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Exhibit 10.37    
    

 
 

ASSET PURCHASE AGREEMENT    
    

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

 
 

RECITALS    
    

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

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

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

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

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

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

 
 

AGREEMENT    
    

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

1.    Certain Definitions.  

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

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

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

        "Closing"    has the meaning specified in Section 6.1. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

        "Leases"    has the meaning specified in Section 6.2.7 

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

        "Liens"    has the meaning specified in Section 7.6. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2.    Sale And Purchase Of Assets.  

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

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

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

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

        2.1.3 All
of the Contracts; 

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

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

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

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

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

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

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

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

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

3.    Consideration.  

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

4.    [RESERVED]  

5.    Transfer of Employees.  

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

6.    The Closing.  

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

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

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

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

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

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

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

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

        6.2.6 The
closing certificate contemplated by Section 10 hereof; 

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

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

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

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

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

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

        6.3.4 Appropriate
documentation regarding the assignment of the Leases; and 

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

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7.    Representations of Seller and Selling Members.  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

8.    Representations of Purchaser and Parent.  

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

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

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

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

10

 

9.    Additional Covenants.  

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

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

        9.3    Taxes.    

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

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

11

 

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

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

        9.4    Further Assurances.    

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

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

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

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

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

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

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

12

 

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

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

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

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

10.    Conditions Precedent To Obligations Of Purchaser.  

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

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

13

 

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

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

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

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

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

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

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

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

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

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

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

11.    Conditions To Obligations Of Seller.  

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

14

 

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

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

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

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

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

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

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

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

13.    Indemnification.  

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

15

 

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

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

16

 

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

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

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

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

In
the case of Purchaser, to: 

LECG,
LLC

2000 Powell Street, Suite 600

Emeryville, California 94608

Attention: Chief Financial Officer

Fax: (510) 653-9898 

In
the case of Parent, to: 

LECG
Holding Company, LLC

2000 Powell Street, Suite 600

Emeryville, California 94608

Attention: Chief Financial Officer

Fax: (510) 653-9898 

with
copies of notices to Purchaser or Parent to: 

Marvin
A. Tenenbaum, Esq.

General Counsel

LECG, LLC

33 West Monroe Street, Suite 1850

Chicago, IL 60603

Fax: (312) 267-8220 

17

 

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

Dr. Samuel
J. Kursh

BLDS, LLC

1608 Walnut Street, Suite 1200

Philadelphia, PA 19103 

with
a copy to: 

Joseph
E. Ronan, Jr.

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103

Fax: (215) 963-5001 

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

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

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

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

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

[signatures appear on next page]

18

 

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

	LECG, LLC

A California limited liability company	 	LECG HOLDING COMPANY, LLC

A California limited liability company
	

By:	
 	

LECG Holding Company, LLC	
 	

By:	
 	

/s/  ILLEGIBLE      

	Its:	 	Sole Member and Manager	 	Its:	 	President
	

 	
 	

By:	
 	

/s/  ILLEGIBLE      
	
 	

 	
 	

 
	 	 	Its:	 	    
	 	 	 	 
	

 	
 	

 	
 	

 	
 	

BLDS, LLC A Delaware limited liability company
	

 	
 	

 	
 	

 	
 	

By:	
 	

/s/  SAMUEL J. KURSH      

	 	 	 	 	 	 	Its:	 	President
	

 	
 	

 	
 	

 	
 	

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

 	
 	

 	
 	

 	
 	

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

 	
 	

 	
 	

 	
 	

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

 	
 	

 	
 	

 	
 	

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

19

 
 
 

LIST OF EXHIBITS    
    

1.  Exhibit A    Bill
of Sale 

2.  Exhibit B    Instrument
of Assignment and Assumption 

3.  Exhibit C    RESERVED 

4.  Exhibit D    RESERVED

5.  Exhibit E    Director
Service Agreement and Director Practice Purchase Agreement (filed as Exhibit 10.38 to the Registration Statement on Form S-1) 

6.  Exhibit F    Financial
Statements 

20

EXHIBIT A

 

GENERAL ASSIGNMENT AND BILL OF SALE

 

1.             Sale and Transfer of Purchased Assets and Contract
Rights.  For good and
valuable consideration, the receipt, adequacy and legal sufficiency of which
are hereby acknowledged, and as contemplated by Section 6.2.2 of that
certain Asset Purchase Agreement effective as of August 1, 2003 (the “Purchase
Agreement”), to which LECG, LLC, a California limited liability company (the
“Purchaser”), LECG Holding Company, LLC, a California limited liability company
(“Parent”), BLDS, LLC, a Delaware limited liability company (“Seller”),
Dr. Bernard R. Siskin, Dr. Leonard A. Cupingood, Dr. David W. Griffin and Mr.
Samuel J. Kursh (each a “Selling Member” and collectively the “Selling
Members”), are parties, Seller hereby sells, transfers, assigns, conveys,
grants and delivers to the Purchaser and its successors and assigns, effective
as of 11:59 p.m. Eastern time on August 1, 2003 (the “Effective Time”), all of
Seller’s right, title and interest in and to all of the Purchased Assets (as
defined in the Purchase Agreement).

 

2.             Further Actions.  To the extent set forth in the Purchase Agreement, Seller
covenants and agrees to warrant and defend the sale, transfer, assignment,
conveyance, grant and delivery of the Purchased Assets hereby made against all
Persons whomsoever, to take all steps reasonably necessary to establish the
record of the Purchaser’s title to the Purchased Assets and, at the request of
the Purchaser, to execute and deliver further instruments of transfer and assignment
and take such other action as the Purchaser may reasonably request to more
effectively transfer and assign to and vest in the Purchaser each of the
Purchased Assets, all at the sole cost and expense of Seller.

 

3.             Power of Attorney.  Without limiting Section 2 hereof,
Seller hereby constitutes and appoints the Purchaser the true and lawful agent
and attorney in fact of Seller, with full power of substitution and
resubstitution, in whole or in part, in the name and stead of Seller but on
behalf and for the benefit of the Purchaser and its successors and assigns,
from time to time:

 

(a)           to demand, receive and collect any and all of the
Purchased Assets and to give receipts and releases for and with respect to the
same, or any part thereof;

 

(b)           to institute and prosecute, in the name of Seller or
otherwise, any and all proceedings at law, in equity or otherwise, that the
Purchaser or its successors and assigns may deem proper in order to collect or
reduce to possession any of the Purchased Assets and in order to collect or
enforce any claim or right of any kind hereby assigned or transferred, or
intended so to be; and

 

(c)           to do all things legally permissible, required or
reasonably deemed by the Purchaser to be required to recover and collect the
Purchased Assets and to use Seller’ name in such manner as the Purchaser may
reasonably deem necessary for the collection and recovery of same,

 

 

Seller hereby declares that the foregoing
powers are coupled with an interest and are and will be irrevocable by Seller.

 

4.             Terms of the Purchase Agreement.  The terms of the Purchase Agreement,
including but not limited to the representations, warranties, covenants,
agreements and indemnities of and by Seller and/or the Selling Members, as
applicable, relating to the Purchased Assets, are incorporated herein by this
reference.  Seller and the Selling
Members acknowledge and agree that the representations, warranties, covenants,
agreements and indemnities contained in the Purchase Agreement will not be
superseded hereby but will remain in full force and effect to the full extent
provided therein.  In the event of any
conflict or inconsistency between the terms of the Purchase Agreement and the
terms hereof, the terms of the Purchase Agreement will govern.

 

IN WITNESS WHEREOF, Seller and the
Selling Members have executed this General Assignment and Bill of Sale
effective as of August 1, 2003.

 

 

	
  BLDS, LLC,

  a Delaware limited liability company

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Samuel J. Kursh

  	
   

  	
   

  
	
   

  	
   

  
	
  Its:

  	
  Pres

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Bernard R. Siskin

  	
   

  	
   

  
	
  Dr. Bernard R. Siskin

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Leonard A.
  Cupingood

  	
   

  	
   

  
	
  Dr. Leonard A.
  Cupingood

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ David W. Griffin

  	
   

  	
   

  
	
  Dr. David W. Griffin

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Samuel J. Kursh

  	
   

  	
   

  
	
  Dr. Samuel J. Kursh

  	
   

  
						

 

 

EXHIBIT B

 

INSTRUMENT OF ASSIGNMENT AND
ASSUMPTION

 

This Assignment and
Assumption Agreement (the “Assignment and Assumption”) is entered into
effective as of August 1, 2003 by and among LECG, LLC, a California limited
liability company (the “Assignee”), BLDS, LLC, a Delaware limited
liability company (“Assignor”) and Dr. Bernard R. Siskin, Dr. Leonard A.
Cupingood, Dr. David W. Griffin and Mr. Samuel J. Kursh (each a “Selling
Member” and collectively the “Selling Members”).

 

WHEREAS, Assignor and
Assignee are parties to that certain Asset Purchase Agreement effective as of
August 1, 2003 (the “Purchase Agreement”), in accordance with which Assignee
has agreed to purchase from Assignor the Purchased Assets (as defined in the
Purchase Agreement); and

 

WHEREAS, pursuant to the
Purchase Agreement, Assignor has agreed to assign certain rights and agreements
to Assignee, and Assignee has agreed to assume certain obligations of Assignor,
as set forth herein, and this Assignment and Assumption is contemplated by Section
6.2.3 of the Purchase Agreement;

 

NOW, THEREFORE, for and in
consideration of the premises and the mutual covenants contained herein, and
for other good and valuable consideration, the receipt, adequacy and legal
sufficiency of which are hereby acknowledged, the parties do hereby agree as
follows:

 

1.             Capitalized Terms.  Capitalized terms used but not defined
herein will have the meanings for such terms that are set forth in the Purchase
Agreement.

 

2.             Assignment and Assumption.  Effective as of 11:59 p.m. Eastern time on
August 1, 2003  (the “Effective Time”),
Assignor hereby assigns, sells, transfers and sets over (collectively, the
“Assignment”) to Assignee all of Assignor’s right, title, benefit, privileges
and interest in and to, and all of Assignor’s burdens, obligations and
liabilities in connection with, each of the Assumed Liabilities.  Assignee hereby accepts the Assignment and
assumes and agrees to observe and perform all of the duties, obligations,
terms, provisions and covenants, and to pay and discharge all of the
liabilities of Assignor to be observed, performed, paid or discharged from and
after the Closing, in connection with the Assumed Liabilities.  Assignee assumes no Excluded Liabilities,
and the parties hereto agree that all such Excluded Liabilities will remain the
sole responsibility of Assignor.

 

3.             Terms of the Purchase Agreement.  The terms of the Purchase Agreement,
including but not limited to the representations, warranties, covenants,
agreements and indemnities of and by Assignor and/or the Selling Members, as
applicable, relating to the Purchased Assets, are incorporated herein by this
reference.  Assignor and the Selling
Members acknowledge and agree that the representations,

 

 

warranties, covenants, agreements and
indemnities contained in the Purchase Agreement will not be superseded hereby
but will remain in full force and effect to the full extent provided
therein.  In the event of any conflict
or inconsistency between the terms of the Purchase Agreement and the terms
hereof, the terms of the Purchase Agreement will govern.

 

4.             Further Actions.  Each of the Assignee and Assignor covenants and agrees, at its
own expense, to execute and deliver, at the request of the other party hereto,
such further instruments of transfer and assignment and to take such other
action as such other party may reasonably request to more effectively
consummate the assignments and assumptions contemplated by this Assignment and
Assumption.

 

IN WITNESS WHEREOF, the parties
have executed this Assignment and Assumption Agreement as of the date first
above written.

 

	
  ASSIGNOR:

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
  BLDS,
  LLC

  	
  LECG,
  LLC,

  
	
  a
  Delaware limited liability company

  	
  a
  California limited liability company

  
	
   

  	
   

  
	
  By:

  	
  /s/ Samual J. Kursh

  	
   

  	
   

  	
  By:

  	
  LECG
  Holding Company, LLC,

  
	
  Its:

  	
  Pres

  	
   

  	
   

  	
   

  	
  a
  California limited liability company

  
	
   

  	
   

  	
   

  	
   

  	
  Its:

  	
  Sole
  Member and Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  David P. Kaplan

  
	
   

  	
   

  	
   

  	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
  SELLING MEMBERS:

  	
   

  
	
   

  	
   

  
	
  /s/ Bernard R. Siskin

  	
   

  	
   

  
	
  Dr. Bernard R. Siskin

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Leonard A.
  Cupingood

  	
   

  	
   

  
	
  Dr. Leonard A.
  Cupingood

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ David W. Griffith

  	
   

  	
   

  
	
  Dr. David W. Griffith

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Samuel J. Kursh

  	
   

  	
   

  
	
  Dr. Samuel J. Kursh

  	
   

  
									

 

 

 

EXHIBIT C

 

[RESERVED]

 

 

EXHIBIT D

 

[RESERVED]

 

 

EXHIBIT E

 

DIRECTOR SERVICE AGREEMENT

 

 

DIRECTOR SERVICE AGREEMENT

 

This Director Service
Agreement (the “Agreement”) is made effective as of August 1, 2003 by
and between LECG, LLC, a California limited liability company (“LECG”),
Dr. Bernard R. Siskin, Dr. Leonard A. Cupingood, Dr. David W. Griffin and Dr.
Samuel J. Kursh (each a “BLDS Director” and collectively the “BLDS
Directors”).

 

RECITALS

 

A.            LECG, LECG Holding Company, LLC (“Parent”), BLDS,
LLC, and the BLDS Directors are parties to that certain Asset Purchase
Agreement dated as of the date hereof pursuant to which LECG will purchase
certain of the operating assets of CFES (the “Asset Purchase Agreement”).  Terms not otherwise defined herein will have
the meanings given in the Asset Purchase Agreement.

 

B.            In connection with the purchase of certain of the
operating assets of [Seller], and as a condition precedent thereto, LECG will
also purchase from each BLDS Director the goodwill associated with the personal
and business relationships developed by each BLDS Director as a result of the
skill, ability, integrity, reputation and personal characteristics of each BLDS
Director pursuant to that certain Director Practice Purchase Agreement entered
into as of the date hereof by and among LECG, Parent and the BLDS Directors
(the “Director Practice Purchase Agreement”).

 

C.            In connection with the Asset Purchase Agreement and the Director
Practice Purchase Agreement, LECG also desires to retain the services of the
BLDS Directors as employees of LECG on the terms and conditions set forth
herein.

 

D.            Entering into this Agreement is a condition precedent to
the closing of the Asset Purchase Agreement and LECG is proceeding with the
transactions described in the Asset Purchase Agreement in reliance on the terms
and conditions of this Agreement.

 

AGREEMENT

 

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

 

1.             Exclusive
Employment with LECG

 

1.1          As of the date hereof, the
BLDS Directors will become Directors of LECG. 
The BLDS Directors, subject to the approval of LECG, will choose one
BLDS Director to serve as a “Managing Director.”  The Managing Director will, in coordination
with the Chairman and President of LECG, assist in managing the overall
professional development of the BLDS Directors, including recruiting of new
professional talent, client acquisition and business strategy, and will make
certain compensation decisions

 

1

 

with respect to the BLDS
Directors, subject to the approval of LECG, as further described in Section
2.2.

 

1.2          Except for services
performed prior to the effective date of this Agreement by the BLDS Directors
for the Center for Forensic Economic Studies, Ltd. (“CFES”), as
Directors of LECG, each BLDS Director agrees to perform and bill all of his
professional consulting and advisory activities exclusively through LECG for so
long as he is employed by LECG; provided, however, that the exclusive billing
obligation will include billings on projects completed by LECG experts or staff
after such employment is terminated. 
Each BLDS Director will endeavor to develop his own expertise and
professional practice in association with LECG.  Further, it is the parties’ mutual expectation that, to the
extent such expertise is available within LECG, each BLDS Director will use
reasonable efforts on any engagements entered into with any person or entity,
private or governmental, to utilize the services of LECG’s staff to assist on
such engagements.  Where commercially
appropriate for engagements or groups of engagements, this requirement may be
waived by LECG’s President.  Each BLDS
Director will work out of the LECG office in Philadelphia, PA and Wilmington, DE,
and LECG will make available to each BLDS Director the support staff located
there.  BLDS Directors should ask the
Managing Director for support staff to be assigned to engagements.  If a BLDS Director needs the assistance of
LECG support staff located at another LECG office, he may contact the Office
Director for that office or the President of LECG.  To the extent that the staff resources of LECG required for a
particular project are not available, the BLDS Director and LECG will work
together to locate the support staff needed from sources other than LECG.  Prior to accepting a new engagement, each
BLDS Director must comply with both LECG’s standard contracting policy, a copy
of which is attached, and any special provisions contained herein.

 

2.             Compensation

 

2.1          In General. As Directors
of LECG, each BLDS Director will generate as earnings “Director Earnings”
which will consist of up to three (3) elements (with the understanding that no
payment is guaranteed under any element): “Fee Pass-Through Earnings,” “Project
Origination Earnings,” and “Computer Charge Earnings” (as such terms
are defined herein) and from which LECG will deduct the Bonus Pool Hold Back,
business development costs, administrative support costs in excess of the
support cost allowance and amounts billed to clients, and the cost of employee
benefits each BLDS Director elects to receive (on the terms and conditions set
forth below).  The BLDS Directors agree
to pool their Director Earnings and hereby authorize LECG to allocate the Director
Earnings generated by each BLDS Director, less any amounts deducted or held
back from such Director Earnings pursuant to this Agreement, to a group pool
(the “Group Pool”).  The BLDS
Directors will receive as compensation from LECG that portion of the Group Pool
which the Managing Director directs LECG to distribute to each BLDS Director in
accordance with Section 2.2 hereof.

 

2.2          Distributions from Group Pool.  The Managing Director will make all
decisions regarding distributions of earnings from the Group Pool to individual
BLDS Directors.  The Managing Director
may employ any reasonable criteria he or she chooses

 

2

 

to make such decisions;
provided, however, that any decision of the Managing Director regarding
distributions of Group Pool earnings must be ratified in writing by LECG’s
Chairman or President either of whom may, at his sole discretion, direct the
Managing Director to reconsider his or her decision.  Distributions of Group Pool earnings as determined by the
Managing Director and ratified by the appropriate LECG representative, will be
made by LECG to each BLDS Director pursuant to LECG’s standard payroll schedule
and policies.  The BLDS Directors,
individually and collectively, agree to be bound by the decisions of the
Managing Director regarding distributions of earnings from the Group Pool.

 

2.3          Billing Rate. The hourly
billing rate for each BLDS Director will be agreed by the Managing Director and
the President of LECG.  LECG understands
that these hourly rates may change on a case-by-case basis, differ in different
geographic markets, and be modified over time. 
Each BLDS Director agrees, however, to seek approval of any changes or
variations to his individual billing rate with the President or Chairman of
LECG prior to implementing such changes.

 

2.4          Modifications.  LECG reserves the right to
modify its policies on compensation matters, including, but not limited to,
Director Earnings as circumstances may require in the future; provided,
however, that such modifications will not be implemented in a discriminatory
manner which treats the BLDS Directors less favorably than other directors of
LECG.  LECG will advise the BLDS
Directors of any such modifications prior to their implementation.

 

2.5          Fee Pass-Through Earnings

 

2.5.1        Each month, LECG will determine the Fee
Pass-Through Earnings generated by each BLDS Director.  Fee Pass-Through Earnings will consist of
the following:

 

(a)           For engagements brought to LECG
through the BLDS Director’s exclusive efforts or jointly with other experts or
staff in the firm, 80% of the BLDS Director’s billing rate for each hour billed
to clients and collected by LECG;

 

(b)           For engagements brought to the BLDS
Director by LECG experts, consultants or other affiliates where the BLDS
Director will serve as the lead expert, 70% of the BLDS Director’s billing rate
for each hour billed to clients and collected by LECG; provided, however, that
if the “finder(s)” of the engagement, as an inducement to secure the BLDS
Director’s participation, agrees to forego his or her Project Origination
Compensation (as defined below) with respect to the BLDS Director’s billings,
then the BLDS Director will receive 80% of his billing rate for each hour
billed to clients and collected by LECG; and

 

(c)           For engagements the BLDS Director
works on in a staff capacity, or any other capacity other than as the primary
expert, which the BLDS Director does not bring to LECG through his efforts, 60%
of the BLDS Director’s individual billing rate for each hour billed to clients
and collected by LECG.

 

3

 

2.5.2        For purposes of this Agreement, a BLDS
Director serves as an “expert” in connection with an engagement, when the BLDS
Director:

 

(a)           Testifies as an expert in court or in
a deposition;

 

(b)           Issues a report under the BLDS
Director’s name to a court or to a client;

 

(c)           Is the principal author of a
particular work product; or

 

(d)           Is the lead consultant on the
engagement.

 

2.5.3        LECG will apply its standard policies
for Directors concerning write-downs, bad debts and collections.  Copies of LECG’s current Write-down and Bad
Debts Policies are attached hereto as Exhibit A.  LECG reserves the right to amend the
Write-down and Bad Debts Policy from time to time provided, however, that such
amendments will not be implemented in a discriminatory manner which treats the
BLDS Directors less favorably than other directors of LECG.  LECG will advise the BLDS Directors of any
such amendments.

 

2.5.4        The Fee Pass Through Earnings of each
BLDS Director will be allocated by LECG to the Group Pool on the 15th day of
the month immediately following the date on which the amounts due from clients
for the services of the BLDS Director are collected by LECG.

 

2.6          Project Origination Earnings

 

2.6.1        Each BLDS Director will also generate,
in accordance with LECG’s standard policy, Project Origination Earnings.  Project Origination Earnings will consist of
the following:

 

(a)           Fourteen percent (14%) of the total
collected professional LECG staff billings on any engagements the BLDS Director
originates, net of (i) all direct project expenses, (ii) the BLDS Director’s
own professional fees (if any), and (iii) the fees of Directors, Principals and
Affiliates of LECG working on the engagement. 
For example, on an engagement originated by a BLDS Director in which
$500,000 is collected by LECG and which includes (i) $50,000 in travel,
telephone, copying and other expenses, (ii) $25,000 of the BLDS Director’s
personal professional fees, and (iii) $25,000 of professional fees from another
LECG director, the BLDS Director originating the engagement would generate
Project Origination Earnings of $56,000 ($400,000 x .14).

 

(b)           For engagements in which the BLDS
Director is the finder or co-finder of the engagement and a LECG  principal acts in any capacity other than
the expert, finder or co-finder in connection with the engagement, 14% of that
LECG principal’s total billings for the engagement which are collected by
LECG.  For example, on an engagement
originated by a BLDS Director in which a principal serves as a senior economist
and receives 30% of his or her total billings of $100,000 (i.e., the principal

 

4

 

receives $30,000), the BLDS
Director would generate $14,000 as Project Origination Earnings ($100,000 x
..14).

 

(c)           For engagements in which the BLDS
Director is the finder or co-finder of the engagement but another LECG director
or affiliate acts in any capacity in connection with the engagement and
receives less than his or her highest fee pass through rate, up to a maximum of
10% of that LECG director’s or affiliate’s total billings for the engagement
which are collected by LECG.  For
example, on an engagement a BLDS Director originates in which another LECG
Director serves as an expert who reduces his or her fee pass through rate from
80% to 70% of his or her total billings of $100,000 (i.e., the Director
receives $70,000), the BLDS Director would generate $10,000 as Project
Origination Earnings ($100,000 x .10).

 

2.6.2        For engagements originated by a BLDS
Director in combination with other LECG personnel or affiliates, the
origination fee percentage used to calculate each originating parties’ Project
Origination Fees will be divided appropriately among the individuals
involved.  BLDS Directors are encouraged
to reach their own agreements regarding the apportioning of origination credit
with other, LECG professional staff involved in originating an engagement.  The Chairman or President of LECG will
resolve any disputes concerning the apportioning of origination credit.

 

2.6.3        Project Origination Earnings will not
accrue on the billings of any co-finder for another co-finder.

 

2.6.4        The Project Origination Earnings of each
BLDS Director will be allocated by LECG to the Group Pool in accordance with
the following schedule:

 

(a)           For receipts in January, February and
March, on April 15th;

 

(b)           For receipts in April and May, on
June 15th;

 

(c)           For receipts in June, July and
August, on September 15th; and

 

(d)           For receipts in September, October,
November and December, on January 15th.

 

2.7          Computer Charge Earnings.  For engagements a BLDS Director originates,
the BLDS Director will generate earnings in the amount of 10% of the net
computer usage charges billed to clients for processing data which are
collected by LECG.  Such net computer
usage charges will be equal to the aggregate amount charged to BLDS clients
reduced by the actual cost to LECG for the provision of such computer
services.  All net computer usage charge
earnings under this Section 2.7 will be allocated to the Group Pool concurrently
with Fee Pass Through Earnings.

 

2.8          Monthly and Quarterly Accounting.  Within fifteen (15) days after the end of
month, LECG will issue a report to each of the BLDS Directors that details the
Fee Pass-Through Earnings and Computer Charge Earnings for the prior month.  Within

 

5

 

fifteen (15) days after the
end of each fiscal quarter, LECG will issue a report to each of the BLDS
Directors that details Project Origination Earnings.  (Each of these reports is hereinafter referred to as an “Earnings
Accounting.”)  If the BLDS Directors
disagree with an Earnings Accounting, then the Managing Director will issue a
written statement to LECG’s Chief Financial Officer that describes the nature
of the disagreement.  LECG’s Chief
Financial Officer and the Managing Director will attempt, in good faith, to
resolve the disagreement.  If the
disagreement cannot be resolved to the reasonable satisfaction of LECG and the
BLDS Directors within thirty (30) days from the date of the Earnings
Accounting, then the Managing Director and LECG’s Chief Financial Officer will
jointly designate an independent accountant to review the Earnings
Accounting.  Such review must be
completed within ten (10) business days and must be accomplished in a manner
designed to avoid disruption of LECG’s accounting function.  The expenses of the independent accountant
and the cost of the review of the Earnings Accounting will be paid by the BLDS
Directors; provided, however, that if the independent accountant identifies a
material adjustment to the Earnings Accounting in the favor of the BLDS
Directors, then the expenses of the accountant and the cost of the review will
be paid by LECG.

 

3.             Bonus Hold Back Pool.  Pursuant to LECG policy, which is subject to
change from time to time, five (5%) percent of the Director Earnings generated
by each BLDS Director will be held back by LECG in connection with the
operation of LECG.  This 5% will be
placed in a “Bonus Hold Back Pool.” 
The Bonus Hold Back Pool deduction from each BLDS Director’s Earnings is
subject to a maximum limit of $50,000 per year.   The Bonus Hold Back Pool may be used to pay discretionary
bonuses to LECG staff (other than Principals and Directors), or defray other
operational expenses of LECG. 
Distributions from the Bonus Hold Back Pool are contingent upon (i) LECG
staffs’ discretionary bonus pool being adequate to pay, based on LECG’s
determination, competitive and fair bonuses to its staff, and (ii) LECG’s
attainment of its profit goals. If the funds in the Bonus Hold Back Pool are
not needed for these purposes the amounts withheld from each BLDS Director’s
Earnings will be allocated to the Group Pool. 
However, as there is no guarantee that these contingencies will
materialize, there is no guarantee that each BLDS Director’s share of the Bonus
Hold Back Pool will be allocated to the Group Pool.  Any amounts allocated to the Group Pool from the Bonus Hold Back
Pool will be allocated within fifteen days of LECG’s Board of Director’s
approval.  Notwithstanding the
foregoing, LECG’s policy regarding the Bonus Hold Back Pool will not be changed
in a manner that treats the BLDS Directors less favorably that LECG’s other
directors.

 

4.             Employee
Benefits

 

4.1          Participation.  BLDS Directors will be entitled to
participate in standard LECG benefits afforded all employees.  Each of these benefits is subject to
revision from time to time, with respect to the benefit level, or whether a
particular benefit continues to be offered. 
To the extent a BLDS Director elects to participate in these benefits,
the BLDS Director would be subject to the same revisions and restrictions as
other LECG employees.

 

6

 

4.2          Insurance.  BLDS Directors may elect to receive LECG
group health insurance, vision, dental, and prescription coverage.  Additional dependent coverage can be
purchased by BLDS Directors through the plan. 
Currently a life and accidental death and dismemberment insurance policy
and a long-term disability plan are mandatory for all employees.  Accordingly, these will be provided to the
BLDS Directors and paid for by LECG for as long as such coverage remains
mandatory.  Supplemental life insurance
is also available at each BLDS Director’s own expense.  Health benefits coverage will begin on the
first day of the first full month following the BLDS Director’s employment
commencement date, provided the BLDS Director enrolls within 25 days of such
hire date.  Delay in completing
enrollment forms could delay entry into the plans until the next open
enrollment period.  Open enrollment
periods are held once per year.

 

4.3          Financial.  LECG also offers participation for employees
in both a 401(k) Plan and a Section 125 Flexible Spending Plan.  LECG will use commercially reasonable
efforts to transition funds held by CFES in healthcare reimbursement accounts
to the appropriate LECG plan.

 

4.4          Payment for Benefits.  The cost of benefits, including FICA and
Medicare taxes, will be deducted from each BLDS Director’s Director Earnings
quarterly.

 

5.             Business
Development.

 

As
Directors of LECG, the BLDS Directors are expected to generate substantial
business based on their reputations, contacts, prior affiliations and direct
business development efforts.  To the
extent BLDS Directors require the resources of LECG to assist with business
development, LECG will provide such resources; however, the cost of such
resources will be deducted from the BLDS Directors’ Director Earnings at least
once per year, and may be deducted more frequently (e.g., quarterly), at LECG’s
sole discretion.  In general, very
limited corporate business development investment will be made in the BLDS
Directors’ practice area.  However, LECG
will consider making available up to $20,000 to the BLDS Directors to support a
one-time joint marketing and public relations effort with respect to the
transition of the BLDS Directors from CFES to LECG.  BLDS Directors should obtain the approval of the local office
directors or their designees prior to asking LECG staff to perform business
development work.  The costs of such
staff’s services will be charged back to the applicable BLDS Director at 40% of
the staff member’s billing rate as a proxy for cost.  Expenses such as travel and photocopying will also be charged to
the BLDS Directors at cost.

 

6.             Administrative
Support

 

6.1          Furniture and Equipment.  LECG will provide the BLDS Directors with
office space and appropriate furniture and equipment.  LECG will provide its standard computer equipment which shall
include either a desktop computer or laptop computer and docking station.  LECG will consider requests from a BLDS
Director for additional furniture or equipment that exceed LECG standards, as
long as the equipment is compatible with the existing infrastructure.  In the event such a request is approved, the

 

7

 

difference in cost between
what LECG would provide ordinarily and the actual cost will be passed on to the
BLDS Director that made the request.

 

6.2          Administrative Support.

 

6.2.1        LECG will provide administrative support
for the BLDS Directors at LECG’s expense. 
BLDS Directors will be responsible only for the cost of Executive Assistants
to the extent such cost exceeds the billable value of all work such Executive
Assistants perform.

 

6.2.2        At the request of a BLDS Director, LECG
will hire an Executive Assistant for the BLDS Director at an agreed upon
salary, or arrange shared administrative support among several LECG
professionals.  In the former instance,
any cash costs associated with such employment (including, but not limited to,
benefits and severance payments) in excess of amounts billed and collected on
cases in which the Executive Assistant might work, will be borne solely by the
BLDS Director utilizing such services. 
In the latter case, the BLDS Director will be billed for his pro rata
share based on agreement in advance between LECG, the BLDS Director and the
other party(s) sharing responsibility for the Executive Assistant.  Such amounts, if any, shall be calculated at
the end of the year and deducted from the BLDS Directors Director Earnings over
the next year on a quarterly schedule, as described more fully in LECG’s Executive
Assistant Charge-Back Policy, attached hereto as Exhibit B.

 

7.             Confidentiality

 

7.1          Proprietary Information.  Each BLDS Director agrees that during and
after his employment with LECG, all documents and information in whatever form
(e.g., hard copy, microfilm, microfiche, computer and electronic files),
prepared by him, or obtained from any client, any employee or any other
affiliate or independent contractor of LECG in connection with the operations
of LECG or the services provided under this Agreement (the “Proprietary
Information”), are, and shall be kept, strictly confidential.  All Proprietary Information belonging to
LECG and/or any of its clients shall remain the property of LECG or the client,
respectively.  Upon the Termination
Date, each BLDS Director will immediately discontinue use of Proprietary
Information and will not remove any Proprietary Information from LECG’s offices
or from any other place where the Proprietary Information is located unless the
President of LECG has received a written request from a client for whom LECG
has rendered consulting services that the client’s Proprietary Information,
specifically identified, be transferred to such BLDS Director or any other
person or entity.  Upon receipt of such
a client request, LECG will release as soon as practicable the relevant client
Proprietary Information as directed by the client.  BLDS Directors further agree that in the event their employment
with LECG is terminated, each BLDS Director will assist LECG in obtaining
payment of any outstanding balances owed to LECG by any clients requesting the
transfer of its Proprietary Information.

 

7.2          Definition of “Client.”  For purposes of this Section
7, “client” means any person or entity who, at the time of the termination of a
BLDS Director’s relationship

 

8

 

with LECG, (i) has LECG
under retainer, (ii) has received a written proposal and is actively
considering retaining or otherwise engaging LECG on a project or matter, or
(iii) has LECG working on a matter or project without a formal retainer
arrangement.  A “client” does not
mean a person or entity (i) who has rejected a proposal from LECG to work on a
particular matter or project, (ii) for whom LECG has refused to do work for, or
(iii) with respect to whom LECG has a conflict of interest that precludes LECG
from accepting a project for such person or entity.

 

8.             Term.

 

Each BLDS Director’s
employment with LECG is based upon mutual consent and, accordingly, either the
BLDS Director or LECG may terminate such employment and this Agreement at any
time, with or without cause (the effective date of any such termination to be
referred to as the “Termination Date”). 
If a BLDS Director decides to terminate his employment with LECG, such
BLDS Director will provide LECG with thirty (30) days prior written notice
addressed to the Chairman of the Board of LECG Holding Company, LLC.  In the event a BLDS Director’s employment is
terminated for any reason (i) the terminated BLDS Director agrees not to state
on any marketing material or curriculum vitae that he is still an employee of
LECG; and (ii) the BLDS Director will be paid all Director Earnings in
accordance with this Agreement based on work done during his employment with
LECG but collected after the employment terminates.

 

9.             Miscellaneous
Provisions

 

9.1          Independence of Work.  BLDS Directors will be responsible for all
services they provide to clients and all opinions and reports which the BLDS
Directors issue will be theirs and not the opinions or reports of LECG.  Without limiting the foregoing, the BLDS
Directors will be additional insureds under LECG’s insurance policies and will
be entitled to indemnification by LECG to the fullest extent permitted by
LECG’s governing documents and applicable law.

 

9.2          LECG Policies.  BLDS Directors agree that they will abide by
all policies of LECG, as may be amended from time to time, relating to the
performing of services on matters by LECG. 
LECG reserves the right to change its policies, including those discussed
in this Agreement, as business conditions warrant; provided that any such
changes are implemented in a non-discriminatory manner that does not treat the
BLDS Directors any less favorably than other LECG directors.  Any such changes in policy will be
communicated to BLDS Directors upon their implementation.

 

9.3          Conflicts of Interest.  Prior to executing this Agreement, the BLDS
Directors acknowledge that they have advised LECG of all matters that they are
presently working on so that LECG can determine if any such matters create a
conflict with any other matters on which LECG is providing services.  A list of these matters is attached to this
Agreement as Exhibit C.  In order
to avoid potential conflicts with work performed by others associated with
LECG, BLDS Directors agree that in the future they will follow

 

9

 

LECG’s conflicts policy and
procedures with respect to all matters on which they intend to become engaged.

 

9.4          Entire Agreement.  This Agreement, together with the Asset
Purchase Agreement and the Director Practice Purchase Agreement, supersedes all
previous and contemporaneous oral negotiations, writings and understandings
between the parties concerning the subject matter of this Agreement (including,
without limitation, that certain Term Sheet dated July 15, 2003), and this Agreement
constitutes the entire agreement between LECG and the BLDS Directors.

 

[Signatures follow on the next page]

 

10

 

IN
WITNESS WHEREOF, LECG and the BLDS Directors have executed this Agreement on
the date first above written.

 

LECG, LLC,

a California limited liability company

 

	
  By:

  	
  LECG Holding Company, LLC

  
	
  Its:

  	
  Sole Member and Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  David P. Kaplan

  	
   

  
	
   

  	
  Its:

  	
  President

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
  8/22/03

  	
   

  	
  /s/ Bernard R. Siskin

  	
   

  
	
   

  	
  Dr. Bernard R. Siskin

  
	
   

  	
   

  
	
  Residence Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
  8/22/03

  	
   

  	
  /s/ Leonard A. Cupingood

  	
   

  
	
   

  	
   

  	
   

  	
  Dr. Leonard A. Cupingood

  
	
   

  	
   

  	
   

  	
   

  
	
  Residence Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
  8/22/03

  	
   

  	
  /s/  David W. Griffin

  	
   

  
	
   

  	
   

  	
   

  	
  Dr. David W. Griffin

  
	
   

  	
   

  	
   

  	
   

  
	
  Residence Address:

  	
   

  
	
  [Illegible]

  	
   

  	
   

  
	
  [Illegible]

  	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
  8/22/03

  	
   

  	
  /s/ Samuel J. Kursh

  	
   

  
	
   

  	
   

  	
   

  	
  Dr. Samuel J. Kursh

  
	
   

  	
   

  	
   

  	
   

  
	
  Residence Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
									

 

Signature
Page to Director Service Agreement

 

 

 

Exhibit A

 

LECG Write Down and Bad Debts Policies

 

 

 

Exhibit B

 

LECG Executive Assistant Charge-Back Policy

 

 

 

Exhibit C

 

Conflicts Matters List

 

 

 

EXHIBIT F

 

FINANCIAL STATEMENTS

 

 

THE
CENTER FOR FORENSIC ECONOMIC STUDIES, LTD.

 

FINANCIAL
STATEMENT

 

*
* *

 

MARCH
31, 2000

 

 

	
  

  	
  ZELNICK,
  MANN AND WINIKUR, P.C.

  

  CERTIFIED PUBLIC ACCOUNTANTS

  Suite 120

  10 North Presidential Boulevard

  Bala Cynwyd, PA 19004-1107

  	
  Members
  of:

  American Institute of 

  Certified Public Accountants

  

  Pennsylvania Institute of

  Certified Public Accountants

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (610)
  664-0450

  
	
   

  	
   

  	
  FAX:
  (610) 664-0955

  
	
   

  	
   

  	
  1-800-550-6028

  
	
   

  	
   

  	
  www.zmwcpa.com

  

 

 

The Board of Directors and Stockholders

The Center For Forensic Economic Studies,
Ltd.

Philadelphia, Pennsylvania

 

 

We have compiled the accompanying statement
of assets, liabilities and equity-cash basis of The Center For Forensic
Economic Studies, Ltd. (a corporation) as of March 31, 2000 and the related
statements of revenues and expenses-cash basis and supplementary information
for the year then ended, in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of Certified
Public Accountants.

 

A compilation is limited to presenting in the
form of financial statements information that is the representation of
management.  We have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any other form of assurance on them.  However, we did become aware of a departure from the cash basis
of accounting that is described in the following paragraph.

 

As disclosed in Note 2 to the financial
statements, the capitalization of property, plant and equipment and the
recording of depreciation over the estimated useful live of such assets is a
generally accepted modification of the cash basis of accounting.

 

	
   

  	
  /s/ Zelnick, Mann and Winikur

  	
   

  
	
   

  	
  ZELNICK, MANN AND WINIKUR,
  P.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
  September 18, 2000

  	
   

  

 

 

THE
CENTER FOR FORENSIC ECONOMIC STUDIES, LTD.

STATEMENT
OF ASSETS, LIABILITIES AND

STOCKHOLDERS’
EQUITY CASH BASIS

MARCH
31, 2000

 

 

	
  ASSETS

  	
   

  	
   

  	
   

  
	
  CURRENT ASSETS

  	
   

  	
   

  	
   

  
	
  Cash

  	
   

  	
  $

  	
  20,636

  	
   

  
	
  Loan receivable, officers

  	
   

  	
  47,481

  	
   

  
	
  Common stock subscription

  	
   

  	
  1,000

  	
   

  
	
  Prepaid expenses

  	
   

  	
  2,550

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total current assets

  	
   

  	
  71,667

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PROPERTY AND EQUIPMENT

  	
   

  	
   

  	
   

  
	
  Equipment, other

  	
   

  	
  28,266

  	
   

  
	
  Leasehold improvements

  	
   

  	
  38,510

  	
   

  
	
  Computer equipment

  	
   

  	
  257,996

  	
   

  
	
  Furniture and fixtures

  	
   

  	
  123,725

  	
   

  
	
  Automobile

  	
   

  	
  32,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  480,997

  	
   

  
	
  Less accumulated depreciation

  	
   

  	
  420,595

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  60,402

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  OTHER ASSETS

  	
   

  	
   

  	
   

  
	
  Cash value of life insurance

  	
   

  	
  990,537

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total assets

  	
   

  	
  $

  	
  1,122,606

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  LIABILITIES AND
  STOCKHOLDERS’ DEFICIT

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CURRENT LIABILITIES

  	
   

  	
   

  	
   

  
	
  Notes payable

  	
   

  	
  $

  	
  990,537

  	
   

  
	
  Accrued and withheld payroll and sales taxes

  	
   

  	
  16,378

  	
   

  
	
  Accrued profit sharing

  	
   

  	
  200,677

  	
   

  
	
  Exchange

  	
   

  	
  26,053

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total current liabilities

  	
   

  	
  1,233,645

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  STOCKHOLDERS’ DEFICIT

  	
   

  	
   

  	
   

  
	
  Common stock, $10 par value, 100 shares authorized, issued and
  outstanding

  	
   

  	
  1,000

  	
   

  
	
  Accumulated deficiency of revenues over expenses

  	
   

  	
  (112,039

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Total stockholders’ deficit

  	
   

  	
  (111,039

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Total liabilities and stockholders’ deficit

  	
   

  	
  $

  	
  1,122,606

  	
   

  

 

See
accompanying notes and accountants’ report.

 

2

 

THE
CENTER FOR FORENSIC ECONOMIC STUDIES, LTD.

STATEMENT
OF ACCUMULATED EXCESS OF REVENUE

OVER
EXPENSES - CASH BASIS

YEAR
ENDED MARCH 31, 2000

 

	
  Accumulated deficit — beginning of period

  	
   

  	
  $

  	
  (122,856

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Excess of expenses over revenues

  	
   

  	
  10,817

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accumulated deficit — end of period

  	
   

  	
  $

  	
  (112,039

  	
  )

  

 

See
accompanying notes and accountants’ report.

 

3

 

THE
CENTER FOR FORENSIC ECONOMIC STUDIES, LTD.

STATEMENT
OF REVENUES AND EXPENSES

CASH
BASIS

YEAR
ENDED MARCH 31, 2000

 

 

	
  Revenues

  	
   

  	
   

  	
   

  
	
  Fees

  	
   

  	
  $

  	
  7,118,206

  	
   

  
	
  Other income

  	
   

  	
  33

  	
   

  
	
  Interest income

  	
   

  	
  15,660

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total revenue

  	
   

  	
  7,133,899

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Operating expenses

  	
   

  	
  3,449,541

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Excess of revenues over expenses before non-cash charge, officers’
  salaries, and profit sharing contribution

  	
   

  	
  3,684,358

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Non-cash charge:

  	
   

  	
   

  	
   

  
	
  Depreciation

  	
   

  	
  44,239

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Excess of revenues over expenses before officers’ salaries and profit
  sharing contribution

  	
   

  	
  3,640,119

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Officers’ salaries

  	
   

  	
  3,428,625

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Excess of revenues over expenses before profit sharing contribution

  	
   

  	
  211,494

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Provision for profit sharing

  	
   

  	
  200,677

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Excess of expenses over revenues

  	
   

  	
  $

  	
  10,817

  	
   

  

 

See
accompanying notes and accountants’ report.

 

4

 

THE
CENTER FOR FORENSIC ECONOMIC STUDIES, LTD.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2000

 

NOTE 1.         NATURE OF BUSINESS

 

The
Center For Forensic Economic Studies, Ltd. provides litigation support services
to law firms and their clients in the areas of economic and statistical
analysis, valuations and damages.

 

NOTE 2.         SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

 

Basis
of Accounting - The Company’s policy is the prepare its financial statements on
the cash basis of accounting; certain revenues are recognized when received
rather than when earned, and certain expenses are recognized when cash is
disbursed rather than when the obligation is incurred.

 

Property
and Equipment - The cost of property and equipment is depreciated over the
estimated useful lives of the related assets. 
Leasehold improvements are amortized over the lesser of the term of the
related lease or the estimated useful lives of the assets.  Depreciation is computed on the accelerated
method.  The useful lives of property
and equipment for purposes of computing depreciation are:

 

	
  Computer equipment

  	
   

  	
  5
  years

  
	
  Furniture and fixtures

  	
   

  	
  5
  — 7 years

  
	
  Equipment, other

  	
   

  	
  7
  years

  
	
  Leasehold improvements

  	
   

  	
  7
  years

  

 

NOTE 3.         CASH SURRENDER VALUE, LIFE INSURANCE

 

The
Company has a security interest in certain life insurance policies for cash
advances made in connection with a collateral assignment split-dollar life
insurance plan provided to certain key employees of the company.  An assignment of the company’s security
interest in the policies has been made for the purpose of providing security
for indebtedness incurred by the company to facilitate implementation of the
split-dollar plan without utilizing working capital needed for other business
purposes.

 

5

 

SUPPLEMENTARY INFORMATION

 

 

THE CENTER FOR FORENSIC ECONOMIC STUDIES, LTD.

SCHEDULE OF OPERATING EXPENSES - CASH BASIS

YEAR ENDED MARCH 31, 2000

 

	
  OPERATING EXPENSES

  	
   

  	
   

  	
   

  
	
  Accounting

  	
   

  	
  $

  	
  5,360

  	
   

  
	
  Advertising and promotion

  	
   

  	
  179,179

  	
   

  
	
  Automobile expense

  	
   

  	
  86,720

  	
   

  
	
  Commissions

  	
   

  	
  9,250

  	
   

  
	
  Computer expense

  	
   

  	
  10,600

  	
   

  
	
  Courier service

  	
   

  	
  17,248

  	
   

  
	
  Employee benefits

  	
   

  	
  151,058

  	
   

  
	
  Employee search

  	
   

  	
  3,087

  	
   

  
	
  Entertainment

  	
   

  	
  20,311

  	
   

  
	
  Equipment rental

  	
   

  	
  22,154

  	
   

  
	
  Insurance, general

  	
   

  	
  18,010

  	
   

  
	
  Interest

  	
   

  	
  125,983

  	
   

  
	
  Legal

  	
   

  	
  6,557

  	
   

  
	
  Office expense

  	
   

  	
  62,640

  	
   

  
	
  Outside data processing

  	
   

  	
  598,183

  	
   

  
	
  Payroll service

  	
   

  	
  2,289

  	
   

  
	
  Pension and administrative expense

  	
   

  	
  19,237

  	
   

  
	
  Postage, stationery and printing

  	
   

  	
  11,402

  	
   

  
	
  Professional dues and affiliations

  	
   

  	
  3,502

  	
   

  
	
  Referral fees

  	
   

  	
  325

  	
   

  
	
  Rent

  	
   

  	
  264,157

  	
   

  
	
  Repairs and maintenance

  	
   

  	
  4,445

  	
   

  
	
  Research and publications

  	
   

  	
  44,832

  	
   

  
	
  Research, computer access

  	
   

  	
  8,864

  	
   

  
	
  Salaries, clerical

  	
   

  	
  388,704

  	
   

  
	
  Salaries, staff

  	
   

  	
  945,714

  	
   

  
	
  Seminars

  	
   

  	
  7,537

  	
   

  
	
  Storage

  	
   

  	
  3,948

  	
   

  
	
  Taxes, other

  	
   

  	
  23,476

  	
   

  
	
  Taxes, payroll

  	
   

  	
  172,109

  	
   

  
	
  Telephone

  	
   

  	
  61,674

  	
   

  
	
  Travel and lodging

  	
   

  	
  157,894

  	
   

  
	
  Vending machine expense

  	
   

  	
  (36

  	
  )

  
	
  Utilities

  	
   

  	
  13,128

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total operating expenses

  	
   

  	
  $

  	
  3,449,541

  	
   

  

 

6

 

THE CENTER FOR FORENSIC

ECONOMIC STUDIES, LTD.

 

FINANCIAL STATEMENT

 

* * *

 

MARCH 31, 2001

 

 

	
  

  	
  ZELNICK,
  MANN AND WINIKUR, P.C.

  	
  Members
  of:

  
	
  CERTIFIED
  PUBLIC ACCOUNTANTS

  	
  American
  Institute of

  
	
  Suite
  120

  	
  Certified
  Public Accountants

  
	
  10
  North Presidential Boulevard

  	
   

  
	
  Bala
  Cynwyd, PA 19004-1107

  	
  Pennsylvania
  Institute of

  
	
   

  	
  Certified
  Public Accountants

  
	
   

  	
   

  
	
   

  	
  (610)
  664-0450

  
	
   

  	
  FAX:
  (610) 664-0955

  
	
   

  	
  1-800-550-6028

  
	
   

  	
   

  	
  www.ZMWCPA.com

  

 

The Board of Directors and
Stockholders

The Center For Forensic Economic Studies, Ltd.

Philadelphia, Pennsylvania

 

 

We have compiled the
accompanying statement of assets, liabilities and equity-cash basis of The
Center For Forensic Economic Studies, Ltd. (a corporation) as of March 31, 2001
and the related statements of revenues and expenses-cash basis and
supplementary information for the year then ended, in accordance with
Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants.

 

A compilation is limited to
presenting in the form of financial statements information that is the
representation of management.  We have
not audited or reviewed the accompanying financial statements and, accordingly,
do not express an opinion or any other form of assurance on them.  However, we did become aware of a departure
from the cash basis of accounting that is described in the following paragraph.

 

As disclosed in Note 2 to
the financial statements, the capitalization of property, plant and equipment
and the recording of depreciation over the estimated useful live of such assets
is a generally accepted modification of the cash basis of accounting.

 

 

	
   

  	
           /s/
  Zelnick, Mann and Winikur

  
	
   

  	
  ZELNICK, MANN AND WINIKUR,
  P.C.

  

 

 

July 31, 2001

 

 

 

THE CENTER FOR FORENSIC ECONOMIC STUDIES, LTD.

STATEMENT OF ASSETS, LIABILITIES AND

STOCKHOLDERS’ EQUITY CASH BASIS

MARCH 31, 2001

 

	
  ASSETS

  	
   

  	
   

  	
   

  
	
  CURRENT ASSETS

  	
   

  	
   

  	
   

  
	
  Loan receivable, officers

  	
   

  	
  $

  	
  4,794

  	
   

  
	
  Common stock subscription

  	
   

  	
  1,000

  	
   

  
	
  Prepaid expenses

  	
   

  	
  6,834

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total current assets

  	
   

  	
  12,628

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PROPERTY AND EQUIPMENT

  	
   

  	
   

  	
   

  
	
  Equipment, other

  	
   

  	
  29,018

  	
   

  
	
  Leasehold improvements

  	
   

  	
  48,816

  	
   

  
	
  Computer equipment

  	
   

  	
  272,135

  	
   

  
	
  Furniture and fixtures

  	
   

  	
  128,509

  	
   

  
	
  Automobile

  	
   

  	
  32,500

  	
   

  
	
  Real estate

  	
   

  	
  125,437

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  636,415

  	
   

  
	
  Less accumulated depreciation

  	
   

  	
  440,690

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  195,725

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  OTHER ASSETS

  	
   

  	
   

  	
   

  
	
  Cash value of life insurance

  	
   

  	
  990,537

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total assets

  	
   

  	
  $

  	
  1,198,890

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  LIABILITIES AND
  STOCKHOLDERS’ DEFICIT

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CURRENT LIABILITIES

  	
   

  	
   

  	
   

  
	
  Cash overdraft

  	
   

  	
  $

  	
  5,870

  	
   

  
	
  Notes payable

  	
   

  	
  1,120,537

  	
   

  
	
  Accrued profit sharing

  	
   

  	
  228,925

  	
   

  
	
  Exchange

  	
   

  	
  26,053

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total current liabilities

  	
   

  	
  1,381,385

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  STOCKHOLDERS’ DEFICIT

  	
   

  	
   

  	
   

  
	
  Common stock, $10 par value, 100 shares authorized, issued and
  outstanding

  	
   

  	
  1,000

  	
   

  
	
  Accumulated deficiency of revenues over expenses

  	
   

  	
  (183,495

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Total stockholders’ deficit

  	
   

  	
  (182,495

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Total liabilities and stockholders’ deficit

  	
   

  	
  $

  	
  1,198,890

  	
   

  

 

See accompanying notes and accountants’ report.

 

2

 

THE CENTER FOR FORENSIC ECONOMIC STUDIES, LTD.

STATEMENT OF ACCUMULATED EXCESS OF REVENUE

OVER EXPENSES - CASH BASIS

YEAR ENDED MARCH 31, 2001

 

	
  Accumulated deficit — beginning of period

  	
   

  	
  $

  	
  (112,039

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Excess of expenses over revenues

  	
   

  	
  (71,456

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Accumulated deficit — end of period

  	
   

  	
  $

  	
  (183,495

  	
  )

  

 

 

See accompanying notes and accountants’ report.

 

3

 

THE CENTER FOR FORENSIC ECONOMIC STUDIES, LTD.

STATEMENT OF REVENUES AND EXPENSES

CASH BASIS

YEAR ENDED MARCH 31, 2001

 

	
  Revenues

  	
   

  	
   

  	
   

  
	
  Fees

  	
   

  	
  $

  	
  7,287,938

  	
   

  
	
  Other income

  	
   

  	
  33

  	
   

  
	
  Interest income

  	
   

  	
  28,659

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total revenue

  	
   

  	
  7,316,630

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Operating expenses

  	
   

  	
  3,624,516

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Excess of revenues over expenses before non-cash charge, officers’
  salaries, and profit sharing contribution

  	
   

  	
  3,692,114

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Non-cash charge:

  	
   

  	
   

  	
   

  
	
  Depreciation

  	
   

  	
  20,095

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Excess of revenues over expenses before officers’ salaries and profit
  sharing contribution

  	
   

  	
  3,672,019

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Officers’ salaries

  	
   

  	
  3,514,550

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Excess of revenues over expenses before profit sharing contribution

  	
   

  	
  157,469

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Provision for profit sharing

  	
   

  	
  228,925

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Excess of expenses over revenues

  	
   

  	
  $

  	
  (71,456

  	
  )

  

 

 

See accompanying notes and accountants’ report.

 

4

 

THE CENTER FOR FORENSIC ECONOMIC STUDIES, LTD.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2001

 

NOTE 1.         NATURE OF BUSINESS

 

The
Center For Forensic Economic Studies, Ltd. provides litigation support services
to law firms and their clients in the areas of economic and statistical
analysis, valuations and damages.

 

NOTE 2.         SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

 

Basis
of Accounting - The Company’s policy is the prepare its financial statements on
the cash basis of accounting; certain revenues are recognized when received
rather than when earned, and certain expenses are recognized when cash is
disbursed rather than when the obligation is incurred.

 

Property
and Equipment - The cost of property and equipment is depreciated over the
estimated useful lives of the related assets. 
Leasehold improvements are amortized over the lesser of the term of the
related lease or the estimated useful lives of the assets.  Depreciation is computed on the accelerated
method.  The useful lives of property
and equipment for purposes of computing depreciation are:

 

	
  Computer equipment

  	
   

  	
  5
  years

  
	
  Furniture and fixtures

  	
   

  	
  5
  — 7 years

  
	
  Equipment, other

  	
   

  	
  7
  years

  
	
  Leasehold improvements

  	
   

  	
  7
  years

  

 

NOTE 3.         CASH SURRENDER VALUE, LIFE INSURANCE

 

The
Company has a security interest in certain life insurance policies for cash advances
made in connection with the collateral assignment of a reverse split-dollar
life insurance plan provided to certain key employees of the company.  An assignment of the company’s security
interest in the policies has been made for the purpose of providing security
for indebtedness incurred by the company to facilitate implementation of the
split-dollar plan without utilizing working capital needed for other business
purposes.

 

NOTE 4.         NOTES PAYABLE

 

Notes
payable consist of the following:

 

	
  Line of credit to bank; due June 30, 2002; payable in monthly
  installments of $1,011; applied to interest only at 8.0%

  	
   

  	
  $

  	
  130,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Interest-bearing recourse loan secured by the collateral assignment
  of a reverse split-dollar life insurance plan; maturity date of May 23, 2014;
  interest only at 12.72%

  	
   

  	
  990,537

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
  1,120,537

  	
   

  

 

5

 

SUPPLEMENTARY
INFORMATION

 

 

THE
CENTER FOR FORENSIC ECONOMIC STUDIES, LTD.

SCHEDULE OF OPERATING EXPENSES - CASH BASIS

YEAR ENDED MARCH 31, 2001

 

	
  OPERATING EXPENSES

  	
   

  	
   

  	
   

  
	
  Accounting

  	
   

  	
  $

  	
  6,540

  	
   

  
	
  Advertising and promotion

  	
   

  	
  147,790

  	
   

  
	
  Automobile expense

  	
   

  	
  92,129

  	
   

  
	
  Commissions

  	
   

  	
  10,692

  	
   

  
	
  Computer expense

  	
   

  	
  8,501

  	
   

  
	
  Courier service

  	
   

  	
  17,592

  	
   

  
	
  Employee benefits

  	
   

  	
  208,176

  	
   

  
	
  Employee search

  	
   

  	
  3,316

  	
   

  
	
  Entertainment

  	
   

  	
  16,016

  	
   

  
	
  Equipment rental

  	
   

  	
  23,835

  	
   

  
	
  Insurance, general

  	
   

  	
  20,582

  	
   

  
	
  Interest

  	
   

  	
  124,507

  	
   

  
	
  Legal

  	
   

  	
  62,922

  	
   

  
	
  Office expense

  	
   

  	
  63,208

  	
   

  
	
  Outside data processing

  	
   

  	
  625,174

  	
   

  
	
  Payroll service

  	
   

  	
  2,912

  	
   

  
	
  Pension and administrative expense

  	
   

  	
  19,149

  	
   

  
	
  Postage, stationery and printing

  	
   

  	
  9,543

  	
   

  
	
  Professional dues and affiliations

  	
   

  	
  7,779

  	
   

  
	
  Rent

  	
   

  	
  274,474

  	
   

  
	
  Repairs and maintenance

  	
   

  	
  5,867

  	
   

  
	
  Research and publications

  	
   

  	
  32,137

  	
   

  
	
  Research, computer access

  	
   

  	
  16,007

  	
   

  
	
  Salaries, clerical

  	
   

  	
  424,114

  	
   

  
	
  Salaries, staff

  	
   

  	
  948,093

  	
   

  
	
  Seminars

  	
   

  	
  19,826

  	
   

  
	
  Storage

  	
   

  	
  4,267

  	
   

  
	
  Taxes, other

  	
   

  	
  36,096

  	
   

  
	
  Taxes, payroll

  	
   

  	
  183,019

  	
   

  
	
  Telephone

  	
   

  	
  40,216

  	
   

  
	
  Travel and lodging

  	
   

  	
  158,018

  	
   

  
	
  Vending machine expense

  	
   

  	
  124

  	
   

  
	
  Utilities

  	
   

  	
  11,895

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total operating expenses

  	
   

  	
  $

  	
  3,624,516

  	
   

  

 

6

 

THE
CENTER FOR FORENSIC

ECONOMIC STUDIES, LTD.

 

FINANCIAL
STATEMENT

 

*
* *

 

DECEMBER
31, 2002

 

 

	
  

  	
  ZELNICK,
  MANN AND WINIKUR, P.C.

  	
  Members
  of:

  
	
  CERTIFIED
  PUBLIC ACCOUNTANTS

  	
  American
  Institute of

  
	
  Suite
  120

  	
  Certified
  Public Accountants

  
	
  10
  North Presidential Boulevard

  	
   

  
	
  Bala
  Cynwyd, PA 19004-1107

  	
  Pennsylvania
  Institute of

  
	
   

  	
  Certified
  Public Accountants

  
	
   

  	
   

  
	
   

  	
  (610)
  664-0450

  
	
   

  	
  FAX:
  (610) 664-0955

  
	
   

  	
  1-800-550-6028

  
	
   

  	
   

  	
  www.zmwcpa.com

  

 

The Board of Directors and
Stockholders

The Center For Forensic Economic Studies, Ltd.

Philadelphia, Pennsylvania

 

 

We have compiled the accompanying statement
of assets, liabilities and accumulated deficit-income tax basis of The Center
For Forensic Economic Studies, Ltd. (an “S” corporation) as of December 31,
2002 and the related statements of revenues, expenses and accumulated
deficit-income tax basis for the year then ended and the accompanying
supplementary information-income tax basis, which are presented only for
supplementary analysis purposes, in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of Certified
Public Accountants.  This financial
statement has been prepared on the accounting basis used by the Company for
income tax purposes, which is a comprehensive basis of accounting other than
generally accepted accounting principles.

 

A compilation is limited to
presenting in the form of financial statements information that is the
representation of management.  We have
not audited or reviewed the accompanying financial statements and, accordingly,
do not express an opinion or any other form of assurance on them.

 

Management has elected to
omit substantially all of the disclosures ordinarily included in a financial
statement prepared on the income tax basis of accounting.  If the omitted disclosures were included in
the financial statement, they might influence the user’s conclusions about the
Company’s assets, liabilities, and equity (deficit).  Accordingly, this financial statement is not designed for those
who are not informed about such matters.

 

	
   

  	
           /s/
  Zelnick, Mann and Winikur

  
	
   

  	
  ZELNICK, MANN AND WINIKUR,
  P.C.

  

 

 

March 25, 2003

 

 

THE
CENTER FOR FORENSIC ECONOMIC STUDIES, LTD.

STATEMENT
OF ASSETS, LIABILITIES AND EQUITY (DEFICIT)-

INCOME
TAX BASIS

DECEMBER
31, 2002

 

	
  ASSETS

  	
   

  	
   

  	
   

  
	
  CURRENT ASSETS

  	
   

  	
   

  	
   

  
	
  Cash

  	
   

  	
  $

  	
  1,378

  	
   

  
	
  Loan receivable, officers

  	
   

  	
  44,572

  	
   

  
	
  Common stock subscription

  	
   

  	
  1,000

  	
   

  
	
  Prepaid expenses

  	
   

  	
  8,800

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total current assets

  	
   

  	
  55,750

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PROPERTY AND EQUIPMENT

  	
   

  	
   

  	
   

  
	
  Equipment, other

  	
   

  	
  28,266

  	
   

  
	
  Leasehold improvements

  	
   

  	
  46,814

  	
   

  
	
  Computer equipment

  	
   

  	
  309,439

  	
   

  
	
  Furniture and fixtures

  	
   

  	
  138,177

  	
   

  
	
  Automobile

  	
   

  	
  32,500

  	
   

  
	
  Real estate

  	
   

  	
  125,911

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  681,107

  	
   

  
	
  Less accumulated depreciation

  	
   

  	
  521,693

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  159,414

  	
   

  
	
  OTHER ASSETS

  	
   

  	
   

  	
   

  
	
  Cash value of life insurance

  	
   

  	
  990,538

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total assets

  	
   

  	
  $

  	
  1,205,702

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  LIABILITIES AND
  STOCKHOLDERS’ EQUITY (DEFICIT)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CURRENT LIABILITIES

  	
   

  	
   

  	
   

  
	
  Notes payable

  	
   

  	
  $

  	
  990,538

  	
   

  
	
  Accrued profit sharing

  	
   

  	
  275,904

  	
   

  
	
  Customer deposits

  	
   

  	
  74,163

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total current liabilities

  	
   

  	
  1,340,605

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  STOCKHOLDERS’ EQUITY (DEFICIT)

  	
   

  	
   

  	
   

  
	
  Common stock, $10 par value, 100 shares authorized, issued and
  outstanding

  	
   

  	
  1,000

  	
   

  
	
  Accumulated deficit

  	
   

  	
  (135,903

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Total stockholders’ equity (deficit)

  	
   

  	
  (134,903

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Total liabilities and stockholders’ equity (deficit)

  	
   

  	
  $

  	
  1,205,702

  	
   

  

 

See
accompanying accountant’s report.

 

2

 

THE
CENTER FOR FORENSIC ECONOMIC STUDIES, LTD.

STATEMENT
OF REVENUES, EXPENSES AND ACCUMULATED DEFICIT —

INCOME TAX BASIS

YEAR
ENDED DECEMBER 31, 2002

 

	
  Revenues

  	
   

  	
   

  	
   

  
	
  Fees

  	
   

  	
  $

  	
  8,790,321

  	
   

  
	
  Other income

  	
   

  	
  1,391

  	
   

  
	
  Interest income

  	
   

  	
  12,042

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total revenue

  	
   

  	
  8,803,754

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Operating expenses

  	
   

  	
  4,329,130

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Excess of revenues over expenses before depreciation, officers’
  salaries, and provision for profit sharing expense

  	
   

  	
  4,474,624

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Depreciation

  	
   

  	
  41,427

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Excess of revenues over expenses before officers’ salaries and
  provision for profit sharing expense

  	
   

  	
  4,433,197

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Officers’ salaries

  	
   

  	
  4,184,679

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Excess of revenues over expenses before provision for profit sharing
  expense

  	
   

  	
  248,518

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Provision for profit sharing expense

  	
   

  	
  275,904

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Net loss

  	
   

  	
  (27,386

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Accumulated deficit — beginning of year

  	
   

  	
  (108,517

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Accumulated deficit — end of year

  	
   

  	
  $

  	
  (135,903

  	
  )

  

 

See
accompanying accountants’ report.

 

3

 

SUPPLEMENTARY
INFORMATION

 

 

THE
CENTER FOR FORENSIC ECONOMIC STUDIES, LTD.

SCHEDULE
OF OPERATING EXPENSES -

INCOME
TAX BASIS

YEAR
ENDED DECEMBER 31, 2002

 

	
  OPERATING EXPENSES

  	
   

  	
   

  	
   

  
	
  Accounting

  	
   

  	
  $

  	
  6,625

  	
   

  
	
  Advertising and promotion

  	
   

  	
  177,094

  	
   

  
	
  Automobile expense

  	
   

  	
  105,916

  	
   

  
	
  Computer expense

  	
   

  	
  10,273

  	
   

  
	
  Courier service

  	
   

  	
  14,803

  	
   

  
	
  Employee benefits

  	
   

  	
  240,342

  	
   

  
	
  Employee search

  	
   

  	
  5,156

  	
   

  
	
  Entertainment

  	
   

  	
  50,082

  	
   

  
	
  Equipment rental

  	
   

  	
  22,771

  	
   

  
	
  Insurance, general

  	
   

  	
  30,193

  	
   

  
	
  Interest

  	
   

  	
  125,983

  	
   

  
	
  Legal

  	
   

  	
  24,146

  	
   

  
	
  Office expense

  	
   

  	
  79,227

  	
   

  
	
  Outside data processing

  	
   

  	
  598,061

  	
   

  
	
  Payroll service

  	
   

  	
  3,053

  	
   

  
	
  Pension and administrative expense

  	
   

  	
  22,707

  	
   

  
	
  Postage, stationery and printing

  	
   

  	
  5,883

  	
   

  
	
  Professional dues and affiliations

  	
   

  	
  2,860

  	
   

  
	
  Rent

  	
   

  	
  320,871

  	
   

  
	
  Repairs and maintenance

  	
   

  	
  12,687

  	
   

  
	
  Research and publications

  	
   

  	
  33,881

  	
   

  
	
  Research, computer access

  	
   

  	
  15,042

  	
   

  
	
  Salaries, clerical

  	
   

  	
  703,228

  	
   

  
	
  Salaries, staff

  	
   

  	
  1,238,400

  	
   

  
	
  Seminars

  	
   

  	
  7,633

  	
   

  
	
  Storage

  	
   

  	
  5,287

  	
   

  
	
  Taxes, other

  	
   

  	
  37,957

  	
   

  
	
  Taxes, payroll

  	
   

  	
  208,242

  	
   

  
	
  Telephone

  	
   

  	
  47,073

  	
   

  
	
  Travel and lodging

  	
   

  	
  157,460

  	
   

  
	
  Utilities

  	
   

  	
  16,194

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total operating expenses

  	
   

  	
  $

  	
  4,329,130

  	
   

  

 

See
accompanying accountants’ report

 

 

 

5

QuickLinks

Exhibit 10.37

ASSET PURCHASE AGREEMENT

RECITALS

AGREEMENT

LIST OF EXHIBITSExhibit
10.46

 

OMNIBUS
PLAN OF REORGANIZATION

 

                This OMNIBUS PLAN OF
REORGANIZATION (this “Plan”),
dated as of November 7, 2003 and effective as of August 21, 2003, is entered
into by and among LECG Holding Company, LLC, a California limited liability
company (“Holding”), LECG
Corporation, a Delaware corporation (the “Corporation”),
TCEP/LECG Funding Corporation, a Delaware corporation (“Funding”), Thoma Cressey Fund VII, L.P., a
Delaware limited partnership and Thoma Cressey Friends Fund VII, L.P., a Delaware
limited partnership (collectively “TCEP”),
David J. Teece and David Kaplan (collectively with Holding, the Corporation,
Funding and TCEP, the “Parties”).  All capitalized terms not otherwise defined
herein shall have the meanings ascribed to such terms in that certain Limited
Liability Company Agreement of Holding, dated as of September 29, 2000, as
subsequently amended (the “LLC Agreement”).

Recitals

                WHEREAS, Holding desires to reorganize into a corporation in
order to conduct an initial public offering (the “IPO”) of shares of common
stock, par value $0.001 per share (the “Common
Stock”);

                WHEREAS, absent a reorganization of Holding into a
corporation, Holding’s present capital structure would adversely affect the
marketability of the IPO;

                WHEREAS, the
Corporation has been organized
at the direction of Holding to be the corporate successor of Holding (through
the acquisition of all of the outstanding Units (as defined below) of Holding)
and to conduct the IPO;

                WHEREAS, the Board of
Directors of Holding has determined that in order to facilitate the IPO and the
reorganization contemplated by this Plan and as consideration for the
consummation of the TCEP Exchange and the Non-TCEP Exchange, Holding will,
immediately prior to the consummation of the TCEP Exchange (as defined below)
(the “Record
Date”), make a binding commitment to each Person holding any Common
Units  of Holding on the Record Date (or
such other Person as may be designated in writing by a Person holding any Units
on the Record Date), to pay such Person his pro rata share of each of the
following: (i) a Tax Distribution for the period from September 30, 2003
through the date of the TCEP Exchange, presently estimated to be in the
aggregate amount of approximately One Million Dollars ($1,000,000) (the “Final Tax
Distribution”) on or before March 14, 2004, and (ii) a sum of
approximately $14.1 million for payment of previously taxed but undistributed
earnings for prior periods (the “Retained Earnings Payout”) with the
Retained Earnings Payout for prior periods ending on or before December 31,
2002 being paid as soon as possible following, but in any event within five (5)
days of the consummation of the IPO and the Retained Earnings Payout for 2003
being paid on or before March 14, 2004; “pro rata share” will be calculated for
each Person by dividing the number of Common Units held by such Person on the
Record Date by the total number of Common Units of Holding outstanding on the
Record Date;

                WHEREAS,  as set forth
in that certain Transfer Agreement, substantially in the form attached hereto
as Exhibit A (the “Transfer Agreement”),
in anticipation of, and as an integral step to the completion of, the IPO and
the Non-TCEP Exchange (as defined below), Holding and the Corporation desire
that TCEP transfer to the Corporation all of the issued and outstanding shares
of common stock of Funding in exchange (collectively the “TCEP Exchange”) for (i) a number of shares
of Common Stock equal to a percentage, as is determined by the Board of
Directors of Holding prior to the Record Date, of 

 

1

 

the number of
common units of Holding held by Funding on the date of the TCEP Exchange (the “Common Exchange Percentage”), (ii) a
binding commitment (a “Redemption Commitment”)
by the Corporation to pay to TCEP an amount of cash equal to the Liquidation
Value (calculated as of the date of the consummation of the IPO) of the Class A
Preferred Units of Holding (each a “Preferred
Unit”) held by Funding on the Record Date (the “TCEP Redemption Payment”), (iii) a binding
commitment by the Corporation to pay to Funding its allocable portion of the
Final Tax Distribution, (iv) a binding commitment by the Corporation to pay to
TCEP, or its designee, an amount equal to the portion of the Retained Earnings
Payout allocable to Funding (the “TCEP
Retained Earnings Payout”), and (v) a binding contingent commitment
by the Corporation to pay to TCEP an amount equal to the Remaining Funding Tax
Reserve (as defined in the Transfer Agreement), if any, in accordance with the
terms of the Transfer Agreement;

                WHEREAS, following the consummation of the TCEP Exchange,
Funding shall be a wholly-owned subsidiary of the Corporation and TCEP shall be
the sole shareholder of the Corporation;

                WHEREAS, in anticipation of, and as an integral step to the
completion of, the IPO and the TCEP Exchange and as previously agreed by the
members of Holding, three (3) hours following the consummation of the TCEP
Exchange, each owner of Common Units or
Preferred Units other than Funding (each a “Non-TCEP Member”) will exchange (the “Non-TCEP
Exchange”) its Common Units
and each of its Preferred Units, if any, with the Corporation for (i) a
number of shares of Common Stock equal to the Common Exchange Percentage multiplied
by the number of Common Units held by such Non-TCEP Member on the Record Date,
provided however that such percentage shall equal the TCEP Common Exchange
Percentage, and (ii) a Redemption
Commitment by the Corporation to pay each Non-TCEP Member who holds Preferred
Units an amount of cash equal to the Liquidation Value (calculated as of the
date of the consummation of the IPO) of the Preferred Units held by such
Non-TCEP Member on the date of the Non-TCEP Exchange (each a “Non-TCEP
Redemption Payment”);

                WHEREAS, immediately following the consummation of the
Non-TCEP Exchange and prior to the consummation of the IPO, the Non-TCEP
Members and TCEP shall constitute all of the shareholders of the Corporation;

                WHEREAS, immediately following the consummation
of the Non-TCEP Exchange, the Corporation shall own all of the outstanding
Common Units and Preferred Units (collectively, the “Units”) of Holding; approximately 61% of such Units shall be
held directly by the Corporation and approximately 39% of such Units shall be
held indirectly by the Corporation through Funding;

                WHEREAS, one (1) business day following the consummation of
the Non-TCEP Exchange, Corporation, Holding and Funding shall effect a merger
(the “Merger”)  between Holding and Funding by entering
into an Agreement and Plan of Merger, substantially in the form attached hereto
as Exhibit B (the “Plan of Merger”)
and filing certificates of merger, substantially in the forms of Exhibits
C-1 and C-2 (each a “Certificate
of Merger”) with the Secretary of State of the States of Delaware
and California, respectively, upon the effectiveness of which Holding shall
merge with and into Funding, the legal existence of Holding shall cease, and
Funding shall be (i) the surviving entity, (ii) a wholly-owned corporate
subsidiary of the Corporation, and (iii) the sole owner of all of the
outstanding membership interests of LECG, LLC, a California limited liability
company (“LECG”);

                WHEREAS, in connection with
the Merger and as stated in the Plan of Merger, the Corporation will assume
certain obligations of Holding pursuant to an Assignment and Assumption
Agreement substantially in the form attached hereto as Exhibit D (the “Assignment
and Assumption Agreement”) 

 

2

 

including, without
limitation, Holding’s obligation to make the Final Tax Distribution and the
Retained Earnings Payout;

                WHEREAS, the Corporation shall make (i) the TCEP Redemption
Payment to TCEP, and the Non-TCEP Redemption Payment to each of the Non-TCEP
Members to whom it has made a Redemption Commitment as soon as possible but, in
any event, within five (5) days following the consummation of the IPO, (iii)
that portion of the Retained Earnings Payout (including the TCEP Retained
Earnings Payout) for prior periods ending on or before December 31, 2002 being
paid as soon as possible following, but in any event within five (5) days of
the consummation of the IPO; and (iv) the Final Tax Distribution and the
Retained Earnings Payout for 2003 on or before March 14, 2004;

                WHEREAS, pursuant to the terms of the Transfer Agreement, the
Corporation shall pay to TCEP an amount equal to the Remaining Funding Tax
Reserve, if any;

                WHEREAS, the Corporation shall maintain Funding as a
wholly-owned subsidiary and shall cause Funding to maintain LECG as a
wholly-owned subsidiary for an indefinite period, provided however that for
a period of at least one (1) year following the consummation of the TCEP
Exchange, the Corporation shall cause Funding to maintain assets of a fair
market value not less than the fair market value of the assets held by Funding
immediately prior to the TCEP Exchange (the “Post-Exchange Corporate Structure”);

                WHEREAS, the board of directors of Holding and the
board of directors of the Corporation have approved this Plan, the IPO, the
TCEP Exchange, the Non-TCEP Exchange, the Merger, the Assignment and Assumption
Agreement, the TCEP Redemption Payment, the Non-TCEP Redemption Payment, the
Final Tax Distribution, the Retained Earnings Payout (including the TCEP
Retained Earnings Payout), the payment to TCEP of the Remaining Funding Tax
Reserve, if any, and maintaining the Post-Exchange Corporate Structure, as
appropriate;

                WHEREAS, the Corporation, in anticipation of
becoming  the sole shareholder of
Funding and the sole member (directly and indirectly through Funding) of
Holding has approved the Merger; and

                WHEREAS, this Plan contemplates that the TCEP
Exchange and the Non-TCEP Exchange, together with the purchases of Common Stock
from the Corporation as part of the IPO, are part of an integrated plan for the
transfer of property to the Corporation by a group of “persons” who will be in
“control” of the Corporation within the meaning of Section 351 of the Internal Revenue Code of 1986, as
amended (the “Code”), and the Parties intend that the receipt of
Common Stock by TCEP and the Non-TCEP Members shall be tax-free under Section
351 of the Code.

Agreement

                NOW, THEREFORE, for and in consideration of the promises,
mutual representations, warranties and covenants herein contained and other
good and valuable consideration, the sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

                1.             TCEP Exchange. 
The TCEP Exchange will be completed in accordance with the terms of the
Transfer Agreement.

                2.             Non-TCEP Exchange.  Three
(3) hours following
the consummation of the TCEP Exchange, Holding, the Corporation and the
Non-TCEP Members shall take all actions reasonably necessary or desirable to
effectuate the Non-TCEP Exchange.  Upon the
consummation of the Non-TCEP 

 

3

 

Exchange, (a)
certificates representing the shares of Common Stock to be issued in connection
therewith shall be countersigned by the Corporation’s transfer agent and registrar
and issued to the Non-TCEP Members and Holding shall cause its company records
to reflect that the Corporation own the Non-TCEP Members’ Common Units until
the merger described in Section 3 below, (b) Holding shall cause its
company records to reflect that the Corporation owns any Preferred Units held
by any Non-TCEP Member until the merger described in Section 3 below and
(c) the Corporation shall have an obligation to pay each Non-TCEP Member its
Non-TCEP Redemption Payment as soon as possible, but in any event no later than
five (5) days, following the consummation of the IPO.

                3.             Merger. 
One (1) business day following the consummation of the Non-TCEP
Exchange, Holding and Funding shall take all action necessary or desirable to
consummate the Merger, including, without limitation, the execution and
delivery of the Plan of Merger and the filing of a Certificate of Merger with
the Secretary of State of each of the State of California and the State of
Delaware, as appropriate.

                4.             Final
Tax Distribution and Retained Earnings Payout.  As soon as possible following, but in any
event within five (5) days of, the consummation of the IPO, the Corporation
will make or cause Funding (as the corporate successor to Holding) to make, the
Retained Earnings Payout (including the TCEP Retained Earnings Payout) for
prior years ending on or before December 31, 2002. On or before March 14, 2004,
the Corporation will make or cause Funding (as the corporate successor to
Holding) to make, the Final Tax Distribution and the Retained Earnings Payout
for 2003.

                5.             Payment Equal To
Remaining Funding Tax Reserve.  To
the extent required by, and on the terms set forth in, the Transfer Agreement,
the Corporation shall pay to TCEP an amount equal to the Remaining Funding Tax Reserve, if any.

                6.             Maintenance
of Corporate Structure.  For an
indefinite, but in any event not less than one (1) year, period following the
TCEP Exchange, the Corporation shall maintain the Post-Exchange Corporate
Structure.

                7              Notice of Plan of
Reorganization.  Holding
and Corporation shall undertake all actions reasonably necessary or advisable
to provide the Omnibus Plan of Reorganization to each of the Non-TCEP Members.

                8.             Member and Board
Reliance.    The Parties agree that each member of
Holding and the board of directors of Holding are third party beneficiaries of
this Plan and are entitled to rely on and benefit from the acknowledgements,
waivers and agreements set forth herein.

                9.             Fees and Expenses.  On or before the date of the consummation of the TCEP Exchange, the
parties shall mutually determine an allocation among the parties of the costs
and expenses incurred in connection with the performance of, and compliance
with, all obligations contained in the Plan and this Agreement to be performed
or complied with by TCEP.

                10.          Assumption of
Obligations of Holding; 2000 Incentive Plan.  In addition to the other rights, duties and
obligations assumed by the Corporation herein, the Parties agree and
acknowledge that upon the effective time of the Merger, Corporation shall
assume the rights, duties, obligations and liabilities of Holding pursuant to
and under Section 6.1 and Articles VII, and IX of the LLC
Agreement, that certain Securityholders’ Agreement dated as of September 29,
2000, as amended, that certain Buy-Sell Agreement dated as of September 29,
2000, as amended, and that certain Registration Rights Agreement dated as of
September 29, 2000.  The Corporation
will also assume the obligations and 

 

4

 

liabilities of
Holding with respect to all outstanding grants (the “Outstanding Grants”) under
that certain 2000 Incentive Plan, as amended (the “Plan”) such that from and
after the effective time of the Merger, all Outstanding Grants will be
exercisable into a number of shares of Common Stock of the Corporation equal to
(i) the number of Common Units exercisable under the Outstanding Grants
multiplied by (ii) the Exchange Ratio with fractional shares being rounded up,
and the exercise prices of such Outstanding Grants will be converted by
dividing such exercise prices by the Exchange Ratio, with fractional cents
being rounded up.  The assumptions of
obligations of Holding under this Section 10 will be reflected in the
Assignment and Assumption Agreement.

                11.          Tax Treatment.  The parties intend this Plan, including the
TCEP Exchange, the Non-TCEP Exchange and the purchases of Common Stock from the
Corporation as part of the IPO, to be
an integrated plan for the transfer of property to the Corporation by a group
of “persons” who will be in “control” of the Corporation within the meaning of
Section 351 of the Code, and the
Parties intend that the receipt of Common Stock by TCEP and by the Non-TCEP
Members pursuant to this Plan shall be tax-free under Section 351 of the Code, and
each Party agrees to treat the transactions contemplated by this Plan
(including the TCEP Exchange, the Non-TCEP Exchange and the IPO) in a manner
consistent with the foregoing for purposes of all tax returns and other
relevant filings and to make all filings required in connection with such
transactions under Section 351 of the Code.

                12.          Counterpart Signature Pages.  This Plan may be executed in any number of
counterparts, each of which counterparts when executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.

                13.          Waivers and Amendments.  This Plan may be amended, modified or supplemented, and any terms
hereof may be waived, only by a written instrument executed by all of the Parties.

14.          Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision or any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.

15.          Governing
Law.  This Plan shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to the conflicts of laws principles thereof.

16.          Further
Assurances. Each party to this Plan, upon the request of any
other party, agrees to perform any further acts and execute and deliver any
documents which may be reasonably necessary to carry out the provisions of this
Plan.

 

 

[Signature
Pages Follow]

 

5

 

IN WITNESS WHEREOF,
the undersigned have caused this OMNIBUS PLAN OF REORGANIZATION to be executed
and delivered as of the date first written above.

 

	
   

  	
   

  	
  LECG
  Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LECG
  Holding Company, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TCEP/LECG
  Funding Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THOMA CRESSEY FUND VII, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  TC Partners VII, L.P.

  	 

	
   

  	
   

  	
  Its:

  	
  General Partner

  	 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Thoma Cressey Equity Partners,
  Inc.

  
	
   

  	
   

  	
   

  	
  Its:

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:_______________________________________

  
	
   

  	
   

  	
   

  	
   

  	
  William W. Liebeck

  
	
   

  	
   

  	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  	
   

  
						

 

 

6

 

 

	
   

  	
  THOMA CRESSEY FRIENDS FUND VII, L.P.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  TC Partners VII, L.P.

  
	
   

  	
  Its:

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Thoma Cressey Equity Partners,
  Inc.

  
	
   

  	
   

  	
  Its:

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  William W. Liebeck

  
	
   

  	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  David J. Teece

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  David Kaplan

  
										

 

7

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