any declaration, filing or registration with, any
Governmental Body or any other Person, including, in
the case of the Members, a spouse of any of them, that applies to or
binds Seller or any Member that has not been
obtained or made or that will not have been obtained or made as of the Closing
Date.

7.22                        Schedules.  Any information set forth in or
attached to any Schedule delivered or required to be delivered pursuant to this
Agreement is current as of the date of this Agreement unless otherwise
specified in this Agreement or unless updated as required pursuant to Section
9.5, and will be deemed to constitute disclosure for any other Schedule delivered
or to be delivered pursuant to this Agreement.

7.23                        Accuracy of Disclosure.  No
representation or warranty made by Seller in this Section 7, and no exhibit,
certificate, schedule, list or instrument prepared, made or delivered, or to be
prepared, made or delivered, by or on behalf of a Seller Party pursuant to this
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements
contained here in and therein not misleading.

7.24                        No Other Warranties or Representations.  EXCEPT FOR
THE EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS SECTION 7 MADE BY
SELLER AND SELLER ALONE, (I) NO SELLER PARTY MAKES ANY REPRESENTATIONS OR
WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, CONCERNING THE PURCHASED ASSETS OR
THE BUSINESS OR ITS ASSETS, LIABILITIES, OR OPERATIONS, INCLUDING, WITHOUT
LIMITATION, ANY REPRESENTATION OR WARRANTY AS TO VALUE,

 28
 

QUANTITY, QUALITY, CONDITION,
MERCHANTABILITY, SUITABILITY FOR USE, SALABILITY, OBSOLESCENCE, WORKING ORDER,
VALIDITY OR ENFORCEABILITY OR AS TO ANY INFORMATION, DATA, STATEMENTS,
FINANCIAL PROJECTIONS, OR OTHER MATERIALS PROVIDED DURING THE COURSE OF
PURCHASER’S INVESTIGATIONS, AND (II) PURCHASER SPECIFICALLY ACKNOWLEDGES THAT
NO WARRANTIES THAT ANY OF THE PURCHASED ASSETS ARE MERCHANTABLE OR FIT FOR ANY
PARTICULAR PURPOSE ARE MADE OR SHOULD BE IMPLIED.

8.                                      Representations Of Purchaser And Parent.

As an inducement to the
Seller Parties to enter into this Agreement and to consummate the transactions
contemplated in this Agreement, Purchaser and
Parent jointly and severally represent and warrant to the Seller Parties and
agree as follows:

8.1                               Organization and Authority.  Purchaser
is a duly formed limited liability company and is existing in good standing
under the laws of the State of California. 
Purchaser has all requisite limited liability company power and
authority to own its properties and assets and to carry on its business as now
conducted.  Purchaser has the limited
liability company power to execute, deliver and perform this Agreement.  Parent is a corporation duly organized and
existing in good standing under the laws of the State of Delaware, is qualified
to do business in California, and has the requisite corporate power and authority
to own its properties and assets and to carry on its business as now
conducted.  Each of Purchaser and Parent
is duly qualified to do business as a foreign
limited liability company or corporation, as applicable, in all jurisdictions
wherein the character of the property owned or leased or the nature of the
activities conducted by it makes such qualification necessary, except where the
failure to so qualify could not reasonably be expected to have a Material
Adverse Effect.

8.2                               Authorization of Agreement.  Purchaser
and Parent each have the requisite power and authority to execute and
deliver this Agreement and the other Transaction Documents and to consummate
the transactions contemplated hereby.  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 on the part of Purchaser, and by all requisite
corporate action on the part of Parent, and no other consent or approval is
required.  This Agreement and the other
Transaction Documents have been duly and validly executed and delivered by
Purchaser and Parent.  This Agreement and
the other Transaction Documents constitute the valid and legally binding
obligations of Purchaser and Parent, enforceable against each of them in
accordance with their respective terms, except as may be limited by the
Enforceability Limitations.

8.3                               No Violations.  Neither the
execution or delivery of this Agreement, the consummation of any of the
transactions contemplated hereby, nor the fulfillment of any

 29
 

of the terms of this Agreement,
except to the extent disclosed in this Agreement, (i) will violate or
conflict with the Articles of
Organization or Operating Agreement of Purchaser or the Certificate of
Incorporation or Bylaws of Parent, (ii) will result in any material breach of
or any default (including events of acceleration, termination or cancellation
or loss of rights) under any provision of any contract or agreement to which
Purchaser or Parent is a party or by which Purchaser or Parent is bound, or
(iii) will result in a material violation of any statutes, laws,
ordinances, rules, regulations or requirements of Governmental Bodies having
jurisdiction over Purchaser or Parent.

8.4                               Litigation; Compliance with
Law.  Except as otherwise disclosed in the Parent
SEC Reports, 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 that could reasonably be
expected to have a Material Adverse Effect on Purchaser or Parent or to have
any material effect on Purchaser’s or Parent’s ability to perform in accordance
with the terms of this Agreement.

8.5                               SEC Filings.  Parent has filed, and has made available to
the Seller Parties, true and complete copies of all forms, reports, schedules,
statements, and other documents required to be filed by it under the 1933 Act
and the 1934 Act (such forms, reports, schedules, statements and other
documents are each referred to as a “Parent SEC Report”).  Each such filing complies in all material
respects with all applicable federal or state securities laws and regulations.

8.6                               No Finder.  Neither
Purchaser, Parent, nor any Person acting on their 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.

8.7                               Consents.  All consents, approvals, authorizations or
acts of, or the making by Purchaser or Parent of any declaration, filing or
registration with, any Governmental Body or any other Person that apply to or
bind Purchaser or Parent and that are required to be obtained or made as of the
Closing Date in connection with the execution, delivery and performance of this
Agreement and the other Transaction Documents, will have been obtained or made
as of the Closing Date.

8.8                               Acknowledgements by Purchaser.  Purchaser acknowledges that in making the
decision to enter into this Agreement and to consummate the transactions
contemplated hereby, other than reliance on the representations, warranties,
covenants and obligations of Seller and the covenants of the Members explicitly
set forth in this Agreement, Purchaser has relied solely upon its independent
investigation, analysis and evaluation of the Business and of the transactions
contemplated by this Agreement (including its own estimate and appraisal of the
value of the Business and its financial conditions, assets, operations, and
prospects).  Purchaser confirms to Seller
that it has had full opportunity to discuss, ask questions, and obtain data
regarding the Business, this

 30
 

Agreement, and the transactions contemplated hereby
with Seller and any other person authorized to act on behalf of Seller, and
Purchaser is sophisticated, knowledgeable, and capable of evaluating the
matters set forth above.

9.                                      Pre-Closing
Covenants.

9.1                               Affirmative
Covenants.  From the date of this
Agreement until the Closing Date, the Seller Parties will, and will cause the
employees of Seller, as applicable, to:

9.1.1                        Conduct
the Business in ordinary course and in compliance with all legal requirements
applicable to the Business;

9.1.2                        Pay all of
the liabilities and Taxes of the Business incurred prior to the Closing Date
when due, except for liabilities or Taxes being contested in good faith (which
will be paid by Seller when due and will not become an Assumed Liability); and

9.1.3                        Maintain
existing insurance coverages; use all commercially reasonable efforts to
(i) preserve intact all rights of the Business to retain its employees;
and (ii) maintain good relationships with its employees, clients,
suppliers, and others having business dealings with the Business.

9.2                               Restrictions
on Conduct of the Business Prior to Closing.  From the date of this Agreement until the
Closing Date, no Seller Party, with respect to the Business, will, directly or
indirectly, without Purchaser’s prior written consent:

9.2.1                        Enter
into, create, incur or assume (i) any borrowings under capital leases or
(ii) any other Material obligations;

9.2.2                        Acquire by
merging or consolidating with, or by purchasing any equity securities or assets
of, or by any other manner, any business or any entity;

9.2.3                        Sell,
transfer, lease, license or otherwise encumber any of the Purchased Assets or
enter into any agreement, contract, memorandum or understanding regarding such
a sale, transfer, lease or license, in each case other than in the ordinary
course of business;

9.2.4                        Enter into
any Material contracts or commitments with another Person, other than such
contracts approved in advance by Purchaser or that can be canceled on less than
30 days written notice, provided that such approval will not be unreasonably withheld
or delayed; provided further, that Seller may enter into new client
engagements subject to compliance with Purchaser’s conflict check procedure;

9.2.5                        Violate
any material legal requirement applicable to Seller or the Business;

 31
 

9.2.6                        Purchase,
license or otherwise acquire any assets, except in the ordinary course of
business;

9.2.7                        Change its
credit practices, accounting methods or practices or standards used to maintain
its books, accounts or business records;

9.2.8                        Incur or
become subject to any liability, contingent or otherwise, except current
liabilities in the ordinary course of business;

9.2.9                        Enter into
an agreement, contract, memorandum or understanding for the sale of all or any
part of the membership interests of Seller without the prior written consent of
Purchaser, which consent may be granted or withheld by Purchaser in its sole
discretion;

9.2.10                    Fail to use commercially reasonable efforts
to maintain the Purchased Assets in their existing order and condition,
reasonable wear and tear excepted; or

9.2.11                    Agree, in writing or otherwise, to take any
of the actions proscribed by this Section 9.2, or any action that would make
any of its representations or warranties contained in this Agreement untrue or
incorrect in any Material respect or prevent it from performing or cause it not
to perform its covenants hereunder.

9.3                               Certain
Notifications by Parties.  From
the date of this Agreement until the Closing, each of Seller and Purchaser will
promptly notify the other in writing if it has Knowledge of any:

9.3.1                        Fact,
circumstance, event, or action by it (i) which, if known on the date of
this Agreement, would have been required to be disclosed in or pursuant to this
Agreement; or (ii) the existence, occurrence, or taking of which would
result in any of the representations and warranties made by it contained in
this Agreement or in any agreement entered into in connection herewith not
being true and correct in any material respect at the time made or at Closing;
or

9.3.2                        Material
breach of any of its covenants or obligations hereunder.

9.4                               Risk
of Loss.  The risk of any
loss, damage or impairment, confiscation or condemnation of the Purchased
Assets or any part thereof from fire or any other casualty or cause will be
borne by Seller at all times prior to the Closing Date.

9.5                               Updating
the Seller Parties Disclosure Schedules.  If any event, condition, fact or circumstance
that is required to be disclosed pursuant to Section 7 would require a change
to the disclosure schedules referenced therein if such disclosure schedules
were dated as of the date of the occurrence, existence or discovery of such
event, condition, fact or circumstance (provided, for the avoidance of doubt,
that

 32
 

representations, warranties, or covenants made as of a
specified date shall continue to be understood as being made as of that date),
then the Seller Parties will promptly deliver to Purchaser an update to the
applicable disclosure schedule specifying such change.  Such update will be deemed to amend the
applicable disclosure schedule for all purposes hereunder, provided,
however, that no such update will be deemed to supplement or amend
the applicable disclosure schedule for the purpose of determining whether any
of the conditions set forth in Section 11 have been satisfied.  For the avoidance of doubt, if Purchaser
elects to proceed with the Closing following any update delivered prior to the
Closing pursuant to this Section, any such update shall be deemed to be a part
of the original schedule for all purposes hereunder.

9.6                               Access
to Information.  From the date of
this Agreement until the Closing, Seller will (a) permit Purchaser and its
representatives to have reasonable access during regular business hours to all
premises, properties, personnel, books, records, Contracts, and Documents of or
pertaining to the Business; (b) furnish Purchaser with all financial,
operating and other data and information related to the Business (including
copies thereof), as Purchaser may reasonably request; and (c) otherwise
cooperate and assist, to the extent reasonably requested by Purchaser, with
Purchaser’s investigation of the Business, the Purchased Assets and the Assumed
Liabilities; provided that no such access or request materially
interferes with the normal operation of the Business.  No information or knowledge obtained in any
investigation pursuant to this Section 9.6 will affect or be deemed to modify
any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the transactions contemplated
hereunder.

10.                               Affirmative Covenants.

10.1                        Confidentiality.  After
the Closing, each of the parties to this Agreement agrees that it will treat in
confidence this Agreement and all documents, materials and other information
that it may have obtained regarding the other parties 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), except under the Patriot Act, 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 that the Recipient believes in
good faith to be required by federal securities laws or any listing or trading
agreement concerning the Recipient’s publicly-traded securities, after
reasonable advance notice to the Protected Party.)  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 that it is legally compelled or explicitly

 33
 

permitted to disclose and must
exercise its reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded any confidential information so furnished.  Notwithstanding any provision of this
Agreement or the Term Sheet dated December 8, 2006 to the contrary, the
obligation of each party to treat such documents, materials and other
information in confidence will not apply to any information (i) if Parent or
Purchaser is the Recipient, that relates directly to the Purchased Assets or
the Assumed Liabilities, (ii) that is or becomes available to such party from a
source other than the Protected Party, unless the source is bound by a
confidentiality agreement with respect to the information, (iii) that is or
becomes available to the public other than as a result of improper disclosure
by such party or its agents, or (iv) the disclosure of which such party
reasonably deems to be necessary in order to obtain any of the consents or
approvals contemplated hereby, provided such party obtains the prior written
consent of the Protected Party.

10.2                        Public Announcements.  The parties
agree that any press release to be issued in connection with the execution of
this Agreement or the announcement of the consummation of the transactions
contemplated hereunder, will be mutually agreed upon by Purchaser and Seller
prior to the issuance thereof.

10.3                        Taxes.

10.3.1                  The Seller Parties will be solely liable for and will
pay all Taxes (whether assessed or unassessed) applicable to the Business and
the Purchased Assets, in each case attributable to any period (or portions
thereof) ending prior to the Closing Date, including, without limitation, all
income or franchise Taxes arising in connection with the consummation of the
transactions contemplated by this Agreement. 
If Seller intends to dissolve or be wound up, the Seller Parties will
promptly file any final Tax returns in connection with such dissolution or
winding up.  Purchaser will be liable for
and will pay all Taxes (whether assessed or unassessed) applicable to the
Business and the Purchased Assets, in each case attributable to periods (or
portions thereof) beginning on or after the Closing Date.  For purposes of this Section 10.3, any period
beginning before and ending after the Closing Date will be treated as two
partial periods, one ending immediately prior to the Closing Date and the other
beginning on the Closing Date except that Taxes (such as property Taxes)
imposed on a periodic basis will be allocated on a daily basis.

10.3.2                  Notwithstanding Section 10.3.1, any sales Tax, use
Tax, Transfer Tax or similar Tax attributable to the sale or transfer of the
Purchased Assets will be equally divided between Seller and Purchaser.  Seller and Purchaser agree to timely sign and
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.

10.3.3                  The Seller (on behalf of any Seller Party) 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 10.3.

 34
 

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, but failure to give that notice does not relieve any party from its
liability under this Section 10.3.

10.4                        Further Assurances.

10.4.1                  From and after the Closing Date, the Seller Parties
will take all such steps as may be necessary to put Purchaser in actual
possession and operating control of the Purchased Assets, and the Seller
Parties agree that at any time or from time to time (without further cost or
expense to Purchaser) after the Closing Date, upon the reasonable request of
Purchaser, the Seller Parties 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 title to any of the Purchased
Assets.

10.4.2                  To the extent Seller 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
practical, deliver such Purchaser Funds to Purchaser 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.

10.4.3                  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 practical, 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
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 Purchaser to evidence such power of attorney.

10.4.4                  Within ten (10) days
after the Closing Date, Seller will take all actions and make all filings
necessary to change its name to a name that does not include the name “Secura.”  After the Closing, Purchaser will maintain
Seller’s brand identity, including the use of the names “Secura” and “Secura
Group” for so long as Purchaser believes in its sole discretion that it is
commercially productive to do so; however, as of the Closing Date, Seller’s
brand will be associated with Purchaser’s brand in such manner

 35
 

as Purchaser deems reasonably appropriate.  Purchaser may at its sole option register “Secura”
and/or “Secura Group” as a fictitious business name and/or as a division of
Purchaser to maintain Seller’s brand.

10.4.5                  At any time or from time to time after the Closing,
each party hereunder will, 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.

10.5                        Retained Information.  For a period
of seven (7) years following the Closing, to the extent not prohibited by law
or restricted by applicable ethical rules, Purchaser will make available to the
Seller Parties any business records related to the operations of Seller prior
to the Closing that are transferred to Purchaser at the Closing (the “Transferred Business Records”) for
inspection and copying to the extent the Seller Parties require access to such
records in response to tax audits or for any other reasonable business purpose.
Subject to such seven (7) year limit, Purchaser agrees to maintain or make
available the Transferred Business Records, or copies thereof, in the Vienna,
Virginia facility currently occupied by Seller for as long as Purchaser
continues to operate that facility, and in the nearest alternative facility of
Purchaser if Purchaser ceases to operate that facility. The Seller Parties’
access to the Transferred Business Records is subject to the confidentiality
obligations of Seller under Section 10.1 of this Agreement.  After the Closing, Seller, to the extent not
prohibited by law or restricted by applicable ethical rules, will make
available to Purchaser any business records related to the operations of Seller
prior to the Closing that 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 any reasonable business purpose. 
Purchaser’s access to the Retained Business Records is subject to the confidentiality
obligations under Section 10.1 of this Agreement.  Notwithstanding the foregoing, Purchaser
waives any and all rights, including the right to inspect and copy, with
respect to all of the books, files, documents and records of attorneys or accountants
relating to their respective representations of any Seller Party in connection
with the negotiation, execution and delivery of this Agreement.

10.6                        Updated
Financial Statements; Reimbursable Expenses.

10.6.1                  Within sixty
(60) days after the Closing, Seller will prepare and deliver to the Purchaser
balance sheets and statements of income of Seller, prepared by Seller
consistent with prior practices, for the period beginning the day after the
Interim Financial Statement Date and ending the day immediately preceding the
Closing Date.  Seller will also provide
to Purchaser updated Accounts Receivable pursuant to Section 3.5 and Revised
Client Prepayment Balances pursuant to Section 3.6.

10.6.2                  Prior to the
Closing Date, Seller will have paid certain expenses ̧ some or all of the
benefits of which will accrue to Purchaser after the Closing.

 36
 

Accordingly, within thirty (30) days after the
Closing, Mancusi and J. Geoffrey Colton (“Colton”)
(or their respective designees), will meet on behalf of Seller and Purchaser,
respectively, to reconcile such expenses and to determine a fair and equitable
allocation of such expenses between Seller and Purchaser.  Mancusi will deliver documentation of all
such expenses to Colton at or before such meeting.  To the extent applicable, Purchaser will
reimburse Seller for expenses paid by Seller that have accrued to the benefit
of Purchaser within fifteen (15) days after such meeting.  To the extent Seller subsequently incurs any
additional expenses, the benefits of which will accrue or have accrued to
Purchaser, Purchaser and Seller will agree on a fair and equitable allocation
of such expenses, and Purchaser will reimburse Seller for expenses paid by
Seller that have accrued to the benefit of Purchaser.

10.7                        Distribution
of Payments.  Notwithstanding
anything in this Agreement to the contrary, Seller will ensure that the
distribution of any proceeds under this Agreement, whether with respect to the
Closing Payment or the Additional Payment (if any), is made solely in proportion
to each Member’s respective Member Percentage Interest.  Seller will immediately reverse any
distribution of proceeds that is made contrary to the provisions of this
Section 10.7.

10.8                        Support
for Ongoing Seller Activities. 
Purchaser agrees to hire Maguire on a half-time basis for a period of
eighteen (18) months following the Closing Date, with compensation (taking into
account Maguire’s part-time status) and benefits (which shall not be reduced as
a result of Maguire’s part-time status) that are at least comparable to those
enjoyed by Maguire in her position with Seller immediately prior to the
Closing.  Purchaser agrees to provide
Maguire with reasonable and customary office space and support as part of the
Business.  Purchaser and Seller agree
that Maguire will be available to the Seller Parties as needed to assist with
the winding up of Seller’s affairs and will be available to Purchaser to assist
with Purchaser’s operation of the Business.

11.                               Conditions
Precedent To Obligations Of Purchaser And Parent.

The
obligations of Purchaser and Parent under this Agreement are subject to the
fulfillment of all 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 execute and
deliver a certificate in substantially the form attached to this Agreement as Exhibit
J certifying the satisfaction of all of the conditions precedent set forth
in this Section 11 and not waived.  If any of the conditions precedent to
the obligations of Purchaser and Parent are not satisfied or waived on the
Closing Date, Purchaser will have the right to elect not to proceed with the
Closing, in which case the parties will have no further rights or obligations
under this Agreement, the Director Agreements or otherwise.

11.1                        Closing
Deliverables.  The Seller Parties
will have made all the deliveries required under Section 6.2 of this Agreement.

 37
 

11.2                        Continued Truth of
Representations and Warranties; No Breach.  The representations and warranties
made by Seller in this Agreement will be true and correct in all material
respects on and as of the Closing Date, and the Seller Parties will have
performed and complied in all material respects with all terms, conditions,
obligations, agreements and restrictions required by this Agreement to be
performed or complied with by them prior to or on the Closing Date.

11.3                        Absence of Litigation.  No action or
proceeding will have been instituted or threatened orally or in writing by any
Governmental Body prior to the Closing Date for the stated purpose of enjoining
or preventing the consummation of this Agreement or the transactions
contemplated hereby or to recover damages by reason thereof.  No action or proceeding will have been
instituted or threatened in writing by any private Person prior to the Closing
Date before a Governmental Body for the stated purpose of enjoining or
preventing the consummation of this Agreement and the transactions contemplated
hereby.

11.4                        No Material Adverse Change.  There will have
been no Material Adverse Change with respect to Seller from the Interim
Financial Statement Date through and including the Closing Date.

11.5                        Errors
and Omissions Insurance.  Seller
will have obtained an extension of its existing errors and omissions insurance
coverage for the twelve (12) months immediately following the Closing Date (the
“Errors and Omissions Tail Policy”).

12.                               Conditions Precedent To Obligations Of Seller
Parties.

The
obligations of the Seller Parties under this Agreement are subject to the
fulfillment of all of the following conditions precedent on or before the
Closing Date, each of which may be waived in writing at the sole discretion of
Seller.  Purchaser and Parent must
execute and deliver a certificate in substantially the form attached to this
Agreement as Exhibit K and Exhibit L, respectively, certifying
the satisfaction of all of the conditions precedent set forth in this Section
12 and not waived.  If any of the conditions precedent to
the obligations of the Seller Parties are not satisfied or waived on the
Closing Date, the Seller Parties will have the right to elect not to proceed
with the Closing, in which case the parties will have no further rights or
obligations under this Agreement, the Director Agreements or otherwise.

12.1                        Closing
Deliverables.  Purchaser and
Parent will have made all the deliveries required under Section 6.3 of this Agreement.

12.2                        Continued Truth of
Representations and Warranties; No Breach.  The representations and warranties
made by Purchaser and Parent in this Agreement will be true in all material
respects on and as of the Closing Date, and Purchaser and Parent

 38
 

will have performed and complied in
all material respects 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.

12.3                        Absence of Litigation.  No action or
proceeding will have been instituted or threatened orally or in writing by any
Governmental Body prior to the Closing Date for the stated purpose of enjoining
or preventing the consummation of this Agreement or the transactions
contemplated hereby or to recover damages by reason thereof.  No action or proceeding will have been
instituted or threatened in writing by any private Person prior to the Closing
Date before Governmental Body for the stated purpose of enjoining or preventing
the consummation of this Agreement and the transactions contemplated hereby.

12.4                        Director
Agreements.  Each Secura Director
will have delivered his or her duly executed Director Agreement to Purchaser.

12.5                        No
Material Adverse Change.  There
will have been no Material Adverse Change with respect to Purchaser from the
date of its most recently filed Form 10-Q through and including the Closing
Date.

13.                               Survival Of Representations And Warranties.

The
representations and warranties of the parties contained in this Agreement, and
all claims and causes of action related thereto, will survive the consummation
of the transactions contemplated hereby until the second (2nd)  anniversary of the Closing Date.  Notwithstanding the foregoing sentence, the
survival of representations and warranties will continue until the fourth (4th)
anniversary of the Closing Date with respect to any breach of a representation
or warranty as a result of Fraud.

14.                               Indemnification.

14.1                        Indemnification By Seller.

14.1.1                  Subject to the limitations set forth in Section 14.3,
Seller agrees to indemnify, defend and hold harmless each of Purchaser, Parent
and any of their respective members, shareholders, officers, directors,
employees, agents, affiliates, successors or assigns (each, a “Purchaser Indemnitee”) from any
loss, damage or expense (including reasonable attorneys’ fees but excluding any
consequential, punitive, multiplied, exemplary or other special damages)
(collectively, “Losses”) that a Purchaser
Indemnitee 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
contained in this Agreement, including any Exhibit or Schedule to this
Agreement, occurring or developing during the period of survival set forth in
Section 13; (b) the breach of any covenant of Seller  contained in this Agreement or the other
Transaction Documents; (c) any breach of any

 39
 

covenant made by any Seller Party
contained in Section 10.2, Section 10.3 or Section 10.4; or (d) any assertion
against a Purchaser Indemnitee of any claim or liability constituting an
Excluded Liability, including, without limitation, the assertion against a Purchaser
Indemnitee by any Person of any obligation or liability relating to the
Purchased Assets, the conduct of the Business by Seller, or the conduct of any
Seller Party prior to the Closing Date, including, without limitation, Tax
claims or liabilities.  Purchaser, acting on behalf of a Purchaser
Indemnitee, will give Seller prompt written notice of any claim, suit or demand
that Purchaser believes will give rise to indemnification by Seller under this
section stating in reasonable detail the nature and basis of such claim, suit
or demand, provided, however, that, the failure to give such
notice will not affect the obligations of Seller hereunder, except to the
extent it is prejudiced by such failure.

14.1.2                  Except as hereinafter provided and except where a
conflict of interest between Seller and the Purchaser Indemnitee suggests
separate counsel is appropriate, Seller will 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 Indemnitee at Seller’s expense and with outside
counsel of Seller’s own choosing.  Each
Purchaser Indemnitee will, at Seller’s expense, cooperate reasonably in the
defense of any such claim, suit or demand. 
If Seller, within a reasonable time after notice of a claim, fails to
defend a Purchaser Indemnitee, the Purchaser Indemnitee will be entitled to
undertake the defense, compromise or settlement of such claim at the expense of
and for the account and risk of Seller subject to Seller’s right 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 Indemnitee, but Seller may not,
without the Purchaser Indemnitee’s written consent, which consent will not be
unreasonably withheld or delayed, settle or compromise any claim or consent to
any entry of judgment that does not include as an unconditional term thereof
the giving by the claimant or the plaintiff to the Purchaser Indemnitee a
release from all liability in respect of such claim.

14.2                        Indemnification by
Purchaser and Parent.

14.2.1                  Subject to the limitations set forth in Section 14.3,
Purchaser and Parent, jointly and severally, agree to indemnify, defend and
hold harmless the Seller Parties, and each of their respective employees,
agents, affiliates, successors or assigns (each, a “Seller
Indemnitee”) from any Losses that a Seller Indemnitee may incur,
suffer or become liable for as a result of or in connection with (a) the breach
of any representation or warranty of Purchaser or Parent contained in this
Agreement, including any Exhibit or Schedule to this Agreement, occurring or
developing during the period of survival set forth in Section 13; (b) the
breach of any agreement of Purchaser or Parent contained in this Agreement or
the other Transaction Documents; or (c) any assertion against a Seller
Indemnitee of any claim or liability constituting an Assumed Liability or
relating to the Purchased Assets or the conduct of the Business by Purchaser or
Parent on

 40
 

A mark of *** on this page indicates that confidential material has
been omitted.  This Exhibit, including
the omitted portions, has been filed separately with the Secretary of the
Securities and Exchange Commission pursuant to an application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.

or after the Closing Date,
including, without limitation, Tax claims or liabilities to the extent provided
hereunder.  The Seller Representative, on
behalf of each Seller Indemnitee, will give Purchaser prompt written notice of
any claim, suit or demand that a Seller Indemnitee believes will give rise to
indemnification by Purchaser or Parent under this paragraph stating in
reasonable detail the nature and basis of such claim, suit or demand; provided,
however, that, the failure to give such notice will not affect the
obligations of Purchaser and Parent hereunder, except to the extent it is
prejudiced by such failure.

14.2.2                  Except as hereinafter provided and except where a
conflict of interest between a Seller Indemnitee and Purchaser and Parent
suggests separate counsel is appropriate, Purchaser (or Parent, as the case may
be) will have the right to defend and to direct the defense against any such
claim, suit or demand, in its name or in the name the Seller Indemnitee at
Purchaser’s (or Parent’s, as the case may be,) expense and with outside counsel
of Purchaser’s (or Parent’s) own choosing. 
Each Seller Indemnitee will, at Purchaser’s (or Parent’s) expense,
cooperate reasonably in the defense of any such claim, suit or demand.  If Purchaser (or Parent), within reasonable
time after notice of a claim, fails to defend a Seller Indemnitee, such Seller
Indemnitee will be entitled to undertake the defense, compromise or settlement
of such claim at the expense of and for the account and risk of Purchaser (or
Parent, as the case may be) subject to the right of Purchaser (or Parent) 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
such Seller Indemnitee, but Purchaser (and Parent) may not, without the Seller
Indemnitee’s written consent, which consent will not be unreasonably withheld
or delayed, 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
Seller Indemnitee a release from all liability in respect of such claim.

14.3                        Limitations.  The indemnification provided for in Section
14.1 and 14.2 will be subject to the following limitations:

14.3.1                   No Seller Party
will have any obligation to indemnify any Purchaser Indemnitee from and against
any Losses resulting from, arising out of, relating to, in the nature of, or
caused by the breach of any representation, warranty or covenant of that Seller
Party contained in this Agreement until the Purchaser Indemnitees have suffered
Losses by reason of all breaches by Seller Parties in excess of an aggregate
deductible of *** (the “Basket”),
whereupon the Purchaser Indemnitees will be entitled to indemnification
thereunder for all such Losses (back to the first dollar of the Basket).

14.3.2                  Neither
Purchaser nor Parent will have any obligation to indemnify any Seller
Indemnitee from and against any Losses resulting from, arising out of, relating
to, in the nature of, or caused by the breach of any representation or warranty
of the Purchaser or Parent contained in this Agreement until the Seller
Indemnitees have

 41
 

A mark of
*** on this page indicates that confidential material has been omitted.  This Exhibit, including the omitted portions,
has been filed separately with the Secretary of the Securities and Exchange
Commission pursuant to an application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.

suffered Losses by reason of all such breaches in
excess of the Basket, whereupon the Seller Indemnitees will be entitled to
indemnification thereunder for all such Losses (back to the first dollar of the
Basket).

14.3.3                  The parties
acknowledge and agree that the foregoing indemnification provisions in this
Section 14 will be the sole and exclusive remedies of the Purchaser Indemnitees
and the Seller Indemnitees, and each party’s indemnification obligations under
this Agreement will be limited to an amount equal to ***.  ***

14.4                        Insurance
and Tax Effect.

14.4.1                  The amount of any Loss for which indemnification is
provided under Sections 14.1 or 14.2 will be net of any amounts (net of the
costs of recovery of such amounts) recoverable by the indemnified party under
insurance policies, indemnification agreements or similar arrangements with
respect to such Loss (collectively, a “Net Loss”).

14.4.2                  Any payments
made pursuant to the provisions of this Section 14 will be treated as an
adjustment to the total consideration payable to Seller under this
Agreement.  The amount of any Loss will
be reduced to take account of any net Tax benefit (if any) reasonably expected
to be realized by the indemnified party arising from the incurrence or payment
of any such Net Loss.

15.                               ***

16.                               Expenses.

Except
as may otherwise be expressly provided in this Agreement, each party to this
Agreement will pay his, her or its own expenses in connection with this
Agreement and the transactions contemplated hereby, including taxes, recording
fees and attorneys’ or accountants’ fees.

17.                               Notices.

Any
notices or other communications required or permitted hereunder will be
effective upon receipt and will 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:

In the case of Purchaser
or Parent, to:

LECG, LLC

2000 Powell Street, Suite 600

 42
 

A mark of
*** on this page indicates that confidential material has been omitted.  This Exhibit, including the omitted portions,
has been filed separately with the Secretary of the Securities and Exchange
Commission pursuant to an application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.

Emeryville, California 
94608

Attention:  Chief Financial Officer

Fax:  (510) 653-9898

with copies of notices to Purchaser or Parent to:

General Counsel

LECG, LLC

2049 Century Park East, Suite 2300

Los Angeles, CA 90067

Fax:  310-556-0766

and

Christopher B. Conner, Esq.

Folger Levin & Kahn, LLP

275 Battery Street, 23rd Floor

San Francisco, California 94111

Fax:  (415)
986-2827

In the case of a Seller Party, to:

William M. Isaac

***

and

Michael A. Mancusi

***

with a copy to:

John C. Murphy, Esq.

Paul D. Marquardt, Esq.

Cleary Gottlieb Steen & Hamilton LLP

2000 Pennsylvania Ave. NW

Washington, DC  20006

Fax:  (202) 974-1999

18.                               Successors.

This
Agreement will be binding upon and inure to the benefit of the parties to this
Agreement 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

 43
 

prior
written consent of all of the other parties. 
Notwithstanding the foregoing, Seller may assign its rights to payment,
if any, under this Agreement to any Member in proportion to such Member’s
Member Percentage Interest, and a Member may assign his or her rights to
payment, if any, under this Agreement to (a) any of his or her spouse or
biological or adoptive lineal ancestors or descendants, (b) trusts for the
benefit of the Member and/or one or more of such spouse, ancestors or
descendants, or (c) the Member’s executor, administrator, trustee or personal
representative to whom such rights and obligations are transferred at death.

19.                               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.

20.                               Governing Law; Consent To Service.

This
Agreement will 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 will be
effective if in writing and sent by certified or registered mail, return
receipt requested, postage prepaid, as provided in Section 17.

21.                               Dispute
Resolution.

In the event of any
dispute or disagreement arising out of or relating to this Agreement (a “Dispute”), the parties will attempt
to resolve such Dispute by good faith negotiation prior to resorting to
mediation or litigation.  In the event
such Dispute is not resolved by means of such good faith negotiation, any party
(the “Proposing Party”) may require
the Dispute to be referred to the non-binding mediation of a single mediator
(the “Mediator”) to be appointed
jointly by the parties.  Despite the
foregoing sentence, any Dispute regarding the Additional Payment or any
calculations in connection therewith will be resolved as set forth in Section
3.3.6 of this Agreement.  The Proposing
Party will give written notice to the other parties of the Proposing Party’s
intention to refer the Dispute to mediation (the “Mediation
Notice”).  Such Mediation
Notice will specify in reasonable detail the nature of the issue giving rise
thereto and nominate a single mediator to co-appoint, along with the other
party’s selection of mediator, the Mediator. 
Within ten (10) days after the delivery of the Mediation Notice, the
other party to the Dispute will nominate in writing to the Proposing Party a
second mediator.  The two mediators so
chosen will, within ten (10) days after the second mediator’s selection,
jointly appoint a single mediator to serve as the Mediator.  The Mediator will conduct the mediation in
accordance with the guidelines set by the parties to the Dispute.  In the event such guidelines cannot be agreed
upon, the mediation will be governed by the Rules of

 44
 

Practice and Procedure of
Judicial Arbitration & Mediation Services, Inc. (JAMS), or its successor
entity.  The costs of engaging the
Mediator will be borne equally by the Proposing Party and the other party to
the Dispute and each party will bear its own costs of preparing the materials for
and making presentations to the Mediator. 
The mediation will be held in Chicago, Illinois, or such other city as
may be agreed by the parties.

22.                               Attorneys’ Fees.

In any action undertaken
to enforce the terms of this Agreement, including arbitration proceedings (but
excluding mediation proceedings conducted pursuant to Section 21), each party
will bear its own attorneys’ fees and expenses, including the costs of
enforcing an arbitral award or a judgment.

23.                               Entire Agreement.

This
Agreement and the other Transaction Documents, including all schedules and
exhibits to this Agreement and thereto represent the entire understanding and
agreement between the parties to this Agreement with respect to the subject
matter of this Agreement and thereof and supersede all prior negotiations
between the parties including, without limitation, that certain Term Sheet
dated December 8, 2006, and cannot be amended, supplemented or changed orally,
but may only be so modified by an agreement in writing that (a) makes specific
reference to this Agreement or the applicable Transaction Document delivered
pursuant to this Agreement and (b) is signed by the party against whom
enforcement of any such amendment, supplement or modification is sought.

24.                               Survival.

The respective rights and obligations of the parties
set forth in Sections 3, 4, 5, 10, and 13 through 27 of this Agreement will
survive the Closing.

25.                               Severability.  If any term
or provision of this Agreement is determined to be illegal, unenforceable, or
invalid in whole or in part for any reason, such illegal, unenforceable, or
invalid provisions or part thereof will be stricken from this Agreement, and
such provision will not affect the legality, enforceability, or validity of the
remainder of this Agreement.  If any provision
or part thereof of this Agreement is stricken in accordance with the provisions
of this section, then the stricken provision will be replaced, to the extent
possible, with a legal, enforceable, and valid provision that is as similar in
tenor to the stricken provision as is legally possible.

 45
 

26.                               Parent
Guaranty.

Parent absolutely and unconditionally guaranties the
performance of all of Purchaser’s obligations under this Agreement and the
other Transaction Documents, and will be responsible, jointly and severally,
for any breach by Purchaser of any of the Transaction Documents.

27.                               Counterparts.

This
Agreement may be signed in two or more counterparts, each signed by one or more
of the parties to this Agreement so long as each party will sign at least one
counterpart of this Agreement, all of which taken together will constitute one
and the same instrument.  Signatures
delivered by facsimile or electronic file format will be treated in all
respects as originals.

[remainder
of this page intentionally left blank]

 46

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

	
  PURCHASER:

  	
  SELLER PARTIES:

  
	
   

  	
   

  
	
   

  	
   

  
	
  LECG, LLC,

  a California limited liability company

  	
  The Secura
  Group, L.L.C.,

  a Delaware limited liability company

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  LECG Corporation,

  	
  By:

  	
  /s/ Michael A. Mancusi

  
	
   

  	
  a Delaware corporation

  	
   

  	
   

  
	
  Its:

  	
  Sole Manager

  	
  Its:

  	
  Managing Director & CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Teece

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Chairman

  	
   

  	
   

  	
   

  
	
   

  	
  The following individuals, solely for purposes

  of Sections 1, 3.4, 4, 10.1 through 10.4, 14.2,

  14.3, 14.4.1, and 15 through 27, and for no

  other purposes:

  
	
   

  	
   

  
	
  PARENT:

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Jeffrey M. Curry

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Jeffrey M. Curry

  
	
  LECG Corporation,

  a Delaware corporation

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ William M. Isaac

  
	
   

  	
  By: 

  	
  /s/ David J. Teece

  	
   

  	
   

  	
  William M. Isaac

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its: 

  	
  Chairman

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Daniel T. Krabill

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Daniel T. Krabill

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Wendi Lonnquist

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Wendi Lonnquist

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Margaret L. Maguire

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Margaret L. Maguire

  

 

 

[Signature page to Asset
Purchase Agreement]

 

	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ John H. Maher

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  John H. Maher

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Michael A. Mancusi

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Michael A. Mancusi

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Walter J. Mix, III

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Walter J. Mix, III

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Mary T. Somerville

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Mary T. Somerville

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Leeto J. Tlou

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Leeto J. Tlou

  

 

TABLE OF
CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  CERTAIN DEFINITIONS

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  SALE AND PURCHASE OF ASSETS

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.1

  	
  Purchased Assets

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.2

  	
  Excluded Assets

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.3

  	
  Assumed Liabilities

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.4

  	
  Excluded Liabilities

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  CONSIDERATION

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.1

  	
  Purchase Price and Payment

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.2

  	
  Allocation of Purchase Price

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.3

  	
  Additional Payment of Purchase Price

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.4

  	
  Operational Impact on Additional Payments

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.5

  	
  Accounts Receivable

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.6

  	
  Client Prepaid Balances

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  COVENANTS NOT TO COMPETE; NON-SOLICITATION

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.1

  	
  Covenant of Secura Directors Not to Compete

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.2

  	
  Covenant of Seller Not to Compete

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.3

  	
  Non-Solicitation

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.4

  	
  Separate Covenants

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  TRANSFER OF EMPLOYEES AND EMPLOYEE BENEFITS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.1

  	
  Workers’ Compensation

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.2

  	
  Transfer of Employees

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.3

  	
  Employee Benefit Plans

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  THE CLOSING

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.1

  	
  The Closing

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.2

  	
  Seller Party Deliveries at Closing

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.3

  	
  Purchaser Deliveries at Closing

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  REPRESENTATION AND WARRANTIES OF SELLER

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.1

  	
  Organization and Valid Existence

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.2

  	
  Authority of Seller

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.3

  	
  Ownership of Seller Equity

  	
   

  	
  23

  

 

 i
 

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  7.4

  	
  No Violations

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.5

  	
  Financial Statements

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.6

  	
  Absence of Certain Changes

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.7

  	
  Title to and Condition of Purchased Assets

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.8

  	
  Real Estate

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.9

  	
  Contracts

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.10

  	
  Litigation

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.11

  	
  Intellectual Property

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.12

  	
  Compliance with Laws

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.13

  	
  Employee Benefit Plans

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.14

  	
  Taxes

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.15

  	
  Insurance

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.16

  	
  Employment Matters

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.17

  	
  Brokers

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.18

  	
  Business Relations

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.19

  	
  Warranty; Nonbillable Work

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.20

  	
  Employees

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.21

  	
  Consents

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.22

  	
  Schedules

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.23

  	
  Accuracy of Disclosure

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.24

  	
  No Other Warranties or Representations

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  REPRESENTATIONS OF PURCHASER AND PARENT

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.1

  	
  Organization and Authority

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.2

  	
  Authorization of Agreement

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.3

  	
  No Violations

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.4

  	
  Litigation; Compliance with Law

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.5

  	
  SEC Filings

  	
   

  	
  30

  

 

 ii
 

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  8.6

  	
  No Finder

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.7

  	
  Consents

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.8

  	
  Acknowledgements by Purchaser

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  PRE-CLOSING COVENANTS

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.1

  	
  Affirmative Covenants

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.2

  	
  Restrictions on Conduct of the Business Prior to
  Closing

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.3

  	
  Certain Notifications by Parties

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.4

  	
  Risk of Loss

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.5

  	
  Updating the Seller Parties Disclosure Schedules

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.6

  	
  Access to Information

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  AFFIRMATIVE COVENANTS

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.1

  	
  Confidentiality

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.2

  	
  Public Announcements

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.3

  	
  Taxes

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.4

  	
  Further Assurances

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.5

  	
  Retained Information

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.6

  	
  Updated Financial Statements; Reimbursable Expenses

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.7

  	
  Distribution of Payments

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.8

  	
  Support for Ongoing Seller Activities

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER AND
  PARENT

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.1

  	
  Closing Deliverables

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.2

  	
  Continued Truth of Representations and Warranties;
  No Breach

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.3

  	
  Absence of Litigation

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.4

  	
  No Material Adverse Change

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.5

  	
  Errors and Omissions Insurance

  	
   

  	
  38

  

 

 iii
 

A mark of
*** on this page indicates that confidential material has been omitted.  This Exhibit, including the omitted portions,
has been filed separately with the Secretary of the Securities and Exchange
Commission pursuant to an application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
  PARTIES

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  12.1

  	
  Closing Deliverables

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  12.2

  	
  Continued Truth of Representations and Warranties;
  No Breach

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  12.3

  	
  Absence of Litigation

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  12.4

  	
  Director Agreements

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  12.5

  	
  No Material Adverse Change

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  SURVIVAL OF REPRESENTATIONS AND WARRANTIES

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  INDEMNIFICATION

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  14.1

  	
  Indemnification By Seller

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  14.2

  	
  Indemnification by Purchaser and Parent

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  14.3

  	
  Limitations

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  14.4

  	
  Insurance and Tax Effect

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  ***

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  EXPENSES

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  NOTICES

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  SUCCESSORS

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  ARTICLE AND SECTION HEADINGS

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  GOVERNING LAW; CONSENT TO SERVICE

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  DISPUTE RESOLUTION

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  ATTORNEYS’ FEES

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  ENTIRE AGREEMENT

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
   

  	
  SURVIVAL

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25.

  	
   

  	
  SEVERABILITY

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
   

  	
  PARENT GUARANTY

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
   

  	
  COUNTERPARTS

  	
   

  	
  46

  

 

 iv
 

LIST OF EXHIBITS(1)

	
  Exhibit A-1

  	
   

  	
  Form of Director Agreement (Jeffrey
  M. Curry)

  
	
  Exhibit A-2

  	
   

  	
  Form of Director Agreement (William
  M. Isaac)

  
	
  Exhibit A-3

  	
   

  	
  Form of Director Agreement (Daniel
  T. Krabill)

  
	
  Exhibit A-4

  	
   

  	
  Form of Director Agreement (Wendi
  Lonnquist)

  
	
  Exhibit A-5

  	
   

  	
  Form of Director Agreement (John
  H. Maher)

  
	
  Exhibit A-6

  	
   

  	
  Form of Director Agreement (Michael
  A. Mancusi)

  
	
  Exhibit A-7

  	
   

  	
  Form of Director Agreement (Walter
  J. Mix, III)

  
	
  Exhibit A-8

  	
   

  	
  Form of Director Agreement (Mary
  T. Somerville)

  
	
  Exhibit A-9

  	
   

  	
  Form of Director Agreement (Leeto
  J. Tlou)

  
	
  Exhibit B

  	
   

  	
  Purchaser’s Corporate Code of
  Conduct

  
	
  Exhibit C

  	
   

  	
  Proforma Calculations

  
	
  Exhibit D

  	
   

  	
  Form of Assignment and Assumption
  Agreement

  
	
  Exhibit E

  	
   

  	
  Form of Bill of Sale

  
	
  Exhibit F-1

  	
   

  	
  Form of Opinion of Counsel to
  Seller

  
	
  Exhibit F-2

  	
   

  	
  Form of Opinion of Counsel With
  Respect to Seller

  
	
  Exhibit G

  	
   

  	
  Form of Opinion of Counsel to
  Purchaser

  
	
  Exhibit H-1

  	
   

  	
  Form of Assignment of
  Lease—Vienna, VA

  
	
  Exhibit H-2

  	
   

  	
  Form of Assignment of Lease—Los
  Angeles, CA

  
	
  Exhibit I

  	
   

  	
  Financial Statements

  
	
  Exhibit J

  	
   

  	
  Form of Seller Closing Certificate

  
	
  Exhibit K

  	
   

  	
  Form of Purchaser Closing Certificate

  
	
  Exhibit L

  	
   

  	
  Form of Parent Closing Certificate

  
	
  Exhibit M

  	
   

  	
  Form of Escrow Agreement

  

 

LIST OF SCHEDULES(2)

 

	
  Allocation Schedule

  	
   

  	
   

  
	
  Schedule 2.1.1

  	
   

  	
  Fixed Assets

  
	
  Schedule 2.1.5

  	
   

  	
  Deposits and Prepayments

  
	
  Schedule 2.1.6

  	
   

  	
  Cash

  
	
  Schedule 3.1

  	
   

  	
  Member Percentage Interests

  
	
  Schedule 3.4

  	
   

  	
  Accounts Receivable

  
	
  Schedule 5.1

  	
   

  	
  Workers’ Compensation

  

 

(1) Pursuant to Item 601(b)(2) of Subpart § 229.601 of
Regulation S-K, the Exhibits to this Asset Purchase Agreement briefly described
in this Table of Contents have been omitted from Exhibit 10.77 furnished
in connection with LECG Corporation’s electronic filing of Form 10-Q on
May 10, 2007.  LECG Corporation agrees to
furnish a copy of any omitted Exhibit to the Securities and Exchange Commission
upon request.

(2) Pursuant to Item 601(b)(2) of Subpart § 229.601 of
Regulation S-K, the Schedules to this Asset Purchase Agreement briefly described
in this Table of Contents have been omitted from Exhibit 10.77 furnished
in connection with LECG Corporation’s electronic filing of Form 10-Q on
May 10, 2007.  LECG Corporation agrees to
furnish a copy of any omitted Schedule to the Securities and Exchange
Commission upon request.

 v
 

 

	
  Schedule 7.1

  	
   

  	
  Jurisdictions In Which Seller Is Qualified To
  Conduct Business

  
	
  Schedule 7.6

  	
   

  	
  Absence of Certain Changes

  
	
  Schedule 7.7

  	
   

  	
  Permitted Liens

  
	
  Schedule 7.9

  	
   

  	
  Contracts

  
	
  Schedule 7.10

  	
   

  	
  Litigation

  
	
  Schedule 7.11

  	
   

  	
  Intellectual Property

  
	
  Schedule 7.11.2

  	
   

  	
  Third Person Licenses

  
	
  Schedule 7.13

  	
   

  	
  Employee Benefit Plans

  
	
  Schedule 7.14

  	
   

  	
  Taxes

  
	
  Schedule 7.15

  	
   

  	
  Insurance Policies

  
	
  Schedule 7.18

  	
   

  	
  Business Relations

  
	
  Schedule 7.19

  	
   

  	
  Fixed Fee Contracts

  
	
  Schedule 7.20

  	
   

  	
  Employees

  

 

 viExhibit
10.58

CROSS
LICENSE AGREEMENT

between

ELEOS,
INC.

and

AVI
BIOPHARMA, INC.

 

CROSS
LICENSE AGREEMENT

THIS CROSS LICENSE AGREEMENT
(the “Agreement”) is made and is effective as of the 8th day of January, 2007
(the “Effective Date”) by and between AVI BioPharma, Inc., an Oregon
corporation with its principal place of business at One SW Columbia, Suite
1105, Portland, Oregon 97258 (“AVI”), and Eleos, Inc., a Delaware corporation
with its principal place of business at One Valmont Plaza; Suite 301, Omaha,
Nebraska 68154 (“Eleos”) (with each of AVI and Eleos referred to as a “Party”
and jointly, the “Parties”).

RECITALS

WHEREAS, each of
the Parties owns, controls or otherwise has rights with regard to its
respective Intellectual Property related to technologies and products for
regulation of p53 protein, with Eleos controlling intellectual property related
to uses of antisense p53 sequences and specific antisense p53 sequences that
have superior properties compared to other p53 target sequences, and with AVI
owning intellectual property relating to phosphorodiamidate morpholino oligomer
(“PMO”) chemistry and its uses expected to lead to antisense drugs directed
against p53 that have superior pharmaceutical properties for some purposes
compared with drugs based on other antisense chemistries, identified as AVI
Intellectual Property on attached Exhibit A and Eleos Intellectual
Property on attached Exhibit B;

WHEREAS, Eleos and
AVI wish to pursue their own development and joint development opportunities
resulting from the combination of Eleos’ p53 technology and AVI’s PMO
technology;

WHEREAS, Eleos’
main field of interest in p53-PMO technology is as a therapeutic target for the
treatment of cancer, including protection of non-malignant or normal cells and
tissues from the effects of chemotherapy and radiation, AVI’s main field of
interest in p53-PMO technology is as a potential target for antiviral
therapies, and the Parties wish to cooperate in the development and
commercialization of therapies using p53-PMO technology in other fields;

WHEREAS, the
Parties wish to obtain from each other and make available to each other certain
rights for the development and clinical and commercial manufacture, use and
sale of products using the AVI Intellectual Property and Eleos Intellectual
Property on the terms and conditions set forth in this Agreement.

NOW THEREFORE, the
Parties agree as follows:

1.                                       Definitions

All definitions below or elsewhere in this Agreement
apply to both their singular and plural forms, as the context may require.  “Herein,” “hereunder,” and “hereof” and other
similar expressions refer to this Agreement. 
“Section” refers to sections in this Agreement.  “Including” means “including without
limitation.” “Days” means “calendar days,” unless otherwise stated.

1.1           “Affiliate” means
any corporation or business entity that directly or indirectly controls, is
controlled by, or is under common control with Eleos or AVI to the extent of at
least 50 percent of the outstanding stock or other voting rights entitled to
elect directors.

1.2           “API” means the
active pharmaceutical ingredient for a Licensed Product.

1.3           “AVI Confidential
Information” is Confidential Information of AVI.

1.4           “AVI Field” means
the treatment of all viral diseases except for those related to human
immunodeficiency virus (HIV) infection.

1.5           “AVI Improvements”
means any change, modification, enhancement or addition which is an improvement
to or further development of the AVI Intellectual Property, whether or not
patentable or copyrightable and whether created by AVI or Eleos acting alone or
by AVI and Eleos acting jointly.

1.6           “AVI Intellectual
Property” means the intellectual property listed in Exhibit A and rights under
any other Intellectual Property of AVI developed or acquired by AVI subsequent
to execution of this Agreement which, absent the license to Eleos hereunder,
would be infringed by Eleos in the development or commercialization of products
in the Eleos Field.

1.7           “AVI Net Sales”
means the total of the gross sales of Licensed Eleos IP Products sold or
transferred by AVI and AVI’s Affiliates and sublicensees, less the following
actual and customary third-party wholesaler and or distributor deductions as
applicable: reasonable and customary wholesaler or distributor sales
commissions (for clarity, commissions and other compensation paid to sales and
marketing personnel of AVI or its marketing partner(s) are not deductible);
allowances or credits to purchasers for rejections, returns, withdrawals or
recalls; cash, trade or quantity discounts; sales rebates or chargebacks; third
party distribution fees; sales, use, excise or other taxes imposed on sales;
import and export duties; and shipping charges. 
To the extent AVI has deducted amounts as permitted by the preceding
sentence and AVI later receives a refund against the amount deducted, the
refunded amount shall be included as part of AVI Net Sales.  Payments shall be made only upon sales or
transfers between unrelated third parties and shall be based on arms-length
consideration.  In the event AVI or any
of its Affiliates makes a transfer of a Licensed Eleos IP Product to a third
party for other than monetary consideration or for less than fair market value,
such transfer shall be considered a sale hereunder to be calculated at a fair
market value for accounting and royalty purposes.  A Licensed Eleos IP Product shall be deemed
sold or transferred at the time the entity making the transaction on which the
royalty is based bills, invoices, ships, or receives payment for such Licensed
Eleos IP Product, whichever occurs first. 
For sales of a Licensed Eleos IP Product which constitutes a Combination
Product, AVI Net Sales will be calculated based on a reasonable allocation
between the Combination Product Components and the remainder of the Licensed
Eleos IP Product.

1.8           “Combination Product”
means a combined product that contains or uses a Licensed Product and at least
one other therapeutic product (a “Combination Product Component”), where such
Combination Product Component is not a Licensed Product; such Combination
Product Component and such Licensed Product are usually sold separately; and
the market price of such combined product is higher than the market price for
such Licensed Product (if sold separately) as a result of such combined product
containing or using such Combination Product Component.

1.9           “Confidential
Information” means any commercially sensitive information of a Party in its
broadest context, whether in writing (including any computer files or records),
oral form or available by observation, not generally known to the public, and
includes all (i) matters of a technical nature such as trade secret processes
or devices, techniques, data, formulas, inventions (whether or not patentable),
specifications and characteristics of products planned or being developed,
research subjects, methods and results, regulatory strategies, and patent
prosecution documents with regard to a Party’s Intellectual Property; (ii)
matters of a business nature such as information about costs, margins, pricing
policies, markets, sales, suppliers, customers, product plans, marketing plans
or strategies and any other financial information; and (iii) the specific terms
of this Agreement and any Statement of Work.

1.10         “Effective Date”
means the date first written above.

 2
 

1.11         “Eleos Confidential
Information” is Confidential Information of Eleos.

1.12         “Eleos Field” means
the treatment of cancer, including the protection of non-malignant or normal
cells and tissues from the effects of chemotherapy and radiation.

1.13         “Eleos Improvements”
means any change, modification, enhancement or addition which is an improvement
to or further development of the Eleos Intellectual Property, whether or not
patentable or copyrightable and whether created by AVI or Eleos acting alone or
by AVI and Eleos acting jointly.

1.14          “Eleos Intellectual
Property” means the Intellectual Property listed in Exhibit B, and rights
under any other Intellectual Property of Eleos developed or acquired by Eleos
subsequent to execution of this Agreement which, absent the license to AVI
hereunder, would be infringed by AVI in the development or commercialization of
products in the AVI Field.

1.15         “Eleos Net Sales”
means the total of all sales of Licensed AVI IP Products sold or transferred by
Eleos and Eleos’ Affiliates and sublicensees, less the following actual and
customary third-party wholesaler and distributor deductions as applicable:
reasonable and customary wholesaler or distributor sales commissions (for
clarity, commissions and other compensation paid to sales and marketing
personnel of Eleos or its marketing partner(s) are not deductible); allowances
or credits to purchasers for rejections, returns, withdrawals or recalls; cash,
trade or quantity discounts; sales rebates or chargebacks; third party
distribution fees; sales, use, excise or other taxes imposed on sales; import
and export duties; and shipping charges. 
To the extent Eleos has deducted amounts as permitted by the preceding
sentence and Eleos later receives a refund against the amount deducted, the
refunded amount shall be included as part of Eleos Net Sales.  Payments shall be made only upon sales or
transfers between unrelated third parties and shall be based on arms-length
consideration.  In the event Eleos or any
of its Affiliates makes a transfer of a Licensed AVI IP Product to a third
party for other than monetary consideration or for less than fair market value,
such transfer shall be considered a sale hereunder to be calculated at a fair
market value for accounting and royalty purposes.  A Licensed AVI IP Product shall be deemed
sold or transferred at the time the entity making the transaction on which the
royalty is based bills, invoices, ships, or receives payment for such Licensed
AVI IP Product, whichever occurs first. 
For sales of a Licensed AVI IP Product which constitutes a Combination
Product, Eleos Net Sales will be calculated based on a reasonable allocation
between the Combination Product Components and the remainder of the Licensed
AVI IP Product.

1.16         “FDA” means the
United States Food and Drug Administration.

1.17         “Intellectual
Property” means patents, patent applications, utility models, industrial
designs, certificates of inventions, trademarks, copyrights, trade secrets,
know how, and any other Intellectual Property rights in any country of the
world, including all related filings, substitutions, extensions, reissues,
renewals, continuations and continuations in part, all registrations and the
like.

1.18          “Joint Development
Proposal” has the meaning set forth in Section 7.2.

1.19         “Joint Field” means
the treatment of all diseases and conditions outside the AVI Field and the
Eleos Field

1.20          “Jointly Owned
Intellectual Property” means Newly Created Intellectual Property that is owned
by both parties in accordance with the terms of this Agreement.

1.21         “Joint p53-PMO Item”
means any material, product, service, process, or procedure, which combines
Eleos Intellectual Property related to p53 and AVI Intellectual Property
related to PMO, 

 3
 

whether such
Intellectual Property exists as of the Effective Date or is developed or
acquired subsequent to execution of this Agreement, for treatment of diseases
with currently existing or novel morpholino compounds that target the p53 gene,
or p53 RNA or intentionally target proteins encoded by the p53 gene in order to
achieve a therapeutic effect.

1.22         “Licensed AVI IP
Method” means any process, method, or use that is covered by AVI Intellectual
Property or the use or practice of which would constitute, but for the license
granted to Eleos pursuant to this Agreement, an infringement of the AVI
Intellectual Property.

1.23         “Licensed AVI IP
Product” means any material, product, service, process, or procedure that
(i) is covered by AVI Intellectual Property or whose discovery,
development, registration, manufacture, use, or sale would constitute, but for
the license granted to Eleos pursuant to this Agreement, an infringement of any
claim within the AVI Intellectual Property or (ii) is discovered,
developed, made, sold, registered, or practiced using AVI Intellectual Property
or a Licensed AVI IP Method or (iii) is used to practice the Licensed AVI
IP Method, in whole or in part.

1.24         “Licensed Eleos IP
Method” means any process, method, or use that is covered by Eleos Intellectual
Property or the use or practice of which would constitute, but for the license
granted to AVI pursuant to this Agreement, an infringement of the Eleos
Intellectual Property.

1.25         “Licensed Eleos IP
Product” means any material, product, service, process, or procedure that
(i) is covered by Eleos Intellectual Property or whose discovery,
development, registration, manufacture, use, or sale would constitute, but for
the license granted to AVI pursuant to this Agreement, an infringement of any
claim within the Eleos Intellectual Property or (ii) is discovered,
developed, made, sold, registered, or practiced using Eleos Intellectual
Property or a Licensed Eleos IP Method or (iii) is used to practice the
Licensed Eleos IP Method, in whole or in part.

1.26         “Licensed Product”
means a Licensed AVI IP Product or Licensed Eleos IP Product, as applicable
according to the context.

1.27         “Net Sales” means AVI
Net Sales or Eleos Net Sales, as applicable according to the context.

1.28         “Newly Created
Intellectual Property” means Intellectual Property created during the term of
this Agreement by one or both of the Parties hereto and in furtherance of
performance under this Agreement.

1.29         “Statement of Work”
has the meaning set forth in Section 7.1.

1.30         “Sublicensing Income”
means amounts received by a Party and its successors, assigns and Affiliates
from unaffiliated third parties attributable to a sublicense of rights licensed
under this Agreement.

1.31         “Third Party
Licensors” means *****, *****, *****, and any other unrelated third-party
patent licensor to which Eleos or AVI pays patent licensing fees or royalties
to make, use or sell a Licensed Product. 
“Unrelated third-party patent licensor” refers to entities having no
relationship to Eleos or AVI other than to claim patent royalties and expressly
excludes developers, suppliers, contractors, employees and consultants engaged
by Eleos or AVI.

 4
 

2.                                       License
Grants.

2.1           By AVI to Eleos.

(a)           Exclusive.  Subject
to the limitations set forth in this Agreement, AVI hereby grants to Eleos and
its Affiliates, so long as they remain Affiliates of Eleos, an exclusive,
worldwide license, with the right to sublicense (subject to Section 3 below),
to AVI Intellectual Property that relates to a Joint p53-PMO Item, solely in
the Eleos Field, to research, develop, make, have made, subject to the terms of
Article 9, use, import, put into use, modify, distribute, offer for sale, sell
and have sold Licensed AVI IP Products and to practice Licensed AVI IP Methods
during the term of this Agreement.  As
used in this Section 2.1, “exclusive” means that AVI may not grant to any
third party a license of the AVI Intellectual Property, in whole or in part,
within the Eleos Field and may not itself practice the AVI Intellectual
Property within the Eleos Field.

(b)           Semi-Exclusive.  Effective as of the effective date of any
Statement(s) of Work executed by the Parties under which the Parties agree to
engage in joint development activities, and subject to the specific terms and
conditions of such Statement(s) of Work, AVI shall grant to Eleos and its
Affiliates, so long as they remain Affiliates of Eleos, a semi-exclusive,
worldwide license to AVI Intellectual Property that relates to a Joint p53-PMO Item, solely
in the Joint Field and within the context of such joint development activities
with AVI, to research, develop, make, have made, subject to the terms of
Article 9, use, import, put into use, modify, distribute, offer for sale, sell
and have sold Licensed AVI IP Products and to practice Licensed AVI IP Methods
during the term of this Agreement. 
Nothing herein will limit the right of AVI or its Affiliates to practice
any claim encompassed within the foregoing within the Joint Field.

2.2           By
Eleos to AVI.

(a)           Exclusive.  Subject to the limitations set forth in this
Agreement, Eleos hereby grants to AVI and its Affiliates, so long as they
remain Affiliates of AVI, an exclusive, worldwide license (or sublicense as the
case may be), with the right to sublicense (subject to Section 3 below), to
Eleos Intellectual Property that relates to a Joint p53-PMO Item, solely
in the AVI Field, to research, develop, make, have made, use, import, put into
use, modify, distribute, offer for sale, sell and have sold Licensed Eleos IP
Products and to practice Licensed Eleos IP Methods during the term of this
Agreement.  As used in this
Section 2.2, “exclusive” means that Eleos may not grant to any third party
a license of the Eleos Intellectual Property, in whole or in part, within the
AVI Field and may not itself practice the Eleos Intellectual Property within
the AVI Field.

(b)           Semi-Exclusive.  Effective as of the effective date of any
Statement(s) of Work executed by the Parties under which the Parties agree to
engage in joint development activities, and subject to the specific terms and
conditions of such Statement(s) of Work, Eleos shall grant to AVI and its
Affiliates, so long as they remain Affiliates of AVI, a semi-exclusive,
worldwide license to Eleos Intellectual Property that relates to a Joint p53-PMO Item, solely
in the Joint Field and within the context of such joint development activities
with Eleos, to research, develop, make, have made, use, import, put into use,
modify, distribute, offer for sale, sell and have sold Licensed Eleos IP
Products and to practice Licensed Eleos IP Methods during the term of this
Agreement.  Nothing herein will limit the
right of Eleos or its Affiliates to practice any claim encompassed within the
foregoing within the Joint Field.

 5
 

2.3           Improvements.  Each Party will promptly advise the other of
AVI Improvements or Eleos Improvements made by it and its Affiliates during the
term of this Agreement, to the extent lawfully able to be disclosed.  AVI Improvements will automatically be
included within the definition of “AVI Intellectual Property,” and Eleos
Improvements will automatically be included within the definition of “Eleos
Intellectual Property,” subject to the terms contained herein.

2.4           c-myc Conflicts
with AVI Intellectual Property.  If
in the future a patent is granted to Eleos or an Affiliate of Eleos related to
c-myc, the claims of which would cause an AVI product actually or potentially
to infringe such claims, Eleos will grant to AVI a non-exclusive license to
such claims in so far as they apply to the infringing or potentially infringing
AVI product at nominal cost to AVI, e.g.,
$1.00 plus reimbursement of Eleos’ legal costs to finalize the license
agreement, and no other cost.  If in the
future Eleos or an Affiliate of Eleos gains rights via a license agreement to
patents related to c-myc, the claims of which would cause an AVI product
actually or potentially to infringe such claims, Eleos will grant to AVI a
non-exclusive sublicense to such claims in so far as they apply to the
infringing or potentially infringing AVI product at nominal cost to AVI, e.g., $1.00 plus reimbursement of Eleos’ legal costs to
finalize the sublicense agreement, and no other cost.  If Eleos has a royalty obligation to
such third party licensor for such c-myc patent claims, the sublicense to AVI
will include the same royalty obligation as a pass-through without any mark up.

3.                                       Sublicenses

3.1           Sublicenses
Granted By Eleos.

(a)      AVI grants to Eleos the right to grant
sublicenses to third parties under the licenses granted in Section 2.1,
provided that (i) Eleos has current exclusive rights to the AVI
Intellectual Property that relates to a Joint p53-PMO Item in the relevant field under this
Agreement at the time it exercises a right of sublicense, (ii) Eleos
obtains the written consent of AVI, and (iii) the sublicense results from
a written agreement entered into by Eleos and the sublicensee.  Within fourteen (14) days after execution of
any sublicense agreement, Eleos shall provide AVI with a copy of such
agreement, and shall thereafter summarize and deliver all reports due to AVI
relating to the sublicensees.  If Eleos
is in material compliance with its duties under this Agreement, AVI shall not
contact any such sublicensee.

3.2           Sublicenses
Granted By AVI.

(a)      Eleos grants to AVI the
right to grant sublicenses to third parties under the licenses (or sublicenses
as the case may be) granted in Section 2.2, provided that (i) AVI has
current exclusive rights to the Eleos Intellectual Property that relates to a Joint
p53-PMO Item in the relevant field under this Agreement at the
time it exercises a right of sublicense, (ii) AVI obtains the written
consent of Eleos, and (iii) the sublicense results from a written
agreement entered into by AVI and the sublicensee.  Within fourteen (14) days after execution of
any sublicense agreement, AVI shall provide Eleos with a copy of such
agreement, and shall thereafter summarize and deliver all reports due to Eleos
relating to the sublicensees.  If AVI is
in material compliance with its duties under this Agreement, Eleos shall not
contact any such sublicensee.

4.                                       License
Fees and Royalties.

4.1           Initial License
Fee.  Within three (3) business days
of the Effective Date, Eleos will pay AVI Five Hundred Thousand Dollars
($500,000.00) according to wire transfer instructions provided by AVI.

 6
 

4.2           Eleos Milestone
Payments.  Eleos shall make the
following one-time payments to AVI upon achieving the milestones set forth
below with regard to a Licensed AVI IP Product:

	
  Milestone

  	
   

  	
   

  	
   

  	
  Payment Amount

  	
   

  
	
  Enrollment of the first patient in the first human
  clinical study

  	
   

  	
  $

  	
  *****

  	
   

  
	
  Enrollment of the first patient in a Phase III or
  pivotal study

  	
   

  	
  $

  	
  *****

  	
   

  
	
  The first filing of a New Drug Application

  	
   

  	
  $

  	
  *****

  	
   

  
	
  The first commencement of commercial sales after FDA
  approval of New Drug Application

  	
   

  	
  $

  	
  *****

  	
   

  
	
  The first time Eleos achieves $***** in cumulative
  Eleos Net Sales

  	
   

  	
  $

  	
  *****

  	
   

  
	
  The first time
  Eleos achieves $***** in cumulative Eleos Net Sales

  	
   

  	
  $

  	
  *****

  	
   

  

 

                As
a clarifying example with respect to Sections 4.2 and 4.4, if a Party achieves
the first filing of a New Drug Application for more than one Licensed Product,
the ***** payment amount by that Party will only be payable the first time that
that milestone is achieved and no payment will be due for the subsequent times
that that milestone is achieved.

Eleos shall pay all
milestone payments hereunder within thirty (30) days following the date on
which the milestone is achieved.

4.3           Earned Royalties
- Eleos.

(a)     Eleos will pay AVI earned royalties of
*****% of Eleos Net Sales received with regard to Licensed AVI IP Products
which are not manufactured by AVI, less any royalty payments payable to Third
Party Licensors, provided that in no instance shall the royalty payable under
this Section 4.3(a) to AVI after reduction for payments to the Third Party
Licensors equal less than *****% of Eleos Net Sales.

(b)     Eleos will pay AVI earned royalties of
*****% of Eleos Net Sales received with regard to Licensed AVI IP Products
which are manufactured by AVI, less any royalty payments payable to Third Party
Licensors, provided that in no instance shall the royalty payable under this Section
4.3(b) to AVI after reduction for payments to the Third Party Licensors equal
less than *****% of Eleos Net Sales.

(c)     In the event that royalties cease to be
payable to any Third Party Licensor, the royalties payable by Eleos to AVI
under this Section 4.3 will be adjusted such that Eleos and AVI share equally
in the financial benefit of the expiration or termination of the obligation to
pay such royalties to the Third Party Licensor.

4.4           AVI Milestone
Payments.  AVI shall make the
following one-time payments to Eleos upon achieving the milestones set forth
below with regard to a Licensed Eleos IP Product:

 7
 

 

	
  Milestone

  	
   

  	
   

  	
   

  	
  Payment Amount

  	
   

  
	
  Enrollment of the first patient in the first human
  clinical study

  	
   

  	
  $

  	
  *****

  	
   

  
	
  Enrollment of the first patient in a Phase III or
  pivotal study

  	
   

  	
  $

  	
  *****

  	
   

  
	
  The first filing of a New Drug Application

  	
   

  	
  $

  	
  *****

  	
   

  
	
  The first commencement of commercial sales after FDA
  approval of a New Drug Application

  	
   

  	
  $

  	
  *****

  	
   

  
	
  The first time AVI achieves $***** in cumulative AVI
  Net Sales

  	
   

  	
  $

  	
  *****

  	
   

  
	
  The first time
  AVI achieves $***** in cumulative AVI Net Sales

  	
   

  	
  $

  	
  *****

  	
   

  

 

                AVI
shall pay all milestone payments hereunder within thirty (30) days following
the date on which the milestone is achieved.

4.5           Earned Royalties
- AVI.

(a)      AVI will pay Eleos earned royalties of
*****% of AVI Net Sales, less any royalty payments payable to Third Party
Licensors, provided that in no instance shall the royalty payable under this
Section 4.5(a) to Eleos after reduction for payments to Third Party Licensors
equal less than *****% of AVI Net Sales.

(b)      In the event that royalties cease to be
payable to any Third Party Licensor, the royalties payable by AVI to AVI under
this Section 4.5 will be adjusted such that AVI and AVI share equally in the
financial benefit of the expiration or termination of the obligation to pay
such royalties to the Party Licensor.

4.6           Timing
of Royalty Payments, Currency, Taxes and Fees.

(a)      Royalties payable to AVI
or Eleos shall be paid quarterly on or before sixty (60) days following the end
of each calendar quarter: March 31, June 30, September 30 and
December 31.  Each such payment will
be for unpaid royalties that accrued within or prior to the most recently
completed calendar quarter.  For example,
within 60 days after March 31, each Party shall pay royalties for the
calendar quarter ending March 31 and any unpaid royalties accrued prior to
such calendar quarter.

(b)      All amounts due under this Agreement shall
be payable in United States dollars. 
When Licensed Eleos IP Products or Licensed AVI IP Products are sold for
currency other than United States dollars, the earned royalties will first be
determined in the foreign currency of the country in which such products were
sold and then converted into equivalent United States dollars.  The exchange rate will be the United States
dollar buying rate quoted in the Wall Street Journal on the last day of the
reporting period.

(c)      The Party paying
royalties hereunder shall be responsible for all taxes, fees or other charges
imposed by the government of any country outside the United States on 

 8
 

the remittance of royalty
income for sales occurring in any such country and for all bank transfer
charges on such payments.

(d)      If at any time legal restrictions prevent
the acquisition or prompt remittance of United States dollars by a Party owing
royalties hereunder with respect to any country where a Licensed Eleos IP
Product or Licensed AVI IP Product is sold, the Party owing such royalties
shall make payment from its other sources of United States dollars.

4.7           Expiration or
Invalidity of Patent.  In the event
that (i) any patent or any claim thereof included within the AVI
Intellectual Property or Eleos Intellectual Property shall be held invalid in a
final decision by a court of competent jurisdiction and last resort in any
country from which no appeal has or can be taken or (ii) if the local
patent authority within such country determines that no patent may issue in a
final decision from which no appeal has or can be taken, and hence there is no
valid patent claim within the relevant Intellectual Property in such country,
all obligation to pay royalties based on such patent or claim shall cease as of
the date of such final decision with respect to such country.  The Party liable for royalties in such a case
shall not, however, be relieved from paying any royalties that accrued before
such decision or that are based on another patent or claim not involved in such
decision, or that are based on non-patent Intellectual Property of the other
Party.

5.                                       Diligence.

5.1           By Eleos.

(a)      Eleos, commencing upon the Effective Date,
shall use commercially reasonable efforts to develop, test, obtain any required
governmental approvals, manufacture, market and sell Licensed AVI IP Products.

(b)      Within one year after the Effective Date,
Eleos shall prepare and provide to AVI a formal commercially reasonable market
analysis and development plan (hereinafter the “Eleos Plan”).  Eleos shall follow the timelines set forth in
the Eleos Plan in terms of products to be commercialized within the timelines
outlined in the Eleos Plan.  Recognizing
the uncertainties that will be inherent in the Eleos Plan, Eleos shall have the
right to amend the Eleos Plan with the consent with AVI, such consent not to be
unreasonably withheld.

(c)      Within three months of receiving all
required government approvals necessary for marketing a Licensed AVI IP Product
in any country, such as marketing authorization and government pricing and
reimbursement approvals, Eleos shall commence commercial marketing of such
product in such country; and shall thereafter use commercially reasonable
efforts to meet the market demand for such products in such country at all
times during the exclusive period of this Agreement.

(d)      If Eleos materially fails to perform any
of its obligations under this Section 5 in a timely manner, except by
reason of force majeure, then AVI shall have the right to terminate this
Agreement in accordance with Section 13.

5.2           By
AVI.

(a)     AVI, commencing upon the Effective Date,
shall use commercially reasonable efforts to develop, test, obtain any required
governmental approvals, manufacture, market and sell Licensed Eleos IP
Products.

 9
 

(b)     Within one year after the Effective Date,
AVI shall prepare and provide to Eleos a formal commercially reasonable market
analysis and development plan (hereinafter the “AVI Plan”).  AVI shall follow the timelines set forth in
the AVI Plan in terms of products to be commercialized within the timelines
outlined in the AVI Plan.  Recognizing
the uncertainties that will be inherent in the AVI Plan, AVI shall have the
right to amend the AVI Plan with the consent of Eleos, such consent not to be
unreasonably withheld.

(c)     Within three months of receiving all
required government approvals necessary for marketing a Licensed Eleos IP
Product in any country, such as marketing authorization and government pricing
and reimbursement approvals, AVI shall commence commercial marketing of such
product in such country; and shall thereafter use commercially reasonable
efforts to meet the market demand for such products in such country at all
times during the exclusive period of this Agreement.

(d)     If AVI materially fails to perform any of
its obligations under this Section 5 in a timely manner, except by reason
of force majeure, then Eleos shall have the right to terminate this Agreement
in accordance with Section 13.

6.                                       Progress
and Royalty Reports.

6.1           Progress Reports.  At the end of the first full calendar
half-year after the Effective Date, and semi-annually thereafter, each Party
shall submit to the other Party a progress report covering its activities
related to the development and testing of Licensed AVI IP Products or Licensed
Eleos IP Products, as the case may be, and the obtaining of the U.S. and
foreign governmental approvals necessary for their marketing.  These progress reports shall be made for each
such product in development.

6.2           Contents.  The progress reports submitted under
Section 6.1 shall include sufficient information to enable the other Party
to determine the submitting Party’s progress in fulfilling its obligations
under Section 5, including, but not limited to, the following topics:

(a)     summary of work completed;

(b)     summary of work in progress, including
product development and testing and progress in obtaining government approvals;

(c)     schedule of anticipated events or
milestones;

(d)     market plans for introduction of Licensed
Products in each region (U.S., EU, Japan) where such products have not been
introduced; and

(e)     activities in obtaining sublicensees and
activities of sublicensees.

6.3           Meetings.  On or about each anniversary of the Effective
Date, each Party shall have the right to call for a half-day, detailed review
meeting during which the Parties and representatives of their sublicensees, to
the extent required under the Parties’ sublicense agreements, shall discuss the
progress reports submitted under Section 6.1.  These meetings shall be held under
appropriate conditions of confidentiality, and each Party will cause its
scientists and other staff to provide full and detailed information to enable
the other Party to evaluate the progress reports submitted under this Section 6
and to evaluate proposed amendments to the Eleos Plan and AVI Plan as described
in Section 5.

 10
 

6.4           Report of First
Sales.  Each Party shall report to
the other Party in its immediately subsequent progress and royalty report the
date of first commercial sales of each Licensed Product in each country.

6.5           Royalty Reports.  After the first sale of each Licensed Product
anywhere in the world, the selling Party will make quarterly royalty reports to
the other Party on or before sixty (60) days after March 31, June 30,
September 30 and December 31 of each year.  Each such royalty report will cover the reporting
Party’s most recently completed calendar quarter and will show (a) the
units sold, gross sales, deductions listed by type and Net Sales of each type
of Licensed Product sold by the reporting Party and its Affiliates on which
royalties have not been paid, country by country; (b) the amount of
royalties and fees and other consideration, in U.S. dollars, payable hereunder;
(c) any other factor used to calculate the royalty or any amount due
hereunder; (d) the currency exchange rates used, if any; and (e) any
other information relating to the foregoing reasonably requested by the Party
receiving the report.

6.6           Disclosure of
Improvements.  If and to the extent
that a Party makes any AVI Improvements or Eleos Improvements or becomes aware
of technical developments that would be relevant to the other Party during the
term of this Agreement, it shall promptly disclose and report the same to the
other Party, as provided in Section 2.3 above, so that the Licensed Products
may be designed, manufactured and sold with the latest and most effective
technology available.

7.                                       Product
Development.

7.1           In the Eleos
Field.  AVI, from time to time during
the term of this Agreement as requested by Eleos, agrees to use its
commercially reasonable efforts to provide development services to Eleos in the
Eleos Field.  Examples of such services
may include manufacturing p53-targeted PMOs for preclinical and clinical
evaluation and conducting pilot toxicology and pharmacokinetic studies.  All such development activities under this
Section 7.1 shall be in accordance with the terms and conditions contained in
statements of work (a “Statement of Work”) executed by the Parties in
accordance with Section 7.3.  The Parties
expect that Eleos will compensate AVI for its services under this Section 7.1
on a monthly basis in amounts equal to AVI’s fully-burdened costs in providing
such services, as further provided in the applicable Statements of Work.  AVI will define “fully-burdened costs” and
provide full detail of this cost structure in the Statement of Work.

7.2           In the Joint
Field.

(a)      If a Party (the “Proposing Party”) wishes
to pursue an opportunity to develop and commercialize AVI Intellectual
Property, Eleos Intellectual Property and/or products embodying such
Intellectual Property in the Joint Field, it shall prepare and submit to the
other Party (the “Receiving Party”) a preliminary proposal describing the
opportunity with supporting rationale for the Steering Committee.  The Steering Committee will review the
preliminary proposal and, if it finds that the preliminary proposal merits
attention, it shall require the Parties to develop a joint Statement of Work in
accordance with Section 7.3 describing in detail how they shall jointly pursue
the opportunity (the “Joint Development Proposal”), focusing on a specific and
narrowly defined subset of the Joint Field (e.g., stroke,
alopecia or AIDS).  The Parties will
share costs on a 50%/50% basis in preparing and executing the Joint Development
Proposal.  If the Steering Committee
rejects the preliminary proposal, either Party may then submit a new
preliminary proposal for that subject matter under this Section 7.2(a).

(b)      The terms and conditions on which the
Parties will pursue Joint Development Proposals will be provided in the
definitive documents which they negotiate for this purpose.  

 11
 

The Parties expect that such
definitive documents will provide that their respective share in milestone and
royalty payments from sublicensees will generally be divided equally after
deduction of payments required to be made to Third Party Licensors, but will
initially be proportionate to the Parties’ respective financial investments in
the relevant product development activities, until any disproportionate
investment is recouped and an additional premium is paid to the Party that made
the greater investment to reflect the associated risk of such activities.  For example, if Eleos expends 60% of the
development costs up to the point of entering into a sublicensing agreement,
and AVI expends 40% of such costs, then (i) Eleos and AVI would share
milestone and royalty revenue from the sublicensee 60%/40% after required Third
Party Licensor payments are made until Eleos recovers an additional annually
compounded 25% cost of capital premium over its incrementally greater share
invested, and (ii) after such recovery the Parties would share sublicense
proceeds on a 50%/50% basis.

7.3           Statements of
Work.  Statements of Work shall be in
writing and shall include, among other things, the detailed research and
development plans, timelines, budgets, payment terms, nature of deliverables,
project coordination and other terms for the Development Services.  No Statement of Work will become effective
unless executed by an authorized representative of each of the Parties.  In the event of a direct conflict between a
Statement of Work and a particular term or condition contained in this
Agreement, this Agreement shall prevail. 
Notwithstanding anything to the contrary above, if a Party performs any
services for the other Party under this Section 7 without first entering into
an applicable Statement of Work, the terms and conditions of this Agreement
shall still govern such services.

8.                                       Steering Committee.

8.1           Steering
Committee.  The Parties shall
establish a steering committee consisting of two members appointed by AVI and
two members appointed by Eleos (the “Steering Committee”).  The Steering Committee shall direct, review
and discuss the progress of the Parties’ efforts with respect to joint
development activities and such other matters arising under this Agreement as
the Parties consider appropriate.  The
Steering Committee shall meet at regular meetings to be held approximately
every three months.  The Steering
Committee shall be responsible for coordinating the creation of Statements of
Work and the qualification of the Second Supply Source and other third-party
contract manufacturers of API.

8.2           Governance of
Steering Committee.  Eleos shall
designate a member of the Steering Committee to serve as the chair of the
Steering Committee for the calendar year 2007. 
Thereafter, a member of the Steering Committee shall be designated by
AVI to serve as chair in even-numbered years, and a member designated by Eleos
shall serve as chair in odd-numbered years. 
The chair shall be responsible for the administration of the Steering
Committee, including, without limitation, the scheduling of meetings and the
preparation of meeting agendas.  Meetings
shall be held at or near the Parties’ locations on an alternating basis or by
telephone conference, at the discretion of the Steering Committee chair.  Each Party shall bear its own costs and
expenses in connection with all Steering Committee activities.  The actions and decisions of the Steering
Committee shall not be binding upon the Parties except as the Parties shall
otherwise agree in writing.

8.3           Project Managers.  The Parties shall each appoint a project
manager to assume overall responsibility for their respective roles and
obligations under this Agreement.  The
Parties’ respective project managers will be responsible for coordinating the
Parties’ respective joint development activities, including overseeing the
performance and quality thereof, participating in (personally or by
representative) meetings of the Steering Committee, acting as day-to-day
liaisons between the Parties and coordination of the plans called for by
Section 5 above.

 12

9.                                       Manufacturing.

9.1           Clinical
Manufacturing.  AVI will be the
preferred supplier to Eleos of cGMP clinical supplies of API, on the terms and
conditions provided in a separate Clinical Supply Agreement.

9.2           Second Supply.  Eleos and AVI will qualify a second
manufacturing source agreed to by the Parties (the “Second Supply Source”) to
manufacture API for Licensed AVI IP Products for clinical and commercial
purposes.  Eleos will develop
qualification criteria and procedures in consultation with AVI, and the Parties
will cooperate to implement those criteria and procedures.  As part of qualification, the Second Supply
Source will produce at least one batch of cGMP API for manufacturing
comparability testing and clinical use. 
Eleos will be responsible for conducting the comparability testing and
will require API batch production records for all API batches in order to
submit CMC filings to the FDA for its INDs and other equivalent regulatory
filings in foreign countries.  AVI will
provide the Second Supply Source with such materials and information as are
necessary to enable the Second Supply Source to manufacture API as required by
Eleos, including training conducted in AVI facilities and written materials
provided in full within one-hundred twenty (120) days of reasonable requests
for information by Eleos or the Second Supply Source.  The Second Supply Source will be required to
sign a suitable Non-Disclosure Agreement acceptable to the Parties that
provides for the maintenance of confidentiality of AVI Intellectual Property
and appropriate restrictions on its use.

9.3           AVI Option for
Commercial Manufacturing.

(a)      To commence commercial manufacturing of
API for Licensed AVI IP Products, Eleos shall request AVI to provide a
quotation for the manufacture of three batches of the API subject to
specifications provided by Eleos.  AVI
shall have a 30-day period to review the request and provide a quotation.  If the AVI quotation is acceptable to Eleos
and AVI demonstrates to Eleos’ reasonable satisfaction that AVI has the
capability to manufacture to Eleos’ requirements, including quality, quantity,
cost, purchase price and delivery, and to meet all applicable regulatory
requirements including passing FDA inspection demonstrating AVI’s capability to
manufacture commercial API under cGMP as a licensed pharmaceutical
manufacturing facility, then the Parties will use their best efforts to
negotiate and execute a separate Commercial Supply Agreement on commercially
reasonable terms under which Eleos will purchase up to one kilogram per year of
commercial API from AVI.  The Parties
agree that the purchase price payable by Eleos for API will be *****% of AVI’s
fully-burdened manufacturing cost, reflecting an appropriate allocation of
indirect costs.  The Commercial Supply
Agreement would provide that if AVI is willing and capable of supplying
commercial quantities of API in excess of one kilogram per year to Eleos, Eleos
would have the right to purchase up to *****% of its commercial needs above one
kilogram/year from the Second Supply Source. 
Earned royalties payable on Net Sales of commercial API manufactured by
the Second Supply Source or other contract manufacturer under these
circumstances will be calculated at the *****% rate of Section 4.3(a).  If AVI thereafter fails to meet its
obligations to Eleos under the Commercial Supply Agreement, earned royalties
payable on Net Sales of commercial API manufactured by the Second Supply Source
or other contract manufacturer will be calculated at the *****% rate of Section
4.3(b).

(b)      If AVI does not provide a quotation within
the 30-day period or is unwilling or unable to manufacture API for any Licensed
AVI IP Product as required by Eleos, Eleos will be free to obtain API from the
Second Supply Source or any other mutually-acceptable contract manufacturer,
with AVI’s consent not to be unreasonably withheld, and AVI will provide the
contract manufacturer with materials, information and training as provided for
the Second Supply Source in Section 9.2. 
Any such contract manufacturer will be required to sign 

 13
 

a suitable Non-Disclosure
Agreement acceptable to the Parties that provides for the maintenance of
confidentiality of AVI Intellectual Property and appropriate restrictions on
its use.  If the contract manufacturer is
one to which AVI has not previously conveyed its manufacturing processes for
the API, Eleos will reimburse AVI *****% of AVI’s fully-burdened cost of
transferring the manufacturing process to the contract manufacturer.  In this case earned royalties payable on Net
Sales of commercial API manufactured by the Second Supply Source or other
contract manufacturer will be calculated at the *****% rate of Section 4.3(b).

10.                                 Intellectual
Property.

10.1         Existing
Intellectual Property.  This
Agreement gives AVI no ownership rights in the Eleos Intellectual Property in
existence as of the Effective Date and gives Eleos no ownership rights in the
AVI Intellectual Property in existence as of the Effective Date.

10.2         Newly Created
Intellectual Property.  During the
term of this Agreement, the Parties anticipate that Intellectual Property may
be created by one or both of the Parties hereto and in furtherance of
performance under this Agreement (“Newly Created Intellectual Property”).  Ownership and use rights for Newly Created
Intellectual Property will be as follows:

(a)      Inventorship.  Inventorship of Newly Created Intellectual
Property shall be determined in accordance with the patent laws of the United
States.

(b)      Ownership.  Newly Created Intellectual Property relating
solely to AVI Intellectual Property shall constitute AVI Intellectual Property
and shall be owned by AVI.  Newly Created
Intellectual Property relating solely to Eleos Intellectual Property shall
constitute Eleos Intellectual Property and shall be owned by Eleos.  Newly Created Intellectual Property that
relates to both AVI Intellectual Property and Eleos Intellectual Property shall
be owned by the Party within whose Field the subject matter of the Newly
Created Intellectual Property falls. 
Newly Created Intellectual Property that relates to both AVI
Intellectual Property and Eleos Intellectual Property and the subject matter of
which falls into both the AVI Field and the Eleos Field shall be deemed to be
jointly owned (“Jointly Owned Intellectual Property”).  AVI and Eleos agree to execute the necessary
documents (e.g., assignments) to convey ownership rights in the Newly Created
Intellectual Property from one Party to the other in keeping with the
parameters set forth above.  Newly
Created Intellectual Property which, under the terms of this Section 10.2(b) is
deemed to be AVI Intellectual Property, Eleos Intellectual Property or Jointly
Owned Intellectual Property will automatically be included in the subject
matter of the license grants of Section 2.

11.                                 Books
and Records.

11.1         Each Party (the “Reporting
Party”) shall keep, and shall cause its Affiliates and sublicensees to keep,
books and records in accordance with generally acceptable accounting principles
accurately showing all transactions and information relating to transactions
under this Agreement.  Such books and
records shall be preserved for at least five (5) years from the date of the
entry to which they pertain and shall be open at reasonable times upon
reasonable notice no more than once per calendar year for inspection by an
independent certified public accountant of national standing satisfactory to
the non-Reporting Party.  Such accountant
shall have reasonable access to the Reporting Party’s offices and the relevant
records, files and books of account, and shall have the right to examine any
other records reasonably necessary to determine the accuracy of the
calculations provided by the Reporting Party under this Agreement. The
accountant shall be required to sign a suitable confidentiality agreement reasonably

 14
 

acceptable to
the Parties prior to conducting such audit, and the only Confidential
Information of the Reporting Party (and its Affiliates) that the accountant
shall be authorized to disclose to the non-Reporting Party will be the results
of the accountant’s calculation of royalties payable hereunder and royalties
paid hereunder.

11.2         The fees and expenses
of the certified public accountant performing such an examination shall be
borne by the non-Reporting Party. 
However, if an error in payable royalties of more than five percent (5%)
of the total royalties due for any year is discovered, or if as a result of the
examination it is determined that the Reporting Party is in material breach of
its other obligations under this Agreement, then such fees and expenses shall
be borne by the Reporting Party, and the Reporting Party shall promptly
reimburse the non-Reporting Party for reasonably documented audit expenses as
well as all overdue royalty and late interest payments.

12.                                 Term.

12.1         Unless otherwise
terminated by operation of law or by one or both of the Parties in accordance
with the provisions of this Agreement, this Agreement shall be in force from
the Effective Date and shall remain in effect in each country until the
expiration of the last-to-expire patent of the Eleos Intellectual Property or
the AVI Intellectual Property licensed hereunder having claims covering a
Licensed Product sold in such country, or ten (10) years from the date of first
commercial sale of a Licensed Product in such country, whichever is later.  After such date of expiration, the license
hereunder shall be considered fully paid up and the only obligations shall be
as set forth in Section 12.2.

12.2         Any expiration or
termination of this Agreement shall not affect the rights and obligations set
forth in Sections 11 (Books and Records), 14 (Disposition of Licensed
Products), 15 (Use of Names), 18 (Patent Marking), 20 (Indemnification), 27
(Confidentiality) and 28 (Dispute Resolution).

13.                                 Termination.

13.1         Notice of Breach.  If a Party breaches or fails to perform any
material provision of this Agreement, the other Party may give written notice
of such default, specifying the breach and each country in which the breach is
allegedly occurring or whether the breach relates to the entire Agreement (a “Notice
of Breach”) to the breaching Party.

13.2         Notice of
Termination.  If the breaching Party
fails to cure such default within sixty (60) days of the Notice of Breach, the
non-breaching Party shall have the right to terminate this Agreement and the
licenses herein (i) as to the country/ies where the breach remains uncured
(if the breach relates only to certain countries) or (ii) if the breach
represents a material portion of the breaching Party’s obligations under this
Agreement, then at the non-Breaching Party’s option, as to the breaching Party’s
license rights under the entire Agreement. 
In order to so terminate, the non-breaching Party shall deliver a second
written notice (a “Notice of Termination”) to the breaching Party, if applicable
specifying the countries where rights hereunder are being terminated.  If a Notice of Termination is sent to a
breaching Party, this Agreement shall automatically terminate on the effective
date of such Notice of Termination to the extent of the termination provided
for therein.  Termination by a
non-breaching Party shall not terminate the license rights and other benefits
received by the non-breaching Party under this Agreement, and the obligations
of the non-breaching Party that correspond thereto (e.g., to make payments under Section 4, engage in diligence
under Section 5, and, in the event Eleos is the non-breaching party, to
purchase manufactured API in accordance with Section 9), but shall terminate
the non-breaching Party’s obligations regarding product development under
Sections 7 and 8.

13.3         Obligation for
Amounts Owed.  Termination shall not
relieve the breaching Party of its obligation to pay all amounts due to the
non-breaching Party as of the effective date of termination and 

 15
 

shall not impair
any accrued rights of the non-breaching Party. 
During the 60-day cure period provided by the foregoing, the Parties
shall negotiate in good faith to resolve any dispute relating to any alleged
breach of this Agreement.

14.                                 Disposition
of Licensed Products and Information on Termination.

14.1         Upon termination of
this Agreement by a Party:

(a)     the other Party may complete all partially
made Licensed Products and dispose of all previously made Licensed Products,
but no more, within a period of one hundred and eighty (180) days after the
Notice of Termination; provided, however, that the disposition of such Licensed
Products shall be subject to the terms of this Agreement including, but not
limited to, the payment of royalties at the rate and at the time provided
herein and the delivery of reports thereon; and

(b)     the breaching Party shall promptly return,
and shall cause its Affiliates and sublicensees to return, to the other Party
all property belonging to the other Party including materials containing Confidential
Information of the other Party (except for one copy of such materials which may
be retained for record purposes only and which may not be disclosed).

15.                                 Use
of Names and Trademarks.

15.1         Nothing contained in
this Agreement shall be construed as granting any right to a Party, its
Affiliates or sublicensees to use in advertising, publicity or other
promotional activities or otherwise any name, trade name, trademark, or other
designation of the other Party.

15.2         Subject to Section
15.1 above, a Party may use any name, trade name, trademark, logo or other
designation (“Marks”) that it desires with respect to the design, development,
manufacture or sale of Licensed Products anywhere in the world.  Each Party shall own all right, title and
interest in and to its own Marks, both during and after termination of this
Agreement.  No Party shall use, register
or attempt to register any Mark that would be confusingly similar to any Mark
of the other Party.

16.                                 Representations and Warranties.

16.1         By AVI.  AVI represents and warrants to Eleos, as of
the date of this Agreement, that:

(a)     it is a corporation duly organized, validly
existing and in good standing under the laws of the State of Oregon;

(b)     it has full power and authority to execute
and deliver this Agreement and to perform its obligations hereunder, and this
Agreement constitutes the valid and legally binding obligation of AVI,
enforceable in accordance with its terms and conditions;

(c)     neither the entering into of this Agreement
nor the performance of any of its obligations hereunder will conflict with or
constitute a breach under any obligation of AVI or any of its Affiliates or
under any agreement, contract or instrument to which AVI or any of its
Affiliates is a party or any other obligation, law or regulation by which AVI
or any of its Affiliates is bound;

 16
 

(d)     it has the sole and lawful right to grant
the licenses, or sublicenses as the case may be to the AVI Intellectual
Property contained in this Agreement, free and clear of any encumbrances except
as described in this Agreement;

(e)     the AVI Intellectual Property includes all
Intellectual Property (including all patent rights issued or in the form of
applications filed) currently owned, licensable, sublicensable or controlled by
AVI that would be infringed by practice of AVI Intellectual Property in the
Eleos Field;

(f)      AVI has not previously assigned, licensed,
sold or otherwise transferred any rights in and to the AVI Intellectual
Property in the Eleos Field or the Joint Field to any other person on or before
the Effective Date;

(g)     no claim is pending or, to the best of AVI’s
knowledge, threatened to the effect that any of the AVI Intellectual Property
infringes upon or conflicts with the valid rights of any other person under any
intellectual property, and, to the best of AVI’s knowledge, there is no basis
for any such claim (whether or not pending or threatened);

(h)     no claim is pending or, to the best of AVI’s
knowledge, threatened to the effect that any of the AVI Intellectual Property
is invalid or unenforceable by AVI, and, to the best of AVI’s knowledge, there
is no basis for any such claim (whether or not pending or threatened);

(i)      to the best of AVI’s knowledge, all AVI
Intellectual Property developed by and belonging to AVI or its Affiliates which
has not been patented has been kept confidential, and all employees,
consultants and founders of AVI and its Affiliates have executed, and are
subject to, confidential and proprietary information agreements, which contain
provisions regarding the assignment of all intellectual property rights to AVI.

(j)      EXCEPT AS SET FORTH IN THIS
SECTION 16.1, THE LICENSE BY AVI SET FORTH HEREIN AND THE AVI INTELLECTUAL
PROPERTY ARE PROVIDED WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED, AND AVI MAKES NO
REPRESENTATION OR WARRANTY THAT THE AVI INTELLECTUAL PROPERTY WILL NOT INFRINGE
ANY PATENT OR OTHER PROPRIETARY RIGHT.

16.2         By Eleos.  Eleos represents and warrants to AVI, as of
the date of this Agreement, that:

(a)     it is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;

(b)     it has full power and authority to execute
and deliver this Agreement and to perform its obligations hereunder, and this
Agreement constitutes the valid and legally binding obligation of Eleos,
enforceable in accordance with its terms and conditions;

(c)     neither the entering into of this Agreement
nor the performance of any of its obligations hereunder will conflict with or
constitute a breach under any obligation of Eleos or any of its Affiliates or
under any agreement, contract or instrument to which Eleos or any of its
Affiliates is a party or any other obligation, law or regulation by which Eleos
or any of its Affiliates is bound;

 17
 

(d)     it has the sole and lawful right to grant
the licenses, or sublicenses as the case may be to the Eleos Intellectual
Property contained in this Agreement, free and clear of any encumbrances except
as described in this Agreement;

(e)     the Eleos Intellectual Property includes
all Intellectual Property (including all patent rights issued or in the form of
applications filed) currently owned, licensable, sublicensable or controlled by
Eleos that would be infringed by practice of Eleos Intellectual Property in the
Eleos Field;

(f)      Eleos has not previously assigned,
licensed, sold or otherwise transferred any rights in and to the Eleos
Intellectual Property in the AVI Field or
the Joint Field to any other person on or before the Effective Date;

(g)     no claim is pending or, to the best of
Eleos’ knowledge, threatened to the effect that any of the Eleos Intellectual
Property infringes upon or conflicts with the valid rights of any other person
under any intellectual property, and, to the best of Eleos’ knowledge, there is
no basis for any such claim (whether or not pending or threatened);

(h)     no claim is pending or, to the best of
Eleos’ knowledge, threatened to the effect that any of the Eleos Intellectual
Property is invalid or unenforceable by Eleos, and, to the best of Eleos’
knowledge, there is no basis for any such claim (whether or not pending or
threatened);

(i)      to the best of Eleos’ knowledge, all Eleos
Intellectual Property developed by and belonging to Eleos or its Affiliates
which has not been patented has been kept confidential, and all employees,
consultants and founders of Eleos and its Affiliates have executed, and are
subject to, confidential and proprietary information agreements, which contain
provisions regarding the assignment of all intellectual property rights to
Eleos.

(j)      EXCEPT AS SET FORTH IN THIS
SECTION 16.2, THE LICENSE BY ELEOS SET FORTH HEREIN AND THE ELEOS
INTELLECTUAL PROPERTY ARE PROVIDED WITHOUT WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED, AND
ELEOS MAKES NO REPRESENTATION OR WARRANTY THAT THE ELEOS INTELLECTUAL PROPERTY
WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT.

17.                                 Patent
Prosecution and Maintenance.

17.1         Prosecution.  Eleos shall diligently prosecute and maintain
the United States and international patent applications and patents included in
the Eleos Intellectual Property using counsel of its choice.  AVI shall diligently prosecute and maintain the
United States and international patent applications and patents included in the
AVI Intellectual Property using counsel of its choice.  Each Party’s counsel shall consult in good
faith with patent counsel for the other Party prior to any material filings or
other actions before or communications with the U.S. Patent and Trademark
Office and shall promptly provide the other Party with copies of all relevant
documentation so that it may be informed of the continuing prosecution.  The receiving Party agrees to keep this
documentation confidential.  Each Party’s
counsel shall take instructions only from that Party.

17.2         Drafting
Consideration.  Eleos shall give due
consideration to drafting or amending any patent application included in the
Eleos Intellectual Property to include claims reasonably requested by 

 18
 

AVI to protect
the Licensed Eleos IP Products contemplated to be sold under this
Agreement.  AVI shall give due
consideration to drafting or amending any patent application included in the
AVI Intellectual Property to include claims reasonably requested by Eleos to
protect the Licensed AVI IP Products contemplated to be sold under this
Agreement.

17.3         Costs.  Eleos shall be responsible for paying all
past and future costs, of preparing, filing, prosecuting, defending, and
maintaining all United States patent applications and/or patents, including
interferences and oppositions, and all corresponding foreign patent
applications and patents covered by Eleos Intellectual Property.  AVI shall be responsible for paying all past
and future costs, of preparing, filing, prosecuting, defending, and maintaining
all United States patent applications and/or patents, including interferences
and oppositions, and all corresponding foreign patent applications and patents
covered by AVI Intellectual Property.  In
addition, for Jointly Owned Intellectual Property Eleos will be responsible for
paying for all future costs for inventions as they apply to new p53-PMO
compositions of matter and uses thereof with respect to p53 regulation
including but not limited to oligonucleotide sequences, and AVI will be
responsible for paying for all future costs for other inventions such as drug
delivery methods or new compositions of matter not targeting p53 and uses
thereof as it applies to PMO technology. 
With respect to Jointly Owned Intellectual Property the responsible
Party will provide the other Party with all correspondence with patent offices
in a timely fashion.  Should the
responsible Party elect to forgo any or all available patent rights with
respect to a Jointly Owned Invention the other Party shall have the right to
take over the prosecution of those rights and pay for all such activity.  The Parties shall mutually share the
prosecution strategy and negotiate on a case-by-case basis when necessary the
allocation of costs associated with prosecution of Jointly Owned Intellectual
Property or Newly Created Intellectual Property described under Section 10.2(b)
that falls outside the foregoing.

17.4         Newly Created
Intellectual Property.  As relates to
Newly Created Intellectual Property: Eleos shall have the right to file patent
applications at its own expense in any country or countries in which AVI has
not elected to secure patent rights or in which AVI’s patent rights hereunder
have terminated, and such applications and resultant patents shall not be
subject to this Agreement and may be freely licensed by Eleos to third parties;
and,  AVI shall have the right to file
patent applications at its own expense in any country or countries in which
Eleos has not elected to secure patent rights or in which Eleos’ patent rights
hereunder have terminated, and such applications and resultant patents shall
not be subject to this Agreement and may be freely licensed by AVI to third
parties.

18.                                 Patent
Marking.

Each Party shall mark all Licensed Products made, used, sold or
otherwise disposed of under the terms of this Agreement, and their containers,
in accordance with 35 U.S.C. § 287(a) or any other successor statute in the
United States and the applicable patent marking laws of any other country in
which Licensed Products are sold.  Each
Party shall ensure that any sublicensee authorized by it under this Agreement
shall also mark all Licensed Products accordingly.  In light of the biological applications of
the Licensed Products and the need to ensure their sterility and
biocompatability, each Party may use any marking technique or procedure which
it determines in its reasonable professional judgment to be suitable to comply
with the foregoing requirement.

19.                                 Infringement.

19.1         In the event that a
Party learns of the substantial infringement in the AVI Field, Eleos Field or
Joint Field of any patent included in the other Party’s Intellectual Property
licensed under this Agreement, the Party with such information shall notify the
other Party in writing and shall provide the other Party with evidence of such
infringement.  Both Parties agree that
during the period and in a jurisdiction where a Party has exclusive rights
under this Agreement under the other Party’s Intellectual 

 19
 

Property, neither
will notify a third party of the infringement of any of such other Party’s
Intellectual Property without first obtaining consent of the other Party, which
consent shall not be unreasonably denied. 
Both Parties shall use their best efforts to cooperate with each other
to terminate such infringement without litigation.

19.2         A Party may request
that the other Party take legal action against the infringement of the other
Party’s Intellectual Property.  Such
request shall be made in writing and shall include reasonable evidence of such
infringement.  If the infringing activity
has not been abated within ninety (90) days following the effective date of
such request, the first Party shall have the right to commence suit on its own
account or to refuse to commence such suit.

19.3         Each Party agrees to
cooperate with the other in litigation proceedings instituted hereunder but at
the expense of the Party on account of whom suit is brought for out-of-pocket
expenses.  Such litigation shall be controlled
by the Party bringing the suit.  Each
Party may be represented by counsel of its choice at its own expense.  If a Party selects its own counsel in the
conduct of such a suit, its counsel shall keep the other Party informed of the
progress and status of such suit.

20.                                 Indemnification
and Insurance.

20.1         Indemnification.  To the maximum extent permitted by law, each
Party (the “Indemnifying Party”) shall indemnify, hold harmless and defend the
other Party (the “Indemnified Party”), its shareholders, directors, officers,
employees, agents and inventors against any and all claims, suits, losses,
liabilities, damages, costs, fees and expenses (including reasonable attorneys’
fees) resulting from or arising out of any claim brought by a third party
against the Indemnified Party related to any actual or alleged (a) breach
of a representation or warranty by the Indemnifying Party under this Agreement;
(b) product liability claim which is related to or arises out of the
manufacture, marketing, distribution, sale or use of Licensed Products by the
Indemnifying Party, except to the extent attributable to the Indemnified Party’s
breach of its representations and warranties provided in this Agreement;
(c) willful misconduct or gross negligence of the Indemnifying Party; or
(d) breach of Section 27 (Confidentiality) by the Indemnifying Party.

20.2         Insurance.  Throughout the term of this Agreement, and to
the extent applicable from and after the date of any use or sale of a Licensed
Product, each Party shall maintain commercially issued policies of insurance
or, with the prior written approval of the other Party, programs of
self-insurance with financial reserves sufficient to support its obligations
under this Agreement, which provide coverage and limits as required by statute
or as necessary to prudently insure the activities and operations of the
insuring Party.  The commercial general
liability insurance policy, or liability self-insurance program, shall include
the interests of the other Party as an additional insured and provide coverage
limits of not less than $***** combined single limits as respects premises,
operations, contractual liability and, if applicable, liability arising out of
products and/or completed operations. 
Each Party shall provide the other Party with certificates of insurance
for commercially insured policies or evidence of self-insurance resources
satisfactory to the other Party’s risk management department.  It is expressly agreed that the insurance or
self-insurance are minimum requirements which shall not in any way limit the
liability of a Party.

20.3         Procedures.  If an Indemnified Party seeks indemnification
under this Section 20, it shall give prompt written notice to the Indemnifying
Party of any claim covered by the foregoing duty of indemnification; provided,
however, that a delay in such notice shall not terminate the duty of
indemnification hereunder, unless such delay shall have materially impaired the
defense of such claim.  The Indemnifying
Party shall have sole and exclusive control of the defense of any such claim,
including the choice and direction of any legal counsel.  In the event and for so long as a Party is
actively contesting 

 20
 

or defending
against any claim in connection with this Section 20, the Indemnified Party
shall cooperate with the Indemnifying Party and its counsel in the contest or
defense, make itself available, and provide such testimony and access to its
books and records as shall be reasonably necessary in connection with the
contest or defense, all at the sole cost and expense of the Indemnifying Party.

21.                                 Notices.

Any notice or payment required to be given to either Party shall be
deemed to have been properly given and to be effective (a) on the date of
delivery if delivered in person, (b) five (5) days after mailing if mailed
by first-class certified mail, postage paid and deposited in the United States
mail, to the respective addresses given below, or to such other address as it
shall designate by written notice given to the other Party, (c) on the
date of delivery if delivered by express delivery service such as Federal
Express or DHL or (d) on the date of transmission if made by facsimile.

In the case of
Eleos:                                                                                 Eleos,
Inc.

One Valmont Plaza

Suite 301

Omaha, Nebraska 68154

Attn:  President

Facsimile Number:  402-255-5778

In the case of AVI:                                                                                            AVI
BioPharma, Inc.

One SW
Columbia, Suite 1105

Portland, Oregon 97258

Attn:  President

Facsimile Number:  503-227-0751

22.                                 Assignment.

This Agreement shall be binding upon, and shall inure to the benefit
of, the Parties and their respective Affiliates, successors and assigns.  No Party may assign any of its rights or
privileges or delegate any of its duties or obligations (by operation of law or
otherwise) hereunder without prior written consent of the other Party;
provided, however, that either Party may make such an assignment or delegation
in conjunction with (i) the acquisition of the Party or of all or substantially
all of the Party’s assets relating to this Agreement other than, in the case of
Eleos, any of the foregoing involving Genta Incorporated, Idera
Pharmaceuticals, Inc. (formerly Hybridon, Inc.), ISIS Pharmaceuticals, Inc. or
any of their affiliates or (ii) a corporate restructuring or reorganization in
which such Party assigns its right, title and interest under this Agreement to
an Affiliate.  Any attempted or purported
assignment or transfer without such consent, when required under this
provision, shall be void and of no effect and shall constitute a material
breach of this Agreement.

23.                                 Late
Payments.

In the event any amounts due a Party hereunder, including but not
limited to royalty payments, milestone payments, fees and patent cost
reimbursements, are not received when due except when prevented by force
majeure, the paying Party shall pay to the other Party interest charges at a
rate of twelve (12) percent per annum or the highest rate permitted by law if
less than 12%.  Such interest shall be
calculated from the date payment was due until actually received.

 21
 

24.                                 Waiver.

It is agreed that failure to enforce any provisions of this Agreement
by a Party shall not be deemed a waiver of any breach or default hereunder by
the other Party.  It is further agreed
that no express waiver by either Party hereto of any breach or default of any
of the covenants or agreements herein set forth shall be deemed a waiver as to
any subsequent and/or similar breach or default.

25.                                 Governing
Law.

This Agreement shall be interpreted and construed in accordance with
the laws of the State of Delaware without regard to its conflicts of law provisions,
but the scope and validity of any patent or patent application shall be
governed by the applicable laws of the country of such patent or patent
application.

26.                                 Export
Control Laws.

Each Party shall observe all applicable United States and foreign laws
with respect to the transfer of Licensed Products and related technical data to
foreign countries, including the International Traffic in Arms Regulations
(ITAR) and the Export Administration Regulations.

27.                                 Confidentiality

27.1         Nondisclosure and
Non-Use.  Each Party shall keep all
Confidential Information of the other Party supplied to or learned by it in the
strictest confidence and shall not disclose such Confidential Information to an
unauthorized party.  Each Party shall
take proper and appropriate steps to protect such Confidential Information
received or learned by it and its personnel, and shall use no less than a
reasonable standard of care to protect such Confidential Information.  Each Party shall limit disclosure and access
to such Confidential Information to only those of its personnel who are
directly involved with the Party’s activities under this Agreement.  Each Party shall ensure that its personnel
performing services under this Agreement or any Statement of Work or having
access to Confidential Information of the other Party shall preserve the
confidential nature of such Confidential Information, and shall be primarily
liable for any breaches of the obligations of this Section 27 by its
personnel.  Each Party will use all
Confidential Information of the other Party only in connection with the
performance of the activities contemplated by this Agreement.

27.2         Exceptions.  This Section 27 shall not apply to any
information that (a) is already known by the recipient at the time of its disclosure
to the recipient; (b) is publicly available or later becomes publicly available
through no unauthorized or wrongful act; or (c) is disclosed to the recipient
by a third party having no similar confidentiality obligation.

27.3         Compelled
Disclosure.  If a Party is required
by law or court order to disclose Confidential Information of the other Party,
it shall provide the other Party with prompt written notice of such requirement
so that an appropriate protective order or other relief may be sought.

27.4         Third-Party
Information.  If any Confidential
Information is supplied to a Party by a third party having a legal right to
disclose it, then: (a) the receiving Party shall have the right to use that
portion of the Confidential Information so disclosed only in connection with
work done for that third party; and (b) such disclosure by that third party
shall not place that portion of the Confidential Information in the public
domain, and shall not relieve the receiving Party of its obligations under this
Agreement.

 22
 

27.5         Binding on
Personnel.  Each Party shall provide
to each of its personnel performing services under this Agreement notice of the
confidentiality and non-use restrictions contained in this Agreement prior to
allowing such personnel to receive any Confidential Information from the other
Party or perform any services hereunder.

27.6         Equitable Relief.  Each Party acknowledges that a breach of this
Section 27 would cause irreparable harm and injury to the other Party, which
harm and injury could not be adequately compensated for by damages.  Accordingly, in the event of such a breach,
the Parties agree that each of them shall be entitled, in its discretion and
without posting a bond, to immediate injunctive relief in addition to any other
remedies it might have, whether at law or in equity.

27.7         Survival.  The obligations imposed by this Section 27
shall survive with respect to each item of Confidential Information so long as
no circumstance described in Section 27.2 has occurred.

28.                                 Dispute
Resolution.

28.1         General.  Any dispute arising out of or relating to
this Agreement shall be resolved in accordance with the procedures specified in
this Section 28, which shall be the sole and exclusive procedures for the
resolution of any such disputes.

28.2         Negotiation.  The Parties shall attempt in good faith to
resolve any dispute arising out of or relating to this Agreement promptly by
negotiation between executives who have authority to settle the controversy and
who are at a higher level of management than the persons with direct
responsibility for administration of this Agreement.  A Party may give the other Party written
notice of any dispute not resolved in the normal course of business.  Within 15 days after delivery of the notice,
the receiving Party shall submit to the other a written response.  The notice and response shall include (a) a
statement of that Party’s position and a summary of arguments supporting that
position, and (b) the name and title of the executive who will represent that
Party and of any other person who will accompany the executive.  Within 30 days after delivery of the initial
notice, the executives of both Parties shall meet at a mutually acceptable time
and place, and thereafter as often as they reasonably deem necessary, to attempt
to resolve the dispute.  All negotiations
pursuant to this Section 28.2 are confidential and shall be treated as
compromise and settlement negotiations for purposes of applicable rules of
evidence.

28.3         Arbitration.  If the dispute has not been resolved by
negotiation as provided herein within 45 days after delivery of the initial
notice of negotiation, or if the Parties failed to meet within 30 days after
such delivery, the dispute shall be finally resolved by binding arbitration
before three arbitrators in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (“AAA”) then pertaining.  The three arbitrators shall be appointed by
the AAA and shall each be neutral, independent, disinterested, impartial and
shall abide by the Code of Ethics for Arbitrators in Commercial Disputes
approved by the AAA.  The parties hereby
consent to the jurisdiction of the federal district court for the district in
which the arbitration is held for the enforcement of this provision and the entry
of judgment on any award rendered hereunder. 
Should such court for any reason lack jurisdiction, any court with
jurisdiction shall enforce this clause and enter judgment on any award.  The place of arbitration will be Denver,
Colorado or such other neutral site as the parties may jointly select.

28.4         Injunctive Relief.  Notwithstanding the provisions of this
Section 28, each Party shall be entitled to seek injunctive relief at any time
in any court of competent jurisdiction.

 23
 

29.                                 Force
Majeure.

No Party shall be deemed to be in breach of this Agreement or otherwise
be liable to the other Party by reason of any delay in performing or failure to
perform any obligations hereunder to the extent that such delay or failure was
due to any event of force majeure of which it has notified the other Party, and
the time of performance of that obligation shall be extended accordingly.  If the event of force majeure prevails for a
continuous period in excess of three months, the Parties shall enter into bona
fide discussions with a view to alleviating its effects or to agree to such
alternative arrangements as may be fair and reasonable.  Without prejudice to the generality of the
foregoing, the following without limitation shall be regarded as events of
force majeure: acts of God; explosions; floods; tempest; fires or accidents;
war or threat of war; acts, restrictions or regulations of any government or
governmental agency; import or export regulations or embargoes; strikes or
other labor troubles not limited to the labor force of the affected Party;
difficulties in obtaining raw materials; power failure or breakdowns in
machinery or any other cause beyond the control of, or occurring without the
fault of, the Party asserting the event of force majeure.

30.                                 Miscellaneous

30.1         Headings.  The headings of the several articles are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.

30.2         Amendments.  No amendment or modification hereof shall be
valid or binding upon the Parties unless made in writing and signed on behalf
of each Party by a duly authorized representative.

30.3         Entire Agreement.  This Agreement embodies the entire
understanding of the Parties and shall supersede all previous and
contemporaneous communications, representations or understandings, either oral
or written, between the Parties relating to the subject matter hereof.

30.4         Judicial
Modification.  In case any of the
provisions contained in this Agreement shall be held to be invalid, illegal or
unenforceable in any respect, (i) such invalidity, illegality or
unenforceability shall not affect any other provisions hereof, (ii) the
particular provision, to the extent permitted by law, shall be reasonably
construed and equitably reformed to be valid and enforceable and
(iii) this Agreement shall be construed as if such invalid or illegal or
unenforceable provisions had never been contained herein.

30.5         Press Releases.  The Parties shall use reasonable efforts to
cooperate in issuing a joint press release upon execution of this Agreement and
in issuing further press releases related to this Agreement.  If at any time disclosure regarding this
Agreement is required under public reporting requirements of applicable
securities laws and the Parties are not able to agree on the content and manner
of issuing such disclosure, AVI, and Eleos if it becomes subject to such public
reporting requirements, will be authorized to issue a sole release.  Prior to issuing such a sole release, the
disclosing Party shall provide the other Party with an opportunity to review
and comment on a draft of such release and will consider in good faith any
comments that the other Party communicates in a timely fashion on such draft
press release.

30.6         Publications.  The Parties will be entitled to publish or
present on the results of the research hereunder and any Product, provided that
the Party seeking to publish will deliver to the other Party for its review a
copy of any proposed publication, poster or an abstract of any oral
presentation at scientific meetings involving any research or Product
hereunder, or the Confidential Information of the other Party, at least
forty-five (45) days prior to submission of scientific publications or
abstracts of oral presentations.  The
reviewing Party will have the right to request that any of its Confidential
Information 

 24
 

be deleted
from such publication or presentation, and the disclosing Party will comply
with that request.  If the disclosing
Party does not receive any feedback from the reviewing Party within that 45-day
period, the disclosing Party will be free to proceed with the publication or
presentation except that neither Party may publish on the other Party’s
exclusive Products without the prior written approval of the other Party, which
may be given at that Party’s sole discretion.

30.7         Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

30.8         No Agency.  Nothing herein shall be deemed to constitute
one Party as the agent or representative of the other Party or both Parties as
joint venturers or partners.  Each Party
is an independent contractor.

IN
WITNESS WHEREOF, both Parties have executed this Agreement,
in duplicate originals, by their duly authorized representatives on the day and
year first written above.

	
  AVI BIOPHARMA, INC. 

  	
   

  	
  ELEOS, INC.  

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  By:  

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:  

  	
   

  	
   

  	
  Name:  

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  

 

 

 25

Exhibit A

AVI
Intellectual Property

***** Patents

1.  Attorney Docket No. ***** entitled ***** - U.S.
Patent No. *****

2.  Attorney Docket No. ***** entitled ***** — U.S.
Patent No. *****

3.  Attorney Docket No. ***** entitled ***** —  U.S. Patent No. *****

4.  Attorney Docket No. ***** entitled ***** — U.S.
Patent No. *****

5.  Attorney Docket No. ***** entitled *****— CA
*****, JP *****, AU *****, EP *****, KR *****

6.  Attorney Docket No. ***** ***** —EP *****

7.  Attorney Docket No. ***** entitled ***** — US
Provisional Application *****

Delivery Technology

8 & 9.  Attorney Docket Nos. ***** and ***** entitled
***** — U.S. application ***** pending; corresponding CA, JP, AU, EP, KR
applications

10.  Attorney Docket No. ***** entitled ***** -
U.S. application ***** pending; corresponding PCT application

11.  Attorney Docket No. ***** entitled ***** — U.S. application ***** pending;
corresponding PCT application

12.  Attorney Docket No. ***** entitled ***** — U.S. application ***** pending;
corresponding CA, AU, EP applications

p53-Related

13.  Attorney Docket No. ***** entitled ***** — U.S. Patent No. *****; EP Patent
No. *****; AU Patent No. *****; corresponding CA, JP, KR applications

Licensed
Intellectual Property

14 & 15.  Attorney Docket No. ***** entitled ***** — U.S.
Patent Nos. *****, *****and *****; EP Patent No. *****; corresponding CA,
JP applications (Licensed from *****)

16.  Attorney Docket No. ***** — U.S. Patent
No.  ***** (*****)

17.  Attorney Docket No. ***** entitled ***** - U.S.
Patent No. *****; AU Patent No. *****; EP Patent No. ***** (*****)

18.  Attorney Docket No. ***** entitled ***** — U.S.
Patent No. ***** (*****)

19.  Attorney Docket No. ***** entitled ***** — U.S.
Patent No. ***** (*****)

 

 2

Exhibit B

Eleos
Intellectual Property

1)  Patents and Inventions
Subject to Exclusive Licensing Agreements:

A.           Sublicense Agreement
between ***** and Eleos, Inc. *****.

B.             Amendment
to License Agreement between ***** on behalf of ***** and Eleos dated *****.

2)  Eleos Patents and Inventions Exclusively
Licensed from *****

A.  ***** Sublicensed Patents:

	
  1a.  *****

  
	
   

  	
   

  
	
  Patent Number

  	
  *****

  
	
   

  	
   

  
	
  Issued

  	
  *****

  
	
   

  	
   

  
	
  Priority Date

  	
  *****

  
	
   

  	
   

  
	
  Inventor

  	
  *****

  
	
   

  	
   

  
	
  Assignee

  	
  *****

  
	
   

  	
   

  
	
  Broad Claims

  	
  *****.

  

 

·                  The
foreign counterparts of patent 1a. are pending
in Europe, Canada and Japan.  In
addition, the option to generate a divisional of this patent has been
taken.  This divisional belongs to *****
and has broader claims, including *****. 
This divisional is licensed to Eleos Inc.

	
  2a.  *****

  
	
   

  	
   

  
	
  Patent Number

  	
  *****

  
	
   

  	
   

  
	
  Issued

  	
  *****

  
	
   

  	
   

  
	
  Priority Date

  	
  *****

  
	
   

  	
   

  
	
  Inventor

  	
  *****

  
	
   

  	
   

  
	
  Assignee

  	
  *****

  
	
   

  	
   

  
	
  Broad Claims

  	
  (1)  *****.

  (2)  *****.

  

 

·                  The foreign
counterparts of patent 2a. have been
filed independently of 2a.  National filings are Europe,
Canada and Australia.  The claims dealing
with ***** are not being pursued in foreign filings because of prior art.  The principle claims in the foreign applications
are for *****.

 B-1
 

 

	
  3a.  *****

  
	
   

  	
   

  
	
  Patent Number

  	
  *****

  
	
   

  	
   

  
	
  Issued

  	
  *****

  
	
   

  	
   

  
	
  Priority Date

  	
  *****

  
	
   

  	
   

  
	
  Inventor

  	
  *****

  
	
   

  	
   

  
	
  Assignee

  	
  *****

  
	
   

  	
   

  
	
  Broad Claims

  	
  (1)  *****.

  (2)  *****.

  (3)  *****.

  

 

·                  The foreign
counterparts of patent 3a. are pending
in Europe, Canada, Australia and Japan.

	
  4a.  *****

  
	
   

  	
   

  
	
  Patent Number

  	
  *****

  
	
   

  	
   

  
	
  Issued

  	
  *****

  
	
   

  	
   

  
	
  Priority Date

  	
  *****

  
	
   

  	
   

  
	
  Inventor

  	
  *****

  
	
   

  	
   

  
	
  Assignee

  	
  *****

  
	
   

  	
   

  
	
  Broad Claims

  	
  *****

  

 

·                  The foreign
counterparts of patent 4a. are pending
in Europe, Canada, Australia and Japan.

B.  *****:

	
   1b.  *****

   
	
   

  	
   

  
	
  Patent Number

  	
  *****

  
	
   

  	
   

  
	
  Issued

  	
  *****

  
	
   

  	
   

  
	
  Priority Date

  	
  *****

  
	
   

  	
   

  
	
  Inventor

  	
  *****

  
	
   

  	
   

  
	
  Assignee

  	
  *****

  
	
   

  	
   

  
	
  Broad Claims

  	
  *****

  

 

 B-2
 

 

	
  2b.  *****

  
	
   

  	
   

  
	
  Patent Number

  	
  *****

  
	
   

  	
   

  
	
  Issued

  	
  *****

  
	
   

  	
   

  
	
  Priority Date

  	
  *****

  
	
   

  	
   

  
	
  Inventor

  	
  *****

  
	
   

  	
   

  
	
  Assignee

  	
  *****

  
	
   

  	
   

  
	
  Broad Claims

  	
  (1)  *****.

  (2)  *****.

  

 

·                  The foreign
counterpart of patents 1b. and 2b. is European patent #*****, which is issued in 13
countries with an expiration date of *****. 
Issued patents have also been obtained in Canada and Australia.

2)  Eleos Additional Patents and Inventions
Exclusively Licensed from *****:

 

	
  *****

  
	
   

  	
   

  
	
  Application Number

  	
  *****

  
	
   

  	
   

  
	
  Issued

  	
  Pending (first divisional has been allowed others
  are pending)

  
	
   

  	
   

  
	
  Priority Date

  	
  *****

  
	
   

  	
   

  
	
  Inventor

  	
  *****

  
	
   

  	
   

  
	
  Assignee

  	
  *****

  
	
   

  	
   

  
	
  Broad Claims

  	
  (1)  *****.

  (2)  *****

  (3)  *****

  (4)  *****

  (5)  *****

  (6)  *****

  (7)  *****

  

 

 

 B-3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}]]