Document:

Exhibit 10.1

EXECUTION COPY

AGREEMENT AND MUTUAL RELEASE

This Agreement and Mutual Release (this “Agreement”),
dated as of March 8, 2007, is entered into among J.L. Halsey Corporation (the “Company”),
LDN Stuyvie Partnership (“LDN”), Texas Addison Limited Partnership (“Addison”),
Andrew Richard Blair (“Blair,” and together with LDN, the “Purchasers”) and
David R. Burt (“Director”).

1.          Definitions.

a.             “Claims”
means any and all claims, complaints, charges, demands, liabilities, suits,
damages, losses, expenses, attorneys’ fees, obligations or causes of action.

b.             “Company
Parties” means the Company and its predecessors, successors, assigns, parents,
subsidiaries and affiliates and each of the foregoing entities’ respective
past, present and future stockholders, members, partners, managers, directors,
officers, employees, agents, representatives, principals, insurers, attorneys,
employee benefit programs (and the trustees, administrators, fiduciaries and
insurers of such programs), any person acting by, through, under or in concert
with any of the foregoing entities, and LDN and its partners and affiliates.

c.             “Director
Parties” means Director and his family, attorneys, heirs, estate, agents,
executors, representatives, administrators, the successors and assigns of each
of the foregoing, and Addison and its partners and affiliates.

2.          Director’s General
Release and Covenant Not to Sue.

a.             Each
of Director, on behalf of himself and each of the other Director Parties, and
Addison hereby generally releases and forever discharges the Company Parties
from any and all Claims, known or unknown, of any kind and every nature
whatsoever, and whether or not accrued or matured, which any of them may have,
arising out of or relating to any transaction, dealing, relationship, conduct,
act or omission, or any other matters or things occurring or existing at any
time prior to and including the time of the Closings (as hereinafter defined)
(including but not limited to any Claims against any of the Company Parties
based on, relating to or arising under wrongful discharge, retaliation, breach
of contract (whether oral or written), tort, defamation, slander, breach of
privacy, violation of public policy, negligence, promissory estoppel, Title VII
of the Civil Rights Act of 1964, The Age Discrimination in Employment Act, The
Americans with Disabilities Act, the Director Retirement Income Security Act of
1974, or any other federal, state or local law relating to employment (or
unemployment), the payment of wages, salary or other compensation, civil or
human rights, or discrimination in employment (based on age or any other
factor)) in all cases arising out of or relating to Director’s employment by
the Company or any subsidiary thereof or Director’s or Addison’s investment in
the Company or any subsidiary thereof or Director’s services as an officer,
employee or director of the Company or any subsidiary thereof, or otherwise
relating to the termination of such employment or services; provided, however, that
this release will not limit or release (i) Director’s rights under this
Agreement, (ii) Director’s rights to indemnification pursuant to the Company’s
Certificate of Incorporation or Amended and Restated Bylaws, or pursuant to
that certain Indemnification Agreement, entered into as of May 4, 2000, between

Director and the Company, (iii) Director’s entitlement, if any, to
continued medical and dental insurance coverage under and pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 and (iv) any rights of
Director under any Benefit Plan (as defined in that certain Amended and
Restated Employment Agreement, dated as of September 27, 2000, by and between
Director and the Company) or any agreement entered into to evidence rights
granted pursuant to a Benefit Plan.

b.             Each
of Director, on behalf of himself and each of the other Director Parties, and
Addison hereby covenants forever not to assert, file, prosecute, commence or
institute (or sponsor or purposely facilitate any person in connection with the
foregoing), any complaint or lawsuit or any legal, equitable, arbitral or
administrative proceeding of any nature, against any of the Company Parties in
connection with any released Claims, and represents and warrants that no other
person or entity has initiated or, to the extent within his control, will
initiate any such proceeding on his or its behalf, and that if such a
proceeding is initiated, neither Director nor Addison shall accept benefit
therefrom.

3.          Company’s General
Release and Covenant Not to Sue.

a.             Each
of the Company, on its own behalf and on behalf of the other Company Parties,
and LDN hereby generally releases and forever discharges the Director Parties
from any and all Claims, known or unknown, of any kind and every nature
whatsoever, and whether or not accrued or matured, which any of them may have,
arising out of or relating to any transaction, dealing, relationship, conduct,
act or omission, or any other matters or things occurring or existing at any
time prior to and including the time of the Closings (including but not limited
to any Claims based on, relating to or arising under breach of contract
(whether oral or written), tort, defamation, slander, violation of public
policy, negligence, promissory estoppel, or any other federal, state or local
law relating to employment or discrimination in employment) in all cases
arising out of or relating to Director’s employment by the Company or any
subsidiary thereof or Director’s or Addison’s investment in the Company or any
subsidiary thereof or Director’s services as a director, officer or employee of
any Company Party (or of any entity for which Director has served in any such
capacity or a similar capacity at the request of the Company), or otherwise
relating to the termination of such employment or services; provided, however,
that this release will not limit or release (i) the Company’s rights under this
Agreement, (ii) the Company’s rights against Director with respect to any
breach of fiduciary or other legal duties as a director or officer or any
fraudulent or criminal activity and (iii) the Company’s rights under any
Benefit Plan or any agreement entered into to evidence rights granted pursuant
to an Benefit Plan.

b.             Each
of the Company, on behalf of itself and the other Company Parties, and LDN
hereby covenants forever not to assert, file, prosecute, commence or institute
(or sponsor or purposely facilitate any person in connection with the
foregoing), any complaint or lawsuit or any legal, equitable, arbitral or
administrative proceeding of any nature, against any of the Director Parties in
connection with any released Claims, and represents and warrants that no other
person or entity has initiated or to the extent within its control, will
initiate any such proceeding on its behalf, and that if such a proceeding is
initiated, neither the Company, the other Company Parties nor LDN shall accept
benefit therefrom.

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4.          Resignation.  Director hereby resigns from his positions as
a director of the Company and as a director or officer of each of the Company’s
direct and indirect subsidiaries, such resignation to be effective as of the
Closings.

5.          Purchase and Sale of
Shares.

a.             Sale
to LDN and Blair.

i.              Subject to the terms
and conditions of this Section 5, Addison hereby agrees to sell (A) to LDN, and
LDN hereby agrees to purchase from Addison, 4,166,667 shares (the “LDN Sale
Shares”) of the Company’s common stock, par value $0.01 per share (the “Common
Stock”) and (B) to Blair, and Blair agrees to purchase from Addison, 333,333
shares (the “Blair Sale Shares” and together with the LDN Sale Shares, the “Sale
Shares”) of Common Stock.

ii.             The purchase price
for the Sale Shares shall be $0.75 in cash per share, or an aggregate of
$3,375,000 (such aggregate price being referred to herein as the “Share
Purchase Price”).  Of the Share Purchase
Price, $3,125,000 (the “LDN Share Purchase Price”) shall be paid by LDN for the
LDN Sale Shares, and $250,000 (the “Blair Share Purchase Price”) shall be paid
by Blair for the Blair Sale Shares.  On
the eighth calendar day after the execution of this Agreement (or, in the event
such day is not a business day, on the next business day thereafter), LDN shall
pay the LDN Share Purchase Price, and Blair shall pay the Blair Share Purchase
Price, in each case by means of wire transfer or official bank check payable to
the order of Addison.  The payment of the
LDN Share Purchase Price shall be referred to herein as the “LDN Closing,” and
the payment of the Blair Share Purchase Price shall be referred to herein as
the “Blair Closing.”  Each of the LDN
Closing and the Blair Closing shall be referred to herein as a “Closing,” and
together as the “Closings.”

iii.            In connection with the
Closings, Addison shall (A) deliver to LDN the LDN Sale Shares duly endorsed to
LDN or accompanied by stock powers duly executed by Addison, in form and
substance reasonably satisfactory to LDN, and (B) deliver to Blair the Blair
Sale Shares duly endorsed to Blair or accompanied by stock powers duly executed
by Addison, in form and substance reasonably satisfactory to Blair; provided, that at the request of either LDN or Blair,
Addison shall arrange for the book-entry delivery of the LDN Sale Shares or the
Blair Sale Shares, as the case may be, by causing The Depository Trust Company
(“DTC”) to transfer such Sale Shares into the account of a financial
institution identified by LDN or Blair that is a participant in the DTC in
accordance with DTC’s procedures for such transfer.

iv.            The LDN Closing and
the Blair Closing shall occur simultaneously, and the occurrence of each Closing
shall be conditioned upon the occurrence of the other Closing.

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b.             Future Sales.

i.              The Company,
Director and Addison agree that, in addition to the sale of the Sale Shares as
set forth in Section 5.a. above, beginning on the six-month anniversary of the
Closings, Director and Addison shall be entitled to sell additional shares of
Common Stock on the public market; provided, that
(A) the amount of Common Stock sold pursuant to this Section 5.b., together
with all other sales of Common Stock by Director or Addison within the 90-days
preceding such sale, shall not exceed 300,000 shares (or such greater or lesser
number to appropriately reflect adjustments for stock splits, stock dividends,
or similar actions by the Company with respect to the Common Stock), (B) all
sales of Common Stock pursuant to this Section 5.b. shall be effected through
the  Designated Brokerage Firm (defined
below) and (C) neither Director nor Addison will undertake the sale of Common
Stock to any Person whereby, to the knowledge of Director or Addison, such sale
would (1) cause the Transferee to have a Prohibited Ownership Percentage or (2)
increase the ownership percentage of any Person already having a Prohibited
Ownership Percentage.  For purposes
hereof, the terms “Transferee”, “Prohibited Ownership Percentage” and “Person”
shall have the meanings given such terms in Article Fifth of the Company’s
Certificate of Incorporation.  For
purposes hereof, the term “Designated Brokerage Firm” shall mean (a) Freimark
Blair & Company, Inc. (“Freimark Blair”), or (b) any office of Smith
Barney; provided, however,  that Smith Barney may only be used in the event (1) Blair
retires or terminates his relationship with Freimark Blair; (2) Freimark Blair
is unable for any reason whatsoever to provide the brokerage services necessary
for Director and/or Addison to sell the shares permitted under this Section
5.b.i; or (3) Blair or Freimark Blair engages or proposes to engage in fees or
conduct that is outside the reasonable norms of the brokerage industry

ii.             Notwithstanding the
provisions of Section 5.b.i. above, the parties agree and acknowledge that,
when the number of shares of Common Stock beneficially owned by Director falls
below a Prohibited Ownership Percentage, Addison and Director shall be free to
sell shares of Common Stock without any restriction whatsoever other than any
restriction imposed by law.

6.          Certain Payments.

a.             Accrued
Bonus.  The Company and Director
agree and acknowledge that Director is owed a total of $359,000 in bonus amounts
earned while Director was employed by the Company.  The Company agrees to pay such bonus amounts
to Director as follows: (i) $30,000.00 on the first business day of each month
beginning in March 2007 (provided that the payment due in March 2007 shall be
made concurrently with the Closings) and ending on the first business day of
January 2008, and (ii) $29,000 on the first business day of February 2008.  The payments set forth in this Section 6.a.
are referred to herein as the “Bonus Payments.”

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b.             No
Other Payments.  The Company and
Director acknowledge and agree that payment of the Bonus Payments shall be in
full satisfaction of all amounts remaining owed to Director for services
rendered to the Company.

7.             Return
of Property.  Director agrees and
covenants that, no later than March 31, 2007, Director will (i) vacate (A) any
office space or other premises of the Company or any of its subsidiaries
currently being used by Director or any of the other Director Parties and (B)
any office space or other premises leased or subleased by the Director for or
on behalf of, or which is or has been used primarily by the Director in the
fulfillment of his duties and responsibilities to, the Company or any of its
subsidiaries (and terminate any such lease or sublease without any penalty or
continuing payment obligation on the part of the Company or any of its
subsidiaries), and (ii) deliver to the Company all property, equipment or
materials of the Company or any of its subsidiaries currently in the possession
of, or being used by, Director or any of the other Director Parties.  For purposes of this Section 7, delivery
shall mean prepared and ready for pick-up by Peter Biro or Rich McDonald (or
their designee) at 790 Turnpike Street, North Andover, MA 01845.

8.          Confidentiality.  Director shall at all times treat as
confidential and, except pursuant to legal process, not disclose, publish or
otherwise make available to the public or to any individual, firm or
corporation any confidential information. 
For the purposes hereof, the term “confidential information” shall mean
all information acquired by Director in the course of Director’s employment or
service with the Company or any subsidiary of the Company in any way concerning
the products, projects, activities, business or affairs of the Company, its
subsidiaries or their respective customers, including, without limitation, all
information concerning trade secrets and the products or projects of the
Company or its subsidiaries and/or any improvements therein, all sales and
financial information concerning the Company or its subsidiaries, all customer
and supplier lists, all information concerning projects in research and
development or marketing plans for any such products or projects, and all
information in any way concerning the products, projects, activities, business
or affairs of customers of the Company or its subsidiaries which is or has been
furnished to Director by the Company, its subsidiaries or any of their
respective agents or customers, as such; provided, however, that the term “confidential information” shall not
include information which (a) becomes generally available to the public other
than as a result of a disclosure by Director, (b) was available to Director on
a non-confidential basis prior to his employment with the Company or (c)
becomes or became available to Director on a non-confidential basis from a
source other than the Company, its subsidiaries or any of their respective
agents or customers provided that such source is not bound by a confidentiality
agreement with the Company, any of its subsidiaries, or any of such agents or
customers.

9.          Representations and
Warranties.

a.             Certain
Representations and Warranties of the Company, LDN and Addison.  Each of the Company, LDN and Addison
severally (but not jointly) represent and warrant as follows:

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i.              Such entity is duly
organized, validly existing and in good standing under the laws of its state or
jurisdiction of incorporation or organization, as the case may be.

ii.             The execution and
delivery of this Agreement by such entity does not, and the performance by such
entity of the transactions contemplated hereby will not, (A) violate, conflict
with or result in the violation or breach of, or constitute a default under,
the terms, conditions or provisions of any agreement, document or instrument to
which such entity is a party or by which entity is bound, or (B) violate any
order, writ, judgment, injunction, decree, statute, rule or regulation of any
court or federal, state or local administrative agency or commission or other
governmental authority or instrumentality applicable to entity; and

iii.            This Agreement is a
legal, valid and binding agreement of such entity enforceable against it in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, moratorium or other similar laws relating to creditors’ rights
generally and except that the availability of equitable remedies, including
specific performance, is subject to the discretion of the court before which
any proceeding therefor may be brought.

b.             Certain
Representations and Warranties of Director and Addison.  Each of the Director and Addison jointly and
severally represents and warrants as follows:

i.              Except for this
Agreement, there are no outstanding options, warrants or rights to purchase or
acquire, or agreements (whether voting or otherwise) relating to, the Sale
Shares; and

ii.             Addison owns, of
record and beneficially, all of the Sale Shares, free and clear of all liens,
claims, encumbrances and security interests of any nature whatsoever.  Upon purchase of the LDN Sale Shares pursuant
to this Agreement, LDN shall receive good and marketable title to the LDN Sale
Shares, free and clear of all liens, claims, encumbrances and security
interests of any nature whatsoever.  Upon
purchase of the Blair Sale Shares pursuant to this Agreement, Blair shall
receive good and marketable title to the Blair Sale Shares, free and clear of
all liens, claims, encumbrances and security interests of any nature
whatsoever.

c.             Certain
Representations and Warranties of Blair and Director.  Each of Blair and Director severally (but not
jointly) represents and warrants as follows:

i.              Such individual has
capacity to enter into this Agreement; and

ii.             This Agreement is a
legal, valid and binding agreement of such individual enforceable against him
in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, moratorium or other similar laws relating to creditors’
rights generally and except that the availability

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of equitable remedies, including specific performance,
is subject to the discretion of the court before which any proceeding therefor
may be brought.

d.             Certain
Representations and Warranties of the Purchasers.  Each of the Purchasers severally (but not jointly),
represents and warrants as follows:

i.              Such Purchaser is
acquiring the Blair Sale Shares or the LDN Sale Shares, as the case may be, for
his or its own account with the present intention of holding such securities
for purposes of investment, and that he or it has no intention of selling such
Sale Shares in a public distribution in violation of the federal securities
laws or any applicable state securities laws. 
In addition, such Purchaser hereby represents that he or it is
sophisticated in financial matters and is able to evaluate the risks and
benefits of his or its investment in the Sale Shares.

ii.             Such Purchaser is an “accredited
investor” as that term is defined in Rule 501(a) of the Securities Act of 1933.

e.             Certain
Representations and Warranties of the Company.  The Company represents and warrants that the
Company’s board of directors has taken all action necessary and appropriate to
waive the stock transfer restrictions contained in the Company’s Certificate of
Incorporation in order to permit the sales of Common Stock by Director and
Addison as set forth in Section 5.

10.        Certain Acknowledgments.

a.             Director
acknowledges that, by entering into this Agreement, the Company does not admit
to any wrongdoing in connection with Director’s employment or services, and
that this Agreement is intended as a compromise of any Claims that any Director
Party has or may have against the Company Parties.  Director acknowledges that he has read and
understands this Agreement, is fully aware of its legal effect, has not acted
in reliance upon any representations or promises made by the Company other than
those contained in writing herein, and has entered into this Agreement freely
based on Director’s own judgment. 
Director has been advised by the Company to consult with an attorney of
Director’s choosing before signing this Agreement.  Director understands that he has 21 days to
consider this Agreement, which Director agrees is a reasonable amount of time,
and that he may choose to execute this Agreement prior to the termination of
such 21 day period but is under no obligation to do so.  In addition, Director understands that he may
revoke this Agreement within 7 days after Director has signed it by written
notice to the Company given in accordance with Section 15 of this
Agreement.  This Agreement shall not
become effective or enforceable until the 7-day revocation period has expired
without Director’s revocation.  Director
acknowledges that if Director accepts any of the payments or other benefits set
forth in this Agreement after the expiration of the 7-day period, such
acceptance shall constitute an acknowledgment by Director that Director did not
revoke this Agreement during the 7-day period.

b.             Each
of Director, LDN, Addison and Blair acknowledges and agrees that (i) such party
is, or is controlled by, a person sophisticated and knowledgeable in matters of
the sort raised by this Agreement, (ii) such party is not relying on advice of
the Company’s counsel

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and (iii) such party is either representing himself or itself with
respect to the negotiation of this Agreement or has hired independent counsel
to do so on his or its behalf.

11.           Injunctive
Relief.  The parties hereto
acknowledge that money damages would be both incalculable and an insufficient
remedy for a breach of this Agreement by any party hereto and that any such
breach would cause the nonbreaching party or parties irreparable harm.  Accordingly, each party hereto, in addition
to any other remedies at law or in equity it may have, shall be entitled, without
the requirement of posting of bond or other security, to equitable relief,
including injunctive relief and specific performance, in connection with a
breach of this Agreement by any the other party.  If any party hereto files a pleading with a
court seeking immediate injunctive relief and this pleading is challenged by
any other party and the injunctive relief sought is not awarded, the party
seeking injunctive relief shall pay all of the costs and attorneys’ fees of the
parties challenging such relief.

12.           Severability.  If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws, such
provision shall be fully severable; this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a portion of this Agreement; and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by
the illegal, invalid or unenforceable provision or by its severance from this
Agreement.  Furthermore, in lieu of such
illegal, invalid or unenforceable provision there shall be added automatically
as part of this Agreement a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and be legal, valid and
enforceable.

13.           Fees.  Each party agrees that it shall be
responsible for its own fees incurred in connection with the negotiation and
preparation of this Agreement.

14.           Attorney’s
Fees.  Director agrees to pay the
reasonable attorney’s fees, costs and any damages any other party to this
Agreement may incur as a result of Director or Addison breaching a promise or
covenant Director or Addison made in this Agreement (such as by suing a Company
Party over a released Claim) or if any representation Director or Addison made
in this Agreement is false.  The Company
agrees to pay the reasonable attorney’s fees, costs and any damages any other
party may incur as a result of the Company breaching a promise or covenant the
Company made in this Agreement (such as by suing an Director Party over a
released Claim) or if any representation the Company made in this Agreement is
false.  LDN agrees to pay the reasonable
attorney’s fees, costs and any damages any other party may incur as a result of
LDN breaching a promise or covenant LDN made in this Agreement or if any
representation LDN made in this Agreement is false.  Blair agrees to pay the reasonable attorneys’
fees, costs and any damages any other party to this Agreement may incur as a
result of Blair’s breaching a promise or covenant Blair made in this Agreement,
or if any representation Blair makes in this Agreement is false.

15.           Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or on the fifth business day after such notice or
communication has been sent by registered or certified mail, postage prepaid,
with return receipt requested, as follows:

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If to the Company, to:

103 Foulk Road

Suite 205Q

Wilmington, DE  19803

If to LDN, to:

30 Cheyne Walk

SW3 5HH

United Kingdom

If to Director or Addison, to:

259 Granville Lane

North Andover, MA

01845

If to Blair, to:

1 Rice Bluff Road

Pawley’s Island, SC

29585

16.           Counterparts.  This Agreement may be executed in any number
of counterparts, each of which will be an original, but all of which together
shall constitute one and the same instrument. 
Any counterpart of this Agreement that has attached to it separate
signature pages which together contain the signature of all parties hereto
shall for all purposes be deemed a fully executed original.  Facsimile signatures shall constitute
original signatures.

17.           Effect
of Headings.  The section headings
herein are for convenience only and shall not affect the meaning or
interpretation of this Agreement.

18.           Governing
Law.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS OF DELAWARE OR ANY OTHER
JURISDICTION, AND, WHERE APPLICABLE, THE LAWS OF THE UNITED STATES.  THE PARTIES HERETO CONSENT TO BEING SUBJECT
TO THE JURISDICTION OF ANY FEDERAL OR STATE COURT LOCATED IN THE STATE OF
DELAWARE.

[SIGNATURE PAGE
FOLLOWS]

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

	
  

  	
  COMPANY:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  J. L. HALSEY CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ LUIS RIVERA

  	
   

  
	
   

  	
  Name:

  	
  Luis Rivera

  	
   

  
	
   

  	
  Title:

  	
  Interim Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LDN:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LDN STUYVIE PARTNERSHIP

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ WILLIAM T. COMFORT, III

  	
   

  
	
   

  	
  Name:

  	
  William T. Comfort, III,

  	
   

  
	
   

  	
  Title:

  	
  General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ADDISON:

  
	
   

  	
   

  
	
   

  	
  TEXAS ADDISON LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Texas Barrington LLC, its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DAVID R. BURT

  	
   

  
	
   

  	
  Name:

  	
  David R. Burt

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  DIRECTOR:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ DAVID R. BURT

  	
   

  
	
   

  	
  David R. Burt

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BLAIR:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ ANDREW RICHARD BLAIR

  	
   

  
	
   

  	
  Andrew Richard Blair

  	
   

  
					

 

 10EXHIBIT 10.69
 

GUARANTY AND PLEDGE AGREEMENT

dated as of December 15, 2006

among

LECG, LLC

and

THE OTHER PARTIES HERETO,

as Grantors,

and

LASALLE BANK NATIONAL ASSOCIATION,

as the
Administrative Agent

 

   
 

GUARANTY AND PLEDGE AGREEMENT

THIS GUARANTY AND PLEDGE
AGREEMENT dated as of December 15, 2006 (this “Agreement”) is entered
into among LECG, LLC (the “Company”) and each other Person signatory
hereto as a Grantor (together with any other Person that becomes a party hereto
as provided herein, the “Grantors”) in favor of LASALLE BANK NATIONAL
ASSOCIATION, as the Administrative Agent for all the Lenders party to the
Credit Agreement (as hereafter defined).

The Lenders have
severally agreed to extend credit to the Company pursuant to the Credit
Agreement.  The Company is affiliated
with each other Grantor.  The proceeds of
credit extended under the Credit Agreement will be used in part to enable the
Company and the Parent (as defined below) to make valuable transfers to each
other and the other Grantors in connection with the operation of their
respective businesses.  The Company and
the other Grantors are engaged in interrelated businesses, and each Grantor
will derive substantial direct and indirect benefit from extensions of credit
under the Credit Agreement.  It is a
condition precedent to each Lender’s obligation to extend credit under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Administrative Agent for the ratable benefit of all the
Lenders.

In consideration of the
premises and to induce the Administrative Agent and the Lenders to enter into
the Credit Agreement and to induce the Lenders to extend credit thereunder,
each Grantor hereby agrees with the Administrative Agent, for the ratable
benefit of the Lenders, as follows:

SECTION 1  DEFINITIONS.

1.1           Unless otherwise
defined herein, terms defined in the Credit Agreement and used herein shall
have the meanings given to them in the Credit Agreement.

1.2           When used herein the
following terms shall have the following meanings:

Agreement has the meaning set forth in the
preamble hereto.

Collateral means (a) all of the Pledged Notes, now
owned or at any time hereafter acquired by any Grantor or in which any Grantor now
has or at any time in the future may acquire any right, title or interest, (b)
all books and records pertaining to any of the foregoing, (c) all Proceeds and
products of any of the foregoing, and (d) all collateral security and
guaranties given by any Person with respect to any of the foregoing.  Where the context requires, terms relating to
the Collateral or any part thereof, when used in relation to a Grantor, shall
refer to such Grantor’s Collateral or the relevant part thereof.

Company Obligations means all Obligations of the Company.

Guarantor Obligations means, collectively, with respect to
each Guarantor, all Obligations of such Guarantor.

Guarantors means the collective reference to each
Grantor other than the Company, if any.

Intercompany Note means any promissory note evidencing
loans made by any Grantor to any other Grantor.

Paid in Full means (a) the payment in full in cash
and performance of all Secured Obligations, (b) the termination of all
Commitments and (c) either (i) the cancellation and return to the
Administrative Agent of all Letters of Credit or (ii) the cash
collateralization of all Letters of Credit in accordance with the Credit
Agreement.

Parent means LECG Corporation, a Delaware
corporation.

Pledged Notes means all promissory notes listed on Schedule
1, as amended from time to time, and all other Intercompany Notes at any
time issued to any Grantor.

Proceeds means all “proceeds” as such term is
defined in Section 9-102(a)(64) of the UCC and, in any event, shall include all
income from the Pledged Notes, collections thereon or distributions or payments
with respect thereto.

Secured Obligations means, collectively, the Company
Obligations and Guarantor Obligations.

UCC means the Uniform Commercial Code as in
effect on the date hereof and from time to time in the State of
Illinois, provided that if by reason of mandatory provisions of law, the
perfection or the effect of perfection or non-perfection of the security
interests in any Collateral or the availability of any remedy hereunder is
governed by the Uniform Commercial Code as in effect on or after the date
hereof in any other jurisdiction, “UCC” means the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof
relating to such perfection or effect of perfection or non-perfection or
availability of such remedy.

SECTION 2  GUARANTY.

2.1           Guaranty.  (a) Each of the Guarantors hereby, jointly
and severally, unconditionally and irrevocably, as a primary obligor and not
only a surety, guaranties to the Administrative Agent, for the ratable benefit
of the Lenders and their respective successors, indorsees, transferees and
assigns, the prompt and complete payment and performance by the Company when
due (whether at the stated maturity, by acceleration or otherwise) of the
Company Obligations.

(b)           Anything herein or
in any other Loan Document to the contrary notwithstanding, the maximum
liability of each Guarantor hereunder and under the other Loan Documents shall
in no event exceed the amount which can be guarantied by such Guarantor under
applicable federal and state laws relating to the insolvency of debtors (after
giving effect to the right of contribution established in Section 2.2).

 2
 

(c)           Each Guarantor
agrees that the Secured Obligations may at any time and from time to time
exceed the amount of the liability of such Guarantor hereunder without
impairing the guaranty contained in this Section 2 or affecting the
rights and remedies of the Administrative Agent or any Lender hereunder.

(d)           The guaranty
contained in this Section 2 shall remain in full force and effect until
all of the Secured Obligations shall have been Paid in Full.

(e)           No payment made by
the Company, any of the Guarantors, any other guarantor or any other Person or
received or collected by the Administrative Agent or any Lender from the
Company, any of the Guarantors, any other guarantor or any other Person by
virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Secured Obligations shall be deemed to modify, reduce, release or otherwise
affect the liability of any Guarantor hereunder which shall, notwithstanding
any such payment (other than any payment made by such Guarantor in respect of
the Secured Obligations or any payment received or collected from such
Guarantor in respect of the Secured Obligations), remain liable for the Secured
Obligations up to the maximum liability of such Guarantor hereunder until the
Secured Obligations are Paid in Full.

2.2           Right of
Contribution.  Each Guarantor hereby
agrees that to the extent that a Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Guarantor shall be
entitled to seek and receive contribution from and against any other Guarantor
hereunder which has not paid its proportionate share of such payment.  Each Guarantor’s right of contribution shall
be subject to the terms and conditions of Section 2.3.  The provisions of this Section 2.2
shall in no respect limit the obligations and liabilities of any Guarantor to
the Administrative Agent and the Lenders, and each Guarantor shall remain
liable to the Administrative Agent and the Lenders for the full amount
guarantied by such Guarantor hereunder.

2.3           No Subrogation.  Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Company or any other Guarantor or any collateral security or
guaranty or right of offset held by the Administrative Agent or any Lender for
the payment of the Secured Obligations, nor shall any Guarantor seek or be entitled
to seek any contribution or reimbursement from the Company or any other
Guarantor in respect of payments made by such Guarantor hereunder, until all of
the Secured Obligations are Paid in Full, no Letter of Credit shall be
outstanding and the Commitments are terminated. 
If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Secured Obligations shall not
have been Paid in Full, such amount shall be held by such Guarantor in trust
for the Administrative Agent and the Lenders, segregated from other funds of
such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned
over to the Administrative Agent in the exact form received by such Guarantor
(duly indorsed by such Guarantor to the Administrative Agent, if required), to
be applied against the Secured Obligations, whether matured or unmatured, in
such order as the Administrative Agent may determine.

 3
 

2.4           Amendments, etc.
with respect to the Secured Obligations. 
Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to
or further assent by any Guarantor, any demand for payment of any of the
Secured Obligations made by the Administrative Agent or any Lender may be
rescinded by the Administrative Agent or such Lender and any of the Secured
Obligations continued, and the Secured Obligations, or the liability of any
other Person upon or for any part thereof, or any collateral security or
guaranty therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Lender, and the Credit Agreement and the other Loan Documents and
any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Administrative Agent (or the Required Lenders or all the Lenders, as the case
may be) may deem advisable from time to time. 
Neither the Administrative Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by
it as security for the Secured Obligations or for the guaranty contained in
this Section 2 or any property subject thereto.

The Administrative Agent or any Lender may, from time to time, at its
sole discretion and without notice to any Guarantor (or any of them), take any
or all of the following actions:  (a)
retain or obtain a security interest in any property to secure any of the
Secured Obligations or any obligation hereunder, (b) retain or obtain the
primary or secondary obligation of any obligor or obligors, in addition to the
undersigned, with respect to any of the Secured Obligations, (c) extend or
renew any of the Secured Obligations for one or more periods (whether or not
longer than the original period), alter or exchange any of the Secured
Obligations, or release or compromise any obligation of any of the undersigned
hereunder or any obligation of any nature of any other obligor with respect to
any of the Secured Obligations, (d) release any guaranty or right of offset or
its security interest in, or surrender, release or permit any substitution or
exchange for, all or any part of any property securing any of the Secured
Obligations or any obligation hereunder, or extend or renew for one or more
periods (whether or not longer than the original period) or release,
compromise, alter or exchange any obligations of any nature of any obligor with
respect to any such property, and (e) resort to the undersigned (or any of
them) for payment of any of the Secured Obligations when due, whether or not
the Administrative Agent or such Lender shall have resorted to any property
securing any of the Secured Obligations or any obligation hereunder or shall
have proceeded against any other of the undersigned or any other obligor
primarily or secondarily obligated with respect to any of the Secured
Obligations.

2.5           Waivers.  Each Guarantor waives any and all notice of
the creation, renewal, extension or accrual of any of the Secured Obligations
and notice of or proof of reliance by the Administrative Agent or any Lender
upon the guaranty contained in this Section 2 or acceptance of the
guaranty contained in this Section 2; the Secured Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guaranty contained in this Section 2, and all dealings between the
Company and any of the Guarantors, on the one hand, and the Administrative
Agent and the Lenders, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon the guaranty contained
in this Section 2.  Each Guarantor
waives 

 4
 

(a) diligence, presentment, protest, demand for payment and notice of
default, dishonor or nonpayment and all other notices whatsoever to or upon the
Company or any of the Guarantors with respect to the Secured Obligations, (b)
notice of the existence or creation or non-payment of all or any of the Secured
Obligations and (c) all diligence in collection or protection of or realization
upon any Secured Obligations or any security for or guaranty of any Secured
Obligations.

2.6           Payments.  Each Guarantor hereby guaranties that
payments hereunder will be paid to the Administrative Agent without set-off or
counterclaim in the applicable Agreed Currency at the office of the
Administrative Agent specified in the Credit Agreement.

SECTION 3  GRANT OF SECURITY INTEREST.

Each
Grantor hereby assigns and transfers to the Administrative Agent, and hereby
grants to the Administrative Agent, for the ratable benefit of the Lenders and
(to the extent provided herein) their Affiliates, a continuing security
interest in all of its Collateral, as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Company Obligations or the Guarantor
Obligations, as the case may be.

SECTION 4  REPRESENTATIONS AND WARRANTIES.

To induce the Administrative Agent and the Lenders to
enter into the Credit Agreement and to induce the Lenders to make their
respective extensions of credit to the Company thereunder, each Grantor jointly
and severally hereby represents and warrants to the Administrative Agent and
each Lender that:

4.1           Title; No Other
Liens.  The Grantors own each item of
the Collateral free and clear of any and all Liens or claims of others.  No financing statement or other public notice
with respect to all or any part of the Collateral is on file or of record in
any public office, except filings for which termination statements have been
delivered to the Administrative Agent.

4.2           Perfected First
Priority Liens.  The security
interests granted pursuant to this Agreement (a) upon delivery of the Pledged
Notes to the Administrative Agent, together with note powers executed in blank,
will constitute valid perfected security interests in all of the Collateral in
favor of the Administrative Agent, for the ratable benefit of the Lenders, as
collateral security for each Grantor’s Obligations, enforceable in accordance
with the terms hereof against all creditors of each Grantor and any Persons
purporting to purchase any Collateral from each Grantor and (b) are prior to
all other Liens on the Collateral in existence on the date hereof except for
Permitted Liens for which priority is accorded under applicable law.  The actions specified in clause (a) constitute
all of the actions necessary to perfect all security interests granted
hereunder.

 5
 

4.3           Pledged Notes.

(a)           Each of the Pledged
Notes constitutes the legal, valid and binding obligation of the obligor with
respect thereto, enforceable in accordance with its terms (subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing).

(b)           Schedule 1,
as supplemented from time to time by the Grantors, each of which supplements
shall operate as an amendment to this Agreement when provided to the
Administrative Agent, lists all of the Pledged Notes owned by each
Grantor.  Each Grantor is the record and
beneficial owner of, and has good and marketable title to, the Pledged Notes
pledged by it hereunder, free of any and all Liens or options in favor of, or
claims of, any other Person.

SECTION 5  COVENANTS.

Each Grantor covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Agreement until the Secured Obligations shall have been Paid in Full:

5.1           Such Grantor shall
maintain the security interest created by this Agreement as a perfected
security interest having the priority described in Section 4.2 and shall
defend such security interest against the claims and demands of all Persons
whomsoever.

5.2           At any time and from
time to time, upon the written request of the Administrative Agent, and at the
sole expense of such Grantor, such Grantor will promptly and duly execute and
deliver, and have recorded, such further instruments and documents and take
such further actions as the Administrative Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted.

SECTION 6  REMEDIAL PROVISIONS.

6.1           Pledged Notes.

(a)           Unless an Event of
Default shall have occurred and be continuing and the Administrative Agent
shall have given notice to the relevant Grantor of the Administrative Agent’s
intent to exercise its corresponding rights pursuant to Section 6.1(b),
each Grantor shall be permitted to receive all payments made in respect of the
Pledged Notes.

(b)           If an Event of
Default shall occur and be continuing and the Administrative Agent shall give
notice of its intent to exercise such rights to the relevant Grantor or
Grantors, (i) the Administrative Agent shall have the right to receive any and
all distributions, payments or other Proceeds paid in respect of the Pledged
Notes and make application thereof to the Obligations in such order as the
Administrative Agent may determine, and (ii) any or all of the Pledged Notes
shall be registered in the name of the Administrative Agent or its nominee, 

 6
 

and the Administrative Agent or its nominee may thereafter exercise any
and all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such Pledged Notes as if it were the
absolute owner thereof (including the right to exchange at its discretion any
and all of the Pledged Notes upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or other
structure of any Issuer, or upon the exercise by any Grantor or the
Administrative Agent of any right, privilege or option pertaining to such
Pledged Notes, and in connection therewith, the right to deposit and deliver
any and all of the Pledged Notes with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and conditions as
the Administrative Agent may determine), all without liability except to
account for property actually received by it, but the Administrative Agent
shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.

(c)           Each Grantor hereby
authorizes and instructs each Issuer of any Pledged Note pledged by such
Grantor hereunder to (i) comply with any instruction received by it from the
Administrative Agent in writing that (x) states that an Event of Default has
occurred and is continuing and (y) is otherwise in accordance with the terms of
this Agreement, without any other or further instructions from such Grantor,
and each Grantor agrees that each Issuer shall be fully protected in so
complying and (ii) unless otherwise expressly permitted hereby, pay any
distributions or other payments with respect to the Pledged Notes directly to
the Administrative Agent.

6.2           Proceeds to be
Turned Over to Administrative Agent. 
If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, all Proceeds received by any Grantor
consisting of cash, checks and other cash equivalent items shall be held by
such Grantor in trust for the Administrative Agent and the Lenders, segregated
from other funds of such Grantor, and shall, forthwith upon receipt by such
Grantor, be turned over to the Administrative Agent in the exact form received
by such Grantor (duly indorsed by such Grantor to the Administrative Agent, if
required).  All Proceeds received by the
Administrative Agent hereunder shall be held by the Administrative Agent in a
collateral account maintained under its sole dominion and control.  All Proceeds, while held by the
Administrative Agent in any collateral account (or by such Grantor in trust for
the Administrative Agent and the Lenders) established pursuant hereto, shall
continue to be held as collateral security for the Secured Obligations and
shall not constitute payment thereof until applied as provided in Section
6.5.

6.3           Application of
Proceeds.  If an Event of Default
shall have occurred and be continuing, at any time at the Administrative Agent’s
election, the Administrative Agent may apply all or any part of Proceeds from
the sale of, or other realization upon, all or any part of the Collateral in
payment of the Secured Obligations in such order as the Administrative Agent
shall determine in its discretion.  Any
part of such funds which the Administrative Agent elects not so to apply and
deems not required as collateral security for the Secured Obligations shall be
paid over from time to time by the Administrative Agent to the applicable
Grantor or to whomsoever may be lawfully entitled to receive the same.  Any balance of such Proceeds remaining after
the Secured Obligations shall have been Paid in Full shall be paid over to the
applicable Grantor or to whomsoever may be lawfully entitled to receive the
same.  In the absence of a specific 

 7
 

determination by the Administrative Agent, the Proceeds from the sale
of, or other realization upon, all or any part of the Collateral in payment of
the Secured Obligations shall be applied in the following order:

FIRST, to the
payment of all fees, costs, expenses and indemnities of the Administrative
Agent (in its capacity as such), including Attorney Costs, and any other
Secured Obligations owing to the Administrative Agent in respect of sums
advanced by the Administrative Agent to preserve the Collateral or to preserve
its security interest in the Collateral, until paid in full;

SECOND, to the
payment of all fees, costs, expenses and indemnities of the Lenders, pro-rata,
until paid in full;

THIRD, to the
payment of all of the Secured Obligations in respect of the Swing Line Loans to
the Swing Line Lender, until paid in full;

FOURTH, to the
payment of all of the Secured Obligations (other than Bank Product Obligations
and Hedging Obligations) consisting of accrued and unpaid interest owing to any
Lender, pro-rata, until paid in full;

FIFTH, to the
payment of all Secured Obligations (other than Bank Product Obligations and
Hedging Obligations) consisting of principal owing to any Lender, pro-rata,
until paid in full;

SIXTH, to the
payment to the Administrative Agent of an amount equal to all Secured
Obligations in respect of outstanding Letters of Credit to be held as cash
collateral in respect of such obligations;

SEVENTH, to
the payment of all Bank Products Obligations and Hedging Obligations owing to
any Lender or its Affiliates, pro-rata, until paid in full;

EIGHTH, to the
payment of all other Secured Obligations owing to each Lender, pro-rata, until
paid in full; and

NINTH, to the
payment of any remaining Proceeds, if any, to whomever may be lawfully entitled
to receive such amounts.

6.4           Code and Other
Remedies.  If an Event of Default shall
occur and be continuing, the Administrative Agent, on behalf of the Lenders,
may exercise, in addition to all other rights and remedies granted to them in
this Agreement and in any other instrument or agreement securing, evidencing or
relating to the Secured Obligations, all rights and remedies of a secured party
under the UCC or any other applicable law. 
Without limiting the generality of the foregoing, the Administrative
Agent, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may 

 8
 

forthwith sell, lease, assign, give options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do
any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker’s board or office of the Administrative Agent or
any Lender or elsewhere upon such terms and conditions as it reasonably may
deem advisable and at such prices as it reasonably may deem best, for cash or
on credit or for future delivery with assumption of any credit risk.  The Administrative Agent or any Lender shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released.  Each Grantor further agrees, at the
Administrative Agent’s request, to assemble the Collateral and make it
available to the Administrative Agent at places which the Administrative Agent
shall reasonably select, whether at such Grantor’s premises or elsewhere.  The Administrative Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 6.4 in the
order set forth in Section 6.3. 
To the extent permitted by applicable law, each Grantor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any Lender arising out of the exercise by them of any rights hereunder.  If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other disposition.

6.5           Waiver;
Deficiency.  Each Grantor waives and
agrees not to assert any rights or privileges which it may acquire under
Section 9-626 of the UCC.  Each Grantor
shall remain liable for any deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay the Secured Obligations
in full and the fees and disbursements of any attorneys employed by the
Administrative Agent or any Lender to collect such deficiency.

SECTION 7  THE ADMINISTRATIVE AGENT.

7.1           Administrative
Agent’s Appointment as Attorney-in-Fact, etc.  (a) Each Grantor hereby irrevocably
constitutes and appoints the Administrative Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Grantor and in the name of such Grantor or in its own name, for
the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement,
and, without limiting the generality of the foregoing, each Grantor hereby
gives the Administrative Agent the power and right, on behalf of and at the expense
of such Grantor, without notice to or assent by such Grantor, to do any or all
of the following:

(i)            in the name of such Grantor or its
own name, or otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of moneys due
with respect to any Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all such moneys due
with respect to any other Collateral whenever payable; and

 9
 

(ii)           (1) direct any party liable for any
payment under any of the Collateral to make payment of any and all moneys due
or to become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (2) ask or demand for, collect, and receive
payment of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral; (3) commence
and prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral; (4) defend
any suit, action or proceeding brought against such Grantor with respect to any
Collateral; (5) settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, give such discharges or releases as
the Administrative Agent may deem appropriate; and (6) generally sell,
transfer, pledge and make any agreement with respect to or otherwise deal with
any of the Collateral as fully and completely as though the Administrative
Agent were the absolute owner thereof for all purposes, and do, at the Administrative
Agent’s option and such Grantor’s expense, at any time, or from time to time,
all acts and things which the Administrative Agent deems necessary to protect,
preserve or realize upon the Collateral and the Administrative Agent’s security
interests therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.

Anything in this Section
7.1(a) to the contrary notwithstanding, the Administrative Agent agrees
that it will not exercise any rights under the power of attorney provided for
in this Section 7.1(a) unless an Event of Default shall have occurred
and be continuing.

(b)           If any Grantor fails
to perform or comply with any of its agreements contained herein, the
Administrative Agent, at its option, but without any obligation so to do, may
perform or comply, or otherwise cause performance or compliance, with such
agreement.

(c)           Each Grantor hereby
ratifies all that such attorneys shall lawfully do or cause to be done by
virtue hereof.  All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.

7.2           Duty of
Administrative Agent.  The
Administrative Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession shall be to deal with
it in the same manner as the Administrative Agent deals with similar property
for its own account.  Neither the
Administrative Agent or any Lender nor any of their respective officers,
directors, employees or agents shall be liable for any failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.  The powers conferred on the Administrative
Agent and the Lenders hereunder are solely to protect the Administrative Agent’s
and the Lenders’ interests in the Collateral and shall not impose any duty upon
the Administrative Agent or any Lender to exercise any such powers.  The Administrative Agent and the Lenders
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and neither they nor any of their 

 10
 

officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder.

7.3           Authority of
Administrative Agent.  Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Administrative Agent and the Lenders, be governed by the Credit Agreement and
by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Grantors, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting, and
no Grantor shall be under any obligation, or entitlement, to make any inquiry
respecting such authority.

SECTION 8  MISCELLANEOUS.

8.1           Amendments in
Writing.  None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except in accordance with Section 15.1 of the Credit Agreement.

8.2           Notices.  All notices, requests and demands to or upon
the Administrative Agent or any Grantor hereunder shall be addressed to the
Company and effected in the manner provided for in Section 15.3 of the
Credit Agreement and each Grantor hereby appoints the Company as its agent to
receive notices hereunder.

8.3           Enforcement
Expenses.  (a) Each Grantor agrees,
on a joint and several basis, to pay or reimburse on demand each Lender and the
Administrative Agent for all reasonable out-of-pocket costs and expenses
(including Attorney Costs) incurred in collecting against any Guarantor under
the guaranty contained in Section 2 or otherwise enforcing or preserving
any rights under this Agreement and the other Loan Documents.

(b)           Each Grantor agrees
to pay, and to save the Administrative Agent and the Lenders harmless from, any
and all liabilities with respect to, or resulting from any delay in paying, any
and all stamp, excise, sales or other taxes which may be payable or determined
to be payable with respect to any of the Collateral or in connection with any
of the transactions contemplated by this Agreement.

(c)           The agreements in
this Section 8.4 shall survive repayment of all (and shall be) Secured
Obligations (and termination of all commitments under the Credit Agreement),
any foreclosure under, or any modification, release or discharge of, any or all
of the Collateral Documents and termination of this Agreement.

8.4           Captions.  Section captions used in this Agreement are
for convenience only and shall not affect the construction of this Agreement.

8.5           Nature of
Remedies.  All Secured Obligations of
each Grantor and rights of the Administrative Agent and the Lenders expressed
herein or in any other Loan Document 

 11
 

shall be in addition to and not in limitation of those provided by
applicable law.  No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.

8.6           Counterparts.  This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts and each such counterpart shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same
Agreement.  Receipt by telecopy of any
executed signature page to this Agreement or any other Loan Document shall
constitute effective delivery of such signature page.

8.7           Severability.  The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.

8.8           Entire Agreement.  This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the parties
hereto and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof and any prior arrangements made with respect to the
payment by any Grantor of (or any indemnification for) any fees, costs or
expenses payable to or incurred (or to be incurred) by or on behalf of the
Administrative Agent or the Lenders.

8.9           Successors;
Assigns.  This Agreement shall
be binding upon Grantors, the Lenders and the Administrative Agent and
their respective successors and assigns, and shall inure to the benefit of
Grantors, Lenders and the Administrative Agent and the successors and assigns
of the Lenders and the Administrative Agent. 
No other Person shall be a direct or indirect legal beneficiary of, or
have any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents. 
No Grantor may assign or transfer any of its rights or Obligations under
this Agreement without the prior written consent of the Administrative Agent.

8.10         Governing Law.  THIS AGREEMENT SHALL BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.

8.11         Forum Selection;
Consent to Jurisdiction.  ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS
AGREEMENT SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE
STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE
DEEMED OR OPERATE TO PRECLUDE THE 

 12
 

ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN
ANY OTHER JURISDICTION.  EACH GRANTOR
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH
ABOVE.  EACH GRANTOR FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS.  EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.

8.12         Waiver of Jury
Trial.  EACH GRANTOR, THE
ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH AND AGREES THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

8.13         Acknowledgements.  Each Grantor hereby acknowledges that:

(a)           it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents to which it is a party;

(b)           neither the Administrative Agent nor
any Lender has any fiduciary relationship with or duty to any Grantor arising
out of or in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Grantors, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, in connection herewith
or therewith is solely that of debtor and creditor; and

(c)           no joint venture is created hereby or
by the other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Grantors and the Lenders.

8.14         Additional
Grantors.  Each Loan Party that is
required to become a party to this Agreement pursuant to Section 10.9 of
the Credit Agreement shall become a Grantor for all purposes of this Agreement
upon execution and delivery by such Loan Party of a joinder agreement in the
form of Annex I hereto.

8.15         Releases.  At such time as the Secured Obligations have
been Paid in Full, the Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Administrative Agent and each
Grantor hereunder shall terminate, all without delivery of any instrument or 

 13
 

performance of any act by any party, and all rights to the Collateral
shall revert to the Grantors.  At the
request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to the Grantors any Collateral held by the
Administrative Agent hereunder, and execute and deliver to the Grantors such
documents as the Grantors shall reasonably request to evidence such
termination.

8.16         Obligations and
Liens Absolute and Unconditional. 
Each Grantor understands and agrees that the obligations of each Grantor
under this Agreement shall be construed as a continuing, absolute and
unconditional without regard to (a) the validity or enforceability of any Loan
Document, any of the Secured Obligations or any other collateral security
therefor or guaranty or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent or any Lender, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by any
Grantor or any other Person against the Administrative Agent or any Lender, or
(c) any other circumstance whatsoever (with or without notice to or knowledge
of any Grantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of any Grantor for the Secured Obligations, in
bankruptcy or in any other instance. 
When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Grantor, the Administrative Agent or any Lender
may, but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against any other Grantor or any
other Person or against any collateral security or guaranty for the Secured
Obligations or any right of offset with respect thereto, and any failure by the
Administrative Agent or any Lender to make any such demand, to pursue such
other rights or remedies or to collect any payments from any other Grantor or
any other Person or to realize upon any such collateral security or guaranty or
to exercise any such right of offset, or any release of any other Grantor or
any other Person or any such collateral security, guaranty or right of offset,
shall not relieve any Grantor of any obligation or liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent or any Lender against
any Grantor.  For the purposes hereof “demand”
shall include the commencement and continuance of any legal proceedings.

8.17         Reinstatement.  This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
Grantor or any Issuer for liquidation or reorganization, should Grantor or any
Issuer become insolvent or make an assignment for the benefit of creditors or
should a receiver or trustee be appointed for all or any significant part of
Grantor’s or and Issuer’s assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and performance of the
Secured Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned by
any obligee of the Secured Obligations, whether as a “voidable preference”, “fraudulent
conveyance”, or otherwise, all as though such payment or performance had not
been made.  In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.

[signature page follows]

 

 14

Each of the undersigned has caused this Guaranty and
Pledge Agreement to be duly executed and delivered as of the date first above
written.

	
  

  	
  LECG, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN C. BURKE

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  LECG CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN C. BURKE

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  LECG CANADA HOLDING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN C. BURKE

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  SILICON VALLEY EXPERT WITNESS GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN C. BURKE

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  

 

	
  

  	
  LASALLE BANK NATIONAL ASSOCIATION, 

  
	
   

  	
  as Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ PATRICK J. O’TOOLE

  
	
   

  	
  Title:

  	
  First Vice President

  

SCHEDULE
1

PLEDGED NOTES

	
  Grantor (owner of Record

  of such Pledged Notes)

  	
   

  	
  Issuer

  	
   

  	
  Pledged Notes

  Description

  
	
  None.

  	
   

  	
   

  	
   

  	
   

  

 

ANNEX I

FORM OF
JOINDER TO GUARANTY AND PLEDGE AGREEMENT

This JOINDER AGREEMENT (this “Agreement”) dated
as of [______] is executed by the undersigned for the benefit of LaSalle Bank
National Association, as the Administrative Agent (the “Administrative Agent”)
in connection with that certain Guaranty and Pledge Agreement dated as of
December 15, 2006 among the Grantors party thereto and the Administrative Agent
(as amended, restated, supplemented or modified from time to time, the “Guaranty
and Pledge Agreement”).  Capitalized
terms not otherwise defined herein are being used herein as defined in the
Guaranty and Pledge Agreement.

Each Person signatory
hereto is required to execute this Agreement pursuant to Section 8.1 of
the Guaranty and Pledge Agreement.

In consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each signatory hereby agrees as follows:

1.             Each such Person assumes all the obligations of a
Grantor and a Guarantor under the Guaranty and Pledge Agreement and agrees that
such person or entity is a Grantor and a Guarantor and bound as a Grantor and a
Guarantor under the terms of the Guaranty and Pledge Agreement, as if it had
been an original signatory to such agreement. 
In furtherance of the foregoing, such Person hereby assigns, pledges and
grants to the Administrative Agent a security interest in all of its right,
title and interest in and to the Collateral owned thereby to secure the Secured
Obligations.

2.             Schedule 1 of the Guaranty and Pledge Agreement is
hereby amended to add the information relating to each such Person set out on
Schedule 1 hereof.  Each such Person
hereby makes to the Administrative Agent the representations and warranties set
forth in the Guaranty and Pledge Agreement applicable to such Person and the
applicable Collateral and confirms that such representations and warranties are
true and correct after giving effect to such amendment to such Schedules.

3.             In furtherance of its obligations under Section 5.1
of the Guaranty and Pledge Agreement, each such Person agrees to deliver to the
Administrative Agent such documentation as the Administrative Agent (or its
successors or assigns) may require to evidence, protect and perfect the Liens
created by the Guaranty and Pledge Agreement, as modified hereby.  Each such Person acknowledges the
authorizations given to the Administrative Agent under Section 7.1    of the Guaranty and Pledge Agreement and
otherwise.

4.             Each such Person’s address for notices under the
Guaranty and Pledge Agreement shall be the address of the Company set forth in
the Credit Agreement and each such Person hereby appoints the Company as its
agent to receive notices hereunder.

5.             This Agreement shall be deemed to be part of, and a
modification to, the Guaranty and Pledge Agreement and shall be governed by all
the terms and provisions of the Guaranty and Pledge Agreement, with respect to
the modifications intended to be made to such agreement, 

which terms are
incorporated herein by reference, are ratified and confirmed and shall continue
in full force and effect as valid and binding agreements of each such person or
entity enforceable against such person or entity.  Each such Person hereby waives notice of the
Administrative Agent’s acceptance of this Agreement.  Each such Person will deliver an executed
original of this Agreement to the Administrative Agent.

[add signature block for each new Grantor]

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